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Episode 23: Family Business Succession: When the Next Gen Rises

In this episode of the Family Biz Show, host Michael Palumbos was joined by guests Michael Palumbos of Family Wealth and Legacy in Rochester, New York, Justin White of K&D Landscaping, and business coach Jonathan Goldhill. They delved into the dynamics of family business growth, leadership, and the intricacies of transitioning between generations.

Justin shared his journey, starting from when he took a significant role in his family's landscaping business during the 2008 financial crisis. Under his leadership, K&D Landscaping grew from a $1-2 million operation to a $10 million enterprise. This growth was not just about expanding revenue but also about creating a stable and enriching workplace for the community and his family.

Jonathan Goldhill, as a coach, played a pivotal role in this transition. He emphasized the importance of working on the person before the business, fostering a vision, leadership skills, and an environment where candid conversations can thrive. He highlighted the significance of aligning personal and business values, and how this alignment can drive growth and fulfillment.

The discussion also covered the challenges of family business dynamics, particularly around issues of equity, roles, and expectations. Justin and Jonathan highlighted the necessity of open communication, setting clear goals, and maintaining alignment with core values to navigate these challenges effectively.

Additionally, they touched on the strategies that have enabled K&D Landscaping to achieve consistent growth, including focusing on core competencies, innovating within their space, and maintaining rigorous budgeting and financial management practices.

Overall, the episode provided insightful perspectives on leading and growing a family business, emphasizing the importance of personal growth, clear communication, and strategic focus in achieving sustainable success.

Watch the entire episode!

Episode 23 Transcript


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Michael Palumbos: Well welcome everybody to the family biz show. I am your host Michael Columbus with family wealth and legacy in

 

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Michael Palumbos: Rochester, New York. And I just want to say thank you all for being here. We have got a great show. Today we're going to be talking about the new ambassadors of the community. And when the next gen rises to the occasion.

 

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Michael Palumbos: We have two incredible guests. We've got Justin white with us and Jonathan gold Hill. Welcome, gentlemen, appreciate you joining us today.

 

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Jonathan Goldhill: Thank you.

 

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Justin White: Yes, Michael.

 

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Michael Palumbos: So as we always do you know what I'd like for you to do is Justin. If you could just kind of give us a synopsis of, you know,

 

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Michael Palumbos: Your story, you know, the family business. Do it. We'll do the two minute version because we're gonna spend the most of the time talking about that. But how did you know give us a little bit about it. How's that

 

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Justin White: Sounds like a plan. Well, thanks for having me on. Today, Michael excited to dive into the story. So

 

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Justin White: I you know I my parents started a candy landscaping back in 1986 small mom and pop family operation and we talked a lot about that business today and fast forward, you know, two minute version. Right.

 

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Justin White: I was about 2526 in the transition from the first generation to the second generation and my brother, my sister and I were given the opportunity to buy into our family business and

 

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Justin White: I was appointed CEO. Shortly thereafter, and over that course of the last five years, Jonathan and I have been working together. And we've successfully grown the business from

 

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Justin White: You know about a one to $2 million organization to today, how mean $10 million organization with just about 100 employees. So really an exciting story a lot of ups and downs. Right.

 

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Justin White: It's never this nice vertical

 

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Justin White: growth curve. It's always you got all these these ups and downs and emotions of the family business. So we're excited to dive into some of that.

 

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Justin White: I I live here in Santa Cruz, California. We live right here on the Central Coast. So we do a lot of coastal beach homes.

 

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Justin White: We do maintenance and we also do industrial and commercial large scale installation primarily in the public work and prevailing wage sector. So that's kind of our business. That's our little synopsis. And we're excited to dive deeper into it.

 

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Awesome. Thank you.

 

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Michael Palumbos: Jonathan. So, as I always say, you know, how did you end up working with family owned businesses and give us give us a little bit about your story.

 

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Jonathan Goldhill: Sure. So originally from New York raised in New York moved to Los Angeles. At the age of 20

 

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Jonathan Goldhill: My family had a very large clothing manufacturing company making men suits back in Philadelphia in New York.

 

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Jonathan Goldhill: It was sold when I was a young child, my grandparents continued to operate it. But it didn't make it through the fourth generation there just wasn't enough interest from family members at that point. But it was very large and so

 

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Jonathan Goldhill: It's been off a lot of money to to the children and grandchildren gave me a little bit of freedom to get started. I moved to California.

 

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Jonathan Goldhill: And bounced around a little bit got involved in some entrepreneurial ventures started in art and clothing company. I thought was going to be very successful.

 

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Jonathan Goldhill: But it wasn't family and I had a really bad partner choice. He was reckless user of drugs and other things that got

 

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Jonathan Goldhill: Problematic to manage. I went back to business school. I ran into some guy, his name was JOHN DAVIS, he was working in a corner office and

 

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Jonathan Goldhill: JOHN DAVIS. If you don't know him is a very successful family business consultant who

 

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Jonathan Goldhill: went to Harvard. And I thought, family business. That's pretty interesting. But I knew I was going on the entrepreneur and consulting track and I was consulting entrepreneurs and built an organization.

 

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Jonathan Goldhill: That consulted train and finance entrepreneurs. We grew that to a largest regional company and with a national

 

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Jonathan Goldhill: Recognition and brand, if you will.

 

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Jonathan Goldhill: And so I've always been consulting entrepreneurs and and family businesses for 30 years but I started to realize like the assignments and the clients that I enjoyed the best were the ones where there were family and they were family issues one

 

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Jonathan Goldhill: They were more loyal to their to their people and also to their consultants and coaches and there was more opportunity to work in between the

 

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Jonathan Goldhill: In between the cracks that you know the unspoken words that happened between a father and their son or, you know, siblings, and that I can play a good role in that space. So

 

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Jonathan Goldhill: Great. That's kind of my story. I'm a certified in scaling up coaching. I use some of the tools and concepts from EOS which you're familiar with and really switched to coaching from consulting and

 

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Jonathan Goldhill: And it's been a great shift. So that's my business and also just recently published a book where Justin is featured in the book. It's called disruptive successor, and it is a guide for driving growth in your family business people can find out about it at disruptive successor calm.

 

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Michael Palumbos: Love it. Again, thank you both for being here. We've got a lot to cover. And I, you know, realistically, this could be about a four hour seminar.

