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Updated: March 27th, 2020
Friends is known as one of the funniest shows to come out of the 90s, but it was not known for its accurate portrayal of finances. For example, how did six periodically unemployed, young adults afford such well-furnished apartments in Greenwich Village when they spent most of their waking hours on a couch in a coffee shop? There was at least one episode, however, that addressed one of the biggest financial frustrations of a small business owner — an accounts receivable gap.
Remember the one where Monica and Phoebe had their own catering company? The two go into business together after Phoebe fronts the money to cover the initial equipment purchases. But when one of Monica’s customers refuses to pay after her husband’s funeral reception, Phoebe worries she won’t get her investment back. The show breaks the tension with some comic relief around Phoebe’s headstrong approach to resolving the issue, but millions of small business owners face similar situations year-round.
The stress over their precarious financial situation eventually leads to the end of their catering company, but if Phoebe and Monica had some standard business financing knowledge and access to affordable capital, they might have become very successful entrepreneurs. With more cash on hand, Monica could have invoiced her customers and kept her business going while the rest of us went back to discussing whether or not Ross and Rachel were on a break.
The Boy Who Lived and his mentor with the half-moon spectacles received most of the attention in The Half Blood Prince, but the 3.7 million Muggles who own small retail shops in the US discovered some heroes of their own in the sixth installment of J.K. Rowling’s wizarding saga: Fred and George Weasley.
The twin pranksters join the ranks of famously successful entrepreneurs who never graduated from school. Fred and George dropped out of Hogwarts with a literal bang in the fifth book, moving to Diagon Alley and opening their own joke shop with a loan from Harry Potter, himself. Despite the seemingly slim profit margins on wizarding toys like extendable ears and skiving snackboxes, Weasleys’ Wizard Wheezes defied the recession that hit the rest of the wizarding retail world after Voldemort’s return.
Considering how seasonal Weasleys’ Wizard Wheezes’ sales must have been, a consistent source of affordable financing would have been essential to the business’ success. It’s unlikely that their massive sales in August — the only time their target audience seemed to really visit Diagon Alley — would have been enough to keep the lights on the rest of the year. And even if mail orders covered payroll and operating expenses during the school year, the shop would have needed a large amount of cash to purchase new inventory at the beginning of every summer.
J.K. Rowling never even hints at the possibility that two young entrepreneurs with limited credit history could somehow magically qualify for a bank loan from Gringotts, but the Weasleys were shrewd businessmen, and probably had a few tricks up their sleeves.
Every adult in the quaint fictional town of Stars Hollow seemed to own their own business: Luke’s Diner, Doose’s Market, Miss Patty’s Dance School, Mrs. Kim’s antique store, Weston’s Bakery — even Kirk was a successful entrepreneur, effortlessly spinning up new businesses whenever the plot required it. Yet somehow when Lorelai needed financing to open and run her own inn, the charming Connecticut suburb didn’t have any viable financial institutions to help.
Perhaps this shouldn’t be surprising — it’s not uncommon for first time business owners to experience trouble accessing credit. And as we think about it, the show’s whole plot is driven by Lorelai’s financial troubles and her reluctant dependence on her emotionally withholding parents.
Fortunately, Lorelai’s friend-turned-boyfriend-turned-investor, Luke, was willing to lend her money to get the Dragonfly off the ground. But where would the Gilmore girls have gone without such generous (and financially stable) friends and family? Maybe Lorelai and Sookie’s bootstrapped catering business would have been enough to keep them going after the Independence Inn went down in flames. Or maybe they would have found a responsible and transparent peer-to-peer lender where a varied group of investors support small businesses like the ones in Stars Hollow — helping them grow and thrive.
Sorry to pop your three-course-dinner-chewing-gum bubble, but Willy Wonka was not a savvy business executive. You’re living in a world of pure imagination if you believe Wonka gave all of his trade secrets and his entire candy factory to a ten-year-old boy, because his business was in the black.
But let’s assume for a moment that Charlie Bucket was, in fact, an entrepreneurial genius and that with the help of Grandpa Joe he was able to turn the company around and make it profitable again. What would have been his first step to becoming a successful entrepreneur?
Well, whenever he got himself out of that giant glass elevator, he would have had to immediately begin renovating the factory. Not only did the other golden ticket winners create thousands of dollars of damage that needed to be repaired, he also had to rapidly bring the factory up to code to meet a myriad of OSHA, ADA and USDA guidelines (we’re looking at you, giant open river of chocolate).
Wonka’s unpredictable behavior and continuous investment in R&D leads us to believe that his business didn’t have much of a savings account for Charlie to rely on, so if Charlie was a thoughtful and responsible business owner, he probably would have explored his external financing options and applied for a business term loan with low, monthly payments to fund repairs, renovations, and eventual expansions. See three other scenarios where a term loan is the best option for a profitable business.
Tom Haverford of Entertainment 720 fame may not have always been the go-to guy for sound financial advice, but the smooth talking mogul turned things around in season 5 with the successful entrepreneurial launch of Rent-A-Swag. Tom received financial assistance from his boss / friend, Ron Swanson, and he started renting clothes from his own closet to the classiest teenage boys in Pawnee.
But imagine what Rent-A-Swag would have become if Tom had a little extra capital to purchase new inventory (aka extra dope threads). He could have branched out into women’s clothing and beaten his rival across the street. Or maybe he would have used the loan to launch a co-marketing campaign with the Snakehole Lounge, bringing Snake Juice and DJ Roomba to the masses. Alas, we’ll never know Rent-A-Swag’s full potential, just as we’ll probably never get to “dress loud” with our favorite one of Tom Haverford’s concepts: Sparkle Suds.
Paige Smith is a Content Marketing Writer and Senior Contributing Writer at Funding Circle. She has a bachelor's degree in English Literature from Cal Poly San Luis Obispo, and specializes in writing about the intersection of business, finance, and tech. Paige has written for a number of B2B industry leaders, including fintech companies, small business lenders, and business credit resource sites.