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Business, Bourbon & Cigars
Scaling vs. Growing: Lessons from Fractional COO/CFO Michael Straza
00:48:56
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- [00:02]
Scott Joseph
Welcome to Business Bourbon and Cigars, the podcast for ambitious leaders who want a backstage pass to the top. Every episode, we're going to sit down with ultra successful industry leaders who have a proven track record and a deep understanding of how to grow a business. And we're going to learn the secrets and strategies that took them to the top. On this show, you'll gain access to exclusive insights and resources that'll give you what you need to achieve your most audacious goals. And of course, we may even sip on some fine bourbon and light up one of our favorite cigars while we chat. My name is Scott Joseph. I'm your host and this is Business Bourbon and Cigars. Welcome back to Business Bourbon and Cigars, the podcast where we dive into the strategies, insights and experiences that help business owners and leaders take their companies to the next level. I'm your host, Scott Joseph and today we're going to be tackling a topic that I think a lot of business leaders really struggle with, and that's scaling versus growing your business. So if you're feeling, you know, stuck, maybe like you're working harder and grinding, but not necessarily seeing the bigger results or the results that you feel like you deserve, you know, maybe the problem isn't your effort, maybe it's your, your strategy, that's exactly what we're going to break down today. Joining me is Mike Straza. He's an expert on business scaling, operations and financial leadership. Mike has helped countless CEOs and businesses, business owners, I should say, identify operational blind spots and unlock their next level of growth. So as a fractional COO and cfo, he steps in to provide executive level support that a lot of businesses. And I got a personal story I'll go into later, but a lot of businesses need and they don't have to have the full time commitment of it. So by the end of this episode, I want you to walk in a way with a clear understanding of scaling versus growing and why they're not the same. I want you to understand the key mistakes that businesses make when they try to scale, how to reorganize your company without massive friction. Then I want to make sure we touch on this because I've said it a few times, this fractional COO and CFO option and what that could do for you and really transform your business, in my opinion. So this episode is going to be packed with a lot of value, a lot of things that you can integrate immediately. So let's dive right in. Mike, I want to welcome you to Business Bourbon and cigars.
- [02:44]
Mike Straza
Thank you, Scott. Thanks for having me on, man.
- [02:47]
Scott Joseph
Love it. Let's just so everybody can get a quick understanding of who you are, right. And how you got to where you're at today. Give us some of the milestones along your journey that, that, you know, made you become the expert you are today in this.
- [02:59]
Mike Straza
Well, a lot of it happened over 25 plus years ago. I had an opportunity. I was in corporate world working in marketing and worked with some Fortune 100 companies on their marketing strategy. And then an organization, a healthcare organization, physician group, asked me if I'd be willing to manage their business, to run their business. So they've been running it for years and they had over 200 physicians working for them. They were growing rapidly and really trying to keep handle on this because there was a lot of money, a lot of people, a lot of things that had to be done. And they're like they never had someone run the business, an operational coo, CFO type person. And it fit perfectly for where I wanted to go next was I always love entrepreneurship, business ownership and really helping and guiding people to the next, next level, next step in their, in their business journey. And so that's where I first started. So that was the first taste of it was I got to do everything. They allowed me to take over everything, hire, look for new contracts, deal with insurances, all that stuff. And then from there I went, I left there and I started two companies at the same time. One was a tech company and another one was another physician company. And I did those the same time. I don't always advise people to do that. If you want to talk about scaling versus growth, there's some, some growth issues and some growth things I went through in understanding scaling at a very different level. So that helped me a lot to really learn the things over the next so many years past that as I, you know, did this several times with different companies and been involved in different things as a fractional CFO CEO, I took all those things. I learned the good and the bad. And now as I work with CEOs and other organizations, I can help them. I've seen where this goes. I see what they need and how I can help them move to the next level, move forward with their business.
- [04:52]
Scott Joseph
So what is the difference between scaling and growing? Because I could see where a lot of business owners were confused at and just think they're the same.
- [05:01]
Mike Straza
Yeah, well, in a way they are the same. But really you look at growing. So you grow in a business, that means you are, you came up with an idea. You started this business. You have X employees, you have X resources that you're using and you're. And you're wanting like, hey, you know, I want more revenue. And yeah, so we're going to like, how do I get more customers? How do I get, you know, produce more of a widget so I can make more money? And you're growing and you have a small group of people and you're still growing. So you're like, well, I need more people. So you grow at a rapid rate and your, your resources continue to eat up all the growth. So what happens is you, your expenses are more than your revenue. And the reality is, sometimes companies get trapped in this thing is I'm going, I'm going, I'm going. I have these people, maybe friends or people I know, they're helping me build this business. And then you get to a crossroads where you're like, I can't run at this pace any longer. And it's not efficient. And that's the problem is scaling is taking, increasing your company size or revenue, but keeping your resources at a certain level so you don't have your resources and your growth and your revenue aren't following the same pace. And that's where a lot of I've run into with organizations is helping them be more efficient. So it's more of an, A lot of it's an efficiency thing, so you can do more with less. And it's not getting rid of employees. It's just saying, hey, how do we do this without contin. We can't go at this pace by saying, well, every employee versus so many dollars. That's what it equates to. And it's just, you'll run out of cash.
