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EP340 When Something Feels Off- How to Fix a Business Before It Breaks · Profit With A Plan

• 0:18
  Marcia Riner | Profit Booster®: Sometimes something feels off in your business, but you can't quite point to it. The revenue is there, the team is busy, but the margins are tight, and things feel heavier than they should. And growing isn't translating the way it should as well.
• 0:35
  Marcia Riner | Profit Booster®: That's not random. That's a signal.
• 0:38
  Marcia Riner | Profit Booster®: In this upcoming episode of Profit with a Plan, we're breaking down what's really happening inside a business that needs turnaround, and how to fix it before it costs you time, money, or momentum.
• 0:51
  Marcia Riner | Profit Booster®: We're talking about hidden gaps in operations, leadership, and structure that quietly drags performance down, and what it takes to reset your business so it runs cleaner, stronger, and more profitably.
• 1:04
  Marcia Riner | Profit Booster®: If your business feels harder than it should, then this conversation you don't want to miss.
• 1:12
  Marcia Riner | Profit Booster®: Hey entrepreneurs, are you working too hard for too little profit?
• 1:16
  Marcia Riner | Profit Booster®: Well, welcome to Profit with a Plan Podcast, where we help you scale smarter, increase profitability, and build a business that's worth more, whether you keep it or sell it.
• 1:25
  Marcia Riner | Profit Booster®: I'm Marcia Reiner, Business Growth Strategist and the Profit Booster behind Infinite Profit.
• 1:30
  Marcia Riner | Profit Booster®: I've helped countless entrepreneurs to turn their businesses into highly profitable and sale-ready assets, so they enjoy more income now, and a bigger payday later. So join me for practical strategies, expert insights, and proven steps to make your business more profitable, more valuable, and built to last.
• 1:49
  Marcia Riner | Profit Booster®: By the way, today's episode is sponsored by Infinite Profit, where we don't just talk profit, we deliver it.
• 1:55
  Marcia Riner | Profit Booster®: But before we dive in, I've got something special for you. If you're tired of flat revenue or marketing that just doesn't seem to pay off, the new Profit Booster Growth Map might be for you.
• 2:06
  Marcia Riner | Profit Booster®: In just a few minutes, it'll show you exactly how to bring in more qualified clients and plug those profit leaks that are eating away at your cash.
• 2:14
  Marcia Riner | Profit Booster®: Get it for free right now at ProfitBooster.biz forward slash growthmap, and start turning missed revenue into real money.
• 2:24
  Marcia Riner | Profit Booster®: Alright, let's jump into today's episode. Today's guest brings a perspective most founders don't get until things go sideways.
• 2:32
  Marcia Riner | Profit Booster®: Jay David has built a career stepping into businesses at their most critical moments, fixing broken operations, stabilizing performance, and leading company, and leading full company turnarounds.
• 2:46
  Marcia Riner | Profit Booster®: With a background that blends finance and operation, he doesn't just look at the numbers or the systems. He connects the two to rebuild how a company actually runs.
• 2:56
  Marcia Riner | Profit Booster®: Now, as the founder of Do Business Better, he works with founder-led companies to strengthen their growth model, elevate teams, and help the business evolve beyond founder as the center of everything.
• 3:10
  Marcia Riner | Profit Booster®: He focuses on simple but powerful, and take that business… and take a business that feels heavy, complex, or underperforming, and turns it into one that runs with clarity, accountability, and real profitability.
• 3:23
  Marcia Riner | Profit Booster®: Jay, welcome to Profit with a Plan Podcast. I'm so excited to have you here. And if I can get my mouth to work today, we'll be doing a whole lot better.
• 3:32
  Jay David: Thanks, Marcia. I think that was the best introduction I've ever had. Thank you very much.
• 3:36
  Marcia Riner | Profit Booster®: Thank my boyfriend, ChatGPT to help me, you know, fine-tune it and get it where, where I can speak it normally.
• 3:44
  Jay David: We all spend too much time with old ChatGPT, so…
• 3:47
  Marcia Riner | Profit Booster®: I know, I know, right? Okay, so, you know, the history tells us here, or your history tells us here, that, you know, you find turnarounds, but people don't often fall into a turnaround business. How did you get into this?
• 4:04
  Jay David: I've approached it going way back into 1988. I was in the restaurant business before I went to college, believe it or not, and I was handed a failing location in Chicago.
• 4:19
  Jay David: The service was not good, it was a dirty place, hadn't made money for years, and it was one of 28 locations.
• 4:29
  Jay David: I had a relation with the district manager, he begged me to come, and I went in, and we turned it around, and restored profitability, restored sales, cleaned it up.
