Are you a startup entrepreneur who wants real tips and strategies on business scaling? Then this episode is for you! Our host Matt Fore engages in an insightful conversation with CEO, board member, and entrepreneur Ryan Niddel. Together, they talk about building scalable businesses for the long term and how to navigate the challenges along the way. Tune in and learn how to focus on customer needs, strengthen your business foundation, and continuously grow as effective CEOs.

The expert guest was booked via The Expert Bookers.

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Watch the episode here

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Customer Focus, Foundation Building, And Other Proven Business Scaling Strategies With Ryan Niddel

In this episode, we have Ryan Niddel. He is a real estate investor, entrepreneur, venture capitalist, and COO for many different companies. The reason why I wanted to have Ryan on the show is that as I continue to learn and evolve, I’m always interested in best practices on how I can scale and multiply my efforts. On the show, Ryan walks through different ways that he’s used to helping scale multiple different companies in a CEO role. Read well to learn more about how you can scale any business that you have going on.

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Ryan, welcome to the show.

Thanks for having me. I appreciate it.

We like to start with the difficult questions here. What’s your favorite ice cream?

I love the place called Graeter’s in Columbus, Ohio, where I’m from. They have raspberry chocolate chip ice cream, which is my go-to. It’s raspberry ice cream with big and healthy chocolate chip chunks in it.

I make it up to Columbus, specifically in Cincinnati, a lot, and everybody nerds out about Graeter’s, and I still haven’t had it. What is it about their ice cream that makes it awesome?

I find that people from Ohio are incredibly loyal to Ohio. When something starts in Ohio, even if it’s not that great, you have to say it’s the best thing ever. The ice cream is good. I don’t know what makes it good. For me, the uniqueness is that I feel like they might manufacture their own chocolate and randomly hit it with a sledgehammer and then throw it in so that chocolate chip chunks are not unified or uniform. You get huge things. It’s a little bit of an experience.

To your point about Ohio, people loving Ohio, to some people off here, and I would say, that’s how I feel about Skyline Chili. It’s not that good but people love it.

I was born in Cincinnati and I’m like, “This is not that good at all.” Even a Chili, let alone a three-way with freaking spaghetti on it and stuff, I support that.

It’s a good way to clean you out. Tell our reader what’s the scoop. What do you do?

What I do is a combination of strategic business growth and managing a small private equity fund. In a more generalized or maybe even specific manner, I find undervalued assets. It could be real estate or businesses. I look at them and analyze what things I can bring to the table to make them more successful. From then, I get to come in as a consultant. On the side, I offer strategic value or deploy capital where I buy a large portion or even the entire thing to help it run for the season or become more profitable and successful and sell it on business.

I love that as we enter some choppy times as we are going into 2023, being efficient is very key in anything that you are doing, whether it’s your W-2 role, running a business, or how we do real estate investing. One of the things that struck me about you and some of my research is that you are a real estate investor as well. Let’s start with what your portfolio looks like, and then I want to go into some strategies you do to find those assets.

My real estate investing journey started when I bought my first house of 23. It was investment specific home but it was a single-family. The home was for me. I started working and made what I thought was good money. It’s a little $225,000 house in a good neighborhood. As luck would happen, I started dating a girl. She asked me to move in with her. I have this house I haven’t moved into it. I was remodeling and renovating it. I say, “I’m not going to sell it. I’m going to find a tenant for it.”

I found a tenant for that. That same tenant was in that house for 6 or 7 years. They went through financial hardship themselves and a nice family with a couple of children. It was a good fit. They are the best type of possible tenant you could have. No headaches. They didn’t call at all. I didn’t bother them every once in a while, stop by. I went through an interruption in my life in 2014. I had some rough spots. I had sold off a business and started another business but the business didn’t go the right way.

I was out of cash. Probably, I should have declared bankruptcy but I had to tap into every bit of resources that I had, and part of that resource was to sell this property. It had some equity left. I needed the capital to be able to exist. I sold that off and was renting a house at 30 from making good money. I exit our business for mid-eight figures, and the money was still gone. I dug myself out of that hole over the next 3 or 4 years. I ended up buying a house that I live in now, and then my portfolio has six single-family homes all throughout Columbus. The sweet spot for us has been finding these assets that are in emerging areas in Columbus.

