Entrepreneur Learns from Failed Business

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There are many entrepreneurs who take the risk of trying to run successful businesses. Renee Padilla took the chance at starting her own business and failed.

“I took the risk and started my business with one month worth of expenses,” she said.

Padilla was a business owner of Divine Nutrition, a place to start living a healthy lifestyle. Her business provided customers with nutrition shakes, energy shots and workouts.

Padilla started her business June of 2012 and closed it two years later, in June of 2014. She started it with $1,500, which hadn’t included product to sell to her customers.

Divine Nutrition accumulated about $3,000 per month while it was open. Each month the business was open Padilla had to pay her employees, pay rent, buy product and pay for electricity and water. After her expenses Padilla profited about $600 monthly.

Within the two years Padilla’s business was open she made roughly about $72,000, which is about $36,000 yearly. After she paid rent and bought product to sell to her customers she profited about $14,400 over two years, which ended up being around $2,400 quarterly.

When business first started Padilla was seeing the revenue coming in and started to see the money to cover the costs that she put in. For the first quarter between June-December 2012 she brought in $18,072. After her expenses she profited $3,639 throughout the first quarter.

After a year and a half Padilla wasn’t seeing as much revenue coming in as she once did when she opened her business.

From January 2014 to June of 2014 Padilla only made $17,521 and only profited $2,408. Business started to slow down and she had to close it down.

“I had to close my business because I didn’t have enough cash flow,” she said. “I was having to come out of pocket to cover some expenses the last couple of months.”

Padilla said that a big part of being a successful entrepreneur is being accountable for the business’s money.

“Make sure, if you want to start your own business, you create a business plan,” said Padilla. “Add all your estimated expenses up and add that up to six to eight months of savings.”

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Name:

Renee Padilla

Age:

34

Title:

Owner

Background:

Previous owner of Divine Nutrition

What do you think is the most interesting part of the innovation economy in ABQ?

The fact that people are starting up their businesses on a daily throughout the city.

If you weren’t doing this job what would you be doing?

At home being a stay home mom.

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Local businesswoman aimed to help customers be healthy

Renee Padilla is the former owner of Divine Nutrition, a nutrition club she started in Albuquerque. It lasted two years before she gave up on it.

“ I definitely would do it all over again. I really enjoyed helping people, it made me smile to see them changing their lifestyles to be healthier,” she said.

In 2012, Padilla had a full-time job with the Herzog Contracting Corp. as an administrative assistant. She says she loved what she did, but there was nowhere to advance within the company. So Padilla decided to take a risk.

“I decided to open up my own business and run it after work,” she said. “I knew it would take a while to grow, but I was willing to take a chance.”

Despite the full-time job, the 32-year old Padilla went about opening the company in her spare time.

“On top of my busy career, I was also a mother of two boys, 17 and 12 years old. They kept me very busy with school, sports and life in general,” she said.

Padilla’s business consisted of selling protein shakes as meal replacements to help her clients lose weight. She also arranged workout sessions to motivate people to get in shape, while her customers received energy shots.

“I worked full-time,” Padilla said. “My customers would pick up their nutritional shakes for breakfast, lunch and dinner.”

Former employee Nicole Alcon said the business had great potential. “I believed it was going to be successful from the start because I liked the idea of trying to help people try to live a healthy lifestyle.”

Padilla says the company started well but after several months she started to lose customers.

“One of the struggles was keeping a steady cash flow, making sure I had enough product to serve to my customers,” she said. “I had to make sure I made enough money to cover all overhead costs, and any extra expenses the nutrition club incurred.”

Alcon said Padilla’s limited time ultimately affected her success. “The main thing is time management. Renee’s business needed 100 percent of her attention and at the time she wasn’t giving it,” Alcon said.

Padilla said she counted on her employees to cover the schedule, but encountered problems with them. “I started to lose customers during the day since my employees would call in sick or show up late.”

Successful businesses are hard to come by and the failure rate is high, according to Leah Martinez, a Financial Service Consultant at Bank of the West.

“Roughly 30 percent of businesses fail within the first two years, and almost half in the first five years,” Martinez said, “Successful business people need reliable employees and need a constant cash flow to cover costs.”

Looking back on her startup experience, Padilla says she can see where things went wrong but she has no regrets. “I believe I did not fail,” she said. “I tried and worked really hard, it was not the right time for me to run my business.”

Padilla believes holding people accountable is one of the biggest challenges.

“I learned a lot running a business and the most important part is depending on yourself as a business owner,” Padilla said.

Padilla’s family was always in support of her business, but being away from her family and not making enough money wasn’t worth it so she decided to end her business.

“I love being a mother,” she said. “I believe being a young mother taught me a lot of responsibility and made me strive for the best. My family is my ‘why’ in life,” Padilla said.

Padilla said she believes that although she gave everything she had to the company, timing sometimes is key.

“It was not the right time for me to run my business, and it taught me how to be a better business owner for the future. A successful person keeps moving on and pursuing their next journey.”

You can follow Philip on Twitter @PhilipChavez8[/vc_column_text][vc_tweetmeme][/vc_column][/vc_row]