A lot of times, when people come to me, it's because of that. They say, oh, geez, you know, this terrible thing happened to you, it's just happened to me. And I always say, you know, if you're a small and medium-sized business, there is virtually nothing that you've been through that I haven't, mostly because of that situation where I say I have more guts than brains. I will go and do those things.
A lot of times, I get people coming to me saying oh, you know, this happened to me to you, it's happened to me, and I'm in trouble. Can you help me? And that, you know, that's sort of, like, you know, this little mentoring that I do on the side when those things happen. But it's just a part of life. I never tell people, you know, hey, go out there and fail because I don't wish failure on anybody.
It's not fun. It's not a good feeling. But at the same time, when that does happen, I always turn around and say look, you got to look at it as a learning experience. You're going to get through this, and you're going to do it better next time. Whatever it is, this situation will face you again, or you will see it down the road somewhere, right?
The information provided in these episodes is for entertainment purposes only. It is not a guarantee of success, or to be construed as advice of any kind. You should always seek advice from local licensed professionals before making any decisions.
The dictionary defines an entrepreneur as a person who organizes and manages any enterprise, especially a business usually with considerable initiative and risk. People often start a business without much choice, perhaps due to a job loss or just being dissatisfied at work. And they come up with an idea they just know can be successful. They become entrepreneurs by accident. That is to say their success or failure happens by accident, not with intention.
My name is Mitchell Beinhaker, I'm a corporate attorney and a business advisor. You're listening to the Accidental Entrepreneur, my podcast about how to achieve success on purpose, not by accident. Join me along with our monthly guests, where we share our knowledge and help you get a hold of your business. And now on to today's episode.
Hi, my name is Shawn Khorrami. I'm a serial entrepreneur having started and managed more than a dozen businesses from the ground up, growing them to eight and nine-figure revenue companies. In the process. I've managed 1000s of employees servicing 10s of 1000s of customers across a wide range of verticals, both in products and services.
All right, Shawn. So thanks for joining me on a well, actually it was warm and now it’s freezing in New Jersey. I know you have, if people are watching this, although it's a background that is your pool, isn't it? That's your backyard. Right.
That's, that's my pool over there. And that's our main office right there, that building in the background.
I can be jealous in New Jersey.
It's very cold here, too. We may have hit we may have had 65
Oh, wow. Get out the fur coats. All right. We're going to tell your story today and share all of your experiences. I know you've run and grown and sold many companies. That's what this is all about this, this podcast. So maybe we can go back to you know where you started, where you grew up, how you got started your background. Take me through the story. I'll ask questions as we go
Yeah, sounds good. So, you know, I guess the other day someone asked me, what did you do before you were an entrepreneur? Like, how did you get on to this? So well, before I was an entrepreneur, I was a little kid. Yeah. It's a little bit different than a lot of people but I'll go over it. When I was a little kid, I grew up in Iran. And my father had a construction company. He built roads and different buildings and bridges.
There was a lot of development, though, you know, you had all these, opportunities for companies to go and construct all of these different places, because they're literally building the roads from the north part of the country, to the southern part of the country, and all those things. And so, my father did a lot of that work. And from a very early age, you know, today, it might be not so safe for kids to go, you know, people may not think of it very highly, but my father from a very early he took me to construction sites, and for a little kid, you know, you're your little boy, and you're hanging out at these places, and you're climbing the, you know, big giant bulldozers, you know, playing around with them.
That was, you know, something that got me really jazzed about what my father did really, the entire time, from that age on my thought was, hey, you know what, that's what I'm going to do. When I grow up, I'm going to I'm gonna have my own construction company, I'm going to do these cool things that my dad is doing.
Did he own the small construction company, or was he a worker?
No, no, my dad actually owned the company. He had partners, there were a small group of guys that owned this company. So yeah, he was an entrepreneur himself. And so I was just thinking, you know, this is really cool stuff. That's what I'm gonna end up doing. The Iranian revolution happened, and my dad decided that it wasn't safe for us, and particularly me to remain in the country due to various factors there. And he made the sacrifice of immigrating to the US.
He was never really able to, you know, recreate his business. I mean, if you might imagine, as a 45, or 50-year-old, you move to an entirely new country, entirely new, everything, system, everything. It's a totally different world. But he did manage to get his hands on a couple of small income properties, which he was not very good at managing. And so what, you know, in those days, the professional management that was out there was more geared toward larger property owners. So, my dad being kind of a small guy, that didn't really make sense for him. And at the time, personal computers were just getting into homes.
So I had gotten a personal computer. And I decided, you know, totally by accident, right? Even though I always thought I was going to do my own thing, I'm going to get into this construction world and all this stuff. Yeah. But at that moment, when I was only just trying to help my dad, I said, you know, this, this thing is not going that well, for him is a struggle. What can I do? And I had this computer and I could, you know, put together a kind of a basic database program and use that
This is the early 80’s?
This is probably 84, 85, somewhere in there. So, you know, I got into my dad's business, and I started helping manage this thing. And things took off. And my dad pretty quickly told me, Hey, you know what, I have friends that are in the same boat. Yeah. So you know, I got introduced to his friends. And it sort of took off from there completely by accident.
