Dream Killers: The Real Reasons Small Businesses Fail

By Gregory L. Walz CPA CVA

The premise of this book is that all business ideas begin with a dream. More often than not the dream remains an unfulfilled fantasy that always can find a happy ending.
However, every once in a while the dream becomes so intense that the dreamer decides to make it a reality. When this happens an entrepreneur is born and from that moment on there are numerous pitfalls that will threaten to turn the successful dream into a realistic nightmare.
Most books on the subject of achieving success in small business are presented in a technical manner with specific procedures to follow and take the approach that if an aspiring entrepreneur follows the time proven steps the chances for long-term success with be improved.
Why then do most small business ideas end up in failure?
Using a lifetime of real world hands on experience with hundreds of small businesses this book deals with the real reasons most small businesses fail.
These dream killers are the true causes of a dreams failure. They are mostly personal in nature and as such are generally avoided by how to books, consultants, and traditional advisors that tend to use a cookie cutter approach to every situation.
Blending a lifetime of personal experiences in plain language with non-ambiguous answers to many of the pitfalls to success is intended to provide the reader with the benefits of knowing that there is nothing new in business and all small business is personal. Blending the two will often determine whether a business dream will come true.

• Language: English
• Publisher: AuthorHouse
• Release date: Jul 30, 2014
• ISBN: 9781496926784

Gregory L. Walz CPA CVA

Greg brings a rare combination of practical hands on experience dating back to his early childhood with the family business, formal education with a B.S. in business administration from Indiana University, eight years employment with an international accounting firm reaching the position of audit manager, ownership of real estate, manufacturing, service, and retail businesses, and has been actively involved with small businesses and their owners as the central part of his CPA practice founded in 1977. He has been a presenter for Wayne State University’s “Starting and Running a Profitable Small Business Workshops” and is a “Distinguished Faculty” for Lorman Education Services programs. Unlike the traditional role of the CPA that focuses on recording past history, Greg’s view is that the future is where success or failure is determined. Dating back to his high school days he has always viewed the proper role of the CPA as a “doctor for small business”. He uses his analytical skills to check on the financial health of his client and if it is not completely healthy he prescribes treatments to fix the problems. He believes that there is nothing new in business and the best way to avoid or solve any pitfall on the road to success is to learn from the experience of others. His sense of humor coupled with a dead serious willingness to say what his experience has taught can be both refreshing and shocking in this world of playing it safe and avoiding the tough truths.

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© 2014 Gregory L. Walz, CPA,CVA. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse   07/29/2014

ISBN: 978-1-4969-2679-1 (sc)

ISBN: 978-1-4969-2678-4 (e)

Library of Congress Control Number: 2014912577

Any people depicted in stock imagery provided by Thinkstock are models,

and such images are being used for illustrative purposes only.

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Contents

Introduction

Small Business Is Personal

Dead on Arrival

Consultants — A Waste of Time and Money

Business Knowledge

Partners

Family

Waste

Location, Location, Location

Failing To Measure Up

Selling System

Epilogue

This book is dedicated to the love of

my life, my best friend, my wife

Phyllis

This publication is designed to provide information about the subject matter covered. It is sold with the understanding that while the author is a practicing certified public accountant, neither he, his firm, nor the publisher is engaged by the reader to render legal, accounting, or other professional service. If expert assistance is required by the reader, the services of a competent professional should be sought. The purpose of this book is to educate. Neither the author, his firm, nor the publisher shall have any liability or responsibility to any person or entity with respect to any loss or damage caused, or alleged to be caused, directly or indirectly by the information contained in this book.

Introduction

I know there are thousands of books, studies, and articles in circulation at this very moment dealing in one way or another with the subject of small business and achieving success. The authors have a wide range of education and experience and some have gained worldwide acceptance as experts in the field of small business consultation and problem solving. While I don’t completely accept that old saying Those that can do, those that can’t teach there is no substitute for the school of hard knocks if you can afford the cost in time and money. My purpose is not to prove that I know more than the experts it is simply to convey what I have learned that works and what doesn’t to give the small businessperson the best chance to beat the odds and become successful.

