Expert Business Advice from Trusted Advisors: Jonathan Goldhill, The Goldhill Group, John Ray, Ray Business Advisors and Business RadioX North Fulton, and Tim Fulton, Small Business Matters (Organization Conversation, Episode 45)
Host Richard Grove welcomed three seasoned business advisors, Jonathan Goldhill, John Ray, and Tim Fulton, to discuss issues small business owners face as they seek to thrive in today’s economy. They discussed the talent shortage and how to deal with it, how to manage inflationary pressures, pricing, organizing your business as if it were a much larger enterprise, preparing for an exit, and much more.
The Goldhill Group
Business coaching, mentoring, and consulting to growing companies with 10 to 150 employees in family businesses, construction, and service-related businesses. We guide leaders and owners to grow their businesses and enjoy the journey more using proven processes, systems, and tools that both accelerate growth and guide people to more freedom and fulfillment.
Jonathan Goldhill, President & Business Coach, The Goldhill Group
Jonathan Goldhill is a masterful business coach and personal strategist specializing in guiding next-generation leaders of family businesses to scale up their business as they take control over the leadership and ownership of the family business.
Jonathan left New York for California at age 20 after his family’s large, privately-held men’s apparel manufacturing company—started by his great-grandfather—sold to a conglomerate in its third generation of family ownership.
Within ten years, Jonathan had established himself as the go-to expert for entrepreneurs looking to find their version of freedom.
Today, Jonathan brings thirty years of experience to his clients, advising, coaching, consulting, training, and guiding entrepreneurial and family businesses.
John Ray, Ray Business Advisors and Business RadioX North Fulton
John is a Studio Owner, Producer, and Show Host with Business RadioX®, and works with business owners who want to do their own podcast. As a veteran B2B services provider, John enjoys coaching B2B professionals to use a podcast to build relationships in a non-salesy way which translates into revenue.
John is the host of North Fulton Business Radio, Minneapolis-St. Paul Business Radio, Alpharetta Tech Talk, and Business Leaders Radio. house shows that feature a wide range of business leaders and companies. John has hosted and/or produced over 1,500 podcast episodes.
John also owns Ray Business Advisors, a business advisory practice. John’s services include advising solopreneurs and small professional services firms on their pricing. John is passionate about the power of pricing for business owners, as changing pricing is the fastest way to change the profitability of a business. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.
John Ray is the host of The Price and Value Journey, a podcast aimed at solo and small firm professional services providers. The show covers pricing, business development, and other key aspects of building a professional services practice, as well as interviews with industry leaders.
Small Business Matters
With over 30 years of experience, Small Business Matters (SBM) brings a results-based approach to each and every client. Whether your business has been established for 50 years or 50 days, we are passionate about helping you achieve your goals and mission.
Small Business Matters was established in 1994 as an independent management consulting and training practice. The primary goal of SBM is to increase the effectiveness and enhance the lives of CEOs. Since its existence, Small Business Matters has worked with companies such as Lucent Technologies, Carlson Companies, CB Richard Ellis Real Estate Services, Inc. (formerly Insignia/ESG, Inc.), and Georgia Power.
Small Business Matters is owned and operated in Atlanta, Georgia by Tim Fulton. Tim is a nationally-recognized small business coach, consultant, and advocate. He has been involved in the field of entrepreneurship for over three decades as a successful business owner, small business counselor, and adjunct university professor.
Tim is currently a Vistage Emeritus in Atlanta. Vistage is an international membership organization for company CEOs and Presidents that provides a very unique growth experience for its members. In addition, Tim is a former facilitator for the University of Georgia SBDC’s GrowSmart training program, which is designed for growth-oriented small business owners, operators, and executives.
Tim has recently authored a new book, The Meeting, available on his website and where books are sold.
Tim is also the host of the podcast, Small Business Matters, available here and other major podcast platforms.
Tim Fulton, Owner, Small Business Matters
Tim grew up in Miami Florida. He attended college in New Orleans at Tulane University where he earned an undergraduate degree in Economics and a 5 year MBA.
Tim owned and operated several small retail businesses in Miami. He also taught as an adjunct professor and served as the interim Director of the Family Business Institute at Florida International University. After moving to Atlanta, Tim was a co-founder of an internet software company that was an INC 500 company and then sold to a Fortune 1000 company.
In 1992, he started his own small business consulting firm Small Business Matters. Tim was a Vistage Chair for 16 years, retired from Vistage in December 2018, and currently enjoys Chair Emeritus status. In 2008, he developed the GrowSmart training program for the state of Georgia and has trained over 3000 small business owners in 15 different states.
Tim has an award-winning Small Business Matters newsletter, he has self-published three different books including most recently the book titled “The Meeting”, and co-hosts a popular podcast for small business leaders.
For six years, Tim has hosted one of the largest annual events in Atlanta for small business owners.
He has been married to his college sweetheart Remy for 40 years, has two grown sons, and is an avid tennis player. Tim has walked the entire 500-mile El Camino Santiago in Spain on two different occasions and just recently walked the 400-mile Camino Portuguese.
About Organization Conversation
Organization Conversation is hosted by Richard Grove and broadcast and produced from the North Fulton studio of Business RadioX® inside Renasant Bank in Alpharetta. You can find the full archive of shows by following this link. The show is available on all the major podcast apps, including Apple Podcasts, Spotify, Google, Amazon, iHeart Radio, Stitcher, TuneIn, and others.
About Richard Grove
Richard Grove‘s background is in engineering but what he enjoys most is brand building through relationships and creative marketing. Richard began his career with the Department of Defense as an engineer on the C-5 Galaxy Engineering Team based out of Warner Robins. While Richard found this experience both rewarding and fulfilling, he always knew deep down that he wanted to return to the small family business that originally triggered his interest in engineering.
Richard came to work for the family business, Dekalb Tool & Die, in 2008 as a Mechanical Engineer. At the time Wall Control was little more than a small ‘side hustle’ for Dekalb Tool & Die to try to produce some incremental income. There were no “Wall Control” employees, just a small warehouse with a single tool and die maker that would double as an “order fulfillment associate” on the occasion that the original WallControl.com website, which Richard’s grandmother built, pulled in an order.
In 2008, it became apparent that for the family business to survive they were going to have to produce their own branded product at scale to ensure jobs remained in-house and for the business to continue to move forward. Richard then turned his attention from tool and die to Wall Control to attempt this necessary pivot and his story with Wall Control began. Since that time, Richard has led Wall Control to significant growth while navigating two recessions.
Outside of Richard’s work at Wall Control he enjoys helping other business owners, operators, and entrepreneurs along their own paths to success by offering personal business coaching and advising through his website ConsultantSmallBusiness.com. Richard has developed an expansive and unique skillset growing and scaling Wall Control through a multitude of challenges to the successful brand and company it is today. Richard is happy to share his knowledge and experience with others who are looking to do the same within their own businesses.
Connect with Richard:
About Wall Control
The Wall Control story began in 1968 in a small tool & die shop just outside Atlanta, Georgia. The first of three generations began their work in building a family-based US manufacturer with little more than hard work and the American Dream.
Over the past 50+ years, this family business has continued to grow and expand from what was once a small tool & die shop into an award-winning US manufacturer of products ranging from automobile components to satellite panels and now, the best wall-mounted tool storage system available today, Wall Control.
The Wall Control brand launched in 2003 and is a family-owned and operated business that not only produces a high-quality American Made product but sees the entire design, production, and distribution process happen under their own roof in Tucker, Georgia. Under that same roof, three generations of American Manufacturing are still hard at work creating the best tool storage products available today.
