Bill McBean built one of the most profitable General Motors dealerships in Saskatchewan, Canada. He later helped turn around an underperforming auto dealership in Corpus Christi, Texas. Now he runs McBean Partners, a family-owned investment company, and frequently mentors other entrepreneurs, offering his hard-won wisdom from the trenches.
McBean’s four decades of business experience led him to write the book The Facts of Business Life: What Every Successful Business Owner Knows That You Don’t, which offers advice based on the specific stages in a company’s life cycle.
The Intuit Small Business Blog recently asked McBean about his “facts of business life,” the challenges of staying on top, and the need to balance planning and action. Excerpts of our interview follow.
ISBB: Which facts of business life do you think small-business owners will find most surprising?
McBean: Asset protection. Most business owners want sales, gross profit, expense control, and net profit. They don’t think of asset protection as their first priority, but experience tells you in the long run that asset protection is important. When you’re just starting out, you don’t know how quickly your business can be destroyed by not protecting your assets. If your inventory is wrong, your business is crushed. If you buy new equipment for $50,000 and use it once a month, that $50,000 was wasted.
By asset protection, you’re talking about protecting inventory and equipment?
Assets aren’t just the ones you see on your balance sheet. It’s a philosophy. How can your products and services best suit the customer? Be great at managing customers after they buy, so they stay with you. The same goes for employees. You’ve got to protect those assets.
Why is it so crucial for small-business owners to adapt their leadership to the stage of business they’re in?
If you’re in business, you just can’t have every month be the same month. You lose focus on where the finish line is. In the five levels of business (opportunity, creation, success, maintaining success, and moving on) the first two levels are all about preparation. The three action levels go from survival to becoming successful in your definition [to] remaining successful, which is a lot harder than most people think.
Why do you think it’s so challenging to remain successful?
It’s so much work to become successful and once you’re successful, that fire in the belly dies a bit and apathy sets in.
How can small-business owners avoid that apathy?
Take a deep breath, but that deep breath can only be so long. Once you become successful, there are competitors coming out. Older competitors realize you’ve come in and taken some of their business — and they want it back. Once they think you’re successful and not searching for opportunities, it means that you aren’t keeping your eyes on the market. My advice for leaders is to understand that the competition is still there and that apathy begins with them. They cannot allow themselves to become apathetic. They’re the ones that have to put their foot to the gas and not let up.
There’s a danger in focusing too much on planning at the expense of action, or vice versa. How can small-business owners find the right balance between the two?
There is a way to bring those two together. The problem with a lot of people is they plan far too much, and it bogs them down. That’s where it really comes to a grinding halt. My recommendation for people who haven’t planned much is to begin very simply. Find two or three things that they think will make a difference. Set your company up to succeed and build up your plan quietly over the years, but don’t overplan.