What type of business entrepreneur are you?
What type of business entrepreneur are you? Depending where your business falls in its life-cycle determines what you should be doing to help get you to the next stage of business success.
Each day lenders work with a variety of business entrepreneurs and, no matter their age, experience level or type of business, lenders find business entrepreneurs all fall into one of five categories, depending upon the stage of the business life-cycle they're navigating.
The Crisis Manager is facing a code red situation. This business entrepreneur is dealing with a critical event that could kill their business and action is needed quickly. Typically they need a bit of financial relief and a little breathing room such as debt restructuring, changing the type of finance or changing lenders entirely.
The Plateaued or the would-be expander. These business entrepreneurs aren't failing but they’re not setting the world on fire, either. Whether the management team is suspect or there's just a lack of growth, these companies need a little direction such as pointing them toward the federal Small Business Administration (SBA) to propel them into a more proactive mode.
The Contented is a happy entrepreneur whose business is booming and their finances are in good shape. This is a good time to consider securing a line of credit since it isn't immediately needed it’s a good way to secure a good rate and prepare for potential pitfalls ahead. It's also a good time to see a small business attorney to develop a succession plan.
The Expander is a business entrepreneur who is succeeding, but could still take things to the next level such as adding a new production line, developing new products, or to expand facilities. They are prime candidates for an SBA loan or asset-specific financing rather than general cash flow financing.
The Exiter may sound like a superhero, but they are really someone just looking to maximize the process of cashing out. This sounds easy, but it actually can be both complicated and time consuming. Typically, the clean-up process should begin three years before the actual sale. Choosing the right legal or financial advisers is crucial and it's equally important to complete tasks such as shifting debt off the balance sheet.
There may be five main stages of entrepreneurship, but each requires vastly different aging approaches that must be fine-tuned to tackle each unique circumstance.