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Larry Sutterer

THE UNEASY ROAD TO SUCCESS

Starting a DVBE (disabled veteran) and SB (small business) entity proved to be a major undertaking for Capital Flow’s officers, as many other small company entrepreneurs could also attest to their similar experience. However, building and maintaining the company quickly became an even larger and more complex challenge. There are many standard challenges every new business faces whether they are large or small. These include things like finding an office location, managing cash flow, hiring the right people, building a reputation, etc. What one might not immediately think of as a challenge is the mountain of paperwork associated with a business: getting an EIN, writing the business plan, developing staff job descriptions and job offers, ongoing financial accounting, applying for a bank account and line of credit, opening a point of sale and accounting software system, developing a line card, building inventory codes, and paying taxes are but a few of the paperwork demands.

Capital Flow struggled to get incorporated and approved to operate in California as both a DVBE and SB entity in 2013. Starting with nothing more than a two-way phone conversation, the officers transferred cash from retirement funds and initially worked out of their garages. One notable example was having a truck load of pipe delivered to a VP’s home garage and the two VPs used electric hand drills to bore many thousands of holes in the pipe so as to meet specifications for its use as part of an aerator system in a treatment plant. That was one of our first SB successes. We managed to get the pipe picked back up and delivered without a neighborhood complaint! Sales expansion necessitated the intense search for a warehouse and consumed an enormous amount of time and effort. Part of a huge open warehouse was rented, fenced off, and the associated yard cleared of tons of debris. Capital Flow moved in, and for the first time had a real business address. With only a bare concrete floor, a storage shed was trucked in, shelves torn out by the officers, the walls sheet rocked, and the outside painted. Bringing in water, comm, and electricity were next followed by construction of a restroom and conference/lunch room. Expansion continued with the build out of several more offices and only recently the former storage shed/converted office was trucked away.

Without a doubt, hiring competent staff proved to be our biggest challenge and remains one of the most critical undertaking of all we do. On the negative side we saw it all: staff coming to work under the influence of drugs, others could not get to work on time, employee theft, no notice walk outs, etc. Each time finding a replacement consumed vast amounts of leadership’s time to recruit, orient/train, and do all the employment paperwork: set up their pay, PTO, sick leave, profit sharing etc. Later, hiring became an even bigger challenge as employees were offered: an IRA plan, medical insurance, along with dental, and vision benefits. Despite the headaches, the critical importance of building a strong, caring staff is they contribute, in large measure, to the company’s reputation for superb customer support which Capital Flow has. Customer service has been and remains job one for this DVBE/SB company! It is our “above and beyond” customer service that allows us as a SB to compete successfully against dozens of corporate giants.

Another huge challenge is cash flow and it is addressed in every Management Meeting, as well as, it is a frequent topic of phone and email conversations among the officers. Supplying construction material to contractors and getting paid have built in delays. Capital Flow initially buys and delivers the material to contractors and then pays the suppliers. The contractors do the work for which they subsequently get paid often on a delayed timeframe. Once paid, the contractors in turn pay us for the material. Careful and frequent inspection of accounts receivable occurs. To cover the built in payment delays, as the company grew, so also did the need to increase our line of credit. Compounding the cash flow issue are the ever increasing costs of vehicles, insurance, rent, salaries, etc.

Each day presents new challenges. Primarily, a water works company, it was noticed that there were tons of much smaller jobs the company could bid on as a DVBE business. Acting on that realization, a separate DVBE Branch was established, staff hired, and soon the 843 paperwork flourished. This is but one example of the primary reason for the successful growth of Capital Flow, i.e., a great leadership team reaction. Each officer has a leadership role and designated areas of responsibilities. We have learned to listen to staff, to motivate them, and to act with integrity. We enforce superb customer service daily. As with every DVBE/SB business, we have learned from our mistakes especially when asking for forgiveness after the fact rather than knowing the up front associated permission that was needed. This is true in some areas more than others, for example, dealing with ever changing federal and state government regulations tops that list. Through it all, Capital Flow has become a shining example of great leadership and corporate success.

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