Latest / The Inspired Stories Podcast / Kristopher Hart on Why Most Business Owners Are Working Harder Than Anyone and Still Not Getting Paid for It

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Kristopher Hart on Why Most Business Owners Are Working Harder Than Anyone and Still Not Getting Paid for It · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they've overcome
0:14
adversity. As you listen today, let one
0:17
idea shape what you do next. My name is Anthony Kotaspoti and
0:20
today's guest is Christopher Hart, Senior Business Analyst at
0:24
Cogent Analytics, a business management consulting firm based
0:28
in Greensboro, NC. Cogent serves small and mid
0:32
sized Main Street companies in 36 states, using data and
0:37
leadership coaching to lift profits and streamline
0:39
operations. The firm's profit platform
0:42
method has helped more than 3800 owners, earned an A+ rating with
0:47
the Better Business Bureau and landed Cogent on the Inc 5000
0:52
list three years running. Chris brings more than two
0:55
decades of hands on experience to his clients.
0:58
Before joining Cogent, he managed private military and
1:01
medical flight operations around the globe, and he later built
1:05
and sold several ventures during the height of COVID-19.
1:08
He holds an MBA plus bachelor's degrees in business, clinical
1:13
psychology and Occupational Safety and health.
1:17
At Cogent, Chris designs KP is drives cultural change and
1:21
mentors entrepreneurs on sustainable growth.
1:25
Chris is a senior executive analyst and diagnostician.
1:28
He drives cultural change and mentors entrepreneurs on life
1:32
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All right, back to our guest today, Senior Business analyst
2:33
of Cogent Analytics, Christopher Hart.
2:35
Thanks for making the time to Share your story today.
2:38
Thanks for having me on. I'm excited to talk to you.
2:40
All right. So I want to talk about some of
2:43
your previous work before we get to present day stuff at Cogent
2:46
Analytics. For 10 years you were a master
2:50
operational specialist at Universal Weather and Aviation.
2:55
What kind of work were you doing there?
2:56
What? What's going on?
2:58
Yeah. So I worked for a company out of
3:00
Houston, as you just mentioned, universal weather and aviation,
3:03
but we basically handled private military, medical and charter
3:06
flights on a global scale, no commercial.
3:09
Essentially, if you were a celebrity, a government
3:11
organization, a Fortune 500 company, and you had your own
3:14
private fleet, we handled the logistics, the flight planning,
3:18
the operations, everything from tip to tail.
3:22
OK. Can you give us an example of
3:25
some of the folks that you work with?
3:26
Yeah, I'll give you an example. So I want to be, I want to tread
3:29
lightly on, on some of this, but there's a very famous celebrity
3:34
boxer who is undefeated, I believe.
3:39
But often times these celebrities will travel to Hong
3:42
Kong, China, whatever the case might be and do tours and, and
3:46
whatnot. So if, if they say, they pick up
3:49
the phone and say, hey, we're going to Dubai, we're going
3:51
here, we're going there. We would handle the flight plans
3:54
and, and anytime you travel from one country to another, there's
3:57
permits all along that route. We are called overflight permits
4:00
as well as landing permits in many countries.
4:03
And this particular example, he says, hey, I've got eight
4:06
people, we're going to Hong Kong.
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This is what I need. When can we leave?
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We, we set up everything from, like I said, from tip to tail.
4:15
A lot of interesting stories come from that.
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I mean, as I, as I kind of alluded to beforehand, I are, we
4:20
handled all the Jeffrey Epstein flights before we knew exactly
4:24
what was, you know, we were based in Houston.
4:27
So we didn't weren't, we're not there on the plane, but we
4:30
basically handled Obama's flights, Harrison Ford, John
4:34
Travolta, if they're famous and they have a plan, we handle
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those operations. Interesting, of course, here we
4:41
are in February 2020. Sixth, the one everybody wants
4:43
to talk about is Jeffrey Epstein.
4:45
You guys weren't on the planes. You didn't know what was going
4:48
on. But I don't know, like, like
4:52
have authorities come to you and ask for data.
4:54
Like looking back, is there like anything you can provide that
4:57
helps connect dots? Yeah, so, so actually when, when
5:00
Trump's first administration, the FBI came in and confiscated
5:04
those records, I think it was 2015 or 2016.
5:07
So when they talk about releasing those records, they
5:09
already have them, which of course, up until very recently
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they've started releasing them. So it's not, there's not news
5:15
here other than the fact that I've been saying for quite some
5:18
time, yeah, we, we know who who was on those flights and and now
5:23
you're saying everyone was the. The big issue here is,
5:27
unfortunately, rich people share their planes.
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So I thought for sure they would never show these documents
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because the reality is if I charter out my plane, if someone
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leases my jet, they're not going to know who's on.
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I don't, they don't know who owns it.
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They don't know it's Jeffrey Epstein's plane.
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They're just leasing a jet from a third party.
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So I thought they wouldn't release the documents, largely
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because you wouldn't be able to tell the difference between
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those who were going there specifically to the island or
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those who just rented his plane. Oh, interesting.
5:57
And so have these particular records been released?
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Because that means a lot of like very innocent people's names are
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going to get thrown in the dumpster here.
6:06
Well, as you've already seen, I think very recently Pam Bondi
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released a, an actual alphabetical list of everyone
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who's in the records. So that's been released in the
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last week or so. And of course everyone you can
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think of is on is in those records.
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The problem is, and this is the real issue is the public is not
6:23
especially these days, they're not going, they're not going to
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delineate between those who are in the records and innocent and
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those who specifically went to the island or those who
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specifically like you're, you're making a leap of faith that
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they're going to tell the difference and they're they're
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just simply not going to. No.
6:38
Wow. So there's a whole bunch of
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people whose lives are getting upended, some of them rightfully
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so, and some of them had nothing to do with anything. 100% I
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mean, they, they, it's, there's no new information other than
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the fact that these people were involved in those records.
6:57
And that list is pretty long. I mean, everyone's on it.
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Mark Zuckerberg, Trump, I mean you name it, they were on the
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planes. Wow, that's wild.
7:06
OK, so I want to set the Jeffrey Epstein stuff aside because we
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can go down, you know, some pretty gnarly rabbit holes
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there. And I want to get to more of
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your story. But that time that you were
7:16
there in 10 years, can you think about a challenging experience
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that you went through from a work perspective that really
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helped to shape how you approach business going forward?
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I mean absolutely so. I mean, I, I come from, I come
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from nothing. My background is, is as poor as
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it gets. I mean just middle of nowhere
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southern Houston nothingness. That job is was the launching
7:45
pad. I mean, you start off that job
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many, many, many years ago when I first started, started off for
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like 15 bucks an hour. I had to work 93 days straight
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to pay for my wedding. When me and my wife got married,
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it was the most humble of humble beginnings possible.
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And that job, I didn't matter if I worked 80 hours a week or 90
8:03
hours a week. I did what I need to do to
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launch my passion project, both Gammon Spirits and TWS
8:10
Entertainment. So the the side businesses that
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became the main businesses that led to a show on ESPN Radio that
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led to us selling those businesses all started from the
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aviation company. OK, so let's talk about those
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two businesses, Game and Spirits and TWS Entertainment.
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What was the idea? What was the problem you were
8:29
trying to solve? Well, it's it's a funny story.
