Startup Diaries: Ignore Those Discouraging Remarks!
“You can’t do that.”
Has anyone ever ridiculed your idea? As entrepreneurs, we do not follow the crowd. When you step outside of the “we have always done it that way” mindset, expect discouraging remarks.
This is the story of my personal entrepreneurial journey, and how I didn’t listen to the naysayers.
Stage One - Before the Dream.
In 1981 when I moved to Steamboat Springs, CO, I purchased a struggling bakery. Struggling is an understatement; it was in intensive care on financial life support.
Candy Mountain Culinary Creations grew until it was furnishing all of the continental breakfasts for the entire ski resort. Was it easy? No. Baker’s hours are not exactly banker’s hours. Driving through the snow to start baking at 11 pm seven days a week was not fun.
To add to the hours of exhaustion standing on hard Cory tile, the bakery was next door to a popular tourist night spot. Can you imagine how cute an inebriated individual believes they are as they knock on the glass window at one am as the bar is closing?
Beginning of the Idea
Running the bakery, I listened to realtors whining that they could not sell a second home because there was no one to manage the property. The tourists were whining that they were more than reluctant to purchase a second home and leave it unattended for months in snow country.
(In 1982 we had a spell of cold weather. In fact I discovered that my truck would start at 40 degrees below zero but not at 50 degrees below zero). Did I mention that Candy Mountain was primarily a donut shop? Have you heard the comment about cops and donuts? That 50 degree below zero morning I called the police chief, “JD, if you want your donuts on time, I need a ride to work.” He sent an officer right away).
After five years of this exhausting pace, it was time for a new venture. Tourists and realtors were still complaining about the lack of anyone to manage homes. My thought, “property management has to require fewer hours than a bakery and there is certainly a need.”
Comments from my significant other, numerous local business owners and my friends ranged from: “That’s a dumb idea” “You’ll go broke” “Property management won’t work with homes. It only works with condominium complexes”
“You don’t know anything about property management” “Give it up. That won’t work.”
With all of that encouragement, it must be a good idea. I interviewed tourists, realtors, venders, and even ski area employees.
- “What do you like about what you have now?”
- “What don’t you like?”
- “What would you like to have but do not have now?”
- “What would it be worth to you to have what you like now and what you would like to have?”
A real estate broker’s license was required and obtained. Employment was secured with a local property management company for on-the-job experience. A five-year business plan was written combining all of the information from the interviews, the cash flow projections, initial marketing plan and growth projections among the myriad of other details deeded in a comprehensive business plan.
Mountain Castles Comprehensive Property Management Company was launched.
Oh, did I mention that I only had $4,357.32 to cover all of the startup costs? Why so little? That’s a story for another day.
The good news is that Mountain Castles started totally debt free.
Referrals from carefully selected key realtors were initially my best sources of leads. From that point forward, the goal was massive referrals with minimal paid advertising for owners.
My first property was owned by a couple of venture capitalists out of Boca Raton, Florida. That relationship started out great until I received a call from the Federal Marshalls.
Apparently the guys had another venture in addition to their car rental business and now the Federal Marshalls owned the property.
Startup Financial Plan
Gradually the business grew. The original idea was to cover the monthly expenses with income from monthly maintenance fees: weekly property inspections, paying the property utility and maintenance bills (we furnished all of the snow removal, lawn care, hot tub maintenance, cleaning and general maintenance), and even paid their mortgage (with their money, of course.)
There were two types of properties: executive homes which did not rent and long term rental homes. Long term properties would rent on an annual basis; we secured the tenants, collected the rent and charged a percentage of the rent. Mountain Castles monthly expenses were covered by the monthly fees.
When a third type of home, vacation rental properties, was added to the mix, it created an entirely new set of challenges but also an additional lucrative income stream. Lucrative if the snow season was good and scary if the snow did not fall.
Wake up call
Literally a wakeup call. No one locks themselves out of a property between 8 and 5 Monday through Friday; the calls always come in the wee hours of the night. The record is held by one tourist who locked himself out 4 times in one night – beverages were involved.
Remember when I thought it would be far fewer hours than the bakery? I was wrong. Starting out I did the cleaning, the snow shoveling, the reservations, the accounting and even checking the hot tubs.
Such are the joys of a startup. Becoming a fast change artist from maintenance personnel to reception executive in ten minutes became a frequent necessity.
Did the discouraging remarks ease up? Not much.
Have you ever reached the point where your business needed to either grow or go? After 8 years of roller coaster growth, sleep-interrupted nights, tourist/owner/renter challenges, and a gray-hair creating marketing learning curve, it was time to go back to school. It had been 30 years since my bachelor’s degree. Now, the discouraging comments were coming from my own head as well as from others. “What if you have forgotten how to study?” “What if the school won’t even let you enroll?” “What if you can’t do it and you make a fool of yourself?” “How will you have time to go to school and keep Mountain Castles going?”
Leap – Hopefully Forward
Once again with all of that encouragement from myself and everyone around me, I enrolled at DU. This was 1994 and there was a buzz in the air about internet and email. Long story short I came home and asked my significant other, “Matt can you make a web page?”
“I can figure it out (often wrong but never in doubt). What do you want to do with it?
“Matt, I want to advertise reservations for property management on the internet.”
“Well no one in Routt County has a web page yet. Let’s do it.”
13 weeks and many tweaks later, it generated its first reservation.
That dumb idea went on to win First Resort International’s “Innovator of the Year” award.
Lessons Learned – Thoughts to Ponder
- Research to verify the market niche exists and the financial potential is essential.
- Determine all of the steps required to launch including the legal aspects: licenses, contracts, registration of the business with governmental entities, physical equipment needed. Governmental and legal, including contract details, plays a major role.
- Possessing some industry specific knowledge and experience avoids pitfalls.
- Writing a comprehensive business plan and checking in frequently to be certain you remain on target is more than worth the extra time and effort. Tweak the plan as needed for unavoidable consequences. (I could not control snowfall but I could plan for the possibility of a no-snow season.) Plan ahead for cash flow needs especially in the off season; ski season profit must cover 12 months of expenses.
- Implement the plan and keep adding for future growth.
- Never stop learning. Stay on the cutting edge of the industry and new trends.
- Expect negative input throughout the journey. If you are charting new territory, the David and Debbie Downers will appear.
- Learn to laugh at yourself and the “what next” moments; it keeps you sane.
Elaine Love’s expertise is in small business, marketing, branding and publishing. Her credentials include Masters Degrees in Communication, 30 years of entrepreneurial awards including “International Innovator of the Year,” World Class Speaking Coach, and author of 3 books.
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