The Mission to Improve Business Survival Rates

The Mission to Improve Business Survival Rates

Announcer: You are listening to the Mastering Business Basics podcast, where we discuss how to build a solid foundation under your small business to improve your chances of success. And now, here is your host, Roger Pearson. 

Roger: We have a special guest today by the name of Peter Bergeron, he's had quite a career. He's a lot like me. Over the last 50 years, he's worked in a lot of different businesses and learned a lot of things the hard way, and now he's made it his mission to teach other small business people what they need to know to succeed. I'd like you to welcome to the show, Peter. 

Peter S. Bergeron: Thank you for having me, Roger. Greatly appreciate the opportunity to be here. 

Roger: Could you give us a little bit about your background and where you got to where you are today? 

Peter S. Bergeron: Yeah. So I put it as my life has been in and around small business from as far as I would call my living memories. It started when I was four years old and my dad started his company, uh, his small business. I grew up inside of it. Being an only child, I would say that I would consider that the closest thing to a sibling, is how I would describe it. 

And so I come at the world from that point of view of a family that is attached to a small business and a life, like I said, that was dedicated around it. It was something we talked about at the dinner table. It competed on weekends for time. It was the blemish on my employment career or my employment record. 

It was the only job I was ever fired from when Dad via Mom decided that at 14 it was probably time for me to start getting some experiences outside the family business. And by that point, my mother had also moved on from that. That became just still what I got pulled back to, which was other small businesses. 

When I left there, I went and worked at a gas station. From after college, I went and worked with a family business in financial services. Eventually, a job shop with another family business, a distribution company for a second-generation leader, and then eventually, uh, back to working for my dad at age 29. By 2017, we were looking to see about doing a generational transfer, realized that wasn't going to work, shifted to the idea of a sale in 2018. 

We were in the midst of our dog and pony shows, as I would call them, bringing around the different prospective buyers. And May of 2019, unfortunately, my dad passes away unexpectedly, and that's when everything we had discovered in 2017 about the generational transfer not holding just continued to expedite down. 

And so by January 13th of 2020, I was closing the doors. That led to a different set of experiences between then and March 31st. All of that eventually led me back to school, all those experiences, did fire sale the business, the product line, liquidated assets, all of those things in that short period of time. 

And eventually, as I said, worked my way back to pursuit of my doctorate, which I'm supposed to be finishing if I ever get to actually writing my dissertation rather than writing a book. But I went the book route for a little while because that was a little more fun. Just based on all those experiences and the book, the-- what I do now, what I think about now is about that, not as much the product side, but the business of running a small business, that back end, that piece below the gross profit that is more similar than we really give credit to for every small business, and that's what I focus on now. 

Roger: The fundamentals of building a business. And that's really what's lacking in our education system in this country nowadays, is teaching the fundamentals. They're so focused on the fun stuff and the flashy stuff and, what people need is just the real fundamental stuff. - Our missions are align a lot in that. I mean, I just go into the foundational stuff, but you go way beyond that. You were telling me, that, you're actually teaching college classes now in this stuff. So how did that come about? 

Peter S. Bergeron: Yeah. So as you do that whole pursuing your academic side, you kind of go, "Gee, is this where I wanna be long term? Do I wanna be in professorship?" And things like that. But there's also, even if it's not what you wanna do on the professorship side, there's still that exposure to others who are doing some research aspect of it, so I need that help. 

Like, you need to be taught even how to do some of the research, so getting around and working around other academics gives you that exposure. And there was just some-- an opportunity after we had moved down to Southwest Florida in, September of '24 to start doing some adjunct teaching. I, at first, was doing some business finance, business math side, and that was, you know, going back to my roots of CFO and that aspect of it, but it wasn't as interesting. 

What I found was we really weren't teaching small business. Again, we were teaching business finance, but talk-- You know, I'd be talking about international finance aspects with people in these intro classes, and even knowing what their long-term goals were, it wasn't corporate finance. It was business ownership. 

It was, "We have a family business, and I wanna make it a little stronger financially. That's what I'm here to study." And none of it was about the small business side of things, and that was that first little push of there's something wrong. Um, but luckily, got the opportunity to get into an entrepreneurial program, and now I'm teaching Entrepreneurial Mindset at Florida Gulf Coast University and focusing on some of those fundamentals of not just running out and getting cash and startup monies and how you, you know, get in front of pitch groups, but really, what do you want for a business? 

Why are you starting your business? What is your motivation behind it? Rather than just chasing money. It's chasing more of it and then getting them to understand, okay, now we're gonna start building a business around your fears, around your limitations, your mindsets. How are you structuring this? How are you starting to get these things to work together and build up from there? 

