clennell on sat 16 jul 05
Now that CC is on vacation I'll give ya my business 101 lesson on why a
business plan will be of no good to you starting your pottery business.
the 3 c's are what bankers are interested in.
character, collateral and capacity
CHARACTER- is established by how you pay your bills, what kind of business
references you can show ( clay suppliers ,phone , hydro) You'd be suprised
how much of your financial history they have access to.
COLLATERAL- this is what you own and what they can take away if you don't
pay up. the more liquid( easy to get rid of) your assets the better. Your
wheel,kiln and pugmill don't really even qualify- bankers don't want them!.
CAPACITY- this is the ability to pay back what you borrow. this is the one
thing that always is a problem for small business owners. We simply do not
know what next year will bring. What business plan would have factored in
911, mad cow, west nile, high Canadian dollar, black outs etc. When you have
a real job it's easy cause you multiply x 52 what your weekly salary is. We
really don't know if our showroom will sell $5 tomorrow or $500. Even a
track record of 10 years won't really tell ya. Tomorrow shino may be dead,
beer butt chicken holders gross, if not yucky, and a new potter may open
half a mile down the road.
I think small business owners just believe in themselves and their
abilities. they really never entertain failure. It take s a long time to get
used to it.
Cheers,
Tony
Tony and Sheila Clennell
Sour Cherry Pottery
4545 King Street
Beamsville, Ontario
CANADA L0R 1B1
http://www.sourcherrypottery.com
http://www.sourcherrypottery.com/current_news/news_letter.html
Tony Reynolds on sun 17 jul 05
Tony C.
Let me chime in here on bankers since it wasn't so long ago that I was
sitting on the bank's side of the desk. Something else to consider when
you walk up to that loan officer's desk. Bankers want to make loans.
That's where they make the money, not on our savings deposit arbitrage.
But of course the want to make "good loans".
Help them make the loan. That's where a business plan comes in. To help
the lender, not you, or at least not you directly. It's a tool that backs
up the lender's reason for underwriting the loan. It is his/her asbestos
to save his/her butt if the loan does go bad. A business plan is one tool
but anything the build the case; for example tax returns showing
consistent effort to make an income. If it's uneven help the banker
understand why. Lenders also don't like unknowns especially in history.
And include all your sources of income. They aren't the IRS.
And finally, unlike good creative people, lenders, bankers are very
plentiful. The competition is to your advantage. Use it.
Tony Reynolds
Prescott Arizona
www.tonyreynolds.com
Is there anything worse than a new convert?
clennell on sun 17 jul 05
Tony R wrote:
>
> Let me chime in here on bankers since it wasn't so long ago that I was
> sitting on the bank's side of the desk. Something else to consider when
> you walk up to that loan officer's desk. Bankers want to make loans.
> That's where they make the money, not on our savings deposit arbitrage.
> But of course the want to make "good loans"
Tony R: thanks for the good advice. Now you have Sheila sitting at her
computer bringing up these damn coloured bar graphs of our business month to
month, for the past 4 years. She'll be a nervous wreck wondering why last
year August sales were $8000 and why aren't we there yet and it's August
5th.
What I need is a generous patron and all these bar graphs and business plans
would go away.
Cheers,
Tony
Tony and Sheila Clennell
Sour Cherry Pottery
4545 King Street
Beamsville, Ontario
CANADA L0R 1B1
http://www.sourcherrypottery.com
http://www.sourcherrypottery.com/current_news/news_letter.html
David Hendley on sun 17 jul 05
Bankers? Loans?
Are you nuts? The absolute last thing a potter needs is a loan. Just imagine
the anxiety and sleepless nights when the kiln load comes out awful,
it rains all weekend at the art fair, or you cut your hand and can't work
for 6 weeks.
Talk about cramping your artistic development.
Potters and would-be potters: Avoid bankers like lime contaminated clay.
Save your money and wait another year before starting your business.
Get a part-time job. Anything but chaining yourself to a bank.
David Hendley
I don't know nothin' but the blues, cobalt that is.
david@farmpots.com
http://www.farmpots.com
----- Original Message -----
> Now that CC is on vacation I'll give ya my business 101 lesson on why a
> business plan will be of no good to you starting your pottery business.
> the 3 c's are what bankers are interested in.
> character, collateral and capacity
| |
|
