Categorized | Shoestring Startup

With Each Adversity Comes the Seed to Prosperity

With Each Adversity Comes the Seed to ProsperityI believe it was W. Clement Stone (he founded Combined Insurance of America during the Great Depression) who said, “with each adversity comes the seed to prosperity.”

My shoestring venture was started out of necessity and adversity after business investments I had made just prior to the U.S. banking meltdown of 2008 quickly went down the drain with my life savings. In the early part of 2008 I purchased a ten year old business that had had steady growth year in and year out for ten years. It seemed like a no-brainer. Seven months later the U.S. banks melted down and half my customers went out business and the other half couldn’t pay their bills on time. Sales were off seventy percent over night. We were no longer “cash-flowing” as they say. Within twelve months of the banking meltdown I had closed the business.

With the loss of my business and my savings I found myself part of that 25 million unemployed the national news talked about almost every evening. But I was sure I was not part of what the evening news described as the unemployable and definitely not one those who had stopped looking for work altogether. I sent hundreds of resumes for positions I was well qualified for but got no interview call backs. After checking to see if my resume had been received I was told it had along with hundreds of others. Prospective employers always responded to my inquiries with, “we’ll let you know.” My feeling was despair; who was going to hire a fifty year old when they can just as easily hire recent college grads by the dozens.

As it turns out the insurance industry is always hiring. All you need to get hired in the insurance business is a pulse, the ability to fog a mirror and no prior felonies related to fiduciary trust. I had made the grade. Bam! I had new career, new opportunity and the wheels to my entrepreneurial mind were already “laying down rubber.”

But my income was gone. My reserves were gone also and my burn rate was astronomical. Words that had never entered my vocabulary in fifty years of stellar credit (debt collectors, default and worse) were now lurking around. After seemingly losing everything I realized there was still more I could lose. Wow! This was scary.

After years of six figure incomes and lavish life styles, the appreciation of having money and fiscal prudence was lost. The biggest adjustment we had to make was getting our personal expenses in-line with our income. I think they call that, “living within your means.” Today we use as many free online services as possible to help contain costs such Google analytics for web traffic stats and Compete.com to monitor the competition.

I have prefaced my shoestring venture with this background information so that the readers will know that my venture was started not as a hobby, not started on a whim of “hey let’s see what happens if we roll some dice in this direction,” or because I had money burning a hole in my pocket. Financing this startup was going to be hand to mouth with each insurance sale until the business had its own momentum.

With Each Adversity Comes the Seed to Prosperity

MarkHuggans

My experience in business told me I needed a company name that says what we do. My main insurance product line would be health insurance followed by Medigap insurance, life insurance, dental, vision and so on. I needed a name that was also my message, or my product or ideally both. Initially, I choose www.AffordableHealthcare.US as our company name in early 2011. I liked the name but it still lacked a couple attributes: 1) the name didn’t convey what one could do at our website. For all anyone knew, www.AffordableHealthcare.US could be an informational only site. Second, the company name didn’t have a call to action. It was then that the idea for a name came to me – it had everything in it, it said what we did and had a call to action. I was nervously excited because if the dotcom for it wasn’t available then it wouldn’t be a viable option. It was available so I quickly snagged it and also the same name with hyphens to prevent any squatters from scamming our web traffic. The new name for our online insurance portal would be www.ClickShopInsure.com and we also reserved www.Click-Shop-Insure.com .

Although we have yet to have our “grand opening,” we have officially opened for business as www.ClickShopInsure.com in April 2012. We are saving our grand opening for the right opportunity to make a splash and capitalize on any free publicity from the media.

To create our online presence we utilized two main tools: 1) Software-on-demand services and 2) a vector-based web design tool.

Software-on-demand is an ideal concept for shoestring entrepreneurs. Software-on-demand service gives one a sophisticated technology pallet on a shoestring budget for what would otherwise be unaffordable if purchased outright. These services are generally provided online and hosted by the vendor. Depending on your vertical market will determine who your vendor choices are. In my industry, (insurance) there are several vendors to choose from that provided real-time online quoting ability that could be seamlessly integrated in our website. Originally we choose the market leader (read 800 lb gorilla) for our software on demand but later switched to the underdog of the insurance industry and received far more bells and whistles and exponentially better service for our money.

To build our website we needed a professional look but didn’t have thousands of dollars or even hundreds to court web designers. After looking at many of the ISP template websites that promise you’ll be up and running in a matter of hours we were disappointed with the cookie cutter looks of most of them and the inability to do any significant customization ourselves. Also, by the time we added all the extras, hosting, email etc needed to make the ISP template website useable we are easily at $35 to $50 month which was more than we could really allocate on our shoestring. Then we came across wix.com and for $14 a month we got everything we needed, Madison Avenue quality templates, extreme customization capabilities and no learning curve!

Within days we had our website. Immediately we went about getting licenses for all fifty states. This quickly proved to be more than we could chew. The administrative costs of adding all fifty states was rapidly consuming our miniscule advertising budget. As fast as we got started we almost killed ourselves with a hasty attempt at expansion. We quickly scaled our expansion efforts to coincide with sales growth. One thing we did get right was to start the business with no borrowed money and today do not have debt and therefore no debt to service. Another move that helped us survive is creating an online business that has minimal overhead to maintain, making breakeven and positive cash flow much easier to attain each month.

Today we market our website primarily via pay-per-click for keyword searches and by press releases. Although relatively expensive, pay-per-click tends to bring us motivated shoppers in real time. Our next step is to develop a social media strategy using Facebook and Twitter. A LinkedIn campaign and YouTube blitz look promising.

Prior to my investment disaster of 2008 I had built and sold two businesses to publicly traded companies so I know it can be done. Public companies are just as happy to buy market share and have it instantly versus investing years in building a brand. The only real way for a small business owner to recoup his or her equity in their business is to sell it outright and publicly traded companies can easily write a big check. I sold my first business which was a medical device manufacturing company and I sold my second business which was a biotech company. Hopefully my third sale to a publicly traded company will be www.ClickShopInsure.com . I’ve already identified three potential suitors. Once we have sufficient market share to be a viable acquisition target, I will “shop” the company. I enjoy building a business but there is nothing sweeter than cashing out.

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