088: He scaled to $100Mil in 2 years. Here’s what to NOT do – with Jason Haugen

In today’s episode, step into the world of RV business growth with Jason Haugen. Hear how he turned a $12 million store into a thriving company. Learn about the challenges of managing RV operations, from inventory to financing. Discover Jason’s journey from Network marketing to RV industry CEO and how he expanded even during COVID-19.

Find out how teamwork and lessons from Network marketing contributed to his success. Get insights into RV sales and effective growth tactics. Jason also shares tough moments when economic factors hit the industry and entrepreneurs’ lessons on business understanding.

Tune in for valuable insights on culture, leadership, and strategic hiring. Jason’s innovative L1 to L5 employee rating system and fusion of personal development with business triumphs are not to be missed!

Jason Haugen is the CEO of Haugen RV Group, initially entering entrepreneurship at 18 through Network Marketing. He achieved success leading a large team for six years before transitioning to the RV industry in 2019.

He’s been running the RV dealerships since 2018 and officially became CEO in 2020. Jason is dedicated to building exceptional teams and shares his passion as a speaker and host of the Culture Camp podcast, focusing on the importance of culture in various fields.

• Growth Story: Jason Haugen’s journey from a $12 million RV store to a thriving business empire

• Transition Success: From network marketing to RV industry CEO, navigating challenges and triumphs

• Strategic Expansion: Acquiring stores and overcoming COVID-19 challenges

• Cultural Emphasis: Building strong team cultures from network marketing lessons

• Learning from Setbacks: Adapting to RV market downturns, focusing on stability

• Effective Leadership: Focusing on culture, using L1 to L5 rating for the team

He scaled to $100Mil in 2 years… Here’s what to NOT do – with Jason Haugen – YouTube

Transcript:
(00:00) in hindsight I wish I would have never grown I should have put all that money in that time and that resource and bumping our current stores up you know improving the facilities improving the processes making sure we have everything dialed in more instead of going and chasing Revenue I should have built the revenue um that is 100 my mistake I wish that I would have you know had more experience I don’t know what I can blame it on besides myself and I just didn’t know what I was doing um you know but right now I’m confident
(00:29) that I can make my stores here in Utah back up to 100 million dollars [Music] how quickly can you grow a 100 million dollar company and how long does it take for that to collapse this episode is one of the more vulnerable episodes that I think I’ve had the opportunity to be a part of Jason Haugen bought an RV brand an RV company and in two years blew it up to 100 million incredibly quickly he did have the Tailwinds of covid behind his back uh tremendous lessons to that process and then watched a tremendous amount of it erode
(01:23) he digs into the nuances of the mistakes he made what he would have done better and what he did that really worked some of the major takeaways here are how you can grow too quickly and what to do to avoid it how to deliberately hire and curate the right people and culture and how you can apply the lessons from network marketing to grow your own business even if it has nothing to do with network marketing loved this conversation like I said pretty wide ranging from an emotional perspective got a lot of wins and a lot
(02:00) of losses and the curtain gets pulled back Jason Haugen I appreciate you carving our time ma’am I love your backdrop thank you appreciate you thanks for having me definitely I was looking at some video of your studio uh before we jumped on and I feel like you’ve got the same backdrop but a couple different colors like your guest gets a different color or something yeah so we’ve kind of been doing this uh yellow for a while um but I used to have it kind of where if the guests had a certain color brand
(02:28) like um these lights have like 360 different colors and then they have like 500 different Hues you could do like you can do anything you want to so um I used to just let the guests just decide but we’ve kind of decided like yellow is kind of my brand so we’re keeping it keeping it on brand I dig it I’m always curious about Studio setups I mean it’s uh I have fun with it I have fun or I’m in my office right now at the easy Peter act office but we’ve got a studio that’s a different vibe different
(02:56) setup and I’m kind of always playing with it thinking about options I love it yeah no I I have a good time we change it we change it up so we have like different I I’ve never really done Seasons but we do random different chain jobs or different style or like I used to have a table where we’d sit across the table now it’s more of a side by side like you know chair interview style and so I’m sure one day we’ll change it up again dig it well let’s uh let’s dive into stuff man so we met somewhat
(03:22) randomly a few months ago at actually an internet marketing party one of the big internet marketing party events um and David Gonzalez uh said you have to talk to Jason and so we found ourselves in a quick conversation before you flew out I think that night um and you’ve got an interesting story um I want to talk about this you know RV group Empire that you’ve been building which is now a nine figure company but I want to start at the beginning um because I’ve dug in a little bit can you give me some backdrop on the
(03:54) beginning of business for you yeah so I grew up in a very entrepreneurial household uh my mom and daddy owned about 40 different businesses growing up um they’ve done billions and billions and billions in business and just done very very well for themselves but they always taught us um their money is their money our money is our money you know they they were wealthy we were not um you know I mean they were they were they were really hard on us you know so it’s you know we I don’t know people don’t really believe that but they were
(04:21) they were actually really hard on us but um you know growing up I always want to do what Mom and Dad did they were really large in network marketing and so they were they had one of the largest groups back in the day in the in the in the world in their in their group or in in the industry and so I always wanted to do what they did so when I turned 18 years old I joined network marketing company and so that was a great time um very quickly Rose to the top was the top runner in the company um I’m a natural you know kind of talker
(04:49) sales guy I’m really good with people and just had a really really good time in that company and learned a lot very very young I mean speaking on the stage with a very successful individuals um kind of touring around the country speaking at different conferences and different things like that and it was just a blast like I had such a good time um doing the network marketing thing I learned a lot about business through that little self-development a lot of you know how to operate and and you know network marketing is very different but
(05:18) I had you know thousands and thousands and thousands of people that I was dealing with and so you got to like really really learn how to deal with people which I think is the kind of the secret sauce to business and so well let me let me pause you on that because network marketing is one of these one of the industries that some people don’t understand at all some people have a terrible taste in their mouth some people are high performers High earners um and it’s uh sticky for that reason and you know I grew up in direct sales
(05:45) uh which is tangential to network marketing right direct direct marketing companies and um you know direct sales companies and mlms are similar but the differentiator being in an MLM you are making you’re generating revenue from the group from the override of other people you bring in as opposed to just generating revenue from the product and the differentiation legally that people look for is how much in the government and particularly how much of the revenue comes from product versus is the overrides in the group
(06:21) and I want to be super clear like I have lots of friends that have crushed in network marketing both as Distributors and also as owning network marketing companies there is no question that the efficacy of the model is super strong um what what product did you get into what company did you get into what were your parents doing because I think that context is helpful for people to kind of get a grip on what it means and how you Rose so my mom and dad were in Amway um just like so like original yep the ogs I mean I mean they were the largest
(06:56) distributors in Amway between the you know late 80s 90s and early 2000s um they have I mean they they I mean they had business in one or 32 countries I think it’s 32 countries um they were I mean they still hold the largest um the record for the largest business meeting at the Georgia Dome 97 000 people um they’re small events were 20 000 people damn um I remember themselves I mean every they were they were they were the arena people I mean they were going to these big basketball Arenas um I’ve seen them do the the Anaheim
(07:29) Stadium where that you know where the Angels play in California and sell out that like and that was small like that wasn’t really that hard to do I mean their hardest thing was making it small I mean where there wasn’t so many people coming to him because you know back in the and they did all this with no cell phones no internet no I mean you I mean it was insane and well and on top of that Amway you were housing the product right so like now most network marketing companies you’re not housing the product
(07:55) the product Gets Drop shipped for you but Amway being the original network marketing company you actually bought the product and resold it right or at least you warehoused it yourself yeah you definitely you Warehouse that and the crazy thing about it so they called them directs um so a direct was a rank about 25 000 points and when you became a direct you were direct to the company so every Everybody below you had to come do a product pickup from you no matter where they they were so people would drive three four five hours to you to pick up
