Growing and Managing an Effective Team to Scale a Business

Intro (00:09):
Welcome to innovations and breakthroughs with your host Rich Goldstein, talking about the evolutionary, the revolutionary, the inspiration and the perspiration and those aha moments that change everything. And now here’s your host, Rich Goldstein

Rich (00:33):
Rich Goldstein here, host of the innovations and breakthroughs podcast, where I feature top leaders in the path they took to create change past guests include Roland Frasier, Joe Polish, and Joe DeSena. This episode is brought to you by my company, Goldstein patent law, where we help you to protect your ideas and products we’ve advised and obtained patents for thousands of companies over the past 27 years. So if you’re a company that has software, a product or a design, you want protected go to Goldstein patent law.com, where there are amazing free resources for learning about the patent process. And you can email my team@welcomeatgoldsteinpc.com to explore if it’s a match to work together. You could also check out the book I wrote for the American bar association that explains in plain English, how patents work it’s called the ABA consumer guide to obtaining a patent. I have with me here today, Austin Clark Austin is the CEO of Moxie pest control of Arizona in 2020 is Phoenix branch grew by 119% and is now scheduled to double again in 2021, uh, in growing this and the other businesses that Austin has, he’s learned what works best in growing and leading teams and businesses.

Rich (01:41):
And so he coauthored the E-Myth pest control contractor along with Michael Gerber and is the host of the popular podcast. Multiply you. So I’m very pleased to welcome here today. Boston Clark. Welcome Austin.

Austin (01:54):
Hey, happy to be here. Thank you, rich. Thanks for having me.

Rich (01:57):
Yeah, my pleasure. Um, I want to just like dial it back a bit to kind of like how you got into all of this, how you got into this kind of, uh, um, crazy field of entrepreneurship as many entrepreneurs would, would lament, but kind of how, w what got you into being an entrepreneur to begin with?

Austin (02:15):
Um, so I think for me, the short version is I, I think that I started like every other entrepreneur, uh, pushing a lawnmower or selling things on the, on the corner, you know, in the, in the neighborhood. And so I’d probably say, you know, pushing the lawn mower and providing those services at the age of 10 or 11 or 12 is kind of what got me into entrepreneurship. I mean, at that age, I didn’t realize what minimum wage was or knew about that, but I knew that I could take a rickety old, old lawnmower and in an, in an hour or 45 minutes, mow a lawn and make and make 20 bucks. And, uh, you know, in the mid nineties, I guess you could say, or early nineties for a 10, 11, 12 year old kid, I thought, uh, I mean, I didn’t know anyone that had $20, uh, that was my age.

Austin (03:02):
And so, uh, I think that’s probably where it started. I think as things, um, progressed, I was able to find an opportunity with the company that I’m with today, um, Moxie, and it was doing direct sales. And, and that was, uh, that was a heck of an experience. That was something that I think really helped me to understand that we’re not bound by the hours in a day that we’re work, that we work, but that we can go out and really determine, uh, how much we want to make an hour if you, if you kind of do the calculation that way. And so that’s, that’s been a really neat experience. And then it, I kind of worked by self, into national sales leadership, and then, um, operations and then ownership about 10 or so years ago. And so, um, that’s, that’s what we’re doing. We’re just trying to wake up every day, provide the best service to customers that we can there’s ups and downs. And as long as you can kind of manage those ups and downs, like the real estate market, that there’s more ups than downs and you’re constantly trending up, then you’ll then you’ll probably be all right.

