Author: AJ Vaden

Ep 598: Scaling 8 and 9 Figure Businesses with Mike and Kass Lazerow

Rory: [00:00:00] A lot of personal brands have a bit of a fantasy about what it means to be an entrepreneur and run your own business, and you know that AJ and I have a heart for quote unquote real entrepreneurs. People who have been on the front lines, had their hands in the dirt, the people who have built real companies that have provided real jobs, serve real customers, and battled all of those headaches in between.

And a lot of the biggest personal brands in the world don’t really build large teams and ~large, ~large organizations. And so anytime we get a chance to talk to entrepreneurs who have created businesses with real, genuine enterprise value, who have had massive exits, that is somebody we ~re ~respect and admire and we want to get ahold of, and we want to introduce them to you because you might not be as familiar with them because they don’t have as big of personal brands, but financially and.

From an impact perspective, these people make a, ~a bigger, ~you know, as big if not much bigger impact [00:01:00] than the biggest personal brands in the world. And that’s what we have an opportunity to do today. You are about to meet Mike and Cass lro, who I love and adore for many reasons. We’ve got mutual friends.

I met them through will Gera, a really good friend of mine a client of Brand Builders Group, someone I’m a huge fan of. He spoke so highly of them. They’re also husband and wife, which is very rare to operate at the level that they operate at ~and ~and the companies they’ve been a part of, which is something that AJ and I have always done.

We have been business partners before we ever fell in love, and so anytime we get a chance to meet a successful married couple who’s crushing it in business, we’re paying attention, but. Let me give you a little bit of their pair pedigree here, and then I’ll introduce you to them. So they are serial entrepreneurs and they have been involved with massive companies.

So first golf.com was one of their most famous claims to fame that they had a $25 million exit as part of that business. Then they were a part of starting Buddy Media, [00:02:00] which they sold to Salesforce for. Get this. $745 million, 745 million. Dollars. They have also been advisors and angel investors to companies like Scopely, which had a $5 billion exit in 2022.

They’ve been advisors to companies like Liquid Death, which I’m a huge fan of. And they have a new book that has come, just came out it’s called Shoveling Bleep. We’ll say shoveling stuff. But a Love story. About the entrepreneur’s messy path to success. And so we’re going to hear a little bit about their messy path to success and the advice that they have for entrepreneurs and dreamers and mission-driven messengers just like you, from people who have actually done it.

They’ve been on the front lines, they’ve had their hands in the dirt, and they have shoveled some stuff. So Mike and Cass, welcome to the show, friends.

Kass: Thanks for [00:03:00] having us.

Mike: Thank you so

Kass: much.

Rory: So I would love to hear about golf.com ’cause that was like your first really big exit, right? That was your first sort of like materially successful entrepreneurial venture.

What I wanna know is what was your mindset when you started the company? What did you think it meant to be an entrepreneur? ~Her ~and then like, what was the reality that you discovered and then where were you at the end of that first one and how did you kind of ~get the, ~create the exit and like achieve that sort of first race?

’cause I look at all the things you’ve done, but that feels like it was sort of like your first race. So I’d just love to hear that story from, from each of you.

Kass: So for me, Rory, that definitely was like my first independent race. I had started an interactive arm of a agency before, but this was really my attempt at running something.

[00:04:00] And I started it with another co-founder who we had three in, in addition to Mike here. And it was a jump. To basically have independence. And for me, I wanted to build companies that had better culture, ~that had, ~where everyone owned a piece of the pie, that we were all in this together and that we actually aligned all of our interests.

So. I did that jump. It was the height of the internet, right? This was 1998 and 99. It was incredible. Obviously I thought I could take advantage of that amazing window of time not knowing the crash was coming in 2000. And you know, you start shoveling and what happens? You get punched in the face.

You know, an entrepreneur is really got. Probably 10 failures a day, these little mini micro failures. And then they’ll have one win. And it’s kind of like golf. It keeps you in the game. You have one good shot and you [00:05:00] just keep going. Right? So that was really it for us. And we got a big punch in the face and, really, ~we, we, ~we sold the company originally to chip shot.com in December of 1999. And they were going public, they were Sequoia backed, and then the call came in March of 2000 that Sequoia backed out and the crash was there and they were going bankrupt, and they were pulling us into bankruptcy as well.

Oh,

Kass: so talk about, you know, ~if, ~if anybody’s out there and they really think like, oh my God, being an entrepreneur is like so glamorous. You can do whatever you want. You know, you pick what you wanna do and everyone else can do it for you, not the case. Not the case.

Rory: What’s the reality, Mike? ~Like what, what, what?~

Like, ’cause especially with, you know, today that is what people see. It’s like, oh, there’s private jets and helicopters and fancy cars. And like, look at me. I’m on TV and I’m on big stages and I’m on the cover of a magazine, and it’s like, woo-hoo, be an [00:06:00] entrepreneur. Leave the nine to five. ~What, what’s the, ~what’s the real story, Mike?

Mike: Yeah, I think the real story is that there’s virtue and hard work and ~you know, I tell. ~You know, every young person that I speak to that we’re a 30 year overnight success story. So I started my first company at Northwestern University called University Wire and then did golf.com with Cass, and we’ve done eight companies together.

And so our biggest and what we’re known for is Buddy Media, but we learned more from the failure of golf.com initially and buying it back, and then scaling that. Than we did really at Buddy Media and even after Buddy Media working for Mark Benioff. I learned more about how big companies operate and at the end of the day, if you do.

The same thing over and over again. That’s working every day, every week, every quarter, every year. And just keep at it. You could build something big over time and Instagram and all the [00:07:00] social networks celebrate the instant win, the overnight success story, but those are very rare. Just look at your business, right?

No one knows kind of building businesses and building brands better than you and. What you’ve accomplished over many years, you probably couldn’t imagine what you do any given day. There’s only so much.

Rory: Yeah. It’s interesting to hear you say that because you know, AJ and I started our first company right outta college 2006, making cold calls out of the yellow pages, and we grew that to 5,000 clients, 200 people.

It was an eight figure business. And then we sold the company in 2018. But in, ~in, you know, ~reality, we lost the company AJ was fired by the investors. So we ended up bringing on investors and we had other partners, and then she was fired and then I resigned. And so we had a built-in equity structure and so we were able to have an exit as part of that.

But like, it was not [00:08:00] the like glamorous, oh my gosh, like ~right ~private islands and never work again and cover a magazine, but. We learned so much. Brand builders group. You know, we started in 2018. We are doing more in revenue in half the time with no debt, no investors, no partners, no audience. And it’s like, I don’t wanna say it’s easy.

It’s not at all easy. It’s nowhere close to easy. But like we learned everything in that first rodeo that it’s like. It’s a more straight path. Right, and it’s been a faster path. It sounds like you guys had something similar with Buddy Media.

Kass: Yeah, I would say so. I think, you know, we had. ~You know, ~a small win under our belt, right?

And people knew us for exiting, and I think that really helps. And Mike had done such a great job at relationship building. So you know, we started to get known in the New York [00:09:00] space as. ~You know, ~really good entrepreneurs who, like Mike said, put our head down, ~right. ~We didn’t complain about things and we actually executed what we were gonna say.

So, raising money, when it came to Buddy Media, you know, let Mike, ~you know, ~talk about this was easy. Like, ~you know, ~Mike, how long did it take you to raise the first couple million in?

Mike: Yeah, so I say it took me a week to raise it, but really a lifetime, right? Because. You know, if you are just cold calling investors, it’s very difficult.

It’s very difficult to just send an email and saying, Hey, invest in me. I’m great. Right? But if you invest in networking and building relationships and giving right, like you do Rory every day, then what you get in return is so much bigger. And so when I called our first investor, Howard Linson, who’s one of the epic.

Angel investors who funded Robinhood, the first money into Robinhood and e [00:10:00] Toro and all these great companies, I had already helped him sell another company. We built a relationship and it’s those relationships that you have to look at over a very long arc and not be transactional. So if you’re transactional, if it’s just, you know, what can you do for me today?

You’re just gonna burn through relationships. If you invest in genuine relationships, you know, that’s where it’s at. And any entrepreneur who’s not networking with investors is leaving a lot on the table.

Mm.

Rory: Yeah. ~I, ~I love, you know. One of the reasons I love talking to real entrepreneurs is because, you know when people hear like, oh, brand builders group’s, a personal brand strategy firm, like their mind goes to oh, social media and like books and speaking and TikTok and YouTube and podcasts and like one of the very first things we have to tell people is we say, look, a personal brand is none of those [00:11:00] things.

It’s much bigger. It’s the digitization of your reputation.

Kass: That’s right. It’s your

Rory: reputation. And Cass, when you say we had a reputation for not complaining, putting our nose down, hard work, executing, doing what we say we were gonna do, that’s what it takes. ~And, and, ~and part of the reason I have so much respect for entrepreneurs is ’cause you can fake a following.

Like you can fake an online following. Yeah. There’s lots of ways to fake an online following. You cannot fake a freaking $700 million business, right? Like you can’t fake a workplace culture where you attract great people. You can’t fake those things. ~And I, I kind of wish we lived, not kind of, I, ~I wish we lived in a world more where like real entrepreneurs got more attention.

But ironically they get less attention because they’ve got their head down building companies and shoveling stuff and like doing the deal every day. ~They’re not. That ~they’re not out there like celebrating themselves and promoting themselves. ’cause they’re like [00:12:00] solving problems behind the scenes. Right.

Kass: And with us when we were doing it. You know, I made Mike ~the, ~the Ford facing person of our, ~you know, ~founding group. And it was ~this ~all in trying to create his brand, his ~his like ~being synonymous with Buddy Media. ~That ~it was thought leadership, it was trust that we were going to solve your issues when it came to managing your social media because we built this incredible and leading social media marketing platform.

So it was interesting because yeah, we didn’t have any time to be like, Hey, look at us, we’re good entrepreneurs. It was more like, what could we do for the company that would actually serve the purpose of the company, the investors, and especially the employees.

Rory: Mm-hmm. I love that. ~I, ~I wanna talk to you about that because.

You know, that is very obvious, right? What you guys have built on the business side now though. So you’ve got ~your new book, your, ~your new book, shoveling [00:13:00] stuff as I’ll say it for the family friendly part of the show, but it’s called Shoveling Stuff again. A love story about the entrepreneur’s Messy path to success.

And so now you’re doing, you know, you’ve had a few exits, you’re, you’re more investors and now you’re getting opportunity to do it. I wanna ask you about the tension between building a personal brand. And building a company that has enterprise value because we seem to live at this unique intersection at Brand Builders Group, where we have a lot of people who have some real, like built some personal brands.

Like they have got large followings. ~Some of which, ~several of which are, ~we, ~we should say they’re, they’re Twitter rich, but their dollar broke. Like they’ve got these huge followings, a lot of pe, they inspire a lot of people. They got a big audience, but they. They haven’t figured out how to make much money and they’re trying to like become a real entrepreneur.

And then we have a whole bunch of these other people who have been really successful entrepreneurs who have made real money, learned real lessons, but nobody knows who they are. They have [00:14:00] no social following, they don’t get invited to speak anywhere. They have very little like media about themselves and.

We’re trying to help each side understand the other, because there’s advantages ~and ~and disadvantages of each side, and I wanted to just kind of like have you riff a little bit on. What are the advantages and disadvantages of a company having strong personal brand? You know, like cash, you said you, you guys really pushed Mike forward.

How is that a liability? How is it an asset? How do you manage it when you go to sell? And then like, how are you thinking about personal branding now, now that you’re sort of like, you know, in some ways a little bit behind the chapter of building companies?

Mike: So I’ll start with basically saying, you know, the best way to approach this is to be yourself.

You know, every time we’ve tried to be someone else, we realize that someone else has taken and it doesn’t work. And so the content we put into the world is very similar to the [00:15:00] advice we give to our a hundred plus entrepreneurs that we’ve invested in. ~And it’s. ~A lot of our cheat codes that we use to grow the business.

And so we feel good about it because the first 50 years was all about like heads down, earning reputation, money, all this stuff. And when we woke up we basically said, Hey, let’s like figure out how to scale impact. So the philanthropy side of what we’re doing, you know, helping more entrepreneurs, which isn’t philanthropy, but you know, we live in the greatest country.

And one of the reasons is because we have free markets and the ability to start businesses and fail and not have that be an albatross around our neck for the rest of our lives. And that’s a blessing that I think we overlook many days. And so when we look at. Building a business, it’s how do you use the leadership?

It could be the founder and CEO, it could be other people to communicate that you have a vision for the world in your industry and that your company [00:16:00] is the one that they will wanna work with. You know, people will work with companies that they like the people and they like the vision. You know, most industries have multiple options.

So to think that you are the only option in an industry means that it’s probably not a very big industry. You know, we also have ~beginner’s mind, a ~beginner’s mind. And to be honest, a lot of what we’ve done at Cass and Mike has been new and scary. You know, riddled with fear, right? We’re getting up and doing keynotes together for the first time, I was the one who used to do keynotes.

Now I have to watch timing and am I stepping on her toes? And you know, we wrote a book together. We never really worked together. She did ops, I did sales. And so, you know, we’re newbies. We feel like we are. Interns in this kind of social influence world, we look at what you and many of our friends have done and we kind of [00:17:00] put you on the pedestal.

And maybe one day in 10 years or 15 years, we can say to ourselves that, you know, we committed and we’ve kind of figured it out. Right now. We’re like many people in your audience that we’re just trying to figure it out, but ~what ~the way we’re figuring it out is we’re working harder than. ~E, ~you know, everyone I know in this space.

So we’ve applied the same, you know, philosophy to our personal brand of transparency, hard work, you know, putting in those extra calls as we did for all the businesses. ~I.~

Kass: And it’s about reps, right? Like everyone always thinks there’s shortcuts. When you’re an entrepreneur, there are no shortcuts, right?

It’s about doing the reps. Like if you look at our first posts versus now, right? It’s much improved. Mike, would you say that, that you regret not for us going silent kind of in social media after we sold? Would you regret that?

Mike: I mean, I wish we hadn’t. Because, you know, we helped invent social marketing at Buddy [00:18:00] Media.

We were friends with all of these people who are now influencers from Gary Vaynerchuk to Scott Galloway to, you know, name them, you know, Jimmy and Mr. Beast we’ve been on a call with. So yeah. But hindsight’s 2020. Yeah. After we sold the business, we turned inward. Our kids needed more attention. Hmm. And I think we had a little PTSD from going from zero to 50 million in annual recurring revenue in three years with offices in Singapore and London and all over the place.

So we say all the time that you can have anything and do anything. You just can’t do everything. And so one of the things we didn’t do, I. Was be public with our presence, which I wish we did, but hindsight’s 2020. Here we are.

Rory: Mm-hmm. Yeah, ~you, ~so just to double tap on something you breezed through there really quick.

Zero to [00:19:00] 50 million in recurring revenue in three years. You guys did?

Mike: Yes.

Rory: Yeah. That’s gnarly. And it took a to on us.

Mike: It’s why I weighed 40 pounds more. It’s why Cass and I weren’t connected. It’s why my cardiologist, I have an artificial heart valve, said I’m gonna die if I don’t take care of myself.

Right? So there are trade-offs to this and I don’t regret them, but nothing is free in life.

Rory: Yeah, I want to talk about that. So, specifically I wanna talk about being married in doing it right. AJ and I, we had a mutual friend. She had grown up with him and I met him in college and we started our first company together, and so we started as business partners and then it was a year into the company.

We did the like unforgivable sin. We started dating, we risked the whole company. It was just like, this is such a bad idea. We just could not help it. And we were just madly in love and we’ve been together ever since and it has totally worked out. But [00:20:00] we don’t know any other life other than working together.

And people are always like, how do you pull that off? Like, how do you not kill each other? ~How do you like,~

Kass: right.

Rory: So I would love to hear. About your marriage doing business together. What’s been awesome about it? What’s been hard about it? What advice would you give to people about when to do it, not to do it, why to do it, why not to do it.

Kass: Well, ~I, I can’t, I I’m like you, I, ~I can’t imagine working with anyone else because when you have that rhythm and that synchronicity of trust, right? That implicit trust and you don’t have these overlapping skills, and I am curious if you and AJ have overlapping skills or you’re totally separate. Separate.

~But. Separate. ~Exactly. That’s where like any good co-founding relationship, you don’t overlap, so you just kind of go down your lanes. But it’s like you have the best partner in the world because there’s so much trust, like you’re not gonna drop balls for each other. And I think because we had, we dated a [00:21:00] year and then I started this company and then I got Mike on board with golf.com and then we just kept going.

It’s been our superpower ~and I, ~and I really do love. ~You know, ~couple entrepreneurs because I feel like ~if they, ~if they’re in their own lanes, it can be the best superpower. The times I think that are difficult I think is just, there’s no end. ~Right. I. ~There’s no end. And yet at the same time I hear all of my friends who are entrepreneurs and they’re only like, let’s just say one of them is an entrepreneur, the spouse or the partners complaining because they’re always doing work.

Like we never complain ~when ~to each other, when ~we’re, ~we’re trying to catch up on work because we know we can relate so much to what we’re doing.

Rory: Mm-hmm. Yeah, that’s a good perspective. ’cause it’s just like when you’re in it together, you understand like, hey, the stakes are high. The ~like ~timelines are tight.

There’s people counting on us, we’re trying to make payroll, we’re trying to satisfy these customers. And like, versus if you don’t know that world, you’re like, why are you working? Like stop working and why

Kass: [00:22:00] aren’t you paying attention to me?

Rory: Uhhuh, right?

Kass: Yeah.

Rory: What are some, do you, have you guys created any sort of like rules or boundaries or like little relationship codes that have ~helped, ~helped you?

Because that’s, you know, ~the, ~the other part is just like, work is life, work is all the time. It’s, you know, you don’t have like different jobs that you’re like filling each other in. It’s like, okay, when we’re filling each other in on what happened this day, it’s like, effectively we’re just talking about work because we both work at the same place.

Mike: Well, I think why we’re so excited about Shoveling Blank, a love story is that the book is unique and it’s not just designed to revolutionize how you work as a leader, as an entrepreneur, but it’s really about how do you optimize a life and how do you build a life in this world, whether you’re an entrepreneur.

A small business owner, ~entrepreneur, right, ~who kind of never has enough resources, never has enough time or a leader trying to do something ~that, you know, ~with a high performing team. And so we’ve pulled back the curtain [00:23:00] on what we think are the real unfiltered cheat codes that have been game changers for us.

So for example, we have date night every Wednesday and Saturday night. There are probably 50 entrepreneurs we work with who now have date night every Wednesday

and

Mike: Saturday night. If you don’t schedule time with people who you wanna build relationships with, they will disintegrate. And so if your marriage is important, you have to prioritize it somehow.

Now, we think two date nights, if you can do it. It makes sense. And what we did is by the time ~we did, we realized [email protected]. ~We had a little money, not a lot, but we had some money, and we just hired a babysitter. We said, listen, every Wednesday, every Saturday, we will pay you whether we use you or not.

Block that time because it’s really important. And when we sold the company, [00:24:00] you know, the people who helped us in that capacity were also given. Bonuses, they helped us achieve what we achieved. And if you wanna kind of feel good, go give a big check to someone who has watched your kids like a life changing check.

Thousands of dollars, right? Because we think that the people who have helped us along the way in the non-business capacity are just as important ~and. ~These cheat codes are meant to basically let you build a life. ’cause at the end of the day, you know, if you’re successful, if you make boatloads of cash, but your life isn’t worth living, why bother?

Mm-hmm.

Mike: If you can’t help people, if you can’t have relationships that are fulfilling, if you can’t spend time with your faith, if you can’t do stuff that makes you human. Why go through the process? [00:25:00]

Rory: Mm-hmm. Yeah. That’s so good. I mean, that’s like, one of the things that inspires us is just going like, I think a big part of the first company in the first ~y you, several years, a ~couple decades of our career, I was so self-centered of like, I wanna achieve this and I want to do this.

~And then there’s a. ~Even though there’s a part of that that I look back and I go, gosh, you were such a self-centered person. There’s a power in achieving that, which is going, it wears off, and you get to a place where you go. The only thing that gives me kicks is when my clients succeed, when our employees succeed, when they make money, when they get the title ’cause and it’s like.

It’s where all my kicks come from, right? It’s like it’s the only thing that’s exciting anymore is like helping somebody else succeed. And so that’s a really beautiful place. You know, I think that people get to, certainly you guys have I want to dive in on some of just a couple cheat codes really quick.

Going back into business. There are [00:26:00] a lot of personal brands. That gets stuck in what we refer to as the swamp. So we refer to the swamp as basically between two to 4 million in annual revenue. And the idea is that like if you’re a really smart person and a really hardworking person and you’re really good at relationships, you can build a little kind of personal brand fiefdom to a two to 4 million in revenue by just basically redlining it.

Then you hit this cap to go, you don’t get to 10 million unless you get, you gotta change systems and people and processes. Like you have to become a real entrepreneur to get to like an eight figure business. What are some of the, and you guys have been on that journey before, advise several people on that, you know, that I feel like that’s ~the, ~the hardest jump to me is not starting the business and, and it’s hard to get to a million.

And, and hard even to get to 3 million. But it seems like the place where people really get [00:27:00] stuck is in that swamp because they are working so hard that they’re burning out, but they don’t have enough money to just go hire like a, you know, 10 senior leaders. But they need it, but they can’t afford it. How do you make that jump from the swamp that like two to 4 million?

To the north of 10 million where you do start to kind of get resources to be able to hire people and get stuff done. ’cause you guys have done that leap multiple times.

Mike: Yeah. So the biggest cheat code that I would share is focus and how you focus yourself shouldn’t be that different than how you would focus a business.

And I say yourself, your personal brand. So it starts in our world, we use something called the V two Mom. I’m not, I don’t need to go into the whole thing. It’s in the book. It’s vision, values, methods, obstacles and metrics. And you need a vision for yourself, for your personal brand that is achievable, that is concrete, that [00:28:00] matches the kinda life you want.

And a bad vision isn’t. I want to create a $10 million business around my personal brand. Like that’s a very valid vision. Okay? What are the values you hold? True transparency, growth, beginner’s, mindset, whatever is important to you. And then it comes down to, okay, if I wanna eventually be there, it’s not gonna happen overnight.

Last I checked, you have to do a million in revenue before you get to 10. You gotta do a hundred thousand before you get to a million. But what do you need to do today? To put yourself on that path. And I would encourage everyone to put together a timeline that they think they can do, reach their vision.

Whatever the vision is, is then double the time. ’cause it always takes twice the amount of time and double your budget. ’cause it always takes twice as much money. You don’t know you don, like building ~a housebuilding ~a house.

Rory: It’s like building [00:29:00] a house. ~Like~

Mike: building a house. Totally. And so, you know, that’s the biggest cheat code is BI.

Not only persistent, but be proactive. Don’t react to the incoming. Be proactive about what you wanna do to grow, which is what we’re doing. It’s why we launched Cass and Mike. It’s why we wrote the book, you know, we wanna scale our impact, and we thought that although we’re not measuring it in dollars right now.

We thought in order to start scaling it, getting out there again through content in a book ~was the best, ~was the number one thing we had to focus on.

Kass: I also think that when you’re in a company, and like you said, you’re stuck in the swamp, it comes down to a lot of it is operations. At that point you talked and you said, Rory, ~you know, you, ~you think you need all these managers and ~you, ~you need to hire more people and everything.

~I, ~I would challenge everyone out there to, I know they’re not gonna wanna do this, but like. Put the priority to take a look at all [00:30:00] your processes and where you have efficiencies and trying to look at, okay, wait a second, these 10 people are doing all the same thing. Could we get three of them to do all of it?

Right? And you start to look at and take apart how teams work. And it comes down, and this is what I would do at all the companies, ~it’s, ~it’s about scaling the processes. Because if you can scale those, you save money and you save time. And that’s how we would start to catapult ahead in our revenue, which would then allow us to hire the people.

And then that flywheel starts, right?

Rory: Mm-hmm. Yeah. I love that ~the, the, ~I think a lot of times entrepreneurs think. I just need to hire the person to come solve this problem. Yeah. And in my experience, it’s like if you just hire a person and you have crappy processes, now you have crappy process and an expensive person.

It’s like Exactly.

Kass: You

Rory: have

Kass: ~to, ~you have to, like, who’s gonna fail? ~Fail,~

Rory: who’s not gonna help you? Yeah. It’s like. Your [00:31:00] job is to create the process first and then bring someone in to kind of run the process. But if your processes are a disaster, like yeah, ~you just can’t, ~you just can’t outspend your way to like.

~Nope. ~Fix crappy processes. Exactly.

Kass: And ~that’s where you’re, ~that’s where the fear comes to, because ~you don’t, you, you know, ~entrepreneurs get stuck and they don’t wanna break anything. ~They think, ~they think there’s a person that’s the savior, as opposed to saying, wait a second, if we wanna get to 10, like Mike says, what do we need to do?

Okay, maybe that’s, I need 50 more clients. Okay, well, how do I have the current team service? 50 more clients? It comes down to the processes, right?

Rory: Mm-hmm. Yeah, I mean the, there’s a, you know, there’s so much culture and like entrepreneur, like just delegate or like, don’t do anything you’re not good at. Just hire someone to take care of that for you.

And it’s like, well, okay, great, but like with what money? Right? And also, like, ~I don’t have, ~I have zero time right now, so like what time do I have to like go hire the person? And there’s a part of me that wants to just go, oh yeah, I just wanna hire a [00:32:00] person and they’ll come and fix it. And that feels empowering at first.

But then it’s like it’s very hard to find good people and train ’em, and they’re usually expensive if they’re good and like all that stuff. And fixing the process seems more difficult, but actually that’s more empowering. It’s like you have control. Yes, right now. ~Go find, ~go fix the process. Document the process, codify it, train it, have it videoed.

And now you can hire someone to come run it and they’ll actually be successful. So it, it, it feels scarier and like it’s more work, but actually it’s the thing that’s in all of our control and it’s empowering to just like get it documented. And I think it’s, you know, ~there’s, when you, ~you seem to have such great superpowers working together of like, you know, Mike’s got this relationship building in the sales and cast.

You’ve got like this operations mastery and it really is. Such a great partnership. So I, I just, I love seeing [00:33:00] you work together and using each other’s strengths and, and, and being a team to do this.

Kass: Thank you.

Mike: I also don’t think it’s unique to like what we’ve experienced as husband and wife, which has been really rewarding and I couldn’t imagine any other way.

You can have similar relationships maybe without the personal intimacy with your co-founder, and I would choose your co-founder as carefully as you would your spouse. Because who you start a business with is often more important, much more important than what the business does to start because you’re constantly evolving the business.

Right. It’s easier to change business models than co-founders.

Yeah.

Mike: And so, you know, when you go into the relationship. Not only do you want different skill sets, so you can get a lot done, right? One plus one equals like 3, 4, 5, but you have to have a shared vision, common [00:34:00] values, effective communication, a growth mindset, right, and equal workload.

And then on top of it, the best entrepreneurs we found have this like self-awareness, like superpower, I would call it. That you know your weaknesses and you’re willing to let other people help you and you know your strengths. And when you have to like show up and kick some backside and so that co-founder relationship, you know, put as much time into it as you do your, like, business thinking.

Mm-hmm.

Rory: Yeah. ~That’s good. Yeah, I, ~I mean, we hear a whole lot of horror stories of partnerships. Not working out right, like business partnerships. ~That’s why~

Mike: companies fail. They either run outta money or internal fighting leads to just lack of focus and that the company eventually improves and

Kass: paralysis.

~Yeah.~

Mm-hmm. [00:35:00]

Rory: Yeah. I love this. Guys, this is so powerful. I mean, it’s just rare to have the perspective of people who have made the climb as many times as you have from many different vantage points as you have. I mean, 50 million in recurring revenue in three years is like, man, ~that is, ~that is naughty.

That’s like, the irony

Mike: ~is ~I went, you know, ~I was, ~I was proud of it. And you know, we start these conversations, we get inbound interest to sell the business and one is, you know, mark Benioff. And so I go to his house in Pacific Heights and, in San Francisco, and it’s actually two houses. One’s his office, like huge townhouses.

And you know, he just worked out and he’s sweating and he’s eating an energy bar and we’re just like jamming on the business. And he goes, you’ve made a huge mistake. I’m like, okay, probably. ~I probably made, ~I probably made 50 huge mistakes, but okay. Like, hit me. He goes, you only have 40 salespeople. You should have 400.

Hmm.

Mike: And so we were here thinking that, okay, we launched the product in [00:36:00] three years, we get to 50 million of a RR, and he is saying, oh, you’re an idiot. Like ~you didn’t high, ~you didn’t scale fast enough. I was like, yeah, you’re right. If we had, but there’s only so many people you could onboard any given time.

You know, it is what it is. We did it well.

Kass: ~That ~that’s why it was a perfect fit though.

Mike: Mm-hmm. Yeah. They had the sales team, which is why ~it. You know, ~it worked out so well.

Rory: Yeah, it’s great. You know what, mark for a cool multiple of 15, we’ll hand it right over to you, buddy, and you can plug it into your machine.

~I mean, mark,~

Mike: listen, like we never got into the business to sell it. We thought we were going public. We’d made some epic hires, CFO and a president to help you know, those public company ready. And we started these businesses just to be independent, like just to not have to sit behind a desk like we never spoke about money starting it.

We were as happy, poor as we were, [00:37:00] kind of as we are rich, we’re a little more comfortable, but we were driven by a fear of failure and just the joy of hard work more than any pot in, I. You know, the potential future, because that’s so unknown.

Mm-hmm.

Rory: Yeah. I love it. ~I I love this guys. ~Where do people go? So obviously again, the book Shoveling stuff, a love story about the entrepreneur’s messy path to success.

Where do you guys want people to go if they want to follow your journey, learn from you, get the book, et cetera?

Kass: Well, they can get the book right on Amazon. I think that’s the easiest way. And I think most people probably already ~shop, ~shop there. But if they wanna learn more about us, they can definitely go to Cass and mike.com and they can learn about what we’ve done, what we do.

They can definitely learn about all of our philanthropy, which we’re really excited about. And yeah, ~they’ll see, ~they’ll see lots of stories.

Rory: Mm-hmm. Yeah. ~It’s, ~it’s great. ~I, I, I, ~I love [00:38:00] the. Appreciation that you have for the work. ~Right. Just the joy of ~just the joy of hard work. I think in the very beginning, Mike, you said there’s, ~you know, there is like ~value in just doing good work.

~Like, I think and it, ~I think if people could fall in love with the idea of just doing good work. ~A, ~a lot of the rest of the entrepreneurial journey ~would, ~would work itself out. And I know that’s just ~like ~the core of the message, right? ~It’s just like, right.~

Kass: It’s like if you can learn to love to shovel, which is the hard work every single day, you’ll be unstoppable.

Mike: Mm-hmm. And it’s also the, you know, it’s not just kind of virtuous. I think, you know, the Bible wants you to be rich. Right. So like if you look at kind of how rich people are treated, whether it’s Abraham or others, you know, who he got wealthy on, like livestock and other stuff. They’re treated great by God, right?

Like, but what comes with [00:39:00] kind of freedom and resources is moral responsibility.

Kass: Yes.

Mike: And you know, it’s why, yeah. We live in an interesting time where there’s been a tremendous amount of money made in the world’s greatest country and we’re underperforming ~and given ~and giving back, right? Like we believe anyone who has been fortunate enough to be born in the time we’re born, educated, start businesses, you know, at a time where in the last 10,000 years, like if you were born a thousand years ago.

We’re not having this conversation. Right. And you have a responsibility. And we’ve always felt that. And ~I don’t think it, ~I think it transcends whatever religion you are. ~I. You know, ~you follow whatever kind of ethics drive your life.

Mm-hmm.

Rory: Yeah. One of my favorite verses is Colossians 3 23, [00:40:00] where it says, you know, do your work not unto earthly masters, but unto the Lord.

And it’s just like, you know, ~if, if, ~if you really did that every day, if you really said, right, my goal today is to create something, make something that would make. Like God or my Lord, proud. Right? It’s just like, think of how much intention and care and focus you would be like, ~I’m, I’m, I’m, I’m, ~I’m making the best thing I know how to make with whatever tools I have available, whether that’s a huge team or no team, a lot of capital, no capital, but it’s just like I’m dedicating my life to building something great, and that also will help other people.

And it’s like you do that long enough, eventually you get paid. Eventually the money shows up. And anyways, you guys are a great proof of that. Thank you for the stories. Thanks for the honesty. Thanks for, for, you know, weathering the storms you’ve done and for investing back into so many people now and giving so many entrepreneurs a [00:41:00] dream to like.

Do the journey. And anyways, it’s, it’s been an honor to meet you guys, get to know you a little bit and I look forward to continue to follow the journey and, and we wish you the best.

Kass: Thank you so much for having us ~r~

Mike: Thank you for the support. ~Really~

Kass: appreciate

Mike: it.

Ep 597: Why More Is Not Always Better: The Truth About Vanity Metrics vs. Real Growth | Lee Pepper Recap

[00:00:00] More is not always better. In a world where everyone is talking about more, more followers, more subscribers, more likes, more downloads, more clients, more money. More, more, more. I think it’s important to take a step back and ask the question, why is that? And do I really need more? Or do you even want more?

And in some cases we think we do, but if more really came, would you even be able to handle it? Like I know for most of the clients that we serve at Brand Builders Group, if they got even a dozen more clients, they would be full, right? It’s like they can’t handle 10, 20 incoming prospect calls a day. They can’t handle hundreds of clients.

They’re not set up to do that. But yet we still live in this world where everything is about more. And what it’s not about is how do we actually just serve the right audience in the right way [00:01:00] at the right time. I recently just had a conversation with a guest on the Influential Personal Brand podcast who’s a super close friend of mine, and his name is Lee Pepper.

And we kind of had this side conversation about the difference between vanity metrics. And real metrics and what it means to chase vanity metrics versus having an intentional focus on real metrics. And we’re gonna talk about what those are in just a second. But before we do that, I think it’s really important in a world that is selling more, that you realize for you, for your personal brand, for your business, for your team, is more really the right thing.

And instead of trying to get bigger. What if you just focused on getting better, better serving your clients better, honing your craft, better targeting the right type of customer that will get the right type of results, the type of [00:02:00] customer that will attract more customers for you, right? Is it really always about.

More because for many of us, more doesn’t lead to more peace, often more pressure. It’s often more pressure, it’s often more responsibility. It’s often more time, more hours, it’s more money, and that’s not what we’re all after. And I’m not saying that it’s bad to chase those things. I think it’s great to have a bigger impact.

I think it’s great to make more money. I think it’s great to grow your team. I think those things are great. For the right person at the right time. ’cause we can do the right thing at the wrong time and it blow up in our face. So my question to you is simply is more really the right thing for where you are right now, and instead is better or more focused, really the path that you should be [00:03:00] taking.

So let’s talk about these metrics. In a conversation about more, or not necessarily more, but in this case better. What do we really need to be looking at when it comes to metrics, when we think about our digital space, the dig digi, the digital reputation in which our brands are living in the ecosystem of social media, blogs, podcasts, YouTube.

What should we really be focused on in order to reach that right client at the right time, at the right place and it, and really in the right season for both them and for you and your own team. So here’s some of the vanity metrics that we talked about that do not necessarily lead to the right things all the time.

A lot of us we think we need to go viral. And what do I mean by that? That just means more views. What a lot of us are chasing is more followers, more likes, more fans, more subscriptions, like more [00:04:00] subscribers. We’re, we’re chasing a lot of that more, but really what it is, is we’re, we’re chasing eyeballs.

And those are called, in some cases vanity metrics because they don’t actually lead to anything. Like what does it matter to you if you have a hundred thousand Instagram followers, if you have. Not enough money in your banking account to pay your bills. Something we refer to at BBG is Twitter rich and dollar poor.

Like why do you need hundreds of thousands of followers if you can only take on dozens of clients? Or why do you need to go viral? What is it about going viral that’s somehow gonna help you grow your business? I’m not saying it’s not. I’m just saying, do you actually have a goal, a plan, a strategy in place that going viral would actually convert into something to help your brand, to help your business?

Right. Why are, why are we chasing more views, more followers if we don’t [00:05:00] actually need it? Why aren’t we instead focused on, hey, for the followers that I do have, right? For the people who are engaging with me, what can I do to serve them better? What value can I provide to them that would convert them from someone who’s making a comment to someone who’s actually buying my services?

So it’s not always about more eyeballs. Often it’s about how do I serve them in a deeper way, provide more value so that I have more conversions? And that isn’t just as necessarily about adding more to every single platform. More often it’s about doing less in a le in a more focused way, but in front of the right audience at the right time.

So those leads us to the real metrics, right? How can doing, how could doing less actually lead to more customers? Well, here’s how you do less platforms, but more intentional [00:06:00] posting. I. Right. You do less of the trending and the fad, and you do more of the strategic and more of the focused, intentional work that it takes to convert a customer, not just gain a follower.

So sometimes doing less can actually lead to more customers. Because you focused your intention and attention, you focused your resources in less places, which naturally allows you to go all in and provide more value, serve people in a deeper and more meaningful way. Actually work to serve the people you already have that are already giving you their attention instead of always trying to just get more.

So, some of those metrics would be things like emails. How many emails are you converting? From your different lead capture forms, your different lead magnets, social media, and ask yourself, do you even have a way to capture email addresses? Because that’s step one, right? Why are we trying to grow social [00:07:00] media if we don’t even have a way of taking those followers or those fans into actual email addresses, contacts in your own database?

Right. So email addresses could be one. Engagement is one. So that’s comments, dms, but it’s not how many people are following me. It’s how many people are engaging with me. Following is a vanity metric. Engagement is a real metric. Calls how many of the people that I am engaging with are actually converting into calls, right?

People on the actual phone with me, that could become a customer. And ask yourself this, if you don’t have a way of catching an email address, do you have a way of actually turning a follower, a fan into a phone call? Because that’s conversion metrics. Those are real metrics. That’s what actually helps you move the needle, not posting a hundred new reels or a whole bunch of new carousel posts, or redesigning your graphics in Canva.

That’s not it. It’s what is the value that you’re providing [00:08:00] that’s gonna make someone engage with you, request a call with you and buy from you. And that comes from real value. And you know what guys? To provide real value, it takes real time. And if we’re just trying to throw something up there, it doesn’t provide real value and you’re not giving it the time that it needs, which means you’re not getting the customers you need.

And you know what happens when that happens? You run outta steam. You run, you run out of runway, you burn out, you run out of time, energy, and money to continue this thing. That was a mission, that was a passion for you, that gave you purpose and you give up on it because you’ve been doing so much stuff to get more, you haven’t actually focused in on the things that actually create real change for you and for your customers.

So, as I said, to begin with, more is not always better being. Better is always more important than being bigger.

Ep 596: Why Most Marketing Fails (And How Military Strategy Fixes It) with Lee Pepper

AJ: [00:00:00] Lee Pepper. I am so excited to have you on the show today. And, uh, here’s what I wish I would share with everyone listening. As you guys know, there’s a lot of, uh, new friends that we have on the show that’s not today. Uh, Lee is a genuine personal friend. We go back now over 10 years. Can you believe that

Lee: it’s gone by so quickly?

AJ: When we first met, uh, your kids were still in like elementary school. School and now you have a soon to be college graduate, like crazy. Um, so I’m so excited to have you on the show and one of the reasons. For everyone listening why I wanted to have Leo on the show today as I just think he brings a really unique perspective to the importance of marketing and executive leadership and innovation that you just don’t hear a lot in typical digital marketing strategies on the web today.

