For someone who has reached a level of success most could only dream of, Bob Schlegel has experienced his fair share of ups and downs.
Schlegel, a member of the SMU Cox School of Business Executive Board for 23 years, has felt the effects of recessions, had brushes with severe personal injury and been on the brink of life-changing business deals just to see them fall through. The highs have been high, too — he’s built and sold multiple enormous businesses in different industries.
Over the last four decades, Schlegel has accumulated plenty of entrepreneurial wisdom throughout these ups and downs. Now, he is sharing what he’s learned along his journey in his new book, “Angels and Entrepreneurs: A Lifestyle Formula for Starting Your Own Business and Riding the Rollercoaster of Entrepreneurship.”
Here are five lessons drawn from Schlegel’s own rollercoaster ride to success.
1. Find Your Angels
When Schlegel was just five years old, he broke his neck while working on his family’s farm in Canada. He started grade school in a body cast. A year later, he was attacked by Great Danes before being rescued by his brother, who pulled them off. Two years later, the house burned down. Big brother was there again to drag Schlegel out. “Just goofy little things like that,” he says, “where I needed an angel to get me through.”
His brother may have been the first “angel” watching over Schlegel, but he wouldn’t be the last. Schlegel attributes much of his path to the intervention of these figures who happen to come along at the right time. These angels, as Schlegel views them, inspired the title of his book. He says they’ve been present throughout his life, guiding him through not just close calls in childhood but also near-catastrophes in business.
The moments when one might need an “angel” are not always so life-threatening, of course. Schlegel says sometimes the most challenging part of being an entrepreneur is maintaining consistency throughout the day-in and day-out slog. Having people around you to remind you why you’re doing it is key, be it a spouse, your team or even your customers.
“You need people who will keep you motivated and give you the purpose, partnerships and the passion to really keep going, to get up in the morning and jump out of bed and get at it,” Schlegel says.
2. Start Out With Pep
Schlegel’s career began as a CPA. He’d taken inspiration from the accountant who would come by to do his dad’s taxes when he was a kid, always in an impressive car and dressed to the nines. But eventually, entrepreneurship came calling. “In public accounting and public banking, you see all kinds of enterprises and what makes them successful,” he says. Schlegel decided to try out a few of his own ideas.
Schlegel has an acronym that can sum up his core entrepreneurial belief system — “PEP.” The letters represent persistence, education and entrepreneurship, and a trifecta of passion, purpose and partnership. “Your customers are really your partners,” he says. “If you have a product or service they need or want, and they’re willing to pay you for it, it’s a win-win.”
His first venture was a company he and his wife, Myrna, started named PeopleCare Heritage Centers, a chain of nursing and retirement centers that grew to encompass 2,200 guest suites and 2,000 employees. After 15 years in the business, the Schlegels sold PeopleCare to Horizon Healthcare Corp. for $62 million in 1994.
But as the nature of entrepreneurial endeavors goes, it’s not always a multimillion-dollar success story.
3. Prepare to Fail
Schlegel’s biggest professional challenge came in 2007, when his concrete paver business, Pavestone Company, went under contract to be acquired by a chief competitor in the space, Oldcastle Architecturals. It felt like a perfect match. Pavestone’s largest customers were Home Depot and Wal-Mart; Oldcastle’s were K-Mart and Lowe’s. Yet, considering most paver products sold directly to small building manufacturers and the two companies together made up just 15% of the market, Schlegel felt that regulators would look favorably upon the $540 million deal.
“We’re making concrete blocks,” Schlegel says. “We thought that was a pretty generic thing, and they wouldn’t have a problem with it.” But the Federal Trade Commission sued to stop the merger, arguing that it would “reduce competition in the manufacture and sale of dry cast concrete hardscapes to national home centers in nearly 300 metropolitan areas,” in the U.S. The deal was killed in January 2009.
If you’re sniffing another acronym, you’re right on. Schlegel has a ready acronym for failure — FAIL, or first attempt in learning. But it hasn’t always been easy to maintain perspective and understand the difficulties of learning opportunities while they were happening. “You don’t have to be smarter than your competition,” Schlegel says. “You just have to be more persistent. I think persistence is the most important attribute an entrepreneur can have, to just keep working at it. Because you’re going to fail a lot.”
4. Persistence Pays Off
Having put up $20 million in legal fees and with the market crumbling around it, Pavestone busted on various EBITDA — earnings before interest, taxes, depreciation and amortization (used as an indicator of the overall profitability of a business) — and cash flow coverages, narrowly avoiding bankruptcy. “We did everything we could to avoid that, and we did avoid it,” he says. “But it got real messy.” The episode tested Schlegel’s persistence, but he would pull through, finding his buyer three years later.
He sold the company and its 22 U.S. manufacturing plants to Quickrete, an Atlanta-based packaged concrete maker. “They were really another angel that showed up with perfect timing and at the right point in our business’s history,” Schlegel says. He held onto one sliver of the business, a division named Bedrock Freight Logistics that he spun off and still runs today.
5. Pay It Forward
Schlegel has passed along his nose for entrepreneurship to his four children, who are engaged in ventures spanning from social media marketing to sports franchise ownership. With his book, he hopes to spread his message more broadly to existing entrepreneurs and to those thinking about spurning the 9-to-5 world to start their own thing.
“The greatest compliment I get is when somebody has read it and sends me a note and says, you know, I was so inspired that I bought one for all my grandkids,” he says. “I’d like people to realize there are options to be your own person and make your own decisions in life — and to be really successful at it.”
“Angels and Entrepreneurs” is out now and available on Amazon.