My name is Emily Pelayo, 40, and I’m living in Tracy, Calif. I have a successful career as a facility planner, but as with a lot of other people, I dream of someday breaking away from the rat race. I’ve read finance books that tout owning businesses as the being the ticket and avidly followed Robert Kiyosaki and Loral Langemeier. Both authors have made valid points on all their books and so I set the plan in motion by putting two businesses in place that I felt would eventually replace my job. I gave myself two years for these businesses to thrive so I can devote myself full-time to them. Sadly, the recession happened and the last couple of months have been quite a struggle to keep them both afloat. In a hindsight, maybe I should have just made the jump cold-turkey and devoted myself full-time in developing the businesses. But then again, in light of the current financial crunch, I am thankful that I have kept my job as there’s no way I would survive in this climate had I gone headlong into the business.
What was once a welcoming environment to start up a business just a couple of years ago is now cold and harsh with even the largest businesses closing their doors. If these businesses with millions of dollars of operating capital had to fold in this current business climate, how much more challenging would it be for small business owners such as myself? Needless to say, my two small business are currently struggling but my strategy on how to deal with one is significantly different from the other.
As a facility planner, I was, and still am, very successful at what I do which is mainly focused on the strategic space planning for corporate workplace. However, as an employee, I felt like I was very much underutilized and decided that I should start offering my services to other companies as a consultant. None of this would be on my company’s time of course, but the thought was to initially offer space planning services remotely which I canmostly do on weekends and evenings at home. This led me to establish neographix,llc in September 2005 to provide CAD, Space Planning, Project Management and Relocation services. It’s located in Tracy, CA and covers the Bay Area and San Joaquin county. It was fairly successful and even had a client I was supporting in Australia. I also landed a medium sized relocation project to restack groups within Abbott Laboratories’ office in Santa Clara, CA. I had to hire outside help to assist me due to the size and the time required to be onsite during the moves. After the completion of that project, I told myself that it really would be a viable business to go out on my own – doing what I love on my own hours. Even more than the potential earnings from this venture, the flexibility was by far what had enticed me the most.
I resolved to market my services using my connections on LinkedIn and people I knew from former jobs. I did get leads, especially from LinkedIn, but all of them fizzled out when the recession started. Everyone I knew had started cutting back so a lot more people are competing for far fewer projects and for lesser pay which I wasn’t really keen to do. I felt that dropping my prices would be adverse to what I was trying to do which is to be financially independent. If I start charging less than what I’m currently being paid for in a full time job, then what’s the point of being in business? And since I don’t have much readily available cash for operating expenses, I had to use my business credit card for the bills.
Then the credit crunch happened and my card company decided to cut my limit down to where there was hardly any buffer. Needless to say, that sent my cashflow into a tailspin because of the penalties and the increased interest. So now, what used to be a very promising venture for me has added to my financial burden with seemingly no way out at this point.
However, I’m not about to give up on my little company. To quote Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change”. This recession had taught me that, as a businessperson, I should adapt to the market and look for opportunities in unlikely places. I started looking for trends and ideas via postings on LinkedIn and identify underserved industries where neographix might be useful. Through these postings, I came across a topic about Baby Boomers and how there are not enough service providers for their market for a variety of needs. Because of that little tidbit, I am now drafting a plan on how to leverage my skills as a space/facility planner to target that ever- growing segment of the population. I may need to go on a hiatus for a while just to rethink my plan of attack. As part of that, I would seek additional funding to restructure my debt through the use of government grants for Women and Minority Owned Businesses. My strategy is that by managing my debt and by re-developing my business plan, I would take neographix into a different direction as originally planned while still using my core skills and discipline.
Most people have probably heard the term “multiple streams of income”. For me, that meant putting up a second business across the globe, in Manila, Philippines. Whooshplanet, as it was called, was designed to take advantage of the increasing number of internet users who don’t have access to personal computers in their homes and, instead, frequently use internet cafe’s for this purpose. Second to that, it was my chance to help my fellow Filipinos in achieving their dream of business ownership by partnering with them on this venture.
First off, let me just say that opening a business across the globe is very tricky and cumbersome. There are so many laws and red tape in place that really makes it difficult for anyone to open a legitimate business. After having gone through that process, I can understand now why some resort to bribery or putting up non-licensed businesses because the taxes and fees just by themselves are enough to drive anyone to bankcruptcy. Apart from that, non-Filipino citizens aren’t allowed to own 100% of a business. At the most, they should only have 50% ownership so they should always partner with a local Filipino citizen for this purpose although this type of a relationship doesn’t really work well all the time. It was the most frustrating process I had ever gone through Nevertheless, despite all the challenges and through my partners’ perseverance, we managed to open the shop in February of last year.
We had slow start but after a month and a half traffic at the shop really picked up. I thought that the business would be sheltered somehow by this economic mess we’re in but even over there we were significantly affected. People started cutting down on their unnecessary expenses as job loss from overseas workers mounted. A lot of OFW’s have been laid-off putting significant reduction on the dollar remittances which translated to loss of ancillary income for many. As a result, lesser people have been frequenting the internet shop, thereby reducing our income significantly. To further add, charges for electricity went up and competitors were charging lower just to get people to come in. So towards the end of last year, it was getting really difficult for us to just break even and continue operations so we decided to just transfer ownership to someone who could hopefully make it viable. This is one business that no matter how much money you throw at it, there’s just no rescuing it anymore. It would be an understatement to say that it was on life support and can no longer manage on its own so there’s no other option left but to terminate. There were just so many factors in play that we were just getting hit in all directions to the point it had become unmanageable.
Despite the current economic situation, I’m a firm believer that opportunities exist even in the worst of times but sometimes tough decisions needed to be made. Hard as it was for me to accept my venture in Manila as a failure, I learned in this recession that as a businessperson I need to learn how to make the call and recognize early on if something’s not working the way I envisioned it to be. Some ventures can be rescued and some can’t. As I’ve already mentioned, I’m thankful that I haven’t given up my full time job. Had I done that, then I would be in a much more dire situation and would find it difficult to focus, much less re-develop a plan for neographix. In this manner, being still employed, my personal finances are the least of my worries and I can continue to do business development off hours so I can ultimately start-up again stronger and wiser. And eventually, in the not too distant future, I could report back to say I have made the full transition to business ownership and enjoying the true freedom I have long desired.