Creative Business

When Gatekeepers Crash Your Party…

Creative Business

You just have to go underground!

Bad news: I didn’t get start-up financing for The Crafty Branch.
Good news: I’m not done yet.

Some things to know if you, like me, want to go the traditional business financing route. It’s hard. This isn’t exactly news, I know, especially if you follow business blogs or magazine feeds (I find the Entrepreneur.com feed particular informative), but it’s not easy. Unless, of course, you already have money and just would rather start your company using someone else’s, then the banks are happy to work with you.

We all know that isn’t my situation, right? Moving on.

The first two local banks passed on my business plan and I wasn’t super surprised. After all, they told me up front that they usually dealt with the real estate side of commercial lending, but were at least willing to take a look and see if they could help me. They were very supportive of the idea and my planning, just not my financial state at the moment. Such is life. But it never hurts to try your local, community banks because they–by dint of their community bank status–have to reinvest a certain portion of their largess into their local community.

The third bank, though, was an SBA (small business administration) lender, so I knew I’d at least have a shot there, since they deal with startups more so than the others. Not surprisingly, that was immediately where the loan officer steered me and after he reviewed my business plan and plugged my initial numbers into their risk rating program (because that’s a thing, apparently), I passed initial review and he sent me the SBA application to complete and return with various supporting documents. It wasn’t a slam-dunk, he made no promises, but it was a step further than I’d gotten before.

Of course, that’s when Todd broke his wrist and we got a little side-tracked for a while. Such is life.

What I knew going into the SBA loan process (from research on the SBA.gov site):

  • The SBA doesn’t lend the money, they just serve as guarantor for the funds that the bank lends, up to a certain point (usually 80-90%, depending on what’s being financed)
  • The lowest loan request that the SBA will entertain is $100K, so if you need far less than that, don’t even bother. I didn’t really need that much, but with working capital included I was close, so I bumped it up to meet their minimums. In reality, I probably could have started up with around $60K if I were careful with the funds.
  • Loan terms are governed by what is being financed,7-, 10-, or 30-years for start-up funds, expansion funds, or real estate, respectively. I knew that if I got the loan, the longest loan term would be 7 years, so I plugged that into an amortization calculator to figure out an estimated loan payment and interest for the 3-year projections in the business plan.
  • The SBA ideally wants a 100% secured loan situation, be it by in-business collateral or personal property backing. This is where buying property as part of your business plan is a real help, if you can get a good enough deal. BUT! I also read on their site that if the application and plan were sound enough, they wouldn’t deny a loan solely for lack of collateral. I was kinda banking on this.

I thought I was pretty well prepared, overall, when I submitted my application. But what I didn’t know, hadn’t come across in my research, and would later spell doom for this process is:

  • The SBA requires a secondary source of income, enough to service the debt outside of the planned use of the funds.

And even though Todd submitted his income information as part of the application (spouses of owners have to, as well as anyone who owns 20% or more of the company as a shareholder, etc.), it wasn’t enough to satisfy their requirements. So, since I didn’t have that secondary income source, the unsecured nature of the loan became the one-two punch that KO’d The Crafty Branch as written.

Amusingly enough, this news came the day before the stated grand opening specified in the business plan. I don’t think it truly counts as irony, but it’s damned dark as far as humor goes.

I had considered seeking investors instead of a bank loan, giving away a percentage of the business in the process, and thought I would pick up that thread at this point, once I’d given myself a few days to grieve. I also tried a couple of non-traditional lending options, but the downside there is that their quick responses are based on precious few factors, the strength of the business plan not being one of them. Basically credit score (mine’s actually still good, even after buying The Dollhouse last year) and credit usage (and that’s where my downfall is–it’s higher than the 45% cutoff they look for). Oh well.

And there are other great programs out there… if you already have business history to judge from. Since I didn’t have that, options like kabbage.com weren’t.

At this point, though, I was tired. Tired of groveling. Tired of asking someone else to give me freaking permission to do what I knew I was fully capable of (funding being the only obstacle). And what do you do when you’re tired? You take a nap. You rest.

So I rested. And I pondered. And I decided that when I got up, I wasn’t going back on that same path.

Nope!

So the store isn’t happening now, and probably not this year. And I’m okay with that. I’m okay with that because I have (and have always had) a back-up plan. More than one, actually, but what I’m going with is Plan C (or really Plan C+, because it’s evolved since it was originally thought up).

