How Sam and Kacie Malouf founded Malouf Companies[TM]: And made home bedding better for everyone.

• Author: Malouf, Sam

THE YEAR WAS 2003. I was getting a master's in accounting at Utah State University, and my wife Kacie was working at a popular buffet restaurant. We were very recently married and very much still figuring out what we wanted to do with our careers, though it was pretty clear to Kacie that she did not want a long-term job at the restaurant.

When we moved in together as newlyweds, we needed to upgrade our sleeping arrangement. (Kacie was appalled to find I still slept on sheets I bought at a garage sale in Mexico. I maintain that I got a great deal on them.) We went to a Downeast tent sale and found a double-pillow-fop, king-size Stearns & Foster mattress (with only minor damage!) for $75.

We bought the mattress immediately, even though everyone warned us that sheets for a king would be absurdly expensive. Of course, when we started shopping for sheefs, we were shocked to discover how right the warnings had been. The available bedding was unattractively packaged and poorly marketed. Kacie's business brain started to spin, and she said, "I bet we can do it better."

So we did.

JUST THE TWO OF US

Kacie and I learned how to run our business by jumping straight into work. We started very small to test the waters but found that Kacie's instincts had been right--there was a gap in the market for better sheets. The rush we got from selling one set kept us going because even small achievements felt like huge accomplishments. Our financial goal back then was simple but strict: make $1,500 a month if we wanted to survive.

Even as bankruptcy loomed over our shoulders, it was exciting to create a tangible business. We "warehoused" sheets in our two-bedroom apartment, and I hand-delivered them in a small truck to some of our first accounts. Soon, we had to move out of the bigger bedroom in our apartment to make room for more product. Our king bed barely fit in the smaller room, and we had to sort of leap in from the bottom because there wasn't enough room to walk around the sides.

Some of the lessons we learned in the early days stuck with us, like how to remove self-consciousness from creativity. Sometimes as entrepreneurs, you have to let go of your pride and hold on to whatever money you can. For years, until it was made illegal, we got all our boxes to ship product from the liquor store. We were able to save hundreds of dollars, the product always fit inside perfectly, and we made some great friends with the store staff. Plus, our customers enjoyed getting their luxury sheets in fancy wine boxes.

Another way we got super creative was in how we found funding. It was...