Entrepreneurial Empire
Learn the fundamentals of where you are in business and how to scale with your host Jacqueline. Your business will go through many stages, and every stage will have it's own set of requirements. Let's unravel the journey ahead together and find strategic solutions that will help you conquer it all.
Entrepreneurial Empire
🚀 Empire Architect: Chuck Roberts
Gear up for an entrepreneurial rollercoaster ride with our guest, Chuck Roberts, a true titan of the business world, who built an empire from the ground up. Get ready to get your minds blown away as Chuck, the maestro of mergers and acquisitions, reveals his journey from a humble paperboy to a fearless loan agent. This maverick didn't just stop there; he founded Prime Credit Report and saw it to a successful exit in less than two years.
Peek into the corporate world as Chuck unfolds the gritty details of entrepreneurship, sales, and business development. His inspiring chronicle covers the highs and lows, the negotiations, and the ultimate decision to walk away from a tempting offer to forge his own path. We delve into his strategic approach to starting and scaling a business. Chuck's secret? Investing in the right people and technology, meticulous attention to user experience, and the ability to turn adversity into opportunity.
Finally, we dissect the leadership qualities and tactics that enabled Chuck to steer his company through hard times. Steeped in wisdom, Chuck shares his experience of maintaining a business during a downturn and the art of transforming a failing production facility into a profitable venture. Tune in as he emphasizes the importance of networking and helping others, a philosophy that not only fosters goodwill but also fuels repeat business and referrals. This is a one-of-a-kind episode that truly encapsulates the trials and triumphs of a self-made entrepreneur.
Welcome to the Entrepreneurial Empire Podcast. This is the place where you can find business and career strategies, techniques and real-life success journeys of individuals who have built businesses to the million-dollar revenue mark and beyond. I'm Jaclyn Hernandez, life Coach and Business Development Consultant. I have worked with startups, fortune 100 companies, network marketing, direct sales organizations, churches, nonprofits and government agencies all to become the authority experts in their industry, lead with people and scale their revenue. Let's get started. Welcome back, entrepreneurs and empire builders.
Speaker 1:Today we are privileged to host a true visionary, a driving force in mergers and acquisitions and a seasoned serial entrepreneur. As the mergers and acquisitions director at Greenstein, rogoff and Olsen, his influence is boundless. He recently orchestrated a significant $1.2 million merger. Yes, I said that right, but his journey is more than just corporate success. It's an entrepreneurial saga. Since the age of 16, he's ignited numerous ventures, elevating everybody around him. He founded Prime Credit Report, selling it to a Fortune 500 company in a mere 18 months of being in business. He also was the owner of a food equipment manufacturing and marketing company in Pleasant in California, guiding it to a remarkable sell. Our guest today is an industry shaper, mentor and empire builder. So turn up the volume and prepare to be captivated by this journey of a true fire starter. Please welcome Chuck Roberts. How are you doing today, chuck?
Speaker 2:Great thanks.
Speaker 1:Awesome. Well, I'm so glad to have you here with us today for our audience to hear your incredible story. I know that you heard our episode I believe it was episode three with Alan Olsen. He kind of mentions this famous first client that he had and you are the first client that he had that he was talking about in that episode. So excited to have you here. Are you ready?
Speaker 2:Jacqueline, I'm ready Ask whatever questions you want.
Speaker 1:Awesome. So I know you have been an entrepreneur since 16 years old. I mean, that is very young and I feel like a lot of entrepreneurs that I talk to. They say I was an entrepreneur since birth, you know, from a very young age, and they've done things in their teenage years that kind of promoted those, those talents and those skills and started to develop them. What was the talent and skills that you were developing at 16 years old?
Speaker 2:That's a good question. I don't think. I think the line between someone involved in business development or sales and entrepreneurs is pretty thin line. So I start off, like a lot of people, as a paper boy, and I learned quickly that I was allowed to bring in new people up for my route, and so I just started working in the neighborhood and signing them up. Not only did my paycheck go up, but you would get a bonus, and a buddy of mine he is. You know. This is back. That was back when I was in elementary school.
Speaker 2:In junior high I met a buddy. His dad owned a crew that would go around selling newspaper subscriptions door to door, and I found I made a lot more money doing that than being a paper boy. And, interestingly enough, years later he was the best man at my wedding. I was the best man at his wedding, so it was a really good relationship and so I did sales. And then later on I got this idea. I liked working with leather, so I started making purses and selling them, and my mom was our first client and a buddy would help me and between the two of us we would make these purses. Now I never paid him anything and I would ask him do you want half the money? No, no, this is fun. But I realized, though I was making money, it wasn't sustainable. So I got a regular job in junior high. I worked at a local store and selling newspaper subscriptions you got once you get in high school. That's a little bit embarrassing, I don't want to do that. So I then just got a regular job at a local store and that was fun. And then my father is a mechanic, or wasn't? He's passed away. He's a great guy. He was a mechanic for United Airlines, so I could fly to Hawaii and back and all I had to do is pay for the taxes, which was 20 bucks. So I couldn't understand why my younger brother wouldn't go with me. But I would fly to Hawaii and back for the weekend.
Speaker 2:And I inadvertently found a really inexpensive place this day and I just loved it. And I watched people walk around Pukashel's. People were buying Pukashel's and all these other necklaces like crazy. So I got this idea I wonder if I could. And I asked the local stand that sells them. I asked them where do you buy your sales? Oh, you talk to so-and-so. And I went to so-and-so oh, you got to talk to so-and-so.
