The Owners Matrix and Scaling Your Profitability

An interview with ??Andrew O'Brien? Chief Energy Officer & Dr. Michael Hartley, PhD with ActionCOACH Central Texas on The Expert Exchange

The Owners Matrix and Scaling your Profitability.

Host: Joshua Carnes: Welcome to the expert exchange the podcast where knowledge meets success I'm your host Josh Carnes and on today's show We are going to be learning about the owner's matrix and scaling your profitability with our expert guests Andy O'Brien and Dr. Michael Hartley PhD. With Action COACH of Central Texas, you can find out more from Andy and Dr.

Hartley online at ActionCoachCentralTX.com. That's ActionCoachCentralTX.com.

So get ready to expand your horizons and refine your strategies as we dive into the Owner's Matrix with our expert guests.

On today's show, we have Andy O'Brien and Dr. Michael Hartley. Andy is a senior partner, master coach, and CCO of Action COACH. Andy comes to us with over 25 years of exceptional leadership and personal development experience as both an executive coach and business owner.

He's an inspirational keynote speaker a results-oriented business coach and a trainer for coaches around the world.

And then also with us today is Dr. Hartley. Dr. Hartley is also a senior partner and master coach and the CEO of Action COACH. Dr. Hartley is known as the business magician for his innovative and game changing solutions with a doctrine of business strategy and innovation, along with being one of the top certified executive business coaches in the world.

They say, when you're looking to win in the game of business, Dr. Hartley is the man to listen to. So gentlemen, welcome to the expert exchange. Thank you guys for coming on today.

Guest: Andy O'Brien: Thank you.

Dr. Michael Hartley PhD.: Thanks for having us.

Host: Joshua Carnes: Perfect. So before we dive into the owner's matrix and what that's all about today's topic, why don't you guys just, I know I gave, a brief introduction.

And, so we're clear for one home goat. Go check out the website. I condensed that just a smidgen. You guys have paragraphs with your accolades. So why don't you guys go ahead and introduce yourselves and tell us about, yourselves.

Dr. Michael Hartley PhD.: Good. Thanks for having us, Josh. I'm Dr. Michael Hartley.

I have. Owned businesses for about 16 years. Now open my very first business in 2007, and failed absolutely miserably that I live, I literally I allowed it to take my life away from me. I haven't, I was homeless for about six months, lived out the backseat of a white Dodge Charger in South Texas realized that that's not what I thought business ownership was going to be like, and realized I knew nothing about business.

It was, ironically enough, a video production company. I knew a lot of things about recording video and lighting and audio and knew nothing about actual business. So I started reaching out to mentors to guide me and from there built a couple of successful businesses. It turned the video production company into a seven-figure business.

Later on built a business with four other business partners to about 200 million in top-line revenue, exited that, and started focusing on coaching and the coaching business after that. Cause. I became successful in my opinion because of the mentors I had, and now we kind of get to do that for others. And so that's been the last 16 years in a nutshell.

Guest: Andy O'Brien: Awesome. . Thanks for having us. I'm excited. I know we've had some other great experiences together, but Andy O'Brien, I've been doing this for about 30 years now. It's this is our third business and well, our third business together. And what's interesting is, you know, I started out in the family business.

We were joking about the book that's coming out, but started out there, worked with mostly family businesses did a stint in corporate America where I tell her where they stole my soul, which some of you guys can relate to. where everything's a number. When I got out of that business because that business went into receivership, that business went under, I had the opportunity to kind of look back.

And I looked at the Action COACH model. I looked at what it had to offer. And one catalyst for me was, and in 2008, my dad had, and my aunt had to file bankruptcy to get out from underneath their business. And that was kind of the catalyst to who's a trusted advisor, who can help these business owners, who's around because if you guys recall in 2008 through 11, it was a really terrible time for any business.

And so that's kind of my driving force is family businesses, executive businesses that can't get out of their own way. And we'll dive into that a little bit more. But we love what we do.

Host: Joshua Carnes: So, before we dive into the owner's matrix and stuff, let's dive into Action COACH. You know it's a system. It's a process. So I heard recently that Action COACH was ranked number three in the world. Number one in North America is a coaching firm. So how did the Action COACH reach that level of success? How do you guys play into that? Tell me a little bit about that. Just a general accolade in itself.

Dr. Michael Hartley PhD.:. So, what we focus on is we're a business education firm that coaches’ businesses.

So, we focus first on educating business owners because even at the doctoral level, no one teaches you how to build a business successfully. So, we're like, let's let you help business owners learn how to do this. So, we focus on business education and then for those that are ready, they jump into coaching programs with us.

Roughly speaking, not only 4 percent nationwide, but about 10 percent in Texas businesses make it to a million dollars in annualized revenue. And so we focus on how to get businesses from under that into that, right? Because, you know, to be able to eventually have a business that you can sell and stuff, there's certain just.

Numbers. You got to be able to hit for someone to be interested as you are well aware. So, we really focus on getting business owners and entrepreneurs, the education they need. And that's helped us Excel and grow the way that we have, because when you focus, on educating business owners and then coaching them.

They have far more success, which means that they then stay with us longer and they become, you know, more successful, all those kinds of things. And so, we focus a lot on leverage programs where it's a bunch of business owners altogether learning and being coached as one. And you get the group dynamics and, you know, learnings and stuff like that that happened.

Guest: Andy O'Brien: They get the competitiveness, you know, for, the groups and the one-to-ones and all the education that we do, we know that an educated client is an easy client to coach because they want it for themselves. He and I have a really bad habit of wanting everything for all of our owners. Well, I joke like.

