How We Financed Float On – DSP 291

Graham and Ashkahn are asked about how they financed Float On.

As the guys explain how they started, they go along slight detours to talk about all the mistakes they made along the way and how they’re unsure that Float On could even start today like it did back in 2010. They then go on to explain the pros and cons of the extreme bootstrapping they did to make Float On happen.

Float Center Business Plan

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Transcription of this episode… (in case you prefer reading)

Ashkahn: Okay.

Graham: All right, welcome.

Ashkahn: Yep, how’s it going?

Graham: Just a totally normal episode of the Daily Solutions podcast over here.

Ashkahn: Just another day here in the studio.

Graham: I am Graham.

Ashkahn: I am Ashkahn.

Graham: Today’s question is, “how did you finance everything initially?”

Ashkahn: Me?

Graham: Us.

Ashkahn: Oh.

Graham: A collective you.

Ashkahn: I see.

Graham: It doesn’t say that. I’m just assuming.

Ashkahn: It makes more sense as a question.

Graham: Yeah. Yeah. Really, I think they meant float on right? Yeah.

Ashkahn: Okay, okay. This is all starting to make more sense.

Graham: Yeah, yeah. It was pretty much it was just bubblegum, Band-aids and shoestring for the most part, yeah. Yeah, it was pretty-

Ashkahn: I guess we don’t even really tell this story as much anymore because it’s-

Graham: Embarrassing.

Ashkahn: Embarrassing and it’s just so different than what we recommend.

Graham: Yeah, do as we say and not as we did. Well, we funded it ourselves. We didn’t take out a loan. We didn’t find investors. We had a, way too little money that we’d saved up.

Ashkahn: Ours is a story of super bootstrapping.

Graham: Not super as in the sense of, we did a great job. More like super in the sense of we really-

Ashkahn: No. We really bootstrapped hard.

Graham: We didn’t spend a bunch of money.

Ashkahn: We bootstrapped and our boots weren’t very great.

Graham: And our straps basically didn’t even exist.

Ashkahn: Yeah.

Graham: It’s like boot moccasin, moccasin, moccasin strap.

Ashkahn: Moccasin lacing. It was rough anyway.

Graham: We shouldn’t have, right?

Ashkahn: It was really fueled by ignorance.

Graham: We didn’t know what we were doing. We were young and foolish. We did everything wrong and it cost us way more money and time and heartache in the long run as a result of doing this, but yes. How we did it was, we didn’t take money from anyone. We invested our own savings and we just put in a ton of sweat equity.

Ashkahn: An insane amount.

Graham: To the point where anywhere, where we were just allowed to do our own construction, we were doing it starting up. We didn’t hire any graphic designers to do our graphic design. For laying pipes under our concrete, we were the ones cutting up the concrete. We were digging the trenches, then the plumber would come in, actually attach all the pipes and lay them down, and then we’d fill in the trenches with dirt and we’d lay the concrete on top of it, just to make sure that we’re not spending unnecessary money on plumbing labor.

Ashkahn: At like three in the morning. We’d be going in, in the middle of the night, to not, so the crew could keep working as fast as possible and hauling out big chunks of rocks and concrete. It was nuts. It was a very, It was a very tired period of my life.

Graham: The mornings started with me cruising over to Ashkahn’s house and calling to let him know that I’d showed up. I didn’t realize at the time that Ashkahn is just made of sleep, which maybe you didn’t realize until this story. It turns out when I’d call him is when he would wake up and just really quickly throw on clothes and stumble out to the car and we’d start going. This would be like six hours after I dropped him off at the end of the night to go get some rest.

Ashkahn: At best, yeah.

Graham: Yeah. We were really tired. We were crazy. We didn’t know what we were doing and we were just fueled by optimism, caffeine and passion.

Ashkahn: And luck, there was definitely a healthy dose of luck.

Graham: It definitely shouldn’t have succeeded, to tell the truth.

Ashkahn: It really should have crashed and burned is what everything-

Graham: We should have lost all the little money we did invest.

Ashkahn: We got really lucky with float tanks. We partnered up with someone who in town who had a float tank up and running and another one in storage. And we just got good timing with another float center in Oregon that-

Graham: Had shut down.

Ashkahn: Yeah.

