Latest / Better Together / How to Build a Business That Scales with Jay Breeden
Transcript
- Shawn Sundsvold: Hey everyone and welcome back to Better Together, the podcast that shares the stories, lessons, and practical advice from founders and leaders that can help you improve your business. I'm your host, Sean Sunsvold, along with my partner in business and in life, Kelly Sunsvold. And today we're joined by Jay Breeden, a systems architect who helps founders move from operational chaos to scalable, predictable growth. Now, after nearly a decade of serving as a CEO and COO for lower middle market companies, Jay saw firsthand how many businesses rely on what he calls management by heroics, where growth depends on a few key people constantly putting out fires instead of strong systems doing the heavy lifting. Today, Jay leads Decimal and Sales Rocket, where he helps companies install the financial infrastructure and sales operating systems they need to scale effectively and build toward long-term success. We're excited to talk with Jay about building systems that support real growth, and how founders can move from chaos to clarity. Jay, welcome to the show. I'm really excited for today's conversation. I'm glad you're here. Jay Breeden: Thanks, Sean. Great to be here. ⁓ Really like that intro piece there. yeah, what I've found over the years is that most founders and business owners are really excellent at what they do. They're amazing at their craft, but they've reached the limit of what an individual hustling can accomplish by themselves. they are essentially trapped by their own success. So I'm here to help them build the machine that sets them free. Shawn Sundsvold: Yeah, and I think that's something all founders are really looking for, right? Is what helps them take their idea and run with it and do the amazing thing that they have envisioned in their head, right? So what I wanna do is let's start with your journey, you know, and where you started. You spent nearly a decade as, know, CEO, COO before doing what you're doing today. What kind of led you down that path? Jay Breeden: Well, originally, I was in the corporate consulting world, primarily working on data and analytics projects for Fortune 500 companies. I got to work with a lot of really smart people doing some really, really interesting work. And I found was that these really large organizations, we are putting in systems, processes, technology that are really only moving the needle a couple of percent in either direction. after ⁓ while, ⁓ wanted to be in organizations where I could see a lot more kind of outsized impact on the work that I was doing ⁓ and work that I was to help lead with ⁓ the teams I was working with. And so I had the opportunity back in 2019 to step into an online learning software business and really take the reins as the COO. And the first year or so that I was involved in that business, there was a lot of organizational cleanup. Some of it was related to people. Some of it was working through the three or four different communications tools that we have, the six different places that people were. storing all of their information and files, two different billing systems that we had, and really creating a unified back office for the business so that we could then step into a place where we were focusing on growth of the business and not just putting out fires every day. And that kind of became a ⁓ resonating theme and something that I see regularly with the business owners that I work with. And it was really good experience to work with a team of about 20 people there. We ended up growing to about 25 people or so before we got acquired by a much larger holding company, a publicly traded holding company. And I got to be part of selling a business. And that was something that you would never really get the opportunity to do in corporate consulting unless... you know, that business was going through an IPO or they were involved in some other really large transaction, but I would have had such a small part in that. And in this business, ⁓ it was one of the direct, people responsible for communicating with the company that was acquiring us and through the whole diligence process and making sure that we had everything really well documented ⁓ and all of the information back to that acquiring company. Kelly Sundsvold: Yeah, that sounds really interesting. ⁓ So in those leadership roles, what are some of the patterns you kept seeing inside of companies that just made you realize that like something just needs to change? Jay Breeden: You know, a lot of it comes down to the people. And I think that's one of my particular superpowers is seeing where people fit really well within the organization. And maybe they're in the right role, but with a little bit more support and development, they could step into an even bigger role. Or maybe they're in the right company, but in the wrong seat. you've got a person who could be a really, really talented account manager, for example, but they're in a sales role ⁓ they're not being successful in that role because that's just not what fits with their natural talents or the things that get them out of bed every morning. And if you can re-architect that organization and sometimes you can and sometimes you can't, but if there's an opportunity to find a great person, a great role within that company, that's always my first preference. And then the other thing that I see is that there's a of times, especially in small businesses, there are a lot of