How Ajay Prasad went from running a business managed by 10 employees, which only generated $250k/year to 3 employees generating more than $1mill/year!

OWEN: My guest today is Ajay Prasad. He is the President of GMR Transcription. Ajay, welcome to the show.

AJAY: Thank you. I’m glad to be here.

OWEN: Yeah, so the show is all about getting entrepreneurs who come here, who have been able to systemize the entire business and get them to reveal the how exactly they did it. So, there business runs exactly without them. And so before we get started, I want to know some mind blowing results that you now currently experience as a result of going to the process of systemizing and automating your business.

AJAY: The one which I consider mind blowing result that I can tell you is that I used to have a team of 9-10 people managing the business that was doing at that time about $250,000 to $200,000 a year. And now I have a team of three people managing the business in seven figures. It’s over a million dollars.

OWEN: That’s impressive.

AJAY: So that right there, that gives you the power of systematizing and processes.

OWEN: Awesome. How will you say your company has been transformed as a result of systematizing your business?

AJAY: First thing is we can grow, the scalability has really improved, developed of systematizing. So we are growing. If the sales have increased by another 50%, we won’t have to hire anyone. So that is the big thing, now we are scalable.

OWEN: Wow.

AJAY: Because we are scalable now we are able to go after what they call, I would say bigger customers.

OWEN: Awesome. And so how would you say your personal life has been transformed as a result of systematizing you business?

AJAY: You know when I was when I started this business and I have another business just to let you know, so this was my second business. I also own another digital marketing agency.

OWEN: Yeah.

AJAY: And when I was doing this, I was doing it more for my, really, I needed a real, live guinea pig for my experimentation.

OWEN: Yeah

AJAY: My wife was asking me, why are you doing that? And my response to her was, one day this may pay our car payment, this business. This business is now doing $1.2 million with 30% gross margin so you can figure out, financially it  has totally changed my condition, which means that I can take a bigger risk, I can go for different entrepreneurs.

OWEN: Wow.

AJAY: So, I’m looking to start some other businesses, it’s definitely a really wonderful thing. Especially now because this business runs basically on autopilot

OWEN: That’s awesome and now that the business can run on autopilot, I’m curious, what was the longest time you’ve been away from the business itself?

AJAY: Oh, you know, right now, I can tell you 6 weeks, this year we went on vacation. The longest stay I would say is 6 weeks. We take when I take off for 2 to 3 weeks. I don’t even like blink.

OWEN: That’s awesome.

AJAY: Six weeks, nothing happened frankly. I went off for 6 weeks and I decided not to take my laptop. So you can imagine totally out of touch with what is happening in the business. Of course, I would call once a week just for the heck of it. And when I came back, actually, everything was fine, I just  learned that the business can ran without me but I don’t enjoy my vacation. I can at least see what is going on.

OWEN: Yes. And so the thing now is the listener, now they’re paying attention because we told them some of the results you’ve actually achieved as the result of systemizing your business. Now I want to give them some context as to exactly what does your business do. What necessary does your business do and what big pain do you  soled for your customers?

AJAY: Yeah. We are a transcription company and a translation company. And everything is done digitally. So we have created a blank form with people come in and upload their files, it’s either a voice file or it’s a text file, if they want translation.

OWEN: Yeah

AJAY: Then the work with over 200 plus virtual employees. They are all transcribers and translators all over U.S., spread out in many small cities where frankly there’s not even a job opportunity. And we assign them the work and get it done. They complete either transcription or translation. Contract us, it is sent to a QA, which is again virtual. After the quality is approved, then it is sent to the client and the client can pay it and get the transcript or translation document.

OWEN: Let me get this right though. Regarding the full time employees, how many full time employees do you have?

AJAY: You know, I have three and then if you add me then I am four.

OWEN: Okay

AJAY: And I do spend 15 minutes a week on this business. So I don’t know if I call myself full time but of course, you know, I’m the president.

OWEN: So, everybody else who are the virtual transcribers, those are basically 250 independent contractors, right?

AJAY: Exactly right.

OWEN: And so how profitable is the company. Is the company profitable and what was last year’s annual revenue and what do you probably expect to generate this year?

AJAY: Last year we did 1.3 million dollars in 2014…

OWEN: Awesome.

AJAY: …in total sales. This year because now we are going after some really larger target. So our forecast in this very year but anywhere between 1.3 to 2.3 million is my forecast.

OWEN: That’s awesome.

AJAY: And we know that we will meet this year’s number,

OWEN:  Yeah.

AJAY: But the side is very high. We could almost double the business.

OWEN: So let’s go back to before the business go to the point where, like you said, scalable and it can run without you. Now take me back to when the business was not systemized and automated like it is now. What was wrong with it at that time?

