Racheal Allen, a seasoned entrepreneur with over 15 years of experience in coaching large-scale organizations, specializes in crafting efficient policies and operations. As the Founder of Operations School, she leads a renowned boot camp for startup founders, while also offering consulting and public speaking. Sanjay and Racheal discuss operational efficiency, avoiding burnout, and the essentials of entrepreneurship.
Episode 18 – Racheal Allen
[00:00:00] Sanjay Parekh: Today our guest, Racheal Allen, is joining us from Detroit, Michigan. She's a strategies and systems coach, and she wants to help you improve your business' operations. Rachel's company Opsidia helps Black-led and Black-serving organizations build sustainable systems and processes to ensure businesses are viewed through an equitable lens. Rachel is a HBS Young American leader and recipient of a spot on Crane's 40 Under 40 list. Racheal, welcome to the show.
[00:01:22] Racheal Allen: Thank you for having me, Sanjay.
[00:01:25] Sanjay Parekh: There's a lot of fun stuff that we're going to talk about during this episode, but before we get into that, can you give us a quick one- or two-minute background on you and how you got to where you are right now?
[00:01:37] Racheal Allen: So, I will say I have been a reluctant entrepreneur. I told myself that I never wanted to be an entrepreneur, and yet, here I am. I started my first business as an insurance agent with an agency back about 20 years ago. So, I started that when I was 21 years old. I have since worked in the nonprofit sector. I have been a Chief Operating Officer by trade. But mostly I started a startup that helps small businesses learn how to manage their operations. And so, now I exclusively work in the operations space. So, I like to say that by day I'm a consultant and I actually perform this work for clients across the country by night. I facilitate classes where I'm helping small businesses figure out how to apply some of the same strategies into their businesses. And so again, as a serial entrepreneur, some people have hobbies. I have businesses and I just love everything about what entrepreneurship does for folks, particularly how it changes economic trajectories for folks.
[00:02:36] Sanjay Parekh: Okay. I think you might be the first person that's been on the podcast that's called themselves a reluctant entrepreneur. Why? Why were you a reluctant entrepreneur? Was there something that you saw that you were like, yeah, that's just not for me, and then you just got sucked in anyways.
[00:02:51] Racheal Allen: Oh, for sure. So, I'm actually a second-generation entrepreneur. My mother was an entrepreneur back in the early nineties when no one was really calling themselves an entrepreneur. She cashed out her 401k, started as a business, really doing like old school graphic design and what they called desktop publishing back in the nineties. She would help folks create business cards and flyers and she had this really cool office with a Xerox machine and a bunch of computers, which was really great. But I saw her really struggle. Her passion was helping other black businesses also build operational capacity. And I associated some of the struggles that we had financially with entrepreneurship. And so, I actually said, out loud, I never want to be an entrepreneur. I said, I want a job that pays me every two weeks. And I wanted to live in the same house for the rest of my life, and I wanted to drive a Taurus. And so, at that time I thought that was like the biggest dream I could have for myself, and I really thought I would be a teacher. Not truly understanding that I have always had the spirit of a sage and an instructor. Even though my passion is business, I've been able to translate that into a career. But for sure, I thought the path to entrepreneurship was too volatile and too risky. And I really wanted something that was safe. And boy, was I wrong about how that would work out for me.
[00:04:17] Sanjay Parekh: Yeah. And good that your dream changed because I don't think Ford even makes the Taurus anymore, right? I don't think it's a vehicle.
[00:04:24] Racheal Allen: No, they don't.
[00:04:27] Sanjay Parekh: So, my question was going to be like did you have any entrepreneur — obviously you did in the family — was there anybody else in the family that was an entrepreneur?
[00:04:34] Racheal Allen: No, not at all. In fact, there was a time when people thought my mom was crazy for leaving a good paying job and becoming an entrepreneur. And it's one of those things where, back then there wasn't nearly as many resources or training programs. So, in a lot of ways, I'd like to think that my mom was actually a visionary, quite ahead of her time because now we live in a world, in a society where there are business support organizations everywhere. Particularly in the last few years, a lot of support for Black and Brown owned businesses that simply did not exist 25, 30 years ago. And yeah, my mom was the only entrepreneur in the family and certainly the only entrepreneur that I knew.
