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Up In Your Business Home PageAbout Kerry McCoy

Barry Corkern of Barry M. Corkern Financial Advisers

December 2, 2016

Barry Corkern, founder of Barry M. Corkern & Co. advises and assist clients in making financial decisions, by providing them with information, that will aide in the strategic thinking of their life-long and multi-generational goals. Corkern also advises in fiduciary audits and when needed gives expert testimonies under oath.

In 1983 he received his CFP, Certified Financial Planner designation. In 2003 from the University of Pittsburgh he received his AIFA, Accredited Investment Fiduciary Auditor designation. Corkern is the first and sole AIFA in the state of Arkansas.

Barry is the founding president of the Arkansas Chapter of the Financial Planning Association, where in 2004 he was presented with a “Lifetime Achievement Award”. Money Magazine, designated Corkern as one of the best 200 financial planners in the United States. Named again, in Bloomberg Wealth Manager Magazine, Corkern's firm was ranked 54th in the list 150 top wealth managers in the United States.

Corkern was once the host of his very own radio show “Ask The Experts” on KARN. Now he is a recurring expert guest on THV11 in Little Rock Arkansas.

And last, but not least, Corkern co-authored his book “Widowed – Beginning Again Personally and Financially” published in 1999. Profits from the sale of this book are donated to nonprofit organizations that assist widows.

 

 

 

UP IN YOUR BUSINESS WITH KERRY MCCOY - EPISODE 11 TRANSCRIPT - BARRY CORKERN

 

[INTRODUCTION]

 

[0:00:03.2] TB: Welcome to Up in Your Business with Kerry McCoy. Be sure to stay tuned till the end of the show to hear how you can get a copy of this program and other helpful documents.

 

Now, it's time for Kerry McCoy to get all up in your business.

 

[INTERVIEW]

 

[0:00:18.3] KM: Hello, you’re listening to Kerry McCoy and it’s time for me to get up in your business. By that I mean to say share my business knowledge and wisdom with you, our listener. I consider this next hour to be a mentoring show, for small business owners or for those who dream of owning a small business. You may be asking yourself what makes this lady qualified to give me mentoring advice, and I’ll tell you. Experience.

 

40 years ago with just $400, I started Arkansas Flag and Banner. Since then, it’s morphed into flagandbanner.com with sales nearing four million, that’s worth saying again, I started Arkansas Flag and Banner with just $400 and today we have sales nearing four million.

 

I started by selling flags door to door then went to telemarketing. Next mail order and catalog sales and today we rely heavily on the internet. In addition, over the last 40 years, I’ve navigated Flag and Banner through two recessions and two wars. When people find out I’m that woman who owns Arkansas Flag and Banner, they often say, “Oh I have heard about you” and began asking me business advice.

 

I amaze even myself with all the knowledge I’ve gained. Four decades ago, when I started Arkansas Flag and Banner, I supplemented my income by waitressing.

 

All while I pedaled my flags door to door. After nine years, did you hear me? Nine years of working a part time job, the company began to grow and solely support me. My first hire was a book keeper to handle the clerical side of the business.

 

My first expansion was to begin the manufacturing of custom flags. So a sewing department developed. The next decade ushered in the desert storm war. Flags were scarce so a screen printing department was hardly built to meet consumer demands.

 

In addition to sales and manufacturing, Flag and Banner now has a purchasing department, a shipping department, technology department, marketing department, call center and a retail store. I spearheaded the development of everyone of these departments.

 

This is usually when I introduce my guest, another fellow entrepreneur and we talk candidly, we share our stories, our business experiences, our lessons learned along the way. But today is going to be a different program because it’s a holiday. For the first time since we started this business mentoring show in September, we’re going to air excerpts from previous shows. We picked three interviews.

 

That was difficult because I think every one of them did great. We edited each of them to a mere 17 minutes and presto, we have today’s show. Our choices for today’s show are Paula Dempsey’s interview with Dempsey Bakery, Al Hudge’s interview from Arkansas Capital Corporation and Congressman French Hill’s interview before the last election.

 

Today we won’t be taking calls but we will be taking emails. If you have a question for me, you can email me at, Tim what is it?

 

[0:03:28.5] TB: It’s questions@upyourbusiness.org.

 

[0:03:31.4] KM: I’m tweeting these days so what’s my tweet?

 

[0:03:33.7] TB: It is @askkerrymccoy.

 

[0:03:40.7] KM: Before we get started with our three awesome condensed interviews, you just heard from my technician and partner in crime Mr. Tim Bo. Say hello Tim.

 

[0:03:50.1] TB: Hello Tim.

 

[0:03:51.5] KM: I also want to give a shout out to Scott McClure, our audio editor for today’s recordings. And, who each week edits and posts our podcast on upyourbusiness.org. He and his wife Tammy are a power couple of creativity. Thank you to Scott and Tammy McClure for your professional support. Okay, let’s get started. Tim, who is our first interview?

 

[0:04:15.9] TB: This will be Paula Dempsey from Dempsey Bakery.

 

[0:04:18.7] KM: I like that. Speaking in this interview as like Tim said, Paula Dempsey. Owner and founder of Dempsey Bakery. The only gluten, soy and nut free bakery within a 500 mile radius of Little Rock Arkansas. 20 years ago, she and her husband Demp Dempsey opened their first and very different small business, Dempsey Film Group which grew to over 30 employees over an 11 year span. Due to technology changes in the film making industry, Dempsey Film Group closed the doors to its film production company in 2011.

 

In true entrepreneurial spirit, Paula turned her passion into her new business when she started Dempsey Bakery. Knowing nothing about the food business, she hired a baker and together they spent one year experimenting and creating recipes that she now serves up in her gluten, soy and nut free bakery in Downtown Little Rock. You can also find her food creations in local restaurants and grocery stores throughout Arkansas.

 

The mission of Dempsey Bakery is simple to say, it is to feed and meet the rising needs of people with food sensitivities but the execution of the simple statement is very complex. Paula’s all too familiar with this issue. This familiarity is her motivation. She believes in her product and has found her mission in life through Dempsey Bakery. What a lucky lady.

 

For your listening now, it’s Paula Dempsey from Dempsey Bakery. My guest today is Paula Dempsey, owner and founder of Dempsey Bakery in Downtown Little Rock. Over 20 years ago, she and her husband Demp Dempsey opened their first small business, it was Dempsey Film Group which grew to over 30 employees.

 

In 2011, they closed the film production company and opened the only gluten, soy and nut free bakery within a 500 mile radius of Little Rock Arkansas. Paula’s motivation and dream when starting Dempsey Bakery was to focus on the rising needs of people with food sensitives.

 

Something she is very familiar with and is very close to her heart. Knowing nothing about the food business, she hired a baker and together they spent one year experimenting and creating recipes that she now serves up in her gluten, soy and nut free Dempsey Bakery. Welcome to the table Paula Dempsey. Welcome to the table Paula Dempsey.

