Master Your Cash Flow: A Business Owner’s Must-Know Strategy | Avi Pinsky

Your business might show a healthy profit on paper — but why does your bank account still feel empty? In this eye-opening episode, Avi Pinsky, founder & CEO of Pinsky Consulting and a sought-after fractional CFO, uncovers the hidden reasons so many business owners struggle with cash flow despite seeing "profits" in their statements.

Avi explains the real difference between profit and cash, breaking down the three essential financial statements every business owner needs to understand: the profit & loss statement, the balance sheet, and — most importantly — the statement of cash flows. You'll discover why the cash flow statement is often ignored but tells the true story of your business health.

Through relatable stories and real-world examples, Avi shares how accounts receivable delays and inventory buildup quietly drain your cash, even while your P&L looks strong. You'll also learn his powerful six-step cycle for business growth — a clear, actionable framework to turn financial data into better decisions, stronger cash flow, and sustainable success.

Feeling embarrassed about messy books? You're not alone. Avi shares why perfection isn’t the goal, and why understanding trends matters far more than having every number exactly right.

If you want to gain true financial clarity, stop feeling cash-strapped, and start making confident growth decisions, this episode is a must-listen.

Avi Pinksky: Founder & CEO of Pinsky Consulting

Website: https://www.pinskyconsulting.com/

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

Prosperity Playbook: https://www.pinskyconsulting.com/prosperity-playbook

 #BusinessFinances #CashFlow #SmallBusinessGrowth #ProfitVsCash #FractionalCFO #FinancialClarity #PinskyConsulting #EntrepreneurTips #BusinessStrategy #KnowYourNumbers #AviPinsky #PinskyConsulting #BusinessGrowth #SmallBusinessPivots #MichaelDMorrison #BusinessPodcast  #OklahomaBusiness #BOSS #BusinessCoach #OklahomaCity

Chapters

• 0:00 Meeting Avi Pinsky, Fractional CFO
• 5:35 Three Essential Financial Statements Explained
• 10:21 The Cash Flow Problem: Profits vs. Bank Balance
• 16:20 The Six-Step Cycle for Business Growth
• 26:43 Finding Focus: Common Business Challenges
• 35:17 Asking for Help and Final Thoughts

Transcript

Speaker 1: 0:00

All right, welcome to another Small Business Pivots, where we well, where I always say, where we have special guests from around the world. But today, if you're in the US, we literally have someone from around the world. But I know business owners are the only ones that can say their name and their business like they can. So I let you introduce yourself so we can say it correctly. Moving forward, I'll let you have the floor.

Speaker 2: 0:31

Sounds good. So I'm Avi Pinsky. I'm originally. I'm from Los Angeles, born and born and raised in Los Angeles. I went to school in the New York area where I met my wife, so we lived in New York for a little while as well, so I got both coasts in. About almost nine years ago we moved to Israel, so we are now international.

Speaker 1: 0:45

Wow, what got you to move? You just like to move. If you went from LA to New York, that's already a big move in culture and everything, believe it or not, I actually hate moving.

Speaker 2: 0:58

I hate packing up all my stuff. We've done it like five or six times, but I hate moving. I just go where I need to go. What brought us to Israel is, I guess I guess you could call it a religious calling. We both spent a post high school gap year here and fell in love with it. Once we got married, we both knew we were going to come back. It was just a matter of time. So it took about five or six years and then we made the jump.

Speaker 1: 1:22

Awesome, awesome. Well, how do you think we're going to help our small business owners today with our content?

Speaker 2: 1:29

Yeah. So I like to talk about the importance of understanding your numbers and your finances and how to use those to get the data and the information that's needed to make the right decisions in your business so that it can grow. Oftentimes, business owners don't really look at their numbers. If they do, they don't really understand them. Even less often do they know what to do with that understanding. So I have a process that I teach people by which they can use that data where they're growing their business, based on information and on facts, instead of their gut intuition and their feelings, which sometimes might be right, sometimes it might be wrong.

Speaker 1: 2:07

Most of the time it's wrong.

Speaker 2: 2:10

Yes, as a business. I didn't want to say it but you were.

