Episode Transcript
[00:00:00] Speaker A: Hello, I'm Jeremy Rivera, your unscripted small business podcast host. I'm here with Matthew Pol.
His Real Wild group has been kind of doing some new stuff for small business owners. I'm curious what you've been working on and where it comes from.
Give us a taste of your experience and what you're bringing to the table.
[00:00:22] Speaker B: Yeah. Jeremy, thank you for having me as a guest.
The Rewild Group, we're based in Denver, Colorado. And, um, really the background starts before the company was founded, when I was 10 years into business, well, 12 years into a business ownership. So my.
My wife, who's my business partner, we had founded and operated this business for 12 years. We had it valued at that point, and, you know, the valuation was near, not nearly what we had hoped for after, you know, 12 years of hard work. And so really sent us on a journey to figure out why the business, which had been kind of stuck for about a decade, why it didn't have greater value and how to fix that. So that was kind of the first, you know, step into the direction of understanding that businesses go through these different stages of growth. And that's when I found this. This inventor, this researcher that had done the research to identify this roadmap. And then I used this roadmap for three years. In those three years, our business tripled. After being stuck for a decade, it tripled in revenue. We went from about eight employees to 40, and we ended up selling that business for much more than it had been valued at year 12.
So that was really the, I would say, the catalyst in my journey.
[00:01:55] Speaker A: I like it. I want to learn a little bit more about these phases that you're talking about for these businesses.
[00:02:02] Speaker B: Yeah. So one of the unique features of this research and this roadmap was that the stages of growth were defined very specifically, and these stages really represent different levels of complexity within the organization.
And what the researcher found is that it's not the age of the business, it's not the revenue generated by the business, but it's rather the number of people in the business that really are the highest correlation to this. This level of complexity.
So essentially, what the roadmap does is it. It provides you a range of employees that define a stage. So if you have one to 10 employees, you're in stage one.
If you have 11 to 19, you're in stage two.
Stage three is from 20 to 34 employees, and it continues to go up until you hit stage seven, and it goes up to 350 employees.
So the nice thing about it is it's very easy to see where a business is and why that's so important is that it's really this level of complexity that drives how that business needs to be operated.
And kind of the core kind of discovery out of this is that businesses get stuck primarily because they are dealing with stage specific challenges and they're trying to use an old rule book, you know, how they did it in a prior stage to be successful in the current stage. And the reality is it doesn't work that way.
[00:03:44] Speaker A: I do have a cross current, a kind of a challenge to float out to you. And it's kind of come up with a few of my small business interviews, but also with some of the SEO interviews where the founder or the owner is looking for to establish a lifestyle, lifestyle type of business and their focus is not necessarily on growth.
Does the knowledge of what's contained in that phase still help even if you're intentionally not scaling up? You know, I know Timothy Jackson at Mercy's Sake. He wants to keep his team, you know, fairly small. You know, wants to be comfortable and provide a lot of benefits, but not grow his agency to take on a bunch of whales, but to kind of do a specific thing for specific group of people.
[00:04:37] Speaker B: Yeah, no, that's a great question that we get quite frequently. You know, many business owners have no desire to have 100 employees, 350 employees. Right. That just seems overwhelming. And you know, that's, that's totally the owner's choice.
So the roadmap still helps you operate. Essentially, it's, it's, it's a best practices for how to be healthy in a given stage.
And what happens is when you're healthy in that stage, your business is more resilient. So when the market changes, you're not out of business and it helps you be more profitable. So with those two characteristics, it's actually more enjoyable business to own. Whether you want it just to be a lifestyle business where it kind of reaches kind of a level and it kind of stays at that, or if you wanted to have at least some moderate growth over years, you're okay with that, that works as well. And finally, if you want to be more aggressive and grow quickly, like we tripled in three years and that was, I know businesses grow faster than that, but that was pretty rapid growth. And what the roadmap allowed me to do is to know when I was moving from stage one to stage two, what was changing and I could adapt to that. And then we went to stage three and I was proactively even Preparing what stage three was going to be like because I had the roadmap. So, yeah, it works well if you want to stay at a particular stage or if you want to grow regardless of the speed of your growth.