• 4:41
  Jay David: And, and then, at some point during that journey, I realized I didn't want to work in the restaurant business forever. I went back to college and got my degree in accounting.
• 4:54
  Jay David: But that was my first experience with Turnaround.
• 4:58
  Jay David: And really, every enterprise I've entered since then.
• 5:02
  Jay David: has been failing in some form or fashion. And… I think it's a pretty common thing. That's enjoy. Yeah.
• 5:11
  Marcia Riner | Profit Booster®: You know, when you think about turnarounds, and turnarounds are happening at any phase of the business, but when something just doesn't feel right, and it's not working to their best, you come in and you fix it. And that's what a turnaround is, at least what I understand. Now, there's bigger turnaround companies, right, that'll come in when it's on its last breath.
• 5:33
  Marcia Riner | Profit Booster®: And fix it, or tear it to pieces and sell it out that way. But I think what we're talking about is just fixing the company so it runs better, right?
• 5:43
  Jay David: Yeah, like I mentioned in the restaurant, it was service and cleanliness, but I've been into businesses that can't manage their accounts receivable. They've got old money sitting out there, they can't figure out how to get it. Their payment terms to their vendors doesn't equal the payment terms from their customers.
• 6:02
  Marcia Riner | Profit Booster®: Mmm.
• 6:03
  Jay David: And a lot of things like that. So, you get in and you find kind of what the problem is. Usually, the outcome is cash flow, but it's the root cause of what's causing the cash flow.
• 6:15
  Jay David: that you go in and investigate. It's inventory, or it's cash collections, or any number of things. So, you always have to dig deep to really find the method you're gonna use to fix it.
• 6:28
  Marcia Riner | Profit Booster®: So, speaking of digging deep,
• 6:31
  Marcia Riner | Profit Booster®: How does… well, let's take a step back first. When do we start to think it's time for a turnaround? Is there any kind of blaring signal that comes out, or is it often something really soft that maybe we're not realizing?
• 6:48
  Jay David: Well, I'll tell you, it's too late if you've already missed a payroll. So, you don't wanna… you don't wanna wait too long, but when you start to have repeatable offenses, when you… when you continually ship late.
• 7:01
  Jay David: and one of your big customers is considering leaving. If you've got continuous safety issues in your plant, and, you know, early on you make excuses, well, you know, that was a one-off.
• 7:16
  Jay David: That shouldn't have happened, but then, all of a sudden, you have 3 or 4 that roll up in 6 months, it's time to react.
• 7:24
  Jay David: And the excuses are usually defense mechanisms for people not wanting to get in trouble. But when you really start to look at it, and if you have a good communication structure in the business.
• 7:39
  Jay David: somebody needs to step forward and say, okay, we need to stop. We've got to get back and address these. Customer leaving, a lot of times the salesperson says our prices are too high, without noting that we shipped late.
• 7:54
  Jay David: 50% of the time and cut half of their order. So, you know, again, the truth is usually hidden in a lot of small, individual transactions rather than one big event.
• 8:07
  Marcia Riner | Profit Booster®: Yeah, that makes… that makes total sense. And… and like you said, you know.
• 8:11
  Marcia Riner | Profit Booster®: There could be one-offs, yes, but when it starts to happen and you notice the domino effect, right, where clients start to leave, or situations become repetitive, then that's the time to really go, hey.
• 8:26
  Marcia Riner | Profit Booster®: Let's stop, let's take a look at what we're looking at. So now when we're looking.
• 8:31
  Marcia Riner | Profit Booster®: What do we tend to look for? What… where do we go digging first?
• 8:37
  Jay David: what I do when I enter a business like that, whether I've entered as an employee in leadership or as a consultant.
• 8:45
  Jay David: I do interviews with the owner, founder, and start to say, find out from them their perspective of what's going wrong. Then I go to the vice president and director level and hear their side.
• 8:58
  Jay David: I go to the supervisors, warehouse personnel, factory people, and then I kind of triangulate everything together. That, depending on the size of the business, that can be a full day, or it can be a full week.
• 9:12
  Jay David: Then I kind of bring it all together, and then I have that very difficult conversation with the owner-founder, and say, here's where you thought the issues were.
• 9:22
  Jay David: Everybody else seems to think they're coming from here. What I've been able to do is kind of boil it down into 3 or 4 things, and let's talk those through.
• 9:32
  Jay David: And it's a very sensitive conversation, because a lot of the times the founder, you know, he takes offense, or, you know, they say, well, they don't… how would they know what they're talking about? And, you know, perception is reality. If the employees perceive
• 9:48
  Jay David: That there's no safety programs, or that quality is not important, that's a fact.
