Preparing for the Journey Towards Debt Financing<\/strong><\/p>\n\n\n\nGeneral principles apply to business operations regardless of what stage a business is currently operating in. The best businesses are run on systems that are repeatable, predictable, efficient and minimize the waste of time and other resources.<\/p>\n\n\n\n
As business needs change, for example making an initial hire or staging your business for sale, even preparing financials for a corporate Board, all have attributes in common. One overriding question to focus on this is: Are you maximizing your Value Proposition? If you are, the great! You have a better chance of obtaining the capital you need in order to continue building and expanding your business. Many kinds of business metrics are measured and compared against peer businesses to help make that determination. <\/p>\n\n\n\n
The banking and lending communities are well aware of these benchmarks and use them to rate your business risk and the chances it will create the revenues needed to service increased debt. This all happens before a lending decision is made.<\/p>\n\n\n\n
As businesses grow, what was a large workload for an individual becomes impossible with a small crew. Additional hiring of employees with specialized skills are needed to properly scale a business. Cash flow monitoring and projecting become critical success areas to pay attention to. Systems and systems integration are driving forces to maintain and increase the value drivers in the company. <\/p>\n\n\n\n
A need for increased and diverse markets emerge that need to be successfully developed for business continuity. Commercial banking relationships are especially critical to be maintained and enhanced to keep reserve capital balances healthy and productive. <\/p>\n\n\n\n
It is typical in this stage of business development that the commercial banking relationships that have been established over time are one of the top reasons businesses continue and not fail during this stage of growth.<\/p>\n\n\n\n
There are businesses that reach several million dollars in sales and are able to survive without elaborate systems. <\/p>\n\n\n\n
The Good \u2018Old flying-by-the-seat-of-the-pants approach has worked for a select few. For a while perhaps. Then it is not unusual to hear of a disaster or legal problem elevate to wipe out substantial value in that business. <\/p>\n\n\n\n
On occasion, an issue will envelop an established business and wipe it out right before an entrepreneur wants to retire and cash out. <\/p>\n\n\n\n
Even at the end stage of a business\u2019s lifecycle, keeping an eye as to what the financials tell you, and keeping the banking relationships secure will enable the transfer of the business at the end to be successful, and return the value of the many years of investments into expansions back to the owners.<\/p>\n\n\n\n
<\/p>\n\n\n\n
By Marshall Doak, SOU SBDC Director<\/p>\n","protected":false},"excerpt":{"rendered":"
From startups to large corporations, when a business wants to expand – whether it be new products or markets or increasing the volume of business transactions – capital is needed to fund that expansion. Expansions always occur in advance of the increased revenues and profits used to pay for the expansions. This brings us to…<\/p>\n","protected":false},"author":26,"featured_media":7103,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","_wp_rev_ctl_limit":""},"categories":[153],"tags":[],"yoast_head":"\n
Let\u2019s Talk Lending and Debt Financing - Southern Oregon Business Journal<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\t\n\t\n\t\n