Leaving the corporate nest - corporate executives as self-employed; includes related articles

Nation's Business, March, 1987 by Harry Bacas

Bob Phipps began to get new ideas. More people lived in San Antonio than in the whole state of North Dakota. He applied to a bank for a $27,000 small business loan. It took a long time ("bankers understand shoe stores, not crazy things like growing sprouts'), but he got it.

Back in Bismarck, Carter Berg sold the National Grain Farmstead business to buyers who took over its debts and paid the two founders $2,000 each, plus $150 a month for three years. So Phipps had money coming in while he moved the family south in a van.

He rented a 3,000-square-foot warehouse, bought machinery (somebody else was making rotators now), ordered logos, boxes, bags and seeds, and started taking orders. He and Jane visited produce managers to stage demonstrations. They soon were shipping "more sprouts in three days than we did in one month in North Dakota,' Phipps says. At last he could start paying himself a salary.

The company now has its own 10,000-square-foot building, with separate rooms for alfalfa and bean sprouting. It sells 15,000 pounds of bean sprouts and 5,000 pounds of alfalfa sprouts a week. Lately it has branched into other small produce items like small-bud cauliflower and broccoli.

There are 20 employees, and sales last year were $1.3 million.

Phipps has this advice for other would-be entrepreneurs:

1. "You have to work for other people first and make your mistakes on their money. You need to watch others, to see why one person succeeds, what he did right, and why another fails.'

2. "Don't set your goals too high. There's no easy money.'

3. "Keep your options open, be flexible. Making that spinner machine was a total disaster, but we survived it.'

4. "Start out slowly. Accept making less money for a while, so you can keep control of your business.'

5. "Get a board of directors, people who are interested in your well-being and who will give you straight answers.'

The $700 a month she was making as an office manager in Bozeman, Mont., was not enough to support her three children, so recently divorced Pat Thompson returned to Denver, where she had spent part of her childhood. "I was going to the big city to seek my fortune,' she recalls.

She went to work for Jones Intercable, a national firm that owns and operates cable television systems. She demonstrated a grasp of the intricacies of buying and selling broadcast properties, qualified as a broker and four years after she started was the company's vice president for acquisitions.

"I saw all these deals coming in, and I wanted to be on commission,' she says. "But they wouldn't let me. They wanted me to be on salary. That doesn't leave you much incentive or chance for growth. Besides, a woman working for a corporation doesn't have all the opportunities a man does.

"I couldn't go to another cable company. At that time, I was the only woman in the country brokering cable. So I said, "Why not take a chance and do it on my own?''

It wasn't an easy decision. "I was divorced, I had children, and I had to make sure we ate. But I did what I felt I had to do. I was at a dead end.'