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Full Steam Ahead

Sure, you've heard it all before--how to start a business, what to expect, etc. But the question remains: What's it really like to start your own business. One entrepreneur shares his story about putting his startup's wheels in motion.

The rice fields spiraled below me. From the air, the flooded paddies reminded me that I was entering a foreign and exotic land. Although I had performed months of recon, I was unprepared for the feeling of irreversible change. My whole future revolved around the successful completion of my mission. I had left behind my home of 16 years in search of a golden future in this unearthly place-Northern California. My comfort zone vanished into thin air.

I had one suitcase, a duffel bag and a briefcase stuffed with a laptop. My most sacred possession was draft 22 of a thorough business plan full of information-painfully heavy, I mused, as the rain slapped against the windshield a few hours north of Sacramento.

This is not a story of blind luck, instant success, or starting a business with seed money from a kindly uncle. This is about starting a new national chain of retail stores called Victory Mobility Centers with an old laptop, an idea, and the purchase of two existing stores as a starting point. What I've learned on my quest for business ownership could make you millions-or at least save you from wasting time on a half-baked idea.

The Search

My journey started on a bleak Texas day in early January. For nearly a decade, I have contributed or reported on the business success of others through my writing and consulting. Suddenly, that was no longer enough. I started searching through my stack of Entrepreneur magazines for an answer to what my future would hold, when I saw a blurb about Ability Center, a San Diego business that sells mobility devices such as wheelchairs and minivans adapted for the physically challenged. The business was growing at a rapid clip and was in a position to help our aging population-a business that makes you feel good about yourself. A smile crept across my face. Days later, I was on a plane to San Diego to visit Ability Center. That was three years ago.

The Workable Deal

We all need to find our "workable" deal. The hallmark of an entrepreneur is the capacity to dream. Yet most of the time, people seem to be content to wish for something. Wishing is what happens when you buy a raffle ticket. The key to a more realistic vision for success is to discern what is workable for you and what isn't. Success depends on the concept, your team, the presentation and your timing.

Working the workable deal means sweating the details and producing a plan you can execute. Be realistic. If your team has never worked in an ice cream store, don't pitch a plan for global domination of the ice cream market.

The Pitch

It isn't wise to broadcast your plans, but our market will grow by no less than 10 percent per year for 15 years. Current customers are underserved by small operators who don't advertise and are undercapitalized. The service helps the aging with their needs for everyday living. There's no national brand, and the whole market segment is about to bust wide open, because baby boomers will fuel it with their decreased physical mobility and unprecedented earning power. Our concept is a category killer with the right people behind it. The day we close on the acquisition of two of the industry's leaders, we will be the fourth-largest company of its kind in the country. Two years from now, we will be the largest in the nation.

What you just read is known as "the elevator pitch." It's designed to attract attention to the value of your proposition. If you can't articulate what your business is about in one minute, you may never attract the talent or capital you need.

The Setback

The meeting in San Diego would begin a year of frustration and false starts. Many business owners love to be courted by potential purchasers. The idea of selling and leaving the daily grind behind is compelling. But when it comes to actually signing a deal, many founders can't part with their babies. In San Diego, no amount of cajoling, bonding or alcohol would create a workable deal. The owner of Ability Center wouldn't agree to anything until I had a few million dollars in the bank. Investors don't put millions of dollars in the bank until you have a binding deal. This is the conundrum for those without sufficient capital. I learned the importance of creating a binding letter of intent early on-it gives you time to raise capital and do due diligence. When you visit potential investors, having this document shows you're serious.

Without a binding letter of intent, my potential deal in San Diego was dead. Then the phone rang. It was a consultant who had worked with the owner in San Diego, and his message was simple: "I scrutinized your plan. I feel your vision is right on, and I want to work with you." I had my first team member. That was two years ago.

Business Plan Do's
  • Explain the pain in the marketplace that your concept will relieve
  • Accurately point out risks to your plan
  • State clearly how much money you need
  • Have an experienced team in place
  • Have a logical and sensible investor exit strategy
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This article was originally published in the September 2004 print edition of Entrepreneur's StartUps with the headline: Full Steam Ahead.

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