Living The Red Life - How To ACTUALLY Build A Million Dollar Business : 5 Systems & Frameworks

Episode Date: April 25, 2024

In this podcast episode, I delve into the crucial systems and frameworks necessary for scaling a business to a million-dollar enterprise and beyond. I emphasize the significance of implementing robust systems for tracking Key Performance Indicators (KPIs), recruitment processes, personnel management, financial monitoring, and marketing strategies. Drawing from personal experience and industry insights, the host provides detailed examples and practical advice for entrepreneurs aiming to optimize their business operations.Throughout the episode, I touch on the transformative power of structured systems and frameworks in fostering business growth and scalability. By meticulously outlining methodologies for tracking KPIs, streamlining recruitment processes, managing personnel performance, monitoring finances, and executing marketing strategies. With a focus on creating replicable systems like well known corporations such as McDonald's. This episode will serve as a comprehensive guide for entrepreneurs seeking to elevate their businesses to million-dollar enterprises and beyond.CHAPTERS00:00 - Preview0:57 - Introduction2:10 - The Importance of Systems and Frameworks3:07 - Key Performance Indicators (KPIs) Tracking System5:36 - Recruitment Framework: Building Your Team10:11 - People and Performance Management18:38 - Financial Systems and Monitoring21:23 - Marketing, Branding, and Social Media Strategies24:27 - The Value of Building Systems and Frameworks25:26 - Lessons from McDonald's: Scaling with SystemsConnect with Rudy Mawer:LinkedInInstagramFacebookTwitter

The five most important systems and frameworks that every company needs to be a million dollar business. I've been robbed of tens of thousands of dollars of people you know billing when they're not really working. You know we check someone after six months and it's like they're still being paid full-time when they're like doing 10 hours a week. We don't really see that as a problem now because we're really on top of it. When I started and I had 5, 10, 20 employees I was very on top of all the people. And what happens is you get to 100 people, but you're getting the amount of work done that 30 really good people that you were like holding accountable could do. But you're paying three times more. And

I fell into this trap because I assumed wrongly that if I hired managers and they were good and they were paid well, they would be maximizing the output and success and time of every person in their department and i was very mistaken to learn that's not how it works but here's a few things we do around the systems and frameworks to maximize the productivity of the team number one my name is rudy moore host of living the red life podcast and i'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. Hello and welcome to another episode of Living the Red Life. Today, we're going to talk about systems and frameworks to

build a million dollar plus business. Now, a lot of times as entrepreneurs, we're great at marketing, we're great at building a brand, we're great at networking and connections, but most entrepreneurs suck at building systems and frameworks. Now, if you don't have the privilege of hiring COO and operations managers and systems managers that build all this, today's episode is going to show you exactly what I do and exactly what you should be doing. And even if you have those COOs and operations people, I'm going to talk about really what they should be doing. Because let's face it, a lot of operational people, they know how to build the operations and systems, but they don't always think how to build the right frameworks that

actually run these systems, right? And there's a difference between being operationally driven and knowing what sort of framework to build. So today we're going to dive into this, guys. This is very important stuff because no matter what you do as an entrepreneur, eventually you're going to get limited and handicapped by your systems and frameworks in your own company. And I've seen this so many times in my own businesses and so many times in a lot of companies, especially once you get, you know, over that million dollar mark and you're trying to get to 10. And then when you go in 10 to 100, when you go in 10 to 100, a lot of the time is about the systems and the frameworks that you can maintain and keep in your business, even if new

staff come, even if you scale, even if you exit out of the business, even if new staff come, even if you scale, even if you exit out of the business, even if you move into new areas of the business, right? So let's look at it. Let's talk about it. And I'm going to go through some common systems and frameworks that work for me that I implement that could work for you too. So the first one is building a system and framework to actually track all of the KPIs in your business. OK, so KPIs in your business are so important. I do a weekly call, which I just did earlier today, where I have my sales manager, my marketing manager, my fulfillment manager, my tech manager, my media buyer or head of marketing, my project manager. And basically in that call, we go through all the key KPIs within their department, right?

