Does Your Money Attitude Need Adjusting?

By Karlene Sinclair-Robinson

It is often noted that our relationship towards money is like a love-hate relationship. This certainly is not a healthy way to approach something that is so vital to our survival. Without money, you could starve to death. Without money, you cannot get a good education. Without money, businesses fail. You get the picture.

With that said, what is your honest and true opinion of “money”? Can you honestly say that you do not have some anxiety or other that puts pressure on you to perform at a higher level, so you can make more? Do you remember what was said about money in your household while growing up? Did you take those bad habits into your business and is it now negatively affecting you?

Seriously looking at monetary issues from your past will help you move forward. Many times, we had a parent or someone in authority who consistently shared their negative way of thinking where money was concerned. If you take a close look at how you approach the concept of money in your personal and business life, you will more than likely see a pattern.

How do you change your attitude toward money? How do you affect change in your relationship with money? What must you consider to develop better practices when it comes to money?  These are just a few questions to think on, so get to work today.

Money Attitude Adjustment

Adjusting your attitude will not happen overnight, nor will ignoring the fact that there is a problem. If you want a better relationship and understanding of “money”, then consider the bullet points below:

• In order to bring about an attitude adjustment, you must first acknowledge the problem. This will help you in the long run. If you must confer with your parent or look within, do so in order to break free of the negative mindset.

• Make a conscious effort to listen to your money talk. Are you always saying “I don’t have any money” or “Money is always tight”? If those questions come close to your money talk, then you need to have a different approach.

• Planning for changes in your life or business includes money at every angle, whether directly or indirectly. When you adjust your thought process about money, you can make plans and set goals that will positively affect your financial bottom line.

• Changing your negative attitude can help you in business and your personal life.

If you think this article is about you, consider taking on the “Money Attitude Adjustment” challenge. Track your results for a year and see what happens. You just might surprise yourself.

Partnership or Business Associate: Which One Should You Choose?

By Karlene Sinclair-Robinson

It is often noted that many startups use the term “Partnership” when describing their business associates or other connections. This can be true, if they have a legal connection. If not, the connection should be clearly stated. When the term is misused, it can put the business owner or their associates in a bad position. For instance, publicly claiming that you are business partners can cause problems later on, if there is legal action taken by a third party.

Partnership Option

Deciding to form a partnership is something that all parties involved must seriously consider. If this is the best option for the individuals involved, seek legal advice before signing on. The most important part of this transaction is the signed agreement documenting the partnership. If this is not done, there is no partnership.

The parties must be of one accord knowing what direction they want the business to take. Their ownership rights, roles and duties must be clearly stated, documented and approved by all involved. Ownership value and profit-sharing must be clearly stated and documented. All parties must follow through in the creation or completion of stated roles and duties to make this a viable and successful partnership.

Remember, this is like a marriage. It cannot be one-sided, it must be balanced. If one or more of those involved do not participate to the fullest extent to make the business a success, it will fail. The partnership will fall apart. Friendships will be lost, marriages can be affected, the business can close, and much more. So, before you choose this option for your business, make sure this is the best solution.

Business Associate Option

This option can come with fewer problems. It can also come with fewer accomplishments. When business owners decide to work together as associates’ verses partners, it can be more beneficial to some than to others. It all boils down to how strong the connection is and why you want to work together. If the “WHY” is not strong enough and the benefits are not clearly stated, this will certainly not work.

On the other hand, if the “WHY” is great enough, this could be one of the best solutions to startup business owners working together. Working together and helping each other can bring about a great success level for startups than before. Knowing that you have others you can call on is important. Being able to help others succeed will make a huge difference.

Finally, whatever avenue you chose, doing your best to make it work will be beneficial to all. Make sure to seek legal advice before signing any partnership agreement. While one option might be more beneficial than the other based on your business needs, it is never a good thing to go into these situations with your eyes closed.

Financing Your Business with Your Family and Friends

By Karlene Sinclair-Robinson

Using your family or friends to finance your business might seem as though it is a non-issue. If your business is in need of a cash infusion and your family or friends can be that conduit, why not go for it? Well, this depends on whether or not you have fully assessed the ramifications of such a transaction.

