Speaker 1: For Fukuan Blal, CEO of the nerg Capital Fund. He
Speaker 1: still remembers the two thousand and eight housing market crash
Speaker 1: like it was yesterday.
Speaker 2: I came home and me and my wife actually was
Speaker 2: in our room and she had the news on, and
Speaker 2: she was like, oh my god, do you see what's
Speaker 2: happening to market? This is crazy. Brokers were calling me saying, hey,
Speaker 2: the deal is going to close. The bank pulled out.
Speaker 2: I'm like, what is going on? And then overnight, boom,
Speaker 2: the lights just went out, just like that. I was like,
Speaker 2: the rug got pulled from under my feet. The banks
Speaker 2: stopped lending. I had deals literally at the closing table,
Speaker 2: lined up the clothes, and all the funding got pulled.
Speaker 2: So when they stopped funding the closing, my business was
Speaker 2: on standstill.
Speaker 3: You took all the losses two million dollars of your
Speaker 3: own money out the door.
Speaker 4: Absolutely.
Speaker 1: Welcome to the Unshakables from Chase for Business and Ruby
Speaker 1: Studio from iHeartMedia. I'm Ben Walter, CEO of Chase for Business.
Speaker 5: And I'm Tanyannie Well, a lawyer and consultant for business owners.
Speaker 1: We're sharing the daring stories of small business owners facing
Speaker 1: their crisis points and telling the stories of how they
Speaker 1: got through it.
Speaker 5: Hey Tanya, Hey Ben.
Speaker 1: I think today's episode is really inspirational. There's so much
Speaker 1: to learn from Fukuan, how he's persevered in life and
Speaker 1: in business, and how he's using his company to give
Speaker 1: back to his community.
Speaker 5: Can't wait to hear this one.
Speaker 1: On today's episode. An MG Capital Fund from Newark, New Jersey.
Speaker 1: Now here's a little behind the scenes about the show
Speaker 1: for you. We recorded a lot of this in New
Speaker 1: York City, but Fuquan is from Newark, which is only
Speaker 1: about thirty minutes west of here. Now the Newark from
Speaker 1: when Fuquan was growing up, it looked a lot different
Speaker 1: than it does today.
Speaker 2: If you can remember early eighties, it was a lot
Speaker 2: of drugs an the area. To walk out your door,
Speaker 2: it is crack bottles, dope, syringes. But we were sheltered
Speaker 2: from that from my mom putting us in private schools.
Speaker 4: My mom was a single mom of five kids when
Speaker 4: I grew up.
Speaker 2: Remember having candlelight dinners because the powers out having no electricity.
Speaker 1: Fukuan's mother had cleared a safe path for her children,
Speaker 1: and while he didn't fully realize it at the time,
Speaker 1: she'd also given him the foundations to one day start
Speaker 1: his own company.
Speaker 2: When we were younger, my mom would take us to
Speaker 2: Chinatown to get the scarves, hats, gloves, and then we
Speaker 2: would go back to Noork at the bazaar and we
Speaker 2: would sell them. Me and my younger brother would sit
Speaker 2: there and sell items from the table, and every one
Speaker 2: hundred dollars worth of the items we sold, we would
Speaker 2: get twenty five dollars and pretty good margins. Yay, yeah, yeah,
Speaker 2: Well she was flit the profits with us fifty percent,
Speaker 2: and I loved it.
Speaker 1: Fuquan knew he liked talking to people, but he didn't
Speaker 1: think a ton about starting a company someday. For him,
Speaker 1: it was more about making money.
Speaker 2: My first real sales job was in telemarketing, and that's
Speaker 2: when I learned what they say, you had the gift
Speaker 2: the gab. So within six months I went from starlin
Speaker 2: on the phone making minimum wage to having the night
Speaker 2: shift as a manager, to be in a direct.
Speaker 4: That seals for this company.
Speaker 1: But he saw a cousin of his in arch Nemesis
Speaker 1: his words, not mine, making a ton of money working
Speaker 1: solely for himself.
