The $94,000 SBA Loan That Didn’t Go as Planned – William Holsten

Introduction

What happens when a side hustle becomes a financial sinkhole instead of a dream exit? In this episode of Think Business with Tyler, I sit down with William Holsten, a retired innovation executive turned entrepreneur and SCORE mentor. Bill opens up about his journey building a carnival game company, fueled by a $94,000 SBA loan—and the hard lessons that came with it. From broken products to mounting debt, he shares how early missteps, poor testing, and over-optimism nearly sank the business. But his story doesn’t end there. Tune in to learn how he eventually sold the patents, what he teaches other business owners now, and why every entrepreneur should embrace a “kick the snot out of it” mindset before scaling. This one’s packed with practical takeaways on risk, resilience, and realistic decision-making.

About William Holsten

William Holsten is a retired corporate innovation executive who spent nearly four decades with a global multinational company. During his tenure, he led creative workshops for brand teams around the world, driving new product development and strategy. Alongside his corporate role, William and his wife built a side business creating carnival games, eventually patenting and selling their most successful products. Today, he mentors small business owners through SCORE, using his real-world entrepreneurial experiences to help others avoid costly mistakes and build sustainable ventures. He’s also the author of “Uh-Oh: Avoiding Dumb Mistakes in Business.”

Episode Highlights with Timestamps

[05:34] – From Corporate to Carnival Games: William shares how he moved from brand management to launching a game company. Contractors who face this every week can see how what a fractional CFO does inside a contracting business handles it.

[07:08] – Helping Small Businesses Through SCORE: Why Bill mentors entrepreneurs and what most of them struggle with.

[09:05] – The Mistake That Broke the Business: How a successful product launch turned into a quality control disaster.

[13:49] – The Uh-Oh Moment: What happened when 60 wooden units failed in the field.

[15:32] – How to Test Before You Scale: Lessons learned from product durability failures and costly redesigns.

[21:18] – Five Responses to Business Failure: Bill explains his decision-making framework when things go wrong.

[26:00] – 10 Tools to Avoid Dumb Mistakes: An overview of his framework for smarter business thinking.

[34:14] – The Value of Mentors and Coaches: How honest feedback and outside perspectives can prevent disaster.

[42:04] – Health Crisis and Business Exit: Bill’s open-heart surgery became a catalyst to sell the company and exit debt.

[47:02] – One Life Maxim: Why you should always look for the other right answer.

Key Takeaways

Test Before You Scale

One of Bill’s biggest regrets was scaling too soon. If they had stress-tested the product even 20 times before production, many costly issues could’ve been avoided.

Failure Has Options

Bill outlines five ways to respond to failure—fix, accept, pivot, quit, or ignore. Ignoring is never the right choice. Quitting sometimes is.

Mentors Are Essential

Entrepreneurs often overlook the value of mentorship. Bill credits much of his current impact to being able to guide others through SCORE using hard-earned lessons.

Beware of Optimism Bias

Many entrepreneurs ignore red flags due to emotional attachment or optimism. Bill emphasizes the need for objective checkpoints to avoid going too far down the wrong path.

CFO Insights from the Episode

💰 Avoid Early Overhead with MVP Testing

Instead of mass production, Bill could have saved significant cash by building 2–3 prototypes and field testing them under real rental conditions. A fractional CFO could’ve modeled ROI scenarios and advised a phased approach to avoid burning capital upfront.

🔧 Build Financial Contingency into Product Development

Failures in pump design and material choices were made worse because there was no budget buffer. A fractional CFO could’ve helped identify these operational risks early and built in financial contingency planning.

📊 Evaluate Investment Against Break-Even Timelines

Bill’s SBA loan was spent quickly without a clear plan for how long it would take to break even. A CFO can model when and how product investments will return capital—helping avoid debt accumulation with no clear exit path.

Business Insights from the Episode

Don’t Ignore Product Durability

In rental-based businesses, durability isn’t optional. Even minor quality flaws will get exposed fast when products are used aggressively.

Validate Ideas with Real-World Use

Build it, break it, and test again. If your product can’t survive a few cycles of real-world use, it’s not ready for customers.

