How to Get Rich in America
Meet a dozen entrepreneurs (and a dozen success stories) -- they're proof
that you don't need a lot of money to make a go of it, but you do have to be
smart about how you invest your energy.
Smoothie operators
Kyle and Aaron Campos, 27 and 33
Buckeye, Ariz.
Lesson: If you must borrow from your friends and family, keep it formal
The downside of mixing business with blood should be obvious -- or at least
it will be when you start getting late-night calls from Aunt Tillie asking
about your schedule for an IPO. But hitting up relatives is how a lot of
businesses get going. It's what Kyle Campos and his older brother Aaron had to
do.
In 2004 the brothers, both software engineers, quit their jobs in Santa
Barbara and decamped to Buckeye, Ariz. After visiting relatives there earlier
that year, Kyle had become convinced that the town was "filled with wide-open
opportunities," especially compared with the software biz. "The tech sector was
getting hit hard," says Aaron. "I didn't have a good feeling."
Aaron and Kyle, neither of whom had run a business before, began
brainstorming about starting one together. Both had frequented a smoothie joint
in Santa Barbara, and they fell in love with the idea of starting their own.
They found an industry consultant online who helped them write a business plan.
Then they hired an experienced designer. The Main Squeeze would be a
1,200-square-foot store with hardwood floors and stainless-steel tables. And it
would cost more than the $130,000 they had saved.
That's when they drew up a list of 40 friends and relatives they could
solicit as investors. "We wanted it to seem like we were offering them an
authentic business opportunity," notes Kyle. For that they turned to
CircleLending, a site that helps informal borrowers create formal lending
deals. The siblings spent $99 to set up a loan agreement, choosing an
attractive interest rate (9%), a repayment schedule they figured they could
afford (either five or seven years) and a $1,000 minimum. Four folks each lent
them $1,000, and another four each threw in $5,000. Last year the Campos
brothers whipped up a profitable $210,000 in sales, and they've been paying
their investors on schedule for close to two years. Says Kyle: "Not one has
complained."
The game game
Michael Vien, 36
Beverly, Mass.
Lesson: Prep as much as you can while you're on someone else's payroll
On the surface Michael Vien's move sounds ridiculously impulsive: He walked
away from a mid-six-figure job in product development at Fidelity Investments
to make games for kids. "I got strange looks from everyone," admits Vien. And
that was before he said he was intent on making board games -- you know, the
kind folks played before computer games.
Yet in a key way, the move was thoroughly calculated. By the time he left his
job this past February to make Poppo Brands a full-time occupation, Vien had
already designed the word games Poppo and Zotto and tested them on 500
children. He'd manufactured thousands in China and found free storage space in
a friend's warehouse. And he was signed up for the Toy Fair, the industry trade
show, and had stashed away $200,000 -- half from savings, half from friends --
enough for nearly two years, according to his budget. All while working
full-time.
Vien, who had toiled at a desk for 14 years, came up with his idea on New
Year's Eve 2005 while playing a board game with his two kids. The next morning
he grabbed 24 games from store shelves, then used the parts to make a prototype
of a game that requires players to press a plastic "popper" to shake an
eight-sided die covered with letters. Vien often worked from 10 p.m. to 2 a.m.
writing a business plan and finding suppliers in China. He even took night
shifts at toy stores so he could gauge consumer interest, see which packaging
worked and figure out how much to charge. Six months into his part-time
venture, he told HR he had something on the side. Another six months later, "I
opened the escape hatch and out I went," says Vien, who sold almost $50,000 in
games within 90 days of leaving.
Design for living
Sandy Ip, 28
New York City
Lesson: Do what makes you happy -- because at first, happiness is likely to be
your main reward
Sandy Ip is still a little stunned at what hard work it is to build a
business. She sounds almost apologetic as she tallies up her first jewelry
line's sales: $45,000 in eight months. "Not great, I know," she says. Then
again, founding a jewelry firm was not what she expected to do or what was
expected of her when she earned her M.B.A. "My parents are totally against
this," says the Hong Kong native. (She has yet to tell them about the $30,000
mortgage she took out on her apartment for seed money.)
Two years ago she started importing jewelry from an Asian factory run by a
business-school friend and selling it at crafts shows. Sensing she could do
more, she quit her job at a real estate investment firm in 2006 and abandoned
the Wall Street career she seemed destined to have. "I wasn't really happy,"
she says. "I had done what my family wanted."
But she knew zilch about the jewelry business. She began reading blogs and
magazines, and she quizzed every sales rep she met. She soon realized that she
wanted to design her own line, which took six months. Her factory-owning friend
agreed to make samples. Ip used Google to track down every jewelry showroom in
New York City, then called each. The few that returned her calls got photos; if
they kept talking to her, she brought them sketches. Her persistence paid off
when one eventually agreed to sell her work, and that break earned her the
attention of Bloomingdales.com and Off Saks Fifth Avenue stores. (She also
sells direct to consumers over her Web site, ippie.com.) "We're moving ahead,"
says Ip. "And I'm doing what makes me happy."
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