Marketing Uncomplicated — Why Most Businesses Stay Stuck: The Systems Every Founder Needs to Scale

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[00:00:00] Sacha: [music]

[00:00:00] Announcer: This is Marketing Uncomplicated.

[00:00:03] Sacha: Welcome back, everybody. Most businesses aren't failing because they lack ideas. They're failing because they lack structure. Today's guest is someone who steps into business and fixes exactly that. Owen Carhart is a managing partner of Business Optimization Group, where he helps companies move from chaos to clarity, often acting as a fractional CFO or COO to clean up operations, improve cash flow, and actually make businesses run like businesses. If you've ever felt like you're busy but not really growing, this episode is totally for you. So Owen, welcome to the show. It's so good to have you.

[00:00:39] Owen: Thanks, Sacha. Really pleasure to be here today.

[00:00:42] Sacha: So I'm really excited for this conversation because I think a lot of people listening are in that place where they're working hard, things are in motion, but something just isn't clicking. And I know that that is the most lucrative business that drops in where you can support them. But before we dive in, give us the real story. How did you end up doing what you're doing today?

[00:01:05] Owen: I had my own journey as an entrepreneur. I started my first business when I just out of college in 2009. I could not find work. It was the middle of the big market crash and I couldn't find anything. So I started my own business in finance and investments. And I went through a journey building that company and a journey subsequently after selling that company, building other companies. And I made a lot of mistakes. And I decided after my most recent exit that I would give consulting a shot, see if I liked helping other business owners. And I loved it. And so I decided that this is what I was going to do, likely for the rest of my career. I still own other businesses and I still take opportunities when they come. If something is really, really appealing, I'm happy to jump in because I'm an entrepreneur. I can't really help it. And it's just great to help other people in business avoid pitfalls and show them how to have a good time while making some money.

[00:02:17] Sacha: I love that. You said something interesting about helping businesses operate like real businesses. And I hear you say this a lot, not just busy ones. So what does that truly actually mean from that standpoint?

[00:02:33] Owen: It's a function of systemization. So creating systems inside your business that are repeatable and work. and are going to help you so that you can move through your workflows more quickly and help your customers more quickly and more efficiently. That would be, I say, the biggest thing. It's understanding what your limits are and how to grow and how to create systems that you can step back from and look at from a thousand feet in the air and say, OK, this is working, that's not working. So as an example, if you're a lawyer. You're excellent at practicing law. You know exactly how to practice law. But the business of running a law firm is running a business. It really has nothing to do with practicing law. Practicing law is the service. But running the actual company, understanding what your matter capacity is, for example, and when you're hitting that matter capacity, understanding when to hire someone. That's running a business. And that's what I would say is the biggest thing for people to understand is they have to create systems. Otherwise, they're just juggling.

[00:03:49] Sacha: And a majority of the businesses that you step into, I mean, what's the percentage of folks not having that true system in place? Is it like 90%?

[00:03:59] Owen: Yeah, I would even say all of them because that's why.

[00:04:03] Sacha: I'm not surprised. [voices overlap]

[00:04:05] Owen: But a lot of them do have systems in place, but maybe they're outdated systems. For example, I just started...

[00:04:12] Sacha: And they're just struggling to keep up with what they're utilizing.

[00:04:17] Owen: They're struggling to keep up, or they've been doing something for so long one way that they haven't modernized it. And that's like cutting with a dull knife. You know, if you, you know, not fun and dangerous, frankly, you should be sharpening your knife. You should be sharpening your tools and using new tools and seeing what other tools are out there to help you become more efficient. So I just started with one law firm. I work with a lot of lawyers, as you know, and they they're still using analog filing cabinets and Excel and. Nothing wrong with Excel. It works if you know how to use it. But they're outdated. And they have systems. They're just systems from the 90s. And there's a lot of businesses operating like that still.

[00:05:13] Sacha: Yeah, and with the play now of AI coming in through the stream, it's just making things more chaotic in the sense of... you know, what platforms to use. And it's not like the platforms that, you know, we're used to using, you know, from an operational standpoint, from a marketing standpoint, had not had AI systems in place already, even 10, 15 years ago from automating, you know, your operations and different types of things. But it's a lack of understanding and education in terms of what to bring in because there is so much out there.

