Article taken from: www.supplychaintech.com
Outsource procurement service company ThreeCore builds business, then profits
Kimberly Nelson Hatfield Special To The Journal
DANVERS--Driving into work one day in the fall of 1999, Thomas Petersen, president of ThreeCore Inc., decided it was time.
"I had this terrible fear that I would be in the old age home saying `Could've, should've, would've.' So I called my wife and said `Today's the day I am going to quit.' I had an idea of what I wanted to do but it wasn't terribly well formulated," Petersen said.
His idea was to solve a problem that he faced in business: better procurement. "You never have enough time, talent and resources to go out and find the right suppliers at the moment that you need to make the selection," he said.
Partner Thomas Collins, vice president of operations, bought into Petersen's idea because of his drive to solve a business problem. "I would have to say I never wanted to be an entrepreneur. But the idea of finding clever ways of executing standard business practices is a treat."
Together with a third investor, they built ThreeCore, a Danvers-based outsourced procurement services firm for custom direct materials. Already, the company has 20 clients, revenue estimated at greater than $500,000 this year, and $2.2 million in venture capital financing.
ThreeCore's foundation, however, was built on "hard knocks" and hard work, Petersen said.
Petersen began as many entrepreneurs did, by writing a business plan and seeking investors.
"I remember going to one venture firm that had just closed an $800 million round for their own fund and I thought, `They must have $2 million.' I had no idea that they couldn't invest that small of an amount. I learned through hard knocks how to call them up, how to get introductions, which ones were more likely to invest in my area."
But with his calls left unanswered and the business plan unrealized, Petersen became discouraged and took a few days off. "That was the turning point in the business," he said, proving to him that "the answer here is not asking for money, but getting started. Tom and I and one other guy ended up throwing some money in and got the business kicked off."
The decision to risk personal money to finance your ideas is not so easy, Collins said.
"My kids are teen-agers going off to college, and Tom has three babies. So our risk profiles are somewhat different. Making that level of commitment was something that we put a fair amount of thought into," he said. "I am happy that we did that vs. keeping money in some publicly traded stock that has dropped 80 percent in the last three quarters. We are currently proving our business model in the Northeast region," said Collins.