Whoever said “It doesn’t take money to make money” clearly never grew a business. We are business owners. We work for our employees and ourselves and we do it 24/7. Those entrepreneurial genes are in you too. This is why you started building a business, and you’re pretty good at it.
Even though our business was doing well, we wanted it to grow. To build something bigger. One day, a large defense contractor put out a request for bid. When I read the request, I got excited. I could do this! If I won, it would be the biggest contract I had ever secured from a defense contractor. I put together a plan, trying to work everything out. I estimated I’d need 20 new people. We wrote a proposal and submitted it.
Then all of a sudden, we received notification that we won the bid! It was for $20 million. The biggest contract I had ever won. I felt great! Like we could conquer the world! Reid Hoffman, founder of LinkedIn, said,
“An entrepreneur is someone who jumps off a cliff and builds the plane on the way down."
I jumped off the proverbial cliff. Now it was time to build the plane. I had to find 20 employees, all with security clearances. Fast. I would have to hire a recruiter. Then hopefully find the right people. And then get their security clearances transferred over to the client. Once completed, they would have to work a month before I could submit an invoice. Then the client would take 30 days to pay that invoice. I was looking at a $600K to $700K outlay before I would see the first check.
Maybe they would pay the invoice early?
“Nope,” was the response. “You signed the contract. That’s your responsibility.” I had to go out and get financing. My business was doing well, my personal credit was stellar and the Federal Government had never missed a single payment to me in years. How hard can this be? Lender after lender slammed the door in my face. “We won’t finance you.” One lender said, “We’ll finance you if you personally guarantee the loan.”
Put my home at risk? My retirement? My savings? They treated me like a used car lot. It was clear that lenders didn’t understand our business at all. I was out of options.
I called the Big Defense Contractor. I told them I couldn’t fulfill the terms of the contract. That was one of the worst days of my professional life. And something that’s that always bothered me. It stung. I knew I could do it. I could find the right people. I could deliver. But I didn’t have access to the working capital that I needed.
Eventually I grew my business and it was acquired. When I sold that business, we created Wave Crest along with other investors, who believe as I believe, that Federal Government contracts are secure and the companies on those contracts can and should be financed. They can tackle bigger projects, create more jobs, and positively impact the communities around them.