I have often heard from career people that they wouldn't care to own a company. They realize there is nothing more taxing than feeling the weight of responsibility for attending to the needs of the business, and its staff. This never does gets easier, even when we achieve the status of absentee ownership; we're never really free from the concerns of the company. In 2004 my former company Scott’s Building Solutions Inc. was thriving in Ludington Michigan.
The previous couple of years I had been enjoying the true fruits of ownership, having hired Patrick Quinn to manage the day to day operations of four full time crews involved in cleaning a million square feet of office and industrial complexes, attending to carpet and window cleaning for residences, hard floor care at a multiple Rite Aides in West Michigan and the super lucrative emergency response projects (including water & fire damaged properties). The supervisors from each division reported to Patrick and I watched the day to day numbers and paid the bills. I had started the cleaning company with a just a new pick-up truck and less than a grand in the bank.
In the beginning the hours were murder. There was no day including Sundays which didn’t demand at least twelve hours of my time. Then as I begin to grow new hires start off enthusiastic but many of them quickly tire of the hard labor and seek an easier and better paying opportunity elsewhere. Unskilled labor is the easiest to find and most difficult to manage, turnover is high.
But I eventually cracked the code getting that under control by implementingsituational leadership and the guiding principles learned from the books of people like Jack Welch. Unlike others I didn't start out as an employee. I started as a contractor cleaning windows all over the United States . I’ve crossed hostile picket lines to clean high-rises and was threatened by Gangsters for working in the Nob Hill neighborhood of San Francisco without their permission. Most of what I have truly learned about business has been trial and error. I like to read so I apply what seems to work and forget the rest of it. What is most important at the beginning is important for the entire life of the business.
Companies need a growth culture. You create this by meeting people where they are and giving them the tools they need to achieve common objectives. Set boundaries, follow up on progress, and most importantly reward and celebrate winners. I don't believe that there is a more successful formula for managing a growth company. What works at General Electric also works on Main Street.
Business is awesome when you love the space you're in. It must be a line that rewards your value propositions. If you are seriously considering a startup ask yourself if you would be inclined to facilitate both guiding structure and have the patience and strength to coach staff who will in turn meet the demands of delivering to your customers with consistent quality. Of course all of this requires that we have obtained a certain skillset. Once you have your masters electrician’s license you are still only at the starting line to open a company of your own. Ownership is very much like the commitment a good student makes to his studies. He doesn't find much time to do a whole lot else with five or six challenging courses, each with its own syllabus, required deadlines and so forth. Running any type of business requires proficiency in at least four areas: Finance, Human Resources, Marketing, and of course Operations.
But even when I had gotten to the point where I was living sixty miles away from the office physically removed from the day to day activates of operations, with a large solid base of repeat business, I was still always thinking of the what if’s. Is Shirley alright; is there more going on with her than I am being told? Will David still be committed in a month or a year from now? Of course the space I chose had everything to do with the compensation I could offer the help and even the opportunity to promote people is ultimately limited by your own enthusiasm to continue to break into and conquer new markets.
In 2004 I was putting in bids on large contracts across the state and getting meetings based on my reputation. I knew exactly why I was committed, knew required investments both in time and capital. I knew what I was earning, the equity which was accumulating and what my projections for both revenue and profit were based on years of solid performance.
Truth is none of that seemed all that exciting anymore. It never really had, I liked cleaning because it was honest work and I had no idea who I wanted to ultimately be. It started out simply liking to climb things and wanting to be free of corporate America and I suppose I had achieved that. I knew that my good fortune was largely provided on the vitality of my hard working employees and that they were getting by in the same world with fewer resources than I had at my own disposal. I was tough enough to deal with that. I held the organization together by genuinely conveying my appreciation for their efforts and pretty much crossed my fingers hoping not to have to step in anytime soon to put out a fire.
I didn’t realize it at the time but I had grown complacent with where I was and when the really huge requests for proposals arrived, my gut told me to turn them down. The point is that whatever you choose to do it is most important that you never cease to grow your wealth as measured in equity, revenue and profit. To do this it is necessary , you must keep adding layers of new territory, new projects, new products or other value propositions and most importantly quality people to the business and be sure it continues to grow. But the only way that someone can stay that course and remain healthy is to really enjoy the space that you’re in, you have to buy in all the way and keep up that growth mentality until the day you sell. I knew it was time to sell when I had lost that drive to raise the ceiling. I also realize that I was exposed to change. Since I had decided not to grow my insulation would be weak should the economy take a turn for the worse, there would be little to protect me from having to step back into the day to day operations if Patrick decided to move on at some point. To cultivate someone else again requires growth.
