Mike DeJong

The following is a lightly edited transcript of the conversation, cleaned for readability while preserving the original meaning and voice. Some filler and repetition have been removed.

Henry Harrison: Welcome to the Henry Harrison Podcast — entrepreneurs, business, and finance. Today I'm very pleased to have Mike DeJong on. He's a repeat entrepreneur and a franchise owner, and he has a really interesting take on a lot of things that I think we're going to find interesting and exciting. Hello, Mike.

Mike DeJong: Hey, Henry. Thank you for having me on today. I'm excited for the conversation.

Henry Harrison: Let's start with what you're doing right now — your current business — and we'll have time to go back to how you got here and the trials and tribulations along the way. But right now, where is your business situation? I'll mention that the company you're a franchise owner with is Nothing Bundt Cakes. We have a lot of them in Dallas–Fort Worth, and you just shared with me — which doesn't surprise me — that the headquarters is actually in Plano. There's one two miles from our house. My older sister used to make them for me when I was a kid, and then I learned to make them myself. Who doesn't like having a good cake? What a fun thing to be involved with.

Mike DeJong: Yeah. The only thing people like more than cake might be ice cream — though you'd have people who would argue with that. It's a really great brand. It was started by two great women about 30 years ago in Las Vegas, and they live their values. They really do. I just love that brand.

Henry Harrison: Neat to hear. So right now you own several franchises. I understand you've sold some and you're building more. Explain where you are right now.

Mike DeJong: I recently sold the last of my Wisconsin franchises. I brought the first ones into Wisconsin and built four there. Someone came along and asked, "Hey, do you want to sell?" I said no. Then they made an offer I couldn't refuse, so I said, "Sure, I'd love to sell." Before that happened, I'd actually bought an underperforming franchise in the Seattle area, so I was pivoting out there. That's where I am now. I have that franchise, and I'm looking for real estate to build two more in that area. We'll see where the growth takes me from there.

I have a lot of fun starting them — that's my favorite thing to do. I love figuring out where to put them, the right locations, the demographics. I love the building process. A lot of people hate that stuff, but I absolutely love it — getting them open, getting them profitable. Then I slow down and become less excited. But we can talk about all that. That's where I'm at right now.

Henry Harrison: I can understand that. Buying an underperforming one — obviously you thought you could change the limitations that were in place before you bought it, and you've been able to.

Mike DeJong: Yeah, and I was right. At that point, Nothing Bundt Cakes had never closed their doors — I think there might be one now, I'm not even sure. It's a franchise that just keeps going. It's beloved and kind of hard to screw one up. So this one wasn't dying by any means, but it wasn't doing as well as it could.

The major problem I found was that they'd lost their customer-centric focus. A lot of what they were doing was to make things easier for themselves. If someone placed an order, it was, "We could have that for you in 24 hours," when it should be under 20 minutes. When DoorDash and Uber Eats integrated with the platform, they said, "We can only open that for a couple of hours a day, because that's when we have the most people in the building to fulfill orders." Those should be 10 to 20 minutes too. Every cycle I looked at was about how it could be easier for them, not better for the customer.

So I made some tweaks to make it more customer-centric. I know it sounds simple. It took a year — it took a year to make that happen, Henry. But the success started to come. We grew from about minus 12% to positive 30-something that first year, right around Mother's Day.

Henry Harrison: That's one of the keys to business. If you can boil the goal down to something comprehensible, simple, and understandable, you can apply it in multiple ways. When you first get there, you don't know — you just know they're losing money. So you have to make sense of it. What's going wrong? Why are they losing money? Gradually you peel away the onion, and then you have to figure out how to turn it around and put all the mechanisms in place to provide that service when it wasn't set up to work that way. The fact that you can say it simply is really important.

Mike DeJong: Thanks. I just didn't want to oversimplify it to, "You go make it customer-centric and everything's wonderful." No — you have to change the culture in the location. You have to let the community and your customers know you've changed the way you do business, that it's not 24 or 48 hours to get something, it's 20 minutes. There's a whole process around it. It's weird — I find some of it fun, especially in hindsight. But in the moment it's certainly not fun. You're thinking, "Why do you not see what I see?"