I'm a full-blown capitalist. I want, I want them to make as much money as humanly possible. And, and that allows them to see that growth. And that has really catapulted our business over the last year to the forefront, you know, Action COACH globally has 1, 200. Offices in 85 countries. And we are fortunate enough, to know we've played to each other's strengths.

It has allowed us to align with really great business people, and really great mentors, and it's allowed our business to grow exponentially. And it's not just, I mean, I could sit here and say it's us, but our team would. Beg to differ. It's, it takes all of us. It takes all of us. And, and it has catapulted us to number three in the world, you know, of those 1200 businesses and one in North America.

And we're, we're having a blast now.

Host: Joshua Carnes: So, you guys hit on the us factor, right? There, there are two of you guys. So, you, you know, how did you guys both get into, like, how'd you guys find each other? Why, why is there an us versus independent, right?

Guest: Andy O'Brien: That's, that is a great question.

People have asked us that. So there's more than just. us. There are actually four of us, but I've been in the coaching. It'll be 14 years this year. I was in North Iowa. That's where I started. I had been in the business and this young buck was coming up. I call him DMH. Abbreviating, but Dr.

Hartley and I'd never met in person. We are passing had not seen each other, had not met. And when I moved to Texas five years, almost six years ago, I needed some guidance and I just reached out to him and I'm like, Hey let's meet first time we met, we met in a coffee shop. He was doing his own thing.

I was doing my own thing. He had success. I had success. Well, then from 2019 on, we started doing, we, we have the same belief system. Let's start with that. We follow the system. Okay, we are really smart together. We're really good alone, but we're much better together as a team. And it's helped us by, we started doing workshops together.

Our, catalyst, you know, 90-day planning, annual planning, and we started doing all of these things together. Well, then as we grew COVID hit, both of our businesses just went. Busy, busy, busy because of all the needs in the marketplace. And after we came out of that, we are still doing a lot together.

DMH and Tanner, one of our other business partners, were the catalysts to the forefront of a membership program that we do every month now. And I was a little hardheaded. I'm not going to lie. It took me a little bit to buy in, but. They were the catalysts to drive this. And we started seeing all of this synergy and we merged, it was a year ago, November 1st.

And, because we had been working together for 18 months, two years, separate businesses spending equal amounts of money to do marketing and employees and everything. We looked at each other and went, What would this look like if we did it together? And so that's how we ended up within us.

Dr. Michael Hartley PhD.: And it was the best decision I think we could have ever made.

Guest: Andy O'Brien: I agree. I agree. There's so, you know, I mean, you're in, you're in the business world. Mm hmm. We believe in full, wholeheartedly abundance. We are a full-blown abundance for each, abundance for other coaches, abundance for other Action COACH firms, and executive coaches, doesn't matter what system on your end. We know the more the more, right?

The more people are educated, the better they'll be able to sell their business. There'll be a support their family, but they'll be able to take a vacation. We, believe in that and that's something that you don't, as you know, in the business world, competitors don't always look at it like that.

Host: Joshua Carnes: It's no, great. So, you know, from the outside in, we've been able to watch you guys. It's great to see you guys actually function as a team and complete and do all that stuff, even for our own clients that we've sent over. So, it's definitely great. One of the things that I think it's important that we, we kind of highlight here is what is a coach, right?

So, what is a business or executive coach and what's the difference between that and a consultant, right? So how does, where does that lay in with, with what you guys do?

Dr. Michael Hartley PhD.: Our definition of a coach is an unreasonable yet compassionate friend. We are here too, we're not, we're not, we're going to empathize, we're not going to sympathize, right?

Two different things there. We'll have empathy for where you're at and all those kinds of things. And yet we're here to be extremely unreasonable. And, you know, Andy mentioned the system. We have 3, 500 tools that we use with our clients and give them in templates and all that kind of stuff. And so a coach ought to have a system.

That you can learn from, and then they hold you accountable to actually implementing the right stuff, right? I, I think it's, it's fairly easy to say, especially here in Central Texas, you can't, you know, swing a baseball bat without hitting four people that call themselves a coach. I won't get on Net Supply today.

The biggest difference between a coach and a consultant is, in my opinion, my, one of my last businesses was a consulting firm. In my opinion, the first. You know, 5, 10 percent of the consulting is being a coach. You're, you're guiding someone on what to do, best practices, that kind of stuff.

The difference is a consultant then hires all the team to go do it for you, right? A coach stops right there and says, this is your business. We're holding you accountable to go do it. You know, so that's the biggest difference is we're not doing the work for clients. We're guiding them and then holding their feet to the fire and saying, it's like, this is your job.

Go, go get it done with your team.

Guest: Andy O'Brien: we were both consultants in a previous life before we both entered this. We did a lot of work for a lot of people. And that's just not it. It's just like you know, you're, you're I see you all the time with your kids and football coaching and all of this.

How often would you like to run out in the field and show them exactly how to run the place? Right.

Same thing for us. It's like, we, we know the work that needs to be done. And we don't tell people what to do. There's a consultant. We'll tell you what to do. Right. Bankers, and accountants, tell people what to do.

I know I do not like to be told what to do. Ask him. And he doesn't like to be told what to do either. So by coaching, we're coaching them into making a decision. That's good for them and their business. They make the decisions, , they set the deadlines, they set the parameters, and they set the consequences. Not us.

Dr. Michael Hartley PhD.: for sure. And, you know, when you hire a consultant, you're kind of stuck hiring a consultant forever when, when, when you're coached on what to do. And then your team is the one implementing you, you can go implement that in any number of businesses on your own. Right. So, you know, sometimes it's like in the mindset of an owner, like easier to hire a consultant.

Then you're stuck paying for them forever. Because they're doing the work. Exactly. You never learned actually how to properly guide someone else to do it.

