The 80/20 CEO: how to take command of your small business like a corporate CEO with Bill Canady.

Bill shares his inspirational journey, and highlights from his new book “The 80/20 CEO: Take command of your business in 100 Days”. He shares his vast experience in business management and how to better take command of your small business like a CEO.

Bill Canady has over 30 years of experience as a global business executive in a variety of industries and markets focused on industrial and consumer products and services. As a leader, he concentrates on aligning with key stakeholders to set a clear and compelling vision to rally an organization to drive growth, control costs, and increase profitability.

One of the keys to his success is he develops strong leaders and management teams and establishes deep relationships. His experience encompasses global public, private, and sponsor-owned companies.

He received his B.A in Business Administration from Elmhurst University and his MBA from the University of Chicago, Booth School of Business. Bill is a veteran of the United States Navy.

Bill lives in Sarasota, Florida.

80/20 Chief Executive Officer (CEO):

• Please briefly share the story of your early life, and your journey into the business world.
• “The 80/20 CEO: Take command of your business in 100 Days.”
  • What do you mean by “80/20”?
    (“…20 percent of investments, processes, products, and customers that generate 80 percent of your revenue.”)
  • How do I know if I am, or I am not, in “command” of my business?
• Please introduce the Profitable Growth Operating System (PGOS)
  (Five management practices: 80/20, strategy, talent, M&A, and lean.)
  • How did you develop this system?
• Please introduce the 4 Step process to get command of business in 100 days:
  • Step 1: Set a Goal
  • Chapter 7: Step 2: Create the Strategy
  • Chapter 8: Step 3: Build the Structure
  • Chapter 9: Step 4: Action Plan
• How do I decide where to focus as a small business owner? (Using 80/20 to make better decision’s)
• Staff turnover – it’s going to happen, so how do we make the best of it?
• Fair, But Not Equal – how to decide which partners you focus on and how to be ok with it.

Where do I start with getting better at managing priorities?

Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.

Resources:

Books mentioned in this episode:
[We receive commissions for purchases made through these links (more info)].

• The 80/20 CEO: Take command of your business in 100 Days by Bill Canady

Other Podcast Episodes:

You can find other episodes of The How of Business podcast, the best small business podcast, on our Archives page.

Transcript:

The following is a full transcript of this episode. This transcript was produced by an automated system and may contain some typos.

