‍Steven Nash:  If you've got too much debt, the bank owns your business, you don't own your business. We partner with HVAC guys anywhere between 600 to $700,000 of revenue, and our largest partner we'll do about just over a hundred million this year. The way you get to the top of the house is one ring of the ladder at a time, right?

You just gotta solve one prime at a time, one bottleneck at a time, and go from there. And we feel like a lot of times entrepreneurs. They're very ambitious. They're very energetic. They want to go hit these targets and these numbers, but they don't have a plan to go and do that. And we always just say, you just gotta take the first step.

If you don't know where to go, you just gotta take the first step, meaning take a small step, take action, see how it works out. Be comfortable making mistakes. And if it doesn't, then you pivot If something bad happens in your business, the harsh reality is it's always your fault.

Austin Gray: Hey, welcome back to another episode of the Owner Ops podcast. I'm your host, Austin Gray. In this episode, I have Steven Nash joining me. Steven comes from the private equity world, and I wanted to dive in with him. What do people who are managing hundreds of millions of dollars look at on a day-to-day basis when they're partnering with other business owners?

So Steven manages an HVAC portfolio and he's. Developed some trends or seen some similarities between each different operator that he works with in the business, and I wanted to dive into some levers that operators can pull if they want to grow the business. So Steven shares all that in the episode.

Stick around for the full episode, as I had a lot of fun learning from Steven on this one. If you have not yet checked out the free school community that we created for owner ops podcast listeners, it's specifically for people building local service-based businesses. So you can join for free. That's skool.com/ownrops. 

Let's dive into the episode. Yeah. So Steven, why don't you just tell us a little bit of background about yourself. Who are you, what businesses do you own? And I'll let you take it away from there. 

Steven Nash: Sure. So my name's Steven. Originally born in Bloomfield Hills, Michigan. One of six kids attended a Catholic high school, Catholic grade school in Catholic college. Studied fine in Notre Dame. I took a more traditional pathway. I, like I said, I knew I wanted to do something in business. Wasn't sure exactly what it was. Notre Dame's got an amazing business school. They got actually the number one undergraduate business school. If there was a natural pathway for me to do finance.

First couple of internships in college were hedge fund related, so I worked at a fund of funds and then I worked at a structured credit hedge fund. And then right after college I worked for a gentleman named Brent Beshore. Brent Beshore is, is building a really interesting business. It's called a permanent holding company.

Now it's called permanent equity. And he started basically buying a small business with an SBA loan and then rolled it into this massive holding company of consortium of companies. And they've got a really interesting approach where they basically come in and buy these legacy businesses and traditional private equity, they'll come in, they'll buy 'em, try to flip 'em within five or six years. And the reason for that is they've got a fund and they've got LPs that they take capital from and they have to return that capital at some point. So. 

Austin Gray: I recently got back from launching a land clearing business down in Austin, and this last winter I launched a snow shoveling business alongside Bear Claw and in both businesses I've implemented jobber as a way for us to efficiently manage quoting job schedules and invoicing, and even collecting online payment. Why? Because it's worked so well for us in Bearclaw and it's saved us a ton of time and headache. So if you are looking for a software that can help you manage the back end of your business, look no further than Jobber, you can visit go.getjobber.com/ownrops O-W-N-R-O-P-S.

Steven Nash: There's always going to be a necessary sale or an exit. Him being a self-funded private equity guy, never had the need to sell in his case, never did sell. I worked there, learned a lot about how to buy businesses, how to evaluate good businesses. While I was there, I was helping a lot on the origination, so when deals would come in originally, and so I got to sell hundreds and hundreds of deals after that.

Tried to go buy a business on my own, got really close on a couple businesses. Both of those fell through at the last minute. One of the things I now think through is. How important it is to look at the capital structure. One of the businesses that I was gonna buy was a capital manufacturer up in northern Michigan.

Awesome guy. Really good businessman, but had too much debt on the business. If you've got too much debt, the bank owns your business, you don't own your business. So I would say you like to be capital. You know, obviously you need capital to grow, but you really gotta try to be capital efficient. But anyway, so then after that, work with a another family office out in Chicago called the Walsh Construction Group.

Talk about a multi-generational business. They, it's a third generation business. It's a general contracting business. I helped 'em launch their alternatives group. As you can see, there's a clear trend here. It's a very traditional finance background. What I helped them launch is I launched their alternatives group within their family office.

So we were making checks, investments, anywhere between 5,000,020 5 million into assets other than construction, other than their core competencies. Did that for a couple years, and then most recently, the last couple years, I came back, started working with my family at the Pulte Family Office. And what we do here, which I'm most excited about, is we help young entrepreneurs grow and scale their business.

So our main focus right now is on H effect businesses. We, we partner with about 15 to 20 different hvac. I don't, the number varies 'cause we're constantly adding people to the platform, but we partner with HVAC guys anywhere between 600 to $700,000 of revenue and our largest partner will do about just over a hundred million this year.

And yeah, really that's my main focus right now. We also do some alternative investments on the side. We're big into manufactured housing, single family real estate, and some other really cool assets. But yeah, that's a little bit about me. 

Austin Gray: This is awesome. So this listeners, this is going to be a little bit different of an episode and I'm really excited to have Steven on because I'm gonna ask him some questions that are completely different than the questions you guys hear weekend and week out, because Steven, I wanna know. Oh, okay. First off, could you start, and are you able to share numbers? Just total portfolio size? 