(08:24) your product or their product and then they would go home it also created some issues because they would pay um they’re people you know they were supposed to calculate commissions and they were they were paying all that so it was a it was a disaster he’s like a nightmare dude yeah so a lot of lawsuits flying around and different things but it was a big learning experience for my mom and dad I got to know everybody in the industry I gotta you know hang out and go to the devoses and the van andel’s home who owned Amway
(08:56) they own the Orlando Magic currently and a bunch of other stuff um got to spend a lot of time with them I got to meet a bunch of people like you know people toured around with my mom and dad like George Foreman would be on we had a big tour bus my mom and dad um data and George Foreman was chilling on the bus with us like um like Johnny Cash and him like a few presidents been the White House um like Robert kiosaka Jim Rohn all like just all these those are just normal like yeah this was just a normal Thursday Friday Saturday Sunday event
(09:27) that you’d go to and there’d be a bunch of people and um I have a twin and then two older I have an older brother an older sister and we really didn’t care about any of that because we’re just trying to have a good time and it was a vacation to us but I wish it would have been a little bit older and really seen and appreciated what they did um you know I was born in 1993 and they were they have already gone diamond they were already crushing it like they were already doing all these things and you
(09:50) know I didn’t really get to see my dad back in his prime and my mom back in her prime I mean my mom was right there with them I’m speaking and presenting the opportunity showing the plan going to the living rooms grinding it out and that was really really cool to see as a kid growing up seeing both of them grind together everything that they did was a hustle together so I appreciated that and then I got into a company called avisay which never really grew too big it was more of Just Sports supplements like you
(10:17) they had like a pain you know like a joint thing a weight loss overall multivitamin and a protein in like a little sports drink it never really exploded like I think I was the biggest biggest person um but it had changed a lot since my mom and dad were in you know network marketing and they they initially help us what was that the industry changed the industry changed a lot um you know with the with a lot of the uh like the rulings with the FTC and everything going you know they it was more customer oriented um back in Amway
(10:51) it was like what what is a customer I didn’t even really have that right it was all ibos or what they used to call them like independent business owners all Distributors like all that and the industry you know has transformed um you know over the course the last probably 15 years and it just wasn’t what I grew up knowing it just wasn’t I don’t know I had a really hard time doing I I had a lot of success but I had a hard time doing like these parties and like it just wasn’t my vibe like it just
(11:19) I was kind of beating my head against the wall and our company got sold and so that was a kind of opportunity for me to reset a little bit figure out what I wanted to do the new company coming in um you know there was kind of a mixture of three different companies and so I stayed with them for a year and kind of in that transition period um I got introduced to the RV industry my dad came to me to a deal I was like hey I don’t really want to do this but um I got approached by these guys that are going to sell their dealership
(11:47) um he had known them previously because he bought an RV from him so he’s like hey they’re going to sell this dealership and you know do you do you want to buy it like you know we’re trying to figure out because we know that we’re probably not going to be in network marketing very long and my dad knows that and he’s like hey let’s figure out something that the family can do and keep this thing going um because he had he had sold all of his businesses and a ton of real estate and a ton of stuff and just was trying to
(12:09) retire um for once in his life and so got introduced that um late 2017 ended up purchasing in 2018 and at the end of 2017 is when our company got sold and so it was very like weird transition period so I got in the RV business the same year our business got sold and I tried to do both of them at tandem I try to do the RV industry and never told a single soul about the RV industry and network of marketing like kept them separate I never posted about the RV company on Instagram never never known had no idea like zero clue that we had the RV
(12:46) dealerships because I didn’t want that out there because once you’re in network marketing you’re in network marketing you can’t do anything else like it like it’s it’s bad and so we did that in tandem for about a year and a half and why is it bad what was that why is it bad is it because I mean I I can hypothesize but why is it bad once you’re in network marketing you want to put those it’s just like it’s one of those things that you always talk about of like it’s kind of funny because I was
(13:13) on a podcast the other day about this it’s like they always sell it as a side hustle to make an extra 500 bucks a month but once you join and then you decide not to go all in every event quit your job like all these different things it’s like look that as you’re not a leader you don’t want this bad enough for different things like and I had a very big group I didn’t want them to lose to start doubting and lose faith in the industry or the company you know I’m out there trying to speak you know I’m
(13:35) speaking and still doing all these Hotel meetings and still doing all these other other uh you know like home meetings I’m trying to just spin those plates fast I can while in my daytime I’m doing the dealerships but nobody knows that but I don’t want them to lose that faith and to think oh Jason’s doing something else then we probably should look for something else because that’s not what you want a group of thousands of people going oh well you know he doesn’t really believe in it he’s doing other things then you know we
(14:03) we should do the things I watch my mom and dad do it like my mom and dad own 40 businesses and no one ever knew um but obviously my dad kind of saw it from a higher level and was like I have to diversify it because I don’t really know you know what’s going to happen um a lot of times in network marketing we think it’s free we think all these like but at the end of the day a company controls everything and can terminate you my mom and dad got terminated from Amway for really no reason like like just woke
(14:28) up when they got terminated um so like they can do anything they want to so luckily my dad had a bunch of other things going on and it really didn’t affect them what was the rationale for that so back in 2007 um someone one of the board members of the IBO AI board which is the Independent Business Owners Association of Amway so you have the field and you have corporate the field had a board and their bylaws and Amway that if a board member or or any individual in Amway sued the company um an automatic termination
(15:03) a board member put them put everybody on the board’s name on a lawsuit and sued the company and my mom and dad I got automatically terminated and then they ended up getting reinstated and then my dad resigned and Mom resigned so actually that resignation letter is still on online you can Google it um it actually made national headlines at the moment my mom and dad resigned it was pretty crazy so um yeah I mean so they kind of kind of had that control and so you know we’re doing the the dealerships and you know
(15:37) the network marketing and kind of in tandem um then they got sold again and then finally at the end of 2019 I was like hey I’m this new company coming in I they flew me out to San Diego got to meet the owners and the board and got to walk through the corporate office and all that stuff and I remember calling my then girlfriend that’s you know girlfriend at the time now she’s not my wife and saying hey I’m done with this network marketing thing um I’m going all in on the RV industry and I’m I’m like I’m burning the bridges
(16:04) I didn’t even sign back up I had thousands and tens of thousands of dollars in commissions sitting in my account and I’m like I don’t even want my login you guys have it I’m done I’m going over here I don’t I’m burning Bridges like I can’t keep having these two separate lives anymore I’m going all in in the RV industry and that was the best decision best thing that ever happened to me because a couple months later covet hit which was the best time in the RV history of the world so
(16:29) everything kind of happened perfect timing wise you grew up heavily exposed to network marketing and it was like this was the way this was the thing that made sense yeah so easy transition into it when you’re 18. immediate success the industry I think the industry is an interesting case study in general and I’ll I’ll bring this back when we get into your current business but kind of how it works what worked originally versus what works today why it works the Dynamics that are at play there those
(16:58) are all good lessons to apply to most businesses um but you get into another industry and or get into another company it sells a number of times through this you your family uh buys an RV company what what are the what’s the size of the RV brand at that point in time when you guys buy it and kind of what’s the structure like what role do you play What role is the rest of the family play so we uh we ended up buying a store that we did we had no idea what the finance the financials looked one way but we got in
(17:34) there and it looked it was so backwards that we did it was bad I mean we could have actually you know had some big issues with them because they had no idea what their financials were and it was way more upside down than what it what it seemed like but the store was doing about 12 million in sales per year um that year in 2018 we did like 12 points 12.