Henry Lopez (00:15):
Welcome to this episode of The How of Business. This is Henry Lopez and my special guest today is Bill Kennedy. Bill, welcome to the show.
Bill Canady (00:23):
It’s great to be here, Henry. Thank you so much for having me.
Henry Lopez (00:25):
Yeah, looking forward to this Bill. And I know each other now for, I was trying to do the math bill, but I think it’s at least eight years or so. Our daughters were freshmen, college freshmen, roommates in their dorm. So how long ago was that? About eight years.
Bill Canady (00:41):
Eight years ago. It’s kind of funny, my daughter just graduated from dental school and got married to the same guy that was standing in the room you and I met. That’s right. First time I met you I met my future son-in-Law. That’s
Henry Lopez (00:57):
Fantastic. Great things Nico, who’s such a great young man and such a great addition to your family. So congratulations to Sarah. Congratulations to Nico and Sarah. Makena also is with the young man that she met a little later. She met Colin in her junior year I think it was. But anyway, lots there. We can talk about our kids forever and we’re so proud of them and it’s fantastic. But you and I have stayed connected and then you recently released this book that we’re going to talk about. So Bill’s with us today to share his inspirational journey a little bit about how he got to where he is today. We could spend hours on that because it really is quite an inspirational journey, how he got from where he was and the life that he had growing up to the incredible successes that he’s achieved. But his new book is entitled The 80/20 CEO – Take Command of Your Business in a hundred Days.
Henry Lopez (01:49):
And so I’m excited to learn from his vast experience in business management and how to better take command of your small business like A CEO does and his experiences in larger corporations. What can we learn from him about playing that role of CEO in our small business? To get more information about how a business including the show notes page for this episode and to learn more about my one-on-one and group coaching programs, just visit the how a business.com. I also encourage you to please subscribe to the show wherever you might be listening so you don’t miss any new episodes. Let tell you a little bit more about Bill. Bill Kennedy has over 30 years of experience as a global business executive in a variety of industries and markets focused on industrial and consumer products and services. As a leader, he concentrates on aligning with key stakeholders to set a clear compelling vision to rally an organization to drive growth, control costs and increased profitability. One of the keys to his successes, he develops strong leaders and management teams and establishes deep relationships. His experiences encompass global, public, private and sponsor owned companies. And again, he’s the author of the new book, the 80/20 CEO Take Command of Your Business in 100 Days. He received his BA in business administration from Elmhurst University and his MBA from the University of Chicago Booth School of Business Bill’s, also a veteran of the United States Navy. He now lives in Sarasota, Florida. And so once again, bill Kennedy, welcome to the show.
Bill Canady (03:26):
Thanks Henry. I got to hire you to do all my openings. You’re magnificent.
Henry Lopez (03:30):
I appreciate that. It sounds like I’ve done it a couple of times before.
Bill Canady (03:34):
At least once or twice.
Henry Lopez (03:36):
Well excellent. I’m excited about this conversation that my biggest challenge here is going to be managing the time because there’s so much that we can talk about. But I want to start as I do a little bit with the journey briefly, otherwise it’ll take us the whole show. But you had a very interesting life experience. Tell me about those early days before you went to college. What was life like back then?
Bill Canady (03:57):
I grew up in southeastern North Carolina and my dad was a truck driver. My mom cut hair and we lived in a double wide trailer at the end of a dead end dirt road. And out of that humble beginning, I was able to kind of pull myself together and I got myself off the farm and got out in the world and probably the key to it for me was joining the Navy. A lot of folks don’t do it today or even think about it, but it kind of got myself up and I put my feet on solid ground and I can’t speak enough about going out and serving your country interesting enough about it. At the time I did not like it at all. But today I’m in orderly, proud of that. And second big thing is just the lady I married, my wife is amazing. And if you marry well like Henry, I know you did. We both did. It really makes everything else easier in your life.
Henry Lopez (04:45):
It is great to have a partner that that’s supportive and also a success in their own right. When you think back to those early days, bill, what do you think was one of the key underlying drivers for you that drove you to want to achieve?
Bill Canady (05:00):
It’s several things. First of all, I think it’s really a combination of three things. So it it’s where you grow up at, what do you see, how do you see yourself and what’s a part of it? I grew up in this southeastern town called Richlands, North Carolina, solder the Earth people. Really fantastic place to be there, but I always felt like there was a bigger world out there and if I was going to go achieve it, I had to be the one to go do it. And my dad, as I mentioned earlier, was a truck driver and I got the ride with him and rode up all up and down the East coast and out west a few times. And that gave me the sense of not only was there a bigger life out there, but there was a way to go after. So I think that was key.
Bill Canady (05:41):
The second was my mom. She was really the one that held the family together and she worked her tail off out there cutting hair, making it happen and things like that. And so she was just such an inspiration to me that through thick and thin, here’s a woman that puts food on a table for her family looks after us. My dad was gone as a truck driver, a tremendous amount. She made sure that we got up, put ourselves together and the last thing I ever wanted to do was let her down. And then the third piece of it was kind of the community aspect of it. Even from a small town, I still felt like there was no hurdle I couldn’t get over, no part I couldn’t be a part of. And I went to a great school there and that team and that leadership there really pointed me in a direction that I could go with. So it’s funny, I think you take two people grew up in the same area that have two very different experiences. For me, I found it very positive and life affirming and I felt like I was standing on the shoulders of giants. So
Henry Lopez (06:41):
You had that positive attitude even back then as you recall.
Bill Canady (06:45):
I did. It’s interesting, I think for all of us, it is not where you grow up or it’s what you do with it. And my parents always believed I had greatness within me and would tell me. So my mom would be like, look, get out of here. You’ve got something in you, you can go do something with it. And so I never for a second felt like I wasn’t capable. The real piece of it was what are you going to do with it? Can you take that step forward? And I remember I was talking with my mom and things were going the way they were going at the time and she said, you need to do something. And I looked around and at the time I had no idea what it was going about. We didn’t have money for college or anything. She drove me to the recruiting station and I took the oath and signed up right there. And just looking back on that sense of giving and that sense of support and everything, it made a huge difference for me.
Henry Lopez (07:38):
Yeah, that’s wonderful. Alright, let’s fast forward. You serve in the Navy, what did you do after the Navy?