Connect with Wall Control:
Intro: [00:00:01] Live from the Business RadioX Studio in Atlanta, it’s time for Organization Conversation, brought to you by Wall Control Storage Systems. Wall Control gives you the storage and organization you crave. Now, here’s your host, Richard Grove.
Richard Grove: [00:00:22] Hey, everyone. Welcome back to Organization Conversation. I’m joined today by three great guests that I’m really looking forward to having a conversation with. If you’re a regular listener of the show, today is going to be a little bit different. We’re kind of going to shift gears a bit and turn the lens or camera around and not so much on the wall, looking at wall control storage, but talking about or having organization conversations about organizations and small businesses in general.
Richard Grove: [00:00:48] So, we have found over time that our listeners are entrepreneurs, small business owners, business operators, all themselves. So, we thought it would be a great value to them to have some experts on in that space and just kind of talk about what we’re seeing across business, across the marketplace, macro landscape, and just kind of dive into some topics that kind of everybody is curious about, what everybody else is doing.
Richard Grove: [00:01:12] So, all of our guests today, extremely knowledgeable and experienced business coaches, advisors, entrepreneurs themselves. So, rather than going through very long intros on all of them, I’m going to introduce them and kind of let them go into tell them about – tell – tell you guys about themselves and what they specialize in. So, without further ado, I’m joined by Tim Fulton of Small Business Matters, John Ray of Business RadioX, as well as Ray Business Advisors. A little side note, John also produces the Organization Conversation Radio Show. So, if you’ve ever seen pictures, he’s the guy behind the board, you know, making everything sound good. And Jonathan Goldhill so, and Jonathan’s with The Goldhill Group. And yeah, so I’m joined in studio with John and Tim, and Jonathan has commuted via Zoom from Southampton, New York. So, I’m going to kick it off with you, Jonathan, and let you tell our audience a little bit about yourself just because you had the furthest commute.
Jonathan Goldhill: [00:02:10] Sure. Well, the commute was really easy, I have to say. The view here in Southampton is pretty nice. I’m normally based in the Los Angeles area. I’m a business coach and have been since 2004. I’ve been small business consulting since 1987. Actually, I got a degree in entrepreneurship, if you can believe it. Some people said like, why would you ever go to school to study entrepreneurship? But, you know, my family, my grandfather and his brother started a clothing business at the turn of last century, and it blew up to a very large company. They sold it 40 years ago.
Jonathan Goldhill: [00:02:50] But I’ve always been interested in family businesses. There was a lot of success in my family’s business, and so I’ve been coaching for, gosh, since 2004, and I wrote a book on family businesses and how to scale them. And so, that’s the topic that’s really near and dear to my heart. And most of my clients are people that are in unsexy industries. They’re in construction, they’re in real estate, they’re in property management, they’re in service-based businesses and manufacturing companies. So, that’s pretty much the space that I play in these days. But I’ve worked in a lot of industries over many years, so that’s a bit about me.
Richard Grove: [00:03:30] Awesome. Thanks, Jonathan. John, we can just keep working down the line here.
John Ray: [00:03:33] Sure. And thanks for having me on. It’s – I appreciate the invite, Richard. So, I’ve got two businesses. I’ve got a business advisory practice where I do some outside CFO work, but it’s mostly focused around pricing consulting. And, because I’ve come to believe, and this was a problem once upon a time for me, so I came to believe this. And I see this in a lot of businesses that pricing is their biggest problem, particularly for businesses that sell what’s between their ears, basically professional services.
Richard Grove: [00:04:09] And even us, lately it’s been insane. So yeah –
John Ray: [00:04:11] Oh, sure.
Richard Grove: [00:04:12] I mean, it’s just – sure. Crazy time for pricing.
John Ray: [00:04:14] Absolutely. And, so I do a lot of consulting around pricing and how to price more effectively. And so, that’s that particular business. And then, as you said, I operate a studio, North Fulton Business RadioX, and we help businesses that want to do their own podcast and use a podcast to really move the needle in their business, revenue needle in their business.
Richard Grove: [00:04:42] For sure. And I’m going to jump in and say to everybody who’s here today has their own podcast. So before we sign off, you guys will have to tell our listeners where to find you and listen to each of you. So, yeah. So, Tim.
Tim Fulton: [00:04:54] Well, first, Richard, I’m envious of Jonathan. I didn’t know that reporting from the beach was an option.
Richard Grove: [00:04:59] You could have done that. You see I know where you live. So, I was like, you want to – I didn’t give you the options. Yeah.
Tim Fulton: [00:05:04] But I’m very, very envious. And like Jonathan, I grew up as an entrepreneur. I was one of those kids and, as a young kid, cut neighbor’s yards and deliver newspapers and sell bumper stickers at school, just always looking for different ways of making money as an entrepreneur or I was just always interested in that and went off to school and got a business degree and one of the few kids in my class that didn’t go to work in New York on Wall Street or go to work for an insurance company or a bank. I thought, why? Why would anyone want to work for someone else? Crazy idea.
Tim Fulton: [00:05:38] So, I was an entrepreneur. I had a number of small businesses that I started and grew and sold, and then I’d start over again and did that for a number of years and then found that as much as I enjoyed that, I enjoyed just as much working with entrepreneurs as a coach, as a mentor, as a trainer. And that’s where I spent a good part of the last 20, 25 years. I’ve got a consulting practice, as you mentioned. It’s called Small Business Matters. I’ve got a mastermind group that I chair and meet every week. I’ve got about a dozen business owners that I work with as a coach, as an executive coach. And then, I also have a training program that I do for small business owners. I got the best of all worlds.
Richard Grove: [00:06:22] Yeah. That’s awesome. I’ve enjoyed some of your seminars for sure. It’s been super valuable. So anybody listening, especially if you’re in the Atlanta area, it’s cool to be there in person, but I think you can be there virtually, too. Yeah.
Tim Fulton: [00:06:36] Yeah, sure.
Richard Grove: [00:06:37] Awesome. Yeah, because we have kind of people all over the place, which is nice. So, yeah. So, I think to get things started and we can kind of, and we’ll just keep it conversational wherever we want to go with it. I kind of like to start with what you guys are seeing as challenges kind of at a macro level in the spaces you’re in and kind of, I guess, speak to specifically if you have any – you know, John, you were mentioning pricing – any specific expertise that you offer your clients that might be a good opportunity there. And again, we’ll just go back, Jonathan, if you don’t mind, we can start with you, and then we’ll just – we’ll go down and just kind of everybody jump in. And I would like for all of us to kind of interview each other if we happen to have any questions on anything or want to dive deeper on something.
Jonathan Goldhill: [00:07:20] Well, I think I’ll jump in and start with something that’s happening on the macro level. But it’s always been happening for a long time. And I think all of you guys, my panelists, will agree with me on this, which is that if you want to be a leader, if you want to be an entrepreneur, you need to be a learner. If you’re not learning, if you’re not participating in seminars and workshops, you’re not reading books, you’re not listening to podcast, you’re not sitting in CEO peer groups, or you know, if you’re not exposed to other entrepreneurs, then you’re in the dark.
Jonathan Goldhill: [00:07:56] If you’re a small business person and you’re trying to figure things out by yourself, I don’t know what size your business is, but if you’re under a million and you’re trying to figure things out by yourself, like there’s a lot of people like us who have gone before you that you need to get in front of. If you’re running a $100 million company and you’re not out talking to other CEOs of larger companies and understanding the challenges that they’re working through in leading and managing people, you’re missing out on a huge opportunity.