Speaker 2:I worked my way up to change. So I got to the wholesale distributor and I said would you sell it to me if I wanted to take him to mainland? And he said I'd love to. Now I figured out he was just buying from someone in the Philippines. But I didn't know where in the Philippines and I didn't feel comfortable as a high school kid to go to the Philippines and do what I did in Hawaii the working backwards. So I could buy them cheap enough from this guy and he was a wholesale distributor. It just he wasn't the source.
Speaker 2:So I bought some product, I brought it back to the mainland and I started selling jewelry door to door, all the little shops, and I made money, but not a lot. And I realized that you know, dad wants me to constrict more on schooling and he is the source of these tickets to Hawaii, so I don't want to jeopardize that. So I stopped selling jewelry, started going to school and then the same buddy that got me into selling newspaper subscriptions door to door was now working for a mortgage company and he says it is so fun, you're selling money and you know so. At 19, I became a loan agent for a yield mortgage company and he and I, why Wow?
Speaker 1:that's impressive. At 19 years old, you were that motivated.
Speaker 2:Yeah, yeah, yeah. I attribute that to the fact that I grew up in a lower middle class family. My mom didn't work. We never wanted for anything, but the answer to a lot of questions was no, we don't have the money. So money became probably more important to me than it should have early in my life, and I just wanted to be able to have enough. And now that I'm older and wiser, we had plenty of money. My parents were just very frugal and, again, that's a good way to be. So I went to work for this mortgage company and I loved it. Now, keep in mind, back in the early 80s it was a different world than is now. Interest rates skyrocketed. We had interest rates as high as first mortgage interest rates, interest rates as high as 21%.
Speaker 1:Oh my gosh, no and every one of us developed their interest rates today.
Speaker 2:Oh, I know, I know I laugh. So here I am, a 20 year old giving seminars in real estate offices to how to do what's called a wrap around mortgage. And you assume the first mortgage, which is usually at a reasonable, you know, two, three, four, five percent. You take the new money at this absorbently high rate, but you do it. You package them in such a way that the overall rate is less than half what you could be paying if you just got a first mortgage and enabled us to close some loans.
Speaker 1:Then after that.
Speaker 2:I did that for about three years and it was fascinating because not only did I learn first mortgages, but that same friend his father opened a company doing second mortgages. So they recruited me and I went to work for them as well, and in that position I did both. I sold loans, but I also brought in investors and it was a really good education. And that first mortgage company I ever worked for, the boss, told me something that was very, very valuable. He says you need two things for a good loan you need collateral and the ability to repay. Everything else is just compliance, just dotting eyes and crossing teeth. If you have those two things, then you have a good loan. So I worked for my friend's second mortgage company and I was their first mortgage specialist, because I had done that for a couple of years Again, I think I was 21 at the time and then I wanted to do something completely different and I did.
Speaker 2:I wanted to be a missionary for my church, so I spent a little over a year down in South America, argentina to be precise. When I returned, I was fluent in Spanish, I could think in Spanish, I dreamt in Spanish. Now, when you come back to North America, or, and you were tummy-thot in Spanish too.
Speaker 2:Well, interestingly enough, argentina back then Argentina was 46% of all Argentinians were of Italian descent, so there's literally a pizza place on every corner. It's a very European country. They speak Spanish, but they speak it with what's called a ja. If you ever watch a novella that's from Argentina, you'll hear the ja. It's ja and ejos. It's not yo or ejos, but anyway.
Speaker 1:Okay, I'm going to have to look that up.
Speaker 2:Yeah, yeah, it's really interesting, and they say chao and say adios. So it's really cool experience. So I loved it. I came back. About nine days after I came back I met this beautiful young woman who was foolish enough to marry me and her parents thought the best thing to do is to go to school. So that's what I did, and while I was at school I called my buddy, who now owned his own company. We're both very entrepreneurial.
Speaker 2:Like I said, I think there's a thin line between people who do sales or business development and people who are entrepreneurs, because I think the mindset's very, very similar. But I do have to say a caveat. Sometimes salesmen have a bad reputation. They say, oh, he could sell ice to Eskimos. If you sell ice to Eskimos, you'll never have a repeat customer. A good business development person or a good salesman. He looks to see what really helps his clients and it may cost him a sell every now and then that he could have gotten if he was just more aggressive or thought more about himself or his commission. But what happens is when people realize you're just trying to help them, not just trying to sell them something, they are far more likely to refer you to a friend, they're far more likely to come back to you, even if you're more expensive, because your product won't always be the least expensive. That might get you in your foot in the door. But the repeat customer, that sustainable relationship, is because they know you, they like you and they trust you.
Speaker 1:And if you have those three things, yeah, have you ever had to turn a client away because you knew you weren't the right fit for them?
Speaker 2:Yes, many times In fact, when we'll get to? When I started Prime Credit Reports, that's when I was my most successful. Every single time the market would dip, I would let go anyone. We kept metrics on everything. I would let go those people who weren't producing well and I would keep those who were and then I would cross train them. So every time the industry picked up again, we were tied to the real estate industry. We didn't credit reports for mortgage companies and banks, we pulled from all the bureaus, deduced it and then supported it with customer service. So what I would do is cross train them and we would expand like crazy as soon as the market picked up.
