Investor, author, and advisor, James Harold Webb was already selling potholders and newspapers, and offering lawn mowing services at 8 years old. Many years later, James left his job as a radiology technologist to start his own business that he even got his former boss as the first to invest. He was able to grow his company so massively that he has left a mark in the medical imaging space. James attributes a huge part of his success to the relationships he has built throughout his career.
In today’s discussion, James talks about the concept of allowing people in your company to have equity while still having control over it. James lays out the idea of giving financial independence to people within your company. It gives you the ability to create an organization where people are committed to helping you become successful because what they’re getting is beyond their W-2 paycheck.
Here are some power takeaways from today’s conversation:
- The value of relationships
- Understanding employee equity
- James’ definition of resilience
- The power of being decisive
- Overcoming self-doubt
- What contingency management looks like
- How James hires people
- Turning expenses into revenue streams
Episode Highlights:
[07:05] The Value of Relationships
Relationships are the single biggest key to entrepreneurial success. Relationships will define your ultimate objective and success. It’s not just relationships with your mentors, but also with your employees, your colleagues, and even your competitors. There’s nothing wrong with being competitive but you can also do that as a leader and still maintain all internal and external relationships.
[19:22] Understanding Employee Equity
The great thing about an LLC is you get control as a shareholder. James has set up a structure where he is the Class A shareholder and employees are able to get some equity – not equity fund, but equity. It means they get a stock certificate controlled by him. It’s different from a profit share. As an equity holder, they get the money that James gets. And when the company loses money, they also get the tax write off that James gets. And the way James set things up after 43 years of learning is having a vesting period as a B shareholder and an exit strategy as a C shareholder.
[22:43] What Resilience Means
There’s a lot of people that get knocked down and get back up, and then they get knocked down again and get back up. But resilience is not just about getting knocked down and getting back up. It’s about stopping, assessing, and finding another path.
[24:04] The Power of Being Decisive
Many people worry about being qualified to do something. Obviously, you need some knowledge and direction. But if you wait until you’re qualified, sometimes it’s too late. And so, if there’s something you want to do, then do it. You might get knocked down and you might have to get back up. But in that process, you’re going to learn a lot more. So don’t wait till you’re qualified, just jump!
[37:25] Turning Expenses into Revenue Streams
One of the business hacks you can do as an entrepreneur is to turn your expenses into revenue streams. For instance, James started their own service company and instead of paying people to service their equipment, they’re now servicing their own equipment as well as other people’s equipment. And so, it became a revenue stream for them instead of an expense.
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