I’m thorough and an admitted perfectionist, but a conversation with a potential investor taught me some lessons that I’ve never forgotten.
When I decided to start my own business, I knew I would need to put together a business plan. I spent months creating a budget for the initial startup and identifying all the upfront costs, which included financing an SMT line, the cost of leasing a building, how many people we needed, what it would cost to operate, and more.
Once the costs were identified I had to project revenue to determine my breakeven point. I didn’t have any customers yet, so this was all speculative. I finalized my plan and optimistically went to the bank to apply for a loan. After meeting with more than a few banks, the answer was always the same: either come back with a customer in hand or put more money down. My business appeared solid, so at the time, I really didn’t understand why banks wouldn’t help me. The narrative was very educational and the projections, although conservative, showed growth potential with a breakeven point in the third year. Since I didn’t know any potential customers who would give me an order before I had a building and equipment, and my husband and I had already committed every cent we had plus borrowed some from family members, I quickly realized that I needed to head in another direction. This is when I began to look for an investor who could provide some seed money to get the company started.
I set up an interview with a potential investor—my father’s former boss from BorgWarner. He was very well known in the area and very respected. He had worked his way up at BorgWarner Corp., ultimately becoming president of the Automotive Components Group. Later, he purchased Kopetz Manufacturing LLC, a fabricated metals company, which is where our meeting was being held.
This was the first time we had met. I had my business plan in hand as we greeted and I took a seat at his desk. The facility itself was small and the office décor was old. I noticed a picture of an F-16 fighter plane on the wall. He paged through my business plan and asked me a lot of questions. My plan was very detailed and complete. It was professionally arranged into sections about myself, my background and education, our potential customers and competition, the current market conditions, and many pages of projected financial numbers for at least five years. Yes, I am a perfectionist!
We talked for more than an hour. He was very interested in this concept of contract manufacturing and he also seemed intrigued in talking with me—a woman who wanted to start an electronics manufacturing company in this area. Our conversation covered everything from industry, to why I wanted to start the company and even about my family; then, he challenged me on the projections. As an accountant (although a very young accountant at the time), I was confident that my numbers and projections were reasonable. I had poured over them for months, doublechecked the growth expectations, and included three financial scenarios: best case, worst case, and middle of the road. I made sure the projections were conservative but realistic enough to be obtainable.
After much discussion over financial projections, he changed the topic and began to tell me about his son, a U.S. Air Force pilot and a commander who flew F-16s. He was proud of his son’s military career path and his elite talent flying F-16s. He told me his son would call him beforehand and let him know he would be flying overhead, just so he could go outside to watch for him. I could see him light up just talking about him. Finally, he came back my topic. He said that since my business plan included supporting the military and defense industry, he was interested. This was great! I had found someone who was interested in investing. Although this was positive news, he also instructed me to go back to the drawing board and redo the projections. He told me that, in his experience “Everything costs twice as much and will take twice as long.”
Although I did not agree with him at the time, I took his advice and reworked the numbers. Many years later, after CAMtek was settled and growing, I realized that he was right. The startup of my business eventually did cost more than I had projected, and it also took an extra year to get into the black. This was a valuable interview that taught me a lot.
Over the years, as I continued to grow CAMtek, I found myself still taking his advice. When I look at any plan, whether it is for new equipment, process expansion, new product launch, or whatever, I am always doublechecking the numbers and timeline to see if we can support this project—even if it ends up costing twice as much and taking twice as long.
“Look twice before you leap.” – Charlotte Bronte
Christine Davis is a leader in today's electronics industry. She founded and successfully ran CAMtek for 20 years before selling to Zentech, where she is now an executive vice president and general manager of Zentech Bloomington.