Create More Profit and Cash Flow with Inventory

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 explicitor implies shall be extended to W FOURCY Radio or its 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. Resident of Next Step CFO Michael Barbarita, and joining Michael for today's show as an executive moderator is chooky obia.

1:00 Yes, this is shookey, and I believe that gratitude is undefeated and growth is about the next step, So it is an honor for me to moderate today's discussion with my good friend Michael. Michael how are you fantastic? Chucky? My name is Michael Barber, Rita, President of Next Step CFO, and next Step CFO is a fractional CFO and strategic implementation firm, and our vision is to ensure overwhelmed business owners achieve the time, freedom, and consistent profits to build a legacy and a life they desire. Our mission is simple. It's dedicated to guiding small business owners to leveraging their time, exploding their profits, and building a meaningful, meaningful legacy. You know, this 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 would like to hand it back to my co author and moderator for the show, Chucky Obio.

1:56 Michael, thank you. Look, I'm really energized by today's episode titled create More Profit and cash Flow with Inventory. Just a quick disclaimer before we activate all the insights locked into today's show. So look, Michael and I are both affiliated with a number of different organizations and I currently serve as the managing director of business Development for Vetter Price, a global business focused law firm. In addition to that, I collaborate strategically with Michael to moderate a number of business roundtables really coast to coast, and we document powerful business strategies from those roundtables. In fact, that's the name of the book, Powerful Business Strategies, and the name of the show. But the views expressed in today's show are our personal views based on personal success stories. But my mission as the Fearless moderators to ask the right questions to help you, the listener, learn the best strategies that the competition isn't doing.

3:00 Michael, Yes, talk to you well, Chicky. We have a very special guest on the show today, Pierra Stocklin. Yeah, that's right. Yeah. And Sierra, who is an inventory genius, helps businesses use their inventory to create more profit and keep more cash. Now, personally, I find this fascinating because I've been talking about over the last couple of shows how business owners in retail, manufacturing and distribution need to manage their inventory better to solve cash flow problems. But I haven't really offered enough solutions when a business owner is over inventory. So I'd like to welcome in Sierra Stockland.

3:47 Hey, how are you guys? How you doing? Sierra? I'm so excited, so away. We really are. I want to I just want to thank you for coming today. It's really a pleasure. It's really a pleasure having you. Could you tell us a little history that you have with inventory and small business. Yeah. Absolutely. So I started my first business when I was thirteen. I was born and raised in North Dakota, where it was freezing cold for much of the year. I now live in Nashville, but came from an entrepreneurial background. My dad and my grandpa both owned small business, so it was only natural for me to be solving problems and selling things. So I built that first business for about a decade, got married, had a couple little ones, and decided I was going to get out of the nonprofit space, which is where my first business lived, and get into retail.

4:36 So I launched my first retail store in two thousand and six. I had never worked a day of retail in my life, but I thought, you know what, I can buy and sell stuff. This is easy. So I opened a high maternity baby store. Six months later, I opened a second concept right next door. This was a designer outlet. I had the opportunity to buy and sell truckloads of off price and overstock inventory agains before the two thousand and eight h session, so things were flowing easy. People. There was a lot of waste when it came to inventory, and I thought, I can figure out a way how to sell that, so I launched my second concept. Ended up merging those two concepts into a high end designer outlet store, so think Tjmax in a small boutique environment.

5:17 Built that enfranchised it. In twenty ten, we had multiple locations around the country. Things were going well. From the outside looking in, everyone thought I was doing amazing. I had a seven figure business, I had multiple locations, corner office, warehouse, all the things. But it all came crashing down. And that's another story for another day as to why on the franchise thing franchise side of things it didn't work. But through that we lost everything, including our home, and I was left sitting on the couch thinking what was this all for. I have invested time, energy, sweat, blood, tears, my home right, my family savings, and now I have nothing.

6:00 And I had this opportunity to either sit and wallow in that and to blame others, or to say, what part of that did I have a pardon? Right? What part of that was because of the choices I made, and thankfully I chose the latter and decided, I'm going to figure out what I did wrong, and I'm going to build again, but I'm going to do it differently this time. And one of the things that I noticed as I reviewed my story and looked in the review mirror was that I had been so focused on top line revenue and never focused on profit. So I was building and marching towards a million dollar business, multiple locations, sales, sales, sales, but I had never thought about what it was doing to the bottom line, like what was I keeping? And I had worked for a dozen years in that business, never taking a consistent paycheck, always paying everyone else. And so I decided, I'm going to do it differently this next time. I built and launched, grew and sold a business within eighteen months. It was profitable from day one, and through that started to work on that inventory genius framework so that I could help other entrepreneurs avoid those very costly mistakes I made.

