* Stress. The hours. The decisions. The change. Not everyone's cut out for it.
* Less Control. Predicting sales and profits gets tricky. "It can be astounding some months. Other months you're sucking air." It can feel as if the company's out of your control. Especially once you sell off equity. "Now I have to go public."
Type Three: The Soloist
Don Selesky, age 44 Westford, Mass. Started in 1986
Business Software. Writes programs for the Lotus aftermarket; distributes through a third-party publisher. "I'm an author. People publish my work for me."
Number of employees 0.
Revenues $50,000 to $100,000 yearly in royalties.
Equity None. A royalty stream instead.
Strategy Improve personal financial position without holding a job. Avoid the capital investment and competitive disadvantages of self-publishing.
Skills and background Programming and marketing, most recently at Lotus.
Role of CEO If you can call him that. Yet, he's the boss all right -- his own, anyway. He gives up margin in return for sales and support from the publisher. Handles technical tasks, research, and development. Spends most days keying code into his computer.
Financial return Limited, unless he hits the best-seller lists with a new product.
Working relationships Not many. He's home alone most of the time. Meets regularly with his publisher and his product manager. Canvases computer-user groups to gather intelligence. But on a day-to-day basis, he's a one-man show.
How financed Out of savings and an advance on royalties.
Chief Advantages
* Size. Itty-bitty niche keeps big competitors at bay. "At this size you keep your head so low, it's hard to get hit."
* Control. Designs the product, researches its market, exercises complete control over its quality. "I take on more risk to have more control."
* Flexibility. Sets own schedule and milestones. Nobody to report to or manage. "I can go to a Wednesday afternoon matinee, take a four-day ski weekend when I want to." Works 50 to 60 hours a week.
* Income. Consistently equals or surpasses what he could take home in a regular paycheck.
* Negligible cost of entry. Almost no capital required. Plus, no employees, no creditors, and no investors mean no sleepless nights.
Chief Disadvantages
* Not the way to build wealth. Lives quarter to quarter on royalties.
* Loneliness. Working alone can be isolating. "It's the worst part of the job for me." Misses Friday afternoon office parties. "I could go out and buy my own pizza and six-pack, but it wouldn't be the same."
Type Four: The Minimalist
Michael Cahlin, age 39
The Financial Software Co. Los Angeles Started in 1989
Business Publisher and marketer of a single financial-software program. Acquired the product rights as payment for a bad debt.
Number of employees One part-timer.
Revenues Slightly less than $100,000 last year.
Equity 100%.
Strategy Eliminate costs and maximize earnings. Build market share and equity, without loading up on employees. Then sell the company within three years. "My goal is not to hold power and control over hundreds of employees' lives," he says. "It's to put out a great product, make a lot of money, and get out."
Skills and background Public relations. Introducing and promoting new software products.
Role of CEO Marketing and sales. Cuts deals with bigger software companies to push the product into wider distribution. Stuffs envelopes, shrink-wraps product, supervises himself.
Financial return Deferred. Running the company leanly so every penny -- including what he might pay himself -- goes back into the business. Intends to collect when he walks.
Working relationships Big-company partners who bundle his product or offer it as a premium to their customers. Vendors: solo flyers who work from their homes via fax, phone, electronic mail. Ties are electronic. "Without the technology I have on my desktop, I never would have been able to do this." Wife gives legal advice. Programmer works cheap in exchange for equity.
How financed Out of pocket. A second business, his PR firm, keeps bread on the table.
Chief Advantages
* The potential payoff. A shot at one jumbo return on investment.
* Minimal overhead. No payroll. "I can cut almost any deal I want. Because my expenses are so low, I can afford to make a quarter on a deal if it will get me exposure."
* Control. "Everything I do is mine. I have no investor to dilute me or take part of the proceeds when I cash out."
* Bootstrappable. Manual, sales material, press releases, packaging all designed on a desktop and produced in-house.
* Size. Petite company can piggyback with larger partners who have the resources to help build a customer base.
Chief Disadvantages
* Vulnerability. Easy prey for large competitors. "They could kill me if they wanted."
* Lack of resources. "You know if you had any money, you could really go places. Some days it gets so frustrating I fire myself. Then I beg me to come back."
* Paltry income. The price of a minimalist approach: a miniature take-home.
-- Anne Murphy
