Comedian financed business on credit cards
Dallas Business Journal - by Jennifer Rampey Staff Writer
DOWNTOWN -- Phil Larsson can laugh now about the effects of using credit cards to start a business.
"Here I am, debt free, I make a nice living, I work more and earn more; there's a million things in the works," said Larsson, referring to the growing popularity of his Ad-Libs Improvisational Comedy troupe, based at a club in Dallas' art district. "From expanding to different nights to expanding our touring and a possible sitcom, it seems something new happens every week, but with that I can't even get a cell phone."
Businesspeople like to joke about using credit cards to start businesses. Impassioned by some new business idea, they imagine themselves leaving the corporate world to pursue personal freedom.
Well, credit cards are definitely a way to get money quickly if traditional methods don't work, but after his experience, Larsson doesn't recommend it.
This is a story of determination, and it has a good dose of comic relief.
Larsson pumped a dozen credit cards to help establish a home for Ad-Libs, and at one time delivered pizza between performances for cash. He lived in his self-renovated club Downtown to keep expenses low for a time, too.
The punch line is Ad-Libs now regularly sells out four shows each weekend, and the troupe regularly travels across the country to perform and teach others about improvisation. This genre of comedy is different from stand-up. There's no script or rehearsals, and it's driven by audience participation.
Ad-Libs' tale began in 1986. Larsson, a Milwaukee, Minn., native put everything he owned in his 1978 Peugeot and moved to Dallas to start his comedy crew, which now has 12 members.
Ad-Libs started with gigs in local restaurants. This approach worked because the company wasn't paying rent for stage space, but the venues weren't drawing crowds.
"We weren't going to save anyone's hide," Larsson said. "The great restaurants with crowds would have been great, but why do they need us? A lot of times we'd do shows and have more people on the stage than in the audience."
It can be unpredictable, too. In three cases, Larsson has taken restaurants to court because he didn't get paid for performances. Using his improvisational skills, he's won each time without a lawyer.
After nine temporary locations, Larsson knew it was time to act on his desire to find the company a home.
Armed with a business plan, he went to lenders, but found them wary because Larsson's comedy shows had no script.
"They just were very narrow-minded about it," he said. "They couldn't understand we were going to do a show and make it up. They said, `I can't give you money for something like that.' "
Larsson, 31, had an excellent credit rating, but lacked established credit.
He took a class to learn about U.S. Small Business Administration loans, but was discouraged by the potential for lots of paperwork and red tape.
"My parents didn't have the money to lend me," Larsson said. "My friends offered to do it. But I didn't want to go into debt with anyone but myself."
And he did. He charged between $15,000 and $20,000 to fix up a warehouse in Dallas. Larsson used a Sears card, for example, for paint and a Home Depot card for wood.
"I knew I was going to destroy my credit. Ultimately, I was late on many, many cards. I decided which cards I needed and couldn't be late on. So I maintained those real well and abused the others."
Over about a month, he and other members of Ad-Libs -- who agreed not to be paid so every penny could go back into the club -- worked constantly on their rented warehouse.
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