December 31, 2020 • 54 mins
Taking a business from 1M to 10M is filled with common obstacles. All of these obstacles can be avoided, but only if you have the formula. Regardless of market dynamics if you're looking to break through and make this year your best, you'll never find more sound advice than what is being shared by Josh Long.
Josh is the author of Bottleneck Breakthrough - The 6 Levers of Business Growth, and in this episode, he's sharing his strategy for helping businesses experience wild success. In this episode Kyle and Josh discuss:
- The growth levers
- How to apply the levers
- Where to turn when you're in a rut
- What are the signs you're missing an opportunity?
- Why business owners don't need to feel tethered to their business
About Josh Long
Josh Long is a consultant who focuses on helping B2B companies in the $1 million to $10 million range breakthrough their current revenue plateaus and unlock rapid growth. Through his experience as an entrepreneur, marketing director for a company owned by Chet Holmes and Tony Robbins, and consultant, he has developed the Bottleneck Breakthrough Method. It has proven to be the most reliable method for unlocking rapid growth for his clients while reducing the risk of wasted capital in the process.
About Kyle Hamer
A sales and marketing veteran with a deep understanding of strategy, digital marketing execution, and using technology to enhance brand impact. A hands-on leader with a passion for solving business challenges with process, operations, and technology. When Kyle's not tinkering on businesses, you'll find him spending time with those he loves, learning about incredible people, and making connections.
About Hamer Marketing Group
Market growth for a new product or service is often limited by market distractions, unreliable data, or systems not built to scale. Hamer Marketing Group helps companies build data-driven strategies focused on client acquisition and sales development supported by the technology and operations necessary to create profitable growth.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Initro (00:00):
Welcome to the summit.
A podcast focused on bringingyou the knowledge and insights
for industry leaders.
I'm your host Kyle Hamer, andI'm on a mission to help you
exceed your potential.
As a sales guy, turned marketer,I am passionate about building
sustainable businesses.
And if there's one thing I'velearned in my 20 year career,
that you won't find an overnightgrowth scheme, a shortcut to
(00:20):
success or way to hack yourselfto the top.
Nope.
Success is the by-product ofhard work, great relationships
and deep understanding done overand over.
We're here to help you unlockthat success with some secrets
from other people, oneconversation at a time.
Kyle Hamer (00:35):
Hey, welcome back to The Summit.
I'm your host Kyle Hamer today.
I'm here with Josh long.
Josh.
Welcome to the show.
Josh Long (00:40):
Thanks Kyle.
Glad to be here.
Kyle Hamer (00:42):
We're super excited to have you for those of you who
don't know Josh, you probablyshould.
Josh is a author, a podcaster,and a consultant who focuses on
helping B2B companies in theirone to$10 million range
breakthrough their currentbottlenecks inside their
business.
He's worked as an entrepreneurmarketing director and
consultant for groups like ChadHolmes, people like Tony Robbins
(01:06):
and his developed his own methodof helping entrepreneurs, small
business owners, breakthroughbreak through their bottlenecks
in their life.
He's a dad.
He's an average adventurer.
I mean the guy's kind of beenall over.
Is there something else weshould know about you, Josh,
that would make thisconversation more interesting?
Josh Long (01:28):
I can say the alphabet backwards, real fast.
Kyle Hamer (01:31):
That's at least a party trick.
Well, we're really excited tohave you on the show.
Thanks for being here.
To date today's topic we'regoing to talk through is really
kind of this the six powerlevers of exponential growth or,
or helping a businessbreakthrough.
And it's your, it's your ownmethod?
It's your own strategy andthings that you've come up with
(01:54):
before we kind of get into thehistory.
Can you just at a top level,what are these big things, these
big levers that people need tohit on?
Josh Long (02:02):
Yeah.
So I just go around the wheeland we start with strategy that
if your business doesn't havethe right business model or the
market position strategy, or thebig idea there that you got to
work on, that if you can't, shecan't cut through the noise and
he can't get people to pull herwallets out and give you money.
(02:23):
Then you got a problem.
So it starts with strategy,strategy leads to marketing
without marketing, you have nobusiness, you have no way of
getting clients.
So it's all about thecommunications and the ways that
you get in front of qualifiedprospects, ideal prospects that
are fit for your product orservice.
And then we move around the hornto management, because you gotta
(02:47):
organize, you gotta setstandards, set deadlines
communicate what, what youexpect of your staff and then
from management, their systemsthose are the things that
everybody has to follow.
And these are the two areas thatmost small business owners,
loath management and systems,because they're visionary,
(03:08):
harebrained idea creators.
And one, I want to go tackle theworld and solve problems, but
don't want to get stuck in theweeds.
So we go through systems and howto delegate, how to automate,
how to get the, the thingsdocumented so that it's not
(03:28):
stuck in your head as the ownerall the time.
And then we finish up with avision and mindset.
And so vision is reallyimportant because like Alison
Wonderland, if you don't knowwhere you're going, it doesn't
really matter which way you gonext.
So if you, to me, there's onlythree outcomes in a business.
You either grow it to sell it.
(03:50):
You grow it to turn it into acash cow or you grow it to pass
onto your kids or youremployees.
And so without clarity aroundthose, each of those have
different outcomes.
All of the plans that we makedon't really matter if we don't
know where you want to go andit's okay to change your mind.
And a lot of business owners dochange their mind over time.
And then finally we finishedwith mindset, which I think is
(04:11):
the most important lever, but Iput it last because most I'd say
over half of my clients over theyears, haven't wanted to deal
with this.
This is around not positivethinking.
This is around getting into theweeds of why you hesitate to
confront an employee, or why youalways say yes to that client or
(04:35):
vendor that is so toxic for youor why you go to so many
conferences, but don't implementany of it.
So that's all mindset.
And I think it's the mostimportant bottleneck or lever
lever to pull that is worth morethan all the other five levers
(04:55):
combined.
But it's can be hard.
It can be painful to go through,to deal with the beliefs or
emotional traumas you've hadgrowing up that got you to where
you are, where you're at.
Kyle Hamer (05:11):
Well, I mean, it's really interesting.
You have these six levers inyour, your life experience and
the things that you've done inthe past have kind of brought
you to this, you know, to thisrealization, give a little
context of how you came up withthe, the, you know, the power
five and then added your own,you know, swizzle on the sixth.
Josh Long (05:32):
Yeah, so I, I was fresh out of grad school.
I had a mortgage brokerage likehalf a California.
And before the recession and Ihad gotten an MBA in
entrepreneurship and learned howto network learned how to do
financial projections, butdidn't learn much more than that
(05:52):
on, on how to run a business.
And so I was overwhelmed and Ijust, it was about 2006.
I had piles and piles ofpaperwork on my desk that I
wasn't getting to.
And a million, got a minutemeetings a day with my staff and
in just a kind of a flash ofclarity, it was like, you know,
(06:14):
we've got to get thisunderwriting thing sorted.
If we can just get loans,underwritten and approved
quickly, all of my headaches goaway.
And at that time it took usabout 30 days to get a loan
approved.
And so we worked on it, weworked on it, worked on it.
And in short order, I don't know, a couple of months we got it
down to loan approvals were inthree days.
(06:35):
And like everything got easierand we could get more clients
through and there was less juststress.
There's less headache.
And I realized, gosh, if I workon the next bottleneck that, and
I drew it out, I drew a pipelinelike from left to right.
And there's this constrictingpoint.
That's what a bottleneck is, isjust a constricting point in
(06:57):
flow.
And I saw, gosh, if we get more,if we can get loans approved
faster, we can get more loansthrough in a month.
So now more money can gothrough.
And I'm like, okay, so behindthat or in front of it, where is
the next constraint?
And for me at the time, theconstraint was lead flow.
So I didn't have enough leadsources coming in.
(07:20):
So we sat around and twiddletheir thumbs a lot.
Once we got to three-dayapprovals because well, it
wasn't much else to do so Ineeded to work on marketing to
get more clients.
And so that kind of set theanchor of gosh, if I just work
on the next bottleneck growthwill compound.
And of course I didn't get achance to perfect that with that
mortgage brokerage, becauseAugust, 2007, Andy Mac bank goes
(07:43):
under and I can't get a loanapproved.
And we filed bankruptcy in 2008,met with a bankruptcy attorney
in February a week after myfirstborn was born.
So I was 29 and have a newbornand sign a bankruptcy papers.
So I I didn't get a chance towork out my theory there, but I
(08:03):
held onto it.
And over the years, then about2012 started having clients of
my own.
That would let me just dowhatever.
And I didn't have it formalized.
I didn't have a methodologyoutlined.
I just would go in and askquestions and eventually figure
out what their ultimatebottleneck was.
And so I had a handful ofclients that just said, we need
(08:25):
help.
What do we do?
And I got to ask lots ofquestions and find their biggest
bottlenecks and then growthhappened.
And I took an engineering firmfrom 2.2 million in 2012 to 4.7
million in 2014.
And they're now over 10 million.
I think they crossed 10 millionin 2018.
And so like, just examples likethat from just figuring out the
(08:48):
bottleneck unlock significantgrowth.
Speaker 4 (08:53):
Why do think that so owners or business
Kyle Hamer (08:56):
Owners get into a spot where they struggle with
their with their bottlenecks,right?
It's it seems to me like you gotto a spot with the mortgage
brokerage where you're startingto get a little bit of your own
dog food and you'reunderstanding what you need to
do to improve, but that tooksome, some moments of clarity
and some moments for you.
Where was it?
Was it the goal?
Was that the pain?
(09:17):
Why were you stuck before andwhat changed to move you
forward?
Josh Long (09:21):
Yeah, and I hate to make it seem mysterious or, or
difficult to replicate, but I'verealized since then, and being a
consultant for more than adecade now that it's a unique
ability.
I, I just see the world and in away that many others don't.
(09:42):
And so I still have sufferedfrom solving my own bottlenecks
at times.
I think we all suffer fromseeing our own issues and I
think that's part of how we'recreated to be in relationship.
We're not meant to be an Island.
So I think, I think that's thebeauty of it.
I think for most businessowners, the real issue is like
(10:04):
you said, they don't have space.
They don't have time there wakeup, strap on their fire
extinguishers and then walkaround and putting out fires all
day.
And they're professionalfirefighters.
And the irony is most of thefires are ones they've created
mostly inadvertently, but they,they just don't realize that
(10:25):
they're just overwhelmed andthat they, if they stop and step
back for a couple of days, theycan get clarity.
But the other piece is a lot ofthem just don't have the reps.
They don't have the experienceto see the patterns.
So when I worked for Chad Holmes, helping start his consulting
firm in 2008 on the heels of mybankruptcy, I got to talk to
(10:47):
lots and lots of businessowners.
And I started seeing patternsand I started picking up on
revenue plateaus.
And again, I had other guysmaking the same calls and making
the same conversations thatweren't seeing these patterns.
That's just a gift I have.
I can connect the dots and seepatterns and disparate
information.
So I saw these revenue plateausand these patterns, and then
(11:11):
started saying, Hmm, wonder whatthey have in common.
And then lo and behold, there'scommon bottlenecks at each
revenue plateau.
Kyle Hamer (11:20):
So what's that first plateau look like.
I mean, it, it, you start offwith strategy and you say, well,
you don't have a product marketfit, or you don't have a go to
market strategy.
What are the common bottlenecksthat you see?
And when does that happen inrevenue when it comes to the
first level around growth?
Josh Long (11:35):
Yeah.
And I know this is hard tobelieve for a lot of listeners,
but it really kicks in at amillion dollars in the
unfortunate part is 93% ofcompanies never reach a million
dollars.
