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Speaker 1: Welcome to Out of Money. I'm Joel and today I'm

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Speaker 1: talking bouncing back from bankruptcy and business failure with Phil Sanders. Okay,

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Speaker 1: So I met Phil halfway through a marathon a few

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Speaker 1: months ago, literally in the middle of the race. He's

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Speaker 1: a friend of a friend. We ended up running together

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Speaker 1: chatting for a few miles, and even though I liked him,

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Speaker 1: I definitely didn't think, Man, this guy should totally be

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Speaker 1: on the podcast. But you can learn a lot about

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Speaker 1: someone when you're running side by side for half an hour,

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Speaker 1: and it was clear that I'd only scratched the surface

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Speaker 1: of his story. Phil is a serial entrepreneur, and like

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Speaker 1: most entrepreneurs, not every venture has been a home run.

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Speaker 1: He's experienced the highs, the lows, and everything in between

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Speaker 1: when it comes to building businesses. Today, he runs a

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Speaker 1: company called Multiply, where he helps business owners sharpen their

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Speaker 1: strategy and build more successful companies. And the more I

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Speaker 1: learned about Phil's journey, the more I knew I had

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Speaker 1: to bring him on to share some of that hard

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Speaker 1: earned wisdom. So Phil, welcome to the podcast.

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Speaker 2: My friend man so excited to be here, and honestly,

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Speaker 2: I could never have imagined thirty minutes into that run

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Speaker 2: that I mean, you be sitting here a couple months

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Speaker 2: later on a podcast that's.

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Speaker 1: Cool, pretty goofy, right, pretty goofy. Yeah, amazing the way

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Speaker 1: life works, isn't it?

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Speaker 2: All? Right?

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Speaker 1: So first question I ask everybody who comes on is

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Speaker 1: what they like to splurge on. So craft beer is

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Speaker 1: certainly one of my things. But you know, I'm not

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Speaker 1: spending so much on craft beer that I'm not saving

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Speaker 1: investing for the future. What is that splurge for you,

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Speaker 1: my friend?

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Speaker 2: Yeah, I think over the last two years, it honestly

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Speaker 2: has been running. Like it's the thing that kind of

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Speaker 2: didn't make sense to buy a new pair of shoes

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Speaker 2: every two months, you know, and all that gear that

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Speaker 2: you need, like the gels and everything. But it's been running.

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Speaker 2: But also, I will say also this year it's kind

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Speaker 2: of been our kids. And we'll get into my story

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Speaker 2: a little bit more later, but you know, when you

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Speaker 2: go through a season of bankruptcy and literally every dollar

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Speaker 2: you're wondering if it's going to come through, where it's

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Speaker 2: going to go, how it's gonna get to you. All

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Speaker 2: these things, like some of the things you pull back

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Speaker 2: on are those kids activities like sports and stuff, and

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Speaker 2: so this was a big year for us to kind

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Speaker 2: of get back into this. We're getting the kids back

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Speaker 2: into stuff, and sports costs so much money. You got

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Speaker 2: three kids, you know, and so it's I would just

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Speaker 2: say that that was something and and I my wife

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Speaker 2: Ann and I intentionally were like, it kind of still

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Speaker 2: doesn't make a ton of sense, but we've got to

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Speaker 2: do this, you know. And we can talk through that

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Speaker 2: a little bit more. But that was a splurge I

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Speaker 2: will say that we went for and it's honestly been

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Speaker 2: so good.

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Speaker 1: I totally get that. And sports is one thing, and

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Speaker 1: then summer camps is another that we now we've got

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Speaker 1: two girls going to summer camp next year, and so

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Speaker 1: like the budget line item for summer camp is pretty big,

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Speaker 1: and so you have to like carver it that as

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Speaker 1: a priority and really start saving intentionally for it. And

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Speaker 1: that's on top of sports and stuff like that. So

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Speaker 1: and not everybody chooses to do that, and some people say, oh,

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Speaker 1: it's too expensive or I'm not interested, don't necessarily want

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Speaker 1: that experience for my kids. But yeah, when you have

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Speaker 1: kids and you want them to participate in some of

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Speaker 1: those activities, the costs can add up pretty quick.

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Speaker 2: Well, it's just the whole like living now. Like, I

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Speaker 2: get that the situation that we're in right like, and

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Speaker 2: we've been there a few times, but it's we want

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Speaker 2: to live now as well as be good stewards of

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Speaker 2: where our future is going. You know, what we want

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Speaker 2: for the future, and we don't want to sacrifice everything

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Speaker 2: now in order to have that future. And so it's

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Speaker 2: kind of this balance that my wife and I are

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Speaker 2: constantly talking about, which is hey, knowing where we are now,

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Speaker 2: like kind of what risk level are we okay with

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Speaker 2: to invest in some of those things that we feel

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Speaker 2: like are the live now things right, Yeah, And I

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Speaker 2: think that's just always a conversation that we're having. But yeah,

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Speaker 2: for us this year, I mean, we just we moved

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Speaker 2: to a new city in the past couple of years

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Speaker 2: and just our kids are just now getting those friends

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Speaker 2: and once you get that invitation of hey, do you

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Speaker 2: want to play in the sports team, it's just, man,

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Speaker 2: we want our kids to have such a great childhood

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Speaker 2: here and those experiences typically are the things that will

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Speaker 2: invest in, you know, versus some kind of thing right

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Speaker 2: to have at the house.

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Speaker 1: So I think think about like, yeah, the swim team,

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Speaker 1: the soccer games, and how much it means to the kids,

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Speaker 1: but then also how much of a bonding and community

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Speaker 1: experience it is for the parents. Like it's it's worth

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Speaker 1: the money. You just have to make sure you have

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Speaker 1: the money to be able to spend on it. Right,

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Speaker 1: And let's talk about business, because you you've started a

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Speaker 1: slew of different businesses. Is that because you have an

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Speaker 1: entrepreneurial personality? And do you think some folks are more

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Speaker 1: cut out for that lifestyle than others?

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Speaker 2: I mean, it's such a nuanced question. I've been in

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Speaker 2: entrepreneurship now for sixteen years, and we started when I

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Speaker 2: was twenty just turned twenty four years old. So like

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Speaker 2: I left being a Starbucks barista to be me and

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Speaker 2: my wife did like photography and graphic design, you know,

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Speaker 2: So it wasn't like it took a huge leap. It

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Speaker 2: was just me understanding, Oh, if I shot like ten

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Speaker 2: weddings a year, I would double my income, you know,

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Speaker 2: from being the Starbucks barisa.

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Speaker 1: So although you don't have the don't have those same benefits,

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Speaker 1: right that the Starbucks parista's house, you.

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Speaker 2: Don't have the benefits. Yeah, for sure, but just I

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Speaker 2: mean we the responsibilities level that we had at that time.

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Speaker 2: I mean our house. We were very lucky to have

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Speaker 2: a home that was like a family friend. We paid

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Speaker 2: five hundred dollars a month for this home when you know,

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Speaker 2: back in two thousand and nine, and so anyway, we

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Speaker 2: just didn't have a lot of like financial responsibilities. So

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Speaker 2: jumping off this thing didn't feel like a cliff we

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Speaker 2: were jumping on. It felt very feasible that we could

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Speaker 2: do it. So I think that the answer of everybody

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Speaker 2: do entrepreneurship. Yeah, I think so. But I also think

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Speaker 2: that like the longer we wait, or the more complexities

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Speaker 2: there might be in life, maybe can make it a

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Speaker 2: tougher decision to make that jump, you know. So like

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Speaker 2: if I if it would be very difficult for me

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Speaker 2: at thirty eight years old to get an entrepreneurship for

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Speaker 2: the first time with three kids, you know, and like

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Speaker 2: this kind of level of life that we have right now.

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Speaker 2: But yeah, I think I see I see people of

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Speaker 2: all different personality sets, of all different strengths being very successful.

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Speaker 2: I think that the trick here, not even the trick,

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Speaker 2: the opportunity is to be yourself in entrepreneurship. I think

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Speaker 2: when you start a company and you try to be

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Speaker 2: somebody different, you know, oh, I got to be like

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Speaker 2: this guy or this gal that I heard on this

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Speaker 2: podcast or I follow like I think that's the real trap.

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Speaker 2: So it's very freeing to be sure of who you are,

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Speaker 2: what's your identity, and then build a company in line

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Speaker 2: with those strengths. How you lead, how the clients you like,

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Speaker 2: the product and services that you like to do in

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Speaker 2: the way that you like to do it. Because if

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Speaker 2: we try to build something in a different way, I

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Speaker 2: think it's just filled with these traps. You know, it

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Speaker 2: will always feel like we're never there. I guess if

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Speaker 2: that makes sense.

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Speaker 1: Yeah, I think it's probably easy, especially given the era

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Speaker 1: of social media. Watching Shark Tank stuff like that, you're like, oh,

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Speaker 1: maybe I should try to do what that person's doing.

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Speaker 1: And that's a really hard path entrepreneurship because you have

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Speaker 1: to realize, like, well, what am I gifted at and

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Speaker 1: try to launch from there instead of trying to replicate

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Speaker 1: somebody else's model. What advice would you have for someone

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Speaker 1: who wants to start their own business, not like a

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Speaker 1: billion dollar business, because from most of us, that's like

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Speaker 1: not going to happen, but like a decently successful lifestyle business.

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Speaker 1: What would you suggest how do people actually go about

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Speaker 1: starting something like that?

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Speaker 2: I think that in line with what I just said

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Speaker 2: about knowing who you are, right, because it's not a

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Speaker 2: question of if it'll be hard, right, Like I think

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Speaker 2: there's a trap that a lot of people think that, oh,

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Speaker 2: this is hard, so I might be doing something wrong,

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Speaker 2: Like it's just going to be this is hard, right.

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Speaker 2: And I think that when you get into entrepreneurship, your

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Speaker 2: goal in the beginning just needs to be to how

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Speaker 2: does this thing? How can we be profitable from day one?

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Speaker 2: Like how can we be profitable from day one and

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Speaker 2: keep sustained profitability as a trait in this business? Okay?

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Speaker 2: Because we can do so much more with less than

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Speaker 2: we think. And I think that there is again this

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Speaker 2: thing where it's like, hey, I need to have these

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Speaker 2: other things in this company, so I'm gonna go spend

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Speaker 2: money on them because they will bring me this success.

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Speaker 2: And so much of success is just discipline, Like there

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Speaker 2: are certain things within a business that that just take time,

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Speaker 2: their lessons that just have to be learned, and so

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Speaker 2: to remain profitable in those times is so critical, right,

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Speaker 2: And so you know, business is one of those things

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Speaker 2: that moves incredibly fast but also very slow. Right, So

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Speaker 2: I'm always just kind of it's the whole You can

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Speaker 2: do less than you think in a year, but more

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Speaker 2: than you can imagine in ten. And so I think

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Speaker 2: just giving your business that timeline, if you can give

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Speaker 2: your business, hey, I want to have X result over

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Speaker 2: the next five years at the end of five years,

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Speaker 2: that's a whole different business than if you're saying I

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Speaker 2: need to have these things immediately. So that speed and

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Speaker 2: when we're rushing decisions that are out of line with

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Speaker 2: the profitability, that's where people get into traps. And then

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Speaker 2: we're in survival, right because then it's oh my goodness,

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Speaker 2: like now I am forced to do this thing, or

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Speaker 2: because I'm already like underwater. Right. So I think that

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Speaker 2: like business is one of those things where you really

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Speaker 2: have to have, like the voices around you be in

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Speaker 2: line with your value. I mean, this is have a

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Speaker 2: card with four to five people on it that you're

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Speaker 2: listening to, Like this isn't a democracy necessarily, or we're

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Speaker 2: just listening to everybody and taking pieces. We got to

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Speaker 2: know the thing that we're building the thing that we're

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Speaker 2: not building here. So yeah, this is my fourth company,

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Speaker 2: and I think that this it's interesting how different this

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Speaker 2: one feels after all that I've been through, because the

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Speaker 2: last ones were very almost like this anxious energy when

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Speaker 2: I started them of just like hey, we've just got

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Speaker 2: to build this thing up. And it's almost like just

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Speaker 2: more like the plan was just more like more revenue,

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Speaker 2: more employees, more services, or whatever it was. And this

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Speaker 2: one now feels like very methodical, like it for the

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Speaker 2: first time I've ever since this, it feels very methodical

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Speaker 2: and kind of how we're building this. And again it's

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Speaker 2: still very difficult and we're there's still risks to it,

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Speaker 2: but it just it just feels different than the ones

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Speaker 2: I've done in the past.

