FTC 213 | Starting A Business

213: Leaving A Job, Starting A Business, And Moving The Needle With Paul Cronin 

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Seventeen years in a job may seem impossible to get out of. Yet, the guest for this episode, Paul Cronin, did. Leaving behind the toy business he started from, Paul realized that toys were not his future but building businesses certainly were. He sits down with host, Mitch Russo, to share with us his journey—how he did it, why he did it, and what’s moving the needle for him now. He also talks about how he is now helping others move through the transitions in their businesses and lives and then shares some important advice for those who are still figuring out what to do next. Follow along Mitch in this conversation as he provides an inside look into the life cycle of businesses and more.

Leaving A Job, Starting A Business, And Moving The Needle With Paul Cronin

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Many years ago, in a small upstate town, my guest was part of a team that grew Eden Toys, a local manufacturer to $90 million in sales serving thousands of retailers including Macy’s, TJX, and Nordstrom. He led the sales team and generated $20 million a year until it was time to leave, both New York and the toy business behind. He realized that toys were not his future but building businesses certainly were. He moved to Boston, he started speaking at major educational institutes and started his own company. He’s here to tell us how he did it, why he did it, and what’s moving the needle for him now. Welcome, Paul Cronin to the show.

Thank you for having me, Mitch.

Paul, you have quite an incredible past. To have started out at a toy factory, who wouldn’t love that? Selling happiness, that’s what I think of when selling toys. Talk to us a little bit about how you got all of this started.

All of my major life changes have come to me and how I even started in this business. I was a senior at Northeastern University in Boston where I got my bachelor’s. My cousin was visiting from out-of-state. He said, “Why don’t you go to this gift show and I’ll teach you about selling? I know you’re studying marketing, but you need to understand selling.” I volunteered for a couple of days. I’m sure I made every order wrong. They had to correct when I get back to the factory, but across the aisle from my cousin’s booth with a salesman from a little company called Eden Toys, he called my cousin after the show and said, “Does your cousin need a job? I need someone to help me out.”

That little conversation we were chatting in between customers led to a seventeen-year career at Eden Toys where I came from nothing and ended up generating $20 million a year. I have sixteen direct reports, fly myself all over the place, and I was responsible for 6,000 accounts. That was a long but it was a fascinating journey. It was an example of over and over again throughout my life. Those kinds of little introductions helped me make major pivots in my life.

What was it that got you seventeen years later to pick up and leave?

One company is a long time. Younger people will be laughing when they hear that, seventeen months for young people. For my generation, you find a great company and you grow. Every year, I got a raise, a bonus, and I made my numbers. I keep doing it. Internally, I decided to want to do something. I also was coming up on 40 and I was like, “I’m never going to start a business. I better do it now.” I left the toy company on January 31st, 2001 and started the data analytics business. We kept trying to build the model and go from there.

One of the people from the toy company was one of my partners. We went building the data model and building it out, trying to get customers and all the hard stuff that happens with that. Unfortunately, we ran into the 9/11 drought. All the VCs and Angels we were talking to, we’re trying to raise a few million dollars. They liked the idea we came up with and the prototype software we had but there was no money for new businesses at that point. We shut that down and that led to the next thing after that.

Partnerships are organic beings that have birth, life, and death. You should fear none of those but expect all of them. Click To Tweet

I have one quick 9/11 story. I was running a venture-backed startup at that time. We’re in a technology complex out in the Sudbury, Massachusetts area. There was a company next to ours that had this amazing technology for video storage on hard drives. They would somehow speed it up so that you could access and store video 100 times faster than the bulk of the video would theoretically allow. They had fantastic growth. They were at the point where they needed to raise more money and they had their VC presentation in the room going on while the 9/11 situation was going on. Finally, someone’s phone rang. They asked for a few minutes’ break. My friends next door walked out of the conference room to give them some privacy. Within five minutes without saying a word, they pick up their stuff, they left, and they never heard from them again. It was such a dramatic time. It was such a monster change in about everything at that time, similar to what we’re going through now.

