Capital Now COO and Co-Cofounder, Natalie Wawzonek, gives us her best insight on 10 critical small business questions. Listen now!
Katie: Welcome to a special Capital Now leadership interview series.
I would like to kick us off today by welcoming all the Capital Now listeners that are tuning in to our 10 small business questions with Natalie Wawzonek.
My name is Katie Milton and I’m head of special projects at Capital Now, and I’m so excited that we have Natalie with us today.
Natalie, are you excited for a visit?
Natalie: Super stoked.
Katie: I knew you would be. And before we get too far, I’d like to give you a formal introduction, so that our listeners have some context for our call.
Natalie is the chief operating officer at Capital Now. She is also the co-founder of Capital Now and has 15 years of asset-based lending experience. She’s been involved in all areas of the factoring business, including the day to day operations of the business, such as administrative duties, funding, client retention, investor relations, and financial duties.
She has been instrumental in the development of best practices, client flow and customer service. She was previously a sales executive and has won multiple awards for excellence in sales. She has certified as a factoring account executive by the International Factoring Association, and I’m super pleased to have her here today.
Natalie, that last designation, the factoring account executive by the International Factoring Association. If I’m correct, or help me understand this better. I believe that there is only a handful of people in the world, and especially in Canada that have that designation, right?
Natalie: You are actually right. Last I heard there was three of us, and Gerry, my business partner and husband, happens to be the other one. And a lovely lady out of Ontario is the third one, so it’s just the three of us, unless people have taken a test since last I heard.
Katie: Wow, that’s amazing. So three in the entire country of Canada, and we have two of them at Capital Now.
Natalie: Absolutely. Actually, it is probably the most feared test you can take and at the factoring conferences yearly, we talk about how much nobody wants to take that test. It’s hard.
Katie: Wow. Well, that’s fantastic. I like to know that two of those three individuals are here with us at Capital Now.
To get us started, I do want to ask you … have you finish the sentence that might be the most difficult question I’ll ask you today.
Natalie: Mm-hmm (affirmative).
Katie: And that question is, if you really knew me you would know …
Natalie: That I had to have a glass of wine before doing this interview.
Katie: So being on stage is your sweet spot then, is that what you’re saying.
Natalie: Yeah. That’s it. That’s what I’m saying.
Katie: Okay, well it’s going to be really laid back and I know that you have some incredible knowledge to share with everyone that is listening to this interview. Without fuhrer ado, I’m going to jump right into it with our first question, which is…
A growing business needs to be smart about its money. How should small businesses prioritize what to invest in, or how to prioritize their growth investments?
Natalie: Well the first thing I’d say is that a small business needs to be grateful that they don’t have huge amounts of money. Too much money is a curse. Not having enough money forces you to think about your business. It’s like a problem that you need to solve. A puzzle, in order to make progress. We humans are progress junkies. We thrive on problem-solving, so the difficult times, those are the times you’re going to look back on fondly. This is the time when your business is never boring.
Now, having said that, I would invest in things that will drop to the bottom line. Things that will make you money. I know that sounds trite and obvious, but it isn’t. A splashy website, will probably not get a welder more jobs, but a specialized piece of equipment probably will.
An office with furniture seems a great place to start, but a good desk isn’t going to make you money. A lease that you’re going to be tied in to is not a good investment, but maintenance on your work truck is.
Hiring someone to help you with customer services, so things that fall to the bottom line.
Katie: Awesome. Those are some really good … those are some really helpful examples, so if what I’m understanding correctly is, the assets that small businesses are investing in needs to be something that immediately makes a return.
So you’re saying a work truck can make a return, but a desk can’t.
Now that doesn’t mean that working at a comfortable desk doesn’t make you better, or more comfortable, and maybe you’ll work longer, but you can sit on cinder blocks. I know because I did it when we started Capital Now. I was sitting on cinder blocks and milk crates in an empty office, and I would say the biggest regret was, we should never have gotten the office. We should have just sat on milk crates at home.
Katie: Okay. So that’s a perfect, perfect example. Good.
Our next question is how have you overcome personal challenges in your business, and what advice do you have for other business owners?
Natalie: I’ve overcome challenges in my business with copious amounts of coffee, and an excellent business partner. Running a business is probably the loneliest job. Having someone around you whose opinion you trust is probably the most important thing that you need as a business owner.
Save yourself some time and get advice from other people who have been there before you. Don’t try to figure it out by yourself. There’s literally no trophies for that.
It’s also nice to have people around who can pat you on the back and be proud of you. Trying to do it alone, also won’t get you that, because it’s hard to reach back there.
So coffee, and partners.
