My Biggest Mistake: Thinking that good credit meant easy financing

Consultants, self-help gurus and moms agree: Mistakes are how we learn. Small-business owners tell us their biggest errors. Here is this week's:

Business owner: Margie Mullen, Los Angeles

Companies: Mullen Advisory and KidExerciser

The mistake: Assuming that as a successful financial advisor with a very high credit score, I would not have trouble obtaining financing for my new business.

Background: When my son was 6 years old, my spouse said, "I wish there were a way we could get him to exercise in order to watch TV." Our product, 123GoTV, is a bike trainer stand that allows the child's own bike to be pedaled in a stationary position. Hook it up to the TV, and if the pedals aren't moving, the video feed won't come through.

What I did: I really thought that as a successful business owner with a 25-year track record, having business credit that I have successfully used, having a very high FICO — I just assumed I wouldn't have the same problems that other start-up businesses have. But I was mistaken. The banks that finance the Small Business Administration loans said that doesn't matter. What matters is: Do you have experience in this business that you're starting, and is it at least five years' experience?

What I learned: I had to go the other route, which was tapping mainly relatives. People who want to start a business should know that they're going to end up having to use their own money, their already existing credit, the equity in their house, or borrow from well-meaning friends and relatives. And they may have to issue shares to give a part of the business to these people who are willing to lend them the money.

Have you made a mistake from which other small-business owners can learn? Please tell us about it at

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