Main Street Makers

#3 Clarence Adams: Learning how to use business credit to grow

• Nav • Episode 3

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In this episode, small business owner Clarence Adams shares the importance of focusing on building business credit early on — so you’re not relying solely on personal credit — as well as the value of mentorship. The conversation highlights common struggles faced by small business owners and offers valuable insights for those starting their own businesses.

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Nav Technologies, Inc. (“Nav”) makes no assurances or representations regarding the accuracy or sufficiency of the information included in this podcast. Any claims made regarding Nav or its products are the experience(s) of the individual expressing them. Individual results may vary. This podcast is for educational purposes only, and is not legal or financial advice. If you have questions, consult a trusted professional to help you make specific decisions about your business. The views, opinions, and statements expressed by the host and guests on this podcast are their own and do not necessarily reflect the views or opinions of Nav. 





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I wish I would have known about business credit before I started. Because unfortunately, what happens is you think, okay, I to go get my credit card, got to dive into my savings, my retirement, what have you, to get this thing up and running. Especially if you're needing inventory or paying rent and know, if you have people. I wish I would have known about the business side prior to that way I wouldn't take the hit on my personal. And now you're kind of in a position where you can't qualify for your personal stuff and the business side because of your personal. So that's a major hurdle that I think a lot of us kind of run into if you don't know about the business side prior to. Welcome to Main Street Makers. Today we're joined by Clarence Adams and he's a small business owner and he's graciously agreed to share his story with us. So welcome. Thank you. Glad to be here. Yeah, thank you so much for coming on. So tell us about your business, just sort of your story, like when you started, why you started, how long it's been going on. Okay. I actually have a few, right now I'm working on the icy spot, which is a little Italian ice shop, similar to gelato. Some people say, chained ice, call it what you want, just as long as you come in and taste it and you'll figure it out from there. so it's one, one of a few, like I mentioned, they kind of spawned off of each other. few years back. Me and my wife were renting bounce houses for the kids' birthdays. And once we moved, it was on a consistent basis. So once we moved, we kind of had to find our new bounce house person. But we had an opportunity to buy the bounce house instead. So this sounds like a long story, but it all connects. We ended up buying a few bounce houses. Add the parties, the guests that were coming, the kids' friends that were coming by, they kept asking, where'd you get that? That will be, this party's cool, that type thing. Light bulb went off. It's like, it is available. So I looked into starting the business portion of it. And that was roughly about four and a half, five years ago. So then we started adding things to that, which... the icy spot was actually supposed to be just an add on to the bounce houses. So from that, because we ran into a place that the icy spot could live, you know, brick and mortar, it ended up taking growing legs and, you know, becoming its own thing. So now we have those two things, kind of spawned off and have another, to our own, you know, just trying to get out there and, seeing what sticks and what works and that. So yeah, it's just kind of one idea rolls into the next and, you know, it turns into this. Yeah, is so cool. And I think that's so common with small business owners is like, you try one thing and maybe it doesn't work. And so you try something else and then that works. yeah, you're just sort of like evolving as you go. So that's very cool. And so you're still running the bounce house as well. OK, that's awesome. And so can you tell me a little bit about why you started your business? all right. So going back again, the bounce houses was kind of out of necessity because again, the tradition, I guess, if you want to call it was to throw the parties for the kids, you know, always about entertaining the kids. and literally every single one of them had a bounce house for their, their party, but it was not the same. Like each one was different and it fit their theme of the party. So that's kind of what started that. Then with the Icy Spot, that idea kind of goes back 20 plus years. I'm not trying to age myself, but I wanted to start an Italian ice shop a long time ago and the opportunity finally just kind of showed up. And then again, the opportunity, we happened to be riding around one day, saw an empty spot, checked it out. everything worked out and was like, well, I think we can do this. And lo and behold, the door's open. So truthfully, it's all about opportunity. So, yeah, when you were first starting, how much did it cost to fund your business and how did you fund it? All right. Remember