How This Entrepreneur Used Creative Financing to Purchase His Business

How This Entrepreneur Used Creative Financing to Purchase His Business

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Eagan Heath is the owner of Splendid Beast, an e-commerce store that sells custom oil paintings of pets. Customers can go online and choose from customizable templates or work with the company to create an original masterpiece. A team of graphic designers and painters work together to create each pet portrait, which can be framed or gallery wrapped.

Starting Out

Why did you start your business?

I purchased this business from an old roommate. I have another business where I do digital marketing, specializing in SEO and running Facebook ads. I help local businesses get found online. When my friend was thinking about shutting down this business, I said, “No, you should sell it to me to take over.” He is a graphic designer with more of an art inclination. I know more of the digital marketing side, so I knew I could grow it that way and hire graphic designers.

How did you get the money to purchase the business?

In real estate, there’s a thing called “owner will carry,” which means that instead of getting a mortgage, you give monthly payments to the person who owned the house. I did something like that. I gave my roommate a down payment that I had from personal savings. Now, I make monthly payments to him for a set amount of time with revenue and profit from the business. It’s like a payout or a buyout. It’s a good option for people who are ready to sell a business but who can’t find someone with a big chunk of change. It’s also a good option for buyers, because there’s not always financing available.

Managing the Company

How do you manage cash flow in the business?

I think I can do a lot better on that. I’ve recently been looking at something called “profit burst.” You set up separate accounts for money to pay yourself, money for taxes, profit for a rainy day … I’m looking at implementing that hopefully by the end of the year.

What’s the most challenging thing about running the company?

I’m trying to think at a high level about how to grow it and how to make it the best brand possible. It’s hard to get myself out of the day-to-day. Now, I’m not in the weeds on spreadsheets. But, there is a lot of project management to get the paintings completed, because there are a lot of steps involved. I’ve hired people to help me. It’s been a challenge on the cash flow side, but it’s been a huge benefit.

What’s the most rewarding thing about running the company?

We’ve been working with a number of our painters for quite a while. They are incredible. Seeing the finished projects and the fact that they’re custom, each one is really unique. I’m always excited to see them and to post them for other people to see.

What I’ve Learned

What’s the biggest mistake you made when you were starting out?

There’s always an issue of difficult customers. There are sometimes people with unreasonable expectations. We try to be reasonable and work with people. We do a mockup to the customer and then we will do touchups on the final painting. We’ve gone back and forth with people five times. Sometimes people are yelling at us via email in all caps. If people are being unreasonable, we will refund them. We recently had a customer who ordered two paintings and was totally apoplectic about how they turned out. We redid them twice each, which was six paintings. She totally hated them and insulted our intelligence, so we just gave her her money back and said, “It’s not a good fit.” You need to have standards for your staff and for yourself when it comes to difficult customers.

What’s the smartest thing you did when you were starting out?

I’m a big believer in measuring as much as possible. I really try to dig into our digital marketing analytics. We run Facebook and Google ads. I set up all the tracking to see which ones get us results, and then I double down on those. It’s important to know which of your investments is paying off.

What advice would you give to a new entrepreneur?

Get to your first sale as soon as you can, even if it’s small. You don’t want to work on something for months and months or years and years and then see if people are willing to buy. You want to get market feedback with people handing you money as soon as possible, because that will give you more ideas to improve and ultimately new products and services that can make you more money.

Future Plans

What’s next for Splendid Beast?

Instagram is really huge. Since we’re a visual company, I’m really looking at growing our Instagram followers. We’re looking to get to the 10,000+ follower mark, because when you do that, you can do some unique things with advertising. There’s a whole world of people who are posting Instagram accounts for their pets. I really think that can be a new channel for us.

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About the Author — Ashley Sweren is a freelance marketing writer and editor. She owns her own small business, Firework Writing (http://www.fireworkwritingonline.com/), located in San Jose, California.

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