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Author and Small Business Owner Talks About Pathway to Success

Tom Gegax founded TiresPlus, a company he built up to a 200 million dollar business with 150 locations. He recently wrote a book called The Big Book of Small Business: You Don't Have To Run Your Business By The Seat Of Your Pants. He has taken his years of experience and put it into a practical textbook for entrepreneurs. Here we talk about his success, why he wrote the book, and what he'd like other small business owners to know about what it takes to reach the same levels he did.

Small Business Podcast: Hello everybody. Welcome back to Thanks very much for joining us for another interview today. Couple of things, make sure you sign up for email newsletters at the top left hand corner in every webpage at because we send out exclusive interviews available only to our newsletter subscribers. And you want to get signed up for that to make sure you get those about once a month. And we've been getting some good feedback about some of the interviewees we should be talking to, questions we should be asking and that sort of thing. So as usual, we're giving you good information for you entrepreneurs out there and small business owners about ways to be more profitable, more efficient, and basically enjoy owning your business a whole lot more as well. So, our guest today is Tom Gegax and he's got a book that is written called The Big Book of Small Business. I've seen it in Barnes & Noble before we talk about doing this interview so you may have it as well. Tom was with Tires Plus and we're going to talk to him about why he wrote this book and some of the things he learned from his experiences in running a business. So, Tom thanks very much for joining us on the show today.

Tom Gegax: Welcome Tim. Good to be here.

Small Business Podcast: Well, talk about this book and what was kind of the drive behind getting this book out there and getting the information out there. What made you decide to do that?

Tom Gegax: Well, of course, every author thinks the world is waiting for their book, you know, in a world where they would not be able to live any longer. And that was part of the thinking in my book. You know, and I kind of like when I started Tires Plus. You do something that you believe the world needs. So, after going through the difficulties of growing a business from an idea and then I have then to turn them in our business with 1500 employees and 150 stores, I realize at each step of the way, there's such an incredible stress involve and challenges and difficulty. Then if I could help other small business either start ups or ones that are already growing, or wanting to grow and improve themselves, then if I could help that then I would be contributing to the world and minimizing, not eliminating, but minimizing their stress because what I went through is very difficult, so if I can help them that's wonderful.

Small Business Podcast: Now, the tagline of this is "You Don't Have to Run your Business by the Seat of your Pants", which I thought was fascinating because so many of us, I'm included, are guilty of doing that as well for our business do that, you know, the best laid plans and everything like that. But it ends up happening. We make these day-to-day decisions, at what point from the start of your business at Tires Plus to, you know, the one store to going to $200 million, at what point did you decide running by the seat of my pants is not going to work anymore.

Tom Gegax: Well, it's a gradual thing. It's an organic thing and, you know, you just keep hitting your head against the wall. And I consider the business my laboratory. And because of having controlling interest I could try this, try that, nobody said you can't try this or try that. And the more challenge you have, it's kind of like rats in the rat experiments where, "Oh, you're black hair, okay you'd go here." So, all the different mistakes that I'd make and then I'd figured, "Okay, that doesn't work, so I'll try this. Oh, this works, great." So that's what we ended up putting in the big book is every single key to success that someone needs in starting or growing a small business.

Small Business Podcast: Now, you also mentioned in the book that you came from Shell Oil and some bad habits came along, I guess, with you when you actually, you implemented some things that were the same even though you were the small business. A lot of our listeners are sitting in the corporate world right now, thinking about starting their own business. What advice would you have for them to avoid some of those mistakes you made?

Tom Gegax: Well, I think it's about Tim taking the best of what you learned, you know, in large company because we really did bring some of the processes and procedures from big business and I think that can be important, but yeah, you want to be careful because the bureaucracy can weigh you down. You need to have decision making pushed to the lowest level. You need to ensure that when you have rules and guidelines, that when are times when exceptions can be made. So, there are many aspects that you can take running a big business, or you better not run it just like that. I think big business can learn from small and small business can learn from big.

Small Business Podcast: Now, you talked about rules, one of things you talked about in the book is systems discipline which a lot of small business owners don't even have systems in place. Why do you think that's so important?

Tom Gegax: Well, I guess if you have, you're the only employee and that maybe, I'm not sure if everybody is aware of the statistics in small business, there are 17,000 large businesses that goes with 500 employees or more. There are 26 million small businesses that is less than 500. And 20 million of that 26 million is a one-person business. And we sometimes don't take them as a business, but they really, even though they don't have employees. They're good employee themselves, they report to themselves. They also have vendors, subcontractors, customers, so they are a mini-business even among themselves. Now, certainly in terms of systems and processes, the more employees you have, the more important those are. But even if you have, it's just you. There are ways that you can have things to be efficient and there's... You know, if you're not filing things the way correctly or, you know, you can't find things whether it's electronic filing or paper filing or you don't fill out forms correctly then these things can come back to haunt you and actually create more time. Deming did some research earlier and it was with manufacturing, and found that 80% of all errors occur because of process errors not because of people errors. And the process is in the environment that they're in. And I don't believe it's that high in other businesses, but I believe it's probably in the range of 50%.