Speaker 2:But when the real estate markets gets too hot, we maintain a one day turnaround time, when all my competitors with a two, three and sometimes four days turnaround time. Well, if you're a mortgage company, you need that information right away because you need to know if there's, if they qualify Exactly. If there's no change, you're wasting your time. All the paperwork that goes into a mortgage is just don't want to go down that road unless you have a pretty good idea that they can like.
Speaker 2:I had a boss once that told me two things for a good loan, collateral and ability to repay. And if you don't have ability to repay if you don't have, then it's so. If they don't have good credit and if they aren't going to be able to make the payments, you have to move on quickly or you're wasting your time. So what would happen is we would turn away clients because we still had a not clients but prospective new clients. We maintain a one day turnaround time. As soon as the word got out, we had people pounding on our door trying to come to work for us, come to buy our product, but we return them down because if we took on new clients at that point, we wouldn't be able to have a one day turnaround.
Speaker 2:Exactly. So what we did is we would start hiring people, just like our competitors. The difference is we would hire and train them and implement them, maintaining a one day turnaround time. So I would have to tell people I'm so sorry, I can't take you right now, but you're on our waiting list. And some would say, great, let me know when I'm on. Others would say, if you don't take me right now, we're done, I'm never going to use you. And I say that wouldn't be fair to the people who are ahead of you on the list or our clients, because we won't be able to maintain a one day turnaround time and 85% of the people who told me to get lost will never use you. As soon as their name came up on the list, we'd call them. They came on because they wanted that one day turnaround time and we usually kept them because if they would come back to me say, well, now everyone has a one day turnaround time and you're a dollar more, so our average cost was $30.
Speaker 2:So a dollar is not a lot, so I say, well, so-and-so is a dollar less and he'll lower it more. If I come back, I say do what you want, but you're going to go back on that waiting list the next time business picks up. So if you want to go to them and run that risk, that's your business. And very, very few left us and that's why we grew from zero, being the smallest it was called an RMCR, residential mortgage credit report the smallest provider in the Bay Area to the second largest.
Speaker 1:Now, this was your company that you started, correct.
Speaker 2:Yeah, traditional. So I worked for my friend, he and a buddy started it.
Speaker 1:The mortgage company first right, right, right.
Speaker 2:But he had started this residential mortgage credit reporting company on his own with a friend and I mean when I say alone, not with his dad. He did it on his own, he and his buddy, and they were successful. But before I went to work with them full time, when I got back from Argentina, I spent three days a week selling condominiums for a company that just built a big project. They just needed someone to know about mortgages and I did so. They hired me and I spent two days a week working for his company, just doing telemarketing, just dying for dollars, calling We've got these great RMCR reports, would you like one? And I said you know what I called this guy Back then. It was called home savings. They were the largest mortgage provider in the Bay Area and they said we can't handle their business. If they said, yes, chuck, they can't handle. So I suggested why don't I make an appointment with this guy that isn't interested? And you just say it's just for his one office, not the whole company, just that one office. And they said we could handle one office. So I make the appointment, they meet with them. These two guys are very dynamic. I just called, I didn't meet with people and, of course, they closed the deal because they're both very dynamic and that was the start. And so they went from being a very small provider to one of the big players in this area. Because of that, branch after branch found out about them and started using them.
Speaker 2:And so I'm at school and I'm hearing my friend tell me about how successful they are and I'm thinking, gosh, and how good it was that they're now in that particular company. I think, gosh, I should have negotiated for a commission. I told my wife, what if I worked for my friend in the summer because I won't be in school? Instead of keeping the part time job I had to work while I went to school. I worked at a bagel factory because I learned from past experience that if I have a commission job and I'm going to school, school suffers. It's just the way I and I think most people are wired. But anyway. So I call my buddy. He says Chuck would love to have you for the summer.
Speaker 2:So the gentleman that was in charge of all the sales got into a fist fight with my friend's partner a week before I arrived. So so the guy that was going to be my boss wasn't there anymore. And so in the movies fights are very they're all the same. Yeah, they put up the Dukes, you're not going to die. But real fights aren't like that. So they're rolling on the ground, grappling, screaming, cussing. People are yelling, women are screaming stop, it was pandemonium. I wasn't there, but I heard all these stories when I got there, because I got there a week after it happened, so it's still fresh in everyone's mind.
Speaker 2:But so I was doing a really good job for them and I said, chuck, at the end of the summer, if, if you were doing as well as you're doing now, we're going to make you a full time printer offer. And they did, and I stayed, and the amount they were paying me was equal to what a graduate in finance was what I was studying at the time. And so I talked to my wife and she said let's take the job. It's back close to her family. She wanted to be closer to them anyway. So it all worked out.
Speaker 2:So I worked for them for a couple of years and every year my commission would go up, my salary would go down. So at the beginning of the year I had to work really hard to get back to where I was, and then by the end of the year I was doing much better than I was the year before. So it was a win win. My compensation was was going up every year and it was good. But my friend and his partner decided to sell the company and they sold it to a firm in the East Coast. One was a, had a master's in from Yale, the other one from Harvard and the very impressive guys, and they had a new way of doing business and I just kept doing what I was doing and everything was fine. But a competitor offered me a job. Good, you're like management about.
Speaker 2:Well, no, no, no. What happened? Well interesting. So I go to the interview because it's a lot more money. I had to go to the interview. My friend is sold. My friend's not there, so I'm not betraying anyone that I'm really have a connection with. So I meet with the owner of this other company they're a little bit bigger, not a lot bigger, but a little bit bigger and there's a whiteboard with him at the top and then management and down at the bottom it lists grunts.
