Business Systems – Matthew Griffin
business systems
SUMMARY
Running a successful business takes a lot of planning, patience, and hard work, but most importantly, proven business systems.
On this episode, we are here with Matthew Griffin. He’s the CEO of Combat Flip Flops, a company that has experienced a 450% annual growth rate. In addition, he served in the 75th Ranger Regiment as a Rifle Company Fire Support Officer.
Matthew talks about the challenges they had when they were first starting their company, which is a product-based business, and how they were able to overcome those. Also, he emphasizes the importance of writing down and tracking your numbers to running a successful business.
KEY TAKEAWAYS
The dilemma of running a product-based business is it’s usually a volume game.
When you write down the numbers, you can make better projections and better decisions in your business.
You can have a huge sales pipeline and a great profit and loss statement but if your cash can’t support it, you’re not going to make it
Research all the fees that your product goes through from material supply through the end user delivery.
Reach out to friends who are in a very similar business or manufacturing in the same area.
Create a spreadsheet where you can input the different costs and track them.
Be careful on your marketing dollars.
Be critical of those digital marketing firms that guarantee you 10x or 20x return on investment..
Search online for pre-formatted spreadsheet templates.
You can run your platform through Google.
TRANSCRIPTION: BUSINESS SYSTEMS – MATTHEW GRIFFIN
Luis Congdon
Hey, Thriving Launchers, today, we’re going to talk about dialing in the metrics on your company with business systems so you know whether or not you should stay in business, change the numbers, or whatever it is that you need to be tracking so that you know exactly what your business will be doing so that you can keep increasing profits and not have so many losses.
Today’s guest is Matthew Griffin. He’s the CEO of Combat Flip Flops, a company that has experienced a 450% annual growth rate. Griff joins us as a former West Point graduate and also somebody who served in the 75th Ranger Regiment as a Rifle Company Fire Support Officer, three tours to Afghanistan and a tour to Iraq.
He joins us because he has created an incredible company that has a mission, purpose, and is driven by somebody’s history and past, and utilized all of that to create an incredible business, and he’s here to join us to teach us about how to run a successful business.
Okay, Thriving Launchers, you’ve heard of him now, and we have him on the call.
Griff, are you ready to launch?
Matthew Griffin
All day, every day.
Utilize Business Systems To Avoid Errors
Luis Congdon
Love it.
Griff, one of the things that you were saying before the interview, I think it’s something that’s really important for anybody whether you’re selling physical products or non-physical products, but the dangers are probably a little starker and stronger when you have physical products.
You were talking about like when you are selling physical products, there are a lot of errors or things that people don’t realize that can make their business just go bust.
I would love to ask you what are some of the things that you’ve acknowledged in your business or things that you’ve had to consider that you would like other business owners to start thinking about if they’re going to sell physical products?
Matthew Griffin
One of our CFO, Casey, he mentioned it when we first started our business is anything over 5% is material. He said if you look at your total revenue, anything over 5% is you need to start taking a look at it because those are real dollars and real money.
Business Systems – Be Aware Of The Different Fees
Matthew Griffin
When we started coming up with our flip flops and footwear, we’re like “Hey, we could win all products in 50 bucks so let’s make it four. We need to land up for 25.”
You just put the margins and what you need to for gross, let’s just say at 50 point gross margin and then you start building your product, and all of a sudden, there’s an extra duty fee. There’s a fuel, freight surcharge fee. There are warehousing fees. There are the pick, pack, and ship fees and everything else.
Research About Business Systems
Matthew Griffin
If you don’t account for all of these things ahead of time and if you don’t research all the fees that your product goes through from material supply, all of it through the end user delivery, you’re going to find there are percentages here and there, left and right that just adds up and you could quickly run yourself successfully out of business by not accounting for that stuff, for not being aware of it.
That’s a huge challenge as you grow any business. It’s understanding all the different fees that you pay in to deliver your product.
Kamala Chambers
When you’re starting out, how do you even begin to factor in all those on known costs?
Reach Out To Friends Who Can Share With You Their Business Systems
Matthew Griffin
One is you just reach out to some friends who are in a very similar type of business who have business systems, or maybe manufacturing in the same area and say “Hey, I’m thinking about making a product. I’m concerned about the fees that I might face and I want to make sure I’m accounting for as much as possible before I go and put my deposits down and launch my company. Can you help me out?”
