Talk about putting it all on the line.
Mike was almost out of cash and time before he even opened the doors to his business, and that makes for a particularly interesting small business story.
Here’s what Mike said: “That left me with 30 days to either find a new office space, negotiate and sign a lease, find a contractor to build out this new space, secure more financing, and renegotiate a lower sale price with our seller, or be both broke and without a business to call our own”.
Mike continued. “We fought like hell to satisfy all of those conditions and completely exhausted our war chest in the process. ”
If you think the above is stressful, so did Mike, as he said the following: “When we were going through the acquisition I didn’t manage my stress well at all. I had a breakdown, started therapy, and began meditating regularly”.
And the above is the typical life of an entrepreneur.
Reading Mike’s interview made me think of the expression: “The strongest people are not always the people who win, but the people who don’t give up when they lose,” and that’s exactly what Mike did. He persevered through the small business stresses, and he’s now winning.
What’s your story? Tell us about yourself
I’m Mike Monfredi, a 33-year-old husband, father of 2 little girls, CEO of our family’s 8-employee business, writer, fitness fanatic, half Italian, half Irish, half Transylvanian (yes, it’s an actual place), a former college athlete, and volleyball enthusiast (sand only, not the hard floor nonsense). I quit my job as a forensic scientist exactly 9-months ago to run our family’s dental practice, which we bought in June of 2017. Professionally, I’ve also been writing at my site – MikedUp Blog – for the past 3.5 years about finance, fitness, and entrepreneurship.
But for me, life centers around my 3 ladies and the memories we’re making together.
Oh – and I should say that my wife is technically my boss… which is interesting because we met when she was a student in one of my classes (different story for a different day and we can come back to all that if you’d like).
Regarding one of your business ventures, either current or past:
What is (was) that business, and what does that business do?
As I said above, we own and operate an 8-employee dental practice in Columbus, Ohio. We treat, educate, and empower our patients to have the best oral hygiene possible so that they can be proud of their smiles, go out in the world with self-confidence, and achieve their individual goals. We go out of our way to stand apart from what you may think of as a ‘typical family dental office’.
How many years have you been running your business, and when did you feel comfortable in the role?
My wife is the dentist and handles all things clinical, while I’ve been in the driver’s seat for all things business, financial, and otherwise non-clinical. I started in this role part-time (nights and weekends) in our business’ infant stages about 3 years ago and came over full-time just 9-months ago.
How many employees does your business have?
We started at 4 employees when we purchased the practice and we’ve grown to 8 in the time since. We’re still early in our growth stages as I see our practice growing to about 12 employees before we would consider other large-scale changes (additional office(s) or specialties) that could take us to many more than that.
Business Challenge and Success:
Describe the biggest challenge you’ve had to overcome, how it impacted your business, and how it impacted you personally.
Our acquisition was incredibly difficult and overly complex. I’ve written many pieces about that time and process on my site but here are the Cliff Notes:
My wife and I had saved about $50,000 for legal fees, working capital, and other purchasing expenses to start. Before buying our practice, we had a different practice lined up, with a bill of sale ready to be signed when the seller backed out at the last minute.
That process cut our savings in half.
6 months later, we identified the practice we now currently own as a potential acquisition. It was 25-years-old, stale, in a terrible office building, and on life support. We saw an opportunity while also realizing it would be a significant ‘fixer-upper’. We dove in headfirst, and just like the fixer-uppers on HGTV, when we pulled up the carpet and drywall, we found proverbial mold, bad wiring, and a host of other problems.
Specifically, our equipment was breaking down, our legal fees were racking up, and the most significant hurdle of all was that our seller didn’t have a formal lease in place, which our bank had as a condition for our loan. When I finally tracked down the landlord (by showing up at his house), he told me he wasn’t in a position to negotiate a lease for us because he was both trying to sell his building (which our office was in) and he was dying.
That left me with 30 days to either find a new office space, negotiate and sign a lease, find a contractor to build out this new space, secure more financing, and renegotiate a lower sale price with our seller, or be both broke and without a business to call our own.
We fought like hell to satisfy all of those conditions and completely exhausted our war chest in the process. We did, in fact, hit the finish line to that race, which meant that we were completely broke but finally had the one thing that would allow us to address that problem from an alternate viewpoint – a business that had the potential to earn much more than our salaries ever would.
At that point, it was on us to either grow our business and become wealthy or we could fail and die as a business and then declare bankruptcy as a family. With my oldest daughter being 2 at the time and my wife and I pushing all our financial chips into the table, we chose to stand and fight. Mostly out of excitement and anticipation but also partly out of fear.
Describe your biggest success and how it impacted you and your business.
