Financial Projections

How Is 2010 Shaping up for You?

Thursday, July 29, 2010 by Glenn Dunlap

I had a great meeting with the CEO of one of our client companies today. The meeting was to review the progress the company was making toward their business plan and financial projections. Now that we're half way through the year and June's financial statements are closed, it's a great time to dive deeper than we normally do on a monthly basis to see how things are shaping up.

We spend time asking lots of questions. Was our market forecasting correct? How effective has the new product positioning been? How do we see the last half of the year shaping up? Are there ways for us to improve the financial performance of the company? Are customers paying in a timely fashion? How can we improve cash flow? We ask these and lots of other questions to identify ways to improve the company's results.

But let me back up for a minute. The reason that we're able to compare actual results to their budget is because we created the business plan and projections in the fourth quarter of 2009. You know the old adage, "If you don't know where you are going, any road will take you there." Running your business is much the same. Taking the time to work through key strategic planning elements can go a long way to putting you on the right road. Executing the plan and monitoring your results can keep you there.

Jack Stack says we're recovering

Friday, May 14, 2010 by Laura Colar

Jack Stack believes the economic recovery is under way. In fact, he asserts it has been for quite some time. He then warns - if you don't have a business strategy or business plan developed and in place to take advantage of the upswing, you may miss it completely.

It may be difficult to believe, particularly in our tiny worlds where we still hear about small businesses struggling for capital or individuals losing their jobs. So, where does Stack get this perception from and what evidence is he using to support it?

"I’ve been speaking eyeball-to-eyeball with entrepreneurs all across the country — in places like Pittsburgh, New York City, Richmond, Va. and Fresno, Calif. — and when I ask them how they did in the fourth quarter of 2009 or the first quarter of 2010, I keep getting responses like, “amazing,” “fantastic,” “record-breaking” and even “best we’ve done in years.”

Yet it seems we're all a little afraid of admitting things might be getting better. Maybe for fear the the worst is yet to come, just as we've allowed ourselves to breathe easy.

But there is firm evidence pointing to companies around the country once again experiencing growth. Stack uses his own company as example, SRC. He admits he had spent so much time reflecting on the economic collapse that when portions of his operations were experiencing new growth, he missed it completely.

Another sign he claims to see -- an increase in lead times, the period ordering something and actually receiving it. This means more and more orders which means more money being spent. Can we get two huge thumbs up for that.

"If you’re still not convinced, do some research of your own. Ask your customers and peers how they’re doing (and tell us in the comment section below how you’re doing). Do your own eyeball-to-eyeball research. Just as importantly, start putting together a strategy to take advantage of the recovery whenever you believe it’s going to hit. If you keep looking in the rear-view mirror and forget to look at what’s headed your way, not only might you miss a golden opportunity to build your business, you might just give your competitors the chance to move ahead of you or, worse, to eat your lunch right out of your hands."

We'd love to hear what you're seeing, hearing and experiencing yourself that either confirms Stack's assertion or proves it wrong. Please share, do you think we're in the midst of recovery? What evidence do you have that supports your claim?

Depending on your answers this might be the perfect time to initiate buying a business that supplements current operations, compiling new financial projections or rebuilding your financial model for the improving economy or to begin the product launch plan you put off when the bottom dropped out of the market. Any way you look at it, it may be time for action!

Strategic planning, what kinds of questions do we ask

Friday, March 26, 2010 by Laura Colar

Here at Milestone Advisors we truly do it all, number crunching and market analysis to create financial models, we fulfill leadership roles such as part time CFO duties, we create plans and help businesses in the execution as well as tracking the results. Whatever the Indianapolis business community needs, we work to deliver customized solutions.

One of our favorite projects to help clients with is building a strategic plan. Why, you ask? The strategic plan is truly the defining blueprint for the future of any endeavor and we love seeing great ideas come to life as they're mapped out in realistic terms. It's all about clarity. How do we get there?

