Get Cash Keep Control BLOG

By Stefania Aulicino

One of the biggest challenges business builders have is to make your future credible to get credit for your future. That’s the challenge of growth, which makes your future bigger than your past.

Here’s a solution. Using the universal language of finance- dollars and cents- practice describing your company’s future based on its “Economic Building Blocks” to demonstrate how your financial projections predictably flow from your core expertise.

“Company W sustains less than .0001 defect rate delivering customized components in chasse-specific order to the right customer plant out of 4 nationwide; Company X delivers custom solutions in 1-3 days based on embedded software in its core product, while competitors take 3 weeks building to customer specifications; Company Y receives 15-20% price premiums based on its effective branding. Company Z’s in-house training insulates it from the industries double digit turnover rate by making new hires productive in 2 days.”

I began calling these Economic Building Blocks when I noticed companies had numerous components which make up their competitive economic distinction. What made each company unique was how it combined a number of insights about the needs of its market i.e. perhaps related to logistics, service, pricing methodology, packaging, after sale support, etc. After all, isn’t that why you went into business in the first place- to solve a problem differently? Like so many LEGO pieces, many children have access to the same set of blocks, but somehow each child builds a different creation. In today’s fast changing global market, you can create “new” building blocks that others don’t have, or add the building blocks of others (outsource, in-source etc) as your own. As you assemble a collection of bocks you imbue them with your own corporate personality.

Try it: describe your company uniquely without using your corporate name. This no-name discipline forces attention on your own Economic Building Blocks to describe your company’s uniqueness. As a business builder, Economic Building Blocks represent the distilled learning, reflected in your business model refined over your career and your years of experience, that lend credibility to your future and its financial projections.

If you want to get credit for your future, you need to make that future predicable to others. Just like in the stock market, predictability of future growth enhances the value of any stock. As you improve your skill in using the universal language of business, you’ll quickly discover how powerful this language is for more audiences than you might guess. Yes, it’s the language for raising capital from investors- family and friends, angles or venture capital. And more, customers and vendors love it too.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

Ever seen a company that is perennially in the “fund raising mode”? Why is that?

Any business is naturally a profit making endeavor: you have a solution that is of value to a set of customers, you price it to cover your costs and end up with a profit. So that is the problem?

True, many business models are dependent upon a scale issue. Serving one customer is different than serving a market full of customers. Scale requires an investment in infrastructure including rent, marketing, on-going product development, product-delivery on a mass scale etc.

The challenge of building infrastructure is that you must invest in it before you are rewarded with the increased revenue that your infrastructure is designed to support. Scaling a business is made up of 2 elements: building the infrastructure and funding the timing gap.

The timing gap – before revenue synchronizes with expenses to yield the profit you designed into the model- is the place where many companies let themselves become equity addicts. It seems like its necessary to get outside funding, so they do, and then, it becomes an addiction.

Actually, most of your infrastructure (such as raw materials, production, even marketing) can be funded with non equity sources- for the asking- when it comes from sources who stand to benefit from your company’s success. And when you reach out to such non equity sources, your growth will be safer. The most valuable source of funding for any company is customers, and after that vendors. Involving customers and vendors also delivers a market discipline, which ensures that any growth is market-supported.

Customers, voting with their purchase dollars, will prevent you from adding features that are not valued, or otherwise going in directions that will not increase your revenue stream. And when you are delivering solutions to resolve the customer’s pain, customers will be happy to offer you more than revenue dollars. It’s not unusual to receive advance payments to fund production; or for customers to act as an extension of your sales force encouraging peers to buy, because your solution is so important to them. Even outright gifts- no strings attached are possible. Vendors can do the same thing plus offer you breathing room with deferred payments much in excess of traditional trade credit- even 270 days or more. Used properly, you can create a mosaic of different small pieces from different sources, which together make up your unique financing solution for all your know expenses.

Unfortunately, companies that use “OPM” (other people’s money) lose that powerful feedback mechanism. That’s why it’s so dangerous to get your business into the equity addiction.

Yes, you will need some equity, but sharing your future with participants who will benefit from your success will limit the amount of equity you really need. Equity should only be applied where nothing else will do.

Now you can limit your need of equity for just that timing gap-the unknown of how long will it take for the market at large to accept a new product or service. Just like the unknowns in your family life, the only way to deal with the unknowns is a safety net. Family’s have “emergency cash reserve” to address the unexpected. Your company deserves a safety net also- which, like your family cash reserve, must be liquid. That is the proper use of equity. Now you need never be an equity addict.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

To put your vision-driven growth into action, y you need a corporate resume. Just like a concise, personal curriculum vita, a corporate resume is typically just 2 pages, but instead of documenting only the past, your corporate resume builds upon your company’s strengths and distinctions- like so many economic building blocks, so the reader can see your future- written in the universal language of business- in dollars and cents.

