The Facts of Business Life: What Every Successful Business Owner Knows That You Dont
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Entrepreneurs are a special breed. They get, inherently and without effort, the myriad benefits of being the boss. They have vision—without it, you can’t hope to even think about starting a firm. But where I see folks fail is in their lack of grit. Grit is what it takes—and that’s what Bill takes you through in this book. It’s no-holds-barred. It’s not sugar-coated. And if you walk away thinking, “Nope, that’s not for me,” then this, too, will have been time well spent, saving you (and your spouse, kids, next-door neighbor, and dog) the future multiple heartaches inherent in starting a new venture. But if you’ve truly got it in you, and my guess is you do, or want to, or you wouldn’t be reading this book, then Bill gives you some clear to-do, think-this-through steps to help you on your way to success.
One more thing: In my 2008 book The Ten Roads to Riches, I make the point that entrepreneurship and failure go hand in hand. The most successful founder-CEOs have often failed a few times at no-go ventures. Nothing wrong with that. Failure is a great way to learn—again, nothing wrong with it, so long as you learn from it and fail differently next time and learn still another perma-lesson. But the lessons Bill gives here will help you learn still more from your failure and make a better go next time (and the time after that). And I hope you do try—and succeed—because the entrepreneur road is insanely rewarding, not just in money but in every other part of life, when done right. Bill will help.
Enjoy the read.
—Ken Fisher
Founder and CEO of Fisher Investments 28-year Forbes “Portfolio Strategy” columnist New York Times bestselling author
If you are attracted to the seductive magnet of business ownership, there are only two possible outcomes. Either you resist it, and for the rest of your life say, “It might have been,” or you give in to it. But once you choose the ownership path, you had better be prepared to say, “I gave it everything I had” or you won’t succeed.
—Bill McBean
Acknowledgments
I owe a great deal of thanks to many people who not only helped me shape this book but showed me how to become a successful business owner.
To begin my acknowledgments without mentioning Rob Kaplan just wouldn’t be right. Rob started out as my editor and, over the course of our working together on the book, became my friend. I had first come to him with a rough manuscript, but despite its flaws he saw something in it that I had not seen, and he made a number of suggestions that led, finally, to the book it is today. Rob took my business knowledge and guided me through the process of writing, editing, and rewriting until, at last, I had a book worthy of a publisher like John Wiley & Sons. Every page of this book has Rob’s imprint on it in one form or another, and for this I am most grateful, as I am for his friendship.
Second, I want to thank Ken Fisher for writing a flattering foreword. His encouragement and mentorship in this book’s development, particularly in the beginning when his wisdom was needed the most, was invaluable. In his own way, Ken was a significant factor, because without his enthusiastic support this book may have never been published. Thank you, Ken, for all you have done.
I also have to thank John Wiley & Sons for their patience as I struggled to meet deadlines, and for their belief in this book, especially Laura Walsh, Judy Howarth, Tula Batanchiev, Sharon Polese, Jeff Gould, Melissa Torra, and Steven Kyritz.
I also want to thank the many partners I’ve been fortunate to be associated with, who have remained long-term friends: Bill Sterett, a great guy and a good man, who supported and helped me in taking broken businesses and turning them into powerhouses; Al McKay and Walter Wilkenson, my first partners, who believed in me and gave me the money needed to open a new business, and unselfishly allowed me to lean on them for their experience; Gil L’Hommedieu, my current partner, who has been patient with me as I dedicated so much of my time to writing this book; and Mark Hulings Sr., Mark and Janet Hulings, and Mary Sterett—each a wonderful partner in his or her own way.
One of the important factors in every businessperson’s success is their competitive instincts and knowing what it takes to win on a consistent basis. I was fortunate to play for some great coaches, who led us to multiple championships and taught us how to win, overcome adversity, and be leaders on a winning team. To coaches John Mooney, Blaine Knoll, Bill Seymour, Terry Bicknell, and Lyn Bannister, thank you for teaching us how not just to win, but to win championships. Of course, coaches can’t do it on their own. There were some great athletes and “character” players who have remained lifelong friends. So thanks for the great times we had to: Dr. Greg “Nick” Homenick, Bruce “Buc” Buchan, Ross “Rocky” Johnson, John “Scotor” Allen, Ron “Logie” Logan, Billy “Roomy” Thompson, and all the hundreds of players I competed with over the years, as well as enjoyed beverages with throughout the seasons. And I can’t forget two good friends, Jim Peplinski and Terry Labonte, NHL and NASCAR champions, who through our friendship have shown me time and time again how great champions transcend their sports by demonstrating their class and the character that made them winners both in their sports and away from them.