I would say one thing that I've also seen is that a lot of business owners who come to me and say, you know, I really don't want to grow my business, many of them, what has actually happened is that they've attempted to grow the business and they hit this wall. They don't know what it is, but at certain point, the business just gets so heavy and growth seems so hard, and it just takes more energy.
And so really, when they say they want to stay at a certain level, it's because they don't. You know, they've tried to grow. It hasn't really worked. It felt too burdensome to grow. And so they kind of pull back and say, okay, you know, I can stay at six employees. I don't need to get at 12. Because around 10 to 12 employees, all of a sudden things got really wonky. And so sometimes it's just that they've resigned to a certain size as opposed to really that was their goal all along, was to only have a small business.
[00:07:16] Speaker A: Well, let's get into some specifics within these phases. You know, just that they exist is one thing, but let's talk about some of these frictions or walls or challenges that you're seeing that are specific to these particular phrase phases. So, you know, I had worked with my friend Michael McDougald. He was consulting for a door manufacturer, and they, you know, were kind of stuck at a particular size, and he thought that that was part of his. His challenge on the marketing side to try to grow them out of. Is it marketing or is it ops or a mixture of both?
[00:07:55] Speaker B: Well, it's stage specific, is the answer.
So what's going to fix a stage one business to get to stage two is different than two going into three. And if that door manufacturer, maybe they're in a three or stage four business from an employee count, those are different characteristics as well. So, yes, the answer is it could be marketing, but it could be a. A management team that really doesn't understand how the business is profitable, that can't get the employees engaged to a level that's really increasing productivity.
It could be that the business model is weak. Oftentimes in stage three and stage four, you've kind of reached the end of your growth potential because you really haven't thought critically about your business model.
There could be potentially new revenue groups that are out there that you really haven't latched into and got some more revenue opportunity out of because you kind of have done the same thing for a long time and that's worked. But you really need some new growth product lines or a different kind of a customer that you need to be going after.
So there's a lot of things that could contribute it to it. But essentially what we find is that the majority of growth challenges are really just stage related challenges. They're just the common challenges that a business faces in that given stage. And so if you understand that and you can align to the best practices for that stage, it allows you to continue to grow as much as you want.
[00:09:38] Speaker A: Let's do two things. Let's zoom into a niche just so we have like something concrete and then to a specific phase and talk about it. So let's say a phase two business and it's like backyard resort pools, you know, they doing pool installations. So phase two size. What are some of those specific challenges and does it change based off of the specific niche of your business?
[00:10:07] Speaker B: Yeah, so the research is industry agnostic. So it doesn't matter what business you're in. There's enough fundamentals of business across industries that obviously you don't ignore that, but really focus on these core ideas and principles and structures that all businesses need. So yeah, a landscaping company versus a pool installation company versus a professional service services business. You know, those have some industry specific aspects to them, of course, but most of the time what's caused the business to get stuck are not those things.
So free stage. Our research has identified five key challenges. What we call the classic challenges, and the reason we call them the classic ones is it's just the nature of, of where the business is and its level of complexity that these challenges are often the ones that are being faced. And what's good about that is, you know, you first of all, if you're having those challenges, you don't enjoy them. But the idea is that this is really common within this, in, in this stage of growth. And the analogy I use is kind of like raising children.
So when your child is in the twos and they're being, you know, really difficult and stubborn, you know, your child is not unique. We call them the terrible twos. Right. And why is that? It's just kind of a natural thing that occurs at that age.
If you have teenagers, there are different challenges to the teen years versus, you know, kind of the toddlers or middle school and things like that. So we see it in children and we understand that that stage that they're in really drives the challenges. Businesses are a lot like that.
