Operating in recession mode.

Designer office furniture, large office space and a fancy car, for some, may be a sign that a business is thriving, but appearance isn't everything, and a little frugality and conservative thinking can go a long way in ensuring the success of your business, says the founder of a health-care service business in Greater Sudbury.

Kathy Wells-McNeil, owner of Total Nursing Care Inc. and director of nursing services for the company, has watched her business blossom from a one-woman show operating out of a home-based office to a 50-plus-employee firm, tucked away in a small, conservative location in Greater Sudbury.

Aside from plenty of blood, sweat and tears, Wells-McNeil attributes her success to her ability to evaluate what is most important for her business, and to knowing when and when not to dig into company coffers.

"Be frugal, be conservative," she says. "Don't over spend. There are a lot of things you don't need when you first start a business, like a fancy car. People think you need to have the appearance of success to be successful. If you have a four-month slow time, and you can't make (business) payments because you're trying to meet car payments, it can make or break your company."

Her company's revenues for 2003 reached about $1.3 million, and in late 2003 she expanded to North Bay, hiring a manager who works out of a satellite office.

Wells-McNeil started her first company, Kathy's Home Care, in 1994 as a student in Cambrian College's nursing program, providing non-medical home-making services. The business was a means to subsidize her tuition as she worked to earn a diploma in registered nursing. In 1995, after graduating, she decided to launch Total Nursing Care Inc. to provide registered nursing care, homemaking and physiotherapy services.

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In the fall of 1994, she registered at Laurentian University to pursue a nursing degree. Shortly afterwards she discovered her business had "grown wings" beyond her expectations and pursuing both a degree and working to move the business forward would be a challenge. She opted to concentrate on growing the business, making a commitment to herself to direct all of her energy into making the company a success.

Her success has come with its share of challenges, she notes, one of which is heard often in the circles of young, female entrepreneurs. In 1998, at the age of 26, she approached the banks for financing, and admits her experience was one of disappointment.

The bankers were reluctant to lend money to small businesses led by young people, she recalls.

"I had my first big contract, and would likely bring in $50,000 profit," Wells-McNeil recalls.

The problem was that she would not get paid for the contract immediately, and would require funds to pay her employees until she received pay for the contract.

She was told by one particular bank manager that her company was growing too quickly and the manager recommended to her she reconsider her direction.

"I couldn't make (the bank manager) understand ... It was very discouraging."

Still unable to convince the banks to lend her money, she was approached by a friend who offered her financial backing. She made a deal with the individual that if he loaned her $16,000 for the business, then in four months she would return to him $20,000, which she did.

"I was borrowing on receivables, and even with such a small risk, the banks wouldn't lend me money," Wells-McNeil says. "That could have been a turning point for my company if I didn't have the funds."

By SARI HUHTALA

Northern Ontario Business