(17:56) 8 million in sales and which is you know not bad um you know you can still make a million bucks a year at that they were definitely not um but it’s you know there’s a lot that goes into that we had I think we had about 22 employees um and so my dad invested and was like Hey like this is going to be your thing um you know I’m just going to help because we went to buy it and really didn’t realize how hard it was to purchase an RV dealership because of what they call flooring that is how you buy all the inventory it’s a flooring line so it’s like a
(18:23) credit line well I didn’t know how hard that was and so we went you know young dumb and naive kind of went and bought this and then the bank was like whoa whoa blocked everything and we had to have basically a one for one in assets for our flooring line which is about three and a half million dollars at the time and so they had to have like a vetting process and all this stuff because generally RV dealership owners come from the industry and so the banks are familiar with them whether they were a general manager or
(18:50) somebody in the RV industry well we came from out of nowhere thin air bought the dealership never even told the flooring company because we didn’t even know what that meant and all of a sudden we’re operating and then yeah we got shut down for a little bit um so I had to have you know that Financial backing through my dad and then you know it was only supposed to be a very short period of time and then we were going to make a transition period and all that good stuff well I I decided to buy more stores which we’ll get into
(19:15) a little bit but um my dad was okay for you for me to do this with you and to finance this and do all this stuff like you know you’re gonna have to work here and I’m like no yeah I’ll work here every day 70 miles from my house and so I’m like yeah that’s no problem um in the worst part of Salt Lake City just you know sometimes it takes me two and a half three hours to get there and then he got got the same commute back um but he’s like you got to work there every single day all day like you know
(19:42) It’s a Grind from you know nine in the morning till seven at night and I’m like all right whatever dude I’ll do it um but he’s like you’re gonna have to sell and I’m like excuse me and so I became a salesperson at the store and did that from basically January until June and July 1st um of 2018 I just became the operations manager which more of was like the big picture scope of looking at everything making everything run a little bit better and learning the operations of the dealership earning
(20:08) sales learning Finance earning Parts service used inventory new inventory how to manage the inventory like there’s so much that goes into an RV dealership um which we didn’t know in 2018 Harvard Business published an article that states the RV dealership model business is the hardest in 2018 it’s the hardest business to run so and then that’s from Harvard Business we had if I would have read that article I would have never done it but what um because what makes it difficult what are the elements that you think makes that
(20:37) model in particular difficult so you have you have basically five different businesses Under One Roof you have new inventory used inventory Finance parts and service and they all have their own p l they pull they all pay allocated expenses plus we’re about 15 to 20 years behind the automotive industry um to order parts you take a picture of it you email it to someone in Indiana and then they might send it to you two or three times to try to figure out which part you’re asking for in the RV industry nothing is attributed to a VIN
(21:05) number you go to your local car place in the Ford store right you’re you’re some some bolt in your seat breaks you go give them your VIN number and they click on the seat and it blows up and it has every single individual part in that seat and you just pick hey it’s that one and they order it right there is nothing attributed to a VIN number in the RV industry um at least for you know for trailers but generally even motorhomes there’s no there’s it doesn’t mean anything like they literally will go to
(21:32) Home Depot Lowe’s Ace Hardware and buy two like buy piping and buy Breakers and buy bolts and that’s how they build these things is all by hand and so that makes it extremely complicated Plus in the RV industry there’s no such thing as free flooring in the in the car industry they have like volume incentives by the manufacturers and they have what they call free flooring in the the car manufacturers just basically give them the cars um for free for a certain amount of time RV industry day one that baby rolls off
(22:02) the lot even if it stays in a shipping Yard in Indiana I’m paying interest every single minute of every single day until I sell it and so it could sit there for a very long time accumulating Insurance like so it’s very complicated I mean you’re doing a logistics company trying to get all these in like the car industry you know I’ve kind of heard that it’s a lot you know done by the manufacturers here it’s like the wild west the manufacturers don’t want to do anything for you and so it’s just it’s
(22:28) it’s complicated business but I think it’s a fun business I mean we’re trying to we’ve done some really cool things to try to make it a little new agey and you know me coming in and I don’t know what I know I’m trying to you know systemize and process and then you know what I do a lot of culture coaching and culture stuff so like we’ve implemented a lot of that stuff which is helped us tremendously but it’s still the RV industry and you still have those battles to be able to to go through so
(22:50) it’s been it’s been kind of nuts but it all started with me being a salesperson and then it became the operations manager and I did that for a year and a half and then we bought more stores and made myself the CEO and about five more stores in 21 and kind of just go I mean we’re just we’re just growing like crazy went from 12 million in sales to 13 13 to 65 65 to 103 and then 103 to 111.
(23:19) so let’s talk about that so the uh let’s talk about where you were in that process and what that jump was so uh 12 to 13 13 to 65 is a big jump was that through acquisition yep that was their acquisition it was through two stores of an acquisition um and we took those stores so previous year they did 20 million in the year that we took them over we did 50.
(23:39) and what uh what was the acquisition like how did you go about finding them and what were the terms of the acquisition roughly so we we found it just through actually Word of Mouth um the Gad the owner actually called us and was like hey I heard you’re looking for some stores to buy because there was a little store that we were looking to buy and um this was the one two of the largest dealerships in the state and we were like we never even thought that I wasn’t on the radar but the guy was dying to get out and so um we ended up buying
(24:06) those stores um we financed about or we we did upfront cash um probably 70 of it and the guy financed the 30 percent and um those stores very profitable doing very very well um it was It was kind of crazy we bought those February 1st 2020 and as you know covet hit in the middle of March 2020 and that was the craziest experience of my life because we had just spent you know six million bucks on these dealerships and we’re like holy crap what did we just do and so how are how are those valued then you said you sent
(24:42) spent 6 million which was 70 of the purchase price so you’re looking at a 9 million dollar purchase price for something that’s generating 20 million a year so our uh our cash was four million and we financed the 2 million uh got him or I guess that’d be 20. I don’t know whatever whatever the math that ends up being the percentage but generally it’s it’s about two to three times earnings um we looked at it like it was almost a one-time earning because of how much the guy the low hanging fruit and the guy
(25:11) was leaving on the table which [Music] um we’ve we every dealership we’ve bought we’ve made our money back in one year so wow yeah um it’s been it’s been very very you know good and we’ve we have some processes that we we implement but we’ve never not made our money back in one year we’re we’re basically besides the first store but every other acquisition we made since then which is eight more Stores um we’ve always made our money back the first year so it’s been it’s been good
(25:42) but that uh that 2020 I mean a lot and a lot of it was predicated on because of covet it probably isn’t normal but that’s just my experience um got it you know the RV industry just took off and accelerated at a crazy crazy speed what what did you see in that particular store that and maybe maybe it’s nothing but what did you see in that particular store that made you feel like he was leaving something on the table that made you feel like hey there’s space for us to grow this Finance so in the RV
(26:09) industry so when you go like purchase a vehicle and you get the service contracts or some states are called warranties um you know you’re getting the you know the gap insurance like all those different things so that’s all what we call Finance right in the automotive industry that is the only profitable part of a car sale generally um on the front end they call it the front now so there’s a front end on the gross profit of the vehicle there’s the back end on the financing part so the front and back there’s generally in the
(26:35) car industry there’s not a lot of front handful of dollars like if you have 500 bucks a thousand bucks and but all the money is in the financing the auto the RV industry is the complete opposite all the money is made on the front and nobody ever cares about the back um we have dialed in our process the average percent of sales in the RV industry is around three percent of sales so if you do a hundred you know a hundred thousand dollar rig the financing department is going to make about three grand in our company our average is 11 and so
(27:07) you know if we see all that money in sales I’m thinking an eight percent increase in Gross probably that’s just I mean it’s a massive amount if especially if you’re selling 20 30 40 50 million in units and you can add another you know eight percent on your bottom line that’s a pretty big deal and so when we look at those numbers we see a lot of low-hanging fruit in different areas like that and there’s I mean there’s different things like Parts margin and service efficiency with their
