Dave: 0:50

Thank you. You, I'm not sure if you can hear me. Hello, hello, hello, hello, hello, hello, hello, hello, hello, hello, hello, hello. We're having trouble streaming speaking. We're having trouble streaming speaking. We're having trouble streaming speaking. To sean like okay, hello. Why is nobody uh to sean like okay, hello? Why is nobody uh to sean like okay, hello. Why is nobody uh, all right, can you hear me now? All right, can you hear me now? All right, can you hear me now? All right, I think I might have fixed it. Looks like my mic is working, so, all right. Well, this is the. When you go live, this is something that happens sometimes. So, thank you, all right.

Dave: 1:25

So we're here with another episode of the Business Unscripted Podcast, everybody. So, as you know, we are focused here on our experiences, but also giving advice on things that are happening in the business world, things that we've helped clients with, things that we've gone through in our own business. So, with that and the audio issues that we had this morning, let's grab our cup of Joe. Let's jump into the show, all right, everybody. So, as you may notice, dwarin if you're watching the video, dwarin is not here today. He rest in peace to his ankle. He rolled his ankle this morning, uh, and right now he is, uh, he is in bed. So, uh, dwarin, if you're, if you're watching this, um, go ahead and uh, you know, I hope you feel better, I hope you get some rest, okay, um, but feel better to our buddy Dwarin, um. But so, with that, I hope everybody's having a wonderful and amazing week and you were able to kind of be productive this week.

Dave: 2:34

You know, it's crazy when you think of productivity in business and everything, and this week for me was kind of impactful. I'm going to give an update. So for the longest time I always thought I had ADHD. I was like switching back and forth from different things before finishing, like quickly, or I would be going to do one thing, something else would catch my attention, I would get distracted, right, and then I would, I would do that thing. And so for the longest time probably 8, 10, even 12 years is when I really was noticing and I was like man, I should go get this checked out. But I was always, you know, basically told no, no, you're fine, you're just, you know, a worry ward, or you just think everything's always wrong with you. So I just never did until recently and finally was able to kind of go through that whole process of getting identified.

Dave: 3:38

What I have and I can say this week has been probably the most, I would say, focused, productive week for me, once I was kind of diagnosed and was able to kind of get some medication and testing this out. Obviously it's a journey, I'm sure you know. Talking with the nurse practitioner that I was talking with you know, he said you know, if you talk to your peers it's more often than not most of them are probably going to be, or if not, the majority of them are going to have some sort of ADHD kind of form. And that's me. So I will definitely say that this week I have been happy with my results for sure, given the kind of focus that I have throughout the day, and that's what I'm hoping. And so the reason I want to share this story is if you might be feeling like you have something, whether it's ADD, adhd obviously there's some differences there and it's out of my pay grade I would highly suggest going and at least talking to somebody seeing if it's something that you have, because it may help you.

Dave: 4:48

You know, for me I would be productive, but not as productive as I could be, because I would get distracted going in multiple different directions. And as business owners, that's us right, and the majority of business owners have some sort of form like that, because we don't want, you know, we want to be on our own. We don't typically like to work for somebody else, we'd like to get things done, et cetera. So that was kind of my week this week, you know, kind of getting some new things launched, as you guys all know about the Profit First Clarity Program. So we've been working on a lot of that back end to work on getting that launched. So that's something that we're working on this week and everything should be ready to roll out and end it today, you know. So that's awesome. Dwarin and I have been working on some other projects as well, some partnership things there. So that's a kind of update on Dwarin's office. I was looking forward to seeing his new office set up but you know, with his rolled ankle, hopefully he can get some rest and we'll see it next week.

Dave: 5:42

But as I was kind of thinking, you know, when, dorn let me know about this this morning like, okay, well, what do I want to talk about? What do we want to kind of cover in today's episode right, and the biggest thing I think that happened in, let's just say, business world this week, right Last Saturday was Hermosi's book launch right. We've talked about Hermosi on our podcast. We've talked about different strategies that he covers and different topics and we like to particularly, you know, follow them and talk about them and use a lot of his videos as references and points of things to talk about. And so I attended the book launch.

