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- [00:01]
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Welcome back to the Business of Beers podcast. Your daily dose of strategies, tools and tips to help you build an eight figure business. Today's episode is a clip from one of my YouTube lives. If you'd like to hear the whole thing, there's a link below in the description. Cheers.
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So we go through this whole exercise, we come up with a better plan to, you know, pay your guys. Something that falls under the sales framework that I talked about. A little go. And so we say, hey, this is great. We spend a bunch of time on a spreadsheet. So let's say you do all that, you get a bunch of feedback. You're like, it looks perfect, it's great. But now we've got the, like, the hardest part, which is the rollout, because there's this fear that, this fear of change, right? And the fear that like, I, you know, I want to roll out this new thing that Brian talked about on this live. It sounds great. You can make a lot of money, but like, guys are used to it a different way, right? They're used to maybe a flat rate and now we're talking about going to percentages or they're used to like, whatever, just getting paid hourly. And now you want to, you want to put in some performance based system in there. And it's fearful, right? They're afraid that they're going to make a lot less money, right? You're afraid that they're going to quit because of their fear and that you're going to have to start all over again, right? And that you have this like really good team and you have these great people and you know, they all try real hard and like, they want to do well, but possibly for you, you're just not hitting your goals. Like, I mean, I talk to owners all the time who are doing big revenue numbers, a good revenue numbers, but their, their, their net margins are not where they need to be. And often it is payroll that is eating up a huge chunk of their profitability. Or it's a combination of a few different things. Or it's like we have payroll percentages, right? But we just have the wrong people. The people aren't driving revenue, people aren't aligned with company values. And in these businesses, you hate to say it, but sometimes the quickest way to double your business is to get new people. And so, all that being said, we got to get the right people, we got to pay them, right? We got to have a strong business model. Chances are you have plenty of people you don't want to lose, but you need to implement new things, because the business has to go in a much stronger trajectory than what it's going in today. And so how do we overcome this fear of change? And so the first thing you do is make sure you've done a really good job thinking through all the what ifs. I think that is like, I think spending time just to, like, go through all the scenarios. I would run a. In your spreadsheets, you should go through and run a bunch of scenarios. You want to look at. Three, three groups of people. So what I want to see is when I run my new pay plans on my best people, I want to see that my best people are making more money. So the best people should make more money in your plan. If not, it's not a good plan. If your best people are now making less money, chances are that's not what you want to do. You want to see that your middle people are going to make about the same money that they are today. And ultimately you. You want to see that your worst performing people are making less money. Because the whole point of a, of a new plan that you're going to roll out, the point of it is you want to incentivize the people who are doing top performers, and you want to, like, ultimately move on from the people that aren't. Like, if someone's not producing, they're probably never going to produce for you. And so if anything, we could possibly open up a seat down here that we can then fill in that seat with somebody who is going to be a better performer and is going to be better aligned with the company and all that. So you want to run those scenarios. So what you're going to do is in Excel, just like, build a simple spreadsheet. I personally, when I've done this, have gone employee by employee. So I get my best, I get my top five, top ten. You know, depends on how many people work for you. And just like run the last eight weeks, all right? And then go week by week. For example, what did they get on the old pay plan? How much money did they make on the new pay plan? Old, new, old, new, old, new. And at the end of it, you should have some sort of number there. And it's possible that they're making the same, if not better. You're probably in pretty good shape. If they're making less money, you're probably going to have to tweak some things. Same for all the other guys. Now we're armed with some data and we can go to our best people and then we can have a conversation around data that's saying, hey, we're rolling out this new plan and for you, it's really going to benefit you because of X, Y and Z. And you can show them the numbers and you can show the scenario of if they change nothing, they're going to make a little bit more money. However, if they can increase their production by whatever 10 or 20%, we can do even more of what we're doing. Then all of a sudden they now have the opportunity to make a lot more money. Right? Because one of the attributes here of a great pay plan is something that's lucrative. And you want to have a play plan that for your best people is extremely lucrative. And if it's not, like, go back to the drawing board of making a plan that rewards your best guys really well. And then for your worst people who are honestly probably just going to get fired, you're going to, you can have a lot more frank conversation with them to say, hey, listen man, like, we're changing a few things. We are rolling out a new plan that will give you the opportunity to make a lot more money. But to do that, you're gonna have to, we're gonna have to pick up your production, right? And I'm gonna help you with it. I'm gonna show you exactly what you need to do. But at the end of the day, like, we can't keep going how we're going here. And so that would be one. Those are gonna be the tougher conversations. And if you think that you're gonna lose somebody ahead of time because of it, I would just be proactive. I would get ads posted on indeed, if you've got already people on the hopper, on the resumes, you can start having those calls. And then ultimately it may require some short term pain, you may lose some people, but it has to be worth it in the end, right? You have to have a plan that you say, hey, in the end I know that like this thing, like the way that I'm going today is not going to get me to the next level. It's not aligned, it doesn't, it's not lucrative. It doesn't really, like maybe it's just too complicated, Nobody understands it. And so I need to roll out something new. My best guys are going to make some more money. My worst guys are going to move on. It's going to free up spots and ultimately I'm going to grow the business. And yeah, in the short term we may lose some people. And knowing that I'm going to be Proactive. I'm gonna post ads, and then also, like, all my new people that come in are gonna be on the plan from day one, right? And so you kind of go through this possibly a little bit of a transition period, and then you're good to go. The other thing you can do, right, is also you have some sort of like, guarantee for a period of time. Some sort of like, guarantee during like a transition period. I would, I wouldn't do this. I mean, you could do it with everyone if you really wanted. I'd personally pick like the top 50%, but. But essentially saying, hey, this is what we're gonna do for the next four weeks, is we're gonna run both plans side by side. And so you're gonna be able to like, see how the numbers work. If, you know, you're gonna be able to like, you know, if you're making more money on the new plan, great, that's what you're going to get paid. And then. But if you're still making more on the old plan, you still get paid that. But then at the end of the four weeks, whatever it is, then we're like old plans gone away. We're all in new plan. So you get them time to, like, you know, get accustomed to it. I mean, obviously you have the risk of like, them leaving during that time and like, milking it for four weeks and then leaving. But, like, you know, if you see that, if you see that, like, you're gonna be posting ads, you're gonna get ahead of it, you're gonna have a replacement, or maybe you're tweaking the plan a little bit. Maybe there are some things that you missed that now that you see it in real life, are having an impact. So anyway, that would be my approach. That has been my approach multiple times that, you know, over the years that we've rolled out new things is we address it, we run scenarios, we're proactive. And at the end of the day, like, I truly have everybody's best interest, like, at heart, like, that's how I think about it at least, is that I want my best guys to make more money. And this plan does that. Right? And that. And that the more company, the more we make, the more opportunities we can give to people, the better we can be with PTO and 401ks and health insurance and all these different things. And then we can add more stores and we can employ more people and like, the flywheel, like, continue.