AJAY: You know frankly everything was wrong because, we built this, this was a brand new business, right? And I didn’t have anything to get example from. There was absolutely no president for it.

OWEN: Yeah.

AJAY: So I had to imagine the platform, and then I had to imagine the process, and the user interface and everything.

OWEN: And this was 10 years ago, right? Just to make sure we get it correctly the context, yeah.

AJAY: Pardon me, what was your question?

OWEN: It was 10 years ago when you know, you finally had this brand new business off the ground, right?

AJAY: Yes

OWEN: Okay, go ahead.

AJAY: It was literally from scratch. So everything we started was manual because, again, there was no concept of process because we were just trying to figure out what process do we need. So the first I would say 3 months was everything totally 100% manually done.

OWEN: Manual, yeah.

AJAY: So much so that we will get the e-mail of files and we e-mail the files to the transcribers and everything. Everything was manual.

OWEN: Wow, and you also mention that not only was it a brand new business, you had to figure out all the processes involved, so you’re doing it manually. During the pre-interview, you also mentioned how initially you are also working with subcontractors, another company to do the transcription and that was also the issue because you had no control. Talk about that.

AJAY: Yes. Remember that I told you that this was supposed to be guinea pig business that would make maybe $1,000 dollars a month in profit. So that I can make my car payment.

OWEN: Yeah.

AJAY: So my imagination was, which you hear a lot now, is I have a web-based business. People will come automatically, they will upload their file. And then I contracted with the sub-contractor, the transcription company and they will transcribe the file on time. They will upload it. I will get paid when they get the file, I pay the transcriber, and then I keep the company, the transcription company.

OWEN: Yeah.

AJAY: And I keep the tradition, almost like the drop ship…

OWEN: Drop ship model, yes.

AJAY: And so that was my imagination.

OWEN: Yeah.

AJAY: And I was [Unintelligible 00:09:11]. I live in Southern California, so I was going to be lying on a beach and counting my money. Sure, enough because it is too good to be true, it did not happen.

OWEN: So, how was it like? What was the real bang down? What was it really like?

AJAY: The first thing we started with the quality. So the other company that… I had no process in place to figure out what is the good, bad, or ugly. So we land into the problem where the customer was very unhappy with the quality that we had. I had no control over their timelines. So if the company said “Sorry, my transcribers got sick” or whatever and they’re delayed in terms of turnaround. So I had in my hand really very unhappy customers.

OWEN: Yeah.

AJAY: Okay, and that was biggest problem. So that’s when I realized that I have to remote control and I have to have my own transcribers.

OWEN: So the next step was saying, that was the first issue, you now say you’re trying to recruit your own transcribers. But then even after recruiting your transcribers, you also realize that you had to make processes in place to make sure they had the quality of work, right?

AJAY: Exactly right, because you advertise so people send you transcribers for 20 years. I give the work and then the quality is really bad. So we had to figure out how do I even hire a new transcriber?

OWEN: To test them to make sure that they’re correct, that they can do the work even in the first place.

AJAY: Correct.

OWEN: Yeah.

AJAY: So first thing after do is now, we created a task to make sure that these transcribers have the minimum requirement for being our independent contractor.

OWEN: Yeah.

AJAY: But the only thing I was testing is are they transcribing it accurately? In other words, whatever’s being said, are they transcribing the exact same thing, which was right. But then very quickly it turned out that when they transcribed everyone had different formats.

OWEN: Oh yeah.

AJAY: So, I would have a client who have 5 hours of recording and wanted it the same day. So the five was split into several 6-7 different files. And when I send it to the client, he just went berserk because it was not in the consisted format.

OWEN: I can definitely see that. I’m curious, back then can you remember the lowest point in the business, specific lowest point and describe how bad it got.

AJAY: Yes. Of course, the lowest point was when I would give full… When we started this with the guarantee that if you’re not happy we’ll refund your money.

OWEN: Yeah.

AJAY: Of course, the lowest point was that 5 out of 5 I’m refunding money.

OWEN: Wow.

AJAY: The only thing I’m hearing is F word from my clients. And they said I will never work with you. Frankly, I did consider very seriously, I was looking into shutting this company.

OWEN: Wow.

AJAY: I would tell you that was the lowest point, that I was going to shut it.

OWEN: Can you describe maybe the breaking point where you realize that you have to change things around because the business could not be the way it is? Do you remember when you realized that you needed to systematize and automate the business?

AJAY: This is what happened. Again, I started to realize that I need to have a system first for the product. I go with the product is the first thing because that’s what customers pay for.

OWEN: Yeah.

