Living the Entrepreneurial Dream

We are going to a place called Sitka, which is in Alaska, just outside Seattle, and we're going to talk about living the dream. My guest today has been an entrepreneur for over 40 years. She is a very successful entrepreneur, also a mother of two amazing children, and she has also managed to rebuild and reinvent herself after she's exited a business where she charted over 30,000 seats from Alaska to Hawaii every year. Who knew so many people went from Hawaii to Alaska every year? Ral West is going to explain all of this and more, including how you can run the business of your dreams and live your life at the same time. Ral West joining me from Sitka. Welcome to the show.

Thank you, Jim James James. It's a pleasure to be here.

Well, it's a pleasure to hear your story, and it's an amazing story that you've got, Ralph. So why don't you tell us a little bit about that business that you built in Alaska that you then sold to Alaskan Airlines? Let's start there, and then we can move forward onto the businesses that you've built after that and some of the lessons that we can learn as entrepreneurs about building businesses that we love and living the life that we love at the same time.

Sounds great. Well, the business that we started in Anchorage, Alaska, uh, back in 1982 was, uh, started just on a shoestring. And we started with just representing owners of condos in Hawaii. And then it was like, no, well, we still have to get the people to Hawaii from Alaska. And then we needed to add the rental cars and, and accommodations and all of this. So it became the this big company, we grew it from, as like I said, just from nothing to a company that did over 8 digits a year in annual revenue. And we did that by, we had to bite the bullet and take a huge risk and chartered entire wide-body jets where we paid for the whole plane, all 200, 300, whatever seats there were on the plane. And we paid the same amount whether we sold 1 seat or all of them. So it was a huge risk. And at times we totally bet the farm on this venture and luckily it paid off. Now we certainly had our times of crisis when like, oh my God, what, what are we doing? But you know what? It was something that we believed in. We believed that the people of Alaska needed to be able to get to the sun, sand, and surf of Hawaii. And it was, it was almost like a public service, but But we didn't want to be a nonprofit. So along the way, we learned that being the mom and pop running this business was not sustainable. We were exhausted. We were overwhelmed. I was, you know, as you said, a mother of two and I had volunteer activities and whatnot. And, you know, you just can't do that. You know, sleep becomes a luxury. The relationship with the spouse, you know, not Not so great. The relationship with my body, not so great. You know, never had time to exercise or eat right or anything. So I had to learn how to get out of that rut and how to not be owned by the business. So I started studying and I went back to college and I found a book, The E-Myth by Michael Gerber. And I started figuring out that there were things like systems. That I could put into place and I could use leverage and I could learn how to delegate properly to the members of my team. I could build the team. I could purposely craft a company culture that embodied all of the values and the principles that we held dear. And we established data measurements, performance tracking. We tracked everything. We had reports, you know, daily reports, weekly reports, monthly reports. So that we could guide the company and steer it, you know, it's called data-based management. And customer service was integral to our success because if we didn't delight our customers, we wouldn't get the repeat business and those planes would not be filled. You know, the population in Alaska is not that big. So you have to keep the same people going to Hawaii over and over and over again. So we developed what we called the Valuable final product. And our VFP was a tan, happy passenger getting off the plane when they returned to Anchorage and ready to turn around and go back to Hawaii again with Hawaiian Vacations, which was the name of our company. So this was, you know, the art of crafting a company that delivered positive experiences to people that was something that we enjoyed and had a passion for. This was It was wonderful, a fabulous experience, and we learned so much. And looking back, I pulled 6 principles that were really the keys to our success. And as I mentioned, systems was one of them. If we didn't have the systems and even to an automated reservation system, you know, but, but before we spent the money on that, there were just systems and processes and we, we would document everybody's job description and this is how you take a reservation and this is how we do this. you know, report to the airline and so on and so forth. Everything was documented. We had manuals coming out our eyeballs. And we made sure that we, again, were tracking the data. We made sure that we were using leverage however we could, you know, advertising, automated systems, all of that gives you leverage. Pulling in outside expertise. We leveraged ourselves by getting an outside board of directors to advise us. There were 3 very prominent business people in Alaska that we chose as our our A-team, and thankfully they all said yes. And we would meet with them 2 or 3 times a year and get their advice and their guidance and their counsel. And that was invaluable. That was fabulous leverage for us. And they were part of our team. So I mentioned before, building that team, crafting the culture, focusing on customer service. When we first started chartering the jets, I have to admit, we didn't have a great customer service reputation. At that particular time. We'd been in business maybe, you know, 10 years or so. And, you know, there were people that were kind of, you know, not that pleased. So we realized if we were going to make this and, you know, take this huge risk, we had to turn that around and we had to focus on delighting our customers. So we developed systems around that and data tracking around customer service. And so you put all of these 6 pieces together. I like to call it the 6-legged stool. And, or somebody said, yeah, it's actually like a bench. But anyway, if one of those legs is off or not working properly, you're going to be wobbly. And I believe that any business doesn't matter whether you're in tourism or the later businesses that we pivoted to, like owning and leasing cruise ships or now multifamily real estate. It's all the same. These 6 principles work in any business, in any industry. And you have to, as an entrepreneur, you have to make sure that you're deploying all of these principles and that you work them constantly and that you craft the business that you can be proud of and that you can pour your heart and soul into. But that you can walk away from because all these systems in your team are running things so smoothly. You can monitor it through your reports and you can go have the life that you really want, however you define that.