Henry Harrison: So when you buy a franchise with Nothing Bundt Cakes, how does that start out? How do they help you? Give us a roadmap. You mentioned they live the values and they're growing fast. What are the values? What can we learn from the success? You're having quite a bit of success now — multiple franchises, some sold at a profit, more on the way. I'm sure you go to seminars and there are days' worth of things to talk about. We have 30 minutes, but give us a few minutes on what Nothing Bundt Cakes does well. Obviously they have a great product, but there's a lot more to it.

Mike DeJong: Sure. I can't talk about the secret sauce — that's the secret sauce. But I can talk in generalities. The big thing Nothing Bundt Cakes does is they're customer-centric. It's, "How can we best serve our clients? How can we be part of their day-to-day celebrations?"

I went into it as a jaded businessperson. I thought, "Yeah, customer-centric, celebrations — okay, the numbers look good, let's go make some money." But within a month of opening the first store — actually, it started during training — I started having these personal experiences. A woman came in wanting a few dozen Buntinis. I asked what she needed them for. She said, "I'm taking them to the hospital where I had my double lung transplant. It's my third anniversary, and every year I bring the nurses on that floor some treats." I said, "Wow, that's amazing."

Another one still chokes me up. In the first year, a woman came in every day and bought one red velvet Bundtlet at around the same time. One day I asked, half-joking, "You get the same one every day — is this your favorite? Do you want to try something else? Get two so you can skip tomorrow; they last a couple of days." She said, "No, they're not for me. This is my dad's favorite cake. He's in hospice just down the road, and this is the only thing he'll eat." I get choked up just thinking about it.

Henry Harrison: It makes me choked up too.

Mike DeJong: These moments start to compound, and you don't get jaded with them. We're there on people's birthdays, the birth of their children, wedding days, every religious and secular holiday in between. Cake is a big part of so many cultures' celebrations, and we're right there with them. And they tell you the stories — that's the great thing.

At first, as a jaded businessperson, I thought, "Buy the cake, leave." I shouldn't say that out loud, but it's true. Within a few weeks I started asking people about the stories — not, "Oh, I'm going to a party," but, "Tell me about the person," or, "Why this cake? Why this flavor?" And they open up about the reasons and the history. That's what I mean when I say they live their values. They make it easy for us as franchisees to set up for success and become part of people's lives.

They put service steps in place. They say, "We demand that you do these things for every client and every customer — don't just turn them into a number at a kiosk." You go to certain places with golden arches, walk up to a kiosk, press some buttons, a number prints on a receipt, they call out "263," and hand you a bag. That's not what we do at Nothing Bundt Cakes. We truly connect with the individuals, and I think that's what makes the franchise special. And on top of that, the cake is amazing and the frosting is next level. They really do live their values.

Henry Harrison: Most people have stories around cake. My first thought was, "I was so excited — my sister's going to make a Bundt cake," as a little kid in the kitchen, waiting for it to be ready, then going out to play until it was done. That's a neat point. I guess I intuitively knew it, but I wouldn't have laid it out the way you did, because I don't have a business like yours. So when you go in and pick locations, is that something you do on your own? You get some support from them, but ultimately you're the one who says, "I want to build here," and you're putting your money on it, right?

Mike DeJong: Yeah, and that's evolved over the decade I've been with the brand. When I started, you'd pick a few locations. They had a national commercial real estate company that would guide you, and the president at the time would actually come out and visit the location to bless it — "Yep, this is a good spot." But over the last decade, with the growth — back then we were doing maybe 15 or 20 locations a year, now they're doing over 100 — that's not the best use of people's time.

Henry Harrison: Just to note: there are hundreds of these stores across the country, getting close to 1,000 from what I understand.

Mike DeJong: That's correct. As they've grown, they've evolved. When I got into the brand, one of the original partners had recently exited, so it was owned by one of the partners along with a private equity group. A few years ago she exited, so it was owned by the private equity group. A few months ago we were bought by a different private equity group. But through all those transitions, they've kept that heart-centric, customer-centric focus that made us so successful, which is amazing.

