Gain Freedom With The "Hands-Off" CEO Blueprint

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1:02Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantz, and my guest today is Mandy Ellison. And he went from$100 ,000 in debt to multimillionaire status by revolutionizing consulting agencies. Through her company, Hands Off CEO, she rescues agency owners from the daily grind, transforming million-dollar agencies into self-sustaining enterprises. She's also the author of a book we're going to talk about today, The Hands-Off CEO, Triple Your Fees and Profitably Scale, an exceptional consulting agency that grows without you. So, Mandy, welcome to the show. Thank you so much for having me again, John.

1:43John. Since you put it in your bio, let's talk about the frustration, perhaps, that you felt in having a previous business that didn't run without you necessarily to kind of leading you to creating what you do for your life's work now. Yeah. So let me tell about that experience. You're saying that led? Yeah. Yeah. Yeah. We want to hear frustration and embarrassment every entrepreneur goes through. Yes. Yes. There was definitely plenty of that. And what it looked like as I was nine months pregnant and I have a four-year-old daughter. My husband was in a demanding graduate medical program. I had moved across the country.

2:18So you're painting a picture of like I had, it was a pretty challenging situation, right? Yeah. Yeah. So at, and my business at the time I was trying to, I was kind of, I was trying to close up shop for me to have maternity leave because it was not set up in a way where it could run without me at all. and that was a frustration just because I had I had managed another company before this I was I was the manager and I was able to get this company to run without me as the manager so I was pretty frustrated that I couldn't do this within my own company and you know weeks before I was about to give birth to my second daughter all the stress of trying to make all these things work on my time frame it it was so stressful and my health was breaking down so you know my I I literally had my arms not being able, I couldn't move them more than just a small amount.

3:08And I had to go and get some treatments. Thankfully, I was able to heal my arms from this, but this was not a good time, right? Just weeks before giving birth to my second daughter. And, you know, I really, we could have used that income in our life. That was like one time we really could have used it. And again, I, anyway, I had to shut the business down. And, but what that, that led me to look at what is actually stopping me from having this. So then I went out and I started talking to other entrepreneurs, you know, after I had my maternity leave, after I took that time and I was, I took some time to slowly start back up to just, I wanted to make sure I got it right this time.

3:45So I started interviewing other people and I started, and I knew that if I could solve the problem for someone else, I could solve it for myself. So I just started helping other people because I knew I could break down the system and figure it out. I could reverse my engineer back into it because I'm pretty good at that. So I knew I'd be able to figure that out. And before I knew it, I started a consulting company. I didn't mean to, but I started a consulting company because people asked me if they wanted to pay me to help them with this. And I started seeing the patterns and the trends for what it takes to be able to take a service business, especially.

4:15Service businesses are very difficult to scale and remove yourself from. So I started seeing the patterns and I helped other people be able to solve this before I was actually able to solve for myself. So a lot of books consulting around this idea of scaling, you know, making a business run without you, it really all come down to like systems and process and operations. And I think you dive a little deeper than maybe, you know, there's even, I've had, you know, Gina Wickman on the show, but you know, EOS and traction. How would you say that your system, which you call scale to freedom, right? Is that right?

4:50Framework. How would you say that you go beyond kind of the typical systems and processes? Right. So EOS and other frameworks, they're great. They're really effective and they can help you bring your company to a level of order. But here's the thing is I talk to CEOs almost on a weekly basis who have implemented all of that and still have a company that's not profitable. They may even say it's profitable. Oh yeah. Well, you know what, we're profitable. But what they don't tell you is that they're not taking anywhere near a market rate salary for what they would get paid somewhere else. So they're actually losing money every year.

5:25If you look at it that way. So the thing is those frameworks, it helps you organize a working and functional business model, but it's not a business model. And it's not a profit model and it's not your pricing model. And it's not the structure for what agreements you create with your team, with your clients. It's not going to give you the positioning in the market. It's not going to tell you who your profits fleet spot client is, who's going to pay you the most. It's going to contain those things, but garbage in, garbage out. So you have to get that right first if you want to have a sustainable company.

