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HATTIE: (In the Studio) Hi. I'm HATTIE BRYANT, and this is SMALL BUSINESS SCHOOL. Every week, we take you inside a company so you can learn from a business owner who's already done what it is you want to do. Today, we go to Huntsville, Alabama, where the US space program was born, to meet the son of two rocket scientists who was always more interested in show business than the business of science.

DAVID MILLY: Well, 25 years ago, when I kind of got in the business--I mean, entertainers would perform in a building and they'd just turn the houselights on. Then people would have two or three lights and they'd turn the houselights off. So it's kind of evolved from nothing to, you know, sophisticated $1/2 million lighting systems with computer controls and all that. (Excerpt from concert)

HATTIE: (Voiceover) It's September. It's Big Spring Jam in Huntsville, Alabama. Dozens of bands and thousands of fans spend a weekend immersed in rock, jazz, country, blues and gospel music. (Excerpt from concert)

HATTIE: (Voiceover) What has become one of the largest and best music festivals in the Southeast is all in a day's work for David Milly. Based in Huntsville, and with crews all over the country, David's company, Theatrical Lighting Systems, has a slogan: `We light the stars.' Since 1981, it has been creating lighting magic for performers like Tony Bennett, Lee Greenwood and many others. Perhaps David's favorite is Johnny Cash.

DAVID: He started out with just a spotlight and then he added, like, 12 lights. And that's all he ever did, even when he would do a casino-type business or that kind of thing. The stage was just one color. It's the Man in Black.

HATTIE: (Voiceover) With 30 employees, the company is reaching for nearly $5 million in sales. Revenues come from lighting sales and rental, and there's a division dedicated to design and installation of permanent lighting systems that integrate both house and theatrical lighting. One thing is you love to see the innovation of the technology in your field. That keeps you excited.

DAVID: That's exciting. That's exciting. And seeing how other people operate their businesses, to me, is exciting.

HATTIE: OK. At these trade shows, you have some buddies you see once a year...

DAVID: Sure.

HATTIE: ...and you go, `How's it going?' and you share ideas about how...

DAVID: We talk about leasing vs. buying. You know, we talk about information technology systems, which is really a key when you're an asset-management company like we are. (Voiceover) I mean, mostly what we do is we load and unload trucks.

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DAVID: (Voiceover) You know, we're a moving company. But asset management--how to efficiently manage the assets that you've got, keep them generating revenue and moving them around and knowing where they are. That's our big problem, knowing where they are.

Unidentified Man: The brown is downstage.

HATTIE: (Voiceover) A typical lighting rig for a major concert involves 30,000 pounds of equipment and can fill one to two tractor-trailers. And the show always goes on, even in the rain.

DAVID: Lighting focuses your attention on what you want them to see. If it's dark, people are looking around, they don't know what to look at. You bring the light up--Boom!--that's what they're focusing their attention on, and it is the energy of a show. If the entertainer's moving around, the lights are moving around. If the entertainer is doing a slow ballad, the lights are a slow ballad. So it sets the mood and the tempo for the show and for the entertainer.

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HATTIE: (Voiceover) It just seems like a natural add-on; that you started in the lighting business and people loved you, they fell in love with the work you did. And in small business, it's about service. So they'll say, `Dave, if you're doing my lights, please do my sound.'

DAVID: (Voiceover) We always felt--and maybe me not understanding sound and having an OK understanding of lighting, but we've always tried to focus and do one thing well and not try to do a bunch of things mediocre. And I think in the long run, it's paid off to have specialized that way.

HATTIE: (Voiceover) Theatrical Lighting has three revenue streams: it sells equipment to churches, schools, arenas and nightclubs; it works with architects to design light packages for permanent installation and it provides lighting packages for road shows with and without personnel. You've been doing this for almost 20 years--or more than 20 years. You're in a trade association, right?

DAVID: Yes.

HATTIE: And it's called...

DAVID: ESTA, Entertainment Services and Technology Association.

HATTIE: All right. This looks a little dangerous, meaning...

DAVID: (Voiceover) Stuff could fall. The sky could fall, yeah.

HATTIE: (Voiceover) And when we saw the setup, we saw heavy equipment. Has your association been active in working on the safety issues for employees?

DAVID: Absolutely. That was one of the reasons the association was set up, to establish standards so that we could essentially self-regulate 'cause a lot of--before the association, there was not very many standards. There was--people in one part of the country were doing things this way, another part the other way. So we've established standards in what's safe and what's not safe. Because in the old days, people would crawl trusses with no harnesses or anything, and people would fall off occasionally.

HATTIE: Who are these people, David? Did you used to do this?

DAVID: I used to do this. Yes, I did. A mission statement. Well, it may be a little funny, but it's, `Making money doing lights.' That's the mission statement.

