BiggerPockets Business Podcast

BiggerPockets Business Podcast 58: Elevating Your Business & Investments in 3 Words With Josh McCallen

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What differentiates good businesses from great businesses? What is that thing that keeps your customers coming back time after time? How do you ensure that your product or service really stands out from your competitors?

More times than not, it’s providing an amazing customer experience.

In fact, today’s guest has built his eight-figure business on this principle alone. And he tells us how we can do the same in our business.

Josh McCallen—entrepreneur, investor, and business owner—has built his reputation as a luxury resort developer. Over the past decade, he and his investment team have bought, renovated, and turned around several high-end resorts. His key to success is always the same: implementing a customer experience that is second to none.

On this episode, Josh tells us how he got started in both business and real estate, as well as when he first recognized the value—and necessity—of defining a world-class experience brand for his resorts. He also shares the three core values that rule over the experience he creates, how he implements those values in his business, and how you can do the same in yours.

And make sure you listen through the “Four More” segment at the end to learn about the biggest mistake Josh made (and many people make) when buying a business and how it led him to failure in his first business purchase.

Check him out, and subscribe to the BiggerPockets Business Podcast so you won’t miss our next show!

Click here to listen on Apple Podcast.

Read the Transcript Here

J Scott:
Welcome to the BiggerPockets Business Podcast, show number 58.

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Josh McCallen:
Don’t join the company unless you have these three core values because you’re going to hate it here. Three words, joy, humility and ministry. We say if those three core values sound attractive to you, please join us. You have a community of brothers and sisters here that we’re going to make this great.

J Scott:
Welcome to a real-world MBA from the School of Hard Knocks where entrepreneurs reveal what it really takes to make it. Whether you’re already in business or you’re on your way there. This show is for you. This is BiggerPockets Business.
How’s it going everybody? I am J Scott. I’m your co-host for the BiggerPockets Business Podcast, and I am here once again this week with my lovely co-host, Carol Scott. How’s it going today, Carol?

Carol Scott:
Well, listeners, it’s a hot and steamy 89 degrees here in Southwest Florida. Summer is clearly here to stay.

J Scott:
You’re working on your radio voice there?

Carol Scott:
Oh, my gosh. I think I’ve got a meteorologist/weather person wrapped up today. Tell you what though, it’s crazy, right? Memorial Day came and went and summer is here. And thank goodness, I love it.

J Scott:
Yes, it’s very nice weather out there, but let’s stop talking about the weather and start talking about more fun stuff. So the last several weeks on the show, we’ve talked a lot about buying businesses and how we as entrepreneurs can use the opportunity to buy businesses to really just grow our portfolio.
This week, we have an amazing guest. His name is Josh McCallen. Josh buys, renovates, turns around high-end resorts. And so, the reason Josh is on the show today actually is because a few months ago I happened to stay at one of his resorts and the experience absolutely blew me away. His team have absolutely mastered the customer experience. They’ve built a world-class culture, they’ve built a world-class brand that really engages their guests and not only their guests, but their employees as well, and really keeps people coming back for more. I was blown away. I knew at that time that I had to have Josh on the podcast to talk to him more about how he builds his culture, how he builds his brand and how he builds those experiences that are critical for any business.
In this episode, Josh tells us the three simple words that he uses to build his culture and how we can do that in any business, how you can and how you should be implementing the same principles to elevate your business and at the same time your bottom line. Amazing episode. If you want to learn more about Josh, if you want to learn more about his business, check out our show notes at biggerpockets.com/bizshow58. Again, that’s biggerpockets.com/bizshow58. Now, before we jump into this episode with Josh, let’s hear a quick word from our sponsor.
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Thanks so much to our awesome sponsor. Okay. Without any further ado, welcome Josh McCallen to the show.

Carol Scott:
Josh, welcome to the show. I have to tell you before we get started that a couple months back, J came back from an absolutely amazing experience at one of your resorts, and we could not be more thrilled to have you on this show. So, welcome.

Josh McCallen:
What a compliment coming from you guys. That’s a nice way to have the show start. Thank you, Carol.

Carol Scott:
Our pleasure.

J Scott:
I’ll tell you, a lot of our guests end up coming from our real-life experience. And so, a couple of months ago I was at one of your resorts, Renault Winery, up in New Jersey. We had a mastermind up there with Matt Faircloth. A lot of our listeners I’m sure are familiar with Matt Faircloth. And you hosted us and it absolutely blew my mind. And I knew at that point, we had to have you on and talk about what you’ve done, what you’re doing and some of your core hospitality principles that I’m sure we’ll dig in as we go through the show.
So thank you for being here.

Josh McCallen:
Super privileged to share this. It’s what we… Sometimes business all starts with a why, actually, hopefully for everybody, it starts with your deep, why. I’ve heard your story, Carol and J, I know yours all started with a why. This whole thing, everything I do, does really start with a heart for hospitality. And it’s funny how good that fits with business. So I’m super happy to share these principles because they do kind of work in all the businesses I’ve been a part of. I think they’ll work for anybody’s business.

J Scott:
That’s awesome. Okay. So in general, you buy distressed resorts as a business and-

Josh McCallen:
Correct.

J Scott:
Certainly there’s a real estate component here. I mean, you raise money and you buy real estate, but unlike a lot of people who are in the real estate side of this business, you’re in the business in the hospitality side of this business. So take us back. How did you get kind of to where you are now as somebody who buys and renovates hospitality businesses resorts?

Josh McCallen:
Okay. We’re going to have some fun here, Carol, you’ll love this. It actually goes back to… We’ll give it a little pitch here on the whole life story. I should not pitch a summary. Started off as a nice family, I’m sure. Sadly they break up. They little divorce there. But the biggest transition in our life was when my lovely mom at 28, was struck down with a stroke. Never worked again.
So we ended up growing up in kind of a desperate financial situation. And I remember being like eight years old, I’m in charge of the laundry and like dinner. And I’m watching this old house because there’s nobody in the house to fix anything. So I always say this old house taught me how to be a handyman. I’m a child of the 70s and 80s, and I always make a joke that Die Hard in 1985, taught me how to be a man. You know what I mean?
I remember watching Die Hard and sweating at 10 years old. I’m like, “I could kill someone right now to protect my family.” So those two things are kind of paramount to my little life story. And it’s just a scrapper story. Always kind of happy to work. So entrepreneurial since I was a little kid, selling cotton candy. I got a Christmas gift for cotton candy maker. It’s actually in the other room. Started selling that as a kid.
But fast forward, my dream was to do what this old house was doing, which is craftsmanship and architecture, but I had no path to that. So later in life, after a wonderful time working in Europe, I actually got to run a resort. Well, I had a functional role in the hotel component of a 700 year old property in the foothills of the Alps for four years.
Melanie and I lived a sound of music life, which was very formative for Melanie and I. It was when we were young, we had a couple of kids in Austria and we came back to America and we said, this was 2006, the boom is going on. We literally had raised money or saved money, lived very frugal. Even though we were in Europe, we just kind of lived the authentic native’s life, which is very get out in nature and kind of save money thing.
So when we came home, he had money. And I said, "Melanie…" I remember I studied that MBA and all that. "It's time to start a business or to get into real estate development." And she's like, "What! How are you going to do that? You've been in universities, you've been kind of like a hotel person, but you've never done real estate or anything." So I just started pitching business plans to developers. And I said, "I don't know how to be a real estate developer, I'm going to be a lender to real estate developers and get in the rooms with them and pitch business concepts, how to sell homes better. And I have a whole strategy how to do that and everything." And it was the boom days.
So developer after developer would take these meetings because my pitch was, “Hey, no cost. I’m going to come in and I’ll show you how we could sell more homes to more people more efficiently.” And I had this whole wonderful dissertation. I went to Wharton at night and gave my presentations there and learned how to do this. I wrote an MBA, business plan, everything was cool.
One developer said, “I’ll give you a shot.” And he put me right into building luxury homes. So even though I’m sitting there pitching how to sell, it was the boom days and there weren’t enough GCS. So I jumped right from learning how to sell a home, a luxury home, to there was just no time. Literally within a month, here we are sitting in there in suits and shirts, and we’re talking about how to sell things. He said, “I just need people helping build the things. And we have a pipeline of opportunity. Just get down there and help the builders.”
And literally, that’s 15, 20 years later from my dream of being like this old house guy. And I’m now, I’m a builder. And my first house, I’m like co-leading the construction. All of a sudden, was $6 million. And then my second house was for an NFL football player that was a sick $5 million, very affordable house. Then my third house was a $12 million house I got to work on. So yeah, I wasn’t the lead on all of them, one. I got to be a lead on one and my life changed. I started learning how to build and all those kinds of fun things.
But it was not until the recession that I really started becoming more of a business person. Lots of fun challenges that kind of led us to where we are today. But at the end of the recession, that same great developer who became a mentor of mine, said, "We have a hotel that is a dump. What would you do with it?" And he owned it. It was his. But I kind of was able to kick around a business plan. And we developed a business plan for restoration. And I called it my Michael Gerber moment, if you know Michael Gerber's book, E-Myth?

