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Many people get into
business with a plan of what they want to do and how they are
going to do it. The biggest thing that holds them back is money.
Through out our business
lives and personal lives, cash-flow is always the biggest
concern we have. In business without cash-flow we are short
lived. I want to address today four of the biggest threats to
our cash-flow. I call them the Four F's of funding a business.
Remember with all of these you will need the help of your
professional team to make sure you cover your basis correctly.
So talk to you your attorney, banker, accountant, insurance
agent and financial advisors before you do anything. This is not
advice, just things to consider.
The first F is what all
want to achieve but fail to fund---FLOURISH. In more instances
than one would believe it is the rapid growth of a business that
kills it. The business is successful beyond what one expected
but did not plan for rapid expansion; they have no how-to guides
to train new team members; they have no plan or budget for how
to compensate team members, they are forced to react. Too often
they enter into a business as an experiment, they are going to
try it out, because they don't know if it will succeed. When it
does they are totally unprepared and find themselves facing
their worst fear, failure. When one enters into business one
needs to plan to flourish.
The Second F is FINANCIAL
DIFFICULTY. This is the equivalent of your business becoming
disabled. Maybe the business owner has health or personal
problems and cannot continue to pull all the weight. Maybe the
business loses a key employee, or maybe the facilities suffer a
fire, flood or other catastrophic loss and the business can not
operate. How do we deal with these situations? Business owners
need to prepare for catastrophe. You must have your plan B's in
place. Plan B's need funding and you must plan to fund plan B.
The Third F is FINISHED. In
this situation the business owner is ready to leave the
business, she wants out. It could have to do with the product or
service becoming obsolete, the age or the health of the owner or
a partner or the business could just fail. A good real estate
investor will tell you that you have to know how you are going
to dispose of a property before you buy it. A business should be
the same way; you have to know your exit strategy. A business
could be sold in its entirety or just the assets in the case of
a bankruptcy or other failure. A poor exit could do great damage
to the cash-flow of your family that you so diligently provided
through the business.
The Final F is FINAL. This
is where the owner or a partner dies and thus the business must
end. This of course can be the most financially devastating to
the most number of people. Unless proper plans are prepared and
funded, the death of one partner could financially ruin all the
partners' families. Most partnerships, corporations and LLC's
establish buy/sell agreements or address the situation in their
by-laws, oftentimes however they fail to plan the funding of
these plans. We must take care to protect our families and the
families of those involved in the business.
So as has been seen there
are essentially four outcomes That need to be funded in
business,-Flourishing, Financial Difficulty, Failure and Final.
Failing to fund any of these could be devastating to your
business, your family or both. The plan for flourishing needs to
be kept up on the most. The others can be taken care of with a
relatively small investment and some wise counsel from your
professional team. Don't be afraid to plan, be afraid of failing
to plan, because this will lead to failure.
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Brian Panichelle is
President of BP Insurance, Inc in Ligonier, PA were he has
led the organization for eight years with continued growth
through word-of-mouth marketing. Brian is also a Referral
Institute Trainer. Brian can be reached via email at
CompeteNow@gmail.com or at 724-238-2148.
Compete-Now was
founded to help small and family owned businesses succeed.
Too many times I have heard, "I can't compete with their
price." The goal of Compete-Now is to empower business
owners to understand their VISION for their business. This
VISION will increase effectiveness which will give your more
time, help you make more money and have a more fulfilling
life.
http://www.competenow.blogspot.com
---- The Authors Blog
http://www.ptsnetworking.blogspot.com
---- Another useful
networking Blog from Michelle R. Donovan, Referrability
Expert. |
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