Feb. 4, 2025

The Art of Strategic Decision Making: How to Thrive When Everyone Else is Just Surviving

The Art of Strategic Decision Making: How to Thrive When Everyone Else is Just Surviving

In this episode, we'll explore how business owners can make better strategic decisions in uncertain times by focusing on three key areas: financial clarity, market positioning, and operational excellence. We'll reveal counterintuitive approaches that...

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Season 1

In this episode, we'll explore how business owners can make better strategic decisions in uncertain times by focusing on three key areas: financial clarity, market positioning, and operational excellence. We'll reveal counterintuitive approaches that turn conventional business wisdom on its head.

Powerful Business Strategies is broadcast live Mondays at 12 Noon ET Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Powerful Business Strategies is viewed on Talk 4 TV (www.talk4tv.com).

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WEBVTT

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The topics and opinions expressed in the following show are

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solely those of the hosts and their guests and not

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those of W FOURCY Radio. It's employees are affiliates. We

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make no recommendations or endorsements for radio show programs, services,

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or products mentioned on air or on our web. No

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liability explicitor implies shall be extended to W FOURCY Radio

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or its employees are affiliates. Any questions or comments should

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be directed to those show hosts. Thank you for choosing

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W FOURCY Radio.

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Welcome to Powerful Business Strategies, where you will find out

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that everything you have ever learned about growing your business

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is wrong. Finally, a show where you'll learn the right

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way to grow your business by learning business and financial

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strategies that your competition isn't doing. And now here's your host.

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Resident of Next Step CFO Michael Barbarita, and joining Michael

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for today's show as an executive moderator is Chooky Obia.

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We'll welcome everyone. Welcome to Powerful Business Strategies and the

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reason why you don't hear the energized, super energize and

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excited voice of Choky Obio. Welcoming you all to the show.

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Is because he just has some very exciting news. His

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wife and Chokey welcome their first baby into the world,

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Chelsea adeis Obo. So Chukey will be on leave for

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a while dealing with the UH and it's their first child,

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as I said, so he'll be dealing with his first

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experience with parenthood. So in the meantime, my name is

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Michael Barberrida, President of Next Step CFO, and next Step

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CFO is a fractional CFO and strategic implementation firm. Business

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owners hire us to double and triple their profit through

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implementing business and financial strategies that their competition isn't doing.

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Our vision is to ensure overwhelmed business owners achieve the time, freedom,

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and consistent profits to build a legacy and the life

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they desire. Our mission is dedicated to guys eating small

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business owners to leveraging their time, exploding their profits, and

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building a meaningful legacy. The show Powerful Business Strategies and

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our book of the same name is a step toward

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accomplishing that vision and mission. And so with that, I

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like to hand it. I'm not going to hit it.

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I'm going to hand it back to myself. I'm just

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so used to saying that so as of disclaimer, Chucky

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usually says that Chucky and I have both affiliated with

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a number of different organizations, and Chucky currently serves as

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the managing director of business development for Better Price, a

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global business focused law firm, And in addition to that,

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Chucky and I collaborate to moderate business roundtables around the

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country and around the world as a matter of fact,

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and document those insights as part of our book Powerful

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Business Strategies. But please note that the views expressed on

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this show are our personal views based on our own

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successful experiences. So here's something that I'd like to share

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that I announced have announced before. If you have a

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business problem that you would like us to answer, or

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business question or a strategy that you'd like to ask about,

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please email us at ask at next STEPDFO dot net.

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That's ask at next STEPCFO dot net. Doesn't matter what

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the business problem is or what the question. What the

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question is and we'll answer it for you. But there

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are a couple things that we do ask Number one,

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you have to state whether it's something we can answer

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on the air or if it's something we deal through email,

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that it's confidential. And of course if it's confidential, we

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will not put it on the air. And second, please

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provide your phone number because business problems can be complex

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and we might need a little bit more context or clarity.

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That email address again is ask at NEXTSTEPCFO dot dot net.

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Let's ask at next step CFO dot net. And I

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want to point out too that we already had a

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couple but they requested confidentiality, which of course will always honor.

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So for our inspirational minute today, business owners, I see you.

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I see your determination, your drive, and yes, your doubts.

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You waked up every morning carrying the weight of responsibility

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for your employees, your customers, and your family. But here's

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what I want you to know. The very uncertainty that

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keeps you up at night, that's your greatest opportunity. Today

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we're going to show you how to transform those challenges

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into your competitive advantage, because when everyone else is trying

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to survive, you're going to learn how to thrive. And

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so before I get to my first segment, there is

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one thing we never said before, and it's why Chucky

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and I wrote the book called Powerful Business Strategies and

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why we have a radio show as well of the

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same name and the reason is it's always Bob at

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us that many business owners struggle. So we determined that

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we wanted to give the business owner the same unfair

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advantage that the big boys have. In other words, the

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bigger companies have more resources to be able to implement

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business strategies. We wanted to write a book and have

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a radio show for the business that doesn't have those resources.

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Because you don't have to build, or you don't have

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to have a bigger hammer. You just need a shopper nail,

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and we wanted to give the small business owner that

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shopper nail. You know, this morning, I was meeting with

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a business owner who said something that really struck me.

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He said, Michael, I feel like I'm playing darts blindfolded.

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I'm making decisions that I have no idea if I'm

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even aiming at the right target. And that's exactly why

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we're doing our show on the art of strategic decision

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making to thrive when everyone else is just surviving. Because,

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let's be honest, the business world right now feels like

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it's in constant chaos. Interest rates a high cost keep rising.

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God only knows what the impact of the latest tariffs

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will be and finding good employees feels like searching for

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a needle in a haystack sometimes. But here's what fascinates me.

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In the exact same market conditions, some businesses are absolutely

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crushing it while others are barely hanging on. And it's

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not about luck. It's not about who has the most capital.