Thanks, also, to my many business mentors: Jerry Gleason, Doug Spedding, Mike Maroone, Tony Noland, Bob Du’Chalard, Bruce Axleson, Gordon Mann, Richard Gallagher, Blayne Lensen, Charlie Thomas, Fritz Kern, Gordie Bell, John Spellen, and Uncles Stu and Don McBean; and gentlemen like Carlos Ledezma, Steve Hincliff, Ed Tonkin, Dave Solmun, Ron Brown, Joe Serra, John Bowman, Mike Boyer, Bob Myers, and all the fellows I was in Business Owners Twenty groups with in both Canada and the United States
Special thanks to: Pat “PJ” Johnson, Cheryl Jaeger, Brian Campbell, Debbie Elicksen, Debbie Meadows, Lynnda McBean, Shauna Butts, Scott McBean, Tony Fincannon, Dave Resendez, Sean Butts, Blair Upton, Kristy and Walter Wright, and of course, my sister, Susan Nazarenko, for helping and encouraging me in one form or another to eventually get me to the point of writing this book.
Thanks to the scores of people who taught me so much and had fun with me so often: Dorothy Cram, Harold Whitbread; Doug Grey; Bill Yard; Harry Apps; Harvey Coates; Ken Chatwin; Stone Avery; Kenny Brown; Brian Sweeney; Bob Todd; Blair Upton; Barry Kuntz; Brent Dewar; Dave Ashton; Jerry Daniels; Bill Davies; Steve Blake; Rob Hutchison; Brian McVeigh; Ken Boa; Bobby Cavanaugh; Grant Rodgers; Judge Pat Koskie; Scott Brower; the Rusnak brothers, Dave and Wayne; Wayne Jensen; Stu McFadden; Ken Chyz; Rollie Wilcox; Bruce Keith; George Marlette; Ron “Rookie” Robinson; Ed Chynoweth; Doug Lindsay; Dave “Pick” Picket; Rick “Fergy” Jackson; Don “Crapper” Harapchuk; Wayne Knowles; Brian Vasey; Dave “Kingster” King; Bill and Carol Pettus; Glynda Fincannon; Jess and Jackie Cole; Craig Dunn; John and Julie Buckley; Nick Hardcastel; Roy Nazarenko; Don Wheaton Sr., Dave Windsor; Bridget Werner; Tim Keen; Stu Esplen; John Esplen; Greg Campbell; Doug Clark; Kent Harleson; Gary Bentham; Walter Hilderbrant; Bob “Art” Faulkner; Pete “Pistol” Badyk; Orest “O” Kinderchuck; Murray Fairweather; Donny Kozak; Mel Gross; Howie Hicks; Charlie Carins; Bobby Will; Mickey Shaw; Eldon Cooke; Bob Korpan; the Houston brothers, Greg and Kirk; Dennis Breker; Paul Monarch; Steve Hyatt; Will Sodski; Cathy Peplinski; Doug “Spitz” Spitzig; Don “Crapper” Harapchuck; John Laskoski; Scott Atkinson; Mason Cox; Stanley “Frenchie” Patoine; Mike Lemire; Doug Colville; Mary Cole; Ted Oakly; Arnie and Sharon Boeyen; Ken Jaeger; Brian Vasey; Skip and Irene Kretschmar; Mike and Jane Lewis; Jeff Dyke; Ron Gall; Mitch Lanier; Ken Laxdal; Mike and Tina Jones; Ray Schmaamn; Victor and Irena Papazov; Russ Vanden II; David Dunn; Ed and Bev Bacak; Doug Balfor; Dr. Keith Crocker; Cliff Wright; Jim Gibson; Dr. George Fisher; Michael and Toni Conte; Shannon Wilde; Scott Sherman; Chris and Cindy Duval; Tom Gauley; Judy Newman; Jack and Patty Bradfield; Shirley Pagen; Jeff Amidon; Jack Powers; Carlos Keeling; Pat Kasperitis; Rick Dames; Randy Sonnier; Laurie-Anne Rusnak; Mike Collins; Mike Ferlet; Frank Gleason; Pat “Dunner” Dunn; Jim Gentry; Randy Hicks; Preston Douglas; Patti L’Hommedieu; Terry and Phyllis Cox; Dave Brown; John and Diane Doyle; Walter Meadows; Bill Goodman; Lawrence “Frenchy” LaBonte; J
ohn Hobbs; Tom Flores; Donny Orcutt; and all my employees, past, present, and future.
