Manage episode 225099372 series 1770904
The most popular Quiet Light podcast episode to date was all about buying multiple businesses without going crazy. That episode featured Shakil Prasla, who at the time had already acquired eight businesses. Shakil is back today answering the number one client question we got from that eipsode – how to hire a CEO for your new acquisition? How can you acquire an e-commerce business, do due diligence, get it up and running well, and simultaneously bring someone in to run it?
Shakil has taken on two partners since that episode and together they run ProClick Ventures, a family of e-commerce companies. They now focus mainly on acquiring larger companies and are up to twelve in total. Shakil is here answer our CEO questions and many more while emphasizing the notion of learning to delegate. Doing what he does takes a mindset that focuses on owning multiple companies where HE takes care of the big things while delegating the smaller stuff to others.
- Why Shakil always looks to put a CEO into place when buying a business.
- His techniques for finding good candidates.
- All his CEOs are hired locally or nationally and based in one office location.
- How Shakil manages payscale and bonuses.
- What he looks for in a candidate.
- The salary vs. longer term incentive factors.
- Managing the CEO.
- How Shakil handles a poor performer.
- Factors that stop a CEO from going out on their own after a while.
- How long the longest-tenured CEO has been with Shakil’s group.
- Shakil describes the greatest growth story from his portfolio.
- How he avoids conflicts among CEOs who are using shared back-office resources.
- Shakil’s top listener tips for hiring CEOs.
Joe: Hey Mark how are you doing today?
Mark: I am doing really, really good Joe. I want you to tell everybody what was the most popular episode of the Quiet Light Podcast back in 2018.
Joe: This is just an intro to tell people that you have the majority of the top 10 episodes. I think that’s what that’s all about because the top one is Shakil Prasla. You did the interview with him and you had him back on right?
Mark: Yes that’s right. Yeah, and it really is it’s just me trying to make myself feel good.
Joe: I told stats on the top 20 and we’re even at 50-50 but I don’t think that’s very impressive because I knew you were going to bring that up on this call today. So I was hoping I’d have something much more impressive like you had the majority of the top 20 but I had the 80% of the top 20 but it’s not the case at all.
Mark: But you know you hold the records that count in Quiet Light such as largest deal closed and most transactions so you can rest easy with those.
Joe: Fortunately we’ve got people that are incredible coming up like Walker and Chuck and Brad so those records would be shattered by all three of those in the future someday.
Mark: Yeah well getting back to the podcast here.
Joe: Oh yeah.
Mark: Yeah that’s why we’re here. Shakil … Shakil Prasla, the most popular episode that we’ve recorded in the year and a half that we’ve been doing the Quiet Light podcast now. And the title of that episode was “How To Buy Multiple Businesses Without Going Insane”. If you haven’t listened to it, go back take a listen to it, a really interesting podcast episode. Shakil at that time had bought eight businesses in two years. And unlike RJ who we talked about with 101 Commerce who had a whole system and team built up, Shakil kind of did this and grew this organically, right? He is sort of buying these businesses organically. He started as a buyer … an owner operator and has moved out into a different format. Now in that first podcast, we talked a lot about how is he getting the financing? We talked a little bit about how he was structuring this as well to keep his time just in check because eight businesses is a lot. But we didn’t get into the heart of the matter which is how is he actually going through in managing all these businesses. And the trick to it really at the end of the day, the trick to it is hiring CEO’s. He hires a CEO during the acquisition process. So while he’s in due diligence he goes out and he finds somebody who’s going to run that business. Now the number one question that I’ve gotten from that episode when I’ve talked to people afterwards is not funding questions but where does he find these CEO’s and how does he structure that so that it works. So I decided to have Shakil back and he was super gracious with his time. You know I was really worried about him giving away company secrets and everything, Shakil just like he does just said “Yeah no, no company secrets. I’m happy to share whatever you know … let’s just talk about it and see what we can do to help people”. And that’s what this episode is, how to hire a CEO to run your business.
Joe: That’s great you know we have dozens of folks that have the idea to buy and build a portfolio of online businesses and Shakil has done it. He’s … he did it before most people were talking about it and he’s done it successfully. So I think it’s a great episode to re-air or have somebody back and talk about it in detail; looking forward to listening to this myself.
Mark: Yeah let’s get to it.
