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Best Of: How Great Leaders Make Better Decisions · Budget Your Business

0:00
SPEAKER_00: Welcome to the Budget Your Business Podcast, where small business owners go to learn how to financially plan for every aspect of their business.
0:07
SPEAKER_00: Let's get started with your host, Scott Geller.
0:10
Scott: Hello.
0:11
Scott: And thanks for listening to our 61st episode of Budget Your Business, where we're going to try something new in this one.
0:20
Scott: We pulled out specific clips from the first 60 episodes to create a bit of a best of episode that specifically discuss leadership and decision making for small business owners.
0:34
Scott: The clips are going to vary from a few frameworks that we think you can use in your business to how to find and include the right people in thinking about the future of your business.
0:48
Scott: And really, we've got some really good examples from business owners and former business owners to walk through exactly how they went through their planning and business decision making and their businesses.
1:01
Scott: Let's go ahead and jump right in with our first two sections.
1:04
Scott: The first is a framework that I've used with a lot of my clients, and the second is one from James Long, who remains our most listen to episode, sharing his decision making that could be applied within your organization.
1:19
Scott: Has anyone come across a similar situation in that?
1:23
Scott: I bet you probably have if you're a small business owner.
1:26
Scott: The either or leads to a downward spiral.
1:31
Scott: And honestly, it results in the worst of both worlds.
1:35
Scott: Let's say sales gets$150,000.
1:38
Scott: Well, then you have IT complaining that sales gets whatever thing they want.
1:43
Scott: They always get the funds.
1:45
Scott: And then sales gets mad, they're being handcuffed for generating new leads and blames that IT gets all the funding.
1:53
Scott: If if you pass the money, the$150,000 in this case over to IT.
1:59
Scott: I really don't like the either or.
2:58
Scott: You have to come up with solutions that allows an and slash both approach.
3:06
Scott: Let's walk through some questions that that frames this up a little bit.
3:10
Scott: If you if you're going through a but planning or budgeting process and you know that IT, let's say has this need, or two two competing groups or two competing people have have budget needs.
3:23
Scott: Well, when was the last time you had the decision-making representatives from both parties in the same room?
3:34
Scott: Where it it forces and or it really opens up the opportunity to discuss the needs with all the impacted parties.
3:45
Scott: You have to let them know that there is only so much funding to go around, right?
3:50
Scott: You need to be clear with them and up front that look, we don't have enough funding for everything.
3:55
Scott: But then you open the floor.
3:58
Scott: You open the floor to both parties to state their cases, and you leave the table open to multiple solutions.
4:07
Scott: Don't throw anything out.
4:09
Scott: Well, maybe some ridiculous things, but leave the table open.
4:14
Scott: Open it up to multiple solutions, and then discuss how each party has a viable argument.
4:21
Scott: Just admitting that both parties have a need is going to soften them a bit and get their buy-in for the optimal solution, which is what you need to do next, is talk about the solutions.
4:37
Scott: And talk about the solutions that can work for everyone and where everyone can benefit.
4:43
SPEAKER_06: My wife got off the phone and I was right next to her when she had that call with the ICU nurse.
4:49
SPEAKER_06: And you know, I think it was I think I made the joke, uh kind of made that the joke like the um I think it's an insurance commercial where it's the life comes at you fast.
4:59
SPEAKER_06: I just looked at her, you know, and I said, Well, life comes at us fast, you know, and gave her a big hug.
5:05
SPEAKER_06: And that's often what dealing with the downside of business is.
5:10
SPEAKER_06: And it's a whole lot easier if everyone in the small family business has had this conversation of what are we going to do under these bad scenarios?
5:18
SPEAKER_06: And then we can do them.
5:20
SPEAKER_06: Under what conditions are we gonna lay people off?
5:22
SPEAKER_06: Under what conditions are we gonna close a location?
5:24
SPEAKER_06: Under what decision, under what conditions are we gonna say this decision was bad and we're gonna back it up?
5:30
SPEAKER_06: Now, the the one thing I left out of all this decision, all this discussion of decision, I want to go ahead and throw it in here now, is I'm also a big fan of, I think it was Jeff Bezos who talked about permanent decisions versus reversible decisions.
5:44
SPEAKER_06: And one thing that's a little bit maddening is watching people make reversible decisions as if they're permanent.
5:51
SPEAKER_06: So these this is what we call analysis paralysis.
5:54
SPEAKER_06: You know, they just are analyzing a reversible decision as if the end of the world depends on it.
6:00
SPEAKER_06: Um if it's easily reversible, just go try something.
6:04
SPEAKER_06: And if it doesn't work, back up, try, you know, do something different.
6:07
SPEAKER_06: Like that may be a marketing campaign, that may be, you know, a new product on your menu, if you're a restaurant.
6:14
SPEAKER_06: Some these are all small and easily reversible.
6:16
SPEAKER_06: Don't waste, you know, don't waste a long time.
6:19
SPEAKER_06: Actually, you probably benefit, do lots of experiments.
6:21
SPEAKER_06: See how fast you can try these different things and learn.