So knowing the challenges helps you understand that it's not you as a business owner. You're failing that it's your problem.
No, you just have a teenager and you have to deal with it.
So you picked stage two.
Stage two is what we call the ramp up stage. It's 11 to 19 employees.
And the five top challenges there are hiring quality people, inadequate sales, leadership staff gap, limited capital to grow, and weak cash flow. So three of these have to do with kind of revenue and profit and cash flow because you're still really ramping up your organization, figuring out how to sell more, how to price better, how to execute, so you have higher margins.
But there's two that are kind of interesting in this ramp up stage. The one is hiring quality people.
Why is that characteristic so common in stage two?
Well, you're doubling the size of your organization from stage one. You haven't hired that many people, so you're not necessarily very good at hiring and finding candidates and onboarding and all that kind of thing. But you have to double the size of your organization in stage two from a stage one.
And so hiring quality people is a challenge. A lot of times you haven't spent the time to really organize the work, so your organizational structure is unclear. So you don't even know who you're trying to hire, what positions they're supposed to be filling. And so it's just a natural challenge. The business isn't that sophisticated yet as far as hiring and onboarding employees.
And then leadership staff gap is another one that's kind of unique here.
You've gotten bigger.
That business owner that wanted to keep that small business maybe at five people, I'm just guessing, kind of around that size.
Then that business owner probably in part enjoys that size because their hands in every everything, right? They're really working closely with the entire team. And there's something that that owner enjoys about that that may really play to their own personal strengths.
When you go from 5 to 15 employees, things change.
You can't have quite as much personal interaction. And what happens in that, especially as you get later. Stage two is a leadership staff gap. You don't communicate as directly with the entire team as frequently. And so there's this distance that starts to be created between the team members and you as their leader.
And that continues really into that next stage, stage three, which is called the delegation stage.
So those are just some examples of how the roadmap gives you visibility. And again, one of the key things is the challenges you're facing are likely not something you're doing wrong. They're just like having teenagers. No matter how good of a parent you are, you're going to get some of that teenage vibe when your child is a teenager. So you know that's coming. You know, this in this case is a business owner and you just work to minimize and to mitigate those challenges that you know are inherent to stage two.
[00:15:30] Speaker A: I was doing some consulting, looking at, you know, they're a Florida precast concrete wall company and they're looking to expand to different states and do and be seen as a national entity versus a state specific entity.
And then do, you know, delivery and fulfillment out of Houston as well as Florida?
Is there, you know, a particular substage where you're, you know, branching out and your employees are not even in the same building, you know, they're in a different state.
Is that still the same energy level change in, in terms of employees or is there a facet of when you know you're crossing state boundaries or even country boundaries?
[00:16:16] Speaker B: Yeah, I would say multilocation has its own challenge. Right. Whether that's just opposite ends of a metropolitan area, two different states across the country. Obviously each of those distances creates unique challenges and that's part of your business model, understanding why you're doing it in the first place. Is it the right thing to do? How are you going to staff? How are you going to hold meetings? How are you going to make sure communication is strong across the teams? And this is where things like a common set of what we call core values, which are your promise to the team, the values that we share among peers, and your brand values. What is your promise to the market?
What is our expectation for how customers will interact with us and they will experience us?
So those types of things you're going multi location are going to be even more challenging and more important because those shared values create unity than when you're in one location where unity is a little bit easier to accomplish. So again, I would say it definitely is a complication and the leaders have to understand the kind of things that will occur because of that.
But I would say there are structures you can have in place that really make it doable if you, you know, if you really get these structures in place
[00:17:51] Speaker A: for a hot TikTok moment.
What is your spiciest take? The worst thing that a small business owner can do at any stage,
[00:18:06] Speaker B: The worst thing that a business owner can do at any stage, I would say is to.
Assume that they know it all, that the only ideas that can advance the business come from within their own mind.
