Latest / The SmallBizChat with Melinda Emerson / Know Your Numbers, Scale Your Business with Nina Kaufman

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Know Your Numbers, Scale Your Business with Nina Kaufman · The SmallBizChat with Melinda Emerson

• 0:00
  3, 10, 1, 0, ignition, liftoff,
• 0:08
  Ending small business failure.
• 0:11
  Welcome to the Small Biz Chat podcast with a number 1 small business expert Melinda Emerson.
• 0:17
  Bolinda's goal is to end small business failure, and she'll give you the information
• 0:21
  you need to succeed and live the life you've dream of.
• 0:25
  Now here's the small Biz lady herself.
• 0:29
  Melinda Emerson.
• 0:31
  Hi, everybody.
• 0:32
  I'm Melinda Emerson.
• 0:33
  This small Biz lady I would like to welcome you to small biz chat.
• 0:37
  Now we have an amazing show for you for more than 10 a half years, I have been hosting small
• 0:44
  business chat.
• 0:44
  Now you guys know that the whole reason why we started small business chat is to create a peer
• 0:49
  to peer opportunity for you to get business advice that you don't have to pay for, but that
• 0:54
  you definitely need.
• 0:55
  So listen.
• 0:56
  Now I am so excited that we're gonna be talking about the legal side of business with miss Nina
• 1:02
  Hoffman Esquire, and she's really gonna be talking to us about how to scale your business,
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  but also how to make sure that you follow the legal guidelines so that you don't end up on
• 1:14
  the wrong side of the law or the IRS that's the other people.
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  That's like the law.
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  Right?
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  So let me tell you a little bit about Nina who's been a good friend of mine for a long
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  time.
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  She is a small business champion.
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  She's an award winning attorney media resource and the host of the cash out big podcast.
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  The founder of Believe Solo.
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  She worked with seasoned owners of knowledge driven service firm who want out side support
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  to own a business that doesn't own them.
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  She helps her clients discover more fun flexibility and reward from running their
• 1:48
  companies.
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  Nina Kaufman.
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  Welcome to small fish chat line.
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  It is so great to see you and to be with you tonight.
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  Oh, listen, you know, you're one of my fades.
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  When we have some legal issues, we call Miss Nina Kaufman.
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  So, like, alright.
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  So let's talk, like, what are the top legal business mistakes that folks make?
• 2:07
  Sure.
• 2:07
  So let me first put it in context because usually small business owners go, oh, when they
• 2:11
  think about small business issues.
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  And as a leader of a small business, you really have three things you're looking out for.
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  You wanna make sure that you're making money.
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  You wanna be saving time, and you wanna avoid stupid and costly risky mistakes.
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  So I'm here as part of sort of the risk management piece of all of that.
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  So when small business owner, the things that I've seen over 20 years of working with small
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  businesses, I see that in their effort to save money, they rush into things without getting
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  the right sounding board.
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  And that can include, hello, copying contracts from the internet.
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  How many have done that?
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  Just to say, I remember dealing with a con a client.
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  She pulled off a a contract and in the terms and conditions, it referred to her company as
• 3:03
  Yahoo.
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  Okay?
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  Not for her.
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  Another thing is hiring when you're desperate.
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  That is the worst time to be hiring because you're usually gonna make a bad decision
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  somebody who's not going to be a good fit, and it costs you even more time and money.
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  And the third thing is really rushing into business deals without getting a sounding
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  board.
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  So often business owners are like, cashing, I wanna see the money, or I need the money now
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  that they're not looking at all of the issues and the what ifs that could derail a deal or
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  maybe make this particular transaction something that's not gonna work out for them.
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  I'm cosigning all of the things you're saying.
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  So let's talk about contracts, like, you know, You always say that having good contracts is a
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  is a great way to stay profitable.
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  Oh, yes.
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  Yes.
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  Absolutely.
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  First of all, It sets out your process, your your procedure for how you and your client or
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  your landlord or your business partner how you're going to work together, and that's
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  really important as a communication tool.
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  So, I, for example, I had client who was working with a large company who shall remain
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  nameless, but sometimes you use them to search on the internet.
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  And One of the things that happens when you're working with a company is if they like you,
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  they may ask you to do more.
