Helping Small Business Owners Navigate Their Biggest Problems | Ep 254
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find people that you feel like i would choose this person to go to war with and if you can find those people then it makes it really hard to fail i want to know your mindset how do i cultivate a sense of ownership within my team what would be your suggestions to replacing me this kind of situation only gets worse with time not better you can change this part of what i wish i had said that i didn't say i'm excited holy shit you're the first person in my life to ever make me nervous oh my god hi i'm the leader wait really no

No, because we've messaged on Instagram for years and you're the reason that I'm here. So I'm Leo Skeppy and I have done $2 million a year for the past couple of years. Thanks to you. I do social media. Well, I wanted to point out and say thank you for all of the battles you have to fight in private. And I want to know from you, what are your top tips for the battles you have to fight in private? Because you're very emotionally independent.

And I admire you. Okay. Well, can you tell me how this relates to you also so I can have a little context? I fired a lot of people. Didn't work. I'm in like a phase. I'm going to have to rehire and like hire people I haven't had before.

So I'm at a point now where I've maxed as high as I can go with my threshold as a human being. I don't even have an editor. I do every fucking thing. Cocaine don't even help no more. Like when I say I'm at my limit, I've tried, babe. So I have to get some of this shit let off of myself so I can go higher. So that's kind of where I'm at now. But in this period of trying to onboard and hire, it's about to get really rough. I want to know your mindset around that.

the resilience aspect. Yeah. Well, I would say one thing, which is like, is it really going to be that rough? Because like one thing I never let myself do is like, take it too seriously. Cause I'm like, you saving babies, you know? And like, for real though, like, I'm like, if somebody is like at my desk and they're like, Layla, I'm so overwhelmed because I can't. And if I don't fix this with the portfolio company that they're going to, I'm like, Oh wait. And then they will make less money. And so we, Oh my God, like the world will end. Like we make rich people make less money. Like I'm sure everyone's going to be so sad. You know what I mean? Like,

Like, and same for you. Oh my God, I'm going to make 1.5 million instead of 2 million a year. Like, you know what I mean? Like, so I think the first thing is like, I really don't take it too seriously. Like I fuck up all the time. I look like an idiot all the time. I sound like a fucking idiot right now. I'm stage with Kleenex. You know, my nose is running. I'm like, I don't give a shit, you know? And so like, I think one, just don't take it too seriously because it's like, if I zoom all the way out, I'm like, okay,

So I'm upset because this person on my team told this person on my team that they don't like them. And then they went to this person and now there's drama and gossip. And I'm like, it's the end of the fucking world. Right. And I feel like that some days and I have to zoom out and be like, wow, I'm upset because adults, grown adults on my team are gossiping. Like I'm a speck of dust on this universe. And this is what I'm worried about right now. And so I think the first thing is like,

Just contextualizing it. I try really hard not to worry about the things that aren't going to kill me and aren't going to harm people that I love or people I'm trying to help. You know what I mean? Because that's all just noise and it's all going to go away. It's not going to matter in a year. So I think that's the first piece.

I think the second piece with is understanding how to define resiliency, which is like how quickly you can return to baseline. So resiliency is essentially like your, that was good. Okay. So, um, like this is your emotional state and then an, an event occurs and then your emotional state goes here or goes here. And resiliency is just how quickly can you go back here to where you were prior? I just focus on the speed.

I don't focus on not having a reaction. Like someone can come in my office, they can tell me some really bad news and I can be like, mother fucker. And it's like in two seconds in my brain is like, mother fucker. And then I'm like, yeah, okay, we're going to fix it. Ain't no thing. Right. Within like 60 seconds, I'm like into mode. And so for me, it's like,

You know, I look at the very beginning of my business career. If something bad had happened, it might have taken me three weeks to regulate myself emotionally. You know, I'm up thinking about it. I'm ruminating on it. I'm stressed about it. Now it's like it takes me a few minutes or even seconds to regulate myself. And so I've measured my progress for resiliency just by what's the speed that I can get back to baseline. What's your mindset for that couple seconds now? Like, how do you get back to baseline?

