Million-Dollar Second Acts
In today's uncertain job climate, some workers feel that the rewards of starting their own business outweigh the risks of leaving the corporate world (see BusinessWeek.com, 1/16/07, "Lure of Entrepreneurship Beckons Boomers"). Just ask Allison Karl O'Kelly, founder and chief executive officer of Mom Corps, a staffing agency that pairs experienced women looking for flexible work with companies seeking seasoned talent.
In January, 2004, O'Kelly left her executive role at Toys "R" Us, where she launched the Babiesrus.com Web site and oversaw an $11 million store, to start her family. But returning to the corporate world was difficult; her 8 a.m.-to-4 p.m. schedule was still not flexible enough for her to meet her family responsibilities. "I didn't mind working full-time (which I do), but I needed the flexibility to take my children to the doctor or go to school activities without difficulties. I started Mom Corps to meet my own needs for flexibility and provide that luxury to other moms at the same time," she says.
Going her own way has been invaluable for O'Kelly. Her company, founded in 2005, grossed $1.3 million in its first full year in business, 2006, and she's built her workdays to allow the flexibility to be the kind of mother she wants to be.
A few entrepreneurs have been pushing their businesses past the $1 million mark in recent years. Between 2000 and 2003, the number of firms reporting at least $1 million in revenue increased by about 6%, according to the IRS. Entrepreneurs' Organization, an Alexandria (Va.)-based group open only to businesses with at least $1 million in revenue, saw its ranks swell from 4,525 in 2002 to more than 6,400 in 2006, a 41% increase.
Of course, most entrepreneurs do not break the $1 million threshold in annual revenue. Take women-owned businesses, for example. Although women entrepreneurs constitute one of the largest and fastest-growing segments of the small-business sector, few of them generate $1 million or more in revenue. Indeed, according to the Washington-based Center for Women's Business Research, while 48% of all privately held U.S. firms are 50% or more owned by women and produce $2.5 trillion in sales, only 3% of them have reached seven-figure success (see BusinessWeek.com, 6/19/06, "Minting Women Millionaires: The Winners").
The keys to founding a successful second-act business, say entrepreneurs who have done it, are the same as founding any business. They include dedication, passion, financial and business savvy, and some degree of financial risk-taking.
Sense of Achievement
Many of these entrepreneurs say the experiences gained from the corporate world were invaluable in pushing their second act into the million-dollar realm. Dan Mahaney, whose 30-employee CertaPro commercial and residential painting franchise grossed about $1.8 million last year, worked as a CPA within larger firms for almost 20 years before starting his franchise. "A lot of franchisees are very good at selling the work and producing the work, but lose control of the financial end of the business. [My experience as a CPA] helped keep my thumb on the financial pulse of the business as well as the planning," says Mahaney.
Second actors rarely regret taking the plunge. Mahaney says he left his corporate gig "mainly just to have more control over my own destiny, maybe a little burnout, and just do something different. It was one of the best moves I ever made in my life."
Overwhelmingly, those who take the risk and achieve the goal of building their own $1 million business ooze with pride. "What do I love most about being an entrepreneur? Freedom. The freedom to set the direction of the company, the freedom to make changes, the freedom to set my own schedule…it's all good!" says Bill Macon, founder, president, and CEO of St. Louis-based Macon Electric Coil, an 80-employee, $8 million company that manufactures electric coils and solenoids for original equipment manufacturers.
"I had wanted to have my own company since I was a kid," he says. "After 10 years [at Emerson Electric] I decided that, if I stayed longer, I'd never do it. The higher [in the organization] you get, the tighter the golden handcuffs get."
For a slide show profiling million-dollar second acts from Calgary, Alta., to Temecula, Calif., click here.