Harmony of Hustle
Jump into the World of Justin Shoemaker aka "The Waterboy" . From Business, to music, this is the inside look of the world of the hyper-driven and their Harmony of Hustle.
Harmony of Hustle
Episode #26: The Mental War of Business and Sales
What if you could transform your entrepreneurial journey by mastering the emotional and psychological challenges that often stymie business success? On this episode of Harmony of Hustle, we tackle the daunting "valley of fear" that many entrepreneurs encounter due to long feedback loops and a lack of immediate positive reinforcement. Drawing from my own experiences, I compare the fast-paced world of sales with the slower, more uncertain path of entrepreneurship. Learn how to maintain momentum, focus on long-term goals, and the crucial role of self-reliance in generating leads. With insights from door-to-door sales and day trading, I share practical strategies to navigate the ups and downs of building a business.
Shifting gears, we explore the resilience needed to thrive as a business owner. From my transition from a successful sales director to an entrepreneur aiming for control and high standards, I share the lessons learned about endurance and remembering your "why" during tough times. We dissect the different challenges and growth potentials between inventory-based and service-based businesses and dive into funding strategies, weighing the pros and cons of bootstrapping versus seeking venture capital. Plus, learn why passion is pivotal in selecting your business venture, with a personal story of choosing to sell water over solar energy for a more fulfilling and impactful career. Don't miss this episode packed with actionable advice and inspiring stories to guide your entrepreneurial journey.
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What's going on everybody? Welcome to another episode of Harmony of Hustle. Today I want to talk about some stuff that I think can resonate with a lot of entrepreneurs, and you know we all go through these valleys, peaks and valleys, I would say, into entrepreneurship and, honestly, just in sales in general and how to deal with what I'm going to call the entrepreneurship depression or the valley of fear, and I think that emotion can be mischaracterized a lot of times. I don't think you're actually depressed. I just think entrepreneurship has such a long feedback loop of winning and having positive reinforcement that you can go a significantly long time without getting a huge dopamine hit or feeling like all the work that you've been doing is worth it. Now, this is actually significantly different from being like a 1099 salesperson where a lot of times, once you get the hang of sales, your feedback loops actually tend to be a little bit faster. But honestly, even as a salesperson, you have these same peaks and valleys. Is what really churns out salespeople and makes businesses fail is being subject to those ups and downs, and to say that I am immune to that would be obviously ridiculous. Right Like I go through it as well. I say it all the time. Starting a business has been the biggest decrease to my personal income of all time. However, it's been the most rewarding.
Speaker 1:And I think to start off with what I want to talk about is, if you are in that situation where you're kind of going through some of those things is well, how do you combat that? And the way I look at it is what are you actually trying to optimize for? And that's the frame I always try to look at. And, at the end of the day, to me, what I optimize for is freedom and the ability to act autonomously and do things that I would like to do, and the reality is you just can't do that in a W-2 job. I mean, I worked in the federal government for years and you know, to be honest, I worked really hard, you know, in the Navy, yet I left with less money than when I was doing door to door or doing in-home sales. So the ability to make outsized returns in sales is there, um and in and in business, right, I think you level up in life. So you go from being really good at sales to then wanting to maybe start your own business, and that's kind of like the natural trajectory. But, um, to be honest, I made more money as, like the number two guy um in the business and I think that's that's something to look at as well. As you know, you don't have to start the business to make a lot of money or have the freedom Um a lot of times. If you can build a business from the ground up, you will have almost the best of both worlds. But you do have to get momentum on your side and I think that's the key is getting momentum and understanding the long term game as a salesperson.
Speaker 1:The biggest death to a salesperson is looking at the short term right. You always want to look at the macro in sales because sales cycles can be so crazy sometimes where you have like a batch of bad leads, maybe lead flow isn't as good, and you want to be able to weather those storms. So I know a lot of rookie salespeople they always look at like their weekly P&Ls of like this is what I make it this week and it's a good week or a bad week when really want to look on like a monthly scale and a yearly scale. You know what is your yearly target, what, what is your monthly target and then just optimize for that and if you can optimize for that. You, you, you lessen some of the stress of you know those small micro ups and downs that you get, and I also think you know, with sales, whenever things get tough is you have to look at what you're doing.
