One of the most critical decisions an entrepreneur has to make is whether to take on external funding or to bootstrap. For Joe McGinley, CEO at Iconic Offices, raising funds externally was not an option at the time of establishing the business so he made the decision to follow his gut and take on the challenge of bootstrapping. It’s no secret that this is a far more challenging approach initially, however what Joe and many other entrepreneurs have found, is that your company will reap the rewards in the long run. You will only survive if you can be profitable quickly.
We sat down with our CEO to get to know the man behind the bootstrap and to learn a little more as to where the Iconic journey all began.
When did you first realise you wanted to be an entrepreneur?
I’ve always been motivated but my first real feeling of ambition came late in my years in secondary school. After moving around a lot of schools my poor mother had to buy my way into St. Michael’s College in Ballsbridge because that was essentially the only place that would take me! Now, this sounds nice and luxurious but my mother was a school teacher and my father had passed away when I was a toddler, so we didn’t have the kind of money most people had in the school. I remember just after I started, two of the students in my year arrived into school with jeeps they had received for their 17th Birthdays. I recall clearly the day I saw one of them driving into school and thinking to myself; “when I’m older I want to be able to put my children in that position”. How sweet would it be driving yourself to school when you are 17?! I believe this is one of the first times in my life when I really thought long term about the future, the life I wanted and the importance of financial security for my then future family.
From this point onward, my ambition gradually grew as I honed my passion to become an entrepreneur and making my own way in life.
Ambition to me means –
having a desire to be successful.”
So where did you begin your entrepreneurial journey?
In my first business; I was a 33.3% shareholder in an estate agents with two other business partners. As time went by in this business, each of the partners had their own ideas of how to grow and develop the business. As a result, the three of us were pulling in different directions, and therefore the business was going nowhere fast! Unfortunately, being the youngest partner (24 years old at the time we set up) I felt my opinion wasn’t being listened to however I felt in my heart I had the answers as to how we could take the business to the next level. Following a period of ‘banging my head against a brick wall’, I left my initial investment behind and set up Bespoke Estate Agents in 2012 on my own.
It was this point in my life that I took this leap of faith and believed in myself, I knew I could be the entrepreneur that I had the potential to be. Previously, setting up with my two business partners was really just a ‘safety net move’, I didn’t have the balls to go it alone. I don’t regret the first business, it took spending that time with these partners to really bring out my own ambitions and belief in myself. Unbeknownst to myself at the time, this is where my ‘Iconic Journey’ all began.
I rang an agent about a property on Baggot Street, asking about taking one office space for my new venture, and he said no, that I’d have to take the entire building! The part I could not comprehend though, was the price he was quoting me, it did not make sense, it was too low. But it was a simple case of being at the right place at the right time. The market had bottomed out, the building filled up quickly and we expanded fast.
How did Iconic Offices develop from there?
In 2016, I realised I was really on to something. I sold the two Bespoke businesses to focus full time on Iconic Offices, a serviced offices and flexible workspace provider that was initially set up in 2013. Admittedly, there was no real business plan; it all just evolved. However I must have done something right as today we are the number one workspace provider in Dublin with workspaces spanning across 16 buildings in Dublin City and a number of exciting new projects in the pipeline for 2018 & 2019.
Why did you decide to bootstrap?
Being honest, the main reason we bootstrapped as a start up was because we had no choice! It was right in the heart of the recession and even though we never asked, we knew the banks weren’t open for business unless your Daddy was a known face about town. So, with my father no longer around, my mother being a retired school teacher and myself having two houses in negative equity, I knew they wouldn’t be rolling out the red carpet.
Do you feel it was the right decision?
Looking back on things, yes absolutely! The fact that we never took on any debt really worked in our favour, for many reasons. Firstly, we didn’t have to answer to anyone. This meant we could build the business aggressively and we could do things in our own way. The early days are critical and the last thing you’ll want is to have to answer to outside voices who are simply too concerned with protecting their investment to give you the creative freedom you need.
This also meant that we could afford to make mistakes. The lack of a lender monitoring our business meant we had the room to make mistakes which is sometimes the fastest way to success.
And finally, we became ‘Cash Flow Kings’. As funds were tight we had to focus on cash flow every day to make sure we could meet our commitments. We didn’t care what our end of year accounts looked like as we were simply focused on our finances daily. Ironically, by focusing daily, this compounded and meant our end of year accounts were taken care of. A key part of cash flow management is controlled spending – something which is naturally harder to do when you raise a large lump of money at the outset.
Why did you decide to take on investment in later years?
This decision wasn’t easy and we all as a team had mixed emotions about it. The business really thrived without having a lender and our culture of ‘sticking it to the man’ was partly born out of our having to fight and find our own way in the world, without a safety net to catch us!
However, as our projects get larger and as our ambitions for the business grow, we know completing multimillion euro projects from cash flow is naive and actually high risk. We received a €4m cushion in investment in 2017 which gave us space to plan projects properly and also the ability to build out more and more incredible spaces.
If you have an idea, bootstrap that baby! Just take action today by burning your bridges and going all in on your dreams. Once you have proven the model, then look to take on debt in order to ramp it up.