When Marvin Carroll’s Tec-Masters Inc. landed its first military contract–a $25,000 deal to support a rocket launcher–it seemed he was well on his way to becoming a successful entrepreneur. After all, he had spent 30 years designing weapon systems for and working with the Department of Defense as a civilian contractor. His experience in systems engineering, logistics, and programming was coupled with the knowledge, pedigree, and contacts to establish a business in the government contracting space. But he realized early on that sometimes those things do not guarantee success.
There are always costs involved with fulfilling a contract, something Carroll learned the hard way after the company failed to net a profit from its inaugural deal. “I found out how quickly a $25,000 task could disappear because you spend that money fairly rapidly,â€ says Carroll, the president and CEO of Huntsville, Alabama-based Tec-Masters Inc. (No. 53 on the BE Industrial/Service Companies list with $71.9 million in revenues). “You spend every penny on it.â€
It was roughly a year before a second deal was in place, with Carroll spending much of his time identifying new customers and learning their conditions. “It’s not so much how good you are or what you know, it’s all about a customer’s requirements,â€ says Carroll, who has a doctorate and master of public administration from Nova University; a bachelor of science in electrical engineering from Howard University; and graduated from the Defense System Management College in Fort Belvoir, Virginia. “It’s your job to try to understand them and try to convince that customer that you’re the one who can satisfy.â€
Carroll also learned firsthand that the biggest challenge for any entrepreneur is cash flow. “My survival kit was the very fact that I had retired and I had a guaranteed income, so I could take things and stretch them out and go without for an extended period,â€ he says. He also notes another strategy potential contractors can employ to secure funds during the lulls. “You can also call ‘rich uncle’ and ask to borrow enough money to cover expenses for a two-month period. And by ‘rich uncle,’ I mean First National Bank and First Commercial, and they charge you interest on that money you use [to cover expenses] while you’re waiting to be paid by the government.â€
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