Justin Pasha had no credit when he launched his high-end mobile bar service. But then he got his first credit card, which has helped him build credit and carefully grow his business.
He didn’t have the funds to open his own establishment but had an idea: Why not deliver wow-factor bars to the public rather than the other way around?
Surprisingly, unique and ultraluxurious bartending services for private parties and events didn’t exist in the tri-state area. So, in 2014 he launched The Cup Bearer, a high-end mobile bar service for the discerning host.
“We bring what looks, feels, and functions like a fine bar to the client’s home or venue,” says Pasha. “Everything is fully custom made, built on-site. The bars function from both sides so they’re great for bartenders who are used to the best bars in Manhattan and for customers who want fresh, organic juices, premium alcohol, crystal glasses and super clear ice.”
Pasha began by buying a $500 structure from Ikea, then modifying it. “And just like that we were doing it,” he says. “We now have six beautiful and different bars people can choose from and tailored uniforms for the bartenders. It’s a totally different experience than what you get from the typical catering company.”
The Cup Bearer is breaking the mold and growth has been steady, but disrupting an industry has been a challenge. Pasha’s bare-bones operating budget needed to be relieved – and that pressure has been reduced by getting his first credit card.
See related: Small Business Profile: Local Food Adventures
What was your credit like when you first started the business?
Nonexistent. All I had was a student loan that I was paying back. I didn’t have a business loan or a credit card, because at the time I wasn’t eligible. If I had the ability to borrow I would have. Then I could have had someone help me with basic things, like the website and SEO.
I probably would have purchased a decent van a lot sooner, too. For the first two years, I was working out of an old pickup truck that was so beat-up I had to park it out of sight, and when it rained everything got wet!
Then again, if I did have a credit card at that time, I may not have spent it on the right things. I needed to learn more about the costs of the business and how credit really works.
In business, you have to crawl, walk and then run. I’m somewhere in the middle now.
So, then you did get a credit card? How is it going?
Yes, I got my first credit card about a year ago. I have the Capital One® Platinum Credit Card. My brother recommended it to me. At the time, my credit was finally OK because I had bought and financed a mattress, which I completely paid off.
The limit for my card started very low, at just $500. Now it’s $2,000. Having it is a huge relief. It gives me the financial flexibility I need for the weeks where there isn’t any business coming in. We have serious down-seasons.
When cash is tight I use the card for personal expenses, such as to pay for food, get a haircut. I know these things are not specifically for the business, but since I’m the sole proprietor, I am the business. I pay my balance off every month because I don’t like the idea of debt.
In a perfect world, I’d have $100,000 to use for my business. It’s incredible what I was able to do without the capital, but I could really use more now.
I’ve found that the credit card is good for budgeting. I’m always aware of how much I’m spending with it. I live frugally so I don’t rack up credit card debt. I stopped drinking a few years ago, I don’t eat out or go on dates. Nothing in my closet is new. Everything I earn and spend is reinvested in the company because I live for it. I’m lucky because it’s a fun and flashy business.
Of course, I’ve made a few mistakes. Like last year I projected that the business would double, so I took the money I had – $10,000 – and bought a new set of bars. It didn’t happen as I thought, though.
I learned that you have to be honest with yourself. It’s good that I didn’t have a credit card with a high limit because I might have used it and gotten into trouble.
Tip: If you’re a small-business owner looking to improve cash flow for your business, there are several steps you can take. These include raising your social media visibility, putting your slow-moving merchandise on sale or applying for a 0 percent APR credit card.
What advice about credit do you have for other small-business owners who are in the crawl-to-walk stage?
Listen to the experts when they say, “This will be good for your credit, and that won’t.” There is so much junk that people who don’t know anything about credit will tell you.
You have to understand how credit works. This is not intuitive stuff, so don’t expect to just know it. It’s up to you to figure it out, so make it your side job to learn. I probably would be further along if I did. [Credit card issuers] wouldn’t give me or my company a credit card in the very beginning, but now I get why.
Make building a credit history a priority. At some point, and probably sooner than you think, you will need a lot more capital to grow your business and a credit card can be really helpful.
But also, be vigilant regarding spending. Don’t keep a balance. There’s not a lot of dignity in debt. Think about it this way: When you owe someone, you’re owned.