Rhonda Kallman will tell you how exhilarating it is to reinvent yourself. She's on her third career now. She started as an administrative assistant at Boston Consulting Group and then co-founded Boston Beer Co. (SAM) in 1985, introducing Samuel Adams, one of the most successful new beers of recent times.
Today, with an initial investment of $200,000, she's founder and CEO of the New Century Brewing, which in September, 2001, introduced Edison, the only patented light beer found on the shelves at Trader Joe's grocery stores. She recently also launched Moonshot, a beer with caffeine. "It's the beer that picks you up and keeps you awake," says Kallman.
Starting a business sure is an exciting undertaking. But before you make the big move to starting your own second act, check out these tips offered by entrepreneurs:
1. Experience counts. First off, people who have already had a career -- whether it's at a corporation or even running their own business like Kallman did -- have a distinct advantage. They come with a ready-made set of skills and experiences to draw upon.
"Many have had training in marketing, budgeting, accounting, managing projects, and inventory management, and that gives them an easier start than those without any experience at all," says Joy N. Ott, regional president for Wells Fargo Bank, a big lender to small businesses.
2. Fund the dream yourself. A big plus from a financial standpoint is that entrepreneurs who have had a corporate career can tap into savings, an early retirement package, or even a 401(k) account to start the businesses. Startup money and work experience are key to securing bank loans, says Maria Coyne, executive vice-president at KeyBank and head of Key4Women, the bank's women-owned-business program.
"They already have skin in the game, and that's a distinct advantage," says Coyne. At times the work experience and initial seed money can also help in securing the federal Small Business Administration as a guarantor in a commercial loan. And make sure you have enough reserves left for the odd curveball that the new business might throw at you.
3. Oodles of patience. Experience and seed money are great, but they don't guarantee success. Even Kallman, who's on her third career, says it's hardly a cakewalk, and the first thing entrepreneurs have to keep in mind is that the road to success is long and arduous.
"It definitely takes twice as much time than you will anticipate," she says. Today, after four years in her latest venture, she sells 35,000 cases of Edison beer, admitting that it's only half of what she was hoping she would sell in that time frame. Then she remembers that even Sam Adams took eight years to become a truly national beer that was available in every supermarket chain in the country.
4. New challenges. When Kallman got into the beer business, little did she know that just to reach the consumers who would buy the beer, she would have to understand a three-tier system of distribution -- brewery to distributor to retail shelves. "You have to jump through many hoops to get your product to the consumer," says Kallman. Then she learned that every state has different sets of laws and pricing, and that her company needed 50 different wholesaler brewing permits to meet various licensing requirements.
That's on top of challenges from the big guys such as Anheuser Busch (BUD), which makes Budweiser and wields tremendous influence on vendors whose livelihood depends on distributing the top-selling beers. At times, some vendors would say "Sorry, we can't carry your beer anymore."
5. Get a lawyer and an accountant. To prepare for such experiences, find an attorney and a CPA who will put the processes in place to get the business on a solid footing. Many entrepreneurs recommend tapping immediately into local business councils and chambers of commerce for referrals.
6. Network, network, network. You want to get clients, expand your business, and hire employees. How do you do that? Networking is more critical than ever when you own a small business.
"Get referrals from your former clients, and even join their organizations so that those members can be your clients," says Linda Hunt, president and founder of Sum Solutions, a financial planning company in Trumbull, Conn. She started Sum after a 12-year career at Pitney Bowes, which provides business consulting. Such referrals, Hunt found, also made her job easier, since she had already served a client in the same industry.
7. Diversify. Even if it doesn't seem as if all your eggs are in one basket, think about diversity. Hunt's business sees spurts of clients in the same sector, usually because of referrals. And at one time Hunt looked at her portfolio and saw that she had architects, real estate agencies, builders, and interior designers -- all clearly tied to the housing market. She quickly decided that unless she wanted to be hit by any downturn in that business, she had better diversify her client portfolio quickly.
8. Build it and they might not come. Marketing is critical. "There are just so many choices out there," says Kathy Charlton, a former senior executive at Texas Instruments (TXN) and current owner of Olympic Cellars, a winery in Port Angeles, Wash. Indeed, Charlton says a new winery opens up almost every week in Washington State, so getting out the word is very important.
Charlton joined the local visitors and convention bureau to showcase her wines and include a visit to the winery in their marketing materials. She also got involved in the local economic development council, where she got an expansion loan.
9. Wear many hats. Charlton says it's not that she was unprepared professionally. But she was unprepared for the variety of tasks -- she worked the till at the bar, managed the finances, and learned how to make wines. Besides, at her corporate job she didn't feel like she was responsible for any lives. Now, she says, "I have two ladies who work with me and depend on me for their mortgage. That's huge."
10. Get innovative. Charlton is inventive when she wants work done. Because harvest season lasts only a few weeks, her small winery needs volunteers during that time to pick and crush grapes and assist with bottling. So she forms partnerships with local nonprofits where volunteers can earn a bottle of wine for every hour they work. They can help earn money for their cause by auctioning off the wine at a fund-raiser that Charlton then hosts at the winery.
As you consider staging your second act, here are a few organizations that can provide help:
1. General information:
Small Business Administration: www.sba.gov
2. Networking groups:
Small Business Meetup
Women can tap into organizations that support women-owned business such as www.nawbo.org and www.womanowned.com, among others.
To join a local chamber of commerce, choose from a list at www.uschamber.com
3. To get an accountant, you can tap into www.smallbizaccountants.com for a short list and then double-check their backgrounds with your business contacts or ask them for referrals.
4. Ditto for lawyers, and you can get a basic list from lawyers.findlaw.com
5. To find employees, you can advertise in local newspapers, or tap into the U.S. Employment Service, a national labor exchange, or browse the online job sites such as Monster.