When Frank Venegas Jr. is talking with potential customers, he finds it hard to describe why The Ideal Group Inc. is right for the
job. Venegas, chairman and CEO of The Ideal Group, compares the situation to asking your grandma how she makes her
homemade pie. If you didn’t watch her make it and see how she knows the right amount of ingredients without measuring and
how she puts her own touch on the pie, then you can’t fully understand why the pie is so special. That’s why Venegas lets
potential customers into his plant, and he says he gets more business this way than by just talking about why his company is
the right choice. This method of selling potential clients on his company — which provides construction services, manufacturing
and indirect material management — has led The Ideal Group to 2006 revenue of about $160 million. Smart Business spoke with
Venegas about how he got his company out of trouble by keeping his commitments and how he handles mistakes.
Keep your head up when you hit a rough patch. Six years ago, I lost 85 percent of my net
worth. But when we made commitments, we kept the commitments.
Some guy that I owed $200,000 to and I
just couldn’t pay him, I said, ‘Listen, I
can’t pay you. I can file Chapter 11, but
that’s not what I’m going to do. I’ll give
you $15,000 a month until the bill is
paid.’ Guess what? He got his $15,000 a
month until the bill was paid.
When you live by the Golden Rule —
‘Do unto others as you expect them to do
unto you’ — it makes things easier.
Everyone gets himself or herself in some
trouble, but it is the way you get out of it
and handle it.
The customers are key. We explained
our issues to the customers. We had
meetings with our employees, which is
real, real important. They hear that you
are on credit hold or changing vendors or
the general nervousness of the management. For a while there, we were spending 90 percent of our time on problems
and 10 percent on new things. Now, we
spend 1 percent on problems and 99 percent on new things.
In addition, being able to have your
door open if they wanted to ask you a
question. Leave it open, and let your
creditor and anyone who wants to know
anything be able to call you.
Be consistent. You can make changes
because you think you are bigger or
because you think you should, but something got you there. Say you have a certain grocery store that you really like to
go to; they have everything you like.
They have that steak you like, and you
might pay $2 more a pound, but it is
always nice. The place is clean, and it
just keeps you coming back.
Now, they change the kind of meat,
they change what they do, maybe they
change the manager and maybe they
aren’t as nice to you, and all of a sudden that store doesn’t give you that, ‘Wow.’
I always like Nordstrom. You go in
Nordstrom, and it is consistent all over
the country. They set the core values, put
them in place and said, ‘We aren’t going
to change them.’
That is the biggest thing I lost when
bringing on a new lead manager seven
years ago. He did not share the same values on the corporation and my values.
I’ve been through some real tough times
here, and most of the people stayed right
with me because we were very upfront
with things.
It’s more of the values that brought you
there that are the most important. Are
there changes in your accounting or
things you do? Sure. But it is keeping
your consistency on what got you there.
Be willing to start over. I can go back into
times when I have this great idea, and I
take it to my customer and say, ‘What do you think of this?’ They say, ‘We
don’t think much of it because we are
going to be doing this.’ Now I found out
before I fail, maybe it’s time to ask some
questions on what I am going to try
doing.
Prepare yourself on what the customer wants. One of the key things we
do here is we manage customers really
well, but customers don’t like that saying. But technically, when they ask us to
provide a service to do something, they
are telling us to take care of this.
Part of the check-off box is managing
what you are going to sell them. If you
are in the service side of things, it’s really important to know, understand and
manage your customer. You want to
take care of his needs, and that’s our
job.
Find people who will give it to you straight. Many people don’t want to hear they are
doing badly. You need someone hammering on it. You can be an owner or
manager and know all about the financial but find out you know very little.
You have to have people that will tell
you the straight story. I had a great
accountant that worked for me for
years, and that management guy I
brought in got rid of him. As soon as I
got rid of (the management guy), I got
the accountant back, and he comes in
every month and goes through things.
Not so much to find fraud but to take a
look, see what is going on and make
sure that everything is going the direction that you want, as well as being able
to ask, ‘Why not?’
A lot of guys don’t want to hear that
they are doing bad or burning cash —
[they think] entrepreneurs are super-stars and can do almost anything, but
that’s not true.
HOW TO REACH: The Ideal Group Inc., www.weareideal.com or
(313) 849-0000