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Feb. 23, 2026

Two KPIs that can drive scale

Show Notes
Transcript

Two KPI’s that can drive scale – There are two KPI’s that can really drive your business and it’s ability to scale. By the way, Shark Tank investors always ask about these two KPI’s.

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You have done to censure Wow for you young.

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This is the pipe Man here on the Avengers pipe

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Man W four c Y Radio. We are in the

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Positively pipe Man Powerful Business Strategy segment with our amazing

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resident expert on business Michael Barbarita. Next step CFO and

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I have one question for you right now, Michael, what

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is it that Shark Tank investors always ask about.

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There's two there's two questions that they always ask about,

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and it's something that we business owners should always have

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available and understand what it is, and that is the

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cost to acquire a customer and what is the long

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term value of customer. So when I was in the

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frozen cookie dough business, one of the reasons that helped

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me get into more doors and to generate more business

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was the fact that I solved the problem that customers had,

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and that was they didn't want to waste valuable oven

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space baking cookies. They wanted this cookies fits and add

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on sale because they were suggestive selling, as we talked

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about a few weeks back, but they didn't want to

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waste valuable oven space baking cookies. For example, if there

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are pizza pola, they wanted a big pizza. But what happened.

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So the way I solved that problem was to give

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a free convection of it out with every purchase, every

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initial order, and my initial order only averaged fifty dollars,

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and the cost of a convection of it was two hundred.

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But because I understood both the cost to acquire that

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customer and the long term value of the customer, it

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was an easy decision. Because the long term value of

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a customer was five thousand dollars, the cost to acquire

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that customer was about two hundred to two hundred and

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fifty dollars, and of course the additional cost to make

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once they placed an order was two hundred dollars. But

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in the long run, and I made out great because

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I believed in my product. You know, if you don't

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believe in your product, you could calculate long term value,

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you could calculate customer acquisition costs, it doesn't really matter.

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You're not going to go anywhere. You've got to believe

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in your product. And because I believed in my product,

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if I knew once they had it, once they tried it,

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once they started selling it, it would sell and they

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would be pleased with it. And that's exactly what happened

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and so by. But if I didn't understand the long

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term value of a customer, I probably wouldn't do it

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because and I probably wouldn't solve that critical problem that

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my customer had, and as a result, I wouldn't have

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done that. I wouldn't have gone into the additional doors

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that I got into, including international business that I was

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able to get because of that program. So it's understanding

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the cost to acquire and the long term value of

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a customer is really critical in making business decisions that

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are going to pay off in the long run. Because

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if I ask ten ten business owners today, would you

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exchange would you give a customer two hundred dollars in

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exchange for fifty And I think that that answer would

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and I know the answer is a resounding no. No

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way without understanding the long term value of a customer,

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without understanding the cost to acquire a customer. And these

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are questions that shock tank investors in all investors, if

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you are looking for money, ask that you have to

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answer because because once an investor knows understands your profit margin,

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the long term value of a customer, the cost to

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acquire a customer, it's just a machine. After that you're

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willing to throw money at that. That's poor gasoline on

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the business and having an explode because it's like it's

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like a slot machine. All you're doing is putting money

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in and you're getting a return, money in getting a return,

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money in getting a return. So it is still, in

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my view, two of the most valuable metrics to understand

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for a business owner, especially if they're thinking about scaling.

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Yeah, well, and why do businesses not look at those

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so highly?

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Well, first of all, I think lots of a lot

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of them don't understand it. I think if you look

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at the early episodes of Shock Tank, you'll get people fumbling,

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bumbling and stumbling when they got that question. Yeah, because

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they did they didn't know the answer. Now they're more

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equipped because they've they've heard people bumble and bumbling and stumbling,

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and they figure they better, they better know that answer

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going in. But also it's not that easy to calculate

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and at least for most business owners, and so that's

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one of the services we provide for sure. But I

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think that I think I think the main reason is

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is they don't understand it. Uh, and they don't Uh,

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they never think of it. It's just something they don't

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think of. But it helps making decisions incredible, incredibly because

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if you understand, if you believe in your product and

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make and understand the long term value of a customer,

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you'll do a lot of creative things to get customers.

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Yeah, totally. And I also think too that one of

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the reasons business owners need somebody like you and and

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next step CFO is because they don't really think of

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a lot of those things because they're basically going on

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the fly, you know, and that's like driving somewhere without as.