 

[0:07:00.5] PD: Thank you Kerry.

 

[0:07:03.3] KM: I really admire you for being so proactive about this because most people don’t take responsibility for their health and most people and most doctors don’t believe that it’s the…

 

[0:07:13.8] PD: Yeah

 

[0:07:14.5] KM: Right. It seems like we got this epidemic of nut allergies and gluten intolerance and even some meat allergies. I know several people who eat red meat and they break out in hives. What were the biggest challenges when you started to change your eating habits? The whole family getting involved or finding the recipes or…

 

[0:07:37.3] PD: Well, you know, it took me a while to learn how to convert a recipe. Especially baking as I said, you know, cooking, if you just cook fresh food and don’t fry it, you know, and flour it.

 

[0:07:49.9]KM: I don’t think I can do that.

 

[0:07:50.9] PD: I know, well you just have to learn. I mean, I can fry food now and I have flours and mixes and things that work but back then.

 

[0:07:56.2] KM: You can buy those flours at Dempsey Bakery and fry in them?

 

[0:07:57.8]PD: Yes you can, well we have a little gravy mix and we have breadcrumbs. You can. First, we didn’t do much of that at all. I got magazines that were gluten free and I would read the recipe and then I would be like, okay, how can I fix this for our family but it gave me hints on combinations of things to change.

 

[0:08:18.4] KM: If someone wanted to email you or ask you questions about who the doctor was you used or some more detailed questions that are more private that they don’t really want to talk about on the air, is there a way for them to contact you?

 

[0:08:29.4] PD: Yeah, they can email me at paula@dempseybakery.com.

 

[0:08:34.4] KM: Dempsey is?

 

[0:08:35.9] PD: Dempsey. Or they can go on our website and look us up and you know, there’s like a link or whatever but also do Facebook, Dempsey Bakery on Facebook. I do like to do Doctor stuff a little more personable. They can come to the bakery, I’m really busy between 11 and about one and people call and making appointment and I’ll sit down and visit with them about our experiences.

 

[0:08:56.1] KM: You will?

 

[0:08:57.3] PD: Yup, I do it all the time.

 

[0:08:59.8] KM: Love that about this show. I love that about you, just mentoring to other people, sharing what you learned and what you know. I love that.

 

[0:09:08.8]PD: Well, you know, I don’t give away my recipes at the bakery but…

 

[0:09:11.2] KM: Well, I hope not.

 

[0:09:12.1] PD: I do have some that I do give away or I do talks in churches and women’s groups.

 

[0:09:16.1] KM: Well you can buy everything at your place just about.

 

[0:09:17.9] PD: You can.

 

[0:09:17.9] KM: You can buy the pizza crust, you can do whatever you want. Before you were into Dempsey Bakery which is only in 2011, you and your husband were in business together at Dempsey Film Group.

 

[0:09:28.1] PD: Correct.

 

[0:09:28.8] KM: Didn’t you have a career before that?

 

[0:09:30.6] PD: Yes, I’ve been in banking and real estate and my husband’s been in the TV business his whole life. When he started on his own, I did his book keeping you know on the side because I’m not a book keeper and I’m not an accountant but you know, I can put numbers on a piece of paper and add them up.

 

[0:09:45.2] KM: Well you were in banking you said.

 

[0:09:46.2] PD: yeah, but I wasn’t, I mean, I don’t have any formal education but anyway, I kept his books and what I could do and then we had an accountant do the formal stuff. It got to the point to where I was spending more time helping him than selling real estate so we had to make a decision.

 

[0:10:00.8] KM: Was he independent film maker when you were helping him?

 

[0:10:04.6] PD: yeah, well we had a small business with only someone that answered the phone back then, we didn’t have cellphones, then him and then he would hire freelance people to help him with his work.

 

[0:10:14.4] KM: Then when I learned about you, you were in an old church, Dempsey Film, was he at that time that you were his book keeper? Was he in that church?

 

[0:10:24.2] PD: No, we didn’t buy church till we had about 10 employees or something. Before that, he worked in an office behind Jones Productions because he had worked for Gary and they kind of worked together a little bit and then before that he was in television. He’s been around a long time.

 

[0:10:39.4] KM: He’s a videographer. Is that what they call it?

 

[0:10:41.2] PD: Well he’s really, I mean, he’s real career, he directed TV commercials and TV shows in sports and then he also was in film, we used film back then with big 35 millimeter cameras and things like that and…

 

[0:10:56.0] KM: My gosh, I remember. You all came out and filmed me for a commercial for Twin City Bank.

 

[0:11:02.5] PD: I remember that.

 

[0:11:02.7] KM: yup, you do? I’m so impressed and they brought this, it was so professional, they brought a track in, they set the camera man on the track in a chair.

 

[0:11:11.5] PD: That was probably my husband, I bet.

 

[0:11:13.5] KM: I didn’t know I’d ever met your husband, I bet it was him. That’s just fascinating. You decided how long to go over, how long did it take you, he started getting more and more employees so you decided to go over there and…

 

[0:11:27.0] PD: And help, yeah. I kind of ran the business, I mean, not really ran it. He was the talent and the creator and all that but he’s not really good at book keeping and details and the IRS and paying taxes which most really talented people are not.

 

[0:11:42.1] KM: But you got to do it or you’ll be ending up like Willy Nelson. You know, he got in a lot of trouble.

 

[0:11:45.9] PD: yup, I was audited twice and we never had anything go on.

 

[0:11:49.5] KM: Congratulations.

 

[0:11:50.3] PD: Thank you. Anyway, that’s the part I did and he did his thing and I did mine.

 

[0:11:55.4] KM: You grew that business to 30 employees?

 

[0:11:58.5] PD: Yeah, we did.

 

[0:11:59.8] KM: then technology changed.

 

[0:12:01.9] PD: It did change and I have to say too that that was towards the end of our business, my husband was starting to get really sick, this was before we found this doctor and he was taking some really toxic drugs.

 

[0:12:13.9] KM: Steroids?

 

[0:12:14.4] PD: Well he took steroids and then he took a cancer drug called Methotrexate.

 

[0:12:18.3] KM: For inflammation?

 

[0:12:19.3] PD: Yeah. It just did a lot, it played havoc on everything from depression to – you know, anytime you’re really sick and then you add pain pills and things like that, it’s hard.

 

[0:12:30.3] KM: Well, he probably had a lot of physical problems from carrying around cameras for so long.

 

[0:12:34.0] PD: Yeah, he already had three back surgeries by then.

 

[0:12:36.1] KM: Is that from cameras, carrying around cameras?

 

[0:12:37.8] PD: Well that plus his arthritis that we didn’t really – you know, there was a lot of things going on that we didn’t know about. Anyway, technology played a huge part and the reason we closed the business.

 

[0:12:49.0] KM: I was wondering.

 

[0:12:50.2] PD: Yeah, because when we were really up and going and they were shooting film. We would – our edit suite costs over a million dollars.

