The Fail-Proof Enterprise: A Success Model for Entrepreneurs - Hardcover

Thomas, Bob

Hardcover

ISBN 10: 0916308510 ISBN 13: 9780916308513

Publisher: Hillsdale College Press/IHC Books, 2003

Synopsis

This "how-to book for entrepreneurs guides readers through the minefield of getting into business and remaining in business with very little money. With an entertaining, case-study approach, the book discusses funding, organization, sales, marketing, management, partnership compatibility, merchandising, control, lawsuits, patents, and selling out or going public at the proper time. Demonstrates how the "Ten Essentials of the Fail-Proof Enterprise" actually work in the real world and why.

About this title

About the Author

Bob Thomas was raised and educated in California. Following military service in WWII, where he was a U.S. Army Air Corps aviation cadet, he returned to school, graduating from UCLA.

After working for six years as an aircraft engineer in the fledgling aerospace industry, he entered the field of high-tech sales, selling specialized technical products to the aerospace industry, eventually becoming a sales and marketing manager.

Seven years later, he co-founded UNI-LOC, the high-tech company about which The Fail-Proof Enterprise is written, becoming its first president and CEO. It is now a division of Emerson Process (formerly Emerson Electric), a Fortune 500 company. A few years after selling UNI-LOC, he co-founded TBI, another high-tech company similar to UNI-LOC. He was TBI's first president and CEO. TBI was sold to Bailey Controls-McDermott, another Fortune 500 company; it is now part of the Swiss conglomerate ABB.

After moving to Carson City, Nevada, Thomas founded Comstock Aviation. He was appointed to the state welfare board and to the employee management relations board and served four years. He was elected to the Carson City School Board, and then to the Nevada State Legislature, serving three terms. He also founded the Carson City Airport Authority and is currently serving his second term as chairman.

Investor's Business Daily, November 24, 2003
Bob Thomas loves to ask dumb questions.

"If you can't understand what someone's saying, don't let it slide," said Thomas, a lifelong entrepreneur based in Carson City, Nev., who has built three successful high-tech companies. "Resist the temptation to gloss over it."

Thomas, author of "The Fail-Proof Enterprise," prizes precise communication. He believes that persuasive leaders don't need charm and charisma, but they must speak clearly.

He recalls watching a salesman at work. When a customer asked, "What's the storage capacity on this computer?," the salesman replied, "More than you'll ever need!"

"He was evading the question," Thomas says. "He should've replied, 'I don't know, but I'll find out.' And if he did know, he should've given a specific answer."

An avid reader, Thomas seeks to enrich his vocabulary. He constantly looks up words he doesn't know and puts them to good use.

"You don't want to be the kind of person who's able to discuss your narrow area of technical expertise but who's dead in the water if you find yourself talking about matters outside your field," he said. "Someone with an abnormally low vocabulary tends to struggle" when communicating with nontechies.

Thomas has managed technicians for much of his career. When they misuse a word, he likes to say, "There's a little problem I want to let you know about. Nothing serious. But I want you to be aware of it now so you don't embarrass yourself later."

Thomas said, "I find almost everyone appreciates being made aware of how they can communicate better. Do it gently, without blowing it out of proportion, and they'll view it as supportive coaching and they'll take it to heart."

If an employee uses technical jargon, Thomas might ask the person to "restate that in plain English." He also likes to respond: "Let me translate what you just said."

"Do that enough times and people figure out that they need to speak clearly with you," he said. "They'll realize they can't hide behind their low vocabulary."

To earn employees' trust, Thomas adopted the habit of spending every Monday morning circulating through the workplace. He'd spend 10-15 minutes chatting one-on-one with workers.

"I'd ask something like 'How's the family?' and let it go from there," he said. "In a low-key, nonthreatening way, I listened, whether they wanted to talk about their family, sports or whatever else. Dignify people as individuals, and they'll be more willing to follow your lead." Reprinted with permission from Investor's Business Daily®. $235/year.

From the Back Cover

Thomas's First Law Of Business Reality: "If an enterprise continues to grow, at some point it will either become a bureaucracy, or will be acquired by a bureaucracy." That marks the end of the entrepreneurial enterprise-and its many advantages. Delaying this inevitability, while maintaining efficient management control, calls for a special organizational structure.

Before You Start Your Business, Ask Yourself These Key Questions: Do you know-
if you are a prime-moving entrepreneur who should manage your own business? how to fund a venture with little money and without selling stock or borrowing? how to select partners and managers to assure compatibility? how to achieve total commitment from your partners and managers? how to comparatively value the tasks performed by your partners and managers? how to identify new markets and develop a plan to penetrate those markets? how to maximize employee performance, longevity, and loyalty? the differences between sales and marketing and how to use both? how to structure a company to take full advantage of the advantages of entrepreneurship? how to strategically use and protect your intellectual property? how to protect the value of the stock you acquire should you sell your company?

The Fail-Proof Enterprise Will Help You Answer These Questions-And Many More.

