Jennifer Gonzales and John Gonzales Story
http://www.procharms.com
Company name: Procharms Inc.
Location: Sacramento, California
Estimated sales: $2.5 million
Description: Sports charm wholesaler
Courting period: When Jennifer Gonzales' husband, John, gave her an Italian charm bracelet for Valentine's Day in 2002, Jennifer--a huge Sacramento Kings fan--searched in vain for a Kings charm before deciding to create one herself. Jennifer visited the Team Store at Arco Arena (home of the Kings) to ask about licensing, and a helpful employee called Kings' co-owner Gavin Maloof and let Jennifer leave a message. She was stunned when Maloof returned her call and directed her to someone at Arco, eventually leading to a $7,000 order.
Sports nut: After talking to local jewelry-makers and suppliers and doing many hours of online research, Jennifer found a company that could manufacture the charms and was a licensee for Major League Baseball, the NBA, NFL, NHL and professional players associations. Jennifer recruited her first rep--a charm-store business owner--and collected a 20 percent deposit from interested charm retailers. The deposit, in addition to maxed-out credit cards, paid for ProCharms' first shipment.
Domestic charm: Jennifer and John set up a work space in their living room and placed shelves on the wall for the charms. "Everyone who knew us thought we were crazy," says Jennifer. But in addition to the advantage of keeping costs low, operating from home also allowed the mother of three to stay close to her children throughout the workday, with the eventual assistance of a nanny. After four months, they moved into a small office and began hiring employees. John handles ordering, inventory and product development, while Jennifer oversees everything as president.
Team spirit: ProCharms now sells to charm retailers, e-tailers and approximately 20 professional sports teams/venues. The company has also done very well expanding into the collegiate sports market, counting 65 college bookstores as customers. New products include a silver-toned, Tiffany-style heart bracelet; cell phone charms; and leather cuff bracelets, all with team logos.
Saturday, March 7, 2009
Friday, March 6, 2009
Homebusiness Millionaires - Laura Dahl
2006 Sales: $1 million
After earning a master's degree at New York City's Fashion Institute of Technology, Dahl worked for couture designers like Anne Bowen, who creates high-ticket beaded sensations with semiprecious stones. On a whim, Dahl bought some beads to adorn her "wife-beater"-a tank-top undershirt. After receiving scores of compliments and gauging the interest of friends who worked for Vogue and In Style, Dahl started Wifebeader with the shirt on her back in 2003.
Dahl created eight different designs with the help of a beader from Anne Bowen. "I'd be on my couch, in front of the TV with a needle and thread," recalls Dahl. After selling out several trunk shows during her research period, Dahl approached boutiques and took orders on every single visit. "They liked that it's all handmade," explains Dahl. "We use the finest stones and beads from all over the world."
When Bloomingdale's picked up her first collection, Dahl wanted to "pop a bottle of champagne and say, 'We've done it--we've captured New York and the country!'" But she's hesitant to say that she's made it. "It's my personality to always want more and not be satisfied."
Dahl has expanded to 12 silhouettes, new fabrics and a customized Build Your Own Beader option. Wifebeaders are carried in 130 boutiques across the U.S., London, Puerto Rico and Paris; Fred Segal bought her fall 2005 collection; and Dahl is the Sundance Film Festival's exclusive gift-bag designer, for which she's launching a higher-end line, Laura Dahl.
After earning a master's degree at New York City's Fashion Institute of Technology, Dahl worked for couture designers like Anne Bowen, who creates high-ticket beaded sensations with semiprecious stones. On a whim, Dahl bought some beads to adorn her "wife-beater"-a tank-top undershirt. After receiving scores of compliments and gauging the interest of friends who worked for Vogue and In Style, Dahl started Wifebeader with the shirt on her back in 2003.
Dahl created eight different designs with the help of a beader from Anne Bowen. "I'd be on my couch, in front of the TV with a needle and thread," recalls Dahl. After selling out several trunk shows during her research period, Dahl approached boutiques and took orders on every single visit. "They liked that it's all handmade," explains Dahl. "We use the finest stones and beads from all over the world."
When Bloomingdale's picked up her first collection, Dahl wanted to "pop a bottle of champagne and say, 'We've done it--we've captured New York and the country!'" But she's hesitant to say that she's made it. "It's my personality to always want more and not be satisfied."
Dahl has expanded to 12 silhouettes, new fabrics and a customized Build Your Own Beader option. Wifebeaders are carried in 130 boutiques across the U.S., London, Puerto Rico and Paris; Fred Segal bought her fall 2005 collection; and Dahl is the Sundance Film Festival's exclusive gift-bag designer, for which she's launching a higher-end line, Laura Dahl.
Thursday, March 5, 2009
Millionaires Who Started Out With Nothing, Part II
Tara Krapes Story
http://www.vesta1.com
Tara Krapes, 33, has a business that made at least $2.5 million in sales by the end of 2004. Not bad, considering she began her company in 2002 with $1,050 from her own savings.