Mark: All right so the most popular episode that we’ve had on the Quiet Light Podcast over the past 15 months that we’ve been doing this now I think came when I had a conversation with you Shakil. And we talked about your somewhat insanity of buying multiple businesses. And at the time you have bought eight businesses over two years so we titled the episode “How To Buy Multiple Businesses Without Going Insane”. And we talked about just kind of the high level stuff about what you were doing. One we focused a little bit how you were acquiring these businesses and putting people in place to run them from day one but we also talked and probably spent more time on how your financing these acquisitions as well. Well, again this is by far the most downloaded episode that we’ve had over the Quiet Light Podcast history and the number one question I get when I talk to people about the podcast and your episode comes up is how you’re hiring CEO’s. And I’m going to step back a little bit and just say look since I’ve been an entrepreneur and since I sold my first business now [inaudible 00:05:19.3] years ago I’ve received this question why don’t you just hire somebody to run the business for you and live off the cash flow? And has this phrase trite sort of quaint phrase that we like to just tell people just put somebody in place to run the business. But the devil’s always in the execution right? How do you actually do that? How do you find somebody? How do you pay somebody for that? How do you set up a system that is still working and at the end of the day how do you manage CEO’s? So thanks for coming on board back on here defending your number one title. Maybe you can get number one and number two. And let’s start to delve into some of this. Thanks for coming on. Let’s start with a very easy question last time we talked which was a year ago you had eight companies, what does that count up to now?
Shakil: Yes so now we’re at 12 companies now and still aggressively acquiring companies. Now we’re acquiring the larger deals. So any company that’s making at least half a million dollars in their seller’s discretionary earnings is what we’re aiming for now. So we’re definitely going for the larger companies. When I initially started it was dragging my feet wet, get some little businesses, get the cash flow going and you know long delay I wanted to start acquiring larger companies … yeah and here I am now.
Mark: Yeah so now it’s not just you doing this now right? You do have a few people together or working together oin this, right?
Shakil: Yeah so as you get larger you don’t want to … your risk exposure gets higher and so what I’ve done is I’ve partnered with a few folks in Houston as well that were already in the e-commerce game. And so what that does is things that I lack or I become the bottleneck that’s where my partners excel in. And so it’s been a great sort of marriage in that my weaknesses are their strengths. And so … and the way I met them was they’re part of my community but we’re a part of this Facebook group and we are to make introductions and stuff and [inaudible 00:07:21.6] for Johnny introduce himself saying “Hey I’m in e-commerce”. And so I messaged him and I’m like “Hey I’m in e-commerce too we should meet up”. This is five years ago and we met up for coffee and we brainstormed ideas. I was like yeah I’m acquiring companies do you want to partner up and buy something larger? At this point, I didn’t even know this guy, right? But like yeah, let’s do this. We had no partnership agreements in place; nothing like that. The trust factor was there, the friendship was there and so we’re able to break that off … get that going and so we’ve been able to acquire much larger companies since then.
Mark: That’s awesome. So up to 12, you’re still not insane? Could go I’m insane at some points, right?
Shakil: Oh absolutely I mean a few days ago I have to color my beard as well. It’s getting white. It’s definitely a different mindset you need to have to be able to run multiple companies. You’re not able to do everything for each of the companies, right? So you have to focus on the high level growth goals, two or three things for each company and then that’s it. Everything else … everything small tedious has to do … be done by the rest of the team.
Mark: Right. You know I often look at people like Elon Musk obviously kind of a figurehead, especially for entrepreneurs. And a lot of entrepreneurs look at him and you look at the fact that he’s got how many companies. And it’s not like these companies are doing “small things”. I guess our companies in comparison would be doing a small thing compared to what he’s doing. He’s literally sending people to space digging tunnels under the ground and the other question is how in the world can you possibly do it? But it’s that idea of let’s focus on the big things and only get into the weeds and the details or necessary but it comes down to having those right people in place. Again the number one question I got from Europe the last time was the idea that you’re hiring CEO’s. So let’s start with this first, when you’re looking to acquire a company and I would assume and correct me if I’m wrong, I would assume that you’re always looking to put a CEO in place whenever you’re doing an acquisition. Is that the case?