Plan C isn’t fully formed yet, it isn’t ready for launch just yet, but it’s an option that lets me do part of what I wanted, build it up, and use that growth to open the store, just a little farther down the road. Providing, of course, that a similar store hasn’t already opened in Thomasville. It’s a risk, it’s not like I get to call dibs, so I’ll continue to work towards that goal until I either reach it or it no longer becomes feasible. In which case, dude, it’s not like I’m hurting for ideas to pursue!

More on Plan C later. First, though, I have a rant. A rant against despicable business practices and going against your gut. I just don’t have the end of the rant, yet, so, yay–something to look forward to for next week! But when we get past that, Plan C is good. It’s so cool and it’s going to be so much fun. And it gets me back to working on a somewhat abandoned project as well, which makes it feel all the more right.

What’s in a Name: Filing an LLC in Georgia

Creative Business

Instead of lying and telling you that the business plan is done (though it’s really close, the light at the end of the planning tunnel is really super big!), I have a little story to tell you about how not to register your LLC in Georgia. (And, possibly, other states, but I can only swear to Georgia).

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At the beginning of the year I wanted to go ahead and nail down a name for the business. I generally start with names or themes for projects, so why would the store be any different? After all, it’s just a really really big project, right?

After brainstorming (name-storming?) a couple dozen possibilities, the next step was to vet them for .com and social media availability (in my case I checked twitter, pinterest, instagram, etsy, and Facebook). It’s tedious as hell, but a necessary step in this digital day and age. I mean, you don’t want to get your heart set on The Name only to find some idiot is using it on twitter already. Sure, you could add a ‘the’ at the beginning or a ‘shop’ or ‘store’ to the end, but what are the odds your customers are going to find them before you? Exactly. It’s just not worth it.

Then, because it never hurts to test your favorites, I polled a few private Facebook groups I’m in as to their favorites, then I ended up picking one that wasn’t even in the top 3.

Because sometimes you just have to go with your gut.

Part of that was that I had put Scraps of Life in the hat, and it won by a landslide, but I realized that if the time came to sell the business, I’d be selling my online identity for the last decade or more. Since I wasn’t comfortable with that possibility, whether it was 5 years or 20 away, it and any other names I was personally attached to went out the window.

So, now to the good stuff: filing with the state.

Thankfully Georgia has a pretty simple online system to register your company with the Secretary of State. You’ll need to create a cGov360 account, then you can handle pretty much anything you need from this one login. One thing that came highly recommended was to reserve the desired business name before filing your official registration. It’s an additional $25 fee, but the name reservations will come back a yay or nay fairly quickly and, if you do it online, refiling in case of a problem is really simple.

Ask me how I know?

I was pretty sure that The Crafty Branch wasn’t going to have any obvious conflicts in Georgia, so imagine my surprise when my initial name reservation failed!

Turns out, just because you tell the state you’re registering an LLC (or a Corporation, I’d imagine), you are still required to include “LLC”, “L.L.C.” or “Limited Liability Company” as part of the name (or “INC”, “Inc.” or Incorporated, respectively).

So this is how I know just how simple it is to log back into your cGov360 account, make the necessary change, and click on refile.

Not surprisingly, the name went through just fine the second time.

Now, the name reservation is good for 30 days, so sometime within that window you go back to your cGov360 account and complete your Articles of Organization online and pay the $100 registration fee. The Articles of Organization, online at least, involve typing in your name and business addres 3 or 4 times and digitally signing it. It really is that simple. The down side to registering early, is that I didn’t have a business address yet, so I was using my home address (also could be referred to as a records address). That’s not a problem until I get an actual business location and need to update the records with the state: that privilege costs the same amount as the annual filing fee, $50. But you want to be sure of the name and registration before you go shopping your business around the investors, so you do what you have to do!

Again, with such a simple process, how could I screw it up?

Apparently easily.

The failure notice, this time, said that I entered a title (when I digitally “signed” the application) that was not appropriate for an LLC registration. The only appropriate titles for the signer of the LLC application are Member/Manager, Organizer, or Attorney-In-Fact. The first screw-up I take full blame for as it totally didn’t occur to me to include LLC in the registered name, but I’m going to have to insist the State of Georgia take partial blame for the second error. You see, I listed myself as the Owner (which is technically correct) but it’s not like I typed it in–I selected it from their drop-down menu of about a dozen options.

