Summary: Serial Entrepreneur Stephen Halasnik reads CHAPTER 4 from Everything Ends. Mr. Halasnik, over 25 years, has survived numerous recessions. He shares his experiences.

It was 7:00 am, September 11th of 2001, and I had just walked into my office. My company’s offices are on the 5th floor on a large hill overlooking all of New Jersey. From here, I could see the tops of many New York City skyscrapers about 40 miles away. I had come into the offices with a sense of urgency that day because our monthly revenue had been significantly sliding for the past 18 months. I was worried that what I feared was coming true—the end of a great run might be over and I would have to close the company. From my New Jersey offices, I saw a billowing of smoke on the horizon; on TV, I watched the falling of the World Trade Towers.

I started my company, EXPERTseeker.com, in 1996 when I was 32 years old. With grit, determination, and hard work, I grew it to over $6 million in yearly sales in four years (an astounding 1,000+ percent). Due to a huge demand for our services, growth and profit were exceptional, but when those towers fell, I knew that the economy would plunge into a recession, and with that recession, my company would end. I would have to let people go and I would have to start over. Instead of waiting for our revenue to decline even further, I took action one month later, laying off 95% of the company.

When I was asked to write my story about how I crashed, the first thought that came to mind was that I never crashed. Crashing means that my dreams of owning my own business ended. Crashing means that I failed and never tried again. I never crashed because I always managed my risks and I had a plan before the worst happened. To me, someone who crashes is someone who doesn’t survive. I survived and through that survival, I learned how to start again, how to run businesses better, and how to reduce future catastrophes.

Over a 25-year span, I have built seven companies with two of them reaching $20 million in yearly revenue. However, each business had huge swings in revenue, profits, and emotions. The nature of all small businesses is experiencing ups and downs. Learning to manage that risk—and emotional roller coaster—is just part of being a business owner.

All business owners who start their own businesses have one thing in common. They are tenacious and total optimists. Building a company is the hardest thing you will ever do so you need these characteristics. If you are lucky enough to build a successful company once, try doing it again. There are so many forces against you, having tenacity is the only thing that will help you succeed again and again.

My entrepreneurship started when I was very young. At an early age, I had a speech impediment and dyslexia. The school was really hard for me and back in those days (the ’70s), teachers didn’t have the tools to help kids as they do now. Not only did I have to work twice as hard as every other student, but I also had to constantly find a workaround. At the same time, I was lucky enough to have great skill in various sports so whereas schoolwork lowered my confidence, sports built me up. It was obvious to everyone that I was highly motivated, that I always had a plan, and that I was going to outwork everyone until I reached my goals. I was also lucky enough to have parents that knew they just had to get out of my way and I would find my own path. They didn’t need to motivate me.

I grew up going to high school and college in the ’80s, and the ’80s were all about money. Wall Street was a famous movie, and Bill Gates and Steve Jobs were on every magazine cover. I saw that having money would, first, allow me control over my life, and, second, prove to all those girls and boys in high school that I was special. At the age of 17, I put a plan in place: I would go to work for a big company after college, learn and make my mistakes on their time and then eventually start my own company.

While attending Rutgers University, I went on a summer internship at Xerox Corporation after my junior year. In those days, Xerox was famous. They had a reputation for hiring the best and providing incredible training. I knew that this was an opportunity of a lifetime. I did really well at my internship and Xerox asked me to stay on full-time. Xerox would pay for the rest of my college education if I went to school at night and worked for them in sales during the day. I jumped at the chance, knowing that it was an incredible opportunity.

I worked for Xerox for seven years, becoming one of their top US sales representatives. I loved my work. However, while I worked at Xerox, I continued educating myself about business ownership by reading and taking classes. The more I was promoted at Xerox, the more I saw that my weaknesses in corporate politics were going to really hurt me as I moved into management.

At the age of 29, I was about to get married and my future wife knew about my dream of starting my own company. We decided that it was time for me to start my own business and you would think that after all this time of wanting to do so, I had a great idea about what business to start. I didn’t, so I went back to something my mentor said to me. He said, start a business in something you know. So, without Xerox knowing it, I worked ½ a day for Xerox and the other half building my new company—DigiPrint. I did this for 12 months before I decided to dedicate myself to Digiprint.