the the the bounce house business was actually by accident. So we actually went in and bought a package. was roughly about 15 grand. But we got almost like it was kind of like a starter pack. It'll give you the. The bounce houses, the tables, chairs, you know, all the stuff that that would house a party. And we were mainly doing it just for the kids and, you know, have. something for them to do because we were renting them so often prior to that. And then when we kept getting the inquiries about because our I noticed that our bounce houses were better than the ones that, you know, the traditional just, you know, something you could probably get from Walmart type thing. So there was a genuine interest. And I was like, you know what, instead of having them sit here, let me go and see about turning it into a business and rent them out. What do I got to do to do that? That's where the research started. So it was roughly about 15 grand and it was just savings and kind of went from there. And then it started making its own money. So just kind of like reinvest back into it. Yeah, so bootstrapping, in other words. Yep, yep. OK, cool. Yeah, I mean, that's the case for so many small business owners. And so were there any surprises that you had while like about launching? I'm sure there were. But any surprises about launching a business that you wish you had known? Yeah, well, yeah, on the business side, like now that you're kind of in it and you're starting to learn a little more doing research, things like that, I wish I would have known about business credit before I started. So unfortunately, what happens is you think, okay, I to go get my credit card, got to dive into my savings, my retirement, what have you, to get this thing up and running, especially if you're needing inventory or... paying rent and you know, if you have people, I wish I would have known about the business side prior to that way I wouldn't take the hit on my personal. And now you're kind of in a position where you can't qualify for your personal stuff and the business side because of your personal. So that's a major hurdle that I think a lot of us kind of run into if you don't know about the business side prior to. Yeah, absolutely. So where did you first hear about business credit? Do you remember? at YouTube University. You know, I think I was searching for something else and it just happened to pop up and then it just kind of go down that rabbit hole and next thing you know, you know how YouTube is it, just kind of throws like type videos at you. So once you start down that rabbit hole, a whole bunch of different videos of the light kind of pop up. Yeah, that makes sense. So before then, you were relying on your personal credit is what you're saying. Okay, yeah. And that's, that's very common. That's definitely very common because yeah, like you said, I think a lot of people just don't know. You don't know what you don't know. it's not taught. mean, you don't find it in school. unless you have a close personal friend that's willing to give you the, you know, inside game, you really almost have to stumble upon it. Your business has been going on for how long again? Icy Spot has been, this is a little over two years. Just Bounce is almost five. And then you found out about business credit when. Last year. Wow. Yeah, I mean, I think that's very common. So have you been taking steps now to work on business credit? Yeah. But again, there's that revolving cycle of I've put everything in my name. So now my credit is kind of weighed down by it. Now that I'm starting to learn about the business side of it and all the benefits that that could pose for you, I'm trying to figure out how to transition. First of all, get qualified for it, but then transfer the business debt from the personal name. so I can free up my personal, then that way I can qualify for the more business. So it's that endless cycle of, know, how do I get out of this in order to get to that? So yeah, that's where I'm at right now. yeah, know that makes perfect sense and you're definitely not alone. Yeah, so have you opened any trade lines, like business trade lines? Yeah, so this is one thing that I've noticed since diving into the business side is there's a lot of gurus out there that will say, hey, open this account, open that account, put this in the business name. You can get a vehicle and purchase all this, that and the other. And it sounds great, but what if your business doesn't fit the mold of what that thing sells? Because what I'm finding is the companies that report to the bureaus, I don't need. And the ones that I use don't report. So it's like that. of speaking my French, but damned if you do, damned if you don't. So that's kind of the, it falls to that side of it. Yeah, absolutely. I mean, we've heard from other customers who have to buy, you know, bulk paper towels that they don't even need just to get the trade line. So, yeah. and you find yourself wiping down things with paper towels that bought paper towels just to get some kind of use out of it, you know? Some of it's unnecessary and now you're building that expense for no reason. Well, I mean, there's obviously a reason for it, but it's like, again, I don't need $100 worth of paper towels when that's not part of my business. You know, I