I think it's very difficult for a business to continue to expand just with one person's ideas.
Stage one is, stage two are what we call owner centric stages.
And during those two stages, yes, really the driving force is the founder, the CEO that's really pushing for the organization.
But even by stage three, 20 to 34 employees, which is the delegation stage, it becomes important to get more people involved just because there's just too much complexity for it to drive or come through one person.
So I would say if you are okay being a solopreneur, you can just rely on your own ideas. But as soon as you start to create a team, you have to be open to taking in outside input. And that's really what our roadmap, our framework is. It's just research based guidelines for you. And so instead of just trying to figure it out by trial and error, which you're kind of left to, if you just are going to rely on your own ideas, those trial and error approach can take many years and costs a lot of money.
So looking at something that has already been proven can save you a lot of time and energy instead of just relying on yourself.
[00:19:53] Speaker A: It occurs to me that, you know, franchising, like if you had figured out your model of, you know, your pizza franchise at a particular energy level and then you just clone that and half pond it off to new owners, what, how does that work in terms of scale? Because they're not exactly employees, but they're under your franchise. So is that still going to have the same scale up in terms of people or are you going to just have more of your, you know, phase one, phase two problems that you're trying to manage and deal as these franchises necessarily will have to start small once you plant, cut, plant cut off these kind of graphs, I guess you could call them, as you kind of move the franchise around to different locations and get willing investor slash owners to join you.
[00:20:54] Speaker B: Well, I think the strength of the franchise model is that a lot of the details, the operating procedures, standards have been figured out over many different locations.
And so essentially what the franchise does and what the franchisee is buying is all the lessons learned.
The trial and error has kind of been squeezed out of that, right? You don't have to know how long to cook the pizza or how much cheese to put on it in order for the price to be at a level that you can make money off it. So they've figured out all those details and that's what's wonderful about franchises, non franchise businesses, which is basically every other business, right. That's kind of a one off business.
You're having to figure out all that out on your own. And, and that's where the trial and error takes many years. You can just get stuck, you run out of ideas and then you say, okay, I'm just going to stay here, I don't want to grow anymore. It's too hard to grow.
[00:22:01] Speaker A: I am curious. You know, I had a Brandon Moon and he does end of life consulting for businesses, as he calls it, kind of the death consultant for businesses.
And it was challenge, it was an interesting challenge because I know as a solopreneur myself, you know, I never went into this thinking, how am I getting out of this? And he's like, right, so having started your journey from the we want to, you know, possibly sell this thing perspective, what are some of the lessons that you're taking away or some of the, the, the end of life elements of hey, you know, I'm growing this thing in than stopping or, you know, how far do I take this business before I hand it off? Or, or you know, planning for estate, you know, passing it on to your kids or your next of kin.
[00:22:58] Speaker B: Yeah, well, two, two parts of that. First of all, my parents were entrepreneurs. My mom and dad worked together.
They had an interior design business.
And after 25 years, one day they went to the store, locked the door and handed the keys to their landlord. Their business failed. They walked away with nothing.
So I've seen what that end of life can look like. And that's in part what motivated me 10 years, 12 years into my business where it's like, well this value isn't something I can retire on.
And so that sent us down this journey of well, what can I do, what can I do differently?
And I'm a pretty smart guy. I worked hard, a lot of long hours, but I hadn't figured out how to get past the ceiling we kept on bumping into.
And so that's why I turn, why I think it's so important to be open to outside ideas. Because it was these outside ideas that helped me see things. They weren't complex or sophisticated, they just were things I didn't understand and know about. And once I understood them, it was actually very easy to go align with those rules and see the growth.
But I would say we did not start that business to sell it. That was not how we started it. We were like most entrepreneurs. We just go make a living, make enough money to pay for our four children and, you know, a good life. We had a good lifestyle business at year 12.
But what I saw in those last three years, and then we exited it after those three years for 10 times what we had been valued in year 12.
