Ep. #966 - Preparing Your Business for the Next Crisis
In today’s episode of Startup Hustle, we’re preparing your business for the next crisis. Matt DeCoursey is here with our returning guest, Rick Jordan. He is the CEO of Reachout Technology and the podcast host of All In with Rick Jordan. Learn how to determine the kind of crisis your business faces and how to create a contingency plan to help you conquer it.
Covered In This Episode
After sharing insights on how to become a great leader, Rick is back on the podcast! This time, he talks to Matt about preparing your business for the next crisis.
Between executives, they agree that handling any issue starts with defining what you’re facing. Next comes the creation of a contingency plan. And the last phase is all about determining what your industry may need in the future.
Sounds insightful, right? Get more takeaways and be prepared through this Startup Hustle episode.
- What’s new with Rick Jordan? (02:54)
- The company’s success story and its journey (04:54)
- Growth amid a pandemic (07:37)
- How to prepare any business for a crisis (11:00)
- The definition of a crisis (16:44)
- Why do you need a contingency plan? (17:25)
- About recession-proof businesses (22:35)
- Having trustworthy teammates good at handling a crisis (24:10)
- On borrowing money to fix a financial business crisis (25:53)
- Having only a week’s worth of funds (28:20)
- Matt’s experience when the pandemic hit (31:41)
- An external crisis can affect internal operations (35:44)
- What to do and what not to do during a crisis (36:59)
- Tips on how to stay in business (39:52)
- Top advice to prepare your business for a crisis (42:19)
- How to determine if your business is ready to sell (44:09)
This comes back to planning for the crisis. You should never run your business like you run your own personal finances.– Rick Jordan
If you’re a B2B business, whatever affects your clients is going to trickle downstream to you. Another thing we did was we actually went through our entire client list and tried to determine who was likely to be really affected by the pandemic.– Matt DeCoursey
The truth is always a good place to start. Recognize where you are right now and then figure out how to use us as an accelerator to move forward, not a place to start cutting and trimming.– Rick Jordan
Rapid expansion can make your life hectic. So let Double free up some of your time with its flexible assistant services. No need to worry about time-consuming tasks like interviewing, matching, onboarding, invoicing, and training anymore. What’s more? You get a 50% discount on your first month. Just use the code HUSTLE22 and sign up now!
Moreover, our other podcast partners also offer other business services. Check them out today.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 00:01
And we’re back! Back for another episode of Startup Hustle. Matt DeCoursey here to have another conversation I’m hoping helps your business grow. So here we are. It’s 2022 at the time of this recording, late in the year. And, you know, some people say the pandemic is over. Some people say we’re still in it. The fact is, we’ve made it through the majority of the crisis, or at least the one that is at hand. And the real question is, in so many entrepreneurs’ minds, how do I prepare my business for the next crisis? That’s exactly what we’re going to talk about today. Before I introduce today’s guest, today’s episode of Startup Hustle is sponsored by Double. Double is a flexible assistant service for busy executives that matches you with an experienced assistant. Double handles all of the upfront, time-consuming items such as interviewing, matching, onboarding, invoicing, and training. Go to withdouble.com today and get 50% off your first month when you sign-up with the promo code HUSTLE22. There’s a link for that in the show notes, which makes it even easier to get to withdouble.com. Joining me today as a return guest is Rick Jordan. And Rick is the CEO of ReachOut Technology. And he’s also a podcast host at The All In Podcast with Rick Jordan. There are links for all that stuff in the show notes straight out of one of my favorite cities in America, Chicago. Welcome back, Rick Jordan.
Rick Jordan 01:24
What’s shaking, man? Dude, it’s good to be here.
Matt DeCoursey 01:26
Yeah, it’s been a minute. And if you notice, I welcomed Rick back. Rick joined us for an episode that aired in August of 2020, which was called Becoming A Leader. What I pointed out to him before we hit record was one of our most popular episodes and still is in the history of Startup Hustle. So we’ve got a lot to live up to, man. We can’t go down. Now we’re only going up the right way to go. Yep. Yeah. So you’ve done a lot of stuff since the last episode. I think it’d probably be good to just start with a little bit about your backstory. We’ll put a link to that old episode in there so you can find it and listen to it after you listen to this one. But you should give us a little background about you and what you’ve done, and maybe even what you’ve done since the last show.
