Need Capital for Your Business? Three Steps To Help You With the Capital Crunch.

“There is always plenty of capital for those who can create practical plans for using it.” – Napolean Hill

I am hearing and reading a lot about capital lately.  Or lack thereof mostly.  Could be the commercial banking system being frozen solid.  Or maybe it’s a sign of turning an economic corner.  I’m not sure about you and your business, but we and others are starting to hire salespeople and other new employees.  We are buying new software and hardware.  We are growing and we need capital.  How about you?

I am writing from the perspective of a business owner who constantly needs capital.  I also invest in private companies.  And I work with private investors who invest in private companies.  Sometimes I am a lender.  Many times I am a borrower.  I have also helped hundreds of investors and business owners manage their capital.  Working for over 12 years with the world’s largest investment banks helps too.  We consult with our clients to help them raise money, only when it makes good business sense to do so.  So it’s from nearly 30 years of experience with small business and capital that I share these thoughts.

Whatever your need for business capital may be, the truth is there’s plenty of it out there.  You just need to know how to get it.  And decide what you’re willing to give up to get it.  Some of us will get funded quickly.  Some will never see a dime.  But before you go racing out with your business plan and cleanly-pressed business attire, my question for you is do you really want to do all that it takes to get other people’s capital?  Or can you figure out a few ways to fire up sales and cash flow without having to polish your business plan and raise money?  Think about literally marketing and selling your way to a better financial position.  Because it’s often easier to do this than it is to plan for, market, sell, and raise money from private investors.

The truth is that most of us can’t grow a business without hard core capital.  I’ve written before about capital and in the weeks ahead I’ll share some further stories and insights.  Perhaps we can share ideas and strategies you might want to consider for your own business.   Here’s the ugly truth right now.  Millions of small business owners are starving for capital.  The rules have changed and we as business owners are taking a huge hit when it comes to capital.  I personally lost access to hundreds of thousands in credit for my business.  And forget about me.  There are some real horror stories out there with banks completely leaving companies and the people who created them to hang.

No one in business is immune.  And my personal opinion is the banking system will take years to correct itself.  That doesn’t mean commercial loans won’t get funded.  It means fewer loans will get funded.  It doesn’t mean private investors out there won’t fund your deal.  But they will ask tougher questions and you better be ready to answer them well.  The bottom line is we all need to be creative when it comes to capital.  Not just now.  Always.

Here are three things to consider when it comes to capital for your business.

1.  Think long and hard about whether you want to really commit to raising capital for your business.  If you can’t commit 100% then find a way to grow your business without other people’s capital.  It is a huge commitment of money, time and energy to plan and execute raising private capital, correctly.  The reality is many small business owners will never get a commercial bank to fund their business.  Which means private investors won’t be likely to fund you either.  This is why so many of us do without raising money from other people.  We find our own money in home equity, investment accounts, savings, and scrimping along on a very tight budget until we have cash flow.  Most of us market and sell our way around whatever capital we can get our hands on at the time.  But if you own a business and you need to find capital, be ready to commit to a major effort to raise money, if that’s what you think makes the most sense for your business.

2.  Raise money the right way from private investors.  Private investors, people like me and millions of others, fund private companies.  So do institutions.  But the kind of money I see going into small businesses these days is coming from individual investors.  The little guy so to speak.  I am talking about deals that range in size from $25,000 and up.  Small potatoes.  But if you’re going to raise money from private investors you need to have your act together.  You need to have a simple and clear business plan.  Get help here if you need it.  You probably need legal advise from an attorney who can keep you out of trouble with securities regulators.  You will definitely need to polish your sales skills to deal with individual investors.  And you’re definitely going to need to explain how you plan to use the money you raise so you’ll need to have a solid plan to execute in place.  Most important of all, you must be willing to bear the cost of your capital, both debt and equity.

