Another Memorial Day - 2012

Alas, the Summer Season kickoff is here!  Memorial Day marks the beginning of the much anticipated Summer Season in the USA.  Images of Summer Beaches, Summer Camps, Summer Holidays, and of course BBQ, picnics, and hanging out on the corner with your friends as school is out for 2-3 months.


The essence of US Summer is marked by the memorial Day long weekend.  Everyone looks forward to this holiday more as it marks the true change of seasons and lifestyles for the next 3 months. Summer starts with Memorial Day!


But what is Memorial Day?  Other than BBQ, Summer, and Fun, it is a Holiday when all the graves of our fallen soldiers will be marked with a flying flag


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Memorial Day we salute and honor the brave men and women who have fallen for our country.  Those that never returned home from the wars fought to protect our Country, its Constitution and the principles enshrined in our Declaration Of Independence, "...We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."


This weekend, as you pursue happiness with the bite of that delicious BBQ sandwich, or jump in the pristine waters at a sandy beach, or just simply enjoy your family and friends....remember the fallen soldiers and engrave the image of hundreds of thousands of graves around the country that will fly the US Flag near them.  Remember them for a few seconds, minutes or whatever is possible....but please do remember them.  They have given their lives for this cause.  It is the ultimate sacrifice!  One that makes them immortal forever!


Happy Memorial Day!  Have a safe and wonderful long weekend!

The Belated New Year Blog – A Five Year Long March to Entrepreneur Freedom

OK so I have been absent from blogging for many months!  2011 came to a close and the New Year, 2012, came storming in.  The year of the end according to the Mayan’s has begun and yet I feel a sense of renewal and rebirth of sorts.

The depths of the recession started way back in late 2007 and hit me personally hard in late 2008, continued in 2009 and felt I hit the very lowest in 2010.  In 2011 I felt things were getting lined up for us to start climbing out of the economic misery that had lasted a long 3 ½ years. 

On January 23, 2012 I celebrated 5 years with my small business FMW Fasteners (www.fmwfasteners.com) that I bought in partnership with Steve Baker and Ron Shaw.  Yes we passed the 5 year mark, the critical milestone that most small business owners mark on their calendars when they start this long march to entrepreneurship freedom.  And yes this has been a gruesome march through the deep dark jungles of misery, business torture, and hardship that only the three of us can understand.  It’s impossible for me to measure and articulate what the three of us have gone through and in many ways our journey still seems to only be starting.   This has been analogous to being stranded in a jungle with no resources, no communication and nobody to help except yourself.   And yes we are not out of the forest yet, although sunlight is now visible and there is a path we are taking that is showing the road to freedom from the prison of recession and a business startup.

The story of FMW is a continuing story and in many ways Chapter One is still being written.  When we started this business we had a plan and a vision which would have taken us three to five years to execute - had everything gone as planned.  When we took over FMW in Jan 2007, no one predicted the Great Recession.  These plans we had created for ourselves were out the window of course and we got into this endless cycle of trying to reinvent ourselves.  Our ultimate goal was to take an antiquated industry to an online machine!  That journey was complicated and thrown off course by the economic catastrophe, compounded by the inexperience of three guys with extreme technical background in an industry plagued with old school legacy methods.  This was classic “Lost” in the fastener world!   But the strong faith in our partnership and the collective ability of the three of us complementing each other’s skills and looking out for our blind spots we knew we could pull through.  Many events occurred some under our control and many completely out of our control that constantly derailed us from our mission.  But we continued to move forward and accomplish a slow march towards taking this company to the online business that you see today.

And so the last quarter of 2011 rolled in, the momentum was on our side and we finally saw our webstore catching traction with customers.  We saw the numbers growing and the success finally happening; albeit still immature.  As I mentioned, we are still in Chapter One – the beginning.  But I must say that we have brought to fruition a vision that many industry leaders said cannot be done.  Steve, Ron and I persisted through.  Many times when I thought “how in the hell is this going to work?” Both Steve and Ron said, “I know this will work!”

So now the New Year has flown by!  I must report that FMW is on a growth path again- finally!  We are now preparing for Chapter Two and onwards.  In many ways, we reset our 5 year clock many times because we had to “start over” so many times I forget the count.  We would try, fail and try again!  We never gave up and more importantly my partners Steve and Ron never allowed us to give up. 

