Learn To Live With Uncertainty
The Inventive Journey
Podcast for Entrepreneurs
Learn To Live With UncertaintyYou can lose your biggest account. You can have a new competitor come into town and start to take a bunch of stuff away from you. It's constant uncertainty when you own your own business. And when you are working for someone else, and you have a steady paycheck. It is a vast difference. So if you think ok, I don't want to scare people away from it. It's not impossible to do. It's a mindset where you go ok another body blow, so what. I'm still standing. Just get up and get going again. So if you can't deal with that, then you will have a tough time in business for your self.
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The Inventive Journey
Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.
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[Music] lose your biggest account you can you know have a new competitor come into town and start taking a bunch of stuff away from you it's it's constant uncertainty when you own your own business and when you're working for somebody else and you just got a steady paycheck it's a vast difference so if you just think okay i don't want to scare people away from it it's not impossible to do it's just a kind of a mindset where you go okay another body blow so what i'm still standing right just get up and get going again so if you can't deal with that then you'd have a tough time in business hey everyone this is devon miller here with another episode of the inventive journey i'm your host devin miller the serial entrepreneur that has grown several startups in the seven and eight figure businesses as well as uh founder and ceo of miller ip law where we help startups and small businesses with their patents and trademarks now and if you ever need help feel free to reach out to us at strategymeeting.com and we're always here to help now today we have another great guest on the episode and it's uh gary and bros i think is the last name yes gross close um and so gary he went to uh never took one college business class because he never looked or thought of himself as being a business guy but i think if you mentioned right you did you got into delivering pizzas during college um you went worked for fedex for a period of time and you after about five years of fedex you decided fedex wasn't a wasn't fun anymore so you quit fedex moved to seattle um then uh started i think a small courier business that was under finance or didn't quite go as well so then you realized what you wanted to do is a bit different so you made some adjustments and pivots and kind of brought you to where you're at today and with that much and i won't steal your thunder too much so if that much is an introduction welcome on to the podcast gary thanks devin glad to be here so i i gave just a small snippet of your journey but maybe take us back to kind of going into college never taking a business class delivering pizza working for fedex and kind of tell us how your journey started well i just uh you know i wasn't sure what i wanted to do i was in college and i'd be fascinated by one subject after another and i could never make a decision i was going to major in so i did what they call a general studies right where you have to write your own major out and i said okay urban planning i like and poli sci and uh and a little you know public relations advertising kind of stuff and i threw them all together and just created a uh a general studies uh major so that i could just graduate right i wanted to get out of there and get in the world but i still didn't know what i wanted to do and i just was fairly certain i didn't want to be in business be a business dude right and so i i worked for fedex right after i got out of college because it was paying pretty well for those days this is 1975 right and i was making a big 485 an hour or something and they thought that i was rolling in it and uh i worked with them for five years and and uh it was very interesting they were just at that point where they were growing really fast so i was a driver for a few years and then a dispatcher and then they moved me to richmond virginia cincinnati and then chicago to manage their facilities there i didn't have an ounce of an idea what i was doing it just you know uh it was where i was learning on the job i didn't know what a p l was i mean i i had no understanding of things but i was good at managing people and and that was just sort of natural for me i don't know why and it was and so i i actually grew up during those years with fedex thinking to myself this is actually kind of fun because back in those days they let us run the station run the whole city right and there are very few i mean they'd make the pricing decisions but there were very few policies in place it was like running your own business and i thought i kind of like this right then i got to the point where i got higher up and it started becoming more bureaucratic and the company changed and you know nothing against fedex at all it's a great company but it just didn't match what i wanted to do so by that time i had the bug i wanted to run my own business right so i moved back to seattle and uh looked for a business to buy found a little courier firm let me let me dive in just really quick so you're working with fedex you know five years so it's a good little amount of time and you know get it get some experience get that you know get some uh you know experience under the belt so what what you know you say you kind of got worn out what was it about the you know the fedex was it wanted to make more didn't want he didn't love the work anymore what was it made you to say hey i'm gonna leave that and go back to seattle and and try my own or