Yeah. Okay. Well, I have two routes I go, which is first option is I say one of two things will happen. Either I die, in which case I don't have to worry about this anymore. And then the other side, I just suffer emotionally, but I don't die. So I don't know if that's helpful, but it sounds dark, but it's what I think. Yeah.

It actually is because I'm like, well, I can suffer emotionally. Like I've done that before. Like I've definitely suffered emotionally. What? Some more emotional suffering? Bring it on. Right? Like, or I'm like die. Well, then I wouldn't have to suffer emotionally. Maybe that'll be nice. I don't know. You know, but like, I mean, that's really where I go with it. Cause it's like what most people like the resiliency. It's like, it's all of this is just the root of experiential avoidance.

Which is like not wanting to experience our emotions, not wanting to feel a certain way. Why do people – most of the time I see people in their business, it's like they're ultimately trying to avoid something and that's what's stopping them from growing their business. Avoid a possibility of something happening. Avoid a possibility of someone judging them, a possibility of a catastrophe. And so if you can get past that, I think that that helps you become a lot more resilient. Okay.

Thank you. Part of what I wish I had said that I didn't say, in any company, you can't, like, think about your employees, think about the people that work for you. You can't vent down.

Right. That's inappropriate. Like a boss venting down. Inappropriate. Well, then if you're the one at the top of the company, where do you vent to? You know, for me personally, when I talk about my support system, I think of my executive assistant team. They're the only people that I will disclose my like really how I'm feeling to or like I'll allow myself to have more of like an emotional reaction with because they're

they're there for me, not for a function in the team, a function of the company. And so I think that getting those key hires, like getting personal support for yourself in what I call like your nucleus, like the people who report to you and who are like your barrier in the company, you need to hire people that you'd be like, I would go to war with this fucker because it feels like that a lot of the days. And if you feel like somebody doesn't have your back, they're not loyal, they don't have integrity, they don't uphold the same values.

It's going to get really tough because you're going to feel like you have nobody to go to, nobody to talk to, and nobody sees reality or sees the problems the same way you do. My name is Carson. I run a talent management business. We're kind of like a marketplace. So we sell to both creators who we represent as well as brands who the creators do marketing for. We did 600 grand roughly in revenue last year, and I would like to be at 5 mil.

I think that'd be pretty nice. And I would say what's constraining me is primarily key man and data. And I would say my key questions around this, there's really two parts to it. The first one is within a team, how do I manage the balance between grace and accountability? And my second one is how do I cultivate a sense of ownership within my team? Yeah, those are good questions. Tell me who you're struggling with on your team. So, I mean, it's always one person.

One team member who's a partner. He runs the messaging department in the business that we run. So he's a partner. Yeah, he is a partner. Does that mean he has equity in the business? Yes. Okay. So he's the person you're struggling with. Primarily. Yeah. Yeah. For that question, yes. And you're trying to figure out how to motivate him to do more better work.

Let's say you fast forward and you're making $50 million a year, and this person has 20% of your business, and you have to motivate them, and you have to hold them accountable, and they're never living up to your standards. Are you okay with that? No. So your business is small right now. You're at a place where you can change this. And so the reason why I'm going above the question is because, in my opinion, this kind of situation only gets worse with time, not better. Sure. There's barrels and there's ammunition.

Barrels are people that you want to have equity. Barrels are people who can take something. They can create something out of nothing. They require little instruction. And all you need to do is keep giving them ammunition and they keep firing and they keep building it. Right. And so anyone that has equity in a company should be a barrel. Ammunition is like you give them ammunition so they can get more reach. Right. They can multiply themselves through the ammunition. Right.

I'm fearful that you don't have a barrel that has quite a bit of equity in your business based on what you're telling me right now. Do you think that that sounds off? This was right when I started my business. He was there from day one. He brought a ton of value then, but it's also like changes quick. Yeah, it changes quick. And I didn't necessarily know what I was doing then when I was first starting my business. So still learning.

