As we face yet another series of business challenges in the shape of inflation, interest rises, staff shortages and the potential for wage increases, it is more important than ever to have to be in control of your business.
At the core of this control is your financial viability and the tool that helps you with this analysis is your Financial Statement. Unfortunately it’s estimated that 75% of small and medium business owners have less than a basic understanding of their financial position. The remedy is for business owners to seek specialist advice from an accountant.
Typically when financial are mentioned people think of revenue and expenses. I’m going to cover two inputs into the revenue pot. These are Sales and Marketing
I discuss the importance of understanding your marketing objectives and how to measure the results. Marketing, done well, makes the sales process more predictable. Determining the Return On Investment on your Marketing spend needs constant monitoring and it’s the most difficult measurement to make because of the lag between input and output. Once again it’s knowing what questions to ask and using your Experiential Awareness when deciding what direction and investment to make.
Sales is somewhat easier in that it far simpler to measure. The difficulty is the interpretation of the results. Having a more consistent level of sales activity means that you will have more confidence in predicting the level of revenue.
Every decision on what to spend money on is based on the estimated return on the investment and the value that investment will bring. I look at the perception of value for money as a buyer and seller.
This episode meanders through the connections between marketing, sales and spending money and how these can be modelled to provide you with process to budget for the next few years.
Ask - Ryan Levesque
The Right It - Alberto Savoia
Blindsight Matt Johnson & Prince Ghuman
Building a Story Brand - Donald Miller
Stephen Sandor CEO Inspiring Business
Inspiring Business website - www.inspiringbusiness.net
Book an Exploration Call here - https://inspiringbusiness.net/exploration-call-booking/
The Scale to Success System - https://inspiringbusiness.net/deep-dive-program/
Stephen Sandor LinkedIn https://www.linkedin.com/in/stephen-sandor/
Inspiring Business LinkedIn https://www.linkedin.com/company/inspiring-business
Facebook https://www.facebook.com/inspiringbusinessaustralia
As we face yet another series of business challenges in the shape of inflation, interest rises, staff shortages and the potential for wage increases, it is more important than ever to have to be in control of your business.
At the core of this control is your financial viability and the tool that helps you with this analysis is your Financial Statement. Unfortunately it’s estimated that 75% of small and medium business owners have less than a basic understanding of their financial position. The remedy is for business owners to seek specialist advice from an accountant.
Typically when financial are mentioned people think of revenue and expenses. I’m going to cover two inputs into the revenue pot. These are Sales and Marketing
I discuss the importance of understanding your marketing objectives and how to measure the results. Marketing, done well, makes the sales process more predictable. Determining the Return On Investment on your Marketing spend needs constant monitoring and it’s the most difficult measurement to make because of the lag between input and output. Once again it’s knowing what questions to ask and using your Experiential Awareness when deciding what direction and investment to make.
Sales is somewhat easier in that it far simpler to measure. The difficulty is the interpretation of the results. Having a more consistent level of sales activity means that you will have more confidence in predicting the level of revenue.
Every decision on what to spend money on is based on the estimated return on the investment and the value that investment will bring. I look at the perception of value for money as a buyer and seller.
This episode meanders through the connections between marketing, sales and spending money and how these can be modelled to provide you with process to budget for the next few years.
