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How to Scale Without Losing Your Mind
Yoni Kozminski is the Founder and CEO of Escala, an affordable, boutique process improvement and digital transformation consulting firm for Amazon and e-commerce businesses. Yoni is also the Founder and CEO of MultiplyMii, a company that helps businesses around the world reduce operating costs and increase profitability and output potential.
In addition to this, Yoni is the host of Successful Sales, a podcast where entrepreneurs share their inspirational stories, hard-won wisdom, and top tips for success.
Here’s a glimpse of what you’ll learn:
- Yoni Kozminski talks about his background in digital marketing
- What is the difference between growing and scaling your business?
- How Yoni’s consulting company, Escala, helps entrepreneurs scale effectively
- The ins and outs of Escala’s services and offerings
- Yoni shares a real-life story of how Escala helped a client double their revenue
- Why entrepreneurship can often feel like a hamster wheel—and how to determine whether to sell or scale your business
- The importance of having visionaries, integrators, and implementers in your business
- How to get in touch with Yoni and start working with Escala today
In this episode…
Are you struggling to grow your profits as you expand your business? If so, Yoni Kozminski has some advice for you: start scaling.
Your business needs to both grow and scale in order to boom—but there is an art to effective expansion. According to Yoni, if you focus only on expanding your business’ operations without increasing your profit margin and bottom line, you will be working twice as hard but have little to show for your efforts. That’s why scaling is so important: it helps you maximize efficiency and boost profits, all while keeping costs low. So, how can you start applying effective scaling strategies to your business today?
In this episode of the Quiet Light Podcast, Joe Valley sits down with Yoni Kozminski, the Founder and CEO of Escala, to talk about the importance of strategically scaling your business. Listen in as Yoni reveals the key differences between growing and scaling a business, the various ways Escala helps clients scale intentionally and profitably, and how you can start implementing some of Yoni’s tried-and-true scaling tips right now. Stay tuned!
Resources Mentioned in this episode
- Yoni Kozminski on LinkedIn
- Yoni’s email address: [email protected]
- Successful Scales Podcast
- Quiet Light
- The Quiet Light Podcast email: [email protected]
- Joe Valley
- Mark Daoust
- Preorder The EXITpreneur’s Playbook: How to Sell Your Online Business for Top Dollar by Reverse Engineering Your Pathway to Success by Joe Valley
- “How to Save 20-60% on Your Supplement COGS” with Sean Ross
- TWS Nutrition
- Gino Wickman on LinkedIn
- Entrepreneurial Operating System (EOS)
- Traction: Get a Grip on Your Business by Gino Wickman
- Entrepreneurial Leap: Do You Have What it Takes to Become an Entrepreneur? by Gino Wickman
Sponsor for this episode…
This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.
There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.
If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.
Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!
What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.
Hi, folks, it’s the c where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.
Joe Valley 0:29
Hey folks, Joe Valley here one of the hosts of the Quiet Light Podcast Today’s episode is indeed brought to you by Quiet Light, a small to middle market entrepreneur led m&a firm focused on online businesses only. everyone on the team has built, bought or sold their own online business and now act as advisors to other entrepreneurs seeking that eventual exit. Now before I introduce our guest, today, I’d like to give a shout out to Sean Ross at TWS Nutrition. I recorded a podcast just a few weeks ago with Sean, the title was How to Save 20-60% On Your Supplement COGS, and a number of listeners have already reached out letting me know what Sean has done for improving their COGS and bottom line. Check out TWS Nutrition to learn more and reduce your COGS on human supplements and consumables. And now on to our show. Today’s guest is Yoni Kozminski, he’s the Founder at Escala. They’re a firm for companies that are seriously considering scaling their business to new heights. You guys have heard me say it. Often the worst thing you can do is to promote yourself to your own level of incompetence. Well, Escala can help you overcome your own incompetencies, and grow your business as pain free as possible. Whether you are an e commerce company looking to expand your operations or an Amazon company. So our seller, hoping to increase sales. Escala has the expertise and experience to help you make great things happen. their expertise is gathered from consulting giants such as Ernst and Young, Accenture and as well as other tier one consultants that built a maturity framework. And that’s the key here, maturity framework, and an end to end system for process improvements and achieving true scale again, as pain free as possible. Yoni Welcome to the Quiet Light Podcast.
Yoni Kozminski 2:20
Joe, it’s an absolute pleasure to be here. I’ve got to say just listening to you articulate everything. It comes out so crisply, it’s not just the mic. I mean, I love listening to episodes. And it’s a real pleasure to be here.
Joe Valley 2:32
I don’t think that was articulate at all. But thank you very much.
Yoni Kozminski 2:36
Well, you definitely have a way with words, mate. So it’s, it’s great to be here sitting with you and sitting down having a chat. Cool, I
Joe Valley 2:42
appreciate it. Well, I said I talked to all about Escala there. But let’s talk about you first. Because you know, we’ve got a, you know, a history of only having people on that have sort of been there and done that I looked at your LinkedIn profile. And it was so packed with information that I I could have read about it, but it would have taken another four minutes. So you’ve you’ve been there done that and most of these situations, you’ve scaled your own online business and did some pretty amazing things. Can you just touch on your history a little bit before we go into what Escala does? For sure.