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It's about who's making better strategic decisions. You're already getting

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a question, So this topic seems to have struck a

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chord as I already have a question here. You've worked,

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I've worked. The question says that I've worked with hundreds

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of businesses to a next step CFO. So it's asking

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me what's the biggest difference you see between those who

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are thriving and those who are just surviving. Well, the

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difference comes down to three critical areas, and you're got

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to you gotta, you gotta deep deep, do a deep dive.

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We're gonna do a deep dive into each one today.

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And first we'll look at financial clarity, because you can't

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make decisions if you're flying blind. Then we'll explore market

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positioning because competing on prices a race to the bottom.

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And finally we'll tackle operational excellence but not in the

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way that most people think about it. You know, in

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the past, I worked with a construction company that was

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losing two hundred and fifty thousand dollars a year. They

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were making decisions based on gut feel and following what

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their competition was doing. But within one year of implementing

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the strategies like we'll be discussing today and we've been

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discussing on this show for the last six months, they

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turned that round to a fifty thousand dollar profit. That

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was a two hundred and fifty thousand dollars loss in

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one year, turning into a fifty thousand dollar profit. That's

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a three hundred thousand dollars swing. Not because they worked harder,

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but because they make better decisions and thought through things strategically.

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Now some of the listeners might be thinking, sure, but

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my industry is different. Well, that's exactly why we're going

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to break this down into universal principles that work across

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any industry, whether you're in retail, manu, factory, professional services

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of the trades. These decision making frameworks will change how

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you run your business. And the key is understanding that

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success leaves clues. When we look at businesses that are

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thriving right now, they're all making decisions differently than their competitors.

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They're not just choosing different actions, they're using a completely

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different decision making process. So let's die into the first

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critical area called financial clarity. Now. I know some of you,

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some of you might be thinking, here we go, another

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numbers guy talking about spreadsheets or some crazy thing numerically

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that I'm not going to understand. But stay with me,

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because this isn't about becoming an accountant. It's about having

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the information that you need to make confident decisions. Here's

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a statistic that from our research, eighty percent of business

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owners don't know they are vital five numbers. These are

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the numbers that should be burned in your memory that

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influence every major decision you make. Let me break that

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down for you. First, you need to know your sales, obviously,

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but not just the total. You need to know your

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sales trends. Are you up or down compared to the

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last year or compared to last month? What's driving those changes.

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Second number that you have to know is gross profit. Essentially,

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this is what's left you pay for direct materials and

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direct labor. I can't tell you how many businesses I've

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seen that are actually losing money on some of their

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products or services because they don't track this number. Third

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is your gross profit percentage. This tells you how much

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wiggle room you have and you're pricing. Without this number,

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you're just guessing as to whether or not you can

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afford to offer discounts or you need to raise prices,

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which is preferable by the way to discounting. Fourth is

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your net profit. This is what's actually going into your

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pocket after all expenses. But here's where most people get

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it wrong. They look at this number once a year

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when they do their taxes. That's like, you know, that's

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like trying to drive cross country by only checking your

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gas gauge once every thousand miles. It just doesn't work.

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The fifth number is your current cash balance, not what

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your accounting software shows, but what's actually in your bank

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account right now. Because profit is in cash, you can't

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pay bills with profit. So here's another question. Can you

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give us a real world example of how these numbers

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can change the decision making process. Well, let me tell

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you about a client in the manufacturing business. In twenty twenty.

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They were losing a half a million a year. They

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had plenty of sales, but they were making decisions without

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knowing their real numbers, and their margins were atrocious. But

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they didn't know that they were taking on orders that

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looked profitable on the surface, but were actually losing money

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when all costs were factored in. So we implemented a

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system to track these vital five numbers daily. Within two years,

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they were making one hundred thousand dollars profit per month.

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Think about that, from losing five hundred thousand a year

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to making one point two million annually. Same market, same competition,

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same employees. The only thing that change was a decision

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making process based on the vital five. But here's the key.

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You don't need complicated systems to do this. In fact,

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I'm going to show you a simple, one page dashboard

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that'll give you all five numbers in less than five

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minutes a day. Because the goal is to turn you

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into an accountant or to add a lot of work.

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It's to give you clarity you need to make better

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strategic business decisions. So let me show you how this works.

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Take out a piece of paper, and of course, if

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you're driving right now, you can listen to this recording.

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At Powerful Business strategies dot com. So take out a

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piece of paper and draw five boxes. In the first box,

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write today's sales number. In the second box, write your

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gross profit from your last completed month. In the third box,

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calculate your gross profit percentage. Just divide gross profit by

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sales in the last completed month. In the fourth box,

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put your net profit you to date, and in the

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fifth box, write your current bank balance as of today.

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Now imagine making decisions with these numbers at your fingertips.

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When an opportunity comes up, you'll know if you can

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afford to pursue it. When a competitor tries to undercut

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your prices, you'll know if you need to respond or

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let them have that unprofitable business. When an employee as

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ask for a raise, you'll know where you stand. Here's

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a question that's coming in. What if someone's numbers aren't

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good Both that's just create more stress. Oh, it's a

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great question, But actually the opposite happens. The stress comes

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from not knowing your numbers. When you know your numbers,

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even if they're not what you want to be, you

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can stop making decisions to improve those numbers. It's like

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going to the doctor. You know, The diagnosis might not

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be what you want you know, what you want to hear,

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but at least now you could create a treatment plan.

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And here's what's really great. Once you have these numbers,

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you can stop playing what if scenarios. What if we

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raise prices five percent? What if we focused on more

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profitable product lines to sell. What if we stop doing

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business with our slowest paying customers. It's not just guesses anymore,

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that calculated decisions based on real math and real data.

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Let me share another powerful tool that transforms decision making

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once you have these five numbers. It's called the business

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and cash flow forecast. Now most business owners think forecasting

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is just guessing about the future, but that's not what

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I'm talking about. A proper business and cash flow forecast

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is Google Maps for your business. If you were driving

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from New York to Los Angeles, would you just stop

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driving west and hope for the best. I don't think so.

