Intro: Broadcasting live from the Business RadioX Studios in Atlanta, Georgia. It’s time for High Velocity Radio.

Lee Kantor: Lee Kantor here another episode of High Velocity Radio and this is gonna be a good one. But before we get started, it’s important to recognize our sponsor, Business RadioX. If you’re a business coach who’s tired of being a best kept secret, set up a call with Stone Payton at book Stone Payton dot com to unlock your perpetual prospect pipeline. Today on this show, we have the Founder Principal with Stage 3 Group, Rob Young. Welcome.

Rob Young: Thank you. Thanks for giving me the chance to be here.

Lee Kantor: Well, I am excited to learn what you’re up to. Tell us about Stage 3 Group. How are you serving folks?

Rob Young: So our focus is on companies that are either trying to enter or struggling to get through the third stage of the business life cycle. So typically they are beyond the startup phase. They’ve grown to the point that they’re experiencing the challenges of growth, and that’s our focus. And so we do that in a couple of ways. Some companies engage us for or kind of part time coo work. So fractional COO work. Others just have a couple of issues they need to wrestle through. And so we put together a framework and help them through that.

Lee Kantor: So what’s your back story? You know what, what did you do to get you where you are right now?

Rob Young: So I do not have the typical business pedigree. I did undergraduate degrees in theology and philosophy, anticipated getting a PhD and teaching philosophy at a small college somewhere. And the deeper I got into it, I thought, this is not something I want to do. The rest of my life had taken a couple of business and econ courses in college and just kind of stumbled into a business career. And so fortunately, I worked for companies that invested in my growth, eventually made it up to the senior executive level, and I liked it until I didn’t like it anymore. I got burned out on working 80 hours per week as a lifestyle. A lot of travel politics and all of that. And I wasn’t sure what I wanted to do, but I knew I couldn’t do that anymore. So I left that. And I’ve always loved construction. I’ve always loved working with my hands. And for a while, probably about eight years, I renovated historic houses in Cincinnati, which is where I was living at the time. And in the process, I worked side by side with a lot of great contractors and tradespeople and enjoyed those days. They were blast working with those people, but they had never been trained around a business. And so I watched a lot of them crash and burn, and I watched them lose their businesses because they had never been trained to run a business. So that was the catalyst for this. I thought I could leverage my business background to help people that I really admired, really enjoyed working with, could use my business background to help them stabilize their businesses. So that’s what I got started.

Lee Kantor: So now how did the the stage three framework come about? What was that something you created or is that something somebody taught you?

Rob Young: Uh, it’s something I created. And so it came about slowly. I started off initially, my company was called Contractor Success Hub and worked exclusively with Remodelers and people in the trades. Um, eventually I grew beyond that. My wife said, hey, what you’re doing is applicable outside of residential remodeling. Why don’t you consider expanding? And then concurrent with that, in a two week period, I had six business owners, a couple of clients, and then a few people who were just in my network all said this exact phrase to me. I don’t know how to run my business. And it was usually preceded with something like, I know how to remodel a house. I don’t know how to run my business. I know how to develop killer software. I don’t know how to run my business. And eventually I thought, well, I should ask them what they mean by that. And so I started asking people, when you tell me you don’t know how to run your business, what are you struggling with? And it was basic blocking and tackling stuff. I don’t know what information I need to be looking at.

Rob Young: Where do I find it? What’s it telling me? What do I do with it? People had financial questions. They didn’t understand what their financial statements were telling them. If they produced financial statements at all, they didn’t know how to tell if they had money. So I can log into my bank account and see where I am today. How do I know if that’s going to be able to meet my needs next week or next month, and so forth? People didn’t know how to spend their days and allocate their time. So a lot of basic blocking and tackling. And so I finally thought I should write a couple of blog posts about this or giving me good material. And I started to answer those questions one by one. Again, a degree in philosophy. What are philosophy majors do? We’re taught to think and write. And so at the end of the first day, I had 30 pages and I was surprised I had produced so much content, but I just kept going. It resulted in a book, and that is where the framework is laid out.