3.  Be prepared to say no.  I recently turned down an offer from private investor who was interested in investing in our company.  After many long discussions we agreed to not proceed for now.  Unless the terms are right for you and your business, be ready to go without the money.  This is why marketing and selling your way to grow, without raising outside money, is essential.  This is why it’s important to know how to market effectively.  How to sell.  How to service well and get tons of referrals.  How to generate cash flow.  In the meantime, we use credit cards.   Maybe home equity or a loan from a friend.  And this means we don’t have to be distracted with finding and keeping other people’s capital.
So whether you commit to raising money from private investors or choose to go it alone, you have to effectively market and sell.  Right now there’s huge market share that both you and I don’t have.  We could be building more web sites.  We could be selling more SEO and CRM software.  We could be serving more small businesses.  And you could be selling more too.  So once we all figure out how to do this in a way that we generate cash flow and profit, we never look back and we are far less dependent on other people’s capital.

Before you take action on any impulse you may have to attract investors to your business, think.  It’s hard work attracting and keeping other people’s capital.  And it’s hard enough work to start, fund, market and grow a business.  Make a plan.  Be clear on use of proceeds if you were to raise the money.  Do it right.  Or you can market and sell your way to the next level.  Or both.

Feel free to post your comments and questions about capital or any other subject that is business-related.  It’s a great time to be in the business development business.  We love helping entrepreneurs.  We are constantly growing our community of entrepreneurs at WealthNet Partners and we thank you for all your referrals and support.

Private Investors to the Rescue of Small Business

The key to attracting money from private investors is presenting a professional business plan and model for success.

Every day I hear or read about entrepreneurs who hit the wall because they don’t have the capital to get their company to the next level.  The commercial banking system will continue to reel and we will soon feel the brunt of rising commercial defaults and further pressure on American small business.  So what is a small business person supposed to do for money these days?

The key to funding for small business is private capital.  These are individual investors who are qualified to invest in privately-held businesses.  As the commercial banking system struggles to find it’s feet, smart entrepreneurs are meeting and tapping private capital.

Which means if you’re in the game for capital, forget the banks for many months to come.   If you’re serious about raising private money, you need to learn the rules and meet the players in your community, industry, or endeavor.  If you’re someone with investment capital to risk, always consult a professional advisor on these matters, you need to build relationships with people who can introduce you to deals.

There’s a lost of mystery on both sides of the fence.  Business owners don’t always know how the game works.  And private investors don’t know where to find the right deals.  Which is why we will spend some time here in the WealthNet community of entrepreneurs discussing private capital.

Private funding through individual investors willing to hear your story and fund your company is a very viable way to start or fund a business.  But doing so requires that everyone involved do their homework and understand how to their homework and structure a suitable arrangement.

Your comments and questions are always welcome.

Clifford Jones, Founder
WealthNet Partners, LLC
“Discover The Art of Business Development”
Scottsdale, Arizona
Follow up on twitter http://twitter.com/WealthNetTeam
Get LinkedIn with us at http://linkedin.com/wealthnetpartners

Give and Take! Five Pitfalls to Avoid When Pitching Your Business to Angel Investors

On the heels of our highly acclaimed debut video, WealthNet Partners met in collaboration with Hepnova once again to bring you a back to basics video on how to raise money from angel investors.  Hint: you need a professional business plan.

If you can’t have sound at the moment, read the transcript below.

Hello I’m Nicholas DiBiase From Hepnova

Noah Dyer with WealthNet Partners.

We’re here for Advisor Garage and TheFundingGuru.com

Today we’re bringing you a skit to help you raise money.  The idea is that if you give investors what they want in the form of pitching to them what they want to hear, they will let you take their money, or rather give an investment in your business.  And with that in mind, I’ll be playing in this skit a seasoned and wise angel investor.

I’ll be playing the brash young entrepreneur, and demonstrating five common pitfalls that young entrepreneurs can fall into while pitching.

Nicholas, thanks for coming in today.  I’m really excited to hear about this opportunity.

Noah, real happy to be here.  Let me hip you to what’s happening: Social. Media. Magic.  BAM!

Wow… it sounds exciting.  You know what, I didn’t get a business plan earlier.  Did you happen to bring one with you today?

We don’t need a business plan for this.

OK.  Why is that?

Because this represents truly disruptive technology.  It is going to level the playing field and blow everyone else out of the water!

Sounds exciting, and speaking of blowing people out of the water, who are your competitors?

We’ll, really we don’t have any competition, because nobody else has configured the features of twitter , facebook, myspace and Walmart into a single application.

Wow, from facebook to Wal-Mart… that’s a pretty big field.  What problem exactly is your application solving.