AJAY: On the product of course, as I started to learn… Like I said, at first we said, “Okay, I have to test the transcriber. Just because someone says I’ve done it for 20 years it doesn’t mean anything. Then I realized that I needed consistency of work that I get from… In those days they were not 200, but only like 15-20. But all 20 when they produced the work it should be very consistent in how it looks and everything. So we created a style guide. Then I searched. Frankly, I did not know so I talked to some of the companies who did transcription not through online but medical transcription alone. And they said do you have a style guide that we give to transcribers. So we had to create a style guide and give it to the transcriber. And then having the QA process in place. So that was the first thing that I systemized, and to be very honest that was the first thing I have started feeling that this business would work, I don’t have to close it. Because once we systemized that process the quality improved immediately. I started getting complements once in a while. And then when I didn’t hear the F word for 2 months then I knew that I’m doing something good.

OWEN: Was that the point where you realized that you had to just focus and double down on systematizing every part of the business?

AJAY: Exactly.

OWEN: Okay. I want to give the listener a kind of chronological way of the very first step and the next step after of what you did to start systematizing the business. Do you remember the very first step you took to solve the problem that you mentioned during the lowest point in the business. Can you remember some of the things you did? The very first step.

AJAY: Yes. The first thing I did was, this was even before the transcriber solution…

OWEN: Take us back.

AJAY: At first thing I did I realized that what I have really created was not very user friendly for my clients who come in and upload the file.

OWEN: The interface for the website now.

AJAY: Exactly right.

OWEN: Okay.

AJAY: And then the back end platform was also not very robust. So the first thing I did is make sure that the client can very easily… Everything is very simple. One of the fact that when the files are secured in our servers. So getting a secured server. And having a process so that even when transcribers that we send to… They have to sign an NDA that they will not reveal the content and all that. So having those processes in place, again, just so that at least I’m covered, and no one leaks something. So the big thing for me was creating the whole customer interface and the back end security and how we get to the transcriber.

OWEN: Let me summarize that. The first thing now was because… Nothing happens until your customer at that time actually uploads something, you had to make sure that that initial experience that they had with your website and interface was user-friendly and it was intuitive, that was the first stage you kind of worked on. And then also on the back end as well, what was the back end thing you mentioned? I was just wondering…

AJAY: The back end, when I first created the site for this one and I had someone do a secure test. And it took him like 30 seconds to penetrate the website and look at all the information. Because you can get that audit done. So the security is a very… Many of these transcriptions are very private and confidential. So obviously I just wanted to make sure that our foundation is solid. Because we worked that thing down and when we did the security. Of course the people who do the hacking said, “If I really want to I can hack it. But you need a very high level of skill set.” And then he basically said, “Listen, if I really need to I can hack Pentagon.” So it doesn’t say a whole lot that I can do it. In other words we made sure that security can be as good possible for a small company.

OWEN: Okay. So what we said was the second thing? After working on the interface and working on the back end, the customer is first seen as part of the business. What was the second thing you did to kind of…

AJAY: The second thing for me was the product, making sure that my product is good. So first thing we had to do is come up with some kind of logical process for assigning files to the transcribers. Each transcriber, they’re not jack-of-all-trades. So you have a transcriber who may have done a lot of legal work. So they are good for legal [No audio 00:17:26]. But then there could be transcribers that are very good in medical aspects. So we started to say get the transcriber based on their expertise. And you did a process for assigning the file to the right transcriber. And also created the QA process so that all of a sudden my product to the final work to the client is good. So that was the second thing.

OWEN: When you say QA, is that like quality assurance?

AJAY: Yes, that’s the quality assurance. So when the client involved comes back it goes through a QA department that kind of checks it and does some spot checking to make sure that the transcriber did a good job.

OWEN: Okay, let’s dive into each of those three points that you mentioned a little bit more. I remember you said the first thing you did was we gotten the product itself now, not necessarily the interface for people to just upload their file. But regarding the product they offered their customers, you said one of the first things you did was making sure that you have a process for hiring the right people and you include that test in there so that you can hire the right people, right? The next thing you said you did was creating a process for figuring how to assign the transcription job to the transcriber who’s based…

AJAY: [Unintelligible 00:19:30] transcriber.

OWEN: Yeah, can you talk about that?

AJAY: Yeah. The transcribers come from different experience. Most of our transcribers are I would say 35 to 55 years old. Mostly they are women and they’re working from home. So what happens is when the transcribers, they have in their previous work, they have different experience. So we started to segregate transcribers. For example now we have 250 transcribers, so we know that these whatever, I’m just throwing an example, these 25 are good for business transcription because they have a business background. These are good for legal backgrounds. So we instructed to segregate those. There are transcribers who do a much better job of for example, someone with accent. You and I, because we are exposed to accents, it’s much easier for us to understand when someone is talking in accent than someone who does not have good exposure, right?

OWEN: Yeah.

