Employers have spent months preparing for the unprecedented changes to the minimum salary level required to exempt an employee from the new Federal overtime law, the Fair Labor Standards Act (“FLSA”) . Memos were prepared, handbooks were rewritten, and employees notified of their change in status. But hold on a second. It looks like the change is unlawful. Here’s some LegalEASE to help you understand why the new overtime rules a ....Read More
Almost 2 decades ago, Sandra Yancey bootstrapped her way from a room above her garage to create her dream. She succeeded, and continues to scale and re-imagine her business. Her company is now one of the largest women’s business networks in North America.
Her journey from bootstrap to borrow for her business wasn’t easy, but it was necessary to grow. eWomenNetwork is now a global enterprise with 118 chapters in North America and members in 7 countries.
When you’re starting out, sacrifice is a key ingredient to getting the lift you need to fly. Sandra knows all too well what it’s How to Bootstrap, Boogie and Borrow Your Way to Success like to scrimp and save. And so do her kids.
“I remember sitting my kids down and saying, ‘We can save a hundred dollars without having these advanced movie channels.’ I renegotiated my electric bill. I remember having little parties with my daughter and instead of getting manicures, we had mother-daughter manicures at home instead. When everyone was coloring their hair, I made best friends with Loreal.”
Share your bootstrapping tips below!
Bootstrapping in the startup phase of your business is just way of life. You need to develop the bootstrap mindset. Startup mentor, Martin Zwilling, writes in Entrepreneur, “With startups, there is a big premium on creativity and innovation. Big competitors are quick to copy a conventional solution with minimal risk. Let a limited budget be your driver to winning, rather than a curse.”
Tips to Bootstrap your Biz
Zwilling offers 7 tips to bootstrap your business for success. They include:
Stick to a business domain you know and love.
Find team members to work for equity instead of cash.
Build a plan around your budget, not your wishes.
Stay away from office space until you have customers.
Ask for advance on royalties and vendor deferred payments.
Negotiate inventory management with suppliers and distributors.
Choose a business model to optimize your revenue flow and timing (i.e., monthly subscription fees and optional service fees, versus one-time product sales).
Another tip for parents starting a new business – Sandra says her family didn’t take vacation for 3 years. Not even a driving vacation. She said they just hunkered down and decided they were going to put in today, so they could have everything they wanted tomorrow.
Sandra’s 3 Steps to Borrowing for Your Success
1. Start with a business credit card: After about 2 years, Sandra’s business began to grow. She needed new computers, a postal machine and more. She says since banks want you to have at least 3 years under your belt before considering a loan, she opted for a business credit card instead. Sandra says, “I was advised to get a business credit card, not a personal credit card, because you need to establish business credit.” She would find an expense that was recurring and put it on that card for auto pay 3 days before it was due, so when it came time to borrow money she had stellar business credit.
2. SBA Loan: As her business grew, so did expenses. Sandra eventually applied for an SBA loan. “An SBA loan is really juicy, because that is long-term credit.” It was a 7-year loan, so Sandra planned out what she would need over the next 7 years and applied for a $150,000 loan. The interest rate was much lower than her business credit card, and the monthly payment was fixed for the duration of the loan.
3. Bank line of credit: Finally, it was time for the big guns. Sandra had established great credit, so now the bank was ready to give her a line of credit for whatever she needed. Sandra warns that “a line of credit is personally guaranteed. That’s why I’m not frivolous with it.”
Your Banker is Your Friend
Finally, Sandra says it’s important to establish a good relationship with your banker. She says, “Now I can call a bank and say, ‘Hey, I’m putting together a whole new enterprise system, or I’m building a studio. I need a couple of 100-thousand bucks.'” Sandra says because of that relationship with her banker, it only takes about 30 days to get approved for a line of credit.
Notice that “People” is number 1 on the list. Who do you have on your A-Team to support you? Your Banker is one of those people with whom you must have in your wheelhouse in order to run your business. Although these days some big banks get a bad rap for some shady practices, it’s important for you as a business owner to make friends with your banker.