You Are Not Bigger Than Your Company. Here’s Why

You Are Not Bigger Than Your Company. Here’s Why

In my last post, I talked about losing my father a few months ago. Even in death he taught me more about business than perhaps anyone else.

As his health declined, I essentially disappeared from my company for a couple of months. Between flying from coast to coast to see my father and making different arrangements, contact with my team was minimal. I trusted that my team would run the company just fine in my absence — and that’s precisely what happened.

I have learned that a company is more significant than just one person, especially if you have been in business for some time.

Why Time Away is Good

It turns out that the only thing that I had to do was cancel a few speeches– no big deal. My experience shows the importance of putting together a good team, establishing a caring culture, and promoting consistent values.

Maybe you are the genius behind your company, but unless you’re running a small operation, other people are executing your plans, and I assume you trust them.

One theme I come across repeatedly is the entrepreneur who refuses to relinquish any measure of control for fear of disaster immediately occurring. It’s a serious problem in more ways than one. Not only does the entrepreneur risk burnout, but a lack of differing opinions can lead to tunnel vision, not to mention a lack of checks and balances.

Again, remember that your team is more capable than you think. If you’re proficient enough to be a successful entrepreneur, you probably had the foresight to choose strong supporting players.

Disappearing Act

Don’t believe me? Try this simple test: Disappear for a week with little notice and see what happens. Most likely, nothing terrible will happen. Even if something does, it’s likely easily fixed upon your return. Your time off may offer you some fresh perspectives as well.

Your staff probably will appreciate you being away because it gives them time to stretch their wings a bit and take decisive action. If you’re that much of a control freak (even if you’re a generally good boss), they’re probably chafing a bit under your command.

The point is that at some time in everyone’s life, you’re not going to be able to devote full attention to your business. Whether it the aging or death of a parent, an emergency involving your spouse or children or an unforeseen incident such as your house burning down, your attention is eventually going to be divided.

Alternatively, maybe you’re feeling stressed out and want to enjoy the fruits of your labor with an extended overseas vacation. Knowing you can trust your team will help give you peace of mind.

On My First Father’s Day Without My Father: Reflecting on What Dad Taught Me About Business


Dad’s advice was some of the best I ever received.

I lost my father a few months ago, after a long and courageous battle against colon cancer. Sunday will be my first fathers day without him, and I want to talk about things I learned from my father that can be applied by any entrepreneur.

On the surface, my father and I have little in common in terms of business. He was an ophthalmologist who ran a private practice in the San Diego area, while I’m working to scale a national brokerage and loan business. While the window dressing of the companies are different, there are values and principles that my dad taught me that I am eternally grateful for.

Treat Every Business  Interaction as If Somebody’s Eyesight Was On the Line

In the wake of my father’s death, my family heard from several of his eternally grateful former patients who described him as a lifesaver for saving their eyesight. My dad offered a consistent, reasoned approach to every patient as they explored different options together to improve the patients’ eyesight. I learned these principles from my dad.

It’s a stretch to compare business financing to saving someone’s eyesight, but we work methodically to develop the best and most rational solution to every client’s needs. We want to give them the financial tools to protect their business, and take it to the next level.

It’s vitally important that patients or clients understand their options and the choices they have to make.

My father’s patients entrusted him with their eyesight. I only hope that I can instill the same confidence in my clients as he was into his patients.

Never Never Give Up

My father fought a courageous and tenacious battle against colon cancer that lasted more than a decade. His journey included 23 surgeries and multiple rounds of chemotherapy and immunotherapy. He did not leave one stone unturned as he methodically did everything in his power to beat his disease. He displayed tenacity, courage, and bravery, unlike anything I have ever witnessed in my lifetime before.

I dedicated my book, “The Growth Dilemma,” to my dad when he was alive. The inscription said, “In Honor of my Dad, Whose Ten Year Battle Against Colon Cancer Makes Entrepreneurship Look Easy!” I meant what I said.

Building a company is a war. Unless you are exceedingly lucky, you will encounter many unexpected challenges and twists and turns along the way. It will be a rollercoaster with ups and downs.

