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Last Update: Monday December 18, 2017

Key Idea: Be Boring And Rich

Ironbound Valve Actuation demonstrates that some of the most boring and dirty businesses, including copper pipes, rake in the most cash.     More...

Key Question:

A: 

When he first started in the pipe, valve and fitting business, Howard thought it was a very unsophisticated industry. It had no "sex appeal" and simply seemed ordinary. The inventory is bulky and can be greasy and dusty. After only one year Howard realized that many people need what he is selling and there is plenty of money to be made.

Q: What do you think? How do you know what kind of business is going to be successful?

A: Look to fill the needs of people at a very basic level. Howard supplies the pipes that are used to move heat and chemicals through commercial buildings. These are "must have" products. Howard distributes products made by a variety of manufacturers, so he is basically a sales and delivery business. You think about it: Can you satisfy some need in the marketplace with your goods and/or services? Can you feed, clothe, or house people in a unique way? Can you provide transportation, insurance, fuel? It doesn't have to be glamorous, if you can offer something that meets a need; you'll have a good idea for a business!

Think about it

What do you sell now?  Which products or services bring in the most profit?  How could you expand your offerings to increase profits?  Are there products or services you should drop?

Clip from: Ironbound Supply

Newark, New Jersey: Meet Howard Kent and his team at Ironbound Valve Actuation. Like most of us, he learned his lessons the hard way. He now says, "Plan your work. And, work your plan, so . . . when you do succeed, it's not by chance and it's not by luck; it's just that you followed your game plan."

As you can well imagine, to go global, Howard constantly streamlines his systems with a mixture of old technology and new.

Go to the key ideas of this episode...

Ironbound Valve Actuation

Howard Kent, Chairman, CEO, founder

146 Jackson Street
Newark, NJ 07105
9735895209

Visit our web site: http://www.ironbound.com

Office: 9735895209

Business Classification:
Retail/Wholesale

Year Founded: 1966

Be Boring And Rich

HOWARD KENT: Well, this is the Ironbound section of Newark, which is bound by the Erie Lackawanna and Penn Central railroads back to the Hudson River. So this area of Newark was referred to as the Ironbound section of Newark. It's an ethnic community now, the largest concentration of Portugese people this side of Portugal. They pride themselves in taking care of the community. This street we're in is all residential, and our buildings fit in between them, so we have to be a friendly neighbor.

HATTIE: So you didn't name your business Ironbound Supply because it's iron you're selling?

HOWARD: No. We weren't very unique in deciding to pick what name.

HATTIE: (Voiceover) When you see this, it's normal to assume that Howard Kent is in the plumbing business.

If I walked up to you at a cocktail party and--and I didn't know you and I said, `Well, gee, Howard, what do you do?' what would you say to me?

HOWARD: What do I do? I say I sell industrial pipe valves and fittings. For 15 years, my wife says, `He owns a plumbing supply.' And I said, `Plumbing supply? We don't handle anything in plumbing.' But she couldn't associate pipe valves and fittings with an industry or anything, so she'd say, `My husband's a plumber. He has a plumbing supply.' But we have an industrial pipe business.

HATTIE: For 15 year? So have you convinced her now?

HOWARD: I don't know if I convinced her, but she says now, `He owns an industrial pipe valve and fittings supply house, isn't that correct?'

The pipes that we sell would be used in an office building to supply the heat chemicals. You can't build any type of a structure without needing pipe, valves and fittings to do it.

HATTIE: Were you selling this product 30 years ago?

HOWARD: Not only this product, but the exact same product. Copper tubing, steel pipe, plastic pipe has not changed at all in 30, 35, 40 years, 50 years.

(Voiceover) It's the exact same dimensions, it's made from the same alloys, and better technology of manufacturing the item today but the item itself is the exact same thing. The only thing we do different today is how we track the movement of the inventory, how do we track how much we have in stock or how little, or who we sold it to, when's the last time we sold it. That we're able to track very quickly.
 

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