Ep 209 Ready Set Scale with Stephen Adelé

This is a must listen to episode today if you want to go from maker and doing everything in your business to true entrepreneur who earns the freedom of time and money that's possible from a business.  

My guest is DU School of Business Professor and co-author of the new book Ready, Set, Scale; How to Scale Your Business without Losing Your Soul, Stephen Adelé.

He and I have an incredible conversation on what it means to truly scale a business so that it runs without you always doing more. 

 I heard Stephen speak at an entrepreneur event and my mind was blown! I knew he had to come speak to the 10X Mastermind and Master Your Business participants when his book came out.  

We dive deep into the nuances of scaling versus growing, unpacking the myths and realities of scaling effectively, and discuss the crucial balance between rapid growth and maintaining your company's core values. 

This episode just scratches the surface of scaling your business. Stephen is presenting his blueprint on how to scale to the 10X Mastermind and you are invited to join us! Register at foodbizsuccess.com/readysetscale to get your seat for just $9 (book available too).  

Get the CEO checklist at https://www.foodbizsuccess.com/ceo and know exactly what to do when you put on the CEO hat 🎩 in your business.

If you would like help to create this foundation to create your own beautiful business, Master Your Business is now open for applications. We will officially start in January, but you don't want to miss the Q4 bonus classes to get your business ready!

Food Business Success is my signature program that helps you launch your delicious idea and grow it to $100K. Includes step-by-step videos, tools and 5 months inside the Fuel membership for coaching + community. And it's guaranteed to make your program fee back or I'll refund your money. Learn more at https://www.foodbizsuccess.com/program

Pick up your copy of "Key Ingredients" on Amazon here.

Check out my YouTube channel at www.foodbiz.tube for how to videos to start and grow a packaged food business.

Transcript

Sari  
Welcome to your Food Business Success! This podcast is for early stage entrepreneurs in the package food industry ready to finally turn that delicious idea into reality. I'm your host Sari Kimbell, I have guided hundreds of food brand founders to success as an industry expert and business coach, and it's got to be fun. In this podcast, I share with you mindset tools to become a true entrepreneur and run your business like a boss, interviews with industry experts to help you understand the business you are actually in, and food founder journey so you can learn what worked and didn't work and not feel so alone in your own journey. Now let's jump in!

Sari  
Well, I am so excited to have this conversation with our guest today, Stephen Adele. And he is let me get to where your intro is, Stephen, you are a lifetime entrepreneur who has successfully built, scaled and sold multiple businesses. You have been named EY. What's EY?

Stephen  
Ernst and Young. 

Sari  
Ernst and Young Entrepreneur of the Year, three times. Awarded Inc 500, 3 consecutive years. You're also an adjunct professor at the University of Denver, Daniels College of Business, and you are a brand new co author of the book Ready, Set, Scale. And I met you at an event, a networking event, and you presented, and I was so fortunate to see you in person, and my mind was blown. I was like, I have to have you on the podcast and come and talk to my group. So welcome Stephen!

Stephen  
Thank you for having me. I am super excited to be here, and I know we've got lots of great stuff to talk about today, so I'll let you dig right in.

Sari  
Oh, this is going to be a little teaser. We want to tease who you are and let people get to know you. And we're going to talk about this concept of scaling. Because sometimes when I use that word, people are like, I think that they are like, yeah, I I understand the word.

Stephen  
Let's use interchangeably with growth, and it's often misunderstood. 

Sari  
Perfect, yeah. So they look at me like, I understand it, but I'm like, no, you don't. We're not speaking, we're using the same word, but we're not speaking the same language. So I'm so excited for us to talk about this. By the way, I want you to introducethe full title of the book before we get started, because I love the full title.

Stephen  
Oh yes, it's Ready, Set, Scale, and it's scaling your business without losing your soul. And you know, I was doing an interview talking to a friend of mine with a friend of mine who owns Midday Squares. It's brother sister and their husband up in Canada, and they're doing really well. CPG product, it's a chocolate that just tastes out of this world, natural, organic. And so he gave me the best definition of soul in a company, and he said it's the personalization and the humanization of the company. So in other words, you know, it embodies so much. It's the values of the company. It's the true essence of why you started it in the first place. And it's also you as a founder, your own sanity. You know, it's like, it's easy to lose your stuff in the midst of the chaos of scaling. So I think a very important part of scaling, and this is why we didn't want to leave that out, was preserving your soul during the scaling period.

Sari  
Because there's a myth of like scale at all costs, and then you are a heaping pile of dumpster fire on the ground with nothing left. And actually  the podcast before this is called A Beautiful Business where I talk about, like, what it means to actually create a beautiful business. And I like that word, but I love the word soul as well. It is so much deeper than just numbers on a page.

Stephen  
Yeah, and the book was actually inspired by, I was on the backdrop of University of Denver, and we were in a room just working through some complex problem,  he's a senior professor there. He's been around for a very long time. And he said, you've got to get this into a book. Like, there's just so much stuff here. Your principles are just really well centered and I think a lot of entrepreneurs could benefit from it. And he was actually the one who said it, was originally scaling your company without losing your soul. And I was like, oh, I love that. So we hung on to that, and that became the subtitle. We changed it to scaling your business without losing your soul. But then Ready, Set, Scale emerged as the the actual title.

