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How to work full-time while launching a business, Spanx

1:50 PM, Jul 26, 2011   |    comments
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SPANX founder Sara Blakely began her body-shaping hosiery company while working full time selling fax machines. (USA Today)

ATLANTA -- Sara Blakely went from selling fax machines to creating a fashion empire. Her route to success: manageable moonlighting.

Blakely spent two years doing double duty as both a loyal employee and an intrepid entrepreneur. During the day, she sold fax machines for the firm Danka. On nights, weekends and during lunch breaks, she took steps to launch the Spanx body-shaping hosiery business.

"I had been thinking about a product I could come up with on my own," said Blakely, 40. "I liked to sell and I was good at it. But I (wanted) to sell something that I was really passionate about."

It was a 1998 fashion dilemma that helped her find that product. Blakely hoped to don a pair of white pants for a party, but she couldn't figure out what to wear under them so she would look svelte and not have visible panty lines. Her solution: Wear a pair of control-top pantyhose, but cut off the feet so she could wear skin-baring sandals.

"That worked better than anything I could buy on the market, but they rolled up my legs all night," she said. "I thought, 'This could be the idea I've been praying for. I'm going to figure out a way to make it stop just below the knee.'"

Blakely, then 27, kept her day job, but hunkered down to create a figure-flattering product, get a patent and research hosiery manufacturers.

"I would be on the phone making calls at night and on the weekends, and just e-mailing and researching things," she said.

She wrote her own patent and persuaded an attorney to give her a discount on filing the claim. In 1998, she received a patent for "footless, body-shaping pantyhose." She thought of the name Spanx, and trademarked it online.

A big advantage of having a full-time job while starting the business was the security of having a steady paycheck, she said.

Patricia Greene, entrepreneurship professor at Babson College, says it often makes sense for budding entrepreneurs to retain outside jobs.

"You have to live on something," she said. "You're bringing in other kinds of resources (such as a salary) while you're organizing the resources to really launch your company."

Those receiving a paycheck should practice discipline, and sock as much money as possible away, says Melinda Emerson, author of Become Your Own Boss in 12 Months.

New business owners who have jobs can test their ability to be frugal, yet have the pay backup.

"Cure your addiction to your paycheck," she said. "Only 3 percent of businesses will qualify for venture capital or angel funding. You need to start saving 20 to 40 percent of your check, pay off your credit cards, cars. Your ability to save will determine your success."

While it might be tempting time- and money-wise to use the company copier to print a brochure or send e-mails on the firm's laptop, experts stress that a worker should never do their entrepreneurial planning on company equipment.

"Nothing from your employer should be used for starting your business," said venture finance expert Susan Schreter. "When you're being paid by an employer you should be doing their work."

Emerson says that personal use of company resources could lead to an untimely pink slip.

"You shouldn't do your business on your boss's time," she said. "That's the quickest way to get fired."

While the company's printer paper is off-limits, would-be entrepreneurs can still glean some emotional and social resources while employed.

"You're building your social capital," Greene said. "You're expanding your network, meeting other people who may eventually be customers, may eventually be employees, maybe advisers, maybe any kind of stakeholder in the business."

Blakely not only acquired sales skills - as well as $5,000 in savings to help her launch her business - she also developed a thick skin at Danka.

She says that her time selling fax machines to strangers taught her that "no" doesn't mean a closed door. It just means to work harder.

That learned persistence was useful when she tried to sell her hosiery to a Neiman Marcus buyer. Blakely asked the buyer to come to the restroom with her. She did a before-and-after demonstration of Spanx in the same white pants she wore to the party two years earlier. "She said, 'Sara, I like your idea. I get it,'" Blakely said.

The buyer ordered 3,000 pair of Spanx and put them in seven stores. Shortly after, Saks Fifth Avenue also signed on as a client.

Those orders led to a double life for Blakely.

"I was working for Danka during the day and shipping to Neiman Marcus at night," she said. "Trucks were picking up boxes from my apartment in Atlanta and delivering them from the manufacturer to my apartment."

Then, unlike many other company founders who struggle with the idea of when to ditch the full-time job, Blakely received a very clear sign that her hosiery business was poised for success: Oprah Winfrey chose Spanx to be featured on the popular "favorite things" episode of her TV show.

After that, the demand for Spanx skyrocketed. Blakely and her then-boyfriend opted to work on the business full time from her one-bedroom apartment. By 2002, she had an office and a staff of six, and had hired a CEO to help with the growing brand.

Today Spanx has more than 100 employees and products such as underwear, active wear, swimwear, pants and skirts. The garb is sold in more than 10,000 retail stores domestically and in 35 countries. Its latest expansion: Spanx-shapewear for body-conscious men.

The company no longer discloses revenue, but in 2008 said it had more than $350 million in sales. That's a big jump for someone who started off making a base salary of $11,000 selling fax machines door-to-door. But Blakely will never forget the lessons she learned.

"People would escort me out of buildings at least once a week (while at Danka)," she said. "I got my business card ripped up in my face twice a week. It was so brutal, but it was good training."

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