Interview with Successful Cenla Entrepreneur, Joe P. Cunningham, Sr. - Cunningham Agency, Inc.
Joe P. Cunningham, Sr.
Cunningham Agency, Inc.
Words of Wisdom
- Go look for some mentors. People are willing to help you if you ask, but you’ve got to ask. There are things you need to know that you don’t know yet. You are going to make mistakes; learn from them.
- First impressions are not only important, they are powerful. If you are slovenly, your appearance isn’t good, or if you’re not dressed properly, your first impression is not going to be good. Appearances do matter.
- Don’t be afraid to be afraid. You will fail sometimes. You won’t be successful a hundred percent of the time, but you can’t expect to be. You just have to go for it and get some help, whether it’s your wife, your husband, kids, parents, consultants, mentors, or your partners.
- Don’t assume partners agree; find out whether they do or don’t.
- You’ve got to make your own way, and the way to do that is to cultivate relationships and satisfy your customers, but also satisfy your suppliers like your banker.
- Don’t think that because you’ve done one thing you’ve completed the job. You have to think, “What other aspects are there to this question or issue?” You don’t have the issue resolved yet; there’s more to it.
- You have to balance your life. Discuss your goals with your wife or your partners so that everybody is comfortable and you’re not creating additional problems. If things aren’t going too well at work, don’t take those issues home with you, and you better not bring your issues at home to work, either. Pay attention to both.
Entrepreneurial League System
Mentor Interview Form
ELS Mentor Interview: Joe P. Cunningham, Sr., Former Owner, Cunningham Agency, Inc.
Date: October 12, 2009
Location: Alexandria, LA
Interviewer: Felix Mathews
“Tell us a little bit about your background. Where were you born and raised?”
“I was born in Natchitoches, in 1940. I attended St. Mary’s School, went to Northwestern State University for two years, then transferred to LSU and graduated in 1961. I went in the Army for two years, came back and in 1964 and entered the family business, Cunningham Insurance Agency. In 1971, we incorporated the business as Cunningham Agency, Inc.”
“Was that your first job?”
“When I was twelve years old, I sold newspapers on the street for a dime. As soon as I graduated high school, I became a disc jockey at the local radio station. I turned 17 and entered Northwestern; stayed there for two years. During that time, I worked nights and weekends at the radio station. In fact, my first semester at Northwestern, counting freshmen orientation, I took 21 hours and worked 60 hours a week at the radio station. I didn’t have a car, so I had to either hook a ride, or ride a bicycle from work to school and from home to school. My sister and two brothers had gone to LSU, and I thought that was something I needed to experience, so I left and went to LSU. I majored in journalism because my uncle, who owned the Natchitoches Times at that time, wanted me to come into business with him, but I decided journalism was not what I wanted. I finished journalism at LSU and had a lot of fun writing for the Daily Reveille, interviewing Paul Dietzle, Athletic Director, Jim Corbett, and the other LSU coaches. I learned a little something about how big-time sports operate.”
“How did the business start?”
“My mother was an employee at a local bank, in the days before banks financed automobiles. Three local bank personnel formed a company, Auto Finance Company, to finance school buses primarily, plus trucks and cars. My mother ran that. When banks began to do automobile financing, my folks needed to find something else to do. My mother and my father, who was an attorney, got into the insurance business in 1935. My mother ran the insurance business until I came back in January of ’64, and that’s when I entered the insurance business. She retired around 1971, which is when I incorporated the business and bought her interest.”
“Was your business profitable the day you walked into it, or is that something you had to work on?”
“Profits were very small forty-five years ago, but it provided a living. Part of my job was to sit down and type out insurance policies. The annual premium for some of them was $25. Well, you didn’t make very much. We had to provide good service to our customers so we could get references. We had to be good at what we did, so people would recommend us to other people. In those days, there were fifteen independent insurance agents in Natchitoches.”
“In 1982, we insured a business here in Natchitoches and the owner told me, ‘I’m about ready to shut the door and retire.’ I realized that he had a good business, and didn’t have any buyers. Interest rates were extremely high, and he couldn’t find a buyer with money anywhere.
“I thought about it a lot, and said, ‘I don’t know anything about that type of business, but I do know that it’s one that people just have to use, so there was a demand there.’ I went to a local banker and asked for help. The owner agreed to finance the business for me, but I had to raise the down payment. I did have to go through the process with the banker, and of course, his first question was, ‘Yes, you have a good idea, but what are your assets? What’s your collateral? We don’t finance that type of operation. You’re asking me to lend you money for inventory, things that we just don’t finance. What other collateral do you have, because the collateral you are talking about is perishable. It’s not real property, and we just can’t do that. Our stockholders would fire me if I did.’