Host: Joshua Carnes: Whereas this process allows a business owner to make an educated decision for themselves on how they want to go.

Guest: Andy O'Brien: Yes. And we, we have one of our, we, we coach consultants and executive coaches and real estate coaches and athletic coaches. It's, it's an interesting. Dynamic because again, when you bring a consultant in and you know, sometimes they have, I know mindsets, we just a little bit, but it's the shift, right? How do we help you get to where you want to go?

You're not getting there your way. So should we try something else?

Host: Joshua Carnes: Perfect. So let's dive into today's topic. What is the owner's matrix? Why should a business owner even care about it? What is it?

Guest: Andy O'Brien: It is monumental. Leap for a lot of business owners. You and I've talked many times about different business owners.

And part of the challenge for selling a business is getting an owner to stop doing everything. We've, we've had that conversation too many times. So. The owner's matrix is the owner's value of time in our world is the value of the business's time as an owner and easy math is if you're a million-dollar business in revenue and you have 2000 hours now, every business owner that's watching this guy, that's bullshit.

Sorry, that's crap because you know, they work more than 2000, but we believe. Our belief is you should only work 2000 hours a year. A year means you should have 80 hours. Not a month. Not a month. , . . Not a month. That, I'm making a note of that. Make a note. I've seen that before. We go for drinks on occasion, but we believe they should only work 40 hours a week and they should have two weeks’ vacation.

So we build the matrix based on a million dollars in revenue, 2000 hours. Well, if you take a million dollars and you divide it by 2000, you come up with $500 an hour. Now, every business owner that we've ever spoken to or, well, I don't make $500 an hour. Well, you should because of capitalists, but they, they look at, they go, that's absurd.

Well, let's talk about, and, and we together. So really quickly, I'll let you, what are the pillars in business. What are the seven pillars in any organization? And then I'll bring it right back to this

Dr. Michael Hartley PhD.: marketing, sales, operations, team finance. IT and mindset. Every business has some level of all seven of those showing up in their business.

Guest: Andy O'Brien: And so as we build this out, we use the matrix. It's a nine by nine square and we build a matrix, how we plug all of those in. We start with the highest, which is the CEO, the president owner. And we put it in and we list things that the CEO should be doing. And a lot of them don't, I don't see myself as that well.

Okay, if you're the chief, you know, finance and the CEO are usually one in the same. Well, are you planning? Are you planning for the business? Are you, what are the roles you're supposed to be doing? You know, you're supposed to be motivating. You're supposed to be leading your team. You're supposed to be planning.

You're supposed to be looking to the future. You're supposed to be looking at, you know, if you're not the finance guy, you're supposed to like, what's breakeven. What does it look like? So there's a list of like, what should the CEO be doing? But what we find. Is all of those seven pillars, the CEO wears every one of those hats every day.

And, what ends up happening is, well, how much does this position cost? Well, it's 20 an hour admin. Okay. Operation. Oh, then it's 30 and then it's 40 and then it just works its way up. And, oh, you have an attorney. What is that? And you have a CPA. And what we do is we just divide it and we list the duties, not the person, the duties.

And then it's a simple math equation. How much time in a week are you spending on the left-hand side of this chart versus the right-hand side? 70, 80, and 60, the percentages. I spent a lot of time. Great. So if you spend 80 percent of a 40-hour week, okay, that's 30 hours. And you're doing a 30-an-hour job, trying to make a million a year, trying to make a millionaire.

And then you're at 500 an hour. The math is 500 minus that number. And then it's like, they look at, they look at us and they're like, what, how did you come up with that?,

Dr. Michael Hartley PhD.: you know, they want owners pay, but they're doing, they're not doing owner's work. Right. They want owners pay, but they're, they're, they're doing the technician work in the business.

Guest: Andy O'Brien: Great line. Great point... Technician.

Dr. Michael Hartley PhD.: And if you haven't read the e myth, anyone who's watching this, you should be reading the e myth. But really, I mean, it's, it's, it's a, it's a shift in their mindset to go, oh, no, like there is actual like owner work I need to be doing and I'm stuck in the business nonstop.

And it's not like, I think there's a misnomer on, on the business versus in the business. It's not like you have to work on the business. 30 hours a week. It's like an hour to a day. You dedicate an hour a day for the next five years. Your business is in a very different spot. Five years from now, just by absolutely a little bit of focus.

Host: Joshua Carnes: So, I think one of the things that we run into the most on the exit side, so we get calls. All the time from someone going, I'm ready to sell my business and I'm ready to exit. And the biggest problem that we run into is, is we started asking them questions and it's like, oh, well, you're the one doing all the work.

You are the business. So how does, how does Action COACH, how does your team implement the owner's matrix? How do, how do you guys actually get that owner out of doing it all? Into the matrix and into the million dollars a year and working on to the $500 an hour tasks.

Guest: Andy O'Brien: It's not easy. It sounds a lot easier than it is. I have a big stick.

It's a focus bat.

Dr. Michael Hartley PhD.: No, he actually has a bed that says focus on it. Concentration risks in the business, business, right? The owner tends to be one of the biggest ones because they have all the relationships with all the vendors. They're the ones doing a lot of the work.

You know, all the customers know them, the relationships are, it's just so many problems there. So essentially what we have is a very structured methodology to get business owners out of that. And it takes about four basic steps to get them to where their business can scale and they're able to start taking steps out.

And then there's another one or two steps to fully remove them from it. And you know, depending on where they're at, that could take anywhere from 12 months to five years, right? Just depends on where they're at today, and how well they're actually going to listen to coaching and implement things.

You know, there's a thing called pace.

Host: Joshua Carnes: Are you suggesting people don't listen?

