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[email protected]. com. Library of Congress Cataloging-inCataloging- in-Publication Publication Data John, Daymond, author. The power of broke : how empty pockets, a tight budget, and a hunger for success can become your greatest competitive advantage / Daymond John with Daniel Paisner.—First edition. pages cm 1. New business enterprises. 2. Success Succ ess in business. 3. Creative Creat ive ability in business. 4. Strategic planni planning. ng. 5. Entrepreneurship. I. Paisner, Daniel, author. II. Title. HD62.5.J6336 2015 658.1'1—dc23 2015021158 ISBN 978-1978-1-101101-9035990359-99 eBook ISBN 978-1978-1-101101-9036090360-55 Printed in the United States of America Book design by Elina D. Nudelman Jacket design by Michael Nagin Jacket photograph by Geordie Wood 10 9 8 7 6 5 4 3 2 1 First Edition
BE DELICIOUS FAITH AND FLOUR GIG I BUTLER BUTLER E N T R E P R E N E U R, CUPCAKE BOSS
Okay, so here’s that story I promised to share about the Nashville woman wo man who started up a cupc cupcake ake bus busines inesss with just $33 to he herr name name.. Her name? Gigi Butler— and it tur turns ns out her story stor y is even better than t han her headline. headl ine. And A nd her cupcakes — turns out they’ t hey’re re right up there with the best I’ve ever tasted. (Her Caramel Sugar Mama and Kentucky Kentucky Bourbon Pie cupcakes are insane!) insa ne!) But like a lot of wildly successful businesses, Gigi’s start-up start- up almost didn’t happen. She’d already chased her dream once and didn’t think she had it in her to make a second run at a second goal. True, a lot of us entrepreneurs get derailed, sidetracked, first time out of the t he gate — but for Gigi, that first dream died hard. He Herr heart was all the way in it, and when she started out it had all seemed seem ed within with in reach. It was the classic “California girl hits h its the fork in the road and turns away from expectations” story: she shocked the smiles right r ight off her parents’ faces during duri ng her first year of college when she announced announced that she’d taken her secondsecond-semester semester tuition money,, made a demo, and was money wa s headed off to Nashville Nashv ille to become a country music superstar. Gigi knew her own o wn mind, as they t hey say in Tennessee — she knew
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she wasn’t cut out for college, knew she’d always wanted to make it as a singersinger-songw songwriter. riter. The move didn’t come out of nowhere, nowhere, so her parents might have seen it coming. In fact, at the ripe young age of seven, Gigi had come home one day from a talent show and announced that she was moving to Nashville to become a country star — so the t he dream was always a lways there, underneath, underneath, all around. She was bound to follow it— it was just a matter of time. By By this point, poi nt, first year of college, Gigi had been singing in a band for a couple years — Gina Butler and the Wild Silver Band. She’d been playing local biker bars, old folks’ homes, state fairs, even did a tour of Canada. All through high school, she worked cleaning houses during the week, played music every weekend, tried to fit in a little school in between — the whol wholee time looking ahead to her first big break. “I had a booking agent at the time,” she tells me, “and I was always on him to send me to Las Vegas. For For whatever reason, that’s t hat’s where whe re I though t houghtt I needed to be. To To me, playing Vegas Vegas would have meant I’d arrived. But he didn’t see it the same way. He didn’t think Vegas was such a good idea. He’s the one who said I should go to Nashville, become something in Nashville. Vegas was where you ended ended up, not not where where you started.” started.” So Gigi listen l istened ed to that little voice singing inside her head, sold her little cleaning business, paid off all her bills, and headed to Nashville with $500 in cash. She didn’t know a soul, didn’t have a place to live, didn’t have a job. “But I knew God would take care of me,” she says. Oh, I almost forg forget et to men mention tion — Gigi came from a Godcentered, hardworking family. Church and faith were a big deal in her house when she was growing up, and so was the spirit of entrepreneurship entrepre neurship — and I’ve come to reali realize ze that these hard- won won values are tremendous assets when you’ you’re re looking to go it alone. A faith in some someth thing ing bigger big ger than tha n yourself — it’ it’ss something somethi ng to rely on, to help see you through, and here Gigi was able to lean on these