Lee Kantor: And then so can you go through the different stages? Are there just three stages for most businesses?

Rob Young: No, technically I think there are five. The fifth one is decline and death, so I’ll ignore that. Well, the first one is startup. And so at that point you’re simply trying to prove the viability of your business, trying to prove that you have a product or service that can work. Uh, stage two, I refer to that as early childhood. And so you’ve proven that there’s a need for your product. You’re trying to get your first few customers, or maybe you have your first few customers. You may have made your first several hires. And typically people are wearing multiple hats. Sometimes people are doing jobs that they have no business doing, but you don’t have the ability to bring in specialists. Eventually you get to stage four, which is mature, productive, adult. You have proven your product or service. Uh, you have a team in place with people who are qualified to do what they’re tasked with doing. And I refer to that as adulthood. So what I tell people is I help business owners, usually who’ve never been trained to run a business, grow their company from unruly teenager to mature, productive adult. And so really, the big issue with stage three is just trying to get everything done and dealing with the challenges of growth. Because what happens if your company is growing and you’re not equipped to handle it? It’s going to exploit every weakness and expose every weakness in the business. And so the way my, my framework for the business is, I think, intuitive.

Rob Young: And I think that whether you are a one person startup, whether you are a fortune 500 company, all businesses have three essential functions. I call them product making. So producing the product or service that you sell. Customer getting, which is sales and everything upstream of sales. And then navigating is the third function. And that’s essentially running the business. And that is a very broad thing. It could be accounting and finance could be strategy, HR operations, all of those things. And if you think about the typical business owner, why do people start a business? Well, most of the time it’s really it’s related somehow to the craft. They want to practice the craft the way they want to practice the craft. Maybe they had lifestyle ambitions. They thought they could make more money as a business owner and so forth. So typically it’s related to the craft. They’re good at the product making component of the business. Most of the business owners I’ve worked with are pretty good at selling as well. So they have two of the three functions covered, but they’ve never been trained and trained in the navigating portion. They don’t know how to run a business, and that’s okay until the business starts to grow. But that’s where we come. Uh, people have grown their business to the point where the navigating becomes overwhelming and they can’t ignore it anymore.

Lee Kantor: So now it’s possible, I guess, uh, to grow a successful business just through stage two, just because you’re good at delivering whatever that, uh, solution to whatever problem that you decided to pursue.

Rob Young: Correct. And I’ve seen that a lot.

Lee Kantor: And then this is for folks who want to then take it to the next level, maybe, um, scale or franchise or, or grow beyond kind of, um, you know, the, I guess the plateau that eventually comes when you’re just at that stage two.

Rob Young: Correct. And they may not have huge ambitions for growing a big company, but at some point they’ve grown big enough that it becomes chaotic. So chaos is a big indicator that a company could use some help.

Lee Kantor: So what does chaos look like for that person that might have hit this plateau and is in between stage two and stage three? What are some of the signs and signals that say, hey, maybe I need some help right now?

Rob Young: Yeah, for the owner, it’s getting drawn into all kinds of different parts of the business and being the one through whom every decision has to go. So they’re involved in the product, they’re involved in sales, they’re trying to keep up with accounting and finance, trying to get their taxes filed on time, all of those things. So it’s really a point where nothing is working smoothly. Everything seems to be a problem. A big indicator for me is their meetings are the same week after week after week. They’re talking about the same problems over and over again, and they’re not really gaining any resolution on them. So those are big indicators that we see.

Lee Kantor: So that all sounds kind of operational. Is that at the heart of kind of in order to jump to stage three, you really have to get the operational side of your business, um, executing pretty smoothly.

