Due Diligence - July's Refrain

I’m not so great at the whole work nonstop thing. Checklists and to-do lists keep me productive when I don’t have solid deadlines—sometimes. This is problematic, turns out, when working from home. It is also problematic when I should be working on pro-formas for the business. Pro-formas are the basic finances for the business. Costs, expenses, and revenue. Blech. Boring. I’d much rather pin stuff to my Pinterest board for the café (check it out! https://pinterest.com/kalynmc/trade-cafe-in-pictures/). See? Isn’t that cool and fun and exciting?! You can actually visualize the business! Unlike the numbers, which are the business. Or the heart of it anyway.

But I have been doing research. Real research. The kind involving numbers and talking to people who are older and smarter. My brother and I have had a two-hour meeting with a CPA, a four-hour meeting with the OKSBDC (Oklahoma Small Business Development Center), and a two-hour meeting with a host of lawyers. We’re getting their counsel for free in exchange for every intern in the building sitting in on our meeting. There were eight people in on the meeting, only one of whom will be our lawyer. It was similar, I think, to be operated on in a medical school by a doctor with a host of med students watching on in the amphitheatre classroom.

The only new information we got from the meeting was that we needed to slow down and adjust our expectations. My brother and I were thinking we’d have the café up and running by October. That’s so far away. An entire season. Well, not long enough apparently. Our legal counsel suggested we begin changing our business plan to reflect a January start date—at the absolute soonest.

That deflated my balloon. Motivation crashed. The reason why it affected me so negatively, I think, is because I’m unemployed. I really, truly thought I would be employed sooner than that. So now I have to get a part-time job on top of my other pursuits: freelance editing, crafting, gift wrapping, and baking. I’m also doing some handiwork for the ‘rents. How am I supposed to get anything done on my non-paying  (boring) business planning when I’m doing all that?

My father, God bless him, gave my brother and me what I’m sure he would consider a pep talk or paternal advice. It came out more of a browbeating on—you guessed it—diligence.

Grant and I have been hearing it a lot lately. Our CPA mentioned the bankers will check for due diligence on our financial projections. Did we take every possible expense, even the unexpected ones, into consideration? Are our numbers conservative enough? And then again, the SBDC said to look at every piece of the plan and pro-forma in 360 degrees, doing our due diligence to ensure a complete and sound business plan.

Diligence was again brought up by our lawyer. “Be diligent with your numbers.” Hearing that was super annoying because we’d made sure they knew before we came in that our numbers were nowhere near complete. We only had a preliminary business plan that focused on concept. Of course the plan needed more research and numbers. Thanks for repeating that over and over again for two hours. (But I’m not complaining because it’s free advice!) And really, what advice can they give us until the business plan is complete, even if incorrectly complete? They have to have something before they can make corrections.

So all that to say, diligence has been on the tip of everyone’s tongue. And I have gotten an earful about it. Which my father added to this afternoon. His message, in a nutshell, was to be diligent in every single thing…otherwise, why would we think that we would be diligent with the business? If I am going to Tulsa or watching movies rather than being diligent about…other undetermined things…then I’ll obviously just leave work all the time once the café is open to go see movies or go to Tulsa. Because that’s how life is. And then we’ll fail.

My parents are the most supportive people in the world while simultaneously saying everything they can to discourage us from starting up a business. It’s pretty frustrating. I can’t be angry with them, because through their connections and help, we’re getting much further along in the business plan more quickly than we ever could on our own. They do have really good advice. But mixed in is all these backhanded comments that convey to us (whether my parents believe it to convey this message or not) that we’re incompetent idiots destined to fail.

Is it any wonder that I’m feeling unmotivated? Up until now, I’ve been sending my brother action items, with a to-do list for both of us, pretty much every other day. Now he’s the one calling me and making sure I’m doing my end of things. An unhappy reversal. I’m supposed to be the annoying one in this relationship!

