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How to Leverage Financial Possibilities Post-COVID

How to Leverage Financial Possibilities Post-COVID with Dr. Money

Do you now how to leverage or finance assets the most efficient way?  Dr. Stephanie Ardrey (aka Dr. Money) can teach you how!

Dr. Ardrey is the CEO/President of Blu Diamond Group, Inc., including: Blu Diamond Advisory, Blu Diamond Capital, and Blu Diamond Properties.  As an entrepreneur, she has maintained impeccable market vision and has conceptualized and launched multiple business ventures. Her entrepreneurial and corporate experience has covered real estate finance, construction and development, consumer goods, entertainment, music, film, television, high-tech, financial services, insurance, municipalities and more.

Twitter: @IAmDrMoney

LinkedIn: Dr. Stephanie Ardrey

Listen to the podcast here:

Read Along as Karla and Dr. Money discuss Leveraging Financial Possibilities Post-COVID

Karla Nelson:  And welcome to the People Catalyst Podcast. Dr. Stephanie Ardrey.

Dr. Stephanie Ardrey:  Hi, Karla. Thanks for having me. So excited to spend some time with you.

Karla Nelson:  Yes, yes. We are excited about what we’re talking about here today because it is something, I have been talking with business owners, and entrepreneurs pretty much nonstop in regard to financing and capitalizing your businesses. We’ve all heard about these loans that are going through, the PPP loan. What’s happening with the labor market right now, due to this pandemic. I mean, it’s just at the forefront of so many people’s questions about where they need to go, and the plan that they need to get there. And of course, we had a chance to chat a little bit before we started the podcast here and don’t wait until you need the capital.

Dr. Stephanie Ardrey:  Absolutely.

Karla Nelson:  Have a plan ahead of time. And so that might not be a hundred percent. And I always used to say, the answer is always, yes, can you get financing and raise capital? It’s just when. There’s the unknown is the when. And so-

Dr. Stephanie Ardrey:  True.

Karla Nelson:  Share with us a little bit about your really interesting entrepreneurial journey.

Dr. Stephanie Ardrey:  Wow. Karla, I don’t know how much time we have here, so I have to do it in sound bites.

Karla Nelson:  Yes, you can. Absolutely. You just have to make sure you start with being pushed into actually having to create your business to realizing that that is who you were, were an entrepreneur. Definitely connect those dots. Because I think it’s really interesting.

Dr. Stephanie Ardrey:  Yeah. Well, it’s so true. So, I was the average kid. Graduate high school, starting college full time, and was looking for part time work and couldn’t find employment because I hadn’t spent time, as most young people in fast food. I had actually worked in an office environment. I was working for the Oakland Unified School District in the GATE division. And was on part of the secretary of team while being high school students. So, you get those like work study programs. So that’s what I had been doing. And I typed about 80 or 90 words a minute. And I-

Karla Nelson:  That’s impressive.

Dr. Stephanie Ardrey:  Strong writing background. So, I did very well in that environment. And so, what they wanted to do, was they wanted to offer me full time employment, but that wouldn’t allow me to go to college full time and I didn’t want to do that. So, I was stuck with, oh my goodness, I can’t find work. And my mother had across an RFP at the time, for a contract with the California State Library Association and she looked at it and she said, “I think you could probably do this.” So, I did, I responded to the RFP and in truth, they didn’t want me at first, their first candidate actually declined the contract and I was the runner up. So, I was able to win the contract.

Karla Nelson:  But that’s only because you were 18.

Dr. Stephanie Ardrey:  I was 18.

Karla Nelson:  That’s awesome. So, you have the first RFP with the school district when you were 18.

Dr. Stephanie Ardrey:  Yeah, California State Library Association. Yes. And so, I was hired to set up the operations for the Second Start Adult Literacy Program. So, my part, I was responsible for just, all of our operational protocols, how would we function, what is the process? So, I started off having that type of responsibility. And then once I graduated, I had made a change because I had to do some negotiation with my mom. Originally, I prepare to go to UC Berkeley to study medicine and become a plastic surgeon. But about my 10th grade, my mother was kind of saying, “Well, I just can’t see you spending all this additional time in school, and not really certain in terms of the outcomes.” She had become a little bit disillusioned after having invested in her own education and felt like it became an impediment to her progress as opposed to helping to facilitate her progress.