Steven Nash: I could give a rough approximation. 

Austin Gray: So what do you manage right now? Total? 

Steven Nash: Hundreds of millions. 

Austin Gray: Hundreds of millions of dollars. And looking at different businesses, what do you look at on a day-to-day basis?

Steven Nash: Now, that's a great question. It's funny because scale up in the financial world, and you think a lot of it just gets more sophisticated and at its core, it's really just. Helping entrepreneurs build businesses. That's our main focus, our main criteria. We obviously have an allocation to stocks and real estate, things like that, but for the most part, it's helping entrepreneurs solve problems.

We're very active in the businesses that we're involved in. We call ourselves partners for a reason. We are not silent capital. We are not capital that sits on the sidelines and lets the entrepreneurs handle everything. We are actively helping build relationships with vendors. We're actively helping them set up scaling plans.

And really our goal is to, I always say like one of my grandfather built this business. It's crazy. He built it from the one house into the largest home builder in the world, and he always used to say, everybody tries to get to the top of the house right away. Everybody says, how do I get to a million or 10 million or 20 million or become the biggest business?

He says, the way you get to the top of the house is one ring of the ladder at a time, right? You just gotta solve one problem at a time, one bottleneck at a time, and go from there. What we really try to do is to come in and try to help these operators figure out where their main bottlenecks are and just solve them one at a time.

And that's another great concept to think through is inversion thinking, coming up with the target that you want to hit and then inverting back. So for example, in your business, it's tree removal. It's like trying to figure out the average order value. So if I wanna hit $3 million of revenue. What's my average order value on my jobs? Okay, let's say it's, what's the average order value? 

Austin Gray: 10. 10 K. 

Steven Nash: 10, Okay, so I'm gonna take 3 million divided by 10,000. What's that? So don't quote me on my math. 

Austin Gray: 300

Steven Nash: 300 jobs, okay? So I need to complete 300 jobs, okay? So in order to complete 300 jobs, how many leads do I need to generate? Okay? So then you try to figure out, okay, how do I know how many leads I need to generate? How many leads did I get this year? What was my conversion on those leads so far? Okay, so then now we're starting to piece together the picture. Now it's not just throwing spaghetti on a wall, trying to hit a random target, and I'm gonna hit 3 million. Write it down in my journal. Now we're coming up with a mathematical plan to hit our goals.

So we're inverting where we want to be. We're trying to figure out how many, so first we started with, okay, let's, we want to hit $3 million of revenue. Okay? That means we need 300 jobs. How many leads does that mean? Now we can either improve our lead conversion or we can improve our lead flow. So then we gotta ask ourselves the question, how do we get more leads?

And it's not just getting more leads, it's how do we get those leads at a cost effective way? So now all of a sudden we're starting to combine a picture of how we're actually able to hit those targets. And we feel like a lot of times entrepreneurs, they're very ambitious, they're very energetic. They want to go hit these targets and these numbers, but they don't have a plan to go and do that. And the first step in coming up with a plan and is getting clear about what you need to do to get there. That answer your concern? 

Austin Gray: Oh yeah, this is perfect and it's timely as well. I went down and did some work with a guy in Austin launching a new business agent. I had this hold on, young grasshopper moment with him where he stopped running so fast, just trying to do everything as an owner operator, right?

You gotta take a step back and look at the system and the equation. So let's run some ads. Let's figure out how many leads we're gonna get in the pipeline first, and then let's get a salesperson in there and let's figure out their close rate. Okay, we gotta start with a baseline metric, and then once we understand what our demand is in the market, we can start tweaking these little things.

How many deals is our sales person gonna close? Then what's our average ticket value? So I came back from, that was about a month and a half ago, and I just went to town in my own business on these metrics. The video that he shared with me. Is the CAC to LTV ratio. Mm-hmm. That Hormozi posted and I watched it like three times in one night.

It's interesting that you're bringing this stuff up because, man, it's so much fun whenever you break it down and this is what you're doing on a day-to-day basis. Huh. 

Steven Nash: Yep. Yep. And like you said, 3 million. It's 300 jobs. Then you can break it down from a quarterly to a monthly to a weekly targets, and then you can see where you are. And that's where KPIs really get important. It's like the lifeblood of your business. It's the vitals of your business. You should basically start small. Everybody tries when they get into KPIs. Track, track, everything. No, just track the single most important thing. Now I gave you a pulse on the business in terms of where you are, where you need to go.

My grandpa always used to tell me. One of his best qualities, a very humble man. He was a brilliant businessman. He always used to say he liked to be the dumbest one in the room. He says that was his superpower because that forced him to hire people smarter than himself. So I sat down with him and he basically had a guy.

He says, I want this type of guy, this type, this type guy, this type of guy to build this business. It helped 'cause he knew what I was good at. I was a carpenter, I was a builder. I was not a finance guy. I was not an accounting guy. I was not a marketing guy. So he knew. He goes, I didn't try to boil the whole ocean myself.

I knew I had to hire those guys. And that's something we see in a lot of these small businesses. Operators are afraid to scale beyond themselves, right? They get control issues and they feel like if they don't do it, that it's not gonna be done right. The hard part too is that another thing. So that's one thing is they have control issues.

