Recipe for Success
By Michelle Collins | October 31, 2002
Success has seemed to follow Peter Beck ever since he arrived in Canada on a cold December day in 1979. Trained as a chef, he and a partner opened a small café. Within a year the business was sold and Beck had his first profit from selling a business that he had built. From there he would go on to try out as many as 20 business ventures.
Among his more interesting failures were a pet food delivery service, and selling bottled water from Niagara Falls. Then one day in 1988, Beck had an idea that worked. He would start Canada's first legally operating long-distance company, the ITN Corporation. When he sold the business five years later, the ITN Corporation was taking in $30 million in revenues and had offices set up across the country.
When he steps back Beck feels that his many failures were just as valuable as his eventual success. "I'm a firm believer that the road to success is paved with failures because you can learn a lot from a failure, actually you learn more from a failure than a success. With success you don't really learn the most important things, like how to handle problems."
So, just what does it take to start, grow, and sell a successful business? The one-time professional chef boils it down to three key ingredients: timing, low start-up costs, and execution. Of course, a little dash of luck doesn't hurt either.
Timing"First and foremost you have to make sure that your idea has a market. If there is no market for your idea then no matter how good it is it might not work," says Beck.
This means market research. Beck attributes some of his failures to not investigating the potential market well enough. While some ideas may seem excellent at the time, history has a way of proving you wrong, he says. This applies both to brand new ideas or innovations on current products. A new mop may seem like a good idea. But if no one is interested in buying it because the old one works just fine, then it really isn't.
When it came to starting his latest business, SwiftTrade Securities, Beck's market research was kept quite simple. After reading an article about a successful electronic day trading company in the U.S., he wondered if Canada had anything similar. If such a business could do well in the States, then there was no reason why it couldn't do just as well in Canada. After surveying the Canadian market place and finding no such company he knew that this was an idea that would work.
MoneyThe second layer in building business success, according to Beck, is keeping those initial costs as low as possible. It is perhaps these low costs that have allowed him to try out so many different ideas.
"I always believed that a business should be started up on a shoe string with very little money invested. The worst case scenario is that you lost your time, but you will always learn something. Bottling the water in Niagara Falls, or starting a pet food delivery service may not have been very good ideas at the time, but they required practically no investment."
Now, the technology needed to start SwiftTrade Securities required more than a couple of hundred dollars, not to mention the time spent getting the right licensing from several provinces and U.S. organizations. However, frugality was a factor in this business start-up as well.
Beck was living in France where he had "retired" after the sale of the long-distance company when he came up with the idea for SwiftTrade Securities. After finding out that the costs and red-tape involved in starting a business in France were much higher than in Canada, he made the decision to return to Toronto.
ExecutionThe last ingredient in the success recipe is the execution of the idea. It is this layer that can, as Beck puts it, make or break a business. Having experience in this area certainly helps, says Beck.
"The implementation is where experience comes in, because someone with more experience can implement an idea much better than someone with no experience. That doesn't mean that someone with no experience can't do it. There are lots of people who did their first start-up and turned out successful."
It is this past experience that allowed Beck to deal with one of his greatest challenges since starting SwiftTrade. When the decimation of the U.S. stock market drove customers away, it was time to develop and implement a new strategy. Beck managed to navigate the challenges by training employees to trade the company's money.
SellingBeck also knows what it's like to get a taste of the sweetness that comes when someone offers to buy your company. When he sold the ITN Corporation in 1993, Bell Canada was about to lose its monopoly as the long-distance market opened up to competition. Looking down the road Beck realized that his best option was to get out of the business while he still could.
"I sold it because I felt there was no other way out. At that time the telecommunications industry was set to go through a major consolidation. Financially, I didn't feel that the organization was able to go through that consolidation and come out on top. At that point when you realize that, you just get the best deal and get out. Otherwise you're going to get out without the deal."