The Hidden Fees That Can Make Your Franchise Unprofitable

Sean Weisbrot: Tom Rutledge is the co-owner and managing partner of RDMS Group, a US based hospitality group that helps owners that run restaurants to succeed. One of the main services they provide is accounting. I was interested in talking to Tom because of his experience with franchising. And with hospitality, and in this conversation we talk about a number of different things, including some questions I have about franchising. Like why would someone want a franchise? What are the benefits of it? What are the downsides of it? What are things that people aren't aware of when they get involved that they don't realize? Is reality until the business is up and running. These kinds of questions. We also talked about some of the things that he's learned in being a business owner. Some of the things that he sees, the business owners he work with not know and need to learn how to do and these kinds of things. So this is very much a teach me interview. I hope you like it. Tom, what made you interested in accounting and small businesses?

Tom Rutledge: it was actually access to larger corporations of businesses that I realized. I preferred having a more direct impact and getting involved in people who are focused on the details. Uh, I'm definitely a details guy. I am a systems guy. I'm a builder of how to do things. Um, I'm less the big, big, big, big, big picture. More the turning that big, big, big picture into a reality. So my big, big picture, if you will, was starting my own company that focused on having. Other people figure out the actual solutions to achieve what they were trying to do specifically in their business. So getting involved in large financial firms, which I thought was my path, and getting involved in that culture and that atmosphere, I found I didn't have any passion for it, to be honest. So in review, I decided to look at what did get me excited and had the good fortune and luxury to be able to. Go after that very specifically and really dove headfirst into systems development, personnel development, and really get in the trenches and hands-on stuff and eventually turned that into literally my business. So that was the foundation of it.

Sean Weisbrot: I think for me it was wanting to avoid large business. So my dad is a, was a small business owner for decades and I grew up watching that and. My brother was always entrepreneurial and he ended up working for Intercontinental, the hotel chain in, in the corporate office in Atlanta. And I saw how he struggled with not really knowing how to best apply himself and feeling like there was a lot of his energy left on the table, but he was happy with the salary. And so I, I was able to see really early on, 'cause my brother was a few years older than me, so I was still in college when he started working with them. And so I was able to see before I finished college, I don't wanna work for a corporation. And being a dentist like my dad is not a good idea. I mean, obviously I was already on a, a, a. Undergraduate path that took me outta that. Um, but, but yeah, I, I knew very early on what I didn't wanna do.

Tom Rutledge: I think that's hef the battle that a lot of people don't figure out very quickly. And I think that it might be even more important than knowing what you want to do is figuring out what you don't want to do. And I don't think we as a culture really talk about that enough. We, we ask. People at the ripe old age of 17 or 18 to figure out what they want to do with the rest of their life and go to college and spend a ton of money pursuing something, not knowing if it's necessarily. Anything they could do for the next 40 or 50 years of their life. And I think when you're able to reflect and look at things, I come from a family that was 50 50 entrepreneurial, uh, the big family, extended family, and it was 50 50 entrepreneurial. And 50 50. The other 50%, excuse me, was big time finance. And I liked all the money and fancy things and nice homes and I, I liked the. The reward that came from big finance. Uh, and then I got, that's, like I said, I, I got into it and realized I don't like it that much. Not enough to, if this is my every day, there's not enough shiny objects to make me pursue it specifically. So watching the passion of those entrepreneurial, entrepreneurial types, uh, you know, it's not all. Rose colored lenses. It is absolutely grind set. There's, you don't really get the opportunity to learn in a book or in school or by watching anybody else what it means to start your own business. But I what it for those who really do thrive on it, when the bug bites, it's kind of impossible to go in another direction once it happens.

Sean Weisbrot: Yeah, and that happened to me. I was actually, literally before this recording, you could hear my voice isn't great anymore. I spent an hour talking about. Where I am today and kind of how I got there. And a huge part of that was China, when I learned living in China be made me become entrepreneurial. Which is funny because before that I literally had no desire to do business at all. You know, 22, 23 years old, not not one interest at all. And living in China within the first year, I was like, yeah, business. I could do that. I could do this better than they can. Anyways, it's a, a different story, but I, I feel like a lot of small business owners struggle where they have an idea. And they know how to do that thing. But when it gets to a point where they need to hire people and stop doing that thing so that those people can do that thing for them, their businesses suffer because they don't know how to be a business person, which is where my dad struggled. Um, and that prevented his business from doing a million dollars a year In sales.