- We conduct high-level analysis of external elements such as your Industry and Competition.
- We also analyze:
- Core competencies
- Mission, Vision, and Values of your organization
- Business objectives
- Major goals
- Key strategies

Once this 'self-reflection' is completed, an approach to business that is 100% original to you, your vision and company is developed along with actionable steps and plans to put it into place and start generating revenue.

Insights from Guy Kawasaki

Wednesday, March 24, 2010 by Laura Colar

I read an interview with Guy that appeared in the New York Times a couple of weeks ago and thought it pertinent to share. Since entering the workforce and more specifically the world of communications and PR, I have looked to Guy for insight into the way people work and how understanding that concept can benefit the way you do business and simply work, on a day to day basis.

Some of my favorite insights are below:

Sales is everything. As long as you’re making sales, you’re still in the game.

You should hire people who are better at doing things than you are. So, in my case, I was not the warm-and-fuzzy manager, so I tried to hire people who reported to me who were warm-and-fuzzy types to provide a buffer. If you can’t do it, you should find somebody who can.

I learned from Steve Jobs that people can change the world. Maybe we didn’t get 95 percent market share, but we did make the world a better place. I learned from Steve that some things need to be believed to be seen.

Make yourself dispensable — what greater accomplishment is there than the organization running well without you?

Success in business comes from the willingness to grind it out. It’s not because of the brilliant idea. It’s because you are willing to work hard.

I don't think I am going out on much of a limb in saying that many managers, CEOs and entrepreneurs can all find a statement above that rings true or that hasn't already been incorporated into your strategic vision or strategic hr plan, etc. Listening to leaders such as Guy reflect on their experiences and impart wisdom is crucial to our own successes and failures as we grow in our careers and our companies grow. We should consistently investigate what others like Guy have experienced and incorporate their hard-learned lessons into our daily strategies our program management plans and even our financial plans (when appropriate).

Inspirational black entrepreneurs

Thursday, February 25, 2010 by Laura Colar

In recognition of Black History Month, Entrepreneur has compiled a list of the most iconic black entrepreneurs in history and dubbed it 'The Soul of Small Business'.

1. Oprah Winfrey (this should have been blatantly obvious)
Her story is incredible, her beginnings meager and her success unprecedented. Oprah reinvented daytime TV and transformed her personality into a brand with sheer innovation.

2. Berry Gordy
Gordy transcended racial lines of jazz, R&B and soul music when he developed the interracial 'Motown Sound' later leading him to found the iconic Motown Records.

3. Madam CJ Walker
The daughter of slaves and no stranger to personal tragedy, Walker developed her own product (a scalp conditioning/healing formula) and became the first female, self-made millionaire in the U.S.

4. John Johnson
The founder of Ebony and Jet magazines, Johnson provided African Americans with their own mainstream media outlets.

5. Cat

hy Hughes
Hughes developed and grew Radio One to the tune of 65 stations after being denied financing by 32 banks.

6. Russell Simmons
Simmons is an icon and attributed with making hip hop an acceptable and often applauded part of America's mainstream pop culture.

7. Magic Johnson
Yep, he's a basketball star. But he's also a smart investor. He's developed movie theaters, restaurants and coffee shops in urban areas in an attempt to revitalize their neighborhoods.

8. Tyra Banks
Beautiful to look at and smart too. Banks has become a media mogul, developing wildly successful TV shows, dabbling in music and movies and creating camps to teach young girls self-worth.

Here's what to take away from their examples.

Oprah is a marketing machine and it's all based on who she is, inserting bits of yourself or your personality into your company's marketing communication strategy or marketing strategy plan may give you that slight edge.

Both Walker and Johnson created something brand new. Innovation will help you lead the way in your industry accompanied by a product development business plan.

Cathy Hughes struggled to secure bank financing and won the battle. It's not an easy process but you only need one yes.