Over the years as I have had typical scary and uncertain moments, I reflected on my dad’s struggle and put my head up high and kept plugging on. His example serves as a guide for every entrepreneur.

While I miss my dad on father’s day, I am eternally grateful for the lessons he passed on to me.

Leave Superman to the Movies and Comics, Because Despite What You Think, You Can’t Do It All

It seems that everyone likes to live vicariously through superheroes, but vanquish any thoughts you have of being Superman when it comes to your business.

I know a guy I call the Superman Entrepreneur because he literally thinks he’s invincible. On the surface, everything looks good. Not only is he building three businesses, but all of them are doing well and have real growth potential.

The fly in the ointment is that he’s overextended both financially and from a time and stress perspective. We’re about to refinance one of the businesses, which would cut his financing costs in half. Sounds good, huh?

Stretched Too Thin

Unfortunately, most of those positives are negated because he’s way behind in his sales tax payments. The reason for that is he’s stretched too thin and he refuses to relinquish any degree of control.

On more than one occasion, I’ve counseled him to consider getting rid of one of his businesses (theoretically cutting his workload by a third). Not only would his stress level diminish, but so would his astronomical workload.

Every time he’s balked, cutting short the conversation. For now, he’s mostly able to keep things under control, but what happens if things change? Think about all the possible problems that might emerge.

Perhaps a fire destroys inventory. Maybe a market collapses when a competitor comes up with a better product or service. There could be unexpected legal action that throws him into a bind, and so on.

Then there’s his personal life. What if a child, his spouse or his parents suddenly require extensive medical care? What would happen if he had to go through a divorce? What if his personal finances got clobbered by a bad investment?

Life can still be super.

There’s no shame in not being Superman. The entrepreneur I cited here may end just fine with his three companies and, if so, more power to him.

However, there’s always more to life than running yourself ragged. If the entrepreneur took a step back or maybe sold off a business (or relinquished some of the control and duties in his three enterprises), he’d probably enjoy life more.

Don’t discount the importance of a positive work-life balance. When you’re old and gray, you’ll be less likely to have regrets if you took some time to attend those elementary school plays, vacation with your spouse or spent extra hours with your parents in their declining days.

Yes, this is a column about how to succeed in business (while really trying), but you can’t succeed if you have no life outside of work or if work is tearing you apart on the inside.

Why You Shouldn’t Give Up Equity in Your Company (Despite Everything You See on ‘Shark Tank’)

Shark Tank is an unqualified success. Having aired more than 200 episodes in the past decade, the television show has success stories, but at what cost.

Aside from garnering legions of fans, ABC’s “Shark Tank”has offered entrepreneurs, and the public at large a peek into some of the financing issues hopeful young companies face. Of course, things are sanitized and compressed for television, but the show often makes for compelling viewing.

Unfortunately, it has created sometimes-damaging perspectives for many of the entrepreneurs I come across. I call it the “Shark Tank” myth.

The Shark Tank myth is that for any company to grow, it needs to take on investors, which is reinforced by the entrepreneurs who ask the show’s panel for help.

I recently met with two entrepreneurs who run a successful service-oriented business. They are thinking about adding and building a technology element to their existing enterprise.

Both think they need to spin off the new company, get investors, raise equity, and do it as a separate entity — thus falling for the “Shark Tank” myth.

In my case, the entrepreneurs in question need roughly $350,000, whether they spin off the new company or incorporate it into the existing business. That’s a lot of cash, but it’s not an unmanageable amount to pay back via a loan.

For example, a Small Business Administration-backed (SBA) 10-year loan of $350,000 with an interest rate of 8 percent would require monthly repayments of about $4,200. That’s well within the entrepreneur’s comfort level.

Many people worry needlessly about debt. Yes, you have to pay back any loans you receive, and the total loan amount can appear daunting, but remember that you’re paying it back in bite-sized pieces. Also, remember that you’re already likely doing the same thing with your home and car, so you have examples of how long-term monthly pay can and do work.

While giving up equity can be an effective strategy for some, more often than not, it’s problematic.

