When you’re starting a business, the comparison game is so real. All you see are the highlight reels of someone else’s success as you scroll through social media, and you feel like you need to be where they are—even if it took them 10 years and many risks to get there.
Can we share a little secret? Humble beginnings are sometimes the best kind, and honestly they’re where everyone starts. And when you start small, you might even find that you can finance your business without having to borrow anything in the beginning.
Don’t believe us? Maybe you’ll find Joel Jelinski, founder and CEO of wildly successful wine and whisky barrel furniture business Burgundy Oak, more convincing.
From small beginnings…
Little did Joel know at 13 years old that his hobby of woodworking—and his mom convincing him to make Christmas crafts for her friends from a wine barrel—would turn into something much bigger.
Fast forward eight years, and Joel was working a one week on, one week off co-op term in the oil sands while studying Civil Engineering at UBC. Like many university students, he was feeling financial strain and knew he needed another source of income.
“Instead of getting a second job, I invested $800 of my own money into the tools and equipment I need to go start Burgundy Oak.”
“On my weeks off, I started crafting products in my backyard and selling them at local farmers markets in Cochrane, Canmore and Banff on the weekends.”
Joel spent the last year of his degree balancing a full course load and his rapidly growing business, and when he graduated, he jumped into Burgundy Oak full-time. “In six short months, I had sold over $300,000 working out of my parent’s garage. It was then I knew that I was onto something.”
...to booming success
Now Burgundy Oak products are sold at over 300 independent retailers across Canada, and over 80 across the US. On top of huge successes, like partnering with big names like Home Hardware, HomeSense, The Bay, Wayfair and Houzz, Burgundy Oak struck gold when Joel made a multi-million dollar licensing deal with Jack Daniels.
Burgundy Oak has developed an exclusive product line from Jack Daniels barrels to be sold across Canada—the first deal of its kind made by the whiskey brand. This made them the first Canadian Jack Daniels Licensee ever and only their 42nd licensee globally. All that from a university student who decided to invest $800 into his business idea!
But how did Joel grow his business from that initial investment to making deals with major brands?
Financing: an evolution
“The first couple of years we were able to self-finance by investing every dime we made right back into the company,” Joel explained. “At this point, the owners didn’t take any salaries and we were operating out of my parents two car garage so there was very minimal overhead. We were able to do $275,000 in revenue in 2016 operating at this capacity.”
As they continued to grow, they needed to expand their operations to match. This is when traditional financing came into play.
“We moved into a new facility in early 2017 and quickly outgrew it 8 months later,” recounted Joel. “With the added overhead and additional salaries, we worked with ATB to get an operation line of credit and a Business MasterCard to help finance our day to day operations. As we continued to grow, we were able to extend the limit on the operating line to accommodate our longer payment terms with stores such as Home Hardware and Home Sense.”
They paired their line of credit and MasterCard with an Expansion loan from BDC. “This flexible form of debt financing makes sense for our rapidly expanding company as we only pay interest on the amount that we are using not on the entire balance of the loan.”
“I believe when first starting a company, it’s important to prove the business concept before taking on any debt. I was able to grow $800 of my own money to $275,000 without any financing. Taking this approach will really help with securing financing from the banks, as your business is no longer just an idea, and you’ll have substantial revenue to backup your business plan. This approach will substantially lower the risk for both yourself and your banking partner.”
Additional financing alternatives
“In 2018 alone, I’ve been able to secure over $200 000 in government funding through grants and working closely with my industry connections. It’s amazing to see that these programs believe in what we’re doing and are excited to support the team as we grow.”
Here are a few grants that Joel used, and you may be able to use yourself:
- IRAP Youth Green Program: This program gives Burgundy Oak funding to hire employees, and covers their salaries for a set amount of time.
- IRAP Project Program: This program allows Burgundy Oak to invest company resources into improving manufacturing processes.
- CanExport Program: This program helped Burgundy Oak with expansion into industry trade shows across the US.
- Alberta Economic Development & Trade: This program allows Burgundy Oak to expand their strategic partnerships by reimbursing them for travel costs.
- IRAP Consultant Program: Provided funding to bring an industry consultant to improve Burgundy Oak’s process efficiency.