What You Need To Know About Good Business Practice Through Hard Lessons

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com. and I'm really excited for today's. You have to look it up. Okay, fine, I won't make you look it up. It's our wise guest in all things business. But I'd be remiss if I and properly introduce my co host, Six Sigma. You know him, you love him. Scott Todd from scotttodd.net landmodo.com and most importantly, if not automating your Craigslist and your Facebook postings. Postingdomination.com thelandgeek Scott Todd. How are you, Mark?

I'm great. How are you?

Again, I'm extremely jealous of your video setup, but I'm gonna get over it.

I mean, look, I have nothing proprietary here. Well, I guess I figured out maybe I should write a book. Maybe I should write a book and like, teach people how to, like, set up their video like this.

I think you should, because I would buy it for sure.

I could put affiliate links in there, like all the cool gadget. Oh, man, talk about a passive income model. That's like. That'd be a great one, wouldn't it?

Maybe you and I should just do a podcast on some, some, some passive income models.

Maybe we should do something like maybe call it the Art of passive income.

That's not a bad idea. You know, it'd be even better if we had like a guest that's seen it all, done it all. Josh Patrick is our guest today from stage two, planning Calm. Josh has is basically just a business expert in all walks of life. Josh, welcome to the podcast. How are you, my friend?

I'm great, thanks, Mark, and thanks, Scott. Scott, I'm really jealous of your background, and I have to tell you why I'm jealous. You can see my background. This is me trying to be neat.

Yeah, well, that's why I had to get a camera that blurs everything out so that you can't see really, that I had a bring in and like, stage it. So thanks.

Well, it looks very nice, put it that way.

So, Josh, do us a favor and kind of tell us a little bit about your background and how you became the sagacious business consultant that you are today.

Well, I sort of had two careers. The first one started when I was 24 years old. I graduated from college, I went to work for my father, which lasted for about four weeks. He set me up to close out one of the branches that he had. Instead of closing out, I picked up Five new accounts. So he said, okay, you buy this from me. So I was off and running with my own little vending company, was 24 years old. I had one and a half employees, and 18 months later, I had 25 employees. That happened for a couple reasons. We picked up some very large pieces of business, and the second thing that happened was our major competitor went bankrupt, and we ended up buying their assets. So here I was, 24 years old, actually 25 and a half years old, with a business that was doing a million and a half dollars and had 25 employees. And this was 1976. So that's a long time ago.

And that's a million and a half dollars in revenue in 1976 is like 3 million today, 4 million today.

It's a big business about probably 4 or 5 million dollars today. And the worst thing that could have possibly happened happened to me, and that was, you ready for this? I was 24 years old, had a ridiculous amount of success for two years, and I actually believed it was because of my brillian, not pure luck. And the truth was, it was pure luck. And then reality set in, where we had a major embezzlement. We bought a second branch operation, which was arguably the worst purchase in the history of the vending industry. I went from having tons of extra cash to basically running out of money and not knowing why. And the reason I ran out of money was really pretty simple. I didn't realize that on a profit and loss statement, there is nothing there that talks about buying capital equipment and as you can imagine, vending operations because those great big machines weren't cheap. Even back in 1976, we were paying about $1,800 for a vending machine. And as a result, I got to do a turnaround. Now, I did this when I was 27, and I learned all there was to know about turnaround. I learned about banks. Oh, at the same time, my bank was going through a problem with the Office of the control of the currency. And for your listeners that don't know what that is, that's actually the regulator that looks at banks and say, are you behaving in an appropriate manner? Unfortunately, this particular bank wasn't. And as a result, I got redlined. And redlined means you get to join this wonderful world called the Workout Group. And if you've ever read the book called Bonfires of the Vanities, which was Tom, by the way, Tom Wolf just died today. But one of my favorite authors and one of my favorite scenes of all times in any book is that first 80 pages of excuse me, it wasn't Bonfire Advantages. The Man In Full of a Man in Full. And it's a scene in Georgia with this real estate mogul going through a workout meeting. And the goal was to make him sweat. And I can tell you from personal experience, that's what they tried to do. But along this way of all this stuff, I actually started learning something about business. Oh, by the way, I also have a BA in American history, which doesn't do a whole heck of a lot to prepare you to run a company. And my father was not the best role model for a company because he would go out and publicly humiliate somebody about once or twice a week. And I thought that was how you should manage a company. Well, that can work okay, if you have one operation and you're there all the time, which my father was. Well, we had two operations. I can only humiliate people in one branch at a time. So the people when I wasn't there weren't especially anxious of doing their best work and helping us become a great company. So I had all these challenges that sort of hit me at the same time, and all of them were my fault. Not any of them were caused by anybody besides me. Although my CPAs could have told me I had the embezzlement three months before they actually got around to telling me I had the embezzlement. But I didn't have controls in place. I didn't know what controls were. I. I didn't know how to ask a question. I didn't have good systems in place. We used to let our people make things up as they went along. These are all things that you should not be doing if you run a company. So I very rapidly figured out what I had to do to keep the company afloat. We renegotiate with our suppliers. Since the bank wouldn't loan me any more money, I went to all my major suppliers and said, look, here's your choice. You can watch me go bankrupt and you're going to lose all this money. Or. Or we can make this into a term note, and I'll pay you cash until I pay off the term note, which is what we did. So that's what Hilton did.

