This is a guest post by Mark Harai and is part of The Entrepreneur’s Journey series.
First of all, it’s an awesome opportunity to be able to share a post here with Troy’s blog community.
The intention of this post is to provide aspiring entrepreneurs a picture
of what it takes to actually be one.
Everyone’s experiences and skill sets are different, however that’s what entrepreneurs build their careers on.
I’m going to share a glimpse of my journey for an example of what I’m talking about.
Being an entrepreneur is more than having a great idea, it’s having the expertise to turn ideas into companies, hence the title of this post “building on experience.” This presumes an entrepreneur is one who has actually done something in practice and mastered or become an expert by doing it.
As well, I’m hoping to provide inspiration to aspiring bloggers who are trying to figure out what to write about and what they can share in effective ways that can connect with others. The reason I blog is simple — to connect, network, share and hopefully provide insight and value to business people and entrepreneurs. I attempt to bring awareness to my skill sets, attitudes and aspirations that may prompt other like-minded entrepreneurs to reach out to possibly collaborate on projects or find ways to build value in others.
The following is a summary of the last 25 years of my life and how I became an entrepreneur. I’m hoping it will provide an idea on how one acquires expertise in certain aspects of business that apply to launching profitable companies, at least that’s the plan..!
Chapter 1. The Foundation I Built On
My first company was a landscape construction company I started when I was 19 years old. Consequently, I learned everything I needed to know about running a business from failing at my first attempt.
Here are some facts:
- Grew to 60 employees and 12 crews working several commercial/residential installations.
- $20 million in long term contract by second year.
- Nearly bankrupt in 2 years because of no accounting.
- Hired a CPA that revealed over $30k in employee theft from credit accounts being utilized for side jobs.
- Learned everything I needed to run a successful business by failing immensely in my first.
What I learned:
Firstly, just because you happen to be a skilled master craftsman at something doesn’t qualify you to run a business, and secondly, running a business is more about counting money (accounting) than anything else. This is precisely one of the main reasons so many new small businesses fail — they don’t know how to run a business!
Chapter 2. Investment Banking – Private Placements – Raising Millions
After my first hairball business experience I moved on to the investment banking industry, which appeared to be an industry one could make a good living at. So, I got my Series 7, 24 and 63 licenses and went to work at a brokerage raising money on private placements for the newly burgeoning cable television and cellular industries.
I found that I had some talent raising venture capital and soon became the top closer within the first year at the firm I was working at, and within 18 months, became the national sales manager over 10 offices with 250 brokers raising millions of dollars for the telecommunication and wireless industries.
This eventually led to developing direct relationships with entrepreneurs who were awarded cable franchises in specific U.S. markets and cellular entrepreneurs who won FCC licenses to provide cellular service in specific MSA’s.
What I learned:
- How to lead and manage 6 and 7 figure earners, many of which were older, more seasoned and wanted my job – a bit tricky for a snot nosed 20-something year old.
- How to write short concise business plans that attract investment dollars.
- How to build financial models.
- How to promote ideas and companies with no operating history.
- How to recruit and staff C-level personnel to run companies.
- How to move investors to part with their cash.
- How to write private placement memorandums.
- It doesn’t’ take a college education to move and shake industries.
This is a skill most entrepreneurs don’t have. Ivy League Universities don’t teach you how to raise money for your startup. Raising capital is not easy. Most entrepreneurs think first about bank loans, which are nearly impossible for a new company. Then they pay a bunch of yahoos thousands of dollars to create legal documents, professional business plans etc. and end up spending a bunch of cash they couldn’t afford to waste and getting zero in return. I soon realized having the knack to get on a phone and raise a few million bucks in a month or two was a highly valuable skill to possess.
Chapter 3. Mergers & Acquisitions – Expanding Operations
As the cable television and cellular industries began to gain traction, the industry as a whole began to consolidate. Merger and acquisition activities was the preferred financing scheme to expand small independent operators into regional and national service providers.
