Scaling With People
Tired of spinning your startup wheels but never gaining traction? Buckle up, founders and CEOs, because this podcast is your rocket fuel to profitability! Every week, we ignite explosive conversations with bold-faced founders, brainy experts, and even a few out-of-this-world vendors. Get ready to crack the code on growth, master employee engagement, and blast through your scaling goals. We’re talking real-world strategies, actionable tips, and perspectives that’ll make your business do a cosmic dance. So, strap in and prepare for lift-off!
Scaling With People
The Business Blueprint: From Struggling to Scaling Successfully with James Brown
What truly separates struggling businesses from thriving ones? Is it just about having a great product or brilliant marketing? According to James Brown, retired attorney and business growth expert who scaled his law firm to $8 million annually with offices in four states, success comes down to mastering seven essential components found in every successful business.
This eye-opening conversation reveals how these building blocks create a framework for sustainable growth regardless of industry or company size. Brown walks us through his profound realization that "every business has the same seven working parts—the only thing that's different is what we sell." From defining clear personal income goals that inform your entire business plan to making data-driven decisions that prevent costly mistakes, this framework provides a comprehensive roadmap for scaling profitably.
Brown shares compelling stories from his experience working with over 450 businesses, including nearly hiring an unnecessary $75,000 attorney based on an emotional reaction rather than reviewing the actual data. He explains why maintaining proper financial ratios (like the "rule of thirds") is critical for profitability and how differentiating your marketing prevents the race-to-the-bottom price competition that kills margins. His example of the divorce attorney whose ad asked "Is he sleeping with her right now?" perfectly illustrates how breaking convention can dramatically improve results.
Whether you're just starting out or looking to take your established business to new heights, Brown's practical advice on escaping "the weeds" of day-to-day operations, avoiding emotional decision-making, and thinking bigger will transform your approach to business building. Ready for consistent 35-40% annual growth while maintaining profitability? The answers are waiting in this must-listen episode. Get James's free book "Top 10 Mistakes That Will Destroy Your Business" and schedule a complimentary 30-minute discovery call at businessacceleratorinstitute.com/scalingpeople.
Welcome everyone to today's Scaling with People podcast. I'm Guinevere Currie, your host and founder and CEO to Guide to HR. So what separates a struggling business from a thriving one? Is it the product, the marketing, the team, or is it something different, a formula for lasting success? Today, we're going to be diving into seven essential parts of every thriving business, the building blocks that keep the most successful companies running like a well-oiled machine. Whether you're a startup founder, a seasoned entrepreneur or dreaming of launching your own thing, this episode is packed with insights you need to grow and thrive, and that's when I'm so excited to announce I have James Brown on the call with me today to help us get through these 70 essentials. So, james, please introduce yourself to the audience.
Speaker 2:Thank you so much, guinevere. I'm glad to be here. So my name is James Brown. I'm a retired attorney. I've been building businesses for over 30 years.
Speaker 2:I had a very unorthodox path to becoming a lawyer, and you know I had to fight my way to get to a successful business owner and started my firm right out of law school and eventually built it to $8 million a year. We had offices in four different states. I didn't have any partners and it was just me and my wife when we got started. And so we, we, I when I first started looking at the business. At that point I'm 28 years old and I'm like, oh, it just is all jumbled together. I just need to get more right. I just want more right.
Speaker 2:Well, I didn't think about how this part of the business affects this part or how they you know everything relates together, and so I started looking at it, and one of the things that I had an epiphany on was that every business has the same seven working parts, and if you really step back and look at it, the only thing that's different is what we sell. So you have marketing, you have sales, you've got your factory to produce whatever it is you're selling. You've got your people to run the factory. You've got your physical plant whether that's virtual or brick and mortar. You've got your money plant whether that's virtual or brick and mortar. You've got your money and metrics. And then the last part is you, the business owner. So the only thing out of those seven that's different is what we sell.
Speaker 2:I sold legal services. A client of mine sells hard cider, another client sells dental services Right, but all the seven parts are the same, and so when I started my business, I had no clue about that, and so I knew I loved. Once that epiphany happened, I was able to piece together a business plan that covers all seven parts of the business and really gave me a roadmap of where I wanted to go. Right, and so that's the first place I ever start with. Business owners is what is your roadmap? Where are you wanting to go? And what I hear a lot of is oh, I just want more.
Speaker 1:More what.
Speaker 2:Right, more revenue. Ok, how much more revenue? How do you know how much more revenue if you don't know how much you personally want to make next year? Right? So we go through all of that One of the things.