And those are like green screen blinking cursor is five and a quarter inch floppy disks, right? It was, like 3k on them. There was nothing you could do.
I had literally two megabytes, I mean this, two megabytes of memory. That was it. That was everything that you could save on that thing. Right, right. And so I helped out my dad, I helped out his friends. And it grew into a separate business from what my dad was doing. Just sort of on its own, because, you know, I had this sort of niche that was there.
That was bookkeeping, for property owners, or what were you doing?
It was bookkeeping, sort of managing the tenants, managing the vendors, creating a marketing plan, because that was very difficult for small property owners back then. Or at least, my dad and the group of customers I got, certainly didn't see the product out there. So, you know, they were happy
Like marketing for new tenants and stuff as tenants turned out. Yeah.
Yeah, and altogether, how you deal with the tenants, how you, you know, maybe get rid of some of them. And also, I had this whole management system that I put together. And so that sort of grew and it went from there. It wasn't particularly what I wanted to do. It didn't involve some of that construction stuff that originally I was jazzed about, you know, to end the exciting, I never got into construction, I never ended up starting my construction company.
But I did start my own companies as I went on. But before that happened, I was a firm believer, and maybe it was because my father didn't, you know, sort of instilled it in me. But I was a firm believer in formal education. As time has gone on, I've figured out that that is not by any means a prerequisite to you succeeding as an entrepreneur.
I mean, I'm a proponent of it also. But it doesn't mean that you're gonna be successful. With or without it. It's really not a factor. Yeah.
It is really not a factor. But I just love that kind of cramming information into my brain. Or maybe I was just lazy, and I loved college life. But I went, I went in and I got a degree in mathematics. I got a degree in computer programming, which I felt would be important to my life, as it had been already. Right. And then I backed into a degree in economics.
You guys were in California, you set up in California, and you went to school out
Yep. Yep. Okay. I mean, went straight to LA and have lived in LA throughout.
So yeah, I backed into a degree in economics only because I had taken so many electives, that it was just easy to just take, take the remaining courses and get a degree, ended up getting a law degree. I then got a formal education in accounting, marketing, and sales. But by formal education, I mean that I took substantial courses, but I never obtained a degree. And throughout that time, I would do odd things, you know, like different types of things to make money, you know, selling things, you know, just different things as a college student that I was doing.
But I, you know, my friends would come to me and my classmates and stuff would come to me and say, oh, yeah, you know, I'm thinking about getting into this industry and applying to this company or that company for, you know, for a job. And it was just something that I never connected with. Recently, you know, within the past year, I spoke to my wife about it, just something that occurred in my head. I said, you know, I've never done a resume, ever. I've done bios, right? I've never done a resume. I've never received a paycheck from a company that I haven't had an ownership interest in.
Well, that's it's a good thing in my opinion.
But it's a good thing. And, you know, I always say, Everything's a gift and a curse. Right, right. One thing is, I've never been, I've never had a boss. We all have kind of bosses, I've had boards. And I've had, you know, capital sources as investors. Yeah, yeah. But have never had a boss, that daily boss, have, you know that they can tell you, “hey, go do this and go do that”. I've never been in the situation of an employee of a lot, you know. And it's important when you manage employees, I feel that you actually have walked in with anything, you've walked in another person's shoes, right? It helps you understand their perspective.
And so over the years, I've spent a lot of time even though I've never actually been in that position, trying to make sure that I have some level of perspective because that's a big shortcoming. If you don't, if you don't realize it, it makes you in my mind, not as good a manager, when you don't understand the perspective of the people you're managing. Again, I've never been in that position.
You are like an undercover boss, you know, you gotta go undercover to see it.
[laughs] Yeah, you know, I went, I went through a lot of training, actually, I put myself through a lot of training to sort of say, Okay, this is, this is how they feel. This is how someone feels when there's someone standing over them that can fire them,
But there's look as an, you don't have to, obviously, you've got to go the employer route, you're an entrepreneur, there's no requirement that says, Oh, you got to be an employee first. But I think it's very important, like you said, to understand, to empathize with them, because you will have blind spots, and you'll make mistakes. And you'll, you know, you'll do things that you think are good for the company, but really aren't, you know, your employees really aren't on board. And at the end of the day, that is your company, you know, and then you've run into problems and you can't figure out why and people are in the wrong position and then unhappy. They don't tell you.
A lot of work I've done over the years has been exactly that where you have someone who's an entrepreneur, you go in and you say, Well, wait a minute, who's here, what kind of position do you have there? And so what you have is, a lot of times there's this disconnect, right? There's frankly, a disconnect in this fashion. You as a boss can be very onerous, you can come off very onerous to an employee even though you, don't even feel like you've done anything wrong. You know, and so, there's a lot of those things that you know, over the years they come up, but I, I sort of never even thought about, like working for anyone I just started playing, you know, I said, you know, I'm gonna go and do things on my own.
And with everything that I always started, I ended up starting other businesses at the same time. And the reason really was that my entire perspective always was, okay, so I'm in this business, and I'm an assembly line kind of guy, you know, I have to look at processes, identify them, see how they run, well, how to best run them not to miss things to make the most efficient. So button. So I would, I would identify different processes. And, and they would end up a lot of times being another business that I would start, for example, I started a medical record company, only because it was a process that I noticed that was very inefficient, that was in some level of need. And I said, you know, there's a way to do this better. And I want to do this better. So I formed a company like that.