• 9:55
  Jay David: You know, no matter what everybody else says. So that discussion leads to maybe a top 3 or 4 items that we can go after.
• 10:04
  Jay David: And I always propose the one low-hanging fruit, and it… it is something to shock the organization and wake it up, and it usually involves the hourly employees.
• 10:16
  Jay David: The vending machines in the cafeteria are terrible. The product in them is awful. The air conditioning in the factory hardly ever works.
• 10:26
  Jay David: So normally, that's one of the top 4 or 5 things I say, let's fix that today.
• 10:33
  Jay David: let's get that set, and then everybody sees, okay, change is coming, and then they're more receptive to it. So when you go out and ask them to do something hard.
• 10:43
  Jay David: they'll nod their head and say, okay, I'm on board, because I can see positive things happening.
• 10:50
  Marcia Riner | Profit Booster®: So that's great, and I love how you're using the factories as an example. This is the same thing can be told for services, or delivery of services, or tech, or SaaS, or anything along that. There's still always going to be that visual trail of problems that are causing them.
• 11:10
  Marcia Riner | Profit Booster®: But let me ask you a really honest question.
• 11:14
  Marcia Riner | Profit Booster®: Does the… when a company starts seeing problems, do they need to go out and hire a turnaround specialist immediately, or is there something they can look at themselves, maybe, that can start to…
• 11:26
  Marcia Riner | Profit Booster®: to… to do it. Now, I know, you know, they always have those rose-colored glasses, but can they try and do some things themselves first?
• 11:35
  Jay David: Yeah, absolutely. I mean, there's… you start to self-reflect, and you, you know, a lot of times, it's just…
• 11:43
  Jay David: The problems are known.
• 11:46
  Jay David: but they just aren't bubbled up to the top. So a lot of times, it's the CEO or whoever's in charge that they come forward and say, hey, guys, I… we are struggling.
• 11:57
  Jay David: And I know maybe I've been leading, and you guys have been following, I need help.
• 12:02
  Jay David: Let me know, and I'm now open to your… to hearing your ideas and your solutions. And I reference that a lot in my book, and it is about building a management team that can
• 12:19
  Jay David: productively argue in a conference room that every… every idea, every plan gets beat up and bruised a little bit before it's agreed upon. The term I use is creative abrasion.
• 12:34
  Jay David: somebody puts it out there. If everybody's nodding their head and it just passes through.
• 12:40
  Jay David: There's probably trouble on the way, but it's… when the door's closed, that management team should be able to push and ask questions and say, did you think about this?
• 12:52
  Jay David: And usually, the people in the building can come up with the problem as long as people are ready to listen, because everybody usually knows what the problems are.
• 13:03
  Marcia Riner | Profit Booster®: You know, we… we all know that problems are going to be constant in business, right? I mean, nothing's… nothing's easy, nothing's smooth, you know, there's always going to be a little bit of, friction, but is there a boiling point that we start to bring people into the room? I mean.
• 13:20
  Marcia Riner | Profit Booster®: ideally, we should be looking at the improvement of your systems and processes and everything. Ideally, I say that in quotation marks, because not everybody does it. But on a quarterly basis, at least, you should be having a review of your systems and processes. But let's say they don't.
• 13:39
  Marcia Riner | Profit Booster®: Do we have to wait for it to boil up for it to get there?
• 13:44
  Jay David: No, you know, I do a lot of writing of other topics, and the concept of budgeting and zero-based budgeting and all of that forces a deep dive on certain things. My problem with zero-based budgeting is it's usually all-encompassing, and everybody is scared, and they have to justify every paperclip, but to…
• 14:04
  Jay David: When you identify an area of opportunity to take a deep dive in there.
• 14:09
  Jay David: and break it down to its core, that is a healthy exercise. It shouldn't be an intimidation, it shouldn't be, the fear where people are gonna say, okay, they're gonna cut 10% of us and send us all home, today.
• 14:24
  Jay David: But it's a… it's an objective deep dive that says, why are we still doing this? I've found in the past, a lot of times.
• 14:33
  Jay David: hey, somebody's building a spreadsheet. I've been building this spreadsheet for 6 years, and I email it once a week.
• 14:40
  Jay David: Who's reading it?
• 14:41
  Marcia Riner | Profit Booster®: I don't know.
• 14:42
  Jay David: So, the direction that I give, and again, when I've been within companies and coming from the outside, is stop emailing it for a week, see what happens.
• 14:52
  Jay David: And you start to find that there's a lot of redundant work that used to get done, nobody knows why it's continuing, so that's why you do those drill downs. So, again, going back to accounts receivable.
• 15:04
  Jay David: what's the process that we are supposed to have? Where's the breakdown? And a lot of times, it's like, oh.
