How Did You Finance the Start of Your Business?

compiled by Kirsten Coughlin


WHAT'S YOUR OPINION?

Each month, The Crafts Report invites readers to respond to the Public Opinion question. Responses are published in the magazine.

The question for the October 1999 issue is:

What plans have you made for your retirement?

Please respond by August 1, 1999.

Send responses to:

I told a friend I could make an item they wanted that would normally cost $400-plus. They saw what I could do, and because I was unemployed at the time, loaned me $80 to get started.

I used the money to get a tax ID number and contacted suppliers -- some extended me credit for supplies with a net 30. I purchased tools slowly, and since I've returned to work, I make one piece at a time. Hopefully, this will allow for growth with a steady income.

Brenda
B.J.'s Collectibles
via e-mail

The first year, we loaned our business, Steel Curves, $5,000 seed money from our personal savings. I had no employees and took no pay. Last year (our second year) we took out a personal bank loan which the business is paying back. I now have two employees, but still take no pay. We are in our third year, and I am hopeful that next year we can also afford to pay me a salary. Our expansion has been terrific and business is really good, but we have high expenses for advertising and shows. I think both are essential to our growth, and I am very optimistic about the future of Steel Curves.

Fluffy Palmer
Steel Curves
Philadelphia, Pennsylvania

Three years ago, I borrowed money from my brother to help finance the start of my woodworking business. I didn't want to go to a bank to get a loan, since the interest rates tend to be high. Plus, there's always the possibility that I wouldn't even be approved for a loan.

I offered to make my brother a silent partner, and he agreed. I bought the necessary things -- tools, supplies, etc. I am on a strict payment plan to pay my brother back. I am grateful to him for loaning me the money, but I don't want to be indebted to him forever. I intend to buy back full ownership of the business as soon as I can.

James Gehr
via e-mail

I borrowed money from a bank last year to get my business off the ground. I contacted suppliers, many of whom offered me credit. That helped a lot.

I also have a nest egg that I have been saving so, if I need to, I can use that money. I am trying to stay away from it for as long as possible. You never know when an emergency will come up, and if I use it now, I won't have anything left.

Right now, my income is nearly non-existent, but business is slowly picking up. I try to purchase as much advertising as I can afford -- by buying business cards, brochures and an occasional classified ad in a craft magazine. I also send information to the local newspapers in hopes that I will get some free publicity.

I am also starting to break into the craft show scene, but since the booth fees are expensive, I can only do one, maybe two this year.

I don't expect to make a profit for another year or so. It helps that my spouse has a steady job. I don't know if I could do this otherwise.

Scott Flemington
via e-mail

Kirsten Coughlin is editorial assistant of The Crafts Report.

AUGUST 1999:

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