don't need reams of paper and I'm not printing anything. You know, so that's that's kind of the downside of that. Yeah, yeah, I totally understand that. Yeah, there are, you know, I think at NAV we have a list of like 30, it might be more than 30, but net, I might be saying 30 because it's net 30, but 30 something, net 30 accounts that you can sign up for. But again, if you don't need the stuff, then it's, yeah, yeah, I totally understand. What I've also found out too is like even some of the ones that like you would think have the net thirties. You also have to be a bigger business and it's like, geez, okay, so now I got to make a quarter of a million dollars. got to have an 800 credit score. I have to have 7,500 employees before I can qualify for net 30. But at that point, I probably won't need that account. You know, so it's a game and, and there's a learning curve to it. If you don't know, you're swimming in it. But once you cross over, I think that's the golden goose. If you can get to the other side and open up that can of worms, so to speak, and then you can start transferring out of your personal name, I think a lot of people would be in a lot better place. Because the rules are different over there. Yeah, yeah, I totally agree. That's why most experts say like do it from the beginning. But if you don't get that advice, then you know. Yeah, it's just it's a process, but I mean, it's certainly doable. It's just it's a process now. So yeah, that's that's really good advice. And so financial like your financials like. bank accounts, that kind of thing. Was that all sort of managed together with your personal bank accounts or did you have that separate or? In the beginning of the IC spot, which was about two years ago, I think that's when I started getting into and kind of knowing that there was a separation between the business. So with that one, I kind of did it right. The difference is it's even just the, I tried to follow the same process that I did with the bounce houses. Well, the bounce houses is based out of my house. You know, I put in the storage, you know, I drive from here, whatever. when you have a brick and mortar that you have to deal with, that's totally different. So I tried to follow the same process and yeah, it didn't work so much because there was a whole bunch more that I had to do. But at least with the banking and everything like that, I tried to do it right the first time with the ICSplot, which is again, two years ago. Yeah, and so what did you do differently? Well, it had its own bank account, card, that type thing. I tried to make everything, anything that I did with the ICY spot, I tried to put on ICY spot card. I tried to put, know, use the bank account for that and just kind of keep it separate. You know, when I kind of liken it to, you know, I have neighbors that are, you know, they have kids that are coming up that have helped out along the way. So I'm trying to pass on the knowledge. that I've run across. So with them, I've let them know, it's like, hey, open this account, do that, work on your credit, this, that, the other. Again, I tried to pass on the knowledge to them so they don't go through that pitfall that I went through. So you said it's people around you that are trying to open businesses of their own? Right. For example, friend of mine, his son is doing pictures. So I was like, hey, you can actually do something with that because that's, that's a big thing. You should open your account. And he actually called me up one day and was like, Hey, I know that you do invoices. Can you send me the information about that? So, you know, the interest is there. Just the fact that I was kind of throwing some information his way and kind of like now he sees it's relevant, it's needed. So, and that's the thing too, like you gotta be in the right place to be able to receive that information. Because otherwise I probably heard this information years ago and just it wasn't relevant. So I didn't pay attention to it, you know. Yeah, exactly. You don't know what you don't know, but you hear it enough times it's going to stick. So that's great. Yeah, right. Yeah. That's great that you're trying to lessen the burden for other people. We hear that actually a lot. A lot of small business owners are like, we've been through it and we don't want other people to have to go through it exactly how we did. So they try to help others. It's like, I mean, it's one of those things that's like, I just trekked across this big lake and, you know, just getting my knee on the rock. And then I look over and there's a bridge that I could have taken this whole time. Just, you know, skipping my way across and go that way instead, you know, it's that aha moment. So. Yes, yeah, point others to the bridge. Yeah, that's great. And so. So yeah, we've talked a bit about your finances. Let's switch to sort of feeling like a real business. So was there a point where you sort of were like with either of your businesses, you realized that you felt like a real business owner? Because sometimes people struggle with that. Yeah. With the bounce houses, again, you don't know what you don't know. So I was just kind of winging it. tried to advertise, tried to do the Facebook thing. When I got to the icy spot, then I tried to ramp it up and add in