A “Ditch Digging” Multi-Millionaire Talks About Serving Others (and Accidentally Making Lots of Money) – 222
Generally, on the AM/PM Podcast, we’re talking to e-commerce sellers. Not this time. In this episode we’re speaking with a guy who left high school to go into the paving business. Now, he’s at the helm of one of the largest paving companies in the United States.
Today on the AM/PM Podcast, Tim Jordan speaks with Gary Rabine about how he started a “below average” paving company and turned it into a company that has set the standard for technological innovation.
Gary says that one of the keys to his success was innovating in a business that, “doesn’t innovate.” His ability to find ways to differentiate his final product led to a rapidly growing business. He likes to refer to himself as a “hillbilly” and a “ditch digger.” Still, listen for a few minutes and I think you’ll hear a very sophisticated message about why everyone, entrepreneurs included, should focus on service and mentorship.
Then, the way Gary tells it, the millions that follow are almost beside the point.
In episode 222 of the AM/PM Podcast, Tim and Gary discuss:
- 03:20 – Knocking on Doors and Paving Driveways
- 04:55 – Innovating in an Industry that Doesn’t Innovate
- 08:50 – The Big Three – Serve, Differentiate, and Mentor
- 09:45 – Who’s the Best in the World?
- 13:50 – How Did Gary Pace His Growth?
- 14:20 – A Union Battle Helps Push Gary Towards Entrepreneurship
- 19:25 – Fail Fast and Learn
- 21:45 – Honoring His Wife’s Memory Through Mentorship
- 26:20 – Accidental Billionaires Serving Others (and Making Money)
- 29:15 – How to Replace Yourself
- 33:50 – What’s the Best Advice that Gary Has Received?
- 35:50 – Using Technology to Differentiate
- 39:40 – Gary’s Business Advice for 2021
- 40:35 – How to Contact Gary
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Tim Jordan: Generally on the AM/PM Podcasts, we talk to people that are digital marketers or e-commerce sellers. Today’s guest is not. He actually graduated high school, started a construction business, and now owns one of the largest paving companies in the US. In addition to dozens of other business, really, really cool story. He’s got some pretty strong convictions about the way he feels about things and some of his passions in life and how he connects the “failures” in life to his now his successes in life. Really, really cool stuff. It’s going to be a great episode. Stay tuned, listen to it. And again, we’ll see you in just a second.
Tim Jordan: Hi. I’m Tim Jordan and in every corner of the world, entrepreneurship is growing. So join me as I explore the stories of successes and failures. Listen in as I chat with the risk takers, the adventurous and the entrepreneurial veterans, we all have a dream of living a life, fulfilling our passions, and we want a business that doesn’t make us punch a time clock, but instead runs around the clock in the AM and the PM. So get motivated, get inspired. You’re listening to the AM/PM Podcast.
Tim Jordan: Hey, everybody. Welcome to another episode of the AM/PM Podcast. We’ve got another excellent guest here today that has a little bit of business experience, and he’s going to share that with us. So today we have Gary Rabine, which is pronounced a little different than it looks. I had to practice that for a second. So Gary Rabine, who is actually a master in paving in construction essentially, and he’s got a few other things under his belt, but it’s a little interesting to have somebody that comes from a different industry than what we are typically focused on the listeners here with the digital marketing and e-commerce and things like that. And as we go through the episode, you’ll understand why I think this content is so relevant and so appropriate. And I’m super glad to have you here, Gary. Welcome.
Gary Rabine: Okay. Thank you, Tim. It’s great. Being here. Appreciate the fact that you think I’m worthy to interview, man.
Tim Jordan: There you go. As we get through your resume a little bit, it’ll be obvious to you listeners that there’s some stuff here that we need to unpack and we need to dive into because it’s going to be pretty valuable. So let’s start off Gary, with like your professional career. The short version was you left high school and you didn’t have much of a formal education and you had to figure out something and you got into paving, right?
Gary Rabine: Yeah. I worked for somebody through high school doing landscaping and paving driveways and before graduated high school, I kind of– a lot of my friends are going to college and have great plans. I was a captain of my football team. I’ve kept in my wrestling team. And a lot of these guys are my teams were all– many of them are going to college. Most of them actually, and that was 1981. And they kind of laughed at me because I said, I think I’m going to either start a landscaping business or a paving business. And they kind of laughed at me in one of mindset. So, you’re going to be a ditch digger. To be honest, they kind of laughed at me, said it really loud amongst a bunch of kids in study hall embarrassed me for about five seconds. And then, I’ll never forget that five seconds I felt. Then from there on, in my mind, I said, that’s all right, someday, you guys might want to work for me. And either way. So, I was fortunate enough that I’d like the paving industry and I was able to start into the paving industry soon after high school.
