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A lot of business owners say they’re interested in business growth, but there are real and imagined roadblocks along the way. Is your company ready for growth, or do you need to “shore up” your resources first?

More importantly, are you ready for growth? Many business owners are secretly sabotaging their own growth and success. Discover whether you’re keeping yourself from growing, and what to do about it with business growth expert, Michelle Neujahr.

Rich: A no nonsense, contagiously positive straight talker. Our next guest is an energetic entrepreneur and brass tacks business person. Serious about helping businesses grow, she brings a depth and breadth of real business experience to each one of her clients, whether a small business owner or a multimillion dollar corporation.

Rich: She feels that growth is about creativity, accountability and strategy. She knows how to get her clients there because she’s done it herself. Before starting her consultancy business, she owned a seven figure, Minnesota based renovation firm. She has spent time in the corporate world as a director of sales and marketing and she co-leads a business growth group for the Small Business Association called Scale Up.

Rich: There she helps midsize companies through the steps necessary to scale up their business. She also serves as an associate professor of business at Southern Maine Community College where she teaches entrepreneurship and marketing. She has a BA from the University of Minnesota and an MBA from the University of Southern Maine.

Rich: A wife, mother of three, grandmother of two, I find that hard to believe-

Michelle: Actually three.

Rich: Of three.

Yury: Congratulations.

Rich: This has been updated. Entrepreneur at heart and a lover of chocolate. We are very excited to have with us Michelle Neujahr. Michelle, welcome to the show.

Michelle: Thanks for having me.

Yury: Michelle. I am curious about the business growth group, Scale Up. Could you tell us what is it, what is it for, what do you do there and what’s the purpose?

Michelle: So the contract for that has actually ended, but we led that for the last five years in Maine and it was a program sponsored by the small business administration through the federal government to help companies scale up over a million.

Michelle: And so we put over a hundred businesses in the state of Maine through the program. Businesses that were about 500 to 700,000 in revenue, who had the potential to scale that million. Because what the federal government found is if companies could get over a million, they were much less likely to fail.

Michelle: And so a lot of dollars in many states were set aside by the government to help those businesses that aren’t always the number one choice of where that funding is going to.

Yury: So you said you you trained and scaled almost a hundred companies?

Michelle: In Maine, yes.

Yury: In how many years?

Michelle: So the contract had been over a six year period. So we would run two or three groups of 15 a year. So we would go out and recruit businesses. A lot of the other entrepreneurial organizations in Maine would feed us people. And then we had a 10 week class that they went through, designed to help them really put the pieces in place that they needed to, to scale. And then they had some one on one consulting with myself and my co-facilitator.

Yury: Gotcha.

Rich: It’s interesting to hear that million dollar mark is kind of like a magic number for success. So this podcast obviously is about growing Maine businesses. How do we get our Maine businesses ready for growth?

Michelle: I think we’ve got to look at… I have a little quiz on my website that listeners can take and it’s, “Are you ready to shore up or are you ready to grow?” And too often I think businesses think they’re ready to grow and they push growth, and what ends up happening is they end up kind of running up against themselves. So the systems aren’t in place, the technology isn’t there.

Michelle: Their people, their culture isn’t ready to grow and they almost intuitively, I don’t even think they know it, but subconsciously it starts to get hard so they pull back. Sometimes the question is, “What do I need to shore up to grow? What do I need to get ready for in order to grow?” And I think that’s the question companies should ask is, “What do I need to… How do I need to shore her up my foundation so that I can handle growth?”

Rich: So what are some of the issues that would come up or what are some of the clues that I need to focus on shoring up before I start to grow? What are the cracks in the pavement or the chinks in the armor, and I can only come up with those two analogies right now?

Michelle: Perfect. I think the number one thing is stuff starts falling between the cracks. So a business often will just start to get beyond where the entrepreneur can touch all the pieces, control all the pieces, and they almost get afraid of growth or they try to push through it without really having somebody to delegate to, a system, a process.

Michelle: In the early years when my husband and I ran the construction company, we could touch everything. I could touch every employee. When we had 60 employees, I needed different systems, operations manuals, I needed an HR consultant and I needed cash flow in a big way. And I think that’s the other thing businesses don’t realize they’re going to need is cashflow. And when things start to grow pretty quickly, cashflow can get really tight.

Yury: There is fear of success, fear of failure. Is there a fear of growth? Could we be subconsciously sabotaging ourselves?

Michelle: Absolutely. And it was kind of following up on that last question. I see it all the time. I see when owners call me and they say, “Hey, I want to grow.” And then when I had a client this afternoon, we were interviewing somebody to actually start to take part of the business, and halfway through the interview he started kind of backpedaling.

