In late 2004, I decided I wanted to try my hand at company ownership. Originally, I thought I would buy a manufacturing business and then add an engineering component. Through the help of a business broker, my wife and I visited several manufacturing companies that were for sale. In fact, we got awfully close to purchasing one when it dawned on me that I was an engineer who knew a great deal about running an engineering organization but nothing about running a manufacturing business. I guess I got cold feet. But I still had the itch to run my own company. So, after some coaxing, I convinced my wife to go into business with me and start an engineering company. My wife has always been a good sport and supportive of me and my career aspirations. But neither of us was fully prepared for what we agreed to take on.
In April 2005, we founded KTM Solutions, an engineering company that was initially established to support the aircraft industry, where I had spent the majority of my career. Later we expanded into the production support company that we are today. In the early months of 2005, I sought the counsel of several prominent businesspeople and career coaches to help me work through the steps to starting a business. The Clemson Small Business Development center was a huge help. They taught me the importance of a thorough business plan. Like my other advisors, they stressed the importance of my commitment to make this happen and told me to expect challenges. My thinking: How hard can it be? I had run engineering groups of hundreds of people. I just wanted to run a small business, under thirty people.
The engineering, organizational development, and hiring were easy. After all, that was what I had done most of my career. However, prior to this experience, I had never had to sell anything, develop a market strategy and plan, or truly feel the weight of profit and loss. If you are like me when I was starting out, you might think you can parlay what you know extremely well into a business, viewing the situation almost through romantic eyes and believing that the “other stuff” will just happen because you are so good at the service or product you want to provide. If you are considering starting something and your thinking is similar to mine, you’d better think again!
I was told once that 75% of all start-up businesses fail in the first year. Of those that make it through the first year, 75% will fail in the first 5 years. (see note 1) Obviously, these are not great odds. But nobody who starts a business believes they will be in the “unsuccessful” or “failed” business category. I am convinced that KTM Solutions survived and made it primarily through the grace of God. Yes, we did a lot of the right things and we worked hard, but we also made a TON of mistakes and poor business decisions, primarily out of naivety.
Have I sufficiently deterred you from taking the plunge? If not, there are some things you can do to better your chances of making it. I am happy to share the good things we did that I believe helped us.
- Develop a business plan that covers all aspects of running your business. Include the things you do well and the things you do not understand. What do I mean, the things you do not understand? I am talking about all the other things that come with business ownership that aren’t a part of the product or service you are offering (the thing that you do best). Make sure you think those elements through. Find someone in your circle who understands those areas. Get them to help you craft the plan.
- Develop a plan for huge success but prepare for the worst. Your business plan will include a market and sales forecast that you might as well assume is guaranteed to be wrong. Nothing comes together as quickly as you think it might. Sales and market development takes time. Plan for and expect success, but make sure you know how to handle the downside.
- Hire people who are qualified to perform the tasks outside your core competency and learn from them. Consider fractional relationships where you contract with specialists to help you build. They are worth every penny.
- Make sure you have adequate funding to weather the startup. Generating cash and profit takes time. For us, KTM Solutions did not meet profitability goals for almost two years.
- Remember that you need to have time to work “on the business” as well as work “in the business.” Most new small businesses have little budget for a staff, and the owner(s)/founder(s) have to do most things themselves. Hiring fractional support will help. In addition, you must avoid the temptation to put all your energy into serving your customers. You have to reserve time and energy to make your business run well and efficiently. If you neglect this, you will eventually burn out because you are trying to accomplish too much by brute force.
To leave you on a positive note, KTM Solutions will celebrate 16 years in business in 2021. We continue to grow and evolve. We even added an internal manufacturing component several years back and continue to expand that service. Recall this was an area that gave me cold feet 16 years ago. There have been challenges—plenty of ups and downs. But I am glad we took the plunge. I believe it was purely by the grace of God that we survived some of these naïve business mistakes. Nothing makes my heart happier than seeing a business succeed. Nothing disappoints me more than seeing a business close, especially knowing the emotional energy and financial investment the owners had to make. If you are a risk taker and decide to go into business, go into it eyes wide open. In addition, if I can help you, I am more than willing. Be committed, get help from trusted advisors, and make your mark.
(Note 1) The statistics provided in this article were quoted to me by several advisors when I started my business in 2005. The following information was published in Entrepreneur (https://www.entrepreneur.com/article/361350) on January 3, 2021: “According to data from the Bureau of Labor Statistics, as reported by Fundera, approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed. By the end of the fifth year, about half will have failed. And by the end of the decade, only 30 percent of businesses will remain — a 70 percent failure rate.”
Paul V. Kumler, P.E., is president of KTM Solutions, an engineering company that services the aerospace and large-scale manufacturing industries. In addition to aero structures engineering services, KTM Solutions designs and builds tooling supporting a broad clientele and various industries. (www.ktmmechanical.com) The company is headquartered in Greer, South Carolina, with remote offices in Charleston, South Carolina. Mr. Kumler serves in several volunteer roles including the SC Aerospace Advisory Board. Mr. Kumler, a professional engineer, is licensed in Louisiana, South Carolina, Texas, and Washington. He is married to Ginger A. Kumler. Together, they have two grown children and three grandchildren.