• 15:12
  Jay David: You know, Sally was our accounts receivable clerk. She used to be a really… a bulldog, and really got after things, and she left, and we were… we replaced her with somebody that wasn't experienced.
• 15:25
  Jay David: And, you know, so usually you get to root cause, and you can really figure out what the solution is much easier there.
• 15:32
  Marcia Riner | Profit Booster®: Yeah, this is… this is important. I think it takes that reflective, you know, viewpoint of what are we doing, and then, you know, associating or disconnecting the emotions of, this is my baby, right? And being able to objectively look at the business.
• 15:50
  Marcia Riner | Profit Booster®: And it sounds like, you know, when we're doing a turnaround, that's because it's gotten big, right? It's become a real… a significant problem instead of just a little thing, right?
• 16:01
  Marcia Riner | Profit Booster®: And to avoid those, it sounds like, and correct me if I'm wrong, that if we do these little checkpoints along the way, and we start to figure why things are breaking, or why things are not running as smoothly as they could, you could avoid this altogether, the turnaround.
• 16:18
  Jay David: Yeah, and my book is called Turn Around Revelations, but I write on every subject, from organization to the numbers to operations to sales, to everything, and I said, if you haven't understood it by the end of the book, the goal of this book is not to show you how to turn around your business, it's to give you all the right tools.
• 16:38
  Jay David: Proactively, to help you avoid the turnaround in the beginning.
• 16:43
  Jay David: So that's really what it's about, but if you need to turn around, here's the process I use on how to do it, and you can do it yourself, you don't have to call me, but, I attack a couple…
• 16:55
  Marcia Riner | Profit Booster®: It's better to have an experienced… Yeah, an experienced person that's there that can be objective and tell you the way it should, and really be able to go in at an arm's length, rather than, you know, being knee-deep into the problem, trying to dig your way out. So, I'm a fan of using outside people, but it's like.
• 17:15
  Marcia Riner | Profit Booster®: oftentimes, people won't jump to the outside person, they'll try and fix it themselves, right? And that's why I brought that point up earlier, is could they see those kind of points, from the beginning, at least earlier?
• 17:27
  Jay David: there's a huge value to the outside eyes. So, one client that I'm working with right now is a professional services firm.
• 17:34
  Jay David: And they're struggling with revenue.
• 17:37
  Jay David: And so, I'm going in from the outside and saying.
• 17:41
  Jay David: Okay, your basic product that you're selling is billable hours.
• 17:47
  Jay David: And your outcome is, you know, the product that those billable hours create.
• 17:54
  Jay David: And… but you're building all of these costs into your billable hours, such as the cost of your building. Very high-priced, principal, people in the… in the business.
• 18:05
  Jay David: And you're not competing anymore.
• 18:08
  Jay David: sitting at about 40% capacity. So, you know, a specific instance where they put out a bid, and they bid a million dollars, and it was awarded at $500,000. They weren't even close. So I said.
• 18:23
  Jay David: You know, turn it around and say, what is the market gonna bear for this project?
• 18:28
  Jay David: Go back and find out how much manpower you're gonna have to put into it, and then ask yourself the question, does this make sense right now? And in their current situation, they need revenue.
• 18:40
  Jay David: So, I've encouraged them to turn it backwards, and to do that, and to kind of ignore the concept of the billable hour right now.
• 18:49
  Jay David: Because their people are idle at some point, because they're only at 50% capacity, and they're paying them regardless.
• 18:58
  Marcia Riner | Profit Booster®: Mmm.
• 18:58
  Jay David: So, had you gotten that business for $500,000, that's revenue with no incremental cost.
• 19:05
  Jay David: And that's where the outside eyes come in, because they were stuck in that paradigm.
• 19:10
  Marcia Riner | Profit Booster®: Well, you know what, that's a really smart story, an example of where they're thinking… you have to think differently, right? You have to look at something, the bolts and screws and paper and people of the actual project.
• 19:28
  Marcia Riner | Profit Booster®: As well as the exterior of what's the competition going at.
• 19:32
  Marcia Riner | Profit Booster®: and the structure of how you're forming your bids. Instead of the original, when someone has a revenue problem, you and I both know the next answer is, make one more sale. Let's get on the phone, make more, sell more, sell more, and they're not looking at
• 19:48
  Marcia Riner | Profit Booster®: What they're selling and how they're pricing it.
• 19:51
  Marcia Riner | Profit Booster®: Versus go out and just sell more, right? Which is always the answer to revenue, or we need to market better, or we need a funnel, or we need a, you know, we need AI, or, you know, whatever it is.