So if you're under a milliondollars, give you a little
nugget right now, the key is tostart developing your employee
(12:02):
assignments because when you'reunder a million dollars, it's
really easy for everybody tojust kind of be all hands on
deck.
Everybody just rolls up theirsleeves and picks up the Slack,
but then things start fallingthrough the cracks and you end
up with finger pointing of, Oh,I thought she was going to do
it.
I thought he was going to do it.
Oh, I assumed you had thatbecause you did it last time.
So that's really for smallerbusinesses, under a million
(12:23):
dollars defining roles andgiving assignments and
responsibilities that for eachcritical outcome in a company,
there's gotta be one person incharge of it.
But the biggest bottleneck is ita million dollars and the
biggest behavior or commonfeature of that bottleneck is
that the owner starts throttlingrainmaking.
(12:44):
They start slowing down how muchbusiness they can close because
they don't quite have thesystems and infrastructure for
fulfillment.
And so they know that if theyclose more business, it just
means they're going to have moreheadaches on the backside to
solve.
And so a hundred percent of thetime they need an operations
manager, a little Napoleon,that's going to be back at the
(13:06):
shop, cracking the whip andmaking sure everything's go,
went out on time and everybody'staken care of.
And so it's really magical onceyou find that, that little
Napoleon that you can trust asan owner, because they preempt
things that you just don't wantto do.
And they are so detail orientedand thorough that you realize,
(13:30):
gosh, I've been putting up withthis crap for so long, and I've
been putting up with this stuff,falling through the cracks for
so long that you feelrejuvenated.
And now you feel excited to goback and close more business.
And now you can, and you grow to2 million rather quickly, once
you get that little Napoleon.
And so a great example is aclient of mine.
(13:50):
She's got a great manufacturingcompany.
They make a metal clear coat, aproduct for all sorts of
applications.
It's on the Sears tower,eliminant panel walls.
It's on the copper dome andArizona or Wisconsin at their
state capitals.
And she's been in business for25 years now.
(14:11):
And we got her.
She was doing about 900 grandwhen we started working together
back in 2015.
And we finally developed anoperations manager about two
years ago for her.
And in 2019, they did about 2.2million.
And she took 12 weeks ofinternational vacation that
(14:32):
year.
And nothing went wrong while shewas gone.
So she could never do thatpreviously because fires would
happen.
Something would go haywire andshe'd get called while she's on
vacation and spend a half a dayputting out that fire.
Speaker 5 (14:50):
It's amazing to
Kyle Hamer (14:52):
Me, the things that as business owners will put up
with, right?
It, the, the, the things that wefeel like we need to put on our
plate are there commonalitiesthat you see that are, are
issues, and you talked aboutcapacity and creating a little
bit of a Napoleon, but from astrategic standpoint, are there,
are there items that we justwon't let go of on that first
(15:12):
lever?
Josh Long (15:17):
It's more around management that, and I see this
for companies that really getstuck in the$5 million range.
It's not that they don't let goof it.
It's they don't know how todevelop other managers, other
decision-makers.
And so that's probably thebiggest Achilles heel for small
(15:38):
business owners is because likeyou said, they put up with a lot
and they are really resilient.
I mean, entrepreneurs, smallbusiness owners are tough.
Like they have to be there.
They're mentally tough.
Yeah.
They are emotionally tough.
They, they can take on risk.
So they're really survivors,right?
They, they really just have awhole lot of fortitude that mere
(16:01):
mortals don't have, but thatbecomes an Achilles heel,
especially as they get into thethree to five,$6 million range,
because they're used to managingby whack-a-mole.
And so they have these moles popup every day and they just whack
them.
But by the time they get tothree or 4 million, those moles
are a lot bigger and you can'tjust whack them out of the way.
(16:24):
So for example, it could be thatI'll just use my client Teresa
as an example, cause it's aneasy one, but they have some
aerosol spray cans for theirmetal clear-coat well, their
vendor decided to change the fad, the neoprene washer that's
(16:46):
inside those compressed cans,those high pressure cans, and
they cans would start leakingand spraying all over stuff.
And so one, one user had it hadthe seal around the aerosol
nozzle crack and it sprayed allover their brand new kitchen
cabinets and it didn't destroythem, but it was a giant
(17:07):
headache.
And so Theresa, there's no wayshe could give anybody else that
task to go figure out what wentwrong.
And it took months to figure outthat it was the manufacturer of
the bottle or change theneoprene washer and the quality
wasn't wasn't sufficient.
(17:29):
And so like if she was at fiveor 10 million, she would have
somebody in charge ofmanufacturing and fulfillment
that could get to the bottom ofthat.
But for her, because she's at 2million, she doesn't have that
and it's fine.
She's turning her business intoa cash cow and staying in the 2
million to two and a halfmillion dollar range is and
(17:49):
sustainable.
But that mole that came at herthat time was massive.
And you can't just knock it outand say, Oh, go find a new
vendor or go find a newwhatever.
Because finding aerosolmanufacturers in the U S is
really, really hard because ofEPA guidelines and compliance
and the type of products she'sgot is unique.
(18:13):
And so it w it, it, she wasreally stuck with that vendor.
And thankfully that vendorwasn't belligerent, but it took
a long time to get to the bottomof it and realize what went
wrong in the manufacturingprocess.
So like, those issues are, arethat the owner doesn't learn how
(18:34):
to develop managers over keyareas.
And doesn't let that go becauseit's just easier for the owner
to keep doing it.
And so of course, then the ownerbecomes the ultimate bottleneck,
and that's why I've never met a$5 million business owner.
That's happy.
Kyle Hamer (18:51):
You've never met a$5 million business owner.
That's happy, even if it's acash cow,
Josh Long (18:55):
They can't be a cash cow at 5 million.
So you be a cash cow, two to 3million, or you've got to grow
to 10 million because of theeconomies of scale, the
infrastructure havingmanagement.
And so at 5 million, the owneris truly the bottleneck because
they don't have managers to helpsolve the problems because if
they did, they'd be going to 10million.
(19:17):
And if they, and so when they'rethere, every problem every day
is as big as that washer goingbad on the aerosol cans.
Kyle Hamer (19:27):
So your second lever, it sounds like your
second lever in, in, when wethink about marketing, a lot of
business owners and peoplethink, Oh, I just have a
marketing problem.
That's why I can't grow.
I can't get to the next levelbecause I'm not generating
enough leads, or I'm not tellingmy story the right way.
When you look at growth lever,number two, which is marketing.
(19:48):
When is that really a bottleneckor a problem for a business?
Is it, is it zero to one?
Or is it one to 10?
Josh Long (19:57):
It's just to get to a million dollars.
Once you're at a milliondollars, you don't have a
marketing problem.
So it's, it's getting thatalignment of strategy and
marketing sorted out, out of thegate in the zero to half a
million dollar range.
Then once you get that sortedmarketing really is not a
(20:17):
problem to grow to 10 million.
So it, and that's the problem,like you said, every business
owner thinks they have amarketing problem because
marketing is so critical out ofthe gate without good marketing.
You're not getting off theground without any way to
identify ideal prospects andtell them a compelling story
that gets them to say, Oh, tellme more or take my money.
(20:40):
Then you're, you're not goinganywhere.
So they, the small businessowners get conditioned that
everything's a marketing problembecause it's been a marketing
problem since they were born,since they were founded.
And because of business, doesn'tgrow like a kid, like a kid,
I've got three kids, they'renine and 11 and 13, and a kid
(21:03):
can start walking.
A kid can start talking.
A kid can doesn't have to usediapers.
Like you see these clearprogressions because it's this
little tiny package of a humanand you're interacting with them
daily.
And they are transforming rightin front of your eyes.
Well, business doesn't changelike that.
You just get a few more people.
(21:24):
The bank account gets anotherzero on it, but you're not
really sure what's changed.
And you're still putting out thefires of the day.
You're still showing up anddoing your routine, but the
businesses drastically changed.
And so I think that's wheregetting into the seven figure
desert, I call it like, once youget past 2 million, you're,
you're in no man's land untilyou get to 10 million and
(21:45):
business owners, nobody talksabout this.
Nobody trains on it.
There's no literature anywherethat I've ever found that covers
this stuff.
So as a business owner, you justdon't know what you don't know.
And so you think marketingbecause it's, it's, it's like
you're crack cocaine out of thegate.
It gives you the fix, but youdon't realize you gotta, you
gotta move on beyond that.
(22:05):
Otherwise you're just spinningyour wheels on more promotions,
more marketing gimmicks thatjust create bigger downstream
effect, downstream problems.
So what do you mean by no man'sland or the seven figure desert?
Like, what is, what is that?
Yeah, it's it's, it's just, whenyou get past 2 million and
(22:29):
you've got bigger clients andbigger headaches, and there's no
companies out there created toservice, you there's agencies,
that'll say, Oh yeah, we'llhandle your marketing for you,
but, but you don't have amarketing problem at 3 million
or 4 million.
And they'll say or you'll go toa training like with the rocket
(22:52):
fuel guys EOS they're the modernversion E-Myth group.
And they'll say, Oh, you need toimplement or an integrator.
And that's just your operationsmanager.
And then they say you need todocument things, but who's going
to document it.
And so it's just, there's verylittle support for companies
(23:15):
between two and 10 million.
And the owners don't realizethat they need to become an
organizational leader.
They need to communicate aboutfour times more often than they
think with their staff and theirkey, key employees that they
need to transition to closingbigger deals because it's easier
to manage them and they paybetter and they're less
(23:35):
headache.
And so it it's like this reallygiant transition point from two
to 10 million that there's justnobody out there helping these
companies owners.
So it really is a no man's landin my opinion.
Unless of course they comeacross me cause I'm seriously
like the only person talkingabout this.
So it's I really think the sevenfigure desert really epitomizes
(23:59):
it.
Well, you're muted.
Kyle Hamer (24:05):
Talk about the seven figure desert and in the way
that it impacts, but really asyou're, as you're bridging from
marketing into the next pieceit's management, so management
is, is more than justcommunicating or making sure
stuff's getting delivered.
Talk about what the, the thirdgrowth lever here is as it
(24:26):
relates to management.
Josh Long (24:28):
Yeah.
I mean, it's really a fourletter word for small business
owners.
I mean, they just, they, I hearit all the time.
Cause they, they say, I don'twant to micromanage people and
I'm like, well, you're not anymanaging people right now.
So whether it's micro or macroor perfect or whatever, like you
have no concept of whatmanagement is.
(24:48):
You're not, and you're notmanaging your avoiding.
Right?
Yeah.
I call it abdicating.
And that's where they say theytake the responsibility, they
throw it over the fence and theysay, go get it done.
And they give them all theresponsibility, but none of the
authority and that's purgatoryfor any employee.
When, for example, you've got todo a marketing campaign and
(25:11):
you've got paid traffic comingfrom Google and you've got
landing pages, but the owner'snephew is managing the website
and he's throwing a tempertantrum and won't update the
landing page.
And so you've got this crappylanding page, but you've got
good ads.
And so because you can't firethat nephew, you are, have no
(25:31):
authority to get done what youneed to get done.
And so then that campaigndoesn't work, but you get blamed
for the poor outcome becauseyou've got all the
responsibility and none of theauthority.
So that's typical management byabdication that most business
owners go through.
And so the few quick rubricsthat I go through is your key,
(25:56):
your staff don't do things foronly two reasons.
They don't know how, or theydon't want to.
And so if somebody is notgetting something done, it's up
to you as the owner to confrontwhy they're not getting it done,
are they, do they not know how,or they didn't do they not want
to do it?
