>> THIS PROGRAM WAS MADE POSSIBLE BY A GRANT FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE RURAL DEVELOPMENT.

>> FROM A BUSINESS PERSPECTIVE AND FROM GROWING A BUSINESS, IT'S REAL IMPORTANT TO HAVE EVERYBODY'S INPUT, NOT TO HAVE IT WOULD BE FOOLISH.

>> AND FOR ME IT WAS ALWAYS IF I COULD JUST GET THAT BUSINESS PLAN DONE, BOY THEN I AM COOKING.

AND YOU GET TO THAT POINT, AND REALIZE IT WAS NOT THE FEELING OF WHAT YOU CAN DO, BUT IT WAS THE FLOOR OF THE NEXT LEVEL.

>> IN WRITING A FIRST BUSINESS PLAN WE PROJECTED THAT WE WERE GOING TO BE AT ABOUT $8 MILLION IN SALES AT THE END OF FIVE YEARS.

IT TURNS OUT WE DID THAT IN 18 MONTHS.

>> THERE IS A BALANCE BETWEEN GETTING PEOPLE WHO REALLY CAN TAKE THE RESPONSIBILITY AND RUN WITH IT AND MAKING SURE THAT THE JOB IS GETTING DONE PROPERLY.

IN THIS SOCIETY WITH ALL THE INTER-DEPENDENCIES THAT WE HAVE, I SEE MORE AND MORE ENTREPRENEURIAL TEAMS.

IN A WAY, WE ARE MISLEAD TO THINK THAT THE ENTREPRENEURSHIP IS SOME KIND OF A JOHN WAYNE ACT.

>> WELCOME TO VENTURING, I'M CAROL DILLON.

LAST WEEK WE LOOKED AT HOW SOME COMPANIES IDENTIFIED A NEED TO GROW AND CHOSE A FINANCIAL PATH THAT WOULD HOPEFULLY GET THEM THERE.

THIS WEEK WE ARE GOING TO VISIT COMPANY THAT IS HAVE ALREADY EXPERIENCED GROWTH.

SOME OF IT IS VERY DRAMATIC.

IT'S, PERHAPS, THE MOST DANGEROUS TIME FOR AN ENTREPRENEURIAL VENTURE.

BECAUSE OF THE TIME WHEN THE FOUNDER'S ROLE CAN MOST DRASTICALLY CHANGE, NO L NO LONF YOU A COUPLE OF LONERS IN YOUR SPACE.

YOU HAVE MARKETS TO RESPOND TO, AND IT'S ALL HAPPENING AT FASTER PACE AND ON THE GRANDER SCALE THAN EVER BEFORE.

HOW ARE YOU GOING TO HANDLE IT?

OATMEAL IS A GRATING CARD COMPANY FOUNDED BY HUSBAND AND WIFE TEAM JOE AND HELENE.

THEY HAVE GROWN FROM A TWO-PERSON HOME-BASED OPERATION TO A 24-EMPLOYEE COMPANY WITH THEIR OWN BUILDING.

LET'S SEE HOW.

>> THIS IS AN ALTERNATIVE GREETING CARD COMPANY.

AND WHAT WE DO IS WE DESIGN, CREATE, PUBLISH, DISTRIBUTE GREETING CARDS, AND POST-IT NOTES, AND MAGNETIC PADS.

GROWTH IS EASILY DEFINED BY SALES.

I THINK THAT A TRACK THAT'S EASY TO FLOW INTO IS THAT YOU CAN LOOK AT SALES AND SALES GROWTH AND SAY, THIS IS GREAT.

LOOK AT ALL THE SALES GROWTH, BUT WHAT IS IMPORTNT AND HAS TO HAPPEN AT THE SAME TIME IS TO BE LOOKING AT YOUR PROFITABILITY.

I THINK INITIALLY I THOUGHT THAT A SALES INCREASE, PROFITS INCREASE, IS SIMPLE, AND THAT'S THE WAY IT SHOULD WORK, BUT IT IS NOT THE WAY THAT IT WORKS.

AND SALES CAN GO UP AND PROFITS MAY NOT KEEP PACE.

WHAT'S IMPORTANT IS TO LOOK AT WHAT IT'S GOING TO COST TO HAVE THOSE INCREASED SALES.

ARE YOU GOING TO NEED NEW PEOPLE OR ANOTHER BUILDING, MORE EQUIPMENT?

ARE YOUR SALES AND MARKETING EFFORTS GOING TO BE STEPPED UP TO A LEVEL THAT MAY BE TOO HIGH?

AND I THINK THAT ALL THOSE ASPECTS ARE IMPORTANT TO KNOW THAT THOSE INCREASED SALES HAVE A COST.

>> I'VE BEEN GOING OVER SOME REPORTS, AND I NOTICED SOMETHING THAT I KNOW YOU ALSO NOTICE, AND THAT IS THE PREP COSTS ON THE PRINTING OF OUR CARDS HAVE BEEN GOING UP, AND I WAS WONDERING HOW YOU VIEWED THAT AND IF YOU SAW THAT AS A SHORT-TERM OR A LONG-TERM TREND.

