Tireless. Kim Lorenz

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СКАЧАТЬ life, really—into this business, realizing a little at a time that the son might be running it into the ground with poor decisions and management. The companies we both left to start our business did fail just a few years after we resigned. Hundreds were out of work, and a 65-year-old company was history.

      Prior to that company failure, John called me out of the blue saying we needed to get together to talk. John told me he had given notice and resigned. We discussed starting our own enterprise, and that short meeting led to an all-night session developing pro-forma income statements and balance sheets. By 4:30 AM, we shook hands and agreed that, “Unless we ran into an insurmountable brick wall,” we would start this new company. There was simply no other company in our market I felt could do what our vision was telling us we could do.

      At the time, I thought I was already near the top of Maslow’s hierarchy pyramid. I was at the top level of management. I had a company car, recent salary increases, a new home we had just built, and kids in a private school. My life was about to take a huge change!

      John felt assured that he could run an efficient retread plant operation, building it from scratch. He had planned to buy used equipment as cheaply as he could, possibly at an auction, and have it shipped to Seattle. I, on the other hand, felt strongly that there was still a market for a commercial tire company working with the customers and educating them on how to reduce their operating costs and significantly reduce expenses.

      It’s important to note that this had nothing to do with selling tires cheaper than the competition. That was already being done. There were several areas we had learned that would save customers a lot more money than simply buying cheaper, but the customers did not understand that yet. Again, this was thinking outside the box, doing something others did not understand. This involved really learning the customer’s business, not just our business. The examples later in the book are there so you can think through what we did. There are also examples of what many others did and are doing that might apply to your own business, or any business. We showed Fortune 500 firms how to operate their own businesses better with our knowledge, as well as helping them see what industry trends could benefit them. That is the story worth reading. Who cares that two people started a little company that grew very big? What matters is looking at what your company does and asking yourself how it could be done better.

      Our vision was not complicated. It seemed like everyone else in the marketplace was simply selling tires and services. There was no one educating the customers on their options and what could happen if they changed the way they did their business. It was a vision that could change the paradigm of the companies we targeted and lead our business to success.

      One such area was outsourcing—showing the customer that with changes, they could reduce labor costs and the associated expenses and liability. In the past, the customers were hiring their own staff for the tire programs. We could show them why they did not need to do that. We could be an outsource entity that could significantly reduce their operating costs, and we could prove it. Companies could experience huge savings by looking at operations in a different way. Our new venture would be a company that specialized in outsourcing and educating the customer.

      Of course, selling new tires and retreaded tires went along with this, but no other company was in this space doing what we believed the customer really wanted but did not know how to do. Anybody could sell a tire or lower a price, but that was not what the customer really needed. All companies strive to find ways to do business more efficiently. Any business running trucks needed to buy tires, and if somebody could show them a better way to do that, it would result in a win-win situation. To fulfill this vision, we were hiring staff with no experience in our industry and training them how to do it our way. We wanted people with no baggage or bad habits.

      The opportunity was right in front of thousands in the industry, but nobody, especially the global companies, could visualize it. Those big companies just wanted to sell more tires, but the customer could realize huge cost savings by changing the way they operated and used tires. Why would a customer hold $100,000 of inventory when we already had a warehouse? This will all make more sense as you read further.

      Our largest success story was with Boeing. They operated several thousand trucks and equipment over several cities that all ran on tires. They spent about $500,000 a year buying tires. We saved Boeing over $600,000 in direct costs by changing how they bought the tires, managed the tire program, and warehoused the tires. Really, they still spent $500,000 on tires after changing to our company as a supplier, but they also saved $600,000 a year in cash as we assumed the management of the tire assets, warehousing, and maintenance. We won a huge award for this, covered a little later in this book. Trust me, it was not rocket science, and anyone could/should have been able to do this. However, nobody did until we came along with our vision and new company.

      After that all-night planning session that led to the founding of our first company, John agreed to research the availability of the plant equipment to fit within our budget, while I would discuss our ideas and plan with the major tire companies we would want to use. We both agreed that the likelihood Michelin would even consider us was low, but we had to shoot for the moon anyway. Even if the chances were small, we both knew that in order to fit this new model, we had to become a Michelin tire dealer. The Michelin products fit our model of business. The Michelin truck tires lasted longer and could be retreaded more successfully than any other tires, and we made more money (and the customer saved more money) using retreads.

      From the time the Michelin brothers started the Michelin Tire Company in the late 1800s, almost every advancement in tires, even today, has been first introduced by Michelin. The company saw an opportunity to make a simple bicycle tire that was filled with air in 1889. Up until then, all tires were solid rubber. Ouch. Michelin was (and still is) a global, innovative, industry-leading company. Every car, truck, or vehicle that has tires is benefiting from something invented first by Michelin. Michelin invented the pneumatic tire (tires with air inside), the tubeless tire (and wheel), the radial tire, and so many more products we all use today. But more of that story and the parallel reasons for our success later. Michelin had vision, and for over 130 years, they focused on what the industry needed and invented it. They had a similar focus to our own.

      After John and I settled on our marching orders, off we went on our separate ways, planning to stay in touch with any and all updates until we found the manufacturing plant. After we secured the building, I would need to resign from my job.

      Just like that, we had decided to start a new business together, leaving the security of our old jobs behind. Would we succeed? Could we make it into the five percent of new businesses that make it longer than five years without failing? We didn’t know for sure, but what we did know is that even the best plans have no guarantee of future success. You will never know unless you try, and our company started from nothing just a few months after that meeting.

      2 By the way, failed retreaded tires are not the cause of the rubber pieces we all see on freeways, but something about that later.

      Chapter 3

      Taking the Leap

      A few weeks after our all-night session about starting this new business, I found myself in Sitka, Alaska, sitting at the Shee Atika Lodge. I was still working for the tire company who hired me out of college. This Sitka trip was to meet with and present a proposal to Alaska Lumber and Pulp, a very large pulp mill. I had called this company for years, but had not yet done any business with them. They had hundreds of “rolling stock,” meaning equipment using large industrial tires. I traveled with Bill VanSomeron, the West Coast Manager for Michelin, along with our Michelin sales representative, Norm Toomey. Both were great people to work with, and fun to be around. We had all been collaborating on a proposal for this pulp mill.

That day, during the meetings, we succeeded СКАЧАТЬ