Speaker 2: He was started offrom real estate before me, and I
Speaker 2: remember him doing a deal and making like forty fifty
Speaker 2: thousand dollars something like that, and he was like, I
Speaker 2: make more than you, and you working for the man
Speaker 2: and everything else. So I started to shadow home around
Speaker 2: and speak to contractors and I was like, Wow, this
Speaker 2: is really great.
Speaker 1: So Fukwan quit his job and started working at his
Speaker 1: cousin's business full time. His role was to consult with
Speaker 1: prospective homeowners and build a network of potential buyers. To
Speaker 1: get people in the door, he would hand out flyers
Speaker 1: for free seminars where he'd teach aspiring homeowners about how
Speaker 1: to qualify for loans and earn passive income for mental properties.
Speaker 1: It made him feel good to pass along what he
Speaker 1: had learned about real estate from his cousin to his
Speaker 1: own community.
Speaker 2: We was never taught financial literacy where I grew up
Speaker 2: at let alone, you know how to qualify for home right,
Speaker 2: it was only for middle class and upper class people.
Speaker 2: So being able to do that value add and give
Speaker 2: that back to the community from education I knew, and
Speaker 2: nobody was doing that. Nobody was coming to the hood
Speaker 2: so to speak, and educating people on how they can
Speaker 2: get a foot in and get a lake up.
Speaker 4: So it felt good.
Speaker 2: That was what gave me my full of the importance
Speaker 2: educating the community on what they can do to have
Speaker 2: financial freedom.
Speaker 1: And his seminars they were working. He was helping dozens
Speaker 1: of people learn how to become first time home buyers
Speaker 1: and passing along those connections to his network of realtors
Speaker 1: and loan officers, and timing was on his side. Around
Speaker 1: this time, banks had made it really easy for folks
Speaker 1: of all financial backgrounds to qualify for loans.
Speaker 2: The banks were literally approven any and everybody, so it
Speaker 2: made it easier for people to qualify. So you would
Speaker 2: actually go out to a seminar and educate people, and
Speaker 2: then people would take the leap forward and take action,
Speaker 2: and then that would spread like wildfire.
Speaker 1: He was also helping his cousin's company fix up and
Speaker 1: flip properties for profit. He focused on reinvesting in his
Speaker 1: own community, Newark, New Jersey, where he grew up. How
Speaker 1: did you make that happen in a way that was sustainable.
Speaker 2: There were a lot of dilapidated properties, a lot of
Speaker 2: burnt out properties, vacant properties, and it was just a
Speaker 2: war zone pretty much. So being able to start going
Speaker 2: and repair properties block by block and bringing the community
Speaker 2: back gave us an opportunity for the town to get
Speaker 2: properties back on the tax road and give the residents
Speaker 2: a better place to live.
Speaker 1: And it wasn't just properties. Fu Quan also gave formally
Speaker 1: incarcerated people jobs that they usually couldn't get.
Speaker 4: Growing up in NewYork.
Speaker 2: These were the people that were in my community, friends
Speaker 2: and family members of course, who ran the streets and
Speaker 2: got involved with the wrong thing. And I know these
Speaker 2: were good people, right, there's good people in bad areas.
Speaker 2: They just caught up from what's happening in the community.
Speaker 2: So for me, it was an opportunity to kind of
Speaker 2: throw the lifeboat in, right. So hiring these people gave
Speaker 2: them more of a chance to be employee, first of all,
Speaker 2: and have the confidence that they actually can do something
Speaker 2: besides being in the street doing the wrong thing.
Speaker 1: After a few years, Fuquan and the business were doing great.
Speaker 1: They had a solid customer base, they were giving back
Speaker 1: to their community, and they were financially stable. One was
Speaker 1: riding high until one day something happened that changed the
Speaker 1: direction of his life forever.
Speaker 2: So it was my cousin's birthday and the day before
Speaker 2: we were actually visiting a lot of construction sites, and
Speaker 2: we were talking about a celebration party he was going
Speaker 2: to have the next day. Then the next day came
Speaker 2: and he came to the office and said, you know what,
Speaker 2: I'm not going to work the full day. Let's make
Speaker 2: payroll early. So we did that. He left for the
Speaker 2: day and I stayed to work and then I saw
Speaker 2: someone just walk past the office and I'm like, well,
Speaker 2: we're closed today, who can this bee? And I saw
Speaker 2: this shadow walk past the door, and I got out
Speaker 2: to approach the person to figure out, you know, who
Speaker 2: they were looking for. And by the time I walked
Speaker 2: out the door, the gentleman was turning back around and
Speaker 2: I just said to him, Hey, who are you looking for?
