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Growing Your PEO: Financing Options and Strategies

PEO Insider

You’re an entrepreneur with amazing energy, drive, and enthusiasm focused on building your PEO. You are astonished by how right the market is for the very services you offer. Your team is dedicated to the highest levels of quality and ethical operations. You know you can beat your competitors simply by providing more personalized and intensive client service. Every article you read in the PEO Insider® says you’re in the right place t the right time. you provide the right products to a growing audience that wants your PEO services – what more could you ask for?

Many times, this very success creates the need for a reinvestment – you have realized you need to bump to the next level, either with capacity, staff, services, or resources. Here are a few examples:

  • You would really like to grow your PEO, but you don’t want to take more out of your own funds;
  • You would like to add several sales professionals to grow your company, but you simply can’t afford it with your this margins;
  • Your management team is stressed so you want to review your organization and add more resources, but you can’t afford to eat into your earnings; or
  • You and your shareholders no longer agree on the direction the company – what are your options for buying them out so so you can continue to grow your company?

Well, maybe it’s not that simple. New clients need service, which means more employees and increased payroll and benefits. Your accounting and technology system needs upgrading, which means a major cash outlay. Marketing your services is a unique challenge unto itself. Proper reserves for workers’ compensation and risk management require more than full-time attention. As a service business, your few hard assets and pledging your home yet again are simply out of the question.

However, financing your PEO’s growth is not black and white – it is about creating a funding solution that works specifically for you and your PEO. Where are you today, where do you want to go tomorrow, and how does the method of funding help you get there?

Growing your own company has its joys, but would you consider such alternatives as a strategic partner, a private placement, becoming an acquirer, selling your company, or even conduction your own public offering? What does all that mean? How do you consider these options while still successfully running your PEO? These are good questions.

In this article, I will address expansions financing for PEOs that want to grow. While this article reviews a myriad of options, one size does not fit all, no one source is better than another, and there are hybrid solutions in addition to the ones discussed here.

Download the full article that was published in PEO Insider®