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S1E3 - Jesus Was Not a Penny Pincher · Biblical Business Podcast

• speaker-0: Jesus was not a penny pitcher. And so I'm not gonna be one either. the quarter immediately following doing that, we grew by fifty percent in profit. speaker-1: how do you think about debt? speaker-0: I don't like it. You play stupid games, you win stupid prizes. speaker-1: You answered a question earlier and I'm not quite satisfied with your answer yet. speaker-0: I have forgiven seven figures that somebody owes. speaker-1: Can you tell me more about that? As an entrepreneur, what should you pay yourself? How do you think about that? speaker-0: I think it's really difficult when you're first starting out to figure out what you should pay yourself. And I don't think it's unreasonable initially to make sure everything's going back into the business and just take it through distribution. Usually you want to work with a good CPA to figure out what the exact number is. But then as your build your business matures, if you're not paying yourself as much as you would have to pay somebody to replace you, then you're not paying enough. speaker-1: And at what point do you switch the philosophy of like, okay, I'm just gonna take distribution to be like, now I am fairly paying myself? speaker-0: Yeah, once you're taking large distributions that are past the tune of what you would need to pay somebody to be in your role, it's a really easy number to then go, Okay, cool. It would cost me whatever, two hundred grand to hire somebody to run this thing. So and I'm taking two hundred and fifty in distributions. Let's let's start rolling. Let's let's bake it in. speaker-1: Yeah, okay, okay. What because one thing that I was really thinking about was like you you think a lot about trying to bless the people that work for you. And you will pay above even what they ask. Like they'll come in with one number and be like, if if we can make this happen, that'd be great. And then you come above that. Can you tell me your thought process? Because that seems complete opposite to the rest of corporate America. speaker-0: It comes from all of the battle wounds and scars of living and working in corporate America and having to justify every dollar and cent of your existence. You know, I had I had to fight tooth and nail for 20 years to get pay increases and bonuses and negotiate. I mean, I went through all of that. So I know well the pain of having to negotiate for what you feel like you might be worth or what value you're adding to the business. So For me, leading a biblical business means leading from a place of generosity. Like Jesus was not a penny pitcher, and so I'm not going to be one either. speaker-1: Isn't it also opposite of if the marriage like hear me out when I say this? It is like corporate America drills one thing in you for 20 years. Yeah. Jesus lives a completely different life. And it's you're finding the marriage of how do you run an effective business b effective business for the gospel to advance the gospel. speaker-0: Yeah. I I think that if your definition of what running a great business is means that you don't pay people, then you've already gone off the path of leading well. I think that there's a great analogy, you know, and sort of a a myth that in medieval times, before going into battle, soldiers would get baptized. And they would hold their sword above the water. Like, God, you can have all of it except this. speaker-1: Mm. speaker-0: And I think the modern day equivalent of that is said to be your wallet. I think speaker-1: Mm. speaker-0: it's the same in business. It's like, yeah, I'll do the core values and the mission vision values. And here's this, and I'll I'll even like add a little benefit. Maybe I'll put a ping-pong table in the room. But paying people above and beyond market the market. is something that I'm just not gonna do and then you have to ask yourself why? Why are you doing that? Is it coming from a place of stewardship or is it coming from a place of greed? speaker-1: So so how do you think about compensation? How do you think about paying your employees? speaker-0: I think about value exchange and then generosity. So paying is more than just, you know, the salary or the bonuses that you give people. It's prudent and reasonable and good planning and diligence to see what a particular role pays in the markets. and then to find out what is the value that that's adding to your business. Right. So there's some pretty basic math there. Sometimes it's very clear, like, hey, I'm bringing a salesperson in, or I'm bringing a marketing person in, and they need to get a certain number of ROI. But there's other stuff that's completely not tangible, right? What's the reputation risk of not having a great controller in place? And so you go, well, the average controller in my area with my business size, you know, the pay bands tell me that it's 115. So I'm gonna pay right in that band. And we're at the market. The way I think about it is. Absolutely, that's a great starting point. But then I want to come from a place of generosity past that. speaker-1: Okay. And so speaker-0: So there's no there's no like pharasetical formulaic approach to compensation. I believe just like generosity in how you give, it's a heart issue. speaker-1: Hmm. So so then I think about there's a book somewhere back here that talks about the psychology of money. It literally called the psychology of money. And and I think about a lot of times, especially as an entrepreneur, for me, the there's so much subconscious decision making that goes into how I think about money, how I spend it, how I save it, how I use it. And it sucks when that psychology intersects with the business. And like to double click for me, I think a message I heard a lot growing up was like, we can't afford that. We can't do that. And so I'm always like very I've had to work really consciously against that scarcity mindset. And I also have seen in the business how at times that same psychology will creep into my decision making. And so I'm really curious for you if that resonates, if there were subconscious things that have really impacted the way that you think about money and how that intersects from a personal standpoint to a CEO standpoint. speaker-0: I too grew up with not a lot, right? I was the kid on free lunches and I ate peanut butter and jelly tortillas because bread was like a a luxury. Yeah. I definitely also came from the mindset of like, okay, like we we need to just be really prudent here. At the same time, I think that that so that is definitely a part of what informs me. And then I would also say that going through the corporate experience really. taught me what I didn't like and what I felt created a dehumanization of the person sitting across from me and a an approach on everything of what's the least we can pay to get this person in versus how can we get the best people and how can I show generosity in the way that we do that? Not just in, you know, but in pay, yes. Because it feels like that's the hardest part for most people. speaker-1: Yeah. speaker-0: Oddly, right? And and then you go down logic paths, right? I saw too many scenarios where you'd have a business owner who had a great leader. And that leader, let's say they're knocking it out of the park and they're knocking on the door like, Hey, I want 50 grand more. Let's just say. Okay. Let's say they're making 150 grand, they 50 grand more. And they're like, Well, the market shows that for your Experience and education in this area, you should be at around, you know, 160. Or as a matter of fact, you're you're below where or you're above where you know the market is. So you're already paid, you know, except and then they'll go spend 50 grand on an ad campaign that doesn't do anything for the business without even blinking, or they'll go spend 500 grand on a trade show that doesn't have any direct RLI. And I think that's this very common case where. People cut their nose off to spite their face. And I think that There's the go first mentality of what I call the hot dog stand effect, which is like, let's go first as much as we can. But the reality is a lot of times you're not going to go first because you're distracted and you've got other things going on. And so then when people do come to you, how do you meet them in that moment? You know, a lot of life is defined by how we react to things. And I think that money is a very, very, it's a very interesting one where I've had scenarios that. you know, I've seen really great people leave companies for not what I would consider nothing and what would the business would consider nothing relative to how they spend the rest of their money. And so bringing that kind of pragmatic approach combined with generosity is it's how I like to lead. speaker-1: Hmm. What so how do you meet them in those moments? Because I know it's a vulnerable moment definitely for them and in a lot of ways for for us too as leaders. Yeah. speaker-0: I think for me, the advice I typically give people is to always negotiate after you win the championship. So if I'm just coming, if I'm giving a pure advice from an employee perspective, my advice is go knock it out of the park. Go do amazing work. Then come negotiate. It's it's when we kind of try to approach things with like, hey, I'm gonna do this. I'm going to hit this particular thing. And can you, you know, I think that's it's not that that can't be met. It's just that that's not as prudent of