Nick Baucom was 23 and flat on his back in 2007 after his nascent home fixer-upper business in Memphis, Tenn., went bankrupt.
“I made a mistake and had bitten off too much,” said the former-Marine and Iraq War infantryman. “I mismanaged cash flow. I had a Home Depot credit card bill for $2,000. I owed one person $3,000 on a job I never completed. I also had $200,000 in loans and monthly payments on three homes. More money was going out than coming in.”
Now 30 and running a growing Alexandria business called Two Marines Moving, the hard-charging veteran said he eventually made good on his debts and learned some important lessons about business.
(I can tell you from personal experience that one of those lessons is: Make your mistakes early in life and learn from them.)
Baucom, who said he would rather go back to Iraq than go through another bankruptcy, lists his three takeaways thusly:
“Perseverance. I had a business that did not succeed. It was maddening, frightening and depressing. I didn’t let any of that stop me. I learned from my lessons, haven’t repeated them, and now I have a company that made Inc. Magazine’s list of fastest-growing companies in America.
“Leverage. I could grow Two Marines Moving at an even faster pace than our current trajectory by taking on debt or investors, but doing so would invite a host of new problems. We grow organically, reinvesting our profits in the company.
“Proficiency. I didn’t know how to do every job of everyone I employed with the construction business. I didn’t know the details of carpentry, plumbing, etc. Now, I know how to do every job that is done at Two Marines Moving . . . mover, driver, sales consultant, dispatcher, recruiter, marketer.”
I have written about moving companies before, including Kane Companies and College Hunks Hauling Junk. Guys such as Baucom — who joined the Marine reserves out of high school, was called up and sent into combat in Iraq — impress me.
For someone whose pulse jumps just going through an airport security check, I cannot fathom the kind of situations he and his colleagues experience. He rose to sergeant and commanded 40 Marines before he was honorably discharged. He speaks with the earnestness of someone who took a Dale Carnegie course (in fact, he did).
Two Marines Moving expects to gross $4.2 million this year, said Baucom, who as founder and president takes a salary of around $150,000. His ex-wife Christy Gutmann, who is co-founder and president, earns slightly less.
The vast majority of Two Marines’ business is residential, with a small slice for commercial moving. The typical customer has an above-average household income and lives within 60 miles of Washington. The company will move people to Philadelphia, Virginia Beach, even New York, but the move must start in the D.C. area.
Most moves cost between $900 and $1,600.
Baucom, a voracious consumer of business biographies and business how-to books, said the labor payroll on 60 full-timers and 40 or so part-timers is 50 percent of his cost, or a little over $2 million this year.
In search of extra income and to extract more profit from the warehouse, Baucom last year launched a storage business that now occupies 85 percent of the warehouse and brings in around $25,000 a month.
The company expects to earn a $168,000 profit this year, which is a slim, 4 percent margin. He rolls that profit back into the company for things like equipment and to recoup the $60,000 he spent to start the storage business.
“I could take more money out for myself, but I would rather grow the business than take vacations to satisfy some immediate gratification. This is a marathon, not a sprint.”
He has around $700,000 invested in 20 trucks, which also serve as roving billboards. He keeps the trucks under 30 feet long, which means none of the drivers is required to have a commercial driver’s license, which would invite greater government regulation. Also, having a fleet of similar trucks is simple for repairs and for drivers.
Two Marines charges $69 an hour for its services, which is on the high end of movers. Baucom pays his movers between $16 and $24 an hour, which includes tips and bonuses.
The age of the average employee is 26, and he only hires military veterans.
Baucom comes from a military family. His grandfather was stationed with the Army at Schofield Barracks, near Pearl Harbor, when Hawaii was attacked in December 1941. His father later fought at Guadalcanal before being shipped back to the United States, where he recovered from various diseases in Colorado.
Baucom grew up in Memphis, where his father is a driving instructor and his mother just retired from a job in the city’s schools.
He liked making money. Baucom was suspended in fifth grade for selling overpriced baseball, football and basketball cards out of his desk.
After watching the 9/11 attacks while in a high school Spanish class, he decided to join the Marine Reserves after graduation.
As a baby-faced 18-year-old, he spent 13 weeks at Marine boot camp in Parris Island, S.C., in 2002. He was released to go home after training, but shortly after enrolling at the University of Memphis, he received a phone call that his unit was being activated in support of Operation Iraqi Freedom.
“I was a grunt, a ground-pounder,” said Baucom, whose reserve unit was attached to the 1st Marine Division. “I wouldn’t have it any other way. I love a challenge.”
After the home contracting business failed, he followed his future wife to the Washington area in 2008, where she had a job as a recruiter for Robert Half, the national placement agency.
“I wanted to be where people move with a purpose and you stand on the right side of the escalator so that others can pass you.”
He saw an opportunity in the moving business, where friends and families were e-mailing and phoning to ask them to help move. Instead of taking his compensation in beer and pizza, he decided to start charging. Then he created a business out of it, based on the Marine brand for trust and getting the job done.
“I was just an entrepreneur trying to fill a need,” he said.
He launched Nov. 10, 2008, on the birthday of the Marine Corps.
Baucom designed his own Web site in three days. His first hire was Nov. 20, 10 days after the company was founded. His low credit score due to his bankruptcy prevented him from getting a truck loan, so he rented trucks on an as-needed basis and held company meetings in the parking lot of a Penske Truck Rental lot in Alexandria.
The hard-charging Marine has since fixed the truck loan problem. With profit pouring in every year, last year he bought four Ford trucks worth a total of $250,000 with just his signature.
The bankruptcy is in the rear-view mirror.