Alec Sohmer Expresses Need for Proper Capitalization for Small to Medium-Sized Enterprises

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Financing expert and co-founder of Plymouth Rock Capital Alec Sohmer explains why small to medium-sized enterprises have to learn to capitalize more efficiently.

Leading financing expert and co-founder of Plymouth Rock Capital, Alec Sohmer, discusses the need for small to medium-sized enterprises (SMEs) to capitalize more efficiently.

SMEs often feel the bite harder in a struggling economy, says Alec Sohmer, co-founder of Plymouth Rock Capital and leading financing specialist. With generally fewer than 50 employees and earnings under $5 million per year, SMEs don’t typically maintain the necessary capital reserves to guarantee survival. Although smaller than their mid-market rivals, SMEs actually outnumber and outperform large companies in sheer terms of job creation. The good news is that the adoption of advancing technologies and manufacturing platforms narrows their productivity gap, often at more favorable cost margins.

The present state of the economy has impacted every business, from large-caps to start-ups. “However, the volatility has also generated significant opportunities for SMEs due to their agility and responsiveness, which better enables them to react to market conditions,” he says. “Despite the overall state of the economy, SMEs have been driving innovation directly impacting economic growth.”

SMEs have the same sales and marketing issues as their larger Mid-Market rivals, he explains. Growth, training and HR issues play a major role in their day-to-day operations. As an SME, they must be every bit as efficient as the Mid-Market, but with less available access to capital to properly achieve your growth objectives. This is about to change.

Sohmer expresses the purpose of providing necessary capital to the SME market. “At Plymouth Rock Capital, we procure growth capital for small to mid-size business seeking to take their business to the next level, whether through a merger or acquisition, expansion or entering new complementing markets,” he says. “We do this by leveraging the balance sheet of the existing company and/or target acquisition. By focusing on the strength of the balance sheet we can often minimize cash collateral.”

However, Sohmer says the vast majority of SMEs are undercapitalized to some extent. “We saw the need to assist this segment of the market given the fragile nature of the economy. Operational costs almost always exceed budget; income is often less than originally projected; overspending unfortunately occurs – all of which effects bottom line profitability. Proper capitalization, however, allows a business to withstand market fluctuations and unforeseen increases to operational expenses.”

Alec Sohmer, co-founder of Plymouth Rock Capital, specializes in mergers & acquisitions, leverage buyouts, divestures and franchise acquisition & expansion. He has 20 years of Board-level experience and has served in many interim management positions for businesses requiring significant turnaround or restructuring. He is able to increase revenue streams by utilizing a variety of line management techniques. In his two decades of experience, he has dramatically increased revenues of businesses by identifying untapped markets.

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since: 08/2013
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