Latest / Financial Survival Network / Building Billion-Dollar Dreams: A Deep Dive with Adam Coffey #5934

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Building Billion-Dollar Dreams: A Deep Dive with Adam Coffey #5934 · Financial Survival Network

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And the question I get asked most is if you had it to do over
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again, what would you do differently? And to be honest, you know,
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it's I want to spend twenty one years as a CEO building billion dollar
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businesses for other people. I would have started my own empire earlier. And
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I do think the American dream, call it the entrepreneurial spirit far from dead.
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You know, based on my activities in the last couple of years,
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there's about to be a resurgence I think in small business and small business becoming
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bigger business. You were listening to Carrie Let'sa's Financial Survival Network where you get
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valuable information you just can't find anywhere else to thrive in today's trying times.
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You need the Financial Survival Network now more than ever. Go to Financial Survivalnetwork
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dot com and get your free newsletter and gift. Financial Survival Network now more
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than ever. Welcome you are listening and watching the Financial Survival Network. I'm
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your host, Cherry Lutz. Hey, we're just about the at the end
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of October, and hey, so far no crashes. But person you're about
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to hear from isn't here to talk about crashes. No, he's talking about
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building your billion dollar dream and author and also returning guest author of new book
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Empire Builder, The Road to a Billion and his name. Your name is
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Adam Coffee, and your book is officially an Amazon bestseller. The only place
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where it's not a bestseller now, I think is in Antarctica, Oceania.
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It's a bestseller Asia, Europe, South America, North America, all these
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places. So it's a book you definitely want to get, Adam. It's
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great to have you back on. So according to your book, the American
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dream is not yet dead. It is not Jerry and glad to be back.
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Thank you for having me back. Hello to all your listeners out there.
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I would tell you a matter of fact, you know, the question
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I probably get asked the most. I spent twenty one years as a CEO
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building building three companies for nine different private equity firms, and the question I
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get asked most is if you had it to do over again, what would
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you do differently? And to be honest, you know it's I want to
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have spent twenty one years as a CEO building billion dollar businesses for other people,
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I would have started my own empire earlier. And I do think the
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American dream. Call it the entrepreneurial spirit. Far from dead. You know,
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based on my activities the last couple of years, there's about to be
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a resurgence I think in small business and small business becoming bigger business, which
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is really what the focus of my book was about. All right, So
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how do you take a small business and turn it into a billion dollar money
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maker? Well, let me start with a story if you don't mind.
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You know, when, uh, not too long ago, a billionaire and
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I have an NDA in place, so I can't disclose the name, but
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I said, you know, please come see me in Granti's, Connecticut.
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I'm having a problem with a company I own, and I like to talk
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to you about fixing it. Giant company. Everybody in America would know the
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name of this company, and it's kind of lost its way over time.
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And you know, he's talking to me about how do you fix this this
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this large business, and and you know, we've had three CEOs come in
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fail and it's like, you know, what, what would you do differently?
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And and to answer your question, I'm getting there in a roundabout way.
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But the answer is, I don't fix the big company. I go
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back to the unit level economics. I don't need to fix six thousand service
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vehicles, you know, and hunger. I got to fix one truck,
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one service call, one service event. And when I focus on the unit
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level economics of this business, in essence, I'm fixing this global behemoth.
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And one of the things I noticed, Carrie was that you know, when
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the statistics are just scary and shocking. If you go to SBA dot gov,
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you know you and you find out about small business thirty three million small
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businesses in America today, only seven percent get to a million dollars of revenue,
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only forty percent are profitable, more than half will go bankrupt over the
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next five years. Why can't anybody seem to get it right? And the
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more I looked into that as a guy who's bought fifty eight businesses, to
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me, it all comes down to unit level economics. If you know,
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in order to build a perfect big company, you have to start by building
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a perfect small company. And if you can get then perfect business dialed in
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between one hundred thousand in revenue and a million in revenue, that I guarantee
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you what you have is a scalable business that with some tools that I talk
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about and teach you can get to that elusive billion dollar mark. But it
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starts by building the perfect small business. Unit level economics are where most people
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go astray, and tons of entrepreneurs tell me, you know, Adam,
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I'll worry about how to get profitable when I get bigger, and I tell
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them wrong answerabout to get profitable when you're small, because otherwise you waste time.
