Cover Story

 

Risks vs Rewards: Understanding the Pains and Pleasures of Starting a Business

 

By Kathryn Peterson & Local Entrepreneurs

 

If you don't mind the possibility of failure, long work hours and unwanted or unexpected responsibilities, then launching a business just might be for you. On the other hand, it's not as bad as it sounds.

The rewards often compensate for the frustrations. Rewards include the chance to be your own boss, tap into your creativity, see ideas flourish, help others and build a legacy. For many Utah entrepreneurs, weighing the risks versus the rewards of starting a business boils down to one thing: Without risks, there are no rewards. Five local entrepreneurs share their greatest risks and rewards of starting a business.

 

Teri Sundh

CEO and Co-founder, Podfitness

Risk: Venturing in unknown territory.

Reward: Leaving a lasting legacy.

After more than a decade of negotiating multimillion dollar contracts at Franklin Covey, Teri Sundh bowed out of corporate culture and into the unknown realm of entrepreneurism. After launching seven businesses, each with highs and lows, she is now successfully at the helm of Podfitness, maker of customized audio workouts.

"My story has had its ups and downs," Sundh says. "There have been lots of challenges and, frankly, disastrous failures. But I love to take ideas to the market. For me, the greatest risk is wondering if consumers and investors are going to buy the idea. Once they do, the next hurdle is figuring out how you'll survive the building and development stage. With Podfitness, it wasn't too hard to persuade consumers and investors that MP3 space is a hot space. It has fun, sexy and attractive rewards. You don't have to do much talking before people get it. It's fun to be a part of something that doesn't require a lot of convincing.

"In business, there are huge ebbs and flows. Your business model may totally change and you must learn how to survive, be flexible, revise and adjust. It takes longer than you plan. Nothing happens as fast as you want it to happen — from funding and shareholder expectations, to launching and seeing a return. We thought we'd be at break even at 18 months, but we just hit our three-year mark and just made break even. Setting realistic expectations requires disciplined management.

"For me, the great reward is hearing an idea in your ear and seeing it fulfill its potential. Podfitness is cooler today than what I thought three years ago."

 

Tim Hunt

Successfully Unemployed Entrepreneur

Risk: Unpredictable financial conditions.

Reward: Being able to make a difference.

After working for The Church of Jesus Christ of Latter-day Saints for 14 years, Tim Hunt took one of the biggest risks of his life by launching Lingotek in 2006. The language translation company did so well that investors bought him out with enough money for him to walk away as a comfortably "unemployed entrepreneur." But the experience didn't come without its risks and challenges.

"I went the first nine months at Lingotek without a paycheck," says Hunt. "I worked as an adjunct professor to pay the bills and mortgage. And I worked incredible hours, usually from 3 a.m. to 11 p.m. I could have quit. I could have failed. But it wasn't in me. I kept at it, and in the end I feel good about where we came out.

"For me, the great reward is being able to make a difference in the world. That doesn't necessarily mean I'm more philanthropic, but I enjoy doing something that make people's lives more productive. I enjoy raising the money and putting teams together. With Lingotek, the intent was to create a simpler and easier way to do translation work. In the end, I could decipher and translate documents from languages I didn't even know.

"Becoming an entrepreneur is an education and sometimes ignorance is what makes you walk into it. You get an education unlike any you'd get anywhere else."

 

Kent Millington

President, IPDevPro

Risk: Potential failure.

Reward: Satisfaction of success.

Kent Millington started a wholesale distribution company in Texas several years ago, which eventually went through bankruptcy. He wasn't prepared for the business failure or the significant amount of money that was lost.

"But money was all I lost. I didn't lose self-respect or enthusiasm," Millington says. "I went on to enjoy many successes and see businesses flourish, which has been a source of great satisfaction. Now I have investments in five companies. There's great fulfillment in being able to pull it off.

"I learned that there are things you can do to keep an optimistic attitude and move forward. When a business begins to struggle, don't get so discouraged and withdrawn that you are unable to seek help. There are things you can do and people you can turn to. You may have to put it in the tank, like I did, but at the end of the day it's just money; and it shouldn't be family, friends or yourself — those things continue on and can still provide you satisfaction. You simply regroup and start over.

"That being said, expectation should be tempered with realism. Know when to cut your losses and do something else. Remain optimistic, work hard and good things will happen. It may not be this business, but it will be another."

 

Joshua Steimle

CEO, MWI

Risk: Personal well-being.

Reward: Being your own boss.

Joshua Steimle's first real business was a Web development firm called Mindwire Interactive, which he started in 1999 while a student at Brigham Young University. He sold it in 2003 and started MWI, a Web design firm in Draper. Steimle also works to raise seed funding for the SEO Consultants, a project that uses automation of basic SEO tasks to provide high-end search engine optimization services to low-end customers.

"Risk, what risk? That's how I looked at things before starting my business. I was hopelessly optimistic," Steimle says. "But there are very real risks and a lot of the risks I took didn't yield the rewards I expected. I risked my marriage, health, financial well-being, reputation and sanity. I've been through some very tough times with my business, so the risks seem a little more real for me than they might for others.

"The biggest rewards for me, so far, haven't been financial — I've run my own business for eight years now and I've only been paid half the time. But I've loved it just the same. There's something incredibly satisfying about calling the shots and being 100 percent responsible for the results. Even if you don't like the results, you can't beat the feeling of taking the plunge and knowing that, succeed or fail, it's all up to you.

"If I could go back in time and have just one minute with myself, part of me would be tempted to not say anything, because I'm grateful for all I've learned, but if I ignored that temptation I'd tell myself to sleep on major decisions, never go into debt, ditch the ego, and take my wife's advice more seriously."

 

Michael Proper

CEO, DirectPointe

Risk: Time away from family.

Reward: Reprioritizing and creating value for others.

Michael Proper has one of the most endearing rags-to-riches entrepreneurial stories you'll ever hear. Proper, a former foster child and 16-year-old manual laborer, has led his technology company to massive growth and success. Proper and his wife invested their savings to launch DirectPointe in 2000.

"When you start a business, it isn't like you can punch in and punch out," Proper says. "You're always in. There's an emotional risk when you miss out on things such as family. However, it's truly rewarding to force yourself to find a balance, to reprioritize and to focus. That's been a growing point for me as an individual. I'm constantly asking myself, ‘What am I not going to do today?'

"I've always valued relationships. As you start and grow a business, you end up losing that basic intimate relationship that you once had with friends. Even from an HR standpoint, because our business has grown, there are people who walk down the hall that I don't know. I used to personally interview and hire everyone. For me, those relationships are really important.

"But by taking risks, you get huge rewards. We get to create businesses and use them as a vehicle to create value and help others. That's one of the reasons I started a business."

 

Launch - Summer 2008

 

 

For the full "digital magazine" version of Spring 2008, visit: www.nxtbook.com/nxtbooks/growutah/launch_2008summer/