Venture capital is alive and well (and it can do good!), we know this thanks to Magic.

As for Tyra and Russell Simmons, they welcomed new technologies and adopted advancements in the media to launch their brands.

The best place to learn can often be the past.

Avoid the noise and clutter of popular marketing tactics

Monday, February 22, 2010 by Laura Colar

Some recent advice from the popular marketing site, MarketingProfs, really struck a chord with some of us here at Milestone Advisors. Selecting a marketing strategy is a complex process. It demands creativity, research and must be find favor with most, if not all, of your marketing department.

It's easy to get caught up in simple strategies designed to surprise customers or cut prices for clients. But true marketing genius lies in understanding that delivering your message is a complex process and should be designed in ways that will not simply foster shock and awe, but will build brand and customer loyalty for years to come.

Here are some thoughtful tips on developing affective marketing tactics courtesy of Paul Williams.

Be Individualized
This doesn't mean a form email that uses mail merge to fill in an individual's name. This means understanding that person, their business and what their role is within their organization and appealing to them using that understanding as your foundation.

Immediately Add Value
This is something I talk about a lot but I believe in it. That's what I try to do with this blog. Providing people with information of value, things that they can use, is what being in business is all about. We must all interact in this way for anyone to achieve success.

Be Remarkable
I think this is where some make the mistake of adopting a flashy tactic or shocking slogan intending to solicit "ooooh" and "ahhhhhh" permanently aligning themselves with the idea of what is 'cool' in people's minds. It simply means stand out in a fresh way that they will want to share at the next company meeting. Not because you're cool but because you were innovative.

Be Appropriate & Relevant
In my mind, this should be a given. Getting attention is important but do so in a way that is useful to your specific audience.

The Resource When They Need It
Research and anticipate your audience's needs. When they realize what they're lacking, you're already offering it. (Williams uses a perfect analogy of old black and white movies, the guy always has a match or lighter ready as soon as the gal puts a cigarette between her lips). Being the first one in line with a perfect solution is a powerful thing.

Whether you're beginning to outline a market research plan, attempting some market research forecasting or building a brand marketing strategy - all of the above concepts should be understood and influence your approach to each one.

Software Selection - Don’t Go It Alone!

Sunday, February 21, 2010 by Doug Allgood

The process for evaluating and selecting a software package is a major decision that brings multiple risks to a business. Especially when the software selected is critical to the growth and scalability of the company. I often recommend getting consulting help early in the process so that the results and return on investment can be achieved. Let’s face it; you may only go through a software technology selection a few times in your carrier and therefore should not go it alone.

The first place to start will be to develop a questionnaire for the evaluation and to weight each question so you can measure the responses when returned. The questionnaire becomes the key requirements for the product and should also include items on maintainability, fit to your technology plan, security, and business continuity technology. When sending out the responses, I recommend you notify the potential supplier that the responses will be tied to the agreement when the selection is completed. I have witnessed many companies skip the strategic questionnaire evaluation step and go directly to the software demo. Decisions made from the demonstration only approach yield disappointment, frustration, and significantly higher costs.

In addition to the requirements and the questionnaire, you should put time into developing measurable goals on what a successful implementation will achieve for your business and tie this into the statement of work. These goals usually can be lifted from your business and financial plan. Having well communicated goals understood by both companies will increase the chance for a long term partnership.

I would be interested in hearing your thoughts on these suggestions and I would welcome the opportunity to share more strategies on software selection.

Before You Build Your New Product . . .

Friday, February 5, 2010 by Jeff Good

I recently met with the CEO of an early-stage software development company, just to see how things were going. "Things are moving forward", he said, ". . . busier than you can imagine . . ." The good news is that the company had customers - good paying customers, in fact. Like many product development companies, though, they were tight on cash and barely making it month to month. In addition, because many of their products were still in the development stage, they had negotiated a wide range of pricing and payment arrangements with their customers. When I asked about the company's long-term pricing strategy and whether customers would be willing to pay prices that supported a profitable business (given the costs necessary to deliver the products), I got a blank stare. "That's a really good question," he said . . . "I sure hope so."

