Shed Geek Podcast
The Shed Geek Podcast offers an in depth analysis of the ever growing and robust Shed Industry. Listeners will experience a variety of guests who identify or specialize in particular niche areas of the Shed Industry. You will be engaged as you hear amateur and professional personalities discuss topics such as: Shed hauling, sales, marketing, Rent to Own, shed history, shed faith, and much more. Host Shannon Latham is a self proclaimed "Shed Geek" who attempts to take you through discussions that are as exciting as the industry itself. Listeners of this podcast include those who play a role directly or indirectly with the Shed Industry itself.
Shed Geek Podcast
Insights into Modern Business Practices and Success with Richard Mashburn-PART 2
What happens when the cost of doing business in the rent-to-own industry spirals upwards? Discover how rising dealer premiums, shifts in funding costs, and fraudulent activities are reshaping profitability, compelling businesses to rethink their strategies in marketing and finance. We unravel the significance of understanding true costs, from transportation to property values, and the critical need for staying adaptable in a landscape filled with financial challenges. Engage with us as we also delve into the potential compliance threats surrounding tax laws for 1099 employees and learn why adaptability is key in maximizing market opportunities.
Is it possible to maintain personal integrity while fiercely pursuing profit in business? We explore this captivating tension, offering insights into the often manipulative application of faith-based principles in business decisions. Through candid stories and thought-provoking dialogue, we question whether the real change needed is at the industry level or within individuals themselves. Throughout these conversations, we stress the importance of remaining true to one's principles and the impact of discrepancies between proclaimed values and actual business practices.
Are you truly prepared to scale your sales processes and maximize future purchase price? Explore strategic steps to achieve success in the manufacturing sales industry, with a focus on scalable and replicable processes. We look into the benefits of owning locations, maintaining a full sales pipeline, and the role of robust systems like Business Development Centers in the car industry. Furthermore, we highlight the power of collaboration, feedback, and vulnerability, presenting the idea of forming non-competing groups for fostering innovation. Join us as we reflect on finding balance between ambition and contentment, leaving a positive impact, and maintaining focus amidst life's distractions.
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Studio Sponsor: Union Grove Lumber
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Thank you for listening to part two of a two-part series here at the Shed Geek podcast. If you missed part one, just go back to last week and listen for more engaging conversation here at the Shed Geek podcast. But in general, do you see a lot of benefit of being in rent-to-home now, like with the competition scaling the way? It is the price of money, all the things is it. It's profitable, but how many people want to be in it? I'm just curious Is there other areas that you can look at? I mean, we've been every bit as successful with our marketing as we have our rent done. Let's not suggest our rent done isn't doing good. Folks I've partnered with are in business for 13 years. We just had the best year ever in year 14 through our partnership. It's good. But man, there's so much area in others for us. Right now, we're attacking marketing and traditional financing. There's other areas that we're looking at to be able to provide a service. Again, you can't stop me from helping people. If that's providing a service, then we'll provide a service.
Richard Mashburn:Marketing was built successfully around. You know it was established as an ROI. You know the return on investment was clearly defined as the measuring stick. When I got in the industry in 17, 18, I used to go to these meetings and I would hear people go oh yeah, I'm making 50% of my rent to own portfolio. Oh no, you're not. You don't know how to do the math. Then, a few years later, I'm making 30% of my rent to own? No, you're not.
Shed Geek:You still don't know how to do your math when.
Richard Mashburn:But when you actually break down the true cost of it and you start looking at it going, you know it wasn't nearly as profitable as people thought it was. And a bunch of people I can remember people borrowing money as dealers to invest with rent-to-own companies to try to make yields on it because they thought the yields would be so huge. And I'm not saying the yields on rent-to-own aren't great and it's not better than any installment loan package I've ever seen.
Shed Geek:Well, it still depends on how you manage it.
Richard Mashburn:But when you have a cost of funds that is nothing to 4%, and then a cost of funds that goes from 4% to 7%, or it goes from 4% to 9%, or it goes to 4% to 11%, how much yield is left you? Know how much yield is left. So, now you start talking about net yield. Now you're paying 5%, 6%, dealer premiums on your rent and all Minimum.
Shed Geek:Some are doing more.
Richard Mashburn:You're sitting there going okay. Well, now I've got these dealer premiums that are biting into my yield and they're paid up front, so I actually have losses on that if I'm not careful as a rent-to-own company. The question is people, I think, just became more granular in their math. The environment changed around the premium piece. The environment changed around the repo piece.
Richard Mashburn:The big environment changes. We all went from single digit true losses early term fraud to now a lot of lenders are experiencing 7, 8, 9, 10, 12% fraud, meaning the building doesn't exist. So now I'm not getting it back at 70 or 50 or 30 cents on the dollar. I'm getting nothing back, so I have 100% loss on a portfolio tranche and some of that's organized fraud.
Richard Mashburn:Yeah, that is, I mean six seven times bigger than it was even three years ago. Yeah, so now you've got another inclement math piece factoring into that, ROI. So, is rent to own as profitable or as appealing as it used to be? It's just mathematically not anymore, because even if you have free liquid cash to do your own, rent to own, you know I can get you a money market account making you 6% right now. So, risk to reward, you start going. How do I look at it? And that's what you know has really hurt. We started on inventory funding, and we started on all these other things and we're going. You know the cost versus the benefit you know the amount of money you had to weigh out.
Richard Mashburn:All of those things have kind of changed the landscape a little bit it's a lot of what you know me and my partner spend time talking about me and George go, you know, at scale and we're not giant but we're good size already and it's like we're having to manage to a scope of things. But that naturally leads you back, coming full circle to I want to either have huge influence or absolute control on as many of the components as I can to make sure that my personal company's best opportunity is maximized, and that's leading people to strain relationships and everything, because everybody wants to control more of what they have, because it's becoming more expensive to do everything. Transportation is more expensive, selling is more expensive. I can remember everybody going. I could rent a lot for $300 to $1,200 and we're getting people offering us lots all the time. I can't even look at a good lot.