Tim Jordan: And then? I feel like there’s so much more that you can get on.
Gary Rabine: Well, I started paving driveways and knocking on doors. The paved driveways had very, very lousy equipment, really, really antiquated, junky stuff that the only stuff I could afford to buy or use from other people. And, my quality was probably, maybe not really bad, but just bad probably, and not mediocre, we weren’t mediocre, but then, I was passionate enough and caring enough that I tried to solve problems when they happen. I tried to fix driveways that looked really bad, or customers that noticed the badness, right. And, uh, and eventually, I got to be better and better at it. And strive to be like a couple of the companies in the marketplace that were the best in the market, in the County, I was paving driveways in and I had some goals, right. I had a goal to be better than now. And it took about 10 years before I could be kind of their standard with better, better equipment, better technology and high quality. And I got there in about 10 years, got it from zero to a couple of million dollars in revenues in 10 years. The next 10 years went from $2 million to about $6 million. And so we tripled in size and in the next 10 years, so 20 years to get to 6 million revenues, which is probably similar to maybe today’s industry, the same industry, maybe be 12 or 15 million in revenues. And then we have this hockey stick type of thing. I started figuring out some things that really differentiated us. So, I talked about innovation and differentiation a lot. When I talk to young people, I mentor people in business a lot and young CEOs and startups. And I figured out how to innovate in an industry that wasn’t commonly innovative with some really cool stuff and that cool stuff got me to in front of customers. I wouldn’t have done business with otherwise. So let’s say, 15 to 20 years in really discovered some neat stuff and how to pave concrete super efficiently, as efficient as asphalt, how to really use more innovative engineering so that I could figure out how my customers could have concrete and asphalt pavements that would last longer with less costs to deliver. And, really figured out our best customer, where the big maintenance companies that own a lot of real estate people that on millions and millions of square feet of real estate that needed somebody to trust that can maintain it. So year 15, probably, probably 1996, 97, really got into paving for some big, big commercial property owners. That was really good. And we were also about the same time, figured out the new construction in our space, not the most rewarding in the world. You think of developers and contractors are kind of abusive sometimes. So even if they’re your friends, we want you to do it for the cheapest price. They want you to wait a little longer to get paid. And I found much better customer relationships with those people that own a lot of properties that needed me as kind of an expert right at their side, as they bought properties, sold properties, maintain them. And they always seem to pay me when I was done. It was kind of crazy, man, but I would do a job and they would actually want to pay me. I was like, Whoa, where do I find more customers like this? And so sure enough, that’s what I did. this is kind of the 80 20 rule. I figured that read the book about 80 20 back in the nineties and said, man, I got to start firing some customers. I got to start duplicating my top customers and my top customers where those people, those facilities owners that needed great relationships. And that would pay you when you’re done, man. So for sure, I really discovered how to dive into that space. I started to speak at their conferences. I started to– I started my own little Rabine university. So here’s a hillbilly kid that I didn’t go to school, never going to go to school. So I might as well somehow create my own university. And we did that. So we teach people about all the different types of pavements, longevity of pavements, life cycle cost of pavements. And that’s been a lot of fun. We have, like, we’ve got the most investment invested in a kind of a learning center for pavements and now roofs and many other things. Cause we’ve dived into many other businesses and the facility space, my passion, my expertise is still in concrete paving and asphalt paving. But, so we went from that, when I think about the hockey stick approach, the hockey stick thing that happens with great innovation, great, great service to customers and great mentoring and duplication of good things, people and processes. I figured it all out at all. It took a while, man, I’m a hillbilly.
Gary Rabine: So it took me a while to figure all this stuff out. But, years 15 to 20, I started figuring stuff out and sure enough, by year 30 in business, we were one of the biggest, if not the biggest in our space in the country. So we went from a local driveway company to a local, a regional parking lot company to a Midwestern parking lot company, parking lot paving company to a national paving company. And so, we paid for some of the biggest paid parking lots for some of the biggest owners of distribution centers, industrial property and commercial property today in the world. And it all happened because we figured out, I would say three things and, I do a podcast, also, Tim into my podcast. I kind of I put together what are these one percenters, these people that discover how to be the best of the best in their industry, what do they do differently? And gosh, it’s a lot of the same stuff over and over again. There’s some different things that I think people look at as their own laws of success. But the three things I hold on to that I know have been my product by far, our biggest success is this a, it’s a serve and level that people rave about, right. To serve your customers and create a customer experience that your customers just love. And remember, the other thing we think about is this differentiation, right? We have a slogan discover the difference because we want our customers to understand what makes us different when they do business we want to educate them at first, and then we want to make sure they feel it. And then we talk about it after hopefully, or they talking about it after. So differentiation is a big deal for us. We were every year trying to figure out how do we differentiate each company we have beyond the competition to be world-class. And so that innovation serve, serving and innovation are big. And then last thing is mentorship. So I’ve been one that I look out into my industry and say, who’s the best in the world. I try to seek them out and try to discover what they do different to be the best in the world. And, if we’re at first, it was, I think I mentioned in my local community, I was saying, how can I be as good as these couple residential paving companies? And I figured that out, they worked out pretty well, took me a while. Right then I said, okay, who’s the best in commercial paving in the Chicago land market. And I figured that out and I got to be friends with that person I thought was the best. And that worked out pretty well.