Dave: 6:21

Now, I attended the majority of the book launch. I didn't stay for the whole thing. It was. You know, the invite goes out and it says it's two hours and then I think the actual live one on Saturday ended up being like I think it was like nine hours or something like that, because he just kept adding, you know, and small business owners and as small business owners recognize, as any business, that's $25 million or less was it good or bad? Was Hermosi's book launch good or bad for the small business owner? And I feel like there's pieces of both, and I feel like there's pieces of both and ultimately, I feel like, you know, it's got some bad points and it's got some good points. And let's start with the bad first. And the reason why I feel like it's bad is one.

Dave: 7:17

The concept that Hermosi is putting out there is great, but you have to understand the motivation behind what he's doing. And if you didn't, and you weren't live on the, on the podcast or on the the book launch, you know he's given away a lot of stuff for free, right, um, he gives away. You know a lot of stuff with the initial. If you, if you upgrade it or if you're just live, we gave away a lot of free content, free course, right, et cetera. But what you don't understand, and if you try to replicate that, right as a small business owner, if you're like, oh, I'm going to give everything away for free or I'm going to do, like this free donation, I'm going to give away all this extra content and all this extra work, you have to understand that Hermosi's main goal is to make future clients for him and he's already a multimillionaire.

Dave: 8:11

He said it on his book launch. Right, he's 250 million or something like that is what all of his business have done over the last year. Well, his goal isn't to find business now. His goal isn't to make clients or sign up clients to his business today. His goal is to create future clients so that they can sign up for him and he can invest in them and make a bigger return. So if you try to replicate his book launch by doing a webinar and saying, hey, I'm going to give everything away for free, I'm going to share my course, I'm going to share my book, I'm going to share my thoughts, you're missing. To share my book, I'm going to share my thoughts. You're missing the point, because what you need as a small business owner, you need people today to sign up. And so that's where, if you try to replicate it and you give away things for free, there's a difference. There. He's trying to create clients for the future.

Dave: 8:59

You, as a small business owner, need to have clients today. The good right Some of the things that I thought that he did, you know, obviously, the process right. The money model concept all the ideas there are great. You know I understand the importance of having systems in small business and you need to ensure that you do have some money models created. And so the book I'm never going to tell anybody not to read the book. I think the book is going to be great. In fact, I'm waiting. I just got my notification this morning that it's going to arrive today. So I'm looking forward to kind of looking through that, reading through that. But, as a small business owner, you need to be focused on how do I get people to sign up today? Right, how do I get people to sign up today? How do I get people to get started today? And while you don't want to focus on giving things away, you want to focus on how can I create amazing offers his first two books that I can get people started and get people up and running.

Dave: 9:56

And that's the good I think that came out of Hermosi's book launch that you can pay attention to if you ever go back and you watch it. You want, you want to focus on the back end. That he did right, if you look at the back end. Right, he had great notifications up. He had great affiliates and, as small business owners like you, need affiliates. You need partners that are actually going to, you know, use their audience to help you grow. You need the back end systems to send the reminder emails, the text messages. You know I can't I can't even probably count the number of emails and text messages that I got just as reminders of hey, here's, you know we're coming up. You know you're right, you know we're four hours, oh, we're live now, right, or hey, oh, by the way, like here's your stuff at the end.

Dave: 10:44

Putting those systems in place are, uh, the positive I think that came out that you can look at as a small business owner and say what should I be doing as a small business owner when I want to do webinars or courses etc. And that model right and that system of automating a lot of that stuff is great, because then you don't have to worry about manually doing it all yourself, right? So so learn from that aspect, not learn from the actual like messaging and the impact that he made, because you as a small business owner are in a different focus. You're trying to actually generate business today, not trying to generate business into the future, which is what Hermosi was kind of doing with that book launch. So I loved it. I mean, obviously I'm a big Hermosi fan, so you just got to always like listen things you know in a peace of mind.

