I was raised as one of six kids by old-school, blue-collar parents, and working was a prerequisite. I began delivering newspapers at the age of eight and cutting lawns at 10. When I was 14, my parents told me to go and get a “real job” at a restaurant. I just wanted to mow lawns – it paid a whole lot better than restaurant work.
But we all have a boss at 14, and they are called mom and dad. So I listened and waited until I turned 18 to give my parents my two weeks’ notice. I’ve been my own boss ever since, in industries from real estate and home services to hospitality and sports marketing.
When I started my most recent group of companies in 2014 with Andy, a lifelong friend and a corporate vice president, I wrote down six startup principles and strategies that I had learned in my decades in business. These principles have helped us build a multimillion-dollar, award-winning gutter services and franchise company.
We start each potential franchisee with an education in these principles so they understand the commitment involved in running a company. I also share our philosophy with the several small businesses with which I consult, ranging from car detailing to PR.
I hope it can help you set the foundation for your startup – whether it’s your first step outside the corporate world or your fifth.
The development of the original business plan is far more important than most small business owners believe. Prior to launching our company, Andy and I spent five months (days, nights and weekends) developing our new idea. We thought through the company name, logos, color combinations, taglines, target audiences, marketing strategies – you name it.
A well-researched business plan becomes a business owner’s first competitive advantage.
Many small business startup owners skip right over this part. But a well-researched business plan becomes a business owner’s first competitive advantage in an environment where others aren’t paying attention. You’ll use your critical early capital more intelligently, reach target audiences faster and more effectively, and, to put it simply, you’ll grow faster.
I’ve used this philosophy to great effect in every business I’ve started for almost 40 years. The mission statement, company philosophy and website decisions that Andy and I made in 2014 were the critical seeds for our long-term success.
In business, there are two types of distractions we may face: necessary distractions and unnecessary distractions. The young business owner must recognize the difference between the two. The true entrepreneur will remove unnecessary distractions and single-mindedly focus on growing the company. This single-minded focus has become yet another competitive advantage that we bring to the table every day.
When we started Cape Cod Gutter Monkeys, we made sacrifices to focus on the company. Andy, a lifelong gym rat, gave up softball, golf, soccer and winter basketball. I gave up 5am fishing, I sold the boat and I sold the Harley.
Distinguish between necessary distractions and unnecessary ones, and eliminate the latter.
You will always have distractions as a startup owner. During some of my previous startups, I was a parent of three kids, and as a parent, I attended a lot of track meets, wrestling matches and musicals. These things I call necessary distractions. Now, with my kids married with kids of their own, those parental responsibilities are a thing of the past.
Distractions will sap your time and your mental energy, and worse, your finances. Distinguish between necessary distractions and unnecessary ones, and eliminate the latter.
One key contributor to new business failure is a high financial demand on the company by the ownership. An owner’s salary that is too large will burn money that a fledgling company may not be able to support.
A new owner with the discipline to keep his salary low will have a higher percentage of revenue to reinvest in his company. And an owner who sets legitimate metrics of success before taking a salary increase creates incentives to hit those points, thus driving sales.
When we launched in September 2014, Andy and I each agreed to a salary of US$500 per week. At the time, Andy had left a six-figure job as Vice President of a large company. At six months, only after certain goals had been met, we each took moderate raises. We still take periodic raises, but almost a decade into the business, with millions in annual sales, we still don’t have six-figure salaries. In fact, all of our mid-level managers have larger salaries than we do.
An owner’s salary that is too large will burn money that a fledgling company may not be able to support.
Our commitment to keep the company lean and light has allowed us to build a regional industry leading company that has never had debt. We now run a fleet of 12 trucks out of our newly constructed, 1,022 square-meter facility, all bought with cash.
Andy and I do not take salaries that reflect our value to the company. Rather, we take salaries that reflect our commitment to the company. Instead of padding our personal financial portfolios, where we may earn 8–11 percent in the market, we keep our salaries small and turn as much revenue as possible back into the company, which continues to grow at 25–30 percent annually.
One of the best ways for a company owner to take a small salary is to eliminate unnecessary costs in his personal life. This goes back to the unnecessary distractions point, because indulging in expensive luxuries threatens the financial discipline a startup owner establishes to begin on the right foot.
Consider the out-of-pocket cost of the boat or the bike, membership at country clubs or the monthly payment for that extra car in the driveway. And consider the opportunity cost that these liabilities create each time the owner is using them. Ask yourself: How can I be focused on my startup company when I’m out on the golf course?
