Archive for category: Book Club

Today’s business environment is different from anything studied or reviewed in the modern era because the times and culture we are in are significantly different than any other in the modern era. While trying to stay ahead of the curve of an economy in flux, many business owners have been looking for new ways to overcome the turbulence. However, Ryan Holiday believes that the ancient Greek and Roman philosophy of Stoicism is the approach that current and prospective business owners and sellers should adopt. His best-selling book The Obstacle is the Way dives into the lessons that can be learned from Stoicism which we can apply to challenging times, including in the world of business ownership.

Rolling with the Punches: In Three Parts

The elevator pitch of Stoicism is that it is a philosophy of life that focuses on what the individual can control. Instead of reacting to outside influence, the practitioner remains calm and focused on what they can directly influence. A calm mind is able to think logically by removing emotion from the equation. In The Obstacle is the Way, Holiday believes that you should face challenges and accept them as an opportunity to grow. Time spent complaining about actions outside of your control is time wasted. Accepting the hand you have been dealt and moving to overcome it is much more valuable.

There are three parts to the path forward when encountering any obstacle. First, your perception of the challenge is key because an accurate perception means that you can formulate a clear path forward. Once you see your path, you are able to act on it, which is the second part of Holiday’s approach. Finally, when you reach a roadblock in your path, you will have to enact sheer will to stay focused on the challenge and overcome it, and not stay fixated on what could have been or would have been. Willing yourself to remain present is the key to learning from the past and being better prepared for the future.

Best Laid Plans?

One of the challenges of acting on a plan is knowing what to do when that plan suddenly becomes inoperable. Most business owners attack a problem with a clear and consistent approach. They evaluate their options, decide on the best step forward, develop their plan to move ahead and get to work putting it in place. However, when an outside force derails your plan, how do you react? Most people try to find ways to remain with their plan. After all, they followed their processes to develop the best plan possible, so why not fight to make it work as it was designed? What is the right way to proceed?

This is where Holiday suggests accepting that what is right, is what works. Time spent worrying about deviating from a previous plan is time you could spend moving forward and learning new insights that could solve your problem. He doesn’t suggest abandoning a plan, just that you shouldn’t allow total adherence to a pre-existing plan then lead you to lose valuable time and energy by remaining static. Instead, focus on channeling your energy toward movement into a new and more flexible plan.

Where There’s A Will

The third part of Holiday’s path to accepting that the obstacle is the way is to impose your will onto the challenge at hand. But he doesn’t mean the type of will that you may hear about when a larger company bullies a smaller company into submission. What Holiday is referring to here is the Stoic will. The ability to remain resilient and flexible while maintaining quiet humility as you overcome your obstacle. Problems will occur. Plans will be affected. Nothing will run perfectly smoothly. And that is okay. If you follow the teachings of Stoicism you will accept that many problems will occur. If you believe in your business you will treat these problems as obstacles to overcome and lessons to be learned and become a better business owner for it.

The business of being in business is often a paradox. While you may strive to create structure and systems that serve as the bedrock for a stable business foundation, you will also be faced with challenges that threaten to shake your systems to the ground. You must learn to transform these random quakes into a support structure for an even stronger business. You can do this by accepting these challenges as inevitable, remaining focused only on what you can control, and seeing these events as tools and lessons to be wielded for future challenges. You will come to relish the fact that the obstacles we face are often our best teachers.

If you want a feel-good antidote for your bad business days, we’re always happy to provide a pick-me-up! Give us a call.

Habits are powerful tools for your personal and professional development. That’s why there are so many books devoted to them. But one has emerged in recent years that helps reframe the discussion around habits to help others succeed with them where they may have previously failed: Atomic Habits by James Clear. 

Start Small, Finish Big

“Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity…meaningful change does not require radical change. Small habits can make a meaningful difference by providing evidence of a new identity.”

Just like compounding interest in a bank account, small habits don’t just become powerful habits, they actually give you more power to make other habits which can make big changes. The power of these changes, like a snowball, is cumulative.

But How?

Clear has Four Laws of Behavior Change to help readers understand how to build these habits one at a time. These are four characteristics of each habit you wish to build.

Be Obvious

Your new habits need to be obvious, not vague. You can’t simply “be a better manager” or “lose weight.” You could “become a better manager by developing stronger personal relationships with my team” or “lose five pounds in the next three months.” When working on the habit gets tough (as it inevitably will) you can always come back to the obvious goal.

Be Attractive

Clear unabashedly wants to use your body’s chemistry to help with habits. Dopamine is released not only when you experience pleasure, but even when you anticipate it. For example, gambling addicts have a dopamine spike right before they place bets, not when they win.

When your body thinks an opportunity will be rewarding, dopamine spikes in your body. But when dopamine rises, so does your motivation to act. 

Going back to our weight loss example, going to the gym may be unattractive, but watching a certain TV show may be very attractive. By making it so that you can only watch that show while at the gym, you can make your new habit attractive, as it carries a pleasure you want.

Be Easy

Complicated is the enemy of easy. When you make a habit complicated, you will make excuses not to do it. You need to build a string of successful habit performances and that’s simpler to do if the habit is easy and straightforward.

