As I mentioned in my previous post, reading The $100 Startup has led me to reflect on small businesses I have been able to observe as I have grown up. Most significantly, I watched my parents run their own business, and it had an amazing effect on my childhood.
By watching my parents work everyday, I learned the importance of a strong work ethic and the value of self employment. I was able to observe the daily struggles, and the successes. I saw how the business WAS my a reflection of my parents.
As I reflected on what I knew about my parent's business, I realized that their business, Discount Data Supplies, could have easily been an example of a $100 Start-Up, as discussed in the book. I was inspired to interview my parents to find out more about how Discount Data was started, from the entrepreneurial point of view.
When did you start your business?
Ken: 1988
What lead you to start your own business?
Ken: My boss was stealing my commissions.
Jane: Dad first entered the world of computer sales when we lived in Maine in the early 1980s. In the early days of personal computers, he was able to combine his training and skills as a teacher along with his love of research, by helping people understand how they might solve their office’s word processing and personal computing needs with the purchase of a computer. People who purchased computers also needed printers, paper, ribbons/inks/toners and memory storage keep their offices running. He began to notice that while the sale of a single computer brought a nice commission, sales of these items were few and far between, while the consumables that kept them running generated frequent and ongoing sales. In 1985 he took a job as purchasing manager at a multi-branch bank. Equipped with extensive knowledge of office automation equipment and supplies, he was able to make sound purchasing decisions for the bank. One of the vendors he worked with was a sole proprietor who specialized in selling supplies for office machines used by banks. This guy really knew the market and was a pleasure to work with. After moving to Massachusetts in 1988, Dad took a job selling office machines for a large company. Not happy with the way that business was being run, he remembered that vendor from Maine, noticed that no one was serving the banking industry in our area with that level of service, and decided to start his own business to serve that niche. Discount Data Supplies was born, its mission—to provide the local banking industry and similarly sized businesses with high quality consumables for their office automation equipment at a low price and a high level of customer service.
How much money did you have to initially invest for start up?
Ken: $100 (bought a used 2 line telephone –at a yard sale!--and folding table)
Jane: …and he was off and running and in business. Because he could custom order the supplies each customer needed and have them shipped to him next day, there was no need to carry inventory. Customers paid for their products upon delivery, so cash came in before the vendors needed payment. Because the business was run out of the house, overhead was extremely low. He possessed the product knowledge that the consumers lacked and could provide them with the product they needed for less than they were currently paying for it. He also helped them solve supplies ordering problems they didn't even realize they had, e.g., he created customized supplies order lists for each customer to make it easy for them to call in or fax-in orders, he labeled the toners and ribbons with a bank’s own internal product numbers, and he could often provide emergency same day delivery of products by tracing “extras” of that item held by another department or another bank, and replacing the “loaned” item next day.
What has been one of your biggest challenges as an entrepreneur?
Ken: Purchasing at a price that lets me compete with WB Mason
Jane: The computer/printer/fax industry is an ever-changing field. When Discount Data Supplies stared, the primary product line was printer ribbons and a few laser toners and an occasional box of floppy disks. To illustrate, the only memory storage devices sold at DDS’s start up were floppy disks… the floppy kind. Floppy disks were replaced by 4 ¼ disks, then storage tapes of various sizes, then zip disks, then external hard drives, and now flash drives. At start-up, computers were very expensive and were primarily found in banks and law offices. As they became more affordable and more widely owned, the large office supply outlets came on the scene. While DDS does not compete directly with WB Mason, etc., (they don’t offer custom labeling or the high level of personal service DDS supplies) we do have to keep our prices competitive, which is not always easy to do. Dad’s love of research has enabled him to keep on top of the field and continually find new distributors and manufacturers, which has kept DDS competitive.
What has been one of the greatest rewards?
Ken: Being respected as a problem solver and expert in my field
Jane: Another rewarding aspect of this business for Dad is that he has been able to design it to match his skills and interests and steer it in the direction he believes is best.
If you could start from the beginning, are there any changes you would have made?
Ken: No
If you could start another business, what would it be?
Ken: Art dealer
What is your favorite thing about being an Entrepreneur?
Ken: The freedom
Jane: …and the outlet for creativity, the ability to solve problems most people can’t solve or aren't interested in solving, and the ability to control the decision making.
Have you ever considered NOT being an entrepreneur after you started the business?
Ken: Yes I almost sold my business to work for the buyer.
Jane: Selling the business for a handsome profit along with not having to constantly navigate the seas of change seemed attractive at the time, but the loss of freedom, creativity and decision-making control was too great a price to pay.
No comments:
Post a Comment