How To Avoid The Hidden Costs Of Growing Your Business

Starting the conversation:

Are you your own biggest obstacle to success? Learn how to overcome self-doubt and take control of your company’s success. Whether figuring out how to survive or whether to focus on stability or growth, this discussion will help you. There are hidden costs of growth; when possessing as much (of the right) data as possible, you are equipped to make the decisions that need to be made.

Growth takes on many forms in addition to revenue, including infrastructure, skill development, talent, acquisition, and market development. Regardless of the strategic choice you’ve made, there are hidden costs.

In this program, you will find out about the importance of your mindset and the hard choices that show up (including what we’ve experienced), as well as our tips and tools to support you where you are in your growth journey. Jess Dewell hosts Christy Maxfield, President and CEO at Purpose First Advisors and Dean Barta, Founder and CEO at Barta Business Group in a discussion where the three of us talk about turning challenges into opportunities.

Host: Jess Dewell

Guest: Christy Maxfield and Dean Barta

What You Will Hear:

01:50 Knowing the hidden cost of growth is important because knowing where we are being held back (by ourselves or outside influences) allows us to design and take intentional action to achieve our goals.

• Peggy Naomi Wantwadi asks: Will you touch on whether localized market trends vs. national affect growth?

08:01 Work to psych up and we may still psych ourselves out.

• Your inner dialog has real-world consequences.
• Time is relative, go out and take action to harness workflow and mental work capacity.
• Be honest with yourself.
• Stay with the problem when it shows up.
• Michael F D Anaya asks: What advice do you have for someone starting a business when they have yet to begin?

27:50 There are hard choices we have to make — planned and unplanned.

• Kimberly Laverdure asks: What specific growth challenges have you encountered in your business journey, and how have you addressed them?
• Christy, Dean, and Jess share some hard choices they had to make.
• Embrace what growth really looks like for your business.
• Take action toward your goals and challenges that show up because these actions need addressing, even if you really don’t want to focus on it.
• When, how, and benefits to preparing for and maintaining client diversification.
• Start with the end in mind and work your way back to where you are today.

44:17 Tools and advice to assess what information and initiatives have interest and impact to avoid setbacks (and hidden costs).

• Kimberly Laverdure asks: Do you have a particular piece of advice or tool that you feel has had the biggest impact on overcoming business growth challenges?
• Normalize using a SWOT (Strengths, Weaknesses, Opportunities, and Strengths) in your decision-making, reviews, and strategic planning.
• Nuts and bolts of processes matter, automate more.
• You don’t need all the data, just the right data to move forward to our goals.
• Push forward your vision while protecting your assets.

59:00 3 Takeaways:

• There is a lot of experience you can draw on from Dean Barta, Christy Maxfield, and Jess Dewell.
• Keep questioning to grow a successful and sustainable business.
• Let go of your stories and take action that you’ve designed.

Resources

• Hit a Business Growth Plateau? 5 Insights to Break Through
• How Midsize Companies Can Use Uncertainty to Their Advantage

Transcript

Christy Maxfield 00:00
We actually slow down before you speed up.

Dean Barta 00:03
Part of being a business owner is the personal growth aspect of it.

Jess Dewell 00:06
We get to work toward our goal and that particular journey with intention. And I think that’s a big thing, to just keep taking that next step, one at a time. I’m so glad you’re here. Thanks for stopping by at the Bold Business Podcast. We are normalizing important conversations. Yes, there are tips. Yes, there are ways to solve problems. More importantly, are going to be what do you need for yourself to be able to solve those problems and make the most of the education, the training and the programs that you are already using? This is a supplement to that. It can sit on top of it, fuel your soul, fuel your mind, and most importantly, regardless of where you’re at on your journey, maybe you’re starting out, maybe you’re ready to scale, maybe you’re going through reinvention, the conversations we are having will help you at each of those stages. So hang around, see what’s going on, and I look forward to seeing you engaging with our videos.

Announcer 01:06
Welcome to it’s your business brought to you by the Bold Business Podcast. This is your go to source for navigating today’s ever evolving business landscape. In this program, Jess, Christy and Quentin share the realities of current business challenges and triumphs. Get ready to lead with depth, understanding and achievement.

Jess Dewell 01:30
We’re here. We’re live. Welcome to It’s Your Business. Hosted by the Bold Business Podcast. I got to tell you, these are some of my favorite things to do, and it’s more than because of how awesome the people that come join me are, it’s more than I get to learn something every single time I come, it’s because you’re here too. This is what we’re doing. This is your go to source for navigating today’s ever evolving business landscape. And guess what? With conversations like this, you get to add your voice. We get to normalize talking about easy things, hard things, unusual things, and most importantly, normalize talking about things we usually don’t have the ability or capacity or connections to talk about within our own company. And that’s incredibly important. I’m your host, Jess Dewell, and on a program like this today, we’re getting real. We’re getting real about the challenges of owning, running, developing, exiting, let’s lead with depth and understanding, and I am glad to be here having this conversation with two amazing people, Christy and Dean. How about if you introduce yourselves?

Christy Maxfield 02:35
Sure. Christy Maxfield, Purpose First Advisors, we work with growth oriented business owners to help them develop their succession and exit plan.

Dean Barta 02:44
And Dean Business Group. And we work with small businesses and nonprofits well for bookkeeping control level and CFO level services.

