Take This Test Before Committing to a Partnership

Learning more about your potential partner(s) before you start is critical to your success.

In theory, a business partnership is an exciting idea as two or more friends, relatives or acquaintances brainstorm a great idea and consider the financial possibilities.

In reality, partnerships are often fraught with conflicts and ultimately are unsuccessful because the common ground didn’t extend beyond that initial great idea.

That’s not to say a partnership won’t work — plenty do — but you’d better make sure the partners are compatible in terms of work ethic, commitment, personality and, perhaps most importantly, risk tolerance.

Say you believe you can grow your new company’s revenues to $1 million in three years. That’s all well and good, but if your partner thinks $20 million in revenue in three years is possible by taking a lot of chances (not to mention take on a lot of debt), you’re going to clash.

So, what can you do to avoid clashes like this and reduce the risks – you’ll never eliminate them completely — that partnerships sometimes present?

In my new book “The Growth Dilemma,” I suggest that each potential partner take a risk tolerance exercise and compare answers. This will give you grounds for comparing business philosophies.

Here’s that exercise:

For each question, indicate one of the following scores:

1 – Would not consider.

3 – Would consider given a better understanding of the situation and the costs/benefits.

5 – Would consider, am open to the situation.

  1. By providing a personal guarantee you are able to obtain a larger credit facility, a lower interest rate or other generally more favorable terms. Do you provide the personal guarantee?
  2. Your business is doing well, growing organically each year, a solid management team is in place, and cash flow and earnings are robust. You are faced with the opportunity to expand (new production line, acquire a competitor, expand into a new facility) but do not need to. However, the financing is available. Do you expand?
  3. Your business is growing faster than your current lender can fund. You have the option of replacing the existing low-cost lender with a higher interest accounts receivable factor. Do you replace the conventional financing source with the higher-rate factor, understanding that otherwise you will have to slow down your growth? Consider your own specific growth situation (inventory, purchase orders, additional equipment).
  4. Are you willing to provide additional collateral (business or personal) in order to obtain the most appropriate funding structure for your business?
  5. You are facing a path in your company’s future, which can be for early-stage companies or anyone facing a significant change. Your options to address the issue have narrowed down to two choices: (1) equity partner or (2) financing. If you bring in a new equity partner, you may improve liquidity, resolve that issue, and/or improve your balance sheet, but you are now married to that new partner and you have ceded partial control of your business.

Or do you take the debt option, even if the cost of financing is high, but it means greater control for you but greater financial risk. Assuming that the equity partner is lower risk and the debt option is higher risk, how do you proceed?  (if you choose the equity route – give yourself a one.  If you choose the debt, give yourself a five).


5 to 12 – RISK AVERSE: Most risk adverse of the profiles choosing to take the more conservative paths that mitigate risk but also may limit growth and options. Best financing sources are conventional lenders or may opt for self-financing or equity funding only. The least leveraged of the profiles.

13 to 18 – RISK NEUTRAL: Open to risk when carefully balanced against the rewards. May see opportunity in some higher-cost, but quicker or more tailored, financing, while skewing toward more traditional sources.

19 to 25 – RISK FLEXIBLE: The intrepid entrepreneur willing to take risks knowing that can lead to larger rewards. May have the highest leverage of the profiles but seeks to match financing to asset class understanding the conditions that comes along with each.

Now look at the results.

If you score as risk flexible, but your childhood best friend is risk averse and your cousin is risk neutral, chances are high that arguments will result. On the other hand, if you’re all, say, risk neutral, the chances are good that you’re compatible.

As mentioned above, a myriad of family-owned businesses thrive in the business world, so there’s no reason to nix the possibility right off the bat. Still, if you want to save yourself a lot of headaches (and even heartaches), take pains to determine whether that working relationship is going to be the right one.


Using an SBA Loan in a Creative Way

Hypothetical example of the day: A client has a successful consulting business that’s been growing slowly but steadily. She’s well-respected in the field and has carved out a solid niche.

Her top-line revenue is about $2 million annually, After all is said and done, she’s taking home about $350,000 in profit. She’s not rich, but she’s certainly comfortable.