The other thing too is that they don't have the budget for scaling yet. And the hard part about scaling is to scale before the revenue is there to spend the money before the revenue is there. But that's all businesses. You need to be able to invest money before it's directly coming in to be able to see the results.

We call it like entrepreneurs are sitting there in the middle of the forest, right? And they don't know where to look. And they say, how do we get outta the forest? I, how did they scale? And we always just say, you just gotta take the first step. You don't know where to go, you just gotta take the first step.

Take a small step, take action, see how it works out. Be comfortable making mistakes. And if it doesn't, then you pivot. If this advertising channel doesn't work, then you pivot. If hiring this person doesn't work, then you fire 'em. Right? But you have to be entitled to make mistakes in order to grow. 

Austin Gray: So you said the smallest that you have in your portfolio right now is at that 606 to 700 K mark.  

Steven Nash: I probably see more about 800,000 and that's like probably the bare minimum that will grow. And with an HVAC business that's already a small business, that's a four or five man team. We prefer a little bit larger than that, just 'cause like I said, with our expertise, it's easy to grow from the later stages. Yeah. You know, my old boss, Brent always used to say, he says, small businesses tend to stay small for a reason, and that's one of the reasons the entrepreneurs can't scale beyond themselves.

Austin Gray: So what do you see, let's say you go pick up somebody who wants to partner with you at that 800 K mark. What are some qualities you see? Immediately in that person where it's, man, this guy's got it, or this guy's not gonna make it. 

Steven Nash: If somebody's built a $800,000 business, they're clearly not an idiot. But if they've been at 800,000 for a couple years, or they haven't been able to break through that, then there's obviously a component of that missing. So what we typically see in this space is there's one or two qualities, right? There's really good operators. But then they're missing the language of business, the finance of business, and that's one of the things that we think we bring best on. Grand. Granted, my grandfather had boast both. The best entrepreneurs know both.

They're really good operators and they understand the language of business. So they're visionaries and they're executors, right? They can do both. Uh, typically what we see in mostly small businesses is most of 'em are operators. They don't know the language of business. They don't understand finance, they don't understand accounting.

They don't understand operational leverage, they don't understand the cash is where it's going. So typically what we'll do if we partner with somebody, one of the first things we'll focus on is getting basic financial accounting down. We'll put for our partners, call it 13 week cash flow, which basically helps entrepreneurs understand the inflows and outflows of the cash in the business 'cause how many times you see these operators, they'll seemingly have a great month and look in the bank account. There's nothing in the bank account. Where'd all the money go? It's just basically an understanding of, like I said, there's different types of booking revenue, right? You're booking the revenue, but you're not paying it, or you're booking the revenue, you're collecting it, but you have other sorts of payables or receivables that you're not keeping track of.

So it's really just the biggest issue that we see, ironically, is these guys are able to complete jobs. They're good salesmen, but they don't know where the money is in the business. Really, the biggest thing that can help entrepreneurs level up from the first level to the next level is to start to understand the language of business, get a basic understanding of accounting and finance, and you can supercharge your business.

‍Austin Gray: What do you recommend guys at that? Let's just throw it around the million mark and we can interchange the 800 K mark as well. 

Steven Nash: Sure.

Austin Gray: If you see a good operator at that point, but you identify that he or she does not understand the language of business basic accounting, do you recommend that person? Go become better at that? Or do you support that person with someone who is smarter than them at that to accelerate? 

Steven Nash: So for our partners, we'll come in and be in service. That role, that's why we've been able to help a lot of these guys scale really quickly, is because they're good operators and we know the language of business and we're also gonna operate ourselves so we can team up and create this supercharged vehicle.

And also we've got a bunch of other, so it's like the two main things to scale. From a Million Beyond is understanding the language of business. Understanding where your cash is and cash is the lifeblood of the business. We talked about KPIs, whatever. It's the single most important KPI is. How much cash do you have in the bank because that's gonna be fuel for growth.

Obviously you can scale with leverage and debt and credit cards and those things, but cash ultimately is what's gonna be the single most important thing. Fuel your growth going forward in the early phases at a million, you should be pulling as much of that access capital into accretive ways to grow the business as possible.

So that's number one is understanding the basic levels of accounting and then funneling that all into growth. So what I would say is there's a ton of basic stuff on YouTube in terms of just like I said, you don't need to know high complex level accounting at the corporate level. You just need to know basic accounting, basic working capital, basic accounts receivable, accounts payable, and how that all flows together.

You need to know what the difference between accrual and cash based accounting, which one you're on. You can't just outsource it to your account. This is the one thing that you as an operator need to know. You don't need to do your books yourself, but you need to know the basics of where the money is and where it's going in your business. So, yeah, I would say either find somebody like us to partner with who knows that, or just spend the weekends on YouTube. Like I said, learning that basic language. 

Austin Gray: Can you dive into cash and accrual based accounting and the pros and cons of both? 

Steven Nash: I will, but I would totally butcher it. 

Austin Gray: Okay. All right, so we'll pass.

Steven Nash:Let's pass on that one. 

Austin Gray: Okay. I'm trying to identify what do you see as roadblocks whenever someone at that 800 or million mark comes on, let's just say they've been there a couple years. Do you see a recurring trend in similarities to where this person needs to make this chess move right now, and if they make this chess move, it's likely going to get them to that next level?