 

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Michael Palumbos: I opinion after talking to the two of you doing the pre the pre show prep. So everybody hang on to your hats and just kind of hold on here. This is there's a lot to go through

 

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Michael Palumbos: The one piece that I want to you know make sure that it's clear to people so that we, as we're going back and forth. You guys met each other around 2015, is that correct

 

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Michael Palumbos: Working together.

 

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Michael Palumbos: For, you know, a short period of time. It's not like it's, you know, a 30 year or 20 year relationship or something.

 

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Michael Palumbos: So, you know, in a short period of time you accomplished an awful lot of things. So hats off to you.

 

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Michael Palumbos: And the way I kind of describe this then tell me and just and feel free to tell me if this feels right, but it's not like Jonathan came in and did the work.

 

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Michael Palumbos: It wasn't, you know, Jonathan. You know what, it wasn't like, you know, everything just you met Jonathan then boom magic everything you know came together.

 

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Michael Palumbos: But he was kind of like Yoda and you're kind of like Luke and you had a guide and a mentor and somebody to kind of put the guardrails up to say

 

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Michael Palumbos: You know, you might want to think about this and and help you to put together, you know, some systems that you might not have put in place, you probably wouldn't got there eventually. Because you're a smart guy and whatnot. But it sped up the process. Is that fair

 

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Justin White: Yeah, I'll dive, leaving a little deeper into that is Jonathan and when we first started meeting.

 

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Justin White: We didn't jump directly into the business and start just, you know, growing. It was a lot of talking about what we wanted to do what success look like

 

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Justin White: And also how to be a good student. So he really focused on on helping to set and build, you know, the parameters of what coaching and

 

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Justin White: You know, being a student of a coach, it's really because some people

 

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Justin White: There. They're great. And they're coachable, so to speak, and others feel like they already have all the answers, and they know what

 

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Justin White: What to do and they're not as coachable so we spent a lot of time, the first six months diving into what it means to be coachable what it means to be humble and what it means to

 

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Justin White: Question everything you know because when you think you know everything. And you don't need any more information than a coach isn't going to be able to help you.

 

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Justin White: So john that really took a lot of time to understand myself understand the family understand the dynamic

 

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Justin White: And help me, in turn, understand what I need to do to be a good student and to open up and actually embrace the opportunity that I had in front of me. So we like a lot of groundwork there before we really even started to take off and grow the business.

 

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Jonathan Goldhill: So Michael, if I can just add to that, I was a pretty avid reader of business books when I met Justin and

 

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Jonathan Goldhill: I've read a lot of business books i. And by the way, for anyone who's going to write a book, you really have to stop reading other people's books to write your own book if you're going to be covering some of this like

 

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Jonathan Goldhill: I had a completely fast from reading business books for a while but but I would mention a book one or two books. Maybe during the course of a session.

 

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Jonathan Goldhill: And within the next week. Justin had already picked up a copy and was you know hundred pages into it. So, you know, he was voracious learner of whatever it was that I was sharing so it worked really well like that.

 

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Michael Palumbos: That's great. One of the things we always say is leaders are learner's, you have to if you're going to lead you have to be learning so congrats. That's great. Justin hats off, I'm Jonathan, you know, just based on what Justin just said.

 

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Michael Palumbos: That's pretty interesting, because I would say most coaches dive right in to let's you know make an impact on the business and it was really smart strategically that you said let me make sure I'm making an impact on the leader first

 

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Jonathan Goldhill: Yeah, you can't change the business, unless you can change the person. First, I think. Right. I mean, it's just like if you want to be an entrepreneur. The first thing you should probably work on is your mindset.

 

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Jonathan Goldhill: What's your, what's your, you know, what is your own reality around being an entrepreneur. What are the obstacles that block you. Let's get clear about that.

 

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Jonathan Goldhill: And let's start we're removing that

 

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Jonathan Goldhill: Let's start working on your energy level your, your, your, you know, your excitement your enthusiasm, your ability to inspire other people

 

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Jonathan Goldhill: If you can't work on that stuff, then you can't really lead so lady leadership starts with having a vision and and then you can your strategy, your direction your plans, all that stuff cascades down from that. But first you have to have the vision.

 

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Michael Palumbos: Love it.

 

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Jonathan Goldhill: You know, and, and also like that, and this is a quote roughly from BC Forbes, who said, you know, the business of living is living not business.

 

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Jonathan Goldhill: So right you see you have to start with, what do I want my life to look like.

 

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Jonathan Goldhill: And then make your business goals around that. Because otherwise, you know, people who start with business goals and, you know, set up monsters you know business goals they crowd out their entire life.

 

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Jonathan Goldhill: And, you know, businesses, an entity outside of ourselves. But life is not an entity outside of ourselves. So to start with yourself.

 

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Michael Palumbos: We're, we're eagerly awaiting the the online course that you're going to develop around that so we can share that across the country because I think that six month course would be phenomenal for a lot of people

 

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Jonathan Goldhill: Thank you.

 

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Justin White: Um, what if I could add to that, just a little bit, one of the, one of the things that really stood out for me is developing the values

 

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Justin White: Not only the values of the business, the core values of the business which drives you know hiring, firing decision making all that

 

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Justin White: But the values of the leader to know what what is a leader value do they want to, you know, sit on a beach and work four hours a week.

 

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Justin White: Or do they want to create an opportunity to pick and choose where they want to put their time into their business and build a team around them.

 

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Justin White: And and so the values I think have to align and figuring those values out is not an easy task. We can all say I you know I i value family I value happiness I value money, whatever, but

 

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Justin White: Truly, deep down, when you go deep into the values you find a whole nother level of yourself that you didn't really know existed, and when you start to align those values of the leader and the fam.

 

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Justin White: With the values of the business. That's where you can unlock this hidden potential and we spent a lot of time going deep into the values and deep into the purpose of, you know, the business and where we are today.

 

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Michael Palumbos: Great. So your story is unique and I mean I've been doing this for a while, Jonathan, you've been doing this for a while.

 

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Michael Palumbos: I don't, I don't know, another story where at 2526 year old years old, the, the, the controlling generation turned over the reins. So he you know your parents.

 

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Michael Palumbos: Were still on the younger side of things, and still are on the young side of things, I would know because you know I'm in that age group that's very young.

 

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Jonathan Goldhill: Just so very, very young.

 

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Michael Palumbos: And

 

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Michael Palumbos: Tell us about that a walk us through what happened.

