March 29, 2024 • 41 mins
Does that vision of greatness seem just out of reach? Ever wonder what might be holding you back? What does the next level even look like? What separates success stories from everyone else? My incredible guest @Brad Eisenberg, founder of BE Lean, is a Scalability Consultant with over 15 years of experience helping organizations breakthrough to the next level. He works with growing businesses that are at the point where everything that used to be fun and simple has become messy and complex. We discuss how to cut through the complexity, fix what's broken, and create smooth, streamlined, and scalable operating systems to help you get out of the weeds and actually grow! There are tips and tricks here for every kind of organization looking to move to that next level of success, so be sure to listen, share, and tell your friends! #scalability #businessgrowth #leadership #businesstips #maximizeprofits
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Episode Transcript
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(00:04):
You're listening to the Haney Company Financial Guy Show.
No nonsense, just a crazy mix of life, business, the funny, and of course,
we're going to talk about your money.
But just sit back, relax, and enjoy the ride. What could go wrong?
All right, welcome to another episode of the Haney Company Financial Guy Show.
(00:28):
I am always always excited for all the amazing guests that I get to have on
this show, but particularly.
For this episode's guests, because Brad Eisenberg and I get to talk about something
in probably an area that we haven't really covered ground on.
So this is going to be treading of new ground on a topic that we'll have to
see how it goes today, Brad, because I think knowing you and I,
(00:50):
we can take it any number of wonderful places.
So I'm very, very excited for this conversation. I appreciate you joining me today.
Of course. Thanks for having me. Let's have some fun. All right.
Well, the fun usually starts after the first initial questions. They are tough.
They're like screeners, right? So you got to get through the gauntlet to get
to the good stuff. So let's just hit it hot and heavy.
What is the number one place that you have always wanted to visit,
(01:12):
but you have yet to visit? Oh, man. Yeah. Hidden and hard real soon.
I am an avid traveler. I absolutely love discovering different corners of the world.
For many years, my number one was hiking the Inca Trail to Machu Picchu.
And fortunately, I've crossed that one off the list.
So my number two has become my number one, which is to go scuba diving on the
(01:34):
Great Barrier Reef off Australia.
And fingers crossed, it's looking likely that that one will happen next year.
So I'm pretty excited. it. Oh, wow. Yeah, that is awesome.
Certainly. So your first one sounds amazing. It's somewhere in my list and on
my radar for sure. So I bet that was just fabulous.
Life-changing. Absolutely life-changing. Yeah. Now scuba diving for me.
(01:56):
So there's only one thing on the entire planet I'm afraid of and that's sharks.
So it doesn't quite ever make it anywhere with me just because of that.
But in other waters or in other parts of the country, I'm sure it would be amazing.
But But yeah, I mean, the Great Barrier Reef itself and that whole area in Australia sounds awesome.
So we'll have to have a part two after you after you accomplish that. Oh, for sure.
(02:18):
All right would you rather explore outer space or under the ocean and i'm wondering
how based on on your answer to the first question you're going to answer this
one you could probably guess the answer.
Under yeah under the ocean i mean a there's more stuff down there you know like
outer space is pretty empty and i guess i'm also one of these guys that just
(02:40):
likes likes to always have one foot grounded in some reality that i'm in while
the other one is kind of reaching to new territory So something about the ocean
being a little bit closer to home,
being able to relate it to my life and world is probably is what pulls me in
that direction, as opposed to just being off floating somewhere in space.
Yeah i i i think i i
(03:01):
waver back and forth neither of these for me really resonates
to be honest because there's both like there's the
scariness of it and then there's also just kind of the you know the unknown
part of do i really feel that this is like a dimension that i'm super interested
in but i think i i would certainly agree with you i lean more towards under
the ocean despite my my shark fear simply because you know there's just got
(03:22):
to be some really cool unexplored territory out,
you know, just for you without sharks. Yeah, I know. I know they're not everywhere.
So I like that. All right. If you could have a meal with someone famous,
alive or dead, who would you want to have a meal with?
You know, I think I would love to have a meal with Julia Child.
(03:44):
I'm an avid cook. I love cooking. I love food. I love watching things about food.
I love going out to incredible places, whipping up meals at home.
And I mean, Julia, not only because because of the food connection,
just strikes me as somebody whose success was driven by her authenticity.
She was like exactly who she was. And probably a lot of people at the time would
(04:06):
have deemed her completely unqualified to do the things that she did.
You know, not a not a professionally trained cook, you know,
certainly no background in TV.
Her cookbook was the first thing she had written.
And she was kind of an underdog. But it was that authenticity and charm that
really was behind her success and not the things that might've been traditionally
(04:26):
associated or attributed to success.
And I think that aspect just really intrigues me. I'd love to have a meal with her. Hmm, I love that.
And don't know that I knew half of what you had shared about her.
So yeah, that sounds fascinating and fun.
Wow, I love that. That's great. Yeah, good answer, good answer.
All right, besides this podcast, which of course is everybody's number, what other podcast?
(04:48):
Always, always. What other podcast though? Oh.
Have you enjoyed that you would want somebody else to consider listening to
as well? Yeah, this is a tough one. I'd probably choose between, you know, two.
I mean, Malcolm Gladwell's revisionist history is incredible.
He's just, he has this way with words. He's an amazing storyteller.
But I think if I had to pick one, it would be How I Built This with Guy Raz.
(05:10):
I mean, obviously, you know, passionate about business and entrepreneurship.
And I love, love, love hearing people's origin stories of how they came to start
their business, their journey along the the way.
And I think Guy is just incredible at asking insightful questions that really
just get these people that are typically we put on pedestals as,
you know, models of success.
(05:30):
And he just has this way of humanizing them and getting us all to see that like,
you know, behind every success, there's a lot of, you know, dirt and struggle and just humanity.
And I love seeing kind of the humanity behind a business story and kind of what
got people where they're I love both of that.
And I think there's not a Malcolm Gladwell book I have not consumed at least
(05:51):
once, not more than once.
So, you know, that's a tough question. I still think Blink, probably because
I've read it the most number of times.
But I mean, again, like, you know, I can't, you know, his name's on on the cover.
I'm reading it. That's pretty much the way I approach it.
Like mouth. He just dropped a podcast about how Blink was going to become a movie.
(06:13):
And there was an entire screenplay written to be adapted, you know,
to adapt Blink to the silver screen.
And it never happened. And he tells that whole story of what killed that project.
So you got to check it out. All right. That was a whole bunch of good stuff there as well.
Love it. All right. Right. Well, but let's stay on that origin theme,
because now I would love for you to tell the audience a little bit about yourself,
(06:36):
because what you do is is fascinating and fun.
So what's the story behind the story?
You know, I think there's probably always been an entrepreneur in me,
you know, ever since I was a kid organizing fundraisers for school.
But I actually started my first business in college.
That's when I guess the passion really ignited where I saw the opportunity to
(07:00):
kind of create my own path through life.
I actually went to school for mechanical engineering and realized by the end
of college that I didn't want to be a mechanical engineer.
I was way more interested in engineering businesses than mechanical systems.
And this path of entrepreneurship promised this life that you could pursue purpose
and passion and make a living out of it where you weren't so dependent upon other people.
(07:25):
And that was really intoxicating for me at the time. And so that first business
was a bike-sharing business, probably a decade before the streets of every major
city became littered with scooters and bikes.
We were actually the first to do it on campus at the University of Maryland in 2008.
And around the same time, I joined an early startup in the energy efficiency
business and kind of grew with that company from the ground up,
(07:47):
ultimately leading that company as the chief operating officer and kind of...
Seeing that company grow from a teenage, undisciplined startup into a mature
and sophisticated operating organization was just the best thing that I've ever done.
And it's really what inspired me to start my consulting business at the beginning of 2017.
So BeLean picked up at the tail end of that other business, which I'm sure we'll get into.
(08:13):
But for the past seven years, my focus has really been helping other businesses
with that transformational journey.
You know, I call myself a scalability consultant, and I love working with growing
businesses that are kind of at that place in their growth trajectory where everything
that used to be fun and simple is now messy and complex.
And I really kind of dive in and help them pinpoint the areas of their business
(08:35):
that are holding them back from reaching that next level,
helping them fix those parts that are broken, and really putting in place more
streamlined, smooth, and scalable operating infrastructure so they can kind
of get out of the weeds and actually grow their business.
So that's a little bit about, you know, what I do and where I came from.
And I'm sure we'll dive into different parts of that as we, as we go along.
(08:55):
So yes, let's, let's do it right away because I love all of that.
And like you, I think I just have always had a passion for, you know,
it ties into, I think, storytelling, like you were saying.
And so, you know, entrepreneurial ism as, you know, is kind of an open marketplace
where amazing stories come to life. So I just feel like that's so cool to be
(09:18):
connected to and a part of in some way, shape, or form.
