I’ve have been silent in this blog for a few weeks. There are a number of reasons for this but the main one is that, after an illness, I said goodbye to my father, Tony Rando, last week.
These kind of life events have a way of overshadowing everything else, as they should. But as this blog day approached, I realized just how much of my beliefs and attitudes about business came from this man and I couldn't write about anything else. I am not sure if this will be interesting for you but I am positive it will be cathartic for me...
At 28 years old, my father found himself with a wife and a 6 month old son (me). But he also had a family restaurant that had just partially burned and was under-insured. One owner of this restaurant, his uncle, was in the hospital with cancer, and the other owner, his father, was dead at 47 of a heart attack, probably from the shock of the fire. I can’t imagine what it must have been like to be in such a desperate situation - having the livelihood of three families on your shoulders when you’re not even 30.
But my father did what he always did, meeting the situation with a combination of creativity and sheer grit, focusing on what was most important to achieve a single goal, saving the business. And he succeeded. He used the insurance money to rebuild, getting help from friends and family to stretch the dollars. He talked the vendors into extending credit until he could pay them back and he reimagined the business, making it into a combined restaurant/entertainment venue with live music to pull in the crowds. He saved the business and turned it over to his now recovered uncle.
Then he went off and started his own restaurant, leasing space in a hotel. By his second year he was doing $750,000, which is an insane amount of revenue for a restaurant in those days. In 2015 dollars this is equivalent to $5.8 million. He clearly knew how to run a restaurant. What he didn't know was how important good legal representation was. The people leasing him the space saw how successful it was and used a clause in the lease to take the restaurant back. He never forgot this lesson and used top-notch attoneys from then on.
Eventually the family restaurant was sold and he had some money. What he did with the money from the sale was the most amazing thing. He did absolutely nothing. He didn’t invest it, or buy a house, or a better car. He sat on it and waited. He waited until he had a sure winner, a situation where he could buy a dollar for fifty cents. And then he acted decisively, closing a deal in under 48 hours. This was it and he knew it and nothing would stop him.
You see, when the family restaurant was sold, there were some problems and he had to quit his job as the manager of a Holiday Inn to run the family restaurant again for a while. When it was finally sold, he was out of a job. The new manager of the Holiday Inn didn’t run it as well and profit was down. Later the owners decided to sell it and the buyers lost one partner at the last minute. My father knew he could make money with this hotel (he already had) and stepped in with the cash, he and the partners buying the property at a discount due to mediocre management.
Since he had the upper hand, his lawyers tried to convince him to take control from the other partners but he adamantly refused saying “I have to work with these people.” His partners were good people too and they ran this hotel the way they lived, with great business acumen and compassion for others. This was evident when the unions tried to unionize the hotel and the employees had no interest. They were already treated fairly.
Years later he ended up in the shopping center business and his (and his partners’) compassion were regularly evident. Some of the tenants were mom & pops and they were signed personally to their leases. When some of these mom & pops didn’t make it, they worked it out, letting them go without penalty. They never forgot that these were people.
I could go on but you get the idea.
While I have an MBA, my most valuable business lessons came from my father. Here are ten of them:
- If you can own real estate, do. Most of the value in the restaurant he sold was in the real estate.
- Choose good businesses. He came to realize that the restaurant business was tough and moved into hotels, which have higher barriers to entry.
- The Golden Rule applies in business too. It is your reputation and relationships with other people that will make all the difference. People liked him and they came to his rescue when the restaurant burned.
- The most sure-fire way to make money is to create value. I know this sounds obvious but I came of age during the real estate bubble of the 1980s when everyone was making money by flipping stuff. Tying up land and permitting it was a much safer (though more difficult) way to make a profit. He made sure I knew this.
- Find your focus and work hard on it. Otherwise you wind up doing too many things and result in accomplishing nothing.
- Wait for your pitch. Don’t pursue an opportunity just because you want to do something. Wait until there is an opportunity that you can really make into a success.
- Hire top-notch legal counsel. This is not a place where you should be bargain hunting. My father learned this the hard way.
- Pay attention to the financial statements. Again obvious, but you’d be shocked how many entrepreneurs don’t do it.
- You can only wear one pair of pants at a time. This was his way of saying not to get enamored with “things.” It is a meaningless and soulless existence.
- At the end of the day, all of this is about taking care of your family. He made it clear every day that there is nothing more important.
I feel very lucky to have had such a good teacher. And I will miss his counsel for the rest of my life. Thank you for taking the time to learn a bit about this man who had such a positive influence on so many people.