To profit from today’s unprecedented economic conditions, here are 3 secrets learned during prior recessions:
1-
Use your own unique currency
2-
Get credit for your future today
3-
Pursue the future you really want
As entrepreneurs you have a unique ability to create a future that does not exist- it’s you that creates value, profits from change, thrives where others can’t survive. Principle 1 That makes your future a unique currency, one which others want to share. Your passion to address the pain of your customers with solutions drives revenue; revenue drives growth and growth is your unique currency. And when your future is bigger than your past, your future is an appreciating currency. Use it with customers, vendors, bankers, employees, strategic alliances and you have your own eco system of safe cash where all participants benefit from the success of each other. Wayne got turned down by the bank for $1 million to expand his plant to do $25 million in 5 years. When he did, I asked Wayne what future he would create if he won the lottery and all the money was his. His answer was $100 million, and that is the future that created his unique currency. I used that currency to help Wayne attracted $10 million for his $3 million revenue business. So how did Wayne do it? Not based on his past! It’s all about your future.
So how do you finance a future so much bigger than you past? The answer is Principle 2 get credit for that bigger future today. Scott wanted to grow his company but he thought that $3 million of equity would cost more control and ownerships give up than $1 million of equity. But that is not true, if you can get credit for your future today. Unfortunately, not all investors can see your future, only an investor who shares your passion. To get credit for your future today, you need a match-maker because entrepreneurs and investors don’t speak the same language. You need someone to help you translate your entrepreneurial vision into venture economics that investors can buy. Scott asked my help and he received 5 term sheets from venture investors for the equity he sought. What surprised Scott was that all of the 5 investors wanted different amounts of ownership for the same number of dullars; the highest valuation was almost 2 times the lowest. So which investor do you think Scott liked best? Yes, it was the investors who offered the highest valuation, but not because of the numbers. Actually, Scott liked him because he was the most passionate and really understood Scott’s ambition. The highest valuation is not just a good idea, it’s an imperative that you have identified an investors who shares your passion and can see your future and is willing to give you credit for that future today- where others only see risk.
Now you can see you have no excuse not to pursue the future you really want, which is principle 3. Today’s economic environment is challenging lots of entrepreneurs. No, the principles of successful entrepreneurship have not changed. But this global crisis has introduced unprecedented uncertainly and volatility. But there is a positive effect as well: the scope of possibilities has increased exponentially. Today innovation drives value. That puts you in the driver’s seat if you distinguish between traditional growth and proactive growth. Traditional growth is when you look for a fast-growth market, jump in and try to follow its trajectory. In contrast, Proactive Growth is when you identify a problem, innovate a solution and design your own optimized growth strategy. Traditional growth is very risky. You find yourself coping with all kinds of risk factors imposed from the outside, way beyond your control. Today’s volatile and uncertain economy makes this reactive mode of traditional growth overwhelming and exhausting. In contrast, proactive growth actually takes advantage of dynamic market changes as fuel. Proactive growth is built upon what you do best. It leverages your natural skills. For innovative business builders like you, your biggest risk is that of opportunity lost. A sure way to lower the risk in this economy is to grow proactively.
Stefania Aulicino is founder president of CapitalLinkUSA which ensures business builders secure resources – cash and talent- that share your passion. You have your choice of how to get Cash And Control: We do it for you with the Turnkey Cash and Control System or we offer you self learning tools with online Cash And Control System products. www.CapitalLinkUSA.com