DigiPrint would take advantage of a new technology called digital printing. Digital printing allowed one too, for the first time, print high-quality brochures on demand. This also allowed for one-to-one customization. I worked in this field for Xerox so I knew the industry already. The equipment was going to cost $1 million so what I decided to do was to get the work and outsource it to companies that had purchased the equipment already. This strategy would allow me to build cash flow while learning if there was a market for this technology.

Digiprint made me about $80,000 per year in profit, but after year two, I saw the writing on the wall. No one who owned the equipment was making money in digital printing and the printing industry was so competitive that I didn’t want to be in it. I ended up selling my customers for a small amount of money and I was ready to move on to my next business, but again, I didn’t know what that next business would be.

I have always read a lot. Reading The Wall Street Journal and many other business magazines really helped me understand trends. I knew that large consulting companies like Price Waterhouse Cooper were making a lot of money helping companies implement enterprise relationship software and other software initiatives. PWC was charging $500 to $1000 per hour for top expert consultants. At the same time, there was a lot written about potential problems with computer code due to the year 2000 changeover. Most computer codes was written with the year represented in 2 digits, like YY instead of YYYY. Consultants were getting hired to fix all the code. With all the technology professionals doing enterprise resource planning (ERP) and year 2000 fixes, I knew a shortage of technology talent would happen and I knew that this was a good opportunity for a temporary staffing company.

I also learned from my future mentor that as companies got much bigger, they moved their variable costs (more expensive) to fixed costs, allowing the company to lower their costs and improve their margins. Unfortunately, those fixed costs—often full-time salaries and other long-term capital investments— rendered companies unable to respond to market changes. Thus, they were forced out of business or took big losses. I thought the key to long-term survival was not having fixed costs so that I could ride market waves and adjust according.

My sister Denise had started a technology staffing company two years earlier where she brought technology people on H1B visas from overseas and placed them on assignments. I decided to work with her on a 1099 basis in sales so I could learn the business. After eight months, I believed there was an opportunity to start a temporary staffing company that placed very high-end computer consultants and experts. Many of the best experts were leaving consulting companies like PWC to work for themselves. Whereas these experts used to bill at $500+ per hour and get paid $80 per hour from PWC, I could pay these same consultants $160+ per hour and bill them out at $250+ per hour. These experts were often terrible at getting themselves their next consulting assignments and EXPERTseeker.com would bridge the gap. My sister’s business placed lower-end consultants and I would place high-end, expert consultants. I knew that I was going to catch a wave. I also felt that while I was in business, new opportunities for additional businesses would present themselves. So, in 1996, I started EXPERTseeker.com.

EXPERTseeker.com grew tremendously and the profits were exceptional. So much so that I had to think about reducing my tax burden. I ended up buying a dilapidated 10,000-square-foot office building; it was one of the best moves I ever made. The building cost $150,000 and I put in $600,000 in renovations. I moved my company to the top floor and I rented out the rest. The building is now worth $1,300,000 and generates $80,000 per year in annual net profit/tax savings, greatly adding to my net worth. That passive income and asset have allowed me to leverage the building for a bank line of credit which I used in my businesses.

After buying that building, I realized that I had a real gift—I had a photographic memory of visual images. When we went to renovate the building, like a CAD program I could see every renovation and improvement in my head. I could also picture what might look great in all the spaces and when the renovation was completed, the building was one of the nicest office spaces in the area. People who see the spaces are amazed at the design and decorating.

That same skill set helped me pick our family home. We bought it for $380,000, renovated it so that it is now worth $1,200,000, and it improved my net worth by over $400,000 after all the renovations.

The office building and our family home helped me build wealth, leverage financing, and help me survive the ups and downs of future business failures and successes. Building wealth with these assets wasn’t exactly an accident. While working for Xerox, I read a book by Sam Walton called Made in America and that book showcased how he lived under his means. That stuck with me and because I didn’t buy expensive cars, jewelry, etc., I had assets that helped me when times were tough.

