Options when cash runs tight

It’s the off-season for beach goods. You do what you have to when the bank account shrinks. About 9 months into the company, money was getting tight. While Sunfitters was covering all the business expenses for the warehouse, inventory, utilities and other essential services — it was NOT covering my salary.

Three options for finance

While exploring my options, I met with some folks in the venture capitalist community. Sunfitters is a retail company, not a tech company. I didn’t need more than $600K at the MOST, and investors are only interested in BIG BIG returns. Even if I could by some miracle show this would blossom into a huge number, I would have to give away more than half the company to get an angel investor interested. And the angel would put us on a fast track for VC money, and then a liquidity event for tens of millions at a minimum. C’mon now.

Turning to another source, I spoke to some commercial lenders to finance the business. But I learned that borrowing would have been a lot easier BEFORE the company opened its doors. To get a small business loan post-launch would require more of my own assets… and I’m simply tapped out.

So I chose the only viable option: a slow growth plan. That meant we would have to get scrappy using working capital. What does it mean to “get scrappy?” It means I would have to go back to work.

Go BACK to work? I thought you WERE working…

You have to pay yourself if you’re working for yourself. And for Sunfitters, that just wasn’t happening. Most of our savings was going into the mortgage and home expenses. Sunfitters was in the black. But the money at home was still going fast.

In late Spring, I ran into an acquaintance of mine at Shop.org. Out of the blue, she told me Forrester Research was looking for a new retail analyst to cover eCommerce, mCommerce and store kiosks — and had hoped I’d be interested. After a few months of courting the idea, I took a few weeks off in June and started the new job on July 2. The plan was that I would find a business partner to run Sunfitters.com (with my wife’s help) while I returned to work to earn a paycheck.

In the first 4 months on the job, I was lucky to meet scores of retailers and dozens of vendors. I brought in new business, delivered speeches, worked with the press, written research, and done quite a bit of retail and IT consulting. But while I was putting food on the table, Sunfitters was on auto-pilot. Auto-pilot is no way to grow a business.

I wanted this second job to give me visibility. Unfortunately, the firm will not allow me to identify the business I own, or in any way associate myself with them in this private venture. It’s was awkward when industry clients and colleagues who know me from Sunfitters brought it up at the firm.

At the end of my first quarter, I’d blown through my consulting quota by 530%. But no matter how much time and energy I gave the firm, there is an uneasy sense that I could still do more if I gave up on my business. I could no longer work 70 hour work weeks AND succeed with Sunfitters. So I made a very difficult decision to protect my investment, and resigned from the firm after a remarkably short tenure.

How then will I earn income while keeping the retail business running? Consulting! I hung out a shingle with the name B2C Partners to advise other retailers and solution providers — while growing Sunfitters. Now I work on a more manageable schedule I arrange with my clients.