How I Built My Small Business

Collin Hathaway - Private Equity Perspective: Secrets to Scaling from Small to Mid-Sized

• Collin Hathaway • Season 1 • Episode 41

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Collin Hathaway shares strategies for scaling small businesses to mid-sized enterprises.

Collin is the founder of Skylight Capital, a micro-private equity investor that acquires companies in the U.S. with $500,000 to $4m EBITDA. 

As part of his journey, he founded Flint Group, a collection of seven small residential home service businesses in HVAC and plumbing across five states, more than doubling revenue in four years. 

In 2017, he bought into ownership of Guardian Roofing in Western Washington and has tripled business within seven years. 

He is a member of the Young Presidents’ Organization and in 2017 was awarded Puget Sound Business Journal’s Top 40 under 40. In his free time, he volunteer coaches his son’s select baseball team.

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Collin Hathaway:

I think when you're young, you do not have to know what you want to do. I think it is better to just do stuff and at the very least start checking off things you don't want to do. You're like I did sales, didn't want to do it, flirted with law school, didn't do it. So I didn't really find the path, and that can feel kind of unnerving for people.

Anne McGinty:

Welcome to how I Built my Small Business. I'm Anne McGinty, your host, and today we have Colin Hathaway sharing strategies for scaling small businesses to midsize enterprises. Colin is the founder of Skylight Capital, a micro private equity investor that acquires companies in the United States with $500,000 to $4 million EBITDA. As part of his journey, he founded Flink Group, a collection of seven small residential home service businesses in HVAC and plumbing across five states more than doubling revenue in four years. In 2017, he bought into ownership of Guardian Roofing in Western Washington and has tripled business within seven years. He is a member of the Young Presidents Organization and in 2017, was awarded Puget Sound Business Journal's Top 40 Under 40. In his free time, he volunteer coaches his son's select baseball team. You can find a link through to his business in the episode's description.

Anne McGinty:

Before we dive in, I want to give a shout out to fellow podcaster Alex Bridgman over at Think Like an Owner. Alex also had the pleasure of interviewing today's guest, focusing more on Colin's origin story. It's a great listen, so check out episode 32 of Think Like an Owner for more insights on how Colin got to where he is. Thank you to our listeners for being here today. Colin, thanks for coming on the show.

Collin Hathaway:

Hey, thanks for having me Really excited to be here.

Anne McGinty:

I am very fascinated by how you have acquired small businesses and turned them into mid-sized enterprises. How do you think small business owners can shift their mindset from that of a small business to more of a mid-sized business?

Collin Hathaway:

I think it depends a little bit on what you define as a small business. The discussion maybe changes a little bit from like a $500,000 company that's hoping to get to 3 million versus a 7 to 30 or, in our case, 160 million to 500. But I guess I'll just tell you some of the things that have worked for me. A couple of things would be have a goal, be more objective, care less, find time and then reinvigorate the risk seeking. So on the goal thing, I'll just say like it's, it's really important to have an end goal. So the first company I bought, bonnie plumbing back in 2008, our goal was to grow three percent a year and, lo and behold, we always found a way to grow 3%. For the first couple of years, I mean, we grew more than that but like there was one year that was rough and it was like 3.1, you know it was like, oh, that goal maybe wasn't that good. When I bought guardian roofing in 2016, I walked in there and we were a $10 million company. It had just grown from six to 10. With acquisition, it like merged with another company and I wrote on the whiteboard 30 and they said what's that? I said that's our goal in five years and they said how are we going to do it? I was like I have no idea, but that was the goal and we didn't get it. We missed. We hit 29 million in six years. But that was like unfathomable for them to go from that size to that size.

Collin Hathaway:

On the objectivity, and, like the careless, no one cares as much about the company as the owner. I mean, you were an owner, you understand, like they just won't, and so you can't expect anyone else to. But there's a flip side to that, which is that sometimes the caring is an impediment. Again, going back to Bonnie Candy, bonnie was this amazing owner, her and her husband Mark, my first partners and she did everything. I mean, she opened the shop with Mark, she dispatched in the morning, she did the accounting, she did the marketing and she was better than anyone else there because we didn't have a ton of people. And I remember saying to her I was like hey, there's all these other things we need to do If we're going to grow. We have no time. I'm like why are you dispatching? She's like that's where we make all our money, it's how the guys get out early. And I said, all right, who's the next best. And she's like Nicole and I was like all right, how good is she? She's like she's 60% as good. I'm like great. So for the next two weeks, train her to be 90% as good and then you're done with dispatch.