Yoni Kozminski 3:15
Yeah, I know the drill here, it’s definitely gonna be easy, because I’ve done this once or twice before. But also, you know, I got to build a little bit of credibility. I know we know each other. So to give you the short of it, I spent about a decade in creative advertising, digital marketing. So you’re picking up I am originally from Australia, hopefully the accent is still kind of there. But I moved to LA and worked with the creative ad agency in LA for three years. So just to give you kind of perspective, I was working in small to medium sized agencies. So I was the 10th employee, we grew to about 14, Australia. I was the 15th. In LA we grew to about the same. And I was working with the likes of Sony, MasterCard, Medtronic and Mercedes Benz. The list goes on. It was all enterprise clients coming from the perspective of what is the SME space? So I’ve seen what scale looks like and I’ve understood what it is to work in the kind of constructive, what is a very fast paced environment in what feels like a startup when you talk about agency land. And it was only after those experiences did I walk into the world of Amazon, you know, I was pretty adept at doing everything from Facebook media buying, I spent, you know, 10s of millions of dollars throughout my career on campaigns.
Joe Valley 4:31
In Australia, we talked about that briefly in terms of the Facebook advertising, like you were spending a ton of dough every single month on that, right.
Yoni Kozminski 4:38
Yeah, so I actually was part of the team that launched Mercedes Benz Australia and New Zealand’s Facebook pages and Instagram, YouTube, Pinterest, all of it. So there was none of that I was the kind of the era that I grew up in. And my favorite time of the year Joe was when it would come to Grand Prix season and you’d have Facebook trying to bring you and then you’d have Mercedes Benz and each them have a better lounge than the next one. And you know, we were spending, I think at the time it would have been, this is back in about 2010 or 11. And we’re spending probably $30,000 a month, which today seems like nothing. But yeah, if you look at 10 years ago, I mean, that was huge. We were the largest media buys, I think inside of Facebook for a period of time in Australia. And, you know, there were campaigns that we did when we launched a brand into the US that know how I don’t know how much I can or can’t share. But a particular brand that I launched, in the US, we spent, like, over half a million dollars in a month long campaign just on Facebook media alone. I mean, yeah, it’s crazy. It was hard. It was hard to spend that much money if I’m honest. But we achieve the results that we were hoping for in that in that campaign. But it was a Yeah, it was a pretty crazy time, like we had millions of dollars to invest. And we had to, you know, be the strategic partners in giving these these brands the advice on how do you actually launch into an entirely new market, when you don’t have a lot of the resources and assets that you have an existing buying audience, you know, it was a multi billion dollar company, but it was the first time that they were stepping into a US market. So it’s a, it’s an interesting equation, an interesting problem to solve.
Joe Valley 6:12
You know, I think you’re so much more mature than I was, at your age, I was with a company we scaled from, I think I was the 34th employee. And by the time I left, which was just under three years later, we had over 1000 employees. Wow, it was magical, and painful. all at the same time. I remember, you know, there was a time when I’m going into the company and couldn’t imagine working anywhere else, because it had such entrepreneurial drive everybody that I would, I would try to be the first one in the last lead. And then eventually, I felt like a worker ain’t walking in there just marching in marching out marching and marching out, because I among many other people had truly promoted themselves to their own level of competence. And things just loved that apart. You know, we, the company in 1996, I think did know, I started, yeah, 96 did 34 million in total revenue. And the profit was around 5 million. In 97. It did over 100 million, and lost like $3 million. Big oops. So it didn’t scale properly. They, they they just pushed like crazy, but didn’t have the right people in the right place and the right systems and processes. Which brings me to Escala and what you do. How did you transition though, from this, you know, life before into launching Escala and then tell us about the operations and what you do for folks like the company I used to work for and these big e commerce companies that we work with now?
Yoni Kozminski 7:53
Yeah, absolutely. Well, I mean, you you touched on a point that I love to kind of draw insights from and that’s growth versus scale. You know, it’s a very, it’s not easy to grow. But you can throw money in people and personnel and whatever it is that a problem and grow the business. But if it’s not impacting your actual bottom line in the business, long term, growth is expensive. And we all know that going in, but there has to be an end game, there has to be an objective to actually hit true scale here. So yeah, I mean, we see a difference
Joe Valley 8:23
between growth and scale that you define.
Yoni Kozminski 8:25
Yeah, so I would look at growth is actually, you know, when we talk about, let’s talk about Amazon businesses, for example. So everyone sits here, and they’re talking about, you know, I’ve gone from 5 million to 10 million or 10 million to 15 million. And, and I missed, I forgotten that a guy who you call that before, but I definitely want to have a chat with him around the sub, you know, the reducing your COGS for supplements. But that’s a prime example of how you look at scale and growing your ability to actually scale the business versus just grow it. So I think, you know, you don’t really care. At the end of the day, if I asked you great, you have a business that’s doing 50 million, it’s now doing 100 million, you make no more profit, you’ve got, you know, especially for what you said about not really wanting to manage people and growing to your level of incompetence, you know, if it’s double the amount of people who amount of problems and you’re not really generating any more revenue, and you’re working harder is that that’s growth scale, is doing that where you’re actually profitable. And hopefully, you’re living the life because you’ve built the right systems in place to enable the lifestyle that you want to lead.
