Today our guest, Greg Shepard shares the framework and strategy for having a successful business. He also talks about the 12 different companies that he has developed and sold.
Key Points on The Best Business Strategies To Really Crush Your Profit
- Greg came from a very poor family. During the 25 years of his career, he built 12 companies on his own and invested in several businesses.
- After being very successful in his career, he decided he wanted to make an impact and give back to the people. He realized that 90% of businesses fail and he wanted to change that by helping these entrepreneurs to succeed.
- He started to create a framework that entrepreneurs could follow to lead them along a path to be successful. Eventually, he developed the BOSS system (Business Operating Support System).
- He then created BOSS Capital Partners to invest in the businesses that work out well.
- Greg figured that businesses fail in many stages. The first stage is right after they get out of an incubator or accelerator program. This happens when the entrepreneurs don’t shoot for the right goals and don’t communicate clearly with the investors.
- The second trap is raising money and starting to sell on the market, but not specifying the ideal customer.
- The third phase when startups fail is when they don’t specify from the start who would be their ideal buyer upon selling the business.
- Greg emphasizes focusing on the “North Star”, which is setting the correct goal, as it is the most important at the beginning of the BOSS.
- According to Greg, companies have 4 functional areas: marketing (growth), operations (margin), human resources (retention), and finance. Once a startup creates these, they need to think about the mission for each functional area.
- Then they have to figure out their objective and key results, and delegate appropriately.
- The 4th phase where startups fail is at standardization. It is important to create a knowledge base that contains the best practices and that is measurable.
- The final stage of BOSS is the Kaizen (Japanese word of continuous improvement) loop, where the company goes back to all the areas in the BOSS and try to optimize them over and over again.
- Greg invests in around 1 out of every 1000 businesses that come to him. He is looking for niche businesses.
- In the future, he would like to focus on BOSS Capital and dedicate the next portion of his life to help entrepreneurs succeed. His book about the BOSS method is coming out later this year.
- Who is your success role model? Elon Musk
- What is your biggest success? Running a marathon and cycling for 7 days without giving up.
- What does a typical day look like for you? He gets up, has his coffee, and set his intentions. Then he has scrum meetings and starts executing his daily plans. Recently he is trying to work fewer hours and meditate every day.
- What’s your favorite quote? “To the wise, life is a festival.”
- What are your hobbies? He loves gardening and is very interested in studying physics, fractal geometry, astrophysics, and quantum physics.
- What is the best business book you’ve read? Phil Knight – Shoe Dog
- If there was one key piece of advice you could leave our listeners with about achieving success, what would it be? Failures are the stepping stones to success. Success comes with some education but failure comes with more.
About our Guest, Greg Shepard
Greg Shepard is a Serial Entrepreneur, Author, Speaker, and Angel Venture Capital Investor with a legacy of building and running sustainable growth businesses. Driven by a transformational leadership style, Greg has spearheaded multiple company exits throughout his career. His former company, AffiliateTraction, was acquired by eBay Enterprise Marketing Solutions in January 2016 as a part of a cross-brand deal totaling $985M.
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Greg Shepard is the CEO of BOSS Capital Partners and the developer of the BOSS (Business Operating Support System) methodology. He built and sold 12 companies on his own and invested in several others. He shares with us how he reached this incredible success and how can you achieve it too!
Greg comes from a poor family. He didn’t have much growing up and at one point his family lived in a tent. This humbling background helped him appreciate what he has now.
Over the 25 years of his career, Greg built 12 companies and sold them successfully ranging from $250M to $1B. He’s never lost money on an investment. He says it is because of a framework he developed over the years, the BOSS method. He used this methodology on all his successful businesses and later started to use it to help others. At first he helped congressmen and congresswomen get elected.
However, Greg realized this wasn’t making enough impact and he wanted to give back something valuable to the people. One day, he had an epiphany while meditating on the beach. He understood, that the best way to give back is to help entrepreneurs reach their dreams and succeed in their business as he did. 80%-90% of the entrepreneurs fail, which would not be acceptable in any other industry. There is an obvious problem and this problem needs a solution!
So he went on a mission to figure out why they fail and to help them to succeed instead.
The many stages of failing as an entrepreneur
According to Greg, the first stage when entrepreneurs and startups fail is surprisingly right after they get out of an incubator or an accelerator program. The reason for this is that people go into an incubator or accelerator program with no experience at all. They have never built a business before, so they have no idea how it is done.
These programs are great to help people shape and form an idea. But once they start pitching for investors, deeper questions come up that many new entrepreneurs cannot answer. These questions could be “What is your exit strategy?” or “What is your market strategy?” These are difficult questions that startups need to prepare for.
Often these startups raise the money they need or even more but burn through it quickly because of the lack of experience. Then they go for another round, but as they are usually not where they should be at that point, the investors back out and the business fails.
Greg recommends raising less capital, so investors are more comfortable if you cannot deliver everything perfectly at first. You also have to work very hard on communicating clearly with them. It is also crucial to set the right goals that are achievable.