Rob Young: Yeah. I think there are three things. And so in the book, I say that if you are a business owner or you’re leading a business, there are things you need to know. There are things you need to monitor and things you need to do. So there are a lot of books out there. One of the ways I think stage three success is different is that we start with the fundamentals again, Less than one third of people who own a business have ever been trained to run a business at all, or had any sort of business training. So I believe that there’s some foundational work. I think every company should have a business plan, every company should have a budget. And I think those things are important for two reasons. First of all, they’re going to tell you what to do, but probably more important, they’re going to tell you what not to do. And so companies are given good opportunities all the time. How do they know whether they can pursue that opportunity? Well, they should refer to their business plan and their budget. Those are kind of the true north of the business. I’ve also found business owners who are leading very successful, very profitable businesses. They don’t really understand their finances. And so we spend some time training on that. Uh, I want people to understand what they’re supposed to be seeing in their balance sheet and in their cash flow statement and in their profit and loss statement.

Rob Young: So those are the foundational things. Those are the things that I think every business owner or business leader needs to know. Then we jump more to the operational things. And so I refer to the financial statements as the report card of the business. I kind of nerdy in high school and college grades were very important to me, and I never waited until grades came out. The final grades came out to understand what I was doing. I checked scores all along quiz scores, test scores, you know, whatever scores we had that went into the final grade. I monitored those things all along, and if something wasn’t where I wanted it to be, then I could intervene. And so the second element then is monitoring. As a business owner leader, what do you need to monitor? So that’s where the operational side comes in. We put systems in place to help companies monitor the. Things will eventually lead to the grades they see in their financial statements. And then the final thing is what do you need to do? And so that’s where we draw out daily and weekly rhythms that the company needs to have. We have a list of suggested meetings and suggested content for those meetings. All very flexible. People can change them to meet their needs. We talk about managing time and energy, which I think go together. So it’s very practical, hands on basic things that we help companies implement now.

Lee Kantor: Do you find that, um, some founders, like for example, you mentioned the financial side of things in their mind. They have a CPA or bookkeeper combination. And in their mind, do they think, okay, that’s their job because I’m here solving the problem of my clients and they’re in charge of, you know, helping me make proper financial decisions because I’ve delegated that to them. Or I have an admin that’s kind of in charge of my operation. So I’ve, I’ve delegated that to them and that my job is to kind of keep the boat going forward. Um, and that you’re saying that they have to have a more hands on, holistic view of the entire operation in order to kind of navigate through the stage three.

Rob Young: It doesn’t necessarily have to be hands on. I think that in a lot of cases, it would be a waste to have the owner do the hands on work. What I have found is that for most emerging businesses, the owner’s talent in their craft tends to be the secret sauce for the business. They’re wired to do that. They’re gifted to do that. That’s what they like to do. But they can’t throw off the fact that they are business owners. And so the report card for a business is in financial statements. They need to have at least basic literacy in those things. So no, I think it would be a waste to have an owner in most cases, spending time doing debits and credits, but they need to be able to understand what their CPA is telling them. They need to understand the implications of it. I say that there are stories that are always hidden in the numbers in a business. They need to understand what those stories are and how to use them for the benefit of the business.

Lee Kantor: So they have to delegate. They just can’t abdicate.

Rob Young: Correct. Yeah. That’s well stated. Yeah. So I use a term called Bihu which stands for best and highest use. And so I say for the owner and really for everyone in every department throughout the organization, consider what is the best and highest use of their time, their talent, their wiring and so forth. And so typically, Bihu for an owner is not spending a lot of time in the actual accounting transactions.

Lee Kantor: So now if you were going to give advice to a business owner right now that’s struggling, is there any low hanging fruit, like what’s kind of their first moves they should be making if they want to kind of shore some of this up?

