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Realistic Planning for Businesses
KnightNguyen
subscriber Posts: 6
Today's economic climate is tougher than ever. We find that the climate is controlled by online media, too big to fail banks, equity funding that touches everyone but the common person looking for it, and a harder than ever SBA process.
Conventional Business planning says to "develop a business plan". There was a time when planning for business simply meant organizing thoughts down on paper in an educated way. Colleges began offering business documentation courses and then groups such as the Project Management Institute (PMI), American Academy of Project Management (AAPM), and International Project Management Commission (IPMC) began standardizing project documentation. Start ups were then grouped into projects and the rest is history.
Acronyms such as PMP, CAPM, MPM, MFP, et cetera became a staple of business planning. Then valuations became more important. In the 1990's going IPO and trading on the Pink Sheets (Over the Counter market) was a big thing. There were a lot of companies that capitalized this way because the reporting requirements were not as strict. Series 7 brokers could promote these pink sheet companies and make 10 x the normal commission. This was the common "penny stock" wave that occurred.The planning involved in going to an OTC market was significantly less burdensome than it is in today's climate.
With ever increasing regulation, regulators demanding tighter compliance provisions, and an ever expanding professional liability this market slowly left the common start up business.
The world of structured financing was born in the 2000's as a result of changing legislation. FITCH chipped in and gave them a category (lenders B2) and then private consultants began selling this "new" concept. Companies such as NBCS LLC, became the largest third party consulting company in the United States.
Then the unregulated face showed its ugly head and soon these unique opportunities turned into everyone's story about an upfront fee that didn't work out. The industry helped fuel the 2008 collapse as the lending that did occur was fueled by graded paper that had little more than good credit scores to substantiate the pay back. The collapse unfolded and lenders, private equity providers, and broker dealers alike shyed away from anything that didn't have 1) Strong Cash Flow & 2) tangible assets.
So what type of planning is necessary in today's climate? A few words "Substantiated Business Presence".
Today's planning involves more than a business plan. It involves setting up a plan that translates into action items. These action items may even cost money but can be implemented on a budget with the right plan. Physical office location, website presence, valid 1800 number, working email, DUNS listing, incorporation, 2 year shelf life, tax ID, et cetera are a few of the characteristics of a "Substantiated Business Presence".
Today's planning involves setting up actionable items that translate to the appearance of a business. Planning no longer equates to simply a good business plan. In today's climate the only attraction equity shares with businesses is a business that doesn't look like it was set up yesterday.
Food for thought.
This article or post is not to be interpreted as any form of investment advice to any person. The information above is a general view point without any specific audience intended only to be used as an informational tool by those willing to independently research the topics discussed herein. Nothing will be interpreted as an application to your particular circumstance and the author makes no attempts to determine suitability for any reader within this forum thread. If you would like to discuss the contents of this article and its application to your particular situation please contact Knight Nguyen Investments, a Texas Registered Investment Advisor. Please note if you do not reside within the State of Texas you may or may not be eligible to become a client of the firm if inquiring for services. Please consult with Knight Nguyen Investments to discuss the eligibility of being accepted. The contents of this post did not create a profit or fee in any way for Knight Nguyen Investments.
Conventional Business planning says to "develop a business plan". There was a time when planning for business simply meant organizing thoughts down on paper in an educated way. Colleges began offering business documentation courses and then groups such as the Project Management Institute (PMI), American Academy of Project Management (AAPM), and International Project Management Commission (IPMC) began standardizing project documentation. Start ups were then grouped into projects and the rest is history.
Acronyms such as PMP, CAPM, MPM, MFP, et cetera became a staple of business planning. Then valuations became more important. In the 1990's going IPO and trading on the Pink Sheets (Over the Counter market) was a big thing. There were a lot of companies that capitalized this way because the reporting requirements were not as strict. Series 7 brokers could promote these pink sheet companies and make 10 x the normal commission. This was the common "penny stock" wave that occurred.The planning involved in going to an OTC market was significantly less burdensome than it is in today's climate.
With ever increasing regulation, regulators demanding tighter compliance provisions, and an ever expanding professional liability this market slowly left the common start up business.
The world of structured financing was born in the 2000's as a result of changing legislation. FITCH chipped in and gave them a category (lenders B2) and then private consultants began selling this "new" concept. Companies such as NBCS LLC, became the largest third party consulting company in the United States.
Then the unregulated face showed its ugly head and soon these unique opportunities turned into everyone's story about an upfront fee that didn't work out. The industry helped fuel the 2008 collapse as the lending that did occur was fueled by graded paper that had little more than good credit scores to substantiate the pay back. The collapse unfolded and lenders, private equity providers, and broker dealers alike shyed away from anything that didn't have 1) Strong Cash Flow & 2) tangible assets.
So what type of planning is necessary in today's climate? A few words "Substantiated Business Presence".
Today's planning involves more than a business plan. It involves setting up a plan that translates into action items. These action items may even cost money but can be implemented on a budget with the right plan. Physical office location, website presence, valid 1800 number, working email, DUNS listing, incorporation, 2 year shelf life, tax ID, et cetera are a few of the characteristics of a "Substantiated Business Presence".
Today's planning involves setting up actionable items that translate to the appearance of a business. Planning no longer equates to simply a good business plan. In today's climate the only attraction equity shares with businesses is a business that doesn't look like it was set up yesterday.
Food for thought.
This article or post is not to be interpreted as any form of investment advice to any person. The information above is a general view point without any specific audience intended only to be used as an informational tool by those willing to independently research the topics discussed herein. Nothing will be interpreted as an application to your particular circumstance and the author makes no attempts to determine suitability for any reader within this forum thread. If you would like to discuss the contents of this article and its application to your particular situation please contact Knight Nguyen Investments, a Texas Registered Investment Advisor. Please note if you do not reside within the State of Texas you may or may not be eligible to become a client of the firm if inquiring for services. Please consult with Knight Nguyen Investments to discuss the eligibility of being accepted. The contents of this post did not create a profit or fee in any way for Knight Nguyen Investments.
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