6:00So you mentioned something in the very beginning that you were able to manage this company to run without you, but when you, maybe it was your own business, the CEO. And I'm curious if there's a, if there's something like instructive in that idea, right. It's like, as the CEO, you're very married to what it's doing. You're emotionally attached maybe. And in some cases it's hard to step back and give yourself the distance that it requires to properly delegate and let your people do the, you know, the work that they're there to do. Do you think there's something that I guess I'm really talking about mindset, you know, probably is mindset a key role to even start embracing this idea?

6:39Absolutely. And there's two different aspects of it. And I'm glad you brought it up because there is a system and then there's a mindset. And here's the thing is you can build the system all day long, but unless you have a corresponding mindset, then the system is useless and you won't be able to actually use it and you won't be able to let go. So that's one of the things that I've observed too with our clients is that they might get to a point where they have the whole system in place. And they're like, you know, I know I'm supposed to be working on sales right now. I just, I don't, I can't quite let go of this.

7:13And I've even had one of our clients called the hands-off CEO Twitch. They named it that. And, you know, I, and I asked him, you know, Philip, do you have, is this, do you have the system in place or are you, do you feel comfortable to have everything that they need to be able to do this? He's like, yep, I do. And then he's like, okay, I realized it's just a mindset. So at that point we knew that it wasn't the system, it was the mindset. And now it's just looking at what are you committed to? And your vision being bigger than whatever it is that you really want to be doing that gives you that significance.

7:43Yeah. And I think, you know, I run across a lot of business owners that need to, you know, their business is growing. They need to let go of certain things. And a lot of times it's just, they know that. I mean, I don't think anybody has to tell them that they're holding that back, but it's what maybe they feel valuable or they feel, or let's face it, sometimes it's the work they like doing, right? Web designers, a great example. I mean, they love to do the, you know, the work, they'd try to grow a business and scale business. It makes no sense at all, you know, for them to actually be now, you know, doing the design, but that's like, that's where they are passionate.

8:16I mean, how do you get around or, you know, those that like you, on one hand, you can't scale. On the other hand, this is what you're passionate about. How do you get around that kind of dichotomy? Well, I think the first thing is just to recognize what actually do you want. And there's nothing wrong with you going and doing the web design work if that's the kind of company you want, but that's more like a freelancer company. That's not going to give you the wealth. It's not going to give you the freedom. And it's not going to give you some of the things that you would get from a business, but it's a very simple business.

8:45And if you really are passionate about being a web designer and you don't want to learn the skills of managing teams and being a leader and getting all of the other things right for a business, then that might be a good thing for them. But on the other hand, if I may add to that, John, becoming more hands-off, what that allows you to do is pick and choose the kind of projects you want to work on. You get to have autonomy over where your time is spent. Yeah. As long as everything's not on fire, right? So you mentioned that service businesses are particularly hard to scale. Why is that? I think some of the obvious, if I'm selling a$29 product, a lot of people can do that.

9:22A lot of people can produce it, do the work. But what is it unique about service businesses that you think make them feel harder to scale? Well, the origin of it is first and then the structure of it second. So the origin of it is that you were good at something and you start off going out and selling this service because you're good at it. And then you have enough people that are coming to ask you for the service. You start hiring freelancers and then maybe employees. And then And then after a while, you're like, well, there's so many people I'm going to hire a manager. So some companies just grow organically like that.

9:57And they didn't really set out to build that big of a company. So that's one aspect of it that makes it challenging to scale. So what that means is that the value proposition of the business oftentimes is the skill set of the owner. So the clients are coming for the skill set of the owner. And anything less than that, they're feeling like they're getting the short end of the stick. And they're also looking at it from the perspective of, okay, great. Well, now I get a blended hourly rate with their junior level person and I'm paying for a senior level person. And so that's one thing. Then on the flip side, well, I guess it creates a scenario where there's not the profit margins within the business to actually properly remove the CEO.

10:42That's actually the number one thing that keeps the CEO stuck in the day-to-day is because there is not the profit in order to remove yourself from it. Yeah, yeah. You got to make enough money to hire somebody else to do the work or to delegate the work, right? Your website, your domain. I mean, that's real estate that you want to own. If you're an influencer, online creator, blogger, or really anyone who cares about their personal brand, then you need a unique domain. And now you can get your name dot bio, right? John Jantz dot bio, right? Create a bio page to house all your various interests.

