Lessons from a man who started 28 businesses (most of them successful!)
 

Courtland L. Logue is from Austin, Texas, and he has a compulsion. He loves to start new companies. By age 47, he has started 28 companies. All that experience has taught him three fundamental principles of business success....

Some of the businesses he's started were a sign business, an air conditioner factory, a dry-wall supplier, travel agencies, bike stores, pawnshops, and software companies, to name some of them.

According to Logue, five of his ventures were complete failures. One of them -- EZ Pawn shops -- is a huge success. The remaining 22 businesses were "pretty successful," meaning they were profitable when he sold them, often a year or two after starting them. "I get bored real quick," Logue says.

He chose many of his businesses by leafing through the Yellow Pages looking for solid businesses that could benefit from splashier ads.

(Does this remind you of what Michael Ross has said in the past, about finding good business ideas from the Yellow Pages?)

His biggest success was EZ, an chain of upscale pawn shops, which made it to Fortune Magazine's list of America's Fastest-Growing Companies in 1995.

He started in the early 1970s, and by the mid-1980s was running 12 companies simultaneously.

Why does he do this?

"I like living at 100 miles an hour," Logue says. "That's where life is most fun -- out on the edge."

What has he learned from all this experience? It boils down to three essential things....

1. First, get good people. Logue says, "Remember, .200 hitters don't win championships. Overpay and get .300 hitters. Just don't hire more of them than you need. With partners, make sure you get along and you both know which one of you is the boss."

2. Second, stick to what you know. For Courtland (known to his friends as "Corky"), that meant mainly retail-type businesses. When he dabbled in manufacturing, he got into trouble....

(I've read this advice several times from those who have started multiple businesses. Often, they stick to the area they are familiar with and know about for all their businesses, which increases their chances of success.)

This is shown best by when Logue focused on a businesses he thought he understood well -- pawnshops. He founded EZ in 1974. His game plan was to change the face of pawnshops.

"People view pawnshops like the sewer, a place you wouldn't want to go," he says. "But I made EZ Pawn clean and bright with colorful blue awnings so people would feel comfortable going there." By 1995, EZ had over 250 shops, with more than $160 million in revenue.

3. Then there's tenet number three -- watch the business like a hawk.

Logue says, "I go over numbers every day from 4 to 6 pm. I know entrepreneurs who say they'll look at the numbers at the end of the year. Never wait till the end of the year, or you'll learn about trouble too late to act."

More recently, in 1999 Courtland Logue has partnered with a former finance executive at Dell Computer, to expand his Antiqueland chain of antique stores from 7 stores to 100 stores. He still hasn't slowed down!

I enjoy learning from lessons these "multiple-business entrepreneurs".... I admire them.... Online, we have many successful multiple-entrepreneurs too, people like Gordon Alexander, Don Alm, Michael Ross, Jim Straw, and others too....

These people have really learned the hard lessons through experience, and I believe most of them start different businesses because they LOVE it!

- Dien Rice

References:
Fortune, "Serial Entrepreneur: Tips from a man who started 28 businesses," July 10, 1995.
Austin Business Journal, "EZ antiques," June 18, 1999.


EZ Pawn shops

Re: Lessons from a man who started 28 businesses (most of them successful!)
 

Dien, I saw a tv documentary about Warren Buffet last week. It was called "Woodstock for Millionaires" and I wish I'd taped it as I think there was quite a bit I missed since I was dealing with worms in the PC at the time.
I think the rules he followed would be much the same.
It helps if you are a sharp as they obviously are and not afraid of work.


add some magic to your day

Warren Buffett's investment style, what it boils down to....
 

Hi John,

> Dien, I saw a tv documentary about Warren
> Buffet last week. It was called
> "Woodstock for Millionaires" and I
> wish I'd taped it as I think there was quite
> a bit I missed since I was dealing with
> worms in the PC at the time.
> I think the rules he followed would be much
> the same.
> It helps if you are a sharp as they
> obviously are and not afraid of work.

John, I saw the same documentary! This was a documentary shown on Australian TV, about the Berkshire Hathaway Annual General Meeting. Berkshire Hathaway is the company controlled by Warren Buffett.

It's the biggest AGM in the world, with something like 50,000 people descending on Omaha, Nebraska, to attend, to spend a few hours with their hero, Warren Buffett.