Gary Rabine: So, then I said, okay, who’s the best in the country? And that worked out well, I got to be friends and started to kind of a network and a forum between the best commercial paving companies that I seek out. Some of them didn’t want to participate in it, but those that did, and we learned a lot and eventually it took me a long time. And I’ll tell you today, I would say to anybody, think like I thought in your probably 20, 38, 39 years in business now, but think about like I thought in year 25, probably not. Okay, this is great, man. Who’s the best in my community. Who’s the best in the market? Who is the best in the country? Well, who the hell is the best in the world? Right? I mean, if we look at every one of our business today, whether it’s a brand new business, we start up or it’s one of those older businesses, we constantly say who’s doing it the best in the world. And if everybody could do that. And I think almost everybody has access to do that, man. It’s amazing how fast you can go from A to Z. Right? So my thing and my businesses today, everyone, every business, we start including the– when we started here six months ago when we started a year and a half ago, in one’s a doors and docs company, one is HPAC maintenance company. Those leaders, my partners, I’m very confident, want to be the best in the world. They want to kick ass. They don’t want to be average and want to be the Gary Rabine that was just pretty bad and strive to be okay. They want us, they want to hit the ground running and they want to strive to be the best in the world. Well, it takes investment, it takes hard work. But if that’s your goal and you have competitive people leading that you’ll get there.
Tim Jordan: All right. So let me unpack a few things. Cause you covered a lot and some of these things are pretty valuable, I think.
Gary Rabine: Well, Hey, I stopped after the first two sentences, then you said, that wasn’t enough.
Tim Jordan: That’s it. So, one thing that’s interesting as you go through your resume here, you’ve done a lot. You didn’t put in these words, but you currently own the largest privately owned commercial painting company in the US right? That’s a–
Gary Rabine: So I have a hard time saying that because I don’t really know for sure, but we know that there’s about 40,000 people that do what we do that maintain and paid parking lots and concrete and asphalt, mostly just asphalt, some concrete, we do both, but we’re confident we’re in the top three or four in the country. And the ones that I know of that are our size are now owned by private equities and stuff. So, we think we are either way we’re in the top.
Tim Jordan: Let’s just assume you are. Because that sounds better. Right. And then you’ve launched some other businesses, you’ve gone through your ups and downs, but ultimately I would say that it’s pretty impressive what you’ve done, but the interesting point is this example use of a hockey stick. And for those of you that don’t understand what that is. If we look at like the line of growth, it’s pretty horizontal for a very long period of time, you know, you were saying 15 or 20 years, or it’s like, you couldn’t break free, like the real big growth that happened. And then all of a sudden, whether that the tides turn, you figured something out, the stars aligned for whatever reason it takes off, which is interesting because in the world that we’re at people are so impatient and business is tough because we put so much pressure on ourselves and we equate our business to personal success, and that impatience really messes us up because we can assume too early that this is not going to work long-term. So you went 15 or 20 years, through that 15 or 20 years before things really started booming. Did you always feel like you were just around the corner from that big upswing or were you shocked when that started to happen?
