How did you finance your business?

[phanio]

Not sure if I can ask a question here – if I can’t please remove.

We want to hear your financing story. How were you able to finance your business when you first started up? How about your current financing strategy? And, what do you plan to do in the future.

If we like your story, we will publish it on our website with a link back to your company or website.

Requirements: Be in business at least three years and be willing to tell others how you financed your business in the past, present and future.

Please PM me for more details – would love to hear and publish your story!

[Spider]

I worked in the industry in which I eventually opened my own business. I worked hard and saved. When I was ready - that is to say, when I had learned enough, was sufficiently skilled and had enough money, I started. I tried to get a loan from a bank but was refused, and although I would have liked to have had more money than I had, I decided to start anyway.

I pulled together a skilled management team and the business prospered. Best part - I had no debt burden to hold us back. Lesson learned - whoever provides the money controls the business. I found it better that I control the business and not the bank.

That was the past. For the present and future, I retired from the business on the proceeds and now share my experiences as a business coach, with no need of additional financing.

Is that what you are looking for?

[phanio]

Frederick, Yes - great. I was wondering if you be willing to go more in depth (not specific numbers or the like). I will PM you with details. I can offer you the ability to create a profile with links back to your business or phones numbers. I am looking to profile financing stories (successful or not) on my site.

I saw you post about being an angel investor - having stories out there on why banks turn down borrowers or why investors value companies differently than entrepreneur may go a long way in helping new business owners better understand the financing process.

I will PM you with detail - would love to profile your story.

[vangogh]

When I knew what I wanted to do I had very little money and had been let go from my job after the company was acquired by another company. I had some savings, though they didn't last long. Fortunately my business doesn't require much or capital at all and the most expensive need (a computer) was already met. I mainly just had to find a way to support me and pay the bills.

Very little money came in at first so I charged everything I could on credit cards. I managed to pay the bills I could put on the card and ran up some debt. Not a ton, but enough. Somewhere in year two I stopped needing to use the card and started paying the debt down. It took a few years to pay it all down, but I did pay pay it down to $0.

I pretty much bootstrapped my business. I should also point out that I'd lived on little money previously and didn't need a lot to keep me going at the time. I also didn't have anyone to support besides myself. What I did in general can work for others, though I doubt the specific details would be of much help to most.

[greenoak]

we totally bootstrapped with about a 1000$$ investmnent...a big leap about 3 or 4 yrs in was when we bought a $$40,000k pile and had to get family help to pay..but we paid it back in a month...we had a very desirable product and waiting buyers for anything in their category......
we had huge turnover at the start....and very little overhead...just our living expenses..... and no ceredit, not even cards....now we have tons of credit, a big credit line, and cards and debt....and a big payroll and a building mortgage....but under control..
we are in year 32.... we had no employees until about yr 6 or 7.... we are a partnership...me and dh.... wilth him doing the bills payroll and mechanical and financials and working at the store too......me buying selling, desing and display and marketing..and working in the store..... we try to stay out of each others area ...but give good feedback to each other...

[Harold Mansfield]

I didn't have a dime when I started doing jobs on my own. My day job had gradually gone down so bad over the course of 2007 and early 2008 that towards the end I was using savings to supplement my earnings. Quitting early before the out of business deadline actually saved me money (Clothes, Transportation, Lunch, Happy Hours). That, along with downsizing my living expenses to what was most important , yet still comfortable, and a few months on Unemployment got me started.

For the first year I used my old existing computer and spent every extra dollar on supplies and hardware. I didn't even have cable TV. A wifi blue ray player combined with high speed internet and netflix got me through the first 6 months almost $100 cheaper. I used every free thing that I could that could still be considered professional, and only spent money where I absolutely had to.

I shopped during sales and using coupons. My happy hours went from once or twice a week to once a month. Basically I just sucked it up and spent everything I could get on stuff for business.

I already had a few websites and blogs that I messed around with as a hobby and a couple of extra bucks, so I didn't have the extra expense of a website, hosting or anything like that. Most of my clients find me online, so I didn't have the expense of marketing, advertising or anything like that. I did all of my own work, and what I didn't know how to do I learned.

Total bootstrap. I had no resources for funds so there wasn't any other way.

[phanio]

Great - I think that this is a very common way to go. But, a lot of people lose their way because they can't (or won't) cut back their living expenses. Thus, they never seem to realize the potential of their business opportunity. I tell people all the time - a little sacifice now to get your business going. Then, once you are established - you have plenty of time to spend you new found wealth.

If I could, would love to PM you with a few questions - want to keep things in a similar format. Can't offer anythign but a link or two back to your site.

[greenoak]

we definitley lived within our llmited means for a while too... but doing our own thing...which was and is major for us....we mainly put as much as we could back into the business and grew that way....
heres our banking story ....a banker made a big mistake with us... in about year 5 or 6 we needed a line of credit...about 2 or 3000$$$...to cover unknown future big buys that often came to us..like at a g reat auction....... the banker wanted to know what we were planning to buy.... we are in antiques...the buying could have been crocks or jewelry or kitchen cabinets.... in other words inventory.... he wouldnt do it... even tho we had perfect credit history and no problems.. but no big income either...
i was pretty insulted since i was pretty sure he didnt ask the shoe store what kind of shoes he was going to be buying or the grocery what kind of cereal he was going to buy , i felt like he had no confidence in us .... we were really young too...but we werent asking for that much...and he even had our house mortgage....
anyway we changed banks and probably deposited way more than 15 million$$$$ in the next 3 decades...plus a big building loan for the store and 2 big house and cottage mortgages..... and they never lost a dime on us and probably made plenty...
now we could get too much credit probably....

[Spider]

FWIW, Ann, I always suggest tempering one's conluding opinions regarding bank applications. (And similar situations, too.) You never know what is going on behind the scenes. That bank manager may have had a number of antique dealers as borrowers and had been instructed to broaden his portfolio. IOW no more antique dealers for a while. Yours may have been a perfect loan but a bank must have a good mix in their loan portfolio. Just like you may pass up buying some wonderful antique jewelry because you had plenty of jewelry and were getting low on kitchen furniture.

The refusal is likely to have had nothing to do with your business, your presentation or your standing at the bank.

[greenoak]

too late now.....i know antiques are kind of outside the box ,for him any way ......but do you really think he would have asked the shoe store what kind of shoes he was going to buy? and it was just a teeny line of credit not a serious loan....
whats fwiw?