 

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Justin White: Yeah, lots and lots of unpack, I would say, you know, going all the way back. I want to definitely go all the way back to when I was

 

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Justin White: In school and you know in eighth grade, I was taking half of my classes I would walk over to the high school and take classes at the high school

 

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Justin White: Because I had elevated through middle school, junior high, so quickly that algebra and some of these other

 

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Justin White: Classes. I was going to high school for. And so by the time I got into like freshman, sophomore year I had already taken care of a lot of my math and biology and credits like that.

 

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Justin White: So I quickly. By the time I was 16 I was personally, I was done with high school and I was, I was. Yeah, I want to continue with some college, but I wasn't looking for a four year so at 16

 

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Justin White: I dropped out of high school, I was a junior, and it was it going into the second semester. So it was like around this time of year I went to my parents said, I'm kind of done with this. I feel like I've learned everything I'm tired of

 

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Justin White: The day to day high school drama and everything that goes into it. I want to work for the family business.

 

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Justin White: And this was in 2006 and we didn't know it. BUT THERE WAS A HUGE CRASH coming and as we kind of started to go into. I went into independent studies and started working for my dad.

 

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Justin White: I oh seven happened and and the idea of pouring all my time to the family business to make sure that we get through this became a big priority for me.

 

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Justin White: And so that really kicked me into the business at a very young age younger than most people. And of course,

 

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Justin White: I you know I was kind of like to add as a black sheep of the family. I dropped out of high school. How can my parents allow this.

 

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Justin White: But you know, I kept going and kept learning and I learned on the job. I learned from Foreman I learned from people who've been working for my dad for 1520 years at the time.

 

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Justin White: And so by the time I got to the point of 25

 

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Justin White: Decided after 30 years of marriage that we're going to go their separate ways. And my mom wanted to get bought out of the company.

 

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Justin White: It was just kind of the natural next step for me to take over as a CEO. Now it wasn't just. Okay. Sounds good. Here you go. So there's a lot of discussion back and forth. And I definitely was.

 

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Justin White: A than your average second generation would I really wanted it. And so I want my mom moved to Oregon. It opened up this opportunity for me to really become a peer to my dad.

 

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Justin White: And that's when we started to see each other as peers. Hopefully, I think he saw me as a peer and he basically

 

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Justin White: I don't know how he did it. I don't know if I could do it at 51 but he looked at me and he believes that I had what it, what it took to be the CEO of this company.

 

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Justin White: And he gave me the reins. He handed over the keys and that's something I think that is the key to our success today, is he stepped aside, not

 

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Justin White: Completely away, but he stepped aside, say, Hey, I'm gonna I'm gonna stand beside you.

 

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Justin White: And I'm gonna let you take some risk mo let you make some Gamble's and make some decisions that you know i'm going to support you. But, but they're going to be your decisions.

 

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Justin White: And the ability for me to have that autonomy and have that flexibility at such a young age. I was motivated and I was hungry to prove to him and my mom and my entire family that I had what, it's what it took.

 

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Justin White: And I see a lot of my peers, then and now. Still, who are just getting into that CEO role or maybe you know CEO role, you know, second in command.

 

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Justin White: The dad or mom will give them a little bit and then and then take it away as soon as they make a little failure but failure is how we learn.

 

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Justin White: And so when I made failures. My dad didn't take anything away, he just said, Hey, I know you can do better than that.

 

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Justin White: Or I'm a little disappointed in that. And that makes you go back and figure out what do I need to do.

 

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Justin White: To fix this, and become successful learn from that failure. So I think failure is really a key part of this whole growth process.

 

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Justin White: And that's where my dad being willing to let me fail and me having someone like Jonathan or me having Jonathan meeting with on a weekly basis and asking me, What's your motivation level today.

 

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Justin White: On a scale of one to 100. What is it, and if it's anything below in 99 we've got something to talk about. And so

 

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Justin White: That whole dynamic kind of was was the perfect antidote to I think what a lot of families don't get right

 

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Justin White: And that's, that's the control and and turning over control. So I think that's kind of where it started started when I was a young kid like high school, but it really came together at 2526 when my dad saw me, I think, as a parent, and give you that opportunity to fail. And then in turn succeed.

 

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Jonathan Goldhill: So Michael, Michael, there's this is a story that I didn't know all the details and background. It's a pleasure to hear that Justin and

 

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Jonathan Goldhill: Yeah, I had a different image of Justin as a high school student. So I didn't realize he had already finished half High School. By the time he was in eighth grade, which is really fitting, actually it makes more sense.

 

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Jonathan Goldhill: Because, like I've said earlier, you're really fast learner and a quick learner and hungry learner. But, you know, the unsung hero in this whole story is his dad.

 

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Jonathan Goldhill: Yeah, right, because there are not that many dads that would step out of the way and and say what he's, you know, and act like appear and, you know, give him the rope, you know, to hang himself or fail.

 

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Jonathan Goldhill: And just say, you know, you can do better. So that, that's a that's. Those are really encouraging words. And I've always candles very quiet understated.

 

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Jonathan Goldhill: Person. And so I think that he is. He deserves more credit than then maybe I've, I've given him.

 

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Jonathan Goldhill: And I've given a lot of the credit to Justin. In the past, but so that's that's an interesting point. The other thing is that, and this will be interesting to ask you, Justin, so

 

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Jonathan Goldhill: When you join in 2008 when you had to hunker down, you know,

 

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Jonathan Goldhill: A lot of kids join their family business out of a should

 

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Jonathan Goldhill: You know, or a must. My family needs me. I must take care of the family there they're asking, they don't you know they don't have the money to be able to pay outside people to help us we we have jobs that need to get done.

 

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Jonathan Goldhill: And, you know, or is your responsibility and I've seen this a number of family. So it sounded more like it wasn't a should, as it was more like I must do this, I want to do this so

 

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Justin White: It was and I look back in those times. And I'm so I'm so appreciative and grateful for those times, because what it, what it gave my dad and I

 

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Justin White: Is we were on the same side of this giant bag and they, you know, to my parents. They did everything they could to say the business and took out a second mortgage

 

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Justin White: They liquidated their IRA’s (edited) in late 2007 like the worst possible time they lost out on probably half a million dollars with the money at the time that probably would be five or 10 million today.

 

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Justin White: And that money is gone because they put it into the business and they put it into paying their employees.

