Get Capital Ready with Daniel Taylor

I continued our National Small Business Week event series with Bags CEO Daniel Taylor. Record numbers of new businesses have been started in the United States over the past five years. The U.S. Census Bureau reports several successive years as new records in terms of business formation.

We know small businesses generate over 50 percent of net new jobs, circulate capital within their communities, and drive economic resilience from coast to coast. Yet too often, the ceiling on a small business’s growth isn’t demand—it’s access to capital. Creating an environment where entrepreneurs can secure and deploy the financing they need is critical to unlocking their full potential and fueling long-term economic prosperity.

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Brandon Andrews Entrepreneur | Innovative Business Consultant | Business + Enter…

Meet Daniel Taylor, CEO of BAGS

Daniel Taylor is the founder and CEO of BAGS, a financial management platform built to help entrepreneurs understand bookkeeping, access financing products, and position themselves for sustainable growth. Daniel’s journey spans a decade of entrepreneurship: he played Division I soccer at Brown University, launched his first ad-tech startup at age 23, and went on to sell that business in 2019. Along the way, he bootstrapped another company to profitability, raised millions in venture funding, and helped hundreds of small businesses secure the right financing to scale .

Daniel gave a presentation about small-business financing, here are some key tips for small business owners with relevant quotes from Daniel:

• Define Success & Set Goals

“What does success mean to you in the short, medium, and long term?”Map out revenue targets and growth milestones before you seek funding. This “North Star” informs the type and amount of capital you need.

• Get Your Financial House in Order

Monthly Statements: Produce and review your Profit & Loss, Balance Sheet, and Cash Flow statements every month.

Accurate Books: Reconcile every transaction in QuickBooks (or a similar tool) to ensure lenders and investors see clean, reliable data.

Key Metrics: Track cost of goods sold, gross margin, customer acquisition cost, burn rate, and runway .

• Understand Your Cost Structure Know exactly what it costs to produce and deliver your products or services and where you can optimize.

“It’s about understanding your numbers so you can plan when external factors, like tariffs, change your expenses.”

• Choose the Right Capital Mix

Revenue: The cheapest, non-dilutive way to grow—maximize sales before seeking external funds.

Debt: Non-dilutive, often quicker than equity, and suited for shorter-term needs (e.g., equipment financing, lines of credit, term loans).

Equity: Most expensive, in perpetuity—but ideal for long-term R&D and building your competitive moat.

Grants & Crowdfunding: Non-dilutive but time-intensive; best as supplementary funding sources .

• Build Your Debt “Stack” For inventory-heavy businesses (like consumer products), layer financing tools—purchase-order financing, inventory loans, and a line of credit—to tighten your cash conversion cycle and free up working capital .

• Prepare for Underwriting

“Eighty percent of lender underwriting is spent cleaning up financial documents. If your docs aren’t in order, you’ll get denied.”

Q&A Highlights:

Q: “How do I know how much capital to ask for in an uncertain environment?”

“Start by drilling into your cost structure. If you’re generating $500K in revenue, multiply that by 1.2—that’s roughly your ceiling for debt financing. Then build scenario plans: What happens if tariffs cut your gross margin by 10 percent? Work with those numbers to decide how much runway you need.”

Q: “When should a small-business owner start paying themselves, and how is that accounted for?”

“I’m pro–paying yourself, but I’m also pro–keeping your day job until the business can afford your salary. Treat your take-home as either an owner’s equity draw or a shareholder loan—just be mindful that outside lenders will rank their claims above any personal loans you’ve made to the business.”

Tips for Small Businesses Seeking Capital

• Build Relationships Early Engage with community banks, CDFIs, and angel investors well before you need money. Momentum comes from trust, not urgency.

• Prioritize Clean Books Allocate one day each month to reconcile transactions and review your financial statements—accuracy is your gateway to every funding source.

• Match Capital to Use Case

Use debt for revenue-generating activities (marketing, inventory).

Reserve equity for long-term investments (R&D, building your moat).

Leverage revenue growth as your first and best source of capital.

• Tighten Your Cash Conversion Cycle Layer financing tools so you don’t tie up cash in inventory or receivables—keep your working capital flexible.

• Plan for Worst-Case Scenarios Model how changes in costs or demand impact your runway, then secure enough capital proactively to weather the storm.

By mastering financial management and choosing the right blend of revenue, debt, and equity, small business owners can bust through growth ceilings and transform local economies. As Daniel Taylor reminds us:

“If you harness capital thoughtfully—using it to drive more revenue or cash flow—you can not only compete but lead in your market.”

National Small Business Week is an excellent inflection point to recommit to building an environment where every entrepreneur has the tools and the capital to reach their full potential; today and tomorrow.

Watch the full session here:

Join us for our final virtual Small Business Week event on product manufacturing with Yeleen Beauty CEO Rahama Wright Thursday May 8 at 7PM ET/6PM CT/4PM PT.

More info an RSVP here - https://inexorable.co/small-business-week