Rick Jordan 02:14
Yeah, we were joking a little bit before we started, right. And that amateur tornado chaser is on my bio. Now my official bullet point is that it’s funny because that is, I guess, if you take it back to the starting point, I forget about that. I mean, I still go out and hunt after these things when they’re around town. I’m not like those guys that you saw on the Discovery Channel show a while back, you know, but I’m a trained advanced storm spotter straight from the National Weather Service. But that was my seven-year-old dream man when I was that young just to be able to do that with meteorology, specifically on severe weather. And you might call me a bit of an extremist, but thank God, I channeled a lot of that into doing good for people rather than just going out and doing some stupid, crazy stuff all the time, which I guess I still do a little bit of that. But other than that, I mean, my original career choice outside of meteorology was just going to be a cop. That’s the first thing that I pursued. I just always had a passion for helping people and protecting people. And then, I was going to join the military in the Marine Corps and the military police. Several reasons that didn’t happen. And I’m glad at this point that it didn’t because it’s just a different path that things ended up going down now into cybersecurity. I’ve been in technology for 20 years and just went public. What’s happened since we last talked and completed our first acquisition, a $6.6 million acquisition, as I’m building this cybersecurity army across the United States and then the world by just bringing a lot of people underneath one umbrella to build these household names. So people actually know who to go to, rather than Google.
Matt DeCoursey 04:00
Well, I mean, that’s kind of a big deal. Your startup went public since last time we talked, I mean, and then, in the checklist of things that we can cut or shut or want to do as entrepreneurs, I think that’s pretty high up on the list, right?
Rick Jordan 04:14
It’s glamorous, in how it sounds, you know, and there’s a lot of, you know, I mean, the shows, love your shirt too bad. I just saw that just a bit ago, right? The show is all about that, right? It’s about the Startup Hustle. And this startup really took like 12 years to get to this point. Cuz I started the company 12 years ago and then decided to take it public in 2019, like November, or December, so when we talked towards the end of fall, I think it was in 2020. Everything right then was just starting to get moving. And I think that’s important to call out because it took about a year to even get to the point where we were even forming this entity to go public after signing the original agreement with the consultants, you know, to put the entire team together with lawyers, with auditors, and with CPAs. The board, I still only had half the board together. When we talked a couple years back, you know, this stuff takes a lot more time and a lot more energy and hustle than what most would think of putting into it. And it’s just, it’s different than what you see, like, if you watch the movie, The Wolf of Wall Street, you know, it’s a lot different than that. And it’s a lot of just consistency and showing up and just pushing through every little thing that comes up. Because when we thought we were going to do it in six months, here, we are literally almost three years later to the date. Right when we first decided that I was going to do this, and now we completed our first acquisition, a good size, one to $6.6 million acquisition.
Matt DeCoursey 05:52
You know, I think a lot of people look at things, you look at your business and say, hey, everyone wants to ring that bell. It’s amazing how many companies don’t go public.
Rick Jordan 06:05
Not there yet, right? We’re not even there yet to ring the bell because we’re public, but we’re not listed. And that’s another step that I learned through this process. Because I went into it. I’m like, I was asked, but it’s like I was being vetted by the consulting company, you know, like, what would you do with the money, if you went public, because I started looking at going public is, when I was saying like, you know, it seems like very glamorous. But if we’re straight up for everybody that’s listening, it’s a financing event. You know, that’s really what going public is. It’s like a milestone in the market to go to the next level to bring in a whole bunch of money. That way, you can accomplish what you’re looking at. That’s what going public really is a financing event. So when you do this, that’s great. But now we’re public because we’re public under Regulation A, which is called a mini IPO. There’s still the big splash or ringing of the bell with our big IPO that’s coming in a couple years. So there are even stages I learned throughout this process.
Matt DeCoursey 06:59
And you’re doing that now to do that amidst a pandemic, I mean, clearly represent some level of preparedness for business in a crisis, because you’re talking about, okay, there’s a lot of failed IPOs meaning like, during the same time, I mean, things can change in an instant. And back. Yeah, I look back at the last couple of years, and you know, my company, Full Scale, and I’m trailing in your vapors, little bit that I have about 125 employees, when we recorded our last episode, we’re up to about 300 now, and had to navigate the waters of COVID during that, which is very turbulent for us. And you talked about being prepared. Were we prepared? Not really. Not many people are, you know, we had. I looked back at the whole path. And you know, at Full Scale, we had 100 employees after a year, which is crazy. I mean, that’s a lot of really fat. It’s a lot. So yeah, right on, you’re gonna create a ball of rubber bands and some issues and stuff like that along the way, you know, we dealt with those. But we got to the point where we were just about to be becoming profitable, which is a great milestone for any business, especially a business like that, which is a little more cash-flow intensive. And, you know, we weren’t a SaaS company. We’re not aiming for that, that crazy multiple and can run, you know, a huge burn rate. Eventually, we had to make money. And then here we were in February 2020. And our biggest client changed their business model and, and entered their contract with us. And then the next month, we got a pandemic. And I got a whole, I mean, I got man, you want to talk about a masterclass and preparing for, you know, a crisis. I mean, I had to do it in real-time, right there. And I learned, you know, I learned a whole lot of stuff about, I think some of it just being you talked about being prepared for a crisis. I think it starts with, like, do you understand the core needs of your business and what you can live with and live without? And how quickly you would fail or disappear should be like a stream of revenue or something just going away. And for us, you know, when I look back at some of it, it was actually a blessing in disguise because we were about to take just kind of a simple million-dollar investment. And, and it ended up falling through because of the pandemic, you know, the stock market went into a Shatter, and there were a whole lot of other problems. And we didn’t end up getting the investment either. And, you know, and so with that, we had to kind of learn that we lost 35% of our revenue and a month and a half. Now, four months later, we have more revenue than we started with. So I think that, you know, we gained in real-time a real idea of what was important at the business, what wasn’t where we could grow. And then, you know, I’ve learned as an entrepreneur that there is often times opportunity and failure, meaning like certain, so we had some clients that just kind of dropped off the cliff, and then there were others that were in a real hurry to speed things up because they had something that might not have been sexy. A couple months before that, now everyone wanted it. So, you know, we had to kind of try to learn how to make the best of it. I mean, what’s what when you think about preparing any business for a crisis? I mean, what are the pillars that hold up? You know, your concepts there?