Speaker 4: And a guy turned around and looking for you. Boom
Speaker 4: boom boom boom boom shot me five times.
Speaker 1: Oh my god.
Speaker 2: And I had to play dead actually for him to
Speaker 2: actually stop shooting. I like lay it on my back
Speaker 2: and then he ran off out the door. And it
Speaker 2: was such a rush I was able to jump up.
Speaker 2: Adrenaline was going in down nine one one. I just
Speaker 2: remember being in the back of the ambulance and going
Speaker 2: to a university hospital.
Speaker 1: The surgery was extensive and after he was stitched back up,
Speaker 1: Fuquan was in the hospital for a week, he went
Speaker 1: home and that's where he stayed for the next six
Speaker 1: months while he recovered.
Speaker 2: For me, it was at six months of healing, it
Speaker 2: was a lot of self searching and just went more
Speaker 2: deeper within, kind of separated myself from a lot of
Speaker 2: different people and figure out how can I add more
Speaker 2: value to my life and started to build the journey
Speaker 2: from there.
Speaker 1: For most people it would have been very easy and
Speaker 1: certainly understandable to slip into why me, why now self pity,
Speaker 1: But not Fuquan.
Speaker 2: I think that was the best thing that happened to
Speaker 2: me because it really taught me to real value of life.
Speaker 2: And at the time I didn't have kids, and it
Speaker 2: really made me appreciate the simple things that people don't
Speaker 2: even pay attention to every day, like tiny shoes, right,
Speaker 2: So I started to appreciate the simple things in life.
Speaker 1: I'm going to pause for a second because I to
Speaker 1: hear that story and then say someone say that's the
Speaker 1: best thing that ever happened to me is pretty astonishing.
Speaker 4: Well, it's a life lesson.
Speaker 1: Fuquan and his girlfriend decided to get married and start
Speaker 1: building a family. The aftermath of the shooting also changed
Speaker 1: how he did business.
Speaker 4: That kind of went into a shell.
Speaker 2: I couldn't trust anybody around me, so I disconnected from
Speaker 2: my business partner and started my own venture and started
Speaker 2: to go off of my own.
Speaker 1: The company did exactly what Fuquan was doing before, but
Speaker 1: this time he owned one hundred percent of it. Though
Speaker 1: he'd still be flipping homes. He wanted to do things
Speaker 1: differently from his cousin.
Speaker 2: And then started to focus on business from there, and
Speaker 2: how can I structure a business where it was a
Speaker 2: lifestyle business? And I really wasn't killing myself, so to speak.
Speaker 2: And that's when the light bulb went off, Hey, have
Speaker 2: you build your own construction team.
Speaker 4: You can control more.
Speaker 2: Costs and that way you've been do less and still
Speaker 2: make more profit and still have a quality life.
Speaker 1: Luckily, he had a large client list from working at
Speaker 1: his cousin's company and running the seminars for so long,
Speaker 1: and by the end of his first year he had
Speaker 1: a portfolio of thirty properties that he had flipped and sold.
Speaker 1: He reinvested any profit he made right back into the business.
Speaker 2: I was hungry. I had something to prove I had life.
Speaker 2: I knew the meaning and value of life, and I
Speaker 2: knew that I had a purpose. And in fact, I
Speaker 2: did more deals that year than I did the year previously.
Speaker 1: The real estate market continued to boom.
Speaker 2: It started to develop fast because I had a lot
Speaker 2: of people my network who were looking for houses. I
Speaker 2: had a lot of people who wanted to sell me houses.
Speaker 2: I had lenders who wanted to loan me money. So
Speaker 2: I started to put all those pieces to the puzzle together,
Speaker 2: and that's where my business really started to accelerate.
Speaker 1: He also took the opportunity to diversify the business.
Speaker 2: I had a transportation business. I had a here studio
Speaker 2: with twenty five cheers. So I was using real estate
Speaker 2: to kind of fund other businesses. I had a car wash,
Speaker 2: all these business at the same time.