Yeah, no, I do. Sure. This is totally fair. I've been like, it's one of our biggest businesses right now. Like I came in and they had a guy, he had like 20% of revenue. And if that business had kept that when they were doing a couple million a year, now they're doing 200 million a year. They would have been fucking like, what the hell is going on? Yeah, for sure. You know what I mean? And so I think this is my suggestion for you.

you. I would consider if he has what you're looking for to be a real barrel in your business, because I think that if anything, based on your demeanor and what you're expressing, you're probably not holding the standard high enough because could you coach him? Yes. Could you hold him accountable? Yes. Should you have to do that for somebody that has that kind of equity in the business? No. Sure. My advice would be clean it up now. I would say what you could probably do is scope down his role.

There's probably a different role that exists in the business that you could offer him. Sure. And that role comes with a different compensation plan. And if you don't do it now, it's going to have, you have to do it later and have to pay the tax on it. Okay.

So I would suggest doing it sooner. If you're going to give somebody equity in your company, that person, when you say partner, that means equal in a way, which means that you don't need to motivate them, hold them accountable, manage them as you would somebody that comes into work for you that it's not getting equity. You know, I would never bring somebody into one of my businesses that wasn't intrinsically motivated and couldn't manage themselves or hold themselves accountable and give them equity in my company. This is something I've done like

I think almost every portfolio company that we have, I've had to go in and fix compensation because people have given away too much equity in the beginning. And then those people are no longer worth it. I like to call it like a tour of duty. They've done their tour of duty in the business and they no longer are that valuable to the business anymore. And your business is worth more and you need that equity to give to people who are valuable at that point in time. Can I double click on one more thing? You can double click.

Thank you. The other side of this was like the accountability piece. I think beyond just my relationship with him, I don't think I have a good framework or understanding of the best way to hold people accountable. Yeah.

What are your thoughts? Yeah. So if you really think about accountability, this is for everybody in here. Accountability is really you set an expectation, you tie a measurement to that expectation or a metric, and then you give someone feedback about their ability to hit or not hit that expectation. So I'll give you an example of one, right? So you have an easy one is for sales. So you have a sales quota, right? And so it's like, okay, I'm going to need for you to maintain a role here. You have to close 20 deals a month.

Right. That's what the business operates on. Right. Anything below that would be negative net margin. So you say 20 deals a month. Great. Okay. So how do we measure that? Okay. Well, we're going to have reporting in our CRM and you're going to have to log your sales every day. And then those two combined create a reporting structure. Then how do you create feedback for that structure? Well,

I'm going to tie my CRM to Slack. It's going to ding in Slack every day whenever you get a sale. And then we're going to have a leaderboard. And that leaderboard is going to be put up in the beginning of the day and the end of the day to remind people where they're sitting. So you can have systems that provide accountability, which I prefer. And then you also get to narrate those systems, which is like, oh, hey, I saw the leaderboard. Like, how are you feeling? I saw this little dip this week. Oh, hey, I saw the leaderboard. Like, great fucking work, dude. You crushed it this week.

Well, what happens when you don't have clear targets for people is that their attention gets diluted. So whatever we measure is where they're going to focus the most, especially if you measure in a group setting. And so for you, it's like, can you get some sort of, whether it be a tool or they are self measuring, right? Like reporting, self reporting on a daily basis, what they're doing. If you can figure out what the output is of each person or role on a daily or weekly basis, and then you just remind them of that output as much as possible.

Thank you. Absolutely. Hi, my name is Ben Foskey and I'm an executive confidence coach. We do a million dollars in revenue and I'd like to do 10. And so I'm teaching other people how to be confidence coaches now. And so what's stopping me is I'm the from lead gen through the sales. So I've replaced myself with other coaches. So I don't do that as much anymore. So that's the fulfillment's good.

And we have an assessment that we use to sell. But when I've tried to empower people to become the lead salesperson, it just has not worked. What would be your suggestions to replacing me? To me, it doesn't even feel like selling. My conversion is like 80 plus percent on those calls.