[00:05:16] Sanjay Parekh: Yeah, I got the same thing when I quit my first job to start my first company as well. Like, why would you quit a good paying job? This doesn't make any sense. Just a couple years out of college on top of that. I can understand that experience quite a bit. For you, though, when you started your first company, was that your first entrepreneurial thing, like doing the insurance thing? Was that your first entrepreneurial thing or had you done side hustles or things like that when you were younger when you were a kid?
[00:05:46] Racheal Allen: Oh, for sure. So, I was that person in high school that was braiding hair, cleaning houses, babysitting kids. In college. I was writing people's papers, so not just proofing them. I would be like, give me 150 bucks, I will write this for you. I was an English major in college, so I totally wrote a ton of graduate level thesis and reports And so I was always doing things to augment my income, not really realizing that hustle mentality was something that would be a theme that I would carry into business. But for sure, starting the insurance business was the first time I had ever sold anything and had ever officially launched a business by myself. And I think the really great thing about that particular experience is by buying into a franchise, I was essentially buying a playbook that would become replicable. I didn't realize that at the time, but by learning from a company like that, you actually are getting the exact framework that's going to be necessary for launching most kinds of businesses.
[00:06:46] Sanjay Parekh: Yeah, sounds like you were ChatGPT before ChatGPT existed helping write papers for people.
[00:06:53] Racheal Allen: Oh, for sure. And I got to tell you, just last night ChatGPT saved my life. And so anytime that I think about writing something, the first thought is, ah, ChatGPT. I have the premium version and it just is so amazing. I got to tell you, if you are not using that for your business, you are missing out.
[00:07:12] Sanjay Parekh: Yeah. When you started up this business that you're starting now, that you've got now, Obsidia. How did you start that? How did you come to the conclusion like, hey, I need to do this. And how did you get going and how did you find your first client for it as well?
[00:07:27] Racheal Allen: Yeah, so I would say the consulting had always been a part of something that I would be doing organically. So, friends, family, they knew they could call me, I would coach them through things, and I was doing that completely for free. Didn't even have the desire to figure out how to put a price tag on it. And so, I had this idea once where my husband and I were actually starting a new business together. We were starting a photo booth company together. We took a small business class in the community, and that's when I realized that there were so many programs that existed that taught people how to start businesses. There were no programs that taught people how to operate their businesses. And so, that was one of my first aha moment of, is there a way that I can coach and consult and help people learn about their business operations, specifically with an emphasis on systems automation and delegation strategies.
And so that quickly turned into something I was doing on the side as this, like nights and weekends I would offer these boot camps. I ended up starting out charging $250 for the first bootcamp, which was six-week program. I doubled it to $500. It sold out. I doubled the price again to $1,000 for that same bootcamp. It sold out in 90 minutes. And that's when I really realized, I'm onto something. And so, I really started thinking, okay, if I can educate these people, they're going through the classes and they're like, Racheal, this is great. I just need somebody to do it for me.
That is when that next level of the business unlocked for me that, hey, what if I built a team of people who could actually do these things for companies? It took a bit of a pivot to realize that the small businesses were not our clients. But foundations and large nonprofits, even high growth startups were our clients. And so, our first real client underneath this particular pivot was a youth development organization. And so, we were able to say, all right, hey, I know the nonprofit space because my corporate experience helped me build that out there. They needed a fractional operations consultant, right? They weren't quite ready for a COO, but they absolutely needed somebody that they could leverage their expertise from. And when that client became nearly a six-figure client, and they actually agreed to pay me the price I was looking for. I even further knew this was the niche.
And so, since then we've been able to really grow and scale, get even more specific in our niche. So now we offer program design where organizations come to us, and we build entrepreneurial training programs for them. We white label some of our curriculum and content. We make it unique to the communities that they serve. And then we also do this fractional chief operating work where we become the COO for organizations across the country. And so, I think for me, in just a really short amount of time, we were able to understand there's a need for this, my skill and my expertise really uniquely lends itself to that. And then adding that equity lens, I think is really what helped make us super attractive to some of our clients.
[00:10:22] Sanjay Parekh: Interesting. Interesting. So, when you were starting all of this, and this is a weird question now because you've been doing it for 20 years as a founder, but maybe it's still true, was there anything that made you nervous about starting this business or gave you pause when doing this?