Richard Mashburn:I'm in South Carolina Lots $2,500 to $3,500 a month, you know. And the leases are getting egregious on the firms that hold them. And you know you want to buy the property. Well, the property's gone up six times in value in the last five years. You know the insurance against it and all the different things, you know. I think there's a. You know. I had a conversation again at the show yesterday. Somebody goes all right, tell me what my biggest threat is. And I looked at him and I said you're paying all your salespeople $10.99 and they actually work for you. And they're like what? And I said have you read any of the tax law stuff around? How they're hunting in the landscape world and all that to do away with inappropriately tagging people $10.99 to avoid paying appropriate taxes on their income and having workers comp and all those things.
Shed Geek:You know they will find the shed industry one day. We're literally like we're switching over to and maybe not all parts of our business, because we do have that autonomy in some areas, but specifically with Shed Geek LLC I mean we're switching over to an S Corp and a payroll system and a W2.
Richard Mashburn:All my salespeople are.
Shed Geek:W2. It's just and it's one thing that you know, in order to avoid some liability in the shed industry. It seems like not everybody wants to go that route, but I don't know. I would almost encourage manufacturers to control that vertical through franchising your Facebook page, on your website, on your SEO, on all of your marketing areas, but also own your lots as best you can, or scale down. Instead of having 30 independent lots, why don't you own 10 of them when you lose a dealer? Now you're not moving a whole bunch of sheds from one place to the next and trying to chase down a Facebook page.
Richard Mashburn:Or have a central location to gather and bring your repos back and maximize your resell of your repos if you do your own rent to all, and I mean there's so many avenues that have at least some control or beneficial.
Richard Mashburn:It doesn't let you.
Richard Mashburn:You know these magnitudes of scale. You know, if you've got unlimited building capacity, you've got some 18 wheelers where you can haul affordably long distances. You can add consignment dealers at a just mind numbing pace, you know. And then you can lock them into your software and help delineate your cost. And you can lock down your rent to own premium. So, you're making a premium over the top of what you had to pay them, which almost reimburses you. There's ways you can make it work. That'll give you a scale, but you lose a lot of control.
Richard Mashburn:And then two and three years later you've got and that's what happened to several of these companies that went under they woke up one day and they had 40 dealers scattered over three states. Most of the logistics weren't making sense and was way expensive. Their cost of their funding line went up or their funding line evaporated. We all know the notorious story of a bank, not to be named, that all of a sudden shut down all of their rent-to-own funding, which then shut down everybody's inventory funding and affected a bunch of us, including me, and it had a hemorrhaging effect across the industry. And then all of a sudden, I've got a bunch of inventory sitting at places I can't afford to go get that's not being sold or it's gone.
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Shed Geek:Which begs the question for me if, if all of that banks to, to, to, not be named, uh, pulled all of this, who's taking care of those contracts? Who's satisfying those contracts? And I mean I know there's somebody right now like uh, uh, stabbing me with a little fake doll in the back saying shut up, but I just hey, where are your? Who's funding your contracts? Where'd it go? Well, if it's not private equity, then all of a sudden, where's it going and maybe that's just. Hey look, I'm not saying that, that's doing anything wrong.
Shed Geek:Just to be clear, I'm saying last time I was here we talked about acquisitions. Is this a perfect example of acquisitions happening, whether it's in shed companies or even RTO companies or?
Richard Mashburn:Three years you sat in the RTO national offices and interviewed me and me, I said one of our biggest concerns is that we are seeing the first intro salvos of private equity into the industry, when big money with deeper pockets than all of us, including RTO National, started entering the field. I told you on the podcast that's one of our biggest concerns because it will change the landscape at a mind-numbing pace.
Richard Mashburn:Now you and I, if we chose to name names, can name five companies off the top of our heads that are all owned by private equity firms right now, today, or completely funded, and I've had several of the leaders in a couple of those companies that share with me privately going oh my goodness, Richard, these people are completely different. They don't care about anything but the yield you know he goes.
Richard Mashburn:I didn't understand.
Richard Mashburn:I'd have to look at my business and start talking in terms of just raw yield.
Richard Mashburn:They don't care how many employees.
Richard Mashburn:They don't care how many sheds. What's the yield on my investment? And if it ain't double digits, I'm pulling all my money and firing everybody.
Shed Geek:You want to talk about an invitation to the real world? Whatever you tell me, stop being naive, because friendship don't matter. Wait until you find some sharks.
Richard Mashburn:Go to work for a private equity firm and tell them that you want to do what's right. I'm sorry. That is not as negative as it sounds, you and I are laughing and it's a good long story. I am not that negative To me, coming from a world where private equity was common and securitization was common in the auto space. That was the reason we were the way we were.
Shed Geek:So, let me ask you are we wrong as an industry? Because probably our faith drives a lot of our decision. Are we wrong? Are we naive? Are we going to change? Should we change?
Richard Mashburn:You already have.
Shed Geek:Me or the industry. The industry, okay.
Richard Mashburn:You're still holding on. I applaud you for it A little, I'm just going.
Shed Geek:I just believe in the goodness of people.
Richard Mashburn:I'm a person of faith. I'm not probably as vocal about it as others because to me it's a very personal thing yeah but, you know, and I can be judged it drives the business decisions.
