What I learned from closing my second business…
Over the last several months my partner and I have been discussing and analyzing whether or not we should close down our business after seven years of operation.
We came to the conclusion that it was best to shut it down.
It was a great run, especially for two guys who didn’t really know what they were doing in the beginning, but we figured a lot of things out over seven years.
I will speak from my perspective only; because at the end of the day all I know is my perspective. My first business was and still is, real estate, but my second business was a service. This was a different beast altogether.
There are many reasons why I could say I agreed with shutting it down, but if I am honest with myself, it really comes down to one reason.
I could say that it is because we lost one of our biggest clients, which was one of our first clients as well. When I say we lost them, we didn’t technically lose their business to a competitor or anything. They had just made some changes and were doing more things in-house. They actually said that they would probably still do business with us but just wasn’t sure of timelines.
I could also say that it was getting harder and harder to execute on some of the functions of the services we provided. Which would be true, especially for certain clients.
Due to certain regulations and policies by the government, it actually helped our business in the beginning, but some of those early needs that forced companies to need our services waned over the last several years. Also, many of the organizations we worked with have changed many of the processes and procedures over time as well, which led to many of them not wanting or needing our services as much.
I could also say that my partner and I agreed with shutting it down, because we were both at different points in our life and career. And the business was really on autopilot, and allowed us to do other things.
What started out to be a full-time job became less than a part-time job for both of us.
Keep in mind; both of us left full-time careers at pivotal moments in our careers seven years ago. We both went from making very nice salaries (six-figures plus) to making zero dollars.
We both had mortgages, I had several. He had children at critical stages of life. Or should I say, expensive points in life.
At the time we made this decision to go all in. All we had were our personal bank accounts, some ideas, a few leads, some terrible processes, and a lot of HOPE.
We weren’t dumb at the time. We had planned and prepared. When we launched we thought we were ready. But we learned a lot about business, sales cycles, and the reality of operating a business. Especially a business that is more of a product than an actual business.
What I learned from the experience was this.
- Business is hard. Starting something from nothing is difficult.
- I learned more about what it takes to operate a business.
- I learned that most businesses are making it up as they go along.
- Companies outsource services more than you would ever realize.
- I learned about taxes. States, federal, business, and how it impacts your personal taxes.
- I learned pricing.
- Sales and execution
- Take risks.No matter how big or small. When I went to zero then, the stakes were smaller, since then I have done it twice again.
I could go on an on about what I learned, because I learned many things along the way, that I wouldn’t have ever learned if I wouldn’t have done it.
Now here we are seven years from when it all began. And we are shutting it down. As I mentioned earlier, it really comes down to one reason why I decided to shut it down.
The one reason is commitment. It is really that simple. Here is what I know about commitment.
Commitment has nothing to do with passion. Although if you have passion for something it helps you have more commitment towards it. But you don’t have to be passionate about something to be committed to it. That is my opinion.
But I lacked commitment towards it.
Wherever there is commitment. You will see three things.
You will see time and energy being expended. And you will see money being spent on it.
I didn’t have enough of any of the three of these being invested into the business.
If I am honest with myself, we probably should have closed it many years ago, but we would renew a contract or land another one. That would give us a shot in the arm, but it would wane after a few months or so.
It is not a sad time that we made this decision. It really is something to celebrate.
We both have other things we are doing, and although I didn’t put as much time as I should have into the business we are closing. It does allow me to focus on my current business.
It is also the reality of life, all good things to come to an end. We were profitable from day one. We never lost a dollar of our own money. We made money along the way, which was the most important thing.
But the thing you can’t put a price on is the education I got from running a business. That education is more important than anything.
Takes risks, keep going, and pursue whatever it is you want to pursue in life. You only have one. Don’t have any regrets.
- Published in Self Development Addict Blog
The 100 Million Dollar Sale, and the two lessons you need to learn from it.