6:24
SPEAKER_06: On the other hand, if a decision is permanent, like taking a business partner or getting married and taking a life partner, or um expanding a business into a new location or a new country, it's not impossible to reverse, but it's hard and it's expensive.
6:42
SPEAKER_06: Yes, it's and it's complicated.
6:45
SPEAKER_06: And for those, the level of analysis should be proportional to the difficulty in reversing decisions.
6:51
SPEAKER_06: If it's really hard to reverse, you should do a lot of extra research and make sure you really know uh what you're getting into.
7:00
SPEAKER_06: So a lot of times in business, uh, I talk about the permanent decisions versus the reversible, and and I think that's that was a Jeff Bezos uh item.
7:08
SPEAKER_06: So that's a that's a useful rubric as well.
7:10
SPEAKER_06: Uh to hopefully, you know, I'm talking about all this risk and uncertainty and bad things and people dying and businesses closing and all this.
7:18
SPEAKER_06: Yeah, but if it's not that kind of decision, don't uh spend mental calories as if it is.
7:25
SPEAKER_06: And a whole lot of decisions are.
7:28
Scott: Yeah, it is.
7:28
Scott: And I really like the one line you said there, James, uh the level of analysis, and I think what you mean is level time and and and what you put into it.
7:37
Scott: So that level of analysis should be in level with the the difficulty to reverse that decision.
7:43
SPEAKER_06: That's exactly right.
7:45
SPEAKER_06: Yeah, yeah.
7:45
SPEAKER_06: And you know, we think about we generally think about the level of like impact.
7:50
SPEAKER_06: Like how big of a decision, is it a big financial decision?
7:53
SPEAKER_06: Well, if it's a big financial decision, but it's also easily reversible, you know, and I'm not sure what that what that would be, but maybe it's taking a delivery of something that you could turn around and sell on the secondary market for 98% of the value.
8:08
SPEAKER_06: Might be a big decision financially, but it's also pretty reversible.
8:11
SPEAKER_06: You know, if you're buying raw inputs that you could then turn around and sell.
8:14
SPEAKER_06: I'm I'm struggling for examples here, but I'm trying to take the decision-making criteria.
8:20
SPEAKER_06: People tend to fixate on the number of zeros, right?
8:22
SPEAKER_06: If it's a big decision, meaning lots of dollars, I should fixate for a long time.
8:26
SPEAKER_06: And I'm like, eh, it's actually a little more nuanced than that.
8:28
SPEAKER_06: It that's a component, but also the reversibility is a very big component.
8:35
SPEAKER_06: Taking a partner in a business may not look, you know, the the cash cost of that at the time you do it may seem relatively small.
8:43
SPEAKER_06: What's it going to look like when your business is 4x what it is right now?
8:47
unknown: Right.
8:47
SPEAKER_06: How hard is it to get out of that partnership?
8:50
SPEAKER_06: Uh, what happens when that partner you take on gets a divorce and now your co-owned company is caught up in their divorce?
8:59
SPEAKER_06: Those are the type of difficult to reverse decisions that may not have a price tag on them that make that causes people to give them the level of scrutiny they deserve.
9:11
Scott: I agree.
9:12
Scott: I agree.
9:13
Scott: I can always learn something from James Long.
9:16
Scott: Next, we're gonna have Gus Irilla take a little bit different perspective where he's helping us make a decision about starting a franchise.
9:25
Scott: While they may not seem applicable to you, I think it can apply to similarly to starting a business or maybe the mindset of starting something new in your business.
9:37
Scott: After Gus, we're gonna have Brittany Toller take us through a bit of a standard EOS process where she describes the value of putting aside a dedicated time for decision making and planning.
9:51
SPEAKER_08: Yeah, I think the key word I would use, Scott, is predictability, right?
9:55
SPEAKER_08: And I'll use my own experience.
9:57
SPEAKER_08: Twenty-four years ago, I walked away from a corporate job making six figures, and my spouse wasn't working outside the home.
10:03
SPEAKER_08: I needed something that was pretty much a sure thing.
10:05
SPEAKER_08: You know, as long as I held up my end of the bargain.
10:08
SPEAKER_08: You know, and you probably know the stats on this, but you know, independent businesses, I think maybe less than 20% of them make it over five years.
10:16
SPEAKER_08: You know, it's sort of a high risk and you know, whatever kind of reward depending on how it hits, because you're having to figure it out as you go.
10:24
SPEAKER_08: It's not like is it a good idea or not, but it just takes a while to figure out the model.
10:29
SPEAKER_08: And a lot of people run out of stamina or money before they, you know, systematize their idea.
10:35
SPEAKER_08: With a franchise, you're buying the system already fully baked.
10:39
SPEAKER_08: So the roadmap is there.
10:41
SPEAKER_08: There's still a possibility it doesn't work if you don't follow the system, right?
10:45
SPEAKER_08: So part of what I try to do is help somebody figure out are you cut out to run your own business, franchise or otherwise, and you know, making sure they understand what their role needs to be to make that business successful, like the business owner's the catalyst.
10:58
SPEAKER_08: But I would dare say if you find the right franchise for you and you execute appropriately according to their plan, you have an extremely high probability of success and predictability in that if you've done your due diligence and spoken to other people in that franchise already, you should have a pretty good idea of how much you can reasonably make year one, year two, year three.
