Chris Hurn – Co-founder and CEO of Mercantile Capital Corporation

[quote style=”boxed”]I’m a big believer in just making it happen. Often times I have an idea in the shower or in the sauna or on a walk. My staff will get a crazy email from me at 10:30 at night saying “I think we should discuss this…” or “how come we’re not doing this?” I’ll come in the next day, we’ll have a meeting, devise a quick action plan, and then get going on it.[/quote]

Chris Hurn is the Cofounder and CEO of Mercantile Capital Corporation, a nationwide commercial lending firm that specializes in commercial real estate financing for business owners who want to own their commercial property. Mercantile is a three-time Inc. 500|5000 honoree, a three-time SBA Financial Services Champion, and has closed 483 commercial loans worth more than $1.2 billion in total project costs, helping create or retain 8,443 jobs in 37 states, Puerto Rico, and the District of Columbia (as of 5/31/13).

Chris has become well-known for his advocacy on behalf of small business owners. As a small business owner who provides financing for small business owners, he has a unique perspective on the commercial lending industry as well as a deep understanding of what it means to be a small business owner in America today. His passion for this work has propelled his company to great success.

Throughout his career, Chris has served in various leadership positions, including his background as a business consultant and financier with GE Capital and as CFO for the NAI Realvest group of companies. He graduated from Loyola University Chicago with two magna cum laude bachelor degrees; earned a master’s degree from the University of Pennsylvania’s Fels Center (formerly at the Wharton School of Business); and left Georgetown University Law Center after his first year, deciding not to pursue a legal career.

Chris’ first book — The Entrepreneur’s Secret to Creating Wealth: How the Smartest Business Owners Build Their Fortunes (released 10/1/12) — is an Amazon Bestseller, reaching the Top 3 in three different sales categories. He has also been featured in 12 other business books to date, and is a frequent speaker and writer for events and publications both regional and national, and has appeared in such publications as the Wall Street Journal, Inc. magazine, Newsweek, USA Today, Bloomberg BusinessWeek, Los Angeles Times, Forbes, New York Times, Sacramento Bee, Orlando Sentinel, Scotsman Guide, Orlando Business Journal, SmartMoney, Origination News, FranchiseWorld, and Franchise Times. FOX Business News has asked him to comment on small business growth, SBA lending and other topics on seven separate occasions. He has also appeared on PBS’s Nightly Business Report.

Chris is also the Chairman, Cofounder and CEO of Kennedy’s All-American Barber Club. Kennedy’s is an upscale, franchised barbershop concept that offers the finest haircuts for men, the lost art of straight-razor shaves, and a modern selection of grooming products all within an award-winning, membership-based, nostalgic club atmosphere. He is currently franchising Kennedy’s nationwide with 13 clubs open in Connecticut, Florida, Maryland, and New Jersey. He also owns one of the Kennedy’s Club as a franchisee of his concept.

What are you working on right now?

I’m promoting my first book The Entrepreneur’s Secret To Creating Wealth, released in October 2012, and I’m already working on my second book. I continue to run the two businesses that I cofounded, Mercantile Capital Corporation and Kennedy’s All-American Barber Club, and I also own and operate the Kennedy’s franchise location nearest my home just outside of Orlando, Florida.

Where did the ideas for Mercantile Capital Corporation and Kennedy’s All-American Barber Club come from?

The idea for Mercantile came from having financed commercial property and other small business financing needs when I worked at GE Capital many years ago. Even after I got away from lending for a short period of time and became a management consultant I wanted to get back to small business lending. But I wanted to make sure that it was on my terms and I could decide what loans I wanted to approve without the credit box constraints of a big company like GE. My research also showed that the particular loan product that we would specialize in was not as well-known as I thought it should be; aside from the West Coast, it was hardly utilized.

The idea for Kennedy’s came from having financed about six dozen different franchises at Mercantile over the years. I liked the franchise business model and wanted to become a franchisor myself to deploy all the business strategies I had learned from my personal business experiences and those of the business owners I’ve worked with.

How do you make money?

In Mercantile we make our money in three areas:

1) interest expenses, which are the interest rate spreads on our borrowing costs versus what we charge our borrowers;

2) loan origination fees, which are pretty common in commercial lending, and

3) in certain situations we’re able to sell off loans in our portfolio to others who ultimately securitize them. They pay us for being their eyes and ears in a given marketplace.

At Kennedy’s we’re predominantly a membership-based upscale men’s barber shop franchise. We currently have 13 Clubs in four states, and for most of them about 70¬¬–80% of the customers are members. We have four different membership levels and for a monthly fee they get unlimited grooming services. About 20–30% of our revenues come from a la carte services for walk-ins, regular non-member customers, and product sales. We stock the best grooming and hair-care products for men, and we also have our own line of Kennedy’s products as well.

