Start-Ups on a Shoestring

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Start-Ups on a Shoestring

The tales of three entrepreneurs who launched companies--for less than $150

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You don't have to break the bank to start a business.

For many would-be entrepreneurs, money is the insurmountable hurdle.

They hunger to strike out on their own, but don't have a big pile of cash to invest in a start-up that might not churn a profit for years to come.

And they're reluctant to stake what cash they do have while the economy is still shaky.

We decided to see if you could launch a venture for less than people think.

We set out to find bootstrapping business owners who started companies in recent years-without shelling out more than a couple of hundred dollars.

The ground rules: The entrepreneurs had to be either paying themselves a salary or reinvesting substantial profits in the business, as well as planning to continue down the entrepreneurial path for some time to come.

We also nixed people who opened consulting firms in fields where they had already built careers.

While that's certainly entrepreneurial, we wanted people who were truly starting from scratch.

With creativity, commitment and resilience, an entrepreneur can turn even a small investment into an impressive business.

The stories we found contain several common threads.

If you don't have a lot to spend, expect to put in a lot of time and energy.

As Jeff Swedarsky of Alexandria, Va., put it, he started his food-tour business for "$100 and 100,000 hours."

But the bootstrapping entrepreneur can also get help from lots of technological tools.

For instance, professional-looking websites and automated phone-answering systems can speed sales and make a start-up look more impressive to potential customers.

Technology, in fact, is a big reason it's possible to launch a business so cheaply.

Thanks to the proliferation of the Internet and the accessibility of once-costly technology, start-up costs "have plummeted in the last 10 years," says Bo Fishback, vice president of entrepreneurship at the Ewing Marion Kauffman Foundation, a Kansas City, Mo., nonprofit devoted to entrepreneurship.

This is something that's becoming accessible to anyone with an idea."

Of course, there are limits to what hard work and tech savvy can do.

In 2007, Kael Robinson received an unusual gift-a flimsy cotton bracelet with Portuguese lettering on it and instructions to make three wishes while tying it on.

Wearing five of them herself, she offered them to her student athletes for $2.50 apiece and quickly sold out, prompting her to invest in another 100 units.

Robinson soon had more orders than she could fill-at a new retail price of $5 per bracelet-giving her enough confidence to purchase another 1,000.

She donated 20,000 bracelets to charities, retailers and others to get the word out, for instance, and committed 20% of her sales to the nature nonprofit pledge she says helps drive business.

Robinson had earned enough to pay for a professional website and logo for the company, now known as Live Worldly LLC.

The company has a more sophisticated website and two full-time employees who handle order fulfillment, new-business development and bookkeeping.

Last year, Live Worldly racked up $60,000 in profits on revenue of $160,000, compared with $10,000 in earnings on revenue of $50,000 the year before.

For example, she says she wasn't asking enough for shipping; at first, she charged $8.99 to ship 20 or more bracelets to stores in the U.S., and now she charges $12.99.

She was also paying printing costs of 35 cents per bracelet tag; about six months ago, she switched to a cheaper printer and now pays 20 cents per tag.

By day, Jeff Swedarsky is a self-described paper pusher at the Department of Homeland Security, where he works in ship acquisition for the U.S. Coast Guard.

But by night and weekend-pretty much the rest of his waking hours-he's the director of Food Tour Corp., the company he created that offers culinary excursions of Washington, D.C., neighborhoods.

The plan: He would bring in small groups for special tastings, during the slow period between lunch and dinner, and restaurants would make them smaller, customized dishes that weren't on their usual menu and that reflected local history, such as Virginia ham.

Mr. Swedarsky gave his first official tour in May 2008 with just two people along for the ride, "cute ladies who must have been in their 50s, from New York," he says.

Marc Ringel says that he was "really scared" when he first started his flooring company in July 2007.

For several years, he was a math teacher in New York City, a job he landed after struggling to find openings suited to his computer-science degree.

The job, which entailed finding new clients and marketing for the company, wasn't terribly lucrative.

At the time, sales were booming, and Mr. Ringel thought the company had the potential to soar even higher, if it implemented systems and processes that would better organize and dispatch the contractors.

Artical curtisy:
Ms. DeBaise is The Wall Street Journal's small- business editor, and Ms. Needleman and Ms. Maltby are staff reporters in the Journal's New York bureau

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