Speaker 1: Majority of what he did and his passion was still
Speaker 1: real estate. By the end of that first year of
Speaker 1: setting out on his own, he was a millionaire. Things
Speaker 1: were great, but he wondered if it was all too
Speaker 1: good to be true.
Speaker 2: It was unbelievable. It was mind blowing for me because
Speaker 2: where I came from and where I was at the time,
Speaker 2: it was almost like a dream. But it was scary
Speaker 2: too at the time, because you would see people just
Speaker 2: getting into business and taking off, and I was like, okay,
Speaker 2: this is too easy. And when I was speak to
Speaker 2: the loan offices, they would tell me, hey, they got
Speaker 2: stated programs out. People just need the state how much
Speaker 2: they make and they qualify. And I was like, well,
Speaker 2: they don't do like income verification, they don't do any
Speaker 2: of that, and no, they just fell out the information
Speaker 2: how much they make.
Speaker 4: Something is not right.
Speaker 1: Unfortunately, Fuquan's instincts were right.
Speaker 2: I left the salon and I came home and me
Speaker 2: and my wife actually was in our room and she
Speaker 2: had the news on and she was like, Oh my god,
Speaker 2: do you see what's happened in the market. This is crazy.
Speaker 2: Brokers were calling me saying, hey, the deal is going
Speaker 2: to close. The bank pulled out. I'm going to switch
Speaker 2: it to another bank. I think I could make it happen.
Speaker 2: Then two days later, this bank pulled out, and I'm like,
Speaker 2: what is going on? Things started to tighten up, but
Speaker 2: I was sitting on a lot of inventory and then overnight, boom,
Speaker 2: the lights just went out, just like that, and then
Speaker 2: everything just froze. It started to be a downward spiral
Speaker 2: from there.
Speaker 1: The global financial crisis. Now most of you will remember
Speaker 1: it well, but just in case you don't. For some reason,
Speaker 1: in two thousand and eight, the entire housing market went
Speaker 1: under and financial markets were in upheaval.
Speaker 2: I was like the rug got pulled from under my feet.
Speaker 2: The banks stopped lending. I had deals literally at the
Speaker 2: closing table, lined up the close, and all the funding
Speaker 2: got pulled. And during that time I was just flipping properties.
Speaker 2: I had no cash flow.
Speaker 4: It was just by fixed cell, by fixed seal, so
Speaker 4: I had no income coming in from rental properties.
Speaker 2: So when they stopped funding the closing, my business was
Speaker 2: on standstills and I.
Speaker 1: Stuck with These properties were sort of mid.
Speaker 4: Renovation, absolutely, and then values dropped. Fifty percent.
Speaker 1: Of the twelve properties Fuquan's company had in closing, nine
Speaker 1: of them fell through. Fuquan owed his lenders money for
Speaker 1: every property he was renovating. He sold off all of
Speaker 1: his other businesses, the car wash and the transportation company
Speaker 1: to fund those properties. And still it wasn't enough.
Speaker 3: You took all the losses, two million dollars of your
Speaker 3: own money out the door. Absolutely, His accountant advised him
Speaker 3: to file for bankruptcy.
Speaker 2: I said, I'm not going to do that because I
Speaker 2: had some investors that is still with me today that
Speaker 2: believe and said, well, you have our money from our ira,
Speaker 2: our retirement. You know what's happening while everyone else was
Speaker 2: not paying. I stood tall fire, sold the properties, paid
Speaker 2: them back, and I took the loss.
Speaker 5: Ben Wow, Fuquan loses two million dollars of his own
Speaker 5: money and still decides to go against his accountant's advice
Speaker 5: and not declare bankruptcy. I think that was a really
Speaker 5: bold decision.
Speaker 1: Yeah, I suppose it was bold, but it's easy to
Speaker 1: say that now. You know. Everything looks good in hindsight,
Speaker 1: but it must have been terrifying at the time.
Speaker 5: I want to make sure that we circle back to
Speaker 5: this part of the conversation because this is something that
Speaker 5: so many business owners have to think about. You know,
Speaker 5: they might disagree with how Lukwan handled it, but I
Speaker 5: want to make sure we talk about this later. It's
Speaker 5: way too important to miss.