Well, Ral, just a couple of things just to define that. When you say we, you're talking about you and your husband, I think, is that right?

Your partner.

You probably should get a name check in there somewhere. I don't want to lead to any divorce proceedings.

He actually started the business and I had my own business at the same time. But it didn't take long before we were working together in this business.

I've worked with my wife and she's out of earshot, so I can say that it was not the easiest of experiences. We were in China and she's, she's from Shanghai and extremely intelligent and brilliant, uh, a brilliant, uh, entrepreneur. And obviously I was not as good as she was, but, um, it, it represents some unique challenges. Can you just tell us a bit of guidance for anyone else that's either working with their partner or thinking about it, Raul. Guidance on being a business partner with your spouse. Well, how do you make that work?

Yeah, a sense of humor is number one. And remembering that you can agree to disagree. But I think, I think that really the key to it is that we each sort of carved out our niche in the business, if you will. This is my track, this is your track, and you stay out of my corral, I'll stay out of yours. Okay. And obviously there were times that we disagreed, but we would work it out and hopefully not in front of our team.

Well, okay, that's great. But I think that really key that you've agreed to to have a separation of, of roles, right? Separate but equal, and that you respect each other and the decisions that you take as, as business people when you're at work. And then obviously you come home and have your husband do the washing up and, and all the housework, just like it was in my house. But, well, I, I will ask you this question, um, about leasing large planes and then boats. We don't necessarily have to go into the mechanics necessarily, but what I am interested in is how you dealt with that risk because you are taking a large risk, you know, booking a 200, 300-seat plane or a boat that's even bigger than that. How did you deal with the risk that came with, you'd need to book in advance, presumably. Oh yeah. And pay money down. Probably before you've got enough commitment from potential customers. So I'd love to hear the mechanics and the psychology of tackling that level of risk.

Yeah, that was huge. Having the right mindset is absolutely essential. And obviously I mentioned before that this business was a passion. I mean, we believed in it and we believed there was a need for this service. So we could get behind the idea, heart and soul. That's probably number one. Number two is that we did our homework. We had spreadsheets galore with analyzing the business that we had been doing. We knew how many people we were sending to Hawaii because before we started chartering the jets, we were buying seats on scheduled airlines. And so we didn't have to guarantee the whole plane. We could buy 100, 200 seats, you know, and that was fine. So we had a bit of that experience before we bit the bullet and chartered the whole plane. And the reason we did was because the airlines pulled out of our market. They just stopped flying between Alaska and Hawaii. So for a year or two, our business was practically dead. We kept it on life support and at times used our credit cards to take cash advances to make payroll. That was, you know, really, really testing our mettle, if you will. And we had some real soul-searching conversations about, you know, should we just shut the doors? Because we don't have the air service. We don't owe anybody any money. We had started this from scratch. We could, you know, close the doors and walk away. But that was where the dedication to our passion came in. And we said, no, we have to find a way to do this. And so my husband found a plane where there were some, what, what was called back hours. It was being used in another market, like from Alaska to Japan. And there were enough hours that it wasn't being used that we could do a round trip between Honolulu and Anchorage. And so we coordinated and negotiated the charter deal for that, but they wanted a letter of credit to guarantee because we had to guarantee the whole charter because we chartered for several months and we didn't have the money. At that time, because we'd already been kind of, you know, using our credit cards to make payroll. So, um, my family wasn't in a position to help us. And we turned to John's mom and she was a schoolteacher and she had a retirement account and she was willing to put up her retirement account as the collateral to secure the letter of credit. Well, if that isn't motivation to make sure that you succeed, I don't know what is. So my husband's a fantastic salesperson and he, you know, beat the streets and made sure that we sold every seat so that his mother's retirement account was not in jeopardy. And, you know, we just, we did it. You just bite the bullet and you go for it. And, you know, if we didn't have confidence, if we hadn't run the numbers, if we didn't know that the market was there and that, you know, people would pay, for this service, then it wouldn't have been a good gamble. But we felt it was a calculated risk. And therefore we did it. And then we went on from there to take bigger and bigger risks. And there was one time he was signing, you know, the charter contract. It was a multimillion-dollar contract and they wanted us to guarantee it. And he says, oh my God, you know, we don't have this much money. And I said, well, don't worry about it. They can't take it from us if we don't have it.

