As classmates at the University of Virginia, Joshua Baker and Larry Weinberg pledged one day to start a company together. After graduation, Baker joined Exxon Chemical as a chemist, and Weinberg, a certified public accountant, signed on with Arthur Andersen. But two years later, in mid-1987 -- true to their word -- they teamed up in Arlington, Va., scraped together $5,000, and plunged into the home-remodeling business.
Weinberg had spent his summers in construction work, and a third partner had tools and a truck. "He was with us for only three months," Baker says, "but he helped get us started." They hired a few employees immediately and quickly learned the nuts and bolts of the trade.
With no money for stylish living, the partners shared a room in Baker's parents' house, and Baker tooled around in a beat-up Firebird with 200,000 miles on the odometer. "It was a wreck," he says. "I'd park it where clients wouldn't see it."
A small, run-down office in Arlington served as headquarters -- to be a player, Baker believed, BOWA Builders needed a business address. "Clients have never had to come in, but the ones who have are impressed that they're not paying for high overhead." His policy on office furniture was, and remains, clear -- never pay for it. "My chair must be 40 years old," Baker says, "and my desk I got for free."
The partners took a professional approach to job costing and accounting. Their first big purchase was a personal computer -- not what you'd expect for an undercapitalized start-up, but it set a classy tone that mattered in Washington's upscale suburbs. "While the competition was doing handwritten proposals, we gave customers something nice in print, on letterhead, in a folder with our logo on it," Baker says. As for marketing, they devised low-cost methods to promote their service. A direct-mail piece targeted a neighborhood of nearly identical houses. "One of our architects designed a flier that showed an image of a house that -- just coincidentally -- looked like those houses," Baker relates. "You opened it up, and it showed the house renovated."
The partners also assembled media kits. "Larry's girlfriend worked for a marketing firm and told us about reporters' expectations," Baker recalls. "So we sat down at the computer and composed materials that generated a fair bit of local press."
By 1991 Baker felt sanguine enough about business prospects to junk the Firebird, and he now drives a new Honda. "I thought about something fancier, like a Range Rover, but that wouldn't be in keeping with the company's spirit," he says. "We still try to be lean and mean." -- J. F.
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Leveraging: a Contact Sport
Logo Athletic · Founded: 1968 · Start-up capital: $250 1994 revenues: $230 million
It's probably fair to say that Tom Shine owes his company to Bart Starr, the great Green Bay Packers quarterback of yesteryear. Shine was an assistant football coach at Indiana University, where Starr taught a clinic for high school coaches. "Bart was wearing a blue golf shirt with the Packers' helmet embroidered on it," Shine recalls. "It looked sharp, so I decided to put an IU helmet on shirts and sell them to our team."
Shine had $250 and a credit card with a $1,000 limit. But he didn't need much. He collected cash from the coaches and players, and only then, money in hand, did he order the shirts. "We were making pocket change," he recalls.
But the business grew, and before long Shine had a partner, Bob Russell, a medical student who had captained IU's Rose Bowl team. He chipped in $200, and they named the company Lord Russell. "Bob had bought a house for $14,000, and he rented out rooms to med students to pay the mortgage," Shine explains. "The entire company was located in one room in the basement. I had a desk, an answering machine, and a PO box -- we sounded legitimate. But the house was a real pit. To light the stove, you'd turn on the gas and throw in a match, then stand back and watch that baby explode from all the grease."
Much of the partners' cash went for gasoline. They packed a car with samples and hit the road, visiting coaches at big-time football programs. In frantic forays, they visited three colleges a day. "It might be breakfast at the University of Tennessee, lunch at Georgia, dinner at Alabama," Shine says.
To get a coach like Bear Bryant at Alabama to promote the business, Shine and Russell would contract to pay him $1 for each "Crimson Tide" shirt they sold. The coach provided the season-ticket mailing lists, and, Shine says, "in our mailings, we'd have a picture of the coach and local alums wearing our garments. Everything was geared to get the cash in first. Then we'd order the products from the manufacturer and mail them out." And to promote the line, Lord Russell ran its ads -- featuring Bart Starr, who never charged for his endorsement -- for free in Sports Illustrated whenever that magazine failed to sell all its pages.
Sales hit $86,000 in the first year. By 1971 Lord Russell had a dozen college-football powers in its fold, but Shine, worried that the company was open to competition on the college front, set his sights on a marketing license from the National Football League.
Needing financial backing for such a big move, he and Russell recruited five local investors and renamed the company Logo 7. "Nobody invested a lot -- our entire capitalization was $60,000," Shine says. "But based on our partners' guarantees, we got a line of credit for $300,000." Shine knew Tex Schram, president of the Dallas Cowboys, who leaned on NFL commissioner Pete Rozelle to grant a license to Logo 7. The rest, as they say, is history.
Indianapolis-based Logo Athletic, as the company is now called, is the second-largest licensee of the NFL, marketing a full line of jackets, sweatshirts, hats, shorts, and the like. Cowboys quarterback Troy Aikman is the company spokesman, and such telegenic quarterbacks as Steve Young, Drew Bledsoe, and Dan Marino are under contract to wear the "authentic merchandise" on the sidelines. -- J. F.
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Do-It-Yourself Factories
Buschman Corp. · Founded: 1978 · Start-up capital: $500 1994 revenues: $2.7 million
You gotta hand it to Tom Buschman, who exemplifies bootstrapping in its raw and pure form -- opportunity seized and exploited with old-fashioned elbow grease. Buschman spied his chance in 1978 while working as a maintenance electrician at Avery International, a paper-manufacturing plant in Cleveland. The company was experiencing a 50% failure rate for metering rods, critical components of the paper-coating system. Buschman said he could make better rods, and Avery promised to buy them.