Rob Young: Yeah. And I don’t know that there’s a one size fits all. I think that if you look at any business, you can break it down into two things that need to happen. A business in order to be successful needs to be profitable and it needs to generate cash. So profitable, you have to be able to produce and sell your product for more money than it, than it costs you to deliver. You also have to generate cash. You could be incredibly profitable, but if you’re not bringing the actual money into the business and you’re not controlling your spending, you can still go under. So those are the things we look at. Um, we have an assessment that we offer and it breaks the business into ten distinct areas. It takes about five minutes to complete. And what we do when we start working with a client is we look for any crises. I’ve had business owners come to me and say, Rob, I have no idea how I’m going to make payroll next week. That’s pretty urgent issue. So we address those things, but then we work with the results of the assessment and we have a discussion like where do you want to be? Here’s where you are currently. And we create a pathway to do that. But yeah, bottom line of everything is if you’re producing a profit and you’re generating cash, you can be successful.

Lee Kantor: Now when you’re working with a client, is your work kind of at the coaching level or the consulting level. Are you rolling up your sleeves and doing work, or are you making recommendations to the leader to do certain things?

Rob Young: Yeah, it depends on the the company that we’re working with. And I don’t want to offend anyone, but almost every client I’ve worked with has previously had a coach, and they did not receive the value that they hoped to get out of that. And so how that plays out is if you’re struggling with your business and you’re overwhelmed, you can’t get everything done, what do you do? Well, you reach out to a coach. A lot of the clients I’ve worked with are coaching experience looked like this. They reached out to a coach. The coach probably had really good ideas and really good intentions, but they just handed it off to the business owner and said, here you go, do this, do that. Well, they had to keep the business running and they were already overwhelmed by that. So when those are the dynamics, coaching doesn’t work. So coaching is part of what we do. But really we jump in the trenches and we help get stuff done. And so for instance, if you need a business plan or a budget or to document SOPs. Or if you need an employee handbook, we will help create those things for the client. We don’t just hand them off. In some cases, we have clients who are a little bit larger, more mature. They have a lot of things in place, and they really just need someone to bounce ideas off with so we can do that. And that would be just a coaching agreement. But yeah, it really just depends on the nature of the business and what they’re struggling with.

Lee Kantor: So you work with businesses. They may not necessarily be at stage three. You work at them at at any stage they’re in.

Rob Young: Yeah. If we’re going to do consulting and coaching, we want those to be in the third stage of the life cycle or at least transitioning into that. Now we have tools. So again, not to keep harping on the book, but I created the book. And then there are software that we have created that’s available to anyone. And so if you have no idea how to create a business plan, we have software that will walk people right through that. At the end of that, they’ll have a business plan, likewise a budget and so forth. Um, so yeah, the tools will work with anyone. We will provide guidance. We’re not just going to hand those off, but we typically don’t do the day to day deep dive engagement with earlier stage companies.

Lee Kantor: And then so once they have a product, it’s proven they have. So they’ve sold some things to some people, then they’re kind of ready for you.

Rob Young: Correct. Yeah. If they’re starting to grow.

Lee Kantor: And then at that point, what so is your recommendation first read the book. So you kind of understand what the playbook is going to be moving forward. But then once they’ve done that, what is kind of there’s, I guess, a discovery period where you’re trying to analyze because you make them go through some sort of an assessment to at least understand, um, somewhat where they’re at.

Rob Young: Correct. Yeah. I’m happy to sell books, but that’s not a requirement. You know, if people find the book and they find value in it, great. But we will work with people otherwise. So the assessment is for both of us to get a common understanding of what the real issues are, and then we build a plan for that. And so one of the questions I ask clients is, if I had a magic wand and, you know, poof, I could make your business what you want it to be, what would it look like? And then we take that into focus. We also look at the realities of where they are, and we reverse engineer a plan to help them get there.

Lee Kantor: And then you help them actually implement the plan. It’s not like here’s a plan that you can put on a bookshelf that, you know, next to the other plan you did five years ago.

