"There I stand, a woman 57 years old -- where do I go from there?" -- Alicia Paige
Alicia Paige had spent most of her life as a small-town librarian. Six years ago, she founded a business to automate library catalogs; today that company, Computer Engineering Associates Inc., does roughly $6 million in annual sales. Paige works out of a cluttered office in a courtyard across the street from the town hall of tiny Avon, Mass., not far from Boston.
Everything collapsed for me in one year, 1978. My sister died in October, my divorce became final in November, and I had to sell my home in December. So, at that point, what do you do? There I stand, a woman 57 years old -- where do I go from there?
When I was in the Randolph Library, we used to have what they called the interlibrary loan service; sometimes it would take six months to get the book that you wanted yesterday. So I said, now, wouldn't it be interesting if I could put all of the South Shore library holdings on one database, and put a CRT in each library, and make the librarians feel like they're big computer operators? They could call up for a book by author, title, or subject, and they would know immediately where the book was, what library it was in.
I talked with my brothers, and they said, Well, go ahead and try. I said, Yeah, but suppose the business fails? What am I going to do? Where am I going to live? My brothers said, You've always got us, you can come and live with us until you get back on your feet.
I sold my house for the start-up money, and I knew that it was all I had. If the business did not prosper and bring in money, then I would eventually have to go bankrupt. I used to wake up in the middle of the night -- you know, I'd be sound asleep, and all of a sudden, I'd wake up, and I'd sit straight up in bed, and say, Am I crazy?
I never thought of just a small business. I said, no, if I'm going to start a business, I might as well go big. Like IBM. I'd like to keep going so I can say I have $1 billion in orders. I would love to say that! I don't ever expect to, but I'm looking that way. I never thought that we would do close to $6 million in business. But we did.
"The first thing you do is buy crayons." -- Tom Barnidge
Tom Barnidge, 59, is the founder and CEO of Agri-Resources, selling $1.5 million in cattle and hog feeding equipment throughout the Midwest. Before going out on his own, Barnidge worked in the chow division of the Ralston Purina Co. for 30 years, climbing up the ladder from a packer to a division vice-president.
Before I left, it was conceivable that, with some degree of luck and timing, I would have made corporate officer. But when it became a matter of whom you're to please rather than what you're supposed to do -- which is really what it was -- I decided then, who wants it? There's a degree of honesty and integrity in most of us, and I couldn't honestly come back that last year at nighttime and say that I'd done anything I really thought was productive.
When I went to work for myself, the first thing I wanted to put together was a sales-promotion package. The way I would've handled that back at Purina is to call in one of the copywriters and someone from the art department and tell them what I wanted. They would've done it. But when you're a two- or three-man organization, the first thing you do is buy crayons. Then you buy a pad. And then you do it.
It's a pleasure not to have 14 different people who have to sign and approve what you do. You don't have to please anyone, you don't have to answer those damn reports. But of course, if you get 14 people to do it, then there are 15 of you who make a mistake. In this company, if you make a mistake, there's no one but yourself to blame.
"All of a sudden, this bunch of friends turned into a company." -- Bill Epifanio
Harvard-educated Bill Epifanio, age 26, followed a traditional path after graduation -- he became a consultant with the firm of McKinsey & Co. While there, he researched the histories of America's most successful large corporations for Allan Kennedy's ground-breaking book, Corporate Cultures. In August 1982, he founded DynaMedix Software Corp. with five of his friends from New York City. The company projects 1985 sales of several million dollars.
I had done quite a bit of work researching a Procter & Gamble story and an IBM story, and the basic takehome message I gained from doing that work was realizing that, my God, the guy, Thomas Watson, was a regular human being. William Procter and James Gamble were real people. And they created giants. They were faced with problems, they had to meet payrolls and make decisions, but the point was seeing how they started. It's a very human process. I realized that it was something within my reach.
I felt, gee, if they could do it, why don't I give it a try? So we formed a corporation, and all of a sudden, this bunch of friends in a room turned into a company. The funny thing was, we thought things were going to be a lot simpler. We figured we'd just write a program and sell a few copies, make $40,000 apiece and have fun, and that was it. We didn't start off planning to try to take over the software world. Now we've got visions of the next Lotus dancing in our heads.
"Some of them are run the way I run my closet, for chrissakes. No wonder they're going out of business." -- Reid Gearhart
Reid Gearhart is editor of Dun & Bradstreet Looks at Business, and compiles the index of business failures for Dun & Bradstreet.
In 1983, the number of failures reached the highest level in history, with the exception of 1932, at the peak of the Great Depression. There were 31,334 business failures in '83.
Our rule of thumb is that a new business basically has a 50/50 chance of surviving past its fifth year. It's the simple things. Is the business managed properly? Do they have a business plan? I've been to many small businesses, and some of them are run the way I run my closet, for chrissakes. No wonder they're going out of business. We used to break out the causes of failure: 0.3% attributed to fraud; 0.6% to neglect; 1.3% to disaster; 9.8%, lack of managerial experience; 9.9%, lack of experience in the line; 23.8%, unbalanced experience; 54.3%, incompetence.
