EntreLeadership - #194: Patrick Bet-David—How to Scale Your Business

Episode Date: April 10, 2017

As the CEO of one of the fastest growing financial firms in America, Patrick Bet-David knows business, especially when it comes to rapid growth. This entrepreneur joins us this week to share his tips on expanding a company, plus his own story of escaping Iran as a child, spending time in a refugee camp, and coming to America. This is an episode you don’t want to miss! entreleadership.com/podcast Summit Event EntreLeadership Leadership Assessment Infusionsoft's "Custom Growth Plan" Learn more about your ad choices. Visit megaphone.fm/adchoices

helping business leaders grow themselves, their team, and their profits. This is the Entree Leadership Podcast. Now, here is your host, Ken Coleman. We are broadcasting from the Music City, and this is the podcast of leaders, by leaders, four leaders. Thank you so much for joining the conversation. Our feature conversation this episode is with a guy by the name of Patrick Bet, David, big deal on the internet. He is an entrepreneur's entrepreneur.

and this guy is a guy who really understands growth, rapid growth. And I love to talk to people like that who have figured it out. They just know how to grow. They've got a track record for growing. And as a result, they help us grow. So that is a theme of this podcast. You'll hear it a lot in the conversation. I'm going to tell you a little bit about how you can grow.

And that and so much more, of course, two free tools coming from our Entree leadership team and InfusionSoft, all focused on growth. So let's talk about growth for a minute. And I want to tell you a little bit from my vantage point on how important growth is, where you need to be growing. Because I get this question a lot. We get out on the road or we meet folks at live events. People come to our events here in Nashville. And I get a question over and over again, which is, hey, I'm here, but I want to go here.

And that sometimes is in a leadership role. Sometimes it's in a non-leadership role. Sometimes it's about revenue. We want to take our company, our organization here. And a lot of times that question is steeped in a bit of frustration. Sometimes it's soaked in desire, right? Hey, I'm here, but I don't want to be complacent. I want to move forward.

And so this idea of growing and growth is absolutely huge. Well, a lot of times people go, well, how do I grow? So I want to give you one thought, and this is huge. You need to come up with your growth process. Everybody's growth process is different. You can read a million leadership books. You can listen to a thousand podcast interviews. At the end of the day, you're going to have to customize a growth process.

Process is what prepares us to reach our full potential. So if you're sitting somewhere right now and you haven't reached your full potential, you need to look at your process. Now, process is what allows you to prepare yourself. So when the opportunity comes in those moments, that's when you reach your full potential. So process prepares you to reach your potential. So I want to give you four Cs. Three of them are just some basic. concepts here, and then the fourth wraps it all together. Ready? Here we go. Three Cs. I think as a leader,

if you want to grow to your greatest potential, you have to constantly be thinking about your character, assessing your character, feedback on your character. And by the way, character isn't always morality. You can be a very good person and not have great character, right? Character is discipline. Character is the necessary attributes, the quality attitude of a champion, of a great leader. Character's huge. Constantly be looking at your character. Secondly, competency. Listen, you have a core competency that must be met at certain levels.

At every level you go up in leadership, whatever it is you're doing, whatever industry, you're going to have to be competent in that role. So you're growing your competency. Always getting better. Improving on the excellent skills you already have. You can always get better. I'm always blown away when I talk to championship coaches and interviews, and these are folks that have won championships,

and many would say, hey, you're a legend. You're at the top of your game. They're still learning new plays, new wrinkles. How's the game changing? That's what I'm talking about on competency. You never get to a point where you can't grow your competency. Third, grow your communication. You've got to grow your communication skills.

I would say this is in the same vein of growing competency. I don't think you can ever get to a point where you go, I am just as good as I can be as a communicator. There's different wrinkles to that, right? There's public communication. You can always get better at your public presentations. There's that team communication. There's one-on-one communication that's in my family life as well as in my work life.

So three Cs that I think are at the foundation of long-term sustained growth. You got to grow your character. You've got to grow your competency. You got to grow your communication. Those are the three main C's. And I said I'd give you a bonus C. Here's the bonus C. Consistency.

You have to consistently be looking at yourself with your character, looking at your competency, looking at how you're communicating. If you're consistently growing in the areas that you outline, certainly in these three that I think are just baseline, you've got to have growth in these areas. And I think you're going to grow. beyond your wildest imagination. You can actually have a lifestyle of growth.

Now, here's why it's important that you are growing, because as a leader, your organization is only going to grow to your level of growth and those that you are developing. So it's now, it's a two-fold growth process that leaders have to be thinking about. Always me first. I've always got to grow myself first and keep growing.

But then I've got to be growing others around me. So we've got an amazing tool from our Entree leadership team that's going to help you do this. Here's why this tool is great. It's going to help you break the leadership ice, begin to create the conversation around, hey, I'm growing, I'm looking at how I can grow, and let's talk about where you can grow. This leadership growth assessment does it for you. It is 100% about helping you develop the leaders on your team. Now, specifically, this resource is going to focus on four key attributes.

there's so many great attributes of a leader. Rappore, credibility, trust, and influence are the four key attributes that we're going to focus on in this assessment. And so this assessment is going to walk your team, they're going to grade themselves, you're going to be honest, you're going to look at it, and you're going to walk through the conversation of, hey, how's your rapport, how's your credibility, how's your trust, how's your influence? Are you growing in those areas? Where do you need to grow? Strengths, weaknesses in all those areas. and this allows you to then have a conversation on the why.

Why do we do this? Why does it matter so much? And this is so easy, simple, easy creates the conversation you want to create, and it's absolutely free. Text the word leader growth. We know those are two words, but we've smashed them together. Text the word leader growth to 33444. That's 33444. Or you can download the link at our podcast page on.

on Entreeleadership.com. Our feature conversation is Patrick Bet, David. And this is what I love about this. Eric, the producer, and I found out about Patrick Beck David from one of our listeners. One of you folks tweeted us and said, hey, you need to get Patrick Bet David on the podcast. And I thought, well, hey, I love when my listeners say, this is what I want from you. You're the reason why we do this. I work for you.

