Shut Up and Listen!: Hard Business Truths that Will Help You Succeed

by Tilman Fertitta

I’m Tilman Fertitta. According to the Forbes 400 list, I’m ranked the 153rd richest person in America.

As the sole owner and founder of Fertitta Entertainment, my organization owns and operates restaurants, hotels, amusement parks, and aquariums. You may be familiar with some of my restaurant brands, including Mastro’s, Morton’s The Steakhouse, Rainforest Café, Chart House, Bubba Gump Shrimp Co., Landry’s Seafood House, Saltgrass Steak House, and thirty-five other concepts. In all, I own more than six hundred restaurants. I also own five Golden Nugget casinos and hotels. If that wasn’t enough, I’ve also starred in my own reality show called Billion Dollar Buyer on CNBC.

I also own the NBA’s Houston Rockets.

Be just like me: never, ever stop worrying about your business. Why? Because when it comes to business and most everything else in life, there is a paddle for everybody’s ass.

And you never know when it’s coming or where it’s coming from. I really do believe that. I don’t care if things are going well for you, that you think you know it all. Put this one thing in your head: there is a paddle coming for your ass right now.

By a paddle, I mean that there is always a force out there, something that’s taking square aim at your business’s success and growth. There might be someone with a better product. There might be a lawsuit waiting to pounce. The economy may turn. A bank that you relied on may deny you credit. New government regulations may be ready to take effect. Your computer may be hac...

The best you can hope for when something damaging or disruptive happens is that you act quickly to minimize the impact. But you have to open your eyes. You need to start worrying, anticipating, planning, and being proactive. Why? Because the paddle comes from the blind spots we all have when ...

It is way too easy for complacency and overconfidence to set in, which leads to i...

People ask me all the time: “What do you fear?” I say I don’t fear anything, but I worry about everything.

five sections, each of which talks about a core area that can kill a business if you’re not aware of those blind spots. Here they are, in order:

1. Hospitality (“If They Want Scrambled Eggs . . .”) 2. You’d Better Know Your Numbers 3. The 95:5 Rule: What’s Your “Five”? 4. See the Opportunity, Seize the Opportunity 5. Live Your Leadership

These are the strategies I’ve used—in both good times and bad. As I’ll discuss later, I’ve been through more than my share of days when it seemed like the whole world was falling apart. Having these ideas in mind helped keep me from throwing in the towel when it would have been the easiest thing in the world to do.

The fundamental concepts I’m sharing helped me succeed. In business there are no Oscars, Grammys, or Pro Bowl, but there is the Forbes 400 list, and I’m on it. I believe my ideas and strategies can help you achieve success no matter what sort of business you happen to be in. If you want to make money in business, you need to read this book.

Despite all my success, I walk around every day making sure that the paddle doesn’t get my ass. I can take a few t...

For me, these are all a question of hospitality. And customer service and hospitality are everything, no matter what the business is.

To me, the definition of hospitality is simple. It’s however you handle a customer. Nothing more, nothing less—how you treat him or her, how you respond to what he or she asks for, and your ability (and willingness) to stay flexible. The ultimate goal of interacting with a customer is to make him or her feel like the only customer you have in the entire world. Why? Because as I tell my own employees, there are no spare customers.

It starts with how you talk with them. And you don’t need to memorize any special words or magic sentences. The rule is simple: when talking to a customer, be sure to make the conversation all about them. Let them talk about their needs, what they hope to get out of buying your product or service. If they want to complain, listen. They want to be heard more than anything. Since you’re trying to make them feel like they’re the only customer you have, act like it. When dealing with that one customer, no one or nothing else matters at that moment.

The other reason that rule always stays in place in my businesses is that the customer experience is all that matters. We’re in the hospitality business, so we have to be sure to be hospitable all the time.

More to the point, by building in a what-if strategy, or by being flexible, you’ve made a customer feel special. And that’s the overriding goal of hospitality.

But don’t lose sight of the fact that you’re a businessperson. Bust your rear to make certain that a customer never hears no, but that every action makes business sense as well. You’re in business to make money. A customer wants scrambled eggs. Make them for him but charge for the additional effort. If they want scrambled eggs at 8:00 p.m., charge for them. If a customer wants expedited delivery or something installed at their home, be smart. Know what your costs are and charge them accordingly. Not only will you have a happy customer, you’re also taking care of yourself as a businessperson.

This raises an important point. Nobody’s product is that great. Nobody’s product is so amazing that it stands out completely from everything else. You may have a perfectly good product, but you’re competing against a bunch of other perfectly good products. That’s the reality of business. How you can separate yourself from the competition is through hospitality—attention to customer needs and wants, 24/7. Think about the same two products—one ...

Hospitality is essential to all sorts of businesses. I don’t care if you’re a doctor—you should be a hospitable doctor and have a great bedside manner. If you think about it, ev...

shot. The one who helps you relax, so the shot doesn’t hurt like hell, is the one yo...

Take hospitality personally. When I’m in one of my restaurants, and I see someone get a drink without a napkin, or food that’s not hot or that’s on the wrong plate, it bothers me to my core. I truly look at it as a reflection and a representation of myself. And, if you go into one of my restaurants at eight o’clock at night, there are going to be scrambled eggs there if you want them. I may charge you more, but you’re a happy customer who got what you asked for.