Vesta Executive Housing, based in Cincinnati and named for the Roman goddess of hearth and home, offers executives temporary housing for 30 days or more. Krapes has relationships with 42 top-notch apartment complexes in the area. When a client comes to Vesta, Krapes either has space ready for them, or, more often than not, she has to lease a new apartment for 12 months and hope that after her tenant leaves, she can fill it quickly. She almost always does—she currently has zero vacancies.
It seems impossible that she could have funded this business—with 12 employees and a second office in Lexington, Kentucky—with a paltry grand. Until you learn how she did it.
It helped that Krapes had experience in her field already. All she needed was one customer to begin, she figured. Once she found one, she signed a lease at an upscale apartment complex and paid the first month's rent—$1,050. From then on, whenever she worked with any client, she always asked for the money upfront.
Krapes would invest the money back into her business by purchasing furniture and other necessities for the living quarters or her company. And the more apartments she would rent from a complex, the cheaper the rent and the more revenue her company could pocket.
But most important, by coming up with a formula that allowed her to always get her money first, she says, "We avoided cash flow problems. From that $1,050, we've been able to grow very fast. We've never had any debt or loans." Krapes quickly took on two partners, Paul Pelnar, 39, and Joel Makela, 30, friends and colleagues who both had experience that she didn't. They were also able to contribute some other items, like computer equipment, but no money.
"Eighty-five percent of people get their money from savings or the three F's: family, friends and fools," says Sutton Landry, director of Northern Kentucky University's Small Business Development Center in Highland Heights, Kentucky. "For the [others], some kind of bank loan is involved. Very few people get VC funding or angel funding."
If you're wondering what the "slam-dunk qualifications" are for getting a big bank loan, Landry reels some of them off: "Typically, it's someone who is between the ages of 35 and 50, college-educated, and who has a net worth of a quarter of a million dollars—plus a Beacon [credit] score of 700-plus—with a business plan. It almost doesn't matter how good the business plan is, as long as they have one. Ideally, they're going into a business where they have five to 10 years of experience—half of it in management. Most banks will look at that type of profile, do the credit scoring, and say 'Yeah, these people would rather die than not pay a loan back.'"
But what if you're 26, utterly broke, and wishing you had gotten an MBA instead of a degree in American folklore? Landry says if your credit is halfway decent, you might be able to find somebody to cosign a loan—and "you'll need a business plan, a good business plan," he says.
Beyond that, you're simply going to have to rely on that can-do spirit. "Starting your own business involves sacrifice," says Landry. "Unfortunately, we're not a society that's much interested in sacrifice. But on a practical side, that's how most startup businesses begin. They start part time, and they're constantly re-investing money into the business. It's the same model that a lot of immigrants have when they come to this country, where people work three jobs to build the savings they need. But instead of getting a second job, you're running your business in the evenings and on weekends."
Krapes echoes that thought. She had one serious cash crunch when she discovered how few people need housing during the end-of-the-year holidays: "We didn't pay ourselves for a few months."
http://www.vesta1.com
Tara Krapes, 33, has a business that made at least $2.5 million in sales by the end of 2004. Not bad, considering she began her company in 2002 with $1,050 from her own savings.
Vesta Executive Housing, based in Cincinnati and named for the Roman goddess of hearth and home, offers executives temporary housing for 30 days or more. Krapes has relationships with 42 top-notch apartment complexes in the area. When a client comes to Vesta, Krapes either has space ready for them, or, more often than not, she has to lease a new apartment for 12 months and hope that after her tenant leaves, she can fill it quickly. She almost always does—she currently has zero vacancies.
It seems impossible that she could have funded this business—with 12 employees and a second office in Lexington, Kentucky—with a paltry grand. Until you learn how she did it.
It helped that Krapes had experience in her field already. All she needed was one customer to begin, she figured. Once she found one, she signed a lease at an upscale apartment complex and paid the first month's rent—$1,050. From then on, whenever she worked with any client, she always asked for the money upfront.
Krapes would invest the money back into her business by purchasing furniture and other necessities for the living quarters or her company. And the more apartments she would rent from a complex, the cheaper the rent and the more revenue her company could pocket.
But most important, by coming up with a formula that allowed her to always get her money first, she says, "We avoided cash flow problems. From that $1,050, we've been able to grow very fast. We've never had any debt or loans." Krapes quickly took on two partners, Paul Pelnar, 39, and Joel Makela, 30, friends and colleagues who both had experience that she didn't. They were also able to contribute some other items, like computer equipment, but no money.
"Eighty-five percent of people get their money from savings or the three F's: family, friends and fools," says Sutton Landry, director of Northern Kentucky University's Small Business Development Center in Highland Heights, Kentucky. "For the [others], some kind of bank loan is involved. Very few people get VC funding or angel funding."
If you're wondering what the "slam-dunk qualifications" are for getting a big bank loan, Landry reels some of them off: "Typically, it's someone who is between the ages of 35 and 50, college-educated, and who has a net worth of a quarter of a million dollars—plus a Beacon [credit] score of 700-plus—with a business plan. It almost doesn't matter how good the business plan is, as long as they have one. Ideally, they're going into a business where they have five to 10 years of experience—half of it in management. Most banks will look at that type of profile, do the credit scoring, and say 'Yeah, these people would rather die than not pay a loan back.'"