[00:05:48] Owen: There's way too many. That's a big one we get. And then with... With AI, there's also a misunderstanding of what's going on with the privacy and the data and who knows what, what's being used for training the AI models. And so another thing that businesses are grappling with is if they're using AI to execute their tasks or to provide their service or to make their service more efficient is, is my client protected? is my client's information protected? Because if you're signing non-disclosure agreements and then you're putting it into, that you're dumping to AI, you have likely a problem there. You're probably in breach. Some companies don't care. They just want to get what they want to get done. And some are more mindful of that. But it's definitely something that everyone's looking at. Not just the options. There are so many options that can be very, very challenging to discern which one's the right solution for your business, no doubt.

[00:06:58] Sacha: Yeah, I think, you know, it's almost like you have to add a line item to your contract to say, you know, please don't dump any sensitive information into AI, you know, a breach of, you know. Not breach of interest, but a breach of identity or like whatever it is. I mean, because, you know, especially with law and with, you know, the medical industry, it is a touchy subject. And right now, the regulations around AI aren't really set in stone, per se. And a lot of people are whispering.

[00:07:34] Owen: Lack thereof, right? There really aren't a lot of regulations at this point in time.

[00:07:40] Sacha: Not at all, yeah. I think Europe is doing a better job than we are with that.

[00:07:47] Owen: I think with regulation, that's typical. Yes.

[00:07:51] Sacha: We're just the Wild, Wild West.

[00:07:53] Owen: We really have had, with AI and the adoption of AI, there are a lot of companies, the leadership maybe isn't ready to adopt AI, but their employees are using it anyway. So we're all clear there. You know, I know a number of of people working for companies who their company has a no AI policy. So they just use the AI on their phone to, you know, so here we have a whole other problem, because if you're as a business owner or not adopting AI, many of your employees may be even if you have a policy against it. And so that's that's another thing that. that people are struggling with keeping up with as it pertains to AI, especially protecting information and whatnot.

[00:08:49] Sacha: For sure. For sure. Especially if you're an enterprise company. I mean, it's just, it's, it's going haywire. What's the most common thing you walk into when you first look at a business?

[00:09:04] Owen: There are a number of them. So when we're doing, for example, business planning, one of the first things we're looking at is where is the business right now? And so we ask for a profit and loss, a balance sheet, cash flow statement. Many times, not all the time, but the smaller businesses, they don't even have those. So it's like, okay. How much money are you making? And what are you selling? Many times we will, and this is more often the case than not having the financials at all, we'll walk into a scenario where we're like, okay, let's take a look at these financials. The financials are using a standardized chart of accounts that is fine for the CBA to look at and understand what's deductible, what's not deductible, et cetera, but is not fine. in the sense that it's not telling the owner what's going on in their business. The profit and loss balance sheet and the cash flow statement, and there's many other reports that you can look at as well, but those three, they're the big ones, I think, that small business owners are looking at. Those three are the ones that tell a story. They tell us how much we're making and where we're making it should be telling us. where we're making that so if you have only one service then it's fine you can just have the hourly billing for example but if you have multiple products you want to know uh or multiple services that you offer you want to know where you're making your money where's all the money coming from uh what's the margin i'd have lots of businesses that don't know what their margin is um particularly professional services businesses they don't consider margin because it's just like time You have to consider what your margin is and figure out what your margin is so that you understand where your profit centers are, where to direct money. That is the number one thing that I run into when I come into businesses is they don't have meaningful financials. And many times that's the first thing we're cleaning up. So no meaningful financials, meaning lots of money, they're wasted, left on the table, not migrated in the right direction for the business.

[00:11:21] Sacha: So I'm sure you present, I'm sure you've presented some companies with, you know, money, X amount of money wasted, you know. Lots of wasted money.

[00:11:31] Owen: Lots of, even when we just start looking at recurring. Money being spent in areas that it shouldn't be spent in.

[00:11:38] Sacha: Yep.

[00:11:39] Owen: recurring payments that are not like subscriptions that aren't being used is a big one.

[00:11:45] Sacha: They set up from 1996 and have it canceled.

[00:11:48] Owen: And actually, that's one of the, I'd say one of the biggest advantages to working with us as well is we aren't a cost center. We find ways to save the business money or we save the business money by looking at risk and mitigating against downside risk for the company. Yeah, you have to pay us. But we generally, especially when I find that the financials aren't looking great, I almost always pay for myself or my company pays for itself. And even if you're not using someone like me, you're not hiring a consultant like me, look at your financials. People need to look at their financials and understand where their money is going. And they will find savings just by reviewing it quarterly. they will find it's being wasted because it just happened. That's busy.