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influences to give her the strength to make such a major change in her life. Trouble is, faith alone doesn’t put food on the table or a roof over your your head, so while wh ile Gigi was figur figuring ing things thi ngs out in Music Music City, City, she went back to what she knew. She jump-started jump- started her cleaning business and took a waitressing job at a local Red Lobster, just to get some money coming in while she chased her dream at nights and on weekends. She sang all over town, at top tourist spots like Tootsie’s and The Stage, but that big break never came her way. She was good enough and blessed enough to get these gigs, good enough and blessed enough to keep that dream going for a good long while, but she could never quite make it to a bigger stage. A little side note on Gigi’s Red Lobster job. I worked at Red Lobster, too, before launching FUBU, so she and I have this great piece of common ground. I’ve written about my time at Red Lobster, talked about it to business groups, school groups, all over. In fact, I’ll have a Red Lobster story to share a little later on in the book, but I wanted to put Gigi’s story on pause here to reflect on the power of working working in an entry-level entry-level way for a company with that kind ki nd of major footprint footpr int — because let’ let’ss face it, when you’ you’re re working work ing the floor, hustling between tables, it’s just like any other restaurant job. But if you listen up, keep plugged in to what’s going on around you, you’re bound to pick up a thing or two. A national chain like Red Lobster, there’s a chain of command, reaches all the way down from the corporate level to the waitresses, the bus boys, the fry cooks, so without even realizing it, Gigi wasn’t just waiting table t abless — she was getting an educatio education n on what it means to workk in wor i n the t he food services industry i ndustry,, in i n a franchisefranchise-type type setting, for a national brand. Yeah, she was making rent, buying the time she needed to pursue her music, but along with all of that there was this neve neverr-ending ending lesson on what it means to work for a successful, well-run wellrun company. In a way, she was getting an education in business, even if she didn’t know it at the time .
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69 percent of successful entrepreneurs have worked POWER FACT: 69 over 10 years as employees at other companies. . . . Get that muchneeded experience on someone else’s payroll — might as well get paid while you’re learning from your mistakes.
Gigi was also making som somee valuabl valuablee contacts— this being Nashville, a lot of her customers were country music stars and record industry folks. Somewhere in there, all these little breaks started to add up. It worked out that Gigi’s waitressing job kind of fed her housecleaning job. She cleaned for Leanne Rimes, Taylor Swift, and a bunch of other well-known well-known artists she waited on at the restaurant. How those jobs came about — well, she found herself waiting on their tables, and they got to talking. Got to where Gigi built her cleaning business into something bigger than she could handle on her own, so she started hiring people to help her out— the whole time ti me singing sing ing at night n ight and on the t he weekends. Finally, when she hit thirty, Gigi was ready to give up on her dream. “I knew it wasn’t going to happen for me,” she says, “and I took it as a huge failure on my part. All I ever wanted was to be a singer-songwriter, singersongwriter, but getting off the stage at three o’clock in the morning, working for tips, it started to lose its appeal.”