Karla Nelson:  Well, especially with the debt and the timing. And it’s like, you were getting on the job training, as you were going to college. And if you hadn’t been, it would have been like, boop, hit rewind. I think a lot of people do that when their focus is just focused on college.

Dr. Stephanie Ardrey:  Absolutely. It really created an interesting situation. So actually, by the time it came time to graduate from school, I did this two-year program. So, I earned my associates. And I found that I was really attracted to businesses, because unlike many of my classmates, I actually had business and work experience. And the fact that I had owned my own business while in school really stood out, because that demonstrated that I had my own initiatives. So, you were not going to need to micromanage me. I could take responsibility; I could initiate, and I could find solutions. So those things really worked well for me.

And then also the professors were entrepreneurs. So, I really, when I studied bookkeeping, for example, I was being trained by a CPA. So, I just had a real rich education that I was able to immediately translate into business practices.

Karla Nelson:  That’s awesome. Okay. You have to share also your first business and your tagline. I can recall it, but it’s really cool.

Dr. Stephanie Ardrey:  So, it’s so cute. So, after I spent a little time in the corporate world, I realized that I really was an entrepreneur. So now the problem was how do you leave your job and go back into business? So, I needed to create kind of two businesses. I needed to create one business that would replace my income. Am allow me some flexibility. So, I could then create the second business. So, my first business was Nighttime Business Services, and my tag was nine to nine is our work time. Call us day or night for a job done right.

Karla Nelson:  I love it. That was when you couldn’t get the project done overnight, because everybody just worked nine to five way back in the day. Right now, it’s a thing.

Dr. Stephanie Ardrey:  Right.

Karla Nelson:  24 hours is a thing. Order stuff online 24 hours is a thing. So, well, that is super, I love, you demonstrated several things there. You always had a plan, and that get the on the job training and don’t be afraid to start just jump in and make something happen. Just so that you have a plan that you can move. And strategically, that is a really cool story. So how did you get into finance then?

Dr. Stephanie Ardrey:  Oh, so finance became really my second career because I stay… So, the second business that I wanted to create was in the marketing communication space. And ultimately an advertising agency, because as I grew my business, I began to realize where there were certain gaps in the market. And I understood that in order to be able to win some of the major contracts, you had to have a certain size, and scale organization. So, then I started contemplating, I created strategic alliances where I had other small agencies that operated in some of the key markets. We aligned ourselves strategically to make ourselves become stronger, so that we could go after other contracts.

And then I went a step further and structured a joint venture that then allowed me to leverage, I guess you say to my JV partners, the business and the capitalized billings that they had been able to also accumulate through their owners. And so collectively my company was then a $250 million backed agency. Which gave it the largest ability to go after major contracts in the marketplace. So that was my first business. That was the second business that really went and grew and evolved to this larger organization where we had eight offices over 400 employees.

So that was my real big play on the path to creating a billion-dollar organization. But after so many years in that space, what I realized is that I was trying to educate the market on multicultural communications, at a time that they weren’t receptive to that messaging. So that’s kind of been probably the story of my path is that I am a visionary. Sometimes my vision is ahead of the curve. And so, what I learned is if you have the vision ahead of time, then you’ve got to have the money to educate the market. Then have the desire to still be in the market when finding the market comes around and is ready to do business with you. Frankly, for me, I was exhausted by that point.

And I didn’t like the way that we had to bid on contracts. Because we’d have to basically reveal our secret sauce, and then hope that the client that we’ve pitched to have the integrity, to keep our information confidential, and not just take our insight and award then their existing vendor, using our information. And unfortunately, that happened too many times. And so, I just couldn’t imagine spending the rest of my career with that pent-up frustration that people can legally steal your information and you really had no recourse.

