The beginning stages of a company are often fraught with plenty of uncertainty and tension. What taxes might you be eligible to pay? How long will it be before you’re profitable? How do you get enough capital to really get your name out there? One of the biggest questions many people ask is, “Where will I run my business?” A basement, it turns out, might be a great option. Take a look at all of these companies that got their start in a basement, then keep reading to learn about some of the more surprising ones.
You may not have thought that a candle company could start in a basement, but in the 1960s, that’s exactly what Michael Kittredge II did. In fact, Michael Kittredge II may have been the impetus for scented candles becoming as popular and well-loved as they are now; scented candles were much more of a novelty before he decided to put the maximum amount of fragrance in the candles he was creating in his parents’ basement. In 2013, Yankee Candle sold for $1.75 billion, showing that the company is still going strong.
Martha Stewart Living
You’ve almost certainly heard of Martha Stewart before; she’s a household name, whether you know her from her cooking, her home décor lines, or even her widely publicized problems with the law. This household notoriety has led to her becoming a billionaire twice, with her personal fortune currently estimated to be around $628 million. This multi-millionaire company started in 1976 when she started a small catering company in her Connecticut basement, and in 2019, it was worth around $175 million.
Whether you’ve heard of this brand or not, you’ve probably at least seen it before. FUBU is a streetwear label that Daymond John, Shark Tank star, launched from his mother’s basement in Queens. His company started with only $40 in capital, and he was using his mother’s sewing machine to work. The key to success was the fact that he pitched local hip-hop artists directly. They started wearing his clothes in music videos, and he captured the young music scene in the area. Today, FUBU sports a $6 billion valuation.
If you run a small business, chances are you can’t imagine doing so without being able to invoice your customers online. However, things weren’t always like this. In 2004, when Mike McDerment founded FreshBooks, he was working out of his parents’ basement, and he maintained only 10 customers for the first two years. Of course, eventually the concept of FreshBooks took off as more people started realizing its benefits. Today, FreshBooks has over five million customers, and it has a valuation between $172 to $258 million.
Food is definitely not something you often think of as being a product you can make and sell from your basement. However, that clearly didn’t dissuade Peter Rahal and Jared Smith, who founded RXbar from Rahal’s parents’ basement in Chicago. They kept their inventory in Tupperware containers and created their own labels in PowerPoint, then sold bars to CrossFit franchises to ensure they had a low overhead and little competition. This made their business boom like no other, and in 2017, Kellogg’s bought RXbar for a staggering $600 million.
A basement was good enough for all these companies, and it could be more than good enough for you as well. Whether you’re interested in creating a business or you just want to have the option available if it comes up in the future, you may want to make sure your basement is well-functioning so you can start the next million-dollar company in your own basement.