Case Study: Keep Your Day Job and Start a Business
BY April Joyner
Nick Chasinov spent five years building his business while holding down another full-time position. Here's what he learned along the way.
The Company: Teknicks
Start-up Funds: $500
When Nick Chasinov decided to launch his own business, a Web design firm seemed like a natural fit. He had built websites for friends in college and it was a business he could start quickly and cheaply. In 2004, Chasinov spent about $500 in savings to set up a website and order business cards for his company, Teknicks of Bay Head, New Jersey. "It was what I call the garage sale approach: What do I have in my possession already that I can sell?" he recalls.
To find customers, Chasinov looked for free networking opportunities. He attended trial meetings of business networking and referral marketing organizations BNI and LeTip, where he signed up clients even before joining officially. Still, after a year, he was posting less than $100,000 in profits. He decided to take a full-time job at a digital marketing agency and continued to build Teknicks on the side.
To juggle both jobs, Chasinov set aside an hour each day—usually during his lunch break—for conference calls with his clients. Before he had a private office, he even took calls in his car. Although that system made his work more manageable, the demands of Web design proved unpredictable. What's more, Chasinov realized he didn't have a natural knack for it. "It was really hard for me to do, but I had to start turning down jobs," he says. "I couldn't keep up with the demand."
That ended up being a smart move. As he moved up the ranks at the digital marketing agency, Chasinov learned more about the company's finances and realized his business model was flawed. His payment cycles were too long, and by charging a flat fee, he was missing out on recurring revenue. He had an "aha" moment. If he offered SEO and Internet marketing services, instead of Web design, he could convert one-time clients into regulars.
Eventually, Chasinov moved to online marketing jobs at Lexis-Nexis and McGraw-Hill, all the while working on Teknicks. During that time, he met many of Teknicks' later clients, including his employers. He also scouted out talent, being careful not to poach full-time colleagues. Two of the freelancers he trained at McGraw-Hill became Teknicks' first employees.
By 2009, Chasinov finally quit his day job to focus on Teknicks full-time. That year, the company hit $1 million in sales. By 2011, the business had 34 employees and $2.5 million in sales. It wasn't the smoothest start-up path, but it was worth it, says Chasinov. "A lot of companies have had to take outside funding," he says. "We've been lucky."
The Experts Weigh In
Slow and Steady The one thing bootstrappers have is social capital. They have relationships, knowledge, and reputation. Chasinov leveraged those things and turned them into revenue. It's also fantastic that he quickly realized he needed another job to bring in enough working capital. It’s possible to overreach on bootstrapping. Some founders end up resorting to dishonesty just to bring in money, and others never discover the best business model for their business because they rush it.
Risky Business This is a good example of someone who found a need he thought he could fill and was very resourceful in going about it. He got everything he could for free. That said, working on your business within another company is something you need to be very careful about. You don’t want to end up jeopardizing your intellectual property by using the company’s resources to do your work. But in this case, I think it’s a great example of finding a way to kill five birds with one stone.
Joshua Baer Managing Director, Capital Factory Austin, Texas