And presumably his mother's pension account was already maxed out. And so she was We'd gotten beyond that.

We weren't going to borrow from her again. So that worked out well. But, you know, again, I'll repeat myself on the mindset. You have to have confidence and, you know, make sure that you've done your homework and then just be willing to go for it. And I think an entrepreneur who's not willing to take a risk is maybe not so much of an entrepreneur because there is risk involved.

So yeah, that's a great story. I love a, the mechanics of, of what you needed to do, but also that you did have a calculated risk, but then you had to have the courage and the strength of your convictions to, to go ahead and make that chart. And that's often, as you say, where people might, you're on the side of caution and, and, and probably live with the regret that they didn't do it, which you and your husband then managed to sell the business to Alaska Airlines later on. Yes. And let's move on to that because you managed to sell that business. Um, it could have retired. Presumably you could have then been enjoying the cruise ship lifestyle that you'd been helping other people to have. Why did you not then say, well, we've had some stress, we've put our, you know, in-laws in potential jeopardy, let's enjoy the fruits of our, of our good work and just retire? So Railwest I'm interested in what kept you going after what could have been a fairly glorious retirement option.

I think we are opportunistic people. And at the time that we sold the business, which was almost, gosh, 17 years ago, I guess, we felt we were too young to just, you know, hang it up. So, we've, we actually stumbled on this opportunity to buy some small cruise ships that were bank-owned, meaning that their owners had gone bankrupt. So, you know, the bank that had the loans took them back and they were sitting at a dock in Seattle and basically rotting at the dock because they, they weren't being maintained very well. And we heard about this through our connections in the Alaska tourism industry. My family, was based in Alaska tourism and my family had had cruise ships and so forth. And so we were lucky to have heard about these ships. So we approached the bank and said, you know, what do you want for these ships? And we struck a deal with the bank and we hired divers to do the due diligence. You have to go measure the hulls and make sure that, you know, everything is right with the ships. We came back from the due diligence and spent, you know, mid-five digits on just the due diligence and went to the bank and said, you know, these hulls are not good enough. They're not going to pass the Coast Guard standard. We have to add more steel to these hulls and it's going to cost this much. And so we need to adjust the price by that much. And the bank said no. So we said, fine, enjoy holding onto these boats as long as you want. So we walked away and that was before we, Well, yeah, no, that, that, so we walked away. Yes, it was before we closed the doors and sold the business to Alaska Airlines because we were thinking, oh, we have this staff and we have the infrastructure, computerized reservation system and so forth. We could just segue from air travel to cruise ships and use all of our systems and team and everything to sell cruises. So we thought that was a great idea. We didn't have to close up Kim entirely. But when the bank said no, oh well, okay. So we closed everything down. And then about a year later, another bank owned those ships because the bank that said no went under, go figure. And so another bank had these assets that were then distressed assets. And they called my husband and said, do you still want those ships? He said, well, No, you know, that ship has sailed. And, uh, and they said, well, these are going out the door on Friday. We're going to, you know, auction them off and the highest bidder is going to, going to walk away with them. So we're like, oh geez, you know, now what do we do? Well, we went in with an offer that Friday and it was a very lowball offer, like 18 cents on the dollar compared to what we would have paid a couple of years before. And he won the bid. So now we had two little cruise ships that needed a lot of work. So we had to pour, you know, quite a bit of money into fixing them up and making them ready for passengers. And then we've, since we no longer had the infrastructure, we found somebody who had a small cruise line operation and we said, would you like to run these ships for us and just add them to your fleet? And we worked out a charter agreement. So We bought the ships, we put the money into fixing them up. The other company did all the work and all the heavy lifting, and that was great. And then another year later, another cruise line went bankrupt, and we were able to buy, uh, 3 more ships out of bankruptcy. And we now had a fleet of 5 ships. And the same cruise operator said, yeah, we'll take on 3 more ships. And again, we poured money into you know, bringing them up to standard. And we operated 5 little ships. Well, we didn't operate them. We just owned them and just, you know, collected the lease money every month. And so that, that went on very nicely. And gradually we sold the ships one by one to the, to the operator because, you know, they wanted them on their balance sheet and that was fine. That was a win-win. We liked that. And then COVID hit. And we had one ship left. And in March of 2020, that ship was tied up to a dock in Seattle and it was not going anywhere. Cruising had died for that at that time. I'm sure everybody remembers that. And so it became clear to us that perhaps it was time to pivot again, that this was, this was going to take a while for the cruise industry to recoup. So we sold that last ship to the operator and, you know, didn't do as well on that one. But then it was like, okay, now what next? We still weren't ready to just totally hang it up. We had money that could be invested and we figured out where we thought the world economy was going, what would be able to, to live through whatever storms and turmoil the world would come up with. And we felt that real estate was pretty rock solid. We had been investing in real estate in Alaska and Hawaii for some time already. Started in the mid-'90s with some investments. And we found out about real estate or multifamily syndications where you could partner with other people. And it's a passive investment. So you put your money in and you do some work and maybe you help raise some money and so forth. But you have property managers that actually take care of the tenants, the termites, and the toilets. So we didn't have to do that. So, We jumped in with that and joined a mentoring group, joined a mastermind, learned how to do it. We didn't know anything about multifamily syndications and we figured it out. And so we've been doing that for about 3 and a half years and we're part owners or partners in about 6,000 apartment units across the US in about 5 states.