J Scott:
Absolutely.

Josh McCallen:
I said, “Here’s the deal.” And this is one of our principles we try to teach is if we’re going to do it, let’s do it as a franchise prototype. This is very J Scott of me. So if we’re going to fix up an asset that you bought, here’s the good news. I’ve really loved this gentlemen. He bought it pre-recession to tear it down and build condos. Well, the recession of ’08, destroyed the condo market on beaches. So forget that.
So now we owned a beachfront hotel that hadn’t been updated since 1974 and looked like crap, and we’re post-recession, and we’re still in that 2012. He said, “What would you do?” And we concocted a plan from scratch that talked about restoration of the building in order to transition its marketplace position and then to do that multiple times. Because we simply surveyed the world and said, “We’re in the Northeast of America, tons of wealth outside of New York, where we are, but terrible resorts.”
And so I said, “What if we could do a franchise prototype? We’ll use your first asset, we’ll build a prototype model and we’ll try to do this up and down all the way through Nantucket, Martha’s Vineyard.” We thought we’d be the gurus of resort restoration, turns out there was a big surprise there. Hospitality is not about buildings.
And so, that’s where I stopped becoming a real estate guy and started becoming a true business owner and a hospitality focused owner. Because you know this and I’ll give you a minute here to catch your breath, you know that when you go to a beautiful hotel, it takes your breath away, the smells and all those types of things, especially I’m picturing like some of my favorite down on South Beach, Miami. And I go into like the Fontainebleau and the fragrance catches my attention. I love the architecture. It’s modern, even though I’m more of a traditionals, but whatever. So I walk in, but if anybody were to be rude to me, just like they might be rude to you or whatever, I suddenly start disliking the place.
So here they are spending billion dollars on this beautiful building, but every single interaction can destroy it. And that’s what happened to us. Our first project that we pitched to the principal owner, and I just wrote this business plan with them and got it all built and we delivered it, and, boy, this is going to shock you, J. The first summer we opened, we handed the keys over to some third party management group, and the F word was a common expression at the front desk.
Because tough New Yorkers spending a lot of money on a night, if you don’t treat them great, if you don’t have the service protocols, they hate you. So we went from building the prettiest building in New Jersey that year to the F word was a common word. And I remember having this massive epiphany that it’s actually not the building, it’s the heart of the business that transforms whether people like a business, especially hospitality. And that’s when everything changed.
We started becoming like kind of students of organizational health for the staff and service as a culture. And so, that’s kind of transformed the rest of our life since 2012.

J Scott:
I absolutely love that. And so, some things I noticed in there that really like kind of resonated with me. Number one, I know a lot of people that want to get into business or get into real estate, they kind of have this idea that this is where I want to be. I want to do X. And to do X, my path has to be this and this and this, A, B, C, D till I get to X.
And you didn’t take that route. You kind of said, “I know I want to get into real estate, so I’m just going to start pitching developers.” And a developer didn’t say, “Great. I’m going to take money from you and we’re going to execute your plan.” A developer said, “I’m going to put you on the front lines of doing some new builds.” And instead of saying, “Nope, that’s not my plan. That’s not where I’m headed,” you said, “This is an opportunity.” And you seized that opportunity and you said, “I’m going to take it. I’m going to figure out how to use that opportunity to get to where I want to go,” as opposed to saying, “Nope, it’s not part of my plan.” You were flexible.

Josh McCallen:
Thank you. Yeah, that’s a good point. Actually, I never thought of it that way.

J Scott:
Yeah. And that flexibility, that willingness to say, “Okay, life didn’t throw me exactly what I wanted, but it threw me an opportunity.” You seize that opportunity just as enthusiastically as if it threw you the perfect opportunity that you were looking for. So one, I absolutely love that.
And then the other thing I love is you talk, you knew early on that you really wanted to do franchising and franchising of a model. And what you eventually realized was the franchising, you thought the franchising was the real estate part, but it turns out that the real estate part wasn't the franchising part, the real estate part was the culture and the systems and processes that make a great experience.
And that certainly, my experience at your Winery up in New Jersey, Renault, that really hit home. Like it was clear that you guys nailed that experience. It was all about experience. There was nobody using the F word there, it was just the opposite.
So let’s talk about this. So you realize that you build this, and I’m sorry that I’m kind of rambling here, but I’m excited because I love this. Because it’s the real estate, it’s the business, it’s the experience, it’s kind of like it’s everything that’s important in business. Okay. So you realize that you built this thing and you physically built it, you handed over the keys and the new management team basically-

Josh McCallen:
They struggled.

J Scott:
They struggled.

Josh McCallen:
They struggled. One of the other cool things, you and I… And Carol, the saddest part is that you didn’t get to join J when he came up to one of the resorts. And the whole time he was there, he was talking about you. He said how you would have wanted to have your wedding with us in the vineyards-

Carol Scott:
Totally.

Josh McCallen:
And I can’t wait until we have a spa some day soon, but not yet. We don’t have a spa, but we have all these wonderful… He kept saying, “I can’t believe Carol’s not here.” So we’ll get you back after this crazy time in the world right now.

Carol Scott:
Can’t wait. I am counting down the days, my friends.

Josh McCallen:
But you know what else happened, J? And we don't have to go into all these things because there's so much, the whole way that transition happened was we realized business is actually sometimes not what you think it is. So we thought it was pretty buildings sold at a higher price for room rentals, and we thought that was it. But in hospitality, it's kind of a microcosm of the economy. This is our new way of understanding life, is it's super personal and it's intimate. And therefore, the service part is hypersensitive.
Now, if you take our intense hypersensitivity to the personal experience that we've been building and you apply it to any company, franchising, fundraising, podcasting, it will transform and create an exponential leverage for you. So that's what we do. We're not just in hospitality anymore, we own a construction company now. Of course, we own a franchising company that we… We call the franchising company VIVÂMEE, but it's really our company that we will acquire 100 resorts with, but we run it as if it's a franchise to ourselves. Like Hilton or Marriott.
And I don’t want to go on, I want to let you guys pepper me with questions, but yeah I appreciate. The last thing I’ll say about that is, what we had to do is develop a turnaround skill. So when we, to go back to that first opportunity in 2012, where I was so grateful my mentor gave me the opportunity to build that business with them, the third party management company imploded because they couldn’t handle resort seasonality, to hold another speech I could give about the intense opportunity and destructive power of seasonal resorts.
Because you’re charging six, seven, $800 a night sometimes, and the expectations are four seasons. And you’re doing it with a staff that you hired three and a half weeks ago. How do you do that? That’s other worldly hard. We can talk all that some other time. But we ended up having to like develop our turnaround skills because every season we had to become a turnaround company. And that kind of got us ready for where we’re at in the economy today.

