Big Red Car here. Ahhh, back to the great times in the ATX, y’all. I know you’re jealous. Who wouldn’t be?
Going to be 76F today. Ahhh, on Earth as it is in Texas! The ATX.
So The Boss was talking with one of his brilliant CEOs who took his advice and bought an Old Economy company and transformed it into a New Economy company. Oil Patch company.
The company was providing pumps to the Patch which were in demand for the business of fracking. Stuffing high pressure substances into the ground to fracture the rock and let the oil flow to a recoverable position. Some of this fracking is so powerful and effective that it is unleashing recoverable oil two or three times as high as the original wells were considered to be. These were good wells. Also, it is useful in the shale.
Texas joke: “I once fracked a well in the shale on peer pressure alone!”
The Texas boom is built on oil, shale, directional drilling, fracking and effective regulation. It is real and it is big.
The CEO had bought this Old Economy pump supply company and dragged it kicking and screaming into the New Economy — read how to do this here.
He streamlined the business, got right with Vision, Mission, Strategy, Tactics, Objectives, Values and Culture. He did some hard work but he was a very experienced business guy and it came to him easily. Hey, he did the freakin’ work and it wasn’t rocket science.
Then he got them on the web and developed a social media presence. Didn’t go overboard but made damn sure you could find him. [Sayeth the Big Red Car: “This Interwebs stuff could be big!” Hey, Big Red Car, shut up.]
He wandered around the Oil Patch and called on oil field service companies, drillers and drill sites (fracking included). His product line included every kind of hose, belt, valve, fitting you could imagine. All the hoses were custom made on demand.
His special sauce was immediate delivery because when a drill bit stops turning or a pump jack stops jacking somebody’s losing a lot of money. He gets paid handsomely for his instant gratification including a premium price for the product and a profitable delivery price for “hotshotting” it to the work site.
He even developed a mobile fleet of trucks that could make a hose of any type on the spot. When he sold someone a hose, he would make a couple of extras and they would often buy three when they only needed one. Margins were excellent.
As he began to do this work, he developed a list of his most commonly sold items — hoses, belts, valves, fittings — and made them for inventory on a second shift at his headquarters. He inventoried these and put the most common and highly demanded ones on his mobile fleet (five trucks only but big van trucks).
Bottom line: by going Old Economy to New Economy and following his new strategic initiative, he took a company that was barely making a profit to one that is making over $3.5MM annually. That’s profit, y’all.
Don’t get me wrong, it didn’t happen over night and it didn’t happen just because he pencil whipped the strategy. It took a lot of old fashioned “doing” and garden variety “hustle” but he did it. He also broadened his AO (area of operations, an Army term) from just Midland to include other markets in Texas.
The growth continues.
So, why is a Big Red Car telling you this story?
Because every great business triumph doesn’t have to include a unicorn. You don’t have to be Instagram or Twitter — you can just be a guy making $3.5MM a year because you’re a damn hard worker, a good businessperson, come to work early, stay late, work hard and use your big noggin to transform an Old Economy company to a New Economy company and get in the way of a wave like the freakin’ Texas Oil Patch.
This guy pays his taxes, saves his money and is going to be rich in just a few years. All because he saw the opportunity and acted upon it. No unicorns.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. If you need some help on a business or a startup, call The Boss 512-656-1383 or [email protected] Tell him a Big Red Car sent you. Be good to someone who you don’t like. He’ll be trying to figure it out all weekend.