Things nobody tells you about starting a business
Flexibility, networking, reserve capital are important
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George C. Ford
When Jeff Quint was launching his first business, LiveWare 5, an education technology startup, with co-founder Bruce Lehrman, he quickly learned there are many things no one tells you before you take the entrepreneurial leap.
“Every problem is ultimately yours,” Quint said. “When you have a job, you have a certain reign of responsibility unless you’re the CEO. In a small business, where you wear so many hats, every problem is yours.
“The people that work for you can leave at the end of the day. You can leave when there are no problems. That’s one of the reasons I feel people should really think twice before starting a business.”
LiveWare 5 later merged into McLeodUSA, and Quint co-founded Involta with Lehrman in 2006. With Lehrman as CEO and Quint as CFO, the data services and storage company enjoyed rapid growth. Involta’s assets include 15 data centers in Iowa and other states.
In their free time, Quint and his wife, Laurie, created a 10-acre vineyard off Highway 965 near Swisher in 2004. Over time, the venture became Cedar Ridge Vineyards and Distillery, the first legal distillery in Iowa since prohibition.
Quint, who left Involta and now is co-proprietor of Cedar Ridge with Laurie, said the couple kept their day jobs to meet their ongoing living expenses as a family while they took on debt to grow their fledgling business.
“If you don’t find the energy to build your business in your spare time, you probably don’t have enough of a passion for that business to do well,” he said. “You will need to grow a business to the point where it can sustain your family and your livelihood. You will never have any extra cash.”
The first generation that starts and builds a business, Quint said, “has to keep putting all the cash back into it. You can’t grow a company without cash.
“Even if you have a profitable company — and we’ve been profitable for a long time — every dime tends to go back into the business. When you level off, you still have the debt and that has your personal guarantee on it.
“You want to get rid of those personal guarantees, so you use the cash to pay down the debt.”
The first year
Al Ruffalo, who led the successful growth of RuffaloCODY and Associates before it merged in 2014 with Noel-Levitz to form Ruffalo Noel Levitz, said many entrepreneurs are unprepared for the challenges they will face in the initial year of operation.
“The first year is going to be rough,” said Ruffalo, now executive chairman of Ruffalo Noel Levitz. “No matter what you think, how bright you are, how good your salespeople or your sales management tools are, you’re probably not going to hit your numbers the first year.
“A business starts slower than you anticipated. You better make sure you have enough cash, so when things don’t go according to plan, you will not have to cut back.
“You can continue to do what you think is important to grow the business. If you don’t have the cash to do that, you will make some bad business decisions.’
When RuffaloCODY was started, he recalled having a cash reserve “that helped us through some rough spots.”
One of the things Heidi Ipsan was unprepared for when starting her business was the myriad of regulations.
“There were far more than I thought was involved and the different hoops that you have to go through,” said Ipsan, owner of the Daisy, a consignment clothing, decor and gift shop in the NewBo District in Cedar Rapids.
A second location will open Sept. 1 in Marion.
“One person approves something and the next person that comes out adds something to the list or says it needs to be done a different way.”
Ipsan said she also was unaware of the amount of work needed to start a business.
“It’s not a 40-hour week or a 9-to-5 job,” she said. “You can’t turn this off. As soon as you open your eyes in the morning, it’s with you.”
Ipsan said you quickly learn that you need to wear a lot of hats.
“You may have started the business because you enjoy a particular aspect of a business, but once you get into it, you have to be the marketing director and also clean the bathroom,” she said. “You need be able to shift gears pretty easily.”
A ‘roller coaster’
When Kellie Sauser and three partners launched the Newbo Shops at 208, two years ago, they learned the value of networking. (Newbo Shops at 208 is in the same building as the Daisy.)
“We had a lot of friends who had started a business by themselves,” Sauser said. “We have been able to bounce ideas off of them as well as each other. It’s really important to get help with creativity.”
Sauser and her partners, Joan Gray, Jennifer Morris and Deb Christensen, have experienced what she calls the “roller coaster” of business highs and lows.
“You have really slow days and busy days,” Sauser said. “ ... You could have a slow day today and a really busy day tomorrow when you will go home really charged up.
“Every day is different.”
While starting a business brings many challenges and sleepless nights that no one tells you about beforehand, Ruffalo said it also can be rewarding.
“It’s a lot of fun,” he said. “Even though it’s 24-by-7 and it’s your life for a good number of years, it’s a lot of fun.”
When Ruffalo started out, no one told him that his goal should be creating careers and not jobs.
“There’s a significant difference between those two things,” he said. “I explain that to new employees.
“I tell them, ‘If you are here for a job, you’re in the wrong place. And if you’re here because you want to know exactly what you’re going to do tomorrow, you are definitely in the wrong place because we are going to move very fast and we’re going to create careers.’”
Ruffalo said how you react to a business downturn can have a significant impact on employee moral.
“If senior management walks around with a gloomy attitude and sourpuss faces, that really transcends into the entire organization,” he said. “If you have some lows, openly talk about it and how you’re going to work through the issue. People will buy into that if you are very open.
“No one told me in advance, but we were very open with our employees. They knew exactly what was going on in the business.”