Book Review: Les Schwab Pride in Performance

Les Schwab is a tire store chain in the Northwest. My parents bought their tires from Les Schwab and we still use them in Utah.

The book was published in 1985. I first read it in 2005 when a clerk at Les Schwab gave me a copy. I have read the book no less than three times. It has helped me formulate my own business philosophy.

Overall the book is dis-jointed, flipping from one scene to the next like a quilt of various ideas mixed with memoirs. I find that format very engaging and easy to pay attention to. This has the advantage of keeping each scene compartmentalized. If I wrote a book, I would definitely do it this way.

Les Schwab is a cantankerous and dedicated cowboy type who grew up poor and busted his hump all his life to get where he is. A self-made man.

During my third reading I kept seeing elements from Leave Us Alone, a book I have reviewed on a previous occasion.

Here are a few quotes with perhaps an occasional comment of my own:

I've often said that sometimes, guts pays off more than brains...

[About permits] In that way it doesn't cost the city anything; the builders are paying it. The bureaucracy builds larger and larger. It makes a person feel he is committing a crime to build a new building to to remodel an old building. It was up to me personally I would never build another building. I just can't put up with this, and it upsets me terribly; but that's not fair to the young people. Our company thrives on opportunity... The bureaucrats live on this... the entrepreneur, the many who is ambitious. In my mind they are a bunch of bloodsuckers living off those who are doers.

The flaw here is they [the competition] didn’t get, with the low pay, near the quality of employees we had… After thinking about this [the low overhead of the competition] for a year or so, wondering if I shouldn’t cut wages and benefits, I finally made this decision… If I couldn’t be proud of my company, if I couldn’t pay good wages, if I couldn’t have good benefits, if I couldn’t have the best employees, then why would I even want to stay in business, as I had all the money I wanted personally. So we did nothing, and we won. The customer likes us best. Life is hard… for the man who thinks he can take a short cut. –p103

BTP is still in the formative stages. I very much want to offer benefits. That will come in time. I found if you hire a person on for basement wages, you are likely to get someone who will take twice as long to get the job done. This is certainly true of teenagers. Nowadays, I only hire them for altruistic reasons, if I can spare the money. I have had much, much better success offering a better wage (I figured this out in early 2008) for someone who will get the job done in a reasonable amount of time.

Here’s the math: Hire an inexperienced person for $8 an hour who will take twice as long to get the job done (i.e. a real cost of $16 per hour), or hire an experienced professional to get the job done for $12 an hour. At least that’s the general idea. Scale accordingly for the cost of living in your area (in the SF Bay, you can’t get someone to spit on your shoes for less than $15 an hour, but your apartment is $1500 a month; in Utah Valley a single guy can live comfortably on $1500 a month for everything).

I wish I could do more for my artists. Things are steadily improving at my little tugboat of a company. I think things will be vastly improved (even more!) in 3-6 more years.

I could come out with an astronomical bundle of money if I sold the company, but what would I do with it? What good is money beyond a certain point? I think the biggest misconception the public has about a successful businessman is he is working for more money. You won’t find many truly successful ones that are greedy. Success in my mind comes from having a successful business, one that is a good place to work, one that offers opportunity for people and one that you can be proud to own or be associated with.

Success in life is being a good husband, a good father and you end up being a second father to hundreds of other men and women. –p108

I have attended the weddings of at least two former workers. I am excited to hear about weddings or pregnancies on the staff. I hope to create an opening to win the bread for these new families.

This is an idea I call “limited voraciousness”. I have finite goals involving money in my life. Everything else is plowed under into the business for security and opportunity of those that work there.

[What makes a man bust his hump?] It’s not a big thick policy book, it’s not a lot of supervisors, as we don’t have them; it’s something that our programs created in him right in his heart. That is opportunity, the right to be successful, to be a good family man and hold his head high. –p109

You can have a contract 100 pages long and it doesn’t mean a thing. The men making the deal is what counts, and a handshake deal with Pleas Brown [a tire dealer in eastern Oregon] is better than a long contract with most any man. –p114

Within one year we tripled the business that they [the competition] were doing, even though we sold the same tires at a slightly higher price. Which proved that people don’t buy tires on price, they buy from someone they trust and from someone who will smile, and from someone who will give service and stand behind what they sell. –p122

This explains how BTP is still in business, something that I marvel at. I have put honest mental and physical effort into keeping my clients happy. I’m in it for the long haul. You get to see my face and know my name and be part of my family. This extends to the dedicated artists here. They really do put their heart into their work.

We were building a strong a solid company. We were free of debt; everything was paid for, including the ground under our stores, and all buildings. We were on top of the world. –p123

This is my ultimate dream: to own a studio. Above ground with windows!