Still, she’s not completely satisfied.

The consultant has a stretch goal of $4 million revenue within three years. She believes that would take her annual profit to about $1 million.

Yet she’s held back on expanding her business because she needs to install a management team that would cost about $350,000; she estimates that it would take about a year for that team to pay for itself. The team would handle a lot of day-to-day chores that prevent the consultant from the networking and other tasks that help lead to expansion.

The client manages her business like a household budget — and prides herself on the “no debt badge of honor” — but worries that if she forks over the $350,000 for the management team, it will leave her with no salary for a year.

Can she afford to make the management team investment?

If she takes a loan backed by the Small Business Administration (SBA), she certainly can.

Let’s say she secures a $350,000 SBA-backed loan with a term length of 10 years and an interest rate of 7 percent. That means she’d be making monthly interest payments of $4,064, or $48,768 per year.

Granted, that latter figure comes off her “take-home pay,” but it still leaves her with a “salary” of about $300,000. That’s far more than she’ll need to avoid the McDonald’s Dollar Menu for the year.

And while she’ll end up paying $137,656 in interest over the course of the loan, that’s literally pocket change if she meets her goal and earns $1 million in profit annually – a tripling of profit. Also remember that if the best-case scenario occurs and she does start clearing $1 million annually, she could pay off the loan more quickly.

As for the worst-case scenario – where the management team bombs and revenue remains unchanged. – the debt service is just $49,000 a year.

We’ve talked about best-case and worst-case scenarios, so remember that your experience will  likely be somewhere in the middle, which makes the loan still more than worthwhile. And that’s how you should evaluate whether the loan is right for you.

A note: Non-SBA lenders may be able to offer you loans that also would work, but SBA loans tend to have the best combination of rates and repayment terms.

In a world where federal, state and local government programs are routinely criticized, the SBA bucks that trend and does a tremendous job helping small business. You can make a strong argument that the SBA is underused and should be expanded.

Before we conclude, let’s talk about debt.

Lots of clients are scared of debt, but in a sense, debt makes the world go around. Think about it: Could you afford your house and maybe your car if you couldn’t make monthly payments?
It’s no different when it comes to your business, especially if you are confident in your prospects going forward.

Yes, there is risk involved, but you can’t make money if you don’t spend money.

Sure, too much debt can be crippling — and a lot of companies (not to mention individuals) find themselves hopelessly mired in repayments. But as noted earlier, the client here is proud that she has no debt, so she should be able to easily handle $4,000 monthly payments.

A Hypothetical Situation: Does it Make Sense to Use an SBA Loan?

Understanding terms and interest rates are keys to decision making. Let’s run a scenario together.

Your company has reached a potentially game-changing moment in its history: It’s time to make a big investment.

Things are going well and the opportunity presented may well make your company grow exponentially over the next few months and/or years.

For the purpose of this exercise, it doesn’t really matter what the investment is, but let’s say you need $500,000 – a far bigger amount than you’ve ever sought.

After conducting your due diligence about loan opportunities, two options emerge as the best possibilities.

A.  A local bank offers a conventional term loan for five years at an interest rate of 5 percent. Your monthly payment would be about $9,436.

B.  A Small Business Administration-backed (SBA) lender offers a 10-year loan at an interest rate of 7 percent. You’d be paying about $5,805 a month.

Which do you select?

Depending upon how quickly you generate cash, the first option might be best for you. And logically, it looks like the best deal — you’d be paying only $66,137 in interest over the course of the loan, compared to $196,651 with the SBA loan.

Surprisingly, though, more often than not, the SBA loan, while not the better “deal,” might be the best option.

How so?

As mentioned above, your company is at a pivotal point in its life cycle. This loan is a significant step ahead, and it’s certainly a bit nerve-wracking. In all probability, you’re stretching yourself to the brink of your comfort level.

And that’s why you should seriously think about the SBA option — because the longer amortization period and lower payment gives you some much-desired flexibility.