- [06:31]
Scott Joseph
People love to throw people at the problem instead of looking at the process. What would you say are some of the biggest blind spots that you see? A lot of business, especially as it goes to scaling?
- [06:45]
Mike Straza
Well, a lot of it. The thing is understanding who you're. So sometimes companies start or been going for a long time. You don't look at your current staff, your current employees. You're saying, okay, how do I. We're doing this, we're not efficient. Are these the right people in the right places? You know, you're trying to figure out, are they the right fit, are they the right manager, salesperson that they were at one time, but maybe they have not had any time more to develop. So sometimes I look at as the blind spot is you need to continue to educate and develop your team all the time you're busy, but you have to find ways to. So they will learn more as they're going and have to figure out that timing of that. But also too knowing that maybe these. The talent you have isn't the talent you need today. When you're growing a company a million dollars versus 10 versus 20, it's a different type of staff, different type of group. And you can look at that in sports analogies, things like that is like your team is going to get so far but then sooner you're going to change out some of the team members in order to be championship level.
- [07:52]
Scott Joseph
You know, I can remember back when we were growing, right? Not necessarily scaling. We were growing and growing like a weed. Especially in those early, you know, those first five years, right. Man, I, I had a handful of people I could really trust to get things done. And so it's kind of like especially when you're not thinking when you have. Because I started this J and L marketing when I was 22 years old. So I, my whole focus was sales. I just wanted to sell. How do I create packages, programs to make it easier for people to sell? The group used to hate it. I used to tell them, you know, load the wagon, don't worry about the mule, all right. And so. But everything always got done and it got done well. But behind the scenes it was like, you know, the duck on the pond thing, right on the surface it looks great underneath the employees. It got to a point where he had grown to a point where I had one or two people like on busy push weeks and things like that. Some of them were staying till 2 and 3 in the morning to get their job done. And that's not sustainable and that's not scaling. And I also wasn't necessarily comfortable throwing a bunch of people at it. And so I got very lucky in the sense that I knew a person that specialized in operations, Kaizen process process and continuous improvement type stuff and initially brought him in as a consultant. Eventually very similar to your story. I eventually hired him and he was my, he was my operating officer, chief operating officer for 17 years after, after we hired him. And I mean he put everything through a one piece flow process start a barrier board and root causing process mapping. I had no knowledge any of this stuff. And I think there's a lot of entrepreneurs out there that know something and that something gets them and they can grow with that. But then things start to break down. And to your point, there's a lot that can eat into cash flow and if you don't know what you're doing and you don't know how to scale. You can grow yourself into bankruptcy.
- [10:08]
Mike Straza
Yeah, and that's, and I've seen that with people where their, their, their credit line, they're, they're, they're maxed out on everything from credit cards to banks to family, friends. And it's just, it is a, it's a, it's a wheel. Something you don't want to get continued to be on this treadmill where it's just not getting any better. And yeah, you can. You know, first couple times I remember, you know, being late, you know, staying through the whole night and sleeping on the floor and you're like, oh, look at that. And then after a while it's like, that gets older. Um, so, you know, people will finally say, hey, Neil, that was great. Not at the beginning, but what is, what is our culture now? When we were first started, we seemed close. We all were kind of working together. We trusted each other. And then as we got bigger and more people, all of a sudden the culture shifted and people felt like, well, it's not like it used to be. I don't feel like, you know, they don't feel like they're being, hey, congratulations or a good job or, you know, it's more than that. That takes for people to feel like they want to be part of something. You know, they always joke like, you're a pizza party.
- [11:07]
Scott Joseph
I feel like you're taking me into a, a time machine back in time. And I could hear the same words, same phrases, literally, you know, oh, the culture's not. Remember back when we used to do this, all that type of stuff. It so true what you're saying. When you go in and it's time to help a company or business reorganize change. There's a lot of. Usually, you know, change management is an art in itself. Right. So how do you minimize the friction and the pushback that that typically comes with all that?
