And the question I get asked most is if you had it to do over
again, what would you do differently? And to be honest, you know,
it's I want to spend twenty one years as a CEO building billion dollar
businesses for other people. I would have started my own empire earlier. And
I do think the American dream, call it the entrepreneurial spirit far from dead.
You know, based on my activities in the last couple of years,
there's about to be a resurgence I think in small business and small business becoming
bigger business. You were listening to Carrie Let'sa's Financial Survival Network where you get
valuable information you just can't find anywhere else to thrive in today's trying times.
You need the Financial Survival Network now more than ever. Go to Financial Survivalnetwork
dot com and get your free newsletter and gift. Financial Survival Network now more
than ever. Welcome you are listening and watching the Financial Survival Network. I'm
your host, Cherry Lutz. Hey, we're just about the at the end
of October, and hey, so far no crashes. But person you're about
to hear from isn't here to talk about crashes. No, he's talking about
building your billion dollar dream and author and also returning guest author of new book
Empire Builder, The Road to a Billion and his name. Your name is
Adam Coffee, and your book is officially an Amazon bestseller. The only place
where it's not a bestseller now, I think is in Antarctica, Oceania.
It's a bestseller Asia, Europe, South America, North America, all these
places. So it's a book you definitely want to get, Adam. It's
great to have you back on. So according to your book, the American
dream is not yet dead. It is not Jerry and glad to be back.
Thank you for having me back. Hello to all your listeners out there.
I would tell you a matter of fact, you know, the question
I probably get asked the most. I spent twenty one years as a CEO
building building three companies for nine different private equity firms, and the question I
get asked most is if you had it to do over again, what would
you do differently? And to be honest, you know it's I want to
have spent twenty one years as a CEO building billion dollar businesses for other people,
I would have started my own empire earlier. And I do think the
American dream. Call it the entrepreneurial spirit. Far from dead. You know,
based on my activities the last couple of years, there's about to be
a resurgence I think in small business and small business becoming bigger business, which
is really what the focus of my book was about. All right, So
how do you take a small business and turn it into a billion dollar money
maker? Well, let me start with a story if you don't mind.
You know, when, uh, not too long ago, a billionaire and
I have an NDA in place, so I can't disclose the name, but
I said, you know, please come see me in Granti's, Connecticut.
I'm having a problem with a company I own, and I like to talk
to you about fixing it. Giant company. Everybody in America would know the
name of this company, and it's kind of lost its way over time.
And you know, he's talking to me about how do you fix this this
this large business, and and you know, we've had three CEOs come in
fail and it's like, you know, what, what would you do differently?
And and to answer your question, I'm getting there in a roundabout way.
But the answer is, I don't fix the big company. I go
back to the unit level economics. I don't need to fix six thousand service
vehicles, you know, and hunger. I got to fix one truck,
one service call, one service event. And when I focus on the unit
level economics of this business, in essence, I'm fixing this global behemoth.
And one of the things I noticed, Carrie was that you know, when
the statistics are just scary and shocking. If you go to SBA dot gov,
you know you and you find out about small business thirty three million small
businesses in America today, only seven percent get to a million dollars of revenue,
only forty percent are profitable, more than half will go bankrupt over the
next five years. Why can't anybody seem to get it right? And the
more I looked into that as a guy who's bought fifty eight businesses, to
me, it all comes down to unit level economics. If you know,
in order to build a perfect big company, you have to start by building
a perfect small company. And if you can get then perfect business dialed in
between one hundred thousand in revenue and a million in revenue, that I guarantee
you what you have is a scalable business that with some tools that I talk
about and teach you can get to that elusive billion dollar mark. But it
starts by building the perfect small business. Unit level economics are where most people
go astray, and tons of entrepreneurs tell me, you know, Adam,
I'll worry about how to get profitable when I get bigger, and I tell
them wrong answerabout to get profitable when you're small, because otherwise you waste time.