Tom Rutledge: Expertise and leadership are two very different things, and I think they're often confused. Um, there are many people running. Software companies who are CFOs, they're not gonna be able to sit in a room full of engineers and talk about the product in the same way. They might know enough to be dangerous, but leadership is a very different quality. And I think in small business, when you are, especially when you're a very small business or a startup, and you're wearing 15 different hats, you're, you're legal, your hr, your marketing, your sales, your product development at some point. Taking off the hat and, and it's as much, I think it's not just a personality trait. There's the always big fear. If you're a well minded business person, and, and this is what I deal with all the time with my, uh, clients, it's you have a small amount of money, and if that money goes away and small is relative to some people, small, might be a million dollars small, might be a hundred thousand dollars small, might be $10 million. It depends on payroll and overhead and all the other things, but. You're paying the, that's your, that's your tool. It's your primary tool. How do you use your tool most effectively? It's, it's half the battle that I think a lot of new business owners who wanna become leaders have to figure out how to use that tool most effectively and have the guts to make the right amount of risk. Uh, in addition to what you mentioned, I think it, you, you're massively right, it's, I don't. I am a marketer by trade. I'm unwilling to give the marketing responsibilities to the marketing person that I hired and is now on salary. It's not an uncommon story in the most small business.

Sean Weisbrot: What kind of things have you learned in working with small businesses?

Tom Rutledge: Fascinating question. I think, you know, being a, having outlets, uh, creative outlets and making sure that the work, even though it's all consuming, that you have the ability to step away, is probably the one that I don't think enough people, even if it's. Leaving at a reasonable time in the evening decompressing. Coming back to work with clear thoughts, I think is something that I find, especially COVID was a really interesting time. My particular industry that I support the most got hit pretty hard, and it led to so many changes in the industry that the people who were able to take a deep breath to review what was going on. To step back and make the best critical decisions are the ones who are being most successful now. Um, I think the other one is, as I mentioned before, it's one thing to be really great, to be an expert or have a significant expertise in something, but I. I would say that the first thing is you need to speak accounting. Accounting isn't a numbers game. It's a language. It's like learning a dialect of Chinese. It's like learning Spanish. It's like learning French, learn it. It is the language of business, so you, even if you are, I don't care if you're a painter, a photographer, a chef, if it's, if it's an artistic pursuit or you are building 3D printers, it's, if you don't know about cash flow, cash management, and how to review a p and l. At some point, you can't just look at a bank account and watching it go up or down. You have to understand what's actually affecting your business. Getting into the data is not, is something, I think a lot of people who have expertise but fail in leadership. That's one of the primary flaws they have.

Sean Weisbrot: I've always struggled with accounting, which is no joke. Why my best two businesses have been consulting where I'm basically by myself, where I have maybe a few contractors and it's just no overhead. And so I don't have to worry about p and l because a hundred percent of the money that comes in, or 99% of the money that comes in is just profit. I just take any of it that I want.

Tom Rutledge: You know, I, I, the one thing I would, I wouldn't use the word challenge, but the one thing about that is. What is your time? Value of money is still a calculation that I'm you, you're doing it organically, even if it's not on a balance sheet, right? Who should I talk to? How much am I getting paid? What's that contract worth? Where am I best using my time? It, when you're looking at cash flow, your commodity is time. So you're, you need to maximize your, your time value there. Uh, I agree. Service is an interesting business. It may not have the scalability or exit values of like SaaS programs, which I know you have a background in and all that kind of stuff, but you can't argue with margin. It is definitely there.

Sean Weisbrot: Yeah. I mean, who doesn't like to have a hundred thousand dollars come in and you get to keep 98,000 of it?

Tom Rutledge: It's a nice feeling.

Sean Weisbrot: Yeah. You said it's not scalable. I, I, I would push back on that specifically for the way my business runs. It is scalable significantly, although it'll never sell and I don't need it to sell. But the scalability is more interesting because my partner networks or my partner network, they all provide monthly recurring services. So once introduce a client and the client signs on, they're probably gonna be working with them six, 12, potentially 18 and 24 months. And I get a commission every month. So as long as I keep bringing them clients, the commission stack, so it's infinitely scalable as long as I manage my time and find the best possible leads.