The end goal in mind
The second phase where startups fail is when they start selling on the market without specifying their ideal customer. Often times after these entrepreneurs get a proof of concept and a market buyer validation, they raise a bunch of money and spend it all on a market strategy with the wrong customer in mind. They usually don’t find that it’s the wrong customer until it is too late. Focusing on the wrong customer base can make a business fail, so it needs to be specified from the start.
The next step is to ask if the customer profile is a good fit for the ideal buyer. Greg emphasizes the importance of having the end goal in mind from the beginning of the business. Many startups lose direction because they don’t have an exit strategy. Greg’s example is that when someone builds a product, they always build it for customers who will buy it. As an entrepreneur, your whole business is a product for the company that’s going to acquire it as a buyer.
Greg had one company that he couldn’t sell for 17 years. He thinks it is partially because he didn’t have these things specified and he didn’t define his “North Star.”
The North Star
The North Star is the very beginning of the BOSS system and it represents a company’s definition of its purpose, products, customers, and potential acquirers. Clarity about the North Star leads founders and companies toward their goals and helps investors envision the company’s future growth. When founders begin building their businesses without establishing a North Star, they risk moving in directions that won’t yield the desired outcomes.
Greg came up with the idea for the North Star one evening after he had a CFO who stole $750k from his company. Greg was sitting on the beach, disheartened by this event, and was almost about to cry. He felt like his world was tumbling down and that he had lost direction. He looked up and saw the North Star, the only star in the sky at that time, and started thinking about how people used to use it as a guidance tool. He also needed guidance, and he decided to develop a system that helps to guide the business in the right direction. He named it North Star.
In the first stage in the North Star, you have to create the “what”, which means clarifying what is your business and what is your product? Here you create the description, the feature, and the benefit.
Then you create the “why.” Why should somebody buy your product? You create the problem, the solution, and the impact. Then you have to ask “who.” Who is your ideal customer and who is your ideal buyer?
In the last stage of the North Star, you ask “how much” and “when”, which means when will you sell your business and for how much?
Once you went through all the stages and your North Star is established, then you can go into your strategy.
How to build up a company?
Companies have 4 functional areas: marketing (growth), operations (margin), human resources (retention), and finance. Once you create these areas, you need to create the mission for each functional area, the objectives that accomplish the mission, and the key results.
The mission is designed for the C-suite or the executive chair. Then you move down a level and define 3-5 objectives. The objective is related to middle management. Then moving down another level to the lower management, you have to specify your key results.
The next important step in the BOSS method is to prioritize these areas. This can be done by choosing what’s urgent and what’s important. Greg says to keep in mind, that urgent things happen when important things are ignored. He recommends using SWOT (strengths, weaknesses, opportunities, and threats) analysis to prioritize. After this, you have to delegate accordingly using the RACI (responsible, accountable, consulted, and informed) matrix.
Following these steps creates the right direction for the company, which can be followed by execution.
Creating a culture and standardizing is crucial for a successful company. This is the 4th area where many companies fail. You have to create a knowledge-base for your company. This contains who’s accountable for certain areas and all the best practices.
According to Greg, an average employee cost 33% of their wage to get up to 80%-90% usage. He recommends training the employee on how to use BOSS and how to look up the best practices. Then turn them loose and if they have a question send them a link with the best practices. Greg says that this reduces the cost from 33% to around 12%. If everybody knows what to do in the company and works according to the knowledge-base, then the work becomes measurable and optimized.
The final stage of BOSS that stabilizes the company’s success is the “Kaizen loop”. Kaizen is the Japanese word for continuous improvement. This suggests going through the whole company over and over again, confirm the plan, the North Star, and everything from the BOSS process, and continuously optimize them.
A good example of the Kaizen is a company Greg worked with. They had 670 employees, but after doing the optimization they got it down to 150. This company went from losing $6.7M a year to making $8.7M in profit.
Investing in companies
Greg invests in 1 out of every 1000 startups that come to his company, BOSS Capital Partners. He receives around 100-200 deals a month to look at.
According to him, there are businesses that save money and businesses that make money. The ones that solve a problem are usually saving money, and the ones that are taking advantage of an opportunity are usually making money. He is looking for businesses that solve a problem and save money.
As he likes to invest in niche businesses, he gets very involved with them. He could spend weeks and sometimes even months to fully understand these startups before he invests in them.
Greg built and sold 12 companies over his career. His longest one lasted for 17 years. He had many hardships with that company. First, the company got hit by the dotcom bomb in the early 2000s and he had to layoff 65 people. Just when it started to recover, the 2008 recession hit that set back the company again. Eventually he was able to redefine his North Star and successfully sold the company for a great number. Greg says that although it was hard, he learned a lot from this company.
His most successful and one of his favorite companies was his last one. He built up and sold that in only 2 years. It was a compliance product for the advertising space, and they got bought out even before they were ready. He used the BOSS framework for this company.
The bright future
Greg writes about the BOSS method in more detail in his first book, which is coming out later this year and is published by Forbes. He really wants to see more entrepreneurs succeed in the future using this proven method. BOSS is an open-source operating system, that everybody can use for free. Anyone can take it, use it, and be more successful.
Greg is dedicating the next portion of his life to helping other entrepreneurs succeed. He is a great example of how to reach unbelievable success and stay humble at the same time.