Excerpt. © Reprinted by permission. All rights reserved.

From Introduction: Getting into business for one's self is easy. Remaining in business as a thriving enterprise is another matter.

Most people have never had the chance to study the inner workings of a new business from start-up through the many phases that lead to a highly successful entrepreneurial enterprise. Even Lee Iacocca, perhaps the greatest automobile salesman of all time, and Jack Welch, ex-CEO of General Electric, were both born with aces back-to-back at Ford and GE. They had big budgets of company money to work with. But has either one ever started a business from scratch? No.

We entrepreneurs are the backbone of the capitalist system.

This book was not written by an observer of other people's successes. I drew heavily on my own sales, marketing, and management experiences in order to show you the evolution of thinking that led to the creation of UNI-LOC, the fail-proof enterprise. I developed and utilized the organizational structure and management practices described here in the formation and operation of UNI-LOC and another very successful high-tech company, TBI (Thomas-Barben Instruments). These were highly profitable entrepreneurial enterprises; now one is a division of a Fortune 500 company, Emerson Electric, and the other a division of the international Swiss conglomerate ABB. Because TBI was a clone of UNI-LOC, structurally and financially, this book will concentrate on UNI-LOC, which was perhaps the first enterprise of its kind to be owned, organized, and operated in this fail-proof way.

This is a "how-to"-and a "how not-to"-book for entrepreneurs. With an entertaining, case-study approach, it discusses funding, organization, sales, marketing, management, partnership compatibility, merchandising, control, lawsuits, patents, and selling out or going public at the proper time. And it shows you how my "Ten Essentials of the Fail-Proof Enterprise" actually work in the real world and why. It will guide you through the minefield of getting into business and, more important, successfully remaining in business with very little money.

What this book is not is some rah-rah motivational gimmick intended to fire you up to hunt lions with a fly swatter! Properly put to work in a new-or even an older-business, the fresh, creative ideas contained herein will prove priceless. This book is based on sound principles. It respects the basics of business, which, like the laws of physics, cannot be abridged or dismissed if maximum positive results are to be achieved. It will help minimize the luck factor when establishing and building a business, saving luck for those times when even the best prepared end up needing some.

I have assumed that prior to reading this book you have already decided what products or services your company will offer. I also anticipated that what you expect to find here is a method of organizing your enterprise to make it as fail-proof as possible with minimum financial risk. This book will do that.

First we show what it takes to be a genuine entrepreneur. Because sales is the single most important function of any business, we explore one of the highest levels of professional sales, and present a treatise on marketing. Then we investigate real marketing in its purest form, not to be confused with merchandising or computer "what if" games.

That is followed by advice on funding your new enterprise with very little money and without selling stock, without borrowing, and without accepting venture capital. Product development is thoroughly examined. This segment includes the story of some unexpected setbacks we encountered-inevitable in an entrepreneurial venture-that almost put us out of business shortly after we started, and what we did to overcome those roadblocks. Market identification and the methods used to penetrate that market once we defined it are detailed.

Then comes an in-depth analysis of the relative values of partnership skill contributions, which determines the number of company shares allocated to each partner.

Next I outline the most efficient entrepreneurial management structure, the one that will assure and protect your entrepreneur status for the longest possible time. We will look at the best way to assure partnership compatibility, while enhancing the success of your future middle managers before you give them management responsibilities.

Following that is an analysis of the strategies we employed to move our huge competitors aside and take over the undisputed leadership of our major market. Finally, we weigh the advantages of going public against those of being acquired. Should you elect to be acquired, we discuss how to protect the value of your newly acquired stock.

While the fundamentals of organization outlined in this book apply to any business-beginning or established-they are primarily aimed at what I call the entrepreneurial envelope-enterprises with 20 to 200 employees. Why? Because depending on the kind of business we are talking about and the number of partners in active management, somewhere within that 20- to 200-employee envelope lurk the physical and mental limits that determine when the owners can no longer maintain personal control of their beloved enterprise. That is the time when they must succumb to that horror of horrors-the bureaucracy.

If an enterprise continues to grow, at some point it will surely become a bureaucracy or will be acquired by one-Thomas's First Law of Entrepreneurial Reality. This occurs when entrepreneurs can no longer properly perform all of the sensitive tasks themselves. Beside building a company that is monetarily successful, the next most important objective is to retain your entrepreneurial status for as long as possible in the interests of agility and efficiency-competitive advantage. This runs contrary to the views of many management consultants who call for building the bureaucratic management pyramid prematurely. But remaining an entrepreneurial enterprise without losing control requires special organization. An analysis of that organizational structure is a fundamental part of this book.

I was involved in one of the most exciting, perplexing, unpredictable, and rewarding business adventures any entrepreneur could hope for. And we had some fun along the way.

I wish the same for you.

Edition details

• Publisher: Hillsdale College Press/IHC Books
• Publication date: 2003
• Language: English
• ISBN 10: 0916308510
• ISBN 13: 9780916308513
• Binding: Hardcover
• Number of pages: 268