Taming the 2nd-career startup

Don Conover/The Post and Courier

Donna German and her husband, Lee German, work together at Sylvan Dell, the children’s book publishing company they launched together in 2004.

Lee and Donna German had it made: A nice house in Mount Pleasant, a tidy nest egg they saved from her best-selling cookbooks and his years as a naval officer, plus his monthly military pension checks. They even spent four years on a sailboat with their three daughters before settling down to life on land.

But almost three years ago, the Germans cashed in their life savings to start Sylvan Dell Publishing, a company that specializes in illustrated children's books devoted to math and science. Today, their company is turning a profit, looking for more space and preparing to expand its product line. So why start a new business at a point when other couples are taking up golf? And what can the Germans teach the rest of us?

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1. Second-career entrepreneurs

Lee and Donna German sank everything they had into Sylvan Dell Publishing, then tapped their family for more investment cash. So why take the risk? "Passion," said Donna. They'd looked into other things, but when they matched her passion for children's books with Lee interest in running a business, things clicked. Today, each acknowledges that the business couldn't have succeeded without the other. And their relationship? "I think what Lee and I have found is that because we're both totally committed to (the business), it's actually brought us closer," Donna said.

"Failure," said Lee, "is not an option."

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2. Learn the business

Yes, the Germans did plenty of research before committing to their startup, but being an entrepreneur means adapting to a sometimes unpredictable learning curve. "You have to be participating in it for it to make sense," said Donna. Which trade shows should they attend? What software works best? How should their data be organized? Their answers to those questions have improved over time. "The more you know," Lee said, "the more you learn."

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3. Manage expectations

Conventional wisdom says a successful startup won't turn a profit until its third year, and the Germans were entering the book trade, a business with famously large up-front costs and long waits for payment. Yet both said they fully expected to turn a profit within 24 months. Would they have panicked if two years had passed with no profit in sight? Both said no, if only because of their commitment to Sylvan Dell's success. "We both knew that we were going to do whatever we have to do to make this thing work," Lee said. So perhaps they managed their expectations the simple way — by not having many.

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4. Innovation and identity

Many publishers rise or fall on their ability to pick successful books, but Lee and Donna German committed to a niche long before they put out their first title. They do math and science picture books with educational components, and they've learned how to sell them.

Along the way, they've invested heavily in technology and software and tried unusual approaches, from their use of interns to their dealings with authors and illustrators. "We could have found good (general) manuscripts," Donna said. "I have no doubt about that. Where I think we would have hit the wall on that is marketing." Defining yourself first, Lee said, makes the marketing easier.

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5. Move up

Sylvan Dell plans to celebrate its third birthday in November, and Lee expects to see a tenfold increase in revenues a year from now. After years of preparation and hard work, their company is ready to move to the next level. But that doesn't mean sitting back and raking in cash. There are plans to move someplace where they can co-locate their inventory and their offices; plans for new line of books, for plush toys to package with existing titles. But are they ready? "We're not sure," Donna said. And as Lee acknowledges, fear is a great motivator.

His advice for other prospective second-career entrepreneurs? "Don't run out of cash." Words to live by.