I serve you. So I checked him out. I thought, man, this guy is a force of nature. He really is. And so I thought, well, let's get him. And you'll be able to tell instantly what kind of energy this guy has. Love that he's an immigrant. Love his story. And he's really winning big. And he started from scratch. And that should encourage us all. So enjoy the conversation. I promise it's going to make you better. Well, Patrick, it's a treat to have you on. I've never had the privilege of meeting you. So it's always fun to dive into a brand new conversation.

And before we get into some of the great wisdom and knowledge that you, you have distributed to your audience and now are going to give to ours. I want to know more about the story. I know you live in the Dallas area now, but as a young man, a young boy rather, you and your parents escaped war-torn Iran. And that to me is so interesting because you're this world-class entrepreneur now. And I'm just wondering, as you tell us the story, how much of that and that experience of coming from a very tough situation, another country coming to the U.S., how much of that has played into your entrepreneurial spirit? I would say a lot.

I would say a lot. I mean, I remember clearly living in Iran and, you know, from a day I was born to 10 years old and never forget one day, we were bombed. I was six or seven years old. We were bombed 167 times in a single day while I was living in Tehran. We escaped. We went to another city called Karaj, and then from there we went to Pahlavi. And then eventually six weeks after Khomeini died, we escaped Iran.

We went to Germany. I lived at a refugee camp for a couple of years. So as a Christian family living in Iran, it was a little bit different living there. Then went to the refugee camp. From there, we came to the States, lived in Glendale, California. I went to high school. I had a 1.8 GPA in high school, Ken? I'm trying to impress you here.

Yes. Wow. So from there on, you know, somehow joined the army. and went to the 1001st Air Force Air Force Air Assault, I got out, and my career got started afterwards. Well, first, let's just say thank you for your service. We appreciate that, and that is a big deal, so thank you for that. Well, thank you. And secondly, let's go back, because we know your successful.

I've already let the cat out of the bag. The folks know, if you're on here, you're successful, and I've already said you are. But I want to go back to that 1.8 GPA. You blasted through that. Why? Why 1.8? You know, that's a good question. I would tell you, if I was a student today in school, I would probably be prescribed with a ton of medication. And I'm being dead serious with you because I would see a butterfly and I would follow the butterfly.

I was a guy that couldn't focus in a classroom. I had a hard time with why I need to learn mitosis and meiosis. I didn't care much for congruent parts of congruent triangles are congruent. I did like math analysis and trigonometry and calculus. That was very intriguing to me. Anything outside of that never liked it. And Ken, matter of fact, I went to college afterwards, and I never once, I've never in my life have taken English above ESL.

Never. I've never taken English 101. It's always been ESL level. And so, but, you know, my parents got a divorce. I was right after high school, I would lift weights or play sports, and I worked at Hagen-Daz, and I didn't really care much for school. I didn't do too well with authority. I didn't do too well with anything that was going on there.

I was the kid that was on his way to live in an average life and probably getting in some trouble, not doing anything significant with his life until I joined the military. Now, did you have any signs, do you remember as you look back, any signs of entrepreneurialism in you, sometime between that transition from high school to the military? Or did it begin to come alive in you after you got out of the service? No, it was around. So when I was living in Germany, here's what happened. I'm in Germany. I'm living at the refugee camp. And one of my good friends is from the Czech Republic.

And he and his father and his sister were also trying to escape the, you know, the communistic regime. They were living over there themselves. And so Janstaff loved Super Nintendo. And it was like the thing at that time. This is 89. Oh, yeah. 1990. And I said, listen, I've got to get my hands on that thing because he had a sister named

Katarina, Czechoslovakian girl that was very beautiful at this refugee camp. And I said, look, I want to spend more time with his sister. and he wants to play Super Nintendo. So I went to the local swimming pool, and in Germany, they're famous for drinking a lot of beer. You know, they hydrate very well over there. So I went to the local swimming pool, and I talked to the owner, and I said, listen, you know, I see there's a lot of beer bottles here. What do you want to do to clean this stuff up?

He says, what do you have in mine? I said, what if I clean up every single beer bottle, how much will you give me per? And he said, I'll give you five phoenix per beer bottle. I said, perfect. So I knew that Super Nintendo was 249 marks at Kaufauphalph, which is like, the Germany version of Sears. I collected that summer 5,000 beer bottles that I turned in. He gave me 250 marks.

I went straight to Caliphalf. I bought the Super Nintendo, brought it back to the refugee camp. Jan Staft started playing with the Super Nintendo, and I got a chance to go to the park with his sister. So it was a great exchange that we had at this first opportunity of entrepreneurship. Hey, that right there, folks, is early success. I mean, you set a goal. We got to hang out with the sister.

Got to hang out there. How am I going to do that? And you did it. I love that. So before we move on to some more specific things for our audience that you've learned in business, I think this is huge. And I just want to ask you in this day and age, 2017, I mean, it's all we hear about is immigration. And it's obviously a political football.

That's not where I'm going. But I'm going to go back to a question I asked you earlier. What can we as Americans and entrepreneurs learn from someone like you and all those who are immigrants and then they become immigrants when they get here? what is it about that spirit, that step of faith that we can transfer into the same process of starting something we want to do? Well, here's what I could tell you about the whole immigration part. First of all, I come from a very confusing family. You brought up politics a little bit.

I think this will kind of lead to the question you're asking and give you a little bit more clarity. My mother's family was 100% communist. And their Bible was the communist manifesto. So I grew up in a family where my mother's side, they thought, you know, Carl Marx was just an angel. Wow. And on my father's side, my father's side, they believed in imperialism. So they thought the Shah was the greatest leader of all time.

