Episode 2Episode 2
Rapidly growing your business depends on maintaining the proper mindset and serving a greater purpose.
In this episode of “Here We Grow,” we hear from seasoned entrepreneur and growth marketer Steve Cosgrove. Steve shares his inspiring journey and offers valuable insights for mission-driven servant leaders and growth marketers alike. Discover how a faith-based approach can drive transformation and maximize profits.
To learn more about the podcast and Marcia Barnes’ book Here We Grow: The Marketing Formula to 10x Your Business and Transform Your Future, visit https://mathbeforemarketing.com/podcast/.
Key Takeaways:
- Takeaway One: Embrace the opportunities that arise from job loss or revenue challenges.
- Takeaway Two: Success is within reach for anyone who believes they can achieve it.
- Takeaway Three: Believe in your abilities and the value you can bring to the world. Everything you need is already within you; you need to put the pieces together.
About Our Guest
Steve Cosgrove is the Founder and CEO of Cosgrove Partners.
Prior to founding Cosgrove Partners, Mr. Cosgrove worked in both public and private companies, co-founding and operating supplyFORCE.com, a B2B e-commerce business, leading the turn-around and sale of $175M Thrall Distribution, overseeing customer development at W.W. Grainger, and developing and managing others.
He is the author of more than a dozen articles on business topics and is a member of the Board of Directors for several private companies and non-profit organizations.
Steve and his wife, Cheryle, have been married for 35 years and have two adult children, Katie and Connor. He is very active in Christian humanitarian work in Indianapolis, Indiana; Tijuana, Mexico; and Johannesburg, South Africa. His work is focused on providing adequate low-cost housing and basic education for the hyper-poor.
Jump into the conversation:
[00:00:47] You are capable of more than you think.
[00:09:05] Trust is the key to strong relationships.
[00:16:08] It’s important to be selective about impactful businesses.
[00:21:32] Wicks Pies: vital to Winchester’s economy.
[00:36:07] Small communities depend on local job success.
Full Transcript
Marcia Barnes [00:00:00]:
You. Many people see the loss of a job or revenue as a problem that needs immediate remediation and miss the fact that they have just been given a push toward making new choices and embracing new opportunities. Although they might be difficult to see in the moment, they are there for you to seize and take advantage of the possibilities they offer. Everything you need is there in front of you. You just have to figure out how to put the pieces together. It may take more work, more learning, more trial and error, more changes. Then comes the hard part gathering the confidence to move forward without fear. Every person has something valuable trying to get out of their heart and into the world or marketplace.
Marcia Barnes [00:00:47]:
And you are a lot more capable than you think. I run a performance marketing agency that specializes in helping businesses be disruptive and attain sustainable transformational growth. Some of the clients I’ve worked with didn’t think they could grow their businesses or multiply their valuation by ten. Over the years, I’ve worked with marketers who thought their role wasn’t important or worthy enough to be on an executive team. Some felt they didn’t have the chops to build a glorious career, multiplying several businesses. All of these things were well within their grasp. The only thing standing in the way of their achievement of those goals was their belief that they couldn’t do it. I knew it was more than possible because that’s exactly what I have done for myself again and again throughout my life.
Here We Grow Narrator [00:01:45]:
This is Here We Grow, a show for growth minded leaders looking for transformational impact. Hosted by Marcia Barnes.
Marcia Barnes [00:01:57]:
Ten Xing.
Here We Grow Narrator [00:01:58]:
Your business begins with maintaining a growth mindset. In this episode of Here We Grow. We speak to Steve Cosgrove, entrepreneur and CEO of Cosgrove Partners. In their conversation, Steve and Marcia discuss how to help businesses achieve exponential growth and the lasting impact those businesses can make by cultivating an entrepreneurial spirit.
Marcia Barnes [00:02:22]:
Today I’m really happy to have my good friend Steve Cosgrove from Cosgrove Partners join me on our podcast. Welcome, Steve.
Steve Cosgrove [00:02:29]:
Hey, Marcia. It’s great to see you. Just honored to be here. Loved your book.
Marcia Barnes [00:02:33]:
Thank you.
Steve Cosgrove [00:02:34]:
Can’t wait to have this discussion.
Marcia Barnes [00:02:35]:
Yeah. You and I always have all these things that happen in our talks. The stories fly back and forth pretty quickly, and all of a sudden you’ll look up and hours have gone by. So I’m excited to introduce you to our audience today. Walk me through. You’ve just had this idyllic career that I just am always in awe of. Of not only what you’ve become and where you’ve worked, but the transformational results that you’ve been getting everywhere that you’ve stepped, that God’s been good about leading you to places that you can create abundance and transformation. If you could walk me through that journey, that would be great.
Steve Cosgrove [00:03:10]:
Sure. So I’m not the classically trained executive you find in a big business right I’m a fiercely independent guy who dropped out of college to start a printing business.
Marcia Barnes [00:03:22]:
Wow.
Steve Cosgrove [00:03:23]:
If my kids would have done that, I would have killed them, plain and simple. That was not an option. And the legacy of that is interesting because at the time, that seemed like the right thing to do. I was making more money than my parents combined.
Marcia Barnes [00:03:36]:
Wow.
Steve Cosgrove [00:03:36]:
And I had used my student loan to buy some printing equipment. Rather than paying for classes, I bought printing equipment and started printing T shirts and sweatshirts.
Marcia Barnes [00:03:44]:
Right.
Steve Cosgrove [00:03:44]:
So that entrepreneurial bug starts deep in my heart. But fast forward a few years. You’re out of college. I sold my first company, and I went to work for a mid sized family held business, about a billion dollar family held business in Detroit.
Marcia Barnes [00:03:59]:
Wow.
Steve Cosgrove [00:03:59]:
I had a great experience. I think I got promoted five times in four years, and suddenly I was a group president. But I was going to be forced to move to Detroit. And first of all, I had some inferiority issues. Right. Complete imposter syndrome issue associated with my educational credentials or the lack thereof. Right.
Marcia Barnes [00:04:18]:
And maybe even your background, too, because you didn’t come from wealth.
