Unbankable with Alex Shvarts

Welcome to Unbankable, the podcast for entrepreneurs who don't take no for an answer. My name is Alex Schwarz. I'm the CEO and founder of Funkite, a revenue-based funding company. And I wanted to start a podcast to give small business entrepreneurs ideas, tips about how to grow your business, how to get there faster. I'm going to invite in these podcast series is a bunch of CEOs, business people, leaders, and hopefully we can give back to you, the next generation, the next set of entrepreneurs, what we've learned, share our mistakes, share our failures, and get you to the finish line faster. Today I'm joined by Sardor Urdinov, a serial entrepreneur who transformed a simple appliance repair business into Home Alliance, a multi-million dollar service empire. But there's what makes him special. He's teaching thousands of others to replicate his success through Home Alliance Academy. This doesn't just build businesses. He builds business builders from technician to CEO to mentor. Sardor has cracked the code in turning service work into serious wealth. Let's dive in. Thank you for joining me. Alex, thanks for having me today. So, I want to start with this. And you know, I'm a little bit of a controversial when it comes to having discussions, right? And I hope today you're going to prove me wrong. Okay. Okay. Now, I'm doing this podcast because I want to give back. I want to see people succeed, right? Um, I'm not going to start, you know, doing $3,000 lectures. Um, I do speak at events, but this isn't my job. My job is not to speak. I want to give back. I want to empower people. I want people to do really, really, really well. So, I've always had a problem when I see people speak at events and they charge a lot of money for it, but I haven't really seen them accomplish something real in business, right? So, look, you know, Jeff Bezos isn't selling lectures, right? Elon Musk isn't selling lectures, right? So why are you now doing this academy as opposed to running your business only and building a billion dollar instead of a hundred million dollar empire? Good question. Fair question. Fair question. Fair question. It's a good question actually. uh what I have done is this basically I have built and scaled the company enough and I have so much energy and I have to diversify my energy put it elsewhere as well and my main company core company is run by co and I don't have to get involved day-to-day uh and and I have separate the venture studio outside of the core operations and R&D and all the new businesses we start on that but block and if we And what I have learned is eventually if you want to really scale on the different level, you're going to have to start merging companies together. It's like really doing the M&A mergers acquisitions, right? Like in order to merge, you have to actually teach them, show them how to do it so they other can scale it. Then later you can unite because in the beginning the small company the value of the company is a 3x 2x if it's a a Z multiplier but when you actually join like $10 million E I E I E I E I E I E I E I E I E I E I E of companies now you're really talking about 10x 12x. So how does the academy help drive that vision that you have? Basically we are we are teaching others. So one of them is actually we are teaching others to become a tradesman first of all. Okay that's good. Yeah that's tradesmen. There's not enough tradesmen now. So they can actually join us to become one of our partner contractors for the purpose. And other side is when it really becomes a business academy, we want to teach them and show them that they can actually do it themselves and they can scale it and they can probably get our shared resources of marketing, call center, other resources. Actually we can give it to them. they can actually run on the same operation system and later it's going to be easier for us to merge with them because they already run. So really you're not really trying to, you know, do a paid course. You're really trying to build a company from within by training people and obviously offering your services and stuff. All right. So that's that's different than what I was thinking. Correct. All right. All right. Let's talk about Home Alliance. What is Home Alliance? Home Alliance is a marketplace like a AAA for the cars and or Amazon Prime combined for the home owners for the home services. We basically serve appliance repair, HVAC, plumbing, electrical, air duct cleaning, uh handsmen, home cleaning, painting. We are basically opening up more verticals to save the same homeowner. Once we are in your house, we basically want to actually come back with a subscription so you can get a discounts like all of the different values. We come and change the air conditioning filter. We come every four months to prevent your like anything to break breakage and so you have maintenance. Yeah, we have a subscription model like a AAA or like Amazon Prime and if you don't have it then you have to pay service call each time we come. Right. I got it. It's a nationwide platform. We operate in the major metropolitans, bigger cities. Uh and we are basically growing uh from horizontal integrated all of the verticals in the home. That's very cool. Very cool. So look, I think it's important as a homeowner to have a maintenance contract, someone that you can go to, right? And we'll talk about the business side after, but the value that I see and if it's a affordable subscription is having a peace of mind, right? So our our AC broke. I mean in in in Miami AC's probably break more than than ever. But AC breaks, you're hot, you don't know who to call. And the first couple of times that happened, you know, I'm going online, I'm just calling. And those people are bandits, okay? They they know you got a problem. They know that you're sweating. You don't have ACA and you're going to pay whatever maximum you can just to get a fit. So, they rip you off and and that's a problem, right? So, I think that it's a brilliant idea to be able to offer uh a coste effective ongoing subscription maintenance plan that