my hand at my own quarry your business i i think there was an epiphany i had when i had a senior manager of a vice president of the region for fedex decide that that they were going to make some changes on the personnel rules and i was my job was to put a happy face on that and tell all the employees why it was really a great idea because i had to be following orders right i'm not i was a station manager not a vp so um i just found myself not appreciating that opportunity right it wasn't fun everybody knew i was lying through my teeth i didn't think it was a good idea and and i thought boy this is just the beginning this is what i got to look forward to as long as i'm working for somebody else in a management role and at that moment i decided to give my 30-day notice and left fedex moved back to seattle during a recession and uh and looked for a business to buy and i had no idea what it was going to be but i told my wife don't worry it's not going to be in the courier industry well you know i couldn't find something that intrigued me and then i found this little business and uh thought uh you know there's only three employees but uh i can i can build this up i can make it make it happen so i i bought them but i was under finance for a long period of time and uh and it was uh a challenge but i i still own that company i'm still running it along with its new variations and it's bigger and different completely from what i bought it when i bought it but um but i like the business it's uh it's kind of a satisfying thing you know every day people are giving you deliveries packages that have to be from point a to point b in a certain amount of time it's like a puzzle it's a logistics issue totally and it's just it's just i still enjoy it no so and i think that makes perfect sense you know and it's interesting how much how sometimes we eat our own words and says oh i don't want to do the courier business anymore and then it's like oh maybe it wasn't the courier business there's really aspects of it and if i can do my own thing and manage it and run it the way i want and kind of do it differently then you can a lot of times find that joy even if it you know even if you have to eat your own words so to speak so now you did that you mentioned it was under finance and you know is doing it so how did you get you know how did you make that turn around or did you make the turnaround or how did you make that adjustment or you know you said that took for a period of time and those type of things so how did that play out so i'm looking at my my p l right i'm finally learning how to interpret it because there's a deal where i better learn faster i'm going to be sinking here and so i'm looking at my p l and i'm seeing it's pretty obvious what i already knew i got about 70 of all my costs are labor cost okay overhead was pretty low and um uh but you know major percentage of all my expenses was labor cost so if i was going to improve productivity or improve profitability rather i thought boy that's the thing to focus on how can i get everybody to be more productive and and so i started experimenting uh i wanted to do bonus programs of some kind focus the drivers and the employees on the correct things that i wanted them to do that i thought for sure would increase both productivity and profitability and uh so i go to the library this is before the internet right i go to the library and i think i'm going to check out every book they've got on uh creating bonus programs i'm going to study it and i'm going to figure out what i'm going to do so i did i checked out every single book all zero of them nothing there's nothing there and um and so i thought oh great i'm on my own here i'm gonna just figure this out so i experimented i started out with one bonus program it was a disaster i mean i it was wrong on so many levels right seemed like a good idea at the time so just out of curiosity what was that bonus program or do you remember the details i just oh i do i drew this thermometer on the wall right and then we were trying to count the number we were counting the number of deliveries we did every day and it was about 80 deliveries a day back then one big company at all right and and uh so i said well i'd love to do a hundred a day so let's see there's 20 days in the month here it's going to be 2 000 so 2 000 deliveries is our goal and then i'd color in the thermometer every day representing the amount of deliveries that we did that day and trying to build it up trying to make it good and i told everybody okay get 50 bucks which was a lot of money back then yeah 18 1981. um we'll give give all the employees 50 bucks if we hit 2 000. okay well we didn't okay we hit like 1992 or something right so well i had made the rules and of course everybody then says well we came pretty close shouldn't we get 40 bucks or something right and which which sort of defeated the whole purpose i mean you know the idea is no i'm not going to get subjective now and and say well i guess that was good enough right anyway it was a disaster um and and i learned okay well don't ever just set one goal right set a series of goals and make the bonus bigger as they get they get bigger okay that was obvious after the fact but it wasn't going in um and and i learned a bunch of other things but i i so i did a second bonus program that was i can't remember what it was now it was different and a third fourth fifth eighty-five eighty-fifth right on 219th they all failed because the goal was they have to reward the employee fairly they've got to motivate them to do the right thing because of the bonus it's got to be enough to motivate them right and it has to produce the results i'm looking for better you know profitability or better productivity or