But what if you're 26, utterly broke, and wishing you had gotten an MBA instead of a degree in American folklore? Landry says if your credit is halfway decent, you might be able to find somebody to cosign a loan—and "you'll need a business plan, a good business plan," he says.
Beyond that, you're simply going to have to rely on that can-do spirit. "Starting your own business involves sacrifice," says Landry. "Unfortunately, we're not a society that's much interested in sacrifice. But on a practical side, that's how most startup businesses begin. They start part time, and they're constantly re-investing money into the business. It's the same model that a lot of immigrants have when they come to this country, where people work three jobs to build the savings they need. But instead of getting a second job, you're running your business in the evenings and on weekends."
Krapes echoes that thought. She had one serious cash crunch when she discovered how few people need housing during the end-of-the-year holidays: "We didn't pay ourselves for a few months."
Wednesday, March 4, 2009
Millionaires Who Started With Nothing, Part I
Sanjay Parekh and Rob Friedman story
http://www.digitalenvoy.net/
Believe it or not, IP intelligence technology provider Digital Envoy Inc. was spawned from two serious sweet-tooths. Sanjay Parekh, 31, started buying candy from Costco and reselling it to his telecom co-workers when he struck up a friendship with Rob Friedman, 38, general counsel at the company and an Atomic Fireball enthusiast. Soon, their friendship moved beyond candy cravings, and they were bouncing around business ideas.
Parekh made an interesting discovery when visiting the FedEx and Ikea websites in 1999: both prompted him to enter what country he was in. "I thought that was kind of stupid," he recalls, and the extra step slowed down his home dial-up session. "So I architected a solution to that problem using IP addresses." Friedman agreed that the technology--which provides general information about an online user, such as the city, local demographics and type of internet connection being used, based only on the IP address--would help businesses. They launched Digital Envoy Inc. in 1999, bringing along senior finance manager and co-worker Dennis Maicon, 40.
Filing fees for corporate documents cost $100, and Friedman drew up all the legal drafts. An article on the Red Herring website about their business led to their very first client, Advertising.com (now owned by AOL). Since they worked from their homes, Friedman quips, "I negotiated that deal in my bedroom." They also hired an intern and Friedman's cousin to do programming work in the beginning.
After moving into an office in 2000, they hired three more employees. Friedman found $10 chairs, and opted for modular desk setups rather than expensive cubicles. In their newest office, they have cubicles, bought inexpensively from the office's previous tenant. When it comes to traveling to trade shows and to see customers, they've also found ways to save their Norcross, Georgia, company money, using slightly out-of-the-way but much cheaper flight options.
Digital Envoy now works with many major ad networks and sites, and estimates last year sales at less than $10 million. The company's latest product, IP Inspector Fraud Analyst, allows companies to fight identity fraud by verifying user identity in real time. They are also combating fraud with a product that analyzes whether an e-mail is really a phishing attack. Digital Envoy continues to grow, but in many ways remains the same. Says Parekh, "One of the philosophies we've always had is to do more with less people."
Come back tomorrow for part II
http://www.digitalenvoy.net/
Believe it or not, IP intelligence technology provider Digital Envoy Inc. was spawned from two serious sweet-tooths. Sanjay Parekh, 31, started buying candy from Costco and reselling it to his telecom co-workers when he struck up a friendship with Rob Friedman, 38, general counsel at the company and an Atomic Fireball enthusiast. Soon, their friendship moved beyond candy cravings, and they were bouncing around business ideas.
Parekh made an interesting discovery when visiting the FedEx and Ikea websites in 1999: both prompted him to enter what country he was in. "I thought that was kind of stupid," he recalls, and the extra step slowed down his home dial-up session. "So I architected a solution to that problem using IP addresses." Friedman agreed that the technology--which provides general information about an online user, such as the city, local demographics and type of internet connection being used, based only on the IP address--would help businesses. They launched Digital Envoy Inc. in 1999, bringing along senior finance manager and co-worker Dennis Maicon, 40.
Filing fees for corporate documents cost $100, and Friedman drew up all the legal drafts. An article on the Red Herring website about their business led to their very first client, Advertising.com (now owned by AOL). Since they worked from their homes, Friedman quips, "I negotiated that deal in my bedroom." They also hired an intern and Friedman's cousin to do programming work in the beginning.
After moving into an office in 2000, they hired three more employees. Friedman found $10 chairs, and opted for modular desk setups rather than expensive cubicles. In their newest office, they have cubicles, bought inexpensively from the office's previous tenant. When it comes to traveling to trade shows and to see customers, they've also found ways to save their Norcross, Georgia, company money, using slightly out-of-the-way but much cheaper flight options.
Digital Envoy now works with many major ad networks and sites, and estimates last year sales at less than $10 million. The company's latest product, IP Inspector Fraud Analyst, allows companies to fight identity fraud by verifying user identity in real time. They are also combating fraud with a product that analyzes whether an e-mail is really a phishing attack. Digital Envoy continues to grow, but in many ways remains the same. Says Parekh, "One of the philosophies we've always had is to do more with less people."
