3 Compelling Reasons for a Business & Cash Flow Forecast

0:00 The topics and opinions expressed in the following show are solely those of the hosts and their guests and not those of W FOURCY Radio. It's employees are affiliates. We make no recommendations or endorsements for radio show programs, services, or products mentioned on air or on our web. No liability, explicit or implied shall be extended to W FOURCY Radio or it's employees are affiliates. Any questions or comments should be directed to those show hosts. Thank you for choosing W FOURCY Radio. Welcome to Powerful Business Strategies, where you will find out that everything you have ever learned about growing your business is wrong. Finally, a show where you'll learn the right way to grow your business by learning business and financial strategies that your competition isn't doing. And now here is your host. President of NeXTSTEP CFO Michael Barbarita and joining Michael for today's show as an executive moderator is chooky obio.

1:00 Yes, this is chookey, and I believe that gratitude is undefeated and growth is about the next step. So look, it is an honor to moderate today's discussion with my good friend Michael. Michael how are you fantastic? How you doing it? Okay? Doing well? Look a last star week in July, and it's been a phenomenal month from a lot of the professional networking and conversations that we've been having with business owners and business leaders. So really excited, Michael. Excellent, excellent. Likewise well, as Chukey said, my name is Michael bober Reader, a Next Step CFO, and Next Step CFO is a fractional CFO and strategic implementation firm. Our vision is to ensure overwhelmed business owners achieve the time, freedom, and consistent profits to build a legacy and the life they desire.

1:53 Our mission is dedicated to guiding small business owners to leveraging their time, exploding their profit, and build a meaningful legacy. The show Powerful Business Strategies in our book of the same name, is a step toward accomplishing that vision and mission. And so with that, I'd like to hand it back to my co author and moderator for the show, Chooky obm. Thank you, Michael. So a bit of housekeeping. Folks, very excited about today's episode. It's called three Compelling Reasons for a Business and cash flow Forecast. We'll start with a story, we'll go through some strategies, and then we'll end today's session with a new segment which is highly in demand from a number of business owners that tune in. It's called our Business Compliments segments. So very excited to get to that. Quick disclaimer, folks, Michael and I are both affiliated with a number of different organizations and I currently serve as the managing director of business Development for Veta Price, a global business focused law firm. In addition to that, I collaborate strategically with Michael to moderate business roundtables really all around the country, as well as to document the best practices from those roundtables as part of our book, Powerful Business Strategies. But please note that today's show and the opinions and insights expressed are based on our learnings

3:24 and insights from our successful experiences through the decades. So again, very excited about today's show. In my mission as a fearless moderators to ask the right questions and to help you as a listener, and to help me and help us learn the best business strategies that the competition isn't doing. With that, I'll toss it back over to Michael. Thank you, jokey. Yes, you know when I say you're only one forecast away, why do I say that? What does it really mean? Well, over the next few minutes you'll discover about how you're only one forecast away from gaining a greater understanding and complete control over your business, your business goals and objectives.

4:10 But before I do that, as everybody probably knows, the ski retail business is a seasonal business. So for those of you who haven't heard prior episodes, I was in the ski retail business in the eighties and the vast majority of the ski retail businesses in the industry, at least at that time, and I'm pretty sure it hasn't changed much since they used a line of credit so they could deal with the seasonality of the ski business. Interesting, Yeah, makes sense. You know, it is a seasonal business and so there's cash fluctuations chooking. We were the only ski retail business in the country that I knew of that never ever used or needed to use that line of credit. Now, we had a four hundred thousand dollars line of credit, but it was only there if there was a real catastrophe.

5:00 Never ever used it. Yeah, And the and the reason was is. We had a business and cash flow forecast, and let me tell you why. That was the reason. The business and cash flow forecast can identify the most effective business model you can have, and that's what it did for us. Uh. The forecast told me that I shouldn't go into an off season summer business. It told me that I shouldn't sell bikes in the summertime. It showed me. It told me I shouldn't sell aqua lungus in the summertime. I shouldn't sell third for it. The forecast told me this because through multiple what if scenarios, the forecast could tell you the most effective business model you can have. And the forecast told me to close in the off season completely.