Right. So I'm in the middle here every single night. I don't need CNN. I don't need Fox News. I just need to watch my mom and dad fight every single night. That's why they eventually got a divorce. It was pure entertainment watching these guys going out of politically. And so I grew up kind of seeing both sides.

One side, I couldn't stand rich people. I thought rich people were all greedy and all they cared about it was money and taking advantage of people. And on the other side, I thought lazy people who didn't have money were just lazy. Poor people are lazy. So eventually coming up and, you know, starting studying Milton Friedman and capitalism and getting obsessed about capitalism and how it works and all that stuff, I realized, look, when you live in a country, whether it's Iran, Venezuela, Cuba, China, whatever part it

is that you live in and you come to America, if I can give a visual, it's as if you've been in handcuffs and shackles all your life and someone takes those. too off and says go live your life. Wow. I can't describe that to you. I remember one time back in the days I used to have a radio show on KKLA and KRLLA with Dennis Prager and Hugh Hewitt and all those guys. And one time Glenn Beck invited me to lunch in Beverly Hills Hilton, my wife and I went

out there and says, what do you think is the biggest problem in America today? I said, honesty, and this is exactly what I told him. I said, I think the white man has forgotten how incredible their country is. And he invited me on Fox. I went on Fox. I went on CNN. I started talking about all this stuff with him at that time. I stopped touching politics as of seven years ago.

But look, again, sometimes when you don't know any better, you don't know what is the alternative. Right. This is one of the reasons why raising kids, one of the best things you can do to kids, is take them to the worst part of the city and just let them see what is the alternative. We got to know what's the alternative.

Sometimes the best thing we could do is go to another country for us to realize this is how it is over here. There is no capitalism. One of the benefits in America that we all have access to, As if Ken, we're living in a country, we're working for a company. So imagine if you and I work for a company and there's an Equinox gym within the building. That's a $180 month membership. But if you work at this company, they give you free Equinox membership,

but you have to go and take advantage of this benefit to be able to go to Equinox. If an employee doesn't go and sign up for the Equinox membership that is free and you don't take advantage of it, it's not Equinox's fault, it's not the company's fault, it's your fault. So the same goes with if we live in America and America offers their greatest compensation plan in America is a system called capitalism that you and everybody else has the opportunity to take advantage of someone to take advantage of it and become billionaires. Some want to take advantage of it and build an empire worth 100 million, some 10 million, some million. But if you don't even take advantage of it to make $4,000 a month as a small business on the side, it's on you that you're not taking advantage of great benefits in America. So sometimes we just really need to realize and take an inventory of how incredible. of a country we're living in America.

Yeah, and see, the immigrant comes in and they immediately, I love the analogy with the shackles coming off, the eyes are wide open and they see things that sometimes we just simply do not see. No, it's true. It's definitely true. All right, I want to ask you this. So coming out of the service, take us into your early days of getting into business, where you're now a professional entrepreneur. What did that look like? So I get out of the military. I wanted to be the next Middle Eastern Arnold Schwarzenegger.

This was my dream. I was going to win eight Mr. Olympias. I was going to be a Hollywood star. I was going to marry a Kennedy, and one day I'm going to run for governor, right? So this is, I'm 20, 21 years old. I'm inspired to do this. And then I realized it's way too much drugs and the lifestyle of a bodybuilder is not a life. I want it.

I said, nope, to bodybuilding. And I wanted to be a personal trainer. So I started working at Bali Total Fitness. Back in the days, there used to be valleys. There's no more valleys nowadays. But there used to be valleys. and I worked there when I was working at Ballets, I learned one thing very quickly. I learned that the highest paid skill in the world till today is still sales.

It is not coding, it's selling. The people who know how to sell always make the most money. Bill Gates is an incredible salesman. Steve Jobs is an incredible salesman. Our president today is an incredible salesman. And the one prior to him was an incredible salesman. Whoever makes it to the highest level of any position knows how to sell. General Mattis knows how to sell.

Everybody knows how to sell at the highest level. So when I'm working at Ballets, I realize I'm going to sell the rest of my life. Now, what I'm going to sell, that's the real question. I started looking at the product I was selling, which was gym memberships. The most I can ever make at that situation I was in was $150,000 here. In America, $150,000. There's not a lot of money. But you've got to make a half a million in America to actually be able to experience the fruits

because 50% goes to taxes, so you really only keep a quarter million of it. And 20 grand a month, your mortgage payment, seven grand a month, $13,000 left. You need to get to half a million. That was a number that I had in mind. So at Bally's, instead of selling membership, I started interviewing everybody. So everybody that would come to buy memberships, I would ask them for five minutes about their career. Hey, so, John, before I tell you about Bally Total Fitness, what is it that you do? I'm a dentist.

What does it take to become a dentist? Well, you've got to go to school for 12 years. How much does it cost around $200,000? What's an average dentist make after 10 years? Well, you can make around $150 to 200. Okay, cool. What do you do? I'm an engineer. What do you do? I sell real estate. What do you do? I literally interviewed everybody on what they do. And eventually I met a girl who was working at Morgan Stanley Dean Wooder. And she would always pick me up in a nice exotic car. And I'm like, how does this girl make all this money? She's in her 20s.

And so she told me she's an advisor. She's a broker. She manages MBA players money and all this stuff. I said, well, that's great. I want to do something with this. So I went and I applied. I had no idea what Series 7 was. Nothing. I had no clue. This girl literally showed me what to do. but she said, you need a four-year degree to get a job, and I don't have a four-year degree. So I looked at my resume, Kent, please do not laugh at this resume, but this was my resume. Let me tell you my resume what it looked like. I worked at Hagenas.

I had Burger King. I had Bob's Big Boy, and I had the military, and a little bit of experience at Ballets, and I'm trying to get a job at Morgan Stanley Dean Wooder. So I knew my resume was weak. I made a cover letter back in the days we used to fax. There wasn't monster jobs or any of this stuff. You remember the fax days.