Speaker 1:Grunts, okay, grunts.
Speaker 2:I think I want to work for this guy.
Speaker 1:And that's where you were going to be the grunt.
Speaker 2:No, no, I would have been towards the top. I was interviewing for us towards the top and it would just be so. It'd be him, one other guy in me and then the rest of the management would be below me. But an employee came in to ask him a question. He said hey, can I just ask you a quick question? And he says what the f? Are you doing here? Can't you f-ing see I'm talking to someone? Get the f-ing out of here. He says I just have a quick question I need, before I can progress, Get the f-ing out. So between the grunts and that, there was no way I wanted to work with this guy, but it was a lot of money. So I go back to my current employer. I said Listen, this is the offer. You don't have to match it, but can you get close? I didn't tell him the story, I just shared with you.
Speaker 1:Yeah, no, that would not be negotiating power.
Speaker 2:No no, no. So they, they, they got close enough and there's about 80, 85% of what the other guy was going to give me and I said Great Sounds good. So we agreed to terms. I get the contract and the contracts less than what they promised. So I told my wife. So in negotiations you always have to be willing to walk away from the table, Otherwise you're starting from a disadvantage. So I talked to my wife and it's not worth the risk of going to work with that other guy. So I go ahead and I signed, even though it's not what they promised. But the funny thing happened is the market turned and it went crazy. So I'm now making more money than the general manager and they don't like it.
Speaker 1:Oh my gosh, because you're on commission too.
Speaker 2:That's right. They matched the other guys commission as well. So the they talk to general manager, talks to the owners and they tell me that they're going to renegotiate my contract. There's only three months left. They cannot do that. Well, I go into the office of one of my friends who is in operations and I said I'm leaving. When my friend Dan and his partner owned it, there was integrity, there was security. I knew what was going on. Now you keep no one safe, even if you have a contract, one the lie to you before they have these, sign it. And then two, even if you sign it, you're not safe. I said I'm going to go start up my own company. Will you come join me?
Speaker 1:Wow, that's ballsy, I have to say.
Speaker 2:Well, yes and no.
Speaker 1:And how old are you now at this time?
Speaker 2:I am 26. 26 years old, almost 27.
Speaker 1:Oh my gosh. And so this is when you go and start your own credit.
Speaker 2:Oh, I'm 28. I'm 28. Yeah, 28. I'm a company. She says Chuck. No, she says I hate this industry.
Speaker 1:Okay.
Speaker 2:She says I went out. She says it's so bad, I'm applying to be a 911 operator because that's better than this job.
Speaker 1:With 911, the chaos of 911 is better than credit reports, life and death.
Speaker 2:That's right. I said I tell you what she's amazing. Right, she's the only person I talk to. She's the only person that knows what I'm doing. I'm not even telling my friend because I don't want to put him in a position where he can't tell the new owners because he might have an original with them. So I said I tell you what. None of us are safe here, so I'm going to do it without you. But if I started before you find a new job, will you come to work for me and also I'll put two months of your salary this is what I'll pay you per month and I'll put that in a separate bank account. So even if it fails, you'll have two months of salary. So you have, from now to the time I open, plus two more months to find another job that you like. And she said, okay, I'll do that. And so I.
Speaker 2:From there, I made an appointment with a guy that had tried to buy into the company before they sold it to the two folks from the East Coast, and I said I'm gonna start company doing the exact same thing on my own. Are you interested in investing? And he says, maybe, how much you need? I said $50,000, which is really too low. But it's the first time I started a real company. All the other companies I had started really weren't real. This is a real company.
Speaker 2:So we, literally on an Atkin, we wrote out the terms 50 grand for so much money, so much percentage. Sorry, but we couldn't agree on the one thing he wanted 25% of the company. I wanted him to have 15% and we could. It was an impasse. Remember, you have to walk away from the table if you're in negotiations. So I walk away from the table. Everything else is fine.
Speaker 2:And I thought about it. I thought about it and I said you know what? So the one thing that all entrepreneurs have, in addition to being a cousin to a salesperson or a business development person, is they're not easily stopped. They either find they get to an obstacle. That's why they started a company. Someone else couldn't figure out how to do something and they did so. They either go around under or over. They smash through whatever the obstacle is. So I'm thinking how could I overcome it? And I come up this clever idea. So I call him up the next day. I said what if I give you 25% of the company but I have an option to buy 10% back if I give you $25,000.
Speaker 2:So he gets half his investment back 10%, so he ends up with the 15% I wanted him to have. He gets the 25% right up front and only giving me an option to get it back in two years, only if he gets half his money back.
Speaker 2:I thought that was a good deal for him and I thought he would say yes, and he did, and that's what we did. So I was profitable in about three and a half months. So the key to that is I went to people that I knew that I was already their salesperson for that I had a relationship with and most of them some of them came right on over, but most of them said we'll try you out. And because I had handpicked who my operations person was, I knew the quality was really good and we were outperforming the other firm. Years later the other firm tried to expand into other areas and else to be closed. So a cautionary tell, even though I was just a salesperson, you gotta treat your employees nice or you're in jeopardy of not having a business. So-.
Speaker 1:Now, do you think what made you guys so successful, also compared to your competitor, which is the employer that you were working with before, is it because they expanded and kind of spread themselves too thin, instead of really niching down and exploding that market that they were already in?