an approach for the employee. And then as far as like how I meet people in that, if somebody's come to me, and let's just say like somebody knows the philosophy, and let's say that they just come to me out of nowhere and they're like, Hey, I really feel like I'm underpaid. I should get paid more. I usually just ask questions. If I if I know that maybe they're coming from a place of Greed. I start to ask questions because a lot of times, you know, the the thing about life is you never know what somebody's going through. You just don't. And so sometimes it's coming from a place of some something temporary going on in their life or a challenge that's happened that they didn't see coming, whether it's, you know, in a marriage or in a family relationship or a death. And so getting to the heart of it is also important too, because You know, especially in small business, you make the rules. You can meet people in different ways. You know, I can say, hey, maybe you're coming and you're asking for this, and the motivation isn't really that like you've been knocking it out of the park and you want you feel like there's an uneven value exchange, but it's that you have this other thing going on and you feel the pressure of it and you want to take on more. and we can meet them in different ways. We can just provide people money for their family or for something that's going on. It doesn't have to be one way to approach it. So I think ta th the that's a long answer. The short answer to your question is my approach when people are in that moment is to Meet them with gentleness and grace and curiosity. speaker-1: And so you you kinda said that you ask questions. Yeah. What are some of the go to questions to ask in that scenario? speaker-0: Yeah. usually it depends on how they come to you. Some people come to you with a whole plan and they've like laid maybe they have that experience that most of us have of having to justify why. And so they come to you with all of the information and they're like, here's the here's my pitch, essentially. And I mean, I've had that happen where I've literally just told people, Awesome, sounds good. It let's do it. effective and they say I just you know I hope it was effective whatever the first of this month and I go actually let's make it effective last month. speaker-1: Mm. speaker-0: I've done that. the where somebody comes a little bit less prepared, I would say, or maybe not even prepared in presentation, but just they just come and let's say somebody were to just come and say, Hey, can I get a pay raise? questions I would ask would be, Why now? what are tell me about some of the things that you feel like you're doing that there's an uneven exchange of value for the company. and that I ask them how we can support them. Better in their roles. If they're maybe at the cap of what they're doing and they want to take on more responsibility, that's always another option. Hey, what are some of the things you're excited about? Do you want to work on other things? So I'm trying to, the questions that I ask are an approach to collaborate on getting them to where they want to go versus being in some contentious, like I don't know, debate or engagement where I'm basically. asking them a bunch of questions to f get them to realize that they shouldn't be asking. So it's like, what's your heart and the questions that you're asking? And so for me, the questions are coming from a place of trying to get to the heart of it. Like what's driving this right now is a great point. speaker-1: Okay. So then I want to flip the side of the table because you've been in a ton of those meetings. You've seen the ones that are handled well and you've seen the ones that are not handled well. Yeah. And because not everyone listening to this is an entrepreneur, how do you approach what's been your experience when you think about the people who have approached these conversations in the best way possible? How do they do so? speaker-0: Great question. The people who have approached this in ways that got them what they wanted. speaker-1: Let's take it from that lens. Yeah. speaker-0: Are ones that did come prepared. And one, so they had a very well thought out process. and they came from a place of they've already done the job. So you kind of have there's these two schools of thought that a lot of people run into, especially in corporate, where it's like, and maybe you've heard like dress for the job you want, not the job you have, or you can apply that philosophy in do the job that you want and then ask for it. speaker-1: Hmm. speaker-0: And there's a lot of people who take the approach, scarcity mindset, of well I'm not doing it if I'm not getting paid. And my my answer to them is always the same. Great. And you never will be. speaker-1: So then what happens? Because I think in a in a environment where you are leading, I see it as like, yeah, there's obviously going to be like you you see people, you want to recognize people and you want to bless people when they are actually picking up the capacity. Yeah. And there's a lot of other environments to where maybe someone picks up the responsibilities and soon l and then it becomes expectation to where it's like, no, this is just something you do and we're not gonna pay you extra for it. speaker-0: Hmm. speaker-1: How do you handle that? speaker-0: Yeah, I think that's a culture problem that is prevalent and that happens everywhere. At the same time, closed mouths don't get fed. And you won't have if you don't ask. And so one good way to do that, I would say, is if you get a no, let's say, create very clear guidelines for what it takes to get your yes. So speaker-1: Mm. speaker-0: for example, You know, when I was cutting my teeth in banking, I wanted to become a vice president. And, you know, I was doing all the things. I was performing, hitting all the metric. I'm like, but I'm not, I haven't gotten it. Well, that's because there wasn't clear guides. So what there wasn't clear guidelines. So the way that I approached it was hey, here's this thing that I want. What do you see me needing to do? What do I need to do to make that happen? And you ask the question. It you're gonna have one of two responses. One, they'll immediately be able to tell you what you need to do. Like you need to hit this number in sales, you need to hit this, you need to be here for this long, whatever the the their barriers to entry are. Now at least you know the rules of the game. Or they're gonna say, you know what, I don't know. Let me think about it. And that's a great place to be because now you have your boss thinking about setting the guidelines for how you can get this raise, this promotion, this new responsibility, whatever it is you want. So the the other great thing that people who get nos do is they ask, what would it take? for this yes to be true. What do I need to do? speaker-1: Mm. speaker-0: Cause that's them saying, I'm willing to put in the work, I'm willing to hit, you know what you want me to hit, and I'm not coming from a place of entitlement. speaker-1: Mm. Yeah. You know, I know for a lot of like small businesses that there's people who come in, are on the ground floor, who are instrumental to their company and know the value that they're providing. And at some point they might broach the conversation of equity. Sure. And so how do you think about that? speaker-0: Hmm. it depends on the perspective that I'm giving you. Is it the perspective of the person who owns the company or is it the perspective of leadership within the company? 'Cause those are not th sometimes they're the same, but they're not always the same. speaker-1: Can we take it from both angles? speaker-0: Yeah, absolutely. As an owner of a company, I take equity positions very seriously. I think that anybody who's been alive for long enough knows that relationships and people change. And so when you give equity in perpetuity, you are marrying this person. And if things change, that doesn't change. So as an owner, you want to think you want to have your own guidelines for why and how and when you give people equity in the company and who and what what the litmus test is for who you bring in it. Ways to do that that still gives value to the people on the other side without putting you in a risk position is phantom equity. And phantom equity is essentially sharing in profits. While you're working with the company. So rather than, for example, you getting a 10% equity position, a 5% equity position in the company where you own shares that can be sold at some future point, you say you will share in 10% of the net profit of the company. So now you have benefit if the company grows and makes profits, because you get paid on distributions when anybody else gets paid, but you don't have ownership in the company in perpetuity. And so you assign that phantom equity to end at any point that the relationship ends. There are other creative things you can do where you build in exit jumps. So let's say you were to sell the company, you can go, hey, this is phantom equity, but it also has this addendum in it that says if we ever to sell the company, you're going to get paid X percent on your equity, even though you don't have ownership. so that's how A couple of the ways I think about it from an owner perspective. And then running a company, I think that equity is a an investment to make in your best leaders that are bought in and sold on your long-term mission. And it's a great it's a great tool to use for people who you believe are