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So many years ago I was dating this girl whose dad was not a
8:35
fan of me whatsoever, and I found out that the man was a
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whiskey man. I had never really drank
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whiskey. And I got invited to
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Thanksgiving one year and I said, I'm going to go buy myself
8:45
a bottle of Scotch. I'm going to bring it to
8:47
Thanksgiving. And I'm going to, I'm going to
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get this man to, to break bread with me and, and get to know me.
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And I ended up marrying that girl 20 years later, 4 kids.
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And it was the launching pad for our business.
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So after we got married, we, my wife and I spent two weeks in
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Scotland and Ireland visiting distilleries.
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And that led to us starting the state's largest whiskey
9:08
festival, the Houston Whiskey Social.
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And as you see behind me, there's quite the library of
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spirits. You can't see it full in frame,
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but somewhere north of 350 bottles.
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And it, it just was the, it was a, it's both an emotional thing.
9:23
It, it, it, I, I'm now the favorite stepson, definitely out
9:27
of the seven kids. I definitely won.
9:29
I, I got there. But it it, it launched our
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business and then we sold both companies right on the cusp of
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COVID, completely coincidentally.
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So, but help us connect the dots, right?
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You would never had whiskey before, but your future
9:45
father-in-law, big whiskey fan. So this is the first time that
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you're sort of delving into that realm, but how do you go from
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there to starting your own whiskey business?
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Yeah. So when we went to Scotland and
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we got back, we started visiting other whiskey festivals all over
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the country. So whiskey festivals have been
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around for more than three decades.
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There's a, you know, people come together, brands come from all
10:07
over the world to show their spirits.
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And I said, you know what? I, I, it started off as an idea
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for a dinner of just 20 people featuring a tasting of spirits.
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And that 20 people dinner idea ended up launching into 2000
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person event, 400 different spirits.
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And we even, we got a little creative with the the laws in
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Texas. And we found out that if we
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didn't pull a permit, we were able to bring in vintage
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spirits. And so we we brought back
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spirits from every decade going back to World War 2.
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And we found a bottle of Scotch that has been in the glass since
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1945, the year we entered the war.
10:45
And then I tracked down Winston Churchill's great grandson.
10:48
Yeah. So we we tracked him down and
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brought him in. And you got to actually try a
10:52
time capsule. The whiskey has been in the
10:54
glass for the last 80 years. A little more than that and you
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got to drink whiskey with the surviving grandson of Winston
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Churchill, the Prime Minister during World War Two.
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It was an incredible experience. And from there, the event just
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blew up to the largest event in the state and the other one
11:10
featuring vintage spirits. That's really cool.
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So, but how did you get into bottling spirits for
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celebrities? Yeah, So that that's it.
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It became AI guess 1 led to the other right.
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So from the whiskey festival, then it led to marketing,
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working with other brands globally, marketing efforts,
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that sort of thing. And then we got approached by
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ESPN here in Houston and they started, they wanted us to do a
11:41
a show basically interviewing celebrities over drinks.
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And we got enough celebrities on Matthew McConaughey, Bryan
11:47
Cranston, couple of big names that would come in and it got to
11:51
drinking and and saying things that they're their, their media
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marketing manager was like, maybe we should cut that out.
11:58
And and then we it just kind of Segway to say, Hey, do you know
12:02
anyone who could help launch a brand?
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And so we ended up launching Sammaril and Mark Norman are two
12:07
celebrity comedians based out of New York.
12:10
We've we've worked with the company that ended up buying us
12:14
out. They currently borrow Beyoncé's
12:18
whiskey here in Houston. It was kind of a one thing led
12:22
to the other and it just kind of evolved and grew into something
12:24
beautiful. So you were running this whiskey
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festival, the largest of its kind in the state of Texas.
12:30
But why does ESPN approach you and say, hey, why don't you
12:33
interview some celebrities? Yeah, so, so The thing is, is
12:39
that radio, as you can imagine, has had to evolve quite a bit
12:42
over the last two decades. Radio, they came up with the
12:47
idea. They said, hey, we'd like for
12:49
you to do something kind of like Hot Ones.
12:51
I don't know if you've seen Hot Ones in on YouTube, but
12:53
essentially interviewing people over hot wings.
12:57
And we would put spirits in front of them and it just kind
13:00
of evolved and grew. And then once you become
13:03
associated with certain publicist, then they they
13:06
represent other celebrities and they say, hey, you should go
13:08
over here and do this. So Sam Hewin from Outlander has
13:11
been on the show. Matthew McConaughey produced his
13:15
book Green Lights came on the show to talk about that.
13:18
And at the same time, he was working with Wild Turkey during
13:20
that same period. So it just, it grew into one
13:23
thing after the other. And then all of a sudden we
13:24
realized that we could go buy parcels of our own liquid and
13:29
bottle it. So in business, people typically
13:31
have to project out the next few years.
13:33
But in spirits, you have to project out project out the next
13:35
decade. And so we found some.
13:38
So what tends to happen is you put rum and whiskey down and you
13:42
hope that in 10 to 15 years it was the right call to put it,
13:46
put it in a barrel during that time period and then you'll
13:49
bottle it for the futures demand.
13:51
But things ebb and flow. So if whiskey drops like it is
13:54
now, which again, totally coincidental, we got out of the
13:57
industry at the right time because whiskey's definitely
14:01
hurting right now. But we would, we bought, we came
14:05
across a parcel of, of 25 year old rum, 15 year old rum, 15
14:10
year old bourbon and we decided, OK, they needed to liquidate it,
14:15
we'll take it. And we bottled it.
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We didn't adulterate it. We also, there's a huge push in
14:20
this industry right now for transparency.
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A lot of people like to lie on their labels.
14:25
So we made, we took the unadulterated, honest approach
14:28
and just didn't add any water to it, didn't flavor with anything,
14:32
kept it clean and straightforward and didn't have
14:35
to lie to the consumer about it. And it was a very big success
14:37
for us. OK.
14:39
So why the decision to get out? Why the decision to sell?
14:44
It's exhausting. You know, I've got 4 kids and
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you know the, the demand, you know, typically your nine to
14:52
five would be in an office, but a lot of people in the spirits
14:55
industry, their meetings are at bars and restaurants in the
14:58
evening. It was just, it was a very high
15:00
demand thing and my wife and I wanted to have two more kids
15:03
before we before we were done having kids.
15:06
And so when the opportunity came up, someone came along and made
15:09
an offer and we just couldn't say no to it.
15:12
OK. And then how actually I'm going
15:15
to back up before we get to Cogent, where does one go to
15:18
acquire liquid as you put it? Oh yeah, yeah, Juice.
15:23
So there there's a a couple different ways to do this.
15:25
Often times brokers are involved.
15:27
So what happens is like I said, you want to project out my
15:31
demand. So maybe you put down 500
15:34
barrels now hoping that in 10 years the demand will be there
15:37
to meet that demand. But sometimes it's the opposite.
15:40
Sometimes 10 years from now, you're left with excess liquid.
15:42
So in order to alleviate cash flow concerns, often times what
15:46
they'll do is they will simply call a broker and offer it
15:48
available or call other people they know that are buying.
15:51
So it's called sourcing, and sourcing has been around longer
15:56
than distilling. I mean, we're right there with
15:58
it. Johnny Walker is sourced from
16:00
multiple distilleries. Most brands you find on a shelf
16:03
are sourced. It's a very common practice.
16:06
And I went to, we went to brokers, we went to
16:08
distilleries. We said, hey, I love this
16:10
liquid. If you would like to sell it to
16:11
me, I'll give you some money for it.
