Use Your Day Job to Better Prepare for Your Business

For those of you with “day jobs” outside of the business you are building, it can seem like getting to “full time” can take FOREVER. Be patient.

Until then, use your day job as a building block. Here’s the thing… and I’ll speak from experience as an entrepreneur for the last 9 years… when it’s up to you as the business owner, you are completely responsible for ALL the learning you do. You HAVE to seek out education and self-teach yourself EVERYTHING.

Use your day job to learn everything you can. Think of your weaknesses and seek out opportunities to make them stronger. Take the opportunity to learn:

  • how to sell
  • how to lead others (manage a team)
  • how to negotiate
  • software such as Excel, Word, Adobe Creative programs, etc.
  • conflict resolution
  • how to research
  • project management
  • time management
    and… so much more, depending on what you do in your job.

These experiences that you have in your day job will make you so much stronger as a business owner. Don’t downplay it or take it for granted. Make the most of it!

Be Patient with your Day Job

I talk to many of you who are dying to get out of a day job and can’t do so fast enough. Be patient.

Did you know that Kelly Simants had a full-time job for 7 years before she went full-time with Sweet Pea Events?

I had an odd assortment of part-time jobs for about 3 years while I was trying to get my stationery business off the ground.

These things don’t happen overnight. With so many overnight success stories it’s hard to believe that it would take a long time to build a business… but overnight success is not the norm.

In fact, many of the business owners I know in this industry who have had some solid success started out in another industry and slogged away at it for several years before being able to be full-time in their own business. I think this builds tenacity and determination that are both necessary for any entrepreneur.

This is a fantastic post from Debbie Orwat of Planner’s Lounge. Check it out: Transitioning from your day job to your wedding business. She talks about how it took her years to go full-time in her business also. And, she shares some great tips on how to prepare yourself for that transition.

What about you? How long were you at your day job with your “business-on-the-side”? OR – are you someone who is looking to transition in the upcoming year(s)? Share with us in a comment below about what your goals are to get there.

Business Partnerships – Case Studies

On Tuesday I talked about the Pros and Cons of structuring your business as a Partnership, and yesterday I reviewed how to outline your Roles and Responsibilities between business partners.  Today, I want to take a look at a few successful Partnership stories as I think it’s interesting and helpful to look outside of the wedding industry to gain perspective.

Dropbox

Image: Business Insider

These two MIT grads were tired of emailing files themselves when they wanted to work from more than one computer.  Drew Houston and Arash Ferdowsi created Dropbox in 2007 – Drew is CEO and Arash is CTO (Chief Technology Officer).  Now the company boasts 50 million users in over 175 countries.  In 2009, Steve Jobs even offered to purchase Dropbox for a 9 digit aquisition offer, but they declined as Drew said he would rather build a company than sell.  In 2011, they received $250 million in funding from investors so they can pursue their growth.  Impressive.

ModCloth

Image: The New York Times

Susan Gregg-Koger and her then boyfriend, now husband, Eric Koger, started ModCloth in 2002 when she was only 17 years old.  She had a closet full of vintage clothes and saw a unique opportunity to sell affordable, women’s indie clothing and accesories online.  Fast forward to 2012, ModCloth has over 300 employees across 3 locations.

Zipcar

Image: Inc Magazine

Two moms, Antje Danielson and Robin Chase, founded Zipcar in 2000.  They met at their children’s kindergarten class – Robin had an MBA and Antje was working on a Harvard research project trying to determine how other countries conserve energy with vehicles.  Chase was CEO until 2004 and now neither she or Antje are with the Company.  However, what they co-founded together now has over 900,000 members and a fleet of over 9000 Zipcars throughout the US, Canada, and the UK.