(27:29) service efficiency was horrible um and you know different things like that so that’s where we see the low-hanging fruit so if someone wants like six million bucks for a store they you know their net or their ebitda which we don’t really do ebitda on the RV industry but their net profit is you know 2 million and they want six okay that’s a three times running to the person but then we think that we can just buy one simple process and the same amount of Revenue the same amount of everything everything stays the same we
(27:51) can make three and a half or four then okay you know that’s like a one and a half times earnings to us which you know that year we ended up making more than that so it’s that’s how we kind of look at those different calculations of of when we go purchase stores and we break it down I mean I can break down a financial in probably 20 minutes of what we think we can do with the store or not nothing makes sense if it doesn’t make sense and these stores not only do they have a lot of low hanging fruit in the
(28:15) financials they had really really good lines in the RV industry which are worth a lot of money in itself so it was very strategic to add certain lines because in Utah you have to be 35 miles away as the crow flies from another the the same brand um not necessarily a dealership but the same brand they have to be 35 miles away and so yeah so RV only RVs in state of Utah that seems rather arbitrary and strange yeah I mean it keeps it keeps everybody competitive um you know where there’s not a you know there’s a Ford Store in every corner in
(28:48) some places but it keeps you kind of competitive because the Market’s not that big I mean it is that big but it’s not that big so it kind of Keeps Us competitive and so everybody in Salt Lake City basically they call them btas or basic trade areas that BTA is taken up by all these big guys like camping world and General RV and all that stuff so every brand is already taken and you in Salt Lake City so my Salt Lake City store doesn’t really have like a lot of brands or even maybe the Best Brands but
(29:16) those two stores where they were they were 100 miles south and 100 miles north of Salt Lake they had anything you wanted to dream of I mean and they can still have anything you want to dream of it’s got it so when you’re talking about Brands you’re talking about the brand of the RV not the brand of the dealership yeah brand of the RV so and there’s no like well Camping World’s starting a new a new model but there’s no like brand specific stores in the RB industry besides Airstream is trying to do that
(29:43) so everything like if it’s like you know Jason’s RV so where I can have anything I want to that’s available interesting um so okay one of the things that I got that I think is a a good takeaway for anybody when you’re valuing a business and looking at it you said a number of things that I think are relevant which is you need to know how to look at somebody’s p l and you you need to be able to understand whether they’re being efficient there or not and where the holes are right where the areas for
(30:11) improvement are or where the things are that are just going to be a problem um but you also talked about lines and I think that’s something that and you are calling them floors in the RV space right but it’s the line of credit that allows you to have purchasing power and in different Industries there are different assets like that it could be a line of credit you know if you’re doing bars and restaurants it could be a liquor license that passes on um or in real estate it could be zoning right but those are the things that if
(30:41) you’re not up to speed on it are easy to overlook when you’re looking at Acquisitions um so I think that’s a good takeaway for people for sure it’s those details that matter that you don’t really know that you could you could literally buy I mean we bought the dealership before we even knew by the flooring line so we essentially paid the guy bought everything changed everything in our name and the flooring line was like shut it down and we were like wait what and so luckily you know we had money but we
(31:05) had to put a million dollars in a Nylock for 365 days just sitting there couldn’t do anything knowing it was not allowed to bury interest it just had to sit there in an eye lock doing nothing and so I mean we were like begging on our knee like please let us do this and they were like no you have no history we don’t care how much money you’re worth it doesn’t matter how much cash you have like you don’t care and I’m like this is crazy you know we’re thinking that our my you know even my dad’s balance sheet
(31:27) I had a little bit of money and like what the heck and they they just don’t it’s just they don’t care which you know the banking industry is that and so is those Minor Details that are like hey you know so that’s the first thing when we go by a dealership is we you kind of have to ask permission from the flooring company can I do this and if they say yes or they say no then you either yes or no that’s a super interesting Dynamic of the RV space yeah it’s gone I’m telling you it’s complicated man yeah
(31:55) well you know I think uh lots of Industries have Nuance I mean inside of payments we’ve got all sorts of bizarre you know govern like visa and Mastercard or the governing body uh but then you’ve got sort of this next layer which are the the member banks that are members of the Visa Mastercard Association and they kind of police all the rules but then they have their own layer of rules and similarly you’re looking for like you’re looking for Beyond a million is brought to you by Easy Pay Direct if you’re an
(32:25) entrepreneur and you are still using a product like stripe or PayPal to accept payments it is time to find out why the largest names in your industry would never consider doing that check out easypaydirect.com forward slash bam to find out more um somebody to Grant you permission for flooring right and the member banks it’s similar they’re all different they all have different sets of rules and you need to get one that’s going to play nice with you basically um but it’s an interesting thing to
(32:54) think about uh yeah I had no idea that that was the case inside of the RV World um no In fairness I haven’t spent a tremendous amount of time talking about or thinking about the RV space until recently that’s funny yeah it’s relatively unknown until until I talk about it to you now you’re going to go down the freeway and be like oh look an RV an RV an RV an RV well I’ve definitely thought about RVs because similar through covid uh there it became more prevalent to see people journeying out uh amongst the the country in their
(33:26) own little dedicated space right um and obviously RVs have existed forever but that became a way out I think at some point um has that has that continued postcovid um no it’s actually you know what what comes up must come down and this is where you know I’m gonna own some truth um you know everything I kind of just talked about sounds great and sounds peachy and all that stuff but the fact is you know we made some mistakes and we kind of let ourselves you know the eye off the the prize a little bit and I was
(33:58) you know I only knew what I knew and I was very new to the RV industry and you know it was really hard in 18 really hard and 19 all sudden it got super easy in 2021 and in kind of a little bit of 22. and so what I did is you know took my off of really how you generate the revenue which I really was never super familiar with um I got the businesses and started building these businesses when the revenue and the demand was just there boom boom boom like we couldn’t screw it up like I was doing so much and we were making so much money our problem
(34:22) was we didn’t know what to do with it so we’re trying to figure out tax thing like what’s going on and I’m more worried about the support of the company when it shifted in the middle of 22 March of 2022 to put in perspective I made a million and a half dollars net profit in March I made seventy thousand dollars net profit in April I mean it wow flip in like one month right and then it’s been trending down ever since and so you know not understanding how how that part Works has kind of is is
(34:51) hurt the company um you know we’re we’ve sold some stores trying to you know capitalize the company a little bit we’re going to sell more stores to recap we grew and now we’re shrinking back to to really focus on you know making sure those processes are right because I’ve learned a lot in the last while but really really in the last like month it’s kind of crazy we have this podcast really in the last month my whole entire vision of Everything Has Changed substantially because I’ve got the opportunity to go
(35:14) hang out with some people with some big dealerships and go look at their stores and how they operate how they think it’s just we’re not even playing the same game and so we’ve decided to shrink back down recapitalize the company and get the health of the company going and work on a lot of these processes that I was just not super familiar with that I was never a sales guy in a dealership I didn’t know how the marketing worked I didn’t even know how to sales process worked I didn’t know how you get desk a
(35:40) deal which they call like when you’re doing the FourSquare and all that stuff like I did not know how any of that worked and this guy that I was kind been mentoring me is literally is like you’re the biggest he literally called me the biggest city ever because I can’t believe you have no business being in the RV industry like you know but I needed that and it was kind of like a whoa like I think that I’m killing it but it’s been that coveted facade in that coveted blanket and then the industry is tanking and I’m sitting here
(36:02) thinking support support like we got to figure out how to save our way to a million bucks and the guy’s like you need to go create the revenue I’m killing it you lost money last year I made 40 million bucks like you did like what like you need to understand how to do this and so we’re reposition the company to be able to do that because the industry’s come come back down but you know I only know what I know um but it’s an ugly truth right now and so but it’s gonna be it’s gonna be a
(36:27) wild ride like I was telling everybody you know my team and like if we pull this off we’re gonna go down to the history books with the most amazing freaking thing in the world um but I know that we’re gonna pull it off because I got some people in my corner um that are big you know helping and Andy Elliott um I don’t know if you know Andy Elliot um I’m wearing his little wristbands right here but he basically is coming into our company and change their whole entire sales process and doing a bunch
