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Applying Business Metrics into Planning with Joe Kozubowski · Budget Your Business

• 0:00
  Scott: Hello, and welcome to Budget Your Business, the podcast for small business owners who want to learn how to financially plan for every aspect of their business.
• 0:10
  Scott: I'm your host, Scott Geller.
• 0:13
  Scott: Today I'm joined by Joe Kozabowski of EOS Worldwide to talk about using business metrics in your planning.
• 0:21
  Scott: Hello, Joe.
• 0:23
  SPEAKER_00: Hey Scott.
• 0:24
  SPEAKER_00: Thanks for having me.
• 0:25
  SPEAKER_00: I appreciate it.
• 0:26
  Scott: Yeah, great, great to have you on here.
• 0:28
  Scott: For folks who are meeting you for the first time, could you share a little bit about who you are and what you do?
• 0:34
  SPEAKER_00: Sure.
• 0:35
  SPEAKER_00: Actually, I'm an EOS implementer.
• 0:37
  SPEAKER_00: I help owners get what they want out of their businesses by giving them a complete system of proven practical tools that allow them to do three things we call vision, traction healthy.
• 0:48
  SPEAKER_00: So I work with the leadership team to make sure that their vision is 100% clear and everybody's on the same page.
• 0:54
  SPEAKER_00: Work with them developing discipline and accountability with traction.
• 0:58
  SPEAKER_00: And then I work with them to make sure that they're healthy, cohesive, and functioning because oftentimes they're not.
• 1:02
  SPEAKER_00: And what with what we find, Scott, is as goes that leadership team, so goes the rest of the organization.
• 1:06
  SPEAKER_00: Everybody's crystal clear with where they're going, how they're going to get there, and actually execute with discipline and accountability on those divisions, and then advancing as a healthy, cohesive, fun team.
• 1:19
  Scott: Okay, great.
• 1:20
  Scott: If um, correct me if I'm wrong, but having metrics around that, that's a big part of it too, is that right?
• 1:26
  SPEAKER_00: That is, yeah.
• 1:27
  SPEAKER_00: One of the key components.
• 1:28
  SPEAKER_00: So the the goal of any organization is to get strong or what we call, you know, really good at the six key components, which is your vision, which is where you're going and how you're going to get there.
• 1:38
  SPEAKER_00: The people, which is right people, right seats, data, which is your data component, right?
• 1:42
  SPEAKER_00: And we'll we'll dive into that a little bit more here.
• 1:44
  SPEAKER_00: Also, issues, right?
• 1:46
  SPEAKER_00: At the end of the day, every company has issues.
• 1:47
  SPEAKER_00: It's really about understanding and becoming very comfortable, recognizing your issues and solving them to make sure they go away forever.
• 1:54
  SPEAKER_00: And then really identifying your processes, right?
• 1:57
  SPEAKER_00: Which is the most important things in your business, make sure they're done the same way every time.
• 2:00
  SPEAKER_00: And the last thing is actually traction.
• 2:02
  SPEAKER_00: If you think about it, most visions are never materialized in a lot of small businesses because there's never traction gained in the in the business.
• 2:09
  SPEAKER_00: And that's really about more creating accountability and discipline throughout the organization that allows that vision to materialize.
• 2:16
  Scott: Okay, great.
• 2:17
  Scott: Well, today I we're I was hoping to kind of focus on that metric piece and how do we get that in the planning process?
• 2:25
  Scott: And you you touched on it, you mentioned that the data component, but just generally, what do you what are business metrics?
• 2:32
  SPEAKER_00: Yeah, so in our world, we actually want owners to realize that their business isn't about looking at financials in the rearview mirror.
• 2:40
  SPEAKER_00: We want them to look at what activities need to happen on a weekly basis for them to actually foretell their financial future.
• 2:48
  SPEAKER_00: And we leverage that.
• 2:49
  SPEAKER_00: And if you think about it, a lot of businesses, especially small businesses, maybe run on gut feel or egos or subjective emotions.
• 2:56
  SPEAKER_00: We kind of want to remove that and actually run it on hard facts and data, right?
• 3:00
  SPEAKER_00: Facts and figures, right?
• 3:02
  SPEAKER_00: And the idea there is that we actually work with our clients to create a scorecard.
• 3:06
  SPEAKER_00: And the scorecard is actually activity-based.
• 3:09
  SPEAKER_00: So what has to happen on a weekly basis for the company to meet their weekly goals.
• 3:14
  SPEAKER_00: And the idea there is that kind of think of a the best analogy that I have is if you're driving your car, this is the windshield of your car.
• 3:22
  SPEAKER_00: You want to make sure that you're looking through the windshield, is what has to happen.
• 3:26
  SPEAKER_00: And also, if you look at it, it's a kind of like a GPS system, too, right?
• 3:28
  SPEAKER_00: If you're not using a GPS to get where you want to go, you don't know if you're gonna arrive and get there on time, right?