What a shame that so much hard work and money is often expended without really having a long-term vision for the company's profitability or a well thought-out business plan. As I reflected on our conversation, a few things that might help similar early stage companies came to mind:

Know your market - Having a great product is not enough. Market research is necessary to understand who will buy your product and how much they're willing to pay. Figure this out early before you spend too much time or money building a product.
Understand your cost structure - Just because someone is willing to pay for your product doesn't mean you'll have a profitable business. What does it take to deliver your product - all in? This includes not only the direct costs of manufacturing, delivery, installation, etc., but also the costs of product development, maintenance and overhead. Is there enough profit, given market pricing to cover projected costs? Does the projected profit make it worth your effort personally? As comedian/actor Steve Martin once said, "... it's a profit deal."
Predict your cash needs - Many early stage businesses sacrifice profits early on to capture market share and gain critical mass. This is fine as long as you have the cash to finance those early losses. Having a solid financial plan that carefully models cash flows is critical - you don't want to run out of money!

Of course, there are many other important elements to an effective business plan, but these are a few critical starting points before you get too far down the road.

Why it Makes Sense to Hire a Part-Time CFO or Part-Time Controller

Friday, February 5, 2010 by Tom Gabbert

I often get asked why a part-time CFO or part-time Controller makes sense for an entrepreneurial company. The answer is simple, you get the expertise you need at a fraction of the cost. Most small businesses have many of the same needs to that of a large business when it comes to the finance and accounting function. The biggest difference is that they don’t need it on a full time basis (with a hefty salary and benefits).

At some point in the evolution of a small business, the business owner reaches the decision that he or she needs to get more from the accounting or finance function. Maybe they are feeling like they need better reporting / instrumentation. They may also be feeling the need to prepare financial projections to help them better plan for the future and understand the cash requirements of the business. Maybe it is as simple as feeling the need to prepare a week-to-week cash flow plan that they can follow when cash is tight. It is at this point that I see many small business owners make a classic mistake – they hire a full time person. While the needs are real, the job itself often does not require a full time person. I would suggest that business owners consider the idea of a part-time Controller or part-time CFO to fill the void. By bringing in finance / accounting experts on a fractional basis, a business owner is able to cover the entire spectrum of needs for the business in a much more cost effective manner.

Is a part time CFO for me?

Tuesday, February 2, 2010 by Laura Colar

Running a business is hard. Developing an original idea and building an organization upon it requires passion, dedication, time and creativity. Not only that, those four intangibles must flow forward continuously, providing you with a steady stream of inspiration and motivation. This doesn't leave a lot of time for all the additional nuts and bolts of running a company including hiring, firing and communicating with employees, managing vendor relationships and (many entrepreneurs least favorite task) balancing the books and projecting future growth.

Odds are, you don't have time handle all your company's finances. Maybe you have time to cut checks and perform a daily assessment of your bank account. Maybe you have time for more than that. The bottom line remains, more often than not, entrepreneurs are idea people, not numbers people.

Even if they do enjoy calculations and percentages, odds are they don't have the level of expertise that will allow them to compare their company to current market research and trends, build a sustainable financial model and project for the future (creating reports that enable you to make decisions that will ultimately allow your company to grow).

Many startups and small businesses can benefit from using the services and expertise of a part-time CFO. They can provide you with important information and advice to aid in decision making that leads to growth, avoid numerous business accounting pitfalls and aid in problem solving efforts positioning your operations for as much success as possible.

More Top Ten

Wednesday, January 27, 2010 by Laura Colar

As you've probably noticed, I have a personal penchant for lists. In both my personal and professional lives they are essential to my staying organized, finishing projects and ensuring I mail in the rent and am never placed in the predicament where, heaven forbid, I'm all out of toilet paper. Plus, there is the added and pure satisfaction that comes from drawing a bold line across said task or goal. DONE!