>> THOSE CHARGES ARE RELATED TO WHEN WE SWITCHED OVER FROM REGULAR PAPER TO RECYCLED PAPER.

THE SYSTEM FOR TRACKING SALES VERSUS PROFITS IS YOUR INCOME STATEMENT, AND IF YOU HAVE A DETAILED ENOUGH INCOME STATEMENT, YOU JUST NEED TO LOOK AT THAT AND TO LOOK AT THAT CLOSELY.

AND TO LOOK AT ALL THE ITEMS ON THERE AND SEE WHAT IS HAPPENING WITH ALL YOUR MARGINS AND WITH ALL YOUR EXPENSES TO MAKE SURE THAT THOSE SALES ARE CREATING THE PROFITS.

>> THE OTHER ASPECT OF GROWTH, WHICH IS EXTREMELY IMPORTANT, IS THAT OF CASH FLOW, AND THERE REALLY ARE TWO RULES TO BUSINESS, THE FIRST ONE IS DON'T RUN OUT OF CASHING, THE SECOND ONE IS DON'T RUN OUT OF CASH MAKING SURE THAT YOU ARE DOING HAS ENOUGH PROFIT SO THAT THE FLOW AND TIMING OF THAT WORKS, SO THAT WHEN YOU ARE PURCHASING GOODS, WHENEVER YOU ARE OUTLAYING CASH IS, BY THE TIME THAT THE RECEIVABLES ON THE SALES COME IN, THERE IS NOT A PROBLEM IN WHAT'S HAPPENING IN TERMS OF THE CASH FLOW.

>> GROWTH MEANS ADDING PEOPLE TO YOUR BUSINESS BECAUSE YOU NEED YOUR COMPANY TO BE A FAMILY OR A TEAM, AT LEAST WE DO.

WE LIKE TO FEEL THAT WITHIN OUR COMPANY SO AS OUR COMPANY GROWS, WE NEED THE PEOPLE WITHIN OUR COMPANY TO ALSO GROW.

TO BE ABLE TO TAKE ON THE NEW CHALLENGES, THE CHANGES, TO BE ABLE TO TAKE ON THE CHANGES OF THEIR POSITIONS OR THE CHANGES OF THEIR RESPONSIBILITIES.

>> I STARTED WORKING THIS AREA AND GET THIS ATMOSPHERE, BUT WHEN I GET UP HERE AND TRY TO MAKE THE HEADLINE WORK, I CAN'T GET IT TO SEPARATE.

>> RIGHT.

>> THE INDUSTRY NEEDS TO REACT FASTER THAN THE BIG COMPANIES, HALLMARK, GIBSON, AMERICAN GREETINGS, THAT'S NOT THE LEAGUE WE ARE IN.

THAT PUTS MORE PRESSURE ON ALL OF US HERE.

BUT I KNOW THE FEELING THAT WE NEED TO GET ACROSS.

THE REST OF THE ROOM LOOKS SORT OF OMINOUS SCARY, DARK.

>> GOOD AFTERNOON.

OATMEAL STUDIOS.

SURE, WOULD YOU LIKE TO HOLD JUST A MOMENT?

>> THIS COMPANY IS A BUSINESS, AND IT HAS TO BE RUN LIKE A BUSINESS.

SO THERE IS A SERIOUS PART OF THIS COMPANY, BUT WE HAVE ALSO BEEN ABLE TO TAKE THE ASPECTS NOT AS SERIOUS AND TURN THEM INTO FUN.

FOR EXAMPLE, OUR BUILDING, WILL REFLECT THAT, WHEN WE FIRST BUILT THIS BUILDING, AND WENT THROUGH THE HALLWAYS AND THE WALLS WERE WHITE, AND I REMEMBER THINKING, WHAT ARE WE GOING TO PUT UP ON THE WALLS, AND JOE AN% I TALKED ABOUT IT A LOT.

WE DECIDED, LET'S JUST PAINT THE WALLS WITH WHAT WE DO.

AND I THINK THAT ALL OF THAT HELPS TO CREATE A HAPPIER COMPANY, AND ALSO REFLECTS WHAT WE DO HERE.

>> AND HELENE, BILL, AND CRAIG ARE GOING TO FILL US IN AS TO WHAT'S HAPPENING WITH THE CATALOG, AND WE'LL START OFF WITH HELENE.

>> FROM A BUSINESS PERSPECTIVE AND FROM GROWING A BUSINESS, IT'S REAL IMPORTANT TO HAVE EVERYBODY'S INPUT.

NOT TO HAVE IT WOULD BE FOOLISH.

SO ONCE A MONTH WE WILL HAVE A MEETING WITH EVERYBODY ATTENDING.

AND WE WILL HEAR FROM EACH OF THE HEADS OF OUR DEPARTMENTS.

AND WE GET A GENERAL OVERVIEW OF WHAT'S HAPPENING IN EACH OF THE DEPARTMENTS WITHIN THE COMPANY, AND WE WANT EVERYONE'S INPUT.

