Bootstrap Business - Getting by as an early stage company

How do needs change for an early stage company as you mature and how can you meet those needs during tough times?

When we launched LeisureLogix, nearly 3 years ago, we were fortunate again to have the Solutionz infrastructure, including a five thousand-square-foot office, phone/computer systems, and administrative support in place, so we didn’t have to go out of pocket as a new business for that.

We were able to get folks to forgo a salary for a time. Eventually we had to take on the burden of a regular payroll, including benefits. To do that we really had to get outside funding, as our own personal resources were dwindling pretty quickly and clearly not going to get us to the finish line. So the final step was finding an investor who would believe in our vision enough to provide sufficient capital resources to pay for those things we couldn’t defer, barter for, or afford on our own out of the resources we had in hand.

During the time it took to secure outside funding, my husband and I had tapped into all of our resources—savings, insurance policies, taking out a second mortgage, and establishing a line of credit on our consulting business. And yes, even our credit cards provided some of the funding. In the end, there was precious little more that we could leverage personally other than the Solutionz office building, which we held onto as long as we could, but eventually had to sell.
Fortunately, the commercial Real Estate market was strong, so we sold for a solid profit.
What we learned during this phase was that it is no accident that banks and financial institutions own the largest buildings in every major city in America. We had no idea then what the consequence of being highly leveraged could be and that all over the country other families and businesses were over-extending themselves right along with us.

We were still a long way from having a revenue stream that would replace what we invested, so were lucky in early 2007 to find a local investor who took the lead on funding the business and moving forward. As a result of his investment, we were able to get caught up on all of our financial obligations and get the product completed and ready for launch.

The scariest part of establishing a new business is that moment when you shift from being able to meet your own needs with what you have and knowing that in order to be able to get to the next level and achieve your original dream, you have to attract external money. That is a precipice that closely resembles stepping out ofa boat and walking on water. There is nothing that prepares you for the things that come in giving up what you perceive to be control of your own destiny.

Stepping out definitely requires faith.

This is an excerpt from Chicke Fitzgerald's new book Bootstrap Business, coming out August 2009.

Resources to start a new endeavor

I was really fortunate that in mid 2006 when I started LeisureLogix I had the consulting experience garnered from 10 years consulting as the Solutionz Group to draw on. Not only did I have the experience, but I also had a group of colleagues/friends who were willing to risk right along side of me in getting the business off the ground. Having trusted allies who are willing to work for equity and to cheer you on during tough times as your true advocates is one of the most important resources that an entrepreneur can have.

Since we were building technology to fill a gap that I had seen in my consulting within the travel industry, the next key ingredient to the plan was to have a launch partner lined up. The alternative is going the “if we build it they will come” route, which only works in the movies and if your name is Kevin Costner. Due to our relationships in the travel industry we were blessed to able to line up a major online travel agency that agreed to put our product on its site once it was built, without seeing so much as the mockups of the screen design.

The next step was finding a technology partner who would work on a fixed price with payment terms that we could live with. It is so easy in a technology project of this magnitude to let scope and your budget spiral out of control once you get started. It’s even easier to miss the total cost of operation beyond the build phase of a project. (More about that in another blog.)

On the funding front, my initial partner and I began by putting in matching funds each month to meet the operating cash requirements, which we continued through the end of 2006. Pretty quickly, however, we realized that we had to find outside capital to make it the whole way. Anyone who has sought external capital during the build phase (also known as “pre-revenue”) of a project knows that it is a very tall order. But at that juncture, it was “do or die.” We had gone too far to turn back.

Excerpt from Bootstrap Business - Available August 2009

When did I know that I was an entrepreneur?

I knew as early as grade school that I had inherited that leadership gene from my dad. I definitely learned and emulated what I observed. In grade school, I was a treasurer in the Girl Scouts and as I entered middle school, I ran for president of the student council in the seventh grade (and won!).

When I was in my first semester of college, I wrote a paper on the value of experience versus education. At Thanksgiving, I went home and convinced my parents to let me quit school at the end of the semester. I jumped right into corporate America, at that point, working for Miller Brewing Company in their accounting department.

Throughout my more than twenty-year corporate career I saw all kinds of signs of my entrepreneurial bent, but didn’t recognize it then for what it was.

I was always more comfortable thinking outside of the box than my corporate peers were, which is why I was singled out for nearly every special project. Normally they began with a concept and a blank sheet of paper. I was in my element! I also felt tremendously stifled by having to make decisions by committee, particularly when I knew that I was capable of weighing the pros and cons independently and arriving at the same answer in a fraction of the time.

Thirteen years ago, I moved out of corporate life and formed my own consulting firm. I knew that I enjoyed project work and it was great to find out what I did quite naturally (and really without a lot of effort) was valuable to other people. It was a perfect first venture, as it did not require any up-front capital. While I spread my entrepreneurial wings, my husband took a safe sales job with a good salary, upside commissions, and health benefits, which gave me the room to grow the business slowly without pressure. One of the shows that I host weekly is titled “Corporate Escape Artists”. That show is a joint venture with Pamela Skillings, the author of Escape from Corporate America and having an exit plan to make the transition from corporate life to your own business is a common theme on our show.

