Every successful business starts with a vision. Every unsuccessful business does too.
How can you tell whether your dream is destined to succeed? And once your new business is operating, how can you keep that dream on track?
We asked three successful entrepreneurs how they came up with the ideas for their businesses. What led them to make the decision to go ahead and commit time, money and energy to turning that dream into reality? How they knew their vision could become a viable business?
Eight-Foot-High Flaming Tiki God
In San Francisco, Steve Fox seems to have invented a new art form: a visionary fusion between high-art aesthetics and...indoor minigolf! Now he's trying to turn it into a successful bar, restaurant and recreational space in the hip Mission District.
"For years," says Fox, CEO and Chief Greenskeeper of Urban Putt, "I gave an annual bring-your-own-hole miniature golf party at my home in San Francisco. It was a charity benefit; we usually raised a few thousand dollars. People both built and played wonderful, imaginative miniature golf holes. Some were literary; others were satirical and political. Some of the holes ran through the house, from floor to floor, or into the backyard and back again, with ramps and PVC tubes inside the walls to direct the balls. We did one hole with an eight-foot-high flaming Tiki god." Some of Steve's participants were computer writers and programmers, so there was a bit of digital technology involved as well. It was amazing—and truly unique.
Then, one year Steve decided to stop. "It had taken over our lives," he recalls. "We have two kids, we've got full-time jobs, and the minigolf party took two months to set up and another month to clean up afterwards. It had gotten bigger than us. Not to mention challenging the structural integrity of our house."
Unfortunately, after a year Steve realized that he missed it. And he started wondering how he could take this thing, which he really enjoyed, and turn it into a business. Over the years many people had told him, "This is great! You should do this somewhere else! People would love to come to it." It was time to find out if that was true.
A Lot of Business Plans
Steve started writing business plans. A lot of business plans.
"The first three versions of the business plan were not viable, since expenditures exceeded revenue," he explains. "This tends to be a very bad model for business. By the time I got to version four (which included a restaurant and a bar on the same premises as the miniature golf course), the numbers started to make more sense."
Steve (whose day job was Editorial Director at PC World) took a course in business planning at Renaissance Entrepreneurship Center. But he's a firm believer that if you don't know something you bring in experts—so, like the Ferdinands, he looked for consultants. He found a professional financial person and asked her to put real numbers to his rudimentary business plan. When she agreed that it seemed viable, Steve brought on Ne Timeas Restaurant Group to help him with the financial mechanics of the restaurant.
"I wanted to tap into the expertise of others," he says, "and despite the expense I figured it was better to spend the money and actually have something that worked than to save the money only to crash and burn."
Steve faced his biggest problem when he started looking for investors. "I was naïve in thinking that with a really good idea it would be easy to raise money." he admits. "Raising money is the hardest thing you can do. It is also the primary job description of the entrepreneur—at least if your business requires a reasonable amount of cash to start."
Hey, I Just Raised a Million Dollars!
But what a thrill when you succeed! "Once I figured out the budget," says Steve, "and realized that I needed to raise about a million seven, the day I passed the one million dollar threshhold was...amazing! I still remember the moment when it happened. Before then, even raising $800,000, it didn't feel real. But there's some magic about, hey, I just raised a million dollars! That was a tremendous triumph. And it was simply a matter of hard work, doing an incredible amount of outreach, explaining how the business would work, conveying my enthusiasm, and finding people who shared that enthusiasm—and were willing to write checks."
Still, there were a few nasty surprises. "I thought some stuff would be easier than it was," says Steve. "For instance, I thought it would be easy to get the City to approve a Conditional Use Permit. It took almost a month and a half to set up an initial meeting, and I went in with less preparation than I needed. I got squashed like a bug. My mistake was not getting together with someone who knew the machinations and details of Planning Department politics. Ultimately I did find such a person, essentially a facilitator, a fixer, and he helped me prep for the next round, and we sailed through. But I lost almost two months in wasted motion. I was trying to save money. I thought I'm a smart guy, I've read all this stuff, I can figure it out. But it has nothing to do with being smart. In my attempts to do it myself, and save money, I had actually cost myself a lot of money."
To a great extent the people who invested in Urban Putt have done so less out of a belief that it's going to make them rich and more because they think this is just a wonderful idea and they'd love to be a part of it. "That's not to say that I don't think it's a viable business," Steve declares. "I think I'll make good money for my investors. But this is terra incognita. It's very hard to give people comparables, to say this is a lot like investing in x or y. It's a new thing. So I'm requiring as much imagination from my investors as I am from myself."
Urban Putt opens in April, 2014.