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Symposium Offers Advice for Small Business

Local business leaders discuss topics ranging from accounting and financing to law and ethics.

Posted: February 22, 2008 6:49 p.m.
Updated: April 24, 2008 5:02 a.m.
 
While a good idea can be an inspiration for a business, it is no longer enough to create the next big company or product.

With so many options for financing and methods to tap into resources, launching a company can be a difficult and confusing process.

That's why the Advanced Technology Incubator and the Small Business Development Center partnered to host the symposium, "Best Practices for Accessing Capital," on Wednesday.

The event, held on the College of the Canyons campus, featured half a dozen local business leaders who discussed topics ranging from accounting and financing to law and ethics and financing opportunities to a group of about 30 small business owners.

John Dow, owner of The Dow Group, explained the stages of growth and the financing options available at each stage, noting that the three key steps to developing a company are to "think big, start small and scale fast." He called the scaling fast stage the "secret sauce" of a successful business.

But Dow pointed out the problems of under capitalization and organizational issues as the obstacles for a growing business.

Getting past those problems involves focusing on the customer, investing in flexible processes, learning the basics, understanding financial options and seeking professional advice when needed, according to Dow.

Chris Jacobsen, attorney from Valencia-based Poole and Shaffery, LLP, applied his expertise in business law to the discussion of laws, ethics, governance and organizational structure.

He noted that as a business grows, the company leaders "cannot distribute false, misleading statements" about the business's condition.

To avoid this, Jacobsen said businesses should lay out the facts about the business to possible investors, addressing the need to project "reasonably-based estimates" about the direction of the company.

The issues surrounding financial accountability transferred into Calvin Hedman's presentation on accounting practices and maintaining personal and business finances.

Hedman, CPA and president of Hedman & Associates, explained that "cash is king" with the most important financing document being the cash flow statement, which details sources and uses of cash. Other forms that should be well-tracked and well-kept are income statements, balance sheets and any "footnotes" that offer further disclosures of finances.

The topic of equity financing was addressed throughout the symposium as Peter Cowen, a senior partner of GroundWork Equity, LLP, explained the difference between venture capital and private equity. Venture capital is more for businesses at a "high growth, high risk and usually younger state" while private equity concerns companies that are "more proven, more controlled and with less risk."

The actual process of accessing capital was made a point when Sandy Bui, vice president and relationship manager for Union Bank of California, went over the necessary documentation that established small businesses need to submit to a bank or lender.

Although many documents indicating personal and financial history are necessary, Bui said the primary sources of cash flow are one of the key forms of documentation for a small business.

But with financing a business, Bui said organizations should be taking measures to prevent internal and external fraud and embezzlement, noting business leaders should know "who you're giving authority to."

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