Joe Valley 9:30
There’s a big difference too, right? Just by way of example, last time you and I chatted, Quiet Light is growing like crazy. We’re bringing on more advisors more to the point where, you know, I have to think about a chart, the beautiful thing that we have here is, you know, entrepreneurs, right, it’s led by entrepreneurs, it’s all entrepreneurs. So they’ve all you know, have their skill set and now have built bought sold their own businesses as mentioned and then help others but and they don’t have to be managed all that much, but there’s some level of scale too, as well. Our intention this year, folks is to fortify our business, right? That’s our word. Mine is to be intentional about everything I do. So we’re going to talk to you and his team about, you know, what, what Escala can do for us. And hence, he’s, he’s here with us today. We’ve recently sold a business for someone closed in December of 2020, who took the business to about 20 million a year in revenue, but felt he didn’t have the skill set to take it to 100. Right. But he knew that the business could go to 100, based upon the niche and the size of it. Do you work that seems like the type of folks you’re focused on so that when they’re scaling, they’re doing it in the right direction? That they’re profitable, and they’re happy, right? We all started became entrepreneurs for the freedom and flexibility of not working for somebody else and to be happy with what we do and excited go to work every day. Problem with huge growth is it’s a pain in the butt. And there’s a lot of HR things that have to happen, or just moving parts do you? Do you break it all down so that their system and processes and tell us how it works? I’ll stop? Yeah, go? No, no, absolutely. So
Yoni Kozminski 11:08
it’s all constructed stuff. So let me let me finish off on building my credibility and just tell you no finish off by saying that
Joe Valley 11:15
it’s the accents fine, you’re cool.
Yoni Kozminski 11:19
So So the last stretch I took before starting Escala and doing what we do today was in the Amazon space. So I actually took an Amazon business from two to 5 million in a 12 month period that was recently acquired by one of the big roll ups. And in that experience, what I understood was that there is a very different experience. So I built an agency. I mean, I you know, how I would compare it is what I did for that business is effectively what aggregators would look to do inside of their businesses is building an agency to support rapid growth and empower their teams to actually make good decisions on on how to build out the systems that operate the business in a way that is efficient. And that, you know, enables growth, and in that case, sales. So that was, that was kind of the the lightbulb moment for me coming from an agency background of 10 years, you know, being part of building companies understood what the DNA of all the people looked like. And I understood what the processes looked like, I had a very clear understanding, but I brought in an incredible founding team with me. And as a result, Escala was born. So to kind of tell you a bit about the business before I jump into how we help Escala, like you said at the start is a company built on the back of we effectively took a team so everyone we work with right now is out of the Philippines. And this is how it’s a little bit of the secret sauce to one of the challenges operating in this space is that people can’t afford to pay a why Accenture, BCG and the likes of you know, millions of dollars when the company’s only generating that and revenue so that the balance was off there for me. And it’s not about profiteering it’s about how do we make positive impact that people look to scale, sell or live a better life, whatever kind of, you know, freedom looks like to them, whether it’s financial freedom, and exit, like what you guys specialize in, or scale at a level they can enjoy. So that was really kind of the building blocks, we took, effectively a semi ready made team of Bill Payne based consultants out of a why. And what we did was we took the high level process methodology that exists inside of the why and McKinsey and some of the, you know, more tier one, consulting groups, and then we sort of boiled it down and we brought it to a level where we don’t need I mean, it’s funny I’ve been saying all along, we don’t really use McKinsey seven SS is too high level, I found out last week that we actually do sometimes leverage that. But you know, we’re really making it digestible for people at this level to understand, you know, I know we spoke about the great man, Gino Wickman. Last time, we caught up and, you know, taking learnings from Traction and EOS and really baking it together so that it’s an easy to follow bespoke process where we look at our, like you just said at the start our maturity framework and our methodology. So our maturity framework, we look at systems and our definition of a system is we break down people process and technology. And so for business to effectively scale you have to leverage each of those in the right play. Having a piece of technology A lot of people think is the answer to everything you know, I’ll just, I’ll get that new tool. Off we go. We’re away here. I’ve got my Helium 10. I’ve got subarna I’ve got you know, I’ve got whatever tools I’ve got, I’ve got so stacked. And what ends up happening is the right people in the business don’t understand how they actually need to interact with that tool. Things get lost. There’s no accountability or responsibility attached to who’s delivering that. And before you know it, you’ve invested all this money in time and your business actually isn’t what you thought it would be. So when you talk about growth, that’s one of the Surefire ways without proper planning that you find growth and not scale.
Joe Valley 14:58
Your name and all the The touch points there, you know, we just sign up for one of these project, you know, SaaS businesses and you get you get to learn from, you just don’t sign up and all your problems are solved, you could invest a lot of time in solving that, or and learning it as well. So your typical client, you just mentioned all sort of ecommerce, Amazon product related businesses, who is your typical client in both niche and size that you work with mostly?
