Founded in Tampa in 2015, New Town Connections specializes in staging social events in casual, fun settings for recently relocated professionals and entrepreneurs.
The first company I ran, I was overly optimistic. I thought I could snap my fingers and start a business, even start making revenue quickly. Case in point: At New Town Connections, we’ve been going for nine months now and we’re making money. Yes, we’re at 215 members, but I’m like, “Oh, we should be at 500.” And so it becomes this struggle of, “OK, we’re making money, but we should be making more money.” If you look at the business plan I wrote a year ago, it was much rosier than what it is today.
It’s nice to start a business and take a risk, but it’s important to be realistic and run a few different scenarios: “Here’s the best case scenario, here’s the middle of the road, and here’s the worst case scenario.” But optimism only goes so far, in terms of dollars. I ran a couple different scenarios [when starting my first business], but really they should have been less optimistic and more full of "what ifs"?
To start a business, you have to be optimistic and you have to believe that things will get better. So if I wasn’t optimistic and didn’t believe in myself, I wouldn’t have started two businesses. It’s high-risk, high-reward. For [New Town Connections], I’ve taken 98 percent of my assets and put them into the business. I don’t worry about failure. It has to work and I have to make it work.
I thought I could snap my fingers and start a business, even start making revenue quickly.
With New Town Connections, I’ve been more prepared to have capital on hand. Even so, if I could go back a year ago, I would have opened up some more credit availability, so I’d be more prepared to withstand slow times. So, from a financing perspective, it’s always best [to start] when you still have a full-time job – it’s much easier to open up credit lines when you can prove you have a steady job. Then you quit your job, but you’ve already opened up all those credit lines. They’ve seen your paychecks.
In hindsight, I should have opened up another $25,000 in available credit when needed. I didn’t think I’d need it. I was like, "Oh, I’ve got $50,000 available, and now I probably could have used an extra 25 grand to fund some stuff."
Those are my lessons: be more realistic and talk to other CFOs who have experience and can review your projections. Even being a CPA, I can look at budgets and finances and balance sheets all day long, but it’s always nice to have another set of eyes from someone who's more objective. They’re not fully invested in the business. They might see the numbers as too optimistic.
Other young entrepreneurs have asked me for advice. I ask them, "Are you financially secure enough? Are you prepared to not have a salary for a year, two years, however [long] it takes? If so, what funding do you have? Do you have sources to pull from? Are you able to tap into your retirement if you need to?" We can all have ideas, but if you don’t have the funding to make it happen, then it’s just an idea.
Pictured: Andrew Machota. / Courtesy of Andrew Machota.