IT HAS BEEN PART OF THE SUCCESS FORMULA, PART OF OUR GROWTH, AND THERE ARE A LOT OF TALENTS AND ENERGIES HERE THAT ARE IMPORTANT TO THAT CONTINUED GROWTH, SO WE WANT THAT INPUT, AND WE WANT EVERYBODY'S INPUT TO HELP US CONTINUE ON A GROWTH PATH.

>> IT LOOKS LIKE THEY UNDERSTAND TWO VERY IMPORTANT ASPECTS OF SUCCESSFUL GROWTH.

THE BOTTOM LINE AND PEOPLE.

IT'S NOT ENOUGH TO CRUNCH THE NUMBERS.

IT'S INTERPRETING THOSE NUMBERS IN A WAY THAT RELATES TO THE DECISIONS REGARDING GROWTH.

AND THEY HAVE ESTABLISHD THE ENVIRONMENT THAT ENCOURAGES CREATIVITY AND PARTICIPATION, BOTH ESSENTIAL INGREDIENTS FOR AN INNOVATIVE, GROWING COMPANY.

AND HERE'S TO WOMEN WHOSE COMPANY REPRESENTS THE CLASSIC ENTREPRENEURIAL STORY.

LILISA MERTONNA AND HER PARTY FOUND A PRODUCT THAT NO ONE ELSE MADE.

THEY FOUND MANAGING GROWTH WAS AS MUCH AS STARTING THE COMPANY.

>> THERE WAS NOTHING THAT FELT OKAY TO WEAR AROUND MY BREASTS WHILE I WAS RUNNING.

IT STARTED OUT AS A JOKE.

I WAS TALKING TO MY SISTER ON THE TELEPHONE, AND SHE WAS PROMOTING THE SAME FACT AND SHE% SAID WHY ISN'T THERE A JOCK STRAP FOR WOMEN?

AND WE LAUGHED AND THOUGHT THAT WAS FUNNY, AND I HUNG UP THE PHONE, AND I SAID THAT'S NOT SUCH A DUMB IDEA.

WE TOOK TWO JOCK STRAPS AND CUT THEM APART AND SEWED THEM BACK TO GO AGAIN.

I WENT RUNNING IN THIS NEW PROTOTYPE AND HINDA RAN BACKWARDS WATCHING MY BREASTS TO SEE HOW MUCH THEY WERE BOUNCING, AND I SAID BOY, THIS FEELS REALLY COMFORTABLE, AND WE HAD OUR PROTOTYPE.

WE MADE 40 DOZEN BRAS, AND THAT WAS OUR FIRST GROWTH SPURT, FOR THE FIRST COUPLE YEARS IT WAS ONE LOGICAL STEP AT A TIME WITH A LOT OF EXPERIENCED PEOPLE'S INPUT.

WE KNEW WHAT WE DID NOT KNOW.

FUR SMART ENOUGH TO KNOW WHAT YOU DON'T KNOW, YOU CAN FIND IT FROM SOMEONE WHO DOES KNOW, BUT IF YOU THINK THAT YOU KNOW EVERYTHING, YOU PROBABLY ARE GOING TO BE DOING MORE MISTAKES.

>> YOU ARE IN TEXAS?

WHAT'S YOUR STORE NAME?

>> IN TALKING TO SBA AND GETTING OUR FIRST MAJOR LOAN WE HAD A BUSINESS PLAN, AND THAT SORT OF MADE US THINK WELL, WHAT'S OUR WORLD GOING TO LOOK LIKE IN THE FUTURE?

WHAT ARE WE GOING TO HAVE TO DO?

AND WE STEPPED DOWN AND TALKED ABOUT IT, AND WE MADE IT UP.

OUR BEST GUESS AS EVERY BUSINESS PLAN IS, THERE WAS NO BIG IMAGE OF CONTROLLING GROWTH.

WE JUST SAW THE NEXT STEP AHEAD OF US, AND WE WENT TO COMPLETE THAT.

FOR ME, IT WAS IF I COULD JUST GET TO THAT, YOU KNOW, IF I COULD JUST GET THE BUSINESS PLAN, THEN I AM COOKING, AND YOU GET TO THAT POINT, AND REALIZE IT WAS NOT THE FEELING OF WHAT YOU COULD DO, BUT IT WAS THE FLOOR OF THE NEXT LEVEL, AND YOU REALIZE THAT YOU ARE ON THE FLOOR OF THE NEXT LEVEL, AND SLOWLY YOUR HEAD RISES TO WHERE YOU HAVE GOT TO GO NEXT.

YOU HAVE TO ADD PEOPLE.

YOU HAVE TO BRING IN HELP.

YOU HAVE TO START DELEGATING.

YOU CANNOT BE WASHING THE COFFEE CUPS AND GOING ON THE SALES CALLS AND SENDING OUT THE PACKAGES.

SO THEN YOU ADD STAFF, AND YOU ARE A MANAGER.