Speaker 1: 2:13

You were trying to be polite. I'm I'm a business coach. I get brutal about numbers. Anyone that's listened to our show before. I'm not an accountant, but I understand financials and it is critical, critical, essential that you have clear, accurate numbers. So let's introduce the show real quick and we'll be right back.

Speaker 1: 2:35

Welcome to Small Business Pivots, a podcast produced for small business owners. I'm your host, Michael Morrison, founder and CEO of Boss, where we make business ownership simplified for success. Our business is helping yours grow. Boss offers business loans with business coaching support. Apply in minutes and get approved and funded in as little as 24 to 48 hours at businessownershipsimplifiedcom. All right, welcome back to Small Business Pivots. Let's get going, because numbers are important and I know as a business coach, if you don't have clear, accurate numbers, you cannot make wise decisions. You cannot make wise decisions. So your business website says you have a simple cycle to grow your business. Where do you want to start? Because, or maybe we just start with what are financials and what do they tell you? Because, like you mentioned earlier, most business owners use their bank account to determine the health of their business, if they can buy something or not or hire an employee or not, and you were kind of, you didn't say it quite like that, but you addressed it. So let's talk about the financials, what they tell you.

Speaker 2: 3:54

Yeah. So the way that I look at the financials is that it's a. It's a way to look at the history and gain insight into what happened, what went right and what went wrong. Once you have that information, then you can figure out what the path is forward so that more things can go right, which things can have the biggest impact if we change them based on the numbers. If I look back at the history and I say our prices are too low, so if I can raise my prices some way, so that's going to change my history.

Speaker 2: 4:31

It's a matter of understanding what that history tells you in terms of making different decisions going forward, so that things look up instead of repeating themselves time and time again and we get out of that vicious cycle of, you know, maybe taking out a loan, losing out all that money or wasting that money. It's a matter of making better decisions based on the facts and the circumstances. So if you can understand your finances, if you can read your financials, it gives you that accurate understanding of what happened so that you can know what finances. If you can read your financials, it gives you that accurate understanding of what happened so that you can know what to do about it.

Speaker 1: 5:10

Most business owners that we come across have heard of a P&L, but we like to use three different financials for decision-making, and that's the balance sheet, the statement of cash flows and the P&L. Can you explain just shortly what each of those do, Because I know business owners have seen them and it's just a printed page to them and they don't really understand how to use them or what they're for.

Speaker 2: 5:37

Exactly, yeah, exactly, and most of them are more familiar with the P&L, sometimes the balance sheet, but most of them have no clue what a statement of cash flows is and unfortunately, that tells the majority of the story. So if you're not getting that third piece of the puzzle, you're missing a huge chunk. So, briefly, what they are, p&l is going to show you a timeframe, what happens in terms of revenue and expenses. So usually it's looked at on a yearly basis. You can look at it on a monthly, quarterly, whatever you want. It's going to show you how much revenue came in during that time, how many expenses went out during that time and what was left. Hopefully, yeah.

Speaker 1: 6:19

Well, let me ask that. Let me. I don't want to interrupt, but I want to ask this question because every business owner says, or ask why does it show I made money? I don't want to interrupt, but I want to ask this question because every business owner says or ask why does it show I made money, but I don't have money in the bank account?

Speaker 2: 6:30

Exactly so that's where the statement of cash flows comes in. We'll get to that in a second and that's the biggest problem is that making that jump from the P&L to the statement of cash flows is usually where things go haywire. They'll look at their accounts and they'll say okay, so my P&L shows that I made a million dollars, two million dollars this year, whatever it is. A half a million dollars Go to my banker and my banker says you're overdrawn.

Speaker 1: 6:57

So now, what do I do about it right, yes, if you're lucky, you're at zero.

Speaker 2: 7:03

So we'll go step by step. So the P&L is showing over a period of time what happened. The balance sheet is showing you at any specific point in time what is a picture of the business. So, whereas a P&L is over time, a balance sheet is a picture at a specific moment in time. Usually you're going to look at that at the end of a month, you'll look at it at the end of a quarter, the end of a year, whenever it shows all of the assets, liabilities and, hopefully, equity that's in the business at that specific point in time. So if you have machinery, if you have inventory excuse me, if you have computers, whatever it is that you all the things that you own in the business at that date. So that's going to be on your asset side. Anything that you owe to other people, any loans you took out, any debts that you have, that'll be on the liabilities section and anything that's left over. So that's going to be in the equity section. But again, it's a snapshot as of a specific date or time or year. Whenever it is that you decide to look at it, the statement of cash flows is going to show you where money comes into the business and where it goes out, and a lot of times that's going to be the downfall of a business that's having cash flow problems. You can uncover those if you have an updated statement of cash flows and if you understand it and can study it.