Scott, by the way.

Right? Yeah.

Which is like a great book. I don't know if you ever read that book about the man who bought. The man who bought the Waldorf. Josh.

I didn't read that, but it probably, you know, it's. My story is not atypical. It's a little Bit more dramatic because unfortunately I had those two really good years when I first got in the business and I thought it was because of me. So obviously I was a great business person. And as that worked out, it wasn't right. So we went on and we did a bunch of really interesting things in the food service company. We were the first vending company in the country to have a total quality management program. And as far as I know, we're still the only company that ever did that. We had a very interesting recognition program. And I love to tell the story, so I have to tell it is that one day I was walking through my office and my controller says to me, and by the way, she's a great story by herself, but we won't tell that right this second. Well, she says to me, says, congratulate me. I said, okay, congratulations. Now what am I congratulating you for? And she said, well, it's my anniversary. I said, okay, great. How long have you been married for? And she said, no, you idiot, it's my anniversary here at the company. It was her day that she started work at the company, which was about seven years before that. So I said, I was saying to myself, you know what day you started here? I mean, I don't know dates about anything. You know, I sort of know that. I think today is what, Tuesday. There's a Wednesday, today's Tuesday. That's about as good as I get with dates. So I went around the office, I asked the next three people I ran across, what day did you start here? And they all knew the date they started. I said, wow, that's a big deal. That's a really big deal. Or it must be a big deal. So what I started doing was we had these employee appreciation days once a quarter where anybody who had an anniversary during that quarter would be recognized. I tell a story about what they did that was good. They got a certificate that said, you've been with us for X amount of years. We had pins made for 1, 5, 10, 15, 20 year pins. We gave them $10 in cash for every year they were with us, up to $100. And we. What I figured out, it took me a couple of years to figure this out. Sometimes I'm not the smartest guy and a slow learner. But what I figured out was that I got lots and lots of appreciation and recognition because of my role as being the owner of the company. My employees didn't get any. And because about half our company was making, if not poverty, just above poverty wages because we had Food service workers. And that was basically $2 above minimum wage, not a great living wage. And they got by, but not greatly. Nobody ever said nice things about that. And this was often the first time they ever heard something nice. Now, I learned this by accident and along the way while I was, you know, in my business, which my food service business I owned for 20 years, started in 76, sold at 95. What I learned was that there are ways of running a great business. I learned it from personal experience. I took courses on top of courses on top of courses, and I've been reading a book a week, at least a book a week for 40 years, most of them around business.

So, Josh, let me just stop you there.

Sure.

When you get together with your buddies and you guys start talking about business.

Yes.

What would you say are your three most gifted or recommended books? Because if you're a big reader like me, that's really, really, you know, an interesting nugget of wisdom there.

Okay, well, this is not a passive income book, but this is, I think, the most important book for private business owners to read, which is Traction by Gino Wickman. It is a great system for running a business. It's a simple system for running a business. The Second attraction. Yes, by Gino Wickman.

Gina Wickman.