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You'd want to know the route, where you'll get a way,

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you'll need gas, where you might hit traffic, and how

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long it'll take. That's exactly what a business in cash

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flow forecast does for your business. Let me give you

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a really real example. I had a client in the

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retail business who was suffering from severe cash flow problems.

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They were constantly running out of money. The sales were good,

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but when we created their forecast, we discovered they were

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bringing in inventory way too early and in quantities that

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were too large. Within nine months of implementing the forecast,

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which had an inventory flow and payable schedule, they went

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from negative one hundred thousand in cash flow to positive

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one hundred thousand. And so here's a question of just

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getting from the audience from a listener. How can business

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owners forecast accurately when things are so uncertain? Well, that's

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the beauty of the system. A proper forecast isn static.

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It's organic, it's rolling. Every month. As actual results come in,

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you update the forecast. It's like having a GPS that

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recalculate your root as conditions change. This prevents those nasty

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surprises that keep business owners up at night. And let

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me share three specific ways that you can use this

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forecast to make better decisions. First, use it to test

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major decisions before you before you make them. You want

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to hire a new employee, put in the forecast. See

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the impact thinking about expanding to a new location. The

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forecast will show you exactly how much cash you'll need

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and when you'll need it. Second, use it to spot

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problems before they become a You know, one of my

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clients was considering a major expansion. The forecast showed that

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they'd run out of cash right when their slow season hits.

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What could be worse, But we adjusted the timing of

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the expansion, and instead of a crisis, they had a

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smooth transition into the expansion. Third, use it to seize

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opportunities faster than your competition. When you know your future

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cast position, you can move quickly when opportunities arise. I

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had a client who was able to buy out their

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biggest competitor because they knew exactly how much they could

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offer could afford to offer. Now, some of the listeners

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might be thinking it's too complex for their business. Well,

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actually it's quite the opposite. The real complexity comes from

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not having a forecast. That's when you're forced to make

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every decision in crisis mode and in uncertainty mode, when

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you're constantly surprised by cash shortages, and when you're missing

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out opportunities. That is when you need the forecast because

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you just simply can't move quick enough. Remember, your competition

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is probably flying blind. They're making decisions based on gut

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feel and hope. When you have your vital five numbers

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and a rolling business and casual forecast, you're making decisions

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based on financial clarity and confidence. That's how you start

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thriving when everyone else is surviving. So before I continue

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this discussion, we're going to take a ninety second break. Hey,

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their business owners, let me ask you something. Are you

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tired of blending in with your competitors, frustrated with slow

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growth and slim margins. Well, I've got news for you.

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Everything you've ever learned about growing your business is wrong.

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Don't worry. I'm here to let you in on a

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secret weapon, your position of market dominance. It's what sets

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you apart, makes you irreplaceable, and has customers lining up

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at your door. My name is Michael Barbarita from Next

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Step CFO. I know what you're thinking. Sounds great, Michael.

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How do I find my position of market dominance? Well,

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that's exactly why we've created our game changing impleventation program

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called Next Step to Market Dominance. In just ninety days,

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we'll guide you step by step to a position of

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market dominance by uncovering your unique strengths that competitors can't touch.

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By crafting a message that resonates deeply with your ideal customer.

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By building a strategy that turns you into the go

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to expert in your field. Now this is in theory.

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These are battle tested strategies that have helped businesses like

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you as double, triple, and quadruple their revenue. Don't let

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another quarter go by struggling to standout. It's time to

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dominate your market. Period. Go to NEXTSTEPCFO dot net, forward

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00:19:49.000 --> 00:19:52.400
slash contact. Fill out the form and in the message

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00:19:52.440 --> 00:19:56.480
section put the word dominate or call us at seven

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eighty one three two six three eight two two. Next

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00:20:00.440 --> 00:20:04.359
STEPCFO dot net, forward slash contact or call us at

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seven eighty one three two six three eight two two.

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Welcome back to powerful business strategies. So before the break,

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we talked about making decisions with financial clarity. Now let's

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tackle something that keeps too many business owners up at night,

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competing on price. Let me show you how to make

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strategic decisions that can take price completely out of the conversation.

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You see, most businesses are playing a game they can't win.

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They're trying to be better than their competition. But here's

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the counterintuitor, counter intuitive truth. The don't want to be better,

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you want to be different. Let me explain, and let

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me explain why. When you're trying to be better than

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your competition, you're playing their game by their rules. You're saying,

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look at me, I'm just like them, but a little better.

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And what happens. The only thing customers compare is price,

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and as we said so often, and as you know,

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that's a race to the bottom. Nobody wins. So instead,

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you need what we call a position of market dominance.

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And this is a carefully crafted message that makes you

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the only logical choice in your market. Let me give

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you a real example. A roofing company was struggling to

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stand out in a crowded market. Every roofer was saying

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the same things, great quality, best service, lowest prices. All

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those claims just became noise to customers. That's that, I hope,

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so marketing stuff that we talk about so often. But

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we discovered something interesting. The biggest fear customers had wasn't

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about quality or price. It was about contractors taking their

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insurance money and disappearing. That was the problem. And that

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was the problem that the industry had. What this company

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did in the roofing industry is they made a bold move.

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They created a position of market dominance that said, we

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won't take a cent of your insurance money until we

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deliver the materials to your roof. Think about how powerful

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that is. It completely changed the conversation from price to

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trust and that added value their business quadrupled. Why is

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that well because they weren't compeating on price anymore. They

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were solving the biggest fear, the biggest issue, and the

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biggest problem that the customer had with the roofing industry.

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And that is what a position of market dominance does.

