Gainesville Entrepreneurs: Andy Sherrard

What business(es) have you started or built, and what did they build/sell?

Together with my partners, I created O2B Kids in 1998 after three years of development. 

In short, O2B Kids is an education company that packages preschool, afterschool, kids’ classes, birthday parties, special events, parent/child play groups, homeschool classes, drop-off care, a healthy café, and amazing free-play fun into one 33,000 square foot facility.  In 2003, we began expanding the concept and introduced two new prototypes: 1) a small preschool-only facility, and 2) a mid-sized hybrid facility that combines preschool and some of the afterschool
and enrichment class elements.  Today, we operate six locations in three cities with annual
revenues in excess of $9 million.  In 2009, O2B Kids was listed as one of the 5000 fastest growing businesses in the United Sates and the 40th fastest growing education company according to Inc. Magazine. 

What are the top 3 lessons learned from starting/building companies?

1. You are the only one who has to believe! While no company can become reality on the back of one person, it only takes one person to make a company a reality.  Early on, it is difficult to get folks to join your team – as investors, employees, customers, etc.  Don’t worry about the folks who don’t jump
in, keep looking for the people who do. 
If you believe, if you can articulate your vision, if you can define
your customer and meet their needs, if you can intelligently support your
financial projections…you will find and build a team who says “yes.”  Trust your belief.

2. You can’t have too much money! I have developed a real fondness for working capital.  Early on, an accounting friend told me that the only thing he knew for sure when looking at financial
projections was that every number was wrong. 
You do your best to provide the most realistic outlook for your venture,
perhaps even a low, medium, and high projection.  Reality will prove to be different –
sometimes good, sometimes bad. 
Regardless, get as much money as you can even if that means giving up a
bit more equity.  Owning a smaller piece
of a growing business always beats owning a larger piece of a dead business.

3. Invest in your image! One of the single best moves we made was to hire Buster O’Connor, a local graphic designer.  He created our logo, signage, and collateral material.  More importantly, he made us look
professional and made us look like we knew what we were doing BEFORE we knew
what we were doing.  This bought us time
with many families who accepted our early mistakes.  They trusted that we would fix our errors,
improve our operations, and deliver a consistent, quality product.  They believed this in part, because we looked
like a professional company.  Invest in
your professional image!  Call Buster.

How did you fund your business(es) and why that approach?

Initially, we raised $1.5 million through the friend and family network through the sale of $25,000 shares in our business.  We combined this investment with $3.75 million in bank debt which funded the real estate portion of our project.  We have continued to use this method in subsequent projects. 

Who was your first paying customer and how'd you get them?

Getting customers has never been the hard part.  The hard part is keeping them.  In 1998, we sold over 1,000 child memberships before we even opened the doors, due in part to a 30-day unconditional money-back guarantee once our doors opened for business.  With ZERO experience operating a facility like this, the first month was a “what were we thinking” experience!  We refunded approximately 300 memberships in that first month.  I am happy to report
that our operations have improved quite a bit since then.  

What person (non-employee) or entity was most helpful in your success and how?

My partner and I worked at Gainesville Health & Fitness Center for over six years prior to opening O2B Kids. Without GHFC, O2B Kids would not exist.  GHFC was a learning laboratory for us – management training, customer service, facility upkeep, continuous innovation, on and on.  Joe Cirulli and Jan Matkozich were mentors
and supporters.  We can’t thank them
enough!   

Who did you use for legal and accounting?

For legal, we initially used Foley & Larder out of Jacksonville, and eventually switched to Bruce Brashear locally.  Both are great but I love the local connection.  For accounting, we are very happy with James Moore & Co.

What was the hardest part of starting/building your company?

I am reminded of a short essay I wrote for Fast Company magazine that described our journey into business:

We followed a typical entrepreneurial success formula: Mix one part “great idea” with four parts “no experience.”  Create solid business plan and raise $5.2 million.  Buy property, build building, recruit staff, advertise concept, begin presale, dramatically exceed presale projections, spend too much money, feel confident.  Open day one; still confident at noon; slight headache by 3pm;
confidence gone by 6pm; discuss exit strategy by 8pm.  Repeat for 365 days.  Then breathe.  Slight feeling of dejavu arrives year two.  Systems begin to work by year three.  And somehow, our goals become reality and an incredible staff, program, and vision has arrived.

While this essay describes the general challenge of EVERYTHING, my biggest surprise was the difficulty in creating a united, positive, mission-oriented culture.  I considered this area to be a strength for me.  What I underestimated is the difficulty in getting 100 independent people to see the same scenarios and think the same thoughts.  This is different from creativity and innovation where unique points of view are encouraged.  A strong culture is a magnet that brings people together – it is built over time, with lots of training, lots of experience, and lots of goofs.  What I
also know is that every bit of effort that it takes to build this culture is worth it because a positive, mission-oriented culture is arguably the most powerful key to your long-term success as a company.

What's one thing you learned about hiring, firing or managing people?

I believe in the following:  1) Be choosy when you hire, 2) Invest your personal time early with the
new hire, 3) Provide quality training and clear expectations, 4) Connect the new hire with others within your organization, and 5) Connect the new hire to the mission of your company.  If done
well, your company will do well. 

What's one thing you learned about managing investors or boards?

Be open.  Be honest.  Share the good, the bad, the maybe, and the probably not.  Do your best everyday.  Think about the trust they bestowed upon you.  Treat their money as if it were your own.  They honored you with an investment in your company. Honor them with a relentless focus on the mission they bought into and a dedicated effort to maximize their long-term financial return.

Anything else you'd like to share about starting/building companies in this region?

For us, Gainesville has been the perfect incubator for our development.  You will find talent, support and enthusiasm for your success.