Although EXPERTseeker.com was growing, I was still worried because I knew that market changes could affect us. So, I looked at how we could change or add to our businesses. EXPERTseeker.com was first called Atlas Technology Services but about three years into the business, I thought I could move away from our weakness of having recruiters match job openings to using automation for producing the matches (think Monster.com). That approach didn’t take hold because our customers didn’t have the time to search our database. In addition, the experts with whom we were dealing had such complicated expertise that using one or two keywords wasn’t adequate for companies searching for a great hire.

I also looked closely at moving to a consulting model, specializing in one area and having full-time employees. However, it was obvious to me that the fixed costs of payroll and managing employees wouldn’t allow us to grow over $10 million and I would be tied to full-time employees in an ever-changing marketplace.

I decided to just ride the wave and get as much profit out of the company as I could and when that wave ended, cut expenses quickly to maximize profits, also for as long as I could. That is why when September 11, 2001 happened, I was clear on what I needed to do. In many ways, once I let go of staff, I was kind of relieved. Relieved because I could focus 100% of my time on looking for a better business. One that would grow bigger. One where I didn’t have to be the rainmaker getting all the business myself. One that wasn’t so dependent on the hard task of finding and keeping employees with exceptional skills. If you are reading this and think that I was a jerk for letting employees go without thinking about them, you have to know that a lot of my employees had a base salary with a majority of their compensation coming from commissions. With our sales going way down, it was best for them to find other work and I often helped them with that.

The key business strategy that has helped me over and over again is having a plan: I have thought through where I am going, how I am going to get there, what obstacles could come up, how to minimize risks, and a host of other potential issues. In addition, I don’t just think about these things at the beginning of a business but also throughout its life cycle. I always take time out of my week to think.

By the time I closed EXPERTseeker.com I had been a business owner for 10 years and I was better at the various aspects of business ownership. From managing people to managing risk to business execution, that experience helped me in future businesses.

EXPERTseeker.com continued to run profitably for another few years after September 11, but I spent the first six months after that day getting myself mentally and physically back in shape. I went to the gym daily, ate right, and began looking for my next business by reading everything I could find, making lists about potential future businesses, and talking to associates about the next big wave. I had given myself a good runway with the cash I had saved and over and over again, that runway saved me in future businesses. Other than planning, having enough cash or assets to handle tough times is what allowed me to stay self-employed. No matter how good a business you have, tough times will happen.

Many business owners I know ask me if that period was tough. It actually was one of the most exciting times in my business life. I got to start fresh and the burdens of running a business I wasn’t excited about were off my shoulders. During that time, I made a list of the 20 or so businesses I could start and I began investigating the most promising ones. In my head, I still had the idea of catching waves but in an industry that was more recession-proof.

I started working on an idea for placing temporary registered nurses, doctors, or allied healthcare professionals on long-term, temporary assignments at hospitals. Called travel nurses or locum tenens, they would work for 13 weeks and then move on to another assignment in another state. I liked the idea because there was a huge healthcare professional shortage in the United States and I thought healthcare was recession-proof. I also felt I had a lot of experience in staffing and that the type of recruiters/salespeople required would be easier to find and train than those required at EXPERTseeker.com. I also liked the high barrier of entry required to get into the temporary healthcare staffing business due to the high cost of business insurance.

I started spending a lot of time learning all the phases of this new business idea but I needed an insider’s view of the industry. I was lucky enough to speak to a competitor in Tulsa, Oklahoma, who was very kind and informative (throughout my career I have often developed relationships with competitors to share ideas). I asked him if I could fly out and see him. He showed me all the parts of his business: I saw how housing the travelers might prove complicated, that every state had different healthcare professional licensing requirements and that large competitors were locking up hospital contracts. Despite these issues, I felt I had the experience to do well in this business. Looking back, I made one of the biggest mistakes I could, and that has to do with margins. When looking at a business or industry to go into, look at the margins charged and the net profit percentage. If those margins and net profits are big, then it is a good business. However, one of my weaknesses has always been financials and when the competitor showed me his margins, I thought, first, it was good (when it really wasn’t) and, second, I felt he was undercharging. I put a lot of effort into understanding the travel nurse industry and when one has invested so much of one’s time studying a potential business, objectivity goes out the window. The momentum carries you forward away from skepticism and more towards moving forward.

