Lessons I’ve Learned from Starting a Business

Main Points

• Michael Sayre shares his personal experience as he started and grew his business. 

• Starting and running a business is not for everyone, and it's essential to have the right motivation. 

• Building a good product is insufficient; you must focus on marketing and distribution channels.

• Identifying your target market and understanding how they choose the right distribution channels is crucial. 

• Walt Disney Company's relationship with Pixar is an excellent example of a successful business partnership and distribution channels.

Transcript

Hey everyone, welcome to the In Your Business podcast. CUI Wealth Management produces this podcast. My name is Michael Sayre. CUI Wealth Management is a financial advising firm that focuses on helping Executives and business owners with their financial planning. We also provide retirement plan services such as 401K services to companies.

Today, I wanted to talk about my personal experience as I started and grew my business. I hope to provide perspective to those starting or have started a business. I hope to bring some ideas and thoughts for those trying to take their business to the next level. And for those involved in a business or the later stages of their business, some of the lessons I've learned will ring true to you and inspire you as you move forward.

Starting and running a business

Starting a business is only for some. Our culture romanticizes the idea of leaders and business owners people. The critical point I've taken away from reading How to Win Friends and Influence People is that one of people's greatest desires is to be necessary. Because we desire to be essential and see important people building businesses, many people are drawn to business because they want to be necessary. If this is why you start or run a business, you will likely have to struggle through this.

Some people like building or running a business because of the potential money they can make. This motivation or the previous motivation should not be considered wrong. Still, it's challenging to make it through when you want to quit if your motivation is solely based on being essential or the money you can make. One of the main reasons I started CUI wealth management is that I came across many 401k and other retirement plans that were under service and had errors. There were, or are, a lot of advisors out there who focus on personal financial planning and neglect the 401K business. Some advisors think they should do that because they are licensed to sell 401K. This is why I have seen so many plans that are struggling.

Some things that have made our business successful include the niche market we have serviced and the systems and organization we have focused on as we have built the company.

Here are a few things I have learned as I built my company. Many people are more intelligent than me and have learned other lessons I hope to learn as I build this company, but I can speak from experience to the points I'd like to make today.

A Good Product doesn't guarantee success.

There are no guarantees when you start building and running your business. I want to discuss this concept, similar to my last point. If you have the best product on the market and nobody knows about it, nobody will buy it, and you'll go out of business. There's a balance between building the right product and distributing that product to those who will buy the product or service. I have seen companies that offer a mediocre product or even a product that isn't differentiated. Still, they are good at marketing their product and succeed in their industry.

I have fallen into the trap of focusing so much on the product that I need to spend more time marketing the product. There are moments of give and take in business. I once heard an analogy of paddling a canoe. You will go in circles if you only paddle a canoe on one side. You must make good judgment calls and know when you need to paddle on one side of the boat and when you need to paddle on the other.

A couple of years ago, I spent a great deal of time building the business infrastructure for my business. During this time, the growth of my company slowed significantly. However, once I started focusing on sales again, my company grew substantially quicker. This is because the product was much better than it had been before.

Distribution Channels

Most products and services are not meant to service everyone in the world. Some products will be helpful for a more significant market than others, but if your target market is everyone with the pulse, you will likely have a much stricter time building your business.

Here's what has worked for me: I try to identify first who my clients and prospective clients are, and then I want to know how these prospective clients make decisions, and then I can decide what distribution channels make the most sense as I reach out to these prospects. For example, if my prospective clients spend their time on LinkedIn and not Instagram, I will focus more on LinkedIn to reach out to them and capture their attention. Suppose my clients don't make decisions simply by finding me on LinkedIn but want to meet face-to-face through an introduction. In that case, I need to meet the right people who will get me in front of them and make that introduction. I have wasted a decent amount of time focusing on the wrong markets, new leasing, and distribution channels.

A great example that I've seen in business is the relationship the Walt Disney Company established with Pixar. In the early 90s, Pixar animated Toy Story. Even though Toy Story was an incredible new product, it would never have had the success it had if it weren't for the partnership it created with Disney to provide distribution channels to the right audience.

Planning vs. Execution

I've seen people plan so much for their business that they plan themselves out of business. I've also seen some people wing it so much that they have an inconsistent message and inconsistent service. There's a balance.