Katie: Coffee and partners, alright.
Natalie: Coffee and partners.
Katie: That sounds like some sound advice.
What criteria should business owners consider to determine whether a loan or a cash infusion would be a good decision to grow the size of their business?
Natalie: Oh that’s such a good question.
There’s only one question you can ask.
Katie: Mm-hmm (affirmative)
Natalie: When I envision my business in think future, is it bigger, or are we making more money. Am I on a boat? Am I living in my dream house? Am I smiling?
Growing a business without cash, we call that organic growth, is very time-consuming. You will grow old and then maybe you could retire with a little bit of the money that you’ve made through the years without a cash infusion. I would say, cliches are there for a reason. They are modern day parables to teach us a lesson.
You’ve got to spend money, to make money, I would say is one of those cliches. In order to spend money, you’ve got to borrow money or win the lottery.
Katie: So what you’re saying is that the criteria that we should consider to determine whether or not a cash infusion is a good decision is picturing where we see ourselves in our businesses in the future, yeah?
Natalie: Exactly. If you see your business growing, you need a cash infusion. If you see your business the same as it is today, I’m sitting on my milk crate. If you want to be sitting on that milk crate a year from now, then you should absolutely, not borrow money. You just keep sitting there and hope everything will work out. Cross your fingers, I hear that works.
Katie: So that’s really good criteria. That makes it pretty clear. And, can you think of any business that is okay with just organic growth?
Natalie: I was mostly being ficticious because though organic growth, you absolutely can grow. What I’m saying is you are going to grow really slowly. You’re going to grow, at most, 10% a year, and it’s not that 10% growth isn’t amazing, because it actually is amazing, and something to be proud of.
But if you hae big dreams and you want to make dent in the universe. If you’re an impatient person. If you’re good at what you do, I think you shouldn’t waste your time with organic growth. That’s kind of what it is. Borrowing money is a shortcut, so it’s not that doing it yourself isn’t a good way to do it, it’s just money is a tool, and it’s a shortcut, so if your dreams are big and they are close, you are going to have to borrow money. That’s just the way it is.
Katie: That makes sense. Thanks for the clarification there.
Katie: The next question that we have is, what is the best way for entrepreneurs to demonstrate that they’ve thought through the essential aspects of their business, especially the financials?
Natalie: I like this topic very much because I look at financials all day long. I generate financials all day long, because if you knew me you would know that I’m not really just the CEO, but I do a lot of the CFO functions.
My best advice is, don’t buy stupid toys. I like shiny things too, but it makes you look like a tool, and it makes people resent you.
It’s just the truth.
So, don’t tell me you’re going to the job site in your Porsche convertible, because I know you can only get a small bag of cement in the trunk of those things, and I know you can’t take a piece of drywall to the job site on your boat.
You wouldn’t believe what people buy through the company as business assets. Seriously, a jet ski. Seriously dude.
I guess I answered that question by giving you examples of what not to do, so let’s finish by saying what you should do.
I would say that what’s on your financials, reflects on you, and how seriously you take your business, and those who read your financials, like bankers and people that might be willing to lend you money, will think less of you when you have those sorts of assets on tor balance sheet.
Katie: Wow, that was really, really good advice and it made me think about the comment, that if you wanna know what’s important to a person, take a look at their schedule and their bank statement.
Natalie: 100%, because that stuff doesn’t lie.
You can introduce somebody, and they will tell you their supposed hopes and dreams. But where you spend your money, is definitive as to what’s important to you. That’s why food is most often on bank statements, and so are mortgages.
Katie: Food and mortgages. Alright, well you got to the heart of that one super quick. That was really insightful.
Natalie: Not my first time.
Katie: Okay good,
Our next question is, are there a few rules of thumb you could share with us that would help a small business owner differentiate between good business borrowing versus bad business borrowing?
Natalie: Yeah, I do have something, but people won’t like it.
Don’t borrow money from family or friends until you know what you are doing, which means, don’t take their money until you don’t need their money. The reason I would say is that, the additional stress that this will put on your life, is never worth it. It is the most expensive money you can borrow, even if the loan is interest free. You should just take that option right off the table. No money from friends and family.
Now, a good rule of thumb is, will this money give me flexibility? Not the money from your friends and family … I’m saying, any money that you borrow. Is this money going to give me flexibility? Can I pay it back when I want to without penalty? Can I pay it back when I want to in case I change my mind, or my business changes? Can I get more money quickly if notifications opportunity presents itself, like a piece of equipment at an auction, that will get me a great contract, like hiring extra labor to get my project finished on time.
In other words, is this money a tool, or an obligation, because you should always pick a tool.