Collin Hathaway:

Well, we're seeing that actually at Guardian right now. We just hired a new president and it is interesting like my partner's, lori and Matt, are fantastic, but there's an element of like nothing can slip through the cracks, whereas the new president's like some of the stuff can slip through the cracks today. If it's not detrimental to the company, it's okay. Like we'll get to that later. And I think sometimes it's hard when you're in it because you just care so much about the whole experience for the consumer, for the employees.

Collin Hathaway:

So I'd say that's important, finding time. Everyone's like oh, I'm going to think about this later, but no one ever takes the time to do it. And I just think you've got to have some time once in a while outside the business to kind of think about it. I mean, it doesn't have to be like this crazy offsite, but shutting down some of the little minutiae you have to think about every day and like thinking about what you want to do.

Collin Hathaway:

And then the last thing was risk seeking. I mean, everyone who starts a business or buys a small company, they take on a tremendous amount of risk, but I would say over time, especially if it goes well, I think they become risk averse. You look at Guardian, where we took a tremendous amount of risk early, but now if someone said, hey, you need to invest half your money in something, it's my company and my money. So like do I want to do that? I'm finding that I'm treating it a little bit differently and had to sort of reset back to like I don't want to take silly risks, but I had to like kind of flip back to like not just being safe it's never safe to have a small business but feeling a little bit safe.

Anne McGinty:

Sounds like sort of detaching your identity from the business itself.

Collin Hathaway:

Yeah.

Anne McGinty:

So what are the critical strategies in successfully growing a company from small to mid-sized?

Collin Hathaway:

Well. So I think and this goes a little bit to how you hire too I mean, when I partnered with Lori and Matt at Guardian Roofing, they said, like what would help us be successful? And I said you know, the number one thing is going to be change management. One of the best operators I knew was this guy, alan O'Neill. In Houston. He ran a plumbing company. We grew it from nine to 30 million in three and a half years. We launched air conditioning, electrical, got a bigger building and he was just so good at change management and I don't mean like you always have to be changing things, but as the situation developed he was able to sort of say, hey, this is a new situation, let's look at it differently, let's try some things out.

Collin Hathaway:

Often the right answer if you're thinking about growing and scaling is not the team you have in the building. It can be, but it's often not, and I think that's really hard for a lot of people to sort of look at. It doesn't mean it's going to be a full scale elimination of your team. It just means you've got to really look at your team and say like, are they capable of these roles? And then I think you have to have a vision like this $30 million goal. It doesn't have to be dollars, it could be expansion, more stores, it could be whatever. And you need to take that vision and say like, okay, this is what we want.

Collin Hathaway:

Here are the steps we think we need to get there and then look at your team and say, like, what do we need that we don't have, what do we have that we can maybe slide over? And then what do we have that we just don't need anymore? If that's the new goal, you know and I think that's very hard for a lot of business owners, because a lot of the people there helped them get to that point and, to their credit, they're super loyal In some ways, that's why it's nice Maybe when I come in cause, I'm a little more objective. I'm not looking to like can everyone, or upgrade everyone, but I'm just more like, hey, what do they do? How does that help this goal? Can it change? If it can't, well, then we probably need to help them find a new role somewhere else, or or move on.

Anne McGinty:

And do you have a specific process that you use to evaluate who gets fired and who stays?

Collin Hathaway:

No, I mean the firing thing. I mean it's a bad word kind of, but you can get better at the firing thing if you get better at the hiring thing, and so we really focus on hiring better at the companies first we use it's called top grading. There's a book called who by Jeff Smart. That's amazing and I literally follow it to a T. Whether we're not for technicians but customer service, reps, managers, supervisors, controllers, presidents, they all go through this process. It doesn't mean we haven't had bad hires, we've had more good hires and we've weeded out a lot of duds that we just wouldn't have been able to tell from a resume. So I think it starts with that, and then it's laying out what you want the company to look like over time and figuring out what roles you need.