(36:51) of stuff for us and that’s just from honestly a lucky night I went to dinner and he was there which is kind of nuts but um you know we’re really focusing on getting that Revenue back up and getting that market share because the RV industry is is is in a tight tight spot right now you’re going to see a lot of stores start going out of business I love hearing that not not because I love hearing about your your struggle and and decline in that or uh recapitalization but because uh people need to hear it you know
(37:22) there’s a specifically the the missteps in the learning lessons are the things that other entrepreneurs need to hear and rarely get to because most of the time what gets posted what gets shared and even what gets asked is all the good stuff right even when you’re socially talking it’s like hey what’s going on and or hey what’s good in your life right now or you’re looking for those and people aren’t opening the door to um the huge learning lessons which is what we all need uh let’s start with uh you know a million
(38:01) plus in net a million and a half in net in February to 70 grand in April uh was this an interest rate change what was the significant shift that caused that yeah so I mean you had a combination of demand going down interest rates going up um you know my flooring line I have 50 well right now I don’t have 50 million but I had 50 55 million in inventory and I’m paying 12 interest on that inventory um to put it in perspective 12 months prior to that it was three and a quarter and so my interest just shot through the
(38:34) roof and demand was all so then you have this kind of cross of the interest and the expense of everything is going crazy and then you and then inflation’s going crazy and we have the demand is just going down and so the margins shrinking and shrinking and shrinking and shrinking I mean we’re making you know 20 on the trailers margin wise now we’re making like one and two percent which doesn’t even pay the bills and so it just shot like that like that demand in April was nothing like it just shut off
(39:03) it was like you had a fire hose in March and where’s we’re high-fiving thinking that this is you know because historically our our season peaks in June the end of June you’re coming back down on that down slope and so March was amazing we’re making a million you know seven net and all these different things and we’re high-fiving and like guys we’re gonna crush it and then we’re thinking we’re getting ready for June right like oh man what is June going to look like and so we had inventory
(39:28) flowing in because you had you have to pre-buy it all and so we kind of game this system of how you know all the inventory flows in and all that which is really extremely complicated and we use analysts and computer programs to try to figure it out and we never get it right but you know all that came in in March you know you have February March April May June is when our inventory kind of comes in and then we shut it off and we kind of sell out of it for the you know we go in the winter here in Utah and so we’re thinking you know hey this is
(39:55) going to be awesome we might need to order a little bit extra and so we’re trying to figure out what to do but what happened was because of covid we had hundreds and hundreds and hundreds of trailers sitting in Indiana that had not shipped yet because they’re sitting in holding yards because there’s a big like Freight you know issue with they can’t find drivers well you know you can’t shut that off now because we’re buying them we got interest on them so all those units started to trickle in and so now we have this
(40:27) swollen inventory and you know and now the demand is gone and so now we’re just it’s just decreasing and decreasing and decreasing and decreasing and decreasing and I’m thinking hey maybe this is a fluke you know it’s just a bad month you know what’s going to happen in may like we’re going to have a good summer and it never really came back I mean it came back maybe a few hundred thousand dollars in net but it never really came back to like you know we were making over a million dollars a month you know
(40:53) in the Years prior which you know that’s awesome but we gave it all back to the economy in the last couple of years yeah so I didn’t I didn’t think about I thought about the demand side of it relative to interest meaning that if most people are financing RVs which I imagine they are right RVs are expensive um as interest rates went up people’s capacity to buy just went down so demand went down as a result but I didn’t think about the other side of that which is your line went from three percent to 12
(41:26) which is horrific I mean that’s a wild wild difference um yeah that’s brutal that makes sense yeah no it’s nuts and we did have that that aspect of where you know people could only afford what they can afford right but inflation made these trailers go up like some in most cases 50 percent increases in prices so I know that guy that’s trying to buy that twenty thousand dollar brand new trailer that doesn’t exist in the RV industry anymore at all and we used to sell I used to buy these 20 six foot bunk houses in covid
(41:59) because I remember the day that I bought them they were fourteen thousand dollars landed on my lot a 26 foot bunk house with a slide like that’s a solid trailer for a family I used to buy 14 110 bucks I never forget the number because I bought 150 of them at one time in covet and we sold them in a month like that I could tell the demand was insane but now that trailer I’m buying from the manufacturer for twenty six thousand dollars so I have to make you know market up to 20 you know you know mid you know low 30s to even make a little
(42:27) bit of money on it and so that twenty thousand dollar buyer is gone and that’s a major portion of the market and so like it it was just a massive you know interest rates went up on my inventory interest rates went up on the the consumers the prices went up on the trailer so then there’s no market share left for any of these buyers that could that could afford those payments and it it was kind of a I wouldn’t say it was a Chernobyl thing but it was definitely a recipe for what is going on right now uh
(42:57) so who buys the RV uh RV dealerships at this point and how do the numbers how the numbers shifted on exit so like when you’re looking to acquire them you’re looking at two to three times earnings except you see the upsides you’re trying to you are buying them at maybe one and a half but really the the seller thinks it’s two to three times earnings when you’re selling them now um what do the numbers look like sorry sorry to dig it dig a knife in the wound here but but I think it’s important to
(43:27) look at it luckily our Missouri stores we were selling we sold for basically we’re not going to get all of our money back out but we basically sold them for all that we paid for them um and that was just because the guy saw the value in it and we’re selling the value and we got good Brokers and the financials were didn’t didn’t speak to that but you know it had good lines and you know they saw the value in that but we’re good we we you know we’re financing now on the other side a Porsche we’re carrying that contract so
(43:52) we’re gonna get paid over the next five years um you know they put like 800 000 down and then they’re gonna Finance the two million bucks on the other we Finance the two million bucks on the other side um we’re actually selling right now some stores to Camping World Marcus Lemonis is buying our stores in Oregon and they basically didn’t even look at our financials because they knew we were losing money and just offered a lump sum for everything and we took it um and it’s it’s we’re gonna take a haircut pretty
(44:20) gnarly haircut but we’re stopping the bleeding and the hemorrhaging and all that stuff and we’re gonna end up coming out pretty clean we’ve made a lot of money on the ride and we’re gonna come out breaking even so I look at it like well we put the money into it um made a lot of money we’re gonna you know we’ve done a lot of cool things with the money and then now we’re gonna sell it and then it’s looking like it’s gonna you know we’re gonna be able to close it down the right way and not have
(44:45) to do anything crazy we’re just gonna you know shut everything down and have a little bit of money left over um for that so that’s unfortunate but my Utah Stores um you know we’re we’re trying to just protect the mothership protect home you know I in in hindsight I wish I would have never grown I should have put all that money in that time and that resource in bumping our current stores up you know improving the facilities improving the processes making sure we have everything dialed in more instead
(45:12) of going and chasing Revenue I should have built the revenue um that is 100 my mistake I wish that I would have you know had more experience I don’t know what I can blame it on besides myself and I just didn’t know what I was doing um you know but right now I’m confident that I can make my stores here in Utah back up to 100 million dollars not I wouldn’t say relatively easily but if I focus and Hyper focus on anything I put my mind to I know that I can do it and I’m taking the reins of everything back
(45:41) over because I’ve hired some people as we’ve grown that I don’t feel like I’ve done the best jobs and so now I’m making some changes and I’m taking a lot of it back over and just in the last month we’ve flipped everything upside down and we’re selling units right now and we’re we’re gonna make this puppy profitable and you know we’re gonna make some things happen but I’ve had to have a little bit of a come to Jesus meeting with myself and realize hey I don’t know
(46:06) what I don’t know and I’m going to surround myself with the best people but at the end of the day I’m gonna make this happen whether people like it or not but I have to protect um you know our investment my investment and I want this to keep keep going so you have to expand with the with the market you can track with the market um and that’s been the hardest thing for me is just is is Contracting too late um you know I wish that I would have done some of these repositioning and I’ll be honestly you know I hate to say
(46:35) it but some layoffs and some making writing the ship for the current market and the current Revenue right like the stores were appropriate for covid revenue of you know we were just didn’t even know what to do with ourselves and now when the markets kind of peeled back it’s like okay well we can’t bet on the calm like we have no idea we have to just make sure we’re taking care of that now and I have some calculations and some formulations through um of how I calculate how many employees we can have per store and I’m like