Bill Canady (07:45):
So I got out, I was in San Diego and at the time, this is when still books and magazines were being produced, not just digital copies, and there was this magazine called the HVAC news, they called it the news and in the back of that was help wanted ads. And part of what my dad did when he was growing up, not only was a truck driver but kind of part-time, he was a handyman and one of the big things that he did was do HVAC work. So we put air conditioners in trailers, right? My job was to crawl under ’em and bring the pipes in. And so I knew a little bit about that and I knew what that magazine was and I looked in the back, it was a bunch of wall ads and I sent my resume out and it made its hands his way to a gentleman named Bob Beck who was one of the owners of a company called Precision Air. Long story short, I sent him my resume, he called me up and I moved myself to Chicago and in Chicago is really kind of the foundation of everything else. That’s where I eventually met my wife. I went to school there, had my family there, and so I owe a lot to Chicago and Bob Beck getting me on the right direction.
Henry Lopez (08:50):
So how did you get your degree? Did you go to night school? Did you take some time off for a period of time? How did you get to bachelor’s?
Bill Canady (08:56):
I did. I went to night school. So my wife, so funny story, we were had a sales guy coming into town. I was a salesman and I went to Denny’s. We were going to meet there and my future wife was my waitress. She was home, she was at school and she was home for the Christmas break working to make some extra money and this guy wanted to go out that night and I asked her, I said, Hey, you want to go out? So I picked up my waitress at Denny’s and 32 years later we’re still married and it was kind of a fantastic journey, but the interesting point of that, well, she was studying to be a school teacher, so she graduated, became a school teacher, and I felt like if I was going to want to make her proud of me and two accomplish what I needed to accomplish, I wanted to go to school and I needed to get an education and I was having some success as a salesperson was making pretty good money and I thought, well, people already know I have a big mouth and can talk and that sort of thing.
Bill Canady (09:55):
I probably need to learn to do math and I wanted to go, I kind of thought about it backwards. I wanted to go to University of Chicago. It was the toughest school in the area. It was quite prestigious, at least for me. And one thing led to another. I met a guy and he had gone there and he allowed me to look at what they called at the time, the Facebook, which is now we all know as something else, but then it was just the alumni directory. I went in and I did a search and I looked at all the local undergrads who had sent people to University of Chicago for their graduate school. It turned out Elmhurst was number one Elmhurst. That’s in a grand total of five people in their history to the University of Chicago. So I applied to Elmhurst, I got accepted and I went at night. Now the interesting thing is I actually sat on the Elmhurst board today. I’m the chairman of their investment committee and that school was given so much to me, it was just I got the right school, the right situation, went at night, weekends, all the things to do, and today I sat on the boards.
Henry Lopez (10:56):
At that time you must have identified that getting that formal education was something you needed because you knew you were going to go the corporate career track or what was the thinking for why, I mean other than for personal pride and all of that and education, did you identify early on that that was going to be the ticket to where you wanted to go within a corporation?
Bill Canady (11:21):
That’s exactly right. I knew I, I started my early career out as an outside sales guy. So I had a route and a car and I’d go out and I was selling all sorts of things, but primarily engineered products, filtration, things like that. I needed to get out of the field in order to get out of the field. If you’re going to do something like that, you have to take a big bet on yourself. You have to do something that says, look, I’m worthy of getting out of that. And I wanted to move into really more management and not just sales management. Chicago felt like the obvious track for me and in hindsight, I kind of am amazed at my audacity thinking that I was even remotely qualified for it, but I identified that was where I needed to be if I was going to lift myself out of what I had been.
Bill Canady (12:07):
Essentially, if you come up and you are poor, it’s almost like you have something to prove, right? It’s like I can do this. I’m better than this. I can be the human being that I wanted to be plus you, and I wanted to make my family proud. When I graduated out of my undergrad, we had had my first child, Sarah, who you mentioned that earlier when I graduated with my MBA, we had then had our second child, right, a Hannah. And so if you’re going to do this sort of stuff, really it has to be something more than just blind ambition. It’s almost like you have to have something you’ve got to go prove. Absolutely. I think that really resonates maybe with a lot of small business owners, it’s more than the money money’s part of it. But look, when your alarm goes off, when you’re building late at night and you’re the guy, you got to get out of bed, you got to be one to get up and go figure out is you’re building on fire. What’s happening? People robbing you, is it just the wind blew and it made your alarm go off? Something has to motivate you. And that’s what I had inside of me. The combination of growing up the way I did and who I did. I had something to prove not only to myself, but maybe to the whole world that I could go do this and these types of steps I took along with the support of my family allowed me to go do it.
Henry Lopez (13:19):
Yeah, no doubt. So inspirational, but that hunger was combined also with, it sounds like to me, not a typical feeling of confidence in yourself, but I’m sure there were moments of doubt, but it seems like from a very early age you believed in yourself.
Bill Canady (13:36):
I did, but it’d be wrong to say I wasn’t always wracked with doubt. I think early on particularly I think I suffered from the imposter syndrome. It’s like I’d be in a room and in my early twenties, my mid-twenties, and I’d look around and go, man, all these people have college degrees and I don’t, they’re clearly smarter than I am. That’s just not true. No matter where you are in your journey, most of what you’re trying to prove is prove to yourself at the early age, early stages, you may feel driven with that. I was a guy who’s worked for me and I’ve known him for probably 20 years from now. He has an undergrad and he told me time and again, I need to go get my MBA. And I said, why do you think you need to go do that? I’m not against that.
Bill Canady (14:21):
Heck, I have mine and it is just an inadequacy feeling. And I said, Hey, go get it if you want it, but it really won’t matter to you. It is what you do with it, right? It’s the efforts that you put in. So I went and got my degree because I felt it legitimized me and plus I wanted to learn and I felt it put me on a stage with everyone else at the time. But really at the end of the day, what matters is what you do with these tools and these gifts that we’re all given. You got to be out there. You got to be resilient, you got to have grit, humble and hungry. These types of are what makes a successful person, what makes a successful life. Having a certain piece of paper, the world is full of geniuses who are taking your order in a drive-through, right? It’s what you do with it, it makes a difference.
Henry Lopez (15:05):
