Who should I turn to? - business financing - Brief Article - Statistical Data Included

Black Enterprise, April, 2001 by Bridget McCrea

Lee and Calvert Wright's advice on avoiding business pitfalls

Being turned down three times in a row for a line of bank credit is devastating for any small business. For Calvert and Lee Wright, of Wright Solutions Inc. in Lanham, Maryland, it was just downright irritating. Their personal credit was clean, business plan solid, and financials in line with expectations, but the company just hadn't been in business long enough to satisfy the bank.

Wright Solutions Inc., incorporated in 1998, and became a full-time endeavor for its founders in 1999. This provider of procurement consulting and contract professional services found itself out of luck when it came to bank financing.

After posting an $8,000 loss in 1999 due to normal business expenditures incurred during that year, the Wrights turned to their customers for help. With Unisys and Computer Sciences Corp., among other clients, the pair negotiated payment terms to a svelte 15 days, instead of the normal 60-to-90-day cycle, to improve cash flow.

The strategy worked. In 2000, company sales reached $950,000 and are expected to hit $3 million this year. Marcia Layton Turner, author of The Unofficial Guide to Starting a Small Business (Hungry Minds Inc., $16), calls the Wright's strategy of turning to customers for help in improving cash flow a savvy move.

"If a business can get clients to pay more quickly, they'll avoid the fees associated with using a line of credit or other financing tools," says Turner. "In this age of companies paying net 30 at best, Wright Solutions obviously has solid relationships with its clients and strong negotiating skills."

Wright Solutions was launched from home with a personal investment of $5,000. Today, the company has 10 employees and works with customers in the Washington, D.C., area and nationwide on various projects, including preparation for government audits, most notably the Contractors Purchasing System Review, or CPSR. According to Calvert Wright, vice president and COO, all federal contractors selling at least $25 million annually to Uncle Sam are subject to the audit.

"We help them assess whether or not their systems are capable of passing the audit." The company generally charges a consulting fee of $85 an hour, with contract professionals fees varying according to candidate and market trends.

Realizing that many small business owners may have been sidelined by the financing setback her own company suffered, Lee Wright advises entrepreneurs to "just stay focused on their dreams."

"There will always be people and circumstances out there trying to hold you back," she says. "But if you have the dream, the desire, and the drive to really reach your vision, you will succeed."

Wright Solutions Inc., 8300 Professional Pl., Suite 104, Lanham, MD 20785; 301-459-3552; www.wrightsolutions.net.