And so if they don't know howthat's a training thing, you've
(26:17):
got to provide training.
So that typical business, smallbusiness owner says, well, it's
so common sense how to do this.
It's so obvious.
It's like, well, yeah.
To you because you're the ownerand it is your baby and you've
created everything.
So I call that common sense,Citus.
I mean, it's a disease we allsuffer from.
And then the it's or they showthem once and they expect them
(26:38):
to memorize it.
And it's like, well, I, I view,I say, if you view all of your
staff like eight year olds, andit's not that they're incapable
or whatever, but if you look atan eight year old child, they're
intelligent, they cancommunicate.
They're eager, but they need alot of repetition and they're
going to make mistakes.
And you're never mad at themmaking mistakes because they're
(26:59):
just learning.
Well, it's no different for mostemployees there.
They can communicate, they'reintelligent, they're eager and
they're going to make mistakesand they're not trying to make
mistakes.
They're just learning.
And so a number of my clientswhen they get that eight year
old shift, when they startlooking at employees like eight
year olds, all theirfrustrations go away because
(27:21):
they get rid of their commonsense, Citus.
They get rid of theirfrustration that this is so
obvious and stuff like that.
So it's really simple stuff likeit.
I mean, it sounds to anymanager, any management think
thought leader out there, likethis is way down the totem pole
on management theory orphilosophy of what's getting
(27:42):
printed in Harvard businessreview and stuff like that.
But I mean, it's these kinds oflittle things that really help
small business owners getunlocked and get more, more,
more potential out of theiremployees.
Kyle Hamer (27:55):
It was speaking with a small contractor probably
eight weeks ago.
And they were incrediblyfrustrated with the productivity
of their crews.
And I said, well, tell me aboutyour, tell me about your
process.
Tell me about what's happening.
And they're like, well, this isjust simple.
They just do this, this, this,this, and this and this.
I'm like, great.
(28:16):
So where's it written down?
And they're like, well, it'snot, it's just all up in my
head.
And I'm like, okay.
So how many of the people thatare on your crews have the same
35 years worth of experience asyou?
And they kind of looked at melike I was speaking in German or
Dutch, or like I was from, youknow, from Mars, like, what do
you mean?
I'm like, well, you're expectingthem to think and see a project
(28:39):
the way you are for a crew ofeight.
They've never been on this teambefore and they're supposed to
function together.
How does that, how does thatmean if you're frustrated,
totally understand it.
But is this a hiring problem isas a communication problem in
this particular singular theirbusiness owner, just again, kind
(28:59):
of looked at me and said, well,let's write down the process.
And so we started writing thingsdown and what we found just
through that little exercise waseven in their own mind, they
were adding additional thingsin, into the process because of
the way their mind worked, that,that it wasn't linear.
So if you were learning it forthe first time, like were an
(29:19):
eight year old, you would neverbe able to do that because it
was too complex.
So he was, he was like trying toassemble a computer versus
putting together a a rubber bandwindmill.
Yeah,
Josh Long (29:29):
Yeah.
Right.
Yeah.
And I saw this, I added civilengineer that civil engineering
for my help scale, their, one oftheir founders that had been in
business for 35 years.
Brilliant guy.
Great.
He couldn't even outline hisprocess for managing projects
because it was so second nature.
(29:50):
And so we we'd start outliningthat.
We'd give it to a seniorengineer, senior engineer, it
hit a roadblock come back andthe owner would say, Oh yeah, I
do this.
And I was like, well, thatwasn't in the list.
So it just keeps getting addedto over time until they had a
comprehensive onboardingprocess,
Kyle Hamer (30:07):
You know?
And, and you would think, youwould think that it would be
obvious, but I think sometimes,like you said, it's so second
nature that we forget that otherpeople don't think, well,
Josh Long (30:17):
The Michael Jordan effect, I think it's the Michael
Jordan effect that the he's thegreatest basketball player of
all time, but he's never beenable to teach anybody else out.
It would be great.
He gets an eight, but he's not agreat teacher.
And that's why you get guys likeSteve Kerr, who wasn't the
(30:38):
greatest basketball player ofall time, but is a great coach
and can get more potential outof his players than Jordan ever
could.
They were on the same team.
They had the same experiences,very similar experiences.
And so I think that's, that'sthe part that I learned that
early on was I had some mentorsthat were really great in their
field, but couldn't quitetranslate their greatness to
(31:02):
helping me connect dots.
And there were all these holesthat like, I see what you're
saying, and I know where you'reat and I want to go that
direction, but I can't get therewith the roadmap you gave me.
Kyle Hamer (31:15):
Well, and by the way, I think that's a fantastic
analogy because I think also inyour, in your management lever
here, oftentimes people willpromote the top performer.
Oh, you're elite at what you do.
Let's put you in a managementposition and that's not
necessarily good managementstrategy.
Josh Long (31:34):
It's called the Peter principle.
Yeah.
And so I don't know who, whoPeter is, but it you promote
your great, you get promoted toyour level of incompetence.
So the easiest example is youget a superstar salesperson
they're out closing.
Everybody tend to one, youpromote them to sales manager.
(31:55):
They have the Michael Jordaneffect.
They get frustrated, everybodygets frustrated and instead of
demoting them, you fire them.
And so essentially what you justdid was you just fired your
greatest salesperson for beinggreat.
And so, yeah, it's, it's verycommon pattern
Kyle Hamer (32:11):
That leads to that leads to the, you know, w we've
touched on a little bit in themanagement piece, but that leads
to the fourth lever, which is,is systems, at least in your,
you know, your chronologicalorder, talk about the common
challenges or common issues thatpeople have when it relates to
systems and why this is such abig lever that gets missed.
Josh Long (32:32):
Yeah.
So they try to jump toautomation right out of the
gate.
And so it's one of those funnythings that if you don't know
how it's done, and you don'tknow if it works, why automate
it?
In the, so when I came up withbottleneck breakthrough concept
(32:52):
back in 2006, for myself, I knewthat I hadn't invented
something.
I knew that I had just stumbledonto something that it wasn't an
original idea.
And so in 2009, while I wasteaching at Fresno state, one of
my students gave me a bookcalled the goal by Eli gold rat.
And it, he, he like gold rat isthe father of a theory of
(33:13):
constraints.
And it's used a lot in themanufacturing world.
And he wrote this in theeighties to talk about his
experience in the seventies andeighties of helping make
manufacturing more efficient.
And theory of constraints is thesame as about like breakthrough
method is you've got to, you'vegot to supply a manic
manufacturing line and there'sone machine that can't hang.
(33:36):
And so how do you build aroundthat machine to be more
efficient so you can get lowercosts and throughput.
And so when I was going throughthat, I realized like, okay,
these systems that, that peoplewant to fix or need to work on
(33:58):
when they, they have so manyideas of, Oh, we need to
automate this.
We need to do that.
If you automate something orimprove something that doesn't
really move the needle, thatisn't focused on the bottleneck
and the theory of constraintsworld, it's called a false
efficiency.
And so there's lots and lots ofbusiness owners going around
(34:19):
creating lots and lots of falseefficiencies that they're
improving things, but they'reimproving things that don't
change.
The bottom line, don't changerevenue, don't lower, their
stress don't improve clientcustomer or employee
satisfaction.
And so the that's the biggestproblem with systems is knowing
(34:39):
what system to work on and whatstage it needs to be worked on.
So automation is the kind of the, the peak level of, of systems
development.
But a lot of times you can havethings done manually and things
work great, and you can get alot of growth through manual
(35:00):
systems, but you need todocument it.
So I say, in my book that youdelegate first, then you
document, then you maybeautomate.
Now that might seem backwards ifyou're paying attention to the
nomenclature, but you delegatebecause you, as the business
owner are not going to documentthings well, you're just not
(35:21):
wired for it.
You're not structured.
Just like I said, theengineering partner who skipped
steps and all this stuff thereare, I know it's hard to
believe.
There are employees that reallylove documenting things.
They really love getting thingssorted out and detailed and
meticulous.
And I know that sounds crazy forbusiness owners that they, that
(35:46):
person probably thinks they havebrain damage to enjoy it, but
you got to delegate it and getpeople that enjoy the systems,
enjoy the process, enjoy themastery of their craft mastery
of their role, and to have themdocument it.
And then if they are thebottleneck, because they just
can't get through it.
There's too many steps.
(36:07):
There's too much duplication.
Then try automating it, automateparts of it, automate pieces of
it.
And does that improve, improvethe process?
So that's what I see in thesystem side of things is they
work on the wrong ones.
They try to jump to automationout of the gate.
And if you automate a flawedsystem, you just have more
flawed results.
Kyle Hamer (36:28):
So your point of false efficiencies, right in
your, in your, in your book,there was a, there's a gentleman
I worked with about five yearsago, four years ago.
And we were working together onsome projects and I would come
in and I would whiteboard stuffout, or we would, we would, we
would discuss things and wewould leave the room and it was
(36:50):
all stored in my head.
And he'd come back later andyou'd go, Hey, where's that
written down at th w where'd youdocument that at H can you give
this to somebody else?
Like, how can you, how can youhand this off?
And I think that's one of thethings that either when you're a
survivor or a creator or abusiness owner, somebody who can
look at things and can solutionimmediately when you own it,
(37:13):
when you own the outcome, right?
It's very easy for you to do it.
But to, to think about how todocument it for somebody else,
how to recreate that process isa big, it's a big challenge.
It really is.
And I see a lot of folks that goimmediately to these coming back
and picking on marketing.
But I see a lot of people thatgo to these just incredibly
(37:34):
complex marketing, automatedlanding pages and email, like
it's this whole generic flow ofhow things move to the right and
the left and go through stuff.
They have no idea what'shappening.
The person who automated it,didn't write it down.
It's not somewhere where theycan visually see what's
happening.
And they can't see where theleaky pipes are in more often
times than not.
They have leads that are sittingin their database that are not
(37:57):
making it over to their salesteam because nobody documented
and thought, Oh, Hey, by theway, did somebody check over
there?
What Pete did on, on pipe numberfour and make sure that that's
actually being ported in for oursales team to see,
Josh Long (38:09):
Well, the worst example I've ever, I was when I
worked for Chet Holmes, we weredoing satellite radio ads and
getting leads at$18, a popbusiness owners.
And he had this developer, andthis was 2008.
And we had this developer thathad built all these databases,
custom SQL databases that leadsare coming into.
(38:30):
And it was before landing pagestools existed.
And so we're creating forms fromscratch with this developer.
And so the CEO and I mature.
So we fly to Atlanta to go meetwith the fulfillment team.
And that's where the developerlived in, in the office there.
And going through thesedatabases, I mean, we're paying
(38:50):
$18 a lead for these businessowners call in from satellite
radio ads.
And it was profitable.
And we were making, I thinkwe're doing about 10 million a
year at the time.
And I'm going through databaseson this guy's workstation, and
I'd never had access to this.
And I said, what's that databaseabout?
(39:12):
And he says, Oh, that was from apromotion with Tony Robbins.
I said, well, what happened toit?
He says, Oh, Chet said wecouldn't email them.
I said, why?
He says, I don't know.
I said, how many people are inthere?
He says 10,000.
I mean, it was$180,000 worth ofleads, just sitting there.
(39:33):
And it's probably worth more.
Cause they were a referral fromTony Robbins and I'm like, can
he, Mitch, can we startinteracting with them?
And it had been too long andthey were cold and whatever, but
it was like, that kind of stuffhappens everywhere.
And so the, and, and we didn'teven have to spend for those
leads.
Those were referral leads.
And those were through a warm,warm referral.
