High barriers can be a good thing

Monday, May 29, 2006
By Joe Gomula, as told to Plain Dealer reporter Marcia Pledger

We sell batteries for every thing from watches and iPods to bulldozers and automobiles.
About 95 percent of our business comes from other businesses needing batteries to run or back up everything from lawn mowers to emergency exit lights. But the fact is, we can sell any kind of battery. That's a tough message to try to spread.

But I'll take that challenge any day of the week over my previous business, a landscaping company. When I was looking for a new business venture, my goal was working in an industry with educated customers and workers.   In my business, even the guy who delivers and installs a battery has to be educated. For instance, an industrial floor scrubber takes six batteries. If they're wired incorrectly, the machine is either not going to work or it's going to sustain some type of damage.

I spent six years running that landscaping company. My biggest mistake was starting a business in an industry that was seasonal, required a great deal of expensive equipment and had very low barriers to entry.

My landscaping company started off as a tree-stump-grinding business that I operated by myself for a long time. I eventually built the company to a full-time tree and landscaping business with six employees and $150,000 in equipment. The bigger the company got, the less money I made. Insurance costs alone were astronomical because it's a dangerous industry. I also had less free time and way more headaches.

My competition ranged from very high quality companies that hired skilled professionals to some guy who bought a pickup truck and a chain saw. That unskilled guy probably never even cut a tree down before calling himself Billy Bob's Professional Tree Service.

The problem was that Billy Bob was driving the industry, not my respected competitors. Billy Bob is the guy who has no insurance yet has the most accidents. He's the same guy who wins a bid to cut a tree down for $400 when respectable companies like mine would have to charge $1,000.
Needless to say, Billy Bob is going to win the business. He's also the guy who lasts one season and then goes out of business - leaving behind a bad reputation for shoddy work and a low price point that the customer now believes to be normal.

I tried hard to stay in the business. I changed my business plan and strategy a few times. I also spent a lot of time working with counselors at Business Advisors of Cleveland.

Finally, I gave up. A couple of years ago I told my counselors I was preparing my résumé because I needed to get a job. They reminded me that I had what it takes to be a successful business owner.

I didn't see it then, but I guess they were right. They helped persuade me to take my knowledge and experience and transfer it to another industry with high barriers to entry. I looked at several industries before choosing the battery business. This field requires an educated work force, and the cost of doing business is much more in line with potential to earn a profit.

Ohio Energy Source-Total Battery Supply operates with three management-level employees. And the vast majority of our competition is good for the industry. We sell only quality products. Our customers know that just because they can buy a battery that fits their application for $10 less, that doesn't mean it's a good battery.   Our customers all have different needs. One customer might just need an inexpensive battery to go into products like remote controls and smoke detectors, while most customers come to us for good quality batteries to back up computers or power police cars.