Rich (04:10):
Yeah. Yeah. Very interesting. Very interesting. And, and so just kind of borrowing from the whole E-Myth thing and like, you have the book with Michael Gerber and I’m, I’m familiar with the original E-Myth concept of that. Most businesses are not started by entrepreneurs, right. They started by a technician with an entrepreneurial seizure seizure. So in this case, that would be someone who you’ve mentioned kind of like, um, you know, delivering papers or selling things as like a kid that’s like a technician with an entrepreneurial seizure is right. You adjust your, you are providing the business, you are fulfilling on it. You’re the salesperson, you’re the one who’s doing whatever the work is, uh, providing the service. Um, and then kind of like when you got into, um, into pest control, you were working in sales, right? So it, you, you didn’t start out as the technician, but you started out in sales and then you worked your way into being an entrepreneur. You worked your way into being the guy who actually got, you know, got to all, have all the people involved, all the people involved working on behalf of you. So tell me about that transition of like, going from kind of being a guy who’s just know who’s in sales, who’s, who’s providing a portion of it to actually, you know, um, growing it into, into a place where you’re, you’re working in and managing other people.

Austin (05:35):
Yeah. And so I think that the only thing that’s worse than going from technician to entrepreneur is going from sales to entrepreneur. And so, I mean, imagine this, right. Um, I, I did great as a sales person and, you know, if you’re doing great as a salesperson, you’re doing usually well financially, and then to be able to trade that for own or ship, um, a fixed salary all a lot less than that than the sales commissions, then you’re, then you’re used to making, and then having to learn all of the back end up. I mean, salespeople normally no offense to any salespeople out there. And I can say this because I am one too, but normally are the worst. Um, or it can be some of the, the worst operators, um, out there because they’re so usually creative, they’re really, um, high D they’re more loud.

Austin (06:32):
They’re really fast paced. They’re good with people. Great. With words, not so great with systems, not so great with rules, not so great with processes, terrible with HR, salespeople don’t even know what HR is, you know, or what it stands for. And so if they’re what my point is is that if there’s a, you know, hope for me, um, in, in, in, in being able to be successful in that way, there’s hope for anybody else that’s listening, but you need to really discipline yourself to be able to do the discipline of mastering operations and policy and procedure. And, you know, you read Jim Collins. Good to great. I mean, one of the things that really separates incredible or great companies from good companies is standard operating procedures, providing the same experience over and over and over, obviously surrounding yourself with great people and having an incredible product.

Austin (07:24):
Those are all givens. You just must have those things. You know, um, Michael Lee Gerber is a rock star, and I’m really glad to be able to have that opportunity with him to co-author the, uh, vertical in the pest space. Um, I, I think that if you’re an entrepreneur and you’ve, um, not read the E-Myth, first of all, you need to, um, his original one. And then if it, and then if you have read it again, that probably ought to be something you’re reading at least once a year, every other year. And what you’ll find is that it’ll lay forth the process, whatever business you’re in pastor home service, law, accounting, it can be a blue collar type field. It can be, uh, whatever, um, consumers want a replicatable duplicatable, predictable experience or good or product every single time. And so Michael goes about in a little bit of a story type format sharing with people, how they can do that in their business, whatever good or service or whatever they’re they’re offering. And so we’ve done the best that we can here at Boxee locally and nationally to be able to, um, create systems and processes that are easy to follow that provide a consistent experience and value to our customers time and time and time and time again. And I think for that reason and many, many others it’s, what’s allowed us to be able to scale and grow and, uh, you know, experience some of the, uh, the growth that we’ve been experiencing.

Rich (08:58):
Yeah, no, it’s fascinating. I agree with you on, on all of that. And I’m wondering too, like, so you mentioned Moxie and Moxie national, so you’re in an unusual position where you’ve gone from being like a, like a local territory owner to being someone who, uh, you know, is actually involved in providing services to other territory holders. Like you’ve got a special relationship with the overall organization. So how did that come about?

Austin (09:28):
Yeah, so, uh, you know, I’m probably biased because I’m one of the 10 or 11 partners at Moxy, but box is an extremely special place, especially so at the partnership or ownership level and all of the gentlemen that I have the opportunity to work with, it’s, it’s really been the greatest professional pleasure of my life and, and, and, and opportunity. And the way that some of that started is so boxy is a joint venture kind of company. And so if you look at the map today or go to our website, you’ll find 26 or 27 locations throughout the United States. Um, and we usually open two to three every single year. Some partners are really cranking and they’re growing. Some are kind of in holding patterns and they’re having operations catch up to all of the sales revenue. And so all of us are kind of in a little bit of different places.