Sari  
Yeah, that's so good. Well, congratulations on the book. That's a deal as an author myself, so putting something out into the world and letting people react to it. So I'm excited.

Stephen  
Yes, it's so much fun because you get to crystallize all of your ideas into a framework or a story or however you want to present it that you know is going to impact people in a very positive way. You know, as long as they read it and actually take action on it, you know that it's going to have a very positive impact. And that's what makes you feel so good about being able to publish a book. 

Sari  
And you have experience in CPG, which was another reason why it's like, oh my gosh, this is so great. So maybe we can without going into a ton of backstory, but your very first business was CPG, a supplement brand, right? 

Stephen  
Yes, I mean, you know, as a serial entrepreneur, I can say I actually had businesses before that. And they were actually legitimate businesses that paid taxes. It wasn't like when I was a kid, just selling, you know, plants around the neighborhood from my mom's spider plant, but it was, you know, when I was in college. I wrote a little booklet called How to Make Money Without Getting a Job, and I sold it to college students. And which is perfect, right? Nobody wants to really work, if you can help it while you're in college and make money. And then what I did was I took ads out on the back of, you know, Westward Magazine. They have those magazines in almost all of the states, and they're available on the university. So I took an ad out, put an 800 number in there, got a recorded number, then you called in. I had a contracted customer service. They took the order. I ran the credit cards every night. I stuffed the book into the mailer and mailed it to them, and processed the checks and I did that all through college and then sold that actually to my very small sum, to my ad rep at Westward. Because I was like, I'm not going to do this anymore. He's like, what are you going to do with the business? I said, just let it go. He's like, no, no, I'll buy it from you. So it ran for years after but that was my first but my venture into CPG started at a company called Metrics and EAS. They were supplement companies started by Bill Phillips and his brother, Sean Phillips, and I did not have ownership in that, but it was a very, I would say, intrapreneurship journey. So small company, we grew very rapidly. They sold it to Abbott Laboratories for like 300 million. And I learned so much through that, just that rocket ship ride. And after that, started a supplement company for people who would use supplements while they work out, fitness supplements, if you will. And that brand was called Isatori, and developed a number of products, had some patents, created some ingredients, and along the way, we found out that we had this very unique skill of developing unique products. And those unique products weren't that had very strong defensible moats around them, so they had very strong positioning, but they didn't always fit our wheelhouse of our customer. And so we started looking at, well, could we develop these products and sell them off? And we actually did that. So we had a vitamin line called Living Orchard that we ended up selling off. We had a children's supplement called Boots that was three servings of fruits and vegetables and two little tarts. We sold that to pharma by so we had this neat little business model along the way, but it ended up actually distracting us from the core of our business, which was developing supplements for people who were active in the gym or working out. So I got back to focusing on that business, and went through a lot of ups and downs actually, you know, a smidge this close to filing bankruptcy at one point in time and having a complete breakdown and coming back from that, and then having a rocket ship ride to the point of actually raising money going public. And then, after about 18 months of being public company, decided that I really did not like being public. I learned a lot, but it's a completely different role as a CEO of a public company than private. You end up just spending a lot of your time managing shareholders in the market, and your stock becomes a product. And learned a lot, but would not do it again. So then we merged with another public company. The company's still available, or still on NASDAQ. It's available as a stock called Fit Life brands. Poducts, still available in GNC and vitamin shop and Amazon and everywhere in between. And one of the products we developed there is actually that we launched in Walmart almost 20 years ago, still on the shelf of Walmart. It's called Energize. It's an all day energy supplement. And so over that course, had a lot of great successes, along with many lessons learned. And then after that, decided to completely change gears and move to a different industry. And so there was a few of my acquaintances, that business acquaintances that had just sort of serendipitously, had all finished their last venture at the same time. And so we went out to dinner up in Broomfield, 2016 kind of late 2016 and we were just thinking about, well, what should we do? What should we do next? We looked at the trends, and that was where we ended up landing on third party logistics and fulfillment centered around mostly direct to consumer companies, e commerce, driven digitally native and CPG products. And we got that product, or, sorry, that brand, that company rather, off the ground in January 2017, and then we've just really scaled that very quickly, a little faster, actually, than we had planned. Not complaining, but we went zero to 100 million in four years. And we all had agreed that we were building this to scale, but also building this to sell. So we had a metric in mind. We said, when we hit this, we're going to go to market, we're going to sell. We sold to a private equity firm, and now they've continued to grow the product. Greatest decision I ever made. It wasn't my own decision, but we put a CEO in charge that she's just like taking it to another level. And so, you know, through all of those adventures, I would say is, and as most of us do, you learn not just through the successes, but you learn through the many failures along the way as well. 

Sari  
Well, I am glad to hear that it was not all just an easy ride. The myth of entrepreneurship, but I'm going to just start, and then it's going to be smooth and sailing from here.