And that's the white thing we can't buy. So true, and one
of the things that I do in my spare time, I was a mentor
for Service Corps Retired Executives SCORE, and I built a number of businesses,
and I specialize in this thing called the ninety day turnaround guarantee, the day
turnaround, because at this point in life, having done it with myself,
I can walk into virtually any business that's not making money, that's losing money,
or that isn't profitable enough, and I could spend literally an hour there
and I can turn that company around to ninety days. How because I've done
it myself. Because all the stupid things I've done, I can see in
the others and more stupid things that I've never even thought of. As we
get older, you know, old guys rule, you know, because we
learn, we learned from having already made all these mistakes, you know,
for for sure, And I think about, you know that, what you
just said, the ninety day turnaround. So I still look under the hood
of hundreds of companies a year, and I'm doing that doing operating partner work,
you know, for pe firms, or I'm doing it as a coach
mentor to CEOs and founders who are scaling their businesses and trying to build them.
And I apply this thing I call the thirty twenty ten rule. And
you know, service businesses. Not to sound sexist, ladies, but you
know, my world, my wheelhouse is guys trucks broken stuff, guys trucks
building things, you know, guys trucks doing something at a location. And
I look at those businesses and it's like, you know, you got to
turn thirty plus percent minimum at the gross profit line. You got to have
SG and A at lower than twenty percent, and you have to have a
minimum a dime amount of dollar net profit at the bottom. And if you're
not in that thirty twenty ten wheelhouse, just by looking at one financial statement,
I know where to focus my efforts. You know, if I'm under
thirty percent gross margin, I got to work on unit level economics, not
charging enough, my service costs too much if I'm if I'm over twenty percent
SG and a I'm spending too much money on the back office, and all
of these things I think we learn over time. Help us now just quickly
get in evaluate a business, and once we know where it's broken, we
know where to fix. Yeah, and usually it's a combination of those three
things for sure. You know, sometimes there are costs are just too damn
high, right yeah. And that could be the cost of goods, cost
of service is provided. It could be they got too many people working there,
you know, could be a toxic employee, that's uh the cause of
it. There's so many potential causes. But like you said, you own
in immediately and you know exactly where to look, and then the and then
it just becomes a question of implementing solutions, right. Yeah. It's you
know, strategic based, you know, initiative strategical, and you know strategic
planning, you know management systems, you know systematizing using KPIs. I mean
all these things. You know, I learned this stuff, you know,
back at GE and the and the Jack Welsh era, and you know,
became a turnaround guy there and at GE when I was was there for for
the ten years I was there, the company was growing so fast it was
doubling in size every two point eight years, and that equates to a thirty
percent compound annual growth rate. So the other thing that I'm known for a
time game. Yeah, yeah, that's changed quite a bit over the years,
you know, over you know, one of the things that I've known
for is building strong culture and then bending the growth curve and getting companies to
achieve and hold a thirty plus percent compound annual growth rate. And there's a
lot of different tools to use to do that, but you know, essentially
it's like all of the experiences that I've had across my career, you know,
just kept you know, kept being additive to each other and ultimately,
you know, ideal ideal in cliff notes. And so what I try to
do with this book was to give entrepreneurs, whether they were a startup or
already had a business, or they were a transitioning fortune five hundred executive is
running a middle market you know company for a pe firm, you know,
try to give them the tool kit then an entrepreneur needs to be successful in
any size business and then to give them, you know, kind of the
tools that you use at different size increments to help you then continue that that
journey. And the problems I see in companies that are call it between ten
and thirty million a revenue very different than the problems I see when they're one
hundred to two hundred million in revenue. And so as entrepreneurs pick up steam
as they learn, there's different tools that I pull out that get applied and
and and help them continue to scale. And so my goal and objective really
when I rotated out of the CEO C a couple of years ago, was
instead of running and impacting one company at a time, I wanted to have
a positive influence and impact on multiple companies at a time. And so that's
what I'm doing today. I'm having fun. I work more hours now than
I did when I was the CEO, and by the way, I make
more money now than I did when I was a CEO too. So there's
there's that risk reward quotients now you know better aligned I think is you know,
as a as an entrepreneur. Again, here's a question for you,
Adam. When you walk into a company that's maybe losing money, maybe circling
the drain, and you're not doing this for free, how do you get
them to write you a check when they're circling the drain. Well, generally,
I try to start by focusing on companies that have what I call are
enough clay. There's enough clay on the potter's wheel, so it's a big
enough company to where I could instantly redirect some spend to create some capacity to
implement change. But when I'm talking to shareholders or I'm talking to a board
of directors, for me, it's like, look, this is how I
work. I'm transparent, I have a track record, I've got billions and
exits, you know, And this is the methodology I go. I go
about attacking problems, and you've got to be able to sign up for that,
you know, in advance, knowing that, yeah, I am a
turnaround guy. I usually come in when others have failed or things have gone
south, and it's like I quickly need to arrest you know, I'm a
pilot. It's like you can pull back on the stick, but momentum keeps
you going down. For some level until you turn the corner, and so
you know, it's like the patient has to still have a pulse. Although
I've done turnarounds in companies where I thought, you know, potentially changed me
up on the door here, you know, but I managed to resurrect the
patients. So patients, I think is required. But you know, another
place where I'm a maverick, I just do not believe in the fact that
profit and culture are mutually exclusive. I believe that you can have a really
strong employee culture, you can take care of employees, and you can make
shareholders a boatload of money. And that's always been my methodology for success,
and I think it's more popular today. It certainly wasn't if I roll tape
back twenty five years ago when I was a CEO for the first time.