Yep. G I N O W I C K M A N and the other next book I really like a lot is a book called the Advantage by Patrick Lencioni. Now Lencioni writes business parables mostly. This happens to be a nonfiction work of his. And in the book he talks about values, four types of values, and how to use values in your business. And I'm a big believer that a values led business will outperform a non values led business 100% of the time. And if you spend some time working on your values, you can have a lot more fun running your business. The third book is highly effective the 7 Habits of Highly Effective People by Stephen Covey. And Covey is just a brilliant writer about that. And those seven habits are so important in making yourself effective and efficient at what you do. And of course, I have to have my fourth book, which is my book, which I just published in January. It's called A Fable about creating a Personally and economically Sustainable Business, which you can get on Amazon. And I sort of copied Lencioni's style in writing the business parable about a very, very, very, very dysfunctional family business where the owner needed to become operationally irrelevant to let his and was having a very difficult time with that. And when you get into passive income. The key to creating a business with passive income is you have to become operationally irrelevant in your business. And what that means is you're not involved in the day to day operations of what makes your business great. Somebody else is doing that. So true. And you, Mark, you've done a really good job with that, with your businesses.

No, thank you. You know, but it's still, you know, still a struggle. Absolutely.

Okay, so. So why was this struggle for you? Let's ask, let me ask you that.

What letting go is, is a struggle. Humility is a struggle. The fact that I have to surrender, the fact that maybe I'm not the best person for that job or that role, even though I'm really comfortable in it, even though I think I'm good at it, I, you know, even though intellectually I know I won't grow by letting go, it's hard to emotionally let it go and watch somebody maybe struggle with it for a few weeks when, you know, I think, why should we even have to struggle?

So I would submit that there's two reasons that people don't let go. One is they don't especially trust the people they're letting go to. And they've never figured out what specifically is causing a lack in that trust. And I have this thing which I got from Charles Green out the trusted advisor called the trust formula. And the trust formula is reliability plus competency plus intimacy, meaning you care about the other person divided by self interest tells you how much you trust somebody. And if you are finding you're out of trust with somebody, it's probably one of those four areas that's causing a problem. And if you can identify that area, then it gives you a chance to fix it. The other thing which causes people not to trust in my experience, is the fact that they don't have a culture of mistakes. Meaning that mistakes are not tolerated in their world, even though they happen all the time. And what happens is when you don't celebrate mistakes, people hide their mistakes. And when you hide a mistake and then you run across it, which you ultimately always do if you're the owner, I mean, people would say, do you have eyes in the back of your head? Because I would walk in right when someone's making a screw up all the time. And the truth is I kind of had this sense that something was wrong and I would pick up the lid and look at it. But because when I was younger and I was a screamer, I would always blame people when I made a mistake. I would call them Idiots. I would demean them. But as I got older and I finally learned that wasn't a very good way of being a manager, I would say, great, you made a mistake. What did you learn?

I can tell you right now, Scott, Todd really can relate with you because at his Fortune 300 company, I think that was his management style with his IT group. Scott, is that right?

Yeah.

I mean, like, look, when. When I. When I first entered the working world and I was a manager, I would do the same thing. You know, like, we can't do this. I would, like, you know, get emotional over it. And then I realized that, that that's not gonna solve the problem. It might relieve the problem for me right now. Like, I might feel better for it. But the end of the day, you know what, what you learn from making a mistake when. When you're getting yelled at is don't make the mistakes. I'm going to get yelled at.

Right? And if you make a mistake, hide it and make sure my manager doesn't find it.

I'm not going to get yelled at. Right? Because nobody wants to be yelled at. Right Then. Then as I grew in my career, I realized, like, okay, well, people are going to make mistakes. And then, you know, the best thing is, okay, when you make a mistake or you think there's a problem. You know, like, I get on. I get on to my kids about this all the time. Like, if you think there's going to be a problem or there is a problem that you delay telling me, then that's worse than telling me right off the bat that there's a problem, because then I can help you solve that problem or before it grows, as opposed to, oh, man, we got a big mess over here. So, you know, it becomes kind of an adjustment thing. Because, look, the reality is, is that I mess up, we all mess up. Employees are going to mess up. But, Mark, I think there's a common issue here that I see a lot. I see a lot with people in our own community, too, especially people that are new investors or new business owners. You know what it is? They are afraid to make even the smallest mistakes, right? Like, they're afraid of it, like, personally. So I think that what. What Josh is saying is about the trust. I don't think that necessarily it's. I mean, it could be about a trust, but it could be about, he said, like, a lack of mistakes in the culture. The reality is, is that no one wants to make a mistake. We all want to be perfect, but we all do make mistakes. So if you can just embrace it. Then I think you're okay letting it go faster because it's a mistake. Let's learn from it. Boom.