DARE TO TO GROW GRO W Gigi had always been an avid reader, so she loaded up on business books, self-help self-help books, whatever she could grab to help her get past this th is trouble spot in her life and grow her game. She expanded her housecleaning business, built it up into a thriving little company. At one point, she had five girls working for her, and they’d each clean two houses a day. Gigi herself would do two or three more— always recogn recognizi izing ng the t he power of doing it herself. She saved
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enough money money to buy a house of her her own, pay off all al l her bills. Life L ife was good. It wasn’t wasn’t what she’d dreamed about all a ll these t hese years, but it was good. And then the most amazing thing happened. She got a call from her brother, who was visiting New York. He’d just waited on line for a couple hours at a trendy cupcake shop in Manhattan. Manh attan. He said, “I’m eating one of these red velvet cupcakes, and they’re not as good as yours. You should open a cupcake shop in Nashville.” Gigi was in somebody else’s bathroom when the call came in, cleaning their toilet. It was a tiny little bathroom, with a tiny little mirror over the sink, and when she got off the phone with her brotherr she found herself brothe herself staring star ing into that tiny little l ittle mirror for the longest time. It was like a scene from a movie, and as it played out Gigi asked herself a bunch of questions, which, taken together, was really one question: why not? She was wearing old, ratty clothes, a pair of cleaning gloves, she looked a mess, but the face that looked back at her was the face of that seven- year year-old old girl who wasn’t afraid to dream big. So she decided to go for it. Baking was in her blood. Her whole family baked — her mother mother,, her gra grandmother, ndmother, her aunts. Of course, Gigi didn’t just look in the mirror and make such an important decision on a whim. Now that the seed was planted, she went back and did a little research. She learned that the recent run of high-end high-end cupcake shops— like Sprinkles in Beve Beverly rly Hills, Magnolia Bakery Ba kery in New York, York, and Georgetown G eorgetown Cupcakes Cupca kes just outoutside Washington, DC — had all a ll opened op ened up in i n affluent af fluent communit communities. ies. All signs indicated there was an opportunity in a smaller market like Nashville for a bakery built on her family recipes, featuring fresh cupcakes, made from the finest ingredients, served in a fun, friendly environment. When Gigi tells her story story,, I love how it com comes es down to this simple question: why not? It’s a question we should all be asking ourselves as we embark on our new ventures. Really, we spend so
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much time talking ourselves out of things and not nearly enough time talking ourselves into things. For my money, the arguments in favor of making a bold, proactive move are way more interesting than the arguments against. Gigi put together a business plan and went around Nashville looking for a loan. She went to four banks, but everyone she talked to pretty much laughed in her face and a nd showed her the door. “They basically told me I was nuts,” she says. “They were like, ‘A cupcake shop? Seriously?’ Seriously? ’ ” Now,, the good thing about running a successful housecleaning Now housecleaning business and owning your own hom homee is that you wind w ind up with great credit, so Gigi decided to loan the money to herself. She maxed out her her credit cards and took out $100,0 $100,000 00 in i n cash to ramp up. She drew $35,000 from one card, at 14 percent; $22,000 from another card, at 17 percent. Then she got one card down to 8 percent and took out the rest. “I just went for it,” she says. Yep, she did. Now, here’s where her rich and famous housecleaning clients and her Red Lobster customers check back in, because Gigi kept working wor king as she ramped up her cupcake business business.. She had her little safety net and wanted to keep it in place. And they gave her a head start in growing her customer base — in a grassroots way. She kept telling folks what she was up to, and they just kind of smiled sweetly, trying not to be discouraging. “They’d say things like, ‘A cupcake shop? shop ? Well, Well, bless your little l ittle heart,’ hear t,’ ” she remembers. remembers. “Like “Li ke they thought I was making this huge mistake. They were like all those bankers, but I think thi nk they also a lso felt felt sorry for me, me, because they kept ordering cupcakes. Leanne Rimes had a dinner party, so I made some cupcakes for her. Every night I was making cupcakes, a dozen here, here, a dozen there. I was working on my recipes, trying try ing to get every everything thing just right.” right.” What she was doing, really really,, was market research. This was
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Gigi’s proof of concept, because after a while she developed a good feel for what her customers liked, what they didn’t like. Meanwhile, she was doing the build-out build- out on her first store and running through that $100,000 cash advance, fast. The day before she planned to open, she she was down to $33 $ 33 in her checking checking account. It was all a ll she had to her name— and she still st ill had to pay $4,500 $4, 500 in rent, $1,00 $1,0000 in food and supplies, and another $1,00 $1,0000 or so to cover the salaries of the two full-time full- time employees she’d just hired.
