I got to know Sid while growing up through his son, Alan, who was a boyhood friend. After graduating from high school I decided not to go on to college and instead try my hand working in agriculture. That decision was based on my observation that not all people benefit from college and, in my case, I was better suited to learn on the job. After taking a couple jobs that lasted a few years, one day I received a letter from Sid offering me a position in a new company he was starting. To this day I keep that letter in my desk drawer. At the time I was twenty-five and married with two kids. Sid was proposing that I join his sons Alan and Jim in a telecommunications venture. The year was 1981 and it was just prior to the breakup of AT&T which led to the explosive growth in telecommunications. Sid had just sold his radio station and was looking to reinvest his money into something new and saw the impending breakup of AT&T as an opportunity.
At the time I didn’t know anything about telecommunications. Over lunch I told Sid that while I had no knowledge, I was eager to learn. Over the next couple years I self taught myself how to build the installations side of what became Baron Communications. I’m a hands-on kinda guy from a large family and was comfortable learning how to install phone systems. Though Alan eventually left the business, Jim stayed on and took over the sales functions.
From the first days, Sid and I hit it off well. I think he valued my work ethic and I certainly respected his ability to build businesses. Rather than going into debt Sid believed in finding other more creative ways to fund his businesses. In this case he used the profits from the sale of the radio station for funding.
After five years Sid decided to expand the business and purchased a telecommunications company just north of Seattle. This was the first of many such acquisitions as we grew the company from its base in Lynden to larger markets in the northwest corridor of Washington state.
In 1986, Jim Baron and I decided to purchase the company from Sid. Over the next eight years Jim and I bought eight other companies. Sid was involved in every one of the acquisitions even though he no longer owned the company. He is a master negotiator with an amazing winsome personality which he used to get the best deal. For Sid negotiating is all about overcoming obstacles. He gets a twinkle in his eye as he gets close to closing a deal.
Because Sid was a pilot we often flew together to meet with the heads of the companies we acquired. It was during those trips that Sid taught me about debt strategies, value propositions, mitigating risks, and how to interpret profit and loss statements. Sid never risks what he cannot afford to lose and knows how to find the win-win in every deal he makes.
To this day Sid and I maintain a lunch relationship. He remains a valuable friend and mentor. One time over lunch I told Sid that I was considering offering leasing to our customers. Within hours he sent me the forms and and lease agreements we still use to this day. He was instrumental in helping us to bootstrap the leasing business and it has since grown to over two million dollars in lease holdings. And it all started over a lunch with Sid.
—Phil Bratt, is the CEO of Baron Telecommunications with their home office located in Bellingham, WA.
According to a recent article in Inc. magazine, a new way many entrepreneurs are funding their fledgling businesses is through credit card dept. Problem is, if you can’t pay off your cards when they come due you risk paying a hefty amount of interest. A key driver to success is keeping costs down, especially interest fees on borrowed capital. Better for you to take a second job than to pay those high interest costs.
If you require working capital during the startup phase, consider small investments from those who know you best, your friends and family. Even though it may feel awkward to ask others for help, it does provide you with an opportunity to show your business plan to others. It is amazing how many good ideas will come from the people who know you best. While some may invest, others won’t be in a position to help or might be unsure of your idea.
As a successful salesman I felt that Margaret’s old 1937 Chevy did not convey that image. Pride caused me to buy a newer car which we couldn’t really afford yet. For the first time in my life I got a bank loan. Every month I worried that I wouldn’t be able to make the $68.50 monthly payment, and that month finally arrived. When it did, I walked nervously into the bank and asked to talk to the president of the bank. He was a big man with a friendly face. I said, nervously “Mr. LeCocque, I’m so sorry that I cannot make the total payment this month. I can only pay $30.00 this month. But I think I can catch up in the next three months. Will that be OK?” Mr. LeCocque invited me into his private office and said “Sid, I wish all our customers were like you. They don’t make their payments and we don’t hear from them.” Looking straight into my eyes he said, “I’m impressed. I appreciate you coming in and telling me. Now I know I will never need to worry about your car loan because you are worried about it.”