Karla Nelson:  No kidding.

Dr. Stephanie Ardrey:  So, I left the advertising and communications world, and thankfully I felt that I was still pretty young. So, I went to school and I studied real estate finance and development. So, I came out of USC. I attended a certificate program in real estate, finance and development. And so that was the beginning of my pivot to this whole real estate and finance platform that I began to not only learn and master, but then build upon.

Karla Nelson:  That’s awesome. And now in your spare time, I know you’re going and getting your law degree too. So, you are awesome. You always have a plan for something, you strategically focus on, even, I love the strategic alliances that you built there, and then was able to capitalize. There’s a really unique way of how you can capitalize your business by the way.

Dr. Stephanie Ardrey:  Absolutely.

Karla Nelson:  Not everybody thinks of putting those JVs together. Or sometimes reverse engineer where you go to work for some of the larger ones that can bid on them, but that you’re awarded certain contracts as well. And so, okay. Business and commercial finance, and real estate finance. That’s my background too. So, I’m really interested in, usually you don’t hear marketing and ad agency, and then finance. So, what part of finance did you really like? Because I like the creative side of it. I didn’t like to really dig in all of the Excel spreadsheets and all the really specific stuff, but I loved to tell the story of, and helped somebody strategically identify and you obviously like planning.

We can go on a vacation anytime, honey, because I know that you’ll have everything figured out. But so, with that, what part of the finance do you like? How did that pull you in from marketing and ads? Just typically the types of individuals that live in those two worlds, is not the same.

Dr. Stephanie Ardrey:  I know it gave me such a market competitive advantage because I really was doing quantitative analysis before that was a thing, in the marketing space. Because my true secret is that I can say I kind of was a closet bean counter and techie. Because even when I was in high school, just for summer fun, I did a class in microcomputer electronics. So, I was building computers because, so I was that rare student. Normally you start off in school, you’re either math and science or you’re communications. So, my natural orientation is that I really am math and science and I really am a true introvert. But because my mother was a writer and a communications major, she made me a writer and communicator as well. So, I’ve always been, a hidden threat in any environment because they never could figure out how I do what I do, but it’s all math and science based.

Karla Nelson:  That’s awesome. I always say it’s an art and a science.

Dr. Stephanie Ardrey:  Yes.

Karla Nelson:  Every single thing in business is an art and a science. And-

Dr. Stephanie Ardrey:  Exactly.

Karla Nelson:  having both components is really critical. So share with us a little bit about, especially the current times that we’re working in right now, in some creative capitalization strategies, and we already talked about, wait, and don’t wait until you actually need the capital. You need to have a plan, and a plan for when things don’t go well. Like all of a sudden you closed the doors, you’re not open for a month. Can you share with us maybe a story of some unique way… You already shared your own, where you identified other smaller agencies and were able to capitalize your business and get those larger contracts because you guys all work together. But I think a lot of times CEOs tend to be earlier adopters and forget that finance piece of it. And you need to have a bean counter somewhere.

Dr. Stephanie Ardrey:  Yes.

Karla Nelson:  I like how you said that. You have to have that; you have to fill that space. So, what are some of the strategies that you would share with our listeners in regard to either unique ways, or even traditional ways that people don’t think of?

Dr. Stephanie Ardrey:  Yes, absolutely. Excellent question. So, what I usually have people do is if you’re thinking about, okay, I think I need $250,000, then I’ll have them do a use of funds summary. Basically, taking an Excel spreadsheet and listing out how you’re going to allocate that $250,000. And then depending upon those particular allocations, so I’m going to buy equipment, I’m going to lease this over here, whatever, whatever. Then I take, and I carve out, I carve out items from that list that can stand as its own asset or collateral.