7:08 Excellent and I've got to tell you that is incredibly inspirational. You lost your house, my god. Yeah, uh, you can't get much lower than that. You can't. That's pretty low. That's pretty low. I can't figure out a way to get much lower than that, Chokie, do you have a lesson for Siera? Now, I want to pick up on what you said, Michael about how inspirational Sierra, the story that you just shared with us is, and even just the reflections on the impact of small business owners in your life. Like, I'm just so intrigued by that. So here's a question. Why are you so passionate about helping product based businesses use their inventory to create more profit.

7:48 Yeah. I think it's because I know that they can succeed, and I know what it feels like to feel hopeless. You know. So when before we lost everything, it, like I said, it looked amazing from the outside looking in, Like I was invited to the White House, I was on the Small Business Council of the US Chamber of Commerce, like I was speaking doing all these things. Looked very successful. But I felt like a fraud because I knew how much dead I had. I felt so stuck. I really hated my brand at that point, and I felt like I couldn't get out. And I know that there are hundreds and thousands of entrepreneurs that that are listening today that feel that way. That people are like, oh, my goodness, you are doing so great, look at your business, and they smile and nod, and then they think, but I'm not, like, and what are the missing pieces? And so I'm so passionate about this tooky because I know that if they just had those missing pieces in their puzzle, we could turn things around. And I've seen it and I've helped so many entrepreneurs do it, and so I just want to get that message out whenever. And however I can.

8:57 Just as a follow up to that, when you lost everything, was it due to a mismanagement of inventory? It was partially at least partially due to that. Yeah. So what's interesting is, and I talk about this in my book Inventory Genius. I sold franchises to potential franchises who became my franchisees to grow because I was focused on top line revenue. But I wasn't focused on that profit like we talked about, and so the choices that I made in selling was based off of money coming in right more sales. And so when I sold franchises to franchises that were probably not the best fit, and I didn't make the wisest choices That eventually came to bite me in the butt because now you have contracts with a lot of people who maybe you shouldn't have contracts with, right, So what happened in my business was there is a lot of fraud on the franchisees part things that went on that I didn't know about because I wasn't partner with the right people. But I did that to make sales because I thought that was most Important's right. So, because I didn't understand what profit did and that that was most important, I was never focused on bottom line results, and that's directly tied to inventory.

10:08 We were an inventory business, and so I just wanted to buy and sell lots of things instead of looking at Okay, maybe I don't sell three more franchises, maybe I work on building more margin, and my top line might not look as glamorous or exciting, But boil boy, does that bottom line look good? And then I can make wise choices because I'm not constantly chasing the dollar. Does that make sense? Absolutely? That's interesting. Yeah. And what's the number one thing you think inventory based businesses miss when it comes to scaling profitability? They do not focus on margin. They do not focus on margin. I was just listening to Mark Cuban actually talk yesterday. I was listening to a kind of a masterclass he did, and I just loved it because he kept bringing it back to the margin. And you know, we hear about margin and markup, which are not the same thing. By the way, you know, like, oh my goodness, I'm Mark. You know I'll ask a new perspective client, tell me about your margin. Oh well, I mark everything up three times. That is not your margin. That is what you mark it up. But you have sales, you have discounts, you have waste, all of those things. So I would say the number one. They don't focus on the difference between what I sell it for and what I bought it for, including shipping and those other included costs.

11:17 Here's what I have left. Let me give you an example. I just got an email from a banking company. They're offering me a capital loan. Right. I don't need this, but they offer money left and right right. So click on this button. You don't even have to really do anything. We'll just drop it in your account. Here's the fee. We'll take it out of your top line. Revenue every single day till it's paid off. So someone that's in dire straits financially, this is great, I can finally make my payroll, I can find So they sign up for this loan, and then what it does is it takes money out of their top line right away. Let's say they have a forty percent margin, that's what they're running on, and now twenty percent of their top line revenue is going back to pay back this loan. Now you have twenty percent to to pay and fund all of your operating expense and service any other debt. You cannot get ahead doing that. And I think that's what inventory based businesses missed. The margin is your secret weapon. It is your key, but it will also destroy you if you are not watching it very closely.

