Deliberate Leaders: Become a Passive Investor in Your Business with Scott Fritz

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What if you could work a 40-hour work year?

In this interview, Scott Fritz discusses how he founded Human Capital and what he learned from growing and selling his company as well as discussing key points from his book.

About Scott Fritz

Scott is an entrepreneur, angel investor, business coach and public speaker. He’s the author of The 40 Hour Work Year. His book teaches business owners how to become passive investors in their businesses.

After the Interview

After the interview…

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This transcript was auto-generated from the original video recording using Otter Voice Meeting Notes.

While the transcript has not been human edited, we hope it will still help you to quickly find or reference useful information from the interview.

0:06 

Deliberate Leaders I am your host Allison Dunn, Executive Business Coach and Founder of the Deliberate Leaders Podcast bringing you inspiring interviews to help you on your leadership journey. Today our guest is Scott Fritz. He is an entrepreneur, an angel investor, a business coach and a public speaker. He is the author of one of my favorite books, the 40 Hour Work Year, he teaches business owners how to become passive investors in their own businesses. Scott, thank you so much for joining us here today.

0:37 

Thank you. Great to be here.

0:39 

Awesome. I like to kick off my, my podcast episodes with a quick deliberate conversation. And I love to ask, what is your number one leadership tip that you would like to leave to give our audience today?

0:56 

Yeah, that’s a great question and in my business coach So my clients, obviously we go over leadership, you know, techniques and templates and things like that. And I was reminded the groups I’m working with, which are usually entrepreneurs, but sometimes their next level managers or sea level managers, or executives, the number one role of a leader is to develop more leaders. And I, in my own experience in my own life and my own businesses, I found that when I started to really embrace that and stop being the yes guy, and the answer guy and the ego guy, like a lot of entrepreneurs are, and worked on developing other leaders and coaching other leaders. Wow. I mean, not only was my company running better, but everybody in the company was more energized and having fun, you know, hitting their goals.

1:44 

Yeah, I love that. I think one of one of the challenges that sometimes I think that people who were developing don’t always look at themselves as a leader and so the quicker we can see have them see themselves in that was key. So I want to start our interview today, actually. By having you share a little bit about your story or your own story. So in 1997, you founded human capital. And what did that company specialize in?

2:12 

So we were a professional employer organization. And it’s known as a PEO, but we out sourced for, you know, entire HR departments for companies, usually our company or client sizes, 30 to 100 employees, but we had some fortune 500 person companies, we became the outsourced HR department. So we did all the payroll, HR handbooks, all the administrative junk of business, I like to say, from a standpoint of staying in compliance with the never ending burden of employment regulations.

2:42 

What did you learn from growing your company? Because you were able to sell it. Correct? Yeah. So what were some of your biggest learnings from your growth?

2:53 

Yeah, well, and again, and I talked a lot about in the book, you know, as an entrepreneur early on, especially, I mean, I was just about  to turn 30 when I started my business and although I thought I knew a lot, obviously I didn’t know I didn’t know much. I came from big corporate America working for PepsiCo and other big companies. And although they trained me on good management skills, leading people, which you already asked about leading, and challenging people to really take the next step was a something that I really I learned early on, fortunately, because as I talked about my book, I had what I called my mirror moment, which was basically a nervous breakdown, if you will. And I realized if I kept going like this, my body was telling me to knock it off and I needed to get people around me that we’re better at and you know, people talk about all the time hire people better than you. And specific skill sets and areas of the business that I just there was not enough hours in the day. So it was really not any magical lesson. It was that you know, when you get the right people and they have the right mindset, and they’re aligned with your culture, like I’m sure you talk about a lot. Your business it’s pretty much unstoppable Other than, you know, a pandemic or, you know, other things we can’t control I talked about in the book. I mean, 9/11 happened while I have my company and that was, you know, that was a major, major setback for us for a few months.

