An Interview With Doug Noll
Published in Authority Magazine
Be consistent in the sport training and fitness. Don’t skip it. Just shorten it up on the really bad days. Then make sure you recover. It’s difficult to relax when it feels like the business is in trouble. But the fitness/recovery consistency is going to produce your best self. Stressors wear you out. Don’t underestimate the tole on your body and mind and emotions during a stressful day. Get rest then come back recharged to fight your good fight. So, more recovery is a huge key. Sleep 8 hrs. Really, you’ll be booked the other 16 with family, career, and sport. Hang in there, you’ll get plenty of opportunities to unwind and take more time. However, get the work done first.
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Startups have such a glamorous reputation. Companies like Facebook, Instagram, YouTube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles. Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup? In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experiences about what it takes to create a highly successful startup. As a part of this series, we had the pleasure of interviewing Paul T. Ayres.
Paul T. Ayres has started, operated, bought, and sold numerous companies creating above market returns for 40+ years. He is a professional business owner, leader, coach, and consultant. Ayres received his BS in Industrial Engineering from Purdue University, Lafayette, Ind., and his MBA from SUNY Binghamton, Binghamton, N.Y. He holds multiple U.S. and international patents and completed several post-graduate executive education programs. He currently resides in Eau Claire, Wis., with his family.
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Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I’m a midwestern raised kind of regular guy. Always a student-athlete from very young, where my parents focused on the ‘student’ part. I think my backstory really starts with me trusting my dad and mom and what they told me was the right thing to do and pursue. Not that I’m an always on the straight and narrow, but with respect to career and creating through work, yes, I really followed what they suggested, and kept my eyes open along the way. I’d work hard to think, ‘why’ and ‘how’ and whether or not my hypothesis was right or wrong, I really gained a lot of insight simply by being a consistent observer of what was going on around me in work. I discovered I loved making a difference through work early. Those very early days were building a fence or sweeping a warehouse; a bit later, maybe a time study on a wood treatment process or making a forklift dashboard more ergonomic and effective. As the challenges grew, I started to notice linkages, or simple cause and effect relationships: Some worked, some did not. Do this, get that. Try that, get this, and so on. Eventually, and through plenty of trial and error, I came to love the challenge of business. Especially the utility, margin, or both, that is created for the customer. This has always been a worthy and valid reason for me to work, that is for the utility and/or margin of the customer. For me it’s summed up nicely in the first sentence from my website, www.thefitprofessional1.com ‘My passion is the science and art of business and how business through people creates and sustains margin; not just the margin on your financial statements, but also the off-book margin that creates my stakeholder’s best life.’ My back story takes me from the new green engineer in the department at IBM, to running, buying, selling, and starting more than just a few businesses in the civil construction and materials segments, and then on to the water industry. Some of my ventures have failed, but most have worked and the lessons on my journey have been priceless. I did try to capture a nice cross section of this experience in my first book, ‘Funding Your Future — Beyond Banks.’ The book gets right to the meat of what it takes to really dial in an effective and successful Startup and is equally applicable to execution of growth initiatives for existing businesses. And I think it does a nice job whether the reader is starting the journey or at some point down the road.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
Which company! Maybe that’s a typical entrepreneur, have several going at a time! What a great question, because there is always an ‘Aha moment’ embedded in the decision to ultimately take action with every Startup; at least that’s been my experience. I’ll share the story behind the company I’ve just started, TheFitProfessional1, LLC through which my book, ‘Funding Your Future — Beyond Banks’ is offered through. It’s an Advisory, Coaching and Consulting company. I really didn’t start out with the though ‘I want to be a consultant.’ Rather, I was struggling with the transition from my primary business’s transition from my generation (3rd) to the next generation (4th). There is so much to capture and transfer. My thought was ‘I don’t want these young professionals to get beat up and bruised for the next 10 or 15 years before they are effective and making a huge positive impact. What can I do to ‘accelerate successes’ for them?’ But the epiphany didn’t quite hit right then. A couple decades earlier I had been though a pretty brutal set of events going from the second generation to the third. I ended up buying out three cousins, uncle, three brothers and dad becoming the sole owner. I realized now that I didn’t want to go through that again. Even though being the sole owner, this next step is actually now like a transition from first to second generation. Therefore I think its unlikely I’d experience those issues again. But I wanted to create the backdrop, business culture, family culture, operational principles, a family constitution if you will, that would do the job of preventing disharmony going forward. I thought I needed to transition to advisor and coach rather than CEO and dad. That’s when it hit me, the ‘Aha Moment’ was related to putting myself back at 25 and 30 and 35 years old when I so wanted to prevail and be successful, but I didn’t have all the tools and experience. My realization was I could help so many, besides my kids and junior management team, with the same issues I had back then. I don’t know everything, that’s for sure. But I do know what mistakes I made. I do know more than a few management and business knowledge, skills and disciplines that make the difference. And I am very interested in helping others to ‘accelerate success’ by saving them the time, money, resources and missed opportunities it might otherwise take them to reach their potential. Boom! The business was born, and even my book, ‘Funding Your Future — Beyond Banks’ doubles as a ‘how-to’ for my kinds in the subject matter it covers. Yeah, I was pretty jacked up when I also realized at this point in my career, now in my early sixties, I really want to teach and mentor, so this Startup, TheFitProfessional1, LLC is perfect for that.
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
I must mention two here. The first, albeit a bit corny or cliché maybe, is my mom, Jeanette. She was tenacious, outgoing, gritty, ambitious, smart, focused, and was a master at her network where she made everyone feel welcome, at least in her ‘good years.’ She always read. She read so fast and recalled everything. She was hungry to learn and to work to try to apply what she learned to those around her to make their lives better. Although she had varying success in the latter, these traits really made the impression on me that I needed to learn and grow by applying what I learned, then learn more, and repeat the process. And that there is no end to this process. The second is my first boss at the 2nd gen company I eventually bought out. A non-family manager in a family business. Old school. But effective and honorable. He was a pace setter and a pusher. And he had means by today’s standard that would likely put you in the human resources department right now, and maybe not leave but through the front door of the business! I respected his focus and the way he brought everything back to the mission of the company and the mission of your department and what your specific responsibilities were. He was a relentless guy — the energy he brought every day was the same from when I arrived in 1987 to when he retired from the company in 1992. To realize what the ‘corporate pace’ is with respect to your market and competitors and then to demonstrate the same through his tenacity was spectacular to watch. He’d poke two fingers in your chest on Tuesday and on Friday at the company function he’d have a beer with you and talk about your kids. You really know he was about the company and had high expectations and would push, but he also cared about you. I never saw him push anyone beyond what they could do. But I saw him push them right up to that line! Great guy, I learned a ton.
What do you think makes your company stand out? Can you share a story?
I compete in a space that includes a lot of Fortune 500-type retired or affiliated professionals. Most entrepreneurs in small to midsize startups are putting their world on the line. They’ve pushed all their respective chips into the middle of the table. Most clients that have either just started or been running for a while have too. There is an appropriate appreciation for an advisor that has done the same thing. I’m acquainted with a particular entrepreneur that started a business and grew it some then had it fizzle a bit. It was a rough emotional time. The truth was it was more of a side hustle. It’s not a bad idea to hedge your bets and have multiple income streams if you can pull it off. Doing this does create a partitioning of your focus and ability to execute with the Startup. I do wonder, given the idea was a good one and the buyer of the business (what really accounted to a customer list), is doing well; I wonder if the ‘all in’ would have made a positive difference? That is not to say a side hustle can’t work.
