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.