I decided to start HEALTHCAREseeker.com in 2002. We would place travel nurses only and not physicians because the health insurance for physicians costs 10 times what it was for nurses. I felt we could place doctors once we had better cash flow. I felt I would budget $300,000 before I pulled the plug if things were not working out.

With EXPERTseeker.com, I started the company in my apartment, just me and my phone. Since the travel nurse industry was growing by leaps and bounds, I didn’t want to start slow so I hired three recruiters quickly and a director of public relations. I spent a lot of money on advertising to get nurses. We made very slow progress in growing sales and learning about the industry. After the first year, I lost $100,000; where EXPERTseeker.com had caught a wave going up, HEALTHCAREseeker.com caught a wave going down. We got into the industry right at its peak and hospitals started to push back on the expensive cost of travel nurses. Over the next two years, I lost an additional $200,000 and had to let go of all my staff except one really good person. I was at the self-appointed loss of $300,000 and after speaking with my long-time business coach, Jayme, we decided to give it another $50,000 in losses before we called it quits.

Just like the end of EXPERTseeker.com, I started looking for my next business when I saw that HEALTHCAREseeker.com wasn’t going to make it. That was a scary time because I wasn’t sure if I had enough cash reserves to start another business and I might have to get a real job again. Getting a real job was a scary proposition but there was one thing my sister told me that relieved some stress. She said, “You can always get a job and go back to owning your own business again down the road.” Like so many times in the past and future, I started looking for businesses in areas in which I had a natural gift. One skill I had identified early was real estate development so I started looking at the apartment and commercial buildings to buy, renovate and rent. I may not have had enough money but I have never let a lack of money stop me from moving forward.

However, all of a sudden HEALTHCAREseeker.com started doing better and it got to the point where I was making good money. Hospitals started hiring travel nurses again and that wave created a demand for our services again. I put the real estate idea on hold and put time back into HEALTHCAREseeker.com. We started hiring employees again, but this time, I was much better at knowing what to look for when hiring recruiters and salespeople. Over the next few years, I built a team of really good people and we built excellent processes to make our jobs easier. HEALTHCAREseeker.com went from $1 million in yearly sales to $3 million to $5 million to $7 million. We made the 2009 Inc. 500 List of fastest-growing private US companies. Not only were we growing incredibly, but we also had a team of great, talented people with whom I really loved working. Unlike EXPERTseeker.com, I was proud of HEALTHCAREseeker.com. I was starting to work on really interesting projects and I had a vision that when we reached $10 million in sales, we would look at selling to one of the big companies in our industry.

Through all this, I came up with and started another business called Credentialagent.com. This was software that would help hospitals and long-term healthcare companies manage the incredible amount of employee credential information—think licenses, certifications, immunizations, background checks, etc. that expire at different times. Credentialagent.com is, to this day, one of my best ideas. It actually solved a unique problem instead of adding a similar business to an already-crowded marketplace.

In 2007, HEALTHCAREseeker.com reached $7 million in sales, and guess what happened next? The 2008 stock market crashed and the country plunged into a great recession. The great recession was terrible for everyone and every business. Unemployment went to double digits. When people started losing their jobs, they lost their health insurance so they stopped going to hospitals. Nurses who had retired went back to work to make up for their partners losing their jobs. The travel nurse industry was reduced from a $13 billion industry to a $7 billion industry. An incredible drop.

This time, I had a decision to make: would I do what I did with EXPERTseeker.com and close HEATHCAREseeker.com down or would I ride out the recession? I really liked the healthcare space and I thought we were a really good company so I decided to ride out the recession thinking that when we came out of it, I would have fewer competitors. I knew that a recession is usually 18 months long and I could ride that out, but the Great Recession affected our industry for several years. After three years, I couldn’t mentally take it anymore, even though HEALTHCAREseeker.com was still making some money; I decided it was time to move on. I gave my remaining staff four months’ notice and told them to start looking for other jobs. I closed HEALTHCAREseeker.com in 2011.

Over the next few years, I and a close friend of mine, Keith, started looking at angel funding. Angel funding is investing in someone else’s new startup. The hardest part of starting a new business is a good idea and we felt that if we looked at hundreds of companies, we would find a good idea in which to invest and provide our advice. A good idea is one where all the questions have answers. Are there too many businesses in that space already? If there isn’t any, then why not? What capital requirements are needed? What is the plan and cost to acquire clients? Will you like the business? Do you have the skills to work in the field? How long will it be before you are profitable? What companies might be interested in acquiring your business after it grows?