Gary Rabine: So, I’ll tell you Tim. I didn’t know what success was going to look like. I felt pretty successful when I was a $6 million company making over a million bucks a year. Right. And I didn’t, I had goals. I had a lot of goals in business that I was going to grow and continue to grow and be good, be great at what I do. But, I had to keep on seeking out a vision of success and what that would look like as I hit different stages. But my goal was probably beyond what I thought when I was a $6 million company, 17 years in, I think it was. And then, I had a union battle. The union battle forced me to do a lot of things differently. And I lost everything I had over that time. This was only 2001 to 2004, somewhere in that range anyway. But bottom line is at the end of the union fight. I was worth it. My wife and I were at five or 6 million bucks. And at the end of the fight, we were the negative million bucks, whatever that time I learned a lot because I had to take myself out of the field and fight the fight with the unions every day. Strategizing, how’s going to get worked on strategizing how it’s going to keep customers. They were scaring away employees and great teammates they’re scaring away. So I had to be all over then fighting labor charges that were false labor charges. So I had a lot of challenging things to happen over that time, but it was a blessing in disguise because I had to take myself out of the day-to-day. So my right hand guy, two couple of guys, they had to actually run the jobs. And I had to find confidence in them, otherwise I couldn’t have done it. I had to sell the employees, knowing that come on board on my team, because if you like getting in fights and you like the rat blowing up on the job, I am the place to be, right. So I had to sell myself better than ever to teammates working for me to customers, wanting to work for me, to vendors doing business with me. Because they scared them away as well. So for me, that was a growth time, like never before in my life. I studied the unions, I studied politics and I learned a lot about that stuff. I was never involved in that stuff in my life at that point, by the time I’m 39 to 41 or two years old at that point. Right. And so I learned a lot and through that learning, I was able to say, okay, once we got through it, now we’re going to grow like hell. And we’re going to grow– quality growth than we did. We went from 6 million to 20 million in two years and then continued to grow it over 200 million. But again, as we did that, I understood they’re named my competitors cause I’d been then dragged through the ringer. So I grew in other parts of the country where I could understand the labor law, understand where I could do it efficiently and where I should sub out. Right. So either the lessons were incredible, but I also had to take myself out of the business and what that did was it, I had to scale and I had to duplicate to scale. And, and so then I, then I really became more of a real entrepreneur, a franchise minded duplicating minded entrepreneur. And so I might still be, maybe an eight or $10 million company doing fine, making good money. Right. Better than just a lifestyle company. Because I could sell it for a decent buck, but not where I’d never be where I am today without that union. That’ll probably, and more challenges happen over the next year. So, and every time I have a challenge, it costs me whether it be a few million bucks in some cases, 15 to 17 million, I had an eight month period. So whatever it is, what are those challenges are, I always say, okay, I got my butt kicked. My teeth are knocked out. I throw some new teeth in and get up and move again. What did I learn that could be way worth the lesson. So in every case I I’ve lost, it’s a business that I have to shut down or a battle I lose and cost me money. Always. I look at what’s the lesson I learned and how do I make sure the lesson is way worth that? How do I make sure. And the union lesson for sure, paid off many times over, the last loss that I had and these two, these two companies is paying off big now and forward. Because I, I know the lessons I learned and I’m going to make sure they don’t happen again. But, again, so I guess the scaly mentality is how do you duplicate good people and good processes? I’ve gotten way better at that than I ever would have been if I didn’t have, if I didn’t go through the battles I’ve had in my, in my businesses. Right.
Tim Jordan: Yeah. And it’s interesting, you’re talking about really good times that you’re talking about 2001, 2004 really bad times, you know, you even use the expression, you’re getting your butt kicked and only two minutes later you’re talking about that was one of the biggest blessings, I guess, that you had, because that struggle forced you to change the way you did business change, the way you operated. And that’s something that, going back to the impatience, I think entrepreneurs forget, and they don’t like cherish those struggles, if it were super easy, everybody would do it. And there are so many people that barely skate by and they don’t have a huge catastrophic problem or failure or crisis. And they think that they’re doing okay. But the people that do go through those crisis get back up, lace their roots back up and keep going. Usually find that that loss was not necessarily lost. It was just an investment into future success.
Gary Rabine: A hundred percent, a hundred percent. I mean, I believe that we’re going to continue to grow businesses and have fun doing it. We’ve got businesses that people want to buy right now that are very strong and tough times. We got a couple of businesses that are kind of flat and actually not going to make money this year because of the COVID issues we have in our state, in different markets we’re in right overall we have a net positive and in a very good way in our group of companies. But, and those ones that are suffering, were learning, right. And those ones that we’re growing exponentially in a tough time where we’re saying, wow, this is nice. So how do we get some of this and these other businesses? Right? So we’re constantly growing and no matter what, my opinion in entrepreneurship, you’d be ready to fail, be ready to fail as fast as possible. And then learn, right. Learn from every instance for me, I believe that a person that was a little more intelligent than me would probably have gotten through these times faster. Maybe not even have them, but I also believe people way more intelligent than me take no risk in their life. Right. They take very little risk because they’re smarter than me. They know that the risk is a little higher than they want it. And maybe I was too stupid. Didn’t understand the risk was higher than I thought. Right. So for me, I’m very confident that being the, the kind of the hillbilly guy that always thinks I’m one of the dumbest in the room. It has been a blessing to me because I’m listening. I’m learning, it may take me a little longer than the next guy, but once it’s locked in, I got it. And it pays off in the long run. And they’re just, some of my friends are super smart, really smart people, well educated. Probably not going to get themselves in a lot of trouble financially, but probably not going to be uber successful either in the long run. Right.
