Meet Host, Mary Grothe
Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue™, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.
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Mary Grothe: Hey everyone, this is Mary Grothe - Founder and CEO - and you're listening to the Revenue Radio™ podcast brought to you by House of Revenue™. Each week, we'll talk about common revenue challenges and how to get past them, share real-world experiences, and get a glimpse into my life as a CEO scaling my own business. If you're a struggling entrepreneur, or just an entrepreneur looking to be inspired, this podcast is for you. I'll give you honest, unfiltered, and practical insights into growing your business and getting past your revenue plateau.
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Insufficient funds. Do you know what happens when you have insufficient funds? You go to withdraw from the bank account, and there's nothing there. It ends up costing you more money, fees, and penalties. It just keeps racking up, and nothing good can come from going below that line. You can't withdraw what you don't have.
As a CEO, it's a good gut check, not the dollars in your bank account, but to look at all the funds of your life. All the places you draw from, give, or pay for something in exchange for value, do a service or a deed, help an employee engage with the client to be present, not just at work. Be with your family as the husband, wife or significant other, mother or father or parent, a friend at home. If you are overdrawn, and you have insufficient funds, as you've heard me say, you can't give what you don't have. If you don't have what you need, then what do you do? Okay, use what you have.
Now, while you're using what you have and getting creative, you must ensure that it's in an element of chance formation and not performing. I'll break this down for you. When you have insufficient funds, you can put yourself in a position where you feel overdrawn, and it puts you in a state to feel like, "Wait, I can't give what I don't have." If you don't have what you need, you need to use what you have and start getting creative on prioritizing and shuffling around resources in time. There are ways that you can accomplish that. The third component is when we're feeling overdrawn, in that state of insufficient funds, we start focusing on performing. Pretending to be all things to all people versus taking the time to transform from the inside out to perform versus transform.
Here's where we want to break it down today insufficient funds. I remember the first couple of years scaling this company; I was working 100-hour workweeks. I wanted to be all things to all people. I wanted to carry my own list of clients, have team members, and pretend to be an active wife and mom, which I wasn't.
During that time, I felt like it was in a constant state of being overdrawn. In that state of being overdrawn, I had to fake it. I was putting on a performance in all areas of my life, trying to fool people into thinking I had it together. Maybe that's part of the reason why we were so successful. We grew so quickly out of the gate. Maybe, it was my ability. Maybe other CEOs or executives can relate to this with your own ability. You see, these people who don't have an off switch have a high figured out factor and go after it at all costs. Well, what's interesting is you can only do that for so long.
Suppose you think about the insufficient funds in your bank account. How negative can you go before the bank starts taking action not allowing you? Like at first, it's just a penalty and then it's a fee. You know, maybe you get a phone call, perhaps something gets frozen till you replenish. You do it again. You do it again. How far and how many times are they letting you do this? Before you just get shut down and restricted, and it gets taken away from you. You have a very short timeline when you're in a state of being overdrawn. Before, it's not going to end. Well, if you don't have what you need, you have to use what you have.
So relating to my own life, I didn't have everything I needed. I couldn't give what I needed to provide. I couldn't offer new team members onboarding and training. I couldn't build infrastructure inside of the company. The client got the majority of my time. In the first two and a half years of running this company, I was highly client-facing even into our third year. I did everything that it took to be successful, and I was hyper-engaged with our clients. But then, going down the chain, look at everyone that was neglected, my team members were ignored, I couldn't give what I didn't have.
Ultimately, that was time and focus energy to be able to pour into them. I couldn't slow down. I had way too many urgent items, then I felt like I was completely overdrawn. When it came to my family, then I would notice I would miss my family. So I'd shut things down for half of the day or a day and get really focused with my kid, my husband, and then I'd freak out. Because I could see how many emails I was getting. Then, feeling like, oh, this client is neglected; these team members are failed.
I was always in a reactive state, always overdrawn. These people needed things for me, and I couldn't give them what they needed because they didn't have them. Remember, if you don't have what you need, you need to use what you have. Therefore, the way I started fixing this, you can solve pretty much any problem with time and money.
Okay, I was making a really good living in 2020 was the highest-grossing year I've ever had as a human. I'm very fortunate and very thankful that it was an inspiring accomplishment in our third year in business to have the earnings at the level that I did. As we went into 2021, it became apparent that I couldn't have my cake and eat it too. I couldn't just double those earnings, double EBITDA, doubling revenue because we had to invest in middle management. I was already pulling my hair out. I already wasn't building infrastructure. I already wasn't onboarding new team members to get ramped up in their roles quickly feel like they were being brought onto it of ease and culture. It was just such a startup environment. That had to change.