Stephen  
You know this you because you've worked with so many entrepreneurs. It's hard work. It's hard work. And if anyone tells you that there's an easy button or this whole notion that is going around now with this, set it and forget it, that's not how it works. There is no set in. Forget it. You can hire a CEO or a president to run your company if you want, but there's no just put this in place and just sit back and go to the beach and work four hours a week. That's not how it works when you're growing. It sounds good, but that's not really how it works.

Sari  
Yeah, amazing. Well, I wanted people to know that, like, you have a past in this, you know CPG and so thank you. It makes me feel even better, like you on the brink of bankruptcy and all those things and you came back. So let's talk about that myth. And like, what is the difference between scaling and growth? So what are you know, you teach college level classes, all these entrepreneurs, I'm sure you see it too. They're like, yeah, I understand scaling, but what does that mean to you? How is that different than growth? 

Stephen  
it's a great question, because the word does get thrown around pretty loosely, and it's become sort of a buzzword lately, scale, scale, scale. You hear it and see it all over. The reality is, and the truth is, and this is, you know, we talk about this in the book, as well as biz growth is typically somewhere between, let's call five and 25%, that would be good growth, right? And it's usually incremental and pretty predictable. You just, sort of, you look at a public company, they're expected to grow maybe 15% a year. However they do it up to them, acquisitions, organically, whatever. And the distinction about growth though, is that from scale is that it is your expenses, typically your overhead, your operating expenditures, your OPEX is commence for it with the revenue. So as you grow, it just continue. And sometimes it'll actually outpace right? If you have a little bit of a downturn, OPEX goes up, PNL, you know, gets flipped upside down. And so it really is more like a parallel path of expenses with growth in terms of top line revenue, whereas scale is where you hit this inflection point normally by putting certain what we espouse in the book is principles and operating system is one part, but there are five different principles putting in place to allow the company to be capable of scaling. And so what that does is allow you to grow revenue disproportionate to the growth in operating expenditures, so that you're then able to sort of see that hockey stick growth curve. And as revenue grows, OPEX more or less stabilizes. And therefore you're able to produce more profit. So one of the reasons that we were able to sell, and we went to an auction when we sold our third party logistics center quick box, was we were producing about three to four times the typical profit margin averages of a fulfillment center in the industry. So we were very attracted. And so by scaling your business, you're not only growing rapidly from revenue and moderately growing expenditures, you're also enhancing and increasing the enterprise value because of that differential between revenue and what's left in terms of profit. 

Sari  
You know what I what I get from that, yeah, that's a perfect definition. It's like, because I work a lot of people like, we launch, cool, yay. And then they're like, month over month, they're growing, year over year, they're growing. Sometimes they're like, I grew 600% and it's like, I'm amazing. I mean, when you start from year one small, it's easy to grow 600% but when they look at their P and L, if they do look at their P and L, they're like, huh, cool. II made a lot more money, but a lot more went out. And in fact, a lot of times it can be upside down because you're not even paying it. You don't even a lot of my folks don't even know what to look at. Pay attention to. You're just throwing so much at it as like, grow, grow, grow, grow, and then, you know, we talked about the E Myth before we started recording, you hit this wall, and you're like, what am I doing? This is horrible. I'm working harder than I've ever worked, and I'm not making any money.

Stephen  
Yeah, it is a wake up call. And, you know, you've seen this, you know, I always say, and we talk about this in the book, is zero to a million. I think is the hardest. It's you can get lucky sometimes, and you get a lucky break, where, for instance, you know, maybe you get a celebrity that you know talks about your product and boom, it just leapfrogs you in revenue. But for most of us, that zero to a million is really, really difficult. And then 1 million to 10 million is like cash flow hell, like it's what you're really trying to do is grow, but manage cash flow, provided that you just didn't take in a whole bunch of VC funding that now pulls the strings on your company and so, and we try to prevent that. And so that's one of the principles that we talk about in the book, is in terms of cash as one of those pillars is, how do we fund our growth? And one of those ways is we really look hard and show how to generate a negative cash conversion cycle. And if you can do that, you can fund your growth. And so, you know, it does take a lot of work and discipline, and you may not get all the way there, but you can get close, and you can get enough to generate healthy cash flow and help you fund the growth company.

Sari  
Yeah, yeah. It's not an easy ride to get there, but it is possible. And, yeah, discipline, constraint. You were talking earlier about you and your partner, were like, we just have to lean into our strengths and really constrain. And I think that's one of the big network getting off on a little bit of a tangent. But like, as we're scaling our business, I think that the tendency is, let's do more and more and more. And actually, I think it's about doing less, but going deeper and, like, really leaning into what you're good at.

