Next Level Pros - #108: This 5 Year Growth Strategy Will Transform Your Business

Episode Date: June 14, 2024

Welcome to a new episode of The Founder Podcast. Today, we break down the secrets behind my 5-year growth strategy. Discover how I turned my garage startup into a $233 million enterprise without borrowing a dime. Learn the essential steps to create a clear roadmap for your business, scale your sales and operations, and build an efficient organizational structure. https://nextlevelhomepros.com/june25thworkshop Highlights: "Most people overestimate what they can do in one to two years and vastly underestimate what they can do in five years." "You are losing millions of dollars because you do not have a clear strategy or plan." "Building great relationships gives you great opportunities." Timestamps: 00:00 - Introduction to the 5-Year Growth Strategy 02:00 - The Garage Startup to Million-Dollar Success 03:45 - The Perfect Timeframe: Five Years 05:30 - Building the Accountability Chart 08:15 - Scaling Your Sales Organization 12:00 - The Law of Management 15:30 - Fulfillment and Operations Planning 18:00 - Back Office Essentials 19:30 - Creating a Vision Map 20:15 - Assigning Hats and Responsibilities Looking to scale your business? Want to learn directly from the same team that helped me sell my last business for 9 figures? Click this link below to check out how you can work with us. https://nextlevelhomepros.com/grow-home-service-vsl Join my community - Founder Acceleration ⁠https://www.founderacceleration.com ⁠ Apply for our next Mastermind:h⁠ttps://www.thefoundermastermind.com⁠ Golf with Chris h⁠ttps://www.golfwithchris.com⁠ Watch my latest Podcast Apple- ⁠https://podcasts.apple.com/us/podcast/the-founder-podcast/id1687030281S⁠ Spotify- ⁠https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2⁠ YouTube - @thefounderspodcast

You are losing millions of dollars because you do not have a clear strategy or plan. Don't believe me? Let me change your mind. When I started my business out of my garage in 2017, few people thought it would be a huge success. But then we went from making $16 million in 2018 to $233 million in 2022. And we did it without borrowing any money. How did we do it? We used my five-year growth strategy. In this episode, we will show you how to use the five-year growth strategy for any business or any idea. This strategy will transform your business, giving you and your team a clear path to success. Not using this is keeping your business small. All this and more on this episode of the Founder Podcast. Now understanding what you

want out of your business, we're going to start getting even more granular with talking about our five-year plan. The five-year plan is the perfect timeframe in which you can go and accomplish great things. Most people overestimate what they can do in one to two years and vastly underestimate what they can do in five years.

Let me give you an idea. I built my business out of my garage and by year five, we were doing $233 million, right? That is way bigger than I could even ever comprehend it out of my garage. And I thought really big. In fact, when I was building my business up front, I thought within five years, I'm going to be able to produce a 500 person organization. Fact was, we were right around 1000 people by the time that we had actually achieved five years. So what you want to do is say, okay, if I want cash flow, if that is the ultimate goal with this business, now, how does that look in a five-year model? How many sales reps do I have? How many operations people do I have? How many crews have I created? How many locations does

this look like? This is going to require a little bit of effort on your part. But the way this is going to tie in is what we call the accountability chart or what some other people refer to as the organizational chart. This is a vital part of your business that is imperative to be able to build and properly plan. So the way you want to look at this is if my goal is to get to $100 million in revenue in five years, we're going to use that number because this is a number that is possible, believe it or not. No matter where you're at, $100 million is attainable in five years. You're going to ask yourself, okay, $100 million, what does that look like organizationally?

And then you're going to dive in and you're going to start building. And we're going to jump over here to the iPad and start talking about it. So once you look at your five-year plan, so we're going to draw out five years here, you're going to start looking at it and you say, okay, if I have $100 million in revenue that I want to go and generate, I need to understand what is possible from an average salesperson within my organization. We're going to talk more about offer, which is leads and sales and everything else, but it is imperative to be able to scale. You have to have an internal sales organization. It can't just be referrals that you get from the local contractor or the insurance company or whatever it may be.

That's part of it. But we need to talk about actually scaling out your sales organization. Now, you have to look at it and say, okay, what is possible from one person? And you can either identify this possibility from your competition, what you've been able to achieve. And what I, what I understand is like, depending on the industry,

let's just say a million dollars a year is what the average salesperson can go out and produce. Okay. A million dollars in revenue. So if I want to do a hundred million dollars in revenue, this is for a rep. This would mean that I need a hundred reps in order to be able to achieve a hundred million dollars a year. This is on average. Some reps are going to do two million, others are going to do a half a million. But once we have 100 reps, then we're going to use what's called the law of management. The law of management states no one person should manage more than three

to eight people. And why is there a range? So this really depends on where you're at in the org chart. And so the higher you're up in the org chart, whether you're a VP or a C-level executive or however you choose to structure your business, you're going to actually manage less and less people. So your top tier talent should be managing anywhere from three to max five. On your lower tiers, which would be like your sales reps or your technicians, whoever's out in the field, one manager can manage upwards of eight people. Anytime you go above that, they're going to be bogged down, they're going to be stretched thin, and they are going to be feeling the stress. You probably feel this already because you're probably managing the way that