• 3:33
  SPEAKER_00: So the scorecard kind of provides a GPS monitor to say, hey, I'm on the right track.
• 3:38
  SPEAKER_00: If I do these things on a weekly basis, we're actually going to meet our numbers.
• 3:42
  SPEAKER_00: The challenge is that most organizations look at the rear view mirror.
• 3:46
  SPEAKER_00: And if you look at the rearview mirror of any car for a extended period of time, you're gonna crash the car, right?
• 3:51
  SPEAKER_00: That's something we try to avoid.
• 3:52
  SPEAKER_00: And the idea there is that if the scorecard is actually done at the leadership team level, and then every department team has a scorecard, and then everybody has what we call measurables, which is a little bit different.
• 4:04
  SPEAKER_00: So everybody has at least one, two or three measurable, that allows them to understand how they play a role in the company succeeding.
• 4:11
  SPEAKER_00: So it's not just a person or a couple people that are driving the numbers, it's really about everybody.
• 4:16
  SPEAKER_00: So if there's 80 people in the company or 40 people in the company, all 40 people know what they need to do on a weekly basis to help the company succeed.
• 4:23
  SPEAKER_00: So it doesn't matter where you're at, it's about really about understanding what you need to do.
• 4:27
  SPEAKER_00: And in the simplest terms is that even if you have a receptionist, which is not common these days in a lot of businesses, but their number may be two.
• 4:35
  SPEAKER_00: They're measurable, right?
• 4:35
  SPEAKER_00: They need to answer the phone by the second ring.
• 4:38
  SPEAKER_00: But that allows them to actually make sure that they maintain a customer service element that is consistent with what their persona and their brand is.
• 4:46
  Scott: And do you can do you consider it a measurable and a metric synonymous or so or do you consider those the same thing?
• 4:55
  SPEAKER_00: Not really.
• 4:55
  SPEAKER_00: Well, it could be, yeah.
• 4:56
  SPEAKER_00: So at the end of the day, we look at metrics.
• 4:59
  SPEAKER_00: Again, it depends.
• 5:00
  SPEAKER_00: We try to get them to make sure that they're activity-based that advance the business forward.
• 5:06
  SPEAKER_00: So at the end of the day, it's it's it's about understanding if I have a sales organization, how many proposals do I need to send out based upon a 50% close ratio to book as many proposals as I need to to grow the business and meet our numbers.
• 5:20
  SPEAKER_00: And the idea there is that if you track that consistently, and what we do is we do it weekly, which is different, right?
• 5:27
  SPEAKER_00: So a lot of companies look at monthly numbers, right?
• 5:30
  SPEAKER_00: And monthly numbers give you kind of a good sense, but you only have kind of 11 months to potentially course correct.
• 5:38
  SPEAKER_00: You know, if you look at it weekly and you look at it at 13 weeks at a glance, you can really have a lot of time to course correct.
• 5:45
  SPEAKER_00: So having that course correction, when you're looking at the numbers, it's extremely valuable uh to adjust.
• 5:51
  SPEAKER_00: So if you see something that's off track, you can work with the team and actually identify what the root cause of that issue is and solve it to make sure that it goes away and put it back on track.
• 6:01
  Scott: So what if what if I don't have maybe the information to look at it weekly?
• 6:08
  Scott: How do you approach that situation?
• 6:10
  SPEAKER_00: Yeah, it's a great question.
• 6:11
  SPEAKER_00: It happens a lot because a lot of companies don't actually have the data.
• 6:15
  SPEAKER_00: We ask them to start.
• 6:16
  SPEAKER_00: What data do you have?
• 6:17
  SPEAKER_00: Can you get the data?
• 6:19
  SPEAKER_00: And really it's a starting point, right?
• 6:21
  SPEAKER_00: I have a lot of clients that I work with that it takes like six to nine months for them to feel comfortable with the score of cards because it's typically a new approach, right?
• 6:29
  SPEAKER_00: They're not running their business that way.
• 6:31
  SPEAKER_00: So when you give them a new approach, they're like, oh my God, we're not set up that way.
• 6:35
  SPEAKER_00: The goal is actually to continue to make progress with the financial people to get the weekly numbers.
• 6:41
  SPEAKER_00: So, what can you get?
• 6:42
  SPEAKER_00: What do you want to see?
• 6:44
  SPEAKER_00: And again, it's kind of like what do you want to see if you were on an island, you know, in the Bahamas somewhere with a cold beverage, you know, the cabana person brings you a cold beverage.
• 6:53
  SPEAKER_00: What do you want to see to make sure that your business is being run correctly?
• 6:56
  SPEAKER_00: Right?
• 6:57
  SPEAKER_00: That's kind of the goal is to kind of give them that approach.
• 6:59
  SPEAKER_00: And it does take time.
• 7:02
  SPEAKER_00: Obviously, a lot of financial packages aren't necessarily set up that way.
• 7:05
  SPEAKER_00: It's really about saying, hey, what do I want to see?
