Funding your Start Up

How did you get he capital to start up your business?
Have you received and grants or loans and do you have any advice on how to smartly go about doing this? – Serah-Marie

Good question!

For me, I started my business very, very small. I borrowed $600 from my roommate for a used knitting machine (and this was after I had sold my first sweaters made on a borrowed machine) and set up in my living room. I wasn't even sure I was starting a business, except that I thought it might be possible. So in the very beginning, any financial risks I took were small enough that I could waitress my way out of debt, if need be. I grew by investing back heavily, selling two sweaters and using the money to make 4 more.

I kept a part-time job during the early months of my business, and gradually went down to 3 shifts a week, then 2, then thought, "Ok I'll give it 6 months and see if I can make this business work." And I never went back!

I was young, and my personal expenses were very low. I had no family to support, and worked like crazy on my business. So this approach wouldn't be right for everyone, but it worked for me.

Looking back, I'm very glad I grew slowly. I know now that if I had borrowed tens of thousands to open a store right away, I would have been way in over my head. By making my mistakes small as I went along, I learned and developed my product and my business, and never had any devastating failures.

Over the years, I've had a few expensive expansions. Most of them I financed with my personal credit cards and whatever lines of credit I could get, but always based on my personal credit. I am careful about interest, always trying to get the lowest interest rate, and using my line of credit to pay off my credit card in full each month.

When I opened Fresh Collective in 2003, I learned a lot about financing, in that I got totally overwhelmed! I've always managed to do an expansion in a big burst of energy, then pay off the debt within a year or so, but FC was a way bigger project than any I had taken on. I had big expectations about paying off all the startup costs quickly, and when that wasn't happening I suffered a lot of stress. I eventually took a step back and made some longer term plans about paying it off over several years, with manageable monthly payments and that was a lot more sane.

Although I never got any grants, or business loans (other than on my personal credit), I did get accepted into a version of the SEB program years ago when my business was very young. It's a great government program to help people start businesses. Not only do they provide support in the form of classes and guidance as you set up the business, they provide financial support! Here's a link to one site with info about it http://www.jobskills.org/seb-tn/index.htm.

Thanks for the question. I hope my answer is helpful!

Laura-Jean