The partners of Simon Associates Management Consultants are committed to helping young entrepreneurs, and particularly women entrepreneurs, take their ideas and turn them into successful business ventures. As part of our effort, in 2018 we started the Simon Initiative for Entrepreneurship through the Skandalaris Center for Interdisciplinary Innovation and Entrepreneurship at Washington University in St Louis.
Over the past three years, we have held a number of summits and workshops to help broaden the perspective of budding entrepreneurs. In June 2021, we held a virtual panel about funding and capital, entitled “Making Capital Friendly and Accessible.” Andi Simon, PhD (my wife and business partner) moderated the panel. It included Judith Goldkrand, SVP, Wells Fargo Bank; Heather Cameron, PhD, the Michael B. Kaufman Professor of Practice in Social Entrepreneurship and Innovation at Washington University’s Brown School; Keisha Mabry Haymore, Director of the Elevate/Elevar Accelerator for Black and Latinx Entrepreneurs at WEPOWER; and Jill Johnson, co-founder and CEO of the Institute for Entrepreneurial Leadership.
As a serial entrepreneur myself, I thought it would be valuable to capture the discussion and share it with our readers.
Valuable perspectives on how to grow your business
Here are some of the important takeaways from this event and some comments I have added based upon my own experience raising and managing capital for my businesses over the years.
- EXPAND YOUR NETWORK
You might think you have all the answers for what you need at the moment. But as you continue to grow, you will need advice or counsel about what is the right next move for your business at that moment. Often, you just need to bounce ideas off someone. What better way than to have a network to turn to! Don’t wait. Think about expanding your network sooner than later, and nourish it over the years. Find confidants you can work with without the fear of risk. Remember, you cannot do it alone. As you grow, and begin to seek capital, these advisors can really be of help.
- THINK ABOUT FINANCIAL SOURCES
For most entrepreneurs, finding a source for funding is never easy. Banks can be a reasonable source but know that one size does not fit all. I say that because large banks are not necessarily interested in startups, and if you end up in the retail sector, their ability to understand your business might be questionable. Also, smaller banks could have lending limits and might not be interested in riskier ventures. Many of the smaller entities only focus on certain market segments.
But perhaps you might not need a bank to fund your venture right now. Instead, this might be a perfect time to start building a banking relationship, which is much easier to build if you do not initially have an “ask.”
As an aside, I built a significant company over time. Nothing was ever smooth. If I had gone with a large bank, in stressful times I would not have gotten the type of attention we needed. But I matched our business with a bank that considered us a growth opportunity. Their lending folks took the time to understand our business, and we both profited along the way.
One last thought. No one likes surprises, so tell your banker all your ups and downs. Warts and all. It is much easier to explain a problem and your solution rather than to catch your banker by surprise.
- DON’T REJECT MONEY OUT OF HAND
Perhaps you have a venture capitalist who wants to lend you money, but the timing is not right. Establish a relationship now. You might need money someday down the road and having these relationships means that you have a shorter runway in the future.
On the other side, there are good reasons for rejecting money. Not the right people, not the right terms, or just not comfortable with the lender you are meeting. Remember that good deals are not one-sided.
- IT’S ALL ABOUT PEOPLE
Whatever business you are in, relationships are always about people. Speak to some private equity people. Most will tell you that while they finance deals that make sense, for the most part they must be comfortable with the company’s leadership. Do they have confidence in the people running the company? It also works the other way around. How would you like “getting into bed” with this group? Alignment is critical!
- DEVELOP A PLAN
You need a plan. How do you or your financial people know that the business is moving along the right path without a plan? You need a well-thought-out plan. What is the competition? How do you compete? Do you have a viable strategy and appropriate benchmarks? I cannot tell you how often things fall apart because the strategic or business plan does not make sense. As we mentor young, aspiring entrepreneurs, we far too often find that they have great ideas and limited business acumen. Not good for raising capital at any stage. Get the education you need.
- PROVIDE AN OPPORTUNITY TO FAIL
I am incredibly happy that one of the panelists talked about the “opportunity to fail.” While we all like to hit all our benchmarks, it does not necessarily happen that way. Building a business is an iterative process. And short-term failures can often lead to long-term success. At SAMC, we are big proponents of Blue Ocean Strategy which focuses on finding new, unoccupied markets, or “blue oceans,” rather than competing in existing markets, or “red oceans.” That means you push into uncharted areas, and it is tough to get everything right the first time. It means taking risks. And perhaps experiencing short-term failure. But it is often the key to great success!
I firmly believe that you must give people a chance to take risks because where there is great risk, there is great opportunity. At SAMC, we have recently launched a number of pilot programs, understanding that they are beta versions. They might fail but they will serve as an important learning experience, and we will make modifications as needed to turn the programs into successes.
To learn more about growing your business, check out these blogs and podcast:
Need a hand, some advice, a better strategy? Let’s talk.
I hope these highlights of what we covered in the June panel are valuable to you. If we can be of help as you grow your business, please contact us and we would be happy to have an exploratory discussion. We are certified Blue Ocean Strategists and culture change experts who specialize in helping entrepreneurs and startups of all sizes develop a business strategy, realign their company culture, launch their venture, capture customers and grow market share. We look forward to having a conversation with you.
From Observation to Innovation,