Michael McSain, of Johnson City, N.Y., was hardly the gambling type. Climbing the management ladder at a local office supplies company, up from salesman to the general manager's job, he had often thought of working for himself, and had even looked into a couple of possibilities. "But it takes an awful lot of moxie to leave an established position and start from scratch," he admits. McSain was afraid he couldn't cut it.
But in 1978, he decided to take the risk. New York State was looking for distributors for state lottery tickets, and McSain applied. After a lengthy interview, McSain was awarded four counties in New York's southern tier, and Cosain Inc. (#34), in Johnson City, starting with a line of credit at local banks, became one of five distributors in its region. "The security of being a partner with the government made me feel comfortable," he says. "It wasn't some little partner; I thought that New York State would probably be here for a while."
Just to be safe, however, he kept his day job. The state had provided a list of existing customers, which he divided into routes. Then he trained his wife in sales, set up the necessary paperwork systems, and put her on the road. McSain himself worked nights and weekends, concentrating on finding new business.
"Lottery tickets are no more difficult to sell than a bag of potato chips," he insists. But McSain went beyond wholesaling mere tickets to retailers. Instead, he tried selling dreams, convincing business people, shopping-mall tenants, and business and merchants associations to organize ticket giveaways to draw new traffic. He set up a direct-mail program, and offered tickets to newspaper, TV, and radio outlets in trade. "They were ways of getting a lot of people talking about the lottery," he says, "to get advertising out in the field without spending lots of money."
At the end of the first year, with sales of roughly $600,000, he gave up his job. Last year, sales had climbed to about $6 million, and -- having just been awarded another 10 counties and doubling the size of his operation -- he hopes to reach $18 million next year.
"It's hard work," he says happily. "Now I devote every minute of every hour to it. But I love it." And he has become a bit of a gambler, too, taking regular fliers on the lottery himself, although so far his biggest payoff has been $50. "It's exciting. Like everyone else, I want to win a lot of money, but I haven't been one of the lucky ones. Yet."