Stephen  
Yeah. I mean, it's focus, it's really tough, because in the beginning, as an entrepreneur, and especially if you're going to add it solo, you're just wearing a lot of hats. That's just what's required. You're working a lot of hours, that's what's required, and you're just doing a lot of things. And it doesn't mean that any of them are any less important, but you do have to step back and look and say, you know, what am I really focused on? And am I focused on the right things? And meaning are these the things that are going to drive the company forward? Are they going to move the needle? And oftentimes, what you'll find, if you just go through, you know, we used to do this when we would consult for people in fitness, was just journal what you're eating for the next five days. And you'd realize, like, well, this is okay. This is what we've got to change. Same thing applies to an entrepreneur. It's like, how are you spending your time? If you journal that for five days, my guess is, if I went through that, I'd tell you, you're spending 80% of your time on stuff that doesn't matter. You think it matters, but it really doesn't. So there's the necessary things, but then there's the important things. And you know that urgency fights with important all day long, and you're always going to have more stuff to do than you have time to do. But you have to stay focused on the things that really matter, the things that are going to move the needle.

Sari  
Yeah, amazing. All right, let's talk about, let's transition a little and talk about, you've seen a lot of businesses scale. You've been around other businesses a lot, your own, included, what are some examples of like, what failure scaling looks like, bad scaling looks like, versus like what makes a successful scale?

Sari  
This whole becoming a CEO thing can be a little daunting, especially if you've never done it before, and you are just so focused on being the maker of your product, but your business requires you to step into the role of a CEO. But if you want help, I have a CEO checklist that you can go and grab for free. Go to foodbizsuccess.com/CEO. This will help you to understand what you need to be doing each week when you put on your CEO hat, the more you can make time to work on your business and not just be in your business, the faster you will be able to grow and scale and create the business you love.

Stephen  
Yeah, and the interesting, it's such a good question, because the interesting part of that answer is there's two theories about scale. And one is, you know, scale is all about the front end and just getting more new customers, or more new orders, whatever your business entails, and then later figuring it all out. Okay? The only problem with that is that later could be too late, right? Your business can implode if you have too much weight on the front end. In other words, a good example would be there was a company that was working with, they were a dietary supplement company, and they were selling mostly weight loss products, and they decided that they were ready to scale. And so they were going to turn up the volume on their marketing spend, spend, spend, they knew, excuse me, they had enough data to tell them, based on their customer acquisition cost, contribution, margin and lifetime value, what they could spend. And then it was and it was quite a bit. They could spend quite a bit. And they decided that they were going to just turn up the volume and sort of, let's just worry about the other stuff later. So the back end, well they did, and they grew their order. I mean, it was some 1,000% growth on the top end. I mean, it was just, it was crazy. So going from literally a couple 100 orders a day to like, 3000 orders a day plus. Well, what happened? Yeah, I mean, right right away. I mean, what are all the things that you think are going to happen if you're not ready to scale, you have not put the systems in place. You've not put the operational processes in place. You don't have your supply chain. You don't have set up properly. You don't have your redundancy set. You know, it's not the little things like optimizing cost of goods and all those others. It's they didn't have enough customer service, they didn't have enough bandwidth. They started not being able to process customer service complaints and refunds fast enough, and they started getting a massive mound of BBB complaints coming through, and so the whole thing just started to implode. Now, thankfully, they just threw a lot of resources at figuring it out. And I would say they didn't skate through without some  battle scars, because what happened with that, they started getting literally 1000s of complaints on the bdbb, and then they got an investigation by the Assistant Attorney General, and it turned into little bit of a mess for them. So, but had they just taken the time on the front end to say, yes, we know we can scale the customer acquisition. We've got a predictable, proven, you know, sustainable model, but now let's put the elements in place to ensure that the back end can support that. And so had they just spent a little bit of time putting those pieces in place, I think they would have had a much better or successful journey and probably have been able to generate more revenue without any interruption. I think the company would have just grown. And in fact, years later, by the way, actually, when they went to go sell, they they had a that became a big problem for them, was the that Attorney General investigation ended up coming up, and it was a little bit of an issue for them. Now they eventually got through it and did sell the company a couple of years later. But yeah, I think scale, if you're not prepared, can certainly and you don't normally. Think about this is implode your company. It just starts to collapse from different areas, and it's because you haven't put those things in place and got the pillars really set. But successful scale looks, as you know, looks quite different, but it's doing some of the I call it the unglamorous work. The unglamorous work is this stuff people really don't want to do because it's not something you can promote on social media. It's not fun to talk about, it's hard work, but it's the work that great companies are made of, and the ones that are capable of scaling. Do that work.

Sari  
Yeah, the discipline that it takes. I mean, I don't wish fast growth on anybody, because I actually think that's what can implode your company. When you're like, overnight, Oprah picks up your product, and you're like, amazing. And then you're like, you don't swear on podcast where you're like, so it can. I think that's what can really tank a business if and then having that when you start to see it go like, pausing and be like, we can pause for a little bit to clean up our back end. And that discipline is not easy. 