12:17 Yeah, you know, as a fallow up to that. I can't tell you how many people I've helped where they got involved in those specific loans. Those yes, horrific thirty percent interest loans they pay weekly. You know, they have to pay it back daily in daily and daily daily page. Yeah, oh my god. It is a killer. And you know what I've I've found out. I found out that the average number of times that a business owner has to go back into those loans is eight eight to sixteen times. So because they can't make it, guess what they have to borrow again, and guess what they go to the same source.

13:01 Yes, and it's deeper and deeper, and. It's deeper and deeper and deeper. Yeah, it is really unbelievable problem. One of the follow up is that that focus on margin. Yeah, and do you look at do you look at other benchmark when you when you're looking at a company, do you look at benchmarks and how they measure their gross profit measures up gross profit margin measures up to the benchmark or is it something you don't you don't look at because you try to strive for the highest ever anyway, Yeah. I mean we do a little benchmarking. I always say here's here's a couple of benchmarks I give to a new client because we all want like give me, give me the steady ground, like just tell me where to go. Right, So I say, okay, we're going to focus on at least a sixty percent gross margin and at least a twenty percent net profit. Now most of the time we want more, right, but at least it gives in there never close to that when we say are working together.

14:00 So that gives them something to push towards, because a lot of people like they'll come in with a brick and mortar store, Michael, and they'll be running on a forty percent gross margin. I'm like, oh my god, you can't. You cannot. You're going out of business every day. So those are kind of some benchmarks I give them. But then with my framework, what we really work on is what is your true cost of doing business? I remember the first time I had this light ball moment, and this was very far into you know, the retail so I was still running the franchise concept. I finally found someone that helped me understand the numbers after many years in business, and he said, Sierra, just because you buy something for five and sell it for ten, doesn't mean you have five dollars left. Like you have to pay to turn the lights on, pay to open the door, pay for insurs all these things. And so in my framework, I help clients look at like what is your true operating expense? Then we go up and say, okay, what's your sales goal? What's your running margin? Now? Then we scroll to the bottom. What does that leave you with can that service your debt? Yes or no? Then we go back to the door and we start to pull all these levers that help them understand where their margin actually has to be.

15:06 Interesting. Yeah, okay, excellent, that's great. Yeah, really intriguing. It's fascinating some of what you're saying. And by the way, ciers, you can tell we're taking some notes here and a number of business owners I would imagine are really inspired by what you're saying, in fact motivated. But let's also be honest. There's some skeptics listening, yes, and there's some folks where they'll say, look, I mean this doesn't really apply to my business. So here's a question for you. Tell us what you think about the profit first mindset and if you think it's a good fit for inventory based businesses and why. Yeah, I love this question because we all love to latch onto something new and exciting, a quick fix.

15:47 Right. So profit versus a cash management system, like, that's what all it is. It's just telling your cash where to go. It's basically an envelope system. So we think Dave Ramsey, what he did for people, profit verus does for businesses, right, the missing link? And I was profit First certified. I'm no longer in the running certification because it's like an ongoing license. I don't have my license anymore, but I was certified, so I know the back end of it. What was missing was anything related to inventory. So when I would when I read the book, I'm like, this is great, but we're talking about mats and subs, and I'm sorry. Inventory based businesses don't have mats and subs like a service based business. So what happens with the inventory? This is our lifeblood. So when I worked with clients on profit First, I always had them start by creating an inventory account and they literally would take their cost of goods for I always have them do weekly because baby steps, super simple, small amounts, Right, So look at your previous week's cost of goods, move the literal cost of goods over to your inventory account, and we start to build an inventory account. So you're self financing your inventory.

16:51 You're essentially creating your own line of credit. And this is going to take a while for them to catch up, right, because we have a lot of things that we're fixing. I love profit first in that it helps people focus on number one. If you're in business, pay yourself, because why work for free. I love that. I love that it helps them focus on numbers, like stop putting your head in the sand and pretending it doesn't matter. It truly does. But I think, like with any system, you have to make it work for you, and you can't get so so gung ho about following the letter of the law that you don't make things practical. So with my clients, I always said, let's make it practical, Like, let's be smart, what's most important, Let's save for a rainy day, Let's make sure you pay your taxes, and let's make sure you have money for inventory, and then sure we can open up twenty five other accounts if you feel like it. But right now you're not doing any of that. So let's let's start small and let's be smart about it.

