Business Loans, ideas and opinions, Small Business Finance

#OneQuestion to ask yourself about your business

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Answers are easy. Asking the right question is hard. Over twenty years I have developed a skill for asking questions (to the dismay of my wife and family but that’s for another post). Many businesses get really good at delivering their particular product or service to the market but can experience challenges or problems that end up redirecting their efforts and sometimes causing them to lose sight of what they were trying to achieve in the first place. This past week I had the chance to have a coffee with an individual have known for many years who has had his fair share of challenges but like any good entrepreneur he used his lemons (bad circumstances) to create lemonade. Now that the moments of desperation are somewhat behind him he was looking to get himself on better financial footing and wanted some input from me. I asked him #OneQuestion that changed the rest of our conversation and ended with him sending me a lengthy email with all of his answers. I asked him:

“How much money does your business need for it to do more?”

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growth, ideas and opinions, podcasts, Small Business Finance

What is opportunity cost?

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“…the loss of potential gain from other alternatives when one alternative is chosen.”

Running a business comes with an never ending series of trade offs and there are times when critical decisions need to be made that seem to have greater trade offs than what you may be accustom to. This can be particularly agonizing when a decision involves needing expertise that you may not have access to – like financing. When given an opportunity to profit from a decision that involves needing to find capital, often times entrepreneurs and business owners will either lean in and commit or miss the opportunity as a result of their lack of knowledge. Opportunity cost is a real concept that impacts many businesses but here are some things that might help you if you find yourself in a position where a gain to your business will involve being creative with how you find the capital to take advantage of it.
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ideas and opinions, podcasts, Small Business Finance

Cash in the bank is not profit

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If you have ever been confused about what net profit is you can take comfort in knowing that even the great Sir Richard Branson admits that understanding net profit can be tricky (click here to read more). I have had numerous conversations over the years with entrepreneurs and individuals running businesses that have done a great job explaining how their business generates gross revenue from the products they sell or the services they provide but can’t easily sketch out how the business earns net profit. It can be tricky but it can also be the difference between having a great business and a business that barely gets by or seems to never have enough cash.

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google hangout, podcasts, Small Business Finance

Equipment leasing – things you always wanted to know

Have you ever wondered about what is involved in leasing (or financing) equipment?  I chatted with Danilo (Dan) Terra of Leasex Financial this morning and we covered lots of ground.  Dan is quite optimistic about the current economy here in Alberta and is excited to see the growth that is happening with his clients.  Having been an ex-banker Dan has been able to become a specialist in equipment leasing and financing and he shares his opinions, thoughts and advice on our Google Hangout.

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google hangout, podcasts, Small Business Finance

Is your balance sheet a junk drawer or garage?

I chatted this morning with Calgary based consultant and CA, Brad Celmainis about small business finance.  Brad is an accountant with a great personality who thrives on helping small businesses.  In addition to being somewhat of an Instagram celebrity (click here for his account) Brad specializes as a contract CFO and/or controller.  We chatted about some basic finance topics that every small business owner should consider including why a balance sheet is so important to review on a regular basis and clean-up as necessary.  Brad drew a comparison based on his experience that many business owners treat a balance sheet like a junk drawer or a garage – lots of items in there but no one really knows what they are.

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Dylan Gallagher, podcasts, Small Business Finance

Why wasn’t I approved?

I talk about this often but it’s always good to repeat valuable pieces of information – especially if it saves someone from wasting their time.  One of the biggest misconceptions people have is that their bank has their interests in mind.  I am not saying that banks do not care about their clients but I do think it is important for people to know that banks are businesses not charities.  As such they have a business plan, target customer types, sales goals, profit margins, etc. which all attribute to their ability to help someone looking to borrow money.  Many people think that just because they know their banker they can ask for whatever they want and if the bank says no that they have no other options.  Here is how it really works.

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podcasts, Small Business Finance

Do you really need an investor for your business?

I had a great meeting with a new contact yesterday who was seeking some financing for her business.  When asked what the funds were for she advised that the money would be used for marketing.  Her business has already had a small measure of success and has accumulated a few hundred interested prospects and a handful of customers.  Her reason for wanting to spend money on marketing the business was to try and drive more people to the front door of her business.  I have heard different versions of this story from many entrepreneurs and businesses including Bridge Capital who has had outside investors.

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