Shownotes
Chuck Blakeman, founder of the Crankset Group, a counter-intuitive and no-nonsense approach to life and business; focus on purpose. Chuck is a successful entrepreneur, #1 best-selling business author and world-renowned business advisor who built ten businesses in seven industries on four continents, and now uses his experience to advise others. His company, Crankset Group, provides outcome-based mentoring and practical strategies.
Chuck Blakeman, Founder Of The Crankset Group, A Counter-Intuitive And No-Nonsense Approach To Life And Business; Focus On Purpose
We’re here with Chuck Blakeman in Crankset Group’s office in Greenwood Village, Colorado. Chuck’s a successful entrepreneur, number one bestselling business author, and world-renowned business advisor. He built ten businesses in seven industries on four continents and now uses his experience to advise others. His company, Crankset Group, provides outcome-based mentoring and peer advisory for business leaders worldwide. Chuck sold one of his businesses to the largest consumer fulfillment company in America and led three other $10 million to $100 million companies. He presently leads the Crankset Group and a for profit business based in Africa, focused on developing local economies to solve poverty. Mr. Blakeman is a results leader with decades of experience leading companies in marketing, import, export, fulfillment, call centers, website development, printing, and direct mail processing. Chuck, it’s a pleasure to have you on the podcast.
Great to be with you.
I must confess, I’m already a fan. I have already read the book more than once, so that was cool. The book, Making Money Is Killing Your Business, is in its second edition. Somewhere in that book, what crossed my mind is you started somewhere before this and then you had a pivot and changed how you thought about business. Let’s dig into that.
Making Money Is Killing Your Business, How to Build a Business You’ll Love and Have a Life, Too – Second Edition
The book itself is a compilation of all the stuff I’ve been through. I speak a dozens of times a year, keynotes. I’ve written books that are now college textbooks and required reading. I always tell people I do not see myself as a speaker or an author, I’m just a business guy who speaks, talks, and writes about what he did. That’s why these books have worked for me and worked for other peoples because they come from years of bleeding over and stuff and doing it badly and figuring it out and stumbling and bumbling and mucking my way to what works.
These are all built on real life and not on what can I sit in an ivory tower and pick out and design for people. My first five or so businesses were the same thing over and over again in different industries. I’m a serial entrepreneur, I’m left-handed, right-brained, ADHD, dyslexic, all that stuff. I graduated at the bottom of my class in high school. They barely let me out, actually discussing the day of graduation whether they should let me go or not. That’s how bad it was. I got that classic background. I went through business after business. Once I figured it out, I’d get bored, and then there would be something else that I didn’t understand. I never went into a business I understood. That made no sense at all because why would you do that?
I was doing this stuff, I had no idea what I was doing. Then once I figured it out, I went through the first full iteration of it began to be successful, then I’d get bored and I either kill the business or move on to another one. In that process, looking back after about the fifth business, I was looking at my sixth business and starting this again. I said, “I have to look back and review what’s happened in the last ten years or fifteen years in these first five businesses” What struck me is the BFO. The BFO is the Blinding Flash of the Obvious. We have this thing called the BFO and I was having a BFO with myself. I didn’t have a term for it back then. I got that from another guy.
What I came out with was that my first five businesses we’re all in five different industries and they were all the same result in five different ways. I was in my tenth or eleventh business before I could say I did something that wasn’t going to make money. I always made money at these things, but every single one of them, every time it grew, the more it grew, the faster my life ran. I began to talk and whine about being on the treadmill and it’s this thing I talked about myself and a few close friends. Now I’m on the treadmill again. The hamster wheel might’ve been a better and more appropriate understanding of that. All it did was build a treadmill for myself.
The better the business went, the faster my treadmill. I looked at that after five businesses and said, “This doesn’t make any sense. If I build a sixth business, I’m just going to do this all over again. I’m going to build another fast treadmill. Why? What is this doing for me?” That was a blinding flash of the obvious. It was one of those moments we call it coming to the end of yourself. When I work with CEOs and business leaders and their teams, I need to see that people who have come to the end of themselves or we can’t help them. I’d come to my end and myself and said, “I got to figure this out.” I was in an open place to figure this out and I went into the sixth business saying to myself, “I don’t have any clue how I’m going to get where I need to go. I just know where I need to go.”
That also laid the foundation for a lot of other principles that we built on, on knowing where you need to end, not how you get there. The thing I came up with was I need to end up in a position where this next business gives me a life, and it doesn’t have to give it to me in the first three minutes or even in the first three years, even the first four or five years, but it better gives me a life. Throughout the whole process, it should be giving me life. As I formed that, it came out as I intend to make more money.
