Do you remember "The Tortoise and the Hare," one of Aesop's Fables, written by the ancient Greek storyteller and slave? In this seminal tale, an arrogant hare ridicules a slow-moving tortoise. The tortoise challenges the hare to a race, which is readily accepted. When the race begins, the hare jumps out to a huge lead, but over confidently decides to stop to rest and inadvertently falls asleep. He awakens to find the steadily moving tortoise has won the race.
What does this have to do with business? Plenty, it turns out.
It seems when it comes to entrepreneurs, there are two kinds - hares and tortoises.
Which kind are you? Read on to learn more.
As you might guess, tortoise entrepreneurs are more likely to be cautious and less likely to take risks. Their goal is to pursue gradual growth over a spread-out time span.
Debt financing tends to be the preferred form of financing for this kind of entrepreneur. That's not necessarily a bad thing - debt financing is less risky than granting equity positions to investors and allows the entrepreneur to retain a greater degree of control over the business.
Entrepreneurs who want to go this route need to keep a few things in mind.
First off, keep your business books in pristine order. No lender wants to work with any business owners with suspect bookkeeping.
That also means paying attention to your personal credit, especially in the start-up phase. Your personal history will carry more weight with lenders because your personal finances will be viewed as a longer-term snapshot of your ability to keep money in check.
Meantime, create a path to bankability - the things a lender is most likely to peruse. That includes business profitability, credit history, collateral and cash flow. The more details you can provide, the better.
A couple other points: