by Gabe Hilado of Zenpo Software Innovations
Ten years ago, at the peak of the dot-com boom a group of friends and I decided to start a company. We were all working together for the same company at that time and whenever we would get together, as we talked about Information Technology work, we started opening up to the possibility of starting our own company. Hey, if all these dot-com companies were striking gold, why not us? As we deliberated about this possibility, we started scouting for potential customers. We had a few business opportunities in mind and convinced ourselves that they were something we could go after. My friends and I became business partners when we started our IT company and got incorporated.
The moment the company was incorporated, we tried to aggressively sell our services. As we talked to the potential leads that we had identified, we began to realize that they were not going to generate business for us. Harsh reality sunk in and our master plan wasn’t going to work! We tried the cold-calling approach to get other customers. We had to resort to cold-calling because we knew nobody. The dot-com bubble had burst. The economy was going into recession. To make matters even worse, we had all quit our jobs in order to pursue the dream of running a business. We were jobless and had no other customers lined up. Our personal savings were burning really fast. We had a few months. Eventually, we were forced to find employment.
Five years later (5 years ago today), I was working for a small boutique software company but got burned out working there. I turned in my two-week notice but had no job lined up. My boss thought it was odd that I would quit with no prospects. I just wanted to clear my head and recharge my batteries, I told him. Two weeks after I left that company, another opportunity to start a business presented itself.
While working for that small software company, I developed a mission-critical patient-information system for one of its customers, a medical institution. When they found out that I left the company, the medical institution contacted me and asked if I’d like to be a consultant and continue supporting the application that I developed for them. My former boss (who is the president of that company) was gracious enough to allow me to conduct business with that medical institution. There was no way I'd pass up on this second opportunity in starting a business. This was a lucky break!
Two years later (in 2007), I converted the sole-proprietorship into Zenpo Software Innovations, LLC. Zenpo Software Innovations has been in operation since and have an average annualized growth of 40% for the past three years. There are some lessons-learned that I’d like to share with you, things that I’ve learned in this journey in starting a business:
- Network and connect with others before you need to. Recall that in my first attempt to start a business, my partners and I put all our hopes in a handful of potential customers. This is fatal in business! If you nurture relationships now, it is very likely that you will get business opportunities later through referrals and such. When you network, be sincerely giving to the other people. In other words, do not network with the mentality “I have to make a sale”; it will never work. Since the beginning, all my sales have been from companies that know me or through referrals from friends!
- Cash is king. The more cash you can save up before and up to the early days of your business, the better you are. True, there are many ways to infuse cash to operate a business. But I’m not just talking about the initial seed money to start the business. I’m also talking about how you spend the money once the business is up and running. Defer getting an office in the beginning. “Donate” personal belongings such as computer equipment to the business instead of buying new ones. Be frugal in how the money is spent until you get a good cash flow in the business.
- Bootstrapping works. I never had to borrow money or ask for investor money to start my IT software business. Zenpo Software Innovations was created with only $1000 (incorporation fees plus initial deposit to the business checking account). Ten years ago, my partners and I made this fatal mistake of quitting our jobs to pursue the business dream. You can start a business today for very small amount of money while you’re still employed by another company. This way, if your business idea doesn’t take off, all you’re going to lose is time, not your home. Bootstrapping can give you the opportunity to start and grow a business while limiting your risks in case your plans don’t pan out.
- Prepare yourself for hard work. I will be honest with you—owning and operating a business is no cake-walk. Running a business requires a lot of responsibility. It will require that you put most if not all of your energy into it, especially in the beginning. There will be many things that you will need to educate yourself on: rules and regulations (local, state, and federal), sales, marketing, and accounting. This might mean less time to see your friends and family. This is a sacrifice you should be ready to make. The rewards of owning a business are well worth all the effort though.
I am the sole owner of my company now. But even though my former business partners and I are on our own separate paths now, we learned from our mistakes ten years ago and use those lessons to better ourselves. One of my ex-partners is now out of information technology industry and is successfully running a field-services company. Another ex-partner has turned into a networking “maven” and has this vast network at his disposal when he launches his own business soon. If you ever dreamt of starting a business, it can be turned into reality. Each person will have his/her own reason for starting a business. But whatever it is, if you are truly passionate about it, if you’re up for the challenges, and if you think you can contribute and make the world a better place through your products and services, go for it!
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Gabe Hilado is currently a SharePoint and Web applications developer and the principal consultant at Zenpo Software Innovations, LLC. He has 18+ years experience in solving business problems and improving existing business processes through custom software solutions and Web applications.
Website: ZenpoSoftware.com | Blog: SPDeveloper.net | Twitter: @GabeHilado