But inside their department, I've built the systems, frameworks, and KPIs needed for them to report on it. So for sales reps, for example, we're going to look at sales reps, all of the sales reps in our business, right? Say we have about 20 right now. So we're going to look at those 20 sales reps and I'm going to get presented in 10 minutes on a Wednesday, every ink around their close rate, their revenue per call, their show rate, how many calls they did, how much follow-up they did. And then I'm going to go by each rep. I'm going to go by each offer. I'm going to go by each brand. Okay. That's sales. Then we move into all the other departments, customer service, fulfillment, marketing, Facebook,

or media buying, ads, social media, even recruitment's on there. We're talking about recruitment. So every person or manager in my business has a KPI call. So one of the systems and frameworks you guys need in your business is exactly that. It's how do I track all the key KPIs, right? How do I track all the key data points that I need in my business to be successful? Because if you're not tracking those things, you have no chance of actually being successful if you're just like kind of guessing your way to success. So build out some key KPIs for each department right now. You guys might not have, you know, 15 departments like I do, but most of you probably have two or three or four, right? So you should have key KPIs,

and this might be you running all of them. You might not have managers for each of them right now. That's also okay. But you guys should all have a key KPI for sales. You should have a key KPI for marketing. You should have a key KPI for maybe social media. You should have a key KPI for ads. And every week, you should run all that data, and you should review all that data. And if you don't have a big

team, like I said, have a VA that you pay a few hundred dollars a week or a month presenting all that data for you, because then at least you can take a bird's eye view. So next key framework or system that every good business has and every big business needs is recruitment. The people in your business are going to make up a massive part of your success. If you have great people, you can build a great business. If you have bad people, you'll never build a great business. You will be like most entrepreneurs that are hustlers, make a few million but can't turn it into tens of millions because they don't have the people behind them. Okay, I see this so much. So very, very, very important that you have a good system and framework for recruitment. Okay. And this might look something like if we go through A to Z, where am I finding people firstly,

and where are they applying? So I'm going to have LinkedIn ads running. I'm going to be on Indeed. I'm going to be on Upwork and I'm going to be in Facebook groups, right? Four of the best ways to recruit people. And then I'm going to have a solid system, okay, that I've built to take those people through an interview process, right? And when I started an interview process, look, something like get on a cool chat with them and, you know, make a decision, which is fine to start, but it can be better than that. Right. So it might be, you know, I'll give you my example. We do an initial. Well, firstly, they apply and they answer five key questions on non-negotiables. Right. Pay range in office or not in office, full time, part time, years of experience, that sort of thing.

Then they go to a 15-minute video interview with a recruitment assistant, okay? And she will do up to 20 of these a day. And each one of them is graded on about five to 10 questions that we've already pre-built. So we have a specific questions for each job role. And we'll obviously try and trick people on some of those questions. So some of them are tough questions and then she grades their answers. OK. After that, anyone that gets a good grade over, I think it's a six or seven out of 10 and it's all calculated in a spreadsheet, goes into what we call a trophy category, right, or a winning category. And then those people get sent to management and myself,

and we have five or six bullet points on why they were good, the pay range, start date, the video recording for the 15 minutes, and their resume. Okay. Once we see that, the manager then reviews the 15 minute call, because that saves them time having to, you know, get on a new call maybe. So they review the call. If they like them, then they set up a second interview. Okay. And then finally, once that second interview has happened, it comes to me to make final decision. So that is a very, what I would say, a pretty in-depth and good recruitment process. Okay. And we do have some video interviews with AI that we're starting to use too, but

ensure that's a good video, a good recruitment process that you guys should all model. Now, again, you might not have a big team, so it might go, maybe they do a video interview first, no staff member, and you ask them five questions, you watch it, and then you interview them if they're good. Okay. Because you're going to save 50% of your time, at least just through the video interviews. It's going to filter out people and you're going to be able to watch it. And within two minutes, know if this person's good or not. Okay. Another simple one you can use as a framework is Google forms. So you might send everyone to a Google form where they answer 10 questions before they get on a phone call with you. And then you can just ask