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  And you find particularly for a lot of the creative and knowledge professionals I work
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  with that the scope increases COVID.
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  You need to yes.
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  Absolutely.
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  You need to set good boundaries around that.
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  So it helps to set the scope of work It helps you find a way to say, oops, things have really
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  changed since we first signed this and have a mechanism for making that change to say, woah,
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  let's stop and reevaluate because things do change.
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  They don't always proceed on the same linear path that you expect.
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  And the 3rd and one of the most important pieces, if it's written well, it gives you an
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  opportunity to say, woah, Talk to the hand.
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  You haven't paid me in a really long time.
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  I'm not performing more services, or I'm done until I get paid.
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  But when you're in a contract that doesn't let you do that, you run the risk of reaching, and
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  that means you're spending a lot of time and maybe not getting paid and that erodes your
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  profit margin.
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  I couldn't agree with you more So, what are some of the things the 3 foundational areas,
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  solo per door needs to consider if they wanna, you know, start scaling their business?
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  Sure.
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  And this is something that we talk about in Beyond solo all the time, that these, the three
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  areas that keep coming up over and over are, Am I choosing the right clients?
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  How do I assemble a good team?
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  And how do I stop making my my world crazy.
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  And it's that for so many solo business owners, their business is in their head.
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  And if it's in your head, you can't train anyone else to do it.
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  You can't delegate it.
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  You can't really evaluate, is this the best way to do it, which means you could be wasting a
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  lot of time, not focusing on the most areas of time, as, as David mentioned earlier.
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  And so as I say, those 3 looking really carefully, the clients the team and your, what
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  I would call your playbook.
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  Those are the 3 most important areas.
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  Alright.
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  So then how do I go about choosing the right customers?
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  Oh, well, leaving aside marketing 101.
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  What you really wanna have is a vision for your business financially.
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  Like, what do you need to earn after expenses?
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  A lot of business owners will say, well, I'm really passionate about helping people with the
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  issue of, as as I've dealt with my my clients, right, I really wanna help them achieve their
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  fullest potential.
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  No.
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  That's a beautiful thing.
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  What does that mean?
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  What are you?
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  Yeah.
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  Yeah.
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  Hello.
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  Right.
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  And and who who's potential potential for what?
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  And how much are you charging?
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  So it's beautiful to wanna be of service.
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  I I mean, again, it's all divine creation I firmly believe is starting a business, but if
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  you don't know what your target market can afford, if you don't know what you need to earn
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  to be profitable.
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  You've got a hobby.
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  You don't have a business, and that's where if you look at the stats, particularly on solo and
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  non employer business, the average earnings are $47,000 a year, and that that's
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  painful knowing
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  all of the time they put in.
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  That is painful.
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  And, unfortunately, that's 88% of women owned businesses.
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  It is not doing a 100,000 in revenue, and that hurts me to my whole part.
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  I feel like I gotta get out here, write some more books or something.
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  Exactly.
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  And, and that's where numbers can really be our friends.
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  That's part of what we, we talk about when when I've got my Beyond solo coaching group is that
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  when you know your numbers, it's a very objective way of being able to say, you know
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  what?
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  I just can't, as much as I would love to be a good gal.
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  I just can't discount this fee because you know what?
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  This is gonna put me under.
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  I just, I just can't do it.
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  And when you have that BrightLine test, it makes it so much easier to negotiate from a
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  place of strength.
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  Absolutely.
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  So what about assembling a good team.
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  So now we know what business we're in.
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  We know who our paying customer is.
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  How do I get the right team around me, especially if I can't really afford it?
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  Right.
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  So that, that is a great question and one that does come up often.
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  So what I would recommend to small business owners is that I have what the sort of an
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  acronym ideal, the ideal hiring process.
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  And so, again, number 1, don't do this when you're desperate.
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  What you wanna do is identify what are the areas where either you're not strong, you know,
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  you're really suck at it quite frankly.
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  Can I say that on Facebook Live?
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  Well, I just didn't.
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  So Yeah.
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  You're really not good at this.
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  Again, that's very risky.
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  If you're in the weeds of some aspect of your business like bookkeeping where you're not good
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  at it, that is a huge risk.
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  Also look at, what don't you like doing?
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  Because if you don't like doing, you're really not gonna give it a 100%.
