( Orignally Posted Here )

 

I have been on these forums for almost three four years now. I picked up Rich Dad Poor Dad while aimlessly shopping one day. I was a stay at home mom with a three month old and an 18 month old. I read the book in two days (you ladies with kids know that is an incredible feat! lol) I decided to take action, like many of you here today. So I'd like to share my story with you, to start a conversation that will hopefully inspire and encourage you!

scrilladogg1974 asked to E. Morgan: "You've said that you started a business with only a few hundred dollars of your own money and now you don't have to work in the traditional sense because your business supports you. I'm finally seriously looking into starting a business, and I don't have any money, and I'd like some advice (generalized at first). I'd email you but your email address is hidden, so I'm posting. How did you do it?"

I am happy to share my experience. I built an online contractor "referral" service and then sold it. I did start it using very little of my own money. I did an owner carry situation, so I got half up front, and then received monthly payments. I then took that money and leveraged it into other investments. So techincally, that business does not support me today.

An online database was a very low overhead business to start. Most businesses don't cash flow right away, although some will more quickly than others depending on the nature of the business. There is always a learning curve, and you will most likely need to be able to sell, to handle risk, and to be flexible. In my opinion, it is always better to be under-funded than overfunded in the beginning.

It was a messy learning process for me, but I did it, and hopefully other people can learn from it, or at least think, if she can do it, I can!

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Rich Woman Moderator

Chapter One- Bootstrapping an idea to life

I read RDPD three years ago, and decided, I could do that. So I thought about businesses I could start. Being familiar with the construction industry (I was married to a painter), I saw the need for good contractors to differentiate themselves from the bad.

First key: I saw a need

Then I researched my idea to see if anyone was currently meeting the need. I did my due diligence, as far I I knew what that was! Basically I searched any key words I could think of online and what it turned up! lol I would literally be reading a book on how to do something and then go do it!

Second key: Due diligence

I saw there was market for my idea, and nobody was doing it the way I thought of doing it. So, I decided to go ahead with it.

The first step I took was to set up my LLC. That was $500 out of my own pocket. If I had to do it again, I would have waited to set up my entity, because I didn't really know what would be the best fit at that time and I could have used that money for other things.

I didn't have any sort of plan, not at all! LOL In fact the whole time I had the business, I never had a plan. Not saying thats good! I just had a vision of what I wanted to accomplish, and knocked on every door I could to try to make it happen.

During this time, I was reading voraciously, and found myself trying to hire a business consultant and seek out an attorney ( I thought I needed a team). Neither worked out, thankfully.

I worked and worked on my idea from April- August. I literally created everyting from scratch. Then I brought in my spouse (at that time) as a partner in August, and we literally "burned the ships" to work on the business full time.

These are a couple of things that turned out to be horrible choices in my case. First of all, my "partner" was not completely on board and committed to the idea. Second, we had no savings to speak of and we had no cash flow for living expenses. We did have additional out going money because of the business, and any money we did make went right back into the business.

That is why it is good advice to start a business part-time. You can't do anything without cash flow.

We set a launch date for October (two months) at a local trade show, and we worked hard to have people in the database, as well to have a database itself! It was easy enough to convince someone to help us build a website (no money into it), however, selling a completely new service concept (especially without the site) was much more difficult than we had anticipated.

We also didn't have the money for the trade show booth, but I was able to convince the trade show people to give me more time. Then we partnered with one of our new clients to split the booth cost with them. We borrowed our half of the booth cost from family. We also borrowed money from family to print up brochures and business card, and I convinced the graphic designer to delay payment for his services.

Here is where the ability to sell is KEY! If I wasn't enthusiastic and confident in my idea, I never would have gotten that far! (It doesn't hurt to be good with people!)

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Rich Woman Moderator

Chapter two: the launch

By the time October and the trade show arrived, we had a decent list and website to work with. We were confident that we were going to be rich- that day at the trade show. lol We spent our last few dollars on trade show things, and went for it. Three days we stood, explaining our new concept to people. We got a lot of support, some naysayers, even one contractor who put our information down and ran away. But not one sign up. We left with less money than we started the show with.

What we did make were two very important contacts: 1) a local celebrity who was hosting the show who loved the idea for our service, and (2) a real estate magazine publisher who was looking for a service like ours.

Over the next few weeks, I struggled to keep the business alive. After our unsucessful launch (read here: we didn't make a million dollars) my partner bailed on the business. I tried an email blast (for free, based on a percentage of sales),which didn't work. I ended up restructuring the whole business, and had a whole new site built (trading out work).

I managed to convince my partner to give it another shot. And he did, half heartedly. In hindsight I should have let him go, it was tricky being married though! We literally begged our way through Christmas time, and were supported by friends , family and the local church as we struggled to make the business work.