Later, we moved from Atlanta to Tampa and my husband began to work with me, providing all of the administrative support for the company. I didn’t realize it, but when he came to work for me, we moved into Stage Two Entrepreneurialism—no safety net (formerly provided by the spouse’s salary and benefits)!

Three years ago, following ten very successful years in consulting, we had our biggest year ever—forty projects for twenty-five clients. And for the first time ever, we lost money due to the increase in overhead needed as we grew. I was totally burned out, physically and mentally, and ended up having to take three months off to recover from major surgery. While I was off, I realized that I had a lot of great business under my belt and amazing experience but no retirement plan or a way to sell what I had built. It is amazing the reflection that is possible during times like these.

What happened next was the realization that it was time to build something that was lasting so we could sell it, whether it was five or ten years down the road. That was going to take the “I” word—investment. What I really learned was that Stage Three Entrepreneurialism is when you have to master bootstrapping. That is, if you are going to build enough value to get to the end game and retain enough value before you have to take in outside investment. While I thought I had been an entrepreneur for thirteen years, now I say that until you have paid payroll with MasterCard or Visa you can’t really call yourself an entrepreneur.

excerpt from Bootstrap Business, published by Insight Publishing

Are Entrepreneurs born or are they made?

I really believe that you are born with a set of talents and that your environment and the various experiences you have along the way can either allow those talents to blossom or it can stifle them. One example of that, which is critical to entrepreneurialism, is the propensity for risk or, said more plainly, your willingness to try new things where you may not have the appropriate background or all the answers of how to move ahead.

Case in point is my launching a series of Internet radio shows in January, when I had absolutely no broadcasting background and frankly, no idea of the mechanics of doing such a thing. Yet three weeks later, after securing the former CEO of CBS radio, Nancy Widmann, as my first Solutionz Live! guest, I was on the air. Nancy said after our interview that I was a “natural.” Without taking that risk, how would I have known?

I really do see risk-taking as a critical talent for an entrepreneur. With the new media network, I had to just dive right in and do it. I had no choice but to bootstrap it, as this is not the environment to be raising capital on an untried idea with an untested talent. So three weeks from idea to inception, a new, new thing was birthed—a social broadcasting network!

No one who knows me well is surprised. I’ve been accused of being an idea factory. This time I’ve hit on something that is not only necessary, but I’m having a blast.

On the environment issue, I think that we have all seen examples of an entrepreneur, or what used to be called a “self-made man,” trying to force a child to take over the business, only to find out that the child doesn’t have what it takes. Handing over the legacy is just not enough. I think that those fundamental talents have to be there as a base to build upon. Even with the right environment, you can’t shape people into entrepreneurs if they don’t have those key talents, including risk-taking and of course, leadership skills and some creativity.

Excerpt from Bootstrap Business, coming out August 2009

Bootstrap Business being released in August

11JUL09 - Tampa, FL

Chicke Fitzgerald, consultant, keynote speaker and author, has been selected from a nationwide search to be featured in Bootstrap Business; a highly successful book series from Tennessee based Insight Publishing. The book will be released in August.

The book features best-selling authors Tom Hopkins (How to Master the Art of Selling), Jack Canfield (One Minute Manager), and John Christensen (FISH!). Chicke Fitzgerald, Hopkins, Canfield, and Christensen are joined by other well known authors and speakers, each offering time-tested strategies for success in frank and intimate interviews.

As the founder and CEO of Tampa-based Solutionz Group, Chicke Fitzgerald has spent the last 13 years solving business growth challenges for corporations, nurturing early-stage companies and coaching top executives and entrepreneurs around the globe.

With 30+ years in the travel industry, Chicke is a recognized authority on distributions models, whose expert perspective is frequently sought by the investment community and media. Fitzgerald is currently affiliated with the Gerson Lehman Group and has been among the top
advisors for the internationally renowned GLG Expert Network™ to the investment community.

She is also passionate about helping others master the use of technology and social media to foster growth through her Solutionz Media division. Since January of 2009 she has interviewed more than 100 authors and experts on her Solutionz Live! show on BlogTalkRadio.com.

When she is not coaching, speaking or consulting, Chicke enjoys spending time with her family in Tampa, Florida. She also dedicates time, energy and resources to a local organization known as Real Estate Lives, mentoring displaced employees hard hit by the mortgage banking crisis and working with the organization’s leadership to build a similar model for other industries and communities to replicate.

For more information on Chicke Fitzgerald contact:

Chicke Fitzgerald | 813-925-0789 | chicke@solutionz.com

To order your copy of Bootstrap Business, click HERE