TikTok and Instagram. And basically when I start hearing people making suggestions, I would look into it. When people were actually calling up, so the turning point for me was last year, I was getting calls after calls about employment. And I'm like, you want to work for me? You know what mean? So it's like, I'm picturing the Chick-fil-A's and the McDonald's and you know, people were actually calling up there looking for jobs and now I'm getting those calls. It's like, okay, we're legit, you know? So when people are actually looking for you, because I had to focus so much on the icy spot, just bounce kind of. fell by the wayside, but I was still getting calls. So then when I'm still getting calls and I haven't done any advertising and then I have repeat customers, it's like, okay, I'm doing something right. You know, it's obviously something that I'm providing that people want, which is a plus. And people actually want to work with us. You know, so I think that was that. that moment with a light bulb in office like, huh, we're legit, you know? That is very cool. Did you hire any employees? No, because for the most part, I have my kids working for me right now. Now that I just actually changed locations. So now I think we're stepping into another realm of of business. So I'm probably going to have to call back a few of those people. But I think once we get open, I won't have to call anybody because they'll be knocking on the door type thing. So, yes, I assume. Yeah, I imagine it's a very exciting time. while you were running your business, did you ever feel any imposter syndrome, if you're familiar with that phrase, where you kind of just feel like you don't know enough to be a business owner? Still to this day. know, because again, you think about how far we've gotten thus far with the knowledge that we knew then. Imagine if we know the stuff that we know now and just even knowing what I know now, I know I have no idea what I could be doing. You know, so it's like, if I would take this knowledge, go back five years, and do this then, yeah, there's no telling. I probably could, you know, battle with the bigger names. There's no telling. You see the potential of what, say like the business side can do. You get the larger credit lines, the separation of the... personal in the business will help. There's just so many extra options. but yeah, definitely feeling like you don't know enough. It's even after five years, five years plus, I still feel that way. Yeah, yeah, I think that's extremely common and maybe maybe nobody ever knows enough. There's too many aspects of the business for you to know everything. Even down to the taxes, just the financial aspect of it, the operations, the inventory. I can go down the list. There's people in those positions and there's those jobs for a reason. I can only imagine. I know at some point I'm going to have to hire somebody. because I don't know it all for one. And for two, there's only one of me 24 hours in a day. At some point I need to sleep, you know. Yeah, do you delegate anything like that? Like any of the admin like taxes or bookkeeping? try to. Everything has been kind of on me and my wife jumps in every now and then because she was actually working up until last year really. So she had her full-time job and I was trying to use this as a kind of a supplement to that. And so for the most part, everything's kind of been on my shoulders and with the help of my wife and then my kids jump in for the the operations portion. And then sort of switching gears here. Have you found yourself participating more in the local community? Has a small business enabled you to be more of a part of your local community? Yes and no. I say yes because with the bounce houses, we actually participate in the fall festival. So we have one of our inflatables there, which is pretty cool because like now when they're advertising, they were part of that. I think that's going on the fourth year. So to be like that focal point for that festival is cool. And they're actually wanting to use us more, which is awesome. I say no because when you're operating the businesses, it kind of takes you away from that. You want to be part of it because it's like, well, if I could be part of this, then maybe I can find another festival that I can be part of. The interest is peaks now. It's like, what else is out there? You know what I mean? And then you kind of stumble upon the concert that you might've wanted to go to that you didn't know if you hadn't looked because you were involved with another festival. But again, the flip side of that is if you're working your business, then sometimes it takes you away from being the availability of it. Yeah, exactly. Like you said, only so many hours in a day. Yeah, no, that's really cool. And I do think these things snowball. So in a good way, because you like you said, you're involved in one festival and you're like, this went well. So let's do this again. Let's do this more often. So that's fantastic. Go to the next city. Yes, yeah, exactly. And so I think you mentioned this, but or mentioned this separately, but have you applied for funding before or that's not a stage right yet? No, I'm definitely applied. And that's kind of where I was getting the numbers of the quarter of a million. Because