them specific questions. How many years have you edited videos? Send me example videos. What software do you use? What makes a good 60 second viral Instagram reel, right? So you can ask some key questions that save you hours of interviewing because you can figure out pretty quickly if someone's good or not. So the second and very important part of your business is that recruitment process. And it doesn't have to be as robust as mine. But what I suggest you do is go through and just make a one page process, like a one page master sort of SOP or framework on how you're going to do the recruitment in your business. And so by now, if you follow this, you should have

a kind of SOP or process or system for KPIs. What are the key KPIs I'm going to measure by department and what within each department, what are those KPIs? I'm going to do it weekly and monthly. I'm going to hire an assistant part-time to do it. Okay. That's number one. Number two, recruitment. This is the system I'm going to use to recruit. This is, I'm going to build it out, spend some time and boom, now it's done and you can set and forget it for the next couple of years of your life. Okay. The third one that's very important is people and performance. So we have a weekly call with management on people and performance and we have a lot of,

I would say, pretty in-depth systems to monitor people and performance. People and performance is very important because what I've learned and I had to build these systems. When I started and I had 5, 10, 20 employees, I was very on top of all the people in those roles, right? Like how much are they working, their hours, their invoices, their productivity? Are they adding value or not? And then when I got to 100 employees, you see a massive drop off in the ROI by person. Because what happens is when you're at 10 people, you're kind of working with everyone and monitoring everyone. And you've probably got them on hourly and you're checking what they're doing, or you should be at least.

And you're very protective over it, right? But then what happens is, is as you then grow the company to say 100 people like I did, your managers are so busy just doing their job, they don't really care about the, you know, most of them, some of them that are really good do, most of them, unless you push them, won't care about ROI versus payroll, they won't think about optimizing their time and pushing them off. And what happens is you get to 100 people, but you're getting the amount of work done that 30 really good people that you were holding accountable could do, but you're paying three times more. And that's very frustrating and very bad economically. And I fell into this trap because I assumed wrongly

that if I hired managers and they were good and they were paid well and they had experience, they would be maximizing the output and success and time of every person in their department. And I was very mistaken to learn that's not how it works. And a lot of the time they don't think like an entrepreneur would think or a business owner trying to maximize every second, every penny and every opportunity. So you have to build a system and a framework to actually make sure that's happening. OK, and it doesn't have to be crazy because, you know, again, if you've got a good manager, once you give them some of the tools and expectations, they should run with this pretty well. But here's a few things we do around the systems and frameworks to maximize the productivity of the team. Number one, every team member generally has a team meeting with their manager nearly every day,

a huddle, right, or a general meeting. That sets the expectations for the day, what they're all working on, and make sure there's clarity on what they should be doing. Number two, they do an end of day report. So all of my staff, pretty much in my entire business, do an end of day report. The reports are a little different between sales, marketing, fulfillment, but pretty much everyone in my business has an end of day report where we're looking at what have they done in a day? And the manager's job is to check that end of day report, make sure they're maximizing their time. And occasionally like I'll spot check it and ask questions.

Okay, number three, clear tasks and daily expectations on what they should be doing. So number three is really important is like, what most employees don't understand is they'll be kind of busy and they'll often think that they're productive. And it's really interesting when we do like surveys and like quarterly reviews, you know, some staff members will be like, yeah, I'm a rock star, super work, super hard, high, you know, do a bunch of cool stuff, high ROI. And then the leadership team are like ready to fire this person. It's like they don't do anything in the company.

And most of the time, you know, sometimes the employee just sucks. But most of the time, this is a misalignment of expectations and poor management from the manager where they're doing a bunch of stuff that they think is good. Really, we as a company want them to do something else. They may be taking way too long on the things they are doing, not doing half the important things we want them to do. And the managers never really made that clear and held them accountable to it so what we do to avoid that is pretty much every staff member and manager has like a roles and responsibilities chart right and it's like a table kind of where each person will have 20 or 30 things

that they're supposed to be doing, right? And some of them will be monthly things, weekly things, daily things. So obviously not all 20 are daily, but there might be like 10 daily things they're supposed to be doing, right? Attending the daily meeting, doing the end of day report, putting videos in the Google Drive, editing at least one reel a day, spending 20 minutes coming up with new ideas, right? So you can kind of build this agenda out for the people in your business. And again, if you have tons of employees, you're not going to do all of them. What you should do is do that for the manager, and then the manager should be doing it for their team. But this kind of list

