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Personal Bankruptcy – A Learning Experience
Dan Saccone knows what it’s like to swallow a bitter pill. He declared bankruptcy and lived to tell about it. Saccone started out as an entrepreneur while still in elementary school, delivering newspapers, shoveling snow and mowing lawns in Carteret, New Jersey; it seems he’s always known he wanted to run his own business. In 8th grade, he requested early admission in to Junior Achievement’s High School program. Once accepted, he soaked up as much information about starting, structuring, financing and running a business as possible. He even won an award trip to work with the Bank of Bermuda and a Dale Carnegie scholarship. From there, Saccone went to work for a local bank and worked his way up to assistant vice president, but he hated the politics that come along with entrenched corporate structure.
Saccone’s bright idea for his own business came in 1996 during a visit to his brother who lived in Austin, Texas. He’d always worked part–time in the restaurant business, working his way through host, busboy, waiter and bartending jobs with ease. He’d also worked for a pizzeria making pizzas and it occurred to him that there were plenty of corporate pizza delivery companies in Austin, but few of the type of family-run pizzerias Saccone was accustomed to in New Jersey. Where was the good pizza, the sauce that made your mouth water, and the tasty cheese that stretched when you tried to bite through it? Texans didn’t know what they were missing!
Saccone thought he smelled opportunity, so he hunted down a restaurant equipment auction and bought $32,000 worth of used equipment on his credit card. He called his parents, who had recently retired to Austin, and asked them to clear their garage in preparation for the arrival of the equipment. Next, Saccone went back to Austin, bought a house and started looking for his first restaurant location.
Saccone’s Pizza opened its doors on February 14, 1997 in the little town of Leander, Texas, just outside of Austin. Sacone’s bank experience had familiarized him with marketing and pounding the pavement for business, so he started going to radio stations, bringing free pizzas for the deejays in order to get them to promote his restaurant on air. The gambit was so successful that a pizza taste war involving radio, print media, and local food critics, ensued. Soon Saccone’s pizza became the number one rated pizza in the Austin area. Saccone knew he had created a winning combination and promised himself never to sacrifice quality to save money.
By November 1997, business was booming, so Saccone decided to open another location, signed a lease within Austin’s city limits, and again opened on February 14th, 1998. He had grand visions of opening specialty pizzerias all over the Austin area. But running two locations isn’t the same as being on the premises every single night. Saccone learned this the hard way when business at his first restaurant began to slip. Uncertain as to what was wrong, Saccone began to fall behind, with the rent, payroll taxes, and a personal loan he had used to finance the business. Suddenly it seemed, everything was falling apart and personal bankruptcy was imminent. Finally, he learned that someone was skimming profits from his first location, but it was too late to stave off the bankruptcy proceedings.
Left with his house and car, Saccone picked himself up and kept going. He still believed in his concept and realized that what he wanted was to run a company, not just a pizzeria. For the next five years, he worked from 7:00 a.m. until midnight at his restaurant, reaching for the light at the end of the tunnel. He recognized that if he wanted to open multiple restaurants, he needed to put processes into place so that he could be elsewhere and still know that the business would run correctly and profitably.
Saccone began adding structure to his business and programs for employees. He added scheduling programs and purchasing programs. He began to offer paid vacations for employees and incentive programs for managers. Eventually, he believed he had put his business into a position where he could truly support expansion, so he asked his parents for a loan to open a second location. Now with his second location doing well, Saconne is working on opening a third. Business in his current locations is growing steadily and life tastes just fine.
The Small Business Professors' Words of Wisdom
Rapid expansion and circumstances brought bankruptcy to Dan Saccone, as it does to many small business owners, but he didn’t let it ruin him. When the going got tough, he dug himself in and worked his way out of the trench. A little battle scarred, but much wiser, Dan Saccone proves the old adage that states, nothing can stop you if you want it bad enough. He sees his dreams as goals and finds himself on the road to accomplishing those goals. There’s a lesson in his story for all of us.
- Case History:Saccone’s Pizza and Subs www.saccones.com
- Entrepreneur’s Strategy: Work through personal bankruptcy and use lessons learned to put business on a solid foundation.
- Could This Work For Me? Use business failure as a personal lesson. You’ll recover and never make those mistakes again.
Where was the good pizza, the sauce that made your mouth water, and the tasty cheese that stretched when you tried to bite through it? Texans didn’t know what they were missing!