And so I want to find out what would you say is the most fun part of any day
when you're working with someone? Oh, man.
The aha moments are the most fun moment. They don't happen every day, right?
But when you're kind of diving in with a business owner, they have a very specific
(09:40):
perspective perspective on what's going on in their business, their story.
Real or otherwise, there's this narrative that's in their head,
and they can only look in their business through their own eyes.
And being able to come in from an outside perspective and kind of look at their
business from a couple of different angles and see things that maybe they're not seeing themselves,
(10:02):
that look in their eye, you know, when they get this new perspective on their business.
And usually that leads to some new ideas for what we can do to solve problems
or to innovate, to grow, to improve.
That look is my favorite thing about what I do. I love that.
Yeah. And I identify with that a lot, too, because I feel like we have kind
(10:25):
of a lot of crossover in some of the things that we are working with clients on.
And certainly, you know, when I'm trying to dig in on some of the financial
or the money things or the people and personnel things,
it is fun when you kind of get to that place of realization and epiphany and or just,
you know, you kind of line things up and almost create a framework that allows
(10:47):
somebody to see something as a lot more tangible when a lot of times it's kind of like it's vision,
but, you know, I don't really know what the path looks like. Yeah. Yeah.
Especially in the financial world that you operate in, right?
There's like so many money stories that people tell themselves of that really
constrain the way that they see things.
So I'm sure like some of those aha moments are really kind of big ones when
(11:10):
you're helping people break down their money stories and actually get to the
truth of what's going on.
So many of our stories, I'm sure run down similar tracks and paths too,
because it's, I mean, it's never really about the money.
It's about so many other things and how we feel and what we are and identity.
And, you know, I always joke, what do I do? I'm part teacher,
(11:32):
part therapist. And eventually we talk about money, right?
Yeah. Yeah. The money is the means, right? To do with your life what you want.
And I view business the same way, right?
Like nobody starts a business because they want to run a business.
They start a business because they want to serve their clients.
They're really passionate about the value they can deliver. They start their
(11:52):
business because they want more, you know, freedom and agency or flexibility
in their life or they want to provide for their, their family.
But like the business is a vehicle.
I think so many times we get caught up with like, the business is the thing
that we're trying to like succeed with, but the business is not the thing.
A business is not a purpose. It's a vehicle for you to, you know,
achieve what, what, what you'd like to out of, out of life or, or otherwise.
(12:15):
No, I think that that's such a good way of putting it. And, and when you're
able to connect to a framework like that, I think a lot of times it makes it
a little bit easier to start to a look at it, like you said,
you know, Stephen Covey paradigm shift,
you're able to see things a little bit differently, more effectively. I want to, you know.
What are some of the most common challenges that you see people facing?
(12:36):
Yeah, that's a tough one, right? Because there's so many different kinds of things.
I mean, ultimately what it comes down to when businesses come to me,
right? They're seeking scalability. They want to scale their business.
Usually what's happened is the business has found a certain amount of success.
It's grown in size. and that
addition of volume and complexity
(13:00):
starts straining the business because most
of my clients have kind of built out their business on their own that you know
the processes the systems the way the business runs and once you hit you know
certain degrees of complexity and size a lot of that initial iteration of infrastructure
kind of starts to break down right and you know breaks zone in a few ways from inefficiency.
(13:23):
I think a lot of my clients would like to be more efficient than they are.
There's problems with visibility and control of the business,
just having a grasp of exactly what's going on as all of these new variables
are introduced and there's kind of more stuff in the mix.
And of course, you know, profit, right? Like profitability is a big challenge
as well of can you maintain or improve those profitability margins as you grow
(13:47):
in size and And as you start introducing kind of new variables into the mix,
whether those are new business lines, new service offerings, or product offerings,
a lot of the time, businesses kind of assume that certain degrees of success
that have worked in the past will translate to new ideas. And that's not always the case.
So, you know, it's really kind of, it all boils down to this idea that the business
(14:09):
has reached a new level, but the infrastructure of the business has not.
And that introduces a number of challenges that, you know, I love helping my
clients fix. No, and I appreciate how you describe that because a lot of times
I find when I'm talking to clients, we talk about.
Like a business having a life cycle. So that way, it kind of helps frame what
(14:30):
particular part of the cycle you're in may then lend itself to certain issues
or growing pains or what have you.
But it helps, I think also, my clients, again, step away, kind of see,
oh, I've only been thinking about it this way, or I've had a perpetual growth
mindset, which is always great until it isn't.
And so just to be able to be like, well, maybe it's because you don't know necessarily where you are.
(14:56):
And you've just felt like you're in this constant, like, you know,
getting people beyond the startup and growth mindset to like,
okay, you know what, you've got something that's maybe a little bit more mature now.
And therefore, you know, the things that you want to try to really dial into
are things that a more mature, stable business need to be looking at and not
this kind of constant growth, constant, you know, up and to to the right, which it's hard.
(15:21):
But there's no applicable timeline for everybody either. That's the other hard part.
It's like what one company's season might last 12 to 18 months,
could be three years for the next.
And so it's just kind of trying to really figure out and diagnose,
okay, where am I? And like you were talking about, what might be holding me back?
And people, stuff, infrastructure, we talk a lot about financial capitalization.
(15:47):
Are you able to to do the right things with the stuff that comes in,
all that kind of fun stuff, which is really, really interesting.
Capital, the resources you have. Yeah.
Yeah. And so maybe that's one thing that I know I wanted to ask you about.
So I commonly talk to a lot of people about what I call the concept of how do
you maximize profitability during that life cycle, which is something,
(16:08):
and then we kind of get into the scenario and the narrative of,
at some point, if you ever want to exit and a sale might potentially be involved,
whether it's some big sale to some disinterested third party,
to another owner, to your employee, whatever it is.
If you're going to have a liquidity event that's sale oriented at some point,
How do you position yourself for maximum success so that way when that time
comes, the delta between what you want and what you need is pretty big so you can negotiate, right?
(16:32):
But a lot of times business owners don't necessarily see,
oh, what do I need to do along the way to take enough out over time and set
aside value for myself so that way I don't over put myself in a challenging
position saying I have to sell in order to capitalize.
Capitalize yeah so that was a long-winded way to talk about
how how do you have a conversation that probably
(16:55):
maybe looks a little bit different but i imagine touches on some of that yeah
i i think profit and you and i've had this conversation right when when you
look at a profit and loss statement and that profit is all the way at the bottom
line it's it's almost set up for us to think that like profit is the end goal
it's like the the end of the story and it's and it's not not, right?
(17:15):
Profit is a resource that we can choose what to do with, right?
And there are choices that we have in business with what we want to do with our profit, right?
You mentioned one option, which is let's take some profit off the table so that
I can actually do the things in life that I want to do.
That's one of the purposes we started the business in the first place, right?
(17:36):
To have a meaningful and enjoyable life, provide for our family and the people that that we care about.
That's one option. Some other options for what you can do with profit when you
look at it as capital, as an asset, is I look into two broad buckets.
One is we can use this to invest in something new, some innovative idea.
(18:01):
Do we want to go after a new strategy? Do we want to enter a new market?
Do we want to create a new service line?
Do we want to invest this in R&D, that's one area that we can deploy capital.
And in that arena, I always work with my clients on looking at that in that.
Those decisions as investments, right, that have a return?
And what's the potential return on investment for those ideas that allow the
(18:24):
business to kind of win overall,
recognizing that usually in the arena of new and innovative and interesting,
not every idea is going to be successful, just like every, you know,
stock isn't going to be a winner, right in your financial portfolio,
you need your winners to cover for your losers.
So I work with businesses on
kind of creating creating an innovation strategy so that they're better,
(18:46):
you know, they're vetting those ideas in a more consistent way,
executing on them in a more consistent way and measuring the results to actually
learn whether those ideas have worked.
But the other area that we can deploy profit to grow the business is kind of
investing that profit into what I call the growth engine of the business.
It's the core repeatable process that any organization runs off of, right?
(19:08):
You You spend that profit, you invest it in sales and marketing to acquire new clients, right?
And you deliver your products and services to those clients.
And hopefully you deliver those products and services in a way that leaves enough
money on the table that you can then take that profit and reinvest it back into customer acquisition.
A lot of people think of when they look at how are we delivering our products
(19:29):
and services, they look at margin, like what's the percent, you know,
the profitability margin on the goods and services that we sell.
I look at it a little bit differently. I look at it from a return on investment
standpoint, just like we were just talking about with the innovation.
So when I invest a dollar of profitability into sales and marketing,
what's the return on that investment
I get back in profit and gross or marginal profit to the business?