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  And for most business owners.
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  It's more of the the admin or some of the marketing stuff.
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  They're just not as good at it as they could be.
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  So it's identifying those areas determining what kind of skills you need to get that job
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  done.
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  So it, you know, it what what are the what's the the background?
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  How how senior does somebody need to be?
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  What are the expectations and the frequency for doing this?
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  I mean, is this regular social media posting, or is it a one off, let's say, content
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  creation?
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  E is for evaluating the commitment.
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  Like, do you need someone in person or virtual?
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  How much time, and asking consistent quest This is where business owners will often look at,
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  oh, I really like this person.
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  I like the fact that she's wearing a leather jacket, and I want her to be the 1.
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  Right.
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  Yeah.
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  But you don't always know unless you're asking consistent questions.
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  And the the last piece l for for figuring out that team, we just talked about numbers.
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  It's metrics.
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  How do you want your business to improve with numbers whether it's time saved money generated
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  as a result of bringing on this person.
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  Because without that, it just becomes another expense item.
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  So, again, looking at all that, it doesn't always have to be a part time person or even a
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  full time person.
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  There are so many options now with fiverr and Upwork and and virtual assistance where you can
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  get the help that you need, even if you don't have a budget for a full time person.
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  Alright.
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  Well, listen.
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  That was so helpful and so on point.
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  I'm gonna put a pin in it right there.
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  We're gonna go to commercial and we're gonna come right back.
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  And we're gonna talk more with Nina Kaufman Esquire, and she's gonna give us the low now on
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  what we need to do to scale our business and protect ourselves legally.
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  This is the small business chat, and we will be right back.
• 11:25
  Are you tired of struggling in your business, not taking a paycheck, dreading dealing with
• 11:30
  your business in the morning?
• 11:32
  Are you regret even starting your business in the first place?
• 11:35
  Well, I know you're tired, and I also remember what that kind of tire is like, but the good
• 11:40
  news is It's time to stop feeling that way.
• 11:44
  Stop.
• 11:45
  I'm Melinda Emerson's small business lady, and my new book will be your business is a ninety
• 11:50
  day turnaround plan to get back your life and reduce chaos in your business.
• 11:54
  I've been in business nearly 20 years and let me teach you how to build a business that works
• 12:00
  for you.
• 12:00
  Grab a copy today.
• 12:05
  Welcome back to Small Bench Chat Live.
• 12:07
  I'm Melinda Emerson's small biz lady, and we are talking with Nina Kaufman Esquire and she's
• 12:12
  bringing down for us the thick things we really need to focus on to scale our business and do
• 12:17
  it in a way that is smart and legal.
• 12:20
  Now Nina, we left off talking to you about assembling a good team.
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  Now I wanna talk to you a little bit about you say that it's important to develop a playbook
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  for business runs.
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  Why is that?
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  Oh, absolutely.
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  Because if you don't get it out of your head, nobody else can do anything.
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  Then it means that you as the owner are the bottleneck, and that's one of the really great
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  challenges, especially when you're hiring someone.
• 12:45
  I've had clients who who bring someone in.
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  They say they promised me they had the skill set.
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  They said so on their resume.
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  I hired them, and now they stinks.
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  They're not doing what I want them to.
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  Well, have you given them any training?
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  Have you talked to them about your your business culture?
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  Have you talked about what you want to achieve?
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  No.
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  They're just supposed to know it.
• 13:05
  Now employees are not mind readers, and virtual assistants are not mind readers.
• 13:10
  My husband is not my mind reader, though I very much expect him to be.
• 13:14
  And when that happens, when we expect people to read our minds, it is a recipe for disaster.
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  It's a recipe for wasting time redoing work, again, opening yourself up to to risks and
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  wasted money.
• 13:29
  So that's where, again, what do you wanna call it?
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  A playbook and operations manual, documenting your systems or 17 ways to describe it.
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  Short of it is Open your cranium and get it out somehow on a page that somebody else can read
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  it.
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  It's gonna save time.
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  It's gonna reduce the overwhelm for you once you figure out what the steps are.
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  It's gonna make it so much easier to hire and to delegate.
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  And also, something that's not often brought up, it's gonna make it so much easier.