Jess Dewell 02:54
And at Red Direction, we’re solving problems that you know you have but didn’t know you could find an answer to. And this is interesting because embracing the differences right the title of our show the hidden costs of growth and how to avoid them, was an interesting conversation that we had preparing for this, and we broke it down into three pieces, and the three pieces we are going to uncover and unfold and dig into today are the psyching up to be psyched out the hard choices we actually really make and have to make in business, and when we can identify what’s holding us back, we know what advice we’re seeking out, we know what information might be helpful and tools that we could use. So those are the three areas, and this topic is always important, but it’s actually more important to me right now than a lot of other things. And to grow we have to know exactly where we are and where we want to go, and one of those things is to really understand what could be holding us back and getting real about it. So that’s my why of being here. How about each of you?

Dean Barta 04:00
I innately just like helping people, and in the process, I learned more through the process. I’m going through a similar structure as what you just went through. Jess is planning for 2025 where I want to be assessing the pros and cons of what happened in 2024 since we’re almost, we’re in the almost, literally the 12th hour of the month or the year the [Yeah, exactly.] So yeah, through these processes, I think it helps every business owner to if you share information, you’re learning something in the processtoo.

Christy Maxfield 04:32
Absolutely. And if I can encourage one person who has just spent a lot of time resisting the need to plan and get them to actually think about their growth with intention. I feel like it’s worth it, like we have to have these conversations to normalize the fact that you can find lots of people who will tell you how they bypass, shortcut or hack something, but. I’ve never seen a hack or a shortcut actually result in the kind of intentional growth that builds not only income, but also value and wealth. And I’ll pop all day every day, about whatever it’s going to take to get you to take, take the time out to actually plan because I think, Jess, you cheat us up the the first thing is making the time to plan. So in some ways, the first hidden cost is it actually takes time. We actually slow down before you speed up. You actually have to plan before you and Jess, right. You are the shoot aim…

Jess Dewell 05:44
I have a plan that’s right. So people would say, fire, aim, ready.

Christy Maxfield 05:50
Even if you decide firing is the way to get the data you need, right? [Yeah.] You still have to go back to aim and ready to use that data, that experience, that iteration properly.

Jess Dewell 06:05
I want to start with this. We had some great feedback in our posts and promotion of this ahead of time, and when we can, we like to include as much of that as possible, because, like I said at the beginning, the more we’re all talking, the more normal it becomes. Peggy actually asked us, will you touch on localized market trends, or how the local or national trends are affecting our business growth? And the answer is, Not today. However…

Christy Maxfield 06:34
Peggy, it will impact your growth.

Dean Barta 06:40
Next week.

Jess Dewell 06:45
But here’s why it’s important. And I’m bringing this up because we all are going to are going to analyze data, shift data, sift it, not shift it, sift the data, and look at it in whatever way we need. And so I think some tools will come out at the end. That’ll help us get the right information. And we wanted to make sure we’re talking about the things that are impacting us day to day, versus those higher things that then we take away and go, so how do I use that? What do I do with this? Because those trends are only as good as the use, and we’re gonna say, you go, get the trends you want. You go understand that stuff. You are mulling and chewing on those questions internally, and then making sure that you’re doing it in such a way that you’re setting yourself up for successful growth, and that’s what we’re talking about today. So I’m excited you’re here, Peggy, I’m excited that you shared that, and you’ll have to let us know if we give you the right tools that allow you to do that. What do you think about starting up, starting with psyching up to psych out Christy?

Christy Maxfield 07:48
When we had our prep call, and I’m always so grateful for Jess for teeing up the topic that we riff on in the background, and then she could shape and form to it. But I also always go back to Jess posts about it, and I’m like, What did she say we’re talking about this time. So it’s both the hidden cost, but also the challenges to growth. And what struck me is that whatever story we’re telling ourselves is either creating a challenge to our growth or a breakthrough through our obstacles, or creating some type of hidden cost in that we can’t necessarily quantify it on the P and L or the balance sheet but the dialog in our head is either psyching us up or psyching us out. And that has a real world consequence because if I take myself out perpetually, then I’m not going to grow right. There. Never going to be a perfect scenario. I’m never going to have enough resources. I’m not going to have enough time. So if I’m psyching myself out a lot of times, I see that with clients who are like, I’m really worried about my capacity. I’m like, Okay, how many clients do you want to have? What does the scope of work need to look like, and for you to have an optimal load, if you wanted to grow and you didn’t want to do all the work yourself, what would that look like? There is no easy answer to any of that, but you can really get into a spiral if you’re like if I go out and talk to people, they will all come to me at the exact same time and watch a piece of me, and then I will be eaten alive by the growth I’ve created. Therefore, I am not going to talk to anyone and generate any new enthusiasm about my services, because I couldn’t do I’m like, Really, no one ever, if you if they all come call me, we will figure it out.

Jess Dewell 09:37
You know what? That’s built into my business model.

Christy Maxfield 09:40
Eating you alive?

Jess Dewell 09:46
So here would be my thing. My thing would be, is I hear you, and I’m like, maybe I need to go back to am I not growing the way that I could because I have this? So I want to call that out. I actually did that, and I built a whole business model around it. And at the same. Point in time, my growth might be different than this other person’s, and that’s fine, right? So to call out that piece, so what it what does growth look like to you? Would be the first thing I would say. The second thing would be, is, what are you providing? And does the product or service really have the potential for that to occur? Because in my case, the answer is yes, everybody would call me and want me to come to their office on the same day. And that’s not possible if everybody wanted something and they had some sort of deliverable schedule, and it was something that they were expecting because it had already been communicated in a certain way. Maybe it could be some of that, not all of it, but maybe not none of it.