[00:10:44] Racheal Allen: Oh, for sure. I've had the technical expertise for 20 years, but I think the anxiety came from, will someone pay me this price to do this thing. And because this work has come so naturally to me for years, it was hard to understand that I could make a living at something that came so easy to me, particularly because I thought the business that I would really choose would be harder.
I think that's typically something I see with a lot of the founders that we work with. We tend to take our gifts and talents for granted. So, we don't quite realize that me being neuro divergent and in my brain operating in a way where it's constantly looking for ways to be more efficient, is actually a skillset set that organizations would put value on and would pay for. And so, I got to tell you, starting out with that very first bootcamp being $250 and shaking in my boots, thinking that someone would pay it, when I realized that my client was actually again, a foundation or a large nonprofit. I actually exponentially increased my rate to where our clients pay nearly six figures for a one-year engagement with our team. And literally telling that story of saying, this exact same strategy that I was using that originally was $250, within four years is six figures, was just a really clear way to me to say finding the right client, finding the right way to solve their problems, and making it lucrative enough for me to be able to build a team and design the kind of life I wanted to live. There was truly a niche for that.
[00:12:14] Sanjay Parekh: So, how did you and I feel like this was that nervousness a little bit, how did you come to that $250 price point initially? Because obviously you vastly undervalued that, right? Because you doubled and doubled again. So how did you come to it originally?
[00:12:32] Racheal Allen: The problem that I thought that I was solving for people is, would a group of entrepreneurs invest $250 to participate in a beta program that will help them learn how to build operational capacity? I've got to say that up until that point, particularly in the metro Detroit area, no one had actually presented curriculum and programming in that way. So, there were lots of programs of, Hey, we're going to teach you about marketing and a little bit of financial, and we're going to bring in these guest speakers. We're going to do this thing. What I was proposing is, I'm the facilitator. And we're going to talk about operations.
And so, I think the nervousness around that was like, am I qualified enough to be the person who can do this? So, the $250 price point was I also wanted to make it affordable to the people who I wanted to participate. And so many of them were really struggling and weren't really generating revenue. And so, for some of them, even the $250 investment was a stretch. And so, what I think got tricky for me was when I would double the price just to beat off some of the demand because so many people wanted to work with me. It started to feel incongruent with my desire to help more businesses. And that is actually what encouraged us to turn that part of the business into a nonprofit. And so now our programming is completely free to our entrepreneurs. We go after grants and philanthropic dollars to support our work. And we're helping more entrepreneurs than we ever could have imagined, but there's still some skin in the game for them because they still have to invest in that six-week time commitment. But our graduation rates are proving that people associate value with it and want to be a part of what we're doing.
[00:14:09] Sanjay Parekh: Oh, that's so interesting. And I love how you pivoted that into a nonprofit to be able to really achieve your goal, which is reach and impact. That's great. Okay, running all of these companies is obviously going to create stress for you and kind of the team and everything. How do you manage owning and running all of these things — the nonprofit, your for-profit, all of these things — with life and everything else that you need to get done and take care of yourself?
[00:14:42] Racheal Allen: Yeah, I got to tell you, that is the million-dollar problem that so many of our students, small business owners and clients are trying to solve. So, I really try to lead by example of being transparent about one, how difficult it is to be a CEO. There is a big difference between having a side hustle, running a side hustle alongside your corporate job, and then attempting to do this work full time as a career.
And so, a lot of the hustler mentality that I had that was really resourceful in getting me to this point no longer served me. So, as a CEO, it's the hardest thing I've ever done. And I try to tell people that because if I'm not slightly discouraging them from getting into entrepreneurship, I haven't done my job because I think we do a great job of making entrepreneurship sound sexy and quitting your job is being really great. There's so many reasons why I try to discourage people from doing that path.
But I also am transparent about the mental health challenges that the stress of being a CEO and an entrepreneur will create for you. And so, I have to be just as unapologetic about carving out self-care time, and rest, and sun, and all of the things that I need to be a better human, because if I'm not getting those things, then I'm not actually serving my clients in the best way. I'm not serving my team in the best way, and I'm always on the brink of burnout. So, I got to tell you that the job is not easy, but it's hard and it's hard for a reason.