Speaker 4: But taking back to the story.
Speaker 1: Like for so many others, Fukuan had to completely change
Speaker 1: his way of life after the crash. He sold his
Speaker 1: single family home and moved into one of the apartments
Speaker 1: his company had been renting out with his two young sons.
Speaker 2: So I moved from a five bedroom, four bathroom house
Speaker 2: to a two bedroom, one bathroom apartment. So I did
Speaker 2: what I had to do to cut my expenses down
Speaker 2: to survive through it. You know, for a couple of years.
Speaker 1: At any point along this series of woes, did you
Speaker 1: think about giving up?
Speaker 2: No, Because for me, it was I fight better with
Speaker 2: blood in my mouth. Right, It's I grew up through adversity,
Speaker 2: So growing up through that was really made me who
Speaker 2: I am today. So going through that, especially after getting shot, right,
Speaker 2: you get shot five times and you still live, It's like, Okay,
Speaker 2: what's next?
Speaker 1: What's next? Was well a lot of thinking. You see,
Speaker 1: the real estate market would be frozen for a few years,
Speaker 1: and for Kwan was now divorced, his entire life and
Speaker 1: his business had to pivot.
Speaker 2: I remember sitting on my bed watching the silling fan,
Speaker 2: swinging around like, you know, what am I going to do?
Speaker 2: Because real estate was my identity and that's all I knew.
Speaker 2: I didn't know anything else, and that time was really
Speaker 2: quiet time for me, and it was time for me
Speaker 2: to go within. During that time, I learned the only
Speaker 2: way that my business is going to grow is when I.
Speaker 1: Grow amazingly enough. Just like getting shot. Fuquan considers the
Speaker 1: global financial crisis to be one of the best things
Speaker 1: that ever happened to him.
Speaker 2: That was the second pivotal moment in my life that
Speaker 2: I look at that as something that was a blessing
Speaker 2: that happened as well, because at the time I worshiped money.
Speaker 2: I was a slave to it, and I thought that
Speaker 2: was the value. So until you learn when you don't
Speaker 2: have it, where the really value is. I learned that
Speaker 2: the true wealth it was within and it really value
Speaker 2: was in family. I spent a lot more time with
Speaker 2: my kids, becoming the best father I can be, and
Speaker 2: that's what really build a stronger foundation. So this helped
Speaker 2: me see that you can get to the other side.
Speaker 2: You may have to jump through a couple of hoops
Speaker 2: with fire, but the other side is they're waiting for
Speaker 2: you if you're persistent.
Speaker 1: But the housing market wouldn't be recovering anytime soon, so
Speaker 1: he had to pivot once again. He learned about short sales,
Speaker 1: the process of buying foreclosed homes for less than the
Speaker 1: value remaining on the mortgage. Fuquan found himself a mentor
Speaker 1: who could teach him the trade. He decided to shift
Speaker 1: his business completely towards short sales. It became so successful
Speaker 1: that he started running seminars again to build an investor base.
Speaker 2: Before I was teaching people in the front part. Hey,
Speaker 2: this is how you buy a house. This is how
Speaker 2: you qualify, it's what you do, It's how you get tenants.
Speaker 2: Now telling people this is how you buy debt. You
Speaker 2: guys don't know about the debt business. Let me teach
Speaker 2: you about the debt business. You don't have to deal
Speaker 2: with no tenants, tallest trash, turnmites, you have to deal
Speaker 2: with any of that. You can help home uner stay
Speaker 2: in the house. You buy debt at a discount, And
Speaker 2: this is how it works.
Speaker 1: And in twenty thirteen, Fukwan decided to start Energy the
Speaker 1: National Note Group.
Speaker 2: And I said, I'm going to create a vehicle where
Speaker 2: I can raise capital, buy notes direct from the bank,
Speaker 2: sell some off to people who want to buy them,
Speaker 2: and work them out myself to make a great return.
Speaker 1: Four years into the business, Pukwan decided it was time
Speaker 1: to diversify again, so Energ started to do fix and
Speaker 1: flips again.