Christy Maxfield 10:46
So risk it. Is that kind of that problem? If they all want me to come in Tuesday at 10? Yeah, what am I going to do? Tell them you can’t and write the test alternative days and times would be my first triage.

Jess Dewell 10:56
What are you doing that’s so important that you couldn’t reschedule that? That’s my first question.

Christy Maxfield 11:00
Manage expectations, like you said from the outset. Jess, like, yeah, when we hit capacity, we’re going to have a a month long waiting list. Hey, Dean, you’re in accounting. You have easy. You do have a time where people are all like, there are deadlines that don’t move, and they all, they’re all their stuff, and if they don’t, then they push it off to the next one. And that just creates its own little set of what are you thinking I mentioned.

Dean Barta 11:27
Go play in traffic. It’s good problem to have that you’re so busy that you need to schedule things around. To me, that’s great. That means you have a viable model and everything you could psych yourself out. Okay, I’m gonna wait till it’s perfect. Because guess what, you’ll learn dodging cars and all that to not literally go out into traffic.

Christy Maxfield 11:47
It’s a more like the frog or video game, fully developed, and that you’re not going to take it literally. Oh, okay,

Dean Barta 11:58
I’ve got three clients that want to meet me on, you know, the same time and all this. Guess what? That’s a good problem. Let’s you know, okay, now I could work on my coordination skills, on, hey, how can I move people around and all that? And you’re right. Christy, our season can be more seasonal and all that. And I know now when to let up the accelerated battle and when to get a go. And I prepare my team around that too, and they know as well, and that’s through some of the planning that you may do as well. Because I don’t think it’s sustainable to be 110%, 365 days a year.

Jess Dewell 12:31
Even in the corporate world, I never got past 100%.

Dean Barta 12:35
Let’s just say the expectations in corporate.

Jess Dewell 12:38
I’m gonna call that out, because that differentiator is important here, when we set ourselves out, Dean and Christy, you were touching on this too, where just because we think it doesn’t make it real.

Christy Maxfield 12:49
And we’ve all probably had a corporate experience where someone put an unreasonable workload on them and basically said, figure it out, right? We own our businesses. We don’t want to do that to other people. One of the dynamic tension become, when do I know how to hire you only really have two choices. One is to take your current resources and stretch them to their ultimate act, hoping they don’t break along the way, with the idea, usually of I will make as much money as possible, and I’ll have more money in the bank, and there’ll be more security, and then I can let the pressure off by bringing in this other person, or you can do that preemptively, knowing that you’re not going to have them at 100% capacity to begin with, but that the investment in getting them onboarded before everybody is stressed out and losing Their mind is well worth the payoff of under utilizing them for a period of time before they before you fully utilize their capability.

Jess Dewell 13:47
And I will tell you in real life, you’ll probably wait until it’s too late the first time to hire somebody and learn from it. In my world, everybody was telling me before the birth of my first child, you don’t really know what it is, and I have this whole big plan, and this child arrived, and the plan didn’t matter. And you have to learn as you go sometimes, and I do your example, I think is a big part of that. You can listen and you can learn, but until you get in it, you’re really not in it. And I think that it’s okay, that it’s not gonna go the way that you think.

Christy Maxfield 14:19
We never think that. We always think it will be worse. We never think it could actually exceed our expectations. And what I’ve heard you say earlier, guess is I built into my business plan a way of managing everybody wanting me all at the same time.

Jess Dewell 14:34
And that’s for every person in my business,

Chrsity Maxfield 14:36
Whether that’s I knew I had the capital hire somebody if I needed, or I could outsource certain things if I needed, yeah, and I remind people, if you’re psyching yourself out because you’re like, I can’t do kid pickup and meal prep and take care of all these clients, and you can outsource on your business side, and you can also outwork on your home side, right if you need somebody to go and do. The Instacart and pick up groceries on your way home, or have some prepared meals, or clean your house for you, or pick up the kids afterward. To grow increase our capacity, either by hiring out or otherwise resourcing. But it can be. It doesn’t always have to be in the silo of your business, I could increase my capacity by freeing up time from other areas of my life, if that’s what I so choose. But yeah, if my cat, if my time is short and I have the money, I can use my money to increase my time, right? It becomes this trade off, and it’s not binary. It’s not one or the other. And I would say managing expectations. I have had meetings with people where we’re going in to talk to a client, they’re like, I can’t do one more thing today. And they sit across from the client and they say, I have a proposal to you by tomorrow afternoon, and I just want to trip to them and be like, did you? Did we not just have that conversation like they did, not for tomorrow afternoon, but and you’re you don’t have any more capacity right now, and you just offer. Why? I’ll have that to you in a week from today. Is that okay? I have almost never had anybody say to me, absolutely not. I need it in 48 business hours, or you might as well not even submit it. I can’t even imagine a scenario where I had that kind of thing.

Jess Dewell 16:28
Now, we’re talking about what the reality is of actually trying to have a conversation.

