Working On Your Business
I recently spoke to Sean Bandawat, the CEO of Jacob Bromwell, about his entrepreneurial journey and best advice. Founded in 1819, Jacob Bromwell is the oldest housewares company in the United States. Sean acquired the business shortly after graduating from college and has led the company's turnaround.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?
Sean: Thanks for having me, Adam. My entrepreneurial journey started in the second grade! My friend and I had the quintessential neighborhood lemonade stand. I’ll never forget how great it felt to create something from scratch, even though it was just simple, homemade lemonade. I didn’t realize it then, but that experience taught me a lot about sales and marketing, finance and accounting, and operations. And, in the end, we turned a small profit in exchange for the value we created. I think we ended each day with around $50 each. At the time, it was all the money in the world.
Growing up, I was heavily influenced by my father, who was a highly successful lifelong entrepreneur. From a young age, I acquired my entrepreneurial mindset from him, and that really stuck with me. I decided to go to USC not with the goal of graduating with a job offer like almost all of my peers, but to truly immerse myself in the study of business. I was specifically attracted to the Entrepreneur Program, which as you know is one of the best in the country. My experience at the university helped shape my ideas and beliefs about business and helped prepare me for the business world.
My dad was a big believer in what I call “entrepreneurship by acquisition”, and I really wanted to follow in his footsteps. Rather than start a business from scratch, he taught me how to buy a business rather than start one from scratch. Startups are extremely risky Adam. Statistically, 8 out of 10 startups fail in the first 5 years, and 8 out of the 10 that make it to 5 years fail in the next 5 years. To put that into perspective, if there are 1 million new businesses that start in this country every year, 800,000 of them will fail in the first 5 years, and out of the remaining 200,000 that succeed, 80% of those will fail in the next 5 years. So if the first 5 years don't kill you, the next 5 almost certainly will. As a society, we glorify the “startup entrepreneur”, but I don’t think most people fully realize that the odds of success are so heavily stacked against them launching a startup. Being able to circumvent that risk by acquiring a business that already has a track record, even if it’s just a small one, can be very lucrative. I believe in the acquisition model. My father believed in the acquisition model. And I think it’s the entrepreneurial path that’s all too often overlooked.
Anyway, I spent a great deal of time my senior year at USC on the hunt for a business to acquire. After sifting through hundreds of deals, I landed on the perfect opportunity for me. The company was called Bromwell Housewares and at the time it was a 190-year-old business that manufactured and sold American-made kitchenware and bakeware products. We just celebrated our 200th anniversary, which makes it my 10th year involved in the company. These past 10 years I’ve been directly responsible for managing the business and presiding over its growth. It’s been a great journey.
Adam: How did you come up with your business idea? What advice do you have for others on how to come up with great ideas?
Sean: Well, one of the things that always stuck with me from the USC Entrepreneur Program is that ideas don’t matter. What truly matters is execution. As an entrepreneur, you know that as well as I do, Adam. Great execution is what makes a business great. If you think about it, most businesses aren’t great ideas. In fact, many of them are lousy ideas and lousy products. But they’re still in business, and they’re still generating a profit.
I wasn't really looking for a great business idea. I was looking for a business with a small track record but with a clear growth path. When I dug deeper into the opportunity to acquire Bromwell Housewares, it really just checked all the boxes for me. Whereas most potential buyers saw nothing but problems, I saw nothing but opportunities to build on what had been done by the previous owners, with virtually no downside risk. I remember thinking to myself, “Here's a company that's been in business for 190 years, and even with all of its challenges, it still manages to have customers. I think there’s something here.” I knew that I was fresh out of school with very little hands-on experience as an entrepreneur, and I knew that I didn’t have all the answers, but I also knew I could do a better job running the business than was being done at the time.
Adam: How did you know your business idea was worth pursuing? What advice do you have on how to best test a business idea?
Sean: To be honest, I don’t think you ever truly know whether a business idea is worth pursuing until you come into direct contact with customers in the market. Don’t get me wrong, business plans are great and they have their time and place, but they don’t guarantee success.
Due diligence is really the key to knowing whether or not you should pursue a business opportunity. I spent over a year talking to customers, suppliers, employees, and previous management. I did feasibility on the business, and I crafted a business plan to outline my takeover strategy for the business. Simply put, I did my due diligence. It definitely helped me feel prepared and gave me the confidence I needed to press forward.
Adam: What are the key steps you have taken to grow your business? What advice do you have for others on how to take their businesses to the next level?
Sean: There's a book that is very well known in the entrepreneurial community called The E Myth. Every great entrepreneur I know has either read it or heard of it.