Most importantly, by taking on partners, you’re potentially losing some measure of control in the company. It’s all well and good if your new partners are in complete lockstep with you, but how often does that happen?

If the newcomers’ views are radically different from your own, it can produce, at worst, some level of paralysis in your decision-making.

Venture capitalists, for example, are likely going to want your company to move aggressively to justify their investment — they might wish to have returns of 10 to 20 times their contribution; if you prefer a more measured approach, there’s going to be conflict. Different positions are especially dangerous if your company isn’t a game changer likely to enjoy explosive growth.

It doesn’t always happen, but there have been cases where the equity partners were able to exert enough muscle to force out the original entrepreneur. You don’t want to be that person.

Consider equity a last-resort type of option. If your company is stable, healthy, and enjoying growth, a reasonable loan is a better bet.

The 3 Most Common Financing Questions That Entrepreneurs Ask

Maybe you have the same train of thought as your fellow business owners.null

One of my highest honors is working with business owners and entrepreneurs to help them think through their best options for financing their business growth. Today, I want to share three of the most common questions I get and how I respond:

1. Do I need a line of credit for my business?

Every business needs a safety net. Not all companies can afford to set one aside. If you have one of those companies, try obtaining a line of credit from a bank as a method of insurance for your business.

Even if you don’t have immediate plans to use the credit line, it’s helpful for rainy days or if your business deals with seasonality. Consider it peace of mind if your gets tight. You never want to be in a position where you get stuck with expensive loans because you need money in a hurry.

Ideally, lines of credit should only be tapped to cover short-term expenses that you’ll be able to repay reasonably quickly.

2. Getting a loan through a bank seems like a pain. Shouldn’t I go online and get it done quickly?

By securing an online loan, you’ll invariably have liens placed on your business. That affects your ability to refinance, and creates significant cash flow pressure because your monthly repayment will be high (thanks to exorbitant interest rates).

Many online lenders are less established than traditional banks, so there’s a higher possibility that they’ll go out of business. Dealing with a loan from a defunct entity is not something you want to do. And keep in mind that online lenders aren’t always subject to the same regulatory authorities as brick-and-mortar banks; there’s a higher possibility than usual that your financial details get hacked.

Also, the loan terms will be less favorable (you’ll probably deal with things like pre-payment penalties), you’ll get little to no counseling from the lender, and you’ll likely need both good personal and business credit–not to mention, a few years of experience in business to be approved.

To sum it up: No, I don’t think you should get an online loan.

3. Should I consider the SBA when looking for a loan?

SBA-backed lenders offer loans of up to $5.5 million at reasonable interest rates; counseling and educating, and with generous repayment terms that can be used in a variety of ways. Examples include buying a business or building; refinancing existing debt; or obtaining inventory or equipment.

The SBA doesn’t make the loans itself. Instead, it provides government backing for loans made by partner banks, credit unions, and other financial institutions. Those guarantees reduce lender risk, as smaller businesses with limited track records aren’t typically lender targets and might not otherwise qualify for a loan.

SBA loan interest rates vary, as of now, from 7.25 percent to 9.75 percent — a far cry from the 20 percent or above alternative lenders, including many so-called “internet lenders,” will charge companies that can’t secure traditional financing.

So yes, they’re worth considering.

Want to learn more?

I enjoyed being on-site at Inc.‘s Fast Growth Tour conference event in Chicago on Tuesday, and I’m looking forward to being at the tour’s next event in San Francisco on June 6. I can’t wait to meet you one-on-one, learn about your situation, and offer you customized advice.

Goals and Plans: Why You Can’t Effectively Have One Without the Other


It is important for entrepreneurs to identify their goals and plans on day one.

A question I often ask at workshops is, “What’s the goal for your business three years from now?” Follow-ups are similar, such as, “What are your goals five and ten years from now?”

The answers I get, when I get answers at all, tend to be on the vague side. Also, “making a lot of money” or “being successful” don’t count as real answers.

