CHAPTER 7

Starting Your Own Business

Sometimes, no matter what you do, you will never be happy working for someone else or in a large company. If you’re in that situation, and you are thinking seriously about starting your own business, my advice is to go for it! I did, and it was a great experience for me.

The Telltale Signs

I worked in corporations for 16 years, but at the last one, a large Fortune 100 company, I realized I was not suited for the rules, regulations, and politics of the corporate environment. I wanted to do things “my way.” I always was unhappy having to bite my tongue and not say what I was really thinking. At one point, I was given a new boss but it was clear to me that he was under the influence of my former boss. After having been at the company for more than three years, all the while receiving excellent performance reviews, I suddenly received one that was terrible, essentially cutting me off from any future promotion or salary increase. It was very discouraging, since the review indicated that despite my previous success, I would now have to work harder than ever. I would have to keep my mouth shut and love my existing boss. Based on the comments he made, I decided it was time to leave.

That’s when I began thinking about starting my own business. I took a long walk with my father on a Maryland beach and told him about my situation. He asked me, “What do you have to lose?” I replied, “nothing.” He said he would help me, so I left the company and went into business for myself. My husband supported my decision as well.

A Partner?

At first, the plan was for a coworker and I both to leave at roughly the same time and start a business together. Both of us were discontented in the corporate environment. So, I prepared everything we would need on the expectation that we would have a partnership—logo, letterhead, business cards, agreement, and so on. Unfortunately, the partnership failed before it ever got started. My partner suddenly decided she did not want to leave and she rededicated herself to her job. I seriously wanted to get out of the corporate world and start my own business. Part of the motivation was that I wanted to have more control over my time and consider having children. (Ironically, about a year later, my once-envisioned partner did leave her job to start a family. I, on the other hand, was never able to have children, so I put all my energy into my business, working harder than I ever had in corporate life.)

The Departure

I knew I had to be careful about how I would announce my departure. I made arrangements to meet with my boss (actually, at that point, he was technically my boss’s boss). I knew he loved chocolate, so I thought I would invite him to a nearby restaurant for hot chocolate. You have no idea how difficult it was to find hot chocolate 35 years ago in downtown Philadelphia! I finally found a hotel that would serve hot chocolate and I made an appointment to meet my boss’s boss there.

Before I met with him, I spoke with the executive assistant to the chairman of the company, to give her a “head’s up” on my plan to leave. She and my boss’s boss were good friends, so I knew she would tell him. When I later met with my boss’s boss, it was clear he knew what I was going to say and had thought through what he wanted to say and do. When I told him I was starting my own business, he offered to hire me as an independent contractor for a year at a decent monthly retainer. He even told me that if it turned out I didn’t like being on my own, I could return to the company after the year. Of course, I never went back. In fact, my one-year retainer kept getting renewed by another department and this turned into seven years of work for my former company. I ran my firm for 35 years until I retired!

Starting Out

Once I started my own business (it was a public relations firm), my business network (about 500 people back then) really proved its worth. I developed a professionally-printed mailer on card stock, sized to fit into a standard #10 business envelope (this format is called a “slim jim” in the printing trade). The services I offered were shown on the front, underneath my nascent company’s logo. My biographical sketch was printed on the back. I called a woman who had once worked as my intern and asked her if she would type addresses onto 500 envelopes. She agreed. (I don’t remember what I paid her, but I’m sure it was fair at the time.) I then wrote personal notes on each of the cards, put them in the envelopes and mailed them to all my contacts. The mailing was very successful; I attracted four additional clients from that mailing.

Soon, another woman I knew called me; she was crying and said she had to quit her job because she was pregnant and couldn’t keep up the job’s hectic schedule. Would I take her on for a couple of days a week? I was happy to do this, and she was willing to work at a price I could afford. Another professional woman with whom I was a friend asked me if I would like a secretary who was looking for three days a week of work. I said yes to that, too. So, with two employees and myself, I started my firm.

I don’t think I realized back then how much work it is to start a business. (The man who bought my business when I retired 35 years later got the benefit of all my hard work, everything I had learned and all the systems we developed over those thirty-five years.)