Jonathan Goldhill: [00:08:27] And so, you just want to set the stage with something that’s so basic. It’s not specific to inflation or pricing or labor shortages. It’s about learning. You will learn about all of those things if you’re in the company of peers and learning in – you’re in the right rooms learning.
Richard Grove: [00:08:45] Yeah. I totally agree. I mean, I can say firsthand, you know, it’s easy for me to just be a guy that’s stuck in a warehouse doing things the way I think they need to be done. And it can be paralyzing. And even if I’m doing the right thing, if I am not confident in that, I’m not moving as quickly as I could. Whereas if I had validation from a peer group of similar individuals, it would help me be a lot more effective and move a lot quicker. So that’s a really, really good point.
Tim Fulton: [00:09:11] And, I want to build on that because I think not only is there real importance in being a lifetime learner as a business owner, looking for opportunities to learn more and to read and attend workshops, it’s also very lonely as a small business owner. I know I felt that way. I didn’t always have someone I could talk to about not only my successes but a lot of failures. And I wish I had. I didn’t have a peer group other than family. And my family got tired very quickly of hearing about my business.
Tim Fulton: [00:09:43] And so, that’s why I’ve always felt the peer groups were really important, particularly for small business owners, for the opportunity to grow, to learn, additional layer of accountability for the business owner. So, I would encourage any of our listeners. If you’re not already involved in some type of peer group, a mastermind group, that would be a great piece of advice.
Jonathan Goldhill: [00:10:07] And get a coach too, by the way, Tim, right? People should work. If you don’t have a coach, you’re not being coached, you don’t have a mentor. You know, you can have multiple mentors. You can have several coaches, you know. But definitely reach out, get some help. All right, John.
John Ray: [00:10:23] Yeah. Well, I love the theme here that you guys are on because – when we get around to pricing. I know everybody wants us to talk about pricing and inflation and all that kind of stuff, right? But, for me, pricing is a journey. In fact, the name of my podcast is Price Value Journey, The Price and Value Journey, and that’s name for a reason because you’re always trying to get to the right point. And I think it’s something elusive that you never feel like you quite get to.
Richard Grove: [00:10:55] Iterative over time and, yeah.
John Ray: [00:10:57] That’s right.
Richard Grove: [00:10:57] Micro adjustments, for sure.
John Ray: [00:10:58] Yeah. So, particularly in that part of the business, and I think it’s true in all areas of the business, is Jonathan and Tim have talked about. But in pricing, in particular, it’s true. There’s no like special recipe to get there. There’s a lot of science in it, behavioral science, but there’s an art to it as well. And you’re always tweaking, I think, your pricing and how to get to the right point.
Richard Grove: [00:11:27] Yeah. And I think I remember, Tim, your boot camp talking about just the impact of discounting and how like a 5% discount, like what that does to your margin total. And it sounds obvious when you say it, but I don’t think people think about it sometimes or they just – they go to price match their competitor, but they don’t think about what they’re actually taking off the table for themselves. Even, you know, maybe you convert at a little bit higher percentage, but you’re losing a whole lot more money. And I think it’s very comprehensive, like mental algorithm you have to have when you start looking at that.
Tim Fulton: [00:12:00] You know, John, I’d be curious to hear what you’re telling your clients now around price. I had an interesting conversation yesterday with a client. On one hand, he’s feeling a lot of inflationary pressure. His costs have gone up, his costs of labor have gone up, his cost of materials have gone up. He’s a manufacturer. And then, he said, “Tim, at the other hand, I’m not sure I can raise my prices because I feel like the economy is beginning to decelerate a little bit, starting to slow down a little bit. I’m not sure I can pass on these price increases.” What are you seeing and what are you telling your clients in that regard?
John Ray: [00:12:34] Well, what I tell people generally, and of course, it depends on what business you have. Right? Let’s put that caveat out there. But I think it’s the wrong message to talk about price, potential price increases as it relates to inflation. That’s the obvious way to go to say, “Hey, my costs have gone up and therefore I have to raise my price.” The problem with that is that your clients don’t care what your costs are. They could care less. What they care about is the value that your product or service offers them. They care about the benefits. So, you’ve got to couch your pricing relative to the value that the client receives.
John Ray: [00:13:23] Part of the problem that I’ve seen, Tim, and I’m interested in what you and Jonathan have to say about this, but what I’m seeing with a lot of clients is they haven’t tended to their pricing in years. Right? And so, this little bout of inflation or big bout of inflation, I guess, that we are experiencing right now has really hit them hard because they haven’t regularly tended to their pricing over time. And I think that’s a lesson is that you always have to be looking at that. And so, because they haven’t done that, they’re really caught flat-footed in a lot of ways, right?
John Ray: [00:14:03] But it’s really the customer is going to compare. And if you’ve got to give them the point of comparison and if you’re talking about your cost or you’re talking about the economy or some amorphous kind of concept as opposed to the value that you’re delivering to them, both tangible and intangible, that’s a mistake. And I think that’s where I’m trying to get the clients I work with is understanding what perceived customer value is and pricing relative to that.
Richard Grove: [00:14:34] Gotcha. One question I have for all three of you guys to just to help clarify for our audience. So, John, you were talking about your client mostly between the ears. So, probably consulting services, that sort of thing. Is that what your typical client, maybe not like a widget manufacturer like we would be, but somebody who’s doing something with kind of creating value out of thin air, so to speak, not making a thing?
John Ray: [00:14:58] Sure, sure. But, you know, and let’s talk specifically about makers, right, because the maker community is the listeners here. Right?
Richard Grove: [00:15:07] Yeah. Quite a few.
John Ray: [00:15:07] Yeah. So, a lot of makers have a mindset problem, I mean, and their problem is, is that they think who is going to pay that price. Right? That’s the mentality. And what they don’t realize is that pricing is something of a marketing signal. If your price is too low, your marketing signal is a signal of inferiority. You’re pricing higher, it’s a signal of quality. And I’d love to tell a story about that, if you don’t mind.
Richard Grove: [00:15:41] Go right ahead. Yeah.
John Ray: [00:15:43] So, real-life story. I’ve got a friend of mine, he is a craftsman. He’s retired now and he does wood crafts. He sells – one of his items that he sells are wooden-fret crosses. Well, if you’ve seen these things, they’re very intricate. They take hours to make. And he was out at a craft show and selling these crosses for $40. And he got to the end of the weekend, he hadn’t sold any. And so, he was – time was running out. He decided he was going to mark them down and get them out because if you don’t sell them, you have to take them home. Right?
John Ray: [00:16:23] So, he heard this voice in the booth next to him, “What are you doing?” And it was the lady that was running the booth next to him, and he said, “I’m going to mark these down so I can get rid of them.” And she said, “You’re out of your mind. Let me price them for you.” And he said, “Fine. What I’m doing is not working. So you go ahead.” She priced them at $125. And before he left that day in an hour, he sold three of them.
Richard Grove: [00:16:48] Wow.
John Ray: [00:16:49] He now prices these crosses at $200 plus. They’re probably still too low, but never bad.
Richard Grove: [00:16:56] Yeah.
John Ray: [00:16:57] And he routinely sells out every weekend. He takes these crosses out. So, that’s a real maker story right there. Right?
Richard Grove: [00:17:05] Yeah. I agree. I mean –
John Ray: [00:17:05] Yeah. And so, the problem is, is that when you’ve got a $40 wooden-fret cross that takes hours to make priced at $40, what signal are you sending? You’re sending a signal that this is made in some foreign country or something like that; this is not a handcrafted item by a real wood craftsman like it really is.
