Search Results for: entrepreneur interview

Even in these tough times, there are still plenty of motivated and passionate people taking risks and starting new businesses. One of these folks is Lester Hutt, who is the founder of BevShots.com, which takes microscopic photos of your favorite drinks and turns them into beautiful art. The piece shown above is English oatmeal stout. I know Lester through a long-time friend, and he agreed to share some of his business experiences as well as how it has affected his family’s personal finances.

What was your inspiration for Bevshots?
I was working as a business research analyst at Florida State University, and my job was to find possible business opportunities out of university research projects and patents. I came across the work of research scientist Michael Davidson, who took photographs under a microscope of a variety of items including DNA, biochemicals, and more. He also did cocktails, which he initially used for a tie collection.

I’ve never really understood abstract art, like a blue wall at a modern art museum that is supposed to express “man’s frustration with industrialization in the 20th century”. I thought that this would be a great opportunity to make a form of modern art that is affordable to the masses.

What previous experience did you find most useful in starting this new business?
For one, my time working for Apple taught me the power of good industrial design and creating a great user experience. In addition, I had just spent the last several years running every aspect of a small business, from product development to managing employees to sales.

How did you come up with the initial funding costs?
We used a combination of loans from family, personal cash reserves, and a revolving line of credit with local community bank. Thanks to my existing banking relationship from the aforementioned small business, it wasn’t difficult to secure a loan with relatively favorable terms.

How did this affect your personal finances?
It definitely affected us quite a bit. For one, we went from two incomes to having only income to support our family. We started looking for places we could cut back, including going out to eat, canceling our cable television, clothes, and travel. We’re also thinking of buying a used car as our next work vehicle.

Besides trimming expenses, we also found that we were unable to take advantage of other investment opportunities like real estate that we might have otherwise pursued. We do still maintain an emergency fund with 8 months of liquid cash. Even in a worst-case scenario for the business, we will still be okay.

More after the jump:

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Today, I wanted to share an interview involving a unique website business thought up, constructed by, and maintained primarily by just one person. Maury is a long-time MMB reader and e-mailed me recently about his new venture – PennyPortrait.com. There, you can purchase a kit that allows you to create a portrait of Abraham Lincoln solely out of differently-shaded pennies:

Each kit includes a poster of Abe Lincoln made from images of actual pennies. The poster is suitable for framing as is, but with a little effort, some glue, and 846 of your own pennies, you can have a unique work of art that truly shines. (No, really… it shines!)

Here’s the interview:

Where did you get the idea or inspiration?
I read an article online about a father and son who created a giant portrait of Abe Lincoln out of pennies. Their image was 24″ x 36″ and they used two shades of pennies. I thought other parents and kids might enjoy a project like this and went about trying to create an improved, easier to assemble version on my computer. Using four shades of pennies, I was able to decrease the size of the image to 18″ x 24″ (846 pennies) which seemed a bit more
manageable.

Did you set up the website yourself? Do you have previous experience in this area?
I have a background as a graphic designer, but had only created a handful of small sites previously. The trick was to use one of the various free CSS templates available on the web and go from there. For example, the Penny Portrait site is based on this free template. Using a free CSS template allows you to create an impressive site in short order. Some of the graphic
elements took a little bit longer, but the layout was a snap.

Is this your first side business?
This is my first retail business of any kind. I’ve had a lot of experience with service businesses (animator/designer/consultant), but I’d never actually sold anything tangible before. Part of the reason I wanted to do this project was to learn how a retail business works with inventory,
suppliers, sales tax, credit card processing etc. It has been extremely educational from that standpoint.

Who sorts the pennies? Are you using child labor? (You could fund your child’s IRA this way…)
I just sell the kits, so customers are responsible for supplying and sorting their own pennies to glue on the poster. I had considered selling completed portraits, but I think the real satisfaction with something like this is to have something on the wall you created yourself. (That and shipping all those pennies could get expensive!) The sorting part is surprisingly easy if you have a bunch of pennies to start off with. I was able to sort enough pennies watching TV one night for at least two portraits. As far as funding my kid’s IRA, I toyed with the idea of paying him a “talent” fee to be included in the photos, but thought I’d better not push my luck with the IRS – He is only eleven months old.
(My mistake, the buyers provide the pennies. That’s much better!)

