Momentum Podcast: 429

Transitioning Through $3,000,000

by Alex Charfen

Episode Description

Our business is currently in a state of intense growth. We are charging towards a $3,000,000 run rate and making the shift from Operator to Leader on The Billionaire Code. On this episode my wife, Cadey, joins me to discuss how we take care of our business, our team and ourselves when we're experiencing times of massive transition and company growth.

You cannot get used to things being the same. On the ride from 3million to 10million, you have to be able to adapt in a heartbeat if you want to take advantage of all your opportunities.If you're scaling your business, reach out to us. We can share the Cadence system with you that will help you grow your business. The Cadence system will help you now and for the rest of the time you run your business, no matter what size it is. 

Full Audio Transcript

Cadey and I have just come to the realization that our company is going to cross the threshold from operator to leader on the Billionaire Code, going from that one to three million dollar level to the three to ten million dollar level, probably in the next few weeks and month, and we are having some really intense realizations we want to share with you.

I'm Alex Charfen, and this is The Momentum Podcast, made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat because you only lose if you stop and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future and instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world because entrepreneurs are the only source of consistent, positive human evolution and we always will be.

So Cadey and I have been working on our business now since July of 2017, that's when we reset and started the business we're running today. In our first year, we did about $250,000.00 in sales which isn't bad. We were just figuring things out and then we very quickly got to the point where we hit about a two million dollar run rate and what's interesting is we just recently hit about a 2.6, 2.7 million dollar run rate in the last week and we've done that in a time where we pulled all of ... Oh shit. All of our marketing, all of our exposure, anything that we are paying for got pulled because we analyzed our five core functions, which are legion, nurture, conversion, delivery, retention, resell and upsell and then the last couple quarters delivery is where we felt the most challenge. Our clients weren't really feeling it but we knew we would if we tried to scale so we spent some time correcting delivery and now we're going to really press forward but what's interesting is as we've been working on delivery through just the podcast and referrals, our business has grown significantly.

We've been doing ... What I always tell our clients that we're doing as entrepreneurs in growing businesses is we are changing the plane ... Sorry, changing the engines on a plane when it's in mid air, only in most cases, we're changing out the flight crew and adding more and taking on passengers and that's one of the hardest balancing acts in the world and when you go from that one to three million threshold to three to ten, everything changes because you literally go from operating the business to now you must lead and you have to learn, and I think the biggest shift, Cadey and I were just talking about it is you're going to go from doing to leading and it's one of the hardest shifts you make. In fact, Cadey, it's funny how in the past couple months, you've been saying things like, "I'm having trouble letting go," and I think the reason for both of us that we've been having realizations about, "Man, it feels like I'm just in this massive transition," and I think here's what's happened is we're now in the now second six months of the business. We've gone from the $250,000.00 mark to now it looks like we're gonna hit 2.6. Everything is changing again and it really is like this is the shift from operator to leader where you have to let go of so much so fast.

Cadey: You do. You have to let go of a lot so fast and then you have to start ... When I was saying I'm having a hard time letting go, I realize that when I'm holding on too tight, it's because I'm not feeling really comfortable in my own skills. Does that make sense? It's like, "Okay, I've got to get back to where ..." I'm focused on myself as a leader and really instead of talking, asking lots of questions and making sure that I listen and that I hear what the team is saying and I'm listening to where the pain points are and I'm understanding the needs of the business.

Alex Charfen: Yeah, and you know what's interesting is at the same time, when you say leaning into my skills, I think that instinctively, because over the past few weeks, another theme that you've been talking about a lot is self-care. I'm gonna focus way more on self-care. I'm actually doing the self-care. You're scheduling the time for it. You're making that happen and I think one of the things that happens is when you go from operating which is doing everything to leading people, it's an entirely different level of stress because you feel this energetic extension of the organization past where you're going to know and be talking to everyone. You really do have to start getting more present, more aware, taking better care of yourself, right?

Cadey: You do because when you're not doing those things ... We talked about this, you can show up like in a state that's triggered or you seem anxious and we always say that the pace of the leader is the pace of the team. The reflection ... Your team is always going to be a reflection of you, and so if you're taking care of yourself as a primary ... Like I'm making sure that I really prime my week, even more than I always have through our momentum planner, and just through our cadence systems because I know the more that I show up, fully aware and fully able to listen and not be in my head or feel distracted, then the more that we're gonna go forward faster.