AJAY: So that is exactly what we have done. We know that if there’s a heavier accent, which transcriber it should go to. That’s segregation. What they did is now when we send it to the transcribers they are happy because they get the right product. We pay them by the minute of recording. So when they can do it faster they get more money and doesn’t hurt us. So they are doing it. So that’s one thing we did. And then of course before that we created an instruction manual for transcribers so that, like I said, it’s the style guide and all that. So they can use the word which is consistent with everyone else’s work.

OWEN: When you’ve created the QA process initially what did it involve?

AJAY: I told you initially the transcription quality was so bad that I was refunding 100% of the money.

OWEN: Five out of five, yeah.

AJAY: Yeah. So that’s when we started to say, “Someone has to go through quality check.” My initial quality check was literally have someone listen to the whole tape and see the transcripts and then fix it. So that’s how I started. But then as we started to become better at hiring the right transcribers then we started to realize that there was no need to go through everything. So now we do various spot checks.

OWEN: Okay.

AJAY: Maybe a 1-hour transcript, we will do 10. But we do it just to spot check. Check 6 minutes, and then 13 minutes, and as long as it’s consistent we’re fine. So again, the QA, we had to pay the whole… It started with doing everything. And then gradually now we have reached the point where frankly the kind of work that we get if someone was reading everything I would have 250 independent contractors. So now we have a more logical QA system which is working.

OWEN: Do you remember any other steps you took to solve the problems that you experienced during the lowest point of the business? Any other steps come to mind?

AJAY: Other steps I did was humility and accepting all my problems. The client would get upset at me and I will ask them and I’ll say, “I’m really sorry but tell me how well I can improve?” And many of them gave me feedback, many of them just slammed the phone on me but I used their feedback to really…

OWEN: …figure out where to improve, okay.

AJAY: Exactly, yes.

OWEN: I like that. Back then, you mentioned some of the things that you did to solve the problem. I’m wondering, what decision factor did you use to prioritize what other steps to take? Was there any kind of decisions was being made?

AJAY: Okay, what I will tell you is not surprising because that is very business sense. Of course, my priority level was first make sure that the customers can reach me and give me the work. That was my top priority. My second priority was product. Of course, I make sure that when I give the customer the product that they are happy. And I was not even thinking about any money at that time, if whether I’m making money or not. And then when we started to look at the efficiency. If you think about it, when you’re starting a new business you have to go through a concept stage, then you do the validation stage. When they first validated, then I went to what I call the efficiency straight. When I started to look at, well we can do the efficiency. First I would say one year was really focused on customer and product. So I was not even worried about my margin or anything else. Once we had a good handle on that then we started to look at how do we become more efficient. Remember I told you that I used to have nine people handling about 150 people in the payroll.

OWEN: Yeah.

AJAY: Handling $150,000 to $200,000 worth of work. And now there are three basically and I call myself number four because I’m President. We have big people handling $1.2, in fact we did $1.3 million last year.

OWEN: Awesome. And I like the way you broke it down based on you started out with the customer side first, then you look at the product. The next thing was now we got the customer product working. Now let’s look at efficiency, so I will scale and grow the business. I like that. Back then though because you mentioned that you also had the instruction manuals for the transcribers, as well as style guide and all that. I’m assuming you are documenting stuff. How exactly did you document your procedures and processes for your transcribers at that time or even your staff? What tools did you use?

AJAY: We keep on doing that even today to some level. So my process is very simple, every problem that we run into we make a list of it. Customer complaints, any issue. I have always done right from the get go, I used to do customer satisfaction survey. You can imagine at the beginning I have gotten… The very first time I did the survey I think the score of 3 on the scale of 1 to 10. But we always use that feedback and then what I do is all the problems that we run into, all the question or feedback I put it into a category that says is it one off. For example if the customer complained that when I called you your assistant did not talk to me properly. Now, of course I will talk to the assistant but there’s another process that I can do to fix it per se, unless that was a perpetual problem. So I grouped them and say, “Okay, you said something that can be solved through automation, is there something that can be solved through creating a process in place. So having a QA was part of the process, right? When I realized that the consistent problem and say, let’s do a QA. And then whatever was needed, so once I had the point then we will create a process. And then we will write it. That’s where for consistency, when we thought we need all the transcribers to give me consistent products. Then the question, what is consistent? Then we started looking at it and say, “You have to have format, you have to have grammar.” And a lot of things popped up. Then we started asking questions. Questions like do you want us to fix the grammar? And we will charge you extra for that. So we started to get all that is there and then created basically a style guide. If they have a legal transcription work, their process or format is very different than academic transcription. So we had to have a document that the transcribers can go to for guidance.

OWEN: Yeah.