We have sacrificed tremendously and that sacrifice has paid its dividends ten folds!  It will continue to pay dividends for our lifetimes.  And that is something there are no words to describe the value that I carry with me today.  FMW is the ultimate fruits of our long labor and we are just beginning.  I can only hope that our fire and desire to strive for the continuous innovation and continuous passion to want a better answer always continues…and with this team it surely will, I know.  Yes we will disagree and we will passionately question each other – but that is precisely the medicine and the formula that allowed us to get here.   No one knows what the next 5 years will bring….I do know that if we have learned something in the past 5 years then I am not worried about the challenges that are yet to come.  And yes there will be challenges no doubt, but that is indeed the game we bargained for and we are ready.

A new millenium With one we start by having faith in One

A hundred in 360 with 60 times 6

A seventh, the final seven starts with 1433

1,4,3,3 makes this 11, the first year of the seventh

The King has given the successor the command of One

Moharram starts with One

The sacrifice on the 10th begins and ends with One

One sacrifice for the many on the seventh sixty

60 into 6 - 360 every year

One day on the tenth the sacrifice

Let there be the One sacrifice we see

on the 10th a reprise we long

Shall we go and see such sacrifice

For maybe we beg for that glimmer

A glimmer of the One tear

rolling down making 360 into the seventh

Leapfrog Technology for The Industrial Distribution Sector

It was Dec 2006 and the entrpreneur team of Ron Shaw, Steve Baker and Taha Raja went to the closing table to purchase an old fashion industry distributor - Fasteners for Metal and Wood, today known as FMW Fasteners.

The objective was to bring modern systems and new capabilities to an old school business.   Lets bring new technology to a traditional business and provide a "new way of doing business".

The thought and the theory was sound, but the question was how?  What technology and what systems would bring the competitive edge?  It took 18 months for our team to figure out the best way to address this challenge. The answer came with Sererra and Netsuite.

In an industry that is dominated by business owners with 30-60 years of experience, entrenched relationships and customer loyalty, it becomes very difficult to compete.  As anewcomers to an old established system, the choice was clear.  Compete in the field created by your competitor well established for 60 years or change the game and the playing field and have them chase you?

With Sererra and CloudTurn (A Sererra initiative using the Power of Netsuite), FMW was able to turn a traditonal brick and mortar business into a true online ecommerce business at a fraction of the cost required to bring similar capabilities using traditional software and systems available in the market space.

FMW vetted out many software providers and none of them provided the ease of deployment, rapid customization, and end to end integrated CRM, Accounting, Inventory Management, Accounting and Ecommerce in one package.  Further it provided the ability to bring unique industry specific capabilties like certification tracking, WMS, lot and serial tracking, and other unique fastener specific needs with rapid platform development capability.

The other challenge to "leapfrog" our competitors was how to do this using a budget that worked?  Endless money could have been spent and most traditional software systems required a perpetual license investment, infrastructure and other soft and hard costs outside of simple licensing.  CloudTurn uses the power of cloud computing which provided a rental - month to month approach to our investment.

CloudTurn provided FMW Fasteners with a professional turn key solution that clearly leap frogged our competitors.  Today we are launching hundreds of new products every month and providing a true low cost supply of quality fasteners through out the USA with the ease of point, click and buy!  Something very few Fastener distributors can offer today.

CloudTurn provides the automation and the ability to increase productivity by multiple folds!  What was before tied down to a brick and mortal location with sales people pounding the pavement with their relationship has now been replaced by Google, Yahoo and Bing as our premiere sales people touching thousands of customers every second!  Now that is reach, potential and a game changer!

A New Moon of Shawal Al Kareem

Today the New Moon marks Eid
The hilal of grace...to the giver of grace
The ship of rehmat sails to Najaf and Kufa
For Ali and Husain, the vessels of grace will arrive
Twice they will embrace
The captain and his first together
With them the spirtual yearning of thousands
The sacrifice of Kerbala and the sands that heal
Beckon the arrival to the very shores
Where the tents once stood firm
Winds of injustice replaced by the gentle breeze
As the vessels sail to the shores of Hussain
Embracing Burhanuddin and Saifuddin.