Shakil: Yeah, absolutely. So the thing is when I buy a business I’m not trying to buy a full time job either. And so the strategy I use is when I make an offer on the business and send them an LOI at that point I know I want to buy the business, so while doing due diligence at the same time I’m looking for a CEO. And the process of that … usually, due diligence if it’s 30 to 45 days or if it’s SBA it’ll take a little longer but during that whole process of due diligence I actually go find a CEO in 20 to 30 days and bring them on at the tail end of due diligence. And so the future CEO gets to kind of see the process, gets to see the operations and everything. And once I acquire the company I keep the old owner on always, whether it’s consulting agreements or whatever at least for two months. And I keep them on for two months the old seller so that way they could transfer all the knowledge to me and the new CEO in place. And what that does is it makes this transition much easier and it empowers or gets the CEO ready to start making their own decisions for the business. So yeah, I do definitely keep the CEO in place always.
Mark: All right so there’s a thousand questions that we can be asked after this and I’m going to … I know people listening are probably asking their own questions. I hope I get to all the ones that you guys have in your heads. Let’s start with I think one of the obvious questions and that is where are you finding these CEO’s? I mean how are you putting these job listings out? Are these all coming through your network? Are you just advertising on job boards? And what are you doing to attract the candidates?
Shakil: Yes so the first thing first because you have to create the role. There has to be a need for the role. It’s hard to find a CEO for a business if it’s only … if the business is only making $100,000 in profit because the CEO … depending on the caliber of the person you’ll at least need to pay him at least $50,000. So half your profits go there so the income has to be there and then he has to be there. Second, you have to create the role right? So with the role, I put on my job listings that hey you’re going to be the CEO of the company. You’re going to be doing everything A to Z. You’re going to be doing vendor management, employee management, hiring and firing, growth goals. And so the type of people that I would look for to apply or would be good candidates are people that have some type of project management background, some type of senior leadership background, some type of digital marketing background; that’s a huge thing. A lot of people will apply with the digital marketing background. And so I guess the perfect type of person that would apply would be a digital marketer that works for an agency that has VA’s that meet them or that has junior assistants that meet them. They have that sort of project management role. They’ve worked with clients to get their goals aligned and they have the marketing experience. So that would be a great candidate to kind of fill that CEO role.
Mark: Where do I look for them?
Shakil: You know it’s … I go to a lot of conferences. I go to a lot of networking events. I talk to a lot of people. Podcasts like these help too and so there’s a lot of people reaching out to me. There’s a lot of people I’m reaching out to through that network to just tell them hey I’m in e-commerce and I’m looking to hire a CEO always but stay in touch. So the network is one thing but there is the job boards that also help, right? So there’s LinkedIn. I think LinkedIn is a great platform, ZipRecruiter which is another great platform. There’s E-commerce Fuel Jobs, so that’s specifically just for e-commerce jobs. That’s a great one as well. And then there’s to also staffing agencies I’ve used where they pretty much will go to different candidates in the Austin or Houston area with people with e-commerce jobs and just message them on LinkedIn saying hey we have a job available would you guys be interested. So there’s multiple ways with all these different ways of kind of attracting. And remember I’m … you’re sort of on a timeline because during this due diligence phase it’s not going to go on forever. As much as I want to have patience to find the right candidate, I don’t want to be in a position where I buy the business and the CEO is not training me or I have to bring another CEO from my other company to come in either. That doesn’t make things efficient and so I have to be aggressive in finding someone but I have to find the right candidate. And so I have to look everywhere and I think those … these places where I talked about networking, job boards, staffing agencies, they’re all going to help you find several candidates. And then the process is next how do you identify the right CEO through all these applicants.
Mark: Right and that’s … I want to get into the process a little bit here. Do you mainly hire a local or are you open to hiring across the country or does it depend?
Shakil: I’m open to hiring across the country. And so part of our listing we also offer a job relocation bonus as well. Because if I’m only going to be looking in Austin and Houston you have a … sort of that limited parameter and limited people apply. That only works with staffing agencies because they have like the local networks but on LinkedIn, ZipRecruiter, E-commerce Fuel Jobs, that’s nationwide. It’s open to anyone. So if you’re in New York City, if the position can be remote we’ll keep it remote but the new strategy we’re going for now is just keeping everything in house; getting everyone to the headquarters. We could brainstorm easily but we would give a relocation bonus to come to our headquarters in Houston.