I'm a big Buffett fan myself -- I've been studying his approach to stock investing now for several years, and I apply a similar technique. The essence of his technique is to look for value -- he looks for undervalued growth companies.

Mostly I studied the book "The Warren Buffett Way" by Robert Hagstrom, Jr., and there's also good information in the book "Buffettology" by Mary Buffett and David Clark.

When you look at what he's done, there's NO DOUBT he's a big success. His approach to investing, when you think about it, boils down to solid, common sense.

This probably isn't precisely what Buffett does, but I've essentially boiled down my own Buffett-inspired investing style to the following approach.... Here's how I choose which companies I invest in (and I have an excellent record, but you'll have to take my word for it)....

1. I look for at least 5 years of consecutive growth in earnings-per-share (which is the company profits, divided by the total number of shares).

By the way, this will cut out probably around 99% of listed companies. Most companies don't have 5 years of continuous growth in their profits.... It makes your job much easier once you cut out the other companies....

I didn't invest in any tech stocks (and so I haven't been affected by the market downturn), as most tech stocks don't pass this step. That's because most of them are not making any profits.

2. I like the earnings-per-share (EPS) growth to have some consistency. The reason is, I like to feel I can predict with relative confidence what the earnings-per-share growth would be for the next 5 to 10 years....

So, for example, I prefer it if the company has consistently approximately a 15% growth rate per year in their profits, rather than have profit growth which is jumping around everywhere....

3. After this stage, I use a spreadsheet to calculate what a company is "worth". I use the approach Robert Hagstrom, Jr. uses in the tables in the back of "The Warren Buffett Way" (but which he doesn't really explain very well).

This step enables me to check if the company is "undervalued" or not, based on my estimated growth rates in its EPS.

4. If it passes steps 1, 2, and 3, then I study the company in more detail, to try to really understand what it is they do, and whether they can sustain their profit growth into the foreseeable future.

For example, is there a big enough market for their products for them to grow into? Those kinds of questions....

I think while Buffett may not use this exact technique, he does something similar. It's a nice approach to take, because you end up putting your money with very solid companies which are growing their profits fast....

This is based on the idea that the "worth" of a company is based on the PROFITS it can make for its owners (which means the share-holders), and that in the long term, the stock's price will reflect this worth. When you think about it, this idea seems like "common sense"....

While I haven't yet achieved the riches of Warren Buffett, using an investment-style based on his has helped me to grow my wealth every year, based on the shares I own....

I hope this information helps you to become wealthy. :)

- Dien

Is there any interest in this topic?
 

This is a system which works, and (no joke) now is a great time to buy certain stocks....

In Australia, there is a locally famous multi-millionaire investor, Rene Rivkin. Here, he's known for his cars (he has 82 exotic cars) and his luxury boat, which he practically lives on.

One of Rene Rivkin's sayings is, "Buy in gloom, sell in boom...." Well, right now we are in "gloom" in the stock market.... It's the time to buy. Any interest in this topic?

- Dien

Re: Is there any interest in this topic?
 

Dien -

> One of Rene Rivkin's sayings is, "Buy
> in gloom, sell in boom...." Well, right
> now we are in "gloom" in the stock
> market.... It's the time to buy. Any
> interest in this topic?

Absolutely. Peter Lynch made a ton of money for himself and his clients when he was the Magellan, (I think it was Magellan), fund manager at Fidelity. The Motley Fool's investment techniques are based on the same principles. If you're interested you can visit them at www.fool.com. I own several of their books and those guys are great.

So yeah. Let's discuss. BTW Dien, have you made any progress with your investing software?

Rick Smith, "The Net Guerrilla"

Re: Is there any interest in this topic?
 

Hi Rick,

> BTW Dien, have you
> made any progress with your investing
> software?

Thanks for reminding me.... It's partly done (with a partner), but not yet completed....

I've been a bit too unfocused lately, trying to do too many things.... I have to jettison some projects and focus!

- Dien

Re: Is there any interest in this topic?
 

Dien -

> Thanks for reminding me.... It's partly done
> (with a partner), but not yet completed....

> I've been a bit too unfocused lately, trying
> to do too many things.... I have to jettison
> some projects and focus!