What I learned:
- How to develop the capital structures of private companies intending to go public.
- Accounting practices of the big 6 accounting firms.
- How to bring big ego’s together for the common good.
- How to grow multi-million dollar companies into billion dollar companies.
- How greed kills deals.
- How to amass small fortunes owning a small piece of stock in companies.
I was surrounded by super smart people who had forgotten more about this stuff than I’ll ever know, but I was involved, and spearheaded these efforts in some cases on behalf of the entrepreneurs participating these transactions.
Chapter 4. Building Subscriber Bases – Call Centers
A natural expansion of my business career landed me in the call center industry. Every telephone, cable and cellular company’s’ subscriber bases were built on the backs of call centers.
I built a few operations up to 2,000 seat operations with up to 500 seats under the roof and outsourcing the remainder to Canadian call centers, which in my opinion had the best call center talent in the world.
The exchange rate on the USD vs. the CAD at the time was very attractive and allowed me to utilize these resources for less than $15 USD an hour on an outsourced basis. These call centers provided a way to secure hundreds of thousands of new subscribers every month like clockwork.
What I learned:
- How to create significant value for telecommunications companies fast — the subscriber valuation for a cable subscriber at the time was upwards of $5,000 each… You do the math.
- How well financed telecom companies could amortize their subscriber acquisition costs over a long period of time to build value.
- Hourly pay – many large telecom companies paid upwards of $38 to $48 dollars per hour, per seat at a hard cost including training, turnover and taxes at a cost less than $20 per hour… Not too shabby when running a couple of thousand seats.
- Performance based pay – , these same companies paid outsourced call centers upwards of $200 per new subscriber (in some cases more) at a cost of less than $20 per hour, per seat. Achieving 1.5 SPH (sale per hour) was common and very profitable for a call center operation… Again, do the math.
- Although the performance based compensation looks great, not all campaigns were successful and a thousand seats that didn’t hit projected SPH can cost you big time. You can literally lose 10′s of thousands of dollars in just a couple of hours. So even though there are big pay days with performance based pay, hourly compensation was a much more sustainable profit model.
Chapter 5. A Bright Future Indeed
Building on these various experiences throughout my career has enabled me to provide a value proposition to many business ventures and the entrepreneurs behind them. The exciting part is I still have many experiences to learn from : )
Today, the power of the digital age is upon us. You can launch an idea internationally with $50K or less and in most cases within 60 to 90 days from inception to launch. The World Wide Web, social platforms, and mobile environment have created sustainable, long term businesses opportunities for resourceful entrepreneurs to build profitable companies well into the future.
The Final Chapter. The Conclusion
Being an entrepreneur requires experience and skill in many different aspects of business.
I hope this sparks ideas and understanding on how one goes about becoming a rock-star entrepreneur. At this very moment, I’m figuring out how to feed my family until another one of these hair-brained business ideas produces some income… The phrase “feast or famine” is very real for entrepreneurs, so be sure to develop some money management skills early on to sustain yourself during the lean seasons – a word to the wise.
If you’re interested in connecting, you can visit my personal blog. I’m currently a partner at DIME Public Relations – we’ve been working with technology startups for the better part of the last 8 years and DIME Labs – a new venture incubator where we turn ideas into companies. We are mainly doing pet projects at this time and we’re announcing two exciting partnerships in the near future.
We are a performance based organization serving entrepreneurs who have great ideas that require cash, bandwidth, development & server resources and need to get their story out to the right audience. We’ve made dreams come true for many entrepreneurs who just needed a little push over the top.
If you have any questions, input, insight – please share them in the comment section below.
Mark Harai is the Vice President of Business Development for DIME Public Relations and Dime Interactive, as well as being a partner at DIME Labs. You can read Mark’s personal blog at MarkHarai.com, or connect with Mark on Twitter at @Mark_Harai.
image: JanneMTags: entrepreneurs, mark harai