Latest / Cleaning Business Life / The Company Needs Protection From You | Ep. 209

Transcript

The Company Needs Protection From You | Ep. 209 · Cleaning Business Life

• 1:00
  SPEAKER_00: All right.
• 1:01
  SPEAKER_00: Last minute decision to move my chair.
• 1:04
  SPEAKER_00: Welcome back, everyone.
• 1:05
  SPEAKER_00: This is Shani Miller with Cleaning Business Life, and I am your host today.
• 1:08
  SPEAKER_00: And today we are going to talk about how the company needs protection from you.
• 1:14
  SPEAKER_00: I was actually listening to a talk.
• 1:16
  SPEAKER_00: I finally made it to one of Libby's talks.
• 1:19
  SPEAKER_00: And she said something that kind of stopped me in my tracks.
• 1:21
  SPEAKER_00: She basically said that the company needs protection from you.
• 1:26
  SPEAKER_00: As you grow in scale, you have to make decisions to not be your own bottleneck.
• 1:32
  SPEAKER_00: But most importantly, she went on this whole story about how her company pays all of the bills for her.
• 1:38
  SPEAKER_00: She no longer has access to an ATM card.
• 1:43
  SPEAKER_00: She no longer has access to the money because what was happening is that Libby was going on a retreat or Libby was going on a trip over here.
• 1:52
  SPEAKER_00: And it was almost, I don't want to say bankrupting, but it was causing havoc in the financial situation of her business.
• 2:01
  SPEAKER_00: And so one of the biggest threats you can have isn't your competitors.
• 2:10
  SPEAKER_00: It's not the economy.
• 2:15
  SPEAKER_00: And it was so profound.
• 2:17
  SPEAKER_00: So thank you, Libby, to have someone bring this up that hasn't been addressed in a very long time.
• 2:25
  SPEAKER_00: She said that basically systems, we we practice what we preach, right?
• 2:29
  SPEAKER_00: Basically, systems don't just protect the business from the employees.
• 2:31
  SPEAKER_00: Sometimes they protect the business from the owner.
• 2:35
  SPEAKER_00: And the more I thought about it, the more I realized how true that is.
• 2:39
  SPEAKER_00: Does your business, as you grow on account, need protection from you?
• 2:43
  SPEAKER_00: Do you have impulse issues where you're like, okay, I'm gonna buy this right here without checking your account or checking in with somebody and you made a large purchase and you thought payroll had gone through and it hadn't gone through?
• 2:57
  SPEAKER_00: So as and we have to remember too that as entrepreneurs, we're hardwired for action, right?
• 3:04
  SPEAKER_00: We're hardwired to take action and more action, even more action.
• 3:10
  SPEAKER_00: And that's one of the reasons why we started businesses in the first place.
• 3:14
  SPEAKER_00: We're good at taking action.
• 3:15
  SPEAKER_00: Like you can see tunnel vision at the end of the tunnel, you see where the end result is.
• 3:20
  SPEAKER_00: We see a problem, right?
• 3:22
  SPEAKER_00: And we solve it, we see an opportunity, we jump on it, and we see things that need attention, right?
• 3:31
  SPEAKER_00: So we're here to solve problems.
• 3:33
  SPEAKER_00: That's basically we're we're very sophisticated problem solvers, either by default or because intentional.
• 3:40
  SPEAKER_00: We handle it.
• 3:40
  SPEAKER_00: The problem is that founder instincts that are incredibly useful in the beginning of your business.
• 3:47
  SPEAKER_00: But as you scale and grow and you get to a certain plateau and then you start to grow and scale again, are you are you buying, are you commingling your accounts?
• 3:56
  SPEAKER_00: Are you buying groceries with your business account?
• 3:58
  SPEAKER_00: Are you buying Starbucks for everyone inside of Starbucks with your business account because you were at a chamber meeting and you felt very generous and charitable, right?
• 4:07
  SPEAKER_00: And sometimes those instincts can be liabilities.
• 4:13
  SPEAKER_00: And you don't want to have liabilities in your business.
• 4:16
  SPEAKER_00: You want to have smooth sailing, right?
• 4:18
  SPEAKER_00: Smooth running chips.
• 4:19
  SPEAKER_00: You hear me talk about it all the time.
• 4:20
  SPEAKER_00: And this includes you.
• 4:24
  SPEAKER_00: And most business owners are logical thinkers.