Dave: 11:30

One of the other good things is he understood that, like his, you know what was it Three or five? Oh, it was a $5,000 offer, right, or $6,000 offer for donating the 200 books to get the extra content. He understood that the majority of his audience right Wasn't going to be able to just afford six grand. So he proactively went out and made a partnership with a firm to have available financing available right on the spot. And so that's. Another good thing that you can learn as a small business owner is are you offering your network, your potential prospects, financing options? Do you even have that within your business so that you can potentially get your full value upfront and then they get to break it up over time?

Dave: 12:19

So I do love that and I'm not going to get into the four main kind of models and all that kind of stuff, because I really feel like that's something that you have to go back and learn yourself and how your business is. But the concepts there are great the money model idea, the money model book great but don't try to replicate. That's the only thing I want to say. If you watch it and you're a small business owner, don't try to replicate what he did in the messaging and the offering, because he's not looking for business now, he's looking for business into the future. So just keep that in mind. I think it's great, I think it's amazing what he did. I also think it's great what he's doing for the business world, but he's also in a different place than 100% of small business owners right now. With that, I hope you guys are having a great week. What I wanted to also say is we're looking to grow. I get this word out.

Dave: 13:15

If you are watching this and if you in the future, if you watch any of our past episodes with me and Dwarin, and if you have any questions throughout the show, make sure you drop them down below into the comments, or afterwards. If it's after the show and you're watching a replay you can drop them in the comment section or either either shoot us an email as well we can make sure to answer those on a future session. But if you've also, you know, do all those fun algorithm, these things that you know, do all those fun algorithm, these things that you know, help us as we're trying to get the word out about this podcast. So if something has hit you and the advice has worked in your business, feel free, please, to not only subscribe and follow our channel if you're watching it on YouTube or anywhere else, but give the video like right and then share it, because our networks are only as big as you know where they are currently. But if you can actually share the show for us and you can share it to your networks, maybe somebody will also get a piece of advice that will help them one way or another.

Dave: 14:17

And you know and I'm a big proponent of you know you can never have too much education. You can never have too much learning. I always feel like you you want to learn different points of view, you want to um your different aspects of business, um, or life in general as well, um. So you can never have too many things that you're listening to, um, and. But what you don't want to do is just try to implement it all. Figure out what's going to work for you and then implement that.

Dave: 14:45

But one of the other things from Hermosi's book launch and some of the other stuff that I've been talking about, obviously, with our Profit First and our Cash Clarity and all that kind of stuff that we're launching the Profit First Cash Clarity system and Alex Hermosi kind of said it in his book launch and I'm going to kind of replicate it here because I've been saying that before you know, 82%, 82% of business owners that are small business owners are failing or will fail because of lack of cash management or cashflow. So, of you, if you're watching the replay or you're watching it live, you know four out of five of you that are doing this are either right now failing or will fail in the future because of a lack of a cash management or a cashflow system within your business. Um, and understanding that so that you can make better financial decisions, um, and that's something that I've been saying even before him once he brought it up in his book launches. It's an important stat, right, um, cash is the lifeblood of any business and having an understanding that is the importance, whether you're, you know, 250 to $300,000 a year or you're some of the organizations that I worked with that were up to 150,000, sorry, $150 million a year. Like, creating a cash flow and a cash management system was important in all aspects, and those kind of processes you know pertain to, you know, anybody under 25 million as well.

Dave: 16:07

But the interesting points that Alex mentioned and it was kind of, I guess I kind of had a general understanding of this, but I didn't know the full range was 54% of business owners are either breaking even or losing money. So over half right. So if you're in your next networking group meeting or you're at your next small business event, look around that room, because half of those people are either break-even or losing money right now. That's crazy to think, right? When you sit in a room of a hundred people and over 52, right, 54 of them are going to be, you know, losing money or break even. And then you know what the other 46% most people would just assume, right, that they're living, you know, high on the hill, they're living in a mansion, they're driving Lamborghinis. But the median income for the other 46% of people that are business owners, they only make $48,000 a year. So they're putting in the 40 to 50 to 60 hour work weeks, maybe even more. They're stressing out over bills getting paid, they're stressing out over employees getting paid, they're stressing out over the invoices and when they're going to get paid. And they make $48,000 a year, which is insane to think. After all the hours, after all the hours they're putting in, they're probably making less than people that are working at McDonald's or minimum wage jobs.