Steve Cosgrove [00:04:22]:
I grew up very modestly. My dad delivered newspapers. My mom worked in a second shift factory. My parents divorced when I was six, so she worked second shift. I largely raised my little brother as well.
Marcia Barnes [00:04:33]:
Right.
Steve Cosgrove [00:04:34]:
I didn’t grow up in that classic family that believe it to beaver family.
Marcia Barnes [00:04:38]:
Right.
Steve Cosgrove [00:04:39]:
Neither of my parents had a college experience, so I didn’t grow up with a college expectation. Neither of my parents had a deep faith tradition, so I didn’t grow up knowing Christ as I do today. Right. So I am a miracle in so many ways. But I think there are thousands of people just like me, maybe millions of people just like me here in Indiana. And then if you multiply that around the rest of the country and the rest of the world, I’ve learned that I’m more normal than not, that you don’t grow up. The things that you get in life are things you pursue. They’re not the things that your parents give you.
Steve Cosgrove [00:05:11]:
A legacy is lovely. Right. I wished I grew up with a rich tradition of Christian heritage. I wished I could go back and identify five generations of Christians in my family. I can’t do that. Some of my clients can. And it’s compelling in some ways. I also think that’s an advantage.
Marcia Barnes [00:05:28]:
Right.
Steve Cosgrove [00:05:28]:
Because it makes you feisty.
Marcia Barnes [00:05:30]:
Yeah. And you get to write the script. Right. Sometimes we’re handed down through the generations models of how to think and believe, whether it’s faith or business or politics. The parents are handing off, sometimes even forcing onto the child. This is what is truth. Right. So it sounds like you had an environment where truth could be revealed to you in a more authentic way.
Steve Cosgrove [00:05:53]:
Absolutely. I mean, in fairness, my mom was 16 when I was born. Right. So in some ways, we grew up together.
Marcia Barnes [00:05:59]:
Right.
Steve Cosgrove [00:06:00]:
And she treated me like a little adult, I think, forever. I learned how to count playing poker with my grandma. Right. I’m actually really good at math, so Grandma did a heck of a job. But you’re right. I didn’t have some preconceived box that I had to fit in.
Marcia Barnes [00:06:14]:
Right.
Steve Cosgrove [00:06:15]:
I would say that my mom gave me a lot of confidence, as did my father. My dad’s still alive. My mom passed away a number of years ago. I often talk about her and saying, if my mom didn’t yell at you, she didn’t love you. Right.
Marcia Barnes [00:06:26]:
Nice.
Steve Cosgrove [00:06:26]:
Which was a way of giving you some encouragement. Sometimes it’s some rebuke, but the fact of the matter is that kind of perseverance. And what that taught me is you overcome bad news. Right. And you can persevere. So years later, here I am at a company called Detroit Ball Bearing. Really well thought of. My wife was pregnant with our first child, and I had to move to Detroit from Grand Rapids.
Steve Cosgrove [00:06:50]:
And I just thought, that’s not going to happen.
Marcia Barnes [00:06:51]:
Right.
Steve Cosgrove [00:06:52]:
I don’t want to live in Detroit. So I accepted a job with a big company called Grainger, a publicly traded firm. At the time, they were a couple of billion. I think they’re 16 billion now.
Marcia Barnes [00:07:02]:
They’re huge. Yes. All over the country.
Steve Cosgrove [00:07:04]:
Aren’t there maybe the world a global business? And I was fortunate to work my way through that organization rather rapidly. So I owned seven houses in the next five years. Each time I would move, I’d sign this two year deal, but I could get our teams to grow and grow rapidly.
Marcia Barnes [00:07:20]:
Wow.
Steve Cosgrove [00:07:20]:
Most of that was getting the people issues. Right. Getting our focus on serving our customers, finding people who had a work ethic, and then creating an environment where winning got rewarded handsomely.
Marcia Barnes [00:07:33]:
Nice.
Steve Cosgrove [00:07:34]:
So that resulted in me going into corporate again. Here I am, I’m a 32 year old guy without an education, and suddenly I’m an executive.
Marcia Barnes [00:07:44]:
Right.
Steve Cosgrove [00:07:44]:
My contemporaries are 15 or 20 years older than me. They’re all well educated. And at some point, I looked around the room and I thought, how in the world did I get here? Because I don’t fit, I’m too young, I’m not educated enough.
Marcia Barnes [00:07:58]:
Right.
Steve Cosgrove [00:07:58]:
But you’re getting results, and that’s what it proves to be. Right. When you can get results, when you can grow, when you can pour into people and allow them to grow, it’s amazing what happens.
Marcia Barnes [00:08:08]:
Right. So it sounds like in the environment, you were in an early stage in your career, you were getting results by going in and helping these teams reinvent and correcting the results there. I’m thinking if then you were going on to the next one and the next one and the next one, you’re also lifting up team members who got promoted in that. Right.
Steve Cosgrove [00:08:26]:
Well, so if you’re in a larger business, the only way you get promoted is to have someone that can take over your job.
Marcia Barnes [00:08:33]:
Right.
Steve Cosgrove [00:08:33]:
So my approach to leadership isn’t necessarily looking forward. It’s looking at my team and saying, how can I help you be your best.
Marcia Barnes [00:08:41]:
Right.
Steve Cosgrove [00:08:41]:
In doing that? And it’s kind of a fascinating reality. Right. So I had peers who were focused on burnishing their reputation. Right. They were always polished and perfect. You show up at a meeting and you’re like, man, that guy looks so good. I, on the other hand, was really focused on growing my team. Today, I think there are 16 CEOs in America who worked for me at one time.
Marcia Barnes [00:09:01]:
Oh, my goodness.
Steve Cosgrove [00:09:02]:
And I think that’s in large part because I poured into them.
Marcia Barnes [00:09:05]:
Right.
Steve Cosgrove [00:09:05]:
And it works. Right. It turns out that the most important currency in any relationship is trust. Right. So in getting to know people and I like to get to know people I love knowing you. Right. I love knowing all the funny stories about your life and what it was like to grow up in Myland and what it was like to have a farmer as a dad and what it’s like to have a mom where you have a slightly awkward relationship. I mean, I love all of that.
