Erica Brune: How Lever1 Became Missouri’s Fastest Growing Company!
Guests: Erica Brune, Daniel Ramsey
Recorded: March 4, 2020
What does it take to build & rapidly scale a business enough that you receive national recognition for it? Are there tricks, tips & shortcuts that you can use to go from zero to success faster than your competitors? Yes!
In this exciting interview, we’re speaking with Erica Brune, the President of Lever1 – a Professional Employer Organization, or PEO. Her company has been ranked as Missouri’s Fastest Growing Company in 2017, and she’ll share with you the big “why” behind her success, along with the “how” that makes outsourcing non-dollar-productive tasks a must in today’s economy.
Erica’s hard work & diligence are a part of what makes Lever1 so successful – but it also requires the systems to drive growth. Within five years of launching Lever1, Erica helped drive the company to become Missouri’s Fastest Growing Company of 2017—ranked No. 44 in the nation by Inc. Magazine. Women Presidents’ Organization recently named Erica No. 4 in The 50 Fastest-Growing Women-Owned/Led Companies 2018. With Erica’s guidance, Lever1 has secured an industry-wide reputation of excellence, operational reliability, and thought leadership.
Her team’s customer-first mindset drives the PEO to achieve greatness for its clients and help them succeed. From providing countless free HR training workshops to serving on the board for local non-profits, Erica is ingrained in the community, and giving back continues to be an incredibly important aspect of Lever1. Erica’s expertise has been shared in renowned publications including Kansas City Business Journal, PEO Insider, and Thinking Bigger Business.
In addition to Lever1, Erica Brune holds a dual role as CAO of an Inc. 500/5000 Fastest Growing Company, Blue Chair Holdings – which includes subsidiary Gragg Advertising. Erica’s role is to lead the financial team and oversee the administrative functions for the holding group. In the nearly 10 years Erica has been part of Blue Chair Holdings, Erica has successfully assisted the company through 11 start-ups and two acquisitions.
Recent recognition includes Ernst & Young Entrepreneur of the Year Finalist 2017 and 2018, Kansas City Business Journal’s 2016 Women Who Mean Business Honoree, KC Business Magazine 2015 Most Influential Women in Business, and a 2015 Startup of the Year Honoree by American Business Awards, among others.
00:00:06:06 – 00:00:26:05
Hey, everybody. Daniel Ramsey here with MyOutDesk. And I’m excited because today we have Erica Brune. She is the president of Lever One Lever with an hour at the end, a Kansas based Kansas City based professional employment organization. Really like what they do. I’m excited to have you here, Erica. Thank you for joining us today.
00:00:26:20 – 00:00:28:02
Thanks for having me. Good morning.
00:00:28:11 – 00:00:40:13
Yeah, so you guys were ranked one of the fastest growing companies in 2017. I think that’s phenomenal. Let’s talk through some of that. What would you guys do to get that ranking?
00:00:42:08 – 00:01:13:04
The ink 500 looks has a three year look back in their award program and we went from, you know, being a startup company to really that enterprise level over those three years. And so in the PEO space significant specifically there’s large revenue, large revenue dollars reflected. And so we were able to really demonstrate that significant growth and it we were the fastest growing company in the state of Missouri that year 44th overall.
00:01:14:07 – 00:01:22:22
And boy, was that exciting. I got a lot of attention for us and and we were really excited to have accomplished that.
00:01:23:09 – 00:01:44:15
Well, that’s good press for sure. We were talking earlier and I love this. Today’s topic is basically you guys didn’t start as a normal IPO. A lot of companies kind of go through a process where somebody is in the industry, they decide to start their own version of their IPO. They want to do it their way. But you guys actually had a reverse process.
00:01:44:15 – 00:01:57:09
You already had a successful business, several and you started a PTO to service those businesses, which is an interesting story. So let’s just start off with how you guys were founded and why.
00:01:58:03 – 00:02:49:15
Sure. It is an interesting story. Most pillows, as you mentioned, are typically insurance people, people that have been in the business starting there or through acquisition. We were an advertising agency, full service agency for 25 years. When we start in spinning off, acquiring and purchasing other marketing type businesses and around 2012, we purchased our seventh company and realized that we would take my team of finance and our professionals out of the original agency and form a PTO for our book of business that that was going to be the best way to administer all the employees offer seamless benefits regardless of which business unit you worked in, and allow us to keep all of our businesses
00:02:49:15 – 00:03:08:07
completely arm’s length running as independent businesses. And that was a marketing strategy as well as a risk and liability strategy from an operational perspective. So we formed a PTO for our group thinking that was going to be the best way for us to administer and run our portfolio of businesses.