Know When to Quit

Sticking with a bad idea too long can sink your business. Sometimes quitting is the best financial decision—especially if paired with a structured decision framework.

Your Partners Matter

Many of the early product failures were caused by poor partner execution. Vet your suppliers and contractors like they’re core members of your team.

Design for Abuse, Not Just Use

Bill’s relaunch succeeded because the product was rebuilt to survive repeated abuse, not just one-time demos. It’s a mindset shift many new creators miss.

Fun Facts

1. Bill and his wife invented multiple carnival games including the wildly popular Pitch Burst.
2. He once considered starting a business making funny phone answering machine messages.
3. A Make-A-Wish fundraiser inspired the launch of his first product.

Actionable Items

1. Run a Pre-Mortem: Imagine your business failing in two years and list the reasons why—then work backward to prevent them today.
2. Use SCORE Mentors: Visit score.org to find a free small business mentor for planning and accountability.
3. Stress Test Your Product: Before scaling, make sure your offering can handle real-world abuse. It will save you a fortune in fixes and refunds.

Maxims to Live By

• Always look for the other right answer – Your first instinct might not be the best one.
• Don’t ignore warning signs – That one broken prototype could be the tip of a much bigger problem.
• Test hard, fail small – Discover flaws before the stakes are too high.
• Mentors prevent blind spots – You don’t need to figure it out alone.
• Passion needs structure – Emotion without a business plan is a recipe for debt.
• Quitting isn’t failure – Sometimes it’s strategy.
• Learn from others’ mistakes – It’s cheaper that way.
• Durability beats novelty – Cool ideas don’t matter if they fall apart.
• Revenue doesn’t mean success – Profitability and sustainability matter more.
• Don’t build without feedback – Input from users beats assumptions.
• Use experts and naive observers – Both bring unique insights.
• Plan to pivot – It’s not if, it’s when.
• Prototype like your wallet depends on it – Because it does.
• Entrepreneurial optimism needs checks – Don’t let passion blind you.
• Your health matters more than the hustle – Know when to step back.

Memorable Quotes

• “Test and learn before you scale up.” – William Holsten
• “Sometimes quitting is the better answer.” – William Holsten
• “Your partners are an extension of your product.” – William Holsten
• “We didn’t have a revenue problem, we had a durability problem.” – William Holsten
• “Always look for the other right answer.” – William Holsten

Tools, Books & Resources Mentioned

📚 Books Mentioned:

• Quit by Annie Duke – A deep dive into knowing when to walk away from bad bets.

🛠 Tools & Resources:

• Why the F Did I Do That? – A free self-assessment tool on William’s website to identify your mistake patterns.
• SCORE – Free mentorship for small business owners: score.org

Call to Action

💡 Connect with Tyler Martin

• LinkedIn: http://linkedin.com/in/thinktyler
• Website: Think Business with Tyler

🔍 Need Financial Clarity for Your Business?

As a fractional CFO specializing in service businesses, I help entrepreneurs like William Holsten transform their financial operations without the cost of a full-time executive. Whether you’re struggling with cash flow challenges, pricing strategies, or making strategic investment decisions, I provide hands-on financial guidance tailored to your specific industry needs. Learn more about my fractional CFO services at cfomadeeasy.com.

🎧 Subscribe & Review

Love the insights from this episode with William Holsten? Help other entrepreneurs discover these valuable lessons by subscribing to Think Business with Tyler on Apple Podcasts, Spotify, or your favorite podcast platform. Your honest review helps the show reach more business leaders looking for practical wisdom and inspiration.

Final Thoughts

William Holsten’s journey is a masterclass in learning the hard way. From missteps with materials to selling patents under pressure, his candor reveals what it really takes to survive the entrepreneurial rollercoaster. Whether you’re launching your first product or helping others through mentorship, his message is clear: plan better, test harder, and never be afraid to walk away. There’s always another right answer if you’re willing to look for it.

Connect with William Holsten:

• LinkedIn: William Holsten
• Company Website: williamholsten.com

Don’t miss our next episode where we’ll continue exploring the mindsets and strategies that help entrepreneurs overcome challenges and build thriving businesses. Subscribe now to ensure you never miss an episode of Think Business with Tyler.