Small business financing is an opportunity that many small businesses are missing
Wealth creation is a funny thing. It is a slow steady process that requires having the right mind set. And for many small businesses who are set on doing things themselves without accountability and transparency, banker Jason Morris says they are leaving millions on the table. And this applies to individuals and businesses alike. And so we sat with Jason Morris of Sygnus Group. This company has a Caribbean wide focus on “out of the box” ideas to create movement in the private equity and lending space.
It is on this basis we asked Jason to guide us on the Sygnus way of building wealth.
Where do you fall on the wealth spectrum?
Take this test from Roger Hamilont’s wealth dynamics to find out!
DW: Sygnus focuses on medium to large enterprises underserved by banks. However, there is the small business sector also underserved by banks. What are some of the tactics and strategies you would share to business owners who want to do more than just survive day to day. What are the wealth creation ideas that the small business sector is missing?
JM: If you are a small business owner, you are already in the wealth creation business. The challenges many small medium enterprises (SME) have is the governance structure is the missing link to level up the wealth creation. Governance is having a structured way in which you operate the business. For our clients who are medium and large businesses, they have a board of directors who bring structure and insights on how you manage and operate. You need to keep good records and document meetings for transparency.
Finance management: It costs to pay an accountant and it costs to not pay an accountant
JM: A very small business says that they don’t do this because it costs to pay an accountant. However, if you don’t have records then you cannot go to the bank for credit because they don’t know if they are throwing good money after bad. So it costs you more because you cannot get access to credit from anywhere.
Also if it is a family business, that is a challenge. It is hard to make tough decisions because family and business are not a good mix, usually. When family business works sometimes, it is only when there is structure around the business and this is usually with an accountant.
For small businesses, if they put in proper structure – financial reporting, having discussions of strategy with a board and other actions that foster accountability is how you scale up. It is not just about marketing and selling all the time. Some times you need to step back and look at big picture. When you have a board, you are able to see what are the competitors doing and where you will be in 3 to 5 years.
Many people think that big companies are staffed with smart people. And I would say it is not necessarily smarter people. It is governance. For me, it is the number one thing. And that is what holds back the SME sector in my experience.
If you have one person who has all the power, then if that person makes a bad decision, the company cannot grow. Governance helps to reduce risk because of the different perspectives and good record keeping. All the work that you have to do to prepare the report, makes you see things about the business that you wouldn’t normally see because you are in the trenches to make money.
Do you want more information about the type of entrepreneur that you are? Check out this test!