whatever and then finally too you know i can't forget the customers here on this it had to make a better experience of better product service for the customers well that's how i rated how whether the bonus program is right and it only took me 25 years was that all not a big trial and error in the real world and i was just so picky every time i did it i go oh that was close that was really close but i wasn't that close i just didn't understand that at the time um and and then after about 25 years i i had identified what i call the 80 central elements of equality bonus program and then after we figured that out after i figured that out every bonus program worked everyone met all the qualifications so now dive in a little bit long journey 25 years is a long time to figure out a bonus program now it's also not an easy problem to solve and so you know because almost to your point is it almost seems like every bonus program you try and rule out there's things that you just don't think about or you know don't anticipate that are either one the employees take advantage of or two it doesn't motivate them right or motivates them to do the wrong thing or you you know you lose money on it or any number of things and so walk us through a little bit you know some of the things that you did try that didn't work and then what if or what was the kind of the the final solution that now does work well you know i had had to identify what it was that each employee was doing so i had some people that were in our call center so their their goal was to answer the phones quickly so i associated the bonus with a computer at it you know this is a little later in the year the in 90s or something the computer could tell us how many calls were coming in and how fast they were answered okay and our goal was to answer within like six seconds or eight seconds or something i can't remember what it was now but but it was a certain specific time and the computer told us exactly what percentage of calls we were answering within that amount of time okay so we were able to to you know what i learned with bonus problems it can't be subjective it has to be very objective right it's just numbers you make the numbers you get the bonus you don't make the numbers you don't get a bonus right it's cut and dry but anyway so i set this goal i said okay we want 95 of all the calls to be answered within eight seconds okay so and the bonuses is uh x number of dollars for a month okay at the end of the month we're seeing whether we average for the whole month and then you get your bonus okay well the very first week we're trying this thing out we had two people out sick okay now we have less people in there to answer the phones and we are busier than usual so for after the very first week we'd done like 82 or something well if you do the math you're going wait a minute is it even possible to get the 95 by the end of the month and and it was but we'd have to do like 99.8 percent every day for the rest of the month right it was just ridiculous so everybody else did the math too and they that was the end of that one after one week nobody cared right there's no incentive it's so hard to achieve or so unattainable that it's not worth putting the effort right right right it wasn't gonna there's no way to do that percentage anyway it's not realistic um because the calls always come in groups and you can't plan for everything so anyway so i learned okay that doesn't work so when you're playing with percentages you got to make sure you're not going to get to the point where somebody either makes the goal real early and then kicks back or screws up the goal early in the in the period and you can't recover okay so so we change that to a daily goal and instead of being monthly and i'm not still paying the bonus monthly but every day based on the performance for that day we would add x number of dollars to the to the pool of money that would be distributed between everybody and so if they did over 95 that day they got the maximum amount in okay now everybody was focused what i really learned is it you have to minimize the time period that you're dealing with to keep people focused on it quarterly bonuses don't work monthly works or every payday works right otherwise they can't stay focused on it and your goal is to keep them really focused on so that's pretty much all they're thinking about because i know in this industry the customers get really upset when you're not answering the phone fast so you gotta answer it quickly or else or else they don't call back next time they call some other concerns and the whole service is based on lots of repeat business so anyway we learned that lesson about the time period and about uh how to work with percentages so that they don't work against you and we still had a few days where they you know got off to a terrible start early in the morning and and recovered kind of but you gets we gradiated the goals tiered right so they still get more and more if they just get up a couple more percentage points and um and you know i just learned from those kinds of experiences how to design these bonus programs and uh and that you know if you just focus the program on one specific uh measure measurement one specific thing you're measuring at a time then everybody's thinking about that one thing and that's the one thing that you can either prove or you're convinced increases your volume of business or decreases your cost or increases productivity however you want to say it um to to make a big difference on the bottom line so i wrote a couple of books about this after i realized okay i finally figured it out because i didn't think everybody else wanted to do 25 years of trial and error if somebody had told me when i started that oh