Christy Maxfield 16:32
Liking ourselves up and out. Oh, I don’t get this to them right away. I won’t get this business if I don’t over perform and overwork the scope, I won’t keep this client. [Well, that is actually a part of hustle.] Our Omni hour and respond within 30 minutes of getting their email. The world’s gonna fall like…

Jess Dewell 16:49
I’ll bet you Dean has an example from the wilderness world, because I have one as a parent of a student athlete, I am learning that whatever profession we are in, there are similarities to what we must do in business. And so if we have a strength, a hobby or something like that, and we have trained and have discipline there, I think we could pull from that. Because what I was hearing you say was, and we’re going to talk more about this, the hard choices. So I’m going to stop there, not saying anything else yet because we’re not to the next part just yet, but I feel like we’re getting a little close before we transition though. Dean, what else did you have on your mind about?

Dean Barta 17:27
Well, a couple things is in just to touch upon what Christy’s mentioned, it too is what I’ve advised businesses is, and depending on your size and what your role is, of course, but is, hey, do what you’d love to do, and what you’re good at, those things that energize you. We’re talking about managing time and money and energies, and you outsource the stuff that is to people who love geeking out about that that energizes them, and because that is how you can maintain whether maybe you like grocery shopping for your kids. Okay, it’s away from the opposite. Okay, but be but really honest with yourself about, hey, what provides energy with you with this business, and what doesn’t? And then have someone who does that. Now, I’m ex search and rescue wilderness first responder, so I’m climbing doubles tower, okay? And not been huge rock climber, but I know enough to stay safe. Went to repel off scared this close to an anxiety attack as I’ve ever considered okay. And I mean, I actually thought about, we’re gonna have to have search and rescue, take me off the top, which totally, totally crushed my ego to a pulp. Okay, if I had to do that. But guess what? It’s like, hard business decisions. You know, I had to move forward through it. But guess what? I tell people, you know how I saw a Devils Tower six feet at a time. It’s staying in the presence, staying with the problem that’s right there, not the 750 feet of open air below my feet, which is scary, but that’s guess what the unknown. That’s the psych out portion of it, and the psych in was like, guess what? I just had to focus. I’m focusing on six speed at a time, and that’s getting back to, hey, getting out and put you got to get into the game and focus yourself right there. But that’s my short story about that.

Jess Dewell 19:33
I think that’s really good, and it actually does set us up for transitioning into our second piece. So psyching up psyching out, and then the hard choices that we actually make. Here’s a question that came in. Michael asked us this question, what advice do you have for someone starting a business when they have yet to start one? And we all decided we think that question goes here because it’s a choice.

Dean Barta 19:57
Especially if you’ve never started a business before. Yeah, and yeah, it can be a very tough decision, and pulling out of my skiing industry, and Warren Miller is like, Hey, if you don’t do it now, you’ll just be older than when you do decide to do it. So that’s one aspect of it, and the other aspect is, hey, if you’ve got family to feed and stuff like that. Be judicious with your decision making, and reach out to people who have done it because the worst thing any person can do when they’re first starting a business is try to do it themselves.

Jess Dewell 20:34
Just to make sure your head’s on the way you want and you’ve got all the right questions. There’s this person named Christy, there’s this person named Dean, there’s this person named moi, actually Jess and,

Christy Maxfield 20:48
Yeah, you call her moi Jess Dewell.

Jess Dewell 20:54
But it’s true, you bring up such a good point, and the hardest choice is to do it and then feel like you’re all alone. And that’s the I would say. I would say the first three businesses that I started were like that, and the first three failed. It took the one I didn’t do by myself to have success. And in fact, Christy mentioned this earlier, I almost didn’t do that next one. And then when I did it, it was more successful than I had ever could have imagined. That would be what I would add to help answer Michael’s question. Do you have anything before we actually go into the hard choices and experiences?

Christy Maxfield 21:34
The risk reward. We’re talking about, you’ve already overcome the startup phase. You made it through the belly, a first valley of death. Some people bought what you were selling, and now you’re like, I would like more of this, and ideally, I would like more of this in a better version of it, right? Like smoother operations, more streamlined. So you end up reaching out when you get to this inflection point, and you reach out to someone like us, and you find a good partner who can help you weigh the not the pros and the cons. So much. What do you want your risk portfolio to look like? So I have never climbed a mountain, and I am not going to have anywhere near 700 feet of open air under me at Burr. But if I did consider doing that, I would get the best trainers. I would learn the best techniques. I would practice, practice, practice, practice, practice, and then I would find ways to de risk it. I personally would use the harness and the rope and the climbing buddy, and I’d let people know where I was going, and I’d make sure if things went south, somebody knew to call somebody to come rescue my butt, and we tried to practice the best practices for the endeavor and create a situation where I was putting myself at the least amount of risk. And so if you’re thinking about starting a business, I ran my numbers. I knew what my runway was. I knew I could go seven and a half months without pay, on my purses, and then my psychological unconscious, part of my brain hoarded canned vegetables. If you opened my closet in 2010 when I was doing my first startup, I think some level of my brain thought, plus you have canned peas, at least you’ll have canned peasy, because we have an inordinate amount of them. Now, if I was going to say, Wow, I’m going to sink another $100,000 into building my business, because I think that the net growth plateau is going to pay off the dividend, I would find ways to de risk that to the point where I felt comfortable enough to take those next steps.

Jess Dewell 23:42
You’re listening to the Bold Business Podcast. I’m your host, Jess Dewell. This is your program for strategizing long term success while diving deep into what the right work is for your business. Right now.