5:55 Uh. You see, And no matter how rosy a picture I paid with counter seasonal business, it produced carryover inventory, and that carryover inventory could kill cash flow. And that was just one of the contributing factors. There were many others that the forecast told me not to go forward and sell. Summer goods in the summertime. So despite being closed four months out of the year, we never needed our line of credit. And the forecast told us three critical things. The first was close four months out of the year. The second was no matter what, and the ski season with a certain amount of inventory, and don't go over that amount because then we would be in so called the danger zone where we would end up with potential cash flow problems. And then do what you do best. Was the other lesson that or the other item that the forecast told us, and forget about the summer stuff.

7:00 Do what you do best. And by following the forecast, that reduced our risk and maximize our profits and cash flow. So it was really it was a game changer, and and many of my clients look at it that way as well. And you see, Choky, if we know what tomorrow will bring, there are huge opportunities to minimize costs and maximize profits. But unfortunately we don't know what tomorrow will bring, and that's why we forecast. So what is a rolling business and cash flow forecast? Well, a rolling business and cash flow forecast is an ongoing blueprint that numerically and financially describes the most effective business model you can have and what that model will look like in the future, all supported by a solid set of assumptions. And here's a key word that I said, and that was rolling. And that's important because we just don't prepare a forecast and throw it in a drawer.

8:09 We use it as an ongoing blueprint. When the actual results for the month are realized, we plug those actual results into the forecast and let those actual results roll forward and see what the impact is on the remainder of the forecast. See what changes, see what? See what maybe? And sometimes it doesn't change because your actual results were very close to what the forecast showed. UH. And one more thing, A. Business and cash flow forecast must must include a forecasted p and L, a forecasted balance sheet, and a forecasted statement of cash flows. Without these three components all flowing together, the forecast is rendered useless.

8:57 UH. For example, cash is on the balance sheet, so if you don't have a forecasted balance sheet, you don't know what the impact is on cash and cash flow. So there are many times when business owners try to get away with just a forecasted P and L, But with a forecasted p and L, you really don't know what your impact is on cash. And so it's important that all three statements are incorporated into the forecast. Yeah, this is interesting, and Michael, we're getting some really good comments here, comments and a mix of questions as well, so we'll absolutely get to those. Maybe to take a couple of steps back right. Part of the impetus for this is the business roundtable conversations Michael, that you and I have had, and even taking quite a few business owners through the book interview. There's this sense that these business owners didn't quite have a grasp on the numbers.

9:58 Yeah, it showed it. They basically show that they are they want to avoid the numbers at all costs, and this is a process and you know, most business owners need help with this. It's not that the business owners expected to prepare a forecasted p and L, a forecasted balance sheet, and the forecasted statement of cash flows. Yeah, I didn't know whether you had a financial quiz at the end of this place. Get a little nervous. Yeah, no, you know, it's the numbers scare a lot of business owners, they really do. But unfortunately, the data and the numbers and the data are critical if you're going to be the CEO of your company. And that and the business owners that I deal with, the business owners that we've talked to, the business owners that we've been debuted are all the CEOs of their company.

10:52 So they really need to get into the numbers a little bit. And you know, we talked about things like be like the vital five for example, you know, sales, gross profit, gross profit, percent net profit in cash. If business owners just knew those five numbers, that's it. If they just knew those five numbers at all times, it would help them make decisions and so and so that takes away, that takes away some of the impact or some of the fear that the business owners would have and the numbers. If you just understand those five numbers, you can make excellent decisions. And that's all what financial is all about.

11:37 It's it's it's understanding your financial situation so that you can make wise and timely business decisions. And I want to pick up on that point, uh, Michael, and go to a couple of questions here. So one question is, as a very busy business owner running a number of different types of products and services, how can the business cash flow forecast help me make better decisions across business units. So that's one slice of the question, Michael, and let's maybe just take that and then we could drill down a bit. Well, what I'd like to do is I'm gonna cover that in just the next couple of minutes, So I'd rather just go through that. If there's another question I could answer, I'd be happy to, But otherwise I'm gonna cover that.

