Small Business Failure: Vic Magary’s Interview
- Danny Iny
We’re used to seeing case studies of success, but what about failure?
Not enough attention is given to small business failure – the process of trying something, not succeeding, learning from the experience and building something even better.
There’s a good reason for that. People don’t like to share experiences that they feel don’t portray them in the best light, and it isn’t fun to relive a failure again and again.
But some people are brave enough to do it, and Vic Magary is one of those people. A year ago, his dream business declared bankruptcy, and since then he has picked up the pieces.
Today, he runs a growing online business, creating valuable content for the world to see. And he was kind enough to share his story of dealing with failure.
Here it is, 20 minutes for you to enjoy:
Here’s the full transcript:
Danny: Hey Vic, it’s a pleasure to speak with you and I want to thank you for taking the time for this interview.
Vic: Hey, thanks a lot for having me Danny.
Danny: For the benefit of our listeners, Vic Magary blogs at VicMagary.com about fitness, wellness and self-improvement. One of the early posts in his blog is titled Seven Lessons I Learned from Going Bankrupt. Vic, can you tell our listeners about that post and about the story behind it?
Vic: Sure, yeah, it’s, it’s definitely a defining moment in my life so far. You know my whole life, since, you know, as far back as I could remember, you know, all I wanted to do was run a martial arts school and later on as I got older I also wanted to tie fitness into that. And you know I started studying martial arts when I was ten years old, so it’s really a lifelong passion of mine. It took, you know a few little detours or diversions along the way, you know I did what is so often pushed on people, I did the smart thing, you know get a college degree so you can get a steady job, so I did that. I went to a college, went to law school, ended up with a ton of student loan debt, which wound me up in the army in a weird sort of way. At the time they had a deal where if you served three years in a combat job specialty it would clear your student loan debt, so I did that. Went to the army for three years, cleared $65,000 in student loan debt, which gave me a little more peace of mind to incur more debt, to open up my dream business, so that’s what I did. I practiced law during the day, I was a government lawyer and then I ran my martial arts school and fitness business in the evenings. And I came to a point where I had to expand the martial arts and fitness business and give up practicing law. Which, by no means was I heartbroken about that, I didn’t particularly enjoy being a lawyer, it was good to see the business expand, but when it did that, the overhead also expanded quite a bit. I had to pick up employees which I didn’t have for the first three years, and it had to do a new location which required a small business loan for the buildout, and it just became a cycle that even though business was improving, the overhead was pacing it, and so there was no, new profit stream coming in, you know my net was not growing, in fact many months there was no net, I had many months when I was in the hole. I had to live on credit for both the business and the personal overhead that I had you know, and to top it all off, I wasn’t putting money aside for taxes, so I got hit with some pretty heavy IRS debt a few years in a row. And finally, my accountant looked at me and handed me the phone number of a bankruptcy lawyer. And that is what happened in a nutshell.
Danny: I’ve got to say Vic, this experience of yours is a big part of why I’m so excited about doing this interview. We often hear from the people who have these great, ginormous successes, because obviously their excited to share that story, and everyone wants to hear it. But the people who get through a really great challenge, they’re not always as comfortable sharing that story. But I think there’s as much, or maybe even more to be learned there. Why do you think that is, I mean obviously it’s not an easy experience to go through and then relive in interview after interview and in conversation after conversation.
Vic: No, it’s certainly not, but at the same time you do gain an appreciation for it, I think that’s a good word to use. You know the old cliché of that which does not kill us makes us stronger. And there were certainly points over the last year, uh, you know the bankruptcy happened about a year ago, where, you really, I mean I really questioned myself. You know you’re at these low points in life but you pull through to the other side, you know, eventually you keep moving on, you bump your head a few times, you stub your toe, but eventually you find your groove back. And for me, that was found in large part through moving my message from the storefront, from the brick and mortar, to on-line. And you now, now I help way more people to get in shape, lose weight via the internet than I ever could with my storefront business. My storefront business, you know in a good month I’d have maybe, oh 300 clients between classes and private sessions, on a good day, I can help that many people via the internet, you know selling e-books with proven programs that help people lose weight and get in shape, so it’s the same message but it’s a different medium, I guess, is a good word to use. And I don’t think I would have gotten here, but for the bankruptcy and losing my storefront business.
