Whether you’re a dentist, chiropractor, realtor or another business owner knowing how to manage and where to find funds for your business is crucial to your overall success and business expansion. The most common reason for small businesses to go out of business is the lack of funds and proper management of their finances. Finding the right loan can seem like a complex task but when you consult with an experienced broker you’ll be able to find loans and even grants to suit your needs.
This blog post is for you if you’ve ever considered buying/selling a business, need to know more about business loan options or would like to find more information on small business investments.
A Business Plan is Key
Knowing how to buy or sell a small business successfully, depends on your business strategy. You need to have a full-proof business plan created by an expert who can consult you on business goals, expansion and financing. Consider why you want to invest in a small business, what the outcome of a successful transaction will look like for you and the business plan of the other party. Going at this in the dark without a real plan on either side is not a good idea.
Require that the business you’re trying to invest in comes up with a business plan that has a return on investment (ROI). You can look and listen to their plan to know if you really want to invest with them. On the flip side of this — if you’re looking for investors for your business you need to prove that you will give them an ROI in a set amount of time-based on your business goals.
Let’s talk about your business goals for a moment. Knowing your plans for the next 3 months, 6 months, 9 months and year is crucial. A Business Strategy typically includes touching on the following topics/questions:
- Who are your ideal customers?
- Where are your ideal customers?
- What are your sales goals (dates and time increments as well)?
- How much financing do you need?
- What will you spend business funds on?
- What product/service do you provide and why should people choose you?
- What is your sales strategy?
- How do you measure business success?
Having a complete business plan with all of the above questions answered is going to be the determining factor for if/when you receive business funding. These are the details that matter when you’re pitching you business ideas or are looking to collaborate with another business to invest in.
Be Sure to Get Everything in Writing
Once you have your business plan up and running it’s time to get everything in writing. Smart business owners consult lawyers for this and depending on your industry that may be the best bet. Developing your business or investing in someone else’s business is one of the most important decisions you are ever going to make.
This is why it’s important to get everything in writing. Legal documents like contracts should be completed by a lawyer. Do the proper research in advance to square away the documents you’ll need. You can always speak with an expert to get the information needed for your specific situation.
Down the line, if something goes wrong with a business connection or transaction you need to have these requirements and plans in writing so you will not be sued or used by someone you’re wanting to invest in. You will need to hire an accountant to assist with tracking finances for your business. This step cannot be overlooked because securing your business loan and paying it back depends on what you spend the business loan on.
Be Responsible and Trustworthy
After you secure your business loan a big congrats is in order. Now, whether you’re the one providing the financing and investing in another small business or maybe you’re the business owner who needs investors. Either way, it’s important to hold up your end of the deal. After all, honesty and integrity are two essential personality traits of successful CEO’s.
The terms for your business loan should be considered when working and spending the investor’s money. Keep the doors of communication open and let your investor know if anything goes wrong. On the flip side of that if you’re the investor encourage the business you’re investing in to talk with you about any issues or problems they may foresee.
When you’re ready to talk about becoming an investor for a small business or getting financing for your own small business contact The Zion Group.
Keith McLaurin | Licensed Commercial Broker ID#01190109 / NMLS#1209195
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