
I was recently challenged to recount my biggest business mistake. That’s a hard assignment because there have been many, but here is one of them.
Between 1958 and 1967, I worked for a small ($2 million-plus) machine shop in Burbank. I was in my 30s at the time. The company was a sole proprietorship owned by a man named Ken, and it was a job shop. A job shop machine shop is one that bids competitively on machine work, and when it wins a bid, produces it — hopefully at a profit.
The shop manufactured all sorts of complex, extremely tight tolerance aerospace parts for such companies as Lockheed, Boeing, North American Aviation and others, as well as some occasional commercial work. The trick to successfully running a business like this is to bid low enough to beat the competition, and at the same time make money on the job.
It can often be a difficult problem. Sometimes the secret is having a particular piece of equipment that a competitor does not have. Or perhaps you can meet the customer’s delivery requirements when a competitor cannot. The secret is to figure out innovative ways to produce a particular part in a timely and cost-effective manner.
Ken and I made the ideal team for this kind of operation. Ken handled the books and he liked to talk and schmooze with customers, so he was the “outside” guy. I handled everything on the inside of the shop. Looking back on it, that was quite a lot.
I did a lot of the bidding for new work. This was no unimportant task. It involved studying the blueprints and specifications, figuring our how we would run the job in our shop, what the material and tooling costs would be, how long it would take, etc, etc.
Then when we got the job, it was my responsibility to produce it within the price we had bid so as to make a profit. I handled the planning (the detailed steps required to do the job), the purchasing of material, the design of the tooling, the management of the shop, the supervision of the employees (about 25), the selection of outside vendors and the staffing of the company.
During all those years of working with Ken, my entrepreneurial spirit was active and growing. I always wished that I could somehow be a part owner of the company. But I was very naive and had no knowledge of the financial operation of a business.
During those years, I saw several industry friends strike out for themselves and open their own companies. Although I envied them, I was always afraid to do that for myself because I thought I lacked the knowledge of how to correctly run a business (even though I was, in effect, running Ken’s business).
So what was my biggest mistake, the one I regret to this day? Never once did I ever approach Ken to ask him for an ownership piece of the business or to discuss any such possibility. In hindsight, Ken could have easily given me a piece of it and been ahead of the game by taking my dedication and loyalty to an even higher level.
Years later over lunch with Ken’s son, he said to me, “You made my father a very rich man.”
I’m sure that I did. If only I had been smart enough to make myself a little richer along with him.
— Paul Burri is an entrepreneur, inventor, columnist, engineer, guerrilla marketer and iconoclast. He is available to local organizations for speaking engagements and to local businesses for business consulting and/or mentoring. The opinions and comments in this column are his alone and do not reflect the opinions or policies of any outside organization. He can be reached at pburri@cox.net. Click here for previous Paul Burri columns. Follow Paul Burri on Twitter: @BronxPaul.