The Entrepreneurial Journey

This chapter demonstrates why entrepreneurship is a thrilling, taxing and rewarding path all at once.  Mr. Shankar Balan (1986, Mechanical Engineering) describes his journey from India to the United States and shares how he never lost his passion for starting his own company.  Get ready for an exciting read!

Mr. Shankar Balan (1986, Mechanical Engineering)

Introduction

During my school days in Rajapalayam, several of my father’s friends and my close friends were all from an entrepreneurial family and ever since those days, I always wanted to own my own “factory”. 

When I graduated with my Masters and on my way to get my MBA, I had an opportunity to present a paper in Statistical Process Control (SPC).  In the audience, was the VP for Monroe Shock absorbers a division of a large conglomerate Tenneco.  He approached me after the talk and wanted me to come and address his staff.  The meeting he wanted me to come to was in a very nice resort in Florida and included golf.  He even said he would pay me for the day.  I never thought of my student visa and all the potential issues this might cause if I accepted a fee from a corporation. 

My naivety and total eagerness to golf in Sawgrass, made me accept his offer.  I scrapped my entire life savings of under $500 and bought an air ticket and landed in Florida.  I don’t remember how my talk went, though I am sure it was a total disaster.  But on the golf course, I was in the foursome with this Vice President and he asked me to come in as a consultant for one year to help them implement their SPC program.  I still did not tell him about my visa situation. 

I started to work the following week and their accounting department asked me what my company was called so they can issue my check.  Just like in the movies, I came up with the name.  Though several months later, I got a notice from the Immigration department and had to tackle this, I learnt a valuable lesson here.  “When an opportunity knocks, accept this and then figure out later how to piece the puzzle together”.

Starting a business

A few years later, the bug to start my own factory started to haunt me.  All my friends kept telling me to accept the permanent job that was offered by another large automotive company.  It was summer of 1993 and my mother was visiting me.  She knew me well and she said, “Do what you want.  What is the worst thing that can happen?  You will lose all this money you have made, but you have a great education and I am sure you will get a job later on as well.”  Mothers know us best. 

I came to Augusta, Georgia to start Palmetto Industries.  I had seen this product a year earlier when I was visiting a friend, with an ulterior motive to get a Sweat shirt from the Masters Golf Tournament, one of the four ‘Majors’ - the other three being the US Open, the British Open and the PGA.  Though I returned empty handed back to Michigan, I knew I could make this Flexible Intermediate Bulk Container. 

So, in 1994, all my belongings and myself in my two door car made it to Augusta.  Again, naivety and just my passion took over all logic.  After 20+ years, I have been asked my classmates to write this chapter.  I must have done something right.  Truly, this opportunity means a lot more than several of the accolades I was given. 

Golden Rules of business – Will you break them or not?

During my first few weeks I was in Augusta, I met the just retired President of University of Georgia.  Dr. Fred Davison.  He was larger than life and I could never get to call him Fred, as he insisted several times.  So we settled and I called him Dr. Fred.  He told me the following rules.  Though I never wrote them down, I remember them and I have attempted to capture his advice.  He also told me I had to follow this at any cost.

·       Hire the best employee.  Interview a lot, check references, take your time but once you hire treat them fair and commit to a long relationship.

·       Ensure your employees are smarter than you and listen to them, but make your decision based on your gut and their intelligence

·       Treat your suppliers better than your customers – Customers will leave you but suppliers will want your business and will work with you

·       Never compromise on your quality – Never

·       Take your time and come up with you corporate values and vision but never compromise

·       Hire a good lawyer and an excellent CPA firm.  Also make them as part of your board or your advisory board.

·       Never underestimate your competitor and never get a business just because you want to take it away from a competitor.

·       Innovate, Innovate and Innovate – Don’t offer a “me too” product

·       With every paycheck period, put a small amount into a savings account.  Start with $100 and make it higher as your business takes off.

·       Learn all aspects of your business – Nothing in your company is too small for you to do or too big that you cannot do.

·       Commit to your community and always participate in local area politics

And then he said…

·       Nothing will ever work as you planned.

·       On this last point the boxer Mike Tyson has a famous and funny saying, “Everyone has a plan 'till they get punched in the mouth.”

Did I always follow the above rules?  I have tried to and may his soul rest in peace.  If I can dedicate this chapter to Dr. Fred and have him send me his blessings, I would be grateful.

Lessons Learned

Hiring and layoffs

One thing I learned was though I always had the best intention while hiring someone, if it does not work out, let them go quickly and gracefully.  Dragging this out is not good for either party.

Listening

Listen to your employees.  BUT verify several times.  If necessary bring in outside consultants to validate your decisions.

Suppliers

Suppliers are lifesavers - But always negotiate the best value for your company.  During the 2009 financial meltdown in the USA, I had to go to several of my suppliers and work out a payment plan for past dues while ensuring my supply was going to be uninterrupted.  Being honest 100% was the only way I was able to keep my company from bankruptcy.