What does your typical day look like?

In the morning, I drive my kids to school about a half hour away from our house and talk with them about things they’re probably not learning in school. Then I turn around and drive anywhere from 40 minutes to an hour and a half (depending on traffic) to our offices in downtown Orlando. I use that time to make/return phone calls, listen to the news, and listen to audio books. When I get to my office, a typical day is usually pretty scheduled. I generally have anywhere from 6 to 10 meetings throughout the day, and many of those are phone appointments with people looking to use our services or looking to partner with us in various referral relationships. Lately I’ve also been doing a number of radio and Skype interviews to promote my book. I usually have our social media platforms displayed on one monitor and my email up on another. I also work on writing articles for publications and editing content my staff has created. There also loan committee meetings and other intern al appointments, and I even deal with scheduling and customer service matters for Kennedy’s. Basically, I have a lot of balls in the air on any given day, and I do a good deal of juggling to keep everything moving. I think my typical day might wear out most people. I don’t schedule many lunch appointments; I would rather order something in and work through lunch at my desk. That makes it possible for me to leave my office by 5:30 or so to spend some quality family time. After my kids are in bed (between 8:30 and 9pm), I’ll spend some time catching up with my wife until she goes to bed, and then I’ll usually stay up a little later watching soccer news. And then I go to bed and look forward to another day.

How do you bring ideas to life?

I’m a big believer in just making it happen. Often times I have an idea in the shower or in the sauna or on a walk. My staff will get a crazy email from me at 10:30 at night saying “I think we should discuss this…” or “how come we’re not doing this?” I’ll come in the next day, we’ll have a meeting, devise a quick action plan, and then get going on it.

What’s one trend that really excites you?

I’ll give you two trends that really excite me as they relate to each of my two businesses. With Mercantile, it’s the breaking down of boundaries in the commercial lending arena. It used to be that you would only lend to borrowers that lived in your backyard. That’s not the case anymore and we’re a perfect example of that. We’re headquartered in Orlando and we’ve closed loans in 38 states, Puerto Rico, and the District of Columbia. Soon after we started the business, it became clear that our services were in demand nationwide. Small business owners are seeking out specialists for their needs these days — a whole other trend in itself — and they don’t care where the specialist is based so long as they can provide the right solution for their unique situation.

The other trend that excites me, which is applicable to Kennedy’s, is that we’re becoming more and more of a subscription-based society. We’re very accepting of memberships and subscriptions and I think that’s very beneficial for us at Kennedy’s as it relates to providing grooming services. Our membership model isn’t much different than going to a health club.

What was the worst job you ever had and what did you learn from it?

My first “job” was when I had to pick up dog poop as a child. It wasn’t pleasant but I learned that it had to be done. Many times we find ourselves having to do things we don’t enjoy, but it’s best to just do them and move on.

If you were to start again, what would you do differently?

In the case of Mercantile, I would probably go national faster. I would also not be as concerned about profitability from day one — I think it would be okay to spend the first couple years running a loss so that we could grow bigger quicker and really make a huge impact on the national scene. We still grew quickly, but that would have allowed us to grow a little more organically.
If I were to start Kennedy’s again, I would raise a lot more capital. We were undercapitalized and it hampered us a bit in the early days, especially during the Great Recession.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

I repeat myself over and over again, that’s for sure. I tell others all the time that when they’re leading or managing others, they have to frequently repeat themselves. It’s like parenting. I would also tell them to market their business. I don’t think a lot of entrepreneur’s market their business enough and I recommend to that everybody. You’ve got to get your message out there and it’s got to get through the clutter.

What is one failure you had as an entrepreneur, and how did you overcome it?

When we started Mercantile we wanted to become a national bank one day. We went through that process and it cost a lot of money to become a de novo bank. We got our Office of the Comptroller of the Currency (OCC) approval in August of 2008, and it turned out that our timing was atrocious as the financial world collapsed about a month later. Word got around that there was an unofficial moratorium on new bank charters, so we withdrew our FDIC application in February of 2009.

I consider it somewhat of a failure on our part because perhaps we should’ve stopped the process earlier. But I also consider it a failure on the part of the federal government, in that they were a bit disingenuous about bank charters even though the marketplace was in dire need of fresh banking capital at the time. I think the regulators were more concerned about finding homes for failed banks as opposed to allowing new banks to start.

We overcame it by becoming more open to the possibility of an acquisition by or merger with another bank. Ultimately, we merged with one of our biggest vendors, a community commercial bank based in Orlando, in October of 2010. Through that process, we achieved our goal of becoming (being part of) a national bank.

What is one business idea that you’re willing to give away to our readers?

