Celebrating Milestones is Critically Important. Here's Why:

I've been on Cloud 9 this week. The feeling started on Sunday when we threw a golf and tennis party in Los Angeles to celebrate TGA's 10-year birthday. In the time since, I've had one of the most productive work weeks I can remember. It reminded me how important it is to celebrate milestones - not only to recognize and motivate staff, increase morale, generate PR and so forth - but also to rejuvenate ourselves, the entrepreneurs and owners.

I generally have a hard time celebrating work-related things. It's one of my weaknesses as a manager. The reasons are partly my INTP personality and partly that my job is to think (and worry) about things 2-5 steps down the road so others don't have to.

But having around 150 TGA students, parents, partners and friends come out to celebrate our 10 year birthday on a warm Southern California afternoon when there were hundreds of other things to do reminded me how important these moments are. Yes, from a dollars and cents perspective, we hopefully gained and retained some customers. But we also charged nothing and covered all expenses, so who knows. The important thing is that we created a sense of community, a sense of family.

We had a student and his dad from one of our first six school programs in 2003 come out to celebrate with us. The kid who was half my size when I coached him through years worth of enrichment programs and camps was suddenly taller than me. Crazy. We didn't recruit him to the party, he just showed up to say thanks. He told us that TGA was his launching point for playing golf at one of the premier high schools in LA and how he's hoping to get a golf scholarship to an Ivy League school when he starts applying to college next year. That's priceless.

It's maybe ironic to mention the word "entrepreneur" and "10 year birthday" in the same sentence but it is very real for me and all of us at TGA. In my experience, entrepreneurship is much more a marathon than a race. Making it 10 years at TGA means nothing if we're not 10x what we are today at our 20 year birthday. And that's the beauty/frustration of it all - company-building takes time. A lot of time. We still feel and operate like entrepreneurs every day at TGA, 10 years in. And a lot of other entrepreneurs I know experience the same thing. So if you're thinking of venturing down this road, be prepared for the long haul.

I know that many readers of this blog are either already associated with TGA or are interested in becoming so, and I want to thank you for your valuable contributions to the way I've been feeling this week. I'd like to extend a special thank you to LeeAnn O'Donnell, TGA's Marketing Manager, and Nate Wright, TGA's National Program Director, for throwing an awesome birthday party last weekend. It invigorated the local TGA community and put me in a state of euphoria that has motivated me to have one of my best weeks on the job.

That is why celebrating milestones is so important for me, and you, the entrepreneurs.

I want to leave you with my favorite picture from our birthday party, and if you'd like to see others, I invite you to visit our TGA Premier Junior Golf and TGA Premier Youth Tennis Facebook pages.

Thanks again and Keep Swinging!

Social Entrepreneurship - The Way We Think About Charity is Dead Wrong

Non-profits have been on my mind a lot lately.

TGA's new charitable arm, the TGA Sports Foundation, recently received a significant grant that we're using to hire a management team and build the organization, so we're in full-out startup mode right now.

I have also been going through an awesome program by the Annenberg Foundation called Alchemy Leadership Seminar, which I highly recommend for anyone in Southern California who is the ED or Board Chair of a non-profit.

One of the most influential and informative things I've come across is a TED Talk by Dan Pallotta, whose views have played a significant role in shaping my (and many others) view of the non-profit world.

Social entrepreneurship is becoming it's own category, to the degree that my alma mater, USC's Marshall School of Business, has developed a specific program around it.  In the golf industry, many junior programs are non-profits (for good reason) and I encourage anyone reading this who is associated with or thinking of starting a non-profit to spend 20 minutes watching this video.  The comments about compensation, marketing and overhead are contrarian to the way most people think of non-profits but make a lot of sense within the context of sustainability and entrepreneurship, which are keys to success for any organization regardless of IRS status.

My favorite line is this:

"You want to make $50 million selling violent video games to kids, go for it and we'll put you on the cover of Wired Magazine.  But if you want to make half a million dollars curing kids of malaria, you're considered a parasite yourself."

Hope you enjoy.

Entrepreneurship is a Marathon, Not a Sprint

Last week I shared with you my version of TGA’s 10 Year Story, and through the process of writing it and planning for our anniversary campaign, I’ve done a decent amount of reflection.