I’ve had legal boards, advisory boards, professionals, and the like advising me for decades and what I know about what works is those advisors that are closer to the risk an entrepreneur has owns a perspective that is more often than not more useful. I would share with the reader, as outlined in my book, ‘Funding Your Future — Beyond Banks’ that making the leap for a Startup includes a huge mental and emotional component. If you haven’t worked through this storm of emotions and stress that reflects the risk and pressure before, it’s going to be not just ‘not-nice’ but an advantage to have an experienced professional in your corner. I believe thefitprofesssional1, LLC has this advantage. Many may have executed on a Startup, but did they push all the chips, really, all their chips, into the middle of the table? And once that was done, what’s left to hedge the bet? This is a valuable perspective and skill set. I’d add the engineering and business mix and my utilization of and understanding of finance are very useful too. So many professionals really cannot read financials and don’t have much of a clue how actions in the company tie back to making a margin. This is in my wheelhouse to be sure; that is to understand the cash engine and make sure it tuned just right. I feel confident I really have a grasp on sound business fundamentals and what needs to be done to be a fit business and sustain that state of being over decades, not just years.
How have you used your success to bring goodness to the world?
Ah, the purpose-driven brand question! In my parent company, The Red Flint Group, LLC, you can go on my website www.redflint.com and see I have started a 5013c not-for-profit. Red Flint Racing, LLC. Its charge is to help disadvantaged youth participate in extracurricular activities, support those same facilities, events, and infrastructure. Especially when the support also does a great job of making the communities me and my staff work in a better place to live. I fund this through proceeds from my other businesses. My recent startup will have projects, like my book, ‘Funding Your Future — Beyond Banks’ where I’ll make a donation of at least 10% of the net proceeds to the 5013c. We do so much more too; including but not limited to the support of men’s and woman’s shelters and free clinics. We are glad to do it and it gives me and my employees that added reason to go to work every day. It’s a community focused give back.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
Self-reliance: It sounds like it may not be team oriented, but it is. Think of a football team where the lineman all have a job. The guard can’t constantly help the center, or another defender is going to make the game hell for them. The center must do his job and be self-reliant. My personal kind of starting point with this trait was the summer between my senior year in high school and my freshman year at Purdue. My dad, at the time the President of the company, after riding my bike to work, put me in his truck and took me to show me a couple properties. He showed me the line marked by a metal fence post and spaced about ½ mile apart. He said, ‘I want you to build a fence here. You can walk back to your bike; you can ride it right here for work tomorrow depending on how you plan to go about building the fence. And he drove off. I tell you I had steam coming out of my ears for about a minute. Then I realized what he was doing. I had no idea how to go about building a fence. So, I walked back to my bike and road the mile to the maintenance facility (good move!) and talked to people I had never met. They didn’t know I was coming. I hadn’t met them, and they called the office to find out who I was and if they should help me out. From there, I won’t bore you with the rest. But about two months later that fence was built, and off to Purdue I went. I learn so much about getting things done, how to use certain tools, communicating with people and what it takes to ‘take’ responsibility. Priceless.
Grit. I’m a fan of Angela Duckworth’s study regarding how follow through is enhanced by extracurriculars, especially sports when kids stick with them for two or more years. I see ‘grit’ as sustained high magnitude of effort over time in pursuit of a result. This was my case and between being a student-athlete and my summer job, I learned grit. It helped me in a very hard engineering program at Purdue, it has helped me really in all aspects of my life, since. I think Grit is huge and I think you need to do hard things to keep the grit muscle working. My story is one of sustaining it. I’m an avid mountain biker and a ‘wanna-be’ mountain bike racer; yes, they have races for men in their sixties and beyond! I recently did a five-day staged mountain bike race in the Swiss Alps, called the Swiss Epic. Me and my partner managed to finish ahead of 85 other teams of two, out of 415 total teams. Given the quality of the riders and the difficulty of the terrain, I was satisfied with this effort. The race over five days covers over 220 miles and over 39,000 feet of climbing. Day four did not work well for me. I finished, but with hypoxia, hypothermia, screwing up my food, electrolytes, and hydration, got sick that night. With a day to go, I had to dig. And dig I did, even though my younger and much more fit partner had to wait more than one would want to, we finished. And every day we pulled ahead. I find this relevant because there is so much in my life that used to seem hard, and now seems doable. I’ve experienced this in the past, but this ‘grit battery’ needed recharging, and so it was. You just must get to it. Yeah, so the combination of ‘do hard things’ and grit is big for me when the going gets tough in business and other aspects of my life. Helping professionals strengthen their mental toughness and grit muscles is another ‘why’ behind working my Startup ‘TheFitProfessional1, LLC’ to create and serve a tribe of ‘fit professionals.’
