Do You Really Want All The Business You Want?
Do you really
want all the business you want? Seems like a fairly simple question, doesn’t it? If you are
like most business executives or owners, the answer seems
equally simple. At least at first. But as Jack McClung will
tell you in his new book, getting all the business you want
is not always a good thing. Sometimes it can be devastating.
If you don’t know the name McClung,
then let me tell you a bit about the man and why you should
listen to what he has to say. Jack McClung is the founder of
Blue Stuff Inc., the almost magical topical analgesic that
hit the market about 6 years ago. How he came up with Blue
Stuff and how he parlayed that into a major fortune in
record time is the subject of a new book, due out in the
summer of 2005 entitled "Zero to $98 Million in 30
months."
There is an excellent reason for the
rather catchy title. The simple and well-documented facts
are that from the moment that Jack sold his very first
bottle of Blue Stuff out of an old brick house on 23rd
Street in Oklahoma City, within 30 months he had sold $98
million worth of product. And he did it bottle by bottle to
individuals, not by bulk orders or sales to huge retail
chains.
So what, you say. Who cares if it’s
bottle by bottle or to a retail giant, $98 million in sales
is $98 million, right?! Of course. But it is interesting to
note how it was done. But if you want to know more about how
to make millions of dollars a month from a stand-still start
and what self-respected executive doesn’t, you’ll have to
wait for the book. That’s not what this article is about.
The fact that Jack accomplished such a
feat and made millions of dollars is one thing. As we said,
you can learn how he did it and get a good perspective on
your business by reading his book. What we are concerned
with here is our natural desire for growth and the inherent
dangers that unprecedented uncontrolled growth can bring.
After all, you cannot go from zero in sales to ninety eight
million dollars in just 30 months without some major
problems, or without learning some real lessons. I can tell
you the book is not some simplistic cursory treatment of or
a lame biography of Jack McClung’s life. This book is a hard
core how-to-do-it. While the book does have some good very
insightful and sometimes funny episodes of his life, it is
also one of the best examples of how to and how not to build
a business. To give you an idea of how the writing of this
book was approached, let us give you an excerpt from the
introduction.
"If you have read some of the ‘how
to make a million,’ books out there, as I have, then you
know there is usually one critical thing lacking in most of
them, and that is the ‘how to do it!’ This is especially
true of the biographies of successful people. The story
usually starts with something like: ‘Fred opened his first
store in Smallville in 1967, with dreams of greatness and
becoming the best shoemaker in the state.’ The next sentence
is similar to: ‘In the next five years Fred had opened 15
shoe stores in 3 states with annual sales of over $5
million.’
That kind of in-depth and hard core
reporting just makes you want to run screaming from your
over worked, understaffed, low sales, debt ridden office and
demand your money back for the book, doesn’t it? I know it
always did me. When I run across this kind of book or even
magazine or newspaper article, I just wanted to find the
writer and clutch him around the throat and say, ‘Good for
Fred.... Now how the heck did he go from one store to
fifteen?’ After all, that’s why you bought the book isn’t
it, to learn how it is done and what you can do to start and
or grow your business? That is why I always bought them. And
I have to admit I am continually disappointed with the lack
of detail and the way the writer handled the road to
success. So, you have my promise I will not to do that to
you in this book."
Now that you have a little bit better
idea of what to expect in the book, let’s get back to the
main reason for this article. Let’s start with a simple yet
real example of what we are talking about here. Jack had a
small business. He had his doors open for about three months
and is selling about ten to fifteen bottles of product a
day. Enough sales to pay the bills, but that’s about all.
But today is different. Today he decides to do some
advertising. Again, the kind of advertising and how he came
up with the ideas are in the book, but you might imagine
that it was creative and different.
The advertising idea worked and the
next day he sold thirty bottles. Pleased with the results,
he decides to do it again. Again the ad scheme works and the
following day he sells fifty bottles. Keep in mind this is a
true story. So far so good, right? Jack thought so too. So
he decides that the advertising is working well, and he
orders double the amount of product from his supplier and
increases exposure in the ad. Again it works well and within
ten days, he is up to nearly two hundred bottles a day. Now
some problems start. First his supplier. He calls and asks
them about their capacity. "Not a problem," he is told. "We
can make as much as you want." said the supplier. Since Jack
invented the product and has a patent on it, he wasn’t too
worried about competition or someone else trying to horn in
on his action. At least at this stage of the game.
But there are now personnel problems
as well. He is not selling ten or fifteen bottles a day
anymore. Now he is selling nearly three hundred bottles a
day and most of it by mail. That means it’s more than he and
his wife can handle alone. He needs people to answer the
phones, to pack , address and mail product. He needs people
to enter names of customers into the computer data base and
people to process credit cards and checks. And he needs
those people immediately as orders are continuing to come in
daily and are growing in number and starting to stacking up.
What’s more, there will be three hundred again tomorrow.
Maybe more! And more the day after and more the day after.
Are you beginning to see the picture?
The solution was not all that easy
either. Think about. By the time you advertise for help,
interview possible candidates, possibly check references,
negociate salary, have them give notice at their present job
and come to work for you, and even given that you did all
that on the fast track, you have piled up about four
thousand more orders and getting further behind everyday.
Not a good situation for a new employee to walk into on
their first day on the job.
Then you call your supplier back, who
you will remember told you that ‘there is no problem, they
can make as much as you need,’ and tell them that orders are
up and you need want to be safe, so you want one hundred
thousand bottles by next Friday. You hear a funny choking
gasping sound and your trusted supplier tells you that for
an order that big, he would need about a month to fill it.
