Let’s say you run a cookie business.
It’s a great business, and your customers love it – hell, it’s cookies. You specialize in school fundraising events, and schools and distributors come back to you again and again – the cookies are good, everything sells great at fundraisers, distributors love it and want more of it… in short, everything’s peachy.
And for six months out of every year, you’re making money fast and making cookies even faster. You have to hire two hundred people during the holiday season just to make cookies, and then pies, cobblers, cakerolls, cheesecakes. Then you’re back down to 90 people to get those end-of-year fundraisers in March, April, May.
Then summer comes. The kids go to camp and learn how to tie knots. Any remaining cookies, pies, cakerolls, and cookie dough are thrown away, and your staff goes down to 30.
You see the problem, right? It’s really hard to keep a consistent business going when you make most of your money and pay out most of your payroll for only six months of every year.
That’s the problem that was facing Steve Speed when he came to us for help. Our usual solutions for this problem wouldn’t cut it here. Invoice factoring alone isn’t a solution. So we had to get creative.
Luckily, Steve isn’t your average entrepreneur, and we love getting creative.
A smart cookie, with some crusty edges
“I’m basically just one of those ‘unemployable’ kind of guys,” says Steve Speed, president and co-founder of Blue Ribbon.
I’ve never gotten a job; I’ve just made them.
As Steve stepped across his high school graduation stage, he knew what was coming next: a factory job, working for his dad. But Steve was itchy, restless, not ready to work for someone else, even if that someone was his father.
So he turned down the factory job, and started selling vending machines to businesses around Dallas. If the business couldn’t get a vending machine, he’d sell them snack boxes. Soon, he hired Keith, who had taken the job with his father, but was happy to jump ship and join Steve. It would be the first business of many for the brothers.
Next came a chain of billiards halls with alcohol licenses; later, daycare centers. Steve and Keith had become serial entrepreneurs. But then, the real estate market crashed, and the daycare business felt like a bad fit, and Steve looked for the pivot.
He wanted to start something that he could scale, something that would impact his community. Steve also wanted his next venture to have a low barrier of entry. It had to — he was working with just $1700, borrowed from his mother.
“When I ran my daycare centers, we had used fundraising programs to buy new playground equipment. That kind of stuck in my head,” Steve said.
Steve put together a brochure with six different flavors of cookies and went knocking on daycare administrators’ doors. He sold two programs on the first day, and Blue Ribbon Products was born.
In the early days, Steve and a few reps made sales calls from home, and a small local bakery supplied the dough. In just two months, the bakery couldn’t keep up with demand any more, so Blue Ribbon moved into manufacturing. Keith came in to run the factory operations, and the brothers added cakes, pies, cobblers and popcorn to their product portfolio.
A long courtship, and a killer first date
Now more than 20 years in business, Blue Ribbon grew steadily, managing seasonal cash flow fluctuations with SBA loans granted through their bank. But then, a few years back, they lost one of their largest accounts.
“Up to that time, we’d had some pretty steady growth.” Steve says. “But we took a dip in sales and that meant cash flow issues, especially during our slower season. We had to play a lot of catch-up.”
That’s when the Speed brothers turned to factoring some of their receivables. They found a company that helped, but, says Steve, “It took a lot of time. It was basically transaction by transaction.”
In the meantime, he was introduced to us. “It was about eight months before I called y’all back,” says Steve.
“We were getting real intense into our busy fall season, so I brushed it aside temporarily. What if it wasn’t the right move?” He just wasn’t ready.
They were thinking about backing out, but then Far West Capital came to visit.
“Jamie Roeling came to Dallas and spent some time with us and totally turned us around,” Steve says “ — very unusual. She gave us the comfort level we needed, and she has ever since.”
Jamie, for her part, couldn’t help but be impressed with Steve and what he’s built. She noted how long his employees had worked for him, how committed everyone was to the company. And she noted one key thing – Steve didn’t hold back sharing his story.
“Lots of people would have glossed over the lows and played up the highs, and not been as vulnerable as he was,” Jamie says. “He was down to the last $1,700 in his pocket, trying to figure out “what do I do with this?” and the only thing he knew was how to be an entrepreneur. He just kept at it.”
Numbers aside, dollars aside, at the end of the day we interact with people. It gave me great confidence in his resolve and commitment to success.
The solution wasn’t simple…but the reward was worth it.
There’s many ways Steve could have gotten financing; he could have Googled, pushed a few buttons, and found financing that would have helped for a few months. But what he got with Far West Capital was far beyond that.
“They really worked on trying to understand our business, the mentality of our customers, and the industry — because it is a different industry. It’s not cut and dry. It has a heartbeat to it! They have to understand our pulse. I think they do, very well.”
From day one, Steve says, Far West Capital has been flexible. “They’re learning our seasonality, adapting the model as they learn our cycles.”
As a bonus? Not only has Far West Capital been able to smooth out the revenue flow year-round, they’ve made Blue Ribbon’s workflow much easier. In the busy season, their controller might spend 20 hours a week processing transactions. Now, that time is cut down to 30 minutes a week, saving them time and money.
For us at Far West Capital, watching Steve succeed — after so many ups and downs — is its own reward. As Jamie says:
I think entrepreneurship is about having the courage to fail. If you don’t have those challenges and failures along the way, you’re not dreaming big enough. You’re not stretching far enough.
Ready to unleash the potential of your business? Contact us, and let’s talk about what we can do to help.