[00:12:42] Sacha: Yeah, yeah. That's such an easy win on your end when you come in and you basically do that audit almost instantaneously. I'm sure they're either met with somebody's head needs to get chopped off and roll or it's what the heck have we been doing for X amount of months or years for that matter. It's a scary thought to know that. And I'm sure it's in the back of their minds because, you know, they're just moving and moving and moving and businesses is going and maybe business is doing well. So it's not as much as a strain versus it should be because why would you be spending X amount of money when you could cut that in half and actually save it and redirect it somewhere else? Right.

[00:13:27] Owen: Totally. Yeah, that's that's the biggest. The biggest is that one. The second, I'd say the second thing I run into and what we sort of referenced it earlier is antiquated processes.

[00:13:38] Sacha: Yeah.

[00:13:39] Owen: Antiquated processes, the systems or lack of processes, the system. We just do it. Okay. Maybe we should set up a workflow, you know, so that we, cause you don't just do it. It's likely that you're doing it the same way every time or a very similar way every time. It's just not documented. And it's just not understood that this is the way that it needs to be done. And you can't scale and grow unless you systemize what works, because you will bring other people in who will do it their way and it won't work or you won't like it or your customers won't like it. So documenting what's working and then understanding how that can flow. I went into one business that was spending 40 percent of their. 40% of their revenue was being spent on advertising, which is really, really high. I said, this is really high. I don't think the problem is how much you're spending nominally on advertising. The problem is that you're generating leads and the leads aren't being followed up with, called. You're spending money on something that you have a giant bottleneck in your business. And we don't want to see necessarily the amount of money from a dollar standpoint decrease. We want to see the revenue line increase and make your percentage marketing spend more in line with industry norms, which for this particular client was 15% to 20%. But that's another thing I see a lot of as well, especially when that business wasn't struggling. That business is making a lot of money.

[00:15:19] Sacha: Yeah, I know. So it's not struggling. They kind of just put it to the wayside and say, oh, we can probably get to this later, you know, which is the saddest part because, you know, just because you're not struggling doesn't mean that you shouldn't be paying attention to these little details, you know? I mean, it's the difference of taking you from where you are to the next level, right?

[00:15:42] Owen: Yep. 100%.

[00:15:43] Sacha: Yeah. It's similar in marketing when people are just hemorrhaging on digital ads and they're like, oh, you know, well, we're getting leads. And I'm like, yeah, but you're spending $150,000 a month and you're closing like a couple of leads here and there.

[00:15:59] Owen: Right. That's another thing that I find a lot with businesses, especially not as mature businesses or smaller businesses. is on the marketing side like thinking digital is the only place you can market like there aren't other avenues that you have to be doing digital and there are lots of ways to market your business you know you and i participate in networking organizations that's of course one way but there are still trade shows there are still conferences there are people who are looking for your products that are going to these things and people should really like open their mind a little bit when it comes to modalities for marketing yeah it's just like a creative yeah yeah just put a prompt in ai and say how can i how can i find where my ideal customer profile is hanging out and what type of you know partnerships i think are great they're cost effective they're you know low impact uh sorry low cost high impact i mean there's just You really do have to get creative.

[00:17:03] Sacha: So to sum it up in terms of what you come in and what you really see is no financial clarity, no systems, potentially cash flow issues, and maybe the owner is doing everything and he's hired people and they're basically sitting there and not doing anything. But then that's a whole other different problem in and of itself as well. Yeah, certainly also financial infrastructure.

[00:17:26] Owen: People lack financial infrastructure, discipline. I know a lot of business owners, they're very, very proud that the minute they get an invoice, they pay it. I train all of our clients, they don't do that. And the reason is because you have to understand when cash is coming in and when cash is going out. You should pay your bills when they're due, absolutely. But if the payment is not due for 30 days, then pay it in 30 days. just simple stuff like having a day of the week that you pay bills you know that yes other one that's that's an easy one the easy fix um and so just building that infrastructure as well people don't think of it a lot of times but building financial infrastructure operational infrastructure like i said systems is super important yeah i i love that because You know, it's it is it's not just, OK, I'm going to go and open up an LLC or an escort because I have this, you know, idea or I have this product or service I'm going to sell. And it's just, you know, I'm going to get to market somehow.