Faith. This includes what you might think to be sure. But there is a ‘business faith’ too. I define this as expectation relative to results. One drives the other. Taken honestly you get into an upward spiral and the result might be confidence, but mostly its optimism; but real, not exaggerated. I was working at IBM out of Purdue as a cost engineer which meant I assisted the real engineers and financial people with cost estimates on computers. We also would compare the manufacturing floor’s performance with our estimates and present them to management. Early on I didn’t have clue. I was also terrified of presenting and frankly, I was so bad at first, I’m surprised I wasn’t fired as I look back. But I stuck with it. So did they. Thank you, IBM. Each time I improved. I knew the expectation because I would witness great performance with other more seasoned presenters. Eventually I reached the effective zone which was followed by some raises and a couple promotions. My faith kept me in the game, so did trying over and over. And pointing out what I was improving on. This of course is tied to having a growth mindset, which is another trait you need to develop. But they all work together, and you grow. Just contemplating and most certainly executing on a Startup shows faith. If you then add the tie between expectations (honest estimates of performance) and results (the actual results) and do what it takes to move toward success in each area, it’s going to be a good road for you too.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?
Great question. Early on after I had bought out my family and was the owner of what remains as my parent company, I had a legal board of directors. Before I hired my outside board, we had worked on adding a Startup, a design company, for civil site design. Essentially you design the underground water and sewer, the grades and earth contours and then you build it with my construction division of my company. The construction was going quite well one job then lose on the next job. The design was doing the same. Rarely would they both have black bottom lines on both project components at the same time. But this did happen, and in fact was happening on a more frequent basis. The other divisions of the company were material suppliers in the civil construction space. They would charge the construction projects market rates for materials. The materials divisions and companies were doing quite well. All of this was known to the board. The board voted to exit the construction business and the design startup because of the earnings issues to date. In retrospect this did create the means to expand the materials business, but with the benefit of hindsight now had I stuck it out, we’d have been quite large and profitable creating opportunities for our employees and communities. I still miss the people. I was the sole owner, so I could have fired the board of directors and not made this move; so, I to this day look at this as ‘advice’ rather than in fact a board directive, but I followed it. I had brought the board in to in part train me given I was a relatively young man at the time. The move did not ‘feel right’ at the time. I so wish I had paid more attention to my gut. We ended up losing inhouse capability which supported mining for the materials divisions and absorbed fixed costs. But mostly I lost the input and support of some really good people. In retrospect, this was really a bad move. I think a contributing factor was I did not have an industry vet on my board of directors that would have likely suggested maybe there are other avenues to improvements. We did get improvements as designed, but we missed so many opportunities without the other companies and divisions. And we missed the impact of all the people we lost in the move. And I missed a lot of joy working with that team. It’s a pivotal moment, I think of it often. I would not do that again. It set in motion some other moves that unraveled a very good thing decades of effort had produced. I think it would have been good to have minimally a different profile to that board in terms of civil construction industry vets that understood the synergies that were about to go away. Its not that we didn’t, but we undervalued them.
Can you tell us a story about the hard times that you faced when you first started your journey?
