The following is an excerpt of From Cubicle to Cloud: How to Start and Scale a Virtual Professional Service Business by Jennifer Brazer available everywhere books are sold.
Praise for From Cubicle to Cloud
“I’ve known Jennifer for a few years now, and it’s been a privilege to share some of the journey and see what she’s achieved and continues to achieve. She is an outstanding person and exciting entrepreneur. Not in the throw- away sense — that word is too often used these days — but in the high energy, innovative way that asks questions, challenges, learns from mistakes, works hard, and is prepared to take risks. Jennifer’s first chapter appropriately starts with ‘take the leap.’ This is an action-orientated, pragmatic book that inspires. Rather than stuffed with hyperbole, it provokes the reader to ‘take the leap’ — how refreshing! Happy leaping.”
— DANIEL RICHARDS, Business Development Director, My Firms App“It is simple. This book is fantastic. The world is changing, the way we do business is changing, and this impacts our small business owners. Jennifer’s take on how business owners can embrace the cloud couldn’t have arrived at a better time. This book provides insight that will show our business owners how to take the necessary action to continue to move business forward, in a different way. Thank you, Jennifer, for sharing this valuable information!”
— SEAN BALKMAN, VP, Solution Advisor Manager, Small Business Client Solutions, Bank of America
It’s time to embrace the cloud and find freedom for you and your business.
BOOTSTRAP BOOGIE
You don’t need seed money to start a business. Despite the popularity of investing in your own wealth and ventures using other people’s money (OPM), I see more businesses fail that accept pre-revenue startup funding than those who bootstrap their business right from the start. Even on Shark Tank, it’s rare to see a business that hasn’t already proven their concept get an investment. Why? Because the act of bootstrapping forces ingenuity and the wise use of funds. A business that can only grow by the reinvestment of its own profits quickly learns where that reinvestment will make the most impact to the bottom line and creates early practices that position it for success in the leanest of times. It is through bootstrapping that a business can achieve true scalability.
I signed my first subscription-paying customers in May 2007. By August, I had hired my first Bookkeeper and by November, my second. In July 2008, I lost a group of three self-storage customers that had come in through my colleague at the property management company, the catalyst customer mentioned in the Introduction. They left because of a failure in our process. The mistake was costly to their business and could have really hurt us if they had made us pay the losses or given a bad review. Thankfully, the only repercussion was the sting of losing three full-service customers in one fell swoop at a time when three customers made up one-fifth of my entire portfolio.
After that, business was steady until March 2010. That was to be the last growth month of any consequence for more than a year. The recession had caught up to my small business target market and they were shifting their strategy from, “Let’s have someone else do this work so we can focus on growth,” to “We can do this work ourselves so we shouldn’t pay someone else for it.” The purse strings were cinched, and by the fourth quarter of 2010, I hit an all-time low. During that entire quarter, the company made less than its second quarter in business. The business desperately needed my undivided attention in order to thrive.
In every startup, there is something I like to call a jumping-off point. That moment when you have to decide whether to stick it out or call it quits. The first quarter of 2011 was my jumping-off point. I had to decide if I was going to become wholly and solely dedicated to Complete Controller or let it dwindle and die. It was a grueling decision, but in February 2011, I said goodbye to my last drive-to-serve customer and focused entirely on the new virtual company. The company steadied with me at the helm full-time, although customer acquisition was matching attrition, and the monthly subscriptions were stagnant.
I had to solve the customer acquisition problem — and fast. I also needed to improve quality to reduce customer attrition. Finances were tight. I was making decisions about what bills to pay. I even let my Franchise Tax Board corporation fee lapse, which is something you have to pay every year to be a corporation in California. It was $800 a year and I needed that money to pay for the things that didn’t generate revenue like technology and keeping the lights on. When you’re bootstrapping, sometimes you have to make tough decisions, and this was one I had to make early on.
On the personal side, I had four roommates and I was working at my dining room table. My thoughts were always on how to make ends meet and how to grow the business so the next month would be different. Single mom, with no other wage earner in the household — at this point I had jumped wholly into the business without a safety net. There were no more bread-and-butter, drive-to-serve customers to cushion the fall.