About that time, the connections we had made came into play. The RE magazine publisher gave us a free half page ad in their first and second publications, which had a distribution of nearly 28,000. The local celebrity wrote an article about us in the AZ Republic (huge!), and she also had us on her radio program! We had also made the acquaintance of a the owner of EZsitemaster.com who gave us a new site! I had also begun to make friends with other business owners and started linking to their sites.

Slowly my partner wanted out, and I began looking at other options. I looked at bringing in a new partner, hiring a sales staff, getting investors, franchising, etc. (LOL I tried to talk MJ into buying it! LOL) Just when the business was really starting to find it's rythym, I decided to sell.

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Rich Woman Moderator

Chapter three: selling the biz

When I finally decided to sell, I went to people I knew first, who might have an interest in the business. One of our clients had asked to be the first franchisee when we got to that point (that was the goal). I figured she already had experience in the business and has expresses interest, so I offered her first chance at it. And she wanted it.

From there, since it was a new business, I set the price by what I had put into starting it, and what I had made from the business that year. After working out the details, I drew up my own contract! Half up front, I carried the balance for a year, and then a lump sum payment. That was it!

Now, I have grown that money, to be able to do other things with.

A side note though- I was entirely too friendly with my buyer, and instead of my lump sum, I have had to extend the payments out, which is not the situation I hoped for.

I don't know if this will help anyone. It should be titled "what not to do when starting a business". We can't be afraid of making mistakes, or be so afraid of doing things "the right way" we never do anything.

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Rich Woman Moderator

Erin,

 Thanks for sharing your story about your first business, it is great to hear about both the successes and the "what-not-to-dos". I have no idea how you were able to do that with two little kids at home! I have a 1 year old and an-almost-4-year-old, so I know how hard it is to find any time for the stuff you want to do.

 Just last week I made a firm decision to start my own business; right now I am working on it bit by bit in the evenings, and then I will quit my job to work on it full time in May - after my husband graduates with his Masters degree and I can kick him out of our home office! I am going to leverage the experience I already have as a graphic designer and start out in the "S" quadrant, then work my way into the "B" quadrant and eventually sell the business once I have a good system going. I have three phases planned:

Phase I - Freelance designer ("S" quadrant)
What I will be doing: Find clients and do all the graphic design work myself. Develop expertise in my niche, build a reputation and network of contacts. What I will be learning: Marketing, sales, psychology (how to figure out what clients want)

Phase II - Firm manager/CEO ("S" quadrant)
What I will be doing: Building client base, coordinating jobs with clients and my designers, managing and growing the business, building the brand, and developing systems to do our work more efficiently and effectively. What I will be learning: All the ins and outs of running a business, working with employees, how to develop systems.

Phase III - Business owner ("B" quadrant)
What I will be doing: As little as possible! I will make sure I have quality people working for me, and that they are clear as to what is expected of them and that they have the tools they need to accomplish what is expected of them. At this point I will consider selling the business or keeping it for the cash flow. What I will be learning: How to exercise enough control to keep the business on track, without having to be there constantly to take care of it.

 The reason that I put "What I will be learning" in each phase is because learning is what I absolutely love most in life. Initially I had balked at the idea of starting a graphic design business because I have been getting bored with it. But when I realized that I could be learning while also leveraging the years of experience I have.. well, then it was a no-brainer!

For this breakthrough I have to give credit to DC Cordova... I was on her free teleconference last week, and when I asked her a question she told me that to find my focus for a business I needed to make a list of my 10 MOST FAVORITE THINGS IN LIFE - they could be anything, business related or not - and then find something that encompasses about 8 of those things. I did that and it totally brought clarity! It took about half and hour to actually do it, but then I was so excited that I couldn't go to sleep for hours!

 Thank you to DC, Erin, Kim, and everyone else who shares their stories and advice - you really make a difference! :)

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"It's amazing what you can do when you don't know what you can't do."

Thanks for sharing your story. I have an internet business that I will launch locally. I have no partner and this is the first time I will be doing this.I have the opportunity to get local press( I'm giving away my product). Do you have any advice?

 Thanks.

How exciting for you!  I'd love to hear more about it!

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Rich Woman Moderator

Hi.  I found your story truly inspirational.  Your determination to persevere is part of what it takes to succeed.  I am an experienced professional "employee" with a entrepreneur inside me just waiting to burst out.  I live in Dallas.  Do you have any suggestions for books or people to talk to that can help launch my financial learning. 

 Thanks, in advance, for any suggestions you may be able to offer.

 Stephanie.

Great story, emorgan! It's funny how you think as soon as you launch you going to get slammed. I thought/hoped for the same. LOL! It will happen, though, I know it. I'm working hard at it anyway!

 

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Danielle
www.expacklymondo.com
Available on goober chat:
www.goober.de

bump

 

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Rich Woman Moderator