Mark: So do you have like a … this headquarters in Houston do you have all these CEO’s coming into one office complex?
Shakil: Yup. So we have a nice sized office there where we have our CEO’s. So each CEO has his own little office every Tuesday or Thursday that’s when our weekly meetings are. We will have weekly meetings with the CEO. And then once a month we also have a meeting with all the CEO’s. So if a CEO for one business has a certain strategy they’ll share those. If something’s not working out for another strategy they’ll share those as well. So it’s a nice collaboration of sharing strategies. And then we also have a what I call a shared back office which is our content folks, we have our design team, we have our SEO specialists, we have our ad guys as well too. So we have that shared resources across all the platforms which all the CEO’s and companies are able to utilize as well. And then that’s in the headquarters Houston.
Mark: Awesome. Well, let’s talk a little bit about pay. Because one thing I look at with this is you hear CEO and I think really expensive. It sounds like … you said that you started as low as $50,000 for that are people actually responding to that sort of a pay scale?
Shakil: Yeah look I mean the higher the salary the higher the caliber of folks. This all comes back to how much the company is making. If … you know I’ll give you an example, one of our companies I think when we bought it was making 300,000. I’m not able to afford $150,000 a year person just based off that rate. So it depends on how much the business is making but yeah our CEO’s make anywhere from 50 to well over 6 figures … 50,000 to well over six figures in salary.
Mark: And then do you work on different bonus structures as well? So kind of salary plus a bonus?
Shakil: Yeah so at the end of the day you want to incentivize these folks to treat it like their own business. There’s a reason why they’re not starting their own business. There’s always that thought at the back of my mind that … or even others as why don’t they just go and start their own company? And at the end of the day some folks like a steady income versus business cash flows that are not steady. So there’s that one aspect. To answer your question the incentives, so yeah our CEO’s do have incentives. We do multiple incentives. One of them is besides salary you get an incentive based off the profit of the business. So we used to do topline incentives, top line growth but it wasn’t helping our bottom line either. You could spend a bunch of money on Google AdWords or Facebook and grow the topline but that does not mean you’re growing the bottom line. So our CEO’s have access to Quick Books, our financials. They get to see how the business is doing. So they get a percentage of the profit. That’s one incentive. Number two is we do what it’s called an anniversary bonus. So if they stayed on for one year they get a bonus. If they stayed on for two years they get a bonus you know and 3 years and so on. And the reason for that is you’re spending so much time with these folks to train them, get them on board, learn the business and if they’re really good you don’t want them to walk away. So you kind of give them that little incentive to keep staying on for those anniversary bonuses. And then we also have another bonus where if we sell the company they get part of the sell price as well. So that’s another incentive for them to stay towards the end, right? My goal is not to keep all the companies forever. It is to sell the whole portfolio to a larger buyer.
Mark: Sure so when you’re working out these incentive it sounds like you’re … one of the incentives is just the bottom line profits of the company and I would assume certain growth percentages there. Either just a flat percentage on maybe if you get this much growth. Do you work with CEO’s to identify maybe other metrics that would be important to grow within the company whether that be more efficiency in ad spend or anything else or do you try and keep it just simple that’s for a percent of the profits?
Shakil: Yes so that’s a good question. I would clarify that. They do get profit sharing but it’s based off the growth of the company. And so I’m not trying to … I mean the goal is definitely to grow the company so yeah the higher the business grows, it’s a tiered incentive, right? So the more the business grows the more they make as well. I apologize what was your original question?
Mark: I’m wondering about the different bonus structures that you set up for them. So I know we had Bill D’Allesandro on recently and I know he incentivizes some of his people based off of other metrics as well right? So he’s looking at … maybe it’s with his deeper metrics and I know with like Quiet Light Brokerage one of the metrics that we measure here are conversations. It’s a really simple sort of thing that we look at to say how many conversations are we having because we know it provides the rest of our business. Do you do that with your CEO’s or do you try and keep it just simple and say let’s focus on the profits and you’re going to worry about identifying what’s going to drive those profits.