We went from 12 employees; we've doubled that this year. We peaked up at 27 and scaled back a tiny bit here. We're sitting at 20, 25 team members right now. I couldn't give what I didn't have. So guess what? I used what I had. That was a certain amount of hours per week. So here's the deal. CEOs do not expect to take the EBITDA you're making when people report to you like the company. Anywhere between eight to 12 people are rolling up to you.
In most cases, you cannot maintain that EBITDA if you build out a management team. I was super cheap and conservative. Maybe we'll call it traditional, not reasonable. Cheap doesn't sound very good. I was very conservative because, honestly, I just worked so hard.
In the first three years of growing this company, I had entitlement, and I'm not afraid to admit that now that I'm on the other end of this. When I was going into it, I held on to every dollar with this stupid entitlement mindset that I earned this. I sacrificed weekends, evenings, well-being, health, sleep, and everything to reach this level. This money and these earnings are mine. I have my arms wrapped around it. Every model I was trying to build was super lean at the management layer. I couldn't even stomach and pain somebody who didn't associate themselves with revenue outside of a super lean internal team. I was fine with that but our marketing... I'm not a marketer, so I don't do that for our company. I need a fantastic marketer.
Well, you've heard the episode where I talked about building out the C-suite. It started with Charlie, who's our COO. Oh, boy. Did he prove so fast that there is an ROI very quickly on non-revenue generating management people? He proved it to me. I felt like I was so lucky with Charlie, and I thought no way could be replicated with another manager. Do we even need another manager that's not serving their own clients? So they're like being offset and paid for with their revenue carry, and their part internal part client-facing what least then I could pay for them.
Okay, it's like, have you ever heard of the sales, the selling sales manager, not a fan. FYI, this is where you give them a small quota, and they sell, but they also manage a sales team. Like just to have them do one or the other. They should be selling, or they should be managing the sales team.
The same goes when you're building a management team. You're managing your internal people, or you're client-facing. But if you have your own clients and you're managing internal people, it's a mess. It's hard on them. Forget you for a second as the CEO. Think about their day in life. Think about yours. When you had a book of clients managing and running a company and managing people, how was yours? So now you've taken that same disaster and asked your people, your best people, to do it, the people that you're counting on to get you to the next level?
Okay, so in our company, we have proven that we ask as people step into leadership to phase out their current client load. It takes three to six months - they'll phase-out of their engagements, and they don't take on anything new. Then, over time, now their full-time management. That has worked well. I think it is a bit of a challenge. I see a bit of a challenge with them managing both, but I feel like they have the light at the end of the tunnel. They can see it. We've gone through this now with a few team members, and they are so full of joy when they are winding down. They can see, they can smell, and taste that new role. They're waiting, oh, they can't wait.
Then that day comes when they roll off the last client. Boom 100% in the leadership capacity, fuel, fire, and passion. They're all in. It's just incredible to be a witness to them, or to bear witness maybe is the appropriate way to say it anyway. So here's what I did, I took my workweek. I made a list. I listed out everything that I did in the whole company on any given week. Some things I did only once a month. So I made sure the monthly or quarterly tasks were written out clearly. I broke it all apart on the spreadsheet, and I allocated time to it. Then I ranked, sorted, and delegated who could take this on and what needed to happen within what timeline. What kind of training do I need to get different security access to systems? What kind of credentials? Do I need to build an SOP for it? How do I transfer each one of these tasks?
This has been a pure beauty in being a CEO. We finished at 2.18, 2 million at the end of 2020, and we'll finish somewhere around 3.6 million this year. We're doing about 400,000ish at a run rate, which is a little high, but somewhere between 360 and 400,000 a month in revenue. So, we're at that run rate, like really starting to get close to four and a half, almost 5 million on that I'm looking forward to for 12 months. So that could be an exciting achievement when we get there.
All I'm saying is I have to have the infrastructure. Infrastructure isn't just a project management system and good onboarding and training and SOPs. Infrastructure is also people. I have the most incredible privilege to have a five-person executive team with very clear roles. Brilliant, committed, passionate, hungry people. They are so, oh so good.