- [11:43]
Mike Straza
Well, a lot of it is, you know, you've heard the word why. You know, you always have to come in with the why, why, why, why am I there? Why has the CEO called me to come to here? It is, you know, understanding change and what that the friction of that is trying to. Some people understand. So you have buy in by your, your top people and your. And on down is like you're trying to make sure they understand why you're there, what you're trying to accomplish and knowing that there's not a threat of like, well, we're slashing jobs, we're doing this. My evaluation a lot of times is like, let's look and see what the team looks like, what does the team, what are they, what are their capabilities now? What could their capabilities if they had training and other education. And then from there then trying to determine are there some people that maybe no matter how much you throw at them or do or help them, they're only going to get to a certain spot. Well then that's fine. You have to say in the culture and in the way our business is set up, we're going to need different people for different areas. And this is okay how, where they're going to go. They're only going to grow so far. And so that's where I have to really make sure there's buy in one buy in by the C suite people. They're like, yes, we're committed to whatever you tell us or how we're going to do this. And an implementation is like, there's got to be a process. You have to not you can't do it all at once. I mean you want to fix it because you know, a CEO or whoever's like looking at the bottom line like I got to fix this now and I'm paying this person. It's. You want to make sure that you are saying here are some milestones, here's where we're going and continue to remind people what the process is and what is going to happen and what the goals are in showing those milestones as you go on.
- [13:18]
Scott Joseph
You know, I look back and man, I really, because I'm, I love learning. Like I do a lot of self taught learn, you know, big mistake I made probably in the first half of my business career is very isolated though. Like I can do this myself type of thing and would have been so much easier reaching out to people like yourself and experts and picking your brain and getting advice and having mentors, you know, groom along the way. But you know, lesson learned and I can help others and tell people to not make that mistake. But man, access to all this information here we are online, right? How great would that have been back in the day? I mean I'm just sitting here and now what I want to kind of touch on is you're a fractional COO and cfo. When's the right time for a business to kind of go into that mode and really think about that?
- [14:21]
Mike Straza
A lot of times I look at it as for people that tend to seek me out or I kind of reach out to people. It's like if their business is stagnant, it. They don't know what's going on, they're really struggling. They constantly on the same cycles where like, we're seeing this before, it's another day. There's never going to be a time where someone's gonna say, you know what? This is the day. It's like, you have to take that risk. You have to give up a little bit of that control and saying, I need to bring someone in. I can't do it all myself. I did it at one time. But that doesn't mean there's no badge of honor of saying, here, you did it all yourself. Look what I'm, you know, you need people, the resources, like you said earlier. Just like, wouldn't it be great if these resources were for us years ago? Yeah, it would have been amazing. And now we have them and now we. What do we do with them? Because sometimes we, we consume so much out there, but then what do we change is our. How we work with people, how we communicate, how we do business? Have we changed? Or we just read another book or re watch another, you know, YouTube video or whatever. It's like, did we personally change it and how are we communicating that? And that's where looking at a fractional person is saying, okay, I can bring this person in. They have fresh ideas. I need someone to help me. I have all these visions, but visionary ideas, but I can't get them executed. And that's where it comes into, is that I can execute those things by looking at operations and looking at finances and saying, okay, this is how they work. This is what you do best, this is what I do best. And we're going to work together and we're going to move the whole thing forward and it's going to be an exciting time.
- [15:56]
Scott Joseph
I told you at the beginning and before we got on here, the agency I've brought up, we use a fractional cfo. For a long time we had a good person running our finance team. And then as we were growing, growing, growing, we thought it was getting more complicated, the work they were doing, right? And so eventually when she left, it was time to replace. And we went through three or four people trying to find that next good person. And we kept thinking, well, we used to be this size, now we're this size, so we need this type of person, right? And fortunately our CEO, and he's my business partner, he had some good friends that was also a cfo. And so he's trying to recruit him, right, and steal him over to us. And it's much more than we wanted to pay. We could be somewhat close, but he wouldn't have made that leap. But you know what? He, he was willing to help us. And he goes, you know, he had our CO broke down the job for him and he goes, I have to tell you, he goes, even if you paid me the same amount of money or more, I wouldn't come. I'd be bored stiff. He goes, this isn't what you're asking this person to do is not what a real CFO should be doing. What you need is this. And when we figured that out, we were like, oh, well that's, that's about half of what we were really willing to pay. And then we could hire a fractional cfo, which is what we did to clean up some of the things that need to be cleaned up and really get us dialed in. And this person was just over our full time employee that was doing a lot of the book stuff. And it was like, it has been, I mean, the single greatest thing we've ever done. I, that's, that's saying a lot. But I, I, I will say it.
- [18:00]
Mike Straza
Was a chilling point before things got better.
- [18:02]
Scott Joseph
Oh my God. It's been, everything's on time, everything's clean. We have expert advice. I'm not sitting there. I don't have to worry about the person leaving me. I don't. It's easy. And guess what? If, if my, we would never want to leave the person. Our full time employee, she's been with us forever. But if she did, at least I have someone on the fractional side that already knows all the ins and outs. And it's. Talk to me about, I mean, just, is that your experience when you see this?
