Success Stories of Unlikely Entrepreneurs

BOOK ONE

THE BROKE ENTREPRENEUR

How 25 people started successful businesses

for $500 or less –and what you can learn from them

by

Diana Bocco

Introduction

Have you ever dreamed of starting your own business but think you can’t afford it?

You’re not alone.

Many people think the only way to start a business is to gamble big: mortgage your home, take a huge loan, cash on your 401(k)... And because the payoff is so uncertain and the risk so large, many opt to put off their dream and abandon their potentially amazing business idea.

You don’t have to do the same.

In this book, I’ve interviewed 20 successful entrepreneurs who started their businesses with $500 or less. Some of them are still in the early years and growing; others are already generating a six-figure income.

In their own words, they will tell you how they did it. How the idea was born, what it took to start the business and how they made it work on just $500. In many cases, it was a question of being creative and cutting corners in all the right places. For others, it was about adapting their original idea so it fit in with the budget they had.

The message, however, is always the same: a small budget doesn’t mean you have to give up your dream.

So if you need inspiration, courage or simply a few ideas to get you going, read on.

-Diana Bocco

#1: Pet Supplies

Name of your company: Whiner and Diner

Website: www.whineranddiner.com

What’s your business all about: Whiner and Diner has been handcrafting unique pet accessories since 1996: Elevated dog feeders, raised cat bowls, pet toy boxes, small dog beds, cat beds and dog breed leash holders – all custom-made from authentic reclaimed wooden wine crates. Each pet product is individually created. Our elevated pet feeders are healthy for all dogs and cats, promoting better posture and digestion in a stylish manner. We also sell wine crate serving trays for the pet parents.

When did you start the company: We started the company in 1996 and brought it online in 2007, when it really took off.

Your job before you started your own business: We’ve always been self-employed. My husband Stephen is a carpenter/remodeler and I am an artist/website designer.

How much did it cost you to start the business: I don't remember exactly how much we spent to start the business, but it was not a lot as we already has the power tools, materials, etc. The main expense was a laptop ($400).

What did you use the money for: working from home, we do not have rental expenses. And we get our wine crates free from local liquor and wine stores. We also use recycled shipping boxes.

What sparked the idea for the business? The idea came from Stephen, who came home with an old, beat-up wine crate one day and told me that he was going to make an elevated dog feeder for our black Labrador (Nigel). I said: Sure, honey, but I was a little skeptical. When I saw the finished product, I told him how beautiful it was and that he had to sell them. Before we knew it, we were selling them in local pet and liquor stores.

In 2007, I read in the New York Times that Microsoft was going to offer a free website design and hosting service (Microsoft Office Live then; called Office 365 now). The day the service came out, I signed up for it and started to learn about website design and created our site, not knowing the first thing about all this. After weeks of reading and working on it, we launched the website. We also signed up for PayPal to be able to have an e-commerce site ($30/month).

Did you know anything about this particular field before you started your business? At the beginning, we were like many—we thought that if you had a website customers would find you. Well, there is no such thing. I started reading about website marketing and optimization and became obsessed with it. Before I knew it, I was listing our site everywhere, writing pet related articles and pitching our product line to anyone who would listen. All for free. We have been featured in many magazines and Microsoft even came to our house to film us (and promote their own product).

Since your budget was so limited, how did you get the word out and found clients/customers?  We printed business cards, brochures and flyers ourselves and handed them out to anyone who would take them.

First and last year’s revenues: From making about $500 a month in 1996, depending on the economy we make around $25,000 a year now. It is still a second income, but it helped a lot when the economy went down.

What’s your normal work schedule? I spend about four hours a day on the computer for marketing purposes.

What’s the best thing about running your own business? Freedom.

What’s the worst thing? That the revenue is always uncertain.

What are the challenges of starting a business with little money? I think if you are smart, hardworking, competitive and creative, the money comes in second.

#2: Writing and Editing

Name of your company: Sarah Kolb-Williams Writing and Editing

Website: www.kolbwilliams.com

What’s your business all about: Words! I’m a book editor and editorial consultant, and I help small businesses with website copy, blogs, and other content.

When did you start the company: In February of 2013, I quit my full-time job to bring my nights-and-weekends writing and editing front and center.

Your job before you started your own business: I was a business and copyright specialist with an incorporation company, then a blogger and content editor for the same company. I’d also been a freelance book editor with a local self-publishing company for about five years (my one long-term client, right up until I put in my notice).

How much did it cost you to start the business: $466

What did you use the money for:  Website: $150; Desk chair: $150;  Chicago Manual of Style online: $60; other books and media: $50; Business cards: $30; Filing cabinet: $6; Office supplies (calendar, pens, etc.): $20

What did you do without in order to make the startup cheaper? Initially, I used the three-year-old computer I already had. I knew I needed a new chair, but my old desk had been treating me just fine. A nice filing cabinet was out of my price range, but a secondhand two-drawer unit at the thrift shop cost next to nothing. (A little sea foam green never hurt anyone.) My husband and I moved out of our two-bedroom apartment and into a smaller loft apartment—but because it’s a loft, it feels a lot bigger than it really is, and I’m actually much more motivated to get up and work than I was in our previous apartment.

