Business:RedCannon Security, a Fremont, California, developer
of computer security software products
Founded: February 2003
Start-Up Costs: Significant, says Vaidya-at least a few
million. Privately funded, he adds.
Revenue So Far: More than $100,000
Employees: 24, including some on-call consultants
Vaidya's
Background: This is his fourth company, so he knows a thing
or two about starting a business, no matter what the economy.
Vaidya's Top
Three Tips for Start-Ups:
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1. Is there enough distinction between what you're
offering and what your competitors offer? "If I can
clearly say 'yes,'" says Vaidya, "that's a
good indication that I have a business."
2. Have a sound business model. "You need to know
what you're going to build, how much will it cost, how much you
are going to ask for each product," says Vaidya. "This is
important to ask, no matter what the business or economy. But in a
bad economy, if you can't answer these questions, you're
going to fall with a harder impact."
3. You need conviction. "If I'm convinced I have
a business, then I can say, 'Yes, the economy is bad, but
it's never going to last forever.' It's that conviction
that can get you through all of the rough days," he says.
"And I have weathered a few of those rough days."
Vaidya's Final
Two Cents: "You have to develop the best strategy you
can. It's much easier to set the course than to turn back
because you have a problem."
Julie Kampf, 42
Business:JBK Associates Inc., an Englewood, New Jersey,
business that recruits executives for the health-care and consumer
products industries
Founded: Incorporated in the spring, JBK was actually
launched in late October 2003.
Start-Up Costs: $25,000 in the first month, for office rent,
office equipment, Web development and various consultants
Revenue So Far: More than $75,000, even before she
officially launched. There's a lesson here.
Employees: Two
Kampf's
Background: Kampf spent 17 years in the fashion industry
working in sales and marketing, and four years in the recruiting
field at small and midsize firms.
Kampf's Top
Three Tips for Start-Ups:
1. Build your infrastructure. Try to make sure
everything-or almost everything-is in place before opening for
business. Because Kampf took her time between incorporating and
actually shouting to the world, "Hey, look at me," she
was able to line up clients before opening, which meant income was
already streaming in.
2. You've got to have passion. "I love what
I'm doing 24/7, and I couldn't say that about anything I
did before this." Even if the phone rings less when the
economy is down, as long as you love your business, you'll
usually feel good. Since Kampf apparently realizes you can't
pay the electricity bill with your winning smile, she adds that
whenever it's feasible, you should sock away money into a
"rainy day savings [account]."
3. Understand your chosen industry. Even when the economy
is going backward, the health-care industry moves forward, albeit
slowly. Kampf admits, "If all I knew how to do was recruit
executives in technology, I might not have started this." All
the passion in the world can't force an industry to grow.
Kampf's Final
Two Cents: "Starting a business is like having a baby.
There really is no good time."
Saving Grace
Saving money is always important, but especially when
you're starting a business. We asked our 2003 entrepreneurs for
ABCs on how to penny-pinch, and here's what they had to say:
A is for Auction. Alan Crancer saved a lot of money by
buying equipment and office furniture at local auctions. Plus,
"They're fun and interesting to attend, and most are on
the weekend," he says.
B is for Buck. "Before I spend one dollar outside of
the basic expenses, like payroll or recurring expenses," says
Vimal Vaidya, "I need to be convinced that by spending it on
an employee or department, it will either generate or save the
company [money] in sales or productivity or costs."
C is for College Interns. "Whether it be for graphic
design, production or clerical work, students are usually hungry
for resume- and portfolio-builders," observes Laura Osborne.
"More important, they are usually talented, hardworking and
incredibly energetic. Not to mention very cheap, if not
free."
D is for Divvying It Up. Julie Kampf uses her accountant
only for the big things, while she handles the payables,
receivables and other accounting responsibilities "until such
time [as] it is more cost-effective for someone else to perform
these functions." She's also not shy about asking friends
or family to occasionally throw in a free helping hand.
E is for Embellishing Your Store. You want your store to
have some style and class, but you don't have the money? Yana
Drogobetsky says, "Instead of investing money in artwork for
the store, we had a display of a local artist's works exhibited
throughout our showroom." The plus? Not only did Drogobetsky
save money on decorating, she also found a way for her store to
become involved with the community, which is always a good
thing.
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