So this is a true marketing expert, and I can say that because I watched him behind the scenes at work and if it, if I don’t recall, like you helped [00:01:00] 60 X your former company before it went.

Lee: At Foundation Recovery Network, our first private equity play, we returned 60 times.

AJ: That’s insane. And, uh, for all of you who listening, I met Lee because in my former life when I was in sales consulting, I was hired by the company that he was running all the marketing for to come in and help with sales strategy.

And I’m sitting in these call centers and they’re, they’re yielding 20, 30, 40,000. 40,000 calls a month from his marketing strategies, and my job was to help convert those into sales. But just sit there for a second and go, what would your business look like if you had 10,000 inbound calls a month? Crazy.

It’s wild. So we’re gonna talk a lot about marketing, but also what marketing looks like in terms of innovation and on the leadership team, which is what I’m really excited about. But before we get into that, I wanna help our audience get to know you just a little bit, and you have a varied background.

Anything from [00:02:00] military to presidential campaigns to uh, you know, private equity funded exits. But let’s start way back in the military. And you were in the Army.

Yes.

AJ: So your new book has a lot to do with some things that you learned in the military, in the Army, and how you can apply that to leadership and marketing.

We, I would like to know what those are.

Lee: Right. And I, and I hope, uh, thank you so much for the kind introduction. Uh, aj I think that for me, you know, when you’re first, uh, enlisting, I enlisted in the Army when I was a sophomore in college, and I, uh, was a 76 Yankee. Unit supply clerk. So you go to basic training and you know, one of the things that, that you learned, you obviously learn how to shoot, right?

Uh, but nobody wins any battles just because they know how to shoot. Like there’s, there has to be a strategy and that is where I took that. Then when I went to officer candidate school and got commissioned as an officer went to, went to armor school. At Fort Knox. [00:03:00] That’s where then when I transitioned to my corporate career, especially in marketing, a lot of people want to get stuck on the how to shoot on the tactics and what really lacking is the strategy.

So that’s what I try to approach in my book, never Outmatch, is to, is to give some voice to here are the strategies which are pretty accessible to most people, even if they don’t have not served in the military. They’re mental models, like they’re very accessible. And if you will focus on creating the strategy, then you will decide the tactics that will make you successful.

If you do it in the inverse, you’re constantly switching tactics and you’re never getting that 60 times return that everybody wants.

AJ: Okay, ’cause I wanna sit on this for a second because. We at Brand Builders Group are a personal brand strategy firm. Yes. And we know one of the biggest objections we get as you know, potential new customers get on calls with us is they’re like, yeah, yeah, yeah.

But when do we get to do the fun stuff? Right? When do we get to [00:04:00] launch the website? When do we get to make the pretty designs? When do we get to? And it’s like, I don’t know, depends on the strategic approach you’re taking. So this is something we hear all the time ’cause we’re big believers in like. If you don’t have a good blueprint, then you don’t know how to build.

Why is it? So many people skip the strategy.

Lee: I think you, you hit the nail on the head when you said people wanna get to the fun stuff. You know, when I retired from the Meadows a few years ago, I didn’t necessarily mean to get in consulting, but people realized that I was now retired, semi-retired, not really retired, I guess.

Uh, but, uh, pretend

AJ: retired. Yeah,

Lee: they, they started reaching out and calling a lot of word of mouth and. Every single one of my clients, it was always the same thing. We got started doing this one thing, this one tactic, and it’s not working, and we have to kind of reverse it and go, let’s start high. Kinda like what you guys do with brand builders, which I, I love being connected with you all, but I think it’s because.

Uh, people, especially when you’re running a business, and a lot of times when my phone rings it’s [00:05:00] because there’s a major problem, like they’ve tried everything else that’s not working, and there are, there’s pressure for results and so people will over promise, oh, I can come in and I can help produce this many.

Uh, website visits as much traffic or I can produce as many phone calls, but yet we’re still missing out on the whole strategy part, which is really, there’s a lot of temporary things you can do, but it’s not long lasting. Whereas the way you approach it, the way I approach it, it’s long term. It’s long lasting.

AJ: Yeah. So I mean, a lot of what I hear you saying is like the strategy helps prepare for the long run versus a lot of like the quick tactics. It might work temporarily. But like with any fad, it’s kind of, kind of fade away, right? If you don’t know what to do next

Lee: in the military, you can’t have these fads.

Yeah. Or else you will get overrun. And there’s people, there’s people’s lives, uh, at stake. And so. It’s not that necessarily in our corporate li corporate businesses that lives are at stake, though a lot of times in healthcare there are. Mm-hmm. But we have to start with the overall strategy. But, and then [00:06:00] you can maneuver, you can change tactics, you know, things will change within there, but you have to have this overarching strategy.

AJ: So when it comes to marketing strategy, like if there were some universal principles or some universal concepts, even if they’re just mindset shifts. What would you say to you are like the, the core truths?

Lee: Here’s the first, here’s the first one that I always bring up. It’s this notion of commander’s intent.

And what commander’s intent is. Do, do, do your, does your team, do they understand what the board. And what management actually wants. Like you need to give that commander’s intent. And then each of your team leads are going to take from that their own personal commander’s intent and they need to give that to their teams.

And what happens a lot of times we want innovation. I. But we can’t just command innovation. We have to set up the culture that’s going to allow your team the freedom of movement, good military term, right, so that you can [00:07:00] innovate. But what ends up happening, a lot of times we end up being very top down, whereas innovation and creativity is bottom up.

And in the military, there are tons of examples I give them in my book, where you would’ve lost a battle. Unless you allowed your, uh, soldiers to have that creative freedom of movement. So instead of saying, stay right here in this foxhole and defend it to the death, no, they’re told, Hey, here’s your strategy here.

You have commander’s intent, you have freedom of movement. But a lot of times in our companies, we don’t really, we don’t operate that way. We have this top down mentality and we wonder then why our teams are not innovative. Mm. Because we haven’t given the freedom to be innovative. That is one of the things that when I first met you, uh, aj, was that.

I had just taken over the, the call center, our admissions team, and I knew from the beginning, no matter what we did in the marketing, no matter how we changed the lead source, the volume, our conversion rate wasn’t changing. And so I wanted to be able to have that, the ability to, to change the [00:08:00] conversion rate, even if it made it worse.

Yeah. I wanted to understand that we were controlling. That’s when I started asking questions like, who do we need to meet in this town? And that’s how we got referred to you. So. My team knew the commander’s intent and we had the freedom and the to innovate, which we did.

AJ: Okay, so for so many companies that don’t have that, why not?

Lee: I think it’s for a lot of small business owners and I work with a lot of folks that are owner founders. There is this struggle that this is their baby, that this is their company, their brand, and they are afraid to even. Let go of anything. And so a lot of times when I’m consulting the, the message is you spent the time to hopefully hire the right people and go through a good process.

You have to entrust that they are hearing your commander’s intent. And there are some strategies. I talk about it in the book, there’s a thing called a talk back. Mm-hmm. You know, and in the military, when we’re giving orders, we ask for the talk back, [00:09:00] repeat back what I just said. So I make sure that you understood.

What my intent really is. Right. And a lot of times in the corporate world, we don’t do that. Hmm. Um, you know, I, I had, uh, in my book I talk a lot about George Patton, probably one of my favorite generals, you know, ’cause he was armor and there are. There’s this lead from the front mentality, and I think you’ve been in enough companies and you certainly remember the days at foundations when you come, when you came into the foundation’s office, I dunno if you remember where my desk was, but my desk was out in the middle.

Mm-hmm.

Like

Lee: we had a very open, open workspace 30, we had 30 staff members just in marketing, and I was right there in the middle. I was, I had always known from the beginning of my military career that I wanted to be at the front lines. Mm-hmm. Right. There’s a great example in my book How Patton used that same strategy, uh, to, to take over a failed American strategy in the, in, in North Africa.

And within 90 days, you know, they were, they had ousted Rommel from North Africa. So there’s also this mentality, you can’t be stuck in your office. You can’t be stuck leading from [00:10:00] spreadsheets. You’re gonna have to be kind of on the front lines.

AJ: You know, it’s so interesting that you say that because only here recently, so Brand Builders Group is about to turn seven years old this summer, and in the last like four or five months I have taken back over the sales department, but for the last seven years.

Ironically, it’s kind of been led by other team members, um, and they’ve been, they’ve done a great job, but there were some things that were coming up where I’m like, I need to get back on the front lines. Something’s not clicking, something’s not working. And it has been so invigorating, so refreshing to be listening to the sales calls, remapping the sales talks.

But like to what you’re just saying, it’s like how many people are willing to get back on the front lines and go, no, it’s my job to get in there and be on the front lines and be accessible.

Lee: Absolutely. You know, and, and aj this is one of the things that you all brought to foundations was this notion of actively listening to phone calls.

And that was something that was not being done. [00:11:00] And we implemented that. And a lot of times when I come in to do an analysis or, or start working or coaching a CEO or a CMO, that’s the first thing I’ll ask. How many calls have you listened to this week? And it’s every single time it’s, I haven’t listened to calls.

Hmm.

Lee: And yet. They feel like they have a marketing problem, that’s why they’ve called me. But invariably, there’s, there’s some mix. It’s not just necessarily the marketing issue. It may be a conversion issue. And so you have to be able to take the time and not, and, and not be afraid, right. To jump in. Because like for me, I didn’t have any expertise, right?

In sales. Like I learned a lot from you all. Uh, but I wasn’t afraid to listen in and learn. And so that’s a, a lot of where you, you have to kind of put away some of your biases. And, uh, I write about this, uh, you know, in my book there are a lot of, uh, cognitive biases that we all, that we all bring to the table that we don’t even realize around subconscious.

So if you’re a, a finance person, right? And I talk a lot about how, you know in [00:12:00] the book, how you can start to communicate differently. With your finance team and your accounting team, but there are cognitive biases that they have. Doesn’t mean they’re bad people, but they have these cognitive biases. And if you’re not aware, you don’t even know how to fashion, you know, building out your KPIs or how to fashion, uh, how you communicate in an effective way.

AJ: You know, that’s interesting because I think a lot of times when you think about companies as they grow and scale departments start to become siloed. Right, and marketing does what marketing does, and sales does what sales does, and it’s like, well, no, really, part of marketing’s job is to provide leads for the sales team, and if they’re not talking together.

Inevitably there’s gonna be some issues. So I’d like to hear from you like what is the role that marketing should play in driving enterprise value, like in an ideal world, and you’ve had so much experience with being at the helm of not just marketing, but technology and information, but like what is an ideal role for marketing to play in a company’s growth?

Lee: Uh, I [00:13:00] think that marketing has the ability with the right person developing a strategy to impact so many departments. Amanda, uh, one of the, the, uh, examples I use in the book is with, uh, human resources. We always say that, wow, I wish I could recruit better people. Hmm. And I wish our retention rates were better, but yet we never, like, we never partner.

With the marketing team to see how that relates. And so I use this example of force multiplication of how you can kind of create a budget to kind of take advantage of that. But there’s so many opportunities where you can become kind of that, that you can relieve the pain that your other departments have.

So, like in the HR example, marketing can really help with retention, keeping people like employed longer and, and, and being happier in their job versus just saying, Hey, hr, that’s your job when HR doesn’t necessarily have that experience. Same thing in accounting and finance, you can make accounting and finance’s job a lot easier, right?

If you’re in partnership and connected with them and now all of a sudden, instead of just being another department that they have to kind of, you know, maintain and [00:14:00] run reports for, they see you as really driving value. It’s just understanding what, what is important to them, if that makes sense.

AJ: So I would love to hear just a couple of minutes.

How do you do that? Right. Because in theory, that’s like, yes, our communi like our, you know, different departmental, you know, teams are communicating and they’re working together and they’re collaborating and it’s shared resources. And in reality we know that often doesn’t happen.

Lee: Right. Well, you said this word shared resources and I kind of get, uh, tinged.

So I think that there’s, there’s, there’s a couple of things that, how you get tight with them. One, you have to be part of their budget. Hmm. And a lot of times companies are like, well, what? At foundations, we had a percentage of the alumni team budget went to marketing. A percentage of the HR budget went to market so that we were responsible, right?

That we were actually having meetings and that we had, that they had skin in the game, and we had skin in the game. So many companies don’t budget that way, and I’m not [00:15:00] suggesting you’re giving like 50%, it can just be like 5%, but all of a sudden now you’re putting, you’re, you’re giving your marketing team.

Right. Something that they can maybe hire somebody extra to kind of help support. A lot of times we say, oh, it’s gonna be a shared resource. Well, if there’s not actual hard dollars to it, you’re not gonna get their attention. The second thing is, are the goals matching? And I use an example in, in, in, in my book where, uh, there was a, a, a, an opera.

There was a time when, uh, finance and marketing, like our, uh, bonus goals were not aligned. And so all of a sudden it creates a lot of headache. So you have to make sure from a leadership perspective that each of the department’s goals are aligned and supportive of each other. Because if there’s any type of contradiction or incongruency, now you’re gonna have inviting, which is what a lot of times you see in companies when they’re like, well, marketing’s not helping me

Or, well, maybe you didn’t budget and maybe you also didn’t align your, your actual bonus goals together.

AJ: Interesting. So if [00:16:00] you were to look at a company, I know this is a broad statement here. If you look at like allocation of resources, human capital dollars and cents, is there like a best practice of what should go to marketing versus other departments?

Lee: Well, that, you know, in my experience in behavioral health, we always tried to, uh, keep our marketing budget 10% of net revenue. So that was, but you know, some companies can afford more and some companies maybe they have less margin. So it has to be less, but I think it shouldn’t be a secret. Like you should develop, what is your number going to be?

And it shouldn’t be a secret. And then when it comes to other departments, they have to understand the value and how you can solve some of their problems. So like in the HR situation, you know, I think, you know, if you establish a starting point, so you, you might go with something very small, like 5%, and if they know that 5% of their budget, now they’re gonna start wanting to know like, what are you doing for me instead of just this?

Oh, shared re resources, and maybe I’ll get something, maybe I won’t. No, now they’re a [00:17:00] customer of marketing. Right. And I think that all of a sudden you start to get some synergy there because from the marketing perspective, I want to be well connected to HR because I’m gonna get some value from maybe website traffic, you know, or outbound links, you know, coming into my website from stuff they’re doing.

Like there’s some benefit there too. Uh, and that’s where in my book, I, I talk a lot about this idea of force multiplication.

AJ: Yeah, I love that. And that is for sure the first, I have heard about this whole concept of make sure all the other departments are almost customers of marketing. Absolutely. And this vested interest, they

Lee: can’t be free.

Marketing’s not doing free work.

AJ: That’s right. That that’s good.

Lee: Yeah.

AJ: I mean, and that really does force some more of that communication and collaboration and transparency in the budget.

Lee: Yeah. I mean, so many times I’ve been at some of my customers and they’ll, they’ll be like, oh, well, HR is doing, they, they decided to start experimenting with TikTok or reels and, and you wonder why they’re terrible because they didn’t like partner with somebody in marketing and kind of maybe help and maybe marketing would love to, but marketing’s also [00:18:00] busy driving revenue.

That’s

AJ: right.

Lee: So we, why would you want to take them away? So you have to give them some allocation. And now all of a sudden you’re gonna see amazing things that can happen.

AJ: Okay. So you just brought up something that leads me to a question that I have around, you know, maybe they’re experimenting in TikTok or reels or all these other things.

So there is a lot of companies that you can just tell there is not a strategy in place, they’re just dabbling. Right. And with the amount of data and the amount of platforms that are available now, like what would you say are some key. Tips or key strategies to make sure that you win at marketing. And also what have you seen of why companies are failing at marketing?

Lee: Wow. Well, there, there’s a lot in that question, aj, but what, what I would say is that you have to forget these vanity metrics.

AJ: Mm-hmm.

Lee: And that’s what we, I see a lot. Um, you have to just, you have to make sure you’re communicating not only to wait, be clear.

AJ: Like tell everyone what’s a vanity metric in your world?

Lee: Well, a vanity metric might be, um, an [00:19:00] example of YouTube. You know, it might be, um, subscribers.

Mm-hmm.

Lee: Um, it might be, uh, even views when, so that, that to me is a vanity metric. Whereas a real metric is I want to see the number of comments on a video because if you’re getting comments that’s real, people that have watched your video that are giving you feedback or with views or with subscribers, could just be bots that were bought.

Mm-hmm. Could be poor traffic. So for me, I, I go straight to the comments. Um, same thing when it comes to, uh, site visits on your website. I mean, it’s a number you look at, but it’s a vanity metric, right? What really is important is the conversions. How many phone calls did I get? Or if you’re doing lead forms or live chat, that’s where it’s really is important.

Um, so I, I’ve had a lot of times where I’ll come in and I’ll coach A CMO and work with the agency to kind of help shift that narrative.

AJ: Okay. So real quick for everyone who’s listening, ’cause I think this is a really big deal because at least in our world, [00:20:00] in the personal brand space, there’s a lot of focus on vanity metrics.

Yeah. A lot. And I think some of that is because you get tempted by, oh, I wanna blow up. Oh, I wanna go viral. Oh, I wanna do this because everyone else is. And at the end of the day, we all know that doesn’t necessarily mean you have any dollars in your banking account. We say a lot of times people are Twitter rich and dollar poor, right?

Those are the vanity metrics, right? So in terms of the real metrics. Can we just do like a quick list? You said comments, so some engagement, um, email subscribers. Would that be one? Yes. Like what, what are some other real metrics people should be looking at?

Lee: Yeah, I think, um, well, like when I’m thinking about like what we were just talking about off camera, about, you know, our, our conversions off our website for books.

I mean, you want to get to that number and so there’s. The, the, the key is that most agencies, they’re going to tell you they can’t do that because, well, they don’t have, they don’t have insight into your backend. Hmm. Right. Uh, well, yeah, you can get ’em insight, like [00:21:00] you can get ’em access to your call tracker, you can get ’em access, uh, to, uh, you know, actually what converted, and you kind of start to remove that.

And I, and I think that we’ve fallen into this vanity metric. Um, situation because we didn’t have that integration. But the integration is possible. And even if you have to use something as fancy as Microsoft Excel, it is possible right to track this and get the information back. Um, a, a similar one is, uh, when you look at, say, Facebook and, and Instagram, it’s likes, you know, I mean, that might, could, you know, you, you really gotta drill down like what is, who is liking and how are you getting these likes?

Again, I like to get back to the actual, um. Uh, comments and also the clicks into your website. Like that might be something that’s not quite as vanity. Like, I, you can drive all this traffic, but did somebody actually click and now you’ve got, now you’ve got something to work with. You can say, well, I either had a conversion problem mm-hmm.

On my, on my social channels or on my website, which that could be valid. Mm-hmm. Maybe you don’t have the right CTAs and you can fix [00:22:00] that or. You’ve got a problem with the kind of traffic you’re getting. So where are you sourcing your traffic? You know, where are you, where are you trying to get your traffic from?

And you might find, oh, well I didn’t realize that I was paying the agency to run these paid, you know, ads. And they’re, and they’re terrible. Yeah. But now you’ve got something to work with, but you, it’s your responsibility. You know, you have to kind of do the research and it’s not that complicated because, um, we’re not talking about really super complicated theoretical things here.

Right. You’re saying how many phone calls did I get? How many people clicked on that ad and then how many bought something? I mean, it’s not that complicated.

AJ: That’s good. Okay. Sorry. I wanted to hit through, ’cause that, that’s a constant never ending source of conversation in the brand builders group community of Right.

Putting the attention quite honestly on the wrong thing and having the right things, the real things that matter, I think is a big deal. And

Lee: aj, I don’t know if you remember me saying this, but you know, with most of the behavioral health clients that I, that I coach and support, um, they’re surprised when they’re always talking about, well, I [00:23:00] need more phone calls.

I need more phone calls. And I’m like, do you? Mm-hmm. Because what I’m trying to do. In working with an admissions team, I’m trying to get one phone call, right? That converts to one assessment. That then that assessment converts to one admission.

Mm-hmm. I’m

Lee: not looking for 500 phone calls.

Yeah.

Lee: But what does that mean?

Mm-hmm.

Lee: So they’re all, and usually when I explain it that way, they’re like, yes, I want less noise. I want better quality. That’s right. That’s where the vanity metrics miss out sometimes. Mm-hmm. You know? And you more is

AJ: not always better.

Lee: Yeah. More is not always better. I want quality. Listen, we only have so many hours in the day.

Right. So like for me with, you know, especially, you know, with my coaching and consulting clients, I don’t, I can’t take 10 prospecting calls a day. You know, I mean, I Maybe that’d be all you do. I mean, it’s all I would do. Mm-hmm. I, I need the one. Right.

AJ: That’s good. Okay, so back to this, you know, what are some of the, you know, reasons why marketing fails, and then [00:24:00] what are you, what, how do you, like, can you spot a company and go, they have a great marketing team, they have great marketing and also.

That they don’t.

Lee: Um, y well, yes. You know, and the thing is, I, I think about my clients. I, I’ve got, um, a dear client who’s who I’ve, who’s been with me for a long, long time. And, um, when I first got to their location, I’m not gonna, I’m not gonna name, I’m gonna protect the, but, uh, but I, when I first protect the innocent air, yeah.

When I, when I got there, I was watching what they were trying to do on, on TikTok and, and Instagram, and they thought. That they were doing it right because they were just busy. Mm. And I, and I use an, I use an example, uh, in my book about this. How, you know, if you’re, if you’re, if you’re not careful, you’re gonna, you’re gonna look busy, you’re gonna be in your uniform and, and, and all the pageantry, and then all of a sudden you’re gonna get completely wiped out.

Mm-hmm. You know, by somebody that has done some research and is gonna wipe you out. And so that was what was happening with, with this clients like they were. They, they had just said to their team, we, we need, we need, we need [00:25:00] reels, we need TikTok. Mm. And that was where they left it. And like, nobody, like, thought to maybe get some coaching, some maybe bringing, have a strategy.

Have a strategy, right. Instead of just doing the tactical part. Which is what? And, and that’s the danger of our technology today in a sense that we do make it very easy.

Yeah. And

Lee: it becomes very accessible. But, um, it’s, it’s almost like a gun in the wrong hands that can do bad things. So can all these social media tools we have totally, like in the wrong hands that can do some bad things.

I mean, there’s

AJ: a lot of noise. Yeah. So how do you know, and on a marketing, you know, when you think about like strategic marketing plan mm-hmm. How do you know what the right thing to do is with so much noise? How do you know?

Lee: To me, what I challenge, uh, each of my, um, clients and the folks that I coach is that it has to be documented.

And so I think that when you go through that, and it doesn’t, documentation doesn’t mean bureaucracy. It doesn’t mean that it takes months to create this, but I challenge them to put it down in writing, right? And so we do things like if we’re going to do social media, okay, then [00:26:00] we’re gonna grab and do screenshots of the social media that we’re going after.

So I wanna see the style guide. I wanna see the types of messaging. ’cause you, there’s tons of ways to go there, but we’re gonna document what we’re doing. Same thing with our website, our SEO content. Um, and it’s gonna be documented even in a Word doc, right? I mean, it could be in something like Evernote or Notion too, but, but we’re gonna document it and then each of the team members are gonna have access to this so everybody knows.

What everybody is doing. Mm-hmm. Even your HR department, your accounting department, your C-suite, it needs to be readable and accessible. Now all of a sudden, now you’ve got buy-in and now you start to overcome these cognitive biases. Mm-hmm. Because now you’re not gonna fall to. Uh, to fomo.

Mm-hmm. Because

Lee: that’s a lot of times where I’ll go somewhere, I’ll be, oh, well this treatment center over here is doing this, or, you know what?

Our CFO, you know, uh, they just said their son is blowing up on TikTok. Well, okay. Or I just Googled myself like, another, another problem that can happen. And it’s like, and, [00:27:00] and you fall victim when you have not. Documented what you’re doing and then, and then maintain that documentation as a living, breathing.

And that’s where the innovation and the experimentation comes in. We wanna experiment.

Mm-hmm. Right.

Lee: So, you know, the companies that are doing well now, it’s not because they just started TikTok today. Sure. They might have been dabbling in it’s evolution process, investigating it last year. And that’s the thing, you always wanna have some percentage of your budget where you’re willing to experiment and learn instead of, instead of getting involved two or three years when it’s too late.

AJ: Uh, I think that’s really good. The documentation part I think is a huge part ’cause so many of us are just going out and doing the new thing, doing the next thing. And not even paying attention to the old thing. Yeah. Right. And it’s always what’s new? What’s new? What’s new and what’s new isn’t necessarily right.

Always. What’s better? If you

Lee: remember aj, uh, there were, there were two things that really helped us sell, uh, a couple of the companies that I’ve been involved with. One was, you remember, remember all the screens we had? Oh,

AJ: yeah.

Lee: Um, you know, at one point we had 20, it’s

AJ: still Rory’s vision. Yeah. To have TVs with marketing [00:28:00] data everywhere.

Lee: We had, we had, I think, I think we were up to 20. Uh, TV’s, monitors that were reporting in real time, different aspects of our marketing. And that’s a

AJ: true marketing war room.

Lee: It was a war room, absolutely. And, um, that was one of the things that really helped us sell, uh, our businesses because people that were acquiring us and investing in us, they knew that we knew.

Mm-hmm. And it’s not, and

Lee: we were understanding trends and we were able to react, uh, because we were, we were proactive. You know, in, in, in our approach, like we were monitoring, we knew what was happening. So if Google made an algorithm change, we knew it. We didn’t find out about it three months later.

AJ: I think that’s a huge misconception that people have about marketing.

Lee: Mm.

AJ: Is how data-driven.

Lee: Yeah.

AJ: Really good marketers are.

Lee: Yeah. Yeah.

AJ: So. I mean, I know that you’re super data driven and

Lee: Absolutely because, you know, I, you know, I’m, I’ve been fortunate that I married, you know, my wife, Jennifer’s an artist, and a lot of art can be very subjective. Mm-hmm. Like how [00:29:00] people view it.

And so I’ve always been sensitive to that and. I know enough that as a CMO, that when somebody brings me something and they’ll ask me a, uh, an open-ended question about, well, what do you think about this ad? Okay, I’ve, I’ve got cognitive biases. I’ve got subjective biases, but that doesn’t mean I. That it won’t work.

Mm-hmm. So that’s why you have to look at the data. I want it to be, uh, objective, not subjective. And that’s why if you are tracking some data, even just some basic data points, I want the data to be the bad guy instead of well lead in like my ad. Right. And that, and, and there’s, and again, companies can decide.

It doesn’t have to be super complicated. You’re gonna have two or three basic. Data points that you wanna, that you wanna review, and then all of a sudden now your team is focused on reviewing that instead of, oh, well, you know, Susie didn’t like that shade of green. You know, I mean, it’s, it, it gets like that.

AJ: Oh, I know. I think, I [00:30:00] think somewhere along the lines, a lot of people, and if. This is you listening, I’m not shaming you, but somewhere along the lines, a lot of people have gotten branding confused with marketing. Yes. And marketing is not fonts. Typography. Right. Iconography, color palettes. That’s not marketing.

Yeah. That’s branding. Yeah. And I think a lot of people get confused with us ’cause we’re a personal branding firm and they’re like, when do we get to make my visual identity

right?

AJ: And I’m like. I don’t know.

Yeah.

AJ: Do you, do you even know what you’re selling? Right. Do you even know what you wanna be known for?

Right. They’re like, no, but when do I get to get my visual identity? So have you seen that too in like, big companies?

Lee: Oh, it’s, it’s all the time when I, when I go somewhere and, and they’ll say they’re creating a new program and, and they’ll use that term brand.

AJ: Mm-hmm.

Lee: And they’ll be like, well, you know, we, we need to start branding.

And for me, I’m like, I, I don’t know what you mean. Oh, well we need to run billboards. Okay, billboards are appropriate in certain circumstances, but I need to understand like, what is your, what is your overall [00:31:00] goal so that we can create the strategy first. We don’t just go run, I’m opening up a new location, so I gotta run a billboard and just put our logo up there.

Mm-hmm. And

Lee: that’s where it gets into the branding, the marketing. And people have to understand that. And I think, I think for most, for most people, like we’re small. Business owners, you know, or we’re creating these businesses. We’re not Coca-Cola.

AJ: That’s right.

Lee: You know, and that’s where, um, we are establishing ourselves and that’s where we have to be data driven because we only have so much time and we don’t have so many dollars.

And so we have to be very strategic in how we spend those, especially when it’s a lot of it’s our money. Mm-hmm.

AJ: That’s good. Um, all right, y’all, I have a few last questions for Lee, but before we run out of time, uh, I want to encourage you, if you, if you guys have been listening to this, this is barely scratching the surface.

This is the tip of the iceberg of all of the conversation that Lee lays out in such a strategic way in his new book. So I just want to give everyone an opportunity. [00:32:00] His book comes out in early fall.

Lee: September 2nd,

AJ: September 2nd. So if you go to never outmatch.com, you can go and pick up your pre-order copy right now before it sells out.

Right? So that’s, I’m putting that out there. Thank you. Into the world. Never. outmatched.com. Go now. Pre-order your copy. It’ll be hitting bookstores on September 2nd, and I’m a huge advocate. I wrote an endorsement for the book because I have been a part of the living. Legacy, um, that you’ve created through all of this marketing work you’ve done with these companies.

I’ve seen it firsthand. So highly, highly, highly recommend and endorse it. I will make sure our marketing team reads it. Um, but all right. I have three last questions for you. Yes. And this is a little bit of, uh, rapid fire. And I think what I love about this conversation is it’s, it’s not just about marketing, it’s about marketing and leadership and company collaboration.

And I love that so. [00:33:00] Best leadership lesson that you learned while in the army?

Lee: Boy there, there’s so many. I think one of the, um, one of the first lessons I learned and, and this is very appropriate for admissions teams, you know, that I, that I coach a lot and that is when I first arrived at Fort Knox. They set up video cameras.

Now this is back before the internet when I was in, right, this is 1992. Um, but they set up video cameras and they had us read our orders of the day in front of video cameras. Why were they doing that? Well, they wanted you to start to watch yourself, huh? And understand. Were you putting your hands in your pocket?

Were you saying ums and ahs? Because now you’re giving orders. You’re a young lieutenant, nobody cares about you, but you’re giving orders to grizzled old veterans, so you better have your stuff together. And so that was one of the first lessons that I learned at Fort Knox and, and the army was really ahead of its time in that, in listening and watching and giving that feedback.

AJ: Ooh, I love that. I actually just watched a video, someone had sent it to me about how the Blue Angels [00:34:00] practice. Before they go air. I saw that same

Lee: video. It’s amazing.

AJ: It’s a, and it’s like, it was amazing their precision and accuracy and how well they knew how the other person was gonna react and they closed their eyes and they visualize it.

Right? And but so much of that is because they’ve been watching each other and they’ve been practicing each other. And it’s so much of like, how do you become good at something you practice,

Lee: right?

AJ: And you watch yourself. Do you still watch yourself on video?

Lee: I haven’t watched myself on video in a long time, though.

I guess I do, because I’ve been on a lot of podcast interviews, so I have seen it. But I do listen to myself on phone calls. Mm. So I, I will say I do that, but. You know, it’s one of these things where I’ve tried to instill this in both my sons because my older son is graduating, uh, well, he’ll be graduating next year from Wafford, so he’s going through the interview process, you know, with internships and we practiced.

It’s like it’s not enough just to get Oh, that’s good. You have to practice with your team. So we’re always, I, I’m always available to people I’ve worked with. When they’re going for job interviews, it’s like, no, let’s practice, let, let me be the interviewer. Oh, that’s good. And like it just helps so much because [00:35:00] we just, sometimes we’re afraid because you know, you have to be a little more vulnerable.

And so, but once you can do that, now all of a sudden you’re going in prepared. You’ve done it.

AJ: We were laughing because this is something that we encourage speakers to do, is to become a great speaker. It’s like you’ve got to watch yourself on film, but we encourage you to watch yourself four different ways.

You need to watch yourself normal, then you need to turn your back to the camera so that you’re just listening. Then we want you to watch it on mute so you’re paying attention to your body movements. But then we want you to watch it on fast forward. ’cause you pick up ticks, you pick up all these little weird nuances that you don’t do.

And somebody in the audience at one of our events said, well, why would you wanna do that to yourself? Right? And we said, well, the audience had to sit through it. Shouldn’t you have to? Right, and it’s the same thing with what you’re saying. It’s like you’re making all these people sit through phone calls with you and interviews with you.

Like shouldn’t you take the time to know what they’re experiencing to become better at it?

Lee: Absolutely. Absolutely.

AJ: Okay, I love that. Watch yourself on video, y’all. Most overlooked marketing metric,

Lee: [00:36:00] most overlooked marketing metric. I think the, well, I think we alluded to it earlier, was the YouTube comments, I think.

I think you’d be really hard to find somebody in an agency that would report that number to you.

Hmm.

Lee: Um, again, ’cause we wanna, we always wanna report subscribers, which can be bought, you know, or be bought. We always want to, we always wanna, uh, report views. Sure. And it was like, okay, well did they watch the whole thing or just two seconds of it?

Uh, but comments, you know, you, you’ll see quickly are those real people? And, and, and what is the, so I, I think comments is, is a big one. And then of course, uh, you know, for a lot of my type of work, uh, we’re optimizing to the phone call. I have to have the phone call.

AJ: I, I would say for most people in our world, that’s the same as well.

It’s like most people are making a soft, off, soft offer for some sort of high ticket dollar offer. And it’s all about call conversions. Um, so that’s not different in the personal brand world. Uh, one marketing book that you think every executive leader [00:37:00] should read other than never outmatched, right?

Because definitely that the outside of that.

Lee: Yeah. Um, well, what’s funny is, I think I mentioned this in the book, uh. A book that I have by my bedside table is, uh, Caesar’s Commentaries on the Gaelic Wars. So it is a military book that was written, uh, authored by Caesar. I have that and my wife always laughs because I’ve got a a 1895 translated edition, uh, that I, that I read, and I don’t read it every night, but it is probably, it’s, it’s, it’s not, it’s.

Usually at least once a week, I’m flipping through it. So that’s where I continue to get inspiration for these, um, military strategies that have stood the test of time. Wow. Um, and when you think about, um, corporations, uh, were first started in 1602, uh, with the East India Trading Company, you know, in Amsterdam.

So a lot of times we get. We get focused on just reviewing the last 400 years. Mm-hmm. But military strategies are thousands of years old. So the [00:38:00] question is, what can you learn from the leadership, the innovation perspective of these military mental models, and then how do you apply them to your marketing?

Fascinating. So that’s, that’s what I’m constantly, uh, and that, and that’s what I’ve written in the book. I mean, it’s 12 chapters. Uh, there are 12 basic military strategies that I, that I go over and I, and I find they’re, they’re very accessible.

AJ: So I have a, a quick side question. Um, since you’ve been in the army and you’ve, you’ve been spent a lot of your years there, but also in presidential campaigns, how many, how many new tactics, how many new strategies are there?

Really, I.

Lee: Yeah, it’s a lot less than you think. Yeah, because again, we get stuck on the tactics. Mm-hmm. There’s always gonna be new things, you know, coming on our plate, new, new ways for us to reach people. But at the end of the day, there are some, some really time tested mental models, military strategies, ways that you, that you can reach an audience.

The, the, those are not things that [00:39:00] are just being, you know, reinvented all the time or invented all the time.

AJ: And that should be hopeful and promising to all of us.

Lee: Yes. And I think that, you know, uh, you know, less than 1% of the US population will serve in the military. And that’s, that’s not a critique.

That’s just where we are in today’s society. So I think a lot of these things, um, when I speak to people about some of these strategies, a lot of times they’re like, wow, they’re just not as accessible as they might’ve been even a hundred years ago. Hmm. Right before we had all this digital advancement. So I think what I’ve tried to do in this book is I’ve tried to like, kind of like, um, reintroduce.

Some of these, uh, time honored strategies that really we should all be familiar with. These, these, these, this is not necessarily, um, that I’ve just come up with all of a sudden these new innovations. Mm-hmm. No, the, you know, I’ll talk a lot about Caesar and Hannibal. I’ll use probably the most recent example I use is, uh, Norman Schwartzkoff.

And his use of the hammer and anvil in the, in the first Gulf War. But I mean, a lot, I talk a lot about, you know, Joan of Arc, you know? Mm-hmm. And, um, [00:40:00] and so I, I’m really excited to, to, to bring some of these new ideas, and that’s why I keep using this word, mental model because, uh, sometimes military strategy might seem inaccessible.

Uh, but I think there’s a lot for, uh, people to grasp and think about how they’re gonna apply this strategy right into their marketing before they start jumping into tactics.

AJ: Well, the truth is, is military strategy has been around a lot longer than marketing strategy. And there’s some timeless pieces of information that we can pull from military into marketing and leadership in general.

So if you didn’t hear me earlier. Please check out Lee’s new book. Never Outmatch. Go to never outmatch.com. Grab a copy, get the pre-order comes out, drops September 2nd. And Lee, thank you so much. Thank you AJ for being on the show. This is so good. Uh, I can’t wait for the book to come out. I can’t wait for everyone to read it.

And then one last quick question and we’ll wrap. What does influential mean to you?

Lee: Uh, [00:41:00] influential to me. Uh. I, I’m a big believer it’s not who you know, it’s who knows you. Mm-hmm. And so I have always, uh, uh, used that as, as one of my mantras. And so to have people know you, you have to help people. So that’s always, I’ve always been very giving of my time and my advice, whether they take it or not.

Uh, and so to me. Um, I would consider myself influential, though. I’m not sure you would count me as an influencer, but I feel like I have been very targeted and influential in a lot of people’s lives, and I think that’s the most important thing.

AJ: I love that, and I love what you said. It’s not who knows you, uh, it’s not who you know, it’s who knows you, but people know you because you’ve helped them,

Lee: right.

AJ: That’s the key part. I love that.

Lee: Absolutely. Absolutely.

AJ: So good. Y’all okay, AJ, stick. Stick around for the recap episode. It’ll be coming up next, and we’ll see you next time on the influential personal brand.

Ep 595: From Loss to Legacy: How JJ Virgin Reclaimed Her Brand and Dominated the Health Space

RV: [00:00:00] I have a very, very special treat for you today. You’re about to hear from somebody who is a newer friend of mine, but somebody that I followed for a long time.

This woman has four New York Times bestsellers. She has a podcast with over 20 million downloads. She has been all over national television. Dr. Oz, Dr. Phil, uh, she has one of the most recognizable. Personal brands in the world, and specifically in the health and nutrition space, which we’re gonna talk about and we’re gonna hear that story.

But more than anything, her reputation behind the scenes is just someone that I have, I have grown to have so much respect for so many people in this space have learned from her and studied under her. And I’m honored that she’s here. We’re gonna hear the story today from JJ Virgin. Jj, welcome to the show.

JJ: Good to be here.

RV: Um, we’re in Nashville. You made a trip. I’m meeting you in person with this stuff. I love

JJ: Nashville. If I didn’t live in Tampa, Tennessee’s the other state I would live in.

RV: Come [00:01:00] on. Yeah. Uh, I I, I, I get it. And, um, we’re so glad to hear to have you here. So I would love to start by hearing where you are now.