Alex Charfen: Yeah, and the other thing that is so much different than this time ... So Cadey and I put a company on the [inaudible] List. We were #21, fastest growing company in the United States, and then we repeated on the 500 list a second year in a row, we were in the top 500 and then the third year we were in the top 5000. We won best place to work in Texas, I think three, four years in a row. We won the Fast 50, fastest growing company in Texas in our size range, and then that organization told us we were the fastest growing company in the history of Texas in that size range so we've ripped the cover off of growth before and we're doing ... This time's faster.

Cadey: This time is a lot faster and it's interesting because I don't feel like it feels as hard?

Alex Charfen: Well, we have the cadence now.

Cadey: We have the cadence and we've also been through this before. Just sitting with you and having that conversation last night that we're about to cross that threshold from operator to leader. It felt so painful the first time, and it doesn't feel as painful, so it was like ... I was like, "Oh," we're having an actual realization about it. Because it doesn't feel as painful. To me, it doesn't.

Alex Charfen: I think that's two things for me. One is I know ... You and I have always used a cadence type system in our businesses, like all the way back to the beginning because I've always done it. I can't keep track of things otherwise. I think that having the cadence has always helped our companies but now that we've gotten to the point where we have productized it and really taught it over and over again, it's the driving force behind our products but it's the driving force behind our company, which is such a cool dynamic to be in, because the more we improve the product, the more we improve the company because we use everything we produce.

Cadey: Absolutely.

Alex Charfen: We don't share with our clients unless we're using it, and because we're getting this feedback on a massive scale now from dozens of companies that are growing by ... I mean, where, we have ... It's not uncommon for people in our group to double the size of their company every year that they're in the group, or at least every ... [inaudible]

Cadey: Three months.

Alex Charfen: Then there's other people who are doubling the company every three to six months and I think that the big difference is that when you create an opportunity, the faster you can get a framework in place, the faster you can grow the business. Michael Dell said, "Show me a framework and a good idea and I'll show you a billion dollar ... " He said, "Show me a successful framework and a good idea, I'll show you a billion dollar company," implying get the framework in place first. Trust a structure first. Have a system first because running a business on how am I feeling today and what have I seen recently and who did I talk to recently, you're not gonna make it. You will run into brick walls over and over again and wonder what's wrong. You have to have a system in place for evaluating what's happening in the business.

Cadey: You do and this is the most important time to make sure that you're getting the right metrics from every vertical in the business, so like your sales, your marketing, your CEO metrics, your minimum monthly spend, all of that is super important because right now, when you're learning to lead a team, you need to be looking at the data, reacting to the data but also hearing their feedback and just getting more clear in each of those verticals.

Alex Charfen: Yeah. Yeah, and there's another thing that happens when you cross over from operator to leader, you have to know that you have people who can start actually taking care of those things for you because if you remain meeting with the person who is selling, meeting with the person who is doing the ads, the marketing, the copyrighting, the designing, you have to start moving people into leadership positions as you ascend or you will not scale. Because you have to go from doing everything when you start a company to doing less and less as you grow and so departments have to start being able to be handed off. When you're building a business from one to three million, one of the things you should be doing on that team is looking and saying, "Am I bringing people on to this team that could eventually lead people on this team?" It's hard because you don't want to go hire leaders right away but you want to bring people in that you can develop as leaders and you want to bring people in who have potential as leaders or maybe people who are in the price range you're looking for who have had the experience of leading because that's a shift you have to make. You can't continue to try and do it all and scale the business. Mathematically it doesn't work.

One of the things we've done in the past week is we've completely shifted our org chart, completely. We realized Cadey was managing six people directly and we have to scale and so we had to move people into leadership positions and move things around and then we also manage ... I realized that I have to take one person direct responsibility right now and because there needs to be a ton of direct input about how we build the systems, how we build the structure, how we build the processes on the back end of the company and then have those people help us lead the company because at this point, when you're going from three to ten million, you have to immediately start figuring out what are the highest and best use you have for the business and you can do nothing else. Because time is limited and what too many entrepreneurs do on the trip from three to ten million is they hold on way too long to everything. I think we did that a little bit, way, way, way back when the first time.