Speaker 2:And since 2000, I sold my firm in 2014. I knew that practicing law was just my vehicle. I love building businesses, so I sold it to start working with small business owners, startups, to help them scale the business profitably and predictably. And since 2018, I've worked with over 450 business owners across different industries zero startup businesses all the way up to $50 million a year businesses the one and I see that same seven parts, right? So one of the first things I want to do is you got to start with you, the business owner. That's the part we start with and we we think okay, how much do I want to make next year out of this business If I have the life that I want to live?
Speaker 2:Not what do I need the minimum I need, but what do I need to live the life I want to live? Maybe it's I want a beach house in Florida. Maybe I want a vacation four times a year. Maybe I want to only work three days a week. Whatever that is now we figure out how much it's going to cost you. Once you know how much it's going to cost you, let's say that it's going to cost me $500,000 to live that life next year. How much does my business need to generate in gross revenue for me to be able to take that money out?
Speaker 1:Yeah.
Speaker 2:Right. So my business has a 35% margin, net margin. So if I take 500,000 and I divide it by 0.33, I'm just going to use 33 because it's easy a third, that means my gross revenue for the business needs to be 1.5 million.
Speaker 2:Right, I now have my goal revenue for next year for the business. So now, how many sales do I need? Well, what's your average sale value? My average sale value is $5,000. So that means I need 300 sales next year. I've just now I'm working on the sales part of my business. Once I know the number of sales, I can reverse engineer by knowing my conversion rates. How many sales appointments do I have to have to get 300 sales? I close 73% of the people I talk to, so I need 400 sales conversations, and then 82% of our sales conversations would actually show up for the appointment. So I need 480 or whatever, set appointments, and then 90% of our leads set appointments. So I need 560 leads. I've now told my marketing team exactly how many leads to get.
Speaker 2:Now we figure out what channels they're going to come from and we create hypothesis. Okay, now here's the next thing. What if I'm really successful at that? I've got my goal section, which is the use section. I've got my sales section done. I've got my marketing section. Now what if I? What if that means I'm tripling the number of sales I'm doing next year? Who's going to do the work?
Speaker 1:Yeah.
Speaker 2:What systems and procedures are going to break in my factory that I need to upgrade to handle 300 sales, and what people do I need to plug into the systems? If I'm a dentist, do I need another dental hygienist or do I need another full-time dentist? Right, and that's the people section of the plan. Then, if I add people, do I have enough physical space to do that or do I need to get another physical space? Can I do a hybrid where some people are virtual and some people are in person? Can I do a hybrid where some people are virtual and some people are in person? And then, as I continue to scale, what metrics or money or financials do I need in place so that I can manage my business by the data and not on emotion? It's one of the things that I did in my business and I see with so many business owners is we make decisions based on emotion and it gets us in trouble, right? I'll give you a good, quick example.
Speaker 2:I had a lawyer that worked for me and he was behind in his work all the time and I went in there and I said hey, joe, you know why are you behind? He said I'm on the phone, constantly incoming and outgoing calls. I walked out of his office, I went to my office manager and I said let's put an ad out for another attorney. And she said why? I said because, joe, he gets so many phone calls he can't get to his work. And she just stopped and she said did you look at the phone records? Yes, and I'm like no. And she goes don't you think you should have? And I'm like yes.
Speaker 2:So, we pulled the phone records right. The prior day he was on the phone, incoming and outgoing, for four minutes and 32 seconds.
Speaker 1:The whole day.
Speaker 2:The whole day.
Speaker 2:That's not the whole day. Okay, so that means he's not on the calls all day long. The next day was like under six minutes. So I'm like go in there. And I asked him what's really going on, because now the data tells me you're full of crap, basically. And so I found out that kid you not, he doesn't know how to navigate the computer, he didn't know how to get around, he didn't know how to do anything and that's not going to work for me. But the point, the moral of that story is I almost spent another $75,000 a year on another attorney when I didn't look at the data. I was making an emotional decision.
Speaker 1:Yeah, when.
Speaker 2:I didn't look at the data. I was making an emotional decision, yeah, so having the right KPIs and the metrics and making decisions on data is the money metrics part of the business?
Speaker 1:Absolutely, and it helps you understand when you need to do a deeper dive of root cause, which is what you just did. Tell me you're not on the call. What's really going on?
Speaker 2:Right, right, and that's how you quickly, like, your payroll ratio, gets out of whack. Yeah, right. So if you think about every dollar that comes in, there's a rule of thirds I learned in business school. A third of that money goes to labor cost, a third goes to your other overhead and then the third is your profit. Theoretically, when you start making emotional decisions in your business and you start hiring because people are saying they're overwhelmed and you panic hire, your payroll ratio goes up and your profits go down. I had somebody that just hired me and his payroll ratio is 79% of revenue and his other overhead is 47%. Well, if you add the two together, it's 126%.
Speaker 2:He's wondering why he's dumping money in every month.
Speaker 1:Yeah.
