Finding Capital Can Be Just as Hard as Managing it

July 4, 2017

10:30 am

Claudia Raessler considers herself to have stumbled into running her own business. Yet she and her husband Ken haven’t appeared to suffer from the accidental case of entrepreneurialism and ample capital.

The husband-and-wife team—Claudia is managing director, while Ken is president—own and operate Maine Dye & Textiles (formerly known as Saco River Dyehouse). The business, which got its start dyeing yarn for the hand-knitting market, last year had gross sales just shy of $1 million, but it’s just launched a plan Claudia believes will triple revenue in two years.

Central to that plan is an expansion into the world of high-tech textiles. Claudia and Ken recently invested a couple hundred thousand dollars in new machinery imported from Europe that will allow it to begin offering dyeing services for technical textiles, such as athletic wear and high-end climbing rope like the kind manufactured not far away at Sterling Rope.

Claudia Raessler, cofounder of Maine Dye & Textiles

The new machinery and anticipated growth means Maine Dye & Textiles recently needed to re-locate from the historic Pepperell Mill complex in Biddeford, which Raessler admits was “romantic,” to a larger space in the Saco Industrial Park.

In her interview with Maine Startups Insider, Claudia speaks candidly about the challenges of entrepreneurship, living with bad decisions, and her advice for future entrepreneurs. This interview has been edited for clarity and length.

How did you get started?

We started a farm in 2001, and that we turned into an entrepreneurial experience because rather than having the animals walk around and just look at the pasture and thinking of it as a hobby, we ramped that up to be a commercially driven farm, selling and breeding livestock as well as creating an end product from that livestock. And from there we went to the dyehouse.

So we bought the raw fiber—in agriculture they call it an aggregator model—and coordinated the supply chain that would turn it into primarily hand-knitting yarn to sell through stores or on other farms.

Read about more strategies to find capital at TechCo

Talk about investing in your company.

So, the story was while doing the farm yarn, JCA, which did a lot of things; it built kits, and sold yarn, pattern development, it did all kinds of different things, but a small piece of what they did was provide commissioned dye services to people like us that we doing a farm-based yarn. And so in a very casual way in 2012 there were some of us out having a glass of wine and someone said the dyehouse at JCA is going to close because the owner passed away and there just wasn’t enough horsepower in the business—it had been a $10 million business at one time. When it closed there would be no place for small producers of hand-knitting yarns to go to get dye services. So three of us said, “well, let’s buy the dye equipment and move it to Maine.” So, we did.

Buying the dyeing equipment was the least expensive part of it because it was old equipment; still usable and we’ve actually taken that core equipment and taken it from zero sales in 2012 to gross sales last year on that side of our business we were just under a million. And again it’s not from brilliant marketing strategy; it’s just there’s a real need in the market for that. It takes you from being the hand dyer in the kitchen to the ability to access a dyehouse that can start you into a commercial market.

What have been the biggest challenges you’ve faced in starting and growing your company—both personally and professionally?

My guess is most entrepreneurs would say cash and finding money is the biggest challenge, and certainly finding money and managing it, especially given how quickly we’re scaling and all the changes happening to us, is a challenge, but I think our biggest challenge has been understanding how to manage it—not just the money, but to manage the growth and the operations and learning to have confidence in decisions that impact other people. Five years ago we had zero employees and we had day jobs. Now we have anywhere from 14 to 18 employees, so I think having the wisdom and expertise to manage that kind of scenario has been our biggest challenge.

Have you taken advantage of any resources or mentors in Maine’s startup community to help you meet that challenge?

MTI I would say with its wrap-around entrepreneurial programs, has been our biggest support in meeting those challenges. They make people who have been there and done that and have experience in various areas, be it sales or operations, available to the clients in their portfolio and it’s at little or no cost to use usually. It’s sort of like having a built-in mentor or board of directors when you’re not quite big enough to have a board of directors.

Other organizations have been helpful to us. But it’s because we knew how to leverage the resources, so things like Workforce Solutions, and the Workforce Through Goodwill and the Workforce Development Boards from an economic perspective to get access to highly trained expertise from a pool of people who may have been laid off.

Another big challenge is time. You just don’t have a lot of time.

Any lessons learned?

I think we’ve learned to prioritize decisions based on what the consequences of those decisions are. So whether it’s hiring the employee you turn stuff over to, and then later find out they weren’t doing a very good job, or wondering do I spend the $100 that I have in the bank this week on coffee for the employees or paying a bill? So I think we’ve made lots of bad decisions. I don’t know any entrepreneur or anybody in life that doesn’t. But we’ve learned to prioritize a lot better. Add I don’t know where you learn that unless you just live through a startup.

Are you profitable?

We just became cash positive. We’re about $1.3 million into it. We’re just now looking at bringing on one or two small outside investors, because we’re going to need working capital to scale into the next phase.

Do you have any advice for people thinking of starting their own business?

Take it a day at a time. I would say… I don’t want to say ‘never give up’ because that’s not really right, but you have to have a tremendous amount of grit or determination. A day at a time, grit and determination, and then flexibility. Learn to be flexible if you’re not. It’s easy for the entrepreneurs and founders to climb on the horse and assume their way is the right way, but you can’t do that. You have to be an active listener and then learn to flex. I would say maintain a sense of humor, but I haven’t done very well with that. I don’t have much sense of humor anymore. I have huge admiration for people who take this path and maintain their sense of humor.

Read more about the Maine startup ecosystem on TechCo

Editor’s Note: Founder Forum, a weekly interview with a startup founder in Maine, is sponsored by the Maine Technology Institute. Read more about MSI’s sponsored-content strategy here.

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Whit Richardson is a former daily newspaper journalist in Portland, Maine, who has covered business and entrepreneurship for the past decade. He's founder of Maine Startups Insider and currently editor-in-chief of 4Front Publishing, an online news startup covering the nascent legal cannabis industry.

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