If you want to be successful in business you better be ready to act on opportunities the second they present themselves. Jody Riley is no stranger to this concept as she saw a unique opportunity in transportation services and jumped at it. She signed a service contract with a charter school on a Friday, leased buses and found drivers over the weekend, and rolled out that following Monday as a newly formed company named Red Star Transportation. From the outside, Riley makes being an entrepreneur look easy. However, from the inside she can tell you it takes a lot of hard work and there are many obstacles to overcome, some you would never suspect.
Riley never wanted to be a business owner. She grew up in business – her dad’s businesses – and saw the negative consequences that can come from owning a business as her dad had “failed at it left and right.” Though “he had great ideas,” Riley admits he “wasn’t a business man.” Riley also saw the stress her dad went through with each business venture. She understood that owning a business was a huge commitment both in money and time and pushed Riley from ever wanting to own a business herself, however, it also ignited something inside her, a desire to help failing companies.
Riley found herself contracting her services out to these floundering companies in order to help them turn around and become successful again. And it was during one of these times that a client for a company she was working for approached her and offered her a service agreement. The company that originally had the service agreement was going under due to bad business decisions, and needed a new service provide. They knew Riley and her background in business and offered the contract to her even though she did not technically have a business of her own. This was the pivotal moment that Riley realized she had the opportunity and the necessary business acumen to not only have her own small business but more importantly to make it successful. So, with an emerging entrepreneurial spirit she took a leap of faith and became a small business owner, something she never intended for her life.
Right out of the gates Riley faced considerable obstacles. Even though she created a working company in the span of a weekend, Riley was confronted by numerous barriers to entry as a new business, including being a woman owned business. “There’s a lot of challenges to a small business, and especially a woman owned small business. I’m in an industry where it’s mostly all male.” Between varying government agencies trying to shut her down (her largest competitor) and other established competitors dominating the market, none of these seemingly insurmountable obstacles deterred Riley from pushing forward and fighting for her company. “You can overcome any challenge as long as you work hard at it.” Riley persevered and Red Star Transportation was able to continue to offer its services.
One contract and five older leased buses was a start, however, Riley aspired to grow her budding business. To do this, she needed capital to purchase more school buses, costing around $55,000 each. Riley created a business plan in an attempt to get traditional funding in the form of a bank loan, but her request was denied. Though, she brought strong financials as well as a signed contract for services, the banks still said “no.” Riley believes she was denied because she didn’t own her own home and possessed no other means of collateral. This detour in funding didn’t stop Riley. She sought out a different path for funding and began to consider non-traditional means to gain the capital she required. What she found was a private investment company in New York that focused on small company investments, called FIG Capital. Through them she obtained a 3-year loan with a “very competitive [interest] rate,” which gave her the necessary capital to buy her busses and quickly grow Red Star Transportation.
Today, Riley’s business is steadily growing and surpassed one million in revenue last year (up from $250,000 the first year), and is projected to do the same again this year. Beyond transportation services, Red Star Transportation now contracts out their drivers, offers bus driver training, performs services in diesel repair and maintenance with road side assistance, and now operates a small fleet of busses. Riley is now considering expanding her operations into new markets and will be looking to secure additional capital to support the expansion. “[It] takes money to make money… If I could get more funding I could go faster with it… we would have business the very next day,” she professes. Riley further adds that she would definitely go the nontraditional financing route again because she “got turned down so many times” through traditional methods, and “unconventional [ways] didn’t turn me down… I’m full on unconventional.”
There are numerous alternative or nontraditional routes to funding and investing money for emerging businesses that are often unknown to the greater business community. Leading Retirement Solutions is proud to bring you these unique stories of prosperous business ventures that find success despite the financial obstacles laid before them.