Um, I want people to get a sense of the magnitude of here’s all the things that you have going on. ’cause I don’t know that to the untrained eye, they may not realize. Here’s what the empire looks like. And then I wanna go back, and then after that I’ll take you back to go tell us about the hard road to get there.

But like, you know,

JJ: you said road and it was roads. Roads, yeah. Many, many roads. Many roads. Many hard roads.

RV: So tell us like, you know, you know, humble. No, no. Humble brag. Just brag. Just give us the where, where are you at? What’s the, what’s the magnitude of the team? How many businesses you have going on, whatever kind of.

Numbers or details you can share to give us a, an understanding of your personal brand? Right now,

JJ: actually just released one business. I’m really trying to focus, I have two companies and [00:02:00] I am more excited about my personal brand consumer company now than I think I’ve ever, ever been. Like, I am so fired up about it.

I feel like the zeitgeist of what’s going on in health is just in such a perfect place. Um, so, and I’ve really changed the way that I, I operate that business. So I, I bought it back, um, last June 30th. I was up in the air. Uh, going to Spain when it became final. So champagne. So you had sold it 10,000 feet and then you

RV: bought it back?

Yes,

JJ: I bought it back. So, um, and I really, it was in, it’s interesting, when you are buying a company back, I had to think it’s almost harder to give CPR to a company that is going down than just to start all over again. So I really thought I, and, and or not do it at all. And because I have two companies, I was like, maybe I shouldn’t do this.

Maybe I should just release this. And so I had to really dig in and go, [00:03:00] do I love this? Is this what I want? Would what, you know, the what would, what would be a dream come true? Dean Jackson statement. And I decided to go full bore with that company, but to redesign it in a different way, which is actually really great in that it is, it has got.

One employee.

RV: Oh, wow.

JJ: I have shifted that model where I have amazing agencies in brand sales, in social, in marketing. So what’s the bus? What’s that business? So, so that business is my consumer brand and what it is are books, programs, products, coaches, and a lot of brand deals. Ultimately, what I really am doing there is I am a, an integrated media personality, driving traffic to all of these different income streams that help women improve their body [00:04:00] composition and because of that, their health.

RV: Got it. And that, so that business, how many employees did it have? Like when did you start it? How many employees did you have when you sold it? How long had you’ve been out of it when you bought it back?

JJ: So I started it like, I think 2000. 2000 probably. Okay. Um, yeah. Right, right around 2000. I sold it. Uh.

2015. 2017.

RV: Okay.

JJ: Must have been 20, 20 19. ’cause it was, yeah, 2019. ’cause it was about five years and then I bought it back. Okay. Um, so right

RV: before COVID you sold it? I

JJ: sold it right before COVID and moved to Florida. Uh, because they wanted me to be in Florida. That ’cause I was part of a parent company that was in Florida.

They wanted be in. To be in Florida. So it was the universe, like had my back, okay, to move out of California, move to Florida, [00:05:00] sell this consumer brand. I am trying to remember how many employees we had at the time. It was, you know, like maybe 15. Okay. Um,

RV: and it was same thing, programs, coaching courses. It was, it was,

JJ: it was my books into, into programs, uh, not much in the way of coaching and a lot of products.

That company basically got rid of the programs, turned it into solely a product company. Um, took my name off of the products. We were gonna do a transition from my name on the products, which by the way, the only reason my products were called JJ Virgin was I was in the hospital at the time, my book and my products were launching, and we hadn’t named the product line yet.

And I’m like, we were like, just slap her name on it. I mean, we didn’t, it was like it had to be done and there was. That was it. And it was funny at the time, ’cause I watched all these people start to call their products their name and I go, don’t do that. The reason I had to do that was I didn’t have an option.

Um, and so we had searched for a new name, but we had a whole [00:06:00] plan of how we were gonna do that transition. ’cause you can’t just flip a name overnight. But when we sold it, they basically booted me out. Okay. May, 2020, I remember it ’cause it was right around Mother’s Day. They kicked me outta the company.

They’re like, it’ll be fine. You’ll get paid no matter what, so just go do other things. It actually ended up great because it was during the pandemic and my other company, which we’ve rebranded now as the Health Business Growth Collective. Okay. It’s known as Mindshare, uh, was an event-based company and we had a big event every year called the Mindshare Summit.

We had a mastermind. It was very event-based. And then we also got attacked in June of 2020 as the um, company dedicated to keeping wellness white. Huh? During the whole BLM. Gotcha. So it was like, so I got to focus completely on what to do about an event-based business that was having a PR crisis, which, you know, it was, couldn’t be further from the truth, but it all ended [00:07:00] up actually fantastic.

’cause we started a scholarship fund for, um, historically black universities and did all sorts of cool stuff. ’cause I went, well the problem is we don’t have enough people of color in the industry. That’s the challenge. We actually have more people in our group than are in the Indus, you know, percentage wise that are in the industry.

But the problem is they’re not in the industry. Let’s go back and figure that out.

RV: So you had the space to do that because you basically were booted from the farmer company. Yeah. Becausecause, I

JJ: was kicked outta the other company. So all these things that at the, on the outset looked like horrible things.

Right. Worked out perfectly ’cause I was able to focus over on the other side. Um, but when I did, they actually took that brand. I remember they changed all of the look and feel of it changed the name of it. So people thought it was a different company. So all of a sudden I started, they took

RV: your name off the whole, they took

JJ: my name off of the product line because the product line, we were gonna change it into Reignite Wellness.

We had a two year transition plan where it was JJ Virgin’s Reignite Wellness, [00:08:00] where we would keep the same look and feel. They changed the logos. They made it look like a little girl’s unicorn birthday party. Like they changed the color. ’cause all the color schemes were very clear. Right? They changed it to like these pastels and this like.

Very, it looked very different. And I literally went on the page and they had on this, on the marketing page, they go, we are all things to all women. I went, uhoh.

Hmm.

JJ: Who is marketing this? We are all things to all women. We celebrate women of all sizes, all ages, all shapes. And they had this page of, it was actually two morbidly obese women and then a normal weight woman all together.

And I’m like, what on earth? I, I am in the optimizing your body composition. World.

RV: Right? That’s your whole brand. That’s my whole brand. Get healthy and,

JJ: and, and it really is for women. 40 plus. So my whole brand is for women, 40 plus optimizing body composition. [00:09:00] You just put like a 20-year-old, you put things that would attract like women in their twenties and you’re marketing to healthy at any size, and I don’t believe in that.

RV: So what’s what’s weird to me, and I’m always curious about this, so, so you sold them the right to use your name?

JJ: I did the biggest booboo ever. So I hope, oh,

RV: tell me, tell me, I know this sounds, tell me what’s the biggest boo boo ever? The biggest

JJ: booboo ever. You know what’s so funny is. I, I’ve never been that person who could listen to a story and go, oh, I’m so glad I learned that.

I won’t do that Mistake. Nope. It, it’s like I have seem to have to blunder through the whole thing. Right. You’re the

RV: one who has to touch the hot stove. Yeah.

JJ: I am. So maybe that’s why I am a good mentor because I’ve done all the dumb things and so I can help you not do them. And so I sold my website. Like they, they had everything.

They had my social media, they had my name Uhhuh. So, ’cause jj virgin.com, all of it, right? They had all of it. [00:10:00] So all of a sudden you go to jj virgin.com and we are, we believe at health in any size. And I’m like, I, so you have

RV: 19 years of your personal brand, your research, your reputation, everything. You believe you sell this all at one moment.

JJ: Yes.

RV: And then you’re out and then they basically like, well,

JJ: it gets worse, change a lot of it. So I’m out, I have, I sell it for, um, payments over. Five years, but then a percentage of the parent company. Mm-hmm. Because the parent company was a company I worked with for years, so I was gonna help them grow.

And they had a, you know, they had a big plan of where they were gonna grow to. Yeah. And then I had a percentage of the back end, which was what I was the most excited about. Right.

RV: That’s kind of how they lured you in, is like the vision of the big picture, the whole thing. Well, because I said what

JJ: I needed to make in order for me to even consider this, like, I threw out a stupid number.

I, I’ll consider it if Yeah. And they’re like, we can do that. And I went, uhoh. So, all right. So that’s how the whole thing was gonna work with this backend. Huh. You know, and that would’ve [00:11:00] been great, except the founder decided to take some private equity. So my phantom stocks got exercised early instead of later.

Like every, like anyone who had phantom stock, which is what I had, the minute you do a a, an equity deal, they,

RV: as soon as there’s a liquidation event, it’s Yes. Uhhuh at all. At all comes to you basically at the time. So.

JJ: Basically I got a 10th of what I should have gotten.

RV: Yeah. Yeah. And then how did you get it all back?

Yes. Here, that’s, well, because the

JJ: founder’s an awesome human and one of my favorite people on the planet and high, high integrity. And so he was watching this whole thing unfold because once private equity was involved, all of a sudden he didn’t have the control he used to have. Mm-hmm. And you know, I, I came to him two years ago and I go, I cannot do this.

Like, I can’t do this. Like, I’m, this just hurts my soul. Yeah. And he goes, you know what? Well, [00:12:00] he wanted me to come back. So here’s what happened about, I was out for three years and they were mucking it up and he goes, I want you to come back. Actually, I think I was out one year. In one year. My email list went four from 400,000 people to 30,000.

RV: Wow.

JJ: Sales were. Devastated. ’cause all they did, so the marketing person that also marketed were all things to all people. So you can imagine how good of a marketing person this is. Yeah. ’cause that’s the first violation of marketing. She also, all she did was run, run sales, starts blasting your list. Like she’s the lowest life form of marketing.

Gotcha. All she did was run sales. So the list got trained to, to do sales. Right. And it never, and it just was going downhill. And so he’s like, I want you to come back. And I remember he, he pinged me about this and I would, had just landed in Orange County and I was going over to Mary Morrisey’s house to spend the night

And Mary Morrisey’s, like one of my close friends, but also a [00:13:00] mentor, she’s an ama. Do you know who she is? Mm-hmm. Oh my gosh. She wrote, uh, brave Thinking. She runs DreamBuilder Institute. She was a, um, had the biggest non-denominational church in the country for a while. She’s an amazing woman. So I go over there and she, I, she says, well, let’s talk about it, you know, is this something you would love to do?

And so we walk through it and she coaches me on it, and I come back and tell him exactly what it is, how I will do this, what my terms would be. And he’s like, okay. So basically

RV: to get back in.

JJ: Yeah. Basically to get me back. They, he created a deal where if I wanted to leave again, I would leave with all of my ip.

Wow. And so that’s lucky. I think. God. Yeah. So that’s lucky. I know. So when I was leaving, so then, because they owned your social media accounts, the books, everything, everything, everything. Like I, I was like, I’d have to change my name. So, so now, this was two years ago, or a year and a half ago. ’cause it was December [00:14:00] at a four MI talked to him and I go, I’m like, miserable.

This is like killing my soul. And he goes, all right, I, I get it. And I’d already talked to Mary about like, what would it take for me to buy back? Like, ’cause I was looking at what things would I need to get back from them because it was really only the product line. What was gonna happen is if I was gonna split, I get all my stuff, my programs, my, but they would keep the product line.

And

RV: you, when you came back in the second time. You basically pre you, you, you almost created like a prenup. You pre-negotiated it Really did. Yeah. You pre negotiated. It’s kinda like the postnup uhhuh.

JJ: So, so basically I pre, I, I had it so that anything that was my IP would come back to me. If we split up, they would keep the product line.

But the reality is the way the business had shifted and we were starting to turn the ship, but you know, that, I mean, turning the ship around is a two to three year deal.

RV: Well, there’s a, you know, in the investor community, so like in the real, like private equity, it’s that they, they say never catch a falling [00:15:00] knife.

That’s the, that’s the way they describe it is like, you don’t wanna buy a business as it’s going down. And it’s like, it’s, you’re trying to grab a falling knife. It’s, it doesn’t, it’s not easy. It’s not a good situation usually. And they

JJ: literally gave me like a year to turn it around with no cash to run ads or anything else.

It was like, okay, turn it around, but you don’t have any money to do it.

RV: So organic was the plan, like you gotta rebuild all the trust. So I came back in

JJ: and I’m like. All right. Well, I’ve managed to start businesses with no money before. Let’s see what we can do. And so I had no budget to run any kind of ads or anything else.

I now had a shell of a team. I brought in one gal who had helped Mark Hymen, so she really knew how to do these things. But I had a shell of a team and no budget. We still managed to turn this thing decently around in that amount of time, but we, I was like, I, I can’t do the things I want to do. Mm-hmm. I can’t in every, they, every month they were trying to cut more costs and I’m like.

We’re profitable. Like [00:16:00] me start to, this is classic financial

RV: thinking. This is classic. Like, it’s so awful. Just cut expenses. Yeah. To get, get your way out. I’m like, how

JJ: do we get our way out if we don’t run ads and, and start to, yeah. And they didn’t understand. They don’t understand this business of social media and podcasts and speaking and where, where you really need to spend your time.

So I bought it back and the big bummer, I was like, you

RV: bought your, I bought every non-product stuff back. Well,

JJ: so, no, I got that back. The other side was the products. And I’m like, okay, I’m gonna have to start a whole new product line. Ah, because they manufactured the products and they had reignite wellness.

Are these

RV: products, these are like, like supplements? Supplements, like physical products. Yeah.

JJ: So I, I was like, all right, what’s it going to take for me to create this new product line? And then I’m gonna have time when I don’t have products. ’cause new manufacturing, new products, you have to go through a process that’s at least four months.

Per product.

RV: This is like formulation and stuff you’re [00:17:00] talking about? Oh yeah.

JJ: Yeah. My 4:00 AM formulations that I’ve been doing, which by the way, AI is fantastic for formulating products. Interesting.

RV: Yeah.

JJ: So once you have the idea, but I ended up being able to buy the product line back for a dollar.

RV: Why?

’cause it was losing money.

JJ: I still, I know that the founder put his thumb on something. How did this happen for you? The first thing that happened is I talked to their current CEO and, and the founder told me what the CEO thought would be a great idea, which was for me to pay him 10%. Of the gross for 10 years to get the product line back.

And I basically told him, you must be high.

Yeah.

JJ: You know, so Jonathan told me the whole thing and he was like, you know, be cool about it. I’m like, oh yeah, I’ll be great. And we were actually at a Dr. Joe Dispenza meditation event. And my husband’s like, all right, now you’re like, very zen and you’re gonna get on this call.

And I’m like, I’ve got it. I’m good now. Do you know what the color code personality test is?

RV: [00:18:00] I, I think I have done this before.

JJ: Okay. So, but I don’t

RV: know it well enough to like recite it back to you. So there’s

JJ: red, blue, yellow, white.

RV: Okay.

JJ: White likes to keep the piece. I am not a white yellow. Likes to have fun.

Okay. Blue is very relational and intimacy and reds are very direct and they wanna lead. I am Super Red. The guy who taught us the color code, he goes, we’ve never in the company seen anyone at this level. So I’m like, don’t worry, honey, I’ve got it. You know, about five minutes into this conversation I am like, you must be high blowing it.

I’m like, Tim, stop it. You know? Anyhow, talk did not go well. And I’m thinking, oh great, well I guess I’m gonna have to like start my own product line. Somehow the founder managed to get this together where I got to buy the product line for a dollar, but I basically told the guy, I go, listen, that’s not gonna work.

[00:19:00] And here’s the thing. We separate our ways and tomorrow I tell everyone why I’ll never use those products again. And you know what’s gonna happen, you’re gonna get stuck with them. Mm. So

RV: interesting. You cast a very, I cast a negative vision. I was a a very negative and use that to buy it. To buy your back.

So one of the things I wanted to ask you about this, this is a a little bit off what we were just talking about. But even in your story, you talk about the amount of investment that you do personally, like at your level. You, you, you’ve invested so much into masterminds and coaching programs. Oh my gosh.

Well,

JJ: I’m here. I’m here investing in you. That’s right. You better be good.

RV: That’s right. I promise. It’ll, it’ll, it’ll, it’ll be at least above average. Um, and, um, what, what’s your philosophy on that? Because I think, I think a lot of people would assume someone at your level, you know, even with your personal brand, the story, I mean even to, you know, just to be transparent, what you’re sharing there with me, [00:20:00] right?

It’s like, look at the, you know, you’ve done all these things, you’ve been around, um, to accomplish things that people dream of, and, and here you are still investing. In yourself at this stage in your career, learning and growing, and you’ve got people who invest with you to learn from you. So what’s your philosophy there on personal growth and how much has that played a, a, a role in your journey, do you think of building your personal brand?

JJ: So when I was 30, I had my first mentor, which I didn’t realize I had a mentor. Um, she’d actually been a personal training client in my twenties. And I was in Miami. I was in Fort Lauderdale and I was going to University of Miami. And I remember walking down the beach with her and she said, so why are you getting your wiring school?

And I was getting my master’s in exercise fi and, and I go, I want to be more successful. She goes, oh, now she grew up in a trailer, had a high school education, [00:21:00] and she lived in a multimillion dollar house. And a place in Fort Lauderdale called Millionaire Mile. Mm-hmm. Where the beach is on one side of your house, and then you have a little street, and then the intercoastal is on the other.

Okay. So that’s where she lives, right? Mm-hmm. And she goes, huh? She goes, all right, what are you gonna do after you finish your graduate degree? And I said, I’m gonna go get my PhD.

RV: Okay.

JJ: And she goes, huh, why? And I said, well, because I wanna be more successful. Duh. She goes, I could teach you to be more successful.

I can teach you to make money. I go, this is not about money. ’cause I was in my twenties, Uhhuh, you know, no kids or anything else. I’m like, oh gosh, are you kidding? So I go back, I, I leave, um, Fort Lauderdale to go to USC to work on my PhD. And, and she goes, she said to me [00:22:00] on the beach, she goes, well, when you are 30, you’ll start thinking about money.

Things will shift. She’s so future paced me. Right. So I’m 30. She sends me a little box. It’s a, um, a little VHS tape and it’s from New Skin International. Yeah. And New Skin was going the direct sales company into interior design nutritionals. Okay. And she sends me this box with, and then a box that’s got the, um, weight loss program.

And I remember watching this tape and it’s people running all over the place in New York City, and there’s a clock ticking. It’s talking about trading time for money. And I’m like,

ah.

JJ: Because at the time I’d started at UCLA as a personal trainer paying my way through school and grad school. And at the time I was making like six figures in cash.

Mm-hmm. But I could

JJ: never make more than that. Then I started to hire some trainers to work for me. Then I started to go speaking because speaking would pay me. First it was a thousand dollars and it was $2,000, but it was still, I was like. F stuck. Right? And so the [00:23:00] minute I saw that tape, I’m like, oh my gosh.

I dropped outta my PhD program. I got rid of all of my stuff. I drove across the country and I moved in with her and she’s like, I’m like, teach me. Right? And what I didn’t know was she was actually the biggest mindset trainer of the distributors in New Skin. Oh, interesting. Yeah. Okay. And so I move in with her and all she does is coach me on mindset.

And it just becomes like, there are no, you know, there are no limitations. The only limitations are in your mind, there are no victims, only volunteers. Like thoughts create all of the Zig Ziglar, you know, Wayne Dyer, all of that. She turned me on to Nightingale Conant, like I was managing everything, thinking mindset.

And so that’s, that’s how everything shifted. And then after that, I just, it just changed the way I operated. Right. Dropped outta the PhD program, started thinking about how I could duplicate myself into other people. Mm-hmm. But I didn’t have [00:24:00] another mentor until 2007. And I was listening, uh uh, I was talking to, do you know who Joe Cola is?

Uhuh. So Joe Cola is very well known in the health business. He started the biggest natural website in health and I was launching a book, and Fab Mancini was like, you should go meet with Joe Mercola. So I did. And Joe said, jj. And this was 2000, it must have been 2005 or 2006. It was maybe 2006. I was on Dr.

Phil every week. I had a website. It didn’t have that little box to get your name and email.

Mm.

JJ: So I have my website. I’m on Dr. Phil. I’m thinking someone is gonna discover me. I’m working as a nutritionist now. I’ve learned how to package things into programs. I’ve got some people working for me, but I’m still stuck.

Right? Like I’m still like trying to figure out how you get past 25 KA month.

RV: And this is 2007. So you’ve been at this for seven? This is like 2005. [00:25:00] Yeah. Okay. So you’ve been at this for years. But I

JJ: mean, literally I started as a trainer in college, right? There were a couple of us, mark Sisson, Tony Horton Body by Jake.

Like the first personal trainers.

Yeah.

JJ: You know, in the eighties. So I’ve been at this. For decades,

RV: uhhuh,

JJ: and I can’t figure out how to get past, like, you know, so figure

RV: out like 20,000 a month, 25,000 a month in revenue. Yeah. Like

JJ: stuck. Stuck.

RV: And that’s revenue. That’s not income. You’re, that’s revenue you’re paying.

Right. But I don’t

JJ: have a whole lot of ex, I, I don’t have a ton of expenses. Sure. But still I’m stuck. Um, and I’m also teaching doctors how to put supplements in their practices. So I’m getting commissions off of that, but I’m still stuck. I’m like, like 300 grand. Okay. Stuck. And I’m making, yeah, I’m netting maybe about 150, 200.

And so I go, I’m sitting at dinner with Joe Cola and he goes, the money is in the list. And I go, what list?

Yeah,

JJ: which list? Show me the list. I’ll get the list. And it was the [00:26:00] list that if you had the box on your website, I would’ve had. And so literally he tells me this and he says, go read the four hour work week.

And so I read the four hour work week. I’m convinced that there’s a missing chapter. Somewhere because like I I, the joke is I read the four Hour Workweek and started working 80 hours. I started like Gary Veen, as did all of us. Yeah, yeah. I’m like, and uh, but when I read it something, there was a, something about Dan Kennedy in there and then I like.

Was Google, Dan Kennedy. And then he was doing a call with Ali Brown. And I remember listening ’cause it was a woman because instead of all these dudes and I went, I bought her Boost business with your own easing. And I bought this little program for $197 and I started an easing. And then that started actually doing something and building a list and making money.

And then I went to one of her workshops and she was selling a mastermind and I didn’t know what a mastermind was. Mm-hmm. And [00:27:00] it was a hundred thousand dollars. She had an $18,000 and a a hundred thousand dollars one. And before I knew it was a hundred thousand dollars, she was talking about this and how elite it would be.

And there were very few people and they were gonna be the best people. And I’m like, o, obviously I’m gonna join that. And I told everyone around me I was gonna join that. And then she said what it was and I wrote a bad check and joined it.

Mm mm

JJ: Which I don’t tell, like do not do that. Um, but it changed everything.

RV: So you joined this a hundred thousand mastermind

JJ: I did with no money. I like was, did not have the money to join this. And then you were like,

RV: I’m gonna do this. You know what, I’m gonna figure it out. Yeah, it it paid

JJ: off. It totally paid off. I think one of the best things you can do, ’cause, ’cause constraints, foster creativity, but like if you can totally afford something, you don’t pay attention.

Like if you could charge people just slightly more than what they perceive they could afford. ’cause a lot of that’s just a perception anyway. They’d pay a lot more attention.

That’s the secret right [00:28:00] there. It

JJ: is. Like that first easing course I bought for 197 bucks was a stretch. So I paid attention and I put it all to use.

And when I joined that a hundred thousand dollars mastermind, I burned out my adrenals crazy that year. ’cause I was gonna squeeze every penny out of it.

RV: Uhhuh.

JJ: But I mean, that first year I came in with nothing. Like, I thought I had a plan, scrap the plan. I made $550,000 and I felt like a failure because Lisa Sasovich was in, and she went in and went from I think like 130,000 to 3 million, and I’m like, okay.

I, I, I’m lame.

RV: I mean, this is an interesting thought as to go, you know, in some ways it’s a service to charge people a little bit more than what they’re comfortable with because that makes them show up as a bigger version of themselves. Mm-hmm. That makes them pay attention. It makes them invest, it makes them, like, it puts their back against the wall to where they, they activate versus if everything is comfortable, you just don’t change.

Like, you don’t show up, you don’t do the work. [00:29:00] That’s, I think that’s a really important lesson for anyone that struggles with charging more for what they do. Thinking that, well, I want change the world. I want to help people. I just wanna give it away. Not realizing that. In many ways, it is the fee that you’re charging that causes the transformation for the person, because now they’re, now they’re invested in doing the work.

JJ: I don’t know if you know Simon Bowen, but he has a great statement. So I, I always love to credit people that I, if I can remember where I heard it, and he talks about the moment they pay, the healing journey begins. Mm. What you said is never more true than in the health space where people have so much money, mindset issues and they feel like they shouldn’t charge if they’re healing people and they try to give it away for free.

And it’s always something I coach our members with because every single one of them has tried to do this for free. I have multiple times, I’m like, how many times do I need to learn this lesson? If you give it away for free, no one pays attention. And the more [00:30:00] they pay, and that’s all relative, it’s like lifting heavy weights, right?

It’s heavy for them. The more they pay attention. It’s like you, you’ve got to charge people, so they will actually. Take it seriously.

RV: Yeah, I mean it’s, it’s interesting to me, you know, like we have some pretty high profile clients at Brand Builders group and, and, and it’s like you also attract a really amazing group of people, you know, but assuming you’re charging something that you can deliver upon.

But, uh, I think that’s super powerful. Okay, so this leads me to one of the other things I wanted to ask you about. Health is like one of the most noisy, if per, if not perhaps the noisiest space on the planet. I mean, you have health, money, relationship, spirituality, like those are the topics that apply to everybody.

And because they apply to everybody, there’s a a million bazillion people. Somehow. You have managed through your journey to become one of the most recognizable health [00:31:00] voices, experts, influencers, whatever term you want to use. Why do you think you were able to do that? You know, I, I’m interested in the how, but I’m, I’m actually interested in why, why do you think you actually broke through the noise in one of the most competitive populated topics and spaces when so many people want to do it and somehow you managed to do it?

JJ: Hmm. I’m looking at the different, different levels of breaking through and I would say I just kept taking the next step out of my comfort zone. And I was just driven, like when I got to Palm Springs, I moved to Palm Springs from North Carolina and I had two young babies, like literally a six month old and a year and a half old, [00:32:00] and a, a husband who didn’t wanna work and we were not independently wealthy.

Hmm. He just. Like had his parents had pushed him into law. He hated law. He wanted to teach tennis. And, um, I was like, uhoh, you know. And so I went into overdrive and looking back, like the less he did, the more I did, so the less he did, so the more I did. So the, like, you, you look at it now and go, you know, it, it, it just was a, a perfect storm.

Like he’s the sweetest guy, but I was like, okay, this is ridiculous. But because of that, I was like, I have to be successful to take care of these kids. And so I’m looking at Palm Springs and I’m going, Hmm. Affluent area. I can pull this off. How do I market my business? I’ll get on local tv.

Hmm.

JJ: And, and I just was on local TV all the time.

And speaking at all the country clubs and everything else. Well, the minute I was on local [00:33:00] tv, um, you know, then all of a sudden I’m used to being on tv. So that when I met a doctor who needed help with the Dr. Phil show, I was used to being on tv. I went over, it wasn’t my first rodeo. You know, people always talk about how they wanna be on this big show or big podcast.

I go, you actually don’t wanna do that until you’ve gone, like, I remember being on one of the, I agree a hundred

RV: percent with this. Oh my

JJ: gosh. I was on local TV and I didn’t know about powder. So I taped a show and we were doing like some of the segments we were gonna air on the show at a gal’s house.

And for six hours I did not put any face powder on. It was very hot. It looked like literally my face was like a swimming pool. Hmm. You know, I also didn’t know about like, best sides in your hair. So I did a whole thing where I looked like cousin, it, you know, that’s nice. Like, oh my gosh. So you just learn.

And I remember, um, just taping a segment where they go, listen. If you’re doing tv, it’s sound bites. I’m like, sound [00:34:00] bites. You know? So I learned so much stuff before I ever got to Dr. Phil or Dr. Oz, or Access Hollywood or any of these things. I knew what to do. So that then they would call you back, you go on national TV and flub it, you’re done.

RV: Mm-hmm. So, uh, some of what I hear you say in terms of answering that question is you succeeded because you had to, it’s almost the same as the answer to your question about like the a hundred thousand dollars mastermind that you joined. It’s like, well, I got my investment back on it because I had to.

JJ: Right. Well, and here’s the, here’s the thing. What I’ve discovered about myself is that I, and I, I, you know, that I would start to put myself into situations that would force me to have to be successful. So after, you know, after that, like the Virgin Diet. I remember my son was in a very serious accident where he nearly died.

And the night it happened, a month before the book was gonna [00:35:00] launch, I literally was holding this one finger. He’s in a coma, promising him that I was gonna bring the troops and do everything it needed to be to get him to be 110%. And then walking out the door. And Ali Brown called me and she goes, now I know you’re really going to nail this.

And Brendan Burchard actually flew into LA to help me with the book launch. Like, wow. But I knew, I was like going, oh, this, this book has to be a massive success because this is how I’m gonna bring my son back to life. And so like, I kept getting into these situations where success wasn’t optional. And then after the, after that, I started to put myself into situations to make it happen again, because I kind of felt like it’s sort of like a, a, you know, a professional athlete who.

Thinks that they need a certain condition to be successful. You know, I do think we get too comfortable that you have to give yourself a [00:36:00] reason that you need to be successful. Otherwise you’re just gonna get to a place where you’re comfortable. Right.

RV: You mind sharing with everybody what happened with your son?

’cause this was a pretty, this was a very horrific situation. This was a horrific situation. He was 12, right? He, he was 16. Oh, 16.

JJ: 16. My, um, other son was 15 and it was literally like a month before the book launch. Um, it happened September 11th because I remember thinking, oh my God, it’s September 11th, you know?

Yeah. Um, and the book Pubbed, I think early November, but we were starting all of the launch stuff in October and I’d been taping all the PBS special stuff that day, the things that I needed for the program for PBS. And so I was doing a PBS, special ed, all these things lined up. And I come home, my son goes out to walking, you know, at dusk to go to a friend’s house and gets hit by a car.

Mm-hmm. And we don’t even [00:37:00] know what the heck happened. Um, we just know that this neighbor pulled around, saw a woman, get out of her car, gasp, drive off, and he literally was on the pavement. Uh, 13 fractures, torn aorta, multiple brain ble, brain bleeds in a deep coma, airlifted to the local hospital. And when we get there, now it makes sense the way they handled it.

Um, fortunately my husband was a medical malpractice trial attorney in his old life. Right. So it made sense the way this was. The doctor wanted to handle it, and because of his background, it really helped us. Not have that happen. The trauma surgeon when we walked in said we needed to let our son die.

That he sometime in the next 24 hours was gonna pass away that this aorta, every hour that chance of rupturing increased by 10% and we couldn’t airlift him to the next hospital ’cause he’d never survive it. And [00:38:00] even if he did, he wouldn’t survive the surgery. And even if he were to survive both, he’d be so brain damaged, it wouldn’t be worth it.

Mm-hmm. So we’re listening to all this and my son Bryce is listening and my son Bryce now they’ve been around me with the mindset mentor who’s now completely how I live. And he’s used to me saying things like, you know, the only limitations are the limitations in your mind and thoughts create and blah blah.

And he, so he is looking at this doctor and he goes, sounds like maybe there’s a 0.25% chance he’d make it. And doctor says, that’s about right. He goes, it’s not zero, you know, and, uh, good for him. Yeah. And. I literally walked out at that point and said, grant, what, what, what do you want? Because I’ve always been very connected with him.

And I was like, you know, and I just heard a fight from me mom. Mm. And so my ex-husband’s like, we’re overruling you. And, uh, you know, and he started to use the litigious comments that a [00:39:00] medical malpractice attorney would use. Hmm. And so that doctor got into high gear, but you would understand it was Palm Springs, California.

This doctor was used to dealing with 80 year olds, not a 16-year-old who was, looked like a linebacker. Yeah. And very stubborn, you know, he had a lot of muscle mass on him. That’s really what saved him. He had a family that would go all in, you know, and, and that’s what we did. We literally, like, I had Dr.

Amon come into the hospital. I like, we went all in. We’re like, what do we need to do to bring you back out of this? But, uh, I was up against the wall again and I literally, all I focused on was. Grant’s gonna be 110% book is going to be huge. And I broke my very first million in business in October, sitting bedside with my son in a coma.

And then I broke my second million in business at the next hospital we transferred him to in December. I hit the New York [00:40:00] Times list, and then I hit, I think it was number three, and I stayed on it for 26 weeks. Wow. And, and you know, I had rolled the dice so hard because A PBS special, there’s no guarantee it was a $200,000 investment.

RV: You invested 200,000 uhhuh to be on tv

JJ: to do the public to, when you do a public television, um, show, basically you fund it. Either PBS will fund some of ’em. Okay. But then you have no creative control. So you fund it. Now, Daniel Eman had kind of showed me the ropes on it and I’d gotten his old producer who did his and Pearl Mutters and hymens so and so I’d funded it and now I had to go to all of these PBS stations.

But if the show doesn’t work, it doesn’t work.

RV: Right. And it’s your money on the line.

JJ: It’s your money on the line. So basically I’d gotten a half million dollar advance for this book. I’d invested it all in the [00:41:00] launch between PBS. ’cause not only do you have to fund the show, you have to fund the backend packages with all the books.

Hmm.

JJ: So, so you have the books with the, it’s books and a bunch of other stuff. So figure each one of those costs you about $25 to put together and you have to have at least a thousand of those. You’re

RV: saying to sell them on the show, like Right. People watch the show, they buy the thing, but you gotta pay for the inventory.

You gotta pay for the

JJ: inventory in advance. And then PBS pays you. A month or two after the fact. Yeah. So you’ve gotta front all that. It’s

RV: cash for nightmare. Mm-hmm.

JJ: And you gotta go out to all these places. You gotta fly all these places, you know? And I had my book launch and my team like all these things.

Wow. Yes. So I still remember this because I had taken the whole advance, invested in all of these things. And then I was doing a free plus shipping book launch to, to launch the whole thing off. And I had 11,000 books and we sold out of [00:42:00] those books in under 24 hours. Wow. And what I hadn’t planned on is that, and I didn’t, I was like, uhoh, now what do I do?

I hadn’t planned on two things. I forgot about the amount that shipping would cost.

Yes.

JJ: And that I’d need another $50,000 for shipping and I didn’t have any money. And I was like, okay. Oh, come on. I remember walking through going, are you kidding? So I was like, $50,000 under and I ’cause you sold out of

RV: everything.

JJ: Yeah, because I’d forgotten about the shipping costs. I hadn’t factored them into that. Like you didn’t collect enough? I didn’t collect, I didn’t collect enough to cover extra shipping. I just forgotten it. It was another fee that I was like, oh shoot, I forgot that part. It all worked out. I don’t remember how, but it like showed up.

’cause I was like, come on. You know that it showed up and we sold out of all the books. So I literally called Mary Agnes, who you will meet tomorrow. And I’m like, we need a guide. And here’s what’s crazy. So [00:43:00] we create a guide. So everyone now, because we have all these people who were helping because they really wanted to help, especially now because of grants.

So they’re all now sending to the guide. So we gotta, we had like over a hundred thousand opt-ins. Between the free plus shipping and the guy, like crazy amount of stuff going on. So it actually catapulted the whole thing. Hmm. So, yeah, broke my first million, broke my second million, broke 6 million the next year.

I mean, it just went ba boom.

RV: And then your son survived. And

JJ: my son. So, you know, he comes outta the coma. And by the way, when people come out of the coma, it is not like tv.

Hmm.

JJ: You know where they come. I thought he would, the doctor said when he comes outta the coma, it will be ugly. So I thought he would come outta the coma and scream or something.

And he comes outta the coma and he stares off into space and he had cast on his leg still. He had a cast in his arm. And all he did was move one arm back and forth for [00:44:00] days and stare off in space. And I’m like, oh no. You know, uh oh. And so I started doing everything I could to try to wake up all of his different senses.

I brought in popsicles, I brought in aromatherapy. I would like, just, and he just started coming through, you know? Hmm. But it was, it was like, it was such a mindset management thing. ’cause I had, I just would not allow myself to see him anything but 110%. But there were times that it’d be like uhoh, it’d be like a Friday night in the hospital.

I’d be all by myself. ’cause my, uh, ex-husband and son were home in Palm Desert and I was in LA and the hospital would give me a room to do podcast interviews. I was doing LA TV shows. Wow. And it was just craziness. Crazy.

RV: And then he, but he eventually came out of a coma and then

JJ: he came out of the coma and then he was in, and when they come out of a coma, it’s ugly for months.

[00:45:00] Years. It’s not ugly for a little while. It’s, it’s ugly and they have no filter. So he would go between, he would get like kind of scary, violent where they’d have to medicate him down and they didn’t know how to handle him at that hospital. It wasn’t a rehab hospital. So we then got him over to Children’s Hospital.

So we had him there for a couple months and then it was really clear. I was like, I think we could do better at home. They wanted to keep him there for months and months and rehab him. I’m like, I think we can do this. We got him into like a really great training gym and we just did it at home. And that’s where honestly, my ex-husband’s like the most amazing human for what he’s been able to do with my son.

Wow.

JJ: And bring him back. But you know, I mean, he didn’t know how to talk. He could, I mean, couldn’t remember anything. He had to learn how to walk again, everything.

RV: But he did. He did. Ultimately, he runs, however, how many years did that take to where he, he recovered?

JJ: It took about a year and a half to [00:46:00] really bring him back.

Mentally. He had worked with a speech therapist, like to even know, like, that’s an apple. You know, everything, you know, find words, put words together again. Wow. Um, it’s, yeah, it was crazy.

RV: And meanwhile, you’re paying for all those bills and trying to get this amount, the amount of money.

JJ: I’m like, okay. He’s like the $20 million, I mean, the amount of, because when you look at what it costs, the, a lot of the things that really were instrumental in bringing ’em back are not covered by insurance.

Mm-hmm. Like we did stem cells right into his spine. I had a great doctor who was kind of at the forefront of all of that. We did neurofeedback, we did hyperbaric, we bought a hyperbaric. I mean, we just so many different things because fortunately. I’m in the field. Yeah. And I have all these amazing friends.

Friends, yeah. Who know all this incredible stuff. So we were able to do a lot of stuff. But I, you know, nutrition was one of the first things.

RV: Yeah. That, that, that’s [00:47:00] such an incredible story. And I’m so glad. I mean, that he recovered, you know, there’s, there’s this theme that I’m seeing with your life and this journey of, it’s like, I’m investing to the point of discomfort.

I’m in this uncomfortable situation. I’m succeeding. ’cause I have to, you know, it, it also, as I’m listening to you talk, I think there’s a lot of people have this pride point of like, I’ve never spent money on ads. Right. And people will say that like, I did X, Y, Z without spending money on ads. And every time I meet a hu, like a very successful personal brand, it’s like.

You know, they spent tons of money on advertising coaching. Like, it’s, it’s the opposite. It’s not the pride point of like, I spent nothing. It’s, I invested and reinvested as fast as I could. Yeah. Am I, am I hearing it accurately in your story? That’s, yeah,

JJ: that’s, that’s how I’ve looked at everything. Like a book advance to me.

It’s like, okay, then you invest in marketing. You know, it’s not, can I afford it? It’s like you can’t afford not [00:48:00] to. You look at the most successful people, they’ve never done it by themselves. If I could go back and tell my younger self, like it would’ve been hire mentors, find groups way earlier, I just didn’t even know they were a thing.

Hmm.

