Value Added: An electrical engineer’s circuitous path to entrepreneurship
By Thomas Heath,
So how does a 62-year-old Purdue University electrical engineering whiz end up building decks for a living?
The answer lies in reinvention, which has led John Barrett on a circuitous career path— including stints running high-tech teams at Motorola and owning a chainlet of retail computer stores. He has found financial stability — and an outlet for his urge to build stuff — in a outdoor living space company called Archadeck.
I love talking about people who are able to remake themselves, and Barrett is one of those people. His Montgomery County deck-building business grosses more than $1 million a year, allowing Barrett a comfortable, $80,000-a-year living.
Barrett has gleaned important business lessons along the way, including the importance of financial checks and balances, but he is most proud of reinventing himself. The key, he said, pulling a page from the Nike playbook, is to Just Do It.
He learned about taking initiative early on in his father’s basement laboratory, where Barrett, the third of four children, tinkered with ham radios, stereos, computers and color televisions at their Indiana home. His first car was a junker that he spent two years rebuilding before it would run.
“My dad was a scientist, and he got me excited and involved in technology,” Barrett said.
After graduating from Purdue with a degree in electrical engineering, Barrett started at Motorola in the spring of 1974, earning $11,500 a year while working on improving the battery life of walkie-talkies.
The computer junkie eventually worked his way into developing some of Motorola’s early cell-phone technology. But all the while, he harbored an urge to run his own business.
In 1983, after turning down a transfer to Malaysia, he took $85,000 of his retirement savings and invested in the budding computer retail chain called ComputerLand. He liked the company for several reasons — and it had only 20 stores, so there was growth potential. With its big sales floors and wide computer selection, ComputerLand was a bet that the appeal of the personal computer would expand beyond the geeks and become the Silicon Valley version of Henry Ford’s Model T, with one in every household. (A fellow named Bill Gates thought the same thing.)
“I was doing my due diligence, and I can remember talking to other store owners in Silicon Valley. I asked one store owner, ‘Am I jumping of a cliff?’ He grabs me and says, ‘If you are thinking of doing it, just do it. Spend the money and get into the business.’ ”
The Small Business Administration guaranteed his $250,000 loan, which funded his first store in Virginia Beach. Sales were tepid for a few months, then rocketed once the IBM PC came to market.
“I had people coming up to my store from North Carolina to buy IBM PCs for their hamburger chain,” he said. His store was soon grossing a couple of million a year, producing a $200,000 profit, which Barrett used to expand into five stores in the Tidewater area.
When Best Buy, CompUSA and then Dell, with its direct-distribution model, came along, his profit margins shrunk from 45 percent to 15 percent. At one point, he was saddled with hundreds of computers that he couldn’t sell, which taught him another important lesson: sell them at a discount — fast.
“Recognize that the environment can change quickly and you need to make decisions and purge things quickly,” he said, adding that he had to break away from his formulaic training as an engineer and learn to think fast and outside the box.
He sold half the business for $500,000 to his partner in 1985 and put the money into more ComputerLand stores.
He has two regrets from the ComputerLand years. He picked a business partner based on friendship, which he said was a bad idea. Secondly, he should have gotten entirely out of the computer retail business when he saw the Dell train coming down the tracks.
“I never thought people would buy a computer from Dell, sight unseen,” he said, regretfully. In the end, Barrett liquidated his assets, losing all his money except for his home. He was $300,000 in debt.
He eventually hooked up with Motorola in Chicago and worked his way to the Washington region. After working for 22 bosses in 18 years, traveling all over the planet, the company laid him off from his $150,000-a-year job in 2000 — with a generous two years of severance.
“I was researching what am I going to do the rest of my life,” Barrett recalled.
He retreated to his basement, where a Web search yielded Richmond-based Archadeck, which was founded in 1980. He liked the idea of owning his own business, and he wanted an outlet for his creative urge to build things.
He bought the franchise rights for Montgomery County in 2001, just after Sept. 11. He financed the start-up costs, including franchise fees, with $80,000 from his Motorola severance package. He later purchased the Howard and Anne Arundel territories from another businessman.
He attended a four-week Archadeck orientation class in Richmond, where he learned everything from the franchise’s bookkeeping system to designing, pricing the jobs and building the decks.
Archadeck’s offices has a state-of-the-art computer drafting department, Web development for marketing, and a sales and lead-generation division to help bring in work. Barrett pays 5.5 percent of his gross revenues to Archadeck in return for using their name and services.
He generates his own business through a combination of Web-based advertising, direct mail and home shows. He plants signs on non-state roads throughout Montgomery every weekend.
“We try to create as many impressions as possible,” he said.
Barrett runs the business from his basement. He has surrounded himself with a team that includes a full-time office manager/construction manager, part-time accountant, part-time administrative assistant and three separate subcontractors who build his decks.
The core of Barrett’s business are decks and screened porches. The company will build between 46 and 60 of them this year, averaging around $25,000 each but sometimes rising as high as $140,000.
His top-grossing year was 2006, at $1.7 million, earning the business a 10 percent profit after costs. The business crashed in the downturn. He laid off his staff but has slowly rebuilt revenue to over $1 million.
“One of the keys to reinventing yourself and starting over is to have enough confidence in yourself,” he said. “Like when I learned to rebuild my first car, you have to have the confidence, the discipline and the perseverance to acquire the knowledge and skills to be successful.”
For previous Value Added columns go to washingtonpost.com/business.
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