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Yeah, so business owners need what I call strategic time. Uh.

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They're they're too ensconced in the day to day and

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they need at least an hour a week to talk

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about strategically how they're going to build their business, how

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they're going to solve any operational problems or business problems

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that they have strategically and you know it. The other

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thing that it does is that that weekly call with

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a business owner. Uh. We have saboteurs and I call

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them organizational terrorists. They're normally family and friends who always

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are questioning what you're doing and having that time to

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not only talk strategically, but to speak to somebody in

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a supportive environment is very helpful the counter those people

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who are always questioning what you're doing. Yeah, yeah, so

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there's a there's there's a there's a couple of good

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reasons why, and you're you're absolutely right. Business owners are

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ensconced in the day to day. They have no time

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for strategic work. So if they can set aside an

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hour and by the way, we tell you how to

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make up that hour, how to we tell you how

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to find that hour. We actually tell you how to

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find more than an hour, so that you could free

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up your time to do strategic things and work on

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the business instead of been.

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In That's really helpful because I've been trying for years

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to figure out how to do a forty eight hour

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day and it hasn't been working.

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I'm sure it hasn't. Yeah, and a lot of business

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owners are stuck in that trap. And there's uh, with

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the proper management, they can get out of that trap very,

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very easily. It's just, you know, most of the time

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with any of this stuff, Dean, I can't tell you

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it's just a few little tweaks. Yeah, it's not blowing up.

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We're not blowing up the business. Yeah, okay, it's just

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a few little tweaks, that's all it takes most of

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the time.

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I'm glad you brought that up, because most people they

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get overwhelmed and that's why they do nothing. I know,

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and they get the paralysis of the analysis is what

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I call it.

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And like when they hear shows like this too, it's

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the summation of all the information can get can get

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overwhelming for them. And I can just tell you that

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the sessions that we have are just small tweaks, small

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little little changes. We're not blowing up the business, because

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that's what they think. They think, Oh, in order for

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me to implement all this stuff, I have to blow

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up the business and change everything. No, it's just little

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tweaks over time, and they compound on each other for profitability.

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Yeah, and it's not changing the business, it's just adding

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to it, right, you know.

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You know what we talked about a couple of these

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weeks ago. Simply asking right, asking for another order of

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another type of another product of service at the time

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that you sold the original product of service. That's a tweak. Yeah,

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that's that's not blowing up the business. That's a tweak.

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That's an exam perfect example.

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There you go.

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Yeah, that's a perfect example of how we how we

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help business owners and and and what they can get

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out of.

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It, and where can we get more information and more

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tweaks and more advice on how to implement those tweaks.

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Well, a lot of the tweaks come from our book interviews.

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Uh and uh we love doing book interviews because, first

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of all, it helps us add more content to our

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book called Powerful Business Strategies, which you can get at

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NeXTSTEP CFO dot net freer charge. And by the way,

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you don't even have to leave an email address. It's

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our contribution to the business world. So uh, that's number one.

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But you could also go to NeXTSTEP CFO dot net

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towards slash contact, fill out the contact form and in

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the message section, just put the words Book in of

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You and I will send your calendar link to schedule it.

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And basically the way the Book in of You works,

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it's sixty minutes on zoom. I present strategies from my

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book and then I ask a simple question. I ask

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if a business owner in your industry would to implement

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the strategy that I presented, what would the impact be

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and then I document it for the book. That's it.

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And the value that the business owner gets is they

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learned business strategies that their competition isn't doing.

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And that's key. I think that's the core of success,

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right there is implementing strategies that your competitors are not doing.

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That's how you stand out above the crowd.

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Right and there are several by the way, because business owners,

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there's plenty of business owners that don't want to implement

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these strategies. And once again.

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Just small tweaks, well, Michael tweak Away, everybody's going to

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reach out to you guys to get some tweaks and

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get some hepp and man again some more. This was

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really really useful information. I hope people reach out to

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you because you know what, this year, we need everybody

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to be successful and I think that can happen with you.

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Michael Barbarita from Next Step CFO, thank you for all

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your powerful business strategies and thanks once again for being

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on the Positively Pipe main segment of the Adventures of

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Pipe Man.

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Thank you for having to do. Thank you for listening

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to the Adventures of Pipe Man on w for CUI Radio.