• 20:04
  Jay David: Well, and that's a lot of what…
• 20:07
  Jay David: Yeah, and that's a lot of what I write about, too, because of my finance background and moving into operations. I… again, a chapter in my book is price does not equal cost plus desired margin. Price is already decided before you go out there.
• 20:24
  Jay David: In the business that you do, you have to be considering, competition. If I'm selling candy into the store, there's a price point that that candy has to be at. Doesn't matter what my cost structure is, that's the price.
• 20:39
  Jay David: So my job then is to say, can I compete at that price? So then I look at my costs, and then again, I'm an advocate of saying, don't include all of the fixed overhead costs, the cost of the building, insurance, depreciation. That's not part of your true decision-making cost.
• 20:58
  Jay David: Really, it gets into materials and labor, and that's really about it. Can you make money above that? Yes or no?
• 21:05
  Marcia Riner | Profit Booster®: So then, question for you. So when you're looking at profitability, and I've always been a fan of, yes, we have to factor the fixed operating costs into our cost of goods sold, right? You know, into the price that we're charging, but I know that you're switching it on a different level. You're saying, can we be competitive?
• 21:25
  Marcia Riner | Profit Booster®: Just based on what it costs us to put out this widget or service, and that you shouldn't factor in the cost of the building, but somewhere along the line, on the bottom line profitability, you still gotta factor in the cost of the building and insurance and all that other crap.
• 21:40
  Marcia Riner | Profit Booster®: Right?
• 21:40
  Jay David: Well, yeah, GAAP accounting, generally accepted accounting principles, mandates that you embed fixed overhead into product cost to get to cost of goods sold. Yes. So that's an accounting mechanism.
• 22:03
  Marcia Riner | Profit Booster®: Oop, we froze here a little bit. Let's see if we can bring Jay back in here and get things rolling along the way.
• 22:32
  Marcia Riner | Profit Booster®: Can you hear me now, Jay?
• 23:26
  Marcia Riner | Profit Booster®: So, Jay, you were talking about, the, the general accounting practices of having, you know, adding the… the clean operating costs into the, into the pricing of it. But, you know, I think that that's, that's, like you said, it affects the, the actual,
• 23:45
  Marcia Riner | Profit Booster®: competition or the ability to compete in the market with that, how do we work around that and make sure that we're still doing the accounting processes, but yet we're still managing where that cost is, so we can at least have that bottom line number that means I've still got money in my pocket at the end?
• 24:02
  Jay David: Yeah, so generally accepting accounting principles force the allocation of fixed cost into product cost in order to calculate cost of goods sold, so everybody's doing it the same way, and that gets you to net income and everything. But that fully loaded product cost
• 24:21
  Jay David: is not your incremental cost to make a decision to produce again. So, when you add in your building cost, and I'll go back to this professional services firm, they have a very expensive building.
• 24:34
  Jay David: They have chosen, very good benefits programs for their people. They pride themselves on the tenure of the people that do the work in the building.
• 24:45
  Jay David: But their clients don't necessarily want to pay for all that overhead. So the decision… the accounting says it's all in there, and then you come up to a net income number. But the decision is, you can still set your own price.
• 24:59
  Jay David: and the price is set to get the business, but then when you look at the risk of making that yes decision, you say, if I say no, I get no revenue, and I don't incur any costs.
• 25:14
  Jay David: If I say yes.
• 25:16
  Jay David: I get revenue, and then you ask yourself, what are the costs of saying yes? In their firm, it's $0 and zero cents, because they don't have to hire anybody. In the candy business, where I came from.
• 25:31
  Jay David: It's the cost of the candy, the cost of the packaging, it's freight cost and commission, because I'm not gonna have to hire any more people, I'm not gonna have to rent a new building, I'm not buying new equipment, so if I say yes, I know my incremental cost.
• 25:49
  Jay David: And I'm not saying that you sell it for a penny above that incremental cost, but if your margin is 50% above your truly incremental cost, go for it.
• 26:00
  Jay David: But that, if you look at it on fully loaded costs, the margin might be 5%.
• 26:05
  Marcia Riner | Profit Booster®: Hmm… Got it.
• 26:07
  Jay David: That's what usually happens, and that's like…
• 26:10
  Marcia Riner | Profit Booster®: You know, and that's something… that's a really good angle to look at, and when you're factoring in how competitive am I, and the value that I perform, right? You know, we can always go back and reanalyze what our operating costs are next go-around, right? When leases come due, or relationships, or contracts come due, you can look at how you're pricing them.
• 26:34
  Marcia Riner | Profit Booster®: You know, I'm also a huge fan of innovation, and how can we do this at a bigger, better, faster, stronger, cheaper, you know, leaner way of doing it, whatever the factor is that you're looking to do. And that's always really important, but I love the way that you said, hey, we gotta really look at competition, and can we land the deal, and if we could do the deal at that point.