Austin (10:24):
Well, the way that the model used to be, and, and still is in some markets, is that that local partner would do everything they would do all of the operations, they would do all of the sales, they would do all of the hiring, firing development, you name it. Um, and, uh, uh, a few years ago, I need to probably back up even more, um, probably six or seven years ago. If you can imagine the worst entrepreneur, the worst business owner in the world and multiply that by 10, you would have me. Um, in fact, I think I even won some awards from Guinness for being the worst business owner of the, of the year, a few years back. Um, and that bothered me, that bothered me a lot. I really didn’t win those awards. I’m joking about that, but, but it bothered me to not be incredible at what I was doing because previously I, I, I was, and so a few of us that were here, we got together and we said, Hey, we’re going to fix this.

Austin (11:20):
And we did. And we got really into, uh, operations and systems and processes and duplicatable, um, experiences for our clients and for our customers. And as we, and as we did that, some of the other partners said, Hey, Austin, you seem to have figured out some of the, the operational aspect of the pest control business or home service space. Do you think that while you grow our company, um, or, or while we grow our companies and scale them, you can kind of run the backend for us. And we kind of thought about that and said, yeah, I, I think that we could. And so we kind of created a scenario where we were working together, um, and, and really what it allows. So, I mean, I guess imagine this. So what we essentially did rich is let’s say that I own a, uh, $1 million company and you own a $3 million company totally informed million dollars in annual sales.

Austin (12:19):
And, and it’s a pest control company or whatever. Well, what that allowed us to do is to reduce the total shared cost of the operation, because now, you know, w with a million dollar company, my budget is such that I can only afford this kind of service person, this kind of office person, this kind of COO this kind of, um, but now that it’s a larger company, there’s more of a budget and that’s, uh, and so we share the cost by, um, you know, essentially by revenue. And then we have a management fee piece on top of that, that we then directly take and put back into the pest company here locally to be able to scale it and grow it. And so it’s, you know, people talk about competitive advantages and unfair advantages. It really truly is an unfair advantage. Maybe there’s other, either home service companies or pest companies that have other companies that they’re taking the profit from and putting it back into their, you know, their, their, their, their main company.

Austin (13:19):
But it it’s, what’s allowed us to double revenues the last two, three years now. Um, we’ll do it again this year. I don’t think that we’ll do it next year. I sure hope not. Um, that it’s a lot of growing, but it’s one of what’s allowed us to do that without taking additional notes or dead or, or, uh, or anything like that. And so that’s how that came about and fast forward to today, if you’re, uh, I think that we control or have the opportunity to provide support and control about 33% of, uh, the operations nationally for Oxy. And so if you’re a customer or a service person or a direct sales person in either San Diego, orange county, Riverside county, Tucson, Phoenix, Cincinnati, or Columbus, all of that workflow flows through our center here in, uh, in Phoenix.

Rich (14:07):
Got it. Cool. Well, I mean, I’m fascinated though by that model, it’s like, you’re able to bring on a team of people that smaller business couldn’t necessarily afford. Um, and, and you are sharing the expense bought according to revenue to me that that’s fascinating. I’ve never heard of that model before. Um, and, uh, but I imagine it’s, it’s got to, it’s got to work really well. I mean, there are, there are a lot of people that I would like to hire, but I don’t need a full-time person doing that. And, um, you know, like it would be great to have a full-time video editor, uh, you know, and Sharon team, but like, if I could share that with a few other businesses and we do it by revenue, that just a lot of sense.

Austin (14:52):
Yeah. Yeah. That’s kind of, kind of what we’ve done in house. Yeah. Maybe

Rich (14:56):
Not the best example, but that’s a, but yeah, I imagine that that’s, that’s really fascinating. So, um, now you’ve been doubling in revenue for the last few years, but what about profitability? How has profitability tracked as you’ve been expanding and double doubling revenue?