Stephen  
Yeah, and that's part of the rigor of scale, and that's one, it's it's also the curse, as well as part of scale is that you usually don't get the opportunity to, just like, stop running the company and then get it ready to scale. Sometimes it can be happening all at the same time. I mean, when I was running Quickbox, we were already scaling. I mean, we had just come off winning, Inc 500, 3 years in a row, and it gets incrementally harder to win that award, because you're growing through percentages, is what they're looking at. And then covid hit. And, you know, covid, I always say this because I want to be very cautious and mindful. I had, we landed on the lucky side of the coin. Okay? And a lot of people, including my friends, did not land on the lucky side. They had salons and restaurants and things that went out of business, and because they just just, that's just luck, like it's not, nobody planned for that. But we landed on the lucky side. And so the order volume in our facility after the in home shelter went in place, went up, like it was like, triple, sometimes quadruple for some of our clients. So because they were mostly D to C, so all the ordering went online. So imagine we were already in the middle of scale, and then we had to scale now at like warp speed. So I mean, it was like, I think I lived at the office, just working through all of the issues and challenges and, you know, and these were, I wasn't complaining. These were what we call champagne problems. These were good problems to solve. How do we turn them into opportunities? And but it was just a series of complex and some wildly complex problems, just solving them along the way so that we could keep up with our customers growth, because they were very dependent on us getting those products out the door into their customers. But yeah, that was, that was a lot of fun, and it certainly, I think what it did for me especially was  it really crystallized all of those scaling principles, because it stress tested. Every single one of them was like, okay, can we endure this? Can we make it through this? And it was like, yes, we did. So I know these work.

Sari  
What I wish for every entrepreneur is like, they see success, like, in moderation, and then they're able to and it's not about like, then I just stop everything and I go work on the foundations. But you are creating the space to do that, which is actually what I want to ask you next. But I think I wish that, you know, I wish that more incremental growth, where you can be dealing with the back end at the same time. Because, you know, I would, when I work for Whole Foods Market, I would bring brands on local brands, and I would try to warn them and help them. But, I mean, some of them went out of business because they got this windfall of being in Whole Foods, but they didn't have the back end, and they didn't have the cash flow and all of these things that that you talk about in the book. So yeah, that is where businesses unfortunately, when they go too fast.

Stephen  
Yeah, that's that old expression, be careful what you wish for, right? I mean, you want to get in Whole Foods, but, you know, Whole Foods can consume a lot of product very quickly if it's successful.

Sari  
So that's actually, I get this question a lot in Master Your Business, which is my next level program. It is all about scaling. It's about getting, it's the doing this discipline, work of creating your foundations and everything you talk about. But you know, my folks are like, I'm in the middle of growing my business, and it's growing. How on earth do I have time to do this? And I say, you can't afford not to make the time. But I'm curious, as somebody who's been on that side. Like, what do you tell entrepreneurs when they're like, how am I supposed to find the time to do this?

Sari  
Like, what do you tell entrepreneurs when they're like, how am I supposed to find the time to do this?

Stephen  
Yeah, it's really tough to think through that when you're in the middle of growth, where you're trying to contemplate, how am I working in the business? How am I working on the business? And, you know, I would say that the shift this is something, you know, I think, as a leader and a CEO of a company, you have to do is you have to really ingrain that mindset into the culture and the fabric of the company. So it's not just a, you know, utilitarian sort of, hey, I'm going to hit you over the head. You need to do this. But rather, hey, this is something that we need to do. This is something that is, I think, you know, just generally good hygiene in any way for the business to be doing,but I believe that you have to look at your business and step back and say, okay, you know, not what's best for me, because a lot of times we think of time as always, like a first person thing, right? So, like, how do I have more time? I can't make more time. I'm full of meetings and so on and so forth. And so you have to step back and think to yourself, not what's best for me, but what's best for the organization, what's best for the enterprise, what's best for the rest of the people in this company? How are we getting to this vision we have where you have to stay really attached to? Why is it that you were doing this in the first place? You know, what are you trying to achieve? And so when you start weaving the discipline to do this into the company, and we talk about that in the book, there's just a whole chapter, I think one of the differentiators and competitive advantages for companies that scale versus those that don't, is they have the discipline of execution of actually putting these things in place, translating these principles, implementing them, and having the discipline to do them throughout, you know, not just a one time event, but throughout the, you know, the entire journey of the company.

Sari  
Yeah, and a lot of the folks I work with are solopreneurs or have a partner. Maybe they're outsourcing a little bit. They don't usually have a team. What I usually offer is find the highest leverage thing, like, if social media is where you're spending a ton of time, like, go do that time diary, right? See where you're spending your time. And let's just say you're like, oh, I can record the videos, but the act of putting together the videos and all of that and the copy is very time consuming. Like, where is one place you can invest a little bit of cash? Like, you got to go find that cash, but you make an investment to get your time back. And so you create a system, and you go find somebody, a who, we talk a lot about who not how. And you go find a who, like, I have a social media person that I hired. I've had one since March and the first one left, and then I was like, I can't live without somebody, so I don't have time for this, so I have somebody now, right? So I got that off my plate and working pretty smoothly, and so that opens up more space. And so that's usually what I tell people, is like, go find a high leverage thing. Maybe it's fulfillment, maybe it's social media, maybe it's bookkeeping. You know, where are the things that aren't in your zone of genius that you could outsource, maybe not to an internal person, but to at least a service, or we have so much automation now too. 