There’s a lot of the same fear and uncertainty. When will it end? Is it going to end? How will it end? What I would say the parallel between that transition that we all experienced both business and personal is they required a paradigm shift. We went from being the center of the universe as a country and society to know that we’re all vulnerable. That’s the exact same thing that’s happened again years later.

We did get through that and my belief is we will get through this too. I don’t know how long it will take or what the outcome will be but I tend to look at the positive more than anything else. My belief is that we will come out better than we ever have before. There have been lots of people who passed away that shouldn’t have, there’ll be lots of people who lost jobs and suffered, but the world will be a better place somehow. I don’t know how but I hope it will. Paul, let’s get back to your story. You are trying to get this VC company and jump-started, what happened next?

From there, I realized there was no way to raise millions of dollars that we needed to launch. At that point, I reached out to people I knew back in the toy industry and started reconnecting with people. It just so happened that one of my former colleagues was getting a new startup launched in the toy industry. He had partnered with another gentleman who was doing private label products and they wanted to do some branded product. They needed a top sales guy to help, “We need to get this thing launched. We need to check out here?” I took a handful of samples and my old Rolodex and I called every buyer I knew and said, “This is Paul Cronin, nevermind the company, we need to meet.”

I got it going. We’ve got the initial orders in and then other people started joining the company. It was fun but I was a contractual basis. I was like, “That’s retail. That’s in my past. I don’t need to do that anymore. What else can I do?” You’re going to laugh but I sat down. It was in September of 2003 after doing consulting for a year and a half. I said, “I like to go. If I can figure out a way for golf business, how would I do that?” I Googled golf businesses for sale. All these crappy ideas come up and all of a sudden, I was like, “Indoor golf training center. I know how to do sales training, I know how to golf.” I’m not a golf trainer. I know enough but they weren’t looking for golf trainers.

What they were looking for is people who are going to build a business, sell, and how do you attract franchisees and so forth. I invested my money, I went all in, and it was an international company. We got into it and we started building out some centers. The way life works are after about 4 or 5 years. I was a minority investor having to come in later into a thing. I saw the direction of the business where it wasn’t aligned with what I wanted. It didn’t also help the fact that the CEO and I hated each other. It was obvious. One of us was going to go and it wasn’t going to be the CEO.

Fortunately, by getting through connections, we found somebody who was excited about the business and they wanted to buy me out. In this case, the company was trying to raise a $30 million round, which would have been very profitable to me. As I say, high and doubts about the leadership. We set a price, they wanted to close in May or June 2008. “I don’t want to wait. I have a home on Cape Cod. What will it cost me in the deal to get my money now?” They said 20%. I said, “Do it.” My lawyer thought I was crazy. I was like, “That’s it.” I got my money cash in July of 2008. I waited until October. If I had reached for the brass ring, I will have lost everything. Eighteen months after I did my transaction, the company never raised the $30 million because it was the crash in ‘08, ‘09. They were wiped out, so I would have been wiped out. As bad as ’01 was as good as ’08 came.

Two things I want to make note of for readers. Number one is if you find that you’re in a position where you and the CEO hate each other, know in advance, you’re not going to win that war. Paul was a great example of that. I hope we take that to heart. The second thing is that you have some amazing mental abilities. You must be psychotic or something to even know that in advance.

If my father were alive, he’s long since gone, he says, “There’s good luck, bad luck, and Irish luck. Your last name is Cronin, you’re on Irish luck that day.”

Every business is also an organic being. Click To Tweet

There you were. You had your cash. You’re out. What happened next?

I was sitting on the beach watching the sunset and my favorite beer in the hand. This is the store I call a beach, beer, and a phone call. The beach, a bear, and a phone call and how it changed my life. The short story is my phone buzzes and it’s one of my friends from the business. My state can and it was a voicemail. He said, “Paul, congratulations. I was sad you’re leaving but I’m happy it worked out for you. I have one question. What are you going to do next?” I look down at the phone and said, “You son of a gun. I have no idea what I’m going to do next.” I had been focused on the deal, “You got to get the deals done.”

