Growing up in India as a 12-year-old, I dreamt of working at the World Bank. Little did I know I'd find myself an entrepreneur in the U.S. with restaurants in NYC and Chicago, a few careers and many decades into the future. It's been a mystifying, gratifying, euphoric, anxiety ridden, black hole of a roller coaster transition and journey with stark learnings that apply to anyone embarking on this journey.
So beware, this is not a “If you build it, they will come," field of dreams, be-the-happy-entrepreneur column. But I will share what worked and what didn't for me, and hope this will help all entrepreneurs starting out, and women in particular, to navigate their own minefields to seek miracles.
A little on who I am: I finished my Master's in Economics in India and came to the US for a Ph.D. in Economics, all to accomplish that childhood World Bank dream job. At the World Bank, I worked and published in private sector infrastructure development. Working in a multilateral entity with governments to build their countries was riveting, but I wanted to get a little more granular and build hardcore business skills which is where being a management consultant at McKinsey & Co. came in. Getting into McKinsey was the most competitive experience I had ever faced; the work was deeply intense, with Fortune 100 companies on their most pressing issues, and the learning curve was steep and nonstop. A few years in, as food mania and frenzy started raging in the U.S. and across the world, I started obsessing about what I considered an unmet niche – contemporary Indian dining with a twist that would appeal to even the most timid of diners. Enter going entrepreneurial and my founding Vermilion, my Indian-Latin restaurants.
Invest in Yourself First
It alarms me when I hear high schoolers or college drop outs wax on about being the next Bill Gates. Please know, the world is littered with failed entrepreneurs and not all garage start-ups will succeed. So it's vital to build your credibility and to first and foremost invest in yourself - and education and work experience is really the only way to do that. It's also a great backup to have, should your venture go bust, which there's a reasonably high chance of. In my case, my prior business background, ph.d., and McKinsey experience were invaluable and also gave me instant credibility. Even though I was entering a whole new dining industry I knew next to nothing about, other than the rosy fact that 90% of restaurants fail within five years!
Financial Literacy is not Optional
Research has shown that in the U.S., most girls shy away from math and this spills over into business skills and even their choices of careers (flocking to the softer side of even the corporate world – HR, Marketing, versus running Operations). If you're going the entrepreneurial route, however, step one is taking courses to be comfortable with Profit & Loss, Balance Sheets, Invested Capital and Cash Flow statements. I've met friends who say, “Oh, I'll hire an accountant. I'm creative, numbers is not my thing," but without these core skills, you're doomed. It's like driving fast on a highway, blind. The good news is building financial literacy is not hard, and there are tons of resources. Go to Women's Business Centers for virtually free crash courses, go audit a course at your local college, but just do it! You'd be wise to sign up for the Business Plan modules too – because only then can you speak the language of owners, investors, bankers, vendors, partners – which puts you at a whole different level, from inception to when you'll want to scale up.
If you don't know the industry you're entering into, this stage is vital, well before you commit to starting your business. Do all the external research you can, talk to owners, operators, competitors, anyone in the field who'll tolerate you. Try and live the business, collect data and run the numbers – is it economically viable, really and truly? Hold on to that job or take a leave of absence until you know as much as you can, within a specified time limit. And if there are ways to run early concept tests before you commit, that's ideal. I spoke to over 40 owners, managers, chefs; I lived with a restaurateur mentor and shadowed his every move for a week, combing over all the data he shared with me; I hired a concept chef and tested my vision of Indian-Latin dishes with potential investors and consumers to convince myself of concept and economic viability. Only then did I quit my job. This early immersion was eye-opening and educated me outside-in on the many pitfalls of the industry I had chosen.