unspoken ⁓ expectations ⁓ are in the founder, the CEO, whoever's kind of the head of that organization, those expectations live in that person's head. And they that they get communicated and they're sure that they've communicated them. Kelly Sundsvold: Hmm. Jay Breeden: seven or eight or nine times, but the team has really only heard them out loud once or twice. so going through the process ⁓ making sure that there's really clear communication, that the things that get documented, need get documented, actually get documented, and then we revisit those things on a very regular cadence so that all of that expectation that isn't being met and probably is turning into Shawn Sundsvold: Yeah. Kelly Sundsvold: Mm-hmm. Jay Breeden: that business owner or business leader actually gets communicated and translated to the team in a way that they understand so that they can start meeting and being held accountable to those expectations. Shawn Sundsvold: Yeah, I think there's so much truth to that. When you're talking about leaders, I wanna say feeling like they've communicated something so well. We have a leadership client of ours that one of the things he has said over and over again is when you're doing something, you have to repeat it until you're blue in the face. and then you keep repeating it, right? And sometimes that might mean seven, eight, 10 times, you're repeating the same thing over and over and over, right? And my guess is a lot of leaders get frustrated with that. And then they feel like they have to be the superhero to come and fix it, right? Which kind of ties into something we talked about at the beginning. And I know it's a phrase that you have sort of coined, right? Is management by heroics, right? They want to be the superhero. So let's talk about that a little bit. And what does that look like? inside of a business and why do so many founders and businesses fall into that trap? What's going on? Jay Breeden: You know, a lot of founders and business owners in that lower middle market space, they got from or one million up to three or four or five million, almost purely based on grit, intuition, hustle. And are the exact traits that start breaking when you move beyond that five million dollar a year mark. and you're pushing towards 10 million because everything falls on your shoulder because you've been the hero of the story up to that point. And the hero has a great role to play in every great narrative. But when you start to look at, you know, some of the great teams and some of the great organizations that have been built over the years, there's never one person that is the true hero of that story. Right. I'm a big sports guy. Michael Jordan had Scottie Pippen, you know, there's all, there's a lot of stories like that where the or third person, Dennis Rodman was a big part of that too. Right. Like you don't have all three of those guys on that team and the Bulls probably aren't the dynasty that they were in the nineties. If you just have Michael Jordan, sure. They would have been a great team. They might've won a championship. Shawn Sundsvold: Mm-hmm. Yeah. Jay Breeden: but they weren't gonna win four or five or six of them over the course of that time. So getting the founders and business owners who are used to as central point, another model that you can think about is the hub and spoke, right? If the leader of business has to be the center of every single thing that happens in that business, whether... from a sales perspective, an operations perspective, a financial perspective, if they're the one who's closing and involved in every single big deal, and they're the one who's involved in saving every customer relationship, and they're the one who has to approve every single expenditure that goes through that organization, at some point, there's just not enough time or hours in the day, unless they're willing to put in 80 or 90 or 100 hours, and that's just no way to Shawn Sundsvold: Yeah. Kelly Sundsvold: Yeah, for sure. For sure. So you lead, you now lead Decimal and Sales Rocket. are your two companies, right? Jay Breeden: Yes. Kelly Sundsvold: Yeah, so helping companies build better systems, but I'm curious about your own journey with that. How how we talk to a lot of people who have have scaled their companies and it's always all about systems. So how has your journey been on that and what was it like building and growing these businesses for yourself? Jay Breeden: Yeah, it's a great question. The systems part of it is a work in progress, of course, right, as all great journeys are. You know, I got introduced to ⁓ handful of ⁓ frameworks over the years. ⁓ first one that really clicked for me was the traction and EOS framework. And I'm sure you have a number of clients that you work with ⁓ run that system. That for me was the first time that I'd really and understood something that kind of codified what it meant to build a system inside of especially a small business. When you're ⁓ a hundred million dollar a year or larger business, you've got people to do every single function and they can be really specialized and they can build out these 30 page SOPs because they've got time to do that and the time to run those SOPs. When you're a three or five person leadership team and you're trying to manage a five to $10 million a year business, you often don't have that luxury. So the concepts of working on the business rather than in the business and taking that time once a quarter to sit down and go through planning session for an entire day and