Having been a faithful reader and sometimes contributor to orchid for
years, my family finds itself in need of some assistance.
Scenerio: I’m a public school art teacher and hobbyist jewelry
maker/designer/2D artist working towards a show. Result: very small
nest egg. Much like cavier, perhaps. Single egg, really
However, my wife, who is also an artist, has worked closely with a
successful female artist who’s one of a kind work is now outselling
her bread ‘n’ butter work. This artist wants to sell her steady income
business to my wife to free up her valuable time. An outstanding
opportunity, but finances are tight.
Knowing that a large population of orchid is successful female
business owners, I was hoping that somewhere out there might be some
advice or helpful pointers to grants/low interest loans or whatever
for women to start their own business. My wife, Salli, is an
exceptional artist whose dream is to do this very thing. Any help at
all is greatly appreciated.
I do not have specific expertise in this area, but some general
observations. Somewhere I have read that the most frequent source of
loans for small business startup (and also the most personally
problematical) is relatives. So that is a place to start. There
should be, in your local library some books and directories on this
very subject. There is also the Service Corps of Retired Executives
(SCORE), which probably consults in this area, and the Small Business
Administration, which should know of opportunities beyond what it can
offer.
I wouldn’t do anything like this, having the temperament of an
air-headed visionary myself, without consulting with the appropriate
bean counter – a financial consultant or tax attorney or somesuch,
maybe several of them. Remember that it might be one’s dream, but
completely unfeasible. The bean counters will give you the cold hard
facts and will give you the “look” when you seem willing to buy
something which won’t pay you a salary PLUS profits. You have to
look at the financial records of the business and then also consider
market factors for the future, impact of change of ownership, etc.
Third, I would talk with a business broker about typical financing
procedures. Some of these people would be willing to share gratis,
most people love to talk about what they do, but you might have to
tell them you looking for a jewelry business to buy with no money or
minimum money down. Just see what they say. I would not think it
unreasonable for this lady to sell to your wife for a percentage of
the profits in future years. That way she has a stake in seeing that
the business prospers and in offering continued assistance. Your
wife could initially be a manager who is paid a salary and a portion
of the business assets for each successive successful year until she
owns it all. While you can work for next to nothing if that suits
you, your financial advisers will tell you that you should get a
market return (at least) on any money you invest, a salary
commensurate with that you would receive for comparable work
elsewhere, and THEN a prospect of some profits as the owner and
primary risk taker. If it is all looked at this way, the price may
fall to a realistic level. The owner may also be interested in
selling to your wife as opposed to someone else if she knows that
your wife will take good care of the business. This matters to most
artists.
Bearing mind all of the above, one’s negotiating position is always
strongest when one is prepared to WALK if the terms are not right.
I hope this does not seem mean-spirited or condescending. If I am
telling you what you already know, I apologize.
As a member of our local BPW (Business & Professional Women)
organization for many years, I would STRONGLY recommend that your wife
and any other prospective member investigate your local chapter. Not
only will there be much chance for networking which will increase her
business, but there are also scholarships, insurances and business
loans available to members. Their next National meeting will be taking
place in Portland, Oregon, July 11th thru the 15th. I’d love it if
she, or any other woman or young lady deciding to join to mention my
name. (All that would mean is that I would get a pat on the back.)
But seriously, I have found that my sales specifically to our state
wide BPW members constitutes a solid 10% of our annual sales.
Judy Shaw
Jasco Minerals
BPW-NY District 4, North Country
Terrence - my first question is “What is your wife buying?”
Is it a customer list, processes, inventory, tools, instruction, show
list or what? How does you wife differentiate her production items
from the former owner - and does the former owner agree not to
compete, and to pass on orders for same, etc.
Once you have figured out what she is buying, what is the present
value of the potential earnings less the cost of production, etc,
etc.?
Then you and she can produce a business plan that says how she will
repay the borrowed money, and still make a living. Once that is
done, and you are still sure you want to go ahead, call your credit
union or bank and ask for advice. If they don’t want to loan you the
money, they should be helpful in directing you to a place that would.
Unless this is a huge amount of money, I’d suggest that you get a
signature loan on your personal credit and get on with it.
Buying a part of a business, especially when it has a lot to do with
the artist producing it, is something for which I’d advise getting a
second opinion.
Perhaps an alternate option is to have your wife produce the
repetitive work on a contract basis for the original artist for a
while. Then she will better understand what she is buying.
Just some thoughts - in a former life I did mergers and acquisitions.
that probably explains why I make a living with a torch now.
I own a small, successful business (2 years now) and would be willing
to answer any questions I’m able to. I also have a terrific Biz
Development Expert/CPA in NYC that I could refer you to. Just e-mail
me at @Quiksil731.
Please excuse the late response. I had misplaced this address. On
the web, check www.countmein.org. It is a non-profit organization
which offers small business assistance fo women. Good luck,
