‘Moneylady’ for CEOs

Connie Sparks Title: Owner Company: Wadeco Capital Born: Los Angeles Education: Associate degree from College of the Canyons; bachelor’s from University of La Verne Career Turning Point: Established consulting firm during Great Recession. They call her “Moneylady.” Business consultant Connie Sparks formed Wadeco Capital in 2013 to specialize in business-building strategies and financing for small to mid-sized businesses. As a consultant, she has worked with 133 money lenders nationwide to assist clients with raising capital to sustain or grow their companies. In addition, she has presented workshops and seminars to educational institutions, business associations and organizations throughout California, reaching more than 14,000 businesses. Sparks has won myriad awards, including the Business Journal’s 2018 Women in Business Award in the category Business Owner of the Year. A native Angeleno, the Castaic resident received her associate degree at College of the Canyons in Santa Clarita and her bachelor’s degree at University of La Verne in La Verne. She has trained thousands of executives, business owners and professionals on how to plan, start, finance and run a successful company. Sparks is the author of a pair of self-help books: “The Entrepreneur’s Guide for Starting a Business” (2009) and “Where’s the Money: Big Dollars to Do Big Business Like the Big Boys” (2010). She met with the Business Journal to discuss her biggest deals, her love for Santa Clarita and her advice on social media. Question: What deals are you working on right now? Answer: I’m assisting a young lady, a resident of Van Nuys, buy an existing talent agency located in Beverly Hills for $400,000. I was able to get her great terms and rate because of my relationship with the lender. It also helped that she has good credit, is very organized with her documentation and was quick to respond to underwriter’s requests. The only thing holding the deal up is escrow. Most escrow companies like to work with real properties. For mergers and acquisitions, a specialty escrow company is required. How do you move from consulting into conducting workshops and training classes? I began teaching business development courses in 2005. After dissolving my first business in 1996 due to lack of business experience, I was committed to learning how to become a successful business woman. And in doing so, I knew there had to be other women facing similar challenges. So, I decided to put my training skills to good use and teach women not only how to start a business, but how to run and grow the business. I teach anywhere between 15 and 20 classes a month. Where? I conduct workshops at the Small Business Administration in Glendale, SCORE, Glendale Community College, Pasadena City College and College of the Canyons in Santa Clarita at the Small Business Development Center. I also teach in the Antelope Valley on regular basis. How many people attend? Since 2009, I’ve seen a consistent growth pattern of attendees across the board. In a smaller setting, between 15 and 30 people. I tend to like these numbers because it’s more intimate and gives me more time to engage with students. Topics such as access to capital, introduction to business, and business modeling tend to get a much larger group. I teach 400 to 500 business owners and entrepreneurs a month, with a steady following of repeat attendees. How about the topics? My Business Plan Writing class – that is very well attended. Oddly enough, my Access to Capital class, unless it’s free, people won’t take that class. Which I found very interesting because capital is the one constant need for businesses. Also, businesses are starting to realize they can’t continue to do business using the same model as when they started business. I am seeing business owners drive from as far as Orange County to take my Business Model Class, and it often has a waiting list. This is not a class you will find floating around on every school’s semester curriculum. Unless you attend a major university such as Harvard, Yale or the University of Michigan, for example, you won’t find a Business Modeling class. What else? The other well-attended class is Crowdfunding for the Savvy Entrepreneur. Startups and entrepreneurs recognize there is a shift in funding opportunities for those who don’t qualify for a conventional loan, therefore, they have to look at alternative methods. How has the attendance pool changed over time? When I started I saw more men, but over the last few years I’m starting to see more women. What are some of your memorable financing deals? I specialize in deals involving refinancing, acquisitions and working capital. I helped L.A. Grinding located in Burbank refinance one of their properties in 2012 for $1.5 million. This was a fast and easy deal. What about real estate loans? Norm Furr, he’s just a great Christian guy who owns a number of properties. The one property I helped him refinance for $3 million was located in Wichita, Kansas, where CVS Walgreens was leasing space from him at the time. This was an opportunity to refinance one property and purchase another. There were a lot of moving parts with this deal. One was how the business was structured, which led to a tedious verification process. The other was due in part to the fine print and legal jargon that his bank at the time included in the loan docs should he transfer the loan to another bank. This caused a delay in closing the deal, however, Norm was calm and always positive. Another challenge was finding a local bank that was willing to give him a good rate and work through all of these moving parts. So, I reached out to one of my lenders in Texas, were I was able to get him a very good rate and longer amortization term. Have you helped finance owner-occupied building acquisitions? In 2016 a commercial broker whom I had met through one of my workshops reached out to me to assist his client Alex, the owner of ADJ Finishing, with financing to purchase a building for $1.1 million. The company’s products and services include finishing and coatings for improved corrosion resistance, wear resistance and elimination of hydrogen embrittlement on high-strength steels and springs. There were challenges with getting this deal done. What challenges? The owners didn’t have the desired credit a lender would expect for this type of deal; there were transactions from previous partnerships – no fault of their own – that needed to be resolved; and the biggest hurdle was the seller had issues with the government. To make this deal work, I had to come up with a strategy to get him approved for enough money that would cover the IRS debt and a lien imposed on the seller. Both myself and the broker worked hard to clean up his credit and his wife’s credit so that they would meet the basic credit criteria, get creative with pulling funds together for the required injection and find a lender that was willing to do the deal based on the current circumstances. We were turned down by two lenders before Union Bank took a chance on me. In this business, relationships really do matter. It was a very stressful deal, but we got it done. Do you have any inspirational entrepreneur stories? I arranged $120,00 in expansion capital for Buying Source Inc. The owner, Numan, moved to the states