The presentation features an Entrepreneur, Bob, who started a business in producing parts for customers in the aviation. He traced his success to the 2008 financial crisis when he decided to quit his job and start the business. He had a nasty fall out with his employer when he opted to do this but proceeded anyway. He admits that he has a passion for modeling and building new things. The speaker took advantage of his honesty and the relationship with a customer who had made a $5000 purchase order from his then employer. With the leap of faith, he started his company in 2009 where it converted to $250k the following year and $2M later one. As an entrepreneur, he advises that we should grab opportunities whether small or big as long as we are aware of what the market expects and we have the desire to bridge the gap.
With the sacrifices that he made, he was able to win more customers, which resulted in hiring new people and expanding his working space in 2010/11. He was able to land into business partnerships with worthy companies that paid well for his craft. The speaker emphasizes the importance of building good relationships with vendors, employees, financial institutions, and insurance providers. You will need them someday somehow. Despite his lack of experience or college education in handling the business aspect of his craft, he admits that his passion for dedication and commitment to quality played a role in his growth and expansion. As the company grew in 2010/11, he hired more people and mastered the art of delegating responsibilities. 2012 was a good year for him as he hired a shop supervisor who was responsible for the major operations as he focused on the production and expansion. He also introduced and trained his son into the business despite his early 20s age.
The speaker was remorseful as he described how he had to fire his first employees. As a business owner, he admits that occasionally, we have to let some people go if their mistakes versus their contributions are costly or negative. One of the hiring strategies adopted included shopping for unhappy employees in other companies and giving them better offers. The company grew tremendously in sales in 2012 as $370k, 2013 at 420k, and 2014 as 1,176k. He attributes the success to hiring the right people and treating customers well. Although some people thought he was going too fast, he did not give up expanding his business as he bought new equipment in 2012/13.
The speaker appreciates the benefit of evaluating risks in any business as it helps in the formulation of strategies to alleviate the before the effects harm performance. His relationship with industry mentors, insurance companies, and banks proved to be helpful during tough times. However, he mentions that startups suffer a lot because they do not have a previous history to back up their credit rating. For instance, he had to approach over nine banks before he could secure a loan to finance his expansion. Overall, you need everyone to grow irrespective of the industry.
With the growth and sales over $1M in 2014/15, the speaker had to expand his production space and hire more people. However, this was challenging. As assets, he emphasizes the need for treating people and paying them well. In 2015, the company received an ISO certificate and Aerospace certification to show that they were offering quality products in the aviation industry. As a result, he won new customers, and the sales were in tens of millions. With the efficiency arising from hiring more and right people, customer satisfaction proved to be the best driver for his growth.
He admits that any business has cash flow problems, but the relationship with financial institutions is important. Sometimes, some of your customers might need to buy stuff in credit, and this can be challenging to the business. Nonetheless, you have to strike a balance between rewarding loyalty and losing your customers. Sometimes, you may have to outsource some services such as payroll so that the company can focus on what it does best.
Relationship to Business plan
The speaker mentioned various issues that relate directly to the elements of a business plan. First, he pointed out the issue of setting goals and planning on how to meet them. He advises on the need for planning and taking baby steps rather than rushing. He did this and was able to succeed. Moreover, he mentioned on how he benchmarked his business around satisfying the customers. Without this element, he would be operating in the first place. As of 2018, he was focusing on diversifying his customer base. He advises against serving one customer or having one that contributes over 60% in revenue because your business may crumble if they go out of business. Cash drives all businesses. Business plans often show where a company will acquire cash to run its daily operations. Flexibility, using mentors and advises from other industry players, trying, and getting out of the comfort zones helped him in succeeding. Lastly, it is important to communicate and treat employees well and focusing on creativity.