Scaling Your Business with Purpose: Faith, Finances, and Strategic Growth | Leslie Hassler

Discover how Leslie Hassler, the powerhouse behind Your Biz Rules, transforms the often-daunting entrepreneurial journey into a pathway to success—guided by faith and inspired by her belief in God's role in her journey. As a seasoned business owner from Texas, Leslie shares her transformative story of moving from a draining enterprise to a fulfilling business coaching venture, offering invaluable insights into personal growth and overcoming imposter syndrome. Her unique approach, rooted in her faith, promises to guide business owners through challenges with incremental steps toward sustainable success.

We dive into the hard-earned lessons of entrepreneurship, where mindset and faith are as crucial as financial acumen. Sharing personal stories, Leslie underscores the importance of building robust systems, cultivating a positive culture, and establishing strong boundaries to avoid costly mistakes of the past. She emphasizes the necessity of financial literacy, advocating for a deeper understanding of profitability and cash flow beyond mere revenue, while also reflecting on the privilege of paying taxes as a hallmark of profit.

Our conversation also unpacks the complexities of profitability and scalability, essential to any thriving business. Leslie expertly breaks down key financial documents like balance sheets and profit and loss statements, guiding us through strategies to maximize profitability and align growth with cash flow. With faith as her compass, Leslie highlights the critical difference between growth and scalability, revealing how repositioning cash within a business can prevent financial pitfalls. Tune in for practical, faith-centered advice to ensure your business doesn't just grow but scales sustainably, avoiding the common traps that lead to high-revenue struggles.

Leslie Hassler: CEO and Founder of Your Biz Rules

Website: https://www.yourbizrules.com/

LinkedIn: https://www.linkedin.com/in/lesliehassler/

Instagram: https://www.instagram.com/leslie.hassler/

YouTube: https://www.youtube.com/@LeslieHassler

Blog: https://www.yourbizrules.com/blog/

#Entrepreneurship #BusinessCoaching #SmallBusinessTips #God #Faith #LeslieHassler #YourBizRules #FinancialAcumen #Profitability #CashFlowManagement #ScalableBusiness #EntrepreneurJourney #MindsetMatters #BusinessGrowth #OvercomingChallenges #SustainableSuccess #BusinessFinance #StrategicPlanning #LeadershipDevelopment #Profits #Taxes #SmallBusinessSuccess #BusinessAutomation #EntrepreneurMindset #GrowthStrategies #SmallBusinessGrowth #EntrepreneurLife #BusinessStrategy #BusinessSuccess #BusinessPodcast #PodcastEpisode #SmallBusinessPivots #Success #BusinessOwners #MichaelDMorrison #OklahomaCity #BOSS #EntrepreneurAdvice 

Chapters

• 0:00 Entrepreneurship, Business Coaching, and Pivot
• 7:53 Financial Literacy and Mindset Shift
• 21:53 Understanding Profitability and Financial Statements
• 35:26 Navigating Business Growth and Scalability

Transcript

Speaker 1: 0:00

All right, welcome to Small Business Pivots. Again, we have another special guest from around the world and, as I always say, no one can introduce themselves or their business like the business owner. So tell us a little bit about yourself, your business, where you're from.

Speaker 2: 0:16

Well, howdy, I'm Melissa.

Speaker 1: 0:17

Howdy. We got a howdy Howdy. Anybody can guess where that's from.

Speaker 2: 0:23

The great state of Texas, right? Yeah, Anybody can guess where that's from the great state of Texas, right? So my name is Leslie Hassler. I own your biz. Rules business coaching. What we do is we work with business owners to get them cash forward, produce profits predictably so you can grow and scale, but do so that in a way that improves the owner's quality of life and really gives you something that's sustainable and healthy in your life through business. So that's a bit of what we do.

Speaker 1: 0:49

Just a little bit. Well, I know there's a lot to talk about, so would you consider yourself a type of business coach as well?

Speaker 2: 0:58

Yes, I just we don't use the coach moniker because we tend to do a little bit more. So while that is a part of what we do, we also work pretty deeply with our clients and we'll get into the nitty gritty or into the trenches with them to kind of work alongside them to help them get out. We have just found that if our owners knew what to do, they would have already been doing it, and so telling somebody what to do sometimes isn't enough. You have to get down there and show them what it looks like you know and and teach them how to do it themselves and then pass the dahan back to them so they can be successful long term.

Speaker 1: 1:39

Very cool. Well, listeners, you better buckle up, because you have a business coach, and one that does a little bit more. So let's introduce the show and we'll be right back. Welcome to Small Business Pivots, a podcast designed for small business owners. I'm your host, michael Morrison, a small business coach and founder of BOSS, where we make business ownership simplified for success, so that you can own a business that runs without you. To learn more, go to businessownershipsimplifiedcom. All right, welcome back to Small Business Pivots, leslie, where do we start? I mean, there's so much to talk about there. You know, I always say business owners, we don't know what we don't know. In fact, you know, I'm mid-50s and I'm still learning. So where do we start?