Do you construct the kits yourself, or are they put together by a third party?
I have a little assembly line in a spare room where my wife and I put the kits together ourselves. Each tube holds a poster, a booklet with fun facts about Lincoln and coin collecting, an assembly guide and a pouch with a 1943 Steel Penny. At this point, other than marketing, that is really the only time consuming part of our business.

How did you decide on pricing, and not making it too high or too low?
Pricing was one of the toughest decisions to make. I talked to a number of people including retailers to get a general idea. It is a unique product with no competition, so I’m not forced into competing on price – which is nice. My competition ends up being other unique products you can buy for about the same amount. One thing I learned is that brick and mortar resellers of your product typically use “keystone” pricing. This means that retailers expect you to sell them products at 50% off the suggested retail price. So if the suggested retail price is $20, a retailer will want to buy them from you for $10. This only applies to bulk orders, but my suggested retail price needed to be high enough that I could still make a little profit through traditional retail channels in addition to e-commerce.

What other difficult decisions have you had to make?
The toughest decision was how many poster to purchase initially. I wanted a high quality product, so didn’t want to skimp on printing or materials, but printing can be quite expensive. There are online places like PSPrint.com, which will print posters for you at great prices, but the paper quality is lower and when you include shipping, the savings disappear. I ended up going with a respected local printer to avoid shipping costs and to oversee the quality of the product. The trick with printing a poster this size is the initial setup fee is about $1,000 whether you print one poster or one thousand. My fun little “learn about e-commerce” project suddenly got expensive! Of course, the more you order, the cheaper it is, but it was
nearly impossible to guess initially what the demand for a product like this would be.

Another tough decision involved shipping tubes. I really liked the way my product looked in a clear tube, but the cheapest supplier of clear tubes charged $1.40 per tube and had a minimum order of 500 units. Cardboard tubes cost about half that and I could order just a few at a time. I ended up breaking down and ordering 500 clear tubes, but am using those strictly
for retail. Online orders I ship in the more durable white cardboard tubes. It was a tough decision at the time because $700 is a pretty big upfront expense for shipping tubes! (Not to mention I have a garage full of them.) This is one situation where my design sense vetoed my business sense. We’ll see how it works out.

How many hours a week do you spend on this project?
I would guess we spend about 5-10 hours a week on it at the moment. I have a full time job, so I mainly work on this in the evenings or on weekends. At this point, it is simply a matter of assembling the kits, and shipping them out as we get orders. My wife recently left her job to stay at home with our first child, so she is a big help in this regard. The only other thing that takes time is marketing. I’ve found that sales are directly proportional to how much effort we put into marketing. My wife does a lot with marketing as well.

What forms of advertising are you pursuing?
We use Google Adwords which is absolutely fascinating. It allows you to run variations of ads and use different keywords to generate targeted, effective ad campaigns. Google has shown my ads thousands of times and provided me with valuable feedback on who my target market really is. At the end of the day, it is a great business model because their interests are perfectly aligned with yours. They only make money when people click on ads, so it is in their best interest to make sure your ads appear where they will be clicked. I have an advertising degree, and one of the things that stuck with me all these years is that by simply adding the words “free” or “new” to an ad will cause it to drastically improve results. I tried this theory out in Adwords, and sure enough those ad variations were my most effective. Google
Analytics has also helped me in seeing what parts of the site people visit after they hit my homepage. I’ve been so impressed by Google I actually broke my rule of only buying index funds and picked up a little GOOG after the recent market crash.

In addition to Adwords, I’ve also had success advertising in various online forums. For example, I will hop onto a coin collecting message forum and give a free kit to anyone who guesses a number I’ve chosen between 1 and 100. I end up giving away a free kit, but I typically get about 50 potential customers to look at my product and even comment on it! It has been useful as a marketing tool and also for improving my product based on comments.