gives a piece of mind to homeowners for repairs. It's a brilliant idea. So, are you like an idea maker? You come up with ideas a lot. How did you get into this? What what did you wake up one day and say you want to do this or was this an evolution? It's evolution. Entrepreneurial evolution. Entrepreneurial evolution. Yeah. I moved to US in 2003 as F1 student. I did all kind of different work from bus boy dishwasher and me too. I was a bus boy. Um you finished. I'll tell you my story. It's amazing. Then I basically work in the moving company. I work in the painting company, electrical company, uh plumbing. I need a little paint job here. But yeah, I did all kind of different work. Sometimes I had even three works at the same time. Then eventually I got hired on one company uh uh who promised me green card and fixing commercial laundry machines. Uh that's how I got in the tech technician work, right? But my background is actually international economy and diplomacy. So I actually And I assume you have a green card. I don't have to worry about ice storming my office, right? Yeah. It took me like almost 10 years to get a green card. How long have you been in the United States? 22 years now. So, you know, I'm going to jump in with my story cuz I think it's it's uh and I see this with immigrants like us, right, who came here legally a long time ago and worked every kind of job. You know, my first job was at nine years old. I came here when we were eight. And I worked every Saturday and Sunday with my dad. We would get up 4:00 in the morning and we go to a flea market and we sell whatever we could to make ends meet. What kind of job was that? Working with my dad at a flea market. Oh. So I started with my dad. We'd get up every Saturday and Sunday 4:00 a.m. to get to a flea market. It was called English Town Flea Market. It was like a whole city in Englishtown, New Jersey. And yeah, I did that. I I I worked as a bus boy. I worked as a waiter. Right? There was no job that I wouldn't take. Right? Very different mentality, very different mindset, very grateful to this country, what it's given me and uh what it showed me, right? So, you know, we're immigrant family. It wasn't, you know, nothing landed. We didn't come here because there was these programs that we were hoping were going to pay our bills. No, we worked. My mom worked. My dad worked. My brother worked. We're hardworking family. And it wasn't always easy, right? Um, and I think it built a foundation from us, right? Yeah. But there was no job that was too dirty. I mean, you did it all also. Right. Now I can't paint. I can bus boy, cook, and waiter. But, um, yeah. So, I I think that's important. All right. It's good to know that little bit about then I open up appliance repair company first, then HVAC, then plumbing. I start adding and because customers start asking me like, can you do all of that? Right. Great. Great. I get it. So, you you did mention before that you have a CEO that operates your company, correct? Right. So what happens when a founder leaves? What happens when a founder of a company leaves? And maybe this will inspire me. I don't know, go play golf, but no, it's not happening. But what happens when a founder leaves? If you have a right structure, if you have a right CEO or COO, then you can kind of step out. But what are you going to do? Of course, like I normally get bored and that's why I have a venture studio. That's where I start more launch more different programs, different companies, sorry. uh and some get some successful some not like but out of like I think we have a 30 40% success ratio and so 60 70% failure correct yeah yeah experience yeah I say that you cannot have I don't believe in success without failure right so I I've said this before I'm going to say it again you know there you have this new generation they they start an AI they sell it for billions those are the chosen few the lucky you the rest of us. And I say this to you, the entrepreneur, the small business owner. It's okay to fail. Just learn from it. Get back up. Do it again. You know, there are no losers. There are just quitters, right? Don't quit. Keep at it. You're going to find your way. You're gonna find a way to success. And be honest. Hey, I've failed before. I've had many failures. It happens, right? Okay. So you you you you get bored. I get bored and I launch. I see an opportunity. I see a problem then I see an opportunity. Basically I probably are entrepreneurs problem solvers. When you see a problem if no one is solving it, you want to solve. Tell me about your typical work week like how many hours what do you do? I basically distribute my time. I I probably work 40 plus still right. like uh basically how my work week is I divide my work with four different focuses which is one core business home alliance where I'm CEO and the next business is bisdev is a venture studio it's 25% of my time goes to the CEO at 10 hours a week and 10 hours goes to venture studio that's where I'm bisdev CBDO kind of hat that's what I like kind of building more companies and I have another 25% which is 10 hour I spend on M&A mergers acquisitions looking for deals I have a M&A team who brings me like a daily basis new deals to buy companies to merge them to us. That's what I spend 25%. And uh other 25% I it's in investors or capital raising funds or like more strategic initiatives I kind of distribute my time. Let's go back to something what this podcast is really about, right? And I'm trying to give all age, doesn't have to be young or old, entrepreneurs, hardworking business owners, small business owners, kind of a blueprint on how to get there. Mhm. Right. So, I want to bring you back to because you you you've built a big business, right? And you know, it's great, but before you built that big business, you built a lot of small businesses. You said HVAC, you said painting, you you found a lot of verticals in servicing the home repair business to get there. So tell me something that the mistakes you repeated in every I I I bet you you had the same mistakes in Hrack and cleaning laundry machines, whatever