 

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Justin White: And that was my, my parents probably as we look back. The biggest mistake, but maybe not because we kept people on payroll when we didn't have work.

 

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Justin White: And they were working at my dad's ranch. They were doing things like cleaning cars. I mean, we did

 

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Justin White: Whatever we couldn't keep people busy. There wasn't, it wasn't producing revenue. And that's what led us almost going bankrupt. But those those relationships of our employees and today we have

 

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Justin White: You know, I think six or seven that have been with us over 20 years that went through that with us and they are so loyal and we are so loyal to them because of that time.

 

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Justin White: But for me it was working in the field running the equipment running cruise during the day, you know, for five to three or four

 

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Justin White: And then from four to eight, I'd be in the office, we had this little office in an old hospital that was, you know, an old hospital room. It was really creepy.

 

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Justin White: But we'd be there until eight or nine we'd eat dinner there most nights and we'd be working on estimates and trying to land jobs.

 

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Justin White: That 20 or 30 landscapers rebidding on and it was just like a race to the bottom. It was it was ridiculous. And we land these jobs and we'd be like, we're going to

 

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Justin White: lose money. We'd have to figure out a way to not lose money on the job and that taught me a lot. That whole process of scarcity of like we just did this job lose money, but it's my responsibility to go out and actually be the foreman on this job. If I were to make a little bit

 

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Justin White: And and that whole dynamic and process brought us closer together, and also give me a respect for how bad things can get

 

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Justin White: And today, every single day I wake up just thankful that we have work thankful that we have enough

 

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Justin White: Of a schedule and Backlog to keep the crews busy, but I always know in the back of my head. Like I can turn on CNBC and the market could drop 2030 40%

 

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Justin White: And we may be out of work tomorrow we cancel the contract to get canceled like that. So, you know, you're always have that in the back of your mind, because I went through that. So it was very valuable.

 

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Michael Palumbos: It almost sounds to me like you've been blessed with two guides sound like you know when when you went through this in 2006 789

 

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Michael Palumbos: You had your dad there coaching you more than more than being peers and almost, you know, he was coaching you through. Alright, what's next, allowing those mistakes and being okay with that. And then 2015 you meet Jonathan, so you get, you know, realm to have that. That's awesome.

 

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Justin White: Absolutely, and I don't want to downplay my mom in this situation because she was really

 

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Justin White: When we go back to values and we go back to doing the right thing and we go back to

 

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Justin White: Opening the door for strangers. I mean, that's what my mom taught me at a young age of this kind of this Southern hospitality kind of mindset you know we grew up on a ranch raised horses and all the animals.

 

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Justin White: And so she was always the one behind the scenes like me, my dad would be out there working our ass off. But she would be the one in the back, making sure that money was in the bank account.

 

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Justin White: Because it's one thing to do the work. It's another thing that actually have cash in the bank comes to your employees. Right.

 

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Justin White: He didn't cash. Cash is cash and so she was always behind the scenes. Somehow, I don't know how to this day, she made it work. But she made it work. We never missed a payroll.

 

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Justin White: The check always came in with a she had to drive across town to pick it up from our vendor or whatever she did. She made it work. And she was definitely

 

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Justin White: A solid rock that me and my Dad could always depend on to no matter what challenges came, she would always make it work. I don't know how she did it shows me to work now was pretty

 

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Michael Palumbos: So let's fast forward. You know, there's a I use the term. These are my words. I say, you know, a business is a lifestyle business versus a, you know, an equity business.

 

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Michael Palumbos: But there came a turning point for you, somewhere along the lines that you know and feel free to fill in any gaps where it was.

 

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Michael Palumbos: I'm you know we're at 1,000,002 million dollars of revenue and it's time and it's time to grow. It's time to take this step up. Where was that initial turning point. And then where does Jonathan come into the story.

 

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Justin White: Well, if you'd asked to do, there's a lot of factors in play. I'll start with kind of the most shallow factor which is our generation millennial generation, like we're fascinated with my

 

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Justin White: Facebook or any social feed for millennials, you're going to see these pictures of these $15 million dollar mansions of like this is success. This is what you know you could do.

 

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Justin White: And there's. So there's this there's cultural change for millennials, I think, from you know where it went from the baby boomers of hey let's create a good family that can put food on the table because before that.

 

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Justin White: putting food on the table was a success in itself to millennials being very materialistic and wanting to just really it's ego. Right. Who has the biggest business, you go to these business seminars back before coven and it's always the same conversation.

 

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Justin White: What's your revenue. I mean, that's a question that everyone asks, and it's always comes down to this ego and and millennials. And I think it's changing a little bit with Generation Z, they're getting a little more humble.

 

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Justin White: But millennials and even the X generation were very materialistic. So at first it was kind of this ego driven thing of like I want to build a giant business.

 

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Justin White: But it quickly became a deeper purpose for me of, I'm going to create jobs for my community. I want to create success in a legacy for my family. I want to give

 

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Justin White: My family and my extended family, my friends and my community, a place where they can go and get a job, put their heart and soul into it and create a career.

 

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Justin White: Create a destination company where people really can can exceed their limitations and exceed their expectations of what success really is.

 

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Justin White: So, you know, it starts with materialistic and ego and it starts it quickly becomes a necessity and and a deeper purpose of providing opportunity.

 

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Justin White: For my family because let's go back to, oh 708 and I saw my family, my aunts and uncles struggling because they couldn't find jobs and they were unemployed and so many of my friends and

 

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Justin White: Relatives were affected by that I wanted to create a stable business that people can go to and be able to put their life's work into and be successful.

 

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Justin White: So it really transformed into something bigger. And the bigger the business, the more impact you will have. So that's really kind of the, the purpose of the growth is it came down to having a stable place that our family and my community can go to to be successful.

 

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Jonathan Goldhill: Michael I showed up at the what would have been, I guess an inflection point in Justin just getting the title of

 

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Jonathan Goldhill: CEO, and I think it was probably in the first nine months, we work together. You got that title, Justin.

 

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Jonathan Goldhill: And it was also an inflection point of hey, because I remember my first question is, you know, what specific, measurable results. Do you want to get from our coaching together.

 

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Jonathan Goldhill: And at the time, he was like, I want to be. I want a roadmap for how to build this into a $5 million company. And so that was two and a half, three x what they were currently doing. And so we needed to put that roadmap together.