16:13
And they said yeah. So you were doing this on the
16:17
side while still working? At which job was this the the
16:22
weather and aviation job? Yeah, that's that's exactly my
16:25
point. I mean, you, I worked a, a job
16:28
that was tough and demanding and bizarre in so many different
16:33
ways. And we launched this other
16:38
business on the side as most entrepreneurs do, they start off
16:42
as a, we call it a guy in a truck.
16:44
And it just grew from there. So once we started the business
16:49
in 2015, sold it five years later, we grew the company to 72
16:53
million in sales in all 50 states, three countries in less
16:57
than five years. And it just, it's hard to, it's
17:00
hard to to say, OK, I need to work at the aviation company for
17:03
the rest of my life. So you exited.
17:06
You probably did pretty well. How did the opportunity to join
17:11
Cogent Analytics come about? They gave me a call.
17:13
They found me there. They had a recruiter, Cogent's a
17:16
Swiss Army knife of companies. They've got a, an accounting
17:20
services company called Abacus. They've got a marketing agency,
17:23
they've got a private equity side.
17:26
Well, they've also Got Talent solutions and their recruiter
17:28
reached out to me and basically said, hey, we need your help
17:31
diagnosing businesses. I said I I can tell you a lot
17:34
about manufacturing. I can tell you a lot about
17:35
whiskey. And they said it'll translate, I
17:39
promise. And so they brought me in and
17:41
I've been there now four years. I am now a senior executive
17:44
analyst for the firm and the youngest in their history.
17:49
Oh, wow. So what was it that they saw in
17:53
you in sort of this recruiting process?
17:54
Why did they initially reach out because of the alcohol business
17:58
that you had just exited? They're like, OK, this guy's got
18:00
some skills. That's a good question.
18:02
I don't know what was the impetus for the reach out.
18:05
I would say that I I've had an interesting life, as I said,
18:09
from the aviation side to the spirit side, and things have
18:13
just developed largely because they seemed interesting at the
18:17
time. And then you end up becoming
18:18
obsessed with something. I think obsession's important
18:21
when you're an entrepreneur. Who in their right mind would
18:24
want to go hundreds of thousands of dollars in debt to start a
18:27
plumbing company if you weren't obsessed with it?
18:29
So or, or whiskey company or you pick it.
18:32
I mean, entrepreneurs in general tend to have some level of
18:34
obsession. But they reached out to me and
18:37
they said we'd like to, to, and I said, yeah, let's give it a
18:41
go. And it, my very first client was
18:43
a 49 year old printing company in Atlanta.
18:44
And it has been an incredible love story.
18:48
I, I truly, truly, I've said this, it's the most fun I've
18:51
ever had in the company. And that's in a job, in a
18:54
company, you name it, and a hobby.
18:56
Because I, I've sat with celebrities, I've had booze of
18:59
celebrities. It, it is.
19:00
That's all great and dandy, but the most fun I've ever had in a
19:03
company in, in my entire life has been a cogent.
19:06
And it's been saving mom and pop businesses all across this
19:08
country. And for the past four years,
19:11
I've had 200 clients, give or take.
19:13
And it is, it has been a love story of, of seeing these
19:16
people, their families, they're, you know, some people, they have
19:19
nothing in retirement. Their, their hope and dream is
19:22
to sell the business so that they can retire single mothers.
19:27
I, I, I've got a tragic client in Dallas who's her, her
19:30
husband. Unfortunately, she wasn't in the
19:32
business. She was a stay at home mom and
19:34
her husband had a stroke and died.
19:35
And now she's got a business on her plate.
19:37
She doesn't know how to run it. And the first thing she did is
19:40
reach out for help. It has been the most rewarding
19:43
job I've ever been in. Can you walk us through a case
19:46
study? One particular client example.
19:49
OK, Oh, there's a couple of great ones.
19:51
So the, the beauty of this job and you can do a whole podcast
19:54
on this is the stories you find. You're talking embezzlement,
19:58
infidelity. You know, I've got a client
20:00
whose ex-wife worked in the business.
20:01
His new wife works in the business and his secretary's
20:04
driving Alexis. So his girlfriend works in the
20:06
business. So you see everything from
20:09
murder? There's been murder plots,
20:11
there's been arrest, embezzlement, theft, everything
20:13
you can think of. A great story is a company out
20:17
of Atlanta. I don't know that they have
20:19
signed a a media release. I won't say their name, but it's
20:23
a 20 year old kid and he got a full right scholarship to
20:28
baseball in college. And his dad in November of 23
20:32
gets diagnosed with colon cancer.
20:34
He's running a construction company and from November of 23
20:39
to January of 24, Dad dies. He's got two months to transfer
20:44
all of his knowledge to a 20 year old kid who's trying to go
20:46
to college to become a baseball player.
20:48
So the kid has to drop out of college.
20:51
He wants to save dad's business and Dad dies in January.
20:57
Son's 22 years old immediately reaches out for help.
21:02
Evil stepmother. As soon as Dad dies, she empties
21:05
the bank account. She moves to Florida, changes
21:07
her name back to her maiden name and the son's just like, good
21:10
luck 22 year old son, you figure it out.
21:13
So it that construction company, dad's best friends are his
21:18
clients and the clients go, I love your dad, but I can't trust
21:22
my $5,000,000 construction project to a 22 year old kid who
21:24
doesn't even have his general contractor's license.
21:27
So it is just heartbreak after heartbreak after heartbreak.
21:29
And that client, if it wasn't for us, he, he would have lost
21:34
everything. He would have lost his
21:35
scholarship for nothing and he would have lost his dad's
21:38
business. So he the stories.
21:41
What did they bring you in to do?
21:43
So here's the thing, it it's surprising when I say that the
21:47
the average entrepreneur is a guy in a truck, it means I'm an
21:49
employee. I don't want to work for this
21:51
for for someone. I don't like the way that they
21:53
run their business. I'm going to go do this on my
21:55
own. They know how to turn the
21:57
wrench. They know how to build the
21:59
thing, but they don't know how to run the business of the
22:01
business. And there's a saying in business
22:02
consulting that you can't work on the business if you're stuck
22:06
in the business. And so this guy reaches out to
22:09
us, we come in, he's not doing job costing, he's not properly
22:13
estimating. He doesn't know the difference
22:14
between gross margin and markup. That is more common than you
22:17
think, by the way. The, you've got businesses that
22:20
have been around for 10/15/20 years and the owner often times
22:24
doesn't know the difference between markup and margin.
22:28
So it becomes a, it's not a competency issue.
22:32
It's a, it's a, it's a knowledge gap.
22:34
If they don't know what they don't know.
22:36
And so we have a very, very structured process where we come
22:40
in and we diagnose things within our four pillar system, our
22:42
profit platform. And you can boil everything down
22:46
in a very, very simple way and then build up from there, right?
22:49
So your 4 pillars are your marketing pillar, your, your
22:53
people pillar, your process pillar and your measurement
22:56
pillar. Doesn't matter to the company,
22:57
doesn't matter to the industry. All companies have those 4
23:00
pillars, your people, your process, your sales and
23:03
marketing and your measurement, your financials and all of them
23:07
touch each other, right. So if you have a sales guy who
23:10
goes out and makes a promise, yeah, yeah, we made 5% on this.
23:13
So we made money for sure, but not if you don't account for
23:15
your overhead. So it's all just a, it's
23:18
knowledge gap. So we were there.
23:20
We do something called the discovery and that is where they
23:23
sit in the analyst, which would be me or one of our eight other
23:25
partners. There's I think 8 or 9 of them
23:28
now, but they send us in for two or three days to do a discovery.
