Two business professionals discussed entrepreneurship, loans and the importance of developing a good business model with students in Dr. James Haug's, assistant professor of management for the College of Business and Economics, Entrepreneurship Management 469 class November 16. Lee Minix and Dave Furlong both came to speak and give real examples of when businesses go right and when they go wrong. Minix is a loan officer at Benchmark Community Bank and Furlong is the owner and operator of Soakers Car Wash.
Students in the class have been working on business plans throughout the semester and proposing how to run and operate their own businesses.
A Virginia Tech graduate, Minix has been in the banking business for over a decade. He started out as an internal auditor for a small bank in West Virginia before it was bought out by Better Banking & Trust (BB&T). He worked for BB&T for a while in the credit department working up and down the eastern shore. Through this, Minix said he had the opportunity to look at many types of business models.
"From the banking standpoint, it has been really tough the last few years with the way the economy has been," Minix said. He urged students be mindful of their financial situation as well as their cash flow. Minix said with a healthy cash flow, the chance is for someone to be lent money is higher.
He said it is important to have a plan and to promote a better, more creative business model. Minix credited the Longwood University Small Business Development Center, adding that he constantly refers people there to propose their business plans and receive assistance in priming their plans.
Some of the businesses the students were prosing include a hookah bar. The students in the group said it would be great for a college town, seeing there were a number of such locations near Virginia Commonwealth University in Richmond, Va. It would also be a five-county hub for any hookah lovers. Additionally, some students were working on a new type of restaurant called Couch Potato. The restaurant would specialize in serving potato products with numerous toppings. They said the idea came from a restaurant they visited in Texas.
Taking time to set down and understand the client and business model is curial in managing a successful business, Minnix said.
"It's all about return of the investment. That's what it comes down to in the end." He said a good business model takes into account when the business will do well and when it will not. He gave the example of a tanning salon. The summertime is when many tanning salons receive the majority of their business. A good plan adjusts to when there is downtime, such as the wintertime, when people are less likely to get a tan.
Minnix said all of this is a learning experience and both the loan officer and the receiver must be mindful of these situations. Very important is the role of the accounting officer in deciding whether or not a loan is the best idea to a business.
Furlong has been in Farmville for four years. He grew up in New Jersey where he worked as a police officer for 10 years. Currently the owner and operator of Soakers Car Wash in Farmville, Furlong said he has owned a business ever since he was 10 years old, where he operated his own lawn mower service. He extended his skills to house cleaning by the age of 12.
Furlong and Minnix are no strangers. In fact, Minnix is Furlong's loan officer. "He took a leap of faith in me," Furlong said in reference to Minnix awarding him a loan to start up Soaker's. Furlong established a business equity line against his home so he could pursue that business, which now has two locations — on Main Street next to Kentucky Fried Chicken and across from Wilck's Lake on Third St. in town.
Furlong said being an entrepreneur is about leveraging money. "If you want to be successful, you have to have money work for you." He talked about passive income, the money one makes when they sleep. "Money working for you while you're not physically there earning it," Furlong said. He credited this with much of his stability, adding that he can achieve more and still earn a steady income and watch his business operate while he is away.
Students had a chance to ask Minnix and Furlong questions at the end of their discussion. One asked Furlong why he decided to pursue a car wash. He said he developed an auto-detailing business through high school and won an award for his work through the Future Business Leaders of America program. He also has a love of cars and cleaning them. "I saw it as another change to get on board with passive income," said Furlong, who also owns a number of rental properties and sells used cars.
Minnix let students know the biggest expense they will have in a business usually is personnel. He touched on Furlong's decision to make his car wash location automatic. This cut down on personnel expenses that other car wash businesses might have to deal with.
Students seemed to enjoy the discussion and developing their own business plans. "It's good practice," said senior Aaron Jones. "I'm not really concentrated on starting a business, but this gave me an overview."
As for advice to anyone thinking about starting their business, Minnix said be sure to do your homework before inquiring about a loan. "A lot of times, people come in and they haven't done the research they need to."