Guest: Andy O'Brien: No, LOL

Dr. Michael Hartley PhD.: business owners are, they love listening to everything else. you know, it's, it's the Marshall Goldsmith book, right? Like what got you here won't get you there, right? So they, they, they, they got a bunch of success, but they're still stuck in the business and they don't want to try different things.

They're like, well if you want to be able to sell your business, you have to be willing to do things a slightly different way.

Guest: Andy O'Brien: And that's the hardest lesson. You know, the first thing was really interesting. You know, you, you do things for a long time, and you become unconscious and competent, and then you forget some of the basics and a lot of owners live in that world because they just do.

And the first thing that we do, because every coaching client, every person, I just don't have enough time. , I don't have any time. I don't have, I haven't, I've got no time. Okay. That is literally the, we, we overlay this owner's matrix with a tool called the skill fund matrix. And again, these are, these are not painful physically, but mentally for an owner.

This is a very painful task for them because they get into our own heads. What did you call that? The itty bitty shi**y committee on their shoulder. Okay. Right there. That's a, he's got great lines like that, but it's, it's reality, but they, they live in that. They give shame, and guilt. I should've, I should've, would've, could've, and so we solve with them the time.

The time quandary, you know, of where is my time going? And when you overlay these things like, Oh, I spend all this time doing this. Okay. Well, I can't afford that. That's 30, 000 a year or 80. Okay. Wrong math. We have to solve how many hours did it take you to master this? How long will it take you to train?

And we have 60 to 90 days to get, to a profitable standard with the salesperson marketing. Admin, and you know, higher. , we, we help them through that entire process and guide them through that process so they can see it's not 40, 000 a year. It's a, Oh, I've got a few weeks. It's 1600. It's 2, 000 a pay period.

Okay. How, how can we get through this? And we solve that because. If we don't take things off their plate or they should, that's not, that's incorrect. If they don't take things off their plate, they will never have any more time to focus on a lot of the other challenges that are going on. Because when you look at a business, what are the two factors that you look at right off the bat?

Host: Joshua Carnes: Profitability and cashflow, you know, one in the same, but

Guest: Andy O'Brien: , exactly.

Dr. Michael Hartley PhD.: Same. We're looking at time and money, right? Because, if we're not able to guide them properly and they're not willing to listen to open up time on their calendar to do certain things, they're not going to be able to implement things, right?

We had a client who started with us and his business within the first like month or two of working with us. He, lost some of his team ironically enough, it was actually to things out of his control. They were on like reserves and stuff like that. So like their army was like, Hey, we're picking you up and we're taking you.

He's like, what do I do? Oh, man. And it's one of those things where, because we had gone through like step one was go through the time exercise. All of a sudden it was like, okay, wait, hold on, we've, we've been working through this intentionally. Now all we gotta do is we have to, we have to take what they were doing, and now we need to add it, honestly, to probably your plate until you hire somebody else.

Another post month. Right. And he's like, well, how are we gonna do that? Well, this is why we coach you through time mastery, right? People call it time management all the time. Like, you can't manage time. You can manage yourself, right? You can't actually, I can't pause time. I can't stop it. Rewind it, slow it down.

Something I haven't figured that one out yet. I wish I could meet. I'd have a couple more zeros on my bank account. If I figured that out. No, but for real though, it's, it's one of the things where it's like, you have to realize that you're just managing yourself, right? And to be able to get to where you can make the shifts in your business, to have an increased cash flow and those types of things, you gotta be willing to, to look at it differently.

Guest: Andy O'Brien: And it's, and it's, it is that step. It is that step. And it's, it's so interesting with time and, and everybody, I don't care what pay grade you are, what size of business I always, I've heard for the last 30 years and especially the last four, almost 14, my business is different. It's my favorite thing. Great.

You are the expert in your business. We'll help you. You know. We, we talk about it for us, it's, it's systemization, it's humanization, it's how do we move them through this process? Because if we can't solve time and then of course you, then that's a trickle-down theory, right? Well, none of my people do it right and I have no time and they're not, they're wasting my time and I might as well do it myself and nobody does it faster than me and nobody does it better than me.

Host: Joshua Carnes: As a business owner, that's probably the hardest step to take from that step of getting us to here. I'm the one that's gotten that success to someone else has to be able to duplicate what I do. And it's a, it's a, it's a huge trust system. And it's a huge pull away from running my own companies of I'm not the guy anymore, but I have to trust the team to do the stuff.

Otherwise, we never grow.

Guest: Andy O'Brien: It's interesting. I had a call yesterday from a good friend of mine. Mentor, a good friend of mine has built a massive business. But it's him and we were talking yesterday and he signed his son up for a sales course and now he's looking at he's 51 and everything's in his head and he's like, how are we going to get it out?

And we just asked him like, okay, we got to start. And again, we have a strict policy, of not coaching your friends, but the conversation was just that of what's your plan? I don't have a plan. Okay. If you did have a plan, what would it look like? That's why I'm on the phone with you with some explorative in there with it.

But it's, it's one of those conversations where we all get to this point, you know, that we have to finally stop and go, am I capable? Everybody's capable. When DMH and Tanner started talking about like these BHAG goals, like, you know, a hundred million dollar business. And my mind was just like, I wanted to bury my head in the sand.

I felt like all of our clients, right. I mean, it was, it was, that's a big goal going from 10 to 20 to you're like, whoa. Well, that's a hundred X. It's the, it's the shift, right? It's the 1 percent shifts every day that we do with the business owner to get them to see results rather than barriers because that itty bitty, shi**y committee is talking about every, everybody has their own pokers and doubters in their world.

They're going to tell them that can't be done, or they're going to tell themselves they can't do it that way.