Steve Cosgrove [00:09:29]:
I think the real beauty in life is when you can get to know people, and trust proves to be the most important currency you can have. So if you want to grow really fast, people have to feel safe.
Marcia Barnes [00:09:39]:
Right? Yeah. That’s remarkable. Did you find that when you were helping those folks get into a better position and a better position not just at the time, but for their career. Right. How did that make you feel when you started to see that break loose for them?
Steve Cosgrove [00:09:54]:
Yeah, I think it’s the most important part of my life to some degree. My career path got me to a point that I retired early. So I retired at about 40. I took two years off, and I served. I ended up becoming chair of the board of a global missionary organization to build houses.
Marcia Barnes [00:10:12]:
Nice.
Steve Cosgrove [00:10:12]:
I like to help people.
Marcia Barnes [00:10:14]:
Right.
Steve Cosgrove [00:10:14]:
That’s when I’m at my best. I’m clear minded, I can be passionate, and it’s really fun. I drove my wife crazy, and she sent me back to work. I’m at my best in serving other people.
Marcia Barnes [00:10:26]:
Right.
Steve Cosgrove [00:10:26]:
I think that’s common among high growth companies.
Marcia Barnes [00:10:29]:
Yeah. I think we share that. If I’m spending a lot of time in something where I’m not seeing the ability to help move things forward, people results, impact, I get bored really easily.
Steve Cosgrove [00:10:41]:
100%.
Marcia Barnes [00:10:42]:
Yeah.
Steve Cosgrove [00:10:42]:
I have almost no patience for static to be static.
Marcia Barnes [00:10:46]:
Yeah. So now you have Cosgrove partners. You’re helping businesses get transformational outcomes. Tell me about the work you’re doing there.
Steve Cosgrove [00:10:55]:
Yeah. So let me take a step back.
Marcia Barnes [00:10:57]:
Sure.
Steve Cosgrove [00:10:58]:
After coming back from my retirement, I got involved. I started a consulting business in 2001 and immediately went to work for Big Coast. So I had Microsoft, Grainger, Home Depot. Some of the best brands in the world were hiring us to do some consulting work for them. And I found that business that work to be a little soulless. I wanted to identify with a family owned business owner. I wanted to work with companies who donated to their local community. I wanted to be engaged with businesses who paid taxes in Indiana, because I live in Indiana, I like small business.
Steve Cosgrove [00:11:33]:
After I left Grainger, I was CEO of a company that caused me to do a lot of acquisitions. I did 23 acquisitions in six years. During that time, you’re buying family businesses, right. I’d sit at a dining room table just like we’re sitting here, and I’d talk about their hopes and dreams. I’d talk about the legacy they wanted to create. And through that process, I’d get them to trust me and then I’d buy their business. I ultimately rolled those businesses together and I sold them to a publicly traded company in the UK. Most of the time.
Steve Cosgrove [00:12:02]:
When we acquired those businesses, we did pretty well. There were three out of the 23 that we really messed up.
Marcia Barnes [00:12:08]:
Right.
Steve Cosgrove [00:12:08]:
I got the culture wrong. I didn’t understand the people. I bought a business and I didn’t really understand what they did. There are nuances and acquisitions that are easy to miss, right. So fast forward a number of years, I’m out again working with large companies, and I could see the small sector, and I knew inherently that the skills that I had developed at BigCo would really help smaller companies thrive. I also knew that if you were going to sell your business, you need to be really careful in finding who’s going to buy it from you. If you have a cultural or a values misalignment, being acquired can be terrible. So I started cosgrove partners or I started directing Cosgrove partners toward the small to mid sized business sector and focused largely on companies that are in ownership transition.
Steve Cosgrove [00:12:52]:
So most of our clients, well, every business will sell eventually, right? So you’re a Steve Covey fan just like I am. Right? That one of his seven habits, was begin with the end and not mind.
Marcia Barnes [00:13:03]:
And there’s always an end.
Steve Cosgrove [00:13:04]:
And there is always an end. Our focus has been to talk about what that end looks like. Work with a family business or a privately held business, try to go back five years prior to that exit date and make sure that they’re going to exit successfully. We build most of our relationships built on the idea that you’re going to sell your business and you’re going to sell it to one of three constituents. You’re going to sell it to your family, the next generation, which I’m really passionate about. You’re going to sell it to your management team or you’re going to sell it to an investor.
Marcia Barnes [00:13:33]:
Right.
Steve Cosgrove [00:13:33]:
Those are the three options. I want to see any of those transactions work really well. It’s very complicated, righteous.
Marcia Barnes [00:13:48]:
And so sometimes you’re working to get that next generation ready. Right. What’s that like for the business?
Steve Cosgrove [00:13:55]:
Yeah. Honestly, I think that’s the most important and exciting part of my life. Right. I love young people. I love coaching. I love sharing the experiences that got me to the point where I am. So I am often, I’d say, 60% of our clients. I’m working with a 30 or 40 year old who’s about to take over a family business.
Marcia Barnes [00:14:18]:
Wow.
Steve Cosgrove [00:14:18]:
There’s a lot of weight on their shoulders. Right. They don’t want to screw up the family legacy. That’s problematic. In many cases, their parents are loaning them the money to buy the business.
Marcia Barnes [00:14:27]:
Right.
Steve Cosgrove [00:14:28]:
So if they fail, their siblings don’t get their inheritance. Right. So there’s a lot of pressure on this situation. In a vast majority of our experiences, we find passionate, engaged young people who want to win. We talk to them about what’s the cost of failing in this? What happens if you don’t grow? Because growth is essential. Right. You don’t transition a business just to stay static. You have more customers, you have more employees, you have more suppliers.
Steve Cosgrove [00:14:56]:
You have to grow to cause that to work. It’s the center of a lot of our discussions.
Marcia Barnes [00:15:00]:
Absolutely. That’s got to be amazing, fruitful work, too, for you, as far as watching that happen and helping those people unfold.
Steve Cosgrove [00:15:10]:
I work with a client in Colorado. I’ve worked with them for 13 years. It’s a third generation business. They manufacture lawn mowers. It’s called Walker mower.
Marcia Barnes [00:15:19]:
Okay.
