Führungsteam aufbauen: Wachstum über 10 Millionen Umsatz

0:00So, my name is Joseph. I do auto hail repair, very niche, hail storms, hail damage on cars, similar to roofing. >> Uh, I do 5.5 million. I want to be at 15 million next year. >> Cool. >> Uh, my biggest constraint is being under 10 million is people leadership. Um so my question is if I'm hiring basically a leadership you know seuite bench COO CMO that type of thing what have you seen as the most effective way to design compensation and decision- making structure for a team like this so that performance scales without eroding owner control or margins. So I think first off you might be mistitling.

0:38>> Okay >> because at fiveish million you're probably not truly looking for seuite like actual sea suite. Um you're probably looking more for like a a VP or director um in terms of like titling. >> Sure. >> Um that might help with the comp stuff. >> Um so thing one titles thing two um which role you want what what roles are missing right now? I would say uh I need a a better operations person like a right hand like you are the visionary and you need somebody likes.

1:09>> Yeah. >> Okay. >> Uh so you need an operator. >> Is that the main one that you need to hire right now? >> I would say right now that's probably the biggest constraint because everything seems to come back to me in terms of operations. >> Yeah. So I think it's somebody anybody who's done any kind of auto um even Yeah. Anyone who's done any kind of auto repair stuff might be helpful. Um, in terms of looking for my search, you'll probably do well, you there's a there's obviously a bunch of different sources you can do for getting getting talent. My bet would be the two most fruitful would be LinkedIn outreach.

1:43>> Okay. >> Um, and as silly as this may sound, even like simple like Indeed ads, um, you'll probably get lower quality candidates from the Indeed ads. You could still get lucky. Um, right at the level that you're hiring for is kind of the transition between when you run ads and when you start doing targeted outreach. uh for the level of person that you're looking for. Um and so I think if you targeted outreach, I would look for people who are in auto around the same size as what you're currently doing, who are in basically in that role and you say, "Hey, you want to do that thing that you did there over here?" And that's probably like honestly that's what it's going to be. And so from an outreach effort perspective, it's like you'll probably want to reach out to 500 or so. Um and if you're in struggling with your local area, you can offer a relocation package. um as kind of like a signing bonus to encourage them to come there. Um and that would probably help you solve um the personnel issue. U in terms of what I'd be looking for, you want someone who is a leader, not someone who because oftentimes you'll have people who are they they will trick will trick us entrepreneurs and they'll be like it's all the processes and systems and it's like those people hate talking to people and that's not what you need relief from right now. You need probably more people to handle Um, which means that when something bad happens, they go to them, not you. And so you need someone who you think your team would admire and look up to their character. Um, because if you find leaders, then they can lead almost anything. And the auto is just like a bonus. But a really good operator can just come into just about any business and run it because they're usually two levels above. Like they're not fixing cars, they're fixing people.

3:18And that's the same. >> Sure. >> Appreciate that. In terms of compensation for something like that at yeah level where I'm trying to [snorts] go, >> it's going to be it's kind of like a reverse sale. So the offer that you're g giving is going to be a proportion of the leverage you or they have over the role. Right? If you have someone who has less experience, they're younger, they're going to have less less leverage, and so you wouldn't have to give up as much. If someone's done this scaling process two other times before that and taken someone from 5 to 50 times, then they'll probably want more and it might be justified, right? And so I have hard I have a hard time saying like this is the hard and fast way that you should, you know, should do this.

3:55It's going to depend on the talent, but I would say like run-of-the-mill generic, you know, VP ops or director of ops uh role. Maybe a GM, general manager. It depends like I'd have to know a little bit more about what the day-to-day is going to look like. Um, but for someone like that, having a small tie to the overall profitability of the business is not a bad idea. Um, so a good way of doing that is like you run a a profit pool of 10 to 20% that you distribute amongst the leaders and then as the business grows that 10 or 20% that percentage stays the same but the pie increases and so they think like owners like you do which is like well we're going to bring this other guy in who's also going to be a leader and they have to be willing to bring cut some of their pie up the same way you do because they think it'll expand the overall pie. So it gets them thinking more like an owner in that perspective. But I like 10ish 15 sometimes in terms of uh profit share pools. And if you want to tie them in to the overall value of the business, the way that I have this conversation, this will go for just about everyone here, um is that you have uh cash flow, you've got sale, you've got risk, and then you've got control, right? And so these are the four things that come with equity. And most people say they want equity, but you're like, "You want risk?" And they're like, "No, no, I don't want risk." And you're like, "Okay, do you want control?" Because I'm not giving it to you. And they're like, "No, I don't want that." Like, "Okay, cool." Um, so that's off the table. That's off the table, but you do want cash flow and you do want the potential for an exit. And they say, "Yeah." You're like, "Okay, cool." So, we'll have a profit share pull here to help you with this. And then what we'll do is we'll, you know, you'll have a call a 4% um profits interest in the business.