Well said, right? We will fast forward tremendously because then you proceed to have a very successful career. As I highlighted briefly into bio and got to the level of CEO, what was your first CEO position? Just to go back and recap for a moment?
Bill Canady (15:20):
Yeah. The hardest one for me to get, believe it or not, was becoming a president. I wanted to be a president so bad. Interesting. I think, again, back to the ego, and then when you finally get it, you go, well, geez, that wasn’t that difficult, right? So my first CEO one was with an OTCI been, well, actually it was with Swagelock. I was a CEO at Swagelock for a brief period of time. I was president and COO for quite some time
Henry Lopez (15:50):
People that make the door locks. Yeah,
Bill Canady (15:52):
No, no, not those. It sounds like it’s funny, I’ve worked for two companies that I think I’ve disappointed people with. I used to run a company called Viking Pump and everybody would call my buddies, Hey, can I get a stove? I was like, we have bus. Interesting. And then I had Sue Lock and Sue Lock makes industrial fittings and hoses and they’re one of the largest in the world. It’s a really wonderful company and everybody wanted me to supply them with some nice locks. So I felt like I let all my friends down with that just buy
Henry Lopez (16:19):
Locks. And then you worked for baits, right?
Bill Canady (16:22):
Yeah, that’s exactly right. So then I became CEO of OTC, and then I’m also CEO of another company called Arrowhead. So I’ve had, I mean, look, I’m in these roles, perhaps we’re all in our roles because someone took a chance on me and that’s what you do with that chance.
Henry Lopez (16:41):
But there’s a reason somebody took a chance on you. And I always ask people when they say that, and I say that as well about myself, what do you think when you think back to those people that did, what did they see in you?
Bill Canady (16:54):
That’s a really, really insightful question, and I can see it way more clearly now that I’m on the other side of the table. And so what happens, this is my personal belief, is when you’re the person in charge, then you have all these people around you that want, they’re ambitious and they want to go do it. I think today out in the world, I’d have to go back and count, but there’s probably 16 to 20 people who are sitting CEOs today or presidents who have worked for me and I had like to think I had some small degree of helping them get to what they desired as people help me. And what you look for is really just a couple of things. So you want someone who, for me, there’s four key pieces to it. I call it the four commandments, if you will. The four leaders mindset.
Bill Canady (17:47):
It’s be data-driven. If you are making decisions with less than 20% of the information, you’re guessing if you have more than 80%, you probably waited too long. So you want someone that uses data and their gut. The second one is be on pace. You don’t be too fast, don’t leave people behind and if you’re too slow, you’re the bottleneck. The third one is no surprises, right? Bad news, fish and relatives all stink after three days, but as the leader, you got to have the other side. You can’t kill the messenger. And the final one I think is the most important for folks is results matter. You have to go win. We will not be a best efforts company out there. 300 in the baseball gets you in the hall of fame, 300 in the business world typically gets you fired, right? You got to win a lot more than 30% of the time.
Bill Canady (18:37):
So when you’re looking at someone, you’re looking at someone who has those types of characteristics who can create followship. You’re looking for that hungriness and you’re looking for that humbleness. If you have this unique combination and there’s nothing, I shouldn’t call it unique, but it’s like common sense, it’s the least common thing that we see. If you have these types of characteristics, all you now need is an opportunity. All you now need is an opportunity, and where most of the opportunities are is in some form of chaos. If you go and you work for a great company and everything’s just going fine, it’s hard to get promoted because things are going well. But if you’re willing to take a chance on yourself, if you’re willing to bet on yourself and wade into the difficult situation, whether it’s be you’re going to start your own company or you’re going to be an entrepreneur, you’re going to go work for all the way up to a Fortune 500. If you’re willing to put yourself in those situations with that combination, you’re going to get a chance every time.
Henry Lopez (19:37):
Well said. And as I’m thinking about that, thanks for sharing that. That really defines what as a business owner now as I’m building and scaling my business, what do I look for and the point about opportunity. I think that also then as a business owner, as I am developing those team leaders, I need to give them the opportunity which is inclusive of the resources that they need to have an opportunity to be successful.
Bill Canady (20:03):
Well said. A lot of times I got an early move, a big move because I was willing to move myself and my family. So a lot of folks are like, I want to live in Chicago, I want to live in New York and all that. But most of your big opportunities to lead big and interesting companies to start. Interesting businesses are out in the Hitler lands. They’re in the middle of nowhere. It’s hard to find talented people. It’s even harder to find them to get to where they’ll move there. So you can be a small fish in the big pond of New York, or you can be a huge fish in Peoria or Des Moines or whatever. You bring those skills, you bring that aptitude out there and you’re willing to throw yourself into it. You’re going to win. You’re going to get the chances that really would dream about, but they’re in unlikely spots.
Henry Lopez (20:51):
This is Enri Lopez, briefly pausing this episode to invite you to schedule a free coaching consultation with me. I welcome the opportunity to chat with you about your business plans and offer the guidance and accountability that we all need to achieve success. As an experienced small business owner myself, I understand the challenges you’re experiencing and often it’s about helping you ask the right questions to help you make progress towards achieving your goals. Whether it’s getting started with your first business or growing and maybe exiting your existing small business, I can help you get there. To find out more about my business coaching services and to schedule your free coaching consultation, please visit the how of business.com. Take that next step today towards finally realizing your business ownership dreams. I look forward to speaking with you soon. So let’s start diving more into the book. The book. When I think of someone like yourself who has been successful as a CEO, what you have that makes you now part of a smaller group is being able to explain why you were successful. I call it being consciously competent and the book is a manifestation of that. And again, the book is titled The 80/20 CEO Take Command of your business in a hundred days. Let’s start with the question I always ask authors, why did you write the book? What led you to writing the book?
Bill Canady (22:15):
The book is a combination of 20 plus years of experience that has become a success overnight. It’s one of those very interesting things that we all do. We spend all this time putting it together and then finally it manifests itself. You give birth to it and here it is. And what really drove the book was just a couple of things. The first is that model that I talk about in the book, which is getting command of your business in four steps, in a hundred days. The tools that you use, it’s not meant to be a very fluffy book. It’s meant, Hey, do these things and do them your way. You don’t have to do them my way. You can go in. It really comes back to as I learned that process and even to this day, continue to refine that process. You don’t get anywhere by yourself, even if you’re an entrepreneur, you’re a company of one.