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And that's the white thing we can't buy. So true, and one
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of the things that I do in my spare time, I was a mentor
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for Service Corps Retired Executives SCORE, and I built a number of businesses,
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and I specialize in this thing called the ninety day turnaround guarantee, the day
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turnaround, because at this point in life, having done it with myself,
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I can walk into virtually any business that's not making money, that's losing money,
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or that isn't profitable enough, and I could spend literally an hour there
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and I can turn that company around to ninety days. How because I've done
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it myself. Because all the stupid things I've done, I can see in
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the others and more stupid things that I've never even thought of. As we
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get older, you know, old guys rule, you know, because we
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learn, we learned from having already made all these mistakes, you know,
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for for sure, And I think about, you know that, what you
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just said, the ninety day turnaround. So I still look under the hood
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of hundreds of companies a year, and I'm doing that doing operating partner work,
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you know, for pe firms, or I'm doing it as a coach
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mentor to CEOs and founders who are scaling their businesses and trying to build them.
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And I apply this thing I call the thirty twenty ten rule. And
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you know, service businesses. Not to sound sexist, ladies, but you
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know, my world, my wheelhouse is guys trucks broken stuff, guys trucks
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building things, you know, guys trucks doing something at a location. And
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I look at those businesses and it's like, you know, you got to
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turn thirty plus percent minimum at the gross profit line. You got to have
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SG and A at lower than twenty percent, and you have to have a
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minimum a dime amount of dollar net profit at the bottom. And if you're
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not in that thirty twenty ten wheelhouse, just by looking at one financial statement,
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I know where to focus my efforts. You know, if I'm under
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thirty percent gross margin, I got to work on unit level economics, not
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charging enough, my service costs too much if I'm if I'm over twenty percent
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SG and a I'm spending too much money on the back office, and all
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of these things I think we learn over time. Help us now just quickly
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get in evaluate a business, and once we know where it's broken, we
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know where to fix. Yeah, and usually it's a combination of those three
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things for sure. You know, sometimes there are costs are just too damn
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high, right yeah. And that could be the cost of goods, cost
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of service is provided. It could be they got too many people working there,
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you know, could be a toxic employee, that's uh the cause of
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it. There's so many potential causes. But like you said, you own
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in immediately and you know exactly where to look, and then the and then
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it just becomes a question of implementing solutions, right. Yeah. It's you
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know, strategic based, you know, initiative strategical, and you know strategic
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planning, you know management systems, you know systematizing using KPIs. I mean
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all these things. You know, I learned this stuff, you know,
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back at GE and the and the Jack Welsh era, and you know,
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became a turnaround guy there and at GE when I was was there for for
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the ten years I was there, the company was growing so fast it was
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doubling in size every two point eight years, and that equates to a thirty
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percent compound annual growth rate. So the other thing that I'm known for a
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time game. Yeah, yeah, that's changed quite a bit over the years,
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you know, over you know, one of the things that I've known
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for is building strong culture and then bending the growth curve and getting companies to
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achieve and hold a thirty plus percent compound annual growth rate. And there's a
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lot of different tools to use to do that, but you know, essentially
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it's like all of the experiences that I've had across my career, you know,
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just kept you know, kept being additive to each other and ultimately,
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you know, ideal ideal in cliff notes. And so what I try to
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do with this book was to give entrepreneurs, whether they were a startup or
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already had a business, or they were a transitioning fortune five hundred executive is
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running a middle market you know company for a pe firm, you know,
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try to give them the tool kit then an entrepreneur needs to be successful in
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any size business and then to give them, you know, kind of the
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tools that you use at different size increments to help you then continue that that
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journey. And the problems I see in companies that are call it between ten
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and thirty million a revenue very different than the problems I see when they're one
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hundred to two hundred million in revenue. And so as entrepreneurs pick up steam
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as they learn, there's different tools that I pull out that get applied and
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and and help them continue to scale. And so my goal and objective really
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when I rotated out of the CEO C a couple of years ago, was
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instead of running and impacting one company at a time, I wanted to have
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a positive influence and impact on multiple companies at a time. And so that's
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what I'm doing today. I'm having fun. I work more hours now than
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I did when I was the CEO, and by the way, I make
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more money now than I did when I was a CEO too. So there's
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there's that risk reward quotients now you know better aligned I think is you know,
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as a as an entrepreneur. Again, here's a question for you,
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Adam. When you walk into a company that's maybe losing money, maybe circling
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the drain, and you're not doing this for free, how do you get
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them to write you a check when they're circling the drain. Well, generally,
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I try to start by focusing on companies that have what I call are
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enough clay. There's enough clay on the potter's wheel, so it's a big
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enough company to where I could instantly redirect some spend to create some capacity to
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implement change. But when I'm talking to shareholders or I'm talking to a board
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of directors, for me, it's like, look, this is how I
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work. I'm transparent, I have a track record, I've got billions and
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exits, you know, And this is the methodology I go. I go
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about attacking problems, and you've got to be able to sign up for that,
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you know, in advance, knowing that, yeah, I am a
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turnaround guy. I usually come in when others have failed or things have gone
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south, and it's like I quickly need to arrest you know, I'm a
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pilot. It's like you can pull back on the stick, but momentum keeps
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you going down. For some level until you turn the corner, and so
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you know, it's like the patient has to still have a pulse. Although
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I've done turnarounds in companies where I thought, you know, potentially changed me
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up on the door here, you know, but I managed to resurrect the
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patients. So patients, I think is required. But you know, another
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place where I'm a maverick, I just do not believe in the fact that
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profit and culture are mutually exclusive. I believe that you can have a really
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strong employee culture, you can take care of employees, and you can make
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shareholders a boatload of money. And that's always been my methodology for success,
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and I think it's more popular today. It certainly wasn't if I roll tape
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back twenty five years ago when I was a CEO for the first time.
