Lauren Cohen works with foreign investors to find the right business opportunities, make the right investments, and get and keep their visas. She discovered along the way that many of these people didn’t pay a lot of attention to their business structures and that the same was true of American business people.
7 Steps Scale Up Success Strategy
Lauren characterizes her role as creating a GPS for your business, but you have to have a destination. You can’t tell your GPS that you don’t know where you’re going.
These 7 areas of a business’ foundation can result in disaster if they are overlooked.
- Funding in capitalization. Without the right capital, or if you’re under-funded or under-capitalized, it doesn’t matter how great your business idea is, you’re going to fall apart.
- Business planning. If you don’t have a business plan and an exit strategy, you don’t begin with the end in mind.
- Branding and marketing. Building your brand is part of your foundation but it doesn’t exist independent of all these other elements, and marketing is part of branding.
- Legal and compliance. Without a legal structure in place, which so many business owners don’t have, you’re risking your family and everything you have.
- Financial and taxes. Everyone knows what that is all about.
- Operations and systems. Without systems, you can’t repeat your success.
- Insurance and licensing. If you don’t have insurance and someone sues you, you’ve got nothing to protect you. Without the right licenses, you can be shut down.
Know your area
You cannot be an expert in every area, so Lauren’s number one tip is to stay in your lane. You don’t know what you don’t know. Figure out where your gaps are and then allow someone who is an expert to oversee the process.
She suggests a 3-step process to assess your company.
Diagnose the issues and then fill the gaps you identified in the process.
Lauren related the story of a client who wanted to exit her business within five years so she needed an exit strategy. She needed a strategy to get from where she is to where she needs to be.
She wants to sell to one of four parties but she doesn’t want to sell at a discount on her dollar. Rather, she wants to sell at the highest possible dollar amount. In order to do that, she needs to increase the profits.
That’s where the various elements of branding, compliance, taxes, operations, and all these other components become important because they will help the business owner get more value at the time of exit.
Funding and capitalization
It sounds crazy, but if you ask someone to invest $100,000 in your business, they are going to laugh at you. If, on the other hand, you ask for $5 million, they’ll suddenly believe that you’re serious. The problem is that there’s no ROI for $100K.
The cost of obtaining the money is so high that it’s not even worth it for them to pursue it.
Financial and taxes
This one is easy. If the IRS is after you because you haven’t paid your taxes, get them filed. You may pay penalties but at least you’ll be up-to-date.
Legal and compliance
Legal and compliance include your corporate record books, which everyone should have. Some companies don’t even have the corporate entity which is a whole other story.
Make sure you have a corporate record book that’s affiliated or associated with that entity. Hold a meeting each year and record the minutes in that record book.
Reflect all the changes to shareholders and bank accounts in your records.
She estimates that 70 percent of businesses don’t keep their record books up to date. If you try to sell your business or you end up in litigation, you’ll need that book.
Building and scaling
It’s vitally important to have all of these considerations in mind as you’re building and scaling your business. If you find a potential strategic partner who wants to help you build your business but he discovers that you don’t have all your contracts in place, the deal will fall apart.
If you have the wrong documents, you’re potentially setting yourself up for liability.
Don’t try to do this alone. Consult with a professional. Everybody avoids hiring a lawyer or a professional for fear of getting the bill at the end. But it’s better to get the bill now than to get a larger bill later.
“Scale UP Success Strategies” episode resources
Grab a copy of Lauren’s book Finding Your Silver Lining In the Business Immigration.
You can take a copy of her quiz at showmethemoneyquiz.com. It’s quick, free, and fun and it will give you access to schedule a call with her. You can also find her on Facebook @scaleupcheckup or on LinkedIn @scaleupcheckup. You can also reach her directly at (866) 724-0085 or firstname.lastname@example.org.
Connect with me at email@example.com.
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