The number of things I need to do is overwhelming. I have a set of three edits to complete as soon as possible because I need money in a bad, desperate sort of way. Slides to edit for a relative (Powerpoint presentation). A paper to edit for a friend. Call OG&E for utility information for our pro-forma. Call two suppliers for pricing. Talk to the potential baker about equipment so we can price it—again for the pro-formas. A baby shower I’m hosting at the end of the month. Apply to coffee houses/cafes so I can learn on someone else’s dime and get some industry experience. Decide on a theme for the indie crafters thing in Tulsa in August. Get with the two friends who are renting the booth with me to do the crafts. Populate Etsy page so that it can generate money. Complete pro-formas, meet with cpa and lawyers and SBDC again, pitch to banks until get one that bites, find a private investor(s), find suppliers for more than just coffee beans (furniture, cups, to-go cups, equipment, kitchen supplies, etc.,), find a place to lease/buy, and on and on and on.

There’s a lot to be diligent about. Of that my father is correct. It’s hard to stay motivated, though, when the payoff is so far away. Patience has never been my virtue. And the payoff is uncertain. It feels as if the further away we are from starting the business, the more unlikely it is it will actually start. And that’s what is terrifying me and sapping my motivation. Suck. I’m trying to rally this weekend, and tomorrow is the beginning of a new, productive week!

P.S. If you’re super good friends with an architect or a contractor that would talk to me for free as a kind of favor or for a lark, that would be super duper awesome. Because somehow I graduated OSU without knowing one. Or if you have good friends that graduated from OSU’s HRAD program and know the ins and outs of suppliers, that would also be helpful. 

Entrepreneurial Spirit – It Takes a Charismatic

Blarg. ß This is how I feel. My brain has emitted this noise—albeit internally—ever since my brother and I began writing the business plan for a coffee house that might eventually one day be a reality. I can feel my forehead growing wrinkles. I say that because I haven’t been able, literally physically capable, of unknotting those muscles. My expression is one of perpetual perplexity. It doesn't help that I’ve misplaced my reading glasses.

Writing a business plan, starting a business, is not only scary, it’s humbling. Because you realize how dumb you are. And boy, am I dumb. I haven’t used the dictionary this much since I took geology in college. White boxing. Build out. Financial projections. Demographics. Market analysis. Triple net lease. SBA. Term sheets. It’s terrifying diving into something that is so financially threatening when you don’t know anything.

It’s as if you’re staring out across a lake and see an island you’d like to swim to. But there is no nice, easy, soft, sandy beach to ease into the water. The lake is surrounded by cliffs. Sheer drop offs. The water is full of terrors. And you don’t know how to swim.

Dotting the cliff tops are tents. The labyrinthine tent hands out free lifejackets, but you find they have heavy weights attached. The colorfully striped “professional” tents give expensive verbal and written lessons on how to swim, but no practical swimming lessons in water are to be had anywhere. And in the other tents—some grand and impressive, some less so, and some lean and drab—you find swimmers, folk who have taken the plunge and survived to tell the tale. These experienced swimmers will sometimes share tips they learned from their experiences, but some do not. Some are more helpful than others. And some speak so much jargon you can’t glean a single inkling from the conversation.

Since the dive and swim are so perilous, you feel you need as many lessons and as much equipment and as much information as these tents have to give you. But you only have so much money. The advice can only go so far. And to frustrate you even further, the counsel you receive is contradictory and vague. There isn’t an end to the tents. You’ll never feel fully prepared to dive in, and you’ll never run out of tents to visit.

To conclude, right now I feel overwhelmed, stupid, and utterly out of my depth. And repetitive. I feel rather redundant as well. There’s so much I don’t know, and there’s so much information to be had, learned, assimilated, and forgotten.

Tomorrow is the Fourth of July, and for some part of it I will be revising the front page of our business plan to focus on concept so that we can move forward in our bid for a sweet location for the coffee house. A not-for-profit association bought the building we hope to lease from them. So board approval is involved. By the time we get an interview with the big britches, we’ll have talked to bankers and have a firmer idea of how we’re going to fund this song and dance. That’s when we’ll have a proposal that focuses on finances. (Oh here’s a laugh. When I asked our accountant when we should get the loan, before or after signing the lease, which order do they go in? He answered, well ideally simultaneously. I had no response except to knit my brow together.)