What sparked the idea for the business? I was dissatisfied with the growth opportunities at my current position, but I never expected to go out on my own. I’d banked a few years of experience with that single long-term client, and I had the idea to leverage that experience and find a position in the editorial department of a traditional publisher—I thought that was my dream. But as I learned more and more about the state of the publishing industry, I started to change my attitudes toward traditional publishing.

Amid sending resumes and cover letters out into the ether, waiting for that promotion that always seemed to be just out of reach, and learning so much more about self-publishing, I began to realize I had it all backwards. Not only did I no longer want a job in a traditional publishing house—I no longer wanted a traditional job, period.

As I became involved with the indie author movement, I also became aware of the indie worker movement. When I first discovered that nearly one third of the workforce is independent/freelance, the statistic hit me like a ton of bricks: that’s what I wanted to do. I wanted to be in charge of my own destiny, and I wanted to help authors who were in charge of theirs produce the high quality, market-worthy books they wanted to create.

What came first, the budget or the business idea? I’m lucky —all an editor really needs in order to function is Microsoft Word and a style guide, and I already had those things. I started thinking about the business side of things and crunching the numbers, and I realized I could set myself up with a website and a marketing plan with hardly any budget at all, if I applied the do-it-yourself indie attitude to my business.

Did you know anything about this particular field before you started your business? I was an English Lit major, and during my final year of school, I discovered the Intro to Editing class that changed my life. Somehow I had made it through several years of college without ever deciding what I actually wanted to do with an English major, and this class solidified it for me: I was a natural-born editor, and I loved it! I started learning everything I could about the book publishing industry. From there, I was lucky enough to land a receptionist job at a self-publishing company, which gave me an opportunity to get my foot in the door and prove myself editorially.

Since your budget was so limited, how did you get the word out and found clients/customers? I thought I would rely almost entirely on word of mouth and referrals, but I’ve since been contacted by a number of clients who have found me online, either through my website/blog or through links from guest posts I’ve written for other blogs. I’m also a member of a few professional organizations that maintain databases clients can use to find editors. I was also pleasantly surprised at how effective Twitter has been for connecting with other people in my industry.

First year revenues: I’m in my first year of full-time operations now, and I’ve already beaten last year’s part-time freelance income.

What’s your normal work schedule? Monday through Friday, I wake up when my husband gets up to go to work—making him breakfast keeps him happy and gets me out of bed! I work very loosely around a nine-to-five schedule, but I modify as needed.

How has your business grown since then? I was recently able to buy a new computer and some writing software, upgrade my website, and invest in a new project, www.indieauthorediting.com, a guide for self-published authors. My husband gave me a Kindle Fire as a gift, which allows me to very naturally go over my edits (with the added bonus of not having to be chained to my desk). And I’ve recently started doing short copywriting assignments nearly every week, which keep my short-term income up so I have the freedom to invest in long-term projects.

Where do you see your business in five years? In five years, I hope to have a few books and e-books on the market. For my billable hours, I’d like to focus more on consulting, saving the copyediting work for the types of books I enjoy the most: science fiction, historical fiction, and nonfiction that interests me.

What’s the best thing about running your own business? I love making my own schedule! I’m great at keeping lists and schedules and estimated timelines, so I know when it’s OK for me to run errands in the middle of the day so I can avoid rush hour or meet a friend for lunch. And I go to yoga a few times a week now, which keeps me from hunching over into a little ball at my desk—and gives me enough sanity breaks so I don’t feel cooped up at home all the time!

I also love the ability to build up my business and work on projects that I’m interested in and know are valuable (rather than having projects handed to me). I’m currently writing two books and working on a second blog, all for projects that I’ve been inspired to start by needs I see in my industry. For example, since I make my own schedule and have a good handle on my deadlines, I was able to take two full days off and immerse myself in one of the books I’m writing, wrangling bits of material into logical order and coming up with a solid outline for the project. Now I’m about halfway through the project, and I can pick away at filling in the rest of the book as my schedule allows. If I had still been traditionally employed, it’s likely this book would still be just an idea in my head (or, more likely, wouldn’t have occurred to me at all!).

What’s the worst thing? I miss my 401(k), and sometimes I miss the community of my old office job. But I have a ton of freelancer friends I can talk shop with, and the reality is, the security of traditional employment is a myth. I’m in a much better position now, where I can diversify my income, set up my own investments, and make decisions for myself. I’m not at risk of losing my single source of income in one fell swoop, and that alone trumps pretty much everything else.

What are the challenges of starting a business with little money? Where some people see a challenge, I see an opportunity to do a little creative thinking. I just make do without, or I come up with a low-cost workaround. I barter with friends, doing editorial favors or even cooking dinner in exchange for website help and the odd graphic design. I do my own marketing. For a service-based business, the logistics are really not that daunting anymore.

What advice would you give to somebody thinking you need a lot of money to start a business? There are a ton of free tools out there. You can start your mailing list for free, and upgrade once you max out on the number of subscribers. You can buy cheap website hosting and upgrade once the traffic is there.

Find blogs in your industry, and learn what has and hasn’t worked for others. Dig into Google’s business apps to see what might already be available to you without having to buy anything. Ask yourself if you need that separate paid accounting software, or if PayPal’s invoice system works for the moment.

There are a billion corners you can cut, especially in a service business, which generally doesn’t require a great deal of overhead for office space, warehousing, and inventory. Check out the Small Business Administration at SBA.gov—they provide free in-person business mentoring