#GrowSmartBiz Conference Recap: Raising Capital with Effective Finance Strategies

Panelists:

- Jeremy Brown (RapidAdvance)
- Edward Tuvin (Capital Bank)
- Denise O’Berry (The Small Business Edge Corp)
- Shannon Nash (Nash Management)

Where does small business get financing?

According to Jeremy Brown,  the Wall Street Journal said that in 2004, 46% of small business owners used credit cards to finance their business. He suggests that there isn’t a one best solution. There are a variety of solutions to explore. There is no right or wrong solution to raise capital. But you need to look at what suits you and your business. RapidAdvance provides a cash-based system where the potential recipient is a just established company (~1 year). The product factors in a certain period of payment and looks at a percentage of the business that comes from credit cards and also what the business can afford to pay back based on cash flow. Companies that use RapidAdvance are for expansion purposes. It’s not a loan so there’s no personal guarantee. Can be more expensive than a traditional bank loan.

In seeking a loan, what’s the best way to present your case?

Edward Tuvin says that you should take the time and show that you care when applying for a loan. Don’t go into a small Rockville bank with a Bank of America loan application – just not sensitive to the process. Make sure that you write and understand your business plan in-depth so that when you’re asked questions, you’re going to have the answers, not the answers given by someone else who may have wrote the business plan. Make sure that you understand the talk of the lender – you have only ONE shot. Make sure you convince the lender that you’re going to pay the loan back, but you’re going to be the winner of this horse race.

Every business doesn’t need a business plan for a loan, but it’s really important for owners to go through a business plan exercise to understand who their competitors are.

What’s the best way to manage the cash flow needs of our business?

Denise O’Berry says that you should do a cash-flow budget that looks out 6 to 12 months and projects what money will come in to pay off expenses. You need to base some of this on your past track record but also what kind of marketing strategies are going to be taken during this time period – and need to be conservative. O’Berry loves to look out 12 months to cover all expenses that may not occur regularly – 9 out of 10 times, you’re going to see any and all expenses. Also make sure you include your cash target for every month. Actively participate in this process.

You are not a bank. You need to make sure that you’re doing everything to manage your receivables and have your customers pay your invoice as quickly as possible. Make sure you put a due date on your invoices.

Is it necessary to have a software program to manage your financial projections?

Shannon Nash thinks that it’s great to have a program to enter in the numbers to help you project – but it’s not great to tell your story. YOU need to tell the story. Don’t be afraid of the numbers. Embrace the numbers. The software program is a tool.

Some small businesses can’t afford an accountant or financial advisor. Nash suggests that you check out SCORE.

SCORE is a bunch of retired executives around the country that will help you with your business plan for FREE. Nash recommends you set up an appointment with a SCORE counselor and then talk to your smartest friend and see if they’re going to buy into the program.

Tags: GrowSmartBiz Conference, growsmartbiz small business finance, kenneth yeung, raising capital small business, small business, small business financing, thelettertwo

This entry was posted on Wednesday, September 30th, 2009 at 4:00 pm and is filed under Grow Smart Business Conference, Small Business, Videos. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.