 

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Jonathan Goldhill: And, you know, that was an inflection point like there was there's never been a dip, since it's been a, I don't know what they 35% maybe compounded annual growth rate. Every year there since

 

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Jonathan Goldhill: So,

 

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Jonathan Goldhill: I think that

 

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Jonathan Goldhill: What's the expression that the teacher, the student meets the teacher when the, when the, when the student is ready.

 

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Jonathan Goldhill: And so, you know, it was a perfect just before a perfect storm right he was ready and I showed up and you know it was it. It was a trial run to begin. So he was testing it out. His parents were his mom was probably not telling favor his dad was like, I'm not so sure about this.

 

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Jonathan Goldhill: And he was like, I, I need this and and my concept is always been

 

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Jonathan Goldhill: You know what got you here isn't going to get you there.

 

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Jonathan Goldhill: And I'm not suggesting that I'm the rich dad and the other dad was the poor dad, but like you need that other like, whether that's a father coach mentor type figure who's going to provide some alternative perspective and be a stand.

 

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Jonathan Goldhill: Take a stand for that other person you want to become you know or for that person you want to become. Sorry. Great.

 

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Michael Palumbos: When you met so you earlier you said I didn't hear that story that Justin shared with us earlier. What was your impressions of Justin when you guys first met, what, what was your, you know, that were the notes that you kept in your in your log that he doesn't hasn't seen yet.

 

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Jonathan Goldhill: I have to go back to them, to be quite honest, I don't know what they were either. And it's been, you know, we've had a enjoyed a close relationship with each other for the last half a dozen years I I don't you know I recall a young man who was aspirational and wanted to

 

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Jonathan Goldhill: To really grow this business and you know there was just some good fundamentals there.

 

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Jonathan Goldhill: I never had to help them in an area where I don't have in competence, so I don't know anything about landscaping, per se, right. I've worked with maybe 75 landscape companies, either through my seminars or through one on one or through groups.

 

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Jonathan Goldhill: But I you know I couldn't tell you how to lay down like you know

 

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Jonathan Goldhill: turf or you know how to put a rock wall so operationally, he was skilled in that. And that was always my value proposition was like you guys are really good at what you do.

 

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Jonathan Goldhill: And I'm really good at what I do, you know, most of my clients don't have college education or business degrees but they know how to landscape.

 

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Jonathan Goldhill: And they know plants and things like that. But I know business. I know business books. I know about leadership. I know all those like some of the soft skills and management leadership skills. And so it's it's been a good marriage for me with a lot of landscape clients. Great.

 

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Michael Palumbos: Um,

 

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Justin White: So Michael, if I could, I just want to add one more thing to this. I think as you transition as a second generation business owner and you move you know you work on your father, your mother for a dozen years

 

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Justin White: And you get to the point where you're like, I kind of, I think I've learned everything from them in

 

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Justin White: A think you take over and you start working with a business coach and when you find out is the business coach then provides you with this deeper like understanding

 

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Justin White: That you then go back and you ask new questions to your, to your parents that you've never asked before, and you unlock this new data and this new information that you've never learned before

 

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Justin White: So it's not so much that I you outgrow your, your parents and you become the CEO and you blossom with a coach, it's

 

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Justin White: You now go back to your parents and be like so. How'd you guys do this or what about this and you start to almost talk a different language that they understand

 

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Justin White: Because they've been in business for 30 years that your coach helps you unlock

 

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Justin White: And that right there that connection to this day has not only improve the relationship with my parents, and specifically, my father.

 

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Justin White: But it has helped me mine more information from him that I don't think I would have ever had access to because I didn't have the right questions.

 

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Justin White: And we always want to we always want to jump to the answer. Everyone thinks they have the answers.

 

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Justin White: But really, at the end of the day, to become a good leader. I think it's really all about finding and looking for the right questions to ask. And that's where Jonathan for me specifically is is helped me find those questions and then go and ask them to today and grow my own capacity.

 

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Right.

 

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Michael Palumbos: Let's change the topic for just a second. We'll come back to more about the the growth and whatnot. Let's talk about you, my notes are in here. Let's talk about the messiness.

 

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Michael Palumbos: The, you know, just the you've got family in business together. And there's a difference between generations.

 

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Michael Palumbos: So, you know, between the two between the two of you if you could just, you know, share, you know, Jonathan. And let's start with you this time.

 

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Michael Palumbos: Can you, you know, what were some of the, the family dynamic things that sometimes were messy as you were going through the last six years together. Do you mind sharing some of those. Yeah.

 

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Jonathan Goldhill: I think that

 

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Jonathan Goldhill: The white family is a highly functional family as families go so there wasn't. Fortunately, a lot of messiness. From my perspective,

 

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Jonathan Goldhill: There was

 

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Jonathan Goldhill: There was a need to bring Kendall into the coaching equation at one point and do some one on one work with him where he would reflect and so he was a participant, not just an observer. And so we did some work together and you know he didn't have the same zeal or

 

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Jonathan Goldhill: You know, excitement around the work. I think that that Justin did. And then, but he he participated, he fully engaged.

 

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Jonathan Goldhill: And Justin has a brother and a sister, a sister who's minimally involved in the business but a brother who was majorly you know like 100% involved in the business.

 

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Jonathan Goldhill: And there's sometimes friction between the boys Justin see older brother and you know the clear leader among the two

 

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Jonathan Goldhill: And chain to a hard worker. But he approaches things differently. And so, managing sometimes the the discord that occasionally shows up between the two of them.

 

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Jonathan Goldhill: And, you know, having them have like unfiltered conversations so that everything becomes spoken, you know, and you know sometimes

 

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Jonathan Goldhill: The conversation around transfer of equity, I think, is always a touchy subject as is the

 

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Jonathan Goldhill: The conversation around what should my compensation be, what am I worth to the business. So, you know, we've had some difficult conversations amongst the three or four of us.

 

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Jonathan Goldhill: Where I've been sometimes an observer. Sometimes a facilitator, but I think that's the messiness. I think is it's mostly around money and control for families.

 

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Jonathan Goldhill: Yeah, so I'm seeing it another another family business that that I'm just starting to do some work with and you know it's a very similar story there's a disrupter there and it's around control and yet it's more around control and that family, I think, than the money. Sure.

 

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Michael Palumbos: I have one of my mentors wrote a book. You might know Dean Fowler wrote love power and money. So any great into that thing. It's who you know.