Richard Grove: [00:17:28] Exactly. Yeah. And, I mean, the other bit of that, too, is it’s much harder to raise your price than it is to lower your price once you’ve introduced it. You know, I see that with our own product and some smaller brands that I’ll help coach. There’s one, it’s called Wall Works. It’s like a plastic mason jar that goes into our system, works with any pegboard. And it’s like I’ve told him over and over, you can price this higher. Like, we have it priced twice what your retail is on our website and we’re selling a bunch of them. He’s talking talks with Walmart and Home Depot and that kind of thing. And I’m like, “You got to start high. You can always come back down.”
Richard Grove: [00:18:04] And the other thing I’ve learned is if you start low and you keep trying to go low, you’re basically, because of a competitor, you’re kind of commoditizing what you do and it’s going to just be a race to the bottom. Whereas if you hold and then you bring along the brand, the brand story kind of like what we try to do with our podcast and what we do with a lot of this is create the value there. Like, introduce your audience to yourself and introduce your audience to behind the scenes and that kind of thing. Then, you can then you’re not in this never-ending fistfight to the bottom. So, that’s kind of what we’ve learned. So, yeah. So, Jonathan, what’s your ideal client look like?
Jonathan Goldhill: [00:18:43] I mean, my experience is along the same lines, which is, I never have clients who are low-priced leaders because none of them are large enough to fight that battle down, down to the bottom. And I’m always dealing with clients who are selling on quality and selling on value. And so, let’s change the equation to identifying what is it that you do that’s different, that’s better, maybe that’s unique. You come up with what everyone classically calls a unique selling proposition or value proposition and sell the value and sell the service.
Jonathan Goldhill: [00:19:20] I mean, for a lot of services, businesses, the only thing that customers know how to discriminate on is price. And so, you know, you have an HVAC repair person coming to your house and what one person is charging 89 for a service call, one’s charging 129. They don’t know the difference between the two. So, it’s incumbent upon the seller, the service company, to communicate that value and to sell that value. And I’m sure you guys all agree. I mean, probably most of us don’t work with companies that are low-price leaders and are trying to play that game. It’s just – you know, it’s too difficult.
John Ray: [00:20:01] Yeah. Can I – yeah, to underline your point, Jonathan, everybody thinks Walmart’s like the low-price leader and they’ve got the lowest – they can put everybody out of business. Right? If you look at Aldi, their cost structure is actually lower than Walmart’s. And so, what does that tell you? It underlines what you just said, Jonathan, that you cannot, as a small business, if Walmart can’t do it, then you cannot get your cost to a point where you can compete on lowest price. You’ll never be able to do that as a smaller business.
Jonathan Goldhill: [00:20:39] Yeah. I mean, the data on Costco used to be that 85% or 75% of their profits came from their membership income because their margins are razor thin. So, you know, they’re selling an exclusive value-based service in the membership.
Richard Grove: [00:20:59] Yeah. What about you, Tim? What is your ideal client look like? And what kind of challenges are you seeing in the space?
Tim Fulton: [00:21:05] My clients, they’re all relatively small businesses, growth businesses, but they vary. I’ve got manufacturers. I’ve got resellers. I’ve got service businesses. What they share mostly is a desire, one for their company to grow and hand-in-hand to that is their own growth as well. But part of the biggest issue that I’m seeing now, and the pricing is not, because pricing is a big issue now, is around people, it’s around talent and it’s being able to secure talent. It’s being able to retain talent.
Tim Fulton: [00:21:38] It seems like every meeting I go into, it’s, you know, I’ve got a job opening. I can’t find anybody. I can’t keep anybody. You know, we’ve been through this great resignation where 40 million people left their jobs. And what’s interesting now is I find the labor market is beginning to open up just a little bit what I’m hearing. Some of those people that resigned are now saying, “Okay, maybe I should go back to work. I’ve run out of government money. I’ve run out of this. I’ve run out – now I’ve got to go back and make money.” So, it’s starting to reopen. But there’s still a lot of movement in the labor market. You know, I hear from clients that, you know, somebody was supposed to start on Monday and they didn’t show up, or they showed up and they left on Tuesday. It’s a crazy time.
Tim Fulton: [00:22:20] And then, we’ve got these decisions about businesses that went remote during COVID and now they’re thinking about bringing their employees back. And do we bring them all back? Do we do a hybrid approach? Do we – companies are now talking about four-day workweeks. That’s kind of the new thing that companies are talking about, should we go to a four-day workweek? So, it’s all these decisions around people that are kind of centered on, you know, how can we find the best people, how can we keep the best people. And if I had the answer to that, I’d be a wealthy man. But that’s what I’m hearing probably more often than anything with my clients.
Richard Grove: [00:22:55] Yeah. We’re seeing it firsthand. It’s just – and we’re in a strange sort of kind of holding pattern just to see, you know, kind of sitting in a defensive posture, kind of looking at what’s going to happen. I mean, Wayfair just laid off, I think, 5% of its workforce today or yesterday. And we track very closely with these, the Wayfair’s and Home Depot’s, because we’re selling hardware into that same space. So, yeah, just kind of waiting to see. I think we’re right-sized right now, but it’s like you want to – you know, you want to keep your good people. You don’t want to bring on extra people. I mean, it’s just such a hard – and it’s never been – in my 15 years doing this, it’s never been this difficult to try to predict, you know, what’s going to happen next, even what’s going to happen in the next quarter. You know, like it’s just crazy.
Richard Grove: [00:23:42] So, the volatility and how to read it and what to make of it is such a challenge. So, if you guys have any insight into that or want to chime in as to what you’re seeing or if you have any hunches, please be my guest,literally.
Jonathan Goldhill: [00:23:58] So, look, I’m with Tim 100% labor shortages, those issues around hiring. Especially for growth companies, they’re always looking for people. And I think one of the secrets is to build a really great company on the inside. Because if you’re an attractive company, then employees who are looking at opportunities are going to choose yours over other companies, and you do that through culture and building initiatives internally through obviously you have to have a competitive and good compensation program and benefits as well.
Jonathan Goldhill: [00:24:34] But, really, culture, challenges, learning opportunities, growth opportunities and you know, getting rid of the C players because they’re toxic to a work culture. So, that’s really, I think, so important. You know, growth sucks cash, I guess, is the kind of the phrase we use in my business. And it’s also challenging with people. So I don’t think there are any real secret answers out there. You know, we’re all, everyone’s struggling with the same dilemma.
Richard Grove: [00:25:12] Yeah.
Jonathan Goldhill: [00:25:12] And it’s slowing things down somewhat in terms of delivery and supply chain.
John Ray: [00:25:17] Yeah. Well, maybe one tip, because I’m with Tim and Jonathan. I mean, there are no, like, magic answers here. But I was interviewing a senior executive at CareerBuilder the other day, and what she was saying was that one of the problems they see with employers is not – having qualifications that are too high. So, requiring a college degree when otherwise that potential candidate has all the qualifications necessary for that job. And I think employers need to relook at what they’re requiring for particular positions. Because if you’re looking for someone that’s customer-facing, for example, I mean, you’re looking for somebody that’s client-oriented, you’re looking for somebody that looks out for the business and there are other ways to measure that beyond a four-year college degree. Right? So that’s just one thing. She said that what she sees is that employers that are losing the talent race right now are inflexible when it comes to job requirements.
Richard Grove: [00:26:31] Yeah.