I decided to run the business out of my home. (Fortunately, the zoning laws in the town where we lived were not an obstacle.) I couldn’t afford any “real” office space at that time, not even in suburban South Jersey, let alone downtown Philadelphia. The Delaware River is a psychological barrier to some business people in Philadelphia, so we joked to prospective clients that we could arrange for a green card for them to come across the river to New Jersey.

Fortunately, we had a four-bedroom house, so my husband and I turned our basement into an office. The staff gradually grew. So, then it became the basement and one of the bedrooms. Then the basement and two bedrooms. Then the basement, two bedrooms and the kitchen!

Once I began to find work papers left in my powder room and on my kitchen counter, I decided it was time to move out of the house and into leased office space. By that time, I knew I had enough retainers to last for six months, so I asked my husband—who had left his law firm and joined me full time by that point—to look for office space outside the home. (One of the reasons why my husband left his law practice was that his mentor worked 70 billable hours a week; he eventually left his wife and two children. Yes, he became chair of his firm and did quite well.)

Computer Equipment, an Office and My Husband, the Attorney

Starting out, we needed some office equipment. A woman who worked at my former company gave me an electric typewriter the company was getting rid of. She was tasked with donating equipment to nonprofit organizations. I certainly was not making a profit at the beginning, so she was comfortable giving me one of the typewriters.

My father loaned me some stock so I could put it up as collateral for a bank loan to buy an Apple II+ computer (the IBM PC had just been introduced and did not yet have the breadth of accessories and software that the Apple had at that point). We also got two 5¼-inch floppy drives, a “letter quality” daisy wheel printer, a word processing program, and a spreadsheet program. All told, that system (with a whopping 64 kilobytes of memory!) cost $7,600. I paid this loan off as quickly as I could, making sure I could cover my staff expenses first. I was also able to buy a second-hand copier cheaply, directly from the company that had sold the equipment originally.

The frugality I adopted paid off handsomely. I was able to hire a writer three days a week. My husband could not have been a better person to have on my side. He was practicing law during the day, then coming home to edit my work in the evening. He also bought and set up the computer system. Later, he wrote a time and billing program (imitating the one they had at his law firm) and a database program to manage our mailing lists. He kept improving those programs as our needs expanded, and we used them for over 30 years.

Work, Work, Work

Remember, you have to keep a positive outlook—failure was never an option for me. One lesson I learned is that you don’t want to have your out-of-home office too close to your home (my first office was a mere one and one-half miles from our home). Otherwise, you will be there all the time—a natural tendency when you have a business is to work all the time. Once we moved our firm to a second office, farther away from my home (about nine miles), I didn’t go there as often during nonbusiness hours; instead, I took work home with me (not much better but it saved on driving time). It was nothing to be on email at midnight.

When my husband and I rented a place at the Jersey shore in 1989 for half of the summer, we wouldn’t get to our shore place until 2 am on Friday morning because we were working late at the office on Thursday evening. Then, we would work all weekend (we had a computer and portable fax machine at the condo), and finally, go back to the office early on Monday morning. This lasted for four summers, when we finally decided to call a halt to it because we were doing nothing but working all the time.

The Accounts

I began my business with relatively small, easy projects; as we got bigger, we began handling more complex projects. The first big account we landed was because of a friend who knew another friend who knew the chief executive officer of the organization (see, your network connections are important.). The date of our first pitch was set for when I was in Europe. I sent my first employee to Detroit. She was nervous and scared. She won that account; it was a great morale booster for her to pitch and win the account (we had that account for 27 years).

Another big account we won was when a major PR firm arrived at the pitch meeting with several people, including its chief executive officer. But that CEO left the meeting well before it was over. The client’s decision maker was furious that the CEO cared so little about the account. We won that account—one that was instrumental in growing our business. Years later, a third account we won was an international organization that chose us because of the international network of firms we had joined. We already had a good track record and, with a good international network, we beat out a worldwide firm to win this client. This account is still with my former firm.

The Clients We Lost

Chemistry was great for all three accounts, but no matter how good the chemistry, we lost a few potential clients, too. To try to find out what we could do better to win such accounts, we hired a management consultant. He told us coming in second was just as bad as coming in ninth, so he contacted the accounts we lost and asked why. What I learned was that I had to stop making all the pitches myself; that I should not sound so dictatorial when I recommended programs; and that our firm should learn more about a prospective client before making the pitch.