Blank stares and vague answers are hugely problematic because you can’t have a plan if you don’t have a real goal or goals. How can you consider your financing needs, for example, if you’re not sure what you want to accomplish? Sure, some businesses survive and even thrive making decisions by the seat of their pants, but trust me that you don’t want to go down that route, especially if you like to sleep at night.

So, I’ll ask the question again, throwing out hints about things like ideal net worth sought or a desired lifestyle. That often spurs more detailed thinking.

Go for the goal.

Once legitimate answers arrive, then we get started.

Say the answer is, “I won’t be content until I sell my business for X.” If that’s the case, it’s time to take some risks and make decisions that support the goal.

A business looking to make rapid strides needs to be aggressive. In turn, that could mean applying for loans to fund growth. That money could be used to hire additional employees, buy real estate, expand production lines or add or increase advertising/marketing/public relations, among other things.

Alternatively, let’s say the answer is, “I’m happy with the business and want to build a long-term sustainable operation that I can ultimately hand over to my children.”

That calls for a much more conservative approach. Your funding needs will be less – although they will still exist – and you’ll likely want to consider succession planning and exit strategies.

These are bare-bones examples of the planning you’ll need to do, but they do demonstrate how goals and plans are invariably tied together.

Make a list, and check it twice.

To further your planning, more detailed steps are probably in order. Creating a list of those steps can be helpful.

Those steps should include a SWOT (strengths, weaknesses, opportunities, and threats) analysis of your business. The SWOT method will help you set targets.

A market analysis will prove helpful, as will a review of past performance; you can always learn from both prior successes and failures.

Solicit input from your employees, too. Many entrepreneurs live in an insular world and suffer from tunnel vision. Employees (and even company outsiders) can provide you a perspective that might otherwise be lacking.

There are other steps to take in the planning process, but you should have the general idea by now.

Remember that planning is an ongoing process: Big picture planning doesn’t need to be a constant thing, but you’ll always be tweaking plans as conditions change.

As for your goals, they’re likely to be more concrete, but they, too, can change as things warrant.

How to Stay Focused on the Future of Your Business

Far too many entrepreneurs get caught up dwelling on past mistakes and ultimately crippling potentially promising times ahead.

It’s unlikely entrepreneurs ever asked Satchel Paige for advice, but the legendary baseball pitcher is credited with a quote that everyone involved in business should heed.

“Don’t look back. Something might be gaining on you,” he famously said.

I have seen many entrepreneurs get caught in the rear-view mirror trap.

If you get stuck in this trap, you are so emotionally consumed by prior mistakes or things that you tried that did not work, so you can’t bring yourself to learn, adapt and move forward.

There are two kinds of businesses in the world.

If your business is backed by venture capital or equity, you’re probably hell bent on growth and speed more than profitability and are likely to throw the kitchen sink at both problems and opportunities.

Then there are the other 99 percent of businesses, which don’t have that blessing (or curse depending upon your perspective). Those businesses are forced to regularly make choices about how to invest their time and money. These decisions often need to be made quickly to capitalize on opportunities, and that means you might be taking imperfect information into consideration.

Therefore, sometimes you’ll be right and sometimes you’ll be wrong. Using another baseball analogy, a .300 hitter is considered a superstar (and that’s someone who’s only successful 30 percent of the time). If you nail even two of every three business decisions, your future likely will be bright.

The key to business success is remaining flexible and fluid as information and market conditions change and revamping your course as warranted.

As I have built my company over the years, there are dozens of new ideas we have tried, and had to let go of because they were not getting traction. There are examples of partnerships, marketing ideas, new sales people and new product strategies.

Saying this is not working is really hard. Who wants to admit a mistake?  Who wants to feel like they wasted some months of time ane effort?  Isn’t it easier to hang on and just keep trying?  

You have to do an honest check in with you and your team about how things are going, and if the new idea is showing signs of life or creating more problems than it’s worth.  And if you’re getting worried, you can’t be scared to let it go, understand what you learned, and move on to the next opportunity.

The worst thing you can do is not make changes because you’re afraid you’re going to fail, at least partially because you’ve failed before.

This is starting to sound like a pep talk, but so be it.

