Master Your Finances Kurt Baker with Richard Kroger – Transcript

Written by on April 29, 2023

0:00:00.0 ANNOUNCER: So you wanna know the ins and outs of managing your money? Well Lucky for you. You are just in time for another episode of Master Your Finances with Certified Financial Planner professional Kurt Baker. Kurt and his panel of experts are here for you and will cover topics from a legal and personal standpoint. They’ll discuss tax efficiency, liability, owning, managing and saving your money and more. Master Your Finances is underwritten in part by Certified Wealth Management and Investment and Rider University. Rider offers continuing studies programs for adults who need flexibility. Want to add new skills to your resume? Take a continuing studies course at Rider University. Now, let’s learn how we can better change our habits with Kurt Baker.
0:00:47.0 Kurt Baker: Do you wanna start your own business but don’t know where to begin? Do you wanna find a source that offers free mentoring services to assist you in starting your own business? Richard Kroger has over 30 years of banking experience as a commercial lender, business banker, and SBA lender, and has assisted people in funding their startups and early stage businesses. He also has five plus years as a certified SCORE mentor, helping people start and grow their business. And providing advice and guidance to potential business owners. Today he’ll help you feel more confident about starting your business. That’s just awesome, and this is a great thing. I remember years and years and years ago when I was first starting my entrepreneurial life, I remember going to SCORE, right? So tell all the people a little bit about SCORE, just because that’s cool. I want you to tell ’em what that is about. ‘Cause I had a great experience. I got some really basic like how to get started and things that people don’t tell you unless you ask somebody.
0:01:40.6 Richard Kroger: Oh, well no. Well why don’t you, no.
0:01:42.0 Kurt Baker: That’s okay.
0:01:42.0 Richard Kroger: Why don’t you run with… No, I’m only kidding. [laughter] I’m only kidding. Well, thank you. Thank you for the intro Kurt. And also thank you very much for the opportunity to speak to you today. I appreciate it.
0:01:51.7 Kurt Baker: Oh, pleasure.
0:01:52.1 Richard Kroger: I appreciate it very much. To answer your question, SCORE is a nationwide Nonprofit Volunteer Organization, based in Northern Virginia. And, our mission in a nutshell is to increase economic development and employment in our particular area. The organization has been in existence since the… I believe it’s the late ’50s, late ’50s or early ’60s. I’m one of the members of the Bucks Eastern Montgomery County chapter. The chapter has been in existence for 35 years. We have approximately 80 members in our chapter. All of us have different skill sets, backgrounds, and experience. The main way that we accomplish the mission is through the free, objective, confidential and usually ongoing mentoring service that we provide to people who are either in business and having some particular challenge or maybe are thinking about starting a business or have, in the case of one of the people I was talking to yesterday, an entrepreneurial itch that they want to scratch and they’re looking for guidance and advice. Pardon me. The chapter, as I said, we have a number of people in the chapter that were… Have all different types of experience that can be helpful to people. So I’ll go out on a limb a bit and just say that if I’m talking to a client that has a particular need, and it’s maybe not something that I can fill directly because of my background, I’m sure there’s probably someone in The chapter who can.
0:03:42.2 Kurt Baker: Right, because these are mainly like retired executives, right? So… Is the group or is it different now. Well, is it different now?
0:03:47.9 Richard Kroger: Yeah. Well, it’s different now. It’s started life. SCORE originally started life as the Service Corps of Retired Executives.
0:03:56.9 Kurt Baker: That’s what it was referred to when I went and saw them years ago.
0:04:00.6 Richard Kroger: Yeah. Well, that’s actually… Well, and actually when I met SCORE mentors when I was working. When I was doing business development for the SBA products. And at that point, you’re right, it was still… Service Corp of Retired Executives. Now, over a period of years, the last few years, and also edges an attempt to become more inclusive, let’s say, we’ve just decided to shorten the name to SCORE.
0:04:30.4 Kurt Baker: Okay, so you don’t go by that anymore. Okay. I didn’t know that.
0:04:33.4 Richard Kroger: Yeah, the mission is the same. It’s just a lot easier for people and also it’s a lot easier for people to understand just to say SCORE.
0:04:43.1 Kurt Baker: Okay. No, that’s awesome. So how did you get in… So you’ve obviously been an executive, you have some experience, and you’re doing banking. Have you always in… Give us a little bit of your background and then we’ll get into the banking aspect of what we’re doing here. How’d you get involved in all this? The banking.
0:04:55.7 Richard Kroger: How did I… Well, in bank… Well I was going to a night school at the Wharton School and I was working… I was doing… I was going to Wharton at night and I was working for the state of Pennsylvania doing sales tax audits. And I graduated from Wharton and I went into my manager, boss, I guess, depending on what the terminology might be and… But because at that point I’d been there a little over three years, and I said to him, “Listen, what is, I’m thinking about… Asking you for a promotion based on my previous work experience and my education and the period of time that I’ve been here work doing sales tax audits. And he said, “Dick… ” he said, “The only way somebody in this office gets promoted, is if someone leaves or if someone dies.” And I was… Back then, I was less than probably half my current age. And I said “This isn’t gonna work.”