Speaker 2: 2:30

Mid-50s? No, I'm early 50s, how's that? I'm just a little bit behind you and I still joke. My team is like, well, what should we do? And I was like I don't know, let's just go figure it out. And they're like you don't know. And I'm like, no, I don't know. And they're like, well, how do you know what to do? And I'm like I'm just going to put one foot in front of the other. It will come. I have faith. I've been doing it long enough to know I don't. I need to know where I'm going. I need to know what the end is. You know're talking about. But when you've got all of that in place, you don't really need to know how. You just need to take a step right and that step will inform the next step and the next step and the next step. And as you can be strategic, sure, do we know what we're doing in a lot of places? Sure, but do we explore as well? Most definitely, that, I got to admit, is one fun thing for me about being an entrepreneur.

Speaker 1: 3:27

Well, I know with a lot of entrepreneurs we have imposter syndrome and sometimes that's from mindset of something that we grew up with a trial, a tribulation, anything like that. So we can kind of get in your head and kind of how you got into this putting one foot in front of the other, because a lot of us have a problem getting over something and it kind of holds us back so I won't.

Speaker 2: 3:52

I will say I have moments of imposter syndrome, um, but I also have a very different take when it comes to imposter syndrome. I have learned to internalize that when I feel that moment of doubt and I'll tell you about a really big moment in my entrepreneurial life but what I've learned is when I have that moment of doubt, I choose to see it as a high level of integrity, desire to do well, desire to be successful, and that part I lean into and I honestly just let go of the rest. But I will say my first business was an entirely different business. I ran it for seven or eight years. I will be honest, it sucked my soul dry.

Speaker 1: 4:40

I think a lot of people can relate to that.

Speaker 2: 4:43

Yeah. So, as I was in a couple of years of exploration, going, okay, god, if it's not this, then what? What is it that I like? What do I not like? What do I want? You know, all these questions you ask yourself I was getting the nudge to come into this business and I was like, who am I Right?

Speaker 2: 5:03

Who am I? I'm leaving a business that's going to suck my soul dry. Who am I? And that was probably the biggest moment of imposter syndrome, and it just I kept getting nudged to do this and I said, okay, fine, this is the way I work Sometimes in my conversations with God. I will give it a try, but you are going to have to give me signs. I need blinking arrows, give me signs. I need blinking arrows, caution signs, like make it super clear. I don't know why. I think I can get these things, but this is where I went.

Speaker 2: 5:33

And so what I started doing is I did my first three clients for free, three months, a limited engagement. I just wanted to see could I be good at this, and what I found was that I could and truly. It's the same way for everybody. We discount the things that are easiest for us, the things that are like breathing to us often are our greatest assets, and it was in that moment that I learned I actually had a lot more going for myself than I gave myself credit for. So I think, the way you know I use that word exploration I'm exploring.

Speaker 2: 6:11

Sometimes I find dead ends, but if I don't have, if, like, what I'm going to do doesn't have to be heavy with, am I right or am I wrong? Am I going to succeed or am I going to fail? You know, if I don't have to carry that weight, I can walk into things and situations and rooms where I don't feel the most comfortable, but I can show up because it's just I, I it doesn't matter to me if it fails is where I'm at. You know, sure, I don't like to lose money any more than anybody else. Sure, I don't like to waste my time any more than anybody else. And you and I were talking, and I think you and I have the same patience gene, which is kind of low. But I also know that if I don't explore, I don't learn. If I don't learn, I don't grow. If I don't grow, I can't reach my goals, and I'm just so much more attached to that than I am sometimes to the mindset trash that we all go through.

Speaker 1: 7:10

So you mentioned the business that sucked your soul. We don't have to go into that business. But you said eventually I just got out of it. So did you? Was that a pivot? Or because I know a lot of business owners feel that way, they feel like this is just taking the juice out of me Can you kind of explain, like how you God obviously was part of that, but what were some of those signs, of signals, like running that business? I mean, when did you know that? Okay, it's literally time.

Speaker 2: 7:43

When I hated going to work, that's probably a good signal. When the boss hates going to work, that's a really good signal. But I'll be honest, I didn't set up enough systems, I didn't work on the culture of the business, I didn't set enough boundaries in my company, so it secretly tore me apart because it wasn't supporting the life that I wanted. So I had horrible issues with team. In fact, that experience with team would scar me enough that it wasn't until 2021, 2022, that I actually got serious about hiring a team again. And because I didn't feel like I was a good manager, I hired the wrong people. I hired toxic personalities that nearly killed my business from internally, if you will, and I was too busy and I stayed too busy. If you know, I'm using air quotes for those of you that are listening to do something about it. And the truth was I didn't do something about it because I didn't know what to do about it and I didn't have the energy level to deal with it. So I basically let the toxicity grow and, honestly, I didn't fully understand how bad it was until like three or four years after that business had closed that I really started to see the signs. So I call that.