[00:18:33] Sacha: And then, you know, everything is sort of crumbling in the background, but could actually function so much better if you had all of these different types of things in place. Yeah. And then, you know, when you have these things in place, when you put them into place, you sleep better at night.

[00:18:48] Owen: Your clients are happier too because you can spend more time doing what you're supposed to be doing, which is delivering products and services to your clients. That's why you're in business. And that's where the majority of your focus should be is perfecting the service and the product. And the only way you can perfect the service and the product is by making sure you're not distracted, putting out fires all the time. You understand how that service or product is getting to the market and ensuring that it's of quality for your client. Otherwise, the client will leave. When the client leaves, then you lose money. And then we have a whole other set of problems if you're not delivering for your clients. It's extraordinarily important. And the systems will help you do that. You won't have crying in the shower moments anymore. Oh, it's like I'm breaking down the up and down roller coaster of a founder, a business owner.

[00:19:49] Sacha: Yeah, totally. Or there are like many anxiety attacks throughout the day. Let's talk about something people avoid, which is the conversation around money. We've been talking about it a lot, but where are business typically leaking money without realizing this? This could be ineffectiveness, inefficiency, poor pricing, lack of visibility, bad hiring. I almost think it's all of the above. Walk me through what you're seeing typically.

[00:20:23] Owen: Well, the first one we've already mentioned, and I wouldn't say it's number one, but since we've already mentioned it, I'll bring it back up, which is not canceling subscriptions. And I think anyone listening, you know, is...

[00:20:36] Sacha: I mean, there had to be an app that was started to help people plug that into their bank account and email systems to understand what kind of subscriptions they have.

[00:20:45] Owen: And that's what the app does. It reviews what you have, right? So like the... The solution there is that's a great tool. But also the solution is review what you have every quarter, at least every quarter. I mean, that's the minimum. That's not what I'm saying. You should be reviewing it every month, really. But every quarter is at least responsible and make sure that everything that you're paying for monthly is there. We here at our business, we keep lists of every account that we have. So if somebody leaves, if somebody, you know, finds a new job, we know what specific tool they may have been using for their function that nobody else is using. And we get rid of the, we don't need the tool anymore. Or we pause it until a new person takes that role. So again, that's infrastructure. Now it's like, okay, what account is that? What's the username and password for that account? You know, having access and knowing what's around, especially when you have other people. If it's just you. It's a little easier, but if you have 10 people, now you have 10 potentially different subscriptions. So are you still using? Are you still using that? So subscriptions is one. Another big one is not reevaluating vendors periodically. And so, for example, whenever I do the CFO work, we are getting insurance re-quoted annually. We don't just stay with the same vendor. We make sure that things change in the market. Prices come down and the price of the insurance typically goes up. But there are times that. the price comes down. Whenever you're getting re-quoted and you have your current carrier and the price is higher, okay, let's take it to market. So people aren't taking things to market all the time. Now, if you have a very special vendor relationship, then I can completely understand that. Marketing, for example, is a relationship business. I wouldn't recommend that every year you look for a new marketer because that can be disruptive. That's not what I'm saying. But that would be a terrible, really bad idea. But reevaluating from time to time, even on the marketing side, every few years, okay, is this relationship still serving us or do I just pay this person? So that's another one. We've found a lot of savings in taking things back out to market. I'll give you an example. We had another legal client. I don't know why. It's because I was working with the lawyers today, so I'm in helping lawyer mode. And they were using a translation service, and they were overpaying by $2,700 a month. A month. So they were very happy. When we were like, you can use this other one and you will save $2,700 a month. Those are two big ones. Hiring is trickier. One of the things you want to look at is...

[00:23:54] Sacha: Like internal hiring, you mean for full-time positions?

[00:24:00] Owen: Yeah. One thing, people will overhire. People overhire? And you want to look at a metric like, this isn't the only metric, but one metric that is good to look at is revenue per employee. Because that can give you a sense and look at what your industry's revenue per employee average is and see where you are on revenue per employee. And that's every employee, not just revenue producing employees, but all employees. And depending on what your average is, you should be able to see like. Based on that number, if it's time to hire someone else, if you're way below revenue, your average revenue per employee, then it's probably not time to hire someone else. You have inefficiencies. If you're way above your average, then you might be pushing your team too hard and it might be time to start looking at bringing someone else on to relieve, you know, let that release that valve a little bit. So that's another one that we were analyzing frequently.

