information at: mkannakutty@charter.net.
an annual educational program for business start-ups. If you are interested in being a part of the
Educational Committee please contact Christy James at cj@vezone.com for further information. 
NOTE:
Christy has done an excellent job for us this past year! We'd like her to continue, however her job travel
commitments are increasing, and she will not be able to attend as frequently, though she'll still serve on the
committee! If you'd like to consider chairing this committee and serving on the board, please contact Ed
Palmer: ceo@solarattic.com.
make sure that our budget goals and expectations are met for the year. They have also been asked to find a
partner for credit card processing for dues, sponsorships and registration fees. If you'd like to assist with
this committee, please contact Kathy. Chris Andryski has volunteered to assist us on this committee, and
graciously offered to serve as Chairman for the coming year.
partnerships. Presently, we are reviewing the bylaws and articles of incorporation for changes. If you'd like
to assist with this committee, please contact Roger Zahn at rzahn@e-lawfirm.com. In addition, we need to
make sure that a representative of this committee, if not the chairperson, is present at every monthly
meeting and every board of directors meeting. It would be helpful to Roger to have at least one other
lawyer serving on this committee.
the community through press releases, networking groups, and trade show participation. In addition, Eric is
in the process of supplying the infrastructure to upgrade our website and automate our membership roster
and on-line newsletter as well. If you have any interest in supporting these activities and would like to
serve on the committee, please contact eric@entrepreneursforhire.com.
challenge of building our organization, please contact Ed Palmer (ceo@solarattic.com), Eric Strauss
(eric@entrepreneursforhire.com) or Kathy Gatliff (kathy@mn-entrepreneurs.org).
with the Christy James and the Education Committee to find inspirational speakers that will complement
the monthly educational programming. If you are "well-connected" or "in-the-know" and want to help
contact speakers for these programs, please contact Jim at jpoole@sotk.com.
committee serves as a resource for the MEI organization, as well as developing a resource pool for the
individual members. We are in the process of switching our web site to a new service provider. If you
have talents in this area and would like to share your skills and expertise, please contact Joe Betz at
joeb1993@aol.com.
The three primary methods I use to obtain cash have always been selling product [sales], selling equity in
the company [common stock] and the use of debt. Debt is the focus of this article.
schemes that went well beyond mortgaging his home, emptying his savings account and exhausting the list
of friends and relatives able to invest”.
entrepreneurial experience, the subject of debt has been on my mind frequently. Should debt be used?
How much? What are the alternatives? In my earlier days, when I was quite naïve, I would mostly wonder
how to get a bank loan. That is usually the first place business people think about when trying to get
capital. It should be the last place for any startup to visit. However, banks do have a role to play in helping
operating businesses.
operational with a predictable cash flow and good financial statements. If relatives own the bank or will
cosign, that is an exception. First, we need to make the distinction between being a startup and being an
operating business.
something new]. Yes, when I step into a pile, it is usually a very deep one and, of course, my
adventuresome soul made this double challenge possible. You could contrast starting a pioneering business
with purchasing an established going concern or obtaining an established franchise.
cash flow is too unpredictable. One of my earlier rationalizations was that “a certain amount of debt is
useful in the optimization of accounting ratios and therefore should improve performance”. Whatever that
means? I read that stuff in the business books. A modern twist on this rationale is that “debt is cheaper
than equity [stock sales]”. Both thoughts are very odd to me. I have never lost much sleep over equity
stock sales. When I sold stock, I usually told people not to invest their bread money, as I would not lose
sleep over their investment. I have friends and family as investors, which can cause some concern; but it
does not cause me to lose sleep. However, the debt I have used has unleashed untold misery into my life
and the loss of sleep. Why? Simply due to the fixed “payment date” and the unfixed and unpredictable
cash flow available in any startup and especially any pioneering business.
commitment, it gives them comfort knowing you will go bust if you come up short in making the business
a success. From my experience, debt has always failed to live up to its designed purpose and has mainly
dug a deeper hole for me to get out of and this is without exceptions. That is not to say you cannot get
some things done by using debt. You can buy your equipment, get your brochure, make your payroll, etc.
However, in the long haul, when you step back, you can see the futility of debt in a startup business and
how it holds some value for an operating business.