HAVE A LITTLE FAITH The power of broke? Gigi couldn’t see any “power” in her situation—al —alll she could see was wa s “broke “broke..” Her parents even came in from California to help her get the place ready— it was a fullfull-on on family affair — but there was still the matter of all the unsettled bills. Gigi recalls how she approached the shop to give the place a final once-over once- over and was met by the plumber,, who wanted to be paid. Gigi plumber Gig i wrote him hi m a check, but urged him to please, please, please hold off on depositing it for a couple days. She was wa s honest about it — she said, “If you try tr y to cash it, it’ll it’l l bounce, but it’ll be good on Monday, you have my word.” That was good enough for the plumber, but but then the t he contractor came by. Here Gigi thought the guy was just checking on his work one last time before the open, thought he’d been paid in full, but he said, “There’s one bill I forgot to pass on to you.” She said, “Just one bill? That shouldn’t be a problem, long as it can wait wa it until next week.” week.” But that one bill turned out to be a $15,000 charge for a new drywa dr ywallll — mor moree money than tha n Gigi could get her head around at just that moment. (And better believe it, more than she could afford to pay — way more. more.)) “I melted onto the floor,” she says. “I went from feeling good
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about the business to thinking maybe I was making the biggest mistake. I’d already a lready given up on one of my dreams. I didn’t didn’t think th ink I had it in me to give up on another.” Here again, Gigi’s faith helped to see her through. Her mom took her her aside, tried to calm her down. She said, “God will wil l take care of you.” you.” And A nd in those t hose words, once once again, Gigi found the strength to power through. “When I tell my story to people, I always stop myself at this spot, because I don’t want to shove my religion down anyone’s throat,” she says. “We’re all free to believe in our own way. But I mention it because He was an important part of my story. He was. He took a broken-down broken-down country singer and helped her to make a beautiful life. At every turn, I knew He had a plan for me. I knew if I believed in Him that He would believe in me.” Strengthened, she got up early the next morning, put on a cute little cupcake- y y apro apron n her mothe motherr had made for her her,, and pray prayed ed that God would send her some customers. “I had no idea what I was doing,” she recalls. “I “ I didn’ d idn’tt have a men menu. u. I didn’t have a clue how things would go.”
POWER FACT: Did you know there are 9.1 million US businesses say,, that number is growing. owned by women? . . . And I’m thrilled to say
Well, the opening couldn’ Well, couldn’tt have gon gonee any better better.. The There re wer weree lines out the door at Gigi’s Cupcakes that very first day — around the corner even. A local news crew came by to film the crowd, which of course only made the t he lines l ines grow g row longer longer. Word of mou mouth th kicked in — although Gigi’s custom customers ers couldn’ couldn’tt really talk at first because they were so busy feeding their t heir faces with cupcakes. That was in February 200 20088 — five mon months ths after that gamechanging phone call from her brother, and in that short time Gigi had managed to read a bunch of books on starting your own
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business, research the business, t he cupcake industry industr y, learn lear n a bunch of new recipes, negotiate negotiate a lease, build out her first store, store, hire staff staf f . . . and she did most of these things on her own. She wasn’t “broke, “ broke,”” not by a long stretch st retch — at least, not when she started out. She owned her own home. She had a good line of credit. But once once she went and took full ful l advantage of that good line of credit, she was in the hole for a whole lot of money — some of it borrowed at pretty outrageous rates. So she had to hustle— and I mean hustle— just to stay afloat. And the next five months were even more crazy-making, crazy- making, because Gigi was reluctant to give up her cleaning business. It was her safety net, in case this t his next dream d ream went went the way of the first fi rst one. Plus, Plus, she worried that the bake shop wouldn’ wouldn’tt gen generat eratee eno enough ugh mon money ey for her to start paying off those credit card loans, so she believed she had no choice to keep the cash flowing. Long as there were enough hours in the day for her to clean a couple houses, attend to the business, stay ahead of the paperwork, it would all shake out to the good. Let’s be clear — Gigi sti stillll had to work her butt off. She got into a routine routi ne where she’d open up Gigi Gigi’’s