Speaker 1:It's not a job that really everyone can win at. I mean, do I think everyone can be trained to win at it? Sure, but I think psychologically it's not for everybody. For those that follow me on social or have followed me on social for a while, you'll know that I used to day trade for a while and I still love it. It's something I really want to get back into once the business is fully up and running. But day trading is a great parallel to sales because it's not a hard skill to learn but it's very hard mentally, and sales and entrepreneurship are really the same way it's. It's not a super hard skill to get the hang of but it is a hard mental game. And the truth is you really have to work a lot harder at the beginning to get momentum on your side to really get those outpaced returns.
Speaker 1:And I think a lot of people just get too stuck in the fear side of things of I don't know where my next paycheck is coming from. I don't know where my next lead is coming from, and I think that can really mess with people. And I think the only way to get around that is you have to learn how to generate your own leads, and that's why, in my business, I built this around door to door. Anyone that comes into this organization has to be able to knock doors, and it makes sense why. If you think about it, not only does it help the business, but it also teaches self-reliance to the sales reps. You know company leads can be up and down depending on marketing and things like that. But if you're able to go out and generate your own leads, you'll never have to worry about lead flow. You can also capitalize on leads that you already have.
Speaker 1:So if you run an appointment and it's great and it sells great, knock the neighborhood During the install. Knock the neighborhood. You have all this opportunity. You. You have a sign there that that literally people can see. So you have a lot of dominance in that area. And then if it doesn't sell, if the customer doesn't show up, you know a lot of times for in-home sales we'll drive 30, 40, 50 minutes, maybe an hour, maybe two hours. And if that's happening and your appointment doesn't show, or it's a disqualified lead maybe it's a one-legger, well, and your appointment doesn't show, or it's a disqualified lead, maybe it's a one-legger, well, what are you going to do? Just drive home? You just wasted two hours of gas to get out there. And if you're in a good neighborhood and you know the water's bad, or let's say you're selling solar or roofing you know there's like potential clients in the area, well, why wouldn't you not go and tackle that neighborhood and make something for your drive out there?
Speaker 1:I always try to create as much structure around an unstructured job as you can. And when you're a 1099 salesperson, it's the best path to entrepreneurship because you really are your own boss and you have no real rigid times that you have to work. There's no one holding your hand every day telling you hey, you got to do X, y and Z right. So for a lot of people, that lack of structure can actually be the downfall for them. So you want to create structure in your day as if you're working a nine to five. I always tell people I would work my 1099 job like I was working a nine to five and eventually I was able to get the same returns of the nine to five working only a few hours a day.
Speaker 1:And eventually, when you build up that momentum by just sticking to a schedule and really being dedicated to it and putting in the work and putting in the hours, suddenly your lead flow problems go away. You have such a big pipeline of clientele that you're getting referrals on the regular. You're getting company leads that can sustain you and then you also generate your own leads. So when you have that trifecta you do great Um, but of course there's still going to be ups and downs, right, you're going to have bad clients, you're gonna have people that cancel on you and I think, for salespeople specifically talking to you, the only way to get around that is to never get too high when you're on a really, really good winning streak and never get too low when you're on like a really bad streak. You always just want to stay even keeled. Nothing should ever bother you too much. Everything should just be app, just part of the game. Okay, onto the next one.
Speaker 1:You really got to learn how to foster that mindset, because if you have like a crazy month, you're just going to feel unstoppable and you're going to expect every lead to be great. You're going to expect sales to come to you and then eventually, when they don't, it's going to feel like a huge gut punch. And then you're like, oh my God, am I ever going to get a sale again, or am I ever going to make money ever again? And the truth is you will. But a lot of times when reps get into that valley of death of just not getting sales, that spiral is out of control because they start getting commission breath. They start getting desperate and you never want that.