Steve Cosgrove [00:15:19]:
The generosity of spirit in that group is hard to believe. Right. They are incredibly growth oriented. I think our business is three times what it was about eight years ago. Now our profitability is more than six times the profitability. Right. So not only have we grown the top line, we’ve grown the ROMs margin, and the company is more profitable. To go to that family and to see it flourish, to see the current CEO is 38, his brother’s 41.
Steve Cosgrove [00:15:48]:
They’ve got ten year olds.
Marcia Barnes [00:15:49]:
Wow.
Steve Cosgrove [00:15:50]:
You can see the future.
Marcia Barnes [00:15:51]:
Right.
Steve Cosgrove [00:15:51]:
It is so exciting to be part of something where you can see that there’s going to be generational growth, generational performance, and then the generosity that that enhanced profitability has allowed is amazing.
Marcia Barnes [00:16:03]:
Right.
Steve Cosgrove [00:16:03]:
They make a difference in the people’s lives who work with them, work for them, work next to them.
Marcia Barnes [00:16:08]:
Right? Absolutely. Let’s talk about that for a minute. Having known you for a while now, and I serve on a board with you at the Wildman Group and watching you do your thing there. Right. It’s not enough for you to just get results for a company. You spend your time in places that are hitting you at a very deep the whole you are very selective about who you’re going to get on board with, and it’s businesses who make an impact. So talk to me about why that’s important and maybe give us some examples of some of the things you’ve seen where the businesses are truly there to make an impact.
Steve Cosgrove [00:16:46]:
Sure. We definitely have the luxury of choosing our customers. Right. There aren’t that many people who have expertise in transitioning ownership from one generation to the next. Most people go to their accountant or their attorney, but they don’t understand operations. I like operations because that’s where the people are. That’s what makes operations exciting. So let’s talk about Wildman business group.
Steve Cosgrove [00:17:07]:
This is a company whose stated purpose is changing people’s lives. What a lovely idea.
Marcia Barnes [00:17:13]:
Right.
Steve Cosgrove [00:17:13]:
At first you’re like, that can’t be real. But if you got to know Josh Wildman, you would know that his heart for serving others, there is no bottom to it. It’s completely comprehensive. His ambition is to change the lives of his customers, of his suppliers, of his employees. Because of that, we are gracious. Right? Our employees are gracious. At our board meetings, as you all know. We talk about examples of our work.
Steve Cosgrove [00:17:42]:
I’ve seen truck drivers come in, people that drive trucks. These aren’t the most sophisticated employees we have. They come in and they start to weep. And they talk about helping someone who had a heart attack in a parking lot. And they have the freedom and the encouragement of their CEO to stop and help and do the right thing. That is so inspirational in that company. We are growing rapidly. The consequence of that kind of spirit and Brand has allowed us to do five very successful acquisitions.
Steve Cosgrove [00:18:10]:
We’re not out chasing these businesses. People come to us, they’re like, hey, look, I’ve been in this business for a long time. Our legacy is fantastic. I believe you’ll make it better. And that just lifts your spirit. Right. We take a large portion of our profit in the area of 20% of our profit and we give it away.
Marcia Barnes [00:18:28]:
Right. It’s just huge.
Steve Cosgrove [00:18:31]:
It’s just huge. When I first found out about that and I was on their board, I challenged the company to find out how we pay people.
Marcia Barnes [00:18:37]:
Right.
Steve Cosgrove [00:18:37]:
And there were some folks in the company who were being paid at a level that wouldn’t allow them to buy a home in the market they lived in. As we talked about that, we talked about our spirit of generosity. We immediately raised the wages so that anybody that works in our business can buy a house in the community they work in.
Marcia Barnes [00:18:54]:
Nice.
Steve Cosgrove [00:18:55]:
So it’s just another example of how they take growth and turn it into something that’s meaningful, right.
Marcia Barnes [00:19:01]:
That is knowing the Wildman’s the way that you do through I’ve been with Josh on the board at Truth at Work, knew the family and their involvement there for many years before I joined the board. They are so real in what they are saying. If it ever appears that there’s something that they’re doing that’s not changing lives, it’s because they’re not aware of it yet. Right. And so they’re very open to people even saying, how about this? Or what could we do about just it’s a very vulnerable, humble leadership type that you see at Wildman Group.
Steve Cosgrove [00:19:32]:
It is. And there’s a really interesting catalyst on the business side. If you want to give away a lot of money, the only way you can do that is grow.
Marcia Barnes [00:19:41]:
Right.
Steve Cosgrove [00:19:41]:
Our ability to continue to give money around the globe, give money in our community, make a difference in people’s lives, it’s predicated by the idea that we have to grow and we have to grow profitably.
Marcia Barnes [00:19:53]:
Right.
Steve Cosgrove [00:19:54]:
So I recently challenged the board to increase our margins. And the reason I want to increase our margins is I want to increase giving.
Marcia Barnes [00:20:01]:
Right.
Steve Cosgrove [00:20:02]:
It’s a lot easier for our sales force to go out and say, oh, there’s going to be a price increase. We’re going to service you, we’re going to earn it. But that price increase is easy for a salesperson. And you know how much salespeople don’t like price increases.
Marcia Barnes [00:20:14]:
Right.
Steve Cosgrove [00:20:15]:
Salespeople hate price increases. But when you have purpose behind that, when there’s a reason you need to raise that money, you can ask a lot more freely.
Marcia Barnes [00:20:23]:
Right.
Steve Cosgrove [00:20:23]:
It’s just so galvanizing to watch how that combination of generosity, the desire to change people’s lives and growth come into one cohesive strategy.
Marcia Barnes [00:20:33]:
Right. And it’s not a real cool or sexy business either. It’s very traditional. It’s a uniform laundry, right? A commercial laundry.
Steve Cosgrove [00:20:40]:
Yeah. I don’t even think about the business they’re in because they’re in the business of serving others.
Marcia Barnes [00:20:46]:
Right.
Steve Cosgrove [00:20:46]:
If you do that well, growth comes. Right? So, yeah, renting uniforms isn’t the coolest thing you can do.
Marcia Barnes [00:20:52]:
Right.
