Am I Crazy: Chronicles of an Entrepreneur Part 3

Submitted by Kevin Royes on Thu, 05/31/2007 - 17:13.

Am I Crazy: Chronicles of an Entrepreneur Part 3

I write this stuff because...well, for a couple of reasons. One is that it helps me get my thoughts straight, but the main drive is to keep it real...the ups and the struggles...of an entrepreneur, but more specifically, of life. Some days it seems like the hand of god is touching us on the shoulder. Some days it seems like he fell asleep at the wheel with us in the back seat. It's all real, it's all good, and I want to put some of it out there for anyone interested...just my small part, of my small journey. It may entertain some, bore others, and be an inspiration to a few who are neck deep at the moment. Read on my on...

Let’s see, where did I leave off. The Dragons Den I believe. Well today is May 31 and I do have a prototype now (damn sweet, we’ll get into that later), and I did get back to the Den, but no reply.

That’s how it goes. Hopes up, expectations high…and no call back. How to keep the fire of desire burning when certainties continue to show up as being uncertain. That’s part of the fun…and the lesson…there are no certainties.

That being said, this is an incredible time for me and kelvin and I want to keep the journey to market chronicled for the fun of it and the grrrrr of it.

The prototype is in from the factory FINALLY. And it looks SWEEEEET. I went to the National Hardware Show a few weeks back and was hoping to have the proto in time show off, but as I mentioned in a previous blog, I wasn’t expecting it…I was prepared. Instead I had a cool portfolio with intriguing print outs that really told the story well. I also mentioned in that blog that I was looking for a new factory because of the poor communication from my current producers. I sent the president an email about a week prior to the show to say I am stopping all work with them because of the sporadic replies to my emails.

It was a gutsy move because after one year of working on the tool, and over 8 months with this factory I was cutting ties and rolling the dice that I could find someone new. Terminating this relationship now means a set back of at least 2 months, probably more. But I can’t afford to be a low priority to a factory when we land a big order and these guys don’t produce on time for whatever reason.

So off to Orland FLA to scope out the hardware industry and look for new partners. Three days... After the show came to a close, a whirl wind of dust was stirred up. There was one company in particular…they were the first company we stopped to talk with…a US based company, mostly in plumbing fixtures and faucets, but with their own factories in China and a lot of solid distributions channels…Target, Home Depot, Bed Bath & Beyond…they fell in love…IN LOVE with the project and saw it’s potential immediately. We are now currently in talks to see if we can work out a licensing agreement…

More good news…the factory that made my proto has perked up and while at the trade show I rcvd a long letter from the president explaining the situation and still wanting to move forward together. That’s great, but I am cautious…actions speak louder than words, mother used to say.

And yet even more good news…another factory from China (owned by an American) has recently come into the picture and is super excited to work together. Of the three, these guys are the best fit. They have formidable distribution in the US and can drop the tool right in front of a lot of buyers eyes. Also, they seem well financed and really hungry to grow and commit the necessary resources. This is key…they are hungry.

There are days when I wonder what the hell I have gotten myself into. There are days when I scour and Craig’s List for a job. There are days when I avoid phone calls from the credit card companies because I have nothing other than a dream with which to pay my debts, and I know they don’t take dreams for payment. I have sold my house, my car, my bike, and have borrowed money from my wife who has been so incredible to help me even though we are going through a relationship rollercoaster (a separation, then back together, then separated again, then back together again). How much can one woman handle.

The tunnel can certainly be very dark at times, but not now. Not today. Today I sit here with my two week old prototype that is really, really cool…95% there. The light works, the hammer works, the buttons work, the measuring tape works, the snap action works…I used it last weekend around the apartment, and I am ecstatic with the results.

And now I have three companies to negotiate with for a licensing agreement. It seems like it is actually happening… 4 weeks from now I think I will have a signed deal. 4 weeks ago I was ready to sell our dog.

I have all three conference calls today. I missed the 100p call with the US company…I was late from lunch drinking a couple cold beers on a hot patio on a hot day…oooops. That will have to wait until tomorrow…Friday.

But the real interesting calls are this evening. The first is the company with the steam and fire. I am a bit nervous. Today is when we talk numbers and what I am going to ask for is…well, it’s a game right. I am asking for a royalty payment of 15%. I am asking that they commit to $1million in sales first year, which means $150k in royalties paid quarterly…regardless of their performance…that means $37,500 USD payable when we sign the contract. That means…I can pay my credit card bills. That means I don’t have to sell our dog.

It’s a bit nerve racking, but completely justifiable. If I am going to hand over the exclusive rights to commercialize the kelvin brand globally, then I need a commitment. And though $150k may seem steep, the company I work with stands to make close to $300k…almost double. Most companies dream for those kinds of margins. So while I am asking high, it is not at all unreasonable, and I will see who is for real and who wants to just – give it a shot.

After this call, I have a phone/skype meeting with the current factory that made my proto. They originally wanted to commercialize kelvin but as I mentioned, communication has been frustrating, and I am not going to let a few nice emails and phone calls now erase the reality of the past 8 months.

In any case, the point I want to make is that these are exciting days. The proto is looking awesome, interest in the project is at an all time high, and I have three factories interested in creating some sort of partnership together. If I play it right, I will end up with a great partner that can perform, and see my dream move to the next level…millionaire by end of 2008 don’t forget. But first things first…seal a deal before I have to sell a dog. Wish me luck. I’ll keep you posted.

OH...I almost forgot. In another seeming connection of events that indicate I have turned a corner on the roller coaster of financial experience, I signed my first contract to design products for another company this week...a project worth almost $10k with one third payable in a couple of days. It feels like the first drops of rain after a seven year could I forget such a thing.

What do I pay??? credit cards that are way behind??? Even paying the minimums wouldn't give me any room I could use. I think it's best to save it for a trip to China to sign all the paper work and accept my first royalty check, assuming everything works out, which I know it will because life always has a way of working out...and when it does, then I can try to salvage my rapidly declining credit rating...just a few more weeks VISA...I can make it...we can make it...

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