Speaker 2:No, they were A, they were absentee owners B the woman they had running.
Speaker 2:It was clearly not as nice a person as you might, because she got mad that the one year I was gonna make more money than her. It was unacceptable, even though I was doing really well and she had. I didn't tell you this, but I'll tell you now. She had told me, chuck, we should open up our own company someday. She gave me the idea to open up my own company and I said, yeah, that'd be great. And so she was sending me out to check out other software packages, enterprise software that would run our company. So I knew all the enterprise software and it became very apparent to me something she had said that she didn't know. I hear I could hear that she was just using me to get information on other software.
Speaker 1:Oh my gosh.
Speaker 2:So, as you can imagine, she wasn't the best person to work for. And so as soon as I started opening up, we had a ton of people from my own company call us, say I'll take a pay cut, hire me. So we had all these people that were my clients, willing to come to work for us, just give us a try. And all these people trained people that were willing to take a cut in compensation to come to work for us. So we were profitable.
Speaker 1:in about three, three and a half months we're break even and then profit you definitely had the experience in what you were doing, and so you knew you wanted to go out and create this on your own, because you were solving a problem that you were having and dealing with people that weren't treating you right or holding up to their promises. And, within that, when you asked for the 50,000, were you afraid or nervous that you weren't gonna be able to pay it back, or were you like no, I know I can make this back?
Speaker 2:I was terrified, but not of that. I was terrified because I had a wife and a child and it wasn't just me taking the risk. But to answer your earlier question, what made us better than other people is I could cherry pick the best people, so I had the best people coming to work for me and people from other firms doing the same thing would also want to come. Remember the guy, the grunts thing. We had people from him wanting to come work for us as well as you could imagine.
Speaker 2:So we had all these, so we had better people, but also I designed our form, every single. How can I let me back up a second? The largest company in the nation, doing what we did, had a form that wasn't very it wasn't a very good form but because Was it either friendly?
Speaker 2:It wasn't, and it wasn't intuitive at all, but it was what most people had seen in their career. So every other firm doing what I did would design their form to look like theirs. But what I did is I designed my form to look like the 10.03. That's the application everyone has to fill out to get a home loan.
Speaker 1:And a mortgage, yeah.
Speaker 2:So that's right. So the name, the address, their salary, everything was right where they knew it would be, because they didn't have to learn my form. They already knew it. Yeah, so whenever you switch providers for information, you have to get used to reading whatever format they're delivering it in. Now everything's customizable now, but back then it wasn't. So the fact that my form, my report, looked just like the 10.03 application and every single person I looked at it for the first time liked it. There wasn't anything they had to figure it out.
Speaker 2:So, between having the good people well, three things Having good people, having a form that was very easy to switch to because everyone liked it. Not only was it more intuitive than my competitor's form, it was more intuitive than the form that they copied in the first place. So, and then the third thing was I put more money into the company, I invested in people, I invested in technology. We had really good everything. I had to make sure that, if we were the new guys, we didn't have any chinks in the armor. I was very, very diligent in terms of making sure our technology was not only what my competitors were using, but it was as safe or safer. So those three things really and it's hard to put. When you have a wife and a child and you're bootstrapping, you know it's really hard to put money back in it because you're tired of being poor. But that's why, when Alan tells that story about me, I had so much money to make because I didn't know what I was gonna use it for and I had self-disciplined myself, our family it took all of us actually to not spend more money than we needed to. So it was those three things that made us successful so fast. And then, when I branched out, I had a friend that did the same thing in Puerto Rico. I hired her and three employees and they were profitable in less than three months because they brought a ton of clients with them. And so I had a production facility in Fremont, California, and that's in the San Francisco Bay Area, and then also one in Puerto Rico, and it just went gangbusters because we just were very self-disciplined.
Speaker 2:And probably your clientele the people listening to your podcast need to know that most startups fail because they're just not successful. They don't sell enough product or they don't bring enough revenue in. But what they don't realize is a lot of times small businesses fail because they're too successful. What happens is your bills all come due in 30 days, but all your receivables come in in 60 to 90 days, Because you're new. They'll get around to paying you and they get around to paying you. And what happens is if you get too leveraged, if you get behind paying your vendors, they stop giving you your product and you go out of business. And it happens very, very quickly. I was very lucky, my brother-in-law he helped me set up the books, so I shouldn't tell this story, but I will. I had two relatives.
Speaker 1:That's a good time.
Speaker 2:I had two relatives that were accountants. One said I'll set up all your books for you for 10% of your company. The other one said I'll set up all your books for you just because you're my brother-in-law.
Speaker 1:Yes, let's go with him.
Speaker 2:That's what I went for and then I ended up hiring him. He was my controller, but he was really really good. We lived for the first probably a year and a half. We lived in our float. So we had receivables, we knew, but they hadn't come yet. So we were writing checks for money and it's illegal to do this, but the Statue of Libertations, we lived in our float because we were writing checks, we knew by the time we mailed them and they got rived and they get cashed and then and then they cleared we would have Float allowed us to cross our fingers.
Speaker 2:Yeah, no, no really truly because it, and we had lots of small clients. It wasn't that we were one client centric, so the odds of of us getting hurt were really, really low. And what happened is the checks came in with fun and then we just grew and grew and grew, yeah.
Speaker 1:I want to hear, because this is the company that you sold, right? I?
Speaker 2:did and.