Host: Joshua Carnes: So as business owners begin to engage with you and truly make those shifts, what are some of the landmines that happen? Or what are some of the issues that business owners run into when they actually start going through this owner's matrix in this process with you guys?

Dr. Michael Hartley PhD.: One is going to be mindset, right? We kind of hit on that a little bit, which is some of the landmines are going to fall on is the, well, you know, I am the best one that's ever done it in the business. And they have to realize that they're probably not going to hire someone the first time that's going to be as good as they are.

Right. And, and learning like, okay, when I'm just starting to hire for the first time to replace me, do I have a management system? Am I going to be, do I know how to hire someone to replace me? Chances are no, right? And you're going to fall a few times. I mean, from there to the misunderstanding of how many times do you have to test and measure certain things in the business to get it right?

And it was like, oh, I did it and it didn't work. Congratulations. That one version didn't work, right? How many different versions might we need to go through before we test and find the one that actually does. Right? You get so many business owners that are just like, well, this thing's down, right?

Like profits down. And I actually, let me rephrase that. Revenues down. I'm like, is profit up? Well, but revenues are down. Like, but profits up. What does that tell you? What means that my revenues are down? Like, I don't care about your revenue right now. Your profits are up. What does that tell you? It means, well, it means that we did, we were doing things more efficiently.

Yes, it does. Yes. Get out of the mindset of top-line matters. It doesn't matter until later on. Right now you need profit. You need cash, right? How much are you saving? How much are you keeping to reinvest into the business? And they get so stuck on this top-line number. And it's just like, y'all, that doesn't matter right now.

Right? It just simply doesn't. ,

Host: Joshua Carnes: you, you know, essentially not to cut you guys off, but even when it comes to selling a business, we speak to so many business owners who are always like, well, I'm doing $5 million in top-line sales. And I'm like, great. No. What's the profitability? No one cares. a business doing $5 million at 98 percent expenses versus a business doing $3 million at 50 percent profitability.

Those are hugely different businesses, and that $3 million business is going to sell for more than the $5 million.

Guest: Andy O'Brien: they don't, society has warped people. I mean, like you just said, they, society has told them I have a million-dollar business or a $5 million business and I have a $4,985,000 expenses.

Okay, congratulations, you're running a shi**y business. , seriously. And, and we see that all the time. You're doing a lot of work. You're doing, you're not working, , you're busy. You're not working smarter. What was the, what, what's the definition of busy? It's the new stupid in business doing more to have more is not a good business model and it is a belief system that is a mindset problem that is a look again we look at profitability at the end of the day at the balance sheet we want that number to go up.

That if that number goes up, when it comes to you, you're like, sir, here's your multiplier.

Dr. Michael Hartley Ph.D.:For real. I mean, one of our mentors puts it this way. He's like you know, working the 50, 60 hours a week used to be like, you know, like a badge, like of honor, like, Oh, look how much I'm working. And it's like, you know, that just means that you're, you are compensating for the mistakes in your business.

When you're working that hard, right? You're, you're compensating for issues that you've allowed yourself to work through or that, you know, like, you've just been like, I have to do it, and not to mention if you're the one doing it, you're stuck doing it forever until you decide to do something different, right?

And then you can't sell it or if you're going to sell it, they're going to have to stay on to run the business still. And now they're just working for somebody else.

Host: Joshua Carnes: Well, and you know, the reality is when we roll in the business, those businesses don't sell. Right. So it's, the industry has some crazy stats, only 20 percent of businesses that go to market actually sell.

And it's because so many people take businesses to market that are unsold instead of saying no. And that's one of the biggest problems is, is the owner is still running the business. They're still the operator versus that, you know, investors buy cash flow. They want to cut a check and have a return on their investment.

And so creating a business that allows that to happen. That's how you truly exit. It's not creating a great product or a great idea. They're all great, but whoever can maximize it and make it profitable. Those are the winners.

Guest: Andy O'Brien: But they don't understand. They. And that's the hardest lesson, you know, you, he talks about time mastery.

I call it self-mastery. We all have different terms for it. They've been, they've been doing their business for so long that they don't realize that, well, they'll want me to stay on. They'll want me to run it. Oh no, no, no, no, no. Because that means that now they have to pay you, and every time they want to implement change, you will fight it.

. They want nothing, and they're so offended by that. Well, they want me. No, nobody wants you.

Dr. Michael Hartley PhD.: That's the other landmine, the I know attitude. Oh. Right? That's a huge landmine that we find. It goes back to kind of mindset a little bit, right? It's, it's, it's interesting. We have a system that's going to get them to have the business run without them with high profitability.

Two factors that help them sell. Yep. The number one issue is the six inches between their ears. It's the number one issue, man. It's just like, which is why we do so much work on mindset with them. Because that's huge. We, we, what's the phrase? You lead a, you know, lead a horse water, but you can't make a drink.

exactly. It's, it's that mind is, is, is that state of mind that has to shift for them to be successful?

Host: Joshua Carnes: No, it's interesting. So Whenever we go to close a business, the buyer is always pushing for a longer transition period. I need 120 days. I need six months. I and they start pushing and we always tell the seller and I, I laughed and I told Sarah, I go, don't worry about it.

I don't care if they ask for three months or six months, they're going to kick you out in three weeks. And, and the seller just looks at me like, what do you mean? And I go, they're buying your business because they believe they can do it. Better. So you've done it your way. You've done it your way for 20 years.

You're going to show them how it takes a couple of weeks, no matter what the business is. And then they want you out of the way. I go, so don't worry about it. If we, you know, we, we give them a 30-day transition, the rest of it's consulting. You're not going to see any of that consulting money. They want you out of the way.

And so it is funny every time there's that transit, they call me up in three weeks. Like, oh, it lasted like three, four weeks. They want me out. That's they, you know, are we, we had an argument about how to do something and I go, well, they own the business now. Not you.

