Marty Metro funded his small business with savings, installment loans, and bank lending. His business was eco-friendly by providing used moving boxes to the greater metro area. He quickly opened one business, then another, and then another. With a total of three locations, most people believed his business was the next big thing. Though they saw the growth, he knew about the inside working of the company. He said, “The sales weren’t the problem. It was the operational costs. We couldn’t get the boxes, inventory them, store them and sell them in a way that actually made money.”

He ended up closing the business three years later, sinking in $300,000 worth of debt. His solution was to regroup, get a day job for a few years, and then focus on reopening the business. That’s just what he did and made it a point to maintain communication with all his investors. When the time was right, he approached them to raise the venture capital to reopen. Now, he runs the new version of his eco-friendly box company, but this time via an online version.

The small business owner who failed

In today’s society, a new breed of business owner has been born. It could have been the recession that caused businesses to develop a new resiliency, or it could be something more innate within an owner that draws them to persevere. Metro, looking back at his first failure, said that what pushed him to try the second time were the relationships he forged throughout his first difficult business venture. Shikhar Ghosh, teacher at Harvard Business School, said, “What you build up when you start a company is a network of people—investors, vendors and suppliers. In the US, there is a huge willingness to back you again if you have been honest in your dealings with investors.”

How business owners who fail are viewed

Some people worry about how they are perceived when it comes to failing a business venture. There is a lingering stigma that unsuccessful business owners will be thought of as failures in future endeavors. New research is showing, however, that it is not the case.

For business owners who maintained a level of trust with their accountants, credit companies, vendors, issuers of installment loans, business loans and investors, it’s notably easier to delve back into the business world. Even failed business owners who want to move into the same industry are being welcomed and encouraged by associates. Ghosh said, “Your track record stays with you. Not so much whether your business failed or succeeded, but how you deal with adversity. That reputation aspect becomes critical.” Metro added that he agrees with the importance of relationships in business saying, “I still have some of the same employees that worked with me at my first company. I couldn’t pay them when I had to close down my first company and they still came back and worked with me again.”

Attributes of a Successful Business Owner

When it comes to categorizing successful business owners, it’s difficult to say what exactly makes them determined enough to persevere. One thing that they do all have in common according to research is their 20/20 hindsight. Ghosh added, “You just go the most incredible market research…ask yourself, ‘Where are the areas I could have planned better?’” Planning the second time around should be done the same way it was done the first, but with a new pool of knowledge. Though business owners still have to deal with the same processes like accounting, marketing, shipping, storage, installment loans, bank loans and investors, they now come to the table with more experience to draw from.

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As long as they're OK, consider installment loans for your business's short-term financial needs. (Photo: flickr.com)

Small businesses are looking to installment loans rather than stocks for funding options. Before the recession, many small businesses were investing in the stock market, trading for added revenues. Dallas-area financial planner Chance Woods stated his clients have a “mixed feeling of relief at stock gains since March, and are reluctant to fully commit to the market.” Research is showing that most small business owners are feeling the same hesitation. The financial hit many of them took due to last years’ recession is having a huge effect on their confidence to move towards stock investing again.

Woods added, “People have been on an emotional roller coaster over the last two years, so they’re not quite ready to say, ‘I’m all in’…it’s going to take some time for them to recover and a lot less market volatility than we’ve seen.”

Alternative Investing

Although alternatives to stocks like money-markets and savings accounts were popular, it seems now that the return on investment is so low, business owners are hesitant there, too. According to Bankrate.com, the current rates for both modes of investments average about 1.5 percent around the country.  Seeing the lackluster interest rate, many business owners are opting for immediate installment loan options rather than wait out slow and minimal returns of other investing vehicles.

A Case in Point

Donnie Griffin, owner of a management consulting firm in Palm Springs, California, invested his money wisely. However, when the recession hit hard, he sold a good portion of his $250,000 portfolio. One week later, the stocks saw their biggest gain throughout the recession period. Griffin agreed he had “unfortunate timing” in his decision, but he also said that he wouldn’t venture back into the stock investing market easily. “Once you make a decision I think you’ve got to just ride it out… having experienced this drop, I’m better experienced for the next time one comes around.”

Griffin is not alone. As a business owner, his sentiments are shared nationwide. Many people lost a lot of money in stocks during the down economy. Although Griffin is patient, a lot of others aren’t. They want a more solid way of guaranteed money. Installment loans for a lot of qualified small business owners are proving to be that option. These types of loans are quick and simple for the qualified applicant. They potentially can bring money in when small business owners need it most. Rather than wait out a long-term investment and then reap only a small to moderate return, business owners are more confident in alternative types of loans.

No Guarantees on the Market

The most difficult thing for investors is that there is never a guarantee of market growth. The market is volatile and may take another turn for the worse. Robert Haley of Advanced Wealth Management stated, “It’s a gamble to hold and not sell now, and it’s a gamble to go all-in.” He believes that the way to mitigate the gamble is to build a long-term portfolio, but not rely on it for immediate funding. His belief is that a portfolio is never for immediate (or even moderate-term) funding. A better option may be immediate installment loans, or assets that are quickly liquidated. These are the types of funds that small business owners should have readily available for times of trouble.