Laid-off insurance exec builds new life testing students

@Money June 6, 2012: 5:48 AM ET
career change

Richelle Lyons Burnett, 48, Boulder. Then: Insurance executive. Now: Education entreprenuer.

(MONEY Magazine) -- As a VP of sales at a major insurance company, Richelle Lyons Burnett's job was so demanding that she found herself working late the day before giving birth to her third child.

Not long afterward -- while she was on maternity leave in August 2008 -- her employer showed its gratitude with a pink slip. "That did it for me," says Burnett. "I was done with corporate America."

Burnett had planned to give herself time to figure out what kind of business to establish. When her husband's company went under in March 2009, however, she realized she needed to get started on something quick.

Ten months later she launched a company that sells online student-assessment tests to colleges, for use in accreditation and quality control.

A contact gave her the idea; he'd heard that James Madison University was looking to license exams it had developed on topics such as information literacy and quantitative reasoning.

"He said, 'This is a ready-to-go opportunity: It's got product, revenue, and clients,' " recalls Burnett. Initially she worried that the niche was too removed from her experience. But the more she thought about it, the more she realized it was basically a sales business.

By December 2009 she'd struck a licensing deal with JMU. To her pleasure, she could swing the fee without raising money. "I didn't want to report to investors," she says. "It would feel too much like working for a big company."

The following year, Madison Assessment had sales of $65,000, thanks to existing test clients. With low overhead, Burnett took home $25,000.

In 2012, with the addition of new exams, she expects sales to top $100,000 and her salary to hit $55,000.

While that's still far from her old pay of $145,000, "I'm all smiles," she says. "I don't know that I gave my career 100% when I was a big-company employee. Now that my name is on the door, though, I'm doing that -- and am super-happy about it."

How she did it

Start-up costs: Roughly $50,000. She drew that money -- used for licensing, legal fees, marketing and web development -- from her severance package.

She's kept costs down by hiring MBA students to identify prospects and analyze data, and by working from home.

How far she moved her family to save money: 1,700 miles. Burnett and her husband sold their duplex in Washington, D.C., and moved to a lower-cost single-family home near Boulder that's double the size. They netted $300,000, which they have drawn from to help cover living expenses.

Year she expects to match her old salary: 2015. To do so, Madison Assessment will need to generate revenue of $200,000. Burnett plans to start hiring a part-time sales force in the next 18 months and to advertise at education industry conventions.

"I will get to $200,000 -- and beyond that," she says confidently.

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