What I saw is that what really added value to a business at that end of life is you have an exceptional business. It's a business that's an exceptional.
It stands out from all the rest.
And part of that was, especially at that size, was it wasn't owner centric anymore. So the business didn't. Yes, I needed to be there. Yes, I provided important parts of how the business was run, but the business didn't rely on me in every aspect. It could run even when I wasn't there. And a good example of that is I was working more hours when I had eight employees than when I had 40 employees.
So I would say those are two things. You want your business to stand out, it has to be better than the others, and so make it exceptional.
And a big part of that is how do you get your business to be less owner reliant and a bit more owner independent? What we call enterprise centric. So you want to have a more enterprise centric business if you really want a significant value out of your business.
[00:25:57] Speaker A: So not the Dave Ramsey route, where your Persona is central and core.
Basically everybody's an acolyte of one person.
[00:26:11] Speaker B: Yeah.
Your DNA will be throughout the organization. How you do things, that's okay for that to flow out, but you do that through procedures and values and things that become shared. And when you do that, it goes beyond yourself. Right. It's not just Matt's team, it's the company.
And so I think that's where.
Because you have to understand that the value of a business is what's transferable, what the next owner gets out of that. And if a lot of the business is you, when you walk away from that business, that value leaves with you.
So that's the key part, is you need it to be transferable. The next person gets the value. And that's why it's important for the business not to be so dependent on you as the owner.
[00:27:07] Speaker A: A phrase comes to mind.
Curious, trite, but true.
What's. When it comes to that authenticity and the methods that you use as an owner to.
Establish, to make permanent those authentic values, that DNA as you called it, what are some trite but true things that you just have to do to make that Happen.
[00:27:46] Speaker B: Well, I think it starts with intentionality and then it goes to really formalization.
So when I say those two things. So you have to be intentional that you want your organization to have some shared values and it can't be, you know, wishy washy. So you have to institutionalize them, you have to document them.
And, and when you do that though, it's kind of like a parent saying, okay, in this house we do this. Well, then you have to live by them as well.
So you have to be intentional in doing them. You, you formalize them and then you have to.
Well, we have a three phrase, three words in a phrase that help. We say expect, support and reward.
So you have to expect these values. So you can only expect them if they're clear, they're documented, everybody understands what they are, you support them.
So if we say we're going to believe in this thing, then you have to find ways to support that, your people from being able to actually live up to that.
So maybe we want to be responsive. Well, in order to be responsive, we have to have good computer systems or a phone system or you know, there's something in there that you can invest in as a business to, to, to support being responsive. And then reward. When your people are responsive, they live up to that value, you have to reward them. And that reward doesn't necessarily be financial. It could be just an attaboy or recognition and things like that. But expect support, reward are how you really get the team to buy into your values. But it starts with setting them, describing them, making sure they're understandable, and then living them as a leader.
A lot of business owners, they think that they only have to do that last part.
People, just by osmosis, understand what my values are and they will learn how to act like that.
But you know, that's a challenge. I mean, we kind of do that as parents, right? We model how we want our kids to be and sometimes that's enough.
But think of how much more effective it is is to say, here's what the Pole family believes in.
And then you refer to that. When your kids are in that situation, you say, no, we believe in truth.
Here's a situation you need to tell the truth. Here's a situation where dad didn't want to, but I had to admit the truth.
And it's in that living and modeling as well as codifying the values that they become real.
And that's how they become not owner centric anymore. The enterprise kind of takes its own life and those values become what the organization lives by.
[00:30:49] Speaker A: I'm curious for your perspective. I've seen cases where AI tooling capability platforms has been used responsibly. Like Matt Brooks of SEO Tarek pointed out, you know, we can better use AI tools as a external customer support representative so we can make sure we've got our marketing materials. We clearly say what we do and then that tracks through with how GPT Perplexity and others. And then we'll use that tool to dive into our database and reduce the number of customer support queries. So able to grow the business more and support more with fewer people. Have you seen any a lot of successful cases where businesses have been able to grow with a lower person or headcount leveraging these tools. And about how often have you had to adjust for technology and these scale levels between the phases?