They are $120,000 or $130,000 homes that we can put $30,000 into refi on the backside at $210,000, put a tenant in there for the mortgage payment plus 30%. It is a simple model. One of the fun things is that I can’t help but keep my mind on private equity. When I’m binding these houses, I don’t know if this is a unique strategy but it felt unique to me at the moment, and having an LLC own them all. I treated the LLC like a real business itself, not just a real estate holding company. The LLC has a P&L like anything else, Profit and Loss.

What I’ve done is started to shop the business on the open market, not shop the real estate because people will buy businesses at multiple of revenue, which is an add-on in addition to what the assets inside the LLC are worth. All of the sudden, there are 5 or 6 houses but either way, it’s this little tranche of houses that a $1.2 million or $1.3 million in value but then the free cashflow from the business throws another $250,000 on top of that for an exit.

I’m shopping that around. I have a couple of suitors I’m entertaining. For me, the real estate market is not my strength by any means. I need to acknowledge that. In the real estate market, I would rather have some cash on the sidelines to be able to buy by different asset classes to me get into multifamily, even at some commercial properties around Columbus, because it’s home for me. I can still get a good premium on the houses I have now.

Are you trying to sell it as a portfolio?

Yes. I sell it as a thriving business. I’m selling a business. I’m not selling real estate. The business that I’m selling happens to have real estate in it. You are buying the cashflow of my business and the operational efficiency of the business. That’s all you are buying.

How we typically look at commercial assets anyways is, “What’s your NOI or Net Operating Income at the end of the day?” We are going to play a multiple on that and sell it, which is not very dissimilar from private equity. We were talking beforehand about some of the strategies you have to go out there and find these properties. Can you talk us through how you are finding these properties?

This is the secret sauce. I’m going to encourage you to get a pen and paper out. This is something that I haven’t seen many other people do. I’m sure there are. I’m not an innovator by any means. It made logical sense to me, where my specialty is making businesses run more profitably and efficiently and helping them scale. I got to thinking, “What if we find someone that has access to homeowners consistently?” The first entry point was a roofing company that specializes in single-family roof installation and negotiates with insurance companies but also does cash payments and renting out this team of ten sales guys that float around Columbus, finding roofs to start with.

They know loosely our buy box inside the real estate that is completely included into it but they are included into it enough, then they are incentivized not only to put a roof on which we compensate them but we will spiff them on any house that we end up buying into the portfolio. I was thinking, “The roofing company is nice. There’s good profit to it but now we have the trust of a homeowner. What else can I offer them?” We went out and bought a landscaping service, lawn mowing, and landscaping because we had the customer base. I might as well monetize them and enhance lifetime customer value.

If you have a customer base, be sure to monetize them well to enhance lifetime customer value.CLICK TO TWEET

Now I have a landscaping crew that’s going out doing the same thing. That’s like, “Homeowners trust us. We are mowing their yard. We are putting out a roof.” There’s a renovation and rehab company or a construction company that supports not only the homeowner but also helps us find real estate. We’ve done quite a few wholesale deals where they haven’t fit our buy box but fit other people’s quick $10,000, $15,000 or $20,000 hits here and there. Every $20,000 helps until the end of the day.

It has been fun to see the inner correlation between these three service-providing businesses, not only how they provide value to one another but then how they provide value to the real estate holding company as a whole. It’s a very synergistic relationship where one of the things I would encourage you, as you are hopefully taking a couple of notes here, is to look for asset classes that can provide value to other assets that you own. This incredible vehicle and real estate have all types of positive things you can do from a cashflow and tax-saving standpoint.

It can free up some of this capital to go out and acquire some of these other businesses using owner financing for a tranche of them because the service owners are tired. They haven’t thought of things this way. You end up increasing the value of the business you bought, in addition to increasing the value of your portfolio, all by thinking a little bit more strategically.