Bill Canady (23:05):
You need so many people around you, from your bankers to your suppliers, to your customers, to the people that you’re using as consultants today. You need those people on your team. You need to think of them as your team members. I got asked so many questions is how do I do this? This book is all about getting people together and getting them focused on a few critical things that’s going to make the difference for you. That’s the key. That’s what I was asked about. I hope that book is for others as it was for me, the manifestation of how do you get people working on the things that’s going to make a big difference for you?
Henry Lopez (23:39):
Yeah, I love that. Two huge takeaways there. First of all, as I mentioned to you when we started the How of Business podcast, that’s what I try to focus on actionable things. And so that’s what I loved about the book is it’s got these actionable steps, a process that I can follow. Like you said, I’ll adapt it to either my situation and my personality, but it spells it out for you. It gives me a blueprint, it gives me a plan. This four steps that we’ll highlight here in a moment. But the other thing you touched on is such the key component for us as small business owners, the biggest challenge we have when we start small businesses like I have is scaling and scaling other than getting the money, but that tends to be not the hardest part. The hardest part is the people and leading those people, attracting those people, developing those people to help us grow a business. That’s the key part of it. Since you touch on it, introduce for me, if you will, those four steps that are part of this process that you lay out in the book to take command in a hundred days. Walk me through at a high level those four steps if you will, bill.
Bill Canady (24:42):
Yeah, absolutely. And so whether you’re an army of one or you are commanding a Fortune 500 company, these steps work. And I know because I’ve been an army of one and I’ve had 10,000 employees, it’s the same process every time. Now what I want to stress in this is we don’t do the same things every time. Every situation is different. And if you think of yourself as a hammer, everything’s going to be a nail. And what happens is you’ll do things that really not only don’t add value, it can actually kill the effort, but it’s just a process we go through. So the first thing you’re going to want to do is you’re going to want to get a goal. Now that sounds so easy, but what is that goal? It really depends on your situation. Typically it’s some type of quantitative goal, some type of number.
Bill Canady (25:25):
I have to make this amount of money, I have to grow to this size or whatever it is. And it’s generally driven out of necessity. And it’s important that it’s driven out of something that’s real because this goal is what you’re going to build everything off of. And the interesting piece, the bigger the goal, the easier it is to accomplish, right? Because it forces a person to get beyond themselves. The thing I hear from small business owners all the time, and I work with a lot of small business, a small business owner myself, is when I’m working in the business, the business almost dies because I’m not out selling. When I’m working on the business, then the business just doesn’t run very well. And all that tells me is they’re not leveraging folks out there and you’re going to be able to leverage people out there. There’s people out there who will help you because it helps themselves. We live in the greatest country in this world and you and today and in this society, there’s more available to you because of the internet and like we’re doing here with these meetings, you can really get after it. So start with your goal. Typically it’s a number. Typically it’s going to be some type of earnings piece and it has to be real. You need to do the math on it once
Henry Lopez (26:32):
And what horizon on this goal, how far out?
Bill Canady (26:36):
So generally what I recommend people do is think three to five years. Now, why three to five? It’s just the common number that it takes that people work on. It takes in my process to really get a business stabilized. It generally takes 24 months to really get the business turned around and aimed in the right direction off of it. So if some have longer planning horizons, they’ll do five. Doesn’t matter. Give you a little bit of a statistic today, the average private equity company whole period is six years, right? Today the average business fails within five years. So it’s this first few years of the actual critical side that you’re going to make it or break. Candidly, it’s this first thing that you’re going to do, these a hundred days that I think are going to design. Are you building a company that becomes something big enough and interesting enough someday that someone’s going to sell it or you’re going to sell it to someone who’s going to buy it? Or are you simply just creating a job for yourself? If you’re creating a job for yourself, it’s a whole lot easier to go work for someone else if you can do that. But if you start with the end in mind that you want to sell this business, you do all these things upfront, you’re going to take and create a business that’s bigger than yourself even
Henry Lopez (27:52):
If you decide not to exit it, right? And that’s a mindset that is more recent really in my observation to small business owners. If you would’ve talked about exit strategy 10 years ago, 20 years ago, people are like, I’m just planning to own this business forever. But that mindset of I could sell it is what we’re talking about here. Whether you decide to or not is we’ll see when you get there. Yeah,
Bill Canady (28:16):
You’re absolutely right. Whether you sell or not is not important, but what it is, if you think with the idea that you’re going to sell, you’ll structure your business differently. That’s right. Get your business account open sooner. You’ll get a real banker that you’re working with, you’ll pay your bills in a different way. How you pay yourself and how it’s structured, what you do with your real estate and all that is vastly different than if you’re just kind of what I call running it out of your pocket. If you’re just running it on a cash basis and all that, it’s an easier way to do it. You don’t have to invest in much in it. But the interesting thing, so I buy a lot of companies, I probably have done something north of a hundred deals at this point. The vast majority of businesses I buy are less than 2 million EBITDA. So their earnings are less than $2 million. And what happens is I always see the folks, they’re one of two classes. It’s someone who’s got a really nice business, but they’re kind of an army of one and they’re doing what they can and they’ve absolutely maxed out and
Henry Lopez (29:15):
They’re working. Yeah, they’re plateau. They can’t take it to the next
Bill Canady (29:17):
Level. They can’t get it there. Their attorney was probably their divorce attorney. Their account is the guy who does their taxes and all that. They haven’t professionalized the business. On the other hand, I also see these other people who started out with, again, I think it’s just simplifies to say, you think someday I’m going to sell it? Because that means it has to withstand the light of day. Other people will look at it and opine. But those people, how they’ve structured themselves is they professionalized a business. And I can tell instantly the difference between two. Here’s the big difference. The amount of money that we pay for a professionalized business is far superior to the amount money that we paid that somebody that just found an interesting niche or have a good product or something like that for two reasons. One is the actual money they’re making is far superior, and the second one is it is so much easier for us to integrate it. The type of people you’ll attract to work at a business that’s a professional one versus one that’s out of your back room is different. Now having said that, don’t get hung up. That’s where you got to be at day one, but you have to work towards it. None of us start with a golden chalice in our hands. We have to earn that chalice and it takes doing the right things.