J Scott:
Okay.

Carol Scott:
Excellent.

J Scott:
So you get to where you realize this isn’t about real estate, this is about something different. And you saw that the first company that you handed over the keys to didn’t execute. What were your next steps? How did you get from there to where you are?

Josh McCallen:
Yeah. Okay. So we know grand solution, we’re normal humans. So at first we realized no matter what, we had to take this back over. What we did is we quickly assessed the situation. They were struggling even though they ran 30 other professional hotels. And you’re like, “How could they have 30 years and 30 hotels that they… Have all this experience.” They were struggling because of that turnaround problem. The seasonality is so intense that that’s not how their other resorts are.
I came to learn the whole industry. One, the fact that the Marriotts and the Hiltons run at 80 to 85% annual occupancy. Which means you don’t have very high turnover, you have great training programs, everything goes pretty smoothly. So if you’re the management company, you literally get a cushy job, right? Because the brands tell you how to run it. You just show up and collect a fee and do the bookkeeping. Well-

J Scott:
Set it and forget it.

Josh McCallen:
Set it and forget it, which is nice for the brands. Well, in our world, we get to have higher yield, we get higher opportunity, but we have higher operational challenges. And they did not account for that. So when they showed up, their staff literally, almost all, turned over within the first month. And they were trying to run a hotel at 30% of their staff level, guests are coming, we’re charging a lot because it’s brand new, and it imploded. And they were happy to leave because it’s just not their model.
So we ended up having to build that model. And that model is a challenging model. And it’s a deep model. We can talk about it sometime. But that was when we realized we have to do this ourself. And sometimes that happens. It’s not a commodity type of a skill, what we do. Which is this resort opportunity where we buy distressed high value, use the Warren Buffett method.
Well, if we’re going to get all that, we’re going to buy a distressed business, we’re really turnaround business people in hospitality. That’s kind of what we ended up having to build was a robust management strategy process philosophy. And we kind of crystallized that.

Carol Scott:
Excellent. So I’m so curious to know, it sounds like… Like you said, the staff was just up and gone, which probably turned out to be a good thing, I would suspect, because it gave you the opportunity to do what you needed to do and build this thing kind of from the ground up on hospitality service, customer experience level.
So two questions in there. One, how did you go about doing that? And I heard you mention, maybe four or five minutes back, I heard you mention VIVÂMEE.

Josh McCallen:
Yes.

Carol Scott:
We haven’t talked about that yet. And I think that’s a crucial part of your overall strategy, philosophy, outlook, and so on. So I’d love for you to incorporate what is VIVÂMEE and how did that play into you beginning to relaunch and grow this business how it needed to be grown?

Josh McCallen:
Thanks for asking. Melanie, my lovely wife, who you would just love, she’s a mother of 10, very heroic. She and I named our new company VIVÂMEE, which was a stylized French words, two words, that we learned for the last eight years. The two things we would have to do to build a massive hospitality brand is we’d have to buy distressed resorts and do a beautiful turnaround over the physical building. And then two, the second thing, we’d have to do a beautiful thing with the heart and soul of the business. So we found French words that mean, to revive the soul, VIVÂMEE, two words pushed together.
And so, we shoved the word soul right into the name. Now, of course, it’s in French, so that’s pretty, ame. And we said, “This is how we’re going to run the business.” Now we put all the chips in on the table and we said, “This is our calling in life. We do love architectural symmetry. And the piece that great design can bring to you.” And it really lifts you up. I hope J felt some of that. But we know that that’s never going to get you there. So we went just as heavy in the culture. And we use the name VIVÂMEE to be the culture. And we’ve turned it into a verb in our kind of our company and we say, “Now, here’s where you, listeners, are like me. You’re looking for an edge.”
VIVÂMEE using it as like a training device, it means three things to our team. We say, great news, and by the way, here’s a couple of strategies I use and our team uses. By the way, I’m part of a hundred person company. I’m not the only one who can do any of this. So we set a vision, we work on culture… inculturating the vision, and we let people help us. So we say, “Great news, no one can join the team unless you’ve shared these three core VIVÂMEE values.” And these values work in every business. They work really well in hospitality.
So if you’re an Airbnb’er, or if you’re in hospitality in any level, and you want to kind of supercharge your success, here are the three core values. We say, don’t join the company unless you have these three core values because you’re going to hate it here. Because we’re a dog with a bone and we’re never going to stop. Number one is three words, joy, humility, and ministry. That’s the three. Joy, humility and ministry. We say, if those three core values sound attractive to you, please join us. You have a community of brothers and sisters here that we’re going to make this great.
So I’ll describe what I mean by joy, humility, and ministry. These came to me over 12 years or eight years of running those resorts and going through turnover of 500 employees a year sometimes. On purpose because we’re seasonal, right? And we had to get training down to three words. And at that place, I use different words. Here we kind of got crystal clear.
Joy means you cannot be in this business, and I think any business, unless you share the joy of the product or service with the guest. You actually have to enjoy it. And this is obvious in hospitality. You and I have been to a bar once, right? We’ve been to a bar experience and the bartender loves their job. And they’re like 40. And they could probably be doing 16 other different careers, but they love it because this is in their heart. There it’s joy. They find joy in their work. We can only hire those people. That’s actually part of the trick.
Two, humility. So what we do upfront is we say, “Great news. Hospitality is humble.” Now in our business, it’s extremely humble. We clean toilets and make beds. We pick up trash. We say hi to guests and hold the doors. There’s nothing that an arrogant person can sink their teeth into. You must seek humility or else you’ll hate it here. It’ll rock your soul. And you’ve been to those experiences in hotels or hospitality, where they’re doing you a favor by getting you a cup of coffee, or they’re doing you a favor… That’s because their soul is like hurting, that they hate it so much. They [crosstalk 00:26:54]-

Carol Scott:
Their soul has been sucked out and they have no desire to be doing what they’re doing. Let’s be real.

Josh McCallen:
Exactly. And the other thing about humility that catches our attention is, I used to be that kind of intrepid entrepreneur that thought I could do things really well and hospitality broke me of that. Because it is so many people doing so many little things that you really can’t do it in hospitality. It can’t be a one woman show, a one man show.
So it broke me down that I had to be super humble. Like if you catch me use the word I in this conversation, please correct me. Because we only want to use the word we, when referring to the work we do. Because there’s a tremendous number of us doing everything I’m doing. It’s we’re doing this together. So humility is part of that is sharing the praise, sharing the struggles. So humility is core to our business principles.
And then the third is ministry. And this one took me six out of the eight years to get to. We had all kinds of different expressions for what I was trying to get at. And this is the one that’s meant to shock people. So if you’re driving down the road and you’re like, “What’s this guy talking about ministry in business? What the heck is he talking about?” This is meant to be a little irking.
And it came to us years later as we were… There were times where restaurant staff would quit. We’re in the busiest season, you got a whole bunch of New Yorkers, and I would step in and be the restaurant manager again, because we were trying to build a business and we didn’t have much overhead. So I’m sitting there on the floor talking to guests and I would watch out if we made a mistake with the cheeseburger or whatever and grandma’s party was ruined, the New York gentleman would be in my face, hating me. Or if the next night we had an incredible meal and a great dialogue with the same type of family, how I would get a hug from grandma afterwards and a kiss on the cheek, you know? And I’m like, “That’s amazing.” It’s just the same if we made one mistake with the cheeseburger. I get it, but this is more than just an economic transaction.
Something emotional is happening, especially in hospitality. But I think in all business. It’s personal. It is. It’s all things are personal, but hospitality is hypersensitive. And I can explain why, there’s a whole philosophy of why it’s so intense. But I came to realize that if we shoot for making the best cheeseburger, we may or may not get there. But if we shoot for loving a person for their good in and of itself, that we will transform the whole experience into something beautiful.
So yes, we’re very good at making cheeseburgers now. We’re very good at selling your beer and wine and all that great stuff, but you will feel our love when you’re in our building.

