5 Tips To Build An 8 Figure Distribution Company

Juan Guixens, Co-Founder and Owner of Guixens Food Group, and LaceUp Solutions first customer ever, stopped by the office last week. He was kind enough to join me on my podcast where he dropped some serious business knowledge, sharing the details to how he founded and grew his ethnic food distribution company in the nation-wide behemoth that exists today. Below are the top 5 tips I gathered from the interview that you can use right now to scale your distribution business to 8 figures.

Use Your Best-Selling Product To Create Spin-Off Products

Guixens Foods best-selling product is their Madame Gougousse jasmine rice. With the success of this product, Juan was compelled to learn everything about the Caribbean demographic. He learned that they had a refined taste for some very niche products, but that a flagship brand that they trusted didn’t yet exist. Madame Gougousse's jasmine rice was well known, and available in all the stores where this demographic was already shopping. It was a match made in heaven! Guixens went on to develop Madame Gougousse green pigeon peas, tomato paste, olive oil, vinegar, seasoning, lemon juice, and coconut milk, amongst other products. All in all, the Madame Gougousse brand now has over 25 products and generates a big chunk of revenue for Guixens Food Group.

If You Want To Scale, Offer Equity

As Guixens’ success in Miami grew, they soon discovered an opportunity to scale out the business. In the summer of 1998, Juan’s brother, Manny, opened their second location in Tampa, Florida. The two brothers hoped the expansion would aid in better serving their customers in the area. It also had the added benefit of meeting the needs of multiple suppliers who requested they make the move. This Tampa location would serve as Guixens first bit of proof that scaling the business nationwide was a possibility. The next challenge would be finding good, motivated people to run the location.

Guixens needed to find a third partner with similar work ethic and a desire to succeed. Instead of offering a big salary, compensation would have to be driven by profit. Equity would be the only answer to scale out the business. Juan says in the interview, “Our partner had to have an incentive to win. They would have to feel in their pockets when things were going wrong, and they’d have to be incentivized to put in the 12-14 hour days.” There was no way to scale the business without incentivizing their business partners with equity. This strategy was used when finding partners to open up the next two locations in New Jersey and in Atlanta.

Everyone Needs a Piece of The Pie

Most entrepreneurs expect their employees to be care about the business as they would; yet they don’t provide the necessary incentive. Juan says, “You have to offer every person in the company a piece of the pie.” A pie is when a company takes a percentage of their profits and redistributes it back to the employees as a commission. Ultimately, you are incentivizing the employees to work hard, to care about their role, and to shoot for optimum levels of productivity in order to earn additional income. If the employee doesn’t perform, they don’t earn their slice of the pie. If the employee excels, you give them their share! You can assign a share of the pie to any job in your company and to every single worker. To create a share, you must record the employee’s normal output which will be used as a baseline to set an initial target. For example, let’s say that the employee meets the target. They would get 25% of their share. If the employee exceeds the goal by 20%, they would get 50% of their share. If the employee exceeds the goal by 30%, they would get 100% of their share. Lastly, if the employee fails to reach any target, they get nothing. This pie will keep the lowest performers above the baseline, and the highest performers hunting for the highest level. The effect is a net increase in productivity for your entire company.

It's Not A 9-5, It's a Way of Life

When Juan started with his wife, she asked him, “Can you turn it off?”

To which he responded, “I don’t know how to!”

People coming into the world of entrepreneurship for the first time need to understand that being an entrepreneur is a way of life. There is no line of separation that exists between work and family life; both components become fully integrated, as you won’t be able to “turn it off” at the end of the day. You will inherently be connected to your business 24/7, even in your sleep. Your mind will be bombarded with ideas of how to constantly improve your business and scale to the next goal. You will never be complacent or content with the current status quo. It is that hunger and incessant drive that defines a true entrepreneur. Only when you learn to embrace and appreciate this way of life are 8 figures truly possible.

Automate Processes With Technology

During our interview, Juan talks about keeping an eye constantly open for processes in your company that are inefficient, and that can be automated with technology. An inefficient process is when a department’s marginal cost is much greater than its marginal value when executing said process. These processes exist in every business, and it is up to the business owner to find a technological solution to eliminate it.

Juan remembered a time when he had to hand-enter six million dollars of invoices into his accounting system per year. This meant that 2-3 full-time people had to be utilized to input everything into the system before customers could be invoiced. This resulted in delays, errors, and lost transactions that were never keyed in or collected. Eventually, Juan found a solution to automate this entire process, which has saved him millions of dollars over the years.

View The Interview At: https://youtu.be/5CoFFz_NWHY