unfortunately, in order to get the help from some of these companies, they're expecting 10,000, $20,000 a month. there's some, I mean, there's a lot of small businesses that are making that, you know, so it's like, now what do you do? And again, when it's reliant on your personal credit, because you don't have the income or the business credit side of it, it kind of puts you in a corner, really. And it does kind of take the wins out of your sales, so to speak, because a lot of the ones that are advertised, it's like, hey, we can help fund your business. But when you do that, okay, you're expecting me to make X amount of dollars. Well, with my particular business, if I had that, then I wouldn't need your help. So yes, I've definitely applied. I'm finding out the hard way that in one way or another, I'm hindered, whether it be the financial aspect, you're not making enough or you're not a big enough size company or your personal credit is... taking a hit because of all of the credit that you had to put on there from the business in the first place. know, so yeah, it's the beast. Yeah, yeah, it's a process for sure. And yeah, I think it just takes time and dedication. Which you clearly have. So do you have any final advice that you would give other people who are just starting either just starting as a small business or are pretty new in it? And looking back, you'd be like, hmm. Yeah, the mentorships, I think, would definitely help. Like, you got to find somebody that's already doing what you're doing. You know, you got to put your pride to the side and try to learn as much as you possibly can. Because unfortunately, like I said before, let alone your personal side, you're not going to learn a whole lot in school. So it's like, where do you go to get the information? You either have to go to somebody that's already done it or doing it at the present time. well, that's pretty much it. Because when you start doing your research, obviously those people have done it before. But you also kind of have to vet that information too, because you can't trust and believe every single thing that you hear. Because like I said, applying for the funding, I heard from somebody else who was obviously doing well enough to fit those categories. So when I try it and it's like, well, it didn't work out for me. Like what's going on? You know, but again, it's good information. It's just it. Like I was saying before, I might have heard this information way before. It just didn't apply. So. Do your research, see if you can attach yourself to somebody that's a couple steps ahead of you, following their footsteps, get the information, try it, see if it works. Didn't realize before how much your credit was a major player in all this. again, knowledge is probably the most important. Outside of the imagination is to come up with the business in the first place, the knowledge on how everything's supposed to work. Even if it's just the basic bare bones, you don't have to be an expert at it, but you got to have some kind of guidance. know, so kind of copy after the thing that if I wanted to be the next burger joint, then I would. I would look to McDonald's. If I wanted to sell chicken, then I would look at KFC or Chick-fil-A and see how they operate. Maybe even work for them for a little bit just to see the operations. So yeah, that's basically it. It's the knowledge and trying to attach yourself to somebody that's going to possibly hold your hand. And even if it's not somebody that's going to willingly do it, you got to invest in yourself. Yeah. Yeah, definitely. And the good news is, like you yourself, so many business owners are willing to be that mentor for others. You have to because you see the struggle. You don't want your worst enemy to go through some of the stuff we have to go through in order to get to where you're at right now. So. Yeah, exactly. Yeah, but it is finding that mentor that can be a challenge, but it's just kind of like looking around and finding somebody. Yeah. Just keep your ears open because you never know where the information will come from. I've looked back and I've seen information has come to me about certain things from the most randomest person. You know, even the even down to the kids wanting certain flavors in your store. Guess who's buying it? Those kids that are coming into your store, you know, so young to old. just keep your ears open, because they'll tell you what they want. know, and then in the business, I just keep your eyes peeled, because if you see something that fits where you're trying to go, emulate it. See if you can try to mold your thing to what that is. And once you get there, then you can maneuver and make it your own and, you know, go from there. Yeah, no need to reinvent the wheel. Exactly. That's very good advice. Okay, well, thank you so much for talking with us today. This was, I think, super helpful for our listeners and just anybody who is just starting or maybe can commiserate with, yeah, just dealing with business credit. So this was very helpful. So thank you so much for talking with us today. Thank you for having me. And all you guys out there, business credit, business credit, business credit. Look into it, find out what it is. It'll be very helpful for you. Yes, exactly. Alright, thank you. Thank you.