(19:51):
And there's a couple of levers you can pull to increase that ROI,
your revenue, how much you're bringing in, your variable costs,
which is your operating expenses, and your cost of customer acquisition.
So I help my clients kind of look and dig into those three levers that they
can pull to not just increase profitability, but increase that return on investment of their profit.
(20:12):
Because ultimately, that's what's going to make the business better positioned
for a sale or an exit. I love that.
And especially as you're even starting what you were saying,
assigning purpose to profits, not just that they exist or that you are profitable
on paper, but that you got to do something meaningful with that in order for
(20:35):
it to really be of benefit and of value. you.
And I think that that's, yeah, I mean, that's such a helpful way of seeing it
that a lot of times, you know, people just don't see that, you know,
just you want to make sure you're in the green and not in the red.
And as long as, you know, to the degree to which that number is big enough that
you feel good about it. And that's kind of sometimes the way people see it.
I think another thing that I was fascinated by, you did a podcast,
(20:59):
I think, on continuous improvement and scalability.
And so there were a couple things in there that you just kind of started to
touch Sean. So I want to move into this domain completely with you.
But let me start with the critical question that I remember seeing and reading
and hearing. What is scalability?
I am so glad you asked this question, Brian. It's a question I'm really passionate about.
You referenced earlier in this conversation, the graph that's just constantly up.
(21:23):
And I think most people associate scalability with that idea of scaling.
The growth chart that looks like a hockey that is typically associated with
growth that is large in size and rapid. To me, what scalability actually means,
that's what I just described as one kind of scalability, right?
But scalability as a whole, what it actually means is the capacity to change
(21:47):
the size and scale of your business.
And I think where most people in that statement, the capacity to change in size,
most people focus too much on the size part and not enough on the capacity part.
The capacity is your ability to change in size.
And that's not about big or small or fast or slow.
That's about control, predictability, consistency, repeatability,
(22:10):
so that I want my clients to be in control of their business.
I don't want their business to run them. I want them to run their business.
And so by focusing on the capacity piece of how do we make this business a little
bit more consistent and repeatable and predictable so that I'm in control,
I have my hand on the lever to choose when we speed up or slow down,
when we grow in size or we pull back.
(22:31):
That's really what my focus is with my clients. Yes. And I love that.
And I was probably, I think, the most excited to have this part of our conversation
because, and I'm sure you and I could continue this for multiple hours.
We won't, but I really like how you describe that. And one of the things that
I've found that seems pretty challenging across a lot of domains is kind of
(22:53):
I categorize it and I describe it as like the operational stuff inside stuff,
whether it's your tech stack,
the things that are either efficient between tech people and process or not
to use to take a term out of a wonderful book, Nudge, where they talk about on a macro level sludge.
(23:14):
So things that create barriers to decision making and all that other stuff.
But I think, you know, like we've talked about as we go through cycles,
growth, different parts of that business life cycle, as you will,
it's kind of hard sometimes to see all of the internal things and the mechanisms.
And a lot of times, especially if you're if you're having a good period of time,
(23:35):
and you are experiencing rapid growth, you can rapidly outgrow things pretty
quick. for sure for sure so how you know let's maybe kind of peek under the
hood on some of the things.
That you run into and help people address?
And maybe let's start with the technology stack first, because I can safely
say, we see that a lot of times, most saliently in our practice,
(23:58):
when we're helping clients with employee benefits,
as a very interesting window, how easy or difficult is it for you to hire somebody,
and then keep them on board and then provide them value?
And how many systems have to be involved to do all of that?
So there's so much more a lot of times than just that component.
So what what do you do when you're working with somebody and maybe identifying
(24:19):
like, let's take a look at this from an operational or technology deployment standpoint?
Yeah. And and I think, I think the first important thing to point out,
you know, one of the most common mistakes I see with businesses that are trying
to scale is that they're spreading themselves too thin and focused on too many things, right?
Like, there's an infinite number of little, you know, processes and cogs under
(24:40):
the hood of any business. And if you try to fix them all at once,
then what you get is premature optimization.
It's not improving the business as a whole. And what you end up getting is that
because your resources are spread across so many things, you're spending way
too much time on things that aren't going to actually make much impact.
(25:01):
Where instead, if you focused that time, resources, and your capital on a couple
of pivotal places, then you can have a much bigger impact on the organization.
So, you know, I have to preface any conversation on technology on that because
technology is very overwhelming for a lot of people.
There's just a million options out there. We're constantly bombarded with the
(25:22):
newest and the latest and the greatest.
And, you know, now everyone's talking about AI and chatbots and how can we incorporate
in our business? And it's like...
All just calm down and take a breath, right? Because the thing that's going
to have the biggest impact on your business is that one weakest link.
And let's try to identify what that is so that we can solve that problem utilizing
technology or otherwise, because that's going to have the biggest impact.
(25:44):
I work a lot with services businesses where their product is people, right?
What we're trying to do is manage and organize people's time and intellectual
intellectual capacity in order to provide value to clients.
So, you know, a lot of the technologies that I'm working on with my clients
are things like, how do we, how do we better do project management?
(26:06):
How do we manage workload or do, you know, capacity planning for,
for the future so that we're adequately staffed? How do we do measure and track time?
How do we manage our relationships with our clients, CRM?
So there's a lot in kind of arena of technology of just, how do we collaborate better?
How do we stay organized with what we're doing? And how do we have access to
(26:28):
information that helps us be a little bit more agile to respond to what's going
on day-to-day in the business?
Because the way that we do that does change as the business grows in size and
complexity, as we kind of talked about at the start of this conversation.
A lot of my clients may start by running their business on a spreadsheet or off a whiteboard.
But when you're servicing 100 clients a month, when you used to service 10 a
(26:49):
month, you can't really do that that anymore.
So how do we put some technology to the table that helps us get that macro level
view to make sure that things don't slip through the cracks and help our teams
kind of just do what they do best in a more efficient way?
I like what you said, because it also for us in our practice and even for our
audience, because we work with both for profit, but we also work with a lot
(27:09):
of nonprofits and a lot of associations.
And so that whole, you know, our business is really people and relationships
really, you know, translates across all of that pretty effectively.
And I think that that that's what you described as a common issue,
regardless of how you file your taxes.
And so how do you go about diagnosing and triaging that kind of like,
(27:31):
what are the most salient things that we really want to address?
Or if there's six, what's priority one, two, three, to six? How do you do that?
Sure. So first of all, I have a framework that I bring to every engagement with
a client where there's really kind of four main stages that a company grows through as they scale.
It's traction, profit, capacity, and innovation.
(27:53):
And just to quickly touch on each, traction is all about, do we have a consistent
and repeatable process for acquiring new clients?
Profit is, can we deliver our goods and services in a way that leaves enough
profit on the table that we can reinvest into growth? We talked about that a second ago.
Third is the capacity piece, which is as the business scales in size,
(28:14):
are we able to take on more volume without without balls being dropped,
without things starting to break down?
And fourth is innovation, which is, is there that organized and data-driven
way that we're implementing new ideas? So right off the bat.
I'm putting my clients into one of those four buckets, right?
Based on where they are at in their growth.
And we're only focusing on one of them. So that's kind of layer number one.
(28:37):
And then based on each one of those, typically we're kind of digging under the hood.
There's going to be different metrics that we're looking at,
whether in the profit category, we're looking at what's that marginal profit,
what's that return on investment.
If it's traction, we're looking at what's your customer conversion rate at each
stage in the sales process.
If it's capacity building, We're mapping out the process of your workflow to
(29:00):
try to identify the specific steps where bottlenecks are occurring,
because that is what kills a team's ability to service volume is our bottlenecks
in the process or defects where things are kind of getting through where they shouldn't.
And, you know, each of those areas are going to help us hone in on,
oh, okay, so the real bottlenecks are these parts of the process.
Let's solve those problems, right? Or if we're looking at the traction piece,
(29:21):
it's where are clients falling off in that customer life cycle?
Or if it's profit, where in that profitability model are the areas that are
really taking away from profitability that we can look for opportunities for
efficiency or profit growth?
Maybe it's changing pricing by pulling the revenue lever. Maybe it's increasing
(29:41):
efficiency in a particular part of the process will lower our variable expenses
so that there's more profit. it.
So each of those four buckets, we're kind of honing in on a particular area. That's the weak point.
And from there, it's just, you know, good old fashioned, you know,
consulting, let's just have a conversation.
Let's talk through the issues, let's problem solve, and let's figure out how
we can actually alleviate those issues.
(30:02):
Love that. I mean, and I love those four domains too,
because, you know, each one does create such a helpful and appropriate framework
to be able to zoom in and to see things but to to see it with precision because
you know i mean it is it's it's very hard to you know a lot of times you have
a big picture perspective in general
(30:22):
But how do you kind of get in and diagnose, or maybe there's a symptom,
but you just don't know what the root cause is, right?
