It's happened to all of us. Sitting, standing or sleeping, we've all had that epiphanic moment when a bright idea for a great business becomes clear. But if you think it takes millions to start a successful business, you're wrong. Each of the following entrepreneurs started with relatively little money and parlayed it into lucrative ventures, cutting corners whenever they could along the way. Although times may have been tough working with little capital, these entrepreneurs prove that although money makes the world go round, you can't judge a business by the size of its start-up.
MooRoo Handbags: Less Than $40K
Talk about taking a dream and making it come true. After stay-at-home mom Mary Norton dreamt about three handbags one night during the summer of 1998, she recreated them the next day, spending about $50 in materials. Norton then let her baby-sitter, who happened to be a manager of a store in Charleston, South Carolina, take the bags to see how they'd sell. At $40 each, they were gone in 45 minutes. When people asked for the brand name, the baby-sitter merged the nicknames of Norton's two children and came up with MooRoo Handbags.
Norton never aspired to be an entrepreneur, but she continued making bags on her dining room table and wholesaling to local boutiques. To test the popularity of her bags with a larger audience, she called the New York Chamber of Commerce and declared innocently: "I heard y'all do trade shows and fashion shows. I was interested in doing that." They directed her to the Jacob K. Javitz Convention Center, from which she got the number for a company putting on a show. Norton, who had no fashion or trade show experience, learned about taking orders from a retailer quickly. Not knowing she could ship ahead, she hauled 14 duffel bags filled with purses to the show. Though she may have lacked trade-show savvy, Norton still walked away with $65,000 in orders.
With proof of orders, Norton, 39, got a $20,000 line of credit from a bank and invested, with her restaurateur husband, roughly $20,000 to rent a warehouse and buy equipment. With a limited budget, Norton recalls: "[We] bought discounted, damaged and used office furniture. But we did buy a good copier, fax machine and phone system. I knew they would be heavily relied on, so I didn't skimp." She even saved on HR costs by hiring her husband's head waitress, who now serves as the head of production for MooRoo.
In February 2001, MooRoo opened its first store on South Carolina's high-end King Street. In an agreement with the landlord, Norton renovated the building for $50,000 and received a favorable lease. Business was booming, with sales doubling each year since 1998 and a 40 percent customer base increase each season. Then September 11 hit. Orders dried up, and retailers grew nervous--including Norton. The water coolers were gone, along with some of the staff. But many employees stayed at half pay. After Norton asked God for a sign as to whether she should continue with the business, an article featuring MooRoo in People magazine suddenly showed up, and more orders came flooding in.
With projected 2003 sales of more than $2 million, the purses sell for $450 to $1,200 in boutiques worldwide and at El Portal, Fred Segal, Henri Bendel, NeimanMarcus.com and Nordstrom. Norton plans to open stores in New York City and Beverly Hills, and to add products such as wallets, as well as licensing for other products. But she's still not expanding some parts of her budget. She feels an in-house marketing team of herself and one other employee works best. "Being Southern, we have a softer touch. It's more personal."