4:13 

Right. And the, so I believe you sold it in 2007. Right, which I think is fortuitous, in the sense of it was right before the next you know, big financial crisis that we had. Yeah. I mean, was quite impeccable, honest, honestly. How did you how did you know? Or recognize that it was the right time to sell?

4:36 

Well, then this is something I’m sure you hear this all the time that entrepreneurs and unfortunately, I had a lot of friends who were entrepreneurs who say the G word was getting in the way greed, and they probably should have exited about that time. But we actually started looking at selling middle oh six, so it took us 18 months. We had a plan around it. It wasn’t triggered by any one or two things but my CPA who are CPA firms, I like to say more an advisor and a coaching firm than just a bookkeeping company or an accounting company. You know, he is named Steve, he came to me at lunch, you know, six and said, Hey, you know, things are heating up in your space, we’re looking at pretty good valuations. I’ve got a couple PE firms that would like to come in, let you and your business partner, take some chips off the table and then grow it and go public and or acquire the companies. And I was already living at the time the 40 hour work year. So my business partner, Mike, Karen talked about this. I said, You know, I really don’t want to get back in and grow this again, I kind of did that. But I’m willing to sell if you are. So that’s what kicked it off was the timing of valuations in the interest of the markets in mind our type of entity.

5:44 

Could you give me sort of a high level overview of the 40 Hour Work Year?

5:49 

Book? Okay. So again, it’s my story. I kind of have some fun in the beginning I talked about when I was a kid and I grew up in an entrepreneurial family and had a bunch of small little, you know, businesses selling candy and doing all kinds of stuffs on, you know, cutting wood and selling it and basically a young entrepreneurial kid. And the book then transitions pretty quickly into my story of my company, which was human capital. And it’s over a four year span, which is 2004 to 2007, which is when I, I lived, I worked really less than 40 hours a year, the company was running itself. So I spent a little bit of time and the first part is given a background of my company and how we got to where we were some of my major stumbles and mess ups as I just talked about having my nervous breakdown. And then the meat of the book about 80% of the book is how did I transition myself and the business into a passive investment for me as an owner, not something where I had to go in there, make the donuts every day. And then the exit, which is I don’t talk about the exit out of that the company because of how we set it up was positioned perfectly to exit because I talked about the ownership paradox in the book.

7:06 

So I think everyone that a coach, that’s a business owner, I mean, that’s the ultimate goal, right is to be a passive investor inside of your business. What are some of the key takeaways that any business owner or future business owner that’s thinking about growing the company? Like what do we need to be thinking about today and as we’re building it?

7:26 

So, you know, again, it’s one of my favorite sayings begin with the end in mind. So when I meet the business owner for the first time, there’s a well you know, I’d like to get to where you’re at. So well, what is the end for you? You know, my book isn’t about selling your business. That’s what I did. My book is about setting up your business so that you can sell it if you want to. So if you want to set up an evergreen business or an ATM tech company, or you want to set up something that can be handed down to your children or family, or you do want to exit I believe every business should be built and structured the same way and this Basically around systems, so, you know, entrepreneurs, you know, I do my talk, if I want the room to go to sleep or leave, I say we’re going to talk about systems and we’re gonna talk about training. You know, that’s most entrepreneurs. That’s why that hurts. I don’t like that stuff. And so the way we really got to where we did and the way the business was running was, we put the time and effort and got everybody involved in building the SOPs, or standard operating systems, procedures, standard operating procedures to build the company to run without us. It’s like a myth. I’m sure you’ve talked about, you know, its franchise model. And every business I believe, can be built to run pretty much by itself, meaning with the teams that you put in place. You don’t have to have the owner.

8:45 

Use that you use the term ownership paradox, and can you explain why that is so important?

