Inspanning the 'Power of Many'...
My goal throughout these Blog Posts is to persuade existing businesses to embrace ‘entrepreneurship’. But no one is to be excluded. Tradespeople, product designers, start-up initiatives, promoters, charitable organizations, and others are invited; you are all to benefit from the ‘entrepreneurialize’ management alternative.
According to the “OpenStax” Library*, a part of Rice University (Houston, Texas): “An entrepreneur is someone who identifies and acts on an idea or problem that no one else has identified or acted on.”
…Findex did that!
OpenStax goes on to say: “This combination of recognizing an opportunity to bring something new to the world and acting on that opportunity is what
distinguishes an entrepreneur from a small business owner. A small business owner is someone who owns or starts a business that already has an existing model, such as a restaurant, whereas an entrepreneur is someone who creates something new.”
[*OpenStax is a publisher of openly licensed books, developing and improving research-based courseware, establishing partnerships with educational resource companies, and more. ]
…Findex did that. It created something new!
It created a new, comprehensive response to an acute industry need, and it did so with a unique approach. That approach took a “buy-side” market position. Of course, in the mid-1970s, we didn’t know that that was what it was called. A true grasp of this 'trade finance' phenomenon did not come until decades later.
Nonetheless, Findex Purchasing did recognize that the end-user is ultimately responsible for the acquisition, whether independently or with the help of their Banker. So that is whom Findex sought to represent. This avoided having to hold large inventories, particularly on speculation – i.e., hoping that a customer wants what you have in store and is prepared to pay your price, whether that price is simply a margin requirement or strives for what the market will bear.
The ‘buy-side’ model is also based on the end user knowing what he or she wants. In this case, it was ‘builder-contractors’. So armed Findex knew what to look for and could draw inventory from a broad, if not the entire, industry supply sector.
As stated, it would have been nice to understand how things worked or why in those early years. But sometimes "ignorance is bliss", and with no more than a few hundred dollars in working capital (almost ample in those days), a ‘service-based’ business seemed the answer. The Findex ‘serve the builder’ market strategy was, therefore, so driven. Underwriting large purchases or warehousing supplies would have been out of the question. Financing such purchases didn’t come into the picture until almost two years later with the formation of Allwest Builder Buying Group, Inc. This was a complementary business that emerged, organized to underwrite ‘bulk purchases’ on behalf of participating builders, pooling their resources with improved buying clout – typically purchasing railcar or truck-loads (e.g., cedar siding) usually directly from a sawmill or remanufacturing operation.
The OpenStax interpretation parallels the French word 'entreprendre', meaning to ‘undertake or to do something’ – and to which the term ‘entrepreneur’ owes its roots. No one we know of had then or since fully addressed the ‘level-the- playing-field requirements of the Small, Independent Builder.
…Findex did that!
We will examine what Findex Purchasing and Allwest Builder Buying Group explicitly did in a minute and in future Posts. But first, I want to drill deeper into the overarching premise. I also want to move beyond the assumption previously revealed − i.e., Harvard Business School's definition** of entrepreneurship:
“…the pursuit of opportunity beyond resources controlled.”
**Professor H. Stevenson
Accepting that the process is one of identifying and acting on an idea or problem that no one else has identified, it can be concluded that the steps to be taken also involve strategies, techniques, and mechanisms to capture the whole idea (or at least as much as possible). I liken this to what was previously described as ‘harnessing opportunity’, symbolized by Jost Amman’s 1568 ‘Harness Maker’ Woodcut.
I see the Harnessmaker’s work as a metaphor for entrepreneurship. The woodcut shows a master craftsman, one that turns leather straps, straw-stuffed collars, assembled buckles, and other fittings into a system of restraints capable of controlling the power of a draft animal. With the end purpose in mind (plowed field or wagon trail), the harnessmaker created a ‘system’ that, once fitted, ‘inspanned’ the energy and power of the conscrip-ted draft horses or oxen. In like fashion, entrepreneurship takes control of an envisioned opportunity.
Unlike a traditional business approach that advances proven business methods or adopts pre-existing structures, entrepreneurship breaks new ground. It either establishes a unique solution to an existing problem or undertakes a fresh new business endeavour. Of course, this is not to say that traditional businesses can't do the same thing. It is just that when they do, they are being 'entrepreneurial', which is what we are encouraging.
So, what was novel and fresh about Findex Purchasing and the subsequent evolution of Allwest Builder Buying Group? First, it was the recognition that the requirements of the small independent builder and renovation contractor had yet to be addressed, not by anyone. Indeed, despite continuing challenges, most were still burdened by operational inefficiencies, lack of organization, limited resources and, most assuredly, inadequate ‘purchasing clout’. This dilemma affected the 'small independent builder' sector pretty much as a whole.