One of my ideas is a smartphone app to bridge the chasm between western medicine (prescriptions and over-the-counter drugs) and herbal and vitamin mineral supplements. The supplement business is huge — there are millions, if not billions, of people that use supplements these days — and there are a lot of instances of contraindications in certain supplements with certain prescription or over-the-counter drugs, rendering them ineffective. I don’t think anybody in the Western medicine world is going to jump in with both feet to welcome in people from the supplement world and so I think you could take some of the information that’s out there, distill it down, and upload the thousand most common drugs out there that people might take and the tens of thousands of common supplements they take, and give people some sort of a rating code. For example, red means you shouldn’t take those together and you should call your doctor immediately; yellow would stand for caution and a dvise to call your doctor or proceed very carefully; and green would mean there are no known complications at all —you can go ahead and take your prescription drug and your supplement and there should be no contraindication.

I think there’s a way to do that on an app with a very easy interface. An additional feature, where you can enter your dosage and frequency and ability to email them, would also help patients that visit their physician who asks them what drugs and supplements they are on. That information would be instantly available. You could even add an alarm clock feature to your app to remind you to take certain things at certain times of the day, which would be helpful especially for the elderly.

If you could change one thing in the world, what would it be and how would you go about it?

I think that in many sectors of society in America and in the rest of the world, there’s a vilification of the profit motive — the pursuit of profits — which I think is heinous and causes a lot of problems. So I would un-vilify the profit motive in the world. A part of the solution is to educate people to understand that just because you seek a profit does not mean you’re one up and someone else is one down. Really, seeking a profit merely means that a business is operating successfully. When you’re taking in more than you’re spending, when you’re income exceeds your expenses, that’s a positive thing and that produces positive things long-term. It allows you to reinvest those profits into research and development, to create new breakthroughs, and make room for innovation.

I could have answered that I would get rid of terrorism, but I think part of the way to get rid of terrorism is to increase prosperity around the world through entrepreneurship. Entrepreneurship is the best way to increase prosperity and you can’t have either of those without profits.

Tell us something about you that very few people know?

This is a tough one because I’m an open book, especially on social media and especially when it comes to sports. A lot of people know that I’m a big soccer fan, which club I root for, that I’m a closeted Cubs fan and a closeted Dallas Cowboy fan. Something that very few people know is that I wore a tie to my preschool graduation and my preschool teacher told my mother that I was the most confident child she’d ever been around. What’s also interesting is that I haven’t worn a tie more than a dozen times since.

What are your three favorite online tools or resources and what do you love about them?

I’m going to extend this answer to smartphone apps. I love Uber which is very convenient when I’m traveling — I think it’s more handy than taxis. I use Open Table a lot because I like how that app locks me into dinner reservations very easily. I also like using Pandora, especially when I’m driving. To ease stress, I’ll often search for a comedian and listen to various comedy sets.

What is the one book that you recommend our community should read and why?

Besides the book I wrote, I would recommend The Underdog Advantage by David Morey. For startups or young companies that are facing various David-versus-Goliath-type situations, The Underdog Advantage gives them some good strategies and tactics for competing against other businesses that may be better capitalized, have more people, and are more established in the industry.

Three people we should follow on Twitter and why?

Master Yoda — for obvious inspirational reasons.
Hugh MacLeod — cartoonist, consultant, author of Ignore Everybody
Robert Greene — author of The 48 Laws of Power and more

When was the last time you laughed out loud? What caused it?

I laughed out loud this morning when I was driving my kids to school. We usually spend time talking, but I turned on the radio to see what they were talking about on NPR. It wasn’t quite the top of the hour, and we caught some sort of professor mid-sentence. He had a thick accent and, according to my kids, was using “really big words.” After listening to him for about 15 seconds, my kids started laughing at how silly it sounded and how little they understood, and I couldn’t help but join them.

Who is your hero?

My hero is the everyday entrepreneur who takes the risks to stick his neck out, which most people in any society are reluctant to do.

As someone who has three degrees, two Bachelor’s and a Master’s and even spent a year in law school, if you had to do it all over again, do you think higher education is currently worth the cost? Do you think that you get value out of what higher education costs these days, or if someone had the entrepreneurial gene, do you think they’re better off just starting a company?

I think at the moment I’m leaning more in the direction that they should just start the company and not waste the time and certainly the money of going to college and graduate school. I don’t think I would have said that 10 years ago. I definitely wouldn’t have said that 20 years ago.

Who is the greatest football team on the planet?

That of course would be Chelsea Football Club.


Chris Hurn on LinkedIn:
Chris Hurn on Twitter: @thechrishurn
Mercantile Capital Corporation on Twitter: @504experts
Kennedy’s All-American Barber Club on Twitter: @Kennedys