TILMAN’S TARGETS • Make hospitality your goal, no matter what business you’re in. • Hospitality means making a customer feel special. • Keep your promises. Build in what-ifs to help you follow through on your commitments.

Make hospitality the goal for everyone involved in your business. One person who doesn’t show hospitality can ruin an otherwise positive customer experience.

It’s also important to bear in mind that when you wipe the word no out of your customer vocabulary, that doesn’t necessarily mean you have to say an outright yes. Offer alternatives, a sort of “I can’t do that for you, sir, but I can do this.” If a customer likes your product in a particular color that you don’t happen to have, suggest a color close to it. If your restaurant is out of a menu item that a customer orders, offer her a discount to come back the next night, when she can get the food she wants. You’re not telling them no—instead, it’s a qualified yes.

In short, say what you can do, not what you can’t.

That’s an important message to get across. Even if you can’t meet the customer’s exact request, you’re showing a willingness to do something else to keep him or her happy. Again, it’s a matter of choice—you’re choosing to take those extra steps to make someone feel special and valued. Taking the word no out of your vocabulary also encourages you and anyone else with whom you work to think on your feet. In many ways, saying no is the easy way out of a situation. But if you refuse to say no, you often have to come up with some alternatives quickly. That can build a business that’s responsive and flexible in all sorts of ways. (Later, I discuss the importance of thinking on your feet.)

All this may seem very simple, and it is. But you’d be shocked at how many businesses with great products and services inadvertently shoot themselves in the foot by telling customers no in all sorts of ways. However, if you’re aware of it and make a consistent, conscious effort to never tell a customer no, you’re going to see results. You don’t always need to say yes to a customer. But never saying no may be one of the most valuable strategies you can use to help your business break out to the next level.

TILMAN’S TARGETS • Never tell a customer no. • There are no spare customers. • Understand the difference between being unable to do something for a customer and choosing not to do something. • If you can’t say yes, offer alternatives. • Never saying...

A lot of people run their businesses according to how they think it should be done.

To build your business, you want to do what the masses like.

Pay close attention to the feedback you receive. Your customers will be telling you what they do and don’t like, in so many words.

Start with knowing who your competitors are.

When talking with customers, take a minute to ask where else they’ve looked. Ignoring or overlooking a key competitor can be devastating.

Next, see what your competitors are selling and at what price. There are plenty of resources available regarding industry standards that you can refer to. Use them as a guide but not as gospel. By knowing your numbers—such as production costs, labor, and others—you’ll begin to see what, if any, adjustments to those prices you should make to help your business become both more profitable and accessible to the most customers. This is as common a problem as I’ve seen in all sorts of businesses. Entrepreneurs routinely price their products higher than they should if they want to attract a wide range of customers. And that goes for wholesale as well as retail. Wholesalers expect deeply discounted prices by buying in quantity, yet entrepreneurs often ask for prices that are anything but discounts. Sometimes that’s a production issue—decreasing production costs always translates to lower prices—and sometimes an inexperienced entrepreneur hasn’t been exposed to the sorts of discounts that major wholesale buyers can command.

That’s because, particularly for entrepreneurs and small, emerging businesses, you want to sell to the masses, not the classes. Businesses that cater to the masses inevitably end up making more money than those that limit their scope.

TILMAN’S TARGETS • Cater to the masses, not the classes. • Work to make your product appealing to as broad an audience as possible. • Understand your competition. • Know your target audience.

If you ask me why I’ve been successful, I usually break it down into four reasons: 1. I know my numbers. 2. I understand operations. 3. I know the developmental side (i.e., how to grow your business). 4. I change, change, change with the times.

Of those four, knowing your numbers is by far the most important piece of all.

I don’t care how great a product or service you have. If you don’t know your numbers, you’ll go out of business. Don’t let that happen.

How long it takes to make those products is known as the business’s operating cycle—the longer the cycle, the greater the need for cash on hand. Operating cycle also refers to the situation I described earlier: the entrepreneur who makes a sale but has to wait several weeks to be paid. That’s a gap that needs to be filled. Then there’s the sort of business in question. For example, if you have a business that’s cyclical in nature—you have certain busy seasons or have products geared to particular holidays—you’re going to need plenty of working capital. That’s money that will not only see you through leaner portions of the year but also help you gear up as you approach peak seasons.

So, what’s the answer? Every business needs a “revolver,” meaning a revolving line of credit, such as a bridge loan or line of credit, to fill in the gap.

I know exactly what this feels like. When I was starting out, I tried to get my hands on money in every possible way I could—credit cards, you name it. (One thing I didn’t do was reach out to friends for loans. If you want to lose a friend, just ask for a loan. Nothing destroys a friendship faster.)

Start by building up your cash reserves. This is separate from bank financing but is a critical step to ensure you have as much liquidity as possible. It’s important for entrepreneurs to understand that business cycles go up and down. Be prepared for the down cycle. During down cycles, use

your cash to expand your business. But during boom cycles, save cash for the next downturn.

Out of nowhere, on May 29, 2013,

and I had to get

that because I had accumulated