Entrepreneur Finds Best Funding Solution for Growing Business

By: Michael Koslow

"While I was savvy in my area of expertise...I was not well-versed in the business of running a business. I was self-funded, had a business plan...but did not have a credit history. Fortunately, I met Sun Capital." - Greg Bihn, President, TechnoMedia International, Inc.

To Have and Yet Not Have

When petroleum engineer Greg Bihn launched TechnoMedia International, Inc., his specialized e-learning training company in 1990, he had a working knowledge of the oil and natural gas industry, a unique product and service and an international market with a demand for his innovative multimedia training programs, a vision for growth with a solid business plan, and enough of his own savings to launch the company. What he didn't have, as he later learned, was an adequate cash flow to keep the company running through the volatile ups and downs of the oil and gas industry.

A Pivotal Time For His Company - Had To Remain Ahead of "Copy Cat" Competition

By year five, he knew his company had reached a pivotal time. TechnoMedia needed a financial solution that would not only take Greg's vision to the next level, but infuse the company with substantial working capital he needed to accelerate global growth. If he wanted to stay ahead of any potential well-funded "copy cat" competition that could surface and move faster than him to capitalize on his idea, he needed an innovative financial strategy to meet his cash flow requirements.

While he had a line of credit, it wasn't enough and venture capital was viewed by Greg as a high risk proposition. Although he had many offers from investors due to the uniqueness of his products and services, and his successful track record and relationships, he did not want to give up control of his vision or be beholding to investors' agendas with potential unrealistic ROI timeframes. Greg knew the value of the service he had conceived. It was to remain "his baby," and he now needed to find the right financial nourishment.

A Harvard MBA Recommends Accounts Receivable Funding

A buddy of his, a Harvard MBA graduate, suggested he consider incorporating accounts receivable funding (factoring) into his financial business strategy, just as many Fortune 500 companies do. While TechnoMedia was not in the Fortune 500 league, like them, it had a vision for growth, cash flow funding needs, and invoices from reputable, creditworthy clients. As Greg's friend pointed out, because accounts receivable funding was debt-free, his business balance sheet was not affected. The Harvard MBA counseled him that if he found the right funding source willing to truly get to know him and his vision, understand his particular business, fast track their solutions, and be flexible in their terms, then he and TechnoMedia would be well positioned and in good financial health to support their strategic growth plans.

"That was the best business advice I have ever gotten, next to the introduction that was made for me to meet with Sun Capital, Inc." said Greg. "While I was savvy in my area of expertise and knowledgeable of the petroleum industry and its related engineering training needs, I was not well versed in the business of running a business. I was self-funded, had a business plan developed with the counsel of Ernst and Young (in Jakarta, Indonesia where Greg got his start), but I did not have a credit history."

As his business grew, Greg realized the company survived from invoice payment to invoice payment. Due to this inconsistency of cash flow, he became hesitant about hiring additional staff, purchasing and updating his technical equipment, and launching the industry-focused marketing program he needed to move from a "mom and pop" type business to the global leader he knew the company could become.

Success Cannot Be Based Solely On An Idea - It Needs Sound Strategic Financial Planning

Today, TechnoMedia, the pioneer of e-learning for the oil and natural gas industry that began with serving Chevron, Shell, TransOcean and Halliburton, now serves as the American Petroleum Institute (API)'s outsourced management provider of computer-based e-learning solutions for its global client-base.

"Our company could not have gotten where we are today with just an idea," added Bihn. "It required sound financial planning, and accounts receivable funding became one of the important weapons in our financial arsenal. We established a relationship with Sun Capital because their business receivable funding program was flexible and could be customized to meet my needs. They have been consistent in service and response and my funding is received within 24-48 hours."

These programs are a part of an educational initiative that API calls "API University" (www.api-u.org).

"When we launched in 1990, multimedia was in its infancy," Bihn recalled. "There was no Internet, so communications and marketing were limited to phone ( a non-visual way to introduce a visual product), one-on-one meetings and presentations (that required funds for extensive global travel) and direct mail," added Bihn. "And making it more difficult, you had to explain "multimedia" to potential clients, before even securing an appointment."

With Sun Capital's Flexible Funding Programs, I Am In Control

"Sun Capital immediately understood what we were doing, recognized our invoices were with reputable companies with solid credit histories of their own (making my lack of credit history a non-issue)," he relayed. "Their terms met my needs; I controlled what invoices I wanted to submit, when and how much."

Bihn noted that during lean times, he would submit invoices, and during "feast" times, he would not. There was no pressure from Sun to consistently utilize its service. In fact, there was a three-year period in which he did not engage in accounts receivable funding for his business at all.

"Sun stayed in touch with me throughout the 'no activity' period, and when I reached our next level of growth, they were there for me again," noted Bihn.

As he prepares proposals for potential clients in Japan and Saudi Arabia knowing that Sun Capital's fast track funding solutions can support him on these international ventures, Bihn smiles. He is in total control. ( For more information on TechnoMedia International, Inc., visit www.techno-media.com)

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