wanna be a part of building something real long term and are not Checking the clock. Essentially, for me, if anybody checks a clock, they're not an equity partner. Being a bit an a business owner is something that you it's like Jerry Seinfeld. You know, he's on, he's on Howard Stern's show. And he's asking Howard Stern's trying to press him about his process. How do you do this? And when do you write? And he's like, Yeah, well, I'm always doing material. He's like, wait, so you're always Like if you're with your wife, you're never really fully present, you're you're developing material. He's like, Yes. Right now, I'm developing material. He's like, So what do you mean? So you basically work 24 hours a day in your mind. He goes, Yes. That is what I do. When you are a truly a business owner, as much as you can create boundaries and you need to create healthy boundaries and asymmetry between like how you rest, how you sabbath, how you spend time with family. The fact is it's in your it's on your mind. And when you are doing something for that business, you're not checking what time it is or what day it is. So as a as somebody who runs a company, I think of this is somebody who sold out on building this. And when they are, then you look at how can I bring them into the the ownership side of things. But it's not necessary. Honestly, a lot of people are it's they want equity because they want money. So it's like cool, how do we we can skin that cat a bunch of different ways? speaker-1: Mm. speaker-0: And Phantom Equity is another great option there. speaker-1: Yeah, yeah. You know, I I know that you also think of a lot about blessing your employees and there's a lot of different ways to do that as well. And so like what are some of the ways that you either actively are implementing or that you have considered implementing but have not done yet of how you try to bless your employees? speaker-0: Hmm. That's a great question. one that I took from the the owners of Sherman that they already had in place was every I I want to say it's five or seven years, an employee gets a five star vacation anywhere in the world. And I love that. I think that's really cool because it's kind of a it's purely based on tenure. It's just like, hey, you've been here. And so we're gonna give you and your family some benefit there. So we've we've adopted that. I moved the company from a five day work week to a four day work week and did not increase you know the number of hours, like it's not like X number of hours. And that was that was a choice because if you do the math, you effectively gave everybody a 20% raise. Right? So that's significant. and then when I first started, I moved everybody to cover the company would cover 75% of the family and 100% of the employee when it came to all benefits. And then I moved it to 100% a few years after once the business was kind of on a steady place where I felt really good about it. Then we moved to cover a hundred percent of both the employee and their family. and then just even recently. It was a kind of an old old dog policy in place where it was like you took a year before you get four o one K. And I just said I want to change that. And so we changed it to be sixty days. And so again, like all of these things have financial costs to them, to the company, s significant financial costs. But for me, the exchange of value is just it's so easy for me to make those decisions. I don't I it it feels like I don't even have to think about it. and I'm constantly trying to think of other ways that we can do that and do it in a meaningful way. Or like, for instance, we have a team meeting coming out. It's like, yes, you're coming out and you can bring your spouse and both you and your spouse can go have a spa day. We can do this, like, but you can't do that without running a profitable company. And so, like, there's the whole no mission, no margin, or no margin, no mission. And so it's like we're going to run a profitable company that cash flows well so that we can keep doing this and we can keep doing it in ways that Both emotionally but also practically can give people and share with people what God has given us steward. speaker-1: Yeah. speaker-0: Yeah. speaker-1: moving from a five to a four day work week. I think that is so many dreams. but I think also when rubber meets the road, that's hard to justify. And so I'm really curious to see to hear what your experience has been shifting from five to four, and you know, essentially giving that twenty percent discount. Yeah. And how that impacted productivity revenue, all of that. speaker-0: You know, God really honored that in a bunch of really amazing ways. the quarter immediately following doing that, we grew by 50% in profit. And we've continued to grow. And so there was no productivity loss. There was no impact negatively to the business, and the the impact for humans was that they got some of their their time back. And You know, you talk about where the rubber meets the road. There are people who still they work on different four day schedules or sometimes they, you know, they want to not they want to work on Friday, they don't want to work on Monday. And I think there's a lot of I like to create a lot of autonomy where it's possible for people to make, you know, decisions to to do what's what's best. You got a little motorbike back there. speaker-1: Yeah, do, I know. He's going. Yeah, speaker-0: Got some wheelies popping? speaker-1: I think so. I'm I'm I'm I'm waiting to see some drifting happening, so we'll see. speaker-0: yeah, yeah. I think I think the the reality is is that the company's only gotten better and stronger since we made that change. Man. speaker-1: You know, I think about the idea of retention too. Like there's one of my favorite sales strategies is when I if someone has a good job opening for like a a marketing specialist or like, you know, a you know, maybe even CMO, it's starting the relationship of like, hey, I saw you're looking for this. And then the numbers when they start adding up, okay, when you think of someone's salary plus the taxes, plus the insurance, plus the XYZ that comes with it. If you were to, hey, instead hire us for whatever price, that would be less than that total amount. Then to me, it becomes like a comparable thing. And I think the other thing that so many people miss is like the retention side of it, of how quickly people will come and go. And and especially the onboarding cost and the offboarding cost that happen. And so how do you think about retention and keeping people happy through the years? speaker-0: You know, I think our role is to plant and water, meet people where they're at day-to-day, to serve them with love and care and generosity and faithfulness. And also understand that everybody has different seasons in their life. And so just because somebody leaves your business to go do something else doesn't mean that you're not doing good things. sometimes it just means that there's something new, God has something new for them and a new chapter for them. So I think. I'm definitely the kind of person who stays away from saying like this is family, because you you don't fire your family. this is a work team. And so we're a team here. And the important thing when it comes to a team is that sometimes like this is essentially the major leagues. And sometimes you get traded. Sometimes your family's moving to like a new thing, but we're all still in the same league. And I'm gonna support you and be excited about you. If you wanna go, you know, play for the Seattle Kraken instead of the LA Kings, like you're still running running the position. You're still in the league, but I'm excited for you to continue to to play. And if that's the season that God has for you, like I wanna support it. So I think we wanna create a place that people wanna work and that they wanna be at, and that they wanna be at for their entire life, for their entire working life. That's the desire. But we hold that really open handed because really it's not about us, it's about each individual and what is on their heart for this season of their life. speaker-1: Mm. Yeah. Something you started to open up was the idea of like the concept of family. And I I'm particularly curious of what do you think about like e even hiring your family? speaker-0: Hmm. I think that hiring your family is an amazing thing, it's an amazing benefit of running a small business. It's the choice that you have. I think the challenge that most people run into is are you treating your family like an employee? Because you should. So the standard should be everyone is given the same opportunities and engaged with the same way. And It's interesting because you kind of can see two sides of nepotism rear its ugly head. It's like a double headed dragon. Like on one end, you've got the nepotism where the person it feels like they don't get held to the standards and they get paid way too much. And they've got the corner office where it's like Tommy Boy, you know, like, this is your office? yeah, you've been here five minutes. Like he, you know, David Spade's upset, right? Because he's like, I've been here grinding it out, and just because you're you're You know, big Tommy Callahan's son, you get the office. And so that's one side of it. And then the other side of it is that some people take advantage of their family and they underpay them and overwork them because they're family. speaker-1: Mm. speaker-0: So the antidote to all of that is to treat them fairly like any other