Additional Financing?

Why should you look for additional financing to keep growing the business? According to Roger Knight of Coopers & Lybrand, companies that get expansionary capital from a bank or a venture capital firm typically produce 30% to 75% greater income than the average small business.

Growing a company to this stage requires a change of mindset. You can no longer think like you did back in the early start-up days, when you were a small local business. Your vision and goals must expand and you must begin to think on the level of big business. In order to be a successful entrepreneur, you must understand that raising money is a “way of life” in the business world.

As Knight says, “Many businesses with marketable products or services fail because their initial capital is insufficient to support operations through their formative periods.” So if you are going to raise capital, don’t undershoot. “Err on the side of caution if it comes down to that, even if it means giving up a bigger equity stake in the business than you would prefer,” Knight says. “In the long run, a smaller portion of a success story will be worth far more than a bigger ownership share of a failed business.”