Project Person // Profile #8

How to not let bankruptcy take everything.

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Meet Phil Sanders // Project Person #8

What project are you currently working on? PSco

What did it take to get started? 15 years of entrepreneurship with a Titanic ending + the strength to pick myself up and courage to get back in the game.

What’s your most impressive or favorite stat? Citizen Supply was in the top 5%-7% of the 30m+ private business in the US in annual revenue. It ain't all about the revenue but that's a really cool (and rare) one.

What’s something that never would have happened for you without this project? It's more of this would have never happened without my past. What I'm doing now is what it all led to. Pursuing the thing I was both scared and called to has brought a deep satisfaction, clear focus, and an alignment I can't quite explain.

What keeps you up at night? Wondering if I could do an Ironman. Dreaming about what this new venture could turn into. When I drink any caffeine after 3pm.

What are some of your other projects? Previously: Citizen Supply, Foster, and Three Pennies Photography. Currently: We just bought our first rental property. Anna's taking the reins on that. Other than that I kill about 10 ideas a week. My mantra is about depth right now, not starting new things.

If you’ve ever been to Atlanta, you’ve likely visited Ponce City Market. And if you’ve ever been to Ponce City Market, you’ve likely visited Citizen Supply.

Citizen Supply is like Etsy-come-to-life. An expansive store selling goods from small businesses all over the US, founder Phil Sanders called it the brick and mortar solution for small online brands that didn’t have an in-person connection with their customers. 

CS always felt like magic, and I felt cooler just walking through it. It was a go-to place to find gifts, and it was almost like a little incubator for Atlanta’s next-big-thing. 

But behind its curated shelves and Instagram account was an entrepreneur (also called “a human being”) and nearly a million dollars in personally guaranteed debt. 

eeeee.

That human being, Phil, is a project person through-and-through. I first met him and his wife Anna when they had their photography business, Three Pennies. They then opened the first co-working space I had ever heard of—Foster—as a funky and welcoming space right next to what soon became Ponce City Market. 

I wasn’t surprised at all when I heard he had signed a lease for Citizen Supply at this gigantic piece of property (12,292 square feet to be exact!) as the first store to open on Ponce City Market’s second floor. 

Phil is a visionary who can “talk his way into anything”. With no investors, he negotiated a contract with the massive real estate company behind PCM, and he opened the doors to Citizen Supply with about 50 vendors. (They grew to over 250 vendors a few years in!) 

They topped the $1M revenue mark in year one and were nearing $4M by their fourth year. Revenue was looking great, with a big red arrow trending up and to the right. 

But as they say—revenue is vanity, profit is sanity, and cash is king. 

(You can hear those idioms all day long, but it’s another thing altogether to experience them.) 

Citizen Supply had acquired a little bit of debt due to the big build-out and some growth-funding needs, but the debt grew exponentially in 2020 when Covid wreaked havoc on retail. 

They went from revenuing over $300k a month to revenuing just $200—not k, just plain $200—in April of 2020. 

Phil earnestly tried to keep Citizen Supply going for about eighteen months.

He walked me through the entire process recently when I interviewed him about this story, warning me he might get emotional as he re-lived it. 

Spring of 2020 introduced so many new terms and concepts for us to learn and react to:

Quarantines, social distancing, contactless pickup.

Non-essential business, supply chain, occupancy limits.

PPP, EIDL, rightsizing.

“Before Covid, I felt like I could navigate through problems in real time,” Phil told me. 

But everything about this situation was different. It all felt so extreme, polarizing, and isolating. With significant revenue decreases, he continued to take on new debt, as he didn’t want to let his team go.

But even in 2021, as revenue finally began to increase, there were new problems to navigate. 

For example, sales were up, but the cost of goods, labor, and rent had increased too. 

Or, his Director of Retail had a preexisting respiratory issue. How could he ask her to come in to work? 

Or, the landlord signed a new stand alone lease with Citizen Supply’s largest vendor—a vendor that was responsible for north of 20% of Citizen’s income. 

“That’s when I learned why you never have one customer account for that much of your income,” he said.

It was yet another lesson he had read about but never quite believed in until he lived it. 

During that season, he said it was a constant question of, “Can we make it through today?” He went from call to call waiting for the next shoe to drop, wondering just how many shoes there were left to go. 

He lost twenty pounds and felt the stress take residence in his chest, and he often spent his time between Zooms laying on the floor, listening to meditation-tracks just to give his brain a break. 

But then he would hop on another Zoom and smile and tell everyone it was going to be okay. 

He said he worried what his team might think of him, fearing they might not think he had what it took. (::all the entrepreneurs reading this nod in solidarity::) 

During our interview, Phil said he wondered what it would have been like if, from day one, he had led with vulnerability instead of fear. Would the outcomes have been different? 

He then pointed to the bookshelf behind him. “I read sixty books in a year, wondering if there was a knowledge gap somewhere that could get me out of this.” 