Austin (15:13):
Yeah. So I think that, you know, anyone that’s scaled a business or is growing a business, I think that, you know, that, uh, doing that totally sucks, cash specifically profit and so profitability as we’ve been, uh, doubling in size it’s profitability has been been low. Um, and that’s by design, um, one to make sure really every dollar that we’re spending is reinvested back into the company. I mean, after people are paid in salaries and wages and those sorts of things, um, and so really we’re just on a path to be able to say, Hey, well, we either get to a place or where we are not doubling in size every single year. Um, you know, profitability will come up to either average or hopefully above average for, for, for the industry. And so it’s kind of like, uh, I don’t know if you’ve heard rich the story or if any of your listeners have, but they did a study years ago with some children and they put, um, cupcakes in front of them.

Austin (16:15):
Have you heard this one before? And so they, uh, you know, they, they had the sample size and they put one cupcake in front of each child and they said, Hey, so here’s this cupcake now you’re free to eat it. Now if you’d like, but if you wait five minutes, we’ll give you two cupcakes. And so some of the kids said, I’m good. I’m eating this thing right now. And they did, some of them waited and they got two cupcakes. And so we’re kind of, we’re taking a little bit off the table each year, not tons, but we’re, we’re, uh, most of us are young here and are interested in scaling something right, right now, rather than pulling tons of money off the table. Got

Rich (16:56):
It. And, and, uh, you know, you left one thing off that description of the study, and that is that the kids that were willing to delay the gratification or ones that turned out to be very successful down the road. And so, um, you know, it’s important piece because it’s like, uh, I think the point you’re making is that if you’re able to delay, um, that kind of reward of the profitability, you can benefit that much more down the road, so you can double your cupcake take.

Austin (17:26):
And that’s the most important piece of that study. And thank you so much for sharing that because, uh, yeah, th discipline’s important, you know, we, so we see so many men or women that have great big goals, but their appetite robs them of their will. And, uh, and that’s, that’s tragic. It’s a tragic. Hmm. Yeah,

Rich (17:47):
Absolutely. You, and I guess, speaking of people, right. Like, uh, and, and the, kind of the psychology that impacts how people behave, um, as they’re running businesses and actually as their operating business says, I mean, we have the whole topic of leadership then, right. So, which is all about people. And, uh, I mean, what are you, you’ve, you’ve grown some teams over there and like, what are some of your secrets to really, to leadership and leading people?

Austin (18:16):
Sure. Um, you know, I think when I was young, so I’m 36 years old. And, you know, I think when I was younger, I still feel really, really young. But when I first started the business, um, I would often find myself saying, I, you know, either out loud or to myself, I, I can’t believe this is happening, or I can’t believe I just had that conversation or, you know, whatever with an employee. And, um, now I don’t say that anymore. Cause I feel like I’ve seen it all, heard it all. And it’s just a, it’s just fascinating human behavior and human psychology. And so, I mean, as it relates to shaping behavior, perhaps leadership, I, I think that leading with questions is really, really important. You know, our mutual friend, Howard, he’s really good at that Howard shore. Um, and it’s, uh, often, you know, the questions behind the questions.

Austin (19:06):
And so I think if you can begin with the end in mind and say, okay, this is what’s happening, but what is the behavior that I’m wanting to influence? Um, you can kind of devise a plan or make a path to be able to do that. So for example, at the most rudimentary level, if you’ve got issues with frontline employees that are habitually clocking in late, well, how do you correct that? I mean, there’s lots of courses of action. In fact, an infinite amount of courses that you could take a, if someone clocks in the next day, a minute late, do you fire them? I mean, I guess you could, that’s probably not the greatest, uh, thing to do. Um, and so what, how is it that you’re shaping their behavior? How are you, you know, was it communicated well to them? Did their manager let them know that was that expectation set from the get-go?