17:46 You know, as a follow up to that, when you get a new client, Sierra, do you then not on profit first? Do you put them on profit first to start off with and then follow follow that program? Yeah, so we kind of do a hybrid of that. Like the first thing we always do is work on their budget. You know, I don't know about you, but I'm guessing a lot of your clients come to you, they're like, I've never done a budget. Budgets are scary. Don't tell me what to do with my money, you know. So we start with the budget because a budget just tells you, like what you can afford, and it shows you where the leaking is happening. So we just start with a budget. And then we'll typically start with an inventory account, so we start to save, you know, money, so they have money for inventory. And then I love to have them set up that sales tech account. So using some of those profit first methods and setting up some of those Sometimes people come to me and they say, I love profit first, I've read it, I want to start with it right away. Great, let's set up the accounts.

18:40 Let's do it. Sometimes the other week I did a consul and I asked her do you know anything She's like, I've never heard of that. What is that? You know? And it's just a savings It's a way to save and to focus on the right thing. So it really depends on the client. I think with anything you can't go it's like it's like training or wanting to lose weight, right, you can't go from I never eat out all the time, to like, I'm never going to eat out and I'm only going to buy organic fruits and vegetables, Like you won't stick with it. So the same thing with our money, Like, what's one thing we can do today that you feel like is manageable and that you can keep doing week after week, and then let's layer in something else. Let's layer in something else until a year from now you're like, whoa look at me. I am disciplined with my money.

19:20 Yes, you are right, Yeah, excellent, excellent, And I also, CIERR, could you share a success story of one of your clients and tell us why that happened, why that success happened. Yeah, So I had a client, love this story. She came to me, had a thriving business to proof a concept. She had the sales completely overwhelmed with what she thought was an inventory issue. This is always interesting too, what people think their problem is. So she said, you're an imagery Jesus. I read your book. I need you to help me with my inventory. Okay, sounds great, So let's take a look. So we dig into financials. I said, actually, what you have is a spending problem, Like you have margin, you have sales. We're just spending all that money like crazy.

20:01 So we worked on just slowing everything down. We built a budget and we lived the budget. I said, you may not spend money unless you tell me first, right, And so it's almost like asking permission because when you say it out loud, well, do I really want to tell Cyr I want to sign up for another X Y Z? Probably not, so I just won't do it right. So we slowed everything down like she was given out bonuses, she was given out all this you know, money left and right. Slowed it down. Then we went back and we said, okay, and now let's look at margin because we can always improve. So we got smarter with her inventory, tighter with her inventory. We worked together. She had a lot of debt, so let's figure out how to smartly and wisely pay that off, because you also want to make sure you're keeping cash, like you don't want to go so aggressive with debt that you completely wreck your cash flow either. In under a year, we paid off over a half a million dollars in debt. We brought her to a profitable place, and she's like moving and grooving, So to me, that is like wildly successful, right, Like she knows how to create a budget. She knows how to stick to it. She knows how to say no because a lot of times, like for me and my business, I was making a lot of money. And I give the illustration in my book if you give a mouse a cookie, you know, you give him mouse a cookie, then he needs milk. If you give him milk, then he needs this.

21:19 You know. That was me like, well, now I have this, so I need a forkliff. Well, if I have a forklift, I need a driver. If I need to have a driver, I need someone to manage the driver. And before you know what, you're spending so much because and you're making it so it hides a lot of mistakes. So just teaching people how to read what their dollars and cents are doing has helped my clients tremendously excellent. When so back to profit first for a second. Yeah, so you actually set up a bank account that's just set for inventory. Is that Am I hearing that correctly? Okay? And then you'll take the percentage of inventory to sales and fund that account accordingly when dollars come in. Yeah, that how it works.

21:59 Yeah, yeah, and it really shows them what they So we couple that with teaching them how to run and open to buy, so a buying budget, because if you use those two tools, it's like bumpers on the bowling alley, you know. So now the ball can't go too far that you can't overspend because I don't have any money in my account, so I can't spend it right and I'm not going to go too far the other direction, because an open to buy is going to show them here's what I have on hand. This is so funny. So I'll have clients say, okay, in my open to buy, I always have you have to put in what you're starting with today? Well, do I need to include the stuff in the back room that I'm going to be bringing out again? And I'm going to be of course you do. It's inventory you own. And if you don't want to include that in the number that you own, because when you include that it limits what you can buy, then you need to sell it so you don't get to just not include it and buy more stuff. So setting up that profit first, like inventory account, gives them, you know, and it also gives people permission because we do have clients sometimes that are caught too cautious about spending money too. That's that's not as you as often, right, But like, hey, you've got five grand in your inventory account, it's okay to make that purchase, Like it's okay to spend that money. So it helps on both sides of things.