5:34you'll get 1% uh per year. I'm making numbers up. 1% per year. Um it's phantomed up, which means if they leave, it comes back. And then in the time that a sale occurs, they would get to recognize whatever percentage they have. Or you could accelerate the whole 4% if you wanted to um in the event of a sale. But it's only if they're there during the sale and they'd been there for at least 12 months or 24 months or something like that. And that gives them the best of both worlds. The only downside of that setup for an employee is that they have to pay regular income taxes on the sale bonus because it'll be structured like an option. If they didn't want to do that, they would actually have to pay taxes on the equity that they got and not get anything else, which most people don't want to do.

6:14>> Gotcha. And that that you're you're specifically talking about like a COO. That would be like managing multiple shops or upper ops under them type of thing. >> No, you want I mean if you're going to do this, this is somebody who's going to drive, >> right? For sure. And then for the ops managers themselves, would you still do that? >> You could do that on a you could do it on a basis on a shop basis. Yeah. >> Okay. So that would be separate from >> Do you have any separate LLC's? >> I don't.

6:38>> Okay. Well, something to consider. Um you could still as if you run the P&L separately, which you probably do as long as the P&Ls are separate. You could still calculate it that way. But and they're I'm assuming they're brick and mortar, right? Um I have found So who hears brick and mortar? Can I get a hands real quick? [snorts] Okay, perfect. Yeah. So, this will apply to more than just two. Um, if you were if you were doing private expansion, which you are, right? You own all the shops. I have yet to see someone do like an exceptional job expanding without having the equivalent of a an operator boots on the ground in each store that has no tie to the bottom line. So, I would strongly encourage because that and that doesn't mean that you go to all the people you have now and say, "Here's profit share."

7:22Um, it's more like what type of people do I need to what caliber of person do I need to actually have this run so that I don't need to have all this handholding happening and that type of person might require profit share which then allows you to truly decentralize these and actually have them run kind of more independently which will allow you to expand. >> Gotcha. And then when you talk about like a 10% to an ops manager so they have that is that of like revenue increase or the total amount. >> So there's two ways that I like structuring these. We're going to go as deep as you guys want. So there's two ways I like structuring these. Number one is if you have a which I don't think will be the right one for you because in a so for the people who have fast growth businesses that are not geographically constrained I like doing this which is that you can have a much higher percentage say I'm going to give you 30% of the growth that we had from last year and that becomes the watermark for next year and then you got to grow it again but I'll give you a fat percentage of whatever you grow it in a in a geographically constrained business like a local business I don't I don't do that because they can't it's tough for them to actually grow then they get really uh discouraged And so I'd rather have them have a profit share percentage profit share of the profit not revenue um that they're going to get and I reverse engineer what I think OT on target earnings should be. So if I think that the caliber of person who I would need to hire for this role should make $150,000 a year because I get questions like should I do 5% or 10% like I don't know what the profit is and you know how how much effort like there's a lot of variables.

8:48>> 10% would be a lot. >> Okay. So what's the what is the profit for 10% for one store? >> Um I mean margins are 40%. So >> okay well no but like what's the >> yeah well I have I have four locations but one of them is where 80% of the revenue is coming from right now because it's storm related. >> Yeah >> sense. So um monthly we're talking monthly dividing >> I won't tell them. [laughter]

9:14>> I'm just thinking in terms of that one store >> we'll do the other three whatever. >> Okay. So, >> so close to 200 a month >> in profit. >> Yeah. >> For one store. >> Yeah. >> Okay. You said you were doing 5.5 million, right? >> Yeah.

9:38>> Huh? It's 5.5 million. Four stores. Each one's doing $200,000 a month in profit. >> No, I was just I was picking one. I said cumulative >> Oh, cumulative 200. Yeah, that's okay. Got it. So, let's say divided by four, you've got $50,000 a month in profit that's coming in per store. Okay? So, $50,000 a month in profit um per store. If they had 10%, they would get $5,000 extra a month. They get 60 grand extra.

10:03>> If they're making a hundred and they can make 160 great >> two to 400 would be average next year. The only reason why I have the four is because they run without me and it's just there. >> Fundamentally, we just reverse engineer OT. It could be 5%. I like the percentage doesn't matter. I just want to reverse engineer how much money do I think this person should make. If they're bad, they'll get fired. If they're mediocre, they make on target. And if they crush it, I want them to make this much money.

10:29>> Sure. >> So, I just put those lines in the sand. Take that money and reverse in percentages. And then that's what I present. >> Okay. Makes sense. >> No, appreciate you, man. Congratulations. [applause] >> Does that help somebody else? Yes. Okay. Real quick, I'm going to show you the exact 10stage road map from zero to 100 million plus that less than 1% of companies finish I've now done multiple times. And so I can say with a lot of confidence that these are the stages as headcount increases that you need to get through. And I broke each of these down by eight different functions of the business, what the constraint feels like, like what are the symptoms of it when you're going through it, and then what steps we actually took to graduate.

11:06And we've done this across software, physical products, uh, service businesses, brick and mortar, all of this, and it works. And it's my gift to you. It's absolutely free. And so the link's in the description, but you just go acquisition.comroadmap. Just enter your info and it'll spit it right back to you. Offering.