Carol Scott:
I can tell just by the way, Josh, that it shines through as you’re talking about it. And I’d like to note, J, I think you might know where I’m going with this. You may remember this. In complete contrast to this whole VIVÂMEE concept, to these three core VIVÂMEE values, J and I last year took the boys to a resort in Pennsylvania over spring break. Okay. And this is just reemphasizing why your approach is absolutely the right one.
The resort we went to was stunning. It was absolutely beautiful. It goes through these winding roads. We start going up the hill, the boys are like, “Oh my gosh, are we staying there?” It was absolutely drop dead gorgeous. We were in like a 1500 square foot suite with two bedrooms. I mean, it was just decked out phenomenal.
That said, every last person who was working there, frankly, just seemed completely miserable. They had no desire to… When you talk about someone acting like they’re doing you a favor to get you a cup of coffee, they act like I was just sticking a dagger through their heart. How dare you ask me for help on anything? And because of that, it was probably one of the worst experiences. And I could not wait to leave despite the fact that it was a great building.
And I think that’s a nice example of how your three core values, these VIVÂMEE values work in any business. If the product is the building itself, you can have the most gorgeous, awesome, beautiful, fantastic functional product. But from a service perspective, if you, as a business owner, if your employees, if all of your associates, the people that provide that customer experience to those clients and customers can’t do it with heart, can’t do it with soul, can’t do it with humility in a whole lot of joy, I don’t see any reason to go back to that company.

Josh McCallen:
Amazing.

Carol Scott:
Yeah, it’s just that VIVÂMEE, those core values, those principles, are so applicable in any type of business.

J Scott:
And I just want to piggyback on that because I think it’s easy for us to think, “Okay, great. So Josh has this potentially really high-end product, this resort,” certainly when we think of like there are others. Ritz-Carlton is known for having this kind of the super luxury service. And it’s real easy to fall into that trap of thinking, “Okay. Yeah. These high-end luxury brands, they have to have this to compete.” But it’s not just the high-end luxury brands.
If I think of other companies that have this, one that comes to mind is Southwest Airlines. It’s not the same thing obviously, we’re not paying real high luxury costs, but to a large degree, their staff has the same thing. They have the permission to do the right thing. They enjoy their job. They have fun. There’s a humility. They’re trying to make a personal, not just a transactional experience. A Chick-fil-A.
You can walk into a Chick-fil-A and spend literally $4, but you’re going to get that same humility, joy and personal connection as you do if you walk into Renault Winery, your winery, or the Ritz-Carlton. And so, it’s so important to emphasize that these three core values, it’s not just a luxury brand thing, and it’s not just a resort thing, it is any business. Any price point can implement these three things and can just absolutely change the experience that their customers have. And at the end of the day, elevate their brand.

Josh McCallen:
And from, by the way, thank you so much. And I’m hoping that you felt it when you were there. Because it’s not always going to be one thing. And I would say to all of us, business owners, this may not be your three core values, but perhaps you can get them down to one word. Perhaps you can search your heart and soul. Why are you doing this? We have a podcast that you were on J, and we always say, “Why are you doing this to our guests?” Because you’re doing something harder. Meaning if you’re an entrepreneur, if you own a business, it’s harder to do that than to get a job. And hopefully, you have rewards financially. Sometimes you don’t, you lose your money. But you must have a why, W-H-Y. Why are you doing this? And when you find your, why, I think you’ll find your three core values.
Now, for us we made it like bold. We put this word soul in there. And that came from me from like, remember, have you ever watched a, maybe even Titanic or something like that? And the ship captain say, “3,500 souls onboard”?

J Scott:
Yeah.

Josh McCallen:
And I remember thinking, “I always… ” Or ships. Airplanes sometimes say souls on board. And I thought that was interesting, it’s only boats and ships and planes that talk like that. So we want our hotels to feel like that. That people have infinite dignity and worth. And we’re not going to be perfect. As a matter of fact, we’re pretty good at apologizing. If we do mess up grandma’s cheeseburger, we own that right away. “Grandma, we are so apologetic here. Let me get another one. And by the way, there’s going to be this coming now. We’re super grateful you’re here. What can we do for you tomorrow?”
We apologize. And we don’t actually get there to be perfect at anything actually, but we’re really trying.

J Scott:
Yeah. And that whole apology thing, that’s the other thing that this reminds me of. If Carol does something like kicks me in the shin or something, and then some random guy on the street kicks me in the shin, I’m going to have two very different reactions. Carol and I have an emotional connection. And so, when she does it, it’s easy to say, “Okay, that was a mistake. It can be forgiven.” I’ll never think about it again. If some guy that I don’t have an emotional connection with comes and kicks me in the shins, I’m going to remember that forever.
And it was just like Carol was saying with this resort in Pennsylvania, we had one specific experience that was really, really bad. And had the rest of it been about joy, had the rest of it been about humility, had the rest of it been about ministry, I would not even remember that situation. But the whole thing felt transactional. And it felt like just a typical business transaction and they screwed up the business transaction. And so, I do remember it and Carol remembers it, and this resort is now not going to get our business again.
So it really is a, you do things right. You can make mistakes and you can recover from those mistakes.

Josh McCallen:
Yep. Yep. And that’s part of it. That’s part of that humility training we teach. The great news is we’re not even that woo-woo. You know, I’ve won a lot of shows and people were like, “Oh, this might sound woo-woo.” We’re not actually that woo-woo. We’re just saying the facts. If you embrace these three things, it will correlate. First of all, you’ll probably be more at peace doing your job and your peace will come through. Or, now this is another turnaround business strategy J, you’ll love this. Because I know you and I are very keen at teaching, and Carol, we’re all keen at teaching people how to buy businesses sometimes.
Sometimes you don’t have to start them. I personally buy them now. But, we, sorry. See, there you go. You’ve got to catch yourself. We, because I definitely don’t do any of this by myself. We buy businesses. And the first day we do this, J, we say, “Great.” Great news is just our way of presenting ourselves here. “We have a clear mission. We know the why of why we’re all here.” I mean, we, the people who just bought this business and you the 75 employees or whatever it was when we got into the last one.
“Great news, we can be clear with you and we want you here.” That’s like our opening speech. And we give an explanation why we want them here. “We’re going to share with you three core values and we’re not going to be able to change on those. So if those fit your heart and you love these three things, you’ve never found a better place to work. Because we’re not going to make it like work. It’s going to be enjoyable. It’s going to be dynamic. It’s going to be like we’re winning every day, like a team. But if you hate these, and I mean hate, if you even hate one of them, you’re going to hate it here. And it’s okay if you resign.”
And so, the first day I give my whole resignation speech and say, “It’s okay if you resign even if we work out a couple of weeks or a month, because if you resign now we’ll have great references for you, we will respect you, and you’re actually welcome back if you change your mind. But if we have to figure out how you hate it and you’re undermining it, then we got to ask you to go. But it’s better for you just to come forward.” And so, by being super clear with your teams, I think it can cut a lot of wasted politics out of your business.