So, what I’m saying is, if you have ten items on your list, some of those items include working capital. Working capital might be the hardest money to find. So, I’m going to keep that in its bucket. I have to borrow for a line of credit for that working capital. But if I have equipment requirements, equipment can be its own collateral. So, I can use equipment financing to finance that equipment. So, let’s use the equipment financing on that equipment. So, I’ll give you a great example. So, for example, a client of mine, leased a space and they needed to do a certain amount of tenant improvements to modify the space for their franchise requirements. And in that they had the construction work that they needed to pay for, all of the permits and fees, but then they also had an extensive amount of equipment that was required for the project.

So, we did a carve out on the equipment and financed the equipment separately. And then took money that we were able to get in terms of a line of credit and use that most strategically. Which also reduced the amount of owners’ equity. Owners, or even third-party investors equity. Because if we look at, in the hierarchy of things, the most expensive capital is that investor, that third party capital. So, you want to minimize the use of that, to extreme conditions where you just have no other source but needing to go outside for that capital.

Karla Nelson:  Mm-hmm (affirmative). Yep.

Dr. Stephanie Ardrey:  If you can use debts, then you want to really maximize the debt. And it’s the same thing in terms of the cost of that debt. You’re looking for terms, but I think a lot of times entrepreneurs get too caught up in interest rate on debt for a business is different than interest rate on debt for a person.

Karla Nelson:  Mm-hmm (affirmative). Very different.

Dr. Stephanie Ardrey:  Yeah.

Karla Nelson:  And it’s a lot more creative.

Dr. Stephanie Ardrey:  Sure.

Karla Nelson:  When you’re working with a business owner entrepreneur. However, I mean, you can be financing your real estate in regards… And your business in two separate loans with… It’s just a very, kind of wave your magic wand a little bit. I want to say, instead of when you’re working with an owner of a home. Or they’ve got credit card experience. You’re working with, not in it, slash investor and or a business owner. And so, the regulations associated with that make it very cookie cutter. Whereas in business and commercial finance, you really can be quite innovative in the way that you are applying the way that you’re going to utilize the, either debt or equity, or some other type of leveraged capital.

Dr. Stephanie Ardrey:  Absolutely. Absolutely. And I think it’s important. And I think that’s kind of one of the things that I’ve been speaking to lately. So, let’s talk about COVID for example, a few things emerged in this COVID experience. I spent the last several weeks assisting clients with preparing their PPP applications, doing their notes, financial statement, and really helping them understand what part qualified, and how to qualify and complete those packages as well as the EIDL one which was the Economic Impact Disaster Loans.

In both of those instances, things that when we looked at the guidelines that wasn’t revealed on the front end, was something like this, people didn’t know that SBA loan pulled Dun & Bradstreet to look at their business credit profiles. That wasn’t shared as part of a criteria. There are people who actually were denied for PPPs or EIDL Loans because they had not built up their corporate credit.

So that was a problem. The second thing I always talk about having a diversity in banking relationships. And making sure that you interview your bank before you set up a banking account, because you have to make sure that they even lend in your asset class. Because some banks don’t lend in certain asset classes. So why would you spend all this time building your banking business relationship with them, only to learn that they’re not ever going to really give you any meaningful capital opportunities, then you need to have a different relationship.

Karla Nelson:  I see that happening all the time in factoring.

Dr. Stephanie Ardrey:  Not only just factoring but look, it happened with COVID. Think about all of the small businesses-

Karla Nelson:  Oh, it’s true.

Dr. Stephanie Ardrey:  They had all the retail bank accounts and the retail banks, because remember every bank, every lender has a threshold, in terms of exposure that they can take on in any particular lending category. So, they went after their big clients first, and then they had no lending capacity for the smaller folks. And so, I was on my soapbox yelling, “This is why I told you to have different banking relationships.”

Karla Nelson:  Yes.

Dr. Stephanie Ardrey:  Because instead of just having all your money in these retail banks, you are not important. You’re not sitting on a big enough account or relationship with them to make them feel like you matter. So, come on.

Karla Nelson:  Absolutely. I can’t tell you how many times I’ve heard something in regard to, gosh, we should have done fill in the blank. So, your best strategy is definitely a… What did I always say? Your best defense is a great offense.

