Roughly 12 years ago I was employed as a senior field service engineer by an exclusive state franchise for one of the largest security related electronics firms in the world. My best friend was employed by a national competitor in the same city as a senior field service technician. As a function of time, we both became disheartened and disappointed with our respective employers. Both of us felt that our respective companies were 100% sales driven, and that our individual technical skills and talents were being wasted. We felt disheartened that the clients seemed to be a subject means rather than an object end onto themselves. At this point, we started investigating the possibility of opening our own small business doing electronic systems sales, installation, and service.
Recognizing our limitations
Despite the fact that we brought extensive experience to the table, we knew that our expertise was almost exclusively technical. Our managerial and administrative experience was relatively limited, so we began researching methods to expand that body of knowledge. The Small Business Administration (SBA) of the U.S. Federal Government turned out to be a veritable wellspring and fountain of useful information and resources to that end.
We investigated both SBA loans as well as SBA grants and decided to forgo both. As we were both still employed full-time, we had sufficient income to sustain our livelihoods as well as underwrite the foundations of our new business. We did however avail ourselves of various SBA classes and seminars, and obtained a business mentor through the local small business bulletin board system. Even though his background was in a very different area and type of business, his counsel and advice were priceless. He advised on controlling everything from debt to growth, and really made us aware of what a “wild ride” business ownership could be.
As we had both acquired the various and sundry tools and test equipment over the years that were required for the job and both owned commercial grade vehicles, our initial start-up costs were relatively minimal. Advertising costs were essentially non-existent because we had both successfully networked with a large and diverse client base over the years (working for our respective employers), so it was simply a matter of “putting out the word” that we had started our own venture. Neither of us had signed non-disclosure or non-competition agreements with our respective employers, but we were very careful not to interfere with or co-opt any of their existing clients. In fact, the sales force in both companies would refer smaller clients who were “outside of their target demographic” to us.
Remain flexible and be prepared to transition
Initially, we purchased an accounting/bookkeeping software package to handle that end of the business. However, as the company grew, and the demands on our time increased, we found that this was ineffective and ended up hiring a CPA/full service bookkeeping firm. When we got to the point where we had to start hiring employees, this move turned out to be one of the smartest business decisions we had made.
Rapid growth translates to rapid death
From the very onset of our business, we decided to control any growth in a realistically manageable fashion. As we were both still employed, “bringing home the bacon” wasn’t a major concern and we decided to build a solid reputation instead of concentrating on profit margin. The ability to deliver “value-added” personal service gave us a major competitive advantage in a geographical area that already held substantial competition. The fact that we were locally owned and operated served as an additional attraction for local small business owners who wanted to “keep the money in the community.”
Ongoing business legacy
Despite the onerous statistics about the failure of new start-up businesses, our business never saw even one day of red ink. After having been in business for approximately 18 months, our client base and the rate at which we were adding new clients rose to the level where we were both able to resign from our corporate positions. With continued growth came the addition of employees. When I moved from that state 5 years ago, the business was still going strong and growing. The moral of the story is slow and steady wins the race.