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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