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It addresses the most pressing issue customers have with your

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industry and offers a clear, compelling solution that they can't

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find anywhere else. A daycare center that was struggling to

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fill spots every day here in their area advertise the

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same things nurturing environment, educational curriculum, certified staff. All that

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sounded familiar. Well, instead of playing that game, this daycare

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created this position of Marcket dominance. Is your daycare's idea

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of good educational curriculum? Watching Barney on TV followed by

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how would you like your child to be reading at

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a first grade level before start in kindergarten. Now you

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know some listeners might be wondering if they got any pushback. Well,

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actually what they got was a waiting list. Because here's

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the thing about a true position of market dominance. It's

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not about being provocative for the sake of being provocative.

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It's about entering the conversation already happening in your prospect's mind.

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And that is two things. Let me give you that formula. First,

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you identify the most pressing issue or concern your prospects

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have with your industry, not with your company, with your industry.

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What frustrates them, what scans them? What problem do they

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have that they don't want. The roofing customer was scared

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that people would take their insurance money and run. So

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you have to identify that problem. There's ways to do that. Second,

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offer a clear and compelling solution to that particular issue,

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something they can't find elsewhere. And here's the key. You

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might need to innovate a little bit to create that solution.

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You might need to change a little bit how you

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do business, might need to change your operating basis, think

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about Progressive insurance. That completely changed the game when they

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started showing competitors' rates alongside their own. Why would they

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do that Well, because they understood that shopping for insurance

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was hassle and that people were worried they weren't getting

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the best deal. They turned that industry wide problem into

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their competitive advantage. We have a listener asking, but what

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if a business owner isn't sure what their customer's biggest

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concerns are? Well, that's a super question. Not By looking

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at your reviews, both yours and your competitors, your Google

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and Yelp reviews especially, look at the negative ones. They'll

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tell you exactly what frustrates customers in your industry. Talk

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to your frontline employees. They hear customer complaints every day,

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and most importantly, as your customers directly, not how are

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we doing? Not how we do? How are we doing?

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Uh huh? Not that, but what frustrates them the most

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about working with companies in your industry. Remember, you're not

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looking for surface level complaints. You're looking for the emotional

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hot buttons. A customer saying yours are too high often

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really means I don't see enough value to justify your prices.

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That's a positioning problem, not a pricing problem. Let me

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share another example of a position of market dominance in action.

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An accounting firm was struggling to attract and retain top talent.

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Every firm was offering the same things competitive salary benefits,

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growth opportunities. All that sound familiar, but when we dug deeper,

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we discovered that the biggest pain point for accountants wasn't

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about money. It was about work life balance, especially during

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tax season. So this firm made a bold move. Their

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position of market dominance became can't face the long hours

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and high stress of yet another tax season. At ACME

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Accounting work from home, get half day on Fridays, not

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only during tax season but all year long. So I

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am applying the same principle, the same position of bocket

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dominance principle that gets customer attraction to employee attraction. And

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here's why this is so powerful. It works in any

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situation where you need to stand out from the crowd.

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So let me stare. Let me share a three step

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process any business can use to develop a position of

415
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Marcket dominance. Step one, stop thinking about what you do

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and stop thinking about what your prospect is afraid of

417
00:27:38.200 --> 00:27:41.440
beer is a more, much more powerful motivative and desire.

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A homeowner isn't really buying a new roof, they're buying

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a peace of mind that their house won't leak and

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that the contractors won't take off with their money. A

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business isn't really buying accounting services. They're buying confidence that

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they won't have tax problems. Step two, Look for what

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00:27:59.839 --> 00:28:03.200
you everyone else in your industry is saying, and when

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and when, and then deliberating I'm sorry, Then deliberate, deliberately

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00:28:08.240 --> 00:28:11.920
say something different. I call this the well I hope so.

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Test if a prospect can respond to your marketing message

427
00:28:15.839 --> 00:28:19.680
with well, I would hope so, then you're saying something

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00:28:19.920 --> 00:28:24.759
too obvious, and if somebody else can say it, then

429
00:28:24.799 --> 00:28:28.799
it's not a position of market dominance. However, there are

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00:28:28.960 --> 00:28:34.079
certain situations where every everybody in the industry is doing

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00:28:34.119 --> 00:28:36.960
one particular thing, but you're bringing it to the front

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for the first time and solving a problem that they

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00:28:42.240 --> 00:28:47.519
didn't know a solution existed. Now, when a painting company

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00:28:47.559 --> 00:28:50.200
says we do quality work, the response is, well, I

435
00:28:50.200 --> 00:28:53.039
would hope so. But when they say, well, complete your

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00:28:53.119 --> 00:28:57.200
job on time, in on budget or it's free. That's

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something different. Three, test your position of market dominance with

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00:29:01.759 --> 00:29:05.680
this question who else can say what you say? Notice

439
00:29:05.680 --> 00:29:08.160
I didn't ask who else can do what you do?

440
00:29:08.880 --> 00:29:10.880
There might be others that can do what you do.

441
00:29:11.039 --> 00:29:14.079
But if they can't say what you say credibly, you

442
00:29:14.240 --> 00:29:18.559
found your position of market dominance. Oh, a listener is

443
00:29:18.599 --> 00:29:21.599
asking if I can give an example of how this test.

444
00:29:21.920 --> 00:29:25.640
Can I give an example of how this testing works. Well,

445
00:29:26.000 --> 00:29:30.440
let's use a real estate agent as an example. Most

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00:29:30.519 --> 00:29:33.839
agents say things like great service, a great experienced team

447
00:29:34.039 --> 00:29:38.720
knows the marketplace. Well, I hope, so, I mean everyone

448
00:29:38.759 --> 00:29:41.920
else can say that. But what if the agent said,

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00:29:42.200 --> 00:29:44.640
when you list your home with us, we'll funt you

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00:29:44.680 --> 00:29:47.119
the money to make the necessary updates to your home

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so it sells faster and for more money. That's different.

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Very few agents can say that credibly. And here's another

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00:29:56.880 --> 00:30:00.759
powerful aspect of a true position of market dominance. It

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can require you to innovate in how you do business.