• 7:07
  SPEAKER_00: And then how do I work backwards to make sure that I can get it on a weekly basis?
• 7:10
  SPEAKER_00: So it does take time, it evolves.
• 7:12
  SPEAKER_00: If it's a very important number, then you got to get it, right?
• 7:15
  SPEAKER_00: And I feel you got to retool your systems to get it that way.
• 7:18
  SPEAKER_00: And because it's not done that way typically, it does take time to get it into that format for sure.
• 7:25
  SPEAKER_00: Okay.
• 7:27
  Scott: So maybe can you walk us through the process of coming up with what those metrics are?
• 7:33
  Scott: Like how do I figure out what those metrics are for my business?
• 7:36
  Scott: And I'm sure it's different for everywhere, but yeah, it's different.
• 7:39
  SPEAKER_00: Yeah.
• 7:39
  SPEAKER_00: So the idea here is that because we want to foretell our financial future, right?
• 7:43
  SPEAKER_00: And just to give you a sense, Scott, we actually create a 90-day world that we we kind of put our customers in, right?
• 7:49
  SPEAKER_00: And our clients.
• 7:50
  SPEAKER_00: And we want them to actually, every 90 days, kind of get a sense of how to work on the business, right?
• 7:56
  SPEAKER_00: Most small businesses work in the business, right?
• 7:59
  SPEAKER_00: So the idea here is we want them to take 90 days and work on the business.
• 8:03
  SPEAKER_00: And about every, you know, if you look at a 90-day period, it's not very long, but usually about the 85th day, everything starts to fray.
• 8:10
  SPEAKER_00: Everybody starts going their own way, things get a little bit off track.
• 8:12
  SPEAKER_00: So we want to create that 90-day environment where every 90 days the leadership team gets together to work on their business.
• 8:18
  SPEAKER_00: And what they're going to do is they're going to look back at the last quarter, see how they did, kind of reset your vision to make sure they were still on the same page, and then set rocks, which we call priorities for the business for the next quarter, and then go back into business and execute.
• 8:30
  SPEAKER_00: And the idea behind that is that that creates a very fundamental way of managing your business that allows you to get in the cadence of always looking at things every 90 days.
• 8:44
  SPEAKER_00: Now, the beauty of the way that we set this up typically is that it's no different than what I talked about with a cabana boy or girl bringing you a frosty beverage and a piece of paper.
• 8:52
  SPEAKER_00: So the question is, what do you want to see from the island?
• 8:55
  SPEAKER_00: If you were on vacation for an extended period of time and you wanted to see how your business was running and actually performing to meet its numbers, what do you want to see?
• 9:05
  SPEAKER_00: What do you want to see from the island?
• 9:07
  SPEAKER_00: And if you ask yourself that question, you're saying, okay, if I saw these five numbers, right, it should be five to fifteen, no more than 15.
• 9:15
  SPEAKER_00: And the idea there is if you saw those numbers, you know that you can rest on your vacation that your business is going to meet its financial future, right?
• 9:23
  SPEAKER_00: That's the key.
• 9:25
  SPEAKER_00: Again, it does take time to think about it.
• 9:27
  SPEAKER_00: A lot of times nobody's looking at an activity-based, they're looking at, well, how much revenue do we do?
• 9:33
  SPEAKER_00: The question is, how much revenue can we do if we do these things the right way?
• 9:37
  SPEAKER_00: Right, right.
• 9:39
  SPEAKER_00: That's the most important time, and that's really a shift in mindset, Scott, because a lot of owners they don't really understand that it's a numbers game.
• 9:46
  SPEAKER_00: And it's a in it's and I say this, this is something that I'll throw out Austin Mast, who's one of our EOS implementers.
• 9:53
  SPEAKER_00: Success loves discipline.
• 9:55
  SPEAKER_00: Right.
• 9:55
  SPEAKER_00: And at the end of the day, you have to have discipline to gain your success.
• 10:00
  SPEAKER_00: And the discipline comes from doing things very, very routine and very consistently throughout the process.
• 10:05
  SPEAKER_00: It's not uncommon for a lot of US companies at some point to take what they've done in a year and start doing that in a quarter because they haven't mastered as to what they need to do.
• 10:14
  SPEAKER_00: So it becomes very uh competitive to the success that's drawn from looking at the numbers a certain way.
• 10:22
  SPEAKER_00: Okay.
• 10:24
  Scott: So you know, sometimes I hear it's a little bit of a check in or the egg where do I need to come up with metrics?
• 10:31
  Scott: Do I come up with a and and then apply a plan, or do I come up with a plan and then I come up with the metrics?
• 10:38
  Scott: Do you recommend one or the other, or or maybe in parallel?
• 10:42
  SPEAKER_00: Yeah, that's a great question.
• 10:43
  SPEAKER_00: So we actually, when we work through it, we're actually working with the clients to get them all on the same page with eight questions.
• 10:50
  SPEAKER_00: Okay.