You are out there hustling. I love it. You mentioned three different service businesses. I want to shift the conversation now to our private equity portion of this conversation. What is your business portfolio or private equity portfolio look like? What kind of business are you looking to add to that portfolio?

The crown jewel of my portfolio is a company called MIT. It’s a kratom business. Kratom is an emerging product in Indonesia. It’s a leaf. If you take a little bit, it might give you a little different energy. If you take a lot of it, it’s more of a sedative feeling. I helped to grow that business from $5,000,00 million to South of $100 million in revenue. It’s a fun growth trajectory. That’s then led itself to the need to buy a couple of manufacturing businesses to support our demand. There’s a little bit of vertical integration.

I have two manufacturing businesses that manufacture supplements for Young Living or doTERRA and lots of big box companies that you might have heard of before. We manufacture for a lot of them, then that’s 1 cut out 1 part of the portfolio. Other carve-outs are digital marketing businesses. I have ten political websites that are content websites. It’s content marketing across the board. That content marketing then grows a pretty big list. That list then has led me into buying things that the list would also buy silver coins, manufacturers, and all types of very random things that help support the data there. That’s part of it.

I have Brake Parts, a brake sensor manufacturing company, that’s a little thing on the side that’s there. The last part of the portfolio is a beef business, a literal calf-to-cow operation, slaughterhouse organic, grass-fed, and no-hormone beef business. I can’t say there’s a specific business math that I’m looking for. What I look for is high-quality operators, people that love and are passionate about what they do.

They are willing to raise their hand and say, “I’ve got to a certain point, and I don’t know how to get it to the next point. I would like some help.” That help can be more of a consultative relationship or I’m not a predatory private equity type of guy, at least the way I view it. It’s, “Can I add value here? Yes or no? If I can add value, we explore what that value looks like. Maybe it’s some advice from time to time, rolling up my sleeves a bit in helping with operations or bringing capital to the table, buying a part of and dedicating a portion of my life for helping somebody else succeed.”

Are you in exchange for consultative services or coming on as a COO and helping with the operations or whatever that looks like? Are you taking out a portion of the equity in the business for that exchange there?

I had before. What I found to be more beneficial is proving my worth to someone first. What that means to me is, as I call a little bit of servant leadership or generous heart type of space that I operate from, “If I come into your business, you don’t have to trust that I know what I’m doing. Let me prove it to you. It’s all right with me. Let’s start it off as a very simple consultative type of relationship. Let’s put some benchmarks in place that if I help you grow to a certain level that we both agree to, then we are agreeing to the current value is the buy-in versus something in the future or visit what it would look like to get more of my time in exchange for some equity in the business.”

It’s believing, showing up, and proving what it is that we can do. What that’s led to me is that there are a couple of businesses that I’ve shown up to. We’ve seen some success. I realized after 3 or 4 months, “This isn’t going to be a good fit for all of us. It’s not that the business isn’t successful or not profitable. It’s that we have different goals for the business. I don’t want to get into a power play later.” I feel accomplished because there’s a framework that I’ve helped people with. I don’t need to saddle or wedge myself in for equity, then I got to force you to buy back later. It doesn’t feel right to me.

You mentioned your framework. That was where I was going to go next. When you go in with a small business owner, there’s a skillset needed to take from $0 to $1 million to, let’s call it, $10 million, $100 million, $500,000 to $1 billion. What do you typically see as the issues with the companies that you go in and help? Are there any common threads there?

There are certainly some common threads. Most of the time, I’m dealing with first-generation business owners, guys or girls, that have come up with brilliant ideas. Through pigheaded discipline and determination, they figured out how to get it to a point in the future. At that point, they are locked up. They don’t know what’s past that point. Their lives are typically pretty good. My specialty is not helping people whose hair is on fire. It’s not the startup. Those aren’t my strengths. That’s not what I enjoy.

I enjoy things that are working so that we can make them work more efficiently. From that point, what’s happened is that most entrepreneurs haven’t documented their process. They haven’t taken the time to record or create SOPs. They haven’t taken time to understand their financials, think about how to minimize their tax obligations, and reevaluate the customer journey from the first time to, “How do you increase lifetime customer value?” because they have been strapped into this rocket ship growing from wherever they were to where they are at now.