- [18:34]
Mike Straza
It is. I've. So one of my previous work, cfo, fractional cfo, CEO jobs I had was, I was working with an organization and they had a sizable finance department. You know, it's six people in their finance department. And I came in all they, they were, they heard about me. Like we're, we just want to have you come in. Just tell us about our efficiencies or not efficiencies and our process procedures. We just want you to come in and do that. So I started coming in and just looking at things. And a lot of times I've been lucky enough to see when I come in, I can automatically see things right away without even asking a lot of questions or just kind of watching, observing, because that's what I do a lot is watch and observe people and See how things are interaction. And I have these ideas like, okay, this is what I see, this is what I see. But I keep it to myself because I just like, okay, it's initial conversation, let's see where this goes. And all of a sudden I'm realizing they have the wrong people. They need this education, they need this person or that person. So I revamped their finance department. I've added new people. People had moved on. So then we're like, okay, we're going to change what the type of criteria we need for this. Because really it's like you need, you know, because when they thought they're like, oh, we just need a bookkeeper, we just need someone that does this. Like, no, you need more than that. But it's more than just, I am at this certain thing that I'm doing for you. More strategy, moving and getting things and things. This is what a CFO does versus day to day, putting stuff in and trying to explain that. Because they're like, well, don't you do all that? I do, yes. But you don't want to pay me to do that. That is not what you're paying me to do.
- [20:09]
Scott Joseph
You just brought up a great point. And this is the biggest pain. As a business owner, you need, and especially in a smaller business, you need the business, you need your finance. Be on the ground doing it. But if they're always doing that, then they can't be doing what the CFO should be doing, which then means that's falling on, you know, the CEO, the president, the owner, whatever it means. And that bugs them, that drives them crazy because in their mind they're sitting there saying, why can't Mike do that? I. Why am I the one that always has to come up with the ideas or find this? And you're not going to find it all.
- [20:53]
Mike Straza
And no, and that's the thing is a lot of it is I'm coming up with ideas and solutions of things that, hey, let's try this. This is what I've seen before, this is what I know, it works. And this focuses where you need to go. And that's the thing is if you're stuck in the day to day all the time, you have to be involved. Owners, CEOs, people that are the core of that have to be in it. But they also too, if they're still always stuck in the weeds of things, they'll never get beyond a certain point and they cannot see beyond that. And that's the thing is me helping them do that to help see beyond what the day to day is and saying, how's that growth, how's that scaling work? How can we scale with what we have? Or like we can't. And a lot of it is making that investment of we're willing to pay this much to see it grow. Because I've, you know, in the past I've worked with a company and it's like I found so much savings by efficiencies and incorrect things because they were paying someone very little and they're doing it wrong. But they didn't, the owners didn't know it. And all of a sudden I said, well, here's this, this and this. They just need training. They don't understand the counting, they don't understand how operations and accounting work together. So then this is what they need to do and I can help them. But you're going to need someone that has a little bit more experience or critical thinking. That's one of the things too is that you cannot downplay critical thinking in this whole thing of fractional. And also to your own staff, they have to have that. It's just like you can't just keep on saying, I'm just doing this one function, doing this one function and not thinking about anything else. And that's where I think stuff is lost in school.
- [22:32]
Scott Joseph
Like what I. It just all goes to the owner or whoever's running the company and they can't do their job if they're also doing part of that. It's like something's got to give. And so like what are some of the most common, I guess financial mistakes that really specific ones that maybe the top two or three that really prevent a business from scaling the right way.
- [22:54]
Mike Straza
Oh, the biggest thing of course, always is cash flow. If you, if your cash flow, if you don't have it, you don't understand the trends. You have to understand data. And I think that's where you have to understand your business, specifically to what you do. Understanding where the highs and lows of data, what you're marketing, if you're a marketing firm or this, you know, there are trends, there are things that you see that happen throughout the year. It usually doesn't change much. I mean, I know there's some, we've had pandemics and all this other stuff, but it's like you have things that generally flow through a course of a year of highs and lows in your business and what you're trying to do. So you look at those trends and try to attract it. But if you're not able to do that because you're just going to. No one has any data to say, come to you and say, if I, you know, I was your fractional CFO CEO person, I come to you and say, here's what I've seen the trends, like trends. This is what I've seen the last couple years and this is what I'm seeing now, not just in your company, but overall in the market itself. And saying this is how you match up to the market and this is why the differentiator between you and everybody else and that's what that person has to be doing. Because if you don't, you're just going with the tide. You're in the ocean, you're just floating along. You're just kind of going along with what's going on there. And he's like, well that's not helpful. You're not going to get too far, you're just going to slowly drift out.