Speaker 2:Right, because he he way over hired for what he needed, so get. If I had to give everybody one tip managing business on data start looking at data. Get away from making emotional decisions in your in your business.
Speaker 1:Yeah, absolutely.
Speaker 2:But the big. The best way to do this is develop a business plan that addresses all the seven parts. If I'm going to make this much money I got to gross this I need this many sales, I need this many leads. Here's how we're going to get them. If I get those, then I need to fix these systems and I need to hire these people in Q2 or Q3. And it's a cohesive plan. Now you have a hypothesis, basically, and then, as business like, right now we're at the end of q1 I know, can you believe it?
Speaker 2:that's crazy, I know every business that I'm working with, I'm reviewing their business plan. Where are we at in relation to our plan? Are we ahead of schedule? Are we behind schedule? And then we're making adjustments. A lot of people will make that business plan. They just throw it in a drawer. No, keep it out, measure it every month, know where you're at and make adjustments, and that's how you thrive. On average, the people I'll work with grow about 35 to 40% a year and they maintain that profitability. That's great Throughout the whole thing, and that's by managing the ratios in your business.
Speaker 2:That's great, the whole thing, and that's by managing the ratios in your business.
Speaker 1:Yeah, absolutely, and you're keeping your eye on your end goal. You don't have that end goal. You're. Then you don't have that roadmap, as you talked about, and you're just all over the place and you're just lost in the forest and you're never going to find your way.
Speaker 2:Well, I call that. You know when you talk about being in the forest and you're never going to find your way. Well, I call that you know, when you talk about being in the weeds, you're going a hundred miles an hour and the weeds are smacking you in the face and you can't see anything else. So you're just making reactionary.
Speaker 1:There goes the cliff and you fall right off of it.
Speaker 2:And so the first thing that you have to do is start removing yourself, as the owner from working in the business and start working on it. So if I hire somebody to do this, I can now raise a little bit above the weeds and I can start seeing a little bit further. And then I hire my next key person and now I'm at the 10,000 foot view and I can start seeing a lot. Right, but as long as you're stuck in the weeds, you're going to be on this hamster wheel of not going anywhere?
Speaker 1:Yeah, that makes so much sense. So I had to ask, as a fellow founder, would you be, would you mind being vulnerable and sharing a time when you did something and it didn't turn out the way you had hoped? And basically, if you could go back in time and tell that younger self don't do that or make a different decision or go left instead of right. What's a lesson learned from you as a founder to all the other founders listening I think the biggest lesson that I learned in business is to be different.
Speaker 2:If you really want to stand out, be different. A great example was I belong to a mastermind group. Similar to what you were mentioning was Vistage, and I run some mastermind groups now. But I was in this mastermind group and these guys were talking about how they were doing radio and it was killing it for them. They were getting clients left and right. I'm like what radio? Right, and they're like talk radio, sports radio, and I'm like writing it down. And so I come back to St Louis and I threw $20,000 at radio and got nothing, absolutely nothing, and I'm like what the heck? And so what I call that is throwing money at something and seeing if it sticks Right. My biggest lesson was that's just gambling, Right, Don't do that fun gambling either.
Speaker 2:Right, yeah, so, okay. So radio works. So I started asking my clients I'm like, do you listen to the radio? And they're like, yeah, we listen to it all time. Okay, what stations do you listen to? And they're like this jazz station, jazz 101, and magic 108. Jazz 101, magic 108 kept coming up over and over and over. So I took that same amount of money and put it in those two stations and the phone wouldn't quit ringing wow, it's knowing who your target audience is and where they are and where they get their information from right.
Speaker 2:So if I know who my target avatar is, I always want to know where they get their information from. For example, there's businesses whose target audience might be the older generation I'm 59, so not quite there yet but, like my dad is not on Facebook, he's not on TikTok, he's not on anything like that, right, I'm on those, but I'm not on Facebook, he's not on TikTok, he's not on anything like that, right, I'm on those, but I'm not on Instagram.
Speaker 1:Yeah.
Speaker 2:So knowing where your avatar gets their information from informs you of where you should use, market, what marketing channels to use, and now you've tilted the odds in your favor, yeah, and you'll likely have success in your marketing. So that was one of my biggest aha moments was know who, where they get their information from, and don't make just blind decisions. I call it chasing a shiny object, right, oh, I'm going to do that because it worked for them. Yeah, the other thing was being different. Yeah, you know, one of the interesting things about the human buying process is when we, as a human being, have a problem, we're constantly thinking about it.
