Momentum Podcast: 894
What No One Tells You About Growing a Team
by Alex Charfen
As entrepreneurs when our business starts growing it’s easy for us to want to grow our team along with it. But in the long run this can damage your business by creating overwhelm and frustration with you and your team. In this episode Alex talks about his mistakes in the past and how they affected him and his team.
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Full Audio Transcript
This is the Momentum podcast.
I'm 51 years old and I've run, I don't know, probably a dozen million dollar plus companies and a few eight figure plus companies. And this episode is a message to my 20 year old self. When I was moving from California to Florida, I was starting a business called Sales Out. I was in that place that so many of us are as entrepreneurs, where I was overwhelmed, couldn't do everything just completely at my maximum capacity. And I started hiring a team. I made every mistake you can make. And then this episode, I want to share three of the biggest that held me back, broke me down, stop my business from growing, and took me from being in incredible shape when I was 20, starting my business at 21 to being 300 pounds and on five prescription drugs and literally dying by the time I was 30. I want you to avoid these issues, and this episode is going to show you not only how to avoid them, but how to do things the way that take care of you, take care of the company, and help you go out and make the biggest impact and of course, the biggest income possible.
I'm Alex Charfen and this is the Momentum podcast. Made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers, and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny. We define it. We don't understand defeat because you only lose if you stop and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future. And instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution. And we always will be.
Like I said in the intro, this episode is to my 20 year old self and moving from California to Florida, going into this business called sales out. Opening a consultancy, just to give you an idea of, you know, where I was. I grew up in a family business, and I had watched my father run a company, a business that really never grew. My dad stayed in the role he was in. He was, I wouldn't even say, elegantly self-employed. He was just self-employed. Being self-employed is just having a job. And that was my example growing up. And as a result, I made a lot of mistakes when I started growing my business sales out. I'll give you just the quick scenario. So I was 21 years old. I partnered with another company in Florida called Follow Organization. Richard Thor became a good friend of mine, and I started a company called Sales Out. And the first account I ever got was Fuji Media. We actually ended up working with Fuji Media on the tapes and storage and memory side, and on the digital camera side, our firm actually introduced the first digital cameras into the United States. That's how old I am. So everybody can laugh now. And as I was growing that business, I started getting overwhelmed. We got Fuji, we got another company, we brought on a bunch of other manufacturers. We were doing a lot of business, and at the beginning it was just me. And as things got busy and as things got overwhelming, I examined the business and I said, okay, what do I need help? So I hired a salesperson in Tampa, and then I brought on a salesperson in Miami, and I brought in another person in Latin America. And I kept looking at, you know, what are the functions of the business that I need to get covered because I'm so overwhelmed that I'm doing this myself. And then the business grew more, and I would bring on another salesperson or a territory manager or a country manager in Latin America. And I started building this team. You know, it started with just a few people and it ended up being dozens.
But here's the mistakes I made, and this is why it almost killed me. And I can tell you from experience of coaching in the last 14 years or 13 years since 2011 when we've been coaching operational systems, and prior to that, when we were coaching businesses. These are the mistakes that almost everybody makes. So the first mistake that I made was I never looked at what I was doing, and I never understood what my time was being spent on. So when I would hire someone, often they would take over a function in the business or expand something in the business. But what didn't happen was I didn't get my time back in. The entire time I owned that business, I just worked harder. I just worked more. I worked every single day. There was a couple of years where I literally worked 365 days a year. My birthday, Christmas, Easter, the whole thing. I was on a computer somewhere, maybe not working eight hour days or ten hour days, but my normal work schedule was about 12 to 13 hours a day. Weekends were probably 6 to 8, maybe more. If there was stuff to do and holidays, I might take a day off and only work, you know, 4 to 6 hours or maybe 4 to 8 hours. And it was brutal. I thought I was having fun. I thought I was, you know, having this exciting growth of a business. But when I look at it now, I know I was in a place of daily overwhelm, too much tactical responsibility, and I didn't know how to get the help I needed.
And so what we coach people to do now and what you can do right now, in fact, you can go to our Facebook group called Simple Operations Operating Your business just got simple. And there's training in that group called How to Hire an Assistant. And it goes through what I should have done and what I should have done is done. A time study written down everything that I did in 15 minute increments for two weeks. Then I would have had data about where I was spending my time, and then I would have understand that there was a bunch of tactical, non-strategic, easy things that I was doing, easy to delegate, things that I was doing that I could have gone out and getting help with and gotten help with. And so what I did in that business was I hired a whole bunch of people that expanded the company. I never hired anyone. To make my life easier. I kept hiring for the business, not for me. I kept hiring for what I thought the company needed, not what I needed. And that was a huge mistake. Because what I know now, and what I convince entrepreneurs have on a daily basis, that you are the most important person in the company. The more help you get, the more protection you get, the more support you get, the more time and space you have to build a company that you actually want. And I was in such an overwhelmed state. I was hustling, I was running, I was growing this business and it did well. I want to be very clear. I did well over the course of ten years. We got up to about, I think our biggest year was $270 million in sales. It was a multi-million dollar company. I was doing extraordinarily well, much better than my peers. But I was hustling, I was running, I was overwhelmed. I was building this company. I was just putting out fires and making sure the trains ran on time every day. And here's what happened. I built it for a decade. I built it to the largest company of its kind in Florida and Latin America. We won awards. We got bonuses. We were super well known. If somebody was coming into our territory, they were talking to us like we were that company.
