are getting into a cash flow stream with history and predictability. It has a cash flow history if it is a going
concern. In a franchise, the franchisor has already taken a lot of the guesswork out of the business and has
established tools to build the business. You still have to do a “due diligence” even with an established
going concern or franchise. I know a businessperson who recently made the statement: “If I knew this is
what $300k was going to get me, I would have never bought [the franchise and this misery]”. All bets were
off after 9/11 and for months this franchise tanked like many businesses.
Business”? I have often thought that my use of debt has involved a lack of creativity on my part. That is to
say, with a little more creativity I might have avoided the use of debt altogether. Like others using debt, I
most likely took an easy solution. Some illustrations on the use of debt might be useful. For example:
I remember a spot welder I felt I “absolutely had to have” for a particular manufacturing operation. “If
only I had that spot welder [insert your own piece of capital equipment here] – I could do more business
[insert what you think the benefit is here]”. I got the welder using debt only to watch it rot in the corner
[like an unused boat, exercise equipment or snowmobile] after only a short period of use. Instead of using
the thought “If only”, a better mental process might be “What can I do as an alternative to going further
into debt”? That thought might lead to creative alternatives like outsourcing the manufacturing process
until volume dictates you own the equipment.
my surprise, a credit card supplier had increased my line of credit $1500. It was precisely what I needed
for payroll. Wow, wasn’t that serendipitous? The company was also thoughtful to supply some blank
checks. Wonderful. So, I made payroll that day. I wonder what that payroll actually cost me.
issues. As a final thought on debt, I will add that family and friends will skew your perspective. I racked
up a lot of debt trying to keep family and friends going, when what I should have done was to hold the line
on debt and let them go. When family and friends are involved, more discipline is required. Letting family
& friends go is tough, but using debt needs perspective.
need to balance the use of any debt against other creative alternatives that might work or even be better. To
get at those alternatives requires some creative mental work on your part. Start by writing a list of 20
alternative ideas. Think out of the box and by the time you are down to number 15, you will have some
viable alternatives to using debt.
survival techniques I used.
See you at the meeting,
Every new and renewing member will get 2 certificates to bring a
prospective member to a meeting to check us out! We will track referrals and recognize you for bringing in
any new members! See Kathy at the registration desk to get your certificates!
a.m.
Minnesota Business Academy Wabasha & Exchange Streets - Downtown St. Paul.
Educational Seminars begin at 6 PM and the Keynote Presentation begins at 7:15 PM
Informal networking at 5:30 PM, at the Minnesota Business Academy.
0272 for Board Meeting location. Board Meetings are open to MEI Members only.
$25 at the door, cash or check – or $20 if you register in advance via the web site or call
Kathy to make your reservation: 651-687-0272.
http://www.mn-entrepreneurs.org/addr_map2.htm