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Speaker 1: I like the longer timeline. I think it makes sense.

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Speaker 1: I think lots of times people want to hit like

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Speaker 1: instant success, like they want to throw a couple ingredients

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Speaker 1: in and they want a beautiful suefla to turn out

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Speaker 1: or whatever, and and like, yeah, like anything becoming a baker, right,

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Speaker 1: it would it would take time to create that perfect sueplay.

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Speaker 1: But how do you know, maybe if you're business is

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Speaker 1: just not it's not likely to succeed, Like you're putting

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Speaker 1: you're throwing good money after bad more time and effort

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Speaker 1: into this thing, and it's just not a business that

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Speaker 1: maybe you started off with a flawed premise or you

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Speaker 1: didn't have a good understanding of who you were trying

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Speaker 1: to serve or what you were trying to accomplish, and

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Speaker 1: so it's time to throw in the towel and do

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Speaker 1: something different. Do you do you have like a how

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Speaker 1: do people discern that?

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Speaker 2: I think a lot of that is when you get

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Speaker 2: very clear on what you want from the company. I

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Speaker 2: think the company is there to be the vessel by

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Speaker 2: which we create the LIFs that we want, right or

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Speaker 2: the impact that we want. So let's say that you're

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Speaker 2: there's a huge gap between your personal take home from

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Speaker 2: the business where it is and where you want it

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Speaker 2: to be. If you can look at the company and

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Speaker 2: reverse engineer what it would take for that company to

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Speaker 2: correct that path and off that timeline and path is

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Speaker 2: so much longer for the company to actually correct and

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Speaker 2: and to get you that income or to get you

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Speaker 2: that to that place where Hey, the time that you're

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Speaker 2: putting in that business, the income you're earning from it,

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Speaker 2: if it takes longer to do that then it would

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Speaker 2: be to shut the thing down and start over again.

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Speaker 2: You know, then maybe it's time we start over again.

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Speaker 2: There's several clients I've worked with. One, you know, he

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Speaker 2: was in business for fourteen years and he just had

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Speaker 2: a real hard financial like space that the business was in.

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Speaker 2: He's like, I'm not giving this thing up. I'm gonna

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Speaker 2: dig in. And my my thought process is like, it's

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Speaker 2: a two year turnaround, Like I think either way is

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Speaker 2: about two years because there's the time it takes to

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Speaker 2: get the clarity you need. Let's call that six months

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Speaker 2: just to find the clarity, get the awareness. Then it's

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Speaker 2: the initial action set to get the things going, and

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Speaker 2: then it's you know, the time for those actions to

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Speaker 2: yield results, right, And so it's just gonna take time

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Speaker 2: for it to turn the ship around either either. But

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Speaker 2: I think, you know, practically speaking market demand, like if

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Speaker 2: there aren't people wanting the thing that you sell, we

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Speaker 2: got to pull a lever to see, hey, is is

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Speaker 2: it priced correctly? Do they understand the value of the product.

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Speaker 2: Am I fulfilling this correctly in a way that they're

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Speaker 2: receiving value? Like I think the number one thing we

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Speaker 2: can do on that front is just talk to customers.

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Speaker 2: I think that there's a lot of entrepreneurs that just

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Speaker 2: don't even talk to their customers. I'm sure you guys

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Speaker 2: with a podcast, I mean, you're in conversations with the

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Speaker 2: people that listen because it's like, hey, what do you

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Speaker 2: want to hear? You know. I think that there's some

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Speaker 2: parts of this business thing that are phenomenally easy. People

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Speaker 2: are just resistant to this very like kind of vulnerable

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Speaker 2: and transparent conversation of like, hey, am the thing that

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Speaker 2: I'm delivering to you? Is it? Do you feel like

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Speaker 2: you're overpaying for it? You know, like, can we talk

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Speaker 2: about how we can make this better? Because if you

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Speaker 2: can get in those conversations, they'll tell you what they want,

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Speaker 2: you know, they'll tell you what they want. And I

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Speaker 2: think that that, again, is kind of this thing I'm

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Speaker 2: experiencing with this company that I didn't my last I

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Speaker 2: thought I had to go create something, you know, like, hey,

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Speaker 2: this is me creating something, and then the customers would

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Speaker 2: come to it. Now it's like, hey, we're building this

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Speaker 2: in collaboration, you know, like I'm building this thing, all right,

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Speaker 2: you're my minimum viable product. First customer. I'm gonna check

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Speaker 2: in with what's how's it going? Like what can we

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Speaker 2: do to be better? And they're gonna tell me. And

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Speaker 2: I think that if we can just have almost this

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Speaker 2: curiosity about what we build versus this pressure in the stress,

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Speaker 2: I think we build something way more successful. You know,

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Speaker 2: I mean the profit and the financials of a company

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Speaker 2: A lot of time are they're they're the lagging measure,

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Speaker 2: like the lead measure is where we're spending our time,

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Speaker 2: you know, what our attitude is within the business, like

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Speaker 2: those lead measures, and then the results those are the

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Speaker 2: financials like that, your numbers will tell you what's going on, right.

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Speaker 1: All right? So let me let me let me toss

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Speaker 1: out an example here. One of my best buddies is

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Speaker 1: starting a business, and I mentioned baking. He is a baker.

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Speaker 1: He makes some of the most delicious cookie in existence,

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Speaker 1: and he partnered with a local coffee shop and he

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Speaker 1: delivers cookies of them every Friday. They sell out. Everybody

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Speaker 1: loves them. And now he's trying to figure out where

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Speaker 1: do I go. I'm making these cookies at home. I

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Speaker 1: can only bake twelve at a time, Like I've got

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Speaker 1: to expand and get a kitchen, but I'm also worried that, like,

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Speaker 1: right now, I've only proven that I can sell cookies

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Speaker 1: on Fridays at this one coffee shop. Like what would

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Speaker 1: you suggest, Like, what's the next step? Is it to

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Speaker 1: take a leap of faith and rent a kitchen and

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Speaker 1: have that, you know, at least tied around your neck

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Speaker 1: for the next twelve months while you're trying to kind

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Speaker 1: of ramp things up, like he's he feels like he's

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Speaker 1: in this place where he's just not sure where to go.

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Speaker 2: Yeah, yeah, I think a quick a quick financial model,

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Speaker 2: like a ballpark model. You don't need, nothing's exact. The

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Speaker 2: only thing if you make a plan, the only thing

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Speaker 2: is going to be one hundred percent certain about that

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Speaker 2: plan is that it won't go according to plan, right,

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Speaker 2: Like I think we all know that. So I think

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Speaker 2: it's it's getting this ballpark financial Hey, what would the

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Speaker 2: front year of this look like? And then if he's married,

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Speaker 2: you know, really having a conversation with his spouse around like, hey,

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Speaker 2: what level of risk are we willing to take? And

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Speaker 2: what does worst case scenario look like? Like what does

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Speaker 2: it look like if this thing fails? We do all

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Speaker 2: this and we fail like, what's that worst case scenario?

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Speaker 2: And can we accept that. I think that this is

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Speaker 2: a conversation with my wife and I've had several times

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Speaker 2: because it's if you can accept worst case, then it

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Speaker 2: frees you to go do the damn thing right and

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Speaker 2: then for him, you know, once you have the financial

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Speaker 2: model it because when you're having those conversations with your

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Speaker 2: spouse and internally you kind of put this, you have

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Speaker 2: the understanding of what the business needs to do. How

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Speaker 2: many cookies do I need to sell to pay myself?

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Speaker 2: How many cookies do you need to sell to afford

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Speaker 2: this rent? How many cookies do you need to sell?

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Speaker 2: Because there's only there's a limit of time on him, right,

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Speaker 2: so we really have to kind of make sure that

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Speaker 2: those just things make sense all the way through and

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Speaker 2: it can kind of hit this place that he wants

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Speaker 2: it to hit within that front three years, you know.

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Speaker 2: But like I said in the beginning, I mean the

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Speaker 2: wisdom comes from those that have done it before, Like

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Speaker 2: the playbook doesn't change all the time. If I know

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Speaker 2: they're bakers that have taken this path and just ask

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Speaker 2: them in reality, you know, like, hey, what did it

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Speaker 2: take to get where you are? You know, and I

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Speaker 2: always for my mentor set, like I don't only talk

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Speaker 2: to people that are in my industry, like because a

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Speaker 2: lot of the times that like when my last business

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Speaker 2: was in retail, I didn't want to become like the

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Speaker 2: typical retail owner, right, so I wanted to talk to

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Speaker 2: a few different people in different industries about how they

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Speaker 2: built their business and kind of have this mixture of

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Speaker 2: the value set, the model, you know, those kinds of

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Speaker 2: things coming in and then I could build the thing

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Speaker 2: that I wanted to build. So yeah, and I think

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Speaker 2: this is the last thing I'll say is just seasonal.

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Speaker 2: Life has to match the season of business. Right. There's

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Speaker 2: certain seasons in life where it's not a push season,

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Speaker 2: you know. And we went through one of these as

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Speaker 2: a family where new baby. You know, it's just not

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Speaker 2: a season to just go and and give it all

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Speaker 2: to the company. And not only just from a time perspective,

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Speaker 2: but it was just I want to spend time with

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Speaker 2: my new daughter, you know. I think looking back, I

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Speaker 2: value the front three years of my kids' lives different

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Speaker 2: than when they're in middle school going to school, Like

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Speaker 2: we can.

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Speaker 1: Well, they don't want to spend time with you as

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Speaker 1: much at that point in time, right.

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Speaker 2: You're right, yeah, yeah, so we're starting to learn, I

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Speaker 2: think with our oldest, but he's definitely going through his

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Speaker 2: you know, our first round of being like I want

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Speaker 2: my own space.

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Speaker 1: Yeah you can leave. Yeah, no, I get that. I

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Speaker 1: think that's that's wise. The Yeah, recognize the seasonality. Is

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Speaker 1: this the season that we can push into it or

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Speaker 1: that we that we can't really give it all that

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Speaker 1: it deserves. How do you think about taking on debt

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Speaker 1: starting a business, and is it is the goal to

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Speaker 1: minimize it. It's the goal to bankroll to have enough money,

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Speaker 1: let's say, to give it a year without having any

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Speaker 1: sort of like I mean, you see some business owners

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Speaker 1: starting stuff up and they're putting, they're racking up credit

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Speaker 1: card debt right that sometimes like in their own name

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Speaker 1: and often in their own name, right, and in an

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Speaker 1: attempt to get this puppy going, and it just it's

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Speaker 1: almost like stacking the odds against them for success before

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Speaker 1: they get even get off the ground.

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Speaker 2: Yeah, it's insane how easy it is to get money debt,

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Speaker 2: you know, to get access to this money. I mean

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Speaker 2: I get probably fifteen techts a day, you know, saying

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Speaker 2: what I like the amount that I have access to.

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Speaker 2: I'll say this is as an owner, you have to

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Speaker 2: have a point of view on debt, like you have

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Speaker 2: to have it established. You know, if you're gonna have

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Speaker 2: the debt, then what is it going to be used for?

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Speaker 2: And what is it not going to be used for.

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Speaker 2: But even before we get to the debt conversation, entrepreneurs

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Speaker 2: need to be able to sit with their money, like

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Speaker 2: they need to be able to sit with their numbers

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Speaker 2: and just understand them. Because the more you're around the

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Speaker 2: numbers and those realities, the more that that informs your actions. Right.