And I definitely like to share that because when other CEOs and entrepreneurs are saying, this is really, really hard, it means they're probably doing it right. If it's so easy that you're like, oh, I'm not stressed about anything, you're probably not making CEO decisions, because those CEO decisions are generally tied to other people's livelihood, it's tied to your own, it's tied to sustainability. It's tied to finances, growth, expansion, and I honestly will say entrepreneurship has been one, if not the most exhilarating thing I've ever been a part of, but it's also been just as equally challenging.
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[00:17:09] Sanjay Parekh: Before we started recording, you mentioned to me you do this unique thing that helps you recharge. So, tell us about what you're doing right now.
[00:17:18] Racheal Allen: So, right now I am at an Airbnb that is in Detroit. Once a quarter, I call myself creating a blackout week. So, at the top of the year, I looked at my calendar through the end of 2023 and I put a five day stretch every quarter on my calendar where I would simply rest and recharge. And so, this is important because that rest is different than a vacation. It's different than just staying at home. So, for this reason, I'm not at my actual house. I've gotten a change of scenery. I can walk to get coffee. I actually just met a friend for coffee and I was able to walk to do that.
But the blackout week is really important for me because what it helps me do is pause. I get to focus on things like more fun and spending time with friends and people who light me up, but I have to carve out space to mentally rest and recharge. My work can be really intense. I tend to work really long days. Sometimes I even work seven days a week and I tell people, no one cares that it's a Friday at five o'clock. No one cares that you've worked seven days. The work dictates the work. So, because I have to be sometimes so aggressive in the way that I'm delivering value to my clients, I have to be equally aggressive in carving out time for me to pause and rest. And so being able to show my Calendly link to someone and they can't book on that week, I'm not going to work around it. I'm not going to squeeze people in that week. They can wait. And then in that time I get to really rest and recharge. So again, I've been having great lunch and dinner. I've been taking naps in the middle of the day. Again, having fun and just doing things because they're fun, not because they make money, but it's been really helpful for my mental health to have something to look forward to. And to come back to the work just as energized and refreshed as when I left it.
[00:19:10] Sanjay Parekh: Yeah. So, during this week, is your spouse there with you as well or are you by yourself completely?
[00:19:17] Racheal Allen: Mostly by myself. So just last night, my husband and I went out for dinner and for drinks. And then he left because I think he understands that as me being a textbook introvert, these are the kinds of things that I need to be able to have just for myself and I don't really like having to share them. But I welcome him into my bubble for just a little bit. And that was really nice. But most importantly, I do it by myself. And again, I think that's important because in my work I am giving so much of myself, my time, my energy to my team, my clients, to new business and business development. It is really nice to just binge watch Queen Charlotte and I'm like, yo, people get to just watch episodes of TV, like one episode after the other. You can do that?
And so I think, again, just having no place to be. Not a lot on my calendar, but also the clarity to say, hey, I have some projects that I want to get across the finish line that I don't want to squeeze into just an hour or two to do. Just feels really, really nice to be able to do. And for 2024, I am going to move that up to every other month. And then I'd love to be able to carve out a time where at least once a month, there is a week that is downtime for me. And so, I got to work my way there because business is going so well for us that will be a little bit prohibitive. But I really want to work towards making sure that it becomes more of what my day and week looks like and less of something I have to retreat to.
[00:20:44] Sanjay Parekh: Yeah. Yeah. This binge-watching thing that's all the rage is fascinating sometimes to do. And I definitely do it sometimes as well.
[00:20:52] Racheal Allen: Yeah. I typically don't have a lot of time for TV, so it's great just to enjoy a show, really fun.
[00:21:02] Sanjay Parekh: What's since we're talking about TV shows, what's your genre that you love a lot? Is there a specific type of show that you like?
[00:21:11] Racheal Allen: Oh, there is. And it's true crime. So, I got to tell you, I am probably one of the biggest true crime aficionados you've ever seen. Dateline has been my favorite show since I was about 12, and I love the problem solving. So, you know that there's a murder, somebody's guilty. By the end of the episode, they're going to be convicted. And generally, you just don't know how you're going to get there. So, I love a good documentary style storytelling. But also, I'm always fascinated by the criminal mind around how people think they can get away with these things and they typically can't. I got to tell you, my biggest next goal is to get to CrimeCon, because I think I will have found my people at the next one of those.
