Why Entrepreneurs Need Structure and Efficiency
October 13, 2009
Karen Gruber, ’08 (XP-77), created better balance between family and business life by launching her own company, but not by working fewer hours. “It comes from more efficiency,” Gruber said during a panel at Pink magazine’s fifth annual Fall Empowerment Series at the Marriott in Chicago on October 13. “I actually feel like I’m more productive now than I ever was before.”
Gruber carefully structured The Perfect Dinner by fully staffing operations, tightly focusing staff meetings, eliminating unnecessary paperwork, and utilizing outside resources when needed, she said. Her time is focused on growth and expansion. The Oak Park-based company provides fresh-made, family-favorite meals to let customers “sit down, slow down, and chow down.”
“I don’t need to be on site to make this thing go,” Gruber said. “I structured the business around my life, instead of structuring my life around the business. I can produce the same output in about half a day as I did in two weeks in the corporate world. I work hard and I work fast, and I still go to my daughter’s basketball game at 4 o’clock.”
After Gruber and her team of fellow Booth students placed second and won $10,000 in the Edward L. Kaplan New Venture Challenge Business Plan Competition in 2007, great energy and interest grew around the hub-and-spoke retail concept of The Perfect Dinner, she said. “But nobody was putting any money on the table,” Gruber said.
Gruber spent two years trying unsuccessfully to get formal funding from VCs for this retail company, even though it was already operating with customers, she said. Eventually, she found a fellow businesswoman who provided a low-interest loan and a family member who put up the rest, Gruber said. “I really had to scale back the rate of growth, but in the end I realized I’m going to end up with all of the equity,” she said.
Many women complain they are unable to get financing for their ventures because the “old boys network” shuts them out, said Linda Darragh, clinical associate professor of entrepreneurship and director of entrepreneurship programs for the Polsky Center for Entrepreneurship.
“What we often find – and it applies to men, too – is a lack of understanding of the stages of financing for an early-stage company,” Darragh said. “It starts with personal financing in the beginning, then friends and family, and then angels, or networks of people who want to invest in early-stage deals. When you’ve really proven your product, have multiple customers, have made a name and a marketing play in a region, and want to go national or beyond, that’s when you go for venture capital.”
One of the biggest unanticipated challenges Margaret Castrovillari, ’00, faced in launching Soulistic Studio & Spa was marketing, she said. Despite building a gorgeous eco-friendly facility on Chicago’s Northwest Side and getting favorable reviews on local TV and in national publications, Castrovillari learned that building market traction takes a long time.
“We built the ‘Field of Dreams’ and everybody was just going to come,” she said. “All of a sudden reality hit. People need to know who you are, what you do, and why they should come to you over someone else.”
After spending thousands of dollars on well-crafted print advertising that did not generate business, Castrovillari discovered the internet was the best way to communicate with customers seeking Soulistic’s innovative fitness programming and holistic spa treatments focusing on mind-body harmony, flexibility, and core conditioning. “Once people came in and saw the space, they were sold,” she said. “The problem wasn’t retention, it was getting people in the door in the first place.”
Even though she left a well-paying corporate job, she won complete support for her plan from friends and family, Castrovillari said. “My husband has been my biggest cheerleader,” she said. “His family and my family were all entrepreneurs. My dad said the best bet you can make is on yourself. He constantly said, ‘You’re too smart to work for other people.’”
The more difficult adjustment was merging her business mindset with her staff, Castrovillari said. “I had to tone it down,” she said. “Now I’m working with yoga instructors and Zen practitioners. I came from a background where if you had a job to do, you based your actions on the deadline – 12 hours, 14 hours, whatever it took to get it done. Now I’m working with people who are not motivated primarily by money. They’re motivated by doing healing services and providing a benefit to someone. I had to find creative ways to motivate them.” Both Gruber and Castrovillari had over 15 years of experience in the corporate world before they became entrepreneurs. Before they started their entrepreneurial ventures, both went to Chicago Booth to broaden their education. Gruber and Castrovillari said that the knowledge they acquired at Booth was critical to the launching of their businesses.
Hosted in Chicago, San Francisco, Atlanta, and New York, Pink magazine’s annual fall conference series is designed to let career women connect personally with leaders who are reshaping business today.
— Phil Rockrohr