you did. What are the same mistakes that you can remember like repetitious mistakes that you had to do enough times to learn not to do them again? uh the first one is I think is not documenting like you first you go intuitively to do thing things and then you start realizing that certain things are certain mistakes are repeating then you thinks it's intuition but actually if you start really documenting it and and you go back and look at those mistakes you can see the pattern and those patterns can be I divided when I'm launching any company I have like four different things which is the product market fit then next one it can be the marketing strategy. The next one is a project manager like who I'm building the project with uh because I only do in the beginning then they later I delegate it to the project manager. Number four is a market. So if the market is a problem uh then I shut down the project like I freeze I don't even freeze the project basically I just kind of shut it down right but if the project manager I freeze the project then I look for another project manager and launch it back. If the marketing strategy we normally do don't do much of a mistakes because we already know we have a hundred of different marketing strategies we know what works what doesn't work so we actually choose depending on the product or what vertical we are launching it's a digital product or the home service product or SAS product we know what marketing strategies work we just apply depending what really uh magic pill works for that things normally comes up either not knowing the market uh or comes with the project manager like who we are I'm assigning to. So, I'm you're you're covering a lot, right? And to me, um, small business is really comes down to to me there's three major things, right? So, I obviously people have an idea and they're already at the point where they're they're going with it, right? Um, it really comes down to so three three important things. So, and we're going to I want to because you you just got on to project managers assigning it to people. So, I'm always going to talk about this, the S plan, which is the staffing plan, the G plan, which is the growth plan, and the F plan, which is the funding plan, right? But you covered, you know, I I hire project managers and all that. So, let's talk about um the S plan, right? Staffing plan, right? So, I say pace your hires, accelerate your fires. Right? So, let's talk about hires. What do you how do you hire people? What goes into that decision? Mhm. And so, yeah, let's talk about hire. What's your hiring process and how fast and when do you plan on on hiring people? Basically, yeah, it's a really interesting uh steps on the hiring. Uh I have a hiring uh company already, the recruiting company now separately. But before you even got there, you're a small business. You're just you, Sardor. You're launching your first thing. You had of experience hiring people. What did you do then? How did you make the right choice? I mean, now I I get it. You got a thousand people doing everything for you, right? Rewind. Let's go back in time. My first hire, like I met her in one of my friends insurance place. Like I was looking for a call center agent, right? I was like, "Do you speak English?" And she she replied me in English. and her English was much better than I was like, "Can you come and work for me?" I said, "Yes." And that's it. It was higher. That was my first. Now you've got 10. But she still works with me for to this day. 10 years. Yes. You must be a nice guy. Um, so now going 10 people in, you already got 10 employees. You you've you've readjusted your hiring. Yep. It's not impulse. It's not just how they look or speak. Now you're trying to find um accountable value in that employee, right? Or metrics. Yep. Right. You're a 10 employee. You're going to hire two more HVAC people to go fix HVAC. What's the process? What's the thought process? Who's right? Who's wrong? Is it just experience? Is it just resume? I'm just curious to hear your thoughts. It's it's a two things, right? Like one is we do hire or bring partners. We call the HVAC technicians, contractors, our partners. We don't really hire them. But office stuff, we hire them. They work for us like let's say office stuff. Office stuff basically whenever we whenever we prepare the job description with a hiring manager and after that they do the job posting whatever the places and after they apply we basically for one role we get more than 100 candidates more than 100 and they go through like some due diligence test. We actually do that um special test uh disc assessment task. We do it as their uh like background and other ones it's also a and they go through the group interview then eventually they come to me or to the hiring manager whoever they hiring it and they do the decision I only hire get involved on L minus one's which is my leads are minus one I hire my personal stuff and I do get involved one level about L minus you have a a kind of a process that you follow in layers and stuff like that do you sit on interviews. I don't I only get involved on the most senior level to the Yeah. my direct reports or one below. Got it. The rest I don't get involved when I'm interviewing. I um I don't do an average interview. Mhm. Because I'm in a finance business. A lot of pressure depending on the role that I'm hiring for. Um, I will choose and pick my questions because I want to see how people are going to react, right? There's also a customerf facing side. So, we're going to get into the customer face. So, you know, if you're a coffee shop and you hire a new barrista, there's two sides. How well do they make coffee? And how do they interact with the customer? You can be the best barrista in the world, but if you don't have any personality skills and you can't talk to people, well, um that's a problem cuz this customer man, you know, customer service is 50% of the success these days, right? But I I'll tell you a funny um I've had a few interviews and you know, ask uh you know, these are let's say they're in underwriting department