Here’s another baseball anecdote. Years ago during spring training, then-New York Mets outfielder Lenny Dykstra was in the dugout and looked out at the other pitcher warming up. He asked a teammate, “Who’s that big doofus on the mound?” The teammate responded, “Uh, that’s Steve Carlton, who’s won four Cy Young Awards.”

“I can hit him,” the young outfielder proclaimed.

Whether Dykstra could or couldn’t hit a Hall of Fame pitcher is beside the point (and he’s had plenty of his own problems since then), but he had confidence in himself and that’s half the battle. No matter the profession, those at the top of it always have faith in themselves.

If you think you’re going to lose, you probably will. Make your decision, execute your plan and move forward. If you fail, so be it, and believe that the next choice you make will be the right one.

Why You Should Always Be Challenging Your Financial Thinking

Generally speaking, every business has its unique financial core.

Over the years, more often than not, I’ve seen entrepreneurs spend the majority of the time working on the market share of their business.

That’s understandable, given that without a market for the product or service, there’s no business. It is also the visual output of time and energy — the sizzle, so to speak, which will ultimately attract attention. So, it deserves attention. But just how much?

Admittedly, developing the product or service is the more fun part of the business equation, especially when everything comes into focus. That’s the creative part of your company’s core.

But spending all the time on the market side means the capital structure side (how you’re financing your operations, your debt, exc.) is likely going to be given short shrift.

Sometimes, it’s because there isn’t enough time to research all the possibilities or in many cases, plenty of entrepreneurs who are either intimidated by finances or simply aren’t good at dealing with money. You would think entrepreneurship and financial acumen go hand in hand, but that’s not always the case.

Clearly, that can turn into a big problem. While it might not cripple or even kill a company, at the very minimum it’s going to be a drag on both the bottom line and your growth potential.

For your business to be the best it can be, you always should be challenging your financial thinking and strategy, looking for an edge.

Looking for Other Lenders

I recently met a business owner of a waste management company. He has a fleet of 50 trucks and he’s hoping to grow his fleet. The company is profitable and stable.

The entrepreneur has been borrowing from the same bank for years. He has a good relationship with the bank and receives generally reasonable interest rates with no personal guarantees required. It’s hardly a bad financial situation therefore he has not challenged the relationship.

Out of the blue, for whatever reason, the bank has decided to slap on covenants that restrict how much the business can grow.

When I spoke to him, the owner was philosophical about the news — that’s the way things sometimes go, he said. He figured it wasn’t worth it to rock the boat, aka a conservative part of his company’s DNA.

That’s absolutely the wrong line of thinking.

You should always consider other financing scenarios. What’s the harm? In this case, since he doesn’t have a terrible situation with his existing lender, he can always maintain status quo if need be.

I suggested that he look at the possibility of a $5 million, 10-year Small Business Administration-backed (SBA) loan that wouldn’t have the covenant and would offer comparable (if not better) terms.

If you find yourself restrained and have the means to remove that restraint, by all means do so, especially when it comes to financing. Just because you’d rather be more involved in a more interesting part of your business — one that appeals to your company’s core — doesn’t mean you shouldn’t be trying to stretch your entrepreneurial “genes.”

What Every Entrepreneur Should Know About Taking on Debt

If you have a short-term financing problem, it’s best to think beyond your nose.

Too often, struggling entrepreneurs get so wrapped up in their current state of affairs that they don’t make the moves they need to reach the proverbial light at the end of the tunnel.

I just heard from a client whose situation is a perfect illustration. The client has a large order he’s trying to fill with Walmart. Orders with Walmart are a good thing. The problem is, he needs about $300,000 to be able to fulfill the order. He has three options:

  1. He could not fill the order.
  2. He could take out a short-term loan for $300,000 with an online lender that would cost about $75,000 in fees and interest.
  3. He could replace his regular line of credit with an asset-based line of credit secured by accounts receivable and inventory. The cost again would be about $75,000, but he would have a longer time to repay the loan. 

With an asset-based line of credit, a lender is generally willing to advance you 85 percent of accounts receivable and 50 percent of inventory. This option offers more flexibility than a standard line of credit which as a general rule, a lender will only extend about 10 percent of a company’s top-line sales.

