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Tim McHugh: Helping At-Risk Learners Achieve Success In The 21st Century



YEC Member Spotlight: Tim McHugh, Co-Owner, Saddleback Educational Publishing, Inc.

Tim McHugh is the co-owner and VP of Sales/Marketing at Saddleback Educational Publishing. Saddleback is the leader in hi-lo (high-interest, low-readability) curriculum solutions and quality fiction for struggling and at-risk learners in grades 5 to 12. We strive to create relevant and engaging materials that will actively involve and immerse students at reading levels where they can achieve success in the 21st century.


Who is your hero?

I’m not sure I have a hero. I look for stories and people I can learn from. I don’t want to look up in awe at Warren Buffett, Bono, Sergey Brin, etc. Instead, I want to learn what makes them tick. I want to learn about their mistakes. What did Warren Buffett do wrong and how did that affect him and his future choices?


My kids have a saying at their school: Mistakes are our friends. Yes, I’m applying first-grade logic our business. But seriously, I enjoy hearing about mistakes so that I don’t make the same ones.


I really love reading about entrepreneurs, where they came from, and how they built their brand and/or company. The rap artist 50 Cent made more money on his stake in Vitamin Water ($200M) than he has on music sales. It’s been reported that he has a net worth of 10 times his mentor, Eminem. He was shot nine times and left for dead. What can I learn from 50 Cent? Well he was shot, dropped from his record label, and grew up in a rough part of town with very little family support. And he has “made it.” What’s my excuse?


What’s the single best piece of business advice that helped shape who you are as an entrepreneur today, and why?

I was talking to an entrepreneur friend of mine about companies cutting costs in bad times and becoming more efficient. He said, “Tim, there are only so many expenses you can cut. At some point you have to grow sales.” I know it sounds like common sense, but I see many companies that are in reactionary mode and have been scared by the bad economy over the past few years. They are worried about cutting costs rather than attacking their market and trying to take competitors’ market share. You can only cut expenses so much. You have to grow sales/revenue to survive.


Another important lesson I learned as an Army Officer is to look at the best/worst/most likely scenario of every outcome. Be honest with yourself — what is a realistic expectation of first year sales on a new product? How long will it take for these sales to come in? When will customers who are on net 30 terms actually pay their bills (probably around 40 days)? I try to look at decisions in those three categories/brackets so there are no surprises.


What’s the biggest mistake you ever made in your business, and what did you learn from it that others can learn from too?

We created a product line that was a bit ahead of its time. We spent a substantial amount of money on the product and it simply didn’t have a market yet. What did I learn? To use a baseball analogy, we usually “hit singles” all day long. We produce products that have low risk and low-to-medium return. They are pretty straightforward and rarely fail — but have limited upside.


Occasionally we hit a double and rarely a triple. But we don’t ever strike out. I would say our failed product line was a walk. It wasn’t a strike out — we still made our investment back but it took longer than expected. We got to first base but it took longer than it should have and we were ahead of our time. Did it kill us? No, but we should have known better.


You don’t always have to be first in the market. In fact, we try not to be first in a market. It’s often better to understand what else is happening in the market and do it better than somebody else. Let somebody else take the majority of the risk. Again, we want to hit singles!


What do you do during the first hour of your business day and why?

I’m on the West Coast, and much of our business is East Coast-based. So when I stare at my phone at 5:45 a.m. as I get ready to shower, I’m already trying to tackle the problems/questions that require quick replies. It’s kind of a triage method — fix what can be fixed quickly and move on. I really pride myself on staying in close communication with our customers. I don’t want an email/contact to go unanswered for more than a few hours, much less a day. Some companies take too long to respond or get involved, and miss out. I want to make sure I’m involved and working with my customers and wholesalers so that my product has the best exposure possible.


What’s your best financial or cash-flow related tip for entrepreneurs just getting started?

We are a second-generation family company, which we bought in January 2009. The Bernie Madoff scandal broke in December 2008 and no banks were willing to provide loans at that time. Talking to banks back then was really demoralizing. I pretty much view banks as a necessary evil. If anything, they get in the way.


Today, we operate our business as though loans do not exist. We don’t want another loan ever again. I remember a friend who was talking about his failed company said, “If only we would have taken one more loan we would have been fine.” Running a company based on the theory of getting loans or investors is crazy to me. Yes, some tech companies need VC money and others need investors to mitigate risk, but I truly believe the best small and medium-sized companies should have their skin in the game.


Losing somebody else’s money is easy. When it’s your own money, you manage cash flow much differently.



Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

  • Show up. Eighty percent of the game is just showing up. Are you scared to make the cold call to a prospective customer, partner, or investor? Here’s a little secret — it’s uncomfortable for 99 percent of people. But if you don’t make the call, you are not going to get anywhere. If you don’t do it, you haven’t really shown up at all.
  • Be on time. Nothing angers me more than people showing up late for meetings without a good reason. It is so disrespectful. I have two small children, a wife and a company with 18 employees. Almost every minute of my day is accounted for. So if you show up 10 minutes late to meet with me, I can assure you that the likelihood of me buying what you are selling has dropped exponentially. When I’m meeting with customers or partners, I show up at least 20 minutes early. I stay outside, check email, check my notes and get ready for the meeting. I then walk in five minutes before the meeting and check in with the receptionist. Being early is being on time.
  • Be prepared. If you show up to a meeting and you don’t know the background on your customer’s company, their history, and/or their personal history, you are just lazy. Almost everybody is on LinkedIn, and you can learn so much about people by simply spending the time to do a couple of minutes of research.


If you follow these steps, you are doing better than 90 percent of your competitors. The best product and idea doesn’t always win out. It’s those that are willing to put that extra effort in that makes the difference.


What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

It changes every day. But for the most part, we look at how our products are helping people learn to read.


We publish books for struggling readers. We design content for older students, written at lower reading levels. We also publish original fiction, graphic novels, abridged classics, life skills books non-fiction, etc.


Last April I met a teacher at an inner city middle school for girls in New York City.  She had three 13-year-old students who had never finished a book. I asked her what the kids like, who they are, and their background. I then picked out three different books for the specific students. About a month later the teacher emailed me that they had all finished the books. Not only had they each read their first book, they shared them with the other students. They were each so excited about their books that they were pushing them on their friends and continued to read. These are the types of emails that we live for in our company.


That all being said, our products must turn a profit or we won’t be in business for long. We can look at our selves in the mirror every morning and know that we are doing something good. My wife and absolutely I love what we do — I’d say that’s our definition of success.



Originally published by StartupCollective.


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Author : Young Entrepreneur Council

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

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