And then I ended up what I ended up doing was marketing that same company, to my competitors, the same people in my industry, people that were, you know, on different in different parts of the industry, like identifying different markets for it. And a lot of times those businesses ended up doing much better than the original business that that got me, you know, keep sort of keen to that. Oh, hey, you know, this is a cool thing to do. But it was, it was always the context of, oh, wait a minute, there's a need here. Or there's, there's some way that I can bring value to certain types of customers and certain or certain types of people.
Yeah, you solved the problem there, do you remember when you graduated? So and I was the same way in college, I had little businesses, I was always doing something. You know, in the summers in college one time I got shut down because you weren't supposed to operate a business out of the dorm, you know, that type of stuff. But if you remember, when you graduated, what you did first, because you didn't go and get a job, right? I went on to law school, right directly to law school, and then started work for law firms. What did you do when you graduate? What was your first kind of endeavor?
Well, the first, like, major one that I felt that I, you know, look at is starting a law firm. I want to start a law firm.
So you went straight to law school after college? Like I did?
I took a year off. Okay, I did some work, selling some supplements at that time, because actually, I was a bodybuilder. So, you know, putting together different supplements, which I always found that industry to be interesting. And at the same time, you know, there's a lot of hocus pocus in it. Where people claim something does something that it doesn't.
There's not a lot of regulation, you know? And stuff. I've seen guys make all kinds of money and they get in trouble. You know, they make one promise, and they make two promises, and they make five promises and make ten promises. If it was working well, so they make more promises, then it gets them in trouble. And that's a very multilevel marketing industry, too. Oh, yeah. I'm pretty familiar with the tip. But that Yeah, but that's a good way to make money. When you're, you know, in college, you're filling your time, whatever. So where do you go to law school? You went out in California also?
I went to Pepperdine. Yes. Mostly, because at the time, I also got involved in some real estate work, and also helped out my father at the time. And so I ended up yeah, not leaving. Staying local. Just because I had business purposes. I had my father that I was helping. And so, to have all of that stuff, I kind of had to stay local. So I did want to venture out some other places, but I applied to various schools. But I ended up not going.
So when you graduated, then you started your law practice. Because I remember coming out of law school, there was like a book floating around was like how to start your law practice. And every day, everybody was like, “start your own firm” who would do that you go, you went to law school, now go get a job. Like nobody understood it till you're out in the street, and you're like, This is terrible. I'm not working for people. I'm gonna start my law practice. That's exactly it?
You know, it was something that didn't fit for me to work for people. Same, same, same concept. I mean, you know, and then, what I wanted to do was I always, you know, I tell people the PG version of this, I have more guts than I have brains, you know, so it was not a hard call for me to go do those things. It still isn't. And so what I would do is just decide, hey, you know what, this sounds interesting to me. There's a need there. I can help these kinds of people. And it would just sort of start from there. Yeah, and just and just go with what's interesting to me what works for me mentally. And then also there are things that I would get excited about just because I read about them somehow. Maybe it could be a fiction book. It could be. It could be like, completely not real. Right. But it would get me excited about a certain type of industry.
Well, I think also, don't you think bravery comes with experience? Like I think, as you do it, and you try it, and maybe you fail a little bit, it's not as daunting as you thought it was. And you know, you're the man of your life when the business doesn't do that? Well, you pick, you know, you pick up your trousers and you go on to the next thing, you'd find other opportunities. I think not only do you get a little bit better at it, but you do get more resilient. I mean, you build up that resilience to the point where it doesn't scare you so much.
Yeah, you know, I, a lot of times people are used to, you know, and you see this a lot. You know, I have family members who are used to getting a paycheck. And as soon as that paycheck has gone, immediately, there's a panic that I never have had, right? Because I've gone many, many months without ever receiving a paycheck. Right? I sometimes tell people this story, you know, I survived that. Well, I've Yeah, I know, I've had situations where I couldn't afford electricity. I remember two weeks, where I would walk around my place with lanterns, I had Halloween lanterns that I had, I had candles and I'm not kidding.
You know, you gotta bootstrap your life. Look, I've been in situations where I was at partners. And let's say, you know, yeah, things are tough and times are going and whatever. And, you know, their mortgage is going to be, I'm talking like five days late. We're not talking a month late. We're not talking, you know, past the like, they're gonna get a foreclosure notice we're talking five days late, and they were panicking. Yeah, what am I going to do? I'm like, you're going to pay a late fee? What do you mean? What are you going to do? It's life, yeah, and it's like, to me, it's like, well, you know, you know, just always managing cash flow. And to them, they were freaking out, you know.
Ya! know, to this day, people, people call me up. Like, they'll say, oh, geez, this happened, like, they'll have some personal financial issue. And they'll be like, Oh, these things have happened. I gotta figure this out. And it just to me is like, okay, don't worry about it, you'll get through this, you'll get through this.
Being your boss. And being in business is not for everyone. Some people don't just have to go and work for somebody because they can't deal with it. Now, the ironic thing is, that they probably have less job security than you. And I do. Because we have control of what we do. If our business takes a turn, we're ready to deal with it, they get laid off. And maybe they get some severance to give them a running start, but for the most part, there's panic in their life.