Tim Fulton: [00:26:32] And, John, to build on that, you know, as companies are looking for talent, I find too often they’re looking in the same places they’ve always looked. They’re fishing in the same pond that they’ve always put their pole and hook into. And the best example, I’ve got a client, and, Richard, you might have heard this story that he owns – he is a manufacturer here in Atlanta. His facility is down by Grant Park in Atlanta, been around for a long time, and he was sharing this story. He said, “Tim, I’ve got these three women who came to work for me recently and the best employees I’ve had in a long time.” I said, “Wow, that’s great.” He said, “It’s really interesting. They all live very close to each other. They get on the same bus every morning. They come to the facility. They work hard all day. They get they leave work. They get on the same bus. They go back to the same neighborhood.” I said, “Wow, that’s interesting.” He said, “Yeah, they’re in a federal penitentiary. They’re prisoners, but they’re on a work leave program and they get to get out five days a week to go work.” And he said, “I never would have thought of hiring, you know, federal prisoners to come work in my plant. But the market is such that I had to be willing to look at places I hadn’t looked before. And they’ve turned out to be my best employees.” So to me, that’s an example of we just, you know, John what is saying, we’ve got to be willing to question what we’ve done in the past and ask, is that going to work today or are we willing to change horses?
Richard Grove: [00:27:56] Yeah, exactly. Is it a workforce problem or is it my requirements problem, you know? And it’s easy to say I can’t find anybody. Well, what’s your algorithm for bringing them in? You know, let’s evaluate that for sure. Yeah.
Richard Grove: [00:28:08] So, kind of in an effort to bring value to any business owner listening or any business operator, I kind of want to go through – you know, I know as we’ve grown all control, we’ve gone through, quote, valleys of death where you hit these certain headwinds at certain revenue figures or employee counts. And I kind of want to start with what advice you guys would give to, say, a new entrepreneur just starting out, somebody who maybe they are seeing some headwinds at their own job and they’re looking to venture out? What are some things to keep in mind when you step into that space? How would you advise somebody? If anybody’s got any ideas.
Jonathan Goldhill: [00:28:49] We might be a little bit too far away from that space of working with those, you know, 0 to 10 startup kind of situations.
Tim Fulton: [00:28:57] I’ll take a quick stab just thinking out loud. To somebody who’s relatively new starting their business is to organize your business as if you’re a much larger business. And that comes from Michael Gerber who wrote, you know, one of my favorite books, The E-Myth Revisited, and he recommends that, he says, too often, you know, we start off a business and we figure, okay, well, I’m just going to operate this business like I’m a start-up. You know, every day I’m a startup. Versus what he says, just imagine that you’re running $1,000,000, 5 million, $10 million company. Organize your business as if you were a much larger business. And then before you know it, you are a much larger business versus going into it with a mindset of, you know, I don’t have any money, I don’t have employees, I don’t even have customers. And, you know, so, I’m playing catch up from day one. So, that’d be my first piece of advice is just act and design your business as if you’re already a mature business from day one.
Richard Grove: [00:29:56] Yeah, and that goes to designing scalability into it for sure.
Jonathan Goldhill: [00:30:00] Yeah, so, let’s talk about design scalability and to that concept, leveraging off of what Tim just said. So you build out an organization chart of what this company looks like at $1,000,000, or if you’re at a million out of $5 million. And you may be sitting in five different boxes on that organization chart, but circle the one that you routinely touch and that you’re willing to let go of next and make a plan in a month, in a quarter, in six months, whatever it is, to get out of that seat. Document in detail the responsibilities of the person who’s going to sit in that seat. Define and describe what are the attributes, the characteristics, the qualities, the technical skills that that person who’s going to sit in that seat needs to occupy, and start to envision, you know, hiring these people and start to think about what’s the next position after that. So, have sort of a picture of a one, maybe three-year plan of getting out of seats that you’re sitting in. And then, once you have other people sitting in those seats, have them do that same exercise.
Richard Grove: [00:31:16] Yeah, that’s really good actionable advice. That’s awesome.
John Ray: [00:31:20] Yeah. And most – talking about pricing, I mean, most entrepreneurs, when they start out, have a – sometimes it’s a fatal belief because it’s fatal to the business that if they keep a low price that will attract clients, that a low price does not attract clients. I mean, just like the example I gave earlier of my friend Hans with his wooden-fret crosses.
John Ray: [00:31:50] A price is a marketing signal and you’ve got to price relative to the value that clients perceive in your product or service. And you’ve got to have the courage to do that. And part of what gives you the courage to do that is to understand your customers. And it’s amazing to me how many people get in business and how little customer discovery they really do, right? I mean, how little interviewing of actual customers that they do. And so, I encourage people when they start out to spend as much time as they possibly can, actually talking to real-life customers, not trying to sell them anything, but trying to understand what their problems are.
Richard Grove: [00:32:32] Yeah, they move into it without any proof of concept. It’s an assumption that people will want this thing I’m offering, be it a service or a product.
John Ray: [00:32:39] Yeah. And, they spend so much time on product development without understanding what that customer really values and they go off on the wrong tangent, and then they inevitably mispriced their product or service.
Richard Grove: [00:32:57] Yeah.
Jonathan Goldhill: [00:32:58] So, raising a higher price is the fastest way to increase your cash, in my opinion, in my experience. Running cash flow models of, let’s increase sales volume, let’s reduce gross margin, let’s do all these different things. The top line, the increase in price, a dollar and more, is probably going to have the biggest impact on most clients, in most companies on their cash.
Jonathan Goldhill: [00:33:28] So, I think that next stage to get over that next valley of death, if I’m not sure, the listeners will understand what that concept means, but to get to that next plateau, so be it from the million to the 5, or from 5 to 10, or from one person to five people, from five people to ten people, is to accumulate cash. Accumulating cash and having that as a singular focus allows you to grow and do all these other things. People are focused on figuring out and fixing so many other problems in their business, but they don’t pay attention to the cash flow and they don’t understand even the profit and loss statement, the balance sheet and cash flow as a third financial factor. You need to become an expert and learn this stuff if you’re going to be an entrepreneur.
Richard Grove: [00:34:23] Absolutely. And yeah, Tim, I know you have a good insight on that. I mean, just the classes I’ve taken and the boot camps I’ve been in of yours. So yeah. What do you see at that same – and like you said, Jonathan, that’s good to put it. Maybe not valley of death, but a plateau, like you hit this kind of ceiling and you’re just – you’re spinning your wheels how do I get, you know, that 10 million, how do I get to 50? And what do you guys see? It sounds like cash is obviously a very big factor. But what can trigger that next kind of move up?
Richard Grove: [00:34:54] In some – most businesses, I know for us, as we’ve gone through, it’s like when we first started, it’s like, man, how are we going to do a quarter million dollars a year? How are we going to do a half-million dollars a year? How are we going to do it? And it’s like, but once you start breaking through stuff, you kind of sail to that next plateau and then you get there and it’s like, all right, what, what now, you know? So, if you have any insight into that is. Sure. Yeah.
Tim Fulton: [00:35:18] You know, there’s been a lot of research that’s been done on business growth and barriers to growth. And one thing that I’ve seen and seen and the science says this, so to speak, is that only about 4% of businesses ever get to $1,000,000 in revenue. And I remember when I first saw that, I thought, wow, I’m surprised by that. Only 4% of businesses ever get past $1,000,000 in annual revenue. And the biggest barrier to growth at that level, it’s a leadership issue and it’s the inability of the founder of the business to let go.