[00:25:04] Sacha: Yeah. If someone was actually listening to the, you know, the full the full layout of, you know, not not like actually listening, but digging into the action steps, you know. Someone listening would take this and say, how can I build this out? So, you know, I don't even know my numbers. Where do I start, you know, without getting overwhelmed? So let's try and make this actionable. You know, what are top three numbers to track? Cash flow versus revenue, profit margins. You know, break it down for them how if they were to just go away from this podcast, you know, something that they could tangibly take away to just begin something. Start somewhere.

[00:25:49] Owen: When it comes to numbers, like what are the top three numbers to track? I mean, of course, revenue is going to be a big one. So most, I would say all business owners at this point, they know what their big expenses are. And this goes for personal finance too. They know what their lease is. They know what they're paying their marketing people. Yeah, the big stuff, they know what it is. But where things get out of hand is with the little stuff. And again, I don't mean to beat the drum, but the subscriptions. These tiny little things, they add up over time into thousands or hundreds of thousands of dollars. So the biggest piece of advice I would give them is you already know your large costs. You know what your monthly overhead is. But what are the things that you're not paying attention to that are adding up and eating your cash? Because it'd be much better to have that $10,000 in your pocket than wherever it's going now. And again, it's just a hypothetical number. But I would say, obviously, you need to track your revenue. And maybe to some that sounds ridiculous, but there are people who don't track their revenue. I had another client who I was like, well, what's your revenue? I don't know. They're making a lot of money, but they don't look at the happen and loss statement [wording uncertain in supplied transcript] every quarter or every month. They ask their accountant for their profit and loss statement at the end of the year to file the taxes. And that's the only time they look at it. Sometimes I walk into scenarios in business and this happens more frequently than not. And I'm like, how are you making money? It's shocking to me that you've been in business for 25 years and you've been profitable for 25 years. And you have literally like everything is wrong.

[00:27:53] Sacha: It's like the vision that I have right now is just like this bullet train and someone hanging on to the fire on the bullet train. And it's like, OK, we're moving. But it's like, you know, I could fall off at any moment.

[00:28:08] Owen: Yeah, it's wild. And that's why it's also so fun, because when you're working with these people, there are aha moments, there are light bulbs turning on moments, which those are fun to walk people through. And we've been doing it for some time now, and so I know when the light bulb's going to go off, which makes it even more fun. Light bulb's going to go off.

[00:28:36] Sacha: And now.

[00:28:37] Owen: Yeah, exactly. Yeah. So that's what makes my job so enjoyable, frankly. And I mean, people are making more money, even if they're not making more revenue, because as a function of us, they're putting more money in their pocket and they're being more efficient. And who doesn't like that? Everybody enjoys. I think most people, you know, that's a good feeling when you. when you accomplish something and you make something better.

[00:29:09] Sacha: I agree. So this is something people are always curious about. Well, at least I hope they're curious about down the road and if they've been in business for X amount of years, but it's valuation. And you and I have had multiple conversations about this. I've heard you talk about this, but I want to dive into it a little more. How should somebody think about... valuing their business, especially if they want to sell one day? Is this revenue versus profits? Multiple system increased value, owner dependency decreased value. I mean, what does somebody really need to be looking at to think about what is the value of my business?

[00:29:49] Owen: Owner dependency is a huge one. Well, this goes back to the systems and processes. I mean, it's going to come full circle. People think I'm like a broken record. I am. Systems and processes.

[00:30:03] Sacha: Well, it's almost like foundationally. It all boils down to a few things.

