Michael Richman: Secrets to Scaling Your Business with Principles from the Entrepreneurial Operating

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts, uh, to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10X ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint Podcast. I'm your host, Mark Osborne. And today, I'm very excited to welcome my guest, Michael Richman. Now, I'm going to read Michael's bio to make sure I get this right. He's a husband, father, entrepreneur, mentor, and business leader with decades of experience in diverse industries and roles. He brings a depth and breadth of know-how to a variety of endeavors. And we're going to talk about a lot of that insight today. He owned and operated a second-generation multimillion-dollar custom manufacturing company, culminating in a successful exit. And while running that company, he oversaw all facets of financial, operational, marketing, and sales functions. During his tenure, the company doubled in size and increased profitability margins by 20%. He also established long-term relationships with some of the premier names in hospitality and restaurant industry, including Panda Express, Four Seasons Hotels, and Ritz-Carlton. Additionally, he's been a sought-after commentator regarding industry, business, and entrepreneurship in national publications, including USA Today, Hotel Interactive, and Inc. Magazine. He believes in community service at large. He's been a mentor at the University of Southern California, where he graduated from undergrad, for first-year college students. Fight on!

Fight on!

Where he worked with them on transitioning to college and preparing for careers. Additionally, he's an active member of the Los Angeles chapter of Entrepreneurs Organization, where he chaired the Finance Committee, the Membership Committee, and he'll be the president starting in June of 2025. Since the sale of his business, he served as a mentor, coach, and facilitator to numerous businesses and groups across the country. So, Michael, welcome to the show.

Yeah, thank you. Thank you so much for having me. This is a lot of fun. Glad we get to do this.

Yeah, absolutely. So, tell us your story. That's such a rich background and you've done so many things. Tell us a little bit about how you got to where you are today and what you're really focused on today.

Yeah. So, born and raised right here in Southern California. So, yes, I am One of those rare people because everybody seems to be a transplant here. Born and raised here and always knew that I wanted to own my own business. So, I actually went into banking first and I wanted to see the financial side of how businesses worked and how they obtained financing and things of that nature. Did that for a while and went out and tried to buy it, purchase a business. And I was actually in escrow for a business. This was back in the day where you would take checks to the escrow office.

Of course.

And I had the check sitting next to me in the front seat and I was driving there and I get a phone call from the owner of the company that I was purchasing. And he said, you know what? I have cold feet. I don't want to retire. I don't want to sell my business. And so I said, okay, back to the drawing board. And so my father called me and said, well, why aren't you in business with me? And I said, look, you know, family businesses can be complicated. There's a lot of things around that. And he said, well, what if you were my 50/50 partner and you bought out my current partner? And so I said, okay, let me make him an offer and let's see what he says. So I went in there and I made an offer to his partner and I bought his partner out and joined that business. And again, we were commercial manufacturers of shade structures, awnings, poolside cabanas for, as you mentioned, places like Panda Express and Four Seasons Hotels. And when I got in there, the business was doing well and we saw that there was a lot of room for growth and a lot of opportunity for expansion and different products. And really monetizing some of the relationships that we had. And so we were—I was introduced to EOS through the book Traction and through EO Los Angeles introduced to it. And I realized that the tools in there that I read and I learned about were so simple that I started implementing them into my business. And I saw the results of of those tools that I implemented into my business really quickly. I saw our EBITDA increase. I saw our revenue increase. And so I began. became an evangelist for EOS, which is the Entrepreneurial Operating System.

Yeah.

And I became an evangelist, implemented it, like I said, into my company, started mentoring, as you mentioned, some people at USC, teaching them some of the tools on how to implement it into their companies. And eventually, after I sold my business and had an exit, I thought, what am I gonna do with the rest of my life? And I love helping other business owners. I love helping businesses get more of what they want from their business. And that's different for every business. And that's the beauty of working with businesses. And that's the beauty of doing what I do, and that's the beauty of implementing EOS. So that's how I, uh, that's how I got here today.

Very interesting, very interesting. And so within EOS, uh, as an implementer, what, what does that mean that you do with, uh, companies as to sort of help them, you know, take advantage of this entrepreneurial operating system?