Katie: That was definitely clear, and very actionable. I hope our listeners are appreciating these responses as much as I am, because they are very wise.
Okay, Natalie, our next question is, many small businesses start out as either family run, or business owners hire family members for a variety of reasons. What’s your advice on what to do when you have to lay off or fire a family member, and how can you do that and maintain peace?
Natalie: This is a really hard question. We started with a family member as a partner and it ended terribly, and also we are a family business, and such, so this is a really hard one.
I don’t think I have a great answer, but I think the best you can hope for is you’ve been very honest and transparent in your business. If hard time, [inaudible 00:14:17] or if they don’t fit in with your business values that family member will already know, and they will be expecting to be let go, or better yet, they will have excused themselves.
I think that would by my answer. If you’re really transparent, then it won’t be shocking to them if you have to let them go.
Katie: Good advice, and I think this really is a tricky question, especially as it doesn’t specify where the listener is asking this question from. To preserve the business, or to preserve the relationship, because sometimes you don’t get to do both.
I think the answer to this question would be different, depending on if your motivation was to preserve the business versus preserve the relationship, don’t you agree?
Natalie: I completely agree. I gotta tell you, I’m really not sure if the relationship will survive. I think especially if there isn’t a lot of transparency, because … yeah, that’s a hard one, and I would almost say that as soon as it starts going, not in the direction you want … just with any employee, cut bait.
Right before you even start resenting them, because I think, that’s a hard one. Not one that we’ve escaped. I’m happy to work with my husband, and my sister works for us, and I’m happy with that, and our kids are included in our business, and we love all of those aspects, which is why this question is really hard, because I would assume our listeners feel the same way. It’s like, these are the people who have your back. Nobody is as interested in your business as your family, and you know you can trust them, but that doesn’t mean it will always work out. When it doesn’t work out the relationship, unfortunately, might not survive.
Have not spoken to my step father, who we started our business with, for something like going on eleven years now.
Katie: Wow, so you definitely have lots of personal experience in regards to this question.
Natalie: Yeah, it’s actually really painful, and if I had it do over again, I guess we wouldn’t have started with a family member.
Katie: Also, a good insight.
Natalie: Or we would have been more transparent all around. I think there was expectations on both sides, and I think we were both disappointed with each other because we just never really had time to talk about the business.
I think Gerry and I learnt from that and that’s where we got the idea of being honest and transparent.
Natalie: Hopefully we learnt our lesson. Only time will tell.
These are the days of our lives.
Katie: Exactly. Well the numbers don’t lie, and it certainly does appear that you have made some solid business decisions.
Natalie: Oh, shucks. Thank you.
Katie: Moving on to the next question, which may also be a tricky question. Is there any deal you regret investing in, even if you made some money, and why?
Natalie: Regrets, I’ve had a few. The one that comes to mind is, we lent some money to an acquaintance to help his business, early on, when we were still broke and stupid, and it was all the money we had.
On the other hand, I can’t imagine how much money and time that has saved us through the years as a result, because we made it an absolute rule after that not to lend money to friends or family, and we’ve had to say no lots of times, but we never felt bad about it. We always had that first mistake to point to as a reason to say no.
We’ve never had to agonize whether or not we should do it or not, right, because it was just never an option, and also it wasn’t personal. So I would say it was a decision, something that happened early on when it was a terrible time to have that happen, and also the best time to have that happen, because it saved us from a lot of other trauma.
Katie: Yeah, misfortune.
Katie: So it sounds like it was an expensive lesson and you guys capitalized on the learning that was there.
Natalie: Yeah, that’s what we tell ourselves to make ourselves feel better.
Katie: Well, again, similar to the previous question, it sounds like you did take away a lot of powerful learning there that you were able to turn around and funnel in to a good direction for not only yourself but also for the business owners that you guys service and help.
Natalie: Sure I deserve every wrinkle, and every gray hair.
Katie: Okay, how can a mentor help a smell business owner, and do you, or did you have a mentor?
Natalie: I would say that having a mentor can save you lots of time and they probably have relationships that you don’t ave access to. So unless you are doing something that no other human has ever done, there’s someone out there who has either already done it, or has especially in business as a whole that can help you out.
The other part of the question is, no I did not have a mentor, and I can’t imagine where I’d be today if I had had one. The reason I know that there’s no trophies for doing it yourself is because no-one’s given me one yet. I tried doing it all myself. No trophies here.
I was always too shy to ask for advice, and I also thought I didn’t have time for things like a mentor. But in hindsight, being shy is a lame reason not to get all the help that you can get for your business and being too busy to get advice that will save you years in the long terms is just stupid.
