Introduction To Powerful Business Strategies

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 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 Next Step CFO Michael Barbarita and joining Michael for today's show as an executive moderator is chooky obio.

1:00 This is chookey, 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, Choky? How do you apologize to the world that you were that you had technical difficulties to get on the. Show by well, well, thank you, Choke. My name is Michael Barberica, 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 live the life they desire. And our mission is next Step CFO is dedicated to guiding small business owners and leveraging their time, exploding their profits and build a meaningful legacy. And you know this show powerful business strateg Jez had our book of the same name, is a step toward accomplishing that vision and mission. So with that, I'd like to hand it back to my co author and moderator for the show, Shooki Obio.

2:10 Michael, thank you, and so address your question about the technical difficulties, I would just say, look, we are in the business of problem solving and we just solve that. I mean right, we solved it elegantly. A quick disclaimer, Michael and I are both affiliated with a number of different organizations and the business owners the leaders that will join our roundtable discussion as part of this radio show moving forward will also be affiliated with their organizations, but the views expressed on this show our own views based on our successful experiences, and my role as a fearless moderator for this radio show is just to ask the right questions to help you as a listener, and to help me learn business and financial strategies that the competition isn't doing. And let's kick off with the first question. So, look, Michael, the more I learn about your career story, the more inspired I am. Why don't you take a few minutes to just give us a walk down memory lane?

3:19 Great? Thank you, Jocky. So back in nineteen ninety nine, I just sold my business for multiple I'm sorry. I sold my second business successfully in nineteen ninety nine. I was back in the Stone Ages, by the way, my first business sold for multiple seven figures. And I gotta tell you, I didn't think I could do no wrong, you know, after owning and exiting too businesses, I just thought I had the keys to the business kingdom and that I could succeed in any business. So, in all of this glory without any experience in the medical profession whatsoever. After all, who needs that? I started an outpatient rehabilitation facility called Freedom Therapy Center. Now, in the successful businesses I owned, I implemented business strategies that my competition wasn't doing. For example, my first business with a ski specialty retail business, and we grew the company from two and a half million to eight million in five years. And a contributing factor to that growth was a strategy called a risk reversal where the seller in the transaction takes most of all the risk. And one of the problems that the customer had in the ski industry is they never really knew if the ski they were being sold by some hot shot ski salesperson was the right ski for them.

4:40 So what we did is. We implemented what we called a ski guarantee, where we let the customer ski the ski three times. If it wasn't right for them, they could take it back and would refit them with a brand new pair. Now, Joki, just so you understand, when a pair of bindings goes on a pair of skis, it depreciates the substantially, not to mention when it gets skeedar Wow, yeah, so my employees and manages. As a result of all that thought, I was, you know, going crazy and out of my mind. But I knew there were no competitors that would do it. You know, we sold eight thousand pairs of skis the first year we implemented a twenty five percent increase, and only eight came back.

5:22 That's remarkable. Yeah, and you know the next year we sold eleven thousand pair and only fourteen came back. You know, many, many, many business owners think that when you're taking a risk by implementing a risk reversal, that it's going to backfire, you know, and it had never seen it backfire, to be honest with you. But then you fast forward to Freedom Therapy Center, where I must have taken these stupid pills or something, because I did exactly what my competition was doing, marketing the doctors to get referrals, dropping off chocolate cakes as bribes to front office staffs to get to the doctors. And by the way, I gave away two thousand cakes one year.

6:07 I don't know. I'm almost embarrassed to say that. I offered services the exact same way my competition was doing. No risk reversals, no compelling offers, no strategic direction, no creativity, and no differentiation. And I was looking for customers who were anybody, and there were a bunch of anybodies that ended up really being nobody. And I'm a financial guy, so I know how to manage cash flow. But despite all that, we were incurring huge, enormous operating losses, and we were hemorrhaging cash every month. Yeah, chick's unbelievable. Every month, I was going into my savings to fund operating losses.

6:48 And after a certain point, I promised myself I wouldn't put any more money into the company to fund operating losses. But like every business owner, I broke that promise, and I broke it twice. Thank god I wasn't married. I'd be under the pressure of being told to get a real job. I was staying up nights wondering what I was doing wrong. I was waking up in the middle of the night with cold sweats, worried about cash flow and customers I was losing every day. There were many Wednesdays when there was no money in their company bank account and the payroll do on Friday. Employees were looking for other jobs. They saw a sinking ship people, we owed money to a calling. There was personal liability galore, and then it ended.