AJAY: These documents, again, we created about the procedure, like what I was saying. It is not a kind of starting document. We still keep on improving. When we have something that needs to be out there, it’s kind of like a living document that keeps on getting updated.

OWEN: What stood out to me was, first of all, what you did was basically compile all the complaints that were coming in so you can rank them in the first place. For each of the complaints back then you ask yourself the question, “Is this is something that you can automate so that you can find an automated solution to fix it?” If it’s something that someone has to do, just make sure that the person does not make mistakes in the future. How can we create a procedure or process around it so that all they do is to just follow the procedure and process. And they end up with the results that we are actually looking for. I like that.

AJAY: Okay, thanks. So that’s what is the thinking.

OWEN: Yeah. Also, I’m curious, at what time would you say that you got to the point where… Actually, let me ask this questions before that. At that time when you were systematizing the business and try to automate the business as well. What books or mentors had the most influence on you and why?

AJAY: That’s kind of an interesting question, because I come from corporate America so I’m used to processes then. And my field was I was in marketing management and corporation. I really didn’t use any book per se, it was just the knowledge after 20 years. By then I was 17 years or so in the corporate world. So I basically used my experience. Then I have a small advisory group. I have a mentor since mid 1990’s. I would talk to them through the advisory group I’m on. But really it was more making my decision based on the training that I had in the past.

OWEN: I’m curious. Do you remember anything specific when you were working that you kind of took and applied into the business at the time when you were trying to systematize it? Is this something specifically you can remember from when you were working?

AJAY: Yeah. For example, one of the things… I already told you about the problems that we had and how we fix it. And then when we already had 50 transcribers, right? All these transcribers were sending us invoices every 2 weeks, because I pay every 2 weeks of the work they do. For 2 weeks they send us the invoice and next Friday they get just like a payroll, which is a system that we had. So these transcribers, when they started to… We’ll get 50. Now you can imagine someone over here is scrambling to match it and make sure that it is correct. Sometimes they would find that this transcriber over charged or under charged. So I knew that this was a persistent problem. I went and I said, okay, how do I solve that thing. I talked to my development team and I realized that we have all the data. Because when we assign to a client, in the back of the website it knows wherein the client will assign this file. The back end also knows that this assigned file was 30 minutes. It also knows that the transcriber gets whatever is the money that they’re going to get per minute. So I said, I have all the information, why can’t I just system generate this [Unintelligible 00:32:56], invoicing every two weeks. I had that developed. Then what we did is the system actually sends the invoice to the payroll, and every transcriber gets a copy of it. If they see that, okay, the system said this is what they’ve done, supposedly there’s any difference, which I can let you know that it didn’t happen in the last 2 years at least. That no one has challenged… So that one I would say, maybe a thousand dollar investment in the back end programming. It literally completely solved a problem which was a perpetual problem every other week. Every other week people spending an hour talking to transcribers. “Where did you get this number?” All of a sudden it’s done.

OWEN: Yeah, the information is already there, you just had to figure out how to automate it. That goes back to your thinking of whenever there’s a problem you first of all ask yourself how you could automate it. And that’s just like a real example of how you ended up automating the problem to get it fixed. If we just talk about how you solve the issues without talking about some of the challenges that you went through it would like as if it was all just magic. What will you say was the biggest challenge you experienced when you initially tried to create systems for the business and how did you solve it?

AJAY: I’ll tell you. One of the biggest problem is that there’s some problems that we had like technical issues. They’re much easier to solve. We had bandwidth issue in the beginning because the technology was available, we solved it by using some third party FTP system. We started giving customers tools to reduce their file so that they can compress their voice file. It’s easy to do.

OWEN: Yeah.

AJAY: I’ll tell you, that was the easy part of the system.

OWEN: What was the hard part?

AJAY: The hard part was getting your people to follow the new system. Because if you drop your workforce from 9 to 3. So it means that everytime you are trying to automate or systemize something, it is very obvious for people to know that their job is going to go. If there was one person whose job was to just verify and make sure that the transcriber’s invoices are correct. And then you admit it, then you don’t need that person. So that was one thing. And people get used to it, they don’t like change. Every time you’re doing these things that means you’re changing the process.

OWEN: How did you solve that though? Because one thing stood out to me was that you mentioned that when you’re trying to create a system for something, using that example of that person who was always verifying the invoice and the time that the transcribers use so that they can pump out invoices. And then you now ended up automating it. Now that person has no job. So I see that problem. How did you solve that issue that was probably a challenge they have knowing that everytime you systematized something might mean they don’t have a job?