JJ: And you know, I mean, one of the devastating thing of the last five years is not being able to run any ads. I mean, imagine that like having a company that stopped all your advertising. Hmm. I mean, crazy. Yeah. Crazy stuff. Yeah. Well, it’s a,

RV: it’s interesting. I mean, so we, you know, we, we built, our first company was an eight figure business.

We never spent a dollar on ads. Brand builders group. We started in 2018. We built that to eight figures in five years. Less than half the time of the first company. Never ran money on ads. And now I’m like, waking up to go. That shouldn’t, that’s not a, that shouldn’t be a pride point. Yeah, that should be a, like, what are you doing?

But I was doing the same

JJ: thing, I’ll tell you like, like I [00:49:00] was, you know, one to two to six, no ads, never ran any ads, sold the company like we’d done a little bit, barely, and then brought the company back. I’m like, get the ads rolling. You know, it’s like, it’s like, why wouldn’t you? Pour a little gasoline on the fire, why wouldn’t you use all of these different things?

RV: Mm-hmm. Well, I, it, it, it’s, I don’t know. It’s like sometimes people think it’s cheating or they think, uh, they shouldn’t have to do it. Or I think particularly for our audience, you know, we, we say that we serve mission-driven messengers. I think that there are a lot of people in the world who think, well, I’m, I’m an artist.

I’m an expert. I’m sort of above advertising. I, or I’m above the marketing. And what I’ve realized is, no, there’s two parts of your art. There is the art of what you do, and then there’s the art of telling people about what you do. Marketing is art. Marketing is part of your art. Otherwise, you’re just creating [00:50:00] stuff that nobody sees, nobody listens to, nobody benefits from.

And so, you know, I wonder how much sometime is, sometimes it’s just that, like, oh, I’m, my stuff is so good. People should have to find me. Versus the humility of going. I, I don’t deserve, like, I have to go fight and, and hustle and, and tell people that I’m here and that you know, that what I’ve created, because otherwise I’m just gonna be overrun by other people who are,

JJ: well, what I used to see on, on Dr.

Phil is that a lot of the experts they would have on TV weren’t the best experts. They were just well spoken. And I, it was interesting at the time because I was going into a lot of different doctor’s offices, helping them put nutrition into their practices. But I couldn’t just do that. I had to start with the marketing piece with them because I would meet some of the most brilliant, brilliant practitioners.

But they couldn’t explain what they could do in [00:51:00] a way that anyone would ever understand and grab. And they were the best kept secrets. And meanwhile, the person who wasn’t really very good at what they did is sitting here on national TV and getting all of these, you know, all these accolades. I’m like, this, this is mixed up.

It’s backwards. So you owe it to your patients. If you really want to transform the world, you’ve gotta be exceptionally good at marketing. And you don’t have to, it’s the, you know, Ben Hardy who, not how you don’t have to learn all the things, but you better get your messaging down. You’ve gotta get your messaging down.

Mm-hmm. You’ve

JJ: gotta be able to do a really good signature talk. You better be able to nail an interview. You’ve gotta be able to tell your stories. Like 20 years ago, you didn’t have to do all this stuff. You wanna be an expert. Nowadays, it’s skill development.

RV: Hmm. Yeah. I, I think that, that, that. Is it, it’s a much more competitive landscape.

I mean, personal brands, and [00:52:00] this is part of why I wanted to interview you and hear your story about selling the company and all of that. I think personal brands are trending towards a level of sophistication that is competing with like private equity and normal entrepreneurship. Right? They’re realizing that like you, you know, this is big business.

Uh, I mean, co I was on Cody Sanchez podcast recently. She’s one of our clients. I mean, they have a team of very sophisticated people who are running an operation. We see someone like, oh, here I am on social media. Like, it’s just like I flipped out my phone and it’s like there’s an army of people. There’s ad spend, there’s data analytics.

There, there are, there are world class employees who are very skilled, who are, are we are now competing against, even though it looks like, oh, this is a person with a phone. But to, to make that kind of global impact. I think that’s. I think that’s trending more and more, especially as the power moves from media companies to individuals.

Money is moving from media companies to like [00:53:00] personal brands and so it’s like the sophistication is also coming along with that. It’s like you don’t just throw up a website like it’s, it’s, those days are over. It’s a big machine now.

JJ: The days where you could write an email and send it and people opened it are over the days where you could invite someone to your teleconference call and sell a five part series are over.

Yeah, but here’s what’s exciting. This is the era of the brand. It is the era of the personal brand because of ai. I believe that this is where we really have an opportunity if we develop our skills. And again, talk, talk about that. I wanna

RV: hear, I want to hear as someone who’s been in this industry for a while, like you, this wasn’t, you were in this industry before.

Personal brand was really like an industry. You’ve been at the top of this game. Tell me about ai. What do you see happening with ai? How does it affect personal brands?

JJ: Well, I think what’s [00:54:00] gonna happen is because so many, it’s so crazy to think of the things that we’re using AI for, when, when you figured it would be much more for like lower tasks, not the more creative tasks, but it will never replace that person telling the story.

You know, it’s, it’s, I know they keep saying, oh, you’re gonna have the AI avatar, but still the podcast, the, the standing on a stage speaking, it’s not gonna be able to replace that hopefully. Right. And so what does that mean? That means we have to be really good at being able to tell our story, at being able to, to relate at being able to interview, to be interviewed.

We have to sharpen those saws. That’s where I think we need to really double down is, is learn to be a better speaker, lean into great speaker trainings, you know, learn from people like my buddy Lisa Nichols. Um, you know, I am constantly doing speaker training. Mm. Because I think [00:55:00] that skill is the single best skill we could have, and you can never be too good at it.

RV: Mm. Yeah. I love that. I love that. Um, I’ll make a little secret. So Ed Millet and I are working on a speaker training thing that we haven’t announced yet, but you can stay tuned for that because, but that’s so powerful to hear about, like this idea of. It’s the human skills, like leaning into the human skills.

’cause AI takes over all the more like operational stuff, the researching, the prep, like a lot of those things help. But yeah, there is something just magic about this. You know, we only started doing these in-person podcasts like a few weeks ago. Uh, we’ve been hosting this show for seven years, but we didn’t invest in having the space and everything.

And it’s just like there’s a magic to this that is just so much better, so much better. It’s so much better. It’s, it’s harder to coordinate, especially with, you know, people who are busy. But, um, that’s amazing and, and encouraging. To me, that is an inspiring to me to hear you say that, to [00:56:00] go no matter what happens with ai, more and more it’s just gonna create this, almost like this craving for the attraction of the, the human interaction, the human element.

And therefore investing in those skills, which in some ways maybe have gotten pushed down in the past maybe 10, 20 years of the soft, the soft skills. They’ve been like the soft skills. Are kind of coming back Right. And being more, more important. So, uh, JJ, this has been amazing. Uh, where do you want people to go if they want to learn more about you?

Stay connected. Uh,

JJ: well, jj virgin.com is mine again. Boom. Yay. So, two things. That’s, that’s my consumer world. And then we also have rebranded to Health Business Growth Collective. Mm-hmm. Which I like. It was so funny. We did all of our rebranding around our Mindshare collaborative and we did the new logos and everything else.

And we were in London [00:57:00] last year and I woke up one morning, we were doing a meditation. I’m like, uhoh. We need to change the name and uh, ’cause we, we’d been doing some work there and I’m like, they don’t know what Mindshare is there. So I’m like, oh, I love it when that epiphany

RV: comes after you’ve spent 50 grads.

It’s always, it’s always after

JJ: that it was like, we worked with left right labs. I’m like, oh. And so Tim pulls up and I think, you know what I’m gonna tell him on the plane. I’ll tell him on the plane from London to Tampa because he’s stuck there with me. So if he gets upset, he’s stuck

RV: strategy. And

JJ: literally he pulls off his eye mask after the meditation and looks at me.

He goes, we need to rebrand. And I’m like, get outta my head. Oh wow. We’ll take it. Yeah.

RV: We love that. So, so, yeah. And you have amazing people in this community. Oh my gosh, they’re incredible. We’ve had a couple of our clients that I know you’ve had a ma a massive influence on over their career and um, it’s just really, really great.

Well, uh, jj thanks for [00:58:00] the stories. Thanks for sharing the experience and. Going on this journey. And, and I have to say, I’m, I’m so inspired by the fact that you continually, intentionally, deliberately stretch yourself just a little bit outta your comfort zone.

JJ: We have to, well, I gotta tell you one thing sticks with me.

This is my, my concept of how you can continually stretch yourself outta your comfort zone. And I think it all comes down to your physical body. When you do hard things, when you work out and you push yourself and you do hard things, it shows your, your mind. And actually, Dr. Andrew Huberman talks about this, like you form new neural pathways that tell your body you can do hard things.

And so then you get faced with scary things in life and hard things in life. You’re like, I can do these hard things. So I know this is a business podcast, but. Go do hard workouts too.

RV: I love it. I love it. Well follow jj, give her some love [00:59:00] online. Say hello, drop a comment, share this episode with somebody who needs to see it, and push yourself outside of your comfort zone so that you can, you can confidently declare and build the, just the, the, the promise of knowing you can do hard things.

It’s, it’s not the thing you have to avoid. It’s the thing that you have to do. That is the key to everything else. Thanks for tuning in. We’ll catch you next time on the Influential Personal Brand Podcast.

Ep 594: 10 Things You Can Do to Better Manage Your Marriage and Run a Happy House | Casey & Meygan Caston Recap

[00:00:00] Run your house, like you run your business. That’s some of the very best marriage advice that Rory and I got during our newlywed season, and somebody came up to us and said, Hey, listen, you guys. Have figured out how to operationalize and systemize so many things in the business arena. What we encourage you to do as you move forward in this new marriage endeavor, which was now officially 15 years ago as I record this you need to treat your family, your marriage, your household, like you do your business.

So the systems, processes rhythms that you work so hard, tirelessly to create in your business. Put as much energy and effort into that into your household, which I would say our marriage and family follow up under, and you will see success in both now. I got prompted to record this video after a awesome podcast interview that I [00:01:00] did for the influential personal brand with Casey and Megan who are the founders, Casey and Megan Caston, who are the founders of Marriage 365.

And I encourage you if any of being that I share resonates with you, go listen to that full episode. But it, it reminded me of this advice that we were so fortunate, so lucky to receive. In the very early months of getting married all the way back in 2010. And one of the things that hit me is that I have a lot of friends in the entrepreneurial community.

One I. I am one too. I live in Nashville and there’s a huge entrepreneurial community here. But also as a part of the blessing of being a part of this brand builders group is we have a ton of solopreneurs and entrepreneurs and those aspiring to be that. So I get to hear a lot of the things that are working and, and things that are not.

And I’ll tell you something that I have found is an interesting trend. And not I’m not casting anything other than [00:02:00] love and light to everyone that I have learned from. But here’s what I would say. One of the biggest things that I’ve learned from my entrepreneur friends is that I have to create.

A system for running my house like I have for my business because so many of my friends in this arena, they are winning at business, right? Their, their businesses are thriving, their teams are great, their company culture is great. They’re winning at work, and they are struggling at home. It. They go from thriving at business to chaos at home.

And here’s what I know for any of us who live in a dual environment, if there is an area of your life where you’re winning and there is an area of a life where you’re struggling, what are we as human beings naturally prone to do? Right. We’re gonna go to where we’re winning, right? Because that’s where we feel accomplished.

That’s where we get accolades. That’s also where we get paid, right? Versus the place where I’m struggling and I’m not [00:03:00] appreciated and nothing I say works and I come home to chaos. And it doesn’t have to be that way. Right? If, and you don’t have to be an entrepreneur to get this right, but it’s like if you have a tight schedule at work.

Make your tight schedule at home, right? If you run off a, a certain rhythm at work, why can’t you run off that same rhythm at home? Right? If you have onboarding manuals in your company, then why on goodness gracious, do you not have manuals for your house? So with all of that said I really started thinking after this of like, why?

Why? Do. So many of us live in these dual word dual worlds of we’re winning at work and we’re struggling at home when it doesn’t have to be that way. We know how to do it ’cause we do, we do it over here. But how do we transfer this professional feat that we’ve done to the personal one in our marriages and our families and in our households?

So. By no means do I have this. Figured it out, figured out. I most certainly do not. But I have learned 10 healthy [00:04:00] practices that are helping us move more towards the way of having this figured out with a long way to go. But I thought I would share 10 things with you that can help you run a better house and a better marriage.

So, take the best, leave the rest. But here are the 10 things that I have learned over the last 15 years. Of running a house, running a business, and having a marriage that works. Number one, you gotta have a weekly meeting. Rory and I started this a few years ago, and we have a weekly meeting every Monday from 8:00 AM to 11:00 AM.

We do our very best to not book over that if, if we have to, we reschedule it. But it’s a three hour meeting and we are married in business together, so a bulk of that meeting is talking about work, but another part of that meeting is running over our families. Weekly schedule, right? Is the nanny working?

Is anyone traveling? Do we have any evening events? Do we have any morning commits? Do we have sporting events, but we do a healthy [00:05:00] review of like what’s happening in our lives this week at work. And at home. Is there something hard coming up? Is there a celebration we wanna be prepared for? Is it gonna be a tough week?

Should it be an easy week? Like we mentally and emotionally prepare on Monday mornings for the week ahead for our family, our house, our kids, ourselves, and our business. A part of that is redefining, like making sure date, night on date night is on, the babysitter is on, here’s what we’re doing. But we have a plan.

Right. And I think that’s the number one thing to take away from here is like, do you have a plan for how you’re running your family? I. Your marriage, your kids, your house. If not, that’s step one. And by simply adding a meeting to, okay, we don’t have a plan, we just need to have a meeting to get a plan.

Start there and then make it a weekly recurrence, right? For us, we do it at the start of the day. Maybe you have to do it after the kids go down. Maybe you have to do it earlier in the morning. Maybe you have to do it on a weekend. Doesn’t matter. It is worth it. So, weekly meeting. Second thing is have [00:06:00] a family shared calendar.

We use Skylight. I’m not an affiliate for Skylight. I get no perks for recommending Skylight. It’s just a tool that really works. It connects with Gmail or Outlook. But I found that having everything into my Outlook calendar was too overwhelming. I needed my Outlook calendar. That was just all the things.

Work And our skylight calendar is a shared calendar that we can share with grandparents. We can share with our childcare support our nanny and it, it has our family schedule. Travel sports schools, spring breaks, vacations. All the things, but it’s a shared family calendar in addition to our work calendars.

Number three is we have a house manual, right? And one of the things that we learned is that we kept. Going over the same exact stuff all the time of like, how do you change this frigging filter in the fridge again? Or, Hey, who, who, who’s the, who’s the kid’s eye doctor that we saw that one time? Or where do we go to get the oil changed?

Or, you know, [00:07:00] who is that vendor? Or, or who’s the, who’s the phone number for the, the lawn maintenance? It was all this chaos. It was chaos. It was just chaos. So years ago, probably seven years ago, probably right around when we were pregnant with our first child somebody gave us the advice of like, y’all need a house manual.

How does your house run? Right? What are the vendors you use? Where like we have a, a little reference for all the manuals, for the refrigerator, the microwave, all the warranties are organized in this house manual. The phone numbers, emergency contacts where we buy certain things. The rhythm for certain things of like, Hey.

April 1st schedule, power washing you know, October 1st schedule, Christmas lights. Here are the vendors. It’s all the things so that somebody else could step in and help support us, or if we were gonna do it, we just go to the manual. We do this at work all the time. It’s called SOPs. We built a family, SOP, we built a house, SOP, and it changed our life.

It made things so much easier. We [00:08:00] put the time in on the front end to save hours, if not dozens, hundreds of hours later on. So a family or a house manual. Okay, number four. Schedule on a recurring basis, all routine things and appointments. We do this on an annual basis, all doctor’s appointments, car appointments vacations when we go get groceries, when we do meal prep how often we get gas to make sure there’s always gas in the tanks all the things, right?

And, and that may seem excessive, but again, it’s like whatever you don’t plan for, you will be reactive to. So this is a proactive measure of going, how do I create peace in my house? How do I create peace in my family? So those are routinely scheduled and on the calendar, they’re on the shared calendar for the family calendar, they’re on my work calendar if it interferes during a work schedule.

Right, or it coincides. Not always interferes that. I think these are really important things of going, no, we have rhythms and routines to [00:09:00] our schedule for our health, for our spirituality, for, you know, maintenance. Like all the things are done, scheduled on a recurring basis. Just follow the schedule, right?

Just look at the calendar and go, and it, again, it’s about peace, right? Number five, a weekly date night. This is one of those routines that’s a non-negotiable for us. We started this in the very early years of our marriage. Again, someone gave us this great advice. We took it. Never looked back. Wednesday night is date night.

And Rory, he’s my husband. He continues to court me and date him to date me. Right? It’s his job to plan the date. So, this is one of those places where as the. You know, type a wife, I have to surrender, control and go, whatever it is you choose, I will do. But it’s, it’s the process of dating, right?

This is how you keep a healthy marriage. It’s connected time and it’s like, it’s a non-negotiable, right? Find the sitter, drop ’em off with friends, figure out a barter arrangement. But we have to have time protected time [00:10:00] for our marriage. Right, and that’s about prioritizing that. So, a weekly date night, we also prioritize our family.

So we do a family date night. We do Friday night family night. And this is where the kids get to pick family activities. We go bowling, we go biking. Sometimes we do movie night. But this is something that we all collectively get to look forward to and so that they don’t get sad when we leave them on Wednesday night.

We’re always talking about what we’re gonna do on Friday night, family night, right? So those are two types of recurring rhythms. That help protect our marriage and bond our family. A weekly, a weekly date night with just me and Rory and a Friday night family night with us and our kids. Number seven we have a family bookkeeper.

I cannot recommend this enough. And now again, that’s has to be within your means and has to be within your budget. But this could be someone that you hire. For just a couple of hours a week. This could be someone you hire for a couple of hours a month. It could be a family office. There’s lots of different things that you could do here, but a [00:11:00] family bookkeeper has saved us so much stress, so many arguments, and so, so, so many hours.

Of work, right? Someone to monitor our budget help us pay our bills, help us keep things in line for taxes. And I can honestly say in the 15 years that I’ve been married and the 18 years that Rory and I have been together, I can honestly and transparently say that I can count on one hand how many disagreements that we’ve had about money.

And that is because we set a budget, we stick to the budget, and we have someone helping us. Hold us accountable. We have someone doing the prep, the plan, the tracking, the review so that we can stay aligned and on the same page. And to me, I would rather forfeit dinners out even vacations in order to have that level of peace in our family and in our life.

So, a family bookkeeper would be on my top 10 list. Number eight, outsource, automate, or delegate. Things that you cannot do. Physically or time [00:12:00] constraints or that you’re just not good at doing or that you simply just don’t want to do. Right? And this, again, this is within your means and within your budget.

But outsource, automate, or delegate, what am I talking about? It’s make sure you’re enrolled in online bill pay. That would be an automate one. Outsource or delegate would be like if you just really. Despise laundry. You know what? Hire a high school student or a college student or find someone on care.com and pay the 20 to $30 a week to have someone come in and do that, to give you that one to two hours back.

Right? And what would you do with that? Right? Could you go on a date night? Could you have an hour to yourself? An hour with your kids? Like, right, maybe it’s my husband does not love. Lawn care that’s not his gifting. And instead of doing something else, we invest the money to have someone else take care of the yard.

’cause it’s not what he wants to do after work or on the weekends. Right. But those are budgetary decisions while we have a family bookkeeper of going, what are the things that just [00:13:00] don’t bring us joy? Like what are the things that create stress are. Chaos or havoc in our families. And we’re, we’re deciding how to use the means and the money we have to create peace to create something that works for our family.

Doesn’t have to work for every family. It just has to work for your family. Number nine. I said this before, but I’m gonna say it again. Prioritize your marriage. Time together. Time away, right? So we have a weekly date night. We also try to do a quarterly getaway. Sometimes those don’t fall exactly once per quarter, but it’s two nights away.

Right. And that’s important. It’s not in your house, right? It’s not with your kids. And honestly, this takes a lot of creativity. We don’t have family who live in our town, so, whether we’re having to coordinate with parents who live out of town we’re asking friends to help, but it’s like. We, we are doing it right.

We are trying to figure out a way to make it work because we know that a happy marriage makes a happy family, a happy, and Rory AJ makes a happy [00:14:00] two little boys, right? And that is a really important part. We also know that anytime that we feel stress in our marriage, stress in our family is a sign of we haven’t had alone time.

In, in a long time, right? So, we have a quarterly rhythm and sometimes it’s a one night staycation. We can’t get away for two nights. We can’t leave town, but you make it work. Prioritize your me your me, your marriage, pursue each other, right? Continue to get to know each other, date each other beyond your wedding date.

One of the things that I would say that you always gonna kill me for sharing this tip with you guys but something that has really helped us in this pursuing is for special gifts throughout the year, and for this is married couples only. I am not advocating for sex outside of marriage. This is.

For within the marriage bed only. This is my recommendation for women or men, depending on, you know, how it all works in your marriage. But I give him for Christmases, Valentine’s and a anniversary [00:15:00] present sex coupons and sex coupon is free reign. For him to use it at potentially inconvenient times, that gives him a hundred percent confidence he’s always gonna get a yes.

And I will tell you what, it’s a mutually agreed upon gift that helps us prioritize our marriage, helps him pursue me, and helps me pursue him. Right? These are the exchanges that you gotta have to decide of like, how do I pursue my spouse? How do I love on my spouse? And I have found that this is the best gift I’ve ever given my husband, ever.

And so find a thing that allows you to have that. Play full time with each other and to do something that gives you free reign to be a married team. Right? And that’s a part of it, right? And then last, but definitely not least, is you have to learn how to make time for yourself. And I say you have to learn because it, it, the time doesn’t just appear.

That doesn’t exist, but you have to learn [00:16:00] how to make time for yourself. You have to prioritize it, right? Everyone in my family knows that a stressed AJ is not good for the family. And I know that for me, my alone time is made up of being outside. Alone time inside is no good for me, right? It’s like I need to exert energy.

I need to be outside and I need my alone time. And for me, I need time with the Lord. I need time to sit and settle and be with the Lord if I’m going to be a healthy, happy, productive human being for our company and for our family, right? And so if I have to get up early, then that’s what’s gonna have to happen.

If I have to delay a meeting, it’s like alone. Time is precious. We don’t get enough of it. And I don’t mean alone time in front of a tv. That is not what I’m talking about. Alone. Time is mean. Actually having time with yourself, you can think, you can pray, you can journal you can be fit, you can do healthy stuff, you can be outside, but find something that actually allows [00:17:00] you just to be.

With yourself. And I know that anytime that I’m stressed, my husband will say, why don’t you just go take a walk? And what he’s really saying is, you need some time alone. So we have to be as the, the managers of our family productive and aware enough to know that I just need to take a step back and have some alone time so I can reset and come back a better person.

Those are my 10 things that can help you run a happy house and better manage your marriage.

Ep 593: From the Brink of Divorce to Empowering Millions: How Casey and Meygan Caston Built Marriage365

AJ: [00:00:00] Hey y’all. Welcome to the influential personal brand, AJ Vaden here. Uh, we got a special episode today that is personal in nature, and we love doing episodes like this every so often because in the world of talking about personal branding and tips and technologies and strategies, sometimes we just need to take a step back and also look at the other parts of our life that are really.

Foundational and fundamental. And today we’re gonna be talking about one of those parts on the topic of marriage because as an entrepreneur who is married to an entrepreneur who is in business together, uh, this is a never ending topic at our house. And, uh, what I have learned over the last. Few months, as I’ve been talking to a lot of brand builders, group members and podcast listeners is there’s a lot of you out there who are on the precipice of going into business with your spouse.

And so I thought this would be an amazing episode, uh, to [00:01:00] not only hear from two people who are married. And working on their brand together, uh, but two people who actually speak about marriage. So that’s what we’re gonna be talking about today. And so we are joined by Casey and Megan Caston. These are the passionate co-founders of Marriage 365, which I have got to learn.

So much about over the last several months, and I love, they also have a new booklet just came out. Uh, you guys are gonna learn all about that. They have an amazing app. We’ll talk more about that later as well. Um, but they have an amazing, uh, and powerful testament to resilience and love as they’ve transformed their own struggles from the brink of divorce into a thriving resource for couples.

Everywhere. And, uh, that includes, uh, not just people who are married in a business together, but it’s all types of couples from all different types of walks of life. Uh, they’ve been married, uh, I believe now for almost or over 22 years if [00:02:00] my, uh, memory is correct. Uh, but they also have over a decade of experience helping couples reconnect.

And so today we’re gonna talk about something that might be controversial in nature, which is. Couples don’t need more therapy, they need more tools. So Casey, Megan, welcome to the show.

Casey: Thank you so much aj. Excited to be here. Yes. It’s weird that marriage is our business and our business is marriage. Yeah.

So it is a nonstop conversation around our world to like, how do we manage the business and our marriage at the same time? When that’s our business.

Meygan: Oh yeah. We, we’ll get in like to an argument and then immediately after I’m like, Ooh, that would be a really good podcast episode. It’s like, okay babe, chill out.

Let’s just like calm down from the argument. But it’s funny because every time we have an interaction, we learn, we fight, we argue like every other couple, um, you know, we’re like, how can we help other people that are in the same situation as we are? [00:03:00] That’s what we do.

AJ: I love that. Uh, and you know, uh, what a great way to make every argument a successful piece of your content,

Meygan: make every argument count.

AJ: That’s right. That’s right. Um, I love that. And, uh, what I would love to do, um, is kind of, you know, start with some of the, the meat and tools, and then I’ll probably backtrack a little bit and talk about how you guys got here. But since I’ve led with that provocative statement of, you know, couples don’t need more therapy.

They need more tools. I would actually love to start there because I think that we, even before I hit record, we were having this conversation, I’ve, how the default is with any relationship, any marriage that’s struggling, it’s like, oh, we need, we need to go to therapy. Mm-hmm. And you guys are going, no, couples don’t need more of that.

They need better tools. They need more tools. Yeah. So can you just kind of like, well, one, how did you come to this? You know, you know, recollection of like, no, it’s not that, it’s this. And then what? [00:04:00] What are the tools that we need as married couples?

Casey: Yeah, so I think when we walked into marriage, like all of our friends, we just kind of felt like love is all you need and we’re just gonna wing it.

And I think there’s so many people that feel like that when it comes to their love life. They just kind of go off on the whims of whatever they feel in the moment. And I think that that is very damaging to long-term relationships because Megan and I got married and then I thought love would carry us through the day.

But what happens when I don’t feel love? Then I, then I thought there was something actually wrong with us, and that’s what took us down by year three, we, we grew to actually hate each other because we, we had all these expectations over how you were supposed to treat me and you were supposed to be there for me.

Then you let me down. And all that missed expectations just led to anger and resentment and it was very explosive for us. We’re very, we’re both fighters competitive and we’re probably more different than [00:05:00] we are alike.

Meygan: Yeah, on top of being very stubborn people. Stubborn, so then very stubborn. Then you kind of start to think, you know, did I marry the wrong person?

And I think all these couples go through those questions. Did I make the biggest mistake? Did I marry the wrong person? Oh my gosh, we’re falling out of love. And this whole idea of therapy, I mean, therapy’s only been around for what, a little less than a hundred years. So what did all the millions and millions of couples do from the beginning of time?
It’s the longest institution we have on the planet. What did they do? They couldn’t go to therapy. And what do you do if you can’t afford therapy? What do you do if you have a spouse who’s unwilling to go to therapy? Which by the way is the majority of couples. These are so many good questions. Yes. What do you do if you don’t have a great therapist in your area?

I mean, I know we’re both fortunate to live more in areas where there’s a lot of. Resources and therapy. There’s a lot of people in small towns that they don’t have. If you go to the one marriage and family therapist, everyone in your town’s gonna know about it, and everyone’s gonna talk about it and go, Ooh, what’s wrong with them?

Casey: Right. And so that [00:06:00] just can leave a fe a a couple feeling very stuck. Mm-hmm. And from a biblical worldview, you know, we, we see that there’s biblical principles, uh, that make things work. They’re found in the Book of Proverbs, we always consider the book of Proverbs to be actually be the book of marriage.

Mm. Because. And, and, and when you think about Proverbs and even like New Testament James, like very practical, very tactical. And when you think about a marriage relationship, you can’t give a platitude to get somebody out of anger and resentment. You have to give them tools to be able to navigate conflict, talk about uncomfortable topics and, and to, to even plan for the future.

So I think there was a big aha. Especially as like, we’re trying to, we’re like building our business. And when we think about walking into this area and domain of our life, you know, we’re very practical. We’re tactical, we’re looking at goals, we’re looking at frameworks. How do I build [00:07:00] and scale a business?

And when I talk to entrepreneurs, which, which most of our listeners, right, they’re all, we’re all trying to build a brand. We’re building a business. We’re listening to podcasts, we’re receiving content and information, and how do I structure my business? What are my operating system for my business?

Mm-hmm.

Casey: And so working with entrepreneurs, they totally understand that I. But then when they walk through the front door of their home, it’s just the wild, wild west. Yeah. It’s chaos. You’re reactive. Mm-hmm. And it’s like I walk, you know, when I walk into the office, I’m like thinking Stephen Covey’s seven habits of highly effective people.

Be proactive. First things first. Yeah, yeah, yeah. And then when I walk in the home, it’s like, be reactive. The priorities are all out of whack. Like, I’m not, you know, trying to learn and grow. And that becomes the place where a lot of couples find themselves struggling because they haven’t been intentional [00:08:00] and they haven’t been curious with that.

I have

AJ: a question. Yeah. ’cause I think that is, uh, spot on what you just said. ’cause it’s, I live in a very entrepreneurial, you know, connected community, uh, here in Nashville. And what you just said is true. I’ve almost. Everyone that I know, it’s like, you know, it’s like they run a tight ship at work and when they get home it’s complete chaos.

Yeah, yeah. And we were really fortunate to get some amazing life advice early in our marriage. ’cause we were, I don’t know if you guys know this, we were business partners, Rory and I, before we fell in love and got married.

Meygan: Oh, I did not know that. So we started

AJ: in business. Wow. Before we fell in love and got married and.

Somebody just told us very early on, maybe even before we were formally married, but they just said, Hey, let me give you a tip that’s gonna help you in every aspect of this partnership [00:09:00] together. And they said. Run your house, like you run your business. Oh, I see. That’s great

Meygan: advice. Yep. Great advice.

Whoever that was. Thank you.

AJ: And so and so we did. Yeah. Um, like from the moment that we got married, we’ve always had, like, this is our household calendar, this is our business calendar. We have a household, uh, manual of like how the house works, what does, like, we’ve literally treated it like that. That was not of our own volition, right?

There was somebody who came in and said like, this is the best advice I can give you in this season of life you’re in. And it’s treat your house like you treat your business. But most didn’t get that advice or they haven’t heated that advice. And since you guys have worked with so many couples like this, I would just love to know like.

Why is that? Like why are we so wired to do it in one aspect of our life and completely negate or ignore it in another?

Meygan: Yeah, I think honestly, it’s a cultural thing. I think that we invest so much into our children’s education, which is great, and then we go to college and we get really passionate about [00:10:00] our career and that pathway.

Right, right. And there’s nothing wrong with that. We’re all for that. We, I believe, and Casey believes this too, and we are seeing this now, and I think especially after Covid, our relational IQ is depleted. It’s not there. It’s non-existent or it’s very weak. Where we are really good in our career. Or our hobby, but we are not great at relationships, emotions, feelings, communication within relationships that matter.

And so Well,

Casey: people wanna go where they’re winning too.

Meygan: Yeah. And you wanna go where you’re winning. So if you’re winning at work, you’re not winning at home, you’re gonna escape to work. And not only that, but you get a paycheck and you get attaboys at work. Right. Where at home it’s. You might be getting nitpicked or

Casey: you just get dirty diapers

Meygan: Yeah.

To do that. Right. Um, your kids don’t thank you until they’re older. That, and so it’s kind of thing good. Yeah. And so I think that what we’re seeing is this cultural shift and it’s very slow, which is good. It’s going in the right direction where people are realizing it’s not working [00:11:00] what we’re doing.

Mm-hmm.

Meygan: We’re neglecting the most important thing, which is connecting with others. Right. Our, our work is meaningful because we believe in it, but that. Can can shift any day, right? Like you could lose your job tomorrow. You could get in a car accident and be parallel. I mean, we just don’t know what tomorrow holds.

But if we’re connected to our spouse at home and that’s like the mothership and our family’s running well then, then we’re good to go. So I think, again, going back to your example, see you guys didn’t need therapy. You got a tool. And you utilized. There you go. The tool. And it worked for you. And that’s what’s amazing.

And listen, we’re not here to, to harp on therapy because part of our story is I went to therapy by myself because he wouldn’t go. Mm-hmm. We’re very pro, by the way, individual therapy. Yeah. But again, not everybody can afford it. Not everyone’s gonna go.

AJ: Yeah. It’s expensive. Hard to find good people, hard to afford it.

Not covered by insurance out, I mean, yeah. Yes.

Meygan: You know what, AJ too. It’s a very slow process. You know, a once a week, [00:12:00] one hour session is not enough for most people by the time they go to therapy. I think that’s the other thing, like the the way it is is, is

Casey: it’s hard now, and mind you aj, we’re, we got a unique perspective because we probably get.

Two to 300 dms a day just on Instagram. And the story is the same. We’ve spent thousands of dollars and months and years in therapy. Yeah. And all we do is just talk about our problems, but we don’t have a tool. Solution. Yeah. Or a solution. And that to me, right there is where again, like. Uh, marriage is so tactical in life.

Like the way you run your marriage is the way you run, actually a lot of things in your life. Yeah. Um, and that’s why what actually one of the tools that we talk about is the weekly marriage business meeting, which you kind of actually do with Rory, which is once a week Megan and I walk through our calendars.

Yeah. We look through meal plans. We have a, a whole list. We’ll, we’ll send that to you so you can share that with your, your audience, but

love that.

Casey: Um, it is a [00:13:00] weekly meeting and it sets, it sets intention. Yeah. The right expectation and we find alignment for the week ahead where we’re actually calendaring time for us too.

Mm-hmm. Or alone time. Like I need some self-care time. I need to work out. Right. I got, I gotta put that in the calendar, but I walk through the week now being very proactive and when I do have those evenings with Megan, instead of talking about the schedules. We actually get to connect

Meygan: and have fun together.

’cause we

Casey: already talked about all the transactional stuff. Yep. We’ve talked about the logistics of life

Meygan: and we say it cuts conflict, 50%. Oh, easy for every couple. Easy. And, and honestly, aj, we fight if we don’t do our weekly marriage business meeting, because then that word means we’re not aligned. And wait, you said you’d be home at six?

Well, no, I said seven 30. Well, we didn’t talk about it, so that’s why we are. Adamant every Sunday night after the kids go to bed, well, now they’re teenagers even when the kids are up. Um, when they were little, it was after they went to bed. We, we talk about it and there’s something that’s a little [00:14:00] controversial on that worksheet, but we schedule sex.

We’re adamant boo the kids for scheduling sex. And we always tell people this, if you are having spontaneous sex and both you and your spouse are satisfied with the quality and the quantity. Then you don’t need to schedule sex, but if one of you is wanting it more or you feel like it’s not happening ’cause you’re so busy, which.

People probably look at us and think, well, you work together and you’re talking about marriage. You have all the time in the world to have sex. Even we struggle to find time. Like we’re busy. Yeah. I worked like a 12 hour day yesterday. We didn’t have sex, so that’s why we schedule it. You know what,

Casey: tomorrow’s though, babe.

Meygan: I know. Hump day. Hump day. Wednesday night. Our kids Wednesday, our kids go to youth group every Wednesday night. Guess who’s having sex? So don’t come and knocking on our door by the Wednesday. So

Casey: we put, we put in the calendar nap time. Nap nap time. It stands for Naughty and Playful.

Meygan: Oh, that’s hilarious.

Yes. The way

Casey: the kids, if they see the calendar, they’re like, oh, it’s just nap time. Okay.

Meygan: We don’t wanna, we don’t wanna put like sexy time and then our teenagers are like, Ew, [00:15:00] gross. I remember though, this is a funny like, side note that our daughter, she um, like did catch our phone when she was eight and she’s like, why are you taking a nap at nine o’clock at night?

AJ: Oh my gosh. So bed. Um, because

Meygan: moms all the

AJ: things when your kids grow up and they’re

Meygan: gonna be like, oh my gosh, I know. Yeah. They’re gonna hear this and

Casey: they’re gonna be like, ah,

Meygan: yes. But yeah, so we even schedule sex. And I think that what’s really cool about it, and obviously you can tell we’re passionate about this, is that we schedule doctor’s appointments, dentist visits, oil changes.

Mm-hmm.

Meygan: Uh, podcasts, like being a guest on a podcast was in our calendar with a reminder because it’s a priority for us, right? Yeah. It’s, our brain is our largest sex organ. Yeah. So if we go into marriage thinking and sex, wow, this is something I get to do. Like I get to put this on my calendar and I get to prioritize it.

And then Casey on Wednesdays is so much more nice and thoughtful and true foreplay all day long. Like, I mean, but it’s

Casey: Tuesday and I’m already thinking about Wednesday.

Meygan: Yeah. And I’m, yeah, and I’m I, and it’s funny ’cause [00:16:00] they, people say, well, gosh, doesn’t it feel so like forced? I’m thinking again though, if your brain is your largest sex organ and you’re going.

Into it feeling that, yes. But after we enjoy sex, we’ve never been like, well, that wasn’t worth it. Of course. We’re like, why don’t we schedule it more? Yep.

AJ: I’ve been reading, um, the book, it’s an oldie but a goodie, um, what to say when you talk to yourself by Shad Helmstetter. And one of the things that I’m constantly reminded of, ’cause it’s all about positive self-talk and all that, our entire company is reading the book, um, as our Q1 book of the quarter.

And it was a great reminder to me. It’s like we can train our brain, right? Yeah. And we can reframe, rewire, uh, we can condition ourselves and our brain is gonna naturally react to whatever we feed it the most. Right, exactly. And a lot of that is routines and habits. And it’s like back to scheduling, right?

It’s like, it, it does become this, uh, muscle [00:17:00] memory of like, oh no, this isn’t just in my schedule. It’s not so, you know. Non-intimate because it’s, oh, it’s in my calendar. It’s like, no. It becomes a part of muscle memory of like your body starts to know like, Hey, every Wednesday, like this is coming. Right?

There’s all those natural things that start to happen, uh, that make it less. I don’t know. Scheduled per se. Yeah. Yes. Uh, but it’s, it’s the, it’s whatever I tell people all the time, it’s like, whatever gets me to do the thing I’m supposed to do is worth me doing the thing to get me to do the thing I’m supposed to do.

There you go.

Meygan: Yes. Right. Whatever. It’s in marriage. We are advocates for having a shared calendar. Yeah. And putting anything you need to mm-hmm. With reminders. Text My Spouse a flirty text. Put it in your phone. Yeah. That’s okay. If it doesn’t come natural to you, then make it, make it habit of it to put it in your phone to remind you.

Casey: Well, and aj, I, I wanna actually want to, uh, kinda riff on that concept of having the right mindset that leads us to successful relationships because, you know, um. [00:18:00] For, for your listeners. We’re all entrepreneurs. We all actually have these two essential mindsets that Megan and I have kind of sussed out that like creates successful marriages.