Speaker 2: Beyond that, and then in twenty nineteen, we started to
Speaker 2: do rentals. So now we have income from rentals, we
Speaker 2: have income from Fix and Flips, and we have income
Speaker 2: from the note business. So those three different verticals help
Speaker 2: us stay afloat, help us navigate the narrows, help us
Speaker 2: continue to be able to pivot. So, for example, if
Speaker 2: foreclosure happens again, the note business.
Speaker 4: Would be booming because banks would be selling debt.
Speaker 2: Right if Fix and Flips slowed down because interest rates
Speaker 2: are high, we have revenue coming in from multifamilies. Rent
Speaker 2: is not going down. Rent it's really expensive. Rent keeps increasing, right,
Speaker 2: So we have those three different verticals, and that keeps
Speaker 2: us aflow.
Speaker 4: In today's mark is.
Speaker 1: With Neng up and running, Fuquan could return to doing
Speaker 1: something that was at the heart of his business all along,
Speaker 1: giving back.
Speaker 2: So we raise capital from accredited investors, and then we
Speaker 2: take that capital and we invest it into our impact projects.
Speaker 2: So in the Southeast and Alabama and Georgia, we invest
Speaker 2: into a lot of the multi family apartment complexes, and
Speaker 2: we keep thirty percent of those communities with subsidized rants
Speaker 2: for their Section eight. Bad women and children, seniors who
Speaker 2: can't afford rent, bumps.
Speaker 1: For anyone listening who thinks you have to work all
Speaker 1: the time to win big take this lesson from Fukuan.
Speaker 1: His focus on himself and his quality of life has
Speaker 1: paid back big time for his business, and today he's
Speaker 1: doing more than ever before. The Energy Capital Fund owns
Speaker 1: twelve hundred properties, with a goal of getting to five
Speaker 1: thousand in the not too distant future. They moved way
Speaker 1: beyond New Jersey and are now working on projects in
Speaker 1: Georgia and Alabam too, and giving back to the communities
Speaker 1: they develop is still at the very heart of their business.
Speaker 5: That is such an inspiring story.
Speaker 1: Yeah, that one had a lot of ups and downs.
Speaker 1: I mean he has really ridden a roller coaster. Yeah,
Speaker 1: he really has.
Speaker 5: And there's so much we can talk about here, and
Speaker 5: I'm excited about jumping into it. But let's start with
Speaker 5: Wakwan's decision to not file for bankruptcy. You know, like
Speaker 5: everything else, there are benefits and drawbacks. But Fukwan took
Speaker 5: a very long term approach. All right, he was an
Speaker 5: entrepreneurial guy. It was not going to be a good
Speaker 5: look for him to fail on the people who invested
Speaker 5: in his business and invested in him. For him to
Speaker 5: just simply say, oh, I'm sorry, I need to file
Speaker 5: bankruptcy and by the way, forget about your money. And
Speaker 5: I think it's important that business owners do take a
Speaker 5: long term approach, because you essentially have to weigh the
Speaker 5: benefits of getting your debt extinguished versus the long term
Speaker 5: consequences of possibly not being able to get financing again
Speaker 5: for another several years.
Speaker 1: I would go step further, Tanya. He didn't just take
Speaker 1: a long term approach. He took a principled approach. True.
Speaker 1: I think they were equally important. Now that doesn't mean
Speaker 1: it's always wrong to file for bankruptcy. There are situations
Speaker 1: where it's appropriate, don't get me wrong. But for him,
Speaker 1: I think it was equally about his long term reputation
Speaker 1: and his principles, and he put those both to work
Speaker 1: and he came out exactly where he.
Speaker 4: Was meant to.
Speaker 5: Yeah, and you make a good point, like, I'm not
Speaker 5: anti bankruptcy, I'm just thinking throughing it better, really make
Speaker 5: damn good sense approach, That's what I'm about.
Speaker 1: Yeah. The bankruptcy Code exists for a reason, and part
Speaker 1: of the reason that it exists is to encourage risk
Speaker 1: taking so that lenders and borrowers have a common framework
Speaker 1: for when things go wrong, because if they don't, then
Speaker 1: it will make lenders more hesitant to lend and borrowers
Speaker 1: more hesitant to borrow.