23:11 And Sierah, what happens when one of your clients buys buys a dog, buys some dogs? You know it's a bad inventory that doesn't turn. How do you make suggestions to that particular scenario. Yeah, so I am very much of the school turn and burn, turn and burn that inventory, like it doesn't age. Well, the more you touch it, the more it costs. People don't think about that. Every time you move it from this rack to this rack, this shelf to the shelf, pack and unpack, it costing you money. And that cost of goods is adding up. I do not like, you know, ten percent off and then twenty like this is like fifty percent off, seventy five percent off. Yeah, get the cash whatever that is out of it and turn it into money again. So as long as the cash is hanging on a hangar, in a shirt, or it's sitting in a box, it's not doing anything for you. So whatever we can get out of it. We turn it and burn it. Now. People get very nervous, right, They're emotionally attached to their inventory. It's like, oh my goodness, I spice right, you know, but I h yeah, but that was. It's neither here nor there. It's not doing you any good. So let's get rid of it. Let's move on, and let's be smarter and whyser the next time we invest that dollar.

24:22 Right, I am in your camp on that, absolutely in your camp. I've seen too many times where inventory turns into relics and antiques and all that, and of course the value is diminishing by the minute it is versus what they think potentially appreciating. Or if I can only sell it for ten percent off, I'll get my money back and you know fifteen you know, Oh it's just terrible. But anyway, that's really terrific. So see, how do people get a hold of you and learn more about you? Learn more about your your company? Yeah, I think the podcast. Yeah, the best place to go would be just my website, Sierra Stockland dot com. There's a quiz there that they can take. So we just asked some questions about their inventory, their numbers, what's really keeping them up at night, and that'll help direct them to really good resources that they can use based on their business.

25:18 Fantastic. Well Sierrah. I want to thank you, Choke. If you have any more questions face here, I should have asked. I don't know that this is really hold on. Yeah, thanks Sierrah, thank you. I just want to thank you. It's been terrific your wealth of knowledge. Thank you so much for coming. Yeah, thanks for having me on and to everyone listening, I just want to encourage you to focus on what matters, and I believe every mess can be fixed and every problem can be solved. Excellent, Thank you so much. That's wonderful. Thanks Sarah, so chicky. You know, one of the things I'm finding with clients is that in general, and this has happened in the last I want to say, I don't know thirty days or so, that demand is slowing. I am getting more and more calls with all of a sudden business is slowing.

26:14 Demand is slowing people on spending at the same enthusiastic clip that they were spending at the dollars. The sales per the average sales per transaction is down, and like I said, more and more calls of new clients as well as existing clients and so and as a result, you know, we business owners are truly in uncertain times. So what I'd like to do today is take a few minutes and talk about how we business owners can prepare for uncertain times. So, so, how do we business owners prepare for uncertain times? You know, business, it's actually terrifying.

27:04 It's terrifying because we're responsible for so many other people's lives. And the scariest thing about business is that when we wake up in the morning, we really never know what to expect. Me too, I'm the same way. But today our objective is to give you some ideas for discussion. We want to present financial and business strategies that your competition isn't doing and by virtue of that will help you thrive in uncertain times, reducing the terror and uncertainty of business. But know this, you know you can never really be ready for uncertain times, but you can be prepared.

27:46 And our job as business owners is to be prepared to adapt. This means to be flexible to change, and many are resistant to change and therefore don't adapt, and that's why so few thrive and uncertain times, yes, and chooky. Business is always changing and this is true now more than ever, and that's why you and I will keep writing additional additions to our book and get feedback. And just a short time ago, when twenty twenty two, interest rates were low and many industries were having record years, twenty twenty three was tougher, but you know, it was still pretty decent. But in twenty four, with interest rates staying high, credit card delinquencies rising, personal savings and decline for many, this year has been very uncertain and it's been really for a lot of small business owners, has been off. And as a fractional CFO and profit growth strategist, I see this uncertainty every single day. So I get asked, why are some companies winning while others are struggling? What are the winning companies doing differently? And how can I win in these uncertain times? Because no matter how bad the times are, there's always companies that are thriving and winning.