Speaker 1:It's so. It's a pretty big company. You sold it to somebody pretty big.
Speaker 2:Well, I sold it to a fortune 500 company. Yeah, it was so. For this I Mean we were only doing about two million a year. But in that industry only okay Well back then this goes back 30 years.
Speaker 1:$2 million a year at 28 years old.
Speaker 2:Well, we'll keep in mind our first full 12 calendar months. We did remember our product average price is 30 bucks our first full 12 months calendar month of a business. We we were. We did over a million dollars with a revenue. Wow second Year, two over 2 million. But what happened is the in real estate, where real estate very Depending on the real estate market. It goes up and down and I told you what we did was short downturns.
Speaker 2:Yeah stronger, but we hit a really long, a prolonged downturn, and I was a first-time employer. I had single parents working for me and, and though I ran the company very well, managed to growth very well. I made one flaw, and and in business, anyone who says otherwise is a liar. And when you're self-employed, hundreds, if not thousands, of things have to go right for you to be successful.
Speaker 2:Yes and it only takes one or two to go wrong for you to not be successful. I just couldn't bring myself to lay off employees. Remember we had already called all the employees. I was just marginal. We only had the best of the best employees.
Speaker 1:Um how do you get rid of any of them?
Speaker 2:Well, you ran out of money. You told the bank account does so. I had this huge war chest of money Because I'm not expanding now because there's there's hardly any business and it's going down and I'm not worried. But once we get about halfway down I start to worry. And I talked to my management, talked to my CPA, allen. He helped, he gave me invaluable advice. Now the story he tells when I told I want to start, my company says you can't, you have no money. That's actually 100% true. Go out and get some money. You got nothing and and and. So I went out and I got money. But he, that part of the story is 100% accurate. So I Start making plans. You know a deaf chart, you know what I want to do and when I get down to the third, you know I have 100% and I'm 50 now I'm worried. I get down to third and I have to lay off half of my boys and I'm devastated. I get choked up.
Speaker 2:I had this one receptionist. She wasn't married, she was pregnant and I made it very clear that I'll help them all. Go on Cobra so that if they need medical, because she needed medical insurance. The look of horror on her face was it got to me she was one of the people that were going to be late. So I broke everyone into two groups you stay here, you go into this room and then I laid them off and then they leave and then I bring the second group and I told them you're staying, and I got very reclaimed. But the funny thing is I get a little choked up even now. Think about it, because Almost every single person when they left the room that just got laid off, hug me and thank me.
Speaker 2:We, I Worked them. They work really hard because when you're growing so we were the only firm that did what we did, that had a swing shift. Oh wow, because we couldn't. Impressive Even. It was the only way we could keep our one day turnaround time, because we only had one day turnaround time. Only way we could keep our one day turnaround time because we only had so much office space. We had people busted we would have.
Speaker 2:We had a room. It was about 10 by 14. We had four people working in that room. Our partitions were four foot by four foot, inhumane by today's standards. We had so many packed people packed in there. We had no choice if we were going to continue to grow. So what I did is there is a realtor across the street that had this dungy little two offices that he never used. It was annexed. It wasn't even connected. He had his own separate door. He says, well, I was going to expand it but I never did because it's just so ugly in there. So I moved to the ugly place. And a lot of leadership is you lead by example, right? Yeah, I was the first one in and the last one to leave every day when I was in town or when I wasn't visiting clients.
Speaker 2:I just set that example so I made sure all managers were there. I just set that example so I made sure all managers knew what I was going to, because I wanted them to know. And then we put them in my office. When I first started, we had a bathroom in our office space.
Speaker 2:I did all the janitorial work and it's really interesting is because you know you have to and because, like, we couldn't afford to pay I had 50 grand, I couldn't afford to pay for a janitor. So here I am, the owner of the company, telling someone we have a sink. If you're done with your soda, please pour out the food. Put just just a cup in the trash can. So when we did hire a janitor finally, this is the best client I have everyone's trained so well. Everyone pours out the liquid. They only throw the empty cups. So yeah, so yeah, so yeah. It was a very interesting dilemma when someone is about to throw their cup half full of ice and they see the boss and then they get up and they go to the bathroom to empty the ice into the sink and then they throw the cup away. I love it.
Speaker 1:Okay. So I guess what it really takes is having the best of the best and then really investing into your company and then also really investing in developing your people is what it sounds like. What I heard you say a few times is development, that personal development for them and their skills. That's amazing. So then you went on and you sold the company. What did you sell for?
Speaker 2:Oh, I can't, I'm not saying that.
Speaker 2:I'll just say that if you have a company that's losing money every month and you're able to and we did a stock, I was I was retired for about 10 years after I sold it, but we did a stock swap, so I got their stock and and I could, after two years I could sell it, but they gave me a really good salary and I was as a fortune 500 company. I'm now senior VP of new products. It worked out really really well. No, no complaints at all. But what happened is being self-employed. I love my current job. I love my boss. You know we have a great relationship, but being self-employed is just better. So, even though I got this great job and I like it very much, I find out that I tried to keep the Puerto Rico part production facility out of the deal originally, but they wouldn't let me, so I had to include it.
Speaker 1:Oh.
Speaker 2:But I find out they don't like having an office in Puerto Rico. The person that's managing it finds it not very convenient. So I said well, you guys owe me X amount of money going forward and guarantee bonuses. Why don't we swap those bonuses for?