One of the topics I've been thinking about is the myth I hear frequently about entrepreneurship being sexy and quick, a la Instagram and Tumblr.  In my experiences, it's usually the exact opposite – complicated and long. 

One of the more timely articles to cross my eyes recently was Seth Levine’s blog “The Ten Year Entrepreneur” in which he does a better job of describing this than I could.   In it, he says: “Years 3-10 in a business are the real heart of entrepreneurship … figuring out how to scale an organization ... playing with product market fit that you thought you’d already figured out 10 times … trying um-teen different sales and marketing ideas … all while trying to make sure you don’t run out of money … this is the meat of company building.”

I couldn’t agree more.

I was on a conference call recently with some industry members trying to explain the lifecycle and timeframe of selling, starting and building a sustainable franchise.  My comment was this – “building a business takes time … in the first year, a TGA franchise is generally focused on learning the business; in year two, they usually start having some success; and in year three is generally when they blow it up.”

Some of the folks on the call seemed surprised (not an uncommon reaction) at the risk and length of time involved.  But in our world, success is never guaranteed and immediate income of a significant nature is rarely achieved.  That's not entrepreneurship.  If you want guarantees and large paychecks from the beginning, you're better off as an employee for an established company.  Entrepreneurship is about value creation and risk with upside.

Interestingly, the timeframe I articulated was for a franchise coming into a proven model where things like “product market fit” and “sales and marketing ideas” should be relatively established.  If you're starting a company from scratch, you're likely in for an even longer haul.  We definitely had some initial success in our first few years at TGA, but it took several to break-even and several more to “blow it up” (if that’s even happened yet – my opinion is that it hasn’t).

In retrospect, years 1-3 were much easier than years 4-10, especially since we started franchising in 2006.  Nowadays, the issues we deal with are bigger and carry larger ramifications.  Our responsibilities, especially to our staff, have increased along with the overhead.  It’s more time-consuming and challenging to modify policies and procedures now that they’re imbedded within a 70 franchise system.  Culture has been established, and trying to change the less glorious aspects of it can set off what feels like World War 3.

But we made it, thankfully, due to a healthy mixture of persistence, stubbornness, instinct, and most importantly, passion and belief.

The lesson is this – if you’re an aspiring entrepreneur, get ready for a long, tough marathon because entrepreneurship is all about building a business with long-term sustainability and rarely does that look anything like a sexy, quick sprint.

I’ll end with a quote from my favorite robot dinosaur Fake Grimlock who I definitely encourage you to follow on Twitter if you don’t already:

	FAKEGRIMLOCK (@FAKEGRIMLOCK)
MOST OVERNIGHT SUCCESS TAKE YEARS TO MAKE HAPPEN

Happy entrepreneuring…

TGA's 10 Year Story

The following story was published this week in TGA's newsletter and on our website.  Hope you enjoy.

..........

My name is Steve Tanner and I’ve been with TGA since the company was launched in 2003, hired first as an overnight camp counselor, then as a coach, then as the first full-time employee, and now as COO and one of two equity partners. 

To kick off our 10 year anniversary celebration, I wanted to tell the story of how TGA came to be what it is today through my eyes.  But the story of TGA goes back much further than 10 years, beginning in the early 90s like so many other entrepreneurial journeys with the simple notion of “I wish _____ existed because it would be awesome and I’d be all over it.”

This was the thought Joshua Jacobs had as a teenager growing up in Los Angeles.  Josh was a competitive and accomplished junior golfer – AJGA, college, the whole nine yards.  But he found junior golf to be so SERIOUS.  He went to a variety of overnight camps as a teenager and had a good experience but never did what he was truly passionate about – play golf.  If only there was an overnight golf camp that traveled to great courses but focused first and foremost on making friends and having fun.

After graduating from Emory University, Josh’s early career path took him to New York City where he worked for an AV company and lived in Hoboken, NJ.  It was from his apartment that he watched the atrocity of 9/11 unfold across the Hudson River.  Like all of us, the tragedy made him reflect on what was important.  More than anything, he missed his family back in Los Angeles so he packed his bags and moved home.  