7:36 I fell on my face. Incredible. Have you ever fallen on your face? Yes? Did you stay down in the hope that no one would notice? Wow? Did you care more about what other people would think instead of what you could. Learn from this? You think I stayed down too long? Have you ever stayed down too long? Vendors, leasing, companies, banks, they all had hitmen coming after me.

8:19 My ego was shot. The guy who held the keys to the business kingdom, the guy who sold a business for multiple seven figures, was facing his most difficult point that he thought he would ever face in a million years. But I learned two things I learned. The first thing I learned is that after one falls on their face, the hardest step to take is the step after the fall. Yes, the next step, Yeah, the next step. And so thirty days after I closed Freedom Therapy Center, Next Step CFO was born. And the second thing I learned is you just can't keep doing what your competition is doing. And today I come to you all and I ask you to ask yourself, are you doing the same thing that your competition is doing?

9:13 Are you messaging the same way as your competition is messaging great service. He is in business lowest price. Do you want to change that? Because this show powerful business strategies. Everything you ever learned about growing and building a business is wrong and all about and it's all about business strategies that your competition isn't doing. And that's what this show is all about. And I take it right back to you, Choky. I can't hear you, Chooky. Michael, I'm so inspired. Sorry, it's interesting. One of the reasons why you couldn't hear me. I was lost in my thoughts, to be honest, just digesting that career trajectory and the manifestation of that with next Step CFO as your lessons learned, right, And the more I hear about that career story, Michael, the more inspired I am. And look, you and I have been collaborating for a while, and when I think of our professional networking across multiple industries with multiple business owners, the sense is that business owners are just under a lot of pressure. So, Michael, I've got a couple of questions for you related to this, just as we build out our conversation. So when you think of how you reconnected with not doing what the

10:47 competition was doing? Right, How did you have the confidence to do that? Given all the pressures, right, the pressures of growing the business, managing the business, how did you have confidence to really focus in on what the competition wasn't doing and come up with a unique set of strategies? Well, I think you've heard of the eighty twenty world chookey we wrote about in our book. Yes, and you know, for business, eighty percent of what you do I'm sorry, yes, twenty percent of what you do generates eighty percent of the outcome, or in this case, in this case or in many cases, twenty percent of what you do generates eighty percent.

11:32 Of the revenue. So you know, one of the things. I looked at was I looked at specifically. What is it? Because if you look at things like all the things that business owners have to know, it's it's absolutely overwhelming. We could you could take all the different slices that that we have to know, and then there's subcategories of the subcategories. I mean, in one particular the case like digital marketing, for example, there are all these things you have to know about social media. There's all these. Things you have to know about email, there's all these things you have to know about drip campaigns. And so what I tried to do is just break it down into that that twenty percent that essentially generates eighty percent of the revenue.

12:21 And so did it give me confidence? It was just a different approach though, because it was a different approach and it made sense to me, that gave me confidence. So it wasn't exactly, you know, exactly that. What I the way I went to go, the way I went about it with the eighty twenty rule gave me confidence. It was just breaking it down into what really important. That's that that gave me the confidence. And so our listeners that I want to pick up on that point, Michael, to our listeners, that eighty twenty concept is really powerful and this applies across ultiple endeavors and specific to business. Michael, just as you've pointed out, twenty percent of what a business owner does daily in their business is actually what translates to eighty percent of revenue impact. I'm fascinated by that. Right, So, to this point of the claim that we make as part of this show, everything that a business owner has learned about business is wrong, right, Michael, I want to get back to that, and I want to relate that to the twenty percent that business owners should really focus in on.

13:31 So a big part of the challenge for a lot of business owners you reference digital marketing is marketing. How do you get the right message to the right prospects, whether those prospects are clients or customers, whether they transact on products or services. So to that point, right, Michael, I mean. One of the things that we've learned about marketing that are wrong. Well, uh, I'm glad. I'm glad you mentioned that, shooky, because one of the things that I talked about at the end of my opening, uh, was what I call I hope so marketing. Yeah, and what I hope so marketing is it's it's all of these little I'm gonna call it, whether it's taglines or uh, sayings that the customer is saying to themselves, Well, I hope so. In other words, if a customer is going to make a purchase and you're saying that you have the largest selection, well, if I'm going to make a purchase from you, I hope so, I hope you have the largest selection. If you're saying you're the most professional.