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But you know, I think we've evolved. You know, if you want
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to get employees, and everybody in the world wants to be a TikTok star
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and a social media influencer. But unless, you know, unless you can
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get people to work, if you want them to come work for you and
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stay, you've got to have a better culture in today's world. And so
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I really focused on strong culture gets an engaged workforce. Engaged workforce takes care
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of clients. Revenue just kind of rangs from the sky. So like,
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what sized business do you specialize in here? So it depends. As a
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CEO, I was kind of a guy who would come in at about two
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hundred million in revenue and take it from there. And I was a buy
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and build guy. So you know, one of my empires was twenty three
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companies bought and put together. Another one was thirty four you know, companies
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bought and put together. As a coach and consultant, I'm finding myself my
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sweet spot is below the lower middle market. So this is this is entrepreneur
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founded, not yet a private equity backed portfolio company, haven't been sold yet
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for the first time, they have aspiration to scale, to get bigger and
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then potentially see their first exit. And so I'd say my specialty today is
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is I have clients as small as a million in revenue. I have clients
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that have you know, four hundred million revenue, but kind of you know,
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call it one to fifty million. Is a sweet spot where I think
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my skills can have dramatic impact in a short period of time. With that
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entrepreneur you know, helping them, helping them get over those hurdles that have
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a stemy demp And part of that goes back to Carrie too and buying fifty
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eight companies, I noticed something And most of the companies that I bought would
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be average twenty to thirty million in revenue. And I noticed that entrepreneurs just
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had this kind of plateau in analyzing it. It's they were to be successful,
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they had to be anal retentive control freaks. And what happened is they
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got bigger, is they ran out of bandwidth. And I needed to teach
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people how to go from being the first chair player in every section of the
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orchestra and to teach them how to be a conductor, how to let go,
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how to hire people, how to run and manage process rather than tax.
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And so when an entrepreneur finds that gear boy, you know, a
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revenue starts to take off. Okay. So one of the things like for
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a company that's not doing as well as it should be, especially when you're
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dealing with an entrepreneur, is the psychological aspects here, the emotional aspects,
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because they need that, they need that external view because they can't, you
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know, the old saying, if you're in a hole, the first thing
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you need to do is stop digging. They're in that hole largely because of
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emotional reasons, whatever they might be. Right, So you've got to be
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part armchair psychologists here as well, don't you. You really do. And
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I'll say even as common for me to encounter in this size entrepreneur. I
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just wrote an article for Forbes about it, and I called it the arrogance
15:54
of success. And there are times, and I mean that in a loving
15:56
way, not in a negative way, but there are times where, hey,
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we beat the odds, you know, we beat that we're one of
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the seven percent that got to a million dollars in revenue. Maybe we're one
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of the four percent of the seven percent who got to ten million in revenue.
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And so we start to think I know everything. You know, I'm
16:15
impervious to making mistakes. It's not going to work good for you. No,
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And I don't need help from from anybody else. And I think one
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of the things that's worked for me is just you know, in life,
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when you have coaches and you have mentors, sometimes they come at it from
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an academic perspective. I've walked the walk I've been in their shoes. I've
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built multiple companies, I've had billion dollar exits, and so I come as
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not not a theorist, but a practitioner lived and walked in their shoes,
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and so sometimes I can break down those artificial defenses that they have and really
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get inside and help them and be helpful to them. And you know,
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my engagements clients do by the way, or a month to month, So
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when when if I, if I don't add value, fire me, you
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know, And I can tell it early on if someone is coach a bull.