By paying $3,600 a month less in loan repayments, you retain the ability to put out any fires that spring up.

What happens if a key piece of equipment breaks and needs to be repaired or replaced?

What if you get the opportunity to buy some raw materials at a rock-bottom price?

What would you do if you found yourself facing unexpected legal action?

None of those situations are ideal, but things happen. With the SBA loan, you may still have the bandwidth to deal with them. With the first option, you’d probably be overextended and could be forced into a loan with rather unfavorable conditions.

This all goes back to a common theme many entrepreneurs — especially newbies — fail to understand: Debt is not necessarily a bad thing.

Debt is a tool that can be made to work for you. Without it, how could you afford your house, your car or your kids’ educations? Broken down into bite-sized pieces — a/k/a monthly payments — they allow your both personally and professionally the chance to live your life.

Granted, debt must be carefully managed, something that a good chunk of the public at large and a percentage of business owners fails at miserably. But that’s why you do your due diligence and carefully consider all financial options and scenarios before leaping ahead.

And if you’re still not sure, that’s what financial advisers are there for. Never be afraid to ask an adviser or a trusted mentor for a second (or third) opinion.

A Test With No Wrong Answers

Although one is preferred.

Back in your school days, you likely had tests that included multiple-choice answers. And sometimes the difficulty of those questions was compounded when one of the answers was “all of the above.”

That’s the situation workshop participants encounter during an exercise I suggest.

Question: Your company is enjoying a banner year and you’re looking to keep the momentum (and growth) going by buying a piece of equipment that costs $100,000. How do you finance the purchase?

  1. The manufacturer offers a 2 percent discount if you pay upfront, so you pay $98,000 in cash.
  2. The manufacturer offers 0 percent financing for 12 months, giving you a monthly payment of $8,333.
  3. You obtain a five-year note with a 3 percent interest rate. Your monthly payment is $1,797 and there’s no pre-payment penalty.
  4. Any of the above options could work.

The correct answer here is D, although read on to see the preferred choice.

Most growing small- to mid-sized companies don’t have piles of cash lying around, but if you’re the exception, and can get the equipment at a discount and don’t have to add debt, go for option A.

Meantime, if you have strong monthly cash flow and don’t have a lot of debt to service, option B may be a great choice.

That said, it’s likely that most companies are going to pick the third option.

Cash flow typically is a problem for our clients, so paying for equipment in bite-sized pieces tends to be the most-palatable option. A 3 percent interest rate is more than manageable, especially for clients that tell tales of interest rates topping 20 percent. And with no prepayment penalty, if you happen to somehow wind up with excess cash, you can always pay off the loan balance.

More often than not, we recommend option C to our clients, even those that are legitimately considering the first two options. The reason for that is flexibility, which means having more options.

Say you decide to pay for the equipment up front, using up a majority of your cash on hand. What happens if there’s some kind of emergency that also requires a significant outlay? Or what happens if there’s a situation when you need to spend money to make a much more significant amount of money?

All of a sudden, your options are limited and you may be forced to secure a much more expensive loan. The interest on that loan may negate the few thousand dollars you saved when you paid cash instead of took on a low-interest loan.

Too many entrepreneurs are scared to take on debt. While there’s a general perception that debt is a bad thing – and too much debt certainly is – a reasonable amount of debt is a tool your business can use to grow and stretch your expectations.

Remember that if by assuming some debt it gives you a chance to increase your growth rate and cash flow, you may find yourself paying off that loan faster than you expect – opening up the possibility of using debt again to further improve your prospects. That’s the happy exact opposite of a death spiral.

Do You Have a Partner That’s Driving You Crazy?

Here is a creative solution that may resolve the problem.

High divorce rates are proof positive that it’s hard for people to get along, even for those deeply in love at one point. True love invariably fades, at least to some extent.

The same is true when it comes to business. You may start a partnership with the best of intentions and the partners seeing eye to eye on every important issue.

If you’re incredibly lucky, your goals, plans and intentions will continue to mesh with those of your partners in the long term. More likely, there will be some disputes that cause tension at times but ultimately will be resolved.