It ends up being a new job search. And I've seen, you know, again, friends and family go through that. And if you know, I don't like how unhappy it makes them a lot of times, but I try to try to you know, give them comfort by giving them some of my stories, you know, which include, by the way, aside from that electricity, there are times where I would count the number of miles I had to a certain to meetings on a given days, because of the gas. I'm not kidding, right? I just sit there like, today, I sit there and go, “Wow, oh, my God”.
Of course, you’d never think about that stuff. But you know, even telling your friends and relatives, don't worry, “it'll be this. I've been through this”, it still only helps them so much. They're always like, well, “you don't know. Yeah, you're successful. You've never been through this”. And you have even more so than they realize.
Yeah, they say you know, it, you know, it was always like these things that I would be interested in. And I would just go “oh, you know what, it'd be cool to do that”. You know, and you have a lot of situations where Oh, yeah, great. Some businesses, like I said, it goes to eight, nine figures in revenue. Other ones failed catastrophically. You know, I've had horrible failures, that, you know, I've had to deal with for long periods that they just, they weren't just a failure on one day, it's a failure that goes on, and you have to deal with all the aftermath of it. And so, all of that stuff has happened as well. And you know.
You know, a lot of times, a lot of times when people come to me, it's because of that, they say, oh, geez, you know, this terrible thing happened to you. It just happened to me. And I always say, you know, if you're a small and medium-sized business, there is virtually nothing that you've been through that I haven't, mostly because of that situation where I say, I have more guts than brains. I will go and do those things. You know, and, a lot of times I'll get people coming to me and say, oh, you know, “this happened to me to you, it's happened to me and I'm in trouble. Can you help me?” And that, you know, that's sort of, like, you know, this little mentoring that I do on the side when those things happen.
But it's just a part of life. I never tell people you know, “hey, go out there and fail” because I don't wish failure on anybody. It's not fun. It's not, it's not a good feeling. But at the same time, when that does happen, I always turn around and say, “Look, you got to look at it as a learning experience, you're gonna get through this. And, you're gonna do it better next time, what you know, whatever it is, this situation will face you again. Or you will see it down the road somewhere” right?
But you'll be more prepared to deal with it. I remember over the years, and I don't do it as much as I used to a little bit now. I've been involved in all kinds of deals, you know, especially as the lawyer like, I would come in, I do the work and they said, Here, we'll give you a piece and whatever, sometimes invest, or whatever, I remember, I had somebody said to me like, Well, what do you do with your money, and I go, I would never let you do what I do with my money. They're like, why I think because you won't sleep at night, you'll be drive by your house at two o'clock in the morning, be walking around the living room, you know, it's just not, you know, there are some people are more bold, but you're right.
I mean, people have those experiences, and then they realize that there is another you do come out of it, you do come over to the other side. And for the most part, yeah. And you know, and it does make you more resilient. And it also makes you more creative, I think, to deal with situations, when you see that, wow, I was able to deal with that I was able to get that company back on its feet or sold or liquidated or whatever, and move on to the next venture. So what's like your core business right now? I know, you have several companies, and you're doing all kinds of stuff. What's your core business now?
What I say in one sentence, what we do is we help small and medium-sized businesses, SMBs by education, consultation, and investment, what that translates into, when you mentioned, I run a couple several businesses, is that we sit there and we create joint ventures with different companies. And we work at opening up different sales channels, and different ways of creating revenues. But we do it in, (the sweet spot for us) the form of a partnership with a startup or an existing company. So we have, you know, I run several different companies, some of them have been around for decades. And we just sort of what we did was we created a new LLC and a new partnership together. And we said, Okay, this is you're going to be your consumer business, and you have this other business that you've been running for decades, that's fine, we're going to start this entirely new thing with your brand, or startups.
So literally, I'm waiting for word from a venture that we're just starting that involves a SaaS, a software as a service. And you know, and they're brand new. So they just, you know, in the past number of months, I've put up various things, including their website, and they're, you know, they're ready to roll. And so we come in, and we say, okay, these are the things that we're going to do. And we're going to sort of, be a partner with you inside of this business. So we're more than investors. We're not we don't like just being investors. I don't like going to sideline decide or something. Right, yeah. So we're active partners, we sit there, we have ownership interest in, in the venture that we create. So that's our real sweet spot. We also do things like just coming in and saying, okay, look, we're going to create these various sales channels for your company. And what we like doing, and this is something that's just always been the way I am, I like taking the risk with someone, but I want the reward for it too.
Right? So yes, the reward, right, what I do is I say, “you know, what, I don't want a situation where you're just handing me money for something that I'm doing every day, or an hour per day or whatever”, that that doesn't, that doesn't resonate with me, what I want is a piece of the benefit that I bring, right? That is important to you as a business that ends up being something of value because you say, oh, you know what, I see what's coming in, and that company is taking a piece of what they're producing. So I'm a net positive for the business. So we also do some level of that. But again, all of these things we do, you know, it has to be the right fit. So for us, we sort of look at it as an application process is like okay, does this work? Can we bring the benefit that we want to to this company? And if we can we just say Not that that's not going to work because we're not going to be able to bring you the value that we want to, you know, we think is the right thing to do.