455
00:30:04.920 --> 00:30:07.160
You might need to change your operating basis. You might

456
00:30:07.240 --> 00:30:13.680
need to do some fine refinancing or make some changes

457
00:30:13.720 --> 00:30:16.680
to your delivery model to support your position. But that's

458
00:30:16.720 --> 00:30:20.079
all good because it makes your position even harder for

459
00:30:20.160 --> 00:30:23.759
your competitors to copy. And let me give you one

460
00:30:23.759 --> 00:30:29.359
more example that really drives his home. A residential cleaning

461
00:30:29.400 --> 00:30:36.359
service that was competing in a crowded market. Every company

462
00:30:36.519 --> 00:30:39.519
in that industry, or at least in that region, was

463
00:30:39.559 --> 00:30:45.200
claiming to be the best, most thorough, most trustworthy. Instead

464
00:30:45.240 --> 00:30:50.920
of playing that game, they developed this position. Will clean

465
00:30:50.960 --> 00:30:55.720
your home exactly the way you want it and exactly

466
00:30:55.759 --> 00:30:59.680
the way you want it cleaned, using your favorite products

467
00:31:00.440 --> 00:31:04.359
and following your instructions, or you don't pay a dime.

468
00:31:06.039 --> 00:31:09.200
Did that require a change in their operation? You bet

469
00:31:09.200 --> 00:31:13.960
it did. You bet they had to create detailed customer

470
00:31:14.160 --> 00:31:19.319
preference sheets, train their staff differently, and change their supply management.

471
00:31:19.359 --> 00:31:23.319
But here's what happened. Their customer retention rate went from

472
00:31:23.519 --> 00:31:27.839
sixty percent to ninety five percent and their average customer

473
00:31:27.920 --> 00:31:33.119
lifetime value tripled. Why because they weren't just making claims.

474
00:31:33.519 --> 00:31:38.000
They were solving the real problem customers had with cleaning services,

475
00:31:38.400 --> 00:31:42.880
the frustration of having to explain their preferences over and

476
00:31:43.079 --> 00:31:48.599
over to different cleaners. So before I continue this discussion,

477
00:31:48.839 --> 00:31:52.200
we're going to take a ninety second break. Hey, their

478
00:31:52.240 --> 00:31:54.920
business owners, let me ask you something. Are you tied

479
00:31:54.960 --> 00:31:58.839
of blending in with your competitors, frustrated with slow growth

480
00:31:58.880 --> 00:32:02.640
and slim margins. Well, I've got news for you. Everything

481
00:32:02.680 --> 00:32:07.279
you've ever learned about growing your business is wrong. Don't worry.

482
00:32:07.759 --> 00:32:09.680
I'm here to let you in on a secret weapon,

483
00:32:10.119 --> 00:32:13.680
your position of market dominance. It's what sets you apart,

484
00:32:13.799 --> 00:32:17.599
makes you irreplaceable, and has customers lining up at your door.

485
00:32:18.599 --> 00:32:22.240
My name is Michael Babarrita from Next Step CFO. I

486
00:32:22.359 --> 00:32:25.559
know what you're thinking. Sounds great, Michael, How do I

487
00:32:25.640 --> 00:32:29.400
find my position of market dominance? Well, that's exactly why

488
00:32:29.440 --> 00:32:33.359
we've created our game changing implementation program called Next Step

489
00:32:33.400 --> 00:32:36.640
to Market Dominance. In just ninety days, we'll guide you

490
00:32:36.680 --> 00:32:39.440
step by step to a position of market dominance by

491
00:32:39.519 --> 00:32:43.480
uncovering your unique strengths that competitors can't touch. By crafting

492
00:32:43.480 --> 00:32:46.880
a message that resonates deeply with your ideal customer, by

493
00:32:46.920 --> 00:32:49.480
building a strategy that turns you into the go to

494
00:32:49.680 --> 00:32:53.240
expert in your field. Now this is in theory. These

495
00:32:53.279 --> 00:32:56.119
are battle tested strategies that have helped businesses like you

496
00:32:56.200 --> 00:33:00.839
as double, triple, and quadruple their revenue. Don't let another

497
00:33:00.920 --> 00:33:04.240
quarter go by struggling to standout. It's time to dominate

498
00:33:04.319 --> 00:33:09.920
your market. Period. Go to NEXTSTEPCFO dot net forward slash contact.

499
00:33:10.440 --> 00:33:13.240
Fill out the form and in the message section put

500
00:33:13.279 --> 00:33:17.000
the word dominate or call us at seven eight one

501
00:33:17.400 --> 00:33:21.279
three two six three A two two. That's next STEPCFO

502
00:33:21.400 --> 00:33:24.759
dot net forward slash contact or call us at seven

503
00:33:24.799 --> 00:33:29.359
eight one three two six three A two two. Welcome

504
00:33:29.400 --> 00:33:32.799
back to powerful business strategies. So hit our final major

505
00:33:32.839 --> 00:33:38.599
segment today. Let's talk about operational excellence. But I want

506
00:33:38.640 --> 00:33:41.119
to warn you this isn't going to be the usual

507
00:33:41.160 --> 00:33:45.319
conversation about efficiency and systems. Instead, we're going to talk

508
00:33:45.359 --> 00:33:49.839
about making strategic decisions about your operations that improves your

509
00:33:50.039 --> 00:33:54.920
entire business. So let me start out with a controversial statement.

510
00:33:56.200 --> 00:34:01.440
Most business owners are efficient at doing the wrong things.

511
00:34:02.720 --> 00:34:05.839
They've gotten really good at activities that don't actually move

512
00:34:05.880 --> 00:34:10.039
the needle. They're like as a hamster, getting really efficient

513
00:34:10.039 --> 00:34:12.960
at running in there on their hamster wheel. Lots of motion,

514
00:34:13.800 --> 00:34:19.199
no progress. So here's a framework we can use, and

515
00:34:19.480 --> 00:34:21.639
we've used it with our clients. We call it the

516
00:34:21.679 --> 00:34:25.920
four questions framework for operational decisions. And before you implement

517
00:34:26.039 --> 00:34:29.360
any new system or before you try to make any

518
00:34:29.480 --> 00:34:36.039
process more efficient or recur any expense, ask these four questions.