So I said, I got 100 fax numbers from the yellow pages. And it was Morgan Stanley, Maryland, Smith Barney, Goldman Sachs, all these guys. I knew nothing about it, but I knew their financial services. So I made a cover letter. My cover letter is what got me the job. Here's what the cover letter was. I took the best joke that I had and I put it on the cover letter. And then I send it to 100 places.

Following my joke was the following line. I said, if you're laughing after reading this joke, this is exactly how my clients are going to feel when they do business with me. They're going to love me. If you want someone like this part of your team, give me an offer, help me work for your company. I send 100. I got 30 calls. 15 were just laughing on my joke.

They thought it was funny. The other 15 gave me interviews. And then finally I started working on Morgan Stanley Dean Whitter. And then after Morgan Stanley, Dean Whitter, my first day was 9, 10, a day before 9-11. And then I left Morgan Stanley. I went to Transamerica. And then we started our firm in October. of 2009 PHB agency with about 66 agents out of one office in Northridge, California.

And now we're at 3,200 licensed insurance agents in America, 49 states. We're the fastest grown financial firm in America. We went from zero to $100 million valuation in seven years. And we write more insurance with companies like AIG and Forrester's and many others than any other marketing organization in America. This is how the progression took place from me getting out of the Army to where we're at now today. Wow. So folks, now you understand.

Okay. Now everybody sat up a little bit. You know, a couple guys just fell off of a stationary bike in a gym when he gave them those numbers. So get back up on the bike. I know you're embarrassed, but get back up there. All right. So this is fantastic. So here we, this is financial services.

That kind of extreme growth. I want you to explain. Scaling. Okay. This is something that I hear a question on almost on a daily basis when we're out on the road at our live events or whatever. And this is something that a lot of entrepreneurs don't get right. When to grow, how to grow. And I think this all comes down to really understanding how to scale.

So what worked for you? What didn't work? Just share your thoughts on this idea of scaling because you certainly have done it and done it well. Yeah. So when I think about this, this is the first question everyone's got to ask. What do you think about when you think about the word entrepreneur? You know the game that people play where they say, so I'm going to ask you a question. I want an answer quickly.

Okay. Greatest basketball player of all time, Michael Jordan. Greatest baseball player of all time. Mickey Mantle or Willie Mays. Most incredible actor today, whatever name they give. I ask the question, and typically the first answer people give me, I find a problem. So if I ask anybody, what do you think about when you think about the word entrepreneur? Most people will say money, business owner, freedom, all this stuff.

To me, when I think about the word entrepreneur or I think about the word business, I think about numbers, purely numbers. See, the greatest game that became so popular that we played was Monopoly or we played chess or we'll play all these games, board games. If you look at business as purely a game that you can learn because everybody who first plays Monopoly is terrible and then you realize which ones are the best ones to own and don't waste your time buying utility or this or that and how do you negotiate. I mean, you learn, but everybody's not good at it at first. So the game of entrepreneurship is a game of math and scalability is all about math. So if you think about what we mean by scalability, you got to have certain metrics in your business. So I would take out a sheet of paper

and I would write them whatever metrics anybody has for their business, whatever it is. It could be sales. It could be calls. It could be contacts. It could be dinners you do. It could be emails you send out. Everybody has certain metrics that you count. All we did is I just looked at my business and I saw where the leak was in the marketplace. I read. I read a book called The Blue Ocean Strategy, which I'm sure you've heard of a Blue Ocean Strategy, and figure out a way to differentiate yourself from everybody else. Then I read Lean Startup, Built to Sell, all these companies. I read 1,300 business books, which is easy.

Everybody has access to them. So then I figured out what numbers matter the most in my industry. I found a leak in my industry, which was distribution. I met with AXA. AXA is one of the biggest insurance companies in the world. You've probably heard of AXA. They're based out of France. And they sat down with me, one of their top C employees.

I won't mention this name. I had a private meeting with them. and we were sitting there, this is group, there's other people there, and they're all asking about what needs to happen in the industry. And he said, in 2003, AXA sold 350,000 policies in a single year in America. Last year, we only sold 50,000 policies. They went from 350 to 50,000.

I said, why is that? He said, because initially, we focused so much on when this mortgage boom started happening, next thing we saw certain agents selling $5, $10 million policy. So we said, if we're getting an agent that's, giving us a $5 million policy, or why are we taking a quarter million dollar policy? Let's pay attention to the $5 million policy, and let's drop the guys that are only given us a quarter million dollar policy. It's taking way too much time of processing, all this stuff. We don't need to do that anymore.

Let's become the company that gets the $5 million policies. Well, that was good in 04, that was good in 05, that was good in 06. But all of a sudden, 07 in November, they realized, big mistake. 08, big mistake. Market drops 38%. Everyone started canceling all the bigger policies. But they lost all those agents. that they had given contracts in O2 that they dropped.

And so they realized the problem became distribution. In 2010, I wrote a book called The Next Perfect Storm, and it's only an insurance book. Nobody else needs to read. Like, none of your listeners need to read this book because it's about insurance. It's a very niche product. So it's not like a book you're marketing to everybody. So I wrote a book saying what I saw the challenge was in a marketplace, and I saw distribution. We focused on that.

And I went to an event in Chicago, Ritz-Crawlton, where the speaker said the two big problems in the financial marketplace is millennials. and multicultural communities. And that's what we focused on. Where the average agent became a 59-year-old white male, our average agent in our company is a 33-year-old Hispanic female. And so we added fun factor, all those things to it, and it went from there.

So let me bring back to the question of scalability. Whatever business you're running, anybody that's listening right now, say you're running real estate, you're running a tech company, you're running a social media marketing agency, you're running a liquor store, no matter what it is that you're running. What are the most important numbers for you?

So if there are 20 numbers, 20 metrics that you have, let's bring it down to three of them. What are the most important three? So if I'm running a restaurant, I would probably put one of the most important is how many people walk through my restaurant on a daily basis. How can I increase that? And how can I make that experience better for them? How can I make that thing in a way where this guy wants to come back and tell other people? What incentive can I give for this guy to come back?

