Our Top Three Political Issues: The Economy, The Economy & The Economy

As we head to the election, one many have compared to as critical to social well being in the US since FDR, we see the polls, the newscasts, the oh so many talking heads, and the bottom line is The Economy is on most everyone's mind. Heck, I can't stop blogging about it! More so, it is what so many of you have said they want to know about more and more frequently.

Wall Street traders act on emotions - fear or stubborn pride affecting waves of decisions to sell or to hang in. Consumers and entrepreneurs hear the news...over and over. Many feel the credit crunch first hand, let alone are watching major portions of life savings or home equity go south for the permanent winter. Just a big, no huge punch in the gut, isn't it? You agree I am sure. Then can you also agree you just can't recall a really good fighter that went down and counted out with only punchs in the gut, can you? OK, most of you are still nodding in agreement. The question isn't whether things have the likelihood of getting worse for awhile as consumer spending further impacts retailers down the supply chain, because that is likely, but it is what you are going to do about this as both a consumer and entrepreneur.

I agree with many things both candidates say and, no matter your leaning, you have to agree with statements they make about our resiliency as a people and society. The fact is that turning any fiscal corner most always is done with the right "can do" attitude, as LBJ once said. That happens one person and one small business at a time, which candidates and all of us embrace and promise their own versions of support.

So, as my last blog suggested, recession proof your business plan as best as you can, but don't be paralyzed into inaction. Take positive and intelligent actions to build your business...maybe just a little slower or in fewer markets, but take the kind of action and effort that we need at all times but particularly during this time.

Feel free to ask for a free consult on your plan at tim@thebusinessplanconsultants.com

Recession Proof Business Plans

The team I organized write and help obtain funding for business plans, with many respected lenders, investors, respected clients and our team framing my blogging opinion on what is a recession proof business plan. Let's be straight - these are tough times and could get tougher. Six months ago I began wondering how politicians could deny we were in a recession then, with the convergence of high inflation of fuel and food while real estate and banking were already in crisis. Now depression is more of a reality than recession, but what does that mean for entrepreneurs?

* Expect to rely on private and public equity for growth and expansion versus debt and lines of credit, areas that will remain tight for a while except for established companies or startups with great credit and/or collateral.

* Keep in mind that the majority of sources for equity do NOT invest or focus on the public markets, including publicly traded companies, and hence this option remains for "viable business plans."

* Understand that viable business plans are somewhat redefined by the impact to consumers more than banks, so think of Wal-Mart and how it and other public companies that offer price conscious goods and services are seeing stock GAINS while so many other consumer-targeted companies are down on Wall Street।

So, now is not a great time to open a GM dealership, but it's a great time to be part of a growing industry resulting in alternative energy vehicles with a bottom line substantial cost benefit analysis that triggers a consumer purchase। There are hundreds of examples I could quote, but it's best to look at all plans one at a time and creatively and reaslistically assess how they are or could be "recesssion proof।" We always welcome a discussion on plans in that regard and more beginning at tim@thebusinessplanconsultants.com

Phased Investment Typical for Middle to Large Sized Business Plans

All too often, business entrepreneurs with potentially viable start-up Business Plans do not understand the typical need to seek a two to three phased equity investment, when seeking equity capital of substance. No matter how great the business model, whether new technology or a great twist on an existing business, start-ups need to “prove” themselves. Whether it be through a phased launch of a major Web site, proving new technology with top-notch third-party independent studies, or an initial marketing plan with proven results, this will usually lead to the remaining capital needed overall.

The business plan itself needs to discuss all major components within this phased approach as do the forecasts, sometimes requiring two to three versions.
We (Tim@thebusinessplanconsultants.com) can help evaluate the need for phasing in Business Plans.

The Economy and Your Business Plan

There is no doubt that the issues on Wall Street and the credit crunch is having an affect on businesses nationwide and across the globe. I am repeatedly asked by entrepreneurs about the ramifications by both existing business owners and those with a startup business seeking capital. The initial response always begins with “don't panic…” and that depends on the business and region of the country, as the current economic crisis has different implications depending on the type of business and funding needed, which generally fall into two categories:

Debt – Business owners and startups alike are clearly facing varied regional difficulties in borrowing money to expand or start up businesses. Notwithstanding, opportunities do exist, with an SBA guaranteed loan being one that should be strongly considered at this time. Our team has a depth of SBA experience and can find the right lender with a track record that suits you in your area.

Equity Investment – My recent discussions with VC and private equity sources clearly indicate that there is little change in their capabilities for equity investments. Private equity and VC investors focus on small to mid-sized companies, not public companies that are taking such a bit hit on Wall Street. They have the capital and continue to invest that capital on viable ventures.
All businesses are unique in their needs, expectations and considerations of how the economy affects them. Therefore, we remain available for a free consult in this regard.