Perhaps the most important thing owners and advisors can do is to specifically discuss their different incentives and interests, how they align and how they might diverge. While this may be a difficult or uncomfortable conversation, the fact the owner and advisors are having such a discussion is a very good sign that the owner is going to get the kind of advice and help they actually need from people they can honestly trust. On the other hand, resistance to […]
Business owners need the objective counsel of outside advisors to help them identify and consider these issues to make good judgments. However, owners also need to recognize the pressures and incentives their outside advisors are facing, and which might influence their counsel. For example, outside advisors are often likely to obtain work from the owner if the transaction moves forward, creating an inherent pressure to be optimistic.
While it may be possible to arrange multiple advisor relationships in ways […]
A third way written contracts keep business growth on track is helping to screen customers and partners. Sometimes proposed that having no contract is actually a sign of trust and a good relationship. This may be true in some situations, but not frequently. In fact, a customer or business who shies away from making written commitments to do what they otherwise say they will do is probably someone to avoid because there is a disconnect somewhere. If the trust is […]
A second way a written contract can keep business growth on track is by creating certainty, stability, and predictability. Business growth runs on efficiency. Profit margins exist because the costs of operation are less than the revenue being generated. It is often hard enough for businesses to create profit margins when things are running smoothly. Errors, uncertainty, instability, and confusion in relationships with customers cost a business time and money and will reduce its margins. Written contracts minimize the risk […]
One of the things a business owner can do to help their business grow is to put their sales agreements, service agreements, and all other relationship in which they expect to receive revenue into written contracts.
First, and most importantly, this actually sets the stage to get paid. Too often, businesses fail to get paid merely because they failed to have a written agreement spelling out how, when, and what they would get paid. It is often true that the […]
This month is the Rockies Venture Club’s Angel Capital Summit on March 19-20, 2013 at the University of Denver, Sturm Hall. Partly in recognition of this event, I am going to focus on financing issues for businesses this month. While the Angel Capital Summit is focused on what is sometimes referred to as the angel round of investment, today’s post will give a basic overview of financing options for businesses.
As Charles Crenshaw noted in his post on Growing Your Business, […]