0:06:05.9 Kurt Baker: To wait for everybody to die off here. [laughter]
0:06:07.3 Richard Kroger: Yeah. Really.
0:06:08.4 Kurt Baker: It could take a while.
0:06:09.3 Richard Kroger: I mean, you hate to be morbid, but still…
0:06:12.8 Kurt Baker: Right. True, true.
0:06:13.5 Richard Kroger: But I said… Because I was in my early thirties and I had just gotten married and I said, “Oh man, I don’t think this is gonna work out.” So I put some resumes out and I was hired by a bank. Of course, well, the bank doesn’t… The name doesn’t exist anymore, of course.
0:06:35.8 Kurt Baker: That’s surprising.
0:06:36.9 Richard Kroger: Really over in South Jersey. It used to be, it was used to be called Heritage Bank. And I was hired as to come in and do start doing audits in their, what’s called, there’s a form of commercial lending called asset-based lending, where you’re lending on a formula basis against the company’s receivables and inventory. And so they hired me to come in and work as an auditor to get started. And that was really how my banking career started. I started, I never worked in a branch. But I started as I came in as an auditor and progress up forward from there.
0:07:18.0 Kurt Baker: Okay. So it’s good you knew the backend first, so to speak, almost like you knew the audit side of things and then you went, right.
0:07:24.7 Richard Kroger: Yeah. It taught me a lot that was helpful. It’s one of those things that you do, you have a previous life experience of whatever it might be. And 2025, maybe even 30 years later, all of a sudden something that you knew, you’re doing something different, but you’re falling back a little bit on the previous experience or the things that you’ve learned from before, and it’s like oh, yeah. Well, yeah. Now this is helpful to me now. So, and as I progressed through the banking world once again with a couple of banks that the names aren’t there anymore, but as I said, it’s something else? So, anyhow.
0:08:10.6 Kurt Baker: Okay. So now you’re in banking. So give us a little bit of where the banking industry’s changed a little bit over time. So you wanna give us a little bit of that and kind of where we are now as far as what you’re seeing out there?
0:08:20.2 Richard Kroger: How much time do we have?
0:08:21.2 Kurt Baker: Well, yeah. You don’t [laughter] We have to keep it under an hour, so.
0:08:25.4 Richard Kroger: No. Okay, fine. Yeah. I, well, it’s like night and day. It’s like night and day. For example, who goes into a bank branch anymore? Way back when. In between working in banking, I worked for a company, a privately owned commercial finance company and my role there was business development. And this is where my, actually, my degree, my BA from Wharton is a combination of accounting and marketing was two majors. And so my role was business development and my territory in New Jersey was from Trenton and North to the New York border. So I did thousands of cold calls into banks talking to bank people looking for leads, looking for business, and so on, that role or that MO I guess anymore is really kind of passe at this point. It’s just not… Well, now that things have loosened up because of the virus, maybe there’s still BDOs out there trying to do that. But certainly not the way that I did it.
0:09:45.8 Kurt Baker: Okay. So [laughter], so you got into the bank, so that’s how it was then. So what’s, what do you see now, how does most of this operate now? So how do people get started and getting started these days might be a little bit different than getting started.
0:10:00.2 Richard Kroger: It’s, well, it’s completely different. There’s still, pardon me, there’s still the, not, it’s not the stigma, but the difficulty in finding financing for what you want to do, because credit standards have tightened, significantly from what I’m hearing from the banking people that I talk to, because I still have a number of clients, and I’m sorry, contacts that I have from my working life who reach out to me from time to time because they know what I’m doing in SCORE. And they’ll say, Listen, Dick, I’ve got somebody that I’m, for example, I’m talking to and they wanna start a business and I know that they need a business plan, but that’s not what… The bank is not paying me to help them with their business plan either to prepare it or review it. So, this is now something that, I, this is part of the role that we fill in trying to help…
0:11:03.4 Kurt Baker: So SCORE helps with the business plan as well.
0:11:04.9 Richard Kroger: Yes.
0:11:05.3 Kurt Baker: Okay, good.
0:11:05.6 Richard Kroger: Yeah, we do.
0:11:05.7 Kurt Baker: Yeah, that’s good.
0:11:06.3 Richard Kroger: Yes, we do. We, I’ll help, we’re not gonna, one thing I emphasize to the clients that I talk to is that I’m not gonna do the work for you. That’s not my role. My role is to help you and to advise you and things that, about what’s in the plan. If it looks like it’s detailed enough, it’s a, if it looks like it’s covered. Most of the high points that I think you’re going to need to submit to someone a credit underwriter, for example to be approved for a loan. But it’s still difficult right now for people to get financing. And the other thing too is there are commercial lenders. There’s been a downsizing of commercial loan people. So now you not only, excuse me, have banks that are doing commercial lending, you also have credit unions. That are doing business banking, they call it, let me put it that.
0:12:09.8 Kurt Baker: Okay. Well, that sounds good. We’re gonna take a quick break. You’re listening to Master Your Finances.
