About 12 yrs ago I started a business online. It started fairly small and grew because I'm such an obsessive person and I spent hours upon hours of time online promoting and getting the name out there. When I was grossing about 12k a month I ran across a physical location that I felt was a PERFECT place to grow my business. It was a total fluke that I even considered it but it was directly across the parking lot from the gym I was working out at. As a matter of fact, 6 years prior it WAS a gym and they closed and opened across the parking lot to be a bigger, better gym with a pool. The place was trashed because it had been vacant for so long but anything can be fixed up right?
I called the number on the window and talked to the leasing agency. She was really nice but she told me the going rate was 3.50 a sq. foot and the space I was interested in was 12226. That would make my rent almost 43k a month. Well that was certainly unrealistic. I should of given up at that point but NOOOOOOO. Batsit had to keep looking into other options and what might work better.
I became obsessed with the idea of putting my business in this space. Now remember, I work as a nurse, have my whole life. I have no business experience other than my online sales. I'm a pretty smart chick though so I figured "How hard can it be" right? WRONG!!! LOL Another BAD decision.
I did the best I possibly could though. Someone told me about a leasing agent for commercial property and gave me the number of a guy they knew. He was just awesome. His job was to find me a place and negotiate the lease with the landlord and make sure they don't rip me off. He did an absolutely stupendous job. I would never of came as far as I did without that guy. PLUS. they do it all on the commission of the lease so I never paid him a penny.
I did a pretty involved business plan and did a little research on the market in the area. I was able to put together at least 5 streams of revenue and estimate the amount that each one would put out at a minimum amount of purchases. I unfortunately was NOT able to properly estimate utilities because the electric company just doesn't help at all and not other spaces in the complex were as big as this one. I also couldn't estimate the amount of revenues from surrounding like businesses because access to that information was not readily available to people like me. So I pretty much did educated guessing on a minimum amount of people that would pay for services and everything looked pretty realistic.
I then needed about 250k to get the business started. Now where the hell am I supposed to get that kinda money? I owned 2 homes at the time. One was worth about 650k the other about 3. About 20% equity in each because the market had climbed a bit since I bought them. I had about 10k in the bank and about 200k in available credit via cards. I started researching business loans and came across an application for an SBA loan through a local bank. I applied and to make a long story short - they would only loan me the money if I invested a large percent of my OWN money. Looking back it makes sense for the bank but for me, it meant I had to invest EVERY freaking penny I had without leaving ANY reserves. So they loaned me 150k and I had to pull the remaining 75k out of my home equity line to equal 225K which was still 25k less than what I needed to get started according to my business plan. DID THIS STOP ME???????? No, crazy fucking obsessed girl said "let's do this!!! I can make it work, I know I can."
Then, on top of it all I had a boyfriend that agreed to go into this adventure with me to be my full time manager. I did not plan on quitting my regular nursing job but to stay on part time to retain my medical benefits and small monthly income so I did not have to pull a salary to begin with. Well, crazy girl, my boyfriend was a Mexican guy with NO BUSINESS EXPERIENCE at all, no management skills, spoke with a heavy accent and one of the most laid back, quiet, non confrontational guys I've ever known. He was a great boyfriend because we never fought about anything, he just always said yes. But he had absolutely no KNOW HOW to make a business work. So we were the blind leading the blind. I couldn't see it at the time, it all seemed perfectly normal and to this day I feel that if the economy had not taken a big fat dump into the toilet as soon as I opened this business, it may still be thriving today.
SO, in a nutshell, this is what happened financially to open this business. I borrowed 150k on an SBA loan, I pulled the remaining 75k out of my HELOC and put that in the same account. I owed about 100k in cc debt but still had about 75 left to use if I needed it. I had an already successful business online in which I drew about 12k a month in gross revenue. Probably 4 of it was profit but I was the sole customer service person and I did ALL the online stuff myself. I had about 25k in inventory of stuff I sold online and pretty large customer base in my area. I was the "GO TO" girl for the product I was selling. I honestly believed I had a shot. I never expected to make a million dollar but I DID expect to be able to pay my mortgage and car with the revenue from the business.
OK, so the leasing agent negotiated the lease down to 13k a month with a signed 10yr contract. I got 6 months free in order to get on my feet and do tenant improvement and got the keys in August of 2007. We spent 85k in tenant improvement and had a bit of a nightmare with the construction company I chose to do it. That was our first hiccup among many in the beginning of our adventure. It took a full 2 months to get it all done and we opened in November of 2007.
Kinda stupid but at the time I didn't know that for my particular business - November and December are DEAD MONTHS? LOL I never knew this until I had my own million dollar brand new beautiful business!!!!! The first 2 months we didn't have to pay rent but we didn't make ANY money, we just promoted and made flyers and kicked our asses trying to get people to come in. We planned a grand opening extravaganza the end of January and got BIG names to volunteer their time and expertise to help make it work.
Work it DID!!! We drew about 400 people, had a bunch of big names and had the mayor come and do a ribbon cutting ceremony. They even televised it on the local new channel. We sold a ton of tickets and made about 3500 dollars in tickets and sales. It was a huge success.
The next day though, we were empty again. GEEZ. Frustrating.
Then the hits started coming. Another thing I didn't know was that business was a very cut throat world. Whenever you start making money, there is always someone with a hand out to take it but even worse, there is someone you trust just waiting and planning to steal it as soon as the opportunity presents itself. This happened to me not once but TWICE!!!! My own employees!!! People I trusted. Everyone is out for themselves and no one gave a shit about the big picture. Everyone had an idea, everyone had something to say but no one would put money on what they said nor would they lift a finger to help without getting the all mighty dollar in return. All the words of wisdom were always free though. LOL
After the second backstabbing incident I was not able to survive and had to shut down. I owed tons of money on back rent, to some of my employees as well as the government in back taxes. It was not a pretty picture. But I got out, after 5 yrs of breaking my back and not getting any monetary return and now I'm back to full time nursing.
I GOOD at being a nurse. The business was just a crazy adventure and another stupid decision in my life but looking back at the BIG picture it was learning experience and I don't think I regret it. It taught me who my real friends were and that people in general were not be trusted when it comes to money. It taught me good things and bad things but after it's all said and done I survived. I rent a house now, I lost the two I owned. I still owe about 7k on taxes but that's really about it.
The landlord sued me for a million dollars and got a judgment but that ended up being reversed because of some legal technicality so I'm no worse for wear. I'm still friends with my old partner although we broke up as bf and gf over 4 years ago.
I hope this story will help anyone planning an adventure of their own to not make rash decisions and think things through thoroughly. I think I would of been able to pull it off had I been a shrewd business person with better people skills and better management skills.
So that's the story of the biz. It is of course condensed but it gives what happened in a nutshell.
Was I crazy for thinking I could make that work? Was it just a bad decision or did it have some sort of meaning? Are there other people out there that make obsessive decisions also lose their entire life savings to make it happen? Or am I the only crazy person that does that?
I hope this story didn't bore you to death.
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