If you have never heard of Henry Rowan before, don’t worry most of us haven’t. I hadn’t until I listened to an old podcast from the great author Malcolm Gladwell, on his podcast titled “Revisionist History” from July 2016. Gladwell’s podcast is one of my favorites to listen to.
The episode titled “My Little Hundred Million”, was the third episode, in a three-part series Gladwell did around education, and primarily the irony in education and how access to it is still very limited for some of the poorest children of America.
Mr. Rowan, who was a the founder and president of Inductotherm Industries. Was an engineer by trade. He was an inventor who created the metal-melting furnace. His company opened its doors in 1953. Mr. Rowan was a graduate of MIT with a bachelor’s degree in Electrical Engineering, he was also a veteran of the Air Force.
In 1992, Mr. Rowan and his wife, gifted 100 million dollars to Glassboro State College in New Jersey. At that time it was the largest one time cash gift ever given to a public college or university.
How did the Rowan family decide to give that amount to the college. Was it because the school needed it? Was it because they decided they wanted to? Or was it because some great fundraiser asked him for it?
It would be a combination of all of the above. But here are the lessons we can learn as sales people.
The Rowans’ gift to Glassboro began with a fund-raising request by the college in 1990: $1,500 for two tickets to the Autumn Nocturne gala. They bought them.
Later on Mr. Rowan was solicited for help to fund the gap of four million dollars for a library they were building at the college for seventeen million dollars.
Mr. Rowan told the solicitor from the college that he wasn’t interested in funding their library.
Here is the first lesson for all of us. Never try to sell something until you know exactly what it is your prospect is interested in buying.
Mr. Rowan suggested at that time that he would be willing to gift Twenty Million dollars for the business school.
As you can already tell Mr. Rowan was a guy that was interested in value. He was interested in making a difference. A little back story here.
That is why Gladwell did this story to begin with. Mr. Rowan, at the time he was being asked to contribute to Glassboro State, he wasn’t also being solicited by his alma mater MIT for a donation as well. They were looking to fund a project of 850 million dollars.
Gladwell, in an interview with Mr. Rowan asked why he chose to give his money to Glassboro instead of his alma mater MIT. Mr. Rowan said “My little 100 Million wouldn’t have made a difference in the 850 million they were trying to raise.” But 100 million at Glassboro State College would make a huge difference.
So often sales people never spend enough time trying to learn what it is the buyer wants to do. If you understand what it is the buyer wants, you will always find a way to earn their business if you have what they need.
The second lesson you can learn here is “It is never the Cost of something, it is the value”.
I can’t find the specifics, but I assume the fundraiser was attempting to get Mr. Rowan to donate some part of the four million dollar gap for the library. Most sales people would have walked away from this situation after being told no and said that the buyer (Mr. Rowan in this case), didn’t have the money or didn’t want to spend the money.
Which is not true. He was willing to spend the money, he suggested twenty million, and then ultimately donated 100 million. It had nothing to do with the amount. It had everything to do with the value he saw in the money he was donating.
Again, Mr. Rowan wanted to make a difference, and in his mind covering the gap of the library or donating twenty million to a business school wouldn’t have made a big enough difference in his mind to bring the value he wanted to bring.
By donating 100 million dollars Mr. Rowan learned that he would impact the school forever. They could build an engineering school that would teach engineering to bright young kids that couldn’t get into the elite schools such as MIT or Harvard to name a few.
Glassboro State College was ultimately named Rowan University named after Henry Rowan.
If you are in sales remember these two lessons. Always get to know and learn what it is your prospect wants. Not what you want to sell or what you think they want.
And secondly, it is never the amount of money. It is the value that they are getting for the money.
Most often, it is not less money, it is more money. If you provide more in services and in products, and charge for them accordingly the prospect will be willing to pay more, because they can see how the services will solve their problems. Dont provide less, provide more, and charge more. More often than not, when we don’t think a solution will solve our problems, it isn’t the amount of money, it is the details of the solution. The better the solution, the more we are willing to pay for it if we think it will solve our problems.
Happy Selling.
To your success and your future.
- Published in Sales Blog