A corporate resume includes a set of financial projection based on 2 important assumptions: unlimited resources and unlimited time. It shares your goal, out 10 years from now, assuming all the money needed to build your business were your own.

Why is this important? Because if you don’t communicate to the world where you want to go, no one will know and no one can help you get there.

Daniel Burnham, Chicago’s famous urban planner who gave us the legacy of a beautiful lakefront city said “Make no little plans; they have no magic to stir men’s blood. Make big plans…”

Based on your 10 year revenue goal, declare your profit margins. As a double check, your profit margins should be bigger than they are today- by a factor of 2 or 3. Enhanced profit margins are a mathematical confirmation that you are building only upon what you do best- your competitive economic distinction. When your projections capture all your most attractive profit-making opportunities, you gain benefits of:

1.
Successfully penetrating new markets and preempting competition

2.
Winning premium prices for your innovative solutions

3.
Economic efficiency reflecting technology, optimized capacity and scale.

Together these elements contribute to a dramatically richer bottom line and stronger cash flow

Best of all, you just might notice this growth strategy, based on your company’s uniqueness, is much less risky than the strategy you might have pursued, constrained by the usual assumption of limed resources. I say this because I believe this optimum growth strategy is the one you would intuitively pursue if all the resources needed were your own. It’s the strategy with the highest return and the lowest risk, built upon your company’s uniqueness. That makes it the most exciting, safest and most profitable future possible.

True, to get there you might need some resources you don’t have. In fact you might not even know how to get there. That means you are limited in your ability to select others to help

Part of the magic of sharing your corporate resume is to attract resources that can help you address what you don’t know you don’t know. A corporate resume lets you reverse the process: share your vision and let resources “self select” themselves. This is how you attract resources that share your vision and want you in control.

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This works extremely well with top notch talent: while it’s hard for you to know the right skills, it’s easy for talent with hindsight and experience to see where you want to go and offer what you don’t know to ask for.

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Sharing your future also attracts your perfect customers who just might offer to underwrite financial costs to accelerate your ability to serve them. I’ve seen all kinds of resources offered, from 100% advance payment with order to outright gift –not equity, not debt- a gift- all because your product is important to your customer.

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Vendors too respond to big goals. They get excited about the new market you are building, and would like to share in it. I’ve seen generous payments terms as long as 270 days, on top of excellent preferential pricing

As entrepreneurs we have a unique ability to create a future that does not exist until we make it-that is our pain unless we make it our asset. A corporate resume is the key to communicating your vision-driven growth and putting it into action. A corporate resume attracts others who can fuel your passion and keep you in control of the future you want.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

While setting the course for your company’s future is the responsibility of the CEO, no skipper would navigate his boat on the changing seas without input from his crew. Yet so often, the CEO is moving so rapidly that your team- charged with execution- is left to execute the last communicated course, not the CEO’s real time thinking. Worse the CEO doesn’t have input from the field to influence the course. The result is “Vision Gap”. When Vision Gap is eliminated, it makes room for powerful vision-driven growth to take place.

Fortunately, you are the leader of a company that employs a talented team committed to help you achieve the company’s potential through their assigned roles. Invite your top team members- perhaps 6-10 people to discover which future you really want. Be sure to include representatives from each discipline: operations, marketing, finance, product development, personal to uncover a composite picture. This is different from getting a story from a single person who by definition can only see the picture from their own perspective.

Yet a multidiscipline group can be hard to work with because each member comes to the table with a different set of experiences and responsibilities, like the old fable about the 6 blind men describing an elephant. Certainly the one holding the tail has a different experience of this huge animal than the one holding the elephant’s ear. Yet with careful coordination and communication, these blind men actually do come up with an accurate picture as each reveals a critical detail from his feel of things- a perspective not available to the others.

Similarly, you might be surprised what your operations person has to say about marketing, or your controller has to say about marketing. In this way, each manager contributes different economic building blocks of your company’s uniqueness that might otherwise be taken for granted. Taken together, these building blocks distinctly describe your company in a way that couldn’t describe any other company, and becomes your company’s competitive economic distinction.

