Eric Lang. (Darren Brown, OBJ)

Starting your own business can be scary. Leaving the comfort of a nine-to-five job with someone else's money on the line is never easy, especially with a whole family depending on you.

Eric Lang was 30 years old when he quit his job as a logistics manager for a prefabricated home company in 2000 and started Knor Plast Inc., a plastics recycling company in Cornwall. Although he had an American wife who couldn't work in Canada, a baby and another on the way, with his wife's blessing he jumped in with both feet and a credit card. Last spring, Knor Plast was one of OBJ's Fastest Growing Companies with 145-per-cent revenue growth over three years. Mr. Lang told OBJ how he did it.

OBJ: What does Knor Plast do?

LANG: We are an industrial plastic processor and compounder. We began buying and selling industrial plastics and moved into recycling them. Now we have moved into compounding them, which is taking the plastic, melting it down and turning it back into a finished product, which are those little plastic beads that go back into the manufacturing stream as auto parts or whatever.

OBJ: Why did you decide to do this?

LANG: Probably the same reason as everyone else, and that's a need to control what you're doing and being able to make the most difference. Plastics just happened to present itself to me. I was a logistics manager for a prefabricated homes company ... I started researching what we were throwing out and how we could save money on landfill. I realized we were throwing out $100,000 worth of materials a year which we could be selling as an inventory item.

From there I made the case of how much money we saved, but no one believed me because it's hard to track waste. That $100,000 I saved was on the bottom line, but no one believed me. So I said, that's it, I'm done. I'll start my own business.

OBJ: But it wasn't just that easy, was it?

LANG: No, it was ridiculously hard – exciting though. I should point out that it was a stereotypical entrepreneurial story: my wife was an American and had just moved up. I had a one-and-a-half year old, my wife was pregnant with our second, and she couldn't work anyway because she wasn't legal to work yet. We had no money whatsoever. I had a $10,000 credit card and I maxed my credit up just before I quit so I would have some credit – because I knew I wouldn't get any once I was self-employed – that's how we started. I was lucky enough to have a supportive wife who said, "if we don't make it, if we don't make it, we get a job."

OBJ: How did you get financing then?

LANG: We really didn't. We had a $10,000 credit line and that's how I started. Banks are low-risk institutions and (entrepreneurs are) high risk, otherwise everyone would do it. For me, being an entrepreneur is all about how to get around the roadblocks. So when a bank won't give me a $100,000 line of credit to fill potential sales this year, but I need to pay $100,000 worth of invoices 60 to 90 days before I get paid, how do I do that? I started selling export to China. I didn't make as much money but they paid quick.

Our start-up cost was not that big because I had no money. The step before getting a warehouse and workers and equipment was brokering, so I started out brokering over the phone. I did that for the first year. Then, when I could afford the next step, I would move on to the next step.

Another thing that helped us out was the EDC (Export Development Canada) insurance program, which is one of the best things that Canada offers Canadian exporters and manufacturers. It's insurance on your receivables. Probably about six months into our first year we had our main customer not pay us. He flat-out told me, "Look we're not going to pay you. We've had some hard times." It was about US$38,000 which, at that time was everything for us. That would have put us under, but we had the insurance.

OBJ: What are some of the lessons you've learned along the way?

LANG: Since I've started up my own company, I have realized that other entrepreneurs will bend over backwards to help you, and it doesn't matter what industry they're in. I don't know why, it might be camaraderie. So you should surround yourself with other entrepreneurs because they love to help each other out. Issues that we face are exactly the same no matter what the business is.

Another thing is, if you think you can do it, you can do it. If you think you can't, don't bother. I knew exactly what I wanted. I knew I could do it and if I didn't make it I could only blame myself for not trying hard enough.

I wanted it to be a large multinational corporation when I started and every decision involved planning to be there. We incorporated the day we started. It's a personality thing more than anything.

THE EXPERTS SAY

Entrepreneurs are people who think the world could be made better in some way. They think that there is a better way for us to live more comfortably, of a better way to enjoy ourselves on this planet. Whether that is a product or a service, what really fuels the entrepreneur is that there is a better way to do something. So the obstacles are really just hurdles on the way. The hurdles that may deter others really don't deter those who have a core belief and a passion.

A great example is the book Pour Your Heart into It, by Howard Schultz, the former CEO of Starbucks. He said in the course of one year he tried to raise money to expand what was five stores at the time. He said he talked to 245 investors to try to sell them on his dream--an hour-long presentation to 245 investors. Many of them wouldn't return his phone calls, some said "who's going to pay $3 for a cup of coffee?" Some laughed in his face. He said "I was depressed as hell, but I had to be a chameleon. Every time I had to go in and try to sell them on the dream." He said that there was never a time that he once doubted it was possible to bring a sense of community to coffee shops like he had experienced in Italy.

I think persistence is the key. Where other people would give up, an entrepreneur goes on.

Susanne Biro, director of coaching, Bluepoint Leadership Development

Over the past year, Canadian companies have been subject to what Canadian Manufacturers and Exporters dubbed, "a perfect storm." They've experienced a volatile spike in the Canadian dollar, accompanied by a subsequent decrease in demand in our major export market, the U.S. Add in dramatic hikes in input costs – energy alone has increased by 95.4 per cent since 2002 – and flat selling prices.

Every year in our annual management issues survey – a poll of CEOs across Canada – manufacturers and exporters cite access to business financing as a major challenge.

This year alone, 16 per cent of companies reported financing is less available than last year. Firms are finding it particularly difficult to raise financing for business expansion purposes, while more than 20 per cent report difficulties in obtaining financing for working capital and investment purposes. Many companies cited that more restricted access to financing and higher financing costs are having negative impacts on their businesses, especially those firms looking to invest in new technology, product and process innovation as well business expansion and export development.

While there are many non-traditional sources of finance, Export Development Canada is an excellent starting place for many businesses looking to make investments, starting with the Export Guarantee Program. This encourages Canadian financial institutions to advance pre-shipment loans to Canadian companies exporting goods or services, then covers up to 75 per cent of loan value.

Additionally, its account receivable insurance for small business can protect you up to 90 per cent of your losses if you buyer doesn't pay.

Jeff Brownlee, vice-president of communications, Canadian Manufacturers and Exporters