$$ Started With: $0
Numbers Now (1993 projections): $3.5 million in sales, $420,000 in pretax profits, 56 employees
Key Early Capital Sources: Savings, suppliers, credit cards
Number of Months Before First Paycheck: Almost 0; drew cash for expenses. Salary still is not fixed; comes from profits, varies from month to month.
Best Free (or Nearly Free) Stuff: Steel desks bought at auction, 10 for $50. "It cost more to haul them away."
Stretched Cash By... reviewing cash and inventory reports twice a week, and budgets once a month rather than once a year.
What Selling Cycle? (or How I Cut Corners and Reached Customers Fast): Continue to buy premium magazine ads at the last minute for a quarter of the regular price; now magazines call them with deals. "If they're not getting full price, they'd rather call someone they know."
Square Footage of Start-up Headquarters: 300, in an attic
# of Pounds Gained/Lost During Start-up: Stayed the same.
Life in the Cheap Lane Means... always underestimating growth. Before they buy anything major, they ask, "What if sales stay flat?"
* * *
The Company: Metrographics Printing & Computer Services, Fairfield, N.J.; founded 1987. Distributes printing and computer services
Winner of... The Kyle McLachlan Dream-Headquarters-Commissary Award (for best coffee and doughnuts at first start-up office)
The Founder(s): Andrew Duke, Jeff Bernstein, and Patrick Veltri. Duke was a big-company veteran who got sick of hearing, "Don't worry about the customers. There'll always be plenty of them."
$$ Started With: $100 each
Numbers Now (1993 projections): $2.5 million in sales, $200,000 in pretax profits, 12 employees
Most Shameless Ploy for Getting off the Ground (or Surviving While Stuck There): To appear bigger, rented a suite number that was really a post-office box. Gambit backfired when delivery of 15 boxes came to said "address."
Key Early Capital Sources: Suppliers
Number of Months Before First Paycheck: 6; then expenses only for the next 6. Partners still work on commission.
Best Free (or Nearly Free) Stuff: Office furniture, worth $5,000, from outgoing tenant. Bartered a year of free printing services to get it. Old tenant is still a customer.
Stretched Cash By... not paying salespeople's expenses, which forces them to think like entrepreneurs and use money wisely. No ceiling on pay and no territories -- salespeople call the shots.
Square Footage of Start-up Headquarters: 9, at the coffee counter of the Dunkin' Donuts halfway between the partners' homes. Asked suppliers to meet at their offices.
# of Pounds Gained/Lost During Start-up: Stayed the same. Ate lots of fast food but didn't starve because their wives worked.
Life in the Cheap Lane Means... "We use all of our vendors' 800 numbers, and if they don't have one, we ask them to get one."
The Company: NorthWord Press, Minocqua, Wis.; founded 1984. Publishes nature books and tapes
Winner of... The Energizer Bunny Still-Going Award (for refusing to take no for an answer)
The Founder(s): Tom and Pat Klein. He was a nonprofit administrator; she quit her job in a frame shop to start the company.
$$ Started With: $600
Numbers Now (1993 projections): $7.6 million in sales, $700,000-plus in pretax profits, 45 employees
Most Shameless Ploy for Getting off the Ground (or Surviving While Stuck There): To simulate a real office environment, played a tape of typing when anyone called.
Key Early Capital Sources: Prepaying customers; cash flow from first book, Loon Magic; one angel
Number of Months Before First Paycheck: Almost 0; drew $12,000 in each of the first two years, $24,000 in the following two.
Stretched Cash By... chasing those accounts receivable, dammit. To collect $20,000 from a major distributor, Pat visited the company personally. Comptroller claimed to be unable to do anything without the president's approval, so Pat found the president -- who claimed the check-writing machine was broken. "I said, 'I'll accept a handwritten check." She got it. Distributor is still a customer.
What Selling Cycle? (or How I Cut Corners and Reached Customers Fast): Guerrilla marketing 101: told every acquaintance to call Waldenbooks and B. Dalton and ask for Loon Magic. After a few months, orders arrived. Also assembled "market advisory committee" of outside professionals instead of building their own marketing department.
Square Footage of Start-up Headquarters: Uncertain; ramshackle country home doubled as a warehouse. "We'd get into bed surrounded by books."
# of Pounds Gained/Lost During Start-up: Tom gained 20; Pat stayed the same. Tom is now back to normal.
Life in the Cheap Lane Means... "I call people at noon hours, when they're out, so they'll call me back."