of daily responsibilities or expectations is really useful. And what we've actually started to do now is for a lot of the employees that just kind of do the same thing over and over again is it's in their calendar. Right. So it's like 20 minutes on this, 30 minutes on this, 20 minutes on this, 30 minutes on this. So they know throughout the day exactly what they should be doing. And they have a checklist basically to sign off on it. And pretty much every big company in the world kind of does this. If you think about workers, right? Like if you work at Target or Walmart or CVS,

you get monitored on how fast you run people through the checkout and how many customers or scans you do per hour, right? So in every big company, there has to be a way to kind of monitor the productivity and performance of their staff. So we create this kind of list. So it's a great way to kind of monitor what the staff should be doing. OK, so there's three ways that you can really monitor and really build out good performance metrics and a good system for each employee. Another thing that's important too is just tracking time. Okay. So if you have freelancers or contractors or remote staff, we use a time

tracker where it records their screen and they also do an end of day report. And then we cross check it to invoices because I, you know, I've been robbed of tens of thousands of dollars of people, you know, billing when they're not really working, login time. So we don't really do any of that anymore. Now it's all tracked and monitored and touch wood. We don't really see that as a problem now because we're really on top of it.

But in the past, when we weren't on top of it, we'd check someone after six months and it's like, they're still being paid full time salary, like a retainer when they're like doing 10 hours a week and no one really knew because there's always a disconnect between a manager again and maybe like the finance department and I've also had a ton of clients even new clients that have new businesses you know sub-10 staff members and they go and hire contractors and then complain to me really really, this person robbed me of two grand. They hardly did anything. So no matter if you're big or small, you can get taken advantage of. And most people, you know, most people, even the freelancers, they're just, you

know, in their head, they're just doing random work and bits and pieces. They're not in their head like stealing from you, even though you see it that way. So honestly, you have to just control it. If you don't control it, then it's kind of on you and you're probably going to get taken advantage of. So do your best to really control the situation and see how you can really control what everyone's doing, almost to a point of micromanaging. Because if you look at every big company in the world, generally most employees, not executives or senior management or managers, but employees, just normal employees, are pretty in a rigid schedule, right? If you work at Walmart, you just do these four things. If you work in McDonald's, you do this part of McDonald's. If you work in this, you do this, you know? So that's just kind of the way it is that's the sad reality of life and having employees but

that's how you structure it for scalable success where you're going to be able to create a repetitive system and people know exactly what they're doing and a lot of you know as an entrepreneur we'd hate that idea but there's a lot of most employees actually like that where they just know hey these are the seven things i'm going to do and i'm going to do them every day and eventually some of them will get better and innovative and want to progress and grow, but most won't. Most will be happy just on that hamster wheel. So that's how you really build the people and performance side of your business. Next is finance. So we've talked about KPIs, we've talked about recruitment. We've talked about people and performance.

Next is finance. So with finance, there's a lot of ways to do it. And I'm far from a finance expert, right? Here's how I do it. So firstly, I get a message every morning at 8 a.m., which shows the account balances of all my accounts. OK, because I like to I think it's very important to be on top of your money and staying top of mind. Next, we have Because I like to, I think it's very important to be on top of your money and it's staying top of mind. Next, we have another Slack channel which show daily sales and every sale that comes in, it goes into the Slack channel, okay?

Next, after the Slack channel, we have a daily report sent on all of our expenses and all of our income, okay? And then on top of that, every month, every transaction is categorized in a spreadsheet and it shows where all the money went. And then the finance team, two weeks after the end of the month, close out the month and do a more corporate-y kind of P&L.