Taking on Debt Isn’t a Non-starter

The third option is my choice — and it’s not even particularly close.

Not filling the order is akin to business suicide. Snubbing Walmart is going to hurt your reputation throughout the business world. Nobody will trust you. This idea is a nonstarter.

The short-term loan feels more like a last resort if, for some reason, you can’t execute the asset-based line of credit strategy.

Assuming the client has a good product and can deliver that product as described, on time and in the proper quantity, Walmart will likely place future orders.

Also, using the asset based line of credit will spread out your payments throughout the year; with the short-term loan, you’ll have to pay the whole thing back in a couple of months, which will place your financials under significant pressure. The entrepreneur might also have to repeat the short-term loan depending upon issues such as order timing. 

I realize the mindset of taking on debt is a scary proposition, but if an entrepreneur has confidence in himself/herself, a worthy product or service and a sound business plan, it’s worth taking the risk. People seem to forget the whole point of longer-term loans is to make more significant debts more manageable; they seem to understand this when it comes to car and home loans, so what’s the difference with a business loan?

Be Bold

I enjoy working with entrepreneurs because they’re interesting people. They often see the world differently than others and understand the need for new (or better) products and services.

Like in Star Trek, entrepreneurs often “boldly go where no one has gone before” — to an extent. When it comes to financing, many entrepreneurs turn into wallflowers. And that’s what often sinks their business.

Ultimately, success in business mostly comes down to believing in yourself- and sometimes taking on more debt. The old saying that you have to spend money to make money is never more true when it comes to entrepreneurship.

Emotional Versus Rational Decision Making Causes Businesses to Get Stuck–Here’s a Fresh Approach to Getting Unstuck

There are times in every entrepreneur’s journey when they feel stuck and are not sure what is necessary to push their business to the next level.

It is often difficult to move beyond feeling “stuck” in your business. This scenario was especially apparent to me recently when I heard the following entrepreneur’s predicament.

Said entrepreneur runs a web development firm that brings in about a million annually in revenue, with the owner taking home $100,000. The business is stable, and the owner is living comfortably enough, but he’s also stuck because he claims not to know how to take things to the next level.

The shop is running at just 50 percent capacity, and the owner says he needs to hire salespeople to increase the incoming business. The problem is, each salesperson hired is a $50,000 annual investment — money that, as it now stands, would come from the owner’s take-home pay.

The owner’s especially worried because hiring salespeople is risky. The attrition rate is high, and there are associated costs for both scaling up and training the new employees.

He is struggling with the decision to hire one salesperson.   And yet if he wants to double his revenues (his real goal), it’ll probably take six salespeople.

Looking at the numbers

While the entrepreneur is afraid to hire one salesperson, the reality is that if he builds a cash flow model and chooses to hire six, he would be in a hole of $80,000 to $90,000 within a couple of months

How can he afford that?

There almost always are options, particularly for entrepreneurs who aren’t in a crisis.

For example, a simple $100,000 loan from a Small Business Administration-backed (SBA) lender could solve a lot of problems — and the monthly payment would only be in the range of $1,150. That would be enough to expand the sales team.

Even if the salespeople turn out to be complete duds, never make a single sale and are quickly fired, a cost of $1,150 a month is peanuts in the grand scheme of things.

If it works, the business is well on its way to significantly increasing the bottom line and making it possible to pay off the debt. If need be, another loan might be appropriate to expand the business further.

Emotional vs. rational

Too often, entrepreneurs are fearful of debt, as they see the significant loan number and not the relatively small monthly payments involved — payments that could be eliminated when the expansion efforts bear fruit.

Aside from the fact that you nearly always have more options than you believe, a rational approach is still going to help you more than an emotional one.

If you believe your heart is interfering with your head, it’s a sound idea to obtain some outside counsel that can examine the situation from a neutral perspective and shed light on reasonable options you may be overlooking.

I’m not generally a fan of decisions made by committee, but advice from a trusted confidante or two certainly can’t hurt.