OUT OF WORK? START A COMPANY
By Alix Nyberg

Ever fantasize about ditching the corporate establishment to start your own business? Not surprisingly, given high CFO turnover and a tough job market these days, you'd be in good company. In fact, a down economy can be the perfect time to test one's entrepreneurial mettle, says Stephen Spinelli, director of Babson College's Arthur M. Blank Center for Entrepreneurship in the US. "The worst case might be that you deepen your network" in pitching the idea. "And if nothing happens, you go back to the job search."

Sales Thrill

Of course, the ability to quantify the costs and benefits of a business opportunity gives entrepreneurial CFOs advantages over those who get going merely on hopes and dreams. But some former finance chiefs say their own start-ups offer a welcome chance to round out other skills, since traditional bailiwicks like investor relations and mergers and acquisitions may be irrelevant in a shoestring operation's early stages.

Strategy and product design were the main concerns in the first stages of his venture, says Sanjay Muralidhar, who launched Mcube Investment Technologies, a US-based investment management software business last year, after holding major finance posts at Reader's Digest and iVillage. The next tasks were recruitment and "building team spirit," adds Muralidhar, 40, now CEO of the company. With several large financial institutions evaluating the company's software, his job is "all about sales and marketing," a field that he loves. Finance skills are handy for budgeting and structuring equity stakes for partners. But "the highs from a good sales meeting" far exceed those from "anything you might do in finance."

Even new ventures rooted in finance offer the chance to develop non-finance skills. Sar Ramadan, a three-time public company CFO, started his own international merger advisory firm, Ramar International, in September 2002. "I wanted to do something that used my international experience and my deal-making skills - all the stuff I've been doing for other people throughout my career," he says. "As a CFO, though, your function is limited to certain aspects of the business, and it's always in an advisory role."

No More Unemployment?

While being your own boss allows many freedoms, picking the right business to start can be just as tricky as choosing the right new employer. The best results come from tapping into an unmet demand within a familiar industry, says Spinelli. Without expertise or industry contacts, there is "less likelihood of success."

That's a lesson Muralidhar learned the hard way before undertaking Mcube. Initially, he made a stab at his dream business: a service that let sports fans trade options on playoff tickets. The idea failed - partly because of complications involving differing state gambling laws - but also because Muralidhar lacked industry contacts and expertise. "I was an unknown quantity to the sports teams, and probably didn't do a good job of convincing them that I could pull it off," he explains.

Mcube has been an easier sell largely due to Muralidhar's decision to start the venture with his brother Arun, an asset-management expert who has written books on the topic. "His personal contacts have been a big part of getting appointments with potential customers," the former finance executive says. "And if we sign up a good part of his Rolodex, that will give us enough revenues to grow for a couple of years."

So is starting a venture the right move for you? Spinelli, who advises 50 to 100 would-be entrepreneurs a year, says a first test might be to ask how much you worry about money. "If you find you can't get your mind away from the resource requirements, even before you start the opportunity, it might be a sign that it's not right for you," he says. "The entrepreneurial mind is one that focuses first on opportunity."

Then, vet your idea with as many experts as possible. "That helps build the opportunity," says Spinelli, and while people may not immediately cotton to a new idea, "if you bring it to a half-dozen industry experts who you're trying to recruit and they all say, 'no thank you', that might tell you something." Finally, be ready to pull the plug after a year if you're not hitting the milestones you've set. "The closer to a year you get, the closer to a job you should be," Spinelli says.