00:03:08:16 – 00:03:28:13
And whatever one has is kind of the hub where all of these businesses really sell and market to their clients. But you guys housed the employees all the benefits. And do you guys do the search for staffing and and kind of helping your clients actually build their employee base, too?
00:03:28:24 – 00:03:49:14
We do. We brought in an executive recruiter last year because we identified so many businesses, certainly in today’s economy, are struggling to find good people. They were asking us for help anyway. And we’ve got a team of professionals that have done search. And so we identified that that would be a really great add on service. And it’s it’s been going very well.
00:03:50:00 – 00:03:59:18
Awesome. And you think of yourself as the hub, like the lever one in the middle with all these other businesses kind of circling or is that just me making stuff up in my head?
00:04:00:19 – 00:04:22:06
I’d say we’re off to the side, but yes, we are. The administrative arm for sure. But each of our other sister companies has an expertize in marketing, advertising, print, direct mail, etc. So they really they they are running their operation from top to bottom and then count on us to help them on the people side.
00:04:22:18 – 00:04:48:15
I love it. You have your own people organization, which really are the assets of most businesses. One one question that I have. We talked a little bit about this earlier. What has been one of your biggest challenges as you’ve grown where eight years in is that you guys are about eight years in? Yeah. What has been one of your biggest challenges as you’ve grown from a brand new start up to where you are today?
00:04:48:15 – 00:04:50:06
A medium size CEO?
00:04:51:20 – 00:05:19:02
Yeah, I would say one of the biggest challenges in the PTO space specifically is finding good margin, good revenue margin and holding on to that. We’re a very slim margin industry, unlike technology or even our sister companies in the advertising space. It’s it’s it’s thin. And so any mistake, any hiccup, it just completely cripples the month or the financial statement.
00:05:19:02 – 00:05:48:00
And so it’s really fine to financial accounting and awareness and projections because it’s such a such a narrow margin. And yet you’re still bringing in high level experts. So the salary line is still pretty high. That’s been a challenge. And certainly with the pricing, then when you’re out prospecting for the products that we that we offer, just really helping understand and share the value of what they’re what they’re looking at and what the product is.
00:05:48:00 – 00:06:06:21
So that all along has been so challenging for us from our first few years where we were unprofitable to scaling fast. Right. You want to give discounts and volume discounts to get that critical mass, build your book. And it’s pretty hard to overcome that or to continue to grow that in this space. It was a real eye opener for us.
00:06:07:12 – 00:06:19:12
One challenge that I hear from most CEOs is the whole sales team, you know, like building a sales team to actually go out into the community. How do you guys how have you guys handled that now that you’re eight years in?
00:06:21:04 – 00:06:40:20
That was a challenge at first, for sure, because I would identify and bring in a sales rep who’d worked for me for a year or so, but we didn’t have enough market penetration to there was there was no ball already rolling for them. Right. So what I did wrong was not invest in them long enough. They got frustrated.
00:06:40:20 – 00:07:01:14
They wanted to go make more money somewhere else. I didn’t have enough leads or marketing volume to help funnel and build a book of business for them. And we were I think I erred as a leader the first few years, a few years through that process, I had some really great people and they and they did great work, but it just wasn’t enough to keep them motivated or satisfied.
00:07:02:04 – 00:07:24:07
Now we have a team that I think each of our sales reps has been with us over three years and so they, you know, help maintain the relationships that they’ve brought in. They check in on them as well as then just totally infiltrate the community, spreading our brand and the good work that we do and creating sales that way.
00:07:24:18 – 00:07:45:06
Yeah, I love it. One of the things that you and I talked about prior to this video was and and I really like this about you. Your business is very catered to the clients need, which is unusual in the PR world. Usually CEOs want to go after the insurance, they want to go after the health care. They want all they want the whole pie.
00:07:45:06 – 00:07:53:22
But you really focus on what your your clients need. So let’s talk about that. Your menu of services is actually unique in the industry.
