Tandy Leather was a family owned business located in Texas. Dave Tandy was a partner in a leather heel and shoe repair business which was founded in 1919. Charles Tandy, the son of Dave, took over the business after World War II and changed the business’s focus to leather craft after seeing how leather crafts were being used as therapy for injured soldiers. Charles learned many valuable lessons during these early years. When a leather dye company offered to sell him 10 different dye colors, Charles bought an inventory of all 10 colors.
Soon all of the white dye was sold, but he had nearly all his purple inventory left. The first lesson he learned was to think about your inventory and track your sales. Do you have not enough white and too much purple? Next, Charles saw how his dad and his partner worked tirelessly on the business. Lesson number two was business ownership means the owners will work extra hours– not for you or the company, but for themselves because their money is at risk.
Tandy Leather was acquired in 1956 by General American Industries (GAI), but GAI lacked a cohesive direction which soon began a power struggle. Leveraging his resources, Charles raised additional money and exercised his stock options to successfully take control of GAI.
The name of the company was changed to the Tandy Corporation and the company continued to sell craft supplies under Charles’s leadership. By 1961, the Tandy Corporation operated 125 stores and had a thriving mail-order business. Lesson number three was to track your mail-order sales to discover where your customers live. After discovering where your customers live, go to that city and find an intersection that everyone in town knows. Keep walking around in ever-increasing circles until you can afford the rent to open up a new store. However, in spite of operating 125 stores, Charles was looking for a new edge and began looking at the electronic craft industry. Charles became convinced that the do-it-yourself movement was gaining momentum and spotted an opportunity.
The year was 1963. Radio Shack operated 9 stores, but was on the verge of bankruptcy. Charles Tandy studied Radio Shack for over 6 months and figured that their issues were all related to poor management. Tandy spoke to his board of directors, saying he wanted to buy Radio Shack. The board was not convinced. Charles was so sure the electronic hobby space was the next frontier that he decided the only course of action was to play hardball. He said he would sell all his Tandy stock and do it alone if the board didn’t agree.
The board knew if Charles sold all his stock, it would cripple the Tandy corporation so they reluctantly agreed to buy Radio Shack. Lesson number four was sometimes people don’t share your vision and you have to be willing to go it alone if need be. Although Charles knew nothing about electronics when he acquired Radio Shack, he grew the business to its height in the year 2000 to over 7,100 stores and over 4.8 billion dollars in sales. Lesson number five was vendors who are not getting your business are much more anxious and motivated to give you their best price. Business owners can learn a lot from Charles Tandy’s experience.
Do you track your sales to see what is hot and what is not? Do you enjoy the tireless effort from multiple equity partners? How will you locate your next new store? How far are you willing to go to convince others you are right? Are you aware of the vendors that would desperately love to be your supplier?