What I like to do is, in those first conversations, have a deep dive into the financials. I go through their customer process and see what that looks like. I bring those results and say, “Whether we work together or not, I can see now I didn’t get an email follow-up in this amount of time. I didn’t get one at all. Your sales rep called once, and it hasn’t called back for ten days.” There is some low-hanging fruit. As unsexy as it sounds, the majority of issues that I see comes from a lack of consistency and process documentation because it’s not fun, especially if you are a marketer, a salesman or a lady and aggressively growing the business. You don’t want to pause to document processes.

There’s an incredibly simple way to document a process. There’s this crazy little plugin for Chrome called Loom. They have a free version. You can record up to a four-minute video. When you press record on Loom, you can decide to record your whole screen, your screen, and face, just audio or video. It’s got a lot of flexibility to it. While you are doing a task, as you are about to do something, you do it more than once.

I typically start with more than once a month, then we get down to more than once a week, press that little room record button, and start talking about what it is you are doing, then you ship that over to a VA somewhere in the world. Don’t care where the VA is. The only information you give the VA is, “Type this up, document that for me, and put it in steps 1 through 35. Don’t worry about what he or she does. Just put it there.”

Have that VA send it to another VA and have them record their process of trying to pull off the SOP. They are not going to be able to. That’s the whole point of this but they are going to pass it back to you as a creator and say, “I’m stuck right here. I don’t understand what I’m supposed to do.” Typically, two iterations of that get you a documented enough SOP that someone else could come in and perform the tasks that you are doing on autopilot that you don’t even consider.

It’s a combination matter of not only the process documentation but then helping the entrepreneur kind of recalibrate their emotional state because this is their baby. They have been doing this thing for a long. How do I trust that somebody else is going to do it as well as I am? The answer is that they are not supposed to. Most tasks inside the business can run at 80% of the efficiency of the founder and be as successful. Let’s say something very mundane like paying bills.

We got to pay bills. Accounts payable are part of every business across the board. You might have a very specific way to do it but you can document how you pay bills. If they are only 80% as good as you but they follow the process and keep your books at least in the same alignment you’ve got them in now, it’s fine. It’s okay to give up at 20% because that, to me, starts to allow you to reallocate that lifeforce energy into things that are going to make a shift in your business versus the stuff that you are doing because you’ve had to.

I love that you mentioned Loom. I’m starting to use that more. Where I am on my journey as I’m starting to raise more capital for real estate. It is the same process. We launch a deal. We have PPM and OMs that we need to send out. We’ve got to capture somebody raising their hand saying they want to invest. We have to send them wiring instructions. We have to receive the wire. We have to confirm the receipt and reach back out to them. One of the things my partner and I have been talking about a lot is that we need to do documentation of this and stop trying to do all of this ourselves.

One of the things that I don’t want to pass over is that we’ve shot the videos. We’ve never even thought about having a VA write them up and then sending them to a separate VA to see where they fail in the process because it all makes sense to us. It should make sense to someone else but until you have someone tried to go through what you have been through, that’s when you will figure out where the hiccups are in your process. that’s Brilliant.

What I typically do, and especially with what you guys went through, once you document the process, there are brilliant individuals that can come in for pennies on the dollar and figure out how to automate 95% of it. For most things that we do, I have a process automation specialist, whether it’s using snaps or some sort of fancy software that I’m familiar with. All of a sudden, things have if, and then sequences, much like you are saying, “If we get a wire, then do this.” There’s tech that now supports all that for all of us. You build the sequence out the first time, and it’s almost set, and you forget it.

You sold me. I’m going to connect with your process specialist.

I will connect you offline because I don’t want the tens or hundreds of thousands of readers to also bombard her but I will introduce you to her. She is truly incredible.

I know that you also have a podcast that’s about to launch called Rethinking Business. It’s about how we rethink every part of the business journey. Can you tell us a little bit about who’s the podcast for? What do you plan to accomplish with it? Let’s go from there.

