10 Things I Learned In Operating A Business

Michael Lodge

Michael Lodge

Over the last 15 years in business I have experienced a lot by owning different types of businesses all at the same time.  I have had a tax practice, a call center in the Philippines, a nursing review school in the Philippines, a healthcare staffing firm and a real estate firm.  All at the same time.  Now I started doing business as a CFO consultant and corporate tax compliance in 1984, working with clients in various industries around the world.  I learned a lot.  But what I learned over the last fifteen years is from hard knocks and knowing when to shut down a business when you see it’s life coming to an end.  Not because your running the business badly but because certain businesses change and you need to learn to move on and do something else.  You end them because it is not your core strength and it did not compliment your core strength.

The call center was a good business when we first entered into it in the Philippines.  We were one of the first call centers to set up shop, handling mortgage generation clients, E-bay and other accounts.  However, we were a small shop, and our competition were 100 times bigger then we were and more and more large call center companies began moving into the Philippines and we were fighting for the same accounts as the large companies.  

During the call center life I would spend sometimes six months at a time in the Philippines managing the day to day operations and training staff.  With work in the Philippines comes crises – it happens about everyday there and drains you as a business owner.  I still remember the night I had called for my car to come and pick me up so I could go out but then cancelled the car.  So when I cancelled I had the driver go back and park the car where we stored it.  On his way back three gunman attacked the car and shot my driver in the face knocking out his entire jaw, it was completely gone.  He got into the hospital at 1:00 a.m. and was not seen by a doctor until 5:00 p.m., and that was only because I went to the hospital and saw him still sitting in the emergency room in pain and blood running out of his face.  I screamed and yelled and finally got him into a hospital room with 30 other patients.  I thought at that time how lucky I was to be an American and live in America instead of a country that places no value on life.

Two years later I shut down all operations in the Philippines because I felt it was no longer viable to do business in country where corruption runs wild in all parts of life and no one places a value on human life.  Sometimes you have to shut a business down because you see it failing because of the environment the business has to live in.  It is not worth the trouble to do business in a corrupt nation where everyone had their hand out or was stealing from you.  A good story to prove this point – we gave our Administrative Assistant a loan so her family could purchase a car.  She paid us back using our own company funds out of our bank account.  Another example, I had a legal letter going out to some people in the Philippines, I left the letter down at the security desk of the building.  On the way up the elevator I forgot I needed to add something to the letter so I went down to the security desk to get the letter back, when I got off the elevator the security guards had opened my letter and was reading it.  They saw me and one guard ran out the door and the other one was stuck behind the desk and could not escape.  Another experience is when I hired an attorney to represent the company in the Philippines, in one of my meetings the attorney told me that if I had any friends that needed a liver transplant he could arrange it – what?  I have a whole list of experiences like this.  My point in telling this story is, never be afraid to shut down a business where corruption is in every part of life.  Shut it down before you loose too much money.  I shut it down and moved onto other ventures.

Throughout the years of being in various businesses I found that it is OK to shut down a company when it is not living up to its potential.  I have done that three times, there are just some industries that have too much competition that it is worthless to throw money at something that is a costing you more money to operate then you are bringing in.  Shut it down, it makes good sense, to keep it open just drains resources from successful operations.  There is no shame is shutting down a company that drains from other successful operations.

So what have I learned in these many years in operating many businesses.

  1. Focus.  If you have a strong business focus on that business – make it a leader
  2. Compliment your business.  If you want to open up another business make sure it compliments what you are already doing.  Don’t go off into another industry where it may hurt your successful business.
  3. Don’t be afraid to fire clients.  There are so many clients that are right on the line of bad ethics and will over step the line and cause your company great pain.  They are they kind of clients that love you when they feel you are helping them but will turn on you when things go bad for them.  Fire them, if they pose a threat to you – get rid of them.
  4. Focus on your core business.  Become the best at what you do.  Hire the right people to get you to that point.  When you hire someone make sure they bring value to your firm.  Value creates more business, a better reputation, and stronger revenue performance.  If you see an individual that is a risk get rid of them.  Fire them just like a risky client.  Never be afraid or ashamed in closing down a business where it is just not working.  Remember it is not what other people think it is all about you and doing what is right.
  5. Have a crises plan.  Every company needs to have a crises plan.  One bad decision by an employee can create a crises.  Have a plan ready because no business knows when a crises will hit you.  And when it hits you it will be so hard that you may fall back, but if you have a plan you will move forward.
  6. Always learn.  Every single day learn something new.  There is so much information out there on what to do and how to deal with it.  The more you learn the more you are able to grow as a person, learning opens your eyes every single day of where the world is, what business issues are going to affect you.  Every morning I get up at 5 a.m. and study the business news worldwide.  What is happening in the news can affect your business – learn – plan.
  7. Surround yourself with a strong legal team:  Every company at some point is going to have a bad client that wants to cause you harm through a legal suit.  Find the best attorney out there that can defend you and has the ability and reputation to get things done.  The two most important people in your life – your attorney and your accountant.
  8. Compliance.  Make sure you have a strong team inside your office that understand the importance of compliance and remaining in compliance with industry standards, tax, accounting, legal, and other issues your company may have to address.  Once you fall out of compliance it will cost you with penalties and interest.  Remain in and focus on your company compliance.
  9. Hire only the best.  The most important part of your business is who you hire.  Make sure they are better then you, they know more then you, they work hard, they are not afraid to dig in and get things done.  If you hire better then you then it puts your company on the path of being a leader.  Put your ego to the side and hire only the best and those that will challenge even you.
  10. Prayer and moral strength.  The most important part is to have a prayer life and to ask for guidance and wisdom on a daily basis.  There are going to be hard time, not everyday is going to be perfect.  On the non-perfect days you will need wisdom, courage, and moral strength to do what is right.  When you are hit hard with a crises – pray and push back and do better.

If you have any questions please submit them to:  tax@icontaxgroup.com