Carol Scott:
Josh, absolutely love, love, love everything about this. And these core principles are so powerful. And I love the fact that you encourage people and not only give them permission to resign, but encourage them to resign right off the bat if they’re principles that aren’t going to work for them. So talk to us a little bit, if you would, about how the collective we in your company, right?

Josh McCallen:
That’s right.

Carol Scott:
Like you mentioned many times, it’s not you, it’s the we, how your team has used these principles in this VIVÂMEE concept and just everything about these core values to go about buying additional businesses.

Josh McCallen:
So thank you for giving me this platform because I want to thank everybody, especially my boy, Dan, Alicia, out there, Melanie, Kevin, all the great people that help us lead this. Let’s answer the question about how we buy businesses.
Okay. So do we imply the VIVÂMEE strategies to buy businesses? Well, we do. And I’m going to transition here and I hope everybody can hold onto the steering wheel as we make this tight turn. If our ultimate goal is to deliver 100 VIVÂMEE resorts over the course of 15 years, we’re going to be really a community of investors. So what we did is we took a deep breath after we had built that multi-year experience of building literally one of the top ranked resorts in the country and technically the world. And we had this wonderful success and we had this even better opportunity to reboot, create a brand new brand and do the exact same business model with VIVÂMEE.
But VIVÂMEE is operations. So we are a super robust operating company. However, accountable equity is actually the we that buys everything. So this was an epiphany, Carol, and this is why I tell all of us who are listening today, feel free to adapt and try to use these three core principles in whatever business you're in. Because when I went out and met with a wonderful friend of yours and ours, Matt Faircloth and Liz Faircloth, and learned how to build a syndication company and create a group of community investors, so they've taught me, they've actually joined my company with me, and that was the next evolution in my mind and heart is I definitely learned that these same three core principles translate to the world of creating an investment firm.
So instead of an investment firm, that is just, again, just the building, member of the building, ours is a heart. So yes, it’s a building too. Meaning we have to have a financial analyst, we have to have CFOs, we have to have an asset manager. We have all that. That’s the building, let’s call it. But we needed to know the why. So instead of just putting out deals and using numbers, which are very compelling, we slowly learned how to implement the same three core values in accountable equity. And to the point where accountable equity is its own mission. Meaning the name accountable equity is a mission for our investors.
And so, we have hundreds now of investors, billions of dollars. And they join us and we do learn and grow education. We have community events. And what we’re doing is we’re saying, “What if we apply the same three principles to a community of investors?” So that’s really what takes 90% of my time now, Carol. So I’m really excited because I get out there and I travel and speak and whatever, and it’s all about, how do we create a community where we’re adding multiple levels of value, we’re treating people with that same infinite dignity and worth, and we’re creating community? So that’s actually how we buy businesses.
Now, when we have find a target resort business, we… Let me think out loud for one minute. I don’t know if the first instinct of the first day of analysis is actually not whether or not they have the core values yet, it’s whether or not the core values will transition this business to greatness. Now, those three core values are complemented with like a whole myriad of turnaround expertise. And the core turnaround expertise that we’ve developed is sales. No surprise here. If you buy a business that is struggling, like we always do, and we buy them affordably, we buy them with really great intrinsic value, there is a sales problem.
There’s probably a physical problem, meaning the building might be ugly in this case, and there’s probably a hospitality problem, but there’s also a tremendous sales problem. So we start with a sales analysis, to be honest with you, and we basically just imply if we did the same sales process with the same mission and vision, would this business turn around? And once we get the answer, “Yes,” we go to the next step and make offers.

J Scott:
And so, what are you looking at to determine if the answer is going to be a yes or no? What are some of the questions that you’re asking?

Josh McCallen:
I have an answer. The question is this. Well, this is just good old fashioned. We just think, is the sales process broken right now? So we went into one of our recent projects, we’ll probably acquire here very soon, and they have, instead of what they need, which is three to four sales professionals with a process and a sequence, they have one. And now that tells you like, are they being frugal? Well, they had 1,200 inbound leads for selling. That’s impossible for one sales person.
In our business, in the resort business, these are the way we do our metrics. We build it around an alternative driver. So this is probably how I would buy any type of business. If they’re operating like even a loss, but there’s an alternative revenue source that’s sitting there and that they could just have, if they have that plus their stable revenue, now what’s the business worth? And is it worth doing this turnaround?
So for us it’s weddings. Yes, resorts have numerous things, golf courses, in our case, a historic winery, hotels, resorts. But in our case, we love to build models around predictable sales cycles. And weddings are our expertise. So in that scenario, we go and we figure out, how are they selling this alternative? And if they are ignoring it, we go… Wait a second, there’s a whole revenue stream that we can build out. And then we start the whole VIVÂMEE design team. Can we build this beautifully? Of course, we’re never going to do… Here’s the great news, J.
A couple of years ago, my wife and I decided we’re just not going to live our life without the three core values. We’re not perfect. I have 10 kids. Sadly, we do raise our voice here. We’re not perfect. But we’re going to try every day. We’re only going to do a business if we are going to implement those cultural values. And we have a whole strategy how we do it and the methodology and all that.
So we’re not going to buy that next resort unless VIVÂMEE hospitality goes in that culture. I hope that answers the question.

J Scott:
Yeah, and it really says to me, like the whole answer there says to me that yes, VIVÂMEE it’s core to the business, but at the end of the day, it’s still a business. And when you look at a business to buy, you’re still looking at the bottom line. You’re still looking what are those sources of revenue? What’s my revenue, what’s my expense, what’s my net income? And then presumably a multiple, and that tells you the value of your business.
So VIVÂMEE isn’t the business, VIVÂMEE is the product. VIVÂMEE is the thing you’re selling to impact your bottom line. And so, I think everybody has to look at it kind of as your culture, the way you treat your customers, your customer service, that’s part of your product and it’s like that in any business.

Carol Scott:
And I’d like to follow up and piggyback on that a little bit and talk about, as you develop again, these core competencies, these core values, it’s no worthy to think about, I would suspect there have to be at least some challenges, right? With the employees at these existing businesses sometimes. So I’m curious, similarly to how you talked about in this first turnaround, when you told people that if you’re not on board with all of these three principles, please leave now, no hard feelings and so on and so forth.
Do you find that to be a challenge when you go into these new businesses? Do you offer those same type of outs? How do you overcome that? Just how does that work?