Ask - Ryan Levesque
The Right It - Alberto Savoia
Blindsight Matt Johnson & Prince Ghuman
Building a Story Brand - Donald Miller
Stephen Sandor CEO Inspiring Business
Inspiring Business website - www.inspiringbusiness.net
Book an Exploration Call here - https://inspiringbusiness.net/exploration-call-booking/
The Scale to Success System - https://inspiringbusiness.net/deep-dive-program/
Stephen Sandor LinkedIn https://www.linkedin.com/in/stephen-sandor/
Inspiring Business LinkedIn https://www.linkedin.com/company/inspiring-business
Facebook https://www.facebook.com/inspiringbusinessaustralia
Welcome to the Inspiring Business Podcast where we hope to inspire you the business owner provide you with information, knowledge, and tools that will help you create a business that is scalable and ultimately independent of your daily involvement. My name's Steve Sandor, and I'm your host today, and welcome to the sixth episode of the Lazy Entrepreneur Series, where I walk you through the Scale to Success Solution and provide you with the very process that I help my clients with to achieve the goals that they're struggling with. A little while ago, I was given the opportunity to present to the clients of Aegis Business Services and their quarterly client update and the managing partner of Aegis, Tori Van Der Donk mentioned that 75% of. Business owners don't understand their financial statements, and so they're on a mission to help their clients with that. If you're interested in becoming educated around your financial statements I'll put a link into Aegis in the show notes. And I'm sure Tori would be more than happy to have a conversation with you about that. This is not what we're talking about today. We're, talking about financial modeling as opposed to financial accounting or management accounting. And we're going to go down couple of rabbit holes in the sales and and marketing area. And they are two different areas and what I'm wanting to impress upon you is going back to what we did in episode three around priorities and decision making and around that experiential awareness and really getting in tune with that around your financial modeling. If you've been running a business for some time and you are experienced in that in the financial area, this might be a refresher for you. I'm sure there'll be some points that will be a nice refresher for you to go back and maybe review some of the processes that you have actually have in place at the moment. And if you're new to this this will be very much a 1 0 1, information for you. I did some research before the podcast just to get an understanding of why. What are the issues that business owners are, are being challenged with it, particularly in the area of financial management. And let's see if you resonate with any of these in, there's a limited or inconsistent cash flow that typically comes as a result of poor marketing and sales. There's no budget. And, again, in the small business world, there is a lack of perceived need to have a budget because of the size, the reserves are not there for the unknown and you would be excused to not have reserves. At the moment, given the pandemic and the crap that we've gone through over the last couple of years. But there is a storm heading our way, and we do need to make sure that we're we're ready for that. And the other one is, uh, around poor compliance. And I know I'm doing some work with Aegis and I know that's a significant issue that they have with some of their clients. So just a couple of financial fundamentals. And one is the structure in which your organization or entity is housed in. Now, I know a lot of businesses when they first start, They're either solo entrepreneurs, so they're, you know, they're operating off at abn off their own name, our own tax file number. Then they start to grow and they look at other entities like, uh, proprietary limited companies or trusts. One of the things that we look at when we go through the deep dive is the is your structure. And there's always a, an argument for and against both from the accountant and the lawyers in terms of what's the most appropriate structure. The accountants tend to argue from the tax point of view, and the lawyers tend to argue from the protecting your asset point of view. And I think they're both right and it does depend on what your goals are over the next little while. So if retained earnings and profit is important. Obviously, minimizing or reducing the amount of tax that you pay is, a valid argument. Um, there obviously needs to be some asset protection in there as well. If potentially you are getting your business ready for sale, um, then maybe capital gains tax is an area that you're wanting to focused on it's, I think you can get both. Based on my experience, you can, I think you can set your business up so that as it scales, there are opportunities for you to move the dial depending on where you're at. And this is where I bring in subject matter experts who are in this space, who can provide you with the absolutely the right type of arrangement in place. If you're in business with a partner, then it's essential that you have some form of buy sell agreement in place. I've seen far too many businesses that are, they end in tears because the, both the business owners typically they were friends when they started. And then because they don't discuss all of these before the event because of a, business breakup is event is inevitable. So what you're wanting to do is have an agreement in place whilst you're in love with each other and then when you break up, it can be amicable. The other area is obviously in risk management, um, and that's around insurance and personal, and both personal and business insurance as well as making sure that your assets are. So there's some fundamentals that you just wanna make sure that you've got those in place. And again, if you don't have them in place, reach out to specialists in this area. And if you don't