Be Capital Ready

This year we’ve been fortunate to support several organizations launch capital-ready programs.

Being capital-ready from an entrepreneurial or small business perspective is somewhat different than it is coming from institutions such as banks, or community development financial institutions (CDFI), or SBA funded. And each of those institutions may have a different perspective of what training they provide to support entrepreneurs or small business owners.

From an entrepreneurial perspective, you’re looking looking to secure funding. Meanwhile, the lender is looking to ensure that they will be able to collect from the loans they have provided. While they may ask you to sign off your home or to guarantee the loan personally, they are not interested in your home your equipment — their interest is in assuring you will do whatever it takes to make the payments.

They are in the business of lending money, not selling and buying assets.

There’s also what we call EDOs or ESOs, institutions that support entrepreneurs or small business owners. They are looking to see if you could take advantage of some of the money available to help you professionalize, stabilize, or grow your business, offer employment within your community, or generate additional revenue to collect additional taxes.

Each of these types of lenders has a different motive for you to learn about capital and financial literacy.

From an entrepreneurial perspective, you need to understand those motives so you are able to position your “ask” in a way that enhances the programs you are attending and the results you are able to achieve.

As an organization that has been supporting such activities in so many places around the world, we’ve gained insights, and have been able to translate them into the sessions we deliver.

Some of them are the tools we are able to provide, such as ISM Business Planning and Financial Planning tools. One of them allows individuals to bridge the gap between what the funders may want, what the enablers or EDOS or ESOs want, and what the entrepreneurs want. We call that the Capital Ready Plan — in which the entrepreneur can create the actions they need to complete to help them get the loan, and then create somewhat of a financial plan.

Some may need a business plan — there is a different tool for that. I’m saying this to you so you have a better understanding for each one of the motives that each individual is holding.

If you are the entrepreneur, you must understand what the other institutions supporting you want. If you are an institution that supports entrepreneurs or small business owners, you may want to think about why the entrepreneur is looking for the money.

From a funder perspective, you might want to think about using some ISM tools to help them get organized, such as our APP that can help you get all your documents in one place. Check out: wemicrofundyou.org

BEFORE YOU GO

We see our blogs as opportunities for dialogue. Please share your thoughts as comments.

1. Be capital ready by getting organized

2. Understand the motive of each institution you approach to provide you with funding or training

3. What other things have you done to be capital ready?

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Faris Alami is Founder and CEO of International Strategic Management, Inc. (ISM). He works internationally, presenting Exploring Entrepreneurship Workshops and other entrepreneurial ecosystem — related ventures.