Be patient and wait for success to arrive; do what is necessary to win

Editor’s note: Mal Mixon, former chairman of Invacare Corporation and a well-known entrepreneur, will regularly share his business advice and experience with Smart Business readers. Ask him a question at [email protected] and your inquiry could be the inspiration for his next column.

Q: You write in “An American Journey” about the opportunities you took advantage of. What if you were graduating now with your master’s degree in business administration? What trends do you see?

A: I’ve been on the Harvard Business School advisory board the last few years, and today’s graduates want to work on Wall Street where starting salaries are phenomenal — much higher than industry. Fewer graduates want to work for a company. One of my classmates runs a huge company and says he doesn’t even recruit at Harvard Business School anymore because he can’t compete with Wall Street.

I think if you go into business, you start at a certain level and work your way up. A lot of the graduates today want success a little too fast. But there is not much I would change about my life. Every job I took I tried to be the best I could be, I learned and then I got promoted. I performed, but had to strike out on my own to be a CEO.

I was good at sales and marketing, and my superiors did not want to take me out of it. If I had to do it all over again, I\ wouldn’t do anything differently.

Q: I am in sort of the same situation you were in at 36 years old. I have a family business. I look for companies to buy that I think would add value, too. It’s a very difficult environment. I don’t have a lot of money. What sort of advice would you give me if I were to try to do what you did today?

A: A lot of people say they want to buy a company, but I am not sure they want to do the things necessary to complete a transition. It’s more difficult today; there is more competition. You have to let lawyers and accountants know and talk to everybody you see. I would say it generally takes a year, unless you are lucky, to find an opportunity.

Here’s a story I’d like to tell you: I once bought a company with zero money. I was walking my dog on a Sunday afternoon, and I ran into my lawyer friend Bob Gudbranson. He told me about a deal, I later put together a finance package and received a spectacular return.

It looked like I was required to invest $3.3 million. I was able to do a sales-leaseback for $2 million on the property. Secondly, $1.5 million in receivables (from highly reputable companies) could be purchased for $1 million. So I borrowed $1 million secured by the receivables. I paid back the loan, took the profit on the receivables after tax and invested it in the company.

You never know from where your next deal will come. Just be on the lookout and let people know you are seeking an opportunity. Also think about putting your investment group together. If you find an opportunity, you’ve got to be able to put it all together financially.

A complete story of his Mal Mixon’s rise from rags to riches is told in his book An American Journey, published by Smart Business. It can be found at www.anamericanjourney.com and on Amazon.com

Keep new products in the pipeline and ‘bearding the lion’ — making the difficult sell

Editor’s note: Mal Mixon, former chairman of Invacare Corporation and a well-known entrepreneur, will regularly share his business advice and experience with Smart Business readers. Ask him a question at [email protected] and your query could be the inspiration for his next column.

Q: I’d like to know your thoughts on the role R&D plays. What is a realistic percentage to spend on R&D? Is there a rule of thumb?

A: There’s no rule of thumb but a lot of the best medically oriented companies will spend around 10 percent. Even 12 percent in some cases is not exceedingly high.

I read an article once about the problems of sustaining R&D. When you are a CEO, frequently the new products you launch were developed with money spent by previous CEOs — because of the timeframe it takes to bring new products to market.

So you are enjoying your previous predecessor’s work. It is easy for the current CEO to cut R&D because these are longer-term dollars. If you are looking for immediate results, cut out your R&D, and it will just increase the profits by, say, 10 percent pretax. But in the long run, it will slow down new product development, and the company probably wouldn’t have the leadership later it enjoys today.

But you always want to offer something new. It generates excitement. As soon as Invacare introduced a new product, we started the design of the next model because everything can be improved. I don’t believe in the old saying that ‘If it ain’t broke, don’t fix it.’ It can be better, lighter, lower-cost, have better functionality and appearance.

When you are developing products, you really want to find the sweet spot where there is the greatest demand for the product. Sometimes an engineer will design a product that is so complicated no one will buy it. Other times the marketing department wants so many features on it that it is too expensive. So you’ve got to get both of them working together and find out what does the customer really want. You think people may pay for this feature but they may not want it.

But the essential thing is that you do have new products in the pipeline and that you do replace products.

Q: You’ve probably seen all types of sales people in your career, and I understand you started your entrepreneurship journey in sales. What’s your advice to achieve successful sales?

A: I was always delighted personally in using my ability to get an order where no one else was able to get one. It’s called ‘bearding the lion in his den’ — in the broad sense, confronting someone on his or her territory … you cut the lion’s beard off without it eating you alive.

You have to be persuasive, and you have to have good reasons for the person to buy from you. You need to be prepared for the call and deal with the reality of the situation. It may be that the person is basing his or her purchasing decisions on wrong information, as is frequently the case.

A lot of people would fear going into a messy situation or calling on a competitive account. But by taking that step, you stimulate your sales organization: if Mal can do that, I think I will try it.

Mal Mixon is the former chairman of Invacare Corporation. A complete story of Mal’s rags-to-riches journey is told in his book, “An American Journey,” published by Smart Business. It can be found at www.anamericanourneybook.com and on Amazon.com.