Guest: Andy O'Brien: That's funny. That is, that is so, but it's, it's such a unique and I go back to even, you know, one of my hot buttons that I always get into and I have to curb it because it's not, none of these businesses are mine.

That's the way I've always done it. So it's, it's always interesting to me. That is a, that I know mindset is a huge landmine.

Host: Joshua Carnes: So one of the things that you, you kind of, you asked him to hit on earlier, is the seven pillars, right? So let's, let's dive back into those seven pillars.

Why are those seven pillars important? You kind of highlighted it, but let's, let's dive a little bit further into that. Why does that matter to a company or to a business owner that trying to scale?

Dr. Michael Hartley PhD.: So. Marketing sales. The first two, right? We had people got to know we exist and they got to be interested in buying something that we're selling, right?

Product service, whatever it might be. Fundamental two things, right? Then we get, so marketing sales and marketing, you know, it's interesting a lot of, and then most marketing companies hate me, to be honest with you because there's a, because there's a difference between marketing and advertising, right?

Brand awareness, get, get your, and I, and I learned early on in my first business that failed you know, there were two people on this planet that cared about the name of my business. Me and my mom, we were the only two people that actually cared. Everyone else cares about what I'm going to do for them.

Right. And so getting real marketing in place is, is, is the first step from there. We're going to then focus on sales and conversion rates and all that kind of stuff, because now we've got to be actually able to like, now that they know it. We got to get them to say yes, right? And show value. From there, we're looking at internal operations, right?

And this is where a lot of systems kick in and whatnot. You know, they say basic 80, 20 rule, right? 80 percent of business can be systematized. 20 percent is humanized, right? And can potentially do that earlier. So now we're going to focus on internal operations and making sure that we can actually have high customer service because now that people are buying it.

Well, we got to actually make sure we can service them with what we're, what we're offering marketing sales operations. Then we're going to get to the team, right? Cause oftentimes people don't start with a ton of capital. And so they're bootstrapping it a little bit. And now we've got to focus on how to hire for the first time.

And it's interesting. We've worked with people who would. Having, you know, c-level executives at Mm-Hmm. , fortune 100 companies, and they start Oh. And they're like, I've managed people, you know, all day, every day. And then they open up their first business and they don't realize how different it is when it's yours.

Versus somebody else's, and all of a sudden love spending other people's money. It's so easy to do that. Right. And I'm like, go back to mindset for a minute. You gotta realize that this is not your baby. This is an asset. Mm-Hmm. . And this asset's job is to kick cash off. So that way you get it and then eventually you sell it.

Right. And, and, and getting that shift to go, you need a team because this is an asset that's, that's all it ever is right. And there's got to remove that emotional connection. Yes. You can be passionate about what you do and all that kind of stuff. But in terms of at some point, we're all going to exit our businesses, either we choose to, or life chooses for us.

Right. Oh, . So marketing, sales operations, team finance. That is like literally in the fundamental mastery level of business. The first step of building a business is to know your numbers. And I, we talk, we talk all the time about how business is math and business is people. And the math should be the easy part, right?

Math is math, and has no emotions, right? The people side is where we mess everything up. And so, it's like, we, you got to know your numbers. And you, like step one, you had to know what numbers to even look at.. Right. What's your cost to acquire a client to buy one too, you know, what's your cost per lead?

What's your breakeven point? You know, all the numbers. So, marketing, sales, operation, team, and finance. Then you get into it, which every company has some level of it, right? You have phones and computers, right? Some companies have more of it. This is where, and depending on the industry, you really got to start focusing on cyber security and stuff like that.

You know, A decade ago, it was cyber security was a thing, but it wasn't a prominent thing today. You can lose your ass if you don't have certain things secure and in the right way. And so that's the I.T. wing. And then you get to mindset, right? And that's what kind of filters through all of it. We've, we've touched on those things.

You have to have every single one of these pillars of your business. Rock solid to be able to profitably grow one.

Guest: Andy O'Brien: And you can't be in everyone.

Dr. Michael Hartley PhD.: No, you can't. And, across every industry, they, every industry has it. I don't care what, and people come on, well, how about mine? I'm like, okay, let's, let's walk through that.

It's, it's really straightforward. When you start looking at businesses we talk about the business chassis, right? Mm hmm. You have a Volkswagen Golf and you have an Audi R8. There's a hundred grand difference between these two vehicles. They're built on the same car chassis and business is the exact same.

Right. And so when, when you're looking to build your business, you just have to learn, well, what's the chassis it's actually sitting on because now I can adjust it however I need to.

Host: Joshua Carnes: So let's say, A business owner engages with Action COACH, and engages with you guys. What are some of the first things that they can expect, to walk through to change?

Like what's, what's week one look like of, Hey, I want to scale. I want to grow. What does that actually look like when they engage with you guys?

Guest: Andy O'Brien: Well, there's, there's a process we take everybody back, but let's say we skip the front end of it. We go through, our, you know, marketing, our sales stuff, and we land on a client.

We have a very regimented first six weeks that we go through with a client. For them to be successful. For them to be successful. The, and first thing that we throw them is we need to know our team, our coaches, our admin, we need to know where their time's at. We have to know what they do every day.

And yes, we've done it. I've seen him with his clients. He's seen mine. They, send us the first week. It's like 27 pages of, so what? I don't think I slept last week. And it's crazy because the list is so big. And then you start looking at that, right? Then we go into the alignment phase, right? Week two is once we start now, this is a couple of weeks, right?