by the way it's going to take you 25 years to figure this out i would say well i'm going to come up with some other idea though because i'm not going to do this anymore you would have given but i think that's almost all but if you knew on the front end what it would take to get the business successful and up and going and figure things out you know i think almost everybody would give up right because yeah yeah i think it's the entrepreneur in a good way but it's always it has a bit of self-denial in there in the sense that if you didn't have a bit of optimism or self-denial you would never dive into things in the first place and yet because you have that sense of optimism you're willing to take on the challenges and eventually figure it out even if it takes you much longer than anticipated yeah and i always say you know i'm an optimist because why wouldn't i be i mean who would do this and there who in their right mind would run their own small business if they weren't an optimist i mean it's just it's tough enough as it is without going through this stuff so yeah so now you've done that so you you've spent 25 years it was all the same business building the business that courier business well i i owned uh i bought and purchased a bunch of other delivery companies and merged them in but i also started uh a indoor uh family entertainment business uh miniature golf and batting cages and that kind of thing and video games anyway i ran that for 15 years at the same time and did a lot of the same concepts with the employees there um and i i bought and started a uh road repair service and man a couple other different things a little computer game company and uh and just whatever i thought i had the energy to jump into and um it's been fun it's been a ride right and it's hasn't been it hasn't been the get rich quick process by any means but it's rewarding i got a lot of friends who used to be employees or still are and um yeah yeah it's uh i enjoy it i mean i i i know now that i've done this i could never either go back now to work for somebody else or i could never have lasted 40 years working for somebody else i would have blown up or something no it makes perfect sense so so it sounds like a lot of fun things along the way learned a lot and i said now you're i think as we talked a bit you're you're getting towards you know every or towards the end of career looking up or kind of maybe taking a step back and if i'm putting words in your mouth by all means put them back you know looking and saying okay i've been doing courier i've been doing these businesses now i want to go and share my knowledge a bit and you've written a couple books maybe you can focus a bit more on speaking aids and kind of sharing the knowledge that you've accumulated is that about right yeah i've been trying to do the speaking and consulting thing more and i have a little bit of times but the uh but i'm still running the businesses uh the courier businesses uh um daily and we're 24 7. so it you know it takes a lot of energy um but maybe you'd take the 100 hours a week and now you only have to work 80 hours a week yeah yeah right that too and i tried to segue to that um and i have gotten freed up more than i used to be definitely but yeah i'm ready to kind of make a a bigger move and and move on to uh two more things i enjoy writing and i just uh i like to talk to other business people about this topic about how to increase more motivated and engaged workforce and i developed a couple of different other processes including a radical way to do performance reviews and uh um just some techniques that business owners can can do to keep the morale up and keep people motivated and engaged and i've learned a lot from that and i'd like to share it so that's what i'm doing it's awesome that's a that's a fun journey to take so now as we uh as we wrap up that part of the journey at the end of each podcast i always like to ask two questions so we'll jump to those now so along your journey what was the worst business decision you ever made and what did you learn from it you know i thought about that and it's pretty clear the first the very first decision i made was the worst one um because i didn't have a business experience i bought one book about how to buy a business and i read it made sense to me it was basically to in a nutshell you know forecast the earnings based on what their their business model is what their business is doing and multiply it times a multiplier of somewhere between one and five to come up with a price that you're willing to pay so that made sense to me the only mistake i made was a huge one i mean just monstrous right is i looked at the business as it was and said what could i build this up to and it and i didn't quite understand the idea was to price the value of the business based on where it was that day not what i could take it to so i forecasted five year plan and how much volume and revenue i thought i'd make and how much profit i'd make and and then i i offered a price well it was way too high i mean i overpaid by now by what i know i overpaid by a lot i mean a ton six eight times more than it was worth so and i and i didn't really have that much money so i put it all on a six-month balloon payment right and uh and thought well i'll crank this up then i'll borrow some money from the bank and buy it and everybody wins right well yeah it didn't quite work that way um but anyway that's that's why you know i i always say i was you know at 29 when i bought the business i was young dumb and under financed and i was under financed because i was paying way too much for the company and it was killing me and so when you're trying to buy your very first business if there are people out there listening thinking they