519
00:34:36.119 --> 00:34:45.760
Number one, does this process or expense or new system.

520
00:34:46.119 --> 00:34:50.360
Does this help acquire a new customer? Does this help

521
00:34:50.559 --> 00:34:56.559
retain a current customer? Does this help increase the lifetime

522
00:34:56.639 --> 00:35:00.760
value of a customer? And does this help deliver the

523
00:35:00.840 --> 00:35:06.880
product or service to the customer. If the answer is

524
00:35:07.039 --> 00:35:09.239
no to all four of those questions, you need to

525
00:35:09.519 --> 00:35:13.760
seriously question why you're doing it at all. So every

526
00:35:14.079 --> 00:35:20.159
step of a process, any new system that you're going

527
00:35:20.239 --> 00:35:24.760
to or you're thinking of implementing, or any time you

528
00:35:24.840 --> 00:35:28.480
incur an expense or even the expenses that you have,

529
00:35:28.719 --> 00:35:32.239
now ask these four questions. If you get a yes

530
00:35:32.360 --> 00:35:35.199
to one of them, then then you keep it or

531
00:35:35.239 --> 00:35:38.079
you go ahead and implement. But if you get a

532
00:35:38.159 --> 00:35:41.480
no to all four, you need to seriously question why

533
00:35:41.480 --> 00:35:46.800
you're doing it at all. So here's an example. There

534
00:35:46.840 --> 00:35:49.679
was a client in the manufacturing business who was spending

535
00:35:49.880 --> 00:35:55.199
hours every week generating detailed reports that nobody read. And

536
00:35:55.400 --> 00:35:59.000
when we applied the four questions, we realized these reports

537
00:35:59.039 --> 00:36:04.360
didn't help acquire customers, they didn't help retain customers, they

538
00:36:04.400 --> 00:36:07.480
didn't increase customer value or improve delivery. They were just

539
00:36:07.519 --> 00:36:13.920
a habit. We eliminated those reports and redirected that time

540
00:36:14.559 --> 00:36:17.519
the customer follow up calls, and within three months, customer

541
00:36:17.559 --> 00:36:22.760
attention rates increased by fifteen percent. Same resources, same resources,

542
00:36:22.960 --> 00:36:27.960
just applied to activities that actually matter for those resources,

543
00:36:28.039 --> 00:36:31.880
which just applied to activities that matter. But here's where

544
00:36:31.920 --> 00:36:35.119
it gets really powerful. Once you have this framework, you

545
00:36:35.119 --> 00:36:39.880
could stop making strategic decisions about automation and systems. Most

546
00:36:39.880 --> 00:36:43.199
businesses automate the wrong things. They invest in in expensive

547
00:36:43.199 --> 00:36:49.440
systems to make ineffective processes more efficient. Instead, use the

548
00:36:49.480 --> 00:36:53.119
four question framework to decide what to automate. Let me

549
00:36:53.119 --> 00:36:55.920
give you an example. So a plumbing company that was

550
00:36:55.960 --> 00:37:02.480
spending hours manually scheduling appointments. Did this activity help with

551
00:37:02.599 --> 00:37:07.119
the four areas? Yes? It was. It was critical for delivery,

552
00:37:07.159 --> 00:37:11.079
So they invested in automation there fringing up their staff

553
00:37:11.480 --> 00:37:16.519
to focus on customer follow up and retention. Now here's

554
00:37:16.519 --> 00:37:18.320
a question that I just got in from the audience.

555
00:37:18.360 --> 00:37:21.880
What about businesses that say they don't have time to

556
00:37:21.920 --> 00:37:26.639
evaluate all their processes this way, Well, that's exactly why

557
00:37:26.639 --> 00:37:29.079
they need to do it. Look, every business has the

558
00:37:29.119 --> 00:37:31.320
same twenty four hours in a day. The difference is

559
00:37:31.360 --> 00:37:35.880
how to strategically use that time, and there's four questions framework.

560
00:37:36.039 --> 00:37:40.960
Pretty simple. It's just a pretty simple exercise. So from

561
00:37:41.079 --> 00:37:44.039
one week, in fact every activity that takes more than

562
00:37:44.079 --> 00:37:47.079
thirty minutes, and at the end of the week, run

563
00:37:47.159 --> 00:37:51.199
each activity through that four question framework. I guarantee you'll

564
00:37:51.199 --> 00:37:54.039
find at least five hours of activities that don't serve

565
00:37:54.199 --> 00:37:59.280
any of these four purposes. Now imagine reinvesting those five

566
00:37:59.320 --> 00:38:05.719
hoursvities that directly impact customer acquisition, customer retention, customer value,

567
00:38:06.119 --> 00:38:08.519
or the delivery of the product of service. That's twenty

568
00:38:08.679 --> 00:38:12.960
hours a month of high impact activity that you just discovered.

569
00:38:14.000 --> 00:38:16.239
But let me be clear, this isn't about working harder,

570
00:38:16.679 --> 00:38:22.239
It's about working strategically. One business owner reduced their working

571
00:38:22.280 --> 00:38:25.159
hours from seventy to fifty per week while increasing their

572
00:38:25.199 --> 00:38:30.519
profit by forty percent how by making strategic decisions about

573
00:38:30.559 --> 00:38:36.639
way to focus their operational efforts. So let me expand

574
00:38:36.679 --> 00:38:40.039
on our discussion of operational excellence by sharing what I

575
00:38:40.159 --> 00:38:43.519
call the profit acceleration framework. This is where we take

576
00:38:43.559 --> 00:38:48.239
the four questions, the four questions framework and turn it

577
00:38:48.280 --> 00:38:52.119
into a systematic approach for growing your business. Think of

578
00:38:52.119 --> 00:38:56.679
your business like a car's engine. You can have the

579
00:38:56.719 --> 00:38:59.480
best engine in the world, but if the timing is

580
00:38:59.599 --> 00:39:02.079
off by just a little bit, you're not going to

581
00:39:02.159 --> 00:39:05.480
get the performance you want. Same is true in business.