Rick Jordan 10:20
Yeah, there’s a big one because, I mean, there are two types of crises. There’s that word again, right.
Matt DeCoursey 10:30
If a crisis was, that was the correct thing. I told Rick that I did, and he said he makes up words all the time. I said I do too. And I say them with such confidence and conviction that they immediately enter the dictionary. That’s true. Sure, it is.
Rick Jordan 10:55
When you’re so looking at a crisis, yeah. When you’re looking at a crisis, singular, right, there are two types.
Matt DeCoursey 11:02
And there’s a crisis and crises.
Rick Jordan 11:05
There you go. Yeah, the two types? Okay. Sure. We’ll call those internal and external, whatever crisis and crises, okay. But there’s, there’s, there’s an internal crisis, there’s an external crisis when you’re looking at the preparations you’re talking about. And as you were going through your story, you know, because I had certain ones during that time period for my business, too. And they were not internal. They were external during the pandemic, and it had to do with a bunch of different things. And this is one thing that I’ve always been good at. And I think that when it comes to an external crisis, it’s not even necessarily knowing the core needs of your business. But there’s a bridge to understanding what the core needs of your industry will be from the consumer or from the business. So you’ve got to almost be able to look into the future and see, okay, what are people going to need six months from now, three months from now, three weeks from now? It’s difficult in a crisis to look beyond that, I feel, beyond six months, when, especially when it’s an external crisis, you know, let’s look at what’s what happened with the pandemic, let’s look at any kind of natural disaster like as we’re, you know, recording this today, Hurricane Ian is hitting Florida, you know, and that’s, these are all examples of an external crisis. And one I saw immediately because I’ve been through this in my industry is there will be supply chain constraints. There was not at that point in time. Everybody was shutting down offices, and everyone was going to need some way to remotely work, and for my business, there has to be a secure way to do that. Because there were so many insecure ways people just working off their homes, laptops, and all of this, and then data was just flying out in the wind that doesn’t fly with reach out with what we do, especially when our clients are regulated by things like HIPAA, or, or different types of regulatory bodies in the financial industry. SEC is an example that data just can’t go flying out to the wind. So we immediately started putting together a plan that, because of our clients’ example, we refresh their networks every three years with brand new equipment. It’s part of what we do because you should never be working on old shit. It’s just not predictable. It’s not reliable. You know, does it cost you more for the equipment itself? Of course, it does. But then, long term, the downtime that you save yourself from, it’s just a different story, the breaches, you know, because a credit card fine from PCI is like $600,000 per credit card number. It’s stupid, right? We’ve had clients hit with fines of 11 card numbers for $6.6 million, you know, that we’ve saved them from, so when I look out into the future, is like, what’s my industry going to need, and I’ve seen things like I’m talking natural disasters, like floods in Taiwan, that hindered manufacturing of hard drives, you know, I’ve seen that in this business, as I’ve been in it for 20 years, I’m like, something’s going to happen. We need to anticipate the needs of our clients right now, three weeks, three months, and six months down the road. So just being able to have that foresight is crucial to being able to survive. It also put a lot of revenue on the books for us right away, man, you know, because we were able to do a lot of these things early and generate a lot of revenue, but it was still just meeting our clients’ needs that they didn’t even know that they had. And so a good friend of mine, David Meltzer, the original Jerry Maguire, is right. He’s like, they have to know, like, and trust you. And when you have that relationship with your customer base already, even if it’s a consumer product, it’s a lot easier to handle this type of crisis because they just know that you’re going to be there for them. So even if it’s a product, right, like supplements, I could see that as saying, okay, maybe we need it if we’re going into a pandemic or you can foresee there’s going to be supply chain issues. But, dude, not everybody did, right. Not everybody thought there was going to be something almost nobody did at the beginning of it. We’re just trying to figure out how to stay in business, right people going home, you know, what do we have to do, but it goes beyond that. And at this moment, when a crisis hits, you have to be able to separate yourself from the crisis itself emotionally. That’s the biggest key that I can give anybody, man, because otherwise, you will always stay in the thick of it, and you won’t be able to see past your hand in front of your face to be able to view those three, three weeks, three months in six months out. If that requires you to immediately break away and go on a three-day get away in the middle of a crisis, fucking do it. For real, because if you have to be able to get outside of your own emotions in order to see clearly and handle these things, then you’ll that’s the only way you’ll be able to see the supply chain issues or whatever else, you know, like Hurricane Ian, what’s going to happen? You know, is it going to be groceries? Is it going to be, you know, building supplies? If we need to rebuild things, you know, what are people going to care about the most? But if you’re the one that’s succumbing to all the emotional turmoil, just like everybody else is, that’s when you will fold your business will be done if you cannot separate yourself from the emotions happening in the middle of that external crisis.