want to get into this now and do their own thing it's fine just get some good advice and bring in somebody else who's smarter than you are to help you figure out what to offer in terms of how much you're willing to pay for business um that one was a killer and it took me good 20 plus years to overcome that no and i i think that's you know it's kind of the old attitude of you know the when you're buying a house the profit's made at the time you buy the house right in the sense that if you buy well then you're going to make good money off of it or if it's an investment and if you buy poorly it can take a long time for the housing market to reach where you can make back your investment i think there's a lot of the similarity with the business is if you buy it a good deal or you buy it at a place that you can be profitable it can make a big difference and on the alt flip side if if you buy the business and you over overpay or it's overvalued it can if you can recover it can take a long time so i think it's certainly an easy mistake to make especially because a lot of times you get really excited about the business you can see all the possibilities all the potential and you tell yourself well i can turn it around and i'll do all these things and you over you know you kind of over hype in your mind what you're all able to do over a period of time sure so you get excited about the deal and you never you don't evaluate it as well as you should have so i think that makes perfect sense so now is you to take the um we'll jump to the second question which is if you're talking to someone that's just getting into a startup or a small business what would be the one piece of advice you'd give them i would say and i have i have talked on this topic with other people before and i really come to the conclusion that it is the what i believe is that they have to learn to live with uncertainty and be okay with it um i didn't understand until i got into it that fortunately i guess my my style of business was such that that i was low-key enough and calm enough where i could get through some rough spots without freaking out right but i'd have paydays of 40 000 bucks or something coming up and only 15 000 in the bank well i originally you know when that first started happening i couldn't sleep the night that night and i was just nervous i figured out what am i going to do i can't tell the employees i can't pay them so what i i learned was i developed backup plans for everything that i could think of and i borrowed money off of credit cards i've negotiated lines of credit when i probably didn't deserve lines of credit and and i did all sorts of different things to try and prepare including not paying cash in my own paycheck because they used to leave the money in the bank um and and so that's hard to deal with and you have to kind of and i reached a point pretty quickly where i just go well i'm doing the best i can do i'm throwing everything i got at it and it'll work out and i tell you even though i did that on probably 30 40 percent of all the paydays for example right i never missed one i never had to tell the employee don't cash your check i told a couple managers that work with me notecast your check um but we were able to get through it and that was the biggest example there's other things that come up i mean you lose your biggest account you can you know have a new competitor come into town and start taking a bunch of stuff away from you it's it's constant uncertainty when you own your own business and when you're working for somebody else and you just got a steady paycheck it's a vast difference so if you just think okay i don't want to scare people away from it it's not impossible to do it's just a kind of a mindset where you go okay another body blow so what i'm still standing right just get up and get going again so if you can't deal with that then you'd have a tough time in business for yourself though i think no and i'd agree with all that advice i think it'd be good advice to take to heart well as we wrap up as people want to find out more whether they want to hire you for a speaking gig they want to buy one of your books they want to learn more about what you're doing they want to be your next best friend any or all of the above what's the best way to reach out to you and connect up with you i can go to my website and reach me through that that's www.smallbizsherpa.com that's smallbizsherpa.com and um there's more information about books there but the books are also on amazon and um bonus your way to profits was the first one i wrote and the ultimate motivated employee was the second and there's a couple more after that but if they just google my name or go to my website they will find me all right well i definitely help all right well i definitely encourage everybody to uh check out more reach out to carrie if you want to know more about how to make your business successful via bonuses and how to motivate employees if you or check out his books hire him as a speaking gig eddie or all the above and thank you gary for coming on now if you're a listener and uh you have your own journey to tell um make sure to go to inventiveguest.com and you're welcome to sign up uh to be a guest on the podcast um if you are a listener also make sure to click subscribe um so you get notifications as all the awesome episodes come out and if you would leave us a review and last but not least um if you uh ever need help with patents and trademarks feel free to reach out to us at miller ip law we're always here to help just go to strategymeeting.com well gary thank you again it's been a pleasure to have you on and wish the next leg of your journey even better than the last thank you very much good luck to you everybody you