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Speaker 2: So if a lot of times when an entrepreneur takes

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Speaker 2: on debt, it's it's a band aid, it's a it

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Speaker 2: punts a decision that needs to be made to be

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Speaker 2: made now down the road by months or years. So

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Speaker 2: I learned this the very hard way. I mean originally

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Speaker 2: this is the hard part too, when you're a new

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Speaker 2: entrepreneur and you don't have your own personal capital to

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Speaker 2: put against the debt or to become more you know,

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Speaker 2: I don't know a better deal for the bank, like

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Speaker 2: you're gonna have to sign a personal guarantee like, and

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Speaker 2: you have to understand like you're putting your your home,

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Speaker 2: your things against this super high interest money, and so

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Speaker 2: there's no other option. Like if you can't get like

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Speaker 2: an investor, if you can't don't have the personal capital,

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Speaker 2: then it's really like it's debt or it's just sweat

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Speaker 2: equity and you just have to personally take the hit,

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Speaker 2: like from a salary perspective. And so I think you

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Speaker 2: just had to sit with those those realities and just understand, hey,

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Speaker 2: what's the actual best path? Here is when I started

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Speaker 2: my last company in retail, I got one of those

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Speaker 2: loans that was super high interest in it was like

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Speaker 2: weekly payments. I mean it was crazy, but it was

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Speaker 2: the only money I had access to because we needed

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Speaker 2: an inventory. And then I ended up consolidating that debt

433
00:21:15,520 --> 00:21:19,440
Speaker 2: through an SBA seven A, which is I can't remember

434
00:21:19,480 --> 00:21:22,159
Speaker 2: the term length on it, but it was like a

435
00:21:22,200 --> 00:21:25,320
Speaker 2: five percent you know, loan, and it consolid it made

436
00:21:25,359 --> 00:21:27,639
Speaker 2: it went. It took my monthly payments from forty K

437
00:21:27,760 --> 00:21:31,520
Speaker 2: down to four so like massive cash flow swing. So

438
00:21:32,000 --> 00:21:35,240
Speaker 2: with the debt with a high risk, the kind of debt, yeah.

439
00:21:35,000 --> 00:21:37,480
Speaker 1: The interest rate, the risk level, like those all matter.

440
00:21:37,680 --> 00:21:40,959
Speaker 2: Yeah, and that that that debt payment, that forty K

441
00:21:41,119 --> 00:21:45,040
Speaker 2: debt payment. Like if if you don't use your debt

442
00:21:45,240 --> 00:21:49,439
Speaker 2: correctly and get a really good ROI on that money

443
00:21:49,440 --> 00:21:52,879
Speaker 2: you spend quick, then that interest line item on your

444
00:21:52,880 --> 00:21:54,480
Speaker 2: P ANDL is going to become one of the biggest

445
00:21:54,560 --> 00:21:58,479
Speaker 2: line items in your financials. So yeah, I think that

446
00:21:58,560 --> 00:22:02,560
Speaker 2: there's certain things where hey, just like test the waters, Like,

447
00:22:03,160 --> 00:22:05,199
Speaker 2: is the thing you're spending the money on has it

448
00:22:05,240 --> 00:22:07,679
Speaker 2: been proven to actually yield the result you think it

449
00:22:07,720 --> 00:22:10,080
Speaker 2: will yield? Like, what are you looking at that is

450
00:22:10,119 --> 00:22:12,840
Speaker 2: saying if I take this debt and put it here,

451
00:22:12,960 --> 00:22:15,919
Speaker 2: it's going to yield a result because again, it's just

452
00:22:16,000 --> 00:22:20,119
Speaker 2: not gonna all work out. Like the inevitability is that

453
00:22:20,160 --> 00:22:24,720
Speaker 2: there will be surprises, right, I think it's Oh man,

454
00:22:24,760 --> 00:22:27,080
Speaker 2: who is the psychology of money guy? What's his name?

455
00:22:27,800 --> 00:22:30,639
Speaker 2: Oh Morgan House, Morgan Housel. He's like, it's not that this.

456
00:22:30,960 --> 00:22:33,600
Speaker 2: You don't need to learn that the surprise is gonna

457
00:22:33,600 --> 00:22:35,400
Speaker 2: happen in that same surprise is gonna happen again. It's

458
00:22:35,440 --> 00:22:39,040
Speaker 2: just knowing that surprises happen the the you know, the

459
00:22:39,080 --> 00:22:42,760
Speaker 2: consistency as a surprise has happened, curveballs will happen. So

460
00:22:43,240 --> 00:22:47,160
Speaker 2: if your business plan you know, this goes with personal life.

461
00:22:47,280 --> 00:22:51,880
Speaker 2: Is needing to go perfect to win. The chances are

462
00:22:51,920 --> 00:22:53,919
Speaker 2: just very slim. It's going to do that, Like where's

463
00:22:53,960 --> 00:22:57,160
Speaker 2: the margin? Where's the margin for error here? Right?

464
00:22:57,640 --> 00:22:59,000
Speaker 1: I think about it makes me think about some of

465
00:22:59,040 --> 00:23:01,600
Speaker 1: the real estate investors that I have known, and the

466
00:23:01,600 --> 00:23:05,600
Speaker 1: most successful ones are the ones who underestimate what their

467
00:23:05,600 --> 00:23:07,479
Speaker 1: returns are going to be and they talk about the

468
00:23:07,520 --> 00:23:12,240
Speaker 1: potential headwinds that they might face. And the real estate

469
00:23:12,280 --> 00:23:15,800
Speaker 1: investors who I've met who are the worst at it

470
00:23:16,600 --> 00:23:20,280
Speaker 1: or who lose money for their investors are the ones

471
00:23:20,400 --> 00:23:25,120
Speaker 1: who assume that the trend of Austin being the hot

472
00:23:25,119 --> 00:23:27,840
Speaker 1: market is going to continue in perpetuity, right, and that

473
00:23:28,200 --> 00:23:31,200
Speaker 1: market fundamentals won't catch up, or that the building of

474
00:23:31,240 --> 00:23:34,359
Speaker 1: additional units isn't going to hurt their apartment complex that

475
00:23:34,400 --> 00:23:36,760
Speaker 1: they own, But of course it ends up doing that.

476
00:23:36,840 --> 00:23:44,399
Speaker 1: And so it's over optimistic projections versus at least having

477
00:23:44,800 --> 00:23:47,960
Speaker 1: some realism and maybe even leaning into pessimism just to

478
00:23:48,040 --> 00:23:53,000
Speaker 1: kind of stress test what it could look like in reality.

479
00:23:53,119 --> 00:23:56,960
Speaker 1: And I think the stress testing is helpful from multiple perspectives.

480
00:23:57,040 --> 00:23:58,840
Speaker 1: Is that something you think that most small business owners

481
00:23:58,840 --> 00:24:00,600
Speaker 1: need to do? More of before they launch.

482
00:24:01,000 --> 00:24:03,399
Speaker 2: Yeah. Absolutely, And again like we're going back to the beginning.

483
00:24:03,400 --> 00:24:07,360
Speaker 2: Can everybody start a business? Yes, So it looks different

484
00:24:07,440 --> 00:24:11,000
Speaker 2: for different people because I think if you're pessimistic on

485
00:24:11,800 --> 00:24:15,719
Speaker 2: like naturally, which is fine, you got to have more vision,

486
00:24:16,200 --> 00:24:18,160
Speaker 2: you know, you got it? You probably need to actually

487
00:24:18,240 --> 00:24:21,679
Speaker 2: think bigger, right, because there's a lot of people that

488
00:24:22,080 --> 00:24:23,600
Speaker 2: they start a business and they don't think big enough.

489
00:24:23,680 --> 00:24:25,840
Speaker 2: They stay trapped, you know, they're not they're not thinking

490
00:24:26,160 --> 00:24:29,280
Speaker 2: like typically that entrepreneur maybe isn't charging enough, like oh

491
00:24:29,320 --> 00:24:31,600
Speaker 2: they will never pay that, you know, or things like that,

492
00:24:31,840 --> 00:24:34,439
Speaker 2: and a lot of times they are over delivering for

493
00:24:34,520 --> 00:24:38,560
Speaker 2: what they're they're charging for. If you're high high vision

494
00:24:38,640 --> 00:24:40,919
Speaker 2: and just think anything as possible, then yeah, you need

495
00:24:40,960 --> 00:24:43,719
Speaker 2: to be mixed with some realism of just like, well

496
00:24:43,760 --> 00:24:45,720
Speaker 2: what happens if it doesn't and this is just gonna

497
00:24:45,720 --> 00:24:47,840
Speaker 2: be a hard path no matter what, So what do

498
00:24:47,880 --> 00:24:50,560
Speaker 2: we do in these scenarios? So I think a lot

499
00:24:50,640 --> 00:24:52,960
Speaker 2: of times it's just like hey, how seeing the other

500
00:24:53,040 --> 00:24:57,320
Speaker 2: side of yourself and just thinking like what does this

501
00:24:57,400 --> 00:25:00,080
Speaker 2: conversation need to be that I'm not having like and

502
00:25:00,520 --> 00:25:02,800
Speaker 2: that's where mentorship really comes in. That's where a really

503
00:25:02,800 --> 00:25:06,760
Speaker 2: good community comes in, just people that care about you

504
00:25:06,920 --> 00:25:09,399
Speaker 2: first and then the business. Like if you can just

505
00:25:09,480 --> 00:25:10,960
Speaker 2: kind of open the door to a few of those

506
00:25:11,000 --> 00:25:13,920
Speaker 2: people that can help you with that, I think that

507
00:25:13,920 --> 00:25:18,840
Speaker 2: that is really where I've seen the most people find

508
00:25:18,880 --> 00:25:20,399
Speaker 2: benefit in myself as well.

509
00:25:20,520 --> 00:25:22,399
Speaker 1: Okay, all right, I got a few more questions. I

510
00:25:22,400 --> 00:25:23,720
Speaker 1: want to getrough with you, Phil. I want to talk

511
00:25:23,760 --> 00:25:26,320
Speaker 1: about your bankruptcy experience. You kind of alluded to that

512
00:25:26,359 --> 00:25:29,080
Speaker 1: a second ago. We'll kind of dive down that path

513
00:25:29,160 --> 00:25:38,400
Speaker 1: in just a sec. All Right, We're back from the break,

514
00:25:38,440 --> 00:25:42,480
Speaker 1: still talking with Phil Sanders, talking about how businesses succeed

515
00:25:42,600 --> 00:25:47,359
Speaker 1: and launching a small business and they don't always succeed. Phil, Right,

516
00:25:47,359 --> 00:25:50,080
Speaker 1: you said, you're on your fourth business, and the reality

517
00:25:50,119 --> 00:25:53,639
Speaker 1: is when you look at the statistics that a huge

518
00:25:53,680 --> 00:25:57,600
Speaker 1: percentage of businesses fail within the first year or two.

519
00:25:58,880 --> 00:26:02,000
Speaker 1: Why do you think it is is that people would

520
00:26:02,040 --> 00:26:05,399
Speaker 1: people see those statistics? Why is it that people continue

521
00:26:05,400 --> 00:26:07,240
Speaker 1: to launch businesses? Like I don't know. To me, I

522
00:26:07,280 --> 00:26:09,800
Speaker 1: see those and I'm like, oh, it frightens me, Like

523
00:26:10,400 --> 00:26:12,040
Speaker 1: I don't I don't want to go buy a brick

524
00:26:12,040 --> 00:26:14,119
Speaker 1: and mortar shop, and like I've always had this idea

525
00:26:14,160 --> 00:26:17,240
Speaker 1: of having a craft beer store or something like that,

526
00:26:17,440 --> 00:26:18,879
Speaker 1: and then I see the statistics and I see how

527
00:26:18,920 --> 00:26:20,119
Speaker 1: hard it is, and I'm like, I don't think I

528
00:26:20,160 --> 00:26:21,199
Speaker 1: want to any part of that.