8:53 

So I saw that graph. It was I don’t remember I wish I would have you know, didn’t have iPhones back then. I wish I was taking a picture of it. My business I sold my business the year the iPhone came out. That’s how long ago, but the guy did this graph, it’s two arrows across in the middle. And basically, the up arrow is the value of the company. the down arrow is the owner working in the business not on the business in the business. I’m work on the business all you want, but you got to get out of working in the business. For example, when I my nervous breakdown, basically a panic attack, I was the sales guy. Because I thought I had to sell everything. And it was you know, it was killing me. So the ownership paradox as you move down working in the business, the other arrow up dramatically increases the value of business. And as I talked about when I do my talk to Vistage groups and to groups of people like that is the real power of that. That image, though is not that you figured it out. It’s going back and showing your team. Hey, everybody, let’s work on getting me down off this in the business arrow as far as possible so that the value of the company will go up because it’s not only the owner benefit when you’re working in a more valuable company, everybody benefits. You can pay more, you can bonus more, you can do more 401k you can offer stock options. I mean, if you’re struggling to make payroll every week, because you’re so much in the business, nobody’s benefiting.

10:19 

I know that slps does put an entire room to sleep. So I’m with you. However, you’ve outlined a really great nine step process for developing them. Can you just cut about a high level of shares? Some of the steps that are involved in having us develop great slps.

10:38 

Yeah, and you know, I know that was the most the most onerous thing I’ve ever done in business. It truly was. Good news is now I mean, you’ve got great you know, platforms out there. I mean, I constantly sing the praises of a platform called train Yule train, calm, shameless plug. But Chris, Ron’s Yo, who started that company was a coaching client of mine for a few years and started cranial and I get almost all my clients to use it now. But the basic, most difficult part of the SLP, especially for entrepreneurs is they, they’re not going to set aside the time that it takes to really document these things. So as I talked about in the book, I mean, we had our managers of each department documenting in 15 minute intervals during the course of a day for two weeks, every single thing they were doing, and you know, the scary thing is, is you’re aware, I’m sure, or a sad thing is, there was a lot of dead time in there. Right? There’s a lot of, here’s what we did for seven minutes, and then nothing for 12. Right. And so that was part of what we needed to do. We’re like, okay, we’re moving around on a lot of different ways and doing a lot of different things that aren’t necessarily going to help us grow the business. So we would take all that documentation, we would sift through it with the managers, the executive team would shift through with the managing department that’s really, you know, focus it, make it better. Take it back, implement that, do it again, for Two weeks do it again for two weeks, etc, took us around nine months, from the beginning to the end of getting all that document in and again, you know, this was Excel word on the intranet. I mean, it was not nothing like it’s out there now I never know, mobile apps or anything like that. And so you make a change, say in finance that would affect HR and sales. You’d have somebody go in and physically change the ESOP in each area of the documentation, which now that’s all it all cross references and updates automatically with the new platforms out there. I mean, I would have been great to have that.

12:40 

I think there’s kind of a myth around not all businesses need slps we’re not big enough to you know, need need slps. At what size of a company do you start writing standard operating procedures?

12:55 

Another great question. I recommend you do it right out of the bat. It’s a lot easier to do it in the beginning. When you do have some bandwidth and still have some of that creativity and you because you’re not just making the donuts all the time, but we started we were and again people asked me I said we were probably around 20 people, I would say internally. Now we had we had systems and slps. Already each department had stuff they were working, but it had not been put into a corporate SLP binder and online system. Again, it wasn’t online, it was in the office, but we hadn’t got it to where it was a holistic system that can be replicated from A to B to z when you brought somebody in house and the main. One of the main reasons we did this is we didn’t really totally start transitioning the company up but we started getting operations in multiple states. So when we when we sold the company we had we had clients in 42 states. So when you have 23 entities, federal 42 states when you have that complex of a system and they’re not uniform, system. So keys that are being integrated at each spot, you’re just setting up, you’re setting up a maximum, it’s going to turn out. So that’s kind of what got us to really go in that step. And then we’re also really dealing with which is the outcome of this is that we now had a way to train people consistently, correctly, over and over and over again. It wasn’t well, you know, Missy is not in the office today. So she can’t train you know, it was yours ESOP. You don’t need a person, you have a system like the same, right? don’t hire people to run the company, hire people to run the systems. So I think the takeaway I want to make sure that our listeners is that it feels like it’s a big effort, but it actually saves you a tremendous amount of time when you have documentation done. And I want to go back and you said a shameless plug for one of your clients. That is an online platform. Train you well.

