Warum die Einstellung eines COO oft schiefgeht

0:00Oh, Peter from Norway. I've been been a follower of since the sub 100k days. Nice. And firstly, I would like to thank you for the opportunity. Thank you, man. I've run uh uh hunting and fishing company uh equipment from two brick-and-mortar two brick-and-mortar stores and and an e-commerce site.

0:28So, I built that from a 4K student loan. Nice. And I didn't take any pay for 2 years. Provided three 3K a year to fund inventory. And and since twins 2015, we've been on top with three profitability and earning each.

0:52I'm sorry. I have a terrible feedback. Yeah, I know. Sorry, brother. Okay. Yeah, in 2025, we did 6 and 1/2 million dollar revenue. A million one EBITDA. Okay. Based off of a 39 and 1/2 percent gross profit. Got it. Uh I have 60,000 active con- customers out of 143k total. Mhm.

1:20And a market size of 100 million dollars. Okay. So, we're decent decent cash cow, but I'm still the chief chief everything officer. Mhm. Working 80 to 80-hour weeks. Mhm. I have a massive skill gap in attracting, hiring, and and onboarding employees, which is stopping me from scaling. Mhm.

1:44If you were in my shoes, what would be the exact sequence of building a people people playbook so I can stop being a bottleneck and build a sellable asset? What takes the majority of your time? Everyday tasks. More specific.

2:08Talking to customers, taking out the trash, doing uh more or less every no one else does. Yeah. So, I mean, in terms of sequence, the first thing I would do is be able to answer that question clearly with a time study. And so, the reason I do time studies is because if you have a 15-minute increment, what appears to be random things tend to fall into patterns. And so, if you do it 15 minutes every single day for 1 or 2 weeks, like we do this with new CEOs when we acquire a company, the first thing we have them do is do a time study because that way we can actually tell whether like, "Hey, my head's on fire day-to-day operations." It's like, "How do we translate that?" Because what we'll do is we'll see all the activities that you're doing and say, "Okay, is there a role right now that exists that encompasses the vast majority of the stuff?" And it might mean that you have one or two roles that are missing or three roles that are missing um within the business. I do understand that you got 1.1 million in EBITDA and it's like you don't want to hurt that. But, the idea would be can we replace, you know, 2/3 of your time so we can free up some more of it so we can create more profit in the business with the time that you have doing higher leverage activities?

3:22Yeah. I'm I've been look look looking at at hiring a chief operations officer. Okay. >> [sighs] >> So, chief, you know, head of ops is not necessarily a bad role overall, but a lot of times it tends to be a junk drawer. And so, if you When I say junk drawer, it's just like you open it up and there's just a whole bunch of stuff inside of it. And so, if you want to hire that person successfully, you're going to have to really clearly define all of the activities that you want them to do. And so, either way you're going to have to start with this time study to get a better hold on the many things from taking the trash to talking to customers that you're currently doing. I would also bet that there's some stuff that you're doing right now that you could also just choose not to do and the business would be okay. So, like when you're talking to customers, what are you doing it for and how often?

4:12Basically, more or less every every day. Yeah, but for what? What reason? >> it Usually, when things start to [ __ ] Okay, so customer So, this is customer service. Yes. Okay. And so, do you have no customer service reps? I do. I have one guy, but he is he's he's he's too young. Okay.

4:36I would I will I will How old is he? 24. Okay. Well, like right now there's a bunch of 24-year-olds who have like billion-dollar companies, and so I don't think he's too young. Um I would say that you probably haven't trained him on the skills required because a customer service role, it's like there's five things that are happening in that role, and we just need to give them a script for how to handle all those things and then train them on saying the script.

5:02Okay. Because there's no like 24-years-old, I mean, my god, that's a it's a grown man. Yeah, but he's still a kid. Well, I mean, if you treat him like one. >> [laughter] >> Is it your kid? Okay. No, it's the son the son of a really good friend of mine. Yeah, then maybe you treat him like a kid still, right?

5:28But I mean, fundamentally, like he probably wants to do a good job, and you probably have to empower him to do so cuz if every every time something gets difficult, you jump in rather than Basically, I'm going to say this and don't take offense to it, okay? You're being lazy by jumping in to solve the problem for him rather than doing the work of training him to do it for you because in the short-term it will cost you more time and frustration than it does in the long-term. And so right now you jump from short-term fixed to short-term fixed to short-term fixed all day long rather than taking the excess time in the front end and the risk of what happens if this person leaves after I train them.

6:08Yes. So I think like that's once you talk to customers so that's like okay if we train this guy up that will take off some portion of what you're already paying him to do. So that'll free up your time and you don't have to pay anymore. What else are you spending your time on? Marketing, uh purchases. Okay. When you say you mean marketing to get customers to buy, right? Yes. Okay. Is purchases something different or you like are you buying material? Like what are what is that a separate item or are you saying marketing to get purchases?

6:40>> No no no merchandise. Like purchasing merchandise. Yes. Okay. Got it. So you So you do the buying and you do the marketing to sell the products and you have a customer service team so we can offload some of the customer Do you have anyone who helps you with helps you on the purchasing? Some. Okay. What stops them from doing all of it?

7:05Uh on the larger scales larger scale stuff. >> Yeah. Especially the ones that are above probably 100k a year. Yeah. I want to make sure that I I hold in those myself. Okay. Because the the the main the the main scaling of the business has always been the main the gross margin. Yeah. I hear you there.

7:30So um by percentage of purchasing activity what percentage are you doing versus the guy you've hired? Total purchasing a year? Mhm. Probably 55 to 60 6 60% Is you or him? No, me. Got it. Is that by dollar amount or by number of transactions you have to buy?