 

[0:12:57.6] KM: Wow.

 

[0:12:59.0] PD: Not anybody could just walk in and start a production company. I mean, it was expensive and when you shot film back in the good old days, I guess we would have called it, you know, it was $500 of finished minute and if you messed up or you didn’t know what you were doing, it could cost you a lot of money.

 

You just didn’t take those kinds of chances.

 

[0:13:19.5] KM: But then when they came out with camcorders, I think they were called?

 

[0:13:21.8] PD: Well, even that. Our camcorders, we had some expensive ones, they were like 80 grand a piece but apple came out with — I don’t even know what they were called but it was an edit system that you could buy for like 15 grand. It did a lot of what we already did and then the cameras you know, these Nikons and Canons, now you can shoot video with them, they’re three or $4,000 and ours were 80.

 

[0:13:45.0] KM: I mean, you can shoot pretty good video with my phone, I did that last night.

 

[0:13:47.6] PD: Yeah, you sure can.

 

[0:13:48.7] KM: I was watching a band, I was amazed.

 

[0:13:50.2] PD: Then I know Kerry you remember because Twin City Bank was one of them. Back in the day, the local people, the banks, Twin City Bank and Worthen Bank and all those banks and then Blue Cross and Energy.

 

They spent a lot of money on their TV commercials, I mean, they were top notch, better than Memphis and they just, everybody just quit doing that.

 

[0:14:12.0] KM: Yeah. Now they got drones, they just fly drone over and…

 

[0:14:16.2] PD: Yeah, I mean it’s yeah. You think about it, the utility companies don’t even advertise anymore and that was a big part of our business.

 

[0:14:21.3] KM: I had never thought about that.

 

[0:14:23.0] PD: I mean, rarely.

 

[0:14:24.0] KM: Was there one moment that you said, “This is a dying industry, Demp, we need to change horses in the middle of the stream here.”

 

[0:14:30.7] PD: Well we did have one aha moment we were really struggling a little bit in February and we kind of pulled it together and then we lost a very big video account, it was a training account, but we’d had it for like 15 years and we had 17 shows booked with them through the rest of the year and that was sort of our meat and potatoes.

 

They just called us up one day and said, “We don’t think we’re going to do that anymore, we’re going to spend all of our money on internet.”

 

[0:14:57.9] KM: Wow.

 

[0:15:00.5] PD: You know, he wasn’t even working then because he was so sick.

 

[0:15:03.2] KM: What year was that? 2011?

 

[0:15:05.1] PD: 2011 in July and we just, I came home, I told him, my son was working for us, nothing’s worse than having a family member lose their job that you provided, it’s awful. We just, all three of us said you know what? We just, we don’t want to dig a hole anymore that we can’t get out of and really, we had the business at that time for our son and our employees, not even for my husband.

 

[0:15:32.3] KM: How hard was that really?

 

[0:15:33.8] PD: It was the hardest thing, the day we told our employees, I went home, I was so upset, my husband couldn’t even come.

 

[0:15:41.3] KM: I wish people could see your face talking about it. You're still upset by it.

 

[0:15:45.1] PD: We’ll never get over it, my husband will never get over it. He practically had a nervous breakdown over it, it just broke his heart.

 

[0:15:52.2]KM: 30 employees, you called a meeting.

 

[0:15:54.9]] PD: Yup, and said I’m sorry guys but we had told them you know, because we had laid off about five people which we’ve never, we were always so proud we’d never ever had to lay anybody off.

 

Those were already gone and then we told them then, if we have to do this again, we will all walk out together. That’s what we did.

 

[0:16:14.1] KM: How many months from that meeting till you walked out together?

 

[0:16:18.0] PD: From the meeting when we told all of our employees, it was a Wednesday and we gave them a month to pull their own act together, we sold them equipment, we gave them our clients and told them, until we had everything liquidated, they could work out of our offices, use our computers, our copiers and build their own small businesses and that’s what they did.

 

Most all of them are still in the business and a lot of them still have our old clients.

 

[0:16:44.7] KM: You gave out for your employees.

 

[0:16:47.3] PD: Yup.

 

[0:16:48.7] KM: But did you know what you were going to do?

 

[0:16:50.2] PD: Well, sadly and I guess a good thing, the whole bakery is a God thing, there’s no doubt about it.

 

[0:16:58.3] KM: I can’t tell you how many entrepreneurs tell me that.

 

[0:17:00.4] PD: I know. Well, because it was totally out of a passion, not anything I had in my mind for all my life that I wanted to be in the food business because I never wanted to be in the food business.

 

There was such a need including my own family. You know, sometimes you just have to change gears when things hit you in the face and I would have never started that bakery had I known we were going to close the film business because we thought we would use that income to support us until the bakery, like you walking out…

 

[0:17:28.1] KM: So you had already started the bakery?

 

[0:17:29.8] PD: Well I had already hired everybody in July and we thought we’d be open but you know, when you’re working with the city and trying to get your permits, it takes longer than you think. We opened it in September but.

 

[0:17:39.3] KM: Well I read in the opening statement about, you spent a year.

 

[0:17:44.3] PD: Yes I did.

 

[0:17:45.4] KM: With a cook, with a chef or baker, I guess they’re called bakers, baking to find recipes. Now, that was part of the year we’re talking about right now that you are already doing recipes.

 

[0:17:55.4] KM: Well we’d already, because I didn’t really – our business was thriving and then it wasn’t. I mean, it was very fast. The year before we closed the business, the Film Group business, I had already hired this baker and he worked in his mother’s kitchen, she had a really nice real expensive, nice kitchen and so he would bake and try recipes in his house and then I’d come over and we’d talk about them or whatever, he’d bring them to the Film Group and we share them and you know.

 

You know how you test recipes. We get one that’s pretty good, we had several people already following us that we knew that were family or friends at church or whatever and so we’d take food to everybody or I would and try it.

 

[0:18:34.4] PD: Did you have your location yet?

 

[0:18:35.6] KM: No we didn’t. Was it hard to find a baker?

 

[0:18:39.4] PD: Well yeah, that was another god thing, he literally had lost his job and he was a friend of a friend and he was very talented and he begged me to let him try. I kind of had it in my mind for like six years but in the gluten free business, there is no school where you can learn or…

 

[0:18:56.8] KM: You’re on the leading edge.

 

[0:18:58.1] PD: Where there’s no set recipes and the ones that are successful at it are not sharing theirs. We really literally just would pull recipes down and because we had so many allergies in our family, we would say, okay, we can’t use that so let’s you know,

 

[0:19:14.0] KM: because you said you already been gluten free and nut free and soy free for 10 years already. You had some recipes but did you manufacture them on a large scale and would they work on a large scale?

 

[0:19:24.2] PD: Exactly, I never did successfully do bread personally, the baker and I. I mean, he did it. Bread is like one of the hardest things to make good gluten free.

 

[0:19:35.7] KM: Without wheat flour.