00:07:54:21 – 00:08:17:22
It is. And so when we launched, we didn’t have enough critical mass to offer some of the group benefits that are commonly associated with PPOs. It’s the chicken and the egg. You’ve got to have this volume to get good policies, but you can’t get volume if you don’t have good policies to offer. So we, we really heavily focused on h.R.
00:08:17:22 – 00:08:53:15
And the value proposition of of having a local h.r. Team administer your payroll and your new hire paperwork and all the compliance aspects that a PPO really assists businesses with. And so by doing that, we had to be very accommodating with maybe you don’t offer health at all, maybe you keep your health relationship where you have it. And we saw that very early on as an opportunity that many businesses would get declined from a peer relationship or they didn’t like the feeling that they were forced to take everything or nothing.
00:08:54:06 – 00:09:13:02
And we saw that as a market opportunity. And so we started being very flexible with the menu and really accommodating our clients with what was going to be in their best interest. Every year at renewal, we’ll show you everything that you possibly have to choose from, that you would get outside the PEO relationship and or then inside the PTO.
00:09:13:02 – 00:09:38:13
And that way you’re never going to be forced to work with us or have any confusion with what your pricing is or what you’re buying. And so that was really advantageous, as you can imagine, goes over very well in the sales process. But but eight years then now, you know, I have enough wrinkles to understand why that’s probably not the most back to my first point profitable way to run a PTL.
00:09:38:22 – 00:10:01:00
Right. Because of the hours it takes to reconcile all of those different plans, one error can upset your profitability for an entire month on a client. It just creates more more room for error. And that’s true for any business that you’re scaling. You try and get things more, more streamlined, more process oriented. And when you’re accommodating client by client, it’s harder to do that.
00:10:01:11 – 00:10:03:13
But that we’ve grown so.
00:10:03:24 – 00:10:11:22
Well and that’s the trade off, right? It’s a lot more work, but now you’ve grown and your clients are satisfied and you’re servicing them at a higher level.
00:10:12:08 – 00:10:28:10
Right. And our volume that got us to the point where now we do have benefits that are pretty hard to to not want. We still have clients that that want something else and that’s fine. But it afforded us the ability to now have very, very competitive products.
00:10:28:23 – 00:10:37:02
That’s cool. Erica, where do you see your business going over the next 3 to 5 years? Like, where’s the industry and how are you guys going to participate in all the growth.
00:10:38:01 – 00:11:07:23
We are interested in, in scaling, continuing to scale very quickly. We would love to get to that 10,000 employee, participate and level. We feel like that will really create an opportunity for us as an organization to offer best in class services and have enough critical mass to really have some creative solutions on the insurance side. So that’s our goal for the next five years.
00:11:07:23 – 00:11:21:01
I think the thing that everybody’s watching is the future of health care and how we can help business owners navigate through that ever changing landscape.
00:11:21:15 – 00:11:36:16
Do most of your conversations when you’re bringing on a new client circle around their health care and the complications around it and whether or not, you know, they have coverage or don’t have coverage or what’s required is that kind of where you guys start the conversation typically?
00:11:37:09 – 00:12:09:02
Typically that is the starting point. It can really be a game changer on if if we’re the right option for them and then opening the door to everything they already like everything else, but we’re going to be an add additional cost, right? So, so going through that and just seeing where it lands, seeing if it’s a good option for them, seeing if if they’re doctors and markets like, you know, the plans that we have to offer.
00:12:09:09 – 00:12:23:08
And so typically that’s the first stepping stone to get through. And then we can show that in a larger picture of all the services we offer and make a really good case for what a PTO can help them with.
00:12:23:24 – 00:12:31:13
Yeah, I love it. Well, Erica, this has been an amazing conversation. Really appreciate you. Where would somebody find out more information about liver one?
00:12:32:06 – 00:12:37:12
Sure. At our Web site. WW, Derek, that liver one dot com and that’s the numeric one.
00:12:38:01 – 00:12:50:10
Okay. I love it. Really. Thank you for your time today. It’s an interesting story how you guys already had a portfolio of businesses and you added PTO. That’s unusual. So thanks for coming in today and just sharing your story.
00:12:51:00 – 00:12:54:03
You’re welcome. Thanks for having me.