Speaker 2: 9:18

First business was my MBA in the School of Hard Knocks of Entrepreneurship. I failed some courses. I got to repeat them. I at least barely passed some and excelled in others. So it was very much my learning ground for the work that we've been doing for the past 12 years in this business. But I won't even call it a pivot, because a pivot, you know, to me is like a stick your heel and turn and go a different direction. No, I jumped off this cliff. I really just remember there were a couple of years there that I was just like I'm just going to burn it all down. I'm just going to burn it all down.

Speaker 2: 9:57

That was the only path forward that I could see Hindsight, you don't have to burn it down, but you do have to do something right. The today me would go back and tell the then me that it's okay. It's okay to be where I was. I was actually at a pivotal growth moment. I did not even realize and if I wanted to key, if I wanted to, I could change every rule in the business and turn that business into something I loved. I just didn't know it at the time.

Speaker 1: 10:31

I often say one of my favorite quotes is until I change, nothing around me changes. I mean, you are hitting. It's almost like we talked or have a script, because you mentioned systems and boundaries and culture and toxic, and I'm like business coaching, business coaching, business coaching that you know, but we hear it over and over. But for business owners, sometimes we still don't do what we know to do. So let's talk about your business today, because I feel so emotionally bad for business owners that use their bank account for the health of their business. In other words, if I have money in the bank, things are going well. If I don't, I can't sleep. Everybody get out of my way, I'm going to chop your head off. So let's talk about your business today and how that's applicable to business owners and why they need to know what you do and how that can be beneficial to them.

Speaker 2: 11:27

What's the definition of a business, a commercial enterprise right, a commercial enterprise and I like to say that can work without you, but it's really about producing a profit and what we don't understand. One of my favorite phrases that I love to use is revenue is vanity, profit is sanity, but cash is king or queen, depending on who you are. So you could have a $2 million business right and you could have a three quarter of a million dollars business 750,000, which do you want? Most people say 2 million. I said great.

Speaker 1: 12:00

I'm shaking my head. If I can be profitable in that smaller one, yes.

Speaker 2: 12:07

So and that's the key is what we can't see looking at a business outside, is what's the bottom line, what's the net profitability? If both of those business have the same net profitability, then you have a lot of logistical balls to keep in the air with a $2 million business that you might have at the $750 level. So that's where revenue is vanity. Profit is sanity Beautiful. So you're sitting with your CPA, right, it's at the beginning of the new year. He goes congratulations, you posted a profit. You're surprised that you posted a profit and you're like I'm so excited. And he goes oh, and, by the way, you have a X tax bill to pay. And your number one thought is but I don't have X in my bank account. Profit, right, you can have profit on paper, but it not be real because you have to produce enough profit to produce cash. That is why cash is king or queen, depending on what you want to adopt.

Speaker 2: 13:09

Most business owners come into small business ownership with the financial literacy of balancing a checkbook, right, making sure that balance is accurate. Yeah, that doesn't work so well. It takes something more. Uh, most business centers come in or at least in the year, with our favorite two-letter phrase break even. And why do we want to break even? Because we don't like paying taxes. Profits or taxes are a privilege of profit. I will get it out there you have to be okay with paying taxes, period. If you're not okay with paying taxes, you'll never have enough profits. If you don't have enough profits, you'll never have enough cash flow and you'll always be on that feast and famine that is ever so popular ride in the amusement park of business ownership. So we have to change our relationship with money.

Speaker 2: 14:12

We were talking about mindset earlier. Mindset pours into it. There are a lot of traps that people fall into when it comes to mindset, but it's also we have to have different habits, and that's one of the things. Like we just released a book First this, then that, and then we spend like four chapters just talking about either the mindset, the habit and then the model. Did you even set up your business to produce profits in the first place? So yeah, it's not really complicated, but it is multifaceted. The solution is simple, but you have to want to be different enough first. If you're okay being just like everybody else and complaining at the latest networking table about how much you need money to buy something or grow something or do that. If you're still okay with it, you're not ready to change. If you're wanting something different, then these strategies work. They work really well.

Speaker 1: 15:13

Sometimes, until it hurts enough, we won't change right.

Speaker 2: 15:17

So that's how business owners are I mentioned a quote earlier and when you said that quote what I? I sent this to one of my sons when they were younger. I said you'll never change until you get sick of yourself, getting sick of it or the situation for you to be able to want to change. And unfortunately that's the truth. If you're comfortable, you're not going to change. It almost always has to be worse before people will change and unfortunately you can wait too long. You can wait too long, so just change. I mean, the sooner you do it, the easier it is. I'll just let you know.

