Mark Koscinski–Conference Questions
- How can a small business fund itself?
A: There are four basic ways: debt, equity, reinvesting earnings and government grants. The easiest to obtain is of course reinvesting earnings. This takes financial discipline and is an important part of the cash and liquidity management I discussed in my remarks. There are many government grants targeted to minority and women owned small businesses. Both the federal and state government are active in helping small businesses. Many not for profit and private companies also make loans and grants to small businesses. It is definitely worth the time and effort to research some of these grants.
- What are some of the software systems you recommend for business?
A: That depends on your business. SAP Business One, Quickbooks, Microsoft Dynamics, Salesforce and Slack are systems I commonly see today. Of course, marketing through social media is also prevalent and should be part of any business plan. Having adequate financial systems is a critical part of business management and making your business attractive to investors and lenders.
- Who invests in small businesses?
A: Friends, family, angel investors and venture capitalists just to name a few. Crowdfunding is also an interesting source of capital for small businesses. Partner financing is also a possibility as well.
- What websites do you recommend for crowdfunding?
A: There are many that are out there. Kabbage, LendingClub, Patreon and Kickstarter just to name a few.
- What rate of return will a venture capitalist seek?
A: Above 25% per year. Many of their investments will fail so the winners have to make up tor the losers.
- What is the difference between an angel investor and a venture capitalist?
A: Angel investors are generally individual investors that fill the gap between family financing and venture capitalists. VCs generally like to see more operating history before they will make an investment in a company. They also require a high rate of return on their investment.