The Golf Swing and Your Business
As your business expands, it becomes necessary to acquire capital. If you do not raise funds, your business may stagnate. However, obtaining money too quickly can be just as hazardous. Whether you are starting, growing, or scaling your business, there are types of funding most beneficial to each of these phases.
To illustrate this concept, consider the golf swing. If you have played the game, you know that it is hard to not swing the club with the full force of a baseball bat. This is a difficult flaw to overcome, and golf coaches teach you to follow a particular system until it becomes second nature. It is in this structure where you can learn which types of capital to utilize.
Phase 1: Developing Your Core Business
A successful golf swing begins as you address the ball. Regardless of the quality of your clubs, if you do not position yourself correctly, you will not be successful.
In this first stage of business, you should minimize your risks, and it is here when sweat equity pays the highest returns. Establish a proper foundation and visualize your desired outcomes. Be confident but also realistic. Have a plan for paying the bills even if you do not break even during this phase.
If you are not manufacturing a product or do not yet need employees, use this to your advantage. If you do need extra income, a home equity loan might be a smart solution. It is low risk for the bank, and easy to procure.
Phase 2: Growing and Experimenting with Your Business
This stage of business is equivalent to the back and downswing of the golf club. It is here where you will be tempted to swing for the fences. Learn that advantageous strength lies in the foundation of your hips. Likewise, if you grip the club too tightly here, it will destroy your speed. Keep your head down and avoid distraction.
During this phase, start seeking outside funding. Whether it is from strategic business partners or experienced venture capitalists, you will be equipped to experiment with your business and its core functions. Investors will want to see you have laid the proper foundation and have not extended yourself beyond your ability to grow.
Phase 3: Scaling Your Business
To complete the golf analogy, this is the follow-through stage of the golf swing. The number one goal is to make sure the club goes toward your target when you hit the ball. You have a trusted and proven system, and this is when power becomes your ally.
During this phase, acquiring traditional funding becomes much easier. By intelligently financing each step of your business, you now have the tools necessary to create financial projections. You have a proven track record of addressing your goals. You have reliable systems and follow through with your swing. Financiers will have the evidence needed to demonstrate that you are an entrepreneur who can get the ball in the hole.