Speaker 1:So if that's you, the best way to get out of that and it's not the fun way is to just go back to your basics. A lot of times, the reason why reps go into a spiral of death is when you first start out, you are following the script, you are following the framework on what you're supposed to be doing, and then you start getting some momentum. You start closing really well, you start bringing your personality into the sale. You start closing really well, you start bringing your personality into the sale and then, when you get on a really hot streak, you tend to slack off a little bit because it almost feels like these sales are just coming to you very easily and then that lack of structure, that lack of doing the fundamentals is what usually permeates you going into that spiral of death. So the best way to get out of it just go back to the basics. Just go back to Don't get fancy on your pitches, don't get fancy on your sales techniques, and just do the bare basics, do the fundamentals and you think about it fundamentally.
Speaker 1:What makes a professional over a rookie is professionals in any discipline, whether it's sporting, whether it's in sales, is they just do the fundamentals over and over and over again at a very high level. I mean, if you think about the best basketball players in the world, all they do is dribble really well, all they do is shoot their free throws really well, all they do is pass really well. They just do the fundamentals over and over and over again and they do them very, very well. Now, switching over to the business owners a little bit, it can be tough, especially if you're a startup and a bootstrap startup, and you know I have been going through some of my own mental challenges of, you know, not getting getting out of my own valleys of death and not getting too high on my peaks, because we have it just the same, right? Um, now a little bit is outside your control.
Speaker 1:Right, you have a team you're relying on, um, you have people that you, you know, help push your business forward, and the thing is you can never let them see a sweat. As a business owner, right, you have to stay strong. You have to pursue the vision and you have to be, you know, kind of daddy for the team, right, like it's your job to absorb the problems and help your team be successful. So, you know, we tend it can be very lonely at the top. You always hear that it's very lonely at the top and it is because you have to set the. You have to set the tone, you have to set the standard right and you have to hold other people to account. That is your job. And you still have to push the business forward. And so when you're early on, you're doing a lot of different jobs, you're wearing a lot of different hats and, like I said, those feedback loops get longer and longer the higher up you go in the business, and when you're at the top of the business, it is a long feedback loop.
Speaker 1:So the frame that's been helping me out a lot is you know, if this was easy, everyone would do it. I know that sounds cliche, but it's so true. And what has advanced to not? If it was so easy, everyone would do it. It's this is where everyone else has quit and that's why they have failed. And I do truly believe, if you play it out on the long enough time horizon, even if you're only growing by like 3%, which is painfully slow, if you could grow by 3% over the next 50 years, you would have a massive enterprise.
Speaker 1:And the reality is most people just can't survive that long or they get too impatient and the business ends up flatlining. So the reality is a lot of people want to do what you're doing. So if you're a business owner, a lot of people want to do what you're doing. And if you're going through a rough patch which I've gone through so many this is where most people quit. Right, and that's where, if you can just push through that rough patch, you have now surpassed your competition and you're on your way to the next level.
Speaker 1:You know, fundamentally it's it's really not a huge skill game in the business world, it's just a. It's a, it's a will of endurance, like how, how long can you stay in the business world. It's just a. It's a, it's a will of endurance, like how, how long can you stay in the game? And I think oftentimes you forget that there's a moment in your life that made you start the business. You know, I and I. This might this may not be for everybody, but I truly believe that most people don't start businesses just because they tend to do it out of necessity, and for me that was.
Speaker 1:That was totally true. I mean, in my last job I was the number two guy, you know, selling. I was a sales director, I was building teams, selling deals, and I was making more money than I knew what to do with. And I was totally happy in that spot because, guess what? I was not the number one guy. I did not have to take all the responsibility. I didn't have the financial responsibility, I just had to sell deals, manage the team. All I had to worry about was my personal finances. And then I made all of my commission sales. So I was doing really really well.