• 26:58
  Marcia Riner | Profit Booster®: price.
• 26:59
  Marcia Riner | Profit Booster®: what is our profit on it, and how do we factor in the rest of the items to it? So it's… it's looking at it from a different viewpoint, instead of just the hard numbers, just the data. You know, it's… it's… it's saying.
• 27:14
  Marcia Riner | Profit Booster®: a $500,000, you know, sale is better than no sale. Of course, a million dollar sale is good, but that $500,000 sale takes some pressure off of us that allows us to do more things. And, that's valuable.
• 27:30
  Jay David: Well, and I think.
• 27:31
  Marcia Riner | Profit Booster®: in a unique way.
• 27:31
  Jay David: The term that I would use is, it's the cost of saying yes. If I say yes, what costs are gonna fall into my P&L?
• 27:40
  Jay David: It's… the accountants in GAAP will say, well, the cost of the building, the cost of the insurance, the… your lease, you know, everything there is… no, that's not the cost of saying yes. I've already paid for those, I've already made a decision on those. That decision I made should not penalize my ability to say yes
• 27:59
  Jay David: To the opportunity in front of me.
• 28:02
  Marcia Riner | Profit Booster®: And I think one more point on that, which makes perfect sense to me, if you find yourself 3, 4, 5 months down the road continuously having to say yes to the lower sale price.
• 28:16
  Marcia Riner | Profit Booster®: then that's when it's time to re-evaluate everything that it's costing you to operate your business, right? But if, again, if it's a one-off or a two-off.
• 28:26
  Jay David: Well, it comes…
• 28:27
  Marcia Riner | Profit Booster®: It's a choice of yes.
• 28:29
  Jay David: Yeah, it comes paired with when you have capacity, available capacity. So, in your business, if you're only spending 20 hours a week.
• 28:38
  Jay David: and the other 20 hours a week, you don't have anything to do, you've got capacity, so you can be more aggressive on pricing. Once you start to say, I'm working 7-hour days, 5 days a week, I'm getting close to capacity.
• 28:53
  Jay David: You go back to the old business model and say, here's the price. That's it. And again, that's the coaching I'm doing with the professional services firm. Today.
• 29:01
  Jay David: We price to the market, we don't care what our billable hour rates are. Once we get to 75%, then we look at the 5 best projects, and we start to say, okay, which 3 can we sneak in in the open capacity that we have, and how aggressive should we price them?
• 29:20
  Jay David: And they're already seeing the benefits of that approach.
• 29:25
  Marcia Riner | Profit Booster®: I can see it clearly as a bright, sunny day. I mean, it makes total sense to evaluate
• 29:32
  Marcia Riner | Profit Booster®: what your capacity is and the opportunity that you do that. And I think that's where…
• 29:37
  Marcia Riner | Profit Booster®: that's where someone with your experience can come in and say, look, I'm going to look at this business differently than maybe you would, right? Because, of course, you're following these instructions and those instructions, and we've done it this way all the way, right? We've always had billable hours, right?
• 29:53
  Marcia Riner | Profit Booster®: You know, so it's like, maybe it's time to do things differently. And I… I say this often,
• 29:59
  Marcia Riner | Profit Booster®: We're in this time of Amazon, right?
• 30:04
  Marcia Riner | Profit Booster®: our buyers want it on our doorstep, you know, yesterday, at a discount, right? And yet, we're still trying to sell billable hours, right? We have to evolve the way our buyers are used to buying, and I think this is an experience.
• 30:22
  Marcia Riner | Profit Booster®: Or a skill set that can take our business from being stuck in what we did and what we've always known to be true into a new model that could be financially beneficial to the company long-term and even short-term.
• 30:36
  Jay David: Yeah, I mean, everything starts, and again, I covered in the book, everything should start with a break-even analysis, even a business like yours. What are my fixed costs?
• 30:46
  Jay David: What are my variable costs of making those decisions? I have to travel, I have to do this, I have to print documents, I have to do something. With those two things, your variable margin and your total fixed cost structure, you get to your break-even. So, if you have a fixed cost structure of a million dollars.
• 31:05
  Jay David: I have, you know, the break-even analysis might say, if I sell $5 million, I make $0.0 cents. That's break-even. So now you know anything above the $5 million falls to the bottom line. But if you're only selling 4,
• 31:20
  Jay David: lock the doors and shut it down because you're not making money. So, the break-even analysis is a great place to start. Then you can start making those decisions. You either reduce your fixed costs.
• 31:32
  Jay David: To bring that break-even point closer, or you have to adjust your variable costs, but the easiest way is bring revenue.