So what are some key takeaways we can learn from these case studies?
  • Some partnerships can stand the test of friendships and marriage
  • It’s important to leverage each partner’s talents and expertise as a Company is built
  • Some partnerships at the end of the day will dissolve because one partner steps down, an aquisition occurs and the partner is bought out, the partner is a serial entrepreneur and wants to start another business, etc. That’s ok.
  • There is power in numbers.  Two heads can definitely be better than one for many people. Synergy, passion, accountability, vision, and motivation can be shared between two business partners.  At the end of the day, it can lead to an incredibly successful business like the 3 above.
  • You don’t have to start with $100,000 in your bank account.  Zipcar started with $68 in their account upon their launch.

What other learnings do you take away from these examples of successful Partnerships?

The Pros and Cons of Partnership Agreements

Image: Creative Commons

There are several ways to structure a business, but this week I’m going to be doing a three part series specifically on Partnership Agreements.  Today I want to highlight the pros and cons of this business structure, tomorrow I’ll be discussing how to define each partner’s roles and responsibilities, and then Thursday we’ll be wrapping it up with case studies of successful Partnerships.

I have had good and bad experiences with Partnership agreements in my journey as an Entrepreneur, and think it’s important to understand the pros and cons before deciding that a Partnership is the best business formation for your Company.

The Pros:

  • Synergy – without a doubt, there is typically an incredible synergy that comes with a Partnership.  Being able to bounce ideas off of your business partner is invaulable, as is having someone else to be able to solve problems with, create new products and services with, etc.  There is motivation, accountability, and support that comes with a successful Partnership.
  • Complimentary Strengths– if you find the perfect partner, one person may have strengths in certain areas like Sales/Operations while the other person’s strengths lie in Finances/Public Relations.  There is an excellent book called “Strengths Finder” that we highly recommend if you have a business partner, or are looking into creating a Partnership with someone.  Michelle and I have both utilized this tool to understand how our strengths compliment each other and it’s really enlightening to see how each of us possess similar, yet different strengths that we can leverage off of each other.
  • Shared Costs – especially if you’re a start-up, this can be super helpful to share the initial start-up costs with your business partner.
  • Relatively Easy Tax Returns and Formation – A General Partnership is normally a “pass through” tax entity, meaning the partners (not the partnership) are taxed.  Also, you typically do not need to register your Partnership with your state and pay licensing fees as with other business structures (consult with your CPA and/or attorney to be sure you understand your specific state’s laws and regulations).
  • Shared Roles/Responsibilities – instead of wearing all of the hats that a sole-member business partner might have, creating a Partnership allows you to divvy up roles and responsibilities for the Company.  Stay tuned for more on HOW to share your roles and responsibitilies – tomorrow!

The Cons:

  • Shared Profits/Losses – instead of enjoying all of the profit you might see as an individual business owner, you share the profits when you’re in a Partnership so you may not make as much money as you would if you solely own the business.  Similarly, if you incur losses you share these as well – one Partner’s negative performance could tank the business so this is just a risk to consider.
  • Control – you don’t have total control over the business.  There may be disagreements that lead to a falling out, one person decides they want to buy out the other, etc.
  • Liability – if one Partner is unethical, that person’s actions can legally bind the other Partner.  If there is ANY part of your gut that doesn’t trust your partner, you see any slight red flag – there is probably a reason.  Be sure that you can trust your partner without a doubt – their name is essentially your name at the end of the day.
  • Ruined Friendships – many if not most Partnerships are created because the two business partners started out as friends, then had the brilliant business idea.  Be VERY careful about entering a Partnership with a friend, and especially a family member.  Choose your business partner because they are the BEST fit for you and the business, not just because you think it would be fun to start a business with your friend. I like John D. Rockefeller’s words of wisdom: “A friendship founded on business is a good deal better than a business founded on friendship.”

Come back tomorrow to check out how to assign roles and responsibilities within a Partnership!