I was instructing a class of startup business owners not so long ago and this topic became a lively discussion. In the middle of the discussion, it was noted that one of the students was in the middle of this type of financing solution. The student willingly shared some major issues that they had not anticipated when the transaction first occurred but now must figure out how to deal with it.

Here are a few areas that should be addressed prior to borrowing from family and friends:

1.    Legal Advice – Getting legal counsel prior to having these individuals invest their hard earned money in your business is very important. This will help you alleviate major pitfalls that you would not necessarily know about without the help of a qualified attorney.

2.    Put It In Writing! – It is extremely important that when you obtain financing from these sources that it is carefully documented. This documentation or agreement should include parties involved, terms such as length of the loan period, interest rate and ownership rights (if any), any applicable options as agreed to, signatures and date of said transaction.  It is also important to have a third party or a notary signature.

It is important that these investor sources are aware of your business position and plans to repay them. They want to know how soon they can be repaid, and why not?

3.    Unknown Factors – When you engage in this type of a monetary transaction, many things can change. It could be the health of the family member taking a turn for the worse or the friend whose spouse just lost their job and will need their funds back much sooner than anticipated. This can create rifts amongst family members or derail a friendship. You have to work on contingency plans in the event there is such an emergency.

4.    Entity Status – Here is something that some “sole proprietors” tend to overlook. When you borrow from individuals as a sole proprietor and without the protection of written documentation, this can create some major issues.  One such issue could be the spouse of the sick individual who invested in your business could now try to stake a claim in your business. Creating an entity prior to them investing in your business will help you by limiting your “risk exposure”. It does not stop there as section 2 pointed out: PUT IT IN WRITING.

It is easier to prevent some things from happening, mind you though, not everything. With that said, the above four items are solutions to help you figure your way out to additional cash infusion. It is important that all parties are on the same page.

3 Key Points Startups Need to Know about Business Financing

By Karlene Sinclair-Robinson

When startup business owners are backed into a corner with their businesses, it usually boils down to financial liquidity. Many are bootstrapping their way up the entrepreneurial ladder. Startups often see their funds dwindle so quickly that they are not able to stem the financial hemorrhage before they bottom out and end up having to shut down their business before they fully get started.

Some are able to use collateralized loans to move their business forward.  Other startups considered other options including family and friends, credit cards or microloans. These business owners are always on the look-out for ways to get their hands on much-needed cash infusions. Financial liquidity is vital to both survival and growth opportunities. Cash flow is the name of the game. When cash flow projections do not match up, startups can get desperate.

1.    FREE GOVERNMENT MONEY – No Such Thing!
Not too long ago, the question was asked “where can you find FREE Government Money?” First, most established business owners should know by now that there is no such thing as “Free Government Money”. When startups and those considering starting a business look for financing, they often have this mistaken assumption that there is some form of “Free Government Money” out there just waiting for them.  If this was the case, there would be a really long line of business owners waiting for their share of this money!

The government does not just give away money. You have to qualify for any given program, contract, grant or otherwise. If your business fits the requirements for a given government program, then take action to start the process. Keep in mind, when there is money involved, there is always price – even if it is just filling out a lot of paperwork.

2.    STARTUP GRANTS –   

Many startups figure their business would be a good fit for a grant. Winning a grant does not happen overnight. It takes determination and tenacity. In order to win a grant, your business must fit the grant requirements.  Based on a social or economic need, government grants are awarded to appropriate organizations that can provide the qualified solutions to fix the stated problem.  These organizations are primarily classified as “non-profit” or “not-for-profit” entities. It is important the individuals and startup businesses learn this early only on and not waste time trying to finance a “for-profit” business with a grant.

3.    SBA Loans
It is a common misconception that the U.S. Small Business Administration (SBA) finance businesses.  This assumption is only correct in the event of a “declared disaster area”. In all other instances, the SBA does not lend or finance businesses. They approve qualified financing sources such as banks and Certified Development Companies (CDCs). These companies make loans that the SBA will provide a “guarantee” for repayment in the case of the business owner defaults on the loan.

Another assumption that is incorrect is thinking that the SBA is a “non-profit” organization. This is absolutely not true. They are a department of the U.S. government solely focused on the needs of small business.

These are just some of the important parts of business financing that must be understood. Learning the relevance of key opportunities to finance and grow your business will help you make strategic decisions going forward.