There are many ways to enter into business ownership and on this episode, Ricky Regalado, a serial entrepreneur, shares how he entered business ownership by way of acquisition. He provides insights from the mistakes made, how he has grown the company from five employees to over 200 over the past five years, while still making it feel like a family business and shares a vision of the exciting road ahead.
Cold Turkey plunge from Corporate to owning a business [2:00]
- Went into the cleaning business, purchased it from his cousin.
- Three week turnaround period from getting advice, getting a business loan, liquidating some assets and acquiring the business
The first year of transition [4:45]
- 18 months of struggle: 16-hour days, a few considerations of making it a “secondary thing.”
- Recognized some of the rookie mistakes in terms of the original understanding of the books (financials of the business).
- Crash course on business management from hiring employees to managing through net profits.
- The balance of education versus doing before going into business.
- They did not personally prepare financially, as the books of the business showed a positive cash flow equal to their current income, which they found not to be true. This was a major lesson learned.
Funding the business [10:45]
- Securing traditional loans are difficult. You cannot get them until your company has proven cash flows.
- Even with the positive cash flows he had from acquired business, he found success with going to a small bank as the large banks such as Chase and 5/3 bank declined them. Ricky readily points out that he had not established as much credit as he needed to and advises others looking to go into business to do that early on.
- He has established a relationship with his banker at Wintrust, who has become somewhat of an advisor. Per Ricky, he advised him to get into the services business which makes Ricky’s business more bankable.
- Key point of distinction – in consumer banking, the big names sometimes matter, but in business banking, having a partner is the key.
Managing through Growth [14:15]
- Started six years ago with four people, now they are at 250 employees.
- Have grown from one state to business in six states, prime to enter the seventh and eighth.
Flexibility, Family and Doing What’s Right [17:00]
Further expansion through technology [20:45]
- The introduction of the Rozaroute which will enable his Rick and his team to 1) perform better walkthroughs 2) Create work-flows for each cleaning contract, creating the most efficient and consistent worker route for that job and 3) A community portal
Differentiating to change the industry [27:00]
The advice he would give his younger self [33:00]
- Be proactive
- Own your job
- Getting started: Balance jumping in and getting started versus getting stuck in a “preparation cycle”
- Banking Partner: When searching for a loan, Ricky underscored directing your attention to smaller banks as you have stronger chances for both loan approval and establishing a working relationship.
- Attitude: Ricky demonstrates and teaches a proactive, assertive, own-it attitude. It comes across in his managerial approach, as well as how he drives innovation (e.g. Rozaroute).
Should you wish to use Ricky’s Services, he operates in: Illinois, Indiana, Ohio, Michigan, Pennsylvania, Texas Wisconsin
You can reach Ricky at:
Please leave a comment below: What is your take-away item? Do you have any additional questions for Ricky?