The Accidental Entrepreneur

Entreprener-main

 

 

 

 

As a free agent

 

A couple of colleagues from my old company did follow me, and not too much later a former client joined us too as well as my ex-wife who was doing the books part time (we stayed friends).

As soon as I was a free agent, I contacted every old client I had ever worked with and liked and several of them started giving me work. I did this because I was legally free to do so, as my former employer had never bound me to a non-compete or non-solicitation of former clients, but this upset my former employer nevertheless who had a letter sent by an attorney. I knew what this missive was the moment I saw it. I came home late and found a FedEx letter propped up against a corner of my front stoop, and a black widow spider had built a web across it. I’m not kidding. So I disposed of the spider, read the letter and wrote one back — a letter from my heart without benefit of the advice of counsel. I explained that I was a Hispanic consumer researcher and that was what I did and that was what I was going to do, so leave me alone as I was not legally compelled to cease. I never heard back from them again. So bit of advice—check to see what you are legally bound to do or not do and abide by it.

 

 

 

 

Growth and profitability

 

My company was now real and in my hands to bring in business and grow. Now the decision was one of goals. My big long-term goal was to grow the company. Our first year in business we generated a modest sum in total revenues. Years later I would laugh about that as we regularly billed more than that amount in a month, and now it just seems weird as working for a huge company, we often win projects triple that amount in a single day. How times have changed! And my sense of scale, too!

To achieve short term growth, virtually every nickel I could spare was put into new computers and new employees. We added space upstairs and built our own focus group facility for qualitative research. We eventually added our own call center too. So this company was no cash cow, it was a boot-strapped growth-focused operation from day one to our last day. Do I regret that? Not really, because this reflected my goals and the market demands. I do wish I had been a bit more balanced, more focused on building up savings than keeping my employees happy, but I am who I am and I was never going to become a cut-throat mogul. Besides, I hate comb-overs. So think about what you want out of being an entrepreneur and how much you want to take out and how much you can plow back in to grow your company.

Here is what those decisions could look like. Over time you will be confronted with choices during the inevitable business troughs. How I made them in the past could easily be seen as mistakes, yet I made a decision to stay the course and skate the line of profitability. I was always more worried about fulfillment than profitability. That meant as our business load fluctuated from month to month, I didn’t let anyone go even if it meant paying out all of our profits out just to keep them on the farm. The result was we didn’t make much money but the work we did was always good. So I was in effect buying a reputation for quality at the expense of any substantial profits. That hurt me then but helped me later.

Oddly for a company that worked in the field, marketing was always a weakness. I relied on personal connections and conferences, articles and speaking opportunities. But anyone starting a business has to put this issue front and center if you want to thrive vs. survive.

 

 

 

 

 

Financing realizations

 

You will also be confronted with banking decisions which in my case was always a sore spot. We opened our initial accounts at the closest bank which was a Savings and Loan. I stupidly imagined that banks would want our business, that they would be interested in us and be excited to have a growing company among their customers. Sigh. Looking back, my advice is don’t assume too much about what your banking relationship will bring you or their willingness to loan you money. Your company health, your last three years of tax returns and the overall economy will drive what the bank will be able and willing to do for you, not your prospects moving forward.

Investors are an interesting set of people. At one point we danced with them, but their rules were very simple – all of the options were on their side, most of the advantages too. I was disappointed in the process, probably mostly out of naiveté. I imagined it would be a coronation, but that was just dumb. If you are interested in venture capital, talk to people who have been through the process, who know the process and approach, what you can expect and how you have to play that game. Sorry, I can’t help with this one.

But our business was growing steadily, and we landed a lucrative account for a Mexican food company and we did really good work for them in the Hispanic and General Markets. As that business grew, our team of 5 people realized we could aspire to build up a call center so we could do our own data collection and realize the dream of a vertically integrated company that did everything in-house rather than having to pay suppliers and have to mark up their already marked up work. This was the catalyst for our move to Burbank and a 10,000 sq. ft. office.

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