Michelle: He’s like, “I really want to grow.” They’ve got the revenue, they’ve got the clients to grow, but while it means, Yury, I have to give some of the responsibility and some of the control to you and that gets scary. Like this is my business. I had this vision, I’ve brought this thing to life, and in order to grow I’ve got to let go, and that’s where people get wiggly.

Michelle: The other thing that I see is when people are in a space that’s too small for them or the revenue gets really tight or cashflow gets really tight, it’s like, “Oh, I don’t have space to grow if I’m in a small office.” I saw this with a client recently, they moved to a bigger building and it was almost like the revenue just started to flow in, but like their mindset, all of a sudden it was, “Okay, I could bring another person in, I’ve got space for that person.”

Michelle: And when we’ve got a little bit of bumper with cashflow, it also gives us permission to grow. So I think that fear can set in when, “Oh my goodness, I don’t know how I’m going to make payroll next week,” there’s no way that I could grow. And so those things, sometimes consciously, but often I think subconsciously we bump up against that, “Wow. I’m a little business.” I see that a lot in the trades. It’s a lifestyle business. My dad was in this business, my grandpa was in this business, and there’s a mindset that we’ll always be small.

Rich: As a business owner, like a lot of the things that you’re saying are definitely hitting home for me, I have to admit. So as an owner, how do I build a business that will run even if I want to step away or take on new responsibilities or just shift my responsibilities within the company. What are some of those steps?

Michelle: So one of the steps, what my husband and I did is, if I think about the wall that’s next to us here that everybody can’t see, we literally mapped out our entire business on the biggest whiteboard you’ve ever seen. And then we began to put systems in place and create manuals.

Michelle: We actually created a manual that it would have been franchisable, it was that level of detail. What ended up happening as the result of that is I could kind of… The E Myth book by Michael Gerber that we’ve all read years ago, we really took that to heart and the paper trail was so solid and then we began to hire people that could fill those roles.

Michelle: And our org chart was always four or five people ahead in numeric order of what role did we need to hire next? So I think it’s that, and I also think it’s looking at how can we sell more to existing clients. We often overlook the low hanging fruit, the stuff that’s right in front of us. In going after growth, I get busy, “Oh, I’m going to go do new clients.” But what could bring in revenue right now in my business that I have, is within reach, so that I could set myself up for growth?

Rich: I absolutely agree that we get so excited, especially because so many entrepreneurs are salespeople at heart, that the chase or the acquisition of new clients is so much sexier than the client retention and just going back to them and asking them to buy more or to sell them more.

Michelle: Yeah, the shiny things. We get so distracted and I think if we’re going to grow, we have to say for at least a season, I’m going to put that in the parking lot. I’m going to put that idea in the parking lot for six months or a year and I’m going to keep focused on doing that thing that we do best and that’s most profitable so that when we get to the $1 million dollar mark or the $5 million mark, well then I can take a look at that shiny thing.

Rich: So for my sake and for the people at home who can’t even see the brick wall behind me, when you’re talking about you and your husband basically wrote down everything on this giant whiteboard. What did that look like? Are you talking about what responsibilities there were, what offers you had, what products? Like what did that look like visually?

Michelle: So we had five different binders and one of them was the roles in the company, the responsibility of each role, how we would divide those roles as the company grew. We had literally a sales process from initial phone call to two years after the remodeling project was done. Every single step. What could be automated? What did we need people to employ?

Michelle: We had all of our safety in job site and everything from the personality assessments and how we put our traveling teams together, because for a couple of year period, we built all the American hotels in the Midwest. So we worked in seven states, and so we had manuals about what that looked like for travel. We also did a lot of strategic planning. So we would go away four weekends a year and plan, and look at where we are, what services did we offer.

Michelle: We also continued to study our industry. What we found in construction was everybody was chasing bidding and I’m bidding against three other companies, and we one year were sitting doing some strategic planning and asked ourself the question, “Why do we have to bid at all?” And so we spent the next year creating a business and creating a process where we no longer did competitive bidding, and that was really transformational for the company.

Rich: Very interesting.

Yury: Are there any downsides to growth?

Michelle: There absolutely can be. I’ll never forget, we grew so fast and as you grow, once we hit 20 some employees I think it was in Minnesota, there’s different HR laws, there’s different things you need to be aware of. And a guy quit and he’s like, “Well, you need to offer me COBRA.” And I was like, “No, I don’t.”

Michelle: Well, that’s against the law, and we realized very quickly we needed an HR consultant. So growth can be painful and if you’re not prepared for what’s next, there can be some liability, there can be some risk. Also the culture changes as we grow. We were a very different company when we had six employees than when we had over 50.

Yury: So do you know that the culture is changing and you need to adjust and facilitate the change?