You're bringing like let's say fractional services to them, in the form of Marketing and maybe accounting and maybe, you know, admin and all that type of stuff. Yeah. In particular, are there any industries that you work in?
Here's a word from our sponsors, looking to get into podcasting, maybe to market your business for your enjoyment, or because you have a message you want to get out there. One of one Productions is a New Jersey- studio just over the George Washington Bridge that caters to the booming business of podcasting. They offer a comfortable atmosphere using the latest technology available to record your podcast, and they are a full-service media company offering both audio and video production services, creating both audio and video podcasts as well as video shorts for business and personal use. Professional audio equipment packages are available through their website for all budgets are sure to check out their podcast guesting kit created especially for our listeners.
Care for your health, care for the planet, and look Flippin great doing it. North authentic is a conscious haircare marketplace, offering the cleanest brands from around the world. Their pro stylists curate only the most fabulous nontoxic hair products that are better for use, shampoos, serums masks, and more. That gives you gorgeous hair without hurting your health or the planet. Hey, you've only got one life, one planet, and one glorious mane. Might as well treat them all as best you can right? Try a 100% clean haircare routine prescribed just for you using their link in the show notes. If you don't see a big beautiful difference in how your hair looks and feels you can tell them they're crazy.
Do you battle chronic pain, stress, anxiety, or depression? Well, if you take any supplements, or you're interested in natural alternatives you need to know about findyourhealthyplace.com. Find your healthy place has thousands of supplements to help you live a better quality of life, as well as natural solutions for chronic pain, stress, anxiety, depression, sleeplessness, and much, much more. Need guidance, use their live chat feature, and talk to a Wellness Consultant right on their website. And be sure to use our coupon code T.A.E Podcast for all your purchases to get the best prices at findyourhealthyplace.com Follow their links in the show notes to learn more about all of our sponsors. And now back to our show.
Yeah, so we do, for example, we do a lot of work in the food and beverage industries. I started several years ago, I started a small chain of restaurants which you know, again, another one of those things that I just started. That chain is still around, I'm not involved in it. But that's still going well.
That’s a good story. So you sold it or you are just not active with it.
Sold it. Sold my interest in it, they sort of went and there they keep creating and they're doing fantastic. I'm kind of sorry I did sell it. But I just it was just too many things I was involved in at the time. But food and beverage and specifically consumer products that go you know, in the food and beverage industry, we also deal with apparel, different you know, apparel is very broad, because you can have all kinds of different things that have all kinds of different business models.
These are all B2C mostly businesses yeah?
What we do is, we will get involved with b2b businesses, but we develop their b2c avenues, their b2c channels, that's what we do. So it may be that you're a company that's a wholesaler that has a whole distributor network that you're getting your product out and you have some level of consumer awareness, what we do is we create a Direct-to-Consumer channel or direct-to-consumer channels. So we create that relationship and put together everything from logistics to the consumers' hands. And I think in today…
The store, it could be a virtual, an E-commerce site, it could be all those things.
We try to stay all online. The physical store stuff is a little bit probably outside of our wheelhouse. But what we like doing is in today's world, a lot of times I say, “it's great to have a wholesale business, it's great that you have this distributed network but having a direct-to-consumer relationship is, I think vital and incredibly important”. And you see all kinds of companies do it. Their products may get out through a consumer network. I'm sorry through a distributor network right but they still have a direct relationship with the consumers so you can go buy a Nike shoe from Nike, I think right now. I haven't bought shoes from Nike, but you can also get them from the various retailers that are out there that, you know, get their products. So same type of concept.
So we create that for companies, for companies not as large as Nike. So for small and medium-sized businesses, and the reason I specifically started doing it that way, and being in business this way, was something I told my wife a few years ago, I said, you don't I love that journey of, starting from being employee one, to two, growing that into a medium-sized business. And what because to me, once a business reaches a certain size, there are so many stakeholders out there. That one, there's just a lot of stuff that has to happen for the organization to move forward, you know, a lot of different people.
Yeah, and at the same time. The other side of it is, I think, there's a lot of incentive to keep the business alive. Meaning that these stakeholders are going to do everything they can to make sure the business doesn't crash. And so I think there's a lot of challenges in growing that business from day one until it's a medium-sized business. So that's something that particularly interests me. So we keep ourselves limited to small and medium-sized businesses and partner up with them and help them grow. And there's a lot of interesting places where you see small business owners leave money on the table, essentially, both in terms of you know, and when I say money on the table, I mean, literal money on the table, and also in terms of the value they could bring their customers, right. So you know, both they're not making enough. They're leaving money on the table in terms of getting revenues in, and also in terms of what they can do and all the benefits, they can bring to their customer.
Is it because they're just so caught up with the day-to-day operations of the business and trying to make it that they don't see those opportunities that they don't realize that they're leaving money on the table?