Graham: This great guy Keith who was down just at the southern part of Oregon and Ashland. He pretty much just gave us his tanks for a tiny down payment that we forced him to take so the tanks felt like ours, and a couple hundred dollars a month, which again, back then, there was like no place to float, so he’s probably at a loss. He told us he was either going to throw them into storage or let us use them and was a cool enough guy. He’s like, “Look, I’m not in a rush to get paid. I’d rather see the float tanks in use than sitting in storage,” so pretty much gave them to us on a prolonged really small lease until we could pay them off.

Ashkahn: Yeah, we had four float tanks for a petty amount of money, like a couple thousand dollars in cash and all of a sudden we had four float tanks at our disposal. That’s pretty much just dumb luck.

Graham: Totally dumb luck, yeah.

Ashkahn: Then the rest of it was really, we just cut a lot of corners and all of them came back to screw us over later. We did all of this initial construction and we did it all on a dime and we tried to save money everywhere we could and none of it lasted longer than two years.

Graham: Yeah.

Ashkahn: Maybe, some of it lasted well less than that.

Graham: Oh yeah, like two months in we realized we’d made. Pretty much one weekend we realized; oh, “we shouldn’t have painted our floors”, right?

Ashkahn: We also, we started, we opened our float center at like, pretty much at an inappropriate stage to open a business. We had no seating. Our lobby was almost entirely barren. We had really just the cheapest water cooler. Anything, anything that was in there was-

Graham: The cheapest version that was the most un-aesthetically appealing.

Ashkahn: We had nowhere to put towels. It was to the point where had we not been the only float center in town, I think we would have just been laughed out of this city before anyone even was consider coming and floating with us.

Graham: Oh, if we were to try to open the initial Float On that we opened back in the day right now, there’s so many better float centers in town. No one would come to our janky, cheap float center that we set up. At some point we were going around the space to try and find out what of our original construction remained, and what we found was, a length of wall that was about two feet wide, and that’s it. Of all the flooring and every wall that we constructed in our entire space, nothing remained.

Ashkahn: The showers, yeah.

Graham: We’d torn out everything at least once, some of it, including floors, two or three times per room, and yeah. There’s a little two foot stretch of wall from our original bootstrap construction that was still in there and managed to survive. We’re probably going to kick ourselves in another year for letting that stay there. It’s probably just going to come back to haunt us again.

Ashkahn: Our whole float center’s going to collapse because of that one chunk of wall.

Graham: Darn you!

Ashkahn: Maybe we should say some positive things, because I feel like to our credit, I mean, this is the whole benefit of bootstrapping, is it just forces you to sink or swim.

Graham: Yep.

Ashkahn: You don’t have a cushion to have your bad ideas keep going and you have no idea that you’re doing a terrible job running a business. We had to real fast figure out how to run a successful float center, and get people coming in and get them floating, and get them having good floats, and having them come back and continue to pay us. We had no runway. If we weren’t profitable within the first month, we were going to go bankrupt and close our doors. That was it. In fact, I remember we ordered all of our salt to fill our four of our tanks and we got a net 30, so we had to pay 30 days after we got the salt.

Graham: Yeah. Yeah. Yeah.

Ashkahn: It was on day 29 of that net 30 that we got a big check from running a Groupon when we first opened that was like we had just enough money to cover this big salt big that was coming the day later and that was it. We were just like, “Here. Take this check. Give it here and we didn’t have to declare bankruptcy.” Great, we can live another day.

Graham: Yeah, it was totally insane, so here’s my positive take-away.

Ashkahn: Okay.

Graham: Which is, we did all this stupid stuff and then we decided to share it. Now you get things like this podcast where we tell you in depth about all the idiotic things that we did when we first started up because we didn’t know better. You can learn from our stupid mistakes and not repeat them.

Ashkahn: Yeah.

Graham: One of those is; you just can’t cut that many corners. It is a very demanding business opening a float tank center. You’re trying to get to absolute zero. Salt is incredibly damaging and destructive and soundproofing is incredibly meticulous and costly. To think that, again, if we hadn’t been so naïve and we actually knew what it took to open a float center, we wouldn’t have had the money to do it without taking out a loan or investments.

Ashkahn: No, definitely not, not even close.

Graham: Looping back to the initial question of how did we finance everything, probably wrong, to be honest. It worked out for us. It was great to not be beholden to a bank or to investors, but man, those first three to four years when we were replacing everything we had built time and time again, and our bank account just kept getting hit. We were delaying self payments and just going for months without taking a check. Those were tough learning experiences as a result of this. Yeah.