you've created your structure more than eight people. And so this is the law of management. You have to stay within the structure. And so if I use the law of management and I say we're gonna max it out at eight reps, that means if I have 100 reps and eight reps are going to be producing, or eight teams, eight men in each team, this means I would have 12 1⁄2 teams

or we're going to have 13 teams because we know that eight divides into 100, 12 and a half times. So we're going to round it up to 13 teams. What does that mean? That means I'm going to have 13 managers. And these are going to be your team leads, your sales leaders. A lot of times these are going to be guys that are actually going to be out producing as well. So typically the way I would structure in this type of organization is I would have 13 team leads that have seven people that they're managing.

And if you have a total of eight per team, you're going to get that. It's going to be 104 total sales reps, which means that you can produce 104 million. Now, we're going to talk about how you're going to create enough leads to get to that point, but that's not the goal today. The goal today is to think big and understand what is my roadmap and the way that I'm going to build out this organization. And so with those 13 managers, you're going to then have a regional or a director, kind of depending on how you want to set up this organization. But if I have 13 managers, I'm going to break that down into I'm probably not going to manage anywhere more than four to five guys. So with that, I'm going to have three regionals.

So we'll say if this is like an inside sales organization, you decide to build this whole all out with inside sales, you would have three regionals, and then you would have one director. This all follows in the law of management, because your three regionals would be managing anywhere from four to five of the team managers and one director would be managing three regionals as you can see the further as you get up in the org chart this is going to you're going to have less and less people and so kind of showing exactly how that would look in the org, you would have some structure like this. This would be your director. These would be your regionals. And each of those regionals would have four to five managers, right?

And then under each one of those would be seven sales reps. So across the board. So that's kind of what your organizational chart will look like. Hey guys, I just wanted to jump in here and invite you personally to a one-day workshop where we are going to be covering this exact strategy. We are going to be working with 25 entrepreneurs on building out their five-year roadmaps for their businesses. This includes creating the positions, the roles,

goals, responsibilities, and creating an exact roadmap on how you're going to be able to attract the right type of talent into your organization. You won't want to miss this. It's a one-day event on the 25th of June right here in Pasco, Washington. You will work directly with me and my team, hands-on, side-by-side, shoulder-to-shoulder, sharing good food and great results as we build out this incredible strategy for you. We are limited to only 25 seats, so click on the link below to grab the exact details and reserve your seat today. Now, once you have that built out, you have to build out the rest of your organization. And as I am sharing with you,

this is not an easy task. I have to go through and say, okay, exactly what is this going to look like across the board? So if I have my crews, and depending on what industry you're in, sometimes crews are one-man teams, and sometimes they are four-man teams. Like, for example, in the solar industry, which I have a lot of experience in, we typically run a four-man crew. Some of you guys in the HVAC world are going to run a one- to two-man crew, or a plumber, you're going to run a one-man crew, whatever it may be. And then what you're going to do is you're going to build out what it would take to fulfill $100 million worth of revenue. And so I'll give you an example. Say

your average ticket is 5K. Okay. Once you have 5K, I'm going to pull out my calculator. I'm going to say, okay, $100 million. And I'm going to divide that by 5,000, and that's going to be 20,000 jobs that I have to accomplish. Now, depending on what industry you're in, let's say you can accomplish three jobs a day from your average plumber, or maybe one install a day with a crew of five, but your ticket's going to be much higher. But let's just say you can accomplish three a day with a crew of five, but your ticket hire your your tickets going to be much higher. But let's, let's just say you can accomplish three a day, you would divide that by three. And then you're going to get 6666 man days, okay. And then we divide that by that means I'm going to need 26 people so are 27 people so if I have 27 people let's make sure this math maths out so doing $15,000 a day because it's three jobs a day and you times that by 250 days, you're doing $101 million.

And so whatever it is, like this is not going to be the exact math for your industry, but you have to understand what are my crews capable of. Fact is, most crews can create more efficiency. You've seen the single man crews or the two man crews that have gone and crushed it. You can't necessarily put the bar there, but it's got to be somewhere in the middle where you know that you can get people up to and train. And you got to think bigger. You got to think if I had good efficient processes, a great training platform, what is possible with these people? And so this particular instance, if I can produce $15,000 worth of installed or revenue jobs per person, per individual, I would only need 27.

Now, if I could produce $15,000 a day with four people, like say it's a crew of four, then I'm going to multiply that 27 by four. And I would know that I'm going to need a hundred and what is that? A hundred and 20, a hundred, a hundred and eight people to be able to go and accomplish that. But that would still be 27 crews to be able to go accomplish the hundred million dollars a year. And then you're going to back into that the same way that we did with the, with the sales rep.

If I have 27 crews and you're going to have one person managing eight people and say there's four people in each of those crews, okay? So that means you're going to have a foreman for every two people or every two crews. And so in this particular situation, you're going to have 13 foremen to be able to go do it. And maybe in your particular industry, they can manage three different crews, and that's no problem. We'll put that in, and you would only need nine foremen to be able to accomplish that.

