Learning What Matters In Business

The ‘Bottom Line’ is Not Just a Catch Phrase Staying Afloat: Risk and Commitment in Business

“Being good in business is the most fascinating kind of art. Making money is art and working is art and good business is the best art.” – Andy Warhol

You’ve committed your life savings and some of the family’s money to help your business get up and running. You are now hanging on by a shoestring. Or you have gone through an upside, and are now on a financial downside and teetering on the edge of failure financially. Risk is high, and the bottom line is staring at you. But you just know that your business idea is a good one and you should be doing better.

The question is “What are you going to do now?”


If you are 100% committed to your business, if you believe in it passionately, I ask you, “Would someone else not be interested in funding your business? Would you not be able to convince them to invest? What would that take?”
Let’s examine the situation.

Let’s talk about commitment. You are absolutely serious about your business. You work anywhere from 12 – 16 hours a day and sometimes more. You have jumped in with both feet, and you are swimming like mad trying to keep up to every demand and challenge that crosses your path. Where do you go from here as you watch the break-even point start slipping further away from you?
You’ve already committed your own money and family money, and you can see your future going down the drain. What do you do?

“Well, I think there is a very thin dividing line between success and failure. And I think if you start a business without financial backing, you’re likely to go to the wrong side of that dividing line.” – Richard Branson

Most small business owners learn as they go. Sometimes it works. Sometimes it doesn’t. Most small business owners do not have MBA’s. They are often not firmly tuned in to what it may take to sustain and grow a business financially. Many have not completed a viable business plan, and the strategy for continuing what has been created is sometimes pretty fuzzy. Hard to keep a business going under these circumstances; but all is not lost!

Some easy to do pointers on how to begin to deal with this struggle:

  • Find a mentor. This is a top-notch plan. Many have gone before you.
  • Find a coach once you have a little extra cash coming in, rather than going out and celebrating. The top 20% of successful business owners hire coaches.
  • Network with other business owners in your community; they are often going through similar struggles or have survived them and have stories to tell you or ideas that may help you avoid some pitfalls and struggles. You’ll have to evaluate what they say as a fit – or not – for your business.

Business Planning: Reducing Risk

Download a business plan off the web and fill it in. You don’t need a 10 – 20 page version, but you need more than the 1- page version. Work diligently at it. It’s worth it. You will learn much about your business that you may not have thought about thoroughly.

Make an appointment with a banker or a small business association consultant and go armed with questions about what they require before approving a business loan. Approach other business related institutions other than just banks and ask the same questions.

Taking these steps is another way to increase your potential for success and decrease your risk factors. It also shows foresight and is often a good indication of potential for survival.

Do some due diligence on a business plan. (It does not need to be perfect!) They will see you as seeking information and ideas other than just your own. They know that it’s hard to think outside the box when you are in the box.

The evaluation of risk and probabilities in business finance are often not a strong suit for small business owners. But it is one of the top important aspects of managing your business. Turning elsewhere for assistance is not a sign of weakness or failure in your business plan. Quite the opposite!

The “bottom line” people keep talking about is not just a catch phrase.

The bottom line is what determines whether you reach your break-even point and move forward or begin to slide down that slippery slope to insolvency.

Banks and other funding sources often require you to have some money in the game before they will invest. They see your investment as a sign of real commitment to a positive financial outcome.

This is part of their assessment in a market where 50% of small businesses close their doors or declare bankruptcy by the end of the 5th year. That’s quite a risk.

If you truly believe in your business’s potential for success, if you believe in yourself and your product or service and have taken some of the steps identified above, you’ve increased the likelihood that a banker or venture capitalist will consider funding your business to help you sustain it. They will also tell you what else you will have to do to qualify. It’s all information!

If the idea of taking out a loan makes you think you are failing, think again. It is good business if you want to sustain your company and grow towards success. That’s why the shows Shark Tank in the US and Dragons’ Den in Canada (sponsored by Scotiabank Canada) are such popular shows.

Why not consider a loan?

Taking a closer look at business finance is a necessary step for business success. Most successful businesses require financial support at some point. That is the point of venture capital, government business loans and grants, and business development loans from multiple financial institutions. They want you to succeed. But you have to have done your homework and taken strong steps towards building a viable business.

If you have been turning your back on this idea of ‘being beholden’ to someone else, burdened by a financial institution or group of
people, do a 180 and start thinking about it as potential support for your business.

If you believe you can’t fail, consider taking advantage of all your options. It will help ensure that you don’t.

Schedule appointment

Annette Hamm

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