3 Stages of 30 Days - My Journey Through Ramadhan

Here we are in the middle of summer, dog days of August knocking on my door step and with it Ramadhan!  For the past decade plus, living in Houston, we have been lucky due to the lunar calendar, Ramadhan has mainly fallen during milder weather months.

But finally this year, it has started smack August 1, 2011.  Now mind you this has been slowly inching towards summer for the past few years, but for some reason it is hitting hard this year.  Part of me is kind of not looking forward to this difficult task of fasting.  The emotional side of me like every other American, continues to want to eat , drink and live happily ever after.  And why not, right?

So my life is about to dramatically change for 30 days.  The morning will start early to have breakfast approximately 90 minutes prior to sunrise.  Yes sunrise!  That will make it around 5AM in Houston.  I know for some northerners that is late because I know some of you may have to wake up far earlier than that.  With my sleepy eyes and a massive headache from the previous long day, I will scramble up something and eat in a few minutes.  Right after, it will be time to get ready and go to Masjid (mosque) for Fajr (early morning) Namaaz (prayers).  Aaah....but let's not forget, this year the Houston Congregation of the Dawoodi Bohra Jamaat does not have a masjid!  Our masjid was demolished last week in preparation for the reconstruction of a new Masjid.

Yes our Masjid in Houston was too small and in 2008 the Jamaat created a Master Plan to redo the Masjid, Mawaid (Dining Multi Purpose Hall), and Madresah (religious sunday school).  The Jamaat completed the Mawaid building - a state of ther art facility of 40,000 sq ft last December.  Now that the Masjid is demolished, Ramadhan will be observed in the Mawaid building.

So this year will be different...after all....hot weather, no masjid, long days, and of course lots of changes in my personal life...continuing.....

On the personal front, this year is the year of major change.  The past 3 years I have gone through the meat grinder and now the process of rebuilding has started.  Ramadhan is about sheding the old and building a foundation of new...new ideas, new starts and beginnings.  Its a month where we reflect back.  Thirty days of Ramadhan can be split into three sets of ten.

The first 10 days is about reflecting back and see what went wrong and how I could have done things differently.  I am definitely more wiser and more deliberate in my decisions.  My risk profile has changed and I am humbled in more ways than I can remember.  Humbled by realizing that I should have heeded the wiser experienced advise, humbled by the fact that the experience from our elders is worth considering.  Maybe it is because I am just getting older, or maybe because I now have children approaching the age where they are starting to make the same mistakes I made?  Either way these first ten days are a way to start earning this wisdom by first looking back and realizing the errors of my ways.

The second 10 days are to start formulating a new plan by spiritually connecting with my maker.  The long fasts provides a meditative state that provides plenty of times to dig deep into ones spiritual strength to start coming up with ways to move forward from the realization earned in the first ten days.  The first ten days are the hardest as your body acclimates and so by the second third, your mind, body and spirit are starting to align and your focus and your perception starts becoming clearer.  Thus it will becomes a great time for me to start creating a road-map for myself.  This year I am hoping to be able to get clarity on what I can do to execute this recovery for myself, my family and my business.

The last ten days are going to be the last stretch!  Like a marathoner, the finish line will be a reality.  My mind is clear, my body has shed the excesses.  The fat of gluttony, greed and selfishness will be minimized.  Physically my body will have completely adapted to the fast and my body will be in a groove!  And spiritually I will be in a groove too!  Clarity of vision, victory will be close, the mental victory of having accomplished a task and therefore my mind becomes free of the shackles of the past.  Rebirth of the mind will provide the motivation to move forward and seek a new beginning.  It will culminate with a victory lap on Eid-Ul-Fitr when my lips will touch the moist flash of a date early morning of Eid-Ul-Fitr marking the end of a thirty days of fast piety and prayers.  Inshallah, I will emerge a new man with a new beginning.

Till then.....this is the first day only...I can only ask the almighty Allah to give me strength, health and the sound mind to execute these thirty days as best as I can....in hopes to earn the wisdom to be reborn again....Ramadhan Mubarak to you all!  Pray for us all to have a spiritually fulfilling month.

