Thursday, April 16, 2009

Making Something from Nothing

Immersing myself into my business so completely has been interesting. Not only am I attempting to run something that would be better served with four hands on the tiller instead of two, I am also attempting to find some money to re-finance my business with. That means writing a new business plan. I remember now how much agony it was to write my first one 12 years ago. I am also working with the Small Business Administration (SBA) rep in my area and attending seminars on helping dumass small business owners navigate the labyrinth and mazes of the world of big finance.

My SBA rep did tell me I was managing the money I did bring in about as well as it could be managed. What I need is more sales. I have learned to make do with less sales. Both of us realize that in order to make more money, I have to spend more money. And not having more money is the problem. So my only alternative is to borrow it. To find money, I need to appear to have a better grasp of the future than I do. It's always about the future ain't it?

He has given me some serious homework to complete. First I have to study all those important accounting entries my shop has generated over the last 4 years. Then using the percentages of costs as part of the Gross Profit, inject them into a worksheet to predict my future based on projected future gross sales. While I would be happy with any positive growth instead of the slow downward trend I have been experiencing for the last few years, the SBA guy insists that I need numbers to woo and impress the Bankers with. And they need to be realistic numbers. I would prefer to pull them out of my ass, but he will not let me do that.

Mind numbing stuff for sure. Accounting, spreadsheets, cash flows and overhead are not terms I enjoy watching bump around the ole cranial void. They upset all the free spirits up there and before I know it, everyone is unhappy. Like someone turned on a spigot full bore and let it run, my mind is being poured into things and duties outside my comfort zone. It is interesting, but my unfamiliarity with this "next" level of business stuff leaves me feeling overwhelmed and exhausted. And I still have to find the energy to be pleasant to customers, vendors, and keep the wrench turning turning. I will say this. The bike shop is anything but the same ole, same ole this year. If I survive this summer, I will indeed be patting myself on the back come September.

Keep it 'Tween the Ditches................

(452 / 7473)


Kulkuri said...

What you have to do is make them believe you don't need money and you'll be loaned as much as you want. It's a 'Catch 22', if you need the money, they won't lend it to you because they think you can't pay it back. Or something like that.

Demeur said...

Kulkuri is right. When you don't need money is when they'll give you boatloads. As for the tedious bookwork I thought that's why they came up with Quickbooks. You plug in the numbers and it shows you where you stand. To survive you may need to reinvent yourself. An advantage now is that there is the internet so advertising is real cheap. I've already put a link to your site in a post for any prospective customers. And wouldn't you say it's about time to update that web page? It's looking a little dusty.

Utah Savage said...

Good advise from the guys, but I want to know who did that great graphic?

Randal Graves said...

So the plan remains getting your money for nothing and your chicks for free?

Hey, everyone, stop dropping pins.

I hope your business blows up into bike-o-rama, but I don't envy you, having crunchy numbers while being a smiling fool for the unwashed masses.

Since Kulkuri just about covered it, any shady CPAs up that way that can pull numbers out of sphincters?

BBC said...

That means writing a new business plan.When I had my parts house, that I didn't start on borrowed money, but wanted some about a year later for a brake drum and rotor turning lathe I went to the bank to ask for a loan for it.

By then I had been doing business with them for a year so they knew me (I make sure I go into my bank at least once a week so they get to know me) and my track record.

In the Dilbert Zone they always ask you for a business plan, it's just their stupid way of doing things, so I wrote one for them.


I've never wasted a lot of time writing business plans for the Dilbert zone.

And Kulkuri is right, make them believe you don't need the money. I flat out told them that I had the money (I didn't) for the machine but that I didn't want to tie my money up that way right now.

They had my checking account history and access to how I paid my bills to my suppliers and what my credit was with them so the whole loan process only took about two hours before they gave me the money.

Of course it may have helped that the loan officer at the bank thought I was hot because I was always flirting with her, ha ha ha.

BBC said...

Now I can whip out a credit card and get very low interest money without all the loan process crap. But I don't have a mate dragging my ass down because she has got me deep in debt with all her wants and needs.

MRMacrum said...

Kulkiri - Actually, I don't need the money. I need sanity. I am giving this bikeshop gig one more final good shot. If I can't come out of this season on an upnote, I am all done with this retailing madness in a small town out of a small store. I already don't care really. I will settle for some closure with as little damage as possible. One way or the other, my bike shop experience will take a new course.

Demeur - I have Quickbooks. My wife is a schooled and registered expert in Quickbooks. The SBA guy has his own accounting worksheets that approach the whole idea of future sales in a different way than what most number crunchers think. And yeah, my website could use more than a update. A makeover or re-invention would be more in line with what is needed. To that end I am taking some courses in Internet marketing through the local educational channels available. I know I have to do more than have a greeting card out on the web.

Utah - graphic? Well, I guess I don't know. Something I thought fit how I felt when I stumbled on it in google images.

Randal - I don't have a clue why I ever believed money came from nothing and chicks were anything even close to free. Wishful thinking or delusional brain farts? Prices are always extracted. Costs unforseen settle in like a wet blanket days later and we wake up and realize there is no such thing as being free.

BBC - Well - this time I am contemplating something different than the usual bail me out money. This time, I thought "what the Hell, go large or go home." I am looking at buying a building and moving my shop into it. It almost seems it will be easier to do this than ask for chump change. The bigger the loan, the more serious they take you I guess.

El Cerdo Ignatius said...

From what you've described, Crum, it sounds like you're on the right track in your dealings with the evil bankers. Back in the day, when I was taking small business loan applications, the Bank much preferred financing real assets (like a new building) vs. chattel assets (like inventory, bicycles, parts, etc.).

Your SBA rep is giving you good advice. The best-run and most successful businesses I dealt with were the ones who used their accountants to discover important things like cash flow, costs, and margins, instead of the usual purpose of going to an accountant, which around here can be summed up as "to hide as much money as possible to make oneself look as poor as possible, with the overall goal of cheating on one's taxes." You wouldn't believe the number of general contractors around here who report income of $6,000 or less, year-in and year-out. Then they'd get pissed when I'd tell them that their loan request was declined, on the basis that they can't tell the Bank they make 60 grand a year when they're telling the government they're making 6 grand a year. But I'm getting off track.

Anyway, Crum, I wish you the very best. Stay the course and I believe it will come together.

1138 said...

"I'd tell them that their loan request was declined, on the basis that they can't tell the Bank they make 60 grand a year when they're telling the government they're making 6 grand a year."

At that point aren't you REQUIRED to report them?

Crum you willing to entertain some ideas?
Let me know.

Gary ("Old Dude") said...

Reading your latest posts, taking in consideration of the economy today, ----well tells me the Country outside the beltway is doing okay------"go green, ride a bike"

Demeur said...

Could be a good idea. Take it world wide. Crums International House of Bikes. Become too big to fail.
There should be a lot of cheap real estate to pick from right now.

Carlita said...

As you know, with the exception of my own consulting practice all my experience is in the nonprofit sector. But it seems you may need less of a business plan and more of a marketing plan. Check out Seth Godin's blog if you haven't already. Every week he says at least one brilliant thing about marketing. And good luck!

1138 said...

Carlita went where I wanted to go.
I don't know Seth - but I do know me some marketing and consumers aka your best sales agents.