Danny: I can certainly relate to a certain extent at least to your story, I mean I, I shared in a guest post on The Sales Lion last week about my own experience with my educational technology start-up that basically fell apart when the markets crashed, and I’d love to hear from you… there is a sort of low point, right, where everything’s hit rock bottom, you now the accountant’s handed you that phone number, everything’s falling apart, everything’s being dissolved and at that point, you’ve got to like, take a breath and pull yourself out of the nosedive. How do you do that?
Vic: Well, I don’t think you do it as a hairpin turn. At least I didn’t, I’ll tell you that, it was a, you know, a few months down the road, there was definitely a point of, I guess, grieving, is the perfect word to use. I mean, you want to talk about a low point. For me, a big bulk of my business was kid’s karate, and I gave my clients no notice I was shutting down, because I didn’t have any notice. I had kids walking in the door wearing their karate uniforms expecting to start class and I’m standing behind the front desk looking at them saying: “I’m sorry, there’s no more karate.” And just breaking kids heart all week long that first week and that was a, that was rock bottom for me. You know it’s one thing to lose your money, it’s another thing to have your clients, your students in my case, many of which were children, and just leave them confused like that, so that was a, definitely a low point for me. And then trying to find work, you know, my first instinct was to “Hey, go back, get a job, you tried business, you failed, ah, you know, do the nine-to-five thing. You’ve got a college degree; you’ve got a law degree. Go work!” Well that wasn’t quite as easy either. It was difficult to find work; in fact I never did find work, which, again, kind of dovetailed me towards the, the on-line business. And you know, it worked out for the better, but I guess to answer your question, for me it was not a quick fix, it wasn’t a light switch where I just woke up one day and said “ Hey, you know what, yes, I went bankrupt, but things are all hunky-dory and sunshine!” No, it wasn’t like that at all, there were struggles, but you get to the point where you realize that the only way that you’re going to turn it around is to take matters into your own hand and you just have to do it! You know you buckle down, you make it happen. You may have to go a route that you originally did not anticipate, but ultimately, responsibility falls on you, and that becomes the bottom line and the impetus to keep going.
Danny: You know there’s a quote that I really like, um, by I think it’s Mary Anne Radmacher, I could be wrong, but she says “Courage does not always roar, sometimes it’s just a quiet voice at the end of the day saying: I’ll try again tomorrow.”
Danny: And that’s just what really came to mind as you shared that story, because it’s… when you’re going through all that you don’t have the battle cry and excitement and you’re all revved up, it’s like, it’s a chore to put one foot in front of the other, you just know that you have to do it.
Vic: Exactly. Exactly.
Danny: So, you know, over a few months, you grieved, you mourned, you got past that experience and it does start getting easier and I think that’s important to share with listeners who might be going through their own challenging experience, it does get easier. Over time as long as you keep putting one foot after the other and just taking it one day at a time. But then things start picking up. How did, where did this new opportunity come from?
Vic: Uh, the new opportunity is a project that I actually worked on while I owned my gym, it was a, a project that a former client of mine actually, approached me on. He was a fitness client, I helped him get into top shape and yeah, he approached me about producing an online program to help other people get into shape and we worked on that for a few years, produced some really good information for people, but, not a lot of good sales. And as part of me hitting the wall with the bankruptcy, I also decided that I did not want to pursue this any farther if it wasn’t yielding any income, because, hey, I need to get out there and try to find a job, right? Well, several months after that, it actually did start to clear some income; we changed gears, that was a big thing. You know, another good lesson here, is you know, just because you try the first time and it doesn’t work, once we moved, what we did we kind of put in, in a frame and something that your readers will really connect with is we moved from trying to generate customers by content exclusively to using paid traffic, and once we moved to paid traffic, the volume was there to produce the income that we wanted. And then once we had the paid traffic that was producing the customers, then we hit them with lots of free content there afterwards so that then they would stay as loyal customers for further programs that were produced. But it wasn’t until we made that big click that, you know: you need some volume here and the volume is not coming, just from search engine optimization and content. And once we put some money into advertising that really was what put it over the top.
