Subject: Re: Intro and question
From: Rich Bodo <rsb@ostel.com>
Date: Thu, 27 Feb 2003 13:10:56 -0800 (PST)


> is it possible to build a business without a large nest egg?

I'm more of a peer than a mentor, but I'll take a stab at an answer.
Yes.  You already have a business targeting a large market, so you
really mean to ask how you grow from one person to 10, right?  You
know the basics: Become expert at delivering on a product or service.
Market to increase sales to increase revenue to save money to hire
people.  Along the way, here are a few things I have found that helped
me.

Consider your time.  I recommend the E-Myth by Gerber.  I loved
reading business process engineering books, but I never grokked the
application to micro business.  Now I do.  Gerber is a franchising
expert and really encourages small business people to look at their
business as their product.  The simplest process documentation for
accounting, inventory, sales and support processes can lead to
insights that save you a lot of time.  Hiring is one of the biggest
problems for me.  It's a very time consuming, risky process that has
caused me untold grief.  I have become proficient at utilizing
outsourced labor.

Consider your customers.  We put together a business plan when we
started out that had all the numbers you could want and none of the
information we needed.  What we needed, and we have gained the hard
way over dozens of trade shows and thousands of calls, was knowledge
of how our customers think.  What scares your customers?  What excites
them?  I just didn't want to have anything to do with these types of
questions until I had been hit over the head with the answers a
thousand times.  We are completely reworking our business based on the
simple truths we have uncovered about our customers.  You browse
through the sales and marketing sections at your local bookstore for
motivation here, but IMHO, you will need experienced mentors in your
field for input on this.

We still don't know much about marketing, and we don't actively
"market" in a traditional sense, so we shouldn't expect to grow fast
and we don't.  We do grow, however, month over month in revenue and
profit, very slowly.  This is primarily because we just hang in there
and satisfy most of our customers.  I have come to believe that this
is unusual enough behaviour that any business that can emulate it will
grow within their market by word of mouth.

So, in summary, I have a slightly longer answer for you than "you
write code".  If you approach a large market, show up to work, use
your time well, learn about your customers, and satisfy them, I think
you have an excellent chance of realizing increasing revenues.  That
said, you take another look at your real goals and motivations before
attempting to expand your business.  If you want to accomplish some
goal within your business other than just building a big business, you
might want to ask yourself if you will be able to do both at the same
time.

-Rich

Rich Bodo | rsb@ostel.com | 650-964-4678