Sam Palmer knew the end was near. His employer, a solar-panel manufacturer, was foundering, leading the applications engineer to decide that “the time was coming for me to step out on my own.”
A devoted tinkerer, Palmer had been experimenting with felt he made out of recycled fleece and molded into sleeves for tech gadgets. Convinced that these eco-friendly covers could sell, he raised startup capital by refinancing his home and applying for a home-equity loan.
So when the solar firm (which was indeed on its way to Chapter 7) laid him off in late 2010, Palmer was ready. “It was a kick in the pants to get going,” he says.
Palmer took his prototypes to a previous employer, clothing giant Patagonia. Executives there connected him with their coat-recycling initiative, which began supplying him with fleece. With raw materials in hand, Palmer found a manufacturer to press and form the fleece and ship orders to a fulfillment center.
After paying the factory a one-time fee of $13,000, he is now charged based on the number of cases made (that came to $60,000 for 10,000 units in 2012).
Palmer began selling his $25 to $32 cases in late 2011, first for Kindle and later for iPad, under the name ReFleece. They’re available at U.S. Patagonia stores, Amazon.com, and his own website.
Getting ReFleece going put Palmer, his wife, Jennifer Feller, and their two children in a challenging spot, prompting them to borrow from his parents and tap their savings. But the engineer expects to hit $150,000 in sales in 2013, which, after covering materials, office space, and manufacturing, should put the company $80,000 or so in the black, letting the couple take a salary for the first time.
While it’s just the first step to stability, says Palmer, he’s committed to his idea: “It’s gratifying to bring it to life.”
HOW HE DID IT
Startup funds: $150,000
Using a home-equity loan and a cash-out refinancing, Palmer has already invested $100,000 in manufacturing and raw materials. He plans to use the remaining $50,000 to add new product lines, including cases for the iPhone and iPad mini.
When Palmer expects to match his old $100,000 salary: 2014
He hopes to be up from four to 10 products by then and to start selling internationally. Revenue should hit $300,000. “I’m enjoying feeling the connection between what I do and what my rewards will be,” he says.
How much longer the family’s savings will last: 6 months
Palmer and his wife, Jennifer, who started working full-time for ReFleece in spring 2011, began with $80,000 in savings and a $20,000 loan from his parents. Palmer is negotiating with his mom and dad for an extra $30,000 to cover expenses until the firm turns a profit in 2013.