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Archive for September, 2011

5 Ways to Build a Debt-Free Business

Sixth months ago today I quit my day job at a very respected Fortune 200 company.  Scary, yes.  I worried about my wife, our home, our pets, and whether this crazy idea could really take care of them all.  Today, I thank everyone who has helped us answer that question.  Our customers, our suppliers, and even our critics.  We’ve made our share of mistakes, but each one has helped us build a better business.

This weekend I leave for a trip to Vegas for Pack Expo, the largest packaging conference in the US.  Just a simple (and very inexpensive) business trip makes me realize how far we’ve come.  I used to travel infrequently when I worked for the giant corporation, and I almost always hated it.  Now that I am doing it as the owner of a company, the entire feel is different.  I’ve scheduled something almost every hour of the day, to try to maximize the products and services I might be able to offer to our customers when I get back.  I’m excited to meet some of my suppliers face-to-face for the first time.  I’m looking forward to letting my wife demonstrate her knowledge as well, as she’ll be running the whole kit and caboodle while I’m gone.

After sixth months of living the ‘American Dream’, one of the most enjoyable parts of my job now is talking to people, friends and family, and often customers, about the possibilities…both in my life and career, and theirs.  At the same time that I am approaching venture capitalists and angel investors about some ideas I would like to turn into reality, I do my best to offer those around me the same on a smaller scale.  I tell folks, yes, you really can quit your jobs.  You can build a business from scratch, with cash and without debt.  Yes, there are still opportunities for those who will take them.

If I had to offer 5 pieces of advice to someone considering starting a business or trying to figure out how to grow one they already have, here they are:

1:  Do more with your brand.

Many folks get stuck in what they are doing and don’t realize there are many ways to monetize or spread a brand.  I’d love to see my local electrician or plumber start a Facebook page or blog and answer basic questions for free.  While I know our blog has been pretty thin much of the time, we try to add value with Advice and Beans here, our little newsletter we put in each order now, and our Facebook page.   We also aim to be accessible by phone or email and to share what we know (or don’t know) openly.  I know many businesses that do their best to give away as little information (for free at least) as possible, and that is one of the worst ways to grow your business.  The more ways you can interact with a customer, the more chances to make a positive impression, which in turn (with hope) lead to more sales or recommendations to others.

2:  Don’t be afraid to try something new.

While several of our product lines other than the food storage supplies haven’t done great, we have had some success with the most random things (For example, we almost sold out of the new Stormproof Matches we are carrying in the store at the Gun Show this past weekend).  Both my wife and I recognize that Preparedness, while a great niche, is also a pretty small one in terms of the overall market.  Backing oneself into a corner is not a great way to stay in business if one product line turns sour.  And so, we are always on the lookout for new products and services to offer.  In fact, we’ve got some ideas on the drawing board we hope to patent, and that could be huge in the market.

3:  Grow only as fast as you can afford.

Our office is still in our home.  We sublet some warehouse space, but just enough to work from.  It’s sometimes inconvenient to have our entire bottom floor devoted to the business, but we never would have been able to sustain a decent cash flow if we had to rent an office or dedicated warehouse space.  I’ve heard more than a few folks tell me you can’t start a business without loans and capital, and it just isn’t true.

We started our business buying a couple of cases of product at time.  Then we ordered half a pallet.  Then a full pallet.  Now, some of our shipments can take up half a tractor trailer.  The main benefit of this type of growth is you prove your market, and you’re unlikely to be stuck with a ton of stuff you’ll never be able to sell.

4:  Everything needs to have more than one purpose.

The last point notwithstanding, I’ve been looking for a small retail space to open a modest preparedness store in Nashville.  However, instead of just renting anything that comes along, I have several criteria for the space.  For example, it has to have a dock, so that I can stop renting the warehouse space and accept pallet deliveries.   However, I also remember how hard it was when I first started the business to figure out how to receive deliveries…so to defray costs I would offer others the opportunity to use my dock and storage space for their own businesses.

I would also go into a space knowing that a retail preparedness store might not be the biggest draw, so my goal would only be to cover my costs through walk-in traffic.  We’re a mail-order company, and we’re good at it.  That would still be our main focus, and a storefront would really just be a place for us to work that isn’t our house!=)

Another example is the enclosed trailer we just bought.  The business is a 24/7 machine, and we recognize that.  However, having a trailer will allow us to take the business on the road, so we don’t come to resent not having many days off or vacations.  Next month we’ll be taking our first trip to visit family in Connecticut.  However, we’ll be outfitting the trailer with a computer and printer to process orders, and shelving to accommodate inventory.  We’ll be putting advertising on the sides to hopefully draw some business while we’re on the road; we’ll stop along the way to answer questions or visit with our customers.

So never just buy something with only one purpose in mind; always work to maximize the return of every investment.

5:  Just Do It.

Nike came up with one of the best slogans ever.  I’ve talked to literally hundreds of people who feel stuck in their jobs and their lives.  But do you know how many of them were actually willing to give up their TV time, or their Youtube watching, or their weekends, to really try to start something?  None.  Not one.  Heck, I’ve offered to buy people their first shipment of wholesale inventory if they wanted to try selling something on eBay (yes, I also expected a return if they made a profit), and I still haven’t been able to get any takers.

For many years I was those people, so I completely understand how easy it is to be trapped in a particular lifestyle.  I watched my brother and my father come up with literally dozens of ideas that with a little work could have been profitable businesses.  My brother died two years ago at 42, never having tried any of them.  My father is 73, with all the time in the world, and I can’t get him to either.

To be honest, I think that is the reason I actually pulled the trigger.  I didn’t want to end up like I did, giving my brother’s eulogy.  I talked about how brilliant, and friendly, and open, and funny, and loving he was, and how much people adored him.  What I really wanted to say was that he took his ideas, and made them real…but I couldn’t.  Heck, I would rather have said he tried and failed, than never tried at all.  And that’s what I want someone to say about me.

While I hope to be still selling Mylar Bags and Oxygen Absorbers in 25 years, I also plan to have 5 other businesses running as well.  Once I actually started this business, it was like a wave…I saw the opportunities available in everything today.  I have ideas for several pieces of software, for a unique shooting range, a game store, a theme park…and each idea is the stepping stone for the next.  Don’t ever believe there is not something out there for you to do, if you choose to try.   I think every 20-something, every single mother, every corporate middle-manager, every unemployed carpenter, has the same potential to build and manage a business.

If they’ll just try.

 

 

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09 2011