Her Subcontractor Backed Out Days Before She Had to Buy the Equipment

She won her first total contract. Then days in, her partner called and said they couldn't buy the equipment. >> My first contract, um, $70,000 worth of equipment, and the subcontractor partner had suddenly said, "Hey, we can't do that for you. So, you're going to have to figure out how to buy that equipment for this first contract." >> No equipment means no delivery. No delivery means no contract. She had days. What she did next was the part nobody teaches and had nothing to do with the bank. >> I reached out to some folks in the distribution community and uh, somebody who I'd worked with 10 years before MTS checks all six federal tags [laughter] for set aides. But while I say that, I lead with what we can do, what our capabilities are, how we execute, and then the set aside tags of course are the complement that allow customers and prime contractors to leverage those set aides in order to meet small business uh utilization goals. I became the system expert. I became the operational expert for a system that went through a $35 million DoD consolidation program. So, we took 14 highfrequency sites around the world, both Air Force and Navy and centralized them into Andrews Air Force Base. I got thrown into the mix of the of the uh program by raising my hand and telling a a bunch of engineers and and uh contractors that the system didn't work the way they just said it did on the whiteboard. And from raising that hand, I went into the world of program management, system configuration, first article test, schoolhouse training to train the schoolhouse kids on a new system and new policies, new procedures. So, it just opened up this whole other world that again, you know, had I not raised my hand, I probably maybe wouldn't be here today. But it's that foundational step that just continues to build on itself and bring me to where I am today. >> So, you decide, all right, I'm going to step out. I'm going to start my business. What's the first thing that you do? >> Yeah, I've done this before and there were a couple lessons learned. So, you know, part of it is you learn, hey, I've done this for everybody else. And then you go do it for yourself and you make a couple of mistakes or decisions that you thought you knew better until it's your company and you make them anyways. Well, I had a plan. It took me several months to create that plan. So again, I knew what set aside tags I could capture fairly quickly to set off and go after that set aside business both as a prime and a potential subcontractor. So my first order of businesses, I am a 100% service disabled veteran. So I have that income coming in every month and had the ability to live on that income while I took this step. But I also believed to supplement my income, I did some small business consulting. So help some folks understand the government space to bring in some of that additional income in order to grow the company as well as reinvest a little bit of the money to grow the company. It's almost the same model from 1998 when I helped another small business start here. We both got out of the Air Force and started a successful AA company and almost took that same model. Pay yourself enough to get by in life and then take the extra money and reinvest it into the company to build it. >> Yes. So, I was able to do that for the first year, captured two contracts. I knew I was going to go into low voltage uh because I came from the wireless industry. So, my first contract was actually guest Wi-Fi down at the Central Texas VA. So, we were able to do that and then do some audiovisisual out at the Air Force base here locally. So, those two contracts set the foundation for the first year. They were at the end of the fiscal year, rolled into my second year of business, and the contracts just continued to grow. So, I developed a relationship with the customers. We got some modified contract work, but we also began winning additional type of work for various customers. >> And some of that, too, was, hey, I'm back in the industry. I'd been kind of away from the federal space for several years, trying to get back out there, re-engage my network, take advantage of who I know. And honestly, that first contract was a lesson learned that I thought I'd be able to avoid the lesson, but again, a challenge was presented and it had to be overcome in order to be successful on that first contract and be profitable by the time it was over with. So >> tell us some other things that you share in you know I mean I could ask more about yourself but I'm curious about the small businesses some other things that small businesses that you've run across things that you that you recommend or that you've recommended in the past or maybe a book or something to watch or something to share. What are some other things that you that you regularly share with small businesses? you know, um I've heard on several of your other podcasts and I think it's a commonality amongst us small business folks is u the line of credit and how to fund your business. No matter where you start from, eventually if you win a contract or two, you're going to have to fund it somehow. And it was one of my first lessons learned again having done this for so many other folks and um you know being able to generate some income for myself was how could I fund a at this particular time my first contract um $70,000 worth of equipment and the subcontractor partner mentor partner had suddenly said hey we can't we can't do that for you so you're going to have to figure out how to buy that equipment for this first contract. After initial shock, [laughter] um, I took the opportunity to again re continue to re-engage my network and I reached out to some folks in the distribution community, honestly, Annexter Federal out of the DC area and, uh, somebody who I'd worked with before, Right Riley, who I'd worked with at a wire and cable manufacturing company 10 years before. So, here I am, and I'm saying, "Hey, I have this challenge. You know, I started my small business. Is there a way you can help?" and he immediately took our long-term relationship, you know, my reputation in the industry, presented my challenge to his boss, and they met the challenge for me. They went ahead and gave me a line of credit. We were able to get the equipment, able to get the contract executed and still