Speaker 1: 15:54

And then, as time goes by, you'll go. Why didn't I do this sooner? We've all been there listeners, I promise, leslie and I both we've been there, we know how it feels.

Speaker 1: 16:05

So if I'm a business owner let's take one of our listeners, for example and I'm a contractor, let's say I'm an electrician and I start a little business because where I worked at they didn't know what they were doing. But here it is, year two, year three, box of receipts, and now I'm so deep into this I'm a little embarrassed to even come to somebody like you. What are those first steps of okay, I want to get serious, I want to get on track. What do those steps look like for someone like that?

Speaker 2: 16:36

So, first off, if you want to get serious and want to get on track, be okay getting help. If you want to get serious and want to get on track, be okay getting help. There is no gold star in entrepreneurship for going alone, period. I have a team, you have a team, you need a team. Whether they're a W-2 to 99 subcontractor, it doesn't matter. Team is a very broad concept in our world today. So, first off, be okay to do that. Second off is if numbers isn't your thing, then hire a bookkeeper, please.

Speaker 2: 17:06

We don't do bookkeeping, but we work very, very closely with bookkeepers and CPAs because we're more the entrepreneurial. Cfo type of role is one of the roles we play for our clients. But you've got to be okay with your numbers and I and I say this is almost like most people avoid the numbers we look at it, um, like there's three personas that we talk about in first this and that there's the ostrich, and we all can visualize the ostrich with their head in the ground Right. Um, I'm not a numbers person. Don't talk to me about numbers. All I'll do is work harder. There's the rhino and if you know anything about rhinos, one of the world's most dangerous animals because they get spooked and they charge right. So if you're constantly putting out fires, and especially financial fires, oh, the piece of equipment broke, so now I got to pay for that. Oh, I lost the key employee and now I got to spend you know money getting a new one back. Oh, you name it, you're a rhino.

Speaker 2: 18:05

We want to get people to the place of Al, and Al is about knowledge. Knowledge is power. When you have knowledge, you have an ability to make a strategic decision. So you've got to start off by becoming acquainted with your numbers, with the money in your business. Think of it as dating, with your numbers, with the money in your business. Think of it as dating. Hi, how are you? What's your name? Oh, operational expenses. What do you?

Speaker 1: 18:29

have to tell me. I know.

Speaker 2: 18:30

I'm being cheesy, but I think that's what we have to do. We have to really break it down to something that's not scary. The way we explain a financial statement and what we're trying to do is like look, the financial statement is your house, and in your house you have rooms, right, and in your rooms you have cupboards and you have drawers and you have, you know, boxes. We just want to make sure that the right stuff is in the right place, so we don't want your socks ending up in your kitchen utensils, right. That's kind of gross. We also want to make sure your laundry is not in your toilet. That is what the purpose of bookkeeping is. It's just to make sure that things are put into the right place. When they're put away, you can look at the numbers and they'll tell you a story.

Speaker 2: 19:13

Now, most business owners don't know this. That's why I say get help. A good bookkeeper can help, a good CPA can help, we can help. You can have multiple financial partners looking into this. But then it's about what to do next, and that's where the strategy comes into place. Once we know what the numbers are saying, what they're telling us, then we can make the strategic decisions of what systems do we need? What boundaries do we need? Do you need a cash flow management tool? Are you constantly worried about paying payroll? Let's give you the systems in the future that take away that worry. And ultimately, when we find that business owners are worried about the money, they make better decisions.

Speaker 1: 19:57

Wow, that's pretty powerful, Because many business owners can't decide because they don't have the numbers, they don't have the knowledge. So should I buy this, should I invest that, should I hire this person, should I not? Can I afford it? And on and on. That cycle goes. In the meantime, your competition is passing you because you're sitting there still trying to decide. So can you give us an example or two? Because I know, when I first started my business, well over two decades ago, I didn't know what financial statements were. I used my bank account, just like what we're talking about. Can you give us a couple of examples? So like on a P&L, like what's a couple of things, like I don't know, let's say, back then I didn't know what it was for, but I also didn't understand how powerful it was or what you could read, what story you could get out of that, like even if it was how to decide if you can afford this or that, or kind of. Give us a couple of examples of when you know your numbers, when you understand what stories they can tell. Here's a couple of examples.

Speaker 1: 20:58

You're listening to Small Business Pivots. This episode is proudly brought to you by BOSS, where business ownership is simplified for success. At BOSS, we help business owners create their businesses to run smoothly without them being there 24-7. Our seasoned business coaches, who have walked the path themselves, provide invaluable guidance and support, and with additional services like fast business loans, some approved within 24 to 48 hours, comprehensive online courses, detailed workbooks and engaging classes, boss offers a wealth of resources to help you succeed. Discover how small business success begins with Boss at businessownershipsimplifiedcom.

