Lakewood OH
Mostly clear
65°F
 

Local startups think outside the box for funding

By Nicole Hennessy

Westshore

Steve Meka’s shop, STEM Handmade Soap, is a small boutique on Madison Avenue. Newly opened the first week of October, one wall is filled with soap-making equipment, and on the others, the finished product, the fragrance overwhelming until it becomes unnoticeable.

Meka grew his business slowly, developing recipes and eventually making his own soap in his basement for about five years, keeping his full-time job, which he still has.

Soon, he began selling his products at farmers markets and taking orders until he could buy his new space, which includes an apartment, rented out to cover his costs.

“I didn’t want to rent a place because I didn’t know if the business could support itself, so I started looking for something I could purchase,” he said.  “It’s a business model that supports itself.”

While slow or organic growth is a great option for entrepreneurs with both patience and, usually, resources, for those looking to jump right in, loans are likely a necessity.

But banks are notoriously hesitant to invest in startup businesses, so entrepreneurs must think outside the box, seeking out nonprofits, foundations or private lenders.

Birdtown Crossfit, another east-end Lakewood startup, opted for a more direct, but nontraditional route to a grand opening.

Utilizing the courses and loan program offered through Bad Girl Ventures (BGV), a local nonprofit with branches in Cleveland, Columbus and Cincinnati that provides women-owned businesses or ideas with tools to achieve their goals, owners Tricia Tortoreti and Jillian Neimeister completed the program in the fall of 2012, opening their gym soon after.

For now, both women also keep full-time jobs. The trick, Tortoreti says, is learning to communicate well and not sleeping.

“We want to open a gym, now we need money,” she remembers her and Neimeister thinking, asking each other the inevitable next question: “How do we get money?”

That’s when they found BGV and signed up for its nine-week fall business development course, learning how to pitch business ideas to potential investors and formulate a plan to reach their goal.

Having been in business for almost a year now, Tortoreti said, through the program, she and Neimeister not only formulated a logical business plan, but networked with various professionals integral to Birdtown Crossfit’s continued success.

“Our lawyer, our accountant, our design firm, our media people,” she explained, “they are all contacts that we found through Bad Girl Ventures.”

Reka Barabas, director of BGV Cleveland, says it’s important to provide female business owners with separate resources because of several differences between them and male business owners.

“Women, very often, have a hard time admitting that they started a business because they want to make money. They usually have a large social conscience and they immediately want to incorporate giving back and philanthropy into their businesses,” she explained.

“The other difference is the unique situation that women often are in, in their families. Often, women are the caregivers and life can get in the way of their business more easily than for men.”

Barabas also pointed out that the role of women as caregivers often disqualifies them from obtaining traditional bank loans because many of them lack the consistent work history lenders are looking for.

Jackie McNamara, who is currently going through the BGV program in order to finance and grow her startup, Spare Thyme, which provides clients with customized personal grocery shopping, says her idea resulted from numerous friends, clients and acquaintances jokingly asking the young nutritionist to do their shopping for them.

Also, McNamara began noticing that as clients learned to live healthier lifestyles, they no longer had a use for her services, and if they remained longtime clients, it meant their lifestyles weren’t improving, “so either way, it didn’t work out for somebody,” she said.

Expecting to be unpaid for about a year, McNamara will have to support the salaries of three full-time employees and work toward a storefront.

Luckily, almost finished with the BGV program, she says one of the most important things she’s taken away is that she feels much more prepared to go into a bank and ask for money.

Though, in the end, even the most prepared entrepreneurs are still taking a risk, which is why Barabas tells clients,“Know what you are willing to lose.”

Meka, celebrating the official opening of STEM, is still taking things slow despite achieving the milestone of opening a storefront. Until business picks up or demands for his product increase, he plans to open the shop a few days each week, making soap on the weekends.

Looking forward to Lakewood’s increasing focus on “branding” Birdtown through additions like planned wrought-iron birds throughout the business portion of the neighborhood, he said he’s excited to be part of the growth there, adding, “This can be a vibrant neighborhood.”

 

SIDE BAR: More information on Bad Girl Ventures can be found at badgirlventures.com, or by calling 216-759-4575.

 

 

Archives