So just taking more of a holistic view than just here's the final solution, go after it. Kind of more teaching some actual underlying thinking because that underlying thinking is still those same foundational fundamentals that have always been there. It doesn't matter that we've got newer technology, we still know how you have to actually evaluate, think through business decisions, evaluate risk, evaluate return. 

Those pieces are still there that we don't touch upon enough. 

Roger: I think that's absolutely true. I mean, to really understand a business, you have to understand yourself first of all, and that's a missing piece for a lot of people. They just-- They don't sit down and they think, well... and I did that when I was running businesses. I'd go in, I'd, you know... I, I loved taking businesses that were in trouble and making them work. 

I mean, that was my thing. Once they got working, then I got bored with them and, and go to find something else. But, um, I never really, during all that time, asked myself why I was doing this. I really didn't. And I probably would've been a lot more successful in life and su- even successful in the businesses I did if I'd asked myself those questions. 

You know, "Why am I doing this?" And, "What am I learning out of this?" And, "Where do I really wanna go having learned this?" And I think that's the big problem. And the fact that you're addressing that, I think is sorely needed in the business community. 

Peter S. Bergeron: I think one of the things you said right there that was vital and that many people miss was you described exactly the type of business you want, the type of ownership situation you want, and even when you want to get out. When it starts being settled, yeah, I wanna get out, pass it on to somebody else. 

You go run it, settled, or you manage it, settled, and I'll be over here running my next upset condition or going and fixing that next upset condition because that's my superpower and that's what I really enjoy. It takes a certain person who can be uncomfortable in those turnaround situations. It-- A hundred percent, like knowing yourself and what type of business you want to own. 

So many of us don't get that, like you said, as we're starting, as we're launching. We don't have a real goal in mind of what we wanna work to. And along the way, we go from not knowing what we operate into really knowing it good and having this feeling of control to all of a sudden not knowing again because the business complexity changed, and we never stopped it in between. 

We chased that next thing or, oh, it's a slight little change. It's just a slight change in custom m-mix from, you know, sixty percent residential customers to forty percent residential and now sixty percent commercial. It's not a big deal. You got more money. You got more this. Yeah, but it just changed how I collect, how I think about cash flow, how I do all these other pieces, and I'm not good at collections. 

Oh, I didn't realize you weren't good at collections. Yeah. We've lived off the fact that we always get sixty percent of our cash up front, and that other money, it takes a long time to get, but we make good profit on it. Now you just flipped my cash mix, and my weakness is now our leading. It's those pieces when we don't know ourselves, we can evolve our business away from our own specialty of how-- or our own expertise in how we manage it if we don't think with intention 

Roger: Absolutely true. You must have some interesting conversations in school because of that with your students. That'd be great. One of the things that you've come up with, having taken all of this knowledge and learned all you have during the years, something called the 12 Fatal Issues Framework. And so I would assume that these are the 12 things that you must take into consideration to be successful at small business. 

Peter S. Bergeron: So yeah, when going back again under that concept of the business of running a small business, these are the things outside of, you know, product failure, service failure, things along those lines. But those reoccurring problems that small business owners continuously point to and say, "Yeah, this is part of taking it down." 

Capitalization always being like that, one of those number one things they look at. When you get a small business failure, and you go, "What was the reason?" Almost eighty something percent point to, well, capitalization being a part of it. And it's looking at those, again, reoccurring failure points, reoccurring pressures, but really understanding their existing pressures inside the business at all time that every business is managing and containing, whether they've formalized it or not. 

And that's that little bit that people start to go, "Oh." So a business is made up of three types of issue groups as we look at them. Foundational, which is kind of your finance and compliance. Developmental, which is your customer and marketing and presence. And then transitional, which is your strategy, people, leadership, adaptability. 

Like those three things are always happening. In every process we do, they're being worked on as well. And by process, we mean our structural systems, how things actually move through the company. Again, they're very informal or sometimes formal systems, but they are the operating system. And to get understanding, we talk about the most basic of them first is what we call the resource system. Like the most general thing a business owner needs when they're starting. They need capitalization. They need a customer or someone to deliver it to, and then a strategy for how they're getting that good or service to that individual. 

Everything else, the owner is figuring out from that point forward, and again, the rest of those systems move forward from there. The process system is where we talk about cash management, marketing, uh, customer service, and our people. We talk visibility. We're talking our financial controls. Is our marketing effective? 

Are we as a company able to see opportunities to adapt? And then the very last pa-part is just our enterprise system, which is our compliance, our web presence, or our actual physical market presence, and then our leadership. And they're really just the disciplines that we have to fill in Most often, again, in a complete startup, all 12 of those disciplines are being held by the owner. 