employee of the company. And so giving people an opportunity to come work at a great place as your family. It's a gift, man. And I would encourage it. I think just have to treat them the same way. And I would say that's the same goes with friends. You know? And I think we pr you probably see more of that with friends, or at least I have, that you do end up treating them differently in a lot of ways because of the friendship. And so the question just becomes whether it's good or bad in treating them differently, taking advantage or giving them too much, both are wrong. You need to be right right at that place where you're treating them fairly like anybody else. speaker-1: Hmm. Where especially with friends. Yeah. Like where do you see the pitfalls start to develop? speaker-0: I think that for me, in my experience, it's been in a form of ruinous empathy. speaker-1: Yeah. speaker-0: Where I kind of just you you don't push as hard. You don't hold accountable the same way because you're friends. And you also see it that that it can happen the other way too, where like I'm gonna Talk to you a lot more about business because we're friends. So now it's like, well, now I'm constantly having to talk about this thing. And now you're like, now I'm treating the person almost like you're overworking. So it's again, it's I've experienced both sides of that coin as well. I've I've demonstrated both sides of that coin. And the the lesson learned is that it needs to be treated like every other employee and treated fairly down the middle, hold accountable, encourage, build up. because the thing that you think you're doing, if you're just not you're trying to be a quote, good family member or a good friend by not holding somebody accountable, you're j it's just ruinous empathy. You're you're building up resentment and you're also not giving them a fair shot to correct or, you know, pull themselves out. speaker-1: Hmm. You answered a question earlier and I'm not quite satisfied with your answer yet. And speaker-0: I I feel like that's gonna be a common thread in this podcast that you won't be satisfied with my answers. Yeah. speaker-1: Yeah. And I wanna dig harder into it. You and I had a similar some similarities in the upbringing. I rem you you've told the story and I I totally I've been here too doing the same thing. When you're serving tables and as you as you bus a table, you are eating the food from it because you're like, I'm hungry and this is a free meal. And maybe someone looks at me gross, but who cares? And so Yeah, speaker-0: Better at hiding yeah. speaker-1: you get better at it. Yeah. That's the real skill that you have to develop when busing tables. So you know, you you come from this place of like lack. And and it's not perhaps there's not lack in life, but lack in the view in your relationship with money. And relationships change and relationships shift. And so How did y the relationship with money change for you over the years? speaker-0: I think that I climbed Money Mountain and found the hamster wheel. And so I think when I was younger, it was like, well, if I could just have a bunch of money, then I would have security. I would have safety. Part of the reason that I didn't take huge risks as a young man in entrepreneurial entrepreneurial ventures. was because I wanted to create stability. And it felt like, yeah, corporate, you know, grab that briefcase, throw that suit on, and you'll create you get your 401k built up and you'll have security because you find you're finding your security in the job and not in Jesus. And no matter what, whether you have a lot or have or a little, or whether you're an entrepreneur or or in corporate, your security isn't in any of those things. Your security is in him. So for me, I think The relationship over the years became this understanding that one, what I thought I was going to get out of having more money, I didn't I got some of it, but most of the what I probably had in my mind about what would come, the level of peace or whatever, it it never came. And, you know, I mean, when you get your first $200,000 check, you think like, wow, that's like this will be life-changing. And and then it's gone. speaker-1: Mm. speaker-0: And it's like, wait a minute. so the the levels just change, you know. It's like, well, then you get a two million dollar. It's like the it changes, but the what remains the same is that it doesn't give you what you thought it would give you. And so I think as as Tim Keller kind of alludes to, I would say, in counterfeit gods and in a couple of others like every good endeavor. you have to develop, I've worked to develop a relationship of healthy apathy to money, right? I have it or I don't have it. Neither one of those states defines how I feel today. And that is the call of Paul in Philippians four, when he says I can do all things through Christ who strengthens me, the whole context before that is contentment. He says, I've learned to abound and I've learned to have, I've learned to be full, and I've learned to be hungry. In all of these things, you know, I've learned to be content. I can do all things through through Christ who strengthens me. So finding your contentment in your identity and relationship with Jesus today, and not in those external circumstances, especially money, because that's the big one that we all have to hear about all the time and deal with, is much easier said than done. And it's a daily battle, but it's the it's it's a battle worth fighting. speaker-1: How do you develop a healthy apathy for money? speaker-0: You know, I am convinced that it's by having you know, being broke and having a lot. Meaning, like once you've experienced both, you in first principles understand it. And if you're really wise, you'll learn from the word of God that you can develop that relationship right now, and that you already have more than you ever thought you would have right now, and that was a state at some point where you didn't. As much as you thought you would. And neither one of those states brought you what you thought it would. And so it's it's sim it's the other side of a decision. So it's a daily decision to wake up and say, the way that this sale goes, the way that my, you know, deposits go, the way that this goes will not define my peace and my joy today. speaker-1: Mm-hmm. speaker-0: Wake up tomorrow and you do it again. speaker-1: Yeah. I think about the idea of like, you know, over two thousand times the Bible mentions money. And so often the verse is misinterpreted of of, you know, money is not evil, but the love of money is. And I know especially climbing corporate America, you see a lot of people who are very in love with money. And speaker-0: And very impressed by it too. speaker-1: Tell me more. speaker-0: You know, the saying success has many fathers, but failure as an orphan is a good one. I I would also say success has many followers. As you attain quote worldly or material success, people are very easily impressed by that. And so I think that it's it's definitely it's lurking at the door. And I think, you know, that phrase is that right, the the love of money is the root of all kinds of evil. Like you can't serve God in mammon, right? You can't serve God in money. And if look at your life and look at the state of how you feel when things change, and you will see what God you're bowing down to. Because like a litmus test, I like to give myself. And again, it's this is not something you solve in perpetuity, but it's something every day is if this were to change today, I would be content and happy. Usually you've identified your idol, your counterfeit god. Health, material success, relational change. You you know, I say a healthy relationship or a healthy apathy to money, but it's kind of like it's not really apathy, right? Because that's indifference, but it's more a contentment not based on any circumstance. That's why it's a piece that surpasses all understanding, because understanding would tell you that your contentment. should be based on your immediate circumstance. And if it isn't, that doesn't make any sense. That's why we live in the upside down. That's why Jesus gave us his words. speaker-1: Yeah. I think of a of a line and maybe this is like a southern line, like where someone could make a sinful amount of money. And you know, I th I I know it's just a phrase and but it also kind of begs the question of like what should I charge? Like what should how do I think about that? H what point do I raise my prices? What point am I not charging enough? How do you approach that? speaker-0: You know, I think one, it's test and learn. So I'm a big test and learn person. And it always as much as I could tell you, like, hey K, go look, see what the market's doing, look at your value over time, what kind of value you can do this mathematical equation on how you what value you create and then work on the charge, or if you're consulting, you should take your hourly rate in corporate and multiply it by four and then you know, do there's lots of things that you can do. and none of those are bad in and of themselves. It always comes back to the heart. You know, ask God to give you conviction if you are charging more than what is a fair value exchange. You know, and people have a heart I think it's weird. I would say, depending on your childhood and how you grew up, some people, like I can tell you, I have a very hard time with. understanding value. and I think a lot of Christians struggle with that. Where it's like, yeah, it's like should