I have the honor and pleasure of having Joe Keeley here on campus as our Entrepreneur in Residence this week. Joe is founder of College Nannies and Tutors, headquartered in Minnesota. From their website:
We serve the short and long-term childcare needs of today’s working families as well as foster the growth of children’s education and development through our experienced nannies. Our services are designed to provide busy parents with the childcare support they need at each developmental stage of their child’s life. We provide a safe and easy means for families to find a qualified nanny to work in their home.
They currently have over franchise locations operating or under development in 13 states.
Seven years ago Joe was a sophomore at the University of St. Thomas where I used to teach. He wandered into my office with what he thought might be a way to make some extra cash during the summer. He was working as a nanny for a family in Edina, MN. Several families in the neighborhood told him that they would pay him money if he could find a college student to be a nanny for their kids. The next summer Joe continued to nanny, but also placed 12 college students as nannies for a $300 finders fee. Thus was born his concept.
He worked on the business while a student in our program. And when he graduated took the risk of running the business full-time. During the first year he entered every business plan competition he could find. He says that he generated more cash from awards in his first year than he did from revenue from the business. But, that cash was enough to make it through the start-up period. It got him to the point where he had a proven business model that attracted the investment capital he needed to scale up the venture.
What a thrill it is to be able to have a former student come to campus to teach our current students.
Here are some of the lessons Joe has learned over the past seven years that he shared:
– The importance of a business’s revenue model. This is the hardest part of planning a business, but in the end is the most important. Getting the revenue model right assures the cash flow you need to survive the difficult early years. Joe learned that his original model of only getting placement fees was too limiting. He eventually found a way to employ the nannies and take a percentage of each dollar they billed out.
– Think! — Knee jerk reactions are not a good strategy. Impulsive decisions rarely work out very well. As Joe told our students, the old wisdom of the importance of sleeping on a major decision has always served him well.
– Investor relations. Investors should offer so much more to your business than just their money. Their expertise and connections can often be as valuable as the cash they bring into the business. Joe added a partner to his business after he graduated. Although the partner infused needed capital, he says that the experience and wisdom that his partner has shared has brought even more value to his business.
– Scalability – what’s right for you? Know your own personal aspirations and build a business model that fits what you want out of your business and the life style you want to live. Not every entrepreneur aspires to build a national company.
– Remember the 3 M’s Joe told our students to evaluate their ideas on: 1) Money – how much to start, how much returned, 2) Market – is there one? How big?, and 3) Me – does this fit with your personal goals, values, interests? Are you passionate? Those of you who read this blog regularly know how important I believe this kind of thinking is when evaluating ideas.
– The importance of creating long term value. To build real value you need to build a business that can run without you. That requires systems. Joe has a goal of removing one task from his job every six months by building a system to make sure that task will get accomplished by someone in his organization.
– Finding the balance between putting out immediate fires and “fire proofing” projects. This is sound management advise for any business.
Joe has learned his lessons well. Although I am proud of all that he has accomplished in business, I am even more proud of the level of integrity he has shown at each step along the way.