Make Money Matter!
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Abstract
Any person with a good idea can start a business; however, the principles of the good idea as a business need to be managed properly to minimize risks, thus making the idea profitable. Good financial management is essential and paramount to any business. No matter how large or how small the business, money matters! Each year, businesses form by the thousands, but many of them fail, become acquired by larger corporations or mergers, often times due to the way in which the finances were managed or from owners not obtaining proper funding for their business; thus forcing them into emergent situations. Business owners have to understand that the way in which a business is structured will have grave effect on how the finances will and needs to be obtained and managed. Consequently, when managing the finances of a business, owners need to always do a very thorough analysis of how to implement a good financial plan that will sustain the important decisions that will need to be made on a regular basis as the business flourishes. This type of good and successful stewardship is accomplished by conservatively diversifying funding streams for the business.

Make Money Matter
My grandmother use to always say “money is the root of all evil.” As I child I believed this saying because I really had no real reference, responsibility or personal connect to money or how to manage it. Now that I am older and understand that with money, comes great responsibility; I think about money and I often refer to the Bible- “A feast is made for laughter, and wine maketh merry: but money answereth all things.” (Ecclesiastes 10; 19) This scripture is very power and is one that I reference as I assist my friend Jacob Homemaker in his quest to begin his small business. Jacob has set his company up as an LLC with his wife, his friend Marty Chase and his wealthy cousin Hilda. Each of the owners of the LLC has very clear and specific roles in the business. As the business plan begins to be built, the question of how to use the money that Hilda has invested keeps arising because it just doesnt seem to be enough. As owners of this business, everyone agrees that additional financing needs to be investigated to help the business grow to its full potentiality. The team is left with a pretty lofty decision to make on what tactics they need to employ to secure funding for their rapidly growing business.

Jacob and his business partners need to immediately identify the most conservative way(s) to financially manage their goals and understand this principle as stated by Nora Caley, “Sometimes you dont need a lot of money to start a business. What you need instead is good financial management. If you plan carefully, control spending, and monitor the money that comes into your business and the money that goes out, you can prevent a monetary emergency later.” (Caley, Nora 2009) After understanding this principle, their next step needs to be for them to have a discussion about each owners personal relationship with their respective banks. It is likely that since Hilda is wealthy, her relationship with her bank is the strongest. Since this is the case, the owners need to pursue a conservative amount of debt financing by presenting their business plan to Hildas bank together as a group and allow Marty (the more business and finance savvy owner) to lead the discussion with the bank. This type of financing offers the company the opportunity to build a stronger, more meaningful relationship with the bank without having to lose equity in the company. The concern here is that the owners may need to put up some form of collateral and make sure that they calculate and monitor the interest on the loan and weigh them against the business financial position.

Since the expenses associated with this type of business are significant due to the need of creating and managing an aggressive marketing strategy as well as significant production costs. The owners need to further diversify their financing streams. Since they are a small startup business without major stocks to sell and/or trade, they should pursue a small business grant. These types of grants tend to work very well for many small businesses. The owners should start with the Small Business Innovation Research (SBIR) program for a grant. They tend to fund small businesses that have technological ideas. This is just a start in the realm of applying for small business grants. Although highly competitive, there are many other local grant opportunities that these owners could investigate. This type of money can been seen as “free money”; however the owners need to make sure they chose a grant that works for their business and read the fine print to ensure that they are not agreeing to obtain such funds that would restrict them or alter shares or stakes in the company in the future.

Jacob and the owners now have a good business plan in place, have identified their roles for success and now have a good with a diversified mix plan of options for financing the business. There are

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Need Of Creating And Good Idea. (June 8, 2021). Retrieved from https://www.freeessays.education/need-of-creating-and-good-idea-essay/