Need your smart phone fixed fast? Take it to the guy who gave up working on F-15 avionic systems to start his own veteran-owned business
Oops! That new smart phone just tumbled out of your bag, crashed into the sidewalk and put an ugly spider web crack in the screen. Relax – that phone will be fine. There’s somebody in Omaha who once worked on F-15 avionic systems for the U.S. Air Force who can make that phone as new as the day it came off the shelf.
Jeff Wharton is that somebody, and First Aid Cellular, the business he founded with his father, a retired U.S. Army veteran, has gotten off the ground thanks to an SBA Patriot Express loan. Go ahead, ask him what’s the worst damage he’s seen.
An owner putting a smart phone on top of a car and absent-mindedly driving off?
The construction worker dropping one into a cement mixer?
How about an iPad falling off a five-story building to the ground?
And dealing with the most exasperated and panicked customer or business owner bringing in shattered pieces is a snap for a company run by a couple of veterans who have made multiple tours to Iraq and Afghanistan.
Both military service and entrepreneurial sense in his blood
Wharton came up with the idea for First Aid Cellular on a recent deployment to southwest Asia, and even successfully applied to trademark the name of his new company while still stationed overseas. But repairing smart phones wasn’t the first entrepreneurial idea he’s had. Three years ago, he ran an e-commerce site from his laptop in Baghdad but folded it after struggling to find a niche. And back in 1996, while in college, he attempted to start a custom computer business.
Both military service and business sense is in Wharton’s blood; an ancestor served as a lieutenant under George Washington during the Revolutionary War, and one grandfather apprenticed for a peach wine farm in Pennsylvania later starting his own peach brandy business. His aunt and uncle run an auctioneering business in Superior, Neb.
So when Wharton ordered a heavily discounted iPhone in need of repair off an online auction site with an eye toward fixing it and using it himself, upon opening the case he discovered that to him, the compartmentalized parts inside the device reminded him of troubleshooting electronics inside the high-tech Air Force jets he worked on during long hot days on a flight line on a base in Florida.
“Working on an F-15, when I was finished I couldn’t have any leftover parts,” Wharton said with a smile, “and on your phone, I won’t have any leftover parts, either.”
Jeff Wharton outside First Aid Cellular's location off West Center Road in Omaha.
Drawing on his lessons learned as an entrepreneur, Wharton knew marketing his nascent company would prove crucial. He reached out to an online site matching skilled multimedia designers with companies that need specialized work—such as a 15-second promotion spot to build a little online buzz about First Aid Cellular. The cost was cheap, so Wharton went back to them for his next 30-second commercial, a cheeky segment with an actor playing a frightened customer pleading with a pretend doctor and nurse to save her smart phone.
Wharton said he wanted to continue working with the advertising company, not just because of the low cost producing the spots, but because the firm employs veterans, many suffering post-traumatic stress disorder, as designers. “Plus,” he added, “they told me that they really liked my company and they thought I’d be a national franchise soon.”
Learned there's no regulation book to follow when starting a unique veteran-owned business
When he returned from his deployment to Omaha, Wharton attended a seminar offered by the SBA’s Nebraska District Office and the Nebraska Business Development Center, where he learned about the Patriot Express loan program. While he got some business from a social networking site, and tried to work with a local computer repair business who offered to incubate his start-up, he was discouraged. He knew he needed capital to grow, but was turned down for a loan from two area banks.
“One of my frustrations is that while there are all these services, like the SBA, SCORE, NBDC, there isn’t a regulation book to tell me how to do this,” the Air Force vet said. “Worse when you start a business, you have all these legal, marketing and operations worries. Sometimes you can’t sleep. But it’s when I stopped worrying about every little thing, that’s when stuff started to happen.”
Wharton offered a presentation on his business—including playing his commercial--before Greater Omaha Chamber Tips Group, a gathering he joined of businesses who meet to share leads, referrals, tips, information and advice directly supporting an ability to drive business. In the audience that day was Travis Havlovic, small business specialist at US Bank.
Havlovic was charmed by Wharton’s business idea, and with his help, First Aid Cellular was approved Aug. 8, 2012 for a $15,000 loan under the SBA’s Patriot Express program. Wharton’s father signed for the loan as CEO of the company, but it’s Wharton who does the work—“my dad wouldn’t know the first thing how to fix a phone,” he laughed.
The approval happened just in time as Wharton had 460 potential customers holding coupons from an online voucher site seeking smart phone repairs. He found a storefront site in a strip mall on West Center Road in Omaha and needed to open the doors--fast.
Preparing for further growth
Another coupon online, this time a national deal, offering a 10-foot earphone cable popular with smart phone users, could “do $180K in business in seven days,” Wharton claimed. Social media ads, in fact, generated more than $31,000 in business in October 2012 alone.