One of the big takeaways from the book is to work “on” your business, not “in” your business. I read the book during my early years running Bromwell, and I had an epiphany. I realized just how guilty I was working “in” Bromwell rather than working “on” Bromwell. Understanding that concept is one thing, but implementing it is another. It took me months to “re-wire” my brain to work on my business rather than in it, and it took several years to craft the systems that are now in place. Today, my team and I don’t directly run the business. We run systems, and those systems in turn run the business. That’s the secret to how every major corporation in the world is run, and the same principles of systems-driven-businesses can be applied to any business in any industry of any size.
Once you understand and implement systems in your business, I promise it will forever change your perspective as an entrepreneur. What is an entrepreneur really? An entrepreneur is an inventor of a business that works, which to me means to generate the independence and security you desire to be free. Unfortunately, most small business owners in this country are slaves to their businesses. If they don’t show up to work, the business doesn’t work. That was me those first few years. Once I realized that and once I changed my mindset and way of doing things, everything changed. Once the business was run by systems, it became an automated cash-generating machine, and I was immediately liberated. For anyone aspiring to be an entrepreneur or wanting to become a better entrepreneur, my advice is to read the book and develop the systems necessary to automate your business. I don’t think there is better advice I could impart on an entrepreneur.
Adam: What are your best sales and marketing tips?
Sean: My best marketing advice is to master the art of storytelling. People don’t buy products. People buy stories.
Storytelling enables marketers to develop a deeper connection with their audience. Storytelling is a fundamental human experience that unites people and drives stronger, deeper connections. From the earliest recorded history, storytelling was a method used by cavemen to communicate, educate, share, and connect.
Think about Suburu’s ads, which communicate “love” through a series of ads that establishes the car brand as a symbol of caring for those you love. Whether it’s a father caring for his son or daughter, or a parent caring for their beloved pet, their ads are more about what the brand represents to the family than the horsepower that their cars deliver. By communicating the brand through stories, Suburu is able to elevate the meaning of the brand and better crystalize how it fits into customers’ lives.
Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?
Sean: By definition, a leader is any person who has a follower with a common goal. But that doesn’t make all leaders great. In my opinion, most companies are run by great managers, but lousy leaders. Some of the qualities you need as an effective business leader is a clear vision, strong communication skills, and charisma. Vision and inspiration are extremely important. I think if you can see your business as being apart from you, and you can inspire others to help you build your vision, you can really succeed as a leader.
Adam: What is the single best piece of advice you have ever received?
Sean: As cliché as it may sound, the best piece of advice I’ve ever received is to “never give up”. I can point to numerous moments in my life where that advice rings true, but none more so than with Bromwell. As I mentioned, those first two years of building the business were some of the most challenging years for me: physically, mentally, and emotionally. For years, I was bootstrapping the company, working 80-100 hours a week, and not getting paid. Those years took a toll on my health, and I was very close to just wanting to be done with it. After that second year, the business turned a profit and it’s been profitable ever since. Had I given up on Bromwell, it probably would have been the single greatest financial mistake of my life.
Adam: What are your three best tips applicable to entrepreneurs, executives and civic leaders?
Sean: Tip number one: know your primary aim. I think a lot of people get lost with this one because there's so much “white noise” out there. From an early age, we’re all told what to think and what to do by society, family, friends, and teachers. But once people learn to tune out the rest of the world and look within for what they truly want, chances are they already know what it is. That’s what I mean by knowing your primary aim. This is so crucial, because if you don’t know what you want in life, you’re never going to get it. Next comes the business, because the business exists to give you more life, not take away from it. If you run a business correctly, the business will make it possible for you to live your dream life. I’m talking about the life you truly want and were meant to live, before you got distracted by the life you were told you had to live.
My second tip is to invest in your education. And I’m not talking about school, because most schools don’t educate; they train, which is a key difference. Whether it's reading books, or attending classes, networking events, or simply surrounding yourself with motivated people, I think it’s super important to stay current and educated in your field.
My third tip is to constantly set goals and regularly measure yourself against those goals. Most everyone I know has goals, but very few write them down. Writing down your goals makes them real, and that’s been really helpful for me.
Adam: Is there anything else you would like to share?
Sean: I'm a huge believer in entrepreneurship as a vehicle to reach financial freedom. As an entrepreneur, your #1 goal is to achieve financial freedom, and your business is simply a vehicle to get you there. So your real focus as an entrepreneur then should be to build your business to be a money machine, meaning it’s going to work for you whether you show up to work or not. Sadly, most entrepreneurs don’t get to that point. What they do is create jobs for themselves, and if they stop going to work, their business stops working, which is exactly the opposite of what a business is designed to do in the first place.
My point is simply to remember that a business exists to give you more life, not take away from it. Once you really understand that and you build your business in such a way so that you control it, rather than have it control you, you will have realized the entrepreneurial dream that so few ever get to achieve.