Josh McCallen:
Yeah, without a doubt. Okay. So that’s great. We anticipate some challenges, so that we build that into the model. There’s going to be a takeover and a turnaround challenge. But I think everybody probably anticipates that in any distressed business.
We anticipate some people are going to get going, but we really are rooting for everyone. So we start using this analogy of a team, like an athletic team. And we say, “Guess what? I used to think it was a cheesy thing to say we’re all a team.” What do you call your colleagues? You call them a family, you call them a team, you call them colleagues, you call them associates. We had a mental shift about three years ago where my colleague was saying, “We should change the terminology from associates to team.” And I said, “Oh, man, that sounds like too cheesy.”
Well, then I woke up the next day, I was watching football or something, and I realized teams only have two choices every day. They get on a field and they get off the field as the winner or the loser, rarely are there ties. Let’s assume there’s no ties. So I thought, “Oh my gosh, that’s what team means, that we’re in this together to win.” So we shifted our whole mentality that we’re a team. That helped our managers realize that when someone hates it here or is struggling and is in the wrong seat at the wrong bus, they are actually going to jeopardize the whole team. And because we’re a turnaround entrepreneurial business, teams are not… It’s not IBM here. We are fighting for sales every day. As a matter of fact, the first thing we do as we take a turnaround is, back to sales, is we teach a principle called sales are sacred.
And it correlates back to the fact that we think we’re here to protect the souls, souls meaning like on a boat. These people need their jobs. The lady, Yadira, who runs our housekeeping needs us to be profitable. She needs her job and she’s great at it. So sales are sacred. It starts with us at the top and we deputize a team of salespeople. We then thank them. And we then teach Yadira, the cleaning team, whoever’s on the team, how to support the sales team.
So we end up reorienting the business around sales, but not sales as pre-Madonna or jerks. As a matter of fact, if they lack humility, they go. And we had a million dollar sales woman last year. I actually liked her a lot, but she notoriously would come back and kind of undercut the other people. And they actually asked her to go.
Now, a million dollars in the sales business and weddings in seven, eight months, when the property didn’t have the look that J Scott saw, it was all pictures on a piece of paper with open walls, is remarkable. She was probably one of the top sales people in the country and we asked her to go. So that allows us to be consistent.
We do anticipate turnaround challenges, but part of our proforma, back to J's point, does account for either losses and we fund them through capital syndicate, raising the money upfront for some short-term losses. So because we're a turnaround company, we anticipate challenges upfront before stabilization. Maybe that helps. Because we're going into it with our eyes wide open, we don't find it to be that disruptive to our business plan.

Carol Scott:
I love that. And I think that’s just such a great note for everybody out there listening is if you do have buying a business in your future, it’s well worth your while and absolutely critical to anticipate these turnaround challenges as part of your business. Perhaps like Josh said, make sure that you account for some short-term losses that are going to come as a part of that.
I also would like to note on a side note, there are so many things I want to note right now, but there are so many good things in here. I do find it so fascinating though, that just by changing that vernacular from associates to team, and like really pulling everybody into that analogy that you really, as a team, you come out as one of two things, a winner or a loser, that it really shifts everybody’s mentality and changes up the operations of your entire system by making sure that every single person on that team is pulling their weight appropriately.

Josh McCallen:
And not even maliciously, right?

Carol Scott:
Yeah. Sure.

Josh McCallen:
They may be struggling in the role they found themself in. And it allows our managers to always approach things with a certain amount of generosity to them. So when we find a person underperforming, it’s always a conversation. And all of our team who are listening to this you know this, we always say, we want to see if this is the right fit for you and we definitely do mean that. Because we meet every week as a full 100% team, and that’s how we build culture. And there’s all kinds of great technology… I’m sorry, techniques we use there. But we do bring up the fact that we’re jeopardizing the team and the business.
And I love how sales are sacred. Has kind of been like a little rallying call for our whole team. And we really do connect it. We have these great team members that are part of what is called a housemans crew. Which is they carry things around and do hard work. They need their job. And they recognize that without that sale, we don’t get to have their job become a 40 hour job.
See, in hospitality, people, they’re much more aware of sensitivity to revenue than in many other white collar businesses. And so, by allowing them to know that they can impact the team, which is 100% true, our housemen, which are guys that carry things around and have dollies and whatever, they all stop and greet every bride.
Now, brides are very important to us because we sell weddings into 18 months in the future, it stabilizes revenue. And they thank them. “Welcome. Congratulations.” And that’s what we say.

J Scott:
That’s awesome. Let me ask you a question. So we’re talking about culture, we’re talking about treating the customer the way you would treat family, and your staff certainly did that. But here’s a hard question for any business owner that wants to implement this. Every once in a while, you’re going to have those customers that you can’t make them happy. You’re going to have those customers that they’re going to be miserable. They’re going to detract from your business. They’re going to make the job difficult because they’re making a scene at the front desk or… How do you deal, or how do you train your staff to deal with those customers that aren’t good for your business?

Josh McCallen:
I’ll be humble and honest here. About eight years ago, I would have been there. Like the first two full years as the vice president and then ultimately the president of my first company with this, I was literally there a lot on the peak days. So I was able to do that. Over the years, I’ve decided, we’ve all decided, that it’s important to have specialists and strong, strong skills. So I always credit people like Kevin McCarthy. He’s really good at diffusing situations.
In hospitality, you have to approach everything. We use the old fashioned Dale Carnegie principle, where we try to see it from the eyes of the other, and then allow that to sink into our first reaction. And then we also in hospitality know that we are not their mom or their rule, we’re not the law, we are here for the greater good. So we do speak in terms of the greater good. The greater good of a person who’s smoking at the pool when it’s a no smoking resort, right? We say, “Miss or sir, we appreciate that you want to smoke. Great news, we did design a very beautiful garden over here for smoking. Here’s why we’re bringing this up. Our area is a no smoking area. And as you know, we promise that to all the other guests.” So we do speak in terms of the greater good that we’re serving. We try to diffuse things.
As they erupt, I will say this, J, we do not call our clients, customers, and we have the privilege of not calling anyone a customer since 2012, because when you’re in hospitality, you can only have a guest. Because once they enter the doors of your home environment, they can not be a client anymore, they have to be a guest. So we will not allow a guest to abuse us though and we’re not afraid to be firm. So it’s okay. Our team is empowered. We are not going to make the wrong moral choice and have our staff hurt because of a belligerent guest, no.

Carol Scott:
Excellent. Thanks for sharing that. And I think it’s another really great noteworthy point for anybody in any business. I think you mentioned Kevin McCarthy, who’s your rock star in diffusing these type of situations. And I would venture to say that pretty much anybody who owns a business, you can, and please disagree with me if you need to, Josh, I would challenge anybody to look inside their business. And even if it’s not the person you would necessarily expect for that type of skill to be their expertise, you probably have somebody somewhere in your company who is an absolute pro at just being the peacemaker. So I would encourage any business owner to figure out who that person is and perhaps give them that additional task to just smooth things over when necessary.

Josh McCallen:
I appreciate you saying that because I think you’re right. And as matter of fact, J and I were on the Capital Hacking show and he was talking about you, Carol, because you helped… He says, you were the driving force of the negotiation, the real estate negotiating book with BiggerPockets. Which I said, “Man, it takes a lot of guts to write a negotiation book and have it be a bestseller, because it means you’re like a guru at negotiating. So I want to get all this advice.” And he says, “Here’s the deal. My wife’s the guru. Too she says it starts with a relationship.” So I think that’s what you’re saying is there’s probably somebody in your team that knows how to relationally deal with issues.

Carol Scott:
You got it. And PS, I don’t know how much J is paying you, but thank you.

Josh McCallen:
Go back to episode 111. He was incredible, thanking you, Carol. So he loves you.

J Scott:
This is great. And I know that we’re in the process of buying another business. And every time we do this, every time we inherit employees, it’s kind of an ad-lib. You go in that first meeting with the employees to say, “Hey, we’re your new…” I don’t use the term family, but you want to kind of send that message, “We’re your new family and you’re coming to work for us now,” but I never really know what to say or how to position that. And it has given me a whole bunch to think about so that when we close on this business, probably about six weeks from now, I’m going to be prepared to have this discussion with, “Here’s our culture and here’s our values.”
And we hope everybody’s going to kind of be able to kind of glom behind that culture and those values. And I love the idea of, if you can’t, that’s okay. Let’s figure that out now as opposed to later when it’s hurting the business. And kind of putting people in that position where, “I’m not going to be mad at you if you need to leave, if you can’t do this, I’m not going to give you a bad reference, I’m not going to try and destroy your life, now’s the perfect time for us to determine, do we see eye to eye? If not, I’m going to make your transition as easy as possible, you’re going to make my transition as easy as possible, but if we decide to move forward, we’re moving forward with a unified front, a unified vision.” And so, my wheels are spinning for this first discussion with the new team we’re going to have.