know any, then more than, I'm more than happy to help and refer you to specialists in that area. So we're going to look at the three areas of financial modeling. The first is marketing and the return on investment that you can expect or that you should be looking at in terms of marketing. Uh, The numbers around sales revenue, or at least the activity that ends up with sales revenue and then looking at at expenses and more about that attitude towards those expenses. So before we jump into, um, marketing as being the first topic, I, I, I wanted to circle back a little bit over the, and reflect over the last two or three years, it's definitely been a two speed economy. Some of the businesses when the pandemic hit, some of them have actually benefited from it. If you were selling cars, uh, caravans, motorbikes or jet skis, uh, or you were doing house renovations. Then you, your business has pretty much been at the forefront. Or, and it obviously And then there's been a whole bunch of businesses that have been on welfare, uh, and they're basically just coming back to life now and those are more around the hospitality and, uh, And tourism type of businesses. And, as I said, you know, both of those, uh, it was a two speed economy. Both of those are now having to deal with different challenges. The businesses that have been banking it for the last couple of years are now in a situation where their business is slowing down. Now the smart ones understood. That revenue was not sustainable. So they'd been planning for this and reserving some funds to, or, or at least looking at their expansion strategies and whether those expansion strategies are sustainable and the business that are now sort of gonna coming back into the fray, they're now having to deal with cash flow. They're now having to deal with finding employees, investing back into the business and all of. Requires some planning. So we've got some headwinds coming our way with, uh, inflation interest rates increasing, potential wage rises happening here in Australia and potentially across the globe. So, Spending some time on planning is really, really important, and I'm gonna couch this around financial modeling, but there's a whole raft of things that feed into your financial modeling. How to approach financial modeling. Obviously there is a risk taker or risk averse, uh, approach or somewhere and somewhere in between. And the majority of clients that I work with, and I would suggest that the majority of business owners are of a risk taken, um, nature and that's why they're in business. And, I think I've mentioned this before that my role in this is to be risk averse as their guide if you like. And I would suggest that you, if you don't have people around you who are challenging your thinking around what it is that you're spending your money on, that you're not looking for somebody to stop your entrepreneurial spirit, but at least challenge you on, the assumptions that you're making. And the conversation I have with my clients is that I don't wanna stop them from taking the risks that have made them successful, but if we can just spend a little bit of time analyzing the reasons why they got 'em wrong, perhaps we, What we can do is we can convert three out of 10 decisions into four out of 10 decisions that are A success and that's a 30% improvement in the outcome. And so that's something that you can think about find people, uh, around you who are not always agreeing with you and they're challenging you so you can have a critical thinking around your strategy. The key to finance, I guess, again, I'm not a financial planner, but really simple approach is spend less than you earn and then you'll have a profit. That's pretty much as simple as that, so make more money than you spend. Sometimes debt is good. So if you are borrowing money to expand your business, that will enable you to generate more income that's a good thing if you are borrowing money to pay recurring expenses, that's not such a good thing because you'll end up with this spiral of, debt. And this final part is more philosophical than it is anything else. And I just know that when, when people chase money, um, the outcome is very bitter because you'll never have enough. And so, we talked about this in last week's episode where we were looking at for purpose. And I think if, and I'll talk about donating money or volunteering and the purpose behind that a little bit later on but again, you know if, money is the end game, I'm not sure that you're gonna be necessarily satisfied. But it is a philosophical view and I'm happy to be, I'm happy to be challenged on that as well. So what are the things that we're gonna be talking about? Marketing, sales, and we're gonna be looking expenses as well. Marketing is, in my opinion, one of the hardest things to do, and I guess that's why marketing agencies exist and the good ones, you know, command the, the fees that they charge because I, I've had some brilliant ideas in the past and they have fallen on deaf ears or that they just don't convert. You might be also, you might be a little bit ahead of your time. I remember back in 2002, 2003, we had a life insurance product that was online. Now, today, you would go, Well, okay, what was wrong with that? Well the, no one knew what the internet was then. A a a website was a single page brochure that cost you $3,000 and there was no interactivity with it. There was, SEO was only just starting and people just wouldn't weren't prepared to put their credit card forward to pay anything. Now, today you'd look back at that and you go, What are you talking about? Well, back in those days, that was the situation. So sometimes your ideas can be just a little bit ahead of the little bit ahead of time. But from a financial modeling point of view, in terms of marketing, what you want to be doing is you want to be able to Measure that. So what's the return on investment of your marketing dollars? A friend of mine who