14:53 

Rachel Yeah, so it’s a training in manual tr AI n you al comm training calm

15:00 

We try to put that in the show notes so that people can get a link to that too. That’s super cool.

15:04 

Yeah. And Chris ronzo great guy again, he I met him through accelerator I used to facilitate in Arizona. He’s in Phoenix. Now he’s in the go. And I did his strategy session this last fall. And, you know, he’s building a great team, they just brought on REMAX as a national client using trained on the whole REMAX system. So it’s fun to see entrepreneurs, you know, killing it.

15:27 

Absolutely. One of the other skills that you teach is a decision matrix or how to use a decision matrix. So first, can you explain to the listeners what that is? And then how you recommend company owners use it?

15:42 

Yeah, the decision matrix and again, I don’t know how many talks I’ve done now, but it is universally the one tool in the book. From a feedback standpoint that I get from people months, years later, they email me that they token used in their business and saw dramatic change. So the whole concept is Before you start building your, your slps and your training systems, we will we did this I believe I told you we should do this, you should build a decision matrix. So Decision Matrix at the company level is usually around 40 to 60 line items of things that have to have decisions made on them, meaning a signature in most cases on a weekly, monthly quarterly annual basis. So, things like changes to your 401k things like changing compensation structures, changing bonus structures, settling litigation, all those kinds of things, purchases, vendor approvals, all that stuff is document on the left hand side and then across the top and columns are the different people who need to sign off. So we had in our company, we had owner, CEO, CFO, department head and the manager. And so in that in that line item, if you look into the cross to the right, there’s an X in the box of each person that needs to sign off and or be involved in the approval or decision that needs to be made. So are you Use the 401k as an example, Karen and I’s stone, we sold the company we only had seven X’s out of 48 of the whole box and we had seven and one of them was 401k. But a behind the scene behind the picture of that X was a simple one line item thing Karen and I had to do, we were fiduciary on the 401k because we were the owners, we had to sign the 5500 form. So even though I have an x in that box, it was literally a five second SLP once a year because I designed the 5500 as fiduciary of the 401k so we get it sounds very minute and granular but when you have that clarity, you know clarity equals power when you have that clarity of the decision matrix. And I used to when we were first working this through it is tough to get it going once you get it going. It’s pretty sweet. I used to say to people well why are you touching that box? You don’t have an accent. As my as my youngest daughter used to say, you know, get out of my sandbox, you know, get out of my junkyard stay out of my box. So it’s a very visual and systematic way to explain to somebody, look, you don’t have to be in that meeting, you don’t have to get on that call. You’re not to sit in and thumb through the documents, you don’t have an x. box. And again, I want to say, you know this very well, you have to have the right kind of people for this system to work. So, right, you know, a lot of times, people aren’t that keen on being that in line with what the systems are, how it should be done. So you need a certain mindset to make this work. It works. I mean, there’s no doubt about it.

18:41 

It would I can speak to when trying to put a decision matrix in place when there’s been no accountability or responsibility held within a team or within a whole organization. It does become more difficult because people are very protective of their sandbox areas. And being able to attend that meeting, even though they don’t have a role in that meeting.

19:04  

I mean, well, so one of my one of my favorite formulas is ownership plus measurement equals accountability. So the decision matrix, that is what it is to a tee, it’s ownership, who owns it? And what’s the measurement and the measurements behind the decision matrix, each line item had slps to explain how that approval method was going to be carried out, which was the measurement piece. And to your point, when you have ownership and you have measurement, you can have accountability.