Shakil: That’s a great question. My only incentive is the bottom line because everything that you do, improving conversions to making ad spend more efficient, to making operations more efficient, to make it more lean, everything adds back to the bottom line and that’s what it comes back to. So part of our weekly meetings is we look at where are we being inefficient? Where are we spending too much? Where is our ads the … return ad spend too high? And we identify those and we lower those because at the end of the day as we’re being more efficient it should lead to a better bottom line and that is extra money going into the CEO’s pocket. So yeah my only incentive is definitely the bottom line.
Mark: When you’re looking to hire a CEO how much emphasis do you put on them being able to understand that business model? And I guess maybe some of that would come from who you are hiring and knowing their background but let’s say that you’re selling right away and ready to fire away and … do you look for somebody who is familiar with the toy industry at all is that really a concern of yours? Are you looking more of just generic e-commerce experience?
Shakil: Man, that’s a great question and that’s the thought process I have too is if I bought a socks company I want to make sure that they’re sort of familiar with the industry. But at the end of the day it’s pretty hard to find those kind of niche focus people. And so that is something, it’s a plus, it’s preferred. If I don’t find that then I’m okay with something else. As long as they understand the model, as long as they understand e-commerce and digital advertising and management, learning the product or the industry is sort of second hand. It becomes … if you have the skill sets of what I just mentioned, learning the product isn’t going to be hard for them. And so yes it’s preferred but not required.
Mark: Okay I’m going to ask you another question and if I’m getting to detailed and I know that you have … you’ve built something that works really well and I don’t want for you to necessarily have to give away the company secrets and everything so feel free to gloss over this if needed. You brought up something that I thought was interesting and something that I want to get into in a little bit here and that’s the idea that why wouldn’t these people just start up a business on their own. And the answer, you answered your own question and you said well they prefer that steady income. They like to have that steady income. So I’m looking at this mix of steady income kind of a base salary plus a bonus structure on top of that if you find that there’s a sweet spot in there of mixing those two things together? I think people inherently like the idea of a bonus. You know it’s out there is like this nice frosting on top of the cake but is there a balance? But obviously, you can’t be 100% performance based because if you were there then these people will be like forget it I’m going to go do it on my own. Do you find there’s a sweet spot there? Is that based off a percentage or is it based off there as just kind of a floor to the amount of money that somebody needs to make before they can really be incentivized and then the business tells the rest of the story as to how the bonus has to work? I don’t know if that question makes any sense or not but…
Shakil: No, it does and again there’s no secrets to anything I do. It’s just a process that we really refined. Whenever we look at a lot of candidates even folks working with us, even people that have applied, it’s definitely the people that have applied … it’s first one it’s hard to be an entrepreneur. You’re now working an eight to five job Monday to Friday, you’re working every single day so having that mindset, first of all, is hard. Not everyone can do it. But people are okay to work for entrepreneurs, learn from them as well. And the different part about me is I don’t expect these guys to work for 10 years for me. My goal is a three year sort of timeline. And you know I’m pretty open with everyone too, it’s just we’re looking to grow aggressively for the next three years and then just sell. And so in the back of their mind, they’re going to try … what they try to do is learn as much as they can in the next three years and stay on and then well hopefully when we sell they also get a bonus there, right? So it’s definitely you have to have the right mindset. It’s hard to be an entrepreneur; it’s hard to work every single day staying up late at night. And then number two it comes back to the pay as well. You know and I look at so many businesses and stuff what if … if you’re getting a lot of traffic from Google what if you get a Google update, your income now is slashed, right? How are you going to pay for your house? How are you going to pay for your family? That’s just the stress that a lot of people do not want to have. They want to have a fixed income, right? And so we offer … our salaries are very competitive especially for our larger companies they are very well compensated. And then the bonus is just the cherry on top. It’s just for them to show us that they are really into this for this growth. And so as they grow the company the valuation of the company goes up. And so I definitely want them to have the upside on that as well. So your salary has to be good enough just in case the incentives are not met, right? They have to not only live off it but be happy with it as well.
Mark: All right cool. Let’s get into managing the employees because this is the second half of this question, managing the CEO’s I should say. This is the second half of the question, one obviously is how do you find these people, how do you compensate these people, you know that upfront sort of process; the back end of it is once you have all these people in place and it sounds like you have multiple now, you have probably 10 or even a dozen CEO’s, managing the CEO’s on a regular basis and that’s not a small feat by any means. You already alluded to it a little bit but let’s go over it again. You do meetings every Tuesday with those that are local and then once a month for everybody all together?