Once we start paying attention to that and really breaking it down and making it a science, then you start actually experiencing scalability if you measure the right metrics that helps you scale your business. I love that. So let's go through it. So number one was how many customers I wrote walk in essentially because you said any business here. So I'm basically thinking they touch you on a daily basis.

What are those other two? So let's just pick any business. We can say real estate. Let's just do real estate. Okay. So a lot of people on real estate. So if I'm dealing with real estate, this is what I'd be measuring if I'm dealing with real estate. one, I have inbound, I have outbound, right?

So I have inbound, I have outbound contacts. A lot of older real estate agents that have been around a long time, but real estate office I go to that is dying, they're typically focused way too much on inbound calls. They're waiting people to reach out to them. Any real estate office or sales office that's killing it, they're typically killing it because they're in the outbound focus. But let's look at some of the metrics here.

One, number of real estate agents. office. That's probably a metric. Okay. Number of homes sold per real estate agent. So if I got 40 real estate agents in this office and I'm running a remax or Coldwell banker or, you know, Keller Williams, I got 40 real estate agents and we sold 103 homes last month. That means my average is 2.6 roughly per real estate agent. So then I'm going to go to another one saying the average price of a home sold. So out of those 100,000. In 103 homes we sold, the average property we sold is $260,000. Then I want to know the high and the low.

So the lowest property we sold was $89,000. It was a condo. The highest one we sold was $1.75 million. It was in the community of Brentwood and Nashville, right outside of Nashville, hypothetically, okay? So I'm going to come up with all these metrics I figure. Then I study it. Am I better off if I take my market into the bigger $1.7 million homes?

Do I want to go into the specialty and I'm going to sell the bigger homes? Or is my sweet spot the 420 number? If my sweet spot is the 420 number, I'm not recreating my philosophy there. So I'm solving for X. X is 420. Let's look at the next metrics. The next metric is a number of homes we sold. If I look at the last 24 months, I'll go quarter by quarter by quarter.

So I'll look at Q1 of 2015. You know, we sold 93 homes. Q2, we sold this, Q3. So I'm looking at all my quarters to see if there's a trend because I'm trying to study my trends of my business. Then all of a sudden I'll see a trend. The trend is spiking up or the trend is spiking down or it's flat. Why is it flat?

Why do we so well in first quarter? What month of first quarter do we do well? We do very well in February. Why do we do well in February? How did our last quarter look like in April, May, June? Why do we do so well in May? I'm studying my trends. I have to go back.

Again, it goes back to the question you ask about entrepreneurship with numbers. If I don't have numbers, I have no strength. I have no power to grow my. business. So then I look at the numbers of how many homes I'm selling. So then I look at my number of real estate agents. I realize how many of these guys are part-time and have full-time job? So I notice 80% of my real estate agents are part-time. Out of those 80% that are full-time, I have nine of them that have just simply parked their license with me, but they've not even sold total of 10 homes together the last 12 months. What do I want to do with those guys? Do I leave

them there? Maybe they're a member of the church and they're just kind of asking for a favor. let me just park my license and I'll do one house a year because my husband's connected and I'm going to do two holes. Okay, I'll keep those people there. Now, let's talk about the people that are part-timers who are actually trying. So out of my 40 agents that I have, now I got 21 that are part-timers that are actually doing things. And these 21 have sold out of that 103, these 21 have sold 31 homes. Okay. So they're averaging 1.5 home per month, hypothetically.

Then I have my 10 real estate agents who are full-timers. So do I do well if I go out there and get more real estate agents? Do I do well if I go out there and increase the value to home? Do I do well if I do training so they don't sell 2.6 home per month? What if we do 3.2 sales per month? And what do I need to do to do that? So then I'll break it down and I'll say, well, our training system is horrible. Our training's been the same for the longest time.

We're not even teaching scripts. We've got to rank our scripts better. Let's look at the scripts. And then I bring my top three producers in the office. And I say, guys, what script do you use? What do you use for this? What do you use for that? Hey, Mary, can you type what John?

Just said that was great. John, say it one more time. Mary, record it and then type it afterwards. Hey, Bob, what do you use yourself at the end? Because you get so many referrals in your average five sales a month. What do you tell the client at the end when you sell it to get more referrals? Well, here's what I say. I ask for referrals four times in my presentation.

When do you ask it? I ask it here and here and here. Mary, can you record that as well and type that at as well? okay, so I'm going deeper because I'm trying to make my training better to increase the 2.6 number of how many sales I'm making. And then with my real estate agent, I go out there and I take my top three real estate agents and I put a recognition because any sales office without a strong leaders bulletin that's being driven, it doesn't perform.

So how well of a leaders bulletin are we running? Is there enough incentives? Am I running contests? Why don't we announce an iPad contest this month? Why don't we announce a contest to win a Harley this year if you do X, Y, and if I do to math, and if somebody sells this much, the Harley is going to cost me $15,000. And my office resonates with Harleys because the average agent in my office, a 43-year-old male, and they like Harleys, they drain this in my area.

I'm going to figure what their best carrot is. And I'll add that carrot. Carrots, I typically want three types of carrots. I want monthly carrots. I want quarterly carrots. I want annual carrots, if that makes sense. I don't know if I'm making sense when I say carrots. Yes, absolutely.

Absolutely. So I want monthly, I want quarterly. I want annual carrots. Maybe I'm not running any carrots. Maybe I've become this boss that's annoying. I cashed the checks. I drive my Bentley to the office. I work four hours a day.

I'm doing so well on the golf course because I'm so cool on my country club, but I forgot I'm not even connected with my real estate agents. And two of my best guys are about to leave me to Keller Williams. If I don't pay any attention, I better get involved. So I need to reassess all of those things together. Again, this is, if I'm dealing with a sales office, measuring numbers. If you want to go to a different one, we can do that as well.