You remind him that he said, ‘no problem, all you want.’ He
says, we can do it, just not that fast. But the orders are
piling in now by the hundreds a day.
If you are thinking to yourself, why
not just stop advertising and slow it down, we can tell you
that Jack thought of that one. He did pull the ads, but the
orders didn’t slow down very much. Why? Well for a reason
and a goal that every sales organization hopes and prays
for, but seldom sees. After a couple of months of being in
business and selling Blue Stuff, the product was so good
that the re-orders started pouring in. And brother, did they
pour in. A bottle of Blue Stuff if used daily, as was the
case by chronic pain sufferers, needed to be replaced about
every 30 to 45 days. Re-orders were nearly eighty five
percent of original of new orders. That is an amazing fact
in itself, and of course caused more problems. Now people
were calling and writing 24 hours a day to get their Blue
Stuff and Jack needed some professional help in the way of
answering phones, credit card handling and shipping.
Investigating companies who do that and choosing the right
one took more time. Time that Jack and his meager,
overwhelmed staff didn’t have.
Personnel problems continued to plague
Jack and his company. They needed help so badly that Jack
and his staff were literally stopping pedestrians on the
street and asking them if they needed a job. Hiring people
off the street can have it’s own problems. Because manpower
was needed so badly, the new recruits were tossed into the
fray with little or no training, that in itself caused
problems. In a given day perhaps 3,000 orders would come in,
but the staff could only process 2,300 of them. Afraid that
they would get in trouble for not getting all the orders
out, the staff would hide the remaining 700 orders with the
intent of getting them tomorrow. Problem was, there would be
3,300 orders the next day, and the staff would again hide
the unprocessed orders.
After a few weeks of this, Jack
started getting calls from customers wondering where their
bottles of Blue Stuff was. It had been several weeks, and
nothing had arrived. Jack investigated and to his horror,
discovered nearly 10,000 orders hidden in drawers, file
cabinets, boxes and some orders even thrown away, because
employees feared getting fired for unfulfilled orders.
We are going to jump ahead in this
little story a bit and tell you that within a few more
weeks, Jack did choose a telemarketing firm who also handled
the credit card processing and he chose a separate
fulfillment company to handle the shipping. With those
problem now seemingly under control, Jack decided that it
was time for the next step up. So he re-started the
advertising campaign, this time on a national scale. Orders
jumped to over five thousand a day within a week.
Could his supplier handle it? Yes, by
that point, the supplier had caught on to the increased
numbers and were making plans to keep up. But they were now
making a critical mistake themselves. The orders were coming
so fast and frequently from Jack, that the firm doing the
manufacturing was having their own problems trying to hire
staff and keep up. They were managing to keep abreast of
demand from Jack, but the they had another worry. So much of
their resources were being used or spent on Blue Stuff
manufacturing that they were ignoring their other customers.
Too much of the supplier’s resources were being used in one
place and they were falling behind with their other
customers.
Could the telemarketing firm handle it
as they said they could? No, they couldn’t! Despite their
repeated assurances that they could handle the amount of
business, as it turned out, Blue Stuff overwhelmed their
resources too! The telemarketers had over 50 phone positions
and nearly 500 incoming lines, but when Blue Stuff was in
its full swing advertising, 500 phone positions couldn’t
handle the work load at the peak times. Fulfillment did not
seem to be a problem, but that was about the only place that
was not in trouble. Fortunately, the fulfillment people had
handled large rush orders before and had a good idea of what
to expect. But when orders starting hitting 18,000 to 20,000
a day, even they were strained a bit.
Blue Stuff even got some personal
attention from the Post Office. When the Oklahoma City Post
Office reported to Washington that one customer was shipping
in excess of 10,000 packages a day through Priority Mail,
the Postal Service sent several special agents from the home
office to make special arrangements for Blue Stuff’s
business. It got to the point that the Post Office just
simply sent a semi-truck once a day to pick up the orders
from Blue Stuff. That was this particular truck’s only
mission.
And there is more, much more. In one
instance, when Jack changed credit card processing
companies, the growth of orders and money startled the new
credit card processor so badly, the company started to
believe that Jack must be involved in some kind of scam. In
what the card-processor called a ‘self-protection’ move,
they escrowed or confiscated is a better word, nearly half a
million dollars of Blue Stuff’s funds and refused to give it
to their customer. They just simply refused to pay Blue
Stuff the money, holding it against what they believe had to
be the inevitable incoming claims and massive returns. Of
course that never happened, Blue Stuff was legit, but
imaging the grief that caused Blue Stuff, having that kind
of cash flow interrupted without notice and without
immediate recourse.
Are you getting the picture?
Unprecedented uncontrolled growth can be almost as deadly as
no business at all. So, do you really want all the business
you want? Probably so, but now you might have the idea that
controlled orderly growth is the right way to do things.
Even though you hear and read stories of phenomenal growth
in the business world, you can now see, that growth on such
a scale can bring some giant headaches.
The whole story of how Jack McClung
built his empire, sold as of today over $200 million worth
of Blue Stuff product and solved most of the problems the we
have mentioned in this article are covered in detail in the
book. It’s a fascinating account of a man who made and lost
three fortunes in his life and went on to great glory and
later, unbelievable trouble with counterfeiters, knock-off
artists and even the Federal government. But, that’s another
story!