I hadn’t thought about what’s next. I sat there for a while. I was like, “I was no longer 40. It was many years later. I got to get cracking here.” As it happened, I was introduced to this organization that’s all built all around the exit planning process. Even though I exited a business, what I learned is there’s a whole group of professionals around there. Mergers and acquisition advice, lawyers, consultants, accountants who all have a piece of that business owners being decision. How do I exit? It each plays different roles. I met some people in this organization.

At that first meeting, I met a gentleman who asked me an important question. He said, “What do you do?” I said, “I help companies to go fast. I’m a sales and marketing guy. Is that something you’re interested in?” That’s the way you’re supposed to answer that question but he’s drilling rights. He said “Maybe. What do you do? People get to a point in life that they might sell their company or they leave their career and they have no idea what they’re going to do next.” I’m sitting there trying not to laugh out loud.

I’d say, “I know people like that.” He goes, “I helped them figure it out.” I said, “I need your card.” We still have business cards and we started meeting for coffee. That fellow’s name was Jack Beauregard. Jack and I decided that my skillset and when I learned through the process of continually reinventing myself and his process because he had similar though different stories, but he also studied at Harvard Divinity School. He had this broken down into a pedagogy. I was like, “This is cool.” We created a business out of that. From there, we slowly grew that. We’re introducing people around the world to the methodology that we taught them while we were doing work with clients ourselves. As I often tell people, it’s an important thing.

I would say, “Of all the things I shared, this is the most important. Partnerships are organic beings that have a birth, a life, and a death. You should fear none of those but expect all of them.” In 2019, Jack and I decided we want to do different things so we split. We were able to split up the IT, fortunately. He took some, I took some. I took the website, he took another website. The name What’s Next? Guy, which is the name of my website was born out of that whole exercise because that’s how I’m known in my little inner circle. It’s Dr. Paul Cronin when you’re trying to answer, what’s next. He’s the What’s Next? Guy.

That’s a great story. I have to tell you, Jack and I had a great conversation. We continue to chat. It’s been great to get to know him as well.

He’s a fascinating guy but we need to do different things. I tell all people, splitting is rarely 100% amicable. Sometimes it is. If you’re smart and professional about it, remember, it’s a business relationship. Everybody should treat it that way.

There are some terrific, beautiful lessons and stories in what you said. I’m going to quote you on partnerships are organic beings. They have a birth, life and death. When I started Timeslips Corporation, I did so with a partner. We had some ups and downs between us but ultimately, we sold the company for eight figures and that was the theoretical end of our partnership. What happened was which showed me who he truly was, he stayed on beyond the point that he had to, to help me get my goals met.

FTC 213 | Starting A Business
Starting A Business: Splitting is rarely 100% amicable. If you’re smart and professional about it, remember, it’s a business relationship. Everybody should treat it that way.

 

We have been lifelong friends. Our business was sold in 1998. I saw him, we had dinner together, and he’s a beautiful guy, an incredible individual. He will be the absolute friendship of a lifetime from a business partnership. I’m hoping that we don’t hit the death part of that one. One of us is going to literally have to die for that friendship to die because it’s been such a beautiful relationship. He was at my wedding. When my dad passed, he was at the funeral. It’s one of these things where you get to build lifelong friendships from business partnerships. I was lucky about that.

If I may, the following I like to share with that story is every business is also an organic being. If you want to understand that, go and Google the names of the companies with a Dow in the year 1900, the names of the companies that make up the Dow Jones now, and they will be radically different. There’s a very simple reason why. Businesses are people with a set of common objectives. That’s what a business then. When I speaking to business owners and they go through this what’s next, my assessments, and so forth. I said, “You are following an organic process. Trust it.” It’s no different than every other process in the universe, the birth, a life, and a death. The owner of the business hopefully is not dying as they’re exiting. Sadly, that does happen but they are following the organic process. Their ownership is if you will die but somebody else’s ownership is birthing. That’s beautiful because that’s the organic nature of business.

