Jason Hendren of Hendren Business Advisors: Five Things I Wish Someone Told Me Before I Became A CEO

As a part of our series called ‘Five Things I Wish Someone Told Me Before I Became A CEO’ we had the pleasure of interviewing Jason Hendren.

Jason Hendren (https://hendrenba.com), the author of Things I Wish I Knew Before I Sold To Private Equity, is a sought-after CEO coach, speaker, and exit-planning advisor. He is an award-winning entrepreneur and has extensive expertise as a buyer and seller of businesses. Hendren earned a BSIE and MBA from the University of Central Florida, where he supports first-generation scholarships, entrepreneurship programs, and the football Shareholders Society.

Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

Being a business owner was not the plan. I attended the University of Central Florida and got a degree in industrial engineering, which led me to a career in manufacturing. I really enjoyed building products and automating processes. My specialty was sheet metal fabrication and MRP systems. It soon dawned on me that the professionals who worked in the office seemed to have the nicer cars and didn’t have their hands cut up, which led me to MBA night school.

Soon after finishing my MBA, I was offered the opportunity to lead a start-up in energy- efficient lighting, which I jumped at immediately. It was the opportunity to create real wealth and freedom. After several years, I bought out the investors and the company really began to ramp. I had a large factory with hundreds of employees, and we were selling nationwide. I soon started getting solicited by investors who wanted to buy into my company. I sold the majority of my equity to a private equity group and that’s when the real growth started. We had a real hit on our hands, and after four years, we sold the company to another group after earning a very healthy return. I stayed on with that group for three years and left the company right before the pandemic.

I retired for a few weeks. I was asked by a few friends to help them with their exit processes and found myself with a full docket of clients nearly overnight. I also took the time during the lockdowns to finish my book, Things I Wish I Knew Before I SOLD TO PRIVATE EQUITY. Today, I act as a CEO and exit-planning advisor for several businesses, I speak to CEO groups, and I coach football.

Can you share the most interesting story that happened to you since you began leading your companies?

The most interesting, and pivotal, came in 2008 when my original partners told me they wanted out. They told me that the company I was running was becoming a conflict of interest with another company they owned. My options were I could buy them out or they would find a buyer for their 75% of the company. It was the pit of the financial recession, banks were failing daily, and I was trying to finance a buyout. My wife and I signed over every asset we could come up with to collateralize a loan to get them some cash at closing. It was terrifying but the best thing that ever happened aside from starting the business.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I remember attending our first industry trade show. While our competitors had booths and dozens of people attending, I had me and my only employee. I remember sitting on the floor having lunch with a distributor amongst an overcrowded hall, and thinking we were completely over our heads. What I learned was that people really responded to how genuinely we were trying to build a small, privately-owned company, and if you were humble, and asked for help, people would respond. Over the years we made a lot of friends who supported us as we grew into a significant player in the industry.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

When I was trying to figure out how to buy out those original partners, I was introduced to Mike Skat, a local businessman who specialized in asset-based lending but had a deep wealth of business financing. Mike helped me secure the financing to buy out my original investors. Years later, when I was getting solicited to sell, I again called on my old mentor. He helped me sort out what was going on and helped me source my first deal.

The entire reason I wrote my book was because I am keenly aware of how much I needed Mike to help me sort out those early deals. Without him, I have no idea where I would be. My book is written to share the lessons I learned from Mike so business owners who don’t have a Mike can get some background on the world of M&A.

Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader?

When my company started to grow, we had to decide how we were going to build out my factory. My two options were to lease out new machines or buy old machines.

There were merits to the new equipment. They ran faster, had better automation, and better tooling life. However, I could afford to pay cash for the older machines. We already knew how to run them, fix them, and had an abundant amount of tooling for them. Buying the old equipment was the right choice for us because it kept our balance sheet strong, and not having the higher payments and operating expenses helped us stay steady through slow periods because our monthly expenses were lower.

Ok, thank you for that. Let’s now jump to the primary focus of our interview. Most of our readers — in fact, most people — think they have a pretty good idea of what a CEO or executive does. But in just a few words can you explain what an executive does that is different from the responsibilities of the other leaders?