Yoni Kozminski 15:30
So for Escala specifically, we’ve worked to date with businesses that range it’s a bit of a big range, but we’ve worked with sellers as small as a million dollars, and at the upper end, about 15 $16 million would be that their annual revenue, so 50 to 60, or 15, to 16, which is that 50 to 50 to 60 million. Okay. So some of the some of the, you know, not the largest, but some of the largest plays, I would say, in the space before you start working with aggregators, which were, you know, we’re starting to have some discussions with a lot of these guys, too.
Joe Valley 16:02
Okay. So before we scare away the audience, one of the things that I read on the Escala page was that it’s, you know, cost effective as well, it’s not Ernst and Young prices. And that’s because you’re taking former Ernst and Young type people, they’re trained by them, but they happen to live in the Philippines, you’re, you’re you’re utilizing their skill set, but at the Philippine pay scale, and then passing that on to your clients.
Yoni Kozminski 16:27
Exactly. Right. So a typical, I mean, if you want me to share our typical engagements will range from, you know, at the low end, probably five or $6,000. And at the high end, and I’ll kind of talk to you about what that looks like more but can be north of 50,000 really depends on how big the business operation is, the level of support needed on our part, but everything’s custom built in bespoke. So if we’re only going to touch a section of the business, or a specific area where the company is weak, then we can focus our attention on that it’s the consulting practice. So our whole position is, how do we support?
Joe Valley 17:02
Yeah, can you give me or us an example of, you know, a client you work with and what you did for?
Yoni Kozminski 17:07
For sure. So we’ve worked with, you know, probably about 30 to 40 clients in the last year now, specifically inside of Escala, where we come in, and we look at, like, like I said, it’s the maturity, we look at where they are in their maturity journey, as a business. And so the clients that we’re typically working with, range from everything in their supplement space, to, to the toy, you know, children’s toys, you know, pet products, it really ranges at typical clients, if I had to define them, it’s, it’s Amazon sellers and ecommerce businesses, it’s what people that are really looking to improve and enhance their online businesses is, is that typical, we have a number of SaaS companies we also work with. And I would say, though, when I talk about our sweet spot, our niche, it’s everything that touches the e commerce space, and also things that are adjacent. So because we have such good insights into businesses that are somewhat related, that’s where we’re gonna focus, you know, we talk a lot about niching down and being the expert in one thing, that’s where we sit,
Joe Valley 18:16
okay, drill down into an exact client that you worked with, what you did for them don’t name names, of course, what you did for them and, and how it impacted their business, or their process in terms of scaling
Yoni Kozminski 18:28
the show. So I’ll talk about one of our earlier clients, because we’re coming to the end of, you know, what’s been a pretty long engagements been about nine months. And, you know, the way we operate is that we have two dedicated consultants set on the project. So our team right now is somewhere between 15 and 20. And the consulting team and will probably grow to 30. And so we commit a lot of resource to the delivery. And that’s why things can, you know, start to cost a lot of money, like these guys would be one of the more expensive deliveries we’ve done. And that’s because when we walked into their business, they were to give you perspective, they were doing about half a million dollars a month in sales, okay. And they had elements in place, like, you know, when you ask the question here, what are your si peas look like? What, you know, what’s your org chart look like? What what’s actually happening, the business here, they had a roundabout way, I know, running a good operation, but there’s a huge difference between good and great. And being able to actually have a scalable or saleable business, to me, says that you need to not have any specific linchpin in the business where if they weren’t to turn up to work, the company would fall down.
Joe Valley 19:37
Yeah, just out of curiosity for you on how many people were working at the company when it was just a half million a month in revenue. So they were
Yoni Kozminski 19:46
they were a pretty lean team. If memory serves me correctly, we’re probably looking at about six to eight people when they were doing that, but they were they were a reseller. So you know, different model. They’re not having to handle Um, production sourcing. So there were departments that they didn’t have, but there were other departments they did have. And also,
Joe Valley 20:07
I see companies doing, you know, that much in revenue on a monthly basis to have, you know, one owner and one and a half employees that are actually VA. So it doesn’t seem like a large, you know, group for that that size to me yet.
Yoni Kozminski 20:22
Yeah, for sure. For sure not. But they’ve, they’ve grown significantly in the time we’ve worked with them, they’ve, they’re doing over a million dollars a month now. And I’m not going to attribute every bit of what, it’s not just what we’ve done. They’re a great company, and they’re driving forward. But what we did with them is a typical engagement looks like this as we walk into the business and we we need to get a deeper understanding of what’s actually happening. And so, you know, if I was to ask you, Joe, what’s happening inside of Quiet Light Brokerage, I guarantee you that you’re going to have a slightly different perspective to every other person that exists inside of your business. Everyone sees it from the lens that they’re looking at. And so like. So like, our first objective is how do we actually cut through how do we understand what’s happening in the business and where objective in it we’re not, we’re not sitting here we’re taking all the bits of information. So our engagement, typically the first month looks like us, interviewing, shadowing, and asking for documentation, potential access to tools, like their project management tools, and everything, so that we actually have a deep, intrinsic understanding of what’s happening in the business. So that question, you
Joe Valley 21:29
said in the first month, I don’t wanna scare anybody away again, again, I’m busy man, I’m running, like just trying to keep up keep my head above water with all this stuff I’ve got to do. How much time and effort is going to be involved with, you know, Escala, and helping me scale properly? Isn’t that big? You know, Okay, can we pace it out? How’s it work?