Dr. Stephanie Ardrey:  Yes, yes.

Karla Nelson:  Having that offensive aspect of having a plan for your finance. And I really like how you pointed out the relationships in the banking, because I heard over and over and over again, that those that were with the larger banks, like Wells Fargo, I didn’t hear it so much on Chase, but just the big ones everybody knows, you’re right. Yeah. I ended up going down to the local community bank and then ended up moving all of their banking because they might have not been this huge big guy. They were a little guy.

Dr. Stephanie Ardrey:  Absolutely.

Karla Nelson:  So think about strategic relationships and I think expanding those.

Dr. Stephanie Ardrey:  Yeah.

Karla Nelson:  Because there’s so many different types of capital and understanding that. And a lot of times, I think, especially in new ventures the third party that you were talking about, angel investors, BC, private equity, investment banking. That’s what a lot of them think about first, hedge funds are a little more creative and unique. They think of those first, rather than figuring out a different way to get to the place they want to be. I mean, which is interesting. And just having a really great relationship with a lot of different individuals in the, not only banking space. But just lending space.

Dr. Stephanie Ardrey:  Yes. And so it’s so important because the kind of tell on, of my knowledge in finance grew after the financial market collapse, where I found myself as an executive in the real estate development environment, and then being unemployed and kind of forced to go back into business again. I had taken on a corporate job with the aim of building out my experience, building up my professional portfolio and getting my son off to college. And then as soon as he went to college, then being able to go back into business, but that I was forced prematurely to have to try to go back into business under circumstances, that definitely were not favorable. So immediately I found myself struggling with the same type of cash issues that many entrepreneurs struggle with.

And it was different for me than when I started my earlier companies because I was able to plan the earlier ones out. So, by the time I went into business, I had plenty of money reserves. I had the perfect credit set up. I was all in. This time around, I own property, I’ve got mortgages and an interruption in my cashflow can create a domino effect in terms of my financial state.

Karla Nelson:  And it did for a lot of people in 2008, because we ended up morphing into a consulting firm. Because when your lending sources are saying, they want to reduce their portfolio by 40%, you’re going, okay. They might take an A++ but they’re going to be dragging their feet all the way home when they don’t know, what’s going to happen in that financial crisis. And so, what we did is we had… But we didn’t want to not take care of our clients. It was really struggle. And I like you, has had real estate. And just like the individuals we were working with, they might have two companies, three commercial buildings, 12 rental homes. And what was happening is, that ended up being a real estate and a finance function. And so now all of a sudden, you’re upside down.

Dr. Stephanie Ardrey:  Yes.

Karla Nelson:  You’re over your head in a commercial building yet they’re going to the commercial broker, or they’re going to the real estate agent to ask for help. Yet, it’s a finance function. I thought that was really interested because it’s probably why I have such a… Because I reverse engineered it. I ended up opening up the real estate side because now I needed somebody who could do my short sales.

Dr. Stephanie Ardrey:  Sure.

Karla Nelson:  Because I could figure out the finance function of it. But if it was like, what comes first, the chicken or the egg kind of thing that would up happening in that scenario.

Dr. Stephanie Ardrey:  Absolutely. Yeah. Spot on. Yeah. You’re so right. I saw so many different scenarios. And then also, because of my prior experience with the incubator model, I was asked to advise, because now this was getting hot again in terms of this launching new ventures. So, I became part of a couple of investment groups and I became a requested advisor for several different funds. So, everybody that was doing any type of pitch, or financing. And so, then I created a model in that particular space, but I did a drill down where I really became an expert in venture finance. So much so that when I completed my doctorate, my DBA, my dissertation was on venture capital for independent filmmakers. Basically-

Karla Nelson:  Oh really.

Dr. Stephanie Ardrey:  Yeah. Basically, yes.