List rant over, I have another one for you and I've called out some of my favorites. Take a look at the Top Ten 2010 Trends for Entrepreneurs.

3. Solving lots of your customers needs will be king
No company can avoid it anymore. Constant, consistent, clear and positive communication with customers and clients will be a key to success, the degree to which you experience it will directly relate to the time and resources you have allocated for the efforts.

8. Being big will become less advantageous to being small
In 2010, bigger won't necessarily be better. Good news for most of us. Smaller organizations are more flexible and don't deal with as much procedural red tape, allowing them to flexibly navigate any issues that may arise.

9. Focus on relationships will pay
We're taught at a fairly early age to treat others as you would want to be treated. Somehow, throughout our college experiences and early careers we seem to completely forget this principle. Any CEO will nod in agreement as working at maintaining relationships is discussed, even place and emphasis when it comes to personalization. But most don't spend time and money on these efforts, those who do will see it pay off.

Have you taken a look at certain economic predictions and spotted trends that may help enhance your business for 2010? Spending some time in market research analysis then building a plan or global marketing strategy using the results as a basis is a great place to start. In the full post, some of the other 'Top Ten' predictions deal with cloud computing and may be important to include in your technology strategy or business continuity technology plans moving forward.

Spend some time reading this list then write one of your own. I promise, you'll enjoy it.

Do you have a business exit strategy?

Thursday, January 21, 2010 by Laura Colar

For many business owners, a clear exit strategy is an integral part of the overall business plan, while for others; the thought of transferring ownership is only a far-off notion. Regardless of when it happens, ownership transition is a natural part of the business life cycle and should be planned for accordingly. Preparing for this type of transition is a must so that when the time comes (and it may be the result of an unexpected development) you are more than prepared to come out on the other side of the deal a happy camper. Here are some things that should be addressed:

1. Perform analysis of the owner’s needs, business operations and market factors to develop effective exit alternatives

2. Prepare the company for future sale – operationally and financially

3. Prepare company information, financial projections and other materials

4. Identify and conduct research concerning potential buyers

5. Develop your preferred deal structure and ideal negotiation terms

6. Facilitate even further buyer due diligence (this would be farther down the line when a sale or acquisition was inevitable)

7. Coordinate negotiation and closing process (It may be wise to hire an unassociated third party to help facilitate communication during this stage)

Up In the Air

Wednesday, January 13, 2010 by Laura Colar

Recently I grudgingly shelled out $9.25 plus another $4.25 for a movie ticket and an accompanying soda to see George Clooney's handsome face on a big screen (I don't believe there is anyone who improves with age as he has). The movie was Up In the Air in which George Clooney's character, Ryan Bingham, fires people for a living. There is an art to his delivery and he provides the employees being laid off with a packet that promises this will be a positive change for them, if they choose to make it one.

He travels around the country delivering this depressing message and his schedule fills up as references are made to auto and manufacturing companies. If I understand correctly, many of the employees featured in these scenes were real people who had been laid off as our economy declined at a break neck speed.

Granted, there is a romantic story line incorporated into the film but what I really took away from it was that our country's unemployment rate is not merely a number or statistic. I hear it referenced practically every day on the news but rarely do I associate the recent increase or perhaps an uncharacteristic decline for the month, with real people.

We have become desensitized to news in general and use that as a coping mechanism for the unfortunate state of the economy and perhaps, of our own finances. In order for our country, economy and ourselves to fully rebound from the struggles of the past few years, we need to remember these numbers aren't just statistics, they are people.

This is a concept that also needs to be top of mind as we look to continue to do business in 2010. Those of you considering starting a business must be thorough in your preparation, creating accurate business plans and business strategies that project for both best case scenarios as well as worst case. You must do thorough and even exhausting market research to be sure to position your venture for success, before you ask others to tie themselves to the future of your company. If you're already in business, an organization assessment might be a beneficial exercise.