You know, something's not right, but how do we figure it out?
And if it hasn't been apparent, like I'm a big data guy, right?
Like I, numbers don't lie, you know, like we can tell ourselves any kind of
story we want about what's going on and why it's going on, but like the numbers don't lie.
(30:45):
So, and it's really about both, right? You have to be able to take what the
data is showing and map it to what our eyes are seeing on the ground and what
we inherently know about our organizations,
because the marriage of those two is going to tell the real story,
because data without context is really helpful or actionable.
So it's kind of a combination. I like that because,
yeah, sometimes not having the data itself is the issue to be able to see things,
(31:10):
but then also making sure that once you do have it, it becomes formative and
you have a path to run down and then signposts to know that you're on the right
track or you've gotten off.
I feel like a part of a lot of this that comes together, but there's a domain
that I think is also challenging.
And I'm interested to kind of see how this fits into your engagements.
(31:30):
And that's kind of the people part, the personnel and kind of the culture of an organization.
I know culture is a big word that has a lot of meaning.
There's also a lot of focus and an emphasis on creating good culture and also
avoiding bad, but it also is sometimes amorphous and intangible.
And I think hard to kind of really create an effective context for it as it
(31:52):
applies to an organization or to a business.
So how do you see that kind of coming into play?
And if it seems like maybe there's like a culture concern on some level or a
personnel concern, how would you help somebody try to go about addressing that?
Sure. I mean, first I have to caveat that there There are people out there who
are not me that are so much better when it comes to human resources.
(32:17):
Team dynamics, you know, culture building, leadership and management.
But here's kind of the lens that I bring to the table on the subject of scalability.
Because, you know, I've led teams before, before starting my business,
you know, I was the chief operating officer of a company.
And one of the biggest kind of ethos that I bring to any team that I lead or
(32:38):
client client that I'm working with on the subject of culture is a mentality
that we always look to blame the system first, blame the system first.
It's like, that is my culture ethos, which is when something goes wrong,
inevitably things always go wrong, right?
When something goes wrong in business as an organization, our first response
should be to try to look for, well, what went wrong with the system?
(33:03):
What went wrong with our process, our policy, the tools we used,
the systems that are in place, was there a breakdown in the system that explained why this happened?
And if so, let's dig in and see if we can solve that problem before we look
to just find blame in a person. And when you do that, what ends up happening is a couple of things. A.
People don't fear retribution and they're more willing to share and be transparent when things go wrong.
(33:27):
And they're now part of the process to solve the problem because they don't
fear immediate retribution.
But interestingly, it also holds people more accountable because when they know
that their supervisors, the company as a whole, will try to support them first
and find fault in the system first.
When we look to find fault in the system and there's nothing there and it actually
(33:49):
is the the fault of the person, they're more likely to be accountable to that
because they know that we've exhausted every other effort before we find fault
in them and they own it. They're more accountable.
So I always, I'm a big systems guy and I think sometimes we can kind of take
the humanity out of that, but great systems are what create great cultures and
(34:10):
what allow people to be their best because they know what's expected.
They have ways to measure their performance against those expectations and they
have the tools to do their job well.
And if they don't, let's fix that so that they can do even better.
Man, I could not have envisioned a better answer. I love that.
And I think, again, we share that common ethos dynamic of how do you...
(34:34):
I'm always big on the concept of getting everybody on the bus.
And then once you're on the bus, getting everybody in the the right seats.
And I think so much of that capacity building and what people would tangibly
say good culture looks like is when people can show up,
be their best selves and spend most of their time on the things that they're really good at.
(34:57):
A lot of times it's when someone is having to do things that either they're
not good at, or maybe they just shouldn't be doing at all because of some kind
of systemic inefficiency or just some kind of, maybe again, they're not in the right right seat.
And so being able to really figure that out is so materially helpful because
then, like you described, it's this collaborative environment where we're all.
(35:19):
Trying to, you know, make one another better while the organization gets better.
And yeah, you definitely take the fear and the air out of that notion that,
you know, we're always going to go hunting for blame and find the person responsible
and other stuff, which, you know, I think is sometimes,
you know, not as easy to do in certain circumstances, depending on,
(35:39):
you know, how people are wired and all the other stuff. But I think that that's such a great approach.
Yeah. But I mean, discipline is important in an organization.
Accountability is important. but those things are actually really
really hard if you don't have strong systems and
infrastructure in place right if you're just operating off the
off of a whim and kind of just relationships and that's it like that it's really
(36:00):
hard to hold people to account in an environment like that but when their structure
when their systems it becomes a lot more easy just it's a lot smoother to be
able to create that culture of dis-accountability no i love that yeah and and
i And I think that that has,
you know, it directly fits back into all of those other things that you were
talking about, all of those domains and, you know, the better the system,
(36:20):
the better the process, the better the culture,
the better the overall deliverable that goes out because it's an inside out, right?
When you're really firing in all cylinders, culturally, as a team,
as people, then your clients get the best version of you anyway.
And that's, I mean, that's when everybody wins. Yeah. So, wow.
Because I know I could literally continue this conversation with you for another
hour. I want to kind of wind it down for now because we, man,
(36:44):
we covered so much good ground and I'm so glad we could do that.
So do you have any parting thoughts or any one thing that we didn't cover that
you wanted to talk about?
And in addition to that, any particular shout outs you want to make?
That's a tough one. I mean, hey, just shout out to all the entrepreneurs out
there. Like, this thing we do is so difficult.
It's entrepreneurship's challenging.
(37:06):
It's the hardest thing I've ever done. But because of that, it has created this
amazing opportunity for me to kind of grow, not only as a professional, but as a person.
I've learned more about myself as an individual, as a person,
through entrepreneurship than anything else I've ever done.
So like, shout out to all the entrepreneurs that are doing it out there.
Like it takes, it takes guts.
(37:27):
I think often on the subject of entrepreneurship, it's really easy to put success
stories on pedestals and to think that the version of what it means to be successful
in business is one thing.
It's like the thing that we see on TV and in Forbes and Inc Magazine and Entrepreneur
(37:47):
Magazine really does a disservice.
And I think ultimately what it makes people think is that what you need to be
successful successful is a great idea and a lot of hard work and grit.
I think that's what people think is required to be successful in business.
And that's not true. I know it because I've seen a lot of great ideas run by
(38:11):
business owners who work their butts off fail.
And I'm one of them. This is my third business.
I've been through two others that's ultimately closed shop.
So if it was just about grit and
a good idea, then there'd be a lot more successful business is out there.
What it actually is required to be successful in business is systems,
structure, and just the discipline to continuously improve.
(38:35):
You just got to keep doing the thing. And each small and incremental improvement
to the business stacked up over time is what actually takes you across the finish line.
So as you kind of navigate that journey of incremental improvement,
just remember that, A, you're doing your best, and that's usually enough.
And B, when it comes to of the amount of time, resources, and energy that you
(38:57):
have, just be really smart about where you're putting and focusing those efforts.
Because focusing that energy on a few critical things is going to have a much
bigger impact than trying to do too many things all at once.
So that's a long and rambling way to kind of answer that final question on kind
of how I view entrepreneurship and success. Now, that was beautiful.
And I'm just going to pull out one of the words that you just said impact yeah
(39:21):
i think that's one for me that speaks a lot you know
It doesn't all have to look a particular way, but most of the people that I
know in any form of success built their lives around impact.
And so in having that connection and understanding, you don't have to look like the top Inc. 500.
(39:42):
That's okay. But you can have a massive impact and fly under the radar and still do amazing things.
So here, here, here, here to everything that you just said, my friend,
thank you so much for being on with me.
This was a great time. And I think I will say this, it'll be a plug for us to
have a part two to this conversation.
Because I have so many notes that I was writing down. I'm like,
(40:03):
yeah, we're going to have to do this again sometime.
So there's a plug for a future recording. How's that sound? That sounds great.
Let's do it. All right. Thank you, my friends. Oh, last thing. I can't forget this.
How can somebody get a hold of you? Because you're amazing. And I'm sure a lot
of the audience wants to reach out and pick your brain and probably work with
you. So what's the best way for somebody to get a hold of you?
Sure. Thanks for asking. You can find me on LinkedIn, Brad Eisenberg.
(40:25):
I'm pretty active on LinkedIn, or you can go to my website. It's BeLeanBusiness.com.
And there's a lot of great information on what I do, but also just a lot of
great resources and stories about business scalability in general.
So BeLeanBusiness.com.
Sign up for the blog. I did. I love it. Great stuff. Thank you, my friend. All right.
Music.
(40:55):
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(41:17):
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(41:40):
Securities offered through Dempsey Lord Smith, LLC, member FINRA SIPC,
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You're listening to the Haney Company Financial Guy Show.
