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Hello Alaska,
A common topic of conversation with any banker is the difficulty in financing upstart companies and/or providing 100% capital support. Invariable, the primary need for entrepreneurs to have "skin" in the game, or a financial interest in their endeavor is said to be a primary factor in a bank's decision on a loan request. In my younger years I never understood this need and many of the pre start-up ventures that I came in contact with during my time as a business counselor with the SBDC felt the same way. After all, our business plan was brilliant and where the money comes from should be secondary to having the business properly financed. After all, if I had the money myself, I wouldn't have had to go to the bank.
Now that I am a little older, life has smacked around a little bit and my viewpoint is different. It was never more clearly illustrated than on my recent Caribbean cruise. My daughter, who we will call Jane for now, celebrated her 18th birthday on the trip and was legal to gamble in the on-board casino. As a responsible parent I felt that it was imperative that I show guide her on her first evening of blackjack and so I sat with her and pointed out some of the nuances of the game. I bought $100 worth of $5 chips and gave Jane half my stack to try her skill. She bet $5 per hand and quickly had a nice grasp of the game and began to win. She was playing her cards well, recognizing when to hit, when to stand and maximized her opportunities to make money by increasing her bets when the odds were in her favor. She quickly won $50, returned my investment to me and then doubled her money one more time to walk away from the table with a $100. I couldn't have been prouder especially since she decided to call it a night and left the casino a winner.
Jane couldn't wait to get in the casino the next evening and the same exact routine took place, with the variation that she slowly lost the $50 I had spotted her. When she looked at me after loosing her last chip, I suggested that she should plunk down her own money for the next buy-in. After much hemming and hahing, she put out $50 and began to play. Oddly enough, her style was now completely different. She was very careful with every move, considered every hit for a long time and rarely felt that increasing her bet, regardless of the odds, was a positive step. I won't tell you the outcome of the evening, or whether Janey made a couple of bucks, but I directly attribute her change approach to the game to how vested she was in the money she was spending.
Banks would like for you to treat their money, as you would your own and most of us just don't do that regardless of our good intentions. There are a lot of ways to finance a brand new business that include loans and/or gifts from family members, credit cards and secured loans. Many times unfortunately those options don't include banks, simply because your ante into the game isn't high enough.
Understanding what your obstacles may be and developing a plan to overcome them is often times the first step to a successful business start-up. Visit www.aksbdc.org to make a one-on-one confidential appointment with a counselor to review your plan and when you are ready to visit a bank loan officer, our own FNBA www.fnbaalaska.com is a great place to start.
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2nd Annual Interior Regions Procurement Fair
Date: February 15 and 16, 2011
Time: 8:00 AM to 5:00 PM
Location: Fairbanks Princess Riverside Lodge
Cost: $50 attendee, $150 vendors
The 2nd Annual Interior Regions Procurement Fair will take place in Fairbanks on February 15 & 16 at the Princess Riverside Lodge. On Day 1 Representatives from federal, state, and local government agencies will present information on procurement forecasts. Matchmaking and networking event, lunch, and informational presentations are planned. On Day 2, panel discussions, specialized training, and informational workshops will follow. The focus of this event is to:
- Develop broader base of procurement knowledge to qualified contractors in the region;
- Learn about local, state and federal government agency procurement needs;
- Attend workshops on contracting topics such as socioeconomic programs teaming and partnering, insurance and bonding, proposal writing, GSA, Wide Area Work Flow (WAWF);
- Meet vendors, talk with government procurement specialists, prime contractors, contracting officers, and purchasing agents, and discover other supporting resources.
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