Simply put, you don’t own the business, the business owns you. It’s like a toddler. If you look away for too long, you are likely to find some trouble.

What are the “myths” that you would like to dispel about being a CEO or executive? Can you explain what you mean?

People see these CEOs at TED Talks or product launches and think being a CEO puts you on a stage with a microphone. It’s nothing like that. There are many more times that you are in your office, late, making really hard decisions. One myth is that you make decisions with excellent information. You rarely have actionable intelligence. A lot of times, you must make decisions based on instinct or on the feedback that you got from one customer who always seems to see how the market is evolving. I had three confidants in the industry who I ran every decision by because they always seemed to keep me in the right space to compete.

What is the most striking difference between your actual job and how you thought the job would be?

The freedom. I thought having my own business and sitting in the CEO seat meant I would have a lot of freedom. If I took liberties, the business would suffer.

Do you think everyone is cut out to be an executive? In your opinion, which specific traits increase the likelihood that a person will be a successful executive and what type of person should avoid aspiring to be an executive? Can you explain what you mean?

I don’t think everyone is cut out to be a CEO. A CEO needs to be a person who either sets a vision and a path to reach a goal, or creates a structure and organization that sets the path and executes. Often times, I see great CEOs who are not industry visionary but they know how to create a process of goal-setting and accountability that allows the team to thrive.

What advice would you give to other business leaders to help create a fantastic work culture? Can you share a story or an example?

One of the biggest issues I see with workplace culture revolves around organizational structure. Small to medium companies have this organic growth and the reporting and responsibility structure becomes muddy. When a business is small, you need generalists. As the business grows, you need more specialists. If you want culture as you grow, make sure everyone knows their role and responsibility and how that intersects with others in the organization. Also, make sure you are giving people feedback. Especially in today’s world of remote workers. People need to know that what they are doing is on the right path. Even if someone is doing a great job, if they get no feedback, they may think they are adrift and not valuable.

How have you used your success to make the world a better place?

Having built and sold a business and transitioned to a part-time worker, there are three things that I have to give: my time, my knowledge, and my wealth.

I volunteer as a football coach. While I have no children of my own, I spend a lot of time around youth football. For three years, I was a coach at a high school where I was the director of football operations. I took care of everything from fundraising to buying equipment to picking up the Gatorade and bananas on game day. I now act as a mentor to a lot of the former players and current coaches as I help them throughout the season. I also coach a sixth-grade flag football team, which is a hoot.

I share my knowledge by volunteering at the UCF College of Business. I speak on their panels and mentor start-up companies. I also wrote my book as a playbook for young entrepreneurs so they can be ready when the calls start coming.

Lastly, I financially support many initiatives. My wife and I have an endowed scholarship at UCF that we give to annually. We also support the legislative scholars and the football team. I also give annually to the Seminole High School football team.

Fantastic. Here is the primary question of our interview. What are your “Five Things I Wish Someone Told Me Before I Became A CEO” and why? (Please share a story or example for each.)

1. If you have to choose between your employees and your customers, choose your employees. I had a customer ripping on my inside sales support person, and when I could see the path that call was taking, I had the call put on hold and I picked up. I told him that if he was going to treat someone like that, he should call me because no one should be treated like that. From that day forward, people knew that I was not going to make someone get harassed to keep a customer. Those are the customer relationships you don’t want most of the time.
2. Don’t beat every nickel out of every deal. In the course of making deals, I would always want my trading partner to be fairly compensated. I would be tough but not try to get every last red cent out. With some of my vendors, when I would ask them to give me a volume price to get a job or compete in an industry, I would share my cost models and show them why I was asking for the requested price. They also knew that if I was shopping them against someone else because I would tell them. That usually created trust when I needed to address a special situation.
3. Things move faster than you think. I was constantly amazed at how quickly industry trends change. I used to think that things would take years to phase in, only to be changing product roadmaps in 45 days. In my industry, when offshore manufacturers started exporting into the US market, the industry flipped in about 60 days. I could not believe how fast the change happened.
4. Build genuine relationships. There is an old saying that all things being equal, you will do business with your friends. When things are unequal, you still do business with your friends. I attribute some of my success to the genuine friends I made who were vendors, customers, and sales agents. If I tried to heavy-hand those relationships, the moment there was an issue they would be ready to take me down a peg. When you have genuine relationships, they will be invested in your success and not want to see you fail. Some of my sales agents would be able to call me up and ask me to take a job at cost to bail them out of a situation, and I would say yes because I was invested in their success like they were invested in mine. Years after leaving the industry, I am proud of how many of those old colleagues are still fishing buddies.
5. Be a student of the game. If you think the game is selling a product for more than you made it for, you are playing checkers and the world is playing chess. When I got started, I knew the manufacturing side inside out. Costing, overhead, bills of material, inventory control, scheduling, the list goes on and on. Being good at the broader game is what helped me get where I am today. Building a brand, managing my balance sheet, watching my income statement, that is where real wealth is created. I think back to my first private equity deal. If I knew how to run my company then the way I know how to run a company now, the outcome would have been even more spectacular!