The Trap of Extending Credit

The crux of the issue on this past Great Recession was credit.  We all overextended ourselves by borrowing too much and we all over extended ourselves by lending too much.  Both sides the debtor and the financier were at fault here.

So what are the lessons learned for a small business?  My business FMW Fasteners  is a small regional distributor of fasteners serving the construction and commercial applications industry - an industry hardest hit by the recession.  Like everyone else we had many customers "On Account" where they picked up fasteners and then we billed them / invoiced them on a standard Net 30 terms.

Like always, necessity is a mother of all inventions (or reinventions)!  At FMW we took a close look at our customer base, average transactions, and the type of customers we had.  For the most part a large majority of customers with the highest transaction costs were small customers that bought $20-$300 worth of Fasteners "On Account". 

The issue with these customers was the entire transaction and cash flow was not profitable at all!  How many of our small businesses have these type of customers?  Those that walk in, buy about $30 worth and then walk away with a signature putting this small order on account?  Then what happens?  Well, you have an administrator that "bills" this invoice or your system "invoices" this customer.  This invoice is then sent to the small business owner via email, fax or mail.  

Then 30 days go by and guess what.....the customer has not paid the $30 invoice....ever have that happen?  I am sure this is a common issue all of us have faced?  So now you start chasing a $30 invoice.  You try calling them, emailing them, faxing them...taking up time and money.  Let's assume you had 50% gross margin on the invoice.  That means you made a gross profit of $15.  Take out transaction cost of picking the item, packing it, giving to the customer, admin costs, etc.  You may be down to a measly $5 to $6 profit.  Now you have to wait for 30 days for this profit?  If you end up making any follow up calls, emailing, or any other follow up work you will start losing money.

So now the question comes, what can you do differently.  At FMW have made a conscience choice to convert our customers to debit card, credit card, checks or cash.  Would you be willing to pay 3% to a credit card company so that they can take up the burden of lending that $30 customer the money to pay you immediately?  3% on $30 is $0.90!  far less than the cost of making a single follow up call or the cost of two stamps for mailing the invoice and a statement?

The answer for us was a resounding yes!  Have a policy that if a customer does not do more than $5000 per year with us you, do not even contemplate giving them credit.  Further, those that you extend credit to have to either be a public traded company or have a good DUNS credit report.  If they do not have a DUNS number then we absolutely require personal guarantees on the credit application.

The rest who do not meet the above criteria, here is how my conversation goes:

CUSTOMER:  Can I put this order on account.

FMW:  Sir, I am sorry but effective this month, we are no longer extending credit terms to any of our customers.  However, for your convenience we accept all other forms of payment.

CUSTOMER:  Why is that?  I have always had an account?

FMW:  Yes I understand and we continue to appreciate your business.  But in order for us to reduce our transaction costs and to allow us to offer you the most competitive prices and service, we are no longer extending credit to any of our customers.  We can accept Debit cards, credit cards, checks or cash and our system can easily have that securely on file so that the next time you buy from us it will automatically charge to that system, if you like.  

CUSTOMER:  That does not make sense....why not

FMW:  Well sir, FMW is a small business and we simply are not well equipped to continuously evaluate credit for our customers plus we are able to extend to you more favorable prices if we you buy with credit card, cash or check. 

Normally, this resolves about 80% of the objections. The customer whips out their CC and pays for it.  Most of these customers are small business owners themselves and they can certainly appreciate what you are doing.

Yes there will be the 20% who will argue or will say I do not have a credit card, etc. etc.  To those I start wondering....that if a customer does not have a way to pay for a $30 transaction using a credit card, cash or check, OR if the credit card company does not deem them worthy to give them a credit or debit card then do you want to extend them credit?   In these 20% cases, you can always evaluate on an individual basis and then decide.

At FMW we have implemented this cash basis transaction and it has dramatically reduced admin workload, improved cash flow and vastly reduced dead beats!  Would you rather do a $100 in sales and make $50 or would you rather do a $200 on account and get only $30 after 30 days? 

Evaluate your customers, use technology to monitor your cash flow and understand your transaction and collection cost.  You will quickly realize that this simple technique may save you a lot of headaches and save you time and money and make you more profit!