There is never perfect knowledge and at some point you'll have to take the plunge. That's when many will come out of the woodwork to assure you of the foolishness of your choice. Not just when you start out, but constantly along the way. Naysaying also comes from within, especially if you're going it alone. Building confidence and constantly projecting it (to your team, employees, customers, all stakeholders, even family) can be exhausting and you have to find ways to replenish your stockpile. I'm a strong proponent of women being their own best self-advocates, being entrepreneurial is not for the timid. Actively seek mentors, an advisory board (often investors), peers, industry associations and external networking groups. Over time I've gotten deeply involved with key players both within my industry (James Beard Foundation, National Restaurant Association and it's State chapters, women's organizations in culinary) and outside it (The Chicago Network, NY Women's Forum, International Women's Forum, The Economic Club of Chicago). I've found so many mentors, friends, business opportunities and even investors through these connections. And it helps me renew myself, open my world, or have multiple crutches to turn to when needed.
Knowing when to Outsource
It is true that at the end of the day, you are only as good as your team. Knowing your shortcomings and where and how to bring in talent to build and run your vision is more than half the battle. Through interviews, advertisements, poaching, networking, trials, whatever it takes to get good people on board – spending inordinate time building your team pays off in the long run.
For my restaurants – I had to work with multiple brokers to find the space; I needed a lawyer to navigate opening a business, incorporating it, executing investor documents; another lawyer for retail and liquor permits; a general contractor to execute my design vision and the construction; a manager to hire and train my service team; and I tried and interviewed over 35 chefs to finally hire one to run and staff my kitchen. Then it was negotiating with all the vendors (food, beverage, supplies, equipment, maintenance contracts, over 50 vendors) and finally working on the marketing plan and launch, while building the menu and beverage plan and training all in tandem. It was insane and still is, and I couldn't do it without outsourcing well.
Keeping it Tight & Thinking Scale
The vast majority of early stage businesses fail because they run out of cash before they can hit viability. Which is why it's key to be really tight-fisted when you start out, when you may be flush with cash, and rosy with optimism about the endless possibilities. Remember that every dollar spent will have to be earned ten times over to recover in invested capital, if you run a 10% margin. Knowing where to cut corners and where to over-invest is a delicate balancing art. In my case, I knew the moment I had the keys to the space that my expenses would be ticking and eating into my financial buffer. So I gave myself a six-week turnaround to construct the space and launch the new restaurant. I planned almost every detail prior, had the constructor lined up and ready to go, ordered all furniture and long lead equipment prior, had my permits ready – everything that point on had to be done on site and justified the expense. It's easy to give into ego and build a mausoleum to yourself, but it may land up being just that!
I also strongly endorse dreaming bigger than you initially envision and introducing the discipline and scale of external capital (angel equity investors, commercial or SBA debt, crowdsourcing, VC). That only 2% of women owned businesses in the US exceed the $1 million revenue mark is a tragic reality and waste of our potential as entrepreneurs. It's also because women are least likely to venture out of financing through savings and remain too cash strapped to grow. Dream and plan big, to make miracles happen.
When their frustration with current fabric care options had fashionistas Gwen Whiting and Lindsey Boyd worn out, the two entrepreneurs made it their mission to start a new niche and launch their very own at-home, eco-friendly laundry detergent line.
With a mission of turning an everyday domestic chore into a luxurious experience, these entrepreneurs not only conjured up an idea for an unconventional product line, but they successfully built their business while turning down the offer of every venture capitalist to knock on their door.
Gwen Whiting and Lindsey Boyd co-founded The Laundress in 2004 after dealing with their own personal frustrations with limited clothing care options. Whiting, having worked at Ralph Lauren in design and Boyd having worked at Chanel in corporate sales, soon accumulated a stylish wardrobe of designer pieces as perks of their jobs in the fashion industry. However, the duo quickly realized that the maintenance required for upkeeping these items were far from adequate. Laundry products on the market at the time did not cater to delicate textures and fabrics such as tweed blazers, cable-knit cashmere and silk blouses. Taking their clothing to the dry cleaners also proved hopeless as their clothing would often come back with stains or even be ruined despite the overload of chemicals used to clean them. With nowhere left to turn, Whiting and Boyd were determined to create their own laundry solutions designed for specific fabrics.
