Führungsteam aufbauen ohne Kontrolle und Marge zu verlieren

0:00Unternehmer/Gast I do auto hail repair, very niche. Hail storms will damage our cars. Similar to roofing. I do 5.5 million. I want to be at 15 million next year. My biggest constraint is being under 10 million is people, leadership. So, my question is if I'm hiring basically a leadership, you know, C-suite 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?

0:34>> So, I think first off you might be mistitling. >> Okay. >> Because at five-ish million you're probably not truly looking for C-suite, like actual C-suite. You're probably looking more for like a a VP or director in terms of like titling. >> Sure. >> That might help with the comp stuff. So, thing one, titles. Thing two, which role you want to What What roles are missing right now?

0:59Alex >> I would say I need a a better operations person. >> Okay. Like a right hand, like you were the visionary and you need somebody to like Okay. 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 is everything seems to come back to me in terms of operations. >> Yeah, so look at somebody Anybody who's done any kind of auto even Yeah, anyone who's done any kind of auto repair stuff might be helpful.

1:27Alex 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. >> Okay. >> Um and as silly as this may sound, even like simple like Indeed ads. You'll probably get lower quality candidates from the Indeed ads, you can still get lucky. 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 for the level of person that you're looking for. Um And so I think if you do targeted outreach, I would look for people who are in auto around the same size as what you're currently doing it who are in basically in that role and you say, "Hey, you want to do that thing that you did there over here?"

2:10And that's probably like honestly that's what'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 your struggling with your local area, you can offer a relocation package. Um it's kind of like a signing bonus to encourage them to come there. Um and that would probably help you solve the personnel issue. Um in terms of what I'd be looking for, you want someone who is a leader, not someone who because often times you'll have people who are they they'll trick they'll trick us auto owners. And they'll be like, "It's all the processes and systems."

2:47And it's like those people hate talking to people and that's not what you need really 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. As auto is just like a bonus, but a really good operator can just come into just about any business and run it.

3:12Alex Because they're usually two levels above like they're not fixing cars, they're fixing people and that's the same. >> That's right. Appreciate that. And in terms of compensation for something like that at that level where I'm trying to get >> It's going to be It's kind of like a reverse sale. So the offer that you're giving is giving is going to be proportional to 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 five to 52 times, then they'll probably want more and it might be justified, right? And so I have hard I to a hard time saying like this is the hard and fast way that you should you know should do this. It'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 role, maybe a GM, general manager, depends like I'd have to know a little bit more about what the day-to-day is going to look like.

4:06But for someone like that having a small tie to the overall profitability of the business is not a bad idea. So a good way of doing that is like you run 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 same way you do because they think it'll expand the overall pie.

4:37So gets them thinking more like an owner in that perspective. But I like 10-ish, 15 sometimes in terms of 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, is that you have cash flow, you've got sale, you've got risk, and [snorts] then you've got control.

5:01Right? 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 cuz I'm not going to give it to you. And they're like no I don't want that. And you're like okay cool. 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 pool here to help you with this. And then what we'll do is we'll you know we'll have a call it a a 4% um profits interest in the business. You'll get 1% per year. I'm making numbers up. 1% per year.

5:37Um it's phantom though 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. We could accelerate the whole 4% if you wanted to in the event of a sale, but it's only if they're there they're 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 set up for an [snorts] employee is that they have to pay regular income taxes on the sale bonus cuz 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.

6:12>> Got you. And that that your your specific is talking about like a COO that would be like managing multiple shops or upper ups under them. >> Yeah. No, you want I mean so 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 on a shop basis, yeah. >> Okay. So that would be separate from >> Do you have the separate LLCs? >> I don't.

6:37>> Okay. Well, something to consider. Um you could still as if you're on 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 assuming they're brick and mortar, right? I have found So who here is brick and mortar? Can you raise your hands real quick? Okay, perfect. [snorts] Yeah. So this will apply to more than just you. 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 a 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.

7:14Alex So I would strongly encourage cuz that And that doesn't mean that you go to all the people you have now and say, "Here's profit share." Um 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 hand-holding 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. >> Got you. 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?

7:45>> 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."

8:11Alex In a In a geographically constrained business like a local business, I don't I don't do that cuz they can't It's tough for them to actually grow it, and 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 OTE, 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 [snorts] a year cuz I get questions like, "Should I do 5% or 10%?" Like, well, I don't know what the profit is, and you know, how how much effort Like, there's a lot of variables.

8:47>> 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%. >> Okay. Well, no, but like, what's the How much >> Well, I have I have four locations, but one of them is where 80% of the revenue is coming from right now because of storm-related. >> Yeah, okay. >> Makes sense. So, um monthly, we're talking about monthly, so we're dividing >> I won't tell him. >> [laughter]

9:13>> No, I'm just thinking in terms of that one store over over >> the other three. Whatever. >> Okay, over three, so So, close to 200 a month. >> In profit? >> Yeah. >> For one store? >> Yeah. >> Okay. You said you're doing 5.5 million, right? >> Yeah. >> Huh?

9:38It'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 accumulative >> Oh, accumulative is 200. >> Yeah, that's what I mean. >> 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 hit 10%, they would get $5,000 extra a month. They get 60 grand extra. If they're making 100, they can make 160.

10:05Alex 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 >> Yeah. Fundamentally, we just reverse engineer OTE. It could be 5%. I would 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. >> Sure. >> So, I just put those lines in the sand, take that money and reverse in percentages, and then that's what I present.

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