The good news is I'm going to build another chain like OfficeMax and it's going to attract people to your shopping center. The bad news is I don't have the money right now. BNET: What's the biggest thing holding back fledgling entrepreneurs? Feuer: A lot of people think the good fairy will just do it for them. That's not going to happen. It comes down to how hungry you are to succeed. You've heard of fear of failure, but I've met many people who are afraid to win.
They don't want to do what it takes because they're afraid to have that responsibility. The job of a CEO is to be a pot-stirrer -- never settle for complacency, keep changing. Being a good entrepreneur also means being an effective teacher and communicator. That's probably the reason I wrote this book. I hope people will learn from it. Please enter email address to continue. Please enter valid email address to continue. Chrome Safari Continue. Be the first to know.
Feuer, for instance, worked at the corporate office from seven a. He would then race home, shower, put on casual clothes, and drive out to the store to observe the customers and employees.
When a customer left the store without purchasing anything, Feuer was known to chase him down in the parking lot and ask him if OfficeMax had failed in any way. That type of thinking was later reflected in OfficeMax's intensive customer-satisfaction orientation.
For example, the company began requiring that all customer complaints be resolved to the customer's satisfaction within 24 hours. Enthused by the quick success of the first store, Feuer and Hurwitz hurried back to the original investment group and raised additional capital for expansion. They dumped the cash into an aggressive growth program that, amazingly, had OfficeMax operating 13 stores in Ohio and Michigan less than 12 months after opening the first outlet.
The success was so quick that it worried Feuer, who was convinced that the company's accounting system was messed up and that OfficeMax could easily be teetering on the edge of bankruptcy.
Shortly before OfficeMax had fired up its first store, a similar office superstore venture called Office World had started in Chicago. They eventually warmed up to the idea, however, and the resulting agreement brought seven new stores to their chain as well as the resources of several deep-pocketed venture capital firms.
OfficeMax, for its part, only had to give up two of the ten seats on its board. By the summer of , following the Office World merger, OfficeMax was operating a total of 30 stores. The cost-conscious founders finally decided that it was time to move into a better headquarters facility, one that featured separate men's and women's bathrooms, for example.
The rest of the money was put to use funding an aggressive expansion plan that would, the company hoped, tag 20 more stores onto the chain within a year. Despite healthy gains and a bright future, however, a development in threatened to quash OfficeMax and its competitors.
Feuer and Hurwitz had perceived the threat years earlier. Finally, their fears were being realized when mass discount merchant Kmart announced plans to roll out an office supplies superstore dubbed Office Square. OfficeMax executives realized that the new venture, backed by Kmart's massive bank account and retailing savvy, could literally crush start-ups like OfficeMax.
Feuer and Hurwitz, refusing to ignore the threat, began trying to initiate talks with Kmart. The talks initially centered around an outright purchase of OfficeMax by Kmart. But Feuer and Hurwitz were hesitant to give up control of their company.
Fortunately for the founders, Kmart turned out to be OfficeMax's greatest ally, rather than its worst enemy. Feuer and Hurwitz were allowed to maintain total control of the company, and Kmart smartly became a silent financial partner.
With its new bankroll, OfficeMax intensified its expansion efforts and quickly met the goals that it had set with Kmart executives. Both companies were so pleased with the arrangement that Kmart decided to up the ante in It purchased 92 percent of the outstanding shares from the original investors and became the owner of OfficeMax.
The net result was the OfficeMax was sitting on a mountain of cash and had virtually no long-term debt. Furthermore, Feuer and Hurwitz were still firmly in control of the company.
The deal couldn't have been sweeter for OfficeMax, which was suddenly positioned to launch a bid to dominate the national business supplies superstore segment. That's exactly what the company did. During the next 18 months the company began opening new OfficeMax outlets at a feverish pitch. More importantly, the company purchased the store Office Warehouse chain and the outlet Bizmart chain, and eventually integrated those stores into the OfficeMax organization.
As a result of store additions and acquisitions, OfficeMax was operating stores, coast-to-coast, in 38 states by the end of Although cash was a major ingredient in the company's recipe for growth, its shrewd operating strategy was just as important for success.
