Yesterday I attended a small business workshop in Billings. There were some great keynotes and like most workshops there were a few duds. The focus was on small business financing and a subject true to my heart, business planning. I’d like to share some of the gems that might help you in your business.
On the subject of financing, Ed Garding from First Interstate Bank shared a few of the must haves for securing debt financing from a bank.
- A good accounting system that has a chart of accounts that clearly shows where your income comes from and what your expenses are.
- Financials that are prepared or regularly reviewed by a Accountant/CPA
- Balance Sheet/Profit & Loss Statement/Statement of Cash Flow
- Three years of past performance and/or three years of projected cash flow.
- If you are creating jobs there are lots of government programs to assist you in your financing search.
- There are SBA programs in place with 10/15/20 year terms with as little as 10% down.
Jack Lawson from Missoula Federal Credit Union shared a few of the must haves for securing debt financing from a credit union.
Credit Unions average size business loan, $153,000
Not industry specific but they do like to loan to businesses that are in the accelerated growth phase of their business.
Their underwriting includes a review of your:
- Cash flow
- Assets, both personal and business
- Does the business make sense
- Your knowledge of the business
- Your credit worthiness as you will almost always have to sign a personal guarantee.
Several equity financing options were presented including:
- Venture Capital Funds by Will Price, Managing Partner of Next Frontier Capital
- Angel Funds by Stan Abel, President & CEO of SiteOne Therapeutics
- Crowd Funding, by Monica Lindeen, Montana Commissioner of Securities and Insurance.
I’m not going to go into much detail on Business Planning, as there really wasn’t anything new, however I will leave you with two important reminders:
1 business plan is a must have to obtain bank financing and should include much of what was described above.
2.“If you don’t know where your going, how are you going to get there?” Casey Stengel
One Keynote speaker worth your time to check out is Diane Smith, CEO and Founder of American Rural, americanrural.org. Her organization is dedicated to creating the infrastructure to enable businesses to start and thrive in rural America. Her message was national and global businesses can exist and thrive in rural areas of Montana.
She told a story to prove our can do attitude; This is from the American Rural Website: http://americanrural.org/theres-a-tree-in-the-road/
There’s a Tree in the Road! From Diane’s Desk, Rural Communications by Diane Smith
A few years after moving to Montana, sometime in 2005 or 2006, I was in Washington, DC, my prior home base, to attend a meeting. I’d stayed involved with some boards and other business on the east coast so a trip to DC wasn’t particularly notable for me. But this time something small occurred that was a big awakening.
As ya’ll know, traffic is a big deal in most large cities. It’s an especially big deal in DC, where you can spend an hour driving two or three miles. So every morning, there are frequent traffic reports on television and radio, alerting local drivers to the delays they’re going to encounter as they drive to work. On this particular trip, the traffic reporter, like clockwork, came on and said, “There’s a tree down across the George Washington Parkway. Traffic is backed up for miles while we wait for the county to arrive to move the tree.” …
My first thought was – I’m so happy to live in Montana! Yes, I was thrilled not to deal with traffic like that anymore. But, I was also happily surprised for an unexpected reason.
When I tell this story around the country, the reaction of folks from small and rural places warms me. First, there’s the knowing chuckle. Then, someone will say, “Nobody had a chain saw?” The next question, still incredulous, is also more serious and more telling, “You mean folks didn’t just get out of their cars and work together to get the tree out of the road?”
That’s the kind of “get it done now” culture that I’ve had the privilege now to know well. And I’m so grateful.
When I build a team or take on a new project, I look for partners and colleagues who are willing to do what it takes to get the tree out of the road. I also look for those who know when they might need help and are willing to call on others to assist (I’m not always good at this, so am especially sensitive to it.)
It reminds me of the old prayer, “Lord, grant me the serenity to accept the things I can’t change, the courage to change the things I can, and the wisdom to know the difference.”
These past few months have been tough on the world. It seems like instability and pain are increasing in so many places. Whether you’re an entrepreneur, raising a family, trying to save a small corner of the globe, or all of the above, there seem to be more trees every day blocking our way into a bright future.
I’m proud to know so many who have the spirit to get out of their cars, work together, and get the trees out of the road. Those folks live all over, but it was those of you from rural and small towns who taught me the most about it. You inspire me. Thanks for clearing the way.