Paul, let’s get into the meat of the show here. I enjoyed our conversation. I should have cut it off sooner because this is the part that readers like and that is the ability for them to learn something about what you do. Be the mentor and tell us exactly what it is that our audience should do in a situation where your talents and transformations become important.

The two hats that I wear is this business coach helping people answer these questions around what’s next and what should be the proper exit, what are my options? That’s a step-by-step approach. I like to use a lot of questions. I use assessments and I have a very programmatic approach. Other people have given me a more organic approach. Any coach who has owned and left businesses and has worked with enough clients, if you get recommended, go with them. If you want to work with me, I have a structured approach. I have a beginning, middle, and end every program. I don’t charge hourly rates. This is what it is. That’s where that business coaching experience. I call it the What’s Next experience. The other is if it’s appropriate, I will help sell the business.

I tend to sell smaller businesses. When people said, “What do you mean by that?” I said, “I sell businesses you can explain to a twelve-year-old.” I put listing agreements together for a carpet cleaning business and a convenience store. I’m doing a buyer search for a $1 million to $2 million manufacturing distribution business. I took an offer for a bread distribution business. Those are the kinds of companies that I understand and the people I work with trust me because they know I’ve been through it, both sides of the table. If you want to understand M&A, there are a billion books all around feeds, exits, and all of that. At the course, you’re trying to help the business owner get what he or she’s trying to accomplish as part of the exit. There’s also a bag of money.

I also tell people, “You better have more goals than a bag of money.” The sum of money you could receive at the end. In most exits, most sales, the bag of money does not match up with what you thought it was going to be otherwise I said, “I got a full price offer.” That’s rare. More often than not, you say, “What are the goals?” One goal could be, I want to make sure my people are taken care of, all the employees. That’s a goal. I’ve worked hard on this new website. We’re about to launch and I want the buyer to make sure that they get that website launch. That’s another goal you can ask for. Other things could be, “I need enough money in order to retire and never have to work again.” I refer to that as the bag of money. Other people aren’t looking for that. Other people are saying, “I have a lot of money. I want to make sure that I can work ten hours a week for a year.” That’s more important than the size of the bag of money.

I honor all of those. I can’t promise I will achieve them all because that’s impossible. If you, as the business owner, set the series of personal, business, and financial goals, you set them up ahead of time, not only will you feel better about the process, you will accomplish more goals. The upside of that is when you tell your advisors, lawyer, accountant, spouse, your M&A person, business consultant, “I spent some time on this. I created three sets of goals. Mr. Accountant, Mr. Lawyer, how many of these can you help me accomplish?” You make their job so much easier.

I could relate to all those questions, Paul. First of all, when I sold my company, I didn’t bother to think about what would come next. I was so focused on the outcome. I said, “If I get the bag of money, I’m sure I’ll be happy.” As you know, that is a false belief. I wish I knew you back then. That led to a period of real introspection and depression even as I tried to figure out what the heck my life was all about now that money was no longer the issue. It took a while to dig through all that.

I spent several years bouncing around trying to do different things until what appeared to surface felt right and good. I wish I would’ve known you back then. If you need the What’s Next? Guy, you have him now. Paul, what happens after you work with somebody? Do they, at that point, almost always say, “Now I know what’s next. Thank you, Paul,” then you’re done with them? Do you continue to work with somebody to figure out what happens if what’s next didn’t work out? Where do you go with clients?