Josh McCallen:
Yeah. It brings peace. And look, I think it’s self-evident. No one who’s buying the business really wants to hurt anyone. As a matter of fact, the irony of business, and this is why we love the beginning of your show, where it says, “This is the MBA from the life School of Hard Knocks,” right?

J Scott:
Yep.

Josh McCallen:
Which is really the only way to learn business. Even though I went to business school, the School of Hard Knocks teaches it. You guys, the fact is, is business owners can probably be painted as the enemy sometimes. But really I remember my first business, which I lost, I remember feeling like how it was a good epiphany, where we were the servants to the workers, which is fine. And that’s where the premise of being a servant leader and just changing the way I understood leadership.
Because when I lost that business, that first business that we became the owners, Melanie and I, and it was heartbreaking, it was a matter of weeks and weeks of me paying their wages and not making anything and losing and slipping further and further behind and realizing that they will never thank us for that, never, because they signed up for a job. We said we had a job. And we were slowly losing that first job. This was like 12 years ago. And we were really at their service as the service leader.
So once you kind of get your orientation right, I think you can handle these types of tough conversations with peace.

J Scott:
That’s awesome. We’re about to… point of the show where we talk about or we do what we refer to as the four more, where we ask you the same four questions that we ask each of our guests, and then give you an opportunity to tell us a little bit more about where our listeners can find out about you and your businesses.
Before we do that, I do want to give you an opportunity because we didn’t get to talk about it enough here. Tell us what’s next. So you have Renault Winery that I know is kind of in the process of being built out. Tell us about where you are there. And I know you have another project kind of coming online. Tell us about that.

Josh McCallen:
Yes. So thankfully, the group of investors are national now. And what we’ll probably do is we’ll shift to a full-scale company that does investments. So we will, instead of just doing one project at a time, we will graze a fund, a sizeable $25 million fund. And we’ll start this process. We think this turnaround in the economy or this stress in the economy is going to be ideal for our type of business.
So what is our type of business? Resort. Now, why resort? Real quick, it means many, many levels of revenue. That’s what a resort means if you’re a business analyst, whereas a hotel means beds sometimes no food. That means you only have one driver. It’s a great driver, it’s the most lucrative of all the drivers, but you have no way to control it other than what the economy is doing.
Resorts, for example, the weddings, which are actually going up during Corona, ironically at our market, has allowed us to sustain and be strong. So we’re a resort business operator. We know that the ones we buy, which are independent, they’re not the resorts owned by Marriott, are going to be in tremendous stress because they’re typically owned by a hobbyist.
So we buy them out of the hobbyist’s hands, grandma, grandpa, we turn them back into what we call four star model, really nice amenities, but not ritzy, ritzy, like really pleasant, beautiful. And then we implement our service. So we’re in a real buying mode. So that’s why we’re seeking our first aggregate fund. We’ll probably have a property. It’s not currently done. So we’ll talk about it next time, but we’ll probably have a deal soon.

J Scott:
Okay. Perfect. Perfect, perfect. Excellent. Okay. In that case, let us jump to the four more. I’m going to ask the first question, is that okay, Carol? I’m going to assume that she’s probably muted.

Carol Scott:
Yes. That is great. I am having in typical Carol fashion… What’s that word? Challenges-

J Scott:
Technological challenges.

Carol Scott:
Technological challenges with the mute, unmute button.

J Scott:
No problem.

Carol Scott:
[crosstalk 01:01:11], it’s a tough one. Go ahead, J.

J Scott:
Okay. So I’m going to ask the first question. Normally, the first question is, what was your first or your worst jobs and what lessons did you learn from it? But you mentioned that back when I met you or when we talked at Renault, you mentioned that you once, either thought about or you bought a franchise.

Josh McCallen:
I did, yeah.

J Scott:
Didn’t work out well. I want to hear about that. Tell us a little bit about that franchise that you bought and what lessons did you learn from that?

Josh McCallen:
Sure. So, because Carol and I talked earlier and we said, “This might go long, but we got to…” I want to answer all your questions, but I want to say good news is they did a whole article about it in a book called Don’t Quit. But it was, we bought a business during the recession of ’08, that was called HOODZ, H-O-O-D-Z. And we said to ourselves, “Well, it’s a terrible time to be outselling.” But if it’s government required purchases, which it’s a fire safety cleaning company, it cleans out restaurants, believe it or not, so our flaw was a couple.
We bought a franchise which was, I bought it on purpose to learn how to become a franchisor. It’s always my mind is to be prototyping, how to build this out. So I bought it, I made it clear to them why I was buying it, we bought it. And a couple accidental flaws in their model. That’s okay. But the biggest flaw was mine. I didn’t realize that selling S-A-L-E is actually the entire trick to business. And I thought operations and a great quality product and a phenomenal team was the way to build a business, and I blew it. For five months, I didn’t know how to sell. And about the six month mark, after we had invested all of our cash and I had to let everybody go, I became a salesman. And that changed my heart about sales. That’s when it became sacred to me. It was literally the lifeblood I became… I realized, and we pay him pretty good at it.
But at first we had so much losses that by the time we were picked up, I think we became in the second six months, one of the fastest growing franchise in America in the business, but that didn’t mean that I could pay back my back dues. And so, when they gave me an ultimatum, I literally handed the keys. So I lost my whole investment, a year’s worth of pay, because even though I started making money in the second half, I was catching up on my first month, six months dues, paying for their truck, but I loved it. I have to admit, I loved it.
We got kicked so hard in the gut that there’s a story in this book where Melanie is just so furious because she actually didn’t want me to buy this. So I begged her and I bought it. And she says, “She just hated it.” She was so mad at me and I looked at her, I said, “I feel like we’re in the middle of the movie, honey.” We were in the middle of the movie. Don’t worry. This is that part you need in the movie to get to the other side. So that was a big setback but a good one.

J Scott:
That’s a great lesson. A lot of people think you buy a franchise and it comes with customers. It comes with like a built-in marketing system that can’t fail. And what people don’t realize is, yeah, it comes with the systems, it comes with the processes, but that’s still the hardest part of any business, whether it’s a franchise or not, is that generating revenue.

Josh McCallen:
It does work if you sell. So that business would have worked if I would have had my head… I didn’t listen to podcasts back then, so I didn’t know how important sales were. They seemed like a part of the business, but when you are buying a business or building a business, sales, I’m sorry, is the whole story until later.

Carol Scott:
And you’ve said over and over and over, that now you operate with one of the core tenets that sales are sacred and maybe that’s one of the silver lining that came out of that experience.

Josh McCallen:
Absolutely.

Carol Scott:
Okay. I’m going to take the second question, but I’m going just completely off script here because I really need to ask this custom-tailored question, that’s custom-tailored just for you Josh. So a few times you have mentioned your beautiful wife, Melanie, and you’ve mentioned that you have 10 kids, which is absolutely awesome.

Josh McCallen:
Thank you buddy.

Carol Scott:
So I would love for you to share how you and Melanie are able to work together as business partners while you’re raising 10 kids. And really I’m giving you an opportunity here to just give a big old shout out to your amazing rock star wife.