Oddly, one of the most successful forms of advertising I had nothing to do with! Someone submitted my site to “Stumbleupon” and it immediately received over 1000 hits. Stumbleupon is a very cool social networking application where users give a “thumbs up” to sites they find interesting or entertaining. By installing the Stumbleupon toolbar, you can rate sites you visit or click on “stumble” to have it take you to random sites others with your same interests rated highly. I was pleased to see so many people liked my site.

What other backend tools and/or third-party systems do you use?
I use E-junkie for my shopping cart system and have been blown away by the product and support. It costs me $5 a month for a polished shopping cart system that works flawlessly. I even contacted them about a unique problem I had (Texas charges taxes on shipping & handling, many states don’t) and they were nice enough to add that ability to their system. They also have a simpler version they provide for free if you don’t need certain features.

I went with Google Checkout for the payment processor for a couple of reasons. It was really easy to setup and was cheaper than PayPal. I was worried with PayPal that people would think they needed a PayPal account when in fact, all they need is a credit card. Google charges me 2% of the purchase price + .20 cents per transaction. So I pay Google .60 for every 20 transaction which is reasonable. They have a complete system you log into that makes billing and shipping a snap. The final reason for using Google Checkout was that when I spend money via Google Adwords, they kick me back a portion of what I spend on advertising in the form of free transactions. So if I spend $50 on Adwords in a month, Google will process
$500 worth of transactions free for me that month. PayPal and other merchant processors couldn’t compete with that.

Great. So how’s business?
Business is going well! We’ve sold over 100 kits so far and are really just learning how to advertise via the internet. This week, for example, we are exploring marketing via Amazon and Yahoo in addition to Google. We are also looking at the possibility of getting in some retail catalogs and have been working with local toy and coin shops who are now stocking the product. It’s very satisfying whenever an order pops up in my inbox.

Has your businesss been affected by the economic slowdown, or is it too early to tell?
The product is pretty unique, so I think for the people who want it, the price is not prohibitive. My main problem is making sure people know my product exists! It really doesn’t fit into a traditional product category which makes it a bit tricky to advertise. As the product just launched, I’m going to miss some Christmas opportunities (e.g. catalogs and retailers) but I’m hoping 2009 will be a good year for this product. There will be four new penny designs released next year to commemorate the 100th anniversary of the penny and Spielberg is also making an Abe Lincoln movie starring Liam Neeson. I’m hoping these events might generate some interest in pennies and Abe Lincoln. They certainly can’t hurt!

— End of interview —

Recap
I want to thank Maury for letting me pick his brain and see into the “nuts and bolts” behind PennyPortrait.com. I think there are a lot of us (me included) that have had their own niche ideas but haven’t gotten over the hump to making it happen, and I think he showed us some practical tools and tips to help us along.

Look for a giveaway of these neat kits soon. If you can’t wait, you can get $5 off using the coupon code “MyMoneyBlog” (I get nothing). If you have any further questions for Maury, please leave a comment below. If you’re an entrepreneur with a unique story and would like to be interviewed here as well, please feel free to contact me.

Past Entrepreneur Interviews:

• Irina Patterson, Balloon Art Entertainer
• Dennis, sells custom Greek apparel online and locally
• Dan, sells titanium money clips online

It’s not every day that you get to interview someone who:

• started out as an Emergency Medicine doctor in her native country of Russia,
• went on to be a body double for Cindy Crawford,
• is a former public relations executive,
• has been reading my blog for nearly a year 😉 ,
• … and now spends her time twisting latex balloons.

Irina Patterson is a balloon artist, usually working at upscale events like cocktail hours, galas, art dinners, or yacht events. She is a great example of how following your passions and having an open mind can lead to a fun and flexible self-employed business. Although she admits that it is not passive income, she has managed to build what she terms a “money printing press” since she has all the work she can handle.

I wanted to learn more, so below is an e-mail interview that I recently conducted with Irina:

How did you get started as the “Balloon Lady”?