The evolution is that they bring in people who have grown brands from a few hundred units to potentially thousands. I don't know what the upper limit is — I'm not in that part of it. They've brought better analytics on the areas we should go into. Even when I got in, we knew certain co-retailers generally meant better sales with our demographic — a Target was usually a good place to be, or a Trader Joe's or a Whole Foods. If we had one within a mile, or in the same parking lot, even better. Those were the people coming to our stores — not exclusively, never exclusively, but more often.

Over the years — for the last one I physically opened, they gave me the top 10 consumer types that came in: here's how they interact with us, here's how they interact with the community, here's how you define them, here's where they overlap on where they shop. It really helped zoom in. Then you get the basics: What's the car count? Is there a stoplight to get out of the parking lot? How much room do you have? How much room does a person have to open their car door and get out with a car seat — because a lot of our demographic is young women with small children. Can they get in and out of the parking lot easily? They might come once, but they won't come again if they can't make a left turn. And that's not exclusive to women — that's everybody.

Henry Harrison: Where are you living right now? Wisconsin?

Mike DeJong: I'm homeless.

Henry Harrison: I was going to say — you're traveling to Seattle, you're selling here, and that's a lot of space between.

Mike DeJong: Yeah. I was in Wisconsin and Seattle, then Wisconsin, Virginia, and Seattle, then Virginia and Seattle. Now I'm literally on the road. I sold my house. I don't have a fixed address — well, you have to have one, so it's more of a friend's address. I live in Airbnbs. I'm in Virginia right now, just outside Washington, DC, in a place called Reston. I just spent two months on the Gulf Coast in Galveston, Texas, and two months before that in southern Florida near Naples. I'm trying to figure out where I want to be. My kids are grown — one's a commercial pilot, the other's going to grad school — so I don't have that tie. I've learned to run the business remotely, so I figured, "Where do I want to live? Let's go on the road for a year or two, try some different spots for a month or two, and see how they fit before I make a decision."

Henry Harrison: You have to staff up these locations. Do you hire a general manager who does that? How does it work?

Mike DeJong: Each location has its own general manager — that's exactly right. As I grow from one to more, I'll put in a district or area manager, whatever you want to call them. I'm not big on titles. I'll ask, "What title do you want? Great, that's who you are," so they can manage the growth. I bring them in before I grow, which is a profitability hit — you're paying another salary you maybe aren't ready for. But I've learned that if I want to live the way I want to live — and for me, freedom is not going to the same place day after day, it's being able to travel like I'm doing — I have to have that person in place to manage the day-to-day, week-to-week, and month-to-month. We check in twice a month, usually a few hours each time, and there are some KPIs I look at in between. That's how I've learned to do it through trial and error.

Henry Harrison: Let's talk about the trial and error. You didn't just wake up one day knowing how to run a franchise business, hire general managers, pick locations, work remotely, and establish customer-service practices and cultures. How did you get where you are now?

Mike DeJong: How far back do you want to start?

Henry Harrison: It's interesting that you had an engineering degree, and it seems you went to H&R Block — not engineering, but operations.

Mike DeJong: Operations, yep.

Henry Harrison: When you were a kid, did you think you'd be an entrepreneur? Did you have entrepreneurs in the family?

Mike DeJong: No, not at all. I grew up in a small steel town. All we knew was that the steel mill was the major employer, and a small paper mill was the secondary one. That's what everyone knew, and I wasn't super interested in it. I thought I'd be a pilot or an astronaut. The astronaut thing didn't work out, but I did fly for a few years before I got an engineering degree. That was my introduction to entrepreneurship — I was flying business executives around, and I had these important people in the back of the airplane, at least important in their own worlds. I started thinking, "How can I be one of them? I don't want to drive them around — I want to be one of them." That planted the seed. I didn't act on it for another 15 or 20 years. I did the engineering route and worked in steel mills all over the world for a long time, which was a lot of fun, then operations with H&R Block in between, and then into franchising. And along the way I always had a few "jobbies" — hobbies I turned into jobs, or side hustles, as some people call them — going on out of my garage. That's the broad-strokes evolution.