Speaker 1: 21:43

If you're enjoying the podcast, make sure to stay connected by hitting that subscribe button, giving us a thumbs up or leaving a positive review. Your support keeps us going. Now let's get back to our incredible guest. Can you give us a couple of examples? So, like on a P&L, like what's a couple of things? Like I don't know, let's say, back then I didn't know what it was for, but I also didn't understand how powerful it was or what you could read, what story you could get out of that, like even if it was how to decide if you can afford this or that or kind of. Give us a couple of examples of when you know your numbers, when you understand what stories they can tell. Here's a couple of examples.

Speaker 2: 22:21

There are three that your financial advisors and your CPAs like to look at. There's the balance sheet. That's about sets and liabilities, so what you have and what you owe. Then you have the profit and loss statement. This is truly about more the detail, operation of the business and the income producing. So obviously at the end you'll produce a profit or a loss, hence profit and loss right. And then cash flows, and statement of cash flow is about really money in and money out. I will say we probably use that the least. We really focus in on balance sheet and profit and loss statements.

Speaker 2: 22:59

Let's talk about the profit and loss statements because there's a couple of terms that people will hear and it all has to do with the word line. So there's above the line and below the line, and then there's bottom line We've heard these phrases right. So let's explain those really high level. So, above the line, this is about the money coming into your business and the cost of doing that business. So these typically are things we call direct costs, and direct costs just mean they are expenses that you incur because you're doing the work. So these tend to be COGS. If you're a material-based company we actually do we have a mix of materials or service and product-based businesses. Everybody we put something into COGS. If you hire an outside project manager and you're a digital marketing firm, that's a COG. It's a variable direct expense.

Speaker 1: 23:54

Can you explain the COG? It's just an acronym.

Speaker 2: 23:57

Yeah, an acronym is cost of goods sold. Sometimes you'll see is cost of goods sold. Sometimes you'll see it cost of goods sold and labor. They'll say C-O-G-S-N-L COGS. So that's above the line. The line, though, is a really important thing to know. The line is your gross profit or your gross profit margin. This is how much money is left over the direct cost of doing the business that you do.

Speaker 2: 24:26

It's a really important number that a lot of people don't pay attention. If you're in a service-based business, it's going to be really high, high in terms of margin, and margin just means percentage. So, typically for service businesses, we see those in the 90s somewhere, oftentimes 98%, 99%, sometimes 100%, it's possible. Conversely, for products, the product gross profit margin as a percentage is typically lower. However, there's a baseline, especially for businesses that, let's just say, under $5 million. There's a baseline that you need to make sure that your business is performing, and our favorite sweet spot is 60% or more. We want to see 60% of what you bring in flowing down your profit and loss, and if you want to figure out how to do that percentage, you're going to see a. If you get your profit and loss statement, it's going to say gross profit or gross income. Take that number and divide it by your total sales. That'll give you a percentage That'll tell you where you're at, whether you're on target or off target.

Speaker 2: 25:34

Our next segment is below the line. So below the line is operational expense, or FX as we shortcut it, because there's a lot of words to say and when it comes to your financial documents, this is all. This is the cost of running your business. These typically are a little more fixed. They're going to happen whether or not you have work, your rent, your phone, your internet, your QuickBooks subscription. These things happen regardless of whether or not you're having sales. So those typically are in OpEx. What we want to do is then make sure things are flowing through to the bottom line.

Speaker 2: 26:12

The bottom line is net income. This is typically one of the last six lines on your profit and loss statements. Everyone's statement looks slightly different. Everyone's statements can use slightly different words, but for the most part it honors the structure. The net income that's your profit at the bottom line. Your net profit margin is again another ratio of what that number is divided by the total sales that came in. That's the kicker.

Speaker 2: 26:41

I think too many businesses settle down here. I looked it up one time I was like okay, what is a good profit margin? And there's an organization, a financial advisor's organization, that says good is 20%, that your net profit margin is 20% is 20%. Our client average is 36. We have some as high as 45, 46%, 53 at times. Our product-based businesses tend to be a little slightly below our client average. That is where you have fun, right, and what we're trying to do when we're looking at a business, we're trying to maximize that bottom in there, so we're maximizing the. When we're looking at a business, we're trying to maximize that bottom in there, so we're maximizing the amount of profitability in a business. Let's talk about your profit intention. Here's the problem. Most business owners treat profit as a reward. When I am big enough, good enough, have enough clients, have done whatever, then I will have profit. The kicker is there's no profit fairy. There's no. You know fairy godmother, flying around going Michael, michael, you're good enough, you have earned enough. Today you have profit. Has that fairy visited you?