Austin (19:59):
Um, or what about salespeople that aren’t hitting sales numbers? Do they know clearly what their targets are and where they need to be, whether it’s each day or week or quarter or month, or what have you. And so I, I think that, uh, clear communication cannot be emphasized enough and then just really understanding that your people are individuals and how you can help each individual and, and, and, and molded and shaped their behavior by, by, by knowing them and by, uh, you know, understanding what makes them, what makes them tick. You know, my son, he’s 12. Um, he plays on a really competitive national football team. Um, they didn’t play last year because of COVID the year before. I think they took second in the national tournament the year before that they won it. And they’re really, really good. Um, and they’ve got some really incredible athletes on the team, but I really think that their secret sauce is their coaching staff.

Austin (20:53):
Yeah. They’ve got great athletes. They’ve got boys that can throw, they’ve got kids that can run. They, it looks like an incredible miniature football team, but their coaching staff has such that they know each one of the boys. And what I mean by that is they know that they can yell at this kid and that’s what motivates him. They know that they need to put their arm around this boy. And that’s what motivates him. They know that this person needs words of affirmation or encouragement. And so really getting to know your people, because if you yell at the wrong boy or put your arm around the wrong boy or encourage the wrong boy, um, that could have a totally different and negative effect. And so knowing your people, understanding what you’re wanting to achieve, patching them into being part of solving the problem, I think, well, I think we’ll go a really, really long ways.

Rich (21:46):
Yeah, that’s great. And, you know, and speaking of, um, your people on your team, like, how do you find the best people? How do you find the best people to, to join your team?

Austin (21:55):
We’re, we’re still working on that. Um, and that’s no slight to any of our a hundred plus staff that’s here. They are incredible. All of our employees, I care a lot about their development is important to me. Um, we’re always hiring, we’re constantly leveling people up and having them move up in the company or move out. Um, as far as finding people, you know, it’s kind of an interesting topic today as, um, there’s just a staffing or employee shortage. Um, regardless of, I think the field that you may, that you may be in, um, just because of the way some of the, the, the climate is with the government and just kind of the, the pandemic and, and, and all those sorts of things. But we are constantly hiring. I think that we probably place ads on all the same places that people place, ads, whether it’s indeed or zip or monster or local recruiting boards or visiting different colleges or whatever, I feel like we’ve tried at all.

Austin (22:52):
So I think that first year just always constantly hiring you’re constantly hiring. You’re constantly bringing people in. Um, I think that you’ll find that your very best people come from the promoters inside of your company. They come from referrals, it’s the same place your best clients come from from, from referrals. And so really what we try to focus on on top of all of the normal, traditional type, uh, you know, hiring and recruiting techniques, um, and job boards and posting is we work hard to have this place, that boxy be a culture and a place that people want to be so that they do want to refer their extremely sharp friends or family members. And so there’s different things that we do, whether it’s activities or quarterly events or celebrations or perks, even as little as, you know, so all of our employees they’re able to, anytime they need to have their personal vehicles, oil changed, uh, we do that and depending on the vehicle, it’s $30 to $80 and we don’t care how much it costs really, or what vehicle it is.

Austin (24:01):
And, um, that’s just a really small investment of a few or to several thousand dollars a year that just lets our people know, Hey, we know that you’re capable of changing your own oil or taking it in to get changed. And we know that you have the 50 or 60 or whatever bucks to be able to do that. But if there’s one more thing that we could do, that’s helpful to you that you don’t have to do after work or on a Saturday. Um, you know, we believe that your time is more valuable than maybe the 40 or 50 bucks that you would have used, uh, to change your, to change your oil, go spend that at the park with your kids, go spend that sleeping, go spend whatever you want to do. Right. And so I think that you look to make your organizations a place that people want to be. And so what do people want? Uh, and, and, and you, you simply just ask them and they’ll, they’ll tell you, so make it a place that people want to be. That’ll probably be your number one investment for recruiting and finding incredible talent.

Rich (24:59):
That’s great. Um, and, uh, one more topic, um, acquisitions. Um, how do you, uh, I know this is a topic that you like, and so how do you set up your business to be in the best position for acquisition?

