I came to America in 1968 with several degrees and spent years studying chemical research before I started the former company with two friends.
When I started Poly-Carb, accountants, attorneys and bankers advised me to hire people with lots of experience.
My adviser said that because I didn’t know anything about business I should hire people who were knowledgeable about marketing and sales. It wasn’t bad advice. But it didn’t work for this company.
The people I hired wanted bigger cars, titles, offices and salaries. We had seven secretaries at that time and yet we still couldn’t get a letter typed. Suddenly, there were 55 people working at a company with less than a $1 million in sales.
The rude awakening came when my accountant told me that for all practical purposes I was broke. In that same meeting, my attorney advised me to file bankruptcy. He said, “We can file for Chapter 11, and I can settle your accounts for 10 cents on a dollar. We can do it very quickly without you losing your name or the business or accounts.”
For the fist time in my life I couldn’t sleep. I didn’t want to cheat people. Instead, I took a hard look at my business. I still had good orders, and realized that I was responsible for 90 percent of the company’s sales.
I decided I had to let go of my entire staff. I realized we didn’t need seven secretaries; just energetic, intelligent people who wanted to add value and work together as a team.
But even though I had good orders, I still needed raw material to fulfill them, and I did not have any money. I contacted my largest supplier and said I needed to visit them in New York. I owed them $500 million, and they told me there was no need to visit – just send a check. Somehow, I persuaded the senior vice president of finance to see me.
I told him that I had legitimate orders from contractors backed by the Department of Transportation. He said, “You didn’t make money before. How are you going to make money now?” He was right. But I showed him the cash flow that had been calculated for my company. I said that people were making those large salaries were no longer on my payroll. I have people who will work about one-fourth of what I was paying.
He said,” Your know, either you are the biggest con artist that I have ever met or you are a really honest person.”
I said, “It takes a con to recognize a con. But it also takes an honest person to recognize and honest person. You tell me who I am."
He game me the money, and we were able to pay off all of our debts within a year in 1980. We’ve been profitable every year since then and now have a second facility in Georgia.
Related post: John Bliss: hiring experienced people is riskier than growing your own
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