Business owners should plan ahead and dream bigDate posted: 8/12/14 08:30:00 AM
It's always important to plan ahead, and that is especially true for small business owners and entrepreneurs.
Monica Guevara, manager of lending services at Business Outreach Center Network, told Fox News she typically recommends borrowers to build a strong business plan before entering talks with a lender.
"Make sure you're paying your bills on time, reporting all your income, and able to explain how you will use the loan," Guevara said.
She said lenders must verify all the information presented via documentation, so prospective borrowers should make sure all of the necessary paperwork is organized in a fashion conducive to a business pitch.
"The business owner should understand not only how much funds are needed, and for what, but that the funds are very likely to produce results based on their knowledge and experience," Guevara said.
It's a tough market for women
Anne Hopkinson, owner of Haydenville Broomworks, told Fox News that acquiring a business loan can be especially difficult for women.
"It is essential for female business owners to build relationships in their business communities," Hopkinson said. "Part of being a trusted small business is building these relationships, and this can take time."
She said this is crucial because small business lenders want to ensure the company they give money to is a viable option. Hopkinson urges business owners to check out business support groups in their surrounding areas. Often times, advisers at these types of organizations collaborate with lenders. That can help build professional relationships, which can catalyze a loan process.
Small businesses shouldn't be afraid to dream big
Startups that are struggling to find their footing should stay persistent. Even the savviest business owners never know when a potential life-changing offer may come their way.
Warren Buffett, one of the richest men on the planet, recently spoke at Wayne State University in Detroit to honor 64 graduates of the Goldman Sachs 10,000 Small Businesses initiative, according to USA Today.
Buffett mentioned a few business owners who started small and stuck with it, eventually landing massive paydays from Buffett's Berkshire Hathaway. The multi-billionaire mentioned Doris Christian, Rose Blumkin and Al Ueltschi as great role models to all small business owners.
"Those were all small business people," Buffet said. "None of them went to college, but they had a passion for their businesses and stuck to it. And I will tell you, I've met 64 people in the last day that have every bit of the passion for their businesses, the gumption, the stick-to-it-iveness and the guts to do the same thing those three did."
Blumkin, a Russian immigrant, sold used clothes in order to help bring her siblings from Russia to the U.S. After years of work, Blumkin saved enough to open her own furniture store.
Christian, like many young mothers, hoped to send her children to college, but the finances looked like a major obstacle because she didn't have the money to pay for all the necessary higher education bills. Thus, she borrowed $3,000 against a life insurance policy and used that money to launch a company that sells kitchen utensils at house parties.
Meanwhile, Ueltschi, a pilot, launched a hamburger restaurant. He later borrowed $10,000 against his home to start a flight training company at LaGuardia Airport.
All three of those small business owners went on to sell their company to Buffett's Berkshire Hathaway. Ueltschi's company sold for $1.5 billion, Blumkin's for $60 million and Christian's for $1 billion.
They all started small but stuck with it, a great reminder for all business owners.
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