(39:54):
And I mean, it was literally aminimum of$180,000 in lead value
right there.
And, and to put perspective, wepay$18 a lead, but we probably
generated$250 in revenue perlead or something like that.
So it, it, it w it wasn't justthe cost of the lead sitting.
(40:15):
There is the opportunity cost ofunread, unmet revenue that we
could've gotten out of thatlist.
So, yeah, it happens everywhere.
Kyle Hamer (40:23):
It does.
I mean, I was on, I was on aphone call two weeks ago and the
person said, Hey, you know,you're going to hop into our
marketing automation tool.
I have concerns that these leadsaren't even making it over.
There's a large portion thataren't even making it over to
our sales team.
And I was like, well, didn't youturn on the email notifications
(40:44):
just to let your sales team,when they came in in the, the,
you know, the person was like,wait, there's email
notifications that you can sendto sales reps.
And I thought, huh.
Yeah.
Well, and then here you are.
Right.
So I, I completely understandthat now.
(41:05):
So, you know, we're, we're,we're popping through the, we're
popping through the growthlevers when we picked on
marketing a lot, but you talkabout kind of the last two is
being critical and criticallyintertwined with vision and
mindset.
Why is, why is it that those areso important in where's it, the
businesses or business owners,entrepreneurs, where's it?
(41:26):
That they struggle around thoseelements?
Josh Long (41:28):
Yeah.
I think vision so many of usstart an idea, start with an
idea some way to either changethe world or help a certain
population or make a pile ofmoney.
And we start out and we getgoing, and then we get to six
figures and then we maybe get toseven figures.
And then our goals change, maybethat takes five years or 10
(41:49):
years to happen.
And life happens and your wifegets cancer, or your parents
die, or something changes.
And your goals are no longer thesame as when you started, but
you've not ever revisited that.
And so to me, vision is reallycritical to stop and take a
(42:09):
break and say, what do I reallywant?
Because when I started this, Ithought I was going to create a
hundred million dollar companyand be on entrepreneur magazine
and be on the Inc 500 list.
But, you know, I don't careabout any of that anymore.
We've got a good life.
We, our kids are out of college,my wife and I want to travel
(42:30):
more or whatever the scenariois.
And unless you revisit that andfigure out what in the world do
you want, you're just going tokeep doing the same thing and
you're going to be stuck in thebusiness.
And I think that's where the,the vision effort of, you know,
the things have changed.
(42:51):
I want something new and beingokay with that and accepting it.
And a lot of times you trapyourself because of your own
commitments and the word yousaid to your staff and, and the
honor, and, and integrity thatyou have and loyalty.
And so maybe you've got somebodythat has been wanting to be a
(43:13):
partner and you just don't wantto grow anymore, or they just
keep pushing.
And now they're a Burr underyour saddle, and you've got to
let them know, Hey, I reallywant to change this.
I know three years ago we talkedabout this is you could come in
and, and partner somehow.
And it's just not a fit anymore.
And that's really scary for alot of business owners because
(43:34):
their care for their staff, theycare for their people.
They don't want to pull the rugout from under them.
They don't want to change.
And so I think that's where thevision is so critical to just
keep refreshing and making surethat your business is serving
your life needs as much aspossible, because that's the
only point.
The ultimate reason to start abusiness is to give you the
(43:55):
lifestyle you want.
That's it, time, money, freedom,stress, focus, creativity, all
of that.
The business should be servingyou a hundred percent
Kyle Hamer (44:06):
Well.
And I think that that's, youknow, you, you hit on a couple
things in the in these twoparticular pieces that are
really, really important.
Not only for businesses that aremature, but businesses that are
starting out, right?
Because there are a lot ofentrepreneurs that think I'm
going to become the next Uber.
And so they burn through cashand make business decisions that
(44:29):
don't actually build a business.
That's one of the three that youtalked about at the beginning,
right.
Build it to sell it, build it,to make it a cash cow, or build
it to hand it down to yourfamily.
And if you don't start withthat, I mean, to your point
coming full circle, if you don'tstart with that end in mind at
the beginning, you know, it'slike, well, without a map, any
(44:52):
road will do.
Josh Long (44:54):
Yeah.
Yeah.
I'm working on an adventureright now and with some partners
and we've got very clearobjectives and it's making
everything so easy to executeon.
And I mean, we've got ourstrategy, right?
The business model issophisticated and proven, and I
know it'll work.
We just gotta make sure it fitsthe marketplace.
(45:14):
So, so the business model issound and our differentiation
strategic differentiation sound,but will the market respond?
And so we will find out the nextfew months and our, our goals
are very clear of how we want itto serve our lives and how we
want it to generate revenue andwhat our multiple objective to
(45:35):
grow it, to sell it is.
And yeah, it makes, it makeseverything so much easier.
Now I'm fortunate that I've got10 plus years of experience
looking at other businesses thathave worked.
And I think this is the perfectreason why consulting is such a
great precursor toentrepreneurial success is
(45:56):
because I can, I've seen amillion different businesses and
business models and what'sworked and what hasn't and
figured out how timing works.
I mean, timing is so much of theluck of being in the right place
at the right time with the rightmarket with right idea.
And because so many of us are sofar ahead of the market, or so
far out ahead of the rest ofsociety, but that's costly.
(46:16):
You just end up educatingeverybody on why they need to be
looking that way.
Kyle Hamer (46:21):
Yeah.
The bleeding edge, they, theysay that the bleeding edge
companies are the ones that fallflat.
The leading edge companies arethe ones that, that make money,
Josh Long (46:29):
Scoop it out.
And yeah, they come up rightbehind the bleeding edge and
they scoop up, all right,
Kyle Hamer (46:33):
They take a good idea and they turn it into a
cash cow.
And then as the market matures,a lot of those, either
entrepreneurs or people thatstarted will start to exit the
business and move on a reallygood example of that is Google.
You had Larry Page.
And Oh, I could see.
Yeah, Sergei.
They came in, they helped growit.
(46:54):
They brought in management, theycontinued to grow, but as their
mind realized, Oh, Google ismaturing.
This is becoming morecompetitive with cloud products.
Amazon web services is coming.
Microsoft is building acompetitive set of, you know
office products.
They moved into alphabet, right?
Like they, they moved there,they moved their selves to stay
(47:16):
ahead.
But there, the stuff thatAlphabet's working on is stuff
that we still have 15 or 20years before we see it in our
everyday lives.
Josh Long (47:25):
Yeah, exactly.
I mean, it's just like, Merck'sthe eighties back in the
seventies, creating newinnovative products, antilock
brakes, and whatever that nowevery car has.
And these, these innovators getinto these spots where they just
are so far ahead of the rest ofthe world, but without the
resources or the horsepower andmoney that small business
(47:45):
owners, when we get out that farahead, we just fall flat.
Kyle Hamer (47:48):
Yeah.
Because there's no market there,but a lot of, a lot of small
businesses really succeed in amature, a mature market, right.
Where there's, there's plenty ofmarket demand.
Other people have educated, andnow you've got your particular
flywheel insurance doctors,dentists, like nobody has to
educate you on what you needdental work for why you would
need insurance a hundred yearsago.
(48:10):
That was a bit different.
So w when, when people areworking through this, when
business owners are workingthrough this, Josh, what, what's
the best way to say, do I needto get help?
Do I need to get a consultant?
Do I just need to read Josh'sbook?
What are the, what are the bestways to start identifying?
(48:33):
These are common challenges Ihave, or these are the pains I
have, or here's how I do my ownbasic rubric to know.
I really do need help to, to hitthat, to get out of the seven
figure desert.
Josh Long (48:43):
Yeah.
It's obviously the book waswritten to help you through that
process.
So I will selfishly say, just goby the book and March through it
and go through chapter 13 andthe profit priorities process to
prioritize what's there.
But the quick rubric is whereare you frustrated regularly on
(49:03):
a common theme, wherever thatis.
That's a bottleneck, where areyou spending an inordinate
amount of time putting outfires, solving problems, not
being able to do anythingproactive.
That's another bottleneck.
So those are the two places thatI focus on with clients is where
are you frustrated and where youtime-suck that because you need
(49:26):
space to lead an organization.
All of my clients, I've got topartner with a guy named Perry
Marshall.
We've got a program calledadvanced mastery network, and
we've got six to 10 clients ayear going through that.
And they're all in theseven-figure desert.
They're all trying to get to 10million.
And the key factor of those thatare successful in it are that
all the owners have space andtime to get to meaningful change
(49:48):
and proactive problem solvingand implementing stuff that
Perry and I recommend for them.
And without space, I think novelRobert Kahn, he's an ex
entrepreneur, Silicon ValleyCEO, a venture capitalist, or an
angel investor.
And he says a busy calendar anda busy mind will prevent you
from doing great things.
(50:09):
And I think that's the kiss ofdeath for most small business
owners.
If they just hit the groundrunning, come home, exhausted,
pass out, work, weekends, worknights self-medicate too much.
And those are, those are thesigns that you've got problems
and needed help.
Kyle Hamer (50:28):
I think there's Sage advice there.
There's, there's definitelystuff that you've learned
working with Chet, Tony, and nowPerry, across those multiple
businesses.
I mean, there's, there's just alot of wisdom in what you're
sharing.
So transition year is somethingthat's always fun.
What's a, what's a book thatyou're reading right now.
That's blowing your mind.
Josh Long (50:50):
So it's funny.
I actually don't read muchanymore.
I went through such a phase ofreading everything under the
sun.
So I will recommend my favoritebook of all time.
It's a obscure, but for businessowners, I think it's really
useful.
It's how to fail at almosteverything and still win big by
Scott Adams, the creator ofDilbert.
(51:12):
It just, it's kind of like amore mature four hour work week,
but without the hype and withoutthe unbelievable sales pitch.
So to me, I thought TimFerriss's four hour workweek was
good to open my eyes tolifestyle design and
simplifying, and, and reallyintroduced me to Richard
(51:34):
cautious, 80 20 principle, andRichard and I have become
friends.
And I'm more like pen pals, I'mwriting emails.
But yeah, I think I think ScottAdams had a fail at everything.
It almost everything and stillwin big is fantastic.
Kyle Hamer (51:50):
That's awesome.
Put a bow on it for us.
Summarize up the key, the keythings people need to know about
bottlenecks and then tell themhow they can get ahold of you.
Josh Long (52:00):
Yeah.
I think the summary is you'vegot to make some space for
yourself to think, and if youcan't it's just going to be
Groundhog day over and over andover putting out fires and
spinning your wheels and notreally going anywhere.
And so if that sounds familiarand you don't know how to pull
(52:24):
the rip cord and make any spaceand you feel the pressure piling
on and then, then I'm happy tochat, happy to help get you
some, some space and freedom ifyou want to grow through to 10
million.
That's my sweet spot.
So I love doing it.
I love taking the risk off ofthe business owners to get
there.
And we just have fun, fun,scaling it reach out to me.
(52:48):
You can go to my website,bottleneck, breakthrough.com.
There's contact forms,application forms.
I've got a Facebook group that Inudge along at a bottleneck
breakthrough method insideFacebook.
I'm on LinkedIn, easy to getahold of there, but otherwise,
yeah, I hope this is valuable.
Hope you get a ton of value fromit, Kyle, this is why you're one
(53:10):
of the best podcasts I've everbeen on with asking useful
strategic questions that addvalue to the, to the listener.
So great job with that.
Kyle Hamer (53:20):
Hey, thanks.
I it's, it's been a pleasure tohave you here.
I mean, it's not every day thatwe get to break down really the
six levers in and get into the,kind of the mechanics of small
business.
Yeah.
