Starting a business is difficult, especially when you have to fund it yourself. Bootstrapping – using your own savings or credit to launch a company – requires planning, dedication and a stomach for risk. However, many entrepreneurs launch their businesses out of necessity, without resources or lending options available to them.
John Zaccone, founder of Northstar Truck Lettering and Signs, was driven by necessity during the 2008 Financial Crisis. As his employer's business contracted, he knew he would soon be on the chopping block, so he started thinking about an exit strategy. With no savings and no prospects of obtaining a business loan, Zaccone was faced with a stark choice: Use his savings to pay his mortgage or bet on himself and fund his new business.
Launching a business in a bad economy
Zaccone had long dreamt of going into business for himself but never quite took the step to do it. Following the 2008 financial crisis, though, he realized he would soon be laid off. Sure enough, the moment came on April Fool's Day in 2009 when his employer had to let him go.
"I could tell they didn't want to do it," Zaccone said. "I had already been afraid to go out on my own, but now I had nothing to lose by doing it. This forced me in that direction."
He was given a month's notice to look for another job, but because of the horrible state of the economy, no one was hiring. He secured two interviews at companies more than an hour away from his home, where each position offered just a fraction of the pay he was accustomed to making.
Zaccone recalled the lettering machine at his old company, which was seemingly always profitable. He thought that even in a recession, lettering and signage would be in demand; after all, as people lost their jobs or scrambled to keep their business afloat, they'd likely need lettering for trucks and signage to attract more customers.
"Little by little, I started buying equipment to test the market," Zaccone said. He initially set up shop in his house; within three weeks, he was inundated with orders. "That kind of answered my own question."
He needed a shop. Requests were coming in left and right, and it was unsustainable to continue bringing prospective clients to his home. One day, as he was driving, Zaccone spotted a shop with relatively affordable rent and decided to go for it.
"I thought 'I really have to do this,'" he said. "It was scary, because I had hardly any money put away – maybe enough to cover my mortgage with a little more than that. So, I could pay my mortgage or try to start my business and make an income."
Zaccone chose to invest in his business without any guarantees that it would pay off, in an economy where people were losing their jobs, livelihoods and homes. With no loan and little savings, Zaccone launched Northstar Signs with one goal in mind: hold on to his home.
"There was a lot of fear, but that pushes you not to fail and to look at every decision closely from every angle," Zaccone said. "It's essential, that fear. It keeps you 100% committed."
Finding support to grow a new business
It was a tough economic environment, and Zaccone knew he couldn't do everything on his own. To find support, he joined Business Networking International, a networking group with a strict attendance policy. That was important, because he knew the other members would be as serious as he was. There, he learned the essential elements of running a business, like public speaking and communication. He also joined the Self-Employed Assistance program, part of the unemployment office. That program connected him with resources at Atlantic Cape College, where he learned about the necessities of writing a business plan, the benefits of guerilla marketing and small business accounting.
"They wanted me to do a business plan, and I said, 'There's no way I can get a loan,'" he said. "The professor asked me if that's what I really thought a business plan was for. He told me that a business plan prepares you for every aspect of your business and has to be constantly tailored to your business as it grows. That was key."
Support goes both ways, he added. His customers needed constant communication regarding price quotes and the process, even when it wasn't what they wanted to hear.
"It is always important to keep customers in the loop, whether it is a delay or rescheduling," he said. "I was blown away to find out how many of my competitors just never got back to their customers, and in a recession no less."
Finding external support and offering support to his customers became a key part of launching his company despite the challenging business landscape he encountered in 2009. Still, nothing was guaranteed, so Zaccone had to get creative.
Dedication and creativity
Although Zaccone secured a shop, success was far from certain. He built a brand around lettering and signage, but he needed income quickly. He relied on restoring and selling furniture to keep money coming in as he worked to drum up signage clients.
"I was doing anything I could to take advantage of the shop," Zaccone said. "I had to do whatever it took to put money in my pocket, even if it wasn't totally related to my business in the beginning."
Zaccone worked long hours and weekends. Even though he promised himself he would never work on a Sunday, he found himself doing just that. One piece of furniture he restored sold for $600, and he recalled thinking "That's just about one month's rent." Despite the tough situation, Zaccone said he had a huge motivator driving him to do all the heavy lifting on his own.
"The biggest motivator was just not wanting to lose my house," he said. "I refused to lose my house. Having that fire in your belly is essential. It's constantly door pounding, not taking no for an answer. And then when you get yourself going, it's repeat word-of-mouth."
Today, clients that started their business with Zaccone's help have fleets of trucks and equipment at their disposal. Many remain loyal clients to Northstar as well, which Zaccone credits to his work ethic and dedication in helping his customers build successful businesses of their own.
"My slogan is 'Helping businesses grow one sign at a time.' It's not about making money, because if I do my job and help them grow, then I will make money," Zaccone said. "That's always been my passion, small business."
As time passed, Northstar itself continued to grow. Zaccone was paying his mortgage despite the rocky economic landscape. And soon, he said, he realized that fear wasn't his primary motivator any longer.
From fear and necessity to optimism and growth
For years, Northstar was a passion project started and grown out of necessity and fear. Those powerful motivators drove Zaccone to keep his company afloat and do whatever it took to continue bringing money in. He had his nose to the grindstone for so long that the moment he realized his business had shifted gears to the next level came suddenly and without warning.
"When I had my first job that took me 1.5 hours [to complete], and I made what I used to make in a week, I thought 'Whoa, I didn't realize I could make this kind of money,'" he said. "Then it was what I used to make in a month, I made in a day."
Ups and downs still happen, he added, calling them "roller-coaster rides," but after a while, you get used to it and plan for them. Through all the sacrifice and hard work, Zaccone had carved out a successful business with loyal customers, many of whom were also growing successful companies and coming back to him for more work.
"I hired a part-time employee to have a constant office presence, and I've been blessed, because she is awesome," he said. "It's working out really well, and now my regular business is up and my main accounts are up, so that's great."
Ten years after Zaccone lost his job and started Northstar out of necessity, he's happy to say his business is successful and growing.
Advice for new and aspiring entrepreneurs
For Zaccone, if he could launch a successful business during the biggest recession in recent American history, new and aspiring entrepreneurs can do it today. The advice he offered to those looking to bootstrap companies of their own is simple: Stay dedicated, be creative, and give back.
"First off, don't panic," he said. "It's easy to fall to your fears, but just think outside the box. If you don't have the funds, you have to be creative. Put the time in, believe in whatever it is you are doing, and have passion."
In addition, new business owners should do their homework by researching competitors and their local market, investigating pricing and processes, he said. Finally, Zaccone added, when your business gets off the ground and you have the ability to, it's important to give back to your community. As he says, "It comes back to you all the time."
"Any chance you get, if you're in the position to, it's essential, it's good karma, to give back," he said. "Call it cosmic forces or the business gods, but it comes back to you tenfold."
Whether you're starting from nothing or looking to grow your existing company, finding supportive organizations, communicating closely with your customers and dedicating yourself to doing quality work is key. As Zaccone said, "It doesn't always take money, you just have to be fully invested in what you're doing."