11:20
SPEAKER_08: If you're a top performer, how high is up and what does that trajectory look like?
11:24
SPEAKER_08: You can even speak to people that have struggled or not made it and find out what did they do or not do, you know, that you know, uh generated those results.
11:32
SPEAKER_08: So I think there's the predictability of it, right?
11:34
SPEAKER_08: If you're looking for more of a sure thing, you want your own business, but you want the predictability of a proven model.
11:41
SPEAKER_08: And then there's the force multiplier effect of, you know, if they're doing the marketing for you, uh, you're paying for it, but they they may be able to do it more efficiently at a corporate level, digital marketing, call center, operational support, helping you attract and retain the right people, uh, best practice sharing amongst franchise owners.
12:01
SPEAKER_08: You know, there's a lot of franchise can bring to bear.
12:04
SPEAKER_08: The only caveat I would say is you have to be willing to follow somebody else's proven system, which sounds obvious, but there are some people that just can't, you know, they're members.
12:13
SPEAKER_08: Like, you know, I would never dissuade anybody who really wants to go do their own thing.
12:16
SPEAKER_08: If, like, hey, you're prepared that it might not work and you're okay with that.
12:20
SPEAKER_08: You know, every franchise at some point started out somebody developing an independent business that evolved into a franchise that other people bought into.
12:30
SPEAKER_08: So I would never dissuade anybody.
12:32
SPEAKER_08: It really depends on what you're looking for.
12:34
SPEAKER_08: I just think there's a higher probability it can go off the rails with an independent business.
12:41
SPEAKER_08: And a franchise is a little bit more of a sure thing.
12:44
SPEAKER_08: So it just depends.
12:45
SPEAKER_08: A lot of my clients, if they're coming out of corporate America, they want that sure thing because, hey, I've got a replica, I've got a family to support.
12:52
SPEAKER_08: You know, I can't just bet it all on black.
12:55
SPEAKER_08: I need something with some predictability.
12:58
Scott: Right.
12:58
Scott: And that's a little different than than your traditional startup where, hey, I'm figuring this out, I'm I'm being creative.
13:06
Scott: Um on the far end of the entrepreneurship scale of everything's got to be kind of my way, or or figuring out this is this is more of, hey, can you follow directions and maybe and can you follow directions and and succeed with it?
13:24
SPEAKER_08: Yeah, and you can still be creative within a franchise.
13:26
SPEAKER_08: As you know, Scott, most of my business comes from referrals, which is different than a lot of my colleagues.
13:31
SPEAKER_08: So you can still be creative in the context of a franchise, but there's some core tenants that you have to adhere to, right, to maintain the integrity of the brand.
13:41
SPEAKER_08: So uh I think you you know, because that's one of the concerns I often hear from people.
13:45
SPEAKER_08: Well, if I go in a franchise, they're just gonna tell me what to do.
13:47
SPEAKER_08: And I said, no, they're gonna give you the roadmap.
13:50
SPEAKER_08: You still have degrees of freedom, but you know, if there's certain things that they say are sacrosanct, you pretty much want to adhere to that because they've tried all the other ways and they don't work, right?
13:59
SPEAKER_08: So if they can show you the most efficient way, you know, to make money and be successful, why do you want to reinvent that wheel?
14:05
SPEAKER_08: Be creative somewhere else in it.
14:07
SPEAKER_08: And then I've also worked with people to your point that it turned out really they were more the maverick, you know, and they were like, uh and I'm like, okay, then go do your own independent thing.
14:16
SPEAKER_08: That's fine, right?
14:17
SPEAKER_08: There's there's no right or wrong answer.
14:18
SPEAKER_08: It really just depends on the individual.
14:21
SPEAKER_01: The great part about my work is when I pull together with leaders, and and I understand how rare this is.
14:27
SPEAKER_01: We come together and we work together for a whole day on the business, right?
14:30
SPEAKER_01: Whether we're focusing on strategic changes that we need to make or how we're going to grow revenue more consistently or some version of that.
14:36
SPEAKER_01: And I just find leaders have so little time and space to just come and work on the business.
14:43
SPEAKER_01: They're often so engaged in the business and the day-to-day management and the putting out the fires.
14:48
SPEAKER_01: And so while my days can be very dynamic, the interesting part is just getting to pull together a team and dedicating six, seven, eight solid hours together on kind of deep work, right?
15:01
SPEAKER_01: It makes such a big impact.
15:06
Scott: I I see businesses that and it's hard to step away.
15:10
Scott: You you've got one demand after another, you're running the business, one problem after another, opportunity here, and opportunity there.
15:18
Scott: It's it's really hard to stop, to force yourself to stop, step back and think about the business and work on it.
15:25
Scott: It it's a common problem, and and I like how the the EOS kind of goes about that.
15:31
Scott: We're gonna move from decision making to examples from actual business owners and how they make their decisions.
15:39
Scott: And we've got some really good ones here.
15:41
Scott: First, we have Benny Bowman, then Patrick Butler, and finally Eric Ellington, share their processes and who each of them include in their decision-making process.
15:54
Scott: I think you'll find the next three clips really fascinating as around their processes.