First Aid Cellular boasts most repairs are done in 24 hours, and are proud to have customers across the country ship damaged smart phones and tablets to the small Omaha store for the quick turnaround and discount prices compared with the smart phone service providers. Large, publicly-traded companies have endorsed First Aid Cellular by listing them on employee discount pages as part of company benefits.
Eventually, Wharton may have to bring on employees to handle the additional work.
“My biggest question is how do I find people to carry on my passion? I still have that inner feeling, that drive of working on a phone to make it just as new as it came out of the box,” he explained. “Even though the best interest of this company is making a profit, sometimes I even lose money on a job because I want it done right.”
After almost a year of work to start his business, Wharton has some advice for other veteran entrepreneurs fresh from hanging up the uniform. He’s a believer in the monthly Veterans in Business Forum, an Omaha networking event on the first Friday of each month to help make connections. But starting a business doesn’t end there.
"Do the most with the least amount of money. And watch your money,” he said. “I know how much to start a company, but now I have to figure out how to pay myself. And how do I market with no money? As a new business owner, you’ll get bombarded with people who say they want to market your company. You can’t spend time overanalyzing them all. You have to spend ads on something that suits you.
“Don’t worry about what people can do for you,” Wharton added. “You have to get it done. You have to make it happen. Reach out to people, but it’s up to you to put it all together.”
How does someone go from running a power plant aboard a U.S. Navy ship at sea to guiding small businesses in Nebraska through their bookkeeping snags?
Russ Cowan knows. As the owner of Money Smarts Inc., in Lincoln, he offers custom-tailored services to help area entrepreneurs think beyond the numbers on the balance sheet to make better business decisions for long-term success--all within his customers' tight budgets.
"We've seen some success stories when some businesses are on the verge," Cowan said, "They come to us knowing that they have to fix something or close their doors, and many have been able to turn things around, and are growing, so it’s kind of fun to see it all actually work."
Finding his way from a Navy career to a financial business
But when Cowan enlisted in the Navy more than 20 years ago as a machinist mate, then a boiler technician, he had in mind making the next stripe over poring over spreadsheets matching revenue and expenses. He attended the University of Nebraska at Lincoln as part of the Navy ROTC program, but he hurt his knee which cut his career as an officer short. Still, he graduated with a degree in natural resources sciences, with an emphasis in hydrology.
During college, Cowan picked up a job in retail management, and later worked at H&R Block doing tax returns for five years. Something clicked as he discovered something he liked to do, and eventually, he earned a degree in accounting from Doane College.
After working at a Lincoln-based CPA firm, Cowan moved on to serve as an accounting manager for a real estate company before moving up to operations vice president. But something bothered him.
"Most accounting companies will handle their small business clients by an hour worked being an hour billed, so each time you call, meet with or have work done by your accountant or the staff, you pay for it," he said.
Mentoring small businesses to success
So about five years ago, he asked himself: "What would happen if I opened a company that gave out information to its clients without constantly watching the clock?" Too many times, Cowan said, business owners will not ask questions or discuss their thoughts about their operations to their advisors simply because each answer is billed by the hour.
"Because of that, business owners are forced to go it alone, learning the hard realities of bookkeeping and tax compliance on their own," he added. "Over the last two decades while working at other firms I had watched many small businesses fail due to a simple lack of knowledge."
Cowan discovered a business model of his own, where instead of seeking clients who could pay his per hour rates, he would work perhaps an hour or two a month for each small business customer and make enough on volume.
Money Smarts often will pick up a client's customer data and prepare monthly, quarterly or annual reports as needed, and personally review them at their customer's location. If a small business doesn't have time to meet with Cowan personally, he has set up a web-based management system that allows customers to view details on their account, download and upload important documents, or just as ask a question or two.
Turning to an SBA microlender to help grow the firm
Money Smarts proved so successful that by the end of the 2009 tax season with 34 clients and more referrals coming fast and furious, Cowan, who already had hired a bookkeeper to help, realized that he would have to bring aboard an accountant to continue to grow the business. He turned to Community Development Resources (CDR) in Lincoln, an SBA microloan program participant, for a $5,000 loan for working capital to help pay for the new employee and for additional licenses for the software the firm uses.
The SBA's Microloan Program provides small, short-term loans to small businesses through specially designated intermediary non-profit community-based organizations such as CDR with experience in lending as well as management and technical assistance.
As a result of the microloan, the company doubled its client base in one year and expanded its staff to five people.
"Sometimes it’s having enough money to relax, focus and continue to move forward," Cowan said.
In 2012, Money Smarts took out another microloan, this time for $3,500, helping to bring aboard an administrative assistant and to allow them the ability to serve more small businesses with accounting needs. Two months later, Cowan claimed the company grew by 20 percent, and expects nearly 50 percent income growth for the year.
"We’ve managed to double our clientele almost every year," Cowan said. "I expect some year it’ll taper off but it hasn’t yet."
If it seems as if Cowan runs a tight ship with his business, that's no accident.
