I have a problem with my business. For years, I have operated a small pottery studio and I have been able to survive from it over the years. However, of late, I have had a series of problems running it. One primary issue is materials: The only local producer of the type of clay I primarily use went out of business.

Another problem is that many persons seem scared of late to invest in art because of the recent economic scares. I am considering going into the multimedia and printing business, as I have had some training in that area. However, the issue I have is that to secure the funding for this enterprise banks usually demand security to borrow the funds against. I have no assets of any major value and most people these days are not willing to stand as guarantors for others by putting up their own assets as security. Do you have a solution to this issue? I really would love to hear it.

WJ

Kingston

Response from Dave Thompson, president of AlexCole Consulting, firm specialising in developing marketing strategies, new-product development and strategic planning:

Dear WJ:

From the information provided, I gather that your business was able to afford you a reasonable living during the years you operated it. You are now affected by two factors: The loss of a major supplier and the coincidence of a global economic crisis.

The current economic conditions you cannot control. However, the loss of a major supplier is a classic example of what can happen when a company employs a single-source-supplier strategy without investigating alternative suppliers in the market from time to time. As is the case in this situation, when that supplier goes out of business or experiences difficulty meeting its obligations, there is an immediate and potentially damaging impact on the business. Typically, this can be avoided if a company conducts periodic reviews of its supply-chain-management processes to ensure it is not caught off guard.

I understand the motivation as an entrepreneur to consider entering a new business when one appears to be failing. Allow me to examine the issues I see with your pottery business.

Market online

Art and craft remains a very good business today since people are always looking for ways to decorate their homes, office environment or use items as gifts. It is a business that requires both location and many events to drive sales. For example, people tend to be more receptive to products like yours at venues such as major entertainment events, bridal shows, car shows, tourist sites, hospitals.

I would also recommend that you investigate if you can work out a distribution arrangement with a retail or gift store.

Going online to sell your pro-ducts may also be an option.

It is quite possible that you could source a new supplier who could provide a similar quality of clay without compromising your standards. In the current economic climate, suppliers are eagerly seeking new clients and you may actually find that with a new supplier you may lower your production costs by successfully negotiating a better price.

No doubt, raising funds today to expand your business is a challenge, particularly since you say you have very few assets. However, your skills and business experience in making pottery is a valuable asset. If you are able to source a new supplier, seek new channels to display, distribute and sell your pottery. All this may contribute to the business' ongoing viability.

Another way of raising funds is to obtain small loans in increments from family or friends who are familiar with your skills and trust your business experience.

Continue education

Eventually, by doing this, you may find that you have sufficient sales projections to approach a bank about a small-business loan.

With regard to your interest in multimedia, this is a significant departure from your current experience and you are correct in assuming that a bank would need to evaluate both your experience and assets in order to lend to you. This is likely to be a risky time to launch a new business given the current economic environment. Your limited experience and, perhaps, lack of industry knowledge, will also be contributing factors.

Nevertheless, if this is indeed your new passion, I would suggest that you continue to take courses in multimedia and/or perhaps, seek an apprentice role with a company, where you can learn first hand what the business requires to be successful. If you truly have the passion, you will succeed despite the odds.

Finally, make a list of your skills, experience and the opportunity in both businesses. At the completion of that exercise, I am sure you will come away with a decision that makes sense for you.

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