Today's Guest

Sean Castrina is a serial entrepreneur who has started more than 20 companies over the last 20 years. He still seeks to launch a new venture annually. He is also the founder of The Weekend MBA, a two-day LIVE event where veteran entrepreneurs share strategies and tactics to help business owners build an action plan to achieve breakthroughs in their business. Sean is also the author of 4 bestselling business books and hosts a popular business podcast, “The 10 Minute Entrepreneur”. In this episode of Winning on Main Street, Sean shares his journey into entrepreneurship and why $250,000 is a magic number when it comes to scaling a business.

Episode Transcript

(Please excuse grammatical errors due to transcription)

Gordon Henry:             Hey, hey, this is Gordon Henry at Winning on Main Street. This week we are fortunate to spend time with an expert in the field of entrepreneurship, Sean Castrina. Welcome, Sean.

Sean Castrina:              Great to be on the podcast.

Gordon Henry:             Brief intro on Sean, Sean Castrina is an author, speaker, and serial entrepreneur. Sean has started more than 20 companies in vastly different industries over the last 20 years. And he still seeks to launch a new venture annually.

                                   He's the founder of the Weekend MBA, a live event where world class entrepreneurs distill decades of real business experience into two days. He's the author of four bestselling business books, including 8 Unbreakable Rules For Business Start-Up Success, Greatest Entrepreneur in the World, Developing the Entrepreneur Within, and World's Greatest Business Plan. He also hosts the popular business podcast, the 10 Minute Entrepreneur podcast. So, wow, you're a busy guy, Sean.

Sean Castrina:              I was going to say, when I hear that, I'm like, "Wow, when did I get all that done?"

Gordon Henry:             Unbelievable. Maybe we'll start kind of at the beginning of your journey, how did you get started as an entrepreneur? What made you take that step to starting companies?

Sean Castrina:              Getting fired will do that. If you ever get called into a boardroom of any kind and you hear these words, "We're going in a different direction," it's not good. You only want to hear, "We're going in a different direction," is if you're in a vehicle. If you ever hear it outside of a vehicle, it's probably not a good idea.

                                   So yeah, I was in my early 20s, grad school. I just figured I'd work my way up to be a CEO of a company and get paid really well. That's kind of how my brain works, seek, destroy, and just accomplish. But when they bring in new leadership, they bring in new teams. And typically people that are aggressive, talented, or whatever are very much a threat. That's the last people they want hanging on the vine.

                                   When that happened, I realized that there really is no such thing as job security. There was a time when at least there was an assemblance of it, but now there's zero assemblance on it from both parties. In fairness, your employer can let you go at any time. On the other side of that, employees are looking all the time. I mean, both parties are cheating on each other.

                                   So it's different. But back then, I really thought I'd probably be there forever. That didn't work out, so I had to take a regular job temporarily. That's just quick advice.

                                   You don't start a business when you're unemployed. I've started a lot of companies. I've never seen it where it really works well with an unemployed person, because you're typically desperate. Your self worth is not at an all time high, and you do need confidence because you got to hire people and all that other.

                                   Best thing to do is just play defense for just a short period of time. Just get a job. There are 168 hours in a week. If you manage your time, well you can do two things at once. It's shocking. That's what I did. I took a job selling life insurance. I was pretty decent at that. It's really a tremendous amount of money looking back. Other than selling something that's probably illegal, selling life insurance is probably one of the better paying jobs.

                                   I was doing really well, and I was sitting in a sales meeting on Monday. I never forget this. It was first time I was ever around really wealthy people. If you're around a lot of really successful insurance salespeople, I mean, their incomes are just a quarter of a million and above. Back then, that'd have been like a hundred and above, but that's good money.

                                   Everybody had Lexus, Mercedes, BMW, Jags. The parking lot looked just an unbelievable show of cars. And then there was mine, of course. But I was sitting there and I was like, "Wouldn't it be cool if I could get my car cleaned while I'm sitting in this meeting? I'll be in this meeting for like an hour and a half." At the time, there wasn't a car wash, every 600 yards like there is now.

                                   So I'm just sitting there, and I don't like any type of physical labor. I've mowed my grass one time as an adult. I don't look for anything to physically do that doesn't interest me. I'm sitting there and I kind of lay out the business plan. What would I need? I'm like, okay, I'd need a truck and/or a van or something that can hold a water tank. I'd need a power washer to [inaudible 00:04:51].