Richard Mashburn:I can be judged that and again, I think some of them do. But I also think that some of the hypocrisy of some of the testimonials is just blindingly clear now and it is causing people to question the motives. I think there are known situations, and I've experienced them myself where people were demanding that I acquiesce to an agreement, of a decision, because they assigned a faith-based principle to their position that, in my opinion, wasn't supported, accurate or true, and I don't even believe they believed it. They used it as a manipulation tool to get somebody to agree to something and I think when you see that, enough that people start going, I will operate on my own grounds for my own beliefs and principles, but I'm going to be hard pressed to allow you to change or influence me based on yours, because I have become skeptical of the purity of the position.
Shed Geek:Man, that's a sound bite if I've ever heard one. I think I do, because I want to believe in the goodness of people and there's nothing wrong with that, because I do believe that people, so many people, are so good and I owe so much to so many people. But I'm vocal about my faith. I say the show belongs to the Lord, the Shed Geek brand in any way, shape or form, I give it to Him and so I am vocal about it. But does it make me wrong when I make a decision that's best for the business or your family? Because what I find is that like, uh, we're getting into some, some weeds here a little bit now, but when, when your faith determines that you should make this decision and that I should also make this decision because of your faith, but then the impurity that you're talking about is whenever they are faced with the same opportunity and make a different decision and you go wait a minute, that is the stuff of wars, yeah wait a minute.
Richard Mashburn:I mean it is. It's good enough for me, but it's not good enough for you. Do you not think that the money lender story we all know so well, and right before Jesus flipped the table over on him as he entered the temple, that that person wasn't protesting their own faith in an effort to get people to take money from him?
Richard Mashburn:So, I'm always careful to explain to people the question is we don't question the righteousness of the decision at the time. You look back at it and you kind of go. But who got taken advantage of that person's location and selling money right outside the temple? Are you selling too close to the temple Because you're selling and you're selling for you and your family's benefit, which is not..
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Shed Geek:I'll go back and listen to this episode four times. I always enjoy sitting and talking with you because it's the. The look. Where we start and where we arrive is a road that nobody's traveled. I can promise you that. But I love to follow these rabbit trails of thought and, I don't know, sometimes we probably get a little trouble. Maybe we say a little too much or peek a little farther. But I believe in difficult conversations.
Richard Mashburn:You told me before. Sometimes I think I say things that maybe people think but they don't always say yeah, and I'm not trying to do it to be kind. I don't consider myself a harsh person or any of those things. I think I've just lived a life that forces me to try to live my own truth and try to stay as true to that as I can, because I've been around some of the biggest and best snakes in the world and I've been around some of the most true, honest, helpful, good people in the world and, looking back, it wasn't easy to tell them apart sometimes you know what I?
Richard Mashburn:mean and you kind of go. So, then you just have to do the best you can. But I think it's a dangerous thing to apply. You know, don't go into it with closed eyes, don't go into it too much skepticism. But at the same thing I'm wary. Whether I, you, all the old sayings come out and how you think about it, I still I believe in good people. I want to do the best, but I'm also not wanting to be naive. Right now, there's scams going on everywhere and every way. You know the Hurricane Helene victims. They're looking for people that have lost animals and calling to tell them they found their animal. I'm with the Humane Society. You know my elderly parents have been barraged with attempted scams. You know just phone and mail and personal. You know we got a family member. You know, and you see these things and you go. You don't want to become that skeptic. There is still good in the world, but don't pretend that it doesn't sit in the shed business and sit in the world too.
Shed Geek:This is becoming my favorite episode in some ways. Uh, maybe because you, maybe because you do say things that sometimes people, uh, have difficulty saying, but are, but are thinking and, um, you know, I don't know. I just even my own experience has been unique. I I don't mean for this to sound sacrilegious at all, because it's not. I love the Lord, and I love his people, but I, I knew what to expect from the world, especially before salvation. Okay, I, I knew what to expect and I knew how to handle people, and I knew how to deal with people.
Shed Geek:It's only whenever I found salvation and became vulnerable and begin to trust that I would make the argument that emotionally, spiritually and financially, I have been taken advantage of by more professing faith-based Christian folks even pastors, to go on down the list than I have by the world, and I know that probably throws some people back who are listening right now, but that's also the reality of what I've experienced. Now that does not mean that I have not found some amazing people in the church, some that I believe are good to their core. I do believe that, but I have suffered more from emotional, spiritual and financial loss from those who are some of the loudest professing Christians that I have from the world, so they can do the most damage.
Richard Mashburn:They have the ability to do the most damage In the car business. When I got into lending, there was actually a trained Be careful when you saw an application of one of the five Ps Painters, politicians, policemen, preachers and prostitutes.
Shed Geek:I thought preachers was going to be last on that. I didn't expect that.
Richard Mashburn:But look at the group Painters being the one weird one. But it was just because all of them were influential in their own ways. Yeah, you were trained as a lender. If you saw anybody in those professions, to really be wary of underwriting the law, that's interesting. You're kind of going. It was such a commonality, and I found it just shocking, raised the way I was. They're going. You know well, why would you do that?
Richard Mashburn:well then, 20 years later, I'm like oh yeah, I know, now, you know it was kind of like you had to be careful.
Shed Geek:I'm not going to suggest it also hasn't changed me, but I've done my best to avoid it being causing a jadedness towards my salvation or or toward my savior right, because I've done my best not to let it affect me in that way. But I've talked to so many people in this industry that the only reason I I know I can let this episode air and even though if I get some flack from it, it's going to be okay is because I know the private conversations I've had with people who shared the exact same sentiment with me, and I bet there's no less than 50 of them who have told me and agree with the same thing. Man, you're right. I've probably been taken advantage of more by my closest friends and allies.
Richard Mashburn:Have any of us not ever looked at this guy and screamed why have thou forsaken me? We all have our moment. Yeah, you know what we do with it and what we come out as it is a different thing.
Shed Geek:Yeah, how you react is everything.