 

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Michael Palumbos: Who loved who loved who most you know who's got control. Who's got the power. And where's the money going and it really does inside the family boil down to those things.

 

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Michael Palumbos: Allow oftentimes. So Justin, you know, as Jonathan's talking about that.

 

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Michael Palumbos: I, you, what would you say because obviously you've made it to the other side. It doesn't mean that you don't have things that you're working on, or don't have things where you've

 

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Michael Palumbos: fallen into chaos at Mall. You know, at times, but but you don't go from where you were to where you are today without having set up some guardrails, to make sure that those relationships, don't go off the reservation, so to speak.

 

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Michael Palumbos: Do you want to talk about how you're able to do those things. And what are you know some of the guidelines or what are some of the you know the governance rules that you guys have put into place to kind of keep you safe.

 

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Justin White: Yeah, there's a lot because it is a dynamic situation that's always changing. So at the very beginning, there was a lot of

 

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Justin White: Like back to the equity part of like how much, how much sweat equity, am I putting in the business. So yeah, maybe I'm getting a salary of of $80,000 but I think I'm contributing $160,000 worth of

 

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Justin White: Value. So that I want to see $80,000 a year in what we call sweat equity and does that. Does everyone agree with how you feel about your compensation. And the chances are probably not.

 

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Justin White: So then you got to figure out like how this works. And then how does the sweat equity work. Does, does my, my father, who, you know, let's say on 60%

 

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Justin White: Is he like a hard stop at 51% and he's never going to go below that, or is he willing to come down to like a three way partnership and maybe one day be more of like a five or 10% partner.

 

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Justin White: Given the business scales to where we want it to scale. So I think it's a lot of discussion open communication which comes down to having to be extremely candid, how to be extremely open and honest with your feelings, because you know agreements aren't worth anything. If

 

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Justin White: Like inside. You really don't agree. You're just agreeing to agree to in the conversation or in the meeting, but deep down, you're like, this is BS. I don't like I'm getting totally screwed here.

 

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Justin White: Then you're going to have issues down the down the road. And it's so important that you're completely open and sometimes you may hurt the feelings of others, you may

 

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Justin White: Frustrate and and create anger from others. But if you don't share your true feeling

 

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Justin White: Then it's always going to have that little bit of resentment and you're always going to have this little

 

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Justin White: You know chippy conversations and people are going to wonder where it's coming from, because you agreed to this in the meeting, but then you're showing frustration around this agreement.

 

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Justin White: So extreme candor is important. I think the other part is expectation of family owners and family members family employees.

 

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Justin White: Who were owners. So for my sister. You know she's kind of she's moved to Hawaii and she's transitioned out of the business as an employee.

 

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Justin White: But remains as an owner and in a small minority partner but we continuously have conversations about, is that fair, is it fair for her to be an owner, but not an employee.

 

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Justin White: And so that word fair comes up a lot in family discussions and it really has no business to be in the discussion because let's face it. Life isn't fair.

 

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Justin White: Things don't happen in a fair manner like nature, nothing's fair in this world. And so when you start bringing fair into the conversation.

 

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Justin White: You can get derailed pretty quickly. So we really try to stay away from that and talk more about what is, you know, what is an agreement that we can come to that we all maybe don't love, but we can live with and that's where that extreme candor comes back to play.

 

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Justin White: We have my cousin Jessica coming in as an owner. And so we've put her on this plan of

 

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Justin White: Coming into the shareholder meetings and starting to immerse herself with the ownership team and January 1 she's going to become a 3% owner in the business, which

 

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Justin White: We're all super excited for because she's put so much of her, you know, blood, sweat and tears into the business. We're really excited to now build a reward her for all that hard work that she's done

 

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Justin White: But it also adds a level of complexity that I'm not sure we fully fleshed out

 

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Justin White: So yeah, we may be on the other, other side of of the initial you know process, but we're still in the middle of the discovery process of growing the business and bringing in more family owners.

 

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Justin White: This will make a five person ownership team as of January 1 which, you know, whenever you get over three people it tough.

 

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Michael Palumbos: Share agreed.

 

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Justin White: For dynamics, but those are just some that we've come up with and run into and Jonathan hate on the compensation one which is always a hot topic.

 

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Justin White: And we've got a lot of good tactics on dealing with those. I don't want to get too much into the weeds but

 

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Justin White: I would just say for the listeners out there should be open be candid and and have another you know non biased third party person.

 

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Justin White: In the meeting as much as possible, because otherwise you can go quickly from a discussion to an attack.

 

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Justin White: And you know as family members, like me, my brother. We grew up, you know, fighting and and we've been best friends. We've been mortal enemies. Over the course of our you know 30 years

 

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Justin White: But today, we're like best friends, you know, and I think that has a lot to do john consult

 

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Justin White: I think with us just finding out like it's like almost like a fight to the death and one of us is going to remain in the business and the other one may not be in the business anymore.

 

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Justin White: But having that mediator having that third party in the meeting helps to kind of calm the conversation down and accomplish a lot more great

 

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Michael Palumbos: Jonathan. It sounds. You know, like the coaching process you have and jump in at any time, but

 

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Michael Palumbos: When you start with the leader, you're talking about teaching them to be learners teaching them how to be a leader, teaching them.

 

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Michael Palumbos: You know, what are the skills necessary to build that that base of the pyramid, so to speak, that foundation that they can they can build from

 

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Michael Palumbos: And then when you're working with the teams. The, the word that came to mind for me was how do I get them to trust one another to be able to have these conversations

 

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Michael Palumbos: And and to and to have conflict between themselves without, you know, a healthy conflict. Not that you know not you know and be able to voice themselves. Does that sound fair that you know trust in conflict kind of those foundations for the team.

 

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Jonathan Goldhill: 100% I mean everyone read the book, the five dysfunctions of a team by Patrick lunch. God, I think every leadership team is probably read that book by now.

 

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Jonathan Goldhill: You know, trust conflict commitment. Those are some of the basics and the foundation is based on trust. So the ability to have difficult conversations with each other and hold each other accountable. I mean,

 

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Jonathan Goldhill: You know, part of my coaching. When I first onboarding Justin and all clients back then was, you know, some ground rules around

 

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Jonathan Goldhill: How the coaching is going to work. And those ground rules also play well with the leadership team. So one of those ground rules is to call it and be called on it.