                                   I just started laying out what it would take to do this and how we'd attract customers. Literally, a week later and under $4,000, I started Wax Master Mobile Detailing. Tagline, always grab a bold position, it was "America's choice in mobile detailing" from day one. Nobody else had it. By golly, I'm taking it. Toll-free 1-888-933-3824. It was toll-free, we detail.

                                   You got to do the little things right. Great name, Wax Master. Mobile detailing says exactly what we do. America's choice in mobile detailing, a bold branding position. Phone number, just like a URL, easy to get in touch with us. Don't make it complicated. It had all the pillars of what you do.

                                   I made like $30,000 doing nothing but setting it. We set up a phone line where you'd call in, it'd be like, "Okay, is it a car or a van at the time? Inside, outside or both?" It was simplest pricing in the world. She would schedule it. He'd go out and do it. He'd come on Fridays, bring me all the checks. I'd write him a check back for half. I pocketed 50% to do nothing. I've rinsed and repeated somewhat of that formula for the last 30 years.

Gordon Henry:             So Sean, can anybody be an entrepreneur? What does it take? And are there certain personality traits or skillsets? Confidence maybe.

Sean Castrina:              Yeah. I don't think everybody can be an entrepreneur, not even close. In fairness, like my daughter, I adore my daughter. She's an amazing third grade school teacher. She'd have to give away lemonade. She wouldn't sell it to you. And she wouldn't keep track of the money that she received, which is fine. And my wife's a nurse. Doesn't have that wiring at all. And then some people think they do and they don't.

                                   I think maybe 25% out there have it. I want to say this, anybody can do anything, but it's easier. I think it is easier if you're high energy, good communication skills, confidence, even if you can fake it for a little while, highly driven, task-oriented, seek, get it done.

                                   I think if you're not confident, you procrastinate, you don't communicate really well. Every six months, you're excited about another new thing. You can't stay focused on anything. Yeah, I think you're going to have an extraordinarily difficult time, and it might explain why 50% of all startups fail very quickly and why 90% fail within a decade. The statistics show that it's a pretty hard thing to do. But I do think if you have a few things in your favor, it is easier.

Gordon Henry:             Yeah. Let's go down that path. It sort of seems easy for you, and maybe that's because you have all the right characteristics. What do most entrepreneurs do wrong? What's the mistake they make? I think you call it the Bermuda Triangle of startups.

Sean Castrina:              Right now, entrepreneurs are such a cool word. Everybody thinks they're an entrepreneur because you can start a business online in an hour. Now, I define a business as one that can pay your bills. I view it a little bit differently. I think there's a lot of side hustles and nonsense. I don't even view them as businesses.

                                   The first thing is that people tend to start something that they didn't vet. Do you have a wanting audience? When I did the detailing business, I could have got out of that business for probably 75% of what I started it for a month later if I wanted to get out of it. I didn't have a great deal. When I started the handyman company, it was very basic. I literally shared an office with my existing direct mail business. I put a desk in there against the wall and a phone, and they both had to figure out how to do it.

                                   I don't go all in until I know the idea is good. I start a business like a pup tent. It is not a dream home. It's like three little sticks and enough to keep the rain out. If wind comes, it's probably going down. But we want to start a business, we take a home equity line, we got $150,000 in the bank, and we quit our job. We have no idea if it's going to work.

                                   You should know you got a winner within 90 days. I absolutely believe that in a small business. I think that's the number one point. I have a couple more, but that's the biggest problem I think people have.

Gordon Henry:             So Sean, you speak all over the place and many different topics related to entrepreneurship. I know one of the things you talk about is why should small businesses think like Fortune 500 companies? Can you answer that? Struck me as interesting.

Sean Castrina:              Because I think small businesses, what typically happens is, is a person kind of loses their job quits or whatever. They had this idea. Let's say they're between 25 and 50. Once the business replaces their income, they feel like they hit the mountain top, and they end up holding onto that business for dear life.

                                   I mean, I got a little bit of freedom. Maybe I'm making a little bit more money because as an entrepreneur, there's some tax benefits and things like that. And they don't scale. They just stop that massive growth mentality. That's why I talk about starting a business every year. I force myself.

                                   A perfect example, I just had one of my business partners ask me for what I thought resembled a raise. Now, he's making a quarter of a million dollars. And I said to him, I said, "I'm going to repeat what you asked me for. You asked for an increase in income and/or commission. That's an employee. You're an entrepreneur. You're a partner with me. You need to think of how do we generate an entire revenue stream. So, you want me to take money from our existing account and pay you more for it for what you've already been doing? No, that's not what an entrepreneur is."