He then said, with complete humility and ease, that it wasn’t a knowledge gap but instead a maturity gap. “Deep down, I knew what to do. I just wasn’t doing it.” 

In August of 2021, he showed his Director all of the numbers. At that point, some of his team had seen the gross margin line, but no one had seen what lay below it. 

She graciously said something along the lines of, “It’s scary, but I’m not scared.”

He said they did such good work from that point on. 

Unfortunately, however, they just couldn’t rightsize cashflow quick enough.  

By October of 2021, Phil had amassed around $950,000 in personally-guaranteed debt, with no signs of it lessening. A trusted mentor who had full access to the company financials told him point-blank that he could not and should not take on any more debt. 

Phil knew that he was right. Thus began the process of shutting Citizen Supply down. 

His friend and fellow business owner Andy Thoms gave him advice then that he has carried with him since: 

Act today the way you want to be remembered in five years.

He held that advice close as each week seemed to hold one terrifying conversation after another, from speaking with the landlords to the team to his customers.

Phil’s ownership of Citizen Supply ended in December of 2021, and Ponce City Market took over from there. 

Phil was left with nearly a million dollars in debt and no business to pay it down. 

As he waited for a late employee tax credit he was owed to come through, he spent that season constantly taking calls from the six different creditors, eventually settling the debt with all but one. Under the stress of the constant creditor calls, he remembered feeling that at any moment, he would either go to jail or be attacked in the streets.

The one remaining loan left him with only two options:

1 - Pay in full. 

2 - Have it discharged through bankruptcy. 

After regaining confidence in himself and hope in what the future held, Phil was ready to get back into the driver’s seat. Instead of being at the mercy of the SBA, he filed for bankruptcy in September of 2023. 

He had only $600 in his bank account. “I may have declared bankruptcy but I, my friend, am not bankrupt,” he said. “Finances are just one element of life. All the other pieces were thriving, and I knew I could rebuild.” 

In January of 2024 (yes, just this year!), Phil was finally discharged and debt free. I remember seeing his post on Instagram and feeling all the entrepreneur feels.

“Finances hold all of our insecurities,” he told me, “but what breaks us often becomes how we serve people best.” 

(Read that sentence again!)

Earlier this year, Phil began coaching and consulting other entrepreneurs, with a heavy focus on (1) understanding their finances and (2) instilling the mindset and behaviors needed to hit the needed results. He talks about cowboy math and having those “hey homie” conversations about what’s going on, and he brings in experts like our friend Becca who share “not just expertise, but wisdom”.

“I would get a report from an accountant but I wouldn’t ask the right questions, because deep down I didn’t want them to think I didn’t have what it takes,” Phil said, thinking of his own experience as an entrepreneur. 

I immediately remembered thinking the exact same thing a few years into my work at The Big Fake Wedding. I had a fractional CFO that sent me all sorts of data… but I just never quite knew what it meant. It took a Line of Credit debacle for me to finally put my hand up and ask for help. This is now one of my favorite soapboxes: understand your finances, asking all the embarrassing questions until you do. You may feel dumb for the moment, but feeling dumb is infinitely less painful than the long list of other alternatives. 

At the core, Phil’s financial process with PSco centers around three main areas: 

  • Clarity: Elevating financial literacy and ensuring accuracy across the company.

  • Capabilities: Building financial processes and empowering teams with the tools and knowledge needed to operate at a high level.

  • Cash Flow: Cultivating disciplined financial habits that drive revenue growth, safeguard profits, and provide for future opportunity.

As he transitions the info on his site and socials, he’s given me (and you) a sneak peak what’s coming: PSco

(Join his email list to stay up to date as he rolls it all out!)

Towards the end of our conversation, I asked Phil how his wife handled all of this. 

That’s when he did, as he had warned me, become emotional. 

“I feel so undeserving. Anna just showed absolute, unconditional love. There was never any shame.” 

(That’s another sentence worth reading again.)

I can’t imagine all that Phil and Anna have been through in the last few years, but I left our conversation feeling so encouraged. Phil lights up when he speaks about the businesses he is now working with, and I can’t help but think of all the pain that he is preventing for these folks just by stewarding his own so well. 

He said he grew up as a missionary kid in Kenya until moving to America for middle school. Can you imagine those dichotomies?! Belonging was something his childhood never quite provided, and I’m sure a good therapist could tie that to his desire to keep the business going, no matter the cost. 

But bankruptcy eroded all pretenses and left him with an unexpected gift: the freedom of being known and loved despite what he does—through the kindness of his team, the support of his customers, and the through-it-all love of his wife. 

And with his new work with entrepreneurs, Phil now gets to give that gift again and again. 

-Callie

p.s. Join Phil’s bi-weekly-ish email here, where he will share about his upcoming Functional Financials offerings.

Next week, I’ll share a super in-depth primer all about profit—what it is, why it’s important, etc. Stay tuned!

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I’m Callie Murray, a self-proclaimed Project Person. From a fake wedding company to a mountain shack to a novel, I’m always up to something.

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