Being a founder, entrepreneur, or a business owner can have many exciting and thrilling moments. But it is also punctuated with periods of doubt, slump, and anxiety. So how does one successfully and healthily ride the highs and lows of Entrepreneurship? In this series, called “How To Successfully Ride The Emotional Highs & Lows Of Being An Entrepreneur” we are talking to successful entrepreneurs who can share stories from their experience. I had the pleasure of interviewing Patrick Burke.
Patrick Burke is the Managing Partner of Burke & Schindler PLL and Concentric Wealth Management. Passionate about helping entrepreneurs start, grow, manage, and build valuable businesses, he has advised more than 200 successful start-ups, and is an expert across multiple disciplines including mergers and acquisitions, business financing, and deal structuring. He’s on the Board of Directors for SMS Holdings in Nashville and UASI in Cincinnati and maintains Series 7 and Series 66 Securities licenses. He lives in Cincinnati with his wife and is an avid swimmer, cyclist, drummer and grandfather. His new book is The 10 Biggest Business Mistakes And How To Avoid Them. Learn more at www.burkecpa.com.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Istarted my own accounting firm at the ripe old age of 28. I suppose because of all of the exposure to entrepreneurs and their businesses, I was given the opportunity to invest in a couple of companies and to start a few of my own. Perhaps more restless than inspired!
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
My “Aha Moment” was at lunch with my older brother, Michael. I had been working at a CPA firm after law school and wanted to leave to either go to work at his law firm or start my own accounting firm. At that lunch he told me I was a shoddy employee (he actually used a different word I won’t use here) and that I’d be much better on my own since I had a hard time following orders. Clearly, he was correct.
In your opinion, were you a natural born entrepreneur or did you develop that aptitude later on? Can you explain what you mean?
I don’t necessarily think I was a natural born entrepreneur. I do think I was a natural born leader. However, I am not a natural born manager. Those two things often come into conflict. I do think the ability to be an entrepreneur is like becoming a better athlete. The more you practice it, the better you get at it and the more confidence you have in your “game.”
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
My brother was my inspiration, and to a lesser extent, my father. My dad had his own small law practice in Newport, Kentucky. He shared an office with two other lawyers who were not his partners: each person strictly ate what they killed. He died when I was only 14, so I was too young to notice if there were feast and famine years, but I’m sure there were. My brother, Michael, 13 years my senior, took over as my father figure. Michael was already a lawyer and I saw him as the ideal role model. I trusted his judgement absolutely — so off I went.
What do you think makes your company stand out? Can you share a story?
As an accounting and consulting firm, my partner and I not only advise entrepreneurs, we are entrepreneurs — and if I dare say, successful entrepreneurs. We not only understand what the client is going through, we’ve been there. Recently, a client was selling a division of their company and had not decided what to do with the proceeds. I suggested that they consider the reinvestment risk of these funds and plan accordingly. This resulted in the Executive Team and Board doing significant self-examination. The company had been providing security and cleaning services to pubic areas like shopping malls and airports. I suggested, and they agreed, that their sustainable advantage was their ability to find, hire, train, and retain minimum wage employees, and that perhaps these employees could better serve the company’s interest if they worked directly for the company as opposed to being a contractor for, say, an airport. To that end, I suggested quick service restaurants as an alternative investment. After a deep dive by the executives into the QSR Industry, they acquired 85 Wendy’s restaurants on the West Coast — the biggest and best move they ever made.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
Because I’ve had both successful and unsuccessful businesses, I believe I am able to empathize with entrepreneurs far more easily than most consultants. I recently had to have a heart-to-heart discussion with a client about shutting down an unsuccessful business. Since I had dropped the business ball on a couple of occasions myself, I knew it would be tough. But all the money he’d spent on this sinking ship was no reason to continue funding it. Sunk-cost bias is a real thing and must be overcome by entrepreneurs before they move onto the next deal.
I am a committed advocate. I recently had a client in the midst of selling his business and clearly he had visions of his Winnebago and boat and had kind of lost track of the deal. I negotiated hard with the private equity firm that was buying the company to increase their purchase price because of the excess working capital in the company. Through my efforts, he received an extra 15% for the company — likely at least 5 extra feet on his boat and Winnebago. And lastly, I am ethical above all. I know my reputation in the community and the reputation of our firm is that we always do the right thing. That’s known by our clients, banks, law firms, and potential clients.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?