I know the feeling. Gordon and I have talked about so *many* projects over the last few months that I have found myself having to refocus as well. I'm pushing hard to get my current software project done to bring it to market. But I keep running into technological difficulties with the development tools. I hope I have overcome the last of these. Funny thing is, back when I was working with JJS to figure out which project to work on, this one looked like it would be the quicker of the two. Actually, you saw parts of its predecessor last summer when you were in town. Well, this project is based on that. It's smaller and much more focused on one niche topic. Once I finish this one, the foundation will be in place for what you saw last summer. In addition, just about everything else is done as well. The rough draft for the e-booklet is done. Been done for months. The rough draft of the marketing copy is done. Been done for months. I'm just fighting with getting this doggone backend piece done. But yet I have other stuff I want to work on as well. So... I feel your pain my brother! *g*

Rick Smith, "The Net Guerrilla"

Laser, Laser, Laser.....
 

Hi Dien and Rick!

Ah, yes! I know this concept well!

Lately I have been playing with a coaching distinction I have called "Becoming Expansively Laserlike" which means being as focused as a laser beam on a REALLY grand scale, thus expanding our projects...bringing them forth more efficiently AND providing a greater value in the meantime.

I'm not on sabbatical yet, and am open to talking about this or other topics as well! :-)

With Purpose and Passion,

JULIE




Dare to Discover Your Passion, Decide to Live Your Destiny!

Methods for getting focused....
 

Hi Rick and Julie! :)

Rick wrote:

>Actually, you saw parts of its predecessor
>last summer when you were in town.

Yes, I remember!

>But yet I have other stuff I want to work on
>as well. So... I feel your pain my brother! *g*

Heheh, yes, this sounds very close to my situation....! Actually, I've given myself too many projects, and they are too diversified.... I'm also helping my brother Thomas out by doing some work for his distribution company (and I'm learning a lot about how distribution works in the process).

I have a tendency to try to do too much, and I don't like "jettisoning" things.... But I've got to start doing it...!

Julie wrote:

> Ah, yes! I know this concept well!

> Lately I have been playing with a coaching
> distinction I have called "Becoming
> Expansively Laserlike" which means
> being as focused as a laser beam on a REALLY
> grand scale, thus expanding our
> projects...bringing them forth more
> efficiently AND providing a greater value in
> the meantime.

Julie, that sounds like a great approach! :)

I think there are two kinds of focuses....

One kind is focusing your mind on the task at hand, so that you don't have too many other things on your mind at the same time....

The other kind is generally focusing for a few weeks (or months) on what you are working on, so you don't have too many diverse projects going at once!

I'm good at the first type, but the second type of focus doesn't come naturally to me.... I have a tendency to want to do it all. I have to force myself to do it! :)

> I'm not on sabbatical yet, and am open to
> talking about this or other topics as well!
> :-)

Julie, I'd love to hear more of your insights on this topic.... :)

Here's something I'm doing right now to help myself get focused, and to help decide which projects NOT to do....

I'm crafting a few simple rules, to help me to quickly decide whether I'm interested in doing something.... I'm sure finding the "right" rules for me will be an evolving process....

I've only just drafted these rules yesterday, so I'm not sure if they're "workable" yet. In essence, I'm planning to focus on businesses with high-margin products, which can be started for less than $500, and which can be gotten going within 2 weeks, where I can identify a clear advantage over my competitors. (My problem lately is I can see TOO many opportunities, and I need a way to cut through it all or I get confused and overwhelmed by all the opportunities out there....) I may need to rework these as time goes by.... :)

From what I remember, Bill Myers (a well-known product developer) gave himself a few simple rules. For example, at least at one stage, he would only create products which he felt he could create within a certain time period (something like 4 or 6 weeks).... Though he may not stick to that rule any more nowadays (as software development takes more time than creating a "guerrilla" video, for example)....

If anyone has advice on this topic, of getting a focus, please share....

- Dien

Re: Methods for getting focused....
 

Dien -

> Yes, I remember!

Like I said, the new project is based upon what you saw. However, it goes far beyond it in capability. While remaining focused on one topic. *g*

And if I can ever get past the technical difficulties I keep running into I'll let you have a sneak peek. *g*

Rick Smith, "The Net Guerrilla"