Quality

In our space as in several others, quality is a subjective term.  I used to supply some Poly Ethylene Tarps to a very large big box retailer in 1996.  I used to import this from South Korea those days.  The specifications from the customer, which the supplier agreed to was far different from the actual product.  My customer and my supplier and I all knew this, but nobody said anything, because it was a commodity item. 

After two years of the specification continuing to degrade, I had to confront my customer and ask how to tackle this.  I was shocked when he said, “I always knew what I was getting, but the label says what I want it to say - So don’t worry, nothing will happen to you.”  I had to listen to my team and my conscience and next year did not bid on his contract. 

Thankfully, some changes in his corporate program, they revised their terms and specifications to match the supply and five years later asked us to bid again.  This leads to a very good question – How much do you educate your customer? Do you want to be 100% transparent or only tell them just enough?  Over the course, I have adopted the latter.

Flexibility

As a founder and entrepreneur, always be flexible.  In 2008, we launched a new product.  It was our idea to take this to the market all by ourselves and did not want to go thru distributors.  I even brought in a new Director of sales.  After spending over 12 months in marketing and meeting with several customers, we had very little traction.  My entire team was still very optimistic and we knew we could break the barrier and go at it by ourselves. 

The 2009-year started out extremely bad and I was worried.  In the meantime, I was approached by a large distributor and a competitor.  Over a few drinks and a round of golf, I had signed an exclusive agreement.  I had to call my new Sales Director the next day and tell him.  I had underestimated the resources required to penetrate this new market and had to change course.  I had to do what was good for everyone.  Sometimes, you make a great team even with your competitor and is a WIN-WIN for all.

Communication

I always start my meetings by asking all to first tell me the bad news.  Good news always travels fast and everyone wants to brag about this.  Prior to me starting my company, I was doing some consulting work for a bank.  The CFO of this bank always said “Air your dirty laundry, don’t sweep it under”.  It is very critical however to not point fingers or to lose focus of the meeting.  I view this like talking to your kids.  They should be afraid that Dad will punish them for something they did wrong but NOT be afraid for telling me what they did.  The punishment for lies or “sweeping it under” is worse.  Also once the issue has been laid out it is everyone’s issue and a team approach is needed to solve this.  I also never hold these against the managers during review.

Emotions

Never do take any decision when you are angry, happy or emotional.  Invariably you will make the bad choice.

Work Life Balance

Always put family first over work.  I always take my wife’s call and always set make my travel based on my kids schedule.  Nothing is more important to me.  I found out when I told my customers why I was not able to take their call or visit them, I actually scored points.  How about that? Honesty actually paid off!

Technology

Embrace new technology.  In 2000 or so, one of my colleagues on her own initiative developed our own ERP system.  It was written in MS Access.  We quickly out grew this.  Around this time, the Internet was taking shape.  One our classmates – Sudha came to my rescue.  Very early on, she recommended I make this whole thing web based and not resident software.  Take full advantage of social media for marketing.  Equip your sales staff with all the fancy gadgets for presentation

Is it Fame or Fortune that drives an Entrepreneur?

I think neither and I feel it should be neither as well.  Though both will seek him for a job well done, what drives him is the passion.  I remember the golden rule – Innovate, Innovate and innovate – This applies to all areas of the company – from product innovation, to process innovation to customer service to logistics.  I keep tweaking the company constantly and sometimes drive my colleagues insane.  I try to stay a few steps ahead of my competition and I feel it is my job to do so.  Of course a nice pay check at the end of the year helps and especially as I get older and retirement staring at me, fortune starts to play a bigger role.

One of my corporate values is I will never “bribe” a customer or “buy” some business.  In 1999, I found out one of my sales guys was having illicit dealings with one of our customers.  The account at that time was almost 20% of our gross sales.  Nevertheless, I had to fire the account manager.  But I did not know how to deal with the customer and had to write to their President.  I lost that account and have never been able to get it back.  My account manager went to work for my competitor and guess who has that account to this day?

Exit Strategies

Every entrepreneur needs to plan his exit – Does he hand over the reins to his kids or go public or sell.  I always planned to sell and hopefully if we have another book release in 5 years or so, I might write a chapter in a successful merger!!

Role Model

Everyone needs a role model.  I always liked Steve Jobs – His passion to build the best product and never compromising on quality was what I started to admire him for.  But his second act, as he took over the reins back from the company he founded and made it a truly world class was made me almost worship him.  In 1990 or so as a graduate student with just a few $100 in my pocket, I made my first stock purchase – it was Apple stock.  I think I bought 50 shares or so. 

Am I glad I kept it to this day!

Summary

I have written this chapter based on my experience with a hope there are some gems for the future graduates.  Whether you are going to be an Entrepreneur or go to work in a large company, I feel the challenges are the same.  Several of the above rules apply to all.  We should do what excites us and keeps us challenged.  When the day comes we are working for the next paycheck, that is the day we need to take stock and regroup.

About the author:

Shankar Balan is a Mechanical engineering graduate.  He currently lives in Augusta, GA USA with his wife and twin children.  His work is in the packaging industry.