Business Financing

How to find financing for small business

A common issue among small businesses is locating capital for expansion or operating funds.

A major tool that can help business is strong cash flow management. Knowing cash demands, cash income flow, and reserve funding is critical. Understanding funding needs sets up the strategy to be used for financing needs whether short term or long.

Options for capital sourcing include:

-        Commercial banks. The local branch for the business can be a real ally. Treat the bank as a partner not an adversary. If the bank manager has a good understanding of the business he/she will be more supportive in times of need. As long as the business has a history of profitability, banks may be more likely to be supportive of expansion of lines of credit. If business treats the bank as an adversary, it is likely to tighten credit in difficult times and increase cost of borrowing until security is improved.

-        Government funding. These programs can offer opportunities to access low interest or even forgivable loans business can use to expand. This is particularly popular if expansion programs improve the environment, or create employment. Federal programs often focus on the environment, export expansion, tourism and other national interests. Provincial interest largely focuses on job creation and in encouraging foreign investment in local communities that will expand growth.

Review opportunities for the best fit.

-        Business Development Bank. This organization can be a source of funding for a variety of needs including expansion of operating funds, inventory expansion, financing of acquisitions including equipment, or buildings, or even acquisition of new businesses. Cost of borrowing may be a little higher than commercial banks but BDC may be more supportive of needs.

-        Private capital. This can be a source in some instances as individuals or some groups seek to invest in opportunities that could generate higher rates of return. Typically these investors will demand much higher rates of return, depending on the risk level and they often expect a multiple return on their investment. Care needs to be taken if private funding is a last resort to ensure the owner does not lose control of the business.

Choose financing options with great care but pay special attention to day to day management of the business in order to minimize the need for outside financing.

Guest blog

 This article was published by friend and former associate Jeffrey F. Paulson.

Paulsen’s Perspectives

"I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel"- Maya Angelou

How does your Lawyer make you Feel?

Typically when a client hires a lawyer, it is because of the education, legal background and life experiences of the lawyer as well as the belief that the lawyer can provide the legal advice, counsel and solutions needed to resolve the client’s legal concerns. The foremost thing on a client’s mind should be selecting the correct lawyer. Selecting the correct lawyer is dependent upon the type of relationship that the client hopes to achieve. Here is a short summary of the types of relationships a client can build with a lawyer:

Highest Level-Trust Based

The highest level of legal advice and counseling a client can receive from a lawyer is based upon trust. This type of relationship takes time to develop and involves focusing on the lawyer-client relationship as individuals. In this type of relationship, the lawyer should be someone that can tell the client what he or she thinks and not what the client wants to hear. The client comes to rely on the lawyer on both a professional and personal level.

Relationship Based

This type of relationship focuses on the client organization and involves a lawyer providing insights and ideas based upon his or her knowledge of the business organization and its objectives. This type of relationship typically leads to multiple interactions between lawyer and client based upon various legal issues and needs. These relationships are longer term and can over time lead to a Trust Based relationship.

Needs Based

This type of relationship is based upon problem solving and providing solutions to a client’s existing problems. Often, this type of relationship is not ongoing and the client needs a lawyer specialized in a particular legal specialty to resolve the immediate legal issue. If there are multiple interactions between the lawyer and the client, this type of relationship can lead to a Relationship Based relationship.

Service Based

This is the most basic relationship that can exist between a lawyer and a client. The lawyer in this instance is retained to answers questions and provide information and legal guidance that is timely and of high quality. This type of relationship may be a one-time engagement or it can potentially develop into a Relationship Based relationship or in rarer situations, a Trust Based relationship.

How the Selection of the Correct Lawyer can make Clients Feel

Unfortunately too often I hear of relationships between lawyers and clients that do not feel good at all. Clients may not like how the lawyer made them feel and frankly the lawyer may not like how the client made them feel. Focusing on the type of relationship the client wishes to establish with a lawyer and having an understanding between the lawyer and client on the type of relationship desired should help avoid these negative feelings.

As a lawyer, I strive to ensure that all my clients never forget how I make them feel and that these feelings are always positive.

Paulsen Law Firm PLLC - "Formed with clients in mind………"Copyright 2011. All rights reserved. Paulsen Law Firm PLLC, Bloomfield Hills, Michigan 48302. 248-456-0646. www.paulsenlawfirm.com

Strategic Planning

Better Strategic Planning

Here are a few key tips to improve your Strategic planning:

1.     Develop a core team. This should include at least 6 leaders/managers from various areas of the company.

2.     Set aside sufficient time for broad strategic thinking. This is not a process to be done ad hoc between other business functions. Find a location where interruptions are minimized.

3.     Ensure the planning group is committed to the organization goals. If the planning group does not buy-in and become part of the process the Strategic plan will be still-born.

4.     Allow free and open discussion in the planning sessions regardless of rank. No one person has a monopoly on all of the good ideas. The CEO should not lead the discussions; hire an outsider if possible to facilitate who can more easily moderate and ensure full participation from all members.

5.     The plan must be implemented when complete. A great plan that sits on a shelf is useless.

6.     Create an action plan for implementation with measurable goals, accountability, and deadlines. Everyone must understand their role in implementation before leaving the session.

7.     Don’t write the plan on a stone tablet. Good strategic plans are flexible enough to respond to market changes but remember it is broad in scope and doesn’t change daily.

8.     Make strategic planning a continuous process not just a single event. Performance reviews should be done no less than quarterly with a focus on results and accountability. There should be clear and meaningful consequences for missed deadlines or failure to achieve goals.