Tim Fulton: [00:35:52] Because, you know, when I start my own business, I’m doing everything, right? I’m wearing all the hats. I’m the CFO, the CMO, the COO. I’ve got all the C hats on. And I can do that for a while, you know, as a new business. But at some point, I’ve got to be willing to let go. I’ve got to be willing to delegate. And I find for many new business owners, that’s very hard because no one can ever do it as well as I can. You know, nobody can ever sell like I can sell. Nobody can ever do the books like I can do the books. And so, I’m reluctant to hire that first salesperson. I’m reluctant to hire my first accountant, bring in a COO to handle day-to-day operations of the business. So, it’s my unwillingness to let go to delegate. It gets in the way oftentimes of businesses being able to break that million-dollar barrier and then work towards even higher levels of revenue.
Richard Grove: [00:36:44] Yeah. And I mean, perfect for Organization Conversation. I mean, it can – a lot of things boil down to organization and the inability to do that and like you say, let go. And, Jonathan, that’s like to your point about literally drawing out the roles and picking what you’re touching the most or what you want to touch the most and what you’re willing to let go. That’s a great, great spot to start.
Jonathan Goldhill: [00:37:04] And you need to get the right people on your team and in the right seats and doing the right things and getting them doing the right things right. I know that’s a mouthful. But it’s about teaching them, it’s about first getting the most effective people and then about teaching them to be efficient. And, you know, I think probably everyone would agree, that’s the ultimate competitive advantage, is having the right people. The right people.
Jonathan Goldhill: [00:37:30] I mean, I remember going to business school, and this was many years ago, and they’d say the same thing over and over again that an A team with a C concept would outperform a C team with an A concept. And it was all about the people. So, it’s not about – it’s the right people will figure this all out, basically.
Richard Grove: [00:37:55] Yeah. All very good. Well, John?
John Ray: [00:37:58] Yeah. I was just going to add to what Tim said. You know, the other thing, when entrepreneurs start out, they get cheap about getting an accountant from the very beginning, getting a great attorney, business attorney from the very beginning. I mean, they go, you know, get legal agreements, you know, off the Internet. I mean, I have seen so many horror stories from that. And great, great advisors, great coaches, mentors, they’re worth their weight in gold. I mean, because if you get the right people that will help you get your business set up and then advise you along the way, you’ll avoid so many mistakes that otherwise you’re almost destined to make because you’ve tried to do it yourself and you think you can keep your way out of, you know, growing your business and it will come back to bite you.
Richard Grove: [00:38:58] Yeah. Well, that kind of is a good segue to I wanted to ask you guys about. You know, we’re a multigenerational family business. Jonathan, you come from a multigenerational family business. What do you guys see? Because I know firsthand that that presents different challenges than if you’re just a solo entrepreneur calling all your shots and doing whatever you want and, you know, 100% equity is yours. That’s a different path. What – I guess speaking to – and again, I feel like there’s a lot of successful private businesses become family businesses just by function of, “Hey, you know, cousin over here needs a job. Can you bring him on?” And you start to accumulate family on your team, which is great, but it does have inherited challenges. And what are your, guys, experience personally or with your clients when it comes to family business?
Jonathan Goldhill: [00:39:49] Well, I think you need to start setting up the organization so that the family has a meeting on a regular basis, especially when it’s multigenerational. I would recommend probably a quarterly or semi-annual meeting where you talk about principles and values and goals, where there’s an understanding of ownership. You also need to have separate from a leadership team meeting, an ownership team meeting, and those are probably the people that are actively involved in owning the business. They’re kind of probably like the board or the executive team.
Jonathan Goldhill: [00:40:32] And then, if there are family debates or issues or squabbles, like those should be done in a different room. They should be done outside of the leadership team meetings, outside of the board meetings. They should be done in a separate situation and environment. It’s really important to kind of create that structure where the right conversations are happening in the right rooms because otherwise you can create a pretty toxic work culture and, you know, family and siblings can get – it can get ugly, you know. Otherwise, if it does get ugly, then you’ve got like the HBO’s TV show Succession happening and, you know, you want to avoid that.
Richard Grove: [00:41:17] Yeah, absolutely. I appreciate the insight for sure into, like, having the self-awareness both individually and as a business to wear the different hat. Like, I have my business hat on at this table with my family and then we can go fight about, you know, where we’re having, you know, grandmother’s birthday dinner outside. You know what I mean? Like, don’t bring this – pretend like you’re not family when you’re having the business conversation, you know.
Jonathan Goldhill: [00:41:45] Call each other by first names actually. Don’t say mom and dad.
Richard Grove: [00:41:49] Yeah, exactly. Yeah.
John Ray: [00:41:51] Yeah. There you go. You know, I knew of a family who did a family calendar every year and so they had the best family pictures. And the slogan of the calendar every year was we put the fun in dysfunction. Well, the problem with that is, you know, every family has its dysfunction. Right? But you can’t bring dysfunction to the business, I mean, to your points, guys. You’ve got to create culture from the very beginning. I think, Jonathan, you said that earlier, but that’s got to be the foundation of what you build in a business like that.
Richard Grove: [00:42:30] Yeah.
Tim Fulton: [00:42:31] I wrote an article for my newsletter a couple of years ago, and the title of the article was, Is Your Company The Red Sox or The Sopranos? Because I find those are very different cultures, family culture and a team culture. And I think the decision a business owner has to make at some point is which one do I want? Do I want to have a family culture where we’re all doing different jobs, we’re all pitching in? There’s not a lot of accountability. Or do I want a team culture where there’s a high level of accountability and expectations around performance? I’ll have business owners sometimes when we talk about values and let’s say, well, one of our values is that we’re like family. And I think you never visited my family because that’s not the family culture that you want for your business.
Richard Grove: [00:43:22] Yeah.
Tim Fulton: [00:43:22] So, I think companies have to be – I find family businesses tend to be extremely resilient. So in difficult times, like, you know, maybe where we are now with a declining economy, you know, family businesses can be highly resilient because, you know, family members are going to go the extra mile for each other. They’re going to do what it takes to keep the business going. And yet, on the flip side, if I’m wanting to grow a really fast-growing company based on employee professional performance and getting the best people in the right positions, you know, family business may not be the right structure for that business. So, I think the business owner has to be very careful how, what type of culture they want for their business.
Jonathan Goldhill: [00:44:01] And, Richard, I think to speak to I don’t know what the challenges are within your own family business, but I work with mostly rising gen, next-gen leaders. And so, they may not yet be owners in that business, but they have an emotional ownership. Right? And they may want to play more like the Red Sox and have a team-based culture. And the parent, typically it’s a father, but it might be a mother and father, they might be typically wanting more of a family-based kind of a culture. And so, there’s that transition that needs to be managed.
Jonathan Goldhill: [00:44:38] I find that I play oftentimes in the middle between those two types of those transitions where we’re letting go at the older generation level to the younger generation and to the ways of doing things. And, you know, it takes time. Not everyone’s willing to let go or transfer equity as soon as maybe it could or should. Sometimes let go of people, too. It’s difficult. You know, it’s – you have – if your father hired someone who’s been working in the company for 40 years and you’ve now moved him into six different positions and it’s really not that good of a fit and now they’re not even really a good core value fit, I mean, it’s a difficult situation with that person. I’ve seen it too many times.
Richard Grove: [00:45:26] And you bring up a good point to just kind of getting everybody on the same page because everybody, you know, what do you want for the business? Well, we want it to be successful. We want it to be good. We want it to grow. Like, what does that mean? Like literally, what do those words mean to you? You know, like what – and I think defining that is so important. And we see that. What is – what does success look like to you? Does it look like the whole family working there or does it look like you’re two extra revenue over the course of a couple of years? You know, so, definitely getting that defined and getting everybody on the same page so that decisions can be made, hard decisions can be made to take those next steps, for sure.