Speaker 5: It.
Speaker 1: So it exists for a reason, but it exists as
Speaker 1: a last resort. Right as long as the bankruptcy is
Speaker 1: on your record, it's going to be very tough to
Speaker 1: get credit. You're typically only going to be able to credit,
Speaker 1: if at all, from alternative lending sources tend to be
Speaker 1: very expensive and the terms can be onerous. One thing
Speaker 1: I always remind people is in small business, it's not
Speaker 1: just business credit, it's business and personal credit. Indeed, small
Speaker 1: business debt in almost all cases requires a personal guarantee,
Speaker 1: which means it's not just reflecting on the business's credit,
Speaker 1: it's reflecting on you as an individual. So it can
Speaker 1: affect your ability to buy a house, or buy a car,
Speaker 1: or take student loans or any other kind of credit
Speaker 1: that you might want to use to finance your life.
Speaker 1: Now that doesn't mean you shouldn't do it, but it
Speaker 1: means you need to go in eyes open, and so
Speaker 1: business and personal credit are kind of the same thing
Speaker 1: in the small business space, and that's why it's important
Speaker 1: to consider that when you use debt as a tool.
Speaker 5: I'm so glad you brought that up then, because there
Speaker 5: are so many business owners and aspiring business owners who
Speaker 5: come to me and don't realize how integrally tied their
Speaker 5: personal finances are to their business credit. And they think
Speaker 5: that just because a certain contract or a certain obligation
Speaker 5: is put into the business's name, that it is not
Speaker 5: going to matter as much what their personal situation is.
Speaker 5: And they even think that, you know, those who have
Speaker 5: been in business for a while and have you know, substantial,
Speaker 5: very successful while performing businesses, they don't realize that they're still,
Speaker 5: even at the multiple million dollars in revenue level, they're
Speaker 5: still tied to that small business. I try to express
Speaker 5: to people that their business has to be so extraordinary
Speaker 5: for their personal assets and their personal credit to be
Speaker 5: completely separated from their business.
Speaker 1: That's right. I mean that only happens when it is
Speaker 1: truly a professionally run business where the owner could leave
Speaker 1: tomorrow and it kind of wouldn't matter because it exists
Speaker 1: as an entity under itself, and then you can do
Speaker 1: entity financing, but that typically comes much much later. That said,
Speaker 1: we've worked with lots of businesses who have used credit
Speaker 1: in really smart ways, in ways that kept them from
Speaker 1: having to take equity financing and dilute their ownership in
Speaker 1: the company. So debt financing absolutely has a place in
Speaker 1: the capital stack. It absolutely has a place as one
Speaker 1: of the sources of growth capital, and every entre has
Speaker 1: to evaluate which one is right for them and evaluate
Speaker 1: the trade offs that you have to make between them.
Speaker 5: I like that financing and a small business level, especially
Speaker 5: because so many people do want to maintain control, and
Speaker 5: we know that a lot comes with getting other people's
Speaker 5: money if it's an equity position, right, And so those
Speaker 5: entrepreneurs who are saying I really would like to maintain control,
Speaker 5: I encourage them to strongly consider getting just traditional financing
Speaker 5: because then they can keep the control, but they still
Speaker 5: get access to the capitol.
Speaker 1: But all of that comes after putting your own money in.
Speaker 1: If you don't have a dollar to put in your business,
Speaker 1: you don't have a business. You need to be working
Speaker 1: and saving and have some seed money to start at yourself.
Speaker 1: Because I can tell you that whether you're raising equity financing,
Speaker 1: debt financing, or anything else, if you won't put a
Speaker 1: dollar in, why would I put a dollar in.
Speaker 5: Exactly, and circling back to Fuklan, that's what he had
Speaker 5: to do to get what he was trying to get
Speaker 5: done done. He needed to show that he had skin
Speaker 5: in the game, and you know, when things didn't go
Speaker 5: we well, his two million dollars was on the line,
Speaker 5: and that's kind of how it goes.
Speaker 1: And he stood by it. The other thing that I
Speaker 1: loved about Fuquon's story is how much his business is
Speaker 1: tied to his community goals. And what that means from
Speaker 1: a practical perspective is that the mission of the company
Speaker 1: is deeply personal and it's driven by his connection to
Speaker 1: his community and where he comes from. And so this
Speaker 1: isn't just about making another buck, although he does well financially.