Tom Rutledge: The referral, I, it's a brilliant model. It there's paying to be a person who knows the best options for other people. A highly coveted and necessary skillset because there is extreme value in you saving me the research or somebody saving me the research of where to go, who to talk to, and what to find. Like I said, time, value of money, and as long as everyone's scratching each other's back in that capacity, it's a beautiful thing.

Sean Weisbrot: And the best thing is the, my clients aren't even paying me. The partners pay me, so I'm giving the clients free advice. If they take it, they take it. If they don't, they don't. But I know that I'm providing them with the best possible partner that I know of. 'cause I've spent a long time building those relationships and getting to know those people and knowing who's going to have the same values that I do, which is always be honest and transparent and make sure that you do what you say you're gonna do in a timely fashion. Very, I'm a very simple person and if I can't find the service provider who can do that. They don't deserve to have my clients.

Tom Rutledge: Uh, I would is your term simple is accurate, but I'd also argue very hard to find people who actually adhere to those values and live up to them,

Sean Weisbrot: which is why I only have a few partners.

Tom Rutledge: That's a good point.

Sean Weisbrot: So let's kind of turn the focus back towards hospitality, I guess in small business. Um, so I know you have experience in franchising. I also know that you didn't want to put too much time into talking about franchising, but I also feel like I would be preventing the audience from having an opportunity to learn about something if I didn't ask at least a few questions Regarding franchising. Why would someone want a franchise

Tom Rutledge: globally or just big picture? Speaking franchises are very attractive in so much as it can reduce risk. For the sector you're trying to go after? Uh, my background is in hospitality, you know, restaurants specifically. Um, the ability to get behind a national brand, to not have to develop awareness, marketing campaigns, sourcing, and a lot of the. Foundational items is where franchises are very attractive, and for the most part, if you choose the right one, that is accurate. I think the hard part in the franchise world is a lot of people only think of the national brands when it comes to franchising. You know, the McDonald's and Chick-fil-A and Burger Kings of the world. There's a lot of regional franchising and I think that that's a story that doesn't get. Into the franchise world that I think should be covered because the big brands have figured out the formula. I think that the. Barriers to entry, you know, it's, it's capital, it's location, it's the other things that are there. The national chains, like I said, more or less bulletproof in what the expectation's gonna be, how it's supposed to run and, and what that's gonna be. When you move into something maybe more regional, I think you have to be a lot more careful because you may think you're getting what a national brands offer from a franchise level, but not often the case, or not always the case, I should say. But the access to a pre-developed brand is very intriguing.

Sean Weisbrot: What are some of the downsides or some of the things that. Well, I guess those are two different questions. What are some things about franchising that people don't know until they've gone through it and their business is up and running and then they're, they're shocked by the fact that they didn't know about it and it's affect, it affects them.

Tom Rutledge: Franchises are best owned by lawyers. 'cause it's all contract. It would be like the short answer to that question because sometimes they don't realize that they have very strict contractual obligations of sourcing. They may find a like product for a lot less money, but. The franchisor has a deal where they're getting, you know, margin on what you buy and therefore you're in contract to get things, even if it's not in your best interest. Or you have to buy the, again, speaking to hospitality, the sauces, the packaging, the x, y, and Z items, and it's in a closed circuit. And you, you may not realize you signed up for a purchasing contract and it's expensive, or that there are clauses that you thought you bought a region. And you find out that they sold the store five blocks away from you to the rights of that to somebody else. So your region wasn't exactly what you thought it was. So the contract is going to be hyper specific or I think where a lot of people get confused, and this does speak more to that regional concepting of franchise. It is so vital. To thoroughly read and vet and not just get excited about a concept, but read your contract because you may not realize the volume of fees you're paying to somebody and how you thought you were gonna clear X percentage, and then you get into it.

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Tom Rutledge: business and you realize it's significantly less. Your bottom line isn't. Nearly what you thought it would be. Uh, you were expecting 30% and it's 10, for example, because of all the various ways you have to pay the franchisor. I also think that it's often a surprise that the marketing dollars never go as you anticipate. That you're going, the billboard that's 200 miles away is being used as part of your marketing spend, even though no one's ever gonna come to you because of that billboard, et cetera. So I think that within franchises, it often comes down to what does the contract say you're gonna get? And then again, not so much on national, but I'm speaking mostly to regional 'cause there's a lot of 'em that people don't realize that the company doesn't really have their stuff figured out. If you sign up with the wrong group, you really need to do your homework. You need to get. In with maybe a franchise or who already has a business and go through thorough interviewing and vetting and see what they think of the brand. 'cause you may think you're getting this plug and play operation only to find out you're not getting as much as you thought. That would be the negative side of things.