 

[0:19:36.3] PD: Yeah, it’s really hard.

 

[0:19:38.2] KM: I think everybody that meets you knows you have a lot of energy and I told you already I’m so on your train, I’m such a big monster fan of yours for being so proactive about your health issues and stuff but I almost feel like Dempsey Bakery, speaking of a God thing is a community service.

 

[0:19:56.3] PD: I have people tell me that and they’ll tell me that’s a mission because I am really helping the community.

 

[0:20:01.0] KM: You used all your own money too?

 

[0:20:03.1] PD: Well, we did borrow money to build the bakery because that took quite a bit to buy the equipment and because we have the big oven and freezers and all that.

 

[0:20:10.7] KM: Was the health department easy to work with?

 

[0:20:12.7] PD: Well, they’ve been so far. I think it’s going to be a little more difficult as we get more into the manufacturing but really right now, they just consider us kind of like a local restaurant. It’s not been too hard so far and we’re so picky about everything that actually, they kind of like us.

 

[0:20:28.4] KM: That’s good. It’s a clean kitchen, I’ve seen it, you could eat off the floors in there. We should go to a franchise seminar.

 

[0:20:35.2] PD: Well I think I would probably prefer to license some of my products and let other bakeries bake them and sell them in their stores.

 

[0:20:43.0] KM: What does that mean, license?

 

[0:20:43.9] PD: If I license it, I could give them the license to make my bread, train them how to make it, in a gluten-free bakery and sell them the flour mix so they don’t have the recipe because in my niche which gluten and soy and nut-free, the liability could be huge if somebody did it –

 

[0:21:04.6] KM: Cook it in a wrong environment.

 

[0:21:05.7] PD: Yeah or brought the wrong product in because we vet every single ingredient that we use, we have a big old book with letters from every manufacturer that there’s no nuts in their factory, there is no soy. So it is pretty complicated so to me, as long as there is a gluten-free bakery you know? And bread is the hard – I mean it costs me probably 60, $70,000 that year to create those recipes.

 

[0:21:29.9] KM: That is just hard to get your mind around.

 

[0:21:31.2] PD: I know and so if somebody wanted to do a gluten-free bakery, just by paying me a fee, they can learn the hardest parts and then the easy parts they can just do their own thing like cookies and stuff like that.

 

[0:21:44.0] KM: I love the cookies you brought me. I wish everybody could see all these Halloween cookies you brought me. You’ve got the cutest gluten-free Halloween cookies and they’re individually packaged. So you can give them away as gifts, what nice little

 

[0:21:53.1] PD: Yeah, we do beautiful Christmas ones too.

 

[0:21:55.4] KM: Those are cute. So employees and even the management are the backbone of most small businesses. So if you start licensing, how do you manage those, I guess you don’t worry about the employees?

 

[0:22:05.9] PD: You wouldn’t worry about it because all their doing is they’ve paid you a fee and it’s up to them to be successful or not to be successful and if I don’t know, I’m sure I have to say, “If you don’t buy X numbers of mixes from me a year” like the flour mix or whatever “then you couldn’t have my license anymore” so.

 

[0:22:23.8] KM: So of all the things you’ve done, what sticks out to be the most challenging over the last six years? I know finding recipes is one.

 

[0:22:30.4] PD: Well that’s actually not as hard – or I mean now that we’re really got it pretty good, we can do it. It use to take us 20 times to get something right now. It would take us maybe five because we really know what we are working with but I’d say the hardest thing right now really is packaging. Oh my gosh packaging is like a whole other world.

 

[0:22:46.9] KM: Time consuming, so time consuming.

 

[0:22:48.9] PD: Well and figuring it out. I mean when you start distributing, you’ve got to figure out the package, how it’s going to get in there, how much it weighs, what it’s going to cost, how –

 

[0:22:57.0] KM: Put the date.

 

[0:22:58.0] PD: The date well that’s –

 

[0:22:58.6] KM: Serial number?

 

[0:23:00.0] PD: Yeah and you’ve got to have a case and how many cases are in this and how many of that. and I’m not a numbers person. It is so overwhelming to me to sit down and we’re working on a project right now for a broker and we’ve got 11 things to price.

 

You got to figure out, I mean, it’s one thing to figure it out for retail but it’s another you got to break it down and then you also got to make sure you’re going to make a little bit of money and it’s a little bit of money because they’re buying it by the case.

 

[0:23:26.4] KM: Because they’re reselling it and reselling it. A broker is like the reseller that sells it to the…

 

[0:23:31.2] PD: To Kroger or wherever. They get a pop then Kroger gets a pop. I mean, it’s like my goodness.

 

[0:23:37.6] KM: I can’t believe that cookie is only three dollars.

 

[0:23:39.8] PD: Well, in the bakery, we’re getting all the profit but if I were selling that to Kroger, I might only get a dollar for it and by the time it gets to Kroger, it’s three or four dollars.

 

[0:23:50.7] KM: It’s very labor intense.

 

[0:23:52.5] PD: Well, it’s an industry that I don’t know that much about.

 

[0:23:56.0] KM: You’re listening to Up in your business with Kerry McCoy on KABF 88.3 FM. This is a mentoring show for small business owners or for those who dream of owning a small business. You just heard Paula Dempsey from Dempsey Bakery, it was prerecorded from a previous show and we just wanted to share her with you.

 

To contact any of my interviewees, go to upyourbusiness.org, there you can find podcast of each show, contact information for the person interviewed and links to all the resources discussed on the show and some not.

 

The website is a wealth of information and links. If you’ve got questions or comments for me, you can email me at.

 

[0:24:38.6] TB: questions@upyourbusiness.org.

 

[0:24:40.4] KM: Or I’m tweeting, you can tweet me at?

 

[0:24:43.9]TB: @askkerrymccoy. Be sure to spell Kerry.

 

[0:24:47.7] KM: Today we are airing excerpts from previous shows. You just heard Paula Dempsey, the next one is going to be congressman French Hill. He was not elected yet.

 

[0:24:58.8] TB: No, he was.

 

[0:25:00.4] KM: Well he was elected.

 

[0:25:01.5] TB: He won the election.

 

[0:25:02.4] KM: Yes, but when we interviewed him, he had not yet been elected.

 

[0:25:06.5] TB: Yes, he was facing his first re-election.

 

[0:25:08.0] KM: That’s exactly right, well said. Are you ready to listen to an excerpt from Congressman French Hill’s interview.

 

My guest today is Congressman French Hill. He is the founder and chairman of Delta Trust & Bank. He attendant Vanderbilt University, graduating magna cum laude with a B.S., that’s a Business in Science, in Economics. His education, business experience, economic analysis and professional leadership have been sought by multiple U.S. presidents. He served as senior policy advisor to President George H. W. Bush, Deputy Assistant Secretary of the U.S. Treasury, and Senior Advisor to Governor Mike Huckabee.

