Gen-Z Co-founders’ Journey to a Six-Figure Business in Year One

Edward: My name is Edward,  co-owner of Tea Mates. I’m also currently an army finance officer in the US Army Reserves and also a commercial real estate broker. So we got a lot of side hustles going on.

Financial freedom and making money is a big factor in my life. If you’re financially free, you have more freedom to do the things you want or if you don’t know yet, to go figure out what you want to do. It buys you that time which is very valuable.

Especially since I’m only 26, now is the time to take the risk, no wife or kids to worry about and to have to stabilize. That’s why I’m just going all out in the business and doing everything that I can.

Chris:  My name is Christopher Phongsa. I am a software engineer. I wanted to search through different routes because of how my mother had raised me.

I was raised by a single mother in the Bay Area. She’s always drilling me since I was a kid, “You got to have your own business, you gotta make it on your own, you can’t work for anyone, you work for someone, you’re always gonna work for them forever, you work for yourself, you’re only ever gonna be working for yourself.”

Thankfully I met Edward and he was pretty much my top choice for starting a business.

I need someone who I can trust to go into business with, and he’s a good friend of mine and I know he has a good head on his shoulders, and so we decided to dive in and see what we can do with what we have.

Edward: Even though working a 9-5 is great, there are so many hours left in the day that could be used to generate extra revenue that could set you financially free. I was looking for a partner to do that with because I myself thought it was too challenging.

I reached out to Chris because I know he wants to pursue something. I was doing some research into dropshipping that time and I thought Chris would be a great business partner because he’s very straightforward, task-oriented, and he’s a software engineer, so he’s very smart on the technical side which would be helpful in designing a website or how to do search engine optimization for keyword searches.

And then my strengths I can offer is that I speak a little bit of Mandarin, which will be helpful in negotiating with suppliers on Alibaba in China, maybe get a better rate as someone who speaks Mandarin versus someone who they know is a foreigner and only speaks English. I guess on the client-facing side or non-technical qualitative side, that’s where I can help out.

Edward: I reached out to Chris and asked him if he wants to do this and we’ll go 50/50. We knew it was going to be pretty difficult so we set an operating agreement outlining all of the rules and how we’re going to do things, just for legality purposes. We want to make sure that there’s a good baseline established.

We both would work on our 9-5 then we would meet after for 2 to 3 hours every night for twice or thrice a week to discuss and plan things, set the agenda, business meetings, etc.

Chris: We had many meetings to set the precedence on how we were going to approach our operations. We made a whole task sheet of different things we needed done for our business and assigned it. For example, someone needs to research manufacturers on Alibaba and the other would reach out to shipping companies to inquire for rates.

We would hold each other accountable through two meetings a week depending on how urgent the next task was. We have daily check ups or weekly check ups to see where we are at. It was the easiest way for us to see how well we would work together.

We wanted to start something even though we have to do some analysis and figure out a product. With e-commerce, it needs to be small enough not to weigh too much so we can ship large quantities. It needs to be something that you cannot easily find in Walmart or Target at this price. It should be something unique and hard to put a value to.

We know we need to put in the research, but we also didn’t want to be stuck in analysis paralysis. So we just went in and did it. 

We applied for LLC and finalized in July of 2023. After many months of working and researching on how to develop our product and looking at different manufacturers, we finally launched in December 2023, and have been going steady since then.

We created an e-commerce business, called Tea Mates. They’re these cute kind of figurines that sit on the edge of a tea cup and hold the tea bag. We designed them ourselves, had them manufactured overseas in China, and freighted here. It was just a cool concept.

Chris: Time commitment is a challenge. There will be weeks when we have external events in our own lives that we have to attend to. That means we have to shift more load to the other person, going back and forth, juggling the business and our personal lives.

It is important that we have an understanding where we are both in our lives as well as the time commitment we can give to our business. We have to figure out how we can balance it out for each other without having it become personal.

It was purely constant communication to ensure everything went out smoothly.

Edward: Starting your business without really knowing or having a mentor and just doing it on your own and learning was part of the experience. That’s part of why we did it, but man it is definitely challenging.

During the process, We were really motivated, we faced challenges but we kept moving and moving, adjusting fire, and overcoming the obstacles. It was definitely difficult.

Edward: We have a bunch of friends who are entrepreneurs as well and who started their own business. One of our friends is a patent lawyer whom we get some legal advice from. It’s about leveraging our connections.

Chris: That, and a lot of Google. There’s a lot of self-learning we had to do eventually. We read tons of articles about starting an LLC, operating agreement, creating a contract, how to have legal security of yourself, etc.

We do have a relatively solid network of individuals, friends, and family that we can turn to if we have questions. So even though we didn’t have a mentor, we still had help whenever we needed some advice.

Chris: We should’ve started documenting our finances as soon as we opened. We don’t have a CPA, and so for tax season, we went through all of our documents and did it ourselves. It was stressful but doable, but definitely something you want to consider doing as soon as you start.

Have all your paperwork recorded from the moment you begin your business so by the time it comes to do your taxes or you just need some documents pulled up, you have everything organized. Organization is really important for this crazy process of starting a business.

Edward: Creating the business and creating the product is the fun part. One thing I wished we had accounted for was how important marketing is. You can have a great product but if you don’t have a great marketing plan and because it’s just me and Chris, who both work full-time jobs, it’s very difficult to create content.

There’s a lot of time needed in planning content ideas. You need to be consistent, you have to film, you have to edit,  you have to post on a specific schedule, you have to keep up with trends, and it’s not something we took into account when we were starting out

So if we were a little bit more tactful in that and planned that, I think we would have been even more successful than we are now.

Don’t co-mingle your funds. Keep business-related expenses separate from personal accounts. We will be using QuickBooks to expedite the process for tax filing purposes.

For e-commerce, we are using Shopify from the start. It’s really simple and has great integration to all social media platforms, they have email and marketing campaigns, automation, and even plug-ins for different services.

We are also on Etsy, which is our main driver of sales, as our products are great for gifting and cater to a niche market.

We are going to put in Amazon, but there are huge cuts and fees, which would significantly affect our margins, and we would need to mark up. Aside from that, Amazon also has its own SKU’s and barcodes which adds complexity to the operations. But once we have successfully worked on re-strategizing our marketing, we can expand again.

We are still in an experimental phase, so we've reached out to a couple of influencers that would help us market our products on Instagram. We’ve been mainly doing organic, in terms of posting video content on Instagram and TikTok. We also have paid ads on Etsy.

Edward: Just do it. A lot of people are on the edge, should I start it, should I do it, I need to plan. Obviously, yes it’s important to plan, plan as much as you can, but if you feel it’s gonna hinder you from starting, just start it. 

“The things that you learn in this small business that may or may not fail or may be very successful will be valuable for all of your future endeavors in business.” - Edward

Next thing you know, you start your large-scale business, you know how to run it from start to finish. You learn those small mistakes early versus waiting for something big and you never did it before. That’s my two cents.

Chris: It’s okay to fail. Starting a business is scary because no one wants to fail. Especially in your 20s, this is the best time to do it when your consequences will be at its lowest for the cost that it would take you to do something. We have all the time to do it now that we’re in our 20s.

“Go do it and don’t be afraid to fail. Because the only way you learn and become successful is through your failures.” - Chris

Starting a business is scary. I wake up every day and I'm like, man am I doing the right thing? I don't know but I'm going to keep going forward because that's at least the best I could do for myself right now and hopefully at the end of that tunnel I'll see that light.