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?
Nope. I had ZERO experience in anything business. What I did have was a strong network of personal relationships, and some leadership experience in student organizations.
Are you doing this solo, or do you have partners?
I have two partners, both my fraternity brothers and good friends. One focuses on finances, the other on production, and I focus on sales. But we generally do all of those things together.
When did you officially start the business, and how is it organized?
We incorporated in June, and it is an S-Corporation. Business really got going in August… and jumped in November. A HUGE jump.
Really! To what did you attribute that?
In Greek organizations, people finish their “education” process toward the end of the semester. So people just started ordering stuff then. A major concern for us in the future is the seasonality of the business and how we can balance that.
That’s true. Where do the majority of your customers come from? From universities across the country through the web or from local schools?
The majority of our business is from people we know in sororities and in our own fraternity. But because of the internet, we minimize geographic barriers and we’ve sold products all across the country… primarily along the East Coast.
Do you pay for advertising, or is it mostly from word of mouth?
Not a cent of advertising has been spent. 100% word of mouth… and some good Google rankings… which I hope holds up.
Wow, that’s unique. Let me back up a bit, if you don’t mind. How much would you estimate your start-up costs and what were they for?
Hmm… 125 for hosting, 7 for the domain, 99 to setup the merchant account, $100 incorporate, and $100 to register with the county. I use VirtueMart, which is a great open source shopping cart. Saves us lots of money, so generally setting up the store was less than $500.
And the equipment?
That came much later… when we realized that working with other people to make our stuff sucked. The first machine was about $14,000. We actually purchased three more machines last weekend too.
Yeah, I just read that. Congratulations! So you started with outsourcing the embroidery and just taking orders?
We started with wanting to be the Online arm of a local business. Basically, I approached a couple of the Greek stores here in Gainesville, and offered to put their products online with hopes of getting a portion of the online sales. No one was really interested in our idea. So we then went to find local embroiderers and seamstresses to make our clothes. When we realized that the quality and turnaround time wasn’t to our satisfaction, we made took a huge jump of faith to order the first machine. As I’ve said, I’ve never been in clothing nor did I know much about really running a business. So we’ve had a significant learning curve.
I can imagine. Did you and your partners share the costs evenly?
Yeah. Credit cards! Ha ha.
Nice. At 0% I hope.
Yeah thanks to you!
0% APR is the only way to go. 😉 Did you write down a business plan? (either in the beginning or later on)
We tried too? dumped that, haha. We just jumped into starting the business and learned along the way.
So is there a date that you all plan to be profitable? Or has it already happened?
We hope to be profitable by the beginning of 2008. We actually already had our first month of positive cash-flow in January, which was why we decided to purchase more machines.
So, I have some wrap-up questions, but is there anything else that I missed or that you’d like to add?
We’re bootstrappers, and we’re all students. This means we watch every penny, and also that our time is crazy. For example, I mentioned that during November is when business reallypicked up. During that time, we were also hitting finals and other responsibilities. So I was on campus for 12-15 hours on end, with class in the morning, events at night, leaving the rest of the night to study and work. We had energy drinks to keep us awake and took turns as much as possible, just to keep the machine moving and filling orders.
What was your biggest regret and/or mistake in your venture?
That I didn’t start this business sooner. If I had more time think it would have been much more profitable.
What advice would you give to another person thinking of starting a small business?
Just do it. Like Nike. I think a lot of people fear the unknown, and also failure. Sometimes you have to take the leap of faith and see what happens. At the least, you’ll have an awesome learning experience that will prepare you for another venture 😉
I just wanted to thank Dennis again for his time doing this interview. His energy and attitude definitely motivate me to pursue more of my other money-making ideas. You can track future developments at Young Money Blog. If any of you other bootstrappers have a great story to tell, let me know!