Enough About Me

So what do you need to do to start a business?

The foundation is your overwhelming desire to start your own business and your strong work ethic. Then you need an idea or a skill that sets you apart from others in your category. You also need a great network of contacts.

You’ll need office equipment, including a computer and a printer, along with a cell phone and a postage machine and scale. (Of course, these days internet access is an absolute must.) (See Exhibit 7.1.)

Depending upon the type of company you decide to open, you may need a good friend or spouse who can critique your sales pitch and edit anything you’ve written, an IT specialist to help you set up your computer system, and an inexpensive marketing or ad agency. Can you barter for any of these services?

You also should assemble a group of freelancers and consultants who are in the same business as you to help you during overload times. Don’t hire freelancers who do exactly the same thing as you do, or you will risk losing your clients; you want people who offer services that complement yours. Pay your consultants fairly, in line with the level of service they are providing—maybe the same level as you are.

Exhibit 7.1 Basic things you need to start a service business

It is also an excellent idea to establish an advisory group who can counsel you or give you advice on business strategy and problem-solving.

Continue learning as much as you can. I took one of the first classes in crisis communications. I became an expert. I also joined another organization where I met an environmental engineer. As I mentioned before, I teamed up with his engineering firm and, before I realized it, I had combined my crisis communications expertise with environmental communications. I read a lot and went to lectures given by a guru in the environmental communications arena. From there, I learned community relations, since we had to tell the community what they needed to know about a crisis or an environmental situation. One thing led to another; as my business grew from crisis response to crisis preparedness, the community relations part grew bigger as did spokesperson training. My advice is to keep learning from every situation where you find yourself challenged.

The bottom line is that you should not feel you are “stuck” in a corporate environment, if you dislike it. Go ahead, start your own business. But remember, you will not be a great success overnight. As a business owner, you may not be one of the first people to arrive in the morning, but you will definitely be the last one to leave at night (my husband and I used to joke that the definition of “owner” was the person who turned off the lights and locked the doors at night). You’ll water the plants and keep the office looking neat. You’ll do the entertaining, and make plans to take clients out to dinner. You’ll work with a management consultant on how to grow your business and manage your staff. And you’ll make the lists of birthday and holiday cards to send. You will also be responsible for your company’s newsletter.

You Don’t Have to Do It Alone

Slowly you will grow your business and find that you will not have to do it all alone; at some point, you won’t be able to do it all alone. If they have any interest, consider asking a spouse/partner or a friend to join you.

But be careful not to grow too fast by taking on customers or clients that don’t fit your business model. And don’t invest in a “rich-looking” office, displaying all sorts of technology. Keep the technology out of sight. With a showy office, your clients or prospects may think you are already doing so well that you don’t need their business.

Grow your company big enough so you don’t have to take on all the responsibility yourself (My husband joined me to help run our business by handling the accounting and the technology). Growing a business is not easy, especially when you encounter a recession. I started my business in a recession (I didn’t even realize it at the time), so it was a challenge. We also faced the tech bubble of the late ’90s, followed by 9/11/2001. And then the banking crisis of 2008–2009. There were several recessions in between, so it wasn’t easy. But looking back, we think it was worth it. Keep going, recession or boom. You will have to work harder during a recession but the principles are the same.

Retirement

When you are ready to retire, try to sell your business during a boom time when your sales are higher. Think hard about whether you will retire as soon as you sell your business, or whether you are prepared to stay on with the company under the new owner. If you have a service firm built on your reputation, do your best to groom a successor and build a transition to the new leadership. Put yourself in the background and put your successor out front.

Ask questions of colleagues before you are ready to sell; get a lot of advice. My husband’s legal background, plus information we received from our colleagues at similar companies, helped us to develop a strategy to sell the firm to our senior employee gradually over a period of years. Every two years, we worked one day less each week, but we set our salaries to stay the same over the transition period. Our salaries were based on the sale price, not on our work schedule. That strategy may not work for everyone, but it certainly did for us.

I started a business that lasted 35 years until I retired. Since retirement, my husband and I travel as much as we can. I am the “social” person in our small family, so I have made many friends over the years. Most of them don’t live anywhere near us, but that will just give us an excuse to travel when we want to go see them!