 

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Jonathan Goldhill: Meaning to if you see something that's foul, you know, call it out if you are playing foul yourself. Be willing to be called out and so

 

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Jonathan Goldhill: You have to be able and willing to have those you know radically Candace conversations with your, your coworkers, so I think

 

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Jonathan Goldhill: You know, again, I, I think that the family has done a good job of creating the context for that to happen.

 

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Jonathan Goldhill: And again, I see candles on the call. But I think he's the unsung hero here. He's the guy who creates the framework for this is okay. People can engage in conflict and we'll work through it because we're, you know, we're working together as a family. That's what we do around here.

 

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Love it. Okay.

 

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Michael Palumbos: I'm gonna be sending an email to Kendall afterwards because I got a whole nother show in the back of my head.

 

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Jonathan Goldhill: Yeah, we're gonna be flies on the wall and out one

 

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Michael Palumbos: There you go. Um, so one of the things that you know is difficult, especially in a family business. And, you know,

 

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Michael Palumbos: For those who haven't, you should read. Good to Great the Jim Collins thing, you know, let's get the right people in the right seats doing the right things right and and you talked about that Justin that you know

 

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Michael Palumbos: Even at times it was really hard. What's that process like inside of the family business.

 

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Justin White: Well, it's difficult, because in the family business, you have the family owners who all want to be at the top of the company.

 

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Justin White: But that doesn't mean that that's the right place for them. And so one of our core values is humility and having, you know, a deep understanding of humility and also a deep understanding of respect.

 

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Justin White: Allows you to go down that road of having a conversation where should I be as part of this ecosystem of the business and it doesn't always mean you should be at the top. And that's where the humility comes into place. Because you know a lot of people want to

 

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Justin White: I don't know. They have this preconceived notion of where they think that their, their values should be put or where they should be in the business. But once you start breaking it down and you really have these conversations you find that

 

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Justin White: They're much more of a you know team builder than an outside salesman or they're much more of an outside salesman than an internal team builder and and whatever their behavioral skills and

 

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Justin White: Assets really aligned with you got to find a way to get them in that position.

 

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Justin White: And so it you know having the conversation with a family members who are also owners can get really difficult to time and it can feel like you're disrespecting them or, you know, not being fair

 

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Justin White: So you have to have that, again, not extreme candor and that humility to talk about where you're best suited to be in this business and where you're going to be most happy.

 

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Justin White: As to the rest of the employees, you know, it just comes down to really analyze your people.

 

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Justin White: And you know, we use a lot of different tools we've used disk before we're currently using predictive index, which is fabulous. We really love it and it helps to align the behaviors with the behaviors of the

 

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Justin White: Behaviors and needs of the position. So someone who, you know, really enjoy like really, really likes to follow the rule will be a better accountant than someone

 

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Justin White: Else. I mean, if you tell me the speed limit is 55 I'm going to drive 58 or 60 just because I don't know why it's just how I'm how I'm built

 

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Justin White: And so I'm not going to be a great accountant, because I'm always looking for ways to change and manipulate and and adjust. So really analyzing your people.

 

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Justin White: Using you know we have so much software available to us today using something that's going to help you give an insight into Where's where's the natural ability of people is going to help you put them into the right seats.

 

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Justin White: And then also it's follow up monthly one to ones is huge for us because you can get that feedback. The feedback loop of how the people are feeling now that they're in that position is really key.

 

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Michael Palumbos: Oh, do you know

 

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Jonathan Goldhill: And my goal. Of course, we use some of the classic tools used by

 

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Jonathan Goldhill: You know, the things that scaling up an EOS the function accountability chart. The, the General Electric top grading a be, you know,

 

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Jonathan Goldhill: Talent matrix, the people evaluator analyzer type tools. So we used and still use tools like that to make sure that people first are a core value fit. And second, that they're in the right seat.

 

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Jonathan Goldhill: And then there's an accountability chart that kind of this is the idealized organization.

 

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Jonathan Goldhill: And then people are they the right fit for that particular seat and what's the function or roles of that particular position so you know staying congruent to that methodology.

 

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Jonathan Goldhill: And making it, you know, using all these methodologies combined to make sure you get the right people, including the top grading system they use a lot of from the who Jeff smart and top grading methodologies to make sure they're getting the right people in the company in the first place.

 

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Michael Palumbos: Yeah. And I'll just chime in on that I did not utilize top grading in my own business for the longest time and

 

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Michael Palumbos: Five, six years ago I got introduced to that we started to go through that process and you know I have admin meetings, you know, interviews for the admin position.

 

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Michael Palumbos: And those are two, two and a half hour meetings in plus a lunch. And so, you know, even the smallest position. It's so important because if there's a

 

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Michael Palumbos: Values misfit if there's a miss, hire in a four to five person, company. It hurts an awful lot. So we want to make sure that we got that right. When we do the lunch, the whole team goes out to lunch with the person and so

 

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Jonathan Goldhill: Imagine having 20% of a large companies workforce be ineffective.

 

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Jonathan Goldhill: Well, that's what it is.

 

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Jonathan Goldhill: When one person out of five is not, you know, pulling their weight. Yeah, it's a

 

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Michael Palumbos: Good stuff. Um, we're seven minutes away. And I want to be, you know, cognizant of time.

 

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Michael Palumbos: I've got to, you know, what were your keys to 25% growth and some of the mistakes.

 

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Michael Palumbos: That happen along the way. And I know that we're, you know, we just might have to come back and revisit this, you know, six months from now, we'll get you back on here. Again, this is

 

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Michael Palumbos: I love everything that you guys are sharing, I hope that the listeners can, you know, really understand the power behind what Justin and Jonathan are sharing with us today. So

 

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Jonathan Goldhill: Growth, just in case to the growth and then you want to talk about the annual budget how you've been able to come so close to budget each year.

 

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Justin White: Yeah so cookies growth is knowing what you're good at and doing more of it.

 

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Justin White: Growth doesn't mean stretching yourself out. It may just mean in increasing what you're already doing and what you're doing good. So it's knowing what to say yes to and knowing what to say no to

 

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Justin White: And then innovating in that space and really owning the market share. So become the educator. So for us, like landscape maintenance HOA, specifically, we do a lot of education to the community. I write a weekly column.

 

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Justin White: We do advertising where we don't actually have a hook or a or a catch, but it's more like, Hey, did you know this. And so we do a lot of educating to gain market share.