But you know, I think we've evolved. You know, if you want
to get employees, and everybody in the world wants to be a TikTok star
and a social media influencer. But unless, you know, unless you can
get people to work, if you want them to come work for you and
stay, you've got to have a better culture in today's world. And so
I really focused on strong culture gets an engaged workforce. Engaged workforce takes care
of clients. Revenue just kind of rangs from the sky. So like,
what sized business do you specialize in here? So it depends. As a
CEO, I was kind of a guy who would come in at about two
hundred million in revenue and take it from there. And I was a buy
and build guy. So you know, one of my empires was twenty three
companies bought and put together. Another one was thirty four you know, companies
bought and put together. As a coach and consultant, I'm finding myself my
sweet spot is below the lower middle market. So this is this is entrepreneur
founded, not yet a private equity backed portfolio company, haven't been sold yet
for the first time, they have aspiration to scale, to get bigger and
then potentially see their first exit. And so I'd say my specialty today is
is I have clients as small as a million in revenue. I have clients
that have you know, four hundred million revenue, but kind of you know,
call it one to fifty million. Is a sweet spot where I think
my skills can have dramatic impact in a short period of time. With that
entrepreneur you know, helping them, helping them get over those hurdles that have
a stemy demp And part of that goes back to Carrie too and buying fifty
eight companies, I noticed something And most of the companies that I bought would
be average twenty to thirty million in revenue. And I noticed that entrepreneurs just
had this kind of plateau in analyzing it. It's they were to be successful,
they had to be anal retentive control freaks. And what happened is they
got bigger, is they ran out of bandwidth. And I needed to teach
people how to go from being the first chair player in every section of the
orchestra and to teach them how to be a conductor, how to let go,
how to hire people, how to run and manage process rather than tax.
And so when an entrepreneur finds that gear boy, you know, a
revenue starts to take off. Okay. So one of the things like for
a company that's not doing as well as it should be, especially when you're
dealing with an entrepreneur, is the psychological aspects here, the emotional aspects,
because they need that, they need that external view because they can't, you
know, the old saying, if you're in a hole, the first thing
you need to do is stop digging. They're in that hole largely because of
emotional reasons, whatever they might be. Right, So you've got to be
part armchair psychologists here as well, don't you. You really do. And
I'll say even as common for me to encounter in this size entrepreneur. I
just wrote an article for Forbes about it, and I called it the arrogance
of success. And there are times, and I mean that in a loving
way, not in a negative way, but there are times where, hey,
we beat the odds, you know, we beat that we're one of
the seven percent that got to a million dollars in revenue. Maybe we're one
of the four percent of the seven percent who got to ten million in revenue.
