LCT East Preview: Operators Doug Schwartz and Steve Qua will host a roundtable session to prep you for 2019 and beyond.
These mementos remind anyone in the room that entrepreneurship isn’t just about creating a successful company or being your own boss; it’s about the lives of your loved ones, employees, and the businesses you change along the way. But to reach that point, you have to make mistakes, learn hard lessons, and take responsibility for not only your actions, but those of your employees as well.
From Crafts And Candy To Credit Cards
Brodsly knew he wanted to work for himself as early as the second grade. He would go to school wearing a fanny pack full of lanyards he had made and started selling them to fellow classmates. In middle school, he upgraded to Atomic Fireballs and Warheads, and his eye for business grew as he did.
When he made it to high school, he became a part of the Moorpark Business Academy: A program geared towards young entrepreneurs. “I got to do a lot normal students my age didn’t, and it opened my eyes and ears to opportunities,” he says.
He admits his aggressive, Type A personality and unwillingness to take no for an answer play into his desire to lead, not follow.
Bumps In The Road
As many who follow the company on social media know, one key to Chosen Payments’ success is seeking out vertical markets and then becoming experts in those niche industries. Brodsly employs salespeople who focus on business development by finding merchants and cold calling them to determine how they could save them money.
They’re also trained to look for bigger opportunities; this is how they first learned of the chauffeured transportation industry. One of their new sales agents at the time called a local limousine company and asked a question that is standard procedure at Chosen: “Are you part of any groups or associations particular to your industry?” The operator mentioned the Greater California Livery Association (GCLA).
The salesperson saw an opportunity to attend a meeting and got his manager’s blessing. He spoke at a GCLA meeting and saw great ROI from doing so. While this helped Chosen break into the industry, it didn’t come without a downfall. Unbeknownst to Brodsly at the time, the now rogue employee made empty promises about what Chosen could do for industry clients.
“I found out what was going on with him before our clients did, terminated him, parted ways, and then got into a year and a half long litigation. I went to trial and sued him for various reasons, but even after he was ordered to cease and desist going after my clients, he refused,” Brodsly says.
After Brodsly won the case, he had to make some hard decisions. “We were already invested in this industry, but they only knew that salesperson. At that point they were thinking ‘this company may be a scam.’” As CEO, he had two choices: Run, lick his wounds, and move on with hopes the damage wasn’t too great, or take it upon himself to renew the company’s reputation. He, his assistant Sarah McKee, and a few other employees made it their mission to fix what had been broken.
Brodsly and his team showed up to their first International LCT Show in 2012, but did not receive a warm welcome. Instead of making a name for themselves, they had to do damage control. “As the owner, I couldn’t blame the salesperson; I had to take responsibility. I sat down with many of the operators who had concerns and made peace. Now, I’m really good friends with them,” he says.
Team Of Chosen Ones
The mantra that best describes Chosen’s company culture is work hard, play hard, Brodsly says. “We don’t want to micromanage anyone; we just want everyone to do their job to the best of their abilities. If they do something wrong, they’re going to hear it hard because we’re in the service business to manage people’s money. There’s little room for error, and if you do make one, you have to take care of it right.”
Brodsly considers Chosen a luxury brand and wants his employees to treat their clients as such. “By creating a culture where we hold our team to high expectations but don’t babysit them and let them be the master of their own destiny, that feeds into the service level we provide the client. I don’t want anyone who comes here to clock in and clock out. They won’t last because we won’t want them and they won’t want to be here.”
When To Step Up And When To Step Back
While you should take pride in what you do, you should admit when you lack certain skills. Understanding and accepting this is what made Brodsly realize he is not the best manager. “My expectations are too high, and I want things done a particular way. When it comes to business, I’m a perfectionist and don’t give people enough room for error, which is not a fair management style. I come down too hard on people because it’s how I treat myself,” he admits.
He recently restructured Chosen to allow his top managers to handle matters in a more balanced way. “They check in with me, and they ask for my opinion, input, and approval, but I don’t have to manage them. It’s definitely a weakness of mine. I realized that, so I hired people much better at that than I am. I now have other people in the organization who are more empathetic and carry out the vision of not just one way to get to the goal line.”
Scaling while staying focused on what really matters has been the company’s greatest success, Brodsly says. Instead of becoming too big for their own good, they’ve focused on keeping the balance between creating more products and services that help clients succeed while not growing too fast where customer support suffers.