• 10:50
  SPEAKER_00: And then we call that the vision traction organizer.
• 10:53
  SPEAKER_00: Those eight questions are what's your core values, what's your core focus, what's your ten-year target, right?
• 10:58
  SPEAKER_00: What you want long-term from your business, what's your marketing strategy, which is what you how you're going to get to that 10-year target, right?
• 11:05
  SPEAKER_00: What are you going to do and who you're going to target?
• 11:08
  SPEAKER_00: And then what's your three-year picture?
• 11:09
  SPEAKER_00: The three-year picture is kind of the lens of saying, hey, where do we need to be three years from now to get to our 10-year target?
• 11:15
  SPEAKER_00: Then once we identify that, and that's more of a visualization exercise, once we identify that scot, we then boil it down to what's your one-year plan.
• 11:22
  SPEAKER_00: The one-year plan, quite simply, is what's the revenue, profits, and measurables for you to basically build the foundation to get to your 10-year target, right?
• 11:31
  SPEAKER_00: Because you can't start your 10-year target in year nine.
• 11:34
  SPEAKER_00: You really have to start in years one, two, and three to get the compounding effect of that, right?
• 11:39
  SPEAKER_00: So once you identify that one-year plan, we're then going to determine three to seven goals for the company.
• 11:44
  SPEAKER_00: And the three to seven goals, we don't want 23.
• 11:46
  SPEAKER_00: 23 is way too many.
• 11:47
  SPEAKER_00: We really we have a say in NDOS that less is more.
• 11:50
  SPEAKER_00: And the idea is that if we can get three to seven goals for the company, what we're going to do then is we're then going to take that one-year plan and put it into what we call four quarters or what we call ROCs, which is the 90-day world we're trying to create.
• 12:03
  SPEAKER_00: So we're taking that one-year plan and then we're going to chunk it into four quarters.
• 12:07
  SPEAKER_00: So once we get into the four quarters, we're then identify the first quarter.
• 12:11
  SPEAKER_00: Once we do that, Scott, we're then going to then say, okay, if our million, if we need to make a million dollars of revenue, how are we going to do that?
• 12:18
  SPEAKER_00: What activities need to happen to get us to that million dollar revenue figure?
• 12:22
  SPEAKER_00: Okay.
• 12:23
  SPEAKER_00: Is it 20 clients?
• 12:24
  SPEAKER_00: Is it 10 clients?
• 12:26
  SPEAKER_00: Is it one client?
• 12:27
  SPEAKER_00: You know, so the idea there is that once you know your statistics, you're able to build that scorecard of saying what has to happen predictability-wise to make sure that we're going to meet our million dollar revenue figure.
• 12:39
  SPEAKER_00: Well, for me, part of it's going to be the plan first, right?
• 12:42
  SPEAKER_00: To answer your question, and then leverage your metrics or your scorecard to understand what has to happen on a weekly basis to make sure that that million dollars is going to be materialized in that quarter.
• 12:54
  unknown: Okay.
• 12:55
  SPEAKER_00: And then what we'll do is that, like I said, that quarterly world, we're going to get together and say, hey, did we meet the million?
• 13:02
  SPEAKER_00: If we didn't, what happened?
• 13:04
  SPEAKER_00: Why didn't we?
• 13:05
  SPEAKER_00: And then we'll of course correct, right?
• 13:07
  SPEAKER_00: At the end of the day, we teach our clients to uh effectively understand their issues.
• 13:12
  SPEAKER_00: And the way to look at issues, you know, two things happen with issues.
• 13:16
  SPEAKER_00: You address them head on, or you kind of, you know, put them up in a ball and twine and tape and throw them in a corner and hope they go away on their own.
• 13:22
  SPEAKER_00: Right.
• 13:23
  SPEAKER_00: But the idea here is that if you address your issues head on, which which I tell my clients, the issues are things that are holding you back from success.
• 13:30
  SPEAKER_00: The question is then, what do you need to address?
• 13:33
  SPEAKER_00: How do you we call it IDS, which is an issue solving track that we teach that allows them to say, well, what's the issue?
• 13:38
  SPEAKER_00: What's the root of this?
• 13:40
  SPEAKER_00: Now it could be a people issue, it could be a salesperson issue, it could be the type of target that you're going after, maybe some issues with your product.
• 13:48
  SPEAKER_00: But the idea here is that if you can identify the route, then you have the opportunity to discuss it as a group and then potentially solve it to make sure that it goes away forever so that it's not an impediment to your success.
• 13:59
  SPEAKER_00: And that just continues the cycle, right?
• 14:01
  SPEAKER_00: At the end of the day, we we we teach our clients that you created all the great things in your company, but you also created all the issues, right?
• 14:09
  SPEAKER_00: Clients don't give us issues.
• 14:10
  SPEAKER_00: So how do we take that and be responsible as as what we call parents of your organization, right?
• 14:17
  SPEAKER_00: Is how do we be responsible enough to say, okay, we have an issue here, let's solve it and make sure it goes away forever.