What comes to mind first is the same feeling I had when my dad dropped me off to build that fence. I had just bought out my family and was the owner. The eyeballs looking at you for decisions and leadership in situations you have never faced before is quite an eye-opening experience of its own. I recall wanting to implement and execute an effective strategic planning and measurements process patterned partial after my IBM experience and partially in alignment with my industrial engineering and financial background (I had completed and MBA with an emphasis in finance). I worked my butt off making sure I had this dialed in. I worked with the management team, I worked with anyone and everyone I could get. I went to implement this through a retreat with my seniors (I had a span of control of 7 on a company of 300) and it fell flat. What I realized eventually was a good number of these managers and their reports were just not my guys. We were not aligned, and it was way more than any planning process. I was going right and too many wanted to stay left. I ended up replacing management in the positions that were not coming around. My bus was leaving, and they didn’t like where it was going. I got them off my bus. It was hard. It took a lot of courage. I wasn’t’ sure it was the right move at the time. It was. And not a year after the big change with an aligned team, that team was knocking it out of the park in so many ways. But, yeah, it was no fun.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
It’s about making sure you ‘do hard things’ somewhere in your life. And be consistent about it, really consistent. I am a believer sport is a great way to accomplish this. You get the added benefit of staying fit, which gives you more energy and less health concerns. But the real grit and mental toughness comes from being consistent over time. You get a bit of an ‘adaptation’ with your mental toughness every time you do something that challenges you. And like a muscle, this new strength can be applied really anywhere in your life, including your startup and career. However, like any muscle you can overdo it; we might call that burn out. In sport it might be an actual injury and we don’t’ want that. And again, like any muscle if you cannot work it, it will get weak. So, a balance must be found that works your grit and toughness systems yet make working them doable and a contributor to your life, not a distraction. It might take stopping something. I heard a story of another coach that was working with a young man. The young man wanted the benefits of the coaching and to start an athletic endurance sport. He told the coach he had no time. The coach said, ‘can you pull out your phone?’ The young man got to the page where you can see how many hours per week you are on the phone. He pulled it up and it has 12 hours a week. Coach said, ‘can you invest six to ten hours of that phone time in this sporting commitment?’ And of course, the kid did. But to get through hard times you must stick to your efforts and work hard to focus on the process. Sometimes the result can be a big motivator. But you are in a much better place if the process really motivates you.
For strategies I’d add that your perspective is very important. You can think about zooming in to a detail or zooming out to the big picture regarding your situation. You can find solutions in both perspectives. But mostly, it’s about deliberately practicing getting better at the knowledge, skills and disciplines your initiative requires. This enables you to be prepared for the unexpected. I think one more strategy is a form of mental acceptance regarding effort and discomfort. Some people say ‘embrace the suck’ or something similar. If it’s going to be unpleasant, accept it, don’t fight it. This is another skill that endurance sports help you develop that is absolutely transferable to all parts of your life and career.
The journey of an entrepreneur is never easy and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder"?
I’m back to learn to enjoy the process. Be a level three professional. Success as well as failures become like a signpost being passed in your car. They are events and the come and go and they are more a point in time. I believe you’ll find a good hint at just how to go about process and what to include in my book, ‘Funding Your Future — Beyond Banks.’ I do provide a solid foundation for business processes which is nicely applicable to any industry. Consistency is king. And the devil truly lives in the detail. Be a process fanatic. A professional mountain bike coach, world renowned, Rob Lee from Great Britain (a true process fanatic in business and sport) says athletes and professionals are similar. Level one kind of likes the basics, dabbles, and does the minimum and gets some ‘okay’ satisfaction out of things. Level two looks at the result. It’s all, and completely, about the result. Twos typically don’t have fun and can’t wait for the event to be over. A level three understands the joy and satisfaction are maximized and sustained by embracing the process. Level three anticipates what’s going to be hard and uncomfortable and prepares for it thereby better enduring the process parts that are very difficult. To level three, the process is fun. The win or loss is simply a point in time. Process drives a result, so the focus is on process. You use both wins and losses to learn what to do next. Continual improvement is the actual objective and results take care of themselves via the process. The good old hard work and consistency of the process. Be a level three professional like Rob is a level three endurance athlete. I realized these things early in my student-athlete career but didn’t use this terminology. The truth is I’m not level three in all things, I don’t think anyone is. The value comes from realizing where you are and then making the decision to deliberately practice and train and improve. One must enjoy the process, execute the process, be consistent with the process. So, for the reader, what is your process and how does it get you to your milestones? I assumed they have a process that gives you periodic feedback of where you are and enables you to improve along the way. If you don’t have a process, start there. And yes, it’s aimed at your objective.