0:12:15.1 ANNOUNCER: This is master your finances with Kurt Baker, certified financial planner professional, learn about tax efficiency, liability, owning, managing, and saving your money and more from Kurt and his experienced panel of guests, master Your Finances is underwritten in part by Certified Wealth Management and Investment, and Rider University. Rider University offers flexible education for adult learners. For more information, it’s
0:12:45.2 Kurt Baker: Welcome back you’re listening to the Master your Finances here with Richard Kroger, and he’s a Certified SCORE Mentor. And we’re gonna talk a little bit about, he talked about a little bit of the background, but SCORE is really important. So we just call it SCORE now. And basically guys, you’re helping out. And so how does somebody, let’s say I’m somebody, maybe I’m in corporate America, or I’m just sitting at home and I’m thinking, let’s, I’m gonna go start a business. Right? And as we know, the majority of businesses fail within the first 12 months. So the planning aspect is usually where most of these go wrong, they don’t really think about all these steps. And this is where an entity like SCORE can help significantly to help. So I’m getting ready, I’m thinking about starting a business. What, how would score kind of fit into that to kind of walk, help walk me through this process a little bit better.
0:13:31.1 Richard Kroger: Okay. Yeah. No, thank you. We have leads that come to us, from all different areas, from the webinars, the weekly webinar that we do, at 11:30 EAT every Tuesday, which is a source of leads for us. It’s a business related webinar that we do on all different topics. You’ll find, you’ll even find a couple of mine in there, and if you do find them and you’re having trouble sleeping, you can listen to that and that’ll maybe take care of that. But no kidding aside, but people find us through professional contacts, through talking to their neighbors from, all different types of sources. And one of the first things I ask someone when I’m, when I get an assignment, a client assignment is what do you want to do? What’s the, what’s the genesis to this? Where did this come from? Where did this idea come from? How did it start? And so on. And that’s part of the, when I call, let’s say the initial screening of a client when I’m talking to them, what do you want to do?
0:14:43.8 Richard Kroger: Is this going to be something with a service? Is it going to be a particular product? Is it a case maybe where, you have, and I have this exact situation right now with someone, he wants to buy, he works as an automobile mechanic and he has an opportunity to buy a body shop and repair facility where the owner wants to retire. And so I’m working with him, and helping with him decide which way he wants to go in terms of how much money, the money that he has available, how much of his own resources does he have to put into the deal. Excuse me. If we get to the point where he needs to borrow money, I’m going to more than likely help him put worth his business plan. It really runs the gamut, Kurt, as far as the different types of, let’s say, opportunities that I talk to people about.
0:15:46.7 Kurt Baker: So let’s take our auto mechanic for a minute. So if I’m getting auto mechanics, right now, I’m an employee, right? So we have to walk through like how they’re gonna, let’s say they need financing. Of course there’s different components to go into making sure they qualify for the financing. So you wanna walk through a little bit of the key factors the bank is gonna look at. Because, a lot of people think, Hey, I’m working for this person, but I’d like to do it on my own. But I don’t, I’ve never been a business owner. I don’t really have any commercial lines of credit. I don’t have any of this stuff.
0:16:10.5 Richard Kroger: I don’t have any background or I don’t have any contact.
0:16:12.3 Kurt Baker: Nothing, I just know how to fix stuff. I mean, kind of, I mean.
0:16:16.5 Richard Kroger: Well, that sounds like a typical SCORE client. I mean…
0:16:18.6 Kurt Baker: Well, that’s what I need. But they don’t realize that there are steps. I guess.
0:16:22.3 Richard Kroger: That’s right.
0:16:22.9 Kurt Baker: I wanna make sure they know that.
0:16:23.7 Richard Kroger: That’s right, no. Yeah. And I don’t mean to make light of it and I shouldn’t, but I mean, it is a usual score client. One on, they’re usually once we get, when I’m talking to the person, either on the phone or virtually, depending on how we set up the initial call, It’s after we get past what do you want to do? And if I think that they’re going to need to borrow money, first question I ask them, have you gotten a credit report for yourself recently? Do you know what your personal credit score is? Because I know that when they go to a bank or a lender to apply for a loan on the application, that’s the first piece of information that they’re going to be asked for. And it’s also, and I tell people, it’s going to be the first hurdle that you’re going to have to get past, in terms of applying for a loan.
0:17:16.4 Richard Kroger: And I say that, obviously because of my background, And when I co… There are situations that come up in the chapter where one of the other members who doesn’t have, let’s say my background will call me and say, Dick, listen, I’m talking to so-and-so and I think they’re going to need help with funding. Do you, would you join me as a co-mentor in this session? Fine. Okay. That’s no problem. But I found that some of my associates aren’t comfortable raising that…
0:17:52.9 Kurt Baker: Oh, interesting.
0:17:54.7 Richard Kroger: Credit score. To me, based on my background, Kurt to me it’s second nature.
0:18:01.5 Kurt Baker: That’s like one of the first questions anyone would ask.
