If you’ve dreamed of being a small-business owner but think you can’t afford to be one, think again. Some of the most successful entrepreneurs started with very little seed funding — in some cases $15,000 or less — and scaled their businesses to make millions.
GOBankingRates found out how to be an entrepreneur and how to make a million dollars from members of the small-business revolution. If you’re looking to make the entrepreneurial leap, take a look at this business advice.
Kamil Faizi: Challenge Coins 4 U in Cheyenne, Wyoming
Kamil Faizi started his e-commerce company Challenge Coins 4 U, which creates custom military challenge coins, with a business loan for $10,000. This was the maximum loan he qualified for based on his credit.
“I launched the business in 2014, but I didn’t start making a profit until 2016 after much trial and error,” he said. “Growing an e-commerce store is a difficult thing to do, especially when you make custom items upon request.”
His Tip for Success: Take Time To Get To Know Your Customers
Faizi has grown his company to bring in $1.12 million in revenue and believes customer service has been a big part of his success.
“I have grown the company by word of mouth, as well as attending trade shows, networking and cold calling our potential customers — and I remember each customer,” he said. “This has seemed to work. When you know each customer by name and know their birthday each year, it doesn’t matter what you are selling — people remember that.”
William Hewlett and David Packard: Hewlett-Packard in Palo Alto, California
William Hewlett and David Packard started what would become the software giant Hewlett-Packard in 1938 in a rented garage with $538 in startup capital, consisting of cash and a used drill press. As of 2018, the company has a market value of $21.9 billion, with $88 billion in sales, according to Forbes.
Their Tip for Success: Treat Your Employees Well
Hewlett-Packard was one of the first companies to offer employees medical benefits and flexible hours, and its benevolent treatment of employees became known throughout Silicon Valley as “The HP Way,” according to Entrepreneur.
“What I’m most proud of is the fact that we really create a way to work with employees, let them share in the profits and still keep control of it,” said Hewlett, according to Entrepreneur.
Positive employee morale has been proven to benefit businesses, and Hewlett and Packard were among the first entrepreneurs to embrace this idea — which can still contribute to the success of small businesses today.
H. Adam Holt: Asset-Map in Philadelphia
H. Adam Holt founded Asset-Map, an advisor finance technology tool that uses visualization to show a client’s complete financial inventory, with his own funds.
“I founded Asset-Map in 2008 to build a tool for myself and my own practice,” he said. “It took four years to make money with Asset-Map because I didn’t publicly launch until 2012. It was after I showed Asset-Map to other financial advisors that I realized many of my peers had the same problems. Launching Asset-Map was about reselling something I created for myself.”
Asset-Map currently supports over 3,500 advisors and is close to reaching $5 million in revenue.
“We expect to get to $10 million in annual revenue in the next three years,” said Holt.
His Tip for Success: Launch a Business That Solves a Problem
“We solved a problem that was a shared problem for other financial advisors,” said Holt. “Asset-Map has achieved success because we had a viral experience. We showed it to 20 people, and that 20 grew to 90, that 90 grew to 300, and then to 1,000 — and we did no marketing when we started. When the product works, people tell other people. And because Asset-Map was designed by the end user — in my case me, a professional — I already knew the problem my peers were having because they were the problems I was having.”
John Paul DeJoria: John Paul Mitchell Systems in Beverly Hills, California
John Paul DeJoria and his business partner, Paul Mitchell, founded John Paul Mitchell Systems, now one of the most profitable hair care companies in the world, with just $700. The company now has a $1 billion annual revenue stream, according to Forbes.
His Tip for Success: Don't Be Afraid of Rejection
“You’ve got to be prepared in life for a lot of rejections,” DeJoria told NBC News. “You must be just as enthusiastic on door 51 as you were on door 50, even if all 50 of those doors are closed in your face. But to get something done, if you’re prepared for a lot of rejection, you won’t let it get you down.”
Franz Jordan: Sellics in Berlin
Sellics, a software as a service (SaaS) company that empowers sellers on Amazon, started with a 2,000 euro ($2,236) loan. But unlike many other bootstrap companies, it didn’t take long for Sellics to turn a profit.