Richard Mashburn:You know, I think, and I don't want you know again, I don't want it to become a, like you said, you know, an episode that takes us down that path. I don't think, either one of us. It's way more about just understanding and when you put it in context of the shed business, we're still going through an evolution. There's different players in the market that have different motivations. I think on the last podcast I told the story of one of the dealers telling one of my new analytics people at RTO National. There's different people at the shed show than we've ever seen, and it was private equity people walking around. Capitalism doesn't have the same belief system.
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Richard Mashburn:And I always found it interesting I think it's unique that the industry was kind of based and it a faith-based industry and that was a positive thing, and I think they're still good to that.
Richard Mashburn:I do think Rent to Own's been successful because of a lot of that but if you think about the clientele that you're catering to, are they necessarily that? Yet they pay better, on non-credit check, rent to own for their sheds than they do for their car loans. That have proof of residence, proof of income, proof of location, driver's license, ids, and we sign them up. I always was just amazed, when I got in the shed industry, that people would pay for their sheds better, with no asking any questions and just telling them you believe in them and you're doing the right thing. But I still see, though, that there's a cost of rent to own, and half of the population that gets a shed are doing rent to own and you go. Well, if you just look at demographics in the United States usually it should be less than 30% would be required to use rent to own without having a significantly cheaper alternative way to go get the building. Doesn't mean they're not going to borrow the money, but it would be significantly cheaper. So, you kind of go. Is rent to own being used or oversold, or is the industry actually reaching out and catering to a bigger population of the unserved and unserviced, which is a benefit?
Richard Mashburn:When you go to your blue, there's all these things that come into it that you can question why it's different, but I think the length of time, now that we've got criminal fraud seeping in, how many lenders do you know right now that are doing soft identity checks in criminal backgrounds before they're funding their rent-to-own deals? I can name five large companies. I know we're doing it precisely because they don't trust or believe anymore, because they can't. The losses are there. So, you're seeing this infiltration and change, not just in the dealer base, but you're seeing a change in the customer base. So, the world is crashing in and now there's a demand of an ROI and there's a demand of an ROI, there's a demand of an investment, there's a fixed yield and, you know, there's all these things that are happening that are going to force a change that will bring it back into the world.
Shed Geek:They always give good food for thought. It's always like a super educational time sitting with you and some of these, some of these topics may be things that people consider educational and entertaining, and you and some of these, some of these topics may be things that people consider educational and entertaining and fun, and some of them may be like no, this is just my life. I've experienced some of the same things and I'm glad that you're talking about that.
Shed Geek:In difficulty, I want to make sure I reiterate that I never, ever, ever, you know intend offend, but you risk being offensive the moment you speak, in any setting. You risk it and you know you risk offending, being quiet. So, you're never going to be able to, uh, satisfy everybody in every situation. And I think I finally kind of come to that conclusion, to where it's like well, why don't you talk about those things? You may lose listeners, and it's like some listeners are worth losing. If they're not doing it for pure pleasure-seeking or revenge or anything of that nature, then we should be having more difficult conversations. From time to time, you just kind of bring that out of me. Typically, I stay on.
Richard Mashburn:Why do you make me talk about all the things I?
Shed Geek:should never do.
Richard Mashburn:I've got to have somebody to blame the child in the storybook the Emperor's New Clothes that screams he has no clothes on, and in the book version I had it was a little girl. Is she a hero or a villain? It's just a matter of perspective. If you're the person that sold the Emperor the Clothes, she's a villain. If you're the crowd standing there that wanted to say what everybody knew was true and only the child did, she's a hero.
Shed Geek:Well, it's usually the innocence of a child that will break down that reality that you know. Hey, he's clotheless. You know what I mean.
Richard Mashburn:Like we're stating the obvious, and in some situations it may not be a child, it's, honestly, just a genuinely honest person but in a business world, when you bring it full circle, and in the shed world, I think we have some circumstances out there that are common, that are the Emperor's new clothes, and we all know they exist and we've catered and entertained them for a long time and all of a sudden there's more and more people whispering. We've got no clothes on, and I think it's going to change the nature of how some people make business decisions in the future. I think it'll change a little bit of the face of the industry, but I think for me it's just that constant challenge to make sure I'm staying true to the just cold light of day of what does the information tell me and am I making a sound decision based on what I can validate?
Shed Geek:I remember when I got in and others have probably heard the same thing Once you start learning about RTO and it's like you ask questions and you try to figure things out and it's like that's where the money's at and that's why a lot of people jump into. Just because so many people are saying that's where the money's at, they're saying, well, hey, we have a little investment, let's jump into. Just because so many people are saying that's where the money's at, they're saying, well, hey, we have a little investment, let's jump into it.
Richard Mashburn:And I can tell you my manufacturing margin is greater than I think I could generate in an RTO yield. Right now, the table has changed. Transportation is still the leanest margin.
Shed Geek:Do you think we'll see more manufacturers because of that, or do you still think we'll see acquisitions of larger companies to do?
Richard Mashburn:it more profitably.
Shed Geek:You've got to be bigger and you've got to have scale have you ever considered like you're offering your services through an acquisition process? Yes, are you open to that if people call through an acquisition process? Yes, are you open to that if people call? Sure, I have. Can I get a dollar bill off of that? I'm just kidding.
Richard Mashburn:I'm just kidding the greatest value we have is time to tell you that as you well know that was a loaded question.
Richard Mashburn:I know you know that there are some people that do pay me for conversations. Um, I got myself tickled, I'm sorry, and there's some people. I just have the conversations because I know them. There's a fairly good group of people that there's an exchange of information and services and ideas and I think, if you're privy to most of them because of your relationships with some of them and the fact you've introduced me to some of them, but it's a lot of the partners that I use in banks, buildings and things today are people that I also share insight and information with.