If you were under the mistaken impression that this was a “normal business strategy session” you‘re in for a surprise. This creative process is more like a talented jazz ensemble of highly specialized and talented players who quickly begin to improvise together, letting each member take the opportunity for a solo before passing the spot light on to the next player. Ultimately this team unifies in a wonderful common harmony which ties all the individual themes together.

Vision-driven growth allows these motivated mangers to locate the intersection of where value drivers for their customer and the team’s own passion brilliantly point to what your company does best. Best of all, during the process, each manager gets very clear on how each can personally drive value in your company and everyone buys into the excitement of living this bold plan.

The result is your optimum growth strategy- the strategy that delivers the highest return for lowest risk built upon what you do best. Your unique business model which no one execute as well as you do.

Are you ready to liberate your optimum growth strategy? All entrepreneurs know that business strategy and finance strategy are related. Unfortunately, most link these strategies in the wrong way. Conventional wisdom declares that the availability of resources dictates business strategy. As entrepreneurs, our greatest skill is surviving on scarce resources as a start up. However, if you don‘t shift that thinking at the right time, it will stunt your possibilities forever- like a child that chooses to crawl, never developing the muscle power necessary to walk and run. Your optimum growth strategy requires a separation of business possibilities from financial assumptions. This works because there is currency in your passion, as you will discover. Are you ready to convert your growth potential into profitable reality?

Once you reveal your company’s uniqueness you have a safe foundation upon which to achieve your company’s growth—profitable growth, faster safer than you ever thought possible, sustainable in a competitive global marketplace.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

This is not a trick question; the longer you have been in business, the harder it is to answer this question.

When you started your company you had a specific idea. But along the way 3 things happened:

1-
You needed cash, so you took on business that perhaps diverted your original focus

2-
The markets changed and you responded

3-
You learned more about your customers, their pain and how to contribute great value.

Any and all of these impacts ensure your business is constantly changing.

Right now I’m writing this blog from a Starbucks location near my office. What business is Starbucks in? When Howard Schultz joined this sleepy coffee shop in Seattle, they had one store and great coffee. Is Starbucks a coffee house? Actually, Starbucks exploded into prominence and dominance when it created “The 3rd Place” — a casual location that isn’t home and isn’t the office. Many people conduct business or use that 3rd Place to meet and chat with friends, read, or do homework. I regularly use Starbucks for writing books and speeches.

Knowing what business Starbucks is really in helps its management prioritize opportunities to position themselves for profitable growth. Early on Starbucks added food offerings for customers enjoying the 3^rd place at all hours of the day. With the addition of wireless Internet, many road warriors spend hours in Starbucks working on their laptops (and buying drinks and food). Recently I’ve noticed Starbucks adding music and books for sale, all the while expanding its accessories of mugs and toys as Starbucks sells its “brand”, just like Harley Davidson does.

A clear understanding of what business you are in ensures you capture your best opportunities, consistent with what you do best.

So what business would you say Amazon is in? Clearly Amazon began as a channel of distribution for physical products—initially books, magazines, DVD’s then expanded out to electronics, home, garden, sports and plenty more. But Amazon quickly laser focused on their expertise as “data collectors” of what people buy and Amazon quickly added recommendations of new purchases based on your pattern of historic purchases. That shift in business has meant billions of dollars for Amazon as it left its book-selling competition behind.

What business is Google in? Not sure I have an answer for that yet, but it will be fun to watch how this plays out. Google’s initial focus was to organize information on the net, provided for free. Google has been making a killing with its Adwords sale (helping users heighten their visibility with info seekers) suggesting an advertising revenue model. Based on recent acquisitions, Google is moving its role from “organizer” to “provider” on the net as it makes available applications to use the information it organized from any computer in the world, not just the computer where you’ve happened to have installed your personal software. Now you can use free Google processing applications and free gmail accounts as a complement to its free information flow. Now Google is committing to open source software platform for internet services on next generation cell phones.

In today’s fast changing global economy, the most important thing you as a business owner can do is focus – and refocus– on what business you really are in. And be prepared to be surprised! The best companies do not necessary start out with brilliant category killer ideas but they are supreme at noticing how the market wants them to behave and accommodating their loyal customers. A combination approach of suggesting a novel business model and then being willing to tweak it in real time seems best for today.

So what business are you in, really? The answer will determine how you will act day to day to sustain your profitable growth in a dynamic global marketplace.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

When you started your business, it was a twinkle in your eye. You could see the future but no one else could. Then you developed your product or service, got a few clients and you were in business.

However, because of your ambition, for a long time your business will be smaller than you intend to be.