YOU BECOME A MANAGER, AND AS MANAGERS YOU HAVE TO REALIZE THAT YOUR PEOPLE ARE YOUR RESOURCE.

THOSE ARE THE PEOPLE THAT MAKE THE BUSINESS RUN, AND YOU HAVE TO MANAGE THE SYSTEM WITHIN HOW THEY LIVE.

WHEN YOU ARE GROWING AND YOU ARE GOING THROUGH A GROWTH SPURT, PEOPLE SELLING, WE ARE ABLE TO DELIVER, PEOPLE ARE REALLY EXCITED AND IN A SMALL COMPANY YOU GET PEOPLE WHO WANT TO WORK AND CONTRIBUTE.

THE ADRENALINE PUMP CAN ONLY GO FOR SO LONG, AND THEN YOU NEED TO SAY HEY, LET'S, LET'S GET SANITY AND TRY AND FIGURE OUT HOW TO DO THIS BETTER AND TAKE THE TIME AWAY FROM THE SELLING AND THE MARKETING AND LET'S GET OUR HOUSE IN ORDER.

AND THAT WAS A VERY IMPORTANT YEAR.

OUR PROFITS WENT UP.

OUR PEOPLE SAW THAT AS MANAGERS, LISA AND I CARED ABOUT THEM.

>> WE ALSO WANT TO CHECK THE STRETCH ON THE SIDE.

WE HAVE HAD A PROBLEM WITH THAT IN THE PAST.

>> IN THE FRENZY OF GROWTH, YOU HAVE TO HAVE THAT PLACE OUTSIDE OF THE FRENZY THAT YOU CAN SAY, THAT'S WHERE WE ARE GOING.

SO WITHIN THE FRENZY YOU CAN MAKE THE PROPER DECISIONS.

THE VISION IS VERY IMPORTANT BECAUSE IT ALLOWS EVERYONE WHO IS CONNECTED TO WHAT YOU ARE DOING, TO UNDERSTAND WHERE YOU ARE GOING, WHY YOU ARE GOING THERE, AND WHAT THE PURPOSE IS.

SO WHEN EVERYONE, WHETHER IT'S A SALES REP ON THE ROAD, SOMEONE TAKING AN ORDER OR SOMEONE ANSWERING THE PHONE, THEY KNOW WHERE THE SHIP IS GOING, AND THEY KNOW THEY ARE ON THE SHIP.

AND IF YOU ARE A GOOD COMMUNICATOR, AS THE LEADERS, AS THE FOUNDERS, THEY WILL ALSO KNOW WHERE WE ARE GOING AND WHY.

OUR VISION, AND WHAT WE DO HERE IS THAT WE ARE THE LEADERS, EDUCATORS AND INNOVATORS IN WOMEN'S SPORTS UNDERWEAR, WITHOUT A VISION A COMPANY WILL GROW IN TOO MANY DIFFERENT DIRECTIONS AND FRAGMENTS.

A VISION IS THE BIG PICTURE, THE GUIDING LIGHT OF WHERE WE WANT TO BE WHETHER IT'S FIVE YEARS, TEN YEARS, NEXT MONTH.

THAT'S THE VISION.

AND IT KEEPS EVERYONE EVEN IN THE MIDST OF THE CHAOS AND THE ENTREPRENEURIAL FRENZY, WE KEEP TALKING ABOUT HERE, IT KEEPS THEM ALL HAVING A SENSE OF WHERE -- WHAT THE FINAL DESTINATION IS.

>> IT'S TRUE THAT GROWTH IN A BUSINESS CAN OFTEN FEEL CHAOTIC AND OUT OF CONTROL.

THAT'S WHY HAVING A CLEAR VISION OF WHERE YOU WANT TO GO IS SO CRITICAL.

GROWTH IS A CONTINUAL PROCESS, NOT A ONE-TIME EVENT, AND YOU NEED TO LEARN TO PLAN IN AND FOR THE CHAOS.

NOW, COMPANIES GROW AT DIFFERENT RATES.

IT'S REALLY UP TO YOU, THE ENTREPRENEUR, TO KEEP ON TOP OF IT.

ALAN NEWTON AND JEFFREY HOLLANDER MADE A CHOICE TO GROW THEIR COMPANY AS FAST AS POSSIBLE KNOWING FULL WELL THIS TYPE OF GROWTH WAS RISKY WHAT HAPPENED?

LET'S FIND OUT.

>> IN WRITING OUR FIRST BUSINESS PLAN WE PROJECTED HE WOULD CAB AT 8 MILLION IN SALES AT THE END OF FIVE YEARS.

IT TURNS OUT WE DID THAT IN ABOUT 18 MONTHS.

WE HAD TO MAKE A CHOICE, AND IN THE CATALOG BUSINESS YOU HAVE THAT CHOICE BECAUSE WE GOT AS MUCH BUSINESS AS WE MAIL CATALOGS.