So I go in there and I teach them the tools. I'm almost like, uh, I'm a coach, I'm a facilitator. I go in there and I teach them these tools and I help them facilitate conversations around the tools. You know, a lot of companies don't have a vision. And that's one of the most important things around EOS is like, let's figure out where we're going and how we're gonna get there. And so that's, that's part of it, where we're going, how we're gonna get there. Great. Once we figured that out, the second most important thing is taking that vision and bringing it down to the ground. So everywhere you look around your organization, it's being executed on. And that's the traction portion of it. And that's the part that people miss out on a lot, right? They think, and I was guilty of this, oh, I know what the vision is. I have a great vision. Everybody knows what vision is every person in my organization knows where we're going and how we're gonna get there. And the truth of the matter is, most of the time, people don't know from the top where they're going or how they're gonna get there. And so taking that vision and executing it, so it's, it's being, it's being focused on day in and day out, is really one of the things that I help them do. And then the third thing is I work with the leadership team on becoming more healthy, open and honest, having more debates, more discussions where they're really hashing out issues and solving things for the greater good of the company.

That's great. That's great. Yeah, one of the things that I love about EOS and working with companies that operate it is this idea of both a visionary and then also like an integrator within the organization. And you've probably read, you know, Gerber's E-Myth, you know, the entrepreneurial myth.

Right.

And so often in business, there's this idea that the entrepreneur has to be the Superman that has both the vision of where we need to go as well as the executional excellence of how we're going to get there. And that's just almost impossible for one person to sort of wear both mantles. And so I love the idea that you can have someone that defines the vision and where we need to go and someone else that defines the execution and how we're going to get there and then bring those together within the organization.

And think about there's so many great examples of this in business history and in regular history as well. If you think about Sheryl Sandberg and Mark Zuckerberg, Right. Mark Zuckerberg was the visionary. He had all these great ideas for Facebook and Meta and Threads and all these things, right? And Sheryl Sandberg helped execute and turn those dreams into reality. Walt Disney and Roy Disney, right? Walt was the dreamer. He was the one who said, let's put a theme park somewhere. And Roy was the one who went to the city of Anaheim and said, okay, where are we gonna build this thing?

Yeah.

Or even if you look at, like I said, at history, you have George Bush and Dick Cheney, right? George Bush was the visionary. He's the one who had all of these ideas for what we needed to do in the country. But Dick Cheney was the one who managed each of the departments and said, okay, here's what we're going to do to take that vision and bring it to reality. So this is— it's not a new concept. It's just a concept that people miss in business a lot. And it's unfortunate because there is this stress that entrepreneurs feel where they feel like they have to be everything to everybody and they end up having major spikes in their business or they end up not feeling well mentally because they're trying to do everything and be everything to everybody and it just doesn't work.

That's right. Well, and, and it really sort of gives you permission to focus on sort of your, your zone of genius, as they say. Right.

Of, right.

You know, if you are naturally more of this sort of visionary and, and sort of striking the kind of leadership position of leading where we need to go, Or if you're naturally more of a manager that can sort of orchestrate getting things done, it gives you sort of the permission to lean into where you're best instead of feeling like you have to be everything.

Exactly, 100%.

So, as you work as a mentor and with the Entrepreneurs Organization and sort of coaching folks, what are some of the most common challenges that you see companies facing as they're getting going or even as sort of they're hitting some of those first ceilings of growth?

So many of the problems that businesses deal with, I'd say, are twofold. And EOS has 6 key components. But I would say one of our key components is people and having the right people in the right seats in any organization at any size as they're scaling is so important. It's so important. And sometimes I run into issues where we'll have the right person, but they're in the wrong seat, right? And they exhibit our core values, and we love them. And, and everybody's like, we love Bob, he's the best. Well, what does Bob do here? I'm not really sure. Should Bob be here? I'm not— I don't know. Is— would Bob be better at something else? Probably, you know. And, and I did this when we did this at our organization. We found that we had people who were great at, um, at executing in, in certain areas. But I always joke that I had a guy who was a project manager, but I was worried that he actually probably couldn't manage his way out of a paper bag. But when we did this accountability chart, we realized this is somebody who would be much better in maybe estimating or something like that. And look, that's what you want to do is you want to move people, like you said, to their zone of genius, to what they're going to be successful at, to what they're best at. And so that's what we did is we moved that person over there. And continue to, to do those types of, of things within your organization because people is the most important asset that you have within an organization. Okay? And so the problems that we see, right people in the wrong seat or wrong person in the right seat, is another big issue that I see where you have these people who are awesome at their job, but they're cancer to your organization. Every time you turn around, They're saying bad things about you. They're talking to other employees about how this isn't the right place to work, and they're knocking down all of the progress that you're making. And so when I look at organizations and I look at where are the problems, a lot of times it stems from just having the right people in the organization, in the right seats who fit our core values like a glove, and they're doing something that they were put on this earth to do. Or as Dan Sullivan calls it, your unique ability. I'm not sure if you're familiar with that term, but your unique ability, what God puts you on earth to do and puts your feet, you know, puts your feet on the ground every single day to answer to. So that's, you know, that I think is one of the big problems. And the second problem that you see in organizations is not following processes. Okay? Not following processes. And people think that processes are boring and their eyes glaze over and they go, processes, oh God, why are we talking about that? But at the end of the day, processes are so important. Okay, following a process because it tells us the right way to do things each and every time. And so when people say, oh, well, we're not communicating well at our organization, that's why things are broken. I'd say 90% of the time it's because we don't have a process for it. The process hasn't been documented, so nobody knows what the process is, or we have the wrong people, or they're in the right seat, in the wrong seats, or some combination of the latter. So I think that having all that processes and people buttoned up is what really makes organizations successful.