Our accountants projected our business to increase at an 8% rate during our first year. At that rate, our expenses would dwarf our earnings and eliminate our working capital/savings by $20,000 (that’s a $20,000 loss on the year), which would’ve meant either missed payroll or debt service payments, or both…
Remember, that year would include taking over the business, transitioning for our patients and staff, building a completely new office about a mile away, moving to that office in Month 8, and then settling in. We had some hurdles on the horizon.
We needed a 15% growth rate during Year 1 to break even – no small task with all that was in front of us. But when June 30, 2018 hit (our fiscal year-end), we had grown at an 18.5% rate which we considered an incredible accomplishment.
Leadership:
Describe a period that really tested your ability as a leader and how you overcame that challenge.
During our first fiscal year (described above), I had to fight the daily personal and business financial fires that cropped up all while working to train our staff and establish the culture that we believed could make us significantly better than our competitors, which would ultimately allow our business to grow.
I was also working full-time at a different job during that year.
After my daughter was asleep, I held phone meetings with our staff, worked on internal forms and programs, and started to build up our marketing. I was busy, no doubt, but I kept communications open with my Team by doing 2 things:
- We all read Extreme Ownership: How U.S. Navy SEALs Lead and Win together, and I would discuss each chapter with our employees individually one night per week. We talked about the main principles of each chapter, how they applied to our business, but more importantly how they applied to our personal lives.
- I also instituted a sense of ownership in the company with each of those original employees. I gave them responsibilities above and beyond what they may have been asked to do at an office down the street and I made it clear to them that would couldn’t survive or be the best without each and every one of them stepping up. And that’s what they did.
Personal:
Being an entrepreneur and building a business is hard, challenging, and sometimes stressful. As a fellow entrepreneur, it’s helpful to know that you’re not alone in the personal challenges.
How do you manage the work/life balance?
I’ll preface this answer by saying – I’m still working toward a better balance in this category. But the tactic that has helped me the most has been clearly defining my time sectors. For example, when I’m working out in the morning, I turn off the notifications on my phone and focus exclusively on my workout (whether that’s 20 or 60 minutes).
I do my absolute best to carry that exclusivity over to my workday and the precious family time we have after work. We work to keep phones off the dinner table and to spend our evenings together whenever possible.
Taking it beyond the day-to-day, we work to plan vacations, staycations, or weekend trips as a family. We call them all “adventures” and our girls absolutely love exploring new places and activities together.
How did you manage the work stress?
When we were going through the acquisition I didn’t manage my stress well at all. I had a breakdown, started therapy, and began meditating regularly. This process was chronicled in my How Not to Have a Stress-Induced Heart Attack post, where I also identified the 10 things I do now to help minimize my stress. Here are a few of my favorites:
- Have a “Do Later” button and use it
- Exercise regularly
- Sleep >6.5 hours each night
- Care less but don’t be careless
The practices in that post have really changed my life and I stand by each of them (even after re-reading them 2 years later).
Exit Strategy:
Do you have an exit strategy for your business? If so, what is it? Or if you’ve already exited, what did your exit strategy look like?
Nothing formal, no.
We’ve been so focused on building and growth that I’ve honestly neglected our exit strategy. And I admit that this is a failure on my part.
However – exiting for us will probably look like hiring a partner and eventually selling our majority, or selling the practice outright. We’ve already doubled the value of our practice in the short time we’ve owned it, so our profit from the sale should make a great profit when that time does come.
We don’t plan to exit within the next 10-30 years but who knows what the future holds…
Money:
Money can sometimes be a delicate topic, but many entrepreneurs get into business hoping to hit the financial jackpot. It’s helpful to understand how other successful entrepreneurs deal with money.
Describe your relationship with money. Are you a spender or a saver, and what are your retirement goals (if any)?
We put a large focus on saving for the future in combination with spending on select experiences to enjoy the present moments. I feel the balance between that dichotomy is truly where happiness lies.
In one breath you don’t get the present moments back, but at the same time – the future will inevitably come. And if you’re not prepared for retirement, the short-term happiness you feel now will fade quickly when your choices and freedoms are taken away from you during the time you should be enjoying the fruits of your labor.
We’re diversifying our investments, taking a vacation or two each year, and being mindful of our regular spending. I use a net worth spreadsheet to track our monthly progress to make sure we’re staying on track with our goals and values.
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I’m looking to chronicle the lives of entrepreneurs who are at any stage in their entrepreneurial journey, whether you’ve just started, or, have had multiple exits. If you would like to be considered for an interview, please contact me.
You can find all of the entrepreneur interviews here.
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Also, I published a book during the summer of 2018, “The Kickass Entrepreneur’s Guide to Investing, Three Simple Steps to Create Massive Wealth with Your Business’s Profits.” It was number 1 on Amazon in both the business and non-fiction sections. You can get a free copy here.