- [24:12]
Scott Joseph
Exactly right. Well, you brought up cash flow. So like how does someone improve cash flow management without doing, you know, just cutting cost?
- [24:20]
Mike Straza
Yeah, well, yeah, there's always like where, you know, always where's the fat of this thing? Where's, you know, where can we cut costs? And you know, sometimes you have to look at that and understand by cutting this, what does that mean? How does that affect us, the cause and effect of cutting something? Because sometimes you have, you're doing business with several different people or something. It's like, okay, I have this, it doesn't make me money, I break even or lose money. But this other portion of it that I, my other service I provide actually makes up for and then some. So you have to look at that understand is what is your true cost to do business with another business or for whatever you're doing the type of business you have. Because you have to see not everything is like, well, everything has to be high revenue generator, profit maker. Some will not and some will be. But you have to understand how does this one leverage the other one. And that's where again, having someone that has that critical thinking and seeing that and saying, okay, here's where you're doing. Well, these are lost leaders, but you need these because that's something that attracts other businesses to come to you for the what you're providing. So that is something that again, being outside of that day to day stuff, that person could help guide you to see instead of like. Because I've seen CEOs constantly like, nope, we're doing this now, we're doing this. And they're like their focus on what their business is is all over the place because they're like, oh, there's a new shiny thing to go this way. And then they change directions and then your staff, your employees are like, what are we doing? Back in the day was this was important tomorrow, was it?
- [25:53]
Scott Joseph
Yeah. Back in the day they used to say everything was a top priority to me.
- [25:57]
Mike Straza
Yes.
- [25:59]
Scott Joseph
Which are to the priority. All of it. Yeah. Have you ever felt stuck? Like no matter how hard you push, you're just not breaking through to the next level? Imagine if you hit a clear roadmap to get past those obstacles to stop spinning your wheels and finally break free from the frustration. Limitless Growth is that roadmap. It's a free ebook. It's packed with powerful, proven strategies that are going to help you stop feeling stuck and start gaining the success, freedom and fulfillment that you deserve. This is your chance to stop going in circles and start achieving real growth. But it's only available for a limited time. So I want you to head over to me+Ultra.com growth or click the link in the show notes to download limited Limitless growth now and begin taking control of your future. Today you brought up I, I like the shift you just did with growth. And you talked a little bit about growth levers. Like, so what are some of the most overlooked growth levers that you see? CEOs or that CEOs I guess should focus on.
- [27:08]
Mike Straza
So kind of what I think, what people, if I understand what you're asking, is this more of when you're looking at your growth, meaning like sectors or verticals or what were you asking on that part?
- [27:18]
Scott Joseph
Well, like for instance, I, to me, I think there's only now there's multiple ways within these three. But to me, you got it. You can increase your active customer base. You can increase your. The frequency in terms of how often people buy from you. Right. You can increase your average transaction value. Right. To me, those are the three biggest levers. But it might mean something different to you. I don't know.
- [27:50]
Mike Straza
No, I think a lot of it's interesting as you talk about that is you've seen this in a lot of companies. You know, companies have really grown, like Apple and things like that. You see over the years, where they came from and where they are now is before, you know, when cell phones came out and you know, everyone was buying one and it was cheap. And now all of a sudden it's like, well, the phones haven't really changed much, so have to raise the price of a phone where it's just this crazy number and they're like. And it's just the problem is like what your service is, what are you providing? What's the next thing you're providing? Does it have the value to either increase the price or can you sell more of it? But then you get to. Once you saturate the market in a certain thing you're selling, then what? Is there a new technology? Is there a new something? And that's where people are like, it gets stagnant. It's like, okay, you've flooded the market, you own the market. And every so often it's something new that comes up and it's really not new. So then after a while it's like, well, where do we generate money? So you look at some of these big companies or they got an entertainment industry, they got into all these other things because like, well, we gotta get, we gotta go into this sector in order to cover this because now we're so top heavy and we can't generate that kind of cash like we used to. So we have to keep our debt down. So we're gonna have to find another revenue source do that. So that is where it's just more like. But if you're in a smaller market, you're just saying, okay, what we're doing and providing does this and we have to determine what is, what is the output, what does it take to do this particular service and how many people does it take and can we afford to do this at this price or do we have to continue to increase this price or do we have to now add something additional onto that to get people pulled into saying, yes, I want to continue to be a value, you know, I want to be part customer base that's going to be their lifelong. And I think that's where again is what is your purpose? What is your. Why are you trying to have loyal customers forever? Are you trying to have this X amount? You know, as you look at your thing, it's like, I need this many people to buy this many products over the course of a year. And you're just like, that's what we got to do. It's just that big treadmill. So then you are looking to buy how many salespeople do you want? It's like, well, I know my salesperson, they get paid this way and they get, they're going to sell this much as your quota for the year. So again, it's what is your industry and what is. How do you want to attack it is going to be the key, the value you're going to get out of that.