Wow, that's amazing. So when you say multifamily syndication—

apartment complexes.

So that's when lots of people come together, almost like shareholders, is it? In a property?

No, it's an apartment complex. So it's a complex where there's 60, 100, 200 apartments in one building or group of buildings. So it's a single property. And then the syndication is that there's general partners that put the deal together. They find the property, they do all the due diligence and negotiations and bring in the investors. And the investors come in as limited partners. And then however many limited partners and a few general partners put the deal together and then they run it until hopefully you have a successful profitable exit.

So, yeah. So, Ralph, sounds as though you've pivoted again from airlines to boats to being on land, which Which I can only imagine is a nice way to be. What would you say is the secret then to this success? Because you've managed to have business success in different industries. And yet you're also managing to, as you say, to enjoy life.

Yes.

We are.

Yeah, we've been told by many, many people that we are living the dream. And so now that's become my motto and the name of my business, my newest business, uh, Rowell West Living the Dream. And I'm, you know, I'm committed and addicted to it because I want to live my life the way I want to. And the secret, you asked, the secret to all of this is working on your business instead of in it. You use the principles and deploy and apply those same principles over and over again. And you make sure— we're taking risks every day. Every investment that we make is a risk. The cruise ships were certainly a risk. And yet we do our homework. Sometimes we do it better than other times. There have been times we failed to do enough homework. I will admit that. There've been a few expensive learning experiences. But if you do your homework, you have faith, you have guts. I think we were talking earlier about entrepreneurs having to have courage. I just call it, you just gotta have guts. You just gotta go for it. And constantly measure what your results are, you know, keep track of all of your data and pay attention to your business without necessarily working in it all the time. So we're free to travel. We recently spent 6 weeks in Europe and You know, we're going to be spending the whole month of January with our family because our youngest daughter is getting married. Our other daughter is coming over from Australia. So we're not going to be working in January. We're going to be with our family. But the way that we can do that is that we have systems and procedures. We have a team that we can rely on. We know what's happening because we have the reports and we can see what's going on. And we're able to sort of you know, be the orchestra leader from afar. And that's really the key. And, you know, don't do anything that you don't love. And, you know, going back to why did I start this next business instead of enjoying myself? Well, I have a passion for business. So I believe people need to follow their passion and their businesses need to feed their passion. And if a day comes where this little business is not feeding my passion, I will stop. You know, I am not motivated by the money. And I think that is a mistake that a lot of entrepreneurs make is they get into something and gee, ooh, this is making lots of money. So I'm gonna keep doing this. But then somewhere along the line, it's not working for them personally anymore. It's not meeting their goals for their life, or it's not feeding their passion, or they're not, you know, in love with what they're doing, then they need to stop and go do something else.