Speaker 1:But after that thing started falling apart because of situations outside of my control, it became apparent to me that I just fundamentally my soul, could not work for somebody ever again. I needed to control the process. I needed to make sure that the business ran to my standards because I knew, if I ran a business, I would take care of the customer the way they're supposed to be taken care of, I would take care of my people the right way and, fundamentally, I would take care of the business the right way and I would help that business grow. And I would protect my investors right, make sure my investor's capital is protected. And so that was a big, a big shifting point for me.
Speaker 1:And so whenever I go through these moments where I'm just stressed and pissed and feel like there is no way out, there's no way to win, that there's net, that this game isn't going to actually work out, whenever I go through those moments, I just remember I'm like, dude, you asked for this, like this is what you wanted out. Whenever I go through those moments, I just remember I'm like, dude, you asked for this, like this is what you wanted and you chose this industry for a reason. And the reality is, this industry has great long-term potential, and that's kind of how I want to end this podcast is, if you're at that point of like, well, where do I go in a business? Like what, what, what lane should I choose? You have to kind of decide on yourself like what's the end goal, right?
Speaker 1:So for water treatment or any business that has inventory restrictions or is inventory based, it takes much more capital to start the business. Number one it's going to take a lot longer to see a return on your capital because you're going to be very cashflow poor, especially in the early days, because as you grow, you have to invest a lot of that that money, right back into your equipment costs, which leaves a little, a very little, on the table for marketing and bonuses and things like that and recruiting costs and all the things that help drive the business forward. So, as a, if you bootstrap it like I did, your growth curve is going to be infinitely slower. Now, if you can get some VC backing and get some money injected, these type of businesses become much easier, because the truth is a lot of them are financially ran. If you can just inject money into these businesses, you get economies of scale, you get all these other benefits, you're able to show up more in front of clients. So, fundamentally, becomes a much easier business. Now, obviously, if you have to take the VC funding route, though, you actually dilute yourself and you lose enterprise value. So if you're able to bootstrap it, it's the better way to go compared to a straight service business.
Speaker 1:The example I like to use is I have a buddy of mine who he actually started my business, I think three or four months before he started his business, and he runs a digital ad agency and he's crushing it. He's been doing it now for over a year and he's now starting to bring back $9,000 a month in personal income. That's great, right, because he has almost no overhead. So all of his work, all of his labors are straight margin. So why would you want to start that business over, maybe a business like mine? And the answer is long-term enterprise value. So his business can grow and become a big thing. However, because there's low barrier to entry, he has a lot more competition in his space, which means as he grows that business, there's going to be a lot of people in that industry that could try to buy him out. But he won't get bought out at a premium because there's so many agencies to choose from. So he's going to have to really build a massive, massive, massive thing to a very big level to get a good exit down the line.
Speaker 1:Now he could obviously exit that process by doing a lot of M&As. That's a really good thing for these service-based businesses, especially if he has a really good system in place. So you could really build a lot of enterprise value through M&As. But then you also have inherent risk with churn, right? So when you're a service-based business, you have to manage the churn and if you don't have a way to get recurring revenue consistently, when the investors are looking to buy you out or you're looking to sell or do whatever, they want to make sure that one the business can run without you. So you have to build that part up and then they want to make sure that it's growing and that there's a lot of recurring revenue to get a really good evaluation on your exit. So those types of businesses are really good for fast cash and for low overhead and you can make a lot of money a lot very quickly, I would say. But when you reach a certain threshold it's a lot harder to push past that higher threshold, not to say you can't do it.
Speaker 1:Obviously, there's massive agencies out there, right? Look at Gary Vee, great example. He owns a massive agency. So there's always, you know, there's any industry you choose. There's crazy limitless potential. But, like the agency route or the service route is very, very, very, very good.
