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www .businessabundance .online Hello and welcome
back to the Business Abundance podcast. I am
Zahara and I'm back with Rowan and Ian. Hi. Today
we are going to be chatting about the five common
issues. If you're a business owner or you feel
like you've lost a bit of your spark when it
comes to running your business, we're just going
to run through five issues that you can check
yourself or within your business just to make
sure that you're back on or get yourself back
on track. So we're going to be starting off the
first one being cash flow. Now cash flow in its
definition is the movement of money in, money
out. If you're in a negative cash flow, you've
got higher spending. If you're positive, then
you've got more money coming in than you're spending.
So it's as simple as that, but sometimes we've
found people don't pay too much attention and
end up in a bit of a situation where they can't
quite pay their obligations. It's probably the
number one problem when people say, gee, I've
got problems. It comes back to cashflow because
everything else is fine as long as people have
money. But when there's no money, got to do something.
When do they often realise that? When the money
runs out. Is it like when they're trying to pay
their employees or when it gets tax time? Tax
time is a... not probably not as bad as doing
the employees because the tax office, if you
sort of don't pay them, it's probably a month
or two before they realize. And then you've got
some options from there, but definitely week
to week. The worst cases would be when people
go, gee, I can't pay wages this week, but everyone's
already worked for a week. And what do I do?
That's probably worst case scenario. Yeah. So
if you're planning to avoid that, do you want
to set out your obligations? For example, like
super payments, tax payments, payroll. Yeah.
So let's go back, I guess, cashflow 101. Sounds
like a budget. Yep. So like anything in life,
if you have a plan, you're probably a little
bit more likely to succeed. So just having an
understanding of where your money comes from,
what your sales are going to be, what they need
to be, and then what your expenses are, your
wages. Rent and all that sort of stuff going
out And then like you mentioned obligations is
probably the one most people get caught up on
There's GST Where we are and that's a tax by
the government that you collect on behalf of
the government and then you pass on. So it's
not your money, it never was. But it goes into
our bank accounts and it looks like money we
can spend and then every few months we've meant
to pass it on. So it's easy to get caught out
there depending how many sales you have. Should
you make a little bank account to put that all
into if you're a business owner? Definitely.
It's much easier that way because if you've got
enough money to do that, you know what... your
spending money is and you know what your tax
money is and you don't worry about the big bills
that suddenly come through. But yeah, with the
GST there's the tax on employees' wages. So you've
got to put that aside too because you're not
paying it straight to them, you're paying it
to the government on their behalf. So it's not
a tax on you or your business, but it looks like
your money. So again, that tends to be a big
one that catches people out in superannuation.
Income tax often comes a year or two after you
actually make the money and then sometimes you
prepay that. repaid as well. So yeah, just knowing
what that is, having a budget, having the separate
bank accounts and putting money aside so you
didn't get caught out is a huge factor to avoid
the trap. Yeah, and then as you move on, you
want to put your actual spend next to it, like
as you move throughout the year? Yep. So that
you can understand and re -budget for next year?
Correct, yeah, and change anything too. Like
if you, rather than running out of money and
realising things are wrong, you can see month
to month, oh, that's probably a bit high, that's
probably a bit high, that's probably a bit high.
I'll change it and then I won't run out rather
than running out and going back and looking and
going, oh geez, I should have done that 12 months
ago. Yeah, it's not too hard to make a budget
either, is it? You can just download templates
from the website. Yeah, definitely. We've got
templates on our website, but even ANZ, like
you just roll in there, they've got heaps of
tools and most banks just have basic things you
can plug your numbers in. And then there's varying
levels of complexity of what you can do from
there. Yep. That's pretty good. And I want to
have a bit of a chat about payment terms for
those businesses that you can move your cash
flow about so that it works in your benefit.
Do you want to talk about that, Rowan? Yeah.
