Episode 382: The Desert

Hey everyone, well, I just finished going on someone else's podcast. They're actually in the UK and I recorded it this morning. And as we were having a conversation just around all the different topics of business, there was something that we got into that I don't think I ever shared or talked about on this podcast. And I actually shared with him later that I was going to record this solo episode, and I'm going to call it The Desert. I want to give full credit to Daniel Priestley, my coach Mike, their, their business partners Glenn over at Dent, because they have really helped me through some of these areas. And they have a thing that they call the entrepreneurial journey, and they talk about, you know, the different places that you are in the journey. And I specifically want to talk about this area where the business is too big to be small, but too small to be big. Now, let me take a step back before I get into sizes and team members and revenue, etc., of like what that actually constitutes, and share with you that the place that I specifically feel like that I know, or enjoy, I should say, working with the most, are business owners doing half a million dollars in revenue to around $3 million in revenue. All of our Blueprint clients really fall right in that. Yes, we have, certainly if you're looking at a bell curve, have some people that are doing above that and we have some people doing slightly below that, but the vast majority are sitting right around that million-dollar mark. And then they're saying, okay, what do we need to do to get to another, you know, to get to 2 and then what's it take to get to 3? But I'll tell you, the 0 to 3 million, is really— and you read any articles, listen to other podcasts— that the first 3 is the hardest. And then 3 to 10, that, that changes things. I mean, listen to some of the Alex Hormozi content, which I think is phenomenal. And that actually brings me to a part where he's shared some things recently, and this is not at all to be a contrast to him or to challenge any of the things that he shared. It's actually to complement some of the things that he's sharing. But he was talking about how there's still such a big arbitrage opportunity out there when it comes to the people that you bring on your team. And he was given examples of him sitting, you know, with private equity companies at the table, their intelligence level, etc. And then he says, you know, the first time you hire someone at 6 figures, the first time you hire somebody at $250,000, the first person you hired half a million, the first million-dollar person. I think, you know, he probably has at Acquisition.com right now several people that are doing well over, um, you know, a million, making a million dollars working for Acquisition.com. And that's fascinating to hear whenever you're listening to it on a podcast or on his YouTube channel, etc. But I think it also becomes something that's really difficult for us to relate to as small business owners. I, I'm going to venture to say that percentage-wise of the— of all of you that are listening, there's probably not that many of you that have a 6-figure employee on your team. And that's okay. It's just relative to what your revenue is doing. I mean, think about it, you're not going to go hire a $250,000, uh, employee who has experience looking at doing what you're wanting done, leading a sales team, running your entire marketing department, if you're doing a million dollars. But if you're doing $10 million, that's a very logical hire that you would make. It's just relative to the revenue in, in business, and it just makes sense. And so I think that, okay, well, what do we do with that? And so back to my thing of the desert is like, you know, if you're in that, you have 10 to 20 or so team members, that is a challenging place. Daniel specifically talks about the like 12 to 30 team member space is really challenging because you have your first levels of management in place. You have your first managers who— so you're leading then managers. And for most business owners, that's, that's a new skill set to develop. So it's one thing to develop, say, you can develop a really great customer care team, you can develop a sales team, but then developing other leaders takes a new skill set that you have to begin to adopt. And for some people, that's much— that's easier. I do believe they're all skills that we can acquire. It's even mindset, how we think about it, and even some tools. that, that we use. And so when I hear things like from Alex and other people that put out great content, um, and you hear those kind of things, you say, yeah, that makes sense. But like, golly, that's, that's impossible for me to think about hiring someone that's, you know, at a half a million dollars. And what I think Alex was saying there, and how I'm going to hopefully land this plane for you here, is when you hire people like that, They come in and they tell you what we're going to do. They put together the marketing plan, they put together the, the sales acquisition plan, they work with the marketing person, they go to the operations director, they go to the HR director, um, so on and so forth. And they say, this is what we need to go and execute that. What a great place to be. But to get there, you've got to go through the desert. You got to go through the desert to get to that level to where you're hiring people at that level to where they're coming in with the answers. Now let me contrast that to where the majority of the people that I know and the business owners that I'm around— majority of people are, are in that, you know, you have 4 to 12 team members. And by the way, you can have a great, incredible lifestyle business having 3 to 12 team members. And that fact, that's what Dent and Daniel and Mike and them talk about is the value of really having a super profitable lifestyle boutique business. That's what they specifically call it. The challenge with that and the way to think about it and approach it is that when you're hiring those people there, they're not going to come preloaded— often not going to be preloaded with all of this breadth of experience and have done exactly what you're looking for. And so therefore, we have to get it out of our head. And we're still doing training, coaching, teaching new ideas, helping them to, you know, put together the marketing plan, put together the sales strategy, put together the sales team, maybe even still leading the sales team potentially. So That's, that's the difference. When you're in that, you know, lifestyle boutique area, that 3 to 12, you're still— you can be doing a couple million dollars in revenue and very profitable and growing and have a great lifestyle for you that gives you the freedom and the flexibility that you're looking for. You don't have— maybe you have one layer of management in place because having 12 direct reports would be difficult. So you have one layer of management in place. But as Daniel says, once you're in that desert, that, that 12 to 30 team members, that can be challenging. That can be challenging, and you can push through it. And once you get to 30 or 40, then you're beginning to really create what they call more of a performance, uh, performance business. And so what's kind of the takeaway here? I think the takeaway here is the people that you're bringing on can be incredibly talented in this space of half a million dollars to $3 million, which I'm going to take a wild guess is the vast majority of you listening to this podcast. And that's what I was sharing on that other person's podcast, is that, you know, we just know that, that, uh, that space, what it's like to have two, what it's like to have remote team members, what it's like to have fractional team members, but have a team in the, you know, 5 to 12 team member space, whether they're full-time or, or fractional team members. The difference is when you get to past $3 million, you start to then scale to $10 million. The talent difference that you're bringing on there and how that experiences in the business is just vastly different. Matter of fact, I've got a friend that's in the, you know, just high-tech startup space, and all the businesses that they work with, you know, they're raising capital $10 million, $20 million, $50 million, $100 million. When they have that much cash in the bank, whether it's from investments or from lines of credit from the bank, they can go get incredibly talented, quite literally some Harvard MBA people, to help them to be able to grow that business. And so I think that whenever you're starting to kind of think through a big vision of what it is that you're wanting to accomplish. I think that seeing it as, hey, you know, do I want to be in that 3 to 12 people space, or are we going to push past the desert over time and we're really going to be trying to build a performance business and really push to 20, 25, 30 team members, and just the revenue is going to get closer to $3 million, $4 million, $5 million? And when you get there, the talent you're able to attract, just simply because they're going to demand that type of income is going to be vastly different. So that's been a helpful mental model. There's no tool to take away here or anything like that, but it is helpful to begin to kind of think about and hold in your heads like a mental model that you hold in your head of, you know, this idea of revenue and the number of team members that the business has and what you're basically able to invest in team members. So I thought I'd share that with all of you. I hope that that was helpful to all of you. Okay, Victoria, go. Lead well.