If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.

I believe that education is the one fundamental factor that can create generational change. I see it all the time within the kids I coach in high school, those kids who get a degree or a vocational education break the cycle of poverty that often runs back for generations. Every time I get the opportunity to see any of my kids, I ask them about their grades and encourage them to finish high school. I take as much time as they will let me talk to them about vocational programs, teaching certificates, and AA degrees at the local community college that are accessible to them that they don’t know about. I know I can’t save all the kids but I can sure help a few.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

This one comes from a mentor and friend, Jack Daly. He told me that life is broken down in quarters. The first quarter, you figure out who you are going to be and what you are going to do. The next quarter you spend building your career, your wealth, and how you will be viewed as a professional. The next quarter, you start to that that next step as a professional as you look to sunset out. The last quarter, you think about how you are going to wind it down.

For me, as I was leaving the business I founded at 48, I had to do some soul- searching about what that next quarter was going to look like. thinking about the person I wanted to be for the next 25 years helped me take that higher-level view to create a vision and start to execute. That has been what has brought me to a CEO and football coaching, mentoring, and speaking. Jack was very instrumental in helping me set that vision.

We are very blessed that some very prominent names in business, VC funding, sports, and entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch with, and why?

This is the hardest question yet. If I had to pick one person it would be Dave Matthews So I can thank him for the countless hours of joy, solitude, and excitement he has given me over the past 25 years. Some of my toughest times are marked by a Dave song or a lyric (Dark clouds may hang over me sometimes, but it’ll work out). Some of the happiest times (You and me together, we can do anything). Insightful (Oh, how I wish I could take it all down into my grave. And we would play Two-Step together.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.

About the Interviewer: Douglas E. Noll, JD, MA was born nearly blind, crippled with club feet, partially deaf, and left-handed. He overcame all of these obstacles to become a successful civil trial lawyer. In 2000, he abandoned his law practice to become a peacemaker. His calling is to serve humanity, and he executes his calling at many levels. He is an award-winning author, teacher, and trainer. He is a highly experienced mediator. Doug’s work carries him from international work to helping people resolve deep interpersonal and ideological conflicts. Doug teaches his innovative de-escalation skill that calms any angry person in 90 seconds or less. With Laurel Kaufer, Doug founded Prison of Peace in 2009. The Prison of Peace project trains life and long terms incarcerated people to be powerful peacemakers and mediators. He has been deeply moved by inmates who have learned and applied deep, empathic listening skills, leadership skills, and problem-solving skills to reduce violence in their prison communities. Their dedication to learning, improving, and serving their communities motivates him to expand the principles of Prison of Peace so that every human wanting to learn the skills of peace may do so. Doug’s awards include California Lawyer Magazine Lawyer of the Year, Best Lawyers in America Lawyer of the Year, Purpose Prize Fellow, International Academy of Mediators Syd Leezak Award of Excellence, National Academy of Distinguished Neutrals Neutral of the Year. His four books have won a number of awards and commendations. Doug’s podcast, Listen With Leaders, is now accepting guests. Click on this link to learn more and apply.