23:31
We find everything that's wrong with the business in two or
23:33
three days. Sometimes it's very painful,
23:35
very brutal and if we can find. Another issue.
23:40
Why? Why is it?
23:41
I know, but I want, I want you to tell you why is it so brutal
23:44
and painful? Because it's an honest self
23:46
reflection of what you don't know.
23:47
And often times because there's two, there's, there's two major
23:51
issues. You don't know what you don't
23:52
know. That's the number one problem
23:55
and the number actually that's the number two problem.
23:57
The number one problem is you often times clients like the guy
24:01
whose ex-wife works in the business, his new wife works in
24:04
the business and his secretary, his girlfriend works in the
24:06
business. I can tell him what he should
24:09
do, but he's not going to listen.
24:10
He's not going to stop sleeping with employees.
24:13
So it comes down to we don't tolerate bullshit, right?
24:20
So when we come in, we're going to tell you what's wrong and we
24:22
look for something we call the portrait of life.
24:24
The portrait of life is why are we doing this?
24:26
What is the purpose of you working as an entrepreneur?
24:28
Is it because you want to JOB or is it your retirement or is it
24:32
your legacy, right? Many people want to pass it down
24:34
to their kids and their kids. Is it your, you know, I got a
24:39
client who works in crime scene cleanup and he's 24 years old.
24:43
His company does 500K, but his Facebook says CEO and he drives
24:47
a used BMW. For him, it's ego.
24:48
There's a, there's always something a portrait of life.
24:51
What is it they truly want? And then you figure out what's
24:56
wrong with the business and tell them how they're not going to
24:58
get there. Look, if you want that second
24:59
beach house, if you want to pay for your kids education, if you
25:02
want retirement, you're going to have to stop doing this.
25:06
You're going to have to start doing that.
25:08
And the problem with that is you don't have to do anything.
25:11
They can keep their crazy. We call it cogent crazy.
25:15
So about 6 out of 10 of the times we don't take the client
25:18
because if they're not going to be honest with themselves, we'll
25:22
look for agreement, acceptance and accountability agreement.
25:28
If you come in to do that analysis, they're interviewing
25:31
you just as much as you are interviewing them.
25:35
I would argue we don't work in sales.
25:39
I'm not here to sell you a service.
25:41
I'm here to figure out what's wrong.
25:42
This is what diagnostician means.
25:44
Whether or not you get it fixed is your choice.
25:46
It's not my business. I don't work on a quota.
25:49
I I don't have a sales goal. I'm here to diagnose your
25:52
business. If you truly like I said,
25:55
agreement, acceptance and accountability agreement is I
25:58
can agree this is wrong, but I'm not going to change Acceptance
26:01
is I'm not going, I can't continue to operate this way and
26:05
achieve my portrait life, which is retirement or what sell of
26:09
the business, whatever the case might be.
26:10
And lastly is accountability. A great example of this, and I
26:14
tell this to my clients all the time, is my meemaw smoked
26:16
cigarettes until she died. And they would say, Sylvia,
26:19
you're going to get cancer if you don't quit smoking.
26:21
And she would say, I know, I know she would agree I have to
26:23
quit, but she wouldn't quit. And then when she finally got
26:27
lung cancer, she said, well, I already have it now.
26:30
I'm not going to quit. And she smoked until she passed.
26:33
I can't. I can lead a horse to water.
26:35
I can show you what's wrong. I can tell you how it's going to
26:37
affect your family. It's how it's going to affect
26:40
your business. But if you don't make the choice
26:43
to take ownership of it and truly change your behavior, it's
26:45
not going to work. That is the discovery process.
26:50
What's wrong with the business? And how do I get my dreams to
26:53
where they need to be? So is what you just described to
26:57
us, Christopher, what you call the profit platform, these 4
27:00
pillars or is this something different?
27:01
You're correct. The profit platform are those 4
27:03
pillars. You, you can boil any business
27:05
down because often times what happens, one of the number one
27:08
things I hear from clients is what we're different.
27:11
Well, you know, we're not, we're not like Walmart and Amazon.
27:15
Coaching doesn't work with Walmart and Amazon.
27:17
We only work with small businesses, small to mid sized
27:20
businesses. So our entire raison d'etre, our
27:23
purpose as a company is helping small companies.
27:27
So you telling me you're different is true, but it's also
27:30
not true. A great example of this is those
27:34
those 4 pillars can you can boil any company down to those 4
27:39
pillars and the common issues you run into are very common
27:44
based on the industry. So for instance, if you're a
27:46
contractor, that means roofing company, foundation company,
27:50
plumbing company, HVAC company, you pay any contracting, they
27:55
run into the same issues, just a different flavor, right?
27:58
So for instance, you don't pack up everything first thing in the
28:00
morning. So you end up having your guys
28:02
end up making extra stops at Lowe's and Home Depot to pick up
28:06
tools at retail versus planning ahead.
28:09
If you're, you know, often times you, they pay subcontractors a
28:13
daily rate. Well, a very common issue with
28:16
that is subcontractors say, OK, well at 1:00 we got like one or
28:19
two things left. Let's just roll it to tomorrow.
28:21
And then we get paid an extra day.
28:23
So the, the issues are very, very common, even though the
28:25
flavor is slightly different. And if you start off with those
28:29
4 pillars and then go from there, you basically it's like
28:33
planting seeds. You're, you're, you build.
28:35
Well, actually it's not like planting seeds.
28:37
It's like building a house, right?
28:39
You start with the foundation. The four pillars are the
28:41
foundation of any business. Got it.
28:47
I know that back during COVID, you were helping a lot of
28:52
businesses through this really turbulent time.
28:56
Which strategies or mindset shifts do you think proved most
29:00
helpful in guiding these businesses to a beneficial exit
29:04
despite all the turbulence that was going on?
29:08
Yeah. So the, the, I would say the
29:10
mantra of that time period is to control the controllables.
29:14
So the Z scores come up quite a bit.
29:18
But essentially economic downturns happen every 10 to 15
29:22
years. You know, the fueling crisis of
29:24
the 1970's, the housing crisis of 2007, COVID.
29:28
And every time that happens it lasts about three years.
29:32
So what I would tell clients when I go in and we go to
29:36
diagnose and I look at their financials during that time
29:39
period and they got slaughtered. You know, they didn't.
29:43
Largely what happens is they say, well, that's not my fault,
29:47
it's Covid's fault. And I would say, OK, well, do we
29:50
have a sales team? No.
29:53
OK, so you're expecting the phone to ring?
29:55
Yes. OK, well then yes.
29:57
If, if the, if something happens beyond your control, then the
30:01
phone's going to stop ringing and Oh well, it sucks.
30:05
But the reality is if you had a sales team, we call them hunters
30:08
and farmers. If you, if you go out and you
30:11
hunt. Now, don't get me wrong, you can
30:13
still be affected by COVID and even if you have hunters.
30:17
But what I'm getting at here is you have to control what you can
30:20
control. If you were hurt or damaged
30:23
during that time period, then I would say, what about that time
30:27
period? Could we pivot and change for
30:29
the future to offset the next economic surprise?
30:32
You know, a great example this. I was just at a automotive
30:35
company in Detroit that's been bending pipes for the automotive
30:40
industry for 50 years. Well, the moment a guy with a
30:42
blue tie got elected, all these incentives went towards
30:46
electrical vehicles, their businesses dried up.
30:49
And then the moment with the guy at the red tie gets in office,
30:52
all of a sudden those incentives goes away.