Let’s imagine that a young founder comes to you and asks for your advice about whether venture capital or bootstrapping is best for them. What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
I must say this is a perfect reason to read my book, ‘Funding Your Future — Beyond Banks’ given I do address many aspects of this question. It’s not an easy answer. Afterall, I wrote a book on it. At the beginning I’ll just state, ‘do you know if your business is fit?’ It starts there. You really must understand your cash engine as it relates to your market and your capabilities. It’s the same either way; bootstrap or venture. But there are so many more alternatives to fund your business. Is a shame to just discuss these two genera of funding. It’s complex and you need to make real decisions about the objectives of your Startup and about your precise role in the effort. First, my humble opinion is it’s always better to minimize dilution of your ownership interests. The venture guys are going to take as much ownership as you can NOT negotiate your way out of. Besides, there will be multiple opportunities in growing your business where you might utilize venture funding. In the meantime, it’s quite possible you have many more alternative funding sources than you might think. These include your asset base, customers, vendors, and many others. Did you start this business to work for you or to work for the venture ‘vultures.’ With all due respect, venture funds, even senior dept for that matter, can really get their hooks in and run you and your company. I had a legal board member who referred to venture funding as ‘the legal mafia.’ ‘First, they take your life, then your family (because you are working all waking hours not to lose your business), and last they take your business.’ Clearly venture funding can accelerate success. There is a place for venture support to be sure! So, the actual and real potential of scalability is a factor. What is your business? Industry matters. The reach and size of the customer base matters. The current competitors or competitive substitutions also need to be considered. And what is left over for you. Are you going to grow and cash out, and do this again? Are you wanting to change the world through all the work and thought and effort you’re building a ‘purpose driven brand’ and hang with it until retirement? All considerations. Hey, the rest of the title of my book is, ‘Creative Alternatives to Fund Your Startup or Business Initiative.’ I won’t repeat all 58 thousand words here. It’s a straightforward easy read that answers this question in significantly more detail and offers you the catalyst you need to maximize your return on your Startup. I’d love to help you out. Just visit my website www.thefitprofessional1.com or simply read the book; ‘Funding Your Future — Beyond Banks.’ You may still want to call me.
Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
First, I have to say, read my book, ‘Funding Your Future — Beyond Banks: Creative Alternatives to Funding Your Startup or Business Initiative. You’ll get a lot of ideas there. I have many more than five to share within those easy read pages. For now, here are some very summary items I would say are near the top of the priority list, but subject to some change based on at what point is your business at:
1 . Business fundamentals must be right. It starts easier than you think: who is going to do what by when, where, for how much, with what expected result. What are the actual requirements and roles to ensure a return on the invested capital once it lands. One particular acquisition I looked at had a particular height ‘ask’ in price for the deal. I had been at the game of M&A in the civil construction materials space for a long time. The numbers made no sense, and they were beyond what I typically see as the owners ‘blue sky.’ After a lot of review including talking to employees, it became apparent a significant amount of business was being done on a cash basis. It didn’t hit the books. I didn’t want any part of that. The company ended up being bought for 40% more than I offered. To a large extent that was a defensive maneuver to keep companies like mine out of their market. But the point is, the business fundamentals weren’t only off, they could have created a lot of legal trouble had they gone on. Get the business fit first.