Mark: Okay. And then how often do you check in on their performance of their company? So is that a monthly task? Do you meet with them individually? How does that work?
Shakil: Yeah so we look at the numbers every week actually. And so we use a template where it should show month over month growth, week over week growth, year over year growth, and then it’s broken down by where the revenue is coming from, how much we’re spending on ads, where our conversion rate is, any notable achievements in the last week, any disappointments, any customers that walked away. So we have like this template … this checklist which the CEO’s have to fill out every week and that’s where … that’s what our meeting is based off of.
Mark: Okay so you’d meet with them weekly. Let’s ask the uncomfortable question, the one that is kind of in the back of my head. I was saving it but I’ll ask it now. What do you do with poor performers?
Shakil: Yeah so you know and I am not going to make this sound easy or anything, this is … when you’re … when you buy a company you’re investing your own money and now you’re trusting someone else to run that for you. You’re pretty much making sure that they … make sure that your investments work out, right? That’s really hard to do. As entrepreneurs, we try to hog all the work. And it’s true like you do what you do the best. I do what I’m doing the best. But at the end of the day, you have to let go of that … those tasks, those powers. And when you start to do that you start to be able to delegate these tasks much easier. I haven’t started these businesses from the scratch. It’s easier for me to empower these folks to sort of go do these tasks, right? If it’s someone that’s starting off they’ve been doing everything; customer service, graphic designing, SEO and everything. So it gets a little harder when you … I started something but when you buy something it’s a little easier to let go of those tasks. So does poor performance. Yeah, we’ve had CEO’s that have not done well. You know when you’re interviewing someone you try to build that relationship with them, you try to build that trust with them. And their job is to sell themselves. And they do really good job. Sometimes they’re not trust … you know sometimes not truthful in the experiences and the skill sets that they have that we’re looking for, right? If I’m looking for someone that has … for example an IT background in our custom platform. We had someone that said yeah I have really good experience in it. They checked our backend and they said some really good things that made them sound so experienced and when it came time and we hired them they weren’t able to perform. And so when that happens you have to terminate and move on quickly. And one thing I forgot to mention is my CEO’s … these ranges but we always do a contract basis first. So this is called a trial period where for three months we get to sort of feel each other out to make sure this works for you and for me. We want to make sure that our goals are aligned. And so during that trial period, I’m able to really tell … me and my partners is this going to work out or not. So yeah sometimes they don’t work out and we do fire them and we have to move on to the next person quickly.
Mark: The CEO’s pay … this three months trial period after the three months is their pay guaranteed after that?
Shakil: Yeah, exactly.
Mark: Okay, yeah that makes sense. So that three months is really important for you guys to be able to do that. If you have to let that CEO go after those three months are you looking for a CEO in month two because you know that you’re going to be replacing them?
Shakil: That’s where our stress happens quite often, right? You have this whole plan of transferring knowledge more from the seller to the CEO. You’re going to be dependent on the CEO to running … working 40 hours a week. What happens when there’s no CEO and you have a seven figure revenue business and all these customers, employee, supplier relationships. Who are they supposed to go to? So that’s where one of us partners will have to step in or we … the CEO’s that are with us right now they’re amazing. They’re really good folks and they understand our systems well. So temporarily we may have to kind of make the CEO or one of our other CEO’s come in place of this one just to work a little bit as well while we look for someone else. Or we may reach back up to that old seller and say hey let’s kick in our consulting agreement. We’ll pay you whatever it is to run the company while we look for someone else just because knowing this is during the three month process. We haven’t had anyone leave after the three month process and that’s what makes this kind of system work flawlessly right now.
Mark: So you brought this earlier on, why wouldn’t these people start their own business on their own, and I know I’ve had some … early on in Quiet Light days when I would hire a broker because I’d hire entrepreneurs. These guys look at the deal flow and they’re like you know I want to buy these businesses myself. And I’ve actually had a couple of them back out so that they could pursue other ventures. Have you had CEO’s after they’ve run the business for a little bit whether in a friendly way or maybe not so friendly way either compete or end up leaving?