Josh McCallen:
So, you know, she is a powerhouse, but she also doesn’t like any spotlight. So I’ve had her on stages, I’ve had her on all kinds of stages and podcasts, and it’s hilarious because she actually shines when I force it, but she’ll never take me up on the offer. So I sometimes sneak her into podcasts and things like that.
So she is… We’re 22 years married. It’s actually our children. Which if we would have adopted, that would have been beautiful too, but there are children and no twins. So this poor girl has been through the utter challenge of pregnancy that many times, I thank her all the time. Here’s how we do it. We have a 20 year old, and we have a whole team of support staff, on the team. We call it the bigs, the mids and the littles.
The bigs are like adults, man. As soon as you’re 14, you’re like… Our kids are pretty tall. They’re like five and a half, six, five feet, six. And then sometimes they’re six feet. I’m like, “You’re an adult woman now. You’re 14, but you’re an adult. Okay?” So we have several of those adults and they can do whatever they need to do.
And then the mids are pretty good too. I could leave the mids in charge and the littles are like a little huddle of ladies. They’re pretty tight little ladies. And then we just had this baby 10, 10th baby, who’s a boy. So we hadn’t had a boy in a long time.

J Scott:
And let me tell you something. So when I was up at Renault, a couple of months ago, Melanie was actually giving us a tour at nine and a half months pregnant. She thought she was going into labor. About two hours after the tour, we were in a conference room and she was like, “I need to leave.” So yeah, she was working hard. She was working hard.

Carol Scott:
Didn’t she have her birth story featured on something [crosstalk 01:07:10]?

Josh McCallen:
Yeah, yeah. So there’s this great group Last Life Ever and it’s… You probably know Jillian Sidoti.

J Scott:
I do.

Josh McCallen:
Okay. So she’s great. She wrote a book and Melanie was one of the features in it. It’s the Coronavirus collective for charity. And they featured her 10th baby story, which happened right in the middle of Coronavirus, as you know. So now, bottom line is she has a lot of skills that I don’t have, so it’s great. I never had her as a partner before, but we’re one of those families where like you guys, we talk, we invest together, we talk together. So she always knew how we were doing our business building. And so, now that she steps in, it’s an incredible feminine voice.
And I desperately know there’s a difference between the feminine genius and the guy idiocy. So we love having her in a lot of different meetings. It’s added a lot.

J Scott:
That’s awesome. Okay.

Carol Scott:
Awesome. Love it.

J Scott:
Question number three, we’re talking about a book there. I want to know what, so you mentioned the E-Myth obviously is one of the best books of all time for business owners. What other book can you say that you’ve really loved and this changed you?

Josh McCallen:
Please I am such an advocate of this book. And here it is on the video. It's the Dale Carnegie's book. And this is that book where sometimes you'll meet really powerful people and you'll say, "What book do you recommend?" And then they'll typically say, "Dale Carnegie." Now you can test if that's true for your life, but in my true, it was. But the book title is How to Win Friends and Influence People. And some people reference it. I have done like an exegesis on it because I think it's profoundly good. It's a hundred years old. So the title I think is cheesy, How to Win Friends and Influence People.
I always say, if we were writing this book today, we would call it How to Serve Others and Lead. Because it’s all about putting yourself in their shoes at all times and then serve through influence. It’s great. It’s absolutely fantastic.

Carol Scott:
Fantastic. And it is an awesome book. I could not agree with you more. Okay. So here’s our fourth and my favorite fun question, Josh. What is something that you have splurged on either at home or in your business life, along the way, that was totally worth it?

Josh McCallen:
Melanie and I debated what to tell you guys, because I said, “What are we buying these days?” She goes, “We don’t splurge.” I said, “I agree. We don’t.” We went to Colorado as an entire family, first time ever skiing, with GoBundance. And J knows tons of GoBundance people and Brandon Turner and all those great people, Joshua Dorkin, now.
And so, we brought them to family mastermind called FamBundance, and that was brutally expensive last year. So not this year, a year ago. Big splurge.

J Scott:
I find it funny, you say you don’t splurge. See, for us going to a high-end resort to splurging, you just buy those resorts.

Josh McCallen:
Yes. That’s the ultimate capital hack, right? Like you benefit from the things you’re doing for business. I love it.

J Scott:
There you go. There you go. Awesome. Well, this is fantastic. Let’s jump into the more part of the four more and that’s where you tell our listeners where they can find out more about Josh McCallen, more about Renault, more about accountable equity [crosstalk 01:10:18]-

Josh McCallen:
Well, that’s nice of you.

J Scott:
Anything you want to tell us.

Josh McCallen:
I’m not here to sell anything, I’m just so grateful to share. As a matter of fact, I would love for you, there’s ways for you guys to get involved on accountableequity.com. Just find out more about what we’re doing. And as a matter of fact, I even put up a page, accountableequity.com/bpbusiness, and we’re going to give away some gifts for people to come to the resorts. So that’s fun and that’s a way for you to get to know how our investor community and education program works.
And then there is something else. Episode 111 was the J Scott episode on capital hacking. Capitalhacking.com. A fun podcast. J was incredible and he distilled the keen opportunity right now in business acquisition, business buying for most people. Please check it out.

J Scott:
Awesome. Well, I appreciate that. Now, you’re pitching me on my own show. Thank you. I appreciate it. Josh, this was absolutely fantastic. Very excited about your upcoming project. Love to have you back in a year or so, and hear more about how that’s going and can disclose some of the details. Thank you so much for this. And this was just absolutely amazing.

Josh McCallen:
Thank you both.

Carol Scott:
You’re incredible, Josh. And say hi to Melanie and the bigs, mids, and littles for us, okay?

Josh McCallen:
You got it. See you.

J Scott:
Talk soon.

Josh McCallen:
Thank you so much.

Carol Scott:
Thank you.

J Scott:
Fantastic episode. I love the fact that you could tell with Josh, his entire life is all about experience and doing the right thing and focusing on others and serving. I mean, he lives those ideals of joy and ministry and humility in his everyday life.

Carol Scott:
Completely agree. And I’ve got to say, I just love too, the simple fact that those three principles that provide a high-end experience in a high-end resort are just 100% actionable and applicable in any type of business. So no matter what kind of business you’re running, no matter what kind of business you might be buying, acquiring, trying to grow, et cetera, it is just critical to have those types of measures in place that your team jumps on board and you can grow.

J Scott:
Yep. And like I said, in the interview, I am honestly going to be implementing that in the business that we’re buying in the near future and with our team and our employees. So anyway, I think we’re done here. We ready to wrap this one up?

Carol Scott:
Let’s wrap it up, baby.

J Scott:
Alrighty. Thank you everybody for tuning in. Have a wonderful beginning of June and leading into the summer, and we will talk to you soon. She’s Carol, I’m J.

Carol Scott:
Now go define and implement your core values throughout your businesses today.

J Scott:
Wow! That was a mouthful.

Carol Scott:
I know. That was super fancy.

J Scott:
Thanks everybody.

Carol Scott:
Have a great day.

J Scott:
See you.

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In This Episode We Cover:

  • His unique real estate strategy of lending and pitching to developers
  • How the recession helped him become an entrepreneur
  • How he developed a plan for a hotel restoration
  • How he focused on building a franchise prototype
  • How he coined the company’s core values
  • How he communicates their core values during the hiring process
  • How he created a syndication that is more than just about real estate
  • And SO much more!

Links from the Show

Books Mentioned in this Show:

Connect with Josh

What does it take to start, scale, and sell your own business? Every Tuesday, J and Carol Scott ask this question to entrepreneurs of all stripes and delve into stories that go beyond the launch. F...
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