How Howard Wool’s Failed Business Found Success Using Lean Startup Principles

Starting a new business is a big undertaking. For the first time entrepreneur it can be overwhelming, but starting a new business after failing on your first attempt takes nerves of steel. Howard Wool was facing that reality when he launched Environmental Safety Incorporated 12 years ago. He might have had some second thoughts along the way, but he moved forward anyway.

Wool had learned a lot when his first business, Shari Chemicals failed in 1985. In that previous business he had operated above the company’s means and it didn’t work. After just a few short years in business, Shari Chemicals folded and Wool gave up on the idea of owning a business for a while.

Starting Over Again

About 12 years ago, he was ready to make a second attempt at business ownership. This new business, Environmental Safety Incorporated, is benefiting from the lessons he learned from his first attempt. This time around he’s concentrating on his strengths and it’s working. The company sells industrial chemicals such as cleaning supplies, which is a business that Wool knows a lot about.

New businesses that succeed have someone with a lot of knowledge of that industry leading the way or they have a great new product idea. Wool has more than 40 years of experience in the chemical sector. That’s a great foundation for a profitable business.

Leaner Business Model

Shari Chemicals had 18 sales people, expansive corporate offices, and generous benefit plans for its employees. The problem was it couldn’t afford all that and this was one of the main reasons for its failure. Wool has taken a different approach with his new business.

Including himself, Environmental Safety Incorporated employees only 4 people. He has a secretary, a part time receivables clerk, and one other person generating sales. It’s a lean structure, but it works quite well.

Over the Garage

He’s abandoned the nice corporate offices this time around. While the company is doing quite well, he uses space over his garage for his business. That means less overhead and a better bottom line. More importantly, he offers his customers a reliable product at a competitive price. His clients aren’t concerned with where his business is located – they’re only interested in what it can do for them.

There are plenty of business owners that think they need the flashy office space to be taken seriously. Wool’s Environmental Safety Incorporated proves that isn’t the case. A business needs to concentrate on providing a useful product or service and keeping expenses as low as they can be.

Minimal to no Overhead

The days of large Christmas bonuses handed out to employees regardless of profitability are in the past for Wool. He still treats his employees well and offers competitive salaries – he just doesn’t offer anything the company can’t afford while maintaining a healthy bottom line. With very little overhead to speak of his company is in a good position for continued success.

This low overhead also gives him a competitive advantage over his competitors. The savings he makes from having an office over his garage means he can pass those savings on to his clients in the form of lower products. They get the quality products they need at a fraction of the price.

Relies on Personal Touch – Hands On

A lean business structure isn’t the only reason Wool’s been more successful in his second business venture. This time he’s relying on his own considerable knowledge of the chemical sector to drive sales. He’s the company’s number one salesperson as well as its corporate head.

This is a key strategy of any successful small business. The owners have to be hands on taking on many responsibilities. They can’t rely on others to have the same commitment to their venture that they do. When Wool’s Shari Chemicals was expanding in the mid 1980,’s he moved away from this strategy and it cost him his business.

“Warmup” Before Business

Today Wool relies on a personal approach to sales centered on his own relationships with his clients. He likes to “warm up” with his customers before getting down to business. He develops a personal interest in their family life and well-being, which pays dividends in the form of a loyal customer base.

Solutions for Clients

His personal approach to business includes a belief that finding the right solutions for his clients is the most important thing. If his own products can’t satisfy their needs, he’ll do the research and come up with a solution for them. He may lose that particular sale, but he gains a customer for life in the process. It’s a winning strategy that has worked for many successful small businesses.

The evidence that his intimate relationship with his clients is working is the company’s healthy bottom line. Environmental Safety Incorporated consistently achieves seven figure sales numbers and maintains profitability year after year.

A 60/40 Approach to Sales

He’s also developed a balanced approach to sales that assures the retention of existing clients while developing new ones as well. He spends about 60% of his time on new clients and 40% on maintaining his relationships with his existing ones. Judging from the company’s sales figures, he seems to be striking the right balance.

Wool’s a great example for anyone that failed at business on his or her first attempt. That failure can be a learning experience and a starting point for a successful business. All it takes is a strong will and perseverance.