7:58No, that's dollar amount. Okay, so he's still doing the majority of them and then you save the few bigger ones, but they tend to be the lion's share, I'm guessing. Yes, sir. Okay, so is that a huge time suck for you? How many How many hours a week do you say would you say? Uh it depends on time of year because it's such a seasonal seasonal bus Yeah. business, so I would say this time of year for first quarter probably half of my time.

8:24Got it. That's a lot. Okay, so the the documenta- like I'll just tell you right now, it sounds like the big issue is documentation and training. So, the process Yeah, so the process that you go through is you have a decision tree. You haven't written it down, but it's in your head, right? And so what you have to do is basically walk through how you make the decisions for these purchases around pricing. Like you just it's a And it You know what it is? It's a lot of if-then statements.

8:56And I know this because I have to train RAI on how I make business decisions. And so if you can imagine how how difficult it is for me to to train a business generalist, right? They have to be able to answer something for a restaurant as much as an e-commerce as much as a an HVAC business as much as an internet marketing business or an agency or course seller or school community. Like it has to be able to know all of these things. So, how do you train something like that? Well, you start with decision trees. Are you supplied you know, constrained or you demand constrained?

9:25Like for you, it sounds like the issue overall is that um I mean you said he was a cash cow, so I'm guessing it's flat-ish, right? Um and the real constraint for you right now is uh you could sell more, but you can't really because the supply constraint is you. Like the supply of your time is basically zero, and so as much as you want want to ramp, you can't because you are the bottleneck right now. Right? Oh, yeah. I'm the bottleneck. Yeah. And so fundamentally, and this is like this will be my easy litmus test for you, is that if you look at your calendar and your activities do not change from last week to this week, nothing is going to change.

10:05What's your head count right now? 14. 14. So, I would bet right now probably a third of your time is going to probably have to be dedicated to retraining or really first-time training your staff on the things that they should be doing, but that you're jumping in to do for them. Yeah, it it's it it's both uh um they're a low and secure, and that's probably for a more because of poor training. Yeah.

10:41I mean, it makes sense. If you haven't trained somebody, they're going to do a bad job. I agree with you. You know what I mean? Of course. Like I said, it's it's it's uh Well, how do we get over this insecurity thing? How do we get over this trust issue? Right? You've been wrong before. Somebody made a mistake. You gave up you you you loosened up the reins. They [ __ ] it up, and they lost your money, right? Yeah. Right. And so you basically have two paths. Path one is you keep doing what you're doing, and you're going to keep making money, which is relatively and reinforcing, and I'm I'm like but you will not build a sellable business, so you'll keep working hours 80 hours a week.

11:16Which, let's be real, a lot of people do that, and they just and they just kind of like moan their way through it, right? The other option is that you're going to lose more money in the short term. But you'll be able to learn the skills of training a team, and they're going to make mistakes, but you will eventually be able to get above it so you can actually make the business grow and make more money. Okay. But think about this.

11:41>> how like a uh Yeah, think about this. Think about how many mistakes you've made over your career that you've learned from. A lot, I'm sure, right? Yes, sir. And so I think it's unfair to ask them to know everything you know without having made any mistakes of their own. Of course. And so I think honestly it's just a a small shift in perspective. I would look at my schedule. So I really would. I would start with the time study.

12:07I would look at all those activities. And the first question once you finish that time study, which is and I'll just say it really clearly cuz I have some people watching, is open up an Excel sheet, set a timer on your phone, have it say Monday through Saturday Monday through Sunday, and it starts at whatever time you start working, and you do 15-minute increments for each cell. In each cell, you set a timer on your phone. Every time the 15 minutes goes off, you write down what you did. At the end of the week or 2 weeks, next to each of those columns, you color. You can go red, yellow, green, whatever you want to do, but there's going to be one bucket that is a delegate bucket, which is these are jobs that I'm already paying people to do that they're not doing. So I need to delegate, and then the next step is going to be training. I've got to train those people on the things that they should already be doing in their job.

12:51That's going to open up some of the time. And that realistically is going to be the first real step, and that might take a month or 2 months. That's the first thing we do. After we've delegated more, now you're going to have a little bit of bandwidth. Now in that delegation and training process, you're going to have to give them a decision box. Meaning, some things should come to the owner, for sure. Someone's about to sue you and they get you on the phone, like that should probably come to you, right? Is that going to happen a lot? Probably not, right? And so the idea is you can make decisions up to X amount of money.

13:19And if someone's upset, you're going to do one of these three things. And you're going to start with thing one. If they don't like that, you're going to thing two. If they don't like that, you go to thing three. If they don't like that, you can talk to me. But, at least that covers 80% or 90%. Right? On the purchasing side, it's going to be the same thing. You're going to have a decision box. This is the tree. We always ask for a second, you know, a second number. If the number This is what it was last year. It has to be within 6% of last year. And if it's not, send them this email or say this text back to them. And we keep cuz you have a way that you grind people.

13:48Right? I mean, it's just negotiating. You have a way that you grind people and you just have to teach them that that way of grinding them. And so, you'll teach them on the on the purchasing side. And then we have to go task by task until what's left over is the few things that you don't have rules for. And then with that left over amount, then we can instead of hiring three more people that you're not going to train, we can hire maybe one person actually gets the job done. And now the vast majority of your schedule's open. So, you can either grow this business or sell it. Okay.

14:15But, it's uh you're going to I mean, this is going to be all people [ __ ] which I'm going to guess you're not like the most talked about, but this is just the game. I mean, here's the good news. You're You're in physical product sales. That has less head count than a service business. In a service business doing six and a half million, dude, you'd want to kill yourself. This is I mean, 14 you know, I mean, like >> [laughter] >> you would you would hate it. So, this is the game though. Okay. Thank you. No, I appreciate you, Edar. Thanks so much.

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