For one couple: cash flow from a squeegee
Robert Antonacci Jr. didn't know what to do. His new job ended just three months after he had moved his whole family to San Antonio from Beaumont, Texas, and their savings were running out fast. His wife, Sally, thought this was the time to start their own business. Although they had talked about doing this, and they had read about other small-business success stories in Entrepreneur magazine, they just hadn't gotten around to it. The lack of a job and ``the truck and rent payments'' were a powerful inducement to do so now.
Mrs. Antonacci called a phone counselor at the magazine's offices to find out what business to start. The Antonaccis decided on commercial window-washing, partly because it could be started with very little capital and could bring in cash immediately.
Because of their dwindling bank account, they could not wait for the start-up manual they had ordered to arrive. So over the phone, the counselor told Mrs. Antonacci how to start their new business -- what to wear, what to say to potential customers, and the kind of customers to call on.
Antonacci bought a window washer, a squeegee, and a bucket for $90.
``I was able to get money'' right away, he says. Wielding his newly acquired squeegee, he earned $40 the first day and more than $200 the first week.
``I was scared the first half hour,'' he recalls, as he tried to get the streaks off windows with the unfamiliar equipment. He had never washed a window before.
From that shaky first moment, though, he has never looked back. Through the trials of finding and hiring a good crew, taking on jobs that stretched his capacity, and learning quickly from the myriad of false starts that resulted, his confidence has grown. Expanding to include carpentry, landscaping, and janitorial services for other small businesses has netted Commercial Maintenance Contracting $30,000 in 10 months.
Many people who start their own businesses don't turn a profit so quickly.
But virtually unnoticed by the news media until just a few years ago, thousands of small entrepreneurs and business people have dropped out of the corporate scene to make it on their own.
They may have just graduated from college or need to get back into the work force after raising children. Or, like Mr. Antonacci, they may have parted ways with their old jobs, voluntarily or not.
But they have had a big positive effect on the economic recovery.
Small businesses added 2 million jobs to the US economy in 1983, while big business had a net loss of 1 million jobs, according to ``The State of Small Business: a Report of the President'' for 1984, says Carolyn VanSant of the Smaller Business Association of New England.
``Anyone can go into small business,'' says Ron Smith, editor of Entrepreneur magazine -- and he is not just another ivory-tower dreamer. He has started four businesses himself -- two advertising agencies, a public-relations firm, and a mail-order company.
Those who start a business with very little money (or even those with adequate capital) often put in long hours of ``sweat equity.'' Instead of hiring a manager, bookkeeper, and other specialized employees, the small entrepreneur plays the part of the chief and all the braves himself.
Louise Berenson, owner of three-year-old Purple Panache, a small retail business in Newton, Mass., agrees. There are a lot of ``long hours and decisions -- salaries, new catalogs; and you just have to keep going and going,'' she says.
But despite the long hours Ms. Berenson loves what she's doing. ``Your success drives you on and generates enthusiasm,'' she says. That excitement comes through in her voice as she talks of setting her own hours, being her own boss, and really ``being free.''
Bruce Murray, owner of SeaFab, a Redmond, Wash., computer circuit board contractor, shares that excitement, but he adds a cautionary note. It takes a ``tremendous commitment from the other family members.''
Mr. Antonacci likes the freedom, too, and the fact that he determines his own financial reward. ``I don't have to ask a boss for a raise now,'' he says. ``If I want a raise, I go get more work.''
Balancing that excitement and freedom is the failure rate of small businesses, although new evidence reveals it is not as high as the commonly cited 90 percent figure.
Twenty percent of new businesses disappear a year after they are started, another 15 percent after two years, and another 10 percent after three years, says David Birch, president of Cognetics Inc., a Cambridge, Mass., research company.
But as Mr. Birch points out, every business that closes its doors does not necessarily fail. In fact, of the estimated 550,000 business closings every year, only about 15,000 are bankruptcies, he says.
Some small-business owners ``get bored and leave the business to go into other employment'' or to start another business, explains Richard Tomeo, deputy district director of the Massachusetts office of the Small Business Administration (SBA).
A good business plan can cut the failure rate even more, says Elwyn A. Nellis, of Washington-based Service Corps of Retired Executives, an SBA-sponsored volunteer group.
And millions of small business owners who possess the peculiar kind of flexible stick-to-itiveness and independence of thought needed to carry them through the lean times (and the good times) feel the advantages far outweigh the disadvantages.
The first in a series of articles detailing a step-by-step process for going into business for yourself. They include drawing up business and marketing plans, keeping an eye on all-important cash flow, and getting financing for your new venture.