• 4:27
  SPEAKER_00: We're not like, hey, I'm gonna buy these whatever the hot gene is, or I'm gonna buy a new outfit, or I'm gonna do all this wild stuff.
• 4:37
  SPEAKER_00: I think that we make a lot of emotional decisions, right?
• 4:40
  SPEAKER_00: And I talk a lot about how every time I make an emotionally based decision on hiring or not hiring, or for the business, or not for the business, or for me, or for whatever, I end up paying for it.
• 4:52
  SPEAKER_00: Not even, well, I end up paying for it emotionally, but I also end up paying for it monetarily.
• 5:00
  SPEAKER_00: And that's an important distinction because it you're making a decision because you feel sorry for one.
• 5:07
  SPEAKER_00: You're making a decision because you want to help someone out of a tight spot.
• 5:10
  SPEAKER_00: You're making a decision to loan somebody something.
• 5:13
  SPEAKER_00: I saw that on Facebook the other day.
• 5:15
  SPEAKER_00: Someone loaned a person 100 grand, ended up going to court winning, and then not seeing a dime.
• 5:20
  SPEAKER_00: I've gone to court where I've sued an employee before for a breach of contract, and I won, but I I lost the money.
• 5:27
  SPEAKER_00: I never saw she always was never able to collect payment.
• 5:31
  SPEAKER_00: So we typically will discount, we don't want to have conflicts.
• 5:36
  SPEAKER_00: I'm reading from my notes here, and we don't want to listen to a bad client.
• 5:41
  SPEAKER_00: And there are unfortunately bad clients out there in every industry.
• 5:46
  SPEAKER_00: We also worry that people won't like us, right?
• 5:49
  SPEAKER_00: So we avoid raising prices.
• 5:52
  SPEAKER_00: And none of those are really big business decisions, they're small business decisions, but all of those compound over time and become big issues.
• 6:03
  SPEAKER_00: When you're looking at your bank account, the report looks really pretty when you get your weekly report.
• 6:08
  SPEAKER_00: But then when you look when you check the business account, there's no money in there.
• 6:14
  SPEAKER_00: So those emotional decisions can have huge price tags.
• 6:18
  SPEAKER_00: Once you start to correlate and add the two, when you get into the cycle of checking your reports once a week, it can be a big deal.
• 6:25
  SPEAKER_00: And sometimes you won't even see it right away.
• 6:27
  SPEAKER_00: You won't see it until later, a few months later, or a few weeks later, or six months later.
• 6:33
  SPEAKER_00: And you'd be like, where did all the money go?
• 6:35
  SPEAKER_00: I know I pulled in, you know, 250K.
• 6:37
  SPEAKER_00: Where's that money?
• 6:38
  SPEAKER_00: Where did it all go?
• 6:40
  SPEAKER_00: Right.
• 6:41
  SPEAKER_00: And you can also inadvertently cause people to give out too many discounts.
• 6:49
  SPEAKER_00: I gave an example the other day on Facebook about how a 10% discount is not really 10%, it's actually 40% right off the top of your profit.
• 6:57
  SPEAKER_00: And you know, and then there's gross and net numbers, and we won't get into all the complications of that.
• 7:02
  SPEAKER_00: But giving too many discounts can cause you to be sheltered from the business because you're like, oh, just give everybody a discount, fill up a schedule, right?
• 7:11
  SPEAKER_00: You don't want to give everyone a discount to fill up a schedule.
• 7:14
  SPEAKER_00: You want to make sure that you're meeting in the middle somewhere that you're not giving a discount unless you absolutely have to.
• 7:19
  SPEAKER_00: I know that there are people who will fight me on this.
• 7:23
  SPEAKER_00: And I'm not a big advocate about discounts.
• 7:26
  SPEAKER_00: Unless I absolutely have to give a discount, then I will, and only then will I give a discount.
• 7:31
  SPEAKER_00: I don't give out military discounts, mommy discounts, senior discounts, just because discounts, it costs a lot of money to run a legitimate business.
• 7:40
  SPEAKER_00: So then you just make one bad decision, then you make another bad decision, then you make another bad decision.
• 7:49
  SPEAKER_00: And then you have, then you'll end up with like two clients, right?
• 7:54
  SPEAKER_00: They're maybe in the same neighborhood, maybe they're in the next neighborhood over, but they're the exact same size.
• 7:59
  SPEAKER_00: And one of them you're making 50 bucks off of, and another one you're making a hundred bucks off of because this person never got removed from their discount because you felt inclined to give them a discount just because, right?