The 80/20 rule was evident in every business I’ve owned. In Scott’s Building Solutions most of the revenue came from commercial janitorial accounts, with the best paying work being water damage restoration. I was a licensed builder and the general contractor on many projects. I used much of my career and budget experimenting with new areas;. All of that is great for personal growth, to learn tons of new stuff, but it is not the best way to accumulate wealth and in business, wealth accumulation is why most people go through all the trouble.
What happens is you experience cognitive switching penalty each day as you move back and forth from one process to another process. In services the equipment and supplies needed to clean a restaurant hood are much different than what you need to restore smoke damaged oil paintings. All of this stuff has to be ordered, organized, stored and transported. It all takes precious time and labor to do it. The training of staff is another consideration.
I write about ownership and how to win in business, I want those of you who wonder about what it really takes to find your own answers assisted from my experiences. I want you to know exactly how to travel the shortest distance to become a millionaire. I know it is cliché but it really is done by maximizing productivity. To begin to do that, choose one or at most or two services and stick with them! Fish Window Cleaning, JaniKing, Stanley Steemer and Serv Pro are all examples of cleaning companies that have done this and are now leaders at their respective niches nationally. There are tons of others. But unless you are from West Michigan you probably have never heard of Scott’s Building Solutions, Scott’s Janitorial or Scott’s Carpet Steamer. There are many experts in all of those areas in small ponds. To get to the deeper waters requires that you narrow your focus and amplify your results. Millions in revenues were produced in over twenty years of ownership split between those services.
But the truth is my record would likely be hundreds of millions in sales had I stuck with any one of those spaces. In a forty billion dollar industry dominated by no single company that goal is completely doable. No regrets, I choose to keep learning and now I get to share it all with you!
Chances are none of this would have been possible working for someone else. It happens, don’t get me wrong. You could land a job selling helicopters to the military, or become CEO of a giant corporation. But the truth is there are just so few of those opportunities available and they typically go to people who are connected to someone in the right Senate committees. That is called leverage and business owners are responsible to use leverage wherever they can to improve their market share. John Smith from Tuna fish Wisconsin would be hard pressed to get a majority vote from the board at Microsoft. Typically within the military industrial complex a candidate for an upper marketing position might be a Georgetown University graduate. West Point and Annapolis dropouts might have a better chance of landing one of those gigs than someone who went to someplace like Ohio State. Maybe after you become Governor. But hey this is America the land where anything is possible.
If you have talent but have been rejected repeatedly for that elementary teaching gig, there are alternatives to cashier at the local grocery store, you’ve just have got to be willing to keep at it and ask for introductions to key people. You need to create a flowchart and work your way up until you get a meeting with the boss. Persistence is key. Then find a way to showcase your ability, and move toward your dream. Even a sales representative working for Lockheed Martin will become a millionaire in a just a few short years.
This is how people move forward with their visions. Say that you love aircraft, you find yourself studying the subject when nobody's looking. You can start saving for the right education (connections, forged through the friends that you make at Georgetown or University of Washington). But even if you land the job someday and start to get those big 4% lead checks on multimillion dollar deals, you may find that you don’t like the culture. When you work for yourself you get to shape the company culture. That is quite a difference.
Sure if you become CEO of Johnson and Johnson, you will be the focus of many newspaper articles, trade journals and obtain national recognition instantly. But the owner of a regional company gains surprisingly large recognition within his area, known by thousands more people than he could ever possibly know personally. And trust me that is really cool too.
As the owner of a successful company small or large, you face many of the same challenges. With the exception of regulations where state and local municipal laws vary considerably the rules of the game of business are similar in the Mid-West, West Coast and the Golf states, they work everywhere. But if you enjoy entertaining people and spending lots of time in social gatherings that sort of thing might work for you too. Though if you sell out and choose to work for the man (just kidding) you will never have the freedom to choose your projects like you have working for your own company.
Either way the choice is yours. And the first step is the same, start to shape a vision for exactly where you want to take yourself into the future. Of course that can change, as opportunities arise, but the more precise your vision and the more you expand your focus to a limited scope of product or services, the more expert that you become, the further you will get at your endeavors.
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