No nonsense, just a crazy mix of life, business, the funny, and of course,
we're going to talk about your money.
But just sit back, relax, and enjoy the ride. What could go wrong?
All right, welcome to another episode of the Haney Company Financial Guy Show.
(00:28):
I am always always excited for all the amazing guests that I get to have on
this show, but particularly.
For this episode's guests, because Brad Eisenberg and I get to talk about something
in probably an area that we haven't really covered ground on.
So this is going to be treading of new ground on a topic that we'll have to
see how it goes today, Brad, because I think knowing you and I,
(00:50):
we can take it any number of wonderful places.
So I'm very, very excited for this conversation. I appreciate you joining me today.
Of course. Thanks for having me. Let's have some fun. All right.
Well, the fun usually starts after the first initial questions. They are tough.
They're like screeners, right? So you got to get through the gauntlet to get
to the good stuff. So let's just hit it hot and heavy.
What is the number one place that you have always wanted to visit,
(01:12):
but you have yet to visit? Oh, man. Yeah. Hidden and hard real soon.
I am an avid traveler. I absolutely love discovering different corners of the world.
For many years, my number one was hiking the Inca Trail to Machu Picchu.
And fortunately, I've crossed that one off the list.
So my number two has become my number one, which is to go scuba diving on the
(01:34):
Great Barrier Reef off Australia.
And fingers crossed, it's looking likely that that one will happen next year.
So I'm pretty excited. it. Oh, wow. Yeah, that is awesome.
Certainly. So your first one sounds amazing. It's somewhere in my list and on
my radar for sure. So I bet that was just fabulous.
Life-changing. Absolutely life-changing. Yeah. Now scuba diving for me.
(01:56):
So there's only one thing on the entire planet I'm afraid of and that's sharks.
So it doesn't quite ever make it anywhere with me just because of that.
But in other waters or in other parts of the country, I'm sure it would be amazing.
But But yeah, I mean, the Great Barrier Reef itself and that whole area in Australia sounds awesome.
So we'll have to have a part two after you after you accomplish that. Oh, for sure.
(02:18):
All right would you rather explore outer space or under the ocean and i'm wondering
how based on on your answer to the first question you're going to answer this
one you could probably guess the answer.
Under yeah under the ocean i mean a there's more stuff down there you know like
outer space is pretty empty and i guess i'm also one of these guys that just
(02:40):
likes likes to always have one foot grounded in some reality that i'm in while
the other one is kind of reaching to new territory So something about the ocean
being a little bit closer to home,
being able to relate it to my life and world is probably is what pulls me in
that direction, as opposed to just being off floating somewhere in space.
Yeah i i i think i i
(03:01):
waver back and forth neither of these for me really resonates
to be honest because there's both like there's the
scariness of it and then there's also just kind of the you know the unknown
part of do i really feel that this is like a dimension that i'm super interested
in but i think i i would certainly agree with you i lean more towards under
the ocean despite my my shark fear simply because you know there's just got
(03:22):
to be some really cool unexplored territory out,
you know, just for you without sharks. Yeah, I know. I know they're not everywhere.
So I like that. All right. If you could have a meal with someone famous,
alive or dead, who would you want to have a meal with?
You know, I think I would love to have a meal with Julia Child.
(03:44):
I'm an avid cook. I love cooking. I love food. I love watching things about food.
I love going out to incredible places, whipping up meals at home.
And I mean, Julia, not only because because of the food connection,
just strikes me as somebody whose success was driven by her authenticity.
She was like exactly who she was. And probably a lot of people at the time would
(04:06):
have deemed her completely unqualified to do the things that she did.
You know, not a not a professionally trained cook, you know,
certainly no background in TV.
Her cookbook was the first thing she had written.
And she was kind of an underdog. But it was that authenticity and charm that
really was behind her success and not the things that might've been traditionally
(04:26):
associated or attributed to success.
And I think that aspect just really intrigues me. I'd love to have a meal with her. Hmm, I love that.
And don't know that I knew half of what you had shared about her.
So yeah, that sounds fascinating and fun.
Wow, I love that. That's great. Yeah, good answer, good answer.
All right, besides this podcast, which of course is everybody's number, what other podcast?
(04:48):
Always, always. What other podcast though? Oh.
Have you enjoyed that you would want somebody else to consider listening to
as well? Yeah, this is a tough one. I'd probably choose between, you know, two.
I mean, Malcolm Gladwell's revisionist history is incredible.
He's just, he has this way with words. He's an amazing storyteller.
But I think if I had to pick one, it would be How I Built This with Guy Raz.
(05:10):
I mean, obviously, you know, passionate about business and entrepreneurship.
And I love, love, love hearing people's origin stories of how they came to start
their business, their journey along the the way.
And I think Guy is just incredible at asking insightful questions that really
just get these people that are typically we put on pedestals as,
you know, models of success.
(05:30):
And he just has this way of humanizing them and getting us all to see that like,
you know, behind every success, there's a lot of, you know, dirt and struggle and just humanity.
And I love seeing kind of the humanity behind a business story and kind of what
got people where they're I love both of that.
And I think there's not a Malcolm Gladwell book I have not consumed at least
(05:51):
once, not more than once.
So, you know, that's a tough question. I still think Blink, probably because
I've read it the most number of times.
But I mean, again, like, you know, I can't, you know, his name's on on the cover.
I'm reading it. That's pretty much the way I approach it.
Like mouth. He just dropped a podcast about how Blink was going to become a movie.
(06:13):
And there was an entire screenplay written to be adapted, you know,
to adapt Blink to the silver screen.
And it never happened. And he tells that whole story of what killed that project.
So you got to check it out. All right. That was a whole bunch of good stuff there as well.
Love it. All right. Right. Well, but let's stay on that origin theme,
because now I would love for you to tell the audience a little bit about yourself,
(06:36):
because what you do is is fascinating and fun.
So what's the story behind the story?
You know, I think there's probably always been an entrepreneur in me,
you know, ever since I was a kid organizing fundraisers for school.
But I actually started my first business in college.
That's when I guess the passion really ignited where I saw the opportunity to
(07:00):
kind of create my own path through life.
I actually went to school for mechanical engineering and realized by the end
of college that I didn't want to be a mechanical engineer.
I was way more interested in engineering businesses than mechanical systems.
And this path of entrepreneurship promised this life that you could pursue purpose
and passion and make a living out of it where you weren't so dependent upon other people.
(07:25):
And that was really intoxicating for me at the time. And so that first business
was a bike-sharing business, probably a decade before the streets of every major
city became littered with scooters and bikes.
We were actually the first to do it on campus at the University of Maryland in 2008.
And around the same time, I joined an early startup in the energy efficiency
business and kind of grew with that company from the ground up,
(07:47):
ultimately leading that company as the chief operating officer and kind of...
Seeing that company grow from a teenage, undisciplined startup into a mature
and sophisticated operating organization was just the best thing that I've ever done.
And it's really what inspired me to start my consulting business at the beginning of 2017.
So BeLean picked up at the tail end of that other business, which I'm sure we'll get into.
(08:13):
But for the past seven years, my focus has really been helping other businesses
with that transformational journey.
You know, I call myself a scalability consultant, and I love working with growing
businesses that are kind of at that place in their growth trajectory where everything
that used to be fun and simple is now messy and complex.
And I really kind of dive in and help them pinpoint the areas of their business
(08:35):
that are holding them back from reaching that next level,
helping them fix those parts that are broken, and really putting in place more
streamlined, smooth, and scalable operating infrastructure so they can kind
of get out of the weeds and actually grow their business.
So that's a little bit about, you know, what I do and where I came from.
And I'm sure we'll dive into different parts of that as we, as we go along.
(08:55):
So yes, let's, let's do it right away because I love all of that.
And like you, I think I just have always had a passion for, you know,
it ties into, I think, storytelling, like you were saying.
And so, you know, entrepreneurial ism as, you know, is kind of an open marketplace
where amazing stories come to life. So I just feel like that's so cool to be
(09:18):
connected to and a part of in some way, shape, or form.
And so I want to find out what would you say is the most fun part of any day
when you're working with someone? Oh, man.
The aha moments are the most fun moment. They don't happen every day, right?
But when you're kind of diving in with a business owner, they have a very specific
(09:40):
perspective perspective on what's going on in their business, their story.
Real or otherwise, there's this narrative that's in their head,
and they can only look in their business through their own eyes.
And being able to come in from an outside perspective and kind of look at their
business from a couple of different angles and see things that maybe they're not seeing themselves,
(10:02):
that look in their eye, you know, when they get this new perspective on their business.
And usually that leads to some new ideas for what we can do to solve problems
or to innovate, to grow, to improve.
