Deidre Mathis created Wanderstay, a hostel that offers all the comfort of a community with a few choice hotel perks – like security and a prime location. Here’s how credit cards are helping her build her hospitable empire.
Traveling should not be reserved just for the rich, and Deidre Mathis, founder of Wanderstay, is doing her part to ensure that people who are short on cash can enjoy safe and high-quality lodging.
Located in Houston, Texas, Wanderstay is a fresh take on the hostel concept. It caters specifically to budget-conscious travelers while offering fabulous private and shared accommodations.
Mathis is the first black woman to own a hostel in the United States. She wrote her book, Wanderlust: For the Young, Broke Professional, to encourage those looking to enrich their lives to explore the world.
In her travels to over 43 countries on all seven continents, Mathis fell in love with the instant community and cultural diversity that hostels provide. With Wanderstay, which Mathis opened in 2018, she brings that same experience stateside.
“We are 15 months old so are still in the startup phase. But we are currently expanding [and plan] to open our second location by fall of 2020,” says Mathis. “Our goal is to have at least four locations open by the spring of 2025.”
Mathis is poised to hit those aspirations as she is using credit cards to help build her hospitable hostel empire.
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How did you get Wanderstay off the ground?
Like many other small business owners, the biggest hurdle was getting the cash needed to open. I eventually got the funds by earning money in pitch competitions, crowdfunding, a Small Business Administration (SBA) loan and using cash from my own personal account.
Most recently, I participated in the Mastercard and Bank of America Grow Your Biz Contest, which called on small business owners from across the country to pitch their business plans. I won $25,000, which helped me take the next step in my business, along with invaluable coaching.
The industry experts I learned from included Bonin Bough of CNBC’s Cleveland Hustles; Jaclyn Johnson, the founder and CEO of Create & Cultivate; Ginger Siegel, head of small business for Mastercard North America, and Kelly Firment, head of small business credit for Bank of America.
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Were there any unexpected costs that caught you off guard?
Yes! In our first 90 days of being open, we had to replace our floors throughout the hostel – which was over $2,000. We also had to fix plumbing issues, which was a whopping $7,000. It is so important to have a cash reserve or a business credit card you can use for emergency purchases.
Speaking of business credit cards, which do you have and how have you been using them?
I have two main credit cards that I use for my business and I chose them because of the rewards and credit limits they offer. We pay for a variety of our reoccurring bills with the cards – such as our electricity bills, insurance, internet and cellphone.
One card allows me to earn flight points and that’s the Southwest Rapid Rewards Plus Credit Card. I use the flight points to get to industry conferences and events. The other credit card I have for Wanderstay is the Bank of America® Business Advantage Cash Rewards Mastercard® credit card. Since this is a cash back card, I wait until the end of each year before cashing out those rewards!
Do you usually carry over a balance or do you typically remain debt-free?
We try to use the method of using our credit card and paying it off within 30 days.
Any advice you have for entrepreneurs who are just starting out?
Plenty! This is what I tell people who want to start a small business:
- Sock money away. Save at least six months’ worth of business expenses within your first year or two of business. This gives you a small cushion to rely on in case you cannot do business for half a year.
- Get help! You cannot nor should you attempt to run your business all on your own. I highly recommend participating in business competitions such as Mastercard and Bank of America’s Grow Your Biz Contest. They give you the opportunity to win funding that will help take your business to the next level, as well as get advice and feedback from industry experts that can help you solve your business challenges.
- Don’t be too hard on yourself! Starting and running a business is hard and you are constantly learning new things every day. Take the knowledge and allow it to make you better.
- Take one day off per week for self-care. Read, watch TV, hang out with friends, go on a walk – whatever it is, just take a day off to refresh your brain.
- Create a policy and procedure book. From day one of opening your business, make sure you create a document that would allow anyone to come in and temporarily run your company in the case that you cannot.
As a business owner, what have you learned about borrowing money along the way that you urge others to adopt?
Only borrow what you can pay back – this goes for cash or credit. It is good to put money aside every month into a working capital account because it will allow you to create a safety net in case you need to take money from it. With it, you won’t have to borrow money or use a high-interest credit card when an emergency arises.