Richard Mashburn:Raising money, raising money, raising capital, acquisition-based valuations. You know, even before my time in Rittenholm, we spent a lot of time doing those things, you know, and it became common. I'll never forget when a client of mine at RTO National called and he goes can you come see me? And we jumped in a plane and flew up and he is out of the business entirely now and he sold out and he goes. They're talking net ROIs and multiples, Richard. What do they mean? And I will tell you, I still haven't seen a deal as lucrative as that one. But you know, and he looked at me and he goes I got a 10th grade education, and he goes I've been building sheds forever and I'll build you a shed and he had a great business.
Richard Mashburn:But the firm that hit him you know he had to get some advice very quickly and you know, or if you're acquiring
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Richard Mashburn:I have very you know, just like everything we've talked about today, I have very strong opinions of how I think about it and go about it. You and I had a conversation off record earlier. How I evaluate software companies is very different than how I evaluate hard asset companies like manufacturing or, you know, transportation companies and things.
Richard Mashburn:Because I just think that the general market looks at those very differently. From a valuation standpoint, software can be very intrinsically valuable. It can trade at a multiple of its revenue, beyond what a hard asset company can, because it can be scaled by somebody that has the desire and willingness to make a lot of money and it can be done quickly, whereas manufacturing requires more dirt, more land, more buildings, more materials, more humans. It can't be scaled as fast. So, you buy one of those for what it currently does and makes in its actuality, whereas other things you look at and buy towards their future potential. I think that's what's getting.
Richard Mashburn:Interesting is the conversations I'm having with people that I find incredibly interesting. How do I shape my company to maximize its future purchase price? So, in the manufacturing sales world, the conversations I've been having, is people getting replicable, clearly documented, simple processes that can be scaled in a manufacturing and retail environment. Does that make sense? And there are people right now currently working towards that their exit strategy. And again, it's interesting to talk to people in the shed business versus 2017, because I have people entering the business that are entering it with a three to ten year exit strategy of monetizing what they've built, which is very common in other industries. It just hasn't been seen, from my experience, a bunch of the shed industry until the last few years and they're going.
Richard Mashburn:How do I create and get the maximum value out of ABC shed manufacturer, dealer? And I'm going well one to our earlier point. If you own your locations instead of consignment dealers, you have more control, which makes it more understandable and purchasable at a value, because there's no guarantee a consignment dealer stays on and can enforce the contracts or even have a premium in the contract. You know, is my process scalable? Do I have staff and process where I can open a new lot, ramp it up and hire a person that executes at a relatively equivalent rate to all of my other locations quickly and do it repeatedly? Can my manufacturing process, as long as I have X number of square feet, be duplicated, replicated or scaled to support growth?
Shed Geek:When you increase in sales. I mean, that's often the challenge. You know everyone prepares for failure. Have you ever thought about that?
Shed Geek:like everybody, says prepare, you're supposed to have something to fall back on.
Shed Geek:Yeah, but so few people actually prepare for success. When it starts going good, I think a lot of times it scares them because it's like I never expected to really get here. I sort of anticipated the backlash or the shoe to drop. But I never expected. So now that I have success for instance, sales that's going to drive your lumber costs down because you're buying in bulk, but do you have the value to do it through your cash flow? Is your operations set up to be able to handle the influx?
Shed Geek:A good example is we've gotten leads and to me, sales is about. There's a lot of things sales is about, but generally speaking, you keep your pipeline full. This is the best secret anyone could possibly ever come across. You keep your pipeline full. You're always going to be selling. You don't keep your pipeline full. You're relying on selling to everybody who walks in the door. It's not reality. You need 100 people in the pipeline. You think whenever I go get a podcast, I haven't talked to 30 people, so I can get five interviews. Yeah, you have to do that because not all 30 people, but that doesn't mean the other 25 won't come over time.
Shed Geek:Sure, and they have A lot of times.
Shed Geek:It's just not an atomic thing or a scale, but I've got to reach out to a larger crowd, so it's the same way. For that reason, I mean, I'm even entertaining the idea. If we can do it effectively, and I think I told you this before what if we got involved in sales in some way? What if those leads that aren't being capitalized on could be? How much more beneficial would that be? And you can actually, because that's one of the biggest problems we have is, you can get someone 130 leads, look in their CRM and they haven't followed up with 120 of them.
Richard Mashburn:Well, it's the same thing. The number one complaint consumer survey in the said industry is going to a lot. Nobody's there, I can't get any information. The same thing the number one complaint consumer survey in the said industry is going to a lot. Nobody's there, I can't get any information.
Richard Mashburn:The same thing is true of the online lead yeah you know, here at banks I know a lot of our customers. You know we get it in our reviews. I sent five inquiries to online ads and only one person answered me. Thank God for Chris at Banks Buildings, you know, and it was one of those. Yeah, you know and it's like why yeah? It's you know, none of us are making so much money. We have to stop and are so successful.
Shed Geek:We can't do anymore. It's not true. There was a time that was true. It's systems and processes.
Richard Mashburn:Yeah, it's just understanding that and, I think, finding people that have an expertise at it but also the ability to scale it I have. You know again, auto. You know BDMs. You know BDCs Car business uses that term all the time Anybody in the car business. You got a BDC. What's that?
Richard Mashburn:It's a business development center it's not a salesperson waiting on the next customer to come up front of the lot. It's people that are dedicated to interacting with the way that the majority of the customers are interacting with you first, before they ever show up and attempt to buy a car it is. I'm following up on social leads, I'm following up on emails, I'm following up on phone calls, I'm calling previous customers, I'm generating referrals. I'm doing all the hard work that makes it successful to fill that pipeline you just talked about and to keep it flowing. And then in the automobile business.
