Half-cocked Capital: U.s. Revolutionary War Lessons For Small Business Debt Management

What do the Brown Bess musket and small business finance have in common

? I have experience with the musket and business loans so I will draw the analogy that will improve your small business debt management.

The Brown Bess Musket was a staple for the British and Continental armies during the American Revolutionary War. The weapon is a black powder muzzle-loader that fires a single .75 caliber ball. The gun had an optional 17-inch bayonet that was used in the combat tactics of the day. The musket was horribly inaccurate even within its 100-yard effective range. Most engagements took place between ranks of soldiers in line firing volleys into the opposing line at 50 yards or less. The average soldier could fire 2-4 rounds per minute.

I have fired a few rounds from the Revolutionary War weapon of choice and I can tell you there are several things about the gun that can educate the small business owner as it relates to financial durability.

Are you financially fit?

The Brown Bess is heavy at approximately 10 pounds compared to about 7 pounds for the modern M4 carbine. The soldier had to have strength and stamina to carry and fire the musket. Likewise a small business must be in the right financial condition before signing any business agreement such as a purchase contract or loan agreement. How else will you have the financial strength and stamina to carry the financial obligation to maturity? Your company leverage ratios and operating cash flow to service debt must be strong, reliable and verifiable.

Are you trained to manage small business finances?

Many militiamen were expert outdoors men and hunters. They also drilled regularly with the musket, were familiar with how it operated and were skilled marksman through regular practice. So too, the small business executive must be knowledgeable about contract terms, lending markets, bank products, and prevailing interest rates. If you are missing some essential business finance skills, seek the help of a qualified executive coach to help develop a sound small business finance strategy. A deep bench of expert accounting and legal help is also essential to successful financial management.

Are you smarter than your small business financial agreements?

The musket is a relatively simple weapon and is disassembled into three main pieces, the lock, stock and barrel. The small business owner should avoid excessively complex business agreements and keep its debt simple. You should be able to disassemble your loan terms and contractual obligations into easily understandable components. Can you explain your small business loan to a kindergartner?

Do you have enough dry business powder?

The musket had serious limitations on the battlefield including a range of less than 100 yards and the inability to operate in the rain. The soldier had to keep his powder dry. Your small business debt should accomplish the purpose for which you borrowed. If your loan amount is too high and the loan terms too restrictive then you will have a difficult time completing the mission. Use appropriate debt for the mission at hand. Keep some cash flow dry for the unexpected small business financial event.

Are you a small business financial smart bomb?

The Brown Bess is extremely dirty with lots of smoke and black powder residue. Your business finances should be clean and not cause a smoky mess on your personal or business financial condition. For example, avoid business loan guarantees backed by your personal financial statement. Make sure your small business debt is like a precision smart bomb instead of an inaccurate musket.

Carefully select your financial weapons for the small business battlefield. When you raise the weapon of small business finance do you feel like a highly trained Minuteman or a drunken farmer? Make the right financial choices to complete the mission for business. The wrong financial decisions lead to going off half-cocked. Oh yeah, that is another phrase from the Revolutionary War and the iconic Brown Bess musket.

by: Michael Shelton

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