Tuesday, September 16, 2008

Lehman Bros. And Your Small Business

There is a certain feeling entrepreneurs have about growth: "You are either moving forward and growing your business, or you're moving closer to extinction."
This country has been the beneficiary of this thought process. Small business, for the past 20 years, has been the economic engine of this country, continually adding employment. Access to capital has been the driving force for this growth.
This is why the news on Wall Street of the collapse of Lehman Bros. is distressing. Borrowing money will become harder for smaller firms. Right now, local bankers are saying all the right things. "Money is available," ""If you have a good deal, we'll make it." We'll see how that all holds up. You certainly can't blame the banks for being more cautious.
If you are one of the unfortunate ones who cannot get a bank to say yes, it's time to look at other sources of capital. Sources such as angel investors, nonbank lenders and factors may all help capitalize your business. They all have their ups and downs and different costs, but they can still help you grow your business. Even bartering can help entrepreneurs pay for goods and services. State and local governments also have funding programs that help alleviate some of the bank's risk.
Access to capital might tighten, but there are still sources of capital available for entrepreneurs.

Monday, September 15, 2008

Perseverance Pays

Business ownership can be a humbling experience. As soon as you think you've got things figured out, it seems the bottom drops out from under you.

That was the case for Tracy Markie's Engenuity Systems, Inc., when the Arizona firm topped $1 million in sales after its third year. Then the bottomed dropped.

Markie's partner left to start another company, taking 11 of the firm's 12 employees with him. The company, needless to say, was devastated.

But Markie didn't quit. He restarted the company in a spare bedroom of his home and has since become a major distributor of networked-control devices, electrical systems to control light bulbs, switches, appliances and machines by connecting them into a single communications network.

The company now employs 17, with revenues reaching $6.5 million in 2007. Oh, and he recently moved the company out of his spare bedroom and into a 4,000-square-foot facility.

It seems most successful entrepreneurs have this type of story. The key to turning a tragic event into a happy ending is perseverance. A trait all entrepreneurs need to succeed.