Henry Lopez (30:28):
So that’s step number one. Having that goal quantitative three to five years kind of horizon. Step number two is create the strategy. Tell me
Bill Canady (30:36):
Briefly create the strategy. That’s exactly right. So the strategy, and this is why I say it’s easier on a bigger goal, the strategy here will be totally dictated by the size of that number. So if you say, I’m just going to use just round numbers, you say I’m going to grow to 10. Well, this is what growing to 10 looks like to grow to a hundred. You can’t just work harder. There’s no more hours in the day, there’s no more time available. You have to think differently. You have to bring people in earlier. You have to cut deals with different types of folks. What you look for is very different. So your strategy will be adequate to deliver the number. The third step in that, I’ll just get through ’em pretty quickly, here is now my structure. Given what my strategy is, given what my strategy is.
Bill Canady (31:21):
How do I organize this company? Now remember, you’re starting out small. It’s you. Maybe you have a spouse or a friend or whoever’s involved in it, but you’ve defined what good looks like. You said, here’s how I’m getting, here’s my strategy. This is how I’m going to organize my company. That org chart, just to coin a way of thinking about most of those boxes are going to be empty. They’re not going to be your employees or outside people. And in the final one, which I think is the most important at this stage, is the actions that you’re going to take to actually get through it. What are the steps you’re going to go do? And we have a very defined process of getting through this. You can typically get through it in a hundred days. You don’t want to just make it up. You actually have to go do some research. You take your gut NC and you go get the data and you start testing.
Henry Lopez (32:08):
So the a hundred days is how long as you lay it out to get through these four steps and then begin executing on this plan. Yes,
Bill Canady (32:17):
That’s right. This is hard at the beginning. You’re doing two things. If you’re a single entrepreneur or a micro business, you’re running your business. You need money to keep the doors open to keep your lifestyle going. At the same time, you’re having these big and interesting thoughts. For a lot of people, what I’ve seen a lot of folks do is while they’re doing that, they may actually have a day job. They may have something that’s keeping the lights on, gives them insurance, whatever it is, and they’re doing this side hustle. But if you’re professionalizing the business and you’re taking these steps when you’re ready, you can pull back from that day job. If that’s where you are in your journey and now you’ve already got your bank accounts, you’ve already got, maybe you start out with QuickBooks online, whatever it is, but you’re doing, you’ve separated your expenses.
Bill Canady (33:03):
These are really early days. If you’re far more into it and you’ve got an ongoing enterprise and you’re using QuickBooks, maybe it’s time to look for what the software would be in an enterprise such as you maybe if you’re in distribution, you’re going to look at N four to run your business and you’re going to use some type of a financial software like a Tableau or a board or whatever. So there’s lots of steps in between those things. But make it appropriate for where you are and make sure you’re investing now, because it’s easier to do early when you have that energy and excitement than it. It’s when everything’s kind of baked itself in.
Henry Lopez (33:37):
Yeah. Alright. As I look at it, bill, certainly, like you mentioned step number four, the action plan actually executing is hard, but I think that where people including myself get hung up is in the strategy because for a lot of us, we don’t know how to do that. What is a strategy? I’ve read a lot about this here recently and did an episode on it, but I think that’s where we can get stuck because we are expected to figure out the goal is the easy part. I know where I need to go or what I want to achieve, but how do I get there? This is where I might need to get some help.
Bill Canady (34:12):
Yeah, absolutely. And there’s a lot of different help out there available. But here’s the interesting thing, and I see this particularly with some of the younger generation today and a lot of what I call online influencers, and these are people who have all the skill sets to market themselves to go out and really get a good us. They just don’t really have anything to talk about. You have to start and you have to look inside of yourself and you have to go, what’s my unique value proposition? What’s my core? What am I really good at? And maybe it’s something that you’re very passionate about. Hopefully it’s something you have experience in. You have to start there. If you decide, look, I’m going to go and I’m going to get into a business I know nothing about, it’s going to be a very tough slog. You need to pick something.
Bill Canady (34:57):
So for me, I grew up around kind of handyman, HVAC, all this engineered stuff. My whole career, believe it or not, has been based off of working in highly engineered products. I started with something I knew and I was comfortable with. I for sure was not an expert, but I could put together a case of why this is important. Now think about it for yourself, your strategy. Your strategy isn’t to make money. That’s no strategy. We want money, we need money, but your strategy should be around, this is what I’m going to generate a disproportionate of value and I bring something unique here. You maybe don’t know it all today. And when we get to that point, we talk about the 70 10 of getting yourself, 10% of what you need to know. You’re going to get through some type of formal education. 20% of it is going to be dealing with mentors, working with people like you, Henry, you’re a fantastic coach.
Bill Canady (35:49):
You help people every day get their journey, get their dreams and how to go achieve that 70% on the job. You got to go out. You actually got to do it right. Just to give you a simple example, they ran this experiment at college, took two groups of people. It was a photography class. They told one group. They said, I want you to go out and I want you to find the first perfect picture. You got all semester to do it. We’re going to judge you on one picture. The other group, they said, we want to take every pitcher you can take no matter how good or how bad at the end, we’re going to look at the body of work as a whole. The group who crushed it, the group who did the magnificent was the one who took the thousands of pictures. You know why they got a bunch of at bass, they kept doing it over and over and they got better and better.
Bill Canady (36:34):
While that other group who were looking for that one special moment, that one perfect picture, theirs was nowhere as good. They didn’t get as much chances to go. It’s the same thing with ourselves. If you want to be great at something, I’ve heard the 10,000 hours and all that. I think that’s true. I don’t know if you need 10,000 hours, but you got to go out and do it. You got to put yourself into it. If you can’t figure out how to go do that, that probably isn’t the space for you to be. You need to find something you’re passionate about. You have some knowledge, you have some uniqueness that you can go and do. You have a unique gift to Henry and training and teaching and coaching people, and it’s because of the great background that you have in running your own businesses, plus your personality. Every one of us has something like that inside of us. We just have to figure out what that is.