But other people do it in their like five or 10%. And I'm very confusing to me. Yeah. Yeah. That's, that's because persuasion is stronger, the more of an authority figure you are. So why, why am I up here and going to say the same thing to people that they probably ask people on my team? People see me as a stronger authority figure to a degree. And so they believe the answer coming from me more. It has nothing to do with your skill. Sorry. But like, it has more to do with your authority.

It does your skill. And that's why I think the fastest way to get good at sales is just become an authority. You don't even have to be good at sales. People just do what you say. Right.

What this means is that for your sales process, what you need to be able to do is how do you build authority with the other people that are selling for you? Which I've never done. Right. Right. And so like, just like they're going through the funnel and they're seeing you, you have a couple different options, right? So I see it as like, either you could change some of how the funnel works and maybe put in like a short VSL from you, right? Going through these steps, I'm doing this, like you edifying the process itself, right?

and giving more authority to the assessment. Or you find a way to implement authority into the sales process from the salesperson. So what's their background? Do they have credibility? How do they become a coach? How do you build authority within them? I personally, even though I think it's a little...

I like the idea of edifying people on your team. And a lot of people don't like to do that because they're like, what if they leave? I'm like, well, what if they stay inside? Think about it like this. If I call somebody and I'm like, hey, I want you to become a portfolio company. But you know what? I want you to talk to Jim. Jim actually sold his company for more money than I sold mine. He sold it for $100 million. And Jim was then the CFO of this company and then the this of this company. So,

So what I've done is I am somebody who has authority. I have transferred my authority to Jim. The second is that we have said why they should listen to him. We've used his credibility and we've edified him.

So an example of this is that, you know, for my team, we run workshops. The people that are presenting my team that works in the portfolio and works in the inner operations of the company, I've hired them all because they're very good at what they do and they have a lot of expertise. But if I don't tell people that are coming to attend that, they don't know. When I added in the credibility and authority piece by edifying everybody before they did their presentation, did their talk, did their piece of the workshop, their scores went up.

So they might have been an 80 last week, and then we add in their credibility and they're 90 the next week. And it's simply because once you tell people, hey, you should listen to this person and here's why, they're more attuned to do that. Awesome. Thank you. Absolutely. Hi, Layla. I'm Madhu. I sell skincare to 40 plus women in Sephora.

And we do about 2 million in revenue. I'd like to get it to 10 to unlock more funding and then 50 to eventually get acquired. What's stopping me is CAC. CAC is too high right now. 10% of people find out about us through sampling at Sephora. 60% of people find out about us through... We have a celebrity. Her name's Mindy Kaling. And then...

30% find out about us through broadcast. We're on The View, Good Morning America, et cetera. Yep. Our most expensive channel is actually Sephora. They take like 70% of every single item that we sell there. Oh, God. Highly robbery. Insane. Yeah. Retail, brick and mortar, not the greatest business. Yeah. Since Sephora is not super profitable, I'm moving on from that and focusing on like the celebrity and broadcast. There's another...

which I keep hearing about and everyone keeps telling me that I should start building my own audience. The challenge that I have with that is the amount of time it will take to actually pay back.

And so prioritizing me ends up being sort of the last thing because, you know, getting Mindy to do another post is going to get me more profit like tomorrow versus or getting a broadcast placement, which takes a little bit of time will get me more profit next month. Me doing organic will take like, I don't know, six months, year. I have no idea. And so that's why I have a challenge. So I'm curious to hear how you think about that. Yeah, absolutely. One question for you. Do you have a following right now?

Not really. Okay. No. Do you want to be the face of your business? Like 50-50. I mean, I would love to if it reduces CAC and I think it would. Do I want to be on camera every day? Like, no, but yeah, but it helps the business. Yes. It sounds like your goal is to sell the business. Yes. Understood. So I would think about it through a few frames. One, it has to be aligned with your personal preferences.