Steven Nash: A hundred percent. Now, that's a great question. Small businesses tend to stay small for a reason, and that's, there's a lot of very obvious reasons. One being like we talked about these guys, they can't scale beyond themselves. A lot of these guys. Who start these businesses, HVAC businesses, or true removal businesses, whatever, it's because they've had expertise in that field.

Maybe they worked at a different large company, so I can go do this on my own. So they're really good at installing or cutting down trees or understanding the integral components of a plumbing system. But like I said, they don't know the language of sms, so they're able to go install the basics of whatever it is, but then they can't scale beyond themselves.

So it's either one of two things they're afraid to hire before seeing the revenue coming. And number one, they can't scale beyond themselves. Number two, they don't know where their money is. They don't understand the language of business, so they don't have the money to scale. Or have the, the vision to scale.

And then number three is they don't have the capacity to scale from a, they don't know the right growth agency or a lot of things we see with these guys, like they're so focused on their business that like a, a random guy will come by, says, Hey, lemme run your digital marketing and have no clue what they're talking about.

That's unfortunate reality for a lot of things is that some of these operators get partnered up with the wrong digital marketing guys and get totally screwed, and that's, once again, they're too focused on the business to be able to be working on the business. So we say to really scale, you need to stop working in the business and start working on the business. That sounds cliche, but it's very true. In order to work on the business, you have to have time to do.

Austin Gray: So, let's define that working on the business because. I've personally made a transition here out of the actual like day-to-day operations here recently, and I do have some thoughts on this, but I'm curious to get your thoughts, like what does that actually mean as an operator and what do you see the people who do it well start focusing on at that point.

Steven Nash: Yeah, no, it's hard to stop working in your business when you're the only one working in the business, right? So if you stop working in the business and the business stops working, so the first step is finding somebody to perform the roles that you're performing, at least in some parts that'll give you the space and the time to do.

For example, we at that 800 to million range, we have the operators actually running the sales calls if they dial into the company. For example's, one business that we're looking at, it's about $800,000. Off top line revenue. It's five guides. It's two operators, two installers and an accountant. That's it for an $800,000 HVAC business.

And when you dial up the website and you type in the phone number, you are calling the operator. You are calling him and he's answering your call. They don't have a CSR, they don't have any handling booking. It's him actually answering the phone and then heading over to your house to run an estimate.

It's hard to think about your business when you got customers calling your line all day, creating fires for you. So first step is finding where you're spending the most amount of time in your business and outsource that as quickly as possible, time and space to work on the business. 'cause really what he should be doing is, like I said, so that's the definition of working in the business.

Working on the business would be okay, like. What are the numbers that I need to hit? How do I need to hit that? What's the efficiency of my installs? What's the efficiencies of my csr? What's the efficiency of my marketing campaign? How can I improve this? It's taking a full holistic approach to the p and l and say, okay, this percentage is this, but it should be this.

Um, this is the industry standard for this. How can I get this down right? That's starting to think working on your business, right? How can I make things more efficient? Okay. Here's where we grew last year. Okay? We talked about wanting to hitting your business. 3 million. That means 300 jobs. Okay? That means we need to get this amount of leads.

I need to bring on this guy to do this, right? That's starting to, to conceptually think, how can I work on my business, not in my business. Working in the business, like we talked about, is calling customers roaring down leads. Installing jobs, handling the accounting in the back office and all, all that jazz, and you'll never go anywhere very quickly if you're always working in the business.

Austin Gray: Could it be summed up as your job is to build the system and recruit the right people? 

Steven Nash: Yes. Yes. 

Austin Gray: To be inside the system. 

Steven Nash: A hundred percent. Yeah. Like another thing that I was gonna say and get into is we always talk about this is my grandpa was fascinated with Henry Ford. He was fascinated with Henry Ford because Henry Ford found a way to systematize the business of building cars with the assembly line.

People don't understand how amazing an invention that was in concept that was, before every car was bespoke, it took forever to build cars and you couldn't build 'em cheaply, and it was super, super expensive. So Henry Ford revolutionized the world because he made it simple and streamlined. Key word there, systems where I always like to think two, two ways.

So you either want a McDonald's or business and you want to think like an airline pilot and airline pilots, they're not thinking when they're flying the plane. They're following checklists, they're following systems and processes and checklists. The way to scale on your, in your business is to create systems and check to be like an airline pilot, right?

Airline pilot isn't, okay, what are the things I need to do to make sure I fly this plane? I gotta lift up the flaps. I gotta start the engine. I gotta check the wheels. She says, no. I says, if you thought that we'd have 10 times as many more plane crashes, right? Airplane pilots for a reason. They have a full on pre-flight checklist that they're following one through 10 or one through 20, whatever it is that they are following to make sure that they don't f it up.

As you're starting to scale beyond yourself, one of the things you need to do is you need to write down and understand what all the major processes are, right? You got a McDonald's, your business, and why The McDonald's example I come is how can somebody you've got a, any particular McDonald's will do millions of dollars of revenue a year.

That's a real, very real business. And what's so amazing to me is in a McDonald's you have. 16, 17 year olds with zero work experience, zero understanding of how to do anything in business. And within two or three weeks they're fully functioning members, adding value to that business to say, how is that even possible?