- [30:23]
Scott Joseph
How do you see like mergers and acquisitions fitting into a scaling type of strategy?
- [30:29]
Mike Straza
Yeah, so a lot of that with mergers, acquisitions is again, the biggest thing you have to be careful when you're trying to acquire another company. There's several things that kind of people, small and large companies fail at times is they don't do the research enough. First thing is, okay, they do something similar. They have a product that will help enhance our product. Great. Okay, so the things you'll look at is what is their overall house or sales, what is their total employees, what's their culture? Does any of those fit our current culture? Because we're going to absorb this and all of a sudden we have duplications of services inside of our company. We culturally were very different. And then all of a sudden you have this disruption. And if both sides don't understand, your employees have been with you forever and then you add these new ones, it's like, well, how do we fit in this? Am I still the VP of this or now somebody else taking this? So there's been a lot of times where people overlook the fit long term, the resources it takes. So when you acquire something, yeah, it makes sense because now you're taking over another region and it's like, yeah, this region is saturated in this area and this is the best way to do it because this group is well known and these people know this area. So we can easily roll right in there and continue to do what we do. That's great. But sometimes you've seen where people buy companies and they fail, they just collapse because they just, they misread the market, they didn't pay attention to cash flow and it just destroys them. And all of a sudden, instead of hurting one company, they hurt both companies together. And then I've seen that where they've closed up with like in the three to five years after they've been acquired.
- [32:20]
Scott Joseph
You know, it's funny if you ever talk to employees, not funny, but you ever talk to employees that have been part of a couple companies that have merged, you rarely hear how wonderful it's going. I mean, it's usually so the cultural part you brought up, usually there's a cultural clash. You know, the part about some repetitive processes and, and things like that, that's a double edged sword, right? Because you've got opportunities that, that creates big opportunities to increase profitability. But there's a chance you could have a negative impact on the culture because a lot of times you start Saying, well, if you're doing that and you're doing that, somebody's, you know, that might be a reduced head count between the two. Right? So I mean, that, that's, that's the catch.
- [33:15]
Mike Straza
It is. And it's like, it's the, the, the absorption of other employees and talents and you have ones who've always been with you, and then all of a sudden they feel like, well, am I still with them or am I now being numb? Am I working for my job? So then communication and workflow might slow down because they're more concerned about how does this affect me? Do I have a job? Do I have the same clout or the ear of the CEO that I did before? Because all of a sudden it's like now they're not listening to me or the perception that they're not listening. So then maybe I don't have that and like the inner circle has changed or the, you know, what you did before isn't like, go back to what we said at the very beginning. Well, it wasn't like it was before. We're different. You know, when we first started the business, we were like this. And now we're 10, 15 years in and we've absorbed these, all these other groups and we're just, we're, we're corporates. You know what.
- [34:15]
Scott Joseph
Are there industries that you see benefit more than others when it comes to fractional COOs or CFOs, or is it more about the size of a business?
- [34:25]
Mike Straza
I think it's, I think any business. I, I was talking to someone yesterday about this or just asking, so where, you know, who needs us? It's like, honestly, it's like everyone perceives it's this type of company or this type of organization. It's like they all have things not saying that they're all having troubles or whatever, but it's like, yeah, there is a certain size of growth, you know, that is going to fit because it's not completely into this very large thing. But sometimes I've been into groups where it's like a very small amount of employees, but the revenue is very high, or it's vice versa. It's just like, it just depends. So I've worked with stuff that's been a couple million in revenue to almost 50 plus million in revenue. And it's just to pins. So I mean, I go, I've gone up to about 100 million in revenue, but then the size of the amount of employees is very small. But then I've been to something that's been 28 million, 30 million. And it's like they have over 200 employees. And it's just like, okay, that's weird. I have one that's like, you know, there's 50 employees that are doing a hundred million dollars. You got someone who's got 250 employees and they're doing not even, you know, they're doing about a quarter of it. So it's, it's, it's, it's, it's, it again, it's looking at how they're structured and their, their, their overall, you know, from the whole, you look at the org chart and see how they're structured, how are the efficiencies or inefficiency happening. And this is, you know, this can happen from a company that's only a couple years old, which I've worked with, to someone that's been, you know, 100 years around for over 100 years. And it's like it's been a legacy company and it's like, well, that they should have their stuff together.