AJAY: Where it helped is some of that happened through a reason. People just left. Even though I would tell them that we will find some other opportunity for you, a lot of people… I had at least four of them just leave at the process. But I am lucky that I have this other business, the digital marketing business. So I know that one person is now very well established in that area, digital marketing. She’s handling all my accounting and everything for both businesses. So moved up. But it was hard. I had to let go of a couple of people because there was no job for them and their skill did not fit anywhere. Frankly, it was much easier on me when people left because I could forecast… there are a couple of people who literally left when they had nothing to do. They’re job is automated, so they come in, they will around and try to look busy. But I even knew that there was no work for them and I was trying to figure out what to do. Luckily, some of them decided that they started looking and found some other jobs.

OWEN: What I get from that is that when you go into that process of trying to systematize your business you as the owner should be okay with the fact that when you start systematizing and automating parts of your business. You’re going to get to the point where some of the employees that you need, there probably will be no need for them. So you got to be okay with that. And then also realize that maybe, the example you used is that some of them because they’ve been replaced in their position they’ve been able to grow and get to the next level. Basically saying if you don’t systematize what we do for you how can we promote you to the next position, using that example how that lady worked and do something… Yeah, was able to go to another position and even shine in that other position because you systematized what she was doing before.

AJAY: Correct. And I want to tell you from my experience of being in corporate America where I had to do my share of fighting and being a business owner where I had to let go of people. That is one of the most unfortunate aspect of business, I would say business ownership from my perspective while being a manager. You just absolutely hate to do it but you have to do that. There’s nothing you can do about it.

OWEN: Yeah, at the end of the day it’s not about you, it’s about the business being successful.

AJAY: Right.

OWEN: What’s in the best interest of the business. What will you say was the second biggest challenge that you experienced when you initially try to create systems for the business. I think this was on even transcript quality, I think that’s what we…

AJAY: Again, once after the processing then my quality, I just wanted to be top notch. And now just so that you know we still do this customer service survey certain facts and survey every quarter. And typically our product is always between 9 and 10 on the scale of 1 to 10. So that was my big thing was now that I have the right transcribers, how do I get my quality to the level that people get it and this is great, now I can move on. Rather than they spend another hour trying to tweak it and fix it. And so, when I tell you that we develop the manual, we develop the standby, it is so easy to say, it’s 2 words. But I’m telling you that it took us months to do it and get it right. It was a huge challenge to do it.

OWEN: Yeah, and in doing it now you definitely see the benefits of it. So, given all these challenges that you mentioned when you’re trying to systematize the business, there’s a lot of challenges. How did you stay committed to the goal of systematizing your business given all the challenges that you mentioned?

AJAY: Again, I come from this business world and like I said, when we do the start-up. And from other business which is a digital marketing. I help people, a lot of start-up companies. So I always say that the start-up you have 4 stages. You are in the discovery stage, whether you’re trying to figure out is it a good business or not. Validation, now you know that there’s a demand people are buying and all. Then you get into the efficiency stage. Once you are efficient then you can start talking with scaling. So I understood that because I really believe in that process I am telling you. So it was not really easy, it was difficult for me to say, okay, now that I have the whole thing validated, we know how to get customers, we know how to produce the result consistently, on a regular basis, so the whole business is validated. So then you’ll say, “Let me see, can I become more efficient, how do I increase my margin?” We have our margin, and without raising prices I think I’d increased from something like 7% to over 30%…

OWEN: Wow.

AJAY: …over a period of time, so that…

OWEN: Without increasing prices, it’s just basically increase and make sure that you had efficiencies in place so the other back end stuff with them as optimum. That’s also…

AJAY: Just to let you know that in 10 years of business we have not raised price.

OWEN: Wow, that’s impressive.

AJAY: All the improvement we have done is in the efficiency.

OWEN: Now, we’ve kind of given the listener a kind of background of how you systematize the business. But at what point in time did you realize that the entire business was systematized and it could actually run without you successfully. Do you remember what specifically…

AJAY: Yes, I remember. Though there are some aha moments you never forget. It was in 2010, so it was 6 years after I started the business. We took a summer vacation for the first time in 6 years. We just went to Chicago and New Jersey, nothing fancy. I was very nervous about the fact that this was the first time that I was leaving and the business was going to be on its own. I would call every morning and the person over here, the head, she’s like, “Everything is fine. Yesterday was very good…” And it just dawned on me finally that, “Oh my god, I don’t need to be here…”

OWEN: They don’t need me.

AJAY: Yeah. Actually my right hand person in the company always tells me that we seem to do better when you’re not here in the office. You go on vacation our sales go up, so I don’t…

OWEN: That’s good. I like how you even had a precise time when you actually realize and you’re able to share the story of when you realize the business they don’t even need you anymore. Now, we’re back in the present in terms of the story. I want to give the listener a kind of a behind the scenes of how the business is structured right now. Basically, the different parts of the business and different systems you have. Let me make it easier for you. Imagine you have a conveyor belt going through the business. On one part of this conveyor belt is somebody who needs transcription or whatever. On the other part of this conveyor belt is that same person is probably used your service, they love the results you give them, and now they’re been transformed into a raving fan, telling everybody about you guys. But in order for that transformation to happen there are different parts behind the scenes in your business that has happened. Give us a behind the scenes of what happens today.