Sean Weisbrot: What's generally the cost? What, what are the total costs, I guess, to franchise something on average in the us?

Tom Rutledge: So it, I mean, it's massively different, um, by brand, by scale. There are some groups where it costs very little, the franchise, the licensing or franchising fee can be tens of thousands of dollars. And in other cases, um. I don't quote me on the numbers, but if you're looking at like McDonald's versus Chick-fil-A, just to keep it within the food world, Chick-fil-A actually has a very low barrier to entry. It's tens of thousands of dollars. It's not a terribly large amount of money, but there's quite an evolved process and you don't own the business as much as it is a partnership. Where if you get involved with something like, um, a Jimmy John's, there's a relatively small licensing fee, but the build out cost is very defined and you're using a lot of their pres supplied vendors. So if you're gonna get into a food business in general, you're probably at half a million dollars to actually get the business open with the percentage of that going to, or half a million to $750,000 with in a non standalone. Location, meaning you're building it in a preexisting location with the percentage going to the franchisor of between 10 and 40% of that cost, 50% of that cost going to the franchisor as an initial fee, potentially. It varies depending on the brand, pretty significantly.

Sean Weisbrot: Yeah. And from what I've heard, you're basically buying a business. So I, I know, I don't know about McDonald's, burger King, et cetera, but from what I've heard, um, Chick-fil-A. Basically demands you to be there full time, like they want you to, to be part of it and to build this like family. And they're a fascinating one from what I understand. Well, from what I understand, most investors don't wanna buy a job. So why would Chick-fil-A do that? Why would they force that on you?

Tom Rutledge: Chick-fil-A. And again, I'm not doing this as anybody who has a background in owning a Chick-fil-A franchise. I just know people who have and have been in the business long enough, but they use it as a quality control function. You literally, you know, myself and my business partner, we own multiple hospitality brands. We own a hospitality accounting firm. They would never consider us for a franchise unless he or I were going to use it as our. Full-time job, like we would have to stop working within our other businesses, and that would have to be our full-time employment. They, if I'm not mistaken, they consider you a partner, so you don't own the, if you want to retire, they're basically taking the business back and they will put another partner. Into it, you're, you're there for the cash flow. Their brand happens to do pretty significant volume in comparison to the industries and their cash flow is quite good. The, I think there is a misconception from a lot of people, uh, pick a brand, and again, I'm gonna stick with food. It could be Subway, Jimmy John's, X, Y, and Z, McDonald's. There are people who own 500 McDonald's, right? Or a, a couple or a thousand different brands. The reality of a franchise that I think is a mess of misconception. Is that it's so well put together that you just buy it and place it someplace and hire a manager and walk away. That's never the reality of these things. Eventually, if you have tiers of management who are going to manage those tiers of management, you can do that. I know of very few franchises. You can simply buy one and have it operate. Truly have passive income because you got it off the ground. There will be at least a managerial layer between yourself and the location, and it'll be pretty hands-on on that managerial layer. I think that is a common misconception about franchises.

Sean Weisbrot: So you own some brands, some restaurants and all that. Did you ever own a franchise? And if you hadn't, why not? So we explored quite a few of

Tom Rutledge: them, and I happen to live in California. California is a difficult place to operate small businesses in comparison to other parts of the country for a variety of reasons. Uh, employment law, cost of doing business, and all of the things. When we looked at national franchises that we were interested in, we were looking to buy a territory, put it in, use that brand to. Accelerate our growth into building other locations. And what we found was that we weren't attracted to the price points of what the atos were selling for on a national level versus what they sell for in California. And you can have a model in the middle of the country someplace where you can afford to have six people do. I'm just gonna use fake numbers, six people doing a million dollars in top line sales and make money. In California, that same exact model that that franchise built, you need six people to do this Volume in this place would lose money due to our cost of labor. So I'd have to figure out the franchise or model, but with maybe four people where they say, I need six because I very simply can't afford to have six people and I can't change the price of the item enough to make up for my wage gap. So. We were looking primarily in the fast, casual, fast food model, and I didn't like what I was seeing. Not to say they're not working elsewhere, but it just wasn't our, our kind of model.

