About the Episode :
Rick Jordan gives us a personal touch on his business and some of his family’s business, (A fantastic hot sauce company called Gindo’s) and how in an entrepreneurial business, there is normally a tipping point in where you start to succeed better than before. Learn how Rick has dealt with the hardships of starting a business, and why he wants to help other entrepreneurs today.
Listen to the podcast here:
Watch the episode here:
We’re going to talk about some things that are going to hit you hard, especially if you have started a business, if you’re thinking about starting a business, or if you just have this idea that’s in the back of your head that you think, “What if I could? Where could this take me in life?” That’s what we’re going to talk about today, so what you want to do is you want to share this out with three people. We don’t take promotions, we don’t have sponsorships, we don’t do any of that. The only way that we can help more people is if you share this out, so please right now I’m asking for your help, share this out with three people. We need to help more. The way that we help more is with your help. Thank you.
All right, here’s what was shaking this past weekend. I was at a Fall Festival. This is a huge Fall Festival in Frankfort, Illinois, and there’s several million people that typically pass through this festival every single year. It was a little bit different this year because it was about half the size, meaning about 1 million people, but still a lot of people.Two years ago was the first year that my cousin had a booth there, because they have these amazing artists and booths where you can buy some crafts or gourmet food items, and the food item that they have is Gindo’s Spice of Life, it’s the best freaking hot sauce that you could ever imagine. They started this business in California, with Chris Gindo who my cousin Mary married.
They started this business and they were putting their sauces in distribution and getting them on the shelves before they moved back to the Chicago area, where they all grew up because their dad, my uncle, was just struggling with esophageal cancer, and unfortunately he passed away a few years ago. They were starting this thing out in California and they got into a lot of restaurants, on the shelves with a lot of grocery stores, because it’s such an artisan product. It’s amazing, this is a little bit of a shout out, you’re gonna want to check this out, Gindo’s Spice of Life, because it’s incredible, all the peppers are roasted,Chris even goes out and grabs these peppers, hand picks them from fields still and it’s just incredible and amazing.
Two years ago, they were at the Fall Festival because I told them this was the festival they had to be at. For these artists and products, there’s a lot of hustle that goes into this, you have to go to these local events, you have to get it out there, it’s like word on the street kind of stuff because what does it matter if you don’t have big time marketing dollars. If you see a new energy drink, like a friend of mine Kevin Harrington, the original shark from Shark Tank, he’s been on the board of Celsius energy for the longest time, it was a new energy drink a few years back. It’s like an $8 billion public company now, but there were a lot of startup dollars that were put into it to fund marketing efforts to get the word out that this thing existed so you would see it in stores, and you’d actually be aware of it already because of the commercials, because of the social media ads, all of that. My cousin started with none of this. This is like a typical entrepreneur that is going to rock this world, because I have this idea, or this product and I need to get it out there.
With these types of products, you have to do what you need to do, it’s the hustle, it’s the street work for them, it’s going to these types of events and festivals, farmers markets, that kind of thing to get this sauce out there. In California, they were able to negotiate deals with restaurants after the chef’s tried it because it was just incredible and amazing. It’s a lot of hustle, it is. I walked up, I was filming some content, they’re doing some of my social media, and I saw Chris there but without Mary, my cousin has not been feeling, she actually had a certain type of cancer appear. She’s doing better now thankfully, but I saw him there at least. Last year this festival didn’t happen because of COVID and it hit their business hard because there were no events, there were no festivals, there were no farmers markets to take their sauce to. Their entire distribution revenue stream was cut off because of COVID last year, and in order to pivot on that they really started pushing their online sales, which is absolutely incredible and I’ve heard stories like this that people have shifted. We did the same with ReachOut and with the managed service providers industry. We made some hard shifts a few months before the pandemic hit last year and then ended up doubling our revenue last year, and Chris with Gindo’s Spice of Life, they were up 8%.