• 31:41
  Jay David: Get to that break-even revenue point, and you'll be fine.
• 31:45
  Marcia Riner | Profit Booster®: Love it. Love it. This is really smart analysis, because it's not…
• 31:50
  Marcia Riner | Profit Booster®: We're not talking about companies that are doing really well right now. We're talking about companies that are having problems, right? We're talking about what you do to fix the problems that you have so you can continue to operate and move it from a red into a black.
• 32:09
  Marcia Riner | Profit Booster®: I mean, this is… that's why we're talking the hard numbers here, and… but in… in reality, though.
• 32:17
  Marcia Riner | Profit Booster®: I'm… I'm gonna take a step out there and say that every company has a little bit of this problem going on at all times, right? It's not just for the dying company that's ready to, you know, hang themselves. It's for every company, there's an opportunity for you to take this kind of analysis.
• 32:37
  Marcia Riner | Profit Booster®: And review what you're doing, and see if you can do it better, or see if you can fix something and improve it, and make it better, so that way you never get into a
• 32:48
  Marcia Riner | Profit Booster®: Dire Strait.
• 32:49
  Jay David: Yeah, I mean, one of the other things that I talk a lot about is the gap between operations and finance.
• 32:56
  Jay David: Operations people don't understand the accounting calendar, accruals, allocations, depreciation. It's a foreign language to them, just like finance doesn't understand when engineers are talking about OEE or, you know, PLCs and all this type of stuff.
• 33:13
  Jay David: So, one of my missions in life is, because I've got the dual background, is to begin… I'm building a… I call it, Do Business Better Academy, but for any of my clients, they're gonna have full access to this, and I'm building courses on operations finance.
• 33:31
  Jay David: How to bring up the skill set of a plant manager or a… an operations person on what absorption means, what allocations mean, the importance of the fiscal calendar.
• 33:45
  Jay David: Finance's month end might be on a Tuesday this month. You know, their month end is here. Why it all matters? So, when they're in the conference room together, they can engage.
• 33:57
  Jay David: Rather than, you know, I've seen a lot of finance people, I'm sorry, operations people walk out of a conference room saying, what was that all about? I had no idea what they talked about.
• 34:06
  Marcia Riner | Profit Booster®: It's a foreign language!
• 34:08
  Jay David: Yeah, so by bringing that up, and that's how I want to help founders to say, you know, they're told all the time, well, just develop your people and pull yourself out and let them make more decisions. I want to be the one that says, I've got the tools to help you do that.
• 34:24
  Jay David: So if you… if you teach your operations people the core fundamentals of operations finance, they can… they're on an equal footing.
• 34:33
  Jay David: And then they also understand the downside of GAAP accounting. The income statement, you don't learn a lot about your business from the income statement. It comes 12 days after the month.
• 34:45
  Jay David: It's looking backwards, and then everything's got an accrual, it's got timing issues, and all this stuff. So you need not necessarily a second set of books, but you need to understand how costs accumulate, how they react to activities.
• 35:01
  Jay David: and things like that, and then you'll start to understand your business. I like that. So, yeah, it's a…
• 35:08
  Jay David: It's a lot more than just, you know,
• 35:12
  Jay David: looking at, you know, I don't want to be mean, but a lot of people, you know, the owners will say, the CFO tells me everything, and, you know, and I live by that. Well, they're telling you the financial statements, they're telling you, you know, that, but the income statement, if you say, how…
• 35:30
  Jay David: How much was the income statement affected this month by our sales mixed differential from the budget that we wrote to what we actually made?
• 35:39
  Jay David: I don't know. I guess I could… I guess I could figure that out.
• 35:44
  Jay David: So…
• 35:45
  Marcia Riner | Profit Booster®: And I think, I think…
• 35:46
  Jay David: Challenge.
• 35:47
  Marcia Riner | Profit Booster®: That is a huge challenge, is understanding the accounting of the business and how it affects and trickles down everything. But I think when we're talking about this at a very deep level, which you're experienced at in the operations side as well as the financial side, but then again, talking to the business owner, and we're not saying business owners are dumb, but they maybe don't have that skill set in the depth and
• 36:11
  Marcia Riner | Profit Booster®: And… and levels that you have.
• 36:13
  Marcia Riner | Profit Booster®: When we're looking at this, they do rely on their team to give them the information that they're supposed to do, but at a certain level, that owner has to be able to know what are the
• 36:24
  Marcia Riner | Profit Booster®: top 5 things I need to look at in that statement, not, you know, rip apart it down to the whole piece on it. And that's where the valuable team members, whether they're internal or external, can really help
• 36:37
  Marcia Riner | Profit Booster®: help you make those decisions, and saving a company from potential disaster. I mean, the last thing we want to do… we built a company.
