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Say goodbye to corp. life
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September 3, 1999: 2:00 p.m. ET
'Great idea': Make sure you know the risks before leaving for your start-up
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NEW YORK (CNNfn) - "I suddenly realized I was taking just as big a risk staying in my corporate job as I would if I left," said Dairl Johnson, who was at the peak of his career and managing a product line with $1.5 billion in sales at IBM.
"With IBM cutting back, the whole idea of the company being there was no longer true," Johnson said. "It rocks your whole perspective, and you suddenly say, 'There's no such thing as job security. I would rather trust my own skills and abilities.' "
Stressed out from too many hours at the computer, Johnson had developed a painful "executive slouch." His back wasn't in great shape to begin with; he had been injured by an ejection seat when he was a Navy fighter pilot.
One day, his doctor sent him to Relax the Back, a small store in Austin, to buy some products. Johnson forked out $5,000 for a recliner chair, lumbar supports and other back-savers. Amazingly, his back pain eased.
Sensing a business opportunity, he checked out the franchise, cashed in his IRA, and maxed his credit cards to spend $184,000 on a Relax the Back franchise in Santa Monica.
"That business did $1 million in revenue in its first 10 months," recalls Johnson. "I knew there was really something going on here."
With Southern California sales soaring, he started thinking bigger.
"I said to myself, 'You know, I want to take this nationwide, and the only way I can do this is to purchase the entire company.' "
Turning to institutional investors, he raised $6 million to buy the operating company. The company owns 10 stores, with another 70 franchises across the United States. Sales are doubling every year, from $7 million in 1994 to $15 million in 1995 and $30 million in 1996. Sales in 1997 were $50 million.
Johnson is planning openings internationally and positioning Relax the Back as the largest retailer in the $2.5 billion back-care market.
Back care is a growing field, since most sufferers are 30- to 60-year-old baby boomers with high-stress jobs and money to spend on relief. Relax the Back stores sell 500 products ranging from inexpensive massage oils to high-end mattresses and reclining chairs.
Looking back at his life as an executive, Johnson said he has no regrets about leaving the corporate nest. He has this advice for other corporate types considering the entrepreneurial leap: "The most important thing is to be prepared for the risk," he advises. "It's a real free-fall, and sometimes you can't find the rip cord."
He said that once you do your research and decide what to do, you "have to launch. You can't put one foot on the boat and keep the other one on land. Failure is not an acceptable alternative. Doubt and fear are OK, but not failure."
Finding a business that really makes a difference is also critical to success, Johnson said. "Align yourself with something you really believe in."
Meanwhile, he's enjoying every minute in the back-care business. "Having a company is like having a sports car," he said. "If you step on the accelerator, the business accelerates. If you put your foot on the brake, everything stops. Everything that happens to the company is a direct result of what you do, and not what someone three rungs up the ladder did."
Before you take your job and shove it:
- Do extensive research on businesses and industries that appeal to you.
- Speak to as many entrepreneurs as possible to get a sense of what it's really like.
- Assess your family savings.
- Make sure you have the support of your spouse or significant other.
- Know that starting or buying a business is extremely stressful.
- Know that things usually take three times as long, and will cost you at least twice as much, as you expected.
- (Excerpted from 201 Great Ideas for Your Small Business. Copyright 1998 by Jane Applegate. Published by arrangement with Bloomberg Press. Excerpts appear each Friday on CNNfn.com.)
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