 

French’s website boasts he is a Little Rock businessman and job creator. For the past 20 years, he has been working, investing, and creating jobs in Central Arkansas across different industries. Welcome to the table, Congressman French Hill.

 

[0:26:13.6] FH: Man! I can’t think of anybody I’d rather get up in business with than you. So I’m glad to be here.

 

[0:26:18.2] KM: Thank you. I love the show. There is French Hill the entrepreneur, there’s French Hill the man who is funny and I hope that that comes out and everybody gets to see how funny you are and then there’s French Hill, the congressman. I want to start first with you as an entrepreneur. You said, and I quote, “I started my business as an idea sketched out on the back of a napkin and built it into a successful enterprise as a result of hard work, not government handouts, or bailouts.”

 

French, I felt like I was reading the story of FedEx and probably so many other companies that started their business on a napkin. Can you tell us a little bit about who you were with and how it started?

 

[0:26:56.4] FH: You bet. I remember exactly when it was and who was there. You said something that overnight successes take perseverance and my expression that I used at Delta Trust was the average overnight success takes 14 years.

 

[0:27:14.3] KM: I’m using that.

 

[0:27:14.9] FH: Yeah but that’s the way to think about that perseverance part. I was with a couple that’s very close friends with Martha and me, two couples. We were having dinner one night and we were talking about what became Delta Trust. I took out this cocktail napkin at this restaurant and I wrote “trust, investments, and banking” on it, the three core functions of what became Delta Trust. Those were the three core services because we were struggling with a name. We chose Delta because Delta is a three sided triangle, obviously. Equal sided triangle.

 

[0:27:56.9] KM: I just thought it was a place Down South Arkansas.

 

[0:27:58.9] FH: This is the key. We said we have these three core services; trust, investment, and banking. The bank that we’re investing in that we want to grow is in the Mississippi Delta, down in beautiful Parkdale, Arkansas, Ashley County. The third thing was is that Delta in math is the sign of change. It’s the change descriptor. Of course, it’s very hard when you start a company to get people to change from whatever they’re doing now to you.

 

[0:28:27.8] KM: It’s hard to get people to change anything.

 

[0:28:29.9] FH: Right and so in any small business, this gets right to the heart of what you do. Someone looking for customers has to realize they have to acquire those customers from something else, an alternative. Delta Trust became the name of our company and the whole business strategy that we worked on and perfected, I guess, you’d say for 16 years.

 

[0:28:52.9] KM: I wondered when I was working on these questions for you, which I have like — look at how many pages of questions I have for you. You’ve done so much. I hope we get to all of them. I wondered what trust meant, if it had a double meaning, because a trust can be a trust fund and a trust can be trust in somebody.

 

[0:29:08.6] FH: It did. We inverted the name. Most people had grown up with banks that were called First National Bank & Trust, and our company was Delta Trust & Bank.

 

[0:29:19.2] KM: I noticed that.

 

[0:29:20.0] FH: We inverted the name on purpose for both reasons. One was we put trust services and investments first. It’s our lead service that we’d go to families and business owners with. Secondly, we were not — it wasn’t an accident to put trust and convey that in our advertising and marketing. We said trust is our middle name on purpose because we wanted to convey a sense of we want you to trust us with your financial questions.

 

[0:29:48.1] KM: And of Delta being change. Freud has a death principle, and it’s called doing something you’ve always done before. That’s the death principle, not changing. You were helping people by talking them into changing.

 

[0:30:01.7] FH: Right. If you want to get the same results, if they’re meager, keep doing the same thing over and over again is another risk in a small business, if you’re not growing and not having success.

 

[0:30:12.2] KM: If you don’t change — I heard of — I can’t remember who it was, but I heard some man say, “If your business isn’t changing every 10 years, you’re going out of business.” And I believe that today. You heard my intro. I’ve changed and changed and changed and changed.

 

[0:30:23.5] FH: Yeah, think about that from personal door-to-door, then to basically catalog type sales, or flyers.

 

[0:30:29.4] KM: Telemarketing. Now, the internet. Four decades, four different business models.

 

[0:30:34.4] FH: I told our guys we started our company in 1999. It’s now part of Simmons now as of 2015. I said over that 16 years, you’ve seen war, you’ve seen two lows in interest rates, you’ve seen two stock market crashes, the famous —

 

[0:30:51.2] KM: Desert Storm and the banking, 2008.

 

[0:30:53.6] FH: Yeah and so that’s a lot in a young — Let’s say somebody came to work at Delta Trust and they were 23 and then they were late 30s. Most people would see that kind of radical change; technology, war, recession, interest rate swings in a whole career, not 15 years.

 

[0:31:11.7] KM: Boy, it’s moving fast these days. Isn’t it?

 

[0:31:13.1] FH: It is, that’s why business people have to be really on their toes.

 

[0:31:15.8] KM: I was going to ask you about selling your business. How does it feel? How did you make the decision? It’s something I’ve never done. I’ve never sold a business. Before I ask him — Yeah, you think about that. I want to talk about your decision to sell your business and why you did it and how hard it was to let go of your baby. Before I do that, I want to say you’re listening to Up In Your Business with Kerry McCoy on KABF. My guest today is Congressman French Hill, founder of Delta Trust & Bank. If you’ve got questions or comments for either of us, call — 

 

[0:31:48.0] TB: 501-433-0088.

 

[0:31:51.2] KM: Tim say that again.

 

[0:31:52.6] TB: 501-433-0088.

 

[0:31:55.3] KM: He says that so fast. 501-433-0088. I can’t even think that fast, Tim or you can email us questions —

 

[0:32:06.6] TB: @upyourbusiness.org.

 

[0:32:08.8] KM: That’s right. The questions is with an S. Congressman, thank you for coming on my show.

 

[0:32:14.4] FH: I love it.

 

[0:32:15.3] KM: People just think I am the cat’s pajamas because I’ve got a congressman on my show. Tell me about selling your business. Was it hard?

 

[0:32:23.3] FH: It’s always hard to sell a business, and as a banker, an investment person for 35 years, I’ve helped a lot of people prepare their business for sale or talk them —

 

[0:32:34.3] KM: Oh, I bet.

 

[0:32:34.9] FH: I’ve always been on the other side of that equation for the most part, except as an investor and something, but this one was really connected to me personally having been the founder and the CEO of it but I had investors who were very eager, to after 15 years redeploy their capital. They had urged me as the CEO to consider “what are the best circumstances I could a sale?” and so I approached it as a fiduciary. I approached it as their agent.

 

I tried to take my own emotional position out of it to somewhat. Some of the things I considered were; “Can I find a place where our employees would be happy? Can I find a place where our customers would get great quality service and have the same values that we had at Delta Trust? Can I find a group that would be accepting the unique products that we developed over that period of time and actually give those products and services a home?” and so after a lot of work and several years, we made that decision but it’s always tough to do that.

 

[0:33:44.4] KM: What do you think is the secret of your success is?

