Her Voice: Protect the Family Jewels

As a founder, president, and owner of an EMS company for over 20 years, there is one thing that holds true—you need money to make money, especially in the EMS world. Because we EMS companies act as the bank for their customers—meaning that we generally have to purchase, and pay for, materials before the customer pays us—supports the need to have a progressive bank on our side. I purposely use the word “progressive” because a bank can help you through the different stages of growth; they can be supportive financially as you grow your business and stick by you through the ups and downs; or, they can become your boss when you find out in the end you are actually working for them. These two different scenarios are generally dependent upon the bank’s attitude about risk and how they view risk in the EMS industry. In fact, they can view it as minimal risk one year and high risk another year. Convincing the bank that you are low risk really depends on you and how well you tell your story.    

The EMS market is estimated at $500 billion, with EMS and ODMs accounting for 43% of the worldwide production. That’s a lot of opportunity and a lot of EMS companies must agree, as there are roughly 4,000 EMS companies worldwide. With this, you would think everyone was going gangbusters, making money hand-over-fist. That might be true in a good year—or even a few good years—but like everything in life, what goes up can come down. Markets can dry up, global footprints can contract, your customer base may dwindle, leaving you with a low year or two. It’s times like these when a progressive bank can help get you through the cash crunch, the restructure, or that pivot you believe is needed for your company to survive. 

As with most anything, you need money to grow. You need money to get a loan. Literally, that concept is an oxymoron, but it’s true; if you don’t have the assets to pledge, or the down payment, you won’t get a loan. Starting a business is no different. I found that I needed additional backing to get bank financing. I needed someone to cosign, back a line of credit for me. Another option was to pledge my house or my business, which I would not do. This is another one of my lessons learned: always, always protect your family jewels. In my case, my home and my business were my jewels. I managed to go through 20 years of running CAMtek and never once did I pledge these two assets. This is such an important lesson; I truly hope you take note. Once you pledge either of these, you start to lose leverage with your bank. This is how you can end up working for the bank.  

I always kept my home mortgage at a different bank than the one I used for business so that my business banker could not easily access my personal assets. I purposely used a different bank for all my personal needs, including personal bank accounts, CDs, money markets, and home mortgages, etc. I did, however, personally guarantee the business debts. You may ask, what’s the difference? A home is one asset that a bank can’t touch without a specific written document that clearly lists out your home as being pledged. For me, the difference matters.  I didn’t know this at the time, but I found it out later during one of my down years when the bank tried to get me to pledge my house and I wouldn’t.

This same concept holds true for your company stock. In my case, I was certified as a Woman Business Enterprise which meant that I had to maintain 51% ownership and “control” of my company to keep my certification. Many of my customers were doing business with me, initially because the WBE status opened the door, but then my performance kept them loyal. Since I was listed as a WBE-certified vendor, I utilized this a few choice times with my bank, stating that if I pledge my company, then my WBE will become invalid. Now, I do believe there is some truth to this, but like I said earlier, it’s how you tell your story to the bank and it’s how they will ultimately view you as risk. In my case, it was riskier for them to strong arm me and potentially make me lose my certification, which would ultimately result in lost customers and lost revenue. This was too risky for them, so they backed down. 

My Russian piano teacher, a U.S. citizen of 30+ years, once told me, “You need to always, always protect your family jewels. America is such a great country. People in America need to protect their freedoms and their land like they were jewels. If they viewed them as jewels, they would never put them at risk.”    

I would think of him every time I renewed the company loans at the bank. When I signed those documents, I smiled because I did not pledge my home or my business; I protected my family jewels.

“Either write the book or sell the jewels.  And I’m kinda sentimental about the jewels.” – Ava Gardner 

Christine Davis is a woman leader in today's electronics industry. She founded and successfully ran an EMS company, CAMtek, for 20 years before selling to Zentech Bloomington. 

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2021

Her Voice: Protect the Family Jewels

05-26-2021

There are many lessons to be learned in working with the bank to secure your business. Christine Davis shares some important truths about protecting your personal assets.

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Her Voice: Take Back the Wheel

05-12-2021

In manufacturing, there are always opportunities—it could be for new processes, new certifications, or the need for the next level of management skill set. Don’t ever hesitate to reach out for guidance, or to hire that next level manager or consultant necessary to grow your business. At the same time, don’t assume that next-level manager is on the same path as you. In trying to get that the next level, I have hired and fired a few top-level managers over the years. Whatever that next level was—whether trying to achieve ISO certification, moving into new headquarters, or helping to facilitate our growth as a company—I never hesitated to ask an expert. Many hires resulted in disappointment, not because they failed at the immediate task at hand, but because they were not the right fit in the long-term.

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Her Voice: Arbitration or Root Canal?

04-28-2021

As a business owner—and I’m sure anyone else in business will attest to this—it’s inevitable that at some point in time, you will be faced with a dispute in spite of having a contract in place and in spite of the clarity of the wording. Columnist Christine Davis explains.

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Her Voice: Twice as Much and Twice as Long

04-14-2021

When Christine Davis decided to start her own business, she came up with a pretty solid plan. But it needed an investor, and along the way, Christine gained some pretty valuable advice.

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Her Voice: I'm Not Betty Crocker

03-31-2021

It takes both reason and intuition to outfit a manufacturing facility, a point I was able to demonstrate as we prepared and moved into our new building several years ago.

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Her Voice: Standing My Ground

03-10-2021

Business was going well for CAMtek, and by the ninth year, it had grown significantly. Christine Davis found the perfect building to move into, but negotiating the lease and repairs took on a life of their own.

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Her Voice: Nothing to Lose and Everything to Win

02-24-2021

An opportunity to quote a new job went sideways, until CAMtek owner decided to make a bold move.

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Her Voice: It's Not About Money

02-10-2021

For the most part, business owners are very smart people, true risk takers with guts and wit; more importantly, they can recognize opportunity and act quickly. They are visionaries and that sets them apart from others. When I look back 20 years, I realize how naïve I was. But I had guts and wit, something I carry with me today. I was and still am a visionary.

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Her Voice: In a Man's World, 'I Got This'

01-27-2021

Although the electronics industry still needs to progress in bringing more women to the executive levels and board rooms, Chrstine Davis shares her experiences from being insecure and intimidated to confident and ready. "I tell myself, 'Yes, you have what it takes. It’s a man’s world, but I’ve got this.'

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Her Voice: Electronics is in My Blood—Thanks Dad

01-13-2021

Christine has always been asked how she got into electronics and the easy answer is that she was inspired by her father, a longtime employee at General Electric in Decatur, Illinois. Here, she explains how that turned into a successful career for herself.

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2020

Her Voice: Crashing Parties, and Breaking Barriers

12-22-2020

Welcome our newest columnist, Christine Davis, who founded and successfully ran CAMtek for 20 years. She introduces herself and what she hopes to share from many years of personal and professional experiences. Read on!

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