Matt DeCoursey 16:06
So I looked up the fact that I shouldn’t have done this earlier. But maybe define this earlier, what’s the definition of crisis and just the simple definition is a time of intense difficulty, trouble or danger and synonyms for that are catastrophe calamity emergency disaster predicament and dilemma. And you know, now as a business owner, I’ve learned that maybe, maybe you’re always in crisis in some regards, if it’s because there’s always something to do better. But we’re talking about extreme versions of, and I think the one thing that I I learned really quickly, when COVID hit and carried on to later was okay, was contingency planning. And, you know, contingency planning is defined, that’s a course of action designed to help an organization respond to an event that may or may not happen. So you talk about like, Okay, so here’s our reality, we get that that’s what’s going on and contingency planning. As you know, Rick was talking about supply chain, supply chain difficulties or something like that. So essentially, with contingency planning, you’re gonna be creating a variety of different plans. And you’re, you’re creating them knowing that most of them are getting thrown in the trash, you know, because you’re and so, you know, some people say, Well, you know, I cross bridges, and when I get to even create, well, that’s the thing. But some people you know, want to work in this real time thing, the thing I realized, looking back at it with contingency planning, is forcing yourself to think about it before it well before it’s time to possibly make that decision leads to a lot better decision making down the road, because you get us get time to ponder it and think about how you would react to it what you do now, I got to flex this in real-time. So the COVID thing really taught me a lot about contingency planning and preparing for that. And then last year in December, a typhoon, so most of my employees are in the Philippines as a reminder, and, and, a super typhoon turned into a hurricane, five, level five hurricane and basically crushed the city where most of my employees are at. Now, by that time I was okay. Are you ever prepared for that? Like fully? No, not really. But we were prepared for it organizationally, because we had gotten pretty good at contingency planning and rolling stuff out. And we were basically now we even had to grow from that, because now we actually have like a disaster relief team. Because here’s the thing in the Philippines, a couple dozen typhoons hit the place every year. And normally, they’re not a real big deal. But you look back at some of this, and it comes down to the most basic things like, Okay, is everybody alive? And that’s like a shitty question to have to ask yourself about people you care about in any situation, but that’s the first thing. So we were able to do things like establish levels of severity and issue aid and relief. You know, we had to relocate six families, we paid for that as a business and like, you know, doing the right thing, but being prepared for that. And now, here’s the thing. So we got, we had to get really good at that too. But we knew that was gonna happen again, you talked about supply chain problems, and that kind of situation. You’re not just like, Hey, can I get microchips? You’re like, can I get water?
Rick Jordan 19:22
Yeah, you know, like, Yeah, I mean, some of it.
Matt DeCoursey 19:24
It’s, I mean, and you know, the thing that was really shitty about that was what happened a week before Christmas. So also was just like, really poor timing, like emotionally and with that, but, but with that being prepared, you know, we were prepared for that. And then the thing is, it’s okay, so it’s fair to say that’s going to happen again, on some level because like I said, you got a really big country that has a history of typhoons occurring. The climate is changing, these storms are getting more severe. What can we do to be prepared for it? It’s not just like, getting through it. So you know, on some levels when you talk about preparation as well, like, Okay, what? Who, who is going to communicate? Who’s in charge? when shit hits the fan? Like what are some of the basic things and like in that particular case, like, we were able to create protocol and future just teams so in this last week, another typhoon came near the Manila side in the Philippines. And just like, automatic kind of wasn’t super severe, it wasn’t, it wasn’t really that big of a deal. We had 18 employees, but we were able to establish quickly with 18 people that this storm passed by, and that’s what’s, what’s the situation so we’re able to verify that they were okay, and do a whole lot of other things. And you know, and get them in a spot where they didn’t have to worry about shit Do I need to call in today? No, you need to take care of your family and your home and stuff like that. We’ll do all the other stuff in the background. And, you know, some of that’s like, you talked about being prepared. I think different businesses have different crises. Now, a couple other things, I think we learned as well, like capital dries up, credit lines can disappear. You look at things like I remember it falls, we have a credit line through cabbage of just one of those things, all the stuff it was just exactly. It was just gone. It was like, and we were sitting there talking because I know, knowing a few things about how these things work. I think I thought that that might occur. And we actually said should we just max out credit lines right now? And if and if things are okay, in two weeks, we’ll just pay it back. And it’s you know, no harm no foul there. But yeah, so like credit lines disappeared, capital dried up, and then you know, the thing is for a business, is it just like? Yeah, so I had always had this discussion of what Okay, when you think of a recession proof business wreck name one like what comes to mind?