“So, I had to go out and get a partner or two, and we worked out something that pleased the owner and the banker, and were able to buy that business. That’s when I began to develop relationships with bankers.”
“What business was that?”
“It was a grocery store called People’s Food Warehouse. Mr. Wesley Stephens had been there for forty-four years. He told me he hadn’t had a vacation in forty years, that his feet hurt, and he’d tried to sell that business. He had advertised it in the Wall Street Journal, the Houston Post, the Atlanta Journal, all over. At that time, interest rates were anywhere from 18 to 22% . He had one other choice, and that was to liquidate the inventory, close the doors, and go home.
“I said, ‘This is too good a business to let him close the doors.’ He was doing a lot of business at the time. I didn’t know anything about the grocery business, but I was insuring him at the time, and I knew what his sales and receipts were, and what his payroll was. I knew there had to be some margin there, even if I didn’t know anything about that type of business. I figured I could find a manager maybe, somewhere, and we were able to do that.”
“How long did you operate that business?”
“We still own it. In 1957, when I graduated from high school, I went to work at the local radio station. In 1990, my son and I bought that radio station, along with another one. We owned them for a few years. The man who owned the station and gave me a job when I was sixteen, I hired him when he turned seventy, and he still works for us, taking pictures and measuring buildings.”
“You bought the radio station and you were in the grocery business and your insurance business?”
“We bought two radio stations. One of them was an AM, and one was an FM. You might think that was an ego trip, because I worked at that station forty years before, and I didn’t really need a radio station, but it was for sale, and maybe they were going to close the doors. They weren’t doing a lot of business, and we knew a little something about it. My son had worked at that radio station also. He did the sports broadcast for football and basketball, and knew the mechanics of the radio business somewhat, so we kept it for ten or twelve years, and then sold it to some people who owned some other stations.
“Then we got into the real estate business. We bought a couple of pieces of property and leased them. We still own those two buildings. I was fortunate to be involved with a limited partnership created by some Alexandria people, Jimmy Thompson, Peter Staples, Johnny Downs, Bob Rayford and Ed Adams. They bought fifty-five hundred acres from Chicago Mill and Lumber Company in 1983, and I bought the first limited partnership interest from them.
“I thought buying Mississippi River bottom land was a great idea, so I went to a broker in Memphis who represented the principal owners of the Chicago Mill and Lumber Company, and found another thousand acre island on the Mississippi River. I began trying to buy it. Eight thousand acres, with a thousand acre bean field in the middle of it. We negotiated, and they agreed to do everything I asked them to do. They raised the road and put in big culverts so it was accessible from the big Mississippi levee. We negotiated a reduction in the price.
“That was in 1984, when interest rates were still going up. The Stock Market was still going down; inflation was going up. We were in the airplane on the way there, with our earnest money checks to buy the thing, when two of my partners decided that this might not be such a good proposition. They suggested that we try to renegotiate the price.
“I said, ‘This young fellow is going to throw your big self out of his office on your ear. It’s not going to fly. We’ve agreed to everything. We have the contract to sign. We have the earnest money checks in our hands to deliver.’
“We took a vote, and I lost. We didn’t buy it, but later on, that property was sold two or three times, and every time at a profit. I knew that we could succeed, but my partners didn’t. I was acting as the General Manager for that Partnership, and I hadn’t told them enough about how we were going to operate it to make them feel comfortable. That was my fault. I shouldn’t have waited until we were in an airplane, flying up there with the earnest money, to assure them that this was going to be okay. They got cold feet. Lesson learned: Don’t assume partners agree; find out whether they do or don’t.”
“Did you have any major obstacles back there that you had to overcome that you might share with some of our entrepreneurs, so they might avoid those or realize that these things do happen and it’s not just new to them?”
“It’s easy to make mistakes. After we bought Peoples Food Warehouse in 1982, three years later we decided we were doing okay in the grocery business, and I got a crazy idea to start another grocery store. I called Kroger in Dallas, went over there, bought the equipment out of a closed store, and had it moved over here. I leased a building and opened a second grocery store, and it was about a two hundred thousand dollar mistake. I kept it open for maybe a year and a half, or maybe two years. We didn’t have good success with that, so we closed the doors and said, ‘Let’s stop our losses before it ruins us.’
“It cost us money, time and sore feet. It was a good lesson. You know, you can’t do everything you think you can do. You better study it a little bit more. We thought if we could do it once, we could do it twice. Just because the banker said, ‘We’re willing to lend you some money,’ that doesn’t assure your success. I should have gone to a Small Business Organization or another like your organization for advice, and should have hired a consultant.”