 

[0:33:46.7] FH: I think it’s perseverance. Off the top of the show you mentioned the word perseverance. I have always had a stick-to-it-iveness about my personality and commitment to things. I’m a committed person, and you really need to be successful in business. You really have to be personally bought in. Again, just like your testimony at the top of the show. Perseverance is essential. I think the only place work comes after success is in the dictionary. That old expression; you got to work before you can be successful. I just know that to be true.

 

I think that’s the secret to America. America is diverse, true, giant now, 300 million people, but there is a common code in our makeup, I think, of being willing to work hard because we do get rewarded in our society if we work hard.

 

[0:34:44.0] KM: You absolutely do.

 

[0:34:44.9] FH: We do. You know the heart of our country for 240 years has been industriousness of the American people and having the freedom to pursue happiness as promised in the declaration of independence. In fact, in the list of grievances by the colonist against King George III, if you’ve ever read the whole Declaration of Independence, not just the part we memorize and we talk about, unalienable rights, but the whole list of grievances. One of them is; and he, meaning the King, has sent down swarms of his officers and eaten out their substance.

 

[0:35:22.2] KM: What?

 

[0:35:22.7] FH: This is the sense that government was too big, too intrusive, and the industry of the colonial people living in North America and that the King was all up in their business. It wasn’t appreciated. The sort of secret in our society has been letting the private sector have enough freedom to create business, create industry, create jobs and grow. Therefore, we have grown to be the biggest economy in the world over those 240 years and we have really created wealth that’s freed billions of people from poverty and hunger and famine through that free market system.

 

How politics and business interact is in limiting that freedom but not too much. In other words, we want to make sure business people were ethical, that they’re honest, that they don’t do criminal things, they don’t do fraud people that they protect consumers and so we have some base rules about that. We want workplaces safe. We’ve agreed to have some basic safety standards for business, some basic pay standards like for business.

 

It’s that tension about how politics and business interact. What business wants is the freedom to be creative, to employ more people, to change and grow their business and take advantage of the times and do that in a way that produces greater wealth for the American people.

 

[0:36:46.6] KM: Business is creative.

 

[0:36:48.3] FH: It is creative and this is where —

 

[0:36:50.3] KM: That’s why people don’t want restriction a little bit because they want to be creative but you got to have restrictions because humans are needed — We need boundaries, like children. Everybody needs a little boundaries to keep the playing field even.

 

[0:37:02.1] FH: Right. I think that’s where politics comes in, is in establishing those boundaries and then having a voice with the people, whether it’s a planning commission, like in Little Rock, or a state legislature about the quality of the education in the State of Arkansas or at the federal level, where you’re talking about boundaries related to federal policy, whether it’s health, like the NIH or FDA on drug research. How do we keep those boundaries to protect families and consumers and business for that matter and yet create an environment for creativity, innovation and growth?

 

[0:37:40.2] KM: Speaking of free trade and jobs and border and boundaries, what do you think — This is maybe a really hot subject and it’s really not supposed to be — This show is not supposed to be about politics, but this is about business. What do you think about the world economy and it’s a global economic world.

 

[0:38:00.1] FH: Yeah. I don’t know. I’d sort of ask you a little bit about the sales of your products, if they’re all mostly domestic or not, but I just left an Arkansas State Chamber Luncheon, and two of my young friends have had neat manufacturing business, are both women owned business. One in Conway in one over in Sherwood.

 

[0:38:19.5] KM: They need to come on my show.

 

[0:38:20.7] FH: They both. They’d be fabulous.

 

[0:38:22.3] KM: We need a manufacturer on the show.

 

[0:38:25.4] FH: Gina Radkey and Rachel Cox are two great young business women in the metro area and they export. In their business, it’s essential that they export. If you think about American business and services as well as manufacturing, 95% of the customers of the world are outside the U.S. We have to think about how to do business internationally. The purpose of a good trade agreement, a quality trade agreement, however you want to have an adjective, is to open up markets for American services and goods. That’s how we measure success.

 

Global trade is important to Americans. Here in Arkansas alone, 350,000 jobs are tied to trade in our state of just 3 million folks and a lot of that is in the AG sector because we’re a big, big agricultural exporter. We’re the largest exporter of rice, for example.

 

[0:39:26.1] KM: French, if you had no constraints, is there a policy that you would like to put in place?

 

[0:39:32.2] FH: On sort of any topic?

 

[0:39:34.8] KM: Um-hmm.

 

[0:39:35.3] FH: I think one of the macro areas, so whether you’re talking about the Civilian Defense Department or the US Force Service, or the National Park Service, or the VA, it would be wonderful if we had a set of common sense hiring practices where we can recruit people into these jobs, do annual performance appraisals of them and move them out they’re not performing up to standard and recruit additional people and do that in a timely, thoughtful way but not one and fair, that creates an esprit de corps. Where if I look up the chain of command and one of those agencies and I see the person at the top, I know that I report to that person and that I have to do a good job in order to keep my job.

 

[0:40:20.2] KM: That's good. I wanted to say that, but I didn’t know how to say it as great as you did. Fairfield Bay. I love the story of Fairfield Bay.

 

[0:40:27.1] FH: Fairfield Bay is a success story. In the 90s, when Martha and I moved home to Arkansas, Fairfield Bay was a place where we’d go to retreats for business and it was a happening place. Then the Fairfield Corporation went bankrupt, and Fairfield Bay went through a slump but it is a story of self-determination.

 

This mayor, the city council, and the citizens up at Fairfield Bay on the western end of Greers Ferry Lake said, “You know? We’re going to rebound. We’re going to be successful.” They got a convention and conference center reopened and spruced up that spectacular meeting place. Windham has come in and done all their condos.

 

[0:41:06.1] KM: Windham Hotel?

 

[0:41:07.8] FH: Windham Hotel Corporation took over their condos and their timeshare from the old Fairfield days. We were up dedicating the first groundbreaking on 20 Luxury Townhomes overlooking the lake at Fairfield Bay, and it’s —

 

[0:41:23.5] KM: When was that? This year?

 

[0:41:24.8] FH: We broke ground this week and so exciting to see a mayor and a town come together, create a business plan and move their town forward.

 

[0:41:36.4] KM: You got to be tired. You’re everywhere, every city, all the time. You run for congress. You’ll be running again. This is your 2nd term.

 

[0:41:44.0] FH: I’m running my first re-election.

 

[0:41:45.0] KM: Your first re-election. That’s a good when you say it and it's every two years.

 

[0:41:48.1] FH: Right.

 

[0:41:48.9] KM: That just seems like too much but, okay.

 

[0:41:51.5] FH: Our founders put that in the Constitution and we love every minute of it.

 

[0:41:55.6] KM: We’re staying with that.

 

[0:41:56.6] FH: God bless.

 

[0:41:57.1] KM: I know it right? Any last words for our listeners?

 

[0:42:00.0] FH: Just thank you for the opportunity to talk about business and talk about perseverance, and I appreciate the chance to be with you. Of course, appreciate all the listeners being supportive of me as I seek a second term.

