Most people believe that once a loan is acquired, good things would start happening to them automatically, like the domino effect, but on the positive side.
- Is that the case?
- Can you win a battle by just the acquisition of an ally?
- Would you not need a strategy, a game plan to defeat the opponent?
Ponder on these questions, while I tell you a story;
- A story of the man who had big dreams and even bigger aspirations.
- A story of a man who could move mountains to make his dream come to fruition.
- A story of man named Peter, who needed money for his business and got the same through a loan.
Let us find out if Peter’s story can provide us with an answer to the posed question.
Introducing the Businessman
Peter was 32 when he decided that being an employee, answering to others, and earning the profits from your hard work and productivity was not something he had the will to do anymore.
So, he started his own business.
He worked at a restaurant as a sous chef in a somewhat popular restaurant in London. He loved to cook, that was the only passion he had in his life.
However, he could not do justice to his passion, being second in command. He needed to become a leader, so he became one.
His food truck was launched almost four years ago, even though it is relatively successful today, it wasn’t that way throughout the four years.
Peter always knew his finance management skills could make or break his business, although he hoped the latter did not happen.
His financial history only allowed him to apply for loans for bad credit with no guarantor and no fees for the unemployed, and it got approved, he knew he had to manage the same from the get-go.
- A significant portion of the loan went into buying the truck, he could have purchased the same on instalments, but that would have meant an extra expense each month.
- He also set aside 20% of the loan amount for emergencies. Since a startup business is bound to experience plenty of those, I found him very wise.
- He knew that upgrading a few appliances inside the truck was needed; the cooktop had seen better days, so that was the next use of the loan amount.
- He also painted the truck brand new, with his business name front and centre in bold and neon green. He had a bit of an eccentric flair, and he used it.
- Some portion of the loan was also used to get the permits and fulfil the legalities that a food truck needs to.
- The remaining amount would be used for getting groceries for the kitchen.
- He also knew that the business loan was only meant for the business. He did not even use a pound of it on himself, despite the temptation being too strong. He managed his personal expenses through his savings.
Such planning is essential when you procure a loan, especially if it is a business loan.
The best part of Peter’s strategy was that he was not too confident. He knew that a new business is bound to struggle in the initial period and not being prepared for that struggle could be a colossal mistake on his part.
A new business works on the principle of trial and error, and so does financial management. Being human, it is understandable that we will make mistakes, but we also can convert that mistake into a gain.
Peter’s first mistake was that he was trying to fit into the already prevalent trucks in King Street, rather than standing apart.
If people did not find any unique attribute in a new business, they would not be compelled to try it out. A new business will only be successful if it can pleasantly surprise the customer and make him in awe of it.
The standard “fish and chips” is not an awe-worthy dish, and that is what Peter was offering.
After about four months in operations, and not earning the desired fame and sales, he realized, he was doing something wrong. He had enough to get by another couple of months, but after that, he would start sinking.
He knew only a change could save him.
He knew it had to be imminent; otherwise, no financial planning could save him.
So, he decided to change. He no longer wanted to provide plain British food. Instead, he tapped into his Turkish roots and capitalized on the same.
He asked for his grandmother’s recipes from his parents, and with a mix of his eccentric personality, he knew the dishes would become a success, and they were.
Kofta, which is a Turkish meatball served with a salad, was one of the most popular dishes in his menu.
Sis Kebap, a skewered kebab dish with beef and lamb, was another hit.
In the end, all I want to say that Peter achieved the success that he did was not only because of getting a loan and not only because of his business intellect.
He did gain success because he planned for it. He prepared for every detail of the business and every of the loan.
So, you tell me can a loan alone make things fall in line for you or do you need to put in that extra effort to make it work?
successful smb owner -DepositPhotos