WE COULD MAIL OUT MORE AND CREATE GREATER DEMAND OR REDUCE THE NUMBER OF CATALOGS AND REDUCE THE DEMAND, SO WE HAD TO MAKE A CONSCIOUS CHOICE, BUT GIVEN ALL THE CHAOS, GIVEN THE LACK OF SOPHISTICATION OF PURCHASING SYSTEMS AND GIVEN THE LACK OF SOPHISTICATION IN THE ORDER PROCESSING SYSTEMS, WE ARE GOING TO CONTINUE TO PUT MORE DEMANDS ON THIS FLEDGLING ORGANIZATION AND BUILD A BUSINESS AS RAPIDLY AS POSSIBLE, OR ARE WE GOING TO BACK OFF A BIT.

BUILD THE SYSTEMS INTERNALLY AND ONCE WE HAVE THE SYSTEMS BUILT, OPEN THE FUNNEL BACK UP AND ALLOW MORE ORDERS INTO IT.

WE CHOSE THE FORMER, WHICH IS TO TAKE WHATEVER BUSINESS WE COULD TAKE, WHEN IT WAS AVAILABLE AND GROW THE BUSINESS AS RAPIDLY AS POSSIBLE.

AND HANDLE THE OPERATIONAL PROBLEMS JUST AS AN ONGOING DAY-TO-DAY FUNCTION.

WE HAD TWO YEARS OF 750, 800%.

>> THE FIRST YEAR WAS A PARTIAL YEAR.

IT WAS ONLY FOUR OR FIVE MONTHS.

THAT TYPE OF GROWTH CREATES EXPECTATIONS IN THE FUTURE THAT ARE POTENTIALLY DANGEROUS TO A CERTAIN EXTENT BECAUSE WHEN YOU EXPERIENCE THAT, YOU THINK THAT THAT IS REALITY.

YOU THINK THAT KIND OF GROWTH IS THERE YOU, FOR IN PERPETUITY, AND IT'S NOT.

I MEAN, THAT GROWTH, EXCEPT IN RARE SITUATIONS, IS NOT SUSTAINABILITY OVER A LONG PERIOD OF TIME.

MANY PEOPLE GROW LIKE THAT, AND THEN AS THAT GROWTH SLOWS, GO OUT OF BUSINESS.

>> I THINK THE DOWN SIDE OF THE EXPLOSIVE GROWTH IS THAT IT IS JUST AS SCARY AS FAILURE.

THE EXPLOSIVE GROSSED GIVES YOUS YOU THE FEELING THAT THINGS ARE OUT OF CONTROL.

AND THE FEAR THAT ENGENDERS -- ALL OF A SUDDEN YOU WONDER, CAN I HANDLE IT?

DO WE KNOW WHAT WE ARE DOING?

ARE WE GOING TO SCREW THIS UP?

AND THE FEAR THAT COMES ALONG WITH THAT EXPLOSIVE GROWTH HAS POTENTIALLY A DESTRUCTIVE SIDE TO IT.

AND ONE OF THE THINGS THAT I THINK THAT I RECALL THE CLEAREST IS THAT ALAN AND I WERE BOTH SCARED.

>> IT DID NOT FEEL LIKE THINGS WERE OUT HE OF CONTROL.

THINGS WERE FLAT OUT OF CONTROL.

WE HAD NO IDEA WHAT WAS GOING TO HAPPEN THE NEXT DAY.

WE WOULD BE EXPECTING 300 ORDERS TO COME IN, AND WE WOULD GET 1500 ORDERS IN.

WE HAVE ENOUGH PEOPLE TO ANSWER 30 PHONE CALLS AN HOUR AND WE WOULD GET 350 PHONE CALLS AN HOUR.

AND WHATEVER WE DID, IT WAS NOT ENOUGH.

>> OKAY.

AS A MATTER OF FACT, I AM AFRAID THIS WILL BE ON BACK ORDER FOR ANOTHER COUPLE DAYS, AND IT WILL PROBABLY BE IN FIRST THING NEXT WEEK, AND WE CAN SEND IT OUT TO YOU AS SOON AS IT COMES INTO OUR WAREHOUSE.

>> PROBABLY ONE OF THE MAJOR REASONS THAT I BELIEVE THAT WE WERE ALLOWED TO GROW AS RAPIDLY AS WE WERE IN ADDITION TO HAVING THE CAPITAL, THE EXPERTISE AND THE PRODUCT PEOPLE WANTED, MOST IMPORTANTLY, MAYBE WAS THAT WE HAD THE BLESSINGS OF OUR CUSTOMERS.

>> I THINK THAT ONE OF THE REASONS WHY WE HAD THAT PERMISSION WAS WE WERE DOING SOMETHING THAT NO ONE ELSE WAS DOING.

IF THEY COULD HAVE GOTTEN WHAT WE HAD TO SELL FROM FIVE OTHER PLACES, THEY PROBABLY WOULD BE MUCH LESS INCLINED TO PUT UP WITH WHAT THEY HAD TO GO THROUGH TO BUY FROM US.

>> YOU ARE GOING TO G GROW A BUSINESS FAST, YOU BETTER BE SURE THAT YOU HAVE THE PERMISSION OF YOUR CUSTOMERS.