“It’s like when you call a major cable company and they put you on hold for an hour and a half. At that point, you don’t even want cable anymore,” he jokes. “They sacrifice good customer service for growth. So I think our biggest success is staying true to our values while growing steadily.”
A very low percentage of startups actually survive and grow into sustainable businesses; Chosen Payments has not only stayed afloat, but grown every year since its inception. It was recently recognized as number 800 on the Inc. 5000 list, a catalogue of the fastest-growing private firms in America.
Don’t Hire Friends
It’s often said it’s not a good idea to mix business and pleasure; this is a lesson Brodsly learned the hard way. “When I started the company, I brought in three of my best friends. One was in charge of finance, one was in charge of operations, and one was in charge of sales. They’re all smart, savvy people, and for a while it seemed to be working out. But there came a point where it just bred an unhealthy personal and professional atmosphere,” he admits.
“I lost respect for them when I felt they stopped working hard. I felt they took advantage of the situation. I’m amicable with two of the three of them today as I did the right thing in the unwinding process, but I’ll be honest and say the lesson learned was it was my fault. I allowed them to become entitled. I thought I could structure the company to where I owned it and could treat them like partners, but I expected them to act like partners in return.”
Solving the issue was one of the hardest decisions he’s made so far. After a lot of self-reflection and advice from mentors, he parted ways with all three of them. “They were in my wedding, and one of them has been my best friend since fourth grade. We built the company from the ground up together. Eventually, they stopped helping me grow but were still profiting from the work of everyone else. I cleaned house, was willing to risk my friendships, and recruited replacements who have now been the biggest blessing in disguise I could ever imagine, and have taken my company to the next level.”
Different Industries, Universal Advice
The motto of Chosen Payments is “your partner in success.” Brodsly believes when his clients succeed, he succeeds, so he wants to impart some advice on doing that.
Scaling properly is vital if a business hopes to survive and thrive. “So many limo companies are focused on how many cars they have or how many trips they do. To me, none of that matters. All that matters is bottom line revenue. I’d rather own 40 vehicles and have an 18% profit margin netting me more money than own 140 vehicles and have a 12% profit margin netting me less with more headaches,” he says.
Ego must be set aside for a business owner to see clearly and lead in a way that will benefit the company and its customers. “It’s not any more or less attractive to be a bigger or smaller company. What’s most attractive is to be a company that has the greatest return on its investment.” You shouldn’t try to keep the same infrastructure as you grow and think everything will be fine, he adds. “I see this all the time through our other company, Chosen Technology Group. People want to know why their servers or phones are not operating as they used to. When they first started with us, they were a 10 employee company, and now they’re using the same technology with 50 employees. My advice is to make sure you are scaling every aspect of your business.”
To grow, one must be the best at what they do. Instead of trying to be everything to everybody, pick what you’re good at and stick to it until it stops working. Always look for ways to evolve.
“If you are making money in the retail market, stick to it. Put money into retail marketing. Go do the wedding shows and go after the proms. If your customer service is built around retail, and you’re not struggling, why take a risk and try to be a bus or corporate company when you have no experience in those fields?”
“Most of my competition and peers freaked out. But I just said, ‘Okay, I’m not going to compete with Square. I’m going to adapt. I’m going to go after businesses that would never use Square.’ If anything, it brought credit card processing awareness to more people than ever before.”
A Daddy’s Duty
Faith, Brodsly’s 3-year-old daughter, is his world. While he is serious about business, it’s not unusual to find her sitting in his office watching a cartoon on TV or talking with a stuffed animal. She reminds him he’s not just responsible for taking care of his employees, but also serving as a role model to his only child.
He and his ex-wife are amicable. Faith isn’t with him every day, but he lives his life as if she is. “When I do have her, she knows Daddy works. At this age she’s learning that’s what allows her to have some of the finer things in life. I want to instill in her you get out of life what you put into it. As she grows, I will be strict with her; I’ll teach her how to fish, but I’m not going to fish for her. I will give her every possible tool to be successful, but I will not hand it to her. She will learn hard work pays off. She will learn you don’t take no for an answer, you can do anything you put your mind to, and you get furthest in business and in life
LCT East Preview: Operators Doug Schwartz and Steve Qua will host a roundtable session to prep you for 2019 and beyond.
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