“As An Advisor, He Was Pivotal…”

This week’s blog is from Robert Cable, financial sage, connector of resources, mentor for the aspiring and president of Liquid Capital on St. Simons Island. Read on as Robert shares some time-tested advice suitable for entrepreneurs at every stage.  FYI – – The Creative Coast’s blogspot is Savannah’s sounding board for local thinkers, innovators, wanderers and wonderers. Guest bloggers share their thoughts, opinions and creative noodling from all over the map… 

Justin Henshaw could have been one of those entrepreneurs who came and went. Instead, he is far beyond the struggles of the early days. We’ve all read the stats – “On average 50 percent of new businesses fail in 5 years.” As a former banker I’ve seen a number of businesses fail. One of the most common reasons is insufficient capital. Another is when the business owner isn’t equipped to make good decisions on the company’s behalf. Running a business can be lonely. I’m fortunate; I have two partners in one of my companies, and the other includes a large network of colleagues plus a headquarters office I can turn to for brainstorming or support if I encounter challenges. Research shows that one of the talents of successful entrepreneurs is relationship building. In this Business Journal article, Sangeeta Bharadwaj Badal, senior researcher on Entrepreneurship for Gallup, writes about how successful entrepreneurs use their social ties to access critical resources (financial and non-financial), and use their networks for purposes such as gaining information, pooling expertise, and drawing mutual support, all of which increase the likelihood of a venture’s success. In my experience, increasing the likelihood of success includes having an advisory team of some kind. Maybe it’s a business coach or senior executive who shares your passion for building a company. Maybe it’s a board of non-competing colleagues – people with skills you don’t have – who convene quarterly or you meet monthly one-to-one. In Justin Henshaw’s case, I’ve served as an advisor. First, here is some background. If you reside or work in the southeast, you may know Justin’s first business, Island Sound, a wedding entertainment and DJ company he established in 2008. It is the largest company of its type outside of New York. If you’re a resident or work in the Saint Simons Island area of Georgia, you may recall Coasters, Justin’s second business, a gourmet food truck. He launched it with $50,000 of his own money during his senior year of college. (The idea came out of an entrepreneurship course assignment to develop a business plan.) He eventually sold Coasters to pursue Fuse, a frozen yogurt, Italian gelato and sorbet shop. At the time Justin and I were introduced, he wanted to open a second Fuse location. He needed financing but one bank after another turned him down. Banks weren’t keen on this type of business. But given my experience in banking, I thought I could find a lender who would listen to me – this is where relationship building came into play – and I did. I remember the conversation clearly… “I don’t like yogurt shops,” the Savannah, Georgia lender told me. I replied, “I know you don’t, but hear me out, let me tell you a story…” In time, this banker would listen to Justin, too. Then he financed the launch of the second Fuse. Now, only a year later, Justin has three Fuse locations. Before all of that took place, however, Justin and I worked together to ensure he was prepared to explain his expansion plan to the bank. This is where my role as advisor came into play. We reviewed every issue that would be of interest or concern to the bank, from sales projections (e.g., were they realistic?) to how rapid growth would impact his working capital (e.g., will you be able to serve all your new customers?). Since Fuse became bankable, Justin and I have continued to discuss his business. We talk about equity issues, taxes, and lease negotiations. We analyze numbers. On occasion, I help him make decisions. Justin says I played a pivotal role in Fuse’s growth. Robert Cable President Liquid Capital Corporation If you or a small business owner you know would benefit from a sounding board or mentor, or needs working capital, contact Robert Cable at 912.268.4688 or send an email to rcable@liquidcapitalcorp.com.  Visit Liquid Capital’s website – – www.rcable.liquidcapitalcorp.com – – for more details.]]>