                                   You got to think bigger than that. You got to think new revenue stream. We need a new revenue stream. How can we keep growing? I like this. Once you take your foot off the gas pedal, you're dead in business. You're done. It's just a matter of when.

Gordon Henry:             Yeah. Speaking of scaling and planning for the future, one of the topics we're very interested on this show is technology. And for a lot of businesses, technology enables them to scale. Wondering if you have any particular thoughts or recommendations around the use of technology in a small or entrepreneurial business to help them scale.

Sean Castrina:              I think anything that you can use to help you do something more consistently. In business, anything that can speed something up, allow fulfillment to be easier, whatever. I mean, even in small business, whether it's a QuickBooks program or whatever software it is, there's so many various softwares, whether it's an email software, I just think as a general rule, anything that can make life faster and easier.

                                   Simple stuff, Google calendars. You can go all the way up to really, really fancy stuff. But I still go in businesses where they write a receipt, like an electrical store where they're literally writing out carbon or they're doing a calendar thing where they're writing things out. I mean, you can go from A to Amazon, to the greatest level of logistics, but you always got to be looking at how can I do something faster, more efficient.

                                   The software that's available today to do things like that are just endless. I mean, in ours, scheduling and finances and payroll. I mean, we don't have to do it at a crazy level, but we have software, technology, to do nearly everything that we do.

Gordon Henry:             Right. Take out the manual steps and automate as much as you can, free you up to do the higher level stuff.

Sean Castrina:              Absolutely. I always tell my staff this. You're allowed to buy anything that allows us to do something better or faster. You already have a yes. If you see or find something that can make us do it better or faster, yes.

Gordon Henry:             Right. Tell us a little bit about exit, selling your business. You've obviously had exits. How should entrepreneurs think about the future in terms of selling a business? You're on the road to building a business, you should be thinking about the end goal of selling it. What's the thought process there?

Sean Castrina:              I just think that you build a business. It's kind of like a franchise. If you build a business from day one like it was going to be a franchise, you would do so many things correct. You would have systems in place. You'd have a really good logo, smart tagline, great color schemes. You'd have a method of consistent marketing. You'd have hiring practices in place, training manuals.

                                   Let's just use that as kind of a simple example. Well, if you did that from the beginning, you could sell your business so much better. If you had really organized records, a really clean brand, and you kept track of it, it's the same concept.

                                   If you started your business like you're going to franchise it, I would say it's the same thing as starting it like you're going to sell it because that's what a franchise is. You're basically going to sell your concept at some point. And I'm franchising one of my companies right now. I just think it forces you to do everything at the end from the beginning.

Gordon Henry:             Yeah. Yeah.

Sean Castrina:              You just start it from day one with the idea that I could sell. And then I had a call last night, my son, he's so sweet. He comes over my house, and he's like, "Dad, I have one of my friends looking to sell a business, and I can't give him advice." My son's 21. He's worked with Ed Mylett and all, I mean, really sharp. But he goes, "I don't know what to tell him."

                                   So I take the speaker phone. His friend has a software business. He's been offered money to sell it. And I go, "Well, how much were you offered?" He said, "I think it's going to be around two million." This is only a 21 year old. He goes, "Should I sell it?" And I said, "Well, how much do you pay yourself? Tell me exactly how much you're making as the owner. Don't beat around the bush. I want to know what's on your real live money." He said, "I pay myself 5,000 a month." I said, "Okay, 60 grand a year." I said, "Two million is about 36 years of payroll, of annual income. You cash out, you move all the chips out, 36 years of that." I said, "Number two is how much cash is in the business. You could write a check, bottom line, you write a check tomorrow." He said, "We got about 100,000 in cash." I said, "Well, you get to take that out. You don't pass that on to that." I said, "So you're talking about $2.1 million." I said, "Sell it tomorrow, unless..." And this is where the caveat is. "Unless you think you can personally take it to 200 million. If you don't, then maybe it's a good time sell. Second, do you think you could rinse and repeat it with something else?"

                                   He goes, "Oh, absolutely." I said, well then based on those two things, "You're 21 years old." I said, "I can let you in on a secret. If you put $1 million in an index fund and you just stare at it for the next 20 years, trust me, it's going to give you a peace of mind that you can't even imagine.