I charge twenty-five thousand dollars for a one hour conversation to come speak? gosh, that's that's ridiculous. okay. Tell me the point at which it isn't. And this is where you start to run into your logical fallacy is like my heart, I feel very clear and at peace with that kind of value exchange. And I believe that the influence that it has or the impact it can have is a fair value exchange of, you know, a a lifetime of experience that I'm gonna share. Okay. but if you charged fifteen thousand, that would be reasonable. Well, actually, I think you should do it for free. You know, and and then some people start to take advantage. It's like, like I'll tell you right now, for example, on my heart. If I go, if I were to go and talk to a church, I wouldn't charge them. It's just what that's for me. That's that's how I operate. but there's no point at which God God's word has told you you should charge this much. The only thing that He tells us is to search your heart, right? And so Ask him for convict the conviction, set a price, and then move forward. I promise you, you can't undo God's sovereign will and he'll correct you if necessary. And I think I've, you know, you part of that experimentation is finding out, right? Like, what should I charge for this? Okay, well, I don't know. What are you gonna do with it? Are you charging more so you can get more stuff? Like, are you charging more so that you can get rich because that's where your security is? Are you charging more because you want to buy a private jet? Search your heart. The answer to the question is there. It's not really about the number. God's not impressed or offended by a number because He created all of it. So when you when you look at any price of anything, there's of course the free market economy. And then there's like, you're doing this to get rich. I see. And there's not a fair value exchange there. Right? It's like somebody might think that certain executives, you heard a lot, CEOs are paid way too much. I mean, well, what if I told you that the CEO of Barnhart Crane gives away a hundred percent of his money? If he only gave away fifty percent, would you be okay with him making the money he's making? Like there is no we search so hard for black and white answers and there's so many things that just don't operate in that sphere. And it comes it always comes back to your intentions. speaker-1: Mm. Yeah. Yeah. Motivations. Man, I I'm also speaker-0: Well, how do you think about it? I'm curious, you started a marketing agency from scratch. speaker-1: Yeah. speaker-0: You're a production agency. You're in an industry that has kind of, I would say, wild variants on what somebody can and can't charge. And a lot of it's based on reputation over time, and some of it's based on demand and supply. How did you decide? For example, take me back to your first customer. How did you decide what to charge? speaker-1: Hmm. I I had a mentor of mine that gave me a filter to view it through. And like as you're thinking about the different projects to take, he was saying it's like there's three things to keep in mind. And ideally you want all three, two's pretty good, one's y you can go either way, zero, you should probably skip it. And it was this idea of you have to look at either one, the pay. Two, creative fulfillment, or three, the opportunity to progress your career and or your company. And I thought that was that's been a really good filter. Cause ideally, you know, the the projects that pay the best usually aren't the most creatively fulfilling. But the there's also times where I'm willing to sacrifice the pay for it because of the opportunity. And and so it's weighing out and it's almost like decision by decision. Like there's been some projects where I mean, like, especially I early on, I'll do it for free because of the relationship, because of the opportunity that it could later present. Yeah. Now that's you know, way, way harder to come by. And so I'm thinking about it in a completely different way, right? When you have salaries, when you have overhead, you have insurance that just has to be taken care of at some point. I think about that very differently. But then Like let's say we have a project come through. You know, we had a a massive grocery store come and do a project with us, half a million dollar budget, right? And you're the way you're going to then it gets to a stewardship thing, right? Sure, yeah, I could you can make a good chunk of change, but also I mean, I'll tell you though, I filter almost through like what's the industry standard, because that's like the fairness value that I find. speaker-0: So you reached out, first customer, you reached out, you're doing it for free, getting your chops in, working on opportunities, you're talking to people, you're hearing what they charge, and then somebody comes through and says, I've got this job, and you're like, Cool, this is how much I'm gonna charge for this kind of thing, based on essentially what's the the free market economy is telling me. speaker-1: Bingo. speaker-0: Yeah. And I think that's I think that's a really great place to start. Yeah. and then over time, just like negotiating your salary, as you prove your reputation. then you can ask for more because you're delivering different value. speaker-1: Yeah. And I think too something a a completely different mentor was talking to me about. It's like there is not a lean linear progression to the growth of a business. There there could be, but I think everyone thinks it's just like a upward slope. And man, I I think the realization of like, dude, there's been years where it's just up, up, up, up, up, and there's been years where, what happened? And then eventually it like, you know, it all kind of evens back out and you get back on track. And one of the things that has been really interesting, especially just like in in the creative in the creative space, and especially in the marketing world, is AI is completely changing the the the conversation at hand. And so I think about that, and I also can see the writing on the wall. And there's questions that they're asking. from a very corporate setting that we're having to engage with. And it becomes interesting. At what point is it do you really pivot or do you abandon ship? And I'll I'll like double click into it. I see AI generate motion graphics like really well. Like better than a lot of professionals out there. Yep. And so there's a certain point where it's like, man, why would you come and pay so much money when you could just have Chat GPT spent up something. And you know, it's not there for photo and video quite yet. And I think too, it's like the brand standpoint we talk a lot about. Yeah. To where, right, you what would it mean for a hospital network to use AI videos of patients? Right. Immediate backlash because ultimately the brand that they're trying to to communicate is warm, hospitable, caring, loving. They take care of you. And AI is not that. And so it instantly backfires. I think of the same thing with like restaurants. You can't have like a photo of a fake burger because that then opens itself up for a lot of legal conversations as to is this false advertising? But I'm so I think about it from those lenses and I see some opportunities to where there's still, you know, photo and video will be needed. But it's also way easier to Build a business when the wind's at your back rather than when you are when you're going upstream to completely switch analogies. So, so maybe my question for you is like as you are getting to see the writing on the walls, where are you making bets? What are you thinking about? And how are you thinking about making decisions? speaker-0: Yeah. I think that as AI becomes more and more capable and you can do anything, the discernment becomes the highest value that you have as a business leader to know what to work on. And I do believe that advisors and coaches are actually going to become even more valuable over time. Because at a certain point the question of guidance. Is filtered through experience and trust. And so how much do you trust whatever you're asking? Right? Whatever tool you're asking. And I think that, you know, for me, productivity is interesting. Essentially, all that's happening is more it's a faster commoditizing of execution. And so because of that. Deciding what that you what you actually want to do is going to be the hardest thing. And then also staying focused because you will be distracted by all the possibilities. And that's already a big hairy animal that's distracting all the time for people, is new opportunities, shiny objects. The the ability for AI to produce. Is going to create more shiny objects than anything ever before. And so From an economic perspective, just from like a running a business perspective, the question always becomes well, how are you going to get people to exchange value with you? And the building doing a great video or building a great website or having good customer service and high touch points, those were all outputs to create trust. speaker-1: Hmm. speaker-0: Right? If you went to a website and you saw that they had a certain thing and they responded a certain way, you trusted them more. Yeah. speaker-1: Yeah. speaker-0: But now if anybody can do that, how do you know who to trust? Because it might be whitewashed tombs. It might be a skinned veneer over a one person company and a guy who doesn't or a guy a gal who doesn't have the same judgment and the same diversity of thought in the building. so I