Managing Your Debt
Even successful businesses have debt, but how much is too much? Learning how to manage debt is what can put you ahead.
Only a short time after husband-and-wife entrepreneurs Karen Cooley and Eric Favier bought a friend's restaurant in 1991, they had their first taste of success. Sales at their Tallahassee, Florida, restaurant, Chez Pierre, had more than doubled in response to savvy marketing and expanded kitchen hours. But after five successful years at the location, the federal government acquired the restaurant's property to expand a nearby courthouse. "We were given one of those 'When life gives you lemons, make lemonade' kind of scenarios, and we had to move our business," says Cooley, 48.
So the couple took another leap of faith, buying and renovating a commercial building for $1.2 million to house the restaurant. It marked a major entrepreneurial milestone for Cooley and Favier, who had previously leased restaurant space from the original Chez Pierre owners. Not only did they now own their own building, but they were also knee-deep in debt because of the purchase. "It was really challenging, and we weren't sure where to go next [or] what to do," says Cooley.