Funding Your Business Dream
Successful business people have a wealth of insider tips and insights that Hillsborough County can help you tap. Each month we ask local business experts to share their experiences and expertise on the entrepreneurship journey. This month we discuss financing to help start and grow your business.
Co-founder and managing partner of Black and Denim Apparel Company and The Blind Tiger Cafe
What are the essential steps in convincing an individual or company to invest in your business?
You have to develop a relationship over time. Time is relative. For you as an individual, is really about how much they trust you, what have you done lately, and how can you flex that "hustle muscle." For your business, it is really more about if it makes sense for them to invest and get the right return, and you get the right amount of financing. Investing is really about win-win situations. I always say that you need to ask what the investors' goals and strategy are so that you can either align yourself (if you are flexible) or move on if there is no value.
How can the type of financing you accept impact your business' future?
It really depends on how early, on time, or late you are. Most people tend to be really early, not having formulated a well-developed concept, idea, business, or product before looking for funding. It is very rare to find somebody that secures a line of financing when it is the right time. When it is too late, people are knocking at your door and now you need to figure out what else (other than financing) can they bring to the table. If you take on too much debt, then you run the risk of choking your cash flow and not allowing the business to grow. If you take an equity deal, then you give up rights and control on decision making.
Why should (or shouldn't) entrepreneurs tap into non-traditional funding opportunities?
This type of funding is really last resort. They tend to be unrealistic with forecasting and they are not protected in the event of an economic downturn or a specific industry slump. Sometimes they are the only resort a startup has to either start or grow. You have to be really careful and do your homework. Sometimes you are getting people to give you their life savings, or perhaps a crowdfunding project that might not come to fruition. You have to be able to flex that "hustle muscle" in order to deliver.
What advice would you give someone looking to finance their start-up or business expansion?
Develop a relationship with financial institutions FIRST. Do not try to develop a relationship two days before you need to walk into a bank to ask for a loan. Banks are creatures of habit. If you have a checking account with them, they start to collect data and monitor trends to get an idea of how your business works. You have to also understand that they are in business as well. So they need to protect their assets in order to make money. They are looking for almost safe bets when it comes to financing. If you are one, you do not need to worry. If you are not a sure bet (by the way, no business is) then you just need to spend a little bit of time finding the right bank that is going to understand your business.
Continue Your Journey with these No-cost Resources:
- Entrepreneur Collaborative Center
- Florida SBDC at Hillsborough County
- 1 Million Cups Tampa
- Tampa Bay WaVE
Our Expert Contributor
Roberto Torres is the co-Founder and Managing Partner of Black & Denim Apparel Company and The Blind Tiger Cafe. As an entrepreneur specializing in the areas of accounting, audit, operations, logistics, and financial services segments, he brings his expertise in retail and operations, both as a consultant and an executive, to assist start-ups and early companies with strategic, operational, and expansion plans. Roberto volunteers his time to help the local business community as the marketing committee chair for the Ybor City Development Corporation, member of the Board of Advisors to the John P. Lowth Entrepreneurship Center, and the president of StandUp Tampa.