Henry Lopez (37:17):
Yeah, well said. As I apply that bill also to a company that’s more established now and is looking to do the next thing, do you also recommend that approach of staying within what you know or what are your thoughts there? If I’m asking the question clearly enough, in other words, I’ve seen an organization stake complete left turns, and I get it. Sometimes you have to reinvent yourself, but similar to what you’ve seen as when you were CEO acquiring businesses, they were businesses. I suspect they complimented the core business or what are your thoughts there?
Bill Canady (37:50):
If any way possible, you want to stay right in your core. So there’s been a lot of work done around this, both on people and on businesses. So if you look at your core today, whatever your core business is, whether it’s car washes or distribution or manufacturing, some particular product, if you take and go and decide you’re going to expand, if you stay in that same business, maybe you’re just picking a new geography or maybe it’s manufacturing and you manufacture pumps and you want to start manufacturing seals, maybe you’re in car washes and you’re going to add vacuum, something that is core to whatever that business is, your odds of success are greater than 65%. If you go one level outside your core, just one level, your odds of success drop down below 25%. Amazing. You go two levels out, you’re below 3% chance of success, 3% chance of success.
Bill Canady (38:43):
So in the 1950s, they did a study and it was a study. They actually did it on men back in the fifties. I guess they didn’t care as much about women, but we know better now. But anyway, they took these folks and they tracked them through their lives, and what they found was people needed two things. So first is they needed a break or a transition between say, coming from high school to adulthood. So a lot of us that’s military or college, those who simply just go right into their job, really don’t get that transition. They typically don’t go as far. The second thing that they studied, which was really interesting, was those who begin a career path. So I’m going to go and I’m just going to pick one. I’m going to be a truck driver. So I’m 18 years old. I go to trade school, I learn how to be a truck driver.
Bill Canady (39:33):
I become a truck driver. I do this for seven years. At the end of it, I decide truck driving’s not for me. I am going to go be a chef, another great career, but vastly different. When you start over, you’re now competing with other 18 year olds. You’re 28 years old, 25, 26, 27, whatever it is, and you’re competing with people and your skillset is exactly theirs. Typically, the 18-year-old is going to run circles around you. By the time you get to where they are at 27, you’re going to be in your mid-thirties. It sets you back too far in life. If you get in your core and if you can make it work for you, the time that you have in that pays dividends that are just extraordinary. It’s the same thing in our business. So if you’re in car washes and you get out of it and you decide you’re going to go into fast food, it’s not that far away, right? Still a retail business, but it’s pretty different and you have to go learn all that, and you’re competing with people who’ve already spent 10 years in the fast food business or is key if you can do it.
Henry Lopez (40:33):
Agreed. Very well said. Thank you for that insight. Alright, I’ll start to wrap it up. What I want to come back to is the concept in the title of the book, which is Take command of your business in a hundred Days. The question I have for you is, and you’ve touched on this already as you were referring to when you looked at businesses to buy, but how do I know as a small business owner, let’s go beyond solopreneur. I’ve got a small business, maybe it’s generating a million dollars a year in revenues and maybe 10, 15, 20% EBITDA, something like that. Typical small American business, been in business four or five years. How do you assess, what are some of the things that stand out if you were looking to buy that business as to whether that CEO, the business owner wearing that hat, A CEO is in command or not? Part of what I think you put forth in this book is how to take command of the business. Of course, we talked about one of the components. There’s so much more to this book. We talked about just one of the components, which is a four step process to taking command in a hundred days, and I’m assuming that’s a process building. Lemme come back to that. That’s a process that then I repeat as I’m taking on new initiatives and new focuses for the business. Is that correct?
Bill Canady (41:48):
That’s exactly right.
Henry Lopez (41:48):
Okay. So my question now is what are the things that stand out to you that tell you this CEO of this small business is not in command?
Bill Canady (41:58):
Yeah, that’s a really interesting question and it’s so obvious when you see it. So I have two examples I’m going through right now. So I’m in the process of buying two companies. Both of these are very small businesses, just the way you described them. So one gentleman has, we just closed on this business about a month ago, and the guy is a rockstar, right? He knows his business. You meet his team, they’re fresh faced, they’re energized, they’re processes are mature, they know where they are, they can close their books within a week or so afterwards. You walk in, you can just feel it. You know exactly what it is. And so we look at three things. Are they focused on the critical few, right? Do they understand their market and they’re doing it and honoring that and making money. The second is,
Henry Lopez (42:49):
I’m sorry to interrupt, that’s related to what we just talked about, isn’t it in part
Bill Canady (42:52):
Of that? That’s exactly right.
Henry Lopez (42:53):
Okay.
Bill Canady (42:53):
Are they everywhere, which means they’re nowhere or are they deeply ingrained in something? The second
Henry Lopez (43:00):
One of the ways that I look at that, I to interrupt. Again, I look at that when I look at the restaurant industry. Some businesses can get away with it, like the Cheesecake Factory has a menu that’s a book and somehow they make it work. But by and large, using that as an analogy, I’ve always looked at having been in the restaurant industry, the restaurant businesses that keep it simple focused generally are the more successful ones. Yeah, that’s just an example of that. But I’m sorry to interrupt. So the critical few then, what was second
Bill Canady (43:28):
And the numbers, we will tell you and your point about Restaurant Cheesecake Factory are wonderful. One, my wife loves going there, but you look at things like McDonald’s who got outside of it, all of a sudden their lines get too long. People get frustrated. You have to understand your customer and why they’re there. And the value Prop five guys is a great one. They’ve got just hamburgers and a hot dog on their menu. It’s like 10 things on the whole thing. You win by focusing and being excellent at your value proposition. So we’re going to look at that business and say, do they understand it? And are they living their mission? The second is we’re going to look at the data. This is where the professionalizing is. If you start out and you do it wrong, and by wrong is you just let it go wherever it wants.
Bill Canady (44:08):