And at 30 years old, I met Cadey. We met and it was electric and incredible. And the night I met her, I knew I was going to marry her. We talked on the phone for about six weeks. She came out to visit me the first night that she was with me. We had this conversation where, after talking on the phone for six weeks and being as close as we were and understanding who we were and knowing where we had been, I asked her to marry me and she said yes. So we had a secret engagement from the first night that we were together. After the night that we met, that's how intense and how extraordinary and how exciting our relationship is. And I still love her more than anything in the world. She is my everything. And when I met her, I looked at this company I was running, and I was traveling 70 to 90% of the time. Like I said, my hours were ridiculous. I was overwhelmed and I had this choice. Do I want to keep doing this, or do I actually want to have a relationship with Katie because it feels like the biggest opportunity of my life. And in a moment, I decided to get out of the company. I didn't like it. I didn't want to do it anymore. And this moment of clarity that it wasn't even fun anymore. I was just working the work. I had this huge organization where I was self-employed and I had very little help. And so I quickly sold all the contracts, got out of the business and stopped doing what I was doing. And these days I see entrepreneurs do this all the time. We run full force, hustling our heads off, going after a direction, going in and a number going and a multiplier going at a profit number, a top line number, whatever it is. And so many entrepreneurs these days are waking up, looking up and saying, Holy crap, this is where I want to be. I've hustled my way into a corner. Into a prison. Into a box of my own making. And I did that. I don't want to see you do that. Get help for yourself while you get help for the company.
Now, the second issue that I had, and this is a big one, is that I was young. I didn't understand that if I put process and structure in place, if I put reporting systems in place, I could do the most important thing in employing people. And what is the most important thing? Trust them. I didn't trust my team. You know, part of that was conditioning from my father. He used to talk about how everybody's going to rip you off, and everybody's going to take money from you. My dad had a really challenging experience in his life, a lot of trauma, and so he imposed a lot of that on me. He projected a lot of that on me. And so when I had the team and especially, you know, when I first started out, I was constantly thinking that I was going to get taken advantage of, that people didn't want to help me. They just wanted to take my money. And I didn't transfer responsibility as a result. And so what happened? What would happen is I'd give somebody a project, and then I would remain tethered to that project rather than letting them execute. I'd be checking in on it. I'd be asking him about it, I'd be following up on it. And what ended up happening was I would give someone a project. Then I would be so involved on the periphery that I basically ran the project to conclusion without really managing the project, just doing it from the sidelines. And so any project that was in the company I was managing, I was running, I was making the decisions. And as the company grew, I was making so many decisions that I wasn't making good ones a lot of the time.
And so the second lesson that I learned was to transfer responsibility. This took a while, but what that looks like is instead of saying, here's the project I want you to do, you say, here's the project and here's the result. And if you have issues, I want you to come and let's talk about it. I'll coach, I'll help, I'll support, but I'm not going to do it. And I'm not going to make all the decisions. When you transfer responsibility, you allow someone else to make decisions. Feel the weight of those decisions. See the result of those decisions. Learn from it and do better the next time. And that's an equation that you can do over and over and over again. And your team gets better at making decisions. Each person gets better at making decisions. You now have decision making capacity on the team. It's not just you. This is one of the biggest issues in running a small business is decision making fatigue. As the person running the business, you are almost always in a constant state of making decisions. When you transfer responsibility for an outcome and you let a person make decisions, you get out of that project and you start empowering your team to be the drivers of the growth of the company. And this changes everything, because then you're not the only driver. You can only do so much. You only have so much capacity. I mean, I don't even like to admit that, but it's true for me. I only have so much capacity. I've seen it over and over again in my business career. But when I empower others to make decisions, I multiply that capacity. When I have an entire executive team that is making decisions, I have exponentially more capacity for myself and the company has more decision making capacity. This is everything in a company where it's run by a visionary like me, so I don't have to do everything. And then the pace of the company is faster, the growth of the company is faster, the resolution issues are far faster because they're not all filtering through me or filtering through you.