Steve Cosgrove [00:20:52]:
Selling PPE isn’t going to be the life of a party. But that’s not what we ever talk about. We talk about how people have bought homes, how they’re paying for educations, for their kids, how a tragic health care issue in your life can be met because we have the funds to do it. It’s the ability to love people well that that growth allows.
Marcia Barnes [00:21:12]:
Right. A business I find may be a little cooler than Wildman would be Wick’s Pies here in Winchester, Indiana. And you’ve served there as well in helping them migrate generational transfer of leadership as well.
Steve Cosgrove [00:21:25]:
Yeah, the leadership family is a cool family.
Marcia Barnes [00:21:27]:
Yes.
Steve Cosgrove [00:21:28]:
I am especially passionate about small business because of small towns.
Marcia Barnes [00:21:32]:
Right.
Steve Cosgrove [00:21:32]:
So if you go to Winchester, Indiana, and Wicks Pies is employing 60 people, that’s a town of 1201, 300. They’re a meaningful part of that population. They’re a meaningful part of the economy. The Wickerson family is absolutely committed to staying in business. And if you are in the restaurant industry and you have to stay in business during COVID it’s expensive. If you produce pies that are sold in restaurants. It’s demanding, but they persevered because it’s important, and that just lifts my spirits. Right.
Steve Cosgrove [00:22:05]:
So in today’s world, Dylan Wickersham is now president of the company. He’s running it. He’s taken it over from his dad his dad took it over from his father a few generations ago, and that business will continue. So they make sugar cream pie.
Marcia Barnes [00:22:20]:
If you haven’t tried it, do it.
Steve Cosgrove [00:22:21]:
If you haven’t tried it, you’re crazy. And I think I gained eight pounds while working with them. Yeah.
Marcia Barnes [00:22:26]:
That makes know when I was a child, my mother was raised near Winchester and union city, so we always drove through Winchester to visit my grandmother. So at a very young age, I got indoctrinated to Mrs. Wick’s pies. And so if we were sick from school for the day, we could pick whatever comfort food we wanted. And that was always my pick. So it explains a lot, but it’s a great product. I like to think I helped get them their start.
Steve Cosgrove [00:22:52]:
I think a lot of people want to think they gave them a start just because those pies are so darn good.
Marcia Barnes [00:22:56]:
Right. Another fun assignment that you’ve had is Jolly Time Popcorn, another highly known brand.
Steve Cosgrove [00:23:02]:
Yeah. The Smith family, who owns Jolly Time Popcorn have owned that business for five generations. Now. That’s a rare thing.
Marcia Barnes [00:23:09]:
Right.
Steve Cosgrove [00:23:09]:
I don’t know how much you know about ownership transitions, but only about a third of businesses transition effectively from one generation to the next. Right. For a company to be a third generation business, they’ve experienced 70% attrition through two ownership periods.
Marcia Barnes [00:23:24]:
Right.
Steve Cosgrove [00:23:24]:
So it’s 30% made it, 10% made it, 3% made it, 1% made it. Right. So a family that has made it to a fifth generation is a remarkable family. Jolly time is fun. In fact, they changed their street address to one fun way. Seriously, it is the coolest place to go. They inspired Bob hope and Danny Kay to be their sponsors. They’re in a tiny town in know, the only way you do that is belief.
Steve Cosgrove [00:23:54]:
You have to believe that you have something special, and they believe that so much that you have some of the most famous people in the world interested in this tiny company from Iowa. Now, if you’re like me, you enjoy popcorn. I eat Jolly time popcorn almost every night of the week. Again, it’s probably not contributing to the thinnest waist line, but it’s so fun and inspiring to go to that business. They employ 300 people in a town of 10,000. So if you’re not protecting those jobs, those jobs go away. And so the biggest passion in my life these days is how do you keep small businesses alive? It’s really terrible for a small business to go away, because even four or five jobs in a small town make a difference. And unfortunately, these transitions are complicated.
Steve Cosgrove [00:24:45]:
They’re expensive, and they need help. Right. So I’ve bought more than 30 companies, I’ve sold more than 50. So that process is kind of complicated. Most people never sell a business.
Marcia Barnes [00:24:57]:
Right.
Steve Cosgrove [00:24:58]:
Those that sell them sell one.
Marcia Barnes [00:24:59]:
Right.
Steve Cosgrove [00:25:00]:
It’s a really uncommon thing to have sold 50.
Marcia Barnes [00:25:02]:
And if you’re selling one, it’s being bought a lot of times by somebody who that’s their business is to buy businesses. They’ve done it dozens or hundreds of times. Righteous.
Steve Cosgrove [00:25:21]:
One of the things I tell sellers as we talk with them, I ask how many times you’ve sold a company? And they usually say never. This will be the first one. If I go and talk to the buy side, a private equity firm who I work with quite often, they might see 3500 deals a year right. As the seller. Candidly, you’re just not very prepared.
Marcia Barnes [00:25:42]:
Yeah, it’s David and Goliath.
Steve Cosgrove [00:25:44]:
Yeah, it is completely David and Goliath. And I’m always on David’s side.
Marcia Barnes [00:25:47]:
And you’ve got the five stones right. That can take Goliath down in a way right. That can negotiate that great deal. Now, from what I’ve seen in the marketplace, because I talk to a lot of multi generational businesses about helping with their marketing, and when I see them successfully handing off to more than one generation, when they’re on that second or third turn, it is always, always that someone has come alongside of them and helped them on that path. So it’s kind of the Mr. Miyagi to the Karate Kid, right. Or Obi Wan Kenobi to Luke Skywalker, that trusted guide, that’s kind of helping them down that path. And that’s your life’s work.
Marcia Barnes [00:26:26]:
Right?
Steve Cosgrove [00:26:27]:
It is.
Marcia Barnes [00:26:27]:
Right.
Steve Cosgrove [00:26:27]:
I shared earlier that I get in at 11:00 last night from a drive to Madison, Wisconsin. A really great family business. They’re in an incredible growth mode. I think they’ve grown 60% in the last two years. They’ve got a heck of a future in front of them. They’re thinking about exiting now. That exit is going to happen five years from now. They know that if they don’t take all the steps along the way, they’re not going to get there.
