Spurred on by success, Hammer and Crowe slowly created more teams over the next three years. They also began to share financial information, offer bonuses tied to performance, and create an atmosphere in which employees could schedule their own time as long as they honored their work commitments. With each change there is still resistance, but Crowe and Hammer have come to accept it, just as employees have come to accept that things are never static for very long. Their bosses can be counted on to tinker. Today there's an advertising team, a front-office team, a quality team, and a facilities team -- a bit excessive, perhaps, for a company with only 10 employees, most of whom are on two or three teams. But even those who originally thought teams were "useless and senseless" concede that the business is running more smoothly than ever. Orders are going out on time, and employees know enough about each job to cover for one another and are more self-reliant when it comes to day-to-day problem solving. Because Crowe and Hammer spend less time putting out fires, they can concentrate more on improving the quality of the kits, developing new products, and expanding their retail operation to take advantage of summer tourist traffic -- the kinds of revenue-generating projects that will eventually allow them to cash out handsomely. They hope.
"Our big investments are behind us," says Hammer, "and we're beginning to harvest the result." At $520,000, sales are up about 55% since the purchase, and last year the business was in the black for the first time, allowing Hammer and Crowe to draw $20,000 in the form of a loan repayment. They also put time and energy into creating their own corner of paradise: they bought and renovated a summer house in nearby Lincolnville, spending a small fortune to virtually rebuild the structure to accommodate their lifestyle (by incorporating his-and-hers kitchen workstations, custom-built furniture, and separate master bathrooms). And they finally felt comfortable taking a vacation, chartering a 61-foot French racing sloop in Antigua for a week (complete with a cell phone that remained untouched).
It's clear that their retirement is not riding on the success of BlueJacket, but neither is the company merely an amusement for two people with deep pockets and some spare time. To anyone considering a similar plan, Crowe cautions, "you will put in more money than you thought you would, you will take out a lot less, and you will work harder than you did when you were making a six-figure salary at your large corporation." Is it worth it? Absolutely. "It's great fun and very rewarding to see our employees grow, to keep our minds active, and to be able to contribute to the community," says Hammer. "This is the best time of my life."
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Management editor Donna Fenn can be reached at incfenn@ aol.com
THE NEW BUYERS
As we read Donna Fenn's "The Buyers," we were struck by the story of BlueJacket's buyers, Bob Hammer and Sue Crowe. Their experience, it seemed to us, represents several themes in our economy, both recent trends and age-old questions about buying and running companies. Reporter Robina A. Gangemi called Dennis O'Connor, a partner at O'Connor, Broude & Aronson, in Waltham, Mass., to see if he agreed. O'Connor's law firm deals with emerging companies, from start-ups to more established businesses, and counts among its specialties "creatively structuring deals."
Inc.: We've been hearing that large-corporation refugees increasingly are buying businesses rather than starting them. True?
O'Connor: It's a trend that may have started with big-company refugees, but it now includes people who have left their jobs in companies of all sizes, often because they don't have the job security they thought they had. They have the talent, the knowledge, and sometimes the financial resources to get a running start by buying an existing business with experienced employees and making changes to improve the business. Three-quarters of our early-stage-company clients are people who buy or franchise rather than start from scratch. The product, the service, or even the industry itself is not of primary importance to many of them. These people are opportunistic, looking for a business to use their talents. They believe they can take their management talents to almost any business and succeed -- except, of course, in wild-card industries like biotech.
Inc.: Over the years we've been told horror stories about what happens when people bring their big-company skills to small companies. Is their experience any more relevant today?
O'Connor: People from bigger companies are used to working with significant resources. When they find they have to do it all themselves, it's kind of a shock. But in the long term, their organizational talents and discipline come into play and bring real benefits to small companies. That advantage gets overlooked because people focus on the adjustments they have to make in the first few months in the company. But if they can get through that initial period, they can do very well by the companies.
Inc.: Is culture clash inevitable between a new owner and the business's managers and employees?
O'Connor: I've never seen a case when there wasn't any culture clash. What you're talking about is change, and any change is tough.
Inc.: Why do you think people should think twice about buying a lifestyle business?
O'Connor: The business is going to be much more challenging in terms of time than they ever expected, and they won't get financial rewards in line with the effort they put in. It never ends, and it's brutal. If you're working for yourself and doing something you like, it can offset that. But meeting payroll is one of the toughest things in the world, and it doesn't go away.