Yeah, that's— couldn't agree more. And it's so interesting. We use the term systems to describe those processes. And we actually have a phrase that systems set you free. And just as you described, like a lot of folks feel like, well, creating a system is going to, you know, it's going to weigh me down or it's going to, you know, sort of, you know, keep me from being free. But we actually see it creates so much more freedom because For starters, once you have a defined system, then you can hand the job off. And so, maybe the wrong person has been doing the job because they're just the only one that knows the way to do it. But once you define it as a system or a process, then they can hand it off and then they can focus someplace else. They can sort of delegate and elevate the solution. And then, the other thing that systems do is they ensure that you're always showing up as your best self.

Right.

Because if you have a bad day and you're just sort of winging it every time, well, then you might not do it the best way. But if you've got a defined system, then it sort of allows you to, you know, sort of do it in the best way every time. And it creates a baseline. And so, once you have that baseline of, well, here's the results we get by doing it, you know, this particular way, let's come up with creative ways to make it better. And then, we can test against that baseline. So, it actually creates the opportunity for creativity, not sort of restricting it.

100%. And I think, you know, the other thing, that example that I like to give is when you play a board game at home, Monopoly, Sorry, whatever board game it is, you always look at the directions. You wanna know, how do I win the game?

Yeah.

And that's something that processes do for employees, right? They tell you how to quote unquote win the game and it tells you what the rules are. And knowing the rules of something before you enter into it makes it so much more fun. I mean, think about anybody out there, think about playing Monopoly and not knowing which way the pieces move. It's not gonna be a fun game for you.

That's right. Or if every player makes it up differently every time.

Makes it up differently. Exactly. It's not gonna be fun. And so that's the point is we wanna make it, makes it more fun when you know what the rules of the game are because you know how to win it.

Well, and describing it through the lens of an employee too, the other thing that we see is that systems really sort eliminate a lot of strife within teams because it doesn't become, well, Michael let us down. Michael didn't do his job right. It becomes, well, the system let us down. Whatever the system was that was supposed to generate the results that Michael was running the system. And now, and then it makes it a lot easier to identify, was there a skill gap? Does, you know, do you not have the tools to run the system right? Okay.

Well, or does the system— sometimes the system needs to be updated or the system— The system might be broken. A process. Yeah, a process is broken. We need to fix the process. That's okay. That's okay to figure that out and understand that, but we need to know that.

That's right. That's right. I love this approach. I get really passionate about it. And so you talk about sort of zones of genius and, you know, where we spend our time is around sort of marketing, sales, revenue-oriented systems. What are some of the challenges that you see are, you know, most common with companies as it pertains to their systems and processes for, you know, their marketing and sales and sort of customer success as they try to grow that, you know, sort of residual and recurring revenue?

I think one of the things that, that I see a lot is this idea that organizations don't know what makes them special or what makes them unique in the marketplace. I'm sure you've seen that as well, right? And the example I always use is when I talk about what makes companies special is the example of Southwest Airlines. And they had 3 uniques, right? The 3 LFs: low fares, lots of fun, lots of flights. Okay? The 3 LFs. I would debate that some of those nowadays aren't as true, but originally that was their, that was their thing. So many organizations, you go in there, why should I use— if you're there at a cocktail party, every employee should know why they should, what makes them unique. And if somebody says to them, why should I use you over XYZ organization? They need to be able to answer that question. And so many organizations miss on that. They just can't do it. And so it's so important that we know what makes us unique. What are the 3 things when combined that separate us from all of our competition? And those are the things that we should be sharing on a regular basis.

Yeah. So, so often I see companies that are, you know, maybe even spending a lot of money in advertising, but what they're talking about, the message that they're bringing to the marketplace is either like the benefits of the category or benefits that essentially every other competitor claims and they just say they're better at it. It's really hard to prove better. Only is so much better than better.

Right. Yeah.