[00:31:59] Speaker B: Yeah, I've obviously been getting that question a lot with AI coming on board.
That's where I really think our, our categorization is so strong in fact, because the reality is revenue is not a function of complexity. You could have they talk about what the two person or one person million dollar ten million dollar AI driven firm. Right. So what it's saying is that there's this multiplier on the revenue side that no longer is so dependent on, on the number of human beings in the organization.
That's true, but that's not what we're focused on. We're not focused on revenue. We're focused on the people because people are where the complexity is created. Because you have individuals who have to communicate and interact and work together. And if you replace that with AI, okay, you've replaced that with AI. You can do twice as much business with the same number of people.
But if you have 10, 10 employees, you're still in stage one even though your revenue doubled. That doesn't matter because you still have those 10 individuals who have to work together as a team. They need a certain type of leadership.
So our framework holds up nicely in this new world of AI.
But some of the metrics of revenue per employee are likely to change dramatically here in the coming years.
[00:33:36] Speaker A: I'm curious if you've done a few previous interviews, what's a question that the previous hosts forgot to ask or that you'd gone into the interview and hoped that they would have asked you?
[00:33:53] Speaker B: That's a good one.
I think maybe just understanding.
My passion a little bit. Why? Why I'm motivated and I shared a little bit about my parents experience that definitely was. I was going into high school when they lost their business And I had grown up in a upper middle class home.
My parents ended up on welfare, food stamps.
For a proud German dad, that was. That was pretty tough.
He was a busboy and a dishwasher at a restaurant. After being a successful entrepreneur for many decades, and I don't know that I realized it as a 9th grader what that did to my dad.
But later I realized that he never really recovered from that.
He was never the same.
And seeing what my wife and I were able to do with our business and successfully exit, it's that dichotomy, that contrast that really motivates me. Because I know there's a lot of business owners like my dad.
He worked harder than any other person that I've known in my lifetime. And yet he failed.
He didn't fail for effort, for trying, for passionate, for being good at what he did. He was an amazing interior designer, but he didn't understand what he needed to do to run a business.
And I just, I. My passion comes from that, that I want small business owners to get as much as they deserve and their teams too. Also, we want the employees to thrive within those organizations as well.
And that's why our mission is to multiply the number of exceptional businesses globally.
Because exceptional businesses not only benefit the owner, they benefit the people that are part of that organization and they benefit the communities and the families of those people.
So it's really a big win when a business becomes exceptional. And so that's my passion. And that doesn't always get brought out in these podcasts.
[00:36:32] Speaker A: Well, I'm glad you got a chance to bring that forward. Just kind of wrap up here, let people know how they can interact with somebody who has that passion to see businesses grow and succeed. If you have any resources to share, I'll be sure to hyperlink these in the show notes.
This episode will go up on unscripted small business.com with all of these linked resources as well. So go ahead and give a shout out, let people know how they can connect, what are some of the free resources you might have available and if they want to connect, how they can do that.
[00:37:08] Speaker B: Yeah, I'll keep it simple. Go to rewildgroup.com is the best place. I've got two series of books, so a total of 18 books on Amazon. So they can pick up a lot of this. Just, you know, read through it, see if it resonates with you. And we've got a calculator on our website where you can calculate your stage of growth. That's really the first thing. The first step is to calculate your stage and then understand the rules of that stage. And then we've got stage specific resources. A lot of it's free and low cost, but we also have a network of certified coaches, advisors that can work with you if that's of interest.
[00:37:48] Speaker A: Fantastic. Thanks so so much for stopping by, Matthew.
[00:37:51] Speaker B: Okay, Jeremy, thanks for your time.