16:03
SPEAKER_04: That's a great question.
16:04
SPEAKER_04: Um, I think that probably, but I've seen owners, you know, now that I work with a lot of different owners, there are some owners that keep all the financials close to their best, but there's others that want um employees to know what's going on because they feel like if they know what's going on, they're they're better prepared, good or bad, um, with whatever decisions that are going to be made.
16:29
SPEAKER_04: Um and so um I think uh I kind of got a little off track right there as far as um your questions.
16:39
Scott: Yes, so we're I was curious what you shared back with the employees.
16:44
SPEAKER_04: Yeah, so so for us, because we were eSOP, we shared everything.
16:48
SPEAKER_04: I mean, uh each each employee has a stake in it because it's an employee stock ownership program.
16:55
SPEAKER_04: Um so we disclose uh everything.
16:59
SPEAKER_04: We would have quarterly meetings with all the employees.
17:04
SPEAKER_04: Uh when we were small enough, we'd do it all in one group.
17:07
SPEAKER_04: And then uh when we got larger, we would break it into smaller groups, and but we would have the day that uh the VP of sales, the CFO, and the chief operating officer and myself would go from department to department and give a recap.
17:24
SPEAKER_04: Always interesting um to know that um the grapevine is one of the best communication tools in a business.
17:34
SPEAKER_04: Um and by that I mean if we were to have a meeting, the first meeting um with a department, by the week at the time we got to the last department, uh a lot of the information had already been text to those uh employees from the employees in the previous meetings.
17:56
SPEAKER_04: Um so and the reason I know that uh was that I would always like do a like we had a mission statement and I would get the employees to uh to say the mission statement or the quality statement, and they get a gift card.
18:14
SPEAKER_04: And so uh the first meeting, maybe no one knows the quality statement.
18:20
SPEAKER_04: Um and but by the last meeting, you can best believe they're collecting the the the um gift card because they've been texted by a friend in the other department and says, Go memorize the quality policy.
18:35
SPEAKER_04: And um so anyway, it's just uh it was a it was a great way to get the message out, but also just know that your employees talk.
18:45
SPEAKER_04: I guess that's my point.
18:47
SPEAKER_04: So if you tell one employee, odds are a lot, if not all, the employees are gonna eventually find out.
18:55
SPEAKER_04: So it's holding close to your best, I'm not saying is wrong.
18:59
SPEAKER_04: I'm just saying that for us, we shared everything and we were pr pretty successful in doing so.
19:07
Scott: I I agree with you, Benny, that you know, trying to keep secrets within a business is difficult.
19:13
Scott: You to your point, you tell one person and and you tell everybody, which can be a positive and a negative.
19:21
Scott: Now, you you mentioned a couple times we who all did you involve in the process?
19:26
SPEAKER_09: Well, that changed obviously as we grew.
19:28
SPEAKER_09: In the beginning, it was you know, me, uh me and whoever was in accounting, right?
19:33
SPEAKER_09: Generally, uh Nicole, you know, on our on our team, she was with us the whole time I was there.
19:36
SPEAKER_09: Um we had the company, and um, she and I would sit down and uh you know work for hours on it.
19:42
SPEAKER_09: Yeah, but as we grew and abroad in managers and professional managers and you know, folks wanted to get more and more involved, we would bring in department heads to do budgets.
19:52
SPEAKER_09: I will say one of the things we were working towards and never successfully accomplished was having individual PLs for each one of our managers, service owners, people who own those individual services would have loved to have had that, never did successfully do it.
20:06
SPEAKER_09: We were in the process of kind of redoing the chart of accounts and leveraging some of the tools and QuickBooks to do that at the end.
20:12
SPEAKER_09: Never finished.
20:12
SPEAKER_09: But yeah, it was you know, it was always a uh group process.
20:16
SPEAKER_09: I mean, I learned early on that uh you know doing budgeting in an ivory tower is a huge mistake, right?
20:22
SPEAKER_09: I mean, I make assumptions about the business, either I don't have the proper information, or you know, the folks on the team, um, you know, if I do it by myself, don't have the same buy-in um as they do if if they you know are involved in the process.
20:36
SPEAKER_09: So it's really important for a number of reasons, uh, in my opinion, to have kind of your leadership team involved.
20:42
Scott: Okay.
20:43
Scott: And it did that, so how much what did you share?
20:46
Scott: Because you know that that's always a big question and almost kind of a sticking point of yeah, I want to bring people in to as part of the budgeting process, but at the same time, I may or may not want them to know what the bottom line says or other aspects of financial parts of the business.
21:03
Scott: So how did you handle that?
21:05
SPEAKER_09: Um we were, I don't know if we've we were unique.
21:08
SPEAKER_09: Uh I think that's a philosophical strategic question, right?
21:12
SPEAKER_09: You have to fundamentally decide whether you trust your employees or not to do uh to have that information and you know to assume they're gonna use that for you know good have good intention with the information.
21:23
SPEAKER_09: We we chose to go that route.
21:25
SPEAKER_09: We actually were very, very close booked.
21:27
SPEAKER_09: Um, I would guess it was around 2011 when we uh all read The Great Game of Business.
