Lahronda Little, founder of High Quality Organic Skincare LLC, never intended to become an entrepreneur. “I started the product line for myself,” says Little, who is a chemist. “I was at home with my babies (ages 2 and 4), and I had developed a skin condition called Keratosis Pilaris, also known as ‘chicken skin.’ ”
It took a year before Little developed a formulation she liked. It was her husband who suggested she might want to sell the product. She gave it to friends and acquaintances, “and people loved it,” she says. So last November, while still employed full-time, she launched the line using her savings.
Then, she says in Mom, Incorporated:
“I got to a point where I needed more money and didn’t want to deplete my savings.”
Her solution: credit card services offered by PayPal and Amazon. She spent about $1,500 on the high-interest credit loans. The key to success using these tools, however, was paying off the loans. In Mom, Incorporated, Lahronda vowed to pay off the debt within three months — a goal she achieved. We asked her about her experience with credit card debt, and her advice for others who might be inclined to use credit card debt to fund operations.
MomIncorporated: What other options, if any, were available to you when you went this route?
Lahronda: My other options were to continue spending my savings or put off the investment for another time.
MomIncorporated: What would putting off the investment have done to the business?
Lahronda: I’d started doing home shows for my business. In order to be prepared for the next home show, I needed a filler. So I had to make some decisions about how to fund that.
MomIncorporated: What elements factored into making this decision. Why were you so confident you could pay the loans off quickly?
Lahronda: I was confident that I could pay of the debt quickly because I am still affiliated with a corporate job. I wrote out a plan and put a cap ($1,500) on how much I would use. I bought my stuff. And from that date, I wrote out how much I would pay each month to pay it off.
MomIncorporated: Why use Smart Connect and Amazon — with steep finance fees — instead of a regular credit card?
Lahronda: I used the those sources simply because I was already affiliated with them with using PayPal services for payment and Amazon as a purchasing source for some of my packaging and raw material needs. It was a matter of convenience. I never wanted to use credit cards at all for my business. In fact, I do not have a regular card. I’ve not used one for years.
MomIncorporated: What warnings would you provide before advising someone to use credit card financing?
Lahronda: The biggest warning is to make sure you know the cost of borrowing. Also, have a clear understanding of your tolerance for credit. In other words, are you disciplined enough to follow through on payoff?
MomIncorporated: And what are the lessons to be learned?
Lahronda: Try to be as accurate as possible when determining your startup — do your research. Although in business unexpected things happen, it is a good idea to plan for the unexpected when writing your business plan.
MomIncorporated: What advice would you offer someone else who wanted to go this route?
Lahronda: Have a plan. That plan should include specifics such as what you are purchasing, the cost of the materials, the interest rate and your time line. Everything should be in black and white so that you’re clear on the impact of your decision.
MomIncorporated: How do you balance your corporate job, your family and your business?
Lahronda: My husband and I work great as a team. We mesh well, and my husband understands what I’m doing. At 8 p.m., when the children go to bed, I work on HQO, and then on the weekend after finishing our family activities. I have a great support system. My family lives in the area, and I have a great baby sitter.
There have been days when I’ve been reduced to tears. But I’m getting better at crying for help. If I get behind on bottling and labeling, my sister helps.
MomIncorporated: Do you have plans to quit your full-time job?
Lahronda: What I’m doing now is not sustainable. I need to be totally working for myself. But I’m not making enough. I’m pouring everything back into the business. My packaging was great to get me started, but it has to be upgraded. I’ve been approached by a couple of online retailers, and the only thing holding me back is the packaging. Everything I’m making is going right back into the business.