Rick Jordan 21:57
A recession proof business, I can only say.
Matt DeCoursey 21:59
The most basic one is actually the haircut. Like people still get their haircut. Yeah, how many haircuts did you get during COVID? Because I saw people like celebrating how long their hair had gotten and all of that. So my point is, it is like that even the most because, dude, it is true.
Rick Jordan 22:19
Like actually even like, during that time when I couldn’t go in, you know, when everything was shut down by the black market haircuts, dude, I shaved all my hair off dude like that was that my wife by the few months and she’s like, you need to either grow this shed out or just like do this yourself.
Matt DeCoursey 22:27
But the point is, is that even traditional business models and some don’t, the point is, don’t think you’re bulletproof. Don’t think about proof because a lot of things trickle down to a lot of other people. And I want to get your opinion on that. But I have got to do a little work first and remind everyone that today’s episode of Startup Hustle is brought to you by Double – the experts in pairing founders with remote executive assistants you can trust. Startup Hustle listeners can go to withdouble.com, use code HUSTLE22, and unlock 50% off your first month. Or you can just click on the link in the show notes too. It’ll take you there real quick. You can also get links for Rick’s podcasts and other things that we may have spoken about during this episode. I think that by doing this, this ad read for Double also kind of reminds me of the importance of habit and crises of having trusted people that can go get shit done. And I formula unfortunately, I had that. Yeah.
Rick Jordan 23:35
Yep. So Amen. I mean, even with the typhoon you mentioned with the Philippines this past week, because we have an officer to it. It was just shut down. It wasn’t as bad with that. But then there were contingencies. Okay, how do we handle the increased workload stateside? And so that was already in place, and I’ve got good people that I do trust, all I had to do is just strictly ask that question, right? It’s just what’s the plan, just just give me bullet points. And then because giving me bullet points just tells me that there is a plan that there is a contingency plan that’s beyond that. I don’t need to know, you know, as a CEO, I don’t need to know exactly what’s going to shake down. But if you’re talking about a start up because you mentioned a couple of things, it’s like having those contingency plans. It’s rough to have those types of contingency plans when you are in the beginning phases of business.
Matt DeCoursey 24:28
Because you are, as you know, you’re even having a decent plan, much less a contingency exactly.
Rick Jordan 24:33
I remember the same thing with cabbage and I did not have that foresight to max out that line. I mean we got cash.
Matt DeCoursey 24:41
Well, we didn’t either we didn’t max it it was sitting there we were like yeah, I honestly would have been probably appreciated borrowing that at some point Yeah, for sure saw that but that operate but yeah, so like we didn’t we didn’t I just was thinking I was like man, this I could see them shutting this off. Which by the way they did for like hundreds have 1000s of people I know then never reopen them. They got my Amex or something. I was like, Sure. Do you know what, by the way? You cabbage, because I wouldn’t have opened my account with you again, because I didn’t really do some of these things, and I get it. Maybe you had to protect your business in that regard. But, you know, it’s like, when these kinds of things happen on no notice or anything like that? I don’t know. It’s just weird.