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And that's that's the key to getting help is you know, will they
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accept the help and advice? And if they will, I can work with
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that kind of person, all right, And that is really are they teachable?
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And you know, but especially if the business isn't doing well and you're
17:25
the entrepreneur and maybe you're having trouble making payroll, maybe you're having trouble making
17:32
your mortgage payment, it gets really emotional. And then oftentimes the entrepreneur will
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be totally enveloped in fear fear based mindset. So you've got to like shock
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them out of that. Right. You know, there's another group I'll tell
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you by the way, So so what you're mentioning, I see again,
17:56
and I see it again when entrepreneurs get over at the age of fifty and
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so, they were successful early in their careers, they were building a business,
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and they start to become risk averse as they get older. They recognize
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that they've probably got too much asset concentration their whole world's of business. They're
18:15
starting to get older, and so now they stop, you know, they
18:18
stop making good business decisions because they're afraid to monkey with you know, this
18:22
thing called their company, which is the source of their future retirement if they
18:27
monetize it. And now they start making mistakes because they're not taking, you
18:33
know, taking the risks that they should be taking in order to keep the
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business growing and going. So I see it early when there's some struggle,
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but I then see it again as people get to a certain age point.
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That's usually when I started to counsel people. And again I wrote an article
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called the rule of one thirty. And if an entrepreneur takes their age is
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a two digit number and their percent of net worth tied up in their company,
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and you add those twos, you know, two numbers together, if
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it equals more than one thirty. Chances are you're making bad business decisions and
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you have too much risk in something bad happening to that business. Think of
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all the things that are going on in the world today. We've got wars,
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we had pandemics, you know, good lord, there's just so much.
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You know, the economic cycles are are happening much quicker than they used
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to, and it's a volatile world, and so we need to be concerned
19:26
about asset concentration and diversifying risk. And so I see risk everywhere, and
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I see people, you know, kind of it at the start, being
19:36
too nervous, you know, or then at the end getting too conservative,
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right, and both yield the same result, which is struggling business. So
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what can we learn from Elon Musk when it comes to risk taking? Well,
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yeah, so Elon would be my personal hero. Just from this standpoint.
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I call Elon the this generation's version of Howard Hughes and and I think
20:02
what makes Elon unique, whether you like him, love him, made him
20:04
whatever. You know, Hey, here's a guy who has a serial entrepreneur,
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started three businesses and completely different industries and had multi billion dollar businesses come
20:17
out of those visions, and you know, you think of of SpaceX and
20:22
PayPal and and Tesla, and boy, any one of those companies could have
20:29
imploded and gone south. And you know, it was a stock trader.
20:33
I think of Tesla and all the debt they had, and it was kind
20:37
of like Amazon too, you know, and all of the infrastructure investment that
20:41
was required to build this behemoth. Once it turned the corner, then you
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know, they become everybody's you know, everybody has a love fest with the
20:51
potential of the stock. But boy, a ton of risk. But they
20:53
took that risk, and they were rewarded for taking that risk. You know,
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it's the old the thing. It took me ten years to become an
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overnight success. Yeah yeah, it's like people think like Tesla kind of it's
21:10
been around for twelve years now, I think, or maybe fourteen years.
21:14
So, but downright miraculous when you think of the auto industry, where we
21:19
haven't had a new entrant, successful entrant in the auto industry basically since before
21:26
the Great Depression. Yeah yeah, yeah, so you think, yeah,
21:30
he's Preston, you know, Tucker. But he got it right, you
21:33
know, and and he actually made it work. He was a Tucker,
21:40
who you know, but an ace engineer, you know. So it's kind
21:45
of amazing that he could pull this off. And it's not done yet.
21:48
You know, He's got other an AI company going, Neurolink, which just
21:53
think about it. All the millions of disabled people around the world, spinal
21:57
board injuries, everything, and if he can somehow get these people to work
22:03
walk again, I mean that made maybe his greatest achievement. And I think
22:10
AI ultimately so not just from a health perspective, but I think AI in
22:14
general will completely revolutionize the world as we know it. And I think right
22:18
now everybody's playing with it. We're not really sure how to use it or
22:22
how to put it into our businesses. But my wife was just telling me
22:25
yesterday she was a drive through at McDonald's and it wasn't no longer manned by
22:27
a person, It was AI. And the AI was really good at taking
22:32
the order and understand she's Hispanic, understanding her English, and and you know,
22:36
getting her through to the first person she encountered, which was the person
22:40
who gave her the food, you know. And so it's touching, it's
22:44
touching everywhere. So I think Elon is just a serial entrepreneur who knows how
22:48
to think on a level that most of us just can't comprehend or understand.