Come back tomorrow for part II
Tuesday, March 3, 2009
Doctor Makes $25 Millions Selling ... Toothbrushes
Puneet Nanda Story
http://www.drfresh.com
Puneet Nanda was like many parents: He couldn't get his five-year-old daughter to brush her teeth properly. But unlike most parents, Nanda is a toothbrush manufacturer with an irrepressible entrepreneurial drive. Knowing that his daughter was fascinated by her sneakers with flashing lights, he ripped the lights out of her shoes and put them on a toothbrush. That didn't work, so "I went to Disneyland that evening and bought everything that lit up," says Nanda, now 38. The second prototype was more successful. His daughter brushed for a good two minutes before asking: "Dad, will this ever stop, or should I brush my teeth off?"
Bingo. Nanda added a timer so the light would blink for exactly a minute, and the Fire Fly toothbrush was born. The brightly colored Fire Fly -- the newest version sports a see-through handle showing off a tiny toy and a bunch of floating glitter -- is making a name for Dr. Fresh, Nanda's Buena Park (Calif.) company and his medical school nickname. In 2004, Nanda got the original Fire Fly into Target, and by 2005 it was bringing in 20% of the 50-employee company's $25 million revenues.
Nanda, who holds 58 patents, is seizing on the success of the Fire Fly to create other dental products with flashing lights. "I'm building brand equity," says Nanda. "If I have to do something I have to do it the best." He already has a foothold with more conventional wares, such as private-label dental floss sold nationally in Walgreens and Target stores.
Nanda's path to dental success hasn't been easy. The New Delhi native left medical school to join the family toothbrush business in 1989, after his father had a heart attack. Two years later he began hawking toothbrushes to Russians who'd come to India looking for products to sell back home. Nanda moved to Russia in 1993, leaving his wife and son in India and selling toothbrushes out of a warehouse. He soon felt unsafe doing a cash business in Russia and returned to India for 18 months before heading to New York. Having little luck in New York, he tried Los Angeles, where he landed a $180,000 contract with a 99 cents store. "I'd never seen that big of a deal," says Nanda, who then moved his family to L.A.
Nanda knew he needed something clever to grow in an industry dominated by heavyweights such as Colgate-Palmolive and Procter & Gamble. The Fire Fly may do the trick. It initially flopped at Walgreens, so Nanda began selling it directly to dentists he met at conferences. "The flashing light encourages kids to brush a little longer," says San Francisco pediatric dentist Bergen James, who gives it to her patients. "It gets children to brush, and it gets them excited about it."
The positive feedback from dentists encouraged Nanda to recommit to direct sales. He hired 40 women in India to call dental offices in the U.S. and pitch the Fire Fly. And he kept knocking at Target's door, a company he'd been pitching since 2001. Once Target took it, Walgreens was willing to give the Fire Fly another try.
Nanda now spends more than half his time ginning up new ideas. Next up: mouthwash and toothpaste with kid-friendly add-ons. If all goes well, that may turn Dr. Fresh into a big company with a lot of flash.
http://www.drfresh.com
Puneet Nanda was like many parents: He couldn't get his five-year-old daughter to brush her teeth properly. But unlike most parents, Nanda is a toothbrush manufacturer with an irrepressible entrepreneurial drive. Knowing that his daughter was fascinated by her sneakers with flashing lights, he ripped the lights out of her shoes and put them on a toothbrush. That didn't work, so "I went to Disneyland that evening and bought everything that lit up," says Nanda, now 38. The second prototype was more successful. His daughter brushed for a good two minutes before asking: "Dad, will this ever stop, or should I brush my teeth off?"
Bingo. Nanda added a timer so the light would blink for exactly a minute, and the Fire Fly toothbrush was born. The brightly colored Fire Fly -- the newest version sports a see-through handle showing off a tiny toy and a bunch of floating glitter -- is making a name for Dr. Fresh, Nanda's Buena Park (Calif.) company and his medical school nickname. In 2004, Nanda got the original Fire Fly into Target, and by 2005 it was bringing in 20% of the 50-employee company's $25 million revenues.
Nanda, who holds 58 patents, is seizing on the success of the Fire Fly to create other dental products with flashing lights. "I'm building brand equity," says Nanda. "If I have to do something I have to do it the best." He already has a foothold with more conventional wares, such as private-label dental floss sold nationally in Walgreens and Target stores.
Nanda's path to dental success hasn't been easy. The New Delhi native left medical school to join the family toothbrush business in 1989, after his father had a heart attack. Two years later he began hawking toothbrushes to Russians who'd come to India looking for products to sell back home. Nanda moved to Russia in 1993, leaving his wife and son in India and selling toothbrushes out of a warehouse. He soon felt unsafe doing a cash business in Russia and returned to India for 18 months before heading to New York. Having little luck in New York, he tried Los Angeles, where he landed a $180,000 contract with a 99 cents store. "I'd never seen that big of a deal," says Nanda, who then moved his family to L.A.
Nanda knew he needed something clever to grow in an industry dominated by heavyweights such as Colgate-Palmolive and Procter & Gamble. The Fire Fly may do the trick. It initially flopped at Walgreens, so Nanda began selling it directly to dentists he met at conferences. "The flashing light encourages kids to brush a little longer," says San Francisco pediatric dentist Bergen James, who gives it to her patients. "It gets children to brush, and it gets them excited about it."