12:26 Brilliant Michael, Yeah, why don't you power for that? There are questions to that? All right? Excellent? So first of all, why forecast? Well, there are three compelling reasons, as the show is named, three compelling reasons why you need a business and cash flow forecast, And number one, it helps you gain a competitive advantage. Secondly, it helps you understand your business, and third it dramatically improves decision making. So those are the three compelling reasons, and here are the points that back up those reasons. So, first of all, as you say are in my ski business example, that you'll discover the most successful business model that you can have if you have a business and cash flow forecast, and you'll also understand that business model's potential.

13:14 Closing the business in the off season seemed absurd. To everyone it still does, but the forecast was right. Many times business owners are seeking the right business model, and the business and cash flow forecast is a perfect tool. For identifying us. Sit next, know what your and this kind of starts to answer that question, shookey, know what your business can and cannot afford on an ongoing basis. Out of all of the questions that I get asked as a CFO and profit growth strategist, that is the number one question question.

14:00 Business owners want to know what they can and can afford. Can they afford a new piece of equipment, Can they afford a new product line? Can they afford a manager? Can they afford to go to a new location. All of these questions are at are on their minds, and the Business in cash Flow Forecast answers it with a high level of accuracy. Remarkable, get some nice compliments related to that. Just really so that's very insightful was one comment. Another comment is I could also see this as a time management tool for me as a business. Owner, right because you see, you're always as a business owner, you're always required to make decisions, and with the Business and cash Flow Forecast, the decisions are laid out for you very very clearly, and certainly you.

14:53 Might need some help with that, but the help is available. And understand that just because the business and cash Flow forecast predicts these things with a high level of accuracy. You know, I'm not a southsayer, I'm not a gypsy lady, Mike. Are you sure about that? But it's because of the forecast that can give you that high level of accuracy. Think about this. So, if you want to buy a piece of equipment, we do what's called a what if scenario of how much of a down payment you could afford Step one, as well as projecting the monthly payments on the loan at prevailing rates of interest and prevailing terms. So the forecast tells will tell you how it impacts cash flow, and then you can determine if it's worth the risk.

15:54 And so when it's laid out in front of you, the decision becomes easier and less stressful. Yeah, that's a big one. That's a big one. Some reactions to that. In addition to time management, also stress management. Michael, right, Because what the problem is is that business owners have to make decisions about money, and they don't like the numbers and so, but the business and cash flow forecast can make that process so much easier, so much easier, and. So and so less time, less time consuming, and less stressful. So now one of the things we.

16:34 Said is the forecast will tell you how it impacts cash flow, and then you. Can determine whether it's worth the risk. Well, speaking of risks, another benefit of forecasting is understanding what the risk and opportunities are in your business. So the forecast is a risk assessment tool as well as an opportunity discovery tool. And we've been in business owners this business own God, we business owners face nothing but risk. We have personal liability risk. We have risks in managing and having employees. We have risks and managing cash. We have risks and being undercapitalized and needing money. We have risk and having inaccurate financial information. We have risk of having the wrong business model. We have risks in inventory.

17:27 If we're an inventory business that has inventory, we have risk and tax obligations. I can go on, I can literally go on the rest of the show. The name all of the risk that business owners have, and the forecast addresses every one of those risks. And so it's like I said, it's a risk assessment tool, but it's also an opportunity discovery tool, and the forecast helps you under stand what your business cash requirements are. Well in advance of needing it. This is so you have the time to get the needed cash or to arrange to get the needed cash, whether it's to ask the bank for a line of credit or maybe you have you need a short term loan from some lending lending vehicle. In other words, the forecast tells you when it's cloudy, not when it's raining. You know, many times business owners, cash flow problems just creep up. Yeah, and you know, cash flow, cash is the life of a business.