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12:53I'm telling you, you're going to love Gusto. Get started today. Right. And then the root cause of that is the pricing structure for how you're operating. And then the root cause of not having enough, not high enough price point to deliver the service well, is that there's not enough value. There's not enough perceived value from the client and the prospect who's buying the services. And there's a root cause of that too. Well, and one of the things, I work with a lot of agencies and consultants as well. And, you know, what we discover a lot of times is that people feel like, well, what I'm selling is my big brain.

13:27you know, and they have to have me to do that. Well, obviously that doesn't scale, right? So where do you fall on? I mean, one of the things we teach people all the time is you've got to create a repeatable system that you can actually teach to other people and doesn't rely on your big brain. So where do you fall on service businesses productizing? I'm a big fan of productizing with a caveat. Oftentimes the way the productizing is done is saying, okay, well, well, here's the problem we have. The CEO is too involved in the day-to-day service. So we're going to solve that problem by, it's a knee-jerk reaction of, well, we'll remove the CEO out of it.

14:05And by doing that, they're like, well, what is left? Well, we'll systematize that. And that's what productization usually looks like. Instead, the way I look at productization, and I would call it a service product perhaps, and you're looking at how do you elevate the service based upon outcomes. And instead of reverse engineering it to remove the CEO, you reverse engineer it from what does it take for us to deliver this outcome? What does it take to deliver? And at first that might mean the CEO is more involved to make sure that you're actually building out a system that delivers the output that the client actually cares about.

14:43Because the client doesn't care about deliverables that are brought to the market as efficiently as possible and as profitably for you. They don't care about your profit. They care about the results and that's why they're paying you. Great add on to that point is, and you can charge a whole lot if you understand the results that they're after and you can deliver those. Then they don't care. It's not how many hours did I buy, right? Now it's like, no, I bought a result. And I think that's a healthy way for people to think about pricing, isn't it? 100%, right? But to your point, you have to know what that problem is that you're solving and for who it is.

15:17And a lot of times they have that I hear from people all the time that, and agency owners, especially who are saying, you know what, I, well, we can't make any kind of claim. It depends so much. It depends on so many factors are outside of our control. It's like, well, there's one factor that you can control and you can control who it is that you're choosing to work with, who it is that you're choosing to target and what problems that you're willing to solve, especially what minimum, what's the minimum problem you're going to solve. And I would recommend for agency owners to not look at solving problems anything lower than a million dollar problem.

15:52Because anything lower than that, you're not going to be able to have the kind of impact where you can charge high enough price points to make it make sense. And maybe you maybe step up to that point. Yeah. Yeah. Great point. People will pay a lot more to solve a bigger problem, right? A hundred percent. Yeah. So a couple of terms that we've mentioned today, maybe, and I know get batted around and confused, I think all the time. Where do you come down? If I were to ask you directly, what's the difference between growth and scale? Where do you come down on trying to help people understand that difference?

16:27Yeah. Well, growth is where you are, you are generating more growth with about the same resources. Right. Scale is when you're able to generate more growth without the same corresponding increase in resources. Is that, did that sound too technical? I think theoretically. I'm sorry, we're talking over each other, John. No, I said, theoretically, I get it. But for the business owner, you know, what are the different sort of mindsets around, I mean, growth for growth's sake, you know, scaling is, does scaling have a different purpose? Right. Yeah. Well, here's the thing is that a lot of the scaling has become a really flashy word.

17:09Right. And there's a good reason for that too, because that's what people are buying. So that's why the marketing is full of scale. And I don't blame people for using those terms because marketers are going to use what's going to sell. Right. Most of the time, what we're looking at when people are say using the word scale, they're actually meaning growth. Yeah. Because versus getting to a point, scaling is a whole different level. And it does require a different mindset because a lot of times where I see the scaling stage happen is in the early seven figures. And this is where, and I think it would be fair to say that there's different stages of scaling.

17:42Talk about that in my book, about the different stages of scaling up. But there's one particularly that happens in the early seven figures. And it happens about between 900 ,000 and 1.1 million. and over about a three-year period of time, I've seen this over and over again where their income goes up and down and it's because they're hitting a new threshold in scale and they've grown to a point where they can't grow anymore without taking the next level. And that usually is putting in place a manager that is changing from being the owner operator to being able to build out a management structure in place.