“At that time, we didn’t have an SBDC. I couldn’t go to anybody. People like you weren’t available then. It was pretty much, ‘If you think you can do it and you have the guts to do it, and you can finance it, go for it. Just go for it.’ But, now a days, the amount of money that you must invest to do what we tried to do twenty years ago is a bigger risk, a lot more money, and you can’t afford to make a mistake that will set you back, but we survived it. I wish I had had some mentors to go to and really listen to. Somebody with experience that had told me, ‘These are the things that you need to know that you don’t know yet.’”
“Sometimes just bouncing ideas off someone neutral helps. Anything else that comes to mind or any advice that comes to mind, that you might offer some of our newer entrepreneurs?”
“I would repeat what I just said. Go look for some mentors. People are willing to help you if you ask, but you’ve got to ask. I tell people here in this office all the time, ‘Don’t think that because you’ve done one thing, you’ve completed the job.’ You have to think, ‘What other aspects are there to this question or this issue?’ You don’t have the issue resolved yet; there’s more to it.
“Over the years, if I was at home in bed at midnight and I thought of something, I could write it down or record it on a tape recorder and go to bed. Ideas would come to me and I would think about them. Kind of sleep on it a little bit. You don’t go do impulsively what takes a lot of thought. There are going to be problems in every business, so you should anticipate them. You should say, ‘What are they? Think before you leap.’
“When someone calls with a question, problem or issue, develop it, because you may think you have satisfied them in answering the question, but they really had more than one question, or there was more than one aspect of that question. You didn’t anticipate that, so you think you have satisfied that customer, and you haven’t. But you don’t know it, because you didn’t develop that issue or that question with that person, and say, ‘Have I answered your question, or is there anything else that I can help you with?’ If your business is going to succeed or fail on the basis of whether you’ve satisfied your customer or not, sometimes you have to ask them if you have done that. If you don’t, you are in trouble.”
“What are your thoughts in managing employees?”
“I’ll give you an example: When you have to fire somebody. You’ve given them instructions, the job description, and they know what they are supposed to be doing. If they don’t do it, you counsel with them, and you say, ‘This is not working too well, or this has got to stop, or you can’t do that.’ If they continue to do it, you’ve got to decide, ‘Do I have the right and do I have the courage to tell that employee I can’t take this anymore?’
“I had to fire two people at one time one day, and it upset me. I came back in here and sat in my chair, called my doctor’s office, and said, ‘I think I need to come over there and let you take my blood pressure.’ I had counseled those two, and there were just some issues they couldn’t resolve. They were counter-productive, disrupting the office, and I just had to let them go. I didn’t want to; we’re kind of a family, you know. We would like to get along, and we try to adjust and accommodate people. When it gets too bad, you’ve got to take things in your own hands and say, ‘Clean out your desk, give me your key. I’m not giving you any more opportunities. You’ve had enough, and I have now had enough.’
“There are going to be issues with personnel, with employees. You’ve got to deal with the Government, their compliance issues right and left, and when you take on operating a business, you’re not just managing people, you have to deal with third parties outside of your office. That’s one reason I decided that I had been doing that long enough, and I needed to turn that over. My hair had turned gray, and then fell out, and a lot of that was dealing with compliance issues, Government and payroll taxes, and all the things that people have to do to run businesses. It’s so counter-productive.
“If you’ve got energy that you want to spend, you want to spend it accomplishing something. If you’re not doing what you want to do, you need to be doing something else. If you’re not doing something that you’re comfortable with, you need to get rid of that idea or that goal or that project, and say, I’m not good at that, I need to do something else. You have to think about those things, and that’s one of the thing that mentors can help somebody do.
“We now use personality tests and aptitude tests to find out whether we’re hiring the right kind of person, because if you hire the wrong person and they’re not friendly to customers, you can’t sell these people something that’s as misunderstood as insurance.
“If you keep doing the same thing over and over, and it’s wrong, you’re in trouble. Sooner or later, you’re in trouble. You’re overcome by your competition, or you’re overcome by dissension and your employees quit, and boy, you’ve really had it. Everybody now has gone to what is called ‘Best Practices.’ Every kind of business that you can think of is adopting and using the Best Practices manual, so when that first came into the insurance industry, we began using it and we hired a consultant to help us implement it.