29:10 So let me answer those questions. You know, the first thing winning business owners do is they have a laser focus on their number one goal, not their number one business goal until later on, but the number one goal for themselves and their families. And this is not only their why, but this is their motivation to adapt and to be flexible to change. Great CEOs always start by understanding their personal goals and motivations. What's really important to you and your family. You know, I don't know about you, but it's important to me that my business serves me, not the other way around. I don't want to feel like a slave to my business. And we must start by setting our personal goals first and then moving to our business goals. Now, with respect to our business goals, net profit goals first, then revenue goals. You know, revenue goals without net profit goals are useless. And that's what Sierra was talking about, right, focus on the profit. You want more take home pay, you need more profit. Pay down debt. You need more profit. You need to hire a manager, you need more profit. This is exactly what Sierra was talking about.

30:24 Absolutely. In fact, Michael, we'll get in a stream of comments and questions, so let's maybe take a minute or two to just address those so specific to personal goals, like, what are some examples through the decades you know you work with business owners, what are some examples of good personal goal statements? Yeah, I think a lot of business owners want more time freedom and consistent profit and consistent profits when they're not there. So more time freedom, okay, because they want the time freedom to spend more time with their families. Correct, spend more time with their children, go to their children's soccer games, based basketball games, baseball games. So time freedom comes up a lot, but also consistent profits when they're not there. You know, they want to break away from their business. They want their business to work for them instead of them working for their business. And there's several ways to do this, several all take discipline, all take commitment, but very very doable.

31:35 Yeah, very helpful perspective. Yeah, thanks Michael, and that no problem. So with respect to our business goals, which is the second thing, it's as I mentioned, net profit goals first, and this was exactly what Sierra was talking about just you know, just five minutes ago, so it fits very well. Next, winning business owners at uncertain times have a visionary mindset. It's easy, so easy to get sucked into the doom and gloom of uncertain times. You know, when I was getting those phone calls from those from the new clients and from the existing clients, they're all sucked into the doom and gloom. It's easy to go into negativity and scarcity mode. Don't do that. I mean, the world is changing, but the world isn't ending. We need to adapt, not shut down. And so I ask everybody to avoid scarcity based decisions and make visionary decisions. Think about the impact of the decisions next quarter, next year, five years from now.

32:41 Make decisions that will serve you well in the long run. And you know what's fascinating is that when we think about the vision of our companies and we make decisions based on the long term, it's amazing how it inspired us because what it does is it allows us to think back to the reason why we started our business in the first place. You know, what our vision was then, what our mission was then, and when we make decisions based on that, it really it makes us feel a whole lot better and inspires us. Now, the next part, I'm going to come into the numbers now, so I wanted to. I want to prepare everyone.

33:27 Absolutely, and all folks get prepared to digest the numbers that Michael's getting ready to us. And you know, Michael's gonna take us to a strategic CFO level, right, Michael, so's right. A couple of questions and let's get to the heart of this, right, I think some folks would benefit from your perspectives here. So having and adopting a visionary mindset when you're dealing with the pressures of employees have to get paid, vendors have to get paid, things are really really stressful. How how does a business owner keep that longer term visionary mindset when they've got a lot of short term heartache and headache.

34:15 Chookey, It's not easy, but it takes a certain mental toughness to be able to get through those difficult times and to understand. You know, in accounting, there's a concept called going concern, okay, and a business is always to be assumed to be a going concern. No matter how difficult things are. Your business is a going concern. And so you know, you need to focus certainly on you've got fires. I get that, you've gotta you're gotta handle those You're gonna put those fires out. And some of the concepts that we've been talking about in previous oh where you can see listen to the previous shows at Powerful Business Strategies dot Com. Actually address how to deal with those difficult situations and how to prevent them. So when we talked about it, and we we dedicate an entire we dedicated an entire show to solving cash flow problems, which is what you just described. And so there are strategies that you can do and once once you start to work through that a little bit, you'll gain a lot more confidence and the vision will come back. That vision will come back. So what I what I'd like to stress is that you go back and listen to

