A Bootstrapping Entrepreneur Bets the Family Home

Colleen DeBaise By Colleen DeBaise

Adriana Rodriguez, an Austin mom of two, needed more cash flow after she launched a bilingual school.

It’s not at all uncommon for entrepreneurs to tap into their home equity to finance a business idea. A few years ago, Adriana Rodriguez of Austin, Texas, took an even more dramatic step: She sold her house to support her education startup, and moved her family into a small rental.

The decision wasn’t an easy one for Rodriguez, who was born in Mexico and came to the United States as a young woman with limited English skills in the late 1990s. She had taken pride in the fact that she and her American-born husband, who worked for UPS, owned a nice suburban home in nearby Round Rock.

And moving meant that she would have to uproot her two small children, then 6 and 9, who loved the home’s game room and attended a local private school.

“It was definitely a huge sacrifice,” Rodriguez says.

But after seven years of working as a Spanish teacher at Lycée Français d’Austin (now the Austin International School), Rodriguez had just opened her own bilingual day care, Jardín de Niños Interlingua International School. Her father, who works for Mexico’s department of education, had provided some financial assistance to get the school up and running. But startup costs were higher than expected — about $100,000 in all — and after cobbling together funds, Rodriguez had few places to turn. Banks were unwilling to gamble on her unproven startup, and as an immigrant, she found obtaining credit elsewhere difficult.

“When you open a business you need to have some cash flow, which I didn’t have,” Rodriguez says. “So the way you are living has to change.”

The family sold its four-bedroom house, which at that time — this was early 2008 — was valued at about $200,000. Rodriguez used the proceeds to pay off some debts, and they moved into a two-bedroom rental across the street from her new school, on Austin’s West side. “It had a balcony, and I could see the school from the apartment,” she says.

Most important, the family’s monthly costs were slashed in half, to $1,000 from $2,000. The children — a boy and a girl — shared a bedroom, enrolled in public school, and got used to life without a backyard.

“They weren’t very happy, but they were little so they could manage,” Rodriguez says. The move also reinforced the notion that the school, quite literally, was a family business. “It was to teach them a lesson,” she says. “To open a business, you have to do many sacrifices.”

By this point, the children were already familiar with Rodriguez’s commitment to entrepreneurship. A year earlier, she had taken night classes at the Greater Austin Hispanic Chamber of Commerce on the fundamentals of running a business, from writing a business plan to managing finances to conducting market research. The class met three nights a week, from 6 p.m. to 10 p.m., and because her husband worked at night, Rodriguez brought the children with her. “They would come with their pajamas and their homework,” she says. “They could play while I was doing the class.”

“To open a business, you have to do many sacrifices.”– Adriana Rodriguez

For Rodriguez, the sacrifice has paid off: Within a month of starting her school in 2007 with 10 students, she had a waiting list of 25. “The first 10 days, I was like, ‘I hope I can make this work, because I really have to pay rent and the teachers,” she says. By the end of the first year, she had paid her father back.

By 2009, she had expanded to a second location, and her husband had quit his day job to help out. She now has a third location, and is considering a fourth with partners in Houston. She has a total of 270 students and employs 43 teachers, with annual revenue at each location hovering at about $800,000.

Along the way, Rodriguez says, she has learned some important business lessons, particularly when it comes to hiring teachers. “Sometimes you think it’s the right person and it’s not,” she says. “Then things will twist around.” She spends “more time than I ever imagined” on teacher observations and now interviews candidates multiple times to make sure they are a good long-term fit.

Rodriguez, who has a master’s in education from the National Pedagogic University in Mexico City, now offers elementary-school education for ages three to 12, and has added French and Mandarin lessons. Children have a “beautiful and amazing plasticity” to learn other languages, she says.

Last year, the family was finally able to buy a house. Leo, 15, and Jasmine, 12, have their own rooms again. “We bought an old house in a very nice neighborhood so they could go to a good district,” Rodriguez says, and then they renovated it extensively.

Rodriguez now hopes her children will one day run her school. “When you build things for your family,” she says, “you see the future.”

Posted: December 10, 2013

Colleen DeBaiseA Bootstrapping Entrepreneur Bets the Family Home