Business

How Meathead Movers went from charging $20 and a pizza to a multimillion-dollar business

Aaron, left, and Evan Steed founded Meathead Movers.
Aaron, left, and Evan Steed founded Meathead Movers. jjohnston@thetribunenews.com

Aaron Steed, who grew up in San Luis Obispo, founded Meathead Movers in 1997 with his brother Evan to earn money while they attended San Luis Obispo High School. Aaron was a junior, Evan a freshman.

Customers would rent the vans, pick up the movers and they’d provide the labor. Their fees then? $20 and a pizza or whatever customers thought they were worth. Those happy customers spread the word … and soon the brothers had recruited 30 to 50 friends to help.

Now, 20 years later, Meathead Movers handles more than 15,000 moves a year, making it the largest independent moving company in the state. It has offices in San Luis Obispo County, Ventura County, Orange County and the Central Valley and employs 440 people — about 80 full-time employees plus 360 student athletes.

CEO and President Aaron Steed of San Luis Obispo-based Meathead Movers tells the story of their company's worst moving experience.

Meathead Movers has also earned recognition worldwide for its efforts to end domestic violence. It has long helped abused women by coordinating with women’s shelters to provide free moving services to victims of domestic violence and now offers that through seven domestic violence shelters in California. And it donates $1 for every box packed by its Princess Packers — money given to nonprofits for children whose families are suffering hardship.

The company’s success was not always guaranteed, however. The brothers — who own it 50-50 — have had plenty of challenges and setbacks.

Tribune Executive Editor Sandra Duerr interviewed chief executive officer Aaron Steed and chief strategy officer Erin Steed, who joined the company in 2006 and married Aaron in 2008, late last year to address these challenges. The program was part of the San Luis Obispo Chamber of Commerce Conversation Series. (Evan Steed, chief financial officer, preferred to stay out of the spotlight.)

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As Erin Steed says, they’ve grown up along with the business. And being family-owned adds another special layer: How do they manage the operation so one of the three principals doesn’t feel like the odd man out?

Here is an excerpt of the conversation:

Q: What was the biggest challenge you faced in growing your company?

A: Aaron: I would say what seemed like insurmountable cash flow issues at times. There were three different times where we almost lost the business. ...

Q: One of those challenges involved workers compensation costs, which in 2002 increased five times due to worker injuries, going from $60,000 to $300,000 a year. What did you do to address that?

A: Aaron: That was awful. I’ll never forget, we had a $75,000 bill, $30,000 in the bank, no line of credit, 13 administrative employees, and I thought failure was imminent. ... We had to cut our expenses to the point where we had to lay off eight of our administrative employees. I remember just crying in the conference room thinking, “This is what we’re facing; this is what’s happening.”

Q: What did you do as a result?

A: Aaron: We changed the culture. ... We started doing in-person estimates so we can make sure we’re putting the right amount of men on the job. In addition, we empowered our dispatchers to give our employees whatever they want. ‘So you’re feeling a little tweaked. OK, do you need a chiropractor appointment? Do you need a massage?’

In addition, we expanded the job description of the worker. To make money with us you don’t just have to move heavy furniture. You can also do administrative work, you can wash the trucks, sweep the floors. ... It kind of matured from an immature “macho man” business to one that’s really like a sports team where we take care of the employees and make sure there’s a sustainability.

Q: In 2010 you began losing employees to other companies, and now (late 2016) you’re dealing with high employee turnover. How are you addressing these?

A: Erin: We were losing our movers to internships, to non-paying jobs, and we thought, “Why is that? Why would they leave a paycheck?” And we realized that millennials really were looking for something with heart, and a purpose, and as a lot of you know, our company has heart and a purpose but somehow that message wasn’t getting to them.

So Aaron and Evan and I and our team completely refigured how we approach them and the experience they would be getting at Meathead.

Instead of, ‘Hey you get paid to work out, this is a cool culture, you get to have fun with your buddies, you get tips,’ now we sit down with them and chart out, ‘OK, what’s your goal? You want to be a firefighter? Here at Meathead you’re going to get experience driving a commercial vehicle and making decisions in situations.’

If they want to be (with) team Meathead we’re saying, “OK, here’s your growth opportunity path within our company. You can move into sales. You know our general manager started answering the phones, our COO started as a mover 15 years ago.”

We’re actively making sure that you are on your goal path. And we check in with them. If we see someone is angry, doesn’t like the client that they dealt with that day, we’re like, ‘Wait a minute, you said your goal was to own a gym, right? Do you think that you’re going to have days where you’re frustrated with your employees? All of a sudden there’s a shift in their eyes — their attitude — and they realize ... that was a learning experience, and I am working toward my goal.

Watch as a crew from San Luis Obispo-based Meathead Movers packs a house in about a minute in this timelapse video.