- [36:07]
Scott Joseph
If there's businesses out there that, you know, business owners and they're feeling stuck and they're like, good, I got it to here. But now. And maybe they're still growing to your point, but the profitability is not, they're not actually scaling properly, whatever it might be. What's the first thing that they should do today to kind of change that trajectory?
- [36:28]
Mike Straza
They first. I mean, getting an outside source. I know it's always you, you'll get a fractional person to look to see what can they provide, how can they help. And then sometimes the CEO or the owner, partners sometimes have to, in a way, give up control and, and allow things to happen. Because you, what really is tricky is you bring in somebody, say, I'm bringing in to help us with this, but they won't want, they don't want to change, but they're mad because it doesn't. Nothing. I thought you're going to fix this. Well, it's like, but you aren't changing the process and procedures that need to be done because it's an issue is like, but I, they're holding on tight. And it's like, don't hold on that tight. It's like, I know it's your thing. It's you, you, you came up with this idea. It's your brainchild. It's, it's your thing. But you need to let go of some of these things. So that's. Some of it is trying to just help, help them understand, to get them out of that stuck position. And that's where it is, is sometimes you're just getting stuck and you just, you, you have to get outside your group at times and try to find somebody that's, you know, thinking a little differently than what you've been around.
- [37:44]
Scott Joseph
I've, I've brought this up on a, an episode or two. I was that guy and, and I'll tell you when I first I told you I started this thing, my agency which that was the first business I had ever started and started when I was 22 years old. And all I knew was sales. Of course I thought at 22 I was a master at selling but I didn't know a lot about business. And I knew though that if I could sell I could learn the other stuff. And I quickly learned on the selling I was like, I got to create packages and programs to make it easier for me to sell stuff. That's one thing I've got this program but it needs a little bit more to make it easy. Right. A no brainer type decision. And so we started doing that. And as the company grew and grew and grew, we were really early on, the first 10 years we were sales organization disguised as a marketing company. Right. But we were doing really good marketing. But I kept thinking it was because of our selling ability as to why people were loyal and we were growing and finally you know, when we started pig pitting the digital and then we pivoted to you know, Martech agency today. But our CEO and my partner, he wanted to. I had 30 some odd salespeople at some point and that, that can be expensive because you know damn well you don't have 30 plus good ones. All right? Right. There's a lot of. It's not just the ones that you're paying salaries to plus commission. It's also all the lost opportunities and the damage to your brand by the bad ones.
- [39:34]
Mike Straza
Are you trying to, are you trying to make it up in volume?
- [39:36]
Scott Joseph
Yeah, it's a hidden cost. And and so he goes, let's shrink this team. And what if we took just half those resources and put them over here in more analyst, you know, more computer programmer type people. Things that would be more customer facing and support and this and that helped our marketing strategy, our data helped our, the support that we gave clients. And I'm like, it's a horrible idea. I fought it for years, two or three years I fought this because it was my baby. To your point, it was mine. And I was. And there was a fear I think of like this Is a big change. And if it don't work, then what? Because finding good salespeople is hard. So made him a partner. He did it. We went from, we got three salespeople over the last three years. It's 300 growth. Because I was ignoring, to your point, the data. And the data said the reason people are really buying from you is the data, the marketing strategy and the support. If you put more money into those things, they will like you and refer more to you and they'll stay even more loyal. And that's exactly what happened. And, and of course, now this 300 growth is also spread over only three people. Now I got salespeople that are much happier too. And think of the less headache. Anybody that's run large sales teams. There's not a person that doesn't listen or watch this, right? That's like, yeah, I feel like it's going to sound horrible, but sometimes these guys, when you get a large sales team, you feel like the highest paid babysitter in the world. And, and it's like, it's like, it can be a nightmare, right? So everything you're just saying there, I mean, literally from the beginning of our discussion to what you just finished with, I'm just sitting here thinking, gosh, looking back, thinking, yep, there was a mistake, there was a mistake, there was a mistake. You know, I made them all.
- [41:42]
Mike Straza
But we all, we all make those mistakes. We all fail at something. It's the, is the making sure you go back, you learn from it and you grow from it and you have people around you that will help you do that. And I think that's the biggest key is like, you got to have those people around you and knowing, hey, yeah, you're going to fail. And it's like, why did I do this? And years later, you're like, why in the world did I have that many salespeople? I was like, you just like, you just, you, you learn over that time. And that's why I love what I do is I, I love teaching people and walking them through the things I have learned and continue to expand that knowledge. Because I just, I love learning and knowledge and continue to keep up on things and just working with people and try to, to do whatever I can to make their business, you know, profitable, whatever they're wanting to. What are the, you know, things that they want out of this other than, hey, I want to make more money, I want to make more revenue, you know, do you want to provide jobs? Do you want to do. What is that other thing you want to do. And it's like, that's. I will help you get there. You just got to tell me, be honest with me. Say, these are things I want. It's like, this is what I want to do. And that's because I've had those experiences like, well, that didn't work. That didn't work. Why didn't it work? Okay, now how can I take that and implement that into other organizations so they can have success? I'd rather have. I want you to have more success than I ever have. And that's my goal is to. At the end of the day, if you have more success than I ever did, great. I'm excited for you.