Richard Grove: [00:46:04] So, you guys can, if you got any more to add to that, feel free to. But also would like to jump to what – if you have any advice, what would you say to, say, the business owner or the family that was looking to exit the business? What are things to keep in mind if you’re building – say you’re not building a multigenerational business, but you’re building something to sell? What would you say to somebody kind of going down that path if you’ve seen any? Because the hard part is kind of like you were saying, Tim, like you’ve got to do – a lot of stuff, a lot of stuff you, you just kind of groupthink into. And you are like, wait a minute, I don’t know if – I don’t know where the fork in the road was back there, but I don’t think I like the path I’m on. So, I guess before you get down a path too far, if you have any advice for that person.
Tim Fulton: [00:46:54] Yes. Three things come to mind for me, Richard, in that position. One is start early. Most experts will tell you that it takes 3 to 5 years to get your business ready for exit, whether it’s a sale or whatever the case might be. And too many times, someone decides they want to exit their business and they expect within six months to find a buyer and get at it, it just rarely happens that way. So, number one, start early.
Tim Fulton: [00:47:23] Number two, get good help. Get someone like Jonathan, who, if it’s a family business, who works with family businesses, because that’s a whole different animal when it comes to exiting the business and putting together a plan for that exit, for that transition. So, don’t be afraid to get help, to find good consultants.
Tim Fulton: [00:47:41] And I guess the other thing is about timing, and it’s very hard to time an exit in terms of the economy. The economy is up, the economy is going down, but at least be mindful that ideally, you want to exit your business when the economy is on an upswing versus a downswing, and knowing that the economy usually changes every three to five years. So, let’s be mindful of the macroeconomic factors that might impact a successful exit and try to try to plan accordingly.
Richard Grove: [00:48:07] Yeah, that’s really good advice. Like riding the wave, wait till the swell comes back kind of thing. Yeah.
Jonathan Goldhill: [00:48:13] Also, be really clear about your intentions. I wrote a blog a few years back that I think was titled, and I get a lot of hits on it was, 75% of owners regret selling their business a year after they sell the business. So be really clear about like, what is your motivation? Are you being – are you burnt out and are you feeling like you’re being pushed out of this thing, you just got to get out of this thing, or are you being pulled to something else? You want to travel. You want to spend time with your spouse. You have another business you want to start. I mean, be really clear about what your motivations are here.
Jonathan Goldhill: [00:48:50] And then ask yourself, you know, have I done everything I can to make this the most sellable business? Have I grown it to the size that makes it more saleable? We all know that larger businesses sell at larger multiples because that’s just the fact, you know. Have I built a business that’s got some kind of recurring revenue stream that makes it more valuable because there’s more trust in what someone’s buying, that it’s going to continue? Have I built a business that’s independent of any one vendor or any few vendors or any one customer or a few customers? I mean, so if there’s too much concentration or there’s too much risk there.
Jonathan Goldhill: [00:49:35] So, you know, what have you done to really dress up your business and make it the most sellable? And do you have – like, do you have a good team that will run the business once you’ve left? You know, unless it’s at a size where a strategic buyer is just looking, you know, looking forward and doesn’t really care who the people are. But often as you need to think about, is there a second in command that can run this business for small companies? So, those are a few thoughts, things, they need to think about.
John Ray: [00:50:08] Yeah. Just adding to that, I think one particular thing that’s really important is, particularly as you get to a certain size, I mean most of the buyers that are certain size in terms of just numbers are going to be financial buyers. So, we’re talking about private equity funds, roll-ups, what have you. The first thing they’re going to ask for is financials. That’s the first thing they’re going to ask for. So, your financials need to be impeccable. They need to look fantastic.
John Ray: [00:50:43] If you can afford to get an audit, that’s probably a great idea to get an audit as soon as you can do that. And because when you put that on the table, these are all financial guys with sharp pencils. And what they’re going to do is they’re going to tear it apart and they’re going to look for ways to devalue your business based on the errors or what they see that’s not quite, doesn’t quite look right. And so, getting those financials right before you even enter the process is really, really important.
John Ray: [00:51:23] And the other thing I would say is, talking about what Tim said about timing, you’ve got to realize that somebody’s buying the business, they’re looking to grow the business and you’ve got to give them – you’ve got to leave something on the table for them. I mean, you cannot –
Richard Grove: [00:51:39] That’s a really a good point. Yeah.
John Ray: [00:51:41] You cannot maximize –
Richard Grove: [00:51:43] I’ve got it as good as it can be.
John Ray: [00:51:45] That’s right.
Richard Grove: [00:51:45] Here you go.
John Ray: [00:51:46] Yeah. Yeah, exactly. And expecting somebody to pay top dollar for a business like that is just, it’s ludicrous, right? So, you’ve got to have the business in place where it’s probably a little uncomfortable to sell because you think I’m leaving money on the table. But what you’re doing is you’re ensuring by positioning your business that way, that you’re selling at a better multiple.
Richard Grove: [00:52:12] Yeah. That’s a really good point. Leave – if there’s no carrot on a stick, you know, what are you doing? So, absolutely.
Jonathan Goldhill: [00:52:19] Yeah. I want to say something about as I was thinking about the financial statements. It’s like, you know, reading a financial statement is like reading a good book. If the first line is, like, really captivating, it’ll get your attention. So, make sure you’re showing, like, a healthy amount of cash on that first line on that balance sheet, because then it’s more interesting to the reader to want to dig a little deeper, you know. So, I mean, there’s obviously a lot of things you could do to have healthy financial statements, but to have a paltry amount of money in your cash position, never a good idea. And your December 31st year-end statements with a healthy cash balance.
Richard Grove: [00:52:57] Gotcha. That’s yeah, very good advice. Oh, come on in.
Tim Fulton: [00:53:02] Just one more quick thing, Richard. Something that I suggest to my clients, if they’re thinking about wanting to exit, sell their business is I’d say, I’d tell them, take a month off, because that does two things. One, many of my clients, you know, serial entrepreneurs have never taken a week off, more or less a month. And so, it’s really hard for them to imagine, how could I take a month off? But when they do take a month off, they find one or two things. Either they enjoy that time off, they enjoy time with their wife and time with their family, timely time traveling, or they’re miserable. And this goes back to what Jonathan was saying that a lot of times people sell their business and they’re miserable afterwards because they don’t know what to do. They’ve not planned on the next step in their lives.
Tim Fulton: [00:53:43] So, for one, it’s a good experiment for the seller to take a month off and see what that’s like. On the flip side, I don’t think there’s anything healthier for a business than the business owner being gone for a month because for that to happen, the business now needs to work, has to work independently of that business owner, and many small businesses aren’t able to operate that way. And yet to a buyer, that’s one of the most important things that they’re looking at, is that if I’m buying John’s business, can this business run without John? And one test of that is to be able to say, you know what, I take a month off and the business ran beautifully. So, you know, take a month off. It’s a good, good test for the owner. It’s a good test of the business.
Richard Grove: [00:54:23] Awesome.
Jonathan Goldhill: [00:54:24] You might discover that if you’re half retired, it’s not a bad business to own. It spits out a lot of cash. You can do a lot of traveling. You have a place to go to get away from your spouse because they don’t want to see you all the time because they’re not used to having you around the house anymore. So, it’s a good thing.