Speaker 1: 28:08

No, that's like finding the money tree. I mean, it's the same thing. It's not. It doesn't exist, it's just talked about. It's still being sought after.

Speaker 2: 28:18

Yeah, so think about it this way. What if profit wasn't a reward? What if it wasn't about how hard you worked or how long you've worked or how long you've been in business? What if it was an intention? What if the name of the game was to be profitable the smallest possible business size, not the biggest. The smallest possible business size, not the biggest. The smallest possible business size. What would you be doing differently in your business? What if I told you that you need to be profitable by the time you hit 200,000 or 100,000, or 80,000? Or 80,000? What choices would you make in the structure of your business in order to produce profit?

Speaker 1: 29:11

that's a big question.

Speaker 2: 29:13

It is a huge question, isn't it? So that's what we consider the MVP, the minimum viable profitability. That's the game we should be playing, because when you're profitable and you're profitable at a low level you start to produce cash. And when you produce cash, you pay your taxes. Heavens, let's pay taxes. We put some away for a rainy day because we all have them and oftentimes we don't see them coming, and then we get to play. Maybe it's you get to take a bigger salary. Maybe it's I'm going to write a book and I'm going to pay for a ghostwriter. Maybe it's I'm going to go to a conference and I'm going to learn a new skill. When you have the money to make the choices in a business, that is freedom, and that's the number one reason that people even choose to open up a business is for freedom. Yet we're not giving it to ourselves.

Speaker 1: 30:11

Yeah, that's, and whatever you do when you have a profit, don't go buy a boat for the business Okay, which I see so many businesses don't be going buying toys from the business.

Speaker 2: 30:24

Let me be clear your business is not your piggy bank, exactly. Well, if you want to buy a boat, pay yourself the money in your personal account and go buy the money with that. But uh, yeah, that opens up a lot of problems, guys, yeah, problems yes.

Speaker 1: 30:42

So one of the most asked questions is on that line that shows I have a profit. Yeah, made a profit. Let's just what kind of number would you like to throw out? Just name a number.

Speaker 2: 30:58

Name a number, like as in dollars. How much profit would I want?

Speaker 1: 31:03

or should somebody else Just you? How much would you like to see.

Speaker 2: 31:09

The game I'm playing right now is 2 million.

Speaker 1: 31:12

Okay, so 2 million. So for most business owners that might be $2 or 200 or 20,000, but let's say it's 20,000, reduce it a little bit. But they wonder why don't I have that? Can you explain? Just? I know that's a big question, but that is one that is always asked by us. It shows I made a profit, so how come I don't have it?

Speaker 2: 31:36

Yeah, because profit isn't cash right and at 20,000, chances are your profit is wrapped up in your cashflow and by the time we realize we have profit let's say profit you get a profit and loss statement on a monthly basis. You get it on the 15th of the month. Your statement ends on the 31st of the prior month, so you have two weeks that you likely have spent it. And this is what happened to me in my first business. I remember we got in a really great project, I mean like huh kind of a project, right.

Speaker 1: 32:16

The profit fairy came and saw you the profit.

Speaker 2: 32:18

Fairy came yes, or at least the revenue. Fairy came and I had a list of all the things I was going to do with the profit. I knew how much profit we were going to have all this thing. Well then the project itself ran long. We had something called time slippage, my word that we use. It should have been six weeks. It ran 12 weeks and I remember when I got the final check I put it in the bank. I let it clear. The bank opened up my bank account and I was like where is it? Like, where's my $20,000 in profit I thought we were going to have and I was so convinced I went through and I was like did somebody hack my account? Do I have any fraudulent charges? I went through three months worth of all the expenses and I was like, no, I whittled it away, I nickel and dimed myself and time slippage eroded the profit. That's why we're very cautious about compression. We call it compression putting tension on our project timelines. If we take a project, we want to compress that because I know the longer a project goes, especially if it's a fixed fee, the less and less and less and less profit will be left over because it gets absorbed by your normal operational expenses, payroll, blah, blah blah. And if you're managing your business, do I have money in my bank account? Cool, I can write a check. Then you're making a decision based on today, but you're not making a decision based on what happens in two weeks, two months and two years, and that is the difference that we're trying to get people into understanding.

Speaker 2: 33:58

We use a tool it's a third-party tool, it's called PocketSmith Out of New Zealand. It is a personal finance management kind of software, kind of like Mint used to be and things like that. But we use it for every single one of our clients. I use it personally and for business because it has one little feature it gives you a calendar. It shows you on a daily basis what your anticipated balance is.