Alternate Business Opportunities – Licensing

Most of us get bitten by the entrepreneurial bug and don’t look back.  We decide that we are going to launch a business and make it our own.  I’m always surprised that more people don’t look at other entrepreneurial opportunities such as franchising and licensing.  Taking on a franchise or licensing a brand can be incredibly lucrative.  The benefit stems from taking on something that has a successful formula and using the strength of that formula to create an entrepreneurial opportunity for yourself.  In other words: why recreate the wheel?

I asked Debbie Orwat, owner of Save the Date Events and Creator of Planner’s Lounge, to share her experience with us as owner of Studio Wed in Denver.  StudioWed is a boutique wedding library, showroom and concierge service in Denver. Here’s what Debbie had to say…

Learning about Studio Wed…

I first learned about StudioWed randomly on Twitter. I hadn’t heard of the wedding collective concept before but I fell in love with it the moment I read through the website. I could see that opening StudioWed in Denver would be a great resource for brides to find and meet with all their wedding professionals in one place. I also saw the incredible opportunity it provided to vendors to have a great meeting space, a community of other professionals and a marketing tool unlike any other.

At that time, I was considering renting a studio space with a few other vendors but hadn’t made any decisions. When I discovered StudioWed, there was only one StudioWed open – the original studio in Asheville, North Carolina.  I spent the next month emailing and chatting with Nicole Riley, the founder, about how it works, the cost, the pros and cons. At the time, it seemed like an enormous risk but also a calculated risk. I did my research, asked a ton of questions and met with Nicole and her husband Ian for an entire weekend in Asheville along with a visit to StudioWed in Atlanta which had just opened at that point. My husband and I decided it was a solid investment and business plan.

The power of a reputable brand and established operations…

I knew I could try to use this concept and open my own studio with vendors but I realized the power of having a national brand along with the support of the other owners. Opening a studio was a much bigger task than operating a small planning business from my house. It involved a lease, real estate, construction, overhead costs and a completely different kind of marketing. In addition to those unknowns, I would have had to figure out membership rates and how to manage and promote 30+ businesses. I quickly saw the benefit of purchasing a license agreement to bring StudioWed to Denver instead of spending time (that I didn’t have) trying to figure it out on my own. The founders, Nicole and Ian, had a tried and true system of managing vendors, a marketing plan, a pricing plan, a ROI spreadsheet with real numbers plus a ton of experience with commercial real estate and running businesses. Part of our agreement included their help to ensure StudioWed Denver would be a success. Plus I totally connected with them and knew we would work well together.

Challenges of licensing…

The tough part of the decision was how to finance the purchase of a license agreement.  My husband and I certainly didn’t have the money and had never tried to get a business loan. I decided to book a few extra weddings as a planner plus we borrowed from parents and took out a business loan. With the tools that Nicole and Ian had, we knew the general time frame when we would be able to pay off loans and become profitable.

Success and sustainability…

Fast forward to today and I know I made the right decision by purchasing the rights to open StudioWed in Denver.  We have been open for over two years and I couldn’t have done it on my own. Having the support of the other StudioWed owners is so incredibly helpful. We bounce ideas off each other, share what works, share what doesn’t and brainstorm future plans.  We all have solid systems in place to manage our studios. The tools I’ve learned from StudioWed have also helped me manage my planning business better. I have a wonderful studio manager who handles the day-to-day details and works with our StudioWed brides while I focus on our events, marketing and future growth.

I’ve learned a great deal about myself from opening the studio. The experience of working with many vendors and promoting each business along with the studio as a whole is no joke. It takes time, education, determination and dedication. The toughest part for me is when a vendor leaves the studio. I know not to take it personally but it’s still frustrating when it happens. On the flip side, I am thrilled when we bring in a new vendor who is the perfect fit for the studio and for StudioWed brides.

When I opened StudioWed Denver in 2010, we had two other wedding collectives open within a month. Unfortunately both are now closed. This is a tough business model to create, manage and make it successful. I definitely made the right decision by buying into StudioWed which is an established, successful and reputable national brand.

Hop on over to Planner’s Lounge and learn more about Debbie and her business resources.