If you have started your own company without funding, this probably sounds familiar to you. And if you haven’t taken the leap yet, I’m here to tell you that you will be tested each step of the way. However, if you believe in your vision and are passionate about what you do, you can be successful.
Desperation breeds ingenuity. For it is in your darkest moments that you will learn some of the foundational principles for your company’s scalability and survivability.
Early on, I decided that Complete Controller was going to be a million-dollar company. The financial model worked. It worked on paper and it worked in reality. But there were lessons I had to learn and steps I had to take to get the company where it is today. In this chapter, I’ll take you through my journey from struggling startup to multimillion-dollar firm. I will be sharing the lessons that I learned from my own bootstrapping experience and how you can apply them to your own self-funded virtual business or use them to build a survivable and scalable business even if it is funded by OPM.
Barriers to Growth
Once I had my company up and running, I began to notice some areas that really needed attention. I call these areas barriers to growth. Every startup has them and will experience them at different points along the journey. The key is to identify them early on and take the proper steps to remedy them. If you are not able to make an honest assessment of your barriers to growth and address them, your likelihood of success is low. Here were mine:
- Perseverance. We can’t talk about barriers to growth without bringing up perseverance. Hey, I get it. It can be scary when you’re starting out, particularly when you’re bootstrapping. You’ll need a hefty dose of it throughout your startup journey, which is why I’m bringing it up first. Throughout this chapter, you’ll see how unfailing drive and determination to see my vision through to completion kept me going every step of the way.
- Cash flow. Bootstrappers like me have to use their existing funds to get things started. My entire initial investment was dumped into developing the technology side of my business, because it would be a main driver of my virtual services, and I wanted to offer the best that I could to my customers. I’m not going to kid you. There were some lean times, but I’m glad I stuck it through. The sacrifices and challenges were well worth it in the end.
- Marketability. Your business, regardless of type, will need to be marketable. I knew I had my work cut out for me because virtual accounting services were not yet widely promoted concepts in 2007. Even in 2011, as the concept was beginning its emergence, we were a truly virtual company in a not-so-virtual world. But I knew that would change, and I’ll show you how I handled this barrier in the pages ahead.
- Customer acquisition. You can’t have a business without customers. So, how do you get them and, more importantly, keep them? I learned early on that I needed a good sales team to help me out in this area. I like the accounting side of my business, but that does not make me naturally adept at sales. If anything, the two types of people are not generally alike at all. I was inept, to say the least, and needed to bring people on board who could help me grow the business, and that’s exactly what I did. If you find yourself in a similar position, let go of the need to do everything and hire an expert. While you will feel an initial financial pinch, the long-term benefits of this investment will pay you back handsomely.
- Quality control. Now that you have customers, you want to impress and keep them, not only for the steady flow of income, but also for referrals. Creating a streamlined and efficient service takes effort and continuous review. This is where quality control comes in. It’s not something you do once. This lesson reared its ugly head time and time again as I was starting out, and we still work on improving our services and fine-tuning our quality control processes. Mistakes are expensive and repeating them, even more so. This is why we work hard to streamline and standardize our services, and I recommend that you do the same.
When you first start a business, these barriers aren’t always evident. They show up, though, as the business struggles to grow. Think like a bootstrapper and know that the solution to overcoming a barrier isn’t always to throw money at it. Sometimes the solution involves some time or restructuring. As with any bootstrapped startup, our early years were the toughest financially. Having made it through, I became comfortable with bootstrapping. I liked the feeling of being debt-free and nimble. And as we grew, I continued to implement techniques to keep us sleek and scalable. Bootstrapping isn’t the easier, softer way, but I am a firm believer that it is the best way.
PRO TIP
When your business is up and running, you will begin to notice barriers to growth. We can call them shortcomings. It’s your job to find and apply solutions that fit the business model and do not sacrifice your vision. Do not ignore these shortcomings. Denial will not make them go away; instead it will ensure that they cause inefficiencies as you try to work around them instead of solving them. You can’t fix what you don’t recognize. Start by taking an inventory of your business’s barriers to growth. Notice which areas are not performing the way you wish they would and create a plan to address them.