• 14:23
  SPEAKER_00: And we're not dealing with it two weeks from now, it goes away forever for what we call the greater good of the organization long term.
• 14:30
  Scott: Okay, great.
• 14:32
  Scott: Yeah, that's so as you're as you're going through those processes with companies, and I'm gonna kind of set this question up a little bit.
• 14:45
  Scott: So a little warning, Joe.
• 14:47
  Scott: The typical budgeting period in big business, and and I think a lot of people hear that, so they think it's it's like this time of year, right?
• 14:55
  Scott: So we're in late October, it's getting towards the end of the year, it's November.
• 15:00
  Scott: I I've got a plan for the next calendar year in October, November, and December.
• 15:06
  Scott: What is your view?
• 15:08
  Scott: What is your perspective or opinion around timing for maybe starting this process?
• 15:13
  Scott: Does it have to be right this late in the year?
• 15:16
  SPEAKER_00: No, not necessarily.
• 15:18
  SPEAKER_00: You know, I think it depends on the team.
• 15:19
  SPEAKER_00: It depends on the type of product and service that they're selling.
• 15:22
  SPEAKER_00: We do a two-day annual session with our clients and do annual planning, right?
• 15:26
  SPEAKER_00: And sometimes it's easy to do that in August, where you're, you know, you're basically anticipating the end of the year.
• 15:34
  SPEAKER_00: And then what happens is that allows you to take more inputs to kind of self-correct until you get into that quarter, right?
• 15:40
  SPEAKER_00: Into the first quarter.
• 15:41
  SPEAKER_00: So that's kind of a way to do it is to kind of have that August, September time frame to where you're doing the two-day annual planning uh under the EOS structure, which is working on team health, kind of tackling your big issues, and then identifying what that plan looks like.
• 15:56
  SPEAKER_00: Because what we'll do in that two two two-day annual is that we're we'll recast your one-year plan, we'll recast your three-year picture, and that tenure target now becomes year nine and year eight.
• 16:07
  SPEAKER_00: So we're always that that goes down while we recast the three-year picture, which obviously needs to look different when you're when you're into the 10-year target for a few years.
• 16:17
  SPEAKER_00: But the idea there is that that whole idea is that if you do it in the August, September time frame, usually one more quarter that you can actually kind of self-adjust and say, hey, you know what, we see better better things happening in 2025, for instance.
• 16:31
  SPEAKER_00: And then that's going to give us the opportunity to kind of take advantage of what the markets hold.
• 16:35
  SPEAKER_00: And we have, you know, and a lot of it, and and I say this with respect to you talk about metrics, you know, a lot of it is really prevalent to one of the bigger key components that we talk about, which is right people, right seats.
• 16:47
  SPEAKER_00: We can talk about metrics, metrics boil down to operations and sales, right?
• 16:51
  SPEAKER_00: And and the idea here is that if you don't have the right people in the right seats, those are things that can hold you back from success.
• 16:58
  SPEAKER_00: So if your salesperson or your salesperson or if it depends on the size of the organization, isn't a hundred percent salesperson, there's a good chance that they're holding you back from success.
• 17:11
  SPEAKER_00: Right.
• 17:12
  SPEAKER_00: And there are a lot of times, as you know, Scott, in small businesses, the founder who started the organization sometimes sits in that seat.
• 17:20
  SPEAKER_00: So the idea here is that can identifying, you know, as as you move in and build your business, when you look at right people, right seats, you definitely have to have both to be successful.
• 17:31
  SPEAKER_00: The challenge is that you really have to take a very introspective look at your sales and operations function when you're not hitting your numbers and really look at the people first.
• 17:40
  SPEAKER_00: Because right, if they're the right people, right seats, that's great.
• 17:42
  SPEAKER_00: Now let's figure out the market and how we take advantage of the market.
• 17:46
  SPEAKER_00: Now, in those eight questions that I talked about, you know, your target market for sales should not be the entire world, right?
• 17:53
  SPEAKER_00: At the end of the day, you shouldn't want every customer or need every customer to be successful.
• 17:57
  SPEAKER_00: So you want to be very understanding as to what your demographic, geographic, and geographic nature of your ideal client is.
• 18:04
  SPEAKER_00: At the same time, you also want to make sure that you have a really good understanding of your three uniques.
• 18:09
  SPEAKER_00: Because your three uniques is actually what separates you from your competition and should be leveraged in the marketplace to really tell customers and clients what why you're different.
• 18:19
  SPEAKER_00: Gotcha.
• 18:20
  SPEAKER_00: And we ask them to do a proven process, which is actually like a one-page visual that the customer can see, you know, you've heard the old adage, you're better off showing somebody something versus telling them, right?
• 18:30
  SPEAKER_00: Here's that the proven process is a one-page visual that would illustrate how the a potential new client starts a relation with you to when they're longtime clients of yours.
• 18:40
  SPEAKER_00: And then the fourth thing we talk about in the marketing strategy is what's your guarantee?