I’m curious, if you had to do it over again, where are some of the first places you would go to find a mentor?
Natalie: If I had to do it over again … Gosh, that’s a really great question.
You know what … parents of friends, because when we started out we were quite young, and even although we both grew up in family businesses, it wasn’t the same kind of business as we had, so our parents weren’t necessarily good mentors in that way. They knew how to run a mom and pop business, which was always really helpful, but not really what you need to get you to the second step.
I think I would have the best access would have been parents of my friends who had been successful, and I think that they would have been very happy to talk to me.
Katie: Yeah, I agree. Good advice, and that’s definitely an accessible place for people to start, so … awesome.
Katie: Here’s our next question, and this will be an interesting one. How do you deal with exiting your business when you have a business partner who isn’t ready? And I say this is interesting, because I know that your business partner is your husband, so we might have to play around with this question, so it’s more pertinent to our listeners, but with that I’m going to hand it over to you.
Natalie: Sure. So my first question would be, did Gerry ask you to ask me this question?
Katie: No, he didn’t.
No, he didn’t, so this is not motivated from anything internally.
Natalie: Okay, so my answer to this, knowing that my partner’s not asking this question is, this is a conversation that’s hopefully not been sprung on you as there’s probably ways to do this.
I would say treat your business partner in the way that you wish to be treated. So probably, give them more than they deserve and hope that they will treat you the same way and try to offer you more than you deserve and both of you will part happily.
I will also say, in the same way that couples do what’s int he best interest of their children when they get divorced, they should do what’s in the best interest of their business. A business isn’t just the people who run it, it’s also its own entity, and as a business owner, you have a responsibility … In fact, you have a fiduciary duty, but that’s besides the point, for the business and it’s wellbeing. So you’re responsible for that business. You are responsible for its well being, and if you dissolve the partnership with this firmly in mind, and you cross you really fingers really hard again, hopefully it will work out.
Katie: Awesome. That was a really good example, and really good sound advice Natalie, so thank you for that.
We’re actually nearing the end of our questionnaire, so I have one final question, and then we’ll share some words of wisdom as we wrap up.
The final question is now that I’ve got a website up and running, what are the top three things that I can do to start generating sales leads?
Natalie: Oh that’s a great question. I hope you know the answer, because I don’t.
But when you find out, could you please email me.
So Geez, I really don’t know.
Alright. I’ll tell you why we don’t know. We built our business off of referrals, and we treated our website as a brochure. This is something that I wish we had, had someone to mentor us about. The only advice I have is that if you think that opening up a website is opening up a business, then you will be very disappointed., that would be like opening up an office in a big office tower and hoping that people will find you. That they are going to find the 17th floor with the office next to the bathrooms on the right.
I guess the first thing is to get the word out about your business and your website. Then make sure that you do good work, so that when someone uses your service and is happy, they will refer more people to your website. I think the website will always be secondary to the good work, so I guess my advice is, do good work, treat people well, and the people will come.
And that’s only two things but that’s all I’ve got, and I can’t wait for your email when you find the answer from people who know more than I do about this.
Katie: Well even though that was only two, I feel like those were two very powerful suggestions, and always a good foundation to build your business on, whether you are referring to the actual brick and mortar business, or a website itself. I believe that our listeners are going to take a lot of value out of that, and, I will ask the listeners if they have some insight or feedback that you’d like to share with Natalie, especially in regard to that question on generating sales leads, please drop her a line, or send her an email to give her feedback on how much you loved her interview, and how insightful her responses were.
And if you had any questions on maybe an answer that she gave and you required some clarity.
Natalie do you wanna share the best way for people to get in touch with you.
The best way to get in touch with me would be at my email, which is Natalie@Capitalnow.ca.
I’m very good at answering emails and if you say nice things to me, I will like you.
Katie: I feel that just may be our piece of guidance to help us wrap up.
Katie: Be nice to people and they will like you.
Natalie: Yes. Say nice things, I will like you. I’m an easy, easy person.
Katie: Well that’s fantastic Natalie. Is there anything else you’d like to share as we wrap up?
Natalie: No, except that this was a real pleasure, and I learned a lot from myself. I didn’t know I was this insightful.
Katie: Well I was confident that you’re this insightful, and I believe that our listeners agree
Thank you so much for sharing your time with us and your valuable experience and insights. And with that, I’m going to let you go, and we will all have a fantastic day.
Thank you, Natalie.
Natalie: Well you know what, that’s why I like you, Katie. All those nice things.
Katie: And there you have it, Capital Now listeners. Straight talk, straight from Natalie.
Please stay tuned for our next edition of the leadership interview series.