                                   "And then you take 100,000 to 250,000 and use that to start another business. You get two failures there. You got two startup failures, probably 10 times more than that for a software company, because you ain't spending a quarter of a million. But my point is, is that that's a good time to exit."

Gordon Henry:             We're going to continue our conversation with Sean Castrina in just a minute. But first a word from our friend Giuseppe Grammatico. Are you tired of working a dead-end job, missing family events, not feeling fulfilled? Giuseppe Grammatico, your franchise guide, is here to help you figure out if a franchise can help you finally achieve financial and time freedom. Giuseppe brings 20 years of experience owning businesses and working with families, business owners, and investors to explore franchise ownership.

                                   If you'd like a free copy of Giuseppe book, Franchise Freedom, you could download it at ggthefranchiseguide.com/book. Again, that's ggthefranchiseguide.com/book. Or maybe you're ready to chat to see if Giuseppe could help you on your path. If you are, go to ggthefranchiseguide.com/calendar to start things off.

                                   We're back with Sean Castrina. Sean, for many businesses these days, hiring is a huge challenge, especially nowadays with labor shortages, not to mention things like supply chain issues. What do you recommend business owners do in terms of finding and retaining good people?

Sean Castrina:              I think the first thing is regarding it, you got to look at things totally different as a business owner. Before as a business owner, you had what's called a value proposition. This is what you offered to your customers that made them want to buy from you. Very simple.

                                   You got to have a value proposition equally as strong to your employees. When you start a business, why are customers going to buy from you as opposed to your competition? Great. That's 50%. The other 50% is why is an employee going to come work for me and stay? That question is every bit as important as the one about your customers because you can't sell, you can't fulfill, you can't do anything without employees. That's the one thing that has to shift. That absolutely has to shift.

                                   The next thing is, is that you need to understand that you're probably going to just naturally pay more. I'm paying about 25% more than I was two years ago. It's just the reality of it. No getting around it. Next thing is, is that you need to talk to employees before they come to you and say that I want to raise. I've been offered it. You need to systematically, and doesn't mean that you put yourself under the gun so you're always giving raises, but a very simple thing like this.

                                   Let's say I see John on a job site or John's in the office. "John, I'd love to talk to you for a few minutes. We love having you here. Just tell me this. What are the things that you're currently doing that you really like doing because I'm getting ready to ask you what are the things that you're doing that you kind of hate doing?" It's just a little conversation. He goes, "I'm really good at this, but I don't really like that."

                                   I go, "Listen, I'm going to really work hard over the next year to try to get you more into what you want to do and less into what you don't want to do." Well, that's phase one. Right there, I got his attention. That wasn't hard to do. What do you like to do? What do you don't want to do?

                                   Next, "Hey John, just curious, man, if everything was perfect, because we'd love to have you five years from now, what do you see yourself doing? What does five years look like for you working here? What would you need to be doing? What would the ideal situation be?" He might say, "Well, I'd like to be working part-time. I'd like to work four days a week. I'd like to have a piece of ownership. I'd like to start this division." Maybe he's an entrepreneur. He goes, "I'd like to really kind of start my own business. Maybe I could start with you."

                                   I don't know the answer to he is going to come up with, but those two questions are so powerful. What do you like and don't like doing? Boom. Where do you see yourself five years now? Just by getting those answers, you're going to have a pretty good idea of what you need to provide to that person to keep them.

Gordon Henry:             Yeah, that's really good advice, proactive instead of reactive. And you're showing the employee that you are in there with them thinking about their future. Really love that.

Sean Castrina:              I do that a lot. Just so people know, when I see my employees in their mid 50s, I always start with this. "I don't believe in retirement. I want to make the easiest soft ramp for you as you can imagine, whether that's part-time, whether we adjust what you're doing so it's not as demanding, maybe stress, whatever." This is if somebody's talented. If not, then I push them down the steps and hope they leave.

                                   But no, but the point is when you act like you care and they fit, there's a universal language. People want to be wanted, and they want to be appreciated. That has nothing to do with money. If you think money's going to keep people here, I'm going to let you in a secret. Money is maybe 20% of what it takes to keep an employee.

Gordon Henry:             We just have a few minutes left. I wanted to ask you a few quick questions. We call it the lightning round. First of all, the mentor or person who you feel you've learned from the most. Maybe it's two.