 

 

 

 

 

 

In sports, academics, business and life, victory counts

Once when my son was playing Little League Baseball, I overheard the coach telling the kids, “Just have a good time. It doesn’t matter if you win or lose.” At this point, I interrupted the coach and said, “Wait a minute. I do not want you to teach my child that it is OK to lose. I want you to teach him how to win! Americans do not like to lose. They like to win. It’s much more fun to be a winner and not a loser.” That’s in sports, academics, business and in life.

At this point, my wife grabbed my arm and pulled me away. She was embarrassed.

The message resonates

Years went by, and I thought the matter was long forgotten. During my son’s senior year in high school, he was required to give a senior speech. I was very proud to attend and hear his talk. Somewhere in his address, he brought up the story. He said, “Back in Little League, my father said I should learn to be a winner — that I do not want to be a loser. That comment has stayed with me from that day forward. I want to be a winner in life.”

This lesson in life has always been important to me from my earliest days. I wanted to be the best I could at whatever I undertook. I didn’t always win, but I always tried to win. In sports, I gave my all to the team. In academics, I wanted to please my parents. In music, I wanted to be first chair trumpet in the band.

When the opportunity arose for me to attend Harvard College, I wondered if I could compete with prep school city boys, and at the same time, I was invigorated but also challenged. I figured the worst thing that could happen to me was I would end up in a small Oklahoma state college. I decided to attend Harvard.

Give it your all

I gave it my all — night and day. I didn’t even have a date for six months. My classmates were talking about subjects I knew nothing about. Everyone had a better secondary education that I did. In a way, I was scared, but I persevered and made it. In my mind, I was intense.

When I look back over my life, the desire to win has never left me. Clearly, the desire followed into my business life, especially at Invacare. I was able to transfer this “desire to win” to my associates. We rose from an obsolete wheelchair company to the world leader in home health care equipment.

The important lessons to be learned here are never be afraid to try something new and always play to win. I have always said, “Show me a good loser, and I will show you a loser.”

How we are a collection of life’s experiences, so live fully!

When I look back over my life, I often wonder how I ended up becoming an entrepreneur in Northeast Ohio, and that makes me think we are the sum of life’s experiences. I was raised a country boy in a small Oklahoma town. My parents were intelligent, but neither were college graduates.

Looking back, I think I learned that I was competitive and, more importantly, ended up with a lot of common sense. But I learned nothing about business. My father sent in a college application for me to Harvard, I had no ambition to go there, but somehow I was accepted. What a change in my life!

Competition was a lesson

In college — I barely took a book home in high school — I suddenly found out I had to study. Bright students surrounded me and all had a better secondary education than I. Through that four-year experience, the most important thing that happened to me was that I learned that I could compete with the best and brightest students.

My family was very patriotic, and I was raised with a sense of responsibility to our country. I was more proud to have my mother pin on my Marine Corps second lieutenant bars than I graduated from Harvard.

When I look back on my four years in the Marines, including a year in Vietnam, I have asked myself, “What did I learn?” For the first time, I had management responsibility — to lead under stress and pressure — to be responsible for other people’s lives. But I still knew nothing about business. From the jungle of Vietnam, I submitted an application to Harvard Business School and was accepted. I departed Vietnam and became a bank teller in Boston for the summer.

Getting business experience

I learned about business at Harvard Business School, but it was all theory. I had no business experience. So naturally, I took my first job. Why Cleveland? Because I married a gal from Cleveland, and thought that would make her happy.

For 11 years I worked for several companies before I did my first leveraged buy-out with a company called Invacare. It had taken me a while to learn that I did not like to work for someone else, and more importantly, I did not like to make money for someone else when it did not include me. I decided I wanted to have something of my own where I would be rewarded if I succeeded.

But I had learned a lot in those 11 years. Most of all, I developed the confidence that I could run a company. I learned a tremendous amount about sales and marketing, and developed a customer focus, which has served me well over my career.

During this experience, I learned that I am an inveterate entrepreneur. I have purchased more than 50 companies that are now part of Invacare, and I have made more than 50 investments outside Invacare.

I’m 74, but still looking for my next deal. Like I said, we are a sum of our experiences.

Entrepreneur Mal Mixon joins CSU president at Fireside Chat Wednesday

Mal-on-Mountain--smallCLEVELAND, Tue April 9, 2013 — Mal Mixon, chairman of the Invacare Corporation, will join Cleveland State University President Ronald Berkman for a Fireside Chat as part of the President’s Lecture Series to discuss his newly released book, “An American Journey.” The event will be from 5 to 6 p.m. Wednesday, April 10, at Drinko Recital Hall in the Music and Communication Building, 2001 Euclid Ave., Cleveland.

In “An American Journey,” Mixon discusses his life’s experiences and how they built his character and business know-how. An added bonus in the book are his 18 Life Lessons, which have been called “a virtual playbook on how to win in life and business.” The book was published by the Book Development Group of Smart Business in Westlake, Ohio.

Mixon has led Invacare since 1979 when he and a group of Cleveland-based investors bought the firm from then-parent Johnson & Johnson. A graduate of Leadership Cleveland, he is chairman emeritus of the board of directors and board of trustees of the Cleveland Clinic and chairman of the board of trustees of the Cleveland Institute of Music. He is highly regarded in the Cleveland business community and has been recognized nationally for his entrepreneurial skills and leadership. He received his BA and MBA from Harvard and served four years in the U.S. Marine Corps prior to entering the business world.

A reception will follow immediately. Mixon will sign copies of the book which will be on sale. The event is open to the public.