 

[0:42:13.7] TB: All right.

 

[0:42:14.7] KM: You are listening to Up In Your Business with Kerry McCoy on KABF 88.3 FM in Little Rock, Arkansas. You just heard Congressman French Hill who was re-elected last November the 8th.

 

[0:42:27.6] TB: That’s correct.

 

[0:42:28.2] KM: To contact any of our interviewees, go to upyourbusiness.org, there you can find podcast of each show, contact information for the person interviewed and links to all the resources discussed on the show and some not. The website is a wealth of information and links. If you’ve got questions or comments for me, email me at –

 

[0:42:45.6] TB: questions@upyourbusiness.org.

 

[0:42:47.8] KM: Or tweet me at –

 

[0:42:49.0] TB: @askkerrymccoy, you should spell Kerry.

 

[0:42:53.2] KM: Our last pre-recorded interview is Al Hodge from Arkansas Capital Corporation.

 

My guest today is Al Hodge, from Arkansas Capital Corporation. Al received his BA from the University of Louisiana at Lafayette. He continued his education at the University of Oklahoma studying economic development in financial services. Al has been named Advocate of The Year by both the Louisiana and Arkansas SBA Financial Services and AY Magazine named him one of the most powerful man in 2015.

 

In addition, Al is passionate about his work with United Cerebral Palsy of Arkansas, and on the wall Arkansas Capital in the River market, he gleefully displays and hosts Second Friday Art in support of local artists. Welcome to the table, Al Hodge.

 

[0:43:50.9] AH: Thank you, Kerry.

 

[0:43:52.9] KM: Before we get down to the nuts and bolts of business, tell our listeners what Arkansas Capital Corporation Group is and does.

 

[0:44:03.0] AH: Well, we've been around since 1957. We are a private nonprofit economic development finance organization. We really do not compete with our local bankers. We do fund loans in partnership with our local bankers and we primarily do deals that fall outside of conventional bank policy.

 

[0:44:24.3] KM: That’s how I met you.

 

[0:44:25.7] AH: That's right. That was a long time ago.

 

[0:44:28.1] KM: I like that unconventional stuff.

 

[0:44:30.0] AH: Oh, love unconventional.

 

[0:44:31.8] KM: I really want to talk about Al the man, but we’re not going to have time because when I was putting together questions for you, it was like four or five pages of questions. I'm going to start questions that I think the listeners want to hear. At the end of the program, if we get to talk about Al the man and what drives you what motivates you, we’ll do that. Your brain is so full of information that all these small business owners and want to be small business owners need to know. My first question; is there one thing you see in all entrepreneurs?

 

[0:45:08.3] AH: One thing in all entrepreneurs. Let's see. Yes, I see drive. I see motivation. Sometimes there’s a lack of planning, but most of all I see the drive and the motivation and that’s where I like to see in my entrepreneurs. Are they really willing to sacrifice? Just like you. You're talking about what you did. You waited on tables for nine years while you sold your flags door-to-door. That’s what I want to see. People are willing to do anything in order to get their business up and running. That shows true commitment.

 

[0:45:41.4] KM: Al, I’m at the dentist's office yesterday. She says that her husband is a want to be entrepreneur.

 

[0:45:49.6] AH: Great.

 

[0:45:50.2] KM: I know. He watches everything. He sees everything. He wants to learn all he can learn, but he's not passionate about any one thing. She says, “How does he figure out what to start a business about and how does he begin?” I know what my answer would be to that, but I want to hear you’re your answer would be.

 

[0:46:10.1] AH: Well my answer is he needs to be looking at a franchise. Franchise businesses in America are some of the best entrepreneurial opportunities you can get into. If you really don't want to know — If you really don't know what you want to do but you want to own your own business, you want to work for yourself, be in control of your future, you really need to look at all of the opportunities that are available through franchises.

 

[0:46:34.4] KM: Wow! I wouldn’t have thought that.

 

[0:46:36.1] AH: That is the best place to start. It really is.

 

[0:46:39.8] KM: And they train you?

 

[0:46:40.2] AH: You’re trained by the franchisor. Every step of the way, you’re helped.

 

[0:46:45.9] KM: Do they finance it for you, or do they come to you and you find finance it?

 

[0:46:49.7] AH: Yeah. Companies like me and banks and other financing sources will finance franchised opportunities. Yes.

 

[0:46:56.1] KM: You deal directly with the person that wants to borrow the money?

 

[0:47:01.3] AH: Yes.

 

[0:47:02.1] KM: When I first met you, I went through a bank. It was Twin City Bank I think at the time and they sold my lung to you, and that’s how I met you.

 

[0:47:10.6] AH: Really, how it happened, was a lot of times when a bank cannot do what the borrower needs, they will contact us because they know we can probably get it done. When I say they can’t get it done what you need is because of bank policy, because of federal regulations. Some reasons why.

 

[0:47:30.2] KM: Don't you have the same guidelines?

 

[0:47:31.2] AH: No, we really don’t. We’re not governed by the FDSE or the OCC or any other bank regulatory organization. We’re really governed by such agencies as the SBA, and as long as we’re following the SBA policy, we can do a lot that banks cannot do.

 

[0:47:47.6] KM: Would you say the SBA is your best partner?

 

[0:47:49.9] AH: As a lender? I say the SBA is my best partner. As a small business owner, it’d say the SBA is my best opportunity to do what I need to get done.

 

[0:47:59.3] KM: What about a partnership? What if somebody says, “My friend have a business and he needs some money and some capital infused into the business and I want to buy into this business as a partnership, and we’re friends.” Have you seen that very many times?

 

[0:48:16.3] AH: I've seen that a lot of times. Unfortunately, I've seen it break up friendship. I’d be very careful about going into a partnership because even if y’all are good friends going into the partnership that doesn’t mean you’re going to remain good friends throughout the time.

 

[0:48:35.7] KM: Let's say you're not friends and you meet strictly as two people that have the same vision about a business and you're not particularly friends and you met on a business relationship. Do you do 50-50 in a partnership? Is that how you keep it fair?

 

[0:48:47.0] AH: It all depends on who’s bringing the money to the table. The person with the money is one that’s going to be in control. I see that a lot with entrepreneurs. They have an idea but they have no money, and they want to get an investor, but the investor wants the majority of the company and they’re not willing to do. Well, I am sorry if you don't have the money, you're going to have to do what the investor is requiring of you to do if you want to go into business.

 

[0:49:15.5] KM: Money talks.

 

[0:49:16.1] AH: It really does.

 

[0:49:17.8] KM: The person who puts up the most money obviously owns the most of the business and gets the last say, and can you live with that? It’s a personality decision you have to make.

 

[0:49:25.2] AH: Absolutely. That’s exactly what it is. I recommend you do that as a last resort.

 

[0:49:30.2] KM: One day, I realized that none of my employees knew the difference between an income statement and a balance sheet.