14:50 I hope you're the most professional. You say, we have of the highest quality. Well, my god, if you're a customer, why would you go to a place that doesn't offer high quality? You know? So, this is what we mean, and this is what and years experience, lowest prices, honest and sincere. All of these things the customers saying to themselves, I hope so and so one of the critical components of doing what your competition isn't doing, because your competition, for the most part, is utilizing I hope so marketing. They're talking about the largest selection, they're talking about the lowest prices, they're talking about the best service, they're talking about the being the most convenient. They're talking about being in business for forty to fifty sixty years. You know, those are the things that they're talking about that everybody's talking about. So what we found in our research in our businesses is that the way we separate our ourselves from our competition. One way that we separate ourselves and we're not doing what our competition is doing is by utilizing something called the conversion formula.

16:11 Oh wow, yeah. And the conversion formula is designed to convert prospects into sales, and I'll go over some of the just basic components of it. But this is something that we'll talk about in great detail in future shows for sure, because the reason why everything most people have ever done in business is wrong is mostly centered around, I hope, so marketing and being tactical in their marketing versus strategic, and the conversion formula allows you to be strategic. And so yeah, go ahead ahead.

16:57 I'm really intrigued by that, Michael, And you know, sorry that the energy and the animation on this end is just based on the fact that there were a couple of things that you shared as part of that reflection that I'm really truly motivated by. So this, I hope so marketing, as you were just taking it step by step there, Michael, Ema is just thinking of a lot of the websites, business websites that I've visited, even just like in the last six months last year, and you're right, that's precisely how a lot of business owners present their products and services. It's you know, whether cheapest this or we've been in business for X number of years and we've got the largest selection there. And it's really interesting to kind of think about it that way.

17:38 It's like, well, I hope, so, I mean, why else. Would you be in business if you're the most expensive, Well, you've got the least number of selection options. Wow. So I'm really intrigued by that, and I think that's a really profound point and perhaps a number of our listeners, I mean, what are your thoughts. Maybe it makes sense for a number of listeners, just as an action item to look at their website, their business websites, their competitors' business websites, maybe even their social media pages and just get a sense for whether they're doing a lot of the I hope so marketing that you reference. What are your thoughts related to that? Michael, Yeah, No, it's it's it's very prevalent and what it does because everybody's marketing the same way. Yeah, it gives the customer only one option to differentiate you from the competition, and that's price.

18:33 And so everybody wonders why. See if I talk to small business owners, they'll say, trice is the most important thing. But the reason why it's the most important thing is because we haven't given the customer any other reasons. Why they should do business with you. Mm. So it's it's that differentiation. That's that's the critical component. And the conversion formula helps you be strategic in the sense that it helps you identify opportunities that your competition isn't doing. Okay, So, Michael, I mean when you hear things like, oh, there's this conversion thingy right again, I'm gonna speak as a business owners listen to this is like, oh, you know, Michael's this great CEO, this great CFO mind, and he's saying things like conversion formulas and equations, you know, and I'm just trying to keep the lights on for like the next physical quarter.

19:35 Right, So conversion formula? What does that entail? And do I need just again, speaking as though I'm one of these business owners listening here, it's do I need to set aside marketing dollars for this? Do I need to set aside a lot of AD dollars for this? Give me a sense of well, not necessarily. I mean, you know, you might either redirect your marketing your current marketing dollars or h and you know, or you might set aside additional marketing dollars once you here or once you uh understand the formula.

20:15 Please and can you can you walk us through the formula love you'll be. Happy to so uh. First of all, it's important to note that the conversion formula is exactly that. It's a formula that has to go in the exact order if you go if you if you take. The formula out of order, it won't work for you. And so it's the formula starts is what we call the captivate, which is essentially the problem that the customer has and doesn't want. Now, let me explain something. If you're a painter, let's say, and you say, the problem is that my customer, my customers want to know if the problem my customers have is they want to know what color paint to put on their uh and to put in their interior into the bedroom.

21:10 Correct. And the problem is every painter can solve that problem. So it has to be you have to really think about either the problems with the industry as a whole, that's really where I think you should start, but also h problems specific to a customer's journey and deciding. Whether or not to buy interest. So those are those are the things, and we have systems in place to get deep into that so that you'll you'll whether it's whether it's with us or somebody else, you'll be able to get really deep into understanding what the problem is. So that first step, the captive eight is really understanding the problem that the customer has and doesn't want. So then and by the way, when you have a compelling problem that you present, it interrupts the customer.

