In observance of Memorial Day, all Provident Bank branches will be closed on Monday, May 30, 2022. Online access to your account(s) will not be affected. Normal banking hours will resume the following business day.
We’re back with more entrepreneurship lessons from our resident SBA expert, Bruce Rossi. And we’re starting with this: you can’t possibly operate a business from the red. Here you go, the final warning signs that you are NOT an entrepreneur, and if you missed Part 1 of the series, you can read it here.
“Entrepreneurs absolutely need business savvy,” says Rossi. “I tell loan applicants all the time that they have to understand the business of being in business; they have to know what they’re getting into. Everyone thinks they’re going to make a gazillion dollars because they’re in business for themselves,” he continues. “But what they don’t realize is that they’re the last ones to be paid.”
He explains that Provident most often provides loans to those applicants with a secondary income stream. That way, they can continue to support themselves without siphoning money from the growing business. Entrepreneurs must consider how they will fund their company.
“A few weeks ago, a woman wanted to open a wellness center. She’d been working at a similar organization and was recently out of a job when the property’s lease expired and the wealthy owner closed the doors.” She outlined the operating costs for the previous business and a projection for her proposed business. Her numbers added up. The only problem was that the other business had lost $681,000.
“We asked her how she planned to make a profit, and she had no idea. She hadn’t thought about it! She didn’t have to worry about paying the bills before, but she certainly didn’t have the same funding as her former employer.” The bottom line is that you can’t operate a business at a loss for very long.
The word most synonymous with entrepreneur, we think, is sacrifice. Like Mark Cuban, owner of the Dallas Mavericks and series regular on the hit TV show “Shark Tank,” attests, entrepreneurs must eat, breathe, and sleep the business. That’s all there is to it. Of course, Rossi has yet another anecdote to enumerate the point.
“Years ago, I approved a loan for a deli for two middle market managers at a telecommunications company. It was an easy yes because they were eminently qualified— the education, experience, business savvy, everything was there. Just a year later, another application landed on my desk for the same deli. The owner called me and explained that they were selling the franchise and he gave the buyer my name.”
“I was shocked. I asked him what happened, and he said, ‘You know, this just wasn’t what we thought it was going to be. We had to work nights. And weekends! We had to come in early and work long hours when our employees didn’t show up for their shifts.’ They thought running a business was going to be like life at their former company: 9-5 and an hour for lunch.”
But entrepreneurship means giving it everything you’ve got—all your blood, sweat, and tears. After all, passion stems from the Latin word for suffering. Any business founder will tell you that’s not coincidence.
Finally, you have to ensure that you’re working with the right bank; your lender should be experienced, responsive, and possess industry-knowledge. Every financial institution approaches small business loans differently, so you’ll want to work with one that can help you meet your goals. Provident, for example, features local decision-making, quick turnaround, and committed, personalized service. It’s essential for the bank and the customer to meet in person and set expectations. That way, all parties know exactly what’s going to happen, when it’s going to happen, and how it’s going to happen.
But the thing is, you ARE an entrepreneur if you’re free-thinking, dogged, industrious, full of moxie. If you’re driven, passionate, and goal-oriented. If you’ve always dreamed of sharing “La Mia Mamma’s Marinara,” you can make that dream a reality. So draft a plan, learn the industry, savvy up your un-savvy, find your peanut butter…and apply for that loan. Go. Do it. Bruce Rossi is waiting for your questions.