LET ME TALK ABOUT WHAT WE ARE DOING AND WHERE WE CAME FROM AND TRYING TO ACCOMPLISH, AND THEN HOPEFULLY AS WE GO ALONG OVER THE NEXT COUPLE OF MONTHS, YOU CAN LET ME KNOW WHETHER WE ARE HITTING WHAT WE SAY THAT WE ARE DOING.

>> WE PUT A HUGE AMOUNT OF EMPHASIS ON HIRING, IN THE EARLY DAYS I INTERVIEWED EVERY PERSON WHO CAME IN THE DOOR.

MAINLY THERE WAS A CERTAIN FEEL THAT I WAS LOOKING FOR, A CERTAIN KIND OF PERSON THAT I WANTED.

I WAS LOOKING FOR WHAT KIND OF JUDGMENT DO THEY HAVE.

WHEN YOU ARE GROWING RAPIDLY SOMEONE MIGHT HAVE ONE SET OF RESPONSIBILITIES TODAY AND A DIFFERENT SET OF RESPONSIBILITIES TOMORROW.

AND YOU ARE PLAYING IN A GAME WHERE THE RULES ARE CHANGING ALL THE TIME, AND COMMUNICATION ALL OF A SUDDEN BECOMES VERY IMPORTANT.

YOU HAVE GOT TO LET PEOPLE KNOW WHAT KIND OF GAME IT IS THAT THEY ARE PLAYING, AND YOU ALSO HAVE TO LET THEM KNOW AS THE RULES CHANGE, AND I THINK IT TAKES A REAL CLEAR COMMITMENT AND DEDICATION TO THE GROWTH IF YOU ARE GOING TO PUT YOURSELF AND EVERYBODY ELSE THROUGH IT.

BECAUSE YOU PAY A VERY HIGH PRICE FOR IT.

AND YOUR FAMILY PAYS A HIGH PRICE, AND YOUR FRIENDS PAY A HIGH PRICE.

EVERYONE WHO HAS ANYTHING TO DO WITH YOU PAYS PART OF THE GROWTH.

>> IT'S EASY TO SEE WHY TOO MUCH GROWTH TOO SOON HAS KILLED A LOT OF ENTREPRENEURIAL COMPANIES.

IF EVERYBODY ISN'T IN ON IT, CUSTOMERS, THE SUPPLIERS AND EMPLOYEES, GROWTH CAN BASKETBALL -- GROWTH CANBECOME LIKE A RUN .

IN OUR WEEKLY CHECK-IN, IN OUR START-UP AND PROGRESS, LET'S SEE HOW LORI AND PETER ARE COPING WITH THE CLASSIC ENTREPRENEURIAL HANGUP, DELEGATION.

>> I DON'T HAVE A LOT OF TIME FOR TRAINING PEOPLE, AND WE DON'T HAVE A BUDGET TO HIRE FULLY TRAINED PROFESSIONALS.

SO THERE IS A BALANCE BETWEEN GETTING PEOPLE WHO REALLY CAN TAKE THE RESPONSIBILITY AND RUN WITH IT, AND MAKING SURE THAT THE JOB IS GETTING DONE PROPERLY.

AS THE COMPANY HAS GROWN WE HAVE ADDED THREE NEW EMPLOYEES IN THE LAST MONTH.

CHARLIE IS GOING TO BE OUR SALESPERSON, AND HE'S CURRENTLY DOING EVERYTHING FROM COMING IN EVENINGS TO DO SOME CONSTRUCTION THAT NEEDS TO BE DONE ON THE PHYSICAL PLANT TO HANDLING THE PRODUCTION AND HELPING PETER TO DOING ORGANIZATIONAL WORK AND SHIPPING OUR UPS ORDERS.

>> SO YOU CAN PUT THEM IN THE SPINNER NOW.

>> BILL IS LEARNING THE SYSTEMS HERE, AND HE'S, I THINK HE'S REALLY GOT THE POTENTIAL TO BECOME A KEY PLAYER IN THE PRODUCTION SIDE OF THE BUSINESS.

HE'S LEARNING EXTREMELY QUIBBLE, --QUICKLY AND HE HAS THE RIGHT ATTITUDE FOR THE JOB.

BILL BRINGS A NEW PERSPECTIVE TO WHAT PETER IS DOING.

IT'S MY EXPECTATION THAT AS BILL LEARNS THE PROCESS, THE PROCESS WILL CHANGE.

>> GOOD MORNING.

SMITH AND POST.

>> JEAN IS OUR OFFICE STAFF.

SHE DOES EVERYTHING FROM BOOKKEEPING FUNCTIONS TO CONTACTING CUSTOMERS.

AND OCCASIONALLY, WRITING LETTERS AND DOING A LOT OF THE THINGS THAT NEED TO BE DONE THAT NOBODY ELSE HAS TIME TO DO.

DAN IS IN CHARGE OF OUR BUSINESS OPERATIONS.