and you know, they'll get into I'm very detailed. I know my numbers d and I would ask okay well since you're detail oriented did you happen to see how many floors there are in this building and you know it was one time I was in a building I was in the seventh floor and this person said to me yeah there's six floors in this building I was like really we're on the seventh how could there be six and another line that I like to ask is you know I look at a resume and I'll say, "Hey, what's the biggest line of [ __ ] on your resume?" Interesting. And you know what? A lot of people actually say, "H, you know what? I'm not really good at this. Why am I doing this?" I'm going to entrust you to do something really important for me. And I need you I need to know that you're going to tell me when something is off, right? You're not going to cover it up. Now, look, most people put things on their resume just to dress it up. We all know that, right? People will put, you know, oh, I know how to Excel like in my, you know, and they always put I'm proficient in Excel. Now, I'm really good in Excel, right? And so I start to dig into questions and, you know, I I want to know, I mean, I'll ask how really good are you in Excel? Can you write macros? Can you and they'll they Yeah. Yeah. And then when I start to get into it, well, like, no, I mean, I just kind of have basic. Not. I want to know right off the bat what your strengths are. Are you going to fit the role that I'm looking for? Right. Or not. So, I think that's important. All right, let's get into the fires. Tell me about how you fire people. No. Yeah. Or you put that off on someone else, too. Uh, no. It depends if it's my direct. You fire people. When's the last time you fired somebody? Last month. Okay. Let's talk about the firing process. What? How quick do you fire someone? I give them a chance. I give them a chance. Always always give people a chance. I always give chance unless they really broke some company values and they're doing some damage and then I better like get like kind of stop that. Right. So before I didn't know how to fire that was my biggest problem probably problem in the beginning because I got burned once I for incorrectly firing uh and I had to settle it and all that. And kind of because of that I became more slower on firing like actually it negatively affect the company at all. Right. So it was because of that wrong fire I had to pay and settle then I was too careful not firing for too long. Right. Right. And and it was actually then I later I figured out that it's all about communication and you can actually fire in the right matter. So you don't have to just burn the bridges but it's all about communication. I don't think anybody's ever happy about being fired. Okay. And uh it just is what it is. Um I think that one of the tips I want to offer, you know, business owners is if someone's not performing for what you need, you need to replace that person. And if someone is performing well, you need to make that person super happy about working for you, right? It's both. But don't wait too long. It's not going to get better. you know, pretty quickly. Now, look, let's go back to that coffee shop, right? I've got this barrista, man. He makes great coffee. He's an [ __ ] to my customers, right? And but I can't find somebody else, right? That you will find. You need to look harder. Find somebody else because those customers are going to leave. Y right. And then doesn't matter how great your coffee is. So, I think waiting too long is not a you're you're in trouble, right? Yeah. One of my mentors says like when you have to fire the moment you think about firing someone. No, that's it. All right. Let me ask you another question. Your barrista comes to you and says, now this is a barrista who's making great coffee and is very perfect. You know, great with customers, everything. The barrista comes to you and says, "I got a better job offer. They're going to pay me $30,000 a year more." How do you react? Uh, depends. If I have a replacement, I look at the P&L if I can afford it or not. If the P&L doesn't fit or like if the person is not giving me value or if I can replace it, I would replace it. I would step in myself for that role at that short period of time and I would immediately start looking or probably I would already have some backups ready if I feel that something is going on. So I I believe in someone coming to you first and saying, "Hey, I I I want a raise." Yeah, probably it was because of the previous conversation. Correct. I I think that if somebody comes to you and says, "I got a better offer." That doesn't leave a a Yeah, it's not a correct it doesn't leave a good feeling and you're going to remember this and you're going to felt like you were held hostage to give them a raise. So, I don't think I don't think the relationship to give a raise at that moment, right? You know, um and sometimes people will fake it. You know, they'll say, "Oh, I got a better instead of just saying, "Hey, I need to make more money." Correct. Right. Yeah. So don't let employees um to get a hostage situation. Yeah. You don't want to be in a hostage situation and some people and or take advantage of you. Right. At the end of the day, it's your business. You have everything to lose. So you know and I did the mistakes of those in the past like when I bringing back the previous employees because I was lazy enough to not to step step into that role and like my next hire was failure and instead of like looking for the better hire and training and training and onboarding them I actually decided to bring back the previous employees which left in the whatever the terms that actually killed the entire culture. So that was also not good. Like what's the one expense you hate? One expense I hate I don't like the expense which doesn't bring me a proper return on investment. But if you can actually calculate it always like if I you putting a dollar somewhere it has to generate you whatever the return on investment you're expecting. If it's bringing you that kind of because at the end when we are