We Took On This Much Debt To Start Our Business

Gather ‘round, folks we have a tale for you that sports Old West charm, family legacy, a few sharp-as-a-tack women, and even a lesson or two.

It all started way back in 1882, when Cat’s great-great-great-great grandmother, Rachel Ann Hudgins, purchased 11,000 acres of land. It was the start of a ranching boom in Texas, a dusty era when bowie knives were as common as mustaches. But Ms. Rachel Ann managed to be a pioneer among pioneers, and a rare combination in late-nineteenth century Texas: a female landowner and businesswoman. The ranch she built, J.D. Hudgins Ranch, is still in existence today.

Fast forward to 1974. Texas was less of a wild frontier but still saw its fair share of mustaches.  And, the legacy Rachel Ann Hudgins had established was in full swing. Cat’s grandparents, Sloan and Mollie Williams, found themselves at a crossroads and decided to ride fast and hard away from the predictable. They sold everything they had in order to buy the famed V8 Ranch from cattleman Howard Parker in a $1 million deal — an amount that was just as impressive then as it is now. It was the kind of wild move that would have made Rachel Ann proud and, true to form, it worked out. The ranch has sustained four generations of our family. 

Now, don’t go thinking that it’s time to roll credits on this Western. We’re sharing all this family history because when we started helping out photographers who are establishing their brands, we noticed they had a lot of concerns about how to finance their businesses.

On this side of the new century, Cat’s sister and her husband took out a $300,000 loan to buy a herd of Brahman cattle right after they got married. (Our grandfather didn’t bat an eye. “Y’all can do it!” he told them.) And as for us? In our early days, we also took out a loan for $30,000 to finance our budding photography business. Though neither was quite the million dollar amount of our grandparents’ days, it was still risky…and still totally worth it.

If you’re just starting out with a new business, chances are good that you’ve done your homework about money and financing—and you’ve likely heard all the experts say “debt” like it’s a bad word. Most investment advisors or financial gurus sing different versions of the same old song: To build a successful business, you need to start and/or stay debt-free. 

But here’s the thing: As any Western fan knows, just because someone wears a sheriff’s star, it doesn’t mean he’s the good guy. And just because a financial expert tells you his or her business advice is the gospel truth, it doesn’t make it so.

We come from a long line of risk takers but (and this is key!), they were calculated risks. The property deals made by Cat’s grandparents and Rachel Ann were part of an overall strategy that paid off. The loan that Cat’s sister took out was a move that needed to be made to get her and her husband started in business.

We’ve only taken out one loan so far, but we’ve never regretted it.  We would even consider another one, if it came down to it and it was right for our business.  It’s important to note that our debt was “necessary” debt, meaning we didn’t spend it on extravagant trips to Vegas and a year’s supply of Sprinkles cupcakes.  We used those funds to purchase equipment, training, and professional services that would leverage our business and make us more money.  It was debt we knew we could easily repay, even if our business didn’t produce the results we anticipated.  In other words, we leveraged our business without over-leveraging ourselves.

The real question isn’t “How can I avoid debt at all costs?” but rather “If debt is necessary, how can I take it on responsibly?” That’s the kind of attitude that will lead to your own version of riding off into the sunset.

The Takeaways

• DON’T GET CAUGHT UP IN WHAT THE TOWNSFOLK ARE SAYING: There are a million books, lectures, and TV shows that will tell you how to build a successful business. Don’t dismiss the information (some of it is very helpful), but don't accept it as the end-all-be-all truth either. 
  
  
• HEROES TAKE SMART RISKS: Don’t feel like you and your business can’t take on any debt — just do it responsibly. Consider all angles, pros, and cons, and act accordingly.  For example, government-sponsored small business loans have way better interest rates than credit cards.  If you’re considering debt, do your homework on the “best debt” you can take on.
  
  
• TUMBLEWEEDS HAVE NO REAL DIRECTION: When they’re not signaling a showdown in a Western, tumbleweeds are pretty aimless. Don’t let your business be a tumbleweed. If you choose to go the responsible debt route, then you’ll need a lot of organization, direction, and vision.  Craft a clear plan for what you will do with the money, how it will help you leverage your business, and at what rate you will pay it back.
  
  
• MAKE YOURSELF A WANTED POSTER: No, we’re not talking “dead or alive” descriptions. Once you’ve created clear goals for your business and determined how a loan could help you reach them, use that newly acquired debt as extra incentive to hustle.   Post your goals in a conspicuous place and remember that making payments larger than the minimum due and paying off that loan ASAP is like bounty hunting for free and clear profits.
  
  
•  THE GOOD, THE BAD, AND THE UGLY: Examine your relationship with money.  Many creatives believe that dealing with money isn’t pretty.   We love money the way we love our camera equipment—it’s another useful tool that helps us do our jobs effectively. And, guess how we got our great equipment?  With…you guessed it….money! It really does make the world go ‘round. Surround yourself with people and resources who can help you think about debt, wealth-building, and the exchange of money in positive new ways. 

Lasso Your Own Future & Create A Plan,

Luke & Cat

We love to teach photographers how to hone technique, artistry and business acumen to create a life that improves your craft, and a business that supports your life. For a fast track to your authentic Life & Craft, check out more about our workshops we host on our cattle ranch in Texas.

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