Last month I wrote about “Asking the Right Questions to the Right Audience.” I shared the questions my contractor friend posed when he reached out to me for business advice. They were great questions and I believe others may find my thoughts, experiences, and insights valuable.
Q: What is the greatest lesson you have ever learned?
A: This advice came early in my business career from the late John Stillwell, a general contractor and mentor who become my biggest customer at the time. He had offered me a $250,000 labor contract to lay the block on a Walmart. Thinking the job was too big, I told him I had planned to do a smaller job just down the road with a slightly higher margin.
When he quizzed me as to why I wouldn’t even give the big job a try, I laughed and told him I was happy to do my $1 million in sales at 10% net profit each year and that was all I would ever need. John said, “Listen Son, 5% of $10 million is a hell of a lot more than 10% of $1 million. On the small volume you are doing, if one job goes wrong, you will make nothing for the whole year.”
I changed my mind, took John’s job and did very well on it. It was the beginning of my launch into doing much bigger projects.
I know there are going to be some big ups and downs, and some of my early contracting failures taught me to think big. In contracting, thinking bigger often means having enough volume is the key to covering any unexpected hits.
Side note: Although I desire to do more volume and larger projects, I also require good margins on the work. A barrage of work bid on too little margin can rack up major, and perhaps uncoverable loses.
Q: What are you learning now?
A: In this business, it can be great today and bad tomorrow, so never take anything for granted. Build tremendous cash reserves and save them for lean seasons because hard times will come. Those not prepared with a good equity position will not survive the next big downturn.
I am also learning through networking with other business owners, reading books, listening to my business coaches, and studying daily on how to manage my companies successfully. I was not hired as the CEO of a $150 million enterprise. I have grown my businesses from the ground up, and I am still learning as I go.
I recognize that I do not know everything, so I need the advice from those who have been there before and have the experience. I value the wise guidance I have received from respected leaders and trainers, and I use it to help me make decisions.
Q: How has failure shaped your life?
A: I have failed more times than most. But I have also taken so many more risks that I stumbled upon some things that worked well for me. I like to call it “failing forward.”
After losing nearly all my net worth in the great recession that began in 2008, I paid consultants $30,000 to tell me how to turn the companies around. They said it was not possible to survive without bankrupting two of my four companies. This would make my two remaining companies cash positive and able to prosper.
They said the banks had already factored in the costs of taking the hit when they loaned me the money, so they are expecting the loss anyway. I told them I could not do that for I was not raised that way. I had signed on with the banks and will pay back everything I owe either now or years in the future when I resurrected.
I lay in bed looking at the ceiling while thinking to myself, wow, you have really done it this time, there may be no way out. I woke the next morning and told myself, no more sweating in bed all night long. I will never, never, never give up. I ditched the consultants and kept the businesses. One of those I closed later while paying all outstanding debts. Never giving up has been my guardian angel ever since.
Q: Who do you know whom I should know?
A: Laotzu states, “Knowing others is intelligence; knowing yourself is true wisdom.” So, dig in and get to know yourself. When you have a strong insight into who you are – your core values, your strengths, your weakness, and your priorities – only then will you be capable of making effective decisions that align with your perspective and expectations.
As far as making personal connections, I know a lot of great people, but Melvin Hinton with MH Masonry is the first person who comes to my mind. Melvin has the kindest heart of anyone I know, I use him as one of my role models. I strive to emulate his kindness and generosity in all facets of my life.
Q: What have you read that I should read?
A: My favorite books of all time are “How to Stop Worrying and Start Living” by Dale Carnegie and two books by Earl Nightingale, “Lead the Field” and “The Strangest Secret.” They relate to knowing yourself.
I find these books have been instrumental throughout my career in shaping and molding my mindset and keeping me focused on what is most important. I am also an avid reader of business books of all kinds. My selections are influenced by the current state of my companies or problems we are facing, and I seek out publications that address the situation.
Q: What have you done that I should do?
A: I take recruitment very seriously. I have invested a significant amount of time finding and aligning the right people and situations to drive my companies forward. Once I put this talent in place, I get out of their way. It is important to acknowledge their expertise and allow them to do their job unencumbered. I am fortunate to have found so many high-level players that complement one another and the teams they lead. I also make sure my employees in the field and on the floors at the factories and warehouses know how important they are, as they are the lifeblood of my companies.
Q: How can I add value to you?
A: My friend came to me looking for the same type of mentoring that I seek out regularly. I was happy to impart some of my business knowledge and experiences to help a fellow businessman.
It was also incredibly valuable to me that he took the time to visit my operations and have honest conversations about our businesses. And because his business is an avid user of EZG Manufacturing’s equipment and Malta Dynamics safety products, any advice I can offer to help him grow his business, ultimately benefits us both.