This is a necessary outlook in terms of customers as well or whoever you are doing business with - prospects, current clients or customers and vendors. The way you do business has to become personal again, after all, you're dealing with people, just people. It shouldn't be more complex than that.

We should make more of an effort to understand that every decision we make when it comes to business practices affects other people and we must be conscious of the potential consequences so we can position our own operations, as well as others, to enjoy profitability. This will be essential in an economic recovery. Maybe you need a new financial plan.

Inc. case study: lining up investors

Wednesday, December 30, 2009 by Laura Colar

Dogswell: a five-year old company that markets dog treats worth $17 million

Ambition: to edge it's way into the natural dog food market, competing directly with such major brands as Purina and Iams

Issue:the owner of the company launched too quickly and anticipated returns that never materialized. Also, in expanding the company's identity and focus, he forgot to utilize many keys in his previous marketing strategy that had allowed the original operation to enjoy success. Therefore, he is facing his first red ink on bank statements. His first reaction was to generate more funding and line up investors. However, that's not always the right answer.

I would weigh-in and say this is a fairly common occurrence. Many companies launch with just one product or focus and as they get to know their customers, they respond to additional needs they might have as well as conduct consistent market research or analysis. What are other companies in my market selling? How have they expanded their market line?

Too much focus is placed on expanding and doing so immediately, without the proper planning, research or analysis taking place first.

What do the experts say?

Be more disciplined
A lot of emphasis was placed on researching the initial product but not enough was done in researching the current market, competitors or a market research plan in general. Conducting market tests would even be helpful. Simply not enough has been done to fill out an entire business model or business strategy plan.

Don't lose focus
To make your company a true competitor, you want to stand out, specialize in something. While it's natural to want to compete with major retailers with what you deem a superior product, it may be better to stick to a niche, that way you can completely dominate the area.

Is taking a risk simply over-rated?

Wednesday, December 23, 2009 by Laura Colar

In terms of small business, the answer is no. By nature, running a small business or launching a start-up is simply fraught with decisions that have no guaranteed outcomes. Yet, as most of these operations are just beginning, they aren't gambling much at all and have very little to lose.

Steve Strauss, one of USA Today's business experts recently fielded a similar question about risk concerning small ventures or operations. His answer is articulate and right on:

But from where I stand, the best small businesses never stop risking; the difference is, they get better at it. Great entrepreneurs continue to look for opportunity and once spotted, continue to go for it. The difference is, and it is a significant one, as they grow in their business acumen, the experienced entrepreneur learns how to make risk-taking less risky.

If you want to grow your business next year, then do what they do: Look for opportunity and take smart, calculated, prudent risks. Don't bet the bank on one idea (you can lose a lot of money that way). Don't tell the world about your big vision (you can lose a lot of face that way). Don't re-jigger a lot of your resources towards a new, untried idea (you can lose old business that way.)

So, how do you learn to make risk-taking less risky? Our answer is to be certain you ALWAYS have the most complete and accurate financial information with which to make decisions. This means consistent financial market forecasting. Have you made projections for the best case scenario? The worst case? Have you conducted additional market analysis to determine where you stand in terms of competition? All this research and analysis should be conducted before any decision making takes place so you can be more assured of a positive outcome.

The end of another year, time for an organizational assessment

Wednesday, December 16, 2009 by Tom Gabbert

It's that time of year again, business owners everywhere are spending late night examining operations, reconciling accounts and figuring out what can be done better next year. Don't let all of that analysis go to waste - use it to set a new year’s resolution, particularly one for your business to improve / upgrade the financial reporting and forecasting capabilities within your organization.