Ashkahn: And working crazy hours. We were working insane hours for years and years. We still kind of work insane hours, but our version of insane. We paid for it in sleepless nights and sweat and hard work for sure.

Graham: Okay, I have one more positive thing.

Ashkahn: I’ve got some more positive stuff.

Graham: Okay, yeah, go for yours. I just did the most recent one. What’s another positive from you?

Ashkahn: My other one is that we’re not beholden to anybody. We have a lot of crazy ideas with how we want to run a business and we get to do those crazy ideas. We don’t have anyone that’s like, “No, that’s not how you are supposed to hire managers.” We get to do whatever we want and that is because we don’t have to answer to anybody because we didn’t take money from anybody.

Graham: Yeah, and on the contrary, we don’t have people telling us things we really should be doing. It’s kind of like we’re like six year olds without an adult, which sounds great from the perspective of a six year old, but from the outside world, it’s like, “Should that six year old really be eating marshmallows for every meal of the day?”

Ashkahn: Everyday, everyday, that’s what I’m saying. It’s been great.

Graham: Yeah, yeah it’s true. It has been great. Again, I just sometimes feel like we shouldn’t have been allowed to do everything that we wanted. Shoot, now I forgot what the other positive thing that I was going to say was. Oh, here okay, I do remember. I do remember what it was. The other positive thing I was going to say is; as a result of things being so hard, and even when you have money, construction is not easy. When we’re talking about all these sleepless nights, things going wrong, some fraction of that, let’s just say that we were at, on a scale of 1 to 100, we were at like 99 of things that you can do wrong and most centers are at like a 20 of things that eventually go wrong or something like that. The feeling of comradery I think that comes out of that is not to be overlooked. I truly believe that part of the reason-

Ashkahn: It’s like we had gone through a war together.

Graham: Yeah, part of the reason our industry is so magical is because we feel like brothers and sisters in arms. It’s almost like we’ve been in the trenches together, the salt trenches, we made it through. There’s this feeling of comradery that comes with the difficulty of setting up. If we were just in the easiest business to set up in the world, I don’t think that we’d feel this same sense of community and the bond that we have between float tank center owners. I think that’s something cool that comes out of being a freaking hard business.

Ashkahn: I guess I also, for us specifically, I think it’s also worth noting we were in a specific place in our lives where this made sense. You know what I mean? Being so risky and on the verge of collapse at any point was easy for us because worst case scenario, the business shuts down and we’re eating ramen for dinner.

Graham: None of the founders were married. None of the founders had children.

Ashkahn: Yeah, and that’s where we started there. We started by sitting around eating ramen. We had really nothing to begin with, so we had nothing to lose. It made the whole thing so much easier. All the risks of us going into this without any money or any safety net or any of that, it just didn’t matter as much for us because there was not enough infrastructure in our lives to begin with to feel like we were putting much on the line.

Graham: We really love doing crazy things, so this was right up our alley in every sense. Yeah, that’s kind of, if you haven’t heard it before, that’s how we got started was yeah. We funded things when we shouldn’t have ourselves. We got everything wrong and we somehow just lucked out and not only survived, but managed to thrive in spite of it. Honestly you do have those early days to thank for Float Tank Solutions overall and for this podcast even. I don’t think that if we hadn’t gone through so many trying times that we would have been as motivated to share that information and help stop people from suffering like we did.

Ashkahn: Yeah definitely.

Graham: Thanks to the tough times. Hats off to all the hard times.

Ashkahn: Okay.

Graham: All right.

Ashkahn: Well, you guys have a-

Graham: Should we get real with them now?

Ashkahn: We’re secretly millionaires. This is nothing to us. If you guys have questions, you can go to FloatTankSolutions.com/podcast and we have answers.

Graham: Tons of them.

Ashkahn: Yeah.

Graham: We actually have a bunch of things prerecorded just waiting for you to send in the right question.

Ashkahn: That’s right, just a soundboard of different answers that we’ll string together for you.

Graham: There you go. The gauntlet has been thrown down. See what you can do.

Ashkahn: Goodbye for tonight.

Graham: Is that a-?

Ashkahn: It’s a bad soundboard. We didn’t do a very good job with it.

Graham: All right, but, bye everyone.

Ashkahn: Bye.

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