The positive feedback from dentists encouraged Nanda to recommit to direct sales. He hired 40 women in India to call dental offices in the U.S. and pitch the Fire Fly. And he kept knocking at Target's door, a company he'd been pitching since 2001. Once Target took it, Walgreens was willing to give the Fire Fly another try.
Nanda now spends more than half his time ginning up new ideas. Next up: mouthwash and toothpaste with kid-friendly add-ons. If all goes well, that may turn Dr. Fresh into a big company with a lot of flash.
Monday, March 2, 2009
A Billionaire Junk Man?
Brian Scudamore Story
http://www.1800gotjunk.com/
IT was a misty Thursday in the suburbs of this sprawling city, and inside a recently vacated house, Austin Atkins and Stefan Meissner were up to their elbows in junk.
The detritus was the usual: ratty couches, empty paint cans, old mattresses. In a closet sat a dusty upright piano. Out back, in the weeds, lay a rusted hydraulic car jack.
Mr. Atkins, however, was undaunted. "Time to clean up," he said. Over the next 90 minutes, the cleanly uniformed duo grunted and grimaced as they carted every ounce of junk out to their flatbed truck. When they were finished, they toweled off, shook hands with the real estate broker who hired them, accepted payment and headed for the dump.
The routine was typical for this tag-team of Mr. Cleans, junk haulers from the local franchise of 1-800-GOT-JUNK ?, a company based in Vancouver, British Columbia, that has jazzed up the traditionally impersonal act of carting away trash.
Since it was founded 17 years ago, the company has grown from a sole proprietorship in Vancouver to an international corporation that expects revenues of $120 million this year.
The secrets to this success are uniformed haulers, shiny Isuzu trucks and service with a smile. While most carting companies send scruffy men to retrieve refuse from the curb, 1-800-GOT-JUNK ? sends haulers right into customers' homes, removing not only the trash but also clean up when they're done.
For Cameron Herold, the company's chief operating officer, the approach is nothing short of revolutionary. "We've done for garbage what Starbucks did for coffee," he said, noting that most of the company's franchises charge a flat $500 per truckload, which includes gas, labor and dump fees. (There are smaller fees for one-quarter and one-half of a truckload.) "We think of ourselves as the FedEx of junk."
But there's more to this story than a bold brand. As many small businesses are turning to angel investors or venture capitalists for help, 1-800-GOT-JUNK ? has done it alone, bootstrapping the business exclusively on cash flow, and sharing 25 percent of profits with employees through a bonus program.
The company has also built itself around technology, centralizing call-center operations and dispatching new orders through a proprietary Web-based processing system that will soon use Global Positioning System data for better service.
"When a customer calls, we want to be able to get to their junk and remove it as quickly as possible," said Brian Scudamore, the company's founder and chief executive. "Once you've decided to get rid of this stuff, you really don't want it lying around."
Like many small businesses, 1-800-GOT-JUNK ? was born on a whim and youthful enthusiasm.
Back in 1989, Mr. Scudamore was waiting for food in a McDonald's drive-through when he spotted a pickup truck with the words "Mark's Hauling" on the side.
"I looked at the truck and said, 'Now there's an idea,' " he remembered, noting that he was a freshman at the University of British Columbia at the time. "I needed a way to pay for college, and I thought hauling junk was a good choice."
Mr. Scudamore acted immediately, shelling out $700 for a 1976 Ford F-100 pickup, and distributing fliers to spread word that he was the new hauler in town.
Slowly, gigs trickled in. The first year, he earned $1,700; the next year, he broke into five digits. By 1993, the business was taking so much of his time that Mr. Scudamore dropped out of school altogether.
Later that year, he bought two new trucks, and pulled in $100,000. By 1995, the company earned $525,000. Business was booming, yet Mr. Scudamore began to grow wary of complacency.
He dealt with those anxieties by reinventing his company under a franchise strategy, beginning with a pilot in nearby Victoria. When that office teamed with headquarters to top $1 million in revenue in 1997, Mr. Scudamore realized he was on to something. In 1999, he sold another franchise, to an entrepreneur in Toronto.
"By relying on franchise owners to come in and share some of the risk, I realized I could expand the firm without having to turn to outside investors or other funding sources," Mr. Scudamore said. "To me, this was a solid plan for growth."
In 2000, the same year that Mr. Scudamore hired Mr. Herold, 1-800-GOT-JUNK ? dipped into the United States. The first franchise sprouted in Portland, Ore.; shortly thereafter, some friends from Canada opened a franchise in San Francisco.
Since then, the company has grown like a pack rat's National Geographic collection, blossoming into 40 franchises by 2002 and 214 by 2005. Last month, 1-800-GOT-JUNK ? opened its 242nd franchise, in Spokane, Wash. It recently opened a franchise in Sydney, Australia, and will open one in Birmingham, England, this summer.
Many of these franchise owners are thriving. Alan Remer, owner of the company's outpost in Philadelphia, paid $28,000 for his franchise in 2002. Last year, the enterprise earned $900,000, and he predicts it will earn $1.5 million this year.