There's a lot of that. Absolutely. There are also a lot of things that are going well in a certain way, right? Yeah, you keep doing it, keep doing it, keep doing it, right, which is, there's nothing wrong with that. And they should be doing that. But in today's world, for example, if you're just selling out of your website, or if you're selling out of one store, you know, there's so much more you could be doing. There are so many different ways you could be marketing your product, you know, you can be selling it on Amazon, you can be selling it on Walmart, you can be selling it on Etsy, there are all of these different sales channels that you could be utilizing. There are all these different ways you can be marketing, not everything's good for everyone. But you need to be marketing in more than one way. That's for sure.
Of course. Well, what happens if you get shut down by a pandemic again, and you're not, you know, you're not resilient? Look at restaurants, right? Restaurants just literally had no other option. They had no, no website, they had no app, and they had no delivery system. They just had to shut down. And then it became difficult. Some of them responded very quickly.
And I bring that up with people, actually are restaurants and the pandemic businesses that were heavily affected in an unprecedented way, like in a way that none of us in our lifetimes I've ever seen, right? And immediately without any problem, right? And then you see how different restaurants responded, how they how some of them were able to weather the storm, some of them were able to become and I'm not talking about big chains because that's a different world.
Yeah. And, they sometimes responded completely differently. Some people just shut down the next day. Some people said you know, what do I do next? Where's the opportunity? And they look for opportunities. And I always say, you know, whatever that situation is, there's an opportunity somewhere, and you got to find that, and then exploit that.
There's no question about that, change brings opportunity. I don't care what the change is. If it's a seemingly bad change and a difficulty that we really, as a company, whole society, or world economy faced. There are opportunities, and hopefully, you weren't one of the people that died. But there are always opportunities. I think when it's a prosperous change, there are even sometimes fewer opportunities, there's just more competition. And there's money flying everywhere. People are, you know, making bad decisions, they don't care. And then when it clears they're like what? You know, what just happened? So how do you guys do your prospecting for your business? Like how do you find these businesses? How do they find you? How do you choose them? You know, it's all it sounds to me like you're kind of run like in a, like a quasar incubator, sort of but your participants.
That's not a bad analogy. So yes. You know, the way We get them is, frankly, we have we talk, there's a lot of people that come to us only because, you know, look, there are not that much upfront costs, whenever you have a business like this, where there's not a huge amount of upfront costs, whoever is going to take the risk with you, you know, you're, you're saying, Okay, well, this is just going to add to my team, you know, this, you know, I'm gonna get people that are experienced, it's something they're just going to add to my team, and we're gonna go forward. So we tend to have a lot of different prospects out there.
But you’ve just built sort of the very big network
I sort of say, look, I said at the beginning, we kind of look at it as an application process of the prospects sort of saying, okay, these are the things that I have, these are the needs that I feel I have. And I, you know, a lot of times I'll sit there and say, well, is that the need you have? Or is it really, you know, this kind of a thing? So, you know, I always give this example, that was just pretty recent, you know, is a humidifier business that came to us right before the like, right, as the pandemic hit. And they were selling, they're doing very well selling a lot of units of humidifiers. And the first thing I said to them was, well, I mean, you're in a great place right now, you know, with all this, you know, health situation, people wanting to, you know, you probably are selling like hotcakes, like Well, no, people want this stuff.
One, we have a big supply chain problem, because we're getting our stuff, right, China. We got a big problem. Two, we, you know, we're starting to get some bad reviews, because we're not able to respond to, you know, our customers faster. We're just things are not getting as predictable. And yeah. And we sat there and said, well, you know, what do you have in terms of a subscription business? Because that's the first thing I go in the first place that a lot of times, small businesses miss, is they're very busy in new customer acquisition, right? And they don't take advantage of the customer base that they already have
Very much so, and it's much cheaper to keep a customer than it is to get it.
Yeah! It's, I mean, you know, this is something that big companies have known for many, many, many years. Right? It is much cheaper to market and keep a customer than it is to go get a new one. And so the first question is, where's your subscription business?Where are the essential oils and filters that you can sell today?
Yeah, we don't, we don't do that. Right. And it was just something that they hadn't put thought into, because they were getting all these orders. And so putting together those types of things. And by the way, that customer experience the customer, that whole thing becomes completely different. When you have an ongoing relationship with the customer, they're a lot less likely to turn around and give you a bad review. They're gonna give you second chances because they developed a relationship with you. Yeah. And so that becomes a whole different customer experience. And so you end up having an ongoing relationship with these customers that are, frankly, by the way, your best referral source as well.
Right? For anybody listening, don't miss the gems in the discussion. I mean, we talked about you advise people, but recurring revenue streams, and the opportunity to build recurring revenue streams through subscriptions, or whatever, strengthen the health of a business, and it takes the pressure off of you, as the business owner to have to, like you said, kill new rabbits every month, right to get after it. It's hard.
The funny thing is, that we created the subscription model, for example, for that business. That thing ended up dwarfing the rest of their business, which is the new customers that they were supposed to get in. And what we did was we changed that business around where we changed their, where they were sourcing their humidifiers.
So they weren't so dependent on global supply chains?
Yeah, it became much more expensive for them for a small period. But frankly, there was so much of a margin on the other stuff that we created that it was, it was something that was, you know, they could stomach it. And it made sense to them because that's where they're getting their new acquisitions. The funny thing was that they started getting a lot more acquisitions, you know, on the subscription model than they did on the humidifiers, some new acquisitions.