30:55
The combustion engine industry picks up a little bit.
30:57
All of a sudden they're bending pipes again.
30:59
So I would say to this client and I, this is exactly what I
31:03
said to them. We're relying too heavily on
31:05
automotive industry. What other industries rely on
31:08
bent pipe? Well, we've got aerospace, we've
31:12
got the roller coasters we've got and there's a a million
31:16
different companies out there that rely on bent pipe.
31:18
And they also did some other things that they've got cutting,
31:21
bending, they can basically function as a job shop.
31:24
So what are we doing to prevent that exposure?
31:28
That client in Atlanta, I told you about 45% of their business
31:33
came from Delta Airlines. That's a tremendous amount of
31:35
exposure. So if they lose Delta, it guts
31:38
their business. OK, Then we need hunters.
31:41
We need to bring another. What other major corporations
31:43
are based in Atlanta? Chick-fil-A, Home Depot?
31:47
If we're handling everything we handle for Delta, could we also
31:50
handle it for those other companies?
31:52
Control the controllables is what I'm getting at.
31:57
When you sense that a client's overwhelmed, maybe they're on
31:59
the verge of burnout, you know, like, because part of what you
32:03
do is obviously these strategic things and OK, yes, we need to
32:07
get more hunters out there. But like, I think I get the
32:10
sense that part of what you do is like a mindset thing.
32:12
Like, how do you bring folks back from the verge of burnout?
32:16
Reignite their motivation, get them excited again?
32:20
Well, burnout is largely tied to not seeing the light end of the
32:24
tunnel, right? They, they feel like this is
32:26
going on forever and I'm, I can't do it anymore.
32:29
And this happens quite frequently by showing a client a
32:32
path forward. That's simple, but dedicate,
32:37
right? The difference between
32:38
motivation, dedication, motivation is I'm going to start
32:40
my gym membership in January, but that'll fade by February
32:44
like most gym memberships do. Dedication is following through
32:47
on it so being able to show a client that there is a path
32:50
forward, that there is hope. You know, I, I've got a client
32:54
here in Houston, 70 year old welding supply company, right?
33:00
Just mom and pop that the owner has been, he works seven days a
33:04
week. Every time I see him, he's
33:06
sweating. I've never seen a guy not
33:08
sweating, not working. He doesn't get any days off and
33:11
he's 64 years old. So to him, he's he's to the
33:16
point of just shutting the whole thing down.
33:20
And so he spent. He spent.
33:22
Them in the tank. And he thinks that this is going
33:24
to go until he dies. So you have to show clients that
33:27
there's a path forward in saving and achieving the dream that
33:30
they wanted at the beginning. Why are you doing this?
33:34
Well, he had kids. He wanted his sons to take over.
33:37
It was a prodigal son situation where the son didn't want to be
33:40
in dad's business, so he just kind of that, coupled with the
33:43
fact that he's working seven days a week and constantly
33:45
sweaty, he thinks that there's no hope inside.
33:49
I'd rather just give up and shut the whole thing down.
33:51
There you come in and do what? So it we first you got to make
33:56
the company more profitable. If if son's no longer on the
33:59
table, well, what do you want to do you want to shut down?
34:02
Do you want to sell it? What He's he's like, I'd be open
34:04
to selling it if my son doesn't want it.
34:06
OK. So then the problem with that is
34:09
there's something called marketability discounts.
34:11
When you value a company to determine the what it can sell
34:14
for, they're going to look at a multiplier of net profit or
34:17
EBITDA. And if that company is barely
34:21
getting by, there's a lot of men out there, a lot of hard working
34:25
men and women who've given their heart and soul to a company for
34:28
60-70 years and the company's barely getting by.
34:31
And if you actually were to value the company, it isn't what
34:35
they would sell it for their perception, because that company
34:39
owns a piece of their soul is I had a client this week, the
34:42
bending pie bending. He wants 10 million for
34:44
business. It's not worth 3.
34:47
And so you have to show them their path to getting to 10,
34:51
right. So if you if you want that
34:53
valuation, if you want what you want, OK, Well, we're not doing
34:57
job costing. We have no marketing.
34:58
You're the only you're the main sales guy, you're the main
35:00
estimator. So you have to hire, you have to
35:03
put structure in place, you have to put accountability in place,
35:06
you have to drive profitability, and then you can reach a
35:09
valuation that you want. But if you don't do those
35:12
things, it's not going to happen.
35:14
It's called profit engineering. How is a house built on purpose?
35:18
Houses don't get built by accident.
35:20
And what are the biggest levers to?
35:21
Be on purpose and so you have to find the fight in them before
35:27
they completely give up. If I'm there, if I'm there to
35:29
diagnose, I have to believe they have not given up completely.
35:34
So what are the biggest profit levers that you like to pull in
35:38
that profit engineering? I have a theory on this.
35:41
The vast majority of clients take it on the chain.
35:44
And what I mean by that is that printing company, when I go look
35:50
at a printing company, the top two or three things I look at,
35:52
or what do we charge for business cards?
35:54
What do we charge for funeral pamphlets?
35:56
Those are like the real common things that printing companies
35:58
deal with a lot of and they were charging $2530 for business
36:03
cards and they were charging I think $140.00 for funeral
36:08
pamphlets. I called around and did a
36:10
massive market analysis of what they're pricing and the next
36:15
nearest competitor was at $350.00 for those funeral
36:19
pamphlets versus their 150. What what happens is, and this
36:25
speaks to the, the entrepreneurial spirit of most
36:28
American business owners. They're loving and they're
36:30
caring. They're not greedy.
36:33
I can't tell you. I have a client in Madison who
36:36
his client needed something on a Saturday when they're closed,
36:39
he's like, I'll take it to him. It's 2 hour drive each way.
36:43
Didn't charge him a shipping fee, didn't really charge him
36:46
for one thing that he added on at the last second.
36:49
Most business owners don't hold the line and they end up eating
36:54
their cost to the tune of hundreds of thousands of
36:56
dollars. Same thing with bad employees.
36:58
Sometimes you have bad employees, they've been there 20
37:01
years. They're they're good at their
37:02
jobs. So I'll tolerate their behavior
37:04
because good people are hard to find.
37:06
And if I run their labor utilization, they could be at
37:08
50%. That means they are 35%
37:12
unproductive. The amount of times that client
37:17
business owners just decide it's fine, I'll eat it is more than
37:22
you could possibly imagine. We've got a garbage company in
37:27
Clarksville, TN. The garbage route starts at six.
37:32
Guys were getting in at 3 O clock in the morning standing
37:35
around smoking cigarettes for three hours.
37:36
That's three hours of overtime times 45 drivers times five days
37:39
a week. It was over $1,000,000 of
37:41
overtime just because. And then on top of that, you the
37:47
mortal sin in garbage is not, you know, no one's going to call
37:51
you more upset than a housewife if you forget to pick up the
37:53
trash. So the mortal sin is what they
37:55
call miss pickups and you start to look at who your biggest
37:59
issues are and truly put cost associated with it.
38:04
So we're not talking about raising your printing prices to
38:08
350, but by golly 150 versus 350.
38:12
You're not even charging market rate and and 12, they're 12
38:17
employee business. All of them were underpaid.
38:21
So it's not just a business owner taking on the chin.
38:23
You've got an entire company of people who are barely getting by
38:27
paycheck to paycheck. My grandfather was a Pentecostal
38:30
preacher and he would say there's no a man is not a man
38:33
until he has someone who depends on him and he's talking about
38:36
being a wife and kids. But the one example of that
38:39
that's heavier than that is a business owner, because you're
38:43
not just dependent. Your wife and kids are not just
38:44
dependent on you. You've got 12 employees or 50
38:47
employees and their wives and kids who depend on you.