Speaker 2: 8:30

One of the biggest issues with that difference between profits and cash in the bank can oftentimes be accounts receivable. Those are essentially loans that you're giving out to your clients that they haven't paid you back on yet. So if you have unfavorable payment terms from your clients, you're still paying money to your vendors to service those clients and to your employees and to your electric bill, your overhead all those things you're still paying in order so that you can serve your clients, but the money hasn't come in from the client yet. You've essentially just given an interest or free loan to your clientele during that period of time. So that's going to be revenue, it's going to show up on your P&L as profit, but it's not actually cash in the bank.

Speaker 2: 9:18

Another big issue, depending on what service you provide or what product you provide, could be inventory. So if you are building up inventory, you're building more and more widgets and you're storing them in your warehouse, so you're expending on your machinery working, on your workers working. You're buying more material, more cost of goods sold, but until you actually sell that inventory to a third party, to a client, so that money is just going from your bank account and then sitting on your shelf in the warehouse. That's not helping you. It's not necessarily going to show up on your P&L. If you're running an accrual basis accounting system, which you should, that's a different conversation. So you're not necessarily going to see it on your P&L but you're going to see it out of your bank account. So having a good grasp on this statement of cash flows can help you foresee the problems that are coming down the pipe.

Speaker 1: 10:18

Can you share the importance of hiring a professional accountant bookkeeper so that they do have accurate accounting? I know a lot of business owners for some reason that area of their business. They feel like they can go at it alone but that's not helpful. Can you explain the difference between them doing it and a professional doing it?

Speaker 2: 10:43

So I don't know if they think that they can go out alone or they just don't realize the value that can be added from someone that really does understand it. I think that it's something that's not in the forefront of their brains. It comes to the forefront of the mind around tax time, when they have to do their taxes and their accountant takes care of that. Their bookkeeper and their accountants figure out their tax liability and they send a check to the IRS. Fine, they don't realize that this is something that should be driving decisions throughout the year and should really possibly change the course of the business throughout the year. If it's just something in the back of the mind that you're going to handle once a year, you're going to look at it once a year. You're not gaining anything out of it. Right? It's like going forward without studying your history. Eventually, you're going to repeat the past because you're not going to learn any lessons. You have to look back at the history regularly, not because the history itself is so important, but because you can learn lessons from it and you need somebody that can help you understand those lessons and figure out how to apply them to your business going forward.

Speaker 2: 11:48

So, whether you like it or not, every business has somebody who's in charge of the finances. It might be one of those hats that the owner is wearing that they don't want to be wearing. Somebody is going to be the chief financial officer of every business, no matter how big or how small. They might not have that official title, but if they're the ones that are running the books, running the financial decisions, they are the CFO. And if they don't understand it, you're missing out on a huge tool and a huge opportunity in building your business by understanding those facts, understanding that history and learning those lessons so that you can move it forward. So you need to bring somebody on board whether it's your bookkeeper, your accountant, getting a fractional CFO in to help you understand it, so that you can make the right decisions and change course where needed.

Speaker 1: 12:34

I know a lot of business owners are bootstrapping their business, especially startups and those that may have fallen upon difficult times. Is there a benchmark or suggestion that you can give? Like, if you're doing X revenue, that would be a good time to really invest in a outside bookkeeper, fractional CFO? Is there a number that it would be beneficial to the business, Because some of them just don't have that extra money available?

Speaker 2: 13:05

Yeah, I would say from the first dollar. You need somebody who's getting it Now. It doesn't always need somebody from the outside that you're hiring. There are resources online that you can use to understand your numbers to some extent by yourself, but once your business is taking up more of your time and you need to free up some of your headspace so that you can focus on other aspects of growing the business. So, just like, eventually you're going to hire out a secretary, you're eventually going to hire out employees to take care of the client-facing services, so eventually you're going to need to outsource that as well.

