"Babe Entrepreneur" Part 2

So, as you learned in Part 1 of "Babe Entrepreneur", the basic premise of the eFactory was correct. We could fill empty buildings with our membership. We could have cool events that filled the place and exposed our concept. The idea was a home run. the successful execution so far, not so much. Now, all we had to do is find a landlord and cut a deal that made economic sense. Club Entrepreneur stopped its monthly meetings for a hiatus after January 2009 when we left the N. Phoenix eFactory location and for the next 8 months, we worked very hard to put together a plan and locate suitable spots to expand our eFactory model.

There was a lot of "practice" trying to find suitable commercial properties to move into. We were always faced with being a "start-up" ourselves, with no track record to speak of and landlords wanted all sorts of guarantees and financial securities, which just weren't there. The commercial markets had started to plummet at that time and while everyone desperately needed tenants, building owners and their commercial brokers steadfastly held onto their "requirements for tenancy" and we watched one deal after another fizzle out.

Finally, one landlord had the wisdom, or perhaps it was desperation, to give us a shot. We moved into a beautiful state-of-the-art facility in Tempe, but had to co-exist with the landlord and his graphic design company until he could move into smaller and more affordable quarters. That took months and, after repeated move out dates, we weren't even sure the landlord actually would move out...but he finally (almost) did. During those months, we realized that our original model would not work like we had planned. The economy had tanked, taking away the banks and creating immobile handicaps out of commercial landlords and entrepreneurs...and everyone else. What resulted was the worst commercial real estate market in history with landlords practically begging people to take space. Our concept of divvying up our 11,500 sq.ft. space and filling it with members of Club E and keeping the spread between what we were paying our landlord and what we could charge our tenants, simply wasn't there any more. Swing...and miss.

Again, like all good entrepreneurs, we improvised and marched forward. Our basic premise of covering the rent, plus making some income from our tenants...simply wasn't happening. Enter the "barter' concept of installing tenants in the private offices and charging retail rates...but in "barter" dollars. So far, so good, but now we have to go about converting those barter dollars into actual cash in order to pay our landlord.

We quickly ascertained that the new facility was perfectly suited for holding events, lots of them including seminars and workshops on a shared revenue basis. We needed to put out a price that was both reasonable and competitive and we quickly began booking out the space consistently. Even with constant activity, the income was still nowhere at the level we actually needed but it was a valiant start. I knew this concept would actually work, it already was proving itself, so I considered this model a "home run" for turning empty buildings into collaborative work spaces and event/seminar/workshop spaces and began looking for other spaces to expand into.

Stay tuned, my friends!

Best always,

Peter J. Burns, III
Founder