21:34
SPEAKER_09: Um, I think it was Jack Stack, maybe somebody I think it was Jack Stack, but Great Game of Business was the book.
21:39
SPEAKER_09: And the idea is it's completely open kimono.
21:41
SPEAKER_09: Other than sharing individual salaries, everything is shared uh with the entire organization.
21:46
SPEAKER_09: Uh and actually you assign you know, kind of every line in the chart of accounts has an owner, uh, and it's not necessarily manager who has an owner, and um, they're responsible for making sure we hit the numbers uh for that specific.
22:00
SPEAKER_09: Specific uh, you know, so say it's a licensing line item or you know, a revenue line item or whatever, right?
22:06
SPEAKER_09: They own it and there were weekly we did we did this for a period of time, we ended up stopping this, but while we did it, I think there were weekly or monthly stand-ups where the whole company would participate, and the and the owners of the individual lines in the chart of accounts would get up and say, here's what the number was when I when we started the month, and here's where I think it's gonna end at the end of the month, and here's why, right?
22:26
SPEAKER_09: And so it gave gave them some accountability.
22:28
SPEAKER_09: Um, you know, roll forward a couple years, we stopped doing that.
22:32
SPEAKER_09: It was it was just hard to keep up with, honestly.
22:34
SPEAKER_09: But we never really lost the mentality around sharing pretty much everything with the employees.
22:40
SPEAKER_09: So, what did that mean?
22:41
SPEAKER_09: The managers had everything short of a salary.
22:44
SPEAKER_09: They could see the aggregate salary number.
22:45
SPEAKER_09: Everyone could see the aggregate salary number, actually.
22:48
SPEAKER_09: And the individual managers had the salaries of their individual team members, but they didn't have other folks as uh team members.
22:54
SPEAKER_09: And company stand-ups, we would share, we would generally roll up the information because it's hard to show uh in a large stand-up, you know, with a hundred people in a room, the financials.
23:02
SPEAKER_09: So we would roll it up, show some macro uh numbers.
23:05
SPEAKER_09: But I always told everyone if you want to see the specific numbers, let me know, and I'll you know open up the PL and show you.
23:10
SPEAKER_09: And I did on a regular basis, have people come in the room and want to understand the numbers, why something changed, what they did, you know, maybe, or what they could have done differently, maybe to impact the numbers.
23:19
SPEAKER_09: I found it really empowering.
23:20
SPEAKER_09: People liked it, they enjoyed it, they felt like they were part of the business, and um we had success doing it.
23:26
SPEAKER_09: So I'm a big advocate of that, you know, transparency with the books short of individual uh payroll.
23:31
Scott: I I love that, Patrick.
23:33
Scott: That that's a success story down that path.
23:35
Scott: It is.
23:36
Scott: You started off, it's a physical philosophical question, right?
23:39
Scott: So you I'm sure our listeners can already tell you've got a really good handle on your financials and and your profitability.
23:46
Scott: Is there anybody else, as as the owner and the founder, is there anyone else within the organization that you also pull in or kind of works with you on how you financially manage the business?
23:58
SPEAKER_05: Yeah, so I would say on a week in and week out basis, right, we have a leadership team that we talk a lot about financials and where we need to be, whether it's you know the construction division, maintenance division, enhancement division.
24:09
SPEAKER_05: I look at and manage a lot of that myself.
24:12
SPEAKER_05: If I'm thinking of something that's a little bit outside of the box or maybe unique in how we want to do things, I will pull in my accountant and bounce stuff off of him.
24:21
SPEAKER_05: And then, you know, there's I kind of call it my like business group, right?
24:27
SPEAKER_05: The people that I would go to for advice or just to make sure that what I'm thinking isn't sounding asinine.
24:36
SPEAKER_05: And just kind of work ideas off of.
24:39
SPEAKER_05: But if I had to pin it, it would be my accountant because he's he's in the books more of a routine basis, and and him and I have been really good friends since kind of day one, and he's he's been with me since day one, so he's got to talk a lot of sense into me uh sometimes.
24:56
Scott: That's good to have the rock there, right?
24:58
Scott: That's right.
24:59
SPEAKER_05: That's right.
25:00
Scott: So I I I am curious, and this is always something that really varies across owners, industries, you name it.
25:07
Scott: How much do you share, like the financial, how much do you choose to share with your leadership team?
25:13
SPEAKER_05: Yeah, I think number one, how long that that leadership team has been intact is very important if you, you know, we've had situations where we've had a couple people that have kind of moved in and out of that sort of room, right?
25:27
SPEAKER_05: Once you get your team to where you trust everyone and everyone's aligned on the thought process and you feel that the financial data is very important for them to understand so that they can do their jobs more successfully, is I think that's the time, right?
25:45
SPEAKER_05: I think it's, you know, when whether it's two people, one person or five, when you have those discussions that you know that that that information that you're giving them is not going to leave that room is when you've kind of hit it and when you can talk about it.
26:03
SPEAKER_05: And I have found too that it's very challenging for me to motivate my leadership team when it comes to financial data if they don't know what the data is.
26:14
Scott: Right.