Speaker 2: 13:44

It's just a matter of whether you have the bandwidth to take care of it yourself. If you don't, somebody has to take care of it. If you can learn it yourself and your business is still small enough where you can manage it, so that's great, that's wonderful. Those resources are out there. I have a resource on my website that you can download for free and that'll show you a way to set your goals and to manage your goals. But if it's something that you personally just don't understand numbers don't speak to everybody, I understand that then you need someone who's going to help you understand it.

Speaker 1: 14:22

Well, I think a lot of people can relate to some of your questions or statements on your website. Your business relies on you or it falls apart. You can't grow your business without more cash, but you don't have more cash to grow. You don't have a simple way to know what is and isn't working in your business and you don't know what to do next to grow your business. You're here to help, so can you kind of share a little bit? You're a fractional CFO so you can be that guide for them, just like I'm a business coach. I can guide them on the business side. But what is your simple cycle to grow your business? Can you share kind of how that works?

Speaker 2: 15:01

Yeah. So the cycle that I implement with my clients, and the one that I profess to anybody that will listen, is that on a yearly basis, or, if not yearly, it has to be some sort of regular basis. I'm a proponent of doing it annually Towards the end of the year November, december, start looking towards the next year, seeing what it's going to be like, but on that yearly basis. Setting out your targets. Like, but on that yearly basis, setting out your targets, there's anywhere between 10 to 15 targets that you can set for any given business, from the amount of leads you're bringing in, how well you convert those leads, all the way down to what new debt you're expecting to take out or what withdrawals or investments are you planning on making in the business. Setting targets for all of those 10 to 15 numbers on a regular annual basis. That's step number one. Step number two is on a monthly, maybe bimonthly, basis, you're going to look and see what did your business actually do during the last two, three, four months, wherever we are in the year. So, from January 1st until the date that you're doing that analysis, how far have I come towards achieving those goals? Step number three is going to then make an estimate for the remainder of the year, right? So if right now we're in June, so from June till December, where do I think the business is going? Keeping in mind any seasonality to my business, right? If I run a ski lodge, I'm not expecting any business coming in, uh, in July, August and September, probably not October, maybe not even November, right? I might be just a December to February type of a type of business. Um, so, projecting out based on your history and your seasonality, what? What does the future look like until the end of the year? Uh, step number four would be taking what you did in two and three, so basically the whole yearly picture, based on what has happened and what I project to happen, taking that total and comparing it to the targets that I set in the first step. And so two, three and four, and five and six as well, I'm going to be doing on a monthly basis.

Speaker 2: 17:08

Number five is going to be setting goals, figuring out which of those targets am I achieving, which ones am I kind of lagging behind on, and, of those ones that I can do something about, which ones will have the biggest impact if I do that thing about them, right? So if I could bring in more leads. Would that even help? Or am I just blowing every sales call, in which case that's not really the thing that's driving my business down the tubes? I have to now focus on my lead conversion. I have to get some sales coaching or whatever, trying to figure out which of those numbers I can do something about and, if I did, which would have the biggest impact.

Speaker 2: 17:48

I'm going to narrow that down to two, maybe three of the numbers on my list and then in step six, I'm going to actually list out what am I going to do in the next 30 days to accomplish the goals that I set out in step five, right? So step five I'm determining which of those numbers I want to set a goal for for the next 30 days, and step six is what am I going to actually do during those 30 days to accomplish those goals? And then the next month I'm going to start again from number two. Right, the targets that I set in number one. Those should last me all year long, unless something happens and I'm realizing I have to change them or update them or whatever.

Speaker 2: 18:24

But steps two to six every month I'm looking again and seeing what's changed. Where have we been? Where are we going? What can I do about getting closer to where I want to be? And some businesses might not be moving on a monthly cycle, so maybe they're really small and things don't change that much At least once a quarter to do this cycle. Every business, no matter how big, how small, has to do this reflection at least once a quarter.