2 . Focus only on precisely what needs to be done. In selling, general and admin costs I challenge you to consider 100% of your SGA ‘discretionary.’ Do you really need it? Can you precisely show the cause-and-effect relationship to margin creation? In my book, ‘Funding Your Future — Beyond Banks,’ I cover a story regarding the recent frack sand rush in Wisconsin; ‘Wisconsin White’ is what the sand was referred to. Many of those companies had hefty SGA expenses up to and including ‘CEOs’ for simple one plant and straight forward operations. Almost all of them are out of business. Complexity and expense were added to these operations for apparently no margin-producing reason. They had options. Make sure you separate the emotional ‘it’s really nice if…’ from what’s needed. Much more detail on this one in the book.
3 . Find your ‘Magic Market Graph.’ How do you know you are going to get the sales you think you are. Replace as many assumptions as you can with evidence. Your sales are good, but with investment comes the requirement of return — so why is it that you are going to grow. For me in my water companies there is a well-known data point that shows a graph of the diverging demand over supply globally for the next 35 years. Find your version of this. And add details. More on this in my book too.
4 . Who’s money, is it? Get your stakeholders’ expectations aligned. Both as the money lands and also where it’s being invested, and when it starts to pile up, where is it going? It’s amazing to me how this is not answered for companies/startups and is a reason cash burn happens. Let’s prevent cash fires!
5 . If you can’t make it work on paper, it’s unlikely you’re going to make it work in reality. In fact, I say, do not go forward if paper doesn’t work. This means running a complete set of financial statements complete with investments and into the future at least 5 years. So many in the professional world think five years is over kill, its not. You need to simulate when your assets are going to be replaced and demonstrate that your business is robust enough to replace them, pay the creditors, and get you a return. It’s an easy mistake to unconsciously show a robust plan, but not account for asset replacement. In fact, a ten-year horizon is good just for this reason. A longer horizon also pushes you to account for your human resources plan at an earlier stage: this way you’re proactive in these investments, not reactive. In ‘Funding Your Future — Beyond Banks’ I discuss how you test this to ensure all stakeholders are accounted for and run various futures that might happen. Its more than best/expected/worse cash. You must cover all requirements. The devil lives in your assumptions. Work very hard to back up assumption with evidence from reality. And if you cannot, then establish a clear and realistic casual activity that will drive the result dependent on the assumption.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
Reliance on assumptions that are not well developed. Including market data, sales data, capabilities of facilities and people. Timing of investments in people and hard assets are usually way off too. A huge miss is discretionary time. Meaning the assumption that staff can handle the additional workload that comes with growth or the new initiative. Or you don’t’ actually have the capability, and you think you do; it goes like this: ‘Of course I can hire someone with that skill set.’ To prevent all of this you need to develop your assumptions with evidence. This is hard work, and not always straight forward. Contact me at www.thefitprofessional1.com if you want assistance.
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
This again is precisely what I’m focusing on at www.thefitprofessional1.com. For the purposes of this interview, I’d offer this: Decide what you are going to stop doing. You are going to have to focus to be successful. If you are a youth sport coach or board member, in a golf league, treasurer at your church, etc., you cannot do it all. Professionals start to limit results when they have more than three major silos of activity they need to handle — for most of us this is family, work, and a sport/hobby: Or maybe your lawn. So, if you have family and company/career, that leaves one more, and I recommend ‘sport.’ Where you work on strength and fitness as part of the focus and training as you aim for continuous improvement. You will need to be strong. You are going to have fatigue that hits you hard and a strong physical, mental, and emotional foundation is important. In fact, if you have time before your startup, get in shape! Get healthy!
Next, get your loved ones on board. Make sure you communicate what is coming and the hours and the challenges ahead. Then work to accept what is ahead so when it arrives you are ready. Be consistent in your application. Think of the process for the business and execute on it. Including to imagine or visualize the hard days. Embrace through your thoughts how hard they might be. Use a journal to capture what you think is going to be a hard day; and the hardest day, and then write what you might do about it; because it will show up. This, I’ve found, is great preparation for what is to come. Even if it’s not spot on, you’ll have a foundational optimistic case to consider. I cover a lot of these emotional and mental stressors in ‘Funding Your Future — Beyond Banks’ if you want more details.
