Bread and Butter - Part 1

I used to work for a small/mid-sized manufacturing company that made an incredible mistake.

The owner bought it when it was only worth $250,000/yr. He built it to a $14,000,000/yr company in only 9 years. It was exciting to work for a company in growth. The atmosphere was one of friendship and fun. All the employees knew each other, we liked each other, we worked as a team, we spent time with each other after work, we were proud to work for this company. And all of us liked and respected the owner, my direct boss (note: past tense). He was the first boss I'd ever had who I truly liked.

This atmosphere of friendship and respect extended to our customers as well. We knew our customers by first name. Many of us built friendships with our customers. We invited our customers to barbeques, pot lucks, and weekend sports bar hopping.

We suddenly started seeing big pretty carrots placed in front of our faces. We had three very large companies make wild claims about how much product they were going to buy from us.

The first of these big dog companies started to buy products. They bought no more than $10,000 a month and only averaged about $7,000. This only lasted 8 months before they disappeared completely. Their promise of $8,000,000/yr never materialized.

The second and third of these big dogs never bought even one unit. They spent months on prototypes (nonchargeable), retooling, branding and tweaking everything in sight. But not even one finished product went out the door to be delivered to them.

While these diamond encrusted carrots were being dangled in the face of the owner, he decided to put a minimum limit on all orders. Our friendly customers who only bought a few units a months were essentially told they weren't good enough for us. Even the customers who bought a fairly substantial amount of units were told it wasn't good enough.

After all, we were tooling up for mass quantities. How are we supposed to schedule a run of little guys when we're going to make all our profit from 3 big dogs?

We not only lost our bread and butter, we never truly got the big dogs. So after a 9 year run of growth and excitement, we fell from $14,000,000/yr to $8,000,000/yr in only 1 crushing year.

Do the math! How much were those little friendly guys worth to that company?

We lost our bread and butter....