[00:21:56] Sanjay Parekh: The way you talk about these true crime things is very much like an entrepreneurial mindset too, right? There's a problem, we've got to solve it, there's a solution. We just got to get there to the answer. And also, I did not know there was a CrimeCon. But there you go. It's not surprising, but there you have it. Is this just like true crime aficionados at CrimeCon? Is that what that is?
[00:22:19] Racheal Allen: Absolutely. So, it's like, all of the different shows, all of the different networks. A lot of these shows have cult-like followings. And so, I think there are so many people, particularly we've gotten into like podcasts about it, which I really love as well. But I do think that there is this just really strong attraction to the storytelling, right? So, Keith Morrison has got to be my favorite person of all of them. It's the voice, the tone, the way the stories are told. But also, in a way that I think gives empathy to victims on both sides of the crime. And I just think that the way that those stories are told with such care is just really important.
[00:23:01] Sanjay Parekh: Yeah. Okay. Let's get back to business and entrepreneurship before we lose listeners thinking like, why am I listening to a true crime podcast all of a sudden?
Let's talk about the systems and technology and apps that you use. You already mentioned ChatGPT that you absolutely love. What are some others that you use and have implemented that you would absolutely recommend to others who are running their own business?
[00:23:27] Racheal Allen: For sure. So, we actually teach a course in operations school where we learn all about systems. And I like to say that there are different systems that you need to run different parts of your business. As an example, a very important tool to use is some type of customer relationship manager or a CRM. That's going to help you track things like the conversations that you're having with people. It might keep track of all of your projects in one place. And so, for that, I like to say that you need a system to manage your projects. So, we use apps like monday.com to help us really keep track of all of the nuanced things that go into managing those projects. I love a system like QuickBooks and bill.com to manage our invoicing, our accounts payable, our accounts receivable.
I even use Calendly. It's something I do use every single day, and I play this game where if I'm working with someone, I typically share my Calendly link first, and now you got to work around my schedule. And so, I love that I'm always looking for apps and technology to solve the problems that I face, but I also try to really encourage folks that there is an app to solve every problem that you have in your business. We tend to default to a place of doing something that's more manual or adding people to solve a problem. I typically look through the world through a lens of what technology already exists. So that I can solve my problem quicker and more efficiently and spend less time thinking about these kinds of things.
[00:24:55] Sanjay Parekh: Yeah, that's great advice. Okay, so thinking now, you've been an entrepreneur for quite some time. If you could go back in time and do something differently, what would that be and why?
[00:25:12] Racheal Allen: Oh wow. If I could go back in time and do something differently, I would've taken a bet on myself and stepped out into full-time consultancy sooner. I think I thought that I needed more degrees or more corporate experience, but my intuition has always been one of my best tools in leadership. And I've always had the same passion for supporting entrepreneurs and organizations today that I did 20 years ago. I think that particularly for women of color and for black women in particular, imposter syndrome is real. And so, when we look at, can I have a six- or a seven-figure business, we think I have to have all of these other credentials and letters behind our name and all of these other things. And I got to tell you, I was one of those people. I am super accomplished as it relates to awards and accolades and all of those things. So, to a certain degree, I needed that to continue to build credibility for the work that I do.
But knowing what I know now, I would've taken a bet on myself sooner. And the same way that I had to get to the end of my corporate career, to cash out my savings, quit a corporate job, and do this big scary thing, I would've done it sooner. I would've done it less afraid, with less money, less responsibilities. And I just would've simply done it sooner. And so, I think that when I meet people who are in that place that I was, where the job is burning them out, not living up to your fullest potential is burning you out. Those are signs that it's time to just take that leap. But most importantly, when you're betting on yourself, you can't lose. So, knowing that today, I would've just taken the leap sooner.
[00:26:50] Sanjay Parekh: Yeah, that, that is great advice. And I think we see this all the time, right? It is a scary thing. But I think you got to think about what's the downside, right? Like, you can always go and get a job again, right? Like it's not like it's a one-way street that once you quit your job and become an entrepreneur, that you can never go back, right? Somebody will take you back or you just got to find the right place if things don't work out and then, give it another try maybe later on down the road. So, you've been working with companies and helping with their ops and things like that for quite some time. What's one of the biggest mistakes that companies make in dealing with their operations?