Believe it or not, I have never seen balloon animals until about 4 years ago. I don’t have kids and I don’t go to the malls. I saw balloon animals for the first
time at a private party and totally fell in love with the process. I love bright colors. It just made me happy. I guess it makes happy many other people too. Otherwise, how can you explain the demand for balloon art entertainment even now, when people cut down on everything.

How long did you practice making balloons before you started to earn money doing it? Did you worry about not making enough money at it?

I practiced at home for about a week. Then I went to a strip mall. Paid them $75. That was their monthly fee for allowing me to make balloon art
for tips. I made that $75 in tips right back on the first day. At the time, I didn’t know better at the time. I only paid fees like that for about 2 months.

You can find places where you can make balloon animals without rental fees. You can find restaurants that will PAY you to entertain their customers. In Miami restaurants usually pay $50-100 per 3-4 hours on a weekend + most customers will usually give a tip. You can expect to make about $ 150 for about 4 hours as a restaurant balloon artist.

But the best part is this. While you are entertaining at a restaurant, you are also marketing your private party entertainment. Private parties will always give you better return on your time. In Miami, on average, a balloon artist can earn $100-200 per hour at a private event. And you are usually booked for more than one hour.

I didn’t have to worry about making money as a balloon artist. At the time I was full time employed as a PR executive. But I couldn’t believe how easy it was to make money as a balloon artist.

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A few months ago, Dan of SuperiorTitanium.com approached me about advertising rates for his website selling titanium money clips. Although money clips are somewhat financially related, I thought it would be an even better fit to do an interview with him in exchange for some publicity. (No money changed hands at all.)

I’m always interested in the what I call micro-businesses run by one or two people, especially those selling physical products. Mainly, this is because I’ve always been turned off by selling physical goods, and have preferred to make money by either selling advertising online or by performing services. Let’s get to the interview:

Where did you get the idea to sell titanium money clips? Why titanium?

I’m an mechanical engineer and I’ve always had an interest in all things mechanical. Titanium itself is a very interesting metal, especially; since it is never found in it’s pure form and is basically a black sand prior to processing. To me it is pretty amazing that we even have titanium as a metal now and it was truly a major feat of engineering to get the process for refining titanium figured out.

I used to carry a leather wallet around, but it was pretty bulky and uncomfortable to have in my pocket all the time. I decided to make a money clip out of titanium, since it is very springy and will not fatigue and break over time like steel will. Titanium also allows the money clip to hold more and still spring back to its original form allowing me to hold my bills and credit cards along with my drivers license! The money clip worked very well for me and my friends liked it and they bought some.

I decided to try and sell them online with a very basic website and using Paypal to accept payments. I tried some advertising with Google Adwords to get traffic to the site and happily people purchased the titanium money clips and there were repeat buyers who were buying them for their friends. This inspired me to keep selling them and to not only improve on the design, but to add in different variations to suit different tastes. Of course sales were very few at first, but I stuck it out and it has paid off in the long run.

Your site looks very professional. Did you design it yourself or hire somebody?

The current website is designed by a very capable website design company and represents A LOT of work over time by myself and the designers. It was very important to find a company who was very good to work and fast to respond to questions, etc.

Is this your first online business?

This is my first online business although it is the 4th website design. I have a lot of different ideas, but I’m trying to stay focused in order to really build the business and not get spread too thin.

How long have you been running this site? Do you have others?

This site has been running for about 5 years now and although I’ve had many other product ideas I’m sticking to this one for now. My other ideas would require new websites, so there will likely be more sites in the next year or two.

Is this your full-time job? How many hours a week does it take to maintain and run?

It’s not a full time job and is run on 10 to 15 hours per week (with help), although the more time spent promoting the website the better the sales are, so I usually spend more time than that.

Do you dropship or do you hold your own inventory?

We manufacture our own money clips and hold lots of inventory, since everything is now made in batches for efficiency. This allows us to tightly control quality, delivery and all aspects of the business. I believe this is key to a strong business and quality products.

Can you give a range into the gross annual income of your website? (Ex. $1,000-$10000 or $10k-$50k or $50-$200k)

(declined to answer)

What has been the most difficult challenge in your venture?

The biggest challenge has been making people aware of the existence of titanium money clips and the benefits over traditional money clips and wallets.