I'm talking to new customers that would come and say, I need this humidifier, right? From someone else, right? Yeah. And so what we did was we put that business together that way. Now, not only did it change the way that their customers viewed them, but it also changed the revenue model, as you mentioned, right where they have much more predictable monthly revenues where they can sit there and they can forecast better. They can do their hiring better, because they can say, oh, yeah, you know, we know we're gonna get this every single month.
Right? They can see different financial decisions, they can grow their budget. Growth leads to growth.
And then that sweating that you see with the business owners that was there, that sweating went away, because they were like, oh, geez, we now have a much more reliable revenue model. Right, we can count on something. And then we can from there grow. Which is exactly what happened with them. So that's a very typical thing that happens with small businesses, they're overly focused on new customer acquisitions.
90 percent of the time, that's all they know.
And the funny thing is, they'll tell you, well, I can't think of anything, I could have a subscription. And I always bring up another company, that we kind of consulted with for a while, that I worked with, actually closely, and they sell underwear, and they sell underwear on a subscription. Now, I always tell people, if there's someone selling underwear on a subscription, you know, things your business can do it. So, you know, I just always bring that up only because I want to have a lot of respect for exactly what they've done. But also at the same time to say, look, it's not only not impossible, I think you're making a mistake by not having a subscription model. Because of all these benefits, it brings. And also you're not thinking well enough about your business.
Right? There's no question about it. It's also part of what's the word, having a keep in touch program, right? That is your “keep in touch program”. I have a mailing list with two or 3000 people on it, they get the podcasts, whatever. But I also have estate planning. So when I do someone's will, we do things online, they have a secure vault, or whatever they pay $50 A month or whatever, it doesn't make us very much money, but it keeps them interacting with us and knowing that we're there when they need us and thinking about us every month and then annually review them and you know, things like that. And there are businesses that whatever they can do, maybe it's not a big moneymaker. But what it is, is it's a customer relations program. I'm a big advocate of those types of stuff.
I'll tell you something else it is Mitch, as things constantly change in terms of getting information on the customers that you have, right, that email list becomes more and more important. That direct relationship with your customers, because that's something that again, bigger companies are concentrating on. Because what happened just now, just last month, what $200 billion or $250 billion came off of Facebook's market cap simply because Apple changed its privacy rules? What happened was, that Facebook was not able to get the kinds of third-party information that it was looking for.
It's advertising, they're having some trouble with their advertising. And sure enough, you know, just because of something Apple did Facebook had a big negative sitting on his books. So you know, what that tells you? Is that direct relationship that you're developing with your clients, even though right now, it may not be bringing a huge amount of revenue, that can be absolute gold. If and when you want to use it for marketing, right?
And so I always say it is incredibly important to keep that relationship to keep developing that direct relationship with your customers, because that no one can take away from you. You know, Apple can change its rules, the other one can do the other. And you still have that direct relationship. It's like you and me talking right now. Right? Yeah, that's the incredibly important thing. And again, it's something that comes kind of naturally, as you mentioned, with a subscription model that you may not be thinking about otherwise.
No. But there's if you read any articles about the secrets of you know, building a viable business or even making your podcast successful, let's say right, the number one thing they'll tell you is to build a mailing list. I used to build a mailing list. Now it's an emailing list, and it's much easier to do things and automate. I have systems like if you make an appointment with me or on the podcast, I do a networking Zoom meeting, and my system automatically takes your email and adds it to my mailing list. You start getting I think it's five or six emails about my practice. You can unsubscribe at any time, but most people don't. And then they start hearing about the podcast, and then you know what happens?
Someone listens to you. And then somebody else has a conversation with someone else and says, Oh, yeah, you should put up a subscription. I was listening to Mitch and Shawn talking and it all kind of and it's not magic, but it happens because, you're doing it regularly, you're giving information to your customers, you're reminding them that you're there. They're paying you a small fee every month, whatever it is, and all that magic starts coming together, you know?
Yeah. And that's the thing you don't need to be selling, and you shouldn't be selling all the time to that email list. You just need to keep in contact and develop that relationship. You can sell. But every time we're involved with this, like, no, no, no, we're not doing a thing where we're constantly selling, selling, selling, selling, right, that kind of a thing ends up, you know, in most situations, yeah, not being productive. Completely.
There's a great book, I love, one of my favorite books, a very short book, it's called the referral of a lifetime. And it's all about building a keep in touch program and, you know, keep in touch with your customers, and why are you always looking for new business? When it's right there in front of you? Yeah, you see that? So you're valuable to the people that you interact with. And that you don't think you're a Magic Man, you're like, well, what, why wouldn't you do this?
But you're right, sometimes people just get, I mean, look, that's why you have a coach or a mentor, would it because you can't see past the forest for the trees, you can't do that on your own, you need other people to say, Hey, I'm not affected by your business. I'm not stressed out at night, because you're not making a sale tomorrow, I can take a look at it and say, Hey, we can do this. And we can do it systematically. We do it methodically, and we can build value together. And you benefit from that, too.
