Being an entrepreneur is inherently risky. I found this out the hard way, on a journey that taught me crucial lessons about how to balance ambition with risk management when you’re trying to build something amazing.
After a successful eight-year corporate career at Starbucks, I left in 2012. The following summer, I struck out on my own and launched Cielo, an ecommerce startup that makes custom pill holders that double as jewelry. I’d never run a business on my own, and I was learning all the time. It was small, but liberating and exciting to manage by myself.
The company grew quickly, gaining customers around the world and even being featured in Fortune and Vogue. As a first-time entrepreneur, Cielo’s success was surreal, and it gave me the confidence –founded or not – to try something bigger.
A big move, and a desire to build community
In 2016, we moved our family from Seattle to Augusta, Georgia. By that point, Cielo had become pretty automated and didn't require a lot of my time. I was restless. I wanted to create something that would foster community in Augusta and give us a reason to belong, so I started to look for a new venture.
What I prize more than anything is connecting people and bringing them together. The more you care about the people around you, you create a virtuous cycle that makes a difference in their lives.
The opportunity to foster community arrived quickly, with the chance to create a two-month winter holiday festival event based around a community ice rink. I got excited about creating an environment where people weren’t hooked on their cell phones, but were connecting with their friends and families instead, building traditions and making memories.
With our joint background, my husband Mike and I knew we could build the strategy and do the marketing. But we needed help with everything else, so we hired consultants to put together a business plan and budget. During the summer we built excitement in the community and got the support of the local county. We had only a few months before launch, and things were looking promising.
As the summer went along, cracks started to form. We weren’t getting what we needed from the consultants and had to let them go. Only 60 days from opening, we hired a new consultant who went through our budget line by line and confirmed that our spending estimates were appropriate. The only problem was, they didn’t actually add up. Instead of our very reasonable-looking initial estimated cost, a basic arithmetic error meant we were looking at spending more than double what we’d budgeted.
Upon realizing the error, I felt sick to my stomach. I hadn’t double-checked the original consultants’ math. We’d already accepted sponsor money and marketed the event heavily. The new consultant and I scrambled to see where we could cut costs and got the estimate down a little bit. It was still really tight, but not impossible, we thought.
But then in October, a series of unforeseen changes led to the location no longer being viable. So, we made the huge logistical decision to move the rink to another venue 15 minutes away, in the heart of downtown Augusta.
Building community but losing money
Despite the hurdles, the inaugural year of Augusta on Ice was wildly successful from a community standpoint. Thirty thousand people visited, and many of them told us it was the best thing they’d ever seen happen in Augusta (except for maybe the Masters)!
Financially, the story wasn’t as rosy. We’d brought in a lot of money at the door and mostly proven the concept from a revenue standpoint, but we were still well short of covering our costs.
We were torn about the longer-term potential of Augusta on Ice, and in early 2018, we asked ourselves if we could justify doing it again. The financial case was bleak, but we looked hard at the numbers and trimmed our budgeted expenses significantly. We felt confident in the business plan and our chances of breaking even. We found a local partner organization that had the venue we needed–everything short of the ice rink–and began marketing and recruiting sponsors.
It gets harder
In the first week of November 2018, the partners told us they wouldn’t have a spot ready for our rink. With just 11 days to open, we called up Columbia County, where we’d almost hosted the rink the previous year, and asked if we could host it there again. They said they’d love to have us, so we moved the rink back to Columbia County and got everything set up.
But when we opened the day before Thanksgiving, almost nobody came. I crossed my fingers for a better turnout on Black Friday – our biggest day the year before. But only 100 people showed up.
We had put the rink in a great location, but nobody was coming. We had spent a ton of energy on getting open, we realized, but not enough on marketing.
We finally had our first big day in early December. But the next weekend, it was 76 degrees and rainy, and we were forced to close.
Although we’d cut our costs, we were facing the prospect of losing money again, even if things went well the rest of the season. As of this writing, Augusta on Ice faces the prospect of losing money for a second season running. We’d sold our house and even did what we swore we would never do – took money out of our own 401(k)s – to cover the shortfall in 2017, and a big loss in 2018 would hurt even more. It could be crippling for us.
What I’ve learned
I can honestly say that this entrepreneurial venture has been the most difficult chapter of my life so far. So why share my story? Because it’s been a powerful learning experience, and one I want to share with other entrepreneurs who want to grow and make a difference.
Here are the biggest things I’ve learned through it all.
1. Know the numbers - We did a terrible job understanding and managing our expenses at first. I wish I’d spent a lot more time on the details of both the business case as well as the cash flow side of things.
2. Focus on incorporation and funding sources - We organized ourselves as an LLC for expediency, but it would have made a lot of sense to organize as a nonprofit, to gain access to alternate funding sources such as grant programs.
3. Slow down and map the terrain - I have a tendency to jump into opportunities quickly, but that was not the right call on something of this scale. We launched in six months, but a year would have been much better. When you increase the number of stakeholders and factors you don't control – be they partners, local governments, or even the weather – your risk profile rises considerably.
4. Put people first - Why did we do it again after facing a huge loss the first year? Because there are a lot of ways to measure success. We didn’t go into it to make a million dollars; $10,000 would have been enough. This business did exactly what we wanted through its impact on the community and bringing people together. Community impact and social good have been our guiding lights through the fog of financial and logistical disarray.
If you’re an aspiring entrepreneur who wants to make a difference in the world, I hope my experience has given you a starting point to approach your own adventures with your sights set on helping people while being smart about managing risk.
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