35:47 the cash Flow Problem podcast and and that will help tremendously to deal with all those cash flow issues, no matter no matter how bad they are. I mean, Michael, just based on some of the comments that are streaming in, folks are really resonating with that, particularly your ability to link the confidence with the vision. That's quite inspirational, right, So as the confidence grows, the vision becomes a little bit more solidified. So yeah, Michael got really good stuff. So look, I think folks are ready to take on some of these Okay, excruciating numbers, Michael, let's talk about. But by the way, I am very sympathetic to people in those situations, and you know that's why we're here though, we you know, we help people in those situations absolutely. So, as I mentioned this next part, it's a little numerical, and it might freak out some people. And one of the reasons why it might freak out people is because a lot of people aren't doing it. You know, we've taken over one hundred and fifty business owners to an individual business assessment, and in that assessment, we have three basic financial questions, and eighty percent of these business owners did not know the answers. See, winning business owners make the right decisions and uncertain times because they make decisions based on the numbers. Now, if you really listen to Sierra earlier, she was talking about that exact same thing.

37:21 She gets people more equated with the numbers. She lets the numbers and the data drive decisions, not emotion. And so that is really critical because when times are good, you'll get by, Oh god, everybody got by in twenty twenty two not looking at the numbers. It's not effective, but you'll get by like you did in twenty twenty two. But to win at uncertain times, you must make decisions based on the numbers. Now, you might ask what numbers, Well, I've been able to now, not completely, but I've been able to nail down eighty percent of your decisions that you make in your business can be narrowed down to just five numbers to look at. If you know these five numbers, you can eighty You can make eighty percent of your decisions. You can make those good, good decisions based on the numbers and the data and those five areas.

38:28 Those five numbers that you have to know what your sales are. You have to know what your gross profit is. You have to know what your gross profit percent is. This is what Sierra was talking about when she was talking about gross margin, net profit. You have to know that and your current cash balance. So it's once again the vital five, these vital five numbers. You must know stales, gross profit, gross profit percent, net profit, and your current cash balance. This will drive winning decisions. Next, winning business owners understand what their financial statements are telling them. The three key financial statements are the P and L, balance sheet and cash flow statement. You know, when I'm in a room of small business owners and I ask how many people look at their P and L at least once a month, less than half the room raises their hand.

39:32 When I ask how many people look at their balance sheet once a month, less than ten percent raise their hand. And when I ask how many people look at their cash flow statement once a month, I might get one person to raise their hand. Imagine cash flow the lifeblood of a business, stuff that Sierra was talking about also being totally neglected. Well, the good news is you don't have to know how to read financial statements, but you do need to understand the story behind them and how those financials will guide you to the best decisions. And if you need help understanding your financial statements, go get that.

40:14 The next thing winning business owners have it at certain times is a business and cash flow forecast, and we dedicated a whole show to this. And why is that because the business in cash flow forecast helps you understand the outcome and ramifications of your decisions before you make them. I mean, for example, how many how many of you of them have been surprised by income taxes? Well, if you had a business in cash flow forecast, you'll never be surprised by tax liabilities again, because you'll always know what your projected net profit looks like. And CEOs of the best companies are never surprised by taxes or anything else for that matter, because they have a business and cash flow forecast. Bottom line is this, if you want to thrive at uncertain times, the number one tool of winning business owners is the business and cash flow forecast. Next.

41:11 Winning business owners at uncertain times need the right business strategies. Did you know that ninety five percent of business strategies used today are identical to competitors and they don't work. And that's why we say everything you've ever known or learned about business is wrong. Your strategic plan to be made up of strategies that your competition isn't doing. Every business should have a position of market dominance, which is what we discussed in a previous show, Our compelling offer, what we discussed in a previous show, and joint venture partnerships that are working, just to name three of several strategies available to you, and Chuky will go into more detail or we will Chokey. We will go into more detail on these as Our show continues on every Monday at noon Eastern time. Absolutely, and just so you know, the position of market dominance and compelling Offer are previous shows that you could listen to and they're very, very insightful and you can find them at Powerful Business Strategies dot com. And the general mindset of business owners at uncertain times is doc cot everything. It just can't cut your way to success. We have a formula for cutting expenses.

42:28 You cut the expense if the expense doesn't help you acquire a customer, if the expense doesn't help you retain a customer, if the expense doesn't increase the long term value of a customer, and if the expense doesn't help deliver your product or service to a customer. And after you apply those rules to expenses, look for investments in the three a's assets that produce revenue, amazing people to help you scale, and automation to leverage time. You know, success at uncertain times is not defined by those who spend less. It's defined by those who spend smarter. And Sierra was talking about that as well earlier. Today. Today, we're all facing the call to adapt and to make decisions based on the numbers. Those who do will make business a lot less terrifying. Those who do will achieve their number one personal goal. Those who do will thrive at uncertain times. Did you know that there are more millionaires and billionaires minted in uncertain times than any other time period in history. The only question is are you prepare to be the next one? Chooky? I think we have time for compliments.