Richard Mashburn:They were even willing to then take that lead and hand it back to a salesperson, but take that lead and hand it back to a salesperson.
Richard Mashburn:But then some of the biggest and best ones were like yeah, but then they still don't do anything with it. You know it's.
Shed Geek:I come from a mindset of like the proof is in the pudding. If you get 100 leads and you say you know they weren't any good because we didn't close any of them, is it that the leads aren't any good or is it that you're struggling in your sales situation? Sure, you hate to call someone out just straight like that, but you kind of want to say again the proof is in the pudding. What if I just acquire those 100 leads and then I sell myself? What if I take the same 100 leads, not being given the advantage of reaching out to them five minutes after the CRM showed up that it was a 3D configurator submission or an email submission or Google Ads or wherever they came from, and I've got to call them back and it's a week old lead. What if it's the same hundred that you closed zero on? I can close 10 sales out. Is there proof now that maybe it's not?
Richard Mashburn:So, you're saying you want to tell some people that their emperor has no clothes on, that they didn't properly train their sales people, have them all bought and have an accountability process for making sure that they're following up on customers.
Shed Geek:We know that happens. We know it is the truth of the industry. It is human nature.
Richard Mashburn:It is the way it goes. But again, how you solve for it comes down to the willingness of the dealer.
Shed Geek:How you approach it, not even how you resolve it.
Richard Mashburn:I would rather hire somebody as a third-party, unemotional person that I can hire and fire at will based on their success rate, then I am willing to have the hard conversations with people that I brought in and it's, you know, my number two guy's cousin that just had a baby and they got here and I'm not going to let them go because it's two weeks before December, or Valentine's Day or Easter, or 4th of July or whatever, and I'm going to let them limp along.
Richard Mashburn:when I've got a contract employee sitting out there in a call center with anonymous face and you don't bring me 10 percent close rate, I'm going to fire you it's unemotional. If it works for me, it's a great solution.
Richard Mashburn:Well, if you're willing to put yourself out there and be that, uh, that center for somebody, that sales center for somebody, I don't know, I we're what I mean now everybody's got to ask herself, though, to our earlier conversation you're going to make them more successful, sell more, make them more efficient, probably generate lower costs, but you're going to do it at a cost of their entire sales staff. Is that right? That caveat?
Shed Geek:I like your question, but that caveat there at the end, though, was like at the cost of their entire sales process. I think we can admit that there are some very engaged dealers that do an amazing job, sure, whether in consignment or wholesale. I mean, there's some guys that are selling. You know, yesterday we talked to a guy selling $5 million a year. I mean, my goodness, you know you're getting it.
Richard Mashburn:I don't care who you are, you're getting it. You don't touch them, and some of them are so ingrained in their community you won't sell autonomously as effectively as they are. What you will find, though, is you'll sell to different people than they do.
Shed Geek:Well, especially newer generations that are choosing to shop the way that, to me the best strategy was always do both. Yeah, of course, and that's what we preach. That's the reason why I say the caveat you don't have to replace your dealer network, you will replace some, because you'll get rid of underperformers and things like that, and you'll find better ways and you'll create more efficiency.
Richard Mashburn:And again, that goes back to that whole. You're asking, you know, do people ask me about buy, sales and consulting?
Richard Mashburn:at the time I go, you know if you had five dealers, locations, and you open five more and you prove that those new five could perform just like your existing five and they're all successful. And you could give somebody a written roadmap that says, and you could do five more every 12 months and continue to grow at this scale, you just created a multiple of value of your company, you know. But when you sit down and go, you got no documented processes, you don't know how it and only three of your people are really that successful, you know. Again, it's that same math, we know. It's true in most companies. If you have 100 dealers, their top two are standout. The next nine are actually pretty good, but 80 of their sales are still coming from the top 10 or 12 out of the 100, and the rest of them you can do with or without, just based on whatever their circumstance is.
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Shed Geek:We should do this more. I've always told you anytime you want to run a podcast, I got my hand in the air to be your first place.
Richard Mashburn:Well then, I think there'd be some probably more controversial people than you and I coming on if I started. Some of my friends would probably be there, but you and I have talked about it. I find it interesting. I would love to bring some people that I know are in the industry, that maybe be outside the norm, that even are at a scale. An acquaintance of mine that runs one of the really, really, really big national companies and you'd find him interesting to talk to in his perspectives.
Shed Geek:I mean, he has it's really all about content, Richard. Whether you're in a magazine, whether you're doing a podcast, whether you're putting out something on YouTube which coexists as a podcast anymore, it's really about content. I think the biggest thing for us is that we have a brand that we built. We start, first and foremost, with a trusted brand. So, the reason why, like I always say, trusted brands because we're accountable. We're on here every week. If our audio doesn't match our video, something's wrong. If we're saying something different in the background than what we're talking about on the podcast. You know that that's going to. Are you applying?
Shed Geek:I'm your Joe Rogan no, I mean, you know, I'm the once a year you come interview the one guy that talks about all the stuff you do allow certain freedom in my speech, I have to admit, uh, but I would say, beyond being trustworthy and saying what we do, you know we have talked about the betterment of the industry as a whole, what we see as a betterment as a whole through the content that we generate. I mean, I encourage others to create content too, sure, and you know you're constantly creating content one way or the other, whether it's on social media. We just happen to record it, but the reality is I mean Print, emailed is great.
Richard Mashburn:I think you hold such a unique position. There is a voice to the industry, and I think that's a unique thing. Still, there's not a lot of voices to it and, like you said, even in the community, so many that call in and listen to the recording via a phone line, that's a unique position and I'm still a big believer in the idea of that same conversation. In our very first podcast I told somebody in a speech I was given, the saddest day in the community is when you see the last shed dealer close, because I still am a big believer that a shed dealer represents hope. Somebody owns something of value, or they bought something of value, or they're trying to better their life or improve the quality. It's a container of hopes and dreams to me and I think putting it out there and bettering the industry and challenging it to do more and evolve you know, Phil and I used to talk about it a lot and about you know the worst thing we could see is if the commercialized finance world came in and just took it entirely over, that it would lose that soul we were talking about and that spirit. And it's not just the personal belief systems, you know. It's the representation in a world of locally owned businesses that are invested in the community and the good of the community.