• 18:44
  SPEAKER_00: What are you going to do or say to remove any objections or concerns of wanting to move forward with you?
• 18:49
  SPEAKER_00: And if you can get a guarantee that's pretty solid, like for DOS worldwide, we have a session guarantee.
• 18:57
  SPEAKER_00: If we do a full-day session for a client and they don't get value, they don't pay us.
• 19:02
  SPEAKER_00: And that's a pretty big guarantee now that forces us to be on point, forces to be prepared, forces to provide value before we get anything in return.
• 19:10
  SPEAKER_00: Right.
• 19:11
  SPEAKER_00: So and again, those are things that as you build your business, what are the levers that allow more yeses versus no's, right?
• 19:19
  SPEAKER_00: Which impact sales and can impact your scorecard.
• 19:22
  SPEAKER_00: So those are things that we work with our clients on to say, hey, these are things that can move the needle in a very positive way.
• 19:28
  SPEAKER_00: Gotcha.
• 19:29
  Scott: Okay.
• 19:30
  Scott: Talking about those levers and and as well as the metrics.
• 19:34
  Scott: I like the approach of dedicating time quarterly to looking at that.
• 19:40
  Scott: But as you're looking, let's say your quarters in, you have data to actually look at.
• 19:45
  Scott: How often should a business owner consider changing their metrics or even dropping one altogether?
• 19:52
  SPEAKER_00: I think it's an ongoing process.
• 19:53
  SPEAKER_00: You know, so a couple things.
• 19:55
  SPEAKER_00: One, when you look at a scorecard, in our world, you have a leadership team scorecard, which should be the highest level numbers that you want to see to make sure that things are working the way you want them to.
• 20:04
  SPEAKER_00: But that every team, every department should have their own scorecard.
• 20:07
  SPEAKER_00: So there are times when it may be a metric that starts at the leadership team level that then is given to a team to review.
• 20:13
  SPEAKER_00: At the end of the day, the idea here is that, you know, you've seen this with a lot of owners, right?
• 20:18
  SPEAKER_00: They're not managing their numbers and all of a sudden they're they're restless at night sleeping, they get up really early the next morning, they go in the office, and then they end up talking to five or six people to get a sense of what's going on with the business.
• 20:28
  SPEAKER_00: Yeah, maybe by 10 o'clock they feel a little bit better.
• 20:31
  SPEAKER_00: But if they had a really effective scorecard, all they'd have to do is look at the scorecard, right?
• 20:36
  SPEAKER_00: And it allows them to sleep better, right?
• 20:38
  SPEAKER_00: So you kind of get that sense of.
• 20:40
  SPEAKER_00: But I think it's a it's a very common thing to continue to have it evolve.
• 20:44
  SPEAKER_00: I think what I find with a lot of my clients is that when they get granular and they uh realize that that's a great number, but if I head one step further, they want to get there.
• 20:54
  SPEAKER_00: And and that that to me is where the scorecard starts to drive the business forward.
• 20:59
  SPEAKER_00: And the idea there is a it's a daunting task.
• 21:01
  SPEAKER_00: Don't get me wrong, it's got doing scorecards and building metrics and then managing metrics is daunting.
• 21:07
  SPEAKER_00: And I always tell my clients that you have to start somewhere.
• 21:09
  SPEAKER_00: And the challenge is that once you start somewhere and you start seeing the fruits of your labor, you're gonna start adding more and more metrics or more more measurables in our world.
• 21:18
  SPEAKER_00: Look at, and the idea there is that facts and figures run businesses again, not gut feel.
• 21:25
  SPEAKER_00: And like I think somebody said that, you know, with the with the absence of data, we're gonna do what I want to do, right?
• 21:31
  SPEAKER_00: Which I think somebody said that CEO from Netscape said that, right?
• 21:35
  SPEAKER_00: In the absence of data, we're gonna do what I want to do, right?
• 21:38
  SPEAKER_00: Because nobody can obviously tell them no, right?
• 21:40
  SPEAKER_00: Or tell them that it's wrong.
• 21:42
  SPEAKER_00: So I think the good thing is that metrics can actually give you the idea that, hey, it's working or it's not working.
• 21:48
  SPEAKER_00: And those are the telltale times that you gotta do something different, right?
• 21:52
  SPEAKER_00: And I think what happens is that sometimes in small businesses it's too late.
• 21:55
  SPEAKER_00: You know, we're we're we're three quarters into it, we weren't managing it the right way.
• 22:00
  SPEAKER_00: And all of a sudden, you know, I've seen this in a lot of seasonal businesses.
• 22:03
  SPEAKER_00: Well, my God, it's the fourth quarter.
• 22:04
  SPEAKER_00: We missed the first three quarters.
• 22:05
  SPEAKER_00: We gotta backload everything and hope that it something happens.
• 22:08
  SPEAKER_00: Well, yeah, that isn't the best way to run a business.