think that the way I I'm thinking about it is Not just creating productivity, but how do we create better discernment along the way? because I think that that is the that's the moat for the individual. And then the moat for the business is really the reputation. So how do you build trust and express more trust so that people will want to do something with you and not, you know, the guy 10,000 miles away who's able to spin up the same thing speaker-1: Yeah. speaker-0: for ten times cheaper. speaker-1: Yeah, right. And so when you think about discernment, what does that look like? speaker-0: For me, discernment comes from wisdom, biblical wisdom. So I think it's really easy to get worldly wisdom, but if it's not rooted in and informed by the word of God for me, then it's just information. It's not wisdom. So when I want to be discerning, it's going to come from, okay, how does this align with what God's Word says? Have I spent time in prayer asking him for wisdom? Have I sought counsel from you know, 'cause there's wisdom in a multitude of counselors, have I sought counsel from people who also follow the Lord, not just from my chat? and then make a decision. speaker-1: So how do you delineate wisdom versus discernment? What's the difference between the two of those things? Because it sounds like speaker-0: Yeah, I would say wis wisdom is there's there's a there's a gap. the gap is almost like there's a there's a three part chain. It's like wisdom, discernment, obedience. So wisdom is the beginning, it's getting the information. Discernment is then taking that and understanding how to apply it, and then obedience is actually doing it. And so when you look at like the life of Solomon, he never lost his wisdom, but he certainly lost his maybe not even his discernment, but he lost his obedience to that wisdom and discernment. speaker-1: Mm. Yeah. speaker-0: So he knew what the he knew what the right thing to do was. He knew situationally even how to deal with it because he was more wise than anybody else that ever lived, but he just decided not to. Decided to something else. speaker-1: Yeah. You know, something I think a lot about is is the idea of some point in the next few years, we're most likely looking at the first one billion dollar business that's only run by one person. speaker-0: Yeah, I think it's already spun up, actually. speaker-1: Has it? speaker-0: Yeah, I think so. Somebody can sniff test it while they're listening. speaker-1: Yeah, no joke. What what at what point from a biblical business standpoint like do we think about What's what's your interpretation of it? I guess that's my question. Because I see a ton of value from a business owner standpoint, right? Like employees are beautiful and it's an opportunity for us to be able to share the gospel with them. At the same time, with it comes headaches, right? And and expenses. Again, it's the balancing. I'm asking this question because it's the balancing of the corporate brain and the biblical business. And they're two different things. And so from a corporate standpoint, if you could run a one person billion dollar business, you're saving on overhead, you're saving on on insurance on expenses or all that plays into it. But the headaches that come with it, you could do whatever we want with it, you could pivot it, you could adapt it, you couldn't very easily sell it. Yeah. But at the same time, I know your philosophy is like you don't want to lay people off. And that's not that's not even like really a card on the table. So how do you think about it? speaker-0: I mean I think a one person billion dollar company is really cool. I think that I think that the question isn't really how many people run it. The question is what are you gonna do with the money? speaker-1: Mm. speaker-0: Okay, you run a hundred billion dollar company. What is it? I who cares? What are you doing with the money? What is your point? because if it's just to get money, then you play stupid games, you win stupid prizes. Congratulations, you have a bunch of money. Yeah. But speaker-1: Yeah. speaker-0: so from a biblical worldview, it's like, well, that's cool if I can go then take that as a financial output and get the gospel into more people's hands and get you know, drinking water into people's hands or, you know, use it to, you know, disrupt sex trafficking in, you know, the the cities that you're in. Like if you know how to weaponize that thing to fight spiritual battles, fantastic. Go do it. But if you want to become nobody's talking about the first one billion dollar person, one person billion dollar company because they're excited about the amazing impacts it's going to have. from that sense. At least I've not heard a bunch of people talking about it. They're excited because they can get rich and not have to have a bunch of people under them and they can keep it all for themselves to buy more stuff. speaker-1: Mm. Yeah, that's a great that's a great call out. So so I got a question. It's more of a personal question in a the situation I'm running into. And I'm I'm phasing it because I think a lot of this conversation ha we've we've been focusing on finance and how to navigate fan finance from your own standpoint, right? Salary. Yeah. and what you should pay yourself from a standpoint of how do you bless your employees and how do you see them, how do you love them? talking about industries and things changing and the movement of AI in it. And the one of the things that I think of is accounts receivable. And at a certain point, like there becomes a point to where you need to be you want to you definitely want to be a good steward of what you've been given. And w how do you as a Christian business owner navigate someone who might not be dealing with the same principles and beliefs and foundations that you are. Let's start there and then I'll double click into my specific question. speaker-0: So is the question really how do I deal with somebody who's not paying me and they need to? speaker-1: Yeah, how about I just go ahead and hop into it? So the the essentially I've you know, there's been a client who has gone past like the net 30 period consistently. Yep. And you know, having grace and they're going through some transitions in terms of like leadership. in this past a month, they've let go two of their I know two of their people on the marketing side of things, one quit. Going from a team of you know down to two people on the marketing side of things. So I'm looking at that. I'm looking at them being overdoing their invoices. I'm thinking of I'm sending them an email every day, being like, Where's my money for lack of a better terminology? Right. And at what point, how how do I navigate it of still being exhibiting the fruits of the spirit while also being like, Where's my money? speaker-0: Yeah. I think at the end of the day, your job is to steward said business. And if you set terms for somebody, my philosophy is I give them usually three chances because that's a an extension of grace. But if you're late on your net thirty terms three times, you lose your terms. and from then on out you're a cash customer. And at some point in the future, we might be able to talk about giving you terms again. But when you give terms to somebody, you are extending them a line of credit essentially for a period of time. It doesn't matter if it's quote the industry standard. Just think of it in first principles. You are floating them money and giving them a line of credit to purchase goods or services from your company without paying you. And so my philosophy is obviously. get very clear on your agreed upon terms and then hold them to it. Because at the end of the day, if you don't hold people accountable to what you said, then you're also not letting your yes be yes and your no be no. So I think the balance for me is giving that kind of three chances because that does extend grace past what the clear agreement is. And then I stop shipping product and stop working with them. speaker-1: Yeah, yeah. Yeah. And so I'm thinking about it from my end. I could see bankruptcy being an option for them in the near future. and so how do I navigate that? speaker-0: You don't need to. Don't don't don't worry about their battles. At the end of the day, like you need to do your part, and then you you may or may not get paid. But it's a lesson learned to not let it get that far. speaker-1: Got it. speaker-0: Right. Because a lot of times, this is why managing your AR and AP days and understanding what those days are, and then also having a constant aging view to see like our How many times are these people passed due? This is one, this is where AI is brilliant, right? Like you can get a report every day to show, show me everything that's zero to 30, that's 31 to 60, that's 60 to you know, 90 or 61 to 90, and you can see where money is aging. And then on top of that, you can then have a list of customers on how many of them are past due and how many times have they been past due, which then can inform your conversations. I would also say like you build it in from the front on your front end of your agreements to go. Hey, these are the terms that you're being given up front. If in fact you're more than three times late, you lose your terms and you're a cash customer. We stop shipping. speaker-1: Mm. Mm. Yeah. So for I wanna touch on ARAP, but the maybe my final question in my situation would be at what point does it become a legal thing? speaker-0: Yeah, I mean, I think the legal system is there for a reason with