Jan Koum moved to the U.S. from Ukraine when he was 16 and went to work for Yahoo when he was 21. By the time he was 33, he was living off savings and working to perfect his brainchild, an instant messaging service. Five years later, WhatsApp fetched $19 billion from Facebook.
See Our Slide Show: 6 Surprisingly Simple Ideas That Made Millions
Every year, millions of people launch their own business, hoping to strike it rich. The ones who make it have a good idea, the dedication to turn that idea into a successful enterprise and the patience to see their venture past the often-rocky initial years. Most draw seed money from savings, home-equity lines of credit or generous relatives.
The entrepreneurs profiled here share those traits. They’ve made mistakes, faced financial challenges and worked punishing hours. They haven’t enjoyed the huge success of WhatsApp, but they’ve turned their passions into growing businesses that generate a million dollars or more in annual revenues.
Driving profits with a food truck
Eric Silverstein started his career as a corporate lawyer, and he made good money doing it. But after three years, he decided he wasn’t passionate about his work. He was passionate about food, however, and about working for himself. Silverstein, 31, was born in Tokyo, where he ate Japanese, Malaysian and Chinese cuisine. When he was 10, he was introduced to the gastronomic pleasures of Southern food when his family moved to Atlanta.
Silverstein spent a year developing a business plan for a restaurant, but he couldn’t find a bank that was willing to lend him money. After talking with his sister in Los Angeles, which has a lively food-truck scene, he started looking into getting a truck of his own. “It was fascinating to me in terms of a business model,” he says. “It was a low-cost way to get your feet wet and get your brand out there.”
Silverstein decided to launch his food-truck business in Austin, Tex., which boasts more than 300 sunny days a year and an affluent, growing population. To start the business, he raised $40,000, primarily from family and friends. He spent about $12,000 to lease and decorate his truck, train employees, buy food and create a Web site. The Peached Tortilla—the name is an homage to the time he spent in the Peach State—opened for business in September 2010. Silverstein used the rest of the money for operating capital during the first three months, when the business lost about $20,000. He lived off $30,000 he had saved while he was a lawyer, and he didn’t take a salary until last year.
Silverstein’s menu, which includes Chinese barbecue, pad thai and a Japanese-influenced burger, got good reviews in the local media, but the work was grueling. “This is a business that takes a physical toll,” he says. “I was out scrubbing the truck at 5 a.m., and I’d come home too exhausted to do anything. Emotionally, it was the worst year of my life.” He considered quitting but couldn’t bear the thought of telling his investors, some of whom he had known for 20 years or more.
In time, things got better. Last year, the Peached Tortilla was featured as one of the country’s top ten food trucks on the daytime talk show Live! With Kelly and Michael. In 2012, Restaurant Hospitality magazine named Silverstein in a special feature, “Stars of Street Food.” Silverstein now has 12 full-time and five part-time employees, two food trucks and a catering business. In 2013, revenues were $850,000, and he expects to take in more than $1.2 million this year.
With a new round of investment capital, Silverstein plans to realize his longtime dream to open a Peached Tortilla restaurant this fall. He doesn’t plan to abandon his food trucks, but he’s convinced that a brick-and-mortar business, combined with catering, is the key to long-term growth.
“I’m not happy with a million-dollar business,” Silverstein says. “I want a multimillion-dollar business.”