Rick Jordan 25:25
Yeah, it was the same across the board. Because right away, I mean, if you think of it, because there was cabbage, right, and anything FinTech because that’s higher risk money. Yeah, there’s higher interest rates there. You know, there’s weekly repayments on those things from what I remember. Yep. Cabbage. Yep. You know, it’s just higher risk lending. But then, part of what I’ve been doing for a decade is equipment rental programs that were always underwritten by third parties. And that was another scenario because as I was talking about, like, I could foresee the supply chain, right, that was going to just dry up. So it’s like, cool, let’s do all these things right now. So our customers don’t have to worry about them. Yeah, we’ll enjoy the revenue. But we were renewing early to eat the margin on these deals, just to renew them early, because I knew it was the right thing. And we would buy them out early, which was just cash for us that we would have to put out as rebates to pay off the contracts early, whatever, put some nice revenue on the books for us. But we’re about two months into that. And the primary underwriter that we were working with for years said, You know what, you just wrote $1.5 million worth of business here. And we don’t want to go any further with you. It was like, Are you kidding me? They’re like, No, this is just too much for us to handle right now. And because at the very beginning, it’s almost like business credit and financing, with the exception of cabbage anyways, seemed to like open wide up. I mean, because you had PPP going, you had idle from the government programs, you had all these, you know, private lenders that all of a sudden, like, we’ll help you, you know, we’ll give you cash, you know, it was like a frenzy. And I hope that everybody grabbed as
Matt DeCoursey 27:09
much for a few months, so like March 2020. So I was actually in the Philippines at our office when all that broke out. And it was weird, cuz, you know, because because so much of that was, it was about seven to 10 days, it was like, I was almost like I was in the future compared to the US, but the credit line and that kind of stuff that dried up, like, like, lickety-split, and then the people he stuff came, it came in a little bit of response later. Now, here’s the thing to look at. Okay, so we learned, I think we learned a lot like, you know, I didn’t. I am a vigilant observer of entrepreneurship in general. And like, there’s things that you just didn’t realize, like the average business in the US only has like seven days of cash on hand. Yeah. You want to prepare, you want to prepare for the next crisis, change that right on if you can find a way to change that. And, you know, some of that is like you get back to that. While week does a week, and that was the average business, which is insane.
Rick Jordan 28:18
Well, that’s it. Well, if you look at it, right, because it, I mean, I think back, you know, and I don’t mean to make this sound like this was a long time ago, because prior to 2018, I wasn’t even doing a million dollars a year in revenue. 2018 was when we broke the $7 million threshold, and then they’re sorry, the seven figure threshold, and then it just accelerated exponentially from there. But during that time, you know, because you think of most consumers, right? If you use the phrase, paycheck to paycheck, that’s where it comes from. Because I mean, this comes back to planning for the crisis, right? You should never run your business, like you run your own personal finances. Yeah, because if you’re, if you’re running from paycheck to paycheck, and then you transfer that mindset into a business, your business will get to that point to where a lot of them were, and they just fold because I don’t know a lot of businesses that are in the seven-figure range, that have only a week of cash on hand, only seven days, it’s a lot of businesses that are under that.
Matt DeCoursey 29:16
Or if they are then there’s there’s a credit structure, that in that’s in place and in motion and cyclical in that regard, just meaning like there’s, like, you know, there’s, there’s, there’s like, you know, a lot of product manufacturers have to ship stuff and might not get paid for three, three to six months from Costco or something. And there’s, you know, businesses like C to fo here in Kansas City that help, you know, smooth that, that kind of payment transition out and different stuff like that, but that’s I mean, that’s what that’s what the, you know, what immediately slowed down is, you know, cash flow concerns and we ran into that with our clients and stuff. office. Because keep in mind, if you’re a b2b business, whatever affects you, your clients are going to trickle downstream to you. And Sharon and understanding that that’s also another thing we did is we actually went through our entire client list and tried to determine who was likely to be really affected by the pandemic. So you talk about Well, I mean, I think the most pronounced thing was was now we don’t I mean, we’re, we help people build software at Full Scale. So, you know, we don’t have restaurant clients, but restaurants were like the thing that was devastated right away. And you could still see that I mean, everyone has a local, something that was there now isn’t. And that’s where that TPP and all that stuff came through. That was pretty. We were fast at getting out. But here’s the problem, dude, I have five people in the US and hundreds overseas, they don’t give you a PPP on them. Right. Um, so you know, some of that was a challenge. And then, you know, so I want to talk a little bit about like, you talked about what we were saying, crisis, or crises, or internal or external, X, an external crisis, or is that crises, who knows the external stuff that comes in? Is I mean, you need to think of these as waves that are good. Like they say, you know, the rising tide raises all the boats well, so one of the things that I had to deal with immediately, and I was actually, so I mentioned, I was in the Philippines at the time, and I was supposed to leave on March 13. And this is, march 30, was the same day that they canceled the NBA, and like a bunch of stuff, and like, shit got real in a hurry. And I woke up that day, and I was supposed to