Three options for finance

While exploring my options, I met with some folks in the venture capitalist community. Sunfitters is a retail company, not a tech company. I didn’t need more than $600K at the MOST, and investors are only interested in BIG BIG returns. Even if I could by some miracle show this would blossom into a huge number, I would have to give away more than half the company to get an angel investor interested. And the angel would put us on a fast track for VC money, and then a liquidity event for tens of millions at a minimum. C’mon now.

Turning to another source, I spoke to some commercial lenders to finance the business. But I learned that borrowing would have been a lot easier BEFORE the company opened its doors. To get a small business loan post-launch would require more of my own assets… and I’m simply tapped out.

So I chose the only viable option: a slow growth plan. That meant we would have to get scrappy using working capital. What does it mean to “get scrappy?” It means I would have to go back to work.

Go BACK to work? I thought you WERE working…

You have to pay yourself if you’re working for yourself. And for Sunfitters, that just wasn’t happening. Most of our savings was going into the mortgage and home expenses. Sunfitters was in the black. But the money at home was still going fast.

In late Spring, I ran into an acquaintance of mine at Shop.org. Out of the blue, she told me Forrester Research was looking for a new retail analyst to cover eCommerce, mCommerce and store kiosks — and had hoped I’d be interested. After a few months of courting the idea, I took a few weeks off in June and started the new job on July 2. The plan was that I would find a business partner to run Sunfitters.com (with my wife’s help) while I returned to work to earn a paycheck.

In the first 4 months on the job, I was lucky to meet scores of retailers and dozens of vendors. I brought in new business, delivered speeches, worked with the press, written research, and done quite a bit of retail and IT consulting. But while I was putting food on the table, Sunfitters was on auto-pilot. Auto-pilot is no way to grow a business.

I wanted this second job to give me visibility. Unfortunately, the firm will not allow me to identify the business I own, or in any way associate myself with them in this private venture. It’s was awkward when industry clients and colleagues who know me from Sunfitters brought it up at the firm.

At the end of my first quarter, I’d blown through my consulting quota by 530%. But no matter how much time and energy I gave the firm, there is an uneasy sense that I could still do more if I gave up on my business. I could no longer work 70 hour work weeks AND succeed with Sunfitters. So I made a very difficult decision to protect my investment, and resigned from the firm after a remarkably short tenure.

How then will I earn income while keeping the retail business running? Consulting! I hung out a shingle with the name B2C Partners to advise other retailers and solution providers — while growing Sunfitters. Now I work on a more manageable schedule I arrange with my clients.

After all, what is the intended benefit of a corporate blog? Naturally, it’s organic search engine traffic …which is derived from a high page rank …which is produced with inbound links from other relevant sites.

That’s all well and good. But as of today, your Yahoo blog must be installed on a separate subdomain from your store. In my case, I’m forced to address it in the domain SITE.sunfitters.com rather than a subdirectory of WWW.sunfitters.com. Why is ths bad? Well because when determining page rank, search engines count different subdomains as different sites.

As I write relevant content on the Yahoo Blog, it will help the page relevance of SITE.* — but will only indirectly affect page rank in the store. After attending a local user group in Boston of SEO’s who use corporate blogging, the consensus was that the URL scheme for corporate blogs makes a big difference in SEO results.

Ideally, the blog should be in a subdirectory of the site whose keywords you wish to optimize. In my case, I want it in www.Sunfitters.com/blog — but Yahoo won’t allow it if I use their Store Manager. A response from Yahoo! Support reported this:

“Thank you for writing to Yahoo! Store Support. I understand that you would like to change the Blog URL from ’site.sunfitters.com/blog/’ to ‘www.sunfitters.com/blog/’. We are sorry, Bill. Since the Domain Traffic for your Store is directed to your Store pages, the Blog URL will only be available through the ’site.sunfitters.com/blog/’ link. We do not currently have an estimated time for if or when this feature or any other features may be released. Regards, Yahoo! Customer Care”

So if Yahoo merchants want to develop relevant content that lifts search engine rankings of their store, then Yahoo’s social networking tools need some work. In the meantime, I guess we’ll rely on landing pages and link building techniques focused exclusively on merchandising product — which in my opinion, isn’t ideal content for link baiting.

One can only hope they fix this soon.

USPS
If you are shipping media (books, CDs, videos), USPS is far and away the most affordable option. You can sometimes save 50% or more on every delivery. Unfortunately, USPS doesn’t guarantee delivery times without paying through the nose for express.

FedEx
There are two completely separate companies that operate under the FedEx brand. There is Federal Express and FedEx Ground. The rates for FedEx Ground shipping are identical in every way to UPS. And feature-for-feature, they stack up pretty evenly. But in my eyes, there are two major advantages to UPS. (1) I have several UPS Stores nearby if I need their help; and (2) UPS built its shipping business from “the Ground” up (pardon the pun). FedEx started with overnight, and is still just getting into the ground business. If most of your shipments are overnight (for example, perishables) I would choose FedEx. Otherwise, UPS can’t be beat.

UPS
In addition to having a great ground shipping business, UPS can help you in several other ways. For less than $20 per week, UPS will set up a daily pickup account. With this, a driver will stop by your place once a day to pick up outgoing packages. Plus you get access to the following…

(1) UPS provides free boxes. For less than $20 per week, UPS will stop by your place for daily pickups and supply you an unlimited number of FREE boxes and other packing materials. They don’t do bubble wrap, but they will give you a variety of different sized envelopes and boxes including shipping tubes (which are handy for our beach umbrellas). When you need to resupply, just call the toll free number and boxes will arrive the very next day. These are not large boxes. But they are large enough to send most apparel and items 18″ x 12″ x 3″ or smaller. NOTE: Some boxes marked for Express say “Do Not Use for Ground Shipping.” However, both the rep and the driver tell me that UPS does not enforce this. You can ship ground in any box you like, regardless of its markings.

(2) UPS provides free shipping labels (and a label printer). All your shipping labels are free, whether sheet fed or spool fed. A variety of label sizes are available. For an extra $2 per week (still under $20 total), they will supply you directly with a Zebra Thermal 2844 label printer that connects to your computer and shipping scale via USB or serial cable. It requires no ink, and is perfect with 4″ x 6″ shipping labels.

(3) UPS offers more technology subsidies. The Customer Technology Program (CTP) subsidizes your business with vouchers to purchase warehouse technology like free computers (from HP, Dell, Lenovo or Gateway) and free shipping scales (from Fairbanks or Toledo). Just get in touch with your local account representative and have them come to your physical location. The local account rep will assess how much they believe you will ship on the average day, and use that to calculate the level of subsidy. This process takes a month or more to complete. But it can provide you up to $1200 or more for equipment.

(4) UPS discounts shipping rates. Daily pickup accounts automatically pay less for shipping than standard rates. But you can save even more. Once you’ve met with your local account representative, ask them to propose a sliding scale discount rate card. This will take a week or two for them to complete; and you will need to execute a simple agreement stipulating the conditions under which these rates will apply. After the agreement is in place, the more you ship, the more you will save. We expect to save 30% off the daily pickup rates (which are already discounted from the standard rates).