Indeed, throughout its expansion OfficeMax maintained its customer focus. Importantly, the company was able to get an unsecured line of credit from a local Cleveland bank. The bank granted the line of credit under one condition: that the founders agree never to use it. Feuer and Hurwitz were able to take their "line of credit" to big suppliers like Xerox and convince them to fund their inventory on credit, sometimes for a full year or more.
Indeed, the OfficeMax team learned early that the only way to get the cooperation of potential suppliers was to act as though OfficeMax was much bigger than it really was.
They dealt with suppliers as though OfficeMax was a soon-to-be major chain with 20, 50, or even stores going up in the near future, suggesting that if those suppliers wanted to secure a place with OfficeMax tomorrow, they would have to cooperate today.
To the founders' surprise, most companies played along. Those that didn't often regretted it, as OfficeMax quickly became the leading customer for many major office equipment and supplies manufacturers.
Incredibly, OfficeMax opened its first store just 90 days after the founders had created their business blueprint on April Fool's Day. Observers were surprised that the team had managed to find space, hire and train a store staff, and hone a store concept in just three months.
But to them it was a simple matter of survival; they had to start generating cash flow so that they could pay their bills. The only advertising for the grand opening was a newspaper ad two days prior to the store's opening.
After only six months in operation, the store was breaking even before corporate overhead. That feat was accomplished partly as a result of the grueling hours put in by the team. Feuer, for instance, worked at the corporate office from a. He would then race home, shower, put on casual clothes, and drive out to the store to observe the customers and employees.
When a customer left the store without purchasing anything, Feuer was known to chase him down in the parking lot and ask him if OfficeMax had failed in any way. That type of thinking was later reflected in OfficeMax's intensive customer-satisfaction orientation. For example, the company began requiring that all customer complaints be resolved to the customer's satisfaction within 24 hours.
Enthused by the quick success of the first store, Feuer and Hurwitz hurried back to the original investment group and raised additional capital for expansion. They dumped the cash into an aggressive growth program that, amazingly, had OfficeMax operating 13 stores in Ohio and Michigan less than 12 months after opening the first outlet.
The success was so quick that it worried Feuer, who was convinced that the company's accounting system was messed up and that OfficeMax could easily be teetering on the edge of bankruptcy. Shortly before OfficeMax had fired up its first store, a similar office superstore venture called Office World had started in Chicago.
They eventually warmed up to the idea, however, and the resulting agreement brought seven new stores to their chain, as well as the resources of several deep-pocketed venture capital firms. OfficeMax, for its part, only had to give up two of the ten seats on its board. By the summer of , following the Office World merger, OfficeMax was operating a total of 30 stores. The cost-conscious founders finally decided that it was time to move into a better headquarters facility, one that featured separate men's and women's bathrooms, for example.
The rest of the money was put to use funding an aggressive expansion plan that would, the company hoped, add 20 more stores to the chain within a year. Despite healthy gains and a bright future, however, a development in threatened to quash OfficeMax and its competitors. Feuer and Hurwitz had perceived the threat years earlier.
Finally, their fears were realized when mass discount merchant Kmart announced plans to roll out an office supplies superstore dubbed Office Square. OfficeMax executives realized that the new venture, backed by Kmart's massive bank account and retailing savvy, could literally crush start-ups like OfficeMax. Feuer and Hurwitz, refusing to ignore the threat, began trying to initiate talks with Kmart. The talks initially centered on an outright purchase of OfficeMax by Kmart. But Feuer and Hurwitz were hesitant to give up control of their company.
Fortunately for the founders, Kmart turned out to be OfficeMax's greatest ally, rather than its worst enemy. Feuer and Hurwitz were allowed to maintain total control of the company, and Kmart smartly became a silent financial partner. With its new bankroll, OfficeMax intensified its expansion efforts and quickly met the goals that it had set with Kmart executives.
Both companies were so pleased with the arrangement that Kmart decided to up the ante in It purchased 92 percent of the outstanding shares from the original investors and became the owner of OfficeMax.
The net result was that OfficeMax was sitting on a mountain of cash and had virtually no long-term debt. Furthermore, Feuer and Hurwitz were still firmly in control of the company. The deal couldn't have been sweeter for OfficeMax, which was suddenly positioned to launch a bid to dominate the national business supplies superstore segment. That's exactly what the company did.
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