That look is my favorite thing about what I do. I love that.
Yeah. And I identify with that a lot, too, because I feel like we have kind
(10:25):
of a lot of crossover in some of the things that we are working with clients on.
And certainly, you know, when I'm trying to dig in on some of the financial
or the money things or the people and personnel things,
it is fun when you kind of get to that place of realization and epiphany and or just,
you know, you kind of line things up and almost create a framework that allows
(10:47):
somebody to see something as a lot more tangible when a lot of times it's kind of like it's vision,
but, you know, I don't really know what the path looks like. Yeah. Yeah.
Especially in the financial world that you operate in, right?
There's like so many money stories that people tell themselves of that really
constrain the way that they see things.
So I'm sure like some of those aha moments are really kind of big ones when
(11:10):
you're helping people break down their money stories and actually get to the
truth of what's going on.
So many of our stories, I'm sure run down similar tracks and paths too,
because it's, I mean, it's never really about the money.
It's about so many other things and how we feel and what we are and identity.
And, you know, I always joke, what do I do? I'm part teacher,
(11:32):
part therapist. And eventually we talk about money, right?
Yeah. Yeah. The money is the means, right? To do with your life what you want.
And I view business the same way, right?
Like nobody starts a business because they want to run a business.
They start a business because they want to serve their clients.
They're really passionate about the value they can deliver. They start their
(11:52):
business because they want more, you know, freedom and agency or flexibility
in their life or they want to provide for their, their family.
But like the business is a vehicle.
I think so many times we get caught up with like, the business is the thing
that we're trying to like succeed with, but the business is not the thing.
A business is not a purpose. It's a vehicle for you to, you know,
achieve what, what, what you'd like to out of, out of life or, or otherwise.
(12:15):
No, I think that that's such a good way of putting it. And, and when you're
able to connect to a framework like that, I think a lot of times it makes it
a little bit easier to start to a look at it, like you said,
you know, Stephen Covey paradigm shift,
you're able to see things a little bit differently, more effectively. I want to, you know.
What are some of the most common challenges that you see people facing?
(12:36):
Yeah, that's a tough one, right? Because there's so many different kinds of things.
I mean, ultimately what it comes down to when businesses come to me,
right? They're seeking scalability. They want to scale their business.
Usually what's happened is the business has found a certain amount of success.
It's grown in size. and that
addition of volume and complexity
(13:00):
starts straining the business because most
of my clients have kind of built out their business on their own that you know
the processes the systems the way the business runs and once you hit you know
certain degrees of complexity and size a lot of that initial iteration of infrastructure
kind of starts to break down right and you know breaks zone in a few ways from inefficiency.
(13:23):
I think a lot of my clients would like to be more efficient than they are.
There's problems with visibility and control of the business,
just having a grasp of exactly what's going on as all of these new variables
are introduced and there's kind of more stuff in the mix.
And of course, you know, profit, right? Like profitability is a big challenge
as well of can you maintain or improve those profitability margins as you grow
(13:47):
in size and And as you start introducing kind of new variables into the mix,
whether those are new business lines, new service offerings, or product offerings,
a lot of the time, businesses kind of assume that certain degrees of success
that have worked in the past will translate to new ideas. And that's not always the case.
So, you know, it's really kind of, it all boils down to this idea that the business
(14:09):
has reached a new level, but the infrastructure of the business has not.
And that introduces a number of challenges that, you know, I love helping my
clients fix. No, and I appreciate how you describe that because a lot of times
I find when I'm talking to clients, we talk about.
Like a business having a life cycle. So that way, it kind of helps frame what
(14:30):
particular part of the cycle you're in may then lend itself to certain issues
or growing pains or what have you.
But it helps, I think also, my clients, again, step away, kind of see,
oh, I've only been thinking about it this way, or I've had a perpetual growth
mindset, which is always great until it isn't.
And so just to be able to be like, well, maybe it's because you don't know necessarily where you are.
(14:56):
And you've just felt like you're in this constant, like, you know,
getting people beyond the startup and growth mindset to like,
okay, you know what, you've got something that's maybe a little bit more mature now.
And therefore, you know, the things that you want to try to really dial into
are things that a more mature, stable business need to be looking at and not
this kind of constant growth, constant, you know, up and to to the right, which it's hard.
(15:21):
But there's no applicable timeline for everybody either. That's the other hard part.
It's like what one company's season might last 12 to 18 months,
could be three years for the next.
And so it's just kind of trying to really figure out and diagnose,
okay, where am I? And like you were talking about, what might be holding me back?
And people, stuff, infrastructure, we talk a lot about financial capitalization.
(15:47):
Are you able to to do the right things with the stuff that comes in,
all that kind of fun stuff, which is really, really interesting.
Capital, the resources you have. Yeah.
Yeah. And so maybe that's one thing that I know I wanted to ask you about.
So I commonly talk to a lot of people about what I call the concept of how do
you maximize profitability during that life cycle, which is something,
(16:08):
and then we kind of get into the scenario and the narrative of,
at some point, if you ever want to exit and a sale might potentially be involved,
whether it's some big sale to some disinterested third party,
to another owner, to your employee, whatever it is.
If you're going to have a liquidity event that's sale oriented at some point,
How do you position yourself for maximum success so that way when that time
comes, the delta between what you want and what you need is pretty big so you can negotiate, right?
(16:32):
But a lot of times business owners don't necessarily see,
oh, what do I need to do along the way to take enough out over time and set
aside value for myself so that way I don't over put myself in a challenging
position saying I have to sell in order to capitalize.
Capitalize yeah so that was a long-winded way to talk about
how how do you have a conversation that probably
(16:55):
maybe looks a little bit different but i imagine touches on some of that yeah
i i think profit and you and i've had this conversation right when when you
look at a profit and loss statement and that profit is all the way at the bottom
line it's it's almost set up for us to think that like profit is the end goal
it's like the the end of the story and it's and it's not not, right?
(17:15):
Profit is a resource that we can choose what to do with, right?
And there are choices that we have in business with what we want to do with our profit, right?
You mentioned one option, which is let's take some profit off the table so that
I can actually do the things in life that I want to do.
That's one of the purposes we started the business in the first place, right?
(17:36):
To have a meaningful and enjoyable life, provide for our family and the people that that we care about.
That's one option. Some other options for what you can do with profit when you
look at it as capital, as an asset, is I look into two broad buckets.
One is we can use this to invest in something new, some innovative idea.
(18:01):
Do we want to go after a new strategy? Do we want to enter a new market?
Do we want to create a new service line?
Do we want to invest this in R&D, that's one area that we can deploy capital.
And in that arena, I always work with my clients on looking at that in that.
Those decisions as investments, right, that have a return?
And what's the potential return on investment for those ideas that allow the
(18:24):
business to kind of win overall,
recognizing that usually in the arena of new and innovative and interesting,
not every idea is going to be successful, just like every, you know,
stock isn't going to be a winner, right in your financial portfolio,
you need your winners to cover for your losers.
So I work with businesses on
kind of creating creating an innovation strategy so that they're better,
(18:46):
you know, they're vetting those ideas in a more consistent way,
executing on them in a more consistent way and measuring the results to actually
learn whether those ideas have worked.
But the other area that we can deploy profit to grow the business is kind of
investing that profit into what I call the growth engine of the business.
It's the core repeatable process that any organization runs off of, right?
(19:08):
You You spend that profit, you invest it in sales and marketing to acquire new clients, right?
And you deliver your products and services to those clients.
And hopefully you deliver those products and services in a way that leaves enough
money on the table that you can then take that profit and reinvest it back into customer acquisition.
A lot of people think of when they look at how are we delivering our products
(19:29):
and services, they look at margin, like what's the percent, you know,
the profitability margin on the goods and services that we sell.
I look at it a little bit differently. I look at it from a return on investment
standpoint, just like we were just talking about with the innovation.
So when I invest a dollar of profitability into sales and marketing,
what's the return on that investment
I get back in profit and gross or marginal profit to the business?
(19:51):
And there's a couple of levers you can pull to increase that ROI,
your revenue, how much you're bringing in, your variable costs,
which is your operating expenses, and your cost of customer acquisition.
So I help my clients kind of look and dig into those three levers that they
can pull to not just increase profitability, but increase that return on investment of their profit.
(20:12):
Because ultimately, that's what's going to make the business better positioned
for a sale or an exit. I love that.
And especially as you're even starting what you were saying,
assigning purpose to profits, not just that they exist or that you are profitable
on paper, but that you got to do something meaningful with that in order for
(20:35):
it to really be of benefit and of value. you.
And I think that that's, yeah, I mean, that's such a helpful way of seeing it
that a lot of times, you know, people just don't see that, you know,
just you want to make sure you're in the green and not in the red.
