Well I did it. Today I mailed off an application today for a 350K loan to start my own business. I don't want to say too much about it right now, so please don't ask (unless you are an angel investor or non-bank financer – in which case you can see a business plan in return for a signed confidentiality agreement). But this should be a fun and educational process, and I'll keep you all posted on what happens from now until we open for business. There probably won't be too much to talk about until I get financing, so in the meantime I'll give you some background on how I got to this point…
I've been interested in owning or running a business for several years now, but given my technical background and interest in artificial intelligence, I always assumed that I would do a tech startup in about 10 years when I had a good corporate background. My wife works for an accounting firm here that manages money for some really wealthy people, and over the last few years I have hob-nobbed with them at parties and talked business and learned quite a bit. I have attended the meetings of a local entrepreneurship group for about 3 years now where I am usually the only guy under 30 (maybe even under 40) in the place. I have also practically stalked some local CEOs, firing off emails, phone calls and letters until they let me buy them lunch and pick their brains. Lastly, I have read just about every business book, periodical, or website that I could find (at least, as much as I could fit into my schedule). I know what I want to do, and I figured learning from other people's experiences would save me a lot of time.
But about a year ago, I grew restless at work. I feel like I am not learning much anymore, and am not given opportunities to grow. I often ask CEOs and other business leaders I meet what I should be doing at this stage in my life, and they usually suggest I get a broad range of experience, particularly in marketing, sales, and management. The trouble is that no one wants to hire a tech guy to do marketing, and my company doesn't really move people across disciplines very much. So I thought maybe I should go out on my own.
My decision was confirmed by others I talked to who told me that if I was a tech guy and invented something, or if I was a CEO while I was still young, once I got some venture capital I would be replaced by someone with more experience. So several people suggested that I run my own business – that even a small business or franchise or whatever would be better experience than project management at a corporate level.
Several other factors came into play too. My wife has a good job, and we have no kids yet, so for the next few years I can probably devote tons of hours to a new venture without drawing a salary and without feeling guilty for ignoring my family. So I took all this in and decided I would think about starting a business.
So I looked at buying an existing business and I looked at franchises and I tossed around some of my own ideas. But I ran into two problems. First, I live in a fairly small town, (about 150K people) so that limits my product demand, and secondly I have no money, well, not the kind of money these franchisors and small business owners and banks want to see. Most require a net worth of 300K and up. Banks want a huge chunk of change as a down payment. Now, I do very very well for someone my age, and I have about 35K, probably more than anyone I know, but not nearly enough to start a business.
Also, I have very strict requirements for a business. I want something in a new and growing market, I want good margins, I want low ongoing capital expenditures, I want pricing power, I want the potential to do really well.
So I finally hooked up with a guy who knew a certain industry but couldn't get a business loan because he had no money and knew nothing about business. I wrote a business plan, did some research, and made some financial projections, then we asked all our family (who have no money), lots of friends, lots of strangers, lots of people and institutions we met on the internet, and lots of people in general for money, and we got turned down several dozen times, but I don't give up easily.
So, we are now going for the much dreaded SBA loan, which I have heard requires a ton of paperwork. If that fails, it is on to other banks, and if that fails, it is on to other angels and non-bank financers who don't live around here.
Whatever happens, I think my days in a large corporation are coming to an end. Some people do very well in that environment, but it is just not my thing. I am sure that I will have some good stories, headaches, and triumphs (I hope!) to share with you over the next few months. If all goes well, I won't have to auction off my Businesspundit domain to the highest bidder, and can keep blogging – which is one thing I enjoy more and more all the time.