Henry Harrison: Somewhere along the line you landed on the Bundt cakes business. You've written a book, and you're passionate about talking about — I'll let you tell what you're passionate about, because it's not always easy.

Mike DeJong: No, there have been so many challenges along the way, and that's why I wrote the book. Enough people I'd worked with and helped over the years said, "You've got to write this stuff down. This is gold. You could help more people." After some resistance, I did.

The major overarching theme is that we are our own roadblock. We get stuck in something I call the operator trap. A lot of small business owners — myself included — work really hard to figure out everything we don't know to build a successful business, and we grow to a certain point. That point is different in every business — for some it's $100,000 a year, for some a million — but you're going to hit your limit. Then there aren't any more hours to work. There are only 168 hours in a week, and you have to sleep some of them. Even if you only need four hours of sleep — I'm not that person, I need eight — you should probably work out, eat occasionally, shower. Of those 168 hours, what are you going to work, 100? 110? 120? There's only so much. The thing that made you successful is now the thing holding you back. I like to help people recognize they're in the trap and give them a path out — from being an operator to a true owner of their business.

Henry Harrison: Did you fall into some traps that you managed to get out of? I'm guessing you did.

Mike DeJong: So many. The most traumatic one happened most recently — still a few years ago, but it was bad. I thought I'd worked my way out of the trap. I thought I'd put the people, processes, and procedures in place, delegated properly, and was looking at the right KPIs. I was off having the best year of my life, traveling all over the world. I went to Africa twice that year, went on four different safaris — I can't even remember everywhere I went. My major KPI was: is there money in the bank? That was it. "Look, there's money in the bank, we're doing great." I'd check in — "How's everything?" "Everything's great."

Then January rolls around. In the cake business, we make a lot of money from Thanksgiving to Christmas — probably a quarter to a third of annual revenue — and that holds us over until Easter and Mother's Day, because for some reason people don't want to eat cake in January. They're on diets or something. And there was no money in the bank. In fact, I was trying to figure out how I was going to make payroll. I thought, "Wait — I should have a buffer to hold me over, and I'm not even going to make payroll."

My first thought was that someone must have been stealing from me. I went through everything — no, nobody was stealing. So the immediate concern was making payroll. I had to find cash. I went to the bank and they said, "No, we're not going to give you a loan, because you have nothing to borrow against. Look at your numbers — they're terrible." So I did the most horrible thing: I went to high-interest lenders and credit cards to get the cash to make payroll. That bought me some time. I was essentially bankrupt. I had weeks, maybe a month, to fix it. And I owed it to my people — as a small business owner, you're responsible for so many lives. You're putting food on their tables, and I couldn't believe I wasn't set up to do that for them.

So I dug in. Our labor had doubled, in some cases tripled, but our sales were down. I thought, "This is crazy. Why are we paying so much more?" The procedure said: if we're not producing this many cakes in this amount of time at these sales, hire a new person. So they hired a new person. What the procedure didn't say was, "Are the people you already have working at the minimum speed?" We had people working at 10% or 20% effort, and they just kept bringing on more and more people. Would the right manager have figured that out without it being in a procedure? Yes. But I didn't have the right people in place. I had great, very nice people who were wonderful with customers and beloved by the staff, but they didn't have a business mind at all.

So I had to step back into the day-to-day. I had to decide what my right KPIs were. We had to rightsize the labor pool, which really hurt — when people's hours get cut, they tend to go work somewhere else, and we lost a lot of good people, which bothers me to this day. I understand it: if you're used to 40 hours and I can offer you 10, you're going to go elsewhere. But on the flip side, if I'd kept everyone at 40 hours, I'd have had to quadruple sales, and that wasn't happening in two to four weeks. Decisions had to be made.