[00:30:10] Owen: Exactly. So the number one thing is that people mistakenly will not perform even a basic rudimentary evaluation on their business until they're ready to sell the business. This is a mistake because valuation tells you the process of digging into the business and saying it's worth X, Y, Z, whatever amount of money that is. It will tell you what's going well and what's not going well. And if you wait until the last minute to have your business valuated, then you don't have time to rectify what's not going well in order to get the most amount of money for your business. So owner dependency is huge, and we're going to be seeing over the next decade as the baby boomers retire, we're going to be seeing more businesses for sale than buyers of businesses. So this is going to be a classic supply and demand problem where people who have systems and processes in place, businesses where the owner can go to where we live in Florida. for three months out of the year and not work and come back to the business and it's still venerating revenue and making money because they have infrastructure and processes and people, those businesses are going to get higher valuations and the people selling those businesses are going to walk away with more money. Whereas an owner-dependent business is not going to get the valuation. And what we're going to also see is a lot of cash-flowing businesses. And this is very exciting for myself who... Who likes purchasing businesses is that there are a lot of cash-flowing businesses that are just going to shut their doors because no one's going to buy them. And I don't think anybody works their whole life building, crying in the shower, building their business to have to just close it. Some people do, and that's fine. But I think a lot of most people are going to want to get something for it or pass it on to their children. you know, legacy businesses. And when you do that, you don't want to pass on to your, a mess to your child, right? You want to be, you want something that's working. And so, so I don't know if I answered the question there, but I'm waiting too long to do the evaluation. Really, you should, you should be, you should be looking at the value and the systems, the processes in your business five years before you decide you're going to. to sell it so that you can fix everything um that's clean up the books and all that good stuff yeah make sure it's it's accurate because when someone like myself comes in if i'm working on on behalf of a buyer i'm not a broker but i do come in and provide analysis and i'll provide a valuation for the buyer and when i'm coming into your business and it's a it's a mess i'm gonna I'm going to beat you up on the valuation. You want a million? Why do you want a million? This, this, this, this, and this is wrong. Whereas if you work with somebody prior to the sale, prior to selling the business, and you really get, I have less to attack. Or if I'm working on behalf of a seller and I have to justify the valuation, I have defenses and a shield. to to say no this this is actually you're actually getting a deal you know it's one way to do it but um yeah it's really important to to look at owner dependency is huge it's a huge uh problem for uh for evaluation i would say the biggest um and then the second is not having any systems systems and processes yeah yeah yeah yeah what what the

[00:34:02] Sacha: What though then is the biggest mistake people make when they think their business is worth more than it actually is? Is it like emotional attachment? Yeah.

[00:34:13] Owen: Like, what do you mean my business is not worth $20 million?

[00:34:17] Sacha: There's ego, right?

[00:34:19] Owen: Attached to that. I've built this over the last 20 years and it's, it's gotta be worth X, Y, Z rather than just understanding like. You know, we're just looking at numbers. There's no emotions. If somebody is going to buy a business, there's no emotion in that or very little emotion. There shouldn't be much emotion because that's messy. Right. Um, we're just looking at the numbers and saying, like, this is what it's worth. So that, yeah, people thinking their business, people overvalue their businesses all the time.

[00:34:51] Sacha: And also, like, I mean, not to interrupt you, but in the VC world, you know, when we hear about startups that are like, oh, it's been valued at, you know, $2 billion or, you know, $12 billion. And it's like, sometimes in the VC world, companies haven't even made a profit and there's all of a sudden a valuation on them.

[00:35:11] Owen: Well, so tech, and this is happening mostly in the tech world. and i and this is a whole other hour-long podcast frankly but valuation methodologies in that world i have some significant disagreements about the way that they value these businesses um and uh and so again that's a whole different uh topic but yeah yeah you know you don't also like amazon though you you in in some senses it can be justified because look at amazon didn't didn't turn profit for i think Nine years or a decade. I can't remember exactly. Don't quote me on that one. But it's like, how is this worth any money? It doesn't make any money. Well, now I'm making a lot of money. So that's like, what's the potential market in this pro forma type of work, which, you know, that's where that's coming from. But yeah, so people get way over, way over. idealize what the value of their business is. And the simple way to mitigate that, especially small and medium-sized businesses, is to look at and find data on businesses locally that have also sold that are similar. And then you should get a pretty realistic look at what it's actually going to be worth if you compare it to apples. Another issue that people have is comparing apples to oranges. Like my, this is absurd, but you know, like my pizza shop is not, it should not be compared to an HVAC company when it comes to how it's being valued. I mean, that's obvious.

[00:36:47] Sacha: Yeah.

[00:36:48] Owen: There are people who are comparing the wrong thing when they're looking at the value of their business.

[00:36:55] Sacha: So at what point does a business need structure then? I mean, because people think I'll fix it later as we've talked about. I mean, Is it immediately? I mean, you know, just in terms of.

[00:37:08] Owen: Immediately. If you're starting a business, you want to have an idea of structure right away. And again, like most businesses, like they do have structures and processes. They just haven't like sat down and reflected on what they are and how they operate.

[00:37:27] Sacha: Yeah. Some people tend to think like structure can slow me down, you know.