(47:04) how did I let this go like I’m beating myself against the wall every day I mean like how did I not pay attention to the details and so I everybody I’m talking to now I’m like pay attention like are you looking at everything like you know like I should have been more in the numbers and more into the dealerships than trying to sit in an office at corporate trying to game everything and figure out how to support it and save and this and that and the other I should have been in the trenches and I would
(47:28) have found this out nine months ago a year ago two years ago you know I didn’t and it’s cost us Millions but I’m gonna flip this baby around and it’s going to be fun so what I what I think I heard was you’ve got this there’s this gap between working in the business versus working on the business and ultimately scale comes from working on the business not in it but the mistake you made was not having a Thor a thorough enough understanding of the practices in the business to be able to work on it above 100
(48:02) that’s a great way to put it because it would have been a lot easier to work on the business I would have known what the business is supposed to look like so I’m thinking this picture that I’ve built is what the business is supposed to look like and then now I’m being you know through all these different mentors not going like I’ve been on a mission to be the best and so now going and talking to the Andy Elliots and figuring out their self you know how they do sales and their sales process I’m like
(48:24) okay like doesn’t even look like look anything like ours and then going to this other guy’s dealerships and I mean he’s got 37 sales people they’re selling 300 or 255 trailers a month out of their one store is bigger than my entire group I’m like okay like we’re not even playing the same game so I don’t even know what I’m managing what what have I been doing the last two years I I have no idea and so like that’s been really really hard as I’ve I’ve worked so hard
(48:50) to create this like this business that just was a great business and like the guy even told me he’s like dude you’re a lot better at running a business than again and he’s doing 600 million in sales he’s like you’re way better at running a business than I am but what I’m in is I’m really good at selling and creating the revenue and then just you know I’m good at that and so we’ve even talked about you know some sort of merger here and there which you know we’ll see what happens but he’s
(49:17) like I would love your the way you do your processes because I know that you would make me more profitable but I’d help to help you create the revenue and then it would be rising tide raises All Ships and I’m like and he’s like but first you got to take care of how you make your money and you got to get the revenue you got into the processes you got to be in the trenches every single day and you know for a long time like he’s got 17 years on me in the business I thought I was so good at it after two
(49:39) years I’m like let’s go buy more stores and he’s like what are you doing so there’s been a really big a kind of a little bit of a come to Jesus learning curve for me um but I mean I’ve been actually super grateful for it because I’m glad this happened early on on my career I almost spent 20 million bucks back in January on six more stores in Colorado I’m so grateful I didn’t do that because I couldn’t handle that and now shrinking everything back like making sure that the people that we
(50:07) put in place for the future growth is the right positions and they’re in the right seats and it’s the right people doing it because I’ve made some mistakes with thinkings people were in the seats for you know that that could take could handle the situation like my you know I had a CFO that should never been a CFO no matter and that’s that’s cost us million like we just cost us a lot of problems and so there’s a lot of those different things that I’m like okay like now my understanding of business is uh
(50:34) I’ve been in the expense of losing a lot of money but I have learned an incredible amount of you know like business knowledge and how to deal with like it’s and like it sounds kind of sick but I’m having the most fun right now I have had in the last five years in the in probably the worst time of the last five years it sounds like leadership it sounds like you know an entrepreneur that is uh in tune with the reality that uh it starts and ends with us and if we don’t own it we don’t get anywhere right so I appreciate the
(51:08) ownership and self-awareness I mean that’s I think that’s at the core of anybody that’s going to do anything great and you can tell very quickly when people don’t have self-awareness um it happens it happens throughout every space in life but um you know I think you as with most entrepreneurs the sample set that we get to see it in most commonly are staff are employees right you can see who’s actually owning the outcome on your team and who’s not right who who knows that it’s ultimately on
(51:38) them versus placing the blame on somebody else right um what uh you mentioned systems uh and sales not being one that that you had dialed uh but you mentioned this other figure that did 600 million in Revenue big RV boss uh that admired other systems you had in place or operational mindset what are the systems that you feel like you dialed what are the systems that you have that allowed you to run a 100 million dollar RV company what are the ones that were working well and or are working well it kind of sounds silly but a lot of it has
(52:15) to do with our culture and the way we deal with people and the leadership side to our company um you know we have book clubs we we make managers read books um you know I speak on culture all the time we’re a value driven company we have a mission um we’re here for the same reasons we’re you know one of our values is family I mean we are running in the same direction um aligning everybody to what the goal is um you know we’ve done really really good at that we’ve been really really good at um you know if you want to get technical
(52:43) with the dealership’s really good at service um my fixed operations guy um is phenomenal at service he’s you know he’s a Master Certified Technician been in a dealership 25 years and so he really understands service and we one thing that we’ve done really really unique to this individual likes which were the we’re the only one that I know of outside of the actual rvti which is the RV Technical Institute I am an accredited training facility I can actually Master certify my own technicians and I can Proctor my own
(53:17) tests and do all these different so I can actually I have a training facility in Salt Lake City with mock trailers and different systems and I got refrigerators and AC systems and all these different things like that I can actually fully certify my technicians and so one thing we’ve done really well is that every single technician that works for us is at least level one certified I make all my service writers get level one certified and all my general managers get level one certified and all my service managers get level
(53:42) one certified which there’s no other company in the history of the RV industry that has that can say that and so because service is super super important in the RV industry it’s very difficult we don’t make any money in the automotive industry the service department makes they’re 100 absorption which means they make a hundred percent they cover 100 of the cost of running a dealership in service um generally in the in the in the car business um if it’s a new car new car dealership um you know that’s 100 absorption in the RV
(54:14) industry it’s a big expense there’s no absorption it’s a massive expense but you gotta you gotta basically you’re just trying not to lose a ton of money you’re gonna lose money but if you’re trying to lose a ton of money and so we’ve been able to do a really good job at that and actually a couple times we’ve hit 100 absorption which is wild and so um you know we’ve done really really good on the fix fixed operations as well as assistance we have in place in finance um but a lot of it comes to just our
(54:41) culture leadership building the the business side to it the people side to it the right butts in the right seats but then you know it kind of it’s kind of funny that I’m saying this while at the same time saying like whoa I don’t think that we really know what we’re doing in sales um and but that but I can’t really blame my people for that because I have never shown them the way um but I will say in the last month specifically last two and a half weeks with Andy Elliott in the Elliott group
(55:07) we flipped upside down and we’re we’re actually this is gonna be one of the best months we’ve had all year like I’m putting it out there because we’re grinding we’re doing everything we need to do we’re selling the units we’re delivering the units and we’re gonna get down and dirty and have some fun and we’re going back to war and I’m in the dealerships every single day I’m making the phone calls to the customer I’m having a good time I’m having a lot of
(55:26) fun and so yeah not that that’s the system but we’re getting back to to Our Roots and how we do things yeah I mean it might not be a system yet but I I like I I really believe that the the path to the fastest path to getting good systems in place is to have an environment where you’re enjoying the process if you’re not enjoying the process and just [ __ ] pushing a boulder up a hill all day dude it’s just going to take you longer to execute it than if you like the process and you’re being pulled through it right that’s my
(56:01) belief in general and by the way that doesn’t mean that I enjoy every day it doesn’t mean that I’m not pushing a [ __ ] boulder up the hill all the time right because I will grind it out but if I can figure out a path where I’m enjoying it I’m gonna do better I don’t do it enough but I’m gonna do better 100 and I think it’s like we uh you know getting back we’ve been in I mean obviously this Summer’s been tough right but it’s been better for my mindset being closer to
(56:32) the problems and closer to the people and closer to everything and having like the confidence that’d be like oh we actually can get through that like oh like okay like now I know the problems like I’m very like before you know I’m trying to game all these Regional people and these presidents CEO and all these different people and like they’re relaying the information to me and I’m trying to coach them and trying to figure it out but now I’m like okay get out of my way I’m going I’m going in
(56:55) and I’m like wow I know my path forward now before it’s like are we gonna make it are we not going to make it every single day I don’t really know what are the problems what so now I spent the last like even like on a few dealerships this last weekend I mean even my wife helped me and she I was like we I put everything up on the big screen TV and you know in our living room and I’m having these spreadsheets and she’s calling out numbers for me and I’m like that’s our problem so just in the last