We went back to first principles. I looked at the people I had in charge and the KPIs I wanted them to meet every day. Sales per labor hour was a big one early on. I didn't have to fire anyone, because people started self-selecting — "This isn't the job for me." I had B and C players, and as soon as you start measuring them, they don't want to play anymore. But A players love to be measured. So I started attracting better talent. I made some mistakes — hired several wrong people during that transition — but finally figured out the formula: the right people, the right incentive plan. A year later, I had a better set of KPIs and got everything back on track. I still get caught out once in a while, but never to that extent. Thinking back on it, there were a lot of sleepless nights. It was really scary.

Henry Harrison: You keep mentioning what to look at — KPIs. Just so everyone understands the acronym.

Mike DeJong: Key performance indicators. What are the things that are actually going to move the needle? At one point during that period, I started measuring everything — spreadsheet after spreadsheet. But if you're measuring everything, you're really measuring nothing. I asked, "What are the ones that will really move the needle?" In our case, it was: how much cake are we sampling? If I get someone to try the cake, they're probably going to buy one, so that was important. And sales per labor hour — how efficient are we for every hour of labor in place? Those two became really big. And then, are we still maintaining quality?

I didn't care about the overall net promoter score by itself. People say, "Look, you're at 95%, yay." But the details are in the rest of the report. I loved looking at likelihood to recommend and likelihood to return. If those were in the high 80s, I knew we were doing something right. Digging deeper — and I still do this to this day — once a week I pull all the lower reviews and look for patterns. It's not one time, "Henry was mean to me at the front counter" — maybe Henry had a bad day, maybe the customer did, maybe there was a misunderstanding. Not that I wouldn't say, "Henry, be nice to people at the front counter." But I look for patterns in the negative data, because those are opportunities to help people.

That was a mindset shift. I used to think, "This is terrible, people don't love us, what are we going to do?" But the people who actually take the time to tell you what you're not doing right are maybe one in ten, one in a hundred. People usually don't take the time. They've given us a gift. Let's use that information to improve, and keep making constant, never-ending improvements — more customer-focused, more customer-centric. But never on just one data point. You have to look at many.

The flip side is that when you get the right people in place, you can build confidence — not set it and forget it, but build the confidence to not have to be there every minute of every day, to not be the roadblock to growth. If you can rinse and repeat bringing in the right people, you can keep opening new locations. If it's all you, there's only so many you can do.

Henry Harrison: You've had numerous careers — engineering and steel plants around the country, H&R Block — but you've been a franchise owner for almost 10 years now with Nothing Bundt Cakes. You also had a short stint owning a different franchise, OsteoStrong, which I understand was a success as well.

Mike DeJong: Yeah, that was another great franchise. Everyone should go take a look at them. It's a 10-minute, once-a-week, no-sweat workout — you could show up in high heels, whether you're a woman or a guy; I don't discriminate — that helps stop or reverse osteoporosis and osteopenia. Every person, when they hit age 30, loses about 1% of their bone density a year. That's why we see people stooped over later in life. Women unfortunately lose more when they go through menopause, which is why men don't get stooped over until 20 or 30 years after you start seeing it in women.

It's a great franchise that serves a real need in people's health. I saw it at a Tony Robbins event and thought, "This is interesting." I tried it, looked at the numbers, and they started making sense. I was thinking of opening one. Then, similar to buying the distressed Nothing Bundt Cakes in Seattle, there was a distressed OsteoStrong in Colorado Springs. I bought it for about nine cents on the dollar of what it would have cost to open it, and they were happy to get that because they were ready to leave. I went in and, as a good friend of mine says, sprinkled the magic Michael dust on the place. About six or seven months later, I sold it for three times what I put into it.

I would have kept it, except I realized a couple of things. One, it was a distraction from running my Nothing Bundt Cakes at their fullest level — I could see those sales starting to flatline a bit because I'd taken my eye off the ball. I didn't quite have the right team in place to be completely hands-off yet. Two, Nothing Bundt Cakes changed how they'd allow people to grow, so there was more opportunity to open more. I wanted to stick with that, so it made sense to sell.

