After a couple of years in business for myself, I finally reached the expand-or-die stage without sufficient capital to take the next step: a new plant. Sure, I could have leased, merged, sold equity. If I’d listened to my bean-counter, I would have tried to renovate someone else’s old factory. Why not? Envelopes are not an image business. Your customers never stop by to check out your spiffy offices. But selling for a used model was not in my program. For three years, I hadn’t dared put my own name on the company for fear I’d go broke. Now that I knew I was going to make it, I wanted something that would be totally mine, from the ground up to the new Mackay Envelope sign on the roof. Besides, a single-level plant would be more efficient.
You pay for your thrills. Unfortunately, my bankroll did not match my dreams of empire. I wanted a $250,000 building, big money in those days. I had sufficient cash flow and credit to support a $175,000 building. The difference was what I actually calculated as the builder’s profit.
There was only one solution: persuade the builder to put up the building for me at cost. “I promise you that if you put up this building for me for $175,000, I will become the best salesman you ever had. I’ll get you at least five more buildings of comparable value in the next five years, people I know whom you don’t, people you won’t otherwise have a crack at. These guys are on the verge of expanding, too. I’m going to be the first one out of the chute. They think they’re going to let me make all of their mistakes for them. They’ll listen to me if I tell them what a hell of a job you did for me. Just keep one thing in mind: Five profits are a lot better than one.”
He agreed. But not exactly on my terms. In the first place, like most businesspeople, he had a constitutional aversion to doing anything at cost, so I had to come up with another twenty-five thousand dollars. In the second place, I had to “pre-sell” two of my buddies before he’d fully commit.
But there it was, the forerunner of the Tupperware party. In exchange for playing host, introducing my friends, and letting the salesman use me to peddle his goods, I got a free toaster, or in this case, a true factory discount.