opening a company we are opening a company as investor hat. We are founders are self-funded investors at the end who hired yourself as a founder who who believe in that founder investment vision who hired the CEO yourself who hired the manager who hired the barista. So that's whole step is yourself in the beginning. At the end, our main head of a founder is investor hat, which we're going to be stepping out, right? You step out from the barista stage. You h you became a manager. The barista is doing the role. Now you're a manager. Then later when you're maybe have multiple locations, now you are stepping up as a CEO role. You have multiple managers managing locations. You stepped out from that role to the next role. When you already have multiple locations, now you have a chair. Talking about investors, right? Let's talk about the F plan, the funding plan, right? So, listen, you have a blueprint. You've been doing this a long time. You, you know, you got it. You got it. You got it good, right? I'm hoping that my audience, people that are watching us right now, I think they're going to be different. I think my audience is different. And I'll tell you how. I think my audience is not on your level yet. I think they're still trying to build a business. They're trying to grow a business. And they they need So, we're talking about funding. So, let let's talk about this. And I always ask this question from very successful guys like you. If someone has zero connections and they need money, where should they start? First of all, when I came to this country and I started a company, I didn't had any connections, right? That is I had zero money. I Where'd you start? I came with Where'd you get the money? I came with $800 and I started my first business with $100. Uh like Okay. But then you need but if I what do you tell what do you tell Sarah right now who's watching in Nebraska right Sarah wants to know she she's she's got a little business she needs to grow she doesn't have any money connections right what do we tell Sarah where do you need to go look one thing I would do if I was in Sarah's shoes now if I have an LLC if I have an LLC I would basically apply for the loan if I don't have LLC I would open up LLC so I can get bigger chunk bank of loan instead of my under my social security. That's what I would do. When you say LLC, it could be a corporate. It could be a corporation. It can be anything. Corporate corporate entity. I would apply I would open up company uh corporate entity probably one or two years. So then your chance of getting a loan is increases and I would actually get a loan. But before getting a loan, I should have a business plan. I should have a business plan which I should believe and I know that I'm going to be able to pay back and actually get bigger return on that money. Otherwise, it's not good idea to get a loan. If you're getting a loan, you have to be sure that you're going to get Have you ever took on money that later you said this was a mistake? Um, no. No. No. Have you ever made a mistake? I do. Yes. Yes. I make mistakes. Mistakes. But when it comes to money, I'm really careful. you share a mistake that you that when you made the mistake you thought it was nothing but now when you look back you're you're laughing about it. Yeah, it was as I said it's a wrongful firing which I mentioned before. Another one is uh I was unmature to fire wrongly. I had I had to had a conversation with that person. And the next one was uh bringing back uh which also kind of was weak enough to actually train and hire next person. Uh when it comes to money uh the but but mistakes I normally get them as a lesson. So like I look at it I I I I understand and I realize the mistakes but I don't burn myself because of the mistake I did something wrong. I laugh on it but I learn my lessons. And even if I'm getting a money, but I have to be really careful on on what percentage I'm getting. And and I have to have a plan where to invest the money, right? And and and if the if I got the money and didn't work out, not because of the money, it didn't work out because of my business plan. Yeah. Of course. You know, sometimes money is too expensive. Yes. And you can't you can't do correct. Yeah. I got recently money. I got I think $3 million VC dep. It's 13%. It's not bad from the VC correct. Yeah. Um and SBA money was good one deal. Let's say this then. Um how do you know when it's time to go and get outside money for your business? So look, I'm sure you have your own money. How did you know? What would you tell a business owner that they what signs should they look for that it's time to go and get outside money? Okay, one of the examples I'm going to give you, right? like what one of my project managers uh we are actually working with the government projects which is like not government utility like uh California state utilities are providing municipalities municipalities upgrading electricity of the businesses right but they pay 90 days they don't pay right away I I have to finance the the labor I have to finance because I have to pay contract parts labor contract correct like I'm in minus if you look at the P&L on the uh acral basis I'm kind have a minus when the cash basis I can actually make because I'm going to get the money. If I'm sure that I'm going to get that money and already have a signed contract then I know that I'm going to pay back in three four months then I can actually loan money because I'm I'm sure about my contract if I don't have you borrow money borrow I can borrow the money correct that that is what I would borrow money if I have that kind of a plan. Okay, so we've covered staffing, we've covered um funding, the F plan. Let's go to the growth plan, the G plan, right? What's the messiest part of a a business plan that people never want to talk about? I mean, I talked to business owner, what's the business plan? What's the growth plan? How are you going to get there? And some people have a a clear thing, but there's there's parts that just people are a little embarrassed to talk about, right? It's not even the failure. It's, you