Rob Young: Correct. Correct. Yeah. And it’s funny because you may have experienced this as well, but a lot of people just have bad taste in their mouth over business plans. People have created them to qualify for a loan or they thought it was necessary. But the plan has really been a waste of time. It’s not guiding any sort of behavior or decision making process. We cut through all of that. When I first started doing this, I made the mistake of wanting my clients to build complex 40 page business plans. No one ever did. And initially, I was kind of ticked at my clients until I realized like, no, that’s my issue. A business plan doesn’t need to be that complex. Um, what I’m really looking for, in addition to some of the other fundamental things, you know, what are the financial projections, what are the operating projections, projections and so forth. Really, for me, a business plan is defining viability, which is identifying the problem your business seeks to solve. And then what is the need for that in the marketplace and how much, you know, how many people have that problem and are willing to pay for your solution. That’s the heart of it for us.

Lee Kantor: And then for the folks who have maybe some scar tissue with previous plans that, um, I mean, I guess a contrarian argument would be that, look, things change so much. I mean, if I had a plan three years ago that didn’t include AI, you know, this plan isn’t useful anymore.

Rob Young: Correct. Yeah. So that’s the beauty of the software. It includes a Swot analysis. And so Swot, I assume your listeners know what that is in case you’re not. It’s strengths weaknesses, opportunities and threats. And so strengths and weaknesses are internal to the company. And then opportunities and threats are things outside of the company. And so we require in the business plan for the user to do a Swot analysis, but not only to identify those things, but say, what does that mean to the business? And so your example of AI. Absolutely. Yeah. That is both an opportunity and a threat that’s outside of the business. Um, I’ve been affected by that in my business as well. So the plan is updatable. I am an advocate of looking at your strategic plan or your, your business plan at least once per year for exactly that reason. Things change that we never could have anticipated.

Lee Kantor: Well, like in the case of AI, I mean, it might be an opportunity and it might be a threat, but it also impacts your strengths and weaknesses. I mean, sure, so it’s something that’s going to permeate throughout the entire analysis of the of the business.

Rob Young: Right? Well, as an example of that, over the years, I’ve developed what we’re pretty sophisticated financial analysis tools all using Excel. And I would love to be able to market those and make those available to the market. But if you know, Excel, like I don’t care how well you password protect your your spreadsheets, there are ways around that. And there’s no way to protect my intellectual property with that. So I approached a software development company about converting this into actual software. And they said, we can do that, and it’s going to be $250,000. Well, there was no way I was going to pay that money. And so with AI, having grown up in software, um, professionally, I’ve been able to create that tool myself. So great opportunity. And it gave me a strength within the organization. Um, where the weakness or where the threat comes into play. I received notice last week that the software or the AI platform I’d been using to develop the software was not going to be available anymore. Like, I couldn’t have anticipated either of those things a year ago. So yeah, we’re constantly, we recommend reviewing those things on a, on a constant basis.

Lee Kantor: Now, is there an example you can share about what it’s like to work with you don’t name the organization or the individual, but maybe share the challenge they came to you with and how you were able to help them get to a new level.

Rob Young: Sure. And I’ve had it all over the map. So I’ve literally that story I shared earlier about someone comes to me and says, I have no idea how I’m going to make payroll in two weeks. That literally happened. And honestly, that’s pretty scary for me. Uh, but we’ve had that. We’ve had other people who’ve been around and are just overwhelmed. What I have found, um, is that in a lot of cases, you have people who are very competent in the craft of the business. That’s why they started it. They’re good at sales and the navigating is a challenge. What I have found is that a lot of people experience shame related to that, and if their business is struggling, they’re kind of embarrassed to admit it. And I think, no, no, no, no, you’ve never been trained to do this. I couldn’t build a house like you do. So we have to deal with some of that. We deal with the imposter syndrome. But again, we look at where they want to be, where they are, and we reverse engineer that. So we’ve we’ve had some clients who’ve done very well. And honestly, it’s a lot of fun. Um, and I think I mentioned earlier, we have a couple of ways that we can engage. If they just have a couple of issues they want to work through, we can do that. We’ll put together a proposal for that. Some people have said, hey, we’d really like to engage you as a fractional COO and we’ve done that. Um, so I don’t know if that answers your question or your, your.