Speaker 2: 34:23

So you were just saying how can I make a financial decision today and know what is gonna happen in three or four weeks? Well, imagine I go in today and I say oh, I'm gonna sign up with Michael, let me put a $5,000 expense on this day and know that it's going to happen every month, whatever it is Right, and so I can put that into my plan, and then I scroll out and I can see when do I do? I stay okay. I can even factor in. Well, michael's going to help me with sales and I know where I'm pretty confident we could earn by month three $8,000. So I can put that $8,000 in.

Speaker 2: 35:00

I can see what happens to my money. Let's say, in two days after paying Michael, I'm $10,000 in the hole. Am I going to pay Michael? Probably not, because I don't want to bounce, right. Let's say that $10,000 in the hole is four months out. Would I make the same decision Me, I'd probably go four months out.

Speaker 2: 35:24

I can do something about that. I always have the ability to make more money, right? So you start to have a different kind of decision-making power when you start to be intimate with your money, when you start to know your money, when you use tools and systems that show you your money, so that you're not just saying, do I have the money in my account today, but actually you're looking forward and you're managing your money. So I don't do 10 years, not for myself. I mean, 10 years is a lot of variables, but I can see out for a good year and a lot of our clients like I was looking at one of our clients, pocketsmiths, this week and they've got money in the bank, like they could not take on any more work than the work they have in the next three months, and they have money in the bank for I think it was four months after that, wow, so at the end of the year we get to have some fun.

Speaker 1: 36:20

Yeah, that's, that's what we call a runway around here. So I know a lot of clients so we do business coaching and a lot of clients that come to us. You you touched on earlier and that is would you rather have more money making less? In other words, $100,000 annual revenue, business making more, versus a $2 million making less. Well, most business owners shocking listeners, I know, because you probably had a lot more money when you were smaller and now you're in the multi-million dollar and you have less. I promise you, I've been there, I know I went from a you know X to like $40,000 profit and we were doing like 6 million. I don't know, it wasn't quite that, but you know what I'm saying. So can you explain? Cause you mentioned the word scale on your website and that has something to do with scaling a business properly. So can you kind of explain why, when you start making more, because of a lot of business owners they think if I want to grow and scale, I need more sales and that's all they focus on.

Speaker 2: 37:24

Yeah, let's talk about that, because I think the problem that in your situation is why I say we've seen more broke millionaire businesses, million-dollar businesses, than people would like to admit. Here's one of the issues that we see at play. So let's take the term growth and let's take the term scalability. Growth is necessary, scalability is necessary. Growth, though, and scaling have different impacts on your cash flow. Growth, you have to do it, let's be honest, and you're not ever, you're not done, because growth and scalability are like two partners on a dance floor, right, they feed off each other and they turn. And let's say, sometimes it's growth leading and sometimes it's scalability leading. You do a period of growth and then you go into a period of scalability, and after you've maximized your scalability, you're going to actually go back to growth. This is important to realize, because too many people are like, oh, it's day two, I'm going to scale, and you're like, yeah, but you haven't put the foundations in place for growth first. And that's really what growth is about is about building something that can be scalable. So you have to have the foundations. Growth, though, when it comes to cash, devours cash. It eats it up like Cookie Monster. It just devours it. Growth also has a longer return rate. So a growth investment that you make today is likely going to take 90 days, depending on how big your moves. The longer you're in business, the longer that return cycle tends to be. The more you chase some sexy bells and whistles and shiny objects type things, probably the longer your return cycle is going to be. But it will eventually come back. It just takes time.

Speaker 2: 39:16

And I was talking about this concept with a fellow business owner. Gentleman owns a distribution company, bought it from his dad, got into it, said we, our technology was stunk, it was stuck in the fifties, so I decided to invest. It's like how much was that investment? And six figures. And I was like, oh my gosh, yeah, that's a big investment. And he goes yeah, I said, okay, I'm gonna bite. How long did it take before you saw the return of that six-figure investment? He goes 18 months. Most business owners have, on average, nine to 21 days worth of cash on hand. You can't wait 18 months, which is why you also need to align the strategy of your growth to the cash flow of your business. Maybe you have to start smaller when you're on that low end there so that you can build cash, so you can do the bigger things.

Speaker 2: 40:13

Scalability is really about exponential. It is the thing that creates cash. But if your growth foundation is broken, it ain't going to work. I don't care how many times you try, but you can do all the right things all the right way, and if your business isn't ready, it won't work period. This is where people get really frustrated.

Speaker 2: 40:36

So what we try to do is change the position of cash in the business so that you're self-funding growth, so you can allow for growth to give a return. Then, once it gets a return, we want to maximize your productivity, your capacity, your revenue generation in the business so that you're hyper-accelerating your profits, which is going to produce a lot of cash which we put to purpose. You have to put it to purpose or you're going to be buying boats and then go broke in six months. And that's an important thing to note is, I think even in one of Jim Collins' book he talked about, there is a statistical high percentage of businesses that post their fear filing for bankruptcy within 18 months. That is growth devouring cash and nothing there to sustain the business. So I think you can, by sheer will, get your business into seven figures.