talk to my whole company in two different groups that night. So I had like, 6070 people in each one. And I woke up that morning, I just felt sick to my stomach. And I called my wife and I said, I can’t, I was supposed to leave on the 15th. And I said, I can’t come home right now. And she said, why not? And I said, I can’t stand in front of my entire company today. And tell them that I don’t have the answers. But everyone, we’re gonna figure it out and everything will be okay, we’ll do all this. And we’ll do all that and then jump on my jet plane and come back to America. I said, I need to figure some shit out. And I mean, I’m choked up, like, you know, and I care about my people. And I just so like, from a leadership perspective, I ended up delaying my trip, which, then, somehow, I ended up leaving on the last day before they cut off flights, like I kind of got trapped there. It’s kind of risky, but I knew I needed to be there. So I think some of it when you look like, so I was, but I was able to go into those meetings and say, hey, look, I’m here with you. I don’t have the answers. I’ve never done a worldwide pandemic, and neither have you. And neither has anybody because the last time this shit happened, was in like 1910 or whatever. And I know that we’re going to make the best decisions we can, we’re going to figure it out. Now, in the market we were at shortly after that. We had competitive employers, like just slashing people salaries, laying people off whatever we did, none of that. None of them and 88 it, dude. And guess what, that money came out of my pocket, right? Or, or got borrowed or something? But do we management, though, is did we set a foundation of concrete, and brick and mortar and strong granite for later, because as people saw the way the company cared about them, it actually turned into a huge asset for us down the road, because other companies were doing things that we weren’t doing, we found these people were coming in applying to work with us. And that, you know, and they didn’t feel they didn’t feel that the company cared that whoever they were working for cared about them as much or any of that. And maybe that’s true, maybe it’s not, but, you know, the social capital that was established within the company, created a culture and a foundation for some really, really rapid growth. And the time that followed it, and and a lot of that was just about, we’re doing what we would, what we would say was the right thing. But yeah, so I mean, some of the is, is if you have an external crisis, I think it’s fair to assume that you have an internal one that you have to address or prepare for, like, Don’t Don’t be naive and be like, Oh, well, that’s affecting the world, but not us. You know, that’s not a good approach. So, you know, we knew people would be skittish and have a lot of questions and want to know, what’s up and, you know, and by the way, so we had that meeting, and at the time, we’re like, we’re gonna stay the course and literally the next day, we went from that to like, okay, don’t come back to the office.
Rick Jordan 34:50
Matt DeCoursey 34:51
Like, you know, we just didn’t, we didn’t know at that point. Keep in mind that was like, no one knew anything about COVID. At that point, we didn’t know, like, you know, I don’t know, yeah.
Rick Jordan 35:01
Let’s bring it back to present two, because you could say that the same type of external crisis right now can affect things internally because there’s, you know, supply chain is still destabilized. But the biggest thing is that costs are rising rapidly with inflation. And the cost of money is going way up, too. So as I’m looking at acquisitions, it’s like, you know, where things used to be three and 4%. Now, it’s literally two and a half times that, as far as the cost for me to continue to grow in the plan that I had laid down. And it’s more difficult to access cheap cash these days than it was even two years ago. So what do you do in those circumstances? So we’re talking about credit, right? The best thing that I can tell everybody right now, because this becomes, this becomes an internal crisis in a way because everybody that’s with you, everybody that’s on your team right now, is having their own personal costs, raise from groceries to medical bills to any sort of housing that they’re a part of, right. And in the meantime, housing values are dropping, too. So it’s so crazy, because everybody that’s around you, as a leader, their costs are rising right now. And I’m still going to hold true to what I always believe is that in these times of crisis, regardless, it is never a time to pull back. It is always a time to double down. Because like you were saying, with your competitors as they were slashing salaries and cutting jobs. That’s all that’s happening right now. And I’m going on being like, you know, what I want to go on and I want to acquire, I want to hire, I want to sell, this is the time where you can really accelerate some things, it brings a lot of stress upon you for a certain season. But at that point, you go, you come out and you emerge on top of all of your competition, then nobody can catch you. Or at least you’ve got such a huge head start. I know that I’m giving myself now, you know, is the first publicly held managed service provider in the industry ever, the only pure one in the cybersecurity and IT services space, I’m widening the gap right now. And remember, like, it was just my company, a couple million dollars of revenue just a few years ago, when I started this process, didn’t even make the first million dollars in a year until 2018. But when the pandemic happened, I doubled down. And now inflation is happening, I’m doubling down again, I’m finding ways to get this stuff done. Because it’s going to widen the gap before anybody else can catch up to me, that’s a key in any sort of crisis is that it’s not a time to really pull back, it’s a time to evaluate, because you have to recognize where you are right now. Because the truth is the truth and the truth is always a good place to start, recognize where you are right now, and then figure out how to use us as an accelerator to move forward, not a place to start cutting and trimming. Because that’s what everybody else does. I can’t stand that. It’s like, that’s great.