John Ray: [00:54:41] You might actually find that there are a few areas of the business that run better without you being around mucking it up. Right?
Richard Grove: [00:54:46] Exactly. Yeah. They’re like, “Thank God he left for a little bit. Now, we can fix all this.” So yeah, that’s a perfect segue way actually into kind of – you know, you guys, you’ve been in industry to the point where now you’re advisors and coaches yourself. What would you – the advice you’ve already given is fantastic. But what advice would you give that entrepreneur who just – it’s kind of like, you know, you’re a type A personality, you’re always getting after it, you’re always taking in business podcasts, you’re reading books, that kind of thing. How do you yourself kind of let go and how do you balance that professional side versus what your hobbies and interests are and how do you know when somebody you’re advising, maybe they’re burnout and they don’t even know it? Like, what are some signs and some remedies to that mind that just can’t stop? If anybody’s got any.
Richard Grove: [00:55:42] I know, I personally enjoy cycling and I know, and running, and I can tell if I look like on my Strava, which is like the app for tracking it, if I haven’t logged anything for a couple of weeks, like I’m mentally in a different place than I am before. And it’s like this kind of – that’s a reset for me where I say, okay, I need to take a step back and maybe shut this down for a little bit and get outside and do this other completely different thing with a completely different group of people that takes me away from it.
Jonathan Goldhill: [00:56:16] Well, Richard, I think my lifestyle and my website have always had lots of images of cyclists, hikers, surfers. So, I think I tend to attract people as clients who are seeing that life balance is really important. Because I’ve made a lifetime decision around that myself. I lost my father when I was two. He was 35. He had a second massive coronary. You know, he was already accomplished. He had a Yale Law degree, was in the family business. I never was going to die before I was 35. So, I have made a conscious effort of kind of leading that kind of a lifestyle. And so, I think I attract people who enjoy those type, that type of a lifestyle. I mean, you know, Tim might have a different experience and can speak more to the hard-driving entrepreneur, but, like, you got to take a break. Otherwise, you’re going to burn yourself out.
Richard Grove: [00:57:22] Absolutely.
Tim Fulton: [00:57:23] And to add to that, I think what many business owners forget or overlook is that they’re a role model for their employees. And so, if they’re working 100 hours a week and not putting time in the family, not enjoying life outside of business, it’s very likely that that becomes the organizational culture. And now, their employees are doing the same thing. And so, they’re not setting a good example. You know, they’re telling their employees, “Oh, you need to take some time off, take a vacation.” And if they’re not doing that, it’s unlikely that they’re – particularly their direct reports are going to do that as well. So, they’ve got to set a good example for other people. Even though they may not be comfortable wanting to take time off, at the very least, they need to set the example for their people.
Richard Grove: [00:58:08] Yeah. And you could speak to what you do with your time off. I know you’ve done some pretty cool walks.
Tim Fulton: [00:58:13] Yeah, I know. I’ve been very fortunate in taking the time off. I’ve walked the El Camino in Spain two different times. Both of those were one-month walks. And last year I went to Portugal and did something very similar and just found for me, it’s great to be able to get away, to disconnect, to think in a deeper way than I’m accustomed to when I’m working crazy hours here. And amazingly, my clients got along just fine when I was gone.
Richard Grove: [00:58:41] Yeah, you probably came back, I mean, better than when you left, for sure. I mean, I’ve read all kinds of stuff about, this is just on a tangent, but just how good walking is for humans. Just through millennia of walking, it’s just crazy. Like biologically, it’s good for business.
John Ray: [00:58:57] Well, I want to add something Tim said. He talked about deep thinking. See, I think folks that don’t do this, take that time off and get away and take a hiatus, a sabbatical, whatever you want to call it, don’t understand the value of that to the business because you come back from that with all sorts of refreshed spirit, lots of ideas, lots of different ways to look at the business that you would never have had if you just stayed at the desk, hunched over with your head down. And I think there’s just a tremendous value to the business.
John Ray: [00:59:41] So, if you really care about the business, you don’t stay in it 12 months, 365. You don’t. You get away, you create. And frankly, folks, the concept is as old as Sabbath. I mean, this is like a –
Richard Grove: [00:59:58] Yeah.
John Ray: [00:59:59] This is like thousand-year concepts, right, I mean, that you get away, you create space and you come back refreshed and better for it.
Richard Grove: [01:00:07] Absolutely. It’s good for the business to be away from the business. I mean, that’s – absolutely.
John Ray: [01:00:12] Yeah.
Richard Grove: [01:00:13] Well, cool guys, I don’t want to take up too much of your time. I want to be respectful of that. But I also don’t want to leave any stone uncovered that we haven’t talked about, you guys want to get to. Is there anything – we’re going to -when we sign off, we’re going to go through and how our audience can find you guys, but any topic or anything you guys want to throw out there that we haven’t touched on today?
Tim Fulton: [01:00:34] We’ve covered a lot of ground.
Richard Grove: [01:00:35] I think it’s good. I mean, I definitely you know, if I was listening, I think there’s a lot of – I’m going to – there’s stuff I’m going to take away from it for sure. And I’ve had conversations with you guys all before. So it’s like, you know, I’ve learned new things today myself. So, yeah, well, anything Jonathan you can think of on your end?
Jonathan Goldhill: [01:00:52] No, I’m needing to wrap up for a phone call that’s about to come in. But I would say that, you know, the importance of clarity breaks and taking those so important, you might find some clarity breaks from listening to podcasts like this. You get them from being in a peer group, from working with a coach, a mentor, from reading a book, from taking a walk, you know, taking a hike, clearing your brain out with, you know, a long bike ride or a swim. So, important to have that so you can come back with a different perspective.
Richard Grove: [01:01:25] Absolutely. Well, that – we’ll wrap it up on that, guys. We’ll go back down the line, Jonathan, one more time. If you want to tell our audience where they can find you, where they can get your books, where they can listen to your podcast, you got the floor.
Jonathan Goldhill: [01:01:38] Yeah, great. You can find me at thegoldhillgroup.com, pretty easy to spell. Goldhill Group. The, GoldHill Group. My book and podcast have the same title. It’s called Disruptive Successor. The book is A Guide to Driving Growth in Your Family Business. And the podcast is for next-generation leaders, folks like yourself, Richard, who are scaling the family business.
Richard Grove: [01:02:01] Awesome. Thank you. John?
John Ray: [01:02:03] So, my website is johnray.co. You can find me there and connect with me there. I do a lot of posting on pricing on LinkedIn. So, you can connect with me on LinkedIn, John Ray. That’s R-A-Y. John Ray. One is my handle on LinkedIn and my podcast is The Price and Value Journey and you can find that at pricevaluejourney.com or on your favorite app.
Richard Grove: [01:02:30] Awesome. And Tim.
Tim Fulton: [01:02:32] Richard, first I want to thank you for having us on today. This has been great. My website is smallbusinessmattersonline.com. I have a monthly newsletter. It’s free of charge and any of your listeners can subscribe to. I also have a podcast, Small Business Matters Podcast, and a couple of books on Amazon, so you can check those out as well.
Richard Grove: [01:02:53] Awesome. Well, thanks again, guys. I really enjoyed it. I’m sure our audience has as well. And yeah, look forward to chatting with all you guys again soon.
Jonathan Goldhill: [01:03:02] Thank you.
Outro: [01:03:03] Thank you for joining us. Organization Conversation is brought to you by Wall Control, a family-owned and operated producer of best in class wall-mounted organizers for your home or business, made right here in the U.S.A. To learn more, go to wallcontrol.com.