Tim Jordan: Yup. Yeah. It goes back to that whole rich dad, poor dad kind of mentality. Right. I can play by the rules and take a paycheck, or I could go a little bit rogue and maybe something big happens. So you’ve got these physical businesses, right? Your businesses are based on the construction and service and things like that, which is unique to the podcast world. Because most people that come in and they are guests on a podcast and they host a podcast, which you do. You’ve got, and I want you to talk about your podcast and second kind of framing the context for that. It’s just unique. And what I found interesting was I was asking you like, Hey, why do you run your podcast? You’re not using it as a digital marketing tool. You’re not using this lead magnet. You’re not trying to sell a service to these listeners, unless they need a commercial driveway or parking lot. But what was interesting is you were saying that you feel, I don’t know, not empowered, but feel like you have a responsibility to help people in different various stages of the entrepreneurial journey using lessons that you’ve learned, but also that you can consolidate from like your podcast guests. Is that an accurate state?
Gary Rabine: Yeah, well, a hundred percent. So my excitement in life is, I lost my wife recently a couple of weeks ago and watching her go through the challenges she went through with cancer, it’s amazing. She’s the strongest person I’d ever want to know. And to be your partner in life was amazing. But bottom line is what do we realize when your wife passes at a young age and goes through this four and a half years of the fight, this battle is life is short. I kind of knew this before, but boy, it really got highlighted. Life is short and she made amazing mark on the world. I mean, she was the most giving person in the world. We had couple of foundations that –she ran our main foundation that gives back a ton to communities. And all she cared about was how could she help whoever she was around. So for me, I’ve been the guy making, building businesses, supporting our financial side of our family while she’s been the one that’s been amazing giver also. So again, when you’re in the situation, 50, whatever, two to seven years old, and I read back, you really look back at your life and say, gosh, what am I done? I’ve made money. I’ve created some business, great opportunities. That’s been a lot of fun. And entrepreneurship has been a huge part of that. I’ve been blessed to be born in this great country and blessed it. So love a great God and all these things, right. But what am I going to do in the rest of my life to make sure that I’m looked upon as possibly, she was looked upon. And I believe that that giving back in the way of mentorship is a big deal. I think about my mentors in my life, Tim and man, they, I smile. I think of my mentors because without them, boy, I probably be nothing like I am today when it comes to business savvy and things like that. My vision has gotten very clear in my life as far as where I could take businesses because I’ve been around great visionaries in business.
Gary Rabine: My ability to find people to execute on businesses is because I’ve got great mentors. I understand execution, and better than I did. Right. And so then I look at, so how can I affect change, not going to make the world a better place. And I believe that sharing experiences, good and bad, I’m not telling people how to do things, right. That’s not mentorship, but sharing experiences that I’ve had good and bad that I can share with young people in businesses. It is awesome because I know that I’m inspired many people in my own businesses to be entrepreneurs as we grow more. But I’ve also had more experience outside my business when just people in my industry or people outside industry to call and say, Hey, Gary, would you help me out? Could you mentor me? Right. They hear me talking about mentorship all the time. So I get a lot of it and I’ve had a lot of fun. So I started a mentorship organization called true mentors where I put together friends of mine that are successful CEOs and entrepreneurs with young startup minded people that, or people in business that want to be leaders in business and spend a lot of fun. True mentors is definitely inspired. A lot of entrepreneurs and leaders. So, now personally, I said, okay, well, what can I do to it to continue on this? Right. And the chip on my shoulders this, people that don’t know me, look at me as a, when I speak at different things or whatever, I’m confident that some people look at me as there’s the rich white guy, right? Hey, he’s a white guy and he’s a privileged white guy. Right. And he’s probably got his money handed to him, whatever.