0:18:03.9 Richard Kroger: Yeah. But you know, once again not everybody has my background And not everybody is comfortable, even though we tell clients what you tell us is confidential. It’s not everybody’s comfortable with doing that. And I’ll take the answer depending on the answer that I get. I’ll take people at their word until I learn or find out different, but if someone tells me, for example, in this particular market that their personal credit score is let’s say above, at least above 700 Then I know they probably more than… All things being equal, they more than likely would be able to be approved for a loan and at a reasonable interest rate. But unfortunately, I’ve had too many conversations with people who tell me that their credit score is 650 or below. And I’ve told them, you need to seriously think about what you want to do, number one. And number two, I’ve suggested rather than trying to apply for a loan, that they may be look for other sources if they are going to go forward with this, whether it’s, money from parents or loans, gifts money, for example, or other sources of funds. But the first thing that I’ll tell people usually in that case is there’s an organization over in, Richard Pearl Pennsylvania, which is close to where we live. It’s called the Credit Counseling Center, and it’s another nonprofit organization. And their role is to help people improve their credit. Get them on a payment plan, get them on a budget, whatever the case might be.
0:20:09.4 Richard Kroger: And let’s kind of walk away from that for a minute, from the credit situation. Once I get past there, the next question is, well, [chuckle] okay, if you want, let’s say your credit score is 750. Okay, fine. Well, you think that you’re going to need to borrow money or to get this project started. How much money do you have of your own? Oh, I have to put my own? Yeah. Because most banks that I know in this market aren’t willing to do 100% financing. So you’re going to have to come up with some money of your own resources to put into this deal as a capital contribution. Which sometimes if the personal credit isn’t a deal killer the lack of funds as a capital contribution is a deal killer.
0:21:03.3 Kurt Baker: Which can obviously make it a challenge.
0:21:05.9 Richard Kroger: Oh. Well, it makes it even more of a challenge. It makes it even more of a challenge. It’s the old, whatever kind of buzzword you want to use, capital contribution, down payment, skin in the game, whatever it might be. Banks don’t want to take all the risk in a deal. Let me put it that way. I can’t tell you the number of conversations that I had with people when I was doing SBA lending, and I would say to the people, the bank is willing to review your credit request and they’re willing to, let’s say, take the payment risk. That they’ll lend you the money and you’re gonna make the payments and everybody’s gonna live happily ever after. They don’t want all the risk. And they ask, and this is getting into another topic, but they ask the borrower to assume part of the risk in the deal, and that is the money that’s coming into the deal is a capital contribution and also the interest rate risk.
0:22:03.1 Kurt Baker: So nowadays the… As you point out, the years of ’08, ’09, 100% financing are pretty much gone.
0:22:11.3 Richard Kroger: And unsecured lending is pretty much gone.
0:22:14.0 Kurt Baker: 125% loans on your house, that kind of stuff has gone by the wayside.
0:22:18.0 Richard Kroger: The short answer is yes.
0:22:19.9 Kurt Baker: Now I’m aware of that. So essentially now, so what typically are people like infusing cash, if they’re a new startup, I’m a mechanic, I want to buy this shop from somebody. What typically should somebody anticipate having to contribute to kind of a deal? Just if they’re thinking about it, like what, before they even start, like, hey, look, I should save up a little money or have access to it from, friends and family happen a lot in these cases. I know.
0:22:43.2 Richard Kroger: Well, yeah, you’re right. And that has to be documented, but I tell… I would look for at least a 20%-25% capital contribution, coming into the deal. Because the other thing… Because if you have those kinds of funds available that you’ve been saving to set aside for this venture, fine. And the other thing too, of course, is the more money that you can put into a deal, the less you have to borrow. And right now we’re in a rising interest rate environment, so that affects your cash flow and your debt repayment ability.
0:23:17.4 Kurt Baker: Obviously, yeah, the lower you are, the less leverage you have, the easier it is to cash flow the rest of your business. Because now you don’t have debt service as high of a debt service cost. Right?
0:23:26.4 Richard Kroger: That’s right.
0:23:27.2 Kurt Baker: So that would help you out a lot. So assuming I get over the credit score.
0:23:31.0 Richard Kroger: And the capital contribution.
0:23:32.2 Kurt Baker: And then the capital. We’re gonna take a quick break, but once we get over these two hurdles, right after the break, we’re gonna talk about now what’s the next step, alright?
0:23:39.0 Richard Kroger: Where do we go from here? [chuckle]
0:23:40.0 Kurt Baker: Absolutely. We’re gonna take another quick break. You’re listening to Master Your Finances.
0:23:43.8 ANNOUNCER: This is Master Your Finances with Kurt Baker, certified financial planner professional, learn about tax efficiency, liability, owning, managing, and saving your money, and more from Kurt and his experienced panel of guests. Master Your Finances is underwritten in part by Certified Wealth Management and Investment, and Rider University. Rider University offers flexible education for adult learners. For more information, it’s
0:24:15.9 Kurt Baker: Welcome back. You’re listening to Master Your Finances. I’m here with Richard Kroger, and we’ve been talking about how to get yourself ready. Let’s say in our last segment, we had the mechanic that was interested in buying the shop. So if this person comes in, first question Richard’s gonna ask, Well, what’s your credit score? I just wanna make sure it’s high enough where if you do need to borrow money, in today’s market, it’s like a 700-plus, is kind of what’s recommended, as far as your personal score goes. Because typically these loans have a personal guarantee. So they want your… Your name is on the line too, not just the business. And then the next step is do you have enough money to put into the transaction? And typically you’re gonna want to have somewhere in that 20-25% amount, at least for the loan part of it.