Michelle: So we try to be really purposeful all the way through. We did construction very differently. I did a lot of motivational, fluffy stuff that my husband would just roll his eyes at and go, “Oh my gosh, here she comes again.” I practiced all of my content on my crew first. So we were very purposeful. But one of the things to look for is high turnover.

Michelle: Just a low energy in the office, jobs not being done well, communication not happening. It’s like if the three of us are in an office every day and I can tell, hey, Yury, you’re down today or you’re having a bad day. When there’s 50 and one of my guys is in a different state, it’s really hard to know. So now I’m relying on my leaders to give me feedback.

Michelle: And so when something’s communicated, I can communicate it to the leader or at a whole team meeting. But the day to day stuff can slip. And so how do we stay on top of that?

Yury: I’m very fascinated by the subject of innovation and I think innovation may be one of those engines of growth or can precipitate growth. How do you nurture innovation in the organization that you anticipate to grow?

Yury: I think it’s constantly giving people permission to make mistakes, to ask big, bold questions. And I think it came from looking at how much money we were spending on estimating and bidding. And we were like, “If we had this revenue, what would that look like?”

Yury: And so it was somebody in the office who said, “Well, why do we need to do that? Is there a different way to do it?” And so I think innovation ties hand in hand with culture. When people are engaged and they’re supported and they feel valued, I feel like bringing my ideas, it’s a safe place. I can do nutty things. And also I think there’s a caution of sometimes we chase innovation for innovation sake, when sometimes the best thing we should do is stay the course and do what we do really well.

Yury: And I think that’s where strategic leaders or owners asking for outside help or staying in touch with the industry, you know when it’s time to innovate more quickly and you know when it’s time to just hold the line.

Rich: Michelle, I’m listening to you and just really impressed and blown away by the growth of your business. And this all sounds wonderful and it sounds like everything went smoothly, but I’m guessing at some point it didn’t.

Michelle: Yeah.

Rich: Can you share with us any story that may come to mind about some moment when you took a misstep during this growth process, and then what did you do to right this ship?

Michelle: So I can think of a bazillion that come to mind, but I, as a young woman, I wanted to be a motivational speaker. And so I put all my eggs in that basket and I had a lot of people saying, “Michelle, you should be writing and you should be coaching and consulting, and you need a wider lane.”

Michelle: The other things mentors told me early on was you need a niche. And I was like, “No, I like to do a lot of things. I’m going to do a lot of things. I’m going to chase shiny things.” And so I was very much a generalist. I was fortunate to be able to grow the business, but when 9/11 hit, my business went away. And within 48 hours after 9/11, I had-

Rich: I’m sorry to interrupt. Was that the construction business or was that the consulting?

Michelle: That was my consulting and speaking business. My business literally died. And then I had to ask myself the question, “How am I going to get back in the industry? Am I going to listen to people saying you need to create a niche? Am I going to widen my lane?”

Michelle: Because speaking is often one of the first things to go. And it was devastating. And there were days where I was like, “I don’t think I can do this. Maybe I should go get a job.” And from the time I was 21 I was an entrepreneur and that sounded more frightful to me than kind of regrowing the business. But it was definitely on the table.

Yury: I was thinking about the answer that you just gave, and I was, I guess, more or less a personal thing. How do you overcome that, the fear, the resistance, that’s number one? And then number two was, and I think Rich can also relate to it.

Yury: It feels like we actually have the answers we need, we actually know the direction that we need to be heading, but for some reason somewhere along those lines, we have this narrative that says, “Well, maybe that’s not the time. Maybe that’s not a good idea. Maybe that’s not the right idea.”

Yury: Because he said, or she said that may not necessarily work for you, but you still know that it’s the right thing to do.

Michelle: Exactly.

Rich: How do you actually implement it? Because this is probably my number one problem, is I know what I need to do. I’m not always right, but I know what I need to do, but I can’t seem to take that execution step as often or as early as I think would be good for my business.

Michelle: So I have a simple basic practice, I call it a one a day. And I write down that most important thing that I have to do every day on a sticky note and I stick it either on my binder if I’m on the road or I stick it on my computer if I’m at the office.

Michelle: And I had a coach early on was like, “Michelle, if you can do those things and just one small step every day, it’s that gut feel,” because you’re right, Yury, we do know, we just often need others to give us permission, and to get in the habit as we start to do that stuff on a regular basis, just like anything else, exercising or walking the dog, it becomes a habit.

Michelle: And so I think as we flex that muscle, we more easily walk through that fear. If we try to do it in fits and starts, I think that’s where we get stuck. It’s like, “Oh, I put it off, I put it off. I know I should do this. I know I should do this.” Well, it’s like the snowball rolling down the hill. The thing is getting bigger and bigger.

Michelle: Well now to take the step or to do that action requires a lot more effort than if I’m just consistently doing one thing each day.