So, listen up programmers, how about another If>Then statement to narrow the drop-down options for the type of registration being filed, mmmkay?

Anyway, another login, update, and refile (thankfully these refiles don’t require re-paying the fees) and another week of waiting and I finally had full and clear license to The Crafty Branch, LLC; at least as far as the state of Georgia is concerned.

And while you’re in a filing mood, you’ll probably want to register the name with the IRS to get an FEID number (instead of using your social at this point) as well as set yourself up with the Georgia Department of Revenue for sales tax (and any other taxes you may need to file, like employment taxes and unemployment insurance if you’ll have employees in the near future).

And a disclaimer, just to cover my butt in case something of the above is wrong or becomes wrong by the time some stranger reads this and takes it as gospel: I am not a lawyer and I am giving absolutely zero business or legal advice, because that would probably be illegal. This is just my experience to date, as of it’s original posting. You should always verify the current regulations and fees in the state you are looking to organize in for the most up to date information, and seek actual legal counsel if your organization is in any way, shape, or form more complex than a single-member LLC. And even probably then.

RBBiz Day 10: S.A.R.K. and Farewell

Creative Business

It was a jam-packed two weeks and it certainly flew by!

We had over 200 people watching live as SARK donned her Love Glasses and Owl Hat of Wisdom to give us our right brain booster of the day!

We had over 200 people watching live as SARK donned her Love Glasses and Owl Hat of Wisdom to give us our right brain booster of the day!

Friday’s interview was with S.A.R.K. who is kind of a legend in creativity/live-your-dream circles. I’ve known about her work for a couple decades but hearing her story (even in an abbreviated form) directly from her really puts a lot in perspective. And, once again, I was happily surprised at how down to earth her core message was (just like with Dr. Maisel on Thursday) when you could easily expect airy, ethereal, head-in-the-clouds capital-w Woo. It really was a treat to listen to her speak.

Because her work has been around for a while and has disseminated throughout various nooks and crannies of the Internet, I was familiar with (and practice many of) her methods, even if I didn’t know they were “hers.” Things like acknowledging negative feelings and giving them their due? Yup. When I feel low or get a case of the “mean reds” I give myself permission to be in that mood, to wallow in it if necessary, and you know what happens? It’s over a helluva lot quicker than if I’d spend time denying or fighting it or, worse, lashing out at others and making bad decisions because I wasn’t in tune with what was really going on. That’s super-similar to SARK’s “inner feelings-care” practice.

Her talk about the Inner Wise Self and how to activate it daily and always instead of just in the Big Moments where we think we need extra reinforcements is a good lesson in trusting our guts, intuition, or Higher Self—all the same thing, just different names and approaches. And her “inner critic-care” reminds us that our inner critic (or inner editor, for the writer types) is just trying to keep us safe and protect us, and it’s our job to recognize that and learn to use that and work with the roots of those insecurities and views, but not to be hampered or hindered by them.

One of the last things she said was, I think, really important. It’s not about feeling good all the time, it’s about feeling good more often and spending less time in the negative spots. (close paraphrase) That’s the kind of down-to-earth bits I mean, the recognition that no matter what, it’s not all going to be sunshine and rainbows and puppies. There will be lows, there will be suckiness, and to expect otherwise is detrimental to our overall well-being. But if we can work with and around those lows, take them for what they are, our expectations won’t be shattered every time we have a bad day (week, month, year).

I don’t know about you, but I find that incredibly reassuring!

And, of course, today being the last day of the Summit and still possibly the last day the the last Summit of all time, it was bittersweet. But because I upgraded to the Premium Pass, it wasn’t really over. We still have 2 coaching calls to go (we had one this week already and it was fabulous!) and access to Jenn and her Licensed Facilitators in the private Facebook group through April. Not to mention the bonus goodies that are also part of the Premium Pass upgrade. But the end of the “active” Summit, we’ll call it, means I now have time to process all the great information taken in at otherwise top speed. That I get my lunch hours back to read a book for fun or work on something or go run errands. (Yes, I could have done this these last 2 weeks and just watched the replays, but I really do enjoy the live-chat as part of the experience, even if I only catch maybe a third of what’s going on–that’s what the transcripts are for, right?)