Speaker 2: 41:35

I have seen people do it. You can do it. You will be very tired by the time you get there and chances are you won't have a whole lot to show for it. So it's really that's why I say like I don't care where you are in your journey, because it is a journey. The zeros are just zeros. Don't pass judgment on them, but really and truly think strategically about how you're allowing cash to grow in your business, because without cash, you don't have fuel. You can't drive around the block if you don't have a tank of gas. And that is where I think we get out of alignment is we use growth for money to generate cash, but we don't. We forget growth devours it, it doesn't generate it. So to your point it's, it's oftentimes, by the time we get in there, it's like a very entangled, knotted ball of yarn that we have to like pick apart one strand at a time until we can make it into something that actually has some some legs that can.

Speaker 1: 42:39

That was very well said and I want to piggyback on that, for because I know for business owners, some think well, I'm just going to grow, I'll get to that point and then I'll worry about it. And friends, I promise you you will have to make some emotional, hard decisions because you will have made some bad ones to get there. In other words, you're probably going to be extremely overstaffed, which means you have to come in and cut workforce maybe in half those could be friends and family, and nobody likes to let people go and you've probably got yourself tied into some long-term contracts on big equipment. I mean, the list goes on and on. So please heed this warning Don't try to get there and then figure it out, because it's harder to untangle, like you said, one thread at a time. So you have been a wealth of information. How does somebody get a hold of you so they can turn their business around?

Speaker 2: 43:34

Thank you. Well, first off, we have kind of a special page set up for your listeners. What we're going to put out there, it's yourbizrulescom forward. Slash the initials of the show. So SBP I believe I didn't write it down, but I believe that's correct. But you're going to go there. We're going to do a free gift, correct? But you're going to go there, we're going to do a free gift.

Speaker 2: 43:57

So the first gift I'm going to give you is 21 ways to self-fund your own business growth, and this is an article that I wrote for entrepreneurcom, so it has a lot of just really practical ways. If you've got to activate some cash, here's some ideas. Also, if you go there, you can get access to our book. First, this and that. Like I said, we half the book. It's just about being better in the money side of things and your profitability. We go into how to price and then how to build the marketing around your business to support all of that so that you can get growth right. And then, if you love to chat with us, there's a way that you'll be able to do that there. So again, yourbizrulescom. S. B as in boy, p as in.

Speaker 1: 44:39

Paul, are you active on social media at all? Oh, I'm everywhere. What's your favorite channel where people can really engage with you?

Speaker 2: 44:48

So I would say LinkedIn's probably where we have our thriving audience, and we do have a LinkedIn newsletter. It's called Profitable Growth for Businesses, so you can always join us there. But yes, it's Leslie Hassler on LinkedIn and lots of good stuff that we share in the arena All right?

Speaker 1: 45:09

Well, I always end with a question, and that is if you were in front of a lot of business owners doesn't matter what industry, what size of business what's something applicable that you could share with them that works for all of them. It could be a quote, it could be a book, it could be just a don't do this or do that type situation.

Speaker 2: 45:28

We share that Chances, we'll do the Spider-Man quote. How's that All right? With great power comes great responsibility. Ooh yeah, you have the power period. You have the power to have the business that you want. You just do. It's just that you have to take responsibility for that power and actually do something with it. Be constructive, be positive, be an influence, have impact. Don't be afraid to be seen. You know, at the end of the day, I listened to a podcast you actually did for someone else and you're like I'm an introvert and I go guess what? I am too Guess what. Most of the entrepreneurs out there are introverts, but they're taking the responsibility for their power and they're recognizing what they need to do to show up. So just show up. You don't have to be perfect. Take imperfect action.

Speaker 1: 46:26

Great advice. If you are an introvert, I encourage you to invest in Toastmasters or something like that, because that will help you. It helped me. I used to be a big time introvert. I could not do this right now, 40 years ago. But Toastmasters or something there's plenty of courses and things out there that can help you, but you've got to be out there as a business owner, you've got to be available, and that will really help you. Well, thank you so much, leslie. You've been a blessing to many. Thank you so much, leslie. You've been a blessing to many. Thank you so much for sharing your time and your insights.

Speaker 2: 46:56

Thank you for having me. This is an absolute blast.

Speaker 1: 47:00

My pleasure. Thank you for listening to Small Business Pivots. Please don't forget to subscribe and share this podcast. If your business is stuck, you need help creating a business that can run without you, or you need a fast business loan or line of credit, go to our website businessownershipsimplifiedcom and schedule a free consultation to learn why small business success starts with boss. If you want to talk anything small business related, email me at michael at michaeldmorrisoncom. We'll see you next time on Small Business Pivots.