AJAY: Sure. Now, the way the system works is there’s a website. People find our website through our marketing and now a lot of time through referrals. So they come in, they will register, the current customer will come in. They will login into their account. They upload the files that they need. They need simple step-by-step process. Frankly we have not had a question about how do we upload file in 2 years so I know that it’s a very simple system. Once the file is uploaded and my team here gets notified that a new file has come in they go and they see what kind of file it is because in the comments section it says that this is a legal thing, whatever, by the client. They figure out who’s the right transcriber. This is first come first basis because they have to accept the job. Many transcribers are also doing other people’s job. So they would get an SMS, instant messaging, and email from us saying, “Here’s a project, this is what it is the project details.” We just take it from the detail that the client has put in and say, “If you are interested.” Even if they get a text, from there if they say yes then we assign the file. Now, just so you know, suppose a legal file has come in, I’m just throwing an example. And we have 10 people who can do legal transcription. If three of them already have work the system knows. So we’re not going to give them more work because they have to finish first what they have. So that gives my transcribers incentive to quickly finish the work. We have all these systems. They approve it, my people from here just one click, the file is assigned to them. Whenever they’re starting to transcribe it could be night after putting their kids to sleep or whatever. They click on a link that would download the file with the filename. The transcriber will then click and they will just upload it. And it goes into the client folder. Once it is uploaded we have a bunch of QA, whoever is available gets notified and say there’s a QA project here. They will just click a link, they will have both the recording and their transcript. They check it. If it is uploaded and not approved then it goes back to the transcriber and say you have to fix it. If it is approved, they approve it, the client is notified, your transcription is ready. They have two options, they can either download it from their account or they get it by email. So all they have to do at that point is to click on a link, pay for it. And either download it or it goes into their email. It is like every piece is working from the client to product, that’s a conveyor belt. So that to me is really the heart of the whole system. We know how to get the customer and get their product very easily, the projects, get it done by the transcriber, send it back to them.

OWEN: I like how you basically broke down behind the scenes of what was happening. Basically, you described the entire workflow of what’s going on. Going back to the beginning where you started out that you didn’t have any idea of how the industry actually works. Now, you’ve built your software behind the scenes that kind of works to automate how things get done and move every step closer and closer. So at the end of the conveyor belt the customer gets the results they’re looking for. I love that. How can you track the results, in this case. Not necessarily the employees but the transcriber as they deliver?

AJAY: Based on the QA report, when you do the QA of each person, at that time what we are doing is the transcriber is rated based on the QA. Right now I know that these are our A+ transcribers, this is A transcriber, this is B+. The higher rated transcriber, number one, they get more work. Secondly, when we get the work back from the A+ transcriber we know that we don’t have to spend so much time on QA. In many instances we’ll just send it straight to the client depending on what it is. But if it is B+, we don’t have anywhere below B. So we don’t have C+, we just fire them. The B and B+ transcriber, even the QA knows based on who’s transcribing what level of detail they have to go into. And then of course, the transcriber based on where they are on the spectrum, they’re transcription fee varies. Because obviously if I’m spending a lot of time on getting the QA done then I cannot pay the transcriber a lot of money. But if there’s someone that we are so confident that we can sent it straight to the client, then of course, I’m happy to give them the money that I’ll be paying for QA.

OWEN: So what I get from that now is when the transcribers deliver the job, I’m sure your clients end up rating them. So based on the rating over time you can now identify who’s an A+ transcriber. When you know who the A+ transcribers are based on the ratings they get from your clients, then you don’t have to spend more time with your QA team QA’ing their work. You can now focus on the B and B+ transcribers and work with them with training to get them to where they need to be A+.

AJAY: Yeah. Actually it doesn’t even go to the client level Owen. Our QA team does the job. So the client always gets A+ work. That was I was telling you on the quality, every customer satisfaction reset every quarter. We are always 9+ on the scale of 1 to 10 on quality. But we know when the QA reviews it, based on the rules the QA finds and the time that they’ve spent…

OWEN: Go ahead.

AJAY: No problem. So based on what happens at the QA level we put a rating for the transcriber.

OWEN: That’s awesome. Okay. Now that we’ve described where the business is, I want to understand, with all these free time that you have, which areas of the business you focus on now and why?

AJAY: I am a serial entrepreneur so I own another company, it’s a digital marketing agency. We have 50 plus clients. It is also a very exciting business because it’s a moving target. I am doing that. Like I said, I am also starting another business as we talk. We will probably launch it by March of this year.