Dave: 17:29

But we do it because we have a passion for it, right? We do it because we believe that there's something greater on the horizon. But the problem is that you're probably doing it without the cash management. You're probably doing it without the cash flow. And when I say about that, it comes into a thing called Parkinson's Law. And what Parkinson's Law states is that your work will expand to the time and the resources which you give it. And in business, that pertains to your spending, right? So your spending, your expenses in your business will expand to the resources which you give it.

Dave: 18:15

And you're probably thinking well, that doesn't make sense, dave, like you know, I just pay bills when I need to pay bills and you know I take money when I can and that's right there. So if you have a habit of logging into your bank account every single day and you look at your bank balance, you're like, oh okay, I can spend some money today. Well, how do you know where that money is allocated? How do you know what the money should be spent on? Because you don't have a cash management system, right? You just log in. That's not a cash management system. Logging in and seeing your bank balance isn't a cash management system. A cash management system is actually what we call profit first and we've talked about on this episode.

Dave: 18:53

You know the show before is being able to log into your bank, because we don't want you to stop doing that. We highly suggest you have to have an understanding of where cash is within your bank account. But when you log in, you know exactly where the money is to be spent. And, as Mary just says here, cash is king. Cash flow and understanding how to buy and sell and connect to our customers Absolutely, cash is 100% king. But with that, you also want to make sure that you have an understanding. So when you log into your bank, instead of just seeing one big plate of money which you're going to go spend, you have to realize that some of that's for you as the business owner. You have to pay yourself first. Some of that is for taxes, some of that needs to be for your profit allocation or your profit savings, your reserve accounts, and then the rest is then your expenses. So, as we said in last week's episode, if you haven't listened to that, go listen to last week's episode.

Dave: 19:52

I brought up the important question I asked Dwarin on the show. I said Dwarin, who's your best employee and why? And Dwarin, I forgot the name that he mentioned, but he mentioned one of his employees names and I said okay, you know and if you're listening to this right now, think of that. Who is your best employee? What's their first name and why? Give it some thought and then pause. You know, if you're watching a replay, pause really quick and think about that and then you can. Then you can, once you've figured out the answer, come back. But if you're watching a replay, pause really quick and think about that and then, once you've figured out the answer, come back.

Dave: 20:25

But if you answered anybody else let's say you said John or Jane or Jim or whatever, janice, I don't know Ask this question to yourself Would they come in on a weekend with no pay? Would they stress over bills getting paid? Would they stress over bills getting paid? Would they stress over themselves getting paid? Would they give extra work if you weren't willing or you didn't have the funds to pay them? And 99.9% of the time the answer to that question is going to be no, they're not.

Dave: 20:54

So if you think of your best employee and you're like, oh, this guy's great because he does all this work, well, what if you refuse to pay him because you didn't have the money? Would he still do that same work or would she still come in and do all that work? And the answer is no 99.9% of the time. And so you have to realize that the number one most essential person employee in your business is yourself, because you're the one that's coming in, you're the one that's working the 40, the 50, the 60 hour work weeks. You're the one that's coming in, you're the one that's working the 40, the 50, the 60 hour work weeks. You're the one that's coming in right, and you're stressing over bills. You're stressing over whether everybody in your business is going to pay. You're stressing over where the next income is going to be.

Dave: 21:32

And so when we go back to Parkinson's law, right, if you log in and you just look at one balance and you're like, can I pay myself today? That's the problem. See, as a business owner, you have to have a cash management system in place so that you know that every single week, you are getting some sort of payment for the effort that you're putting in. You have to stop treating yourself like you're the last resort right, because what happens first in business or in life, what you do first gets done. Right, what you do last will get ignored. So if you're always putting yourself last, you're always putting yourself last and you're paying yourself last, that gets ignored Because, as we just said, parkinson's law, your spending expands to the resources that you give it.