So I've heard so many timespeople talk about, Oh, we got to
work on the business, work onthe business, work on the
business, but the owner is sobusy inside the business.
And so I just, I reallyappreciate your, your breakdown,
(53:43):
your, your, your differentlevers and the way that we've
made it very approachable forpeople to fix.
What's broken so awesome.
It's I, I, I think it's been afantastic show for those guys
who are listening.
You've been listening to KyleHemer and Josh long.
Josh is the author of bottleneckbreakthrough.
And we will have the link forhis book as well as how to get
(54:05):
ahold of Josh in the, in the, inthe notes.
Until next week you've beenlistening to some, a podcast.
Thanks for coming in, likeshare, subscribe, do something
fun, let other people know.
Don't just keep it all toyourself and continue to grow,
push on push forward and be abetter you.
Speaker 6 (54:24):
Okay.
Welcome to the summit.
A podcast focused on bringingyou the knowledge and insights
for industry leaders.
I'm your host Kyle Hamer, andI'm on a mission to help you
exceed your potential.
As a sales guy, turned marketer,I am passionate about building
sustainable businesses.
And if there's one thing I'velearned in my 20 year career,
that you won't find an overnightgrowth scheme, a shortcut to
(00:20):
success or way to hack yourselfto the top.
Nope.
Success is the by-product ofhard work, great relationships
and deep understanding done overand over.
We're here to help you unlockthat success with some secrets
from other people, oneconversation at a time.
Kyle Hamer (00:35):
Hey, welcome back to The Summit.
I'm your host Kyle Hamer today.
I'm here with Josh long.
Josh.
Welcome to the show.
Josh Long (00:40):
Thanks Kyle.
Glad to be here.
Kyle Hamer (00:42):
We're super excited to have you for those of you who
don't know Josh, you probablyshould.
Josh is a author, a podcaster,and a consultant who focuses on
helping B2B companies in theirone to$10 million range
breakthrough their currentbottlenecks inside their
business.
He's worked as an entrepreneurmarketing director and
consultant for groups like ChadHolmes, people like Tony Robbins
(01:06):
and his developed his own methodof helping entrepreneurs, small
business owners, breakthroughbreak through their bottlenecks
in their life.
He's a dad.
He's an average adventurer.
I mean the guy's kind of beenall over.
Is there something else weshould know about you, Josh,
that would make thisconversation more interesting?
Josh Long (01:28):
I can say the alphabet backwards, real fast.
Kyle Hamer (01:31):
That's at least a party trick.
Well, we're really excited tohave you on the show.
Thanks for being here.
To date today's topic we'regoing to talk through is really
kind of this the six powerlevers of exponential growth or,
or helping a businessbreakthrough.
And it's your, it's your ownmethod?
It's your own strategy andthings that you've come up with
(01:54):
before we kind of get into thehistory.
Can you just at a top level,what are these big things, these
big levers that people need tohit on?
Josh Long (02:02):
Yeah.
So I just go around the wheeland we start with strategy that
if your business doesn't havethe right business model or the
market position strategy, or thebig idea there that you got to
work on, that if you can't, shecan't cut through the noise and
he can't get people to pull herwallets out and give you money.
(02:23):
Then you got a problem.
So it starts with strategy,strategy leads to marketing
without marketing, you have nobusiness, you have no way of
getting clients.
So it's all about thecommunications and the ways that
you get in front of qualifiedprospects, ideal prospects that
are fit for your product orservice.
And then we move around the hornto management, because you gotta
(02:47):
organize, you gotta setstandards, set deadlines
communicate what, what youexpect of your staff and then
from management, their systemsthose are the things that
everybody has to follow.
And these are the two areas thatmost small business owners,
loath management and systems,because they're visionary,
(03:08):
harebrained idea creators.
And one, I want to go tackle theworld and solve problems, but
don't want to get stuck in theweeds.
So we go through systems and howto delegate, how to automate,
how to get the, the thingsdocumented so that it's not
(03:28):
stuck in your head as the ownerall the time.
And then we finish up with avision and mindset.
And so vision is reallyimportant because like Alison
Wonderland, if you don't knowwhere you're going, it doesn't
really matter which way you gonext.
So if you, to me, there's onlythree outcomes in a business.
You either grow it to sell it.
(03:50):
You grow it to turn it into acash cow or you grow it to pass
onto your kids or youremployees.
And so without clarity aroundthose, each of those have
different outcomes.
All of the plans that we makedon't really matter if we don't
know where you want to go andit's okay to change your mind.
And a lot of business owners dochange their mind over time.
And then finally we finishedwith mindset, which I think is
(04:11):
the most important lever, but Iput it last because most I'd say
over half of my clients over theyears, haven't wanted to deal
with this.
This is around not positivethinking.
This is around getting into theweeds of why you hesitate to
confront an employee, or why youalways say yes to that client or
(04:35):
vendor that is so toxic for youor why you go to so many
conferences, but don't implementany of it.
So that's all mindset.
And I think it's the mostimportant bottleneck or lever
lever to pull that is worth morethan all the other five levers
(04:55):
combined.
But it's can be hard.
It can be painful to go through,to deal with the beliefs or
emotional traumas you've hadgrowing up that got you to where
you are, where you're at.
Kyle Hamer (05:11):
Well, I mean, it's really interesting.
You have these six levers inyour, your life experience and
the things that you've done inthe past have kind of brought
you to this, you know, to thisrealization, give a little
context of how you came up withthe, the, you know, the power
five and then added your own,you know, swizzle on the sixth.
Josh Long (05:32):
Yeah, so I, I was fresh out of grad school.
I had a mortgage brokerage likehalf a California.
And before the recession and Ihad gotten an MBA in
entrepreneurship and learned howto network learned how to do
financial projections, butdidn't learn much more than that
(05:52):
on, on how to run a business.
And so I was overwhelmed and Ijust, it was about 2006.
I had piles and piles ofpaperwork on my desk that I
wasn't getting to.
And a million, got a minutemeetings a day with my staff and
in just a kind of a flash ofclarity, it was like, you know,
(06:14):
we've got to get thisunderwriting thing sorted.
If we can just get loans,underwritten and approved
quickly, all of my headaches goaway.
And at that time it took usabout 30 days to get a loan
approved.
And so we worked on it, weworked on it, worked on it.
And in short order, I don't know, a couple of months we got it
down to loan approvals were inthree days.
(06:35):
And like everything got easierand we could get more clients
through and there was less juststress.
There's less headache.
And I realized, gosh, if I workon the next bottleneck that, and
I drew it out, I drew a pipelinelike from left to right.
And there's this constrictingpoint.
That's what a bottleneck is, isjust a constricting point in
(06:57):
flow.
And I saw, gosh, if we get more,if we can get loans approved
faster, we can get more loansthrough in a month.
So now more money can gothrough.
And I'm like, okay, so behindthat or in front of it, where is
the next constraint?
And for me at the time, theconstraint was lead flow.
So I didn't have enough leadsources coming in.
(07:20):
So we sat around and twiddletheir thumbs a lot.
Once we got to three-dayapprovals because well, it
wasn't much else to do so Ineeded to work on marketing to
get more clients.
And so that kind of set theanchor of gosh, if I just work
on the next bottleneck growthwill compound.
And of course I didn't get achance to perfect that with that
mortgage brokerage, becauseAugust, 2007, Andy Mac bank goes
(07:43):
under and I can't get a loanapproved.
And we filed bankruptcy in 2008,met with a bankruptcy attorney
in February a week after myfirstborn was born.
So I was 29 and have a newbornand sign a bankruptcy papers.
So I I didn't get a chance towork out my theory there, but I
(08:03):
held onto it.
And over the years, then about2012 started having clients of
my own.
That would let me just dowhatever.
And I didn't have it formalized.
I didn't have a methodologyoutlined.
I just would go in and askquestions and eventually figure
out what their ultimatebottleneck was.
And so I had a handful ofclients that just said, we need
(08:25):
help.
What do we do?
And I got to ask lots ofquestions and find their biggest
bottlenecks and then growthhappened.
And I took an engineering firmfrom 2.2 million in 2012 to 4.7
million in 2014.
And they're now over 10 million.
I think they crossed 10 millionin 2018.
And so like, just examples likethat from just figuring out the
(08:48):
bottleneck unlock significantgrowth.
Speaker 4 (08:53):
Why do think that so owners or business
Kyle Hamer (08:56):
Owners get into a spot where they struggle with
their with their bottlenecks,right?
It's it seems to me like you gotto a spot with the mortgage
brokerage where you're startingto get a little bit of your own
dog food and you'reunderstanding what you need to
do to improve, but that tooksome, some moments of clarity
and some moments for you.
Where was it?
Was it the goal?
Was that the pain?
(09:17):
Why were you stuck before andwhat changed to move you
forward?
Josh Long (09:21):
Yeah, and I hate to make it seem mysterious or, or
difficult to replicate, but I'verealized since then, and being a
consultant for more than adecade now that it's a unique
ability.
I, I just see the world and in away that many others don't.
(09:42):
And so I still have sufferedfrom solving my own bottlenecks
at times.
I think we all suffer fromseeing our own issues and I
think that's part of how we'recreated to be in relationship.
We're not meant to be an Island.
So I think, I think that's thebeauty of it.
I think for most businessowners, the real issue is like
(10:04):
you said, they don't have space.
They don't have time there wakeup, strap on their fire
extinguishers and then walkaround and putting out fires all
day.
And they're professionalfirefighters.
And the irony is most of thefires are ones they've created
mostly inadvertently, but they,they just don't realize that
(10:25):
they're just overwhelmed andthat they, if they stop and step
back for a couple of days, theycan get clarity.
But the other piece is a lot ofthem just don't have the reps.
They don't have the experienceto see the patterns.
So when I worked for Chad Holmes, helping start his consulting
firm in 2008 on the heels of mybankruptcy, I got to talk to
(10:47):
lots and lots of businessowners.
And I started seeing patternsand I started picking up on
revenue plateaus.
And again, I had other guysmaking the same calls and making
the same conversations thatweren't seeing these patterns.
That's just a gift I have.
I can connect the dots and seepatterns and disparate
information.
So I saw these revenue plateausand these patterns, and then
(11:11):
started saying, Hmm, wonder whatthey have in common.
And then lo and behold, there'scommon bottlenecks at each
revenue plateau.
Kyle Hamer (11:20):
So what's that first plateau look like.
I mean, it, it, you start offwith strategy and you say, well,
you don't have a product marketfit, or you don't have a go to
market strategy.
What are the common bottlenecksthat you see?
And when does that happen inrevenue when it comes to the
first level around growth?
Josh Long (11:35):
Yeah.
And I know this is hard tobelieve for a lot of listeners,
but it really kicks in at amillion dollars in the
unfortunate part is 93% ofcompanies never reach a million
dollars.
So if you're under a milliondollars, give you a little
nugget right now, the key is tostart developing your employee
(12:02):
assignments because when you'reunder a million dollars, it's
really easy for everybody tojust kind of be all hands on
deck.
Everybody just rolls up theirsleeves and picks up the Slack,
but then things start fallingthrough the cracks and you end
up with finger pointing of, Oh,I thought she was going to do
it.
I thought he was going to do it.
Oh, I assumed you had thatbecause you did it last time.
So that's really for smallerbusinesses, under a million
(12:23):
dollars defining roles andgiving assignments and
responsibilities that for eachcritical outcome in a company,
there's gotta be one person incharge of it.
But the biggest bottleneck is ita million dollars and the
biggest behavior or commonfeature of that bottleneck is
that the owner starts throttlingrainmaking.
