How to Finance Your Business

I was approached by a colleague recently. He needed $50,000 to grow his business and wondered if I would be interested in investing. "Not looking for new investments," I replied.

It got me thinking though. Choices for raising additional capital include debt, equity and profit. Why do so many otherwise intelligent people opt for only debt and equity?

Borrowing money for a private company usually means you need to guarantee the loan with your house and everything else you own. If something goes wrong you're ruined financially not to mention the effect on your family and marriage assuming you still have one.

Selling equity means that you're selling out or liquidating your position at a low value while sacrificing future return. Admittedly, there are those rare companies that can leverage investor equity to achieve a brighter future than would be ordinarily achieved, but they are few and far between.

Which leaves us with profit. Want to grow your business? Sell more. That's right. Book more orders and collect the money. Yeah, I know what you're thinking...that takes more time and more effort than signing a loan document.

Time is on the side of business however. Unlike sports contests which have a defined time limit, business goes on forever (we hope). So get started building your business organically. The discipline of forcing performance through profit growth will guarantee success.

That's the Delivra formula. And it works.

Neil Berman | President & CEO