Collin Hathaway:

I used to give people a lot more time to see if they could fill in that role, maybe just because I'm older now, like I'm a little more impatient or I've just sort of seen it and I'm like this isn't going to work, so like let's not try it. We're always willing to coach and be transparent, but one of the best business school classes I took at Stanford was this thing called managing growing enterprises and they had this side class on firing and I just remember them saying the best time to fire someone is the first time you think about it. I always go back to that and I try and basically shorten the period to the first time I think about it to when it happens. You had to kind of factor in like how that is perceived If suddenly you think about it and just do it.

Collin Hathaway:

But one thing that is just more of a tactical thing you can terminate people for you know misbehaving. You can terminate them for performance. If you're terminating them because it's just not the right fit or they don't have a role, we generally will offer severance and get a release signed. I've just seen too many times where we're like, oh, we didn't really explain why we let them go and then six months later there's like a wrongful termination lawsuit and we don't really get dinged by those. It's just a huge amount of time and energy and so I'd rather just do right by the employee, get the release signed and protect the company and move on.

Anne McGinty:

And when you say culture fit. So what is the type of culture that you are trying to establish?

Collin Hathaway:

when you're growing these businesses. Our mantra at Flint and even Guardian is like take care of your team, take care of the customers and the money will work itself out. And so we have a relentless focus on being a good teammate. We have a no turd rule there's a better word for it, but no turd rule. So if you're a turd, you're pretty much not going to make it very long. I have to like you. I don't have to be your best friend, but I have to find you sort of amenable to be around, Like the phone test, like if they call you, do you want to answer, and if you don't, they probably won't make it very long.

Collin Hathaway:

I'd say that two other things that have really, I guess, been codified in the last five years for me is we just have a group of doers At small businesses. You can't have a lot of like oh, deep thinking, you got to do stuff. So doers is really important, and I'm not talking about a CFO. I mean like certain managers will sort of kick back and be like I need someone to run this report for me. I'm like no, no, no, you run the report. If you can't figure out how, you probably don't have a role here. And then the other thing is we just really over-index on hard work. You just can't replace hard work and people who are willing to spend hours working, and that is probably more old school than today's listeners would like to hear. It doesn't mean we miss our kids' recitals or sporting events or whatever. We make sure we work really hard so we can do that.

Collin Hathaway:

Hard work usually trumps most things. I've seen a situation where there were a bunch of people working at a 10 to 12 level out of 10 and a bunch working at a four, and it's not fair to the 10 to 12 level because they'll burn out or they'll get disgruntled. The fours are just getting carried. And so we flush out the fours and you don't need to run it at 10 to 12 forever. That's like not tenable. But if everyone's at eight or nine on the effort scale, it sort of makes it easier for everyone. And then it also starts to create this environment where the eight and nines don't really tolerate fours. It sort of becomes this virtuous cycle where you're not going to hire any fours and if you do, they get flushed out super fast. And it's not by you, it's by the team saying hey, either put up or shut up and shut up to usually like out the door.

Anne McGinty:

What would you say prevents small businesses from scaling?

Collin Hathaway:

Again, it depends on your size. I think in general it's like what is the goal? Because some businesses aren't going to scale, they aren't meant to scale, and whenever I buy in a company, I'm like, hey, can it be two or three times bigger in five years? And it's not because I just want to be bigger or make more money. It's like I think it's really good operation. I think we could do more of it in more places for more people. But some companies aren't built like that.

Collin Hathaway:

You own a little manufacturing business that takes a million dollars of equipment. You got to kind of ask yourself and be real honest like what does the scale mean? Like, do I want to be five times bigger at this manufacturing business? Well, you better come up with $5 million for five more things, and then you better know that in the end you can sell for 15 million or 20 to kind of make it worth the outcome, the financial result, the risk. And so I think it's really important that the owners think about, like what is the end goal? What's the why? Before you start worrying about the how, I was thinking more about like what helps you do it? I think you have to be metrics driven. You have to be. You've got to kind of know what winning looks like each day, and so I'd start with metrics.