26:15
SPEAKER_05: Um so you could be talking all these numbers and they may not have a clue of what you're talking about.
26:22
SPEAKER_05: I do a lot of year-over-year comparisons, month-to-month comparisons, and stuff like that.
26:26
SPEAKER_05: And we'll look at that as a leadership team and say, you know, hey, this is where we kind of were last July.
26:32
SPEAKER_05: This is where we are this July.
26:33
SPEAKER_05: Do y'all notice anything different?
26:35
SPEAKER_05: You know?
26:36
SPEAKER_05: And then that sort of tees up conversations on, okay, well, what do we do differently last July to where it was better than this July?
26:43
SPEAKER_05: And we we we kind of look at stuff like that.
26:46
SPEAKER_05: You know, some of the notes that I have kind of written down here, right, is is your revenue could be increasing.
26:52
SPEAKER_05: If your revenue is increasing by 10%, but your labor materials are up 20 to 25 percent, you've got a problem.
26:59
SPEAKER_05: You better hone in on that quickly and figure it out.
27:02
Scott: So that's called That's right.
27:04
SPEAKER_05: That's right.
27:05
SPEAKER_05: And that is, you know, knowing your numbers and watching them, people might say that I'm a little bit more obsessive over them than I probably should be.
27:14
SPEAKER_05: My accountant that tries to get me out of them every now and then.
27:17
SPEAKER_05: I'm like, man, this is this is how I keep a pulse.
27:20
SPEAKER_05: So let me keep my pulse.
27:21
SPEAKER_05: But knowing your numbers is is very, very critical.
27:24
SPEAKER_05: Yeah.
27:25
Scott: Yeah, and I like how you it sounds like you're kind of educating your team, not just throwing something out there and expecting them to understand it.
27:32
Scott: You're helping them helping educate them so they do understand.
27:36
Scott: And I imagine they, I'm sure they probably bring something back to you to help institute changes or different ways of doing things.
27:41
SPEAKER_05: And I it's, you know, these guys have been in the industry for longer than I have, right?
27:46
SPEAKER_05: So it's always a very interesting dynamic and and a back and forth because I'm trying to introduce new ways to think about stuff specific to our industry, and they're not used to that.
27:59
SPEAKER_05: But the challenges that the business owners, I would say as a whole, but specifically in my industry, have had to deal with in the last kind of five to six years, have really changed what guys like us are having to do to keep customers and to get new customers.
28:17
SPEAKER_05: And trying trying to get some of those guys that have been doing it for 25 to 30 years, right, is is hard.
28:24
SPEAKER_05: Slowly but surely.
28:26
SPEAKER_05: If I as long as I can kind of chip away at some thoughts, this is all I'm trying to do.
28:31
SPEAKER_05: Yeah, it is, it is.
28:33
SPEAKER_05: And but the things that are broken and the things that I've kind of watched and have seen from a financial side, you know, I may not have the best solution, but we're gonna talk about it.
28:43
SPEAKER_05: We're gonna identify this problem, uh, and we're gonna figure out a way to fix it as a group.
28:48
SPEAKER_05: And that's that's where the leadership team, I think, is very important.
28:51
SPEAKER_05: That way it's not just me making that decision.
28:54
Scott: Right.
28:55
Scott: Yeah, right.
28:56
Scott: The challenge of who to include in decision-making processes is an is an area that I see owners struggle with often.
29:03
Scott: The three owners we just heard from Benny, Patrick, and Eric provide really good examples of how and who they included in their business.
29:13
Scott: Now, Sam Anderson and Paige Cock provides their perspective about bringing in outsider resources for decision making.
29:21
SPEAKER_03: 1000%.
29:22
SPEAKER_03: I'm a big advocate of higher professionals.
29:25
SPEAKER_03: Like, I think we can all be great at two or three things.
29:27
SPEAKER_03: Everything else you're gonna suck at.
29:29
SPEAKER_03: Get somebody else to do it that's way better.
29:31
SPEAKER_03: Um, like when I found you, I didn't even realize fractional CFO was a thing because I just knew CFOs that work for companies that are making probably$200,000 in a book.
29:40
SPEAKER_03: I can't afford that, but I definitely need some help on the financial side with what we're doing because I'm a visionary guy.
29:44
SPEAKER_03: Like, I hate getting, and you've had to chase me around on so many things to just keep me in line.
29:48
SPEAKER_03: But like, I need it.
29:49
SPEAKER_03: Like, you know, a year ago I hired you gotta start cutting my grass.
29:53
SPEAKER_03: I I don't want to be outside in 95 degree weather on a Saturday when I could be spending time with my family or being out on the golf course.
30:00
SPEAKER_03: Like, my time's more valuable than that now.
30:02
SPEAKER_03: So I'm a big proponent of and Mark Cuban has said this a thousand times on this podcast, and it's or on uh chart tank, and it's forced me to look at myself inwardly and do some things, but like he refuses to do business with entrepreneurs that don't know their numbers.
30:16
SPEAKER_03: So you can't just automatically throw this stuff off on someone else.
30:19
SPEAKER_03: You shouldn't just automatically throw all this stuff.
30:22
SPEAKER_03: Like, the cool thing I like with how I built this company was there's not a person here that works for me that I wasn't doing their specific job at one point.