38:50
And if you don't run that business healthy and profitably,
38:54
they all suffer, not just you. It's not just your retirement at
38:57
risk, it's your employees retirement at risk.
39:00
The vast majority of the time of employees complaining about
39:03
underpay isn't because the owner is selfish or jumping in his,
39:08
you know, his gold coin vault like Scrooge Mcduck.
39:11
It has to do with the owner simply not keeping up with
39:15
pricing, holding people accountable.
39:18
And it's it's and it's across the board.
39:20
I see 80 companies a year, me personally, 80 companies a year
39:24
and they're all exhausted. They all work, more than anyone
39:28
I've ever seen, and they're not getting paid for it.
39:31
So they're not holding their folks accountable.
39:33
So there's a lot of Labor waste. Their rates are not even close
39:36
to market in some cases. And then, you know, you just
39:39
spent a lot of time talking about those too.
39:41
But you previously were talking about, you know, hey, let's go
39:43
out and find new business, let's diversify, right?
39:46
New accounts 100. Percent.
39:47
Many of them are dependent. The pipe ending business I was
39:50
just at is a $10 million business.
39:52
I take that back four years ago they were $10 million, then they
39:55
went to six, then they went to five.
39:58
Last year they ended at 4.4. This is the common issue.
40:03
We don't have sales and marketing, you know, and some
40:06
people say, well, we can't really do marketing.
40:07
No one's going to, OK, fine, but you can have sales.
40:11
You know, sometimes it's even harvesting your current client
40:14
base. You know, often times one of the
40:16
biggest disconnect I see in in businesses is I've got no sales
40:22
people. People call me and if my client,
40:26
if that person goes on maternity leave or that person quits their
40:29
job and someone else comes in, maybe they already have a
40:31
supplier in mind. So they, I just lost the
40:33
business because I didn't stay up.
40:34
I didn't stay in contact with them.
40:36
I didn't manage that relationship.
40:37
I didn't use the CRM. IT it's this, you're constantly
40:41
putting out fires and yet nothing, the structure is not
40:46
there to help get you to a point that you don't have to always be
40:49
putting out fires and IT and drive business for the
40:52
organization. So a lot of consulting firms,
40:56
you know, they promise or insinuate, hey, we're going to
40:59
get you measurable ROI, but Cogent validates results through
41:05
which we'll call the assurance process.
41:07
What is that? So we do things a few different
41:10
ways. One, my favorite thing that
41:12
we've been developing is something called an MFRA monthly
41:15
financial review. So when I go in as a
41:18
diagnostician, I look for two things I look for.
41:21
Is there a reason for us to be there?
41:23
Is there an Roy for us to be there?
41:25
We look for at least 2 to 1. So if there's, you know,
41:29
$1,000,000 worth of problem cost, great.
41:31
That for sure will absolutely there's a reason for us to be
41:34
there. The second thing is absolute
41:38
acceptance of the issue. So the client has to truly,
41:41
truly be willing to change. So we do something all right,
41:47
when I come in, I look at the bat the past four years, This is
41:49
a four year financial review. This is where you're losing
41:51
money. These are all the problems with
41:52
your business. We move forward with a project
41:55
to come in and fix all the things I find that's wrong.
41:58
And then after that project we do something called a monthly
42:02
financial review. Cogent does something that to
42:05
this day I don't think any other consulting firm does.
42:08
We do something called life cycle.
42:10
So let's say we're here for 8 to 10 weeks, then the consultant or
42:15
project director, Lee's site with the client, we stay
42:18
involved unbillable for the next 12 months.
42:22
We want to make sure every everything we put into place is
42:27
fine-tuned, that there's a measurable ROI, that it sticks
42:30
because habits can take 90 days to change.
42:32
So if we change 15 things in a business, I want to make sure
42:36
that when we leave all those 15 things work and that there's a
42:40
tangible ROI. And then when you look at that
42:42
monthly financial review, it should show that net profit
42:46
climbing. We're at 1%, now we're at 4%,
42:49
now we're at 8%. So that there is a provable
42:51
tangible result. I don't care what a consultant
42:55
does, what their background says, if they can't affect your
42:57
bottom line, they're they're screwing you.
43:00
It's not they're the tangible effect has to be an improved
43:04
profitability within a business. You know, you mentioned one of
43:07
the pillars in, you know, your four pillar approach being
43:11
people. How do you think about
43:13
attracting and retaining good talent for your clients?
43:17
There's a, there's a couple different ways to do this.
43:19
So First off, often times you have good people already in
43:22
place. I think people assume
43:24
consultants just want to cut and fire and trim.
43:27
That's not, you can't cut your way to profitability.
43:30
What you do is are we giving them the support they need?
43:34
You know, a great example. I'm going to use pipe bending
43:36
again. But they had just hired a sales
43:37
guy four months ago, but have not given him any structure, any
43:41
goals, any training, any clients to go after, no CRM.
43:45
So what a what a poor. That's not fair to him.
43:49
And then and then there's no result.
43:50
You say, well, I tried sales guys, but they didn't work out.
43:53
No, you didn't. You got to give them the
43:55
structure. You got to give them the
43:56
support. And then you drive
43:57
accountability. You cannot measure, sorry, you
44:00
cannot manage what you don't measure.
44:03
And so people, to your question, I want to make sure that the
44:07
people we currently have are the right people.
44:09
Now, every once in a while, it's less than you think.
44:11
Every once in a while, you have the wrong person in the wrong
44:14
spot. And you would either need to see
44:17
is there a value in them in a different department or should
44:19
we get rid of them? Well, if there's a safety issue,
44:23
if there's a theft issue, it's time to get rid of them and then
44:27
you need to go looking. Now don't get me wrong, LinkedIn
44:30
and Zip Recruiter can be soul sucking at times.
44:32
It sucks, but it works or it wouldn't exist.
44:36
There's recruiters, you know Cogent has talent solutions.
44:39
We will go out. We will hunt down the right
44:41
people for a position, but I don't care if you use Cogent's
44:44
recruiting or not. I don't get anything for it.
44:46
I just want it fixed. I need those people in the right
44:48
spot so that we can drive ROI to the bottom line.
44:51
If we can't get that bottom goal, then it doesn't.
44:54
The whole thing's a waste of time.
44:57
Christopher, I want to switch gears on you for a moment and
45:00
dive into a particularly big challenge that you've had to
45:05
overcome in your life. Whether it's personal or
45:06
professional, walk us through what that was and how you got
45:10
through it. Yeah, like I said before, I, I,
45:12
I came from nothing. I, I, I had a, a kid in high
45:15
school and I, I dropped out of college and, and it was a, a
45:20
complete bad start. You know, didn't know my dad
45:25
growing up. If you name it, I, I, I, I come
45:27
from Pasadena, TX. It's, it's as bottom as it gets.
45:33
And I think part of the situation was having a child and
45:38
regardless of the age will drive motivation to change and meeting
45:42
the right partner. My wife and I've been together
45:44
20 years and reading, meeting the right partner, she brought
45:48
out the best in me. I had a purpose.
45:50
And I think that a lot of people, the hardest thing for
45:53
most young people is finding a purpose.
45:56
But once you find that purpose, you know, like I said, I worked
45:59
92 days straight in aviation to pay for a wedding because I
46:02
didn't have the support that that's my, that's my struggle
46:06
story. After that, I built 2 businesses
46:08
while doing that at the same time.
