
Two years ago, April McCray, 38, got the feeling it was time to change careers. She’d been helping sell homes for a real estate developer in Palm Springs, California, but the market was fizzling and sales were getting scarce. She and her husband took their savings and started Color Me House, which makes cardboard forts for kids. She talked to us about how she came up with the idea, why they moved in with his parents, and how she got her products into Costco.
Did you quit your job or were you laid off?
My job pretty much quit itself. The builders were letting everyone go. People weren’t closing. I knew in three months there would be nothing left to be made. I’d left the office and was looking for a new place to go, but everywhere I went there was nothing. I knew that I was not a desired commodity any more and I was going to have to recreate yourself…
It might sound obvious, but if you’re running a business, you should aim to bring in revenue that exceeds the costs of running the business. It’s a point that panelists at New York Entrepreneur Week today at Columbia University felt they needed to reiterate, which may indicate that entrepreneurs are losing sight of what’s important in creating a successful business: income that will allow your business to grow.
“It’s a very simple thing to say,” said JP Werlin, Pipeline Deals. “But it runs contrary to what you’re taught in the venture capitalist industry, but – ‘no expenses before revenue,’ it’s a mantra we have internally in our company and it’s helped us get to where we are today.” PipelineDeals, which makes software for salespeople, never raised venture capital, but developed a company structure that allowed it to build slow and scale based on the revenue they brought in – not on spending money raised from investors…
We’re entrepreneurs. We like entrepreneurs. We are especially fond of what we call New Entrepreneurs — the countless people who, having been downsized in the downturn, were inspired to start businesses for the very first time.
Last week we interviewed Lori Chalmers, who started her handbag company, ChaCha, after being laid off from her graphic design job. Her one piece of advice for those looking to follow in her footsteps: Plan, if you can.
Enter David Ronick’s 16 questions…
At the end of 2007, Lori Chalmers was laid off from her main graphic design gig with one day’s notice. Scrambling for income, she took a shot at turning her hobby—designing and making handbags—into a business. The 30-year-old talked to us about how she created her Toronto-based fashion company, Cha Cha, from scratch.
One day?
Well, as a freelance you have no protection, no severance, nothing.
I came home and had locked myself out of my apt. So I was waiting for my landlord, thinking about how I could make some money quickly. I had been making bags for my friends and for myself. It was my one skill…
Brandon Howard and Fisayo Esconsay, both 28, were roommates at the University of Maryland. When the economy took a dive, Esconsay’s law firm, Sullivan & Cromwell, warned associates they should look for other opportunities; Howard, who worked in music marketing for Steve Stoute and Jay-Z, was laid off. In September, they plan to open Recess, a new nightclub located a block from the White House. They talked to Recessionwire about why they’re betting the project can thrive.
Nightclubs are a notoriously fickle business. What makes you think you can pull this off in this economy?
Esconsay: I’ve been promoting events in D.C. this whole time, through the economic downturn. The nightclub business hasn’t realty taken as much of a hit as other businesses. I’m not sure if people are looking for low cost alternative for entertainment or what, but the nightclub business hasn’t missed a beat.
Howard: People have to look at opportunity. In the recession you have people who are trying to move the ball ahead. Those are the people who are going to come out on top…
Even with the sun finally shining, starting the week alone in the city can be a drag. On the first Monday of every month, Meet at the Apartment, an uber-stylish meeting space in Soho, is hosting a day of workshops and hanging out for consultants, freelancers and job hunters.
Throughout the day, there will be interviews with entrepreneurs on how they launched their businesses, and a lesson on networking from One of Those People Who Knows Everybody. They’re throwing in free wifi, coffee, snacks and office supplies. Please don’t embarrass us by walking out with your pockets stuffed full of Post-It pads…
Southern California was a greener, lusher place before the downturn. Homeowners worked to keep their lawns verdant—but with recession came thousands of foreclosures, and acres of brown grass. Last summer, T.J. Davis, who is retired from the fire department, and his brother-in-law, Mike Patino, who had been laid off, saw a news story about a company in drought-plagued Northern California that painted dry lawns using an eco-sensitive dye. In October, they launched Green Genie Lawn Service in Winchester, Calif. Davis talked to Recessionwire about the opportunity they saw in making grass greener for 25 cents a square foot.
What did it take to start this up?
It wasn’t a cheap investment. We spent almost $9,000. We bought a tank for $2,500 and a trailer we got through Craigslist. The dye itself is $99 a gallon and comes in two-and-a-half gallon containers, so if you want to buy several of them, it’s expensive…