Yoni Kozminski 21:52
Yeah, well, that’s the beautiful thing is that we take on, so when we’re talking about the first month, that’s us doing the legwork. So part of that discovery process will require, I would say a couple of hours from key personnel on the business in the first month. So I can handle Yeah, so it’s like an hour or two, you know, I’d say, let’s say we start working together would probably be an hour or two of your time at the start of the month. And then probably a month later, we’ll look to look, we’ll look for validation. So it might take another hour or so your first month, you’re looking at anywhere at the low end of three hours of investment. And at the high end, five hours of investment would be my my estimation,
Joe Valley 22:31
continue with the story about this company helps scale.
Unknown Speaker 22:33
I know that interrupting, but
Joe Valley 22:35
I know this people are coming to mind they think about these things. And they want me to ask, so I am.
Yoni Kozminski 22:41
It’s super helpful. It also helps me kind of articulate the concerns that people are going to have. So yeah, please fire away. I think you’re, you’re doing the listeners a real service, because I’m so used to communicating exactly what we do. But I didn’t stop to think every time you know, it’s so it’s so innate for me. And you know, and I’m sure you probably get the same position to when you’re looking to sell a company for you, you’ve done it a million times, you know exactly what you’re looking for. And you’re almost sometimes brushing over, you’re in autopilot. Because it’s like, right, I know what I’m looking for, give me these things, get out of my way, and I’m going to get you the best deal. That’s humanly possible. So
Joe Valley 23:20
I appreciate it continue. So they had five or six people worked with them for a month, and eventually they doubled revenue, only not 100% attributable to you maybe like 98%. Well, what did you do for him after that after that month and came back? And what did they What did they implement? And how did it work?
Yoni Kozminski 23:39
For sure. So in that month, the thing that’s really eating up all the time is we build out ads to foster insights, we build out process maps for every aspect of the business. So we interview everyone, and we start to get insights as to what’s actually happening, not just you know, we have a methodology, not just around a maturity framework, but also around how we build process maps. Like there’s a reason why everyone talks about si peas. And you know, most people don’t use them, it’s because they’re not being calculated as to what is h like, think about this, right? When you look at a folder structure inside of Google Drive or Dropbox, they’re really efficient companies. They’ll define a folder structure so that every client that you bring on has accounts payable, accounts receivable, they’ll have the, you know, marketing collateral, whatever that might be, and then everyone knows exactly where to step. So you know,
Joe Valley 24:30
just kind of laugh you’re sorry. We’re we’re doing the side by side video here, guys. And, you know, you’re seeing the expression on my face and you and he’s going what what Joe, what I tell you what you are speaking my language right now, and I’m thinking, Mark, I want you listening because I want everyone on our team, where Google Google Drive centralized folders and I want every single advisor on the team to have their folders organized the exact same way So that if I’m on a call with someone that is hoping to buy a business and they say, Well, yeah, I just bought one I can, I can look very quickly at any notes and we have a CRM as well. But it’s, it’s hard as a business owner to help people on the team, if I have to take an extra 30 minutes trying to find the right file in the right folder, because they do it differently than I do and some of the newer people on the team, so you are speaking my language. I love being organized in that set. So Alright, I’ll stop interrupting No, no, I won’t stop interrupting, continue. keep interrupting,
Yoni Kozminski 25:34
keep validating all my points. This is beautiful. But you’re right, like what happens if you don’t even get to that point at the critical moment where you got on a call, and you don’t have that information you need, there’s nothing more frustrating because you had the capability to deliver on the value add that you would have had in that moment, but you couldn’t actually step into it. And you know, it creates frustration. So it’s the same across all businesses, like when we talk about scale, that’s like a fundamental building block is like, where does everything live in the business what’s actually happening. And so like the first thing, the first thing that I would give anyone in terms of advice around how to scale their business is commit whatever is happening inside of your business to paper, understand what is actually going on, not just in your head, but so that, you know, let’s say you and I are working together in same company, Joe, we both have an understanding of what actually happens and what the natural flow of things. It’s,
Joe Valley 26:26
this is very timely, but we’re doing it now. It’s hard, though, right? We’ve got new new advisors coming on. Since 2015, I’ve been mentor, they’ve always come in through me, and I’ve, you know, taught and trained them along the way. We’re finally at the point where others are going to take on that role. And I’m Mark and I are going to have weekly calls with the new advisors. And I just started some slps this morning or reviewing some It started in 2019. And now I’m getting back to it. It’s a pretty massive undertaking, from my view. Because I all throughout it, I’ve got a link to videos and training things and all this other thing. It I was thinking maybe today we’re recording folks on February 8 2021. I’m hoping they’ll have it done by the end of the month. Is that complete insanity? Is it just or is it done quicker? Like I feel like it’s a massive undertaking?
