Issue 9 "Of the Week" featuring Jon Kosmoski and House of Kolor
Back in the 1980s and 1990s, Jon Kosmoski was a guy whose face was on the cans of paint I used. He created the paint products I depended on and he wrote the painting “how-to” books I would grab in pure desperation when I ran into troubles. He was larger than life and had all the answers.
Business Lessons Or so I thought. That’s the thing with legends. In reality, they are just people. People who have pushed themselves beyond the limits that stop the average person. People who have paid the kinds of dues most folks will never know. People who are driven in a way the average person cannot comprehend. Jon did not just break rules; he rewrote the painting rulebook. It takes chutzpah to be that kind of risk taker, as there are no guarantees it will work out. Jon Kosmoski started House of Kolor in 1956. In the years since that day, Jon has learned some hard business lessons. As a teenager, working for other people, Jon didn’t get it, working with them. “They didn’t do it as fast or as good as me,” Jon said. “That’s what drove me out on my own. I couldn’t stand the way the average person moved. I was working at a union shop and they told me I was doing too much work. I was making the old guys look bad.” He was an apprentice mechanic for the power company, trained in engine rebuilding, brakes, and transmission rebuilding. He does all his own work when doing a car; the only thing he farms out is upholstery. But back then, in his spare time, Jon had started painting on cars. He’d been working on a 1940 Chevy coupe and was unhappy with some paintwork that a local shop had done. He figured he could do a better job himself and decided to learn how to do body work and paint. He was using nitrocellulose lacquers, known for beautiful tones and no bleeding of color, but the reason they worked so well was that the nitrocellulose resins had a natural acid base. The pigments would dissolve in them with no problem. But the nitrocellulose was notorious for cracking, yellowing and dulling of the finish over time. The new acrylics were being developed and as soon as they came out with those new toners, Jon ran down and bought up all he could, hoping the new product would maintain its gloss longer and be crack-resistant. But as it turned out, the pigments were junk, as the good pigments did not work with the plastic resins. The “dirty” inorganic or iron oxide were the only ones that worked with the plastics. Jon thought his career was over as the crisp, clean colors were gone. But he was determined to find a way to get the good pigments to work with the plastic resins. Through his wife Patty, he met a chemist who was working on that very same problem. Jon got in on the ground floor with him and with his help, Jon was one of the first to use the pure organic pigments with the new plastic resins. Every paint company mixes both organics and inorganic to save money. But Jon’s paint achieved that clean, clear distinctive look by using only the pure organics and was the first company in the world to do that. Jon never intended to sell the paint to anyone; he just wanted to build the best paint he could. But with his new paint technology, Jon found himself in the paint business and never looked back.
Brutal Lessons Yet the real challenge was running a company. He put everything he owned on the line: his home, equipment, shop building. The bank had a piece of everything he owned and if he didn’t meet his goals, he would lose it all. And as the company grew, so did the equipment needs, dissolvers, mills, everything that it took to make paint, as well as the packaging equipment for the products. And Jon needed long-term money because when you’re a manufacturer and buy from the raw materials companies, and don’t pay your bills by the third of the month, you’re cut off! So Jon needed a working $100,000 line of credit to stay current with his suppliers. And there were some brutal lessons, such as finding out a $4,500 bag of pigment that didn’t meet his specs was non-returnable, because it had been opened. “You have to put everything you have on the line,” Jon says. “That’s just the way it is. When you’re starting a fledgling company that nobody understands and try to explain that you’re doing custom stuff, no one knew what I was talking about back then.” Even the chemist he was working with didn’t understand this phase of the business. Jon didn’t have a strong education in chemistry. He learned it by reading at the library, reading everything that he could. He still loves reading tech manuals. After a long 10 years of fighting against the odds, Jon’s company, House of Kolor, became profitable. Ten years before anyone realized what he was doing was special, people did not take him seriously. “They’d say, ‘What can he be doing? He’s a little body shop in Minneapolis. He can’t be making this paint.'” So Jon would give seminars, and mix other companies’ clearcoat paint with his catalyst, and his catalyst would kick rock hard after 10 minutes, something unheard of in the paint industry at the time. After 10 minutes, Jon would pretend to trip and act like he was going to spill the clear on the people in the front row. Word spread and by 1965 House of Kolor was nationally renowned as the high-caliber paint for customizing vehicles. By the 1980s, Jon’s paint products had grown to become the best known and best respected custom painting products in the world. Even OEMs like Harley Davidson were using House of Kolor products for their factory paint.
