Do you have dreams of taking your business to the big leagues? Entrepreneur Vonda McPherson proves it’s possible if you plan your finances carefully and put in a little elbow grease. In fact, her dedication resulted in a plum contract as a vendor for the 2014 Super Bowl.
For years, McPherson has kept a watchful eye on her budget and finances. Her frugal habits and pay-in-cash philosophy changed little when she made the transition from corporate professional to business owner and opened Vonda K’s Catering & Events in March 2012, parent company of her restaurant Vonda’s Kitchen.
McPherson’s prudent financial habits enabled her to pursue entrepreneurship. She says she had about $60,000 in savings prior to starting her business, and now has about $75,000 socked away for emergency expenses. She says getting laid off was the catalyst for opening the Newark, New Jersey-based restaurant. McPherson sacrificed to stay within her budget by giving up her apartment and moving in with her elderly parents for nearly one year.
The business owner and chef says she has never been a spendthrift. Her successful foray into the restaurant business made her already firmly established budgeting habits even more replete. “I was never a wasteful spender,” she says. “I learned that from my family and I always saved the majority of my paycheck for years.”
In order to save money, McPherson says she does not go out socially. She also does her own hair and saves money on food by eating most of her meals at her restaurant. In addition, she still drives her 2006 Mazda mini-van.
McPherson paid off nearly all her personal debt (about $7,500 in credit card debt; insurance premiums and other small miscellaneous debt) prior to starting the business. “It took about 6 months to pay off most of it,” she says. Startup costs for the company were about $125,000, the bulk of which came from personal savings and a generous six-month severance package from her former employer.
The former medical supply saleswoman expanded her epicurean empire when she opened Duke’s Southern Table last October. This is the first African American-owned jazz supper club in the Brick City in nearly 40 years. The restaurant pays homage to legendary band leader and musician Duke Ellington.
McPherson’s hard work has paid off. Last year, she secured one of her biggest contracts to date—a two-day, five-figure contract to provide catering and tailgating services for the 2014 Super Bowl. She was one of only a handful of African American vendors in the metro New York/ New Jersey area to land a contract with NFL/MetLife stadium–host site of the mega sporting event. During the summer of 2013, the Essex County (Newark) Office of Small Business Development alerted McPherson and other minority and women-owned business enterprises about possible catering opportunities with the NFL. McPherson will also be providing services for Super Bowl 50 in 2016.
“I used some of the profits from the contract with the NFL to open the new restaurant,” she says. “By putting money back into the business or starting a new business, an owner will have cash flow,” she says. Revenues for Vonda K’s Catering Events Inc. (which includes Vonda’s Kitchen, in addition to her newest restaurant, Duke’s Table) topped $1.1 million in 2014, about the same as 2013 figures.
A frequent mistake many entrepreneurs make is commingling personal and business expenses–it’s an error McPherson says she was determined not to make. She keeps business and personal expenses separate and meets with her financial planner quarterly to discuss finances and cash flow–both personal and for the business.
“Budgeting, careful money management and enjoying what I’m doing has gotten me this far,” she says. “I’m not limiting myself or what I can do for my community.”
Stay tuned for part two of this story, where McPherson talks about how she stays on top of her financial game.