8%! They still made more money than the year before. I realize it’s a single digit game but that’s amazing. For this year coming out of this craziness that we’ve had, especially when their entire revenue stream depended on these festivals, these farmers markets, and trying to get restaurant deals and their sauces into restaurants. There were no events, no live events, no farmers markets last year, and restaurants were shut down for the majority of the year too. That could have wiped them out but because they were able to completely focus and shift things online, they started doing lives on social in Gindo’s Spice of Life, on that page and getting people involved, in building a community, and building this cult-like following, which kept buying their sauces, they kept putting themselves physically in front of people, in front of customers going to these farmers markets and live events and festivals. They were now using social media to put themselves in front of their customers and buyers, day in and day out. It was pretty awesome, they were doing things like cheersing and more!
What I really want to talk about today is this. I’m giving you a glimpse in my story, from my cousin’s company on what it actually takes to build a business. I know what it takes to build a business, it’s long hours, it’s that hustle, it’s that figuring things out, it’s that hitting a wall and not accepting that the wall is going to stay there because you have to bust through the wall to see what’s on the other side. This is the straight truth.
If you’re going to start a business, no one can possibly understand the responsibility and the weight that I carry, anybody else carries, that Chris carries, that my cousin carries, if you’re not in that position to where you have to be the one to face the wall and think, “I have to figure out a way around this, or I got to figure out a way to go through this.”
Now that I’ve torn everybody down, this is what it takes. There’s two different types of businesses I’m going to talk about today. One is a lifestyle business, and I’ll explain what this means in a second, and two is what I just call something bigger than yourself. Both of them are right. I want to start this with both of them are right. It just depends on what you want to do.
In my industry, because I’m going to speak about my industry here, I was talking about this last night I was, as I was writing my keynotes for the Kaseya Connect IT event this year in October in Las Vegas. I was writing my keynotes, around this because it’s scale or sell. As I was writing this with one of my coaches, he said, “Man, I love it when you get passionate because it just pours out to you and you can really tell that you care for these people that are in your industry.” I say, “Yes, I do because I’m literally one of them. I was the dude that was not like Chris Gindo or my cousin Mary, who was at the events and festivals, but the equivalent to that was, I was the guy that was crawling under the desks, getting dirty, going into server closets and scratching my arms ripping, my arms open on server chassis, and plugging in switches and going in there and having to sit with people to teach them to not click on this link or you shouldn’t be watching porn at the office, you know that that was me.”
That’s the equivalent of that hustle, being on vacation but never really being on vacation because you always have to stay connected because when you’re the guy, you’re the girl, you’re the one that has to answer the phone. That’s the hustle. I always knew that there was something more. In my industry, and this is typical with most small businesses in my industry, this is data straight from the Small Business Administration, the average salary before the pandemic of the average small business owner was $59,000 a year.
This is a hustle. If you want to ever get to the point where you’re making more than that $59,000 a year. It’s a grind.
When I was talking with Chris, when we were filming at the festival, I did a three minute reel with him and I asked him about something specific. I asked him about a tipping point, because here I am, 12 years later and it is now the year that I’m taking my company public and we’re doing multiple seven digits, pushing eight digits a year in revenue, and we’re going to break $100 million in revenue over the next two years with our acquisitions. There was a tipping point, because ReachOut has been around for 12 years. When I was talking to Chris I found out that he started 12 years ago, I had no idea that it was around the same time, and I just had to ask this question. “Where was your tipping point?” because what I’ve seen with entrepreneurs that don’t give up, and this is important because if you dive into this and you’ll be like, Oh, shoot. It’s a year and a half into this, I’m not even making $59,000 a year, and that’s what it takes. That’s exactly what happened a year and a half into what I was doing. I wasn’t making $59,000 a year. When I started ReachOut,my twins had just been born, so I was trying to feed a family of four on less than $59,000 a year, along with all the diaper expenses and everything else.
Can you even grasp that? Not unless you’ve been there. Today, I’m looking to either motivate you or scare the shit out of you, so that you run towards this and go after your dreams. Whether you run away from it and think it’s not for you, because you don’t think you can put in that kind of effort, you don’t think you can put in that kind of hustle. Daymond John says “I’m an overnight success. It took 10 years to get there.” This is the truth about this, and I’m asking Chris Galindo about his tipping point, he says, “It was probably like six to seven years into it, is when things really started rolling.” I reply with, ”Yes, that was the same with me!” There were things that had to change in me, things that I’m sure had a change in him throughout those years, and it was really about mindset. This is where I’m going to talk about the difference between a lifestyle business and building something bigger than yourself, a lifestyle business after six or seven years I’m going to tell you and same with him, “I was doing pretty well.”