Matt DeCoursey 38:01
That’s that Shockwave. You know, I knew that if we did that, we would send shockwaves through the company and send people looking for something else or whatever. And like, and that’s the thing. And you know, that’s the heart. I think the hard part about the crisis is because you’ve okay, so there was a phrase and, you know, Sequoia Capital has now developed a reputation for sending some pretty good letters out. And they’re known, and they sent one out to all their founders and that one, and you know, there’s some language, and there’s one thing, your goal is to survive and advance, like focus on that. And that’s a tough thing. Because, you know, you don’t want to, you don’t want to, well, I, you don’t want to sacrifice the long term on the altar of the immediate if you don’t, if you can avoid it. And now, that’s, that’s not always possible. In some regards, there were a lot of people, but here’s the bottom line is the business doesn’t survive. We don’t need to have this conversation anymore. It’s game over, that’s it, you got it, it’s game over, and you get to do something else, or go get a job or do whatever. And that’s it. So you know, and that’s and so you, I think that you have to always weigh these implications. And that’s kind of back to that original contingency planning idea, like what could or what happened if we did this, and, or whatever. And you know, and sometimes you can even make these things a community decision. And you might find that you have enough belief and support in your company that they’re willing to make some short-term sacrifices and that and that look, that’s a lot more palatable in that situation than you just saying, that’s what you’re gonna do. Now, you also might find that you don’t have the kind of support you need. But in the end, like these decisions, whether I don’t know you’re gonna if you’re if your goal is to stay in business until later, I think part of that Lana in that preparation is like, what would happen? If so, And if the answer is we get to start over again in six months? Well, I mean, I’m kind of in your boat. I’m going all in. I mean, because if the fuck down the road anyway, what’s the difference, then do it now, you know, like, I’d almost rather go broke faster than take forever to do it. It’s kinda like failing fast. Like we just did just get this over with, just tearing this bandage off. So Alright, once again, today’s episode, Startup Hustle, is brought to you by our friends over at Double. Remote executive assistants can help you with everything from email and calendar organization to expense reporting and database management. Find your perfect assistant today. When you head over to withdouble.com and use the code HUSTLE22 and unlock 50% off of your first month even easier. Just go down and click the link in the show notes. You can go down and learn more about Rick, listen to that last podcast a whole lot of other stuff. And you know, while you’re down there, hit that subscribe button, maybe that fifth star, a whole lot of stuff. You know, Rick, as we wind is, we come to a conclusion, and thanks for joining me again, man. Congrats on all the success. You know, the last episode of Becoming A Leader was one of the most popular in the history of the podcast. And that says a lot was coming up on 4 million downloads now. Now with that, I mean, if we talk about a little freestyle here at the end, I mean, what’s your top advice for a founder when it comes to me, the founder, business owner when it comes to preparing your business for the crisis?
Rick Jordan 41:41
Yeah, don’t lose sight of what you’re doing it for, to begin with. And when I say that, my advice to any founder as a foundational piece, regardless, is always build your business to sell. Even if you’re not going to do that, build your business to sell it. Let’s say you want to make a generation, but that one mindset piece will get it structured to where you have the right amount of cash in the bank, you have the right resources, you have the right contingency plans for somebody to come in and just want to write you a check today for the full amount in cash because you’ve structured this thing. So well. If you do that, you will be able to survive the crisis, especially like we talked about right seven days of cash. If you’re building your business, that’s not exactly if you’re building your business to paycheck. Yeah, right on, dude. Yep. From day one, if you’re building your business to sell it, you’ll be able to weather the crisis a lot better.
Matt DeCoursey 42:36
Yeah, I think I think for me, I think I’m going with the back to that, like, have an understanding of what the core needs are of the business, like what you truly need to keep it alive. Like, in my case, it was not, it was like, Okay, I can’t, I mean, we’re a service provider, and I need great people to provide great service. So, therefore, our biggest asset at our company is our people. And so I got to take care of them first. And I think that it’s important while doing that, especially if it’s a time of like no growth or like, you know, the term bonus is built around having something in excess to split up. And, you know, I didn’t get paid for months, and I was the only one. And I’m okay, I’m totally okay with that. And you know, and with that, but be prepared for that. And yeah, I think I agree with you 100% on the talk about, okay, if your business is ready to quote, sell, that means you have good fundamentals about the business, just kind of back to that core needs, like, could you need a credit line? Like we were just talking about that at Full Scale today? Like, we don’t. I mean, we got, we’re in great condition as a business. And we look at it, we’re like, you know, we don’t have a credit line because we never really needed it. But why don’t we? And the answer is because we get busy, and we don’t go set up some basic shit the way that we do it. And I think the exact thing that I think the overarching theme here is, is no matter how great your business is, or how lucky you are as a person, which I don’t really believe in luck, you’re gonna have another crisis, I mentioned before we hit record that my wife said to me a few months in the pandemic, she’s like, You seem like you’re handling this pretty well as like, it’s just another problem. And I’ve learned that there are two things in a business wreck. This is all I’ve learned. There’s no such thing as software without bugs. And two, there’s no such thing as a business without problems. Amen. Yeah. We’ll just end there. I’ll see you around.
Rick Jordan 44:41
All right, cool. Thanks.