0:24:57.5 Kurt Baker: But then we get into the next part, which is really gonna dig deeper. Like how much you really want to have? Because the business plan may dictate maybe even a little bit more. ‘Cause once you start up, you’ve gotta ramp up the timeframe. As soon as you open the door, unless you’re OpenAI selling ChatGPT, you’re not gonna necessarily get a hundred million subscribers the first couple of weeks, right?
0:25:17.2 Richard Kroger: No. Probably not.
0:25:17.7 Kurt Baker: So most of us, it takes a little longer to get rolling, right?
0:25:19.5 Richard Kroger: Yeah.
0:25:20.3 Kurt Baker: Even though they had a few billion to start with. But it’s a different story.
0:25:23.7 Richard Kroger: Well maybe last week they had a few billion.
0:25:26.0 Kurt Baker: Well, now they got it. They had money put in first to develop the technology. So, but for most businesses you have to account for getting the doors open, getting it running, even if it’s an existing business, you’ve still gotta go in and take it over and there’s gonna be things that cost you. So if you, so the business plan is really critical. That’s something where your mechanic’s gonna say, a what? I’ve never done a… I don’t know what you’re talking about. How do we do this? But that’s not their expertise, I should say. Right?
0:25:52.7 Richard Kroger: No, it’s not. It’s not like pulling wrenches. No.
0:25:56.4 Kurt Baker: It’s a little different.
0:25:57.4 Richard Kroger: Yeah. And actually he did send me, he did, it’s something he’d been thinking about doing for a while. And he did like a real rough.
0:26:08.2 Kurt Baker: That’s good.
0:26:08.8 Richard Kroger: Real rough.
0:26:09.1 Kurt Baker: I’m impressed.
0:26:09.4 Richard Kroger: Well, you’re right.
0:26:10.3 Kurt Baker: That’s impressive actually.
0:26:10.9 Richard Kroger: Well you’re right. He sent it to me and it wasn’t anywhere near comprehensive enough. But that’s a whole other story. But, what I told him is, and this goes back to my SBA lending days, ’cause I’ve read more business plans than I’d like to think about. And once again I’m usually… It starts with me. I’m the first one, usually, that reads them. But I told him, I said to me, the business plan has five components and now granted, there certainly can be more but I said to me the five points that I’m looking for, first of all the first page may be a paragraph or two an executive summary, give me some… Give me or give the reader, whoever’s going to be reading the plan a real quick synopsis of what you want to do, background, what the name of the business is going to be, what you think you’re going to do, the address, maybe if you’re going to borrow money, how much money you think you’re going to need, what you’re going to use the money for, those kind… A real short summary as I said, and maybe a paragraph or two. Second section is the narrative where you’re taking what’s in the executive summary and you’re running with it, going into much more detail about the project, about what the ownership structure’s going to be, the ownership percentages, the information as far as marketing, geographic coverage, what the product or the services that you’re going to sell. Much more detail about what this particular opportunity is going to be.
0:28:00.3 Richard Kroger: The third part is where everybody looks at me and everybody says to me, oh, Dick, I don’t want to… The financial projections is… Do I have to do them? I said, well, it’s funny.
0:28:12.3 Kurt Baker: Right, do you wanna make money?
0:28:14.2 Richard Kroger: But yeah. Really, well the other thing too banks are kind of funny about wanting to lend money and getting repaid.
0:28:19.7 Kurt Baker: Yeah. They like that. They like the cheques coming back too.
0:28:21.7 Richard Kroger: Well, exactly. Exactly. And I’ve said to them you need to… First of all don’t plan longer than three years, number one. And you need to think about what your pricing is going to be for the product or service you’re going to sell. And also list all of what you can think of as far as relevant expenses for the particular project. I’ve told people, don’t do three columns of numbers, Year 1, Year 2 and Year 3, because what I found is a lot… And my reference point Kurt is let’s say the metro Philadelphia market. A lot of credit underwriters are looking for the people in the financial projections to break down the years into first year, say month to month results and maybe even the second year, month to month, third year doing it on a quarterly basis.
0:29:19.6 Richard Kroger: So if people have access to Excel or Excel worksheets those can be really helpful to people to do that or another template that you can find or even I’ve suggested to people that they reach out to their accountants and ask them if they do prepare business plans or projected financial results if they have that template available that they can share with their client. So those are the first three, the next point, number four, is the assumptions. I tell people you’ve done the projections but someone who’s looking at them wants to know where the numbers came from. So that’s where you list the assumptions, what you think you’re going to price your product for and how your product or your service, how you’re going to price it and give the details as to where the numbers came from as far as revenue.