• 22:11
  SPEAKER_00: You you really want to run your business in that 90-day world, knowing that your financial future is is is solid because you're managing the numbers and make sure the activities that are happening drive what you want.
• 22:24
  SPEAKER_00: Thank you.
• 22:25
  Scott: Um so as we continue adding metrics or looking at metrics, what's the the the point where we have too many, right?
• 22:35
  Scott: Well, what are there any indications to know?
• 22:37
  Scott: Okay, there's just too many, we're not getting really getting into the analysis paralysis.
• 22:43
  SPEAKER_00: Yeah, yeah, that's definitely a thing.
• 22:45
  SPEAKER_00: No, obviously, we're looking for five to fifteen, we're trying to get closer to five.
• 22:49
  SPEAKER_00: You know, if you can run your business on five numbers uh as a leadership team, that's a pretty solid uh scorecard.
• 22:58
  SPEAKER_00: Typically, the first go of it, you kind of get into the you know, 10 to 20.
• 23:04
  SPEAKER_00: And then obviously, as you get to it, and again, some of them may be departmental.
• 23:08
  SPEAKER_00: So as a leadership team understands what's a company scorecard versus a departmental scorecard, that kind of shifts a little bit.
• 23:16
  SPEAKER_00: You definitely don't want to overanalyze.
• 23:18
  SPEAKER_00: I think a lot of companies, you know, and again, this is about foretelling your financial future and seeing trends and patterns development that you you know can address.
• 23:28
  SPEAKER_00: The question is then once there's an issue, you should be able to deep dive into the numbers and get more metrics to support what's going on.
• 23:35
  SPEAKER_00: Right.
• 23:35
  Scott: Okay.
• 23:38
  Scott: I I like to I like to wrap up all of our shows with one to three immediate takeaways that our listeners could literally put into action as they turn off the podcast.
• 23:50
  Scott: This could be something that you've already shared with us.
• 23:52
  Scott: You've already shared a lot, but this could be could be something you've already shared with us, Joe.
• 23:56
  Scott: So so if you already mentioned that's fine, and you can just be a reminder.
• 23:59
  Scott: But what what are those, what what are those maybe one to three uh takeaways for our for our listeners?
• 24:03
  SPEAKER_00: The biggest one for me, Scott, is really understanding and working on your business.
• 24:08
  SPEAKER_00: There's too many times when everybody's too busy working in the business that they don't have time to work on the business.
• 24:14
  SPEAKER_00: And and creating that 90-day world where you're working on your business and you're reviewing your numbers and you're making a course adjustments, you know, based upon what you're seeing and needing to do.
• 24:24
  SPEAKER_00: Uh, the second one is deal with your issues.
• 24:27
  SPEAKER_00: You know, they're not gonna go away on their own.
• 24:29
  SPEAKER_00: And and working with the team, being responsible to your issues is extremely valuable.
• 24:34
  SPEAKER_00: Whether they're big or small, they're not gonna go away on their own.
• 24:37
  SPEAKER_00: And that's part of the leadership teams, team health, right?
• 24:40
  SPEAKER_00: If we can understand our issues and make sure they go away forever, that's gonna be important.
• 24:45
  SPEAKER_00: The third one, the the biggest takeaway is really understanding where you want to go.
• 24:49
  SPEAKER_00: You know, there's so many times in a small business where the owner has it in their head, right?
• 24:53
  SPEAKER_00: And they don't have it told their employee or employees.
• 24:57
  SPEAKER_00: So the employees just continue to do the work, but they don't know why they're doing it and where they're trying to go.
• 25:03
  SPEAKER_00: So the biggest thing for us, and I think the biggest takeaway is if if you want to go somewhere, you know, if you're gonna go in your car and go somewhere, you're gonna put something into your GPS and it's gonna take you there, right?
• 25:15
  SPEAKER_00: Think of that with your employees.
• 25:17
  SPEAKER_00: Have them understand where you're going so they can go for the ride with you.
• 25:20
  SPEAKER_00: And if they don't know where you're going, they may question some of your decisions, they may question some of the things that you do.
• 25:27
  SPEAKER_00: But if they know where you're going, they're gonna support you and they're gonna want to help you achieve that, right?
• 25:32
  SPEAKER_00: So that's the biggest thing is that a lot of owners of small businesses keep it in their head, and they don't tell people.
• 25:38
  SPEAKER_00: All of a sudden, it's like, you know, why don't they know that?
• 25:40
  SPEAKER_00: Well, you never told them, right?
• 25:41
  SPEAKER_00: And you got to tell them at least seven times, right, before they internalize it or want to become part of it.
• 25:45
  SPEAKER_00: But that's a big thing that you could do tomorrow that allows them to understand that, hey, we're making decisions, we're doing it this way because of this, and they're gonna get it, and they're gonna say, you know what, I see why that's important to us.
• 25:58
  SPEAKER_00: Let's move forward, let's go.