Over time, the company itself, the business itself, the way processes move through the operation, they should be held normally by people operating inside the company, which could include the owner. And we, we are good with that. Like, we started a business. I operate inside, you operate inside. We started a business for that reason. 

But when we look at it ourselves as operators inside the company, we have to evaluate ourselves as an outside owner would. If I was hiring somebody else, would that person be making all these same decisions we're asking ourselves to make in there? And that's when we start to see whether or not we're trapped inside the company or not. 

It goes along those, that thinking, so to speak 

Roger: That is a very solid point, I think, that a lot of small business people will sit back and think of themselves as being the employee. And I think that's a very, very vital point there. And you can get a lot in trouble with that. You know, it's like putting blinders on, putting the blinders on the horse. They can only see a certain point instead of seeing the entire picture. That's one thing I've learned also the hard way. And, I'm glad you're addressing that point because I think it's sorely needed in the educational system also. You also talk about being a trapped operator. 

What do you mean by trapped operator? 

Peter S. Bergeron: So again, it goes back to are the decisions, are the roles, are what you are doing inside the business from the day-to-day operational side of it, do they align with what you should be doing inside that company as the, again, that operational role? So one of the ones I would use would be with my father and something we should have seen. 

My father was our IP, our engineering mind, our product driver, but he also was our marketing driver and all of that. Which again, that's fine, that's his company, his desire to have multiple roles, multiple disciplines that he's responsible for. But when we were going and using our costing and all of that, we only put one hat there, so we didn't get all the hats That's one side of it. 

So an owner can trap themselves cost-wise because they're not truly catching what it is I'm contributing to the product, to the business, to everything that's happening. So you're falsifying or falsifying your view. But there's also the other side. Are the decisions that come past your desk day in and day out, again, aligned with your role and responsibility? 

Or are they coming there because by default they used to come there when that person wasn't in the office? If we, in our business, actually had wanted it to be a separate marketing person, were those decisions still just coming to my father because he had always been the one to answer those? He continues to answer it. 

The whole company continues all of its processes, again, both the formal and informal ways of coming across and seeing him to it. Is he getting trapped in that role because everyone is just pointing it back to him, and he didn't decide that that's where he wanted to be? And it's that moment there. Are the decisions, are the functions you're taking in the day-to-day operation by design or by default? 

And most of the time it ends up being by default because it was us in the beginning. We bring somebody in, and we don't know how to let go of that piece. We don't know how to let go of pricing because no one taught us how to be a manager and to set a high watermark. We don't have good advisors on the outside that are saying, "You really shouldn't have to be doing each, approving every single purchase order.” 

You should be approving this level of purchase order. You should be spot-checking this time here, so you know there's controls. And you as the owner, yeah, your risk has gotta be protected. We've gotta make sure you feel comfortable. We've gotta make sure you're happy inside the business." But the business should be an owner's return on investment. 

And again, as the owner, are you happy with this one person controlling every part of your company? If it was anyone but you as the owner, would you be happy with someone having that much control over your return on investment? Probably not. So again, are you trapping yourself in that same way by beholden it on them? 

It's, it's are you doing what you want to be doing in your company intentionally or by everyone else's decision? That's where we get that vision 

Roger: It's the old syndrome of the buck stops here. And, it's hard for some people to give up because, you know, it's their baby. So. 

Peter S. Bergeron: Yeah. Right, and when we start our companies, when we move into those roles, it's usually about the time we ourselves stop growing, stop learning, because we don't have a mentor ahead of us anymore. We're now at the top. Everyone's looking to us as the mentor. Everyone's looking to us for the vision. 

Everyone's looking to us for the decisions, and we might not have anyone to turn to and say, "Hey, uh, how do I now manage a company of 100 because I only ever had a team of 10 that I was responsible for in my previous corporate gig world?" Or, "My previous endeavor in this company two years ago, we had five people, and now we have 30. 

I don't know how that happened. Who do I turn to? How do I, how do I manage this now? How... What does delegate mean?"

Roger: I think you make a very good point there. If you go out and study some of the, the most successful business people in this world, every one of them will tell you that they somewhere along the line found a mentor And a lot of people don't even take that into a possibility or think about it. But if you really, really wanna grow your business, if you really wanna be successful, you need to find yourself a mentor. The guy you can call up at 10 o'clock at night and say, "Hey, I got a little problem. Can I bounce it off of you?" and get some wise advice. And that's something I think that should probably be taught more in the business world too. You basically have the entrepreneurial types. They wanna go out, they wanna build, they wanna create. and then you have the worker bees, is what I call them. They're perfectly happy going, clocking in nine to five and going home and living their lives. 

And you have to have both of those to have a valid economy. So It's always interesting. It's always interesting. Now, you wrote a book, about all of this, and what does the book actually go into? 