(12:44):
They start slowing down how muchbusiness they can close because
they don't quite have thesystems and infrastructure for
fulfillment.
And so they know that if theyclose more business, it just
means they're going to have moreheadaches on the backside to
solve.
And so a hundred percent of thetime they need an operations
manager, a little Napoleon,that's going to be back at the
(13:06):
shop, cracking the whip andmaking sure everything's go,
went out on time and everybody'staken care of.
And so it's really magical onceyou find that, that little
Napoleon that you can trust asan owner, because they preempt
things that you just don't wantto do.
And they are so detail orientedand thorough that you realize,
(13:30):
gosh, I've been putting up withthis crap for so long, and I've
been putting up with this stuff,falling through the cracks for
so long that you feelrejuvenated.
And now you feel excited to goback and close more business.
And now you can, and you grow to2 million rather quickly, once
you get that little Napoleon.
And so a great example is aclient of mine.
(13:50):
She's got a great manufacturingcompany.
They make a metal clear coat, aproduct for all sorts of
applications.
It's on the Sears tower,eliminant panel walls.
It's on the copper dome andArizona or Wisconsin at their
state capitals.
And she's been in business for25 years now.
(14:11):
And we got her.
She was doing about 900 grandwhen we started working together
back in 2015.
And we finally developed anoperations manager about two
years ago for her.
And in 2019, they did about 2.2million.
And she took 12 weeks ofinternational vacation that
(14:32):
year.
And nothing went wrong while shewas gone.
So she could never do thatpreviously because fires would
happen.
Something would go haywire andshe'd get called while she's on
vacation and spend a half a dayputting out that fire.
Speaker 5 (14:50):
It's amazing to
Kyle Hamer (14:52):
Me, the things that as business owners will put up
with, right?
It, the, the, the things that wefeel like we need to put on our
plate are there commonalitiesthat you see that are, are
issues, and you talked aboutcapacity and creating a little
bit of a Napoleon, but from astrategic standpoint, are there,
are there items that we justwon't let go of on that first
(15:12):
lever?
Josh Long (15:17):
It's more around management that, and I see this
for companies that really getstuck in the$5 million range.
It's not that they don't let goof it.
It's they don't know how todevelop other managers, other
decision-makers.
And so that's probably thebiggest Achilles heel for small
(15:38):
business owners is because likeyou said, they put up with a lot
and they are really resilient.
I mean, entrepreneurs, smallbusiness owners are tough.
Like they have to be there.
They're mentally tough.
Yeah.
They are emotionally tough.
They, they can take on risk.
So they're really survivors,right?
They, they really just have awhole lot of fortitude that mere
(16:01):
mortals don't have, but thatbecomes an Achilles heel,
especially as they get into thethree to five,$6 million range,
because they're used to managingby whack-a-mole.
And so they have these moles popup every day and they just whack
them.
But by the time they get tothree or 4 million, those moles
are a lot bigger and you can'tjust whack them out of the way.
(16:24):
So for example, it could be thatI'll just use my client Teresa
as an example, cause it's aneasy one, but they have some
aerosol spray cans for theirmetal clear-coat well, their
vendor decided to change the fad, the neoprene washer that's
(16:46):
inside those compressed cans,those high pressure cans, and
they cans would start leakingand spraying all over stuff.
And so one, one user had it hadthe seal around the aerosol
nozzle crack and it sprayed allover their brand new kitchen
cabinets and it didn't destroythem, but it was a giant
(17:07):
headache.
And so Theresa, there's no wayshe could give anybody else that
task to go figure out what wentwrong.
And it took months to figure outthat it was the manufacturer of
the bottle or change theneoprene washer and the quality
wasn't wasn't sufficient.
(17:29):
And so like if she was at fiveor 10 million, she would have
somebody in charge ofmanufacturing and fulfillment
that could get to the bottom ofthat.
But for her, because she's at 2million, she doesn't have that
and it's fine.
She's turning her business intoa cash cow and staying in the 2
million to two and a halfmillion dollar range is and
(17:49):
sustainable.
But that mole that came at herthat time was massive.
And you can't just knock it outand say, Oh, go find a new
vendor or go find a newwhatever.
Because finding aerosolmanufacturers in the U S is
really, really hard because ofEPA guidelines and compliance
and the type of products she'sgot is unique.
(18:13):
And so it w it, it, she wasreally stuck with that vendor.
And thankfully that vendorwasn't belligerent, but it took
a long time to get to the bottomof it and realize what went
wrong in the manufacturingprocess.
So like, those issues are, arethat the owner doesn't learn how
(18:34):
to develop managers over keyareas.
And doesn't let that go becauseit's just easier for the owner
to keep doing it.
And so of course, then the ownerbecomes the ultimate bottleneck,
and that's why I've never met a$5 million business owner.
That's happy.
Kyle Hamer (18:51):
You've never met a$5 million business owner.
That's happy, even if it's acash cow,
Josh Long (18:55):
They can't be a cash cow at 5 million.
So you be a cash cow, two to 3million, or you've got to grow
to 10 million because of theeconomies of scale, the
infrastructure havingmanagement.
And so at 5 million, the owneris truly the bottleneck because
they don't have managers to helpsolve the problems because if
they did, they'd be going to 10million.
(19:17):
And if they, and so when they'rethere, every problem every day
is as big as that washer goingbad on the aerosol cans.
Kyle Hamer (19:27):
So your second lever, it sounds like your
second lever in, in, when wethink about marketing, a lot of
business owners and peoplethink, Oh, I just have a
marketing problem.
That's why I can't grow.
I can't get to the next levelbecause I'm not generating
enough leads, or I'm not tellingmy story the right way.
When you look at growth lever,number two, which is marketing.
(19:48):
When is that really a bottleneckor a problem for a business?
Is it, is it zero to one?
Or is it one to 10?
Josh Long (19:57):
It's just to get to a million dollars.
Once you're at a milliondollars, you don't have a
marketing problem.
So it's, it's getting thatalignment of strategy and
marketing sorted out, out of thegate in the zero to half a
million dollar range.
Then once you get that sortedmarketing really is not a
(20:17):
problem to grow to 10 million.
So it, and that's the problem,like you said, every business
owner thinks they have amarketing problem because
marketing is so critical out ofthe gate without good marketing.
You're not getting off theground without any way to
identify ideal prospects andtell them a compelling story
that gets them to say, Oh, tellme more or take my money.
(20:40):
Then you're, you're not goinganywhere.
So they, the small businessowners get conditioned that
everything's a marketing problembecause it's been a marketing
problem since they were born,since they were founded.
And because of business, doesn'tgrow like a kid, like a kid,
I've got three kids, they'renine and 11 and 13, and a kid
(21:03):
can start walking.
A kid can start talking.
A kid can doesn't have to usediapers.
Like you see these clearprogressions because it's this
little tiny package of a humanand you're interacting with them
daily.
And they are transforming rightin front of your eyes.
Well, business doesn't changelike that.
You just get a few more people.
(21:24):
The bank account gets anotherzero on it, but you're not
really sure what's changed.
And you're still putting out thefires of the day.
You're still showing up anddoing your routine, but the
businesses drastically changed.
And so I think that's wheregetting into the seven figure
desert, I call it like, once youget past 2 million, you're,
you're in no man's land untilyou get to 10 million and
(21:45):
business owners, nobody talksabout this.
Nobody trains on it.
There's no literature anywherethat I've ever found that covers
this stuff.
So as a business owner, you justdon't know what you don't know.
And so you think marketingbecause it's, it's, it's like
you're crack cocaine out of thegate.
It gives you the fix, but youdon't realize you gotta, you
gotta move on beyond that.
(22:05):
Otherwise you're just spinningyour wheels on more promotions,
more marketing gimmicks thatjust create bigger downstream
effect, downstream problems.
So what do you mean by no man'sland or the seven figure desert?
Like, what is, what is that?
Yeah, it's it's, it's just, whenyou get past 2 million and
(22:29):
you've got bigger clients andbigger headaches, and there's no
companies out there created toservice, you there's agencies,
that'll say, Oh yeah, we'llhandle your marketing for you,
but, but you don't have amarketing problem at 3 million
or 4 million.
And they'll say or you'll go toa training like with the rocket
(22:52):
fuel guys EOS they're the modernversion E-Myth group.
And they'll say, Oh, you need toimplement or an integrator.
And that's just your operationsmanager.
And then they say you need todocument things, but who's going
to document it.
And so it's just, there's verylittle support for companies
(23:15):
between two and 10 million.
And the owners don't realizethat they need to become an
organizational leader.
They need to communicate aboutfour times more often than they
think with their staff and theirkey, key employees that they
need to transition to closingbigger deals because it's easier
to manage them and they paybetter and they're less
(23:35):
headache.
And so it it's like this reallygiant transition point from two
to 10 million that there's justnobody out there helping these
companies owners.
So it really is a no man's landin my opinion.
Unless of course they comeacross me cause I'm seriously
like the only person talkingabout this.
So it's I really think the sevenfigure desert really epitomizes
(23:59):
it.
Well, you're muted.
Kyle Hamer (24:05):
Talk about the seven figure desert and in the way
that it impacts, but really asyou're, as you're bridging from
marketing into the next pieceit's management, so management
is, is more than justcommunicating or making sure
stuff's getting delivered.
Talk about what the, the thirdgrowth lever here is as it
(24:26):
relates to management.
Josh Long (24:28):
Yeah.
I mean, it's really a fourletter word for small business
owners.
I mean, they just, they, I hearit all the time.
Cause they, they say, I don'twant to micromanage people and
I'm like, well, you're not anymanaging people right now.
So whether it's micro or macroor perfect or whatever, like you
have no concept of whatmanagement is.
(24:48):
You're not, and you're notmanaging your avoiding.
Right?
Yeah.
I call it abdicating.
And that's where they say theytake the responsibility, they
throw it over the fence and theysay, go get it done.
And they give them all theresponsibility, but none of the
authority and that's purgatoryfor any employee.
When, for example, you've got todo a marketing campaign and
(25:11):
you've got paid traffic comingfrom Google and you've got
landing pages, but the owner'snephew is managing the website
and he's throwing a tempertantrum and won't update the
landing page.
And so you've got this crappylanding page, but you've got
good ads.
And so because you can't firethat nephew, you are, have no
(25:31):
authority to get done what youneed to get done.
And so then that campaigndoesn't work, but you get blamed
for the poor outcome becauseyou've got all the
responsibility and none of theauthority.
So that's typical management byabdication that most business
owners go through.
And so the few quick rubricsthat I go through is your key,
(25:56):
your staff don't do things foronly two reasons.
They don't know how, or theydon't want to.
And so if somebody is notgetting something done, it's up
to you as the owner to confrontwhy they're not getting it done,
are they, do they not know how,or they didn't do they not want
to do it?
And so if they don't know howthat's a training thing, you've
(26:17):
got to provide training.
So that typical business, smallbusiness owner says, well, it's
so common sense how to do this.
It's so obvious.
It's like, well, yeah.
To you because you're the ownerand it is your baby and you've
created everything.
So I call that common sense,Citus.
I mean, it's a disease we allsuffer from.
And then the it's or they showthem once and they expect them
(26:38):
to memorize it.
And it's like, well, I, I view,I say, if you view all of your
staff like eight year olds, andit's not that they're incapable
or whatever, but if you look atan eight year old child, they're
intelligent, they cancommunicate.
They're eager, but they need alot of repetition and they're
going to make mistakes.
And you're never mad at themmaking mistakes because they're
(26:59):
just learning.
Well, it's no different for mostemployees there.