In reflection, all of us involved with TGA hope that the daily impact our organization has on kids and communities across America has become one of the many stars that shines today in the darkness of that time in 2001.

Wondering what to do next with his career, Josh sat down with his family – which includes several generations of accomplished entrepreneurs – and was encouraged to follow his dreams.  With the support and mentorship from his grandfather Lee Warner and father Michael Jacobs, Josh thought back on his idea for an overnight golf camp and decided to take the plunge of trying to create as an adult that which he wished for as a kid. 

Teen Golf Adventures, LLC was incorporated, camps were scheduled for the summer of 2003, a few kids signed up, and the company was officially in business.  That first summer went well all things considered, but as it wore down Josh found himself thinking about how he was going to generate revenue over the next nine months until it was summer again.

The answer came in the form of the after school golf enrichment program that has been the catalyst for bringing TGA to a 10 year anniversary and introducing 225,000 kids to golf and tennis.  But, ironically, it was conceived almost by accident.  One evening in early fall, Josh found his elementary-aged sister reviewing her options for after school enrichment programs for the upcoming school year.  He asked, “is golf an option?” to which she responded, “nope” … and the light bulb turned on.  Golf at schools would solve so many of the problems that keep kids from trying the sport – transportation, information, cost … it just made so much sense.  Josh bought some clubs, put together a curriculum, got six schools in West Los Angeles to agree to offer a program, and off he went.

The program grew quickly, from 6 schools in the fall session of 2003 to 13 in the winter and 18 in the spring season.  Enrollment was great.  Demand grew.  Summer day camps came in 2004, along with a multi-level program and more and more schools.  But it wasn’t for almost two years that anyone understood the magnitude of what Josh had created.  That happened when people started calling the office to ask how they could start the program in their region of the country.

We started by licensing the curriculum and trademarks but quickly learned that we needed to provide business support as well, so we filed our first Uniform Franchise Disclosure Document in 2006 and became a franchisor.  Our market evolved from Los Angeles to the U.S. and now to the international community.  First-of-their-kind training programs, curriculums, student handbooks and software systems were developed.  Golf’s sister sport, tennis, became an opportunity and then a reality.  A 501c3 Not-for-Profit was birthed.  So much has happened in the past 10 years, it’s too long of a story to tell but also too much of a blur to really tell correctly.  But the vision has always remained the same – make golf and tennis accessible for all kids and provide a fun, positive experience that instills a passion for the sport within each student and then provides opportunities for them to pursue that passion.

And this is what gets us so excited about where we’re at and where we’re headed as an organization.  TGA is a family of entrepreneurs and we’re not great at reminiscing or sitting still, so we currently have our foot on the accelerator doing things like:

• Building a management team for the TGA Sports Foundation after receiving a generous grant from a TGA vendor, with the goal being to exponentially increase financial aid and scholarships offered to under-resourced kids.

• Preparing to open new international markets in 2013 while YTD new franchise openings in the U.S. have been double any previous year.

• Securing and activating major industry partnerships that will change the way the company looks when we celebrate our 15 year anniversary.

• Continuing to expand our HQ team, soon to be more than double what it was two years ago, with awesomely talented and passionate individuals like Nate Wright, LeeAnn O’Donnell, Bradley Fontaine and Patrick Yarrow giving everything they have to the organization every day.

We continue to push harder and further because we have a unified vision – the belief that we have successfully pioneered a critically important model that breaks tennis and golf’s traditional barriers, can reasonably be scaled to every school and child in America (and beyond), and is something that has proven to add significant value to our students, parents, schools and partner golf and tennis facilities, as well as the industries and communities we serve.

While ten years is a milestone, we are far from satisfied.  Still, less than 4% of kids in the U.S. play golf and tennis.  That is unacceptable.   And we are doing everything we can to break down the barriers and solve the problems quicker and better than ever before.  Ten years from now when we celebrate our 20 year anniversary, we fully expect to have 10x the impact we’ve had so far.  Please hold us accountable to this goal.