Yes, yeah. And that's what I say like, a lot of times that's with small and medium-sized businesses, it's not that they don't know, it's not that they're not you know, they're doing something badly, is that they've done something, something is working for them, and they want to keep doing it. And you tend to get tunnel vision a lot of times, and you also tend to, you know, I mean, you only there's only one of the person, a lot of times, there's only so much out there, and putting together all these different programs becomes a kind of daunting, it becomes overwhelming. We put all of that together, where we develop sales channels that are according to the means of the business. Meaning, if it's a situation where, okay, you know, what, why don't we do one step at a time, let's start this sales channel, then in three months, we're going to do this other one, we're going to do this form of marketing.
Right. And so you know, it's not every business needs to, you know, suddenly go crazy and, and open up all these different avenues.
It's like building a house of cards, and then it all falls and you got to build each piece. So if so, like how do you normally work with a business? Do you find a business? Do you invest in that business, or are the paying your monthly fee, does vary across the board?
It's kind of across the board. But mostly the way we do it is we come in, like I said, with, we create a new venture, we are usually when we get involved, we're happy to invest ourselves, we put in our own money and our people.
So you meet a business owner and say, hey, that's great. Keep doing what you're doing. We can build a separate business. That's a b2c business, for example.
Yeah. Yeah. So a lot of times, they're a b2b, because they have a wholesale network or a distributor network. And we say, okay, you know, what, that's fine. That's you, and it's going great, and keep doing it. Well, what we want to do is we're gonna, we're gonna do this. And here, here are the benchmarks, here are the projections. And we will collect out of that our share of it just as a business owner, and we will make it extremely successful. If we don't, then, you know, we get nothing out of it. You know, we've ended up we lose out, right?
Are you like, You’re, I don't know if it's just you or a group? Have your parts of all kinds of businesses? Or do you have like an exit strategy where you say, Okay, fine, we'll build this up? And then you buy us out over time, and then we move on, and what's the whole?
I'm never an “exit” person. One Yeah, I have a whole team. And I'm never a person that thinks of exiting. It's just not my style. So it's not something that's top of mind. That doesn't mean that we don't we won't sell our interest or we won't represent a point. Yeah, it's not something that we're thinking at the very beginning, right at the very beginning. It's like, oh, this is a great opportunity. We can do this and this and together, we can, you know, we can do something great. And then you know, how it develops and where it goes from there is sort of I don't, I don't think of it in terms of an exit.
So how many businesses are you running and involved with right now?
Actively, I'm running about Six of them now.
For your very particular then, what projects do you take on and what businesses do you get involved with?
If it's a joint venture like that because there's only so many you can do. But if it's a situation where we're consulting on specific things, yeah, that's a much different model for us. And it's different members of my team, they get involved with that, I have more limited involvement when it comes to something like that. Because I love getting, you know, rolling my sleeves up and getting into a business and like getting a feel for it, and seeing how to grow it. But we certainly do have a consulting arm that we use, like I said, it's education, consultation, and investment. So we certainly do have that.
And then if that's, that's a kind of a little bit of a different model than that, where we can be a lot more liberal with the number of businesses that we get involved in.
So how can people learn about you and interact with you? What's the best way to, connect with you? We'll put it in the show notes.
So you know, you know, my last name is spelled kind of funky. So what I did was I took that out. So I said, here we go connectwithshawn.com. And so that way, you can connect with me directly, actually, for your audience. What I have is a little ebook that we put together, which I'm happy to provide for free. Just get on connectwithshawn.com. it's an ebook that talks about How to Anything-Proof your Business. It was inspired by COVID. But once we wrote it, we said you know what, this applies to a lot of things. So he said, Okay, How to Anything-Proof your Business. That’s what really, it's all about. And I'm happy to offer that for free to your audience. They can connect, at connectwithshawn.com.
Yeah, I wrote that down. I liked that. Anything Proof your Business? That's good, yeah. You should file a trademark on that.
And then my business is also eplaybooks.com. So that's the company that sits there joint ventures with people, that also does some consultation and education. But if you want to direct with directly connect with me at connectwithshawn.com.
And you still own you still have real estate holdings and stuff that you're maybe not as active in, but…
I do and I'm actively buying right now. Yeah. If you're doing the right thing, if you're doing it right, it's always good to sell. It's always good to buy. Real estate is a good place to be in. Right. Yeah. So we're actively looking right now and making purchases. That hopefully makes sense. Yeah, so that's, that's, that's something that I continue to be involved in.
Alright, well, Shawn, I appreciate you spending you know, almost an hour with me from a cold but sunny California. That's like 13 here now it's probably like 30 here. It is cold. It is for cold weather. But, you know, I appreciate it. So please let's stay in touch, share ideas, help people the way you help people, and spend time with me.
Thank you for having me on. It's been a pleasure. Thank you.
If you like the podcast, please tell others about us. You can find us on Apple podcasts, Google podcasts, Amazon music, and many other podcast directories. If you like what you hear, please leave us a five-star review, and feel free to share our episodes on social media. If you have any questions or comments, or ideas for the show, or you'd even like to appear as a guest, reach out to us by email at email@example.com.
The Accidental Entrepreneurs is hosted and produced by me, Mitch Beinhaker. If you'd like more information about my legal services. You can find me on social media, or visit my website at beinhakerlaw.com. Thanks for listening and be sure to subscribe to our feed to be notified of all future episodes.
Listen to this podcast now!LISTEN NOW