[00:37:33] Owen: It shouldn't. Inefficient structures can slow you down, but efficient structures should speed you up and make you better at what you're doing and your delivery better. Everything should be better. I mean, yes, 100% structures can slow you down, but those aren't the right structures then. Now, there are times when management, so we're talking, you and I are looking at it from a business owner's perspective, but there are times where you You create structures to slow other people down, like your employees, or to make sure that your employees are doing things the way you have designed them to be done rather than their own way. Because that might not be the product you're trying to sell to your client. Because you want to have standardization of QA and QC. So there are many types of structures. that will slow employees down but that's because you have a you have a quality concern and you want to have a product that's standardized it's the classic example if i go to a restaurant 10 times and my steak's really good and then i go the 11th time and it's really bad i'm not going back to the restaurant people like freaking like oh well i'm not going to remember those 10 first great steaks but that last one was awful And so I'm not going back.

[00:38:58] Sacha: And it's an immediate I'm out.

[00:39:00] Owen: Yeah, exactly. So you want to mitigate, you create structures to mitigate against that. I was watching some, I don't frequently watch it, but I was watching Bar Rescue the other day. And the common theme on that show is. People not making like the cocktails different. So it's like I'll only have the espresso martini when this bartender makes it. The espresso martini should taste the same no matter who is making it.

[00:39:27] Sacha: Right.

[00:39:28] Owen: So these are just simple sort of silly examples. But the same thing's happening inside businesses all the time. And not to like reference another, you know, like a food industry, but even in the restaurant industry.

[00:39:41] Sacha: Um, you know, there, there are some cases, you know, specifically, I think, you know, with Miami is that when a restaurant first opened, it's, it's sort of like, and before it takes off.

[00:39:50] Owen: Right.

[00:39:51] Sacha: So it's almost like the first of the second week, you can have a really bad experience. And then, you know, somebody else goes a month in and they're like, oh my God, this place was amazing. And I'm so reluctant to go back because I went when they first opened and it was terrible and the service was awful. And, you know, so it's, how do you like, and it goes, it really, goes back to any business, because at the end of the day, if you don't have your marching orders for your stewards that are going to be serving people, the bartenders, the, you know, the chefs in the back and so on and so forth. And if you don't have that going right from day one, it's just it's fumbling until you get there. And it's a domino effect. And it's it's it's the same thing that we could say with any business.

[00:40:34] Owen: Yeah. And this is why it's incredibly important to have advisors. You don't you want you don't want to live in a vacuum. You want to be able to go to people that you trust, vendors that you trust, whoever, and ask for advice and take feedback. Feedback is a gift to help you improve. And don't take it personally. You need to improve. And having advisors helps a lot, even if they're unpaid advisors, people who you're competitors, right? You can learn a lot from your, your competitor can be your advisor. People have, people have weird views of competition. I, I've, another thing I find when I go into business that we have to crush this competition. Well, I mean, like, what if you have, like, why are you so mean? So like, let's like, take a step back. One of, one of my first jobs before I went to college during the summer, I worked for a rental. company and I'm a competitive person and there was another rental company down the road and I was like oh they must be terrible because they're not this rental company but actually like there were times when that rental company would have too much work and they would give it to the competitor you know we all well here to make so it's like you don't have to be weird about competition you do want to be better than your competition but your competition can also be your ally That's something people need to learn. I mean, that's why mergers exist, because two competitors decide to team up. And those sometimes can be very, very healthy.

[00:42:16] Sacha: Yeah, I love that.

[00:42:18] Owen: Yeah. So that's another thing. Anyone listening that hates their competitor, like, try to be nice to your competition.

[00:42:28] Sacha: Yeah. Go ahead.

[00:42:29] Owen: No, no, go ahead.

[00:42:31] Sacha: No, uh, what was the last statement? Because I have a feeling it's going to be a good one.

[00:42:37] Owen: Well, I was just, we had, you know, I also own a weight loss clinic. And one of the things that just drove me crazy was how hypercompetitive our competitors were. And to the point where they're doing things that are unethical, like giving reviews on our Facebook that. they had never been customers giving us bad reviews and this stuff this stuff happens and there's no need for all of that it's a weight we're a weight loss clinic do you know how much market in the united states there is for weight loss like you're not gonna get it all you can't even have that's true

[00:43:15] Sacha: You know, if you think how large the ocean is and if you compare that your ideal customer profile is sitting in the ocean, everybody can get a piece out of it.

[00:43:26] Owen: Exactly. So have a healthier view of competition. Yeah, totally.