Here are some ideas I find are often the most beneficial for small business owners to consider:

Budget – Establish a detailed departmental budget for the new year. You will be surprised by the cost savings that you will be able to achieve simply by developing a detailed budget and reporting against it on a monthly basis.

Executive dashboard – Identify the five or six things that are most critical to the success of your business and put them in a dashboard format that gets updated on a regular basis.

Financial model – Don’t spend all of your time looking in the rear view mirror. It is equally important to look ahead by developing a three year financial projection model that will help you better understand where your business is headed and the resources required to help you reach your goals.

The above tips are small, basic insights but should be be considered while restructuring your business's organizational development strategy and then incorporated into an overall business plan that has a clear financial model and accounting practices.

I’m a big believer in the old saying that “what gets measured, gets managed”. I’ve seen many companies make significant improvements in operational efficiency and overall profitability by changing and improving the way that they look at the business.

Take it from Seth, when it comes to business, don't argue

Wednesday, December 2, 2009 by Laura Colar

Seth Godin, a marketing guru and blogger who I referenced last week recently wrote a great post entitled 'How to lose an argument online'. It addresses mistakes a lot of leaders, companies and organizations make when trying to get a point across or defend a product, service or decision they have made. The post contains useful insight for small business owners in terms of customer service.

Here are some of the insights:

1. Have an argument. Once you start an argument, not a discussion, you've already lost. Think about it: have you ever changed your mind because someone online started yelling at you? They might get you to shut up, but it's unlikely they've actually changed your opinion.

This goes for listening to you customers or your critics. There will always be those who don't believe in your product or brand. It's important to be attentive to your customers needs, responding to their criticism in a constructive manner. After all, it's important to engage with these audiences. Just be sure you don't argue when you don't agree with their criticism. With all the passion and drive involved in building a small company, it's natural to be passionate and protective of its operations. It's important to try and shut these defensive reactions off.

Instead, Godin suggests, "Earn a reputation. Have a conversation. Ask questions. Describe possible outcomes of a point of view. Make connections. Give the other person the benefit of the doubt. Align objectives then describe a better outcome. Show up. Smile."

You have to love and appreciate advice so simple, so black and white. Godin has a gift for taking complex approaches and ideologies and breaking them down into actionable advice we can all follow. I believe any entrepreneur can benefit from the sage wisdom above.

Every small company should have a marketing communication strategy in place so that they can respond quickly and adequately to any criticism or praises. Having a clear plan to deal with customer and critic communication as a part of a greater strategic marketing plan is an important part any operations success and if not handled properly, can also lead to its downfall.

Happy Thanksgiving

Thursday, November 26, 2009 by Laura Colar

First and foremost, all of us at Milestone Advisors would like to extend our warm wishes for your Thanksgiving holiday. Nothing, not even running a business, is more important than family.

In honor of the holiday, I'd like to draw your attention to an excellent article in Inc. magazine written by Meg Cadoux Hirshberg who is married to the founder of Stoneyfield Farms. In her latest column, Meg addresses the stress surrounding not only her husband's foray into organic yogurt, but the fact that many of her family members, were funding the start-ups operations.

Both of Meg's brothers as well as her mother had invested in her husband's passion and dream. While there is happy ending, we all see the Stoneyfield brand at our local grocer, it was a long road getting there which made many of Meg's Thanksgiving dinners more like business meetings and could have potentially caused many a crack in their family foundation.

In one section, she makes the argument for going after venture capitalists to fund your business instead of those most willing to listen, family.

"The people who love and believe in us are also those whose fortunes we least want to imperil, and whose positive regard it hurts most to squander. Venture capitalists understand this, which is why they often prefer that friends and families invest before they consider a deal. As one CEO said to me, "Venture people know you don't care about them, but that you'll work hard to make sure not to lose the money of loved ones." The decision to invest is about the business, but it's personal, too. After all, businesses reflect the passion, dreams, energy, and vision of their founders. What could be more personal than that? Entrepreneurs strive to keep people believing in them. But when things go wrong, losing the confidence of venture capitalists is far less painful than losing the faith of one's family."

