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 A Time To Sew, A Time To Reap

Entrepreneur's Notebook
by Kerry Krouse Thompson-McCoy
Nation's Business Magazine

I didn't get into business to make a fortune. I got into it to make ends meet. So where a lot of entrepreneurs pull money out of their businesses, I never take much more than what I need to live. Of course, in the 19 years since I started Arkansas Flag & Banner; there hasn't always been much to take, but I am now at the point where I can see my strategy someday paying off in a big way.

In 1974, in the middle of a recession, with a year of vocational training, I got a job selling flags in Dallas. That lasted six months. I then moved home to Little Rock, and , sensing opportunity, I asked a state official where Arkansas got its flags. As it turned out, they were from out of state. I thought I could do better. So with $400 and a supplier of flags, I went into business at a desk at my father's bill collection agency.

With no money to work with and no credit to speak of, building an inventory was difficult. Every time I got an order, I spent the money providing one flag for the customer and one for stock. I took part-time jobs to pay the bills. In 1979, married and pregnant, i moved the business into my home. I spent 4250 on an answering machine - that's what they cost back then - and more on inventory. Working alone for about five years, I almost gave up. I was earning enough to pay the bills, but I was burned out enough to get a real-estate license and consider quitting.

Persuaded by a friend to stick it out, I hired a helper and bought Yellow Pages ads in seven states around Arkansas. The response was so good that I moved the business into an old rental house my family owned in downtown Little Rock. My mother gave me a year rent-free.

Sales began to take off, and orders were beyond our capacity. We needed more equipment to speed up production. I borrowed about $7,000 from my mother to pay for a computer and a plotter to make vinyl banners, products that had a lot of customer interest but few vendors. then I hired a seamstress. The investment in equipment and personnel paid for itself, and the business kept growing.

When Iraq overran Kuwait in August 1990, demand for flags intensified. Swept up by Gulf War patriotism, our customers bought everything we could produce. After a few weeks, there was nothing left on the shelves. I decided to pump the revenue back into the business. To expand our selection of products further, I hired two local men to build from scratch a screen-printing table, which enables us to mass-produce banners. It was another big investment, one I had planned to put off for a few more years. But I wasn't going to miss out on an opportunity. It's understandable when an entrepreneur want s to take money out, but failing to put money back into a business can really short-circuit growth. For me, each reinvestment, from the answering machine to the screen-printing table, was a product of aith and determination. As long as Arkansas Flag & banner paid for the house, utilities, and food the rest of the money could stay in the business. I always assumed I'd get a payback.

As Arkansas Flag has grown into a full-service company, so, too, has the demand for money that has to be put back into the business. where the $250 answering machine was a stretch, today it's $2,500 computers, $ 8,000 software packages, and more. Last year, the company landed its biggest deal ever: a $200,000 order to provide flags and banners for countries participating in the Central American and Caribbean Games, which were held last fall in Puerto Rico. The company has 15 workers now. Las year was our first with $1 million in sales. Things keep looking up and are almost at the point where I don't need more equipment to run with the big boys. Once I get to that point - and it has been a goal for the entire 19 years - I can invest a little bit more in my employees and maybe pay myself better, too.

To be honest, my paycheck hasn't grown in a few years, largely because I haven't need it. But I figure that I'm worth something because I won the business and it has value - more every day - even if I don't pocket a lot of money. That's not the way a lot of entrepreneurs build their fortunes, but then again, there are a lot of business people out there who have trouble making ends meet.

Posted on January 20, 1994

 

 
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