But I just kind of want to tell you, when I'm thinking about numbers, that's how deep I go with the business. Right. Well, yeah, I'm learning here. So just to recap for proper scaling, don't scale until you've got some metrics that give you the answers you really need. And then with the metrics and the numbers, you're able to get a clear picture of where you're at and you know where you want to go. And so you begin to analyze all that. And then you got in the weeds, not just in the numbers, but in the processes. You're fixing the processes. Then once that gets fixed, then you can scale up. But you've got to fix processes and make sure the numbers are trending the way you want them to before you ever start to scale. Is that what? I'm hearing? Absolutely. Absolutely. All right. So you said something earlier in the conversation that set up that last piece when you were talking to the banker, I believe it was, or the financial services guy. And you said they found some leaks. And one of the things you actually talk about on your blog and on Twitter is how to find leaks in your business. I think it's similar to what

we've been talking about. But specifically, I think is it just numbers? Is that what you're saying? If you could sit down with our audience and say, all right, to find the leaks, here's specifically you're looking for. Is that what you would say? So numbers, I'm looking at it from an outsider. So if I come right now, I want to study your business. I'm studying from the outside. All I can see is, first thing is numbers, right? Right. Now, if I get in the engine room, what do I learn? Here's what I learn. I learn about how you treat people. I learn about culture. I learn about who's really leading the office. I learn who's the voice. I learn who's the credibility. I learn who's the bad influence. I learned the person you need to fire.

I learned the relative that you have there because you feel like you're entitled to taking care of that person and you're creating an entitled program for your younger brother who's lazy and he needs to be fired and you need to set an example in front of all your employees to fire your own brother. Yes, you're going to have problems at your house, but the business stays in the books and hopefully your brother is going to get his act together instead of making it look bad. I'm going to learn that. Okay, so the numbers are from the outside looking in, but when I come in, I see the heart. heartbeat of your business. And a heartbeat of the business has a lot to do with how the leaders

running the entire company. You'll learn a lot from just watching one, two days of work at a business. You suddenly realize there's a reason why this business hasn't grown for seven quarters continuously. Or you'll say there's a reason why this guy's been killing it for the last three years. This guy is a stud. This girl's a killer. I like how detailed she is. Wow, she knows her strength because look generally a lot of times when people become entrepreneurs they think just because you're an entrepreneur you're CEO you're not that's kind of like saying to follow it so let me tell you how how confusing that is it's kind of like me and you can't let's just say we start a basketball team okay and we say hey let's go in this league and start a basketball team okay and you're seven two

hypothetically i'm just throwing numbers out there and he said pat i want to be the point guard I'm like, dude, you're not the point guard. Yeah, but I got quicks. I got some quicks for a big man. No, bro, you're not the point guard. We need the center. You need to play center. So do you see how funny that is like we're laughing at it?

Yeah, that's right. Some people start a business and they think they're the CEO. That's right. But they're great at operations, but they're great at finance, but they're great at selling. And they're not good at CEO. You know, I had my business partner, Tom Ellsworth, who he himself was part of Jamdad when they initially sold Jam Dad for $680 million. dollars to EA Sports.

He was one to seven owners. So he had a big victory there. And then he became the CEO of Go TV. And then he founded Premiere Digital Publishing and eventually sold that to a company in Nashville, one of the bigger publishing companies in Nashville, I think was the one that Michael Hyde used to be a part of. Oh, Thomas Nelson. Thomas Nelson.

Yeah. So Tom Ellsworth, you know, one day comes to me. This guy is my advisor for seven years. Okay. So this is a guy that's a very successful advising me. One day we're having a conversation together. He says something to me. He says, Pat, you know, it took me 50 years to

realize something. I said, what's that? He says, I'm not a good CEO, but I'm the most incredible CEO and president for any company. I said, how can you even say that? I said, first of all, it takes a lot of humility to say that. He says, no, I'm comfortable with that. I don't operate well as a CEO. I operate very well with a CEO that is a CEO, and I'm his number two guy. So this relationship went from a friendship to become a board of advice. Now he's the president of a company that I'm running. And he, let me tell you, I can't think of a better CEO than this guy because he found himself. So going back to the question about scalability is, are you really a CEO?

Are you really the driver of the company? Are you really the CEO? Who are you in the company? What are your strength? You know, you need to kind of have somebody assess you that knows about business and ask you questions. And very quickly, people will realize, listen, you're a very, very good systems guy, but you're not very good vision person.

Someone needs to vision. Do you want to partner with somebody bring that in? Or maybe you need to work on your vision skills. Start talking about the future. Where is this company headed towards? Sell your employees. Sell your salespeople where you're going. Sell them a vision.

Cast a vision. Give me an idea what this could turn into. Tell me what this victory could look like for me and my family. And it's a skill that can be learned, which is good. But the sooner I figured that part I would accompany, the sooner I can help that company scale their business. All right. Quick question and then another follow-up. So I'm looking for a one-word answer here.

Are you hyper-competitive, Patrick? Yes. All right. I thought so. That leads me to this. I want you to talk to our audience about the importance of, competition. And I don't just mean against outside competition, but inside competition. I think organizations that get stale, they lose this somewhere along the way. And I want you to talk about

the importance of it. How do you do it internally? So the first is obviously guys like you and I, we compete against ourselves, right? We're competing against last year, year every year. Am I growing, am I moving forward in my personal and professional goals? I mean, that's just, and our audience is full of people like that. But also the importance of, even if you got to make up, Even if a competing agency isn't truly competing with you, I just think it's so important that a company is thinking about these guys out there are beating us. I just think that's huge. Do you agree or disagree?

Oh, my gosh. I mean, like, were you in my office 15 minutes before this podcast? I was not. I just had a meeting this morning for 90 minutes with the top 10 earners of our company. And the conversation led to competition. And here's the following thing I said about competition. I said, first of all, if a person doesn't like competition, there is a limiting belief there. Let me tell you what it is that was a limiting belief there.