So you just said something key there. Let's learn from it. So, Scott, have you ever learned anything when you did it right?

Well, I learned that. Did I ever learn anything from doing it right? Yeah, I learned that the last time I made the mistake. I'm not going to do that again. Then I got it right. Right. So, like, you know, essentially, did I learn from doing it right? No, it just happened.

But so where do you learn from?

From your mistakes.

That's right.

Right. Well, that's the whole point, is that if you want to have. And I have a client that said, we have a learning organization, and I used to say to them, they say, no, that's an aspirational value. You want to be a learning organization, you're not quite there yet. But if you do make that switch where you can make mistakes into a learning opportunity and you really institutionalize it, where people are not afraid to let mistakes get out. And by the way, one of my mantras was, bad news doesn't get better with age, when people used to delay telling me bad things. The truth is, by making yourself into a learning organization where mistakes are celebrated, you're going to move a lot faster because you don't go through the seven stages of denial before you finally get around to fixing the mistake that happened, which, you know, I used to have that I said, you know, let's skip step one through seven or one through six and go recognize the mistake, fix it instead. Denial, anger, frustrate, whatever. The seven stages where I can't remember what they are now. Right. Right.

Yeah. So. So, Josh, what do you believe is normal or wise or cool that other people think is crazy?

Well, one is mistakes, for sure. You know, first time I tell people that mistakes are good, they kind of look at me like I'm from Mars. That's probably the biggie. The another is that you can't have a great company without values. I mean, they sort of intellectually get that, but they don't really emotionally get it. People think that I have a strong belief that employees are more important than customers. And first time I'll say that to somebody, they'll think I'm completely out to lunch. But I do believe it. In fact, I can tell you it's true. Just next time you fly in United Airlines, look at how happy your experience is.

Yeah, that's. That's a really good point. So what. What advice Would you give your younger self from, say, 20, 30 years ago?

Don't take yourself so darn seriously. You know, part of the reason that we don't, that we don't want to admit mistakes or we don't want to learn from our stakes or we don't let other people succeed is we just, we want to be the star all the time. You go a lot faster if you lead from the back.

I love that quote. That's a tweetable quote, Scott. Todd, you can go a lot faster if you lead from the back.

Let's tweet it.

So, Josh, one more question before we get to your tip of the week. What's been the best or most worthwhile investment that you've made? It could be an investment of money, time, energy or otherwise, believe it or not.

And this goes back to back when Xerox decided to become a learning corporation for whatever reason. I don't know why they did. I mean, Xerox went off in all these really interesting side ventures back in the 70s and 80s. As I mentioned, I came out of, I went into business with a degree in American history. I had taken one accounting course. I was a business law course. That was my one business course I took in college. So I really didn't know anything about finance. And Xerox had this course called Defender Challenger, which was, it basically taught you finance at a college level. And, and it was a self help program which started me down the road of doing all these self help books and self help courses that I would take over the years. But it taught me one, how to read a cash flow statement. And if you're in business, the profit and loss statement's nice and the balance sheet's nice. But if you're a small businessman, it's not about profits, about cash. So if you can't read your cash flow statement, you're very possibly going to have my problem, which is you can have a successful business showing a very nice profit, but running out of cash, which is what happened to me. So that was, I mean, the knowledge from that specific course was really valuable. But more importantly, it gave me a roadmap on how to go from being a mediocre lucky business person to being a good business person that I can identify the lever that needs to be pushed immediately to make a business successful is something that just is a unique ability. So starting down that road and learning how you, what the thought process is for doing that.

All right, great, great. Well, I think this has been a phenomenal podcast and your mentorship has Been really, really valuable. But I'm going to put you on the spot. I'm going to ask you for one more tip of the week. A website, a resource, a book, something actionable where the art of passive income listeners can go right now, improve their businesses, improve their lives. What have you got?