And from the nine foremen, you would want this broken down into like different branch managers or whatever it may be. And so this obviously depends on location and how many different things. And we're going to talk a lot about that and building out your ops and being able to scale the different things within, with per location and whatnot. But what I need you to do is start thinking bigger. So now you're talking. You have your sales side.

You have your operations side, your fulfillment. Now you need to think about back office. You need to think about finance. You need to think about marketing. You need to think about HR. There's all these different things that you have to go through. And so just to give you some some ideas on what you want to think about. Typically, the rule for HR is you want to have one

HR person for every 150 people within your organization. And so if your map looks like 300 people, then you need to have two HR people, probably a director of HR and then an HR specialist. And then as you build up, you want to have different people within your finance department. One of the most key hires that you can make as you grow within this organization, initially, it's going to be a bookkeeper. Later, it's going to be a controller. And then after the controller is going to be a CFO. Once you have a CFO, you're going to have FPNA, which you're going to be able to create proper structure within the organization, proper forecasting for goals. This type of person, your CFO is going to work hand in hand with you. Now, I know it's probably hard to imagine

even having that based on what size you are or whatever it may be. But understand, if you go and you execute this over the next five years, you will get to a point where you have to have this type of CFO person. One of the most important things that you can have in any type of organization is clean books. That's why having a good bookkeeper up front, you know, initially you can outsource it, but I recommend the fastest you can build this out to being having a bookkeeper in house that is going to be taking care of all your expenses, making sure that everything is booked properly, both your revenues and your expenses. The faster you're going to be able to do analytics and know exactly what you need to change within the business because ultimately you as the ceo you as the founder are going to be diving in

and understanding the key performance indicators within the financials and you'll know exactly little things to tweak. And I know this sounds really complex and everything right now, but start thinking about this as far as how can I build out this organization? It doesn't need to be perfect right now. And so wherever you're fretting, all I need you to start thinking is creating a vision, writing it down, asking myself, what is possible? Where can I get? Think bigger. Think greater.

There's so much power in creating a vision map for the organization, which is what I like with my org charts and my accountability charts. And so once you have this map, once you built it out as far as you possibly think you can within five years, then the next thing you're going to do is you're going to map out where am I at today? This is the reality check. This is where it's like, oh man, I am so far from this five-year plan that it isn't even funny. Maybe it looks like you, I'm going to go back here to the drawing board, and then everybody in your organization reports up to you. And that's fine. It's not fine long-term. It's fine for now.

What that means is you got some work to do. You have some improvement to make. And that's the whole reason why you're taking this course. So don't fret. Don't think, oh crap, I'm never going to get there. What you want to do is once you have, and you can see exactly what yours looks like, you say, how does this fit into my long-term goals? And where does everybody fit in on this five-year map? And then what you're going to do is you're going to assign 10 to 50 hats per individual. Some people that are lower level workers that just came on, maybe they're only going to manage one to two hats. Maybe initially

they're the sales rep and the sales manager because you haven't built it out. Or maybe your HR person also handles finance or whatever it may be. But you need to properly document that within your accountability chart. And then what we're going to do, we're going to drop down in some later courses. We're going to talk more about accountability chart, how you properly build this out with roles, responsibilities, KPIs, and SOPs. That's going to be a whole nother level of all the different types of things. But what you want to do right now is say, how does this org fit into my five-year plan? And what hats on my five-year plan can I put on different people? So I use the founder,

maybe you're going to be over sales, maybe you're going to be over marketing. And then as you get bogged down, the beauty of this is it creates the roadmap. So as you get bogged down and you know, you're getting stretched thin. Now, you know where you're going to hire and what hats you're going to now push off to this new hire. And you're going to know exactly what to train them up to because it's not just, hey, come work for me and let's figure this out. It's like, I need you to come in and run my marketing. And so then that person takes on the hat of marketing, and maybe it's the director of marketing,

and maybe they are the paid ad specialist, and maybe they are the copywriter and everything else, right? They're all in one, all these different hats of what potentially could exist at one day, they're going to be wearing. There's a lot of resources online if you need additional help. You know, Google is always great as far as like what potential positions can fit within this department of my organization. The way I like to structure my organizations are, when I'm thinking about five-year plan, is one, what we call business units. So a business unit is going to be your sales and marketing under one,

your operations under another, and your finance under another. You can ultimately split sales and marketing, So those are two separate business units. So within your business units, you're going to have your departments. And this is going to be focused like, for example, in your marketing, you're going to have organic marketing, and then you're gonna have paid marketing okay and so you then you have like a director or a VP of paid marketing or organic marketing and then you're going to build that down into variety of different teams and then and then so on and so forth all the way down so if you have any questions make sure that you work with your your customer success rep or, sorry, with your success rep that's been assigned to you. They are going to be able to help you as you build out this five-year plan.

This is one of the most important things that you can do as a business owner that is going to drastically impact the long-term duration of your business.