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13: How to Grow a Business Through Networking and Short-Term Loans with Artie Berne

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Show Quote

“Every problem is a gift. Without problems, we would not grow.”

-John Rockefeller Jr.

Resources

ArTex Funding– Learn more about Artie’s boutique private debt-funding company that offers creative and flexible finance programs to position your company for success.

Never Eat Alone — A book Artie Berne highly recommends for thinking about how to build your network.

Smart Calling by Art Sobczak — A book recommended by Artie Berne for building and maintaining client relationships on the phone and beyond. 

Precision Bookkeeping — A bookkeeping service that can help you with QuickBooks online as you prepare your loan documents.

Key Takeaways 

1) Entrepreneurs can use performance metrics to track and measure their progress. When you’re an entrepreneur, you must be highly motivated and disciplined.

2) Personal relationship building still drives sales. Attend regular networking events, make phone calls, and follow up when you say you will. 

3) An alternative working capital asset-based lender can help entrepreneurs grow their business with short-term loans if they’ve been denied by traditional funding sources.

Show Notes

**Click the timestamp to jump directly to that point in the episode.

[2:17] – How did Artie’s entrepreneurial journey begin?

  • He spent 25 years in corporate America.
  • A neighbor introduced him to the world of alternative funding.

[4:30]  What was Artie’s role in those first 25 years?

  • He started as an application engineer.
  • Then he became a sales manager and eventually became a worldwide Vice President of Sales.

[6:28]  What advice would he give others that are looking to make the same transition from employee to entrepreneur?

  • He read a lot of sales books.
  • Learn to follow up.
  • The things he learned in corporate America about setting goals and tracking them kept him on task when he became an entrepreneur.
  • You have to have internal fortitude and internal discipline.
  • You have to have a system and you have to be really motivated.
  • It helps to have a cash reserve when starting out as an entrepreneur.

[10:55]  What other skills did he take from corporate America that helped him as an entrepreneur?

  • He learned to use databases to track customers and follow up.
  • He sets reminders in his CRM to help maintain relationships.
  • Every night he fills up one sheet of a legal pad with the names of people he is going to call when he sits down at his desk at 8 a.m. the next morning.
  • He works phones and emails from 8 am-12 pm every day.
  • He sees 2-3 people every afternoon.

[14:50]  How did he become a super-connector? What does he classify as a super-connector?

  • He started to go to every lunch and breakfast and happy hour.
  • He always asked other people where they would network and asked if he could go with them.
  • He has been going to three networking events every week for the past seven years.

[17:00]  Does network marketing still work?

  • When you go to a big networking event your goal is really just to meet one person.
  • If you have an interesting enough conversation, set up the followup meeting then and there.
  • Personal relationship building still drives sales.
  • Good selling is about what you can do for them.
  • If you go in with a focus on yourself, people at networking events will be turned off.
  • He created a networking buddies list.
  • Your networking becomes more productive when you have networking buddies and already know a few people at the event.

[23:26]  Learn more about ArTex Funding and the services they provide.

  • They’re an alternative working capital asset-based lender.
  • An alternative to a traditional bank.
  • Several times he has sent clients back to the banks after he has made them bigger, stronger, and better.
  • He’s a single collateral asset-based lender.
  • With any single corporate asset, he can get a company a loan.
  • His rates go from 7%-37%. They can do loans anywhere from one month to four years.
  • His goal is to get you back to the bank.

[25:18]  Would Art suggest that a listener should seek traditional financing first?

  • Try multiple national banks first. If you get turned down by the banks, then go to him.
  • You’ll use an asset as collateral for these short-term loans.
  • Get your personal financials ready. Put together a loan package. If they think you’re bankable, they’ll send you to the bank.
  • This is not pre-revenue funding. But they’ve funded small companies post-revenue.
  • They often help young, growing companies or established businesses that are slightly distressed.

[30:08]  Art provides case studies of how he has helped other businesses succeed.

  • There was a small prisoner exchange company they helped grow from $100k revenue to about $4m in revenue.
  • They’re closing on a nursery that needs to build out their land.
  • They helped a honey manufacturer fulfill a large purchase order that has skyrocketed their business.

[32:49]  How long is a typical loan start to finish?

  • Occasionally, someone needs a turnaround in a week to make payroll.
  • Mostly he needs 3-5 weeks but he has done two-day funding and five-day funding. 

[33:52]  What type of financials should listeners get together if they’re interested in obtaining funding?

  • You’ll need a personal financial statement and one-year tax return. Then for your business, you’ll need a P&L, the balance sheet, AR aging, and AP aging.
  • Each of his funding programs has a different document requirement.
  • Banks have the cheapest funding but they want the longest list of documents.
  • Make sure you have good books and accounting if you need a loan with a quick turnaround.

[36:25]  Where does the money come from?

  • It’s all private equity money.
  • He has billion-dollar funds that he has access to that he uses for financing.

[37:05]  What’s the average interest rate the business owner would pay?

  • The average is 10-12%. He is always more expensive than the bank.

[38:01]  What are some of the common mistakes that Artie sees business owners making?

  • They don’t account for working capital.
  • From Day 1 start off with knowing your numbers, operations, and procedure.
  • Many people don’t have a realistic pricing strategy.
  • Others are over-leveraged.

[41:04]  How can listeners reach Artie?

[43:02]  How does Artie keep his edge?

  • He works out. He likes to lift weights and run. He also does full-contact martial arts.

[44:41]  Who has had the biggest impact on his life?

  • His father. He emphasized that every problem can be solved by working through it.

[46:11]  What book would he recommend to entrepreneurs?

[47:19]  What does Artie do in his free time?

  • He likes to get out to meet people and socialize.

[48:05]  What does financial freedom mean to Artie?

  • Being debt-free. Paying your bills first, then saving. He saves half and spends half. He could stop working at any time if he wanted to.

[50:32]  How does he want to be remembered?

  • As a happy, fun, diligent, dependable person.

[51:27]  What parting advice would he like to share with listeners?

  • Get out, stay out, and be out. Get to know people and pay it forward.

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