ANNOUNCER 23:54
You’re listening to the Bold Business Podcast hosted by Jess Dewell, a nationally recognized Strategic Growth consultant. She works with business owners and executives to integrate just two elements that guide business through the ups and downs of growth. Number one, know what work is necessary. Number two, do all the work possible. Schedule a complimentary consultation to find out more at Red direction.com.

Jess Dewell 24:22
Dean, you’ve been thinking about this. Your stories rival mine sometimes. And I’m like, holy cow. And this is how about, if you start us off on the hard choices that we make, and how those choices actually can be hidden costs?

Dean Barta 24:39
Certainly I’ve had plenty of hard choices, but I would say probably one of the more challenging one that I’ve had is I was in a partnership with a very close friend of mine, like close friend, like best man at my wedding, close friend, and also had done a bunch of outdoor activities you’ve. Bring people. Your life depends on it kind of situations, but the partnership was just not working out. It just wasn’t and I had to make a decision that, you know, hey, I’ve got to split up the partnership. And there’s other things that are going to go by the wayside because of that, and take a big risk on my own skill set, so it was a calculated risk. But as you’re talking about Christy is, hey, you got to look at, do I have enough peas in the cupboard? I’m going to use that one in future. But I had enough experience in this industry where I said, Hey, it’s because it’s not working out on multiple levels. This partnership, but wasn’t working out, and took that risk and and yeah, those first six months, but certainly lean, and there’s that friendship and all that that went by the wayside as well. But I’m much better for going through that decision in on many levels. And I think, can you touch upon a little bit too? Christy, is that part of being in being a business owner, I think for me, is the personal growth aspect of it. I feel like I’ve grown a lot more being where the buck stops here, than I did middle management in corporate and things like that. Yeah, it’s those hard choices you have to weigh all of these. But, and just one other thing they’ll bring up is, yeah, when I did repel off the devil’s tower, guess what, even though I’m like, literally shaking, but guess what, I was checking the safety of the rope, my harness, belay device, all of that before I stepped up, I just didn’t say everything’s gonna be okay. So there is checking those safety features. So I guess that’s my can of peas.

Jess Dewell 26:53
That’s great, yeah, and we’ve jumped in to Kimberly’s question for us that she was asking specifically about growth challenges that we have encountered in our journey. And Dean, you were just sharing one. Do you have one Christy?

Christy Maxfield 27:06
Needing to decide, as I think Dean mentioned earlier, what does growth look like for you? And then do you want that? At certain points in your entrepreneurial journey, having a million dollar business and three employees, and whatever the case may be, having a $50 million business and 40 employees may sound really appealing, and then when you start to navigate the pathway there, you may change your mind. So I think however your growth challenges show up, they’re probably going to run some common themes. And as we said, before finding other people who have walked that path and had to negotiate those same things and make some of those same choices, whether it’s about when to add staff, how to raise capital, how to finance your growth, where to invest in order to be growth ready, because if you’ve got a sub optimal system, and you try to put more through it, you’re going to get sub optimal results. So I know that’s not as specific as breaking up with your business partner, but if I look at some of the experiences when I did my first startup, the founder laid a lot of groundwork before he brought me in as a number two, and I blew up a lot of his stuff in the first six months. And in blowing it up, we had to have a plan B. So I think the challenges are actually taking the action you know needs to be done, even when it scares the beat you. I mean, like Dean could be on the mountain today, hanging out waiting for somebody to come get him.

Jess Dewell 28:58
One of the examples that I know I have. I started a company with somebody. We had different skill sets. I was going to be the sales side. They were going to be the delivery side. We get together, we both pool our money. We do all of the branding stuff. We get it started, we launch, we take on our first couple of clients, and she disappears with all the cash in our bank account.

Christy Maxfield 29:18
Oh, girl.

Jess Dewell 29:19
Yeah. Oh, you didn’t know this. Christy, oh yeah, yeah. And so here I have clients.

Christy Maxfield 29:24
And she just said she’s the person delivering the service that you went out and sold.

Jess Dewell 29:29
I didn’t know. I wasn’t involved in the delivery of the product at the end. So guess, right, there’s Oh yeah. Apparently this is a lesson I have to learn somehow, because that was actually one where I was able to, I was able to, I actually did trades with other people. I found somebody who could do the work, and I gave them a trade of my time within their organization so that they could benefit from the cost that I needed to repay somebody. So I took responsibility. I served the customers to the best of my ability, on both sides, without having to exchange any money or taking on any debt. I just put in my effort at my time and my integrity of that one.

Christy Maxfield 30:10
That’s amazing because you’re watching then again, there too is where we’re doing that startup with a founder and another founder was to we were building an administrative services company for nonprofit, and we were going to offer accounting and insurance and all these things. And I’m wasn’t an accountant and I didn’t have an insurance license, right? But I’m out there growing the business and selling these things. And the first rule was, don’t make Christy a liar, right? So the challenge was, as a non technical founder, as a not this and a not that and a not this and a not that, how do you assemble the team that can deliver on the promises you’re out making? I knew what the problem was. I knew who the client was. I knew what a solution was and I could sell it. I had a delivery challenge I had to solve.

