Get Out Of Your Head & Take The Risk
Get Out Of Your Head & Take The Risk
How is hiring the right people essential for a successful business?
The best decision I ever made was hiring someone to handle the tactical tasks. It frees you up to focus on bigger decisions, like how to grow your business. When you’re stuck in day-to-day operations, it’s hard to make time for strategic thinking.
Once you bring good people on board, it makes a huge difference. Finding the right person is challenging, but when you do, take care of them. If they’re happy, they’ll help you grow, serve your customers better, and allow you to focus on other aspects of the business.
How can business owners obtain funding for acquisitions?
When I was looking to buy a business, I came across a funding method called ROBS (Rollover as Business Startups). It’s a government and tax-related program that allows you to use money from your existing retirement account. After 15 years in corporate, I had been putting money into a 401k. Normally, if you withdraw money, you get penalized with taxes, but with ROBS, you can use some or all of your retirement funds to start or buy a business.
Here’s how it works: You create a C corporation, which is owned by a 401k plan that you set up. Then, you move funds from your current 401k into this new 401k to finance the business. In my case, I used that money as a down payment for an SBA loan. I borrowed against myself using my 401k and also borrowed from the seller.
There are various ways to buy and fund a business. I chose this route because I had retirement money and was willing to risk it, based on the cash flow analysis I did. I needed to generate enough money to cover the SBA loan and replenish my 401k, as I still plan to retire someday. The SBA didn’t value the business at the price the seller wanted, which is common, but since the business was growing and had a good track record, I was willing to take the risk.
What advice would you give aspiring entrepreneurs?
Take the risk earlier. Get rid of the fear. Whatever you need to do—spiritually, emotionally—figure out what's holding you back. For me, it was fear of failure and fear of not being able to provide for myself or my family. You need to get your head and heart in the right place. Forgive yourself, forgive your parents if needed, and release those fears. That will free you to make the decision and take the leap.
I know I could have succeeded at the dot-com business I started years ago, but I was afraid to take that leap. I saw others in the same business making a lot of money, but I let fear hold me back. My advice is to examine your fears, figure out where they came from, forgive the source, and take the leap before you're too old to have the energy to do it. I wish I had done it much earlier because starting my own business was one of the best decisions I ever made.
*This interview has been edited and condensed for clarity.*