Yoni Kozminski 27:18
Yeah. So I mean, I haven’t seen the complexities that exists inside of Quiet Light. But I would say that for us just the documentation part, we’re talking about hundreds of hours and understanding what’s happening in the business and to do it. I mean, you know, we’re coming from a process improvement consulting practice. So there’s levels, there’s levels to everything, right? And it’s about where, you know, what does your end goal look like? And how far do you want to kind of push the boundaries. So I would say that if you have a super capable team, and you have a methodology on how you want people to approach documentation, and you can kind of unify and solidify that in a specific way that everyone can follow at the top, then, you know, maybe you’d be able to do it again, without, I’m not gonna sit here and give you any professional advice without knowing what I’m talking about inside of
Joe Valley 28:06
your business. on the spot, all I’m doing is thinking about, you know, I started that doc in 2019. Right, almost two years ago. And or just about, it just, it’s an undertaking, it’s a process. And, and I think that, you know, in order, there’s different things that we talk about here that in terms of people I think and I’m you know, jumping into your business now, but you know, that the life of entrepreneurs, we’re both entrepreneurs, everybody listening is either an entrepreneur now, or they want today. And what happens is, you, you, you bootstrap, and you grow this business, and you think, ah, the life of an entrepreneur, I’m going to travel, I’m gonna do whatever I want, whenever I want. And then you realize, Oh, my God, I’m on a hamster wheel, I can’t just run and run and run, I gotta get off. The way to get off sometimes is to, you know, exit, and then you have knowledge and experience and some money in the bank. And the bootstrapping is not so tight. The other option is what you’re talking about, which is mature, grow up, right, I can say that I’ve grown my chin grow up. And I don’t expect that these big changes are going to happen in three hours because you wrote stuff down on a doc. It’s, it’s, it’s, it’s a process, you know, if I, if we have all of this dialed in, at Quiet Light if we have it all dialed in by the end of the year, I’d be thrilled, right? Because I’m mature now. We’ve run market, I’ve run multiple businesses, I think I just I’m on my seventh now, right? And he’s probably got me beat and it takes time and it and you got to mature. And for those that are running these ecommerce businesses, where they’re doing, you know, one to 50 million in revenue, they could jump off the hamster wheel and sell or they could get organized and put these things in place and make it part of building an scaling that business properly, to have a much greater exit, right, the person that closed in December, he did sell it for $25 million. But he did, he did an equity roll, right, he knew he couldn’t personally get it to 100 million, and he knew the business could get there, he ended up doing an equity roll. So he’s got 25% in the new CO, if he had worked with someone like you, if he had the heart, if you had the desire, if you had the motivation and drive, and patience, perhaps he could have done that. But I think one of the most important things people could do even when they go through your process, they learn. And then they say, Okay, got it. This actually isn’t for me, I’m going to exit, or this is for me, now I’m going to exit for a much greater value in another three years, there’s got to be that those two different paths, I would think when you
Yoni Kozminski 30:47
that’s spot on, so so before, before, you had that very beautiful point, at the end, I was gonna say they don’t have to be mutually exclusive. So, you know, in my mind, you know, I like to use the term scalable and sellable businesses. And for me, a sellable business doesn’t necessarily mean that you have to sell it, it means that you know, it’s entirely it’s at your discretion. Now you want to leave the business, you want to exit, beautiful, you’re going to get a better multiple, the transition time is going to be shorter, all the recipes, all the training videos, document to everything that exists inside of your head about your business, your supply chain and logistics, your relationships, the cadences in which, you know, things need to happen in order for you to not stock out every single thing that goes into running your business is committed to a process that people can follow. And it’s systemized use the right people the right process, the right technology. And the worst thing that you could possibly do is give Joe a tap on the shoulder and say, right, I’ve got a piece of, you know, a beautiful piece of systemized business here, what can you do for it, and you multiples are probably going to look, you know, a few numbers higher.
Joe Valley 31:57
Yeah, yeah, no, I totally agree. I totally agree. Buyers love slps. Right. The transferability is one of the four pillars or what I’m starting to call what buyers want or fear, right transferability of business slps in place, you know, that that stuff that’s inside your head is hard to transfer. And so buyers look for a certain amount of training and transition time from you, the owner of the business after closing, the more organized You are the better slps. You can, you can say, you know, they call you they send you a text and email you’re having a training session after closing. And there’s something that needs to be done. Just go to point number seven on the ESOP. Go, watch, ask question, Oh, you didn’t have any questions? Great. It works. That is really exciting for buyers. It shows you as a mature professional. And you are that fifth pillar, that invisible pillar of the business. You’re the one who who is the motor that keeps us together, the more professional and mature you are in using services like a scallop, building a business that buyers want to buy, the more value you’re gonna get from the business. Alright, so back to this company. I keep it around.
Yoni Kozminski 33:02
Let’s get to that. But it’s great. This is what it’s all about. Joe, it’s about going back and forth. And the questions that you’re going to be asking the questions that I guarantee, all the listeners are going to be thinking down. So yeah, you know, that’s, that’s where the value is. It’s not just me. Alright, so
Joe Valley 33:15
we’re not just talking esops though, right? You’re not just saying, Okay, this is how you set up slps and org structure, right? What else are you doing?
Unknown Speaker 33:22
But wait, there’s more.
Unknown Speaker 33:24
This is a direct response guy right here.