And if you ask, most other business owners, specifically people that are on product-based businesses, they’ll say “Yes, sure. I made all these mistakes. Here’s what I know and you can account for that.”
Business Systems – Create Spreadsheets
Matthew Griffin
We learn by failure. We just started making the product and moving forward, then all of a sudden, all the bills started rolling in and we started attributing different accounts and then, we started finding out just there’s simple spreadsheet math where all of our percentages where and how we weren’t accounting for them.
Luis Congdon
That sounds like one of the things and it’s something that we definitely believe in is creating a spreadsheet with all the different costs and tracking those. Are there other things that you think about when it comes to running a business and using business systems?
At one point, I was interested in selling the physical product and it was going to be a glass water bottle with a rubber casing over it. As far as I had ever seen, no one had ever done it and then a couple of years later, somebody, who are like at whole foods and all over the place.
When I started looking into that, very quickly I realized “Wow. This $20-30 water bottle that I want to sell is going to cost me a lot of money.” Especially when I first want to start selling, it’s going to be very expensive.
Business Systems To Avoid Losses
Matthew Griffin
For us, we knew that we were going to lose money for the first few years. Well, most businesses lose money for the first few years unless you’ve got to figure out and you got some sort of secret sauce.
When we knew where our skill points, we knew the points where we would hit our volume discounts and breaks where the math would really start working out.
Can you struggle? Can you run tight on those so that way you can get your volume up enough to hit that point?
Yeah, it’s just the dilemma of running a business much especially in a product-based business. It’s usually a volume game.
Business Systems – Proper Prior Planning
Matthew Griffin
And how do you get that volume? For us, it’s just proper prior planning. There’s that saying in the army, “proper prior planning prevents poor performance.”
If you can just sit down, and be willing to grunt through your Google sheet for a few hours and make all of your assumptions and just write down all your costs and figure out the best basic formulas, you’re going to be way more prepared for success than you were if you didn’t do that.
Luis Congdon
You know we interviewed some other businesses like MACNAK Construction, I’ve noticed the similar theme whenever we interview people that have that military background that they’re very accepting that the first few years, there are going to be a lot of struggle, grunt work, and sacrifices.
Grunt Work and Business Systems
Luis Congdon
I would think that that’s something that you would really say if somebody came, and said, “Hey, I’m thinking about doing this,” or I’m getting started.” I would imagine that’s one of the first things you would talk to them is “Hey, are you invested enough to spend a few years grunting it out and probably not getting huge returns or maybe not, just basically losing money for the first few years.” Am I right to assume that that’s probably one of the first things you tell a new business owner?
Matthew Griffin
It is. They make all these crazy entrepreneurial books and programs you could take and learn from where you think you’re going to make on a spreadsheet a million dollars in six months. That’s the unicorn business. They just don’t happen.
Most of the time, it’s just a lot of planning, patience, and hard work. That’s it. You just have to really work your way through it and knowing that knowledge comes through experience and experience comes through failure.
Learn From Failures Through Business Systems
Matthew Griffin
You’re going to fail a lot along the way but just being able to pick yourself back up, identify where you made the mistake, make a plan to avoid that mistake in the future and drive forward is what I believe the determining factor of successful business owners.
You just have to work your way to success.
Avoid Being The Other Types of Entrepreneurs Who Don’t Have Business Systems
Matthew Griffin
Whereas, most other people, the “wantrepreneurs” or the “talktrepreneurs,” they’ll get going and as soon as they hit their first roadblock, they will just stop.
Luis Congdon
That’s a new word, “wantrepreneurs” and what was that other word?
Matthew Griffin
“Wantrepreneurs” and “talktrepreneurs.”
Luis Congdon
Some new terms there.
Kamala Chambers
Yeah.
I would love to hear from you what is one of the biggest tips you could give the Thriving Launchers to start to apply some of this stuff on business systems?
Business Systems – Spend Your Marketing Dollars Wisely
Matthew Griffin
Be very careful on your marketing dollars. We struggled with that significantly. It’s an online world, and if you want to get the attention of your customers, it’s a pay to plug in. It’s really that simple.
If you want to market and you want to get to people through Facebook or Instagram, or what other platforms you’re going to want to attract your customers to, that’s a real estate that needs to be bought.
And so, how do you account for that cost in the sale of your products? And how do you make sure that you’re not overrunning it and/or you’re spending your money on the highest return in marketing spend?