Well, and as you say, to pivot to something they enjoy, but the key is to retain the systems that were successful in the other business, right? So it's not about reinventing how you run a business. It's about doing a business that's closer to where you find passion and alignment. With what gives you nourishment, right? Is that fair to say, Raelle?

Yes, because any business that you start, whether it's a dog-sitting business, it doesn't matter. You still need these 6 principles and you still need your team. Your team may be very tiny. It might be you and maybe a bookkeeper or something, but that's still a team and you can still build your culture. You know, it doesn't matter how big or how small, the principles are the same.

And, and, Ral, if I'm not mistaken now, under Living the Dream, this is the, the offer that you've now got for people is through webinars and courses to learn from you those 6 core elements and put those into their own business. Is that right?

Yes, I would very much love to teach entrepreneurs how they can have a business that is successful and that grows and allows them to have the life that they want. That is my passion. And I want to share that knowledge with as many people as will listen to me because I feel like I've been around a while and I've learned a lot and a lot of the learning has not been easy. And some of the learning has been through, you know, hardships and mistakes. And I think I can save people a lot of time. Because I spent years and years and years and thousands and thousands of dollars on this education. So I can share that for pennies on the dollar.

Well, and you've got such rich experience across different industries, but also that you've managed to balance your work life and your family life, which is also really key as we get older. I mean, you and I are, you're not spring chickens anymore, right? So what's also amazing is that we can take the energy and the enthusiasm that we've got for entrepreneurship and share that with the next generation. And I think that's a really, really amazing and wonderful mission that you're now on. That's why I wanted to have you on the show to share that. Well, if there's a book or a podcast that you found over the years has been sort of an inspiration or given you some insights, what would that be?

Well, the key book for any entrepreneur must read is The E-Myth by Michael Gerber. And that was really what helped us start the path to totally systematizing our business and pulling the mom and pop out of the day-to-day operations. We would not have been able to sell our business to Alaska Airlines or to anyone else if we had not become the owners instead of the operators. And the E-Myth teaches you how to do that, how to manage the business instead of being the business.

Great, that's the E-Myth, Michael Gerber. Yeah, and he identifies, doesn't he, three kinds of entrepreneurs, the self-employed practitioner, the professional manager, and the person that works on the business, as you say, is like a conductor rather than actually being in the orchestra pit themselves. So that's a brilliant book.

And I've also been a student of Robert Kiyosaki's for decades. And in fact, studied with him in person in Anchorage in the late '80s. So definitely pick up some of Robert Kiyosaki's Rich Dad, Poor Dad and Cashflow Quadrant and so forth.

And he's in Hawaii, isn't he actually?

Well, he's from Hawaii. He lives in Arizona. But yeah, he was born in Hawaii, I think.

Yeah. Okay. So to, to really thought leaders that we can all go back to. Ral, but you're a thought leader and someone that people would love to get in touch with. How can they do that?

Well, I would love for them to visit my website, which is www.ralwest.com. And on, on the website, you can find the offer for my free webinar. And of course, you can also sign up for information on my course. Which teaches the entrepreneurs how to do what I've just said, all the 6 principles and how to build your business and live the dream.

Well, I'm going to go there and check that out. I wouldn't mind building my business and living the dream, Ral. It sounds like you're well ahead of me on that. So thank you so much for coming on the show. And of course, we'll introduce your show and webinar links to my show notes. Ral, thank you for joining me from Sitka all the way over in Alaska, just, just outside Seattle. Sounds a beautiful part of the world.

Thank you. It is. Thank you so much, Jim. It's been fun.

Well, we've had a lot of fun and what an amazing life that Raelle has led. And so we're blessed that she's really coming and sharing that wisdom and is on a mission to share that with her webinar and her courses. So I encourage you to go and check those out. And if you've enjoyed this, do please leave a review. It helps people like Raul know that you've listened to her and also helps me to know what kind of guests you'd like to hear. And until we meet again, I just encourage you to keep on communicating.