How do I finance growth?

To go from a $2million business to a $10million business, you must recognize that your bank is your best friend.

It’s important to work with your bank to project future growth needs, as there are a variety of packages you could have that make sense for your growth.

While working with the bank, be sure you’re still doing a forward-looking 13-week projection and run honest projections*.

The key is to continue communication with your bank, keep them in the loop with what is going on day to day in your business. You need to get very myopic about that too and see what’s really happening.    

*What’s an honest projection? Some of it is looking at your historical performance and extrapolating it forward. Then taking a step back to recognize how you’ve grown historically, and what that means for your future growth.

Bottom line is don’t assume. Don’t assume you will grow your business at 30% top line per year when in reality you’ve grown at 5%. Evaluate what the financial modeling suggests for you to reach your goals, but also run those projections on what you’ve actually done. (Wants/Shoulds vs Reality). So many times businesses will build a model that makes sense, but the business goes nowhere near hitting it. You should have goals, but you also need to build realities too.     

Generally, there is still no need for investors.

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Do I need to take on additional capital?

If you’re in the midst of rapid growth, you have financing options.Here’s what to take into consideration:

  • Consider Mezzanine Financing

  • Don’t take on investors

  • Vendors

  • Incentive-based compensation models for employees 

Don’t settle for content that isn’t customized to your specific situation. Enter your email address below to have a deeper conversation with a Gerber team member about the appropriate approach to tackle this issue. 

 

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Gerber, LLC is not a registered broker/dealer, and is independent of Raymond James Financial Services. Securities are offered through Raymond James Financial Services, Inc. Member FINRA/SIPC.
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