Collin Hathaway:

I think financial accountability is huge. I mean, one of the first things we do if the company's big enough is hire a controller. They're expensive, it could be a bookkeeper or something. But like you have to have timely financial reporting and if you don't understand financials as an owner, you have to spend the time to do it. When I took a private equity job to buy companies, I didn't know the three financial statements and I managed to learn it and still not get fired. So like, you can learn. But you have to become financially literate and you have to have regular reporting. And the only time we've gotten a little bit sideways at Guardian was we had a controller who turned out to be not that great and we found out that he basically hadn't been doing the reporting right for two or three months and he took all our bills and just put them in a drawer in the reporting right for two or three months. And he took all our bills and just put them in a drawer. Then we did the worst thing we paid all the bills all at once and realized like we didn't have enough money to make payroll, so we had to put money into make payrolls. So now I have like a daily cashflow report. Is it too much? It happened once, so I'm going to have it every day because I want to know exactly how much money we have every day.

Collin Hathaway:

I guess the last couple of things are like hiring engine Everyone complains they can't hire anybody. But I guess what we've found is it's like the story people tell and it's more than likely as an owner, you're just not spending enough time on it. And like you'll ask people how much time you really spent at tons. Well, how much is that a lot? Well, how much per day? If they said an hour, I would be shocked. But like you can't grow a business without hiring more people, particularly if it's a people driven business. So we often hire a recruiter. Again, you have to be big enough to be able to afford that. But they're not even supposed to hire it, they just fill the funnel. So you have people to look at, decide if you want to hire them.

Collin Hathaway:

And last thing I'd say is just do the hard things early, like if there's stuff you know you should do, but it's really hard, you probably should get working on it and stay focused. Like I cannot tell you how many owners just get totally taken in by the shiny penny. So if you decide you want to grow and you believe this is the right path, you have to stay focused on the path. Just make sure whatever you thought was going to be the plan stays the plan until you figure out if it works or not. You don't need five plans.

Collin Hathaway:

So guardian roofing puts on a new roof, it repairs roofs. We've added insulation and we've added gutters, which is new stuff, but kind of sort of similar. And like one group's like oh, you should do siding and windows and whatever. And I was like dude, that's too much stuff. Like we don't need that stuff. We got plenty that we can do. Just with these four things, we just need to do this really well and then if we finally do it really well and we can't do any more, then we'll think about whatever else is next. But stay focused.

Anne McGinty:

Yeah, streamline and specialize. I like it Keeps us so much more efficient that way. So, in this journey over the last 17 years, what are some of the biggest mistakes that you've made with Skylight Capital?

Collin Hathaway:

Skylight's, like my little website thing on my office door that says, like I buy companies. I mean there's nothing to it. When we buy a company, we set up an LLC and buy it with money that comes from me or from somebody else. You know, the mistakes I think that are maybe more relevant are like I have bought a company from a convicted felon that we knew was a felon and it turns out like a bunch of stuff he said wasn't true. We've made a bajillion hiring mistakes. We've had elements of the shiny penny, we've set the wrong goals. You know, like the most traumatic experiences for me I think are and this is again maybe not as relevant because I bought the end of the company but the owner said he wanted to sell and leave and he stayed, and then we had a. I remember a day where he used some racial slurs and I should have just cut bait right there. I mean it would have been gnarly but it was too scary because it was a brand new thing to be like, hey, this is like major violation of my core values. If you say it to me, I sure know probably it's being said somewhere else. I mean, six months later there was a parting of ways, but like that would have been something I wish I would have moved on faster ways, but like that would have been something I wish I would have moved on faster. I got involved in a business in Utah with a gentleman who was committing fraud, forging OSHA records and using hookers and blow to generate sales, essentially buying off these vendors, and I don't know that I would have been able to find that out during diligence, but my spidey sense went up right away and it took us too long to sort of figure out and unwind and I had to move to Utah and try and save the company. But looking back on it, there were a bunch of warning signs, including my wife having dinner with him and being like that guy gives me the heebie jeebies. I mean, that's not the best metric, but spidey sense is real. And unfortunately at the time I had to buy a second company to prove that Skylight worked. Second company to prove that Skylight worked. And so, like I was overly motivated to make sure, I did a second deal and I missed some warning signs. I'd say we made every mistake operationally that I can think of. But like every two weeks I'm like, well, that's a new thing, I didn't think we could have done wrong and we did.