Speaker 1: This is about delivering meaningful, lasting change to a community
Speaker 1: that he feels like is a part of him.
Speaker 5: He found a way to pour back into his community
Speaker 5: while building a sustainable business that served not only him
Speaker 5: his own purposes as a business owner, but also the
Speaker 5: purposes of the community and goes to show there's so
Speaker 5: many different ways to do this right because earlier in
Speaker 5: his story he did it by hiring people who were
Speaker 5: less likely to be hired by others. So that was
Speaker 5: how he was pouring back into his community and supporting
Speaker 5: members of his community. When that kind of went badly,
Speaker 5: he then shifted to doing it through his business. And
Speaker 5: I like saying how people engage in the community in
Speaker 5: a way that resonates with them but also is in
Speaker 5: line with their business.
Speaker 1: What I particularly love here, though, and I'm going to
Speaker 1: share a personal view, is I love purpose driven capitalism
Speaker 1: as opposed to just philanthropy. Because he wasn't saying I'm
Speaker 1: going to make a bunch of money and give it away.
Speaker 1: He was saying, I'm going to do something that will
Speaker 1: help my community and make me money at the same time.
Speaker 1: Because when you do that, everybody wants to do more
Speaker 1: of it, and I think that's great. So when the
Speaker 1: purpose of the company is fundamentally to uplift a community
Speaker 1: and it can do that in a profitable way, it's
Speaker 1: becomes self sustaining. He even said he keeps thirty percent
Speaker 1: of his units for low income families or people with disabilities.
Speaker 1: But he's not doing that and losing money. He's doing
Speaker 1: that and still generating a healthy return for his investors
Speaker 1: and himself. And that means at that rate, you want
Speaker 1: to do more of it, and that's great, and you
Speaker 1: want to You don't have to have a special Hey,
Speaker 1: can you come do this investment. You won't make your
Speaker 1: normal money, but we're doing good. No, no, no, you're going
Speaker 1: to make your normal return and we're going to do
Speaker 1: some good. That. That's a home run.
Speaker 5: It truly is, and people can't help but want to
Speaker 5: support that. And even further, Ben, he's showing people how
Speaker 5: it can be done, which is inspiring, right, and I
Speaker 5: love how he went about doing it.
Speaker 1: Yeah. Look, and now he's expanding. He's in the southeast,
Speaker 1: and so I'm looking forward to seeing where he takes
Speaker 1: it next.
Speaker 5: Oh yeah, I have no doubt with the way he
Speaker 5: operates and just the clarity of vision that he has,
Speaker 5: I have no doubt that.
Speaker 1: He is just going to continue to sore Tanya. Let's
Speaker 1: go to the advice Caucon wanted to share with our listeners.
Speaker 1: He thinks every business owner needs to ask themselves two
Speaker 1: questions when starting a business.
Speaker 2: Wish of value, d what is your impact? Always think
Speaker 2: of business from that point because most people think of it. Okay,
Speaker 2: I want to make a lot of money for what
Speaker 2: reason you know you want to travel, you want to
Speaker 2: do what right?
Speaker 4: What impact are you going to do?
Speaker 2: Like I explain, my wise is providing quality housing and
Speaker 2: I wake up out a bit every day and that's
Speaker 2: mission right. So I would definitely say find out a
Speaker 2: way where you can add value to others, and the
Speaker 2: rest of procy definitely will come back to you ten times.
Speaker 1: Thanks so much for listening to The Unshakables. If you
Speaker 1: liked this episode, please rate and review it. It'll help
Speaker 1: our show find more listeners. On the next episode, we'll
Speaker 1: be back with a story about a college dropout who
Speaker 1: started his company the way every great innovator does by
Speaker 1: selling stuff out of his dorm room. I'm Ben Walter
Speaker 1: and this is The Unshakables from Chase for Business and
Speaker 1: iHeart
Speaker 4: The Unshakables is a production of Ruby's Studio from iHeartMedia
Speaker 4: and Wheelhouse DNA.