So if people don't like being on camera, making content, and when I say that, some people like being on camera, making content. You also have to be okay with being judged, people hating on you, people shitting on you, because you're going to get that too. And if you're not good at accepting that and it's going to be a thing and it's going to be like a whole thing, then you don't do it. The second piece is...

when it comes to the business, which is if you're sitting outside of this, like I'm sitting outside looking at your business thinking, okay, well, what business would I want to buy? Right. When you get to 50 million to acquire it, probably not the one that you're the face of, but if you have five celebrities that are endorsing it, that's much more appealing to me. Now, is it appealing that you can get somebody that's not a celebrity to endorse it? Yes. Does that need to be you? No. Um,

It is an immense time commitment to make content. When I ran gym launch and nobody knew who I was, that was much easier because I didn't have to do anything on camera. Right. And it is a large time commitment. And so I think you're in a really great position right now that you have a celebrity that is pushing so much to the brand. And I would personally be thinking, how do I get more of that? Because that's,

Could you? Yes. Do I think this is the business given what you said your goals are? Like if you were like, I want to own this business forever. I'm so fucking passionate about skincare. Then I'd be like, okay, yeah, maybe we should do that. But it sounds misaligned with the goal of starting the business in general.

So I agree with you. I think that it makes a lot of sense to go the route of finding other celebrities and even just even micro celebrities to endorse it rather than you doing it. It is going to be a learning curve because here's the thing too. The moment you make content, you're not going to be great at it at first. Like it's going to take time to get the hang of it. You got to build a whole social team because you're going to have to try agencies. You're going to realize they don't get the brand. Then you have to bring them in-house. You have to train them. Then you're going to still be sucking on camera a little bit. It's like a whole thing.

I think your business is more appealing if it were the celebrity route. There's a million ways you can make a business without making content. I think you have to play to your strengths. And I know a lot of people who have very large businesses worth billions of dollars and nobody knows who they are. And I think there's actually probably more of those than you would think. So...

So if it's not your natural strength and it's not something you have an interest in getting good at and you don't have the time or resources to wait and get good at it, then like why do it? You don't need to be the face of your business. That's not going to make every business better. Some businesses it will make worse. And I think specifically if you're looking to sell your business and you have ways to acquire customers that don't involve your face, that's probably a better way to go. So with the celebrity route, there's like pros and cons to it.

working with celebrities or influencers in general, it costs money, right? So it actually does cost like internal staff. Like there's a lot of, you know, scripting that we have to do for them. And we essentially become their social media agency. Right. And so I'm curious if you have any thoughts on how to like build a support team to support celebrities or influencers, you know, in that instance, I think what you have to do is figure out what's working well for the one that you have Mindy. Yeah. Um, and then almost build out like your endorsement toolkit.

So rather than having to rely so much on your team to be giving them all these things, it's like, what can you make now ahead of time as assets that you can provide to them so that they almost have like a knowledge base that they get to walk into? Because I think of it like templates. Yes. Because it doesn't matter how big they are. Like I can make a kit.

That is like, here's onboarding with us. Here's everything to know. Here's who to contact for what? Like, it's almost like onboarding a giant customer for enterprise. And then you have their toolkit that they can access that has all the things that they can go to any point in time. Now, do you want to have someone to facilitate that? Yes. But,

Ultimately, if you build systems because you have one already, you can build that now. If you didn't have one, you would have to get the people and then they would have to build the systems. Because you have one, you can build the system and then bring people in to help implement or support the system, which is going to be a lot lower headcount and cost. Yeah, that totally makes sense. I never thought about doing that. Thanks. Yeah, absolutely.

Hi, Lila. Hi. My name's Lori. I sell tutoring to college students who want to go to medical school. We do a half million in revenue. I'd like to be at a million this year and then scale from there. Main thing that's stopping me is I am the magical six armed woman right now in the business. How do you...

go from being the person who's doing it all to the person who's managing people who are doing it when it's not really the area that you're necessarily that great at. Yeah. Are you doing the things right now and you're looking to hire people to do the things you're not that good at? Oh, I'm looking to, I'm doing all the things. So other than the delivery, I'm, I am the show. So you are doing them and you're also looking to bring people in to do them, but

But you don't know how to do them. I mean, I guess I know how to do it because I'm doing it. Yeah.