For over fifty years I have studied under some of these experts and read hundreds of books and articles about small business. I have worked for and with hundreds of successful and not so successful entrepreneurs. I have owned and operated retail, manufacturing, real estate, and service businesses. I was as an affiliate presenter of two terrific Wayne State University courses titled Starting a Profitable Small Business and Running a Profitable Small Business where hundreds of my students benefited from learning the answers to the pitfalls that must be overcome to achieve success with their business idea.

Individual life experiences mold and shape our god given talents throughout our lives. Since I am going to be presenting some specific opinions and solutions about how to achieve success in a small business I think it is appropriate that I provide some background information about where I came from and why I feel confident in what is being presented in this book. My personal life experiences provide a point of view from which readers can judge whether or not what I’m saying is worth considering and has any practical applications for their situations.

I was adopted as a baby and my father was one of the millions of post-World War II, white, male, Americans that believed that a business idea and hard work was all that was needed to achieve the American Dream of independent financial success for himself and his family. Although he never attended a day of college, I believe that he had extraordinary business judgment and leadership skills. He was one of those very rare individuals that could walk into a room full of strangers and within a very short time be the center of attention. Like most instinctive business leaders, he seemed to always have a grasp of the present and a clear vision of the future. A physically powerful man he had one fatal weakness that he was unable to control. Had he not become a slave to alcohol that cut his life short at the young age of fifty three I’m certain his story would be included in writings and articles about how to achieve success in small business. I owe my passion for small business and small businesspeople to my father and I miss him very much.

One day at age twelve my parents sat me and my two younger sisters down and told us that they were getting a divorce. In those days this was not a common happening. In fact, as far as I knew I was the only student in my high school classroom from a broken home. As is often the case, especially for an adopted child, I believed that I must somehow prove to my father that he made a big mistake leaving my mother, sisters, and me. To maintain contact with my dad I did everything I could to be around him and show him that I was someone to be proud of. I started working after school sweeping floors in the family owned gas station, towing service and auto body repair shop. Soon I was able to work into the paint shop. It was my first exposure to the basics of success in small business. I watched my father and his three brothers innovate and adapt to the needs of their potential customers with the overall objective of each customer becoming a satisfied customer.

My dad proudly told me that they were the first in the area to use two-way radios to dispatch tow trucks to accidents and that they had become the largest towing service in the area.

The famous radio broadcaster Paul Harvey had a bit that he called The Rest of the Story when he started with a well- known historical event and then provided a surprising and little known piece of background information.

Well, my assumption that is was the introduction of two-way radios in the tow-trucks that was the innovation that made the difference turned out to be somewhat incorrect.

Actually, the first user of two-way radios in vehicles was the South Bend Police Department and of course they would be the first to learn of an accident that required a tow-truck.

Not only were the Walz brothers hard working and innovative they loved having a good time. The answer to getting first chance on almost all accident calls was to put a bar and pool table (that later ended up in uncle Richard’s house) in the basement of the Company’s garage, invite friendly ladies, and allow the police to pull their radio cars inside the building out of sight so they too could have a good time. When the dispatcher radioed an accident call the police would jump into their cars and the Walz tow trucks would be right behind them.

Years later when I was standing in front of the furniture store that was built on the sight of that original towing service and garage an elderly lady was walking by and stopped. She stared at the building for a moment and then asked if I was related to any of the Walz brothers. I said yes my dad was Louis Walz. She smiled slightly and with a little twinkle in her aging eyes she said we sure had some great times in the basement of that old building. And that is the other side of that story.

They were the first to use infrared heat to dry auto paint and for years the only area auto paint shop to offer same day service. Since there was no set standard on how much heat a particular model of car could take they learned by doing. Fortunately, in those days people did not run to a lawyer every time something went wrong. It took a lot of melted steering wheels, warped dash boards, smoking car seats, and cracked glass before they mastered the in by nine out by five $29 paint job. But once they did they painted a whole lot of cars and had many satisfied customers.

They were the first retailer in the Northern Indiana area to use a tent to promote retail sales. One of my fondest memories was loading a couple of empty refrigerator cartons onto the Company stake truck and driving to an area saw mill for a load of wood shavings to spread on the tent floor. Then we stopped by the Planters Peanut Shoppe for several hundred pounds of fresh roasted in the shell peanuts. To this day I still cannot understand why putting almost any retail item in a tent will connect with the public and boost sales. There are certain things that just seem to work and I long ago I stopped trying to understand the magic created by setting up a tent when you have a perfectly fine store.