529
00:26:21,760 --> 00:26:26,440
Speaker 2: Yeah, I mean there are harder industries than others, right,

530
00:26:26,480 --> 00:26:30,680
Speaker 2: I mean restaurants incredibly hard, like a lot of overhead,

531
00:26:31,480 --> 00:26:34,520
Speaker 2: a lot of staff, the food product, and then that

532
00:26:34,640 --> 00:26:37,399
Speaker 2: inventory can turn to waste, you know. So there's just

533
00:26:37,440 --> 00:26:39,960
Speaker 2: a lot of complexity to some of these businesses. So

534
00:26:40,520 --> 00:26:42,840
Speaker 2: I think a lot of it depends on the industry

535
00:26:42,840 --> 00:26:46,040
Speaker 2: you're talking about. But I think one of the main

536
00:26:46,119 --> 00:26:50,480
Speaker 2: things that that businesses fail, at least in my perspective,

537
00:26:50,520 --> 00:26:53,880
Speaker 2: is they don't hit a point that can take care

538
00:26:54,080 --> 00:26:58,200
Speaker 2: of the owner's personal income. Like I think that there's

539
00:26:58,720 --> 00:27:02,080
Speaker 2: just I see a lot of businesses that they're just

540
00:27:02,160 --> 00:27:05,120
Speaker 2: giving everything, like the owner is almost just breaking even

541
00:27:05,119 --> 00:27:08,480
Speaker 2: and not paying themselves. So that's not sustainable, and they

542
00:27:09,000 --> 00:27:13,520
Speaker 2: just don't pass this level of sustainability where it can

543
00:27:14,400 --> 00:27:17,720
Speaker 2: pay employees or have enough cash flow for employees to

544
00:27:17,800 --> 00:27:19,879
Speaker 2: kind of take on the things that the owner is

545
00:27:19,960 --> 00:27:23,560
Speaker 2: not good at and also pay for the owner to

546
00:27:23,600 --> 00:27:25,560
Speaker 2: do the things that they are good at. There's a

547
00:27:25,600 --> 00:27:27,800
Speaker 2: book called Scaling Up, and it's kind of like an

548
00:27:27,800 --> 00:27:29,679
Speaker 2: old school book at this point. I don't know if

549
00:27:29,720 --> 00:27:33,000
Speaker 2: you've read it, but he has these vern Harness has

550
00:27:33,040 --> 00:27:36,760
Speaker 2: these things called values of death, and it's kind of

551
00:27:36,760 --> 00:27:41,640
Speaker 2: like this mathematical equation. At certain revenues, what the company

552
00:27:42,119 --> 00:27:46,520
Speaker 2: needs it can't afford, and so you have to like

553
00:27:46,840 --> 00:27:50,720
Speaker 2: invest in that thing and to take a hit and

554
00:27:50,760 --> 00:27:53,159
Speaker 2: anticipate growth. And so the value of death isn't like

555
00:27:53,200 --> 00:27:56,000
Speaker 2: a revenue dip thing like that. It's more of a

556
00:27:56,080 --> 00:27:59,120
Speaker 2: it's a trunk you have to move through. So for instance,

557
00:27:59,560 --> 00:28:01,600
Speaker 2: when you build a company up to let's say five

558
00:28:01,680 --> 00:28:04,320
Speaker 2: hundred grand, and you're you're you're like, okay, we're going

559
00:28:04,359 --> 00:28:08,280
Speaker 2: to a million. From that distance, you're gonna have to

560
00:28:08,320 --> 00:28:11,359
Speaker 2: need You're gonna need some level of management. So like

561
00:28:11,359 --> 00:28:14,080
Speaker 2: one of the first thresholds you have to cross is

562
00:28:14,080 --> 00:28:16,840
Speaker 2: is a management threshold, like can you can you let

563
00:28:16,880 --> 00:28:18,600
Speaker 2: go of some things, give it to somebody else to

564
00:28:18,680 --> 00:28:21,880
Speaker 2: manage and lead that team right, and like move into

565
00:28:22,000 --> 00:28:25,320
Speaker 2: things the need of things that only you can do

566
00:28:25,400 --> 00:28:29,040
Speaker 2: that actually push the company forward. So I heard this quote.

567
00:28:29,080 --> 00:28:31,800
Speaker 2: I don't know who said it, but it feels true.

568
00:28:31,840 --> 00:28:35,680
Speaker 2: It's like I think the reason there's there's real kind

569
00:28:35,720 --> 00:28:39,640
Speaker 2: of respect for men and women that have kind of

570
00:28:39,680 --> 00:28:43,880
Speaker 2: conquered the business side. It's like, to master business, you

571
00:28:43,920 --> 00:28:46,600
Speaker 2: have to master yourself. I think to master financials you

572
00:28:46,640 --> 00:28:48,720
Speaker 2: have to master yourself. So there's a lot of self

573
00:28:49,240 --> 00:28:51,520
Speaker 2: kind of mastery that has to go on because you're

574
00:28:51,600 --> 00:28:56,760
Speaker 2: learning and building a new muscle group at these different stages.

575
00:28:56,800 --> 00:28:59,280
Speaker 2: So when you see somebody that, hey, I bootstrapped a

576
00:28:59,320 --> 00:29:04,120
Speaker 2: ten million man, that he or she has gone through

577
00:29:04,160 --> 00:29:10,560
Speaker 2: probably five different levels of leadership and five different you know,

578
00:29:10,720 --> 00:29:13,040
Speaker 2: kind of phases of the business. So it's a pretty

579
00:29:13,080 --> 00:29:14,600
Speaker 2: incredible thing to see. And I think a lot of

580
00:29:14,600 --> 00:29:17,200
Speaker 2: people that I'm not gonna say that fail because you

581
00:29:17,200 --> 00:29:19,240
Speaker 2: can fail at any level, but it's stuck at that

582
00:29:19,320 --> 00:29:24,880
Speaker 2: first level. It's kind of that that management either that

583
00:29:25,160 --> 00:29:28,080
Speaker 2: they can't cross the management threshold or just initially like

584
00:29:28,640 --> 00:29:32,160
Speaker 2: they can't be self disciplined enough to do kind of

585
00:29:32,200 --> 00:29:35,880
Speaker 2: like all the things, there's just this real tranche of

586
00:29:35,920 --> 00:29:39,959
Speaker 2: can you become the person that can sell and market

587
00:29:40,120 --> 00:29:42,920
Speaker 2: and fulfill and you know, and manage your cash because

588
00:29:42,920 --> 00:29:44,480
Speaker 2: you don't you can't afford for anybody use to do it.

589
00:29:44,520 --> 00:29:47,600
Speaker 2: Can you do all those things at first, which is

590
00:29:47,680 --> 00:29:48,280
Speaker 2: kind of wild.

591
00:29:48,480 --> 00:29:49,920
Speaker 1: You have to be like a jack of all trades

592
00:29:49,960 --> 00:29:51,840
Speaker 1: in the beginning, and then at some point you have

593
00:29:51,920 --> 00:29:54,600
Speaker 1: to figure out how to hire and to delegate in

594
00:29:54,680 --> 00:29:56,960
Speaker 1: order to grow the business. And that can be for

595
00:29:57,200 --> 00:30:01,920
Speaker 1: a business owner like a tough tough to jump that gap, right,

596
00:30:02,000 --> 00:30:05,160
Speaker 1: tough to go from like I'm doing it all to then,

597
00:30:05,680 --> 00:30:07,480
Speaker 1: especially when you first hire someone, you're like, they're not

598
00:30:07,520 --> 00:30:08,760
Speaker 1: gonna be able to do it as well as I can,

599
00:30:08,920 --> 00:30:10,520
Speaker 1: and you have to learn. You have to train them

600
00:30:10,560 --> 00:30:12,920
Speaker 1: up into doing it and eventually, hey, maybe they can

601
00:30:12,960 --> 00:30:16,480
Speaker 1: do it better than you can. But crossing that threshold

602
00:30:16,800 --> 00:30:18,000
Speaker 1: is not always.

603
00:30:17,680 --> 00:30:20,479
Speaker 2: Easy to go from generalists as specialists, right, Yeah, So

604
00:30:20,520 --> 00:30:24,000
Speaker 2: the bigger you grow, the more you're hiring and becoming

605
00:30:24,040 --> 00:30:28,520
Speaker 2: a specialist. Right at the very beginning, jack of all trades,

606
00:30:29,000 --> 00:30:32,120
Speaker 2: but as you grow, you're just honing in, honing in,

607
00:30:32,280 --> 00:30:35,160
Speaker 2: honing in, you know, and eventually as the owner, hey,

608
00:30:35,200 --> 00:30:37,440
Speaker 2: what are the top three things that I can do?

609
00:30:37,600 --> 00:30:39,600
Speaker 2: And you're doing that thing? How much time can I

610
00:30:39,600 --> 00:30:41,400
Speaker 2: spend in those three things? And then building the whole

611
00:30:41,400 --> 00:30:44,600
Speaker 2: company around you. But I just want to take it

612
00:30:44,600 --> 00:30:48,720
Speaker 2: back to this kind of beginning point of like identity, Man,

613
00:30:48,840 --> 00:30:51,280
Speaker 2: my identity in those beginning companies was so wrapped in

614
00:30:51,360 --> 00:30:54,040
Speaker 2: my business. I think that there's just a real threat

615
00:30:54,240 --> 00:30:57,400
Speaker 2: when your business, you view your business as yourself, you

616
00:30:57,840 --> 00:31:00,880
Speaker 2: take client feedback way different, you know, like in an

617
00:31:01,000 --> 00:31:04,520
Speaker 2: unhealthy way, like your worth becomes the worth of the company.

618
00:31:04,920 --> 00:31:08,280
Speaker 2: I think that if we can build businesses that are

619
00:31:08,480 --> 00:31:10,280
Speaker 2: really great and that's like a part of our identity,

620
00:31:10,320 --> 00:31:12,560
Speaker 2: but if we can build business of like, hey, this

621
00:31:12,720 --> 00:31:15,240
Speaker 2: is who I am and the business is this is

622
00:31:15,240 --> 00:31:17,840
Speaker 2: what I do, but there's a separation between those things,

623
00:31:17,880 --> 00:31:20,520
Speaker 2: I think that there's just kind of again almost more

624
00:31:20,560 --> 00:31:23,520
Speaker 2: of this like curiosity in how we build a business

625
00:31:23,600 --> 00:31:26,320
Speaker 2: versus this pressure cooker.

626
00:31:26,960 --> 00:31:30,360
Speaker 1: Yeah, let's talk about one of the hardest times of

627
00:31:30,400 --> 00:31:34,160
Speaker 1: your life filing for bankruptcy. And I have experienced that,

628
00:31:34,240 --> 00:31:38,200
Speaker 1: not personally as an adult, but as a child. Are

629
00:31:38,760 --> 00:31:43,520
Speaker 1: our family filed for bankruptcy and I it's had a

630
00:31:43,560 --> 00:31:47,520
Speaker 1: incredible impression on me, and it has I have been

631
00:31:47,880 --> 00:31:50,640
Speaker 1: reacting to that in many ways for years and decades,

632
00:31:51,040 --> 00:31:53,000
Speaker 1: and I think it's a big part of why I

633
00:31:53,080 --> 00:31:56,800
Speaker 1: do what I do. And that was from and it's

634
00:31:56,880 --> 00:31:59,920
Speaker 1: just like a lot of personal finance things. I was,

635
00:32:00,120 --> 00:32:01,280
Speaker 1: I don't want to do that. I don't want to

636
00:32:01,280 --> 00:32:02,680
Speaker 1: do that. I don't want to put myself at risk

637
00:32:02,720 --> 00:32:06,600
Speaker 1: of that. But when you start a business, it can

638
00:32:06,720 --> 00:32:10,680
Speaker 1: put you at greater risk right of you're maybe throwing

639
00:32:10,720 --> 00:32:12,680
Speaker 1: more of your assets into the business, or maybe you're

640
00:32:12,680 --> 00:32:14,800
Speaker 1: taking on to various kinds of debt. It can put

641
00:32:14,840 --> 00:32:17,040
Speaker 1: you in a more precarious position. Can you talk to

642
00:32:17,080 --> 00:32:20,040
Speaker 1: me about what led you, I guess, to that place

643
00:32:20,040 --> 00:32:21,800
Speaker 1: to eventually having to file for bankruptcy.