Peter S. Bergeron: So the book itself, The Trapped Operator, is about the really what that structure that I call that business of running a small business, and really starting to show small business owners how many more peers they have, how many more people they have they can look to that, yeah, the businesses are a lot more alike than you think they are. 

And here's actually what you put together that you don't even know you put together. Here's actually what you're managing that you might not realize you're managing. And even when we talk about those three financial type issues, they are-- they, to most people, sound the same when I say capitalization, cash flow management, and financial controls, but they are three very distinct things and three very distinct Personality types and what you're comfortable with, uncomfortable with, and all of that, and being able to live with someone who is okay with not having a lot of capitalization and giving deep discounts to get large deposits on the front end and handling the cash flow management that way you know. 

And being okay with taking a long time and, oh, you know, holding someone else's money and having them looking to be done is different than someone who says, "No, I just wanna have one, and I wanna go take a big bank loan, and I n- wanna do everything just cash after I'm done with it, and I never wanna be-- have any of my clientele owe me anything or feel like I am slow on owing them anything." 

Again, that's what we're looking at. Why did you structure what you structure? What is the profile you put together? And walking them through, again, those different systems of issue groups, the structural systems of how processes move, or excuse me, operations move through the company, and then how those decisions are inter-interconnected. 

How a decision where we would normally say you have too much customer concentration or can be contained by, again, holding high capitalization, having extremely high levels of customer service, having a strategy of being almost like a preferred partner to the client, where they feel like you're coming in and helping them design or move their products forward. 

You can be okay having high concentration of your revenue in that one client because you've got good security around them. You've got good buffering around them. And we look at different ways that each of us is going to structure our own businesses, again, based on those risk tolerances. And we just walk them through all the different issues, again, those reoccurring issues, and if they feel that's in there, we take them through tests on how to know what they're dealing with and how to start moving forward. 

So we try to give them a lot of information about the business of running a small business and what that concept means, and how they can put it to action as quickly as possible to get a better sense of where they are and what they're dealing with. 

Roger: So you basically go beyond the mechanics of running a business and teach people how to look at those mechanics in different ways to find out which way is right for them. 

Peter S. Bergeron: Yes. My thing is I'm a huge teach a person to fish because we all have different taste of what kind of fish we want. And so if I show up with a tilefish and they really like flounder, I'm not making them happy. But if I can teach them how to go out and go fishing and can say, "Yeah, I don't know exactly where the flounder is, but I know it's over that way. 

And by the way, this person does know where the flounder is. They're a good person to listen to," and then we do that. So that's what we're looking. We're trying to help them diagnose what do they have, why do they have it, what are they facing, and then giving them some steps forward. But I'm not a start to finish, like one size fits all solution person. 

I, I don't believe in that. We're all slightly different. We all have our own ways of doing things. So I try to give them as much information on here's the thinking behind it, here's the reasons it's being built, here's my experiences and what I'm building it off of, and here's the cautionary tale of what I, I would recommend from here. 

Roger: Yeah, I think that's sorely needed in a lot of businesses in this country. So is there anything we haven't discussed yet you would like to impart to our audience? 

Peter S. Bergeron: I don't think so. I think we touched upon a little bit of everything, and that's kind of me, a little bit of an open book about talking about anything related to small business. I'm happy to have the convo on. 

Roger: Same with me. 

Now, if people wanna get a hold of you, how would they do that? 

Peter S. Bergeron: So if they wanna contact me, the email is peter@wrestlingagainsttime.com. That's all one word. And the book, the landing page for the book is thetrappedoperator.com. That's where we have all the bonus stuff as well. They can get a preview chapter and can get right in. Um, again, inside the book, we give them the fatal snapshot to get the business profile. 

We invite them to the website where they can get the-- we have all the diagnostic living for free. I just couldn't put both the quick snapshot and the long one into the book to fit. So I said, "Here, we'll put it all on the website." And they have the dashboard. My thing is just getting people to start to s-see that vision of the second job, which is that business of running a small business, because then they can start realizing, "Hey, I might not have the exact same product or service as you, but I'm dealing with customers concentration issues. 

I'm dealing with strategy issues. I'm dealing with people issues. How do you deal with it? How do I..." You know, there's enough we can talk to and share about that it's worthwhile to, to be doing that 

Roger: Great. Well, this has been an interesting conversation. I've really enjoyed it, and I thank you so much for coming on the podcast today 

Peter S. Bergeron: I appreciate the time. Like I said, this was fantastic. 

Announcer: You have been listening to the Mastering Business Basics podcast with your host, Roger Pearson. For more information about all of the business education options that are available, we invite you to visit seagulltechnologies.com and continue your journey.