Ice cream sales slow down in winter, in spite of kids’ wishes everywhere. But, small businesses like Cold Stone Creamery still have to reach their bottom lines, pay their employees, and purchase large equipment when it needs to be replaced. So, Jimmy Barreau, owner of a Cold Stone Creamery franchise location in Union, New Jersey, reached out to TD Bank Small Business Advisory for some advice. What he found was much more than tips on staying afloat during the tough seasons — he found a profitable and meaningful business relationship.
It’s a difficult reality that nearly 1 in 5 small businesses fail within the first year, and half fail after five years — some due to geography, and some due to the industry they are in. But others fail because of their inability to secure finances, the Chamber of Commerce reports. And it’s those businesses that TD Bank’s Small Business initiatives are out to help.
Opening the doors to the future of his small business
For Jimmy, walking into a TD Bank was a vital step into not only his business’s survival, but expansion.
“I knew of TD Bank since it’s in different communities and I knew I wanted to build a relationship with a bank that was recognized,” he says. He knew he was in the right place starting with the teller and Store Manager’s reception when he walked in to get started. “They are always asking, ‘How’s the business going?” After becoming more established for a few years, he was ready to establish a relationship. He ended up at the desk of Marie Apollo, Small Business Specialist. “This is what I was hoping for. This is what I needed. This was a saving grace,” he says.
Marie listened to Jimmy’s business story and situation, and started recommending products, services, and pathways to help him advance. “If you aren’t looking to grow and expand, what are you really doing this for? You might as well go look for a nine-to-five,” Jimmy says.
A listening ear and a path forward
Marie taught Jimmy about multiple solutions to his concerns about payroll and day to day operations. Jimmy realized that there was some business restructuring he could do to optimize efficiency and capital. “Though his business is very successful, it’s still a business that can have seasonal working capital [variations],” Marie says. “So being able to access capital on an ongoing basis is critical.” Luckily, Jimmy says he doesn’t have to close down in the winter to make it like some other stores, though sales decline significantly in the winter across many other ice cream stores.
Marie and Jimmy considered multiple options, and landed on helping Jimmy apply for a small business line of credit. “I was able to walk through the whole process, assist him with paperwork, and meet some of the challenges that he was having to be able to provide access to his working capital,” she says. Specifically, it can be hard for small businesses to ensure they have all of their paperwork, finances, and application materials in order, which is sometimes a tall task, but worth it in the end.
“It’s how your business is structured — you think you’re doing stuff right, until you present it in front of people who can call out where your business structure is unorthodox,” Jimmy says. This structure was preventing a smooth path toward approval, which Marie was ready to help with. “She put my mind at ease.”
“The application process can be tricky, especially if it's your very first time applying,” Marie says. In addition to navigating the process, small business bankers can help you identify multiple ways of accessing capital. In this case, the line of credit provides working capital, but you are only paying interest on the portion you are using, Marie adds. “It does provide a lot of flexibility.”
Expansion and progress as a result of collaboration
“I can sleep at night — as a business owner you have capital at your disposal, and now it’s about how you utilize it to help your business.” With his new line of credit, he’s “armed” to grow he says, and got approved by his corporate brand to add another brand, Planet Smoothie, and established a mobile truck as well. That “security” means he can rest easy knowing that his customers, employees, and his personal investment in the business are in good hands.
Jimmy says he has some advice for other small business owners — “A banker is very important — it seems cliche, but the information they have will help if they want to really understand you. Demand the banker give you the relationship you deserve, because you’re the customer."
Marie adds that business owners shouldn’t wait until they are in a tough position to apply for a business loan. “It’s better to plan ahead.” Because Jimmy did, he’s waiting on those hot summer months in a much more comfortable position.
Expert tips on preparing to apply for a small business loan.
Marie shares some tips that have helped Jimmy, and others, be set up to begin the application process. Here’s what she wants small business owners to know:
- Educate yourself: Do your research to learn the basics of your options as a small business
- Build and maintain your credit score: Use credit cards, and learn how to check your credit score report for accuracy
- Organize necessary paperwork: Determine the necessary information you will need readily available when you start applying to prevent being overwhelmed during the process
- Learn more about your taxes and bookkeeping methods: Make sure these are up to date, and you are familiar with your own systems
- Get your finances in order: Consider how much you might want to borrow and what you can afford
- Work with a trusted banker: You don’t have to have all the answers ahead of time
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