Speaker 1: 18:54

Yeah, A lot of people don't think of financials as the scoreboard and that's kind of how you're describing it. Just like in any sport right now. Currently we're in the NBA finals in America and everybody knows who wins by looking at the scoreboard, or who's ahead or who's behind, and they take timeouts and they adjust defense, offense, things like that, and that's kind of what you're sharing on your website. You have a free copy of You're listening to Small Business Pivots. This podcast is produced by my company, Boss. Our business is helping yours grow. Boss offers business loans with business coaching support. Apply in minutes and get approved and funded in as little as 24 to 48 hours at businessownershipsimplifiedcom. If you're enjoying this podcast, don't forget to hit the subscribe button and share it as well. Now let's get back to our special guest. On your website, you have a free copy of a prosperity playbook. How can that help people?

Speaker 2: 20:02

So yeah, the prosperity playbook. It helps you with that first step of setting out the goals, step of setting out the goals. And then I actually have in there something that I call the scoreboard which helps you with steps, steps four and, to an extent, steps five, two and three you kind of have to track on your own. There's ways to do that. It's not so hard to usually. Step two is basically your P&L from year to date. Step three is a little bit more of guesswork of kind of you know we can't really predict the future. We can make some educated guesses on where we think things are going, uh, but it's. It takes a little bit more analysis, uh. Step four is a matter of putting that together and seeing where are we on the scoreboard. Right Part of that prosperity playbook, the last tab in there, is a scoreboard to see which of the goals that I set am I going to meet, how am I doing in the game of business, and then you use that to set steps five's objectives and step six's next steps.

Speaker 1: 21:02

You mentioned you're in Israel. What types of businesses do you work with and where?

Speaker 2: 21:09

So I work with any English speaking business right. I uh to an extent I could potentially work with uh, with uh Hebrew speaking businesses. My Hebrew is not that great, um, but any business across the world has financials right, even though my background is in accounting, doing taxes for US businesses. The work that I'm doing as a fractional CFO or, like I like to say, business finance doctor, to get your business healthy, it's universal concepts that transcend tax law, transcend local business law. These are concepts that date back thousands of years. Just that idea of assets, liabilities, equities, that P&L balance sheet statement of cash flows. These are universal concepts that apply to any business, any size, any industry, in any location. That being said, I do tend to work more with US-based businesses, just because that's my background.

Speaker 2: 22:07

Like I said, with US taxation, I'm a recovering accountant, as I like to say, but I tend to gravitate towards the trades people, the blue collar types of businesses, the home services. That's kind of the personality that I get along with. The home services. That's the personality that I get along with, not to say that I can't work with other types of people. I have a client that's a doctor, who does coaching for medical issues that people have. There's other industries as well. Lawyers need this type of help as well, because they might know what it is to practice law and to write up contracts. When it comes to growing an actual law practice, that's a whole different ballgame, a whole different animal. But myself, personally, I like to look at myself as a blue-collar type of person in a white-collar job, so that's kind of where I gravitate towards.

Speaker 1: 23:09

I'm curious for a little history lesson, since you are a recovering accountant. Do you know where or when accounting began? Is there a system? Is it a law? Is it you know? Where did it come from? You don't have to give like details and names and years, I'm just curious like how it even became what it is.

Speaker 2: 23:36

That's a great question and I don't actually know. I would love to know the answer. I do know that these principles have been around since way way way back when Three 4,000 years, something like that. So that is probably one of the first things that I'm going to do as soon as we're done with our call.

Speaker 1: 23:53

I am too, and I'm sure some listeners are also it's.

Speaker 2: 23:58

It is something that I have been curious of lately. Uh, so I'm I'm definitely going to look it up so that I'll be more prepared for that next time.

Speaker 1: 24:05

Well, you are a fractional CFO, so your business is probably picture perfect, right, just like mine is probably, just because I'm a business coach. Wrong, so tell us some things that you've done or experienced or pivoted in your business so that others can learn from our mistakes.

Speaker 2: 24:31

Picture perfect is. You know that's a relative term, right? So, like I said, just like I do with other people's businesses, my clientele's businesses, I do with my own. I set my own goals. Now those goals have to be something that's achievable, and it also can't be where I'm at currently, because that's not a goal, be something that's achievable, and it also can't be where I'm at currently, because that's not a goal. Right, it has to be something where I'm striving towards. So it may be that if I were looking back from five years ago to my life now, maybe I would say that's picture perfect. But if I'm in the same place now, in five years from now, there's a problem there. Right, businesses have to grow. Right. If your, if your business is not growing, then it's probably doing the opposite, right? I look at life kind of like a treadmill If you're not moving forward, you're most likely moving backwards.

