How to Achieve Your Small Business Start-Up Success Story
Tory Johnson gives tips for getting your start-up in the black.
Aug. 18, 2010 — -- I love hearing from current and aspiring small business owners -- about their challenges and their successes.
In the last year, I've heard more and more via email and Facebook posts from people who are pursuing entrepreneurship after a pink slip. (I get that, since I did the same.)
The good news is the Internet and social media in particular make it possible to share your story, promote your business, ask questions, and get advice with just about anyone. (If you want to talk to me, I'm always at Facebook.com/Tory or you can email me through my website.)
Introducing Signature Flan.
Just a few months ago Vivian Tenorio contacted me on Facebook, Twitter and by email to say I absolutely needed to hear her story. She was proud of what she launched and was ready to share her early successes.
Tenorio had been working as a software installer and noticed orders were slowing down considerably because of the economy.
She worried that it might mean she would lose her job, but instead of burying her head, she spent nights and weekends plotting and planning a business idea around a family recipe for the sweet caramel dessert flan.
Everyone who tasted it, loved it, so she perfected the recipe and sampled at farmer's markets, high-end grocers and restaurants. Everyone who tasted placed an order.
So Tenorio packed up her car outside of Dallas and drove to the Austin headquarters of Whole Foods to drop off a batch of flan for the dessert buyer -- begging the receptionist to make sure it was delivered. The next day, they placed an order.
A few months later, Tenorio was laid off, so her instinct was right.
Signature Flan is now in more than 100 Whole Foods locations and other specialty markets.
Tip #1: Bootstrap for solutions. If you have an idea for a food product, zoning laws and other regulations probably prevent you from cooking at home. Look into renting inexpensive hourly space in a co-op kitchen (which you can find by searching online in your area) or even by calling churches to ask about renting during off hours in lieu of committing long-term to an expensive commercial kitchen before you know the real potential.
Tip #2: Talk to bankers before seeking a loan. If you think you need a bank loan, which Tenorio did for $15,000, ask for advice and insight from your current bank on what's getting approved, what kind of business plan is expected, and the timeframe for turnaround -- poke around and get friendly with the branch manager before just showing up with what you think they want.
Enter Boutique Larrieux.
Until earlier this year Lydia Hamilton was an IT project manager who decided it was time for a complete career change. Her dream: a women's clothing boutique where "exclusive fashion becomes inclusive."
She needed funding, but was turned down by banks for her $25,000 loan request. Each time Hamilton was told she had the best business plan they had ever seen, but the answer was the same: Sorry, not now.
Determined to not be deterred, her Internet research led her to Prosper.com, the largest peer-to-peer lending site. In just 10 days, her $25,000 request was fully funded by more than 700 strangers who liked her idea.
She has three years to repay it at about 11 percent interest, which is higher than the banks would have offered, but the banks said no, and she wanted the money now.
Boutique Larrieux is thriving in Milwaukee and online.
Tip #3: Research funding options. Just because a bank says no doesn't mean you're out of luck. Peer-to-peer lending, family and friends, and other options do exist. Check out Prosper.com, Kiva.org, and Kickstarter.com for ideas and opportunities to fund your small business dream.
Web Extra! Tip #4: Tell your story. Those 700-plus strangers funded Hamilton's loan request because they not only thought she had a solid business strategy, but they also liked her personal story and they believed in her. When someone -- whether a family member or the bank -- is going to consider making a loan, regardless of the terms, they will want to get to know and like you.
Introducing Mountain Mama.
When budget cuts cost Teresa Delfin her position as a college professor, she job-searched, pursued a variety of temporary positions, and had a baby -- all at once.
Throughout all of it, she realized she wanted to start a clothing line for pregnant women who thrive on rugged outdoor sports. When her research showed that nothing existed quite like she imagined, she began designing, sourcing fabrics and finding a place to have pieces manufactured for her brand Mountain Mama.
All of her funding came from her parents, in-laws and an uncle.
Based in California, Mountain Mama's tops are all made from fabric milled in downtown Los Angeles and the garments are cut and sewn nearby, too. Even the zippers are American-made. The collection debuts today at Mountain-Mama.com.
Tip #5: Talk to companies in your industry. Don't be shy about reaching out to other small business owners and the giants alike. You can find just about anyone through the Internet -- and very often they're willing to share, since it strengthens the whole industry. And at a time when the economy is struggling, people are more helpful than ever before. Ask about factories, vendors, resources, and more.
Tip #6: Research and apply for industry awards. Mountain Mama's collection won an APEX award, which is the outdoor industry's most prestigious design award. Winning it for a piece in a debut collection (with no formal design training) is typically unheard of, so this got the attention of industry insiders and has opened doors to great connections for the company.
Web Extra! Tip #7: Dive into social media. Social media truly levels the playing field for start-ups. After seeing some of my segments on small business success, Tenorio, for example, emailed me and found me on Facebook and Twitter to share her story. Delfin also found me on Facebook and responded to a query I posted looking for small business success stories. And Hamilton was introduced to me by a mutual friend who knows of my commitment to start-ups. Social media is an ideal way to reach anyone on your target list with your message. Nobody knows if you're sitting in a fancy office building or you're huddled in your basement. You can put on a great business face -- and get to anyone who you think can support you, give you advice or help you spread the word.
Web Extra! Tip #8: Challenge yourself to find solutions without spending money. It's easy to say you can't possibly make things happen without a big bank account to back you up. I started my company 11 years ago with $5,000, which I definitely couldn't afford to lose. That meant finding ways to barter and beg (never had to steal!) to launch and grow the business. As the saying goes, where there's a will there's a way -- you have to really want it. The best way to fund your growth is by generating sales.
Web Extra! Tip #9: Focus on Sales. This final tip is the most important of all. Without sales, you have no business. Thousands of people have great ideas -- they can envision exactly who will use their product or service. But they have no clue how to reach those desired customers or clients and they're not spending nearly enough time developing a sales strategy. Sales solve problems. Sales create a business. Sales enable you to grow and shine. Invest time in developing your sales strategy early in the process, even though it's the least sexy and least fun part of plotting and planning your business launch. More businesses fail not because of a bad product or service, but because they can't sell it. Similarly, plenty of lousy products and services do just fine because someone knows how to sell them.
I'm rooting for your small business success.
Tory Johnson is the workplace contributor on ABC's "Good Morning America" and the CEO of Women For Hire. Connect with her at ToryJohnson.com or Facebook.com/Tory.