Is Your Business Ready for Funding? How to Avoid Going Broke after Winning the Lottery.
If you're repeatedly seeking loans and grants to keep your business afloat, rather than profitable business practices... Are you a business owner, or a professional grant writer/loan applicant?
The Funding Dream
You have your eye on a $10k pitch competition… or that $100k business plan competition… or a $750k grant from the Small Business Administration (SBA). You have visions of the new equipment you’d like to purchase, the office manager you plan to hire, or the trademarks you’ll file for when you win. You’re about to sign on the dotted line to contract with a grant writer and begin investing several hours per week in developing your application materials. It feels exciting!
Receiving funding can be a real game-changer for startups and established businesses alike, providing the capital needed to fuel growth and innovation.
The Funding Nightmare
But have you ever seen a business owner who receives significant funding, and then nothing happens for their business? You may observe them:
Hemorrhaging money on marketing efforts and projects that fail to land with their ideal buyer persona
Producing haphazard sales outcomes that mirror their haphazard sales strategies and business processes
Scratching their head when the influx of cash leads them to scale inefficient operations, producing exponentially more inefficiencies, redundancies, and complexities
Where Did the Money Go?! The Funding Death Spiral
One day, a business was excited to grow by pursuing non-dilutive funding. Six months later, they’ve won the grant and spent the money, but have little to no business outcomes to show for it. The business owner again finds themselves in financial distress, causing psychological stress and leading to poor decision-making, greater inefficiencies in resource allocation, decreased morale, and the inability to demonstrate return on investment (ROI) to investors or grant awarders - pouring gasoline on the existing flames.
In desperation, entrepreneurs find themselves worse off than when they started, straining to pay loan expenses, and seeking funding to cover basic operational costs. What do they do?
They apply for another grant or loan. These individuals are not business owners. They’re professional grant writers and loan applicants who repeatedly rely on external funding - rather than profitability - to keep their business afloat. They treat grants and loans as “revenue,” when grant funding should be temporary and supplemental to regular business activities at best, and loans are a liability on the balance sheet.
What Happened? The Funding Post-Mortem
There is a simple but harsh truth that may explain why funding injections do not always produce tangible outcomes for business owners: An injection of funding enables your business to do more of what it is already doing. Consider this: “What will happen if a business that isn’t working receives funding?”
Answer: Very often the business will produce more outcomes that do not work, and produce these poor outcomes more expediently and intensely than if they had no funding at all.
How to Win at Funding? Leveraging Funding More Than It Leverages You.
You may be thinking: “Well, this sounds like a disaster. Is there any way for external funding to actually help my business?”
Answer: Yes. It’s about being prepared. It’s about having a foundation and a plan for what you’ll do when you receive the funding. This enables you to avoid acting like the lottery winner who blows through their winnings and finds themselves broke in a year, or the pro basketballer who doesn’t save money during their multi-million dollar career and is forced to take a job at their local big box store after they retire from the court.
Here’s what to get right, before pursuing external funding sources like loans or grants:
Values Alignment: Take the time to create or rekindle alignment between your values, the culture at your business, and the day-to-day tasks being carried out in your business. Why does your business exist beyond making a profit? Knowing how and who you want to impact has profound positive consequences. It allows you to determine whether a grant award’s mission aligns with your company’s, or if taking a loan is in the best interests of your business.
Identify Your Ideal Client: Getting crystal clear on who your ideal client persona or buying persona is, is mission critical. Consider for a moment, that the reason you believe that your business needs external funding could be because you are not serving your ideal client. Do you find yourself discounting your product because customers do not value it, and struggling for referrals? Is it possible that you need to find the right customers who would be willing to pay full price and talk about the value you create through a megaphone?
People & Process: Effectively scaling a business requires foolproof processes and the ability to identify reliable team members, and place them in the right roles. First, clear business processes must be identified and introduced throughout the organization to govern which tasks must be completed and the standard at which they must be performed. Then, the correct team members must be recruited, selected, engaged, and given ownership of performing these business processes within the organization. Having the right people performing the right processes is important for effectively using an injection of outside funding to grow, as you’ll need to delegate more tasks to more people as your business grows in size.
Develop Goal-Setting & Goal-Achieving Skills: Understand that goal setting and goal achieving are skilled trades. They are systematic endeavors that require the establishment of priorities, the willingness to measure and record information, the ability to anticipate challenges, and a systems-focused approach to solving problems. Do you have the goal-setting and goal-achieving skills to manage thousands of dollars of someone else’s money? What could you do to continue building these skills?
Personal Development & Readiness: Reaching new heights of business success requires you to demonstrate new levels of stewardship, leadership, discernment, and acumen. Have you developed these skills at the level required? For example: Do you have a learning regimen? Are you working to improve the physical and mental faculties that you bring to work each day? Are you identifying visionary new ideas in your personal life and in your own professional work, and carrying out these ideas with speed and passion? Remember, leadership in business is not an adjective, a title, or a noun, but rather it’s a verb and a process.
Are You Looking for Support?
Are you ready to build a solid foundation for funding? JSB Business Solutions is here to help.
Whether you're a startup looking to establish a robust sales framework or an established company aiming to enhance your current process, our team of experts is ready to guide you.
During our consultation, we will:
Analyze your current business development processes
Identify areas for improvement and growth
Develop a customized strategy tailored to your business
Provide actionable insights and best practices
Take the first step towards elevated sales performance by scheduling your consultation with JSB Business Solutions. Click this link and schedule a day and time that works best for you.
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