They can communicate, they'reintelligent, they're eager and
they're going to make mistakesand they're not trying to make
mistakes.
They're just learning.
And so a number of my clientswhen they get that eight year
old shift, when they startlooking at employees like eight
year olds, all theirfrustrations go away because
(27:21):
they get rid of their commonsense, Citus.
They get rid of theirfrustration that this is so
obvious and stuff like that.
So it's really simple stuff likeit.
I mean, it sounds to anymanager, any management think
thought leader out there, likethis is way down the totem pole
on management theory orphilosophy of what's getting
(27:42):
printed in Harvard businessreview and stuff like that.
But I mean, it's these kinds oflittle things that really help
small business owners getunlocked and get more, more,
more potential out of theiremployees.
Kyle Hamer (27:55):
It was speaking with a small contractor probably
eight weeks ago.
And they were incrediblyfrustrated with the productivity
of their crews.
And I said, well, tell me aboutyour, tell me about your
process.
Tell me about what's happening.
And they're like, well, this isjust simple.
They just do this, this, this,this, and this and this.
I'm like, great.
(28:16):
So where's it written down?
And they're like, well, it'snot, it's just all up in my
head.
And I'm like, okay.
So how many of the people thatare on your crews have the same
35 years worth of experience asyou?
And they kind of looked at melike I was speaking in German or
Dutch, or like I was from, youknow, from Mars, like, what do
you mean?
I'm like, well, you're expectingthem to think and see a project
(28:39):
the way you are for a crew ofeight.
They've never been on this teambefore and they're supposed to
function together.
How does that, how does thatmean if you're frustrated,
totally understand it.
But is this a hiring problem isas a communication problem in
this particular singular theirbusiness owner, just again, kind
(28:59):
of looked at me and said, well,let's write down the process.
And so we started writing thingsdown and what we found just
through that little exercise waseven in their own mind, they
were adding additional thingsin, into the process because of
the way their mind worked, that,that it wasn't linear.
So if you were learning it forthe first time, like were an
(29:19):
eight year old, you would neverbe able to do that because it
was too complex.
So he was, he was like trying toassemble a computer versus
putting together a a rubber bandwindmill.
Yeah,
Josh Long (29:29):
Yeah.
Right.
Yeah.
And I saw this, I added civilengineer that civil engineering
for my help scale, their, one oftheir founders that had been in
business for 35 years.
Brilliant guy.
Great.
He couldn't even outline hisprocess for managing projects
because it was so second nature.
(29:50):
And so we we'd start outliningthat.
We'd give it to a seniorengineer, senior engineer, it
hit a roadblock come back andthe owner would say, Oh yeah, I
do this.
And I was like, well, thatwasn't in the list.
So it just keeps getting addedto over time until they had a
comprehensive onboardingprocess,
Kyle Hamer (30:07):
You know?
And, and you would think, youwould think that it would be
obvious, but I think sometimes,like you said, it's so second
nature that we forget that otherpeople don't think, well,
Josh Long (30:17):
The Michael Jordan effect, I think it's the Michael
Jordan effect that the he's thegreatest basketball player of
all time, but he's never beenable to teach anybody else out.
It would be great.
He gets an eight, but he's not agreat teacher.
And that's why you get guys likeSteve Kerr, who wasn't the
(30:38):
greatest basketball player ofall time, but is a great coach
and can get more potential outof his players than Jordan ever
could.
They were on the same team.
They had the same experiences,very similar experiences.
And so I think that's, that'sthe part that I learned that
early on was I had some mentorsthat were really great in their
field, but couldn't quitetranslate their greatness to
(31:02):
helping me connect dots.
And there were all these holesthat like, I see what you're
saying, and I know where you'reat and I want to go that
direction, but I can't get therewith the roadmap you gave me.
Kyle Hamer (31:15):
Well, and by the way, I think that's a fantastic
analogy because I think also inyour, in your management lever
here, oftentimes people willpromote the top performer.
Oh, you're elite at what you do.
Let's put you in a managementposition and that's not
necessarily good managementstrategy.
Josh Long (31:34):
It's called the Peter principle.
Yeah.
And so I don't know who, whoPeter is, but it you promote
your great, you get promoted toyour level of incompetence.
So the easiest example is youget a superstar salesperson
they're out closing.
Everybody tend to one, youpromote them to sales manager.
(31:55):
They have the Michael Jordaneffect.
They get frustrated, everybodygets frustrated and instead of
demoting them, you fire them.
And so essentially what you justdid was you just fired your
greatest salesperson for beinggreat.
And so, yeah, it's, it's verycommon pattern
Kyle Hamer (32:11):
That leads to that leads to the, you know, w we've
touched on a little bit in themanagement piece, but that leads
to the fourth lever, which is,is systems, at least in your,
you know, your chronologicalorder, talk about the common
challenges or common issues thatpeople have when it relates to
systems and why this is such abig lever that gets missed.
Josh Long (32:32):
Yeah.
So they try to jump toautomation right out of the
gate.
And so it's one of those funnythings that if you don't know
how it's done, and you don'tknow if it works, why automate
it?
In the, so when I came up withbottleneck breakthrough concept
(32:52):
back in 2006, for myself, I knewthat I hadn't invented
something.
I knew that I had just stumbledonto something that it wasn't an
original idea.
And so in 2009, while I wasteaching at Fresno state, one of
my students gave me a bookcalled the goal by Eli gold rat.
And it, he, he like gold rat isthe father of a theory of
(33:13):
constraints.
And it's used a lot in themanufacturing world.
And he wrote this in theeighties to talk about his
experience in the seventies andeighties of helping make
manufacturing more efficient.
And theory of constraints is thesame as about like breakthrough
method is you've got to, you'vegot to supply a manic
manufacturing line and there'sone machine that can't hang.
(33:36):
And so how do you build aroundthat machine to be more
efficient so you can get lowercosts and throughput.
And so when I was going throughthat, I realized like, okay,
these systems that, that peoplewant to fix or need to work on
(33:58):
when they, they have so manyideas of, Oh, we need to
automate this.
We need to do that.
If you automate something orimprove something that doesn't
really move the needle, thatisn't focused on the bottleneck
and the theory of constraintsworld, it's called a false
efficiency.
And so there's lots and lots ofbusiness owners going around
(34:19):
creating lots and lots of falseefficiencies that they're
improving things, but they'reimproving things that don't
change.
The bottom line, don't changerevenue, don't lower, their
stress don't improve clientcustomer or employee
satisfaction.
And so the that's the biggestproblem with systems is knowing
(34:39):
what system to work on and whatstage it needs to be worked on.
So automation is the kind of the, the peak level of, of systems
development.
But a lot of times you can havethings done manually and things
work great, and you can get alot of growth through manual
(35:00):
systems, but you need todocument it.
So I say, in my book that youdelegate first, then you
document, then you maybeautomate.
Now that might seem backwards ifyou're paying attention to the
nomenclature, but you delegatebecause you, as the business
owner are not going to documentthings well, you're just not
(35:21):
wired for it.
You're not structured.
Just like I said, theengineering partner who skipped
steps and all this stuff thereare, I know it's hard to
believe.
There are employees that reallylove documenting things.
They really love getting thingssorted out and detailed and
meticulous.
And I know that sounds crazy forbusiness owners that they, that
(35:46):
person probably thinks they havebrain damage to enjoy it, but
you got to delegate it and getpeople that enjoy the systems,
enjoy the process, enjoy themastery of their craft mastery
of their role, and to have themdocument it.
And then if they are thebottleneck, because they just
can't get through it.
There's too many steps.
(36:07):
There's too much duplication.
Then try automating it, automateparts of it, automate pieces of
it.
And does that improve, improvethe process?
So that's what I see in thesystem side of things is they
work on the wrong ones.
They try to jump to automationout of the gate.
And if you automate a flawedsystem, you just have more
flawed results.
Kyle Hamer (36:28):
So your point of false efficiencies, right in
your, in your, in your book,there was a, there's a gentleman
I worked with about five yearsago, four years ago.
And we were working together onsome projects and I would come
in and I would whiteboard stuffout, or we would, we would, we
would discuss things and wewould leave the room and it was
(36:50):
all stored in my head.
And he'd come back later andyou'd go, Hey, where's that
written down at th w where'd youdocument that at H can you give
this to somebody else?
Like, how can you, how can youhand this off?
And I think that's one of thethings that either when you're a
survivor or a creator or abusiness owner, somebody who can
look at things and can solutionimmediately when you own it,
(37:13):
when you own the outcome, right?
It's very easy for you to do it.
But to, to think about how todocument it for somebody else,
how to recreate that process isa big, it's a big challenge.
It really is.
And I see a lot of folks that goimmediately to these coming back
and picking on marketing.
But I see a lot of people thatgo to these just incredibly
(37:34):
complex marketing, automatedlanding pages and email, like
it's this whole generic flow ofhow things move to the right and
the left and go through stuff.
They have no idea what'shappening.
The person who automated it,didn't write it down.
It's not somewhere where theycan visually see what's
happening.
And they can't see where theleaky pipes are in more often
times than not.
They have leads that are sittingin their database that are not
(37:57):
making it over to their salesteam because nobody documented
and thought, Oh, Hey, by theway, did somebody check over
there?
What Pete did on, on pipe numberfour and make sure that that's
actually being ported in for oursales team to see,
Josh Long (38:09):
Well, the worst example I've ever, I was when I
worked for Chet Holmes, we weredoing satellite radio ads and
getting leads at$18, a popbusiness owners.
And he had this developer, andthis was 2008.
And we had this developer thathad built all these databases,
custom SQL databases that leadsare coming into.
(38:30):
And it was before landing pagestools existed.
And so we're creating forms fromscratch with this developer.
And so the CEO and I mature.
So we fly to Atlanta to go meetwith the fulfillment team.
And that's where the developerlived in, in the office there.
And going through thesedatabases, I mean, we're paying
(38:50):
$18 a lead for these businessowners call in from satellite
radio ads.
And it was profitable.
And we were making, I thinkwe're doing about 10 million a
year at the time.
And I'm going through databaseson this guy's workstation, and
I'd never had access to this.
And I said, what's that databaseabout?
(39:12):
And he says, Oh, that was from apromotion with Tony Robbins.
I said, well, what happened toit?
He says, Oh, Chet said wecouldn't email them.
I said, why?
He says, I don't know.
I said, how many people are inthere?
He says 10,000.
I mean, it was$180,000 worth ofleads, just sitting there.
(39:33):
And it's probably worth more.
Cause they were a referral fromTony Robbins and I'm like, can
he, Mitch, can we startinteracting with them?
And it had been too long andthey were cold and whatever, but
it was like, that kind of stuffhappens everywhere.
And so the, and, and we didn'teven have to spend for those
leads.
Those were referral leads.
And those were through a warm,warm referral.
(39:54):
And I mean, it was literally aminimum of$180,000 in lead value
right there.
And, and to put perspective, wepay$18 a lead, but we probably
generated$250 in revenue perlead or something like that.
So it, it, it w it wasn't justthe cost of the lead sitting.
(40:15):
There is the opportunity cost ofunread, unmet revenue that we
could've gotten out of thatlist.
So, yeah, it happens everywhere.
Kyle Hamer (40:23):
It does.
I mean, I was on, I was on aphone call two weeks ago and the
person said, Hey, you know,you're going to hop into our
marketing automation tool.
I have concerns that these leadsaren't even making it over.
There's a large portion thataren't even making it over to
our sales team.
And I was like, well, didn't youturn on the email notifications
(40:44):
just to let your sales team,when they came in in the, the,
you know, the person was like,wait, there's email
notifications that you can sendto sales reps.