Sean Castrina:              Yeah. The first person I worked for who actually, when he left as the CEO and then they cleaned house, he was incredible. He was just extraordinary older guy. Two things I loved. The first day I came to work for him, he took me out to dinner, incredible restaurant. He just made it very clear on if I did this 90 days from now, the value I would have. He just laid it out really simple. "This is what you need to do. If you want me to think you're any good." Boom. Gave me a nice finish line.

                                   Second thing, great advice. He said, "Plant ideas like seeds, not like bullets." He said, "Sean, you're so intense that you have a tendency to want to ram an idea down somebody's throat, which will turn them off." He said, "You want to kind of plan it in such a way that you make them think they actually came up with it later."

                                   The third thing is that I've brought him these issue. I love staff meetings because you can bring all the problems to it. That lasted one staff meeting. I brought a couple issues, and he pulled me aside afterwards at the end. He goes, "Don't bring me a problem that you don't have two solutions to." Love it. Don't bring me a problem that you don't have two solutions to. So yeah, I've been fortunate.

Gordon Henry:             Yeah. Right. Your secret to managing your time.

Sean Castrina:              I think the secret's a couple things. Number one is blueprint your week. You need to know what you got to get done every week, what day you're going to do it, and what moves the needle. You need to know what you should be doing that you should be doing, and what you shouldn't be doing other people need to be doing.

                                   I think the first part, if I was going to break it up really quickly, it'd be I do it on Sundays. I blueprint my week. I need to know what has to get done by this time next week. And each day, what are the most important things? I don't get distracted on nonsense.

                                   Number two is, is that you got to have a level of energy. There's just no getting around. If you got energy, you just accomplish more. Whatever, whether you exercise or you have some method of doing it, you need to typically increase your energy so you can just get more done. There's a level of productivity. I like to think I have energy and I'm just able to get more done in a certain period of time than most people are able to. I think there are some of the key things.

Gordon Henry:             Okay. Favorite hobby?

Sean Castrina:              Favorite hobby. Oh, I like playing tennis and golf.

Gordon Henry:             Okay. I guess managing your time well allows you to do that.

Sean Castrina:              I do. I got it made. Wednesdays and Fridays, I play with a college kid. On Tuesdays and Thursdays, we play nine holes of golf. The secret to golf is never play 18. 18 is for a person who doesn't have a job. Play nine holes done in an hour and 20 minutes. It's the way it's meant to be.

Gordon Henry:             Great.

Sean Castrina:              [inaudible 00:23:29] schedule anything on a Monday. Mondays are always, if you get the week started right, then the rest... That's only Tuesday through Friday. That's kind of some of my secrets.

Gordon Henry:             All right. Last is favorite celebrity or famous person.

Sean Castrina:              Oh, favorite? Oh God, let me think. Let me think who just blows me away. I mean, right now, you got to look at Elon Musk, you just got to look at it and go, "Wow." I mean, when you set a goal to inhabit Mars, in his mind, Mars should look like the way Earth does, he's 100 years ahead of everybody.

                                   Even with the Twitter thing, I think it's just a game with him. I literally think he knows he's the smartest guy in the room. You know what's the most dangerous thing with the smartest guy in the room? The richest guy in the room.

                                   You think about that. You have one of the smartest guys on the planet with the largest set of resources and a never-ending resource. I mean, the Tesla, SpaceX, these are some pretty durable business ideas. You have the smartest guy, the wealthiest guy in a durable business. That's a very dangerous combination.

Gordon Henry:             Yeah, he is amazing. Agree. Sean, this has been great. How should people learn more about getting involved with you or attending your events? What's the best way to get in touch?

Sean Castrina:              If you just go to seancastrina.com, you'll get a free book. You can get a download, the 8 Unbreakable Rules For Business Start-Up Success. It's actually a really good book. And you could follow me on Instagram. My team, we post something like every 48 hours of value, not like standing next to a car or a jet or any of that sense. It's typically something that will actually help you. I'm pretty adverse to all that other stuff. I like to give you something that might take you down the field a little bit. So yeah, follow me on Instagram. And then if you go to seancastrina.com.

Gordon Henry:             Great. Well, I really want to thank you for stopping by. Just great to have you on the show.

Sean Castrina:              I appreciate it. Thank you so much.

Gordon Henry:             I want to thank our producer, Tim Alleman, and our coordinators, Diette Barnett and Daniel Huddleston. If you enjoyed this podcast, please tell your colleagues, your friends, your family to subscribe. And please leave us a five star review. We'd really appreciate it. It helps us with the rankings. Until next week, make it a great week.

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