19:33 

On the creation of a decision matrix, you know, you brought it down to the like you had the X in the box, because it was something that you just needed to sign the form. And how big would a typical organization’s Decision Matrix be? Is it a page is 50 pages? What would it look like?

19:51 

Sorry, I didn’t quite hear that first.

19:53 

Like how comprehensive should a decision matrix be for a company?

19:58 

Oh, yeah, great question. So one of my largest clients are about 400 employees. They’ve got several offices, several levels of management, their corporate decision matrix, which is, again, all I talked about in the book, from a visual standpoint, ours was 48. I think they have 55 or 60. But it doesn’t necessarily mean bigger company has more. I’ve got companies that are bigger than mine that have 35 line items. But the next level is in each department had its own decision matrix. And those were 15 to 20 line items. So sales department and the decision matrix HR, payroll finance, so the company as a whole for us was 48. The department ones were typically 15 to 20. Okay, and you’re just getting more, you’re getting more tactical as you move down the organization office.

20:43 

Okay, that makes sense. Thank you. Um, one of the other things that I wanted to touch on today was where people fit into the building process. So you teach CEOs how to develop a people plan. How do you define a people plan in what’s involved?

21:03 

So, and I think we kind of touched on this earlier but I got sidetracked, which is normal. I’ve got the shiny penny syndrome like, like all of us do. But um, so we The first thing when I go to somebody say, Okay, do you have people plan here to move yourself more business? Do you have that right hand person, right hand man or woman? that literally there 80% of you I talk about 80% rule or 80% or more of you. So you can go on a at least a two week vacation and the building doesn’t burn down. I mean, the business is still running. Okay. Yes, I got that person. Okay, great. Now, do you have what I call an executive team or a leadership team, or a team that you have overseeing each department? So for us, it was five department heads. Seth, who was my CEO, and then Karen and myself were founders. So there were eight total if you look at it that way, but Seth, the five reported him. So typically when I start working with a company or time a company, they haven’t built out that That executive team yet or it’s missing a couple key people. So that’s usually where we have to start that people plan process. I am a huge advocate for promoting from within. I wouldn’t got my sales guy from another company, but pretty much everybody else in our company started with us and grew up throughout the company. So that’s a key thing. I think when you have that culture of when we would post a job opening. Yes, we went out again, before, you know the stuff we have now before we post an ad. And we would open up interviews anybody inside the company that was qualified. So you know that that was a great way to build that culture of, Hey, we can grow this together if you want to be a part of it. So you get that right hand person, you got the you got the executive team in place, and now you start creating their own teams under their departments. So each of our managers directors would have their own small team typically, you know, like finance I think that eight people so there’ll be two key controller system controller plus the CFO, payroll, over three managers that are 16 people in the payroll department, three or four managers plus the department head. And all you’re doing is just like a, you know, a sports analogy, you’re just grooming that next team that’s going to move up in the organization, should somebody get promoted and or leave, I mean, you know, people quit or left or moved or whatever. And building that bench, very few use cases, very few entrepreneurial lead companies have a bench and then, you know, hit by the bus into the tunnel conversation, right? ran, you know, that key person, the golden child syndrome, I call it you know, the golden child who had everything in their brain, didn’t document it and didn’t build a team. And now they’re moving to Hawaii. And guess what you started from scratch. So I don’t know if that totally answers or people plan but that’s the basic layout of how we look at it.

23:54 

So key, find your right person first, I think is where it starts and then build your executive team. around that I love having owner people who think like owners so intrapreneurs who are on your on your team? How can business owners identify people who also think that way? What is the core thing that you look for?