used to be the managing director of Billabong, Derek O'Neil. We were having a conversation once over a beer, and I asked him, I said Derek, you spend millions and millions of dollars on marketing how do you know how do you know where to spend it? And he said, Well, we know 50% of what we spend works. We're just not sure at the start, which 50% it's going to be. So the lesson there is that you need to be careful about where you're spending the money, but you also need to be experimenting with that as well. And, again if you're running a small business spending five, $10,000 on on a marketing strategy and you've got $150,000 worth of revenue, that's a, that's a. That's a big punt on the business. You know, even a $5 million turnover business spending a hundred thousand dollars on their marketing strategy, that's not a lot of money in relative terms, but if you get it right and you waste it, it is a lot of money. So my advice around here is around that experiential awareness. Hasan slowly find people who. Experts in delivering a marketing strategy for your business. And so they've, proven either that they've worked in an agency for businesses like you and they are starting out and they're able to deliver that. They might not have the capacity to be able to do what you need to do but they have the technical skills to be able to do. Well, they've been in your industry and they've been successful, and they can prove that they have that success and then pay a premium for that. Pay what they're worth. One of the questions that I would ask is, What's not going to work. So if they're a if they're coming to you and say, Well, the strategy is a Facebook strategy. Okay, well, why Facebook? Why not YouTube? Why not, um, search engine optimization? Why not LinkedIn? Have them justify the reason behind it and discerningly, right? So they need to be able to justify why they're putting their case forward. And asking the question was, Well, why wouldn't it work in the other areas? And the other thing is, what are the risks involved in going down a particular strategy? Because if you do it right, the marketing, uh, and the information that you get from marketing can actually be the canary in the mind that will help you with capacity planning, um, and financial planning around sales and product. So it's really important that you actually get that right. A couple of resources I've been reading and listening to of late one is Ask by Ryan Lavesque. It's very much around that survey mentality. So go to the marketplace and ask the market what they think without trying to sell them anything or without selling them anything. Not even trying to sell 'em anything. So you're just collecting information. The right it by Alberta Savio. He wrote this book, He's a ex Google engineer, developed a business, sold for$25 million, spent another $3 million developing another business that failed or in fact, I think he spent his whole$25 million on a failed business, and he, came up with the concept of a Preta type. So you build something and you, it's a proof of concept before you actually go and build a prototype or build a solution for your business. So it's a great read. In fact, if you get onto YouTube he's, just dropped a whole bunch of stuff on YouTube. Blind Sight, uh, which is a book written by Matt Johnson and Prince Ghuma. And they, and this book is around neuroscience and how the brain functions and the decision making that we have around marketing and how that has been used by marketers to influence us. So it's a real, it's a as the title says, we've been blindsided by the, by the marketers. It also gives, it gives you a defensive mechanism so you actually know why you're being sold or why you're making decisions. And if you really understand the concept of you know how we communicate with each other, you can actually improve the way that you develop your marketing strategies, or at least have a conversation with your, the people who are developing a marketing strategy. And the final one is building a brand story by Donald Miller. It's something that I've only just started to look at. We're actually looking at redesigning our website off the back of his theory. And it basically talks about the client is the hero in the story, not you. And that sort of fits in nicely with our model, which is we want our clients to be at the center of everything that we do, and we are just simply there as their guide. So again, a really. Great read. He's got the online program that you can join as well. I'll put all of this information in the show notes. And there's no affiliate links with these. So go ahead, click, go ahead and click your hardest away at them. So let's dive into now sales. I'm not talking about the sales it's conversation that you're having. I'm talking about the activities that you have when you get to that sale. If you're looking for resources around how to sell. I think in episode four with Mike Irving and more recently with Adam Bude around authentic sales, and there's plenty of resources that will help you because I think the way that you sell depend very much on the product that you have and the market that you're in, the sales cycle that you have. I'm talking here about the activity that you have and the numbers that are around that, and what, how you might be able to use those numbers in your financial modeling. So, ma McDonald's been, uh, Unbelievable amount of money on marketing. So that when you walk into their store, you're not deciding whether to have fish and chips or a hamburger. You've made the decision. It's then up to them to look at. Satisfying that. And then what they do is would you like fries with that? So they're always looking to upsell you, but they've spent the marketing, you've walked into their shop to buy a hamburger. I'll use a slightly different analogy, but it's just demonstrates the same point. For those of you who live in Australia, you'll recognize the brand Godfrey. They're are They