Q: You and Evan were young, and you had no college degree, which many people today say you need to succeed. Where did you turn to for advice along the way?

A: Aaron: We have received some of our best advice from our employees. One time, one of them was sharing that he got big tips if he put a chair down in front of the truck so the client could sit down and watch how hard we’re working as we’re unloading the truck. So we’re like, “That’s a great idea.”

So now we have what’s called “Meathead VIP chairs” where as part of our process we present a chair to our clients so they can sit down in the shade, and watch us work. Also ... for the first 12 years of the company, I called back every single customer, and sometimes I got really, really good feedback, and even if it was hard to hear, I always appreciated the feedback.

In addition, I find companies like Mindbody, which is an inspiration in how they treat their employees. I find an inspiration in Zappos in how they approach customer service. We were inspired by Nordstrom with its return policy — that’s where our money-back guarantee came from. So just because we’re a moving company doesn’t mean we have to operate as a moving company.

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Meathead Movers in San Luis Obispo. Joe Johnston jjohnston@thetribunenews.com

Q: Have you ever reached out to anyone at Cal Poly for financial advice or anything?

A: Erin: When I joined the company 10 years ago, I noticed that even though the boys started in high school and didn’t have business degrees, they were both really brilliant in knowing that they needed to assemble a really great team.

Aaron would just start going to the morning coffee networking meeting and pick the brain of a really smart local attorney. Or Evan made a friend (who) turned out to be a really great computer developer and Evan would pick his brain. ... Aaron and Evan invested in these relationships so everyone was, ‘Here, I’ll help you with that, let me explain that to you, here’s what I would do, here’s what I did.’

So I think even 10 years ago, there was an organic board of directors and that’s just grown as we’ve grown.

Q: How has the operations management software that Evan created with the help of some developers contributed to your success?

A: Aaron: MMOM2 (Meathead Movers Operation Management) is a software program that my brother and his team made from scratch that handles all assets of the company — sales, operations, accounting; it pulls reports, it’s the back end to our website. Before that, we used Outlook and Google maps, and another software program, and (had) all types of things to integrate. Now we can get through with two clicks for something ... and it’s become an incredible asset that’s helped take our business from a local business to a regional business.

Erin: Once you call into our call center ... within 10 seconds whoever answered the phone has that person’s folder pulled up, and they can say “Oh, how’s Max doing?” “I saw that your cat went and had a little procedure,” “Are you getting ready for the big move to the retirement home?” So they call in and they feel known, and they feel heard, and they feel remembered, not like, ‘What’s your name again? Where are you moving?’ Because they have a screen in front of them that has every single detail about the person, their move, their family, and whatever’s important to them.

Aaron: One of my other favorite things about our software program is that (when the movers are dispatched) the client will get a text message with the name and picture of the movers. ...

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The call center at Meathead Movers in San Luis Obispo. Joe Johnston jjohnston@thetribunenews.com

Q: If you were each given one free do-over, what would it be?

A: Aaron: I think at times I would have slowed down, and really try to understand more about where some of my employees were coming from as opposed to being rushed and reacting to the pressure and all the responsibilities that I’ve had. ... Unless that foundation is tight, then you don’t really have a foundation.

Erin: Over the years I’ve gotten a lot more confidence in the ability as a family and as a company to really make it through anything. In 2008 our line of credit got yanked right as we were going into our slow season, and our line of credit is what we pay payroll from during the slow season; that was our safety net. You know? We were in our 20s, we didn’t have equity in our homes, we didn’t have big bank accounts, we didn’t even have robust retirement accounts. ... We banded together, we had open honest conversations with all of our venders (to restructure some payments). ...

Q: You plan to put your mission statement on a pocket card that you can share with all employees. What difference will that make?

A: Aaron: It’s a reminder of what we stand for: our values, our mission statement, what clients expect, what’s going to impress them. It’s something that they can reference when needed, or to praise them for what they’re doing, or if someone isn’t living up to the Meathead standard, maybe get this out and explain it to them.

Q: Meathead has a fully stocked kitchen. Given that it hires student athletes, that can be expensive. How much money does that cost you per year, and does it really help you recruit and retain?

A: Erin: I would say over $20,000, especially since we started stocking energy drinks. ... But I don’t know that anyone really chooses to work at Meathead because they come and see our cool snack bar. I think what it does is that once they are working for us they see that we are invested in them, we care about their work experience, their personal needs. For every dollar we spend on that, I think our culture is magnified.

Q: How do you resolve differences of opinion that are complicated by not only the sibling relationship but also the spousal relationship? Can you cite an example?