Be Critical Of Various Digital Marketing Firms Who Offer Business Systems
Matthew Griffin
If you’re going want to move product, you have to sell it through the online platform. Those are paid platforms that you just really need to be careful of and you’re going to get head up if you have any kind of success in your business like every digital marketing miracle firm on the planet that can guarantee you 20x return on investment or 10x return on investment.
Just be really critical of those and make sure you’re watching your numbers and don’t run yourself out of business trying to sell your product.
Kamala Chambers
We’re coming to a close here and I would love to hear what is the action step that you would suggest to everyone who wants to start a physical product-based business? What step can they apply right now?
Matthew Griffin
Get online. You can find template spreadsheets.
Running The Fundamentals Of Business Systems
Matthew Griffin
Those are the all three that you need and if you can’t run those, it’s just not going to work. You can have a huge sales pipeline, have a great profit and loss statement, have tons of profitability but if your cash can’t support it, you’re not going to make it.
Business Systems – Search Online For Pre-Formatted Templates
Matthew Griffin
We were victims of this as well. But if you can get the spreadsheet to work, you have a higher likelihood of succeeding in a business and there are so many templates out there that are already pre-formatted and can work for you. Also, you can just go online and you can have them in the next ten minutes after listening to this podcast. You can be on your way to creating a successful business.
Kamala Chambers
Can you recommend any templates or software that you particularly love?
Matthew Griffin
We are Google through and through.
Business Systems – Use Google G Suite
Kamala Chambers
I’m with you on that.
Matthew Griffin
Google G Suite, everything from your emails to your spreadsheets, to your file sharing, and to your marketing. Everything is being able to run your platform through Google.
It’s a simple, effective solution that until you’re busting at $10-20M, you can run pretty much everything you need to. It’s an inexpensive software suite provided by Google.
Luis Congdon
I love that and I love how practical that is. It’s something that we use with managing our team as well. It’s something that we use when we work with some pretty big companies as well. Great tips there, Griff.
Have A Team To Help You Implement The Business Systems
Luis Congdon
Thriving Launchers, I wanted to make a confession time because Griff is talking about something and I want to make it more solid for you guys and tell you that in our business, especially when I was running by myself without Kamala, I just was terrible.
Looking at the numbers, I would go “Oh! I just made $5,000” but then I would look and dig in a little closer and I was like “No, I actually spent this much time to earn that money. I spent this amount of resources to earn that money,” and when I break it down to hourly rates or the yearly income, it’s really not very much.
And so, when we see people on social media saying “We run a 6-figure business,” or “Hey, I just made $10,000” I always go “How long did it take you to do that? What are your profits? What are your losses? How much is your staff getting paid?”
Business Systems – Write Down The Numbers
Luis Congdon
These are things that if you just take a little bit of time to, as Griff said, really write down the numbers, then you can make better projections and make better decisions in your business.
It’s not something that I know that by myself without Kamala, I was not able to do and it’s why I’m a big believer in having a team.
Griff, before we go, can you say a little bit about how your team plays a big part in your business and in your success?
Matthew Griffin
Yeah.
My team is the reason we are successful.
So there are three co-founders; Andy Sewrey, who’s our President and Donald Lee who’s our CMO.
Business Systems And Good Balance In The Team
Matthew Griffin
Lee and I served in the military together. He’s a tough kid out of a really tough neighborhood in Los Angeles. We would call him our “perpetual naysayer” so he’s always sniff-testing the products, anything that we think we might be suspect of and he puts the critical eye on it. He raises red flags and makes sure we go into any situation with our heads up and making sure we’re aware of what we’re getting ourselves into.
Our President, Andy, he is actually my brother-in-law. He is a spreadsheet guru. He is our production master. He is detail-oriented and process-oriented. We kind of joke about it but he keeps the promises that Lee and I make between marketing and sales.
With the three of us, it’s a really good balance between our personalities.
Luis Congdon
I love all that feedback and having a team is essential.
Thriving Launchers, I want to wrap this up and wrap you up here with some key points on utilizing business systems.
Track Whatever Your Need To Track With Your Business Systems
Luis Congdon
One is to know your profits, know your losses, and really track the data. Tim Ferris has some great quote about it “What you can track, you can measure and what you can measure, you can track.” It’s a great little quote there. I know I totally butchered it but it is super important and your team. Your team is essential.
Whatever it is you got out of today’s episode, Thriving Launchers, go out there, apply whatever you can, and make it work for yourself.
Until next time, we’ll see you on the next episode. Keep thriving you all.