Jess Dewell 31:02
I was not looking to one up anybody. I was just like, I got a lot of them but I figured I’d start with that, because it was a startup, and it was a what you do and when you put trust in somebody, it doesn’t matter if you know them well, like where Dean was at, and you part ways, or you don’t know them very well, it can still take a turn in an unexpected way, and it’s a challenge, especially when there’s a value change or some sort of trust issue that develops somewhere in there, and the sooner we can get there, the better. I can tell you another big one, the cost of hidden growth, that I see the most, is in client diversification. One of the things that is, and this has happened to us before, too, in many different ways, not at Red, not at Red Direction, but in all of my other companies that have had any level of success, we have dealt with this, and that is that one or two clients make up the majority of the income, and you build a structure around that, and then one of them goes away, and they don’t know why. There’s all kinds of reasons why. And we’ve had, I know I’ve had clients and worked in companies where, because client just showed up out of nowhere, because they didn’t feel like they were listened to, asked for an on site meeting and fired us to somebody got acquired, and all of a sudden, all of all the our part that we were delivering on all of this stuff just dried up, and nobody told us. And so what do you do in either of those cases? When that diversity is there that is actually hidden cost, we relish in it. It feels good. It might be like what we’ve known before. So there’s a little bit of comfort in that, oh, we’re our own business, but we’re employed because this one person or two people in by people, I mean, companies are bringing us all of this work, and that is a scary place to be, and that is a hidden cost of growth, because not only do we get stagnation into do I really want to, because it’s comfortable here, which is a real thing, but the other flip side of that is what happens When they go what happens when their situation changes, and then what happens to us? And do we understand what we’re going to do, and how fast can we respond? Because the response isn’t do whatever it takes to keep the business, because that’s actually also hidden cost that I have seen in practice, also been guilty of discounting prices so much to keep it right? We’ve all been there at one point, and it usually happens with that top tier client.

Dean Barta 33:27
I call it the Walmart client effect, yes, okay, yeah, let’s say that little cottage there they build bird houses or something like that, and they’re like, Hey, we got a contract with Walmart. And they’re like, bird houses. All of a sudden, Walmart starts squeezing them on prices. And my equation, and what we use too, is you should not have one client that has more than 25% of your business, because that’s red flag, because they can whatever. There’s various reasons why they can go away, and probably 99% of them are out of your control, and it’s managing that challenge. And I think one of the things about growth challenge too, and we specifically address this with our business owners, is, I think one of the best things they can to create that more ideal vision is have an exit strategy to me, because it changes the mindset of most business owners that if they know, oh, I only have five years or 10 years or whatever, that’s a great way. That’s one of the best planning things that they can do, because guess what, you’re not gonna live forever and figure out how you want this exit strategy to look like. Actually, this is a guy, George Gillette, who used to own part of bail resorts back in the day. It’s one of the bits of advice. He told me, start from the end and work your way back and in that you can then manage. Much, and least you have a better picture. Okay, we’re going to have ups and downs, peaks, valleys, all that kind of stuff. This is the ultimate goal was by whatever year 10, or whatever it might be. This is what our plan is. And then it’s all micro adjustments because you’re going to as part of business, you have growth challenges and all that. But if you know what the kind of the end game is, that, to me, has alleviated a lot more people’s fears than gets credit for, honestly, because people are like, oh, you know, start a business then. And I will ask them, even in year one, what’s your exit strategy in the room? We just started it. And I go exactly, you know. And especially, especially with partnerships, we have two stories here between Jess and me, and I could go in about how partnerships are the worst shift you can be in. But anyway, that’s my bit of advice.

Christy Maxfield 35:52
And I think that speaks to the point dean of having to make hard choices, like you literally have to make choices that you can’t leave everything open ended, you can’t actually do five things at the same time. You probably have to pick one right? And you have to make choices about who and how. If I’m going to prepare for growth, and I’m going to say I want to increase my revenue and my profit, then I need to have strategies that allow me to do both those things. And so one of the things I might do is say I can increase my profit by not hiring anybody else and just doing the work myself. Now I’ve created a greater dependency on of the business, on me, which actually reduces its potential future value because all that money I saved, all that profit I pocketed was actually inflated, because I didn’t reinvest in the business. So it’s not actually there. It’s not sustainable. And if I don’t invest in more people and more talent and more systems, I can’t sustain the growth that I’m going to achieve, and at the same time concentrate my clients into a small number that I’m highly dependent on. I further devalued my business. So you could be like, I’ve got 2 million in revenue and I got a 15, just 20% profit margin, and if I leave the business, it will collapse. Nobody buys that business, or how good the cash flow is. I don’t care how much the year over year growth is without properly investing in it and diversifying and making it transferable.

Jess Dewell 37:37
That’s why we’re here. We’re talking about the hidden cost of business growth you’re listening to. It’s your business brought to you by the Bold Business Podcast. Don’t forget, we’re talking in depth about things that matter today to lead well with intention, and most importantly, talk about it so we can normalize as much success as we can, as well as getting the help we need when we encounter the challenges along the way. I’m your host. Jess Dewell with Red Direction.

Christy Maxfield 38:04
Christy Maxfield with Purpose First Advisors.

Dean Barta 38:07
Dean Barta at Barta Business Group.