When the Ringling and the other traveling circuses were touring the country and setting those big tops few could resist the attraction they offered. Today most of those great tents are part of history and the performers and their exotic animals have moved indoors to air conditioned arenas with padded seats. There is only one problem. Almost nobody gets excited about buying a ticket. Even though the concept is still effective, fifty years of lawyers, regulations, and layers of government have done away with the sweet smell of the fresh wood shavings as a fire hazard and the peanuts as dangerous to those that are allergic to them. Today’s customers and young boys working for their dad don’t know what they’ve had taken away by big brother government.

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My dad organized the public to change the blue law that prevented retail sales on Sunday in South Bend, Indiana. He dressed up in clothing worn at the time when the law was enacted, stayed open, and was arrested two Sundays in a row. Of course the South Bend Tribune was on hand and the photos were front page on the local news.

A petition opposing the law was signed by thousands and the publicity for the family business was priceless. Oh, by the way, in case you haven’t noticed it is now legal to shop on Sunday.

The family business started as a gas station on a dirt road and evolved into one of the largest home furnishing and appliance retailers in Northern Indiana. It was always changing to adapt to the business environment and the needs of its customers. This was a lesson that I learned well before I ever attended my first business course.

I also learned the value of media and publicity in stimulating interest in whatever you are attempting to sell. My dad sure did. For example, in the 1960s the number one radio station in our area was WLS 890 out of Chicago and the most popular radio disk jockey was Dick Biondi (later inducted into the Radio Hall of Fame).

One early fall evening just around closing time at the store my dad heard Dick Biondi say that he really wished that he could attend the upcoming Notre Dame football game in South Bend.

My dad picked up the phone and called WLS and asked if he could talk to Mr. Biondi about tickets for the game.

Much to my surprise Mr. Biondi came on the line and it was like two old friends talking. My dad said that he was going to have a pre-game party at his home and if Mr. Biondi could come to the party he and his friends would have as many tickets as they needed.

I knew that our family had about a dozen season tickets. However, most of those were going to be used by family and local friends.

Well sure enough, several hours before kickoff up rolls Dick Biondi along with popular singers Nick Nobel and Tommy Roe along with their wives/girlfriends and a few others.

For a seventeen year old wanting to impress his new girlfriend (later my wife) this was a good as it could get. The Chicago guests passed out a trunk load of autographed hit record albums and a great time was had by all.

With little time to spare everybody piled into their cars and we convoyed to ND Stadium. When we got out of our cars I remember asking my dad if he had enough tickets for everybody (the future CPA in me came out). Without any hesitation he said not yet I need about twenty more tickets. Then he noticed my stunned look because the entire group was about 500 yards from the stadium and moving as we spoke. He smiled and said don’t worry I’ve got it covered.

I will never forget the picture of my dad walking toward that stadium and one by one buying tickets from scalpers without anyone noticing what he was doing.

When we reached the gate he stood there and handed out a ticket to everyone in our group.

The following week the most popular disk jockey on the most popular radio station gave my dad and the family business more favorable publicity than money could have bought.

This was the beginning of my understanding that successful marketing requires a lot more than simply placing an ad or putting up a sign. The potential customer must have a reason to buy from a particular business and image plays a big part in gaining trust and confidence.

The auto painting and body shop obtained a contract with the Bendix Corporation to paint parts for its aircraft brakes and landing gear. I suspect that it was no coincidence that my uncle Woodrow was an engineer at Bendix. Anyway, they had to fabricate a conveyor system to move the parts along and through the paint booth. They used motors from old washing machines and metal lids from five gallon buckets. That opened up many opportunities and created a lot of good jobs.

Even today South Bend has difficulty in attracting new businesses because of its well-deserved reputation as a union town. Companies like Studebaker, Oliver Plow, and Bendix were driven away or out of business by the frequent labor strikes and resultant unrealistic contracts.

As the family business grew and hired more employees the appearance of