Marcia Barnes [00:26:51]:
Right.
Steve Cosgrove [00:26:51]:
And it’s interesting that you use the five stones analogy with David. Right. So at that time, that was high tech. A slingshot was about as high a tech a technology as you could have going into a battle. Right. So as much as we want to feel sorry for David, it was really Goliath that didn’t know what was going on. He was behind the times, his innovation was behind. Right.
Steve Cosgrove [00:27:12]:
So one of the things that we really push with small businesses, and particularly businesses in transition, because the current leadership team is probably approaching retirement, they often have taken their foot off the gas. Right. They’re not growing as fast as they have in the past. Digital transformation maybe isn’t as important to them as it is the next generation coming up. So we work really hard to keep that edge sharp. Right. We want David. To go out and beat Goliath.
Steve Cosgrove [00:27:39]:
He’s going to do that in today’s world with technology, with innovation, and with passion.
Marcia Barnes [00:27:44]:
Right. My kid’s dad, Mike, he had a lifelong dream of becoming a farmer. He and his dad. His dad had Parkinson’s disease, incidentally, just like I do, my father in law. So he needed Mike to help with the farm. And Mike was a great hog farmer. And the deal was, if Mike would do that until Joe could retire, then Mike would take over the farm in a favorable sale. Right.
Marcia Barnes [00:28:09]:
So you go eight years down the road and land prices start to rise. And so now the value on the ground that the farm has gets to going up pretty high, and a developer offers to buy the land and of course there’s excitement about that, but there’s this promise that’s been made. Right. And so Mike’s dad came to us and he said, I gave you my word. And Mike, if you really want to do it, we’re going to go down that path. But I also know that there’s a lot of risk in it and maybe you need to think about that too. And that night, we were discussing what Mike wanted to do and his thing that kept him from taking over the family farm. So just think of it as a business was Mike was really good at holding things together with duct tape and wire and binder twine and stuff.
Marcia Barnes [00:28:56]:
And the investments in the equipment and keeping the farm current had not been made. And so we were going to need to enter into a bunch of debt to be able to move the farm forward to that next generation. So you probably see a lot of that in these businesses.
Steve Cosgrove [00:29:10]:
You touched on two issues that I think are really salient. First of all, when a company is selling to the next generation and their family, they’re often selling for a discount as compared to what they would sell to a pure.
Marcia Barnes [00:29:21]:
Exactly.
Steve Cosgrove [00:29:22]:
And the reason they do that is some sense of loyalty. It’s also the recognition that the operating costs of that business can be too high if they have too much debt. So in order for Mike to pay off his dad, he wouldn’t have the cash flow to make those investments in the business. Otherwise you can’t buy new equipment if you’ve got to pay the kids and pay off dad.
Marcia Barnes [00:29:41]:
Right.
Steve Cosgrove [00:29:41]:
So it’s an interesting challenge. It’s a challenge that when you have enough time, you can plan for.
Marcia Barnes [00:29:46]:
Right.
Steve Cosgrove [00:29:46]:
When you don’t have enough time, it ends up limiting the options. More often than not, what I see is kids turn back to their parents and say, that’s not fair. It’s not fair for you to sell the business to me for a huge discount because it’s coming out of their mom and dad’s pocket.
Marcia Barnes [00:30:02]:
Right?
Steve Cosgrove [00:30:03]:
So it’s an interesting challenge. There are lots of ways to work around it, but candidly, the best goes right back to your business. If you take over a company that has $10 million in sales and you want to pay off the debt on that 10 million in revenue, that’s a problem. But if you’ve got $20 million in revenue, $30 million in revenue, that debt, as a proportion of sales goes down, right. So you have more free cash flow, and you can satisfy the requirements.
Marcia Barnes [00:30:28]:
Right. And that’s been one of the most joyful things I see in our work here at Valve and Meter is we have a lot of multi generational family businesses, and we have some that have sold to employees, right. And because we’re able to accelerate the growth rate, it really never feels like they’re paying anything for the business at all. The profits have climbed with the marketing improvement, and the debt load reduces. So that gives us a lot of joy, too. I want to shift gears a little bit because you’ve been talking about a lot of things that you’re very passionate about multigenerational family businesses, transformational results, equipping, people giving, and how that aligns with your faith based belief system, too, that we share. You and I had an interesting conversation a few weeks ago about business ownership and how American it is. We both had a relationship in different ways, but with Dr.
Marcia Barnes [00:31:23]:
Bill Haberley at Indiana University, mark Cuban’s favorite professor ever. And Haberley was all about creating forums and education opportunities, not just for students, but for businesses as well, to help promote entrepreneurial outcomes and share with our audience about why that’s just embedded in you at such a deep, deep level.
Steve Cosgrove [00:31:45]:
Yeah. So, first of know, we live in an interesting time. The wealth gap in America is profound. People are very frustrated with some of the largest companies, CEOs in the world who make millions, in some cases billions of dollars, while their employees don’t make much money. That’s incredibly frustrating. I get it. And the unfortunate reality of that is somehow entrepreneurship has gotten beat up in the process, right? So people think an entrepreneur is rich. In some cases, you become rich.
Steve Cosgrove [00:32:15]:
In fact, the pathway to wealth in the US. Is paved with entrepreneurship. Owning a small business, persevering, staying the course, managing your money is how wealth is created. It’s also how jobs are created. It’s also how little leagues are funded. Philanthropy is accomplished. Local taxes are paid. I personally feel very strongly about the idea that we want to keep small town ownership in small towns.
Steve Cosgrove [00:32:45]:
And let me give you an example why. So let’s say a big co from California buys a business here in Indiana. If sales are down, you know who gets laid off, right? The Indiana person. The hoosiers.
Marcia Barnes [00:32:57]:
Go.
Steve Cosgrove [00:32:57]:
Right. Corporate doesn’t lose a beat. Their generosity, if it exists, exists outside of our communities. Right. So I think it’s inherent on every city, every state, every mayor to work with local businesses, local investors, and help them cause that business to succeed into the future. I’m personally passionate about matching college students with new business opportunities. Right. So I’m currently working with three different universities to allow a young kid to experience entrepreneurship through small acquisition.