Be Satisfying 

The fourth law, be satisfying, is about repeating the cycle so that you can continue to pursue an obvious, attractive, easy habit. That feeling of making progress is in itself satisfying.

Clear also notes the importance of not breaking a habit chain. Try to keep that streak alive, but if you break it for any reason, don’t give up. Get back on track as quickly as possible.

There are many other important points Clear makes in this helpful book. To get a peek, here’s a free excerpt on the four stages of habit.

A habit many of our team has here at Apex is reading. If you liked this review, check out the others in our Book Club series.

There’s a reason you’ll find Jim Collins books on the shelves of many C-Suite managers: there’s helpful advice and thinking in them, particularly for large, publicly-traded companies. But in recent years some of his books, including Good to Great, have come under fire for being “wrong.” In this review we will address some of those concerns, but first, some great points that make the book worth reading.

The Right People on the Bus

If you’ve ever heard of or used this phrase, you’ve already learned one of the key lessons of Good to Great. Instead of seeking to motivate the people you already have with mission and vision, start by hiring people who buy into your mission and vision. When you’ve got the right people, you also have to make sure they are in the right seats, i.e. sometimes you have someone who is culturally aligned with you but is in a role that doesn’t leverage his/her strengths. 

Confront Brutal Facts

Collins tells a fascinating story of “short pay” in Chapter 4. Bruce Woolpert of Granite Rock allowed customers full discretionary power on how much of an invoice would be paid based on satisfaction. The customer does not need to return the product or ask for permission. He/she simply circled the offending item on the invoice, deducted the item from the total, and sent a check for the balance. “Red flag mechanisms” like these, allow companies to treat errors and problems as information (and to proactively respond in a way that shows the company values customer satisfaction above all else).

Elsewhere in this same chapter Collins underlines the importance of acknowledging shortcomings so that companies can improve. Less echo chamber, more constructive dialogue. 

Be a Hedgehog

In a chapter called The Hedgehog Concept, Collins puts forward an intersection of three areas: passion, economic engine, opportunity to be best in the world. He notes that the companies he labeled as “good to great” in his study all focused on this intersection with the simplicity and single-mindedness of a hedgehog.

The ability to be a hedgehog allows companies to not be tied to “what we’ve always done” and consider taking bets on where the market is going. One of the most shocking moves Collins documents is Kimberly-Clark’s willingness to sell all its mills in order to become the best in the world in consumer products or Walgreens’ ability to end its nostalgic food service component to focus on clustered convenience both in-store and online.

But, Two Companies Went Bankrupt…

Much has been made of the fact that two companies that Collins profiled, Circuit City and Fannie Mae, have both gone belly-up, for entirely different reasons. But this isn’t a sufficient reason to discard Collins’ book, which is so extensively researched that there are over 40 pages of appendices documenting the methods and questions for its findings. It’s simply a reminder that having a great company doesn’t guarantee that you can’t fail, or that market conditions can’t suddenly and catastrophically change.

Indeed, Collins’ book takes readers on a journey, from getting the right people on the bus all the way to pushing a reinforcing flywheel of momentum that takes a company from “doing fine” to “killing it.” But practices that worked for publicly-traded businesses will work for small businesses too, especially around leadership and innovation. No matter what size your business is, if you become great, you can’t rest on your laurels. You have to always keep tweaking and refining so that complacency doesn’t set in. Greatness never rests, even though sometimes it ends.

Want some ideas on how to take your company from good to great before you exit? Let’s talk.

Ed Pendarvis founded Sunbelt Business Brokers in 1979 and grew it into a company with over 300 offices in the US and 30 offices in foreign countries. BizBuySell tapped Ed to write a book distilling some key ideas for buyers and sellers to consider in a transaction and that 100-page text is The BizBuySell Guide to Buying a Small Business. It’s available for $.99 in Kindle format, or you can get it for free if you’re willing to give some information to BizBuySell.

The book is chock-full of solid information for first-time buyers and sellers. Chapter titles include:

• Value Drivers of a Business
• How Much Can I Make?
• Financing, the Key to Success When Buying and Selling
• Due Diligence (Never Fun and Easy)

Three Key Ideas

As we said the book is only 100 pages so it’s an easy and worthwhile read. But we chose three ideas that you should take to heart right away.

Business Owners and Decisions

Early in the book Ed talks about business owners and how they make decisions. They have to make the best decision (which is sometimes a guess) based on the data available to them (which is sometimes incomplete or even nonexistent). Add common sense and your gut and you’ve got a complete decision.

If that is what the entirety of what decisions in your business life will look like, you should realize that this is already in effect when you are buying or selling a business. A transaction is never going to be a straightforward slam-dunk. Do what you can to mitigate risk, then make the best decision you can. Whatever challenges you face can be chalked up as tuition for continuing to build that business and what you can inform a future owner about.

The Basic Purpose of a Business

Ed is insistent that the basic purpose of a business is to make a living for the owner. If it is not consistently doing that, it’s failing as a business and if it’s failing in that purpose for long enough, it might be time to call it.