Approximately 20 years ago, I was advised to start a recruitment and outplacement business since I had the extra space in my office. I brought in a Human Resource individual who had spent 20 years at a multinational company — a clear non-entrepreneur. It was a disaster. That person didn’t know how to budget, source, close deals, or manage people. I naively believed I could turn anyone into an entrepreneur if I just told them what to do. Huge mistake.
Which tips would you recommend to your colleagues in your industry to help them create a work culture in which employees thrive and do not “burn out” or get overwhelmed?
Make sure everyone knows what they are responsible for, track it regularly, offer suggestions as to how to improve and have an open-door policy about all of the above. There is someone within every organization that knows how to do every job at the highest level. Feature them regularly at company lunch-and-learns, as a part of the onboarding team, and as a mentor for those that are struggling.
What would you advise other business leaders to do in order to build trust, credibility, and Authority in their industry?
Always under promise and over deliver. It’s the same old story. The only thing you take to your grave is your reputation. As my mother used to say, if you don’t want to see it on the front page of the Cincinnati Enquirer then don’t do it. I can’t tell you how many times this has stopped me from making a mistake.
Can you help articulate why doing that is essential today?
Clearly, we are living in a “gotcha” society, and also an “everybody knows everything” society. So, back to my mother’s advice: everything you do wrong will be public knowledge almost as soon as you do it. Although I believe you should have a moral underpinning for this, even if you don’t, you should have a business underpinning for this. Bad reputations are pretty much forever.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
The most common mistake that business owners make is to buy or start businesses where they don’t add any particular value.
For example, just because you enjoy dining out doesn’t mean you are going to be a great restaurant owner. Similarly, just because you are good at something doesn’t mean that you can run a business around that skill. Most of us have read The E-Myth, and it’s true. Perhaps there should be a business, but someone else should run it for you.
Ok fantastic. Thank you for those excellent insights, Let’s now shift to the main focus of our interview about How to Successfully Ride The Emotional Highs & Lows Of Being An Entrepreneur. The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. This might be intuitive, but I think it will be very useful to specifically articulate it. Can you describe to our readers why no matter how successful you are as an entrepreneur, you will always have fairly dramatic highs and lows? Particularly, can you help explain why this is different from someone with a “regular job”?
One of the basic requirements of owning your own business is the ability to live with uncertainty. Generally, there is tremendous euphoria around starting a business. Inevitably there will be a lost client, an employee who leaves and competes, or a lost bid. The highs can be very high and the lows can be very low. And financial security or insecurity must be dealt with constantly until you’ve reached the stage where you are “playing with the house’s money.” But I find that most entrepreneurs’ tolerance for risk is the same before and after they’ve reached their ultimate financial goal.
By contrast, someone who has just received a promotion, a raise, additional contributions to their 401(k) plan, and access to stock options pretty much can see their future quite clearly. Absent a big reversal in stock price, they know where they’ll be at their retirement. To some, this is a dream come true. To an entrepreneur this is a prison sentence. I recently had a conversation with a CEO who had been displaced and was in the process of determining whether he was going to buy a business or move on to a new opportunity in a new C-suite. He admitted to me that although he had significant financial assets, the idea of losing them was something he just could not tolerate. At 50, it didn’t make sense for him to begin a business life as an entrepreneur, particularly, a reluctant one, when it just wasn’t in his DNA.
Do you feel comfortable sharing a story from your own experience about how you felt unusually high and excited as a result of your business? We would love to hear it.
Shortly after I started my business, I got a referral from one of my brother’s partners at a large law firm. It was to an entrepreneur who had recently purchased a business and was unhappy with the advice he was receiving from his then-CPA. I went to his office, and he showed me his purchase documents and the tax planning by that accountant. Immediately, I was able to improve on the plan and give him ideas on structuring things to be much more advantageous from both a tax and a business standpoint. It was a multimillion-dollar company I knew had significant tax and accounting needs. I was hired on the spot. This company proved to be my entrée into a much bigger world of not only larger companies, but also dealing with banks and private equity on M&A transactions.
Do you feel comfortable sharing a story from your own experience about how you felt unusually low, and vulnerable as a result of your business? We would love to hear it.
I believe every entrepreneur has those moments when they feel completely alone. While everyone else is working in the business, you have to step back and work on the business. While the constituent parts may appear to be working well, as an entrepreneur, you can see the trouble brewing around the corner. Additionally, you know the only way to negotiate the hairpin is with you at the wheel. The fact that you know only you can do it is both a blessing and a curse. Early in my career, I had a partner that left abruptly, taking several clients with her and creating a severe operational and financial crisis. Who had to fix this? Me.
