New Year, New Goals

Last year you took the leap and started your own business, or maybe you embraced your inner entrepreneur and set out to start your own business this year. Either way, you've been focusing on what it means to look to the future and set goals. This has been a hot topic with clients over the last month: looking to 2012 and going for it. Whatever "it" is, this is the year they want to step out and step up their game. The challenge, it seems, is knowing the limits, length and distance they (and you!) are willing and wanting to go to create the career of their (and your!) dreams.

Working for yourself, starting your own business provides a great amount of satisfaction; but it's a lot of work to get started. The underlying emotional fear that's holding you back may just be related to money. Do you have the financial means with which to start your own business? From where will the money come if you don't have savings from which to draw? Is your business idea good enough to convince other people to invest in you and your new business? These are all valid questions because it's important to know your own relationship with money, abundance and all things financial.

Your relationship money will definitely dictate how you will perceive the "value" of your idea as well as the "value" you personally bring to the business itself. On the upper level of consciousness you may believe you love money (Who doesn't?!) and the idea of being wealthy. But what has been holding you back until now to step into going after earning this type of wealth?

Your level of self-confidence (for one) and your ability to be honest with yourself (for another). Understanding your relationship with money requires more than just you looking at your past to learn how your spending habits have affected your ability to save or gaining the clarity of why you buy certain products and subscribe to specific services. Having the confidence to honestly admit your inner most thoughts regarding money is the space you want to visit during time of reflection or meditation.

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Money Talks; Everything Else Walks

Recently in a conversation with an associate, we were discussing venture capital opportunities of the past and how we both have invested more than just money but also our time, dedication and expertise; and for a few of those investments we've wound up with some beautiful-looking ownership certificates that have no cash value but make great wall paper. When it comes to having the desire to move your business up in the world, expertise is nice but money is what ultimately pays the bills for those direct and hard costs associated with running your business. For individuals to invest their cold cash into your business, they need to believe that what they're investing in will provide a return, and their belief is ultimately based on your own belief, the trust you have in yourself and your business idea.

You possess an impressive business plan, you've worked on your business design, and you've finished a feasibility assessment that indicates your business has the makings for making huge money. Great! The only thing stopping you from taking the leap is your need of raising money.

In this economy, finding individuals to invest in a small business isn't the easiest thing. But don't lose hope; they are out there, and yes, they are willing. These individuals are best known as "Venture Capitalists" or "Angel Investors." Basically, VCs impart fiscal backing to a company or firm that is in its early stages but nevertheless exhibits high potential in terms of forthcoming growth and profitability: exactly where you seem to be finding yourself. Their goal? To make larger-than-typical profits (i.e., stock market investments) on their investments. Don't fool yourself: VCs are fully aware that a number of these types of investment projects can and will end up losing money. However, VCs recognize that great earnings from some of their projects will more than compensate for their losses along the way. Venture Capitalists are receptive to taking high-level risks when other people may not be.

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Your Money Personality

Does prosperity have anything to do with your “money personality”? Apparently, yes! Your money personality defines your attitude toward money, and that essentially determines your financial behavior – making decisions regarding putting funds into savings for another a day, into retirement, spending on necessities versus desired purchases. Knowing your money personality as a small business owner can help you identify and overcome any potential losses that could negatively impact your ability to succeed in business.

Over the course of time, I’ve learned there are four basic types of money personalities. The following is a list of the most common personality types as well as the typical behavior patterns associated with them.

Money Hoarders These are people who do not like taking risks with their investments. They prefer to keep their money locked in a savings account and tend to be small spenders.

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Debt v. Equity Financing

When entrepreneurs begin to think about either going into business for themselves or taking their business to the next level, the financial and money concerns become the main challenge to address and/or overcome.

Debt and equity are the two main financing options from which most businesses can choose. Debt financing in simple terms means borrowing funds for the business for a fixed period of time at an interest rate pre-determined at the time of borrowing. Equity financing, on the other hand, refers to the capital raised for a company by selling common stock to individual or institutional investors. It leads to sharing of ownership in the business, depending on the amount invested. The following is a brief introduction to the advantages and disadvantages of both debt financing and equity financing.

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