Personally, I was making more than that $59,000 a year, I was able to feed my now family of five, I was able to have nice cars, I was able to have a big house, I was able to run my money the right way so that I could move from property to property to get into a new place. and people were astounded, thinking “You’re spending all this money!” I simply would say, “No, I made smart moves.” I went from a 2500 square foot house to a 5000 square foot house with the same exact mortgage payment down to a penny, because I did it the right way. Now that I’m able to afford these things and buy into a Disney Vacation Club timeshare, and do all these nice things, I’m looking at this thinking this is a great lifestyle. That’s exactly my point, is that it’s a lifestyle. It took almost seven years to even get to that point. In my industry, this is where most people like to stay. They’re doing around a million dollars in revenue, in a services business, and they’re bringing home around $120,000 a year or around that amount. That is a decent living, especially if you have a spouse that also works. That wasn’t the case in my days though, it was me as the sole breadwinner and you’re able to provide a nice life for those you care about or solely yourself. Honestly, that is okay. There is nothing wrong with that, if that’s what you want. I looked at an acquisition, a couple months ago, and this prospect had been making the same amount for the past 10 years, roughly $140,000 in a managed service provider and he was in his early 60s. I’m looking at this, thinking 401K accounts do not put that much away, if you’re looking for a legit retirement. If you’re paying yourself, you might have social security but it’s a little difficult to have any kind of decent investments at only $140,000 a year if you’re looking to get out of your business, but he was looking for this to fund his retirement. His business was only worth $300,000 and he was in his early 60s. Do the math, even if he lives another 20 years, that’s not the level of income that he was accustomed to, because his business was only worth $300,000 and that’s what he ended up selling it for to somebody else. It was too small for me to look at at the time, but he sold it to somebody else for $300,000 when he had been used to making $140,000 a year. What that gave him was two years, maybe two and a half years. It’s because he had this lifestyle business, because he could pay his mortgage, have food, and a decent house, put his kids through college or help with a startup, if they want to get one going. I see that and think, that’s not living. If that’s what you want, that’s okay then, but in my opinion it is not worth the responsibility, the stress, the way you have to support a team and their salaries, if it’s just going to be a lifestyle for you. It’s not worth it to me.
It could be worth it to you because I sat in that position. About six years ago, I could handle this for the next 10 years, but do I want to just handle this? Do I want to just give a decent income to a couple of other people, and make sure that my bills are covered too? As I thought more about this, I had just come out of an extreme weight loss from being overweight. I was starting to get my mindset right by focusing more on me, and improving me the way that I looked the way, they way I felt, the way that I thought, the way that I looked at things around me. My perspective on life, my viewpoints on business, my viewpoints on where I wanted to go and what I wanted to accomplish. As I focused more on myself, is when I started to realize that I had a greater love for other people, and a desire to push past the lifestyle business and move into something that was bigger than me.
This was six years ago. This is the position where most managed service providers stop. I see it all the time. I’m acquiring 50-70 managed services providers over the next two years. This is one reason why I’m doing this. It’s to eliminate fragmentation in the industry. The second reason is most technicians, most people that work for managed service providers, are only only making $60,000 a year. It’s close to a level three engineer. It’s awesome because one, they’re going to be able to come on board and they will get a pay raise right away, because they’re valued, they’re worth more than that. This is because the owner has a lifestyle business and it was this siloed area, thinking this is all they want, but they know they need people to help them accomplish this lifestyle that I have.
Beyond that, they don’t care because this is fine. In the end, It is okay if that’s what you want. As I bring these businesses into the fold, these other managed service providers, I’m excited. It’s going to give a lot of people a good home, now some of the previous owners are good with that lifestyle business and they’re looking to checkout, they’re looking to move on to something else as they move into their sunset year. For me, when I was in that position six years ago, and for Gindo’s Spice of Life, that’s not what they want, Chris is still pushing forward, he’s still modifying his business model. He’s still trying to figure out ways to make this bigger than himself so that he can impact even more people. As the hospitality industry is coming back, as the events are coming back, as the festivals are coming back, these live events are coming back into place to where he can get up and blow this up.