Cupcakes Cupca kes at four o’clock o’clock each morning, get the place going, wait for her staff to arrive, work the counter through the morning rush, then hustle out to clean two houses. She’d be back in the store by late afternoon, work through closing, then t hen race home and star startt in on paperwork, paper work, payroll, all of that. “I was killing myself,” she says, “but I couldn’t see any other way.” After her first week, she was able to pay off the plumber, pay her rent, make the first payments on her credit card bills, and even put $300 in the bank. That drywall bill had to wait a while, but things were looking up, up, up. Within three mon months, ths, she’d paid pa id the contracto contractorr in full, added additional staff, taken a big bite out of what she owed to the credit card com companies, panies, and saved $26,00 $ 26,0000 — eno enough ugh to get her to start
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thinking about opening a second store. And now, six years later, there are almost 100 Gigi’s Cupcakes stores, spread across twentyfour states, states, generating generating over $35 $3 5 million mil lion in annual an nual sales. Her secret? Well, it’s in the recipe, first and foremost. Gigi’s cupcakes are baked fresh daily, with love, with passion. It took her six mon months ths to find the perfect vanilla vani lla — and now she uses her own extracts ext racts to make sure everythi every thing’ ng’ss just right. But a lot of busibusinessess launch with nesse w ith the perfect recipe, recipe, the t he perfect formula, formula, without this kind of runaway success, so there’s got to be something else at play — and here I thin thinkk it ties t ies into the power of broke mentality that has follow followed ed Gigi around her entire life. It’ss also in the hard work and passion — Gigi It’ Gigi’’s commitment c ommitment to serving up the very best cupcakes on the planet. (She’s even got a terrific line of gluten-free gluten-free and sugar-free sugar-free cupcakes, in response to the changing diets and tastes of her customers.) But mostly, it’s in her to-theto-the-bone bone appreciation of the value of a dollar. “I’ve cleaned 20,000-square20,000-square-foot foot homes,” she tells me. “I’ve seen how people live at that level, and what I’ve seen is that money doesn’t buy you passion. I still save every penny. I know what it is to not have, so I appreciate everything. I do. And I don’t let anything go to waste. wa ste. I was raised that t hat way, way, came up that way with w ith my cleaning business. If we’ve got a bowl of special frosting, maybe it cost us sixty dollars, and maybe we’re done with a certain recipe and there’s still some left over, a lot of folks would just throw that extraa frosting extr frosti ng away. away. Other people, they don’t spend your money money the way you you spend spend your money money,, right? But But that’s that’s good frosting, so we’ll we’ll come up with a special, we’ll use it on a cake, we’ll find a way to make it work.” Sounds to me like a recipe for success, whaddya whaddya think? thi nk?
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GIGI’S GI GI’S KEY SHARK PO POINT INT REMEMBER, YOU ARE THE BR AND. I don’t know that Gigi herself would REMEMBER, w ould reach for this particular SHARK Point in highlighting her story, but as I tapped into what she’s been through, it’s clear she’s been about building the “Gigi” brand her entire life. At fifteen, she put her name on her first cleaning business. After that, her first band carried her name. And of course, her cupcake store now does as well. At each step along the way, she’s worked hard to ensure that the name would stand for something genuine, something real, something of value. Of course, when you’re so closely associated with your product and purpose and when the thing you’re putting out into the world is totally reflective of who you are and what you’re about, then YOU become your y our first pitch. You won’t won’t be able to make a single sale until you’re able to sell yourself, and here it helps to note that Gigi put the same care and dedication into her cleaning business as she puts into her cupcakes. When she was out there making music, her first love, she sang with all her heart. That’s one of the things people respond to when they go out of their way to visit a Gigi’s Cupcakes shop or buy from the company online. They know that the woman behind the cupcake aims to please. What W hat she’s selling is a treat, an escape — and to keep folks coming back, she realizes that she’s got to put a whole bunch of “above and beyond” into her business, and that most of that has got to come from her. It’s her name on the store, after af ter all.
For more information informat ion and resources, check out www.Da ww w.DaymondJohn.com ymondJohn.com/Powerof /PowerofBroke Broke/Gig /Gigii
