Business ownership: Launch with confidence
ARTICLE | February 08, 2023
Authored by RSM US LLP
Launch with confidence
You’re ready to get to market and start building customer relationships. As your business debuts, your challenges will likely include funding, talent, money management and market share growth. Your need for cash may outpace your access to it. Being undercapitalized can mean scaling back your business plans and adjusting your strategy.
Questions and answers:
Q: What are my financing options?
Based on your business model, there are several financing options and cash sources available. Do your due diligence to determine which is best: mezzanine financing, bank financing, convertible debt, straight equity. When tackling financing there are myriad issues involved: corporate finance, tax, accounting, and legal. No one has all the answers, so your team of advisors is critically important here.
Q: How is my leadership role evolving?
Remember that a founding entrepreneur can’t do it all. By understanding your blind spots and putting your ego aside, you will enable yourself to hire as needed to build a capable team.
Q: Have I revisited my tax structure?
As your strategy or ownership changes so may your tax structure. And as your company grows your regulatory footprint will change significantly. Expansion into multiple state (and even internationally) makes taxation much more complicated. Entity type has ramifications for cash flow, regulatory burden, and eventual exit from the business, so it should be revisited often as the business grows and strategies evolve.
Best practices for owners of growth stage businesses
People, process, and technology
Consider the implications of entity type
Entity selection can become an important and strategic decision throughout the life of the business. Some types of taxation may allow earlier utilization of losses while others can allow better current cash flow. Apply your company’s strategic plan so you don’t make this decision in a vacuum.
How do entrepreneurs address the various lifecycle stages of business ownership?
Owning a business takes a certain confidence and grit. All owners are different, but all face similar challenges. Our business ownership lifecycle ebook shares insights gleaned from helping business owners face these challenges head on.
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This article was written by RSM US LLP and originally appeared on 2023-02-08.
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