Rethinking Business is the practical and tactical lesson that I’ve learned from exiting a handful of businesses, raising $150 million for my private equity fund, and growing some businesses. These lessons ended up being the conversation that every new level of the business requires you to pause, stop, and rethink. That’s everything from originally where you have your marketing message match. Most businesses start is, “I have a product. Will somebody care about it? How does that look? Where does it fit?”

The hurdle for me is $50 million to $100 million, where I have a C corp, stock issuance, more advanced tax strategies using trusts, and preparing for an IPO. What is SOX compliance look like? How do you find a SOX compliance specialist? There are a series of things that are selfishly I wanted to document my process on what’s going on and be able to share openly like, “I did this thing. It’s a bonehead play. You probably don’t want to run this one. Let me share with you the 2 or 3 other things that I’ve done.

The ideal listener for it is someone that probably has already started a business. They are an early-stage entrepreneur. We are going to find a lot of value in that $5 million-a-year business or higher. It’s going to start to click when you start saying, “How do I go to market and find health insurance for 50 people? How do I keep my rates low enough? As I do that, how should I plan for that with cashflow but also tax offsets? How does that look?”

These conversations that no one shared with me. These are things that I didn’t have someone to turn to say, “What’s this going to look like?” I’ve got a lot of those situations. I’m going to share the story that supports and has a framework, “What lesson to learn and apply? What am I going to talk about now? Why should you care? How did I learn the lesson?” It’s not conjecture. I see the books in your background. I’m a huge reader. I love reading.

It’s because I read something that doesn’t mean I’m qualified to teach it. I believe you got to try it a couple of times and be able to share what you learned from an area of expertise because you attempted it, and how can you apply it as you are listening? The episodes are 15 and no more than 20 minutes. They are bite-sized. I want you to be able to consume them on the way to the office or the gym or wherever you are at, probably press 2 times the speed and be done within 10 minutes, grab the value, and then call it now.

Just because you read something doesn’t mean you’re qualified to teach it. You have to try it a couple of times before sharing what you learn from an area of expertise.CLICK TO TWEET

As someone that has a podcast themselves, are you planning on launching these in seasons and starting it from the beginning and working up? How do you launch a business to the end? How do you issue stock or do you plan on, “Whatever is going on with your life, I’m going to interject this little nugget for anybody out there, that stage in their journey?”

It’s going to be the latter. I’m going to launch in seasons. I have another podcast that’s 15 Minutes To Freedom. I launched that in 2018. I ended up hitting iTunes’ 17th most downloaded new podcast for 2018. It’s got 6 or 7 million downloads lifetime now. It was every day, seven days a week. I was at 500 episodes of burnout. That’s a lot of my time. What speaks to me now is that I recorded the first season, which is not sequential.

It’s things that have come up, and I wanted to share them. I’m dropping these little twelve-episode seasons. I don’t feel trapped by the content creation of my life. I’m like you, Matt. I’m running and gunning. I’m still operating multiple businesses. I still have other things that I have to focus on. I found great obligations for myself. It doesn’t end up all that well for me. I want to make it, so I can do things that I enjoy and have great conversations like I’m having with you when I feel like it and put out seasons, whatever makes sense to me, because I have enough content to justify another season.

I’m always interested in how other people are on their podcasts because I’m seeing the season. It doesn’t necessarily need to be a journey but seasons helped people digest it, go back, take it home, apply it, and now get ready for the next season. That’s awesome. I want to be cognizant of your time and shift this down to the last round. We are calling this The Five Top Things. Our first one is, what is your favorite book or what is a book you’ve read recently that’s given you a paradigm shift?

The Hard Thing About Hard Things by Ben Horowitz Ben Horowitz has been a fascinating shift that came to me at the right time. It’s almost like your bookshelf. I bought it when it first came out. It was the right message at the right time for where I’m at inside MIT45. It’s an impactful book and highly recommended. The audio version I’ve listened to is while I’m at the gym. I like to double-dip, read and listen, both are great. I highly recommend the book.

Meditation is this unique thing that gets a bad rap. For me, meditation is where we hang up. I’m going to sit here for 2 or 3 minutes in silence and in gratitude for spending time with you. That, to me, is a meditation and being presently aware of the moment and the gifts that are in front of us.