If a person doesn't like competition, there's typically a sibling that outdid them. They typically lost a boyfriend or girlfriend to somebody else. They typically tried to play on a sports team and they were kicked off the sports team. They typically had a very, very bad beat down when they were a kid and they still remember that one kid that beat them down and they think everybody else is that kid. There is an event. And as a person that runs a sales force, my responsibility is to find that limiting beliefs and tell them, unless you drop this limiting beliefs, nothing can change in your life because you've got to get over this. You've got to get over this.

If you can't get over this, I can't help you. And there's only one person that can help you get over this limiting beliefs, and that's you. So that's one thing. There's one thing to have a system to allow people to overcome their own limiting beliefs. And one of the things we have in our company, I've been doing this for the last 11 years. I have always had a book of the month. Always. We always do book of the month. At my home office right now, this is just support cast. Every single month, since the company started, we've done a book of the month. And every single month, everyone is required to write a report on the book of the month. And we are required to come together for two-hour meeting. And we share exactly what we got out of the book and we process it together. But we do this every single month. This is for the home office side. For the sales side, I have a book of the month for everybody on my sales side. And we've been doing this for the last 11 years. I'll actually give you a great book for competition. that we just talked about this morning.

It's called the Inner Game of Tennis. The Inner Game of Tennis. And let me tell you what's special about this book. They asked Tom Brady, where do you get your competition from? What book can you recommend? He says, one book, changed my life. It's called Inner Game of Tennis. That's quite a referral, isn't it?

That's right, right? One of the most competitive, if not the most competitive guy in the NFL, says Intergame of Tennis. So let's process competition together. Look, if we ask 100 parents who raise decent kids, let's say 100 parents who raise decent kids that these kids ended up becoming good citizens and they did well for themselves.

One became a lawyer. One's learning a business. One runs a restaurant. One is running for office. One is doing this. But they did good with their kids. Okay, so 100 parents who did good with their kids. If you and I were to ask a question and say, hey, great parents, what was one of your

secrets from not getting your kids to get introduced to drugs and, you know, promiscuity and all this other stuff? They're probably going to say, look, don't think like my kids didn't smoke weed. but the way we fixed it and at least didn't get some of them exposed to it is by positive distractions. I'm going to tell you here, one of the best things a company and a CEO can do is to create a positive distraction in their company. There are way too many negative distractions. The best positive distraction for a kid that helps them avoid anything dumb to do growing up as sports. And what makes sports specialist competition, a kid comes home, somebody beat him, he works on it over the weekend, he watches YouTube videos,

He's developing himself. He starts hitting the weights. He starts doing things. He goes back. He tackles the other guy. He's come, Dad, I got better. You know what I did? And I'm going to show this guy.

And so that positive distraction distracts them from doing anything negative. If you do not have an environment with a lot of positive distraction, there's a lot of lack time. When there's a lot of lack time, there's too many opportunities for your salespeople, your employees to do dumb things that cause them to get the morale down and your sales goes down and the company's profits go down. Right? So on the competition side, like I was saying earlier, I have three carrots monthly, quarterly, annually, and the carrot is different. Like last month we gave away, I mean, Super Bowl ended. So everybody's talking Tom Brady, Tom Brady, Tom Brady.

Last month to the number one producer last month, I gave a signed autograph jersey of Tom Brady framed. Tom is signing it in two weeks and I'm going to give it to this guy at the event I'm holding at Disney World at this hotel. And I'm going to give it to him in front of a couple thousand people. Wow. But it was Tom Brady. Prior to that, we took him to Dubai. We went to Aspen. Or we went to our next trip.

We're going to Cancun. Or we'll go to Greece, Croatia, Venice. I'm taking them next to these places. Or we'll go to Super Bowl. We'll go to a game. Or I'll take you to a local restaurant. I'll take you to, like, at our last convention, had Magic Johnson as a speaker last month. He came down.

I interviewed him. You can see the interview on YouTube. And then right afterwards, I took our top 18 guys. I rented a private jet at the end. We got on the jet. We went. We stayed at a really nice place. We went to a nice restaurants.

and we flew back, that was an experience for them. Now, here's a thing for some of the people that are listening saying, did he just say private jet, that's $60,000 to charter a jet and three hours flight from Fort War to this? Yes, I didn't start off with a jet. I started off with, believe it or not, given 100 grand bars to my employees. I started off with giving shirts.

I started off with giving things that excited people. But the key is there's got to be competition. There's got to be an incentive. And last but not least, and then I'll turn it over to you, is I said this earlier, and I can. can't stress this enough. There's got to be a leader's bulletin for everything. Can you imagine sports without a leader's bulletin? You know, when the media makes so much money during election, they make so much money because there's a leader's bulletin. It's called polls. There's a leader's

bulletin. It's called Wisconsin, Michigan, who's campaigning in Florida, who's, that competition draws us to make so much money for CNN, Fox, MSNBC, because there's a leader's bulletin. And that same exact principle can work for your business as well. Oh, it's so good. All right. Final question for you. And I know this is right down your alley. It's going to be great. We have a lot of high achievers, entrepreneurs, folks who want to become entrepreneurs. Maybe they're currently in a organization and they're dreaming and they're planning and they want to get out there and do it. I want you to encourage the heads and hearts of our listeners for those who, and I'm just feeling like there's a big swath who might be a slight bit discouraged. Maybe they're starting to get restless and

impatient, which is a natural, natural emotion for anybody that wants to go after it. I just want you to encourage them. What would you say from your head and heart to theirs? You know, so first of all, any time that we go through issues, the first thing to identify is the following is to know that you are not the only one going through that issue. Sometimes we just think we're the only ones and nobody else understands it. I guarantee you there are millions of people going through issues. And I promise you, there are millions that you wouldn't want to replace your problems with them. I remember a mentor of mine told me once, he said, every 90 days when he was building his business for the first five years, he said he read a biography every 90 days. And the biography that impacted him the most for whatever reason was Teddy Roosevelt.