sell, uh, vacuum cleaners and I, 12, 18 months ago needed to buy a vacuum cleaner. And so I went into the shopping mall where I thought they were or they were there, and I found out that they had left and they moved to opposite in a strip mall. So I went over there. Walked in, guy showed me a couple of options. I bought one. And as I'm paying, I've said, Oh I went over into the complex and you weren't there. Why are you here? And he made a really interesting comment and he said, Well, when we were in the shopping mall, we'd have a lot of people wandering in windows shopping into the store and they were typically men whose wives were out buying clothes. These guys were just in here cuz they couldn't go to the hardware store. So they wanted in here and what it was doing was it was screwing up the numbers in terms of conversion. So one of the things that they measure is the traffic in and traffic out. So how many people walk in and how many people walk out with a product? And so what this was doing is it was screwing up their numbers and they weren't sure whether who, the, how were they attracting people to the godfreys out there? When they moved to, across to the to the strip mall and what they found was that the people who worked in are actually there to buy a vacuum can cleaner bit like McDonald's. You you walk in to buy a hamburger. And so the metrics that you have then are much easier to work through. So the numbers and how that impacts upon the the capacity that you have, how many reps do you need to have in the store to be able to satisfy that demand and what you're looking for in the sales activity is consistency. So again, this sort of feeds back to. Marketing can you have a consistency of information flowing through from marketing into your sales funnel. And then having, because you've got that consistency there, the variables you can measure and the impact that those vari variables have so price if you put your price up, it'll have some impact. If a competition comes in, maybe the ability of the sales people or their skill level. And, again the, the number of sales calls that they're making. Is there a correlation between the number of sales calls that people are making and an increase in volume? Because sometimes what you might find is even though there's an increase in sales activity, because they're trying to get through the numbers, they're not spending quality time with the client. So again, that's a whole that's a whole nother subject that we could spend a lot of time running down that rabbit hole. The, the reason I mention is that, that that's actually some of the work that I do with my clients is we actually look at the sales act sales activity and how that is impacted upon their, revenue. I, wanted to give you a. A real quick personal example of my sales activity, and it was when I was in my late twenties. I got a job with Citibank and my claim to fame is I was the first mission salesperson for Citibank in the world. Everybody else was on salary and they had just launched a new product called mortgage power. And they were trialing this new sales model, and I was the very first person on. Now, within a couple of months, there was probably five or six of us who were in this, trial. But what the product was, it was a specific product that was targeted at doctors, accountants, and lawyers. It was a line of credit that they could use in their business and it was secured by a principle place of residence, and they had to be able to demonstrate that they could service the debt up to half a million dollars. So Citibank didn't have branches. It was at the time when Paul Keating opened up the banking community in Australia or deregulated it. And so we hadn't, we didn't have branches and so people would come into the branch and meet with a sales rep in an office and they were selling between four and five a month. And that was my target. The company gave me a retainer for the first three months so that I wouldn't starve. And when I went through that I, started to look at the problem that we were solving. And so the problem wasn't that we were providing finance, the problem was that the business owner didn't have time to go see, the bank manager didn't have time to come into Market Street in the city to talk to a bank jockey. Who then went and collected all of this information and then there was all this toing and froing. Now today you go that's a mobile mortgage broker. Yes. But in the at then it didn't exist. And so what we did and, I I'd like to total credit for this, but I can't. But what we did is we said, the problem that we're solving is that is time. And so what we did was we went, we would ring up the Citibank client who had a deposit and we would ring them up and say, hello mr. Accountant. My name's Steven Sandal from Citibank. We've got a new product. It's a line of credit of $500,000 that you can use in your business. The only security that we are looking is a principle place of residence, and you have to be able to demonstrate that you can support the repayments. Are you interested and the closure rate on that call from the majority and, on coming to see you, the closure rate on that was unbelievably high in fact, I think it was close to a hundred. The conversion rate of them actually buying from us was around about 30%, which was about the same number of, uh, the, the conversion rate of the guys who had people walking in. But in the first month, I sold seven. In the second month, I sold 12, and then it sort of settled in and around about 15 a month. There was times, months where we had more times when we had less, but for the next 12 months, that was the number. And the managing director called us in one day, all of us, and said, You know what? Why are you guys so successful? And we said, Well, our target is three calls a day, four days a week. We come in on Friday morning and we do all of our paperwork that we need to, you know, anything that we need to tie up, we have