Well see Our application has got more whosawhatsits, more flibbertywidgeths, more PHP doohickies, and more Ruby on Rails hozzlewatzits.

Ok.  Well, I’ll be honest with you that’s all over my head.  I wouldn’t know how to run a business like that.  I’m curious, who else is on your management team to help you run the business.

Well, the management team is going to be me… myself, and I.  Ha ha!

Oh, that’s good.  And what experience do you have competing against giants like facebook and Wal-Mart.

Well, for the lats 6 years I’ve been living in my parent’s basement eating Doritos for breakfast, but this is going to change everything!

Yes, I can tell that you would like it to be that way.  I’ll tell you what, usually I’d say that I’ll review your business plan, but since I don’t  have one, I will mull over the things that you’ve shared with me today and if we’re interested I’ll  get back in touch with you.

Or you could just write me the check right now.

Or you could just leave…. All right, so again the 5 pitfalls that we illustrate in this video are: First, not feeling the need to prepare a formal business plan.  Secondly, using the buzz phrase disruptive technology as an excuse for doing that.  Third, not doing a compitive analysis and realizing who your competitors are.  Fourth, not framing your business in terms of the problem it solves, but instead focusing on the features it brings to the table.  And lastly, not justifying and forming a solid management team.

That’s right!  As entrepreneurs sometimes we have to let go of the egoistic preconceptions that we have about how are business should be pitched, and instead  play on the playing field that the investor wants to inhabit.

Absolutely, so my name’s Noah Dyer.  Again I’m with WealthNet Partners.

Nicholas DiBiase from Hepnova.  We want to give a special shout out to Andrew Ive, the Funding guru, and to Marty Zwilling for his education on this topic.  We hope you’ve enjoyed and been able to glean some insight from this video.  And have a fantastic safe, and productive week.

Absolutely!  Take care, and good luck funding your business.

Rock on…. Let’s get out of here.

Do You Need Private Funding for Your Business?

With commercial banks dead in the water these days, and the government trying to play capitalist, it seems to me that private funding is one of the more viable means  of of securing capital for your business.  I am asking for your input here.  Are you looking for private funding?  What are your experiences?  How are you approaching investors?  Would you like input on this issue?  Post your comments and questions here.

Clifford Jones, Founder
WealthNet Partners, LLC
“Discover The Art of Business Development”
Scottsdale, Arizona
Follow up on twitter http://twitter.com/WealthNetTeam
Get LinkedIn with us at http://linkedin.com/wealthnetpartners

Need New Working Capital? Here Are Three Ways to Think About Capital for Your Business

One of my favorite questions for entrepreneurs I meet is, “What’s really holding you back from closing more sales to grow your business in the next 90 days?” The answer to this question tells me a lot about the mindset of the person with whom I am speaking.

We help our clients find capital all the time. But most of us think of working capital in terms of money alone. However, with the banking system in utter turmoil these days, it’s clear that lines of credit are virtually impossible to secure or renew. Which means entrepreneurs need to get creative and think of working capital in more than the traditional, money sense if they really want to grow their business.

Working capital in a financial sense is only one form of leverage we use to grow our businesses. (I’m not talking about buying a new Hummer because your accountant told you it was a good idea. I’m talking about investing wisely in your business to make it grow.) I am talking about thinking out of the box and looking at working capital in more ways than what your banker can do for you.

Here are three ways to look at working capital in a different light.

1. Intellectual capital. How you think and act is the basis of your intellectual capital. What kind of energy do you bring to your game? How creative are you? Can you think out of the box about ways to grow your business without your bank giving you a line of credit? Are you willing to get on the phone and make cold calls or reach out to every customer who did business with you in the past? How about the things you can do to close more sales that come into your pipeline? What kind of creative marketing such as a workshop can you leverage to bring in new business? What kind of bootstrap marketing campaign can you think of to drive more leads into your pipeline?

I spoke yesterday with a business owner who said all he needed to do was “get off his butt and make things happen.” When I asked what he meant by this, in the context of internet marketing strategies, he suggested that firing up his old website (that his neighbor designed years ago when times were good) might be a good idea. I doubt it. What he was telling me is he isn’t really motivated enough to invest his time, energy and a little bit of money to develop an effective internet marketing strategy that can generate new business. It seemed there wasn’t much in the way of intellect that would really help him grow his business. Ooops.  This is a classic example of limited intellectual capital. And it’s definitely holding him back.