• 8:11
  SPEAKER_00: So nobody knows what the actual pricing is unless you break it down.
• 8:15
  SPEAKER_00: Hence the reason why I'm doing the cohorts with the pricing accelerator.
• 8:19
  SPEAKER_00: So not your office, not the cleaners, not even you.
• 8:22
  SPEAKER_00: Because the business becomes harder to manage if the owner keeps changing the rules.
• 8:26
  SPEAKER_00: So come up with a system, make the system work.
• 8:28
  SPEAKER_00: If it needs tweaking, tweak it, but don't just keep tweaking it because it's convenient for you and it works better in your favor.
• 8:34
  SPEAKER_00: I've seen that plenty of times.
• 8:38
  SPEAKER_00: And then sometimes we'll change the rules midstream.
• 8:42
  SPEAKER_00: This can happen for a lot of reasons.
• 8:45
  SPEAKER_00: One reason is maybe the system that you thought was going to be this great thing sucked.
• 8:49
  SPEAKER_00: And then you're like, okay, we can't do this anymore because it sucked.
• 8:51
  SPEAKER_00: Oftentimes systems change when you have a bad experience with a customer or a bad experience with a cleaning tech that causes people to pivot, right?
• 8:59
  SPEAKER_00: It depending on how much money you bled out will depend on how incremental and how quickly and swiftly you you make that decision, right?
• 9:09
  SPEAKER_00: If you only ate 20 bucks, that might not be as impactful if you ate 2,000 bucks, right?
• 9:14
  SPEAKER_00: So you create a policy, you make an exception for the one person.
• 9:18
  SPEAKER_00: I've I'm guilty of this too.
• 9:20
  SPEAKER_00: Shannon said this, and they're like, oh, okay, Shannon said this.
• 9:23
  SPEAKER_00: We're gonna give her the$300 discount every single time.
• 9:26
  SPEAKER_00: When in actuality, that's not what I said.
• 9:28
  SPEAKER_00: Someone misheard it.
• 9:28
  SPEAKER_00: I didn't write it down or I didn't put the book wherever and lost in translation, right?
• 9:35
  SPEAKER_00: So you make the exception, you create a boundary, then you ignore the boundary.
• 9:39
  SPEAKER_00: I'm guilty of this myself.
• 9:41
  SPEAKER_00: Then you're gonna be like, no, no, no, I don't like this at all.
• 9:43
  SPEAKER_00: Let's come up with something different.
• 9:45
  SPEAKER_00: Welcome to the world of entrepreneurs.
• 9:49
  SPEAKER_00: So eventually people stop trusting the system.
• 9:51
  SPEAKER_00: They're like, well, is Shannon going to change your mind?
• 9:53
  SPEAKER_00: Shannon not gonna change your mind?
• 9:55
  SPEAKER_00: Because they will learn if they wait long enough, you'll change your mind, or I'll change my mind.
• 10:01
  SPEAKER_00: And then so nobody wants to ask anything because it you've just ruined the trust that you worked so hard to create.
• 10:08
  SPEAKER_00: And then the confusion creates chaos, and creo chaos is what?
• 10:12
  SPEAKER_00: Expensive.
• 10:14
  SPEAKER_00: You hear me say it all of the time.
• 10:18
  SPEAKER_00: It costs time, money, energy, rework, free work, misunderstandings.
• 10:25
  SPEAKER_00: It creates frustration for your team, for the clients.
• 10:29
  SPEAKER_00: Most owners think that they're just being flexible when in actuality they're creating uncertainty and they're diminishing what trust they have.
• 10:37
  SPEAKER_00: The exception, every exception requires someone to remember it.
• 10:41
  SPEAKER_00: So getting the things out of your head onto the paper becomes an SOP.
• 10:45
  SPEAKER_00: And then they don't have to keep asking Shannon 50 times a day, hey, I have this client who's asking for this discount.
• 10:51
  SPEAKER_00: The answer is read the SOP.
• 10:53
  SPEAKER_00: Nope, I'm sorry, where there's no discount given this time.
• 10:56
  SPEAKER_00: And then eventually they'll stop asking because we treat everyone like parrots.
• 11:01
  SPEAKER_00: Polly wants a cracker, Polly wants a cracker, Polly wants a cracker.
• 11:04
  SPEAKER_00: So, and then you have to remember too that every broken process creates more work later for you.
• 11:10
  SPEAKER_00: So you either make it, you either suck it up and spend the extra time the first time, or you suck it up at the end when you're super slammed and you have all these deadlines.