- [43:06]
Scott Joseph
Yeah. Yeah. You've talked. You've brought up so many things that heck, we could have spun this into four or five different episodes. So you were awesome today, man. Powerful conversation. So I want to thank you. Learned a lot about when it comes to scaling in growing, verse growing, I should say. I loved all the c. The fractional COO and cfo. And I'm here to tell you guys, if you have not explored this, it is a game changer. If you're a business owner and you're sitting there frustrated because you feel like you're the only one coming up with the ideas or am I the only one trying to find ways to. To grow this without throwing people at the problem? Right. So we can maintain our profitability or, you know, are there other ways we can cost. That's frustrating. And. And the fractional thing takes care of that and actually thinks of things because that's their. Their experts at that thinks of things much bigger than you're ever thinking about and. And better. So I mean, love it. Some of the key takeaways I took away from today, besides all the mistakes I'd made in the past as I brought up the difference between the growing and the scaling and. But you know, by why most businesses get stuck with that. I want to, I guess really we talked a little bit and I took away from how to reorganize because I mentioned we pivoted three times or two times from. From direct mail to digital and then to Martech and we got better the last time. But the first time was a nightmare. My. The change management. I had people making a lot of money for a long period of time. Didn't have to really learn new things. And so all these things you're describing, man. So I once again, if I had you as a mentor way back in the day, I would have sped up that. That, that Learning curve but the game changing power of the fractional CEO. And I've touched on it multiple times. I can't. I big proponent of. It's one, it's one of the reasons I wanted you on the show is because I've been there and experienced it and I know it can help people. So if you want more insights from Mike, connect with you on LinkedIn, correct?
- [45:23]
Mike Straza
That is correct.
- [45:24]
Scott Joseph
All right. You're given weekly tips on business growth and a lot of what we discussed here, correct?
- [45:30]
Mike Straza
That is correct.
- [45:31]
Scott Joseph
Is there anything else they should be trying to find you or looking up?
- [45:35]
Mike Straza
You can go to my website, it's Straza Consulting. You can look me up there, kind of. I have a lot of my, I put out stuff I put on LinkedIn. I also make blogs out of a blog post. So I have a lot of content out there about growth, scaling and other things that you're going to run into as a business owner or as an employee. Just trying to say, let me think about this. How does this work? What, what are some things I need to think about? And so there's a lot of content out there. And then also you can contact me through that way too to reach out to me to, you know, see if it, you know, we are fit and I love talking with people and helping them, guide them, the direction they need to go.
- [46:13]
Scott Joseph
Yeah. And then finally, you know, if you're out there and you're feeling stuck, maybe feel like you're grinding and grinding, putting in those hours, some of them, like you said, right. They're, they're up all night working, endless. But you're not seeing the breakthroughs that you really deserve. I do have something that I want to offer everybody that I think can change a lot of that for you. Limitless growth. It's a, it's a free ebook. This is not like one of those, hey, this is an ebook you end up getting. It's like six or seven pages, like 80 something odd pages. I mean it's thorough, but it's designed to really help people break free from that frustration. It gives you the tools and as you've heard this episode, I have made a lot of mistakes along the way. I have learned. I am surrounded through me plus Ultra, our members in that a lot of great mentors and in business leaders. There's nothing in this group, by the way, that one of us hasn't dealt with. Right. And can help the other with. And so this ebook takes a lot of that and it gives you the tools to overcome those obstacles and avoiding that, that painful cycle of stagnation. And so you can unlock your true potential, whether it's your life or your business. You know, with proven strategies, practical things that I think it'll allow you to finally kind of take the steps needed to achieve the success and the freedom that you've really been chasing. So if you're interested in that, you can go to the show notes, click the link in there, or if you don't have quick access to that, you can go to me+untra.com backslash growth, download it for free and start transforming your life with actionable insights. Today, I want to thank everybody again for tuning in. Cheers everyone. Thank you so much for listening to Business Bourbon and Spirit Cigars. If you enjoyed this episode, share it with other business owners and friends. And if you haven't already, make sure you subscribe to the show on YouTube and your favorite podcast player. My goal is to bring you conversations each week that challenge you and give you a no nonsense approach to growing your business. Make sure to join me next week on Business Bourbon and Cigars. And for more information on our latest episodes, mass masterminds and events, head to business bourbon cigars podcast.com Again, that's business bourbon cigars podcast.com.