HATTIE: `Making money doing lights'?

DAVID: Correct. So it keeps us focused. We want to run a profitable business and we want to focus and just do the lighting part of it. And, you know, we've had companywide meetings and we've made sure everybody understood that and what that meant. We came from the little customer, and we don't ever want to forget them. So if anybody locally, or in Huntsville or north Alabama, needs something, we've got the stuff they need for the little deejay, the party, the small church setup, the little theater thing. (Voiceover) In addition, we also do the larger things but we never forget the little guy. Study your competition, 'cause I learn so much from them. You know, steal good ideas. It's simpler to see what's been successful to them, to go out and make your own mistakes to figure it out.

HATTIE: Right.

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DAVID: And hire good people. You know, if you hire the right people and--I mean, that's a theme you're going to hear from me forever is hire the right people and you will be successful. You hire the wrong people and you won't be.

HATTIE: OK. Tell me about what's going on around us, the different people. Like, what's going on in this office right here?

DAVID: (Voiceover) This was our rental manager's office. He's now--we've been--promoted him to inventory control. No matter whether it's for rental equipment or sales equipment, if any of the sales people need it, they go to Ed and make sure that he's got it available for them. He has to make the decision, `Do I buy it? Do I sub-rent it?' you know, for rental and services. `If I buy it, am I going to rent it out enough times to justify the purchase?'

DAVID: `Or do I go find it from somebody, rent it for a particular show or something?'

HATTIE: (Voiceover) David's wife, Janet, has been his partner since the beginning. This industry is small, right?

JANET MILLY: In the beginning, I thought that we were just this terribly small operation. And my husband would ask me, you know, `Well, where do we want to go with the business?' And I said, `I want to be a real lighting company.' And he took me out to a few of the businesses which I'd always heard were the large businesses in the industry, and they were not that much larger than us and I realized we are a real lighting company.

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HATTIE: All right. What are some things that you think you do right, that other people need to know about as they're growing a company?

JANET: Well, one of our basic premises is that the vendors are our support system. And we've always made sure that we've paid our bills on time. Because we get a lot of support from the vendors and they offer us help and send business our way because they know they'll get paid.

DAVID: Part of our success has been her austerity in making sure that the banks and our suppliers are paid. You know, if a manufacturer has a customer that wants to buy something, is he going to turn that lead on to a person that marginally pays their bill or somebody that always pays their bill? It's a no-brainer.

HATTIE: (Voiceover) Are there numbers that you look at daily or weekly that you go, `Wow, we're going great'?

JANET: Well, we do flash reports and we all go over those numbers.

HATTIE: What's a flash report?

JANET: This is a report that tells David everything he needs to know about receivables to payables, new customers, amount of sales for last week.

DAVID: I don't take risks. I take little bitty, you know, chances, but my odds are stacked in my favor before I go borrow that $1/2 million. I know that even if the deal I'm putting together fails, I've got enough left over, I've got plenty of time to bail it out and put something else together. So I don't feel like we're taking a high risk.

HATTIE: Does this happen in bed, these discussions?

JANET: No. We try not to take it home with us.

HATTIE: OK. So when you walk out the door, you try to say, `Now you're my husband and my boyfriend and--you know, and we're not going to talk about business anymore.'

JANET: `Try' is the operating word there. Of course, we constantly talk about it is because it is--it's like our family.

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HATTIE: For years, you've been managing what I call remote employees, meaning they're not here. They're on the road and they have your equipment. Give some advice to people on how to make this happen because a lot of folks now because of the Internet and because of telecommuting are hiring people and managing them from a distance.

DAVID: Well, the key, and I said it just a second ago, is hire the right person.

HATTIE: OK. But what does that look like? Who is that right person for you?

DAVID: The person that's done it before, may be unhappy with the work environment that they were in before. You know, stealing employees to me has been pretty successful. And we'll just go out and sit down and say, `Can I steal you away from the company you're working?'

HATTIE: You steal them?

DAVID: `Are you happy with what you're doing? If you're not, what are you making? If I pay you more, will you move to Huntsville?' You know, we've done it that way. We've advertised nationally in trade magazines and taken in resumes and read them and, you know, flown a guy in to interview. You waste a few airplane tickets that way, but it's cheaper to waste airplane tickets than make a mistake. Somebody told me, `Hire slow, fire fast.' But it has been incredibly difficult for me to give up on somebody. And, you know, to answer your question, anything that I can think that it would take to make that person succeed, training, talks, written goals, you know, critiquing things, everything, but at some point, if they're not going to do it, they can succeed only if they want to. And if they don't want to, it's my job to figure it out and end the relationship. Running a business is--the hardest part of it is the people side of it. That selling the product or stocking the product or coming up with the thing to sell, that's the easy part. It's the people and motivating people, hiring the right people and keeping them pumped up all the time, that's the hardest part of being in business.

