How Jessica Went From Rejection to Building a $20 Million BusinessMay 13, 2022
Ever wondered why some business owners can't create sustainable growth? Find out three things that separate successful entrepreneurs from everyone else.
Scaling a business will often require additional funding. But not everyone has the resources ready to grow their company. So, it's important to know your way around the business financing field.
This was the situation Jessica was in when she came to us for assistance.
Jessica has an online business that sells various products across North America. Her company was already doing well when she approached us, but she wanted to expand.
Jessica needed to build a new facility and needed funding.
Her vision of creating an employment opportunity for females was amazing. For that, Jessica needed a new physical space to make her dream come true. Unfortunately, the banks refused her, and that's when she turned to us.
We hit the ground running by creating a benchmark showing the business's possible future. And we were able to show a different path to potential lenders and cleaned up most issues with Jessica's past reporting.
Jessica got $8 million in funding for her new facility. And after two years, Jessica's business grew into a $20 million yearly revenue company. Our collaboration with her not only secured the necessary funding for the business but also helped maintain its profitability.
Now, what's important to understand from this story?
Growth takes time.
It also takes a lot of courage a clear vision, and a higher understanding of entrepreneurship.
And you can achieve similar results as Jessica’s in your entrepreneurship journey if you consider the following three principles.
Principle #1 – Embody the Four Characteristics of Entrepreneurship
Being a business owner might be everyone's dream, but it's not suitable for everybody. And there's nothing wrong with that.
But if you want to build and grow a business, you have to show four character traits and let them guide you on your journey:
- You should be growth-oriented and want to pursue greater opportunities.
- You should be willing to take risks, put it all on the line.
- You should always be future-focused. After all, the most successful entrepreneurs strive to define a new and better future for themselves.
- You should be passionate.
You will have more to gain in business if you have a vision of opportunity and impact, then passionately chase that goal. Much like Jessica did with her vision of an empowering working environment for women.
Principle #2 – Communicate Your Long-Term Vision
Understand that you won't be building your business yourself. Even if you possess the skills, you wouldn't have the time and energy to do it.
That's why businesses are dependent on teams.
Your team is crucial to your long-term vision. But not everyone has the benefit of looking at the big picture and seeing things the same as you. Hence, it's essential to learn how to communicate your long-term vision to your team.
Frequent meetings discussing the progress towards key objectives are vital for any business during its growth stage.
One of the things you should start doing is holding quarterly meetings.
You can meet with your leadership group every quarter to outline crucial objectives inside the vision. Think of those objectives as stepping stones towards the greater vision for your company.
Putting those smaller goals together will allow you to create critical drivers and a measurable scorecard for everyone to follow.
That way, your employees, advisors, team leaders, and everyone else, including yourself, will know what's expected of them. Everyone will know what to do to perform better and deliver results that work towards making your vision a reality.
Principle #3 – Have a Sound Financial Model
A financial model starts out with a profit and loss statement. From there, you get the three components that contribute to it:
- Direct (or variable) expenses
- Fixed expenses
Let's break this down.
Your revenue comes from the products or services that you sell and is responsible for your cash flow.
Direct (or variable) expenses are the costs associated with delivering your revenue and will fluctuate up or down as a direct relation to revenue increases or decreases.
Fixed expenses like rent, insurance, and other things are the ones that rarely ever change, and when they do, are adjusted by items such as inflation. Ultimately, this makes them the easiest to calculate and factor into your financial model.
But why do you need to have a transparent financial model?
Once you understand the correlation between these three metrics, you'll be able to figure out how to scale your business profitably and sustainably. And if you need funding to make that happen, then the clarity of your financial model becomes vital to your borrowing capacity.
As previously mentioned, one of the reasons Jessica was able to secure $8 million in funding was because lenders eventually understood where her business was going.
Banks saw the potential, where the money was going to be used, and the return on investment for Jessica's company.
So, having a clear financial model allows you to identify and make necessary adjustments to stay profitable and scale. You can even secure funding if your limited capital stands in the way of your vision.
The Path to Success is Often Clearer Than You Think
It's true that many business owners struggle to reach their long-term goals. But while every industry may require specific strategies, the general path to success is not that different from one niche to another.
In many cases, the company's level of success and potential will be limited by its owner's or leader's understanding of their role.
It's essential to embrace the characteristics and attributes of entrepreneurship, even when some of them might fall outside your comfort zone.
At the same time, it's crucial to get your team involved. Ensure that every member has a perfect understanding of where you're going and what they need to do to move things along.
Lastly, having a firm grasp of your finances and a clear financial model will be instrumental in your ability to make good decisions, pivot when needed, and seek funding to accelerate your growth.
Join our Vision to Results Facebook Group for Entrepreneurs. Unlock exclusive sneak peek resources to help scale your business. https://www.facebook.com/groups/gauvreaucpa
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