Not only did the entrepreneurs develop the business expertise needed to finally begin their own company, but they also shared the same educational background that equipped them to pursue their unconventional business venture. Whiting and Boyd met in college as students at Cornell University majoring in Fiber Science, Textile, and Apparel Management and Design. The pair was introduced by a mutual friend and instantly knew they would become business partners. "It was inevitable that we were going to have a business together. We are both extremely entrepreneurial by nature, and it was one of the connections that we instantly shared" said Whiting. After focusing on pursuing their own individual careers for a while, Whiting and Boyd quickly discovered a void in the fabric care marketplace when their clients would continuously inquire about the upkeep of their designer pieces.
The entrepreneurial duo was committed to researching and developing their own eco-friendly laundry products and soon launched their own at-home solutions for specific fabrics like silk, wool and denim, which ultimately eliminated the need for dry cleaning for those particular items. Despite their products filling a necessary void in the market, it quickly became challenging for the founders to persuade people to shift their focus away from traditional laundry care options in order to try their products. However, Whiting and Boyd believed in their mission for the Laundress and bootstrapped from the very beginning, refusing all venture capital funding with the goal of growing organically. In order to be successful, they had to get creative in fundraising. "In the very early days, we funded business development by hosting a 'for profit' party at a New York City restaurant and inviting friends, family, co-workers, etc. to support our new venture. That was pre-Kickstarter and an inventive way to make everyone feel a big part of our decision to be entrepreneurs," said Whiting.
While turning down VC funding as new entrepreneurs seems unimaginable, it is as equally unfathomable to consider how these women gained national traction without social media, all the while hustling to fund their business. For Whiting and Boyd, who started their business before social media existed, it was imperative that they promote their brand by leveraging the resources they had available to them. The CEO's were one of the first to sell consumer goods, let alone detergent, online with the goal of reaching a national audience. Despite having limited retail distribution, they leveraged the power of their website and became featured in publications on both a national and international scale. "Before social media platforms existed, we nurtured our own Laundress community with engaging content on our website, step-by-step tutorials on our blog, and one-on-one communication through our Ask The Laundress email," Whiting explained. With technology evolving and the birth of social media platforms, the founders expanded the conversation about their products from website, blog and email to platforms like Facebook and Instagram.
As female entrepreneurs, Whiting and Boyd faced additional hardships as misconceptions about their mission ultimately proved to disappoint more than it encouraged them. As women selling luxury detergent, there existed a preconceived notion that funding would be more easily attainable based upon their gender.
"Everyone thought it was easy to access capital as female entrepreneurs, but it was actually very challenging. We had this unique and disruptive idea within a very traditional space and it was hard to get people on board at first. It's been a continuous journey to educate people in fabric care and home cleaning," said Boyd.
Reflecting on their journey as entrepreneurs, the founders express no regrets about refusing to accept venture capital throughout the process. "Over the years, we could never quantify the cost benefit of VC funding so we continued to grow organically and remain independent by funding ourselves with credit cards and loans," explained Boyd. While their decision proved fruitful, the duo expressed their consideration towards other entrepreneurs who may not be able to fully fund their business as they grow. Because funding is a situational experience, entrepreneurs must ultimately do what is best for their business as no one path is optimal for every entrepreneur or every business.
With an increasing amount of women entering entrepreneurship with their own unique set of products or services, the CEO's offer up one piece of advice on how female entrepreneurs can be successful in their endeavors.
Whiting: "Our advice to anyone looking to build their brands: Have a strong business plan and vision. If you are not disciplined to write a business plan first then you are not disciplined to start a business. Get your ideas down so you ask yourself the right questions; it helps you get organized and plan next steps."
Boyd: "Create quality products without sacrificing the ingredients—no cutting corners. What you create should be the most important piece. Stay passionate, and trust your instincts and follow your gut—something woman are awesome at!"