Yoni Kozminski 33:28
Can you know 1020, however many years on, you can never let those things out. Yeah, I’m a marketing guy. Right? So
Joe Valley 33:37
I say it so many times. But wait, there’s more and problem solution. Hi, let’s, let’s read up about our own personal experiences.
Yoni Kozminski 33:43
Okay, so so it’s part of this engagement, just kind of giving people that understanding of what we do. And also what they can apply to their business to it doesn’t necessarily have to be Escala that delivers it, obviously, we’d love to work with anyone who wants to work with us. But just as well, for anyone listening, like, what we’re doing is we’re documenting what’s happening in the business in the first instance, before we move into all of the recommendations that we make. So the process goes like this and have all the key findings as part of what we understand what the limitations look like, what the bottlenecks, what bottlenecks exists inside of the business. And we’re documenting that out and every single process map and sub process map inside of the business. And once we get to that stage, that’s when we come in with we have a SWOT matrix that we look at the strengths, weaknesses, opportunities and threats that exist inside of the specific problem statement that we’re looking to solve. So if it’s for sale, if it’s for exit, if it’s for scale, if it’s whatever that problem statement is, there’s too many people too many. Now, I can’t use that one. Um, if there’s too many cooks, and you know, in the kitchen, like how do we actually define who’s responsible, and and, and what needs to be achieved. So we’ll come in with that SWOT matrix, we’ll have a strategy on how to execute And then we have what we like to call our trying to think what we actually call it, it is our, I’m going to look over here because I’ve actually got it, we call it our prioritize recommendation matrix. And, and what that is, is on the back end of you know, sometimes hundreds of hours of work, you get one slide, where you get multiple slides, but you get one slide that I think is really heavy hitting. And that slide looks at the feasibility and impact of each of the recommendations, there might be five recommendations, there might be 15 recommendations, there might be, however many we can come up with to help improve the business. And we put it on impact time to deliver how it’s actually going to affect the business. And at that point, that’s like, that’s go time, we’ve understood the business, we’ve understood how to make impact and changes. And that’s where we present to the client and we say, hey, you’ve got all these things you can do. You can do them yourself, we can help you deliver, obviously, it’s for you to decide what’s what’s key, but this is how we would say it as the most important things.
Joe Valley 36:03
Like the term go time, right? I think, too many of us as entrepreneurs, I mean, this is why we’re entrepreneurs, because we think we can do anything. And you know, we have a tendency to say I’ve, I’ve got that, I can do that. And we’re we’re often right, but we’re often wrong as well. And we go, you know, Mark, and I right mark is detailed, thinks things through. And when he when he gets something finally done, yes, Mark, I’m saying that we’re finally done. It’s pretty damn good. Whereas I, on the other hand, go with the, you know, what is it ready, fire aim approach. And I left and I learned from that, and I fix it. And I think that as you’re scaling, this understanding, the path that you’re going to go on is critically important. Because if you just go out, and if you just say, you know what, I need to see, oh, I just, I’m gonna hire you. Well, then all of this is on the CEO, when you might have hired the wrong person, if they don’t have that skill set. Or maybe it’s not a CEO that you need. You just need different people for different roles and processes. It’s it’s a fascinating subject. Incredible, really, I think that too many of us as entrepreneurs move forward before knowing which direction we’re going in. And that’s kind of what you’re doing is you’re giving them different pathways to go and the steps along that pathway to get to their, you know, ultimate scale. All right,
Yoni Kozminski 37:27
spot on. absolutely spot on. So I want to say Firstly, I feel like you and I kind of cut from the same cloth like I am. Let’s just push, let’s go. And I have, you know, we spoke a little bit about traction. And, you know, Gino talks about implementers, integrators and visionaries. And so the visionary typically is the one who, you know, I’ll say, for me, I have 20 ideas, 30 ideas a day, if I’m the lucky one of them is going to be a good one. And so you have an integrator, that’s the individual who actually says to hold on a second, stop, think this is how we’re actually going to execute on that idea that other 29 ideas was shit. Focus on this one, good one, I’m going to help you bring it to market and then you have all your implement is actually deliver on the project work. So you know, you’re talking about SEO before. SEO is typically sit in that integrator landscape. And, you know, when you talk about being an entrepreneur, like none of this, none of anything that we’re creating today. And just to give you perspective, like we were doing a company a year and a half ago, today, we’ve got 120, full time people on payroll across two businesses. And
Joe Valley 38:40
yeah, well, sounds painful, is it? I mean, I mean, you’re, you’ve got processes to make that happen. But I don’t know if I could be involved with that. It’s crazy. So of course, yours will have that many. So I’ll shut up. Go ahead. Yeah,
Yoni Kozminski 38:53
well, if you if you plan for it, right, if you actually put in the work, like you know, I’ll never forget the moment where I put together if you’re familiar with business model canvas, where you have the seven, so it’s a it’s a one page document where you put your business plan together, and then you define a business plan. So So this was how I actually got my my founding team to commit and jump ship. I put together a business model canvas, and I really outline like, who are our clients going to look like? How are we going to generate these clients and the relationships? How are we going to deliver service? What’s our point of difference? I really kind of built in a single page, the vision and this is more sort of multiply made the other business but I put that to paper, and I look on a year and a half later, and I sent it to the founding team, and I just said, It’s insane. We’re delivering we’re actually delivering better a better solution than I even put in and we took some of the language that I’d written before it was a company. We’re calling it managed offshore outsourcing or some terrible name. But we took some of that language and we actually now leverage it in our market. In collateral because it’s the planning, the planning, and I have the execute is to bring it to market and to actually achieve it, and without the right team as well. So when we talk about how we operate with good systems, people process and technology, people are at the core of everything. So you need to have the right individuals driving, you want to be a big business, you’ve got to have the people who have that commitment, unlike your IBO who would honestly die if we had to sit and manage 120 people by ourself and come in and kind of lachelle Fahmy as opposed to the hunting. That’s not that’s not in our DNA. But it’s it’s not beyond our capabilities with the right relationships and the right people who are wired that way. And love doing that and love constantly evolving and improving the specific area that is their domain, they might not have the big vision around it. But what they do is something that I for my whole life, or now at least, I look at CEOs and integrators I have this level, they have like a halo sitting over their head in my eyes, because it’s beyond me, I’m never ever gonna be a great CEO. And I just have to accept that.