644
00:32:22,040 --> 00:32:24,480
Speaker 2: How old were you when your parents went through bankruptcy?

645
00:32:24,560 --> 00:32:25,560
Speaker 1: About twelve years old?

646
00:32:25,800 --> 00:32:29,080
Speaker 2: Twelve years old? Okay? Was it chapter seven or were

647
00:32:29,120 --> 00:32:30,840
Speaker 2: they did they readegotiated? You know?

648
00:32:30,880 --> 00:32:34,920
Speaker 1: No, Yeah, it was chapter seven? And I still remember

649
00:32:35,120 --> 00:32:38,680
Speaker 1: when our car got repossessed. It was supposed to get

650
00:32:38,720 --> 00:32:40,400
Speaker 1: repossessed and then it was like it stayed in our

651
00:32:40,480 --> 00:32:42,000
Speaker 1: driveway for an extra couple of weeks and then one

652
00:32:42,040 --> 00:32:44,000
Speaker 1: day it was gone, and I still remember being like,

653
00:32:44,120 --> 00:32:45,520
Speaker 1: is when's it going to get taken? And then it

654
00:32:45,560 --> 00:32:46,480
Speaker 1: was wasn't there anymore?

655
00:32:46,600 --> 00:32:52,720
Speaker 2: Yeah? Wow, many thanks for sharing that. You know, the

656
00:32:52,920 --> 00:32:59,400
Speaker 2: risks that I took in that business were I just

657
00:32:59,440 --> 00:33:01,040
Speaker 2: bit off more I could chew in that business from

658
00:33:01,040 --> 00:33:04,280
Speaker 2: the beginning. And this was a twenty seven, twenty eight

659
00:33:04,360 --> 00:33:09,160
Speaker 2: year old me that just wanted more Like it was

660
00:33:09,200 --> 00:33:11,320
Speaker 2: just like I wanted the big stuff. I wanted a

661
00:33:11,360 --> 00:33:15,440
Speaker 2: big team, kind of flashy business like so there's a

662
00:33:15,480 --> 00:33:18,840
Speaker 2: lot in here, right, but that business was like a

663
00:33:18,840 --> 00:33:21,640
Speaker 2: house of cards, right like, I mean it was huge

664
00:33:21,720 --> 00:33:24,720
Speaker 2: retail space, twelve thousand square feet, you know, big lease,

665
00:33:25,560 --> 00:33:28,400
Speaker 2: thirty five members on the team, big team you know.

666
00:33:28,600 --> 00:33:30,959
Speaker 2: The way that we orchestrated our model was. I mean

667
00:33:31,000 --> 00:33:33,240
Speaker 2: it was cool. Customers loved it, but it just it was.

668
00:33:33,440 --> 00:33:39,680
Speaker 2: It was it was. There wasn't enough just stability anywhere,

669
00:33:39,840 --> 00:33:42,760
Speaker 2: like like consistencies, Like everything was always new kind of thing.

670
00:33:44,000 --> 00:33:49,040
Speaker 2: So tough industry, tough lease heart. I go from having

671
00:33:49,040 --> 00:33:50,960
Speaker 2: like one employee to thirty five, Like there's a lot

672
00:33:50,960 --> 00:33:55,560
Speaker 2: of tough things in there, okay. And I would say

673
00:33:55,960 --> 00:33:58,400
Speaker 2: with this business, like I started it in twenty fifteen,

674
00:33:58,520 --> 00:34:01,720
Speaker 2: and around they of twenty eighteen was when we finally

675
00:34:01,720 --> 00:34:04,560
Speaker 2: broke through. You know, we broke through, we grew, and

676
00:34:04,640 --> 00:34:08,319
Speaker 2: the financials finally started to make sense. Twenty eighteen, we

677
00:34:08,400 --> 00:34:11,800
Speaker 2: lost my wife's mother in a car accident, like sudden

678
00:34:11,800 --> 00:34:15,840
Speaker 2: car accident and she was like real integral to the family.

679
00:34:16,360 --> 00:34:18,160
Speaker 2: And then like a week after that happened my brother,

680
00:34:18,280 --> 00:34:21,120
Speaker 2: my younger brother been he had cancer. So if you've

681
00:34:21,120 --> 00:34:24,880
Speaker 2: ever been through a death in the family that's like

682
00:34:25,120 --> 00:34:29,120
Speaker 2: very close to you, or something like a season of

683
00:34:29,160 --> 00:34:31,600
Speaker 2: cancer or something like that, like those seasons of life,

684
00:34:31,600 --> 00:34:36,279
Speaker 2: they just they just dominate you know, everything, and they should, like,

685
00:34:36,320 --> 00:34:38,439
Speaker 2: I mean, it's it's the most important thing in your life.

686
00:34:38,440 --> 00:34:42,040
Speaker 2: And so we I went through this this place from

687
00:34:42,080 --> 00:34:45,560
Speaker 2: twenty eighteen, middle of twenty eighteen to twenty nineteen where

688
00:34:45,600 --> 00:34:48,080
Speaker 2: my priority started to shift. So I started turning from

689
00:34:48,120 --> 00:34:50,799
Speaker 2: being that guy that was just like we're going to

690
00:34:50,840 --> 00:34:55,120
Speaker 2: the moon to being like, hey, I actually I want more.

691
00:34:56,160 --> 00:34:58,719
Speaker 2: My pridy is just started shifting a bit, right, And

692
00:34:58,800 --> 00:35:02,160
Speaker 2: so we had this thing happened where in twenty nineteen,

693
00:35:02,200 --> 00:35:04,280
Speaker 2: I shifted a lot of things. I started like pulling

694
00:35:04,320 --> 00:35:08,440
Speaker 2: back from the business personally, getting some investing in leadership

695
00:35:08,440 --> 00:35:11,520
Speaker 2: in the company. So it started stabilizing. And then like

696
00:35:11,600 --> 00:35:15,279
Speaker 2: kind of right when I felt like we hit that

697
00:35:15,400 --> 00:35:19,719
Speaker 2: point of being more stable and like this could be

698
00:35:19,719 --> 00:35:22,040
Speaker 2: something that we could grow, like COVID hits and you know,

699
00:35:22,120 --> 00:35:24,359
Speaker 2: so twelve thousands square foot brick and mortar with no

700
00:35:24,520 --> 00:35:28,360
Speaker 2: real e commerce did we went from making hundreds of

701
00:35:28,360 --> 00:35:31,000
Speaker 2: thousands of dollars every month in April of twenty twenty,

702
00:35:31,080 --> 00:35:34,360
Speaker 2: we did two hundred dollars. And it's just like to really,

703
00:35:35,560 --> 00:35:38,320
Speaker 2: it's such a big drop that you can't even really

704
00:35:38,640 --> 00:35:42,360
Speaker 2: wrap your head around it, like what wait, what what?

705
00:35:42,719 --> 00:35:45,080
Speaker 2: Like surely this is a joke kind of thing. And

706
00:35:45,160 --> 00:35:52,160
Speaker 2: so those two years we were incredibly tough. But I'm

707
00:35:52,200 --> 00:35:54,680
Speaker 2: gonna tell you this, like those kinds of seasons sometimes

708
00:35:55,120 --> 00:35:57,520
Speaker 2: are they're like set up seasons. They're like set up

709
00:35:57,560 --> 00:36:00,919
Speaker 2: seasons for what's to come, and so we can guide

710
00:36:00,920 --> 00:36:05,120
Speaker 2: and dive into those. But I'll I mentioned like the mentorship.

711
00:36:05,160 --> 00:36:09,160
Speaker 2: At the beginning, I had a board on my company

712
00:36:09,320 --> 00:36:11,880
Speaker 2: and there are some there were some mentors that decided

713
00:36:11,880 --> 00:36:14,840
Speaker 2: to invest in the company. So they really were the

714
00:36:14,840 --> 00:36:17,400
Speaker 2: ones that helped me navigate the conversation around like is

715
00:36:17,400 --> 00:36:19,959
Speaker 2: this something we shut down knowing that like it would

716
00:36:19,960 --> 00:36:22,279
Speaker 2: probably end up in a bankruptcy. Man.

717
00:36:22,440 --> 00:36:25,359
Speaker 1: Yeah, that's so that's there's a lot in that answer, right,

718
00:36:25,440 --> 00:36:28,320
Speaker 1: And and you're right, like the personal the personal life

719
00:36:28,680 --> 00:36:33,440
Speaker 1: like it it hits your business, right And if it's not.

720
00:36:33,600 --> 00:36:36,400
Speaker 1: The business will not always take priority when other things

721
00:36:36,440 --> 00:36:38,920
Speaker 1: are happening. And Phil, I mean you said that you

722
00:36:38,960 --> 00:36:42,239
Speaker 1: filed for bankruptcy. You told me because you believed more

723
00:36:42,400 --> 00:36:45,520
Speaker 1: in your ability to earn and recover then the fear

724
00:36:45,560 --> 00:36:48,040
Speaker 1: of the pain that it would cause. And bankruptcy is

725
00:36:48,080 --> 00:36:51,439
Speaker 1: just a painful process, especially when friends and mentors are

726
00:36:51,480 --> 00:36:54,640
Speaker 1: involved in your business. Where where was your head at,

727
00:36:54,719 --> 00:36:56,759
Speaker 1: I guess in that in that time, and where did

728
00:36:56,800 --> 00:36:59,960
Speaker 1: that self belief come from? Like, Hey, this thing is

729
00:37:00,120 --> 00:37:03,480
Speaker 1: is like not doing so hot, a dramatic downturn, and

730
00:37:03,480 --> 00:37:05,200
Speaker 1: I feel like we got to close this thing down.

731
00:37:05,280 --> 00:37:08,480
Speaker 1: But I think, yeah, you said it was a setup season.

732
00:37:08,560 --> 00:37:11,799
Speaker 1: What what caused you to believe that this was not

733
00:37:11,960 --> 00:37:16,239
Speaker 1: just like failure and wallowing in miser misery versus like

734
00:37:16,440 --> 00:37:19,000
Speaker 1: this is just the prelude to my next big thing.

735
00:37:19,560 --> 00:37:25,520
Speaker 2: Yeah. The removal of fear, which takes time. I think

736
00:37:26,640 --> 00:37:30,759
Speaker 2: most people just in general are living in fear. And

737
00:37:32,320 --> 00:37:36,919
Speaker 2: when we talk about bankruptcy, building a business, financial there's

738
00:37:36,960 --> 00:37:39,680
Speaker 2: a lot of fear around these things. And once you

739
00:37:39,760 --> 00:37:43,200
Speaker 2: realize that the thing you fear does won't kill you,

740
00:37:43,239 --> 00:37:45,719
Speaker 2: I mean sometimes I guess there is healthy fear but

741
00:37:45,800 --> 00:37:50,160
Speaker 2: like once I realize, like truly, like to my core,

742
00:37:50,560 --> 00:37:53,719
Speaker 2: like oh I'm gonna be fine, like those priorities that

743
00:37:53,800 --> 00:37:56,440
Speaker 2: I was highlighting in twenty eighteen, like hey, these are

744
00:37:56,440 --> 00:37:58,000
Speaker 2: the things I'm want to be four in my life.