Gary Rabine: Well, I’m confident that the people that I know and their CEOs, I know thousands of CEOs and I’m friends with hundreds, right? Because I’m blessed to be amongst a bunch of leadership organizations regionally and across the country, YPO and many others. And so I’m blessed that I get engaged. I meet all these great people. And most of these people that have built something, built something because they’re awesome people because they love to serve an industry. They love to serve it better than anybody else like I was talking about before they usually have a higher purpose than making money. It’s not about making money. It’s about creating opportunity. It’s about serving their market in a way that nobody else has differentiating in a way nobody else has. So I said, I’m going to do, I want to do podcasts. I’m so blessed to have all these different people. I know I’m gonna do a podcast. I’m going to reach out to the people that I respect the most, a hundred percent of our givers. A hundred percent of them are world-class at serving their markets. And almost all my life of my 48 or 50 podcasts right now, almost every one of our top 1% in their industry. And most of them have built it from nothing. So when you can look at those individuals, you saying, wow, that guy, that gal there, they’re not so selfish, they build that visit because they really gave a crap. They cared about people, man. They believed in God’s message of serving others more than yourself. And so, again, it’s so much fun to interview people that I’m confident or that they’re all that. And many more billionaires, there’s a lot of more tens of millions, hundreds of millions, and probably got seven or eight billionaires on my podcast. But you’d never know it. If you met any of them, you wouldn’t know the difference from the billionaires to that person. That’s worth a few million bucks. So that’s what’s fun about it. I’m confident that we’re inspiring people to think differently.
Tim Jordan: So, for the rest of the time that we have in this episode, let’s kind of consolidate some of the lessons that you like to share that you’re passionate about sharing to entrepreneurs, but also kind of leaning on the experience and the advice from your, your 50 or so other guests, right? Like I want to really drop some, some knowledge here. And the first thing I’d like for you to hit on is something we talked about for set or ordering, is this concept of like business being validifies right. Like, I don’t know if that’s the correct word to use, but business is bad and I’m seeing this so much lately between my peers and just culture and I’ve run into it personally. Before I got into hardcore business, I was a civil servant. I was a firefighter and I’ll never forget, uh, when I decided having to start these side hustles and the side jobs, they started blowing up. Then eventually I decided to leave the fire department for 10 years. Like my father-in-law man, he blasted me and why would you do this? You’re just money hungry. You’re just selfish. You’re all about just, it was awful. So I’ve seen it. I know it’s in the culture, but I’d like for you to address your thoughts on the villain-ification of business in our society.
Gary Rabine: Yeah. So our country is great because we’re a country that believes in entrepreneurship innovation and solving problems. There’s a reason why America has 25% of the world’s GDP, right? Gross national product. Cash cashflow, right. 25% we’re 5%. And I don’t even think this under 5% of the world’s population and we have 25%. So, think about that five times more cash coming in than what it would take to serve ourselves. Okay. The only reason that’s the case is because we’ve been great at building business building and innovation ideas and solutions to serve the world. Right.
Tim Jordan: Yea. So let’s talk a little bit about another thing that I know you’re passionate about, which is replacing yourself, right? This is something that is extremely difficult for entrepreneurs because we’re in the middle of our business. We are fighting the good fight, so to speak, we’re wrapped up in the day-to-day operations and you several times have been forced to replace yourself essentially. And when you’re able to replace yourself and start delegating things like that, those ended up being times in which you were able to, more quickly and rapidly scale your business, right?
Gary Rabine: Yes, absolutely. So, when I mentor people in business, I’m in very fragmented markets that I like to be in. I say that I do business in markets that are often mom and pops. They’re very often, they’re anywhere from anywhere from, let’s say a half a million to a four or $5 million businesses. I love mentoring these people because I was there at one point. I understand today what I did differently to change that. I say change that, I was business in those years, that really just was, it was a paycheck for myself. If all things went to, check I would, I could be hurting as far as financially, I could be hurt. I don’t have a pension.
Gary Rabine: Right. I built, I was building a business, that’s kind of just a paycheck. Right. So a lot of friends of mine and in my industries that we serve their mom and pops that just look to pretty much, just for a paycheck and that’s not very sustainable. Anything I do today, I want, if I’m valuable somewhere, I want to be, I want to be valuable for a little while, but then I want to get the hell out of the way. And I say that because the only way I create value, like we have a business right now with unsolicited offers to buy it as a great company. I’ve got a great CEO that worked for me in my businesses. We spun this business out from the businesses and he went from zero IBIDA to four and a half million of IBIDA in five years. Right. So this business in the South economy has a lot of buyers on solicited offers, and we may take one, we may sell some of it or all of it. Okay. But the only reason that business is marketable is because that, because I don’t run the business every day. And that CEO is a young person that will stay on board to run it if they want them to. Right. And if, and guess what, if that they don’t want that CEO, the right-hand guy to that person is just as good as he is. And every market that businesses in has a leader that is accountable, very passionate and accountable in running their operations. So he’s also built a boot camp, a boot camp to train people in that industry. And it’s a very technology maintenance industry, right?