know, it's when somebody's vision is not very standard, so to say. So for you, like when you have a growth plan, what have you learned to over time to streamline that you didn't know 5 years ago or 10 years ago? What What do you learn from experience to streamline that's no longer messy? I guess if that makes a little Got it. Got it. Look, I I divide on venture studio. I have learned to go on the stages like uh 0ero to one is like first sale or first product market fit. Then one to 10 is like repeated 10 times and then 10 to 100 is growth stage. But I what I have understood and made mistake of delegating the 0ero to one one to 10 stage to somebody else. Hiring a project manager said I go and figure out and do this business but is out me doing it. So what I'm doing now is I do the first product if I'm launching a uh let's say legion company I do the first leads and marketing and everything whole process I do go through myself it's a founding stage and I on the second stage I document everything then I delegate it to the project manager I know the stage because this way the project manager cannot put me in a hostage situation. you were mentioning about the growth stage and the dirtiness of the gorge stage like or mistakes of the growth stage like can you tell me more about your side? Yeah, my experience with Messi. I think um one of my messiest growths was um lack of experience and then it gets messy. Being able to really um break down what growth looks like, right? So, a lot of entrepreneurs, especially young entrepreneurs, they just see the finish line, right? They're dreamers. A lot of entrepreneurs are dreamers, right? You agree with that, right? So, they just see the finish line, right? And they're already they they haven't even started yet. They're at the finish line, right? So, when you work like that and you're you start at the finish line because I mean, in a way, you have to you have to see a vision. and I want to make $100 million having coffee shops. That's the vision, right? That's the finish line. And so, a lot of us are are already spending that $100 million without really having a plan. And that's when it gets messy, right? And, you know, part of it is is step one, walk before you run. And that comes with experience. What I'm trying to do with this podcast is give people a lot of insight and knowledge so that they're not going to have a messy experience. Maybe they can learn from what we've done. Look, I've worked with we've processed over 350,000 business funding applications at Funkite, right? And you know which business works. I've spoken to I personally have spoken to thousands probably over a thousand merchants about their business plan about their business what they're doing. I have personal experience with so many different industries. I know how an HVAC guy operates. I know how a doctor operates. I know the difference between a dentist and a doctor who does veneers. The poor dentist, man, he's suffering. He's not making money. Most dentists that have general practices, they don't do they don't make a lot of money, right? So, I understand how probably 95% of industries and companies work, right? And then there's nuances, right? So, getting back to your question, I'm I'm trying to um so messy could be a lot of different things, but planning is critical. So, if you like this podcast, please leave some comments below. We'd love to hear your thoughts, what you would like to hear about and what suggestions you might have. So, back to our conversation, messy. What is a a messiest part of business? So, I think it's structure, it's organization. I think not having a plan will make things really really messy very quickly. Let's get back to a growth plan. When is growing too fast? Like I call it hyperrowth, right? When is growing too fast a problem or growing too slow also a problem? How like how what would you say to we're not gonna choose Sarah anymore, right? We're going to choose Jack in Anchorage, Alaska, who's trying to grow his fishing business, right? What would you say to Zach? You know, look, he's wants to grow. What's the right way to grow? How do you know when when to expand, when to slow down? What what advice would you give Jack in Anchorage? Hopefully, I'm not going to answer to this complexity. See, I'm going to try to simplify. No, no, please. If I'm too complex, that's a problem. I want to be very simple. So basically first thing I would look on your P&L actually make sure your model works right otherwise a lot of people make mistake of growing when your P&L doesn't work. you are growing actually negative performer like if you don't understand your performer how your business runs you are scaling actually the depth or you're scaling non-healthy business which is wrong then you you're always going to have a cash problems but if you actually P&L is properly your cox is right your opex is right and so that's two simple words okay P&L is profit and loss profit and loss bottom line am I making money or am I losing money yes simple Even though if the money is coming later, it's still healthy business. And then let's let's talk about COGS cuz I got to tell you, a lot of small business owners have no idea what that word means. What is COGS? Cost of goods. Cost of good sold, right? Just buying that maybe if you're So let's now So we're going to get back to Jack and Anchorage for a minute, but good points you raise. So in every business, you have COGS, cost of goods sold. You have labor. You have labor. Then you have a profit. Uh you have a gross profit. Well, before then you have cost of goods materials which includes there right which probably is part of cost. Correct. Yes. Then before you have uh returns or credit card whatever the merchant fees right before or whatever. Yeah. That's that's probably um on the top adjustments revenue adjustments. Correct. After that, you have a sales cost, marketing cost, and opex. If you have those, right? Let's get back to Jack in Anchorage. He's got three boats. He's got 30 fishermen. He's selling all the fish he could fish. And but now he's getting a lot more stores