For the small business owner, whether he calls himself a CEO or an entrepreneur, whether his ambitions are regional, national or international, one thing is common to this particular individual: There will come a time when he will need – and when he will seek ways to acquire or apply for – additional working capital. Knowing when to make that decision requires a plan, which will enable a small business owner to judge his eligibility for more funding versus the right moment to seize an available loan. That decision speaks to the broader issue of leadership, of having a plan for the use of more money and ways to expand an already successful business.

This subject is, as this interview makes clear, something I care about deeply; because, in my role as Managing Partner at Excel Capital Management and with a focus on specific solutions, I believe capital is the lifeblood of every business – it is the means to maintaining operations, entering new markets, strengthening sales, increasing name recognition with consumers, and highlighting the debut of sundry products and services. But, and here I return to the importance of sound leadership, a small business owner must know when, after his accounts are in good standing, he should take advantage of additional funding.

When used properly, and provided the timing is right, working capital should offer a quick turnaround in results. The funds can go to, besides the categories listed in the previous paragraph, purchasing inventory, hiring employees, training current staff and opening a new location, among many other things. These investments should bolster revenue, improve cash flow and give a small business owner greater flexibility to run his company.

It is the very availability of this capital that can sustain a booming business, so there is enough money to enhance a workforce or increase its fluency concerning the use of this or that piece of equipment.

Remember, too, that every small business owner has options; which is to say, even if a company is unable to get approval for additional funds – even if the timing is not right – I make it a priority, as do my colleagues, to stay in touch with every prospective client; because every small business owner should know what he needs to do make himself eligible for a loan, and every lender should know when (and why) to contact that business owner when circumstances change.

All of which brings us back to the necessity of leadership – that a small business owner must have a plan, written with clarity and executed with the clarity of his convictions, to secure additional funding. This scenario leaves no room for ad hoc decision-making, as if any executive or entrepreneur should pursue capital without information about his company’s balance sheet and without knowledge of his organization’s objectives.

The stakes are too high, and the consequences are too great, for a small business owner not to approach this matter with the utmost care and preparation.

For that individual deserves the chance to succeed, period.

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This guest post is courtesy of Chad Otar, Managing Partner at Excel Capital Management.