Small Business Podcast: Now, well you also talk about, well we're jumping around a little bit here, but there's so much to cover the fact that you know as coming out of Shell, you had a pretty big ego like a lot of business owners do, which is part of the reason why they made them successful, but you had to kind of temper that with looking at flaws too and being able to get feedback from your employees that when something was going wrong, so how did you balance that, that ego to succeed with flexibility.

Tom Gegax: Well, first of all, it really, really is important to be confident, not cocky and to be open. I remember the first time I realize that where I thought I was open I wasn't was in, you know, I would have my employees give me, those that reported to me, they do a performance review on me also. And what they do so that was anonymous, it was send in to our human resources head and they would merge and purge them and put them all together then they would say other things they thought that I was doing well and those things that I needed to do better. One of the things was, "Tom, you say you're open, but you should see your tone and body language when we bring out a problem or an idea that's different from yours." So, I began having a much higher degree of awareness toward really truly being open and breathing and not getting into defensiveness or killing the messenger so to speak.

Small Business Podcast: You think that's a good idea then to keep that anonymous so that people feel open to be able to talk, mention things that they can be approved without fear...

Tom Gegax: Well, I think both. I think in the annual review process it's got to be that. But I think we shouldn't restrict ourselves on a day-to-day basis saying, "How am I doing?" And usually, I talk about it in the book in our system, The Rule of Three that you've got to ask, the first two times they'll lie. In other words if I say, "Tim, how do you think I'm doing?" You say, "Oh, great, everything is fine..." "Well, there got to be something that you think I should do be doing differently." "No, no, you're doing fine." "Tim, look nobody is perfect. Now, I want you to share with me three things I do well and three things you think I can improve." And then you'll end up going on, you know, and saying those things. So, there are various ways to be able to get people at, which reminds me, just very briefly, I want to say.

Small Business Podcast: Sure.

Tom Gegax: With this book, you ask me a question at the start, I don't think I completely answered it. Our point of differentiation here, in other words why we wrote it, not only to help small business but to have something that they could find everything in one spot because I went to Barnes & Noble many years ago, well I thought before writing this six years ago, and said, "How do you...I'd like a book that has every aspect of managing a business in one spot." They went looking and looking and said, "There isn't such you know. We've got one in sales over here, we've got one in marketing over here, we've got one in hiring over here, we've got one on motivating over here, and we've got one on mission and vision values here, we got all of this different books," but there was nothing that had it in one spot. So, over the last five years before introducing this a few months ago, there was nothing like this. And my son who is at Newsweek, who was the editor in this book said, when it came out I said, "Trent, this is the only like this." He said, "Sure, Dad." I said, "I'll pay you $10,000 as an investigative reporter because he was the lead writer on Katrina and the Atlanta bombing, many, many other cover story.

Small Business Podcast: Wow.

Tom Gegax: So, he said, I'll take that. So, in the investigative reporter he did the research and retains some research companies and keeps organizing things and keeps that and says, "You're right, there is no book than this is...

Small Business Podcast: That's good.

Tom Gegax: So he took what were 700 pages, cut it down to 460 pages because, you know, as news magazine writers they only get it small amount of space.

Small Business Podcast: Okay.

Tom Gegax: Anyway that's the premise of this getting all in one spot for the small business.

Small Business Podcast: Well, this is an interesting point. Your son didn't go into the business with you, was that ever talked about or, you know, lot of family businesses talk, it's kind of just an understood thing.

Tom Gegax: Well, it was talked about in terms of, he asked when he graduated college he said I want to talk about whether I'd go into business or go into writing. And he just asked a lot of questions and I answered them as best I could. Never trying to convince to do it or not to do it because, Tim, I've seen people that go into businesses with their parents and sometimes it's healthy, other times they are almost like, it's just the parents are trying to parent their children in that business and really it doesn't worked out well.

Small Business Podcast: Right.

Tom Gegax: So, Trent got a wonderful career of his own with Newsweek for 11 years, and then did some editing of this. He now runs...he did the editing on this. So it reads like a news magazine, but yet has the breath and depth of a textbook. But he didn't, he left them and is now running, I have a private equity company where we invest in various companies, early stage company.

Small Business Podcast: Now, you've sold Tires Plus correct?

Tom Gegax: I sold Tires Plus six years ago.

Small Business Podcast: What was the...the decision behind that, at what point did you decide that it was time to move on?