Speaker 1:Okay, especially if you want to just make money quickly and you want to grow to a certain threshold. I mean you could get to six figures a month very quickly in a service based business with limited overhead. Now you can print out to business like mine with big inventory restrictions, and the big benefit to this is because it's expensive to start. There's a very high barrier of entry which inherently means I'm going to have less competition in my space. Okay, so for water treatment, you know there are a lot of dealers out there, but because of how expensive it is to start and maintain and grow and run my competition, it's going to be harder for my competition to stay in the game, which means I'm only going to really be competing with probably one to two, maybe five you know big dealers in my region. And then as I grow and go to different areas, it'll be the same thing. There'll be a few top tier vendors in that area or dealers in the area that I have to compete with. So the competition's a lot lower, also because of the way the business is structured.
Speaker 1:As this thing grows, I build more and more and more enterprise value. So this thing becomes more of an asset to investors, to VCs, and it makes it more attractive for a big exit or if I want to go public or do an ESOP plan right. So there's a lot more inherent value in the business, which means you can also generally get better talent into the business. So, especially when you're like a startup, it's one of the rare opportunities and if you're in the situation where you're bootstrapping a business, this is the angle you wanna take is you can get really good talent by offering them equity and offering them executive, c-suite positions in the business, because when you're in the startup phase and you have a business like this, you're going to need those roles to be filled, because as you grow, the organizational strain is going to become so much that these high-level roles need to be filled. And so the people that start with you, if they stay with you, they get massive outsized returns as an employee, because now they'll probably get some sort of actual skin in the game on this company and if it grows and it has a big exit, they just made life changing money, whereas in the service-based businesses that's not usually as easy to do, right?
Speaker 1:Um also, um, this business has inherent recurring revenue on it. So the great thing about this business is, even though it's slow to start, we have to do yearly services on a lot of our systems. So as we continue to grow, every client that we grow increases the lifetime value of the business itself. So it becomes literally a game of just how long can I keep the thing running. So that way I get the biggest bang for my buck in the long run. And as an entrepreneur, as the business owner, we see less of a payout day one with this. Right, like I said earlier in the podcast, my paychecks have been the lowest they've ever been in my entire life. Right, but the value of the business is where you're really getting that value from in the long run. And then, because of the way that this business is structured whether it be having salespeople, having an installation team and having an operational component once you fill those roles and you get the right people in place and the business is running, as the entrepreneur you're able to take a bigger step back because you don't have to be as ingrained in the services and you can literally focus on only growth opportunities and organizational tasks, which means that you're going to get more outsized returns for the work that you put in and the business will grow exponentially at that point.
Speaker 1:The difficulty with, obviously, this industry is the upfront investment it takes to start one and then finding the right talent to grow around these types of businesses, especially when you're dealing with in-home sales or home improvement or something that really affects a homeowner in a significant way. You really got to foster high-end talent, otherwise the business will crumble very quickly because you are reliant on good word of mouth, you're reliant on reviews and providing exceptional service. So I would say, to wrap that up and give you the TLDR on it if you want a business that has long enterprise value, that can set you up for a massive exit, having a business that has a high barrier of entry is probably the way to go, because you'll have less competition, you can dominate the market easier and then when you look to sell the business, there's less people for buyers to choose from Okay. However, if you're looking to make money quickly, if you want to have bigger paychecks earlier on but maybe not have as big of an exit, then maybe going just straight service with low inventory is the route to go, because that's totally based just on your ability to deliver the service and the offers that you present, and obviously, millions can be made in both, both directions right. So it's really just what do you want to optimize for?
Speaker 1:And, ultimately, what are you passionate about? I really love water. There's a reason why I chose to sell water instead of solar when I decided to make my move, because I've done both. I just truly believe in water and what it does for us. So all those things come into play whenever you're choosing the business. I mean, at the end of the day, you're gonna be doing it for a long time, so you better love the industry you're in. So, outside of looking at trends and all that stuff, pick an industry you know that you can win in and that you'd know and that you're passionate about, because that's where you'll really get the outsized returns. All right, guys, thanks for listening.