"I honestly believe I have bought into McDonald's in the 1960's," said Mr. Remer, who retired as a Wall Street stockbroker after the terror attacks of Sept. 11, 2001. "People want their basements back, and we're the cheapest way to create space in a home."
The haulers, too, are sharing in the success. Each truck tandem receives credit for the money it brings in, and profit sharing is tied to a bonus program for the peak performers. Mr. Herold said that the company gave its top workers bonuses of 17.4 percent last year.
Smaller rewards are offered as well, like items that seem too good to wind up in a dump or a recycling center. At the house that Mr. Atkins and Mr. Meissner were cleaning out in San Jose, the spoils included a BMX bike.
Mr. Scudamore expects 1-800-GOT-JUNK ? to become a $1 billion company by 2012. To help achieve that, the company will invest millions in JunkNet, its centralized Web-based system that is used to dispatch orders from Vancouver to franchise owners. Currently, franchise owners must call to keep up with truck locations. But by September, Mr. Scudamore says, the company will begin using G.P.S. in many trucks, enabling dispatchers to send new orders right to the trucks based on where they are.
"The new technology won't only make us more responsive to our customers, but it also will make scheduling easier for our franchise partners," he said. "When's the last time you heard a junk company say something like that?"
http://www.1800gotjunk.com/
IT was a misty Thursday in the suburbs of this sprawling city, and inside a recently vacated house, Austin Atkins and Stefan Meissner were up to their elbows in junk.
The detritus was the usual: ratty couches, empty paint cans, old mattresses. In a closet sat a dusty upright piano. Out back, in the weeds, lay a rusted hydraulic car jack.
Mr. Atkins, however, was undaunted. "Time to clean up," he said. Over the next 90 minutes, the cleanly uniformed duo grunted and grimaced as they carted every ounce of junk out to their flatbed truck. When they were finished, they toweled off, shook hands with the real estate broker who hired them, accepted payment and headed for the dump.
The routine was typical for this tag-team of Mr. Cleans, junk haulers from the local franchise of 1-800-GOT-JUNK ?, a company based in Vancouver, British Columbia, that has jazzed up the traditionally impersonal act of carting away trash.
Since it was founded 17 years ago, the company has grown from a sole proprietorship in Vancouver to an international corporation that expects revenues of $120 million this year.
The secrets to this success are uniformed haulers, shiny Isuzu trucks and service with a smile. While most carting companies send scruffy men to retrieve refuse from the curb, 1-800-GOT-JUNK ? sends haulers right into customers' homes, removing not only the trash but also clean up when they're done.
For Cameron Herold, the company's chief operating officer, the approach is nothing short of revolutionary. "We've done for garbage what Starbucks did for coffee," he said, noting that most of the company's franchises charge a flat $500 per truckload, which includes gas, labor and dump fees. (There are smaller fees for one-quarter and one-half of a truckload.) "We think of ourselves as the FedEx of junk."
But there's more to this story than a bold brand. As many small businesses are turning to angel investors or venture capitalists for help, 1-800-GOT-JUNK ? has done it alone, bootstrapping the business exclusively on cash flow, and sharing 25 percent of profits with employees through a bonus program.
The company has also built itself around technology, centralizing call-center operations and dispatching new orders through a proprietary Web-based processing system that will soon use Global Positioning System data for better service.
"When a customer calls, we want to be able to get to their junk and remove it as quickly as possible," said Brian Scudamore, the company's founder and chief executive. "Once you've decided to get rid of this stuff, you really don't want it lying around."
Like many small businesses, 1-800-GOT-JUNK ? was born on a whim and youthful enthusiasm.
Back in 1989, Mr. Scudamore was waiting for food in a McDonald's drive-through when he spotted a pickup truck with the words "Mark's Hauling" on the side.
"I looked at the truck and said, 'Now there's an idea,' " he remembered, noting that he was a freshman at the University of British Columbia at the time. "I needed a way to pay for college, and I thought hauling junk was a good choice."
Mr. Scudamore acted immediately, shelling out $700 for a 1976 Ford F-100 pickup, and distributing fliers to spread word that he was the new hauler in town.
Slowly, gigs trickled in. The first year, he earned $1,700; the next year, he broke into five digits. By 1993, the business was taking so much of his time that Mr. Scudamore dropped out of school altogether.
Later that year, he bought two new trucks, and pulled in $100,000. By 1995, the company earned $525,000. Business was booming, yet Mr. Scudamore began to grow wary of complacency.
He dealt with those anxieties by reinventing his company under a franchise strategy, beginning with a pilot in nearby Victoria. When that office teamed with headquarters to top $1 million in revenue in 1997, Mr. Scudamore realized he was on to something. In 1999, he sold another franchise, to an entrepreneur in Toronto.
"By relying on franchise owners to come in and share some of the risk, I realized I could expand the firm without having to turn to outside investors or other funding sources," Mr. Scudamore said. "To me, this was a solid plan for growth."
In 2000, the same year that Mr. Scudamore hired Mr. Herold, 1-800-GOT-JUNK ? dipped into the United States. The first franchise sprouted in Portland, Ore.; shortly thereafter, some friends from Canada opened a franchise in San Francisco.