They've got no work experience. How could they add value that quickly? And the reason is they've got a bunch of systems and the McDonald's books, they're not thinking, they follow the systems and the procedures and they make it as dummy proof as possible. That's what you have to do for your business. So as you're looking to scale beyond yourself, you've gotta write down, okay, here are all the things I do.

Here's the exact process and checklist of how to do that. So when I hand it off to somebody else, I don't have to think, man, I'm really gonna hope that they're doing it right, man, I gotta check the quality controls. No, they just have to follow the systems and the checklist that I laid out for them. I'm gonna make it as easy as possible not to screw it up.

And that's really how you scale. And then once again, if you give your check to somebody, and let's say one of it is. Go and run down the sales job. Okay, so I've got a checklist. Okay, you gotta show up to the customers house, you gotta do this. You gotta say these things to these objections, and then you're book the job.

Now, let's say you booked the job and the customer doesn't pay. Shoot, that's a big issue. So maybe the next thing you know that you're running it down, you add one of the checklists, is get a deposit down before you build a job. Right? So 

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Steven Nash: Every mistake should work into another component on the checklist, and you should never make the same mistake twice, let alone three times. And the only way to prevent that is to create a system where it's hard to make mistakes just like the airline pilot, right? Where it's easy for your employers to be successful. We tell all our operators, I'm rambling here, but we tell all our operators who get mad at their employees, how did Joey do this or Bill do this?

That's so terrible. What an idiot. I said, okay. Did you set 'em up to succeed? Was there an easy, readily to follow system for that person to handle that interaction? No, but he should know better. No, you should know better as the operator to set your employees up to be successful. And the way you do that is you create a checklist for them to easily follow through on anything that they're gonna experience throughout the day.

Austin Gray: I mentioned this the other day, but I love what you're saying there. If something bad happens in your business listeners, the harsh reality is it's always your fault if you're the owner every single time. The reality is, if somebody makes a mistake, and I cannot stand when I talk to other contractors who just bash people working in their job, I'm like, this is your fault.

Steven Nash: Yeah. 

Austin Gray: You have to do a better job to either clearly outline the expectations or simply just find somebody else who's better. At following the instructions. The harsh reality is it's always your fault as the owner, and I personally think the sooner you take that responsibility and the ownership of that, then you can start to address it.

And another thing, I love what you said, and correct me if I'm wrong, but it was something along the lines of you should never make a mistake twice, but definitely not three times. The first time, I think, can be chalked up as a learning lesson, but as long as you build the system the second time and make sure that doesn't happen again. Then it can stay as a learning lesson, but two and three, it's a mistake. 

Steven Nash: Exactly. Exactly. It's really just, it's like the game of golf. It's fine to make a bogey, but never make a double or a triple. That's a, that's usually like a massive marginal judgment. A bogey is a mistake. A double or, or triple is a lack of judgment. It's losing focus. Um, the great example, my, my grandpa's amazing businessman. There was one story he told me where an executive of his made a huge mistake. I got 20 or $30 million mistake. I think it was that they were buying a piece of land and they forgot to check something out or whatever it is. And everybody's all, man, this guy's getting fired.

This guy's getting fired. Grandpa's fire him. I didn't just pay $20 million to teach that guy a lesson. That's a checklist. That's a new thing that we're not gonna implement. We're not gonna make that mistake again. And nor is that gonna make that mistake again. A lot of times your employees, you get really mad.

This guy cost me a lot of money. He said, no, he just saved you money down the road. 'cause now you're not gonna make that mistake twice or three times. If you just start reframing the way you think through when things go wrong, it's a lot easier to take accountability for those. You nailed it. I, I love it. Ultimately, the buck stops with you as the business owner. You are responsible for the bottom line item, for the net profitability for the success of the business. The minute you start taking radical accountability, as the many of your business starts to thrive, 

Austin Gray: Do you ever see any owners in that phase who are really good at going and figuring the next thing out? Do you ever see them hire somebody specific to help build those systems? 

Steven Nash: Yes and no. It's rare. It's rare. Like we talked about, entrepreneurs that don't understand the language of business. What we have seen is they may not understand the language of business, but they get the right answer following the wrong process.

It's like when you're in math class, you got the right answer. We did it the completely wrong way. We have seen that, like I said, so they don't understand exactly where the cash is or where that's going or the flow of things, but they know. Something needs to happen as far as as them getting a purview into where the money is and where it's going. So yes, we do see entrepreneurs finding ways to get to the answer any means necessary. Yeah, we have seen that. 

Austin Gray: Specifically on that question. You mentioned something that's really important as you scale is building the systems. Do you ever see people, a visionary entrepreneur, go and hire someone specific to essentially be their right hand man or person? To go help document those systems as they're building. 

Steven Nash: Maybe not in the way you're describing it, but I, they definitely do see people bringing on complimentary skill sets to build a business. You definitely, like we talked about, you need somebody who is operator and executor and a visionary. The operator and executor is just somebody who can get stuff done, and the visionary is somebody who sees where they need to go with the business.

Are able to put the necessary pieces together. The best operators are the ones who can be both. But if you don't have that visionary component, it's really key to to find that. Or if you don't have that executor, if you're constantly putting out fires each way and where it's good to find somebody who can be that operator, but it's hard to do that at such a small scale 'cause you don't have the capital to go and hire somebody like that.