half the half day off, we go and play golf or just have a long weekend. Um, because over the month we would make somewhere between 40 and 50 calls on, clients, and our conversion was around about 30%. And so there's, that's the number. It was no more difficult. So if you're struggling with sales have a look at the number of calls that you're making and that will be part of the problem. It's not as, not just that obviously the market that you're in making sure that you've got the right product and you're talking to the right client. And we're circling back to the marketing. But in terms of the activity, you wanna make sure that you are able to measure your activity. A lot of people spend time in networking, and I do as well. One of the, one of the things that I see people is they ignore the cost of that, not the actual cost of the subscription or the cost of the breakfast, et cetera, but the time, cost and valuing your time in that. Now I've spent 12 months networking or spending part of my time in networking and if I was to put a dollar value to that, I would say that it's a roughly $40,000 of my time that I've invested in networking. Now, that's a choice that I'm making. But because I'm measuring it, I can actually look back and have a look at the referrals and recommendations and advocacy that I'm getting from the people that I've built relationships with through networking. And then I can tie it back to a deal that I've converted and then I can measure the return on investment and whether it's worthwhile continuing down a particular path with, in a particular network, The other area that I see a lot of people. Spending their time in is community and volunteering, and I think it's a mistake if you are looking for a return on investment in that activity. I, I think it's, that's the sort of thing where you don't expect anything in return. If you get something as a result of that, it's great. It's a bit like. You're donating money, you're not really expecting anything in return except maybe the tax deduction or feeling good about what it is that you're doing. So I think if you take that approach, To volunteering and community work and I would suggest that the majority of people who, do things in community or volunteering in sporting groups, et cetera, it's because they have a passion for that that maybe one of their kids are playing or maybe they play that particular sport and having their name on the fence just makes sense because you're there and it's awareness. but again, if you're looking for some as something in return for that I, just think it's. It's not auth, it's not authentic. Now the expenses. So I'm not gonna spend a lot of time on this because I, think this is definitely something that you need to have a conversation with your financial The people who help you with financial management, um, accountant or if you've got a CFO inside your business they will be all over this. It's really just understanding that there are ratios so, you know, maybe gross profit in your industry will be our particular number and the benchmark that you have for that. The salaries that you your staff will be of a benchmark of an industry standard. So you just need to be really aware of that and have the conversation around whether those ratios are high or low dependent upon the type of business that you are, the size of business and the industry that you're in. One of the things that I wanted to address was the attitude towards spending money. And honestly, I do struggle in this particular area. And because I of my conservative nature, I'm, I tend to be very frugal with the, where I spend my money most of the time. But I think it's an attitudinal thing of, , the most successful business owners that I've seen is that they know that you, to make money, you have to spend it, but making sure that you're spending it in the right area there's another saying it's called Watch your pennies and the pounds will look after your yourselves. Now, for those of you who don't know what a penny or a pound is, watch your sense and the dollars will look after themselves. And the principle is that if you pay attention to the small things in, around your finances that they accumulate and you grow wealth as a result of that we're not talking about compound interest here, but just, you know, paying attention to, uh, the detail in your finances and not spending money willynilly. And when you have that attitude, you're actually spending money intentionally in the right area. I know we're going a little bit off track here with the financial modeling. Uh, but I, as I said at the beginning, I'm trying to wrap a few things around this, and this is again, sort of a follow on from my previous thoughts around the product and value and just understanding value is the point that I wanna make here. Would you pay $300 for a pair of shoes today? I, you know, for $300, you're not gonna get too much. I think a pair of AR Williams is around about six, $700. In 1987, I bought what was then what all of the winkers Oh, sorry. The bankers were wearing which were church brogues. Now I'm a I'm, I'm Deriding the people at the time I was in it I had the money and these churches, they were $300. This is 1987, so you know, you'd be talking well over a thousand dollars now for those shoes. Now, was it a lot of money? Yes, it was. And fortunately I was in a situation where I could actually afford them. But when you look at the, value of those. Those shoes, they lasted me over 10 years, so $30 a year. And the only thing I had to do was I needed to put a soul on it because I had leather, slippery, slippery leather souls. And so I made sure that I got rubber souls on it. Now, here's the thing, A around the investment of, in this particular product, So after I, I took the shoes to boot maker, he put the rubber souls on wonderful. 