And the first one is curiosity. So as an entrepreneur, we walk into the marketplace and we go. What is a problem I can solve? What kind of gifts and talents do I bring to the marketplace? And how can I solve a problem such that I can make a profit, earn a living, you know, sustain my family? And there’s a lot of curiosity behind that because you try, a marketing effort doesn’t work.

Meygan: What do you

Casey: do? Let’s get curious. Why didn’t it work? Why didn’t

Meygan: it work? Let’s, let’s, let’s,

Casey: let’s try a different way. That didn’t work. Let’s try a different way.

Meygan: Constant AB testing. Yeah.

Casey: I mean, I think marriage 365, we, we felt called, we knew that God had called us. There was so many different, like, like iterations of the clouds parting and it said something about marriage for us and we were like, well, what do we do?

[00:19:00] What do we do next? We got curious and I think when we come to our relationship. We’re very curious when we first start dating our partner.

Mm-hmm.

Casey: Right across the table. And you’re looking at this person just like enamored and like you’re just like, who is this person? Tell me your hopes and your dreams, your desires, where you wanna go in life.

What’s your childhood like? Tell, tell me everything. ’cause I want to know, and while you’re asking all these great questions. What happens is you’re communicating without communicating it. I desire you.

Mm. I

Casey: I wanna totally pursue you. Totally. I wanna know more about you. And that right there, that fuels attraction.

I. Okay, so what happens is then we get married and then we get stuck in the routines and the wash, rinse, repeat of the weeks go by and we stop getting curious. Yeah, and it’s not

Meygan: intentional. No. We’re not waking up purposefully saying, I don’t wanna know your heart. [00:20:00] We just get busy or distracted, or we turn on the tv rather than turn towards each other and curiosity.

We should never stop being curious about our spouse, their hopes, their dreams, their fears, what’s going on in their world because. We change, we evolve as humans, but also we need to continue to get curious about ourselves. Ooh, gosh, why did I respond that way? Ooh, when my husband said this, I got triggered.

What is going on inside of my heart? Yeah. So curiosity isn’t just about the other person, it’s also about you as a couple and you yourself.

Casey: Yeah, and I, I use, I like to use the image of a lattice in a vine. Okay. If curiosity is the vine that kind of crawls all over and you know, finds these little nooks and crannies

The second, second mindset is intentionality. And intentionality is the lattice that holds the vine together.

Mm-hmm.

Casey: Because again, as entrepreneurs, we realize if we wanna sustain a business, we have to be intentional. Going back to being [00:21:00] proactive, right? Mm-hmm. To weekly marriage, business meeting. Could you imagine Rory?

I’m sorry, aj, uh, if you walked in. To your, to brand builders and you were like, okay guys, this week everybody just do really good work and just, just go out there and do great work. And And you didn’t give them a plan. You didn’t tell goals. Yeah. It just would be chaos. It would be chaos. And that to me is, you know, we walk into building a business very intentional by learning and growing.

Hiring coaches, hiring you guys, right? When we launched our book, we hired you guys because you guys were gonna give us the structure on the plan, how to launch a bestseller. We

Meygan: needed a plan, we needed next steps. We had no idea what we were doing. Right? And you provided that.

Casey: And so aj, like the same thing happens, is like we walk into relationship relationships.

We stop being intentional.

Meygan: Yeah. We were intentional when we were dating. I mean, you [00:22:00] know, if, if. Rory didn’t initiate a date.

Oh yeah.

Meygan: Right. You’d been like, snooze fest. Something’s wrong with this guy. You know? Like he’s not being intentional. Like if he, if you were on a date and he was kinda like, yeah, whatever you wanna do, like whatever.

And he was really passive. You’d be so turned off by it. We’re so intentional when we’re dating and again. We get married. It’s not that we intentionally wake up to not be intentional. It happens. We get busy, we build resentment of the kids, get in the way, whatever the reasons are. But intentionality provides that structure.

Like the weekly marriage business meeting would be a great example.

Casey: Yeah. Otherwise, what happens is we just kind of have a slow drift, and I think that’s probably the most dangerous and maybe most common thing that we see in marriage is. We started off with a goal, with intention, with curiosity. Mm-hmm.

And then just slowly we, we, we get off one or two degrees and the months go by and we don’t really see like the damaging [00:23:00] effects.

Meygan: Yeah.

Casey: But then when you compound that with the months and then the years, and then what we’re seeing now is when, when people start to empty nest, they’re looking at their partner and they’re like, we did all of this life together.

Meygan: Yeah. Have

Casey: roommates.

Meygan: We raised our children well.

Casey: Yep.

Meygan: But I don’t even know you. I don’t know if I even like you anymore. And that’s why the empty nest phase is now the second most common time for couples to divorce. So the number one is year four to 10. So when the kids are little, really high demand.

Yeah, just really difficult. Right. We’ve all been there. And then the second time is, is empty nesting. So that’s telling us something that couples are slowly growing apart.

Casey: So we’re, we’re trying to be out in the society, bang the pan pots and pans going, Hey,

Meygan: hey, hey, don’t do that again. Going back to they don’t need the therapy.

Like I maybe, maybe some people do with some severe trauma and things like that. Please go if you’ve got that. But the majority of couples actually just need really good tools. Hmm.

AJ: Yeah. So I would love to talk about that. Like, and I know that we can’t cover all of it, but if you guys were to say [00:24:00] like, Hey, these are the.

Two to three tools that will revolutionize your marriage. What would those be? Uh,

Casey: well, the, the weekly marriage business meeting. Yeah. That’s about, that’s we, we just, that one. That’s absolutely number one. We get the most feedback from that, that couples say, this changed our marriage. Yeah.

Meygan: The second one would actually be asking open-ended questions.

Oh. Which

Casey: is

Meygan: our book that came out in 2024. Um, there’s basically a question a day and. This is supposed to spark, um, really great conversations about everything. There’s fun questions. There’s deep thought questions. There’s self-awareness questions, questions about money, boundaries. What, what you do? Sex.

Sex, yes. But the goal is that couples, just like when you were dating, you talked about. All these things and found each other interesting that you would continue the conversation. And so, um, it’s interesting actually, ’cause I’m not sure if you know, we actually self-published our book back in 2018. [00:25:00] We’ve always had something called connecting Questions.

That’s what we call ’em, connecting Questions that Marriage 365. And we’re like, what if we put ’em in a book and we made one a day? Perfect. Our brands Marriage 365, like this is a no brainer. Perfect. And I remember telling Casey like, okay, what’s our personal goal? Making goals, right? It’s like, okay, if we sell 5,000 copies in our lifetime, like we did a great job as a self publisher.

Remember, books

Casey: don’t do that.

Meygan: We sold 5,000 copies. In three months.

Yeah.

Meygan: And we were like, okay, we’re onto something. And 5,000 copies turned into 50,000 copies. And then just a little company called Penguin Random House, heard about it, uh, back in 2024, and they said, Hey, we’d love to buy it and update it and revise it.

I love that. It’s been a huge, huge, amazing blessing. But what I love again is it’s a tool. It’s a tool for a husband or wife to just open up. And ask the question of the day. If you don’t like the question, flip to a different question. Yeah. You know that that’s okay. But that I would say [00:26:00] is a non-negotiable if I were to say the weekly marriage business meeting, asking open-ended questions, you know.

AJ when, I love

Casey: that, when hurting, when we were hurting in our marriage. It’s not like I woke up and I was like, I just don’t care about Megan. I really did care about her. I just didn’t know how. Mm. And I, and when I coaching a lot of husbands, the desire is always there. Mm

mm

Casey: I just have to know that like the desire is always there.

It’s just the know-how. And so I, you know, I think a lot of the tools that we, we build and we work through and we teach are tools that we look at. You know, poor Casey, Megan struggling, didn’t have a guy to mentor. You know, we didn’t have a healthy family upbringing. Like my mom’s been married six times.

Um, so, and be, and be fact between both sets of parents, we have 12 marriages. So it’s

Meygan: a, it’s crazy. Wow. We have a model’s a lot to,

Casey: to work off of, and. I wish I could have given this book [00:27:00] to, to that struggling couple because then even in the midst of the hurt, we would’ve had a guide to, to talk and connect.

Yeah. Yeah. So, yeah, I mean,

AJ: I’m just curious to hear from you. Um, ’cause I think, you know, if, you know, kind of in this entrepreneur conversation, right? If we run our house, like we run our business, like everyone who’s listening, like, just imagine if you didn’t have team meetings. Yeah, exactly. Like imagine if you didn’t have a list of goals for the year or a budget, or you didn’t talk to your team and you, you didn’t ask questions.

Or what if they didn’t ask questions? Yeah. Like could you imagine how well things would not be going? Yeah. If we did those things as entrepreneurs, as business people. But even if you’re not an entrepreneur of just going like, imagine in your work. If there was never a meeting Yeah. Or a plan or got am I imagine being onboarded, right?

Mm-hmm. When I think about getting married, right? Imagine being onboarded to a new [00:28:00] company with no onboarding. Yeah.

Meygan: It’s like,

AJ: here you go. Yeah. But that’s what we do in marriage.

Meygan: Yes. Right?

AJ: Yes. So many of us, and I love what you said about the book, ’cause I think the book is really important of like just helping people have conversations and I would just, what I want, the question I have for you is.

What do you think gets in the way of couples talking to each other? Hmm. And asking questions and. You know, it’s like, I just think to my, ’cause I even use myself as an example. It’s like I talk all day long, right? Yes. I ask questions. I’ve in meetings all day long and often, like when it is just me and Rory, I’m like, so what do you wanna talk about?

Yeah, yeah. You know? Yeah. Um, now part of that is because I’ve been listening to him talk and he’s been listening to me talk all day. But, uh, even without that. You know, there is saying we work together. Yes, I get it. I mean,

Casey: if we work together all day long, it’s not like at the end of the day, like, tell me about your day.

Yeah. I’m seeing I was sitting next to you all day long. Don’t

AJ: you [00:29:00] know, weren’t you listening? I told you all day. Yes.

Meygan: Yeah. Which is

Casey: funny ’cause I mean, if you find us on a date, we have our book next to us.

Meygan: I mean, that’s what’s, that’s what’s so, so I think what stands in the way is, let’s just talk about some, some really simple, obvious ones.

Busyness. Mm. People are busy. You know, um, if it’s a child-centered marriage where the kids dictate your schedules again, and you’re not doing a weekly marriage business meeting, yeah, you’re probably never going to really have that time to connect because you’re gonna have to talk about the logistics and you’re trying to just go, how was work and what’s for dinner, which are just really boring questions day after day.

Um, I think another thing actually that a big one that we’re seeing is resentment. Years and years of, you haven’t taken me on a date. Um, my wife’s been nagging at me, whatever’s going on. Um, yeah, I feel like you don’t initiate sex. There’s a lot of really big hurts and people don’t realize that Basically what resentment is, is unforgiveness.

So our spouse did something or said something. We have pain now. Right. It, it hurt and we have that choice to forgive or to let it go. [00:30:00] And if we don’t forgive. It becomes resentment, which then now that hurt has taken root in our heart and in our thoughts, and so you could use to compartmentalize it up in a garage and it’s kind of stored away.

But now the resentment. Like when you sit on the couch. Yeah. You’re like, I don’t really wanna talk to my husband. I don’t really wanna talk. I dunno if I really like, they really hurt me. And resentment, definitely unresolved issues, resentment, things like that. And that in away, and that’s sad. That’s sad

Casey: too, because one of the things we fight for is trying to teach people the tools on how to actually repair your relationship after you’ve heard it.

Yeah. Because

Casey: we’ve all made mistakes. We’re all gonna make mistakes, we’re all gonna hurt each other. If you have a tool on how to repair the relationship.

Meygan: Then, you know how, and so then I think kind of what you said, aj, of like, okay, I don’t really know what to ask. I genuine genuinely believe that after a long day of working the kids, it’s really hard to come up with a question.

So if you’re listening and you’re like, I, I want to do that, this sounds amazing. Don’t feel bad, Casey and I are just like, they’re with you again. Which is [00:31:00] why we use our. Own book. I love that. And, and so that’s why we wanted to provide a tool for couples to say on the go, if someone travels, take a picture of a few questions to, to answer.

When you’re over the pool, you know, at the pool or at a work meeting, wherever. When you have that time to connect, now you have a question and you don’t have to be creative in the moment. And, and, and wing it. And it’s kind of like we talk about this with, um, on our weekly marriage, business meeting, meal planning.

Have you ever done this where you’re both tired, it’s six o’clock at night, everyone’s hungry, and you’re like, what should we make for dinner? Um, what typically happens? Okay, sounds like we’re gonna go to Chick-fil-A, right? Like, don’t cook it. We don’t have anything. It’s hard to be creative. It’s like stuff

Casey: of my nightmares right there.

I know it’s, I’m hungry. And then you look at the pantry, it’s empty, like, ugh.

Meygan: Or it feels empty and you’re like, I don’t know what to make. It’s kind of the same concept of I wanna connect with you. We’re sitting on the couch or we’re taking a walk. But it’s been a long day and I can’t come up with something from scratch.

AJ: I don’t have the energy to even think about it. No decision

Casey: fatigue, right? It’s real.

AJ: Yes. [00:32:00] Yeah. But you know, it’s true because it’s like we say, uh, we say this in our house all the time, that, you know, fatigue makes cowards of us all.

Mm-hmm. And it’s

AJ: like that whole concept of, hey, when we’re so tired that we can’t think, we can’t step into a space of being creative or going out on a limb or doing something that feels.

You know, even the slight, slight bit of hard because it’s like I’m just tired. And what we, you know, it’s like we get, we, we tell people at our house that we get tary, right? That’s tired and angry.

Meygan: Oh,

AJ: who’s hangry? I like that. I’ve never

Meygan: heard that before. I mean, I’ve heard hangry, but I’ve never heard tary.

I, we might have to steal that and use that.

AJ: And it’s like, that’s, and it’s mainly because, uh. Roy Vaden gets Ry. Oh. Oh, okay. Okay.

Meygan: Alright. Casey Fasten gets hangry, let me tell you. Ooh. Yeah.

AJ: But it’s, it’s like concept of like, Hey, it’s like I just had, and I, I, I don’t know, but it’s like I at least think in an [00:33:00] era, in a world where Bo most homes have both spouses working.

Yeah. At least some, even if it’s not a full-time, 40 hour endeavor, it’s like there’s just more opportunity of like. I don’t know. I didn’t think about it. It was busy today.

Meygan: Yeah.

AJ: Um, and that creates that

Meygan: Yeah. Uh,

AJ: kind of rolling, uh, issue there. Yeah. Um, so I, I love this conversation and I kind of fast forwarded into some of like these tips and tactical things that I’d also like to just take a step back for a second and be like, how’d y’all get here?

Yeah. Right. And I think this is a little bit of the story of your personal brand and, uh, all of the content. It’s like I imagine, uh, as most good things, there was a problem I. Yep. And then you guys found a solution to the problem with her, with her.

Meygan: I thought you were the problem. No, you were the problem.

You were the problem. What? How do I fix my husband? Uh, I almost got that tattoo. No, it really genuinely came from this idea when we, so we fell in love. It took [00:34:00] us two years to fall in love and get married. It took us three years to destroy our marriage, unfortunately. And it took about four to five years to rebuild our marriage.

And as we were rebuilding and healing our marriage, we were extremely disappointed. That there was a lack of marriage resources out there. Talk about, you said getting curious, like mm-hmm. There’s gotta be a solution to this and we could not afford ongoing therapy.

Mm-hmm.

Meygan: But what in the world is missing?

I mean, this is not only a mass market, but how many people get married in their lifetime? And the marriage books again will tell you, you guys should communicate, you should forgive. Okay. But how do you forgive someone that you literally hate? Hmm. And you feel it. I mean, I, I gen you mentioned it. Yeah. We, we really had hatred towards each other.

We had so much resentment. And

Casey: let me just, let me just say also too, we were going to church and we were being told what to do. Like you should apologize, you should forgive. I. But no one ever told us how to do it. Yep. Mm. So then we’re like, I’m sorry. Yeah. I, I forgive you. [00:35:00] Yeah. I forgive you.

Meygan: Yeah. Moving on.

Moving on. And, and we still didn’t feel it. So it really, marriage 365, I mean, there’s a whole huge bigger. Backstory behind it. But that was one of the main motivators was we started becoming problem solvers. I’m a major problem solver, fixer. So Casey’s actually the more empathetic one in our marriage when we argue, thank you babe.

Where I tend to go to like solutions based and being like fix it mode. Like, okay, let’s solve this. So I kind, we kind of both just dove in and that that whole idea of the weekly marriage business meeting came from, wait a second. Businesses are organized. We could do that. Why don’t we make a marriage one?

I mean, that’s all it was. It was like, let’s do it. And we sat there and we wrote on a like a napkin one day and let’s figure this out. And so we started problem solving and of course all of our friends and family saw us and we’re like, okay, you guys should have been divorced by now. Yeah,

Casey: the pool. Pool.

Meygan: Yeah. Like we had bets on it that you guys were gonna be a done. They’re like, the fact that you’re laughing and like each other and fell in love is not only a miracle, [00:36:00] but. Yeah, you are genuinely changing and you need to share this with the world. I remember one of Casey’s best friends went to him and said, you need to stop

He was a nonprofit fundraiser for a long time, and he, and he said, you’re in the wrong business, buddy. You need to be helping marriages.

AJ: I love that. That’s so good. Yeah, and that’s, that’s

Casey: when we started posting stuff on Instagram. It was like the early days, and it just, it got traction really quick. Now, I, I will tell you, aj, like if, if there were stories.

Of our marriage that were so embarrassing that I was like, that story will never see the light of day because it was, it just like bad. We just were so ashamed. Yeah, so, so much shame around it. And it’s funny because those exact stories. Are the stories that people connect with most always. They, they see that always when they’re like, oh, well, maybe they see it and they’re like, well, at least we’re not as bad as Casey Meghan.

Jeez.

Meygan: So, you know, a [00:37:00] Facebook and an Instagram post then became, well, let’s try it. Write an ebook, and, you know, let’s do, um, you know. Uh, what else did we do? Well, let’s do retreat, let’s do coaching. I mean, and then we started getting training. We did training premarital training, premarital, and we, we

Casey: had a premarital course and then we start, yeah, started coaching and one thing led to another.

Yes. And again, it was just like the need testing different things.

Meygan: Testing, testing, testing all the time. Testing.

AJ: Okay. I wanna pause right here ’cause I need everyone to hear this on a personal brand. Level, and I think this is so important for everyone who’s listening, um, this isn’t just an episode about marriage.

This is also, this is also a message about business entrepreneurship and personal branding. Because any good business, any good brand first solves a problem.

Meygan: Yep.

AJ: Right? And how do you solve a problem? It’s like you’ve experienced it yourself. Right. And then you, you figured it out. You compassionate about it.

Other people see it. And I, and I love the organic nature of [00:38:00] not just your story, but some of the, the my favorite brands, um, that I’ve encountered, not just in brand builders group, but outside of it. It’s like, uh, this happened accidentally. This happened because we had a problem. We solved the problem. Then we realized, well, if we had this problem, there must be other people who suffer from this.

But it wasn’t just that you acknowledged it. You did something about it. Yes. Right. And I think that’s what’s so important of like if you feel like this calling on your heart of like, hey, like there’s something out there that there is. Right? Yeah. And, and it’s there for a reason. And you guys are a great, amazing testament to like.

It can come from anything. Mm-hmm. Right. It can come from like the valleys of a really distressed marriage to the reconciliation of that, of going, okay, well, clearly there’s a problem with this in our country and in this world. What can we do about it? And then. From there, you test, and I think that’s the [00:39:00] most important thing I want people to hear is that you don’t have to have it figured out the first time.

Oh, we had no idea what we were doing, figured out the first time. Yeah. So you guys, you said you did an ebook, then you did premarital, then you did marriage coaching. It’s like. Yep. What was that process like to figure out what, what is our home base like? What’s the thing? Can I

Meygan: say one thing and then you go for it?

I think one thing that Casey and I will always stand on is that we are never afraid to fail. I. Mm. We will always try something and we don’t look at it as a failure. We look at it as a teachable moment. So let’s do it. We’re gonna test it, see how people respond to it. And while it may not have gone what we would’ve liked it to go and or whatever that looks, the response wasn’t what we wanted.

We always do either a survey or we do like an internal one to say, what worked, what didn’t work? What needs to continue? Is this worth doing again? Right.

Casey: And I would say that, I mean, our faith is a backstop to that. To know that God’s gonna take care of us [00:40:00] no matter what. And I, I find it in this, especially that we had a, a, a down year last year, and it’s just kind of an interesting season to reevaluate where we’re heading.

And there’s this tension of, of recognizing that God’s called us to do this and there’s a, an act of faith. Like I, I, I consider Marriage 365 as, as Meg Casey, and Megan’s long obedience in a single direction.

Hmm. You know, we’ve

Casey: watched a lot of people come and go. Over the past almost 15 years. Um, but we’re still here.

Mm-hmm. And I will say in the marriage space, yeah. You have to be called. ’cause it’s really tough work to walk through people through their most traumatic experiences of life. Like, it, it is not flashy. What do we say? It’s, you’re not getting rich or famous doing this one, this work. Yeah. This is, this is tough in the trenches type of work.

But you know, at the same time, like I, we want to. Grow and scale so that we have the largest amount of impact. And [00:41:00] there’s that tension of always holding both of those together. Mm-hmm. That I think we walk with. And that’s, that’s a day by day kind of thing that we’re, that we’re walking through. So. We do have like this backstop to say like, we are not afraid to fail ’cause God’s gonna take care of us.

And he has called us and there have been times when things have failed miserably. I mean the, we need like five more podcasts to tell you all the, but. At the end of that day, we had to go, but God’s called us to this. Yeah. And we keep trying.

Meygan: So tactically, how does that look? Yeah, it, it’s testing a lot on social media.

That’s been a really big platform. We started in 2013, technically as a Facebook page. That’s how Marriage 365 started. Um, and then once, you know, you build an audience and you get them on your email list or your platform, whatever that is. You know, it was like, well, let’s try to write a blog and get people off of meta onto our platform.

Right? And it was like, oh, we got a good response. Then it was, well now these people are on our, you know, email list. Let’s write an ebook and see if we can make [00:42:00] money for five bucks. Yeah. For five bucks. Well, it was back in 2013, right? Life was a lot different back then. It was, social media was really just, I mean, just

Casey: Instagram really

Meygan: booming.

Well, no, we didn’t start Instagram until 2015, but, oh, that’s true. Yeah. And so, um, all that to say, we. I think that we had a vision board and we looked at all the different things and resources that we saw missing in the marriage world. Mm-hmm. Okay. In the marriage space and how could we be different because we are a different kind of a couple and how could we get our message out to people?

And then again, just testing, testing, testing well and trying things and really. Uh, we’re also big on calling people, so that’s another thing. I know a lot of companies, they don’t like to call customer service those kind of calls, but we, Casey and Megan Caston, co-founders, Ofer, you will get a call from us sometimes if we’ve got your number and say, Hey, can I just ask you like, what did you think about that book?

Or what did you think about that blog? And people are always shocked to hear from us, but we genuinely wanna know because guess who [00:43:00] we’re making the resources for? That’s

AJ: right, mom. Yes.

Meygan: We’re making it for them now. Now they’re helping us, but we don’t wanna stay in our own bubble and think, well, every couple’s gonna love this.

Ep 592: Numbers You Need To Know | Greg Crabtree Recap

[00:00:00] the truth that nobody ever told you before you started your business. If you [00:00:05] don’t know your numbers, you don’t own a business, you have a hobby, [00:00:10] and hobbies don’t pay. The bills. So let’s talk [00:00:15] about a few things when it comes to knowing the numbers. And I think [00:00:20] that, as an entrepreneur and as you are in your entrepreneurial endeavors, [00:00:25] building and growing your personal brand, whether it’s within a business or it’s completely aside of your [00:00:30] business.

[00:00:30] There’s some things that are fundamentally important, and I think the numbers [00:00:35] are a huge part of what people tend to shy away from, and it’s whether because they don’t understand [00:00:40] them or they’re not the fun and exciting part of the business, or they’re [00:00:45] confusing, and it doesn’t matter which category those fall into, those are dangerous places to be [00:00:50] as you’re growing and scaling a business or a personal brand.

[00:00:53] So there’s a couple of quick things that [00:00:55] I wanna talk about. As a business owner, congratulations, you are also now A [00:01:00] CFO. And that doesn’t mean you shouldn’t replace yourself one day, but at the end of the day, this is your [00:01:05] business. And it’s your business to know your numbers. You don’t have to be a spreadsheet [00:01:10] wizard.

[00:01:10] You don’t have to be a CPA and you didn’t have to go, to school and finance and [00:01:15] accounting to know how to run your business. But you do have to know what’s going on. So here’s a couple of [00:01:20] things. A quick checklist. Here are three things that you should be asking yourself and the most [00:01:25] simplest standards of, making sure that you have your ducks in a row when it comes to knowing your numbers.[00:01:30]

[00:01:30] Number one, how much money came in last month. Now I know that is seemingly [00:01:35] basic, and I cannot tell you how many six, seven, and eight [00:01:40] figure businesses that I know personally where the owner of their business could [00:01:45] not tell me how much money came in last month, basic and [00:01:50] important. Number two, how much money went out, right?

[00:01:52] So how much came in? [00:01:55] How much went out? And that’s IE expenses. So how much did [00:02:00] you bring in? How much did you spend? And then thirdly, how much is [00:02:05] left over. Right. That’s called, uh, revenue expenses net [00:02:10] profit. Right? But that’s simplest way to think about it. And at the very, very, very [00:02:15] basic level, those are the three things that we have to know is how much came in last month, [00:02:20] how much went out last month, and how much.

[00:02:22] What’s left over. This is not about, [00:02:25] uh, doing it all yourself, but it is about knowing what to do with the financial numbers [00:02:30] and not outsourcing that and not looking at it because you don’t want to, right? So that’s step [00:02:35] one. Uh, number two, you gotta have a system. All right, so these are four [00:02:40] quick systems checklist items that I will give you about how to get more [00:02:45] intimately acquainted with your numbers in your business.

[00:02:47] Uh, number one, make sure that as a business [00:02:50] owner, that you have separate business and personal accounts. That’s the first big [00:02:55] no-no, when creating some simple, basic financial guidelines in [00:03:00] your business. Personal and business accounts have to be separated. I [00:03:05] would say the same thing for credit cards.

[00:03:06] If you’re gonna choose to have credit cards in your business, then you need personal cards and [00:03:10] you need business cards, you need a business account, and you need a personal account. Make it easy on [00:03:15] yourself for reconciliation. Do not mix and mingle the two. I don’t care how small you are. I don’t [00:03:20] care if you brought in $10 last month.

[00:03:22] Have it in a separate account. Okay. [00:03:25] Second quick system to make sure that you have clean financials, uh, is make sure that you have monthly [00:03:30] bookkeeping. If you have to start with something as simple as a spreadsheet to track what came [00:03:35] in, what went out, and what we have left over, great. Uh, then you can elevate to simple [00:03:40] systems like HoneyBook, or we use QuickBooks online.

[00:03:43] Um, you don’t have to have [00:03:45] a bookkeeper, but you have to have bookkeeping. Now, at some point, it’s going to behoove [00:03:50] you to start with an outsource bookkeeper. Then you can hire a full-time bookkeeper. Then you can [00:03:55] hire a controller and you can start building the financial engine of your company. But until then.

[00:03:59] [00:04:00] You are the bookkeeper, you are the CFO. Um, and so you’ve gotta take control of this. You [00:04:05] can fractionally outsource it. You can hire someone for 20 hours a week. You can hire a company, an [00:04:10] individual, it doesn’t matter. Um, and you’ve got to have a bookkeeping system. Could be a [00:04:15] spreadsheet, could be QuickBooks, but you gotta have a system.

[00:04:17] Number three, you have to have a [00:04:20] tax. Planning strategy, not just a tax filing strategy. There [00:04:25] is a difference between tax planning and tax filing, right? Tax [00:04:30] planning has more to do with your entity structure. [00:04:35] And, what are the different ways that we use the money, right? So it’s making sure that you’re [00:04:40] set up the right way.

[00:04:40] It’s making sure that you’re best optimized to pay [00:04:45] taxes and only the amount that you owe. So let me be clear here about taxes. I am not [00:04:50] against taxes. I’m an American who lives in America and gets the great [00:04:55] privilege of paved roads, paramedics, police officers, [00:05:00] teachers, the fire department, red lights, stoplights.

[00:05:03] Those are things I [00:05:05] greatly love about our country, and I am all about paying my fair [00:05:10] share of taxes. I call it America’s money, right? This is America’s money, and I am happy to pay [00:05:15] it, and I do not want to pay 1 cent more than I am [00:05:20] supposed to. That is the difference between tax filing and tax [00:05:25] planning. I want to pay every good cent that I owe to America to enjoy all the benefits [00:05:30] that I get as an American, and I wanna make sure that I’m not overpaying, [00:05:35] I don’t wanna underpay, I wanna pay my fair share, but I most certainly don’t want to overpay [00:05:40] because I didn’t hire the right person.

[00:05:41] I didn’t know, uh, what counted. I didn’t know what was a [00:05:45] deduction. I didn’t know that I didn’t have the right entity. Those are all things that are tax [00:05:50] planning, right? And as someone who files your taxes and someone who helps you with tax planning [00:05:55] are two different people, you have to have two different thought trains on that.

[00:05:59] So what’s my tax [00:06:00] planning strategy versus who’s just gonna file my taxes? That’s the third. And then the fourth is your [00:06:05] profit, right? What’s your plan for profits? Are you trying to make profits, right? I [00:06:10] imagine you are if you’re in a for-profit business. Um, but you have to have a real [00:06:15] monthly budget.

[00:06:16] With revenue goals and expense limits, right? Um, [00:06:20] you likely won’t hit your financial goals if you don’t plan for them, and you [00:06:25] likely won’t hit the plan if you don’t track it, right? So there, there has got to be a [00:06:30] target of what we’re going after. There has to be a budget. Um, and that’s, that’s a well-defined [00:06:35] budget and lots of different arenas.

[00:06:36] And like I said, uh, even if the budget is, Hey, next month I can [00:06:40] only spend a hundred dollars on my personal brand for X, Y, and z [00:06:45] reasons. That’s a budget. Budgets don’t have to be huge, but everyone [00:06:50] needs a budget to make sure that you’re spending and earning in ways that [00:06:55] allow you to grow. The number one reason that most companies fail is they simply run out of [00:07:00] money.

[00:07:00] Don’t let your mission fail because you didn’t plan for the basic fundamental [00:07:05] essentials of financial planning. Okay. Now last but not least, I wanna [00:07:10] share just a couple of quick things of what smart, entrepreneurs do.

[00:07:14] Not the only [00:07:15] things, but a few things that they do to really help with this. Number one. Make sure [00:07:20] that you have, this is a best practice. Make sure you have monthly financial review time in your [00:07:25] calendar, right? I’m very much of a believer if it’s not in your calendar, it won’t happen, it won’t get [00:07:30] done.

[00:07:30] So make sure that you have monthly financial review time to review what came in, [00:07:35] what went out, and what was left over to make sure that you have time to evaluate. Do I [00:07:40] have enough set aside for taxes? Right? That’s a part of the plan is budgeting. [00:07:45] Uh, like, hey, when money comes in, I have to set aside some for taxes.

[00:07:49] ’cause nobody wants to be [00:07:50] hit with that surprise bill at the end of the year plan in advance. That requires [00:07:55] time. So make sure that that time is in your schedule in advance every single month. [00:08:00] The only reason that things get out of control is that you who is in control of the money, [00:08:05] stopped looking at the dollars and cents.

[00:08:06] So make time for that every single month. Number two, [00:08:10] hire a bookkeeper to help you keep things straight, right? Uh, that [00:08:15] comes at varying levels within your business, but with all the things that you have going on, uh, [00:08:20] I would say making sure that there is someone. Protecting the financial [00:08:25] realms of your business, which is what helps you keep going, is one of the most important things for you to [00:08:30] start with, right?

[00:08:31] It doesn’t have to be full-time. Maybe you start with five hours a week and then you grow [00:08:35] from there. But most people think, oh, I need a va. Right. That might be true. [00:08:40] Um, but you also may wanna look at, Hey, I gotta make sure that I have money [00:08:45] coming in and I’m limiting money going out so there’s money left over so that I can continue to do this next [00:08:50] month.

[00:08:50] Right. So weigh the pros and cons of who are the first [00:08:55] people that you hire. In order to keep the business intact. Uh, number three, make sure that you’re saving [00:09:00] at least 20 to 30% of everything that comes in for taxes and also hopefully some [00:09:05] profit leftover, right? So a good rule of thumb, based on what you are projecting [00:09:10] come in, you can start with 20, uh, we put aside 30% every single month of what’s left [00:09:15] over for taxes.

[00:09:16] Right, and that is to make sure that we don’t get hit with [00:09:20] surprise bills and that we always have operating capital and that we never put ourselves in a cash flow [00:09:25] crunch ’cause we spent all the money that actually belonged to America, right? So make sure that you have those [00:09:30] financial practices in place and that last but most certainly not lease, is make sure that you [00:09:35] actually have a monthly p and l to review.

[00:09:37] Right. Part of that time that you’re gonna set [00:09:40] aside is going over your profit and loss statement, your p and l, but you actually have to have one, [00:09:45] right? And if you don’t know how to make one and you can’t, then that’s why those initial, maybe first five [00:09:50] hours that you hire out could be a bookkeeper, because this is what keeps you in business.

[00:09:53] This is what keeps you in [00:09:55] motion. This is what allows your message to get out into the world, is that you have enough funds coming in that allow you to [00:10:00] keep doing the thing that you feel like you’ve been called to do. Right? There’s the art. To [00:10:05] this, and then there’s the business side of this, right?

[00:10:08] And they’re both [00:10:10] necessary. And you don’t have to, like I said earlier, you don’t have to be a finance major. You don’t have to be a [00:10:15] CPA and you don’t have to be a spreadsheet wizard to know the basics, but you gotta know the basics [00:10:20] because the basics are what are gonna keep you running so that your message can get out to the people that [00:10:25] it’s meant to help.

Ep 591: Simplifying Financial Success for Entrepreneurs | Greg Crabtree

[00:00:00] AJ: Hey everybody. Welcome back to the Influential Personal Brand Podcast. [00:00:05] I get the privilege of getting to interview someone today that [00:00:10] I have been learning from behind the scenes for actually a few [00:00:15] years and actually hired the company that he works with. Simple numbers [00:00:20] to. I actually come in and work with Brain Builders Group about seven months ago, and Greg [00:00:25] Crabtree has been notoriously renowned in the Entrepreneurs [00:00:30] Organization community for pretty much like the 10 years I’ve been a part of eo and I [00:00:35] read Simple Numbers.

[00:00:35] I’m currently rub reading his second book, simple Numbers 2.0, and [00:00:40] it’s one of, here’s what I would say, and this is a, a great testament to you, Greg, the [00:00:45] title. Is exactly what’s in the book. It’s how do you make very [00:00:50] challenging, difficult numbers, simple. So that as a, a business owner, I can apply those [00:00:55] two of my financial life.

[00:00:55] So to get to have you on our podcast today is a privilege [00:01:00] because selfishly I’m gonna get to ask you all these questions that I wanna know. But [00:01:05] also I know that if I want to know the answers to these questions, so does everyone who’s listening. [00:01:10] So I know this is going to be applicable and universally sound for everyone [00:01:15] who’s listening.

[00:01:15] So. Without, you know, further ado everyone. Let me give you a [00:01:20] formal introduction to Greg Crabtree. He is a CPA, a speaker, an [00:01:25] author, an entrepreneur himself who has dedicated his career to helping [00:01:30] entrepreneurs build the economic engines for their business. As the founder of Crabtree Roe [00:01:35] and Burger Greg has pioneered revolutionary metrics for measuring.

[00:01:39] Two [00:01:40] very important things we’re gonna talk about today, labor efficiency and then also something that [00:01:45] we’ve really adapted in our company culture, which is contribution margin to help financial [00:01:50] reporting for business owners. So Greg, welcome to the show. I’m so excited to have you.

[00:01:54] Greg: [00:01:55] Yeah. I appreciate it. Thanks for having me. That that’s a, a very, very nice introduction. I appreciate [00:02:00] it.

[00:02:00] AJ: Well, and here’s why I asked for you to be a guest on the show [00:02:05] today is I think it’s very challenging in a world where there is a [00:02:10] thousand different things that we could be looking at and financial D dashboards and [00:02:15] metrics, and you have so many terms and terminology that just. [00:02:20] Don’t necessarily make sense in real world application.

[00:02:23] It’s like, yes, okay, I [00:02:25] know what my profitability is and I know what gross margin is, but how do you [00:02:30] actually use those numbers to make decisions in your business as something that I [00:02:35] think you just do so extraordinarily well. And it’s something I’m really excited to talk [00:02:40] about today. But before we do that, I, I mentioned to this before I hit record, I was gonna ask [00:02:45] you this question because you could have done a thousand different things.

[00:02:49] And you [00:02:50] chose to be in the world of finance and not just in finance, but [00:02:55] in the world of finance for small business owners, for entrepreneurs. And we can be a [00:03:00] seemingly difficult audience to appeal to. So how’d you get into this and [00:03:05] why have you stayed in this?

[00:03:07] Greg: Well, I mean, first and foremost, I chose [00:03:10] accounting because they, they worked in an air conditioned office. I mean, so when you grow up, grow up [00:03:15] on a chicken farm in ho cotton in the afternoons, when you’re not gathering eggs, you know, you [00:03:20] just want to, you know, work in someplace that isn’t, you know, hot, smelly, [00:03:25] unpleasant. you know, once I started in the profession and got outta school, [00:03:30] you realize what they taught you in school is not what you do every day. And [00:03:35] after the shock of that wore off and I had to make a living, like many of us, we gravitate [00:03:40] to the thing that fits our passion. And, [00:03:45] and so I, I, you know, through a series of, of, of changes, I, the [00:03:50] firm I worked for originally, I got hired by a bank client of theirs to be their controller. [00:03:55] That was where I kind of developed my technology skills and love of kind of modeling and [00:04:00] forecasting, you know, with spreadsheets. It was like first generation pc. I mean, I was, I was running outta this [00:04:05] space every time I turned around ’cause I just kept pushing the limits of what it would do. And then left [00:04:10] there and, and went back into practice.

[00:04:11] ’cause I, I, I really had a passion for more, you know, working directly, [00:04:15] you know, with multiple clients rather than just working for the bank. But even that [00:04:20] had its moments of, you kinda get drug into, you know, the, the, the [00:04:25] stuff that, you know, you tell somebody you’re a CPA, the first thing you get is a tax question. you know, and, [00:04:30] and it’s like, yeah, I mean, it’s necessary, but it’s not the prime thing. And really for [00:04:35] me, I mean, and I wish this had come along sooner in my career, but you know, in [00:04:40] 2001 I got introduced to the non entrepreneurs organization and that was a, just a [00:04:45] transformative moment because at that moment, you know, I had a couple partners.

[00:04:49] We had a [00:04:50] qualifying million dollar CPA firm in Huntsville, Alabama. All of our clients were [00:04:55] local. since then, we became entrepreneur [00:05:00] focused and really more consulting first focused in that, you know, we’ve now [00:05:05] grown that, that practiced about 7 million of revenue and we, our clients are all over the [00:05:10] world. And 98% of what we do is not in Huntsville,

[00:05:13] AJ: Mm-hmm.