Speaker 2:The brain is designed to protect the body and to find solutions, and it's actually working 24 seven, and so sometimes you'll sit up in the middle of the night and you think about something, or all of a sudden, an idea pops in your head, right, and that that's what the old saying comes is what's keeping you up at night? Yeah, so when the brain's always looking for a solution, now we go on the internet and we type in a search and thousands of options come up. Right, I was looking for a, an outdoor TV. I built a gazebo out here, and in St Louis. It gets cold in the winter, so I need a TV that's not going to go kaput when it gets cold. I'm not going to be sitting out there when it's cold, but it's got to survive, right.
Speaker 2:Yeah, you don't want to take it off the wall every summer or winter, so there's a thousand options, and if you would have crossed out LG and Panasonic and Samsung, I can't tell them apart. So what happens? The brain gets confused, doesn't know what to do, and so we resort to lowest price.
Speaker 1:Oh yeah.
Speaker 2:Right. So now, if businesses are getting price shoppers, it's because your client, your customers, can't tell you apart from anybody else. So the first way to get over price shoppers is to make your marketing messages stand out. I was in Miami a few years ago and I did a search for divorce lawyer and the top PPC ad said top rated Miami divorce lawyer. The second one said AV rated family law lawyer. And the third one said is he sleeping with her right now? Sleeping with her right now? And it was a firm that only represented women in divorce and I guarantee you that ad was killing it. Compared to the rest of them, it stood out over everybody else. And so that's that's, if you really like, change your mindset, that I want to be different. I want to do things different and don't just follow everybody else and what they're doing. You will dominate your market, whatever it is.
Speaker 1:Yeah, yeah, that's such great advice. Well, I feel like there's so many more things that I want to ask you, but time is of the essence and I'd love to ask you uh, what are, what is your last um, thought or tip or trick, your tool that you'd like to share with the audience today?
Speaker 2:I think the biggest tip for me is I find that most people think too small. Right yeah, think bigger. Why?
Speaker 1:do you think that is?
Speaker 2:I think we we doubt our capabilities. I think, from a mindset perspective, we're conditioned to think certain things and it's based on how we grew up and what we had and what can we accomplish. If you truly believe you can accomplish things, it will come your way. Your brain, again, is working on it.
Speaker 1:Yeah.
Speaker 2:My first year in business with this business accelerator Institute. We did almost a million dollars about 850,000. This year my goal is 3 million. It's pretty clear what I need to do to get there. Next year I told my wife my goal is 15 million and she just looked at me and she's like how are you going to do it? I said I don't know yet, but I know I'm going to do it.
Speaker 1:And.
Speaker 2:I'm going to keep thinking about it, and now things are starting to fall in place, right, but I had to think bigger.
Speaker 1:Isn't that the eye on the prize statement? Right, you have your eye on the prize and you'll figure out how to get there, because you want that price.
Speaker 2:Yeah, and a lot of times the reason people won't think bigger is they're afraid of failure. But here's what look, I'm making. This business makes $850,000. If I completely swung and missed and failed and this business went under, I've already made an 800,. I've already made an $800,. I've already made an $8 million business. I can create another one. I've already done it.
Speaker 1:Yeah.
Speaker 2:Right. So think about that, because you can do, your mind can repeat it.
Speaker 1:Yeah.
Speaker 2:But I look at everything as I don't put a label on it. It's not good or bad, it doesn't suck and it's not great, it's just is.
Speaker 1:It is.
Speaker 2:Yeah, yeah, and that frees you up to be able to see opportunities to change it. You know, if I have a thousand dollars in my payroll, in my bank account, my payroll due in three days, and it's 15,000, I could go oh my gosh, this is horrible. Or I can just say, okay, now what are we going to do? How are we going to get it? You know, and it frees you up. So when you start labeling things, it restricts you from seeing opportunities.
Speaker 1:Well, James, you've brought in a lot of great insight for the audience and even for myself. How can they find you and is there anything you'd like to share about your business and what they might be able to accomplish with some of the links you're going to provide us?
Speaker 2:Yes, certainly. So one of the things I do is, for all of your listeners, I'm giving away a free book. It's called Top 10 Mistakes that Will Destroy your Business and it's really just practical advice. I also do a free 30-minute discovery call for any business, right, just there'll be a calendar Very generous. You can book a call and then I can figure out what's going on in your business and try to give you a quick fix to get out of that. So where they can find more information, you can go to a website. It's businessacceleratorinstitute forward slash, scaling people.
Speaker 1:Okay, love it. Thank you so much, james.
Speaker 2:You are welcome, Guinevere.
Speaker 1:Really wise words there, wisdom to share, and thank you for sharing your own lesson learn and for those listening. I hope you got a lot out of this. I know I did and I'm sure that we're going to be inviting james back for some other topics, uh, in the future. So thank you, james, for joining us today and thank you, audience, for listening. We will catch you on the next podcast. All right, thank you so much, guinevere, for having me. Thanks for watching.