Richard Mashburn:A friend of both of ours, matthew.
Richard Mashburn:I watched his videos where they were giving away the bicycles and the things and you saw it just shed video after shed video after shed video of dealers and manufacturers being in their community and contributing and giving back, and you see that in all kinds of industries. But I feel like this one has that soul and heart to it and trying and giving back. And you see that in all kinds of industries. But I feel like this one has that soul and heart to it and trying to make that sustainable and I have been preaching this since 2017. It's the reason I was asked to come into this industry was there are some of us believe that it is an imminent threat. Private equity will change it if it controls it and if it ever gains scale where we are no longer at a small scale price competitive, it'll price us out of business and we'll be the you know well, we know that we could go aggressively, get more private equity money as opposed to bank money, to even grow and scale and become a major competitor in that space.
Shed Geek:I don't know that it's what any of us desire, at least over at shed geek. I don't.
Richard Mashburn:I don't know where we're still may not be wrong, feeling our way through your beliefs. Well, I think that's what the shed geek has given a voice to is open your mind to all the possibilities and make sure you're aware, just be aware you know, education through entertainment.
Shed Geek:That was the from day one, that was the thought was to. You know, and I've had people say well, if you're involved in any industry, you're skewing the education. And I'm like man, I couldn't disagree more literally everyone is invited. It would be different if I were skewing and saying this person doesn't get to play.
Richard Mashburn:And so many of the podcasts, and I think you and I, what we were implying is that people do stay just to their own true core story. Yeah, and those stories teach a lot Hardship and success, failure, overcoming personal, and it is education through entertainment. I think, though, every now and then, you check yourself and go. There's a few of us that just have a global scale view. Yeah, and we get beyond talking about just our own small world, and I think that's where, sometimes, people sit back and go. You know, we started out going, and I still find it interesting that people even care what I think, but I'm sitting here going. Sometimes it's called the willingness of just going. Let's talk about it all. Let's talk about it. Yeah, you know we can stick to just what we do, and it's interesting within the overlap.
Shed Geek:That's why we have such an array of guests. You know, sometimes people, especially people who tell me I don't really have much to say oh, they have some of the best stories. And so, it's not always talking about the levels of deafness, of rent-own world and acquisitions and all these other things. Sometimes we're talking about how did you get started? What's your experience been? What advice can you give to help others along the way? Not everything has to be. You know what I mean.
Richard Mashburn:It's a 12-step group. You want to hear somebody who's been in similar shoes to yours and how they manage Good, bad and indifferent. And it creates a commonality, and it gives us a shared interest and a shared passion and it reinforces that. You know I'm not the only crazy one sitting here, trying to do my. Quickbooks. You know it's my bane of existence, but you know it's
Shed Geek:Deanna can identify
Richard Mashburn:Yeah, I got the nod across the room.
Richard Mashburn:It is truly the bane of my existence right now. Of course, it's tax time and I'm on an accountant, so that's even worse. But yeah, there's so many pieces to it, but I'll give you a plug. You know you don't ever stop or give up because it has such a resonating. It's like anytime you call me and we're anywhere near each other. It's like we get back together and I enjoy the conversations. Sometimes I enjoy the after the air. It airs is the 15, 20 conversations I have the week after and it's like what are you doing? It's like you know, but it really is a good time to see it, but it's always entertaining to listen to. You know, um, how people see their world in comparison to yours, because that's what we all do. We look at it go. How does it compare to mine? Um, am I alone? Am I together? Um, am I right, am I wrong?
Shed Geek:well, assuming, assuming they want to call you um and reach out for advice, or um, they want to pay you to do something. You want me, you want me. Just give them my number, yeah, and I'll get them in contact with you.
Richard Mashburn:Just tell them to call you to do something you want me to. Just give them my number and I'll get them in contact with you. Just tell them to call you and you can call me. I'm easy to find. I'm actually all over the place, apparently, on LinkedIn and Facebook, and our website at Banks Buildings actually rings to me. There's so many ways, but I do find it interesting, and I enjoy the conversations. After my last podcast I hadn't even told you this A gentleman called me from Maine. I had no idea We'd never encountered each other. We're so far and he goes. You said something and I was just curious. Could I ask you and would you be willing to share? And I'm like well, I'm walking into something.
Richard Mashburn:But yeah, you know how about tomorrow at 10? And we talk for a good, really interesting conversation. Because his geographic market was just so you know, and I do know enough about it to know you know he's got about a five- month selling season. You know, it was just such a different thing, you know but you know he was picking my brain specifically about some technology things and doing some online stuff and changing his sales and he goes. I just wanted somebody to bounce the idea off of.
Richard Mashburn:And that's what I told you before we turned the recording on.
Richard Mashburn:I was glad you were here today, because I've got an idea floating around in my head and I was like I'm not sure who I can bounce this off of that I feel good about getting their response To me.
Shed Geek:I heard this yesterday and I've heard it previously A ripple creates a wave and there's so many waves that I do believe that's been created from people being willing to sit down and us just having the wherewithal to record it and put it out and be vulnerable Be vulnerable more than anything because this could have really blown up and been terrible, and I hope it hasn't been that for anybody. But, generally speaking, we still collect the same amount of listeners. People still seem to be engaged. There's a certain amount of the, the, the, the shed world that don't want anything to do with it and there's a certain amount that listen consistently without fail and, trust me, if we make a mistake, we know it, they tell us you know. And hey, keep telling us, we're fine with that. We want to be accountable.
