A Profitable Pivot
Suzanne and Cathy Mader
Two ambitious California women left their respective careers in food and beauty supplies to start their own business as utility equipment distributors.
Business: Mader Supply LLC (distributor of tools and equipment to utilities and contractors)
Principals: Cathy Mader and Suzanne Mader
Location: Sacramento, Calif.
Suzanne Mader and her sister-in-law Cathy Mader have proved that you don’t need a background in infrastructure to enter infrastructure. And not just enter it, by the way, but take it by storm as nascent entrepreneurs.
Before the launch of Mader Supply nine years ago, Suzanne was a district manager for a large, family-owned salon and beauty supply business in California. Cathy worked for a national food supplier. When they both moved to the Sacramento area for their husbands’ jobs, they found themselves re-thinking the next chapter of their professional lives.
The Idea
“I was listening to my brother-in-law and my husband talk about the need for a particular type of supplier in the power utility industry,” said Suzanne. It would involve the start-up of a new company, acquiring local, city, and state certifications; qualifying for bid work, maintaining an office, and learning the complex materials and processes of the electrical power grid. “My brother-in-law and husband looked at me to see what I was thinking — I was in! This was the change I needed. Later that evening, Cathy was also in, and our collaboration began.”
The Learning Curve and Lift Off
“We started Mader Supply on a shoestring budget,” said Cathy. “We leased an office at another company for only a few hundred dollars a month. Our starting capital was less than one thousand dollars each.”
Although Cathy and Suzanne had extensive experience in competitive sales, they needed to learn about the products and the utility market. An electrical engineer with experience working with manufacturers, vendors, and the power utilities, Cathy’s husband, Jeff, provided extensive insights and introduced them to his industry contacts.
“We soaked up all the information we could and dove in,” said Suzanne. “With our first vendor account came a very knowledgeable and skillful salesperson, Jason. To this day, he is one of the people I consider as having mentored us the most. Our startup niche was bidding on diversified RFQs; Jason had been partnering with these small, diverse companies and selling into the utility markets this way. He saw that we were competent in our bid work and suggested we expand our sights beyond our local utilities.”
In just about six months, Suzanne and Cathy became self-supportive with Mader Supply.
The Challenges
Bonding has presented one of the biggest challenges. In order to bid on larger material contracts, the Maders need to bond. “A bond company wants a company's first bond to be around $100,000 to $300,000. That dollar amount hasn't ever required a bond in our field,” Suzanne explained. “So, we are stuck in limbo. We are biding our time to have some of our larger, non-bonded, term contracts expire. This will then be a reference to hopefully qualifying to bond for those larger contracts we have our eyes on.”
The Risks
The Maders’ biggest risk is being the prime contract holder between their supplier or manufacturer and their customer (the utility company or contractor). As a prime, they assume all the risks of non-performance, warranty, returns, mechanical failures, and missed deadlines. “We rely on everyone doing their best to ensure these do not become an issue,” said Suzanne. “You must stay in communication, even if it's bad news, so your customer and your supplier know you are actively working on the problem. You have to look at all options and seek out the best outcome for all.”
Lightning Round
If you could do it over again, what would you change? I think we would have named the company differently. Wrong conclusions were made by others based on our [marital] name. But now that our name is known and our reputation formed, we would not change it at this point.
What’s your advice to someone thinking about starting her own business? Research if there is a need for what you are wanting to do. If that need is being filled, can you do it better? Also: Spend the money to get professional accounting advice and business structure advice from the beginning.
How do you celebrate your success? We take our husbands out to dinner!
How do you lend a hand to other women? When we find other woman-owned businesses, we reach out. They could be vendors in the industry or just a local owner that you can support.
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