We start with time. They have to go through it and money, right? Numbers. Where are you at? We're going through that with new clients right now. What's the breakeven cost of goods? Just like you went through that entire list, but then we move into usually the second and third weeks is. We're going to align what, what does the business align with your personal if you have a partner, a life partner, whatever you want to call it, a wife, a significant other, maybe it's a business partner, maybe it's other key members, we go into the alignment phase of that because we need to make sure everybody's beating to the same drum.

In many cases, that alignment is one of the times when they start seeing the gaps in their belief system or their communication system with others.

Dr. Michael Hartley PhD.: So it's, it's, it's a fairly prescribed first six weeks for them because what we find is that most business owners have never had a coach or they had a, had a crappy one.

So it's almost like onboarding someone to your team when you hire them, you need to train them how to be successful. We're teaching them how to be successful with coaching. So that way, ideally. I mean, it's like quite literally we have a guarantee around this within 17 weeks they're getting an ROI on coaching like within 17 weeks they're getting at least a 1x ROI on their coaching investment on average within a year it's 3x and within two years it's roughly 10x so not many places you can put your money and get a 10x ROI within a couple of years right and so to get that through you First week, first month and a half have to be pretty solid so that way they can be successful laying the foundation, all of that.

And so we start with time and money. So if someone's starting with us, they got to know that we're starting with time and money and the road map for you to be successful. And then it's just a matter of every quarter we're looking at and creating their plan alongside of them.

Host: Joshua Carnes: Speaking of time and money, when that business owner is growing. What is the optimal time for a business to actually engage you guys? So when should a business owner go, I want to grow, I want to scale. I know the plan is to get to, you know, the big hairy audacious goal. I want to get to a hundred million, but when should they actually engage a business coach or you guys in general?

What does that look like for optimal success rate?

Guest: Andy O'Brien: We, we, so just for clarity. Us combined, our two, our company now has a 38. 7-month retention with clients, 38 months. We're over three years. He's had clients for six, seven years. I've had clients for 10 years and they're scaling. So I want to just clarify that, that it's it's working.

Dr. Michael Hartley PhD.: We have a bunch of, we actually have a bunch of awards that say how we have like best client results across the globe with coaching, like specifically

Guest: Andy O'Brien: And so I always say yesterday. So it used to be when I first got into the business 15 years ago, if you needed to coach, you were in trouble.

It was already too late. Now we've been, we have done triage. Okay. We did triage in COVID. We did triage in the building 11, 12. We did triage back then too. I say yesterday's the day. If you're thinking about growing your business, Now is the time because no matter what, if they've plateaued, right, if they're plateaued, they don't know where to go.

They don't have a trusted advisor. They are in their open mindset, right? They're open to being guided and collaborating with others to grow their business. And we always say, you know, just like us, we believe in coaching. We have a coach. We hire him. He puts his foot, he's our unreasonable friend with his foot in our ass on occasion every month.

It's how we've continued to be able to scale because we have blind spots. So I always say yesterday or tomorrow

Dr. Michael Hartley PhD.: most business owners aren't ready for coaching. So they start with education, right? So most business owners start with us with the educational wing because they're just not ready for coaching.

And then over, you know, a couple of months they become ready for coaching. And to be honest with you, if you're looking to scale your business, you need to coach at least three years in advance. You need, you need to coach at least three years before you're really ready to either scale or exit minimum.

Guest: Andy O'Brien: , because that's the time that allows us to do the alignment if you're going to sell, because when they come to you, they want to sell, right? When we get involved with it, they don't, they want it done now.

You know, the one challenge that every business owner has. We'll face when coached by, it was really funny. One of the newer clients called me the hard one and Hartley, the soft one. And I'm like, you have no idea

Host: Joshua Carnes: that's totally too early in the process.

Dr. Michael Hartley PhD.: Come back to us in six months and let us know if you feel like

Guest: Andy O'Brien: It's the process of getting them to understand us. Only go as fast as they go, right? They do the work, they get the guarantee, they don't do the work, they get fired. We can't help them if we run blind. And that's a big part of it is, is the only way coaching works with business owners is 100 percent open and honest conversations. Are, are, we work just like a CPA or an attorney.

Everything you say is confidential. Everything you say, unless you tell somebody who's going to stay on these coaching calls. Yes. Does our team know? Cause guess what? I need input. We have a team of four very educated plus 1, 200 coaches there. I promise there is a coach in some business somewhere that has the same issues you have.

We will help you solve it. But again, it's we, you know, we're not genies. He can't just blink his eyes and have people just, Oh, this shit will go away tomorrow. Because every business owner that engages with us when they start to shift for growth. One of their key employees, one of their partners, one of their somebody in there will start challenging them on the what and the why because they are not in the coaching program.

And that becomes a challenge for them to now to coach their team through changes, through growth, through, Oh, we're going to make these and this is what it's going to benefit everybody.

Host: Joshua Carnes: So I think we've hit a lot on. Why do business owners really need the coaching and really need some help and the benefits of that?

One of the ways that I came to know y'all was not through coaching ourselves but in trying to help other businesses. So when it comes to other consultants or other business professionals, other exit planning people, you, you know, what is the reason that They should be recommending you guys to their clients?

So industry professional-wise, right? So other M and A advisors out there, other business brokers, whoever it might be, why should they be introducing Andy and Dr Hartley to And Action COACH to their clients?

Dr. Michael Hartley PhD.: The easiest answer there is if they don't have a system to coach people through, send them our way.

And then that business becomes more successful for them to make more money, right? At the end of the day, you make money when the business actually sells. And so, for that to happen, you send us and we'll get it ready to sell. And then we'll hand it back to you and go, sweet. Now I can go make my money.