And as long as, you know, to the degree to which that number is big enough that
you feel good about it. And that's kind of sometimes the way people see it.
I think another thing that I was fascinated by, you did a podcast,
(20:59):
I think, on continuous improvement and scalability.
And so there were a couple things in there that you just kind of started to
touch Sean. So I want to move into this domain completely with you.
But let me start with the critical question that I remember seeing and reading
and hearing. What is scalability?
I am so glad you asked this question, Brian. It's a question I'm really passionate about.
You referenced earlier in this conversation, the graph that's just constantly up.
(21:23):
And I think most people associate scalability with that idea of scaling.
The growth chart that looks like a hockey that is typically associated with
growth that is large in size and rapid. To me, what scalability actually means,
that's what I just described as one kind of scalability, right?
But scalability as a whole, what it actually means is the capacity to change
(21:47):
the size and scale of your business.
And I think where most people in that statement, the capacity to change in size,
most people focus too much on the size part and not enough on the capacity part.
The capacity is your ability to change in size.
And that's not about big or small or fast or slow.
That's about control, predictability, consistency, repeatability,
(22:10):
so that I want my clients to be in control of their business.
I don't want their business to run them. I want them to run their business.
And so by focusing on the capacity piece of how do we make this business a little
bit more consistent and repeatable and predictable so that I'm in control,
I have my hand on the lever to choose when we speed up or slow down,
when we grow in size or we pull back.
(22:31):
That's really what my focus is with my clients. Yes. And I love that.
And I was probably, I think, the most excited to have this part of our conversation
because, and I'm sure you and I could continue this for multiple hours.
We won't, but I really like how you describe that. And one of the things that
I've found that seems pretty challenging across a lot of domains is kind of
(22:53):
I categorize it and I describe it as like the operational stuff inside stuff,
whether it's your tech stack,
the things that are either efficient between tech people and process or not
to use to take a term out of a wonderful book, Nudge, where they talk about on a macro level sludge.
(23:14):
So things that create barriers to decision making and all that other stuff.
But I think, you know, like we've talked about as we go through cycles,
growth, different parts of that business life cycle, as you will,
it's kind of hard sometimes to see all of the internal things and the mechanisms.
And a lot of times, especially if you're if you're having a good period of time,
(23:35):
and you are experiencing rapid growth, you can rapidly outgrow things pretty
quick. for sure for sure so how you know let's maybe kind of peek under the
hood on some of the things.
That you run into and help people address?
And maybe let's start with the technology stack first, because I can safely
say, we see that a lot of times, most saliently in our practice,
(23:58):
when we're helping clients with employee benefits,
as a very interesting window, how easy or difficult is it for you to hire somebody,
and then keep them on board and then provide them value?
And how many systems have to be involved to do all of that?
So there's so much more a lot of times than just that component.
So what what do you do when you're working with somebody and maybe identifying
(24:19):
like, let's take a look at this from an operational or technology deployment standpoint?
Yeah. And and I think, I think the first important thing to point out,
you know, one of the most common mistakes I see with businesses that are trying
to scale is that they're spreading themselves too thin and focused on too many things, right?
Like, there's an infinite number of little, you know, processes and cogs under
(24:40):
the hood of any business. And if you try to fix them all at once,
then what you get is premature optimization.
It's not improving the business as a whole. And what you end up getting is that
because your resources are spread across so many things, you're spending way
too much time on things that aren't going to actually make much impact.
(25:01):
Where instead, if you focused that time, resources, and your capital on a couple
of pivotal places, then you can have a much bigger impact on the organization.
So, you know, I have to preface any conversation on technology on that because
technology is very overwhelming for a lot of people.
There's just a million options out there. We're constantly bombarded with the
(25:22):
newest and the latest and the greatest.
And, you know, now everyone's talking about AI and chatbots and how can we incorporate
in our business? And it's like...
All just calm down and take a breath, right? Because the thing that's going
to have the biggest impact on your business is that one weakest link.
And let's try to identify what that is so that we can solve that problem utilizing
technology or otherwise, because that's going to have the biggest impact.
(25:44):
I work a lot with services businesses where their product is people, right?
What we're trying to do is manage and organize people's time and intellectual
intellectual capacity in order to provide value to clients.
So, you know, a lot of the technologies that I'm working on with my clients
are things like, how do we, how do we better do project management?
(26:06):
How do we manage workload or do, you know, capacity planning for,
for the future so that we're adequately staffed? How do we do measure and track time?
How do we manage our relationships with our clients, CRM?
So there's a lot in kind of arena of technology of just, how do we collaborate better?
How do we stay organized with what we're doing? And how do we have access to
(26:28):
information that helps us be a little bit more agile to respond to what's going
on day-to-day in the business?
Because the way that we do that does change as the business grows in size and
complexity, as we kind of talked about at the start of this conversation.
A lot of my clients may start by running their business on a spreadsheet or off a whiteboard.
But when you're servicing 100 clients a month, when you used to service 10 a
(26:49):
month, you can't really do that that anymore.
So how do we put some technology to the table that helps us get that macro level
view to make sure that things don't slip through the cracks and help our teams
kind of just do what they do best in a more efficient way?
I like what you said, because it also for us in our practice and even for our
audience, because we work with both for profit, but we also work with a lot
(27:09):
of nonprofits and a lot of associations.
And so that whole, you know, our business is really people and relationships
really, you know, translates across all of that pretty effectively.
And I think that that that's what you described as a common issue,
regardless of how you file your taxes.
And so how do you go about diagnosing and triaging that kind of like,
(27:31):
what are the most salient things that we really want to address?
Or if there's six, what's priority one, two, three, to six? How do you do that?
Sure. So first of all, I have a framework that I bring to every engagement with
a client where there's really kind of four main stages that a company grows through as they scale.
It's traction, profit, capacity, and innovation.
(27:53):
And just to quickly touch on each, traction is all about, do we have a consistent
and repeatable process for acquiring new clients?
Profit is, can we deliver our goods and services in a way that leaves enough
profit on the table that we can reinvest into growth? We talked about that a second ago.
Third is the capacity piece, which is as the business scales in size,
(28:14):
are we able to take on more volume without without balls being dropped,
without things starting to break down?
And fourth is innovation, which is, is there that organized and data-driven
way that we're implementing new ideas? So right off the bat.
I'm putting my clients into one of those four buckets, right?
Based on where they are at in their growth.
And we're only focusing on one of them. So that's kind of layer number one.
(28:37):
And then based on each one of those, typically we're kind of digging under the hood.
There's going to be different metrics that we're looking at,
whether in the profit category, we're looking at what's that marginal profit,
what's that return on investment.
If it's traction, we're looking at what's your customer conversion rate at each
stage in the sales process.
If it's capacity building, We're mapping out the process of your workflow to
(29:00):
try to identify the specific steps where bottlenecks are occurring,
because that is what kills a team's ability to service volume is our bottlenecks
in the process or defects where things are kind of getting through where they shouldn't.
And, you know, each of those areas are going to help us hone in on,
oh, okay, so the real bottlenecks are these parts of the process.
Let's solve those problems, right? Or if we're looking at the traction piece,
(29:21):
it's where are clients falling off in that customer life cycle?
Or if it's profit, where in that profitability model are the areas that are
really taking away from profitability that we can look for opportunities for
efficiency or profit growth?
Maybe it's changing pricing by pulling the revenue lever. Maybe it's increasing
(29:41):
efficiency in a particular part of the process will lower our variable expenses
so that there's more profit. it.
So each of those four buckets, we're kind of honing in on a particular area. That's the weak point.
And from there, it's just, you know, good old fashioned, you know,
consulting, let's just have a conversation.
Let's talk through the issues, let's problem solve, and let's figure out how
we can actually alleviate those issues.
(30:02):
Love that. I mean, and I love those four domains too,
because, you know, each one does create such a helpful and appropriate framework
to be able to zoom in and to see things but to to see it with precision because
you know i mean it is it's it's very hard to you know a lot of times you have
a big picture perspective in general
(30:22):
But how do you kind of get in and diagnose, or maybe there's a symptom,
but you just don't know what the root cause is, right?
You know, something's not right, but how do we figure it out?
And if it hasn't been apparent, like I'm a big data guy, right?
Like I, numbers don't lie, you know, like we can tell ourselves any kind of
story we want about what's going on and why it's going on, but like the numbers don't lie.
(30:45):
So, and it's really about both, right? You have to be able to take what the
data is showing and map it to what our eyes are seeing on the ground and what
we inherently know about our organizations,
because the marriage of those two is going to tell the real story,
because data without context is really helpful or actionable.
So it's kind of a combination. I like that because,
yeah, sometimes not having the data itself is the issue to be able to see things,
(31:10):
but then also making sure that once you do have it, it becomes formative and
you have a path to run down and then signposts to know that you're on the right
track or you've gotten off.