[00:05:14] Greg: [00:05:15] and, but it all came because of that focus of. [00:05:20] Really asking the question that I, I really attribute to my first EO forum [00:05:25] what is our per, you know, when I asked them how many would recommend their current accountant, the answer [00:05:30] was none. So that from a net promoter score basis, that’s a pretty sad [00:05:35] statement of a profession. and, and as a profession, we sell people what we do. We don’t do [00:05:40] what they need. And, and, and there’s, and there’s a, there’s a truth to that. And just about [00:05:45] anything in the world. The idea is, you know, figure out what the market needs [00:05:50] and, and that takes some time and takes some effort. And then once you find that [00:05:55] need, you gotta find a way to solve that need profitably.

[00:05:57] And then you start building the [00:06:00] marketing engine to say, let people know that you exist. And even to this day, I mean, we still straight, you know, [00:06:05] people try to put us in a box. Oh, you offer fractional CFO services? not [00:06:10] really. We, we may eliminate the need for fractional CFO services, you know, for what we [00:06:15] do, but we, no, that’s not the box we fit in. You know, and, you know, and, and so [00:06:20] it really comes down to, we really want to help people optimize [00:06:25] profitability, return on invested capital, which is a very poorly [00:06:30] understood, you know, topic of, capital you invest in the business. What is the [00:06:35] return that you should get out of it? You make that business as profitable and [00:06:40] capital efficient as possible, you’ve got the best of both worlds. It’s a very valuable [00:06:45] business should you ever decide to sell it, and it’s a very valuable business should you decide to keep it.

[00:06:49] AJ: [00:06:50] Yeah.

[00:06:50] Greg: you know, fortunately for me, the, the [00:06:55] study of the data is never ending because it’s like, and, and I don’t [00:07:00] go to the data. to, with a proof text I’m trying to prove, I go to [00:07:05] the data to say, Hmm, what are you saying? You know what, what? Look what, talk to me.

[00:07:09] AJ: [00:07:10] Hmm.

[00:07:10] Greg: And, and, and so really it was more so an approach that I had to do something that [00:07:15] accountants loathe to do is I go study data without somebody paying me to do it. [00:07:20] To, to develop. I mean, and you know, you’ve worked with us a while now and you [00:07:25] understand we have deeply held beliefs of how things work. Not [00:07:30] rules. No. These are beliefs

[00:07:32] AJ: Hmm.

[00:07:32] Greg: and for the most part, there is [00:07:35] only a handful of numbers that truly matter. and it’s easy [00:07:40] to, you know, get worried about some other numbers in your day.

[00:07:43] And it says, well, you know, I, I get that, [00:07:45] you know, don’t waste money. a call this morning before this call that, you know, a client [00:07:50] that’s in a rapidly growing mode, you know, and they were worried about, you know, hitting their [00:07:55] labor efficiency targets and, and, you know, their operating expenses that increase.

[00:07:58] They said, don’t worry about it. It, [00:08:00] it’ll be fine. said, you’re not spending money that’s not crazy. You hit that LER number, [00:08:05] you will have that level of profitability. You, you gotta go crazy with, [00:08:10] with the opex number. You know, for that not to happen. And once you understand the [00:08:15] power of leveraging labor and efficiently deploying capital. You [00:08:20] got something that puts you miles ahead of every other business out there, [00:08:25] you know, in that process. But they don’t teach us that in school. They don’t even teach you that, you know, in, [00:08:30] in the world of business because there’s all of these, know, rules of, [00:08:35] oh, you know, you know, business is valued at 10 times EBITDA or five times ebit, ebitda.

[00:08:39] You know, it’s like, [00:08:40] yeah, maybe not really. You know, those are, those are [00:08:45] benchmarks, you know, when people are talking about values. But if you have. I can get 10 [00:08:50] times ebitda selling a business that has a really bad EBITDA number, it didn’t mean I got my [00:08:55] value for it.

[00:08:55] AJ: Ah, that’s good.

[00:08:56] Greg: you know, and I can get five times EBITDA for a number that I’ve [00:09:00] got a, a, a, a very strongly adjusted EBITDA number that I win when the [00:09:05] argument for, and I get the right number. You know, so, so a lot of those things, there’s a lot of [00:09:10] lore that goes around in business

[00:09:11] AJ: Mm-hmm.

[00:09:12] Greg: and I, I just try to stick to finding what’s [00:09:15] truthful,

[00:09:16] AJ: Hmm.

[00:09:16] Greg: truthful. and trust me, in the [00:09:20] world of accounting, audits aren’t truth. Audits are, you know, are, are [00:09:25] things that, you know, it’s just generally accepted accounting principles that have a tendency to just confuse things more than they [00:09:30] help, and, and put a lot of weight on the data.

[00:09:33] And, and oh, by the way [00:09:35] anybody listening to this, that if you’ve ever had accountant prepared financials that got sent [00:09:40] to the bank, why is it that the bank calls you back and asks for more information? [00:09:45] If it was actually a sufficiently prepared document, the bank wouldn’t have any more questions. And, [00:09:50] and so once again, it identifies the deficiencies of what existed in the [00:09:55] marketplace, but it can’t be so deep into the weeds [00:10:00] that, you know, you’re, you’re picking lint outta your navel to kind of figure out what’s wrong. I mean, it’s like, [00:10:05] come on people. I mean, there are some long hail principles and to be quite honest, everyone that I [00:10:10] talk about, I learned from a client, I didn’t learn from school. The only thing I [00:10:15] learned from school I, I’m fortunate that we’ve done about 10 years of the program now. [00:10:20] I, I get to, to host the EO at Horton Executive ed program. and I’ve been [00:10:25] the host since the beginning. And, one of the early years of that program, [00:10:30] actually the first year of that program, or lead professor David Wess, was talking about return on Vista Capital. [00:10:35] And, and you know, I’m sitting in the back of the ring going, [00:10:40] Hmm, you know, I, I. Knew about that in school, but we never used it, never, never did [00:10:45] the calculation.

[00:10:45] And they got enamored with the idea of it. come to find out, there’s really no [00:10:50] private company data around that topic. And so I [00:10:55] just started studying it because we have access to data and, and so we have hundreds of businesses we can [00:11:00] look at, you know, and, and we started to find this, this very identifiable [00:11:05] correlation of a capital efficient business that’s producing the right amount of profitability relative to [00:11:10] the capital invested. Because in the, in the world of business, you know, there’s [00:11:15] really, you know, you can identify businesses of, do you have accounts [00:11:20] receivable and inventory? Those are tough businesses to get a good return on because I’m carrying two things that [00:11:25] turn over

[00:11:25] AJ: Mm-hmm.

[00:11:26] Greg: a frequent basis. Do I carry one? One of the two, but not both.

[00:11:29] [00:11:30] Okay. That gives me a little higher return potential. I, I can’t, I’m a business [00:11:35] that I don’t have ar or inventory. I get to bill either upfront. as I [00:11:40] perform, perform the service or sell the product. So that’s even better, [00:11:45] And, and do you have, then, do you have a big capital component of equipment?

[00:11:48] Well, you know, we’re a [00:11:50] very heavily dominant service-based economy in the us although we do have some capital [00:11:55] intensive businesses. But there’s a way to look at all of those things and equate it back [00:12:00] to setting your profit target then giving somebody something [00:12:05] definitive to aim at. I would say probably my [00:12:10] greatest amount of pride in the work that we’ve done is giving people a [00:12:15] very specific, definitive target that is unique to their business. [00:12:20] and you know, as always say, a man who aims at nothing hits it with amazing accuracy. [00:12:25] Well, it, and when somebody just gives you an opinion about something. [00:12:30] You’re not committed to that thing. It’s like, eh, you know, sounds nice. You know, may maybe we’ll hit it, maybe not, [00:12:35] but when, when you give people definitive things of, Hey, I need to be a two total LER, [00:12:40] I need to have two months of operating expenses in cash with zero drawn on a line of credit. I [00:12:45] need to be a 75% return on invested capital. are definitive things [00:12:50] that gives you trade off decisions of. [00:12:55] you know, I can grow well, but is growth good? Not all growth’s good. I got, I’m here to [00:13:00] tell you, you know, we have seen many times people have grown and made less money.

[00:13:04] AJ: [00:13:05] Yeah, I think that happens. I think a lot. And you’ve, you’ve mentioned this term a couple of times. [00:13:10] It’s one of my hot topics for today because, and I love what you said, there’s lots of [00:13:15] numbers you can look at, but there’s only a few that are like really instrumental to [00:13:20] really understand. And up until the last year, I [00:13:25] had never even heard the term of LER Labor efficiency ratio, and [00:13:30] I consider myself.

[00:13:31] Fairly savvy in the financial business world [00:13:35] and never had come up, not in school, not in [00:13:40] all the courses and all of the you know, I’ve done like anything from, you know, like [00:13:45] my financial, like MBA course to like, none of that had really like come up to how do you use [00:13:50] that? In business. And so I’d love for you to first of [00:13:55] all explain, because I think even definition wise, if you were just to go Google it, it’s gonna [00:14:00] be slightly different than how I believe you guys use it and practice it.

[00:14:04] Greg: Actually, you [00:14:05] probably we, we’ve become known enough as, I mean chat, GPT has read both of my books, and [00:14:10] so it, it, it, it actually will give you an accurate you know, answer.

[00:14:14] AJ: so [00:14:15] tell.

[00:14:15] Greg: yeah. Yeah. And, and so it really requires a couple [00:14:20] of things to think of. Number one is revenues, the slipperiest number on the p and [00:14:25] l and. Probably to go back in [00:14:30] thought of why I started looking into this is I was frustrated [00:14:35] with the annual requests that I get from clients who wanna be [00:14:40] included in the Inc 500, Inc. 5,000 list. And I’ve long [00:14:45] since believe, I mean, granted, I mean Great Frank Magazine to generate awareness and yes, [00:14:50] it’s a great marketing tool and, and I, I, I get all that piece. From a metric [00:14:55] standpoint of growth of revenue is you are not [00:15:00] rewarding the most deserving companies because there’s a lot of [00:15:05] companies on that list that unfortunately I do know the background of that, that [00:15:10] revenue is about as worthless, you know, as, as, as it gets. And, and so [00:15:15] as they say in Texas, all hat and no cattle, I got revenue, but I ain’t got profit and I ain’t got margin, you[00:15:20]

[00:15:20] AJ: Yeah.

[00:15:21] Greg: So it really kinda led me down this path. When I was on the [00:15:25] EO Global Board I started working with this thing that I, that I, I kind of [00:15:30] keep in my hip pocket and we’ll, we’ll probably use it here soon, I came up with [00:15:35] basically a business health scoring metric that looked at [00:15:40] not revenue growth, but gross margin growth.

[00:15:42] And the way we define gross margin is revenue [00:15:45] minus materials or con subcontracts, not labor. So I wanna [00:15:50] get to a gross margin number. That is the pure value of what’s left over for [00:15:55] your labor and your overhead to do in the business. ’cause everything else is really a pass [00:16:00] through, you know, at that point of materials or cogs. And, and so that gross margin is [00:16:05] the true economic top line of the business. And if you measure things off of it, well then we started [00:16:10] looking at, well, let’s measure things off of it. Well come to find out the more you study the data. [00:16:15] There is a very, very tight correlation of all labor. Doesn’t matter if it’s direct or [00:16:20] management, all gross wages not loaded for payroll taxes either.

[00:16:24] Keep it simple, [00:16:25] just wages to gross margin. There’s probably 80 to 90% of the [00:16:30] businesses offer off of one simple metric. need $2, a gross margin for [00:16:35] every dollar of labor to hit my profit target, and [00:16:40] you couldn’t get more simpler than that. And, and then. [00:16:45] We can take it and split it between direct and management for a next [00:16:50] level view.

[00:16:50] Now those that, you know, we, we look at total LER as a health diagnostic. [00:16:55] I mean, literally, I can look, I mean five minutes, I can look at a business and tell you [00:17:00] where its problem is

[00:17:01] AJ: Hmm.

[00:17:01] Greg: that that’s how simple the, the analysis is. [00:17:05] And once you look at it, you go, okay, well what can you do it? Well, let’s split it between direct and management and then let’s [00:17:10] watch it move across time.

[00:17:11] If we’ve got some historical data. Compared to now, [00:17:15] and those individual measurements of direct and management is more about your labor [00:17:20] strategy of how you go to market. I, I can win the game a lot of different ways, but direct and [00:17:25] management play off of each other. If I go expensive, direct labor, [00:17:30] I gotta have less expensive management labor. I can go balanced between the two, [00:17:35] or I can go inexpensive direct labor. Then I gotta have a lot more expensive management [00:17:40] labor to cover the deficiencies of the direct labor that I. Get you in trouble.

[00:17:44] AJ: Now the direct [00:17:45] labor revenue producing labor, right?

[00:17:48] Greg: Revenue really, [00:17:50] essentially. Think of it like this and, and we don’t get too wrapped around the axle about it, so don’t, don’t overthink [00:17:55] it. Somebody that spends 30% or more of their time facing the customer or [00:18:00] doing, making the thing that you do happen, you know, if you’re a product or service business. [00:18:05] So, so really, I don’t care what their title says, we have plenty of people that have the [00:18:10] manager title that we put into direct labor. I.

[00:18:12] AJ: Mm-hmm.

[00:18:13] Greg: Matter of fact in our office, [00:18:15] I’m direct labor, I still face clients more than 30% of the time, you know, in billable work. [00:18:20] So let’s face it, I don’t want to do management labor.

[00:18:24] I [00:18:25] like doing this. And, and so, so from that standpoint, but that’s really [00:18:30] just more, we call it a button, a bucket. Don’t split people. allocate. I’m an [00:18:35] avid anti allocator. I mean, in the world of accounting, accountants love to allocate things. [00:18:40] Allocations are just jobs programs for accountants. It, it just takes up time and, [00:18:45] and just pollutes the quality of the data. You know, at the end of the day, and [00:18:50] not gonna say that there’s no cases where you allocate, but it’s, but you [00:18:55] want to allocate as, as the last possible choice to get [00:19:00] clarity of the information. so at the end of the day, we call it a but in a bucket. Put the whole person in [00:19:05] into direct labor or the whole person in the management labor, watch it move across time. [00:19:10] Is it getting better? Is it getting worse? typically we don’t, like [00:19:15] month, months are highly inaccurate period of time. So we’re looking at rolling three is the shortest [00:19:20] period. We look at enrolling. 12 is your most authoritative period to look [00:19:25] at. then you can look and see at this mix. And, and for the most part, I mean, we. [00:19:30] Klan, I was talking to you earlier this morning. I mean, they, they’ve gone through this transition and they, [00:19:35] they’ve been growing, their total labor efficiency ratio had fallen [00:19:40] to below their minimum acceptable target, and, and it was [00:19:45] all in one place. It was in management labor. They had, you know, their direct, their direct labor efficiency actually [00:19:50] gone up,

[00:19:50] AJ: Hmm.

[00:19:51] Greg: management, they’ve gotten really heavy and lethargic, and, and this is [00:19:55] growing.

[00:19:55] Companies fall into this trap all the time. Oh, we need to add people to this. [00:20:00] You, you might, but for every dollar of management labor you add, [00:20:05] you have an output component. And this is really why I think management LER was even a more [00:20:10] revolutionary component even total LER.

[00:20:12] AJ: Hmm.

[00:20:13] Greg: Because [00:20:15] you have something that your management labor has to attain to, it has a [00:20:20] definitive measurement that, that, you know, ’cause if I add management labor, okay, now [00:20:25] I’ve reset the target of contribution margin.

[00:20:27] I. And then that works its way [00:20:30] up to then, you know, an estimate of revenue that we’ve gotta go get. And, and if we, [00:20:35] anything below that number is unacceptable. That, that’s just a definitive measure of, of, [00:20:40] you know, successful performance.

[00:20:42] AJ: What would that be like? Would you say there’s like a [00:20:45] baseline of like what you would say? Anything below this is like.

[00:20:48] Greg: now, now management labor, I [00:20:50] mean the individual metrics, there are some guidelines within certain [00:20:55] industries, you know, I mean, we, we have. You know, the one one we have a lot of mastermind [00:21:00] participants in, is it MSPs? And we, we kinda identified the neutral [00:21:05] success for Ms. P is a two total LER, like I said, [00:21:10] you want a 3.5 direct labor and a 3.5 management labor.

[00:21:14] Now [00:21:15] those two are me. Those, those, those two individual components have a different numerator. So that’s the [00:21:20] reason why they’re the same number. You know, but, but we’ve got people that are above one and below the [00:21:25] other.

[00:21:25] AJ: Mm-hmm.

[00:21:25] Greg: But the two balance out to get you to the two, to the key is you gotta get to the two total.

[00:21:29] AJ: Yeah.[00:21:30]

[00:21:30] Greg: And then once you set them side by side, you start to realize, oh, you’re, [00:21:35] you’re pushing inexpensive labor, but you had to compensate with more management. [00:21:40] Oh, you’re pushing expensive labor and you’ve got a really skinny management.

[00:21:44] AJ: [00:21:45] Hmm.

[00:21:45] Greg: All of those have. think of it like this. If I have really expensive [00:21:50] direct labor and I have really inexpensive management, problem is I have nowhere to [00:21:55] go

[00:21:55] AJ: Hmm.

[00:21:56] Greg: and say My expensive labor, last time I checked, still [00:22:00] likes to get raises. Well, they’re already expensive. Can will the market let me [00:22:05] continue to charge more. Now when I go to the other end and I got inexpensive labor and I got [00:22:10] the management. That’s more of what I would call a team development model [00:22:15] of where, okay, I’m gonna grow these people and you know, we’re gonna go from [00:22:20] inexpensive, direct expensive management to balanced.

[00:22:23] We’re, we’re actually moving [00:22:25] from that strategy to the balance mode. Once we get the balance, we have to decide, are [00:22:30] we gonna go all the way to expensive direct labor? Eventually, maybe, maybe not. [00:22:35] I, that’s the one where I typically find a lot of people are stuck.

[00:22:37] AJ: Mm-hmm.

[00:22:38] Greg: And they, they, they get some [00:22:40] terrorist on their, you know, a, a terrorist in labor is a person who doesn’t fit your [00:22:45] culture, but they’re a high producer.

[00:22:47] AJ: Mm.

[00:22:47] Greg: that, those, those are [00:22:50] people that, that, you know, when we look at it and Yeah,

[00:22:53] Yeah. You, you kinda get stuck with those.

[00:22:54] AJ: [00:22:55] it was, it’s interesting because I think one of the reasons that I was so drawn to this [00:23:00] concept of LER, labor efficiency Ratio is because me, [00:23:05] like so many other people, doesn’t matter how big your team is, you could have a team of one or a [00:23:10] team of. A thousand. There’s always this never ending [00:23:15] commentary and business of, there’s more work to be done than we have the team to [00:23:20] do the work.

[00:23:21] Right. And there’s, there was.

[00:23:22] Greg: it’s a, that’s not, and I’ll [00:23:25] give you a good data point for that. So in our most recent Horton class, and then I did the same [00:23:30] question the year before as well. W we get 60 entrepreneurs from around the world. All [00:23:35] different kinds of businesses. of the room. Will I ask a question? What [00:23:40] is your biggest constraint?

[00:23:41] Getting revenue or getting access to labor?

[00:23:43] AJ: Hmm.

[00:23:44] Greg: Half of the [00:23:45] room is revenue. Half of the room is labor and, and what you typically [00:23:50] find the necessary businesses of [00:23:55] the marketplace are labor constrained. The discretionary [00:24:00] businesses in the marketplace are revenue constrained.

[00:24:02] AJ: Hmm.

[00:24:03] Greg: And, and [00:24:05] that’s become a very interesting learning over the last couple of years, is we, we, we keep a, what we call the [00:24:10] simple numbers a hundred company model. So we have a hundred of our clients that we put in a [00:24:15] model treated as one big conglomerate. ’cause it’s businesses from all over the us, all [00:24:20] different industries, all different geographies, since we’re not geographically centric and it, it’s our read [00:24:25] of the economy.

[00:24:25] AJ: Hmm mm.

[00:24:26] Greg: And one of the things that has really emerged in the last five [00:24:30] years going through Covid is this separation of the necessaries and the discretionaries

[00:24:34] AJ: [00:24:35] Hmm.

[00:24:35] Greg: and, and the discretionary businesses are getting their head handed to ’em right now. And [00:24:40] so, so when people, you know, in, you know, write articles or going the news and [00:24:45] start talking about the economy, I mean, they’re, they’re paying with a pretty big brush because I got news [00:24:50] for you. We got people that are crushing it and we got people that are hanging on for dear life.

[00:24:53] AJ: Hmm.

[00:24:54] Greg: And [00:24:55] everybody in between. Now we tend to like to think that we can move the [00:25:00] needle a little bit, you know, to the better. And we do, you know, but, but [00:25:05] still, I mean, there’s only so many things we can do when, when somebody’s facing a market, selling a product or [00:25:10] service, that there’s just not sufficient demand for, because they’re, the, the [00:25:15] people buying it are the bottom 60% of the wage force no extra money at the [00:25:20] end of the month.

[00:25:20] They have to make hard decisions. And that’s, and we’ve been in that [00:25:25] mode for about 24 months now that those discretionary [00:25:30] businesses I mean, they’re hanging on like this, that they’ll have a good month, they’ll [00:25:35] have a bad month, they’ll have a good month and a bad two months, and a good half a month.

[00:25:39] And, [00:25:40] it’s, it’s really schizo and, and that that consumer base that they’re relying on is [00:25:45] really struggling.

[00:25:46] AJ: Hmm.

[00:25:46] Greg: Whereas, you know, the other part of the discretionary market is [00:25:50] what we call the highly desired discretionaries. are the people selling to the top 30, [00:25:55] 40% of the wage earners, but still, you gotta fight for their wallet.

[00:25:58] AJ: Mm-hmm.

[00:25:59] Greg: mean, [00:26:00] even those people make discerning decisions about what they spend money on and they don’t [00:26:05] spend consistently, you know, that things will get hot and things will get cold. you know, [00:26:10] and, and so, and a good place that you can kind of see it right now is like in the restaurant industry. [00:26:15] The bottom end is hanging on.

[00:26:16] Okay. their labor costs are high. [00:26:20] But you, you’ve seen them do everything possible to take labor out of the component.

[00:26:24] AJ: Hmm.

[00:26:24] Greg: [00:26:25] dining rooms, doing doing online ordering, doing ordering a [00:26:30] kiosk and all of those things. The upper end, they’re fine. They’re, [00:26:35] you know, if you’re good and you deliver, you do, you do good food and deliver good service.[00:26:40]

[00:26:40] Your parking lot’s always gonna be full because there’s enough people that have the money,

[00:26:43] AJ: Just,

[00:26:44] Greg: to deal with you. [00:26:45] that middle tier that’s getting crushed.

[00:26:47] AJ: Hmm.

[00:26:48] Greg: TGI Fridays went [00:26:50] bankrupt. There’s a couple of other, you know, mid tiers that are teetering on bankruptcy [00:26:55] because their cost of elevated to the point that they just can’t charge [00:27:00] enough to cover those costs because it pushes ’em into that upper tier pricing [00:27:05] somebody will come in and go, well that was good.

[00:27:06] It wasn’t that good.

[00:27:07] AJ: Yeah.

[00:27:08] Greg: And, and there’s a lot of [00:27:10] that. So there’s a lot of, you know, and every industry kinda has, you know, some of the, those same components I. [00:27:15] But if you’re in one of the necessaries, guess what? You can raise your prices to [00:27:20] whatever your cost input is. ’cause if you’re, you know, we, we have a [00:27:25] mastermind group, I’m about to go visit in the HVAC space, you know, they’re doing really [00:27:30] good now, they’re, they’re labor constrained.

[00:27:32] ’cause there’s not people that are HVAC techs walking [00:27:35] around looking for jobs,

[00:27:35] AJ: Sure.

[00:27:37] Greg: But as those people have, as you keep having to pay those [00:27:40] people more. You just charge more

[00:27:42] AJ: Mm.

[00:27:42] Greg: when you’re cold, you need them. When you’re hot, [00:27:45] you need them, you

[00:27:45] AJ: Yeah, I think that’s, that’s, that’s a good, I think that’s a good point of distinction [00:27:50] between, you know, what’s necessary and essential versus discretionary. And I think one of the things I, [00:27:55] I’d love for you to talk about too is like, because I hear this even in our own company, it’s like, Hey, [00:28:00] I feel like it’s time to hire someone.

[00:28:02] And what I love about LER is [00:28:05] it tells you more data-driven of. Are you [00:28:10] in need of more staff or is that just a feeling [00:28:15] that’s amongst the team? Can, can you talk about that a little bit?

[00:28:17] Greg: yeah, so once you, once you set the [00:28:20] parameter, so like I said, most people listening to this is they’re gonna fit that two profile. [00:28:25] If you’re a restaurant, you need to be a 2.5. If you’re a distributor, you generally need to be a 2.5. [00:28:30] I. you’re a union shop, you need to be a 2.5, but most everybody else is a [00:28:35] two. If you’re a staffing business, you’re kind of off the grid in a totally different mindset. You may be below a [00:28:40] two. So I’ll keep staffing businesses to the side, but almost everybody else kind of fits within those categories.

[00:28:44] AJ: [00:28:45] Hmm.

[00:28:45] Greg: If we establish, say, listen, you’re gonna, if you’re at a one eight,

[00:28:49] AJ: [00:28:50] [00:28:55] [00:29:00] [00:29:05] Mm-hmm.

[00:29:08] Greg: I want you to look around and [00:29:10] see, is anybody stressed? Are we running hot? [00:29:15] But if we’re not, let’s see if we can get to 2 0 5, maybe two 10. [00:29:20] find. If you have found a way to be marginally better than your [00:29:25] competition, and there’s a few times that. You’ll have windows of time. This won’t last [00:29:30] forever. got a, the, the click of a team that really gels [00:29:35] Your operating cost are optimized for the range of [00:29:40] revenues that you’re doing. And so this, you’ve got this window of [00:29:45] incremental value that just drops to the bottom line that gives you that extra little juice.

[00:29:49] But trust [00:29:50] me if you grow, you’ll kinda lose it and, and it’ll still be okay. But, but. [00:29:55] And, and if you kind of hit that rough patch of the economy and [00:30:00] finally goes soft, it’ll, it’ll drop down as well. But you’re trying to live between that one, eight and, and the two, [00:30:05] and, you know, and when you’re, and, and if you’re not there, let’s say you’re, you’re [00:30:10] operating consistently at a buck 75. Alright, so we go into the three Ps. [00:30:15] Ps. First, I priced effectively? That’s my [00:30:20] first place I always go. Have you? Have you defended the [00:30:25] value of your team? And that is on management. Shoulders don’t be a [00:30:30] wimp. go defend for that value. there’s a lot more room [00:30:35] for pricing than most people believe

[00:30:36] AJ: Hmm.

[00:30:37] Greg: been our experience over the last, I mean, we’ve seen [00:30:40] more price changes in the last five years than we’ve seen in a lifetime. And so I’m [00:30:45] telling you, most people have not pressed the edge.

[00:30:47] AJ: Mm-hmm.

[00:30:48] Greg: Once I get to the right price though, and [00:30:50] I, and I can defend it and I’m getting the right value and I’m letting the bad customers go to my [00:30:55] competitors and I’m keeping the good ones and serving them, the next thing is process. [00:31:00] Have I given my team the right tools, [00:31:05] training? Are we getting things, you know, David Wessel’s, one of our lead [00:31:10] professors at Horton, you know, talks about speed and power equation. And, and I love that [00:31:15] power is margin pricing power speed is clock time [00:31:20] from beginning to end. There is undoubtedly any project that [00:31:25] expands in length of time becomes less profitable. And so, you [00:31:30] know, there, there’s a significant lack of a sense of urgency in the productive environment of [00:31:35] most businesses.

[00:31:36] AJ: I agree. Mm-hmm.

[00:31:37] Greg: I, I, I’ve gotta, I gotta a [00:31:40] culture of everybody’s on, on target.

[00:31:42] AJ: Hmm.

[00:31:43] Greg: Once I go through those two Ps, there’s [00:31:45] only one P left people. Do I have the right people [00:31:50] And to take a college football and basketball term, the the transfer [00:31:55] portal of business has some talent in it at the moment, don’t think it’s gonna be there [00:32:00] long, but there is some available talent that I would kind of [00:32:05] be paying attention to and you might be able to upgrade your team. You know, [00:32:10] there’s perfectly good players on your existing team that end up going elsewhere because [00:32:15] you had to sit down and have an honest conversation with ’em and going, you know, I like you as a person. You’re a great [00:32:20] person, I don’t think this is the best place for you in the

[00:32:24] AJ: [00:32:25] Mm-hmm.

[00:32:25] Greg: And you gotta have those honest conversations with people and [00:32:30] know. The, know, how many of us have had in our [00:32:35] working career before we became business owners? Somebody sit down and do that with, with us, [00:32:40] not very many. we had to kind of find it out on our own, you know, but Robert [00:32:45] Glaser is a longtime EO member outta Boston. I mean, Robert came up with this concept that we’ve used quite [00:32:50] successfully, and what I call the mindful transition, where I got a good person. [00:32:55] They’re not going to get to their personal LER. We can actually measure [00:33:00] LER by person, you know, so not everybody can, but with our metric approach to things, we [00:33:05] can, so I can look at somebody and go love you as a person. You’re just not gonna [00:33:10] produce that. I, I can’t, you’re using up a productive slot of the business that [00:33:15] is underoptimized.

[00:33:16] AJ: Hmm.

[00:33:18] Greg: That means there’s a better place in the world for [00:33:20] you.

[00:33:20] AJ: Yeah.

[00:33:21] Greg: hey, you know, if you’re not disruptive. [00:33:25] Don’t, you need to be looking, I mean, and there’s a good job market. There’s plenty of jobs available. I mean, [00:33:30] that’s the nice, nice thing about this time of life that’s not existed before is [00:33:35] economy might be kind of, eh, sluggish, but everybody’s got a job that wants a job.

[00:33:38] AJ: Mm-hmm.

[00:33:39] Greg: [00:33:40] not be the job you want, but sometimes you gotta work at a little bit. But, you know, we can give those [00:33:45] people extended, you know, 60, 90 days to go, go find another job. As long as you’re not [00:33:50] disruptive, you don’t make a, make a scene about anything, we’re fine. You know, we’re not. We’re not grossly [00:33:55] losing money, but we’re not optimized, you know, within that, and I, and I’ll give you a [00:34:00] great example of that to put in everybody’s head.

[00:34:02] AJ: Yeah.

[00:34:02] Greg: So in the world of car service, [00:34:05] auto, auto, auto service businesses, they actually pay mechanics on a, a book [00:34:10] rate. So if you’re gonna go replace a carburetor in a bus, in a car [00:34:15] book says, takes seven hours. So you’re gonna pay the, the service technician seven [00:34:20] hours, whether it takes ’em three hours or 15 hours. To replace that carburetor. [00:34:25] one of the most unique industries that exist [00:34:30] of paying people for the value of what was done, not the hours that was done.

[00:34:34] AJ: [00:34:35] Hmm.

[00:34:35] Greg: Now, labor requirements, you can’t pay them less than minimum wage, a pretty good [00:34:40] indicator. You got the wrong guy. unsuccessful people in the car service [00:34:45] industry that, oh, I don’t have to worry about under performers because I’m only paying [00:34:50] them for what they produce.

[00:34:51] No, no. In a car service business, it is [00:34:55] the margin that goes through the bay a day, not [00:35:00] what you paid the person. if I have an underperforming [00:35:05] service tech that’s taking twice as long, yeah, I’m not having to pay him, [00:35:10] but I’m missing the opportunity cost of that bay turning over [00:35:15] activity. And I think we, we’ve got to look at our productive team. [00:35:20] Say, just because you’re not costing me money doesn’t mean you’re, you’re [00:35:25] optimized and, and you’re not in a good place, and we’re not in a good place because of that. And so if I [00:35:30] can’t get you up to speed, we gotta make a [00:35:35] change.

[00:35:35] AJ: Yeah.

[00:35:35] Greg: I know that sounds heartless and cruel, but there’s a, there’s a, like I said, [00:35:40] you know, Robert Robert’s demonstrated and we’ve been successful with that approach of going, listen, let’s just be [00:35:45] honest with each other.

[00:35:45] We’ll help you you know, you don’t have to do the. [00:35:50] Friday afternoon, walk of shame with a banker’s box, you know, leaving under the cover of darkness, [00:35:55] and, and, and have people with some dignity. But everybody, I mean, [00:36:00] my energy level, because I get to do what I really like to do every day [00:36:05] at my age. Oh, man, I, I don’t think about retirement.

[00:36:08] This is fun. Why would I [00:36:10] quit?

[00:36:10] AJ: And I think that’s kind of to the point of what you were just saying too. It’s like if there is a, [00:36:15] you know, unproductive slot on the team, the likelihood they could be [00:36:20] productive elsewhere is a high potential. They’re just not being productive here. [00:36:25] So it’s beneficial to both parties and, and that’s what I love about this financial.[00:36:30]

[00:36:30] And, and it’s interesting because this is a very HR written kind of talk around people, [00:36:35] but shows up in the financial statements. And I think it’s a really important connection,

[00:36:39] Greg: The [00:36:40] important thing in the.

[00:36:40] AJ: right? And it’s like, but that’s, I think a lot of people silos those two things and don’t look at [00:36:45] financial statements to make HR related decisions.

[00:36:48] And this is combining those [00:36:50] things for an entrepreneurial company, you know?

[00:36:53] Greg: and, and I think [00:36:55] you,

[00:36:55] AJ: [00:37:00] [00:37:05] [00:37:10] Mm-hmm.

[00:37:13] Greg: there for a reason. [00:37:15] But when, when you dehumanize people and, and think of, [00:37:20] you know, this is, this is a cost that just has magical properties when it [00:37:25] works. Now, one of the things I will say that we’re, we’re noticing, [00:37:30] so, so we’re in a period of the economy that, you know, like I said, I mean, if, if I look [00:37:35] at my model and you, you tell me what do I think GDP really has been? I [00:37:40] think we’ve been somewhere between zero and negative 2% GDP for about 18 months [00:37:45] on the data I’m looking at. And now it’s a really hard number to [00:37:50] measure, especially in a service-based economy. But that, that’s where my feeling is. for [00:37:55] every company that’s up, there’s a company that’s

[00:37:56] AJ: Hmm.

[00:37:57] Greg: And so, so [00:38:00] in, in that, you know, kind of environment, you know, of, of this flat economy. [00:38:05] What we’re, what we’re seeing is companies with good [00:38:10] cultures are starting to separate first time economically. Now, they were a [00:38:15] better place to to work, but rarely did they actually have better economic performance,

[00:38:19] AJ: [00:38:20] Hmm.

[00:38:20] Greg: which is sad. It’s sad to say, but people never talked about that. I take, take [00:38:25] away the, the Googles and the Facebooks of the world that make insane money and they can throw, you know, they, [00:38:30] they can buy you food every day and all that.

[00:38:31] I mean, I’m talking about ordinary everyday businesses that we, we can’t afford that [00:38:35] kind of stuff, but we gotta have a good culture. We gotta have each other’s back. But there’s those ordinary [00:38:40] businesses that are the dirty job businesses that have great cultures [00:38:45] and, and those are, are separating, which I love it.

[00:38:48] I mean, this is. Matter of fact, I [00:38:50] mean, I love this market more than any market I’ve ever worked in because [00:38:55] it’s going to show success for those who are best

[00:38:59] AJ: [00:39:00] Hmm. That’s good.

[00:39:00] Greg: the last 25 years has been the participation trophy economy. I [00:39:05] mean, the, the economy was growing so fast that you could roll out the ball and pick up a [00:39:10] game and you didn’t have to be good. And, and, and those people sucked up a [00:39:15] lot of the activity of the market. They should have gone to the better businesses. [00:39:20] Now this is, this is a good competitive market and if you wanna grow in this market, [00:39:25] you’ve gotta go take your fist and punch your competitor in the mouth and take their business away from ’em [00:39:30] because the market isn’t growing.

[00:39:32] AJ: Yeah.

[00:39:33] Greg: we’re in a market share [00:39:35] growth economy, not a growth economy.

[00:39:38] AJ: Mm.

[00:39:38] Greg: I, I just hope to get [00:39:40] my share of the new growth that comes along and. Be, be better than the others for the new [00:39:45] stuff that comes along and be better positioned for that.

[00:39:47] AJ: But that’s a huge opportunity for people [00:39:50] who are the better business to take market share.

[00:39:53] Greg: It’s [00:39:55] absolutely,

[00:39:55] AJ: So,

[00:39:56] Greg: we haven’t had to think about market share [00:40:00] acquisition for 30 years.

[00:40:01] AJ: Hmm.

[00:40:02] Greg: You know, probably since the nineties. I mean, the [00:40:05] nineties was probably the last time. You know, that, that the economy [00:40:10] probably had, had some vestige of a market share. You know, the, the [00:40:15] GE days of Jack Welch, you know, I mean, he, he, he, he talked about being number one [00:40:20] or number two in every market that they had a subsidiary in. You know, so he thought about that way. [00:40:25] We’re getting back to that kind of a marketplace, but even on a much broader [00:40:30] scale,

[00:40:30] AJ: that’s even like for the micro businesses in local markets. And I think, and I, [00:40:35] and I, and I love this concept of LER for those reasons. There’s another concept that you [00:40:40] talk a lot though that I had also never heard about, which I’d love to talk about before we run outta [00:40:45] time, is contribution margin.

[00:40:48] And so [00:40:50] similar to LER. Labor efficiency ratio for everyone. I’m gonna keep repeating that. This was [00:40:55] another term that was fairly new to me in this, you know, kind of [00:41:00] business owner world that has now become like the leading indicator of [00:41:05] our company health and had never heard about it a year ago.

[00:41:09] Greg: [00:41:10] It, it’s a, it’s a, it’s a closer derivation to, from what we call [00:41:15] contribution margin. Most people would refer to as gross profit.

[00:41:18] AJ: Mm-hmm.

[00:41:19] Greg: I, [00:41:20] I’ll give Vern Harness credit for this. ’cause when I was writing the chapter for scaling up [00:41:25] back in 2014, and I was having a discussion after I’d written the chapter. [00:41:30] And I’d use the term instead of contribution margin, I’d use the term gross pro. Or actually, I, I used the [00:41:35] term gross profit instead of gross margin, and he recommended [00:41:40] eliminating the use of the word profit unless you’re talking about bottom line. And I thought [00:41:45] that was a very brilliant insight, you know, because he is exactly right. [00:41:50] so, but what already existed, which helped in terminology there, if [00:41:55] you look at QuickBooks. Traditional p and l, you’re gonna see a gross profit number, [00:42:00] or a, a term, which is after cost of good sold, which [00:42:05] includes your direct labor.

[00:42:06] AJ: Mm-hmm.