Gary Rabine: There’s a business that they put robots in the ground. They televise the condition of pipe all over the country now, and that little business as ability to grow double or triple in the next five years. So it could grow to 10, 15 million of IBIDA in the next 10, five, six years in my opinion. So the value is really big on the same, but it’s only valuable, because I’m not the guy they’re buying and my partner. Yeah. They love him. He’ll be great. He’s a great guy, but he’s got this thing built to where anybody can step in his shoes, if they’re a good person and they’re entrepreneurial, and they got some vision and some operational skills and run that business. So that business is really valuable. So why do we want to build a business that’s reliant on my value or my partner’s value. And that it’s only worth what that person’s worth then, right. So nobody’s interested in buying a business. That’s not sustainable, that doesn’t have to duplicate its talent. And if that’s what you’re building, what if you’re not building that, then you’re building a check for yourself that goes away someday with no pension and selling your used equipment at auction someday. Well, that’s not so gratifying. So why not have a hell of a lot more fun building something and scale again, and by the way, think of all the people you’re giving opportunities to when you scale a great thing over and over and over again. Right? Think about all the partnerships we love to include people and shares of our business and stock and our businesses. And it’s so much fun when you can find somebody who’s passionate about something. They go in thinking it’s a job. And that, and 15 years later, they go out knowing that it was an amazing blessing that they capitalized on, and now they’re a millionaire, right? So that’s how, a lot more fun than staying small and, and, and operating the thing with all the controls you get by the one person leader in a small business.
Tim Jordan: So we’ve talked about two things here, being able to replace yourself and scale a business and not being the bottleneck. We’ve also talked about this concept of building a real business, because so many people just build a paycheck, right. And they may not be profitable like they think they are, they’re baby, no real value in the business whatsoever. When you look back at all the advice that you’ve received from your mentors and people on your podcast and experienced you have, what would be like the one or two biggest tips that you would give people when they audit their business essentially, when they’re thinking about their business and trying to determine, Hey, is this just a hobby with a paycheck? Or is this an actual business? Like, how do we know?
Gary Rabine: Well, I think, you know by if can you step away from that business for a month with no, do nothing in that business for a month. Can you step away for a month? And it doesn’t miss a beat, right? If you can do that, get you got a business that’s in great shape. And not saying a business that, some of the businesses are 10 months, a year businesses, eight months a bit, I’m not talking about that, right. It was a business. If you can step away in the peak season and you know, that it’s going to continue to move on and, and have no problems. I mean, you have little issues that somebody else asked that has to solve instead of you. Right. But if you can do that, you know, you’ve got value. And today, okay. At one point when we looked at our businesses building profits, right? How much profit can we squeeze out of that business, whatever, however size it was. Then at one point we’d like to, okay, how we looked at a top end, top line revenues have been, grow revenues, we’re growing value, right. In the last seven, eight years, we look at exclusively one thing, and everybody should, everybody should, I would recommend, or I would in my shared experience, I would talk to any of my friends and I do today, but I tell them to think about one thing, enterprise value appreciation, enterprise value, appreciation. So every business there’s people selling and every industry, there’s brokers that represent every industry that there is. Right.
Gary Rabine: And so if you can go out and figure out, what should the enterprise value your business would be? If you are a business that you didn’t need you in it, right. That somebody could buy you and plug and play somebody else in place, whether it’s your number two person or somebody they have, right. You can then figure out what’s the enterprise guy. Again, if you’ve got it, if you’re taken out of it, it’s not worth it. The business operate, the businesses were basically zero except selling your equipment or whatever. So, nobody’s going to be excited about that, but again, if you could ever measure enterprise value and even quarterly, and you can figure out your adjustable enterprise value appreciation. And if you can do that and understand you’re growing constantly, that’s what you got to watch. Some businesses grow in the enterprise value, and don’t even have to profit. Now. One, I’m a technology company that’s kind of like that. Right. And then most of my businesses have to grow IBIDA to have value.