OWEN: That’s awesome. So because of the free time you can actually build other businesses, because you already built this engine that’s working without you, you know it’s running. And now you can go and start on other things and go to those different stages as you mentioned. of how businesses go through different stages.

AJAY: I’m spoiled. I would love to do three full businesses like this that I already have.

OWEN: That’s awesome. Right now what is the next stage of growth for this very business and what’s the next plan that you’re planning to achieve?

AJAY: What I was telling you about my philosophy of discovery, validation, efficiency, and scale…

OWEN: Yes.

AJAY: …I think now we have reached the efficiency, so we are going for scale. Every November, end of the year, I take a look at it and say, “What can we do, something different for the business.” It’s just one of those habits that I picked up from my corporate world. What we have found is there are a lot of transcription and translation projects that comes through RFP that bigger project. It could be the government, cities, the police department, insurance, and all that.

OWEN: Yeah.

AJAY: One of the new thing we are doing this year on this business is going after those larger projects. These projects could be a million dollars a year, 6 million over 5 years, half a million… We are very intrigued at the numbers. Last year when we started doing some research. We were stunned. I think that I must have seen last year, if you look at the total RFP for transcription and translation, just from government organizations all over the US was in  billions.

OWEN: Wow.

AJAY: We in California right now, we just want to focus on California, there’s enough jobs here. So that is the next thing that we are doing, is trying to work with a large corporation, government entity, these kinds of big non-profit, and handle their transcriptions. So think of it as bulk work. Versus right now we are mostly getting retail.

OWEN: That’s awesome. In rounding up the interview, I’m curious, what will you say is the very next step for someone who’s listening to this interview all the way to this point to take in order to get started on that journey to systematize and automate their business so it runs without them successfully?

AJAY: Because I learned from trial and error Owen, more or less, I think that when someone is starting a business they have to have a plan. They cannot just say, “Open the door and let’s see what happens.” Like I said, I will always tell people like what I tell my clients, figure out where you are on the four stages in business, discovery, validation, efficiency, and scale. And at the discovery level I would not worry at all about the process of them all. All you’re trying to figure out is first, is there a business? Once at the validation level you have to start looking at some of the processes especially when it comes to the customer interface. Otherwise, you won’t get the business. So once you’re start getting business and you know what to do with it, I will do that and then after. Efficiency level is when you start to really focus on transforming the business by putting processes and automation to reduce cost.

OWEN: Awesome. Is there a question that you are wishing I asked you during the interview that I didn’t ask? And if so post that question and the answer.

AJAY: I would like to know a little bit about your target audience.

OWEN: We could definitely talk about that after the interview, but just real quick, it’s basically people who are at that stage in their business where it’s already an established business. They passed that discovery phase, they are now at that point where they want to start focusing on getting their business to be more efficient.

AJAY: Okay, I get it. So the only thing I wished that you had to ask was what does it take to get a business from scratch to a million dollars.

OWEN: Okay, so go ahead, answer real quick in a summary. Go ahead, answer it.

AJAY: Yeah, my answer would’ve been it will take you longer than you think, it will be it will take more than what you think in the beginning and you will be working harder than what you think that you would need to do.

OWEN: Wow, I like that answer. It’s a journey.

AJAY: [Unintelligible 00:57:32]

OWEN: That’s what it is. And so, what is the best way for the listener to connect with you and thank you for doing the interview?

AJAY: They can connect with me by emailing me at ajay@gmrtranscription.com, or they can check my two websites and there is a way to connect it. So one would be www.gmrwebteam.com and gmrtranscription.com.

OWEN: So now I’m speaking to you the listener. You’ve listened to the interview all the way to this point. And if you want to subscribe to our podcast so that everytime we have an interview like this you’ll be made aware of it. If you’re using an iPhone you can subscribe by iTunes, and you can do that by going to sweetprocess.com/iTunes. And if you have an Android you can subscribe via the Stitcher app. And to get to that link, you go to sweetprocess.com/stitcher. And if you found this interview useful what I want you to do is go ahead and share with other entrepreneurs who you feel will find it useful. The reason is we encourage by getting more listeners, and that encourages us to go out there and get more entrepreneurs like RJ to come on here and share how their business has been systematized. And you get to see behind the scenes of where the business is right now. Finally, if you’re at that point in your where you’re tired of being the bottleneck and you want to get everything out of your head so your employees know step by step how you get tasks done. So that they can do work the way you do and deliver the results that you desire to your clients, then sing-up for a free 14-day trial of SweetProcess. Ajay, thanks for doing the interview.

AJAY: Thank you very much Owen, it was really good talking to you.

OWEN: And we’re done.