(57:20) couple of days now I’m going on a tour to all the dealership saying here like here’s our major problem we have and it happens to be in the used inventory section of the everything like this this is this is a major problem so like now I’m fixing those but it’s from bad you know it’s from me telling someone else and playing the telephone game that that never got you know really relayed 100 which now that’s on me and again I can’t believe like some people listen it’s been like oh yeah like you’re an idiot I
(57:45) can’t believe you didn’t you know see that but I’m trying to run nine dealerships in three different states from you know Missouri Utah and Oregon trying to game plan like all these different things I got a lot of money and it’s like my mind was not there but now being able to shed everything and all that craziness of the travel and all that stuff with going all these other states and just focus on Utah um you know still focusing on Oregon because we don’t close with Marcus until the first week of October but it’s like
(58:10) it’s changed the game and like now everybody’s bummed they’re like well now in Oregon like they’re killing it like they’re making money like now everybody’s like man I wish we weren’t getting sold I’m like I can’t back out now but yeah we probably could have kept you guys and been been been okay but you know it’s a big learning experience and you know it’s been cool because now like I’ve created this this relationship with a lot of my stores that they’ve never
(58:32) gotten even some of them never had to meet me got to meet me because I never really visited the stores and so now it’s like everybody just seems like they’re putting in that much more effort um and just you know doing their thing and it’s going to be fun to watch what we do well let’s talk about culture for a minute because uh you attribute that to being at the core of things running smoothly or the operational systems that are running smoothly that you’re enjoying how much is nature versus
(59:02) nurture how much do you rely on hiring the right people to build the culture versus the things that you do inside the company you know that’s a great question um it’s important so what I try to do is I really try to get to know people before I ever hire them really as people because I can’t really teach people the intangible things what I call the intangible things of like how to treat people be nice tones like yelling like how they really are as like a wired person now I have a lot of like personality tests and management style
(59:31) tests that we have created over time with some of my mentors in the form of you know Michael Dr Michael O’Connor and Lee Quinn and David Spader but which are you know 46 page 46 to 50 page reports on energy and personalities and all kinds of cool stuff so I really try to do that before I ever hire them to really know where they are and you’d be surprised how many people I can see their energy index when they take these if they’re positive naturally positive naturally and negative in favorable situations and unfavorable situations it
(1:00:00) all pulls out on the on the report it’s pretty interesting so that I can kind of know who I’m interviewing who I’m hiring and different things like that um but so I really find that but then making sure that they really fit the role is very very important but then but then setting them up for success and teaching them like you called nurture them and teaching them you know how to do things but you know we have the saying either coach them up or coach them out so you got to coach them up make sure
(1:00:25) that they’re doing something then you got to either you know kind of Coach them how you either find someone else somewhere on the company or we redeploy them out in the workforce because it’s just not working and so we have to make sure that that historically we’ve done a really bad job at that where we’ve identified issues we’ve identified personality issues maybe it’s a lack of capabilities or motivation whatever you want to want to want to call it but quite often it’s a capability or you
(1:00:48) know issue and like hey this person’s just not cutting it like you know maybe they’re in the accounting office and then like they just really don’t know anything about accounting like we really need some All-Stars in these certain places and then that’s all you know that’s I’ll say is from experience I used to think that I could sum a lot of like work experience didn’t matter or maybe even some degrees didn’t matter but trust me if if I say a degree or experience matters an accounting degree
(1:01:13) or having someone that hold you know can control your money like my CF my new CFO as a CPA and he was an auditor for 12 years um for Deloitte big big auditing firm and he was a senior partner like he was you know he’s dialed in he still has a CPA license like that has changed the game for us so I will say that but making sure that they you know in in different positions and and constantly scoring them we have a score system of L1 through L5 L1 is very focused managers they’re brand new L5 is basically you’re a cheerleader they know
(1:01:45) what they’re doing and so we’re constantly scoring our teams to make sure where they’re at in their their job description or how we view what they should be doing in their job again it kind of sounds silly because of sales but at the end of the day I was scoring in what I thought was right now I’m like wow like we are not even you know we’re we’re all kind of l2s and l3s in the form of sales which we’re going to get ourselves the l4s and l5s but like but just knowing what that Playbook is you
(1:02:11) know about your people is very very important because you got to know you know who your team is and how they’re operating and what they’re good at what they’re bad at how their personality is or manage how they like to be managed how they like to manage other people um you know we work it through the system can you not sales but can you give me one role and tell me what the criteria is for that rating system of L1 to L5 uh you know accounting offices my my accounting office has got to be l5s they gotta I don’t need to babysit
(1:02:42) them I can’t go through every invoice I mean I looked the other day I mean just in one like what are the specific criteria that makes somebody an L5 versus an L1 or an L3 so basically so most people like you’re obviously you’re working your way up the ladder and L5 would mean that they’re doing everything on time their month end is good they don’t need babysitting they don’t need hand holding everything is dialed in which in the art we like we have certain month-end closing processes
(1:03:06) um whether it’s you know either an AP clerk an AR clerk a titling Clerk or maybe your office manager we have different kind of job descriptions and what those look like um but you say you’re you know your AP making sure all your AP is you know one you know someone’s gotta wreck the bank every day you know do the bank wreck every single day make sure that styled and make sure our cash we know what our cash is that’s by a certain time you know my CFO requires it at 10 am every single day so we can make it you
(1:03:33) know we know where our cash is every single day you got to make sure that AP is dialed in we got to make sure that AR is dialed in like we have a certain process where things aren’t getting old you know if they’re scoring good and all that I would say that they’re enough and I tell them hey you’re an L5 we’re gonna start managing like an L5 but if things start slipping we’re going to go back and then if we keep going back and forth all the time then we’re going to have to have it you know a different
(1:03:57) conversation because it’s not working out like you can’t keep sliding backwards and so you know for someone to say that L5 you know they’re getting everything done perfectly on time if you know if they’re going sliding down the scale it’s a k and an L1 you’re going to focus manage and maybe they jump super quick as they have experience right so we’re going okay well you don’t really need me every single day maybe an L2 is more check-in points maybe a couple times a day maybe an L3 we’re kind of
(1:04:20) figuring out that’s like that transition point of whether they’re going to work or not going to work so if they advance to an L4 then okay we’re gonna you know keep progressing but if they’re kind of teeter-tuttering on L2 and L3 then we’re probably going to make a position change because it’s just not working out they’re not progressing up the ladder and so really the L3 is that pivotal point of going back and forth and then the l4s and fives like I said you’re more of a cheerleader but it just goes we have job
(1:04:44) descriptions and kpis and you know of what they key performance indicators of how they should be performing and I have actually time management stipulations of what their bulk of their time every single day needs to be broken out in percentages of what they should be doing every single day so we kind of it’s a lot like I don’t know if that’s what you know when you’re asking but it’s a lot that goes into it but we really just kind of make a coaching play decision and then figure out what we’re
(1:05:09) doing and then if we’re having issues in the department we go really focus in the department figure out is it a cape motivation thing is it a capabilities thing if we set them up for success with the right kpis you know what’s going on like we really try to figure out the situation that’s what’s happening with that and you know it could be uh you know managers are managing them right and then we look at the leadership like there’s a lot that goes into it that happens pretty quickly though it’s not we don’t investigate for
(1:05:35) months we you know it takes a couple days and we can generally figure out what’s what we got going on and how are you tracking those things I have forms yep so I have forms for everything I got spreadsheets and forms and different things of what their kpis I mean I literally give it to them okay this is what a office manager is supposed to do in your time management all these different things and you know making sure that they they have it and I have it and then you can kind of tell you know if they’re not getting the bank
(1:05:59) wreck done by a certain time it’s like hey what’s going on what are you spending your time on during the morning that you can’t get this done because you should be able to get this done so obviously not following the kpis with the time management we have for you like you know what’s up so we really have those those dialed in and my CFOs constantly having those meetings specifically you know what they are offices got it awesome so ultimately a lot of what I heard was when you’re looking for people