18:38 And one of the things we learn is business owners is things can just turn on a dime, especially when it comes to cash. It's very true. And having that. Foresight when you need additional cash and the time to make arrangements is literally invaluable. You know, in this world today, chicky business owners need options and the forecast gives you time to weigh out those options. So it's a really it's it's really terrific for cash prognostication and to really understand how much cash you need or don't need. And it helps you sleep at night when you don't need it and when you know you don't need it. The forecast helps you understand what resources are needed if business increases or decreases. In other words, at what level of sales do you need more people? You know, that's a question that's often asked as well from you know, business owners.

19:41 They want to know when is it time? And then conversely, when do you need less people? So in a difficult economic time period, the forecast helps you understand when to cut, how to cut, and who to cut. At what level of sales do you need more equipment? The cash flow sorry, the business and cash flow forecast helps you understand when it's time to get equipment. You know, this capacity scenarios that the forecast goes through. So if your business is growing or in decline, the forecast can tell you where you need to adjust, whether it's headcount, overhead, or even in your variable costs or cost of good sold.

20:37 And the other thing too chooky is the forecast can calculate metrics. And I'll get into this more a little later, but. One metric that the forecast can help you calculate is a metric called revenue per employee. And so. Where there are certain levels of revenue permployee where it's time to either get more employees or start to cut. And the forecast helps you understand the optimum number of people you need and where in the organization they would fit. So it's really invaluable in understanding what resources are needed, or what resources or what things can be cut. So it's very very helpful in that. Once again, this is all answering that decision making question, okay, and the forecast helps create multiple what if scenarios for different things that could happen. For example, many business owners want to know what profit and cash flow look like if business is off twenty percent, what has to happen, what's going to happen if it's off, what does it look like?

21:56 What decisions need to be made? The forecast identifies all of that, Choky, and I don't know if you remember last week when we were going over the seven action items that a business owner must do to prepare for an economic downturn, we said that the number one tool for winning business owners in an economic downturn is, in fact, the business and cash flow forecast. And this week we got some great reactions to that. Yeah, yes, the bold statement, Michael, Yeah, we got some great reactions to that. It was yeah, and I think you're starting to learn why, I mean, the the the impact that it has people don't understand that people think that it's just you know, it's gonna kind of identify what could happen in the future.

22:46 But because it's a rolling forecast and we keep it updated with actual results, it becomes a much more accurate blueprint. Michael, quick question here just from the audience. How often should I think about updating my business and cash flow forecasts? And I know that you're characterizing this as a rolling. Right, and it should really be updated monthly. It can be updated quarterly, it depends upon the business cycle, okay. But primarily it should be updated monthly. Okay, because things happen monthly. Things things change monthly, as we As I said earlier, things can change on a dime.

23:27 So at a minimum, you really need to update it monthly. Now, some business owners can get away with quarterly updates because their business cycle is really determined over a period of three months versus just a month. But there is some risk in that, and because because business can turn on a dime. You know, when. COVID hit, I had to get it, get to work and revise a number of forecasts because there was so much uncertainty when it hit, and of course it hit on a dime pretty much, right. A lot of us remember that, Yeah, a lot of us remember that, Yeah, Michael, I mean it's a good reference.

24:08 But it was incredibly valuable to my clients who had business and cash flow forecasts because they could figure out what to do very quickly and understood what the downside was and if it turned around, and when it turned around, what the upside was. You know, would would look like. Once again, the forecast has the ability to create multiple on off scenarios, So we were creating forty and fifty percent off, sixty percent off scenarios sometimes. Uh. And you know, and but gave the business owner peace of mind because we figured out the model that would work in that scenario, and that without the forecast, that would have been impossible.