Unfortunately, there’s also a chance that you and a partner end up mixing as well as oil and water – with the damage irreparable.

You might think you’re stuck, making you miserable, not to mention hindering your company’s operations.

But there’s a possible way out of it.

The federal Small Business Administration (SBA) is the rare government-sponsored institution that works the way it was intended, but it tends to be overlooked by a lot of businesses that think they are ineligible for its programs.

That’s often an inaccurate assumption — and it can even help you out of a partner problem.

Consider this example:

You are one of three partners in a business that’s successful, but could be doing even better. Each partner is drawing an annual salary of $250,000. Yet one partner is driving you and the other partner crazy because his vision for the company is at odds with yours. The differences cannot be settled; there is no middle ground.

After assorted discussions, the questionable partner tells the two of you that for $1 million he’ll relinquish his share of the company.

What do you do?

This is where the SBA comes in – an SBA-backed 7(a) loan could provide the money needed to buy out the problem partner. SBA loans contain numerous benefits, including low down payments and generous repayment terms.

Under traditional terms over 10 years, that loan will cost about $11,000 monthly to repay, an annual debt service of $132,000. That may seem like a steep price, but remember that the deposed partner’s $250,000 salary goes away, too, saving you $128,000.

While the peace of mind alone may be worth it, the ability to properly manage your business and move forward with your plans may well cover that difference easily anyway.

A lot of small business owners are terrified by debt – and large amounts of it can be crippling – but this is just another example of how debt can work for you. The old adage that you have to spend money to make money is true, so just consider debt as another form of spending money. Remember that this likely will be money well spent.

Of course, before any buyout you probably want to check with legal counsel to help you avoid mistakes during the “divorce.” Your partner may go away, but the lawyers never do, although that’s a topic for another day.

Sometimes You Need More Expensive Financing

Price-shopping is something that nearly everyone does at some point in their lives.

Whether it’s parents stretching their household budget, kids trying to make their allowance last or multi-national conglomerates trying to get the best possible deals from suppliers, it all comes down to the best deal. Consumer and business advocates constantly harp on the importance of getting the most for your money.

That’s usually sound advice.

But when it comes to businesses in need of financing, the interest rate, while important, shouldn’t be the end-all, be-all factor.

Consider this example.

A company that generates about $25 million annually in revenue has a bad year. That prompts the bank to call the owner’s 5 percent line of credit.

The owner then rejects his financial adviser’s suggestion to secure an 8 percent asset-based line of credit from a different lender. The owner says he doesn’t want the added $150,000 annual expense the more expensive credit would create.

For the time being, the business owner is stretching out payments to his vendors, which certainly isn’t engendering good feelings.

Meantime, he’s looking into the possibility of selling equity in his company for the first time.

What are the risks to this approach?

For one thing, messing with vendors is a perilous proposition. Getting cut off is a real possibility — and that creates numerous other potential problems that can threaten the viability of the business.

And then there’s the issue of taking on partners by selling equity.

Sure, the infusion of cash is nice (as is not having new debt), and if you lose money or go under, the investors, having understood the risk, may not have to be repaid.

The flip side is that those new partners will be around forever.

What happens if you and those partners disagree on the company’s direction? There are numerous cases of that occurring — and there have been multiple instances where the original owner was forced out of the company.

Even if things don’t deteriorate to that extent, your agreement with your partners might require periodic dividend distributions to shareholders. Because small and mid-sized business in growth phases often want to reinvest all profits back into the company, those dividends could severely limit your growth potential. That’s clearly less than ideal.

Whether you choice to sell equity is up to you — and given the right investors it can work out fine — but you should strongly consider the idea of debt with a higher interest rate.

Sometimes you simply have to pay the piper for a while. It’s unfortunate and unpleasant, but it’s not the end of the world.

If you truly believe your business plan is sound and your future prospects are bright, the higher interest rate ultimately gives you added flexibility. Should you return to your usual level of profitability (or even a higher one) and enjoy strong growth, the chances are good you’ll be able to find new funding at a rate comparable to — or even better than — what you had before.