He also gives three years as a benchmark for survival. He says that a business is on the way to saleability if it’s lasted at least three years. There’s a certain momentum that comes with longevity. But remember that without systems in place, a business can’t sell.

Focus On What You Would Do

While buyers might be focused on what the seller has done in the past or is doing now, Ed encourages them to consider instead what they would do if they took over. If they take the time to think through ideas and possibilities for new products and services and/or revamping the company as it is now, you can solicit the current owner during the transaction to get his/her perspective.

Now keep in mind that if you want to add social media to the business and the previous owner doesn’t even know what social media is, he/she might not have too much to share. But perhaps you want to expand into a different market or cut a cost or even fire a vendor: the previous owner might have experience to share. 

Or the owner might tell you that those were things he/she would have loved to get to but never did and has some encouragement and contacts for you to leverage your ideas. Don’t count on having an unlimited open line to the seller forever. Utilize the period from the Offer to Purchase all the way to closing to get as much information from them as you can.

Apex is part of the legacy of Ed Pendarvis, so you can imagine we are fans of his ideas. If you have questions about parts of the book, we’d love to talk with you about them. Give us a call!

Let’s face it, a lot of business books are pretty boring and can be a lot shorter.  Part of why we have this book club series of articles is to steer you away from those (Good to Great, anyone?) and towards books that won’t feel like a college assignment and offer thoughtful reflections and sometimes, good advice.  The Barstool MBA: Why Running a Bar Beats Running to Business School is one of those books.  Co-authored by successful bar owner Dan Maccarone and best-selling author Bob Sullivan, this book is unconventional from the start: it’s only available in audio format.

A business-oriented title from the Audible Originals series, this 8.5 hour listen features both authors reading, as well as a “tip jar” section at the end of each chapter offering summary and a few “tips” to crystallize what you’ve just heard into ideas you might implement or try.

If you’ve ever worked in a bar, you’re going to enjoy some of the stories that are shared.  If you’ve never worked in a bar, you’re going to get a much better appreciation for all that goes into making your time at one enjoyable.

The book takes us from pre-opening, to opening, to closing and/or selling a bar.  While we follow one particular project of Maccarone’s, a NYC bar named Destination, the authors have correlating stories of other NYC bars to offer context to their lessons, as well as stories of other tech startups and exits to help you see the through line of their “earned at the bar” lessons running all the way to Silicon Valley.

So, here are a few bar snacks to get you interested in giving this book a listen:

Chapters 1 and 2 are very much about beginning with the end in mind.  While we may think of a bar as just a place to relax with some friends, the best ones are memorable to you, ones that you describe to others, as a place “you just have to go” to.  Those places have applied a forensic level of intentionality to what the bar will be and how customers will feel inside it, in other words, the customer journey.  This can include:

• What will happen on slow nights?  Will there be live music, games, food promotions?  Each of those possibilities brings a different kind of crowd that may or may not mesh with what the bar is and stands for.
• What sort of drinks are you serving?  If you’re trying to hawk independent beers, carrying any of the major brands can undermine your legitimacy.  If you’re serving high end cocktails, how competent are your bartenders with those drinks?  The bartenders themselves — are they the type that not only get you regulars but have those regulars tell their friends?

Chapters 5-15 are the heart of the book and discuss everything from employee theft (it happens very often) to “not drinking at your own bar” (which is less about getting drunk and more about remembering that you may not be your own customer) to getting one-star reviews (as we have said, how you respond is almost as important as what the original reviewer said).  A couple highlights include:

• Buyback analysis.  Regulars and good customers get “buybacks,” or free drinks or food at some point.  What you might not know is that this isn’t random.  A great example that is shared is of the customer who is, without fanfare, getting up and putting a jacket on, but suddenly finds a fresh drink or an unexpected snack delivered to them.  He/she shrugs his shoulders and, not in a rush, sits down to the buyback, which inevitably leads to another purchase of food or drink.  The best bartenders are always observing when a strategic buyback makes sense for someone they’ve never seen before, and the best bar owners make sure that there’s a coherent buyback policy for regulars that everyone is on the same page about.
• 86ing customers.  One of the great satisfactions of owning a business is being able to fire customers who are rude or who don’t seem to understand boundaries.  Alas, this is a regular occurrence at a place that serves alcohol.  The various situations the authors share only serve to underline the poisonous effect that bad customers can have not just on other customers, but on employee morale.  Traditional businesses can really learn something from bar owners here.

Chapters 16 and 17 deal with closing a bar, and as business brokers, we’re obviously interested in exits and how those come together.  You get insight into the end of the bar Destination, which you’ve followed throughout the book, but you also learn that business cycles and trends also affect the value and saleability of bars.  If you’re the last Irish pub for sale when Irish pubs are on a downtrend, unsurprisingly your valuation will be lower, even if your numbers are great.

We think you’ll enjoy this unconventional business book, and if you want a sneak preview via a short video of the authors, you can find one from Audible here.

Need other recommendations for books?  Check out our Book Club series.  Got one for us?  Give us a call and we might add it to this series.