24:57 Yeah, I mean I could see that being such an impact on peace of mind, right, particularly and economically uncertain times, you know, pressurized times. Very very helpful, Michael. A couple of just really quick questions. So this idea of uh, and you know, we may get gets to this a little bit later. Some folks are asking about systems or tools that they could use to help prepare these kinds of business and cash flow statements. But again we could get to that. No, I know, I'll be happy to address that. Now. You just need good bookkeeping. If you have good bookkeeping, accurate and timely financial statements. Along with good bookkeeping, that's all you need, you know. And you know you'll need to answer some questions about your business, which you could probably do with your eyes closed. That's just that's just standard.

25:53 But with respect to anything, any tools that you need, the only thing that's really necessary is accurate and timely financials through good bookkeeping. You know. You also it's also advisable to have a payroll company, which I haven't seen many businesses that don't, So that's, uh, you know, that's kind of standard. Yeah, And another question, this maybe segues into a couple of the points that you want to make as we substantiate this idea of the business and cash flow forecast really impacting decision making. So some folks want to ask about how it helps inform a strategic plan, So a corporate strategic plan for their business, how would a business cash flow forecast inform that? And it seems like they're looking at time horizons, like a three year plan for the business or a five year plan.

26:46 Right, we normally do three years. Once you get beyond three years, it's the predictability goes way down. But think about it, if. You want to know if your business model really works, if the business and cash for forecast will identify it, because it will show that you're running out of cash. I mean, if a model doesn't work, if you if you have to continuously add more money to the business and it's not going in the right you know, the the forecast is telling you that that the that the model that you have right now is not a profitable one or the most profitable one, because that's where the what if scenarios commit. Well, we would change the way you do business, will change the model, whether it's going from offline to online, whether it's going from online to brick and mortar or whatever it is. And it doesn't have to be retail. It could be the trades. I work with many many companies in the trades, and we have changed business models in a number of situations when we think it's the right move based on the forecast.

28:06 So it's been a really in excuse me, a very valuable tool. Yeah, I could see that. I could see that, Mike, I mean that's quite compelling, to be honest. So one takeaway from that is that a business and cash flow forecast can actually help inform your business model long term. Correct. Yeah, and you know, and and that's the thing, that's the reason why we do it out three years. We want to test that model. Yeah, it could succeed in year one, but then start to falter and fail in year two exactly, depending upon how that model is structured. Yeah. So, Michael, if I take away from what you're saying, the business and cash flow forecast helps business owners not be one hit wonders.

28:52 Right, Yeah, it's a good way to put it. Yeah, that's a good way. That's a good way to put it. Like a lot of songs, right, exactly, right, Yeah, that first good year and then you know the subsequent years things will look so, yeah, this helps you avoid the one hit wonder dynamic. That's very helpful, that's correct. And so in keeping with that, the forecast establishes the basis for the strategic plan. You know, if your company has direction, you feel more confident because you have that direction. So let's say you wanted to implement the digital marketing strategy, for example, which is some things that we help customers implement. That's something.

29:34 You know, we can show you what that looks like financially and how much volume is needed for that strategy to be worth it before you implement it. You know, one of the things about the strategic advice that we give two key is that we cannot only give you the strategic advice, but we can tell you the financial realifications of implementing that strategy before you do it. You'll know what it looks like financially, and as we as if the forecast tells us to go forward with it, we go ahead and implement it. We can now still use the forecast to see if it's going in the direction we thought it was going to and have and have the forecast tell us of any adjustments that need to be made.

30:24 Yeah, that's an incredible notable point, right Michael, and I want to just have us underscore and highlight that. So oftentimes business owners, I mean, they've got the strategy, but they've got financial blind spots, or they've got kind of the financial plan, but they've got strategic blind spots. So what you're saying is this sort of helps bridge the divide. Absolutely that you know, it's probably when you think about it. If you don't combine strategic with financial, then you don't know if the strategy. Although you're excited, dentally excited about the strategy, you don't know if the strategy is going to work in your model, and you don't know how you have to might have to change your model because you want to implement this strategy.