582
00:39:05.880 --> 00:39:13.079
Having great individual components isn't enough. The timing and sequence

583
00:39:13.119 --> 00:39:17.360
of your operations matter enormously. Let me share a case

584
00:39:17.400 --> 00:39:22.079
study that illustrates that I worked with a manufacturing company

585
00:39:22.079 --> 00:39:24.199
that was doing two million in sales when we started.

586
00:39:24.239 --> 00:39:28.199
They had good products, good people, good customers. They were stuck.

587
00:39:29.079 --> 00:39:32.880
Every time they tried to grow, they ran into operational

588
00:39:32.920 --> 00:39:38.000
bottlenecks that killed their profitability. So we applied this profit

589
00:39:38.039 --> 00:39:41.559
acceleration framework, which starts by mapping out five possible ways

590
00:39:41.559 --> 00:39:48.039
to grow more leads, more conversions, more transactions, higher transaction value,

591
00:39:48.079 --> 00:39:50.440
and lower costs. And by the way, those are the

592
00:39:50.559 --> 00:39:53.360
five steps of the seven step Pathway to Profit formula

593
00:39:53.440 --> 00:39:55.920
that we have in our book. But here's the key.

594
00:39:56.679 --> 00:39:58.960
We don't try to do them all at once. We

595
00:39:59.079 --> 00:40:02.159
use data to determine which lever will give us the

596
00:40:02.239 --> 00:40:08.320
biggest return with the least operational strain. So here's a question.

597
00:40:08.400 --> 00:40:11.519
Here's a question from a listener. How do we determine

598
00:40:11.519 --> 00:40:15.559
which level to pull for us great great question. We

599
00:40:15.679 --> 00:40:19.480
use what I call the impact versus effort matrix. For

600
00:40:19.559 --> 00:40:24.599
each potential improvement, we score two things, the potential impact

601
00:40:24.639 --> 00:40:29.639
on profit and the effort required to implement. But and

602
00:40:29.679 --> 00:40:32.920
this is crucial, we don't just look at the direct effort.

603
00:40:32.960 --> 00:40:36.039
We look at the operational ripple effects. So let me

604
00:40:36.039 --> 00:40:40.320
give you an example of that. A manufacturing company was

605
00:40:40.400 --> 00:40:44.639
considering two initiatives, increasing their marketing spend to get more

606
00:40:44.719 --> 00:40:49.639
leads or improving their production efficiency to increase margins. Both

607
00:40:49.679 --> 00:40:52.760
had similar impacts on profit, about about two hundred thousand

608
00:40:52.800 --> 00:40:56.440
annually on a projected basis. But when we mapped out

609
00:40:56.440 --> 00:41:02.159
the operational ripple effects, we discovered something really interesting. Increasing

610
00:41:02.280 --> 00:41:07.920
leads would require hiring more salespeople, which would require more

611
00:41:07.960 --> 00:41:11.719
admin support, which would require more office space. The ripples

612
00:41:11.800 --> 00:41:19.159
kept going. Meanwhile, improving production efficiency actually reduced strain on

613
00:41:19.280 --> 00:41:22.840
multiple departments. So they chose to focus on efficiency first.

614
00:41:23.239 --> 00:41:26.880
That doesn't mean they ignored the lead generation, but they

615
00:41:26.960 --> 00:41:31.360
chose to focus on efficiency first. And here's what happened.

616
00:41:31.400 --> 00:41:35.960
By focusing on efficiency first, they created capacity that made

617
00:41:36.039 --> 00:41:38.480
future growth much easier to handle and Within three years,

618
00:41:38.480 --> 00:41:41.039
they grew to eight million in sales and more importantly,

619
00:41:41.280 --> 00:41:45.599
their profit. Their net profit margin increased from five percent

620
00:41:46.320 --> 00:41:51.519
to fifteen percent. But let me share something really powerful

621
00:41:51.519 --> 00:41:56.880
about operational excellence that most people miss. It's not just

622
00:41:56.960 --> 00:42:02.400
about doing things right. It's doing things. I'm sorry, it's

623
00:42:02.400 --> 00:42:07.079
doing the right things in the right order. So here's

624
00:42:07.119 --> 00:42:11.199
a simple exercise every business owner should do. List every

625
00:42:11.559 --> 00:42:16.239
major activity in your business, and for each activity, ask

626
00:42:16.320 --> 00:42:21.639
three questions. What happens before this activity that affects it,

627
00:42:22.920 --> 00:42:26.960
What happens after this activity that affects that affects it.

628
00:42:28.199 --> 00:42:32.599
What would happen if we did this activity earlier or

629
00:42:32.800 --> 00:42:38.760
later in the process. So I had a client in

630
00:42:38.800 --> 00:42:42.239
the electrical industry, right in the electrical industry, to do

631
00:42:42.280 --> 00:42:46.559
this exercise. They discovered that they were ordering materials way

632
00:42:46.599 --> 00:42:50.199
too early, which was killing their cash flow, and doing

633
00:42:50.320 --> 00:42:55.159
quality checks way too late, which was causing expensive rework.

634
00:42:56.079 --> 00:42:59.719
So by simply reordering these activities without changing how they

635
00:42:59.760 --> 00:43:02.880
would done, they improved cash flow by one hundred thousand

636
00:43:02.960 --> 00:43:08.039
dollars and reduced rework by sixty percent. So before I

637
00:43:08.079 --> 00:43:10.760
continue this discussion, we're going to take another ninety second

638
00:43:10.800 --> 00:43:14.119
break Hey there, business owners, let me ask you something.