With our precursor, ‘We’ll Tie-Up-Loose-Ends’ builder support service well underway (see July 1st Post), we had a front-row seat from which to witness what these builders were grappling with and their challenges, whether as job site inefficiencies, problematic purchasing or ill-treatment by suppliers and subdivision developers (e.g., not returning road damage deposits in a timely fashion) – with the results, at times, alarming, crushing those that became victims.
Also, from our ‘We’ll Tie-Up-Loose-Ends’ job-site seat, finding out who needed what and when was just a matter of course. We had an ongoing relationship with these builders, so gathering a set of building plans from each (half a dozen initially) was not difficult. This quickly determined how many doors, windows, or yards of concrete would be collectively needed over the next few months. And then, armed with this list, the next task was to go “Findexing”! I did that. Calling on suppliers who were only too happy to quote on pending orders, I soon returned to ‘match wits’ with these builders, most of whom did not take kindly to an upstart securing better pricing than they could… at least at the outset.
However, pride usually gave way to prudence fairly soon, and it was only a short time before Findex Purchasing Services Inc. was born. The proposition of:
“My hustling for the best deal while they stayed and supervised the job site(s)”
soon got legs. And, Findex was off and running. Well almost!
Although most did, not every supplier accepted our ‘buying on behalf of builders’ claim. …“Never heard of you, never heard of this kind of thing.” So, some legal research was required, establishing a contractual arrangement whereby builder-clients would formally engage Findex Purchasing Services as their exclusive (or select product/service) ‘Purchasing Agent’.
Making this possible were a few legal forms. First was a ‘Notice of Appointment’. This stipulated that Findex Purchasing Services Limited was authorized to negotiate terms of credit and make purchases on behalf of the undersigned. In conjunction, Findex created a series of ‘Requisition Forms’ covering a building’s main supply categories. There was one for Doors, another for Windows, then Concrete and Lumber, etc. Initially, as a ‘one-man band’, it was my task to recruit builders, sell them on the benefits of this unique program, and sign them up as ‘subscribers' to this industry-sector unique service. It was also my job to round up the suppliers, some of whom were very supportive, seeing Findex as an auxiliary sales outlet – so much so they offered commissions. Of course, these extra percentages were accepted… and then passed on to Findex builder subscribers.
It wasn’t long into this new venture that I learned not to do what everyone else was doing. Remember, this was late 1972 − and at that time, it was quite common to see a Window, Door, or Lumber Company Salesman parking on the street in front of a job site completing what is known as a ‘material take off’ on the hood of their Company Car − i.e., counting sizes and quantities. In bad weather, they’d be in their steamy car, hunched over the steering wheel, attempting the same. Very few company cars were air-conditioned in those days. Or, just as often, they would try to talk the builder into meeting them at a local coffee shop, which then had the Builder leaving their project unattended.
Findex had a solution. Converting ‘panel vans’ into Campers (or ?) was quite the rage then, so why not convert a few Window Vans into Mobile Offices? Within six months, several were on the road, a godsend to Findex’s growing number of Field Reps and the Builder-Contractors they served.
Custom-built to match the need (see Image), each featured a comfortable and well-organized mini-office space with a built-in Plan Grid storing the house plans needed on the Field-Reps route that day. Once the ‘Mobile Office’ was at the site with the Builder-Subscriber on board, a coffee, cold drink, or end-of-the-day beer (installed fridge) would be served, allowing all to relax as building plans could be reviewed. Matching material-supply requisitions would be approved, purchase orders completed, and when necessary, immediate order placement was made possible by the ‘auto-tel’ equipped mobile phone unit (rare in those days).
And it all worked. Word of mouth − helped by the #2 Pencil graphic label along the High Top, boasting "Sharpest in Town"− steadfastly grew the builder-subscriber base, boosting purchasing volume to where the business had to keep up.
Findex and its expanding list of independent builders soon formed a symbiotic relationship, so much so that when a builder took on a project in a neighbouring residential area or on the other side of the Municipal Region, Findex Purchasing was encouraged to follow. Once there − in many cases, large, multi-builder subdivisions – additional Builder curiosity was raised, particularly seeing the signage on the side of Findex’s new (1975), never before seen “Mobile Offices” – as again word of mouth stimulated further patronage.
In the next Blog Post, I’ll move on to Phase II and the entrepreneurial growth of that endeavour…
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