745
00:37:59,120 --> 00:38:02,400
Speaker 2: Like my kids do not care what I do for

746
00:38:02,440 --> 00:38:06,279
Speaker 2: a living. My wife, I mean, she has expectations and

747
00:38:06,360 --> 00:38:11,239
Speaker 2: desires around like you know, what are like what my

748
00:38:11,280 --> 00:38:13,040
Speaker 2: time is like with the family though, like we we

749
00:38:13,080 --> 00:38:15,319
Speaker 2: committed to a life together. We committed to raising these

750
00:38:15,400 --> 00:38:18,000
Speaker 2: kids together. So there's there's definitely some some things there.

751
00:38:18,000 --> 00:38:20,080
Speaker 2: But she did how I make my money and how

752
00:38:20,120 --> 00:38:23,360
Speaker 2: we make the money, Like she doesn't She's like, go

753
00:38:23,480 --> 00:38:26,480
Speaker 2: be happy, you know yeah, And I think that like again,

754
00:38:26,520 --> 00:38:30,040
Speaker 2: this is that identity thing when I just really was like,

755
00:38:30,120 --> 00:38:33,400
Speaker 2: oh my, this is a thing that is happening. This

756
00:38:33,560 --> 00:38:39,279
Speaker 2: is not me you know, being destroyed or whatever, you know,

757
00:38:39,560 --> 00:38:41,480
Speaker 2: And that took a lot of time. That took. That's

758
00:38:41,480 --> 00:38:43,799
Speaker 2: honestly where running We talked about running a little bit

759
00:38:43,840 --> 00:38:47,359
Speaker 2: before the podcast. We moved from Atlanta to Chattanooga during

760
00:38:47,400 --> 00:38:49,560
Speaker 2: this crazy season and I just started running these trails

761
00:38:49,600 --> 00:38:52,200
Speaker 2: and so this was like I would have I would

762
00:38:52,239 --> 00:38:55,239
Speaker 2: just get a call from a banker that's like we're

763
00:38:55,239 --> 00:38:59,080
Speaker 2: gonna take everything, go for a five mile trail run

764
00:38:59,160 --> 00:39:01,520
Speaker 2: and then come back and respond to that email, you know,

765
00:39:01,640 --> 00:39:04,040
Speaker 2: And so I think, get your head straight now. Yeah,

766
00:39:04,200 --> 00:39:06,759
Speaker 2: what's interesting with these with the bankruptcy stuff, is like

767
00:39:07,719 --> 00:39:10,879
Speaker 2: it is so heavy, but everything moves really slow. It's

768
00:39:10,920 --> 00:39:13,400
Speaker 2: like you're going to talk to a banker or something

769
00:39:13,560 --> 00:39:16,799
Speaker 2: like that, like an attorney once every two months, you know,

770
00:39:16,960 --> 00:39:20,200
Speaker 2: like they're because it is their timelines, litigation. All this

771
00:39:20,200 --> 00:39:25,000
Speaker 2: stuff is slow. So from October of twenty twenty one

772
00:39:25,360 --> 00:39:27,640
Speaker 2: through December of twenty twenty one, I spent the next

773
00:39:27,719 --> 00:39:30,719
Speaker 2: ninety days winding down the business and like telling my

774
00:39:30,800 --> 00:39:33,759
Speaker 2: landlord normal money, telling all the people that we sold

775
00:39:33,800 --> 00:39:36,400
Speaker 2: products for, which is like, you know, a couple hundred vendors,

776
00:39:37,400 --> 00:39:39,120
Speaker 2: you know, Hey, we're shutting this thing down. We're not

777
00:39:39,160 --> 00:39:42,719
Speaker 2: gonna we can't pull in your spring inventory, you know,

778
00:39:42,880 --> 00:39:45,600
Speaker 2: telling thirty five employees, hey, you're laid off and I

779
00:39:45,600 --> 00:39:49,200
Speaker 2: don't have any severance, you know, I mean like massively

780
00:39:49,239 --> 00:39:53,520
Speaker 2: difficult conversations, and I just but then January one of

781
00:39:53,560 --> 00:39:57,760
Speaker 2: twenty two, it's like you're just kind of sitting with yourself,

782
00:39:58,080 --> 00:40:01,080
Speaker 2: you know, and it was in that space that I

783
00:40:01,120 --> 00:40:04,239
Speaker 2: think those thoughts started coming in of just like I'm

784
00:40:04,239 --> 00:40:07,160
Speaker 2: gonna just hope and believe that, you know, I can

785
00:40:07,239 --> 00:40:10,799
Speaker 2: make it through this day, this hour, and eventually it's like,

786
00:40:10,960 --> 00:40:12,839
Speaker 2: and now I can make it through the week. Now

787
00:40:12,840 --> 00:40:14,600
Speaker 2: I can make it through the next two weeks, you know.

788
00:40:14,680 --> 00:40:18,000
Speaker 2: And once I started seeing kind of like, really that

789
00:40:18,120 --> 00:40:22,360
Speaker 2: first year was was the hardest, but once I started

790
00:40:22,520 --> 00:40:27,279
Speaker 2: kind of landing certain wins as far as my way

791
00:40:27,320 --> 00:40:29,600
Speaker 2: forward and also settling the chapter that I just closed.

792
00:40:30,000 --> 00:40:33,520
Speaker 2: Once I started settling some of those things, my confidence

793
00:40:33,560 --> 00:40:35,120
Speaker 2: would just go up a little bit more, a little

794
00:40:35,120 --> 00:40:37,120
Speaker 2: bit more. But now there was almost just like the

795
00:40:37,160 --> 00:40:39,600
Speaker 2: things I was learning on the identity front, like kind

796
00:40:39,600 --> 00:40:42,319
Speaker 2: of like who who I was? The humility front, and

797
00:40:42,400 --> 00:40:46,320
Speaker 2: let me tell you too, the one of the hardest things,

798
00:40:46,360 --> 00:40:48,440
Speaker 2: but it ended up being the best thing for me

799
00:40:49,200 --> 00:40:52,160
Speaker 2: was that my attorneys were like, you cannot go out

800
00:40:52,160 --> 00:40:55,360
Speaker 2: there and earn money, like you cannot, you have to

801
00:40:55,360 --> 00:40:58,040
Speaker 2: stay below I think we set the threshold at like

802
00:40:58,440 --> 00:41:01,880
Speaker 2: sixty something thousand dollars, like, you don't go make more

803
00:41:01,920 --> 00:41:05,400
Speaker 2: than that money. So it almost like gave myself permission

804
00:41:05,520 --> 00:41:10,360
Speaker 2: to just like go get whatever job and just chill, like,

805
00:41:10,400 --> 00:41:12,480
Speaker 2: don't go try to scale the next thing, don't And

806
00:41:12,560 --> 00:41:14,719
Speaker 2: I just had a sit and I just sat for

807
00:41:14,800 --> 00:41:18,080
Speaker 2: like two years, you know, And I think that that

808
00:41:18,200 --> 00:41:21,759
Speaker 2: kind of forced me to do the things like that

809
00:41:21,840 --> 00:41:23,920
Speaker 2: I really needed to do but didn't want to do.

810
00:41:24,800 --> 00:41:27,799
Speaker 2: And then over that eighteen months it just turned into

811
00:41:27,840 --> 00:41:31,279
Speaker 2: this renewed confidence where the only way out of that

812
00:41:31,360 --> 00:41:33,520
Speaker 2: last loan was to either pay it in full, which

813
00:41:33,520 --> 00:41:36,799
Speaker 2: was five hundred thousand dollars, or declare bankruptcy. And so

814
00:41:37,440 --> 00:41:42,400
Speaker 2: we chose the second route. And Yeah, by that point,

815
00:41:42,440 --> 00:41:45,920
Speaker 2: I had really gained my confidence back, I think, a

816
00:41:45,960 --> 00:41:48,480
Speaker 2: confidence I'd never had before. And so walking in there,

817
00:41:48,520 --> 00:41:50,360
Speaker 2: I was just a different person.

818
00:41:51,360 --> 00:41:53,600
Speaker 1: Talking about One of the things you told me too,

819
00:41:53,680 --> 00:41:55,360
Speaker 1: is that that if you think if you had lowered

820
00:41:55,400 --> 00:41:57,600
Speaker 1: your expectations of the short term, that there was a

821
00:41:57,719 --> 00:42:00,760
Speaker 1: much greater chance that you could have achieved financial success

822
00:42:00,760 --> 00:42:04,279
Speaker 1: in the long term. Do you think you were, like,

823
00:42:05,080 --> 00:42:06,680
Speaker 1: we're trying to ramp things up too quickly. Do you

824
00:42:06,719 --> 00:42:10,040
Speaker 1: think that's a common mistake that businesses make. Is not

825
00:42:10,080 --> 00:42:13,480
Speaker 1: like the slow but sure path to create a business

826
00:42:13,520 --> 00:42:16,400
Speaker 1: that can thrive over a long period of time, And

827
00:42:16,440 --> 00:42:19,600
Speaker 1: it's that like all or nothing sort of mentality, like

828
00:42:19,640 --> 00:42:21,080
Speaker 1: I got to get this thing up and running. It's

829
00:42:21,080 --> 00:42:25,320
Speaker 1: got a crush in a very short timeline, and because

830
00:42:25,320 --> 00:42:28,760
Speaker 1: of that, you leave yourself open to an epic failure.

831
00:42:29,719 --> 00:42:32,480
Speaker 2: Yeah, I think speed speed is one of those things.

832
00:42:32,560 --> 00:42:35,319
Speaker 2: I mean, you don't know what you don't know, right,

833
00:42:35,360 --> 00:42:37,200
Speaker 2: so you just I think if you move it too

834
00:42:37,200 --> 00:42:39,719
Speaker 2: fast of a pace, the decisions you make when you

835
00:42:39,760 --> 00:42:42,719
Speaker 2: don't know something, you're going to deal with those consequences later.

836
00:42:42,719 --> 00:42:48,000
Speaker 2: If you're making massive, huge, like very risky decisions, that

837
00:42:48,080 --> 00:42:51,080
Speaker 2: might come back to really haunt you, know, you hinder

838
00:42:51,120 --> 00:42:55,440
Speaker 2: you in the future. So I think that depending on

839
00:42:55,480 --> 00:42:57,799
Speaker 2: your personalities, it's like, hey, move it a pace that

840
00:42:58,200 --> 00:43:01,600
Speaker 2: is sustainable, like a challenging, but it is a pace

841
00:43:01,680 --> 00:43:06,280
Speaker 2: that is sustainable for five years, right because we can't

842
00:43:06,280 --> 00:43:08,160
Speaker 2: we can't go one hundred miles an hour all the time.

843
00:43:08,440 --> 00:43:10,360
Speaker 2: It's we've we've got to go at a pace that

844
00:43:10,480 --> 00:43:14,799
Speaker 2: is sustainable for us to endure. I just I just

845
00:43:15,400 --> 00:43:18,319
Speaker 2: wasn't listening to to a few voices in my life

846
00:43:18,360 --> 00:43:20,239
Speaker 2: of just like hey, maybe you should step back and

847
00:43:20,360 --> 00:43:23,000
Speaker 2: you know, take a beat on this model real quick.

848
00:43:23,080 --> 00:43:25,200
Speaker 2: Like I guess I went into a risky er industry,

849
00:43:26,600 --> 00:43:30,080
Speaker 2: you know, just like it's a very cash heavy You're

850
00:43:30,080 --> 00:43:32,480
Speaker 2: paying for your inventory, you're paying for at least you're

851
00:43:32,520 --> 00:43:35,640
Speaker 2: paying for a team, and you're banking that you can

852
00:43:35,680 --> 00:43:38,400
Speaker 2: build up enough foot traffic to in conversion rate to

853
00:43:38,400 --> 00:43:41,000
Speaker 2: to sell those things right to cover that. So it

854
00:43:41,200 --> 00:43:43,879
Speaker 2: just it was just a complex model. And I think

855
00:43:43,880 --> 00:43:46,839
Speaker 2: that in those scenarios, depending on the unknowns, like, yeah,

856
00:43:46,920 --> 00:43:48,759
Speaker 2: go at the pace that allows you to learn the

857
00:43:48,840 --> 00:43:51,000
Speaker 2: industry plus grow a business.