Collin Hathaway:

There has been one time where the culture of a really good business went sideways under my watch and it was a little bit of funky time because I had had a heart attack when I was 36 and I wasn't paying attention. I was a little bit in the like la la land for a few months physically fine, mentally not not great. We brought in a new leader who was very focused on the financial outcomes and a lot less focused on sort of the right processes and taking care of the people and the customers. And in the end if you put the money first, it might work for a little bit, but eventually the other stuff starts to erode and you can't it's really hard to like put that genie back in the bottle and when the culture goes sideways it's a ton of work.

Collin Hathaway:

It's one of my biggest regrets and some of it was a little bit out of my control, but it was my responsibility to protect that place and when I figured it out we terminated the guy and I started working on it. But like it was a lot of damage and I could have. I could have been more responsive to that and again, maybe you know the heart attack outside of it. Some of the signs were already there before that, so that's my biggest sort of regret.

Anne McGinty:

Well, those are some pretty big hurdles that you've had to face. How do you grow in a sustainable fashion so that you can keep a really good pulse on the business?

Collin Hathaway:

Yeah, and again, it depends a little on the size of your company. I talked to these guys in Miami a couple of years ago and they're like we really want your advice. I was like, okay, I'm like what do you do? And they're like concierge for like high-end homeowners. I was like, oh, that's cool. Like I'm always fascinated, like that sounds neat. I mean, my wife's always bummed out because I have contractors here. She said what are they doing here? I'm like I don't know, I just want to see what they, your guys' roles. And there was like CEO, cfo, vp of strategy. I was like all right, first of all, I fire two of you. And they're like what? I was like don't worry about the CRM tool. Like I don't, you don't have enough money to pay you guys. That was the last time we talked. You know they didn't want to talk anymore after that Cause I was like what's your growth rate? They're like 5% technology. Just get rid of two of you. And like sell more stuff. That's what I would do first. So in terms of like our companies, they generally are seven to ten million of revenue, so a little bit bigger.

Collin Hathaway:

We have a pretty well-defined strategy now. So you got to have a leader, it can be the owner if they're staying and going to maintain ownership and work with you. We always hire a controller, which used to be 100 grand. Now is, depending where you live, 120 to 180 grand. So that's expensive. We generally hire a recruiter, for our businesses are service-based, so like if you want to grow, it's probably like yours. Like if you want to grow a hundred percent, you need like 95% more people. And now it's almost like we have enough demand. They're like the people is the issue, not the marketing. So the recruiter is really important, partly because they'll bring in all the new candidates to support the growth and a lot of times they'll also bring in candidates.

Collin Hathaway:

We've always moved to a bigger building, which is super scary for a lot of owners. We never buy the building, which I say except for I've done it at Bonnie, my first company, and I've done it at Guardian. But the owners want to buy the building because it's like oh, it's a real estate play and I can, they'll pay me rent and I'll own it separately and it's a great thing for my kids. But what you find is like if you're in a 5,000 square foot building, they'll buy one. It's 10,000. And if they grow, because usually the building allow, facilitate growth. They're like, well, we can never leave because I own the building and so we always just lease the buildings, except for a guardian where we went from like 4,000 square feet to 35. And I was like, well, if we grow out of this thing, it's a good problem. We'll figure it out later, and then we have started using technology more effectively the longer I've done this.

Collin Hathaway:

If you have multiple companies or multiple branches, we put them on the same system. The first time I did this, I didn't and I would just take it all and amalgamate it. Now they're all is the same. This is also something people should think about. So cashflow Growing actually should start to generate more money. It doesn't always because you're buying more trucks and doing all this stuff, but like the owner should think about that before they're like, let's get huge.

Collin Hathaway:

My first private equity group bought a jewelry company, but the bigger they got, the more stuff they would buy more inventory. So we lost money when we grew because they just buy more stuff. Growing then probably isn't a good idea. You should probably shrink and just sell more things, so more inventory turns. So in terms of like thinking about it.

Collin Hathaway:

We never think about the short term. I mean, you want to be careful, you don't like run out of money, but we're always like what is the best thing for the long-term benefit of the business? And then you kind of go back through and be like, okay, what steps can we take? And we never take like a bet, the farm risk, like we're going to expand into Portland with Guardian and you know we came up with a budget. I just said here's the amount of money that I think we should be willing to spend and lose. Now, hopefully we won't and hopefully it works great. But like this is a risk. It's like a new investment and if we lose it that's going to suck. But that's how much we'll spend. It's not all of it. It's a fair amount, but we need to make sure we protect the mothership and generate money. But here's the amount we'll invest and see. So I think that feels risky, but not like we're going to go out of business. Risky. You got to make sure you're mindful of debt too.