Rich: Yeah, definitely building those habits. I’ve heard you mentioned a couple of times that you have a business coach. So you are a business coach though, like it seems like why would Michelle need outside help? Is there a stigma around business owners going to get extra help, and what do you think about things like that?

Michelle: So I’ve had a coach since I was 21 years old.

Rich: Same person or different ones over the years?

Michelle: Different ones over the years, depending on really what my focus was, what my area of weakness was, what I was really struggling with, what I really needed from the business and the next season. I think there’s always a stigma in asking for help. I had a a woman tell me years ago she said, “You know Michelle, only the truly strong and only the truly wise ask for help.”

Michelle: And I was probably 20 when I heard that, and I didn’t really understand it until years later. It’s hard to ask for help because I think especially as a business owner, I think I can do it myself. We work on our own, we take on this challenge that a lot of people will never take on, and we’re stubborn and sometimes we have big egos and that can all get in the way.

Michelle: But for me, the thing that I think really two things stood out as a young speaker, I had a mentor to say to me, she said, “Michelle, 90% at least of speaking, is all about who you are. And the better you are mentally, physically, the more you have your life together, the more impact you’re going to have.” And the other thing she said is, “You have no business being a coach if you don’t have a coach. If you don’t know how to be coached or won’t allow yourself to be coached, you have no business doing that.” And I took those two things to heart.

Rich: Yeah, that totally unlocks it.

Michelle: I was like, “Oh, okay.” And I have… It’s almost like, she’s since passed away, but I have this like fear that she’s like somewhere, like, “I know what you’re doing.” And to me it’s been a game changer.

Michelle: It’s like often I know the answers, but I need somebody else to say yes. There’s other times where I’m completely blind to what’s right in front of me and my coach will say something and it’s like, “Oh, I get it.” I also am very accountable to my coach for my financials. So when I say I’m going to sell X amount a month, my spreadsheet from my coach actually turns green if I’ve hit that so we know if I’m on track or not.

Michelle: So there’s some accountabilities with that. I think a lot of owners get wiggly when I start saying, “All right, what’s your revenue to date? What’s your sales goal a month? What’s your sales goal per day? What’s your profitability?” People often are like, “Well, I don’t know.”

Rich: Right. Too often we don’t.

Yury: I really like what you said about the coaching, it’s such a great nugget there because we need to scale up ourselves before we can start the conversation about scaling up the businesses. So it’s like you’ve got the chicken and the egg, right? So anyway, here’s the favorite question of the show. If you could change one thing about the main business ecosystem, what would it be?

Michelle: I have a heart and a passion for the trades. So if I could change one thing, it would be more visibility, more training, and more promotion for the trades. I read something last week that said there’s over a million jobs in construction open right now today. And all of the contractors that I work with in the state of Maine, there’s nobody wanting to go into the industry and there is a lot of money to be made in the industry.

Michelle: I don’t always think the trades get the same air time as some of these innovative, more sexy companies that are popping up in Maine. And I have been an advocate of that for years. I don’t think it’s always the popular voice, but there’s a lot of our economy that’s driven by the trades and I think in the next decade, the young people that go in and start to take over some of these companies or start their own, there’s going to be a lot of money to be made.

Rich: Absolutely. And we need to fill those jobs because a lot of times they just cannot get the work done because there’s not enough people going into those. And it could be that there’s a stigma against trades, and it’s unfortunate because there will always… That is a very difficult thing to outsource overseas.

Michelle: Yeah, we can’t.

Rich: Right. You’re doing a business retreat this fall. Can you tell us a little bit about that?

Michelle: Yeah, so I am doing a business retreat October 18th and 19th at SMCC. It is a two day retreat designed to help business owners who are ready to grow in 2020, really create a plan to do that. So it’s an intense deep dive. It’s created for companies that are already stable, that are ready to go to the next level, and we’ll have companies coming from all over.

Rich: Can you share with us the price point for this event?

Michelle: The price point is $1,995 for the weekend, so it includes Friday and Saturday, food both days. We have a cocktail party Friday night.

Rich: Sounds like an awesome place, and what size business should we be at?

Michelle: I would say you should be… the sweet spot is those looking to go over a million. We have a few that are smaller than that that are attending and we have a couple large companies that I’ve been working with for a long time.

Rich: All right. And can we find this information at your website and register there.

Michelle: Yes.

Rich: Excellent. So that leads us to the question, what is that website, Michelle, would you tell us?

Michelle: It is nu-yar.com.

Rich: Excellent. Well, I just want to thank you. This has been great, especially as a business owner it’s just been really eye opening for me. So appreciate you coming by Michelle, and sharing your expertise.

Michelle: Thank you both for having me on.

Yury: Thank you.

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