Dave: 22:19

So if you just have one plate that all your cash is sitting on and you're the last one up, so think of it as like the you know, a Thanksgiving buffet line, right, your cash is the big Turkey on the platter. You got 50 people at your, your, your part, your Thanksgiving party. But everybody walks up to that plate and they take from that plate. Okay, and you have vendors, right, all 50 of those people are your vendors. They're coming up, they're taking, they're taking, they're taking, they're taking. You, as the business owner, the host of the party, walk up last and there's like scraps. Right, there's nothing good. Maybe your favorite's the leg and the legs. Both legs are gone, both wings are gone and now you only got dark meat left.

Dave: 23:03

Well, there's one of two things you're going to do next year, right, one if you're going to buy the same size turkey, you're probably going to limit the number of people that come to your party, right, so that you get a better, you know, because then there's more money available. Or you're going to try and buy a bigger turkey and in that case that's where you look to grow. But if you have no way to grow right now and you just need to focus on managing your finances. What you need to do is you need to look at and limit the turkey that's allocated to each one of your buckets, and so for yourself, how this works is when you allocate it between the income account from the income account to your profit, your owner's pay your taxes and then your operating expenses. You become more innovative, and we talked about this last week as well, with the Savannah Bananas as the number one example. They became more innovative because their plate for operating expenses was smaller. So they had to understand hey, I don't know if I can afford this, maybe $50,000 or I think it was $100,000 ticketing system, but they're like, hey, let's just go out and buy tickets ourselves and do it manually, because we can do that right now, and they're able to be more innovative. So same thing with you. As you limit your spending, as you limit the amount that goes out for operating expenses, you become more nimble. You become more efficient in the things that you're able to do within your business.

Dave: 24:57

Mary, we have considered ourselves first. Suppliers were first. Never considered ourselves first. Suppliers were first, then employees next. Otherwise you don't have a business. So here's how I'm going to explain this to you.

Dave: 25:08

So when you have sales right, you have revenue. You have top line revenue. You then have your suppliers, your direct impact costs that you know and subcontractors. So you take your top line revenue and then you subtract supplies and materials that are directly related to providing that service and then you have your real revenue number. So, for example, let's say you have top line revenue of $500,000, but you have materials and subcontractor costs related to directly providing that product or service of, let's say, 250,000. So now your real revenue is $250,000. And that's where we look at allocating out to the business owner, right? So we allocate to profit, to owner's pay, then we allocate to taxes, because you always got to have to pay the tax man and then whatever's left is your operating expense money. So profit and owner's pay, you're always paying yourself first.

Dave: 26:02

So in our example, right? So let's say we did like 5% of the profit, so of the $250,000, we would put $12,500 into the profit account for that year. Throughout the year it would have built itself up. Owners pay. Let's say we wanted owners pay to be like 30%. So that would have been like 75,000. And then another let's just say 5% or 10% to taxes. So $25,000 would have been allocated to taxes and then that remainder would have been the operating expenses that should have been spent on the business for that year.

Dave: 26:32

So that's how you can begin to kind of put yourself first. And again, if you're not used to doing this, the process isn't to go from zero to hero overnight. The process is to go from zero to small steps, small increments each quarter, because profit is a habit. Profit and building a profit in a system is a habit. It's not something that you just do overnight. It's not cold turkey. You want to make sure that you're taking small incremental changes to then build that habit up so that it's more comfortable to do it Right.

Dave: 27:02

So you know, mary, in your example, if you're not used to putting yourself first and you're kind of left with scraps Right, then you don't want to just take all the you know the whole Turkey and try to allocate it to yourself. And then, you know, really try to limit your spending. You have to look at where the money's outgoing and then look at who. Who can I negotiate with Um? Can I? Can I extend, extend payment terms on some of my vendors? Or, you know, operating expenses Can I renegotiate. You know utilities, um, you know things like. You know phones, internet. These things can always be renegotiated down over time, but they get put on the back burner because it happens last, and so all these things are ways that you can begin to look at your cash management in order to do it better and actually put yourself first as business owners.