22:14 M okay, which is a very very important point because it's it's hard to get attention these days. Tell me about it, right, And that's why the first part of the of the formula is is. To captivate because it interrupts the customer. H Some people call it the catch line, or there's other other terms that they use for it, but essentially we call it the captivate because it gets that attention. It interrupts the customer because the problem is something they need solved. And the second part of the formula we call fascinate. And to fascinate is the solution, your specific solution to the problem that the custom stomer has and doesn't want and and and it's something that the customer can't necessarily find somewhere else.

23:08 But here's the interesting point, even if they can find. It somewhere else, even if the customer can find that problem somewhere else that competitive business owner is not talking about it. You're the only one who's talking about it. Okay, that's quite interesting. So that's part of what creates the competitive advantage. That's correct. That's correct. So so UH in other words, five hundred painters can offer let's say, UH, let's say let's say the problem, the problem that the customer has and doesn't want is they're they're sick and tied or painters coming in with UH and and making a mess and not cleaning up afterwards.

23:55 Let's just say that's the problem. I'm not saying it is, but let's just as an example, let's say that's the problem, and you offer a solution to that problem by UH making specific a specific claim that you guarantee that the that the house will look the same way when you leave as when you entered it. Wow. Uh, that that will start to that that scenario can potentially interrupt the customer because that's a problem that might be taking place in the in the industry. So so this is so that's the key element, and those two components together m h to captivate and fascinate a called position of market dominance and without that, you can never complete the rest of the formula.

24:50 Okay, I want to pick up on something you said about just using that painter example. And we have quite a number of trades people that listen to this show, right, So people in the trades painters, plumbers, And one of the things that they may be reflecting on is is Michael describing an emotional problem. Well, normally it is interesting. Well, people make buying decisions emotionally and then back them up logically, you know, so that they feel good about it, you know, But usually the decision is made emotionally. And we believe that the conversion formula, especially the first two components, which once again is the position of market dominance. We believe that those first two components can differentiate yourself from your competitors and can interrupt the customer.

25:48 Interesting, and when I hear that phrase position of market dominance, it connects me back to something you said earlier, Michael, about this business owner and hurts hem or this business owner and his team. They've identified a problem in the industry that's got some emotional content, and they're addressing that problem in a way that the competition isn't addressing that problem. So just by the function of doing that, Michael, they've created this position where they could dominate because in some ways they've set the terms of engagement. Is that part of why this becomes a position of market dominance, right. And the fact that you know when I said earlier that it's difficult to get people's attention, yes, today, I mean there's so many things.

26:36 How many messages do you think? I mean, I mean just this morning I got a hundred emails. Uh, you know, I mean how many messages does that? Does the average business owner get get bombarded with on it on a daily basis? And the average customer, yes, you know, And and so there's got to be a way to differentiate ourselves. Uh. And we've seeing this, this has worth time and time again. Uh. But but you need to identify that problem, which is the is you know, the key component and the key differentiator and what's. Gonna make it work or not. If you identify a problem that everybody can solve it everybody and it's kind of commonplace that everybody can solve, like any painter can pick a color paint, then it's just not that's not the that's not really the problem that the customer has Whereas if you're going to make a mess of their house, that's a problem. If and if the industry is known from making messes of a house, then that's a that's a problem, and they want to know the solution to that problem. They want to choose a vendor that's going to solve that.

27:51 Yeah, it is, Uh, it's remarkable Michael, when you think about just some of the implications of what you've just shared, right, just this idea of how you've kind of carved out this space in an industry, this space in the marketplace where you're you're dominating, right as a small business owner, as a medium sized business owner. Now, let's say a business. Owner gets that right, Let's say and I took some notes on this, so they get the captivate, right, they get to fascinate, right, So they've interrupted and now they've engaged these prospective customers, propective clients that have that problem. Right, what's next, Like, what what would be a good next step after that?