Lee Kantor: Well, I was just trying to get to a specific, um, maybe story that was meaningful to you, like a, a, an organization, like you mentioned, they could have been struggling to meet payroll, but then now they’ve franchised or, you know, something that is a specific anecdote that shows what it’s like to work with you and your team so that, um, our listeners can understand what’s possible.

Rob Young: Sure. Yeah. So I work with a super high end custom builder in central Ohio. Fantastic, fantastic person. He has more passion for building and building science than anyone I’ve met. We started working together about a year and a half ago, and he thought he was going to close the doors. He had hired some family members, which I think is a big mistake. But he had they weren’t producing. Uh, he was struggling with clients because he was put in a position of weakness because he didn’t have the ability to find the numbers he needed to report to them, just all kinds of operational things. And he was very discouraged and thought about closing shop. So we helped him replace some people who needed to be replaced in the organization, put systems and processes in place, helped make visibility to project data more accessible to him, to the company, and probably more important to the clients. He’s regained his passion. He’s actually started an ancillary business to go with that. So those things are a lot of fun when we get to do that. And we’re fortunate to see some good results from our work.

Lee Kantor: Now, how has writing the book impacted your coaching and consulting? Did it, um, change any of your thinking about your business?

Rob Young: Um, it did so initially, like I said, I never intended to write it. It just came together. But it’s given me a solid framework that I can point to. And so we have a playbook. I believe it’s important for us. Uh, whereas before we might approach projects a little bit differently. We’re still flexible, but we make sure that we work within this defined framework that is outlined in the book. And the benefit of that is that if the customer chooses to get the book, they can work through it themselves and they know where we’re going.

Lee Kantor: Now, um, you mentioned kind of some of your work, um, with the construction industry and things like that. Is that kind of the area that you have the most depth of knowledge in or is at this stage you kind of industry agnostic in terms of a sweet spot in the types of businesses you can help. Like, can you help service based organizations or nonprofits? Does it matter anymore?

Rob Young: Um, it really doesn’t. So I have a lot of domain knowledge in construction just because I worked in that myself for a while. Um, but the whole purpose of the book is to provide general business knowledge. So I, I classify knowledge within a business in two things. There’s general business knowledge, understanding the foundations, understanding operations, financials, all of that. And then there’s domain knowledge, which is the technical knowledge within the business. How do you build a house? How do you develop software? How do you provide therapy? I’ve had architects, I’ve had therapists. I’ve had people in a wide range of industries. So yeah, our work is really industry agnostic.

Lee Kantor: So if somebody wants to learn more, have a more substantive conversation with you or somebody on the team or get a hold of your book, is there a website? What’s the best way to connect?

Rob Young: Yeah, the best way to connect would be to go to the website, which is stage3group.com. So it’s stage number three, group.com. I can find out all kinds of information. There’s a link to the book which is sold on Amazon. And then there’s the free assessment. So that assessment anyone can take it. There’s no pressure. We collect some data, but it’s not hard marketing. We do after that. But yeah, if people are just curious about how they might score in different areas of the business, they can do that on their own.

Lee Kantor: And then if you do the assessment, what’s what happens with that? Like, what do I get for doing the assessment? What am I going to learn?

Rob Young: So you’ll go through 50 questions and then it produces a graph and it breaks the your scores down into ten different categories. And it could be financial performance, leadership, uh, business operations and continuity, um, and so forth. So ten different areas puts it in a spider graph. And then it will outline specific areas within each of those categories based on your responses to the questions. And we’ll show you some things that you might need to pay immediate attention to other things where you’re doing really well.

Lee Kantor: Good stuff. Well, Rob, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Rob Young: I really have a passion for helping small businesses. It’s it’s a lot of fun.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on High Velocity Radio.