March 2, 2012
Consultation service helped small business owner acquire loans for expansion
From left: SBDC Client Coordinator Carol Doersom, SBDC Director Matthew Wehring, Baker and SBDC Consultant John Tatum.
It’s not easy being a small business owner these days.
Even without the constant pressure to transcend an ailing economy, there’s the never-ending mountain of work required just to keep the doors open and the lights on. Long-term business plans? Marketing strategies? Financial projections and feasibility studies? There’s simply no time.
That’s why Brenham businessman Jim Baker turned to the free and confidential consulting available at Blinn College’s Small Business Development Center (SBDC).
Baker had already purchased Brenham Fitness Center and managed the company for about two years when he contacted the SBDC. With the expertise of director Matthew Wehring, consultant John Tatum and client coordinator Carol Doersom on his side, Baker wanted to explore ways to finish paying for the company while also purchasing the building and property on which his business was located.
Together, they discussed ways in which Baker could obtain financing.
“They helped me put the whole business plan together and had various options for financing, some through the Small Business Administration and also through conventional financing, to see what would work best,” Baker said. “They also helped me put together an extensive business plan, which you’ve got to have in place to put in front of potential lenders.”
To help Baker acquire the loan, the SBDC organized all of Baker’s financial data, focusing on the five factors lenders look for in a loan request – cash flow, capital, credit, collateral and the capabilities of management. After packaging the loan request in a way that met all the lenders’ criteria, the SBDC coached Baker on the best way to present his case.
“All business is a risk, but they help to minimize the risk as much as possible by doing as much homework as they can,” Baker said. “Things you might forget to include or think about, they’re going to cover. They make sure you know the answers to all the questions and go into a project with your eyes wide open from the get-go.”
Baker got the loan he needed, and Brenham Fitness was thriving, so much so that in 2009 Baker was working with the SBDC on a plan to expand his facilities when he was informed that Beyond Nutrition, a local wellness center, was available for purchase.
“We were probably not 30 days from breaking ground on an expansion project when the opportunity to buy Beyond Nutrition opened up,” Baker said.
Once again, he turned to the SBDC, which had already been helping him plan the expansion project. Now, it turned its attention to putting together a complex finance plan to purchase Beyond Nutrition.
Last fall, Baker saw an opportunity for a fitness center in the Bellville market and again called upon his friends at the SBDC. Wehring’s staff did the market research, created financial projections and performed a feasibility study, providing Baker and his business partner Johnny Gray with all the information they needed to decide whether to proceed.
When Baker and Gray gave the go-ahead, the SBDC helped them acquire a loan and create a new company called Fitness Plus.
“Every time I go to make a move, the biggest thing I want to know is what’s going on in the market I’m looking at, and they have all that material,” Baker said. “They know all the right questions to ask and how to get answers on all that stuff.”
Even when Baker wasn’t looking to expand his business, the SBDC helped him to build his client base with marketing materials and a redesigned web site.
“If you had to try and hire a consultant to do the things they do for free, it’s something a small businessperson like me couldn’t afford,” Baker said. “To me, their service was invaluable.”
The SBDC at Blinn College is a business consulting and training center that is part of the University of Houston Small Business Development Center Network, which serves 32 counties in Southeast Texas. The center provides free one-on-one consulting and low-cost training seminars.