• 14:05
  God forbid anything happens to you, to help your loved ones close everything out.
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  I had a situation where someone came to me and her father died at his desk of a heart attack,
• 14:18
  sixty two years old, so young guy.
• 14:21
  I mean, now you know, young guy.
• 14:23
  So young guy dies at his desk.
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  No operations manual.
• 14:26
  The employees are, how am I gonna get paid?
• 14:30
  The vendors wanna know what's happening The customers are freaking out because who's gonna
• 14:34
  be doing their work and all because there wasn't any easy way for somebody else to step
• 14:41
  in and take things over.
• 14:44
  So what so and what happens with that business?
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  It ends up closing because it's a fire sale.
• 14:49
  Nobody can figure out how to get it to work.
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  So a playbook is also saying, Hey.
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  This is the engine of how we earn money here.
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  And If you ever want to sell a business, it it can actually increase the value of that
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  business by up to 50%.
• 15:06
  Wow.
• 15:07
  Wow.
• 15:07
  That that is incredibly valuable.
• 15:09
  So I I wanna talk to you a little bit about the type of legal agreements that we need to have.
• 15:14
  So if I'm hiring a freelancer contractor to do something for me, do I need a legal agreement,
• 15:19
  or can we just, you know, get them off a 5 or keep it moving?
• 15:21
  Like, what do I need to do?
• 15:23
  If I'm gonna bring somebody into my business to do, you know, sort of like work for hire kind
• 15:28
  of work for me.
• 15:29
  Yeah.
• 15:29
  So that's a really great question.
• 15:30
  And, again, what what are what you call the agreement, whether it's independent contract or
• 15:34
  freelancer.
• 15:35
  The name of the agreement doesn't matter.
• 15:36
  It's really more of a substance thing.
• 15:38
  So when you're hiring people off of fiber, Usually, there there is an expectation that
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  they know they're they're they're not in your business for a a regular period of time.
• 15:52
  Very often, it's just a one a one off piece of work.
• 15:55
  But you really do need to be careful about bring on people if it's going to be more
• 16:01
  regular, that you're not getting close to an area where they could be considered a part time
• 16:07
  employee.
• 16:08
  And that's where you wanna screen for, do they have other clients they're working for?
• 16:15
  Are you paying another entity, or is it an individual, what happens when the project is
• 16:21
  done?
• 16:23
  All of those things.
• 16:23
  I call it manage management, you know, managing your roles, money, who gets paid, money
• 16:30
  generators, are you protecting your intellectual property, your confidential
• 16:34
  information, and then moving on.
• 16:36
  So if it's a longer project and you're not happy, what rights do each of you have to move
• 16:43
  on and and close things out easily.
• 16:45
  So those things are really, really important.
• 16:48
  I have the larger, the the project, the more you really wanna make sure that's protective.
• 16:54
  Okay.
• 16:54
  I think that's really, really important as well.
• 16:57
  And then the last thing I wanna ask you about is if you wanna take on investors, what do you
• 17:02
  need to make sure is in the contract?
• 17:05
  Oh, yeah.
• 17:05
  Yeah.
• 17:06
  I talk about this.
• 17:07
  I I wrote a book called The Entrepreneurs Preenup, how to choose a business partner who
• 17:11
  won't bleep you.
• 17:14
  And it looks at and not just the things that go into a partnership agreement, but all of the
• 17:19
  communication and the goals and how do you navigate different issues, ethics, things like
• 17:25
  that, that people don't always think about when they're thinking about a business partner.
• 17:29
  It's usually, oh, I'm so excited, I've found prince or princess charming.
• 17:33
  Let's go into business together.
• 17:34
  You're so fabulous.
• 17:35
  Let's do this.
• 17:36
  Right.
• 17:36
  So when you're looking at an investor particularly a financial investor and if you're
• 17:42
  dealing with a sophisticated angel or VC investor.
• 17:46
  That is not an area you wanna mess with.
• 17:49
  Anyone who's gonna be a a strictly a financial investor and not be part of the roll up the
• 17:55
  sleeves day to day, you're dealing with securities issues.
• 17:58
  So you wanna be very, very clear that this is documented well.
• 18:03
  What is the degree of management control they'll take?
• 18:07
  You know, if you're a control freak like David pointed out, you really wanna be very clear.
