Edited By Nicholas Olds
When I began my career as an entrepreneur, I was starting at a time when the recession hit hard. In that first year as a freelance writer, there were difficult times because my experience in running PowerDown as a non-profit had not prepared me for running a for-profit operation.
Initially, my expenses were out of whack because my rent was too high, my company costs for the website were out of control, and my traveling had taken its toll on my wallet. So I downsized my apartment, cut back on all expenses, even switching to a free hosting service for my website, and stopped traveling. Still though, I could not see a light at the end of the tunnel. I did not have enough income to profit because any money I made still went back into my business.
So I reached out to Brad, President of Commercial Lending X, for insight as to how to survive the recession. Brad is particularly inspirational for me because he is a personal finance guru who has somehow thrived with his new business in the recession. However, Brad had rather unorthodox advice for me regarding my financial survival.
- Cut back from the start. And if you have already started your company, begin cutting back today
- Dip into your savings or take out a loan that you can repay
- Only buy things that make your business run long-term. Keep the lights on, get the Internet, have a computer. Avoid items with short-term or expiration dates
- Get cheaper rent, a cheaper car, and secondhand furniture and technology
- Learn from every mistake that costs you money
From Brad’s advice, I was able to eliminate all unnecessary spending and even reduce my most expensive costs. His main advice was that personal finance for an entrepreneur is always in flux, meaning that because you are tightening your belt one day or having an abundance of discretional income at times, that does not mean it will last. This is the risk of an entrepreneur, but it is also our advantage. “Entrepreneurs have the advantage of not only determining their own worth, but in deciding how much they want to pay for it.”
Brad has a fascinating ability to translate complex financial problems into easy-to-understand solutions. This is due to the fact that he had to spend an enormous amount of time justifying his new business in the face of economic downturn in his market.
The commercial lending industry is difficult to stand-out in, but Brad’s business model has differentiated itself by focusing on a specific target market. With this niche in mind, Brad launched Commercial Lending X as a response to the recession. Many of his peers thought starting a loan review and consulting business was counterintuitive, but he knew that he was operating where other companies would not even dare.
“I worked in commercial lending at local banks for over 12 years as a Commercial Lender, Credit Manager, Bank President, Credit Department Manager, and Vice President of Commercial Lending. So I dealt with and managed every aspect of commercial lending, inside-out.”
Brad’s true genius was having expert knowledge of his field, to the point where he could anticipate changes months, if not years, in advance. Therefore, as the months crept closer to the recession, he had prepared himself to potentially lose his job. During this time, he spoke frequently with a professional career coach and began to flesh out the plan for his own business. The coach encouraged him to pursue the company by initially acting as an independent consultant.
Through this consulting experience, Brad learned quickly that most entrepreneurs were not financially savvy. So he began selling his services to entrepreneurs as a chief financial officer and debt placement consultant. What this allowed Brad to do was handle all of his clients’ finances so that they could carry on running their businesses.
Soon enough, Brad was approached by local banks to help them with credit management and stricter regulatory compliance. This quickly became another facet of his business as Brad saw a niche in the banking industry to provide loan underwriting, loan review, portfolio valuation services, and other commercial loan portfolio services.
Within six months, Brad’s business began focusing entirely on local banks, specializing in working with struggling banks that were burned by commercial loans. These banks were small, so they could not afford to pay accounting firms for the type of loan review consulting Brad could provide. Eventually, Brad’s business was so successful that he expanded nationwide.
“Because I gave loans and approved them, I had the experience from both sides of lending. So I can solve any lending issues and foresee any potential problems so these banks will not make the same mistakes in their credit approval processes.” In other words, Brad has found his niche in working with several small banks, instead of a few large financial institutions.
He also told me something fascinating about his business model: he engages contractors to work with him to keep his costs low, which allows him to provide expert service at a fraction of the cost of competitors. But not only is he able to undercut his competition, he became a success of his own design because Commercial Lending X is the first of its kind in the loan review industry.
“When all the others grabbed a life boat, I grabbed a snorkle.”
Brad is an inspiration to me because he can make any business work, despite their financial circumstances. He has certainly helped me thrive any time I had financial problems (of which they were plenty). In a way, he has been a dream-maker for me because all of his advice has culminated into one theme: “the only way to make money is to have money.”
His mantra is “never spend a dime unless you have to.” And he supports this by not only spending money that he has, but in increasing his savings any way he can. That way, when he had a nest egg from his savings, he took the risk out of changing careers. “I was not afraid to try something new because I had the financial leeway to do it.”
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