858
00:43:51,080 --> 00:43:54,279
Speaker 1: All right, when you talk about life after bankruptcy and

859
00:43:54,400 --> 00:43:57,200
Speaker 1: what it looks like to start another business after seeing

860
00:43:57,200 --> 00:43:59,560
Speaker 1: one fail, we'll talk about that with Phil right up

861
00:43:59,600 --> 00:44:10,520
Speaker 1: for this talking with Phil Sanders, talking about bouncing back

862
00:44:10,560 --> 00:44:14,240
Speaker 1: from bankruptcy, talking about businesses, how to create a business

863
00:44:14,239 --> 00:44:18,320
Speaker 1: that will stand the test of time. And Phil, you

864
00:44:18,320 --> 00:44:21,360
Speaker 1: you made some meaningful lifestyle changes in the aftermath of

865
00:44:21,400 --> 00:44:24,120
Speaker 1: your bankruptcy. How did you and your family start over?

866
00:44:24,200 --> 00:44:28,960
Speaker 1: You mentioned moving, like, what what did it take to

867
00:44:29,080 --> 00:44:31,840
Speaker 1: feel like you turned over a new leaf?

868
00:44:32,080 --> 00:44:36,920
Speaker 2: Yeah? Time, I mean when I left that business, when

869
00:44:36,960 --> 00:44:39,480
Speaker 2: I had my last day of December thirty one, twenty

870
00:44:39,560 --> 00:44:42,960
Speaker 2: twenty one, my wife was six months pregnant. Didn't have

871
00:44:43,000 --> 00:44:47,320
Speaker 2: a job. We just had moved to Chattanooga six months prior.

872
00:44:47,600 --> 00:44:51,839
Speaker 2: We were living in like airbnbs, and our house was

873
00:44:52,120 --> 00:44:55,480
Speaker 2: six months late, like we were renovating it. It was

874
00:44:55,520 --> 00:44:59,640
Speaker 2: six months later. I'm being delivered, so health insurance, all

875
00:44:59,640 --> 00:45:01,000
Speaker 2: that stuff. I was gonna end with the business. My

876
00:45:01,040 --> 00:45:03,239
Speaker 2: wife wasn't working because she was pregnant, and we had

877
00:45:03,280 --> 00:45:08,120
Speaker 2: been moving, so there was just so many massive things

878
00:45:08,120 --> 00:45:10,040
Speaker 2: going on, Like I think the hardest things in life

879
00:45:10,080 --> 00:45:14,920
Speaker 2: are moving, having a kid, finding a new job, like

880
00:45:14,920 --> 00:45:16,919
Speaker 2: like we're doing literally, I feel like all of these

881
00:45:16,960 --> 00:45:21,200
Speaker 2: things all at once. My wife is I mean, she's

882
00:45:21,239 --> 00:45:23,479
Speaker 2: the best. Like she's the best, Like there was zero

883
00:45:23,719 --> 00:45:27,399
Speaker 2: shame from her when she realized like, oh, not only

884
00:45:27,440 --> 00:45:30,360
Speaker 2: are we walking away with nothing from this business, but

885
00:45:30,520 --> 00:45:35,120
Speaker 2: now we might lose the house and all these things,

886
00:45:35,719 --> 00:45:39,480
Speaker 2: and so we really just I think that in the beginning,

887
00:45:39,520 --> 00:45:43,080
Speaker 2: it was what has to get done today, like just

888
00:45:43,160 --> 00:45:47,680
Speaker 2: like just today, you know, is it in my inbox bankers?

889
00:45:48,080 --> 00:45:50,160
Speaker 2: Is it something with my landlord from the past? Is

890
00:45:50,160 --> 00:45:53,440
Speaker 2: it an employee thing that happened? And I because I

891
00:45:53,480 --> 00:45:56,279
Speaker 2: could not worry about, well, how's this thing going to

892
00:45:56,280 --> 00:45:58,640
Speaker 2: actually play out in the future, Like who knows, like

893
00:45:58,680 --> 00:46:00,279
Speaker 2: there's a million different ways it could go, and it

894
00:46:00,719 --> 00:46:04,160
Speaker 2: just turned into this, Hey, just this cadence for the day,

895
00:46:04,360 --> 00:46:06,479
Speaker 2: the cadence for the day, you know. And then before

896
00:46:06,960 --> 00:46:08,799
Speaker 2: long enough went by it had been a year of

897
00:46:08,840 --> 00:46:11,520
Speaker 2: those days and we could look back and Okay, we've

898
00:46:11,560 --> 00:46:17,000
Speaker 2: settled this amount of debts, house finally got done. Daughter third,

899
00:46:17,040 --> 00:46:19,440
Speaker 2: you know, our third kid came along in May, and

900
00:46:19,480 --> 00:46:24,240
Speaker 2: it just it just things started happening, and it's almost

901
00:46:24,280 --> 00:46:28,239
Speaker 2: like we just established this rhythm, you know, like and

902
00:46:28,320 --> 00:46:30,160
Speaker 2: it was just this it was really like a seven

903
00:46:30,200 --> 00:46:32,680
Speaker 2: day rhythm, you know. All right, this is Monday, this

904
00:46:32,719 --> 00:46:34,800
Speaker 2: is Tuesday. Okay, now it's the weekend, you know, and

905
00:46:34,840 --> 00:46:36,560
Speaker 2: then we're gonna do it again. And then we're gonna

906
00:46:36,600 --> 00:46:38,960
Speaker 2: do it again. Okay, now it's time. We're gonna bum

907
00:46:39,080 --> 00:46:40,880
Speaker 2: a vacation off our parents and just so we can

908
00:46:40,920 --> 00:46:42,279
Speaker 2: get out for a little bit. Okay, now we're back

909
00:46:42,280 --> 00:46:44,839
Speaker 2: to our rhythm, you know. And I think that we

910
00:46:44,920 --> 00:46:47,760
Speaker 2: have kind of kept that cadence going for the last

911
00:46:48,680 --> 00:46:51,000
Speaker 2: three years. I mean, it's gotten deeper and we're in

912
00:46:51,040 --> 00:46:54,359
Speaker 2: different things, but we are just like, what is the

913
00:46:54,400 --> 00:46:58,160
Speaker 2: thing right in front of us that is that requires

914
00:46:58,239 --> 00:46:59,759
Speaker 2: us the most to be in it, you know, what

915
00:46:59,800 --> 00:47:03,200
Speaker 2: is the most important thing. And it was just like

916
00:47:03,920 --> 00:47:08,919
Speaker 2: that over and over and creating this durability I think

917
00:47:09,120 --> 00:47:12,360
Speaker 2: in us. I mean, and she's six months pregnant and

918
00:47:12,440 --> 00:47:16,520
Speaker 2: our general contractor building our house is a nutcase and

919
00:47:16,560 --> 00:47:20,440
Speaker 2: she's over here doing his job, and I, you know,

920
00:47:20,719 --> 00:47:23,000
Speaker 2: so I've never been more proud of her. And she

921
00:47:23,120 --> 00:47:25,680
Speaker 2: got to see me doing my stuff and we were

922
00:47:25,719 --> 00:47:28,200
Speaker 2: just like a team, man. And then once you get

923
00:47:28,200 --> 00:47:30,799
Speaker 2: out of it, you know, like once you finally cross

924
00:47:30,880 --> 00:47:33,560
Speaker 2: that line and you're like, okay, you're you're free now,

925
00:47:34,760 --> 00:47:36,160
Speaker 2: there's a little bit of like, oh what do I

926
00:47:36,200 --> 00:47:40,640
Speaker 2: do now? But there's also just this, like we talked

927
00:47:40,680 --> 00:47:44,439
Speaker 2: about earlier, the fear is removed. It's just like, hey,

928
00:47:44,719 --> 00:47:48,960
Speaker 2: today is gonna be hard, but whatever it holds, like

929
00:47:49,560 --> 00:47:51,839
Speaker 2: we can, we can do it. And even if it

930
00:47:51,880 --> 00:47:54,719
Speaker 2: takes so much from us, like man, we can, We're

931
00:47:54,760 --> 00:47:57,520
Speaker 2: gonna be okay, you know, And I think that that

932
00:47:57,680 --> 00:48:00,880
Speaker 2: is what is the real That's what makes me grateful

933
00:48:00,920 --> 00:48:04,160
Speaker 2: looking back, because like who I am right now would

934
00:48:04,200 --> 00:48:08,320
Speaker 2: not is not possible without that extremely difficult season.

935
00:48:08,800 --> 00:48:12,719
Speaker 1: I think that's the nobody wants to go through. Tough

936
00:48:12,760 --> 00:48:15,480
Speaker 1: times like that. But and that's that's the thing. You

937
00:48:15,520 --> 00:48:19,400
Speaker 1: often can't see where the what can come out on

938
00:48:19,440 --> 00:48:21,560
Speaker 1: the other side is superible when you're in it, Like

939
00:48:21,880 --> 00:48:24,759
Speaker 1: you don't want anybody to tell you that, because you're like, yeah, man,

940
00:48:24,800 --> 00:48:27,720
Speaker 1: I'm in. I'm in like the thick of a bunch

941
00:48:27,719 --> 00:48:30,560
Speaker 1: of crap right now, and sure like two years from now,

942
00:48:30,560 --> 00:48:32,279
Speaker 1: I'll be better off. Great, I look forward to it.

943
00:48:32,320 --> 00:48:34,439
Speaker 1: But in the middle of it, it's really really tough

944
00:48:34,440 --> 00:48:37,000
Speaker 1: to hear that. I'm curious, like to just from a

945
00:48:37,000 --> 00:48:41,919
Speaker 1: practical business owner standpoint, how did going through bankruptcy? How

946
00:48:41,960 --> 00:48:49,239
Speaker 1: did seeing a business go from super successful to demolished?

947
00:48:49,800 --> 00:48:54,120
Speaker 1: How did that impact your the way you think about

948
00:48:54,400 --> 00:48:56,120
Speaker 1: constructing a business now.

949
00:48:57,680 --> 00:48:59,880
Speaker 2: I think it is the relationships of it. I mean,

950
00:49:00,200 --> 00:49:03,520
Speaker 2: these are I mean, we're we're talking about my life,

951
00:49:03,680 --> 00:49:07,680
Speaker 2: but there are thirty five employees lives that are wrapped

952
00:49:07,680 --> 00:49:09,879
Speaker 2: into this. I mean there were people that were, hey,

953
00:49:09,880 --> 00:49:12,719
Speaker 2: we believe in this thing. I'll take the salary hit

954
00:49:12,800 --> 00:49:14,800
Speaker 2: and I'll stay working. I Mean there's a lot of

955
00:49:14,920 --> 00:49:22,040
Speaker 2: nuances to this and just understanding like stewardship, Hey, they

956
00:49:22,560 --> 00:49:26,480
Speaker 2: these employees, this team has given you is giving you

957
00:49:26,560 --> 00:49:30,720
Speaker 2: their time, you know, handle that well, Hey, this customer

958
00:49:30,800 --> 00:49:35,480
Speaker 2: is giving you their money, handle that well. You know.

959
00:49:35,600 --> 00:49:38,440
Speaker 2: I think it's it's what does it look like to

960
00:49:38,640 --> 00:49:43,120
Speaker 2: build something well? And that again will require us to

961
00:49:43,200 --> 00:49:45,680
Speaker 2: handle that root cause because to do it well, man,

962
00:49:45,719 --> 00:49:48,480
Speaker 2: we've got to be kind of on the front lines

963
00:49:48,520 --> 00:49:51,040
Speaker 2: of what's needed the most from us, right, And so

964
00:49:51,960 --> 00:49:54,799
Speaker 2: I think that entrepreneurs and people in general have a

965
00:49:54,840 --> 00:49:58,560
Speaker 2: pretty good gut, Like I mean, there's a our gut

966
00:49:58,600 --> 00:50:01,200
Speaker 2: is data, like it's the day from our life of

967
00:50:01,320 --> 00:50:04,520
Speaker 2: just experience, and we can kind of tell all this

968
00:50:04,600 --> 00:50:07,839
Speaker 2: person is fishy or that doesn't seem like that's right.