0:30:21.4 Richard Kroger: If you’re going to be leasing space and you have an idea of what your monthly rent’s going to be, well then plug that in on a monthly basis once you come down to the expenses. If you’re going to be hiring people as employees use some kind of estimate as far as payroll expenses concerned. And once again, I would suggest going back to their accountant or maybe even an experienced bookkeeper that might be able to help them with what the assumptions are as far as the financial results. And the last section to me is miscellaneous. And one document that I always ask people to include in their plan or in the miscellaneous section is a copy of their resume because the person who’s going to be reading the plan would like to see that there is some kind of past experience, let’s say that’s going to dovetail back to what they want to do. People have… I’ve seen plans where people have included copies of college degrees, they’ve included copies of articles that they’ve written, any kind of personal recognition like letters from professors at universities or personal references, if it’s a food related business I’ve suggested that people do put a sample menu in as the miscellaneous section to give the person once again, some backup as far as where the numbers come from.
0:31:53.2 Richard Kroger: If they’re going to be leasing space and you have, let’s say an outline or a layout of how the space is going to be, you can certainly include something like that as long as it’s not one of those humongous blueprints but anyway [chuckle] But no, I tell people anything or any document, let’s say that you have that can further support what it is that you want to do, I suggest you include it in the miscellaneous section.
0:32:18.3 Kurt Baker: Okay. Well that sounds, that’s sounds pretty comprehensive. So you walk through… So these are the things you tend to review, right? So what are some areas where they typically have a hard time? You said the financial projections.
0:32:29.9 Richard Kroger: Oh, the projections are yeah, the projections can be a nightmare, I’m sorry.
0:32:33.0 Kurt Baker: So is that where you get into… Let’s take your example, I’m gonna open up, I don’t know, I’m gonna sell cookies or something. Now I’m probably not the only one selling cookies out there. The grocery store sells them, there’s bake shops that sell them and so how do I… Does that play into the viability of the business? So how do I come up and say, Hey, I think my cookies are gonna be so great that everybody else is gonna go out of business I’m the only one left. Because how did the competition, I guess what I’m saying… So any business is gonna have competition you have to address. How did you determine that you’re actually gonna have some kind of success in here?
0:33:06.1 Richard Kroger: Well, that should be reflected back in the narrative. Describing, let’s say, the product or What do you do that’s different from what everybody else does and because that’s one of the things that should be covered in the narrative and also too, part of the people, part of your due diligence. Let’s say you’re going to be starting a, you know, don’t look to sell your cookies for, I don’t know, $5 a piece or something like that.
0:33:33.9 Kurt Baker: Unless you are Starbucks?
0:33:34.5 Richard Kroger: When you do the projections… Well, unless you are Starbucks.
0:33:36.9 Richard Kroger: They can get away with it. Yeah, fine. Okay. Because I’ve seen in the projections and this is one of the reasons why people have been asked to do monthly results, because Year 1, you’re kind of here and I realize this is on a radio and you can’t see what I’m gonna do, but Year 1 is down here and then year 2 looks like a hockey stick, like all of a sudden and it’s like…
0:34:05.9 Kurt Baker: People find out about how great your cookies are, they start buying.
0:34:07.7 Richard Kroger: Yeah. Really. And it’s like stop and think from… Once again, it’s stop and think about what you’re doing and how you’re presenting information to someone who’s going to be let’s say, hopefully approving your loan request.
0:34:23.9 Kurt Baker: It’s a bit of a process, right?
0:34:26.9 Richard Kroger: Oh, yeah. And the other thing too, just briefly, I’ve had people, they’ll say, here’s a draft or here’s my plan, but the finished product can be different from the first time around. Let me put it that way.
0:34:42.7 Kurt Baker: So I think that was part of what we’re getting at. So you write as much of this out as you can and then you guys can kind of help and poke holes or make suggestions on what they put down. So well, maybe that’s not… What do you mean by this? Or what do you mean by that? Because you’re gonna help save them, so to speak long term by fixing this, ’cause the plan doesn’t work. It’s not gonna really…
0:34:58.6 Richard Kroger: Well, yes. And the other thing I tell people too, Kurt, is try to cover as much part as you can and/or for me to help you with, because what you don’t want is the underwriter or the person reviewing the plan to come back to you with 20 questions.
0:35:14.3 Kurt Baker: Right. So provide as much information as you can and then you try to put it in a way that works, that makes sense to everybody else.
0:35:18.0 Richard Kroger: That’s right.
0:35:18.4 Kurt Baker: Well, that’s fantastic advice. We’re gonna take another quick break. You’re listening to Master Your Finances.
0:35:25.1 ANNOUNCER: This is Master Your Finances with Kurt Baker, Certified Financial Planner professional. Learn about tax efficiency, liability, owning, managing and saving your money and more, from Kurt and his experienced panel of guests. Master Your Finances is underwritten in part by Certified Wealth Management and Investment and Rider University. Rider University offers flexible education for adult learners. For more information, it’s
0:35:55.1 Kurt Baker: Welcome back. You’re listening to Master Your Finances and I’m here with Richard Kroger. And we basically went through the basic steps, you’re gonna get a credit score, you gotta have some assets, potentially…
0:36:08.7 Richard Kroger: Some capital money to put in.
