How a small business loan helped me define my business
Deciding to start your own business is no easy task. My eyes always twinkle with excitement every time I hear peers and friends speaking about starting their own business. As business owners, there are plenty of trials and tribulations we need to go through, and I certainly had my share.
In 2008, I took a small business loan to kick-start my first business, Fauxcialite. I used the funds to build my company’s website and within one month I was collaborating with brands like Sony Music, FILA and Fuze Beverages. Creating this product so quickly enabled me to build momentum and understand the current needs in the market. It also enabled me to get my beta product in front of investors and get immediate feedback. Execution enables you to iron out all of the logistical issues and figure out a sound business process. Additionally, exposing our customers to the product enabled us to understand the pro & cons within the potential marketplace.
What I was able to learn by launching this business was extremely valuable and I never would have gotten the same experience from school or working for someone else. Unfortunately, the business didn’t take off like I had anticipated based on timing and the imminent recession. Since my business was strictly based on event production, that’s definitely one of the first things that gets cut during a recession.
Very often individuals who start their own business are reluctant to get a loan and end up maxing out their credit cards instead. Thankfully I was able to pay off my loan in a timely manner and at a reasonable rate, while also having enough funds allotted for the project, which really enabled me to take a look at my business in a different way. I wanted to see a return in my investment within the first 6 months, and without a loan it would’ve been too easy to keep feeding money into the business and not no when to stop.
My business would have probably have taken off after the recession, but the profit margin didn’t seem considerable enough to move forward. That’s when I realized I needed to take a hard look at my business and decided to terminate it in March of 2009. Luckily shutting down my original business enabled me to start a new project, my digital consultancy, and I was able to take the lessons from this experience and turn it into an entirely new enterprise. Even though the business didn’t turn to be a success like I had anticipated, it really helped me build another business with a much stronger foundation. As a thank you for Accion New York, I’ve been contributing my efforts to teach others about business loans, social media and the trials & tribulations of owning your own business. When one door closes another opens up, especially in the never-ending journey of entrepreneurship.