How you label your company during this formative time will dictate your future because the choices of words we use are always important: that is the power of language.

Language is how we communicate our meaning to others. And language is a reflection of what others understand from us. Think of it in this simple example. As a native English speaker, you are asking for directions to the train station in China, but you are speaking to a person who studied English in school. The words used may not be received as you intend them.

Now think of a situation more close to home: How often have you described your company with terms like start up, early stage, small, emerging or the like. Did you ever stop to think what that language connotes to the listener? Unproven, risky, unsustainable, fragile, not trustworthy.

This language is also very imprecise. I’ve often heard companies with $25million in revenue use the same small business label as a company with $100,000 in sales.

Your choice of language is very powerful. Is language, in part, holding you back from the success you deserve with customers and investor?

What prevents you from speaking of the business you intend to be: innovator of x, or leader in the yxz niche- you get to define it, or specialist in xxx- you get to declare it..

Can you begin to hear the difference.? There is power in language and language can influence how customers and investors perceive the safety or risk in dealing with you.

How many customers want to be on the “bleeding edge” buying from a start up, an emerging or early stage company? Alternatively, how many more customers would be drawn to investigate a purchase from “the specialist in…”, or “the leader in..”? Perhaps even pay a premium for the early opportunity to buy! Simple shift in language can mean the difference in getting a customer to pay for a prototype or first production run vs having to give up equity to an investor for the same dollars.

And when you use language powerfully, you will make your company more attractive when investor capital is appropriate.

Language is your most powerful tool. It’s how you describe your vision and passion to make it real.

There is currency in your passion, all it takes is careful use of language to access it with those who want to buy.

Learn the proper use of entrepreneur-ese to make your future tangible enough for customers and investors to buy today.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

Entrepreneurs are really strong people. We go out on our own, we brave the competitive world like David against Goliath. We preserver with new products until we make our mark.

But sometimes our entrepreneurial strength can feel fragile. Without confidence, we won’t make the next call, or take the next step in the face of so many unknowns.

Confidence is simple a mind shift. Entrepreneurs who know how to nurture their own confidence are the ones who succeed best. Perhaps this is a kin to great athletes, who also must “see” themselves achieving their goals- they call it being in the zone.

For Entrepreneur’s the secret is passion– shared passion. And for Entrepreneurs, this is even more important because there is currency in that passion.

It happened to me just a few days ago. I was not willing to make a call, and could not get out of my own way. If I spend too much time interacting with people who do not share my view of the future, I begin to drain my own confidence and my ability to take action.

Luckily, I remembered my ability to generate my own confidence. I called a current client, just to talk. Not just any client, but my “perfect client”. A client who has passion for their vision, who is committed to making a difference in their world, and willing to act now. It was a short conversation, but it was all I needed. Passion is contagious. And I was recharged.

This was a reminder too, however, how dangerous it is for we entrepreneurs to spend time with “non” perfect clients, clients who drain our confidence and our energy.

In talking with my perfect client, it was a natural flow that we “designed” a new way for me to help them get where they want to go. I asked my client to name our new product – and so was born the “Vision Update”- tailored just for her. That’s actually the way I’ve created all my products and services- in response to my perfect clients sharing their passion of their vision and me applying my passion to help them achieve their vision. And I was reminded there is “currency in my passion”.

When I share my passion, I also attract my perfect client. Then I allow my perfect client to tell me how they want to buy it.

Passion is something each entrepreneur has early in life. We are clear on our passion when we start out- it’s why we go into business for ourselves vs staying in the employ of others. Early on we focus on communicating our passion. Over time however, with the battles of day to day and the pressures of cash flow, we allow ourselves to dilute our passion and take on clients that are not “perfect” . As we work with non-perfect clients we dilute our own passion and frankly dilute our distinctive currency. That is when entrepreneurship becomes hard.

The secret is there is currency in our passion and when we stay focused on doing what we do uniquely we are both happier, and wealthier. That is the power of entrepreneurship- we make our currency out of our passion. And all it takes is confidence- a mind shift we get to nurture for ourselves.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

This is a financing strategy based on your dreams.

Mike, a business builder, used his engineering background to develop a proprietary seating system for people confined to wheelchairs. As an inventor, he was proud to have gotten the price down to $1000, so he could not understand why sales were not growing.

Jim, an experienced executive, had been designing insurance reimbursement IT programs for his large publicly held employer for 15 years. He was ready for a change.