are calling him. Distributors saying, "Hey, Jack, I need more fish. I heard you got the best salamon from Anchorage." And Jack's got to make a decision now. And he's got to buy a really He's making money. He's got to buy a really big boat. He's got to buy a boat because now this boat, he's either gonna make him or he could lose everything. What do you tell Jack? Jack, we're going to have an answer for you in a minute. Sedor, what do you tell Jack? Basically, uh I would preferably on that growth stage, uh I would preferably rent the boat. I would lease the boat. Uh because this way you are minimizing your risk. uh and you are signing up in a shorter period of time, you can proof the business and later once you know you already made that gross and you can go back and optimize you want you can if you want to get rid of that lease or rent now you go actually you make your calculation then you purchase. The most important thing you just said is there is a solution to every problem. You can approach every growth problem in different ways. I said buy a boat. Yeah. You said lease a boat. Yeah. Right. You know what else I would tell him? Option number three, go to the other fisherman and say, "Hey guys, I'll tell you what. I'll buy all the fish that you are fishing right now that you can't sell." That's better. The answer to growth isn't always simple, right? You can have different ways to approach growth and you got to try to find them. That was good. Right, Alex? You brought a really good point because you are working on the business, not in the business, right? The CEO would actually probably do like leasing and renting and that one, right? Like uh but even a guy who's worked every single day. So, okay. So, look, it seems to me, it sounds like you and I are a little different. You've reached a point and you're very comfortable at having managers run different operations and you're kind of like the brain on top, right? I have a problem with something and and I have a word I I created for it and I call it brain width. Right. Mhm. My brain width has reached its capacity because I am really an employee of this company from 9 till 6:00 when everybody mostly everybody comes in and 6:00 when everybody leaves and from 6:00 at night till 9 in the morning I am a founder. I'm a CEO trying to build and run the business and and do all of that, right? And and I think that a lot of people that are are watching this podcast have the same problem. They're wearing so many different hats all day. Um they need to run their business, manage their employees, be an employee, do certain work every single day. We're not in a position yet to say, "Oh, I can hire 20 different managers to do all of these things." Right? What advice would you give me to say that Alex this is how you're going to get to be a soror? No. First of all, I don't think I'm in the position, Alex, to give you an advice. No, yes, you are. You're very smart guy. You're doing well. Let's talk about Jack. Okay, let's get back to Jack. Osara, right? Like Jack in the growth stage. In the growth stage, one of things you want to do is you want to document everything with SOP, standard operation process. I like that. Yes. And how you going to do that? people and often people don't have the time to do it but I think it's time you have the time you have the critical you go basically every Sunday or Saturday when everybody leaves just sit and document one business process one SOP in one year you're going to have 52 SOPs actually you all need to run a company with almost 50 or 100 SOPs is enough to run any company when you have everything documented already I love that that's an incredible I I mean do you have that patented or cointed point because I I think that's it's brilliant and I think that it it's definitely something I want to share going forward if you don't mind with other people listening SOPs and at least documenting one if you do two you're going to have hundreds in one year that's it your business in one year is going to be already running on others number two things I would tell we have a rule one 131 rule 131 one rule When James Justin is coming to you with a problem, he he was one problem situation. He needs to answer with three answers. His suggestion number one suggestion, number two suggestion, number three suggestion. And he has to tell at the end, Alex, there's a problem. Here's three solutions. And I suggest number one or number two, whatever. Okay. So, you know what? I'm going to just talk show you something. You see this thing here? Yeah. when they come in, this is how much time they really have to explain to me what the problem is and how we're going to solve it. Yeah. Right. Because time is really, really valuable and problems need an instant cure or a solution, right? You have all the time in the world. So, I like because what happens what happens with 131 is in the beginning when they're actually putting they have to put it in writing. there is a situation here's a solution one solution two solution three and I suggest solution one or two or three and by the time when they're writing it down the problem and solution Alex is going to tell this one I'm not going to go like the problem's going to start I like that because that would help that's putting it on your people to find an answer correct and you know it's it's a lot easier for someone to make you like I know it's a lot easier for my people to come to me and and me come up with the answer because then they don't own it. They're not responsible for it. Um, and that's a good way that's a good way of allowing people to grow and and make the so in many of my departments I do that. I let people make the decisions and they could be wrong this and you know we're dealing with money and they could be wrong this and that's okay because that's how we're going to learn, right? And we have a overriding levels front line. they can actually deal with $500,000 themselves. The next layer like 5,000 like you have those layers you can put like how much money they're allowed to make decisions on their own. Tell me about one piece of advice