Small business is critical to our economy.
As a small business owner, I get excited when I can talk shop with my fellow human warriors who “do the daily.” We survive but the goal is to THRIVE!
I’d like to share five lessons that I’ve learned over the years that can help your small business succeed.
Grants, loans, and cash
Know the difference and be careful.
People underestimate the power and ability they have to access grants. During the pandemic, it surprised me that a lot of small business owners weren’t sure if they qualified for grants.
It’s important to know the difference between grants, loans, and cash.
It’s also important to understand the legal consequences of not following the guidelines, rules, and laws associated with obtaining grants and loans.
- Grants are not loans and don’t have to be repaid unless you fail to meet conditions, terms, and/or there were misrepresentations and/or breach of terms/guidelines.
- Civil and criminal penalties may apply in the event guidelines and laws aren’t followed.
- Loans must be repaid and are subject to terms. You must review the loan applications carefully. Be mindful of interest rates and repayment terms. Shop around to be sure you’re getting a fair rate. You also must make no misrepresentations. Follow the guidelines and terms each investor requires.
- The investor owns the note. The servicer is the company that sends the bill monthly. It’s possible the investor and servicer are the same.
- It’s important to know if you have a government investor like the SBA or a private one because different rules apply.
- Cash should be reserved for emergencies.
Have a certified public accountant
To qualify for most grants and loans, you will need to be organized.
In most cases, if you’re a small business, you will need an EIN number. Lenders require borrowers to provide a tax return, Form 4506, and the IRS will require you to be in compliance.
A CPA can help you understand what you need to organize your personal and professional tax lives to keep them SEPARATE. More information is available at IRS.gov
Know what’s FREE
There are FREE resources EVERYWHERE for small businesses.
There are non-profits that will help with tax preparation, free legal help, and programs for small business owners in almost every city and town. You can also look for national non-profits to assist you.
Don’t give up equity unless you must
I’ve always preferred debt to equity.
When you’re a small business owner and you can’t pay bills, people may approach you for an equity (ownership) opportunity in lieu of payment.
Be very careful before you give ANYONE an ownership interest in your business.
I prefer a loan because before I ‘put the ring on’ a co-owner of any size in business, I’ve learned I want a long courtship.
Definitely seek the advice of a qualified business attorney in your State who represents your interests.
Assemble your dream team
Write down on a sheet of paper every single quality that separates you from your competition. Those are your strengths!
Take your strengths and tell your story. I love reading someone’s story. I want to know who I’m shopping with.
Who is providing my goods and services? I love business websites and social media with a featured story. I want to know whose family I’m feeding.
In any area where you feel weak, it’s perfectly okay! We can’t know everything. It’s okay to admit you don’t know the answers and reach out for help. There are a ton of small business owners who want to help you grow.
Other small business owners actually do care.
Most towns have a chamber of commerce and county and city government that can help too.
*Readers should seek the advice of an attorney and certified public accountant licensed to practice in their State for further guidance.