This week’s interview series welcomes Jeff Prager, the CEO of Backroom Management, who has experienced tremendous entrepreneurial success with several companies. Jeff resides in the Metro Denver area and I caught up with him last week to learn what his secrets to success have been. Because of the length of the interview, I have broken it into two parts. The second part I will publish this Thursday. You can learn more about his company, Backroom Management, at http://www.backroommanagement.com.
Q: What originally inspired you to starting your first business?
A: I graduated in a recession. I was 22, broke and married. I had to survive-and who would buy a house from a 22 year old kid? So, I found a way to sell apartment buildings and land to developers (most of the work was over the telephone). I always took an older broker to go with me on appointments-his job was to shake his head and say I knew what I was talking about. It worked.
Q: You’ve built several multi-million dollar companies. Can you tell me a bit about each of them?
A: After working for Touche Ross (now Deloitte and Touche), I became a controller for a large home building company. Then I became a CFO for a real estate syndication firm. Then I opened my own CPA practice. As a part of that practice, I found I took more time teaching people how to grow businesses than doing tax work. Most of my clients were in real estate related industries, but one client asked me to be their CFO as well. They knew they wanted to be in a golf related business and after a few false starts, we create Ashworth Golf Clothing. Eventually, it became a public stock and I cashed out. I sold my accounting practice. A couple of years later a couple of my old clients asked me to help them build their businesses.
One of these businesses was one of the larger land developers and the other was Strauss Homes. We grew Strauss Homes from nothing to the 2nd largest privately owned home builder in Colorado and one of the top 100 privately owned companies in the state. My partner died in 2001 (luckily we had all the succession plan documents ready) and we both saw that the real estate market was changing. I liquidated the company in 2003 before the crash. I was bought out of the land development company in 2007. Great timing – not genius – just luck.
Q: You’ve experienced tremendous entrepreneurial success in your life. Yet, most businesses supposedly fail in the first 5 years. What personal values have been the biggest factor in you succeeding?
The key to success is bottom line: great teams. My favorite quotation is from John Maxwell: “One is to small a number to achieve greatness.’
Beyond that, don’t get trapped in the day-to-day of running a business. Everyone wants to rush into doing it. Contractors, for instance, want to be out building all day long. But if you don’t plan first — and I mean spend weeks and months really planning out your long term goals and strategies — then you’re going to get caught up and bowled over by the day-to-day.
It’s far too easy to lose sight of the big picture.
The other key is to fail frequently. That means that you try new things, you see what works, you shift gears, you change tactics — and you acknowledge when something isn’t working so you can find the thing that did. I seem to remember that Edison had 1000 failed designs for the light bulb. But none of those were failures to him — they were all opportunities to learn, and to get him closer to the right answer.
Q: I heard that you retired for 7 months before starting your current company, Backroom Management. What drove you out of retirement to start another business?
A: Have you ever been retired? You can only take so many bike rides and visit the kids so many times before you start dreaming again. 7 months was exactly enough time to get me dreaming of building a legacy.
Q: What advice can you share with readers who want your level of success? And, what can they start doing now to successfully build a business.
A: I call this philosophy of success the five C’s: Create your benchmarks. Collect meaningful information. Compile your data. Compare your results. Correct your trajectory. If you apply this method of evaluation and optimization honestly (and it’s HARD to be honest with ourselves sometimes), you’ll succeed.
In other words, success isn’t an accident. It isn’t hard work. Success is a SYSTEM.