639
00:43:14.480 --> 00:43:18.079
Are you tied of blending in with your competitors, frustrated

640
00:43:18.119 --> 00:43:21.480
with slow growth and slim margins. Well, I've got news

641
00:43:21.480 --> 00:43:24.960
for you. Everything you've ever learned about growing your business

642
00:43:25.480 --> 00:43:28.880
is wrong. Don't worry. I'm here to let you in

643
00:43:28.920 --> 00:43:32.920
on a secret weapon, your position of market dominance. It's

644
00:43:32.960 --> 00:43:36.719
what sets you apart, makes you irreplaceable, and has customers

645
00:43:36.800 --> 00:43:40.159
lining up at your door. My name is Michael Babarta

646
00:43:40.199 --> 00:43:44.920
from Next Step CFO. I know what you're thinking. Sounds great, Michael,

647
00:43:45.320 --> 00:43:48.760
How do I find my position of market dominance? Well,

648
00:43:48.800 --> 00:43:52.440
that's exactly why we've created our game changing impleitation program

649
00:43:52.599 --> 00:43:56.320
called Next Step to Market Dominance in just ninety days.

650
00:43:56.320 --> 00:43:58.400
Well guide you, step by step to a position of

651
00:43:58.440 --> 00:44:02.239
market dominance by enco bring your unique strengths that competitors

652
00:44:02.239 --> 00:44:05.519
can't touch, by crafting a message that resonates deeply with

653
00:44:05.599 --> 00:44:08.840
your ideal customer, by building a strategy that turns you

654
00:44:08.920 --> 00:44:11.920
into the go to expert in your field. Now this

655
00:44:12.000 --> 00:44:15.239
is in theory. These are battle tested strategies that have

656
00:44:15.320 --> 00:44:19.280
helped businesses like yours double triple and quadruple their revenue.

657
00:44:20.320 --> 00:44:23.400
Don't let another quarter go by struggling to standout. It's

658
00:44:23.480 --> 00:44:28.559
time to dominate your market period. Go to NEXTSTEPCFO dot

659
00:44:28.639 --> 00:44:32.079
net forward slash contact. Fill out the form and in

660
00:44:32.159 --> 00:44:36.000
the message section put the word dominate or call us

661
00:44:36.239 --> 00:44:39.679
at seven eight one three two six three A two two.

662
00:44:40.199 --> 00:44:44.159
That's next STEPCFO dot net forward slash contact or call

663
00:44:44.239 --> 00:44:47.440
us at seven eight one three two six three A

664
00:44:47.559 --> 00:44:51.760
two two. Welcome back to powerful business strategies. So as

665
00:44:51.760 --> 00:44:55.159
we wrap up today's show, the Art of Strategic decision Making,

666
00:44:55.239 --> 00:44:59.000
let's bring together the three areas that we've covered. First,

667
00:45:00.079 --> 00:45:03.599
we talked about financial clarity, knowing your vital five numbers

668
00:45:03.639 --> 00:45:07.840
and using a business and cash flow forecast. Remember, you

669
00:45:07.960 --> 00:45:11.960
can't make good decisions if you're flying blind. Those numbers

670
00:45:12.039 --> 00:45:15.719
aren't just figures on a page. They're the feedback loop

671
00:45:16.280 --> 00:45:21.320
that tells you if your decisions are working. Second, we

672
00:45:21.400 --> 00:45:24.000
explore how to create a position of market dominant that

673
00:45:24.079 --> 00:45:27.440
takes price out of the conversation. Stop trying to be

674
00:45:27.440 --> 00:45:30.239
better than your competition. Be different in a way that

675
00:45:30.320 --> 00:45:33.280
matters to your customers. Find the problem that they have

676
00:45:33.400 --> 00:45:36.119
that they don't want, and offer the solution they want

677
00:45:36.960 --> 00:45:42.840
but can't find. Finally, we covered operational excellence through the

678
00:45:42.960 --> 00:45:47.440
four questions framework. Every activity in your business should either

679
00:45:47.440 --> 00:45:52.679
help acquire customers, retain customers, increase the value of a customer,

680
00:45:52.920 --> 00:45:56.039
or improved delivery to a customer. If it doesn't do

681
00:45:56.159 --> 00:45:59.519
one of these things, question it, Question why you're doing

682
00:45:59.559 --> 00:46:03.360
it at all. Here's a question from the audience. If

683
00:46:03.400 --> 00:46:06.199
I want to start implementing these strategies, what's the first

684
00:46:06.199 --> 00:46:09.559
step should that I should take? Well, you start with

685
00:46:09.639 --> 00:46:15.360
the vital five numbers today right after the show, write

686
00:46:15.360 --> 00:46:19.039
down your current sales, your gross profit, your gross profit percentage,

687
00:46:19.039 --> 00:46:23.239
your net profit, and your current cash balance. Even if

688
00:46:23.280 --> 00:46:26.760
some of these dumbest on perfect, just stop tracking them.

689
00:46:27.119 --> 00:46:31.400
This creates the foundation for better decision making. Remember, successive

690
00:46:31.480 --> 00:46:36.519
business isn't about having all the answers. It's about having

691
00:46:36.559 --> 00:46:41.840
a reliable process for making decisions. When you combine financial

692
00:46:41.840 --> 00:46:48.800
clarity with strong market positioning and focused operations, you create

693
00:46:48.800 --> 00:46:56.360
a business that just doesn't survive, it thrives, and it

694
00:46:56.519 --> 00:47:01.920
thrives because of the uncertainty. But to get a copy

695
00:47:01.920 --> 00:47:04.800
of the book Powerful Business Strategies, simply go to our

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website www dot NEXTSTEPCFO dot net it's totally complementary and

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until next Monday at noon eastan time for Chucky Obio.

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My name is Michael Barberita, and remember, don't keep doing

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what your competition is doing.

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You have been listening to powerful business strategies finding out

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that everything you ever learned about growing your business is wrong.

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Tune in next week and every week at noon Eastern

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time on W four CY Radio with your host Michael

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Barbarita of Next Step CFO and moderator Chugy Obio