We thought about the advice we would seek in our own lives and realized that — while we would likely research those subject-matter expert opinions — we also would seek the counsel of our family and friends who have been through similar experiences. Would they, we wondered, finance their business the same way if given a chance to go back in time with the knowledge they’ve acquired? Why or why not? So, we reached out to several everyday working professionals and asked them to share a little friendly advice. Here, we let you in how four local businesses financed their startups.

SMALL BUSINESS LOAN

7 Seas Brewing Company

When Mike Runion and his business partner, Travis Guterson, opened 7 Seas Brewing in 2009, they did so with the aid of angel investments, Runion said. Much of their original funding sources disappeared in the aftermath of the stock market crash of 2008, driving them to pull together a small amount of seed money instead.

“It was really just enough to buy some equipment that we found for the right price,” Runion said. “And then it took one more small amount of angel investment seed money to get things off the ground.”

But three years after opening its first location in Gig Harbor, the brewery was looking to expand, moving into a larger taproom in 2012. It was then, with the company’s growth, that 7 Seas Brewing needed additional funding to support the process and worked with Heritage Bank to secure an SBA (Small Business Administration) loan.

“For a relatively new business, banks like to work with the SBA because it lowers their risk,” Runion explained. “So, the SBA gets a certain amount of the loan. That also means, though, that interest rates are higher for the business, which surprised me.”

Now more than a decade into business — with two breweries and tap rooms and $11 million in 16-ounce pints brewed and sold — Runion and Guterson have paid off one of their SBA loans and are wrapping up another. Runion said that the process was great for helping 7 Seas get to where it is now, but after a certain point in a business’ lifespan, borrowing money at such a high interest rate is no longer worth it.

As for the entrepreneur’s general advice on building a business from the ground up?

“Success is gauged in many more ways than money,” Runion said. “Be humble, improve yourself, be kind, and strive for balance. Learn from those around you. Be patient and breathe.” — ZB

Pro: “SBA loans do help small businesses grow — they serve a purpose when a company is very young. At that stage, there are only so many funding opportunities, and it can be a great stepping-stone. They also allow you to retain ownership and retain all your equity, which can be really important when a company is young and growing.”

Con: “SBA loans typically carry a higher interest rate than conventional loans. There are also covenants: some things that restrict some maneuverability of the company and its structure, and its finances. It’s hard to understand all of those details going in because small business owners juggle so many things.”


PERSONAL SAVINGS

Burns Violin

As a luthier — or violin maker — Mike Burns had a wealth of experience to bring to the fledgling violin shop he was attempting to launch in 2017. In addition to playing the instrument, Burns spent his early career learning from an amateur builder. From there, Burns went on to study his art at Minnesota State College before coming back to the Pacific Northwest to work in a professional violin shop.

What Burns’ entrepreneurial endeavor lacked, however, was funding.

That’s why, after not being able to get a loan to jumpstart his business, Burns consulted a loan officer.

“The loan officer said that (because I didn’t have a) track record, and (because) I wasn’t seeking enough money, they weren’t able to help me,” Burns remembered.

The officer recommended that Burns use credit cards to help fund any startup expenses. These credit cards would help cover any expenses that his savings couldn’t cover.

This led to Burns getting two credit cards with no interest for the first 21 months. He also went to his credit union to get a secured line of credit by placing some of his valuables on a loan if all else failed. The credit cards didn’t fund the entirety of Burns Violins, however: “I tapped all my savings,” Burns said.

Today, the business is doing well, and Burns was able to pay off the credit cards he opened within the interest-free window.

Now, two and a half years after being turned down for a small business loan, Burns has been able to turn his business into a success, beginning with the money in his own bank account. “It’s been a slow ramp-up, but in many ways, I am thankful for that, and things are still looking promising,” he said. He also mentioned that the process is stressful and compares it to walking a tightrope. Overall, he said that the stress of the process has been worth it. — JW

PRO: “The bonus of having very limited funding available is the precision with which you control your cash flow and prevent overspending or making unnecessary purchases.”

CON: “It’s a bit stressful and time-consuming walking the tightrope and it slows your growth rate.”


CASH-IN INVESTMENTS

Foster’s Creative

Using the arts to connect people always has been the passion of Bryson Foster, who founded the company Foster’s Creative with his wife, Kristin Foster, in 2015. Bryson currently wears the hat of creative director for the video-production company, but his position used to be much more all-inclusive.

His financial philosophy was that he never wanted to be in debt for anything other than his house. So, when the company was in its startup phase, Bryson and Kristin were doing the jobs of seven or more people. They made a choice not to borrow, and it wasn’t until recently that they decided to refinance their house in order to have a safety net for emergencies (while staying true to their one source of debt).

“We have an interesting scenario,” Bryson said, “because we’ve been in business for five years, and we’ve never used a loan and never used credit.”

The safety net of the income from refinancing their home has allowed them to continue to scale up the size of the company with minimized risk, but Bryson said the majority of their capital comes from the dedicated work they put into current contracts.

He refers to this as “doing it the hard way,” but said he was able to fund his business without living beyond his means, and, despite the challenges, would recommend this method to other businesses that have the ability to do so. — MM

PRO: “There’s a lot of pros to going this route: It forces you to make fiscally responsible decisions, scale with your team as you hire, build really awesome culture where everybody has skin in the game, forces sales to be aggressive, and makes you over deliver for clients because your high-quality content is what’s going to get referrals.”

CON: “It’s a lot harder. The amount of labor that we put in — you have to learn to hit the eject button. I was working too many jobs for too long, and it took a toll on my health physically and mentally. I probably went a little bit too hard a little bit too long in that phase.”


PERSONAL SAVINGS

Jan Parker Cookery

Jan Parker grew up in a military family and moved all over the world as a young girl. At 11, she discovered cooking as a hobby — inspired by her mother’s talent in cooking all family meals from scratch and her father’s ability to make a fabulous meal from random ingredients. After a decade-long career in banking, Parker turned back to cooking in 2012 when her husband was deployed, and she never looked back. In October 2017, she opened Jan Parker Cookery, a mobile restaurant that serves fresh Filipino food at local markets and offers cooking classes.

“While living in Germany two and a half years ago, I opened a home-based business on an Army post and also created culinary programming with the USO Wiesbaden,” Parker said. “I was able to gain confidence by selling food out of our home and felt content by being able to connect with my customers. It was so exhilarating and rewarding.”

After moving back to Tacoma, Parker expanded to vending at farmers markets in the South Sound at her friend’s suggestion. She had been saving money from different revenue outlets, she said, which allowed her to cover the cost of business licensing, market fees, and equipment.

“The remainder of the money came from our personal funds,” she said. “It took about three to five months to save, but it turned out being beneficial because I had the chance to critically think about different aspects of entering the market.” — ZB

PRO: “This approach was the most reasonable, because I did not want to incur any debt. Being a mobile kitchen and paying a stall fee at the Proctor & Broadway Farmer’s Market or the Tacoma Night Market requires less of an initial investment to start a business than opening up a space in a commercial building.”

CON: “To be completely candid, my husband is the main wage earner, so if I was single and had no other income to rely on … working a full-time job and saving money would be my alternative approach.”