Austin (25:12):
Um, I think that, that, uh, for us, I think it’s been reputation. So Moxie’s been around since the early two thousands. My location has been around since 2011 for about a decade. There’s, uh, 1200 registered pest control companies in Phoenix, I think upwards of 20,000 or 25,000 nationally across the United States. And most of them are smaller mom and pop type shops, a one to two to three to four person operating companies probably hovering on average around half a million dollars or so in, in business. Um, and those people are, at some point they’re, they’re retiring or they’re doing something else or they are. And so we’ve just found that it’s been, um, the, the first deal that we did probably over two years or so ago, it was by accident. We got an email to our general email that said opportunities 2019. It was around like November, December of 2018 and push came to shove and it was a company, a national or a regional company that was looking to liquidate their, their Phoenix branch.

Austin (26:16):
And so we kind of looked at that and over the course of a couple of weeks met and struck a deal and, and, and, and the rest is history. And so I think that, um, reputation’s important. I think that who you are is important. Um, no one, you know, you got to consider too rich. I mean, most at least people in the home service space, it’s most of what they’ve done their entire life. They’ve put at least a decade, usually two of the time, three decades into their business. And they need to be able to get a return for that. They need to be able to retire and, uh, you know, kind of move on to the next piece and part of their life. And so I, I think that our boxes reputation it’s, uh, it it’s stellar. Um, if you look at us online, if you’re part of the industry, whether you’re a chemical manufacturing rep, whether you are a supplier, Moxie’s got just an incredible reputation.

Austin (27:11):
And so now it’s become such that as we’ve kind of got the word out about us buying, not just here in Phoenix, but in a lot of other markets that we’re in like Chicago and Kansas city and Minnesota and, uh, Ohio, um, and, and really everywhere. We’ve got a, a place on the map. Um, people feel comfortable about working with us. They know they’re going to get paid. They know they’re going to get paid. Usually top dollar. They know that their people are going to be taken care of. Um, they know that we’re going to make mistakes and that we’re not perfect, but that will work tirelessly to be able to have it be a good experience for everybody we’re in this for the long haul. And, um, there’s nothing that we would be interested in doing that would cause possibly be like a short-term gain if it meant damaging our relationships or, um, brand or reputation long-term, as we have deals come across our desks, we’d much rather prefer not doing them at all, if any party is going to lose out in, in, in that deal. Um, and not just the selling party, but, but, but obviously us as, as well, we would just rather not do those deals. And so it’s been neat. We’ve just got more and more and more opportunities that people, um, bring to us. And we usually say more, uh, no more than we say yes, but I think because of our reputation, people feel comfortable referring and, and know that we’ll shoot straight with them, tell them the truth, even if it’s not something that they want to hear. Okay. Yeah.

Rich (28:45):
Great, definitely great advice. Great model for others to follow of people want to learn more about you or get in touch with you. How do they go about doing so

Austin (28:54):
You can find me on LinkedIn. They can message me there. Um, they could email me directly if they’d like a Clark, uh, a a R k@moxiepestcontrol.com. Um, my cell phone number, you could reach out and call me don’t, don’t call me, text me. I usually don’t answer the numbers that I don’t recognize, but you guys can text me if you want at 4 8 0 2 5 4 9 7 3 0. Um, so yeah, text me, email me, or find me on LinkedIn. I’d love to be able to collaborate or, uh, provide any other context or value that I, that I might be able to, to anyone that’s listening.

Rich (29:26):
Thank you. It’s very generous of you, and I really appreciate you being generous with your time and, and, um, and spending this, um, half hour with us to, uh, to tell us about the things that you’ve discovered that work. Uh, and so, um, you know, Austin just really appreciate you being here, so thank you. Of course. Yeah. Thanks for having me on rich.

Outro (29:51):
Thanks for listening to innovations and breakthroughs with your host, rich Goldstein. Be sure to click, subscribe, check us out on the web@innovationsandbreakthroughs.com and we’ll see you next time.