There are lots of updates to do here on the blog, but this one is just so exciting that it trumps all others.
Radiant Photography is debt-free!
Last week we made the last payment on our only open credit line and it’s an amazing feeling. It’s probably the only time you want to see zeros on your books, but man is it sweet.
The economy went south some time ago and, despite what some pundits say, I’m not counting on it turning around anytime soon. With that in mind, I started looking at smarter ways to do business and areas I can streamline. Paying interest to a defunct credit company seemed like a good place to start.
I have to give a big sarcastic thanks to Advanta, cause it wouldn’t have happened without them. Earlier this year, we got a notice from Advanta stating that the trust they use for funding credit lines was gone, thus our credit line was gone as well. Many, many small businesses got the same letter. With very little notice, many business owners were scrambling to secure other credit lines, find venture capitalists, beg for family loans, and turning to invoice factoring to facilitate quicker invoice collections. (Advanta just filed for bankruptcy this month. Read how it will affect small businesses here.)
Then as the year raged on the credit companies got greedy with fun moves like surprise interest hikes, penalizing full-balance paying customers, and other shenanigans. This didn’t affect us since we had no available credit to charge to, but it did light a fire of hatred inside me toward the way the credit industry is currently operating. I vowed to pay off Radiant’s credit line and try a new trend gaining a foothold in America called…(gasp!)…SAVING!
Radiant has always had a conservative fiscal mindset. From the outset, owning a studio or leasing a huge space was not in the five year plan, nor was over-leveraging to acquire needless equipment. For example, I built the upgradable computers our work is produced on, instead of overpaying for systems that would be obsolete in a year. We’re frugal, no doubt. In good times it might appear we don’t like to party or indulge in expensive thank you gifts, but we’re alive and kicking in these down times as a result. I’d much rather give clients consistency than be a boom-or-bust business that disappears when things get rough.
I can’t say that we won’t take on more debt in the future to expand or invest in equipment. In fact, I’m pretty sure we will, but it will be through different avenue than credit cards if their industry continues to falter. Businesses need capital to grow, hire employees, pay vendors, etc, but for now we’ll be doing so with cash savings. We’ll also trim back in areas we can afford to trim (selling space-sucking equipment we no longer need, negotiating cash rates with our suppliers, etc). It feels good to be debt free and streamlining the business. It feels even better to be doing it while business is good and we have happy clients, instead of a last ditch grab at saving what’s left of an ailing business.
When credit regulations are tightened, the economy turns around a bit, and lenders realize what true customer service is, we’ll change our tune. Moreover, I’m hoping people start saving more, forcing lending institutions to realize they need us more than we need them.