The Weekly Briefing A FIRST PERSON ACCOUNT OF RUNNING A SMALL BUSINESS
Jim Weldon was an entrepreneur in search of an idea in 1995. When he heard from a neighbor how easy it was for her child to intercept school notices regarding bad grades, disciplinary problems and extensive truancies without her ever seeing them, Weldon seized upon an idea. He researched the concept of a 24-hour report card and within a few months, placed a pilot program at Narbonne High School in Harbor City, part of the Los Angeles Unified School District.
Under the program, parents are given a special password to access records including report cards, attendance reports and even homework assignments for their children via telephone or modem-equipped computer. Today, Westlake Village-based SchoolCom is in place in 10 schools in Southern California, and sales this year are expected to be about $1 million. Weldon shared the process it took in order to get to where he is today. Weldon was interviewed by Julie Sable.
The biggest hurdle I faced was being able to raise money for something that I did not have experience in. I had a concept that I believed in but now I faced the difficulty of convincing others that this was a winner.
I looked for somebody that had a track record in raising money and found a mentor who eventually became our first investor as well. He had done the things I wanted to do with my company – start it from scratch, build it up, obtain private financing and eventually take it public.
We took the mentor to Narbonne High to show him the product in place and being used. That was an important element in proving our credibility.
Even though I am young (32), I had a clear vision and focus on where I wanted to go with SchoolCom. The mentor had me rewrite the business plan which was already prepared, but written for internal use only. The plan was then used as an investment-raising tool.
I had a specific mission for my company and had targeted a specific market. After being introduced to a group of investors through the mentor, they advised me to capture a believable segment of the marketplace, not the entire market.
Being able to show the potential investors my own investment in SchoolCom helped to prove my commitment and the degree of my seriousness about the project.
The best lesson I can pass on to others is to plan ahead before you need money. Try to raise the money before you need it this improves your negotiating position. Once you are desperate, you are limited and at the lender’s mercy, possibly forcing you to accept conditions that you may not have considered previously.
Also, have a clear use of why you want the money. Be able to explain why you need it, when you will see the sales and the earnings and how soon you expect results. To assist you in that effort, do your homework. Of course a lot of this is an educated guess, but guess off of research, go to reference points in your industry such as who has done this before you and how long it took them to get going.
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