31:14 So that is really a. Major major component of building a business. If you have a strategy and that you know that the strategy that you're implementing fits financially and is profitable, is productive, and you know to what degree it's profitable to and productive before you implement that, all the difference in the world. Yeah, I just I mean, I so resonate with that point. In fact, it reminds me of one of the lessons from your story, right, Michael, I mean just this idea of not activating that line of credit. Right. So what I take away from that, and maybe you can help clarify this is you, folks were running such a harmonized strategic and financial plan as part of the business where you knew that you didn't need to activate that line of credit even looking looking ahead.

32:08 Right, we looking ahead and then actually as time went on exactly. It was the summertime and we didn't need it. We had enough cash to carry us to more than more than carry us into the next season, and it allowed us to avoid having that carryover uh, those carryover aqualongues. Uh and that was carryover surfboards and those carryover bikes. So whatever product we decided to sell in the summertime. Yeah, I know that. Look, I mean that's actually very insightful. So really appreciate that. So, Michael, we do have a couple of questions that are you know, still I see some folks still kind of submitting questions. But why don't we power through? I believe you've got a few more points you want to make and then we'll get to those questions.

32:54 Great, So the forecast helps you understand and determine the critical metrics. Of the business. Ah yeah, Now. Metrics are financial parameters that evaluate the performance and productivity of the business. But in addition, and in addition, instead of reading and trying to understand financial statements, metrics help you interpret what your financial statements are telling you in more simple terms. And so let me give you an example of that. Great, So, here are two metrics that everyone should know about their business. Everyone should know the average number of days it takes to collect your accounts receivable, and everyone should know the average number of days it takes to pay your bills. Okay, Now, the reason is if you actually calculate those metrics, and the Business and cash Flow Forecast can help you with that. If you're collecting your receivables and average of thirty five days, but paying your bills on an average of twenty days, you can see that you're paying out faster than you're collecting, and that is problematic from a cash flow standpoint. And many times this is why cash flow problems come right up without you knowing it, because you're paying faster than you're collecting and it catches up with you.

34:26 Yes, now, by knowing these. Two metrics, maybe your strategy would be collecting receivables faster or getting extended terms from vendors so that you could pay slower, or a combination of both. But the four cast will tell you what would have a greater impact on cash flow, whether it's collecting the receivables faster or paying the bills slower. And just so you know, too, chookey, when I work with clients. I study all the metrics so that I could provide the proper guidance. However, I only share the critical metrics with the client. And because if I were to share all the metrics, the client would get paralyzed by the analysis. The purpose here is not to get paralyzed by the analysis.

35:10 I study them all so I can interject them when pertinent, But in terms of presenting them, our dashboards only show a couple of metrics. Yeah, critical ones. Spat on you really are suits there, I mean you're a predicted to be honest. That was actually one of the questions was are all the metrics created equal as part of this? And you just helped to address that. Right, that's right, So they're not, and uh, the critical ones you need to understand and really all you need to know. Uh. And then in the background, somebody is helping you with really understanding all the metrics so that they can provide the proper guidance. So that's that's how that's how that works.

35:56 But but but metrics are really critical and they you know, remember earlier we talked about the vital five that there's five metrics right there that exactly right, and really that is really. All you need to know to make the right decisions. But in order to really get a little bit more into the weeds, we go a little further with the metrics analysis. So with a forecast, you'll be able to understand the outcome and ramifications of your decisions before you make them. So imagine being able to see the financial ramifications of a decision before you make it. Imagine being able to see the financial ramifications of a strategy as I mentioned earlier, that you like to implement, but it gives you the foresight to understand whether or not you should.

36:46 Implement it before you implement it. And the forecast helps you understand capacity limitations, how to maximize capacity with current resources, and in addition, understand how to expand capacity and what the impact of expanding your capacity is, being able to. Produce more maybe hiring more people. All of that part of. The business and cash flow forecast. And here's the biggest thing. Here's a well, I should say the biggest thing, but here's a big thing. Because of the clarity that the forecast brings you. You'll know more about your business than eighty five percent of your competitors know about theirs, giving you a tremendous competitive advantage. Uh, there is tremendous Uh.