Since then, the company has grown like a pack rat's National Geographic collection, blossoming into 40 franchises by 2002 and 214 by 2005. Last month, 1-800-GOT-JUNK ? opened its 242nd franchise, in Spokane, Wash. It recently opened a franchise in Sydney, Australia, and will open one in Birmingham, England, this summer.
Many of these franchise owners are thriving. Alan Remer, owner of the company's outpost in Philadelphia, paid $28,000 for his franchise in 2002. Last year, the enterprise earned $900,000, and he predicts it will earn $1.5 million this year.
"I honestly believe I have bought into McDonald's in the 1960's," said Mr. Remer, who retired as a Wall Street stockbroker after the terror attacks of Sept. 11, 2001. "People want their basements back, and we're the cheapest way to create space in a home."
The haulers, too, are sharing in the success. Each truck tandem receives credit for the money it brings in, and profit sharing is tied to a bonus program for the peak performers. Mr. Herold said that the company gave its top workers bonuses of 17.4 percent last year.
Smaller rewards are offered as well, like items that seem too good to wind up in a dump or a recycling center. At the house that Mr. Atkins and Mr. Meissner were cleaning out in San Jose, the spoils included a BMX bike.
Mr. Scudamore expects 1-800-GOT-JUNK ? to become a $1 billion company by 2012. To help achieve that, the company will invest millions in JunkNet, its centralized Web-based system that is used to dispatch orders from Vancouver to franchise owners. Currently, franchise owners must call to keep up with truck locations. But by September, Mr. Scudamore says, the company will begin using G.P.S. in many trucks, enabling dispatchers to send new orders right to the trucks based on where they are.
"The new technology won't only make us more responsive to our customers, but it also will make scheduling easier for our franchise partners," he said. "When's the last time you heard a junk company say something like that?"
Sunday, March 1, 2009
Thinking Small Can Make You Rich
Mike Cayelli Story
http://cuff-daddy.com/
Think small. That was the basic starting point for Mike Cayelli when he decided to open an online retail business two years ago. With a tiny house, little capital to invest, and only "spare time" to devote to the project, Cayelli knew his big dream had to stay manageable. The Washington (D.C.) entrepreneur still hasn't quit his day job, but he's projecting $500,000 in sales this year for his company, Cuff Daddy.
You have a full-time job. Why start your own company?
About two years ago, I was working for [a hardware chain] as a manager in the regional professional contractor division. I still work there, in fact. But there was some reorganization going on, and I became concerned about my future. So I wanted to hedge my bets by starting my own company.
How did you settle on becoming an online retailer?
I wanted to emulate my cousin, who's been enormously successful selling mobile phone accessories online. He imports products from Asia and realizes a substantial profit margin. I also wanted to do something purely on the Internet so I could keep working at my "real job" and develop the company in my spare time.
Your major concern was finding a niche product that was physically small. Why?
Well, we had a small house that I planned to use as headquarters. So I needed inventory that I could store in a footlocker, have my wife ship out of a home office, and haul around in a car instead of a truck or trailer. As for shipping, about 90% of our orders can be mailed first-class with two stamps in a .13-cent padded envelope.
How did you settle on cuff links?
It was not easy. I spent several months looking at things like buttons, watchbands, shoe laces, and collar stays. Every time I thought of a small, niche product I'd write it down on a scrap of paper and shove it into my pocket to research later.
I wanted a product that could produce high sales volume and a high profit margin. I didn't want something that sold one unit per week. So when I got an interesting idea, I would search for it on eBay and run it through a research tool called Andale. For $7.95 a month, you subscribe to this Web site and you can get diagnostic information about any product's online sales volume and average selling price.
One morning about 6 a.m., I stumbled onto some cuff links for sale on eBay and noticed there was tremendous action on that listing. I ran upstairs and woke up my wife and told her I'd found the right product.
Once you zeroed in on a product, you had to find suppliers. What was that process like?
Again, I went to the Internet. I found two great places that help you source products overseas. One is Global Sources, and the other is called Alibaba.
I looked through thousands of vendors that are listed on these sites, found products I was interested in, e-mailed the manufacturers, and got them to send me samples. I never even had to pick up the phone.
When I put the first samples up for sale at eBay and they sold extremely quickly, I knew I was onto something. We wound up with six regular vendors based in China, Hong Kong, and India that provide us with a product line that we buy for between $1 and $6 a pair and sell for $15 to $55 a pair.
How much money did it take to start the company?
We started very small with a $500 investment, though it felt like a lot because I was worried about losing my job, and my wife was home taking care of our two little boys. We used that money to buy 100 pairs of cuff links. The minute I felt comfortable that they'd all sell, and we could reinvest the money we made, we doubled that order. Sales were quick right from the start, so we started adding more products pretty fast.
What about the cost of establishing a Web site or online store?
We didn't do that right away. For the first nine month, we sold strictly through a store we set up on eBay. We wanted to have minimal startup costs, and we only had five products. With that small a product line, if you open a Web site you're going to look like a joke.