Tom Gegax: Well, because neither one of my children, either Trent or Chris. And Chris is a video and film producer and Trent being a writer, you know, at that time. They, neither one of them, have interest in the coming into the business which was fine. So, when you don't have that going and then the partner, the partner from the start had the business, now it has has been 25 years for that. What do you think? So, we just decided, we had a wonderful offer from Birthstone and Firestone and just decided to go ahead and do it for those reasons and everybody want employees one got large bonuses and let them have options so. And that being a good thing and then was able to then, I miss that kind of teaching ongoing, you know, motivation and education, so I figured it this was the way to do it and I do consulting and writing and speaking, so I'm able to continue to have that teaching mentality through those sources.

Small Business Podcast: Did I see Tires Plus featured on Small Business School, the TV program?

Tom Gegax: Yeah. Did you see that how long ago?

Small Business Podcast: I thought this, maybe a bit of a rerun, but I thought it was just a few weeks ago.

Tom Gegax: Yeah. Well, they have a rerun that. Yeah, they actually interviewed me for that like seven years ago.

Small Business Podcast: Oh, okay.

Tom Gegax: But they have been still rerunning that so, yeah Small Business School they are so good.

Small Business Podcast: Yeah, they do. That's a great program.

Tom Gegax: They do great things.

Small Business Podcast: Now, at $200 million and 1500 employees, at that point, you're really not a small business anymore. Did you feel like you were still operating as a small business though?

Tom Gegax: Yes and that is critical. Each module, let's see each store, each district because, you know, that store is a small business and then we have like 10 stores in each district for this, so we had a district coach. So he had, there are 10 stores and he runs that as a small business. And the retail coach, the head of retail operation, he runs and manage that. So, yeah, we tried to retain the small business roots, which is critical. Yes.

Small Business Podcast: And why is that, is it because the customers kind of don' they feel like they're dealing with this huge conglomerate?

Tom Gegax: That's part of it. And that the employees don't feel like they're working for a huge conglomerate because, remember quite often, companies say, "Well, we really need to take care of our customers." Well, who serves the customers?

Small Business Podcast: Right.

Tom Gegax: The employees do. So that same kind of focus. If the employees feel like they're working in a big, impersonal conglomerate as you say, then they're going to translate that to the customers. For instance, we did personal things like, you know, I wrote a birthday letter to each person at their birthday, so just a quick little note, "Happy birthday, hope it's going well, thanks for what you're doing," you know, a couple of paragraphs.

Small Business Podcast: Really, even when you had 1500 employees.

Tom Gegax: Yeah and what we did is I did it for the hundred, you know, or support center and our different, our regional person and the district managers did that for them, so no I did not do it for all 1500 employees.

Small Business Podcast: I see.

Tom Gegax: But everybody is doing it; everybody did do it, so they got it from someone.

Small Business Podcast: Now, to keep that kind of small business feeling, you did regular training. You called, you know, the district managers called coaches that sort of thing, so how did you translate that, so when you got big, you could still make sure the person behind the counter was giving the same service that you would have given if you were standing...

Tom Gegax: Well that's a nice question. Various ways, one, each orientation where we brought people in every two weeks we had a class, new hires. So I spent, and they had a week education, and I always spent a half a day with them in talking about our mission, our vision, our values, our philosophy and really got to know them and spending a full half a day, not just coming in for 20 or 30 minutes, but half a day with them. That's one way. Either ways, at know, we had a lot of training going on at Tires Plus University and I was involved in a lot of that because I felt that kind of exposure, kept it small and kept the mission and the vision pure and we didn't get watered down through the layers.

Small Business Podcast: And then how would you kind of check up to make sure that the service...did you ever had mystery shoppers or whatever to make sure that it was happening.

Tom Gegax: Oh, yeah absolutely, we had mystery shoppers, we had guest comment cards, we had a GEI, guest enthusiasm index, that we monitor and rated people and people got bonus on that.

Small Business Podcast: Guest enthusiasm, I've never heard that before, is that something that you guys have come up with?

Tom Gegax: Yeah.

Small Business Podcast: Interesting.

Tom Gegax: Yeah, our GEI. So, and then I would go around in the stores and, you know, I spent half the time in the office and half the time in stores. So as I would arrive at the stores, you know, you quiz them, looking at different files, and see how they're doing this, how they're doing that, some of the many ways that we make sure the kind of wow time at customer service.

Small Business Podcast: All right, well we're out of time now. We've jumped quite around a bit, but there's a lot in the book that obviously we didn't cover. We just barely scratched the service here, but listeners you can go, well into the book on and to show notes, but it's called The Big Book of Small Business: You Don't Have to Run your Business by the Seat of Your Pants. Tom, thanks very much for talking with us today, I appreciate it.

Tom Gegax: You're welcome Tim. I enjoyed it very much.