The Trying Game
|Visit the Inc. 500 site, which includes a fully searchable database of winners from 1982 to the present|
Average number of prior start-ups for each founder of a company on the Inc. 500: 1.9
Not even such renowned en-trepreneurs as Henry Ford and Howard Johnson--or even, in all likelihood, you--can claim to have come anywhere near matching Chris Graff's legendary feat.
Henry Ford misfired with two different businesses before securing success with Ford Motor Co. And Howard Johnson ran his father's cigar store into the ground before he erected the aqua-and-orange empire whose motels and restaurants now dot America's highways. But Graff, president of ambulance manufacturer Marque Inc. (#399), sped his way into and out of an astounding 11 ventures en route to the Inc. 500.
Graff says that he's wanted to run his own business since he was about six years old. Although he grew up in a family of entrepreneurs that goes back three generations, he had never received much encouragement to start a business of his own. "My mother said I should go to work for somebody else," he says. "To this day, she still thinks my life would be easier if I had." His father didn't really say anything--but then, he didn't need to. "His businesses always plodded along," Graff says. "None of them were really ultrasuccessful."
Perhaps the most positive influence on Graff was his grandfather, Harold Schrock. Schrock's boat-manufacturing company em-ployed more than 1,000, which impressed 10-year-old Graff so much that he assembled a group of about 20 neighborhood kids and printed up some business cards. "We washed cars, raked leaves, stuff like that," Graff says. His take, as scheduler, amounted to a generous 50%.
Graff has started nearly a dozen businesses since, meeting with "far more failures than successes," he admits. Not that each of those failures didn't have educational value--in retrospect, naturally.
For instance, when Graff bought the patent on a new bed-support system, he thought he had a sleeper hit. The device replaced a regular bed frame by supporting the box spring from its center instead of on four legs, thereby preventing the dreaded stubbed toe. After receiving a mention in the Wall Street Journal, he sold hundreds of sets directly to consumers. But retailers and distributors wouldn't sign on, preferring to deal with vendors that had more diversified product lines. The lesson: "One-product companies are almost impossible to make profitable," he says.
The children's furniture company Graff started in 1988 had the right market (lots of boomers having lots of kids) and the right products (toy boxes, miniature dinette sets). But the business, he says, was undercapitalized. Eager for sales, Graff extended credit to all comers and lost more than 20% of sales to uncollectible accounts. The lesson: not all customers are equal.
Then there was the catalog company Graff founded right out of college. He printed up 200,000 catalogs for the Christ-mas selling season and dropped them off at the post office. Six weeks later he had yet to re-?ceive a single order. He finally discovered the post office hadn't mailed the catalogs; they were sitting in a warehouse in Chicago. "I never got an explanation," he says. The catalogs finally went out, but Graff needed $500,000 in orders to break even and received only $20,000. The lesson: "When something's critical, follow up and make sure it gets done," he advises.
Finally, in 1990, Graff's grandfather approached him with an appealing proposition. Schrock had heard about a company that a local bank was closing down and asked Graff if he wanted to try his hand at it. As it turned out, that was the company that would change Graff's luck. With 1995 sales of about $8.4 million, Marque is, by a factor of more than 10, the largest and most successful enterprise Graff has built-- proof that the only thing better than knowing when to quit is knowing when not to. *