 

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Justin White: You got to innovate, you got to be the number one provider in your space that is doing things differently. You don't even have to do it right.

 

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Justin White: If you're doing things differently and always analyzing how you're doing that, you're going to always have new customers coming in and your current customers are going to want to stay because they enjoy things always getting improved.

 

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Justin White: So innovation doing more what you're good at and setting clear expectations on growth. So if you just say I want to grow.

 

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Justin White: You're not, you know, what does that mean you want to grow 1% 100% but it's setting a clear expectation of over the next five years.

 

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Justin White: This is what every single year looks like. And we've done that since 2015 we've got it mapped out to 2030 and we got that the update that almost every quarter, but definitely every annual planning session.

 

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Justin White: So that's kind of the keys to our growth.

 

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Justin White: As for the budget. Yeah. For the last three years we've been able to come within 2% 1% of our top line or gross profit and our bottom line net profit budget. I mean, it's ridiculous. And I don't know how we do it.

 

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Justin White: I think the keys that I've learned is you got to bring everyone into the conversation of your annual budget early. So right now we're having conversations with

 

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Justin White: Only Young, who are forming, you know, asking them about how things are going. If they're going to improve or if they know how to change this.

 

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Justin White: You got to set your pricing up really, really good. We use a product called dynasty to set our pricing and keep estimating consistent

 

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Justin White: So no matter who's doing the big, you're going to get a very, very similar pricing that translates obviously into the into the income statement at the end of the day what goes into the bank.

 

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Justin White: And then it's measuring your budget every single week. And so you pick all the lines of your income statement and your balance sheet and you write a name next to every single item.

 

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Justin White: And you create KPIs around those buckets. So whether it's sales remark sales and marketing costs of goods sold labor.

 

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Justin White: You know, financial fees you assign someone and then you create a weekly KPI where you had your budget and then you have your, your actual and you review that weekly and you adjust. So right now, as of, you know, just

 

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Justin White: September 30 is the last close we were looking at everything or within 1% of our revenue that we set up the beginning a year with a 1% of our gross profit and

 

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Justin White: Profit is much higher than what our budget was I messed up there in a good way.

 

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Justin White: But we're looking good this year. And that's before covert even came a thing we set this budget and locked it into place. It comes back to measuring your KPIs. You're getting input from your team. I think that's key.

 

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Michael Palumbos: And in the end of that Jonathan

 

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Jonathan Goldhill: I just think that it's you know it, it's time. It's really putting in the time and focusing on getting a budget done a lot of clients that come to me. I asked them to do a budget.

 

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Jonathan Goldhill: They slap stuff together. They don't really look at each number they don't ask themselves, okay, how am I going to get to that number.

 

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Jonathan Goldhill: You know, so we kind of, I think that the there's probably more visualization going on here than with some of these other companies where we visualize what is the company look like

 

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Jonathan Goldhill: To be that size. I mean, Justin set out to cut operating expenses, I think it was either pre covert or just as we were going into coven

 

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Jonathan Goldhill: And very rigorous about, you know, checking in on out on a regular basis and setting specific operating expense cuts.

 

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Jonathan Goldhill: And reductions and so really paying attention to it. It's, you know, I think a lot can be said

 

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Jonathan Goldhill: About visualizing what you really want. This goes back to the beginning part of our conversation. Visualize what you really want. What does it look like and then do the work to figure out

 

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Jonathan Goldhill: You know what needs to be removed. What needs to be fixed. Who needs to be changed. Who needs to be, you know, put into different seat to get to the result that you want, but like have a results orientation with no excuse kind of mindset. Great.

 

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Justin White: To have an accountability partner or a coach or someone who's holding you accountable to those expectations. Otherwise, if it's yourself. You're never going to, I mean,

 

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Michael Palumbos: I ever

 

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Michael Palumbos: I am a coach and I hired a coach to coach, my coach me through my business because, you know, sometimes it's just so hard to see.

 

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Michael Palumbos: That stuff. And when people find out what I'm paying my coach, you're like, Wait a minute. You're paying them more than you're charging us yeah I wanted somebody really, you know,

 

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Michael Palumbos: Just I really wanted to be held accountable and I wanted you know the right thing in there. And that's what I needed. Um, I want to really, we don't have time to go into the mistakes and I'm sorry, Justin. I know we wanted to talk about those things.

 

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Michael Palumbos: Jonathan tell us how to how if somebody wanted to reach out to you. How do they find you.

 

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Jonathan Goldhill: So you can find me through my website. The gold Hill group com you can email me. Joe and at the gold Hill group com

 

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Michael Palumbos: And I'm sure you're on LinkedIn.

 

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Jonathan Goldhill: I'm on LinkedIn.

 

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Jonathan Goldhill: That's a great place to find me Jonathan gold hill. The goal Hill group.

 

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Michael Palumbos: And the book is disruptive successors on Amazon. Make sure that you go out and grab Jonathan's book and

 

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Michael Palumbos: Dig into that you'll find out more from you know Justin in there. Justin for those you know that are listening, you know, in the California area in your area. How do they find you. What is your website.

 

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Justin White: Yeah, just Google K end landscaping will pop up. You can also find me on LinkedIn and there's a lot of ways to get ahold of me on our website only great

 

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Michael Palumbos: And I will

 

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Michael Palumbos: I will, sadly, and I love

 

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Michael Palumbos: To get that. Sorry. Nope. You broke up a little bit.

 

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Justin White: LinkedIn or you can just Google can do landscaping.

 

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Michael Palumbos: Great. And if you go out to their website. It's really evident how the values of the company show up on that website and I love that it's worth going and taking a peek, so go and check them out candy landscaping.

 

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Michael Palumbos: California is what I googled and it was able to come up nice and easy. Gentlemen, this is been great. My name is Michael Columbus. This is the family business show with family wealth and legacy in

 

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Michael Palumbos: Rochester, New York, feel free to check out our website family wealth and legacy.com we love the shows and you guys were awesome. Really appreciate you sharing everything

 

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Jonathan Goldhill: Thank you very much, Michael. Have a great day great week, everybody.

 

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Pleasure.

 

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Justin White: See you guys.

If you’re a family business or a family business consultant and want to be on the show, share your story and help other family businesses, send us an email to producer@thefamilybizshow.com or fill out a contact form here!

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Michael Palumbos is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Family Wealth & Legacy, LLC is not an affiliate of Lincoln Financial Advisors Corp. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.

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