Making Substitutes

We continue our series on financing your innovation in this interview with Sharon McRill, founder of The Betty Brigade. The Betty Brigade is a full service concierge service that will come to you to help you with everday chores and organizing tasks. It has been in existence for five years and is growing at a rate of 40%.

Many might wonder where people get the money to start a business. The financial barrier to entry in service businesses can be quite low. The Betty Brigade is one such business, and Sharon lays out the challenges she faced and how she overcame them:

• Sharon had not planned to start a business, but inspired by an episode of Oprah, she decided to invest a recent $10,000 severance package in her business.
• Needless to say, the Betty Brigade, like many services start ups, did not require much initial investment. Sharon bought a computer, a copier, and a phone.
• Working capital, the amount of money you need to keep your day to day operations running, can be a significant issue when a business first starts. Sharon received payment immediately upon rendering service, reducing the need for working capital. She now manages working capital by taking money up front for large jobs.
• Another issue is financing growth. In the early years, Sharon eschewed outside financing because she wanted to maintain control. One way she financed growth was to presell business for a year. Customers made a large up front payment that Sharon could use to finance necessary purchases for growth.

Sharon is no longer seeking to finance growth purely from internal cash flows and is currently pursuing external financing. In future segments, we will discuss her efforts and progress on this front.

Wayne Millette, Director of New Beginnings Academy, is troubled by the nature of urban schools (download iPod compatible video, 45MB). Part of this sentiment comes from personal experience when as a teenager he made the transition from his bucolic home in Grenada to Brooklyn, NY. Part of this sentiment comes from his dissertation thesis where his research revealed that, on average, university faculty training school administrators had themselves not stepped inside a school in 13 years.

After completing his Ph.D at University of Massachusetts, Amherst, Wayne did a brief sojourn at University of Michigan before taking a position at Olivet College to help start their Master of Arts in Teaching. It was during this period that he began to form the idea to start a charter school. He and a colleague spent their one hour commute to and from Olivet discussing what K12 education meant to communities and planning how they could make more of an impact.

Judy Ravin is an accidental entrepreneur. In this 8 minute segment (download iPod compatible, 40MB), Judy, the CEO of the Accent Reduction Institute, describes what she means by accent reduction and how she got into the accent reduction business. Judy first became aware of the need for accent reduction when, as a junior in college, she landed in Paris Charles de Gaulle airport and could not make herself understood. Her French grammar was perfect, but she could not pronounce the words well enough to effectively communicate.

Fast forward a few years. Judy has earned a Masters in History and is teaching English as a Second Language at Eastern Michigan University where she invents the Ravin Method for rapid accent reduction. She starts to get calls from major local area employers. They're looking for help improving their foreign national employees' pronunciation and also for a way to help their native english speakers better understand different accents. A personal consulting business is born.

In the next segment, we'll learn how the Accent Reduction Institute was brought to life as a wholly owned subsidiary of Menlo Innovations.

In this eight and a half segment (download iPod compatible, 44MB), Wayne Millette describes the steps he had to go through in launching New Beginnings Academy. There were three challenges. First, the school had to become authorized by an authorizing authority in order to undertake any operations as school such as hiring staff. After a period of working with nearby Eastern Michigan University, New Beginnings decided to seek a more expedited process with the market leader, Central Michigan University. New Beginnings was able to get its charter in August of the year it started, barely in time.

Second, New Beginnings faced an eight week period from the third week in August to the third week in October during which they would have to operate without revenue. To fill the gap, they obtained a state start-up grant of sixty-five thousand dollars.

Third, they needed a building. The first building fell through due to difficulties with zoning changes. However, New Beginnings was fortunate to find a church location that could accommodate them for two years. They then moved to their current building in 2001 after completely gutting and renovating it.

In our next segment, we'll discuss why Wayne wanted to start a charter school.