Right. We are, our profession is, is educating and coaching businesses to get to that point. And so, if, if you don't have a system that's been around for 30 years, like ours has send them our way. And as I mentioned, We'll give them a complimentary session to start with, to even see if we can add value, like before we make sure it's a fit exactly before we enroll anybody, we'll sit down with them for one to two hours and go through their numbers and go through their marketing and go through their business to outline, just make sure we can, in fact, get them an ROI and get their business where it's at versus going, , no, like this isn't. This isn't going to be a good fit.

Host: Joshua Carnes: So I, and I, you know, we've said ROI a lot and we've, we've lightly talked about it, but like, what is a real ROI? What can a business owner actually expect if they engage you? What, what is a legit ROI for them, to make the, the, the time and financial investment with you guys?

Guest: Andy O'Brien: Bare minimum, it's one to one for every dollar they spend, they'll get a dollar back bare minimum. That's the, and for people that are, that should be enough, but as DMH said, we document all this stuff at the end of one year. We can document if they do the work and they follow the strategies because the goals are theirs, right?

If they come to us and go, I want to have all these goals and then they don't do any work. We fire those clients. We just don't have time for them. We do not need the charity work. And usually, it's everybody else's fault. If they do the work we know in one year, our firm 3X. We know bottom line, bottom line, bottom line.

So if they had 10, 000 in profit this year, they could have 30, 000 profit next year. I have a client right now that was a negative 140, 000 because of some poor planning in July. Right now, they have 260, 000 in their savings and bank account because we had to do a massive shift with people and other areas, okay?

That was a new client. It's just that math is easy. People are hard. We got the math down, then we moved the people, and now Production comes up, we know that math, like the back of our hands. And there's a lot of times people come in. I want to talk about the team. I want to talk about these great numbers first. Well, you know, nothing has changed.

I don't want to talk numbers first. We don't care. Our process looks like numbers. First, we, if we, we go through the numbers with them, when they start managing, just like we manage our business, we have numbers. He, sends out a report every Monday. Or, I know exactly where our business is at. Our finance people give that to us, but all of our clients, 3X return first year, seven to 10 second year, documented.

Dr. Michael Hartley PhD.: It really is that straightforward. And we could go through example after example, after example, I mean, sitting on a, with a client on Tuesday of this week and their projected top line was to hit a million for the first time. They did that. Now, they thought that their margins were going to stay the same.

And so they had a projected profit. And I was looking at their numbers because they were freaking out about some things in their pipeline. And I was like, let's take a look at this for a moment. What has your profit done this year? Like cash, not just profit, but cash on hand, right? 2. 1 X higher than they had forecasted.

Wow. I'm like, and that was that that's above forecast, right? So we'd already forecasted growth and what that was going to look like and their return on coaching. And then it was two X higher than what they had actually forecast. And I'm like, can we stop freaking out for a moment? Y'all like you're doing some really good things, right?

So, we can talk about ROI. It's not like, some fluffy thing that a lot of people talk about. And if you're going to get an ROI from us, you have to be willing to do the work. Right? And we can show you on paper the ROI you're going to get. It's really straightforward. So,

Host: Joshua Carnes: Great, great conversation today, guys. Thank you so much for hopping on. So if someone wants to get ahold of you, if someone out there is watching and they say, it's time for me to scale, it's time for me to grow. What's the first steps? How do they get ahold of you guys? What does that look like?

Dr. Michael Hartley PhD.: ActionCoachCentralTX.com It is the first place to go. We host a handful of complimentary workshops and stuff like that. So that's an easy way to see value without even needing to engage us just yet. We have a dozen different resources that business owners can just jump on our website and download completely for free.

A lot of them are literally like Excel files and tools and templates that they can download and start using today in their business. That's a big thing. Like when we do our workshops, people leave and they're like. You know, this wasn't just fluffy. It was like, I can actually like to apply it tomorrow.

I'm like, that's the point, right? We, if you're coming to us, you're going to start applying things immediately. So that's the first place to engage.

Guest: Andy O'Brien: And along with that it's not us talking about it on that website. There are literally all different types of testimonial videos from past clients on this site too.

They can tell you about it and they're probably business owners that people know, right? The other way is they can call me directly at (641) 420-8496. Or [email protected]. They can reach out to myself, as you learn, Taylor will probably be redirecting and engaging people. She's my secret weapon.

Host: Joshua Carnes: full disclosure. I bypassed both of you and went straight to Taylor. I was like, I want Dr. Harley and Andy in here. So I went to the master,

Dr. Michael Hartley PhD.: you come to us directly. We will mess that up. LOL!

Guest: Andy O'Brien: So, they can get ahold of us that way. We, always ask people go get social proof.

There are, like you said, there are thousands and thousands of people out there who claim to have a system and a process we know ours work and we have the people to prove it

Dr. Michael Hartley PhD.: 30 years with. In the system where the instance Action COACH was formed over 280, 000 clients have gone through the system successfully that alone, should speak to, the legitimacy of, of how we'll get somebody else to get their business working without them.

Host: Joshua Carnes: So, we'll wrap it up here. I just want to say thank you guys again for coming out. And then for those of you who know me do you want to give a testament to them? , we've seen the process we've sent clients. We've had them come back, be able to be sold. It's a, it's a great system.

So if you enjoyed what you heard today and you want to keep the conversation going, be sure to connect with us on social media. You can find us on Twitter or X @TheExpExchange, or visit the website, expert ExpertExchange.pro. That's ExpertExchange.pro This and all videos, podcasts, and audio will be available on there.

And if you want more information, and if you want to go get those resources that they talked about today, you can find those with our expert guests, you can reach out to them at (641) 420-8496, or again, online, those free resources. ActionCoachCentralTX.Com again, that's ActionCoachCentralTX.Com.

So remember success is a journey. We're thrilled to be a part of it. And we'll catch you on the next episode of the expert exchange.