Spirit of Independence Moves Owners of Firms By JACQUELINE FOX Staff Reporter A handful of the people on the Business Journal’s 40 Under 40 list includes some individuals who, at an early age, all ventured in the same direction in setting up their own businesses. The advent of technology, particularly the Internet, has made it possible for more self-starters to run practically any kind of businesses they can conjure up from their homes or small offices. And the stories and strategies for how and why these individuals chose to shun the corporate ladder and, instead, run their own shows, are as varied as the services and products they provide. Born in Johannesburg, South Africa, Mandy Jacob, 30, has made a business out of helping other expatriates either establish a business in the United States, or obtain funding through partnerships with U.S. companies. At 28, Jacob launched her first of four companies, Burbank-based Inkorpa LLC, which broke even on profits its first full year in 2002 at $100,000 and is set to clear that by the end of 2003. Jacob came to the Valley on assignment from her former employer General Electric, which transferred her to a post at NBC Studios in 2000. She says she got the idea for her business after receiving several calls from colleagues overseas with questions about how to establish businesses in the U.S. She also owns and runs The Global Immigration Consulting Alliance, which links business owners with potential partners outside their own countries, and a non-profit called The South African Business Club, a three-month-old chamber of sorts for expatriates with four chapters in operation and four more forming across the country. Jacob also recently purchased Digital Holographics, which makes jewelry engraved with holographic images. “I wanted to be able to help others come here because I love it here so much,” said Jacob. “I was bored in my new position at NBC and I didn’t really see much opportunity for the kind of growth I was looking for. I’m the kind of person that has to be busy all the time.” She says the biggest difficulty she faced, and others agree, was obtaining startup capital. But she relied on her expertise in financial services for help. “Once I did my basic research, I drafted my business plan and started to look for funding,” said Jacob. “But I didn’t realize being a GE employee I was so spoiled. I was all of a sudden exposed to the adage that it’s all about who you know. That was really difficult when it came to networking, but I had my international exposure, which helped. “I love being able to make my own decisions as an owner-operator,” said Jacob. “The risk and reward scenario is a great motivator. Yes there are more risks, but they are worth it.” Business failures To put those risks into context: according to statistics from the U.S. Small Business Administration, 50 percent of all small businesses fail in their first year and roughly 95 percent fail within five years. The top reasons for such high percentages are lack of experience, insufficient capital, selecting a poor location and poor inventory management. For Marx Acosta-Rubio, 33, the road to establishing his own company took careful planning. Financing was also in short supply and to get it, there were huge personal risks. “I was fired,” says Acosta-Rubio, explaining how he left the corporate world at 28 to found Chatsworth-based One Stop Shop, which sells peripheral equipment for computers. The Venezuela-native came to the United States in 1977, attended UCLA and for a brief time was enrolled in law school and later went to work for what has since become a competitor. “I was making a quarter of a million dollars a year when I was let go, so it wasn’t about money for me,” said Acosta. “I just realized that although I know we all make mistakes that I couldn’t work for someone unless they were really someone special. So I came to the conclusion that I wasn’t meant to work for anyone else.” Acosta-Rubio says he deliberately spread the word around the former employer’s company that he was going to set up his own business so that he would be let go. One Stop Shop now has 22 employees with more than 1,700 clients. Revenues have grown 60 to 80 percent, on average each year since the company’s inception; $5 million in 2002 and headed toward $8 million this year. “Financing was probably the difficult thing,” said Acosta-Rubio. “But eventually we were able to have my mother lend us her life savings and we went to City National Bank with about $77,000, opened up a CD to use as collateral to eventually open up a line of credit.” For Jerri Hemsworth, 37, the transition from employee to CEO of her own firm, she says, was always a part of the bigger plan. Hemsworth launched Newman Grace Inc. in 1996, a brand development and advertising firm based in Woodland Hills. Armed with a degree in advertising from Pepperdine University in 1987, Hemsworth took several jobs on staff and as a freelance graphics designer for a handful of local printing and publishing houses. But she says she realized her talents and skills were not going to be fully tapped unless she set out on her own. “It was never really a conscious decision, but more of a natural progression,” said Hemsworth. “What I was already doing was collecting clients and because I was doing so much freelance work, it truly evolved into my own business and I’ve never looked back.” Keeping contacts A tip she says, for anyone in the workforce now thinking of setting up their own company, is to play close attention to their current contacts. “Never burn any bridges,” said Hemsworth. “A lot of my clients right out of the shoot were former employers that needed to outsource jobs. I even to this day still do work for my immediate previous employer.” Newman has roughly $2 million in revenues annually, and despite the downturn in the economy since 2001, saw a 175 percent growth in 2002. “I would say 90 percent of our clients are Valley based, so we weren’t blowing out into large campaigns,” said Hemsworth. “We were doing a lot of Internet and small ad buys, really scrutinizing the buy to make sure the clients’ dollars went the farthest and if something didn’t work we pulled it and put it into something else.” Hemsworth is the immediate past president of the National Association of Women Business Owners-Ventura County and recipient of the organization’s 2003 Business Owner of the Year award. In order to remain in close contact with here three-year-old daughter, Hemsworth says she hired a nanny part-time and often takes her to the office. “That’s one of the reasons why I’ve been able to do this,” said Hemsworth. “It had to accommodate my wanting to play with her and help raise her. So when she hasn’t been at home, she’s been right here with me.” For some entrepreneurs being boss just runs in the blood. That’s the case with Zachary Schuler, president and CEO of Northridge-based Cal Net Technologies, a computer and Internet solutions firm, which he launched at the age of 20 in 1995. Schuler, now 28, says he draws many of his influences from his father, who owns a manufacturing firm in the Valley. “My father’s influence was pretty significant,” said Schuler. “I always saw him working for himself and knowing that if he could succeed in business it was because the weight was on his shoulders. So I grew up kind of used to that concept and never really envisioned myself climbing the corporate ladder.” Schuler’s rise in the IT world began while he was working at a Valley Circuit City store as a sales associate where customers often asked for help with installation of their computers. He founded PC Literate, which later became Cal Net out of his fraternity house at Cal State Northridge. “Very simply I noticed the business opportunity and it was basically putting my faith in the process,” said Schuler. “When you have people asking you for a certain service it’s kind of a no-brainer that there was a market for it.” Because the business is primarily a service industry, start-up capital was not the biggest concern. “I never had to take a loan from anyone,” said Schuler. “Any capital expenditures such as advertising or other services, that was just taking the money I’d made and reinvesting it in the company to make the thing grow. The company grossed $15,000 its first year. By the second, sales had doubled and have continued to grow since. Cal Net has 11 employees and serves several businesses in the Valley and the greater Los Angeles area.
Spirit of Independence Moves Owners of Firms