Jess Dewell 38:10
This is where we want to bring it home. So we’ve shared the mindset piece psych up to psych out. We’ve shared personal experiences and learnings from that we’ve had directly and that we have helped our clients go through, and now we are ready to talk about ways that we can take this information and make it really practical. What tools do I use in my planning? What tools have become so important to me with all of my stellar and spectacular failures, and my amazing and awesome successes that I actually work with clients and use, and I would say the thing that I use the most, which is a SWOT, strengths, opportunities, weaknesses and threats. It’s a dynamic tool, though, and people don’t really resonate with its depth because we’ve been talking about all kinds of things, and some of our plans and our goals might be written down, but when we really identify not only our own which, by the way, I think is important, as when we are on a path of accelerating our own journey to different places, or when we’re the torch bearer, and must we still need to know our own strengths and weaknesses, and then what are our organizations strengths and weaknesses, opportunities and threats, and the one that matters most in terms of how to make all of what we’re talking about practical, swinging all the way back to Peggy, whatever stats and whatever information you get that’s going to be your strengths, excuse me, your opportunities and your threats. How does your company respond to those our swots for myself, as well as for Red Direction, come out every single quarter when I am planning, and they spend a little more time on my desk for annual planning. It’s because I want to know what challenges did I face, and did I mitigate any of my weaknesses or reduce any of my threats? Or from the outside, I want to know, what are the things that I want to do? Where do I want to take Red Direction? Can we do it with what we have now, or do I have to get something else in place? It is one of the coolest, quickest tools to ask questions about, where do we want to go, and what do we already have to get there. And so I’m a big fan of that. In and of itself. People are like, Why do I have to do this with you? I said, Oh, trust me, and every single one of my clients for the last 20 years, after doing this, working with me several years, our clients are with us about average of eight years. They don’t they can’t live without it. And they might be like, Oh, we have this thing. But every once in a while, I’ll forget and they’ll be like, Hey, we’re missing something in our strategic sessions. Sure enough, it’s the SWOT. So, that’s what I would bring.

Christy Maxfield 40:48
I learned a variation yesterday. Vern Harnish, who founded EO and knew his written book on scaling, has come up with sweat, S-W-T, strength, weaknesses and trend. And the variation on weaknesses in this one is that there are things you can’t change. So they’re not things you would try and improve upon. They’re like the truth of your industry, whatever that might be like. These are the regulations in our industry, whatever other constraints that are not actually because that helps you identify what not to focus on, because I can’t change them. But then, in knowing that, does that create any other opportunities? Potentially, by understanding your Trend, you can understand if there are embedded opportunities.

Jess Dewell 41:43
So you’re not looking at ways you might becoming obsolete. You’re only looking at disruption that might be coming.

Christy Maxfield 41:48
I don’t know if you not looking at how you become obsolete, but what you’re really looking for is, where do I want to put my energy, versus not even invest any time or energy versus are there un is there untapped potential that I haven’t yet recognized?

Jess Dewell 42:06
Okay? Because, see, that’s where my threat piece comes in. Because I’m like, I’ve had companies that like, No, I don’t want to do that.

Christy Maxfield 42:14
In a traditional plot that’s where you would find your pestle analysis, right? That’s where you would look at the political, the social, the environmental, the legislative, and those are typically things that are creating macro and micro trends within your environment. New technology is being introduced to me like AI, right? That is not only a trend, but it has fundamental implications on how certain businesses will grow and prosper in the future, and it’s unlocking new opportunities for people to figure out new business models, right? So I could look at it as an opportunity, I could look at it as a threat. I could look at it as a trend. What does the different lens of looking at it? Which question does it prompt me to ask? Because that’s what I took from you said, Jess, was this tool helps me ask better questions?

Jess Dewell 43:03
Yeah, ask and so does it align with my goals? Is it aligned with where I want to be in five and 10 years? Because I’m looking at that as I ask all my clients to. How about you, Dean?

Dean Barta 43:15
I don’t know the information you have, you both are talking about is That’s right, it’s so much fun to be with you. Yeah, because you guys are just like, well, your stuff so well, but my stuff is more nuts and bold stuff. I look at it like turnover. If you’ve got a position, there’s you got to find out why, why that keeps happening. A lot of times. In my experience with the clients I work with, it’s processes, the systems or something, is they’re not automating enough to have someone inputting stuff into a spreadsheet. Why don’t you just go back to 1985 because that’s what you just did. When you can get back to the future, okay, you could get into the time machine and the DeLorean and do all that, but if you want to keep employees around, you got to get some feedback from them, because what we have learned, least what I’ve learned from Undercover Boss, guess what? They go and find out who the employees working with the front line customers, because they’re going to give them the best feedback, because they’ve become too insulated from what’s going on a day-to-day basis. When in doubt, ask your front line employees, they could tell you the real deal on what’s going on.

Jess Dewell 44:29
I love that Dean, and that actually reminded me we have one more request and question.

Christy Maxfield 44:34
I would love red to Dean, and that’s the thing, what Dean does by giving you a finger on the pulse of your financial narrative, helping you look at your numbers from different ways, helping you make meaning, because a balance sheet Net Income Statement mean nothing if you can’t tell the story behind the numbers right, if you just took out your income statement, your balance sheet and your Cash Flow. And you said, What is the story that my business told me over the last 12 months? Do I like the story? Is it a good story? Am I liking where it’s going? I’m watching the plot line. Do I like this plot line, or is this plot line heading to places I don’t want it to go? And what control do I have over that? Like, where do I need to probe further? Because then you can grab Jess’ tool, you can get the SWT and you can do visioning, and you can create a new sales plan and revamp your marketing. But the numbers can help you also ask, really important, why is that number high? Why is that number lower? What’s in that number I have a client who reclassified how she managed some of her expenses over the years, so now she has a clearer view of what’s really related to a certain expense. But when she does a year to year comparison, she has to remember to tell the narrative of why this number looks so different.