Okay. That's, that's true. Yeah. But I also, I feel like I don't necessarily, so I've tried before and hired really shitty people. And then I've tried, I've hired okay people and managed them pretty shittily. I would say this, like when you're bringing someone to do anything, if you're doing all those things right now, the first thing you have to think about is like, you want to demonstrate, you want to document, you want to duplicate. It's like before you have somebody, when somebody comes in, no matter what you've done or haven't done,

So something's working right now. You're doing it and you feel like it's really shitty, but like you'd be surprised at like how good it is compared to some people going to come in because you just, you know what you need to do for your business and it's, you have a lot more discretionary effort that you unlock. So what I'd say is anyone they bring in, like say you're doing the accounting right now. I don't know. You're going to bring them in. You're going to say, great, you're going to watch me do it.

I want you to document how I'm doing it. And then I want to watch you do it the way I did it. And listen, I understand there's a lot of shit we could do different. We can talk about that later, but I need you to at least do what I'm fucking doing right now. That's the first thing is like, no matter the experience, no matter how much you don't know what you're doing, like you need them to at least do what you're doing and not deviate from that plan in the short term. That's the first thing. The second thing is I like the awareness of like, you're like, I'm not good at these things. Great. So, um,

If you can bring people in who are good at them, that's what we want to do. The reason for it is this. If you don't really know much about the function and you certainly don't know it well enough to teach it, then you want to bring in more experienced people than you did in the other areas.

Right. Because if I have more proficiency in an area, I have more wiggle room as to who I hire because I have the ability to train them in that area more than I do for like if I hired somebody to do like, I don't know, engineering. I'm fucked. I don't know how to guide. I don't even Python. What the fuck? And nothing, nothing, fucking nothing. And so I'm like, listen, you need to be really fucking proficient because if you're ever stuck on anything like please look the other way because I'm not helping you.

If you're going to bring people in to help you, how much support can you provide them? And if it's like, okay, I actually can't, like, I can't help you get better at your job. I can't tell you when you're doing something technically incorrect, but I can tell you if you're misaligned with our culture, if you're misaligned with our values, learning how to manage people who are not, who do something that you don't know how to do is the art of being able to sniff out bullshit.

It's like common sense. When there are no results being produced, you need to investigate that and say like, that's, you know, because at the end of the day, it's like if whether they work two hours a day or they work eight hours a day, like you want to focus on like, is the result occurring for the business that I need to have happen? Right. And then if that's not happening, that's like, okay, that's reason to investigate.

I think what you want to do ahead of time, if you don't know how to do the function, is define the result. So every job description I have, you can look on our website. I do a format where it's like role, responsibilities, results. So I want to know what are the results that they are responsible for. So if I'm hiring somebody to come in and say, it's like run accounting. It's like, okay, deliver P&L by day five of every month.

Right. Like make sure all AR and RP are taken care of by end of day, every day. And by Friday, the inboxes are cleared. But like I would just go through and say, like, what are the results I want to occur as a fact of hiring this person? And then I hold them accountable to those results with the expectation that they know that I can't help them how to get there.

I'm like, listen, this needs to happen. No fucking idea how you're going to do it. But do you know how to do this? And they're like, yeah, I know how to do that. I've been doing that for three years. You're like, great. And I can never help you train to get better. So to a degree, you have to understand everything enough to know if somebody is a low performer fraudulent. You do need to know enough to that degree. So that's just what it means to be, I think, the CEO is like your head generalist of the company, essentially. Like, you know everything.

a lot about a lot is essentially where you get to eventually. And then at first it's like you know a little about a lot, but eventually as you've been doing it for a long time, you know a lot about a lot. If you don't know how to do a function and you're trying to hire somebody who can, interview 10 people and treat the interviews like research sessions. And what you'll see after you've done 10 interviews is there will be a common thread. There will be three to five things that every person says that

And then those are the things that are most important that the person gets done that you do hire. Yeah, that makes a lot of sense. Okay, great. Thank you. Of course.