The Entrepreneur’s Secret to Getting Help
“If you sit across the table in a quiet way with a sincere heart, very few people will tell you ‘No’ if your request is reasonable,” said Marty Tighe, founder of Donnelly & Co.
I interviewed Marty last week and was overwhelmed by the importance of his advice. Marty is an instantly likable entrepreneur. He loves people and approaches everyone with a big smile and his hand extended. But of his 40 years in business he said, “I sometimes pushed the needle too far.” Meaning, he made decisions that brought his company to the brink.
And it was one of those decisions that was once cause for us to meet a few years ago. He needed an emergency cash infusion. He hired professional managers to take his business to the next level, and he stepped back and let them run with it. These professional managers were great at designing strategies and spending money but did not understand cash flow.
We talked on the phone. He gave me a quick overview of his problem and how he got there. Then he asked for a face-to-face meeting.
When we sat down at my home, he said, “Here is where I am and why I need your help. And here is what help looks like.”
The number was doable, but I failed to see the opportunity for me.
And the reason, after a detailed analysis by a trusted fellow angel investor I brought in, was this. Marty needed more than cash. He needed to dramatically cut his expenses by restructuring his business. My fellow angel and I did not have the expertise in Marty’s industry to pull it off. We said, “No.”
This was one of my most difficult No’s of my career. This man poured over three-and-a-half decades of his life into this business. He was a humble and experienced entrepreneur. I loved the guy and wanted to help him. But in the end analysis, he was in a business I knew little about. He was on his own. And I thought for sure, this would be a bitter, bitter end to what was a great career and a great company.
But that’s not what happened.
Marty contacted four competitors. He knew the people who ran those companies. Being in the same industry for years, Marty, as you would now expect, built great relationships with these people. And Marty built something they envied. He built a call center business serving high-end retailers in a way his competitors couldn’t. He owned something they wanted.
And he found out, it was him more than his business.
One of his competitors had the cash, industry experience, resources, and strategy to make a deal work. This competitor restructured Marty’s company by eliminating the professional execs, office space, and IT infrastructure to get the business to positive cash flow. In addition, they allowed Marty to do what Marty did best. Close big, high margin, big brand deals.
They gave Marty a sales target to hit. The promise was, “Hit this sales number with new accounts and we’ll value the business at an agreed reasonable multiple.” He did the deal. He exceeded the sales target. He sold his shares at a high value. It all worked out. In fact, he is still a part-time salesman for them even while in retirement.
We all get in a jam from time to time. Every entrepreneur I have ever known has found himself and his company in deep trouble. Entrepreneurs want to invest, build, and grow. That’s their nature. But sometimes they get ahead of the market and run out of money. And when this happens, they need help. And the help they need is always ill-timed. The ask comes at a time when they have little to offer.
When this happens to you, here is Marty’s advice.
1. Meet with the decision maker face-to-face. Sit down with them in their office.
2. Explain the situation you are in. This will set your credibility by showing you understand where you are. Be honest and forthright.
3. Take responsibility. Admit the mistake you made that caused this problem. Demonstrate your humility.
4. Outline the potential decisions as you see them.
5. Show the consequences of each decision. Most importantly, humanize these consequences. Show how they will impact peoples’ lives.
6. Make it clear that your fate and the fate of your employees is in their hands.
7. Ask (beg) for your desired decision. This takes even more humility.
In this digital world we live in, we can forget people. Their lives, their families, their dreams, and their futures. Instead, we use words like customer discovery, market potential, cap table, venture capital, valuation, ROI, strategy, forecast, MVP, and others. These terms serve to distance us from what is real and difficult to deal with.
All great opportunities start and end with people.
It is all about relationships!