This episode is all about capital structure, or how you acquire capital to build your business. Mick and Andre talk about the two main sources of funding and explain how they work in the different stages of the investor ready scorecard. They bring clarity to the risk of debts you take on and how to manage your business in a way that gives you more in return.
Listen in to gain a deeper understanding of the different elements of debt, as well as how it should and should not fit into your business plan. You'll learn the important metric Mick and Andre use to understand and manage the relationship between debt and funding, the importance of understanding the level of debt and the return you’re getting from the risks you are taking, and more.
Listen to the Full Episode:
What You'll Learn In Today's Episode:
- Where funding comes from and how it affects the structure of your business.
- How Mick and Andre restructured the balance sheet into what they call ‘the wealth creation engine.’
- How to use funding to invest in your business.
- Examples of investments.
- How to create a business that will continue to grow and provide for you.
- An overview of what funding looks like in the different stages of the investor ready scorecard.
- The metric Mick and Andre use to understand and manage the relationship between debt and funding.
- How to determine good debt vs. bad debt.
- How to calculate your return on capital employed.
- How Mick and Andre help owners optimize their total investment.
Ideas Worth Sharing:
“How you structure your business between your money and other people’s money is the total value of your funding or capital structure.” – Andre Gien
“The king will operate in different compartments to ensure there’s always the right way to grow and manage the business between [funding and investments].” – Mick Holly
“The more equity we have, the less debt we require if our investment stays the same.” – Andre Gien
Resources In Today's Episode:
- Investor Ready Scorecard
- Tips For Building a Healthy Capital Structure
- Tips For Creating Healthy Cashflow
- Build Your Money Making Machine Tips
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