Anne McGinty:

I know exactly what you mean about cashflow, because I've seen other companies run into that problem, and it was interesting to hear you say that sometimes it's better to keep a business smaller and just reap the same profit than it is to grow it, because we crossed that threshold in our business when it was like are we going to do a lateral move right now and put everything in place to take the next big jump in growth, or are we going to stay and we actually decided to stay because it was better for our lifestyle and then we were well positioned for an exit too? It makes me wonder for you how do you decide when to keep running and growing a company versus when to sell?

Collin Hathaway:

I'll just say this is a very personal question for, like any person, and there's so many variables in it Financially, legacy for your children, your identity. We took on a new investor at Flint last August. I moved from CEO to chairman and I was very happy that we did it. I will say, like the late winter, early spring of this year I kind of went into a funk and I'm pretty sure it was like just the comedown. I mean, I'm still the chairman and I'm a shareholder and I'm still involved, but I'm not the person anymore, you know, and I didn't want to be, but it's still like a little bit of a adjustment and I was like man, I was so thrilled with the outcome and our new partners are amazing and Trevor's killing it, the company's growing faster. That's a huge ego punch, by the way, is like the company's doing way better, since I'm not the CEO. But it was hard, you know. So I think it's really important people think about again the why and try and prepare for it. I thought I was pretty prepared and even then I still had like a little funk. So I think you have to be radically candid about like why do I want to do this For me? With Flint.

Collin Hathaway:

We bought seven companies at 70 million, grew into 160. We used all the money I'd raised, basically 90% of it. I was traveling like three weeks a month. My kids at the time were 12 and 10. And I didn't know how to get bigger without traveling more. There's probably a better way. I just didn't know how to do it and I was pretty tired. Covid, the changing marketplace, with 72 new buyers flying all over the country, all the stuff you deal with in a small business magnified by the seven companies, and I was like you know I love this space. I'm not going to be the one to get it to 500. And I don't have the energy to do it. It was totally right, call, I settled those things for the person who always wants to do more. I was like it was a little tough, but you got to kind of get rid of the noise and just think about you and your family and your team.

Anne McGinty:

It's probably good to just at least celebrate how far you made it, because it sounds like that's already worth a celebration in and of itself.

Collin Hathaway:

It's been, we've been very lucky.

Anne McGinty:

I am curious to know and I'm always curious to know, because it differs so vastly from one person to another what is your ultimate goal, like? What are you doing all of this for?

Collin Hathaway:

Well, I'm too old. I'm 46. I'm too old for like a midlife crisis, but I'd say like that's been part of it. The funk is financially. It's worked out beyond our wildest expectations. I feel very fulfilled that we've done it the right way and that our teams are safe and have these opportunities and the employees or their careers are expanding, and it's great. I feel financially secure and so it is interesting.

Collin Hathaway:

Now it's kind of like what's the point? Like this summer I'm basically not working that much and I'm not going to create new things. I'm just going to try and spend a little time after 17 years and take just a few months to kind of like drive to lacrosse practice and go to baseball tryouts and games and stuff and I did that stuff anyways, but just like that's okay If that's the day, you know a couple of phone calls and emails and like that's the day, that's okay. You know, one thing that I do think has benefited me a lot is I always kind of had these big goals, and this is also a challenge right now, Cause like I sort of got them and so it's really easy when you have a North star, and when you don't have that it's a little trickier, but yeah, so I don't know, I'm figuring it out.

Anne McGinty:

A lot of people we know are really evaluating right now. What advice do you have for anyone looking to purchase a small business?

Collin Hathaway:

So, first of all, I would ignore Twitter and be leery of the folks who talk the most, because I think there's this huge like ETA entrepreneurship through acquisition and buying small business and there is no easy button. I think you got to ensure your spouse is aligned if you're married or have a partner or financial people that are dependent on you, because it is risky and scary and you buy a business and it might mean you think you're getting a job, but there's no 40 hour a week company ownership I've ever seen. So just make sure everyone's on board with this. Set up a timeframe and some limits, like treat it like a job. If you have a regular job and you want to do this, then set up like I'm going to do 20 hours a week and for 18 months and see what comes of it and I'm willing to spend a hundred thousand bucks and costs.