46:10
So you're talking 9000 hour weeks.
46:13
If I paid for college through that, I didn't take loans out.
46:16
I fixed my business first, then paid for college 6° later, which
46:21
I, I think are, I think there's a little too much weight put
46:24
into college degrees. But I got them because I, I got
46:27
them for me, not for my career. And it has been when, when you
46:32
talk about you, Rob Raymond, the owner of Cogent is the same
46:35
story. He comes from nothing.
46:38
He served in the military. I mean, the Cogent is full of
46:41
these stories of people who have been exactly where they've been,
46:45
Our clients have been exactly where we've been.
46:48
And it is something that is truly the American Dream, to
46:52
come from nothing and to make your the American Dream come
46:56
true. Christopher, do you think you're
46:58
sort of wired from birth to be this persistent, this driven?
47:03
Or do you think having a child so young was a bit of a
47:08
catalyst? For you, I do think it was a
47:11
catalyst. I do it's I think you're talking
47:13
about pieces here, right. So I do think that a big part of
47:18
mindset, you've 2 mindsets in the world mindset is something
47:21
happened to me and therefore I can't achieve what I need to
47:25
achieve or something happened to me, but I'm not going to let it
47:28
stop me. And I think those two things are
47:31
massively different mindsets. And that's again, it's
47:34
entrepreneurs. Entrepreneurs have all gone
47:37
through this is what happened to me, but I'm not going to let it
47:39
stop me again. The idea that my father-in-law,
47:43
my girlfriend's dad, hated me. And I thought, I'm not going to
47:46
accept that. I'm going to learn to enjoy
47:49
whiskey and I, I hated it. It was terrible.
47:51
And I grew to love it. And then it became this romantic
47:55
story, and then it became a business.
47:57
Then it became our future. I, I, I couldn't be a bigger fan
48:00
of people who picked themselves up by their bootstraps.
48:02
It is a real thing and everyone who's pulled it off will tell
48:05
you that's how he did it. I'm going to build on what you
48:08
were just saying about something happened to me.
48:11
What was me versus something happened to me, and I'm not
48:13
going to let it define me. As much as possible, I try to
48:17
coach myself to say that's something that happened for me,
48:22
as painful as it may be in the moment.
48:25
It taught me something. It steered me in a different
48:27
direction. It lit a fire under me.
48:30
And so in some ways, this is something beneficial that
48:34
happened for me. How does that resonate with you?
48:37
The, the, for some reason, the word dynamic came to mind when
48:40
you were just saying that you have to be dynamic, you have to
48:43
be resilient. Those two words are probably the
48:45
most 2 important words for any entrepreneur or anyone.
48:48
You don't have to be an entrepreneur, just people trying
48:50
to get through life. Life is hard.
48:52
You know, I've got 2 teenage daughters that are 19 and 20.
48:55
I've told them life is hard, it sucks.
48:58
You have to be dynamic and you have to be resilient.
49:01
And if you can't be those two things, then it becomes this is
49:04
what happened to me versus this is what happens for me to grow
49:09
and and become better. So as you look back over your
49:13
journey, Christopher, what's one piece of advice that you wish
49:16
every entrepreneur would embrace early on?
49:20
Know when to get out. Know when to hold them.
49:24
Know when to fold them. Yeah, yeah.
49:25
When I talk about being dynamic, my again, my Pentecostal
49:28
grandfather, he would say, he would say that if you know
49:30
everything there is to know about one thing and know
49:33
something about everything, then you can have a conversation with
49:35
anybody. And I think that I did not
49:40
imagine or dream that I would start a marketing company in the
49:43
spirits industry or radio show on ESPN or whatever.
49:47
I, I didn't expect that it, it, I was curious and I would say
49:51
you need to be curious in life. And I think there's this mantra
49:57
that you should never give up. And I disagree completely.
49:59
I think you should know when you need to exit.
50:02
You know, I think a lot of people dream of having a bar,
50:05
but bars are not very profitable.
50:06
It's a it's a dream that you have, but it can be very
50:10
difficult. And I think at some point,
50:13
whether you want to be a stand up comedian or you want to be
50:16
whatever your dreams are, you should know.
50:19
Oh, that's a dicey subject. As even as I'm saying, and I'm
50:23
talking myself out of it, I, I, I've, there's been times I've
50:26
had to move on from things. And I think that you, it's, it's
50:28
benefited my family because it's not about me.
50:31
I'm not saying you should give up for you give up for those,
50:36
give up for those who need you, right.
50:37
Like my wife and kids. I, the spirits industry has been
50:40
great, But I, I knew it was time to leave.
50:43
And when the time was right, it it was the right call.
50:48
I look back on that situation and think we were we were
50:50
thriving. We were on top of the game and
50:52
it was the right call. And I knew, and I'm glad that I
50:56
did it. So I want to dive into this just
50:59
for a second because, and I think makes me laughing because,
51:02
well, in some sense it does. And this is something that as an
51:05
entrepreneur I've wrestled with many times before, you know,
51:08
working on a business that just doesn't seem to be working out.
51:13
And in some cases, I just needed to keep turning the dials, keep
51:16
turning the dials and eventually find success.
51:20
And in other cases, like, I just felt like I was banging my head
51:23
against a brick wall and it was time to throw in the towel.
51:27
But I look back on some of those instances and I'm like, did I
51:30
just not try hard enough? Did I quit, you know, six months
51:33
too soon? And so like I always like to
51:36
find sort of these metrics or these rule of thumbs or, you
51:39
know, these indicators that say this is the time to fold it, you
51:44
know, this is the time to to stay in the game.
51:47
How do? You think about that.
51:48
You're hitting the nail on the head.
51:50
So here's the thing. I realized that it may have not
51:52
come out right the first time, but but play with me here.
51:56
There's something called the sunken cost fallacy, right?
51:59
You're playing poker. You realize you've already got
52:01
$1000 in the hand or 500 bucks or whatever the number is and
52:05
you think I don't want to fold because if I fold, I'm accepting
52:08
all the the loss. I'm realizing the loss of the
52:10
money I already put in there, but it's at the sacrifice of
52:14
what of the additional money you're going to end up losing if
52:16
you don't play it smart. So to your point, which is what
52:19
I'm saying by the way, is you have to have a clean set of
52:22
metrics and a clean OK. This is when this has to change
52:26
because if you're doing it just because you think it'll happen,
52:31
if you don't give up, There are 1,000,000 people that I know
52:34
personally that have, you know, they wake up one day and they
52:37
realize it's been a complete waste of time.
52:39
And I'm not talking about their business per say.
52:41
I'm talking about I want to be a movie star or I want to be a
52:44
rock star. I want to be a stand up
52:45
comedian. I know people who are great
52:47
comedians and their life's falling apart around them
52:51
because they have, they haven't made it yet and they're not and
52:55
they're not trending towards making it.
52:57
And the question then becomes, well, should I give up or not?
52:59
Well, it depends. If you're about to lose your
53:01
house and your wife, maybe you should, you know, maybe there
53:04
should be a clean metric of knowing when to, to cash in,
53:07
cash out, so to speak. Yeah.
53:10
Well, let me know when you come up with that spreadsheet where
53:13
we can plug in all the variables to come up with the the right
53:16
calculation. How about a a helpful resource
53:19
that's that you've enjoyed that good for you.
53:22
A book, a podcast, a course, something you'd recommend to our
53:25
audience. I'm a huge fan of Ryan Holiday.