28:37 Right? So if you have an effective captivate and fascinate, now you've got their attention. Now you have the time to what we call the educate. So the third step in the process in the formula is to educate, and that educate you know, it could be an Now you have a minute, two minutes, three minutes to really go into detail on how you go about solving that problem. So for example, uh, after after the painter explained that he'll leave the house in the same condition as he found it. Uh, maybe he talks about wearing those booties. Maybe you know, maybe he talks about putting, if it's an interior paint job, putting, Uh, how he puts a special plastic over the over the the furniture. Correct, How they have super dup of vacuums that will uh clean up any uh lint or or debris that they that they leave behind. So they go into that detail, so to speak.

29:48 Uh. And So what the position of market dominance does to captivate and the and the fascinate is it allows you, now now that you've got the attention of the of the it allows you to now go into more detail as to how you go about solving that problem. Ah. So you don't you still don't go into the great service and the lowest prices and the largest selection and all that kind of stuff. You don't bother going into that. But what you do focus on is how you specifically, in more detail, solve that particular problem. That's really interesting. You know.

30:30 One of the ways that I'm sort of processing this insight, Michael, and thank you, it's just a wealth of information, is it's almost like the captivating the fascinate. You've kind of outlined a picture and then the educate allows you to take that from like a regular HD picture, it's like an ultra HD picture, right, So you're adding more detail, more pixels to the picture, right. And you know, it's about getting attention. If you're captivating fascinate works, then you're you'll have more time and you'll be able to go into more detail with your educate. And it doesn't have to be long. It could be a minute, it could be a half a minute. Interesting, yeah, so uh and or it could be I've seen I've seen some successful educate education educate portions of a of a of the conversion formula the last five and ten fifteen minutes.

31:24 So yeah, it's uh. As a matter of fact, now that I think about it, I've seen some last four hours. Because you have that, you have that attention. Uh. And and and you've hit an emotional chord when you identify a problem and provide a recommended solution. And I want to pick up on that last phrase. You've hit an emotional chord and this allows you more time to build a trusted relationship with the prospect. So you've captivated, you've fascinated, and you've got the necessary it's time to educate a lot of business owners. Again, going back to your story, Michael. They'll say things like, well, look, i've got payroll in a couple of weeks and I've got to get my guys again, just using the painter as an example, I've got to get paint jobs, like I need to make offers.

32:20 So give me a sense. Of what what do you think should come next after we've sort of captivated, fascinated and educated. Well, here's the here it is I think the most well, not the most important. The most important is the position of market dominance to captivate and fascinate. But ah, the fourth component is as an offer. Uh, and your offer needs to be so compelling that the customer can't say no. Yep, and uh, there are there are several components to a compelling offer and uh, you know this is something that will definitely dive deep into but in today's show, and it got shortened because of the technical difficulties that we had.

33:11 But in today's show, I wanted to at least explain the conversion formula which interview once again is captivate, which is identifying the problem that the customer has and doesn't want, fascinate, which is the solution that they want that they can't find. And now that you've captivated and fascinated them, you now have the time to educate them, and that education should be about the problem, a little bit more detail on how you go about solving that problem, and then finally the offer, which needs to be so compelling that the customer client prospect can't say no. And so we will go into more detail as to what makes up a compelling offer next time. But Chucky, I really appreciate your I appreciate your patients dealing with the technical difficulties today.

34:03 Oh no worries. Now, Look I got rewarded for that patience to be honest with you with this great sort of insights that you shared, right, I mean, Michael, look, I mean let's continue to have more technical difficulties, especially if I walk away with like eight pieces of insight, right that is fascinating, like I would get into that kind of a transaction. You know, it's funny, and I know we'll wrap up here in a minute, so it's really interesting. I mean, one of the things that maybe business owners didn't appreciate listen to this is when you listen to Powerful Business Strategies radio show, you may learn how to be a poet right where you can rhyme your wards in the best way. Right. You could use words like captivate, and fascinate and educate and it all flows right Michael. That's right, you got it. I never thought of it that way.

34:47 That's great. Look as a recap. Two takeaways for me from today's episode. One, just a reconnection Michael with your career store, very very inspiring. And then two the concept of the conversion equation and the conversion formula. So thank you. In the next episode, I look forward's going a little bit deeper on some questions related to that. Sound good, excellent case. And one other thing I want to mention, so if you get a copy of the book Powerful Business Strategies, you can simply go to our website www dot NEXTSTEPCFO dot net. It's totally complimentary and until next Monday at noon Eastern time for Chucky Obio. My name is Michael Barbarita, and remember, don't keep doing what your competition is doing.

35:36 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