Cadey: Yeah. For sure.

Alex Charfen: I remember all of ... [inaudible] feeling, like it took forever to where like, "Oh, okay, I'm supposed to lead people." I think when we did CDP, when we were on the Inc. 500, we realized it faster but I think we held on way too long still.

Cadey: For sure. I think this time, it's also been ... It's felt a little bit different because I've realized the more tapped out I feel at the end of the week, when I wake up and I feel like I'm going from morning to night without a break, then that's the time where you have to leverage time. Like you have to get more of your time back and I was meeting with six weekly check-ins a week and now with this new structure, we've gotten it down to two.

Alex Charfen: Yeah. Gosh, that's another thing that has been such a game changer is that we've always used a cadence type system, but we've weaponized the sucker. Because in a week we've been able to completely shift the org chart, we understand exactly what [inaudible] need to be updated, responsibilities are shifting and have shifted. The team's been informed, you and I have shifted what we're doing. We have now bought time back on both sides of the business where we needed it and we're shifting from doing to leading and like making abrupt shifts in what we're doing. In most businesses, that's near impossible without breaking people all over the place. in a business where you have the cadence, where people are protected by the process, where there's clear communication, where they understand the outcomes, you can shift stuff like this and is it unsettling? Of course it's unsettling. Don't think that it's not unsettling. That would be magical and there is no such thing as magic in business. There's magical moments, and a lot of times we try and figure out where they came from, but there's no such thing as magic in business that keeps going. Having this process has made it so that the second we realize, "Hey, we are not in the right place as far as what we're doing on a weekly basis," we were able to shift in a speed that we've never been able to in the past.

Cadey: For sure, yeah. I think that also ... When you talked about the org chart and that people don't like change, a lot of people don't like change and when your direct report, who you're directly reporting to causes unease and uncertainty and we used to ... Back in the real estate training company, it was like people would be in tears over stuff like that. Today, I had all of my weekly check-ins after we made the change and there were a couple of people that just had logistics questions or had some feedback, but nobody felt accelerated. Everybody understood, they understood why we needed to do it because I think also entrepreneurs have a habit of making drastic changes and not really explaining the reason why and why it's critical to the success of the company and if you look at the billionaire code you can look at that as this is the trajectory, this is what the level that we're trying to jump to, and this is why we have to make that change. I love it as a reference point and we didn't have that in the real estate company. We've created it for this company and the content.

Alex Charfen: Yeah. There was a point where we had it but we didn't explain it now the way that we did it today, like showing the previous org chart, showing the new org chart, explaining each change, telling everyone why strategically it made more sense and sharing with everyone this is how I ... So I think we'll close with this, this is how I ended that conversation this morning with our team. I said I want everyone to understand this is not the org chart, it's the org chart of the moment, and you just have to know that there's always gonna be an org chart of the moment, so don't ever get used to it being the same because on the ride from three to ten million, you have to be able to move fast and change quickly and adapt in a heartbeat and take advantage of opportunity and that not if it will cause shifts on your org chart, it will absolutely cause tectonic shifts on your org chart, and even if you have an org chart projection plan, if you make it through those thresholds, it's gonna change. I've watched way too many entrepreneurs on this journey, we've done it a bunch of times ourselves and when you go from three to ten, it changes everything.

If you're running a business that is scaling from really about $300,000.00 and up is where our programs start to help you accelerate like crazy, you should reach out to us because we can share the cadence system with yo, which is one communication system, one strategic planning system, and one system for finding the right people, process and projects on a continuous basis that will help you grow your business, and here's the key. You don't have to swap it out when you go from 300,000 to a million or a million to three million or three million to ten million or up because we have businesses, and 30 million to 100, we have businesses right now in the past 18 months that have scaled through those thresholds using this exact process and you can too. Go to, The cadence is the system that you will use now and for the rest of the time you run your business, no matter what size it is because the last thing you want to do when you're flying a plane and changing out passengers and crew and the engines is have to swap out the plane's operating system at the same time. When you install the cadence, it will get you through all the thresholds that you're looking for to build the business you really want.

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