(1:06:24) personality character values are at the core of it and then you’ve got pretty defined roles responsibilities kpis to measure and that’s sort of the general management framework or hiring and growth framework it seems it seems Probably sounds and seems more complicated than it is and I don’t think it is but I think that you know like you said before like the the values really the values and is the foundation of a person I believe like your person like a lot of personality tests out there like I use disk fully certified in disk I
(1:06:59) probably spent half a million dollars getting certified in disk and reading every book in the world you know tens of thousands of pages on it and psychology behind and all that good stuff and you know a lot of disc personality tests out there will say well if you’re a dominant director or a d personality then you’re this way and that’s only way you can be well I would argue that what if the person has family values and that he would put his family before anybody else well that’s not technically the
(1:07:23) definition of a dominant directive personality right and so it really lays back on your your values and foundation and really your your circumstances of all everything that’s happened in your life you know you can be you know a dominant director but why um you know in favorable situations and unfavorable situations like in unfavorable situations I’m a dominant I go into dominant like fight or die let’s find the answer like boom boom boom boom boom boom in favorable situations I’m an interacting social address so life is a
(1:07:50) party and we’re going to have a good time but I need to know that and I I actually have everybody in my team take these tests and I plot map my team’s test or you know plot map Up is on the on the disk quadrant and so I always say hey this is an unfavorable situation we’re probably going to react this way is that the best way to react I mean we’re it sounds but like once you know it’s easy to say hey that’s probably not the best way to react um because we’re all kind of that dominant personality and unfavorable
(1:08:18) situations that means we’re probably like you know you want to just go punch someone in the face and you know if I have to get through this wall we’re just going to bust it a while make it happen that’s probably then we figure out what the situation needs and we gain Planet more that way instead of reacting we’re responding to the situation and so I get really you know it you know that like I said you know personality is really how you maybe portray your values but there’s always a deeper meaning behind
(1:08:42) all that stuff which you know I I I I I will never pigeonhole someone like I will never say like hey like this position requires this personality because it it there’s just so much that goes into it and you’d be surprised a lot of people enroll so I call it enroll because you know there’s three person I believe there’s three personalities your natural personality and your personality in role of unfavorable situations and in favorable situations so you know it yeah we can it’s a really long topic but you know I I look at all
(1:09:13) that stuff because I like to see how white people do what they do and how they’re going to operate how they’re going to fit in our system and what motivates them um I love it man well I know we’re uh coming up on time here um I appreciate the transparency and talking through kind of the ups and downs and the lessons through it super valuable for other people here myself included um the I guess the before we close um what do you think there are in a I I just I’ve been thinking about this since we uh scheduled
(1:09:51) um what lessons or what practices from the network marketing world are still existing and running in the RV company if any I would say the uh the leaders a couple things so like we do like incentive programs kind of based a lot on network marketing because I think it’s awesome so they do a lot of incentives and different things for people to chase goals um but I would say the biggest thing is the self-development side to what I’ve seen you know when you’re building these teams you know especially the network
(1:10:19) marketing side you know you have no idea who you’re dealing with on the other side of that maybe Zoom call or phone and call or even if you’re going in someone’s living room to present the opportunity and maybe they maybe they see a dream you know in that and like giving someone a dream like it sounds silly because we got you know RV dealerships but we’re like I’m trying to help them fulfill their dream which is kind of crazy but I identify those dreams and identify those goals with people you know I sit down with my
(1:10:45) leaders in network marketing I used to ask their goals and their dreams of what do you want your one year five year tenure like well I ask those same to my employees I need to know if I’m a stepping stone you know are you going to be you know are you working for me for a summer job because you’re going to college then I need to I need to know because I’m going to help you make the most money and have the most fun in college like I’m going to own that stepping stone I’m okay with that because we’re going to be aligned and
(1:11:05) we’re on the same page and and you picked me to be a stepping stone I take kind of Pride and honor in that that you want to work for a company for the summer and we’re going to work through that but a lot of that leadership side to the network marketing side through you know like I said incentives but then like getting those dreams and goals out of people but then also seeing people change um you know our stores are relatively rural we got them like I said 100 miles out of South you know Salt Lake City and
(1:11:30) we got one you know pretty much in Salt Lake City but I’ve seen people change I’ve seen people you know reading books that never would read books I’ve seen people want to be a leader and be like hey I never thought that I could ever be anything but maybe you know the lowest level of like I want to be more I have a dream I have a goal like I wanna I wanna progress and I know but a lot of that is going to be through what you know I believe in self-development and getting those those attributes kind of in line
(1:11:54) but so I’ve taken a lot of that I always joke like network marketing I would say like as a self-development company with a with a comp plan some products right like that’s what I’ve always felt like and I’m trying to bring that into but I but I also feel like you know maybe I took it to maybe I I not that I took it too much of an extreme but it’s like you’re playing the game of like you have all this leadership and all these books but then you need to get results so like I always tell guys like hey I’m basing this this
(1:12:23) is not a citizenship grade I appreciate you know the leadership and the books and everything that everybody’s doing but like we need results so if we’re getting both in the same that’s great but if all you’re doing is saying how many books you’re reading and then I get no results on the other side like you’re not like it’s not a citizenship thing but I appreciate like it’s in in I got sounds weird and maybe someone else has some advice for me but it’s like I kind of got caught in this culture thing
(1:12:46) where everybody’s like oh look at it like I’m reading all these books yeah but like we we’re in the business of selling trailers so if you’re just sitting there like not wanting to do anything and progress selling trailers and like help yourself then I don’t really know what to do with you you’re just kind of you know I don’t know yeah so it’s been kind of a a learning curve for me in that sense so I don’t know if that’s what you’re looking for but that’s just yeah sure
(1:13:08) there there are uh yeah it definitely is and um there are a lot of very very smart academics that are totally broke and right that don’t know the practical application of things that are studied up on Theory but don’t know where the rubber meets the road so you can read as much as you want but you don’t internalize and you don’t really learn unless you apply so I I like the frame of you’ve got there has to be an outcome tied to it yeah I mean Uncle G always says you got to take that Massive Action
(1:13:42) and be obsessed or be average right I mean you can you know you got to be obsessed like but then you got to take that like like I want people to be obsessed on the results of what we’re getting not just be obsessed on you know something that doesn’t produce results so but you have to actually you know apply those have the vehicle be able to do that but then you got to get the results it’s not just oh yeah I’m gonna sit here Lego people like oh I’m just gonna sit here and believe it and I’m
(1:14:04) like yeah but you got to take that Massive Action to for the for always like you know the more action you take a Massive Action the universe will start giving you it attracts that that energy right so you got to take that action got to get out there and do it and it’s crazy like in the last three weeks I feel like I’ve done more in in than I have in probably the last two years and I’ve had the most fun I feel like I have the best relationship with my wife ever because I’m just always I’m because my energy is high
(1:14:32) like how I feel my energy back up as people and like all these so it’s like it’s just been a crazy like learning experience in the last three weeks of kind of practicing what I’ve been preaching for the last five years Jason Haugen I appreciate you carving out time and digging in uh where do you want to uh where do you want to point people if they want to find out more about you uh or your business or your podcast whatever um so Instagram um so just Jason Haugen and that is h-a-u-g-e-n so Jason Hogan on Instagram
(1:15:00) uh my podcast is called culture camp where I interview a bunch of you know entrepreneurs CEOs athletes all kinds of people I also got some solo episodes we talk about all things culture then I got a website called I am jasonhaugen.com love it thank you thank you so much sir until next time love it I hope you enjoyed the episode as much as I enjoyed doing it I need your help there are three places you can find Beyond a million the podcast itself beyondthemillion.
(1:15:26) com which has some cool free resources including a free course and we finally launched the Beyond a million YouTube channel I would love it if you would go there and subscribe and if you don’t want to you still would probably enjoy seeing the visual content check it out youtube.com forward slash at Beyond a million [Music]