Noble had bid $196,000 on the job. Expenses to date totaled $140,000 when suddenly, Hazardous Waste Management filed Chapter 11. The bonding company refused to make good, Mobil Oil (owner of the asphalt-encrusted tanks) shrugged its corporate shoulders, and Noble was screwed. He started borrowing money from banks back home, $50,000 here, $75,000 there.
"I had maybe two loans on the same receivables at two different banks," says Noble, "and both banks had liens. I guess to some degree I really did some unethical things. I say I guess I did something wrong -- ha! I know I did. I was really juggling."
What Noble learned: "Give me money before I get rolling. I need a down payment, and we want money to mobilize. There's no need to be shy."
And, yes, some jobs just ain't worth it.
* * *
Then: What, me plan? When's the next payroll?
Now: You take the long view, and you mark your course.
When it comes to capital outlays, Douglas Otto, founder of Deckers, a $57-million outdoor-footwear manufacturer, is uncompromising. He demands a one-year return on investment. Unlike most owners who depreciate assets and figure that money saved over many years is worth the investment, Otto demands an instant payoff. "We concentrate on stuff that saves us money within a year. Things can become obsolete pretty quick, and everything has to pay for itself."
Well, sure, if you make a consumer product, fast and flexible is it. But that doesn't mean you can't strategize. Sooner or later, you have to. It may mean investing in capital equipment that seems beyond your means. Rinaldo Brutoco, who runs the catalog company Red Rose Collection with his wife, Shanna, says he's come to recognize the value in such expenditures. "You get a computer system that works and you don't have to make do with something that's fundamentally broken," he explains. "We spent $100,000 last summer to upgrade our network. The difference it makes in people's peace of mind is enormous. These types of purchases have to be made."
Or it may mean learning how to think in blocks of time longer than six months. Tom's of Maine CEO Tom Chappell, for instance, pulled together a board of directors in 1981, 11 years into the building of his family's personal-care-products company. Chappell looked for people who were strong in areas where he felt weak -- general management, marketing, financing, organization, psychology -- and asked them to help develop a 5-year strategic plan for the company. Their task: figure out how to expand distribution from health-food stores to the mass market. "I was at a point where I knew I needed more ideas than I could generate," says Chappell.
* * *
Then: You thrived on fear, chaos, and the great unknown.
Now: You plan ahead, you stick to the schedule, you eat dinner with your family. Surprise! You function better that way.
OK, so not everybody gets from then to now on this one -- or wants to. Tom Chappell insists that while he's learned to temper his type-A personality, ultimately, "I don't value being comfortable. I think that's stupid."
Moreover, at Subway, Fred DeLuca attacks creeping complacency by sending all his territory leaders multiple voice-mail missives -- as many as 10 a day -- filled with scary intelligence on competitors and other motivational stuff. The voice-mail system with toll-free access costs about $150,000 annually. The 3,500 informal training videos DeLuca sends out as conditions warrant run about $12,000 for each mailing. It's all money well spent, he maintains, because "there are advantages to being on edge."
Jim Noble, on the other hand, after 10 years in business has reached the stage at which he doesn't always have to run quite as hard as he used to, and he's grateful for that. Plus he's convinced he accomplishes more in 60 focused hours these days than he did in 90 frenzied hours back when he was still in bootstrapping mode.
But even Noble finds that too much calm in the workplace -- too little pressure, not enough stress -- makes him nervous. That's what he discovered when he gave up day-to-day control of the division that handles spills and other cleanup jobs and the new guy changed the culture.
"He has allotted for a little bit of the chaos," Noble concedes. "But he's got work scheduled out several weeks. I used to schedule out only two or three days. Everything was a juggle, and I enjoyed trying to make it work. You had only so many pieces of equipment, and everyone had deadlines to meet. I've always thought of myself as a whore. It's like the television commercial -- I say, 'Yes, I can!' and I get off the phone and say, 'How the hell am I going to do that?' And my job is to get it done, not to tell the client, 'No, we can't accommodate you.'
"Now my manager says no sometimes, and it's tough for me to hear that. I guess I had created that culture. I enjoyed it, and we made money with it. Maybe in my mind, I still think that's what it takes to make that area of our business go. I try to stay away from there. I think it actually runs better when I don't mess with it."
* * *
Then: Size was an issue. You had to fool the world into thinking you were bigger, badder, and more established than you really were.
Now: Size is still an issue. Only now the game is making sure your customers know you're still small enough to care.
"We faked it to some extent," concedes natural-foods purveyor Richard Rose. "When you deal with big supermarket buyers, you need fancy business cards, four-color pictures. It's presentation and confidence."
It's a classic start-up scam: coming off as something you're not. You learn little tricks -- referring to yourself as vice-president of your one-person show, playing a cassette of a low din of voices in the background when you take calls, making liberal use of the first-person plural. You have to smooth over slips of the tongue: "Did I say we're two years old? I mean, uh, one. Practically one."
For Snapple Beverage, it meant taking a crapshoot and putting all the company's advertising money into celebrity endorsements. For a while, in the mid-to-late 1980s, all the company's ad dollars went to Howard Stern, who yapped about the product on his radio show. Later Snapple spent half its ad budget on tennis star Ivan Lendl. Snapple CEO Leonard Marsh says it was worth it. "When we went out to sell to distributors, they'd go through all our stuff and see Ivan Lendl's picture, and right away they thought, 'Oh! These guys are big! He must cost a lot of money.' And he did! But we wanted to show people we were very serious about growing."