people owe you money. you know, the Bible has a lot to say about not taking your brothers and sisters of Christ into court and and settling it yourself. but when it comes to dealing with people, I think you the way I do it is one, I weigh the time value of money. What's it going to cost me in time and distraction and emotional energy to engage in this legal battle? And what am I going to get out of it on the other side? and then I I try to make a Again, pray, seek biblical counsel, and then make just make a decision. but you know, a lot of people will go to court for dollar amounts that are just not worth it. And they'll spend a lot of not just money, but their time and emotional energy on something that they would have been better off, like cutting ties. I mean, I have had situations where I have forgiven seven figures that somebody owed me because of a character issue. And even though I was within all of my rights to take that and collect it and take it to court. speaker-1: Okay, forget ARAP for a second. Can you tell me more about that? speaker-0: Yeah, it was a it was a it was a really odd situation. And it was with a professing believer as well. But at the end of the day, like it was for me, actually my knee-jerk reaction was the opposite. My knee-jerk reaction, because haste leads to poverty, was to be like, no, this is what's this is what we're gonna I'm gonna hold you to that. You knew f good and well, what we agreed to up front, it's all here. and then I just prayed and and I talked to Jen and I felt very clear and convicted that I had been shown a ton of grace by God every day for all of my shortcomings. One, and two, maybe this demonstration will be something that can bring this person closer to Jesus because it doesn't make any sense. And it was also like a put your money where your mouth is to prove that I say I believe what I believe. and honestly after that happened, I didn't think about it at all. This is probably the second time I've thought about it ever. Because I was just I'm I'm I'm I'm moving forward. But I think the lesson there was for me, the lesson there was I actually should have taken even more caution getting into that relationship speaker-1: Mm. speaker-0: to do a little bit more work before I entered it. and still at the same time. Jeremiah 29, 11 and Romans 8, 28, like it was there for a season for a reason and had impacts on a bunch of other things that happened f for its purpose. So God used it. and and so I think, yeah, when it comes to a lot of this, it's always again, it just comes back to the heart. Like, are you taking somebody to court because you're angry and you're mad? And you know, is it like, is this your brother in Christ? You know. Are you doing it because it's just simply like was set forth and this is the right thing to do and we need to, you know, hold them accountable to the things that they said? I think that's both of those things are reasonable approaches. speaker-1: Hmm. Can can you elaborate a little bit more? You were talking about how and you might have to pull out the verse for this one. About like taking your brothers and sisters, you know, alright, like to court. Like speaker-0: Yeah. speaker-1: what can you I I'd love some like just insight and biblical clarity in terms of of that and how how speaker-0: Yeah, I'm gonna let me look it up while we're on. But yes, let's see First Corinthians six. but really the the idea is that like if you know and you are talking with a brother or sister in Christ, taking them to court is like it's it's it's well, God's said something about it. it's not like there's things that God doesn't say. It says right here, so we'll just go first Corinthians six at first one. Does any one of does any one of you, when he has a case against another, dare to be tried before the unrighteous and not before the saints? Or do you not know that the saints will judge the world? If the world is judged by you, are you not worthy to constitute the smallest law courts? So and it's and it says, Do you not know that we are judge we will judge angels? How much more matters of this life? So if you have law courts dealing with matters of this life, Do you appoint those who are of no account in the church as judges? I say this to your shame. It is really this way. There is not one wise man among you who will be able to pass judgment between his brothers. On the contrary, brother is tried with brother, and that before unbelievers. So, you know, basically the whole chapter is lawsuits among believers in first Corinthians six. And I think it's it's really about unity in Christ. Yeah. And so then Paul's saying, like, are you gonna go before a court where somebody's going to judge you who is not a believer and tell you who's right or wrong in this scenario? and I think I think a lot of times we take the easy way out, and that's I don't want to say easy way out, but it's a lot easier than one either just forgiving somebody, even though they haven't asked for it, or having just a real hard conversation. it's It's an interesting thing to consider as a believer, especially a believer in business. But what Paul is talking about is just having enough wisdom and discernment to settle things among brothers instead of bringing it before the courts. speaker-1: Mm. Yeah. And so how how do we I know as a business owner, there's times where legal situations might arise. Mm-hmm. And so from what I'm hearing, Christian to Christian, yeah, hey, don't don't do this. Like we're we're not gonna play that game. Yep. Christian to non Christian, fair game? Like not to say fair game in that way, but like I'm just trying to seek some some clarity on that. speaker-0: Yeah, still a it's always still a hard issue, right? But no, I mean the the legal system, you know, the government rests on Jesus' shoulders and we operate within it and we render unto Caesar what is Caesar's, and so we operate within the laws, out outside of it going against, you know, the the actual word of God. but yeah, I mean, this the Bible is not here not talking about what to do with taking other people to court that are non believers. speaker-1: Mm, yeah. So more fun question is you're in my situation, what do you do? And you've and you have not learned this lesson yet. speaker-0: I'd ha I I don't want to say I'm a lawyer, but it depends. Because I do say that. It would depend on the dollar amount, that relative to where your business is at right now. there's like situational stuff on how how many conversations have you already had with this person, how clear was it in the contract language information? Just like, you know, taking it to the place of of okay. And then also knowing How much time and energy is it going to and money is it going to cost you and the business to engage in this and for what on the other side of it? And is that is that exchange a worthy one? speaker-1: Mm. Sure. speaker-0: Or would it be better for you to go win another client? speaker-1: Got it. Yeah, sure. Okay. Well offline about that. Okay. ARAP. Can you can you give me a rundown of your your philosophies there? speaker-0: Yeah, I mean, i I think this is the one where most people s kind of understand it because most business owners are running based on the cash balances in their checking account. so they know about cash, but they don't really know about AR and AP and they haven't managed it. My philosophy is that, you know, revenue is sanity, revenue is vanity, profit is sanity, and cash is reality. Revenue's sort of irrelevant. It's just like a vanity metric. Profit matters because you need to make money. So it keeps you sane. But cash's reality speaks to the fact that you can be a profitable company who isn't managing your cash flow and die. Even even though you're profitable. It's like, well, why'd your company die? Not because you weren't making profit, because you weren't making profit when you needed to be. You weren't managing the cash. And that is what the AR and AP days are. So philosophically. I am always looking at the average number of days it takes for somebody to pay me and the average number of days it takes for me to pay a bill. And I always want the number of days that people pay me to be smaller than the number of days that it takes me to pay others. When those two numbers are in check that way, you have good cash flow. speaker-1: Mm. And so how what are you what are your numbers? What's the numbers that you've just decided on? speaker-0: Well, it depends. It depends on the business, right? Like when you're in something like software as a service, you get paid instantly. So your AR days are zero. Yeah. So but you might be in another industry where typically you're running net thirty or even net sixty, or maybe you're in big cur government contracts and you set net sixty, but nobody pays you for six months. those days though the number of days are very situational. The question isn't what the days are, the question is how do you move them? Can you can you lever them, lever either one of them to move in the direction you want them to? And how then do you do that? And there's a bunch of different ways to do that. speaker-1: Hm. Are there any good it sounds like the main principle is A or AR shorter than AP. Is there anything else when it comes to that that we should be keeping in mind as we can put up those guardrails? speaker-0: One, you need to look at those numbers. What's measured is improved. So if you just think you know them, that's not good enough. You should be looking at a either monthly or weekly