JANET: We spend practically 24 hours a day together. So that can be a problem on occasion.

HATTIE: Do you just jump in the car and go eat lunch with a girlfriend or something?

JANET: We never eat lunch together.

HATTIE: Oh. Maybe that's a good thing.

JANET: It's our break time. He reads the paper. It's not any fun having lunch with him. `Why don't you read the paper? I read the paper, as well,' so--and that's when I kind of--I take it to unwind and come back refreshed.

HATTIE: OK. What piece of advice would you give people about what--to describe to them what running a business is like?

JANET: Well, it's like having a family, like I said earlier, because, I mean, the employees are like your family. And when they get in trouble, they come to you. If they have a wreck, it affects your insurance. It's a constant thing.

HATTIE: They need money, you have to go to the bank. JANET: And, of course, we feel an obligation, also, to make sure that they have--they can make a living and they can support their families. That's important to us.

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HATTIE: Any advice you would give a young couple--when I say young, going back to when you were 25 or 30, when you started this--starting a business? What would you say to them if you had a chance to give them advice about how to grow a company with your spouse?

JANET: I think that it's important that they have a strong relationship if they're going to work together because it certainly is trying on a relationship. But it is valuable, too. It's a valuable experience, and you're pulling towards the same goal.

HATTIE: There you go.

JANET: You're pulling towards the same goal, and that gives your life something unique.

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DAVID: So we edit one time and we edit the paper copy...

HATTIE: (Voiceover) Newsletters and catalogues mailed regularly and a Web site keep the TLS name in front of customers. David, when did you put your Web site up?

DAVID: We've had our Web page up probably, I think, late 1994. We've been on the Internet for quite a while.

HATTIE: So what's new? I know you're adding new things. What's happening now on your site?

DAVID: Well, one of the things we've just added recently is all the control consoles these days have software updates. And instead of a person having to go to the manufacturer's Web page, we tried to link from our Web page all the manufacturers that we represent and sell equipment for or rent. So you go on to our Web page and you can download.

HATTIE: So whatever you've invested in the Web site up to this point, are you getting your return on your investment?

DAVID: I think we've had one or two sales that has paid for five years of Internet. People have found us on the Internet. And it was some people from other countries, flew into Huntsville, did business with us and flew back out and more than paid for it. And so we're well ahead.

HATTIE: Wow. Do you have an internal person that this is their baby, they make sure it's happening?

DAVID: We have a part-time college kid who keeps our Web page up and, actually, does a superb job with it. We hired a professional to get us started and then he has edited. And we've sent him to a couple of classes. I don't recommend everybody do that. It would be a lot quicker and simpler to hire somebody to do it. But I figured out a way to do it very inexpensively for us. And the information on a Web page needs to be updated every time it needs to be updated, which around here is daily. You put things on sale, you hire new people, you add manufacturers, you subtract. So, you know, we try to keep it as current as possible. So it's current within a week.

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HATTIE: David, you said, `I'm not a lighting guy. I'm a businessman.' Didn't you say that to me?

DAVID: Yes, I did. Yes, I did.

HATTIE: OK. All right, what does that mean, `I'm not a lighting guy. I'm a businessman'?

DAVID: Well, I mean, I look at my role with the company. I more run the business than actually go out and do the lighting, which is what our product that we sell is.

HATTIE: At what point, though--you've done this almost 20 years. At what point did you realize, `Oh, my gosh. I'm a businessman'?

DAVID: Well, as a company starts to grow--well, in the beginning, you did everything. You did the lighting. You ran the business. But at a point that it started to grow, I felt like I needed to be here managing and not me out there doing the lighting projects.

HATTIE: But some people who stay really small--I mean, you have 30-some employees now, $4 million in revenue. Some people who stay really small, maybe this is a piece of advice that we could get from you for them, and that is at some point, you said, `I'm just going to have to hire a person to do this crew chief thing.'

DAVID: Even though nobody could do it as well as I could do it, I had to force myself to send other people out doing projects. And I felt like maybe what I did best was run the business, and that what the people I hired, what they could do best was to do the lighting part of it. You have to be able to hire people that you trust to do the job that you're hiring them to do. That was probably one of the things that's been hard for me to do is because I'm a hands-on kind of person, and it's been hard to delegate, give people responsibility and authority to go do those things. It's still hard for me to do that.