 

[0:49:36.3] AH: That’s interesting. A balance sheet is a photograph of something on a particular day. A balance sheet is on a day and it photographs your assets, your liabilities, and your net worth. On that particular day, you may have cash in your checking account.

 

[0:49:57.3] KM: That’s an asset.

 

[0:49:57.7] AH: That’s an asset, cash of $3,000. You may have receivables of $4,000 that’s another asset.

 

[0:50:03.7] KM: That’s an asset.

 

[0:50:04.8] AH: You may have inventories of $4,000.

 

[0:50:07.3] KM: Another asset.

 

[0:50:08.3] AH: Another asset. Then you might have some other current assets. In addition to that, other assets you might have or known as fixed assets, which should be real estate, machinery equipment, automobiles.

 

[0:50:20.8] KM: Computer.

 

[0:50:21.5] AH: Computers, those kinds of things. That’s all fixed assets and then after that you may have another asset that is intangible. You may have some goodwill or –

 

[0:50:29.7] KM: Flagandbanner.com is an intangible asset.

 

[0:50:32.1] AH: It’s an intangible. The name itself has value. Those are your assets and you total those assets up and all those assets have a value. Then you look at your liabilities, the things that you owe. You may have payables from your vendors. You buy on a daily basis. You don’t pay cash. They invoice you. Those are payables. That is a liability. You may have a line of credit at the bank. That is a liability. You may have a mortgage on your building.

 

Your mortgage will have two components in your liabilities. It will have a long-term portion and it will have a current portion. The current goes in the current portion of your liabilities and the long-term goes into the long-term portion of your liabilities. You have your assets then you have your liabilities. You’re subtracting your liabilities from your assets and hopefully there’s a positive number there.

 

[0:51:24.4] KM: What’s that number called?

 

[0:51:25.7] AH: Well, it’s the net worth of your company.

 

[0:51:28.5] KM: It’s your net worth.

 

[0:51:29.4] AH: It’s your net worth. A net worth is made up of retained earnings and hopefully your business —

 

[0:51:34.5] KM: Retained earnings or what came over from the year before.

 

[0:51:36.4] AH: Come over from previous years, from all the years before. Hopefully, that’s a positive number if your company has been profitable. If it has not been profitable and you’ve had losses, that number could show negatively which in the banking world is not what you want to see. If you take your current assets, you subtract your liabilities and you come up with a net worth, hopefully your net worth is positive and on that particular day, that’s what’s a balance sheet is.

 

[0:52:07.2] KM: Your balance sheet has nothing to do with your daily expenses of rent, utilities.

 

[0:52:17.1] AH: Correct. That’s all on the income statement.

 

[0:52:19.4] KM: Payroll, cost of goods. I think it was very hard for me to really separate those two things. When they come to you to borrow money, you want an income statement.

 

[0:52:29.5] AH: And a balance sheet.

 

[0:52:30.8] KM: You want a balance sheet too?

 

[0:52:31.8] AH: Balance sheet and a cash flow statement. I want all three.

 

[0:52:34.8] KM: Well I’m hiring somebody for that cash flow statement.

 

[0:52:37.7] AH: You have your balance sheet, which is a photograph of your assets, your liability and your net worth on a particular day. One particular day. You have your income statement which covers a period of time. Your income statement covers if your fiscal year starts on January 1st of each year and ends on the December 31st. Your income statement will start on January 1st, and whatever month you’re in, you’ll stop at that month. Let’s say you’re stopping in the end of May. Your income statement will cover those five months, but your balance sheet just covers one day. Do you see the difference between those two?

 

[0:53:11.9] KM: Yes.

 

[0:53:12.5] AH: Then what happens on your cash flow statement is it’s the relationship between the balance sheet and the income statement.

 

[0:53:21.1] KM: How often do you think an existing business should look at their income statement and balance sheet? I know how much I look at mine. I know my ratios.

 

[0:53:28.1] AH: Every month. When you close out the month, you need to be looking at your balance sheet and your income statement and the cash flow of the company every month.

 

[0:53:37.9] KM: Every month and there’s specific ratios you can run that I was probably in business for a long time, but boy I realized that these bankers have these set of ratios that they run and there’s quick assets and —

 

[0:53:49.0] AH: Current ratio, the quick ratio, the days receivable. How many days do you have in receivables? That’s what you need to know.

 

[0:53:57.7] KM: That’s a big one.

 

[0:53:58.5] AH: Because if your receivables are lengthening out, if you’re supposed to have 30 days in receivables and you’re seeing it’s 45, it’s 60, it’s 90, you have a problem. Why are you not collecting?

 

[0:54:09.4] KM: The longer it goes, the less likely it is that you’re going to collect it.

 

[0:54:12.4] AH: Correct.

 

[0:54:12.6] KM: My sales have gone down and I’m starting to know that and I’m starting to go and I’m starting to write my vendors and my payables are getting higher and my receivables and cash are getting lower. If you wait, and this is something I really think the listeners need to hear. If you wait till you are needing the money –

 

[0:54:31.3] AH: Oh it’s too late.

 

[0:54:32.2] KM: It’s too late. I didn’t know that. You have to be forecasting monthly and you have to know if you’re going to need the money, and then you go to the banker or your bank and you say, “I need a line of credit against my inventory because —”

 

[0:54:45.0] AH: Or your receivables.

 

[0:54:45.9] KM: Or your receivables — To help me through this hard time that’s coming up but if you wait till it’s already —

 

[0:54:52.4] AH: You can’t borrow money for this Friday’s payroll, so to speak. You’ve got to be more progressive than that. You’ve got to be ready. You got to know that you’re going to need that.

 

[0:55:01.7] KM: I think that your banker likes to see that you are being proactive and that you’re looking at your stuff. That a lot of the times, I did make this mistake when I was young and I waited till I was already in trouble because I didn’t look at my income statements enough.

 

[0:55:16.8] AH: Correct! People wait too long. You’re exactly right.

 

[0:55:19.3] KM: That was a great hour Tim.

 

[0:55:21.8] TB: It was.

 

[0:55:23.4] KM: I know. I learned some stuff from my own show listening to it again. That was great. To our listeners, thank you for spending time with me. If you think this program has been about you, you’re right but it’s also about me. Thank you for letting me fulfill my destiny. My hope today is that you’ve learned or heard something that’s been inspiring or enlightening and then it, whatever it is will help you up your business, your independence or your life. I am Kerry McCoy, be brave and keep it up.

 

[END OF INTERVIEW]

 

[0:55:49.9] TB: You’ve been listening to Up in Your Business with Kerry McCoy. Want to hear today’s program again or want someone else to benefit from it? Jot this down. Within 48 hours the podcast will be available at flagandbanner.com. Click the tab labeled “Radio Show”, there you’ll find today’s segments with links to resources you heard discussed on this program. Kerry’s goal: to help you live the American Dream.

 

[END]

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