EACH MORNING, AS HOMES in the Dallas suburb of McKinney empty out and residents head off to work and school, the Rasmussen residence transforms from a comfortable home into the headquarters of a thriving young business. A handful of employees of the Rasmussens' company, freshbenies, arrive and share coffee and fist bumps of encouragement around the kitchen table. Then it's off to their "offices"—converted bedrooms, for the most part—for another day on the front lines of American entrepreneurship.
This is the hectic but very fulfilling world of Heidi and Reid Rasmussen, who six years ago started a company offering savings on health-related services ranging from doctor visits and medical procedures to vision and dental needs. Not long before, the Rasmussens had been on a very different path, with corporate jobs that they had envisioned would carry them to a comfortable retirement. Then everything changed.
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From Two Paychecks to Zero
First, Reid left a secure job in the insurance industry. He had tried to interest his employers in an idea for helping people better manage their health benefits. When the company declined the idea, Reid took it and struck out on his own. If his venture flopped, the Rasmussens figured, they could always rely on Heidi's salary as vice president for a major national retailer where she'd worked all her adult life. Then, two and a half years later, Heidi's job was eliminated as part of a massive layoff.
The Rasmussens had gone from two secure incomes to none at all. Heidi's first instinct was to scramble for another retail job with an established firm. But Reid offered another possibility. He was sure his company had a solid business plan, but it needed help when it came to marketing and engaging members. It lacked energy and spark. In other words, it lacked Heidi.
"Heidi is fantastic with people," he says. "And she's got this great sense of humor that makes everybody feel comfortable. But probably her greatest strengths are her organizational skills and her strategic mind. So I asked if she'd come on board."
"When you step off the cliff and say 'I'm going to become an entrepreneur,' you start wondering things, like 'Are we going to end up eating cat food?'" — Heidi Rasmussen, Co-owner, freshbenies
Facing Their Fears
While intrigued, Heidi was also scared. "When you step off the cliff and say 'I'm going to become an entrepreneur,' you start wondering things, like 'Are we going to end up eating cat food?'" Her mind filled with the sorts of concerns that would keep anyone up at night: Could they maintain their lifestyle? Could they afford to do the things they like to do? And most important to Heidi, would they be compromising their long-term future? She wondered, "What would our retirement look like if we didn't make a penny for a few years?"
To get to some answers, the Rasmussens contacted their Merrill Lynch Financial Advisor, Kathy Bickhaus, based in Flower Mound, another Dallas suburb. "When Heidi and Reid walked into my office," Bickhaus recalls, "they had a big lifetime decision in front of them. So we got to work."
The couple had always been diligent about contributing to their respective retirement plans. And they had invested in a balanced way that provided them with a solid base of income. Even in the worst case—a business that generated no income at all—Bickhaus calculated that the Rasmussens could devote two years to the project without sidetracking their retirement plans. Because of the risks they were taking as entrepreneurs, Bickhaus suggested they adjust their investments to reflect a more conservative approach. Armed with that two-year window, the Rasmussens were able to pour all their energies into the company.
Adding a Sense of Fun
They came up with the catchy new name, freshbenies, reflecting the company's innovative approach to benefits. One of the primary features of freshbenies is phone access day and night to physicians consulting on diagnoses, treatment options and prescriptions. As part of Heidi's campaign to replace dry medical terminology with more approachable language and a sense of fun, those physicians became "Your 24/7 Dr. BFF!"
Meanwhile, the chemistry between Reid and Heidi provided the spark that made the business really flourish. Says Heidi, "I get to work with my favorite person. Reid looks at things and says, 'What if we change this, this and this?' And then I say, 'Okay, here are the 19 steps it's gonna take to do that.'"
Bickhaus notes, "I think the two of them together are unstoppable." As it turns out, Heidi and Reid have never had to test their advisor's two-years-with-no-income projection. They've tripled revenue for three years running. And they've done it all together. "We're 24/7 people," Heidi says.
Amid all the challenges of growing their business, they've still been able to indulge their passions for giving to the causes that matter to them and for travel—though travel invariably means bringing their computers along for the ride. "When we say 'we're going on vacation,' that means we're working from another location," notes Reid. "I mean, if you can be in Acapulco and work, it's better than being at home."
Most days, though, you can find them at their home office, filling their employees with the same enthusiasm that fuels them. As for the retirement they were so concerned about protecting, knowing that their plans remain in place gives them solace, but they're not rushing toward that day—not when they're having so much fun.
"There'll be a future where the time is right for retirement," says Reid. "But we have a lot of life to live between now and then."
3 Questions to Ask Your Advisor
- What are some of my options for financing a start-up company?
- How long can I go without a salary so that I can get my new business off the ground?
- What are my options for saving for retirement?
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The case studies presented are hypothetical and do not reflect specific strategies we may have developed for actual clients. They are for illustrative purposes only and intended to demonstrate the capabilities of Merrill Lynch and/or Bank of America. They are not intended to serve as investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Results will vary, and no suggestion is made about how any specific solution or strategy performed in reality.