Austin Gray: When do you see, like what's a traditional phase where you see somebody in their business define. Their actual role. So you've mentioned two roles here, and I'll flush out this question a bit further. So you've got the visionary and you've got the operator. At what phase of business do you think it is important for the owner to define whether they're going to be both or whether they're going to pick one route and hire another?

Steven Nash: The minute where what you're doing stops working, if you've been at a certain phase or a level for too long, or the same problems keep coming up, that's why you need to make a change. You've got a business where you had already vertical growth and then all of a sudden you hit a ceiling where you're not making any money anymore.

That's a great opportunity. I always say with business, it's the information is there, right? You take action to generate information, and then with that information is what you use to determine your next decision. So the question is gonna be specific for each individual businessman, but it's look at the information that you're getting from your business.

How much have you been able to scale? Uh, the past couple years if you haven't been able to scale as faster, okay, then you've got a scaling problem. If you haven't been able to generate enough property, you got a profit problem. Once you see that information, then you can dig into that problem, okay, so why am I having a profit problem?

Then you look into up p and l, where are my biggest expenses? How does that compare to everybody else? Where can I cut back money? Where am I, I have this job that went overboard, or I either pay this guy overtime, my manufacturing costs or my material costs are way up. Or, man, my revenue's slow because I'm not getting as far with word of mouth.

Well then maybe you need to bring in some, some non-organic growth and hire a really good marketing team. Like I said, the information generates the next problem that you need to solve all business at its core is problem solving. The key thing for the operator is to figure out which problems to solve and yield the highest result.

And usually that's, it's almost always better to focus on growth, that it is on core profitability in the short term. Like I said, a lot of these guys in the 800,000, a million dollar range. This is their lifestyle. This is their job. They're making money to pay for their families. So it's hard for them to think, well, I need to pay myself this much. Okay. So we were talking visionary and integrator. 

Austin Gray: How often do you see somebody do both? 

Steven Nash: It's very rare. Like one in 21 and 30 really? Um, it's super, super rare. It's like right brain, left brain. Like people like Steve Jobs in some components was more of a visionary than an executor. You look at almost every successful business, I'd say Jeff Bezos was a visionary and an executor.

My grandfather was. It's not just like totally binary. Some people can be a reasonable executor and a visionary, but if you're not, it always, always makes sense to help somebody come in there and figure out that part of it. A lot of times, one of my favorite things to serve is to be divisionary for these businesses to help them understand the language of business and the direction that they need to go.

Like I said, 'cause a lot of these guys at 800,000 or a million, like they are the CSR, they are the guy installing the jobs. They're the guys handling the customer complaints. They're the guys doing the bookkeeping in the back office. Everything right, so it's really hard to work on your business. Back to what I was saying is just problem solve one at a time.

Try to figure out where the big levers are on your business and the main things are gonna be profitability and growth, and then to the best that you can solve each problem individually until that problem solve stops coming up. 

‍Austin Gray: Can you identify some qualities that you see on both sides of the coin? Like whenever you work with somebody, you're like, yeah, man, this guy's a visionary, or, yeah, this guy is a great executor. 

Steven Nash: Yeah, a great executor is somebody who's running a successful business for a long time. Like for example, we just took a look at another business, the 800,001. They've been running that for 10 or so years, very successfully, but they haven't been able to break through a million.

You know, they're installing jobs, the customers are happy, the bills are getting paid. There's no debt in the books, right? So that's a successful business, but they don't have, they've lacked that, that visionary component to basically scale to the next level, right? Where can this go and not where it's at.

Good operators and good executors are focused in the now. Good visionaries are focused in the future and where this could be, that's the primary distinction between the two. Focus in the now versus focus in the future. Now, a healthy balance is important. You can't solely be focused on the future, let your business die today, but a healthy balance is what's gonna enable your skill to the next level.

Austin Gray: Interesting. Yeah. Thanks for sharing on this. This is all really interesting stuff to me. Yeah, and I think just transparently, I'm in this phase right now where like I shared like we're right at the million mark. I am trying to decide. You know, if we want to go to the next level, what is actually needed here?

And I think you as an operator and an owner, you consistently think about what are the next chess moves we need to be making? So I feel like I still have my feet in both right now. Mm-hmm. And transparently, I'm working to personally define like where is the best use of my time and what are my skills and strengths.

Or how are my skills and strengths best used in the business? And then be open to maybe I'm not the best at X, Y, or Z. The biggest thing for me was for the longest time, I couldn't fathom to letting go of sales. Yeah, and I'm sure you see this a lot, but the second I let go of sales and hired a sales pro, I'm like, oh my gosh, I just got so much time back and.

Her jobs are like our book jobs are coming in faster than they were when I was doing it, and so there's this huge unlock in my mind like, holy crap. What if you as the owner, and I know it sounds really cliche and I'm sure a million people talk about it, but what if you as the owner focus on just go finding the best people for the specific roles in business? It sounds so simple. 

Steven Nash: No, you nailed it. You nailed it. There's a really fancy guy, Adam Smith, who wrote the super boring book. Called Wealth the Nations way back in the day, back in the 17 hundreds. And he defined that exact concept. But like I said, Leo, the concept and then a lot of entrepreneurs can just figure it out through their life experience.

And the concept is that even if you love gardening, if you're an amazing gardener or you're amazing sales guy, right? If you can make more money being a lawyer, being a business owner, focusing on putting the components of the business together, you're always better off hiring a worse person for that position.