43:52 Yes we do, Yes we do. And Michael, by the way, before we jump into compliments, I took some notes on this preparation for in certain times, and I think the insights that you shared are so powerful. Give us a sense if there was a headline that a business owner could walk away with just one headline as it relates to dealing with and managing through uncertain times, what would be that one takeaway or one headline? Michael, We need to adapt and to be flexible to change. I love that adapt and be flexible to change. And as Michael and I always save their questions that come up, if you need help, go get that help. So look very excited about our business complements segments. So we have five business owners that we want to spotlight and compliment in today's show. And as always, these business owners represent businesses coast to coast, so there's true national representation here West coast, East coast, Midwest and beyond. So the first business owners, Jennifer McKenzie with Organzed Synergy do incredible work.

45:03 I mean, they've got this mission to empower and equip nonprofit leaders with the tools and the support and the resources to optimize their operations and really fulfill their potential. As we know, there are a number of nonprofits that are doing just incredible work and Jennifer and her team through Organize Synergy, really helped to drive that. The second business owner is Alisha Krinn and she and the team are with I love the name of his business. By the way, Michael inbound Gold usaically. I mean, you know, coming off the Olympics, right and we recollected as a country a lot of gold medals and Alicia and her team do a really good work. App part of their mission statement is to help you, as a small business owner and your team make your CRM so effectively the way that you manage contacts and data to make it much more efficient with the use of AI. So kudos to Alicia and the team there. The third business owner is David Kirsten with Wide Angle Media. The team there they are video marketing strategists and a lot of what Michael and I talk about is just how to take your message and drive your message to your target audience.

46:24 We've done this in past shows, for example through the conversion formula that we've discussed, so David and team helped to really drive video based video marketing messages. The fourth business owner is Tybooberry and they are a really intriguing business. The business is called My Little Beehive LLC. And suffice it to say, I think if anyone has just a minute or two check out My Little Beehive dot com. I think you might be pleasantly surprised at some of the work that they do there. And then the last business owners that will highlight today as Whitney O'Brien with Whitney O'Brien photography. Part of why we wanted to really spotlight Whitney and team, it's just the surgical and strategic approach that they take to helping you tell your story through photography, your value story through photography. Michael, these are the business owners that we wanted to spotlight. We have a series of other business owners that will spotlight next episode, but I'll swing it back over to you Michael.

47:36 Thank you. Chicky. Yeah, I wanted to once again say that at the website Powerful Business Strategies dot com, you'll be able to listen to all of our podcasts that we've done, all the radio shows that we've done, including things like the position of bocket, dominance, compelling offers, and then the conversion formula which Chokey talked about. We also had a show about business and cash flow forecasting and strategic partnerships and so many strategies. If you go back and look at go to Powerful Business Strategies dot com.

48:19 And to get a copy of the book Powerful Business Strategies, simply go to our website www dot NeXTSTEP CFO dot net. It's totally complimentary and until next Monday at newon Eastern time for Chucky Obio. My name is Michael Barberta and my remember, yes. I'm going to do one thing a little bit unconventional because okay, this particular business owner kept sending some comments they need to deserve a spotlight. So okay, now it's Cavelis in the comments says you love this question, Michael, How do you find the perfect profile to being a part of your team? Oh well, it depends what skill set that they bring to the table. But I think a certain level of it.

49:09 If you notice a certain level of enthusiasm, I hope you hope you notice at the level of enthusiasm, the level of enthusiasm that we have for doing this show, and for this show especially Choky, not as much me, but especially Choky. He's very he's very enthusiastic. So yes, we look, we look for enthusiasm. We've we obviously looked for knowledge in the areas that your that your your skill set lies and we're always looking. So uh, if you know I web, I'm sorry. My uh email addresses your c f O. Y O. You are CFO at next Step c f O dot net, be happy to if you send a resume, happy to UH to review it.

49:56 It would be my pleasure. Great, Michael, Thank you. So to get a copy of the book, Powerful Business Strategies, simply go to our website www dot NEXTSTEPCFO dot net. It's totally complimentary and until next Monday at New Easton time for Chucky Obio. I'm Michael Baberita, and remember, don't keep doing what your competition is doing. 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