This business, every other business, I made more money by spending more time. I’m going to reverse that. This time I’m going to figure out, I don’t know how, but we’re going to do it. We’re going to make more money in less time. The more money we make; the less time I’m going to spend in this business. That will be a driving principle in this business. We’ll make myself replaceable. That began all sorts of business principles, tools and practices that we’ve developed from that. What I didn’t know I was saying at the time was that for my first five businesses, I was an income producer. I was not a business owner.
You were in it instead of on it.
I thought it was a business owner because the IRS kept asking me for money and now I kept having to give it to them and we had employees and all that other stuff, but I wasn’t. I was an income producer and what I learned in the sixth business was the difference and that’s simple. The way you know you’re an income producer is if you’re not there, the thing begins to fall apart or degenerate fairly rapidly if you’re not there. You can leave for a week, maybe you can even leave for two weeks, but if you’re gone for three weeks or more or a month or you regularly aren’t there, you’re only there two or three days a week, the thing begins to fall apart without you. You are not a business owner. You produce income. Whether you produce it directly by making the chairs or you produce it indirectly by motivating the chair makers and creating all the other infrastructure around it and then having that fall on you, if you’re not there, chairs don’t get made, money doesn’t get made, and you’re not a business owner.
That was part of the BFO that they came together for me over time. I have been an income producer. I had one business went from $1.5 million to $9 million in three and a half years and we had to sell it because of cashflow issues. I didn’t understand correct cash flow at the time that the faster you grow; the less money you have. We had wonderful profit and loss sheet, but the rest of it was a mess. What I learned from that was that it’s not about how much money the business makes, it’s about what does it do for the people who worked there.
The research is showing that the more you focus on that thing, the faster your business can grow, the more money you will make. It’s the converse. Stop focusing on the production, the assembly line, the marketing, and all that process. Focus first on your purpose, your principles, and your people and they’ll fix the processes, the production, the pricing, and all the other stuff that comes from that. That was what happened to me to get me started on this journey that ended up years later in me writing this book and as I did that, I had friends who had asked me, “What are you doing? How can you be taking every Monday and every Friday off and having a successful business?” We began to help others and off we went.
Focus first on your purpose, your principles, and your people and they'll fix the processes.
What was the last business that you had that you were in old school?
It was the first direct mail operation I had. I never ran them old school in terms of how you design an organization. Again, I’m left-handed, right-brained, artsy fartsy. I never went to business school. I never had any interest in doing what somebody thought would work. I only did what I thought would work and what actually worked. I just did stuff. My businesses were always generally flat. Many of my businesses, we never even had business cards because it didn’t make sense. We didn’t have titles, we just got stuff done. There’s 120 people and we got stuff done, but all of them had their negative impact on me of forcing me into a faster treadmill. That’s what had to change.
We’ve gotten much better at that being flatter and totally flat and self-managed and that stuff. We’ve continued to enhance that, but that was always there because it intuitively worked better than the classic top down hierarchy I call the pyramid scheme. We always did that. The real difference was in the sixth business. I made it my objective to make sure that I got off the treadmill as the business got on the treadmill. That resulted in things like what we have here on our board in our training center here. We have this thing splashed across the front of our training center in fourteen-inch letters. It says, “Make your own business rules.”
As I think about the audience and they go, “That sounds familiar. I’m working hard, I don’t know about effective, but hard.” The title of your book, Making Money Is Killing Your Business, I would think that most guys would go, “Say again?” Let’s dig into that a little bit.
A lot of what we do is counter logical, not on purpose. There’s so much of what we think is true is not. We’ve over generations assumed that the last guy had it figured out when in fact he never had it figured out either. We take on assumptions that are bad assumptions, and one of them is that the reason for a business is to make money. It’s a dumb idea, and good entrepreneurs will even tell you that. Robert Hershey back on the sharks, he says, “I don’t go into business to make money. I go into business to solve a problem and to do something meaningful.” Steve Jobs said, “I never got up in the morning thinking about how much money I could make. I got to think about what cool technology could we create next.” That’s the purpose of this.
Most people, when they lose their job, or they have an entrepreneurial spasm and quit because they were making money for the man and they want to do it on their own. Most people go into business in survival mode and they think, “The reason I’m in business is because I have to pay my mortgage,” or “I have to pay my 50 people, whatever it is. I got to get the urgent stuff paid this month and so we make chairs so that we can pay the bills this month.” It all happens again next month. We make the chairs so we can pay the people again and off we go and we are on the eternal treadmill because we bought the assumption that the reason to be in business is to make money.