Businesses are people with a set of common objectives. Click To Tweet

It depends on where they’re coming to me from. If they’re a business owner who’s already made the decision to sell like the two people. I’m like, “It’s time. It’s knowing when you need to go.” I don’t have to spend a whole lot of time with them there. I make sure they think about their goals, what they want. I’m more focused on the transactional piece and helping them find the right buyer and so forth. Some of those people will also say, “Before I leave, it’ll be nice to have some time to talk through what will my life look like after I leave?” That’s the other half of the what’s next.

What’s next for my business of what you talked about and then what’s next for my life. Once again, I have a standardized process where I work with people week-by-week and help them develop deep plans, deep thinking, doing scenario planning, brainstorming, and then digging into what’s motivating them. What they come out with on the other side is what I call a framework for purposeful living. I don’t know about you but most people I’ve met think about their work as, “This is my purpose.” If you take the purpose away, some people feel like you’ve taken the person away so you need to replace that. This framework is a paradigm shift because it’s a way of looking at your life in terms of how you experienced spirituality, timeless family, and ways of keeping yourself physically, intellectually healthy, intellectually stimulated and also making time for fun and recreation.

Don’t get me wrong but the other thing I work with people more often and sometimes people struggle with is, what income-producing work should I do? I was talking to a fellow, we used to golf together and I hadn’t talked to him in a long time. He goes, “I’m thinking about moving over here. It’s 600 miles away. I’m going to do business as I did before.” I said, “Why can’t you do that?” He goes, “I have a noncompete here.” I said, “Why do you have to go 600 miles away? Why can’t you take your skills and apply them to a different business?” There was this pause.

“There was a business I almost bought 600 miles away and it’s close to where my dad.” In other words, “You want to move closer to your dad because he’s elderly. You think you need to buy a business that justified doing that.” There was another pregnant pause. He says, “Can you help me with this?” I said, “There’s a lot of ways I can help you but I don’t want to help you buy a business if that’s not the right thing you should be doing. On the other hand, why do you need to uproot yourself if what you’re trying to do is spend more time with your dad? Spend some time with your dad.” There are lots of ways to make money besides buying a business and putting so much at risk all over again. The biggest part of my role, frankly, is challenging people what I call it the false dichotomy. I have one option. My other option is to do nothing. Do you know there may be 180 degrees difference?

Paul, what would you say to some of the key pivot questions that you ask someone when they’re at this point and you are helping them find some truth about themselves that they don’t currently see?

One of the ways to look at it is when people describe what’s bugging them. I have all these ideas that I can do. Let’s write all those ideas down. One of the things that I then take after all these ideas get all written though. “I want to do this, I want to do that.” I start asking, “Let’s say you want to move 600 miles away. If you move 600 miles away, what would that mean to you?” The next underlying question is, “I have to spend more time with my elderly aunt.” “If you spent more time with your elderly aunt, what would that mean to you?” If you keep asking, what would that mean to you? As my joke eventually gets to what people want is world peace. All kidding aside, what would that mean to you is a powerful way of getting people on earth.

When you finally get to what that is. Let’s say you want to buy a bakery. You’re going to buy a little bakeshop. If it were possible for you to buy a bakeshop, how would you do it? Here’s what we’ve done. We’ve drilled all the way through the how and the whys down here. You started way up in the sky. Now you’re like, “This is what I want to do.” If you don’t set goals and tactics, that thing is never a plan and never comes to be. The second question. If it were possible to do that, how would you do it? It’s the way forward to build a tactical plan with deadlines to execute.

I have a similar process. I call it the Seven Levels of Why. When I’m with a client and he tells me something or has made a decision, I’ll simply say why seven times? By the seventh time, it brings peace to the world. It becomes one with God. It’s something I would call spectacular in general but that’s a great process, Paul. I hope that you have followed along here and taking some value here because to me, what all is doing from the perspective of having been through this process now, on my own, having a guide would be valuable.

Paul, we’re at the point in the show where we’d like to get to know you a little bit better. The way we do that is through a couple of interesting questions. What I’m going to do at this point is I’m going to ask you the first one. I’ve been on dates where I’ve asked my new friend. It always produces an interesting answer no matter what. Who in all of space and time would you like to have one hour to enjoy a walk in the park, a quick lunch, or an intense conversation with?