37:33 There is a tremendous advantage and value in knowing more about your business. Your competitors don't know most the what the most effective business model they could have this. Your competitors don't know their numbers. Your competitors don't know the vital five. Your competitors don't know what they can or cannot afford. They throw dots at aboard. Your competitors don't know the critical metrics in their business and what's and and that's and what's going to move the needle. Your competitors don't understand the outcome of their decisions before they make them. Your competitors don't understand their risks and opportunities. And your competitors don't know how much cash they need in advance of needing it. Your competitors don't have the insight that the business and cash flow forecast gives you.

38:22 And that is really some of the those are those are in a nutshell that'll covers those three compelling reasons why you need a business and cash flow forecast. And there's a couple of things I want to add as well. Chooky, Okay, forecast acts as a budget as well. So when people who say budget, the forecast acts as a budget. It guides you as to what you can spend and wear. And this is important too that if a business model does not work in the business and cash flow forecast, it definitely will not work in real life.

39:03 Period. That's a fact. Yeah, So it's a reality check in a way, right. Right, that's correct. And you know, if you don't remember a single thing that I said today, just remember that the rolling business and cash flow forecast is so revealing in terms of understanding the most effective business model you can have that the business owner can't help but begins develop and implement the right strategies making their business more successful. So, in summary, those three compelling reasons to have a business and cash flow forecast. Is number one, it helps you gain a competitive advantage.

39:46 Okay, gain a competitive advantage. That's one, go ahead. Two helps you understand your business. Understand your business, which is. A competitive advantage as well. But it helps you understand your business, and it dramatically improves decision making. Better decision making really well said, So Michael, you struck a chord with your point by points analysis of what the competition isn't doing. There's some folks that would want you to just repeat some of that. In fact, it was just so well articulated. So, Michael, do you want to just give a quick recap. How does the business and cash flow forecast position a business owner to do what the competition isn't doing?

40:28 Well? First of all, that's a great, great question. So first of all the clarity that the forecast brings. With that clarity, you'll know more about your business than most of your competitors know about their business. And that right there gives you a competitive advantage because you know more about the business exactly. There's a tremendous advantage. In knowing that. But your competitors don't know the most effective business model they can have. Your competitors don't know their numbers. Your competitors don't know they're vital five. Your competitors don't know what they can or cannot afford. They're throwing dots at aboard, they guessing. Your competitors don't know the critical metrics in the business that's going to move the needle. Your competitors don't understand the outcome of their decisions before they make them.

41:18 They just throw dots at a board again, and they don't understand the risks and opportunities. Because if you don't understand your risks and opportunities, you. Really you have a trouble. Yeah, usually have trouble sleeping at night. And that's a really big one. Right. We hear from so many business owners, Michael of just the time freedom impacts to why they started their business. Right, we hear from so many business owners just the legacy interest, you know, to leave a legacy to their family. That's why they started their business. So the question here, and I'm combining a couple of from questions, but how does the business and cash flow forecast help a business owner get closer to achieving their number one personal goal?

42:10 Well, because the decision making is vastly improved, and when the decision making is vastly improved, they're making more right decisions than wrong decisions. And so it accelerates your progress, It accelerates your productivity as a business owner, and it ultimately accelerates your growth. And because it can help you scale, I mean the one of the what if, one of the what if scenarios is how do I go about scaling? And what does it take? What does that look like? How long does it take? So those are all of the uh, those are all the questions, the uncertainties that can be answered. But in a nutshell, it gets to the number one goal through better decision making.

42:56 Really brilliantly well laid out and articulated, Michael. I took some notes myself. Folks, you probably saw me taking some notes. This is really actionable, really practical information, Michael. So thank you. Any other wisdom nuggets, Michael, that you have for us before we pivot? Well, can really quickly can I give you some bonus content? Oh? Please? Absolutely. This is something I think a lot of business owners don't understand, and that's personal liability. It's one of the risks that I talked about earlier. And first of all, many business owners think that because we have corporations, we are protected from personal liability. And that is correct to a point, except for when you can tractually sign a personal guarantee. Now many of us do that with banks, leasing companies, credit cards, and vendor contracts. Beware, if you have to sign a vendor agreement twice, it's probably because the second signature is a personal guarantee that you're signing. If you have to sign a vendor application and twice read it and make sure you're not signing a personal guarantee, and cross it out if you are.