24:17 

Yeah, why I again talking about the first time I book it, you know, it’s amazing to me how many people did have little businesses or small businesses, grade school, junior high, high school, but you know, whatever, they got a degree in another area, or unfortunately, were directed by maybe family members or people who didn’t think they could be entrepreneurial. And so they never, you know, did it and or they just don’t have that lack of fear of jumping off the cliff and putting everything the risk, like on Thursday, but if they had that experience and or they have had that experience or when they were younger, or even maybe during their time in the world in the business world, that was a big key for me. You know, Seth, who ended up running my company. For me, he had a lot of background in his earlier years. For me it was an attorney before I got a law degree, and having his own little businesses in a fishing business during tour business on the lakes of Michigan, so he had that ownership mindset. He understood what that look like. And you’re right, you know, that I’m in several angel investments, deals and some of the people we have as investors and those come from an employee mindset. And this may only be their first time or second time getting in as an investor. And, you know, that’s, that’s, that can be some of the toughest conversations is switching them from that employee mindset to the owner mindset, you know, hey, there’s not going to be a distribution this month, okay? Things didn’t go so well. What do you mean the employee mindset of I’m still going to get my check no matter what you know, don’t take out another loan. Let’s just make sure I get paid. No, no, no. Owner mindset you get paid last. If there’s money at the end of the month or week or whatever.

26:01 

I know that not all business owners want to foster an entrepreneur mindset, which I understand I get. How do you so assuming that maybe that’s not a thing for them? How do you get people to step up when they when they don’t have that built in?

26:17 

Well, again, I probably. And so if you’re owning the company, when I was owning the company, it was pretty simple. For example, on the executive team, we really had to have that intrapreneur mindset, alright, and as you know, as you go through the organization, and again, it’s a lot of is just experience, right? They’re young, they’re just out of college, you don’t have that total never really even thought of that yet. And or they didn’t have that experience. And quite honestly, you don’t, at some level, you want people that is going to make the donuts. I mean, somebody’s got to be somebody’s got to love being on the phone every day running the payroll, because we were running payroll, I mean, if all they wanted to do was create a new service offering every day and didn’t want to run the payrolls, which I would call more of an on the business They wouldn’t fit that position anyway. Typically when I’m working with the company as a client, it’s a tough conversation. I work with the executive team and the owner. If I haven’t had a chance to talk to or do a pre call with the team before I do a session and I find out during the session, there was a couple people in the Dismore, you know, status quo. Let me work my hours get my days off. I mean, I just have an honest conversation with the owner. I actually had had situations where at lunch at the break, the owner went talk to the person and they said, Yeah, I don’t think this is for me. And they, they left the meeting. Um, most times, it’s I haven’t I haven’t really ever seen it be really confrontational because you can feel you can feel the reluctance from the person just as much as you can feel the frustration from the owner. And it’s having that conversation, right. I mean, how many? How many times have we just sat down and talk to our people? We could get a lot This stuff taken care of it doesn’t need to get nasty. I mean, it really doesn’t. So in my case, I don’t know if you really can make somebody intrapreneurial I think you can give them the tools. And if they have the mindset, you can coach them in that direction. But we changed out for different people on our executive team over four years. And really, it was it was around mindset, it wasn’t around performance.

28:23 

Do I think that sometimes people just need they may have been in a culture that didn’t really appreciate that type of mindset. And so they’ve lost a lot of people just need to be encouraged to step forward and lean in take on some of the risk and decision making on that. Yeah, and I think in a practical sense, or a actual, to your point, I think about when you think about when you’re doing reviews and performance reviews for your people, that needs to be a very open you know, it’s become popular now the 360 review and that sort of thing. A very open conversation type review, not a you know, scan, tron You know, you got a five out of seven or seven out of 10? Or you’re a 4.3. What does that mean? Right? It needs to be. Here’s how you’ve done under your job description. Here’s some of the stretch goals that we put out there. Here’s how you did there. What do you see as your next phase in development in the company? Because when you start getting people to think about Wow, I can I can really develop myself in this company. I don’t have to stay at this level if I don’t want to. That’s the true what I call entrepreneurial mindset. As close as you’re going to get, and some companies do it with, you know, stock options and shares and other kinds of things. In you hear this on, you know, surveys, pay and compensation is always foreign five out of the top 10. I never found it was that I mean, yes, of course you got to pay somebody and reward them for what they’re doing. But if they’re not challenged, and yours, you’re not giving him an opportunity to rise. I mean, that’s back before I started my business. That’s why I always love my employer. There was no advancement opportunity, right?