map out where you're going to be 10 years from now, five years from now, three years from now, one year from now, 90 days. And starts to get into some of the ⁓ of how we are as human beings. And if you try to lay out a three-year plan and then go execute on that tomorrow, it's really, really challenging. But if you can keep breaking that down into smaller and smaller chunks, Shawn Sundsvold: Uh-huh. Jay Breeden: and eventually get to a place where you know the three things that you've got to do in the next 90 days. And that's what you're committed to. And then you're building the systems to support that. So for example, if one of your things that you needed to do in the next 90 days was to build an indirect ⁓ referral ⁓ then of the systems that you might build is ⁓ tracking how many high value conversations you have in a given week. So this is one of the things that I'm doing right now for myself. So it's very, very close to home, but I'm tracking at least four high value conversations every week. So that might be a Zoom meeting, it might be a coffee, it might be a happy hour, but connecting with people who are serving businesses that are in the same size and industry and profile that I'm working with and understanding how we can work together collaboratively with, you know, in a referral relationship, whatever that might look like, but just getting out there and having those conversations. And so it's breaking it down, I think, at its core to ⁓ digestible and then working to put something systematically in place so that you don't have to wake up in the morning and decide, I going to do that thing or not today, you already have the system in place that you're going to go and execute on it. Kelly Sundsvold: Mm-hmm. Shawn Sundsvold: Yeah, I think there's something, you know, when you're talking about, when you talk about like waking up and already knowing what you're going to do, right? That's, that's a, that's one step off the decision fatigue tree, right? Like a lot of times as business owners, we get up and we're like, ⁓ what do I need to do today? Jay Breeden: career. Shawn Sundsvold: Right. And then we have to go through that process of, okay, is this more important? Is that more important? But with EOS, we're familiar with EOS, we actually use it. You know, you're able to kind of set those things up ahead of time. Right. So that way, you know what your goals are. You know, the things that you have to accomplish before, you know, the next quarter even starts. Right. You know, the, ⁓ projects that need to get done so the business can move forward. ⁓ I love that as a kind of a, you know, the way you presented that and how you're using it for, for yourself going forward. You know, thinking about growing your own businesses and about that journey of how do I take all this chaos and turn it into something, ⁓ right? there a moment in your own journey where, you know, it felt chaotic, unsustainable, and it really reinforced the importance of building systems for yourself? Jay Breeden: Yeah, it in that journey of when we were getting acquired by ⁓ the that bought our ⁓ software It was lot ⁓ of back forth. It was a lot of trying to keep the business running at the same as we're going through the diligence process. just to throw one more thing in there, ⁓ wife was pregnant with our first child. And so ⁓ had just a few things going on. And that was really the moment in time where I had to sit down ⁓ not just be thinking about the systems that I needed to run that business and to make sure that everything continued to stay on track and we didn't slip while we were in that. acquisition process, but also personally to start building out systems for me to make sure that I was present at home and for Amanda and all of the things that I needed and wanted to be doing at the same time. And without the right systems and structure in place, that was just never going to be possible. Shawn Sundsvold: Yeah, I think kids are one of those things that makes you to be that much more efficient, right, in your life because you want that time at home and you know, want to make sure that you can be there for them, right? Kelly Sundsvold: Yeah, yeah, you know, and there's never, there's never a convenient time to have a baby, right? ⁓ Jay Breeden: there was a convenient time, you'd probably never have one, right? Like you'd be always be waiting for the perfect moment. Kelly Sundsvold: Right, right, I know. So when you step into a business that's operating in that kind of chaos that you described, what's usually the first systems or structures that you put in place that you're like, hey guys, this isn't working. Let's do this and let's start you off at the foundation. Shawn Sundsvold: Yeah. Yeah. Jay Breeden: Yeah, I know this is going to sound really, really simple and probably too simplistic, but it's amazing how many businesses I walk into that don't have a regular meeting cadence. They might have ⁓ a all meeting that they put on the schedule two days before it's time to that ⁓ meeting or when a fire ⁓ or when there's something, some other reason to do it. But putting a regular leadership then departmental level meeting in place is, and making that people like stick to have the same meeting at the same time, same agenda, run that every single week, and then you can start filling in and it usually takes a good. three to six months for people to get comfortable with that cadence and for those meetings to start being really, really effective. Because the other pieces of that are, all