The Dilemma of Being an Entrepreneur: Five Common Struggles

You should know that you are not alone and there is usually always a solution to your dilemma.

Thanks to portrayals in both film and fiction, the public thinks of entrepreneurs as bold and dashing men and women who combine a visionary view of the world with boundless energy and a keen sense of unfulfilled marketplace needs.

Think Elon Musk or Richard Branson.

And while the influence of game-changers like Musk and Branson can’t be ignored, they represent the very top of the entrepreneurial marketplace, just like Tom Brady is arguably the best QB ever, Beyonce is an elite singer/performer and Meryl Streep is recognized among the finest actresses ever.

So while the classic stereotype of an entrepreneur is one who is always running, pushing the envelope and taking risks, you should know that at every stage of their journey, entrepreneurs have quiet fears or dilemmas that are holding them back. Sometimes these dilemmas can end up wrecking a business, but more often than not there is a solution.

Let’s look at five of the more common dilemmas.

  1. Motivation paralysis, which is a fancy way of saying you’re not sure what to do next. Entrepreneurs always want to be moving forward, but that can be difficult if you don’t know what to do next. Of course, nobody has all the answers all the time, so this may be the opportunity to consult with a business coach, members of a Vistage group or anyone who can provide a fresh perspective on what you’re doing. Some entrepreneurs may feel ashamed to seek help, but this is misguided; nobody has the answers all of the time.
  2. Being ground up. This means you don’t have time to think about your next move because you’re so busy in the daily grind: You’re working in your business instead of on your business. In reality, this status is inevitable at some point, particularly early in the life-cycle of your business. This occurs when you’re working long hours, are understaffed and are coping with common issues such as underfunding and limited professional network connections. Entrepreneurs often are loathe to delegate tasks, especially early on, but that’s what you might need to do to free up some time for future planning.
  3. Lack of cash. In almost every scenario, it requires cash to grow a business. And this is where a significant chunk of all entrepreneurs get bogged down. While the perception is that entrepreneurs are riverboat gamblers who don’t mind taking on debt for a chance to pay back that debt (and earn much more), the reality is that plenty of entrepreneurs don’t have the stomach (or think they don’t have the stomach) to assume more debt. That problem often is exacerbated by a lack of knowledge. Many entrepreneurs are unaware that there are numerous financial options open to them, depending upon how much risk they’re willing to assume.
  4. C-level tension. Just because the partners are all family members, close friends or trusted business professionals, it doesn’t mean you won’t clash when it comes to the future direction of your business, or even day-to-day operations. Perhaps you are the partner most interested in rapid growth and the others are more conservative – or vice versa. Or perhaps there are as many different opinions about what to do as there are partners. In any case, you’re going to have to reach some kind of consensus to be able to move forward.
  5. Why mess with a good thing? Things are going well and, rather than stress out about making the business even better, why not enjoy things as they are? There’s something to be said for the “don’t worry, be happy” philosophy – and there are brief times when it makes sense to leave things be. But most of the time you need to be thinking a couple steps ahead. The cliché “If you’re not moving forward, you’re moving backwards” makes a lot of sense. The status quo might temporarily leave you stress free, but that will change the first time problems emerge – and it’s guaranteed that they will emerge. It’s much easier to work from a position of strength than to jump in and tackle emerging problems, so thinking about the next step must remain top of mind.

Which ones of these dilemmas best describes you? Note that your particular situation may include two or more of these dilemmas or some kind of amalgam of them.

Whatever the case may be, dilemmas are something that should not be ignored: There’s no such thing as benign neglect, and problems will never go away on their own. You take pride in your business and must be laser-focused in making it work.

Granted, there are issues that end up being death blows for some businesses, but the five dilemmas described above shouldn’t be among them. They’re real problems, but hardly insurmountable.

Just remember that you don’t have to go it alone. Reaching out for help is not a sign of weakness; to the contrary, it’s a sign of strength. It takes a strong person to admit they need help and tackling a bit of adversity is a way to make than strong person even stronger.

