Stretched Cash By... using multiple vendors. Three paper vendors, for instance, get 70%, 20%, and 10% of Daydots' business, respectively. Each knows where it stands relative to the others. "It keeps them looking for ways to save me money."
What Selling Cycle? (or How I Cut Corners and Reached Customers Fast): For his initial mailing, Milliorn bought a list of 5,000 names from a trade magazine with $6,000 borrowed against the family car.
Square Footage of Start-up Headquarters: 300, in the kitchen and the game room of his home, where the entire family sorted and stuffed envelopes
# of Pounds Gained/Lost During Start-up: Gained 15. "I got a lot less exercise when I had to give up coaching soccer, and the family ate out more."
Life in the Cheap Lane Means... ...cleaning your own restrooms.
* * *
The Company: Spectrum Associates, Woburn, Mass.; founded 1987. Provides software products and services
Winner of... The Bob Vila Do-It-Yourself-Enterprise-Zone Award (for best entrepreneurial use of a condemned structure)
The Founder(s): John Nugent and Tony Baudanza. Formerly customer-service managers at a venture-backed software company
$$ Started With: $0
Numbers Now (1993 projections): $38 million in sales, $5.7 million in pretax profits, 115 employees
Most Shameless Ploy for Getting off the Ground (or Surviving While Stuck There): When the staff numbered five, employees complained about not having a receptionist. OK, the founders said, we'll take $25,000 from the bonus pool to hire one. "They were right back on the phones."
Key Early Capital Sources: Customers who prepaid
Number of Months Before First Paycheck: 4; first salary, $30,000/year each
Best Free (or Nearly Free) Stuff: Office space in a building that had actually been condemned. "We knew at any moment we could get a call that the wrecking ball was coming." Cost: $200 a month
Stretched Cash By... asking employees to buy their own tools. Rather than providing the "586 machine with color monitor and trackball" most tech workers want, Spectrum offers to finance the purchase -- but the employee pays for and owns it.
What Selling Cycle? (or How I Cut Corners and Reached Customers Fast): To keep sales costs down, the founders persuaded six salespeople to put up $10,000 to $40,000 each to start their own sales-rep organizations to peddle Spectrum products.
Square Footage of Start-up Headquarters: 300
# of Pounds Gained/Lost During Start-up: Stayed the same.
Life in the Cheap Lane Means... image problems. Woburn location is on the "wrong" side of Route 128, but rent is cheap.
* * *
The Company: Bruno Independent Living Aids, Oconomowoc, Wis.; founded 1983. Manufactures wheelchairs, scooters, and scooter lifts for cars
Winner of... The Ross Perot Infomercial-Waiting-to-Happen Award (for accepting -- not to say basking in -- the necessity of self-promotion)
The Founder(s): Michael Bruno. Former food broker and marketing manager for medical companies; also started now-defunct mail-order catalog. Got last employer to agree to let him do market research for his current company while still on the payroll.
$$ Started With: $8,500
Numbers Now (1993 projections): $9 million in sales, $600,000-plus, in pretax profits, 72 employees
Most Shameless Ploy for Getting off the Ground (or Surviving While Stuck There): With no money for brochures, found 24-hour photo place to print 100 color copies from a negative. "That worked for the first couple of years."
Key Early Capital Sources: Two friends, four credit cards, countless suppliers. "When you're bootstrapping, you've got to be great at selling suppliers on yourself."
Number of Months Before First Paycheck: 12; first salary, $25,000/year. Salary in prior job: $70,000
Best Free (or Nearly Free) Stuff: A trade-show booth -- free the first year, half price the second.
Stretched Cash By... outsourcing manufacturing to his old employer.
What Selling Cycle? (or How I Cut Corners and Reached Customers Fast): "Presold" for dealers, including making Saturday calls on prospects who responded to ads.
Square Footage of Start-up Headquarters: 600, in a garage. Next, an unfinished space in an insurance office. Later moved into an 1,800-square-foot storage building, with just 500 square feet for manufacturing.
# of Pounds Gained/Lost During Start-up: Lost 15, despite a diet of casseroles, bratwurst, and burgers. On a low-fat diet now.
Life in the Cheap Lane Means... "I had to pass up a $500,000 deal two years into business because the bank wouldn't lend me $20,000."
* * *
The Company: Victorian Papers, Kansas City, Mo.; founded 1987. Sells greeting cards and gifts wholesale, retail, and through catalogs
Winner of... The Madonna Ciccone Today-Is-the-First-Day-of-the-Rest-of-Your-Life Award (for most skillful reinvention of self for new markets)
The Founder(s): Melissa and Randy Rolston. Randy worked for an ad agency and then started one. Melissa, a former free-lance illustrator and at-home mom, created a birth announcement that led to the birth of the company.