What advice would you give to someone who wants to start a business selling consumer products online?

Do something you love to do because it will take passion to make your business a success and it is true that it doesn’t really feel like work (well 90% of the time it doesn’t!). You will also need to accept that it will take a long time to make money especially if you have a new product that people are not aware of. The money will come, but you will need patience and determination.

Any other tips?

Listen to your customers, since they are the ones who are putting/keeping you in business. I always try to be fair and reasonable because every satisfied customer is like a sales person out there and over time it is a powerful force working in your favor.

— end of interview —

Recap
I want to thank Dan for the interview. Here are the main take-aways for me:

1. Had an idea within personal sphere of expertise (mechanical engineering), and made a prototype.
2. Tried selling to friends first, then expanded.
3. Keeps trying to improve website.
4. Make product himself, and controls inventory directly.
5. Not a full time job.
6. Most time is now spent on marketing, not product development.

Now that I write this, I have some additional follow-up questions like what shopping cart backend software he uses. If you have some questions as well, please leave them in the comments and I’ll try to get them answered if they aren’t trade secrets. I haven’t had a chance to try out the product myself yet, but be on the look out for an upcoming titanium money clip giveaway. 🙂

If you liked this entrepreneur interview, also check out this interview with Dennis of OneGreekStore, a custom apparel store for the college Greek community. Finally, if you’re an entrepreneur with a unique story and would like to be interviewed here as well, please feel free to contact me.

Although many of us have thought about starting a small business, significantly less actually take the plunge. So when I read on Dennis’ Young Money Blog back in July that he had opened up his own custom Greek Apparel store, I was intrigued and have been following his adventures on and off since. Fast forward to today, and he’s attending trade shows and just spent over $20,000 on new equipment.

I wanted to learn more about his story, so I asked him for an interview. Here it is, condensed from an instant messenger chat we had:

Can you please give me a quick mini-bio of yourself?

I’m a 23-year old student at the University of Florida studying Marketing and Political Science.

So, when did you feel like you first started getting the entrepreneurial bug?

Actually, I was reading your blog a lot, as well as NevBlog.com. That got me started. I didn’t find any blogs that talked about students who didn’t have an income, so I figured I should start something. But along the way… my blog became an entrepreneurial blog too!

So no newspaper route when you were five or anything like that? 😉

Nope, my family was poor, so that stuff wasn’t even on our minds.

So how did you come up with the Greek store idea?

I’m in an Asian American fraternity, and I recognized that this portion of the Greek community, along with Hispanic/Latino and multicultural organizations, were growing. When you do a general search for “Greek store”, “Greek apparel”, etc. on Google, most of the sites focused on the National Interfraternity Conference (white fraternities) and Panhellenic Conference (white sororities). So I wanted to target a niche.

Did you have any experience in the clothing area beforehand?
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A couple weeks ago, I was looking to interview a reader who sells on the handmade online marketplace, Etsy.com. I was surprised to get over 30 inquiries, and so I made up a short questionnaire to help better understand what it’s like to sell goods on the site. 16 shopowners responded, with folks selling everything from soap to jewelry to vintage fabric.

Here are my questions and a compilation of all their responses.

How did you get started with Etsy? When?
There was a wide range of dates given, the earliest being April 2006 and the most recent being September 2009 (The site first launched in June 2005). Most respondents indicated that they were already active in their craft area beforehand, and Etsy simply offered them a new (and often better) way to sell their goods. Competitor sites that were mentioned include eBay, Artfire, and JustBeads.

Primarily, people learned about Etsy via word-of-mouth from discussion forums, other crafters, or friends. A couple of folks mentioned magazine articles.

What is your top-selling item? Why do you think it is so popular?
I asked this because I wanted to see a good representation of popular items. Positive features mentioned included that their item appealed to a broad crowd, was priced fairly, and made a great gift idea. Below is one item from each seller, along with a link to their store (in order of e-mail response). Many sellers sell one-of-a-kind items, so the item may be sold, but you can look around for similar items. Item prices range from $2 up to around $40. I love the variety!

