When Anne Abrams and Cecilia Hugo, both 46, decided to chuck their successful theatrical PR company to start a specialty retail store for dog and cat lovers in Seattle, everyone they knew thought they had lost their minds. In spite of such skepticism, the first Bow Wow Meow Treatoria opened in 1996 to an enthusiastic public. It was located on the first floor of a converted house, with Abrams and Hugo living in an apartment upstairs. Since then, they've added a second retail location, as well as a commissary where they make fresh pet food.
In the process, Abrams and Hugo learned some excellent strategies for dealing with people who think you're crazy for starting your business:
- Show you've done your homework. Do thorough market research and develop a solid business plan. Then, when people challenge your idea, you'll be in a position to respond with confidence.
- Find an angle skeptics can relate to. For both Abrams and Hugo, the emotional support of their parents was important. Although neither set could personally identify with the market for upscale pet foods and products, they were of a generation that could understand the concept of living above the store--and that's where Abrams and Hugo made the connection to win their parents' support. And though their friends thought abandoning a PR business in favor of a specialty store was crazy, most could at least relate to the store's concept, because they had pets. Eventually, some of them even invested in the store.
- Expect some relationships to be damaged. Any new business venture is risky, and an unusual one is even more so. You may have friends who simply can't deal with the risk you're taking. Sadly, Abrams and Hugo say they have friends who were so uncomfortable with what they were doing, those relationships will never be the same again.
- Disassociate yourself from the naysayers. Keep yourself pumped up by avoiding negative people who only drag you down.
- Remember other successes that started out as crazy ideas. Abrams and Hugo say their theme song is the old Gershwin tune "They All Laughed." When people say they're crazy, the partners invoke stories of other successful entrepreneurs who were ridiculed. Says Abrams, "They all laughed, and [now] we're laughing, too."
When Lease Is More
Equipping your new business doesn't have to cost a fortune.
One way to keep equipment costs down is to lease rather than buy. These days, just about anything can be leased--from computers and heavy machinery to complete offices. The kind of business you're in and the type of equipment you're considering are major factors in determining whether to lease or buy. If you're starting a one-person business and only need one computer, for instance, it probably makes more sense to buy. On the other hand, if you're opening an office that will have several employees and require several computers, you may want to look into leasing.
According to the Equipment Leasing Association (ELA), approximately 80 percent of U.S. companies lease some or all of their equipment, and there are thousands of equipment-leasing firms nationwide catering to that demand. "Leasing is an excellent hedge against obsolescence," explains Laurie Kusek of the ELA, "especially if you're leasing something like computer equipment and want to update it constantly."
Other leasing advantages include: lower monthly payments than you would have with a loan; a fixed financing rate instead of a floating rate; tax advantages; conservation of working capital and no cash-devouring down payments; and immediate access to the most up-to-date business tools.
One drawback to leasing, however, is that you'll probably pay a higher price in the long run than you would have with a straight purchase. You may also have to retain the equipment for a certain period of time--a difficulty if your business is in flux.
For more information on leasing, take a look at the member directories offered by the ELA (http://elaonline.com/WhosWho.cfm) and the Business Technology Association (http://www.bta.org). The Leasing Sourcebook (Bibliotechnology Systems and Publishing Co.) is another directory of leasing companies. You can also check the Yellow Pages.
Excerpted from Start Your Own Business (Entrepreneur Media Inc.). To order, visit http://www.entrepreneurmag.com
Why being afraid of financial disaster can make it happen
A certain amount of trepidation is healthy and can keep you cautious enough to avoid making serious mistakes. But too much can kill your business before it even gets off the ground, says Azriela Jaffe, author of Starting From No: Ten Strategies to Overcome Your Fear of Rejection and Succeed in Business (Dearborn). "No one wants to buy from someone who communicates an unhealthy urgency," Jaffe says.
Take this quiz from Jaffe's book to see what sort of unconscious messages you're sending. Mark each statement as true or false:
- My spouse or children depend on me to be successful.
- I have slim savings and assets to fall back on if I don't pull in the cash I need every month.
- I have significant household and business overhead expenses to meet every month.
- If I don't significantly improve my performance or sales, I fear I will go out of business.
- I think prospects can sometimes tell how desperate I feel when I pitch my product or service.
- I experience insomnia because I'm worried about finances.
- My spouse (or in-laws, parents or business partner) is upset about our financial situation and is giving me a hard time.
- I worry about extremes, like losing the house or my spouse, even though that's highly unlikely.
- When I lose one sale or a prospect says no, I panic about not being able to earn the money I need.
- The more desperate my financial situation, the harder it is to prospect, because my self-esteem falls into the gutter.
According to Jaffe, if up to three of these statements are true, your fear of financial disaster is manageable but may be inhibiting your success. If you marked between four and seven of these statements true, you can count on losing sleep over financial worries. And if more than seven are true, you're too desperate to be effective professionally. Jaffe's advice: "Stabilize your finances before trying to depend on a small business for a living."
Nothing But Net
Great Web sites for start-up entrepreneurs
Starting a business? Visit these Web sites for information and assistance:
- Business Start-Ups magazine:http://www.bizstartups.com
An online magazine for new entrepreneurs, with information on start-up strategies, hot opportunities, financing and more.
- HomeOffice magazine:http://www.homeofficemag.com
An e-zine that features articles on running a homebased business or working for someone else from your home office.
- SCORE (Service Corps of Retired Executives):http://www.score.org
Find business articles, workshop information and links to other valuable sites, plus get e-mail counseling for your start-up venture.
Find out all the ways the SBA can help you, plus click on links to other valuable resources.
- U.S. Patent and Trademark Office:http://www.uspto.gov
Get information on patents and trademarks, including necessary forms and fee schedules.
- Small Business Exchange:http://www.americanexpress.com/smallbusiness
Browse an array of American Express products and services, including merchant status, corporate cards and equipment financing, plus a wide range of articles on various aspects of starting and running a business.
- Expert Marketplace:http://www.expertmarketplace.com
Need a consultant? This site provides access to a database of more than 214,000 consulting firms, plus articles and case studies.
- Federal Trade Commission:http://www.ftc.gov
Get the latest on consumer protection and fraud issues, information on franchises and business opportunities, details on antitrust and competition cases, and more.
- Insurance Information Institute:http://www.iii.org
Make the right insurance decisions for your small or homebased business with help from this site.
- Idea CafÃ©:http://www.ideacafe.com
Enjoy articles, product reviews, links to online forums and chat rooms . . . all displaying a whimsical approach to business.
Bow Wow Meow Treatoria, 1415 N. 45th St., Seattle, WA 98103, (206) 545-0740