Be consistent in the sport training and fitness. Don’t skip it. Just shorten it up on the really bad days. Then make sure you recover. It’s difficult to relax when it feels like the business is in trouble. But the fitness/recovery consistency is going to produce your best self. Stressors wear you out. Don’t underestimate the tole on your body and mind and emotions during a stressful day. Get rest then come back recharged to fight your good fight. So, more recovery is a huge key. Sleep 8 hrs. Really, you’ll be booked the other 16 with family, career, and sport. Hang in there, you’ll get plenty of opportunities to unwind and take more time. However, get the work done first.
There are more tips precisely on this topic in my book, Funding Your Future — Beyond Banks.’ Check it out.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Help people to help themselves. It’s what I’m working on to get going in TheFitProfessional advisory and coaching. To not be parasitic in nature, but to provide knowledge, skill, and disciplines for professionals to be self-reliant. So they can accelerate their success. The impact of this in resource and time savings is immense because all those fit professionals can then leverage their rescued time and extra margin and invest it in activities and people that make a difference for them. This multiplying impact is what I’m after. I want to contribute whatever I can to make sure as many people as I can accelerate their success. This way, the impact is much larger than I can make alone and helps so many people to live their best lives and in turn pass it forward in some manner that also brings positive change. A powerful design, I think. And it’s not ‘if I could start’ but rather, ‘I’ve started.’ Wish me luck!
We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
First person that comes to mind is Mikaela Shiffrin. I’d love to discuss the topic of focus. I can think of no other challenge in the world requiring more laser focus than any alpine ski event. I think ‘focus’ has components, and I’d love to discuss this concept with her. And of course, just to have the opportunity to get any insight from someone so accomplished would be spectacular. I’m a huge fan! I’m working on my next book project and ‘Focus’ is one of my success attributes I work to do a deep dive on. I’m a believer that sport has attributes that carry over to life and business far greater than the usual cliché. Focus is one of them. I believe this attribute is superhuman in Mikaela, and I’d love to know more about how she executes this. She puts aside so much mentally, emotionally, and even physically and just executes. Her domination in the sport is hard for non-skiers to ponder. I’m with Ingmar Stenmark, I think she goes way past 100 wins and I think the world has to say she’s the most dominant athlete of all time. I personally think she is right now. Her ability to use all components of focus is something I’d like her ‘take’ on relative to her success. And to have one of the most interesting people on the planet comment on my hypothesis would be a thrill to be sure! Her consistency, and the part of her life where she struggled to pull the focus in, then got it back. That process and that execution is awesome. She’s overcome so much. She is inspirational. I’m dying to meet her and discuss this, and of course, so much more because I love to ski.
How can our readers further follow your work online?
They can visit my website www.thefitprofessional1.com. You can also watch me come down the learning curve on the art of podcasting. I have two products. A one to two hour bi-weekly podcast where I generally bring in a subject matter expert. We discussed optimal performance. It is really a good time and I enjoy it. Each effort gets better and my commitment to the listener is to get them something actionable they can execute in their world to deliver their best life. So far, we’ve discussed leadership, fellowship, mental toughness, information technology, and the catastrophic management principles used on the ‘successful failure’ of Apollo 13. That channel is @thefitprofessional1 on You Tube. The second product found at @marginmaxminute is what I call The Margin Max Minute. This is a weekly message, five to ten minutes long, focused on one actionable item you can immediately implement resulting in maximizing your margin, optimizing your team, or rescuing your time. My passion is the science and art of business and how business through people creates and sustains margin; not just the margin on your financial statements, but also the off-book margin that creates my stakeholder’s best life. Tune in, you won’t be sorry. You can also send me and email at paul@thefitprofessional1.com
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!
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Check out this interview by THEFITPROFESSIONAL1, Paul Ayres with the Small Business Show interview on American's Small Business Network (ASBN).
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