Academic journal article Journal of Case Studies

TICO Manufacturing: A Case Study of Entrepreneurial Growth

Academic journal article Journal of Case Studies

TICO Manufacturing: A Case Study of Entrepreneurial Growth

Article excerpt


Upon arriving at work, Lee Tipton sat down at his desk, leaned back and realized that a lot had happened in the fifteen years when he first started his pallet manufacturing business. He had been driving a truck and making a regular income, when the Teamsters Union went on strike and shut the entire trucking business down. Unemployed, with a wife and two children to support and with no job prospects in sight, he had felt like the world was coming to an end. He had been making refurbished pallets on the side, while driving his truck. Immediately his part time pallet business became his sole source of income for his family.

Little did he know that by taking advantage of this small business opportunity, a one man operation grew into an organization of 75 employees in a very small town and in a very competitive industry. From acquiring broken pallets and rebuilding them, his business grew not only into a pallet manufacturing operation, but into several other business lines: new heat treated pallets, paper packaging for safe guarding pallet loads, mulch for landscaping, and freight hauling.

Lee had always had a knack for making money, but he had made most of his decisions based on intuition and a lot of courage. Sitting back in his chair and staring at the tile ceiling, he knew he had to change that approach. His business had grown too large and complex to manage just on a hunch. He needed a refined financial accounting system to reflect the different products and services separately in order to determine whether they were profitable or not. He had also come across a new opportunity to start a new service line of repair and maintenance on diesel trucks, but this time he wanted real financial data to make his decision.


Lee Tipton never dreamed of becoming a successful entrepreneur. His real dream was to be a member of the Missouri Highway Patrol. So upon finishing high school, he applied and was accepted in the Highway Patrol. For the first few years he enjoyed his work, but the long hours and stress of his job begin to wear on the new family he was forming. His wife and children begged him to do something less dangerous.

Lee's father was a successful truck driver at the time, so Lee decided to follow in his father's footsteps and go into trucking. He joined a firm called Churchill Trucking in 1980 and worked as a truck driver. Since Churchill Trucking was a regional trucking company that served the Midwest, Lee's hours were compatible with his family. He was very content with the steady income, regular hours and the people he worked with. He continued driving for Churchill for 15 years.

During those 15 years most of the freight he hauled was loaded onto wooden pallets. These pallets were flat wooden board platforms that allowed one to stack a considerable amount of weight on them. Then the pallets could be moved by a forklift. Since the pallets were wood, they were easily broken and wore out quickly. Pallet owners had to throw them out and buy new ones. For the various companies it was costly to have someone come in, load them up and take them to the landfill. Lee asked the companies if he could have the broken pallets and they were eager to have him take them off their hands.

He was surprised at how much extra income he made and surprisingly, he enjoyed rebuilding the pallets. He worked out of his garage, and pallet refurbishing became a significant source of supplemental income for him and his family. Whenever Lee was delivering goods for Churchill, he would ask the companies if they had any old broken pallets they needed to get rid of. He took them home, refurbished them and resold them on his return trips, sometimes to the same clients. The clients were more than happy with the deal, since Lee turned out a good product and at half the price of a new pallet. Word of mouth soon spread and other companies began to hear about Lee's pallets and called and ordered whatever he could provide. …

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