Growth Lessons No matter how insurmountable the challenges, Jon never once thought about giving up. “There was no room for failure,” he says. “I was going to make it happen, no matter what it took. But I think discouragement is something that I fought all the time. I went into this thing realizing it was not gonna be a picnic. There’s never a time that you can rest on your laurels and think that you’ve got it made. That never happens. This world is changing way too fast for anyone in business. “And you have to have a passion for what you’re doing. If you don’t, then you need to find something else. I’m passionate about painting. I love to paint things. I still love to make things beautiful. When you do a quality job, there’s a pride of workmanship that never goes away.” One of his best stories is the time his first shop burned down. In 1963, he had a 16-year-old kid who was helping him sand some motorcycle parts. Jon had asked the kid to deliver a dragster body for him one night as Jon had planned a night out with his wife. Jon had given the kid a key, telling him just meet the guy and give him the parts; don’t hang out there. The kid left a cigarette burning on the table and it caught a phonebook on fire and burned the shop. Jon had just finished a two-tone blue Model A and was working on the Conquistador dragster. These were ruined along with his chopped ’58 pickup. He used this experience to better his business, buying the building he still uses and owns today. Being in a better and larger building was a boon for the company’s growth. He built a 20-by-15-foot addition on the back of the original structure, just for manufacturing and quickly outgrew that. He bought a building next door and added 5,000 square feet. Yet he still wasn’t sure it would work out. He put posts in the floor, just in case he needed to turn it into a body and collision shop. “You never know where life will take you. So it’s good to have a plan B. But keep working at it
Survival Lessons Jon’s best advice for new or struggling businesses? “Surround yourself with the right people. One man can only do so much. I started with four employees and grew to 27 before I sold the company to Valspar in 1997. I had some very good people, but I went through a lot of people to get those key employees. You have to be quick to judge if that person is pulling their own weight or is taking money from the company and is not an asset. And remember, time is money. When you’re billing 40 hours a week, you’re lucky to get 35 billable hours out of a person because there’s so much time wasted, looking for this, looking for parts, and it’s unfair to bill a customer if things aren’t in place. It’s important that your people understand that they have to be productive. Work cannot accumulate in the shop, there’s no money in that. You’re paying for that square footage and it has to be used. “One problem that can hurt a business, I call it a case of ‘executivitus.’ They, all of a sudden, now have a business and they think they’re executives. They sit back and think they’ll just watch the money roll in. Well, man, once you’ve got things laid out on there, you’ve got to work hard, and it’s not an eight-hour job. You talk to anyone in business that works less than 14 or 16 hour days, I wanna meet them cause they’re not gonna survive. It takes that kind of commitment to put those kind of hours in to survive. And weekends, too. I mean, you don’t get any weekends off when you start a business. It just requires everything that you’ve got, 100 percent.” When it comes to dealing with customers Jon advises keeping the communication channels open, explaining to them exactly what they are going to get. “They have to have some faith in you and your work. I put everything in writing and get their signatures. Or, if I have to do a job in a way I don’t agree with, I do not guarantee the job and they have to initial that fact.” Jon feels the biggest thing for survival and the reason that most businesses fail is they’re under-capitalized. “They don’t realize what it takes and that’s why many businesses start out of the garage, because that’s what they can afford. And they have to build up and make their mistakes in a smaller way, so they can grow and understand what it takes to get that cash flow growing. Understand your costs. Understand how fast the money goes or where it goes and how you’re going to get your payback. Make sure you make money on everything you touch. There’s your heat bills, light bills, permits you have to go through in order to be in business. People don’t realize all the rules and regulations that they have to abide by. Many businesses have been put out of business by their local government, because they didn’t have the money to do it right; to go in and play by the rules. “And you have to be good at what you do. And fast. You can’t go in there and plod along and take hours upon hours to do something if there’s a faster way. After a job is completed, be thinking, ‘How could I have done that job better and faster? Would a different tool or machine help me?’ You really need to have a fire in your belly when you go into business. You need to be hungry and need to stay hungry. Be aware of your competition and beat them at their own game.”
text by JoAnn Bortles