Elections, Uncertainty And A Reality Check

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No matter what side of the political spectrum you fall on – everyone I know can agree on one fact. This election is insane and the candidates have most of us asking, “if  [Insert name of your favorite evil candidate here] is elected, will the economy tank and will that kill my business?” Doom, gloom and Armageddon are predicted everywhere if that “SOB gets elected”, but it’s funny that we are all still here after generations of corrupt and inept politicians and we will survive this election as well.

As a guy who was born when Truman was President, I have seen a lot of economic cycles. My first, up close and personal experience was in 1973 under Richard Nixon and it didn’t turn around until 1975 under Gerald Ford.  I had just opened my first restaurant in New York City and walked face first into quadrupling oil prices, gas lines and rising unemployment.  Holy crap! A new restaurant with lots of empty seats and I really didn’t know what they hell I was doing. Needless to say, my inaugural experience in the restaurant business was like jumping into a swimming pool full of ice water.  The one great thing about this whipping was I got my first lesson in surviving as a restaurant owner – and we did.

Multiple speed bumps followed with the recessions in 1980, ‘81 and ‘82, with each one having its own twist and Ronald Reagan presiding over budget cuts, spikes in unemployment, the savings and loan crisis and more.  The guys on Wall Street and in Washington were tackling the wild ride of inflation and countering its effect by increasing interest rates, further restricting small business access to working capital. For me and thousands of other restaurant owners it was just noise as we got up every morning and went to work as we kept the economy moving ahead regardless of the national and global economic state. Restaurant people are tough and resourceful survivors. If they knew how to manage their money and they had access to working capital, they actually thrived through downturns taking advantage of attractive deals and the misfortune of those less prudent.

Living through these economic cycles and shifts in political power made me realize that it really didn’t matter if a Democrat or Republican was driving the bus, or if the economy was up or down. What mattered was how you run your business, solid cash flow management and access to working capital when great opportunities present themselves or when downturns hit.  This is one of the main reasons we started Strategic Funding to finance small businesses in 2006. Regardless of the external forces – small business owners keep pushing forward as their business is their life.

In 2007, we had just settled into the brave new world of financing restaurants, retailers and other small businesses when we were hit with the collapse of the mortgage industry and the resulting housing bubble. The global financial crisis took down many of the largest financial institutions in the world and brought us to the brink of another depression.  Many banks, insurance companies and the auto industry almost vaporized, but that year, our little company plowed ahead and continued to finance small businesses throughout the Great Recession. Our customers withstood the storm and Strategic grew and became profitable in 2008.  We were surprised as well because the world economy was burning, but people were still eating out.

  • Atosa USA
  • RATIONAL USA
  • Simplot Frozen Avocado
  • McKee Foodservice
  • DAVO Sales Tax
  • AyrKing Mixstir
  • Imperial Dade
  • Inline Plastics Safe-T-Chef
  • Day & Nite
  • Texas Pete
  • RAK Porcelain
  • BelGioioso Burrata
  • Red Gold Sacramento
  • T&S Brass Eversteel Pre-Rinse Units

Today I find myself listening to all the fear mongering and misinformation which drives tribal mobs into a frenzy. But underneath it all I can say with certainty, that restaurant people will open their doors and serve their customers because their business feeds and houses their families.

I recently had a young owner talk to me at our booth at an industry tradeshow.  He was full of enthusiasm because he had the opportunity to expand into the store next to his adding much needed seating and bathrooms. He was frustrated however that his bank had turned him down for a loan and that he might lose this opportunity for lack of capital. As I have said in prior articles, some of the best opportunities present themselves at the most inopportune times.  I am really happy to say we quickly funded him and helped this entrepreneur take advantage of this windfall. He secured the new space, broke through to his existing restaurant and effectively doubled his sales volume. A giant leap for this tiny restaurant. Crazy political environment or not, we did it and he will most certainly thrive because we believe in small businesses.

The moral to the story?  Blue state or red – the color that matters most to small business owners in this election is the color of money – GREEN. It is up to you to manage your business and cash flow and neither Trump nor Clinton will be running your business so don’t worry about it.


Questions for Dave? Write to dsederholt@sfscapital.com

  • AyrKing Mixstir
  • RATIONAL USA
  • T&S Brass Eversteel Pre-Rinse Units
  • Simplot Frozen Avocado
  • Inline Plastics Safe-T-Chef
  • Red Gold Sacramento
  • McKee Foodservice
  • Day & Nite
  • Imperial Dade
  • RAK Porcelain
  • DAVO Sales Tax
  • Texas Pete
  • BelGioioso Burrata
  • Atosa USA
David Sederholt
David Sederholt is a multi-discipline entrepreneur who has launched and built numerous companies in specialty finance, foodservice and commercial real estate over 40 years. After owning, financing and operating over a dozen restaurants in his career he found a niche in serving small businesses seeking financing and strategic advice. For 10 years he served as Chief Operating Office of Strategic Funding Source, Inc., (now called Kapitus). David has also been a Managing Partner at a boutique investment bank and a specialty commercial real estate firm. He is a regular guest lecturer and contributor to business and industry publications as well as serving as a Board member and advisor to numerous companies and non-profit organizations. He is currently owner of Ragnar Partners, LLC, a private investment and advisory firm.