30:31
SPEAKER_03: I know everything it takes for their role.
30:34
SPEAKER_03: Um so if you hire a marketing firm and they say, hey, I'm gonna charge you seven grand a month and we're gonna do this, well, you don't know any better.
30:42
SPEAKER_03: If they're telling you it's gonna take four weeks to produce this video, well, you don't know any better because you haven't figured out any of this stuff on your own.
30:47
SPEAKER_03: Now, should everybody go out and be um editor or do Xbox?
30:50
SPEAKER_03: No, I'm not saying do that, but you should at least be able to take out your iPhone or your Android, take a stealthy video and say something about you, your business, or what you're doing that day.
30:59
SPEAKER_03: Um, but once the financial structure gets to a certain point and you recognize the fact that number one, the majority of people that probably hire some people that understand the value of social media marketing, they just despise it.
31:11
SPEAKER_03: They don't like doing it.
31:12
SPEAKER_03: Just like there are some entrepreneurs, like my favorite part of being an entrepreneur is the sales piece.
31:17
SPEAKER_03: I love selling to people.
31:18
SPEAKER_03: Like it's one of my literally one of my favorite things in the world to do.
31:24
SPEAKER_03: Um, but there's some entrepreneurs, man, they don't want to spend any time.
31:27
SPEAKER_03: Like some of my best business partners are guys that like to be on the spreadsheets.
31:30
SPEAKER_03: They don't want to be in front of clients, they just want to work behind the scenes.
31:33
SPEAKER_03: Um, so it's number one having the self-awareness to understand where your strengths and weaknesses lie.
31:38
SPEAKER_03: Um, but if the bank rolls there, like, you know, as soon as I can hire somebody to come in here and start cleaning the office and I had to stop scrubbing the toilets, yeah, you're only gonna charge me a hundred bucks every two weeks and you're gonna clean all this stuff for me?
31:49
SPEAKER_03: Yes, happily, take my money.
31:51
SPEAKER_03: Um, so just once you get to that point and you've had that moment of self-reflection and self-awareness and you recognize where your strengths and weaknesses are, um, the people who know know.
32:00
SPEAKER_03: Like, you know if you stuck at social media.
32:02
Scott: Right.
32:02
SPEAKER_03: You know it's also an important piece.
32:04
SPEAKER_03: So you can't just keep passing it off and hey, we'll get to this next month because while you're waiting next month, one of your competitors is getting started today.
32:13
SPEAKER_02: Yeah, I'm I'm excited to answer this question, to be honest with you.
32:17
SPEAKER_02: Um the the working with a coach or or um business consultant, the innovation on your team will greatly increase.
32:28
SPEAKER_02: The collaboration on your teams will greatly increase.
32:31
SPEAKER_02: Your leaders will be able to make decisions faster and better.
32:38
SPEAKER_02: Um, and I'm gonna pause on that for a second.
32:41
SPEAKER_02: There's a lot of times that people feel like they have to know every single inch of every piece of information before making a decision.
32:49
SPEAKER_02: And if they're not receiving the most accurate information, so back to processes, they're still gonna make a bad decision with bad data, right?
33:00
SPEAKER_02: Um, but knowing that they have engaged their team, that they've delegated appropriately, that the processes are in place and double-checked and all the things, they can rely on the information and therefore make better decisions.
33:15
SPEAKER_02: Those same leaders, now that they've empowered their teams, can look around corners faster.
33:21
SPEAKER_02: They can look at strategic things versus the day-to-day detail check-in-the-box things that sometimes leaders end up doing.
33:30
SPEAKER_02: Um, like, and I know nobody expected COVID to happen, but if you think about what happened to everybody at COVID, those companies with a solid foundation and a great culture and great leadership turned around 43% faster than companies without.
33:48
SPEAKER_02: So that's huge.
33:50
SPEAKER_02: When you have a really good foundational, solid processes, great leadership, great culture, things like COVID can, of course, it's going to impact your company, but it's not going to squash your company.
34:05
SPEAKER_02: The thing I'll add to that is, and this is this is another one of my favorite things to let people know when you build a good leadership team and everybody in the organization knows where they're headed.
34:17
SPEAKER_02: Employees find a sense of purpose within that organization because they feel part of the bigger of the bigger picture.
34:26
SPEAKER_02: They know why they're doing what they're doing, and they're they know that they're contributing.
34:30
SPEAKER_02: So that increases productivity.
34:33
SPEAKER_02: And when everybody's aligned, your customer feels it.
34:37
SPEAKER_02: And your customer is key.
34:39
SPEAKER_02: And that customer is going to refer you because of how they felt throughout the entire process.
34:45
SPEAKER_02: So, like Chick-fil-A is like a huge example of that.
34:49
SPEAKER_02: You know, when you go to Chick-fil-A, you're going to get the same service, you're going to have at my pleasure at the end.
34:55
SPEAKER_02: Like they've they've got it, they're all aligned and they know.
34:58
SPEAKER_02: So if you if you think about that, you know, the customer experience is felt throughout your organization, regardless of whether you're customer-facing.
