Learning the Importance of Directness in Business Growth

Principle 3 of 9 from Ultralearning by Scott Young

Directness: Go Straight ahead. Learn by doing the thing you want to become good at. Don’t trade it off for other tasks, just because those are more convenient or comfortable.

What does this mean to me? 

Take advantage of having Chuck Waters Apparel as an opportunity to learn by doing. 

The thing I want to become good at is: acquiring, scaling and selling businesses. So according to this principle from the book, I should be direct. Do not trade learning by doing for other tasks such as reading or listening to podcasts. In this scenario, the most valuable action you can take is simply action. 

If I want to acquire, scale and sell businesses why do you think it has been so difficult to do this with Chuck Waters Apparel? 

I was too anxious to jump into a business without a solid understanding of what it would take to scale.

I lacked a good plan and structure. My mindset, thoughts and actions were all over the place. Still are. 

Discouragement hit pretty hard. After I realized I wasn’t making as many sales as I had thought, I became discouraged and used that as an excuse to separate myself from doing the work. “This isn’t working. I just need some time away to think and figure out my next moves.”

Why wasn’t I making as many sales as I thought? Goes back to lack of structure, goals or planning. I also took my foot off the gas and decided that I needed to spend more time developing products before I could deploy consistent sales tactics. 

I decided a couple months in that my product was not up to my own standards. It needed to be developed and improved. This caused more delays as product development is expensive and I lack sufficient capital to comfortably develop the product the way I would like to. 

Struggled with brand identity and establishing customer avatar. Not sure who we are as a brand and who our ideal customer is. 

What would you do differently next time you are looking to acquire a business?

Negotiate better. Understand the true value and how much the opportunity to acquire the business is worth to you. I think I overpaid for Chuck Waters - but I was ok with over paying because I knew my motivation was education over profits. The next one will likely be more about profits. 

Work towards a unique agreement that minimizes the money I have to put down. (Roland Frasier, how to acquire a business without putting any of your money down). 

Develop a thorough plan for the business. How am I going to scale this business? (See 10x plan notes from Biz Lunch). 

Acknowledge that I am a newbie in the industry. Have the owners give me a crash course in the industry.

Set a budget for the enterprise. This way I know that even if my plan fails I will not lose more than I have budgeted.

Make sure that the product or service is next to perfect. Harshly analyze the product/service. If it needs to be improved what is the plan for that. How? How long will it take? How much will it cost? How confident are you that you can improve the product/service to meet your standards? 

Search for strategic partners. Is there someone that could get in on this deal that would bring necessary skills or experience to the table? 

Establish overhead costs month to month. How much will we need to spend on website, advertising, events, subscriptions, software etc. each month in order to have the resources for exceptional growth?

 Establish a back up plan. What happens if everything goes wrong in the first 6 months? Your plan isn’t working, sales are stagnant or worse, decreasing. How do you handle this? 

Do not make a decision to move forward until you have answered all questions, set a plan, set a back up plan, understand overhead costs, have broken down the numbers - how many sales needed to grow X amount. Make sure everything is planned so that when you get the keys you  can start implementing your plan day 1 with no delays. 

The more I think about it, this type of deal is similar to a more complicated real estate flip. You negotiate favorable terms to purchase an asset. You implement a plan to increase the value of the asset. Then you look to sell the asset at a higher price than your all in cost. That’s pretty much it.