Sean Weisbrot: So then how did you come up with the ideas or did you buy existing restaurants? Did you come up with your own brands and start them from scratch?

Tom Rutledge: Yeah, so I have one location. Being that I run an accounting firm, I have interesting access to a lot of information. A lot of it's regional and all that fun stuff. Uh, during COVID I had a client who I became very good friends with. I liked his model. I thought he had a very poor location. I got access to a very good location, asked him if he wanted to partner and move. So that's, that's a partnership that we developed together. He had a brand. I liked his brand. I thought we found a better place, uh, with much higher traffic. And we have, it's been very successful. We're very excited about it, and we're gonna have a couple more of those locations in the next few years. Um, and then. Similarly, there's something in the restaurant space where people who have developed a brand realize that there's not really an exit for the sale of the restaurant per se, but maybe they have a, a good legacy. So it's cash flowing, it's doing very well. But you know, if, if you've been running your restaurant for 30 years, the the sale and the exit are usually not that lucrative if you're cash flowing well, so there's something called the Restaurant management Agreement. So my firm executes those. Um, and so we took over a legacy brand and do the management for that restaurant. Uh, and then we happened to design and build, you know, we have a couple other things going on where we're designing and building the brand ourselves.

Sean Weisbrot: Okay, so you don't have a background in accounting. What made you want to get into accounting?

Tom Rutledge: I have an education in accounting, so I went to school multiple degrees. So I have a finance degree, I have an accounting degree. Um, I. Finance as the goal accounting was literally just to understand finance better. I didn't actually ever want or plan to be an accountant when I was getting my education. I just found it. Very helpful in understanding business in general and like I said, to anyone I talk to these days, if you're good, if you wanna be a photographer or a violin player and you are going to be independent, get a degree in accounting. It, it just helps the language of business. It it. Generally speaking, it's a very useful tool. Like I said, it's like learning Spanish. So I did that on my personal journey. I went, I lived in New York. I, I stayed in New York City, I joined at a financial firm. I hated it. I moved to San Francisco. Culinary was my passion that I've, you know, realized I wanted to be in. Did all that fun stuff. I found an accounting restaurant, accounting firm in my early twenties. And joined that firm after being in the restaurant game for a little while and realized that all these guys I worked for were great at what they did, but they had no idea how to keep the businesses open for the most part. And it was because they didn't understand the business side. They were very brilliant, artistic, lovely people, but they had no idea what they were doing from a business standpoint. Um, with my background, both growing up in a family, business-minded family and with my education. That firm was really interesting to me. I actually got put in a room with my business partner, my current business partner, and stayed there for two years, was fascinated about it, realized I was a young gun who needed more experience. So I went back into hospitality. And then after a couple really cool learning experiences, great mentors, a bunch of stuff. I called my business partner and said, let's go do that thing. Let's, let's go do the accounting. And truthfully, the accounting firm isn't our primary goal. It is the. Sun to which all of our other businesses orbit it. It draws attention, it gives us expertise, but it's really a great tool for us to grow. Our other businesses is how we utilize it. That's

Sean Weisbrot: how I feel about the podcast.

Tom Rutledge: It's a brilliant thing. I love where these things go. I, I think that people being able to share their stories, people being able to share some expertise, I think the ability to communicate with other business owners, it's, it's therapeutic, it's insightful, it's so many things. I'm thankful you guys do these kinds of things.

Sean Weisbrot: Yeah. Well, I did it for three and a half years before I started to. Have it really make something meaningful for me. I mean, obviously it's been meaningful the entire time, but um, when I first started it, my goal was not only to learn from people, but also to build a list of potential people who would bring their teams onto my company software. Well, the company died. I now had no reason for the podcast. So then I had to figure out what am I gonna keep doing it for? And I just kept doing it anyways. And then after I got into this new consulting thing, now it makes sense again. And now the companies that I'm talking to, like yours are all very interesting again. And I'm able to go, oh, okay, there's an angle here. We might be able to work together. So, um, it's, it's cool to be able to not just listen to your story and learn from you. But if it's possible to also do business with you, then that makes it even more valuable.