from Pakistan. His family back home dealt in the export of textiles, so he started his own textile exporting business in 2013. He started buying from resellers and going out and selling products to smaller motels. Eventually, he earned enough capital to buy in larger quantities from his family and other suppliers. For three years, he drove Uber to save up to buy in larger qualities, provide for his family and grow his business. Although he lacked business skills, it didn’t deter him from pushing forward and seeking my coaching and guidance to help him become a stronger business man. He’s what I consider to be a true entrepreneur committed to success. How did you help? I helped him get his first loan for $20,000; until then he self-financed the business. Eventually, the small loans he began securing over a two-year period to cover an order caught up with him – he had no money left over and was starting to bleed. He reached out to me last year in a bind because multiple large orders would soon be reaching the port and required additional funds. He needed $90,000. I was able to negotiate a loan for $120,000, which gave him some cushion. He since then was able to fill 10 large deals that increased his revenue to $2 million, a huge change in sales from $34,000 when he first started the business. How did you wind up in Santa Clarita? I grew up in Los Angeles. I moved here in 2000 with my four daughters because of the school system. I moved them from the San Gabriel Valley. It was worth it. What was it like moving to Santa Clarita circa 2000? It was quieter. However, being an African-American woman and single mom, it was a very challenging for me and my daughters. We ran from the San Gabriel Valley to the Santa Clarita Valley thinking we were going to have a better experience; instead had negative experiences here as well from a different demographic. What happened? When I first moved out here, I went to Macy’s. I was standing in line waiting to pay for an item when an older Caucasian woman in a rush to pay her credit card bill crossed the line to get in front of me. I said, “Excuse me.” She said, “Oh, you people.” The cashier told the woman, “Ma’am, we do not care for that behavior.” That made me upset. That was an unexpected experience that really took me for a loop. My daughters were jumped at school, and called all kind of names and told to go back to Africa. Fortunately, there was one person at Hart High School – the principal – who took them under her wing. Is the community better now? Today, Santa Clarita has a good mix of people – and with that, the attitudes are different. Around 2006, more minorities were transitioning from the Los Angeles area and Chino to Santa Clarita. Natives of Santa Clarita are now more accepting of the diversification. So what kept you in Santa Clarita? The family orientation. It is a very family-oriented city. Eventually, I started meeting other people who started talking about the family orientation here. We all supported one another and that helped us get through this change. I saw more African-Americans in the community, some who saw a need and created a network of support for families and business owners. There was also a group of (non-blacks) supportive of me. These were older people who took me under their wings, showed me the ropes and how to maneuver through the business landscape of Santa Clarita. Business-wise, when was the turning point for your consulting practice? The Great Recession – it was a high point for me. Because of my business modeling, business planning and financing services, people were really seeking me out for new and creative ways of doing business and to save their business. Where are you based? I live in Castaic. However, I service businesses nationwide. I work with all sizes, from startups to midsize, and in a variety of industries. Where are your clients? San Fernando Valley, Pasadena, Burbank and L.A. About to 20 or 30 percent are in Santa Clarita. Do you use technology and social media? I am hosting more webinars and will soon be launching Wade Academy, an online learning platform for individuals who work during the day and can’t attend my live classes. Another way I am embracing technology is communicating with students with social networking tools. Personally, I use Facebook more than any other because of its features and all that you can do with them. I use Facebook Live to host Q and A sessions, Chat with the Moneylady and short teasers leading up to a workshop. Other than the usual networks – Facebook, Twitter, Instagram, LinkedIn – what social media do you recommend to your students? Alignable.com. I do like this one because it has a different model. It really encourages you to learn about other businesses and companies. Based on the ZIP code you enter, the site connects you with other businesses and companies in the community. It forces you to connect and engage with each other. I really think the model is going to become a game-changer in how businesses land new clients and establish partnerships. There’s also Ogoing.com. It’s a hybrid of Alignable and LinkedIn, specific for the business community, with a marketing component that I like. It’s free of charge to promote events and products, whereas with LinkedIn you have to pay. 5 Tips for Smart Business Planning 1 To secure funding, follow three simple rules: 1) You must show income; lenders will not lend you money if tax returns only show a few thousand dollars in net revenue. 2) Make sure you have a debt service coverage ratio of 1.1-1.25; this will vary by lender. Google “DSCR formula” for help. 3) Before applying for a loan, try to keep as much cash in the bank for a billing cycle. A lender will request bank statements for three to six months. They look for the number of deposits, payables, NFS and the monthly ending balances. 2 Before settling on a lender, ask the bank where are its sweet spots. Most banks have certain types of businesses they really like and if you fall within their wheelhouse they will make every effort to seal the deal. 3 Assess the performance of your business model every year. This is important to ensure the company is in constant alignment with its mission and values, and is still meeting the needs of customers and employees. What worked yesterday may not work tomorrow. 4 Prepare a business plan even if you’re not looking for funding. The plan is to make sure the company doesn’t cap its growth capacity, is keeping up with trends and adapting to any changes in the environment. It forces key decision makers to routinely monitor the company’s performance. 5 Don’t underestimate your customers. They will remain loyal to your brand until the next wave of hot trends comes around. It’s very important to know what competitors are doing in the market. Pay attention to their websites and social media sites, and Google them from time to time. Survey customers every quarter, find out what changes they’ve made in their life and business, are they still happy with existing products and services, and what can you do differently. In most cases, asking these simple questions can help the company with innovative ideas for new products and more importantly ensure the competition doesn’t capture any of your market share. Use Surveymonkey.com – it’s free and has great features. – Connie Sparks