“We began to understand what Best Practices were for this type of business many years ago. There was no reason for anyone not to follow it. Those who didn’t aren’t here anymore. They failed, or didn’t grow sufficiently, and had to sell to some bigger competitor because they just couldn’t adapt to the Best Practices or because they fell too far behind. If you have that information available to you, study it, adopt it, go with it, use it, apply it and don’t ever get away from it.”
“If you had the opportunity to go back in time, what would you change or do differently?”
“There are always some things you would do differently, but you are going to make mistakes, and you just have to learn from them. We can’t go back, but we cannot make the same mistakes we made before. I have no complaints about anything. It could have been better; it could have been worse. I feel like I could have done more.”
“Is there any advice that you would give to those beginning a business?”
“You can’t ignore the other parts of your life and give your business one hundred percent of the energy, because you are going to ignore your wife, your kids, or your other obligations. You have to balance everything that you are doing, and discuss your goals with your wife or your partners so that everybody is comfortable and you’re not creating additional problems. You’re going into business for yourself, and you are going to have enough problems and issues to deal with without ignoring small problems elsewhere that are going to become bigger problems if you don’t immediately address them. You always have to be open to what people are saying, ‘You need to do this or you need to do that.’ If things aren’t going too well at work, you don’t take those issues home with you, and you better not bring your issues at home to work, either. Pay attention to both.
“In relationships both personal and business, one is as important as the other. You’ve got to make your own way, and the way to do that is to cultivate relationships and satisfy your customers, but also satisfy your suppliers, like your banker.
“Keep your lawyer informed, if you need the services of a lawyer. Don’t talk about fishing with your lawyer unless you are in a boat with him; talk about what you need. After dinner, you can talk about fishing with the lawyer, but during the day, your lawyer is as busy as you are. Get your point across to him. The same thing with other people; we waste a lot of time talking about nothing and that’s energy and time wasted when you could be doing something for somebody or for yourself. But it’s also important to get away from that. You can’t have a twenty-four hour job; if it’s golfing, fishing, hunting, or playing with the kids or coaching the kid’s soccer; you have to do that too.
“Any other advice anything else that you can think of that might help some of these folks?”
“There’s one other thing we haven’t discussed and that’s appearance. You don’t go for an interview or a job application if you are not dressed properly. First impressions are not only important, they are powerful. You can have a lot of potential for a position, whether you are applying for a job or a loan or trying to break in to some business circle or calling on a potential customer. The way you approach that process, if you are slovenly, your appearance isn’t good, or if you’re not dressed properly, your first impression is not going to be good. It could determine whether you are successful or not. Appearances do matter.
“If you get a job or create a job of your own, appreciate it. If you are working for somebody else, trying to get started, your first job is to know your job, and your second one is to do it. Find out what your job is, find out what’s expected of you, and do it. If you lost that job, what would it mean to you? Act like you want that job every time you go to work. The same thing if you work for yourself, and if you have employees. You must let your employees know that your job is important to you; therefore, their job is important to you. You have to be a good boss. You can’t criticize people. You can’t be ugly to them, so think about your job, whether you are an employee or the employer, as being, ‘This is important to somebody. It’s important to me. It’s important, and I want to do a good job.’
“You’re going to be graded by the public if you are the business owner, but you are also going to be graded by your boss, if you’re not the owner. You don’t think you are being graded, but you’re always being graded.
“If you need to go back to your banker for some more money and he’s not grading you very highly, he’s going to say, ‘Sorry,’ and then you are going to go to another bank and he’s going to say, ‘If you can’t get it from the people you’ve been banking with, what makes you think I want your business? Tell me why I should take over your business.’
“You’ve got to be worthy. You’ve got to be deserving. You’re being graded all the time.”
“In closing, is there any other advice you would give to our entrepreneurs?”
“Yes. You know, you hear some people say, ‘I’ve got the greatest job in the world.’ You don’t hear a lot of people saying that. Most jobs are work. You’ve got to work at your job. People are not going to come into your place of business, pour money out of a barrel on the floor, and say ‘Here, this has got to be yours, have a great day, bye!’
“If you have to, work toward that goal over time. Maybe you can’t do it now, you can’t do it next week or next month or maybe even this year; set a goal of five years, twenty years or whatever, but don’t drop your dreams and ideas. If you work at it, you can develop some good habits that will help you get there. Don’t be afraid. You’re not going to accomplish anything if you are afraid. You will fail sometimes. You won’t be successful a hundred percent of the time, but you can’t expect to be.
“Don’t be afraid to ask questions. You may not know what question to ask, and you may be asking the wrong questions. Your mentor, banker or somebody else might say, ‘That’s not the issue. Here’s the issue.’ If you don’t discuss those things with somebody, you’re not going to know what’s important.”