Collin Hathaway:

By the way, if you do buy a company, you do not have to spend tons of money. There are so many ways to look at companies and with zoom you can talk to them and you can look at financials and stuff. I mean not always, but like you do not have to spend a league of some money to evaluate businesses, which is a mistake I made early on where I would just be like, oh, we're going to hire lawyers and these people look at it. And now I'm like, Nope, I mean, I can look at a company, pretty big company, to buy and spend less than three grand to get to like an offer and sometimes the offer actually doesn't even require three grand. And then I just would be real honest with yourself about your risk tolerance and what your end goal is.

Collin Hathaway:

And I keep going back to like the why I mean there's so many people that think it's cool to buy a company and they're just totally unsuited for it, which is kind of hard to admit to. But like, if you kind of like the free snacks and the fancy offices and you know the 40 hour work week and you're four weeks off, none of those are bad. You should just work at Microsoft. Like you shouldn't go buy a business because it is not like that. It is gnarly and scary and way more fulfilling in a lot of ways. But you're going from working at Google or McKinsey to trying to work at, you know, like a plumbing company. They're real different. So, like, it's good to talk to other people about it.

Anne McGinty:

That's great advice and so true. Even just in hearing you talk, I know that you and I have had very different aspirations in life, and both are great. It's just like you're saying it all comes down to your why. So for a final question if you could go back and talk with yourself in your early 20s, what life wisdom would you give yourself?

Collin Hathaway:

I think when you're young you do not have to know what you want to do. I think it is better to just do stuff and at the very least start checking off things you don't want to do. You're like I did sales, didn't want to do it, flirted with law school, didn't do it. So I didn't really find the path and that can feel kind of unnerving for people. So I always just tell people like look for three things a big brand, valuable skill building, like sales and great mentorship. And if you can get two of the three, that's a good opportunity. And if you can't figure out exactly what you want to do, just try something and then, if you don't want to do it, move on and check that off.

Anne McGinty:

Well, thank you so much for coming on the show and sharing your story and all of your advice with us.

Collin Hathaway:

Thanks for taking the time to talk with me.

Anne McGinty:

Today's key takeaways Clearly define your growth goals, whether it's aiming for 3% or more so you have a target to work towards. Percent or more so you have a target to work towards. While it's important to care deeply about your business, don't let that passion become an obstacle to growth. Maintain your company's values, but remember to separate your personal identity from the business itself. Make sure to find time to completely step away from your business and reflect on your strategy and direction as your business grows. Don't lose your appetite for taking calculated risks. Avoid becoming too comfortable and always be open to opportunities for growth. Consider all of the ways that you can continue to delegate tasks so that you can free up your time as the business owner to focus on strategic growth.

Anne McGinty:

Change management is crucial. Be willing to try new things and regularly assess whether your team is capable of meeting the demands of their roles. Having a clear vision for your business is essential. Once you know what you want, identify the steps to get there and evaluate your team to determine. Consider using tools like those discussed in the book who by Jeff Smart to improve your hiring process. Remember it's better to hire slowly and thoughtfully, but don't hesitate to act quickly when someone isn't a good fit. Of course, protect yourself in this process and go through the necessary steps. Ensure that everyone on your team is consistently performing at a high level. Don't tolerate underperformance, as it can ripple through your company's culture negatively and impact growth.

Anne McGinty:

Before you figure out how to grow your business, take the time to deeply understand your why. Also, make sure you're financially literate and understand your company's financial statements. Keep your operations streamlined and simplified and focus on maximizing growth with your existing offerings before thinking about what's next in your growth journey. When buying a business, due diligence is key. Pay attention to the people selling the company and don't get distracted by shiny opportunities that don't align with your goals, by shiny opportunities that don't align with your goals. If you're considering buying a business, make sure your family is on board and understand your why, your risk tolerance and your end goals for the journey. And lastly, you don't need to have everything figured out from the start. Sometimes it's about trying different things and gradually eliminating what doesn't work until you find your path. That's it for today. I release episodes once a week, so come back and check it out. Have a great day.

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Anne McGinty

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