How I slept in my warehouse to fund my business

Scott Jones started IT Leaders when he was just 22, but nearly 10 years later the company has a solid client base of over 1,000 small businesses and turnover of about $2 million. Jones says he’s well on his way to a goal of achieving financial independence.

But when the company first started, Jones was so determined to make the business work he sold most of his own possessions – including a guitar collection – and slept in his warehouse to fund the company’s growth.

While he says younger entrepreneurs shouldn’t necessarily do the same thing, Jones maintains he learned a lot from the experience and it helped guide his next decade in business.

How has the business performed over the past year?

It’s certainly been an interesting time for us. The focus for us has been on managed services, so essentially managing client networks and a lot of project installs, that sort of thing. Projects took a dive, but we’ve put a lot of money into cloud computing.

We have a separate division now that does that, and they no longer user servers in house at all. Revenue has been unusually flat this year, partly due to a downturn in IT spend. Typically we average about 40% growth, so it’s a change of pace, but we do expect recovery soon.

So what happened when you first started?

I saw an opportunity there for a company that could provide quality IT support for SMEs. I had seen first hand in various businesses the type of support they get, and I thought there was a gap in the market. I wanted to be financially independent and retire financially independent as soon as possible.

So what did you sell to keep the business going?

Pretty much everything, right down to personal possessions. I didn’t quite go and sell everything on the first day of business, but I had $10,000 in contracts and hired staff, so I knew that wasn’t going to go very far. It started with a motorbike, and a small boat, and then I went through various guitar collections.

Anything else?

It got to a point where renting a unit was a luxury. So in the warehouse I was in, it had a mezzanine level which was quite dodgy. You’d have to be careful not to put your foot through the floor, so I built walls out of boxes and just made a sleeping area. I stayed there for probably a year. I resorted to eating just rolled up fruits at one stage.

That’s a big sacrifice. What was the benefit?

The growth rate was huge, and I needed cash to fund that. I needed to find every single way to save a dollar, but once you’re committed and don’t have much to lose it becomes a lot more fun. It’s easier to be conservative about taking risks when you have a lot riding on it. I just put everything back into the business.

When did things start getting better?

Within a year I could just afford some rent again, and started to become aware with more staff I put on that the business was becoming significant. The problem then was to create a corporate culture and move on from being in that start-up phase.

What advice would you give to entrepreneurs who want to do the same thing?

I think it’s very easy to get into business, and a lot harder to get out of it. The best advice I can give is don’t choose something just because you think it’s a good job. Pick an industry with good margins, something you can emulate. Ideally you shouldn’t have to sacrifice your personal possessions to get ahead but I think I learned more from that sacrifice than I would if I had done anything else.