Portland observer., October 07, 1998, Page 26, Image 26

O c to b e r 7 ,1 9 9 8 • & 10
(Ehe flo rth tn b (f)b»eruer’ß
in o R ity E asiness
Financing Preparations For
Business Expansion
by
L aila F. C ully
G ro w th prov id es a c h a lle n g e ev en
fo r p ro fita b le b u s in e s s e s . A s it c o n ­
sid ers e x p a n s io n , a b u s in e s s n eed s
to do so m e h o m e w o rk . A t a m in i­
tail b u sin e ss o rg a n iz a tio n an d h is­
to ry , a stra te g ic p la n fo r p ro d u c tio n
a n d m a rk e tin g a n d h o w th e lo an w ill
b e u se d an d re p a id . A t th e m in i­
m u m , th e lo an p ro p o s a l sh o u ld in ­
least th ree y ears o f o p e ra tio n s. A t
least o n e y ear sh o u ld b e m o n th to
m onth.
P ro fita b ility a n a ly sis, in c lu d in g
im p a c t o f loan rep ay m en t.
P erso n al In fo rm atio n : In ­
cluding bu sin ess ex p erien ce,
p erso n al b a la n c e sh e e t a n d
c red it h istory. T h is in fo rm a ­
tio n sh o u ld b e p ro v id e d fo r
e a c h p a r t n e r / s to c k h o l d e r
w ith 20 p e rc e n t o r m o re o f
c lu d e:
m u m th a t w o u ld in c lu d e :
- A n a ly sis o f c h a n g e s in
b u sin e ss c o n d itio n s th a t
a re ca u sin g th e e x p a n sio n .
T h e e x p a n s io n sh o u ld b e
w ell d e fin e d .
- D e te r m in in g th e
am o u n t an d ty p e o f fin a n c ­
T h ese p ro jectio n s sh o u ld c o v e r at
th e b u sin ess.
C o llateral: a d e ta ile d d e ­
ing n e c e ss a ry to su p p o rt
the e x p a n sio n . T h e b u s i­
ness w ill u s u a lly fin a n c e
land, b u ild in g a n d e q u ip ­
m e n t a c q u is itio n s w ith
term d eb t. E x p a n s io n s
u su ally re q u ire a d d i
tio n al w o rk in g c a p ita
financing.
- E x a m in in g th e fin a n c ia l s tru c ­
tu re o f th e e x p a n sio n : w h e n a re th e
fu n d s n e e d e d an d fo r h o w lo n g ? F o r
F in a n c ia l S ta te m e n ts : In c o m e
S ta te m e n ts a n d b a la n c e sh e e ts fo r
th e last th re e y e a rs ( i f th e b u sin e ss
h a s b e e n in o p e ra tio n th at lo n g ).
e x a m p le , a ss e t a n d e q u ip m e n t a c ­
q u is itio n m ay re s u lt in a n e e d to
B a la n c e S h eet: D e ta ilin g a sse ts,
lia b ilitie s a n d n e t w o rth , fo r m o st
e x p a n d w o rk in g c a p ita l.
- I f the o w n e rs d e te rm in e a lo a n is
n e e d e d , th e y sh o u ld p re p a re a b u s i­
ness p lan . T h e p ro p o s a l sh o u ld de-
re c e n t fiscal y ear.
C a s h F lo w P ro je c tio n s: D e ta il­
in g th e c o m p a n y ’s c u rre n t a n d fu­
tu re a b ility to p a y its o b lig a tio n s.
scrip tio n o f p ro p erty to se ­
cure the loan, including: q u a l­
ity, co n d itio n , o rig in al c o st
and date o f acq u isitio n , liq u i­
d atio n v alu e and liens, i f any.
E quity: A d d itio n a l e q u ity
to b e in jected i f an y an d so u rc e (s).
M an ag em en t: C u rre n t an d p ro ­
p o se d , i f d ifferen t.
Laila Cully is a Finance Director
at the Oregon Economic Develop­
ment Department. For more infor­
mation. she can be reached at (503)
229-5625. The location o f OEDD is
One World Trade Center, 121 SW
Salmon, Suite 300.
Ten Commandments for Business Success
First: Commit to Your Business
Second: Share Your Profits
Third: Motivate Your Partners
Fourth: Communicate All That You Know
Fifth: Appreciate What Your Associates Do
Sixth: Celebrate Your Success
Seventh: Listen to Everyone in Your Company
Eigth: Succeed Your Customers’ Expectations
Ninth: Control Your Expenses Better Than Competitors
Tenth: Swim Upstream & Avoid Conventional Wisdom
eek
Lim its to Business Growth
by
B rad L ee S mith
G rowth o f a business is a com bina­
tion o f seeing the path forward, prepar­
ing the internal structure for that growth
and taking the actions necessary to ex­
pand into the market. O ne o f the areas
most neglected in business grow th is
changing the blocks that limit growth
before it reaches the action stage.
O ver years o f observ ing m anage­
ment and business, I have developed a
theory that has been proven correct
more than it has been disproven. The
character o f a founder, entrepreneur or
long term m anager o fan organization is
roughly duplicated in the business.
W hatever trait you look at in the leader
o f the organization you w ill see echoes
o f it throughout. It does not matter
whether it is a positive trait such as
generosity o r a negative trait such as an
inability to com m unicate thoroughly,
there iseither duplication orresponseto
it in the personnel, policies and the
culture.
If a m anager has the egoless trait o f
being able to hire individuals w ho have
a greater capacity at anything than he/
she does a great result show s up in the
business. If this is not the case a block
occurs to the ability o f the organization
to grow. This is a very difficult circum ­
stance or characteristic for anyone to
confront and remedy.
In the critical ability o f vision, the
first step in growth, this sam e duplica­
tion o f characteristic m ay also occur.
Perception o f the organization and its
competitive environm ent as a a interac­
tive w holem ustexistw i thin the abilities
o f the culture, personnel and m anage­
m ent for a business to thrive. I f this
global visioning is not com plete and
a p p ro p ria te re s p o n s e s a re n o t
proactively pursued, the business will
eventually self-limit and be over taken
by the competition. Exam ples where
vision has w orked well are Bill Gates
and M icrosoft and also at N ike in its
Brad Lee Smith, an Executive Coach
early growth.
Othei characteristics that are critical
to the first parts o f growth are cultural IQ,
emotional intelligence, the ability to lis­
ten unconditionally, especially by man­
agement andm ostofall the ability to fully
communicate. Howm anymanagershave
gotten to the retrospective stage in a
business glitch and could recall at least
one person telling them at a critical stage
that w here they w ere headed was the road
to disaster. A slight alteration o f the
selves that are the seeds o f their past
and future disasters and also the seeds
o f their next success. The first stages o f
direction in thinking at that m om ent com ­
bined with the ability to listen deeply and
respond could have changed a disaster
into a cash cow.
In m y coaching, I have m anagers
look at the qualities they have in them ­
growth in vis ioning and internal prepa­
ration w ithin the organization are the
m ost sensitive to these potentials. A
great m anager is wil ling to look deeply
at the patterns o f their character and
com pare them to the state o f their
organization. M ost often they w ill see
that the limits to grow th are areflection
o f their ow n w illingness to be open,
seek out opportunities for change and
initiate grow th in themselves.
Brad Smith is an Executive Coach
based in Wilsonville. H ecanbe contacted
for consultation at (503) 570-9697 or e-
mail liim at braelyn@pacmter.net
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