Dave: 27:47

So, mary, I hope that makes a little sense, and if you ever want to chat, you know I'd love to have a conversation and catch up with you. And if you ever want to chat, you know I'd love to have a conversation and catch up with you, mary. And I've actually known Mary for a long long time, back when I owned a franchise of Liberty Tax Service, so it's been a long, long time. But so, keeping that in mind right is that you know over time, if you want to change the way that you operate, you have to change the habits that you have within your business. And if the habit that you currently have is putting yourself last and paying yourself last and looking at your bank and saying, can I afford to take some money out or do you feel like you're stealing from your business if you pay yourself. That's the problem and that's the habit, that's a wrong habit, that you formed within your business.

Dave: 28:31

So old adage, old, I guess you can call it an axiom. Right, and being an accountant, I'm going to say I definitely fell victim to this early on. Right, you have your sales minus expenses. Well, it equals your profit. And so how many times and I said this to the Alliance group this meeting, or, sorry group this week when we had our in-person meeting how many times, as a business owner, have you gone to your accountant or your tax preparer at the end of the year and they've given you the old hey, congratulations, you had $20,000 of profit this year. What does that feel like? Right, you're probably like, well, wait a minute, where did it all go? I don't know where it's at. Right, how how can I be profitable? I don't have $20,000 in the bank. Where did it go? And it's because, going back to the Parkinson's law, you were spending it or you were taking it out and you were doing it on things that didn't feel like it was profit.

Dave: 29:28

And that's the other thing that we're we wanted you to know is that profit should be done for celebrating right, profit of your business should be done to celebrate the work that you're doing within that business. So if you take profit out of your business to pay your everyday living expenses, that's not profit, that's part of owner's pay and, depending on your tax kind of breakdown right, it may be shown as a profit distribution. But it's not a profit distribution, right, it's supporting your lifestyle. Profit should be things like hey, every quarter I'm going to take a profit distribution, okay, and I'm going to go out and I'm going to go on a vacation. Or I'm going to take my kids out to a special dinner, right, you know, I'm going to take my kids out to Dave and Buster's or Chuckie cheese, depending on the age, right. Or I'm going to take my wife out to a fancy steak restaurant where we're going to get dressed up, and it's going to be known that that is because of the profit of my business. Because what that does is it builds up the understanding of the people around you of the work that you're doing, right, that the extra hours you're putting in. Hey, every quarter we're going to be doing something special because daddy or mommy or husband or wife was able to go and make a profit this year in this quarter to then do something extra and it's not paying the mortgage payment or paying the rent or paying the utility bill. That's owner's pay. So if you haven't celebrated the profit of your organization and done something with the profit, it's probably time to start doing that, mary.

Dave: 30:58

Another comment so we have learned this through the years. We negotiate with our vendors on a yearly basis. We do pay ourselves better now, as the years have allowed, now that our mortgage is paid off, okay. Well, one thing I want to say glad that you've paid yourself a little bit better, um, but based on the last part of the statement, right, it's because your mortgage is paid off, um, and I'm assuming that's the mortgage within within the business. Um, and so it. Basically it was still being a reactive decision, right, versus a proactive management system. Um, and I, you know, I don't know the, the, the, the financial situation or whatever, but um, at least you're paying yourself better now. But there may even be more room for improvement or reinvesting.

Dave: 31:43

The basic core five accounts that we talked about. It's income, profit. Everything from income goes into your income account. Then when you do your allocation, you allocate it out to profit, owner's pay, taxes, operating expenses. Now, those are the core five, but, depending on the business goals where you're going, you can add and expand the number of accounts that you have in order to kind of help you move things forward towards goals that you're trying to progress.

Dave: 32:08

So I was just talking to another client earlier last weekend and the idea here is that they're looking to potentially purchase a new truck in another, maybe possibly three or four years. So the idea now is that we create a truck account, a truck reserve account, where we allocate a portion of the money that comes in every week and we allocate it to that truck account. So when three or four years comes, he at least has the down payment ready or, depending on how successful he's been over the few years, he's able to actually pay cash for the entire truck. And it's not a loss because it's allocated there. It's out of sight, it's out of mind, but it's there building up and helping him achieve the goals within his business that he wants to achieve. Same thing if you want to hire a new employee, put money aside for a new employee costs that you onboarding and maybe the first year salary that you feel comfortable and then, once you have that reserve built up now, you can bring on that employee.

