How a pianist turned a crisis into a business with the help of a microloan

By Rob Baedeker, Special to SF Gate

Tuesday, September 2, 2008

A little more than two years ago, Vivienne Fleischer's Oakland-based business was at a critical juncture: full of prospects but short on cash. At the time, she never would have guessed that a "microloan" could provide the capital needed to propel her business forward because, like most people, she didn't know much about them.

But Fleischer's career has been full of the unexpected. Along the way, she's developed a knack for re-directing her talents and finding ways to turn crisis into opportunity. In fact, it was a career-altering injury, decades ago, that set her on a path toward creating the business she runs today.

In 1978, Fleischer enrolled at The Juilliard School, the prestigious performing arts conservatory in New York, where she studied with a professor who gave her a set of piano practice exercises that caused her pain in her hands and arms. "That's good," Fleischer remembered her teacher telling her. "'No pain, no gain,' he said. 'You're developing muscles.'"

In fact, with frequent six-, 10- and, at times, 13-hour practice days (on top of waiting tables, teaching piano, and typing at temp jobs on the side) Fleischer was inflicting serious damage to her hands and arms.

"About three years later," she said, "while I was studying at Oberlin Conservatory in Ohio, I went to hold a cup of coffee. And I couldn't do it."

She was eventually diagnosed with a cluster of repetitive stress injuries in her arms, shoulders and wrists. The medical treatment proposed to her, she said, was to "'take pain killers, cancel your concerts, and quit your job.'"

Fleischer explored a number of ways to deal with the pain and its causes, from cortisone to tai chi, she said, and eventually discovered a piano technique called the Taubman method, which emphasized natural, coordinated movements of the fingers, hands and arms.

"Two years into it I was retrained," she said. "I was finally the pianist I wanted to be. And I was now working with injured pianists."

She continued to temp part-time, and she was still experiencing "flare-ups" of pain from typing.

"Then there was a fateful day on a temp job," Fleischer recalled. "I looked down while I was typing … and I found my hands in this crazy, contorted position."

"I started to correlate what I was doing at the typewriter keyboard with what I'd been doing at the piano," she said. "And I started transporting the healthy piano movements I'd learned into touch typing. A month later, my typing was unrecognizable. My typing speed went up, and my arms felt great."

Fleischer continued teaching piano, and moved to San Francisco in 1989. She also started researching repetitive stress injuries, and continued to develop her own system of workplace ergonomics - she called it "kinetic keyboard training, a keyboard and mousing technique based on healthy principles of piano technique" - and approached companies to offer ergonomics consulting, eventually teaming up with a doctor in the South Bay and working with patients under his auspices for seven years.

In the late 1990s Fleischer decided to part ways with the doctor to develop the business on her own. She soon realized that while she had learned a lot about ergonomics, she knew less about running a business.

That's when she had a serendipitous cab ride. Fleischer and her daughter hailed a taxi in San Francisco and started talking with the driver, Andrew Blumenfeld. It turned out that Blumenfeld was between jobs as a businessman (with a background in restaurant management). A couple of months later, Fleischer noticed Blumenfeld in a café near her home in Oakland (it also turned out that the two lived only a couple of blocks apart) and they started chatting again

They struck up a friendship and an informal business relationship. "I'd often talk to Andrew about business ideas," Fleischer remembered, "And everything he suggested worked."

In 1998 Blumenfeld became the business manager of Fleischer's company, Performance Based Ergonomics (PBE).

The business had its ups and downs - the dot-com crash and 9/11 slowed its growth, but they stayed afloat however they could. They solicited investments and loans from friends and family. Fleischer continued teaching music. Blumenfeld waited tables during lean times and loaned the business money through his credit cards. At one point, Fleischer sold her grand piano to keep the business going.

Then, about two years ago, Fleischer said, "We started getting traction, and word of mouth started spreading." Performance Based Ergonomics was picking up contracts for ergonomics workshops with big companies such as Juniper Networks, Adobe and Johnson & Johnson.

"Now we had a new set of problems," Fleischer said. "How were we going to get the money to pay for the business operations? We had to hire people. There were times we couldn't [give ourselves] paychecks for two or three months. We needed to get financing to help with cash flow, and to do a little more advertising."

"Money was a huge issue," Fleischer said. "I started going to banks and they said, 'Your credit rating is just not good enough.'" Fleischer explained that she had gone through a bad divorce and, as a single mother with no child support, there were a "lot of years of struggle. My personal financial situation was pretty grim." Along the way, she said, her credit score had incurred some "dings and marks."

"Because of my personal credit history, when I went to traditional banks they would just sort of look down their noses and say, 'Ha. Thanks, but no thanks,'" Fleischer recalled. "It was not a pleasant experience."

That's when Fleischer discovered microlending.

At a small-business resource event at San Francisco City Hall in 2006, Fleischer met Emily Gasner, program manager at TMC Working Solutions, a non-profit organization that connects "microentrepreneurs" with resources and capital to start or grow businesses.

While TMC Working Solutions offers microloans (loans up to $25,000) for small-business owners, Gasner emphasized that the education and training resources are an equally important part of her organization's mission. "As opposed to just giving out the money, we want to stay involved and connect (entrepreneurs) to resources and education so that they can be successful," she said.