0:36:09.4 Kurt Baker: Capital somewhere. Hopefully yourself, if not, then you gotta work it out with your friends and family and start making some friends if you don’t have it or family.
0:36:15.4 Richard Kroger: Yes. Something like that.
0:36:18.3 Kurt Baker: Start being nice to people, ’cause you might need them help at some point in life. Always be nice to people, frankly. And then you get your business plan together and you went through the different segments of that, which I think were really awesome. Like the executive summary, the narrative section, the financial projections and then make the assumptions and then the miscellaneous section where you put in things like resume and other added things. So now we’ve got all this together. So where do we go from here as far as learning more about what I should do and how I should do it and how I get it implemented here.
0:36:47.8 Richard Kroger: Well, one of the things that we try to help people with and I tell people if you’re going to be applying for funding, I would always go to… Go to your own bank, start there with the person… Whoever the bank or whatever the bank is and get familiar with what their requirements are as far as how to be approved for a loan. What information they would need from you in terms of capital, as I said, capital contribution, more than likely a business plan. What kind of insight? If you’re already an existing customer, so much the better usually as opposed to somebody who’s just coming in off the street. And like I said, it pays to talk to maybe more than one person, because you’ll find different banks have different lending requirements.
0:37:41.1 Kurt Baker: Okay.
0:37:43.6 Richard Kroger: Then the other thing too is the timeframe. How long is it gonna take? Once, let’s say hypothetically, that you’re approved for the loan, how long is it going to take to close and fund? Because sometimes that really drive… That drives the decision, let’s say about which bank that you might work with for funding. Some banks are able to close loans quicker than others. I mean, it was… We talked during the break, if you’re talking about an SBA loan, you’d look for a bank or a lender that’s what’s called a preferred lender, because they’re the banks that have the most experience doing SBA loans, they can make their own credit decisions and all things being equal, they can probably close the loans faster than someone… Than a bank or lender that’s not a preferred lender.
0:38:38.8 Kurt Baker: All right. So ask to make sure they’re a preferred lender. So there’s enough of those out there where you should get a pretty good choice.
0:38:43.5 Richard Kroger: Yeah. Most of the banks, Kurt, in this market, if you’re not preferred, you’re really behind the eight ball, as far as… All the big banks, all the money center banks, the national banks and a lot of the local community banks are preferred lenders. And that’s one of the things you should ask the people and it’s really a yes or no question, are you a preferred SBA lender or not?
0:39:10.0 Kurt Baker: Okay. All right. That’s great advice. I agree with you. Yeah, so once you get this going, so then where do we go from there, we gotta implement it, so you implement the plan and…
0:39:19.2 Richard Kroger: Oh, yeah. Well that’s, yeah. Well that comes under the closing and funding process if you would. And we’d like to get to the point where that happens and the business is up and operating. There are clients that I’ve worked with for three years or four years, usually the sessions that I have with clients, depending on our schedules, are usually once every three to four weeks. So just because let’s say the loan closes and the business starts, that doesn’t mean that I go away. Some people might want me to, but that’s not, you know, another story.
0:40:04.9 Richard Kroger: But no, I tell people, look, I’m here. I’m not, knock on wood, I’m not planning on going anywhere. I’m here as long as you need me or as often as it might be. So, the objective is to get the business up and going, but also stay in touch with them because what the circumstances are now are not necessarily what they’re going to be six months from now or a year from now because things can change. You would like to think they change in a positive way. So we keep in… We try as much as we can to keep in touch with the people going forward. Our coming back to our mission, it’s to create the business, help create the businesses that become successful, but also from a, I guess you would call it maybe a selfish standpoint, the chapter started a program back in, I think it was, let’s say the second half of ’21, where we called it Success Stories and we went back and forth a little bit with how do you define success and in terms of… Is it in terms of revenue generated? Is it in terms of length of time in business or whatever it might be?
0:41:25.6 Richard Kroger: And so we came up with a couple of basic criterias and we started going through our client list of the clients that we’ve worked with and where they are over that particular period of time. And the program has grown to the point where we have close to 40 Success Stories. And for the most part, they’re all on our website, which is And I’ve used it, and also other people, other mentors in the group have used it as a reference point if they’re talking to a particular client where they know one of our Success Stories is similar to what this particular client is doing. So we’ve said, go to the website, look in the success story program for this particular company.
0:42:24.5 Kurt Baker: Oh, okay. Now do these… You’re giving examples, but do these other entrepreneurs, do they assist any of these other people? Like if they want to talk to ’em, “hey look, you started that business and I’m curious about how it went and what you’re doing.”