Those things, for me, have completely changed the leverage that I can put on myself because I feel his term is, “Do the Core 4 before you hit the door, so you are ready to go to war. If you leave your house, the world is coming at you.” I don’t ascribe to that quite much but I feel that. When I do that before I leave the house, I feel more productive, powerful, certain, and calm. I do those things before 8:00 AM or before I walk out the door, almost without fail.

To your point about meditating, that’s a habit I adapted in 2020 and have continued to adapt over the past several years. It’s hard to sit there and control your mind, especially with somebody like you that’s doing many different things. If you can master your mind, you will get much more clarity. I feel like energy because of it as well. Our third one is, what’s the best piece of advice you’ve ever received?

You are capable of way more than you give yourself credit for. I work with a gentleman named William Lam, who owns a company called UPGRD. It’s mental reprogramming. It gets into the fact of what goes on in your mind or the theater of what’s playing in your mind is a preview of coming attractions in reality.

You’re capable of way more than what you give yourself credit for.CLICK TO TWEET

I’m here in Scottsdale in Phoenix, and I’m at the gym morning. It’s part of how I live. I walk outside and see a black Rolls-Royce Cullinan in the SUV. How great is that? How awesome is that? I look over the other side, and there’s a white Rolls-Royce Ghost. I’m like, “This is crazy.” I’m driving back to the hotel and see a two-door Rolls Royce. I’m like, “I want to have all three at the same time. How great would that be to walk outside and get to choose which 1 to 3?” An old program in me would have said, “You don’t deserve that. That’s gluttonous. You don’t need that.” None of that matters. I’m capable of it. I know that if I want that enough and I can see it in my mind, I can lead the path to hold off.

Our fourth one is, what’s the thing that you are most proud of in your life?

I don’t give myself credit for much that I do. You put me on the spot. What I’m most proud of is that I was flat-broke at 30. Rental properties ended up in foreclosure that I had and got them out. I was able to sell them and get the money out of them. That was many years ago from me. There’s a lot that has happened in many years. Being able to grow businesses at the level that I am. From that place at MIT45, I called all the employees together. I showed them all stock.

They are now all owners in this company that our valuation is pushing toward $1 billion, and seeing I’m going to change their lives forever. I can incredibly proud to go from driving this old Cadillac Sedan de Ville selling suits because I needed a way to make money to being in front of 100 co-workers and being able to offer them stock in a short period. I’m pretty proud of that.

The common theme of that answer is always, “I faced a challenge and overcame it.” Based on the little time we spent here, it sounds like you have been able to overcome it in a big way, which is super humbling and inspiring. The last one is if you could sit down and eat a bowl of ice cream with anyone, dead or alive, who would it be and why?

I go back and forth between Charlie Munger and Stephen Schwarzman. The reason for that is I’m fascinated with the way that they think. It’s not much of what they share. In our society, there’s a lot of people telling us what to do. Not a lot of people share how they think. Those two individuals are sharp in sharing how to think and not what to think.

For those of you that don’t know, Charlie Munger is Warren Buffett’s number two. Even Warren would say he’s the brains behind the operations and helped expand Warren into seeing not only the small little companies that he could squeeze a penny out of but the bigger picture of things. Great choices. It’s a fantastic conversation. If our readers wanted to reach out to you and learn more about you or some of the things you’ve got going on, where’s the best place we could point them?

Go to RyanNiddel.com or on every social media platform possible. It’s all @RyanNiddel. Any of those places don’t have something to sell or hog. I just want to connect and add value to your life where I’m able to.

Ryan, thanks for being on the show.

Thanks for having me.

Important Links

• Ryan Niddel
• MIT
• Loom
• 15 Minutes To Freedom
• The Hard Thing About Hard Things
• Wake Up Warrior
• UPGRD
• @RyanNiddel – Instagram
• https://www.LinkedIn.com/in/exitwealthy/
• https://www.Facebook.com/ryanniddel/
• https://www.ExpertBookers.com/

About Ryan Niddel