Well, this is kind of controversial because he's kind of a controversial guy in the business community, which is Bob Kiyosaki, by the way. I say Bob Kiyosaki. I actually knew Bob before he became Robert. I met him in 1982 at a new Age seminar that he was actually running. But that's a different story in the long one. But in there, he has a formula for an investment versus expense. And in his formula, it basically comes down to your house is not an investment, it's an expense. And the reason it's an expense, it doesn't have positive cash flow. So if you're going to be in a passive business and it doesn't create positive cash flow from day one, it's not a passive investment, it's a passive liability. So anybody, especially in the real estate business, you're buying rental real estate, it doesn't have positive cash flow. In my opinion, you are completely wasting your time and putting yourself at extreme risk.

All right, fantastic.

Scott.

Todd, what's your tip of the week?

Oh, Mark, you got to check out this. You gotta check out this plugin. It's called, it's a Chrome plugin and it can be found@ghostery.com. are you familiar with this thing?

I have, Yeah, I have it. It's great.

Okay, so you know what's great to me about Ghostery? And it's Ghost e r y ghost, ghostery.com. and what's great about it is one, when you install it and you go to a website, what it does is it kind of alerts you like, hey, all these cookies are tracking you and all this stu. And you can say block. I don't want to be tracked. Which is kind of cool. But I got a ninja technique for you, Mark. Okay, what you can do is you can go to a website. So like you can go to someone else's website, another company, for example, and then once the page loads, you can go in and you can start to look at like the ghost tree logs, to look at all of the stuff that they are doing, you know, like all the little plugins that they have going, all the little cookies that they're collecting, all the little, you know, like, okay, they're using Google Analytics. And on one of one of our land competitors. You know, I'm not gonna name which one, but on one of them I found that they were actually having a LinkedIn cookie for their LinkedIn ads. So then I'm like, bam. So use Ghost Ring not to like protect yourself. I mean you could use it to.

Like ninja, Ninja, Ninja marketing.

That's it, man.

Yeah, yeah, I'll go on on websites and I'll see. Oh, they're using Adroll for retargeting. Oh, they've got a Facebook pixel for retargeting. Oh, they're using Mixpanel or whatever it is. It's really, really interesting the data you can get from Ghostery. That's a great tip. Well, my tip of the week is learn more about the sagacious Josh Patrick at stage2planning.com. Stage two planning. Calm. Josh, any final words of advice or is there any questions that we should have asked you? We didn't ask you.

No, but I love Scott's tip of the week. I think it's an amazing thing. I love to spy on my competitors. And better yet, if you can come up with a guarantee that your competitors think you're nuts for doing, that's even better because two things happen. You get customers that you wouldn't have gotten and you drive your competitors completely out of their minds.

Mark, I gotta tell you, like, I like what he just said because I gotta tell you, I think our guarantee on land is nutty. Like 90 days money back guarantee. It's nutty, right? And it makes a lot of, it makes me feel uncomfortable. But I gotta tell you, and you have the same experience, you put it out there for 90 days and very few times does someone actually raise their hand, say I want my money back. And then when you do, you're like, whatever, here, just take it back. We weren't meant to be together anyway. And then I love when someone comes back and you know, like one of, I don't know, someone in the land selling business and you see like, oh, they have like a 30 day money back guarantee. It's like, come on man, come on. Because I know that my 90 days drives them insane and woohoo, they got 30 days. I'm like, hey, if you don't like my 90 days, go see their 30 days.

Oh yeah, absolutely. And I have a 365 day exchange guarantee. So a full year, it's nutty. I do want to remind the listeners that today's podcast is sponsored by GeekPay IO, the only set it and forget it software system that will automate payments between lenders and borrowers. Get your first note for free at the land geek.com and I also want to just remind you, the only way, the only way we're going to get the quality of guests like Josh Patrick from stage two Planning Comm is if you do three little favors. You got to subscribe, you get a rate, you got to review the podcast. Send us a screenshot of that review. To support the Land Geek Calm, we are going to send you for free the $97 passive income blueprint. I'm sorry, passive. I'm sorry. The Passive Income blueprint is free. The Passive Income Launch kit, which is $97 passive income launch Kit course. So please do that. Josh, are we good?

We are good.

Scott, are we good?

We're good, Mark.

All right.

I want to thank the listeners and let freedom ring. Thanks, everybody.