A: Erin: There was an employee who did something, and it was termination-worthy, and there was a disagreement whether this person should be terminated or not. Evan and I were on the same page (that) we need to have a serious talk, however we (believed) it wouldn’t happen again. Aaron was adamant — we’re firing him. So, where the challenge came is, Aaron felt I was being disloyal to him by taking a firm stand but my stance was so firmly in this person, who’s still with us, and he’s amazing, and we’re very grateful that he is.

But that’s a very specific situation where being married was very difficult because my heart wants to be loyal to him as a wife, but my head wants to make the right choice as a businesswoman. So Evan and I ended up prevailing. It was tough standing up to him, but at the end of the day I felt like it was the right thing. And I think Aaron ultimately had more respect for me afterward because I was willing to go against him for my convictions.

Aaron: In business it’s not really about being right, or getting your way. It’s about making the right decision, and I think it’s important to really respect who you are working with and be willing to hear and understand where those people are coming from. And if you are willing to do that, and if everyone’s on the same page to make the best decision, and if people are willing to endure a lot of pain and frustration to get there, which we have on multiple occasions, your business is going to be better off for it.

It’s not the Aaron or Evan show, we’re just a bunch of flawed individuals who this is our first business and we’re doing the best that we can. And it’s not always a straight line; you know, it’s a zigzag, it’s a learning lesson. And that’s great. What I have found is that the more respect I give, the more I’m willing to see the other person’s side and still really, really challenge it, then you get that returned. And in the past when I’ve been stubborn or ornery, I get that in return. So you really do kind of get what you give.

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Aaron Steed gives Erin Norton a bear hug at Meathead Movers in San Luis Obispo. Joe Johnston jjohnston@thetribunenews.com

Q: To avoid the family dynamic becoming the work dynamic, what boundaries have you set up other than “I don’t want to talk about business right now”?

A: Aaron: Number one, I really do my best to try to be intentional about asking for permission to talk about something work-related (on weekends or when we’re home). And, two, instead of just consistently following up about things, because there’s obviously a bunch of things going on in our life, we have recently set up a weekly meeting (among the three of them) to address all of the important, but not urgent, things.

Q: How do things differ from what you had originally anticipated?

A: It’s totally different. So much of life ... is how you react to it, you know, and not so much what our plan is. ... So I think it’s important to give yourself the space and margin and have a good network so that you can check in with yourself and reality test your value system and what you want out of life, what you want out of your relationships, and what you want out of your business, and what role you want your business to serve your life and how it all intertwines.

Erin: When I started working at Meathead ... we were in our mid- to young 20s ... and it was a very brash, cutting-edge culture, but now we have people getting married, having babies. ... So what I didn’t expect is just how much higher the stakes get ... when you are responsible for someone making their mortgage payment, when you’re responsible for the stress that comes with making sure you have the right set of benefits.

Q: What have you both enjoyed most about running your business?

A: Aaron: Definitely the impact you can have on someone’s life, the impact you can have when providing an employment opportunity or a promotion.

Erin: When you are a part of a small family business, you have to remain nimble and you don’t always have cash reserves for experienced professionals. It allows you to develop and discover parts of yourself that you didn’t really expect.

For example, Evan has gotten so good at construction management and development that sometimes our construction vendors will literally take his words and notes straight to the city. I had to learn how to negotiate a business partnership with a very aggressive, older attorney, and I now love that. Aaron learned how to become a guy who completely revamped our culture to a point where our entire culture shifted. ... So I think it’s really fulfilling because you are forced to put on that hat that you never thought you were going to and you realize that you really can do it.

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Meathead Movers in San Luis Obispo has climate-controlled ministorage. Joe Johnston jjohnston@thetribunenews.com

Meathead Movers

Business: Offers local and long-distance moves and packing services for individuals and businesses in San Luis Obispo County, Ventura County, Orange County and the Central Valley. Offers ministorage unit rentals in SLO, Oxnard and Fresno.

Address: 3600 S. Higuera St., San Luis Obispo

Owners: Aaron and Evan Steed

Executives: Aaron Steed, president and chief executive officer; Evan Steed, chief financial officer; Erin Steed, chief strategy officer

Employees: 440, including 360 part-time student athletes and about 80 full-time, mostly administrative and operational staff

2016 revenue for moving business: $14.25 million in 2016, including Princess Packers, which contributes 10 percent of the revenue. The company declined to disclose revenue for its San Luis Obispo mini-storage business, which is owned by the brothers and other investors. A new Oxnard mini-storage site is solely owned by the brothers, and the company expects to open one in Fresno soon.

Annual profits: Not disclosed

Recognition: INC. 5000 list for five years in a row. The White House Empact 100 List in 2011, one of 100 companies that impact the economy and inspire young entrepreneurs. 33rd Assembly District Small Business of the Year in 2012. World recognition for its Move to End Domestic Violence (MovetoEndDV.org).

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