30:05 

Yeah. And I think that’s a very important point that as we’re as business owners, as we’re building our business, we have to look for opportunities to build everyone underneath us to all boats rise, right? Yep. Yep. Um, in some of your company, what was the most important metric that you needed to track in order to achieve the goal? So you set out to sell it in 2006? What When did you know where you were ready? And what metric are you tracking?

30:34 

Yeah, so I tell metrics in the book and I said, you know, they’re, they’re like a perfect recipe if you’re if you’re into cooking. So you know, sometimes you got to tweak a couple of measurements to really get that feedback you need on the on the area of the business you’re looking at. So our number one metric and I believe you should have a top five metrics for your business, the departments can have their own metrics, but again, much like Decision Matrix, you can have the company overlying one’s top five For the company, our number one by far, and I believe this is kind of universal and most businesses do just measure differently was gross margin for worksite employee. So in my business, what that meant is a worksite employee would be my clients employee. So if I had a Steve slaves counted 30 employees, those 30 employees would be called worksite employees under my worksite employee umbrella. So we had about 6000 worksite employees and we sold in that scenario, Steve’s company with a count of 30 of the 6000. So my gross margin per worksite employee, per client, and then as a whole aggregate, and when I cracked that nut that metric I restructured everything in the business from a compensation standpoint. I restructured the sales, sales compensation because I was paying them to just get the deal done, not what margin wasn’t bringing into the company. I reset the bonus and the performance, incentive structure for all the players Because margin per worksite employee, at least in our industry touched every single piece of the business, and I think that’s, that’s the most difficult part of strong metrics is making sure that everybody intrapreneurship mindset can touch that metric and have an impact on it. Because if it’s just a sales metric only, or it’s just HR, just finance, it’s really hard to get the collaboration between all departments.

32:26 

Would you say that that is a metric that if I were to hand you any other type of industry, you could go Yeah, it’s similar, but it’s this instead. I mean, we can look at every in Iran engineering firm, and our metric was billable hours. We had a certain average efficiency on our billable hours metric that we match. Everyone could contribute to that in some way. Correct? No, I think that’s great.

32:53 

Gross Margin. So in the gross margin extra, this is another thing so something I just don’t think there’s a lot There isn’t certain circles, but in an entrepreneurial education circles, there aren’t a lot of conversations around us. Number one is pricing and margin calculation for your services or products. And two is compensation structure for your teams. Nobody likes to talk, no offense, but every let’s talk about leadership and strategy guide. And that’s all the bumps up. But if you spend some time on those two areas, and I call just turn on the dial a little bit in the business, you can see some incredible margins. I mean, I had a client, and then 13 or 14 different services they layered that they were offering and what they thought the top three were like, middle of the bottom and margin. And they’ve never done that analysis before. So by just totally shifting, in some cases, just getting rid of even four or five of the services, you can raise, you know, bottom line without doing anything on the top line. But you know, it’s, that’s, that’s, again, it’s not for everybody because they’re sacred cows. They’re right So you can people like, what do you mean we’re going to get rid of staffing is our number one. Oh, really? It cost us $2 million last year? Well, they don’t get rid of staffing because they’re in charge of staffing.

34:13 

So you know, there’s a balance.

34:15 

And I just put out an email today and key performance indicators, KPIs were part of our focus for July because margin is very important thing to be thinking about in an economy and what we’re going through right now is it as a nation, so I put up 99 KPIs, and just all listeners, the two he just mentioned are the two most important so you can throw the other 97 just turn the dial on those two. I may do a follow up email. I’ll give you a total shout out for saying these are the two that’s cool.

