If you’ve built a business, you know that risk is a fact of life. It’s with you from the first time you open the doors. And it never leaves, even as your business starts to grow.
Suddenly you have more than just yourself to worry about. You have employees, clients, and responsibilities for any number of things. Now it’s not just your risk. And maybe it’s getting harder to ask yourself the right questions about the future of your business:
- Are you satisfied with the sales and profits you have?
- Is it time to reward yourself for all the blood, sweat and tears you put into your business by taking some cash out of it?
- Should you attempt to expand?
- And regardless of your decision, exactly how do you go about it? For many entrepreneurs, the first step will be a trip to the local bank. Most don’t realize there is more than one path to a solution or that the most fruitful path might lead them to a different place entirely. They don’t know that an investment bank, like Allegiance Capital Corporation, can offer considerable opportunity to raise capital and take their business to new heights. Here are some of the opportunities we have developed for privately-held and closely-held companies that can produce great results:
- Raising long-term capital. When we meet with a company, we analyze where it has been, what its performance is today and, if money were no object, what the opportunities for the future would be. We help design a growth strategy and then go to the marketplace to bring in long-term capital. This provides the owner or owners an opportunity to sell some equity and put money away to secure their financial futures. The strong financial partner also provides capital for organic growth, or potentially for rapid growth by acquisition. In this scenario, the owners continue to manage the business with the goal of making it significantly larger and more profitable. And when they are ready to sell, the reward for their efforts is likely to be much higher.
- Restructuring debt. If the business owner has a low level of debt, we can recapitalize the company. In doing so, we stretch out the payment terms to relieve financial strain on the business and generate significant capital for growth. We recently raised $25 million for a company. At its current size, the company can easily handle the $25 million in debt, and with continued prudent management, it can grow significantly in both revenue and profitability.
- Growth through acquisition. As investment bankers, we can raise the capital to acquire businesses and provide the money it will take to integrate those businesses. Through acquisition, business owners can achieve significant cost savings by eliminating duplicate management and other overhead as they increase revenue, add to their customer base, and improve profitability. Acquisitions also present an opportunity to add talented people to the organization.
These are just a few of the ways business owners today can expand their business horizons and keep risk at a minimum. Today, some $3 trillion is on the sidelines waiting for an opportunity to invest. That’s more than we’ve seen in the history of American business. What’s more, banks are lending and money is cheap. So, for owners who have a business that is performing reasonably well with decent projections for the future and a good management team in place, real opportunities await.
If you’re interested in any of the opportunities I’ve described, give me a call. I’ll send you a confidentiality agreement so we can candidly discuss what you’d like to achieve for your business. We will respond quickly and answer the two most important questions – Is what you want to do possible, and is it worth doing?