22:52
And while he's yeah, and while he's you know, there's some volatility around
22:59
him and X and what have you. Again, I go back to he's
23:03
the modern day version of Howard Hughes in my mind. You know, it's
23:07
like just their technology, you know, the wealth of creativity and his success
23:14
and multiple industries is just something that really we we all should aspire to learn
23:19
from, you know, because the world's filled with one hit wonders, Yeah,
23:25
people who had one idea most people at best, or one hit wonders.
23:30
Yeah. And speaking of that, I've been blessed, you know.
23:33
So I'm a I'm a three hit wonder now right on my books up there,
23:40
three or fourth. So hey, you know, when you were mentioning
23:44
Elon being the modern day Howard Us, it reminded me of the story when
23:48
Howard Us went to Las Vegas and he checked into the desert in and they
23:55
gave him the top floor, basically the entire floor, and he's there for
24:00
like a couple of weeks, and they go and send mister Us. You
24:03
know, you have to leave as we got high rollers that want this suite,
24:07
and you don't even gamble and says, you know, let me get
24:14
back to you, give me a little bit, and basically calls up and
24:17
says, how much do you want for the place? Yeah, he buys
24:19
the hotel and I can see Musk doing something like that, you know,
24:26
I really could. Well, you have to think about Twitter as being a
24:30
good modern day equivalent of that or X and so Musk wants to have a
24:34
voice. So what does he do? He buys the largest platform that would
24:37
give him a voice and says I own it, you know, and now
24:41
everyone hates them. Well, yeah, I think that the final chapter is
24:45
not yet written there. So can he make money at this? What's your
24:48
take? I mean, this is a turnaround because that place was circling the
24:53
drain because they were basically a government organ and they weren't there to serve a
24:59
market. They were there to provide a platform for certain narratives, right stare?
25:06
So do I think he can't? Yo? Yo? What? I
25:07
would not bet against him, And I'll tell you why. He has been
25:11
around the drain, as you said, multiple times with multiple companies and managed
25:18
to take that I'll call it the energy a circle in the drain and turn
25:21
it into something that was pretty special. So I would not discount I would
25:26
not take the short, you know, on the over under. I wouldn't
25:30
take the under on anything that Elon does. You know, maybe hyperlink,
25:36
you know, maybe I'd have to think about that one for a bit.
25:38
But yeah, the Vegas loot. But they're including it, you know,
25:45
they're building these tunnels. Now. People are looking at it and saying,
25:48
can't possibly work. But once you add a twelve or sixteen passenger van to
25:53
the mix, and then you can take you know, literally five times more
25:59
people to where they want to go per hour. Yeah, well, of
26:03
a sudden, it starts like looking pretty good. I think in his mind
26:08
most everything he comes up with is visionary and it's going to push the envelope
26:14
of humanity and technology. And so some things that fail won't fail because they
26:18
were necessarily bad ideas. They may fail because the technology wasn't there to support
26:23
it in today's world, or it was ahead of its time, what have
26:26
you. But I would I would never count him out and gently, all
26:32
right, I wouldn't bet against him, all right, So the book tell
26:36
us the name again, it's called Empire Builder the Road to a Billion,
26:41
and essentially it's the tool kit to take you from zero to a billion and
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the stages of growth, the tools that are required, how you adapt,
26:52
you know. And again I'm a CEO. I don't like long meetings.
26:55
And so this is the Cliff's Notes of thirty five years of turnarounds and ze
27:00
experience, and it kind of builds off of the other ones which were more
27:04
singular in their focus. This one is broader and it's really intended for entrepreneurs
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who are on that journey and hoping to add some wisdom regardless of what stage
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of growth they're at, to help them be successful. Okay, well,
27:22
hey, I love it and definitely going to get a copy. I'll have
27:25
you back on after I read it. Talk about some of your anecdotes experiences
27:30
which are the best of luck on the book. And they've got a question
27:33
for Adam myself. The email address is kl at Carrie Lutz dot com.
27:38
Shoot me an email and the links, all the links you need will be
27:42
in the show notes to this interview on Financial Survival Network dot com at a
27:48
bit a pleasure. We will talk to you again real soon. Thank you
27:51
for having me. Thanks for listening to Carrie Letz's Financial Survival Network. Your
27:56
solution to today's trying times or the latest go to Financial Survivalnetwork dot com.
28:03
Financial Survival Network now more than ever,