Dave: 33:07

Maybe it's buying a new building, right, you put the money aside and you have it ready. When you're ready to go ahead and make that purchase or make that improvement to your building or make that improvement to your house, whatever it ends up being, you put it aside and it's there. So it's not just a core five and that's where you should be spending all of your time. In the core five accounts you should have, you could have reserve accounts, you can have, you know, goal accounts, whatever you're looking to do within your business, you can set up that money management system in order to do it. And then, so that's the money management side of it, and so kind of adding in, basically going with earlier on what Hermosi was saying about the 48% or 46% of businesses that make money. The median income is only 48 grand. So how can you better that as yourself? And that's implementing something like profit first or something similar, if you want to do it yourself, so that you can begin to manage where you're spending, manage your money and then hopefully make more than $48,000 a year and, as I guess you can call it, a parallel or a tandem.

Dave: 34:10

Right to money management is also money forecasting and projecting, and this is where you understand the future situation of your money situation. So you project out any new money or current money coming in, you project out any money going out and you're able to see the peaks and valleys, because every business is going to have peaks and valleys within their spending, within their cash balance, and so you can truly understand where you're going in your business. And so what you want to do is you want to. At least a 13 week forecast can help you understand in advance, being proactive, and give you clarity and competence on where your money is going to be, so that you can make better business decisions. Because what you don't want to do is you don't want to look at your bank balance and maybe it'll say $10,000 today and you're like, oh, I can take some money out or I can invest in that new marketing program, forgetting that in three weeks you have a big bill coming up that most of that money was allocated to or needs to be allocated to. Because what happens With any projection?

Dave: 35:52

Right, it's not set in stone, but you're kind of going back. You know what happens when you know you have a invoice that's supposed to come in today, but you got notified from your client that, oh man, I had some money issues I'm not going to be able to pay you to next week, right, and your bank balance can't support that. We become nimble and we think about going back to the Parkinson's law. We become nimble, we as business owners small business owners have always gone through and we've been able to make, you know, maybe a thousand or $2,000 last for two weeks, but normally that would maybe last us a week. We can be innovative when we're forced to be, and so now we just have to make a habit of forcing ourselves to be innovative.

Dave: 36:33

And then, with the forecast, it allows you to be proactive. So maybe in 12 weeks, three months, you see that your bank balance is going to go down because a client, maybe a client we're not sure if they're going to renew their invoice or not. So what do you have to do over those next three months? To either one extend that client or to find a client to replace them. It allows you to be proactive in your actions, and what a lot of people do is they'll just wait until that client falls off and then they're like, oh crap, I need to replace that income, and they don't think about it ahead of time, but having a process in your business to actually regularly review your projections and regularly review your forecasts, you're able to then make proactive decisions today to help alleviate that situation in the future.

Dave: 37:16

The beauty as well is that you're able to model different scenarios. So let's say you do want to make an investment into a marketing system or into a new employee or to a new, bigger space right, that has an increased rent costs. You can model all of those things out into your future, right? Minimum, at least 13 weeks. But I definitely say go 12, 18 months out and say how can I afford this? Or can I even afford this? Or what do I need to do in order to make this work and you can play with the income, right? Okay, how many new clients do I need in order to, you know, make this worth it? And you're able to then make a decision where most people right now they look at their bank, they say I think I can afford it and they make that decision and then they realize in two or three months that now they're out of money because they actually couldn't afford it when they made the decision and now they can't pay the bills that they have. Another one is like loan options You're projecting out future loan payments versus the cash inflow from a loan can actually put you off in a worse scenario than if you didn't take that loan at all. And so that's why having a good cash forecasting, cash projecting, modeling process within your organization is important, because you can make better financial decisions.