Joe Valley 41:09
Well, I think that we’re very common, like you say, in that regard. I just want to tell people what to do and expect them to do it, then that doesn’t always work, especially with a team of incredible entrepreneurs that we have. But they’re good at what they do. So you got I think, I think it’s all about the middle one there. No, I guess the first one people, we’ve got to get to the process. I think we’ve got people. But yeah, we’ve got people, we’ve got to get to the process. But in order to get the process, we’ve got to get that right person or people in place to implement the process with the right technology. I think that I should write all your slogans, by the way and all your taglines, I seem to be hitting it pretty on spot here.
Yoni Kozminski 41:50
I’d actually like to take that I take that further. Joe, I’d love to have you actually record them in the Chris voice in that microphone, and just have it. You know, when we land on our website,
Joe Valley 42:00
there you go. Now we’re finally getting to the point of praising me, which is exactly the point of these podcasts. Thank you very much. Good stuff. This is great stuff. How do how do people learn more about what you do here on
Yoni Kozminski 42:17
the show? So everyone’s Welcome to check out our website weareescala.com at Escala main scale in Spanish for those of you who don’t speak Spanish.
Joe Valley 42:25
And let me spell that for those that don’t understand your Australian accent or thank you for Zealand or somewhere else. weareescala.com.
Unknown Speaker 42:37
Right. Yeah, we are at the start.
Joe Valley 42:39
weareescala.com. Yeah, because Escala Doc, I will put some links, obviously folks in the show notes. But if you’re mobile and want to just look it up, all your wife is driving her husband’s driving and look it up.
Yoni Kozminski 42:54
Yeah, so So reach out, check out our website. You can also hit me up as well [email protected] if you’ve taken the time to listen this far into having me bang on for, you know, the better half of an hour, then you probably deserve to have direct line to me. So you’re welcome to email me.
Joe Valley 43:12
He’s on LinkedIn as well. easy to find. There’s only one of him, which is rare. Congratulations. We’ll put some links in the show notes as well. Just Just in terms of process, how would someone get started? Is it just a discovery call? Or what’s what’s going on here?
Yoni Kozminski 43:28
Yeah, so I mean, we talked a little bit about, you know, the different days and you know, I’m not the guy building all this stuff. My co founder heads up a skylight in terms of the service delivery mechanic. And so he’s I like to talk, he likes to listen. So he’ll ask you effectively, look at it as effectively as your your therapist for your business. He’ll listen to all his shit that you’re having and all the challenges, and he’ll put together a proposal that will help solve all those problems. And that’s our process.
Joe Valley 43:56
I love that therapist for your business. Fantastic. Man. I appreciate you spending some time with us sharing your experience and hopefully we can help a lot of different folks out there that need to scale properly. Thanks for your time. Thanks for having me. And that’s a wrap folks. I just do you want to save that. You heard you only mentioned Gino Wickman a few times throughout the podcast. He is the author of this book Traction which is incredible. He also is the co founder of EOS the entrepreneur system and his latest book you should pick up a copy especially if you’re buyers and want to get into the business Entrepreneurial Leap that will help you determine what type of business to get into if you’re a visionary entrepreneur or if you are a business owner whether you should own a franchise or something that is you know, all the slps are in place already. So please write Lastly, Gino has become a friend and he’s actually going to endorse my book, the book entrepreneurs printers EXITpreneurs Playbook is coming out in late April, early May of this year 2020. And what he’s put on the cover for me after taking a look at the manuscript and digging a little deep into it, he wrote this book is a must read for online entrepreneurs. TheEXITpreneurs Playbook provides powerful, clear and easy to read information to help you understand the value of your most valuable asset, your business. I thank you, Gino, I encourage you all to get the Entrepreneurial Leap and take a look at that. And then do us a favor here at Quiet Light. Give us a rating or review on your favorite podcast app much appreciated. We’ll chat with you next week.
Today’s podcast was produced by Rise25 and the Quiet Light content team. If you have a suggestion for a future podcast subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.