Shakil: All right so, fortunately, I have not. However, that thought is always in my mind. And you know as much as I want to reason with it saying people want a fixed salary, people want to take on the risk; they can leave. I mean it’s … they can leave at any time. They’ve learnt so much through these acquisitions we’ve done through all the systems we’ve built. They’re very capable of starting their own business. They’re running our business. So yeah that thought is there luckily we haven’t had that happen yet. But if it does happen that’s unfortunate. But we do have a really strong SOP’s in place to where if someone were to leave … it’s me and three other partners so there’s four of us and so we’ll just jump in and run the show. And so that’s what’s helpful with a big organization now is I could pull in a CEO, I could pull in a partner if someone were to leave.
Mark: What about some of the great success stories that you’ve had with your CEO’s? It sounds like … let’s start with how long is the longest tenured CEO been with you? How long have they been with you?
Shakil: So when I first started buying acquisitions Mark I was buying them for cash flows. I was running them myself. I think the first three I was running myself and I think I bought my fourth one 2015 so that’s when I first hired my CEO and he’s still here. So I got into e-commerce five years ago. I hired my first CEO in 2015 so three years.
Mark: All right and out of these are you able to share maybe the greatest success story of growth that you’ve had with one of your properties?
Shakil: Yeah this was actually a company I bought from you guys from Amanda was … it’s called metalpromo.com. We make metal promotional items; coins, pins, metal business cards. It was doing … I think when we bought it it was doing $600,000 in sales and we want … so that was the business we bought in 2015 and I … so that’s 10X now. And when we bought the company it was just the best. It’s dealing with different suppliers. It’s not having any quality assurance in place because these are custom products. It’s made in China shipped directly to the customer; 10 to 12 days lead time. It’s just nothing in it to make sure that everything goes well. So we were able to refine the process, grow the company through a really good SEO and AdWord strategy. And you know at that time we had a team of two 2015 now we’re a team of 20. And so that was a great success story. My … the CEO he’s a partner as well; William. He’s amazing and the unique part about him was we went to MBA program together. He had no e-commerce experience at all. He had a drive for success. And because I knew him and he was a good friend we decided to partner up. It was a little smaller acquisition at that time and man things worked out really well. And he’s running the show. He’s happy running these. We’re both being paid really well from the company. So thank you, Amanda, for that deal but it’s … you know that’s a great success story.
Mark: Yeah I have a theory that you only buy from Texans because you bought multiple businesses from Amanda. In fact, I’m trying to think if you bought any business through us that have not been through Amanda. I think they’ve all been through Amanda.
Shakil: Yeah well … we’re working on one deal right now through one of the other guys so hopefully, that works out.
Mark: Well hopefully. Amanda is one of those ones … I mean she’s a little bit quieter at Quiet Light. She doesn’t come on the podcast and stuff. We’re working to get her on the podcast but man she’s effective. All right one last question, I’ve been taking up a lot of your time now. I mean we’re running a half an hour or so more than half an hour here but you guys have the shared backend office here with content writers and other people doing other sort of work. Do you ever run into conflicts between the CEO’s when it comes to those shared resources? Do you have any way of allotting those resources on the backend?
Shakil: All right so that’s a really good question. Yes, we do run into issues sometimes because when all the companies are on growth kind of mode you want to utilize these certain people more than the others. And so then that resource becomes a bottleneck then we have to go hire someone. But during that process, we do have a trailer board that we use that basically shows what that specific employee is working on. So if it’s a content writer, our content writer can do so much articles a week, right? So we have this calendar as well sort of built in trailer where it shows our December 25th to December 31st they’re going to be working on this property so on and so forth. So it is a sort of a tug of war so to speak there. We do run into a little bit of problems but I always consider that good problems because we need these resources. We’ll just continue hiring until we don’t have a bottleneck.
Mark: Yeah that makes a lot of sense. All right I think I asked all the questions on my list here and I know there’s probably people in the car screaming no you didn’t ask about this question and I apologize for that. So I’m going to have two things here to end. First of all what question didn’t I ask that you think people should know about hiring CEO’s?