And I thought, huh.
Yeah.
Well, and then here you are.
Right.
So I, I completely understandthat now.
(41:05):
So, you know, we're, we're,we're popping through the, we're
popping through the growthlevers when we picked on
marketing a lot, but you talkabout kind of the last two is
being critical and criticallyintertwined with vision and
mindset.
Why is, why is it that those areso important in where's it, the
businesses or business owners,entrepreneurs, where's it?
(41:26):
That they struggle around thoseelements?
Josh Long (41:28):
Yeah.
I think vision so many of usstart an idea, start with an
idea some way to either changethe world or help a certain
population or make a pile ofmoney.
And we start out and we getgoing, and then we get to six
figures and then we maybe get toseven figures.
And then our goals change, maybethat takes five years or 10
(41:49):
years to happen.
And life happens and your wifegets cancer, or your parents
die, or something changes.
And your goals are no longer thesame as when you started, but
you've not ever revisited that.
And so to me, vision is reallycritical to stop and take a
(42:09):
break and say, what do I reallywant?
Because when I started this, Ithought I was going to create a
hundred million dollar companyand be on entrepreneur magazine
and be on the Inc 500 list.
But, you know, I don't careabout any of that anymore.
We've got a good life.
We, our kids are out of college,my wife and I want to travel
(42:30):
more or whatever the scenariois.
And unless you revisit that andfigure out what in the world do
you want, you're just going tokeep doing the same thing and
you're going to be stuck in thebusiness.
And I think that's where the,the vision effort of, you know,
the things have changed.
(42:51):
I want something new and beingokay with that and accepting it.
And a lot of times you trapyourself because of your own
commitments and the word yousaid to your staff and, and the
honor, and, and integrity thatyou have and loyalty.
And so maybe you've got somebodythat has been wanting to be a
(43:13):
partner and you just don't wantto grow anymore, or they just
keep pushing.
And now they're a Burr underyour saddle, and you've got to
let them know, Hey, I reallywant to change this.
I know three years ago we talkedabout this is you could come in
and, and partner somehow.
And it's just not a fit anymore.
And that's really scary for alot of business owners because
(43:34):
their care for their staff, theycare for their people.
They don't want to pull the rugout from under them.
They don't want to change.
And so I think that's where thevision is so critical to just
keep refreshing and making surethat your business is serving
your life needs as much aspossible, because that's the
only point.
The ultimate reason to start abusiness is to give you the
(43:55):
lifestyle you want.
That's it, time, money, freedom,stress, focus, creativity, all
of that.
The business should be servingyou a hundred percent
Kyle Hamer (44:06):
Well.
And I think that that's, youknow, you, you hit on a couple
things in the in these twoparticular pieces that are
really, really important.
Not only for businesses that aremature, but businesses that are
starting out, right?
Because there are a lot ofentrepreneurs that think I'm
going to become the next Uber.
And so they burn through cashand make business decisions that
(44:29):
don't actually build a business.
That's one of the three that youtalked about at the beginning,
right.
Build it to sell it, build it,to make it a cash cow, or build
it to hand it down to yourfamily.
And if you don't start withthat, I mean, to your point
coming full circle, if you don'tstart with that end in mind at
the beginning, you know, it'slike, well, without a map, any
(44:52):
road will do.
Josh Long (44:54):
Yeah.
Yeah.
I'm working on an adventureright now and with some partners
and we've got very clearobjectives and it's making
everything so easy to executeon.
And I mean, we've got ourstrategy, right?
The business model issophisticated and proven, and I
know it'll work.
We just gotta make sure it fitsthe marketplace.
(45:14):
So, so the business model issound and our differentiation
strategic differentiation sound,but will the market respond?
And so we will find out the nextfew months and our, our goals
are very clear of how we want itto serve our lives and how we
want it to generate revenue andwhat our multiple objective to
(45:35):
grow it, to sell it is.
And yeah, it makes, it makeseverything so much easier.
Now I'm fortunate that I've got10 plus years of experience
looking at other businesses thathave worked.
And I think this is the perfectreason why consulting is such a
great precursor toentrepreneurial success is
(45:56):
because I can, I've seen amillion different businesses and
business models and what'sworked and what hasn't and
figured out how timing works.
I mean, timing is so much of theluck of being in the right place
at the right time with the rightmarket with right idea.
And because so many of us are sofar ahead of the market, or so
far out ahead of the rest ofsociety, but that's costly.
(46:16):
You just end up educatingeverybody on why they need to be
looking that way.
Kyle Hamer (46:21):
Yeah.
The bleeding edge, they, theysay that the bleeding edge
companies are the ones that fallflat.
The leading edge companies arethe ones that, that make money,
Josh Long (46:29):
Scoop it out.
And yeah, they come up rightbehind the bleeding edge and
they scoop up, all right,
Kyle Hamer (46:33):
They take a good idea and they turn it into a
cash cow.
And then as the market matures,a lot of those, either
entrepreneurs or people thatstarted will start to exit the
business and move on a reallygood example of that is Google.
You had Larry Page.
And Oh, I could see.
Yeah, Sergei.
They came in, they helped growit.
(46:54):
They brought in management, theycontinued to grow, but as their
mind realized, Oh, Google ismaturing.
This is becoming morecompetitive with cloud products.
Amazon web services is coming.
Microsoft is building acompetitive set of, you know
office products.
They moved into alphabet, right?
Like they, they moved there,they moved their selves to stay
(47:16):
ahead.
But there, the stuff thatAlphabet's working on is stuff
that we still have 15 or 20years before we see it in our
everyday lives.
Josh Long (47:25):
Yeah, exactly.
I mean, it's just like, Merck'sthe eighties back in the
seventies, creating newinnovative products, antilock
brakes, and whatever that nowevery car has.
And these, these innovators getinto these spots where they just
are so far ahead of the rest ofthe world, but without the
resources or the horsepower andmoney that small business
(47:45):
owners, when we get out that farahead, we just fall flat.
Kyle Hamer (47:48):
Yeah.
Because there's no market there,but a lot of, a lot of small
businesses really succeed in amature, a mature market, right.
Where there's, there's plenty ofmarket demand.
Other people have educated, andnow you've got your particular
flywheel insurance doctors,dentists, like nobody has to
educate you on what you needdental work for why you would
need insurance a hundred yearsago.
(48:10):
That was a bit different.
So w when, when people areworking through this, when
business owners are workingthrough this, Josh, what, what's
the best way to say, do I needto get help?
Do I need to get a consultant?
Do I just need to read Josh'sbook?
What are the, what are the bestways to start identifying?
(48:33):
These are common challenges Ihave, or these are the pains I
have, or here's how I do my ownbasic rubric to know.
I really do need help to, to hitthat, to get out of the seven
figure desert.
Josh Long (48:43):
Yeah.
It's obviously the book waswritten to help you through that
process.
So I will selfishly say, just goby the book and March through it
and go through chapter 13 andthe profit priorities process to
prioritize what's there.
But the quick rubric is whereare you frustrated regularly on
(49:03):
a common theme, wherever thatis.
That's a bottleneck, where areyou spending an inordinate
amount of time putting outfires, solving problems, not
being able to do anythingproactive.
That's another bottleneck.
So those are the two places thatI focus on with clients is where
are you frustrated and where youtime-suck that because you need
(49:26):
space to lead an organization.
All of my clients, I've got topartner with a guy named Perry
Marshall.
We've got a program calledadvanced mastery network, and
we've got six to 10 clients ayear going through that.
And they're all in theseven-figure desert.
They're all trying to get to 10million.
And the key factor of those thatare successful in it are that
all the owners have space andtime to get to meaningful change
(49:48):
and proactive problem solvingand implementing stuff that
Perry and I recommend for them.
And without space, I think novelRobert Kahn, he's an ex
entrepreneur, Silicon ValleyCEO, a venture capitalist, or an
angel investor.
And he says a busy calendar anda busy mind will prevent you
from doing great things.
(50:09):
And I think that's the kiss ofdeath for most small business
owners.
If they just hit the groundrunning, come home, exhausted,
pass out, work, weekends, worknights self-medicate too much.
And those are, those are thesigns that you've got problems
and needed help.
Kyle Hamer (50:28):
I think there's Sage advice there.
There's, there's definitelystuff that you've learned
working with Chet, Tony, and nowPerry, across those multiple
businesses.
I mean, there's, there's just alot of wisdom in what you're
sharing.
So transition year is somethingthat's always fun.
What's a, what's a book thatyou're reading right now.
That's blowing your mind.
Josh Long (50:50):
So it's funny.
I actually don't read muchanymore.
I went through such a phase ofreading everything under the
sun.
So I will recommend my favoritebook of all time.
It's a obscure, but for businessowners, I think it's really
useful.
It's how to fail at almosteverything and still win big by
Scott Adams, the creator ofDilbert.
(51:12):
It just, it's kind of like amore mature four hour work week,
but without the hype and withoutthe unbelievable sales pitch.
So to me, I thought TimFerriss's four hour workweek was
good to open my eyes tolifestyle design and
simplifying, and, and reallyintroduced me to Richard
(51:34):
cautious, 80 20 principle, andRichard and I have become
friends.
And I'm more like pen pals, I'mwriting emails.
But yeah, I think I think ScottAdams had a fail at everything.
It almost everything and stillwin big is fantastic.
Kyle Hamer (51:50):
That's awesome.
Put a bow on it for us.
Summarize up the key, the keythings people need to know about
bottlenecks and then tell themhow they can get ahold of you.
Josh Long (52:00):
Yeah.
I think the summary is you'vegot to make some space for
yourself to think, and if youcan't it's just going to be
Groundhog day over and over andover putting out fires and
spinning your wheels and notreally going anywhere.
And so if that sounds familiarand you don't know how to pull
(52:24):
the rip cord and make any spaceand you feel the pressure piling
on and then, then I'm happy tochat, happy to help get you
some, some space and freedom ifyou want to grow through to 10
million.
That's my sweet spot.
So I love doing it.
I love taking the risk off ofthe business owners to get
there.
And we just have fun, fun,scaling it reach out to me.
(52:48):
You can go to my website,bottleneck, breakthrough.com.
There's contact forms,application forms.
I've got a Facebook group that Inudge along at a bottleneck
breakthrough method insideFacebook.
I'm on LinkedIn, easy to getahold of there, but otherwise,
yeah, I hope this is valuable.
Hope you get a ton of value fromit, Kyle, this is why you're one
(53:10):
of the best podcasts I've everbeen on with asking useful
strategic questions that addvalue to the, to the listener.
So great job with that.
Kyle Hamer (53:20):
Hey, thanks.
I it's, it's been a pleasure tohave you here.
I mean, it's not every day thatwe get to break down really the
six levers in and get into the,kind of the mechanics of small
business.
Yeah.
So I've heard so many timespeople talk about, Oh, we got to
work on the business, work onthe business, work on the
business, but the owner is sobusy inside the business.
And so I just, I reallyappreciate your, your breakdown,
(53:43):
your, your, your differentlevers and the way that we've
made it very approachable forpeople to fix.
What's broken so awesome.
It's I, I, I think it's been afantastic show for those guys
who are listening.
You've been listening to KyleHemer and Josh long.
Josh is the author of bottleneckbreakthrough.
And we will have the link forhis book as well as how to get
(54:05):
ahold of Josh in the, in the, inthe notes.
Until next week you've beenlistening to some, a podcast.
Thanks for coming in, likeshare, subscribe, do something
fun, let other people know.
Don't just keep it all toyourself and continue to grow,
push on push forward and be abetter you.
Speaker 6 (54:24):
Okay.
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