44:09 Because many of my clients have been doing business with certain vendors for years and always paying on time. But if something goes wrong and the economy changes rapidly and you run into problems, you don't want to have that personal guarantee out there with a vendor that you've been paying hundreds of thousands of millions of dollars over years of time on time. Ask them why they don't, Ask them why they need it anymore because they don't need it anymore, and have your attorney make it null and void. The other thing is whether you have a corporation or not, you're personally liable for fiduciary taxes.

44:51 Well, what are those? Those are taxes like payroll taxes and sales taxes. Think about it. That's not your money, You're just a fiduciary. The responsibility of taking someone else's money and paying it to the proper authority. That is personal liability. And finally, really quickly ask your attorney. But I believe the. Treasure of a corporation is the officer of a corporation that is the most financial responsibility for the company and can be held personally responsible. Back to you, Checky for the compliments. I don't know. I mean, Michael, great additions to be honest, and I'm glad you connected those dots and folks, look, if you need professional advice on any of the points that Michael noted, please And Michael, one things that we always tell the business owners in our roundtable is please seek the advice right, you know, get the help you need.

45:43 Correct, get the help, get that help help you need. So we're very excited about this segment. Again, this is highly in demand and recommended by a number of listeners. It's a business complements segment. So what we do is we spotlight a number of business owners coasts to coast, and today we have four business owners that we want to spotlight. So the first is Eric Wing with Darby Digital Marketing. And part of what we really want to spotlight with Eric, I mean, there's so much to love about Eric, Michael, as you know, but part of what we wanted to command Eric on was his strategic marketing approach. There's a very strategic way that Eric approaches his Marketing Engagements and just wanted to endeavor to give Eric a shout out on that. And Eric's based on the East Coast.

46:35 The second is Vanil ram Chandron and he is with Dream Business Brokers. What we wanted to. Spotlight about Vanil was his three pi's of service, Purpose, promise and people. He informs his service to business owners seeking to sell the businesses across those three p's really impactful and inspiring. The third business owner and by the way, Vanilla's out west. The third business owner is Eric Harris with curta Pro. Eric's entrepreneurial journey is just really motivational.

47:17 If you folks get a chance to connect with Eric, he's out east, and part of what I wanted to spotlight with Eric is his extraordinary mindset when it comes to client service. Eric and his team really make it a point to go above and beyond, so not just to do the paint job, but to do the paint job with excellent So tip of the cap to Eric. And then the fourth business owner and Michael, I think you might be excited about this one. This is Jj Prabilski with Master Dawn Moving and Jj and his business were just recognized in the ink I've Michael, I'll let you finish.

48:02 Five thousand, five thousand, thousand, I. Want to do complete Yeah, privately. Eight five thousand privately held companies. He doesn't know where he ranks yet. He won't know until August sixth I believe, okay where he rags, but he's one of the top five thousand privately held fastest growing privately held companies. Brilliant. Yeah, I mean Michael saying I figured you were suits on a mind reader, so you were sort of Yeah. I think five thousand is just impressive. So compliments to JJ, complements to Eric Harris, complements the Vanil and then complements to Eric wink Michael, anything else, I. Think that's a choky. Other than to get a copy of the book Powerful Business Strategies, simply go to our website www dot next step CFO dot net. It's totally complimentary and until next Monday at noon Eastern.

48:52 Time for Chucky Obio. My name is Michael Barbarita, and remember, don't keep doing what your competition is doing. Thank you. You have been listening to Powerful Business Strategies, finding out that everything you ever learned about growing your business is wrong. Tune in next week and every week at noon Eastern time on W four CY Radio with your host Michael Barbarita of Next Step CFO and moderator chugy Obio