Home Is Where the Startup Is

It began with a family dog's bad breath. From that unlikely start, a thriving business was born

By Joseph and Judy Roetheli

How would you like to have no drive to work, no traffic to contend with, no road rage, and no dead time on the road? Home is where a lot of companies are started, and so it was with our own business, S&M NuTec, which we co-founded in 1996. The reason was pretty fundamental: It boils down to money.

A home-based launch -- in our case, a second-floor spare bedroom crammed with two desks and a host of file cabinets -- is simply the single biggest way a fledgling entrepreneur can hang onto cash in the early days. Home as headquarters has its issues, of course, which all trace back to the fact that it begs from Day One that the family get involved -- or as we shall see, not get involved. Another plus, however, is the emotional advantage of always having the dog to hug whether you're on a high or having a bad day.

All of this indicates that launching a home-based business is a multifaceted and finely nuanced decision. What we'll attempt to do in this article is peel back the layers so you can make the best of what is essentially a good thing.


  But first, back to that dog. Our company was started for want of a solution for Ivan, one of our family's two dogs, and his bad breath. Back in 1996, two events occurred within a few months that transformed us from bureaucrats to entrepreneurs. Joe was working in Kansas City for the U.S. Agriculture Dept. Asked to move back to Washington, D.C., where he had worked for six years previously, he demurred. He had had enough of the traffic, crime, and high costs of an urban environment. Two hours of every day devoted to fighting traffic was not his idea of a life, especially after living in Kansas City. Furthermore, our sons, then in high school, were very outspoken about not wanting to return to the D.C. area.

Secondly, Judy had tried many products in an attempt to improve Ivan's breath, without success. Judy challenged Joe to use his research and development background to solve Ivan's severe halitosis. It was these two events that drastically changed our lives.

So Joe spent about six weeks in the basement, mixing lotions and potions, and came up with a formula that turned Ivan's breath into Tupelo honey. Our company's incorporation followed quickly -- in August, 1996 -- and that's when the home adventure really began.


  Running the business from our home became a family affair. The decision about family involvement is generally an all-or-nothing scenario. You must involve your spouse and children all the way, or, conversely, not at all. The in-between typically doesn't work: bringing in the family to vent when there are problems, leaving them out of the highs -- and, yes, there are highs, even in the early days.

Having chosen the inclusive route, we began by naming the company S&M NuTec after our two sons, Steffan and Michael, who were in high school at the time. In the early days, we would asked the boys to package the product, which we called Greenies. They would handle that task -- and for very little pay, a few cents per package, often while watching TV. Remember, in a startup cash is king -- and kings are scarce.

An ownership stake on the part of the family, as we see it now, is the only way to assure the agreement and cooperation that is absolutely essential for a making a go of a young company. Doing so, however, isn't always a matter of asking and receiving, as it was with our sons.


  In the case of Judy, a former teacher, she had to be coaxed. Joe wanted her in because he needed both support and help. So he started small, asking Judy, for example, to take a few packages to the post office. Then he would ask Judy to read and edit something he had written. Finally, it was, "Hey, honey, how about doing this or that little thing?" And, over time, Judy became actively involved, although she readily admits that she got pulled in "kicking and screaming."

By 1999, three years into the company and still without an income, Judy had become fully involved and had assumed the title of president, whereas Joe had assumed the title of general manager.

Working from home undoubtedly has advantages, and if not for the fact that, by 2000, we needed to add an employee and thus move into an outside office, we might still be in the house. Judy and the boys called the cramped bedroom office the "cave," for Joe virtually lived there. Our "morning commute" was just a few feet from our bedroom. However, it was two flights of stairs to the basement, where we kept the copy machine. Sans traffic and frayed nerves, we found that we nonetheless needed to confront the disadvantages of working at home, foremost among them the fact that we were together all of the time, and in ultraclose proximity. Some couples we know wouldn't have made it. In our case, we found the need for antidotes such as steering clear of each other when times were really rough.


  When each of two exclusive marketers failed to provide the sales that we had expected -- and Joe was about ready to pound his fists on the desk -- Judy and the boys would get out of the house and go to the mall to shop. (They surely weren't shopping to buy, for we received no salary until 2000, and hence we had no disposable income.)

At the core of the matter is, of course, that home is supposed to be where the heart is -- a place to be comforted and supported -- and certainly not where the tension accumulates. Reducing the tension often meant getting out of the house. One solution was to face up to the role that money -- or the lack thereof -- was playing in generating tension. We learned to make no apologies for having to manage money extremely carefully: Board games rather than bowling. TV rather than the movies. Tea and lemonade at our house with friends rather than dinner out. All of the above became part of the fabric of our daily lives.

Another solution was to make time for our sons, and for one of our company's co-founders, namely Judy, to take the lead in that endeavor. It was she who worked 50 hours a week and would greet the boys when they came in from school, whereas Joe, with his 80- or 90-hour-a-week schedule, would remain in the cave and see them later.

Still another antidote was simply quality over quantity. With so little time and no money available for activities other than work, it became important that we elect what the other party wanted to do when there was time off. Joe, for example, has accompanied Judy on the shopping trips he doesn't particularly enjoy. With our younger son, no company-building demands could interfere with Joe's five-minute "time outs" for talking baseball.


  Funny thing about imbedding the business in the family home: Family becomes imbedded in the business. In our case, we always wanted to build a "family-oriented" culture in our company, so it's even more of a good thing that we started at home.

Today, S&M NuTec has 33 employees, and we expect to sell a robust 100 million Greenies this year. One of our sons, Michael, works for S&M NuTec part-time while he completes his college degree in aerospace engineering. Yes, it does help to have a rocket scientist in the company! (Our other son, Steffan, has completed his business degree.) We also employ a husband-and-wife team, encourage workers to take spouses on business trips, and we offer family-necessary benefits such as health insurance and a 401(k) retirement plan. Finally, we involve spouses in employee-recognition events.

To celebrate our biggest month ever, we recently took our entire staff to an upscale restaurant for dinner, followed by a romantic carriage ride, and a night at a posh hotel with breakfast the following morning.

In sum, we've learned how to play as much as we've learned how to work. Family does that. Home-based launches make the point abundantly clear. For entrepreneurs, home may be where the start up is -- but it's also so much more.

Joseph C. Roetheli, 55, and his wife, Judy E. Roetheli, 54, co-founded S&M NuTec, LLC. in 1996 from their home, naming the company after their two sons, Steffan and Michael.

Entrepreneur's Byline comes to BusinessWeek Online readers courtesy of EntreWorld.org, a resource for entrepreneurs that is sponsored by the nonprofit Ewing Marion Kauffman Foundation.

Before it's here, it's on the Bloomberg Terminal.