The evolution of a business: 31 years ago I started a water well drilling business with a homemade drilling rig and (I didnt know it then) about 1/2 the experience I should have had to begin such a venture. I was young and very idealistic and entered the venture predicated on the ideal that if you build a better mousetrap, the world will beat a path to your door. I had been working for a water well driller who had spent his entire life in the trade with a poor-boy business culture where if something broke that would cost $100.00 to fix it right, or you could slap it together haf-ast for $75.00, he was going to save the $25.00. I had as much to learn about business as I did to learn about well drilling and was truly as under-financed as a well-drilling venture could have been. I was 29 years old and was sure that honesty and integrity, coupled with the better mousetrap, would dissolve every barrier in my way and pave the road to success for me. Now I have to point-out that success was going to turn out to be a moving target, although I didnt realize that when I started. I thought I was starting a business where I would soon be working a couple of weeks a month and be living the good-life of financial excess. This was the first myth to be busted. Other myths were soon to follow in a chain of disillusionment as time moved on. The myth that my honesty and integrity would clearly distinguish me from other companies was the most painful myth to die before me. At 29 years old, and through my early thirties, I would present my bid with clear eyes and written guarantees, only to see my shyster competitor in his 50s bid more money for the same job, and then bait-and-switch the customer for even more money when the job was done - a phenomena I witnessed repeated dozens upon dozens of times. As time went on, I began looking for another business to get into with the hopes it would free me of my well drilling business. I designed a custom machine to manufacture well screen, the slotted PVC pipe that is installed in the aquifer to allow water to enter the well. It was a promising venture, with potential financial rewards far beyond that of my well drilling business. So off I flew into business # 2. Success, on a limited scale, was there. All I needed to do was expand the market to reach the promised land of the screen business financing me out of the well drilling business. Yes, thats all I had to do. But an odd thing occurred about then, my well drilling business, which had languished at around $250K gross per year for 8+ years, suddenly made a substantial upward turn in revenues. So, just to be safe, I added a 2nd drilling rig and tooling to my company and borrowed the money to build a new high-production computer controlled screen machine. With the extra rig I could continue to focus on the screen business eventually financing me out of the well drilling business, but the extra rig would provide a financial margin of safety in case the screen business didnt arrive at the promised land as soon as I hoped. How did I do all of this? SBA loan. A BIG SBA loan!!! Ah, good ole American debt, just standing on my shoulders 24/7. Well, as my fortune would have it, I encountered serious problems developing the high-production screen machine, and the project fell to the wayside for 2 to 3 years whilst I covered my SBA loan payments with the increased income from the expanded, 2-rig water well drilling company. After 3 years, my re-designed screen machine was finally put into production and the funds for that machine justified - well, sorta. The new computer controlled machine was fabulous, and produced screen at 4 times the speed of the previous manually controlled machine... which amounted to producing the same amount of screen per-year, in one-fourth the time (wait a minute, that wasnt the plan!!!). Meanwhile, ole C. Miller Drilling continued to grow with 2 rigs operating instead of one. Annual gross revenue was doubled!! $500K gross per year was the new average. The potential was still there for the screen business... the POTENTIAL!!! The screen machine produced an amazing $300.00 per hour operating - in services!! (no material cost). But my screen customers, the same companies that sell me my water well drilling supplies, were great to deal with locally where my purchasing power meant so much to them, but the stores further away were - shall we say - indifferent to the idea of doing business with me. The path to the screen business financing me out of the well drilling business would necessarily require these other well supply companies switching their business to me!! So there we were. And are. Then at about my 18th year in business, my nearest water well competitor decided to sell-out his business. It was another drilling rig and tooling, and another service rig. His presence had been a real thorn in my side for years ever since he quit me and went into business - only 15 miles away!! Well the price wasnt too unreasonable, so I jumped into ANOTHER loan to buy him out (what happened to the screen business providing me the way-out of the tormentuous well drilling business? I-D-K!!!). So the guy who wanted OUT of the well drilling business, now had 3 drilling rigs running along with now 2 service rigs. Oh, about then I came up with the ULTIMATE idea to get-out-of-well-drilling!! I invented a new type of mud pump that is crucial to the water well drilling rigs!!! It was a WAY better mousetrap, and when I took the prototypes to the national water well drilling convention in Las Vegas, they were literally the talk of the show - and the industry - for the next few years. But how was I going to manufacture these new pumps? I had never been in a machine manufacturing business, and I had people ordering pumps from me from around the country!! Well, my banker snorted over the glasses perched down his nose and told me youre out of business. Well someone had forgotten to tell the credit card companies that little fact, so I racked up another $150,000.00 debt - credit card debt - financing my new mud pump manufacturing venture - a venture SURE to get me out of the stressful water well drilling business. So off to the manufacturing races we go!!! Well, like all the other things in my business career, I took my technology to market too soon, and had major problems to work out as I shipped pumps literally all around the world. Whether it was tenacity, or hard-headedness, we worked through the problems and bit-by-bit took the entire water well drilling market for mud pumps by storm. Along this time the well drilling had increased too, as things would happen, and we had finally found a company that would bond so that we could bid on municipal water well contracts - where the big money was. So we began picking up municipal well contracts - and that pushed us into yet ANOTHER, bigger, drilling rig for that work. So it seemed, by all appearances, we were on our way to the $promised land$ all the way up until 2008... Recession? Who saw that coming?? Mud pump sales fell, and briefly even the water well business slumped. For the first time in 25 years I was laying off employees. Well praise-be-to-God, the well drilling business came back soon enough, and we were now drilling a substantial number of municipal water wells where the profit margins were several times greater than the small residential water well market. Now the well drilling business was grossing an average of $3 mil per year, and the pump business, which had peaked at over $2.25 mil in 2007, was about half of that. Didnt look like the screen business, or the mud pump business were about to set me free of the well drilling business. Well its all an interesting evolution. The company that I had spent 25 years trying to get out of, had evolved into a company recognized across East Texas - as THE premium quality water well drilling company. While I was busy trying to get out of the water well drilling business, it grew and evolved into a company that... I no longer disdained!!! No longer was I working with inadequate equipment. No longer was I hopelessly under-financed. No longer was I without dependable and competent employees. I turned around one day to realize that the company I had tried to get out of for 25 years, was now a company I had not even the capacity to envision 25 years prior. I look back now and realize that God put me in the water well drilling business, and all my efforts to get out of it have done little more than add stress and trouble to my life. What I didnt understand at 29 years old, is that build a better mousetrap, and honesty and integrity WILL make the world beat a path to your door... but it just might take 25 years or more. :) Ah well, thank you Lord for your patience with this hard-head. Thank you, for C. Miller Drilling - Water Wells Done Right. Good night everybody.
Posted on: Fri, 22 Aug 2014 03:41:29 +0000
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