Keeping It In The Family: Pros and Cons

Working with family members can be fulfilling and exhausting at the same time, think it through.

Harper Lee may have been a legend in literary circles for To Kill a Mockingbird, but that influential novel also contains a nugget that any entrepreneur should ponder when deciding whether to work with family members or close friends.

Jem, the older brother of main character Scout, opines: “You can choose your friends, but you can’t choose your family.”

With the holidays just concluded, plenty of people dealt with relatives for better or worse. Still, sitting through a three-hour meal isn’t too big of a chore – but working day in, day out with relatives can be.

Yet many people start family-owned businesses, so let’s take a look at four reasons why it’s a good idea – and four reasons why it might not be.


  1. Loyalty is likely to be the same for everyone, and the goals probably will be similar. Enjoying a level of intimacy with principals is important because it engenders a built-in support system. In other words, it’s isn’t just a paycheck. In addition, there likely will be added stability; an outsider may be an excellent employee, but he/she is going to be looking out for themselves first and foremost and could depart for a better opportunity at any time. Family members are there for the long haul.
  2. By working with family members, you also enjoy a greater degree of flexibility. Your brother-in-law serving as CEO is probably going to be more understanding when you want to take a long weekend to celebrate your anniversary than a complete stranger or when you rush to the hospital because your son has broken his ankle playing football.
  3. A family-run business often is an ideal marketing point. Customers seem to like patronizing a family-run organization more so than a faceless corporation. Just think how often you see businesses that proudly tout their family connections. Putting a face to a name is important, particularly when you are just starting out.
  4. Especially in the early stages, a family-run business may enjoy lower operating costs. Outsiders aren’t going to work for free or minimal compensation as the business tries to find its feet, but family members have more emotionally (and likely financially) invested and can wait to enjoy the proceeds when the business succeeds. You’re also more likely to be able to run the business from a family member’s house, if need be, saving on rent.


  1. The fact that someone is a relative doesn’t automatically mean they’ll be the right fit for your company. Plenty of relatives turn out to be lazy, dishonest, unreliable, misguided or just plain stupid. If you have to fire that relative, the process will be that much more difficult because they’re family. And imagine the repercussions within your extended family – that annual Christmas party may turn out to be kind of uncomfortable.
  2. Next, consider sibling rivalries or other family divisions. When you were 12 and your brother was nine, you may have settled differences with a punch or two. That might be standard operating practice for kids arguing over what TV show to watch, but it doesn’t fly in the business world, when disagreements mean real money. The rivalries may not involve siblings at all. What happens when it comes to succession and your kids want to take the company in a radically different direction – or aren’t interested in the business at all? Can you deal with the former or accept the latter?
  3. Here’s something you probably haven’t considered as a potential problem: a lack of perspective and alternative viewpoints. Having everyone getting alone and pursuing the same business philosophy would appear to be a good thing – or is it? If everyone working in the business has similar life experiences (or lack thereof), it could create blind spots that could sabotage your operations. In this case, an outsider’s perspective could be helpful.
  4. Family-run businesses often lack a clear corporate structure, in part because of the all-hands-on-deck mentality and partially to maintain a belief that everyone is of equal importance. That’s good for keeping family members happy, but not so good for regulatory agencies and overall professionalism. You also run the risk of having employees who are not family members feel neglected when nepotism is obvious.

If you’re not scared off by now – or reassured that your family members can work together – what’s the best way to reduce the risks inherent in business that are family run of feature close partnerships of friends?

Perhaps a spreadsheet where you consider the issues discussed above is in order. Are you finding the principals have a lot in common or are there more disagreements than you imagine?

Pay particular attention to risk tolerance, which is something that can go a long way in gauging how well you can work together – and also is crucial in determining what kind of financing options work best for you. You’d be surprised about how many companies are paralyzed by executives who have different philosophies about how much risk they’re willing to accept.

Working with family members and/or close friends may still be your dream scenario, and there are plenty of examples of success, so don’t be scared off by the potential problems discussed here. Just be sure to pursue your due diligence to head off problems that otherwise could be avoidable.