*One last affiliate link ahead*

So, if you’ve been reading through this or even just seeing my instagram photos from each day, and you’re thinking, man, I really wish I’d signed up for this and now it’s over–hold up there just a second 🙂 It may be too late for the live options, but if you head over to RightBrainersInBusiness.com and click the upgrade button, you’ll still be able to sign up for the Booster or Premium upgrades. The Booster gives you forever access to the videos, plus downloadable audio files of the interviews, illustrated learning maps, chat transcripts, and left-brain checklists of action steps taken from the sessions. With Premium you get all that plus full transcripts, the private Facebook group, the live coaching calls (plus their recordings), and a bunch more. PLUS! If you upgrade through Tuesday, March 24 (2015, of course), you still get the early bird rate of $67 for the Booster or $137 for the Premium (compared to $97 and $197 respectively).

What are you waiting for?

What are you waiting for?

Well, I’ve got a business plan to work on (my challenge this weekend in the financial projection for the store, and the FB group is holding me accountable to get it worked on, which is so very helpful)!

RBBiz Day 8: Dr. Eric Maisel

Creative Business

Oooh, lots of good stuff on Thursday’s Summit session.

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While Dr. Maisel said a lot of really thought-provoking things, he expressed himself very matter-of-factly, was very realistic, cut and dried, and down to earth but–and this is the big thing–without coming off as condescending or judgmental. So much so that I really enjoyed listening to what he had to say and have added several of his books (Why Smart People Hurt, Life Purpose Boot Camp, and others) to my reading list because I suspect there’s a lot of smart things to learn there about making our worlds into what we want.

I recognized some of the things I already practice in some of what he said (the cognitive therapy of assessing and correcting thoughts that serve no positive purpose, for instance) but, like previous presenters, the way he was able to encapsulate it was brilliant. As you would hope from someone who’s spend a lot of time working on these themes!

I know a lot of people in the chat recognized habits when he compared creativity to the ups and downs of bipolar disorder (not trivializing bipolar, just that we share common traits when we’re in the thick of a new project). He was also very clear to point out that the work is hard–doesn’t matter what work it is–but that if we decide the work has meaning (very big on the conscious choices of designating meaning and purpose to our lives) then even the hard/low/frustrating/maddening parts aren’t near as bad as if we decided the pursuit was meaningless.

Let that sink in a moment.

Only one more day to go on the 5th (and still possibly final, at least in this form) Right Brainers in Business Summit. And it sounds like it’s going to be pretty epic with SARK as the guest!

RBBiz Day 8: Kate Northrup

Creative Business

Kate’s talk on Wednesday was all about the money!

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Having a money expert chime in during the Right Brainers in Business Summit is a regular part of the program and always interesting because Creatives, in general, seem to have a lot of anxiety and stress around discussing money, selling, budgeting, and the whole money numbers block that a lot of folks have. Even though I’m pretty good with numbers, I can safely say that I’ve had some other baggage around money matters in the past and I’m actively working to improve them.

If you recall, I wrote about how I redesigned the monthly budget worksheets for the Creative Days planner, this year, and one of the features I added was a more robust debt tracking system. It’s very cool to be able to put down arrows on more lines than up arrows, indicating the overall shift in my balances. Slow going, since I’m working off some spending born of impatience and whatnot, but it’s going in the right direction.

One of the lessons I try to remember each month as I fill out my budget and schedule all my bills to be paid (oh, thank goodness for online bill payment systems!), is to be grateful that I have the means to pay the bills. That while I might not always like the chore of paying bills, I’m able to do it (usually) without stress and that’s worth a lot. I think that one came from one of the first two years of the RBBiz Summit, but it’s stuck with me.

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These posts are getting shorter as the second week goes by. Chances are no one really minds, judging by my stats, but I will say it has less to do with the Summit (the guests are awesome day after day) and more the fact that I’ve been sleeping horribly the last few nights and I’m not entirely sure why. Makes for a very sleepy Scraps and a sleepy Scraps is not a talkative (type-ative?) Scraps. Anyway, two more days of Summit to go and then we’ll be back to our usually scheduled food, house, and craft fun.

Also, Happy Birthday to Todd!!! He’s not actually big on having his birthday celebrated, so we keep things low-key by request, but I am incredibly grateful that he was born 🙂