Jess Dewell 45:57
What I hear you saying, tell me if I’m off base here, Christy, is that we don’t need all the data. We need the right data.

Christy Maxfield 46:02
Again, on my mileage cost, if I’m not really doing a whole lot of mileage, right, but I’ve spent a lot more on professional development and what I would consider lead generation marketing. Think that I am doing specifically because I think of their business development potential, right? I’ve got to look at those and see what kind of outcomes I get from those investments, and not just say, oh my god, I increased expenses by 20% this year. I need to cut and flash and burn if did 20% yield 30% on the bottom line, in which case I’m going to keep spending some of that money, if not all of that money, because it had the desired end result. But I find people are intimidated by their numbers. They don’t really want to see them. They’re afraid that what they’re going to see or not see. And if you can put that aside and say it’s data, it’s information, and I get to understand what it means and how I might want it to look differently in the future. I think what gene does, the reason his company exists is to put more resources and tools at your disposal to help you overcome some of your biggest growth challenges.

Dean Barta 47:17
You touched upon the Big Three is statement of cash flows, balance sheet and income statement, that’s your score card. And guess what? Just like your favorite sports team, you got to live with the win loss record. And I like, you know what you said, Christy, too. Is that to me, everything is, where’s the return on investment? That’s employees, that’s equipment, that’s marketing, whatever it might be, and you have to be really honest to say that just didn’t pay off. We got to get something that works better for us and but all of that syncs up with your personal goals, your business goals and all that, because maybe that marketing that you had a good ROI, but gosh, your team is exhausted.

Christy Maxfield 48:02
Maybe that new hire hit all of his sales goals, but he’s a real jerk, and he brought down morale, right? Or maybe the person you love working with doesn’t actually produce the results you need. If the challenge to your growth is that the people you have are no longer the people you need, and you’re unwilling to make those changes. That’s both a mindset thing, a decision making, an executive decision making thing and hard choices decision. And there’s no amount of tools that will get you out of that right? But then it’s just, am I willing to deal with reality.

Dean Barta 48:37
When it comes to senior people, whether it’s the owner of the company, or the president, or whatever is I see two roles, okay? Two, one line descriptions is push forward the vision of the company, and the other is protect the assets of the company. That means people, equipment, all that those two things, because that’s what provides, in a way, security, because your team has to know that they’re going to have a job, or because people work better when they have a sense of security. Hey, yeah, payroll is going to be and my paycheck is going to be there. Right? To me that I just boil it down to that, and that’s what every top manager or owner should be really looking at.

Jess Dewell 49:20
What are our biggest takeaways from today?

Dean Barta 49:23
I’d say, I we’ve lived a lot of life, and we, we’ve had a lot of challenges.

Christy Maxfield 49:29
We’re pretty cool.

Dean Barta 49:33
We don’t, don’t have any fun at all with what we’re doing, so.

Christy Maxfield 49:37
None. We care very little about what we do and who we do it for. [Yeah, I get that.] Keep probing in terms of why you want to grow, how you want to grow, and what will make that growth as successful and sustainable as possible. And so whether that you need a new study toolset to help you do it, you need other people. Human intellectual capital to help you do that. One of the posts I shared, and we in our social media posts, was Dr Henry Cloud was like, the single thing that’s blocking people’s growth is to realize they need resources that they don’t, that are not personally housed in their person. Like you need a lot of what’s personally in your person, but you also need to tap the experts and the professionals who can help you do this, who can really unlock your potential. So if you’re really struggling with growth, it’s time to step back and be like, who needs to be there?

Jess Dewell 50:35
Yeah, that’s a little bit like my biggest takeaway, which was there a lot of stories we can tell ourselves to get in our own way, whether it’s our advice or our tools or our examples that can help you get there, see if you can find at least one of your own stories. Because that my takeaway is that we get to design the action you take next that I think is a huge piece of cool. There’s going to be hidden costs cool, there’s going to be challenges. We get to do it, and we get to work toward our goal and that particular journey with intention. And I think that’s a big thing to just keep taking that next step one at a time. And guess what? Everybody that’s it. We’re here until next time.

Jess Dewell 51:15
Every single time I have a conversation, I take away something that I want to share with 25 people. I know when you’re listening to this podcast, you’re also listening for that and will have something that you want to share in the comments. I would like for you to engage with us. What is that thing that you want to tell 25 people from this program? Here’s why it’s important. It’s important because, yeah, there are going to be how to’s, yes, there are going to be steps. Yes, you’re going to be like, Oh, I wish I wrote that down. I wish I wasn’t doing this and I could actually take action on that right now. But guess what? You’re not so engage right now, because that one thing you want to share with others will be the thing that you can figure out how to incorporate in your business, in your work flow, in your style tomorrow.

ANNOUNCER 52:06
Jess hosts the Bold Business Podcast to provide insights for building a resilient, profitable business by deeply understanding your growth strategy, ensuring market relevance and your company’s future, it is bold to deeply understand your growth strategy with your host, Jess Dewell, get more information about how to drive solutions and reset your growth mindset at Red direction.com. Thank you for joining us, and special thanks to our post production team at The Scott Treatment.