Right. So that's generally how we're tracking all of our expenses. We're able to see W2 costs, we're able to see 1099 staff, how it's being earned, tracking it every day. And every day in the morning, I see total money in the accounts. I see new revenue. I see sales month to date. So we're really kind of on top of our numbers all the way from big picture finance all the way down to like smaller KPIs within a department. So I really, really recommend you build a good system for finance. It's probably one of most entrepreneurs' biggest weaknesses. It was mine for many years. I'd say now we're finally kind of on top of it. Is it perfect? No. We have a part-time kind of CFO and a finance team and head of finance and like a finance assistant and, you know, someone that does all the bookkeeping. So we have a decently sized team now. But as a solo entrepreneur, the best thing you can do, in my opinion, is have a VA like, you know, as you've probably seen, a VA can do a lot of these small things.

Have a VA make a simple spreadsheet that's updated daily that you can track and follow. I wouldn't rely on like QuickBooks and P&Ls because they're more for tax returns and corporate-y things. I always like to have like the corporate-y tax return stuff. And then I like what I call entrepreneurs finances, where we can actually make decisions and see stuff. Okay. So that's the fourth one, finances. Okay. Now, if you put all of these together, you have a really good system to monitor all your KPIs, to find new people, to make sure those people are performing. And then you have a great system, um, to track all your finances, right? And the fifth and final one I'm going to talk about is marketing and branding and socials,

because that's obviously a driver of your business. You need good marketing, branding and social media. If you ever want to be, you know, successful online, you can't afford to skip these things. So a great kind of starting framework for social media is I don't like to do content calendars. I like to do more post types. Right. So I have this flow chart of all the different types of posts I want on my social media. And then we create content weekly around all of that content and then we post it. Okay. Now for marketing and advertising, we have another framework for launching new offers, testing new offers, and then what we call ad refreshes, right? Where we're doing new

refreshes and new split tests every single week. So we've built this framework for launching offers, testing offers. We've built this framework for creating social media content. We have a framework for this podcast, right? If you're listening to this right now, it's also being videotaped, right? And then this content will get splintered out into an Instagram post or a couple, as well as obviously being published and it will get emailed. So we have a mini system and a framework for how to splinter podcast content

and what to do with it, okay? So pretty much everything in our business, and again, it's far from perfect, but I would say it's better than most, is really kind of starting to be built out in frameworks. And one of the biggest things I wish I had taught myself like five years ago as a business owner, because I used to just do everything and just like figure it out and get it done. But now I'm like, I do everything, get it done. But in the process, I build a framework to hand off and an SOP and a system to hand off. OK, so it's just like a bit of a change in your thinking as an entrepreneur

and an owner. Right now, a lot of what you're going to right now, a lot of what you're doing, you're not going to do long term, but you're doing it because you have to or someone can't do it. And what I've learned is just hiring a staff member and expecting them to do it generally doesn't work. Especially if you are good at that thing, right? If you're terrible at that thing, then they're probably an expert and can do it for you. But if you're good at that thing and you're just trying to delegate to them, you actually have to build the system and the framework and then have them follow it. So it's very important to kind of build and then log it and kind of build a system and framework behind you, hand it over and monitor it.

And then that's just the repetitive cycle you're going to go on to build your company to, you know, whatever, 5 million, 10 million, 20 million, 100 million, a billion. And if you look at every company, McDonald's, all these companies, that's exactly how they started. If you watch the McDonald's movie, right, where they remade kind of the starting movie of McDonald's, I think it's called Founders, you see them on a tennis court, redesigning a system and a framework to serve food, okay? And that allowed them to totally change McDonald's to serve way more customers, to really be the creator of fast food burgers. And then because they had this rigid system, it allowed them to then go and create another McDonald's and another McDonald's and another

McDonald's because they have the same ingredients, the same menu, the same burgers. The staff do the exact same thing. The pricing is the same. It's a machine. So the more you can start thinking about machines and how you run your business and build it, the quicker it will grow, the more efficient it will grow, the less stressful it will grow and the less errors you'll have. And this allows you to keep doing more and more things

or in other words, opening more McDonald's around the world. OK, and then hopefully we can all be a big brand like McDonald's. So there you have it. This is how to build the right systems and frameworks and the five most important systems and frameworks that every company needs to be a million dollar business. I hope you enjoyed today's session and I'll see you guys very soon. Until then, keep living the red light. Take care.