Steve Cosgrove [00:33:33]:
And I think that that’s one of the keys to allowing our small communities to continue to succeed righteous.
Marcia Barnes [00:33:47]:
90% of businesses that need to transition because the owner is retiring do not ever do a transaction. Right?
Steve Cosgrove [00:33:55]:
Yeah. It’s I think it’s kind of shocking.
Marcia Barnes [00:33:56]:
Yeah.
Steve Cosgrove [00:33:57]:
In fact, I had that discussion just a couple of days ago. Right. I sat down and chatted with this really bright guy who’s got a couple of kids that he thinks will be in the business. He’s got a really good team, and I shared that. About a 10% rate of success is what exists when it comes to selling a business. Right. 90% of the time, a business doesn’t transact. And he was stupefied.
Marcia Barnes [00:34:18]:
Right.
Steve Cosgrove [00:34:19]:
And then we started talking about the companies that he knew that tried to exit.
Marcia Barnes [00:34:23]:
Right.
Steve Cosgrove [00:34:23]:
Turns out the ratio was right on. He could think of 15 or so companies, and only one had successfully transitioned. Those issues are real. They’re typically steeped in two things. Have you prepared the next generation? Do they have the heart and the skills? So competency and character, and then do they have the finances to make it work? Right. So there’s a training lift that has to happen two, three, five years prior to exit if you want to be successful.
Marcia Barnes [00:34:50]:
Right. We’re in the middle of the silver tsunami. Right. All of the baby boomers will be exiting businesses and roles and getting these college students aligned. Where those opportunities will emerge is the way that we’ll be able to transition those into small town wealth, countywide wealth, statewide wealth. Here in Indiana. We don’t want to be a flyover state. Our students, as you said in our conversation you were talking about, our students are being taught in the colleges that the best weight of wealth is the Fortune 100, and they’re going to the coast to work instead of staying here.
Marcia Barnes [00:35:26]:
And our position is it’s not the best way.
Steve Cosgrove [00:35:30]:
Well, it’s not the best way. And I’m often fascinated by the fact that young people think working at a big business is the way to have career safety. I just think that’s so naive.
Marcia Barnes [00:35:40]:
Right.
Steve Cosgrove [00:35:41]:
I mean, if you want to have career safety, do a great job in a small to mid sized company.
Marcia Barnes [00:35:45]:
There you go.
Steve Cosgrove [00:35:46]:
You have a chance to promote. You’ll get much more exposure to ownership. You’ll grow skills much more quickly. You’re not a number either. Right. So if things are tough things have been tough in my business.
Marcia Barnes [00:35:58]:
Right.
Steve Cosgrove [00:35:58]:
I’ve gone a year or two without compensation. Right?
Marcia Barnes [00:36:01]:
Yeah.
Steve Cosgrove [00:36:02]:
The executives in a Fortune 100 don’t no, the shareholders don’t.
Marcia Barnes [00:36:05]:
They’re looking around for who to cut. Yeah.
Steve Cosgrove [00:36:07]:
Right. It’s the person who’s furthest from corporate that gets laid off or let go, and I just think it’s a shame. Right. The other thing that’s happening in America is, I guess, prior to COVID, we became really a coastal country. So many young people were going to the east coast or west coast. Our geography doesn’t really satisfy that. Right. I mean, most of the geography is in the middle, and if we don’t maintain jobs in those small communities in Warsaw, Indiana, in Greenwood, Indiana, in Duluth, Minnesota, if those companies don’t succeed, those small communities can’t be vibrant.
Steve Cosgrove [00:36:42]:
You lose the young people. The young smart kids have gone off, gotten an education. They really want to pursue something. They don’t come back to small towns if there’s not jobs.
Marcia Barnes [00:36:50]:
Right. Exactly. We both have this ideal of wanting to be involved in things that have a transformational outcome. Right. The redemptive stories, the stories of going from here to there. Tell me your favorite time that you’ve seen someone really make breakthroughs and get to a different level in a big way through transformation.
Steve Cosgrove [00:37:11]:
Yeah. I mean, I can think of dozens. I’m going to start at home. So I own a small business. Right. We’re a family business. I have a son and a daughter that work in our company. My daughter Katie, who you know and are kind enough to mentor.
Marcia Barnes [00:37:23]:
Yeah. She’s adorable and smart and exciting, and I learned more from her than she could ever learn from me.
Steve Cosgrove [00:37:29]:
So Katie studied psychology in school.
Marcia Barnes [00:37:32]:
Right.
Steve Cosgrove [00:37:32]:
She thought she was going to be a missionary. She thought she’d moved to South Africa and rescue girls from some terrible atrocities that happened around the world. Right. Instead, when she graduated, she said, I think I want to try business. I saw some relationships at Grainger, where I’d worked many years before that got her an interview. I didn’t get her a job. Katie moved to Denver, Colorado. She didn’t know a person.
Steve Cosgrove [00:37:54]:
She didn’t know anything about the industrial sector. She didn’t know anything about sales. She listened to her boss. She was really passionate. She’s kind, and she crushed her numbers. I think her goal was to sell a million dollars. She sold a little over 3 million.
Marcia Barnes [00:38:08]:
Wow.
Steve Cosgrove [00:38:08]:
Which is kind of a stunning number.
Marcia Barnes [00:38:10]:
But does it surprise.
Steve Cosgrove [00:38:13]:
You know, Katie will probably hear this, so I have to say it doesn’t surprise me, but it surprised me.
Marcia Barnes [00:38:18]:
Okay.
Steve Cosgrove [00:38:19]:
That territory had done $300,000 the prior year.
Marcia Barnes [00:38:21]:
Oh, goodness.
Steve Cosgrove [00:38:22]:
Right. So the idea that she had to triple to meet her goal, to me, was almost offensive. I thought, you’ve got some manager that’s not really paying.
Marcia Barnes [00:38:30]:
Yeah, that’s not realistic.
Steve Cosgrove [00:38:31]:
That’s not realistic. And then, of course, she triples the goal and gets the 3 million, and she got promoted.
Marcia Barnes [00:38:37]:
Right.