• 11:19
  SPEAKER_00: So it's there's no mediation between that.
• 11:22
  SPEAKER_00: It's just what it is, right?
• 11:23
  SPEAKER_00: And then it will, if you don't fix it, it will arrive in your lap months later.
• 11:30
  SPEAKER_00: And this is the most, and systems really do create freedom.
• 11:33
  SPEAKER_00: I did a whole podcast on this a couple months back, you can check it out.
• 11:38
  SPEAKER_00: And that's the part that people get backwards most of the time.
• 11:42
  SPEAKER_00: Systems don't restrict freedom, they create it.
• 11:46
  SPEAKER_00: So if you have a policy in place on what the steps are for hiring a cleaning tech, whether that's a 1099 or a W 2, there are systems in place.
• 11:56
  SPEAKER_00: There's a protocol you have to follow.
• 11:58
  SPEAKER_00: There's a checklist.
• 11:58
  SPEAKER_00: Boom, boom, boom, boom.
• 12:00
  SPEAKER_00: If you don't follow the checklist for a W-2 and you didn't get their social security card and you get audited, they're gonna say, where's the social security card?
• 12:08
  SPEAKER_00: And then you're gonna scramble around asking that W 2, hey, I need a copy of your social security card.
• 12:14
  SPEAKER_00: In the meantime, they've lost it, got married, got divorced, changed their name, had kids, done whatever.
• 12:19
  SPEAKER_00: They can't find their social security card.
• 12:21
  SPEAKER_00: And the guy who's auditing you is like, fine.
• 12:26
  SPEAKER_00: Right?
• 12:26
  SPEAKER_00: Where if you had had your systems in place, that wouldn't have been an issue, right?
• 12:30
  SPEAKER_00: Because you would have checked the box, okay, social security card, driver's license, proof of insurance on your vehicle, or whatever you're doing for vehicles in your company.
• 12:38
  SPEAKER_00: So when policies are clear, employees perform better because they know what the boundaries are.
• 12:42
  SPEAKER_00: They're not guessing.
• 12:45
  SPEAKER_00: And when expectations are documented, training becomes easier, shorter, costs less money because it's just cut and dry.
• 12:51
  SPEAKER_00: And processes are repeatable.
• 12:53
  SPEAKER_00: That's the most important part.
• 12:54
  SPEAKER_00: I often mention McDonald's.
• 12:57
  SPEAKER_00: Every McDonald's so far today, because AI is taking over, can work every position in the house.
• 13:03
  SPEAKER_00: As they start to eliminate employees, there's going to be AI that takes in.
• 13:09
  SPEAKER_00: And that'll be a different scenario.
• 13:12
  SPEAKER_00: But for the most part, McDonald's, every position in McDonald's can be worked by somebody else.
• 13:17
  SPEAKER_00: So that's a repeatable process.
• 13:20
  SPEAKER_00: The goal isn't to build a company that depends on you, because if not, you'll just have a J-O-B.
• 13:25
  SPEAKER_00: The goal to build a company is that functions when you're not there, to become an absentee owner.
• 13:32
  SPEAKER_00: And the longer I've been in business, the more I've realized the company just doesn't need protection from bad customers.
• 13:44
  SPEAKER_00: It doesn't need protection from bad employees.
• 13:49
  SPEAKER_00: It needs protection from the owner.
• 13:51
  SPEAKER_00: Because if it's Janin, we'll just go on a retreat, right?
• 13:55
  SPEAKER_00: Because owners are emotional.
• 13:57
  SPEAKER_00: We are thinking about all of these things.
• 14:00
  SPEAKER_00: Owners are impulsive, they make exceptions, they make up, they break their own rules.
• 14:05
  SPEAKER_00: And that's exactly what good systems matter, right?
• 14:09
  SPEAKER_00: Not because the team needs them, because sometimes you, as the owner, need them.
• 14:14
  SPEAKER_00: That's a lesson I think every business owner needs to hear.
• 14:18
  SPEAKER_00: I look forward to your comments.
• 14:21
  SPEAKER_00: Don't forget to like and subscribe if you're watching this on YouTube.
• 14:25
  SPEAKER_00: And don't forget to share this episode with another cleaning business owner because you never know who might benefit from it.
• 14:31
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• 14:33
  SPEAKER_00: It tells the algorithm gods that we are worthy and it will start to recommend us more.
• 14:39
  SPEAKER_00: Again, you guys take care of the