53:30
Ryan Holiday. One in particular, any one of
53:32
his books. Well, all of them, literally all
53:35
of them. Ryan Holiday is a Stoic and the
53:37
mantra of Stoicism is very in line with most entrepreneurs I
53:41
know. And that is no one's going to
53:43
rescue you. You have to rescue yourself.
53:45
Things can happen to you. It could be terrible, it can, it
53:48
can be tough, but you have, I, I tell this to clients all the
53:52
time. If you don't manage the business
53:55
of the business, no one's going to manage it for you unless you
53:59
hire someone to manage you for you, like a president or AVP of
54:01
operation or something. I, I've got architectures,
54:06
architects that all they want to do is draw.
54:09
That's their passion. They don't want to run the
54:10
business that they own. OK, that's fine, you can do
54:13
that. But if you don't set up the
54:14
framework for it to run, it will not run itself.
54:18
If you do not steer the ship, the ship is going to hit the
54:21
rocks. And so I would say that anything
54:25
by Ryan Holiday about taking ownership of your life, asking
54:29
for help, learning, being dynamic, being resilient to
54:33
hardships, Ryan Holiday is 100% my recommendation.
54:38
And good stuff. I've read several of his books
54:40
and I enjoy them as well. What's the future of Cogent
54:43
Analytics looks like? So we are currently primarily in
54:47
two time zones, central and Eastern.
54:50
The goal is to roll it out nationally.
54:55
I, I could not believe more in what we do again.
54:59
As a kid, I never dreamed I would be helping save other
55:01
businesses and now that I'm here, it is the dream that I I
55:04
will work for Cogent for the rest of my life.
55:06
I will not leave until the ship goes down.
55:09
Helping small business owners save their business and their
55:13
and their future, their legacies.
55:16
So the future of Cogent is aligned with the future of
55:20
Christopher Hart. You guys are going places
55:22
together. That's right, yeah.
55:24
Love it. Just one more question for you
55:26
today, Christopher. But before I ask it, I want to
55:29
do 3 quick things for the audience.
55:31
First of all, cogentanalytics.com.
55:35
You've heard Christopher talk a great deal about what they do,
55:38
how they do it. Their spirit is really in it to
55:42
help the small, medium sized businesses.
55:45
Go check them out cogentanalytics.com.
55:48
And if you're enjoying our show today, please take a moment to
55:51
subscribe wherever you're listening.
55:53
It sends a signal that helps others discover our podcast.
55:56
So thank you for taking a quick moment to do that right now.
55:59
And as a reminder, you can be the hero advisor that helps
56:03
clients give their employees access to therapists, doctors,
56:06
and prescription meds while paradoxically increasing their
56:10
net profits, real gains that can change how businesses value.
56:13
Contact us today at Add back benefits.com.
56:16
So last question for you, Christopher.
56:18
A year from now, what is 1 very specific thing that you hope to
56:21
be celebrating? Well, it's a great question,
56:30
honestly, and I hate to to beat this drum over and over again,
56:33
but it truly is. There's something very rewarding
56:37
about wrapping up a project for the client.
56:39
Our process is very structured in a way that I come in to
56:45
diagnose the first time we fix the business.
56:49
We manage for about 12 months after in life cycle to make sure
56:52
that we keep things in in goal. And then I come back for a
56:55
rediscovery at the end of that time period to see how things
56:59
went. And there's nothing more
57:01
exciting than walking in and seeing that.
57:03
Oh my gosh. A great example is a client in
57:06
Moline, IL as an electrical contractor.
57:10
But the best profit that they could have hoped for when I came
57:13
in was 15%. We were in for about a year.
57:16
I came back, There's this we it was great seeing the guy.
57:20
I remembered him like it was yesterday.
57:22
And their net profit was up to 28%.
57:26
OK, thanks. It was, it was, it was the most
57:28
exciting thing possible because this guy was just a guy in a
57:31
truck, didn't want to run a business.
57:33
The best he could have hoped for was 15.
57:35
By the way, he was at 3, 3% before we came in.
57:39
We run prime performance where it basically says what your
57:41
profit could be if you were to be more stringent in a few
57:44
things. And his profit had grown to 28%
57:47
and he was so excited. I was so excited.
57:49
And then we went out and celebrated.
57:51
There's this great mustard in Moline, IL called Bochy's.
57:55
So we went and we got a pretzel and and some mustard to
57:57
celebrate. So it was just coming back and
58:00
seeing a client a year after we run a project is probably the
58:02
most exciting. I'm I am in my day-to-day job.
58:06
OK, so for that one specific client, sorry, I've got a follow
58:08
up on that 'cause they were at 3, best possible they could have
58:12
gotten to is 15. So how did they get to 28?
58:15
Yeah. So, so a couple, couple things.
58:18
We run something called prime performance where it basically
58:20
looks at, if you look at the past four years and you were to
58:23
take the best year of material margin, your best gross profit,
58:27
your best line item on each PNL and it'll give you a what we
58:30
call prime performance. It does not mean and I misspoke.
58:33
It does not mean your best possible.
58:36
It means what you could hit if you were consistent, if your
58:38
shot grouping was tight. You looked back at all their
58:40
different metrics before and if they could hit the best of what
58:43
had happened in the past, they'd be at 15%. 15%, right?
58:47
And it's not, again, it's not perfect, it's not their best
58:49
best, it's just best of each item of each year.
58:51
Then you piece together AP and L So we went in, we standardized
58:56
their pricing model. They were, they were estimating
58:59
shooting from the hip. He had like a 90% closing rate.
59:02
If you're a contractor and you have a 90% closing rate, you are
59:06
selling for bottom dollar, I guarantee you you're losing
59:10
money or leaving money on the table.
59:11
You typically want to be around 40 to 45% and then you want to
59:16
basically have a sales team that can estimate more frequently so
59:18
that you can increase your revenue.
59:21
In this particular case, his pricing model was all over the
59:24
hip. I mean his sales guys were
59:26
inconsistent. There was a 73% swing on 4
59:30
estimators. We had them estimate the same
59:32
job in a silo. There was a 73% swing in their
59:35
estimate for the same job. So standardizing that towards
59:40
the more appropriate end. Now his bid to win ratio dropped
59:43
to about 50%, but that's better than what I was hoping for.
59:48
And his sales jumped more than 50%.
59:51
So his net profit went up, his sales went up.
59:53
And as you know, if you sell, if your sales increase and your
59:57
overhead stays appropriate with it, it'll actually pull up your
1:00:00
net profit potential. So if you go from 1,000,000 to
1:00:03
3,000,000, you're no longer at 15%, it's going to pull up your
1:00:06
net profit with it. So his sales increased, his
1:00:10
gross margin increased and his net profit sky rocketed.
1:00:13
Awesome. So the thing that you want to be
1:00:15
celebrating a year from now is more successful client
1:00:18
engagements. 100% it's again if it's the most fulfilling and
1:00:22
rewarding job I've ever had, I want to do it more.
1:00:25
Yeah, well, Christopher Hart from Cogent Analytics, I want to
1:00:29
be the first to thank you for sharing both your time and your
1:00:31
story with us today. I really appreciate you being
1:00:33
here. Yeah.
1:00:35
Thank you so much. It's been, it's been a blast.
1:00:37
I appreciate it. Folks, that's a wrap on another
1:00:39
episode of the Inspired Stories podcast.
1:00:41
Thanks for learning with us. And if one thing stood out, put
1:00:45
that into action today.