HE'S OUR BUSINESS MANAGER.

HE RUNS THE FINANCIAL SIDE OF THE BUSINESS IN TERMS OF PRODUCING OUR FINANCIAL RECORDS, AND KEEPING TRACK OF THE ACCOUNTING AND BOOKKEEPING AND PUTTING TOGETHER THE MANAGEMENT INFORMATION SYSTEMS THAT WE NEED TO BE ABLE TO TRACK THE PROGRESS AND SEE HOW THE BUSINESS IS DOING.

>> OVER THE LONG-TERM, SYSTEMS WOULD BE THE KEY TO OUR BUSINESS RUNNING SUCCESSFULLY.

IF PETER WERE SICK FOR A MONTH RIGHT NOW, WE WOULD HAVE TO DO A LOT OF SCRAMBLING BECAUSE HE HOLDS A LOT OF THE PRODUCTION PROCESS IN HIS HEAD.

WE ARE AT THE STAGE RIGHT NOW WHERE WE ARE HAVING TO DEFINE THE SYSTEMS AND DEVELOP THE SYSTEMS.

WE ARE NOT AT THE STAGE YET WHERE WE CAN BE WRITING SYSTEMS DOWN AND SAYING, THIS IS THE WAY THAT IT IS.

THINGS ARE STILL IN FLUX.

BUT, WE ARE LEARNING WHAT IT IS THAT WE NEED IN THE WAY OF SYSTEMS.

EVERY TIME THAT THERE IS A BREAKDOWN OR SOMETHING GOES WRONG, IT GIVES US THE OPPORTUNITY TO LOOK AT THE SYSTEM ALREADY IN PLACE AND UNDERSTAND HOW TO IMPROVE AND ENHANCE IT.

EVERYBODY IS EMPOWERED IN THEIR DAILY ACTIVITY OF THE BUSINESS TO FIND WAYS TO INCREASE THE PRODUCTIVITY AND TO INCREASE THE SALES AND TO WORK TOWARDS THE GOAL OF BETTER PROFITS, WHICH MEANS PRODUCING MORE PRODUCT WITH LESS ENERGY AND LESS EFFORT AND LESS MATERIALS, AND INCREASING THE SALES.

>> MANY OF THE ENTREPRENEURS I HAVE DEALT WITH HAVE TOLD ME THE SAME THING, AND IT'S TRUE, THAT THE CREATIVE FORCE THAT SPAWNED THE BUSINESS WAS OFTEN SUBJECTIVE, AND AS THEY GREW THEY HAD TO FIND A WAY TO OBJECT LOOKAT IT AND WRITE IT DOWN.

OUR FINAL VISIT IS WITH MAN WHO WEARS MANY HATS, AUTHOR, TEACHER, ENTREPRENEUR AND ENTREPRENEURIAL EXPERT, JUST TO MAKE A FEW.

HE IS CARL SAMSON, AND HE'S BEEN STUDYING ABOUT AND TEACHING ENTREPRENEURSHIP FOR YEARS.

HE HAS SOME INTERESTING THOUGHTS ON GROWTH AND ON THE CHANGING ECONOMIC ENVIRONMENT WE LIVE IN.

>> THE FIRST THING THAT YOU NEED TO RECOGNIZE IN ANY VENTURE WHEN GROWTH STARTS, AND IT CAN START RAPIDLY AND REALLY RUN AWAY FROM YOU, THAT YOU ARE GUIDING FINANCIAL YARDS NEEDS TO BE THE CASH FLOW STATEMENT.

YOU CAN FORGET ABOUT THE BALANCE SHEET AND PROFIT AND LOSS BECAUSE THE CASH FLOW STATEMENT, BASICALLY, TELLS YOU WHAT'S IN THE CASH BOX AND WHAT'S GOING TO GO OUT.

AND SO YOU NEED TO HAVE A VERY GOOD FINANCIAL CONTROL SYSTEM TO MANAGE YOUR INS AND OUTS, VERY SIMPLE.

>> YOU WOULD BE AMAZED HOW FEW PEOPLE DO REFERENCES.

ON EACH OTHER.

WHEN YOU SIGN UP A DISTRIBUTOR OR A PARTNER IN CALIFORNIA, YOU ARE IN THE NORTHEAST, AND YOU MIGHT HAVE DINNER, AND YOU MIGHT HAVE EVEN A DAY'S MEETING, AND YOU ARE VERY EXCITED ABOUT THE OPPORTUNITY.

YOU ARE TOTALLY FOCUSED ON THE PRODUCT OR THE VISION OF THE COMMERCIALIZATION OF THAT PRODUCT, AND THERE IS A HIGH ATMOSPHERE AND EVERYBODY IS HAPPY AND YOU END WITH A NICE DINNER WITH A GLASS OF WINE AND STUFF LIKE THAT, BUT DO YOU REALLY KNOW HOW THAT GUY IS MOTIVATED?