Speaker 1:and I'll take it back.
Speaker 2:Well, yeah, yeah. Well, entrepreneurs, if you have an idea, you find a way. You just that's it. That's the one key takeaway. What?
Speaker 1:did you say earlier Through it, you smash, through, you go around it, dig it, dig underneath it.
Speaker 2:Yeah, you try to be clever and you go around it if you can, or you go under over it or you smash through it. That's what you have to do, and sometimes it's just a question like it just takes some thought and creative thinking. Alan used the term critical thinking. Yeah, I have to. Okay, this is where I am, this is where I want to be. How do I get there? And what do I have to do to get there? And if I and you flip that around, if I want someone to buy my product, how do I make my product?
Speaker 2:I never said anything negative about any of my competitors. I always felt that if I had the best option for them remember, we go back to networking. When I network, I never try to sell it. I just ask them what can I do to help you? That's how I network. That's how I sell.
Speaker 2:If I think someone else's product, one of the things I do it for the firm here is I'm in charge of recruiting and if I'm talking to someone, I'm trying to recruit them and I think another firm is a better fit for them, I'll tell them and nine times out of 10, that person will refer a friend to me. Hey, you're thinking of getting a new job. Go talk to Chuck. He's a great guy. And if your idea of networking is helping other people, if your idea of selling is helping other people, then not only is it good for repeat business, it's really good for referrals. So that would be a key that you'd always you'd always want to do. But yeah, you just try to be the best for that person or that organization if you work for them.
Speaker 2:I bought Puerto Rico. I gave them my bonuses, they gave me the Puerto Rico production facility they had because they didn't like having it. They ignored it and it fell into disarray. I just went there and just kind of rearranged management got it back working efficiently and by then a new regime had taken over at the Fortune 500 company and they had purchased another company in Puerto Rico that would match really well with that one. So I sold it back to the company for a second time that I bought it from.
Speaker 1:You didn't even really technically you didn't buy it, because you just forfeited your bonuses right?
Speaker 2:Yeah, yeah, but I mean, I mean.
Speaker 1:You didn't have to give up any money, in a sense, but you bought money back. That's awesome.
Speaker 2:No, no, but it was. Yeah, yeah, it was. It was north of $25,000 that I gave them and bonuses that I did. That would have been cash coming to me and the bonuses could have been more than that, but that was what my guarantee was. So I gave them the guaranteed bonuses and they gave me the facility.
Speaker 1:Then you sold this Puerto Rico company back to them.
Speaker 2:Yeah, I fixed it up, sold it back and for almost as much as I sold the original company to them for.
Speaker 1:Okay. So I have to ask you, chuck, are you ever going to start another business again?
Speaker 2:So no, because well, maybe I don't know If, if if Alan ever fires me, I like my job, it's really fun and, as you can guess, I kind of tend to get attached to people and he pays me well and I like him and I like and I care about the people working for. So if I ever lose this job, I probably will. Yes, but I get that question quite a bit from family and friends.
Speaker 1:Well, maybe just for fun.
Speaker 2:Yeah, well, no, I work a lot of hours. So yeah, I work a lot of hours here. So there's not room and and. And the one thing that any of your listeners should know is I had a full time job and I decided to start my own business without telling my boss and because they were basically stabbing me in the back. That's really hard. Even with the 50,000, I would work during the day doing my job because I couldn't get fired, because I really needed the money, because I was about the bootstrap of a company from scratch. So I had to keep up my same standards where I was working. So I would work till two, three, four in the morning. Every night. The I had a friend. His name is Kyle, great man. He went on to really big things, but anyway, kyle was helping me set up my computers to start the company. It was a Saturday and he says dude, you don't look good. I said I don't feel good, my whole left side is tingling.
Speaker 1:Oh no.
Speaker 2:I think I should take you home. So I he drives me home. So it's what I'm saying. It's not easy. My wife called the doctor. The doctor says, from what you've told me it sounds like it's exhaustion. Have him sleep and call me when he wakes up to see, because I had a migraine First migraine I ever had. Light hurt my eyes, I couldn't see very well, my body was just shutting down. Because I've been doing this for weeks, I mean literally I would drive to LA Thursday night and meet with them in the morning. I would have half day off on Friday, really early in the morning, then drive back to Northern California to have my meetings. I was just burning the candle of both ends. I slept for, I think, 15 or 18 hours. There was a really long time.
Speaker 1:Wow.
Speaker 2:And I woke up feeling much better.
Speaker 1:Like okay, I'm ready to do that again.
Speaker 2:Yeah, I didn't know what day it was, I didn't know what time it was. I knew where I was. That was something. I guess. Sometimes when you travel a lot, when you're expanding, you don't know what hotel you're in. Where am I?
Speaker 1:But, yeah.
Speaker 2:So starting a business is not easy and it used to be fairly simple, but it's less simple now. My advice was use a payroll service. A lot of companies go out of business because they don't pay the payroll tax properly, and it's a real problem. So make sure you know exactly what you're providing to people so when you talk to them, you can tell them why you're helping them.
Speaker 2:And I was fortunate in that I found a couple of companies with bosses that were less than ideal that I could feel for each people from, and my average employee only made a couple of bucks more than minimum wage, and that was competitive.