0:42:36.4 Richard Kroger: Yes. Well, we get to contact the person ahead of time and say, “Hey, listen, here I’m talking to so-and-so and they wanna start ABC company. And it’s similar to what you did, would you be willing to talk to the person?” So we do something of an intro, but the usual process is first, we try to push people toward the website as much as we can, because we’ve got all kinds of information on the website, both in terms of the content for the success story program. And also we do a weekly webinar every Tuesday at 11:30. The joke is, it’s kind of webinar, SCORE, webinar, whatever. It’s on a different business related topic. And the same concept applies there. If I’m talking to someone and they’re thinking about a particular need or something that they want to do that might have been covered in one of our webinars, we push them toward the webinars because the webinars are recorded, and if you register for the webinar, you get… Even if you’re not able to attend, you get a copy of the presentation and you get a copy of the slides. So you can either view it at that particular time or you can view it some other time when it’s convenient if you’re not able to be there on that Tuesday. And we’ve got, I think at last count we have more than 60 webinars in the library.
0:44:14.0 Kurt Baker: Really?
0:44:14.5 Richard Kroger: And once again that we push people to the website.
0:44:18.0 Kurt Baker: So what kind of topics do you… And that’s the, right?
0:44:20.7 Richard Kroger: The, yes.
0:44:22.2 Kurt Baker: So what types of subjects do… It’s 60 topics, say, can you name like a couple areas?
0:44:28.3 Richard Kroger: It’s all kinds of social media.
0:44:30.2 Kurt Baker: Okay. Social media.
0:44:31.2 Richard Kroger: Social media, whether it’s LinkedIn, whether it’s Google, we’ve got the one… Coincidentally the webinar today is… Oh, come on, Dick. Oh, how do you take… Are you sure that something… I’m paraphrasing here. Kind of, what makes you think your idea is a good business or something like that. It’s…
0:44:55.2 Kurt Baker: You sound like Kevin O’Leary on Shark Tank.
0:44:56.5 Richard Kroger: Yeah. He’s gonna… If he hears this, he’s…
0:44:58.5 Kurt Baker: Bad ideas, horrible.
0:45:00.4 Richard Kroger: Yeah. If Don Gelt hears this, he’s gonna kill me.
0:45:02.9 Richard Kroger: But no it’s the same thing. What makes you think that your idea can be commoditized and turned into a business? But they’re all business related topics. Some of them are done by the mentors in the group. And a lot of them are done by outside consultants and people who contacted us and asked for, can they do a weekly webinar? One of our most popular subjects believe it or not, is we do the IRS at least once a year. And that webinar we get, on a normal basis, we get anywhere from let’s say 100 to 150 people who register. And we’re consistently hitting approximately 40% to 50% attendance rate for the webinars.
0:45:55.2 Kurt Baker: That’s great.
0:45:55.9 Richard Kroger: But they’re all different business related topics.
0:46:00.8 Kurt Baker: Okay. So people wanna know about the IRS before the IRS finds out about them. Is that it?
0:46:03.4 Richard Kroger: Oh, something like that.
0:46:04.4 Kurt Baker: Yeah. They wanna know best practices. I agree with that.
0:46:07.7 Richard Kroger: Yeah really. What can I hide or whatever the case may be.
0:46:10.5 Kurt Baker: No, don’t be hiding things. That’s a really bad idea.
0:46:14.7 Richard Kroger: No, I say that and I wait for a lightning bolt to hit me. Yeah, okay, fine.
0:46:18.4 Kurt Baker: Absolutely. Well…
0:46:20.4 Richard Kroger: But anyway… But no, as I said, I wanted to make sure to mention, the success story program has been picked up nationally and also our webinar program.
0:46:30.7 Kurt Baker: So there’s a lot of resources out there. So any final thoughts, this has been a great topic. I appreciate you coming on, ’cause entrepreneurs are… That’s kind of the engine that makes everything roll and you’re gonna start somewhere.
0:46:40.2 Richard Kroger: Well, no, you’re right. Well, the other thing too is I’d be remiss if I didn’t plug our Women’s Business event which is coming up June 14th at Parks Casino. This is the first one that we’ve done since the virus. So, what’s her name? Tracy Davidson from one of the news stations is going to be kind of the guest speaker and coordinator. And what, pre-virus, we were getting over a hundred people who were coming to the event. It runs from 9:00 to 3:00, if you register before April 30th, it’s $25, registering afterward, I believe it’s $35. Registrations go through PayPal, once again all the information’s on the website,
0:47:32.9 Kurt Baker: Excellent. Well, thanks for coming on, Richard. We really appreciate it. You’ve been listening to Master Your Finances. Have a wonderful day.
0:47:38.5 Richard Kroger: Thank you.
0:47:39.2 ANNOUNCER: That was this week’s episode of Master Your Finances with Kurt Baker, certified Financial Planner Professional. Tune in every Sunday at 9:00 AM to expand your knowledge in building and managing your wealth. Missed an episode. No worries. You can subscribe to a free weekly episode of Master Your Finances to listen to on your favorite podcasting platform. Apple, Spotify, Google Podcasts, whatever. Master Your Finances is underwritten in part by Certified Wealth Management and Investment and Rider University. Rider offers continuing studies programs for adults who need flexibility. Want to add new skills to your resume? Take a continuing studies course at Rider University.

Current track