969
00:50:08,400 --> 00:50:11,399
Speaker 2: And one of the biggest traps for entrepreneurs, I think

970
00:50:11,400 --> 00:50:14,960
Speaker 2: people in general it's like just ask questions. So he

971
00:50:14,960 --> 00:50:16,920
Speaker 2: you're sitting in front of your landlord, They're like, okay,

972
00:50:16,920 --> 00:50:19,799
Speaker 2: this is the deal. Here's the terms and conditions, and

973
00:50:19,800 --> 00:50:21,840
Speaker 2: you're like, okay, can you just tell me what this

974
00:50:21,960 --> 00:50:24,359
Speaker 2: clause is? Can you tell me why? Like, just to

975
00:50:24,400 --> 00:50:27,600
Speaker 2: be able to say that takes guts, but like so

976
00:50:27,719 --> 00:50:29,719
Speaker 2: few people actually do it. You would be surprised at

977
00:50:29,760 --> 00:50:33,359
Speaker 2: how much is so much easier in business just by saying, hey,

978
00:50:33,400 --> 00:50:35,799
Speaker 2: I don't get this your bookkeeper sends you your numbers? Hey,

979
00:50:35,800 --> 00:50:38,840
Speaker 2: what does this number mean? You know, because it's like

980
00:50:39,640 --> 00:50:42,800
Speaker 2: we when we're in that fear space, all we're thinking

981
00:50:42,920 --> 00:50:45,360
Speaker 2: is we need to know everything, but it's impossible to

982
00:50:45,400 --> 00:50:47,000
Speaker 2: know everything. And so if we can just kind of

983
00:50:47,000 --> 00:50:50,359
Speaker 2: open this up and be like, hey, like be more

984
00:50:50,360 --> 00:50:52,839
Speaker 2: transparent and vulnerable with our team, with the people, you know,

985
00:50:52,880 --> 00:50:55,640
Speaker 2: with the stakeholders and the business all that stuff. It

986
00:50:55,680 --> 00:50:57,879
Speaker 2: feels uncomfortable at first, but once you realize that that's

987
00:50:57,880 --> 00:51:02,879
Speaker 2: actually the key to it is it's it turns into power, right,

988
00:51:03,000 --> 00:51:06,239
Speaker 2: not like unhealthy power, but it's empowering. Yeah.

989
00:51:06,480 --> 00:51:08,719
Speaker 1: Well, I Philip Man, I really appreciate you you coming

990
00:51:08,760 --> 00:51:11,640
Speaker 1: on sharing your story. I think it's gonna resonate with

991
00:51:11,800 --> 00:51:14,680
Speaker 1: a lot of folks and and also for anybody out

992
00:51:14,680 --> 00:51:16,719
Speaker 1: there and the how to money audience who's interested in

993
00:51:16,800 --> 00:51:19,960
Speaker 1: starting a business like I think these there's just a

994
00:51:19,960 --> 00:51:23,560
Speaker 1: lot of great, like practical advice in here, but then

995
00:51:23,600 --> 00:51:28,719
Speaker 1: also just a lot to learn from your experience so

996
00:51:28,760 --> 00:51:33,000
Speaker 1: that hopefully other people can avoid some some missteps too.

997
00:51:33,040 --> 00:51:35,160
Speaker 1: So where where can how the money listeners find out

998
00:51:35,160 --> 00:51:35,600
Speaker 1: more about you?

999
00:51:35,680 --> 00:51:39,040
Speaker 2: Man? Yeah? So our website is it's kind of you know,

1000
00:51:39,080 --> 00:51:41,360
Speaker 2: domain names are interesting now, so it's m L T

1001
00:51:41,760 --> 00:51:46,480
Speaker 2: p l Y dot co so multiply and it's interesting. Man,

1002
00:51:46,800 --> 00:51:48,920
Speaker 2: Like we talked about this before, Like the thing that

1003
00:51:49,120 --> 00:51:52,799
Speaker 2: broke me is how I serve people. And maybe this

1004
00:51:52,840 --> 00:51:56,000
Speaker 2: is another podcast, but we do accounting an advisory now,

1005
00:51:56,080 --> 00:51:59,360
Speaker 2: like that's that's my company. And so I've partnered with

1006
00:51:59,440 --> 00:52:03,840
Speaker 2: CFOs and bookkeepers and controllers to now serve entrepreneurs in

1007
00:52:03,920 --> 00:52:08,359
Speaker 2: their financials and so, you know, my my hope is

1008
00:52:08,440 --> 00:52:12,040
Speaker 2: just that the fear of financials is removed from entrepreneurs.

1009
00:52:12,160 --> 00:52:16,480
Speaker 2: Like there is so much strength that comes from just

1010
00:52:17,160 --> 00:52:20,399
Speaker 2: like having authority over the money, you know what I'm saying.

1011
00:52:20,440 --> 00:52:23,160
Speaker 2: And it's like whether it's a lot, whether it's a

1012
00:52:23,360 --> 00:52:27,080
Speaker 2: you know a little bit hey, like it doesn't own you,

1013
00:52:27,080 --> 00:52:29,360
Speaker 2: you know. And so we're in that conversation a lot.

1014
00:52:29,400 --> 00:52:33,000
Speaker 2: And I've kind of taken time off social media. I'm

1015
00:52:33,000 --> 00:52:36,279
Speaker 2: on Instagram at Phil Sanders and then LinkedIn. You can

1016
00:52:36,280 --> 00:52:40,760
Speaker 2: find me Phil Sanders there, but I'm really focused more

1017
00:52:40,920 --> 00:52:43,439
Speaker 2: on just kind of one to one interactions right now.

1018
00:52:43,480 --> 00:52:45,520
Speaker 2: But the site in the LinkedIn is probably the best

1019
00:52:45,560 --> 00:52:46,160
Speaker 2: way to find me.

1020
00:52:46,560 --> 00:52:49,520
Speaker 1: Awesome, Phil, thank you for your time. Man, I appreciate it. Yeah,

1021
00:52:49,560 --> 00:52:52,080
Speaker 1: you got it all right. So thankful that Phil joined

1022
00:52:52,080 --> 00:52:56,160
Speaker 1: me on today's episode. Man, such and just his honesty,

1023
00:52:56,520 --> 00:53:00,080
Speaker 1: willingness to share his story and get into what that

1024
00:53:00,160 --> 00:53:04,160
Speaker 1: meant and what he learned about building businesses from the

1025
00:53:04,239 --> 00:53:09,880
Speaker 1: difficulties that he went through, and it was yeah, just

1026
00:53:10,320 --> 00:53:13,760
Speaker 1: I think revealing. And for anybody out there who's interested

1027
00:53:14,120 --> 00:53:16,239
Speaker 1: in starting a small business or who currently runs one,

1028
00:53:16,880 --> 00:53:18,680
Speaker 1: I think there's just a lot of information here for

1029
00:53:18,719 --> 00:53:20,480
Speaker 1: you to take away. And even just from on the

1030
00:53:20,480 --> 00:53:23,719
Speaker 1: personal finance level, there were certainly some things that you

1031
00:53:23,719 --> 00:53:27,960
Speaker 1: could extrap it from Phil's business experience into how you

1032
00:53:28,000 --> 00:53:29,839
Speaker 1: handle your own personal finances. This makes me think of

1033
00:53:30,040 --> 00:53:32,160
Speaker 1: you know, one of the big takeaways from this episode

1034
00:53:32,160 --> 00:53:34,760
Speaker 1: that I had was when he talked about debt being

1035
00:53:34,840 --> 00:53:38,919
Speaker 1: a band aid, and that is so true. I think

1036
00:53:38,920 --> 00:53:41,000
Speaker 1: on the business building front, yeah, you might be able

1037
00:53:41,040 --> 00:53:43,520
Speaker 1: to build faster, and there are times where it might

1038
00:53:43,640 --> 00:53:46,719
Speaker 1: make sense, but it is also what do you think

1039
00:53:46,920 --> 00:53:51,080
Speaker 1: extrapolated to personal finance. So often when we're taking on debt,

1040
00:53:51,280 --> 00:53:54,080
Speaker 1: it is to bring a purchase that we could make

1041
00:53:54,120 --> 00:53:58,879
Speaker 1: in the future into the right now, and it comes

1042
00:53:58,880 --> 00:54:03,799
Speaker 1: with a price tag attached. To it and potential potential difficulties,

1043
00:54:03,960 --> 00:54:06,359
Speaker 1: right if we're unable to make that debt payment. That's

1044
00:54:06,360 --> 00:54:08,160
Speaker 1: where I think buy now, pay later is so nefarious.

1045
00:54:08,200 --> 00:54:09,920
Speaker 1: It's like get the thing now and pay for it

1046
00:54:10,760 --> 00:54:14,680
Speaker 1: low and slow over time, and that Yeah, you can

1047
00:54:14,719 --> 00:54:17,160
Speaker 1: do that, but it's not necessarily the best way to go,

1048
00:54:17,200 --> 00:54:18,920
Speaker 1: and it's a band aid. It's a way to get

1049
00:54:18,920 --> 00:54:22,480
Speaker 1: the thing you want without having to wait, and that

1050
00:54:23,120 --> 00:54:25,560
Speaker 1: slow and methodical. When you think about it, it's like, man, well,

1051
00:54:26,040 --> 00:54:29,120
Speaker 1: if I'm doing great now, well more of a good

1052
00:54:29,160 --> 00:54:33,040
Speaker 1: thing is just better. And I think Phil's experience highlights

1053
00:54:33,080 --> 00:54:35,719
Speaker 1: how that's not always the case, and how even when

1054
00:54:35,719 --> 00:54:40,200
Speaker 1: he talked about those short term expectations, how that he

1055
00:54:40,239 --> 00:54:44,600
Speaker 1: continued to raise those short term expectations and he was

1056
00:54:44,640 --> 00:54:47,920
Speaker 1: able to dial up some profitability right in that moment,

1057
00:54:48,440 --> 00:54:51,600
Speaker 1: but then over the longer time, it put his business

1058
00:54:51,880 --> 00:54:54,239
Speaker 1: at bigger risk. And he also just bid off a

1059
00:54:54,280 --> 00:54:57,960
Speaker 1: lot more because like in terms of hiring employees, buying

1060
00:54:58,000 --> 00:55:01,160
Speaker 1: more inventory, and that actually ended up putting him in

1061
00:55:01,239 --> 00:55:04,759
Speaker 1: a precarious place. If you build a little bit slower,

1062
00:55:05,200 --> 00:55:07,840
Speaker 1: if you take on less debt, that puts you in

1063
00:55:07,880 --> 00:55:10,920
Speaker 1: a stronger position even if you're not growing as fast.

1064
00:55:10,920 --> 00:55:15,680
Speaker 1: And he said success equals discipline, and I think there's

1065
00:55:15,680 --> 00:55:18,160
Speaker 1: a lot of truth that right that the discipline of

1066
00:55:18,600 --> 00:55:21,600
Speaker 1: doing the hard thing, doing the right thing on repeat,

1067
00:55:22,040 --> 00:55:24,120
Speaker 1: that is what's ultimately going to lead to success. And

1068
00:55:24,120 --> 00:55:28,040
Speaker 1: if you try to take the shortcut, that is often

1069
00:55:28,120 --> 00:55:33,240
Speaker 1: a recipe for hardship. So hope you enjoyed this interview

1070
00:55:33,239 --> 00:55:36,360
Speaker 1: with Phil Sanders, and we'll put links to his website

1071
00:55:36,560 --> 00:55:38,480
Speaker 1: up in the show notes on our website at howdomoney

1072
00:55:38,480 --> 00:55:40,960
Speaker 1: dot com. All right, until next time, best friend out.