Archive for May 2011

Lessons on the Entrepreneurial Journey

CliffB. C. Forbes once said, “If you do not drive your business, you will be driven out of business.”  Cliff Hirsch, president of Island Tile, has been the driving force behind Central Florida’s leading distributor and installer of high quality tile and custom flooring since he founded the company in 1984.  Once a small, efficiency apartment in Palm Bay, Island Tile is now a thriving multi-million dollar company with an upscale showroom, outlet store, warehouses and business office – all located in Melbourne.
“I knew at an early age that I would own my own business,” says Hirsch. “That motivation to make my own money and manage my own company has always been there.”

During his 26 years as the owner of an award-winning small business, he has amassed a wealth of knowledge and business savvy that he constantly uses throughout his day-to-day management of the company.  But to learn a little bit about his business acumen, one has to start back at the beginning.

Think Long-Term

When he founded Island Tile in 1984, Hirsch had no investment capital or inventory, so he literally built Island Tile from the ground up, spending all of his time working to turn his dream into a success.  “I do not recommend starting without capital, but it can be done,” Hirsch emphasizes.  “But if you do, you need to be prepared to work very hard.  Also, you have to recognize it is going to take awhile for your business to take off, thus success will be limited [at the start].”

Hirsch also adds that it took him about 12 to 13 years to grow and develop Island Tile into the business he wanted it to be.  During which he spent most of his time building up inventory and working to transition from reinvesting profits to build the company, to actually having profits leftover at the end of the year.

However, he recognized that he couldn’t just focus on start-up timelines and profit margins.  Hirsch has learned to apply the same long-term mentality to all aspects of his business.  For example, “I bought cheap office furniture when I started out and ended up replacing it after a couple of years,” he remembers.  “Well, that’s more money out of your profit column that you have to use.  I learned my lesson and bought the top of the line equipment; we’re still sitting in those chairs 15 years later.”

Hirsch’s rule of thumb: if you’re planning to keep something more than five years, always invest in quality.

Keeping Things Realistic and Attainable

He also advises to be realistic when setting any goals, policies or prices.  “Set things at the proper price to start with,” he emphasizes.  “Do not get into the habit of having constant sale cycles.”

Without the flux in product pricing, businesses acquire a more realistic and reliable monthly revenue projection, and customers do not come to expect things to always be on sale.  Essentially, a five dollar product is always a five dollar product, and everyone knows what to expect.

In addition, Hirsch looks at past business performance to help him determine what his one- and five-year plans for future growth and development will look like.  He says this planning strategy has been especially useful during the current economic recession.

“I went and got out old financial statements from years when our financials were similar [to now],” Hirsch explains, “and I reviewed how much we spent on advertising, employees, etc. and used that to plan ahead.  It’s allowed us to stay on track as a solid business while continuing to advance in the industry.”

But, Hirsch does not develop his plans alone.  He includes his employees, like Patty Taylor, who has been Island Tile’s office manager for 17 years, and Wayne Lovett, who has been the operations manager for 19 years, in the planning discussions and keeps them in the loop about the company’s goals for the upcoming fiscal year.  As a result, the entire company moves forward at the same pace, with the same goals in mind.  The group planning sessions have also birthed some profitable business ideas.  For example, one solution to combat a decline in customers (caused by the economic downturn) was to create a new outlet store.  Hirsch opened the warehouse outlet directly behind the current Island Tile showroom so customers have the added convenience of shopping all in one place.

Innovation Opens Opportunities

He stocked the outlet with liquidated inventory from distressed manufacturers and suppliers. Hirsch’s move actually opened the doors to new potential buyers.  People like young couples, first time homeowners and renovators on budgets, could now shop at Island Tile and expect to receive the same quality product and service as their more affluent counterparts, but at a more affordable price.

“We purchased liquidated inventory and opened the outlet,” he says, “but, we also continued to stock the regular showroom, and kept the mentality, ‘If we have the goods, they will come.’  It was speculative, but it has put us in a dominate position within the industry and we are now the key stocking distributor for a three-county radius.”

Hirsch listens to his gut instinct, and it has not failed him yet.  He continues to take smart risks to the benefit of Island Tile because he believes that going out of business or remaining at the status quo are “not acceptable options.”  He also recognizes if a company is not actively advancing itself, it will be left behind.

His drive and focus stem from his passion for his work.  He loves that as his own boss he has the freedom to do what he wants to and to run his business the way that he wants.  As Hirsch says, “If you’re happy with what you’re doing, your chances of success will be much greater.”