An eye-opening book that I read a few years ago is Smith. Whether or not this was the intended message, one of the main points I got out of this book is that there are several competing interests in building a business. For example, as an entrepreneur, you are looking for opportunities in your market. You're looking to lean into the future and build something unique. On the other hand, business needs to be managed. Management requires organization, processes, and consistent behaviors. This directly conflicts with the creativity and forward-thinking it can take to build a unique product or service. Aside from the entrepreneur and the manager, Emmitt talks about the technician, who is the person who is doing the work for the business.

I won't go through every facet of E myth; I recommend you get a copy and read it. I think there are some great points in this book. But, the point I am trying to make is that it is easy to get so caught up in the idea of the business that you can lose track of making the best decisions to grow your business. There is a balance between planning and execution. Don't get so concerned about planning and managing that you plan and manage yourself out of business simply because you cannot look forward to the future or provide enough sales or technical knowledge to run the business.

You can't do it all yourself.

One of the hardest lessons I've had to learn in business is you need to involve others to grow and scale the business. As I said earlier in this podcast, I had to sacrifice a great deal to build my business. With all the required sacrifice, it's easy to get so attached to your business that you don't allow others to take the reins on some of the most critical aspects of the company. Your business is your baby, and sometimes, you feel like you're the only one who can offer the correct answers. I have started to change the way I think about my business. I've realized that if the business owner cannot step away from the business without it collapsing, it is not as much a business as a practice.

When I started my business, I took on all aspects of the company. I did all the marketing; I made all the sales; I ran the operations; I did all the client servicing; I did all of the technical work; and the list goes on and on. Plenty of practitioners can build a company by continuing with this model over time. The issue I see with this is that a business with this model will eventually reach a level without more capacity.

The more I bounce from one project to another, the harder it is to do exceptional work on any of those projects.

Sacrifice

In our society, we respect those who have the willpower, desire, strength, and sagacity to start a business. I know many people who want to start a business. They like the idea of running a business, but they are unwilling to put in the work it takes to have a successful business.

Suppose you are a business owner or interested in starting a business. In that case, you will see all kinds of ads, videos, and content about making millions of dollars with little effort. I've seen businesses have tremendous success right off the bat. I've seen other companies that have taken years to grow.

Though there are outliers, I often see the winners as those who are persistent, work hard, and sacrifice a lot before they see any success. I think that's one of the reasons why people say to do what you love. If you start a business doing what you love, you'll probably not spend all your time doing what you love. At some point, you will have to run all the facets of the business.

When I started building my business, I had to liquidate most of my assets because I could not get a loan from the bank. This is because my company is in the 401K space. We provide a service. That means there is no collateral or at least very little collateral that can be put out to a bank.

Also, because 401K businesses have to do with investments, there are strict rules regarding loans from other people or gathering other forms of assets to start a company. Because of this, I had to start my company with my personal assets. I had to go through what it is called, or what I like to refer to as the starvation phase, where you work 12 to 15-hour days and bring home almost nothing.

Persistence

Along with lots of work and no money coming in, you have to deal with those around you trying to talk you out of it. Some people will have good intentions, and others won't. It's human nature for people not to want you to do better than they do. There will be plenty of people who we'll be trying to watch your back, and we don't want you to suffer from the hard work that would come from starting a business without any guarantee that it will work. Other people will discourage you because they don't want you to be more successful than they are in life.

When I started in the financial services industry, I remember someone telling me that one of the best things you can do is burn the boats. He meant that if you have a Plan B for when the business may not work out, that will be too tempting and distracting for you, and we'll keep you from ultimately reaching the goals you want to accomplish.

Because I work in the 401k industry, I get to meet with owners and decision-makers of companies regularly, which is one of the reasons why I love it so much. I get to talk to these business owners and hear what kind of sacrifices they've made and what persistence it's taken to get to where they're at. I get involved in their business strategy because 401k is not just about doing what your competitors do. It's about finding ways to align your strategy, your tax strategies, and your employee engagement strategies and building something unique to help your company grow.

My company still has a lot of room to grow, and I'm not saying that I've made all the best decisions, but I've learned a lot from the mistakes that I've made, and I feel like there are some areas that I have excelled in as I've built my business. But entrepreneurs, HR, and executives are my people.

These are just a few lessons I have learned as I have done business. Whether listeners are looking to start a company, you have a company that you're trying to grow, or you are finding new perspectives or new ways to look at things, I hope this has been valuable to you. If you haven't established a company and you have experienced some of these things or have a similar story, hopefully, this will remind you of some of those times and help you grow.