Gary Rabine: But all of our businesses, no matter if they’re old school, paving, roofing, doors, and docks, whatever it is, all of our businesses that have great technology to enhance the productivity are worth more than those that don’t have. The technology companies, even that the pipe televising company is kind of half tech, half labor, half plumbing. And that business has great value because the technology is pretty extensive there. And we’re, and my partners mastered the data that that technology produces. I’ve got one company, Tim, that my son started. My son is 33 and is a CEO of one of our companies, actually, all of our companies. Now he was a CEO of one company. They’ll be spun out of our group of companies. Just like the five televising guy did this company probably will have the most value of any of our companies ever. And it’s a company that will, we think it will be a sass product eventually. So my son said, dad, we could do this engineering for our customers. We had civil engineers traveling across the country, looking at pavements and roofs and all that. And my son came in to run that company. So you measured all the costs we had and said, we could save all this costs and be way more valuable our customers. If we use drones to do all this, to capture all this data. Now we have experts flying across the country, gathering this data with video cameras and we’re delivering PDS to our customer. We can change that. And so sure enough, within five, six months, him and I budgeted the right money to test it. And within six months at the latest we had our biggest customers in the country, trying this product out piloting along with our regular engineering and consulting. And they loved it. That company spun out after about a year of him growing it with our national company and that company now it’s called site. Site is kicking butt, growing leaps and bounds. And the valuation there will be a multiple revenues and the multiple revenues will be 10 or 15 times revenues. And this business, we’re just touching the tip of the iceberg right now. And it’s going to grow up pretty fast in the future. We just hired a good CEO that’s going to run that. But again, the difference is two things. That business number one is great value to a sale someday. If we want to sell it, the enterprise value already is pretty extensive, but it’s also valuable to us because it serves our customers in the facility space like nobody else in the world does. So we use drones, artificial intelligence, and satellite imagery to capture every bit of a million square foot distribution center that the exterior of the building. So pavements, roofs, HPAC, everything outside landscaping. And this businesses is just a lot of fun because it introduces our group of companies talk to the biggest real estate owners in the world, not because we’re great at paving, right? Because we’ve got this other product that can help them manage their dollars better and think differently than they have in the past.
Tim Jordan: So, as we wrap up, and this is going to be a long episode, there’s just so much here to unpack. I don’t want to cut too short, but closing thoughts, what I’d like for you to do is think about some encouragement, right? You’ve been through some ups and downs in business. You’ve had some really good times, really bad times. And obviously 2020 has been rough. In the e-commerce space specifically, we’ve done pretty well, but those of us that are listening, we have a lot of stuff going on. We have family members that may not be in e-commerce. We have friends that are struggling, as a whole things are dicey this year. What encouragement would you give to people going into 2021 that may have had a rough year in business and maybe learned some hard lessons that they didn’t want to have to learn right now, and so on and so forth.
Gary Rabine: Yeah. So, I mean, my experience if I’m saying, what do I think about that’s experienced share that makes it makes the most sense for anybody? I think it’s, it when it’s day to day, day to day, I look at any meeting you go into and zoom meetings we have so often now, but any meeting you’re in, going to that meeting with a mind of a ten-year-old, right, the way you thought as a 10 or 11 year old, when you’re inquisitive and you’re learning something totally different. And you really were passionate about learning it, going to the meeting as a ten-year-old, even if you might be the smartest person in the room, never think that right. And it’s easy for me because I’m never the smartest person in any room I walk into. But even if you think you are, even if you’re, well-educated, I think entrepreneurship is about constantly educating yourself passionately about whatever industry you’re serving. And I think that’s super important.
Tim Jordan: Absolutely. So, if someone wanted to start following your podcast, listen to these other business leaders that you bring in, tell us again, the name of that podcast, so people can find it.
Gary Rabine: So the podcast is Ditch Digger CEO, and I’ve got some amazing characters on this show. I got the founder of Netflix, the founder of red box, the founder of Brightstar fastest growing woman, franchise store in the world. Good friend of mine, Shelly Sun. Got Jimmy John’s. So Jimmy John sandwiches and billionaire sandwich guy. Right. So, it’s so much fun to listen to these people, as well as the people that you don’t hear, the names you haven’t heard of before. Because they’re all passionate about serving. And in my opinion, it’s not just serving in business, it’s serving outside of their business, which is as fun.
Tim Jordan: Yeah. I’m putting it on my list, Ditch Digger CEO podcast. Well, Gary, thank you so much for being on the podcast. Thank you for voicing your opinion and giving us some of this wisdom that you’ve accrued over the years through some pretty difficult lessons. It’s really important. Thank you for the responsibility you take for the industry, for the community and when I say the industry, I mean the community of entrepreneurs, right? There’s not a lot of people that have a calling to give back. And the truth is a lot of us make the same boneheaded mistakes that someone before us may, and sharing the good experience with the bad experience will definitely help all of us grow as an entrepreneurial community together. So I appreciate you taking the time and investing the resources to help do that. That’s really something I appreciate.
Gary Rabine: Thank you, Tim, and I appreciate what you do as well. You’ve got a cool podcast and you’re doing the same stuff, but you’re educating the industry that you love and how fun is that right? You were blessed to be able to do it. So, thanks. Thanks a lot.
Tim Jordan: Thank you all for listening. All of you there’s subscribing. If you’re watching YouTube, make sure to just thumbs up, subscribe to the channel. If you’re listening on your favorite podcast platform, please leave us a positive review that lets the podcast platforms know that you think we’re doing something right. And it gives us a little boost. So if you found any value in this, please drop us a good review. And we’ll see you guys on the next episode.