“During this recession, a third of your businesses will die, a third will barely survive, and a third will thrive.”
I heard this in an Entrepreneurs’ Organization Portland chapter monthly learning event with keynote speaker Mark Moses of Make Big Happen in 2008 at the beginning of the Great Recession. The room was laser-focused on what he had to say and let out a collective gasp as the reality of the statement hit the 60 business owners in the room.
At the time, the organization was called Young Entrepreneurs’ Organization, and the average age of the group was 33. So most had never experienced a recession — especially one with all your chips on the table.
I raised my hand and asked, “How can I be in the last group?”
I will never forget Mark’s answer.
“I know you all spend most of your time working on your company’s biggest problems,” he said. “That is human, but all you have when you work on a big problem is a slightly less big problem. Instead of spending time doing that, find what is going right in your business. I guarantee you that something is. Find that and spend your time doing more of that.”
So, the critical question was: “What is going right in your business?”
Reality check: Not much was going right
On my drive back to the office, I tried to think of what was going right, and I could not think of a single thing.
The Great Recession was a real-estate-driven recession, and we owned 30 industrial business parks up and down the West Coast that catered to smaller businesses. The small businesses were failing, vacating and not paying rent. We had bought most of them in the last few years to remodel or refresh and then put a new loan on them. This compounded the problem because most had loans that were less than three years old and were all coming due at a time when lenders weren’t lending anymore, and property values were crashing as tenants vacated or quit paying. It was bad. Really bad.
I asked my right-hand person and VP, Kelly Wiebke, if she could think of anything that was going right. She thought about it, jumped up, said “Stand by,” ran to the file room and pulled a file, slapped it down and said, “This is going right!”
In the file were the financials of a self-storage property we owned but had mostly forgotten. She was spot-on: This was going right. The property was gushing cash flow and was 100% occupied with a wait list because of the recession. Prior to that, its cash flowed every month we owned it, and it was never less than 95% occupied.
Pivot toward what is going right
Mark’s idea planted a seed that grew into something beautiful. Kelly and I decided to try buying another storage property and see if it, too, would go right like the first one — to make sure it was not a fluke. The self-storage property we owned was in Denver; we ended up buying two more, one in Boise and one in Phoenix. They performed just like the first one right out of the gates. We also got good deals on these since no one was buying at that time.
That was all we needed to see — we decided to go all-in on storage and sell all our business parks, effectively pivoting the business from investing in one type of real estate to another, higher-performance type of real estate.
We absolutely thrived in self-storage. We built up a new company and brand around it, ending up with 35 properties in six states. While getting there was a lot of work, in the end, our revitalized company was far superior in every way to the former version. Financially, it was more profitable and, from a personal health and stress perspective, far less harrowing: Occupancy rates were much better, plus the income stream was more stable and diversified with over 5,000 tenants instead of 500 business tenants.
Running the company was more fulfilling, too. Unlike the prior version, where property management was contracted to third parties, we actually managed the storage facilities ourselves. We enjoyed the opportunity to get creative with the brand, build a 70-person team and foster a solid company culture around it.
In that company’s final chapter, we chose to sell it when we were offered a price we could not say no to. It was a notable financial success, and since we had pivoted once with success, we decided to do it again. We are currently halfway into a three-year buildup of our third company, which specializes in covered RV and boat storage.
Never underestimate serendipity
Sometimes I marvel about kismet and serendipity: what an amazingly positive chain reaction Mark Moses set off with his question: “What is going right in your business?” — and how lucky that we listened, found the needle in our haystack, and expanded on it. It is the one question that saved our company.
The insight at the origin of this serendipitous process is something I try to instill and advocate for in others. Do me (and yourself!) a favor: Spend less time solving problems and more time finding what is going right and doing more of that. You will be glad you did.
Barry Raber is a serial entrepreneur, president of Carefree RV Storage, a 22-year member of the Entrepreneurs’ Organization (EO), the founder of Business Property Trust, and an EO Portland Entrepreneur of the Year. He shares his successful business secrets at realsimplebusiness.org. Read his previous blog contributions on Implementing A Collaborative Approach to Strategy, 3 Steps That Create a Bigger Future for You and Your Business, How to Run a Company With Two 10-Minute Weekly Meetings and Post-It Notes, and 3 Gratitude Habits For Business Leaders To Motivate Your Team — and Yourself.
This post originally appeared on Oregon Business and is reposted here with permission. Photo courtesy of Wood & Smith.