[00:42:06] Greg: were very adamant, we said direct labor should never be mixed [00:42:10] with something that’s not labor. Labor’s the only cost that comes to work every day with an attitude. It, [00:42:15] it has, it has a variable output component to it. And so once you [00:42:20] separate the non-labor cost of goods and then your direct labor. [00:42:25] wanted a clean term to call that we didn’t want to use gross profit ’cause that would confuse people with [00:42:30] gross margin. And so we, we, we said, well, it’s a subset, so use the word margin [00:42:35] and attach a modifier word to it. So we came up with contribution margin, was what we named it. [00:42:40] And essentially, you’re exactly right. I, I contend that contribution [00:42:45] margin is the most important number in the business because the [00:42:50] output of your business engine.

[00:42:51] It’s the horsepower measurement. So when [00:42:55] you’re talking about buying a car and you want to know how, what, what’s the horsepower of that? [00:43:00] That that’s what contribution margin is. and so, but it’s a clean number with [00:43:05] only out, three inputs on what’s your revenue, your cost of [00:43:10] goods, of materials and subcontractors, and then what’s your direct labor? And, and [00:43:15] that’s direct labor with no add-ons or any of the other loads that are unnecessary. [00:43:20] You know, it, it’s, it’s a clean, clean, clean number.

[00:43:23] AJ: Mm-hmm.

[00:43:23] Greg: What we found [00:43:25] is one of the, some of our clients who use bonus programs, we [00:43:30] believe that contribution margin is actually the best critical number to base [00:43:35] performance measurement programs for bonuses and those things off of, because [00:43:40] it’s the number that everybody in the business can do something about. can do something [00:43:45] about contribution margin. costs that come below contribution margin [00:43:50] largely rest in the hands of the owners, or a handful of people in corporate

[00:43:53] AJ: And what would you say, like [00:43:55] for everyone who’s listening, because I’m trying to, I wanna make sure this is in the show notes. What is the calculation for [00:44:00] contribution margin?

[00:44:01] Greg: revenue minus cost of goods [00:44:05] minus direct labor.

[00:44:06] AJ: Right.

[00:44:07] Greg: three numbers. Now we draw our subtitle. So revenue minus cost of [00:44:10] goods is gross margin. gross margin minus direct labor is contribution margin. Now. [00:44:15] Contribution margin becomes the numerator that we [00:44:20] hold management labor to. this was, this was a huge, huge [00:44:25] thing.

[00:44:25] So we, when we identified that, that started striking fear in the hearts of [00:44:30] management teams that we’d work with. we actually had a way to hold their wages [00:44:35] accountable to output. So they want, they wanna go on the top number. Well, [00:44:40] that, that’s the slippery snake. Not every dollar revenue is the same value. [00:44:45] That contribution margin is you had to sell it, you had to manage the [00:44:50] direct costs, and you had to manage direct labor. Those are the three primary functions of [00:44:55] management. I gotta be good at all three. I can’t just focus on one to the detriment of the other two.

[00:44:59] AJ: [00:45:00] That’s good.

[00:45:01] Greg: Yeah. And that’s, that’s why it, it, it is the supreme [00:45:05] number that really tells you the directional health of the business.

[00:45:08] AJ: Yeah. And ever [00:45:10] since we started working with your team, it’s like we, we did, like we [00:45:15] reevaluated our entire bonus structure the, the financial dashboards that we look at [00:45:20] it every single week to make sure that contribution margin was the leading indicator of [00:45:25] what our management team is looking at to go, are we doing the thing that we’re supposed to be doing?

[00:45:29] Greg: [00:45:30] Okay. Yeah, because, and, and think of it from the businesses that have a choice of either doing [00:45:35] something internally or contracting it out. Well the bene, the net [00:45:40] benefit of both of those activities fall into contribution margin. So I can [00:45:45] subcontract it, all of it, subcontract a piece of

[00:45:47] AJ: Mm-hmm.

[00:45:48] Greg: do perform, self, perform, all of it. [00:45:50] the same net number has to come out to justify the existing of [00:45:55] management that is down below that number and that ratio of output, a contribution [00:46:00] margin to a management labor dollar is really your north star of, of [00:46:05] management labor effectiveness.

[00:46:06] AJ: Yeah.

[00:46:07] Greg: we see this all the time as businesses go through growth [00:46:10] phases. We, I look at that management LER number and you’re growing, but your management [00:46:15] LER number’s going down or even staying flat, which is telling me you [00:46:20] continue to give away your gain to the management team in, [00:46:25] in labor costs, and you’re getting no leverage.

[00:46:27] AJ: Mm-hmm.

[00:46:28] Greg: should, that number should [00:46:30] get better as I get bigger, not flat to declining. [00:46:35] Same thing. Now we can take management labor, which generally also includes your sales labor. [00:46:40] companies. When we will take that number and separate it into two pieces of looking at sales labor [00:46:45] separately from management labor, we’ve identified many of flawed sales [00:46:50] compensation plans sales LER, which is based on its numerator’s [00:46:55] contribution margin as well, that sales LER is flat to declining, [00:47:00] which tells you I get no leverage from somebody selling more.

[00:47:03] AJ: Mm-hmm.

[00:47:04] Greg: mean, the, the [00:47:05] company has got to get a better end of that deal

[00:47:07] AJ: Yeah.

[00:47:08] Greg: you, you’re just, you, you’re [00:47:10] just running that, that wheel faster and faster and getting less and less out.

[00:47:13] AJ: Yeah. It’s one of those, the [00:47:15] biggest lessons that I learned as a, a young entrepreneur is like, the number one reason most [00:47:20] companies don’t last is they simply run outta money. And that’s not revenue is that there’s [00:47:25] no money left over. Right. And at some point that’s, you know, it’s, it’s [00:47:30] mismanaged.

[00:47:30] Financials isn’t the right word, but it’s a true lack of awareness of the different [00:47:35] levers that run a business. And that’s why I just, for everyone who’s listening, [00:47:40] I know that we’re talking about. Seemingly complex [00:47:45] concepts, but y’all, the book, simple Numbers and Simple Numbers [00:47:50] 2.0. Highly recommend the simplicity of taking these seemingly complex terms and [00:47:55] making ‘ em exactly what we just said.

[00:47:56] They’re simple numbers that will help you guide your [00:48:00] business. And if you wanna learn more about what they do on a consulting and a, a [00:48:05] business aspect just go to simple numbers. CR i.com [00:48:10] and you can learn about all that. The thing that they do for companies, like they do for ours at Brain Builders [00:48:15] Group.

[00:48:15] And if you wanna learn just more about Greg, you can go to greg crabtree.net. He [00:48:20] does speaking engagements. You can learn more about his books there. But these are [00:48:25] financial terms that help businesses and help personal brands ensure that [00:48:30] you have the runway to do the thing that you started out to do, which I think is.

[00:48:34] Greg: Well, [00:48:35] well, I think, I think much in the way that, you know, you tell a story with somebody. Brand, [00:48:40] we, we essentially are storytellers with data because like when we did our planning session with [00:48:45] you, didn’t just look at the current snapshot of your financials. [00:48:50] just look at it compared to a single point in time.

[00:48:52] In the past, we looked at it [00:48:55] across time in a flow state, and what we found is [00:49:00] when I can tell you a story about this is what the data’s telling you here, and [00:49:05] you think back to what was happening then. Here’s what the data’s telling you here and how [00:49:10] that’s reacting. You’re exactly right. I mean, the entrepreneurs [00:49:15] struggle with time, context of what they feel about [00:49:20] what’s happening versus what the data’s telling them, and what our goal is to get [00:49:25] those from a out of time sink into time sink.

[00:49:27] AJ: Mm-hmm.

[00:49:28] Greg: I want your feelings and the [00:49:30] data to be aligned, you know, at, at the time. And I think it, it is just a handful of [00:49:35] numbers that help you do that.

[00:49:36] AJ: Yeah. And I would tell you every single time that I get on a call [00:49:40] with our simple numbers representative my feelings of [00:49:45] we’re not hitting our numbers, we’re not doing well, he very quickly is like, [00:49:50] what numbers are you looking at? Because when we look at the historical trailing 12 [00:49:55] months. You’re doing great.

[00:49:57] And I’m like, we are, we are. And [00:50:00] it’s, again, back to it’s, the feelings don’t often match the facts, but you [00:50:05] gotta have the data in front of you to line those up at the same time. Okay, Greg, so I, I know [00:50:10] we have just two minutes left and I have two very quick questions for you. This is for. [00:50:15] The early on entrepreneur, and then also for the more advanced established [00:50:20] entrepreneur.

[00:50:20] If they were listening to this episode, what would you say is the number [00:50:25] one action item that each one of those categories, the early on just getting started [00:50:30] and the advanced person should do leaving hearing this [00:50:35] conversation?

[00:50:35] Greg: Well, in essence, a little bit of both, but especially the early on entrepreneur, [00:50:40] you’re trying to get the financial truth. And so we talk about this in the first book. Really, the first four [00:50:45] chapters of the first book is just primary reading material for that early, that million [00:50:50] dollar or below entrepreneur, because you gotta get your salary set to a market wage. You [00:50:55] gotta eliminate distortions in your data so that you’re being honest with yourself about the [00:51:00] economic truth so that you can set pricing process people, you know, to get [00:51:05] those things aligned. But you’re gonna get to that, your, your signature LER number [00:51:10] is going to come very, very, very early in your business, probably somewhere in the [00:51:15] 500 to $750,000 range once you’re a larger business. [00:51:20] It’s reminding them of what the things they did that got ’em there.

[00:51:23] AJ: Hmm.

[00:51:24] Greg: Because they [00:51:25] tend to start to think, oh, we’re a bigger business and we should act differently. So no, [00:51:30] no. I mean, you need to hold on to that profitability back there. [00:51:35] and I think for the bigger business in a market like we’re in, you’ve also [00:51:40] got to understand that if we’re not in an expanding marketplace like we have been [00:51:45] in, where do you settle out?

[00:51:47] Are, you know, I mean, you can’t just sit still. I mean, you’re [00:51:50] always gonna grow, prune, grow, prune, even if you stay at the same revenue number. You’ve got to really [00:51:55] have a strategic decision of looking at your market and saying, how do we gain market [00:52:00] share? And when do we get to where the next percentage of market share isn’t worth it? And [00:52:05] there’s a point that we always get to. And then, what is your strategy from there? And I’ll just [00:52:10] plant the seed and we’ll talk about this on a later podcast. The emerging trend [00:52:15] that I love, and we got multiple clients now that do, this is what I call the emergence of the [00:52:20] portfolio entrepreneur.

[00:52:20] AJ: Hmm.

[00:52:21] Greg: You’re going to optimize the primary business you’re in [00:52:25] and then start another business that may be in a totally different industry [00:52:30] and, and we’re seeing people stack, you know, 5, 10, 15 business [00:52:35] units together with one. I mean, business is business at the end of the day. [00:52:40] You know, leadership is leadership. HR is hr. You know, marketing is marketing. Yes, you use [00:52:45] different techniques, but the concepts are essentially transferrable across many business [00:52:50] platforms. So this idea of, you know, running, you know, a, a multiple [00:52:55] business optimized entity with a very thin, not a heavy corporate structure, [00:53:00] but just the right amount of leadership and skillset that can be more effectively [00:53:05] utilized across multiple businesses instead of one. That, that’s an emerging trend [00:53:10] that I think you’re gonna see a lot more of.

[00:53:11] AJ: Hmm. Yeah. And I, I have seen that [00:53:15] in our entrepreneur community not just here in Nashville, but across the country. [00:53:20] All right, Greg, last question. In the financial worlds that [00:53:25] you live in, but also in the entrepreneurial community that you live in, what does [00:53:30] influential mean to you?

[00:53:34] Greg: [00:53:35] That’s a, a question I’ve never been asked. I mean, I, I think [00:53:40] influential is someone that is, is a go-to [00:53:45] person. I. So not so much trying to be influential, [00:53:50] but it’s someone that is sought out [00:53:55] you know, is the, the word that comes to mind is kind of an anchor. You know, [00:54:00] Hey, I want to anchor myself in good wisdom, founded [00:54:05] principles, and, and, and, and somebody that, you know, [00:54:10] kind of sets helps you set the cornerstones of the playing field. In that [00:54:15] and, and I think, you know, influence is not necessarily always something that’s pedaled. [00:54:20] It’s more so of, of something that’s maintained.
[00:54:22] AJ: [00:54:25] I love that. This has been so good. Y’all, again, I [00:54:30] can’t iterate this enough. And reiterate, it’s like the book is a wealth of [00:54:35] value. It’s like you’re gonna get an entire financial degree for roughly $25.

[00:54:40] So, get the book check them out simple number c i.com. [00:54:45] Also, feel free to learn about [email protected].

[00:54:48] Greg, thank you so much for [00:54:50] being on the sh

Ep 590: How Entrepreneurs Should REALLY Think About Wealth | Jim & Mimi Dew Recap

[00:00:00] Can we stop confusing wealth and revenue [00:00:05] together for just a second? And that’s kinda, I wanna start there. There’s a difference [00:00:10] between wealth and revenue and what our job is in this conversation is to stop [00:00:15] talking about the two, like they’re the same. Making money is not the [00:00:20] same.

[00:00:20] Is building wealth, and if you’re an entrepreneur, the way you think about [00:00:25] money needs to be completely different. So let’s actually talk about how to build wealth, [00:00:30] not just chase cash flow, right? So there are three different [00:00:35] categories of things that I wanna talk about in the next five to seven minutes that I think can drastically help you make [00:00:40] these very simple distinctions between wealth and money in your life.

[00:00:44] Number [00:00:45] one is the mindset shift between income versus wealth. Here’s what most [00:00:50] entrepreneurs tend to get wrong, is that you think more clients equal more money. [00:00:55] Equals more freedom. But wealth is not about how much money you make, it’s about how much you [00:01:00] get to keep, how much you get to grow, and how you multiply that, right?

[00:01:04] [00:01:05] That is the difference between money and wealth, right? And you don’t build [00:01:10] wealth from your income usually, and you build it from your decisions. [00:01:15] Okay. Most wealth is built not because you made a lot of money, is that you [00:01:20] made the necessary decisions in how to keep, grow and multiply that money over the [00:01:25] course of time.

[00:01:25] This is a, an emotional component of how we treat and think [00:01:30] about money. Okay? So key points here. Wealth is not [00:01:35] directly connected to revenue or income. I know plenty of wealthy people who do [00:01:40] not even make six figures. But they have made decisions about how to [00:01:45] deploy their money into ways that grow over the course of time.

[00:01:48] Number two [00:01:50] money is a tool, not a goal, right? I don’t set money goals [00:01:55] right now. Do we have financial budgets and do we have growth objectives? Absolutely. But [00:02:00] income, money is a tool. It’s not a goal. And wealth is a [00:02:05] strategy, not a result. Right. Wealth happens through incremental decisions [00:02:10] over the course of a lifetime.

[00:02:11] Not some results, some destination that we end [00:02:15] at haphazardly. Second thing I wanna talk about. There [00:02:20] are three buckets of entrepreneurial wealth, and now I’m using the term [00:02:25] entrepreneur a lot. But this could be a small business owner, it could be a solopreneur. This could be [00:02:30] anyone who is trying to figure out how do I grow and build?

[00:02:34] [00:02:35] My wealth. So think about it in three buckets. Number one, you have your active income. That’s your [00:02:40] business, right? That’s the money that you’re generating through your business. Number two, you have passive income, right? [00:02:45] Those are things that you’re investing into, right? And that could be anything from [00:02:50] retirement accounts to real estate to.

[00:02:53] A plethora of other [00:02:55] things that I won’t even take the time to mention here, but it’s where you’re investing your money. So [00:03:00] active is where you’re making your money. It’s your business. Then you’ve got passive. That’s what you’re investing [00:03:05] into. And then you have your protected income. So you have active, you have passive, then you [00:03:10] have protected income, and that is what you’re setting aside in savings and [00:03:15] you’re shielding for later.

[00:03:16] Right? And that could be later. Post working years. [00:03:20] That could be in the case of an emergency. It could be again for a plethora of different things. [00:03:25] But you have active, that’s company currently. You have passive that’s happening right behind the [00:03:30] scenes ’cause of your investments. And then you have protected IE savings, right?

[00:03:34] And the, a [00:03:35] variety of different savings accounts as well. But bucket number one, your active income [00:03:40] that’s what pays for your current lifestyle, right? That’s what pays for your bills. Bucket number two, your [00:03:45] investments, that’s where you’re growing your money, right? So you’re, you’re deploying the money that you have right [00:03:50] now into investments that’s hopefully earning a, a percentage of interest [00:03:55] beyond inflation that will grow over the course of time.

[00:03:58] And if as long as you leave your money [00:04:00] in historically speaking, that will always happen, right? But we’re looking for [00:04:05] returns that are greater than the rate of inflation. But the key to that is longevity. [00:04:10] Right. So the earlier you put it in and the longer you let it sit, the rollercoaster that we’ve [00:04:15] experienced in the last decade or so it all levels out over the course of time, [00:04:20] historically speaking.

[00:04:20] And then bucket number three, which is what we’re calling your protected IE your [00:04:25] savings money. That’s for retirement. It’s insurance, it’s emergency [00:04:30] funds. It’s all the things that may happen that are unexpected. [00:04:35] Right. And that’s the protected income. And I think a big part of this conversation [00:04:40] is again, it’s separating what is income versus what is wealth.

[00:04:44] [00:04:45] And you’re not wealthy typically because of what you earn for most of us, right? We’re not talking [00:04:50] about the Warren Buffetts of the world. Even though there was a time that Warren Buffett. Was not Warren [00:04:55] Buffet, right? There was a time where he was deploying these exact same strategies. [00:05:00] He just did it successfully enough and long enough to get to where he is [00:05:05] today.

[00:05:05] And I’m not saying all of us are striving to be Warren Buffett’s and with billions of dollars [00:05:10] that’s not what ~I’m saying, ~I’m saying, but we can deploy the same strategies, the same tactics in our own lives [00:05:15] to make sure that ~we, ~we have the life~ that we can, ~that’s at our disposal. ~Right. ~That doesn’t mean that we’re [00:05:20] all going to be buying yachts and flying private jets.

[00:05:22] Most of us probably don’t even want that. [00:05:25] But there is also some things that we can pull out ~and, ~[00:05:30] and apply to how we think and treat money that will help us do things [00:05:35] and ways that will set us up for success in the future. But I’m gonna say it again. It’s like you’re not wealthy because of what you [00:05:40] earn.

[00:05:40] You’re typically wealthy because of what you own. Right. And I wanna say that’s not just [00:05:45] material assets, right? This isn’t about earning, this is about owning. Now, I [00:05:50] think a lot of ~that ~that is underestimated when I talk about this, is also your knowledge, your [00:05:55] education, your expertise, right? If you have a skillset that is [00:06:00] transferrable, then there is always an opportunity for you to earn more somewhere else [00:06:05] later.

[00:06:05] Right. But that is owning your intellectual property. It’s owning your education [00:06:10] experience and expertise. It is owning that you’re in charge of learning how to [00:06:15] be the best at what you do. Now, owning can also be real estate. Owning can [00:06:20] also be investments. Owning can. Lend itself in a lot of different categories, [00:06:25] but most people’s wealth didn’t come from their earnings.

[00:06:28] It came from [00:06:30] what they owned, their earnings. And that is also just as much up here in your [00:06:35] head as it is in real estate or investments or any of the other [00:06:40] vehicles that you can do ~to, ~to earn outside of your ordinary income. I just wanted to put a heavy [00:06:45] emphasis on what’s underestimated when we talk about this.

[00:06:48] Is owning your intellectual [00:06:50] property, owning your skill sets, owning your expertise, investing into yourself, investing [00:06:55] into your education. That is something that no one can take away, right? No natural disaster can [00:07:00] take out that property. No one can remove that from you. You own it. It is [00:07:05] yours. Right.

[00:07:05] That is knowledge and education and information and skills that you have developed that can [00:07:10] be deployed anywhere at any time. Do not underestimate the [00:07:15] importance of investing into yourself as a part of becoming wealthy. [00:07:20] Now last, but certainly not least I wanna also talk about what you can start doing right [00:07:25] now to build wealth regardless of how much money you’re making.

[00:07:29] Doesn’t matter if you’re [00:07:30] making $40,000 a year or you’re making $4 million a year, what you make top line [00:07:35] has nothing to do with how wealthy you are, right? So let’s talk about some of those things. [00:07:40] This is in the entrepreneurial category, of course. Number one, make sure you pay yourself a [00:07:45] set salary, right?

[00:07:46] Revenue does not always mean income. ~I. ~And most business [00:07:50] owners most entrepreneurs pay themselves last, right? But make sure that you give yourself a set [00:07:55] salary. Number two, make sure that you’re setting aside 15 to 30% [00:08:00] in taxes and savings, right? You need that for emergency accounts. You need that to pay the [00:08:05] government but you also need that for your own ~s ~nest egg.

[00:08:07] Number three make sure that you talk to [00:08:10] financial advisors that actually work with business owners. Not all financial advisors [00:08:15] are equal. Not all tax strategies are equal, so make sure that you were [00:08:20] talking to people who specialize in actually working with entrepreneurs and business [00:08:25] owners. Those are different conversations for different types of people.

[00:08:28] So make sure that you’re talking to [00:08:30] people who cater and specialize in your unique realm as an entrepreneur or business owner. [00:08:35] And then last and certainly not least, and there’s a time and a place for everything, [00:08:40] but make sure you’re investing outside of your business. Even if it’s just $50 a month.

[00:08:44] And that could [00:08:45] be in simple IRAs, could be in Roth IRAs, it could be in a [00:08:50] 401k plan. It could be making sure that you have the necessary insurance in place. ~It could be in those but ~it could be in [00:08:55] other things, right? It could be in different mutual funds. But make sure that [00:09:00] you are using some of the money you have to deploy so that it’s working outside of your business.

[00:09:04] So [00:09:05] I could spend. Hours more talking about this. But I just wanna leave you with [00:09:10] this. You don’t have to be rich to build wealth, you have to be disciplined and [00:09:15] intentional to build wealth. And this is about freedom, not a flash. This [00:09:20] is about building something that allows you to do the things that you want to do [00:09:25] in this life, in this world, not something that is gonna be fleeting [00:09:30] and non-essential in the current day.

[00:09:32] So all of this has to do with [00:09:35] building wealth. And that is separate from your income and you do not have to be [00:09:40] rich in order to be wealthy.

Ep 589: Transforming Wealth Management for Entrepreneurs | Jim & Mimi Dew

[00:00:00] AJ: Hey everybody, welcome to the influential Personal Brand podcast, AJ Vaden here, [00:00:05] and I’m so, so excited to have this conversation with [00:00:10] Jim and Mimi do today, hun, because I love getting to learn from people that I [00:00:15] already follow, admire, and respect.

[00:00:17] But then super selfishly, I know [00:00:20] that every single thing they’re gonna share today would cost thousands and thousands of dollars to [00:00:25] pay for, and I get. The privilege of learning today along with everyone who’s [00:00:30] listening. And so, as you guys know, I kind of tell you who the episode is for. And you know, I think [00:00:35] it’s important that if I think this is an episode that everyone’s gonna benefit from, I’ll tell you upfront so that you can [00:00:40] set aside the next hour and not wonder is this for me?

[00:00:42] So let me go ahead and tell you [00:00:45] why I think this is one of those universal conversations that’s applicable to [00:00:50] everyone who’s listening. No matter what stage of business or personal branding that you’re in, [00:00:55] number one, we’re gonna be talking about wealth strategies. And uh, I think this is part [00:01:00] how do you make money, right?

[00:01:01] But there’s another part of it, which is how do you keep the money you make, right? And that’s the [00:01:05] wealth strategy part. And so if you’d like to talk about how do you keep more of all that [00:01:10] money you’re working hard for, then this is a conversation for two. Number two, we’re gonna talk about [00:01:15] understanding the importance of structured.

[00:01:17] Wealth management. And I think that is [00:01:20] also important ’cause there’s a concept of money, but then there’s all the tools, tactics, uh, tactics, [00:01:25] practices and best use cases of how do you actually create structure [00:01:30] to handling your finances. Well, everyone can learn something with that. Doesn’t matter if you [00:01:35] have.

[00:01:35] $10 in your banking account or 10 million. There are things to be learned about that. [00:01:40] And then what I’m personally most excited for is to learn all the blind [00:01:45] spots, the mistakes, the what to avoid, all the things that you [00:01:50] just don’t get to learn in every day. Business, marketplace, practice, these are the [00:01:55] things that you learn from professionals who’ve been behind the scenes, helped build [00:02:00] their own businesses, have worked behind the scenes with other very successful eight figure.

[00:02:04] [00:02:05] Probably even nine figure business owners that you just don’t get the opportunity to have these [00:02:10] conversations very often, and that’s what I’m most excited for. So Jim [00:02:15] and Mimi, I’m so excited to spend the next roughly 50 minutes with you. But I [00:02:20] also want to kind of give a joint bio of both of you so you guys have a [00:02:25] professional bio for everyone.

[00:02:26] So this dynamic duo is, uh, the dual founders [00:02:30] of DU Wealth Management, uh, specializing in providing fractional family office [00:02:35] services for seven and eight figure entrepreneurs. And with a combined experience of over 30 [00:02:40] years doing this, they have helped countless business business owners protect, [00:02:45] grow, and pro, uh, protect, transfer.

[00:02:47] Which I think is a big part of [00:02:50] conversation as well, their wealth strategically. So Jim and Mimi, welcome to the show. [00:02:55]

[00:02:55] Jim: Thanks,

[00:02:56] Mimi: aj. Thank you so much for having us here. Great to be, yeah, super excited to be [00:03:00] here. Jen and I will try not to talk over each other.

[00:03:04] Jim: Yeah. Which is gonna be [00:03:05] hard because we’ve been married for 32 years, so that’s,

[00:03:07] AJ: that’s exactly what Rory and I do like when we’re [00:03:10] on podcast interviews and so now like we have like all these like.

[00:03:13] Just best practices of, we [00:03:15] have like an eye and he knows if I’m giving him the eye, like I’m answering this first, [00:03:20] this eye movements. Uh, that’s what we do. But I’m so excited to have this [00:03:25] conversation and where I’d love to start is just helping [00:03:30] people. I think even understand what wealth management is.

[00:03:33] That’s a term that’s really broadly [00:03:35] thrown around in different business communities. You hear people talk about wealth [00:03:40] management, but what is that? What do you actually do to manage your [00:03:45] wealth? Mm-hmm.

[00:03:48] Jim: You wanna take that? Me? [00:03:50]

[00:03:50] Mimi: I’m gonna let Jim take it. Yeah. I, I’m giving him the, i [00:03:55]

[00:03:55] Jim: You always gotta ask your wife first for permission.

[00:03:57] You know, that’s a smart thing to do. You know, wealth management [00:04:00] comes in all kinds of. Flavors and sizes and everything else. But I think the key is, let’s boil it [00:04:05] down to its essence. And the essence is really the three pillars of wealth management, which is [00:04:10] protecting what you’re making and you’re building, managing what [00:04:15] you’re creating and building, and then also growing what you’re [00:04:20] creating, the money you’re making and everything else.

[00:04:22] And I think that people overcomplicate it [00:04:25] because what you really want to do is think about what do you want to achieve with your money? What are your [00:04:30] goals? What matters to you? And if you think about it, there’s a lot of things you can do with your money, but there’s only [00:04:35] three things that will make you happy and the three ways you can be happy spending your money is spending [00:04:40] money on experiences with people you love spending money to get your time [00:04:45] back.

[00:04:46] Giving your money away. Those are really the only three ways you can get [00:04:50] happier with your money. So thinking about in that, in that context of [00:04:55] what is it that you wanna achieve that would create memories with people you love? What is it that you would want to [00:05:00] achieve that allows you to buy back your time?

[00:05:03] And then what would you like to [00:05:05] achieve that would allow you to give back? And if you do those three things, you’ll be much happier. Mm-hmm. So those would be the [00:05:10] essence of what it means to manage your wealth.

[00:05:14] AJ: I love [00:05:15] that. You know, um, I just finished reading this book called [00:05:20] Die With Zero.

[00:05:21] Yeah.

[00:05:21] AJ: Oh yeah.

[00:05:22] And it’s a, it’s a [00:05:25] fascinating, interesting book and there’s lots of things I agree with, a few things I didn’t agree with. Um, [00:05:30] but I think there’s something you can learn from anything. And one of the biggest takeaways is, you know, how are [00:05:35] you spending your money to have better life experiences? Right, right.

[00:05:39] And I [00:05:40] love what you said at the very end of the book, which is at the end of, end of your life, right. [00:05:45] No one’s going to put on their tombstone had 10 million in net worth. And it was like [00:05:50] that really simple but common reminder. It’s like memories are what you [00:05:55] have at the very end, right? It’s like, what did you do with the people you loved?

[00:05:59] What did you do with the [00:06:00] money you had to help people around you? And that was like a very profound kind of [00:06:05] ending for me of like, yeah, like am I just. Hoarding money away to for a [00:06:10] rainy day, or am I doing it to grow the joy and experiences [00:06:15] of me others and serving the causes that I so deeply believe in?

[00:06:18] So I love that [00:06:20] you brought that up right here in the front, because I don’t think a lot of people talk about that.

[00:06:24] Mimi: [00:06:25] Yeah, we think about that all the time. The entrepreneurs, business owners, who we work with, I mean, all [00:06:30] of them give back the legacies that they’ve created. And so that’s why we love what we [00:06:35] do and the people who we serve.

[00:06:36] It’s, it’s just again, about giving back [00:06:40] experiences, creating memories, like you said.

[00:06:42] AJ: Yeah. I think that’s at the end of the day, [00:06:45] right? It’s like, what are we making all this money for? Right? Like what is it all for? So I, [00:06:50] I’d love to kind of. Start with that because a lot of the people that you work with have made a lot of money, [00:06:55] right?

[00:06:55] Mm-hmm. And I would love to hear from you guys, like what [00:07:00] are some of the most simplistic but. Helpful strategies [00:07:05] that you have learned from very, very, very successful and wealthy people, including your own [00:07:10] practices that anyone can employ to help them have the same wealth strategies [00:07:15] as you know, today’s billionaires.

[00:07:17] Jim: Yeah, probably the, the first thing I would say is [00:07:20] the most important thing, or one of the most important things is having the [00:07:25] right team. Because every entrepreneur over their lifetime, and this is true of whether you’re an entrepreneur or not, [00:07:30] over your lifetime, you’re gonna pick up an accountant, an insurance agent, a [00:07:35] banker, maybe an investment advisor.

[00:07:37] You know, an attorney maybe to do your will [00:07:40] or your trust or maybe an attorney for your corporate world, you’re gonna get these different professionals. And if [00:07:45] you picture those like spokes on the wheel, on a wheel like I have behind me, usually that’s what we call a [00:07:50] financial flat tire. ’cause they’re usually not all A players, they’re not talking to each other.

[00:07:54] And the [00:07:55] worst part is you are in the middle of that wheel trying to manage that team when you don’t have the time and you don’t speak the [00:08:00] languages of tax, legal insurance and investments. So the first thing I think is [00:08:05] to evaluate your team. To try to uplevel that team so you have a [00:08:10] players that are pulling for you and serving you and not serving themselves in silos, [00:08:15] which is what we see a lot.

[00:08:16] AJ: I have a question about that because I think it’s very hard [00:08:20] to find a good team, the right team, maybe good’s not the right word, [00:08:25] that the right team for you. Right. And I think one of the things that we have discovered is it’s [00:08:30] exceptionally difficult to find. Really amazing vendors, [00:08:35] partners, teams. Mm-hmm.

[00:08:37] So how do you, how do you do that? Like, how do you know that you have a [00:08:40] good one? How do you know that what you’re entrusting someone with, which in this case is a lot of [00:08:45] our livelihoods, right? Our finances. Our finances of going, right. It’s not [00:08:50] only that, hey, they’re not gonna do anything corrupt or, you know, experience malpractice, [00:08:55] but it’s like they’re making good decisions and I, I can trust them.

[00:08:58] Like, how do you discern [00:09:00] that?

[00:09:02] Mimi: Yeah. One of the things is to look for [00:09:05] specialists. There’s a lot of generalists out there and, um, who, who say that [00:09:10] they serve entrepreneurs and some retirees, et cetera, and so [00:09:15] entrepreneurs and business owners. Needs specific strategies, specific tax planning, [00:09:20] specific wealth strategies that we’re talk, gonna be talking about today.

[00:09:23] And if they don’t [00:09:25] specialize, it’s just kind of like, I think it’s their correct information. [00:09:30] It’s like if you were to see. You needed a surgeon in a certain area, let’s say [00:09:35] a heart surgeon. Um, you wouldn’t go to a surgeon who, an orthopedic [00:09:40] surgeon who just specializes in limbs, hip surgeries, knee surgeries and [00:09:45] things like that.

[00:09:45] So specialty is one of the things to definitely look at.

[00:09:49] Jim: Yeah, I, I [00:09:50] got two ways I’d answer that aj. One is what everyone on the call could do to [00:09:55] evaluate their team, and then the up level, which is finding someone who can do that for you, who has [00:10:00] expertise. Mm-hmm.

[00:10:01] Right?

[00:10:01] Jim: Because always if you find an expert that can do it for you, that can be the right answer.

[00:10:04] So [00:10:05] if you’re evaluating your team, which you should, I would say everyone on the call, write down your [00:10:10] professionals on a wheel, your account, and your attorney, your insurance agent, and then rank them one to 10. [00:10:15] And then once you rank them one to 10, one being should have fired ’em yesterday, 10 being [00:10:20] they’re the most amazing advisor you’ve ever met, then ask yourself, why am I rating [00:10:25] that person a seven or a nine or a two?

[00:10:28] Right? Because if [00:10:30] you don’t really have a good reason why you’re rating your professional ’cause I often hear entrepreneurs will say, well, [00:10:35] I like my so and so. Why? Because they return my calls and they’re nice to me. Okay, well there’s [00:10:40] more to that to decide if someone’s a really qualified professional.

[00:10:42] So there are five areas that I would say you should look [00:10:45] at. The first area is education and credentials. Second area would be looking at [00:10:50] their regulatory history, which you can look up on the websites, whether it’s your state board of [00:10:55] Accountancy, your state board of insurance, your uh, bar association.

[00:10:59] The third thing would [00:11:00] be their specialty, as Mimi said, what’s their specialty and how does that apply to you? Also, their [00:11:05] experience. How long have they been doing this? Hmm. And then the fifth thing is their personality and their follow through. [00:11:10] If you’re trying to get a first meeting to evaluate a professional, and they can’t even.

[00:11:13] Get the meeting set [00:11:15] up or they don’t follow up and let you know when the meeting is, then you can’t trust them to do a good job when you’re [00:11:20] actually working with them. So those are five areas you can look at. Now, the up level is when you get to a [00:11:25] place where you can hire a firm that actually builds your team out for you.

[00:11:28] And that’s really what we [00:11:30] talk about in the fractional family office, where you have a firm that knows how to build those. I [00:11:35] know we’ve been doing this for 26 years, our company that we started together in 1999, and we’ve [00:11:40] got over 500. Of the top professionals in every area of tax, legal, [00:11:45] insurance and investment.

[00:11:45] So when we have a new client, we evaluate their team and then we go, Hey, your accountant’s no [00:11:50] good. Let’s bring in an A player that we’ve worked with before. Your insurance agent is not the best. [00:11:55] Let’s get an A player that we’ve worked with before. So that would be the next level, when you can actually afford to [00:12:00] hire someone to build the team and run the team, and to manage the team for you.

[00:12:04] AJ: Yeah, I [00:12:05] think that’s really good. And I, I love, you know, the specialist component of it. ’cause I think a lot of people are [00:12:10] like, I just want a one stop shop. Right. And that means you’re getting just [00:12:15] surface level experience over everything and deep experience and nothing. I think that [00:12:20] happens a ton. ’cause people don’t have the time, right?

[00:12:22] And they’re just like, I just need one person who can do all the things. [00:12:25] And that at some point is no longer serving you very well. And then I love the other part of, hey, [00:12:30] evaluate who you’ve got. And I love those five criteria. I think those are really healthy. And then [00:12:35] knowing when have you outgrown them.

[00:12:38] And I think that’s the up level part. At [00:12:40] some point you continue to be successful in what you’re doing. You could [00:12:45] likely outgrow the team you have. So it’s making sure that you’re evaluating those in the plan. I [00:12:50] think those, those are really good, healthy parameters to start this conversation. So you [00:12:55] mentioned this Mimi with like, what are some of those wealth strategies and tax strategies we’re gonna talk about?[00:13:00]

[00:13:00] Let’s talk about those. What, what are the wealth strategies that [00:13:05] we, as entrepreneurs need to be aware of? And then I’d love to talk about taxes ’cause I find [00:13:10] taxes fascinating and frustrating at the same time. But, we’ll, we’ll start with the [00:13:15] happier of these two topics. The, the wealth strategies. What, what do we need to know as entrepreneurs?

[00:13:19] [00:13:20] What do we don’t know that we should know? Maybe start there.

[00:13:24] Mimi: Yeah, I know one [00:13:25] of the things that, especially in our industry, entrepreneurs are listening to friends, [00:13:30] listening to, uh, professionals who really don’t understand how to give [00:13:35] professional advice specifically to the business owners. And, um, so.[00:13:40]

[00:13:40] The main thing is, number one, to look and find a professional who specializes [00:13:45] in working with, uh, business owners, and then also looking for somebody who [00:13:50] isn’t there to sell products. Uh, there’s so many who kind of a Backended [00:13:55] way come in and say, you need this type of a product because it’s going to [00:14:00] save you this, or it’s gonna help you with text.

[00:14:02] Planning and really what’s behind [00:14:05] the scenes is commissions. It’s about, so if a professional comes in to sell you a [00:14:10] product, because there’s a big commission at the end. So that’s something definitely to, to look out [00:14:15] for since that is often sold as a wealth strategy or a [00:14:20] wealth plan. Um. And some other things.

[00:14:23] So anyways, Jim, what are, [00:14:25] what are some of the other things that

[00:14:26] Jim: I, I like to think there’s sexy things about wealth planning [00:14:30] and then there’s, and there’s things that are not sexy at all and entrepreneurs love the sexy stuff.

[00:14:34] Mm-hmm.

[00:14:34] Jim: So, [00:14:35] I, I wanna scratch that itch, but let’s start with the non-sexy stuff, right?

[00:14:37] So when I talk about the main pillars of [00:14:40] wealth management. Protect, manage and grow. Protect means things like insurance. Everybody hates [00:14:45] insurance.

[00:14:45] Yeah. It’s

[00:14:45] Jim: like a necessary evil, but overpaying for insurance or not having the right [00:14:50] coverages mm-hmm. Could put you at risk if you ever get sued, if there’s a problem with your business.

[00:14:54] So you [00:14:55] know that protect is really important. Also, entity structure.

[00:14:58] Mm-hmm.

[00:14:59] Jim: I’ve seen entrepreneurs, [00:15:00] they get. All these complicated entities way before their time, that becomes difficult to [00:15:05] manage. They don’t manage ’em correctly. They’re not keeping them compliant, which risk blowing up. Even if [00:15:10] you get sued, if you’re using it to protect you or.

[00:15:13] Too simplified. They don’t have enough [00:15:15] stuff because they’ve grown enough wealth where they need more on the entity structure. So I could spend a lot of [00:15:20] time on that, but those are not sexy, but those are critically important. Then on the more fun stuff, like grow, [00:15:25] entrepreneurs love to grow their money, and one of the problems entrepreneurs have is [00:15:30] that, and what we fall into this category.