Danny: And so, how did you, because you said you had stepped away from that as, as you were kind of dealing with wrapping everything up, how did you get back involved in this project?
Vic: Well the guy I was partnered with, you know, he approached me. Once I stepped down he tried to find some other fitness experts that would work with him and he found plenty of people who were qualified from a knowledge standpoint, I mean, let’s face it, fitness trainers are a dime a dozen, but it’s not as easy to find someone who can produce content both written and video and, and audio for that matter. And also has a personality that will connect with your, your core customer base. And I kind of hit the sweet spot in that uh, in that areas, and so he came back to me, you know we made our arrangements and we have been working together happily ever since. Couldn’t be happier.
Danny: And so today you divide your time between that project and VicMagary.com?
Vic: Correct, and VicMagary.com has just begun, I think I’m almost on the one month mark, but it, it’s the entrepreneur in me. You know, I love working with the fat loss product that we work on together that we just talked about, but I don’t have sole control over that, and you know as an entrepreneur you’re always, you’re always wanting that. You know you want your baby back, you want to be able to be the one calling the shots and so that’s what my own website is. It’s the opportunity for me to still, ahh, be a control freak I guess.
Danny: And so, what’s the plan with VicMagary.com?
Vic: The plan is to first, work out the kinks, you know, I, you definitely have control, but you also take all the lumps and I’m, I’m fine with that. I understand that the first, oh, I don’t know, month to maybe six months, I’ll make some mistakes, I’ll do some things wrong, but I’ll learn a lot as well, so that’s month one to month six is to produce a lot of content, make a few mistakes, uh, build some readers out there, and you know, move forward from there. The next step, hopefully earlier than six months, hopefully by the end of may or early June, I want to produce a free course on personal development, it will be a seven day course, you know a nice, little thing to get people moving toward accomplishing their goals, certainly not all encompassing, but, you know, a free taste, something that people will want to sign up for via an email opt-in box, and then from there, the final step will be to take what I’ve learned from the fat-loss product which is sold via ClickBank, and to produce my own product in the personal development field that will be selling via ClickBank. So I’ll still be staying in the online area, but I’ll just be taking what I’ve learned from the fat loss and weight loss industry and moving it into personal development overall.
Danny: And so as you do that, what kind of lessons learned from your martial arts business are you going to take forward as you grow your on-line business?
Vic: I’d have to say, a number one would be: the employee factor, the, and what I mean by that, is there are certain businesses where you can, you can train employees no problem. The martial-art business is not like that, that was a huge hurdle for me, that it would literally take me you know a minimum of two, if not four or five years to train someone else to teach my classes, and that was the biggest mistake for me, I mean, just, you can’t reproduce yourself, you know? Anyone who’s read the e-Myth, which, you know, I think should be mandatory reading for anyone who wants to open a business, uh you know, you’ve got to take yourself out of the, the “doer” role. I mean if you want to open your own hair salon, eventually you’ve got to stop cutting hair. You want to open your own karate business, eventually you’ve got to stop teaching the classes and focus on the major areas, like your marketing, your cash flow control. Things like training your employees and producing new content and a new, whatever it may be that you’re clientele purchases. So that is the number one thing, I will never have employees again that require so much training. I think employees can be great, I think, you know it’s great to build a vision, but you have to have a skill set that is going to transfer easily. And uh, with the online business, I think that’s a perfect realm for that, you can teach someone how you like your email responded to, you can teach someone, you have a lot of Facebook marketing ideas or and know how to do pay per click campaigns, you can teach all of those skills without it taking years on end. So I’d say that’s the biggest one: the employee factor and making sure that I do have a teachable skill set before I ever pick up an employee.
Danny: Okay. You know, I want to just bring this up because I want to make sure we have an opportunity to link to it for our listeners and readers. I’ve watched your “Failure” video on YouTube… not once actually, I’ve watched it three or four times, I think. It’s a fantastic video and I’d like to ask two questions about it. One is why did you create that video, but the second is what were you trying to communicate with it?