be profitable. So, uh, sometimes it's not what you know, but who you know, and then those relationships, those long-term relationships that you've established through the years, reach out to them. most people are willing to help and uh I just happen to be lucky enough to have that button to push when I needed it. >> That's super important and it it like you said I think that some of the people who have not done this yet believe that that's an initial challenge but I've seen that that challenge continues at every single level because even when we're doing you know you think hey I did whatever five million in sales you know well you want to do seven million next year right or eight million well that's going to take funding to support that. Yes. Yes. That growth >> um and the requirements to be funded for 70,000 are different requirements than to be funded for 700,000, >> right? Never goes away. >> It doesn't go away, right? So the challenges never go away. You have to learn how to navigate that element of the business. So on that same topic, what are some things that when you started the business were hard, but now they've become much easier than when you first started? Well, the line of credit, the relationships, just as important today as I've grown to establish a relationship with the right bank and a bank that's used to dealing with small businesses. The SBA understands what it takes to do government. I'm blessed to do that. I've uh partnered with Arvis Bank here locally. They get the government. I think they're the number one or two lender, SBA lender in the state. They've helped me pivot in the last year and a half since I've moved to them in multiple directions. There's a team of five or six and it's just anytime I may ask a question, I have a new resource and they're responsive and they're willing to to take what they know, not just in banking, but also in the government space and see where they can help MTS in terms of growth, lines of credits, SBA loans. I'm going through that process now, you know, and then the SBA. It's important to keep in contact with the SBA and have a good relationship with your local SBA office. I'm part of the emerging leaders program right now. I have my final presentation in in a week. But that program in and of itself, the emerging leaders program has helped me understand some things that I needed to understand better as a business owner. Not necessarily how to sell to government, but as a business owner, lines of credit, how people look at my financials. I may look at them one way, but how does the outside world look at my financials when they ask for your profit and loss statements and your balance sheets? What do they see in terms of, hey, we'd like to partner with MTS or or we'd like to extend your line of credit or any other reason to do business with you. So, I've learned how to read those statements and what they mean to other folks. And I think that opened up a whole different world to me in the last three or four months during this program to make me take a harder look at my balance sheet, a harder look at my profits profit loss statement and how I can improve some things to help MTS be seen as a strong small business partner. [clears throat] >> That's great. Uh a lot of uh my previous guests went through that emerging leaders program. That seems to be another common denominator. >> It is. It's a wonderful program. >> Yeah. when they first qualify whenever they become eligible to go. That's something that we highly recommend for people to do. >> I agree. I make that same recommendation. I'm almost done with it and I wouldn't trade it for the world. >> Yeah, that's great. That's great. Now, you you said you won your first contracts, but where did you have the past performance to get that contract? Was it not required? >> My subcontractor had the past performance and low voltage. So we creatively were able to roll that in and utilize it in the response to meet the response and the requirements. >> That's excellent. That's another great just so that you know those are things that people ask a lot. >> Okay. >> Those are great. So when you're out and you're sharing the word that's a great point to help shed small businesses out there because so many people like you said they don't have the previous past performance. They're like okay how do I get started? I don't have past performance. It's like you know what comes first the chicken or the egg? [laughter] And I'll also share something that I recently learned this past week. I and I don't have it yet, but there were some new clarifications that the SBA put out on rules uh back in November of 2020. I encourage everyone to go look those up. I have a couple of them from uh I interviewed Polo Marzov the attorney represents small businesses and they and one of the rules and is exactly what you just said that now and it's important for not just for you and I to know it and for small businesses but other for contracting folks to know because these things are changing all the time and uh what the the the representative the attorney from Pol Marzel said is that contracting officers if they don't know the rules they could get potentially get in trouble because the contracts are violating the new rules that the SBA created, >> right? >> One of those rules happens to be that they cannot prevent you from using your subcontractor's experience as credible experience. >> Yes. >> And that's actually a rule that was put in place that's been that was like it was already I think it already existed, but they clarified it that rule in that those new regulations that went out. So these new regulations really they made it easier for small businesses to to break into this marketplace and to kind of get their foot off the ground. So, you know, I learn a lot that and that's what I was telling you in the beginning. I mean, I've learned so much. Put it this when I first started this podcast, I didn't know what capture management was. [laughter] >> Seriously, I mean, that's one of those words that it's you don't find capture manager widely used in English language. [laughter] >> Outside of government. >> Outside of government. Yeah. >> And I didn't know what a capture manager was. And that's just one of the very beginning initial examples of things. Molly, thank you so much for coming on. I really enjoyed it. I have a whole page of notes as you see. [laughter]