Pat Fitzgerald has kept his small business running for over 40 years, despite evolving trends and technology that could have easily put him out of business a long time ago.
How has he stayed ahead of the curve? How has he managed to transition his business model over the years?
“Keeping it in family,” Fitzgerald sat down with his daughter Colleen—Fundera’s Senior Relationship Manager—and spilt a few of his secrets on keeping his business alive and well for 4 decades.
1. Have you always owned your own business? If not, what were you doing before starting your own company?
After graduating from college in 1975, I took a job with a publicly traded printing company as a salesman.
2. What made you want to start your own company?
After 2 weeks of training in that job, I was assigned to call on large banks and financial firms in downtown Chicago. My charge was to only call on the large institutions and focus on sales that would become contractual relationships. But this was a long sales cycle, so I started cold calling smaller companies that were in my territory and began to establish relationships, provide printing solutions to solve their problems and booking a lot of orders. My employer liked the new business, but these orders were always scheduled to complement the open press time that wasn’t being used by the larger contractual clients. And I was still asked to focus on larger firms.
After 10 months, I decided to break away and start my own company. My target market was small- to medium-sized financial service and exchange trade clearing firms. At this same time, Options trading (CBOE) was just beginning to take off, and I cold called every clearing firm in the city. I began to produce trading cards, machine tickets, and floor orders. I expanded to the American Stock Exchange, NY, and Pacific Exchange, SF. It was a great run…. The industry continued to expand and I invested in my company to service the growth.
As for starting my own business, I knew by the time I was 12 that I would own my own business. As a caddie at a golf club, I decided that someday I was going to be on the other side of the golf bag.
3. What were the biggest challenges in getting your business off the ground?
Getting my business started was not difficult for me. I wrote my business plan over the weekend. I took a 50% pay cut and started cold calling prospects. Luckily, I always developed good relationships with my employees, suppliers, customers, and competitors. Sharing ideas and best practices was good for everyone in our industry.
My bailout was that I was a good driver and knew the city well…. I’d be a cab driver if I needed extra income. Being single at the time certainly made the decision easier.
4. How did you balance the “entrepreneur” life with your personal life?
When I started the business, everything else took second place. My company was not going to fail. This had a negative affect my social life, of course. Fortunately, my girlfriend stuck with me during this “psycho time” and we eventually married and have a great life together (with three wonderful daughters).
5. Your business model has “evolved” over the years. Can you talk through what you do now and why you made the transition?
During the 80s and 90s I supplied many Chicago Board of Trade, Chicago Mercantile Exchange, and Chicago Board Options Exchange members with their trading tickets and forms. I had a truck delivery going to each location once a day. At the end of the trading session, over 50% of all the paper swept off each exchange floor was produced by my company. We had market size, manufacturing expertise, pricing structures, and relationships that made us the vendor of choice.
As the industry expanded and traders needed to trade higher volumes with higher speed, the handwritten ticket process needed to be replaced. This is when handheld trading machines (which looked like large calculators) got introduced to the exchange floors. These handhelds were going to make the paper transactions obsolete. This same technology reinvented the way trades were to be transacted in the future. The open outcry system began to evaporate and these trades are now done on computer screens anywhere the trader wants to be. This is digital disruption at its best!
Since I saw the technological change coming to my largest market early, I decided to move into new products and services that I would provide for these same clients. I continued to supply traditional trading floor paper and used that revenue to invest in new technology.
I kept meeting with my clients and learned more about their business challenges.
One large financial client was interviewing offsite data centers. This contractor was to have a data center that would be a redundancy facility where all my client’s transactions would be backed up in real time. Since the contractor was selling this service to many financial firms, my client was bemoaning the cost—several million dollars—and limited access to terminals in the event of a real emergency.
I researched this business and saw an opportunity to build out a data center and sell this service. Close proximity to clients was critical. I already owned a large building near the Chicago financial district. By partnering with my client, I was able to use their technology and facilities management team to build out my data center. They, in turn, were given a greatly reduced service contract. The data center is a 24/7 operation that my client monitors over terminals and cameras. He has no employee at my location. There are scores of workstations ready to be manned in the event of an emergency evacuation. On 9/11, our client had to evacuate their LaSalle Street offices and for 36 hours we had over 60 people doing their jobs from our facility. This is a wonderful win/win relationship that’s still in effect today.
6. What advice do you have for other entrepreneurs thinking of starting their first business?
I follow these 4 tenets:
- Maintain a sense of urgency. Don’t put off until tomorrow what you can do today.
- Take ownership. Once you commit…. Do it.
- Take care of those who take care of you—co-workers, clients, suppliers, friends, and family.
- Embrace change.
7. What advice do you have for entrepreneurs who need to adjust to trends and change their business model?
The idea that any business can build a moat around itself and be safe from attack is hard for me to accept. We should always be keen to the fact that the window of opportunity quickly closes. If you have a product or service that’s profitable, I assure you someone is going to try and offer something better or cheaper. So why don’t we look to improve the product or service?
Finally, stay close to your clients and listen to their needs.
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.