It doesn't really matter. We work with a company that talks about onlyness as one of the really important things about a business. And although it's so important, a lot of companies don't do it just because they feel like it's a burden to take the time to really understand the customer and what they care about and then to really understand the competitive landscape and what other folks are saying so that they can then find, okay, knowing what the customer cares about and what other people claim to do, how do we deliver a benefit that's really unique to us that only we can do?

Right.

It really creates that onlyness in the marketplace.

Exactly. And you want to be in the position where you are the company that has that onlyness, right? That's where you want to be. You know, another thing that organizations I see miss on is they don't know who their client is. They don't know what the avatar of their client is. And so they're talking to the wrong people in the wrong places. That's right. And so I really try to work with clients on, hey, what does our clientele look like? Who is the avatar? What is— who are our key partners? Who are the people that we should be going after and where are they? Are they here locally? Are they National? Are they international? What does that look like? Because so often we're going after people that are not the right people and trying to talk to them about something that they're not gonna be interested in and it wastes dollars and it wastes time.

That's right. Well, and not only, you know, sort of dollars just from a traditional kind of advertising sense because if you're, you know, paying money to take your ad to the wrong place. But one of the things that we see is when you really know that ideal client profile, like the company, and then really know that avatar or the persona of the buyer, you start to have really unique insights into where they live and where they are.

Right.

That can take you beyond just buying ads in the same magazines that everyone else is buying ads in or the same websites or the same TV programs. And you find, oh, they all congregate around this watering hole. And so, we can go be in that watering hole, whether it's sponsoring a specific event or just showing up at that event gives you lots of really unique opportunities to speak to them in a much more authentic way than just buying ads. And not only more authentic, but a lot less expensive oftentimes too. 100%. 100%. That's so interesting. So what's the— how do you, you know, when you're working with a company that, you know, maybe they don't really know their customer, how do you help them, you know, sort of overcome that? What are some of the tools that you use there?

Yeah, I mean, I go through some exercises, you know, the business, what is it, the business canvas model. And I work with them on that. I work with them figuring out, you know, who is their, what does their demographic look like? So we ask a lot of questions. What is the geographic psychographic profile of your clientele? What is that? You know, and really debate back and forth, bring data, you know, let's have a conversation and understand, are they national, international? Are you know, all different ages or genders or religions or whatever the case may be and figuring that out and understanding. So we know where they're at, what trade shows they're going to, or what, you know, if it's a consumer brand, what different television they're watching or media they're consuming and figuring that out together.

Yeah. And such great tools that you mentioned and big fans of those. The other thing that we see works a lot is just sort of creating a system or a process of interviewing customers, whether it's, you know, right after the sale but before you kick off. You get great insight, especially in the B2B space, around, well, what was the process that they went through for evaluating different solutions? How did they find your solution? Why did they choose your solution? What is it about it that was unique? And creating a process that regularly includes those interviews really helps to keep them, you know, very close to what the audience really cares about and very close to what that avatar really matters to them. It's such a powerful thing and really not that challenging to do. It's just about, you know, sort of creating a system that does it.

100%.

So super passionate about this and we could talk all day, but I got to be mindful of your time. So thank you so much for joining us. But before we let you go, tell us something that's on the horizon for you that you're really excited about.

Yeah, I mean, look, I'm just excited about all different, you know, I work with so many different companies and I think 2025 is going to be a year really where You know, with everything going on internationally, and businesses are really coming back here locally, and they're coming back to the US, and people are coming back to offices. I see that with a lot of my clientele. Isn't as much of the— and maybe you see something different, but I see a lot of people, you know, now are coming back into offices. There's more collaborative environment. And so there's gonna be a lot of opportunity for small businesses to grow. I think funding is going to open. And so it's how do we grow in the right ways? And so I really am looking forward to helping them to understand growth isn't just going out and getting a loan and throwing it at the first thing you see, but growth needs to be smart and growth needs to be something that's calculated. And we need to understand if we're growing for the right reasons and how we're going to grow to make it sustainable. So that's really what I'm looking forward to in the next year.

That's an exciting and inspiring vision for the next 12 months. So from your lips to God's ears, I hope that's what we see happen. But Michael, for folks that have been listening and, you know, loving what they're hearing about your work as an EOS implementer, how can they get in touch with you?

Yeah, my email address is michael.richman@eosworldwide.com. So michael.richman@eosworldwide.com, and we'll be back with you as quickly as possible.

Awesome. Michael, thank you so much for taking the time to join us today. I really enjoyed our conversation.

Absolutely. Likewise.

All right. Talk to you soon. Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story, send us a note. Let's schedule a conversation.