As soon as Jim had the opportunity to see what Mike was up to, Jim knew he could help. Jim offered to design and implement a software program that would allow Mike’s existing distributors to deliver an 80% reimbursement to the consumer at Point-Of- Sale. The net result: Mike’s seat dropped in price from $1000 to $200 by dint of the 80% reimbursement rate.

Mike was so impressed that he offered Jim a share in future sales. Instead of taking cash out of the company, Jim deferred any compensation and put in a small investment to catapult the marketing launch!

Did you know that Angels come in 2 extremes? Some Angels have more time than money; some have more money than time. Most people have heard of Angels who will invest cash and offer high level guidance. That’s excellent for some situations, but my experience is that the more passive the investor the higher the cost of money. Why? Because passive Angles must add a risk premium to a future which has not yet been realized. In contrast, active Angels – with more time than money – can also contribute critical talents to convert unknowns into profits. Their investment therefore, does not include a risk premium for any portion of the unrealized future they know they can personally manifest. In many high growth situations, this can be a significant reduction in capital costs, as it was for Mike.

I believe that virtually any successful business person knowledgeable in your industry could become your Angel, if you inspire them with your excitement and clarity of your business dream.

To learn more about how we facilitate this matching process using the Brain Trust LinkUSA™ visit us at http://www.CapitalLinkUSA.com or email me at

Stefania (at) CapitalLinkUSA (dot) com

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

No matter how much you plan, the future is unpredictable. That means growth can put all that you have at risk unless you address 2 different kinds of expenses:

1.    the “known” expenses– e.g. rent, advertising,  employees or service providers etc. and

2.    the “unknown”- what you can’t predict. For a fast growing company in a global marketplace, there are lots of unknowns!

There are lots of ways to finance the known expenses, including bank financing, vendor credit, barter etc.I teach clients how to use my Mosaic Approach™ to increase their options for funding the known expense.  To understand this concept, think of a decorative mural made up of different flecks of color. The concept of a Mosaic applied to finance takes advantage of the concept of divide and conquer. This involves dividing your financing needs into small pieces so that with each piece you put in place, you lower the risk to the next piece, so you conquer abundant resources. The more pieces you attract, the more credible your future becomes. Using this concept of divide and conquer, no single financial piece is responsible for your success and you are hostage to none!

Unfortunately, too many companies stop financing after addressing their known expenses. What about the unknowns? Just like your family has a cash reserve- in case of emergency – your company needs a safety net. There is only one way to finance the unknows: with equity.

That’s good news because equity can be your cheapest form of funding when your future is bigger than your past! Too many entrepreneurs assume that $5 million of equity cost more ownership and control give up than $1 million- but it’s not true, if you can get credit for your future today! The Mosaic Approach helps you make your future tangible enough for investors to buy today.

Getting the highest valuation from investors is not just a good idea. It’s a confirmation that you have found the right investors–those who see your future where others only see risk.

Click here for my free online course for details on getting money to grow your business while keeping control by addressing these 2 kinds of expenses.

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com

By Stefania Aulicino

Which set of financial projections should you share with a prospective investor:

• the most conservative?
  
• the most aggressive?
  
• the most probable?

It’s a trick question. None of the above! You should only share financial projections of the future YOU would fund if all the capital needed was your own. That’s your Optimum Growth Strategy™.

Each of the other projections has its own purpose: The most conservative is appropriate for your banker; the most aggressive is great to discuss with your management team; the most probable is valuable to use with your accounting for tax planning. However, in the hands of an investor, each of these other plans would match you up with the wrong kind of funding source: too conservative, too aggressive, too undistinguished in a competitive landscape.

In contrast, the Optimum Growth Strategy details your vision- a vision no one can see unless you share it. The Optimum Growth Strategy is a very specific strategy based on your personal insights as a Business Builder; your knowledge of your marketplace- its risks and opportunities. It is also based on your distinctive know-how that makes your future different from anyone else’s. As a result, the Optimum Growth Strategy is the strategy that delivers the highest return for the lowest risk. That is the business definition of optimum.

I help clients discover their Optimum Growth Strategy because sharing it ensures you will attract abundant resources that will help you get where you want to go. That makes for a good marriage! One where the investor you attract wants YOU in control! The result is a synergy where you just might just exceed your own greatest corporate ambitions. Profitable growth. Faster. Safer than you ever thought possible!

Stefania Aulicino is founder president of CapitalLInkUSA. For 20 years Stefania has helped business builders uncover the right capital for their optimum growth strategy so you get cash and keep control to build the business you really want. www.CapitalLinkUSA.com