You better have more goals than a bag of money. Click To Tweet

Mahatma Gandhi.

Why?

I would like to know how one man could motivate hundreds of millions of his fellow countrymen and women to persuade the most powerful nation in the world at that time. One of the greatest empires in global history, Great Britain to set India free.

That is an incredible moment in time. I love your answer. Two hundred plus interviews later, no one has ever given me that same answer. That’s impressive. If I can arrange that meeting for you, would it be okay if I tag along?

The only problem is we’d all be dead or if he believes in reincarnation then we would be different people.

After all, it would be a great conversation to have no matter what.

We had a hell of a conversation.

We get to the grand finale. Paul, we call this the change the world question. What is it that you are doing or would like to do that truly has the potential to change the world?

I would say the most important thing is to help people realize that every person has gone through multiple transitions in their life. You’re born, you’re young, you’re educated, you move on, you start a career, you might get married, you get divorced. Each of us learns those transitions throughout our whole life, careers and so forth. If we take some time, look, and list what those transitions are and what lessons we learned from each, the next transition becomes, I wouldn’t say easier, but more at peace with it. It’s that book Who Moved My Cheese? The mice that always adapted and understood, perhaps it’s such a small creature could, all I have to is adapt and I’ll get my cheese. That’s what people need to do. Understand that you always had the ability to transition whatever you’re facing, whatever it is, you can get through it. Look inwardly at what you’ve learned through the process of transition in the past.

FTC 213 | Starting A Business
Starting A Business: Every person has gone through multiple transitions in their life, and each of us learns through those transitions.

 

That’s an incredible place to go but how would you do it? The question is, what are you doing or would like to do?

I continually ask myself that question. I continually challenge myself with that even in the business that I’m in now. It’s an eternal process. We have the whole process of Coronavirus and COVID. People keep saying, “I want to get back to normal.” I keep saying, “What if this is normal?” You have to create a new paradigm. We are the most adaptable species. I am an extremely adaptable person. Look at my LinkedIn profile. I do not believe I’m unique in this capacity. I am made of the same organic matter as everybody else on earth.

I not only agree with you but what’s interesting is I’ve asked myself the same question. What if this is the new normal? At some level, I’m okay with it. There’s a part of life I miss that was in the past. The only part that I’m hoping for is that things settle down so that the violence and the disruption in society either flips and moves to a new paradigm or goes back to a place where people can feel safe walking the streets again. That’s the part that I missed.

I would say we’ve been around for under what our species, how many millions of years. We’ve always had pandemics, disruption for violence, etc. There will be a new something on the other side of this. I can’t predict what it will be. I know that old normal, don’t expect it to come back. Expect something different to come along and be willing and flexible enough to embrace that new thing.

Paul, it’s been a pleasure chatting with you. Before I let you go, you have something incredibly valuable, something I didn’t expect you to be giving away for our audience. Can you describe what it is?

This is for business owners, it’s called the What’s Next Self-Assessment. It’s a three-part program. It’s derivative of a coaching program I charge a lot of money for. This is a self-assessment so you get an online questionnaire, a downloadable book, and a downloadable workbook. It’s a way for business owners that has some of the questions we talked about like what should I do with my business? What should I do with my life? Normally the online pieces sell for $299 but I am having a coupon code that will be available. Mitch will share that with you all so you can get it for free. I do hope you take advantage of it. Everyone has ever taken has found an extremely valuable exercise.

Readers, if Paul talks about this, that means that I have already taken it myself and can do a test to its value. I assure you that it’s going to be of high value. Please check it out, go to YourFirstThousandClients.com. Paul, thank you for the time. Thank you for your wisdom and for sharing it with us. It’s appreciated.

Thank you for having me, Mitch. It has been my great pleasure.

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