Now, the last big mistake that I made, man, this one was huge in that business for a decade, with offices in Latin America with offices in the US. At one point we were serving like 40 different manufacturers. We were meeting with companies like RadioShack and Walmart and Office Depot and OfficeMax and a whole bunch of stores that were closed these days. We also did business with RadioShack and, you know, huge organizations. And the entire time I ran that company, I never got any personal hub. I didn't have an assistant. I didn't have somebody who was helping me with my stuff. I didn't have somebody who was helping me with my calendar, my email, with anything like that. In fact, it was recommended to me more than once that I hire an assistant, hire somebody who can help me. And I would always think I can't afford it. I was making so much money. When I look back now, I'm like, I had such a scarcity mindset. And I'm like, no, I can't hire somebody to help me. I'll hire people to help the company, and then I'll do all the rest so that the money's here. I could have hired an assistant with a small fraction of the profitability of that business every month, and it would have changed my life. I could have empowered that assistant to become an operator, to manage our calendar, to set up all our meetings with the team, to drive the meetings with the team, to follow up on projects, to make sure things are getting done, to make sure the team has all the resources they need to make sure there is nothing falling through the cracks. And that person would have loved doing it. And I couldn't stand any of those things. They wore me down. They broke me down. They made me frustrated, I got triggered, I was angry all the time. I had trouble sleeping. I was an insomniac. I had leaky gut. I had blood in my stool. Like that's how bad things got. And I look back now and I'm like, oh, if I just understood that bringing somebody in a relatively low expense to help me with all the things that were overwhelming me. Would have changed the entire game. I think it would change the way I built the business. I know it would have changed the way I felt about it. I know it would have changed how I reacted to people and how I acted on a day to day basis. I know what my nervous system would have been, a lot less triggered and a lot more grounded. And those two things, having a nervous system that is grounded and less triggered will, in and of themselves, help you make better decisions and move your life forward in a more dynamic and congruent and aligned way. I didn't have that. So I built a massive company that I threw away because I didn't want it, and I didn't want to go through the time to sell it.
And so if you're an entrepreneur, here's the truth about building teams. Number one: get data. And understand where you need help. Two: once you know, transfer responsibility, don't stay tethered to every project. Give people outcomes and tell them that you'll help them if needed. And let them go through the process of understanding the project. Executing. Understanding what happened and then doing better the next time. And then the last thing. Get help yourself in the form of an operator. You hire an assistant. An assistant who's operationally minded can become the operator for a small company. If you have a larger company, you might need somebody who's not an assistant, who has a little more experience. But, you know, in our membership, we've had $10 million companies run by operators who have had no previous experience, so they just have the right mindset. And had I done these things, I think my 20s would have been a completely different life experience. I look back at those times and I think of, you know, there were some fun events. There were some really amazing meetings and times together and building big things and selling huge deals and going on Home Shopping Network and doing millions of dollars in a day. Like all of those things. I look back and I think, man, those were really fun. But if I'm honest with myself. Most of the time I ran that company. I remember pain. I remember being overwhelmed. I remember feeling like everybody around me thought I was such a great success, and I knew I was a failure. It didn't matter how much money I made. I felt like a failure. I felt like a failure because I couldn't breathe. I felt like a failure because it felt like the world was caving in on me every single day. I felt like a failure because I didn't feel successful. Because my life was so difficult.
I always say with entrepreneurs, if your days are getting tactically harder, you're building a house of cards. And here's what I mean by that. If you're the person running the business, the visionary in the business, and each day you are doing more tactically, each day you are becoming a bigger and bigger liability to the business than that company I ran in my 20s. I can unequivocally, unequivocally tell you I was the biggest liability in that company. I touched everything. I saw everything. I overwhelmed myself with everything. Had I done it differently? I think my life would have been completely different because the companies I've run since then, I do exactly what I've told you. I've always had an assistant. I delegate outcomes and transfer responsibility. And I've always had an operator that does something. And I hire people into the company to take things off of my plate so that I'm not overwhelmed. If you do these things, you can grow a company that actually gives you what we all say we want as entrepreneurs. You ask a roomful of entrepreneurs, why did you get into this? One of the first answers that comes up is freedom. Then you put a roomful of entrepreneurs and businesses, and we work in a way that looks like we want anything but freedom. If you really want time and space and spaciousness and the freedom you got into this in the first place, for this is exactly how you get there. And I want to wish you the best of luck. And I want you to know I am in your corner.
If you're interested in understanding how to run your business in far less time than it's ever taken you. We have a concept similar to Tim Ferriss' four hour workweek. We have the 40 hour year. In fact, it was really cool. I shared that often, and somebody sent me a message and said, hey, this is just like Tim Ferriss. His four hour workweek, only more realistic. Like, that's awesome that we have a concept he called the 40 hour year where as a business owner, you can run a company in 40 hours a year, and the person thought it was more realistic than the four hour workweek, which was exciting for me. You can check out the 40 hour year framework and an explanation of how you can get there, and all the information you need to understand it at the number four zero hour a year.com. 40houryear.com. I'd love for you to check it out and see a completely different vision of how you can run a business, not a business. It overwhelms you, not a business that takes over your life. Not a business. It creates so much noise you end up like I did, but a business that you run so that you can actually create the life you want. 40houryear.com. Thanks for being here with me today. Thanks for being a podcast listener, I love you, I appreciate you, and I look forward to talking to you on the next episode.