We got presentations from hundreds of companies and we were just not that impressed with the ideas or the owners. At the same time, we saw how many angel investors were losing money and Keith calculated that you needed to invest in ten startups because nine would fail and the tenth would need to make it big time. It wasn’t a formula we liked, nor was it making other investors any money. Plus, we had a hard time finding one company we thought would make it, let alone ten.

Through this experience of looking at angel funding, Keith and I saw that we worked really great together and that we had complementary skills. I was the go-getter and Keith was the one who figured things out. Keith was great at financing/numbers and I was great at marketing. We had known each other for almost 20 years, and we both respected and trusted one another as friends and entrepreneurs. I had always been terrified of having a business partner because of the horror stories I heard; this was the first time I met a business partner who made me a better businessperson. Keith and I began looking for a business we would start and run ourselves.

Since my Xerox days, I had developed a mentorship with my professor, Will, who taught a class I had taken six years in a row called “Cases from the Harvard Business School.” Will taught different case studies about how companies had overcome major problems and he put you in the owner’s seat. It was an incredible learning experience taught by a man who not only was a great teacher but he himself was an entrepreneur. I invited Keith to lunch with me and Will me so they could meet. Will talked to us about an industry that was really growing—the industry provides short-term business loans to businesses that were unbankable. The small businesses to which we would loan money were businesses that Keith and I knew really well because we had built ones like them ourselves. They were staffing companies, machine shops, software companies, and many more small businesses that banks just wouldn’t or couldn’t finance. Also, because clients would pay us back quickly, we would have the ability to use our own money and just keep loaning it back out. Keith was really excited about this business opportunity and because I was so poor at understanding finance, he had to explain it to me. Honestly, I still didn’t get it, but I took his word for it that it was a great opportunity. Will had, over the years, told me about the great potential in this industry but because my understanding of numbers was so weak, I didn’t think it was ever a good fit for me.

After Keith and I did some more research about short-term financing, we decided to move forward. I called Will to let him know and he surprised me with an angry response. He wasn’t happy that we were going into the same business as him. It really shocked me because Will’s company had .0000000001 of the market and he had been telling me for years to look into the space. I had a decision to make. Will was a great friend to me but I didn’t understand why he was so upset. There was no way we would hurt each other, and in fact, we could even work together. Will was already 75 years old and incredibly wealthy. I even offered to buy Will’s company knowing that, for years, Will had been looking for a second-in-command to run the business. Will said “no” to our offer and to partnering; from that day forward, we never talked again. I tried to rekindle our relationship, telling Will that we would not sell to the same clients he went after and we never did.

I decided to move forward and Keith and I started a company called Payroll Financing. Only once in our history have we come across a company that was doing business with Will and we told that company that they should stick with him. To this day, I miss Will’s friendship and counsel. He helped me grow in so many ways and his encouragement in good and bad times was critical to my sanity and success.

One of the things both Keith and I often see in a startup, including our own, is the owner learning something that causes him/her to pivot into a new direction or market. I think this is the most important part of a startup. Get into space with enough cash reserve runway so you can learn and opportunities will present themselves. We started Payroll Financing thinking that we would provide emergency financing when a company was about to miss payroll. We did okay the first two years but the writing on the wall showed us it was very hard and expensive to find clients right when they needed the money.

After thinking about how Payroll Financing could pivot based on what we had learned, I felt what business owners really wanted and needed was a line of credit. I, myself, had one situation with HEALTHCAREseeker.com when I was going to miss payroll due to our growth and our bank wouldn’t give us a quick answer on increasing our line of credit. From that experience, I strongly believe that every business owner should have a line of credit as a cash backup plan. A source that is easy, fast, and inexpensive to put in place. I talked to Keith about it; he locked himself away to study the idea and came back to me a week later with how it would all work. We then changed our name to Financing Solutions and started providing lines of credit to businesses and nonprofits throughout the United States. Financing Solutions has done tremendously well and has grown to over $20 million as of 2019. Not only has it done well financially but it has also been the type of business that Keith and I enjoy running, now that we are both close to 60 years old.