By the time we were selling about 50 items, we figured we were ready to establish our own Web site. We outsourced the development to a friend who charged us $500. We host it on Yahoo!Stores because they have virtually no down time, it's easy to use, and they offer good metrics, so I can analyze things like who is buying our products and who are our repeat customers. I can also see how well things like coupon promotions work.
What's been the toughest part for you?
The marketing is really hard, and I still haven't gotten good at it. I could have a cure for cancer, and nobody would know about it because it's very, very difficult to get the word out. We've paid people to do search engine optimization for us, but it hasn't really helped.
We got completely burned once by a salesman who took us for $1,000 for a marketing product that was useless. We are doing some pay-per-click campaigns with Google and Yahoo! now that seem to be working a bit better, and we're also going to start an e-mail marketing campaign, so we'll see how that goes. But overall, I was surprised by how much the barriers for starting a company have come down. I was lucky that my cousin shared his recipe for success with me, and now I'm trying to do the same thing. I'm mentoring a guy I work with who's also starting a company thinking small: He's selling fishing lures.
http://cuff-daddy.com/
Think small. That was the basic starting point for Mike Cayelli when he decided to open an online retail business two years ago. With a tiny house, little capital to invest, and only "spare time" to devote to the project, Cayelli knew his big dream had to stay manageable. The Washington (D.C.) entrepreneur still hasn't quit his day job, but he's projecting $500,000 in sales this year for his company, Cuff Daddy.
You have a full-time job. Why start your own company?
About two years ago, I was working for [a hardware chain] as a manager in the regional professional contractor division. I still work there, in fact. But there was some reorganization going on, and I became concerned about my future. So I wanted to hedge my bets by starting my own company.
How did you settle on becoming an online retailer?
I wanted to emulate my cousin, who's been enormously successful selling mobile phone accessories online. He imports products from Asia and realizes a substantial profit margin. I also wanted to do something purely on the Internet so I could keep working at my "real job" and develop the company in my spare time.
Your major concern was finding a niche product that was physically small. Why?
Well, we had a small house that I planned to use as headquarters. So I needed inventory that I could store in a footlocker, have my wife ship out of a home office, and haul around in a car instead of a truck or trailer. As for shipping, about 90% of our orders can be mailed first-class with two stamps in a .13-cent padded envelope.
How did you settle on cuff links?
It was not easy. I spent several months looking at things like buttons, watchbands, shoe laces, and collar stays. Every time I thought of a small, niche product I'd write it down on a scrap of paper and shove it into my pocket to research later.
I wanted a product that could produce high sales volume and a high profit margin. I didn't want something that sold one unit per week. So when I got an interesting idea, I would search for it on eBay and run it through a research tool called Andale. For $7.95 a month, you subscribe to this Web site and you can get diagnostic information about any product's online sales volume and average selling price.
One morning about 6 a.m., I stumbled onto some cuff links for sale on eBay and noticed there was tremendous action on that listing. I ran upstairs and woke up my wife and told her I'd found the right product.
Once you zeroed in on a product, you had to find suppliers. What was that process like?
Again, I went to the Internet. I found two great places that help you source products overseas. One is Global Sources, and the other is called Alibaba.
I looked through thousands of vendors that are listed on these sites, found products I was interested in, e-mailed the manufacturers, and got them to send me samples. I never even had to pick up the phone.
When I put the first samples up for sale at eBay and they sold extremely quickly, I knew I was onto something. We wound up with six regular vendors based in China, Hong Kong, and India that provide us with a product line that we buy for between $1 and $6 a pair and sell for $15 to $55 a pair.
How much money did it take to start the company?
We started very small with a $500 investment, though it felt like a lot because I was worried about losing my job, and my wife was home taking care of our two little boys. We used that money to buy 100 pairs of cuff links. The minute I felt comfortable that they'd all sell, and we could reinvest the money we made, we doubled that order. Sales were quick right from the start, so we started adding more products pretty fast.
What about the cost of establishing a Web site or online store?
We didn't do that right away. For the first nine month, we sold strictly through a store we set up on eBay. We wanted to have minimal startup costs, and we only had five products. With that small a product line, if you open a Web site you're going to look like a joke.
By the time we were selling about 50 items, we figured we were ready to establish our own Web site. We outsourced the development to a friend who charged us $500. We host it on Yahoo!Stores because they have virtually no down time, it's easy to use, and they offer good metrics, so I can analyze things like who is buying our products and who are our repeat customers. I can also see how well things like coupon promotions work.
What's been the toughest part for you?
The marketing is really hard, and I still haven't gotten good at it. I could have a cure for cancer, and nobody would know about it because it's very, very difficult to get the word out. We've paid people to do search engine optimization for us, but it hasn't really helped.
We got completely burned once by a salesman who took us for $1,000 for a marketing product that was useless. We are doing some pay-per-click campaigns with Google and Yahoo! now that seem to be working a bit better, and we're also going to start an e-mail marketing campaign, so we'll see how that goes. But overall, I was surprised by how much the barriers for starting a company have come down. I was lucky that my cousin shared his recipe for success with me, and now I'm trying to do the same thing. I'm mentoring a guy I work with who's also starting a company thinking small: He's selling fishing lures.
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