Shed Geek:But if we misspell something or something you know, and hey, keep telling us, we're fine with that, we want to be accountable. But if we misspell something or something you know like we know that they're watching or they noticed, or the calls that we get as well that say, I just really appreciate that you put that out there because that guy's story or that, and I think more conversation should happen. But I agree with all the conversation here today too you, you have to. You have to be careful about how you walk with uh, too much emotional, like front side on everything you do in business, and it's a lesson I've had to learn along the way too, and I'm thankful that guys like you call me out on it from time to time. Uh, I think it's a good thing. I've never looked back at it and been like I'm upset because, uh, you, you sort of disciplined me in that area, in an area that, as I look back and have grown, I needed that.
Richard Mashburn:It's not wrong to have the emotion at the moment. It's the ability to set it aside before you make a final decision and make sure you're being rational, because the emotion can drive you to make a bad decision, even when you're staring at facts that scream something else, or pass on an opportunity, or do those things.
Shed Geek:That's a deep thought, even the facts that are obvious to you, yet you still go back to that comfort. I don't want to be in a battle, I don't like the problems and things like that, but they're necessary for you to grow. Any final thoughts? Just in general. We'll do more episodes. I'm always happy to have you on if you'll be on.
Richard Mashburn:But any just final thoughts for the industry I'm just waiting for the day you call me and go. I got more listeners to my podcast than Sam, so I can go to listen to Sam.
Shed Geek:He still has the most listened to episode yeah, he's still getting me.
Richard Mashburn:I'm like man, when's that gonna happen? I'm gonna have to do something really provocative. Well, I've started doing teaser episodes of it. Hey, Richard's coming. He's gonna say something really crazy. Yeah, no, no, I. I think from my perspective it's always great.
Richard Mashburn:You know, we had a show here in Greenville and it was good to see everybody. I do wish we could one day set the emotion aside and get back to in the car business. There was an experience and it's common in several industries. We called them 20 groups and it's where dealer manufacturers from all over the country of similar size and age or experience, but not in competing markets, would get together and honestly and openly share everything from their detailed financials to their operation processes and procedures in an effort to make everybody in the group better. And you got hard feedback and you got positive feedback and you got reinforcement.
Richard Mashburn:But it was a place, and you met once a quarter and in the car business you paid a huge fee to be a member of some of the better groups, because they brought a third-party arbiter in to manage the meeting, and they required you to do upfront work. You know, but having done those for a number of years, we came away with so much knowledge and improvement and actionable things. When you have to sit down there and defend why you've slipped 10% year over year in sales and 30% in your location and did nothing about it, and 20 of your peers or 19 of your peers are just looking at you shaking their head, going, you know what the answer is and they'll tell you Over a number of meetings you got to where you were so candid with each other that it wasn't emotional.
Richard Mashburn:It was truly given that feedback. And then I found in one group that we managed for almost five years together with most of the same core members. You almost got to the point. You were so desperate to get to the next meeting and go. I need to bounce this off everybody. What do you think? I want to do this? And it never failed. Somebody would go. I can help you with that. And you know what, if we do it at the same time and share the cost of it and you know and do these things, and man, we would make huge leaps forward and we weren't in competing markets.
Richard Mashburn:You know, I think if I had a thought, I think the Shed Geek is a pathway and I know there's been some attempts. You know the shed, you and some things that came through and different ways of trying to do some of that and it's just struggled to come off the ground. We talked about hosting it at RTO National and doing it with just dealers of the company or not dealers of the company. You know, I know the MBSRA tries and does it, but you know it's a membership thing. You know. But I still think there's an open SRA tries and does it, but it's a membership thing. But I still think there's an open forum that has a lot of value for the people that care enough to want to participate, because so many of the people call me. It's not about me charging you anything Most of the time I don't. It's about share something with me of equivalent value and I'm good.
Shed Geek:You're excited to start something like this. Well, we'll throw the Shed Geek stamp on it. Yeah, we'll do the Shed Geek.
Richard Mashburn:Consulting, or we'll do the Shed Geek Roundtable. We'll call it the Sheds of the Roundtable.
Shed Geek:Well, we won't go wrong if you're involved and all that. I appreciate your friendship. I certainly appreciate your business knowledge. You've helped me out tremendously. I've never, and certainly have never, gotten too big to not acknowledge folks in this industry who have led the path for us to even have an opportunity to be here Again. We just tried to be honest, be obedient to God and then put a microphone to conversations that were already happening all over the place. Some of the best podcasts you'll ever experience will never be recorded, unfortunately. You've got to involve yourself in networking and communication and we've just kind of been given that path and through that we've been blessed with these other opportunities that we've jumped into. But I have to steady myself every now and then and say, am I really the guy that wants to try to take over the world? Or, you know, can I find some level of contentment through that success of either financial success, influence, just being well-thought by the community?
Richard Mashburn:I mean sometimes that does a lot for your ego. I guess there's something to be said for saying I saw a lot of the world. A lot for your ego, I guess there's something to be said for saying I saw a lot of the world and the parts that I saw would say they were better off when I left than before I arrived. If I could do that, I'm okay.
Shed Geek:I always enjoy it, man. It's always food for thought, and I will go back and listen to this episode. I hope you get a bunch of calls.
Richard Mashburn:I hope a bunch of people want your help well, I hope I keep trying to make a successful business out of this.
Shed Geek:I hope you don't get distracted by calls either. Sometimes it's easier to have the answers than the actions, but no, it's been great.
Richard Mashburn:I enjoy meeting with you every time we do and hopefully we'll do it again soon yeah, well, I always look forward to it. Thanks for being on.