• 26:00
  SPEAKER_00: And the idea there is that if you had 12 people in your company or 15 and they're all rowing in the same direction, Scott, not to get all kumbaya in here, but magical things can happen, right?
• 26:09
  SPEAKER_00: You know, it's amazing what companies do when everybody's aligned and rowing in the same direction.
• 26:13
  SPEAKER_00: So that's a big piece of it.
• 26:15
  SPEAKER_00: So that's that's the third one for me.
• 26:16
  Scott: Okay, great.
• 26:17
  Scott: I like those.
• 26:18
  Scott: The understand and and work on your business, create that that time every 90 days to sit down and work on that.
• 26:26
  Scott: Two, deal with your issues, and three is understand and communicate where you want to go with the business.
• 26:34
  SPEAKER_00: Very interesting stuff.
• 26:38
  Scott: I I also enjoy a good podcast or or a good book recommendation.
• 26:42
  Scott: Uh, do you have anything for us, Joe?
• 26:44
  SPEAKER_00: I do.
• 26:45
  SPEAKER_00: Actually, this is one that I recommend to my clients all the time.
• 26:48
  SPEAKER_00: Uh, it's by Dan Sullivan called Who Not How.
• 26:50
  SPEAKER_00: A lot of small business owners and entrepreneurs are extremely bright people.
• 26:53
  SPEAKER_00: They think that they can conquer the world.
• 26:55
  SPEAKER_00: When you read Who Not How, you'll find that sometimes finding your who versus figuring out the how is going to be a lot more valuable to you.
• 27:03
  SPEAKER_00: And it's a great book, it's an easy read, but it really sets the tone for you know, how quickly do you want to get to where you want to go?
• 27:11
  SPEAKER_00: Right.
• 27:12
  SPEAKER_00: And we say that a lot to our clients, right?
• 27:14
  SPEAKER_00: How fast do you you know, and most people want to go fast.
• 27:16
  SPEAKER_00: The challenge is that sometimes figuring it out on your own makes you go slower.
• 27:22
  SPEAKER_00: So find your who versus your how, and you'll go fast.
• 27:27
  Scott: I've not read that one, Joe, but I did just finish the 10 times is easier than two times and really enjoy that one.
• 27:34
  SPEAKER_00: I wrestled with both of those, Scott, so so I'm glad you got to that.
• 27:37
  SPEAKER_00: Because I was gonna bring that one up too, which is really, you know, or the gap in the game.
• 27:41
  SPEAKER_00: There's a bunch of them, right?
• 27:42
  SPEAKER_00: Uh, that are really good.
• 27:43
  SPEAKER_00: You know, Dan Sullivan's a great, a great, great uh entrepreneur and strategic coach.
• 27:49
  SPEAKER_00: But at the end of the day, those three books combined are really good for every every entrepreneur and every small business owner and every business owner to read.
• 27:58
  Scott: I I I well, I I haven't read the Who Not How, but that that's gonna have to be next on the list, especially since I just finished the other one.
• 28:05
  SPEAKER_00: Yeah, that's awesome.
• 28:06
  SPEAKER_00: Yeah, it's what is it?
• 28:08
  SPEAKER_00: Uh 10x is better is easier than 2x.
• 28:10
  SPEAKER_00: Correct, exactly.
• 28:11
  SPEAKER_00: Yeah, which is true.
• 28:12
  SPEAKER_00: And then the gap in the game, you know, we're as entrepreneurs, we're pretty tough on ourselves, right?
• 28:17
  SPEAKER_00: And and actually, you know, if we our goal is to get to 10 million and we got to 9.2, we're dealing with the 800,000 we didn't get, not the not the 9.2 that we did.
• 28:26
  SPEAKER_00: So that's important as well.
• 28:29
  SPEAKER_00: It is.
• 28:30
  Scott: Well, this has been great, Joe.
• 28:32
  Scott: Uh, where can people find out more about you?
• 28:35
  SPEAKER_00: Yeah, the best thing to do is email me.
• 28:37
  SPEAKER_00: That's joe.
• 28:38
  SPEAKER_00: Kazabowski.
• 28:39
  SPEAKER_00: It's K-O-Z-U-B-S-N-Boy O W S K I at EOSworldwide.com.
• 28:46
  SPEAKER_00: Or you can also call me at 63.
• 28:50
  Scott: Thank you, Joe.
• 28:51
  Scott: I appreciate that.
• 28:52
  Scott: And thanks, Scott.
• 28:53
  SPEAKER_00: It's been a pleasure.
• 28:54
  SPEAKER_00: I enjoyed it.
• 28:55
  Scott: Good.
• 28:56
  Scott: I have as well.
• 28:57
  Scott: All right, folks, that's that's it for today.
• 29:00
  Scott: If you like the show, check out more on your favorite podcast locations, whether it's Apple, Spotify, Amazon, or others.
• 29:07
  Scott: And please go out and rate the show.
• 29:09
  Scott: I'm Scott Keller, and I hope you join me next time for budget your business.