Imagine being a woman working in the women's swimwear industry, a field dominated by men who don't understand the importance of creating figure-flattering swimsuits.
That situation prompted Patricia Byrnes Kane, 42, to walk away from a business she co-owned to start It Figures. "Now I have complete freedom to do whatever I want," says Byrnes Kane.
Her freedom came in the form of roughly $1 million in financial backing from the manufacturer of her swimwear--Ronnie Strasser of Phantom Industries in Toronto, Canada. Byrnes Kane had already launched her firm when she met Strasser through a mutual friend. "He was trying to start a swimwear company and approached me because he was small in Canada and wanted to build his name in the United States."
The two studied Kane's profit and loss projections before sewing up a 50/50 partnership in which she runs It Figures in New York City and he runs Phantom. They communicate weekly to discuss business issues. All order fulfillment and design takes place at the Phantom plant while merchandising and sales happen at the It Figures offices.
Prior to signing the agreement, Kane visited the factory, researched Strasser's reputation and even contacted his bank to check his finances. "I wanted to make sure I hooked up with someone with integrity and honesty," says Kane, whose past partnerships had left her wary.
Would she have gone on without the partnership? "I probably would have gone to another swimwear company and started up a division there. But at the end of the day I might not have been as happy."
For entrepreneurs like Berka and Kane, the nontraditional route for business financing paid off. But they've also demonstrated that finding the money is no walk in the park, so gird up your "never say die" attitude and start knocking on doors to find that money.
Suppliers & Demand
Jerry Oakes, a business consultant who, in 1974, owned the international-distribution rights to mood rings and received financing from the jewelry firm he worked for back then, offers these tips to help you get financing from suppliers:
- Be open to those business arrangements that don't always necessarily involve an exchange of cash. Sometimes the access to a supplier's facilities, equipment and his or her valuable expertise can be just as valuable.
- Prepare. Don't just go to your suppliers with a great idea; go to them with a presentation detailing how your great idea can benefit their bottom line.
- If appropriate, make sure you have a patent, trademark, copyright on file or patent pending for your product.
- To show the need for your product or service, do some market research that extends beyond your circle of friends and family.
- Go to a trade show, get orders, then go back to a potential manufacturer and ask for financing on the strength of those orders.
A Wish Granted
A funny thing happened to Mark Elmore on the way to getting business counseling--the local Small Business Development Center advised him to apply for the Amarillo Enterprise Challenge competition. He did and won.
That $35,000 award helped propel this particular Texan into full-time entrepreneurship.
"I was at a crossroads with my business," explains Elmore, 43. He had run The Pilgrim Company, which makes computer mouse pads, part time since starting it in 1994. "I was ready to launch a business that could support me. I felt I had a product line and production capability to make it go."
But he didn't have the money. The Pilgrim Company was a perfect candidate for the challenge grant, because the $50,000 in sales Elmore was garnering at that time came primarily from outside the Amarillo area.
When he applied in 1998, there were 16 applicants; from those, five finalists were chosen. Taking to heart the committee's comments on the weakness of the marketing part of his initial proposal, Elmore took a chance and spent his precious financial resources to implement a card-deck campaign and Internet-banner advertising 10 days before the presentation. Its efforts generated 30 solid leads and several verbal confirmations. "I was spending over $10,000 a year out of my own pocket on financing, and it was a big stress on me. I felt it was time to see if this business was going to fly or not," says Elmore.
The committee was convinced, and gave him the grant. That cash infusion enabled Elmore to work on The Pilgrim Company full time, do additional advertising, purchase inventory and bring in additional help to handle sales. By 1999, sales had jumped to $300,000; they're projected to increase to $400,000 this year.
"Without the grant," says Elmore, "I probably would have given up within a year."