18:16Maybe I went more into the answer than you were asking for. No, I mean, I think to simplify what that example you just gave, a lot of times what it means is you're going to have to take, you're going to have to spend for capacity that you know, you don't currently have the ability to fill big, but that's the only way to grow to that next level is to, you know, build that capacity. Right. But that comes at a cost. Well, that's a great way of putting it to build out that capacity. And then on the flip side, there is, you can, you have capacity that needs to be filled too. And there's like this stair stepping thing where you're at capacity and you have to build out more capacity.

18:55So you hire these people. Now you're like, okay, wow, we've got this big payroll. We've got to be able to make some more sales, but it's a pretty challenging situation to be in. And I will tell you, I have like in my own company, we've been here before. So I get what this feels like too, where then you have to really be employing some of the things that you teach in your duct tape marketing strategies about being able to keep that consistent lead flow so that you can actually fill the capacity too. Absolutely. That takes an investment, right? Sometimes you got to build it before they come, right?

19:25So you talk, there's a term you use in the book, entrapment cycle, that I certainly see when growth is happening, certainly see the entrapment cycle show up. So you want to unpack that one for us? Definitely. So I think it actually is a perfect tie into what we were just talking about. is like that cycle that goes up and down. Well, the income going up and down and there's a plateau of revenue. And it can also be a plateau, more specifically of profit, because you can see the revenue grow and then the profits stay stagnant. But anyway, the cycle itself, the intrapment cycle, what happens is sales growth happens and then you get busy, get pulled in.

20:04So even if you have a nice team in place, you get pulled into it and then you're like, all right, well, you know, we're under capacity. We're over capacity. So we need to be able to hire some people. So you go through, you're saying, okay, I've got, are we going to choose quality? Are we going to choose profit? When we're looking at staff members and you've got to be profitable. So you choose the level of person that you can afford for your level of growth, which oftentimes is not enough. So you end up having to get in there and have a lot more time and energy to, to either clean up their work or, you know, be kind of babysitting them.

20:37And then what happens is meanwhile, as you're going and doing that and working, working in the business, then you're like, oh crap, our sales are down. We need to go make more sales. And then you go back in. And then the only problem is you've got your sales cycle. So your sales cycle could be 90 days, could be 120 days, whatever that is. You wait for that to catch up and then you make sales happen again. And then the cycle happens all over again. Well, and I, yeah, I mean, you left out one variable there, you know, you're working more than ever probably. Right. Cause I see, you know, growth is happening.

21:08And so now you're working more than ever. And to me, true wealth is like all of those things, right? No, that's a really good point too, John. I don't think I've ever thought about describing that as an additional variable within that cycle. But what we do see happen is that it ends up that entrapment cycle makes your model into a time for money model, even if you have other team members, because what happens is that the business, it's actually so dependent upon the CEO's actual time involvement in it, that the only way that you can actually grow is to have the CEO grow more and more hours, more and more of their hours.

21:46So that, that means that, and that's, and that right there is, it is a description between growth versus scale where you can scale income while actually the CEO works less and less hours. Yeah. Which I know this, which is something that you have, you guys have successfully done in your company, which goes was to show you because I know you guys have done really well. Yeah, I do nothing. I do absolutely nothing anymore. It's amazing. I love it. It's a great model lover. Well, Mandy, it was great having you stop by the Duct Tape Marketing Podcast. Is there some place you'd invite people to connect with you and obviously find a copy of the Hands Off CEO?

22:23Yes, go to handsoffceo.com forward slash and you can go there and you can download a book summary. And also there's a scalability checklist there that shares the stages to exit the day-to-day in the business. And that is actually something that I found people have really loved, including our clients. They love being able to know, all right, what should I do first? And there's like a checklist. You can print it up, put it on your wall. And it's in the book. I guess you can't see that, but it also gives you a place to, you can buy the copy if you'd like. Awesome. We'll have links in the show notes.

22:58And there, if you're watching this on YouTube, you will see Mandy just held up the book there. So you can get a copy again. Appreciate you stopping by. Hopefully we'll run into you soon. One of these days out there on the road.