The other day, a client who was in search of additional business financing called me to talk about his prospects.
His personal situation had not always been the greatest, but his credit scores were now where one would expect to have lenders fighting to give them money. And since all small business credit is guaranteed personally by the entrepreneur that sounded pretty logical.
The banks that he had been to were all turning him down, and he was searching for answers. After a few minutes of complaining about how he was being scrutinized for past indiscretions regarding his personal credit, and his lack of “juice” with the institutions he had been dealing with, one comment came out that I could not ignore.
He stated that even with the seasonality of his business (he’s in the event planning industry), and the dry period about to end, his sales were already approaching last year’s totals.
That is where his biggest mistake was, and the most likely reasoning behind all of the rejection he received.
Most often, people tend to think of sales as the most significant measure of success for a business.
Of course, this theory isn’t without merit, as the sales figure often represents the total amount of revenue flowing into a company, at least from the standpoint of the normal day-to-day operations.