You’re going to have to go back and clean that up at some point. So if you don’t have time to do it right at the first time, how are you going to find time to do it right the second time? So we want them to be able to close their books and understand what it is. That’s probably the weakest area we see in most businesses. They’ll say, Hey, I’m doing 5 million in revenue and I’m making a million. We’ll get in there, we’ll find their, they maybe at some point did five, but now it’s a lot less and they might even be losing money. The owner has no idea. What they’re telling us does not align with it at all. Right? And then the third piece of it is we’re looking to see what is the vision of this business? Where is it going? Where are they?
Bill Canady (44:48):
Is it just, I typically see this in second or third generations. So dad started the business, made it a success. The son or daughter comes in and runs it and it becomes a lifestyle business. Now, there’s nothing wrong with that, but the business just loses its edge. Everything looks a little worn and all that. So we come in, the thing that we’re asking ourself is does it fit our model? Does it fit our model? And do they have the things that we have? So one of the big things that we sell and we keep our customers is service. We’re a big service provider and our customers value that because they’re in the business to do what they do. They want to stay up and running in order to stay running. Our equipment has to work. So we’ll come in, we’ll see. Their pricing is bad. They’re not making the money they should, and they have no service capabilities. I immediately know I can bring service in and I can get their pricing up and going. I know what the market is on it. I already understand that. So the fact that they ran that business poorly for me is a great upside. I will, yeah, it’s
Henry Lopez (45:48):
Your opportunity.
Bill Canady (45:50):
Yeah, that’s great. It’s my opportunity. That’s where I’m going to. I don’t have to pay for that. I bring that, right. As a small business owner, if you’re already doing that, you will accrue the value of it. I’ll pay you for that. And then what we’ll hope to do is just make it go faster by being part of our network. But it is very common for me to come and find a business that’s making five to 9% earnings, right? EBITDA, whatever you call it. The money they’re making, they’re making five to nine. I’ll look at that business and I know exactly how to get it to 15%. I know the steps it’s going to take. I know how long it’s going to take, and I can typically get it there within 24 months. That’s where I make my money at, is people who are not as professional haven’t professionalized a business.
Henry Lopez (46:33):
Wonderful. Thanks for sharing that. That’s hugely insightful. Okay, we’ll wrap it up here. I’ve been chatting here with Bill Canady and we’ve been focusing mostly on his journey and the book, again, the title is The 80/20 CEO – Take Command of your Business in a hundred Days. I can find this book everywhere. I saw it on Amazon. I was fortunate to be sent an early copy, but I can find a book everywhere right now. Right, Bill?
Bill Canady (47:00):
That’s right. And it’s also available in Audible. It’s eBooks, hardbacks, all back, whatever flavor you would like. We’ve tried to deliver it.
Henry Lopez (47:09):
Let’s wrap it up. One final question on this conversation that we’ve had pretty far reaching at the time that I wish I had another two hours. But we talked about your journey, the key components there, what you look for in people that someone saw in you, that focus that you had, all of those things, all of those characteristics which apply, whether you’re seeking a corporate route or building your own business, and you’ve done both. So we talked about that and then we dove into a little bit, just a small section of the book. There’s so much more in the book to offer, but we talked about the four steps and how to apply that in a business. And then we ended here with what you look for. Going back, again, playing off the title of the book to know if somebody’s in command of their business or to see where that upside is. And when I look at that as a business owner, again, as we said, whether you decide to sell your business or not, those are the things you need to do so that you get, develop and build the most value in your business so that you turn it into the asset that it deserves to be for all of your effort and time and investment. But how would you summarize it and what’s one thing is the question I like to ask? What’s one thing or takeaway that you want us to take from this conversation?
Bill Canady (48:25):
I think a lot of times as we go through this journey and you’re leading a business, no matter the size of it, we ask ourselves, how the heck do I go from where I am to where I want to be? You have everything you need inside the company, inside of yourself already. You just have to get yourself down to the data. We use the 80/20 process, which is nothing more than identifying our best customers and our best products, the things that people pay us for, and going to do more of that. And we get the resources from doing that by stop doing things that waste money. We quit selling people that don’t pay their bills that we have to chase. We could selling products that we can’t make money on or break all the time. We just simply focus on that 20% of the business where all the revenue is, where all their earnings are. That’s already in each of your businesses. I encourage you just look at the data. Once you have that, no matter how small or big you are, start doing more of it and it becomes a force multiplier. What? It starts out, it feels slow, it feels hard, it feels unsure in a very short period of time. You can get command and control of your business and you can take it to wherever you want to go and the best life you can possibly have.
Henry Lopez (49:34):
Well said, there’s such great summary there, and you tied back to the things that you’ve highlighted. I didn’t make a mention when you talked about data. I see that commonly as well, and it’s actually a little bit of a relief bill to hear that leaving larger organizations have that same challenge because most small business owners have a mess with their financials. That’s the truth of it, but you can take control over that. You can fix that, but the focus is what it comes back to. What you’ve just iterated there, if I’m understanding correctly, it seems to come back to organizations that remain focused on their core and that 20% that’s most profitable. Those are the businesses that have the higher probability of growing and achieving greater success. Am I getting that?
Bill Canady (50:20):
That’s very well said, Henry.
Henry Lopez (50:22):
Alright. Where would you like us to go online to find out more about you and the book? Of course.
Bill Canady (50:27):
Well, I have a website. It’s my name, so it’s BillCanady.com. You can go and everything’s right there. You can also go, as Henry said to Amazon and just Google either my name or the 80/20 CEO and you’ll find it and they’re all connected. I hope each and every one of you enjoy it and if there’s any way I can help anyone, feel free to just reach out. You’ll find my contact information on the website.
Henry Lopez (50:53):
Fantastic. Bill kennedy.com. If you’re not somewhere where you can write that down or if you forget it, just I’ll have the link as well on the show notes page for this episode at the how a business.com. Bill, great conversation, so glad I had the opportunity to have you on the show and share with us about the book. Thanks so much for being with me today.
Bill Canady (51:13):
Thanks, Henry. It’s a real pleasure to be with you.
Henry Lopez (51:16):
This is Henry Lopez and thanks for joining me on this episode of The How of Business. My guest today again is Bill Kennedy. I release new episodes every Monday morning and you can find the show anywhere you listen to podcasts, including the How of Business YouTube channel, and at my website, the how of business.com. Thanks again for listening.