Now he can instantly double his revenue this year, because he not only built this one revenue stream last year to overcome the pandemic and was 8% up in revenue via the previous year, wow he can bring back his previous revenue stream. The live events and festivals are back. and he can now add in restaurants again. He’s going to double his revenue this year and his first thought is not to buy a nice car or buy a nice house, that’s not what he’s doing. He is thinking of reinvesting this and this was the key.
This was the exact key that I did, in order to move past the lifestyle business into something that can be bigger than me. I started thinking, there’s these extra dollars coming in; it’s not going to come to me. I’m going to reinvest these dollars back into the business. I’m going to get better tools, I’m going to become more efficient. I’m going to hire coaches so that they can teach me their ways and how they leveled up a couple notches. I went through several coaches because each one of them had this area that they were specialized in, and they knew something about that one specific thing. I would grab their knowledge, soak it up like a sponge, and then implement that. That took money to do that and that’s where the extra money went.
Then it was another coach, and I would their concept, and then I would implement it and then I would spend more money and apply it to the business, that took money too. It was not going into my pocket but going back into the business. That was six years ago when I made the decision to transition from a lifestyle business into building something better than myself, and decided that I am more than just me. I am those that are around me, I am for more people than just me, and I will build something that will impact millions. Why?
Because I can. It’s not because I needed to, not because I had to, not because I was sitting pretty. It’s because I recognize that this responsibility is the weight that’s on my shoulders. If I’m going to not want to make just $59,000 a year, if I want to actually make more money myself, then I need to build people around me and I need to invest in the business and invest back in them and transition from this idea of a lifestyle business. Which is a grind to even get there but again, that’s where most people will stop. Because, why? It’s comfortable. Comfortability sucks because it’s an illusion of comfort when you have a lifestyle business in my opinion, it’s the illusion of being set up because I see these owners when they’re in their 60s, and they’ve got nothing except a couple $100,000 that’s going to last them through the next 2-5 years, and then what are they going to do? Live off of Social Security and poverty?
One acquisition that I have had was a lifestyle business and now he’s shifting into something else, he wants to be a dentist, he’s shifting careers, he’s also only 39. If that’s what you want to do, go for it because again a lifestyle business is okay, but I’m going to challenge you today that it’s only okay for a finite, limited amount of time. At some point you’re going to have to decide “What I am gonna do. Am I going to transition into caring more about bigger things that take more people than me? Something that is bigger than me, that can actually pull me along because of the momentum I’ve already built or do I just want to sit here and be comfy and then just roll through the next 20 years of my life until eventually I sell?” During that time you might struggle, and at least in my industry right now, I’m predicting that a third of our 142,000 managed service provider friends are going to be gone within the next 2-5 years. Those are going to be the ones that had a lifestyle business because they didn’t evolve or push forward.
They just got comfortable, and now they don’t do what I did in order to transition from a lifestyle business into something bigger than me and reinvest back in the business to provide new services, new technologies, new products, new ways of adding more customers. It takes money and reinvestment to move from a lifestyle business into something that’s bigger than yourself. Who knows when the next milestone is going to be because now I’ve got a philanthropic heart and this is why I’m coming to you today. I hope that you hear this, is that I want you to be more because when I recognize that I am more, that is when I started looking into myself and moving past my own insecurities, moving past my own ideas of what being comfortable and being successful was, and started looking even outside my industry of what other people were doing. In my industry, it’s the majority that will stop that lifestyle business, they’re making a good living, and then they’re done in the managed service provider industry. There’s a consolidation that’s happening right now, that’s been talked about for years.
Now big events are putting on M&A days, like Kaseya, they’re putting on events and pre-day events that are based on mergers and acquisitions. A lot of the ones that have had this lifestyle business, have stayed in that typical spot for a managed service provider making between $500,000-$700,000 a year in revenue, which is where most stagnate because the owner is comfortable, because they can finally pay their bills. They put in their hustle, originally where they were like me, we’re crawling under the desk getting dirty, going into server closets at the beginning, they got to a point where they were comfortable to pay their bills and be feel like “Cool, I’m good, for now.”