But again, it was customer-centric, customer service. I walked in and felt, "Ugh." Okay, why do I feel that? Let me look around. Three-quarters of the light bulbs were burned out, and the ones that worked weren't the same color — let's change all the bulbs. The paint was scraped up and full of thumbtack holes — let's paint the place. It was dirty — let's clean it. We never greeted anybody at the front door — let's have people say hello when someone walks in. And I put some marketing in place, not just online. Online is great, but for me it's an add-on in any business. Business existed before social media, Google, Facebook, Instagram, and TikTok. Let's go talk to some people. Let's go where our customers are. I figured out where the people who need OsteoStrong were, started talking to them and bringing them in, and we increased sales dramatically. People were happy, and then they wanted to stay — they weren't turning over all the time. As I said, then there were reasons to sell it, so I did. But this stuff isn't complicated. You just have to spend a minute to look around.

Henry Harrison: Sam Walton —

Mike DeJong: It's a bunch of little things. A bunch of little things.

Henry Harrison: Most people know Sam Walton founded Walmart. He used to say that when he started the greeters — when people were warmly received walking into Walmart, this massive company — sales would increase by some drastic number, something like 10%. I don't remember the exact figure, but customer service in business is important.

Mike DeJong: For me, it starts in the parking lot. Is our sign lit? Do any of our neighbors have cracked windows? Is there trash? Is the landlord cutting the lawn and trimming the trees? It just has to feel right from the very beginning. For most people it's intangible — they're not thinking, "All the lights are lit and the same color." They just walk in and feel good, or they pull up and think, "This is nice," or, "This is janky." You can't always put your finger on why, but it's the little pieces of trash, whether the lines are painted in the parking lot, a broken window next door. All these things add up subconsciously and give people the right or the wrong opinion about a place.

Henry Harrison: As we wrap up, what's on the schedule for the rest of your time on this earth? You've written one book — I'll read the title: Empowering Franchisees to Regain Freedom and Control. You're opening new franchises and having fun with that, and you have the freedom to live where you want. I'm sure you have to visit sometimes, but you mainly work remotely.

Mike DeJong: I do. I go at least quarterly.

Henry Harrison: So what's up for the next five or 10 years? Do you know?

Mike DeJong: Here's the plan — we'll see how well I stick to it. I've found a lot of joy in keynote speaking. If anyone wants a conversation on how to get out of the operator trap and out of their own way, I love doing that. I've loved speaking for a long time; I've just formalized it. I also do some workshops now on how to work through this. It's not, "You go somewhere and they lecture you for eight hours." We dig in, and you leave knowing how to move to the next step.

Actually — that was the working title of the book. We're releasing it on Amazon, I think tomorrow, so you're the first to hear this. The title is going to be Grow Smart, with the subtitle being what you read. We decided, after some testing in the marketplace, to change it a little. And it's weird — you get the bug. It took forever to write the first one, and now I've written two more, which will be out in the next six months or so. They're with my editor right now. My mission in life is to help people. I went through all this adversity. You're still going to have adversity as a business owner — there's no way to avoid it, it's just part of being human. But if I can lighten the load and give you some areas to not make the same mistakes, or make smaller ones, that's my passion and my mission right now.

Henry Harrison: That's fantastic, and it sounds exciting. If people want you to speak, do a workshop, or talk to you, what's the best way to get hold of you? Obviously you're on LinkedIn.

Mike DeJong: Yeah, they can email me at mike@mikedejong.com or visit my website at mikedejong.com. I try to keep it simple.

Henry Harrison: MikeDeJong.com, email, LinkedIn — whatever works for them. I'm sure you'll be glad to hear from them.

Mike DeJong: Absolutely. I just want to end suffering. My brother has a different way of ending suffering — this is mine. Overall, we're going to end suffering in the world.

Henry Harrison: There you go. Love it. Thank you so much for coming on. I really enjoyed this, and I look forward to staying in touch.

Mike DeJong: Henry, I really appreciate the opportunity. Thank you so much for having me.