Stephen  
That's a really smart approach, because everything in business is a trade off, right? So even the things that you choose to do and strategically compete in business is, we're going to do this and, but we're not going to do this. You know, those trade offs are important. And I think if you can find a way to, you know, steal back some of that time, if you will, like, okay, well, let's look at your your calendar. Where do we, you know, because it's easy to say, well, just block out some time, and there's devote to it. But we all know what happens when we do, we get in that block of time, we're like, well, I don't know what to do. And you know, one of the things that we we generally like to do with with clients, is just give them homework. Say, look, this is how you're going to work on it between the next time that we meet, right? So that they feel a little bit more sense of accountability. But also it gives them a framework for what to be thinking about, versus, like, if I just block out three hours of time and it just says, work on the business or, you know, it's way cheaper. What does that really mean? Yeah. So, yeah. So it's like, well, this week, what we're going to work on? You know, as as we work through the principles is we're going to work on designing the right structure for your organization. So here's how I want you to think about it. And then when we get on and we talk, we're going to talk about what you've come up with, right? So it, at least it gives them some direction. And then it gives them, you know, a sort of a framework, if you will, to start thinking about certain things. And you know, through that repetitive behavior, if you will, you know, I think you start to find more discipline in thinking about your company in those ways. Because a lot of times, you know, I was thinking back when I was writing the book, very early on in my entrepreneurial journey, there were just so many things I didn't know. You know, it's the old expression you don't know what you don't know. And you can use your naivety to your advantage to a certain point. But then there's just things that you do need to know about a business in order to be successful. And I thinkonce you've given someone those tools and the way to think about their business, it never goes away, right? They use it and they refine it, and they keep going back to it. And so, you know, once you get through all those principles, scaling, it gives you the the sort of, the framework, if you will, to go back and and just keep thinking about because it's an iterative processes. It isn't like, do it once and you're done and then just go right. You're right. You're continually working on it as you're scaling the business.

Sari  
Yeah. And one of the things I ask people in Master Your Business to do is put CEO time on their calendar. s. We we talk about the CEO hat. So put on your CEO hat and go and I actually have a checklist. I'll give people the link in the in the show notes, that is like a CEO checklist. So because when we just say CEO time or work on business, our brain is like, I have no idea what you meant by that. That is way too vague, and we're going to go find some things that distract us, that feel much more urgent in the moment. So having a to do list, having a checklist is so important, at least, and it's the discipline, even if you're like, I have no idea what to do, but I'm going to sit here for 30 minutes and be like, this is my CEO time. 

Stephen  
That's important, because it's so easy to forget about that role. You know, you're constantly spinning a lot of plates and trying to keep them all spinning and keep them from crashing. And, you know,I had a mentor very early on. He gave me this one bit of advice, and he was the president of King Goes, before they got bought by FedEx. And I think he had something like 30,000 employees. I mean, it was just, I mean, it was just, I've never had that many employees, but different level of organization. But, you know, he told me, he said, Look, Steven, as a CEO, there's three really big things, then one thing that you constantly have to do, but one you need to shape your strategy and align your people around. Just that always has to be your your North Star. Just keep thinking about that. And are your people aligned around it? Do they understand where you're headed? Are you all headed in the same direction? And then second was attracting world class talent. And that one always stuck with me, because whenever it came to attracting like world class talent. And I never, you know, especially now, I think it's easy to sort of settle on talent versus like and trust me, great talent isn't on. They're probably working really hard at a current job, and you have to go surgically extract them from that company. And sometimes that takes time and effort but as a CEO, your job is to go sell the dream of what you're doing and get people involved in doing that. And, you know, reminds me the old expression of when Steve Jobs was trying to sell the role of CEO at Apple. He's like, you know, to the do you want to sell sugar water for the rest of your life? Or do you want to come change the world? And it was like, whoa, I want to change the world. And so your job is to attract world class down. The third is to build a positive culture, which has to be done by intent. You have to build the culture you want, otherwise it gets built by default and you might not like it. And then the final piece was just like a denominator to the whole thing is you either have to be driving customer growth, or talking to your customer, or learning from your customer. You know his point was, if you're not doing something that's facing your customer, they're seeing your butt. Used to tell me all the time, and so it was like, okay, that's pretty simple. I can keep those four things but if you look every week at your calendar and the things you're doing, you can ask yourself, am I doing one of any of those four things? If you haven't, you're not being a CEO. You've got to get yourself back into that mode. And I think that, to me, was always my anchor.

Sari  
We keep alluding to these five pillars, and we're doing that on purpose because I am so excited. We want to do this little teaser podcast episode. You are coming into the 10x Mastermind, and also new folks who have registered for Master Your Business. And you are going to be doing a class for us, a 90 minute work session on scaling. You're going to be presenting the principles in the book. And it was an incredible presentation that I saw, and you'll be available for Q and A and all of that good stuff, but I am going to open that up to people listening, if they want to come and listen in on that. So if you are like listening to this conversation with Steven and I, and you want to get the book, we'll also include the book in there as an option. So you can go to foodbizsuccess.com/readysetscale. And I'll put the link down  in the notes. I want to give people an opportunity to come and see this presentation. Have you share it?because you are an incredible presenter and really great information. It's really fun to see you break those things down using the example of your fulfillment company.