Shakil: So I think first thing first is you have to have the correct mindset. As I said before it’s hard to trust someone with your business when it’s worth let’s just say millions of dollars right? And it’s … if they do one small mistake, if they piss off one of our suppliers you sort of cut off that relationship, right? So you’re really trusting this person to do a good job. So definitely deal with … do a good job of trying to find that person. If you have time, use that time. Be patient. If you don’t do a series of tests with them to make sure you hire a good CEO. Do personality tests. Do a bunch of phone calls. If they’re not in your city fly them in, get to know them. Go to casual dinners. If you want to see how that person interacts, how they are off the business as well. So definitely get to know that person really well. And number two as I said the mindset has to be there. You have to be willing to empower these folks. You cannot micromanage anyone if you want to go. When you want multiple companies you cannot focus on the small things. Yes, sometimes the small mistakes will happen when you want to step in and fix it. You’re going to have your step back and let it sort of absorb the situation. You have to let it kind of fix itself. One thing I think I’m really good at is I empower these folks. So I will intentionally … if they have a question on Skype, e-mail, I intentionally will take my time to respond to the majority of these questions so they can go figure it out themselves. They could go ask the supplier, they could go ask our customer service reps, they could go look it up. And it’s because I want … it’s a mindset I want them to have to go figure these things out themselves because one of the main reasons why I have these CEO’s in place is because I want to be able to relax. You know acquire these companies make the money work for me but also just go on vacation and if I’m always just working in the business that kind of defeats the purpose of having a CEO in place.
Mark: Yeah I think that balance … you’ve said that several times, that balance of empowering somebody to run the business and the idea that as entrepreneurs we’re not very good at this. And I can totally relate with that and I bet a lot of people out there who are entrepreneurs can relate to this as well. It’s very very difficult like you said to take that step back and just say this … I’m going to let you do it. I know in the episode with Bill D’Allesandro I listened to him speak and he talks about the comfort that he has knowing that there are people that he’s paying to obsess about one particular aspect of his business day in and day out. And that is something that I think as you scale up and grow up into more businesses you realize that you can’t obsess about every detail about everything that you own. There’s just not enough time to put them into bandwidth into the business. And that’s going to be … I mean that’s some skill that you think that you’ve grown better at or is it something that you think that you’re pretty naturally good at beside of being able to empower and take that step back.
Shakil: It was something I had to sort of self-groom myself into. It’s because my initial few acquisitions I was doing everything myself and it’s … you know it becomes stressful at the end of the day. So I’m pretty obsessed with processes and procedures and SOP’s and stuff. So I have well built out SOP’s in place where yes the CEO has it but it became … you had to train yourself to be able to let go of certain things and so … and I’ve become better at it. I understand as entrepreneurs we want to hog everything up. That’s the thing; it’s a natural thing to do. That’s just why we’re good entrepreneurs but at the same time, you do have to step back and let other people do these tasks so you could focus on the high level goals so you could focus on acquiring bigger customers, bigger companies as well.
Mark: Fascinating. All right so the second that I want to end here is if people have questions that I didn’t ask how can they reach you? And I’m going to just throw in here a quick [inaudible 00:42:40.5] and just let people know look please be respectful of your time. You’re always very generous with your time and I definitely appreciate that. I know you talk at conferences now and you’ve come on our podcast twice. But if you have questions for Shakil then give them straight to the point how can people reach you with any questions that maybe I missed?
Shakil: Yes so just feel free to email me at firstname.lastname@example.org.
Mark: We’ll include that in the show notes. You can go to the Quiet Light Brokerage page and you’ll be able to see that on there. You’re always respectful of your time and I really do … generous of your time I should say. I really do appreciate that very very much. And if somebody is out there who’s been thinking about maybe buying but they hear this and think you know what maybe it’d be better if I actually took that intermediate step and became a CEO. Are you open to hearing from those people?
Shakil: Yeah absolutely. I mean we’re in acquisition mode. We’re always acquiring companies and we’re always looking for talented individuals that could run these companies. So yeah if you … if anyone out there is interested in sort of this role definitely reach out, please.
Mark: Awesome. Well, hopefully, you’ll get a flood of resumes from that and maybe a couple of good candidates as well. Thank you so much for coming back on and talking about this fascinating topic and I have a feeling it’s going to jump towards the top of the charts again.
Shakil: Awesome thanks a lot Mark for having me. See you in a few weeks.
Mark: Yes absolutely. For those that don’t know that’s going to be E-commerce Fuel Live, right?
Mark: All right very good. See you then.
Shakil: All right, take care, Mark. Bye-bye.
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