“Our first several-hundred [euro] revenue arrived only four weeks [after we took out the loan],” said Sellics co-founder Franz Jordan. “[We made] the first million after 18 months.”
His Tip for Success: Create a Minimum Viable Product
“We were entering a growing market at the right time, with the right people,” said Jordan of how his company achieved success so quickly. “We believed in our idea, so ‘never give up’ was our credo. Apart from resilience, my advice is to build a small MVP that yields a good profit fast.”
According to Startup Lessons Learned, “the minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”
Nate Martin: Puzzle Break in Seattle
Nate Martin started the escape room company Puzzle Break back in 2013 with $7,000 of his own money.
“We hit the lottery,” he said. “When we opened our doors, escape rooms were completely unknown. Puzzle Break took off like wildfire. Our business model was killer, and we recouped my initial investment almost instantly. Today, we’re a seven-figure business operating across the globe.”
Puzzle Break has expanded from its original Seattle location to open escape rooms in New York, Massachusetts and on Royal Caribbean ships.
His Tip for Success: Start Something Fun
“People are hungry for fun and new experiences,” said Martin. “There are many lessons to be gleaned from Puzzle Break’s journey, but perhaps chief among them is: People like to have fun and they don’t mind paying for it.”
Michael O’Donnell: Cave Tools in Newtown, Pennsylvania
Michael O’Donnell started his barbecue tools and accessories company, Cave Tools, in 2013 when he was 23 years old and still living at home with his parents. The young entrepreneur spent $4,000 to cover his first product costs and other startup costs.
“The startup money was pretty much all of the savings I had at the time,” he said. “The first summer we sold through all of our inventory and turned a very small profit. We did well enough to prove the concept, but my only product was a grill brush, and demand drops significantly in the winter, so Cave Tools remained a side business for the next full year. In 2014, we launched two more products, and started turning it into a real business and making money.”
Cave Tools made the Inc. 5000 list in 2018, with $2.5 million in revenue for 2017 and a 1,120% growth over three years.
His Tip for Success: Don't Throw In the Towel Too Early
“I think that most people fail because they quit too early when they start facing obstacles,” said O’Donnell. “Cave Tools was a small side business for over one-and-a-half years before we ever started making real money. Businesses face difficult obstacles at every step of the way, so if you truly believe in what you are doing, then you need to get used to persisting through the bad times. If you treat the learning opportunities along the way as the reward instead of the money you’re making, then you’ll always be ready to tackle the next obstacle that comes your way.”
Kevin Plank: Under Armour in Baltimore
Kevin Plank put his entire life savings — about $15,000 — on the line when he started the athletic apparel brand Under Armour. Although he initially racked up $40,000 in credit card debt and at one point went completely broke, he was able to turn the company around after making one sale after another, first to Georgia Tech and then to several NFL teams, Fundable reported. The company has scaled tremendously since it started in 1996, now making $2 billion in sales annually.
His Tip for Success: Don't Devalue Your Own Product
When his company was first starting out, Plank sent samples of his products for consideration to be used in the movie “Any Given Sunday,” and while Oliver Stone and the cast were interested in using his apparel, they assumed Plank would send the products over for free — he didn’t.
“It’s a little known fact, but with Oliver Stone and ‘Any Given Sunday,’ for all the exposure that we got from Cameron Diaz to Jamie Foxx’s jockstrap with the Under Armour logo in the center of it, that was something they paid over $40,000 for all the product that they bought from us,” he told The Washington Post.
“What I hear over and over again is ‘this is good marketing,’ ‘you gotta give it away’ or ‘I’m giving it away only for a little bit.’ Don’t ever, ever devalue your product. Ever. It’s the worst thing anyone can do to hurt your brand. I had people threaten that if we didn’t give it to them, they wouldn’t wear it. But I’ve found that if you make a great product, and you charge a fair price, there will be a market for it.”
More From GoBankingRates