But today, we’re pausing for a moment to celebrate the journey that brought us here as it has been paved by thousands of amazing and dedicated individuals, most importantly our instructors and franchisees.  TGA has reached the point where it is above any individual or team – it is the brainchild and creation of everyone who has contributed in their own way, big or small, to making the organization what it is today – 70 franchises, 225,000 kids empowered, thousands of jobs created, 2,500 schools impacted, and much more.  For that, I speak for everyone at TGA HQ when I say THANK YOU!

I’d like to close by recapping the journey our three favorite letters, TGA, have taken over the past 10 years.  In many ways, their evolution tells the company story on their own:

2003: TGA = Teen Golf Adventures

An overnight golf camp for teenagers.

2004-2006: TGA = Total Golf Adventures

Shift to after school programs for kids primarily 5-10 years old.

2007-2011: TGA = TGA Premier Junior Golf

Making TGA nothing more than an acronym because “Total Golf Adventures” made us sound more like a travel company than a school-based junior golf organization.

2011: TGA = Tennis & Golf Adventures

Marking our expansion into tennis.

2012-Present: TGA = “Teach Grow Achieve”

Coming to a clear understanding of TGA’s identity as a youth enrichment organization that marries athletics with academics, and applying an appropriate meaning to “TGA” that we believe will last for decades worth of anniversaries.

Thank you for listening to my version of the TGA story and offering your continued support to our organization.  Cheers to a great past, a brighter future and always remembering to KEEP SWINGING!  

Show Me the Cash!

I remember the moment well.  I had just reviewed the P&L and things were looking good.  The business was healthy.  Sales were up.  Expenses were down.  Projections were being hit.  Everything was moving in the right direction.  I smiled. 

And then, our Controller walked into my office and said: (numbers fictitious)

“We have a problem.  I have $40k of bills on my desk and payroll is due this week, and we only have $80k in the bank.”

I thought of a phrase I’d heard a thousand times, and at this moment, I finally understood it:

A quick look at the balance sheet showed a monstrous Accounts Receivable number.  Yes, sales were up and expenses were down, as the P&L showed.  But people weren’t paying us on time.  Revenue reported as sales wasn’t showing up as cash in our bank account. 

Thankfully we were at a stage with the company where we could weather the storm.   We have always been diligent about keeping the company debt-free so it’s easy enough for us to get a credit line from a bank or a short-term loan from investors if need be.

However, many early stage companies don’t have this luxury.  Cash in the bank is their life blood.  Run out and you’re done.  You can have a stack of purchase orders and a P&L that makes you feel like a rock star, but without cash you’ve got nothing.  Seems simple enough.  But, in my experience, it’s often overlooked.  And I’ve been guilty myself.

In my situation, cash flow comes from the royalties paid by our franchisees.  We establish our operating budget based on them.  If franchisees are late with their payments to us, we have a problem.  Often, it’s the result of a trickle-down effect – the franchisees’ customers are late in paying them so they’re late in paying us.  The cash flow problem runs downstream.

Which is why I encourage entrepreneurs, franchise candidates and early stage business owners to do two things:

1. Start with more cash than you think – like 2-3x
2. Establish a culture with customers of prepayment or 30 day term maximums (with a sizable down payment) from the outset and be ruthless about enforcing it

We were way too laid back in the beginning about Accounts Receivable.  Our mentality was – “we want our franchisees to know that we have their backs and if that means delaying a payment to help them out, so be it.”  The problem was that the effect was the exact opposite of our intent.  It created debt-ridden franchisees, put the company as a whole at risk, and penalized the franchisees who were paying on time as they didn’t get all the services/products they otherwise would have had we had more money to invest in projects and infrastructure.

We’ve been working for years to turn around this mentality.  But culture is hard to change.  It takes a lot of time and energy.  It’s much better to establish a good one from the outset.  My suggestion for how to do so is threefold:

1) If you’re launching a company, start with as much cash as possible.  Make sure to add a “cash flow” line to your pro forma to see how much you’ll need.  Then double it.

2) If you’re in revenue and signing up customers, get them to pay as much as possible up front and be adamant that they meet your financing terms.

3) And if you’re in the throes of running a small business, give cash flow as much (if not more) attention than sales and income.

Because at the end of the day, cash really is king.  And it’s the type of lesson you don't want to learn the hard way.