And so we start to think I know everything. You know, I'm
impervious to making mistakes. It's not going to work good for you. No,
And I don't need help from from anybody else. And I think one
of the things that's worked for me is just you know, in life,
when you have coaches and you have mentors, sometimes they come at it from
an academic perspective. I've walked the walk I've been in their shoes. I've
built multiple companies, I've had billion dollar exits, and so I come as
not not a theorist, but a practitioner lived and walked in their shoes,
and so sometimes I can break down those artificial defenses that they have and really
get inside and help them and be helpful to them. And you know,
my engagements clients do by the way, or a month to month, So
when when if I, if I don't add value, fire me, you
know, And I can tell it early on if someone is coach a bull.
And that's that's the key to getting help is you know, will they
accept the help and advice? And if they will, I can work with
that kind of person, all right, And that is really are they teachable?
And you know, but especially if the business isn't doing well and you're
the entrepreneur and maybe you're having trouble making payroll, maybe you're having trouble making
your mortgage payment, it gets really emotional. And then oftentimes the entrepreneur will
be totally enveloped in fear fear based mindset. So you've got to like shock
them out of that. Right. You know, there's another group I'll tell
you by the way, So so what you're mentioning, I see again,
and I see it again when entrepreneurs get over at the age of fifty and
so, they were successful early in their careers, they were building a business,
and they start to become risk averse as they get older. They recognize
that they've probably got too much asset concentration their whole world's of business. They're
starting to get older, and so now they stop, you know, they
stop making good business decisions because they're afraid to monkey with you know, this
thing called their company, which is the source of their future retirement if they
monetize it. And now they start making mistakes because they're not taking, you
know, taking the risks that they should be taking in order to keep the
business growing and going. So I see it early when there's some struggle,
but I then see it again as people get to a certain age point.
That's usually when I started to counsel people. And again I wrote an article
called the rule of one thirty. And if an entrepreneur takes their age is
a two digit number and their percent of net worth tied up in their company,
and you add those twos, you know, two numbers together, if
it equals more than one thirty. Chances are you're making bad business decisions and
you have too much risk in something bad happening to that business. Think of
all the things that are going on in the world today. We've got wars,
we had pandemics, you know, good lord, there's just so much.
You know, the economic cycles are are happening much quicker than they used
to, and it's a volatile world, and so we need to be concerned
about asset concentration and diversifying risk. And so I see risk everywhere, and
I see people, you know, kind of it at the start, being
too nervous, you know, or then at the end getting too conservative,
right, and both yield the same result, which is struggling business. So
what can we learn from Elon Musk when it comes to risk taking? Well,
yeah, so Elon would be my personal hero. Just from this standpoint.
I call Elon the this generation's version of Howard Hughes and and I think
what makes Elon unique, whether you like him, love him, made him
whatever. You know, Hey, here's a guy who has a serial entrepreneur,
started three businesses and completely different industries and had multi billion dollar businesses come
out of those visions, and you know, you think of of SpaceX and
PayPal and and Tesla, and boy, any one of those companies could have
imploded and gone south. And you know, it was a stock trader.
I think of Tesla and all the debt they had, and it was kind
of like Amazon too, you know, and all of the infrastructure investment that
was required to build this behemoth. Once it turned the corner, then you
know, they become everybody's you know, everybody has a love fest with the
potential of the stock. But boy, a ton of risk. But they
took that risk, and they were rewarded for taking that risk. You know,
it's the old the thing. It took me ten years to become an
overnight success. Yeah yeah, it's like people think like Tesla kind of it's
been around for twelve years now, I think, or maybe fourteen years.
So, but downright miraculous when you think of the auto industry, where we
haven't had a new entrant, successful entrant in the auto industry basically since before
the Great Depression. Yeah yeah, yeah, so you think, yeah,
he's Preston, you know, Tucker. But he got it right, you
know, and and he actually made it work. He was a Tucker,
who you know, but an ace engineer, you know. So it's kind
of amazing that he could pull this off. And it's not done yet.
You know, He's got other an AI company going, Neurolink, which just
think about it. All the millions of disabled people around the world, spinal
board injuries, everything, and if he can somehow get these people to work
walk again, I mean that made maybe his greatest achievement. And I think
AI ultimately so not just from a health perspective, but I think AI in
general will completely revolutionize the world as we know it. And I think right
now everybody's playing with it. We're not really sure how to use it or
how to put it into our businesses. But my wife was just telling me
yesterday she was a drive through at McDonald's and it wasn't no longer manned by
a person, It was AI. And the AI was really good at taking
the order and understand she's Hispanic, understanding her English, and and you know,
getting her through to the first person she encountered, which was the person
who gave her the food, you know. And so it's touching, it's
touching everywhere. So I think Elon is just a serial entrepreneur who knows how
to think on a level that most of us just can't comprehend or understand.