[00:27:32] Racheal Allen: Ooh. I would say they wait too long to get the right systems and technology. And so, typically when people are calling us, they are at a critical point in their operation where they're being forced to integrate systems and technology. Some really recent examples are, a client is getting a new contract and they have to double the size of their operation, or they have to hire new staff. And these things typically have to happen quickly. And because most of our businesses that we work with are, they're still considered small businesses, right? They've got 49 employees or less, but they're still big businesses. Change has to happen much faster in small businesses than it does in a corporate bureaucratic organization.
And so, they recognize that they need systems and automation and integrations, and they need to come to the 21st century, but they've usually waited too long, and so now they're losing business to their competition. They're not as competitive with their staff and folks that they're looking to hire. And so, I think that when businesses are generating revenue and they're making money, they tend to not want to break what isn't broken. So, they stick to those outdated policies, procedures and the way of doing business, because that feels safer and more comfortable.
But I definitely encourage folks to start with systems in a way that says when you have one or two clients, you should still be using Calendly to schedule them and all of these other tools to manage them. So, treating those two clients as if they're your biggest two clients, because eventually the same level of energy or the same infrastructure that you're going to need for two, you're going to need for 20. And so, I would say folks just need to start sooner with systems.
[00:29:17] Sanjay Parekh: Oh, that is great advice. Okay. Last question for you. If you were talking to somebody who's thinking about taking that leap and starting a side hustle or turning their side hustle into a full-time business, what advice would you give them?
[00:29:33] Racheal Allen: So, that feels multi-pronged, Sanjay. I would start with that side hustle that you're doing. I would encourage it to be something that's tied to a passion that you organically have. People typically want to start side hustles because they make money. And I got to tell you, that is the most ridiculous advice you will do. I want you to pick that thing that you think you can't get paid to do because it's come so natural to you, right? You take it for granted. It's something that you can do in your sleep. It's almost effortless.
Those are the kind of businesses that you should use as your side hustle because the more you love it and the more natural energy you have towards a thing, the more handsomely you're going to get rewarded with money, because that's just an energetic exchange. So, I encourage people to tie their side hustle to something that they love and that they love naturally. Set the money aside.
The second piece is once that side hustle is starting to compete for space in your real life, that's when you start to think about it as a business. So as an example, if you are making so much revenue in your side hustle, that it's starting to conflict with your day job, that's a sign that it might be time to grow. If it's consuming so much of your energy and you love it so much that all you can think about is doing that thing, that's probably a sign. And so, I would also say, if you found that thing, give yourself an incremental pathway of sustainability.
You don't have to quit your job to see if your business is going to work. But you might have to say to yourself, maybe I can't do all of these other things. I have to be a bit more selfish with my intention as I figure this out. And so, I encourage people to take that path, right? Which is, start the thing that you love, find a way to make money doing what you love to do. You hear people say that it's so cliche, but it's just really true. And the money will come. I had no idea that doing the kind of work that I loved so much would turn out to be such an amazing group of businesses to have. And it's given me a really rewarding life because I tend to focus on the passion that I have for the work and less on the money.
[00:31:36] Sanjay Parekh: Yeah, that is great, great advice! Rachel, this has been awesome. Where can our listeners find and connect with you online?
[00:31:45] Racheal Allen: They can reach me at rachealallen.com and that's R A C H E A L Allen.com. And I would say I'm on LinkedIn, a little bit on Instagram and Facebook, but mostly through our website. If you'd love to learn about the work that we do, you can check out my personal brand there. It takes you to all of my different places in the universe.
[00:32:05] Sanjay Parekh: Awesome. Thanks for coming on the show today.
[00:32:07] Racheal Allen: Thank you for having me.
[00:32:12] Sanjay Parekh: Thank you for listening to this week's episode of the Side Hustle to Small Business Podcast, powered by Hiscox. To learn more about how Hiscox can help protect your small business through intelligent insurance solutions, visit hiscox.com. And if you have a story you want to hear on this podcast, please visit www.hiscox.com/shareyourstory. I'm your host Sanjay Parekh. You can find me on Twitter at @sanjay or on my website at www.sanjayparekh.com.