Who wins? - By Strive Masiyiwa


Control or growth? (Part 2)

The first question you must answer is this: What “kind” of money are you looking for? Is it debt or equity? I always let the business decide!

First of all, let me show you the process which allows you to decide. Remember, in my world the business is a separate “persona” (legal entity) and it has the capacity to “tell” me exactly the “kind” of money it needs: I don’t just wake up and say “I need a loan from a bank," or "I need investors.”

It’s the business that “tells” me the “kind” (type) of money it needs.

Let the business “talk”?! Yes, let the business tell you what it needs.

So let’s ask: “Hey, my Business what kind of money do you need?”

Answer (from the Business): “Owner, what does the business plan say?”

This is why we develop a business plan! When done properly, it tells you exactly how much money you need, as the business grows, and it tells you the “kind” of money you need.

__It is the business plan that should tell you whether you need debt or equity.

Debt vs equity financing is one of the most important decisions you will make in your business. (Please take note: I am not going to tell you which choice to make in this Control vs Growth series. I am just going to share my own experiences. You must make your own decisions).

For example, debt allows you to keep control, but it's not always good for the business itself. Can you tell me some of the pros and cons, advantages and disadvantages, of financing your business with debt?

Do you understand, for instance, how interest rates work? How about "compounding"? If you're in the Senior Class, I am sure you do, but if you don't... beware. "Crunch" (analyse) these numbers with care! (You can be sure the bankers and investors are!)

Being turned down by a bank can actually be a blessing in disguise because you could end up bankrupt, or worse, if you get a loan (debt) that you should never have taken in the first place!

__Understanding what “kind” of money you need, debt or equity, is the first thing a serious entrepreneur tries to establish very quickly using the business plan.

Never, ever, outsource the development of a business plan! Yes, so many people think preparing a business plan is something done by an accountant friend to help you apply for a bank loan!

No sir (ma’am)!

Now if the business (through the business plan) has “told” you it will not grow using bank loans or money borrowed from friends, what are you going to do?

Business to Owner: “I want equity capital!”

Time to go to Shark Tank?

Ouch!!

To be continued. . .



Share with social media:


User's Comments:

Heena sharma

I guarantee to give the brilliant mating administrations and consistently attempt to put a grin on face Call Girl Bagar of our clients. The reliable sexy encounters that I get with Call Young ladies are really special. Individuals love to have mind blowing minutes with various darlings and feel completed.

Dec. 4, 2023, 4:51 p.m. Reply
Yuhana

Most of High Profile are young girls and still Call Girls Service Bahror going to universities to complete their graduation. You can spend your time with your girl and make unforgettable moments with her.

Dec. 5, 2023, 2:15 p.m. Reply
Replica fendi shoes

Various replica products will be Replica Ed Hardy Shoes found here and the prices Replica Bally Belt are very favorable. Replica Ysl Handbags You can order your favorite replica products through our website.replica products have appeared as Replica Gucci Belt a result of the customers acclaim. The huge admiration that the exquisite design Replica Polo and high quality Replica Lace Up Shoes Richard Mille Replica Watches of replica products are what triggered the need to produce delicate Replica Bell Ross Watches replica Replica Men Versace Shoes products Replica Chloe Handbags at affordable prices.

Dec. 19, 2023, 12:18 p.m. Reply
Ashely

I found your blog very much informative thanks for sharing keep sharing more! Chunri Dupatta

Dec. 21, 2023, 9:59 p.m. Reply
Shalamar hospital

Trust Shalamar Hospital for top-notch thyroid care. Our dedicated thyroid specialist is committed to managing thyroid issues with precision and compassion, so you can enjoy a healthier and more balanced life.

March 14, 2024, 2 p.m. Reply
Osh university

Osh University is a distinguished medical science university , known for its commitment to advancing healthcare education and research on a global scale.

March 15, 2024, 10:13 p.m. Reply
Qns international

QNS International's business development executive offer expert management services. With strategic insight and industry expertise, we drive growth and success for your business.

March 16, 2024, 12:09 a.m. Reply

Active News and Notices





Allow people to do their jobs! - By Strive Masiyiwa

#JobsMatter (Part 2)
 

Over the years I have talked a lot about the importance of #People in building your business. Now let me tell you something which should be obvious: Allow them to do their jobs! This…


What gives me sleepless nights - By Strive Masiyiwa

#JobsMatter (Part 1)

Congratulations to the 12 #GoGettaz finalists I announced a few days ago at the Abuja Town Hall. At win.kwese.com you'll see fellow entrepreneurs from the Democratic Republic o…