[00:15:31] Mm-hmm. You start with something that has a possibility. Right? [00:15:35] We started our company 26 years ago. No one would’ve believed we could have made it. Because most businesses [00:15:40] fail. So we’re believing in possibilities. There’s a possibility we could make this work. And [00:15:45] then guess what? We did it. We made it work.

[00:15:47] We created this really successful company, sold to our [00:15:50] employees in 2022, still running the Business Inc. 5,004 years in a row. All [00:15:55] these things, right? So we’re like, we believe that we can make a possibility come [00:16:00] true. Then we have all this money we’re making and now we have to invest it. And guess [00:16:05] what?

[00:16:05] The tendency of the entrepreneur is to invest in things that have possibilities. [00:16:10] Hey, my friend’s doing the startup. I believe in possibilities ’cause I made this possibility come true [00:16:15] and I want something that’s gonna make incredible returns like my business. So they end up putting [00:16:20] their money in these deals where they lose their money and, and I don’t know if you’ve ever done this, [00:16:25] aj, but here’s the recipe, right?

[00:16:26] Hey, here’s someone I like, they brought me a deal. It’s very exclusive. [00:16:30] Most people don’t have access to it. Uhhuh, I gotta get my money to ’em in two weeks ’cause it’s oversubscribed. And [00:16:35] I look at the idea and I love the idea this can’t miss, and then I look at the financials, [00:16:40] it’s all up and to the right.

[00:16:41] I’m gonna make so much money off this deal. I throw money in and then guess what? I [00:16:45] lose all my money. That’s what entrepreneurs all the time do all the time. ’cause they wanna invest [00:16:50] in possibilities. They’re gonna make ’em these huge returns like their business. But what you need to [00:16:55] do is realize you are the very unusual that [00:17:00] made it work and you succeeded now to keep your money because.

[00:17:04] Creating a [00:17:05] business to make a lot of money is one thing, but keeping your money as the other. So to keep your money, you have [00:17:10] to invest in reliable, predictable investments, and those aren’t sexy [00:17:15] and no one likes to do ’em. You’re like, I don’t wanna invest in the reliable, predictable, the [00:17:20] real estate and the stocks and the private equity and the venture capital, and [00:17:25] maybe not too much venture capital, right?

[00:17:27] I wanna invest in Bitcoin and my friend’s startup company. [00:17:30] So that’s a recipe for disaster. So when you start making money, you have to have, first of all, a [00:17:35] game plan or a strategy. ’cause too many entrepreneurs are living by tactics. Mm-hmm. So in the [00:17:40] art of war, there’s a, there’s a quote I love it’s tactics without strategy is the noise before defeat.[00:17:45]

[00:17:45] Mm-hmm. So before you start investing, you should have your overall investment strategy. That means how much [00:17:50] of my money is gonna go into real estate? How much is gonna go into stocks? How much is gonna go into private equity [00:17:55] or private debt? How much is going to going to go into crypto and then stick with my plan.

[00:17:59] And within real [00:18:00] estate, I don’t want it all in multifamily. Look what happened the last couple years. So I’m gonna wanna spread it [00:18:05] around in different parts of real estate, because you get rich by being concentrated in a business, [00:18:10] but you stay rich by being diversified outside of that business. Mm-hmm. So you need a strategy [00:18:15] that you can stick to, otherwise you’re gonna run around like you’re in Vegas.

[00:18:18] Throwing money at cool [00:18:20] sounding stuff and 10 years later you’re gonna say to me, like a, a lot of entrepreneurs say to Mimi and I, [00:18:25] I made so much money in the last 10 years. Where did it all go? Mm. And that [00:18:30] happens unfortunately too often. I.

[00:18:32] Mimi: Yeah. And AJ for us being in the industry [00:18:35] 26 years with our business, we made mistakes as well before having our team, [00:18:40] having our own fractional family office.

[00:18:42] And, uh, same thing without having a strategy [00:18:45] and specific investment allocation. So we, we ourselves have, [00:18:50] it’s, it’s, it’s easy to fall, so you need the right team and, and the right strategy in place [00:18:55] that’s best for you.

[00:18:56] Jim: Yeah. And just to, to build off of that. I, I urged [00:19:00] Mimi to, to make this investment that we made in 2005.

[00:19:02] Now, if you do the math, that was 20 years ago [00:19:05] and it was a million dollars, and I was 100% sure. Remember, I was a very smart investor at the [00:19:10] time. I thought I knew more than I knew, which is an overconfidence problem entrepreneurs have. So I’m like, [00:19:15] this is a. A hundred percent. This is gonna make it, we’re gonna make millions off of this deal.[00:19:20]

[00:19:20] And I could tell you why I thought that. And there’s a lot of good reasons why I thought that. But guess what? It didn’t turn out [00:19:25] and we lost a million dollars. Now, a million dollars is a lot of money today. Even in our [00:19:30] situation, a million dollars matters today. But 20 years ago, it was a huge impact on us in [00:19:35] our lives.

[00:19:35] But the way I think about it, ’cause I was, I felt shame. I was embarrassed for a lot of years. [00:19:40] I never told people this, but what I learned from that mistake, I like to say. [00:19:45] I paid a million dollar tuition to get an education. Most people never get. [00:19:50] And then I see entrepreneurs reliving this, right? So we’ve never made that mistake again.

[00:19:54] [00:19:55] We’ve built a serious portfolio that’s strong and is [00:20:00] predictable because I realized I can’t invest the way I invested my business. I’ve gotta invest to [00:20:05] stay rich, not to get rich.

[00:20:07] AJ: I heard a great quote not too long ago is that [00:20:10] it’s only a failure if you didn’t learn the lesson.

[00:20:13] Yes. Right. So [00:20:15]

[00:20:15] AJ: good. Only a failure if you didn’t learn the lesson.

[00:20:17] Yes. And sometimes those are really hard, [00:20:20] expensive lessons, but as long as we learn, you know, is worth it, you know? And, [00:20:25] and one of the things that you said I think is really important since you know so many of the people who are listening. [00:20:30] You know, also in the midst of building their personal brand, AKA, their [00:20:35] business, and they’re on this entrepreneurial journey in some capacity, and [00:20:40] we at brand builders groups unknowingly to most, we do the [00:20:45] unsexy work of strategy.

[00:20:47] Right. And often what people think they’re [00:20:50] coming to for us is pretty websites and social media posts and all. And [00:20:55] it’s not a personal brand, nor is it business. Right? And we do the unsexy, [00:21:00] but foundational work of strategy. And what I have found, and I’m sure you’ve experienced [00:21:05] the same, is that that’s what most of us human beings want to [00:21:10] skip through.

[00:21:11] It’s like, well, that’s not where the money comes in. And that’s [00:21:15] not where the interest is earned. And for us, that’s not where everything is pretty and [00:21:20] shiny and in the public it’s, it’s the hard conversations and the planning [00:21:25] and the forecasting and all the things that, it’s like, when is it just gonna be done [00:21:30] work?

[00:21:31] Right. And that’s what I hear you guys saying. It’s like you gotta have a great team, but then you have to have a [00:21:35] great plan. In other words, a strategy before you just go spending your money. [00:21:40]

[00:21:40] Jim: Right. It’s so true. Yeah. And you know, you gotta think about what you’re trying to [00:21:45] achieve. And I always say, automate your saving.[00:21:50]

[00:21:50] And even if it’s 50 bucks a month, automate your saving. And it, I used to say this for years, [00:21:55] and then I found out Warren Buffet had said it a few times, so for whatever reason he gets credit. I don’t get credit. [00:22:00] But the quote is, don’t spend and save. What’s [00:22:05] Le left over? Save and spend what’s left over.

[00:22:08] And so one thing Mimi and I have done [00:22:10] for years is every December we sit down and we say, how much more are we gonna save and invest this next year than we did [00:22:15] last year? And then we. Put the saving in first. So the save saving happens [00:22:20] automatically. Even if we’re buying a piece of real estate, the money goes out of our checking account into another account [00:22:25] with a one-way door can’t come in ’cause we’re building up to buy that piece of real estate or whatever it might be.

[00:22:29] ’cause I need to move it somewhere where I can’t see it. ’cause if it’s sitting in my checking account and I’m pretty disciplined, [00:22:35] Mimi can tell you. But guess what? I like watches and I’m gonna find a watch that I like and I’m gonna spend that [00:22:40] money on a watch. So it will happen to. To the best of you. So safer spend what’s left [00:22:45] ever over.

[00:22:45] Because if you spend first we all know this is true. Guess what? There’s nothing left over. ’cause you can always [00:22:50] find something to spend it on. And by the way, like I said at the beginning, you think certain things are gonna [00:22:55] make you happy. Mm-hmm. But they will not. The only things that using money will make you [00:23:00] happy, as I said, is experiences with people you love getting your time back and, and giving it away.[00:23:05]

[00:23:05] AJ: Yeah. I think that pretty good. So wise,

[00:23:09] Mimi: I love [00:23:10] shoes, but they don’t hold value like the watches do. I know

[00:23:14] Jim: that’s a dangerous thing. [00:23:15] My watches have gone up a lot in value, but I people say, oh, that’s a great investment. I said, no. It’s [00:23:20] not an investment. That is not an investment. Because if I start thinking that, then I’ll start buying more [00:23:25] watches.

[00:23:25] I do not think watches are an investment. I don’t care what anybody says otherwise. I’ll buy watches. [00:23:30] It’s my throwaway money, and if they go up in value, that’s great, but it’s my money that I know we [00:23:35] don’t need and we’ve already saved first. And then I can myself a, a little reward.

[00:23:39] AJ: But, you know, but [00:23:40] that’s, I mean, that, I think that’s, that’s part of the, the plan right there is knowing, hey, this is.

[00:23:44] [00:23:45] This is not an investment strategy, right? This is this budget that we have set [00:23:50] aside after everything else. It’s my fun money. It’s my throwaway money, whatever you call it. But that alone is a [00:23:55] strategy that most of us aren’t taking the time to sit down and actually plan for. So [00:24:00] here’s what I would like to do.

[00:24:00] I’d like to hear from you guys. Maybe just like each of you share one or two tips [00:24:05] are ideas of like, where would you say are some of the most [00:24:10] effective strategies for building wealth today? [00:24:15]

[00:24:15] Mimi: One of the most effective strategies. Please. Well, um, Jim just [00:24:20] gave you one is again, um, saving first. Really, really just because [00:24:25] it doesn’t matter where, what level from a startup entrepreneur to a very [00:24:30] successful entrepreneur is, again, saving first before spending and [00:24:35] just really allocating where you want.

[00:24:37] And then number two is how do you want [00:24:40] you. Your money to work for you. Um, and what I mean by that is [00:24:45] everybody, we, we coined a term that’s called Make Rich Real, and it means different things to [00:24:50] each business owner. Each entrepreneur is, is it taking care of my family? Is it [00:24:55] providing for a charity, is it starting a, a new foundation?

[00:24:58] Is it [00:25:00] experiences and trips? And so just really allocating to. The wealth that you [00:25:05] make to what is truly important, and that’s in your heart. So many of our [00:25:10] clients have, um, for example, have started, foundations have actual rescue [00:25:15] charities that were wasn’t going to survive without, without some of those [00:25:20] I was saying.

[00:25:20] So those are the two big things

[00:25:23] AJ: I love. I think that’s good. And I think the whole [00:25:25] concept of, I just wrote down safer spend second, right? It’s like [00:25:30] simple, but not often practiced.

[00:25:32] Jim: Yeah, I, I, I’m gonna go a little [00:25:35] different direction on that. Uh, the first thing, as I just think about wealth building [00:25:40] strategies, the first thing is have someone, and this could be a firm, this could be a person [00:25:45] that protects you from yourself.

[00:25:46] Hmm.

[00:25:47] Jim: Richard Feynman was one of the greatest physicists who [00:25:50] ever lived, and one of his quotes was principle number one is don’t fool yourself. [00:25:55] And you’re the easiest person to fool. So if one of the greatest physicists said he could fool himself, you can fool [00:26:00] yourself too. And I see this all the time with entrepreneurs.

[00:26:01] They think they’re so darn smart. You’re not that smart. And [00:26:05] I, by the way, I do this my, with myself, and I’ve been investing for 30 years. When I have an [00:26:10] investment and I wanna invest, I’m getting excited. I stop. And I said, Jim, you’re not that smart. [00:26:15] What? Else are you not seeing? Mm-hmm. Now why do I do that?

[00:26:18] I do that because it [00:26:20] checks me in my overconfidence, but then I also have our team. I don’t make any investment. Mimi doesn’t make [00:26:25] any investment unless we talk to our investment team. And guess what? I don’t talk to my friends who are other [00:26:30] business owners, I. Because they think like I do, and they wanna do the crazy nutty stuff and they wanna buy the [00:26:35] NNFT and they want all this stuff, which is fine.

[00:26:37] You just want to have a strategy. How much of your overall [00:26:40] investment portfolio should go into an NFT? And by the way, the answer is not 80%, right? [00:26:45] Yeah. So having a game plan for that, but having someone, and it’s not someone who thinks [00:26:50] like you. It’s someone who thinks differently than you that can put you in check and have you just [00:26:55] rethink what you’re about to do.

[00:26:57] That’s number one. Number two is if you are married. [00:27:00] Take care of your marriage because one of the most expensive mistakes you can make in building wealth [00:27:05] is to have your marriage fail. It is incredibly expensive and distracting and [00:27:10] painful, and you know, on and on and on. Mm-hmm. So take care of your most important [00:27:15] relationship.

[00:27:15] If you’re married, which is your spouse, that’s a huge wealth building [00:27:20] strategy that you need to do. And then the third thing, and this will go in a little bit of a different direction, is [00:27:25] taxes. If you’re especially a successful business owner, the tax code is written to help [00:27:30] business owners do better.

[00:27:31] And your biggest expense if you’re a successful business owner is gonna be taxes. [00:27:35] So have a well thought out tax strategy, just like you have your allocation strategy that’s [00:27:40] implemented by good people, people you trust and have that updated every single year. [00:27:45]

[00:27:45] AJ: Okay, so first of all, I love that comment of like.

[00:27:49] Protect your [00:27:50] marriage. ’cause that can be one of the most devastatingly expensive things that is, is the [00:27:55] fallout from not doing so. And I think that’s a very big deal, a very, [00:28:00] very big deal in a culture where divorce runs rampant. And it’s like, well that doesn’t [00:28:05] just affect your marriage. That affects all parts of your life, your team business, your kids, your health.

[00:28:09] [00:28:10] Like you protect that. The other things kind of tend to work out. Like we have a policy in our family where [00:28:15] it’s, you know, God first marriage, second kids third. Right. And it’s [00:28:20] like as long as we’re good with God and we’re good with each other, everything else in our life takes care of itself. [00:28:25] But our kids do not like it when mom and dad go out on date night.[00:28:30]

[00:28:30] So we have our Wednesday night date night, and every Wednesday they’re like, why don’t we get to [00:28:35] come? And like I’ve had like this ingrained conversation with, and I have my, my boys are little [00:28:40] five and eight and mm-hmm. Literally like. Mommy and daddy need time together. [00:28:45]

[00:28:45] Mimi: Yeah. Yes.

[00:28:45] AJ: Right. And like mom and dad have to have a happy marriage that we can have a [00:28:50] happy family.

[00:28:50] And it’s just been one of those fascinating, interesting things where like [00:28:55] the temptation is so quickly to be like, well, let’s just do a family thing. Mm-hmm. And then all of a sudden the marriage [00:29:00] is not existent. And so I love that you said protect your marriage because that [00:29:05] is a, that is a wealth management strategy of like Totally.

[00:29:08] You keep that healthy and [00:29:10] intact. All these other things work. And then you transitioned into something that I wanna spend a few [00:29:15] minutes on talking about taxes. As I mentioned earlier, I am equally frustrated and fascinated [00:29:20] by all things taxes, fascinated by how many, um, [00:29:25] you know, exceptions to the rule there are, and how much you have to know and [00:29:30] learn to know what those exceptions are, right?

[00:29:32] Mm-hmm. There’s a few rules and then [00:29:35] thousands exceptions to the rules that just takes a professional. Mm-hmm. And that ain’t me. [00:29:40] Right. And it’s like I cannot give enough time to learn all the things that are constantly at [00:29:45] play and then changing. Um, but then you talked about having a good tax, you know, strategy.

[00:29:49] [00:29:50] Right? And that’s just like a business strategy. And that also takes it professional [00:29:55] and it’s, I. It’s unique and different by industry and state and your [00:30:00] setup. So what I would love to hear from you guys are like, what are some of the more [00:30:05] universally applicable tax tips or strategies that entrepreneurs need [00:30:10] to know about?

[00:30:11] Jim: Yeah, I, I think I would start with. The [00:30:15] mistakes that entrepreneurs make when they’re trying to do their tax planning, as I said, tactics over strategy. [00:30:20] Yeah. So their buddy said, I, I did a um, 8 31 B micro captive. [00:30:25] Then I’ll do that for myself. Well, it might be okay for your friend. It might be a tragedy for you.

[00:30:29] It could [00:30:30] be a big mistake. Right. Or, you know, I structured my business as a C corp instead of an S corp. [00:30:35] A friend of mine did that and supposedly there’s tax savings there, right? So again, you wanna [00:30:40] make sure that you’re not just doing stuff ’cause a friend of yours told you to do these things. Mm-hmm. You need someone who [00:30:45] understands you very well, your business and what you’re trying to achieve and accomplish to [00:30:50] create a good tax plan.

[00:30:51] So that’s the first thing is. Tax strategy is about the [00:30:55] uniqueness of your situation. It’s not universal. I can’t say, here’s what’s gonna work for these 10 [00:31:00] entrepreneurs. It’s gonna be different for every one of those 10. The other thing is just like investing. There’s [00:31:05] risk tolerance when it comes to tax planning Now.

[00:31:08] First of all, let me say that [00:31:10] there’s tax strategy that are really in the, the area that I would never [00:31:15] touch, right? And so I’ll just give you an example. We’ve seen entity structures, [00:31:20] trust structures. Sometimes it involves a foundation. Sometimes it involves insurance [00:31:25] sales, and magically through all these different entities, you pay no tax.

[00:31:29] Hmm. [00:31:30]

[00:31:30] Jim: Right. And, and the old adage about if it sounds too good to be true, so these, sometimes there’ll be a law [00:31:35] firm involved, but it’s always a little law firm. It’s not a big law firm. And there’s just a, a tax court [00:31:40] case. There’s not a tax court case. But the IRS is going after a business owner in [00:31:45] Colorado, it’s a dentist.

[00:31:46] And the dentist did one of these fancy things with trust and [00:31:50] entities to pay no taxes. And the IRS isn’t just going for interest [00:31:55] and penalties and taxes owed. The IRS is charging the dentist criminally and [00:32:00] trying to put the dentist in jail, and the dentists sign that tax return just like you and I sign [00:32:05] our tax returns.

[00:32:06] So be really careful about taking these ideas without [00:32:10] understanding the risk. That being said, even within the IRS code, we call ’em Bright Line Tracks [00:32:15] transactions. They’re in the code. There’s certain things the IRS. Doesn’t like and tries to [00:32:20] audit and tries to go after. And then there’s other things that the IRS doesn’t go after as often, right?

[00:32:24] [00:32:25] So you have a different risk level based on the entrepreneur. So one entrepreneur or one you could [00:32:30] think for any of you on the call. Sometimes we need entrepreneurs that go, I don’t care, as long as it’s [00:32:35] legal, I don’t care. I’ll take the risk. I wanna pay as little in taxes as legally [00:32:40] possible. If I get audited and lose, I understand the risk.

[00:32:42] I am fine with it. Right? Other entrepreneurs [00:32:45] will tell me. I don’t want to take any risk. I don’t wanna worry about audits. I don’t wanna worry about having to pay [00:32:50] back taxes and penalties and interest, right? Those are different tax plans for those two entrepreneurs. [00:32:55] Then where do they get the advice?

[00:32:57] Right? And so here’s a huge mistake entrepreneurs make. On the one [00:33:00] hand, they’re the accountants, and in general, accountants are historians. They take all your [00:33:05] information, they file the forms. Sometimes they get it right about telling you what you need to pay in your [00:33:10] estimated taxes. But the problem is they’re not forward looking.

[00:33:12] They’re not proactive. They’re not digging into your [00:33:15] situation and saying, Hey, aj, your situation, you need to do A, B, or C. Here are different ways to do it. Here [00:33:20] are your options. Let’s decide what we should do this year, next year, and the year after. They’re [00:33:25] usually looking in the rear view mirror, so that’s a problem.

[00:33:28] And often CPAs are not up on the [00:33:30] latest tax planning because they’re so embroiled in filing tax returns.

[00:33:33] Yeah.

[00:33:34] Jim: Then let’s take the [00:33:35] other extreme. They hire someone called a tax strategist or someone who says that they can help them with [00:33:40] tax. Often these people are paid through selling products. Mm-hmm.

[00:33:43] Sometimes they’re paid a success fee. [00:33:45] I would recommend don’t ever pay a success fee on tax planning where you say, whatever I save you, [00:33:50] you just pay me 10%. That’s a huge problem. Why? Because you are creating this [00:33:55] environment where that person’s gonna wanna save you as much in taxes as possible, even if [00:34:00] there’s too much risk, even if you might get audited, and you might get into trouble because they [00:34:05] get paid on how much they save you not making a smart decision.

[00:34:08] So you wanna pay someone, [00:34:10] you know, a fixed amount. Like, here’s what I’m gonna pay you no matter what. You save me in taxes. You wanna have [00:34:15] someone who has experience, who proactively looks forward, who does this all the time, but not someone [00:34:20] who gets paid in any way other than directly from you. So you don’t want them to get paid.

[00:34:24] If they bring an r and [00:34:25] d tax credit expert in and they get spiffed on the side, you don’t want them to get paid. If they sell you insurance, [00:34:30] you don’t want them to get paid a referral fee for someone. They introduce you to. You need them [00:34:35] only to represent you to understand your tax situation, your risk tolerance and taxes, and [00:34:40] then build a tax plan for you.

[00:34:41] Unfortunately, there aren’t a lot of options in the marketplace ’cause either [00:34:45] people are selling products, getting spiffed on the side or charging success fees, or you’ve got the [00:34:50] accountants that are kind of stuck in the mud, not thinking, but what you need is a firm that. Can help [00:34:55] you build a tax plan in a way where you understand how you’re paying that makes sense, and who can [00:35:00] really build one that fits your risk tolerance and then work with your accountant to make sure it’s [00:35:05] implemented and documented.

[00:35:05] So if you do get audited that you have the proof that you did it right. I. [00:35:10]

[00:35:10] AJ: Yeah. You know, the thing about this conversation, I think that’s really wise and it’s like there’s only [00:35:15] uniqueness, nothing universal. And I think that’s a really wise statement. Um, and then also referencing [00:35:20] the risk tolerance for everyone who’s listening.

[00:35:21] And it’s like, because that is, that’s the truth. Like our entities are [00:35:25] set up differently and our risk tolerance is different. The states are different. I think [00:35:30] where I see so many people challenge, it’s like. Where do you find these people? [00:35:35] Right. And it’s like that kind of back to so many people are defaulting to this one size fits [00:35:40] all.

[00:35:40] It’s like, oh yeah, I have, you know, my accountant, right, who’s a CPA, [00:35:45] they do my taxes. And it’s like, but yeah, like you said, they’re a historian, right? They’re not looking ahead, they’re only [00:35:50] doing what’s backwards. And we learned this the hard way when I realized our previous [00:35:55] tax firm, um, there, and, and this was like, this was an aha moment for me as an entrepreneur, is [00:36:00] that.

[00:36:00] For the relationship that we had, I had to come to realize like [00:36:05] their job was not to go and find out what applied to me that was my [00:36:10] job and that I would take it to them to vet. And it was like a very aha moment. Mm-hmm. That was, uh, [00:36:15] very eye-opening and frustrating. I was like, I thought this was your job, right?

[00:36:19] And [00:36:20] it was like, no, that was my job. And then theirs was just to vet it and go, was it applicable? [00:36:25] And. What hit me is that if I had not been proactive in that none of the things [00:36:30] that we learned that actually applied to us to have us in the right entity structure for our [00:36:35] state and our industry, none of that would’ve actually gotten done.[00:36:40]

[00:36:40] And that’s a scary thought for most entrepreneurs who are trusting all of that to just be done [00:36:45] by who they hired.

[00:36:46] Mm-hmm.

[00:36:47] AJ: So where do people go? [00:36:50] Where do you find these people?[00:36:55]

[00:36:57] That’s a hard, it’s,

[00:36:58] Jim: it’s tough. It’s [00:37:00] tough, you know? And I think, I know

[00:37:00] AJ: it’s tough.

[00:37:01] Jim: I mean that, and that’s why we created this model of the fractional family [00:37:05] office is because we saw that same problem in our own lives, uh, many years ago. Learned [00:37:10] how a billionaire family created this for what reason? And then we said, I wonder if we could do it [00:37:15] for ourselves.

[00:37:15] Mm-hmm. Because really what you’re talking about is having someone in the middle of your wheel. [00:37:20] Who’s managing the tac, the accountant, and the tax planning. Who’s managing the asset [00:37:25] protection? Who’s helping you with your strategy on the investing and putting it all together? And [00:37:30] ultimately, that’s the solution that we believe in most, and that’s what every billionaire does.

[00:37:34] The [00:37:35] problem is if you do it the way the billionaire does it, the very smallest family office cost $2 million a year [00:37:40] to run. And Elon Musk and Bezos, they’re spending over $30 million each. On their [00:37:45] family offices. And so that’s why we created this model. So if you are not [00:37:50] working with someone who can build that for you, then you have to be what we call the air traffic controller.

[00:37:54] You have [00:37:55] to get in there even though you don’t want to, and start holding people accountable. And so with your [00:38:00] accountant, I would suggest with everybody, if you’re not sure, if you’re accountant’s doing a good job or you’ve outgrown your accountant, [00:38:05] I would go schedule a meeting, pay ’em their hourly fee and say, show me what we’ve done the last few [00:38:10] years.

[00:38:11] To legally save on taxes. And in my book I actually talk about this ’cause [00:38:15] we went to our CPA, he had been our CPA since I was a school teacher teaching high school math and [00:38:20] physics, uh, to when we own this business and we’re making a lot of money. And I said that same [00:38:25] question, what have you done for us the last few years?

[00:38:26] And he said, well, remember I said that you can always be buy a [00:38:30] bigger house ’cause you get the interest deduction. You always wanna make sure you’re maxing your 401k [00:38:35] and you could give more money to charity to save money in taxes. And that’s [00:38:40] when I realized, I went back to Mimi and we’re like, this guy’s talking about elementary school.

[00:38:44] We need someone [00:38:45] who’s in graduate school. So I told us we had the wrong accountant. Right. And accountants aren’t [00:38:50]

[00:38:50] AJ: Yeah. For that sake. Yeah. Yeah.

[00:38:51] Jim: So you have to be the air traffic controller and they have to be careful [00:38:55] that if you’re gonna entrust yourself to attack strategist, you gotta make sure you understand how they’re getting [00:39:00] paid.

[00:39:00] Where their compensation is and, and are they in a position where they’re motivated to [00:39:05] have you take risks that may not be appropriate for how you feel?

[00:39:08] AJ: And I think that’s the key takeaway I wanted [00:39:10] everyone to hear. It’s like at some point, and you need to evaluate who you’re working with and decide.

[00:39:14] [00:39:15] Mm-hmm. Is this still the right person for the season that I’m in? Right. And it’s like, at some point, [00:39:20] we said this earlier, you may outgrow the team. Uh, and in this case it’s like, hey, there’s, there’s a graduation [00:39:25] that happens where it’s like, this was great. For this one phase, I’m now three [00:39:30] phases ahead. I need, I need a different team, a different thought structure, a different [00:39:35] strategy for where I’m heading.

[00:39:37] And I think that’s really good. Everyone who’s listening, if [00:39:40] you guys want to head over, I’m gonna have, uh, Mimi and Jim tell you about [00:39:45] something that they’re offering to this. Uh, call. We’re gonna talk about this waste wait, wait, [00:39:50] wealth waste calculator. And you guys can go and get this. If you go to do wealth, [00:39:55] DEW, do wealth.com/influe influential, and you [00:40:00] can grab the wealth waste calculators.

[00:40:02] Uh, Mimi, tell us what that is. [00:40:05]

[00:40:05] Mimi: Yeah, it’s a tool that we developed and it’s a way, so there’ll be several [00:40:10] questions and numbers. It, it’s, it’s a fun tool. It’s an actual calculator that you can put in [00:40:15] your number so it, it’ll ask you specific questions and in the [00:40:20] end it’ll give you a number of how much money you are [00:40:25] wasting.

[00:40:25] So that’s why we call it the Wealth Waste Calculator. So it, so it’s something [00:40:30] fun to plug in.

[00:40:30] Jim: And by the way, our team has spent hundreds of hours creating things on this. Yes. Pretty amazing. [00:40:35] This is not like something that someone did in 10 minutes and one more thing. You know, your listeners might say, well, [00:40:40] when would I be ready for a fractional family office to solve all these problems for me?

[00:40:43] Right. And really the [00:40:45] starting point is once you, if you have a business, ’cause this is for business owners, once you’re doing a million [00:40:50] dollars of gross revenue and netting at least 250,000, believe it or not, at that level, [00:40:55] you can start getting help. A fractional family office, and of course this goes all the way up [00:41:00] to where you could be making, you know, tens of millions, hundreds of millions of dollars, and it could still make sense for [00:41:05] you.[00:41:10]

[00:41:14] Did we lose [00:41:15] aj?

[00:41:15] Mimi: I know. Where’s aj?[00:41:20]

[00:41:23] Jim: We lost aj.[00:41:25] [00:41:30] [00:41:35]

[00:41:38] AJ: That was fun. [00:41:40] My, uh, Chrome decided to restart, so I’m going to have you start [00:41:45] over, Jim, when you said, some of you’re probably wondering when is the right time, so if you’ll [00:41:50] start over right there. Okay.

[00:41:53] Jim: Some of you may be wondering [00:41:55] when is the right time where you can actually afford to have a fractional family office?

[00:41:59] And believe it or [00:42:00] not, the starting point is when you’re a business owner and you’re doing a million dollars of gross [00:42:05] revenue netting at least 250,000. At that point, you can actually get the [00:42:10] essentials of a fractional family office. And of course, from there up to, you know, if you’re doing a [00:42:15] hundred, $200 million of revenue in your business, a fractional family office still could be a really, really [00:42:20] smart thing to do.

[00:42:20] So that’s where it would start.

[00:42:22] AJ: That’s good. And I think that’s good because that’s a lot lower than [00:42:25] probably most of us were thinking. I think most of people think, oh wow, like Family [00:42:30] wealth office, I probably need to be making $10 million. And it’s like. And, and that’s why I love the [00:42:35] fractional concept of this.

[00:42:36] It’s like this is something that you can start way ahead of probably [00:42:40] when you thought so. Okay. I know that we only have a couple minutes left. I’m watching the clock. I promise I’ll only [00:42:45] keep you for the hour that we promised. But I have, um, a quick question for both of you [00:42:50] and then we’ll wrap this up.

[00:42:51] But if you guys haven’t already, go to do [00:42:55] wealth.com/. Influential and actually use this wealth waste [00:43:00] calculator. I think it’s gonna be super valuable for everyone who’s listening. Alright. Here’s my question, [00:43:05] uh, for you, Jim, looking ahead the next five years, right. [00:43:10] And as we’re recording this, we’re in spring of 2025.

[00:43:13] Right. So looking ahead between now and [00:43:15] call it 2030, what are some of the trends that you [00:43:20] foresee becoming more mainstream or, or more prominent when it comes to wealth management [00:43:25] practices?

[00:43:26] Jim: Great question and I’m gonna answer that and then I’m gonna ask [00:43:30] myself a different question. And that is, as far as trends, obviously AI is gonna have a big [00:43:35] impact on things like wealth planning.

[00:43:36] It’s gonna have a big impact on everything. But there are certain things that are not gonna [00:43:40] change. And there was a, an interview with Jeff Bezos and the question was, what’s gonna change [00:43:45] in the next 10 years? And he said, I get asked that a lot. The question I don’t get asked, I should get asked [00:43:50] more is what’s not going to change in the next 10 years?

[00:43:52] ’cause it’s very hard to predict what’s gonna change. [00:43:55] It’s easier to predict what’s not gonna change and build a company around what’s not gonna change. So here’s what’s [00:44:00] not gonna change in the next five years, which is the most important question. Over time, real estate’s [00:44:05] gonna go up in value. Stocks will go up in value.

[00:44:07] Private equity will go up in value. [00:44:10] All certain things reliably and predictably will go up in in value. Over time. They’re gonna have their times when [00:44:15] they don’t go up in value. You want to be investing and reliable, predictable things in a solid [00:44:20] portfolio with a strategy over time. And then forget the noise.

[00:44:23] I hear entrepreneurs, they’re always trying to [00:44:25] guess what’s gonna happen next. Forget about it. You’re not gonna be able to guess what’s gonna happen next. And if [00:44:30] someone does, guess what? They’re totally lucky. Mm-hmm. So stop watching the news. Save first, [00:44:35] spend what’s left, get yourself on a good game plan, and then also get a good tax plan.[00:44:40]

[00:44:40] And then of course, the things like, like protect, but worry about what’s not gonna change [00:44:45] and what’s not gonna change in the next five years is all those things I just mentioned.

[00:44:48] AJ: Yeah, I love [00:44:50] that. I don’t know, um, if you guys have ever read the book by Morgan [00:44:55] Hasell, psychology of Money.

[00:44:56] Jim: Love that book.

[00:44:57] AJ: Uh, it’s one of my favorite books on money because [00:45:00] it talks about just that, right?

[00:45:02] Mm-hmm. It is like long-term in mind, [00:45:05] conservative nature. Focus on the things that are likely not going to change and [00:45:10] ignore the rest is that it’s boring, it’s conservative, it’s not [00:45:15] sexy, but it works.

[00:45:18] Jim: Yep. And, and you’re gonna get rich by [00:45:20] building a business. You’re not gonna get rich by picking crypto at the right moment or, [00:45:25] or buying the penny stock or buying that one real estate property that nobody knows is [00:45:30] worth a bunch of money.

[00:45:31] That’s not how you’re gonna rich. That’s how you’re gonna stay rich. You’re gonna get rich by being [00:45:35] concentrated in a business. ’cause that’s how Americans get rich.

[00:45:37] AJ: I love that. Um, alright, last question. [00:45:40] Um, uh, Mimi, and you know, Jim, you can feel free to chime in, but I’m gonna ask Mimi this question. [00:45:45] It’s like.

[00:45:45] In a world where a lot of people have influence, some of [00:45:50] it earned, some of it not. And in a lot of, uh, you know, my world at least, we talk a [00:45:55] lot about influencers versus influential, and you guys work with a lot of influential [00:46:00] people. So I’d love to hear, like, for you, like what does influential mean in [00:46:05] your world, in your workspace?

[00:46:08] Mimi: Influential and I, I, [00:46:10] uh, mentioned this a little bit earlier is we are. [00:46:15] Our entrepreneurs, what we do is we unlock resources for them so [00:46:20] that they foster so many different connections to make this world [00:46:25] a better place. And we’ve seen children’s charities grow. We’ve [00:46:30] seen foundations thrive. We’ve seen families [00:46:35] leave a legacy.

[00:46:36] Of, um, not just wealth from generation to [00:46:40] generation in gen, but how they’re teaching their kids to think about [00:46:45] money, how they. Money is saving lives. [00:46:50] Something that that’s really near and dear to our hearts. Jim and I never ended up having children. We’ve [00:46:55] been married 32 years and we’ve been working together as a spouse and, and really being intentional about our [00:47:00] relationship.

[00:47:00] But we just said what’s really important to us kids. Kids [00:47:05] rescuing them out of poverty. So we’ve started scholarships because we believe [00:47:10] one of the best ways of getting out of generational poverty is through [00:47:15] education. And so we’ve created. Some scholarships. We’re gonna continue creating more [00:47:20] scholarship, uh, throughout the year.

[00:47:21] So when I hear [00:47:25] influencers influential, it’s for us. The influencers are the ones who have been [00:47:30] influential to this society by giving back, making a [00:47:35] difference, and being role models for others to look up to in [00:47:40] how they’re truly creating wealth. By the use of the money that that [00:47:45] they have acquired.

[00:47:46] AJ: I love that.

[00:47:47] I think that’s so awesome. And I [00:47:50] think a lot of people talk about, you know, you know, and it’s interesting, I think [00:47:55] money is a tool, right? Right. And you can wield it for good [00:48:00] just as much as you can, wield it for evil. And it’s like what I hear you saying is like there is a [00:48:05] major opportunity PE for people who have been fortunate enough to build a lot of wealth to create [00:48:10] influence.

[00:48:11] And have influential opportunities that can change the trajectories [00:48:15] of lives, families, generations, if it’s used in the right ways. [00:48:20] I love that.

[00:48:20] Jim: Absolutely. I, I agree with Mimi and [00:48:25] you know, I, I think every, he agrees with me. I always agree with Mimi. That’s the smart thing. You have to [00:48:30] think where you are and what are your capabilities because influence, a lot of times we think [00:48:35] of like the rich and famous who have influence, but everybody has influence and everyone creates a [00:48:40] ripple effect.

[00:48:40] And even the way you and Rory are doing your date nights, right? One of the greatest gifts you can [00:48:45] give to your kids is how you model a marriage. And even though they give you a hard time about like, oh, we [00:48:50] want to go with you. In the future, they’re gonna go, wow. I saw how mom and dad [00:48:55] handled their marriage, and that gives me a modeling of how, like Mimi and I didn’t have the best [00:49:00] parenting as far as marriages and how they were modeled, but we’ve worked very hard to create a [00:49:05] model of our marriage.

[00:49:06] So it doesn’t have to be that you give a million dollars to charity, although that’s [00:49:10] fantastic if you can do that. It can also be other ways you influence people every day [00:49:15] in a way that is caring and kind and makes a difference because. The one [00:49:20] person you touch could touch thousands or millions of lives.

[00:49:23] You don’t know what you don’t know, what your kids [00:49:25] at their age, what they’re gonna grow up to become, and just what you’re doing right now with those [00:49:30] kids could have ripple effects that blow your mind in 20 or 30 years. So that’s what I would say with [00:49:35] influence. It’s easy for people to look on TikTok or watch TV and go Now, that’s the influential person.[00:49:40]

[00:49:40] But it’s the person who’s kind and who can touch others and who can make a difference and [00:49:45] lead people, and guide people and teach people. Those are the ones that have true influence that will matter [00:49:50] when the, you know, in the test of time, you know, in, in the future.

[00:49:53] AJ: I. Amen. Well, I couldn’t [00:49:55] agree more, and I, I agree with both of you, and I think the conversation of what it means to build [00:50:00] wealth, keep wealth, but then also deploy wealth for the good of others is [00:50:05] such an important conversation for the growing and scaling entrepreneur to to know [00:50:10] what to do with the money that they’re building so that it does create that lasting legacy and [00:50:15] creates influence beyond them.

[00:50:16] So both of you, thank you so much for joining us. On this [00:50:20] episode for everyone who is listening, again, go to do [00:50:25] wealth.com/influential. Check out that wealth waste calculator. Stick around, listen to the [00:50:30] recap episode. That will be coming up next, and we will see you guys next time on the influential personal [00:50:35] [00:50:40] brand.