right, so what's the agenda that we're going to cover on a weekly basis? And what matters to the sales team might not matter as much to the operations team, might be different than the finance team or the leadership team, certainly. So you've got to work through the process of What are the three to five metrics or KPIs that each of those teams really cares about and are leading indicators, canary in the coal mine type of indicators that are going to give people on those teams the information that they need to make better decisions. And then getting people really comfortable with in those meetings, having conversations that are uncomfortable not... letting the little things stack up to big things because you're tackling those on a weekly basis. so that, you know, it ends up being a combination of the weekly meeting cadence plus you start building out an organizational scorecard with some metrics in it. And between those two things, usually start to unravel a lot of the things that aren't working. just having those meetings isn't the solve for every little problem or every little issue within your organization. those, in way is productive and constructive and focused on those does start to pull those issues out. into the organization so that you can start delegating them to the people, whoever is the person in the organization to take responsibility and run with that, whether it's a ⁓ new system or it's putting together a simple spreadsheet for tracking something ⁓ or a process that everybody's going to follow now for, you know, scheduling appointments or scheduling sales calls or whatever that might Shawn Sundsvold: Yeah. And I think, you know, again, kind of tying it back to the EOS side of things and how you build those things out. Those conversations take time for everybody to get comfortable with. And I know you kind of mentioned that the three to six months, but I want to spend a little extra moment on that because those first couple of months, everybody's afraid to say something, right? Like, yeah, they don't want to be one that causes the problem. They don't want to, or the other side of it is they need their issue fixed now. Right. Jay Breeden: It's gritty. It's crunchy. Shawn Sundsvold: And so it's part of that is as leadership trying to figure out what is the biggest issue. And for like a CEO, ⁓ had an author on a couple of weeks ago. And one the things he said was the job of the CEO is to ⁓ be person who can figure out what can't be solved. Right? so part of that is, you know, for the CEO in those meetings is understanding what is the problem that he has to solve right now to keep things moving and how do you get people talking about it? Jay Breeden: Yeah, and I would take that just a little bit further if I can. I think ⁓ part of the job of the CEO is doing exactly that, understanding what can't be solved, but really digging down into what is the root of problem. And generally, ⁓ you're why three or four or five times and. It becomes a little bit like my four year old right now, but you just keep drilling down into, okay, this thing is happening, why is that happening? And then, okay, we get to the next layer and then the next layer. And then when you finally get to like, what is it that's causing that issue? And is it an interpersonal issue? Is it a structural issue? Is it a technology issue? And then you as the CEO, the other part of your job is to... remove any of those roadblocks or barriers for your team to be able to go and solve that problem. So maybe that is giving them the authority to make a decision. Maybe that is giving them the ability to go make a hire to in and work in that particular space. Maybe that is making another organizational change or moving people around within the team. There's a lot of different ways that you can solve that as a CEO, but being the chief remover of roadblocks is a big part of that job title. Kelly Sundsvold: So shifting to kind of the exit side of things, which is like the final stages ⁓ of entrepreneurs, hopefully they grow the business and there's exit somewhere. So work with founders who are thinking long-term about the exit. What are some things that the business owners should be doing today? that will make their company even more valuable later on down the road whenever they're ready to sell or step away from it. Jay Breeden: think one of the most important things that a business owner can do is start to think about their business from a buyer's perspective. yes, there are important things that you as the owner, founder, leader of that business need to continue to do on a day-to-day basis. But if you take the perspective from the other side of that coin about somebody who's going to come in buy your business and then operate the business that you've built, it puts you in a little bit different mindset and makes you think about things a little bit differently. And what I mean by that is that there's some things that you as you're building a business probably aren't paying a whole lot of attention to. Like how much concentration do I have in any one of my customers? as business owner are thrilled to get like just to have customers, first of all. And then you build these great relationships and you keep expanding them and growing them and you get five years down the road and all of a sudden you've got one customer that's amazing and you love them and you take them to sporting events and you send them a really nice Christmas gift and they're responsible for 60 % of your revenue. And somebody on the