The reality is and the research shows that people who go into business to make money tend to make very little of it and making money is not an empowering vision. It’s one of the three tenants of what we called the big why. Making money is not an empowering vision. People who go into business to do something bigger than making money are almost always much more successful and make a lot more money. Don’t go into business to make money because that’s the thing that’s killing your business, is your focus is on making money. Figure out what is it that we’re good at, what could we offer the market, who would buy that, and how do we get that to those people. Let’s serve somebody, let’s solve a problem, and let’s do this for something bigger and for something that’s more motivating. I’m going to get a life. They’re going to get a life. We’re going to create a legacy. We’re going to develop cool technologies that will change the world.
Bill Hewlett is a good example of that. Back in the ‘60s or ‘50s, he said, “I stopped getting invited to MBA programs because I told them we didn’t have a business plan. We made this up as we went along.” That’s what he said. One quick thing he said, “What we did know was that we wanted to make a difference in the world of technology.” He was driven by a strong purpose, not by making money. You look at Facebook, Google, LinkedIn, you name all these apps and all these things that are multi-billion dollar businesses and they did not have making money as their primary purpose. There’s something in that for us. What are you doing this for? If you’re doing it to make money, you’re in trouble right out of the gate. Find a bigger reason to do this or you’re in trouble.
There are folks who are going, “This is what’s been bothering me.” You’re describing them in their company. We see it on TV when the guys on the treadmill are going a little too fast and off the back end he goes. There is another component other than book writing. You have 3to5 Club. Can you walk folks through the process of what you do and what you found in a business to help folks? I think it was called business maturity date.
The question that has driven me my whole life is why do what others can and will do when there’s so much to be done that others can’t or won’t? Why do that? That’s an entrepreneurial mindset, filling the holes, looking for the gaps. Why do that? Somebody is already doing that, but nobody’s doing that. This was one of those, 3to5Club. We always had a small business. Our biggest one went to $9 million, some of them were $500,000 businesses and we were always small. Then I’d get bored and moved on until we got to this. In that process, I always saw these small business consultants. I was never a fan of consultants and now that I play that role on TV, but I was never a fan of them because they didn’t seem to have any background in this stuff.
The pattern was this, I’m a small business consultant until some mid-level or larger organization offers me a contract and then I’m out of here. The real message was, “Nobody else will buy me right now. Maybe I can trick the small business people into buying me. Until somebody with a lot of money buys me, I’ll work here.” All of a sudden, I’m not a small business advisor. I’m a big business advisor and off we go. I saw that pattern year after year, people coming in and out. As I did that, the rationale from all of these people was you can’t make money helping small business owners. That’s a conundrum. You start there but you don’t end up there because you can’t make good money helping small business owners, they need it the most and they have the least money.
Nobody was solving this problem. Why do what others can and will do when there’s so much to be done that others can’t or won’t? Nobody could solve the problem of how you make money as well as impact with small business owners. 3to5 Club emerged out of that. For about two or three years, I tested things, I tried things, and I experimented masterminds and one to ones and hooking people and networking people and doing all kinds of things to see how we can help small business owners in the most meaningful way and still make money out of it. 3to5 Club eventually emerged out of that. It’s a very simple concept. It’s not new. Nothing I do is new. I’m an innovator. I’m not a creator. I take good ideas and I change the way they’re presented to the world and move them into different categories. We took business advisory, which happens usually with larger organizations. You have a Vistage and TAB and all these other business advisor groups that charge $1,200 to $1,500 a month for people who are $5 million businesses.
Crankset Group: Making money is not an empowering vision.
What about the 26 million businesses in America who aren’t at that level? The overwhelming majority, the 98%, we took that concept and we brought it to small business owners, but you can’t just bring it the ways it has worked at that level because it’s a whole different set of problems down at this level. We got mostly income producers who haven’t figured out how to become business owners yet and there’s a transformation that has to happen in there. We brought that in and it was one of the reasons I wrote the book Making Money Is Killing Your Business is to support 3to5 Club.
Here’s a compendium or reference manual for how to build a business based on my, at the time, seven or eight businesses that I’ve built over the last twenty years. He was how I did it. Here’s how you can do it. We used that to help 3to5 Club members. 3to5 Club meet twice a month. We have a maximum of 24 people in a club. They are in a couple of hundred-dollar range rather than $1,500 so it’s very affordable for smaller business owners with under twenty employees, and the objective there is to help them figure out how to build a business that makes more money in less time, gets them off the treadmill, and gets them back to the passion that brought them into business. “I forgot this used to be fun,” and that’s the passion. We’re working with those guys who a lot of times then they’ll grow their businesses and they’ll go on and they’ll get involved in Vistage or something like that in another level where they have different problems.
That came out of that whole thing. Nobody can solve