Speaker 2: 25:18

So in terms of changes that I've made personally, starting this practice of being a fractional CFO was a huge jump for me. I kind of got into accounting I don't want to say by mistake, but it certainly wasn't what I expected. It wasn't what I was hoping for when I got into it. I worked in US taxes for about a dozen years before I came across this fractional CFO work and it really spoke to me just from going way, way back to why I got into accounting was to be that business doctor, that financial doctor for people. I'd always expected that it would be on the personal side, on the family budgeting, but just where my career took me, it took me to the business side of things and that's kind of where I see my fractional CFO practice going.

Speaker 2: 26:16

But at the end of the day, when you're dealing with a small business owner, they have a family to feed. The business is the personal. So I see that the fulfillment of helping a family make ends meet and figuring out what's going wrong and how to fix their lives from a financial perspective. That's why I got into accounting Again. Taxes was really not that avenue, even though I was led to believe that it could be. But that's the number one change that I've made in my business was just, instead of focusing on taxes and on the reporting side of accounting, which you know that that's important, it's needed right, you need somebody to keep to do the bookkeeping, to do the taxes. That's. That's a hundred percent necessary. My fulfillment comes from helping people change the future, so that's not as bleak as the past makes the future seem.

Speaker 1: 27:10

I see a few books behind you and the Rubik's Cube. What is? Some books, or maybe some podcasts that have helped you build your business, that you could share with others.

Speaker 2: 27:24

Yeah, I was actually just talking to some people about this today on a group huddle that I do on Thursdays, and we were just talking about Good to Great by Jim Collins concept of knowing where your lane is and sticking to it, no matter what that things might change. The world might change. Ai can come in and you're going to think it's going to upend your industry and your whole life is going to be flipped upside down. You might lose your job, you might lose your practice. If you have that hedgehog concept of knowing where in life you can make a difference for other people, you just have to keep that in your focus and you'll then be able to ride the waves of technology. And as long as you can figure out how to apply that hedgehog concept to your new reality, that's the way you're going to find your path forward. Really, those three concepts that he talks about in the hedgehog concept are why I got into what I'm doing.

Speaker 2: 28:37

The three questions essentially what are you good at? Where is your skill set? If you don't have a skill set in a certain area, you're not going to do very well in that area. What do you enjoy doing? The number two thing what do you enjoy doing? If you don't enjoy your work, how long can you do it before you burn out? And the third concept where are you going to make a difference in the world? Where can you add value to other people? That's where you're going to get clients. So if you don't have a passion for something, if you don't have a skill set in something, or if what you're doing doesn't make a difference to other people's lives, those three things, they have to be in harmony in order to figure out your business.

Speaker 2: 29:18

That's kind of where I got the impetus to go into this type of work comes from. And then when I read it in Good to Great, that was like an eye-opener that this is not just a concept that I can apply in my own personal life, but it's a concept that every business has to have as well. Right? A business is a living, breathing organism, just like a person is. So the business itself has to have that core concept of where's it going, has to have that core concept of you know where's it going, what's its pathway, in order to survive and to thrive. It needs those same three things it needs a passion, it needs a skill and it needs clients. Right, if you're missing in any of those three things. The business can't long endure.

Speaker 1: 30:04

Yeah, speaking of, you mentioned AI, and when this gets uploaded, your answer could be different. It changes that fast. What is AI doing to your industry in the accounting world? It seems to be doing affecting everybody somehow.

Speaker 2: 30:24

I mean, where I see it, it's in the grunt work, sometimes In the accounting world in general. It can be in doing the bookkeeping or filling out the tax forms. In my specific work, it can help with the analysis of the P&L and of the balance sheet and of the statement of cash flows in order to see what areas are lagging behind, for lack of a better term. But at the same time, I think that when you're dealing with a business coaching type of relationship and I imagine you'll agree with me this you can tell me you can disagree as well. People need a personal touch and that's a huge part of it. Right, just the other day, somebody reached out and said on a group that I'm in, and said anybody know any business financial coaches or consultants? And so I raised my hand and you know? I said you know I can help you, and apparently two other people did as well and I asked and I asked the person when they reached out to me, who are the other two people? And when they told me and I said okay, so why come to me? Why not go to them?