And, finally, a special thanks to Lynnda and Scott McBean, and Shauna Butts, and the soon-to-be newest arrival, “Keiki” Butts, for giving me the time and space to write this book.
Introduction
Business ownership is a seductive magnet. It promises success, wealth, and a life full of rewards for you and your family. The fact is, though, that the reality is very different from the dream, even when you are successful. That’s because most would-be owners don’t have a very clear picture of what it actually takes to be successful. The Facts of Business Life is designed to remedy that. It is accordingly a unique business book that focuses on what needs to be done to create success, how to do it, and when to do it. And I know these business concepts will work for you because they’ve done so not only for me but for hundreds—if not thousands—of other successful business owners.
One of the reasons it’s unique is that it provides a series of seven facts without which no entrepreneur’s business can succeed. These facts are:
1. If you don’t lead, no one will follow.
2. If you don’t control it, you don’t own it.
3. Protecting your company’s assets should be your first priority.
4. Planning is about preparing for the future, not predicting it.
5. If you don’t market your business, you won’t have one.
6. The marketplace is a war zone.
7. You don’t just have to know the business you’re in, you have to know business.
As you can see, some of these facts cover traditional areas like leadership and control or management, while others are less conventional, like those concerning the war zone and the importance of protecting business assets. As the book explains, each of these facts is important, but as important as each one is, their real strength lies in how they are interrelated and how they work together. That is, in addition to their individual value as guidelines for entrepreneurs, they demonstrate that being a successful owner isn’t about being good in one or two business disciplines but in all seven of them, as well as about understanding how they depend on each other.
You may understandably ask why I’ve chosen these seven facts out of the many disciplines of business. When you own a business, and I have owned several successful ones, you learn that you must be able to prioritize, and these seven facts, or concepts, represent the priorities I believe every owner, new or experienced, should never lose sight of. In addition, these particular concepts benefit both would-be and experienced owners in several different ways: (1) they are easy to implement; (2) they are easy for employees to understand and work with; (3) the more you understand them, the better chance you have for success; (4) they work in unison and form a solid foundation on which to build a business; and (5) they will produce the desired results.
The other important point to bear in mind regarding the seven facts is that they are organized strategically. That is, the first fact concerns leadership because without leadership and vision you cannot define success. In other words, it’s leadership that determines the company’s eventual destination and what it will look like when it gets there. Leadership is always followed by control, or management, which essentially outlines the day-to-day blocking and tackling that must be accomplished in order to achieve success as you have defined it. The third fact concerns protecting assets, because if your assets aren’t protected, you are essentially leaving your investment at the mercy of your employees and forces in the marketplace over which you have little or no control. After protecting assets comes planning, because planning creates the road map, based on objectives and goals, that determines how your business will attain success, as well as maintain it. The fifth fact covers marketing, because very little can happen without customers and the sales revenue they provide, and marketing and advertising focus on attracting customers and creating a market presence. The fact that the market is a war zone comes next because, while it’s one thing to attract customers, it’s another to sell them and keep them as customers, and it’s important that you understand this distinction. And, finally, the seventh and last fact—the importance of having a good general understanding of business—makes it clear that implementing all the previous facts can be done most effectively only when they are used together and backed up by a broad understanding of all the various facets of business.