And while he's yeah, and while he's you know, there's some volatility around
him and X and what have you. Again, I go back to he's
the modern day version of Howard Hughes in my mind. You know, it's
like just their technology, you know, the wealth of creativity and his success
and multiple industries is just something that really we we all should aspire to learn
from, you know, because the world's filled with one hit wonders, Yeah,
people who had one idea most people at best, or one hit wonders.
Yeah. And speaking of that, I've been blessed, you know.
So I'm a I'm a three hit wonder now right on my books up there,
three or fourth. So hey, you know, when you were mentioning
Elon being the modern day Howard Us, it reminded me of the story when
Howard Us went to Las Vegas and he checked into the desert in and they
gave him the top floor, basically the entire floor, and he's there for
like a couple of weeks, and they go and send mister Us. You
know, you have to leave as we got high rollers that want this suite,
and you don't even gamble and says, you know, let me get
back to you, give me a little bit, and basically calls up and
says, how much do you want for the place? Yeah, he buys
the hotel and I can see Musk doing something like that, you know,
I really could. Well, you have to think about Twitter as being a
good modern day equivalent of that or X and so Musk wants to have a
voice. So what does he do? He buys the largest platform that would
give him a voice and says I own it, you know, and now
everyone hates them. Well, yeah, I think that the final chapter is
not yet written there. So can he make money at this? What's your
take? I mean, this is a turnaround because that place was circling the
drain because they were basically a government organ and they weren't there to serve a
market. They were there to provide a platform for certain narratives, right stare?
So do I think he can't? Yo? Yo? What? I
would not bet against him, And I'll tell you why. He has been
around the drain, as you said, multiple times with multiple companies and managed
to take that I'll call it the energy a circle in the drain and turn
it into something that was pretty special. So I would not discount I would
not take the short, you know, on the over under. I wouldn't
take the under on anything that Elon does. You know, maybe hyperlink,
you know, maybe I'd have to think about that one for a bit.
But yeah, the Vegas loot. But they're including it, you know,
they're building these tunnels. Now. People are looking at it and saying,
can't possibly work. But once you add a twelve or sixteen passenger van to
the mix, and then you can take you know, literally five times more
people to where they want to go per hour. Yeah, well, of
a sudden, it starts like looking pretty good. I think in his mind
most everything he comes up with is visionary and it's going to push the envelope
of humanity and technology. And so some things that fail won't fail because they
were necessarily bad ideas. They may fail because the technology wasn't there to support
it in today's world, or it was ahead of its time, what have
you. But I would I would never count him out and gently, all
right, I wouldn't bet against him, all right, So the book tell
us the name again, it's called Empire Builder the Road to a Billion,
and essentially it's the tool kit to take you from zero to a billion and
the stages of growth, the tools that are required, how you adapt,
you know. And again I'm a CEO. I don't like long meetings.
And so this is the Cliff's Notes of thirty five years of turnarounds and ze
experience, and it kind of builds off of the other ones which were more
singular in their focus. This one is broader and it's really intended for entrepreneurs
who are on that journey and hoping to add some wisdom regardless of what stage
of growth they're at, to help them be successful. Okay, well,
hey, I love it and definitely going to get a copy. I'll have
you back on after I read it. Talk about some of your anecdotes experiences
which are the best of luck on the book. And they've got a question
for Adam myself. The email address is kl at Carrie Lutz dot com.
Shoot me an email and the links, all the links you need will be
in the show notes to this interview on Financial Survival Network dot com at a
bit a pleasure. We will talk to you again real soon. Thank you
for having me. Thanks for listening to Carrie Letz's Financial Survival Network. Your
solution to today's trying times or the latest go to Financial Survivalnetwork dot com.
Financial Survival Network now more than ever,