It's natural when starting a company to want to share your ideas and dreams with those you love and thus ask them to become a part of it. In fact, for many startup companies, it can be the most likely place or only place to successfully find financing. However, in an effort to protect the nature of your relationship with them, sometimes it may be best to seek a business consulting firm to identify opportunities for you, set up meetings, and formally document the transaction.

Milestone Advisors helps small companies or entrepreneurs with just an idea to identify the best means for obtaining funding or capital, especially if you are drawing family into it. Milestone analyzes your current financials and creates projections that allow you to determine how much money you need and when. We will work with you and your potential investors (friends and family, angel investors, or venture capitalists), set up meetings, and attend them as your advocate. We will also assist in developing a complete and comprehensive business plan or business strategy to use as framework for such a meeting, ensuring your success.

Slow, Organic Growth the Safe Plan?

Sunday, November 8, 2009 by Glenn Dunlap

You've probably heard the saying that, "Flat is the new up in today's market." I hear it all the time. I've talked with many CEO's who say they are happy to just be holding ground given the turmoil in the economic markets. But should you be comfortable or satisfied with no growth even in this economy?

Inc. magazine has an interesting article this month entitled Slow Growth = Slow Death? The author, Joel Spolsky, provides some interesting math when considering your company's growth rate:

"Think of it this way: If you're growing at 50 percent a year, and your competitor is growing at 100 percent a year, it takes only eight years before your competitor is 10 times bigger than you. And when it's 10 times bigger than you, it can buy 10 times as much advertising and do 10 times as many projects and have meetings with 10 times as many customers. And you begin to disappear."

Ever thought of it this way? How many of us would have been happy to have a growth rate of 50% per year and believe that our companies are on solid footing? Are you still satisfied with that figure? Hopefully that math has you thinking...

So what kind of growth does your business plan call for in 2010? With the uncertainty of the market, did you have any growth planned? Have you considered the growth plans of your largest competitor? Are they growing or have they been satisfied to hold ground?

Let's flip the table for a minute and think about your financial projections. If you were to grow at 100% and your competitor only grew at 50%, you would be the one sitting 10 times bigger than them in eight years. What would it take to make that happen? It might force you to have some uncomfortable conversations and accept a greater level of risk than you normally would, but can you afford to sit still?

Take a look at the article in Inc. magazine and give the Indianapolis management consultants at Milestone a call to assist you with strategic planning for your company. This year might be the best year to put some distance between you and the competition.

U.S. Small Businesses Administration Announces Changes, Indiana Lenders React

Thursday, October 29, 2009 by Laura Colar

Recently, legislation affecting the U.S. Small Business Administration 504 program has been proposed and small business lenders throughout Indiana have declared their support for the pending changes.  

Traditionally used to allow companies to fund the purchase of real estate, buildings and equipment, 504 loans have been integral in empowering the small business community to create jobs and spur innovation. Under the revised plan, the ceiling for loans will increase from $2 to $5 million and loans for small manufacturers would increase from $4 million to $5.5 million.  

This fiscal year, 1,035 SBA loans were made in Indiana, totaling $266.8 million, a significant drop compared with 1,460 loans totaling $307 million the year before. These proposed changes in legislation have Indiana lenders and small businesses looking forward to the coming year when lending should increase.

More SBA loans this year will provide Indiana’s small business community with the critical resources they need to create jobs and invest in the economic future of the state.  

Here at Milestone Advisors, we have a history of successfully working with SBA’s 504, 7a, and other programs on behalf of our clients. Our experience providing advice for clients concerning corporate finance, accounting help or buying a business has equipped us to help small businesses capitalize on these enhancements. With these changes, we are looking forward to helping more small businesses assess financial projections, determine the right capital structure and assist in obtaining the capital to operate and grow their business.