Ask the Experts
Operating Day to Day
Alternate Financing Sources
Failing to secure a business bank loan may not mean the end of your dreams. You might still:
Attract a private investor. Venture capital firms or private individuals called “angels” may be willing to invest in your business if they not only see potential, but also the opportunity to exercise some level of control and/or receive a percentage of future profits. Venture capital firms are often controlled by banks, insurance companies and large corporations; angels are typically wealthy individuals looking to support “hot” ideas. In either case, these types of investors will take risks only if they truly believe in you and/or your product or service, so a business plan heavy on “wow” is essential. See page 34 for a list of Florida venture capital firms or visit Florida Venture Forum at www.flventure.org for more information.
Try crowdfunding. The idea of crowdfunding as a way to underwrite small business growth was triggered by passage of the federal JOBS (short for Jumpstart Our Business Startups) Act in 2012, which allows private companies to solicit investors on the web and opens the door for anyone to become shareholders. SEC rules lay out the specifics, including the paperwork required and limits on how much money an issuer can raise. If crowdfunding appeals to you, look to specialists at your local Florida SBDC office for advice.
Apply for a grant. Some businesses engaged in scientific R&D may qualify for federal grants under the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs if their projects meet certain federal objectives and have high potential for commercialization. Visit www.SBIR.gov for details. For information about grants available in Florida, visit https://florida.grantwatch.com.
Manage Your Money
Wealth is power and money talks. If you want to succeed in business, you must pay attention to ebb and flow. The amount of money flowing into and out of your bank account on a daily basis is an indication of your company’s overall health. A positive cash flow indicates that your liquid assets — cash or other assets that are readily convertible to cash — are increasing and that your business is growing. A negative cash flow signals that your business is on the decline. If you want to stay in business for any length of time, maintaining a positive cash flow should be your No. 1 priority.
My records show that my business is growing and making money, but my bank balance barely covers my monthly expenses. What’s going on here?