Gibsonia Gazette

Don’t Waste Valuable Lessons! May 10, 2010

When I was an owner in the radio business, my partner and I put ourselves and our families on the line to borrow money to build a group of small market radio stations.  At the time, it was the right thing to do if we wanted to follow our dream.

Our business plan and financial projections were proven out by our banker’s own research and projections.  We had determined that our AM/FM combination in Lake Tahoe would be our “cash cow”, supporting the entire group and allowing us to buy additional small market stations.

But, alas, that was not to be.  You see, California descended into a six-year drought shortly after we bought the stations in Lake Tahoe.  Lake levels dropped by a stunning eleven feet; in fact, there were beaches around Lake Tahoe that did not exist Lakeside before the drought.  Long boat docks were completely out of the water.

Our revenue model was based on the “thriving” tourist economy in Lake Tahoe.  Unfortunately, as the drought continued, the tourists stopped coming and the retail failure rate exceeded 40%.  Survival, not advertising, was the top priority for the remaining businesses.

Our “grand plan” to build a valuable group of radio stations and sell them at a high profit, since radio station multiples in those days were at all time highs, evaporated.  Sleepless nights became the norm.  Arriving at the station at 4AM was not uncommon.  Trying to be positive for our employees’ sake was very difficult when our innermost feeling was despair.

The idea that we could fail had never entered our minds, yet there we were, on the brink of personal bankruptcy.  I remember one January evening looking out of my office window in Kingman, Arizona and noticing that it was still light; the days were getting longer, and that gave me hope. Shortly thereafter, just as the western sunrise kissing the mountain tops signals a new day, we found a kind of optimism when a buyer emerged for our properties. We narrowly avoided bankruptcy, and were asked to stay and continue to operate “our stations”.

The lessons I learned through that experience have stayed with me.  I found that it is more important to find out what you don’t know than to know what you do know.  I also learned that friends and family did not think any less of us; rather, most admired the fact that we had the guts to try.  Failure is a building block upon which future success is constructed.

Here are some things that I learned as we went through this ordeal:

• Never allow your emotions or ego to override good business sense
• Hope for the best, but plan for the worst
• Maintain as much transparency as possible with employees; you never know where good ideas may come from
• Make any necessary cuts now, don’t wait to see if things will get better
• Don’t stop making the right investments in your business, just be sure they are the “right” investments
• Keep a good cash reserve
• Look at every new day as a new beginning
• Don’t worry about what other people think; failure is not something of which to be ashamed
• No matter how difficult it may be, do not compromise your values

That experience did not deter me from the idea of someday being an entrepreneur again. Henry Ford once said, “One who fears failure, limits his activities.”  And so, I started my own consulting business in 2002, and have the great privilege of working as a VISTAGE Chair and private coach, with entrepreneurs who have built businesses, made some mistakes, had some successes, and who realize that this is a journey in which every day gives you a fresh start.

The days are again getting longer and we are beginning to see a light at the end of this recession tunnel, so it’s time for you to evaluate where you’ve been and where you are going.  Sure, it’s been a tough road, but if you’ve survived, that’s a win.

It’s time to think seriously of the lessons you’ve learned.  Knowing what you know now, what would you do differently if you had to go back to September of 2008 and relive the last 20 months?  Take whatever time necessary to answer that question, because those answers should be the basis of the model for how you run your business going forward. Write the answers down.  Put them where you can easily revisit them. Use them to build a better business that will withstand whatever comes your way. Don’t waste those lessons learned!