In 2004, I took a camping trip with the family. We packed our supplies and headed to Lake Casitas. I had the brilliant idea of fishing with my 8-year-old son and catching a fish to cook for our dinner. I stood shoulder to shoulder with my son, casting with the standard fishing rod I had purchased for the trip from our local Target. My son, James, had a Scooby-Doo themed rod of his own, aptly sized for a child. We were both feeling very rugged and manly as we cast and recast our lines.
Earlier than we expected, James had a bite! He excitedly reeled-in his line, the flimsy rod bending dangerously. When we caught our first glimpse of the fish that he caught, we were stunned. It was like we caught the shark from Jaws! It was a massive bass the size of my arm. I took the pole from my son as he wanted absolutely nothing to do with the much-larger-than-we-expected creature. He hid behind me while I unhooked the fish. Someone insisted we take a picture of our prize, then we promptly released the thing back into the lake.
Despite our ambitious plans of catching dinner, we did not end up eating the fish. Turns out that massive fish are scary and a bit overwhelming for all parties. Instead, we cooked our back-up dinner of sausages and a can of Pringles. We were all much more comfortable with the sausage dinner than the prospect of killing, cleaning, and cooking the creature from the black lagoon.
We planned the sausage dinner as an option if we didn’t catch a fish. It turns out that even if you catch the fish, you may want the second option anyways. It’s more than a back-up plan; it’s security and peace of mind. When you’re running from the shark in Jaws, you’re going to want the security of having a bigger boat. You will want every protection you can get. The same goes for your small business. When debt, recession, or falling revenue are the sharks chasing your business, you will want every protection you can get. And most importantly, you will want the security and peace of mind that having options will provide.
How to Protect Your Small Business
A back-up plan is simply the safety net you provide yourself for when things get scary. Maybe the Paycheck Protection Program was your back-up plan. Now what? If you have been using PPP money to fund your business through this economic hardship, you will want a funding option for when that money is no longer available. Maybe you are offered the PPP loan, but you choose a different financing option instead. I understand. The sausage can be more appetizing than the bass. A flexible financing option that has the capacity to grow might be heartier for your business than a one-time funding. The beauty of a flexible funding option is that you can have factoring services and PPP money. The sharks chasing your business are scary, but with enough firepower you can get rid of them.
Why Should You Have Options for Your Small Business?
It’s a good idea to get the bigger boat when you’re facing a 25-foot shark. You will want to give your business a cushion, and a larger line of credit can do that. Invoice factoring is a financing product that acts as a revolving line of credit tied to your receivables. This means that your business continually has access to more credit as you make sales. There is no repayment necessary to unlock more access to capital. It’s a bigger boat that’s suited for the big shark or the big bass.