• 18:14
  I had a client who was desperate to bring new people in, wasn't my issue, but he essentially
• 18:20
  gave away 2 thirds of his company and guess what happened in less than a year.
• 18:24
  Boom.
• 18:25
  Leave out.
• 18:26
  Out, of course, then.
• 18:27
  Exactly.
• 18:28
  So
• 18:29
  exactly.
• 18:30
  So how much are you controlling?
• 18:32
  What percentage of profits are they entitled to?
• 18:35
  And you want good communication too.
• 18:37
  You wanna know what are their expectations?
• 18:39
  Like, what kind of return on investment are they expecting?
• 18:42
  Can you realistically deliver?
• 18:44
  Because you don't wanna get in a bad situation with your investor.
• 18:47
  So those are communications issues, as well as understanding the time frame for their exit.
• 18:54
  And what that kind of exit looks like because all of those affect the that you need to see
• 19:05
  the kind of services or products that you need to offer, it radically affects how you're going
• 19:10
  to be growing and running your business.
• 19:12
  And please, please, please, have it in writing reviewed by an attorney to go back to the
• 19:19
  beginning.
• 19:19
  Do not pull this off the internet.
• 19:21
  And just use it.
• 19:23
  Right.
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  Right.
• 19:24
  Well, listen.
• 19:25
  Thank you so much.
• 19:26
  Thank you.
• 19:26
  That was so helpful.
• 19:28
  About, you know, getting the right team together, making sure you got the right
• 19:32
  customers, and please, please, please, use a lawyer, do not pull contracts off the Internet.
• 19:37
  That's what the lady said, Nina, what's your favorite business at?
• 19:41
  I love Evernote because I can put in notes about everything, whether it's a password,
• 19:46
  whether it's a an idea for a a book or articles or ways to get back to people.
• 19:52
  All of it can be contained, and there's a search function as well.
• 19:56
  So super helpful, and you can bring people into it if you wanna add a poor team.
• 20:00
  Nina, what's your favorite business for?
• 20:02
  Okay.
• 20:02
  Well, I know what yours is, so I'll sort save that one for you.
• 20:06
  Rob is like, oh, come on.
• 20:07
  Come on.
• 20:08
  We made a surprise.
• 20:10
  But my the email No.
• 20:12
  I would say one of my favorites is actually called the highest calling by Larry Janeske.
• 20:17
  It's an inspirational novel, but there's a about a business owner, but they're so much
• 20:22
  great business wisdom.
• 20:24
  And also, as I said before, the understanding that when you are creating a business, you are
• 20:29
  you are truly being a creator and, the spiritual and personal and emotional roller
• 20:35
  coaster that business owners go through as well.
• 20:37
  So that's where it's very affirming, but also really eye opening and crystal great business
• 20:42
  wisdom too.
• 20:43
  Yeah.
• 20:43
  I really like that book too.
• 20:44
  What is your favorite old school marketing tip?
• 20:47
  My favorite old school marketing tip is write thank you notes because nobody hand writes any
• 20:54
  more.
• 20:55
  There used to be send out cards where you could pretend it's handwriting, or people writing a
• 21:00
  quick email, like, hey, thanks, thx, There is something that stands out about a handwritten
• 21:06
  note that says, I really appreciated our time together.
• 21:10
  I appreciated your thoughtfulness.
• 21:12
  And why and actually signing your name to it, maybe because I'm a contract gal, you're
• 21:17
  signing your name to that gratitude.
• 21:20
  Thank you guys so much.
• 21:22
  You know, the mission of small business chat is to end small business failure, and that is what
• 21:27
  we were doing tonight.
• 21:28
  I tell you, for me, I do this because I want you to win in business, and I'm I wanna leave
• 21:35
  you with this.
• 21:36
  Remember, you never lose in business.
• 21:39
  Either you win or you learn.
• 21:41
  God bless everybody.
• 21:42
  This is Melinda Emerson, the small business lady, and we are out.
• 21:47
  Thank you for listening to the Small Biz Chat podcast with Melinda Emerson.
• 21:52
  For more resources and small business success strategies, visit succeed as your own boss.com.
• 21:58
  Subscribe to this podcast wherever you listen to podcast and join us next Wednesday.