Dave: 38:36

And this isn't putting down. You still need to do all your regular sort of, you know, bookkeeping and accounting and all that kind of stuff, but you know a lot of people forget the forecasting part of it. They forget to you know plan ahead and then they end up having to be reactionary instead of proactive. So you know, I kind of hope that you know you guys got something out of today. Again, you know I know it's not as fun when it's just me talking versus you know, when there's Dwarin and I that are here to kind of bounce back, you know ideas and thoughts and things off of.

Dave: 39:09

But what I want to open it up for you guys is I definitely want to be bringing on you all to the show. So if you're interested in coming out of the show telling us a little bit about your business, giving us a little history and even talking through some maybe obstacles or things that you're experiencing in your business right now and kind of walking through some of those scenarios. We definitely want to have you on. So if you are interested in coming on, shoot us a message down below. I'll be creating you know kind of a registration, you know kind of list and you know kind of a topic that lists that we can, you know kind of, have you sign up for. But right now we don't have that in place because I'm busy trying to do some other things. As a small business owner, I know how it goes, so I will get that out in the future. But if you're interested, let's have you guys on. I want to have this planned out. We do this every week. As I said, every single Friday, 8.15 am, we get live, whether it's just me or whether it's me and Dwarin, but I want to have you guys on here too, because I feel like that's going to add more value to the show and more value to you as a business owner.

Dave: 40:14

So, mary, as business owners, you should always be looking for new customers and keeping the existing companies Absolutely, so it is easier and less costly to keep an existing customer and expand or increase their customer lifetime value versus finding a new customer. And that's where understanding your CAC, your customer acquisition costs, as well as your customer lifetime value, is important to your business because it's going to help you direct you. If you have a low customer acquisition cost, right, then you should be going out and maybe reinvesting some of your profit within your customer acquisition, because it's going to bring you more customers. However, if you have a high customer acquisition cost and maybe limited funding right now, maybe you should be looking to your existing customers and looking for ways to upsell them. So always understanding where you are when it comes to new customers and existing customers definitely an important aspect of your business. I will you know, definitely, maybe if you want me to talk on the show where you're at.

Dave: 41:24

So we do this all online. So this is we use StreamYard you guys may have heard StreamYard, so this is all online. We can send a link to any one of our visitors or guests and they can join us online. So it's a wonderful way. So that way, people don't have to be in our physical location, but obviously I'm in West of Cleveland now, mary, in Elyria, so very close to you as well. So but if you are like like, let's say, you're in California, you're in New Jersey or wherever you're at, like you can still join us. You don't have to be physically here. Um, we'll send you the link, you can join on that morning and then we'll kick things off and get going. But, um, with that, I hope you guys have a wonderful week. I'll kind of wrap it up for you guys now.

Dave: 42:10

Main topic, right, main takeaway If you do not have a cash management and a cash forecasting system process in your business, it's not too late to begin to implement that. Find ways. If you want to talk about it, like I do, a free consultation for everybody. I'll have a link down below Quick 15 minute consultation. You can understand what it is, what it looks like, is it right for you? Is it the next step? Because it's not right for everybody. Sometimes you know it's not right and that's okay. But at least get the understanding of what it might mean for you and how it could possibly impact you to make your business better. You, how it could possibly impact you to make your business better, you have to start controlling your business finances and if you don't, they control you. And what I mean by that is that if you're the last one in your business to get anything right you're getting the scraps left over the business then it might be the right time for you to at least have an understanding of what's going on. So with that, I hope you guys take um. Take that information with you. Mary.

Dave: 43:11

Thanks for the interactions today on on the comments there. Um, if anybody else has any questions or has any thoughts, feel free to drop it in the comments below. We check those all the time. Dwarin, hope you're getting some rest on your ankle buddy, um, and hope it's not broke. I hope you can walk on it tomorrow. But if you are here, hope you have a wonderful and amazing week. We love you, dwarna, and I love doing these shows and if there's anything you want us to talk about, too, drop that down below. If there's a topic or a question or something that's going on in the business world you want us to kind of give our thoughts or things that maybe we've seen in businesses, please reach out, drop it down below. Love to have a question in a conversation. So hope you guys have a great week. I look forward to talking to you guys next week and until then we'll see you in the next one.