Economy Stalling Your Small Business? Shift Gears
THESE may not be the best of times to start or run a small business, but Christopher Hazlett’s struggle to hang tough through one crisis after another may hold lessons for the legions of entrepreneurs caught between a stumbling economy and crippling credit squeeze.
At the very least, his upbeat attitude should offer them solace, and maybe even a bit of inspiration.
It has been a rough year for Mr. Hazlett, founder and president of Integrate Consulting L.L.C., a software design firm in Hoboken, N.J. First, during the market turmoil last January, Johnson & Johnson, Merrill Lynch and almost all his other clients walked away from their contracts in just two weeks. His company’s revenue projections for 2008 fell from six figures to close to zero.
Then, he spent a disheartening four months trying to find new business.
Admitting defeat, he made a big gamble to save his company by switching from his comfortable perch of doing software design for Fortune 100 companies to the uncharted territory of developing a Web product for a market that includes churches and synagogues.
His timing is not optimal. He is introducing a software program called Event Clipboard on Friday in the midst of the American financial system’s current nervous breakdown.
Is Mr. Hazlett, 31 years old, nervous?
“Most of all, I feel exuberant,” he said. “I wake up in the morning saying, ‘Yes! I wonder what’s going to happen today?’ ”
It helps that the entrepreneurial urge is in his genes. He formed a theater group in college and made money creating publicity posters and Web sites. Though he weighed a career in acting or the Navy, “I always knew I wanted to start my own company and create something from nothing,” he said.
In jobs after college as a fund-raiser and later as a marketer for a couple of architectural firms, he said, “I got bitten by the bug to make software to make it easier to do things.” Once, he said, for example, he redesigned an operational system that allowed his employer to create photo portfolios for clients in five minutes instead of eight hours.
He said he also inherited his father’s fierce work ethic. He started Integrate in June 2005 while simultaneously studying for a master’s degree in communications at Rutgers University and holding down a part-time job as a data analyst at Johnson & Johnson.
Finally, he exhibited that tell-tale trait of the entrepreneur, boundless self-confidence. After graduating in December 2005, with hardly any savings, he threw himself full-time into Integrate, with Johnson & Johnson as his first big customer.
“Not that I had any huge background in computer science,” he says. “I just knew what I could do.”
He had already learned from a couple of mistakes in his start-up’s early stages. The first was creating a bar code system to manage inventory for a machine shop. The problem was that the owners did not show much interest in it. The lesson, from that, he said, was, “If people aren’t going to use it, don’t make it.”
The second was signing a lopsided contract with a client. The lesson there, he said, was to find a good lawyer and make sure you know exactly what you are getting into when you enter into an agreement.
In 2006, with all his energies centered on Integrate, he prospered. He signed a big contract with Merrill Lynch and a few smaller deals. He hired an assistant, who, like him, worked out of her home. The money rolled in — in the low six figures in 2006 and again in 2007, with phone bills his biggest expense.
But while all this was happening, Mr. Hazlett was also committing a classic blunder of the fledgling entrepreneur: putting his eggs in too few baskets. He said his gut instinct warned him of the danger, but after landing a big job with yet another big corporation last November, he stopped worrying.
Then, it all fell apart. “In early January, we had 12 months of work in the pipeline,” Mr. Hazlett said. “But in just two weeks, all our active clients backed out of their contracts. We went from euphoria to fear.”
After a futile search for new customers, he decided to develop a new product, event-planning software for small and medium-size organizations. Using the open-source Web framework Ruby on Rails, he spent six months writing and fine-tuning Event Clipboard.
“I have a lot of faith in it, in my gut, based on my research,” he said. “We fill a niche that didn’t exist,” which he defines as groups within large corporations, nonprofits, including houses of worship, as well as small and medium-size businesses. Smaller organizations can subscribe to a personal account, which costs $20 a month, while the most advanced version sells for $160.
So far, Mr. Hazlett said, he has recruited nearly 50 beta testers, “and their reaction is very positive.”
The day of reckoning approaches. But he said that the road he had traveled so far had hardened him for whatever lies ahead. These are among the other lessons for running a business that he has absorbed over the past year, he said:
¶Be frugal. Mr. Hazlett never sought outside financing, and has no debt. In Integrate’s heyday, he thought about renting an office, but concluded there was no compelling reason to do so. He cut his salary last year, and even so, puts much of it into his personal savings account.
¶Switch to a new product or service if the one you are marketing is not selling. “I saw that we could only do one of two things: change or close our doors for good,” he said.
¶Be patient. “It takes time to get it right,” he says.
¶Look for opportunity in tough economic times. It was corporate cost-cutting that hurt him last year, he says, and so he is marketing Event Clipboard as a tool for the budget-conscious to save money.
“I’m hoping that by the end of 2009 we’ll have 250 accounts,” he said. “I think it’s going to go.”
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