Steve Cosgrove [00:38:38]:
She went to Chicago for an interview, and the person that she was to interview with at Grainger for her promotion skipped out on the meeting.
Marcia Barnes [00:38:47]:
That’s what I do as somebody that gets ten times what we were getting before out of that market. I’d blow that off.
Steve Cosgrove [00:38:53]:
Sure. Right. I mean, it’s just, again, that’s big business. Right. So Katie had a friend from college who was in a small tech company in downtown Chicago, a healthcare technology company. So she had a few free hours, and she went to see her friend. While she was visiting her friend, the CEO came in and said, hey, I’ve heard nice things about you. The CEO is a 28 year old woman, and one thing leads to the next.
Steve Cosgrove [00:39:16]:
They offer Katie a job. So Katie was employee number 100 in this company, and she was an individual contributor as a salesperson. A year later, Katie was managing 35 salespeople.
Marcia Barnes [00:39:26]:
Right.
Steve Cosgrove [00:39:27]:
Two years after that, they had acquired their biggest competitor, and the company had a $10 billion valuation.
Marcia Barnes [00:39:33]:
Wow.
Steve Cosgrove [00:39:33]:
So in Katie, I saw a young woman who left college thinking, I studied psychology. I don’t know if I can be successful in business by having some success by persevering at Grainger. It’s a guy’s world. I mean, she’s calling on 50 year old maintenance dudes, and she’s young.
Marcia Barnes [00:39:51]:
She’s right out of college. Right.
Steve Cosgrove [00:39:52]:
23 years old. She just trusted that she could make friends.
Marcia Barnes [00:39:56]:
Right.
Steve Cosgrove [00:39:56]:
That I would say that was really her skill set. By gaining some confidence and having faith, she got a next opportunity and a next opportunity and next opportunity. And then when that opportunity at the medical technology firm came along, she crushed it. And the way she crushed it was pouring into her people. It’s the exact same methodology that you teach and I teach, and Katie knew that from growing up in her home.
Marcia Barnes [00:40:21]:
Right. That’s awesome.
Steve Cosgrove [00:40:22]:
It’s a stunning thing to watch.
Marcia Barnes [00:40:23]:
Yeah. And you got a lot more runway to watch. Her stories continue, right?
Steve Cosgrove [00:40:27]:
I sure hope I do. She’s 32 years old. She sits on the board of a private equity firm. This is a kid that studied psychology. Right. She perseveres so much, and she listens so well that it makes transformation available.
Marcia Barnes [00:40:41]:
Yeah. And she’s doing that for others too, which is exciting to watch as well. She’s going on a mission trip with me this fall. So I wouldn’t say that the going on being a missionary is out of the question.
Steve Cosgrove [00:40:57]:
I think that’s fair. Both of my kids grew had. By the time they were in junior high, we were in a position that we could afford to take some time off. And we spent a lot of summers either in Mexico or South Africa, building houses. When you took Katie last year, you rocked her back to her foundation. She came home, beat me up for a donation, and said, I’m going again.
Marcia Barnes [00:41:17]:
She didn’t even have to come home. She had you on the phone. But business is the biggest missionary mission field that we have in the world, and her call to missions is really being realized through what she’s doing today. And I’ve been blessed to be on the front row to watch that.
Steve Cosgrove [00:41:32]:
Yeah, it absolutely is. I mean, you generally spend more time at work than with anybody else in your life. You’re at work more than the time you’re with your spouse or with your kids or at your church. As an employer and as a leader, you have a chance to have a profound impact on the people that are working with you, and that choice is up to you. As a leader, I personally want to see people thrive in life. That makes me excited. And when I enable someone to have more career opportunity, it’s exciting for me to watch them grow wings and leave our business.
Marcia Barnes [00:42:05]:
Right.
Steve Cosgrove [00:42:05]:
It’s a little bit painful, and I miss them being there. But to see them take the skills that they grew while working closely with me and use them elsewhere is the most exciting thing that can happen. I think my legacy will be told by how many leaders are out there succeeding and following that same methodology. How do you pour into the next generation?
Marcia Barnes [00:42:27]:
Well said. And I’m sure that that’s happening everywhere around you. Steve, I appreciate Cosgrove’s been helping Valve and Meter with our strategic plan and helping us get to our next best version of ourselves. We’re excited here about the way you’re pouring into the development of our people and your thought leadership. I would encourage other businesses to reach out to you and have a conversation to what’s the best way for them to reach Cosgrove partners.
Steve Cosgrove [00:42:52]:
Yeah. I mean, like anybody else, our Internet presence is probably the most important. So you’d find us@Cosgrovepartners.com. My number is available. Katie’s number. Our president is an outside guy, Phil Daniels. If you don’t know Phil, phil wasn’t the 30 under 30, the 40 under 40. He’s a bright, passionate, faith filled leader who’s helping our business grow.
Steve Cosgrove [00:43:15]:
But we would be honored to work with anybody that’s listening to your podcast because I know the kind of people that listen to you and they care.
Marcia Barnes [00:43:24]:
They do.
Steve Cosgrove [00:43:25]:
And that’s really cool. And it’s a heck of an honor to be able to work with you and serve your team.
Marcia Barnes [00:43:30]:
Thank you. Thank you. Steve. Probably one additional way I would say I know Katie and Phil have good LinkedIn presence. I don’t know that I’ve looked at yours, but Steve Cosgrove, Katie Cosgrove or Phil Daniels on LinkedIn would be another good place to connect and keep an eye on what they’re doing at Cosgrove Partners.
Steve Cosgrove [00:43:47]:
I appreciate that commercial.
Marcia Barnes [00:43:49]:
Thanks so much for your time and for pouring into our audience. Let’s have some more transformation stories growing around us. Okay.
Steve Cosgrove [00:43:56]:
I think it’ll happen. It happens every day.
Marcia Barnes [00:43:58]:
Every day.
Steve Cosgrove [00:43:58]:
Thanks.
Here We Grow Narrator [00:44:00]:
Thank you for joining us. For here we grow. This show is proudly brought to you by Valve and Meter Performance Marketing. Be sure to check out the show notes for exclusive content that will help you become a transformational leader. For more, visit Mathbeformarketing.com/podcast.