When is the right time to raise capital?

I have a friend who is pursuing a new direction with his business and was looking for some advice.  His existing business has been operating for many years and he has been boot-strapping his new venture.  It looks like he was able to get validation for the idea and even has a few paying customers.  He has used the cash from his operating business to bootstrap this new venture and it looks like he really has a shot at bringing a very innovative (and disruptive) solution to market.  His challenge is to figure out when he should seek financing to support the opportunity.  He could probably continue to nurture the business along and do well however to really capitalize on the opportunity he needs to pre-pay the expenses that come along with capturing a market.

It’s an interesting question/challenge he poised.  I told him to Continue reading “When is the right time to raise capital?”

What would your business be worth today?

This comes up often with small business owners – what is your business worth today?  Many small business owners don’t usually have a clear answer or even an idea of how to value what they are building.  I thought I would share some basic information about how to answer this question for those business owners that may just need a little bit of guidance.

Continue reading “What would your business be worth today?”

Would you borrow more if you could?

Seems like a strange question but if you could borrow more – would you?  Watching the news regarding the debt ceiling events unfolding in the US has me thinking about this question as it relates to individuals and businesses.  Many households hold an informal vote between spouses regarding the borrowing of money.  Many business partners will hold a vote regarding the additional of more debt to their balance sheet.  Just like the US government is trying to pass a much needed vote to raise their debt levels, it is important to remember that borrowing money means you are betting on the future or that you are spending your future today. Continue reading “Would you borrow more if you could?”

Be careful what you ask for (you might just get it) US government shuts down

Yesterday I mused about the US government shutting down (click here) and now watching CNN I am struck by the fact that they actually did it. So now what? The US government will be able to work out a deal and turn the lights back on but until that happens this makes for interesting conversation.  How does a first world country turn off the lights?  How does the one of the most blessed countries in the world call it quits?  There are layers and layers of reasons that go way back in time however is it really that tough to figure out? Continue reading “Be careful what you ask for (you might just get it) US government shuts down”

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So what if the US shuts down? (again)

So the headlines and some Twitter feeds are making mention of a story that seems to be getting tired (and I am not even an American).  The US Government is again in the position of having to make 11th hour decisions and agreements to raise the debt ceiling so that it can meet its obligations that it does not have the cash to pay for.  I say tired because this is not the first time that the US has been in this position and suffice to say that it won’t be the last.  Without a plan or without making very difficult decisions these types of last minute fires are hard to avoid. Continue reading “So what if the US shuts down? (again)”

3 lessons from a 30 minute meeting with an investor

I sat with an investor last week that was looking for some input on a deal that was presented to him through a friend who was seeking short term financing for his company.  On occasion this individual will fund opportunities for clients of mine and we have gotten to know each other pretty well so he asked for my help.  Prior to our meeting the CFO of the company seeking his investment completed our Business Health Check (www.businessmoney.ca) and we used the results to speak about the opportunities and challenges involved with making a decision to fund this request.  Reviewing the Business Health Check results not only provided some insight into this company but also highlighted several other items that immediately came forward which most businesses Continue reading “3 lessons from a 30 minute meeting with an investor”

If the end was near are you ready?

Two articles grabbed my attention this morning – one from the National Post (Krugman warns Canada vulnerable to a ‘big deleveraging shock’) and one from the Globe and Mail (Electric wave jolts car parts maker to innovate).  One article points to the impeding crash that many speak of with respect to Canadians and their level of debt and the other speaks to good old fashion entrepreneurship and taking advantage of opportunities.  For some, paying attention to level of debt in their personal finances or business may not be an issue they focus on each day but there is something to be said about getting out in front of whatever impact will be had once interest rates begin to increase. Continue reading “If the end was near are you ready?”

The cost of tomorrow – how much is it?

I am once again reminded this week of how procrastination has a real dollar cost to a business.  I recently spent time doing some work for a client that had less than 120 days to arrange for some senior debt that would be used to payout some private debt that was put into the company when it was started.  Aside from the accounting work  Continue reading “The cost of tomorrow – how much is it?”