Tom Rutledge: People need to get out of what they think or, or the old school ways of doing business. I think that's the other fun part that I think podcasts have provided and it's, you know, you could meet somebody in a bar, you could meet somebody at a restaurant, you could meet somebody on a podcast, you could hear somebody on a podcast and just wanna get to know 'em. Accessibility is so fascinating and I think the gr the access we now have to people, it's. It's good and bad. It's hard to weed out the noise to actually find solid people and legitimate options, but you gotta try. I, I applaud. I

Sean Weisbrot: can tell you, I, I learned that very fast actually. I've been doing the whole connecting thing for 10 years now and I learned very quickly, um, how to tell who I can and can't trust and, and who I wanna put energy into. I'll give you an example. I was introduced to a potential client about three weeks or so ago, and I had an intro call. He's got an alcohol brand in the uk and he was telling me all these businesses he does, and this and that, and my first thought was, this guy doesn't have his, like he, he, he doesn't have his stuff together, right? He's so busy with this, this, this, and this. How do I know that if I agree to work with him, that he's going to put his energy into it? Into this business and he and I asked him. I was like, I, I have to ask this question, right? I don't, you know, tell me whatever your answer is, what I'm, I need to know. He said, it seems like you're really busy with different things. How do I know if I agree to work with you? 'cause he wanted a profit share, so I didn't ask for the profit share. He offered the profit share. I was like, okay, fine. But if I do that, how do I know that I'm actually gonna be get some something done, right? How do I know I'm not gonna put a bunch of energy into this and you're just gonna be off doing your other businesses? He's like, no, don't worry. That's not gonna happen. I'm in this, I'm interested. The next step was, Hey, let me get you introduced to one of my partners. Two plus weeks go by. No response. So I caught immediately before he even said his first word to me, oh, after he said, I'm doing this, this, this, that, this guy was probably not gonna be someone I'd wanna work with. But I, I'd hear him out and I'd give him an opportunity. I gave him the opportunity. He didn't follow through. Sorry. Bye. And because be because after the, like two, two days ago, or three days ago, he comes back and he says, I'm ready. And I'm like, honestly, nah, I don't wanna work with you. He's like, I'm here. I wanna do it not on my timeframe.

Tom Rutledge: It's a fascinating, it's a fascinating byproduct of the hustle culture where people think being busy equates to being successful. And I think people need to. Often get a little bit more focused. You know, I, I say that as a person who owns and operates multiple companies, but I am very heavy. Heavily invested in partnerships where I, I can't do everything I there. I don't have a single business that I wholly own solely. Everything is brought into partnerships, um, for that reason. So that if I can say, Hey, let's work together, I might say, my director of operations will get in touch with you so he can take this home and then follow up in accountability. You know, accountability is 99% of what I focus on throughout all of our brands, and it doesn't. You know, as a small business owner, I can't hire as many people as I'd like to, and I'm getting there, but I'm not there. You know, it's, I'm only 12 years into my startup, so hopefully one day, but the. There's a lot of soft skills that people aren't really taught even in business school. It is kind of life lessons that if you pay attention and you do listen to other people. There was a really interesting podcast of yours that I was listening to and a gentleman was a, uh, professional coach and he had a lot of different mantras and there was a fascinating comment he made that echoes what you just said, that I'm trying to think of what episode number it was. It'll come to me.

Sean Weisbrot: Was it Mark, the guy with manufacturing background?

Tom Rutledge: Yes, it was, uh, yeah, I'll, I'll look it up. I had the note prior to the podcast, he did a lot of coaching. He was on the phone for like nine hours a day all over the world, and a lot of people were calling him up for coaching. He, I.

Sean Weisbrot: Jeremy,

Tom Rutledge: it'll come to me. Uh, I believe so. Like I said, I'll, I'll check my notes. But he had a fascinating company. He is like, you know, you can see these people that are running a hundred million dollar businesses where he gives them something to do and four hours later he gets it back and then there's a guy with $2 million business, it's gonna take him five days to get it back 'cause he's still being pulled in so many directions that it's a matter of making sure you're aligned with what your goals are and who gets what time, time's a commodity.

Sean Weisbrot: Yep. Which is why like I, I get some people that introduce clients to me, and if nothing happens in the first few days, I just leave the group and I'm like, yep, good luck. I'm out. You know, I, I need to make sure that I manage my time, as you said, 'cause I don't have any employees to throw something onto if I don't want to do it, it's all on me. So it's up to me to decide is this someone that is going to actually follow through? Is this someone that's gonna actually connect with the partner? Is this someone that's actually gonna close? If they don't hit all those boxes, I can't work with them 'cause they're just wasting my time. And a lot of people just wanna waste people's time. They feel good about wasting people's time.

