Agatha Achindu | Crain's Atlanta

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Agatha Achindu


Yummy Spoonfuls makes organic food for babies and toddlers. Based in Woodstock, Ga., the company grew from a home kitchen to selling products at Dean & DeLuca, Whole Foods Market, and Target. Achindu says the inspiration for her business grew out of her experience growing up on a family farm in Cameroon, West Africa. "We always ate the freshest vegetables and fruits and my mother prepared everything from scratch," she says. "This knowledge has influenced my entire life."

The Mistake:

In my early career, I was an executive with a solid income and a sound financial position. I had over $480,000 in a 401k, substantial savings, and several credit cards with high cash advance offers.

When my youngest child, Jared-Zane, came along in 2004, I realized that fresh baby food did not exist in the marketplace, and I began preparing my own organic baby food in my kitchen. My friends took notice, and began asking for help. Word spread around, and soon I was teaching childhood nutrition classes, and launching my own line of fresh, organic baby food.

[Eventually,] I left my job to start Yummy Spoonfuls. I was creditworthy, so I funded my startup using my own resources, and I believed that if I needed money down the road, I would simply go to the bank and borrow the funds. Access to credit had never been an issue, so it never crossed my mind that I would not be able to take out a loan later, if I needed working capital.

But that was a big mistake, because a few years in, I had gone through all of my own money, and needed more to keep going. By that time, I was in a very different position. I had no steady income, no job, and my husband and I had spent all of our savings – everything – and our only asset was our house.

Lenders turned me down for business loans, because I was no longer credit-worthy, having bootstrapped the business for years. There was no way to collateralize a loan at that point.

 Borrow when you have money.

The Lesson:

In hindsight, the perfect time to get a bank loan would have been in the beginning, when I was creditworthy.

Rather than using up all of our personal resources, I could have leveraged my healthy financial position to secure funding before I even left my corporate job. This is sometimes referred to as “the Magic of OPM" – other people’s money.

When you’re passionate about your idea, it’s easy to think that using your own money is the only way to go. But your passion can also be used to capture the magic of OPM, because that enthusiasm is a powerful selling tool – much more powerful than the desperation that you feel when the money runs out.

I have heard so many stories like this from fellow business owners and founders. Lack of capital is why most small businesses fail. Like me, the founder has a dream, and they leave a secure job and use their savings, not realizing the strength of their initial position. You have to use the strength that you have going in – and be prepared for the long haul.

So, the lesson I learned the hard way is: borrow when you have money. It is better to have it and not use it than to come up short when you need it. And you are going to need it. 

Follow Agatha Achindu on Twitter at @AgathaAchindu.

Photo courtesy of Yummy Spoonfuls.

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