DO YOU REALLY KNOW THAT A YEAR FROM NOW HE MIGHT DROP YOU FOR SOMEBODY ELSE WHO COMES ALONG OR DO YOU REALLY KNOW THAT HE'S JUST DOING THIS, SO HE UNDERSTANDS HOW YOU ARE DOING IT AND HE WILL COME AND ENTER HIS OWN PRODUCT AND COMPETE WITH YOU.

SO MY ADVICE AGAIN IF YOU ROLL OUT, IF YOU GO INTO GROWTH, UNDERSTAND THE CRITICAL PEOPLE WHO ARE IN YOUR GROWTH.

IN THIS SOCIETY WITH THE INTER-DEPENDENCIES THAT WE HAVE, I SEE MORE AND MORE ENTREPRENEURIAL TEAMS.

IN A WAY, WE ARE MISLEAD TO THINK THAT THE ENTREPRENEURSHIP IS SOME KIND OF A JOHN WAYNE ACT.

IT MIGHT HAVE BEEN IN SOME DECADES, BUT IN OUR TIMES IT IS NOT AN LONGER, EVEN LEE IO COCA, WE THINK HE'S BRILLIANT, HE TURNED A CAR COMPANY AROUND BUT THE PEOPLE WHO READ THE BOOK WILL SEE THAT HE CREDITS A VERY LARGE TEAM OF EXTREMELY ENTREPRENEURIAL PEOPLE.

>> SO IN THE LIFE CYCLE OF AN ENTREPRENEURIAL VENTURE, INTEGRATION NEEDS TO BE CONSTANTLY ATTENDED TO AND FROM WHAT I CAN SEE, LACK OF ATTENTION TO IT HAS BEEN THE DOWNFALL OF MANY, MANY START-UP VENTURES.

IT'S SO EASY FOR US TO SEE YEAH, THIS NEEDS TO BE PRODUCED, OR YES, THIS NEEDS TO BE FINANCED.

IT'S MUCH LESS IN OUR NATURE TO SAY, HEY, THIS TEAM NEEDS TO BE FORMED, NURTURED AND MANAGED AND ATTENDED TO AND STROKED AND MOTIVATED AND COMPENSATED.

YET, IT IS A VENTURE TEAM, THE INTEGRATED VENTURE TEAM THAT MAKES ALL OF THE PRODUCTION AND ALL THE ADMINISTRATION AND ALL THE ENTREPRENEURIAL ACTIONS POSSIBLE.

>> THE WORLD IS CHANGING.

WE NEED TO STOP FIGHTING THE TREND TOWARDS THE ENTREPRENEURSHIP, AND AT THE SAME TIME, CREATE A SOCIETY THAT ACTIVELY SUPPORTS THAT.

AND WHEN WE TALK ABOUT TO STOP FIGHTING, WE ARE TALKING ABOUT THE FACT THAT WE ARE LOSING JOBS TO EASTERN EUROPE AND THE PACIFIC AND THEY CAN DO MANUFACTURING THINGS CHEAPER THAN WE CAN.

WHEN I SAY THAT WE HAVE TO START SUPPORTING IT, WE HAVE TO RECOGNIZE THAT WE ARE AN INCREDIBLY INNOVATIVE AND TECHNOLOGICALLY ADVANCED NATION, AND THAT'S WHERE WE SHOULD PUT OUR EGGS, IN THAT BASKET.

WE SHOULD SUPPORT ENTREPRENEURSHIP WHOLE HEAR WHO, THE REALITY IS THIS SOCIETY IS A VERY ENTREPRENEURIAL SOCIETY.

>> WE DO NEED TO CHAMPIONSHIP.

CAN YOU THINK OF ANY COMPANY THAT WAS NOT STARTED BY ONE OR TWO INDIVIDUALS WITH AN IDEA AND A PASSION?

IT HAS BEEN DOCUMENTED THAT IN THE LAST DECADE, THE NUMBER OF JOBS CREATED BY CORPORATE AMERICA HAS DECLINED DRAMATICALLY.

WELL, THOSE CREATED BY SELF-EMPLOYED AND SMALL BUSINESS HAVE RISEN MARKEDLY.

TONIGHT WE SEE HOW SEVERAL ENTREPREEURS HAVE HANDLED GROWTH IN THEIR COMPANIES.

WE HAVE SEEN THE IMPORTANCE OF ACCURATE FINANCIAL DATA IN CHARTING YOUR COMPANY'S COURSE.

HOW A CLEAR COMPANY VISION CAN HELP YOU THROUGH CHAOTIC TIMES ALONG WITH YOUR CHANGING ROLE AS THE COMPANY GROWS.

WE HAVE ALSO SEEN HOW CRITICAL YOUR EMPLOYEES ARE TO GROWTH, AND NEXT WEEK WE ARE GOING TO VISIT SOME ENTREPRENEURIAL COMPANIES WITH INNOVATIVE PEOPLE POLICIES AND DISCOVER HOW TEAM BUILDING REALLY WORKS.

YOU CAN'T DO IT ALONE.

AND THAT IS VENTURING.

I'M CAROL DILLON.

SEE YOU NEXT WEEK.

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