Speaker 2:And very few people had to take a pay cut to come to work for me, but almost all of them offered to when they were coming from one of those two companies and my price was equal to everyone else's or within a dollar of it. So I never had to give a big discount. I never had to charge a big premium because I had the really. And the last thing I would say is concentrate on quality, because if you're building your company or your firm on quality, the time will come when you can charge a premium. Had I continued growing the way I was, I would have started charging a premium, because people would pay extra for the peace of mind if they're always going to get the kind of turnaround time that they need. A lot of entrepreneurs are afraid to charge more. It's okay if you have higher quality, you can charge more and you have to charge more.
Speaker 1:Why do you think they are afraid to charge more?
Speaker 2:Because the competitors are at. If I'm at 30, my competitors are at 29,. Most of my competitors lowered their fees to compete with me and it wasn't enough because I had quality. Some of them would go all the way down to 25. This is a true story, I'm not making this up. I had a new client. Tell me, chuck, you're not gonna believe what happened. I said what So-and-so from one of the two firms I told you about earlier. She walked into the office. They saw one of your reports and they said are you using them? Are you using Prime? And he said yeah, we're just trying them out. She burst into tears and walked out as she knew she was going to lose the account.
Speaker 2:And so build it on quality. It's very tempting to build it on price and we started off $2 less than everyone else. So we started off, but we were close right. We were only a couple of bucks less than everyone else, but because we weren't paying me, the top guy that we could afford it. But you have to build it on quality, otherwise someone else will always figure out a way to be cheaper. They'll cut a corner that you're not willing to cut and come in and undercut you in price and then your model no longer works and you're gonna lose client after client.
Speaker 2:But if you build it on quality, you always have a reason why they should use you over the other person. And if you've slowly raised your price over the years to account for that quality, then what you can do is you can open up and a lot of companies do this Like, a car company will have a very luxurious car right and that becomes successful. So then, like Tesla right, then they offer a cheaper model to compete with other people. Now you've got the cheaper model. That's the same price as the other cheaper model, but it has that name synonymous with quality.
Speaker 2:So if you start with quality, you have options down the road that people were trying to go the less expensive route. And if you've raised your prices that whole time, I mean you can't go crazy. You can price yourself out of the market. That's not hard to do. But as long as the amount extra they're paying is worth it to them for the amount of quality they're getting, then you have lots of options down the road to open up, sell another product that's cheaper. So those would be the advice points that I would give, and make sure your spouse support.
Speaker 1:Is on board.
Speaker 2:Yeah, my wife, it's hard, cause when you start a company, you're gone, you're committed 100%.
Speaker 1:And you have four kids so well.
Speaker 2:I do.
Speaker 1:They're not kids anymore, but at the time yeah Well, so I have four children.
Speaker 2:The oldest and youngest are biological, the two middle ones are adopted. We didn't think we'd ever have be able to have another child. My wife, she said the first day, first time, the first child she comes home she's wiped out. You know Families coming over you can tell second one, she's life at the party. Oh, you need more I'll give me. Go get you some more, I'm just anyway. She says, adopting is way better.
Speaker 1:Oh, recovery time is way better.
Speaker 2:Right. Right, so we're in Dnessers now. But you do become a work widow or widow-er depending on who's starting the company If you're the kind that you're a team or you work together. We had one child when I started the company. We had two very quickly thereafter. So because she had two children, she was your prototypical stay-home mom. We've been very, very blessed that way. But you just have to be prepared. There's no magic wand to make a company work. You don't just decide to be self-employed and rich one day. You have to provide a service that people want. You have to make sure they can find you. I had a book Wait.
Speaker 1:Chad, you don't just have an idea, and then it just becomes millions of dollars.
Speaker 2:Yeah, no, it doesn't Now. If you find a one, please let me know.
Speaker 1:You actually have to work with what's going on here.
Speaker 2:My friend that I've told you about that. We worked together so many different times. His business partner that started the company that kind of didn't do me right. He says it really makes me mad that people because they were successful and he says people say it's easy for you because you're self-employed he says wait a minute, it's easy now. He says it's really upset them. They weren't there for the times when you didn't have enough money to pay rent. You had to ask your landlord to be patient. They weren't there when you had to eat macaroni and cheese three days in a row because literally that's all you had and you had no money to go buy more. So it's easy to look at a successful entrepreneur or a successful business owner and think I want that and that's good. But they probably earned it and it takes a lot of hard work and my wife would have to bless any entrepreneurial endeavor I embark upon at this point. I'm not sure she's willing to do that. She likes things just the way they are at this point and I think-.
Speaker 2:Let's be quite happy, well, happy wife.
Speaker 1:Happy life. I can agree with that. Well, that is so awesome. So if you listening to this story, the biggest thing is, if you are an employer out there today, folks make sure your employees are happy, or they just might be your competitor and do things bigger and better. Thank you so much, chuck, for being on with us today. Is there anything that you want to leave us with, leave the audience with?
Speaker 2:No, just that. Both Alan and I have always been very impressed with you and every endeavor you're involved with, so keep up the great work. We really appreciate you and what you're doing and hope our paths cross again soon and often.
Speaker 1:Thank you so much, chuck. All right, everybody. That's it for today and we'll see you soon. Thank you so much for listening to the Entrepreneurial Empire podcast. If you enjoyed this episode, do me two solids Subscribe to the show so that you never miss an episode, and leave us a review so that others can find this life-changing content that we provide here. This show can be the very difference for someone you might know struggling in their business, and we need your help to bring us together. And thank you again for being a part of our entrepreneurial community and for tuning in each and every single week Until next time. Bye for now.