"My goal in the service was to be a surface warfare officer and eventually have a ship of my own" Cowan explained. "When I was an employee in different industries, I would tell people nothing equates to having your own thing. That's what this business is, this is having your own ship. What I draw from that experience for the business is that there's a right way to do things and a way to get things done. It wasn’t about giving orders, it was about putting yourself in a position to be respected by your peers. I don’t boss people around, they see the work I do and they respect me for it, and it makes it easier to run this company."
So there she was, downsized from her corporate finance job in the Dallas area the day before, out with her friends, wondering what would be next in her life. She was over 50, without a job, although she was more fortunate than many in the recession with a severance and some stock options. But she did have a thought.
“I always wanted to open a bar,” she said. “I’d go into places, look around, think about how maybe I’d do something a little different than what they were doing.”
And there, out with her friends that night, was one of them exclaiming to her: “You should do that!”
Lila Anderson at Nosh Wine Lounge at 10th and Dodge in Omaha.
A little more than three years later, Lila Anderson’s place, Nosh Wine Lounge, is a staple of the new Capitol District in downtown Omaha. Within walking distance of the CenturyLink Center, Holland Performing Arts, the new TD Ameritrade Park and gathering foot traffic from several downtown hotels, the intimate setting boasts this urban destination as “the place for friends to gather, relax and celebrate good times.”
“A group can hold a nice sized event and have the whole place to themselves,” Anderson said as she took a break from planning to host a large party for a group from ConAgra.
Want to browse from more than a hundred wines to sip? How about artisan beers, cocktails and gourmet sliders and flatbread pizzas using locally-grown organic produce? There’s live entertainment, a VIP area and a private tasting room, and patrons can join a wine club, where members receive two personally selected bottles of wine each month.
Meeting a demand for a unique place
“People are kind of hungry for this,” Anderson said. She’s seen Nosh Wine Lounge packed for events for singles, including an event in conjunction with the dating site Match.com.
Her family wanted her to move back to Omaha when she lost her job with TD Ameritrade in Texas, and soon discovered her old hometown lacked anything like she wanted to create. After looking over available franchises, Anderson decided to hire a business consultant, the former president of the Omaha restaurant association, to get help with a business plan.
“That was in 2009,” she said. “Banks were really tight with money.”
So she smartly put her idea on hold, working for a year as a branch examinations analyst, until she got financing for her idea thanks to an SBA Rural/Small Lender Advantage loan approved Aug. 31, 2010, through First Savings Bank for $150,000 to cover leaseholder improvements and construction to build a bar and kitchen from the ground up.
“I did have many people warning me about the recession, but I think I got in at a good time,” she said. “My lease was low, and there were a lot of good people looking for work.”
Going through the growing pains of a new business
And as she discovered the hospitality industry was different than the financial services industry, her business plan hit a snag.
“Because I managed 300 people at TD Ameritrade, I was used to working with people who all knew what needed to be done,” she said, “so I figured, hire people to do what needs to be done and that’s that.”
Instead, she had to let go the first manager she hired after only six weeks, and replaced him with the lead bartender. He could sell wine, “but I had to let him go after four months. I was learning every time I had to let someone go, I had to take on more responsibilities as a result.”
Anderson admitted the first six months in business “were really hard and there were many times I was wondering, ‘what am I doing here?’
“But here we are. The last six months have been comfortable and we’re where we need to be,” she said. “If I can say one thing, don’t give up. There were so many struggles for this business in the first six months. I had to learn I had to fire people, but then I was struck afterward how I was going to make this work without them. So my piece of advice is to learn everything you can before you start. I thought if I just had everyone in place I’d be set. Now I know what to look for in getting the right people.”
Anderson had a degree in finance and was an operations director with TD Ameritrade in Texas. But that didn’t prepare her for the unique challenges of tracking costs and budget for a small business; she relied on her employees to keep costs in line, then ran into a little trouble when the books got out of control.
“Now I do the budgeting and ordering so I have such a better idea on our costs,” she said.
Her advice: get out and promote
Unlike before she opened the doors to Nosh Wine Lounge, Anderson also finds it tough to make time to network to grow the business.
“I’m telling you, you have to work it all the time, I figured a good place with good food and good service, things would go great but you have to be out there and promote, promote, promote. It’s hard to find the time, but it’s a great resource if you can build a network.”
She’s also looking into leveraging social media to help attract that crucial foot traffic and promote her place’s specials and events.
Still, she’s doing well, $45,000 to $50,000 in sales per month with the help of a full-time chef and three part-time kitchen employees and six part-timers handling customers out front.
“Would I do it all over again, if you would have asked me that six months, a year ago …” she trailed off. “If you ask me now, yes, absolutely. You have to stretch yourself, grow. I think a lot of people don’t have these opportunities to go out and do your own thing, and I wouldn’t have had it if I hadn’t gotten downsized from TD Ameritrade.
“Who knows,” Anderson added, “if my friend hadn’t said, hey you should really open up a bar, who knows when or if I would have done this.”