Karla Nelson:  I’ve got a connection I need to make for you in that regard. And that is such a unique space, by the way, you just said, that one is like gas stations, it’s all in its own little vertical. I mean, you’ve got to know so many things and you can make really good money, or you cannot, if you don’t have all your ducks in a row in creating film. That is a really interesting vertical. And so, what would you share with our listeners that… I mean, I heard have a plan. You got started, you strategically went from thing to thing. You had a plan so that you could get there all the way to the end. What should our listeners do if they’re sitting there right now, and either people are doing really well that I’ve experienced, either our clients or whoever, doing really well, having some serious concerns because the floor just got dropped out from underneath them.

Or there’s this third category, Stephanie, that I’ve just been feeling like they’re kind of deer in the headlights. And I think that’s a really scary place to be right now. I mean, it’d be better to just close up your doors and do something else than it would be to link the… Have this deer in the headlights kind of look and not be proactive. So, what would you share with our listeners? Or if they’re trying to start a new venture, you know what? More millionaires are created during downturns than upturns. It’s actually a greater opportunity. So, could you share-

Dr. Stephanie Ardrey:  Absolutely.

Karla Nelson:  A little bit about your tips and points that…

Dr. Stephanie Ardrey:  Oh, absolutely. Because I think this is a great opportunity. And it’s just, dependent upon how you look at the glass. Are you going to look at it as half full or half empty? And so, it’s about one, the first thing you want to do is you want to gain your momentum by making sure that you set the appropriate mindset. So, it starts with the mindset. Because if you’re taking actions, but you don’t fully believe in those actions, you’ve taken on a pessimistic attitude, then chances are, you’re not going to realize the results. Because that energy is beating you to every client or every contact that you’re making.

So, you want to make sure that your mindset is appropriate and that you’re not operating from fear. So, it’s like step back, take a deep breath, gain some type of perspective. Now think about what is your exit anyway. What were you thinking? Where are you in that business that you were thinking. Were you thinking that, you know what we were doing so great, I was going to be able to exit in ten years? Okay. Because now let’s then look at, and what were you planning in terms of what you needed to walk away with at the time of that exit?

So now let’s kind of look at that destination and come back to where you are at this point. Do you need to pivot and explore a new business opportunity? Do you need to add a variation to your business? So for example, when I looked at the medical space, I’m like, okay, any physician in private practice, any dentist, any chiropractor that’s in practice, COVID is now requiring that they either have some type of telemedicine element of their business. They incorporate it in some way, to their business, or they begin to explore other elements. So instead of just those other elements, some of those other elements are okay, you’re a physician and you have an expertise in this particular area. Is there an opportunity to contribute to a new technology or a new process that could be improved?

Could you kind of pivot by being an advisor or helping to create this technology that now finances your exit. So just kind of really taking that assessment. And so that’s really what it is, is taking what I call my quick and dirty SOS. What is the situation? What are the obstacles, and the opportunities, and then what’s the right strategy?

Karla Nelson:  I love it. I love it. I think we were separated at birth. I have like three pages of notes here Stephanie. It is so true. That is so amazing. So where can our listeners get ahold of you at?

Dr. Stephanie Ardrey:  Yes. So, I’m based out of Newport Beach. My company is Blue Diamond Capital. And so, my number is (949) 258-4341. (949) 258-4341. And then you also will hear of me out in the marketplace referred to as Dr. Money. So, I’m doing a lot of speaking and training.

Karla Nelson:  Oh, I like that, Dr. Money.

Dr. Stephanie Ardrey:  Dr. Money brand.

Karla Nelson:  That’s awesome. Well, I sure appreciate you sharing your brilliance with us here, Stephanie today. And I have a feeling this will not be the end of our conversation together.

Dr. Stephanie Ardrey:  Oh, I hope not. Karla, you are so fun. And clearly, we have, like you said, separated at birth I believe. It has been such a wonderful opportunity to speak with you.

Karla Nelson:  Yes.

Dr. Stephanie Ardrey:  Yes.

Karla Nelson:  Thank you again, so much. We will be in touch.

Dr. Stephanie Ardrey:  Lovely.