I haven’t been able to understand for a long time why the juries award the tremendously large settlements that they make. A few years back, Sears was sued by a man who had a blow out, wrecked his car, a killed his wife. The tire had 52,000 miles on it. The jury awarded him 27 million. If the tire had 52,000 miles on it, think of the millions of revolutions this tire had made, the many, many times it had hit rocks, chuckholes, etc. How in the world could this possibly be the fault of the tire? But when juries make these kinds of awards, liability insurance goes crazy. –p136

[This next portion would require me to type a whole chapter, it talks about the use of personal property and how the bureaucracy is making it impossible for the common man to build his own home and forcing people to “live in a box what a shame”.] I’ve also seen on TV big housing developments built by the government… where many of these being torn down. Why? Because they became filthy, crime infected. People would pee out the windows, throw garbage out the windows, and crap in the hallways. People who own and build their own homes don’t pee out the window or crap on the floor. What a shame it is that we are putting so many restrictions on owning private land and not allowing use of the land as we see fit! It is not good for America; it’s such a shame to see this trend getting even stronger every year. I hope and pray that someday soon and I mean really soon, people will rebel and get down to common sense. If they don’t we will soon have socialism, and communism follows. –p138

I guess with businesses didn’t fail; we would be ass deep in businessmen. There isn’t any better regulator of business than the law of supply and demand. That’s why it is so foolish for the government to be interfering so much in the building of cars, all types of manufacturing, and in the tire business. Today, on the sidewall of the tire, there is molded so man government requirement that cost a lot of money, both to the factory and to the customer. And it doesn’t mean a damn; nobody reads it and no one pays any attention to it. It goes back to the business who sells the tires, he is the one who puts out a quality product, stands behind it, has good employees, and gives good service. –p156

Listen carefully: every time you hear of a huge settlement or some new asinine regulation on business, remember that it is YOU that is paying for it. Businesses don’t “eat it”. Ever. They get their profit or they wouldn’t be in business. It is YOU the consumer that pays. I suspect that for every $100 you spend at the store, about $15 goes indirectly to bureaucrats (regulation/taxes) and lawyers. The cost is ultimately spread around. We’d all be better off if most of them (perhaps not all) were to drop off the face of the earth.

I hope my daughter doesn’t marry an accountant or a lawyer or a government-type. I hope she marries a man who actually produces something or provides a service, like a painter, a mechanic, or construction worker. I pray she doesn’t marry a parasite because I won’t be able to stand him at the family reunion. Yeah, you heard me.

Of course, I’ll play nice if it’s a matter of family. But I’ll sure be thinking it!

There’s something wrong about a laborer having to work two full working days to pay for an hour’s wage of a lawyer.

I realize I may offend some readers (or clients!) here. I guess that’s what I get for speaking my mind.

Socialism isn’t forced upon people. People vote themselves into socialism. People vote for the man who offers the benefits, not realizing that they and their children will some day have to pay the bill… Well, true democracy is sometime cruel, people get hurt, they go bankrupt, and they lose their jobs. People in our company can sometimes get hurt. It breaks my heart to see a manager drop off the tree. I know it hurts. But, like a true democracy, we offer opportunity. I’ve said over the years that there is an association between opportunity and risk. The point being that we must earn our way every day. And those not earning their way must have the limb sawed off the tree, as cruel as that may sound. –p171

How can you make people feel important? The best way to start is to believe that they are important. Really believe it! Really want to make each man under you successful, and you’ve got to believe it in your heart. –p173

Business is the backbone of America. The gross profits of business start everything going. All taxes, all wages, all new factories, all charity… everything starts with the gross profits of business. Corporations have their faults but what is the alternative? In spite of their faults, I’ll take the American large corporation over the other any day. –p205

There’s no such thing as getting something for nothing. No such thing as a free lunch.

… If one man is dragging his rear, the other men will let him know. And this man has to be dropped; he eliminated himself. You don’t have to get mad at him, you don’t have to abuse him, just part ways and be friends. A lot of people don’t want to work that hard; that’s okay that’s their right. But we don’t want them on our payroll. It’s not fair to the other employees. And as hard as it is sometimes, we must remember that ten years of employment does not guarantee a lifetime job. That only works at places that don’t have to meet the competition. –p217

Like in a government office.

I suppose the reason for the heavy estate taxes is to keep a few families from owning the country. However, many businesses have to be sold, many large family ranches have to be sold, just to settle the estate tax problem. –p219

America is such a great country. We owe so much to so many for the inheritance we receive. The entrepreneur, the independent businessman, must fight hard to earn his success. I truly believe there is a strong relationship between the success of our country and the success of the small businessman. In this day of the left wing movement I hope we aren’t destroyed by the “do gooder” movement. If we are, God help America, as it will never be the same thereafter. –p229

I definitely see where I can improve my own business. I have to remember that the author of this book had run his company for about 35 years when the book was written. My company is still a baby at 4.5 years. I think I could do a lot better.

1 Comment:

Dennny said...

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