[00:43:30] Sacha: I just went on there.

[00:43:32] Owen: It doesn't have to do with valuation. We started with a valuation and it bled into you. Now we're in competition.

[00:43:40] Sacha: Still great points, though. From a founder mindset shift, what's the hardest shift founders need to make? Is it letting go? Is it thinking like an operator? Is it not being the bottleneck?

[00:43:57] Owen: It depends on the founder. All of those scenarios occur in different personality types. I would say the biggest shift that everyone would benefit from is humility. Understanding that you are not perfect. No one is perfect. Your employees aren't perfect. And when you understand that, then you can improve. If you think you're perfect, you're wrong. And if you're incapable of being wrong, then you can't improve. So number one would definitely be humility. Number two is understanding where your knowledge... stops and when you need somebody else to help you uh it's okay to ask for help and again you're not it's and this kind of ties back to the humility like you okay you have run a business that doesn't mean you're an accountant i thought okay you you have a standardized contract that doesn't mean you're a lawyer right like understanding where you require expertise i would say is is i love that

[00:45:14] Sacha: Because a lot of people are standing in their own way to grow, you know?

[00:45:19] Owen: Well, they are. Yeah. And we, you know, we look for people, we look for founders, owners, management teams that are ready to accept help. It's really challenging when you're attempting to help someone and they still think they should know better, you know? And why did you hire us then? You know? What was the point of this exercise, if you're not going to? Because we're not there. When someone like the consultant is coming in to help you make change, it's hopefully because you realize that there are some changes that will help you to become more efficient, make more money, work less. Many times people bring us in to be like, I need to get me out of the weeds. improved lifestyle because that's what we're all doing this for a reason right it's it's I mean I many of us do enjoy working I enjoy working I'm sure you enjoy working too but we're working as a means to an end which is put food on the table and enjoy the things we want to enjoy because it requires money yeah totally

[00:46:31] Sacha: Owen, this has been super insightful and like a lot of key takeaways, you know, just to really go back and for even my own sake to listen and to know, you know, all the different things that. well, we'd need to really organize and think about, you know, and I love it because it's almost in parallel to a lot of the things that are done in marketing in terms of coming in, doing an audit, looking at, you know, somebody's, you know, ensuring that their house is in order, right? I mean, it's foundationally, I mean, you can't really live in a home if the bricks haven't been laid out properly because come a, no matter where that house is built, come a snowstorm, windstorm, tornado, or whatever it is, if there's cracks in the mold. old or in the structure, then the house is either going to topple down or you're going to sink. Right. So, you know, it's all about foundation. And, you know, I love that you kept saying, you know, I'm a broken record, I'm a broken record. And it's like you have to be because there are just simple aspects of things that need to be that that keep things in this in a stable manner that if you don't have them in the right place, you're. either going to keep moving yet at a profitable manner, but you're leaking or you're going to be stagnant and you're never going to get to where you had goals to get to because the systems aren't in the right place.

[00:47:48] Owen: 100%. And I want to thank you for having me today. I've really enjoyed our conversation and I hope.

[00:47:54] Sacha: [Editorial note: speaker and short interjection attribution from 47:48 to 48:46 is uncertain in the supplied transcript.] But before we let you go, because we're not done yet with you, we do something fun where we where we do a rapid fire, you know, and and, you know, we ask you to say one word, one habit, one myth about things. So whatever comes to mind when I when I ask you, just please go ahead and and respond. So one word you would use to describe what makes a business successful.

[00:48:20] Owen: Good people. It's two words, I guess.

[00:48:23] Sacha: Yeah. People, the good ones.

[00:48:26] [speaker unclear]: One habit every founder should build early.

[00:48:30] [speaker unclear]: Humility.

[00:48:31] [speaker unclear]: One myth.

[00:48:32] [speaker unclear]: What's one myth about scaling a business that people need to stop believing?

[00:48:39] Owen: That you need to spend hundreds of thousands of dollars on digital marketing.

[00:48:46] Sacha: Yeah, thank you and amen to that. Well, Owen, it's been super great. It was incredibly valuable, especially for anyone feeling stuck between working hard and actually growing. I love this piece to it. And it almost comes before marketing. So I will list everything in terms of how people can get in touch with you and to learn more about what Business Optimization Group does. So thank you so much for your time, Owen.

[00:49:13] Owen: Thank you, Sacha. And I hope you have a lovely evening.

[00:49:17] Sacha: [music]