Vic: I created that video at a point when I think I started to realize things were kinda spinning out of control at the, at the storefront business, and if anyone watches that video you’ll see the setting is my old gym, it was a very rough and tumble, it was cinderblock walls, concrete floors, minimal equipment and you know, we trained hard. And so, I was at a point where I was frustrated. I myself was not getting the kind of fitness training in that I prefer to do because I was spending twelve, fourteen, sixteen hours a day trying to save the business. Ah, so one day I just, I locked the doors, man. I told all the employees to go home, I said: “No one is allowed to come in and do their training for the next 24 hours, I need some me time.” And so I set myself in that back room with a video camera and just grinded it out for two, for two hours man. It was like a very, healing. I needed that time to myself to just kinda, you know clear my head through the, through the physical exertion, and so that’s really where the impetus for the video came about. Now what I was trying to convey in that is that, you know, there’s all kind of quotes from people throughout history in that video and you know: everybody fails. If you don’t fail then you’re not doing anything, I mean, everybody fails and it’s just a matter of if you’re going to quit after that. There’s a big different between failing and quitting, and you know as long as you keep pushing forward to learn from the mistakes, you make your adjustments, you course correct, and you keep pushing towards the goal, there’s no dishonor in small business failure. None whatsoever, it’s a necessary process. And sometimes it sucks, sometimes it hurts, but it’s, it’s just part of the game man.
Danny: And that’s a very important lesson, a very important message. Vic, I think we can start winding this down, but before we wrap up, I want to make sure that our listeners walk away from this interview with a clear action step that they can take to improve their situation. If our listeners listen to this and something has really, you know, really struck home with them, really resonated and they’re thinking: “Wow, you know this is important, this is something I have to just take home these lessons and I have to apply them, I’m clearing my afternoon, you know, I’m taking three hours this afternoon and it’s going to be for me to apply what I’m learning here right now, today” – what would you recommend our listeners or readers do with those three hours?
Vic: With those three hours, one, I would plan. Okay, because, I keep harping on the fact that you going to make mistakes, you’re going to fail, but it doesn’t mean that you shouldn’t have a plan, I mean, you need to one, figure out what the first step is going to be, knowing full well that maybe it’s the wrong step, maybe it’s the right step, but you need to know the steps. So when I plan I like to plan backwards. See the goal in mind, see where you want to end up and then just try to walk backwards, and you won’t know all the steps at once, you absolutely will not. But you’ll have a good guess, and there’s definitely clues out there, people leave bread breadcrumbs all the time, you know on the paths that they have walked, I like to call them trailblazers. It’s easy enough to find the trailblazers now, whether that be, you know via Google search or your public library, you can find someone who not only has accomplished what you want to accomplish, but has probably come from very similar circumstances. You know, I don’t care if you’re a single mom with two kids, ahh, who’s working three jobs and wants to graduate college, you can find someone else who’s done it already. You know, there’s not that much unclaimed territory left out there, and that’s not a bad thing, you know, it’s not a bad thing at all that you can find these roadmaps. So that’s thing number one, figure out where you want to go, plan your plot backwards, and look for trailblazers. The other thing I would do would be to acknowledge that you’re going to need some time to yourself, you know, like I said, that “Failure” video that came like; it was like a teakettle exploding for me. I was not taking that renewal time, and so schedule that in, I mean schedule it just like you would schedule in an important meeting with the president, you know, get yourself that renewal time, whatever it may be. Maybe that’s 15 minutes as soon as you start your day, maybe that’s 15 minutes once a week on Saturday. I mean whatever you can squeeze in, but you need that renewal time to kind of refresh and make sure your head is in the right path.
Danny: That’s fantastic, thank you Vic! Vic, I want to really thank you for taking the time to do this interview, I’ve enjoyed it, I know that it’s going to be very valuable to your listeners and I want to wish you tons of success with your blog and your new business.
Vic: Danny, thank you very much for having me, I appreciate it.