34:48 

So speaking of KPIs, what is your favorite tracking tool to keep track of metrics such as that?

34:56 

And again, I personally don’t have a Favorite train you all has that ability built in. So what’s been cool and again, I’m not I don’t brag there’s other, they just won an award, though I think, again, I don’t track this stuff, not in that world, but they just won like the best SRP tracking training platform out of 400 that were tested or something like that. And I gave him a thumbs up on LinkedIn. I remember what I wrote that award was, but um, Chris is so good with because my clients will come and say, Wait, so he actually he’s built now the decision matrix inside training. So if you go use triangle, the platform the templates in there, you can plug it right in my strategy, my top five strategy page that I use my work with strategy, strategic planning, you built that in because so many of my clients, they’re like, Well, can we just see those? I’ll just put it in there. So you know, the KPI metric thing comes up a lot, right? And so he’s just added that as an add on to the system. I don’t know I personally don’t know of any standalone metric tracking again, you know, I’m an old guy. I mean, I just, I don’t want an Excel spreadsheet with tabs at the bottom and but they work. Yeah, it works and you always know where it is, you know, it’s not like which, which, whatever you’re open to go into there. So, yeah.

36:16 

I appreciate that. So I know that you’re heading to Boise. And at towards the end of the summer, but what’s next for you? You have another book coming down the pike.

36:27 

No, I just had my 10 year anniversary. I can’t wait that book came out came out in 2010, May of 2010. But I was asked about this probably like three years after it came out and what I did start doing it I was working with a friend of mine who was going to do it and it just fell apart but I was gonna go and interview individual business owners who had used you know, a section of the book the tools and have them add a two or three big story about their experience with it and more takeaways to make it more real. So call it you know, 40 Hour Work your way realized kind of a thing. And this this gentleman I was working with was going to go in interview, I’d highlighted the 10 people for the 10 different chapters, and then they got to the third chapter and just didn’t have. So that would be something that might be kind of cool to do. I do talks on angel investing, but as far as a book on angel investing, that’s such a, it’s such a unique niche to be more of a handbook, it really wouldn’t be a book.

37:27 

Awesome. I definitely want to make sure that our listeners know what the best way to connect with you online or how to follow you, where should we send them.

37:38 

Now I say this in all my talks, please, uh, you know, connect with me on LinkedIn, I love to connect people. I mean, I’m constantly amazed at how I can connect them to. I’ve got this size little story here. I’m going to start working with next week. three chapters in Eastern Europe, coaching them on a monthly basis and the person That connected me with this Follow me on LinkedIn. So it’s like Romania, Bulgaria and I have no the other one but anyway there it’s an Inca Stan of something. But I mean, these three these three Manfredo chapters are going to start working with me next week and it was only because of LinkedIn there was no other way they would have found me. So I tell people the internet you know, connect with LinkedIn, you can always email me at Scott at growth connect.com Scott at growth Connect comm or you can go to growth, connect comm all my stuff’s on there, you can buy the book on there and, you know, check out courses on there and stuff. So fantastic.

38:38 

I’ll include all those links in our show notes. And I do I highly encourage you picking up the 40 Hour Work year it is fantastic Not to be confused by the 40 Hour Workweek, right?

38:48 

Yeah, oh, by the way, because it’s my 10 year anniversary. I mentioned this, I have the online course which is usually $99. It’s all my stuff. If you go to growth, connect dot com click online course it’s only $10 for the rest of the year because I’m celebrating my 10 year anniversary of my book so you can do the online. It’s me talking taking you through all the exercises the book and I mean for 10 bucks at growth Connect comm or you just type in 40 Hour Workweek comm it takes you right to the online course.

39:19 

Outstanding.

39:20 

Scott, thank you so much. I hope that if you have some extra time while you’re in Boise that you’ll swing by our offices, we’d love to say hi.

39:29 

Yeah, sounds great. Thanks again for having me.

Transcribed by https://otter.ai

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