Tom Rutledge: Staying busy isn't the same as being successful, but it's not always known

Sean Weisbrot: to be the case. Right? And some people ask me like, how is it that you have so much time to travel and to do this and do that? And I go, because I'm very efficient how? How I manage my time. I have spreadsheets for everything. I actually have, uh, bullet bullet points for each of my partners of the different clients and where they are and what they need, and I update them once a week or twice a week, and I pin it to our conversation. So I'm, I'm making sure that they know what's going on from my side and what I need to get things moving forward so that we can make money. Like, I keep my people accountable. My partners, you know, they're not my employees, but I keep them accountable because if anything, they're holding me back from making money or the client is holding us back from making money. So I need to make sure that I'm constantly watching everybody and making sure that things are moving forward. Um, and so I use spreadsheets for that and I use Calendly, and so I'm, I'm often on calls, but in between those calls. Just, just following up, making sure things are moving forward. So I'm able to, I, I literally, and I, I do this and some people might think I'm crazy. I don't work on the weekends. I run my own company and I don't work on the weekends. 'cause I don't care. You can wait until Monday. I wanna live my life. Boundaries

Tom Rutledge: are excessively important. Like I said, coming back to the, some people think if you work 24 7, you're going to get as much work done as possible and it's. You have to count the good hours of work. 'cause that is often not the case. I, I think a lot of people you have to get out of your own way is probably like what a mentor of mine has always said. Um, like, Hey, so you sent an email at two in the morning, it wasn't that well done. You have typos and you made mistakes that would've been better writing at, you know. When you got back to your desk, like, yes, you, you checked the checkbox, but did you do what needed to be done? That's a different question.

Sean Weisbrot: I tell people that too. I have this one partner that goes to sleep at like two in the morning. He like messages me and here I'm in the US at the moment visiting family. So for me it's like, you know, let's say 8, 9, 10 o'clock. He's messaged me at like two in the morning. I'm like, bro, message me like in the morning. Just leave me, you know? Like, I have no problem talking with you. Just like, why now? It doesn't make sense. It's not necessary. Just go to sleep.

Tom Rutledge: I, I, I hate e email. I hate email with a passion. It, it, it, it runs my life by all means. But the, the concept of, I sent you this three days ago, it's like, yes, but that was Saturday. You sent it Saturday. At 9:00 AM as far as I'm concerned, it's Monday at nine 30. You sent it 30 minutes ago. Like, and it's, it is because I too am in service. It is like, look, I understand. Your work week is there, especially in the hospitality industry. People, people work different hours than the the nine to five Monday through Friday crowd. So I, it's not uncommon for me to get a call at Saturday at 10 o'clock at night 'cause something is they, they have a question 'cause that's when they're working. Because took, when we started our company, I answered those calls. I answered all of those calls if you were willing to pay me. I took every phone call that possibly came my way. I needed my clients, like I needed air to breathe and. In retrospect, it probably took me the better part of two years to change the behaviors that I created from doing that and working with clients to be like, Hey, I'm growing. My company's growing. Be excited. I can offer you more, but my employee's gonna answer you Monday morning, so I can't answer you. Saturday at. 11 o'clock at night anymore. I just, from my sanity, I, I can't continue that any further. And, uh, you know, I to do that while not changing the quality or the, the relationship with the client was something as again, a small business owner, I was terrified to do. But it is necessary for your own mental health.

Sean Weisbrot: Yeah. So what's the most important thing you've learned in life so far?

Tom Rutledge: To me it's, it's gonna sound kind of funny. It is the value of relationships. Um, I grew up in a more tactical, get things done, check the checkbox kind of household, if you will. And it was, you know, kind of like, be strong, be independent, get stuff done. And the biggest thing for me was watching the most successful people were those who built teams and relationships the right way and working through. Understanding how to do that has been my biggest lesson. Um, I put a lot more emphasis when I was younger on what I as an individual can do, what I brought to the table, um, and learning how to change that mindset changed my life pretty massively and for the better. So that's definitely been. How to be a good partner, both personally and professionally would be the another way to put it and what to expect from those, or what to hope for, or what to work towards and how to communicate with those partners.