Speaker 2: 31:35

And it really comes down to the personal touch. Right, there's a relationship there when I'm asking somebody to help me through a rough situation. I need somebody that I know cares and, as much as it might sound like it does, and it can make its voice change to whatever tone is needed, ai does not care, right, it just doesn't. It's a computer, it really does not care and you can tell it. Put on an empathetic voice when you talk to me and whatever, and it'll listen to your instructions. But when you're dealing with something so close to people's emotions, you need that personal touch.

Speaker 2: 32:14

And people who build their business from scratch, right, people who are really so highly invested in their, in their business, it becomes like another child. And you know, go tell somebody I want you to help me raise my child. And you're a computer. They're not going to be very happy about that. So it can help with a lot of the backend stuff. It can help a lot with the grunt work, but when it comes to the actual face-to-face with the clients and the actual discussions on what can we do and what can we change and how can we work on this, I don't think that's ever going to go away. I don't think that'll ever replace a person.

Speaker 1: 32:51

I agree. I agree there's something about the emotional process that's got to be included, you know. So what are some common challenges that you see with businesses? Kind of you see these repeated challenges that business owners are going through, and then what are some solutions that you've helped them with through those challenges?

Speaker 2: 33:16

Yeah. So I think the biggest challenge, if you had to put it into one word, would be focus Right, figuring out where they should place their focus. Which are those, you know? Going to another book, the Seven Habits of Highly Effective People, that quad, that those first, second, third, fourth quadrants, the urgent and the important and the not urgent, not important where are they spending their time in their day and which things can actually move the needle in the business that they should be focusing on that? Unfortunately, they're not. So I think that's the biggest overall problem that I see amongst people. Where that manifests is seeing where are those low-hanging fruits, right? Where are those things that I can easily change in my business that's going to bring in an extra $100,000 in cash tomorrow, right?

Speaker 2: 34:09

I had one client that their accounts receivables were just growing and growing year to year or month to month, if not week to week, and they couldn't figure out why and took a little bit of digging not a whole lot, a very little amount of digging figured out that there was a lot of. Their invoices were not actually being sent to their clients. So they were servicing these clients and there was a little checkbox in their invoicing software saying you know, send invoice to client and that box defaulted to being unchecked. So there was all these invoices that just never went out. That's all you need is a little bit of analysis on the numbers to see. Wait a minute, this growing, climbing accounts receivable is not normal. Something is wrong here and then okay, let's dig into it. Five minutes later you figured out the problem. You send out all these invoices and you can just bring in hundreds of thousands of dollars in cash. Now, looking at your P&L wasn't going to help you because the revenue was there. You were booking the revenue when you're doing the service, but something's wrong on the statement of cash flows. Why is this accounts receivable just ballooning and going out of control?

Speaker 2: 35:14

Another area that I see sometimes is focusing on the wrong types of services.

Speaker 2: 35:19

One of the first things I do with my clients when we're setting those targets in that first step is figuring out what are their different services and products that they offer, which ones are more profitable and which ones are less profitable, and are they focusing on the ones that are the most profitable?

Speaker 2: 35:34

I know somebody who had a picture frame business and they had kind of more modern metal frames and then like more classic wooden frames and they were spending a lot of their efforts on pushing the modern metal frames excuse me to their customers and not so much effort was efforts on pushing the modern metal frames excuse me to their customers and not so much effort was going on to the wooden frames. Turns out which ones were the more profitable endeavor was the wooden ones that they weren't pushing. So here they are, putting all this effort, marketing expenses, payroll into the salespeople to push the least profitable of their services. So again, a little bit of an analysis, a little bit of understanding of the numbers is going to help you figure out where you should put your focus and help you make it so that it could become profitable, just by focusing on the right service and maybe downplaying or maybe even sometimes canceling the wrong service if it can be something that's actually causing a loss.

Speaker 1: 36:30

What would you tell a business owner that's afraid to ask for help? And what I mean by that is when I come across business owners at networking events. They have this facade. They have to share people what they do and how good they are this, that and other but a lot of times they're afraid to go to professionals like you or ourselves because it's a little messy under the hood, if you will, and they don't want to be exposed. So how do you work with overcome that and how would you encourage someone? It's okay, you know, because a lot of times that's their hesitation for not reaching out.