You know, Teddy Roosevelt, if you read a story, he lost his wife, he lost kids. I mean, this guy had a rough life, man. I mean, some was going on with this guy. And the man upstairs was preparing him to be one of the presidents that was beloved by his country. And who knows what's going on with you? Who knows who's preparing you to become somebody? that's going to do something significant with your life. But I will tell you one thing that is going on a lot today.

I don't know if it's an epidemic yet to call it that. But there's a lot of anxiety attacks going on. There's a lot of people that are asking me questions about panic attacks and anxiety attacks and all this other stuff. I was just recently visiting two people that run one guy runs the number one restaurant in L.A., they do $15 million per year in L.A. One restaurant. There's $15 million a year. And the other one runs a transportation company.

They do $100 million per year. Each of them had different kind of areas they wanted to fix in their business. but one the guys opened up and he said, you know, some strangers happened to me in the last two years. I said, what's that? He says, I can't fly anymore. I said, what do you mean?

He said, I had a very, very bad anxiety attack on a flight. And I had to get up and walk out and I was stuck at the airport. I drove back and it was a long drive. I said, what was the issue? He says, I have no idea. There's a lot that are going through right now with anxiety, panic, and depression. And what I did is I took two years ago, I started studying those topics.

I just started reading every book that's out there on it. And one of the best answers I ever got that helped me throughout the journey of building a business that you go through having to slay many dragons throughout the process and every, you know, there's going to be crisis. Whenever you decide to run a business, there's going to be crisis. But one thing made it very simple. And here's all it was. Anytime you find yourself being depressed and down is because your mind is consumed with things that happened in your past. Anytime you see yourself having anxiety and panic attacks is because your mind is, because your mind is, living in the future too much.

You need to control your mind and bring it to the present moment and take out a sheet of paper and write down three things you can do today to make it better. And once you have that compass in your mind, anytime you go through that depression symptoms that happens, you know how to bring you back because you say, I can't control that. I'm bringing it back. I can do nothing about what happened six years ago. I'm over it. Bring you back to the present.

What can I do right now? Boom, I'm doing this right now. And boom, take activity. Or, oh my gosh, why am I so, why is my heart going? so fat. Why is my palm so sweaty? Why am I having this anxiety here right now? Because you're thinking about what's going to happen six months from now. Stop stressing about what's going to happen six months from now. The only way we're going to fix what's going to happen six months from now is what's your behavior today. What can you do today to fix it? But for the people that I've chosen to become

entrepreneurs, let me say one last thought here before I turn it over. Ken, look, I respect you like you have no idea. Let me tell you why. I respect patriots tremendously because they put their life on the line. And I respect entrepreneurs because you put your salary on the line. You see, when you become an entrepreneur, you no longer have a salary. And that's respect. That's as if your income died. I have a lot of respect for you. Some of you do this with having kids.

Some of you do this with having families. Some of you do this with financing your business with the savings out of your 401 or some other places. There's a lot of courage to do that, and I respect you. But let me tell you what's even bigger. I want to see you win big. So you've got to make sure you make your business win big so you get to experience the fruits of your labor with the people you love the most. So hang in there, keep improving, keep getting better, and good things around the corner for you. Folks, that is an exclamation point.

I hope it encourages you. I know it has encouraged us here in the studio. And Patrick, what a treat, my friend. We're going to have you back. And I'm really glad that one of our listeners said, hey, you need to get this guy on. And I got to tell you, I've enjoyed it thoroughly. I know I'm better for it. I know our audience is as well.

Thank you, sir. Well, appreciate the invite. Hey, folks, hope you enjoyed listening to Patrick. his website is PatrickbetDavid.com. He does a really nice job of giving you a nice mix of things that encourage you and equip you. So go check him out online, PatrickbetDavid.com. As promised, I told you we're going to give you some great resources on how you can grow. Infusionsoft, our great friend and partner, is giving away what I think is an amazing offer.

They're going to actually give away. You're ready for this? A 30-minute consultation with one of their small business experts. Did you hear that? I hope you didn't run off the treadmill. That's a free 30-minute consultation with one of their small business growth experts. So what are they going to talk to you about? In that 30 minutes, they want to help you with some actual tactics to convert leads into loyal customers.

Hello, that would be worth it. But there's more. They're going to help you with calls to action that you can design so that customers, Customers are going to trust you and they're going to actually win with what you are providing them. Speaking of loyal customers and a raving fan, if you do that, you get them to trust you and your product makes their life better, Katie bar the door. They're going to give you ideas and offers that are irresistible. They're going to help you come up with a strategy to maximize the dollars you get from every customer. And then new ways to put action plans in place.

and here's the best part, quicker. How about that? New action plans, quicker. Now, that's all in one 30-minute deal. I don't know how they're going to do it. I actually may sign up with a fake name because that's some good stuff. We can learn this to grow the Ontario Leadership podcast.

You get it at infusionsoft.com slash custom growth plan. Infusionsoft.com slash custom growth plan. Or you can just go to the link in this episode, Show Notes at Entreeleadership.com. Hard to believe that the summit is upon us. We've been telling you about this forever, and we have no shame in our game. It is the premier business event in the country. You will not find a better lineup.

Simon Seneca. Shark Tank's Robert Hershevec. Leadership guru John Maxwell. Coaching legend and Hall of Famer Lou Holtz. Patrick Lincione, Dave Ramsey, Chris Hogan, Christy Wright, and me, the shrimp, I get to get on stage and host the event. I don't belong in the room, but I'm glad I'm in the room. It's going to sell out.

We still have a few seats left, and we've got a special deal for you if you'd like to find out about it. Summit 17 is the phrase to text. Summit 17, if you text it to 33444, our team will get you all you need. Big thanks to Patrick Bet, David. On behalf of Eric, the producer, and engineer Will Rudder and our entire Entree leadership team, We are so grateful that you listen, and we can't wait to talk with you again very soon.