The other reason The Facts of Business Life is unique is that it introduces the concept of a business life cycle, and the five levels every successful business goes through as it starts, grows, and matures. These five levels are divided into two groups. The first, which represents planning levels, includes “Ownership and Opportunity” and “Creating Your Company’s DNA.” The second, which represents the action levels, includes “From Survival to Success,” “Maintaining Success,” and, finally, “Moving On When It’s Time to Go.” Understanding this life cycle enables owners to pinpoint where they are at any given time, what has been done, and what has yet to be accomplished. The levels are progressive in nature, and owners carry their experiences with them from one level to the next.
It is important to note, however, that these levels are not quite as linear as they appear to be. As planning levels, Levels 1 and 2 are about deciding if you want to own your own business and, if so, what kind of business you want; and, having decided to become an owner, creating the processes and procedures under which your company will operate. Level 3, the first of the action levels, is where you implement the plans you made at the earlier levels and actually begin operating the business. Level 4 occurs when, having achieved success, you look for ways to maintain that success, and Level 5 is when you begin thinking about selling the business, passing it along to a successor, or closing it down. However, nothing is ever that straightforward in business. For example, it is possible for a successful business at Level 3 to slip back along the survival–success spectrum, in which case the owner has to return to Levels 1 and 2 to remedy the situation. In fact, it’s necessary at all the action levels for owners to occasionally revisit the first two levels in order to review opportunities and evaluate threats, keep up with changes in the market, and make changes in their own processes.
Finally, the book explains how the application of the Facts of Business Life changes over the five levels. For example, “leadership” is always a business constant, but how an owner leads a business is significantly different when he or she is just starting to become successful than when the business has had years of back-to-back success. Similarly, the way an owner attacks the war zone is totally different when the business is working to maintain success than it is when the company is relatively new. This is, of course, common sense, but no business book has ever identified or addressed these issues as this one does.
There are few guarantees in life, especially if you’re a business owner. Markets change, government regulations make it harder to do business, customers want more for less, competitors force you to adapt and innovate, and on and on. With all the changes that engulf owners in today’s business climate, it’s more important than ever to build a stable platform of business concepts on which they can operate their businesses. The Facts of Business Life provides that platform.
—Bill McBean
Corpus Christi,
Texas April 17, 2012
Chapter 1
The Facts of Business Life
Just as there are facts of life that affect us on a personal level, there are facts of life that affect us as businesspeople, and business owners who ignore them are essentially setting their businesses up for failure rather than success. These Facts of Business Life apply to every aspect of owning and managing a successful business—from maintaining control to strategic planning, from protecting assets to marketing, and from leadership to establishing and managing appropriate policies and procedures. And when these facts are recognized, understood, and acted on appropriately, they can literally make the difference between success and failure.
The sad truth is that less than 30 percent of businesses last more than 10 years, and most failures occur in the first few years of operation. Some of those businesses are doomed from the start because they are ill-conceived, poorly planned, or lack the working capital to attain success. Still others fail because their owners sabotage their chances to succeed through arrogance, lack of ethics, or misunderstanding what the role of an owner actually is. There are, though, other businesses—which I believe to be the majority—that could be successful but aren’t, simply because their owners don’t understood these Facts of Business Life.
And what are these facts? They represent the seven business concepts that every entrepreneur or business owner who hopes to succeed must have in his or her toolbox, including exhibiting leadership, maintaining control, protecting the company’s assets, planning, marketing effectively, having a warrior mentality, and understanding business. There are, of course, other important business concepts, but after many years of running a number of successful businesses and studying successful businesses managed by others, I have come to the conclusion that these are the seven essential concepts without which no entrepreneur can succeed or reach his or her potential.
But it’s not enough for you, as a business owner, to just understand these seven facts. It is equally important that you recognize how these facts are interrelated. Very few things in life work in isolation, and that’s true of managing a business as well. If, for example, you are very adept at planning or marketing, that’s a good start. But being able to develop strategic plans or market your product or service well will mean little if you don’t have a good understanding of business in general. Similarly, while possessing leadership skills or knowing how to maintain control in an organization will be of enormous help in enabling you to manage your company, unless you’re equally good at protecting the company’s assets and have a warrior mentality, it’s unlikely that you will ultimately be successful. In other words, you have to be good at all these things if you want to make sure your company will still be here 10, 20, or even 30 years from now.