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HATTIE: Sometimes a person from the outside can offer insight. David has never isolated himself because, through the years, he's been active in his trade association and in local business organizations. However, when it comes to the day-to-day operations of Theatrical Lighting, he has always made most of the decisions alone. Feeling frustrated with growth, he hired a consultant to analyze the business practices that had evolved without much critical thinking. The consultant found some inefficiencies, like too many people reporting to David, and made a number of restructuring suggestions. Luckily, for everyone at Theatrical Lighting, David listened and implemented the ideas. And now the company is growing steadily, free from cumbersome processes. If you're stuck or feel frustrated with growth, perhaps it's time to call in someone from the outside to offer some insight.

(Voiceover) You can learn more at SmallBusinessSchool.org. There's streaming video, transcripts and interactive study guides.

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DAVID: Those last couple of days when you've been here, you've asked me how come we're having a spring jam in the fall. Well, it's not a spring jam; it is a Big Spring Jam.

HATTIE: OK.

DAVID: And this is Big Spring.

HATTIE: (Voiceover) Theatrical Lighting Systems was named small business of the year in 1992 by the Huntsville/Madison County Chamber of Commerce. Why are you a member of the Chamber of Commerce?

DAVID: Why am I member of the Huntsville/Madison County Chamber of Commerce?

HATTIE: Right.

DAVID: These are probably the best promotion of Huntsville and community that I've ever seen anywhere. You've got to give back. I mean, if a city is good to you, you've got to give something back. Huntsville and the people in Huntsville have that attitude that they can accomplish anything. You know, this is the town that sent man to the moon. When Kennedy said, `We're going to the moon,' well, these are the people here that did it.

HATTIE: (Voiceover) Since 1974, David has given time to raise money for the local Cerebral Palsy Association. Cheryl Smith is the director.

CHERYL SMITH: He just gives countless hours. He is so dedicated. He is determined that he wants to improve the lives of our children. He is compassionate around the children. Every year, he comes to the telethon and he's done so for over 25 years.

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JANET: You've always heard this, the lean years are the fun years, actually.

HATTIE: Really?

JANET: But as you grown more successful, you have a little more...

HATTIE: Cash?

JANET: Well, you kind of diverge a bit. Because your goal is not so strong. You've made it. You're not scared anymore. Because in the beginning, it takes both of you, and you have to pull together. It's like being two oxens pulling the same wagon, and you have to pull evenly or the wagon doesn't go.

HATTIE: I mean, you make money doing lights.

DAVID: Yes.

HATTIE: And if we don't make money in business, we're not a business.

DAVID: Correct.

HATTIE: OK. So we want to make money. But is that what wakes you up every day?

DAVID: No, not the money part. I don't think. Yes, the money is OK and fine. But what drives me is the competition, is the winning. And I guess in business, though, the winning--we keep score by money. But, you know, if we were keeping score and I was competing against Bill Gates, I'd give up because he's already won it all. So it doesn't matter. It's a different thing. I'm competing against my competition, and I'm competing in my arena. And I've got--you know, if I win $1--like, I have more satisfaction playing golf and winning $1 from my buddy than I do winning that $560,000 job. But it's the winning that gets me going.

HATTIE: All right. Do you think that that's a quality that all small-business owners need to have, a little bit of competitive spirit?

DAVID: Well, they'd better be competitive or they need to go find something else to do. Absolutely. Because I think business is definitely a competitive sport.

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HATTIE: John Wargo, our marketing adviser, says that the paperless office may never arrive. John, we went to look at Theatrical Lighting Systems in Huntsville, Alabama, partly because they came early to the Web and are using the Web extensively to service their customers. But what we found when we went there is they're still using print. Do you think we'll ever have a paperless office?

JOHN WARGO: No, I don't believe we'll ever have a paperless office. Nor do I believe that the Web is going to replace paper. It will change some of the ways that we communicate with customers. The Web is an effective way to communicate with customers. Print is an effective, proven way to communicate with customers. It's options. It's not one or the other. It's both.

HATTIE: Well, you'll find this interesting. Even though the people that buy from David are very technical and they're using the Web, he says they love his newsletter.

JOHN: Right.

HATTIE: And when they get the newsletter, they respond and they love this price list in print. Why?

JOHN: Well, there's a couple of reasons. First of all, when you receive the newsletter in the mail, you open and read it. You're not always surfing on the Web site. So you might not be at the Web site looking for the latest information. For example, he's announcing a sale that's going to be a 30-day sale. Well, if you're traveling, if you don't have your computer with you, you might not pick this information up. So you put it on the Web site, you send it to your best customers. People open and read their mail, they don't necessarily open and read their e-mail messages as routinely. We know that for a fact. Second, people do like print. They do like to have copies in their hands. They do like to be able to reference it and to look at it. The bottom line: It's not a paperless society. It will never be a paperless society. There'll be room for print. In fact, I think the Internet is going to generate more print and more types of print opportunities. So it's the combination of the two, not one or the other.

HATTIE: OK. Remember, sometimes you have to go outside for the insight to help your business grow. We'll see you next time.