Gasner met with Fleischer and talked about PBE's business plans and needs. She guided her through the microloan-application process, and connected her with some free consulting resources.

Fleischer remembered that TMC's loan-application process "was kind of grueling. I had to create budgets and forecasts and give assumptions and go three years out."

Although the process was rigorous, Fleischer adds, "It was wonderful. I really had to get to know my business. We had to go in front of the committee and go cell by cell and justify everything that was in the budget and why it was there, and why we thought we were going to be able to make money and grow, and what we were going to be able to use this (loan) money for."

About 20 minutes after Fleischer presented her case to the Working Solutions loan committee, in June of 2007, she got a phone call from TMC Working Solutions. Fleischer remembered Gasner telling her, "We really believe in what you're doing … We think you have a solid plan, and we're going to give you the maximum loan at the minimum rate."

That loan amount was $25,000, at a 7 percent fixed rate.

"It was an absolute turning point," Fleischer said.

Blumenfeld, who is now the company's CEO, explained the immediate effect that the microloan had on the company: "We didn't have assets to borrow from except for our accounts receivable, so we were constantly dealing with trying to collect money. And we didn't have a lot of discretionary money to be spending on marketing. The loan really helped with that and continues to help with that. It gave us a cushion. We may need more money in the future to get to a different level, but we couldn't have done it without getting this money."

Fleischer explained that the process of preparing for the loan, and her quarterly meetings with Gasner about PBE's financials (another precondition of the loan), have drastically changed her view of her business and money. "I have a background as an artist," she said. "And artists tend to live a little bit with their feet off the ground. One of our skills is that we can be visionary; we see things others can't. But before, if you were to talk to me about budget, I'd say, 'Huh?' I could have the greatest idea in the world, but if it can't be profitable it doesn't matter, because it's not viable. Money just didn't matter to me, and now it's starting to really matter."

She added that the knowledge she's gained about business and finance has affected her approach to personal spending as well. She recently remarried, and said, "For years my husband was saying, 'Can we just have a budget?' And last year I think he fainted right there on the spot when I said, 'You know what? I created a budget for us.'"

"And my credit score is now in the medium range," Fleischer beamed.

Before she met Gasner, Fleischer didn't know very much about microlending. She said she'd read an article on microloans about a year earlier, but thought that they were for much smaller amounts and so didn't pursue them.

In fact, Gasner said, there is generally a low level of awareness about microloans and microenterprise development. "Whenever I meet people and tell them I work at a microlender," she said, "they immediately ask, What country do you make your microloans in? Is it India? Or Bangladesh?' But microlending has a very strong history here in the U.S., going back at least 30 or 40 years."

Claudia Viek, CEO of the California Association for Micro Enterprise Opportunity (CAMEO), an organization of microlenders and small-business centers throughout the state (including TMC Working Solutions), said that, while CAMEO's 68 member organization served 18,000 entrepreneurs last year, there's still not much public consciousness of microlending.

"When people think of mircrocredit or microfinance in the Grameen Bank lingo," she said, referring to the Nobel-prize winning microfinance institution started in Bangladesh, "they think of $150. In the U.S., people can't do anything with that amount of money to grow a business. They need usually somewhere between $2,500 and $10,000."

Viek added that almost every community in California has access to a microenterprise program, but emphasized that the assistance available to help entrepreneurs grow their businesses may or may not include a loan. "It isn't just lending. It's the resources and technical assistance to grow your business," she explained.

Viek said Fleischer is "a very typical example of the highly motivated, fiercely independent and creative individual who seeks to support themselves through self employment and entrepreneurship." And this kind of motivation, Viek said, by way of explaining CAMEO's broader mission, "results in business creation, job creation and tax revenue generation in our local communities."

Gasner said Fleischer has been "fantastic" with her loan repayments. Blumenfeld explained that since the loan, he and Fleischer have been able to "make a livable income - and more than that - and pay our people (PBE currently employs an occupational therapist, physical therapist, corrective therapist and a vocational rehab counselor), and pay our accounts payable. And we haven't had a cash-flow issue since. And it's been well over a year since the loan."

Fleischer said she enjoys many facets of her business, including the staff she works with and the feedback she receives from clients who have overcome pain with the help of PBE's ergonomic training. "I like seeing the business grow," she adds, "and I like making more money."

Fleischer remembered the moment she decided to sell her grand piano to keep her business afloat: "My mother was on the couch crying, saying, 'What are you doing?'"

Fleischer reassured her mom: "I'm confident we'll get this business to a level where I'll be able to buy a beautiful Steinway someday."

She still plays on a small upright piano, but the Steinway remains part of her long-term budget forecast. "There are going to be two of them one day," she said, "one facing this way, one facing that way, so you can play duo piano. That's the dream."

For more information about microenterprise programs throughout California, visit www.microbiz.org; Information about local workshops and other microenterprise resources is also available at www.tmcworkingsolutions.org/.

Do you have a person or topic you'd like to see covered in Money Tales? Let us know. E-mail Rob at rbaedeker@sfgate.com

Rob Baedeker is a writer living in Berkeley. He is the co-author, with the Kasper Hauser comedy group, of "SkyMaul," the catalog parody.

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