I am sure he’s really good at what he does. But he’s not in the business of internet marketing or website design. Professional website design and copywriting services are huge factors these days when it comes to generating more leads. Hundreds of millions of searches are done every day. Even the best website won’t help you if no one knows how to find it. The internet also affords tons of opportunity to leverage effective public relations marketing that can be done for a fraction of the cost compared to traditional public relations firms.

2. Human capital. Look at the people in your business and immediate network. What kind of talent are we talking about? How can you better leverage your employees, customers, past customers, suppliers and centers of influence to help you grow your business? What kind of sales training program can you implement that will get you a hefty return on your investment? Could a business coach help you in any way? What about social network marketing campaigns that require only your time and human capital? Don’t think in terms of how you can use people in your network without giving something back. Think in terms of you can help people in a way that would enable the human capital around you to rally for your cause.

Have you ever heard of fusion marketing? It’s all about creating a strategic alliance with other people and leveraging their human capital and existing marketing. You create a plan to market together. For example, we are working now with a major online community of entrepreneurs to offer website reviews. They have the traffic in the community. We have the team to create fantastic Web 2.0 designs and social network marketing. For all the new business that is generated from our joint effort we plan to share the revenue. Our people work with their people and we all win. And no new money out of pocket.  Their creative, human capital combined with ours is a great formula for new business. So think about what you can do in terms of creative marketing planning leveraging human capital in your network.

3. Financial capital. So your banker is out to lunch for the foreseeable future. But you need money to grow your business. What about working with suppliers? How about a financial partnership of some sort? How about bootstrap efforts to create more cash flow by closing more sales. What about private money or hybrid lenders?

Private capital is filling much of the gap when traditional lenders are out of the game. And you need to know how the game works. I had breakfast with a good friend of mine yesterday who funds private companies. Not only does he bring the money to the table when no bank will play, but he brings his knowledge, expertise and internal controls to the business to help the company grow while protecting his investment.

Private money can be a great source of financial capital for a business. Yet few business owners know how the game works. Forget the banks for a while. We can teach you how to attract private capital and alternative funding sources if your bank is out of the game.

Working capital is about more than just money. Think about working capital in ways beyond what your banker will or won’t do for you and learn how to better leverage the three kinds of capital outlined above. Think of your intellectual capital and human capital in a way that you can find leverage to grow your business. Learn how to attract private money if it’s a good fit for your business.

If you want to learn how to attract more capital to your business let us know.  We have a great creative team, a huge network you can leverage, and resources to help you attract new financial capital.

As always, if you have had success in any of these areas, please tell us about it and share your successes with the WealthNet community of entrepreneurs.

Debt and Equity Financing

When I meet new entrepreneurs for the first time I love to ask a very direct and simple question, “What do you want for your business?” Usually the immediate response is, “I want more business.” Another top reply is, “I need more capital.”

WealthNet consultants help entrepreneurs secure debt and equity financing. We have a disciplined and proven process for raising money which is based on our long-term track record and experience.

WealthNet is not associated with a Broker Dealer, licensed to market or sell any security, public or private. We do not offer investment advise to investors. We consult our clients in the process and discipline enabling senior executives and principals to tell their own story and raise private capital within the guidelines of all current state and federal regulations.

For more information about our consulting services to secure debt or equity financing please call (480) 451-6963 or send an email to info@wealthnetpartners.com.

Clifford Jones, Founder
WealthNet Partners, LLC
“Discover The Art of Business Development”
Headquarters located in Scottsdale, Arizona

Debt and Equity Financing

WealthNet Partners, LLC helps entrepreneurs secure debt and equity financing. When working with successful companies the first component of securing financing is being crystal clear on the business plan and the proposed structure for either debt, equity or a variation thereof. The next aspect of raising new capital is the approach taken to traditional providers of debt financing, namely commercial lenders. With the current state of affairs with our debilitated banking system, our clients want us to help them navigate the approach to private investors, angels, and venture capital firms.

Many variables must be taken into consideration when seeking new capital for your organization. For more information regarding securing debt or equity financing please call us at (480) 451-6963 or send an email to info@wealthnetpartners.com.