LBM: What advice do you have for someone starting a business?
CH: “Do what you love where you see an opportunity.”
LBM: How do I recognize opportunity?
CH: “When you go out and about and ask yourself, ‘Why can’t I find somebody who can do this better,’ or ‘Why is it I can’t find one of these,’ you’re on the right track. Whenever you see something you can do better, cheaper or fill a need that’s left unserved in the marketplace, that’s what you go after. If you drive around and see all these retail spaces, one after another, you wonder how any of these people made it. There are a million of these strip centers and a million of these business parks. How does anyone make it? They make it — if they make it — because they’re serving a need that’s gone unmet in the marketplace.”
LBM: What’s the No. 1 mistake new businesses make?
CH: “Growing too fast. Outrunning their cash. A lot of businesses hit a wall about 18 months in. You’re obsessed with your business when you start it. When I started my travel agency I’d go through cycles of anxiety where I’d wake up at like 4:30 or 5:30 in the morning wide-awake and couldn’t go back to sleep; I’d forget what season of the year it was because all I was thinking about was working. At some point, usually late in the first year of your business — if you’ve made it — you start to think, ‘Wow the sky’s the limit. Now, I can do everything.’ And you have a tendency to push the business too hard. I have a very trite phrase I use for small business: ‘Unnatural growth is unnatural.’”
LBM: But isn’t pushing the envelope the path to success?
CH: “I went through that a couple times in my travel agencies, where I was pushing the needle too hard and grew too quickly. Then I had problems digesting that growth. Your service standards suffer, you lose customers, and you’re like, ‘Wait, I have more overhead, and I’m alienating my customers.’ So you have to take a breather, and say, ‘Wait, I need to slow this thing down.’”
Editor’s note: Clark Howard grew a single travel agency into a multimillion dollar business and retired before age 30 when he sold it. His second career as a consumer advocate has been even more profitable. Read more of Gary Corsair’s exclusive interview with Clark in the April edition of Healthy Living at lakehealthyliving.com