12 months later, my right shoe, the soul fell off and I'm going, Holy hell, what's going on? So I took it back to the retailer and I said, Look, something's wrong with it. And they were, they. Destroy it. They, you know, they were so, they were flabbergast, they'd never seen it before. They took them, apologized profusely, sent them away to their boot maker to get 'em repaired. The boot baker came back and said what's happened is that when my boot maker had ground the soul to make it rough enough put the rubber soul on. What he'd done is he'd ground away the stitching and that over a 12 month period, it had released. He tried to repair it, but he couldn't repair it. And so I said, Well, that's okay. I'll get mine, my guide to repair it. And they said, No, no, no. We can't have that. We can't have our product in the marketplace at a a lesser quality. So here's a new pair of shoes. Oh, Here's a new pair of shoes. Didn't cost me anything. They replaced it. Now you can imagine I spoke about that retailer and those shoes for years afterwards, and I can't imagine how much how many shoes they sold off the back of that. But my point is The understanding the value of the investment that you are making, impressing upon that to your clients, that you know the quality of your product. This is what it guarantees. This is what it means to them when they engage with you, When you are looking at buying product looking at the value, what are you going to get from it? Now I get that. If I was in the job that I had before I joined Citibank, there's no way that I could have afford afforded a $300 pair of shoes. So I understand that doesn't apply in every instance, but my point is just making sure that when you are investing your money, that you are doing it wisely with the potential of benefiting long term from that investment. And that's really what we're trying to achieve here. That leads me into how do you manage your finances? It's through budgeting and I understand that small businesses why do I need a budget? It's because it's of control. You wanna make sure that you maintain control of your spending. You want to. Maintain control of your activities. So it's not just budget around money, it's a budget around marketing activity. Where are you going to spend that money? It's around your activity in sales. So what's the actual physical activity? Not, necessarily what you're spending because you need budgets around that and all of those feed into your financial. And then obviously on the expenses side, understanding your ratios and how they fit into the daily operations. When I was at, in corporate, we used to do this on a regular basis. We would have a obviously an annual, but we'd have quarterly reviews of our performance. And if we were overperforming, we had to do a reig of the numbers as, as well as if we were underperforming cuz we needed to re-forecast what what our numbers were. Because if you're overachieving, it's gonna have some issues on cash flow and capacity, ability to deliver. You're going to be looking for more people. If you're underperforming, you're going to look for efficiencies if you haven't already done that, and what what impact is that going to have on your financial situation? So you actually need to do that on a reasonably regular basis. And again what we. Tend to recommend for the clients who are doing north of a million dollar turnover is get a board of advice together. Maybe meeting on a quarterly or a half yearly basis, just people who you trust maybe industry peers, maybe clients or suppliers, and get around the table and get some support around not just your financial modeling, but also around the whole business and, the objectives that you're trying to achieve, because at some point in time I'm not going to be there. Obviously, what I would normally do is I would be on that board of advice, but sometimes my skill levels don't warrant me being there. And I think that's what you need to be able to have some control over that. And that's my objective is to make sure that my clients actually get to that point where they don't really need me anymore. So in summary and thank you if you've got this far or really do appreciate it I know it would it, it, didn't fit into the typical financial modeling mold. But I was trying to wrap the business around finance rather than just talking about finance. On its own, which I'm not qualified to do anyway. So understanding the impact of your financial statements is really important. Get some help around that. Being able to be in a situation where you can measure your marketing, return on investments and your sales efforts, that's obviously and I've stressed that so many times through this, the last 50 minutes. And create a budget that will help you navigate, particularly over the next couple of years coming. So get some support around that look at where the mines are coming ahead what potential risks are there for you in your business? What are the opportunities that you might be able to take advantage of but without a plan in place and a budget to manage that you really are flying blind. So I hope that was useful for you. It's what I do in the scale to success solution. It's a simple application of systems and processes to improve the efficiency and effectiveness of your business and it also delivers a program of people development and leadership training. So you have the skills and knowledge to do the things that you are meant to be doing in your business and your employees are meant to be doing as you've delegated to them. My goal is for you to become that lazy entrepreneur where you can not sit around and do nothing but to do the things that you love to do because you are really good at it and you enjoy doing it, and it enables you the time to spend the time with the people who you love. And as always, I really do appreciate you for listening to the Inspiring Business Podcast, and I hope that the information that I've shared with you today is useful and it adds value to your business and that you are inspired and energized to make a difference in your and others' lives.