• Sterling silver chain bracelet, Pandora style [susansheehan]
• Scrabble-style Glass Pendant DIY Kit [AnnieHowes]
• “Abandoned Fender Electric Piano” photo print [GatoRanch]
• Garnet Briolette Oval Lace Earrings [prettycheap]
• Cheerful and Fearless Giclee Print [111collagedesign]
• Toddler Aprons [EMCreativeDesigns]
• Happily Ever After Gift Tags [seasonaldelights]
• Linked Loops Petite Earrings [unkamengifts]
• Vintage white posies [papertales]
• Custom Map Pendants [XOHandworks]
• Natural Lavender Soap with Shea Butter & Oatmeal [krugsecologic]
• Crubbly the Nightmare Snatcher journal [Spiderbite]
• [BendinWire] Violet Niobium Spiral Ear Cuff
• Custom portrait work [Lavatican]
• Swarovski Crystal Red Ruby Briolette Set [pinkymonkey]
• Cable Knit Coffee Cozy [waysideviolet]

What is your revenue per month?

I promised to only share this information in aggregate. But my first impression was – Wow! Some people making serious money. Of course, at the other end, there are many people who are just starting out or are just treating it as a hobby. I forgot to ask if this was gross or net, but the fees are at most 10% of the gross, so it’s still very impressive.

Do you think the Etsy fee structure is fair? (20 cents non-refundable listing fee + 3.5% flat of each sale.) What would you do to improve it, or how does it change your behavior?
Interestingly, every single respondent felt that the fee structure was at least fair and reasonable. The fee can be significant, especially if you realize that it does not include PayPal transaction fees of 2.9% + 30 cents. You will notice that most items are at least $2, otherwise the Etsy/PayPal fees would kill all chance of profit.

Of course, people who really don’t like the price structure aren’t going to be Etsy sellers. However, many people noted that the fees were much cheaper than eBay. Also, selling items through a retail “brick and mortar” store or art gallery usually means giving up 30-50% of the retail price.

* Special Note: Re-listing Items
One common theme that I didn’t know about is the concept of “listing” and “re-listing”. Apparently, the search results on the Etsy site are sorted by how recently you listed the item. Therefore, there is pressure to “re-list” items regularly so that your stuff shows up higher on search results and brings more exposure. If you have 10 of one item, it is better to re-list a single item over and over as they sell. Others complain that re-listing sometimes doesn’t work properly, with items either taking a very long time to show up, or a bunch of items all showing up at once.

Is this a hobby, part-time job, or full-time job?
Most folks were split between hobbyists (sales are erratic and not required to live on) and folks who treat it as a full-time job. Most full-timers said that Etsy was a big part of their income as artisans, but not the only part.

— End of interview questions —

Most shopowners seemed very happy to talk about their products and experiences. I think part of this is that this is a labor of love that you have to really want to get into. It’s not like being a receptionist where you’re just working so that you can eat while doing your passion. This probably is your passion.

In general, there were a lot of common views with entrepreneurs from around the world. Etsy shop owners love that they see a direct relationship between hard work and results, unlike some 9-5 jobs. Customer service is important. It can take a long time to build up sales and a brand, but many see improvement each month. Networking with other Etsy sellers is very helpful.

A more specific tip would be that taking good pictures is very important. Got more questions? Leave a comment! I will let the sellers know about this post.

I’ve recently been interested in the website Etsy.com, which is an online marketplace for buyers and sellers of handmade items (and craft supplies and vintage items). I know someone who makes some pretty cute baby clothes with hand-stitched animals on them.

For sellers, the fee schedule appears to be pretty simple. You pay a listing fee of 20 cents for each item (nonrefundable if it doesn’t sell in 4 months), plus a flat 3.5% of every sale. The average sale is about $15-$20. With over $10 million is sales each month, this can be a easy streamlined way for creative people to make some money on the side.

I’m looking for a reader who is an experienced Etsy seller to do a sort of Enterpreneur Interview-type of post. You’ll get a chance to share your story and also publicize your storefront and products. Sound fun? Contact me 🙂