The ability for me to start Financing Solutions illustrates an important lesson—one I talked about earlier. If I hadn’t saved some money, if I hadn’t bought the office building, if I hadn’t increased the equity in my home and increased my net worth, I would have never had the ability to finance Financing Solutions. It’s why I strongly believe that if you have a business and are not increasing your net worth, then you really just have a job.

In 2014, Keith uncovered another industry in which to start a company with lucrative margins. In 2015, we started Elite Funeral Funding which buys life insurance policies when a loved one passes away, allowing the family access to money for the funeral. We found perfect partners to run the company and we provide financing and business advice. In five years, Elite has achieved $20 million in yearly sales and has run relatively smoothly since day one.

So where am I headed next? Believe it or not, Financing Solutions and Elite Funeral Funding still have issues that require our constant attention. When you are in business, there are so many things that can bring down a company—competition, recessions, changes in trends, and new technology. It gets easier but it is never easy.

Every week, I try to find a few hours for studying new, potential businesses but most of my time is spent on what I am good at and what the business needs: lead generation. My job is to get quality prospects for our company and I do this through many different marketing campaigns. I believe that 100% of any company’s success is its ability to get prospects coming to the company who then become customers, all at a reasonable marketing cost. The vast majority of my time is thinking of, studying, measuring, and implementing new marketing initiatives. I like my work.

Because lead generation is so important, I decided to accelerate what I thought I would do eventually when I “retire.” I am now writing, podcasting, blogging, and speaking about my entrepreneurial experiences. I feel like it can help get the word out about Financing Solutions and it also allows me to express myself by helping other entrepreneurs.

Every day, I am excited to go to work and thankful that I have the ability to still live my dream of owning my own company. Throughout all this time, I just kept my head down. Now, I can look up, reflect, and see how incredible my journey has been so far. I’m extremely excited to see what life has in store for me next. What I Have Learned

1. Everything that begins has an end. Think about what problems could come up in your business and what you can do about them when/if they happen.

2. Have a plan. Review and update it often.

3. Know that the economy has a huge effect on every business. In an expanding economy, your business isn’t as good as you think. A recession will force you to execute your business well to survive.

4. Every business has opportunities to pivot to a new market, service or product. Make sure you are aware of those opportunities, regardless of whether you decide to go in a new direction or not.

5. Building your net worth is key to long-term entrepreneurship and control over your future. This can come from several avenues, not just one.

6. Entrepreneurship is autodidactic (self-taught). You need to keep learning and implementing what you learned.

7. The longer you stay self-employed, the better you become at it. The outcome is reducing your risks of failure.

8. Don’t fail, but if you do, pick yourself up, learn from it, and move on. Resiliency and grit are key.

About The Host Stephen Halasnik, Financing Solutions

Stephen Halasnik is the host of the popular, Entrepreneur MBA Podcast. The Entrepreneur MBA podcast’s purpose is to help small businesses get over the $10 million per year in revenue mark. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to small businesses and nonprofits

Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik has started and built 6 companies over 25+ years with 2 of those businesses making the Inc 500/5000 fastest-growing list. Mr. Halasnik is a best-selling Amazon author on business and regularly tweets about his ideas about growing a business. You can also find Mr. Halasnik on youtube talking about Entrepreneurship.

Mr. Halasnik loves small businesses. He lives in New Jersey with his best friend, and his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.

About Financing Solutions

Financing Solutions provides an easy-to-setup unsecured business line of credit to small businesses. The small business financing product is a great cash backup plan that costs nothing to set up, nothing until used, and is inexpensive when needed. Financing Solutions is rated A+ by the Better Business Bureau and 5 stars by the BBB/Google Reviews.

Unlike a traditional business bank loan, our business credit line requires no collateral or personal guarantee (except in cases of fraud) making it an excellent alternative business financing option. Small businesses often used their line of credit for short-term expenses, working capital, to make payroll, or for a business investment especially when business cash flow is temporarily down.

Get a free, no-obligation business line of credit quote by filling out our simple 2- minute business line of credit application here.

Remember: The time to set up a credit line is when you don’t need it.

Note: Financing Solutions donates 10% of its profits to various nonprofit charities