report that shows your average AR days and your average AP days. That's one. And then two is you don't have to set something and forget it when it comes to things like your terms and what you collect on. You can Make changes to that along the way based on what the business needs are currently. So if you're in a situation where you typically run net 30 terms, but you're in a high cash crunch situation, well just offer a much larger quick pay discount so that you can generate cash faster. Cause speaker-1: Mm. speaker-0: you make the rules, right? So, like, hey, Mr. and Mrs. Client, great client who I have, instead of net 30 terms, which you guys have been paying on time, find the people who pay on time and go to them and say, We're in a situation, you know, we're generating more cash right now for the company for some various needs. I'm a I'm offering a 20% quick pay discount right now. If you guys pay this in five days from when the invoice is given to you, I'll give you a 20% discount. Because then that mat and then you do the math, right? If you've got a hundred thousand dollar invoice, giving them twenty grand off might feel like a lot, but having eighty grand 25 days sooner is going to let you survive. speaker-1: Mm, yeah. Yeah. speaker-0: So that's a that's just one that like a very straightforward one that a lot of people don't think about that you can either build that into your standard routine and offer like a small percentage, or you can just use it as, you know, some a tool in your tool belt. speaker-1: Mm. I know you talked about cat from a cash basis. You like to have seven months set aside. Yeah. How did you get to that number? speaker-0: Seven months really just allows you to run at least a two-quarter period plus an additional month with no revenue. And when you look back at situations where we've had kind of like outside of our control, economic disasters. If you had a six-ish month window, a six to twelve month window of cash, you would be able to weather most storms. And so that seven month number, You know, biblically seven is a number that marks completion. and so it it really is it hits the two quarters and then adds a little bit more just to make sure you're in a good position. And then the other thing is that it's still enough to where it not just will help you weather the storm, because the likelihood that you have zero revenue for seven months is very low. but it also gives you a really nice war chest to acquire and buy up distressed companies and assets when things do go wrong. speaker-1: Mm. Mm. You know, one of the other things that you were mentioning was in terms of a line of credit, which takes me to the idea of debt. And so how do you think about debt as an active CEO? speaker-0: I don't like it. speaker-1: Yeah. speaker-0: You know, the rich rules over the poor and the borrower is servant to the lender. So God has a lot to say about debt. And none of it is take debt on. speaker-1: Yeah. speaker-0: Yeah. So you'd be hard pressed to show me a biblical case for taking debt on. speaker-1: Mm, yeah. What if there was no Yeah, I'll I'll stop there. I I was going into like you know, cash intensive businesses and speaker-0: Yeah, I I I think there is Situations in which debt can be reasonable, it's just not the default approach that you would take. speaker-1: Yeah. speaker-0: Right? Like there is more cases from a biblical perspective, by far, telling you to avoid debt than telling you to take it on. So, but like in situations, for example, you know, like people who are buying a house. Like, is it reasonable to take on a mortgage? I do think it's reasonable. Is it if you're in a business where it's high capex because you're buying you know big buildings, is it reasonable to take on debt? I do think it's reasonable. Can debt be an instrument that you use to, you know, lever against secured assets to multiply? Sure. the position that I take is that I don't like to run companies with debt because it creates. a level of freedom, that when you have debt you you just you can't. speaker-1: Yeah. Yeah. No, I love it, man. Is there anything else from a financial standpoint that we've been talking around but maybe haven't gone down yet? speaker-0: I mean the only other aspect I would say from a finance perspective is the the other big one that most business owners face, which is that I see the most common, which is that they don't actually reconcile and close their books every month. And they only do it come tax time speaker-1: Mm. speaker-0: or when they're looking to get a loan. speaker-1: Yeah, yeah. speaker-0: Go the bank and they're like, we need updated financials. They're cool, I'll pull it down. Here it is. And they have no idea if it's good or not. They just know generally, maybe that it's okay and that it's up to date. so another big aspect of what I call the net seven method is to close your books within seven days. So you need to have a reconciled profit and loss and balance sheet every month within a week after the month ends. And it's not just about having the report done, but it's about actually understanding it. And being able to read it and knowing what it means and taking the time to, you know, I mean, gosh, we have such amazing tools now. You could you could drop your PL into chat and say, Hey, can you walk me through how to read this? I've never seen one before. Walk me through 101 and it'll give you some really great, you know, starting points. But really closing so it's it's seven months of operating cash reserve, it's managing your AR and AP, your cash flow, and then it's closing your books within seven days after the end of the month. speaker-1: Yeah. How did you get to those three? speaker-0: They're kind of the three things that they're they're intertwined. So when I look at businesses or even businesses that I coach, there are the three places that businesses struggle the most. But there are the three places that can create the most clarity, peace, and diligence in the business. Managing your cash flow well. Making sure you have reserves and you're not just constantly spending what comes in and sending it back out the other side and then, you know, actually looking at your financials and understanding what all of it means. Because many people get taken advantage of because of one of those three things. Like the the the especially the cl not closing your books, that's a great way to get taken advantage of. And people can hide things on a balance sheet and expenses can be there are things you're going to miss. I mean think of it like we live now in a day and age where people have so many transactions that they don't even know what's happening in their bank account anymore. So there could definitely be an eight dollar charge in your bank account that's been happening for the last three years and you have no idea speaker-1: Mm. speaker-0: how much more in your business that you're stewarding are their risks. And so I think landing on those three, it just It puts every business owner in a place where they understand the economics of their business, which is what all external parties, if you ever look to sell it or get acquired, are going to look at first. valuation of your business first. Cash is how you make sure you can actually survive and provide a place for people to, you know, really feel stable. And reserve creates a storing up to be prepared for what you don't know. speaker-1: Yeah. speaker-0: Things that you don't know are coming. speaker-1: That's awesome, man. I feel like of from an entrepreneurial standpoint, growth and ops is easy and finance is hard. it's I'm sure you're seeing it more than I am from a coaching standpoint. but I feel like it's the language I'm least versed in. speaker-0: Well, you are you're uniquely positioned because you also understand marketing. I would say that's the other one that is kind of the for most business owners, there's really two things I would tell you that most of them feel like I don't know. Yeah. Three now. AI. speaker-1: Yeah. speaker-0: But but more universal than AI. Let's just call it technology, finance, and marketing. speaker-1: Yeah. speaker-0: Right? Because marketing feels very aloof. It that gap is being, you know, bridged, but it's kind of weird because marketing is one of those ones that they feel like they can take more risks on with like ChatGPT creating a flyer for them, but they're not going to take the same risks on the finance side. There's too much to stake. But no, most small business owners start and get really good at two things. They know how to sell their product, not market it. They know how to sell it and they know how to fulfill it. They know how to ship it. So they can c they can give you something, they can collect your money and they know how to get it in your in your hands. Outside of that, it's like, well, I don't know what business is, right? Like this is not a business. It's just me selling stuff. And that's the difference also between kind of that one man band selling a product and somebody who's building an actual business that is that they're stewarding that other people could come in and run. speaker-1: Yeah, yeah. That's a great point, man. thanks for giving a little bit of education in terms of the language that I know the least when it comes to those three domains of growth, options and finance. And I feel like I'm walking away with some some good thoughts and good ideas of how I need to be growing and what I need to be learning. speaker-0: Amen to that. speaker-1: Come on. Thanks, man.