• 36:48
  Marcia Riner | Profit Booster®: We birthed our baby, we grew it up to a teenager, it's having its teenage problems, or it's, you know, midlife crisis, or whatever it is, and it's time to fix those, and we can only fix those when we know what the data says.
• 37:02
  Jay David: Yeah, and it gets into, again, educating everybody. Your head of sales should be the one that's talking about how the effect of product… the product mix that you sold impacted the business. But everybody tends to cross their arms and wait for the CFO to tell them.
• 37:20
  Jay David: And if you educate everybody about the finance side of their business.
• 37:24
  Jay David: it's gonna be a much better team approach, and rather than the owner having to ask, what are my challenges this month, if he's got that team that is well-versed in the finance side of the business.
• 37:38
  Jay David: and what… how their actions impact the P&L, that management meeting at the end of the month is going to be much more valuable, because they're… they're all telling him it's not just the CFO.
• 37:50
  Marcia Riner | Profit Booster®: I like that. It's kind of like they're running their own little company, right? So, they need to know their financial reporting on each department, right? So, that's good.
• 37:58
  Marcia Riner | Profit Booster®: I tell you this, we can go on a long time about this information, and, you know, yeah, it can be… it can be dry sometimes, but it's essential, right? Yes. And it's looking at those… those… those holes that are filling with water, and if you don't take that bucket and shovel them out, you're gonna… you're all gonna drown in it.
• 38:17
  Marcia Riner | Profit Booster®: So, I love the fact that we're looking at it from a different point, and each department has to have a financial pulse on what their department is doing to make everything work better on it. So, I really like it.
• 38:30
  Marcia Riner | Profit Booster®: But, knowing all that, and, knowing that there's… there's gonna be times, any time, in a company where this is an important time to review, where can listeners find out more about you and your, and your Build Better Business
• 38:48
  Marcia Riner | Profit Booster®: I choked on it, sorry.
• 38:50
  Jay David: Yeah, I can be reached at DoBusinessBetter.com, that's my website.
• 38:56
  Jay David: And on the website, I have what I call the Founders Journey. It's an assessment for business founders. Takes about 10 minutes, they ask a bunch of questions, and it gives them an evaluation of where their strengths and weaknesses lie.
• 39:10
  Jay David: on their journey, I define the journey as moving from a business that is mine, to ours, to theirs. And once it's… once it's to theirs, then they can start thinking about selling it.
• 39:23
  Jay David: Or transferring it to a family member. I do have a book, Turnaround Revelations, and anybody that is listening to this podcast, if you send an email.
• 39:35
  Jay David: to me, it's j.david at dobusinessBetter.com. I'll send you that link for the assessment. I also have my audiobook coming out. As soon as I figure out how to email an audio file that big, I will email you the audiobook for free also.
• 39:53
  Marcia Riner | Profit Booster®: I love it. I think I can help you with that one offline. So we'll get that one dialed in for you. Jay, this has been really, really good information, and remember, listeners, turnarounds don't have to be when the business is actually, you know.
• 40:07
  Marcia Riner | Profit Booster®: got one… one… the heartbeat is failing dramatically. It could be little phases along the way, and I'm a big proponent, and I know Jay is too, that fix these things before they turn into a mess, right? And so, I would definitely encourage you to get the book, learn about the gaps that you have in your business, and how you might be able to improve those today, and not wait until they're…
• 40:29
  Marcia Riner | Profit Booster®: You know, they're, they're, they're dying on it.
• 40:32
  Marcia Riner | Profit Booster®: So, this is… this is really great stuff. Alright, thanks for tuning in today. I hope you found some, valuable insights and actionable ideas that will help you make your business more profitable, and that's anytime we're gonna do this.
• 40:47
  Marcia Riner | Profit Booster®: So, so definitely go get, Jay's, book and information in his audit.
• 40:53
  Marcia Riner | Profit Booster®: And before you go, well, I'll remind you that if you're ready to bring in more of the right clients and keep more of the money that you earn, go grab my free Profit Booster Growth Map.
• 41:03
  Marcia Riner | Profit Booster®: It pinpoints the top 3 growth moves, to help you boost revenue and stop those profit leaks fast. You can get it anytime at profitbooster.biz forward slash growth map.
• 41:15
  Marcia Riner | Profit Booster®: And while you're at it, don't forget to subscribe to your favorite podcast channel. You don't want to miss future shows, and we're looking forward to more profitable strategies on next week's show. So until then, make your plans and profit with them. Thanks so much, Jay.
• 41:32
  Jay David: Thank you, Marcia.