Cutting Through the Fear of Publishing a First Book

You must believe that your content will help others.

Typically, when I sit down to write a column, I spend some time reflecting on my interactions with entrepreneurs over the past week, and I look for an experience that I think has a universal lesson that I can share.

Over the past few weeks, I have struggled to do this.  And the only logical explanation I have for lack of clarity is that I am immersed in the petrifying and exciting process of getting my first book into the market.  In about two months, The Growth Dilemma, will hit a bookshelf on a browser near you.

In today’s column, I have decided to share my emotional state as a first-time author.  I hope this will help others push through the process, and put ink to paper.

It’s been about a year and a half since I started working on the book, and as it gets closer to being released the pit in my stomach grows.  Will people care?  Will I break through the noise of the other 300 books published on Amazon every day?  Will readers like it and post good reviews?  How should we market it?  The decisions and the emotions go on and on.

I have helped launch dozens of new products over my life, and yet somehow a book is different.  There is nowhere to hide, this book represents me and what I believe in. Secondly, a book is different to building a website, as an example.  If you launch a website on a Monday, you can wake up on Tuesday and decide to change the font color from blue to green with the click of a button.  With a book, you can’t do that.

Over the weekend, I sat with a friend and explained my nervous state of mind.  He pushed me to calm myself down, and explain to him, in a few words what I hoped my readers would glean from The Growth Dilemma.

After a few rounds of back and forth, the description was clear.

I told him that one of the biggest and toughest decisions entrepreneurs struggle with is how to finance their businesses.  The Growth Dilemma is intended to help them challenge their assumptions about how they think through their financing decisions, and either find a new comfort zone or be comfortable with where they are.

My friend then asked me if I thought a book like this existed.  I told him that I did not.

He encouraged me to shake my nervous anxiety, and enjoy the excitement that I would help my readers.

My best advice to any aspiring author is to be confident in your purpose, and the rest of the pieces will fall into place.

Is Growth a Dilemma?

You need to think about your next big steps carefully.

Holiday seasons are a time for enjoying family and reflection.  And this year, for me at least, I am thinking a lot about my upcoming book, The Growth Dilemma.

How big would you like your business to be next year or three years from now?  For most entrepreneurs, the initial gut instinct is “as big as possible,” or “much bigger then we are today.”

In our culture, we celebrate “big,” and we encourage “fast.”  We read lots of articles about tech giants.  We celebrate IPO’s.  We high five friends when they receive venture capital funding off a napkin.  Inc.com celebrates the 5000 fastest-growing private companies every year, and entrepreneurs are proud to be on the list.

So is “big and fast” the best route for every entrepreneur.   The answer is not always clear.  How quickly you want to grow your business should be a dilemma that you struggle with and think through very carefully.

We read about the successes of the “big and fast” strategy, and the winners of this game often become the business icons of our society.  But rarely do we hear about the failures.  Not many people write about running out of steam on the venture capital treadmill, and not being able to get “the next round.”  People don’t like to tell the stories of the “failures” of the “big and fast” culture that we celebrate.

This is why you have to think long and hard about how you want to run your race.

Too big, too quickly comes with a lot of risks.  If the venture capital treadmill doesn’t get you, you could drown in debt payments.  Financing might not be the issue, but unsatisfied and angry customers could destroy you due to quality or customer service issues.

I recently heard a story of a budding franchisor who passed away of a heart attack because of the stress of buying too many units too soon.  He didn’t even get one open.  In our business, we receive countless calls from desperate business owners who invested too much, too quickly and are now struggling to survive.

I am not suggesting that you sit on your hands and don’t take any risks or place any bets.  To the contrary.  If you move too slowly or get stuck in complete “analysis paralysis,” your competition will pass you by.

You need to find a rhythm that you are comfortable with.  You need to make your choices thoughtfully are carefully, but not based on wanting to be the next Facebook or Twitter.

That’s why I think The Growth Dilemma is such an important book.  It doesn’t give you the answers, but I hope it will guide you through the right questions to find your comfort zone and move your needle.