A Tale of Three FishPreneurs
H ave you ever met an entrepreneur who is happy with their lot? Most entrepreneurs I work with are always pushing for their companies to grow and get bigger. At the same time, they struggle with decisions about how big they want to become, how much money to reinvest, and how to go about it. They want more, but theyre not sure how to think about the problems, obligations, and risk that often come with growth. This is what I call the growth dilemma.
Perhaps a tale will help illustrate the point.
Three friends grew up in a small coastal fishing town. As they embarked upon their fishing careers, they didnt forget their roots; but each one tackled the world differently.
One FishPreneur stayed in town. His life didnt change much. He took his pole to the waterfront every day and caught a few fish. He sold them to a store and made a modest living. He made enough to live a safe and peaceful life.
The second FishPreneur wanted more. And while she started on the same path as the first FishPreneur, she attended a business class and wrote a business plan to secure a loan to buy a fleet of five boats. She hired employees and had to keep them motivated and paid to keep her boats on the water so that she could make her debt payments. As the business grew, she needed an office manager to keep track of the paperwork and manage her fleet. She had to rent a small yard to store her boats. She enjoyed her life but didnt enjoy having to spend more time administering and less time on the water.
The third FishPreneur was the most restless. He also bought a few boats and had a crew. But he wanted more. He wanted to raise more money and open a fish-packaging plant. He couldnt do it with debt alone, so he took on some investors to fund the packaging plant. He had a board of directors to worry about and a lot of pressure to keep them happy and make the returns they wanted. He traveled a lot and had cash flow worries as he grew his business. Sadly, he never got out on the water anymore.
The contrasts in the lives of these three FishPreneurs illustrate the choices entrepreneurs make as they decide how to build their businesses. Each FishPreneur decided to grow their business to a different size and complexity. They sorted through their own growth dilemmas and made their choices.
Based on their decisions, they picked different financing comfort zones with various levels of risk and different financing instruments appropriate to the type and size of businesses they built.
REFLECTION
Have you sorted through your growth dilemmas in your business? Are you comfortable with your business size and growth plans? Are you in your financing comfort zonehave you found a financing structure that you are comfortable with to help you reach your goals?
My hope is that this book will help you think through these difficult and very personal decisions.
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About the Author
Ami Kassar is the founder and CEO of MultiFunding LLC. He is a nationally renowned expert on access to capital for entrepreneurs. Hes committed to ensuring that business owners have the best possible access to the capital structures they need to help grow and manage their businesses.
Kassar is regularly featured in the national press and writes a regular column for Inc.com. He has advised the White House, the Federal Reserve Bank, and the Treasury Department on the business credit markets. In addition, Kassar is a regular speaker at trade shows and business events across the country on topics including entrepreneurship and access to capital.
He is the 2015, 2014, and 2013 recipient of the Small Business Influencer Award as well as the 2012 Small Business Advocate Award. Kassar earned his MBA from the University of Southern California and graduated with a BA in American Studies from Brandeis University.
Kassars company, MultiFunding, has helped over seven hundred entrepreneurs across America raise over $300 million of capital for their businesses.
Kassar lives in the suburbs of Philadelphia with his wife, two kids, and two dogs.
Acknowledgments
I once heard the saying, It takes a village to raise a child. I think its also fair to say, It takes a village to write a book.
I want to thank the fifteen entrepreneurs who were profiled in this book and generous enough to share their time and insights with us.
Many people read the manuscript at various points along the way. I want to thank David Nast, Dennis Alter, Chuck Andrews, Tripp David, Arnie Fishman, Andrew Geisler, John Loftus, Lonnie Martin, and Jim Twerdahl.
Thank you to Eric Schurenberg and his team at Inc. magazine for providing me with a creative platform on which to share my writing. A particular thanks to Patrick Hainult from Inc. who pushed me to use the Greenleaf Book Group to publish this book. They made a vast difference.
A few other important mentions.
Thanks to Loren Feldman at Forbes who sent me kicking and screaming into blogging for The New York Times many years ago. That beginning was an important step into this adventure.
I want to thank the Vistage community; I have been honored to work with and learn from the chairs and members of the community. Their insights have helped me fine-tune many of the ideas in this book.
Thank you to Andy Gotlieb and Peter Key for helping me with a lot of the research and interviewing for this book.
And thanks go to the entire MultiFunding team, including Kate Stackhouse, Irish Olynyk, Daniel Krewson, Fran Miller, Heather Hoover, Karin Fortier, and many others whose dedication to their work is second to none.
And finally, thanks to my wife, Bethany, and our kids, Sam and Charlotte, who put up with the erratic schedule and work/life balance of a perpetual grower.
CHAPTER 1
The Million-Dollar Question
T he first step in finding your financing comfort zone is to stop what you are doing and answer a challenging question.
Are you investing enough in your business? Does your business have enough capital to keep moving forward? Sometimes we need a tough question to shake up our thinking and challenge our routines.
Imagine that I presented you with a gift of $1 million. The one rule about the gift is that you cannot use it to buy a new house or a fancy car. You must invest it in your business or the mutual fund of your choice.
How would you divide the money, and what return would you expect from each investment?
HOW WOULD YOU INVEST YOUR NEXT $1 MILLION?
Step 1How much $ will I invest in:
Step 2Expected return from investment:
How you answer the question says a lot about how you feel about your business and whether you would try to expand if you had access to additional capital. Your response also speaks to what stage of life you are in, and whether you feel you canand whether its important todiversify some of your risks and invest in things outside your business.
What return would you expect from your investment in the business and mutual fund? And what would you do with the money you put into your company? You might use it for additional sales staff, product development, acquisition, equipment, advertising, and so on.
If you expect a handsome return on your business investment and you have the option to raise equity or debt to make it happen, why arent you doing it?
Asking yourself the million-dollar question is important for several reasons. If youre currently building and running a business, there are three things you can do with your next available dollar: You can spend it on something fun, you can reinvest it in your business, orwhen you can afford toyou can take some chips off the table and diversify your risk. Often, we do not make these decisions thoughtfully and methodically.
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