that you got and you ignored and now you're going to regret it. Tell me some advice that you got that you ignored. Now you say I should have listened to that. As I said earlier, I don't I cannot remember those uh like things that you're regretting because I don't have much of a regret like I just get a lesson right like I don't remember like I just kind of create some something that you got a good lesson out of you got some advice if you could share and forget about this employee that you shouldn't have fired I don't care about you talking about GPT part or in general life as a business owner as an entrepreneur no no as an entrepreneur while he's thinking if you like this podcast. Please leave some comments. Tell me your thoughts. Ask me your questions. Let me know what you'd like me to discuss. What input, what advice do you need to help you succeed with your growth plan, with funding, with staffing, or any other questions you, the small business owner, might have. Tick tock. I feel like this is Jeopardy right here. No, when look in 2012 when I actually built my first business and I and I got my green card and I left with Bakers for one month when I came back uh my employee actually took over all my contracts and uh SOPs was not documented. I didn't had a backup so became an SOP. Yes. Okay. At that time actually I started actually learning what is SOP is actually and actually documenting the contracts and everything else after I lost half of my business. So sorry to hear that but you're here. Yeah. But but yeah. Yeah. It's it's all good. It's a lesson. See then actually I then I start actually building backup plans. How does did somebody tell you did somebody give you advice at the time that you should know not to let this happen? My question was is there anybody have you ever gotten a piece of advice that you didn't follow that you regret now? If there there's nothing then there's nothing. Or maybe you just don't want to tell us. I cannot remember. If I did I'm going to tell you. Even if I did, even if I did, later I realized then I start actually that lesson became already the hard truth for me. Uh like I said, you know what he was right actually and and it means now I have that rule already built in in place. Uh what about you? The best advice that I regret not always following is my father's words to me. And he would say, "Measure seven times and cut once." Okay? But as entrepreneurs, as business owners, we don't always have the patience to measure seven times. It's a mistake everybody's going to make, right? We don't have the patience. We don't measure seven times. And I always come back and what I regret because those words are always in my mind, my dad's words, right? And I always say, man, if only I measured this four times instead of two. Cuz first measure is always impulse intuition. Well, impulse I like or I don't like, right? And then as you get to seven, I'm going to have to actually write out what those seven measurements are, right? Um, I think the more you me because there's steps in the measuring there's a calculation you could put to the seven steps and by the seventh step you're going to see a result. I'm going to share something really cool with you. Would you like to see something? And this is from my dad and this is very old. My dad was an engineer. I have my dad's This is so cool. I have my dad's engineering set. This this thing is probably 75 years old. Wow. Right. And this is an engineering set that my dad worked on in you know the 50s the 60s uh 70s and you know this is just something that I cherish. I've seen this before you know it's a way to it's a it's a architecture engineering tool and you know stuff like that. So and and and you know when he used to build something I mean just look how many times he would need to do it and measure it and I I don't know how to use half. music. I don't even try to be honest. This is just something I treasure. So, I think that for every successful um uh business entrepreneur or um uh someone in business, I think it's critical like you said SOPs, but before you get to SOPs, you need to measure. And I regret not doing that all the time. Not to look at the seven steps to get to the finish line. That's what I regret. So, Sador, thank you so much for joining me. Um, it was a great conversation, great energy. You're a very, very interesting um, founder and leader and I think that you're going to motivate and inspire a lot of people to move forward. Alex, thanks for having me in your podcast. Uh, it's really interesting podcast for the founders, for the entrepreneurs. That's a circle I want to be with always because it's inspire me for when the people are building and scaling businesses. I think we are doing really good. We are creating jobs, right? Like all of this listeners who are actually the founders and business owners. I'm probably they have some vision. They have some dreams which they want to work on, right? and all that stuff inspires me and I always want to give back and help all of the entrepreneurs to do more good more create more jobs and and I and I believe you are doing the great job on this podcast with sharing and giving back and I really wish you good luck and and a lot of uh podcast listeners followers guys if you like this podcast follow you who who's watching this podcast you know it's about living the dream it's about living the dream that we can live only in America. And so, please comment, share, let me know your thoughts. What can I help you with to get to that finish line and helping you understand those seven steps? Guys, like if you are building and scaling any business, just know everything is possible. Look, if you came as an immigrant from nothing and if you build it, we build it multi-million dollar businesses. And I'm sure you can do that with a native language. You have born here. You know this economy, you know this country, this country is country of opportunities and I believe everyone can do and achieve their dreams here. I totally agree with you. Thank you sir. Thank you. Thank you again for watching. I'm Alex Schwarz with Unbankable.