35:09
Scott: Yeah, that's that's definitely Chick-fil-A's uh um recipe for success, sir, isn't it?
35:15
Scott: It's it's interesting.
35:16
Scott: I I actually watched the movie with my son founder about McDonald's founder, who technically didn't found it, but he took over the idea and swept the US.
35:25
Scott: And obviously, I I personally think McDonald's gone a little bit away from that.
35:29
Scott: But it's the same idea of giving something that's predictable.
35:34
SPEAKER_02: Yeah, I mean, think about Kodak as an example.
35:37
SPEAKER_02: It's a it's the other side of the example where, you know, uh in hindsight, everything's 2020, of course, but when you when you look back at a Kodak as an example, they didn't have a strong culture and they didn't have a strong leadership team.
35:52
SPEAKER_02: And when when you're not able to see what's coming, right?
35:56
SPEAKER_02: So they're if they're in the weeds and they're looking down all the time, they missed so many things, such that the company ended up being just patents, right?
36:06
SPEAKER_02: That was the value, was the patents that they that they held.
36:10
SPEAKER_02: They totally missed all the digital, you know.
36:12
SPEAKER_02: I mean, goodness knows, with AI, they'd they'd they'd be out in a boat somewhere, right?
36:19
SPEAKER_02: Um, and so it's the same thing.
36:21
SPEAKER_02: And so if you're not watching those things, and and I would even say uh companies should probably do a look, an evaluation, um, you know, every three to five years.
36:34
SPEAKER_02: And and if an organization hasn't looked at their culture and their leadership team since COVID, um, you want to look because as you know, everything changed during COVID.
36:44
SPEAKER_02: It's people's work expectations, whether it's remote or in person.
36:49
SPEAKER_02: The other dynamic that's like living and breathing right now is the difference in the four.
36:55
SPEAKER_02: So there's always been four generations in a workforce, but right now the differences in the four um generations in a workforce are so different.
37:06
SPEAKER_02: I mean, the experiences of each of them are so different.
37:10
SPEAKER_02: And trying to pull those things together and leverage the knowledge of each of those four is monumentally key.
37:17
SPEAKER_02: So that's another thing that a business coach consultant can help you look at is, and I'll add another one while I'm talking away here.
37:26
SPEAKER_02: DEI is another one.
37:27
SPEAKER_02: So, like DEI, people treated that like a checkbox.
37:32
SPEAKER_02: Well, it's not a checkbox.
37:34
SPEAKER_02: Like, if you want to embrace that, that's a change that needs to happen.
37:38
SPEAKER_02: And it's a it's an evaluation, it's like the women's suffrage movement.
37:42
SPEAKER_02: Like it's gonna take a long time for that, for it to become real for people.
37:46
SPEAKER_02: So, again, it's it's good to have a business coach and consultant.
37:51
SPEAKER_02: It's good to have it in your budget for sure, because you know, your your business advisor, coach, consultant will tell you, you know, they'll be able to look around corners for you or help you look around the corners.
38:06
Scott: Thank you for listening to our first best of episode.
38:10
Scott: Hopefully, this brought a little bit different perspective for you and provided you some examples and frameworks for thinking about and this and decision making within your business.
38:22
Scott: We'll think about and try to release maybe some more in the future, so let me know what you thought.
38:28
Scott: Every episode we wrap up with three takeaways, and today is going to be no different.
38:34
Scott: Given the topic at hand, we're gonna pull together what everybody shared with us and give three takeaways around decision making.
38:42
Scott: The first takeaway is to include others in and outside of the business.
38:48
Scott: Yes, as the owner, you know the most about your business.
38:52
Scott: However, you don't know everything.
38:55
Scott: So bring in folks inside and outside the business.
38:59
Scott: They're only going to help give you more information to make better decisions.
39:04
Scott: The second takeaway is to remain consistent and diligent with the process.
39:12
Scott: Brittany talked about having a full-day planning process.
39:16
Scott: That's fantastic.
39:17
Scott: I love that.
39:18
Scott: Put that on your calendar.
39:20
Scott: Do it quarterly, do it monthly, maybe do it weekly.
39:24
Scott: Be a little careful.
39:25
Scott: You heard from Eric and Patrick how going overboard can be a bit too much at times.
39:31
Scott: But put it on the calendar.
39:33
Scott: Remain consistent and be diligent with that planning process.
39:37
Scott: And the third is align the time spent with the relevance or importance of the decision.
39:44
Scott: James Long talked about that, and others touched on it as well as look, don't spend an excessive amount of time over a decision that doesn't have that much impact on your business.
39:55
Scott: So there's three takeaways.
39:57
Scott: Include others in and around the business, remain consistent and diligent with the process, and align the time spent with the relevance of the decision.
40:07
Scott: We're going to wrap it up with a favorite book or podcast.
40:10
Scott: The book we're going to share is Leaders Eat Last by Simon Sinek.
40:15
Scott: I think the book really helps you understand your position as a leader and progressing through the unknown, which is all about decision making.
40:25
Scott: Well, thank you for today, and we hope you'll listen to our next budget your business.
40:30
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40:39
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40:47
SPEAKER_00: Thank you for listening, and we hope you join us for our next guest on Budget Your Business.