Speaker 2: 37:05

Everybody's books are a mess for not reaching out. Everybody's books are a mess. Everybody's numbers are are wildly inaccurate. Yes, the the fix is not as big of a deal as you think. Right, you don't need your numbers to tick and tie to match perfectly in the real world. That does not happen. Businesses, just their numbers, are going to be a mess to some extent.

Speaker 2: 37:32

What you need is just in terms of fixing that. You need a general understanding of where are the numbers actually moving. You don't need the numbers to be perfect, you just need a general understanding of is this number increasing? Is it increasing a lot? Is it decreasing? Is it decreasing a lot or is it staying stagnant? As long as you can fit it into one of those, you kind of have a general idea as to where you have to focus In terms of being able to ask for help.

Speaker 2: 37:59

Nobody can do it all. Everybody has their own skill set, and if your skill set is not in numbers, then you will not understand the numbers to the extent that you need to. If you are somebody who is, like we said, a lawyer or a plumber or a HVAC technician or whatever, you're very good at that, but if you're not focusing on that. You're going to be spending a lot more energy on whatever it is you are trying to focus on. Let's say it is the numbers. So you're going to be spending a lot more energy on that and it's going to take away your time from doing the things that you are good at and the things that you can focus on growing within your business. So everybody needs help, right? Nobody can do it all. Nobody can wear all of the hats and when they do, their business is going to suffer essentially.

Speaker 1: 38:46

Yeah, yeah. So I'm sure you've piqued some interest from our listeners. Where's a good place to follow you, engage with you, get in touch with you for additional insights.

Speaker 2: 39:01

So you can go to my website pinskyconsultingcom. I have on there, like you said, the prosperity playbook where you can download a guide towards setting your goals and keeping score of your goals. You can also follow me on LinkedIn under Abraham Avi Pinsky. I think if you search for Avi Pinsky, you'll probably get me. My full name is Abraham, so that's kind of where I did that. But yeah, those are the two main places, linkedin and my website.

Speaker 1: 39:30

Fantastic. Well, I always end with a question, and that is if you were in a room full of business owners, different industries, different seasons of business what's one thing applicable that could help all of them, no matter what season of business or type of business they have, that you have discovered?

Speaker 2: 39:49

One thing that can help every business across the board.

Speaker 1: 39:52

Could be a quote, could be a book, it could be anything.

Speaker 2: 39:56

Oh, okay, we can go there. I was going to say just get a basic understanding of numbers, right, you don't have to be an accountant. But accounting is the language of business. So if you don't understand what your accountant is telling, you ask a question. Right, that's what they're there for. They're not there to just do your books, to just do your taxes. They're there to be a resource for you. And if your accountant is not willing to answer your questions, they're not willing to explain things to you.

Speaker 2: 40:23

Get a different accountant, right. You need to understand what's going on in your numbers. You need to understand your P&L, your balance sheet, your statement of cash flows. And if you cannot understand the way that they're talking to you, then you need to get clarity either from them or from somebody else. Right, the accountant's job has to be a translator to translate the finances into English so that you can understand it. And again, there are resources out there that you can get the education yourself. But if you're already paying somebody to do the work for you, who knows your situation, knows your numbers, they should be doing that for you as well.

Speaker 1: 41:00

Absolutely. And just to piggyback on top of that, as I always tell our clients when we start working with them, there are no dumb questions. There aren't, yes. So if you're thinking yes, ask it. Don't assume that it's a dumb question, because there are no dumb questions. You don't understand it. You don't understand it. So you've been a wealth of information today. I appreciate it and wish you continued success, thank you. Thank you very much. Thank you for listening you very much. Thank you for listening to Small Business Pivots. This podcast is created and produced by my company, boss. Our business is growing yours. Boss offers flexible business loans with business coaching support. Apply in minutes and get approved and funded in as little as 24 to 48 hours. At businessownershipsimplifiedcom. If you're enjoying this podcast, don't forget to hit the subscribe button and share it as well. If you need help growing your business, email me at michael at michaeldmorrisoncom. We'll see you next time on Small Business Pivots.