Stephen  
Thank you. Yeah, I'm really, really excited. You know, look at the end of the day, I love just like you do, seeing people win like that's the ultimate prize. And because, you know, when they win, you win, you feel that sense of fulfillment. And so you know, as we go through the principles, and I think just you've heard the story and how those work and come together and sequence matters, and the playbook has not changed. It's not like I've created a new and different playbook every year with each business, it's just been more and more refined, and it allows a business to really understand how to look at their company from a perspective of, first and foremost, am I capable of scaling? And then secondly, what do I need to do in order to scale? So, you know, I'm here today. Here's where I want to be, but here are the things that I need to do and typically, you know, one of the exercises I might recommend, and I'm sorry I didn't bring this up sooner, but is, we have a it's called the scale ready self assessment. So when we engage with a client, we do a full audit, which takes about a month, but you can do the Scale Ready self assessment on readyforscaling.com and you'll get your response back by email. And anyone that is going to be in the session with us, I would highly recommend to do that first, because then you'll know what to focus on and what to potentially lean in on and ask questions around, because it'll be very specific to your business.

Sari  
Oh my gosh, amazing. I didn't know that was on there. I'm super excited. We'll definitely include the link down in the show notes, and I'll put it in the confirmation email, and I'll make sure all of my folks do that ahead of time, because I think it's really important. I love that you said that, like, this is not for everybody. I don't recommend. There are some people I meet. I'm like, no, no. Like, let's just keep this, like, simple, easy business. That's like, a fun thing for you to do. I mean, scaling takes some guts, it takes grit, it takes, like, it's not about your product anymore, like it's the classic E Myth, right? 

Stephen  
That's just part of the piece. 

Sari  
You better make an amazing product, but we're like, cool, that's just part of the business. And now we're going to go, like, really, get into the business and become an entrepreneur, and really, you know, go that next distance, and it's not for everybody. And so I don't want to say that everybody should scale. I don't think everybody should have a million dollar business. 

Stephen  
It's a good point that you bring up, because, you know, one of the things we talk about in the book is just that one, there's some prerequisites to scale. So there's some things other than the principles that you should already have, because you're just maybe not mature enough yet to scale. And the other part of it is, you know, you have to think about, why do I want to scale? You got to step back and think, why am I doing this? What's the purpose for me to scale just because it sounds like fun, or it's the buzzword? What does that really mean? And what am I scaling to? You know, everybody can have a different level of scale. There's been this big argument recently about, you know, wow, DTC brands can't reach scale. They have to get through retail. And it's like, well, not necessarily, I know and he lives right by me, a very particular, very popular brand right now. He's DTC only, and he got to 80 million, trust me, he's doing just fine, and he has no desire to be in retail. That was scale for him. So where does scale lie for you? I think you have to define that. And if it involves retail, the blend of DTC, great, but if you know, if it's somewhere in between, that's fine too. That's up to you. So scale has to be defined on someone's own terms. 

Sari  
I want people to do it really intentionally and really based around their own values. And like, why are they doing this business and what's in it for them? And you know, what? What are they trying to create and make sure it aligns with your own personal vision for yourself and your values, for sure. Yeah, so I love that you guys offer that. Amazing. Well, I think this is a great place to wrap up. I think we've kind of talked about what happens if you don't build it on a strong foundation, but did you want to add anything there? Because that was our last question of just like, what happens when you don't take the time to do this work, I think we covered it. But was there anything to add?

Stephen  
Yeah, no, I think we did a pretty good job. And I could talk to you the whole day fill up enough, you know, to make a number of episodes out of but I, you know, I just think that, you know, when you're when you're looking at scale, and you think about, you know, how do you do it? Where do you do it, you know, how do I understand? You know, what's important to scale.You have to think about, what is it, you know, I'm trying to accomplish with my business? Kind of the question that you just brought up, which I think oftentimes gets overlooked, and that's one of the very first things I ask entrepreneurs when I'm talking to them, is like, what do you personally want to get out of all the time energy sacrifices that you're going to put into this? Because you have to align with that, you know? Because then when you start building the company to be capable of scale, you know, that becomes a little bit more, I think, just not, I don't want to say rudimentary, but it's, you know, things that you're not going to feel particularly passionate about, right? Because, again, going back to the unglamorous stuff, it's the work and the discipline that has to be done to scale. But you know the rewards you put it in place, and you can scale. And nothing scales infinitely, but allows you the capability to scale to whatever it is you desire to scale. And look, if you want to eventually sell your company and you've designed it to scale well. One, you've allowed it the ability to scale. Two, you've probably dramatically enhanced its enterprise value, so it's worth a whole lot more. And three, you've put in all the pillars in place so that if someone comes in and wants to buy your company, it literally has like an operating manual, like it's worth so much more to them, because they don't necessarily need you in particular to, you know, be involved and run it, and that's when your company is actually worth the most. So, you know, I think that's the upside of scaling, you know, the part of it that you definitely want to align with before you take on the scaling journey.

