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Last Update: Wednesday March 3, 2021

Key Idea: Bankers Want Plans on Paper

Bankers like Tricia Maxon can make loans when they see things in black and white.

Key Question:

A: 

A written business plan will win support for your company: Paula and Margaret call their business plan, "The Book." Their banker, Tricia Mason, was so impressed with it that she helped the company by consolidating their debt and arranging an SBA-backed loan. It later became the key document for a Direct Public Offering.

Q: Can "The Book" serve a purpose other than for raising money?

A:
Yes. It is a fantastic tool for recruiting employees and for training and motivating people to stay with you. When there is a question about values, mission and vision, everyone can go back to "The Book" to see what Paula and Margaret actually want to accomplish with the business. Also, for the owners of the business, "The Book" helps them stay focused.

Q:
How did Tricia help Jagged Edge?

A: As a banker she was able to consolidate their debt. Paula and Margaret had accumulated credit card and individual loan debts and were paying 18-20% interest on this money. Tricia's bank loan paid off these old loans and formed a new loan at a lower interest rate. The cost of money is critical to every small business owner. 

Think about it

What kind of written plans do you make annually, quarterly, monthly, weekly?

Clip from: Jagged Edge Mountain Gear

Enjoy your summer while you have it!  Winter will return!

Telluride, Colorado and Moab, Utah: Deep-seated within every American is the dream of starting and owning a business. Most of us are barely aware that this concept is deeply ingrained in our culture. The modern concept of a corporation actually has its roots in the American revolution. This drive to start a business -- to incorporate under a name -- mystifies much of the world and it has a lot to do with one's sense of purpose or "calling" and also one's process of self-actualization.

In this episode of the show, you meet many very special people, but the stars are Margaret Quenemoen and her sister, Paula. It will become quickly apparent that they are identical twins who share a huge love of life. Their honesty and integrity, their openness and their achievement, their vision and their tenacity, over-qualify them to be our MasterClass teachers.

So, let's drive into the deep mountains of Colorado to look at their foundations, business plan, financing, direct public offering, and so much more.

We'll learn what went right, what went wrong, and what their vision of the future is.

Jagged Edge Mountain Gear (MQ)

Margaret Quenemoen, Founder

223 E. Colorado Ave.
PO Box 2256
Telluride, CO 81435

Visit our web site: http://www.jagged-edge-telluride.com

Business Classification:
Retail

Year Founded: 1991

Bankers Want Plans on Paper

In their pursuit of investors, Margaret and Paula have written what they call `The Book,' a detailed business plan.

PAULA: (Voiceover) Every investor or bankers or the people that deal with us, it's their dream. It has everything about our company they need to know. I can hand it to a PR firm, I can hand it to somebody that's writing an article on us, everything you need to know about Jagged Edge is in that business plan. Even new employees that come on board.

TRICIA MAXON (Banker): My baby has Jagged Edge clothes, my husband has Jagged Edge clothes. I skied in my Jagged Edge bibs today.

HATTIE: (Voiceover) Tricia Maxon is not only their banker, she's their customer, too.

TRICIA: ...because they were the typical business that started in a garage, they'd financed their business through credit cards, begged, borrowing and stealing from family and relatives. They got some investors to come in and invest in the company; they weren't loan sharks, but they were getting over 20 percent interest rate.

HATTIE: Oooh.

TRICIA: And so they came in with this passioned plea for money and this amazing business plan of where they were gonna go. I played with the numbers a bit and said if they could stop borrowing money on their credit cards at 18 percent to finance the business, and 20 percent, and they actually cut their interest expense, they could really actually start making some money and make a go of it.

And we put together this enormous package for the SBA, and didn't really know where it was gonna go, but we worked really hard at it, and they came back and they said, `Yeah, we'll do it.' So we made them the loan, and they were just the hardest-working girls and great people, and like I said, a good reputation in town. So it was a lot of fun to work with them and it just grew from there.

They were growing so fast, I think from--I was looking at the numbers this morning to refresh my memory--but their sales grew 50 percent the next year.

HATTIE: So the lesson to others is...

TRICIA: I would say the lesson to others is that financing a business on credit cards and 20 percent interest rates isn't the way to go, because you spend all of your time trying to make enough money to pay back the debt service, kind of like our government does, you know.

HATTIE: Right.

TRICIA: "... and to come and talk to a banker, and come in with a business plan and say `This is my vision, and this is where I want to go. We have the experience, and look what we're doing and look where we've come, from making headbands in the garage, and we can do it.'

You've got to find a banker who says `Wow, that's a really neat project, and I believe in you.'

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