Based on your experience can you tell us what you did to bounce back?
I bounced back by circling the wagons, calling on clients that had been closer to her than me, and rallying the remaining employees. I assured them that their compensation wouldn’t change, there would be plenty of work to do, and the future was still bright.
Ok super. Here is the main question of our interview. What are your “Five Things You Need To Successfully Ride The Emotional Highs & Lows Of Being An Entrepreneur”? Please share a story or an example for each.
- Learn to live with uncertainty. Unfortunately, when you are running your own business, particularly in the beginning, a good month or even a good year may not predict what will happen next. Back in 1990, I formed a group of people to buy a medical consulting company. Their biggest client was the Cleveland Clinic, and a few key employees controlled that account. Within two months of buying the company, those employees left — as did the Cleveland Clinic. The remaining management team and ownership group were convinced that the company had a good product, and we persisted. That company is currently 30 times the original size and still growing.
- Continue to work on leadership skills. Your employees need to realize you care about them as people. They won’t be thinking of ways to improve your company’s performance if they don’t believe you are doing your part to improve their lives.
- Stay competitive — not only for your products, but you personally. If you lose your edge, employees will lose their edge, and the company will lose its edge. Meanwhile, your competitors will sense a weakness and pounce.
- To position your business to be a highly profitable entity that sells its products and services on value and not price, continuous selling is required. It’s best if you can carry part of this burden yourself. If you know that is not your strong suit, hire top-shelf marketing and salespeople to do it.
- Listen to your customers. They are your best indication of how your current products and services are performing in the marketplace and which ones you need to add to not just stay competitive but to lead. Believe me, nothing is worse than to find out that your competitor is offering a product or service you should have thought about and offered long before they did.
We are living during challenging times and resilience is critical during times like these. How would you define resilience? What do you believe are the characteristics or traits of resilient people?
Resilience is just another way of saying “high risk tolerance.” If company owners allow everyday highs and lows to influence their mood, or how others in the company and their clients perceive them, they will be constantly worrying about protecting what they have. This significantly diminishes their ability to bounce back.
Did you have any experiences growing up that have contributed to building your resiliency? Would you mind sharing a story?
Twenty or so years ago, my brother and I invested in a rent-to-own business. We violated our own rule about getting into something about which we knew little and further added no additional value. Inevitably, it failed. As the ship was sinking, my brother died (not due to the business sinking), which highlighted the need for additional capital. But that would have been throwing money into a black hole. Rather than pout and go into poor pitiful me syndrome, I fired the CEO, shut down the stores, paid off the creditors and moved on. Maintaining a positive attitude is one of the primary characteristics of successful entrepreneurs. In the book, Six Hats of Thinking, yellow hat thinkers are the optimists. Most entrepreneurs are clearly yellow hat thinkers. If you’ve got confidence in your ability to make more right decisions than wrong ones and avoid the big mistakes, you’ll always come out on top.
In your opinion, do you tend to keep a positive attitude during difficult situations? What helps you to do so?
As an advisor to over 250 businesses, I’ve seen what works and what doesn’t. I understand that what is happening today is rarely what will happen tomorrow, and what happens tomorrow is largely dependent on your attitude. This past year, a client of mine — a provider of consulting services to the health care industry — experienced a significant downturn due to Covid. Due to access to PPP funds, the CEO and CFO didn’t panic, but did see a long-term downturn. I pointed out to the management team that healthcare, unlike some other businesses, must come back. Most treatments cancelled during Covid were deferred, not lost. Sure enough, business has bounced back to nearly pre-pandemic levels.
Can you help articulate why a leader’s positive attitude can have a positive impact both on their clients and their team? Please share a story or example if you can.
My favorite quote is by Johann Wolfgang von Goethe: “Dream no small dreams, for they have no power to move the hearts of men.” I first saw it on the wall of a successful local real estate developer, who told me he referred to those words on almost every decision he’s made. Sometimes to his detriment, but overall it fueled his success.
Ok. Super. We are nearly done. What is your favorite inspirational quote that motivates you to pursue greatness? Can you share a story about how it was relevant to you in your own life?
Twenty years ago, a 20,000-square-foot former firehouse was for sale in downtown Cincinnati. I’d always admired the building, with its triangular shape and river views. It was a big step, but I bought the building. With my wife Mary Jo helping, I did the adaptive reuse and turned it into an office building. It completely changed my firm’s image, allowing for growth and incubation of clients that needed some startup space.