buy side is going to look at that and go too much customer concentration. If we lose that customer, Shawn Sundsvold: Right. Yeah. Jay Breeden: because the owner steps out of the business, now we just lost 60 % of the revenue that we thought we were gonna have in that business. So that's just one example, but to kind ⁓ bring that ⁓ to a little bit higher level, it's really about the dependency ⁓ the owner of that business and how dependent that business is on that person being in that seat. And so the more that you can do now as a business owner to get your back office in order so that that can run without you as the business owner, get your sales team to a place where they are regularly predictably producing revenue without your everyday involvement. Understand what your ⁓ concentration is, how much recurring revenue you do or don't have. These are all of the things that we're taking a look at from a structural business perspective to understand whether that business is going to be attractive to somebody down the road for eventual exit. And any of those things that I just mentioned isn't going to be a deal killer. But if you ⁓ about, you know, your baseline value of the business is $5 million. ⁓ If you've got every single one of those things lined up and you as the business owner can step away for 60 days and go to the Caribbean and sit on an island and the business still runs by itself, that business now might be worth six or seven million. And if you can't do that and you have to be in the office every single day from 8 a.m. to 6 p.m., that $5 million business might now only be worth three or three and a half. Shawn Sundsvold: Yeah, yeah, I'm curious, you you kind of mentioned the different revenue points there. At what revenue point is that really a possibility for a business owner? Right? Because I've worked with home services companies and I've seen those different levels and I've worked with a couple others and seen it is that the founder can sort of start stepping away two weeks, four weeks, six weeks at a time and things still function. ⁓ your experience, have you seen a certain revenue level where that seems to make it more feasible than others ⁓ businesses? Jay Breeden: Yeah, when you start approaching that $5 million a year point and threshold, that's where you generally are getting to a place where you've got enough cash flow to start replacing your time. And what I mean by that is you're hiring somebody to come in and take on a lot of the responsibilities that you previously were doing. so that you can continue to be involved in the growth of that business and go from five million to 10 million, or you can start to step away and yeah, it's going to away or take some investment out of the cashflow that that business is producing, but you're really buying freedom if you're doing it right and you're buying the ability for you to transfer. the knowledge and capabilities that you have as a business owner to somebody who can help you to manage that business back to our, know, bring the right people in, put them in a position to succeed and give them all of the tools and support that you possibly can to make that happen. Kelly Sundsvold: leave our listeners a little bit of a nugget. What's one system every growing business should implement earlier than they think? Jay Breeden: one system that they should implement sooner than they think. I think it's ⁓ a quarterly offsite and stepping away and of the business. And I know solo preneurs who do this. They're nice business. They're supporting themselves, supporting their family. And they will schedule ⁓ a one, two, heard recently of somebody who schedules a whole week away all by themselves. And they, you know. Airbnb a place in the mountains or at the beach you pick your poison and they will go and Step out of their business turn off email turn off you know all of the all of the distractions and sit down and plan out What they are going to do in their business how they're going to get it done break it down into the bite-size chunks that we talked about and put the structure in place for them to be able to go and execute on their plans for the rest of that quarter year, whatever that might be. the business owners that I see that don't do that and don't take the time away get stuck in that firefighting mode. And they're constantly just battling to get out of a hole and they often don't see light at the end of the tunnel. So I think it's really important at really whatever size business you are to take that time for you, to take that time for your team and go and get really, really clear about what you want to do and how you want Shawn Sundsvold: Yeah, yeah, I think there's a huge nugget there and the idea of when you as the leader have a vision of where the business is going and you have a plan, it's a whole lot easier to help your team execute on that plan to get everybody on the same page and to get everybody at the same result, right? So awesome. Well, Jay, thanks so much for being here. How can people get in touch with you if you want to work with you or learn more about what you do? Jay Breeden: I think the best way is just to reach out to me on LinkedIn. It's ⁓ J-A-Y-B-R-E-E-D-E-N is ⁓ link at the end of the URL there. And they can find me there and find out more about my experience and the work I'm involved in today. Shawn Sundsvold: Jay thanks so much for being here great conversation I'd like to do it again sometime soon and I appreciate your time today. Jay Breeden: Sounds good. Thank you both.