Now, I'm taking that EBITDA where I was running a million miles a minute at pure exhaustion, constantly in a state of insufficient funds overdrawn. I was performing. I was faking it in meetings. I was so exhausted. I would show up to meetings and mentally get in the zone, prepare myself, take a drink of water, staring at myself on Zoom. Make sure I was putting on a good performance because I didn't want anybody on this team to feel let down. I want her to show up with every call with energy with focus and to be in the game, and it hurt on the inside like physically hurt. I was exhausted.
The last thing I wanted to do was another reason call. My mind was racing, and I was thinking about 100. I would keep glancing down at my phone for other tasks, dismissing slack messages, and responding to Slacks, texts, and emails that would come in. Addressing the urgent trying to show the person on the other end of the zoom, or if I was meeting with them in person, I was paying attention and engaged. I wasn't, and it was all a performance. I learned how to operate in that state. I guess, like, get away with it, but it's not good.
I had this realization that I was performing. What I needed to do was transform on the inside. If I could change my role, then it would take care of itself. I started on this journey of making this list and carving up everything. Remember, if you don't have what you need, use what you have. I took the hours; I was willing to work every week. Then I took all those tasks, and I carved them up. We moved several people up the ranks. We're phasing them out of client work. They're running their teams. They're doing all the work. I was stressing and running around like a chicken with my head cut off, trying to do everybody's job. The amount of trust I have for them, their quality of work is so good, their understanding of processes, and their team members love them. They are wonderful leaders.
Now I get to transform into my new role and help my new leadership team transform into their role so that they are not stuck in the performance zone. I'm looking at how my team structured its weekly meeting schedule and its days. I'm monitoring the to-do list and capacity. I'm looking at how doing work to assist in finding ways to bring in efficiency and cut back on some of the tasks. It's not going to be perfect.
Over the next few months, we have a lot to figure out. We created four new roles. We've never had these roles before. Who's paying for this? Well, pat on my back the moment I released the entitlement and wrapped my arms around the profit in this company. I realized that I would never get a different outcome. If I don't do something different. I was a fool to believe that I could maintain my work ethic. I was bringing that crazy schedule, maintaining that EBITDA, and trying to be twice the size of a company without this fantastic leadership team.
Now that I am not grasping onto those dollars. In a way, I like gleefully carved out hundreds of 1000s of dollars out of the EBITDA to pay this team. Because there's a vanity metric, and then there's a sanity metric. I'm at the point in scaling this company that I'm going for sanity. The cool part is, that I still get to make an amazing living. The value that has been built inside of this company. We have five leaders. We can now invest, divide, conquer and invest and mentor and develop into these additional 20 people on our team who have said yes to showing up and being here.
We can roll up our sleeves when we can help them progress in their career by all this attention to detail and extra hands-on deck, rolling up our sleeves, and getting in with our teammates' work. We know the quality of work is going to continue to be remarkable. We're going to continue to scale the clients that we work with. It wasn't going to happen with my arms wrapped around the EBITDA. The dollars in the sense of entitlement. I took the company as far as I could on my own. You know what, and it was a great run. I'm so proud of myself. I really didn't think I could do it. But I hit the end of my rope.
There's only one pathway to the future. It is by letting go. It was a chance for me to my role. My role has been transformed. I'm starting to change my mindset, heart, and attitude towards this team this week. I'm recording here on Thanksgiving week. We move into our new office on December 1, we move from downtown Denver to just south of downtown. This is our own space. We've been in a shared co-working space for the last almost two years. This is amazing. The construction build-out was done on time. It's beautiful.
We got to go shopping on Black Friday for some unique furniture for the space. The team has been donating their time on Thanksgiving break. We've been closed most of this week, but certain team members came in. They're building desks and chairs, and they're here, and they're putting it together. I can just feel this fresh wind coming into our business. We are aligned for the next chapter.
We just turned four years old this month. I can't believe we've finished four years, all of 2018, 2019, 2020, and 2021. Four years. What a dream. I just turned 38 years old the same month. Two birthdays - the business and myself. What a dream. What a pleasure. Beyond fortunate to be at the helm. If you're in a state where you feel like you're performing. It's because you don't have what you need. You're drawing from funds you don't have; you're performing. It's time to transform.
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Thanks for listening to today's episode. If you're interested in being on our show or want to learn more about how we can help you scale your company, connect with us at houseofrevenue.com or with me Mary Grothe spelled G-R-O-T-H-E on LinkedIn, Twitter, or Instagram.
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