I feel like a part of a lot of this that comes together, but there's a domain
that I think is also challenging.
And I'm interested to kind of see how this fits into your engagements.
(31:30):
And that's kind of the people part, the personnel and kind of the culture of an organization.
I know culture is a big word that has a lot of meaning.
There's also a lot of focus and an emphasis on creating good culture and also
avoiding bad, but it also is sometimes amorphous and intangible.
And I think hard to kind of really create an effective context for it as it
(31:52):
applies to an organization or to a business.
So how do you see that kind of coming into play?
And if it seems like maybe there's like a culture concern on some level or a
personnel concern, how would you help somebody try to go about addressing that?
Sure. I mean, first I have to caveat that there There are people out there who
are not me that are so much better when it comes to human resources.
(32:17):
Team dynamics, you know, culture building, leadership and management.
But here's kind of the lens that I bring to the table on the subject of scalability.
Because, you know, I've led teams before, before starting my business,
you know, I was the chief operating officer of a company.
And one of the biggest kind of ethos that I bring to any team that I lead or
(32:38):
client client that I'm working with on the subject of culture is a mentality
that we always look to blame the system first, blame the system first.
It's like, that is my culture ethos, which is when something goes wrong,
inevitably things always go wrong, right?
When something goes wrong in business as an organization, our first response
should be to try to look for, well, what went wrong with the system?
(33:03):
What went wrong with our process, our policy, the tools we used,
the systems that are in place, was there a breakdown in the system that explained why this happened?
And if so, let's dig in and see if we can solve that problem before we look
to just find blame in a person. And when you do that, what ends up happening is a couple of things. A.
People don't fear retribution and they're more willing to share and be transparent when things go wrong.
(33:27):
And they're now part of the process to solve the problem because they don't
fear immediate retribution.
But interestingly, it also holds people more accountable because when they know
that their supervisors, the company as a whole, will try to support them first
and find fault in the system first.
When we look to find fault in the system and there's nothing there and it actually
(33:49):
is the the fault of the person, they're more likely to be accountable to that
because they know that we've exhausted every other effort before we find fault
in them and they own it. They're more accountable.
So I always, I'm a big systems guy and I think sometimes we can kind of take
the humanity out of that, but great systems are what create great cultures and
(34:10):
what allow people to be their best because they know what's expected.
They have ways to measure their performance against those expectations and they
have the tools to do their job well.
And if they don't, let's fix that so that they can do even better.
Man, I could not have envisioned a better answer. I love that.
And I think, again, we share that common ethos dynamic of how do you...
(34:34):
I'm always big on the concept of getting everybody on the bus.
And then once you're on the bus, getting everybody in the the right seats.
And I think so much of that capacity building and what people would tangibly
say good culture looks like is when people can show up,
be their best selves and spend most of their time on the things that they're really good at.
(34:57):
A lot of times it's when someone is having to do things that either they're
not good at, or maybe they just shouldn't be doing at all because of some kind
of systemic inefficiency or just some kind of, maybe again, they're not in the right right seat.
And so being able to really figure that out is so materially helpful because
then, like you described, it's this collaborative environment where we're all.
(35:19):
Trying to, you know, make one another better while the organization gets better.
And yeah, you definitely take the fear and the air out of that notion that,
you know, we're always going to go hunting for blame and find the person responsible
and other stuff, which, you know, I think is sometimes,
you know, not as easy to do in certain circumstances, depending on,
(35:39):
you know, how people are wired and all the other stuff. But I think that that's such a great approach.
Yeah. But I mean, discipline is important in an organization.
Accountability is important. but those things are actually really
really hard if you don't have strong systems and
infrastructure in place right if you're just operating off the
off of a whim and kind of just relationships and that's it like that it's really
(36:00):
hard to hold people to account in an environment like that but when their structure
when their systems it becomes a lot more easy just it's a lot smoother to be
able to create that culture of dis-accountability no i love that yeah and and
i And I think that that has,
you know, it directly fits back into all of those other things that you were
talking about, all of those domains and, you know, the better the system,
(36:20):
the better the process, the better the culture,
the better the overall deliverable that goes out because it's an inside out, right?
When you're really firing in all cylinders, culturally, as a team,
as people, then your clients get the best version of you anyway.
And that's, I mean, that's when everybody wins. Yeah. So, wow.
Because I know I could literally continue this conversation with you for another
hour. I want to kind of wind it down for now because we, man,
(36:44):
we covered so much good ground and I'm so glad we could do that.
So do you have any parting thoughts or any one thing that we didn't cover that
you wanted to talk about?
And in addition to that, any particular shout outs you want to make?
That's a tough one. I mean, hey, just shout out to all the entrepreneurs out
there. Like, this thing we do is so difficult.
It's entrepreneurship's challenging.
(37:06):
It's the hardest thing I've ever done. But because of that, it has created this
amazing opportunity for me to kind of grow, not only as a professional, but as a person.
I've learned more about myself as an individual, as a person,
through entrepreneurship than anything else I've ever done.
So like, shout out to all the entrepreneurs that are doing it out there.
Like it takes, it takes guts.
(37:27):
I think often on the subject of entrepreneurship, it's really easy to put success
stories on pedestals and to think that the version of what it means to be successful
in business is one thing.
It's like the thing that we see on TV and in Forbes and Inc Magazine and Entrepreneur
(37:47):
Magazine really does a disservice.
And I think ultimately what it makes people think is that what you need to be
successful successful is a great idea and a lot of hard work and grit.
I think that's what people think is required to be successful in business.
And that's not true. I know it because I've seen a lot of great ideas run by
(38:11):
business owners who work their butts off fail.
And I'm one of them. This is my third business.
I've been through two others that's ultimately closed shop.
So if it was just about grit and
a good idea, then there'd be a lot more successful business is out there.
What it actually is required to be successful in business is systems,
structure, and just the discipline to continuously improve.
(38:35):
You just got to keep doing the thing. And each small and incremental improvement
to the business stacked up over time is what actually takes you across the finish line.
So as you kind of navigate that journey of incremental improvement,
just remember that, A, you're doing your best, and that's usually enough.
And B, when it comes to of the amount of time, resources, and energy that you
(38:57):
have, just be really smart about where you're putting and focusing those efforts.
Because focusing that energy on a few critical things is going to have a much
bigger impact than trying to do too many things all at once.
So that's a long and rambling way to kind of answer that final question on kind
of how I view entrepreneurship and success. Now, that was beautiful.
And I'm just going to pull out one of the words that you just said impact yeah
(39:21):
i think that's one for me that speaks a lot you know
It doesn't all have to look a particular way, but most of the people that I
know in any form of success built their lives around impact.
And so in having that connection and understanding, you don't have to look like the top Inc. 500.
(39:42):
That's okay. But you can have a massive impact and fly under the radar and still do amazing things.
So here, here, here, here to everything that you just said, my friend,
thank you so much for being on with me.
This was a great time. And I think I will say this, it'll be a plug for us to
have a part two to this conversation.
Because I have so many notes that I was writing down. I'm like,
(40:03):
yeah, we're going to have to do this again sometime.
So there's a plug for a future recording. How's that sound? That sounds great.
Let's do it. All right. Thank you, my friends. Oh, last thing. I can't forget this.
How can somebody get a hold of you? Because you're amazing. And I'm sure a lot
of the audience wants to reach out and pick your brain and probably work with
you. So what's the best way for somebody to get a hold of you?
Sure. Thanks for asking. You can find me on LinkedIn, Brad Eisenberg.
(40:25):
I'm pretty active on LinkedIn, or you can go to my website. It's BeLeanBusiness.com.
And there's a lot of great information on what I do, but also just a lot of
great resources and stories about business scalability in general.
So BeLeanBusiness.com.
Sign up for the blog. I did. I love it. Great stuff. Thank you, my friend. All right.
Music.
(40:55):
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legal advice and may not be relied upon for purposes of avoiding any federal tax penalties.
The Haney Company, its employees, and representatives are not authorized to
give tax or legal advice.
Individuals are encouraged to seek advice from their own tax or legal counsel.
Individuals involved in the estate planning process should work with an estate
planning team, including their own personal legal or tax counsel.
(41:17):
The information provided here does not constitute personal financial advice,
but is meant as the conveyance of information for educational purposes only.
All investing involves risk, including the risk of loss.
Past performance is not indicatory of future returns. Guarantees are backed
by the claims-paying ability of the insurer.
Brian Heaney is a registered representative and an investment advisory representative
of Dempsey Lord Smith, LLC.
Dempsey Lord Smith, LLC is not affiliated with the Heaney Company.
(41:40):
Securities offered through Dempsey Lord Smith, LLC, member FINRA SIPC,
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