So you can focus on the higher ROI task at hand. That's a core concept of business is that even if you are better at something, if you have a higher ROI activity, it makes sense to hire somebody worse than you for that particular category. So you can go focus on the highest ROI category. That's the single biggest blind spot than most business owners see, say, I'm better at this. And they don't realize the fact, oh wait, but you're way better at this and by you trying to focus on this, you're not doing this. And that's what's holding you back in your business, is it's giving up a little bit of that control to somebody not as good as your business. So how do you control that quality, right?

That's where the checklist come into play, right? They're not as good as you, but you can make 'em quasi you. You can make 'em as close to you as possible because you game the checklist. You say, this is how to be Austin in sales, right? This is what I've done to be successful. Here's the checklist, the mental checklist that I'm following, or not even knowing that I follow on my head.

Right. So once again, that's what we talk about. So it's realizing if we were to sum up everything that we talked about today, the big thing to scale your business is to scale beyond yourself. That means that a, even in the short term, hiring somebody worse at the role you're trying to do. Than you are. But that frees you up to go focus on bigger, higher ROI activities.

And the way you bridge the gap between their skillset and your skillset and whatever particular role that you're trying to replicate is through checklists, through making it as dummy proof as possible for them to be, uh, as much like you or as much like you want the job to be done. 

Austin Gray: That's an awesome summary right there. I appreciate you sharing. So you've mentioned your grandfather a couple times. Sure. We've got 10 minutes or a little bit less here. I'd like to focus this last 10 minutes on what did you learn from your grandfather and what are some of those things that he passed down to you as a businessman that you'll hold onto for the rest of your life?

Steven Nash: Wow. What a great question. Yeah, my grandfather was a tremendous man. A lot of kids, 14 kids total. My grandkids, I think 30 or 40 grandkids. I and I, you know, at an early age, recognized just how unique it was to have. Not only a man as wealthy as he was, but a man as as expressed as he was in the business world.

So later in his life, I would go over to his cottage and I'd sit down with a notebook and I'd say, grab Bill. I just wanna learn. I just wanna listen. And he told me everything. And like I said, the biggest lesson that I learned from him was twofold. Number one, having a certain humility. To yourself and your business and understanding that, that you don't know everything.

And like we talked about this whole conversation, to be frank, a lot of the lessons that he's taught me have already been, you can see in the stuff that I've talked about. But one of the main things was is just not being afraid to hire people smarter than yourself. In fact, that's the single most important thing you could do, number one.

Number two, not necessarily business related, but give money away while you're living. He was a very silent giver. People would come to him. He was a very Catholic giver. People would come to him, cardinals and preach whatever, say, Hey, we need some money to build this school or this church, or whatever it is.

He just say, how much do you need? And he'd a write the check. It's a very old school way of giving. Nowadays people much more flamboyant and grandiose about how they lived their life. He was a very simple man. He was a very family oriented man. He loved to give, like we said, give money away as much as he could.

And that was really instilled in me is a healthy dose of humility, a healthy dose of giving back, and then, uh, a healthy dose of understanding that you're not as smart as you think you are. Those are probably the main key components. I'm trying to think what else. Not say those are the main three. 

Austin Gray: Sounds like an incredible man.

Steven Nash: Yeah, he was a good guy, but he was, uh, like you said, there was, my cousin tells this story. He's a very honest, assuming guy. He walked in, wanted to thank, he was very cost conscious. He's very cost conscious. He put money, so he always used to say he didn't want any of his executives. He thought it was very important to build a, a connection with his executive team.

So he didn't want any executives. Far away from home for too long. He had a couple corporate jets and that they had on the business, and the executives would fly there, they'd fly right back. Him personally, he didn't love to fly private all the time. He thought it was excessive. He drove like a 10 or 15-year-old Cadillac and 15, 20-year-old sweaters. Very famous. Colorful sweaters. 

That's just how we rolled. And you say, we've got all this money. You don't need to do this. But in some ways, in order to get to that point, you need to have that in your ethos. Spend money on the right stuff. Spend money in the growth on your key employees on building a big business and save money on the areas that are important, how old your car is, what you look like, what tip of watch or wearing things like that that aren't important to you or your business or your family. And then the last thing is just always take your time to spend time with family. From my understanding that he was always home for dinner.

Austin Gray: That's a good reminder right there. For a lot of people listening to this, 'cause I've fallen into that trap multiple times. Building this business, it's so easy to miss dinner, miss bath time with your kids whenever they're young, man, those are the things we can't get back.

Steven Nash: Yeah. Ul, ultimately, what are you doing it for, for the creator, for your family? You get caught up in growth mode or that the customers are the most important issue and then ultimately you're not getting your priorities right. 

Austin Gray: What do you think motivated him? 

Steven Nash: He was a very ambitious guy, so he definitely wanted to be very successful. I remember he told me one of his main goals is he wanted make more money than the Ford Company, and he did one year, I think 2006, 2007. He made more money than the Ford Company. Then ultimately just family and faith. He was a very faith driven man. He gave a lot of money away to charity, a lot of money away to churches.

Uh, most recently, the Family Foundation is a poverty focused mission. They give a lot of money away to underprivileged people. So I think he was very motivated by, by helping others. Obviously his family as well. He had a huge family. So I would say about 14 miles to feed. You gotta build a pretty big business, but I think those are gonna be ultimate, most powerful motivators.