Sari  
Yeah, I'm so glad you said that, because we're talking about scaling and the grit and the discipline and like, it's hard, it's hard work, but there are rewards on the other side. And when you start, I think that's what we imagine, is like, the time freedom and the money freedom and like, it's all just running like clockwork, and it's so easy, never easy, right? There's always problems to solve, but you grow your team, and you know, the  chaos sort of flattens out, and there's less like daily drama when you scale. And so it's good to remind ourselves, like, why that's important to do that. 

Stephen  
And you find hidden benefits sometimes. And you know the story I explained when we talked about what happened to us at Quickbox and a mission that came out from inside the company that we weren't expecting, and we ended up becoming Colorado's largest Second Chance employer, and it it changed me and the company completely. We didn't see that happening. And you know that can happen within your business, and sometimes that just happens organically. Sometimes it happens purposely.

Sari  
I mean, so many people who are doing packaged food businesses are doing it for a deeper why, right? Doing it for more sustainability, for better health, for cleaner ingredients, supporting local, all of that and it breaks my heart. I'm sure it does yours as well. When we see these entrepreneurs who you kind of get past that initial like, I made 50k maybe 100k but now you're just in struggle, right? This is the hardest place to be, like you said, getting to a million, where you're not at scale, and the expenses are chasing the revenue. And that's cool. You brought in 500k but your expenses were, you know, 450 you're like, wait, I could just have a much simpler business. And it's painful, and a lot of people don't get over it. This is the 80% right that go out of business in five years because they don't get a handle on it. But if you, and I don't think you have to scale to a million or 10 million, or any of that to achieve some of these beautiful properties of what it means to have a beautiful business, a soulful business, a scaled business, but then you're able to fulfill your mission, your bigger why.

Stephen  
Yeah. And that's, you know,we were on a call with their really large fund in New York, going to invest in one of the consumer good companies I was working with, and he, point blank, asked the founder of the company, what reason do you have to exist as a brand? And I thought that was a really good question, because I've, you know, I broached that in the in the book, I just asked the question a little differently, but you should be prepared to answer that question, and if you can't, it might be the reason why you're struggling as a brand is because you need to understand that, and your customer should feel that as part of your brand. 

Sari  
Yeah, amazing. Oh, what a great conversation.

Stephen  
I know we can talk talk for hours. I can't wait to meet your group, and I would like I said, have them take the self ready, self, you know, the scale ready, self assessment. And get their scores, because it gives you an overall score, and then it breaks down by each category. The score tells you where you're at, red, yellow, green. You know, we find that most companies, it's usually don't have red in all of the areas, but they'll have, you know, one, two or three, and that's just the areas that you know, where to where to focus on.

Sari  
Yeah, exactly we got to know. Yeah. It's like awareness is the first step, right?

Stephen  
Yep, it's like a diagnostic tool. 

Sari  
That's right. I love that. So the book is available at readyforscale.com, if you want to just grab the book, or if you'd like to come to be part of the presentation with Stephen, that'll be on September 24 and I'll put the link below, and that's going to be such an amazing presentation with some Q and A, yeah, I know I could just talk to you all day long, but we are going to stop it there. So thank you so much for your time. I really appreciate it.

Stephen  
Thank you so much. I appreciate it, and I'm really looking forward to the Masterclass coming up. It's going to be a lot of fun.

Sari  
Have a great day. 

Stephen  
Thanks, you as well.

Sari  
That was incredible. He might be my second business crush, Tim. Tim Bradley's my first, and Stephen might be my second where I could just talk business all day long. So engaging. I hope you guys really enjoyed this conversation. Don't miss this opportunity to come and see this presentation from Steven. Seriously, I saw it and was like, oh my gosh, I have to have you come and talk to my Mastermind. And we're opening up to all of you to come and listen in on that. And of course, if you're in the 10x Mastermind, you get to come for free, and you get his book as well. Or if you decide you want to apply and you are accepted into Master Your Business, then you will get an invitation for that as well. So it's kind of our kickoff for Master Your Business, which is all about doing this work, the disciplined work of being a CEO and scaling your business to 300k. This is about the foundations to go to that million if you want to, but either way you want a business, I don't care if you're just like, 300 is great, right? That's enough for me, or I want to go to 10 million, 100 million, whatever you want to go to, you got to have these foundations. And this is where you start. Imagine sales 10x or 100x overnight. How would you handle it? Do you have a plan in place? And if the answer is no, then Master Your Business may be the program for you, so go to masteryourbiz.co to go apply there, and I'll put all the links in the show notes for you, of course. And until next time, have an amazing week. 

Sari  
The smartest thing you can do as an entrepreneur is to invest in a who to help  you with the how to speed up your journey and help you skip the line. When you are ready for more support and accountability to finally get this thing done, you can work with me in two ways. Get me all to yourself with one on one business coaching, or join Food Business Success, which includes membership inside Fuel our community of food business founders that includes monthly live group coaching calls and so much more. It's one of my favorite places to hang out, and I would love to see you there. Go to foodbizsuccess.com to start your journey towards your own Food Business Success so.