Ask yourself: How can I be focused on my startup company when I’m out on the golf course?
Eliminating these extras will have a dynamic impact on personal financial needs, turning liabilities into assets and adding revenue, while easing the financial burden on the company. And in removing these liabilities, the new owners will be removing unnecessary distractions.
There are three financial implications to getting lean by eliminating ownership’s personal debt. First, selling unnecessary personal items means more cash, the lifeblood of a startup, that can be infused into the new company as working capital. Second, any loans that were held against these items will be paid off, thus eliminating recurring monthly payments. And third, the regular financial strain of keeping these items useful and legal (insurance, registration, fuel or maintenance) is removed.
The new business owner has now turned personal liabilities into business cash assets.
From the start, Andy and I made a strong bet that the brand is more valuable than our paycheck. When the brand is the focus, then things like marketing, team building, co-worker satisfaction, employee safety and customer service come front and center – and the brand takes off.
Leading up to the winter of 2014-2015, our then-infant company had been spending some serious money marketing our new gutter-cleaning model while growing our small team. Chance favors the prepared, and so when terrible weather hit the Northeast, we were ready to capitalize on hundreds of snow-clogged roofs and gutters.
Many other companies in our region, on the other hand, were unprepared for this sudden economic boost and could not take advantage of it. For example, one company seemed to rival our production at first. But their team was thrown together at the last minute as a reaction to the weather, so they didn’t have the brand credibility that we did with prospective customers. They faded; we didn’t.
It’s far easier to build a multimillion-dollar brand by having a simple, clear and easily understood brand message.
By spring of that year, we had banked a significant sum of unexpected revenue and added nicely to our regional reputation. As owners, we did not take that additional revenue from the company; we used it to accrue a new truck, add two new employees and increase our monthly advertising budget. I still look back to that time as a critical point in our growth as a company.
Another thing I stress is to resist the temptation of early revenue sources that will contaminate the brand’s potential for long-term growth. Andy and I could have marketed roofing or exterior trim repairs, which we are qualified to perform, for a shot of short-term revenue. But that would have required marketing something that is not core to the business, and that might confuse customers as to our value proposition and would require our team to expand our skill sets instead of focusing on a single high-quality one. We wanted to be known for what we do: gutter services, the heart of our brand.
I’ve seen startup businesses limit their long-range growth by wandering out of their area of expertise. It’s far easier to build a multimillion-dollar brand by having a simple, clear and easily understood brand message.
Behind every successful business owner is their team. Team building is as important as any component of a new business. There are many levels of team building that will be necessary, but the two most important are likely to be the employees and the circle of professional partners.
When building the employee team, remember that the business owner is building a group of co-workers. Every co-worker brings two things to the table: skill set and personality. Skills can be taught and skills can be learned, but personality is highly unlikely to change. For this reason, when hiring, Andy and I focus more on personality and less on current skill set.
Personality is hard to gauge in a single interview. One shortcut is to look for co-workers from complementary industries. We have, for example, found that chain restaurant managers have a personality type that fits our team model. If you are the manager at a Bertucci’s restaurant, and your last name is not Bertucci, you have probably worked your way from the bottom up, waited tables, run a small team in the kitchen, battled through a busy Christmas season at the mall, dealt with a grumpy customer or two, worked the register and you are unlikely to be the type of person who calls in sick very often. You are probably my kind of guy.
Always surround yourself with the best talent available.
Only two of the 20-plus team members in our corporate office had any prior hands-on experience in our field. We could teach them all that, but they had come to us with a personality to build on.
The other team that needs building is the team of critical professional partners who don’t work for the company. I recommend that the new business owner be on a first-name basis with his accountant, attorney, financial planner, banker, tech expert and business consultants long before these people are needed. You don’t want to be ensnared in a legal dispute before you start thinking about building a relationship with an attorney.
As a small business owner, you need to recognize that you are the average of the five people closest to you, and you need to surround yourself with a quality team. From co-workers to your professional partners, always surround yourself with the best talent available. Successful business owners know that sevens and eights hire nines and tens. As the owner, you want to be the humble hub surrounded by a circle of high-value people who will make you and your company high-value.
Contributor Collective Member
Dennis Siggins is a lifelong entrepreneur and Co-Founder of Cape Cod Gutter Monkeys and the franchise company American Gutter Monkeys. He is also a founding partner of the PR firm Proven Media Solutions. A veteran of small business startups, Dennis has been an adjunct professor of business plans and financial planning as well as a consultant for small businesses across New England. Learn more at https://capecodguttermonkeys.com/