Posted in: Pop by John Carter on September 11, 2008 | 0 Comments
How pop started a business with nothing that became a world leader in its field.
It is not actually money that will make a business succeed it is more the will of the founder. All the gold in the world will not mean as much as the founder’s state of mind. An example of this is how a company was founded from nothing and became a world leader in its field.
Pop had a problem, the town was after him to install a septic system because his cesspool was running across his property, and running into the street. He didn’t have the money to fix the problem, but it had to be fixed soon. He worked in a place however that made and bagged dry concrete mix. They also made readymix concrete to service a wide area in the valley. Everyday when he was leaving work he filled his lunch box with some of the dry concrete mix. When he got home he dumped his lunch box into a wooden box on his back poarch. Once he had gathered enough of the dry concrete mixture he went out into his yard and made a wooden form for a septic tank.
He didn’t even have a cement mixer; every thing he did was done by hand the old fashioned way with a mortar tub and a hoe. Once he got the concrete mixed he started pouring it into the form for the septic tank. As he was pouring a guy came along and yelled up to him, “Hey Pop what are you doing?”
Pop yelled back down to him, “I’m making a septic tank.”
The other guy yelled back, “How much do you want for it?”
At this point the guy left his car and came up to where Pop was working. They bargained around for awhile and finally arrived at a price of $40.00 for the tank. Pop told him to come back in three days when he could strip the form off the tank. Three days later the guy was back with the biggest wrecker in town and a trailer to put the tank on. Once ot was loaded; Pop knocked the form back together for a new tank. He called the readymix company, and told them he needed two yards of concrete.
When the cement mixer truck arrived Pop started pouring a new tank. Just then another guy pulled up and yelled up to Pop, “What are you making?”
Pop yelled back, “A septic tank!”
The guy says, “How much?”
Pop yells back, “$40.00″
The guy yells back, “I’ll take it!”
Pop thought this over for a few minutes. Then he went into his kitchen and called his four sons. The company was born that night over the kitchen table. It has since grown into a world leader in making pre-cast concrete shapes. Today it is a major part of a large multi-national corporation. The company generated all of its first round financing from cash flow making and selling septic tanks. They have alway been in a cash rich position. The only time they have had to borrow any money was for expansion purposes. The company built several large plants in different parts of the country as their business grew. They became an industry leader in the precast concrete business. Their products also include specialized trucks for moving large precast parts. They even built an 18 hole golf course from their gains. One of their latest products is precast jail cells. They even sent a whole shipload of them to Puerto Rico for a new jail in San Juan.
This is an example of what one person with no money can accomplish with one good idea. His calling in his sons provided the company with a ready made workforce. It also provided the company with a ready made cash flow.
Having a cash flow is extremely important for a new company because it will show potential investors in the new business that you are serious people, and not to be taken as lightly as other startup companies. It also means that you will not have to part with as much equity because you will ot need as much capital. Being in this position also will give you an ego building rush because you can demonstrate that your new startup is already generating cash. Cash is king, it will trump everything else that investors can come up when they are picking your company apart.
A savvy investor will recognize this immediatly as the one thing that will keep him from having as much equity as he would like in the company. After all, investors are not exactly members of the boy scouts. However, it is also an appatite whetting device for investors. All investors like success. A word about investors, they should be avoided like a plague. They are like women, you can’t live with them, and you can’t live without em!