This is a potentially unpopular opinion, but I think the most successful operators tend to be married. You just have a purpose stronger than ambition or greed or whatever it is that you're trying to satisfy your own ego, right? You've got a family and people other than yourselves to provide for, for all you guys out there who are single, get married, get a good, nice, supportive wife, and you'll go further in business 

Austin Gray: And make a commitment to her. That is the single most driving factor in my life right now. Yeah, I am. 

‍Steven Nash: Yeah. No, it's a commitment. You're making a commitment and that says something about you and about the business. A hundred percent. Too much. Many people are so wishy-washy nowadays. They don't wanna make a commitment to anything. I wanna wait until I'm 35, 40, whatever. What are you waiting for? Make a commitment. Stick with it and build a life together. I feel like people wanna build lives separately, and then I wanna get my wife on. I've got all this and this. For what? For why? So much more fun to build it together too, is like we see a lot of times the wives per summer business, they'll be the bookkeepers, the account.

Then they'll eventually go themselves out of the business. It's a free employee for you guys if you get a nice wife. 

Austin Gray: And just having a life partner who supports you is incredible. Yeah, my wife is listening to this. Shout out to you 'cause I'm very thankful for you and it's been a lot of ups and downs the last seven or eight years. Business, marriage, all that stuff. But we've made a commitment and I can tell you on the other side of working through tough stuff is just an incredible partnership. And then having kids together. I can't tell you how much motivation has come from that. Do you have kids? 

Steven Nash: One on the way.

Austin Gray: Congratulations. 

Steven Nash: No, even just the sensation of finding out my wife is pregnant, like that sense of drive and purpose just got way stronger. It's hard to put a number on it, but you can definitely feel it. Anybody else can definitely feel it. You're not doing it for just you anymore. You're doing it for you, your daughter, your family, everybody. 

Austin Gray: And that sense of purpose is second to none, in my opinion. Mm-hmm. Yeah. The drive that comes from it is incredible. Congratulations on. The upcoming kid, when is she due? 

Steven Nash: September 4th. 

Austin Gray: September 4th. Congratulations and good luck, Steven. 

Steven Nash: Thank you so much for taking time this morning. Thank you for having me. This was a blast. Next time, I'd love to be the one asking you the questions. Obviously you gotta killer business yourself. I'd love to learn more about that. 

Austin Gray: I don't know if we can say killer yet. I'm just doing the best I can over here and I can't take all the credit I truly believe, and if any of my team is listening to this, I'm not just saying this like I have people on our team who are better than me at those tasks, and I feel so blessed and fortunate. And I'm just thankful that the good Lord allowed me to acknowledge that they were better than me. 'cause I think it's so easy as an owner and as an operator to get caught up in. No, I'm the one in the machine. I'm the one running the field, I'm the one doing the sales. And for whatever reason, I've crossed paths with other people who are incredible at what they do.

And so I definitely cannot take credit for where we're at. There's a lot of work that's gone in from other people than me. And at this point. We talk about it all the time, like we, we think the world's at our fingertips and we can go accomplish anything, especially with a team. And so I'll go back to that time in, timeout, just like sports. 

Austin Gray: This episode is brought to you by dialedin bookkeeping. Ben and his team provide bookkeeping services, job costing reports, and accurate financial information for the home services industry. If you're looking to keep your books up to date, visit dialedinbookkeeping.com/owr ops. When you use this specific landing page, you'll get your first three months 50% off. 

Austin Gray: The best teams are the ones that win. Yep. It's not about just one person. It's not about one quarterback or it's not about one coach. It's not about one running back. It's like the teams that win championships are the ones who focus on working together as a team. And I truly believe, like I've got some incredible teammates and that's why we are where we are, and that's why I truly believe we can hit the goals that we've set. 

Steven Nash: If you want to go quickly, go alone. If you want to go far, go together. 

Austin Gray: Good stuff. Let's wrap it up on that one. Steven, anything else that you'd like to share with the listeners?

Steven Nash: No, just thank you for having me on. What a wonderful time and a cool podcast you built. Happy to be part of it. Thanks so much. 

Austin Gray: All right, thanks. And where can people find you online? 

Steven Nash: Just on Twitter. Just ask Stephen Pulte fan. 

Austin Gray: All right. Fantastic. Listeners, PMs are up and anybody, just send me up any business questions or anything that always happens to help out. Cool. Cool. Thanks listeners. Thanks again for listening to another episode of the OWNR OPS podcast where we talk about growing local service-based businesses. Every week we drop episodes on Fridays. On Apple, Spotify, and YouTube. So if you have not yet, we would love if you would go and subscribe to the YouTube channel.

And if you are enjoying this content, we would sure appreciate a five star review on Spotify and Apple Podcast. Finally, we summarize the main learning lessons from this podcast and we send that to you in a weekly newsletter on Saturday mornings. So if you haven't subscribed for that, you can go. Owner ops.com/newsletter. That's ownrops.com/newsletter. 

And then finally, the most recent thing that we've been working on is launching a school group. For those of you who don't know what school is, it's basically a platform that allows people to connect and it also allows us to add video resources there for trainings that will help you build a local service business. We have a free group, that's school.com, skool.com/ownrops O-W-N-R-O-P-S.

We will see you all in the next episode. Don't forget, work hard, do your best. Never settle for less.

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