So I think the biggest misunderstanding with
cash flow is that people judge their success
off their bank balance. So we're making money,
there's money in the account. We're losing money,
there's not money in the account. So it's very
possible to be losing money and having more money
in your bank account. And it's very possible
to be making money and have less money in your
bank account. So number one. problem of cash
flow is not making enough profit. So if you're
making enough profit, that's good. But then if
you've got payment terms and you don't understand
money to money out time, then you could still
have troubles. But most people are just not making
enough money. So give an example, maybe like
a builder, they get a new client, they charge
a deposit and the customer pays the deposit pretty
quick. So how much is the deposit going to be
on a house? 20%. 20%. Cool. Okay. Let's roll
with that as an example. So let's say we've got
someone building a $500 ,000 house. It's going
to be $100 ,000. The builder gets paid that straight
away. They've got $100 ,000 in their bank balance.
They haven't done anything. So really they haven't
made profit from that, but now they've got $100
,000 and they have got $100 ,000 in sales. So
then they probably start working. They have a
little bit of wages, but probably nothing too
serious. They pay for the concrete. They pay
for the excavator. get the base stage done so
there's a slab and then they send out an invoice
for the base stage and that's probably another
hundred thousand dollars so then they get paid
straight away they've got two hundred thousand
dollars they've paid about a bit of wage they've
got bills for their concrete they've got bills
for their excavator but they haven't paid those
yet so they don't pay those for another 30 days
if they're on time and then if they're late then
it's probably 60 or 90 days they pay before any
suppliers going, I'm not going to work for you
anymore. And then they could probably just choose
a different supply anyway, because they want
to deal with them, right? So let's say the following
month, they do the frame. So they get all the
materials goes on the account, finish the frame
to have the wage costs, probably should be paying
for the concrete now maybe, if they're on time.
but they can build out the frame stage, get paid
straight away. So they've got $300 ,000 and maybe
they're paying out 50 grand now and the better
wages, so 75. So now they've got $225 ,000 of
other people's money. They've got a fair bit
of work to do, still lots of bills to pay, lots
of money in the bank account though. So it looks
pretty good, doesn't it? So you're saying they've
paid $225 ,000 before they've actually received
any money from the customers. No, no, other way
around. So yeah, they're billing their customers
and they're paying them straight away. So they've
got $220 ,000. They've got $300 ,000, but then
they paid 80 because they paid the bills on time.
And they've got a lot more bills to pay. They've
got them. They know they're coming, but in their
bank, it shows that they've got $225 ,000. So
if you're managing your business by your bank,
you're like, I'm going great. This is awesome.
I can buy this. I can buy that. boom, boom, boom,
boom. But in reality, you've got all these other
bills you're going to pay coming up shortly.
And maybe the margin for that house is only $50
,000. So you're actually expecting to get $50
,000 from it, but you've got 200k in your account.
So highly possible just based on that. You could
be going forwards or backwards, you wouldn't
know that your bank balance is going up. And
then vice versa, you could be the type of business
that goes, yeah, we'll start that job for you.
And then you go and buy, you go buy the equipment,
you go buy the materials, you pay for it cash,
you know. because maybe you're a bit small, maybe
you don't have terms. You spend $20 ,000, you
go out there for a week, do the job, and then
you send them a bill, and maybe your client doesn't
pay you for a month. So that's cash flow negative.
You've spent $20 ,000 to maybe make $25 ,000,
so you've got to wait a month to get your five
grand. So in that case, it's always looking like
you've got no money. You could still be making
a profit. It's just you're getting paid late.
Yeah, I understand. Yeah. And if you have all
that money that's in your bank account, let's
just say that you are getting paid, it's so easy
to spend it on and be like, oh, I'm going to
spend more on marketing this month or I'm going
to buy a new piece of equipment or anything.
And then, yeah, all of a sudden you're broke.
Yeah. So it's really important to understand
what sort of business you've got and you can
change whether you're a cashflow positive or
negative. So you can say, hey, we'd like you
to prepay and we'll give you better terms and
then we'll do this and maybe you'll get longer
accounts of our clients. but yeah if you are
a business and you go gee I'm a cash flow positive
business but I have no money you should be trying
to get some help because that means you're a
long way behind so you're just using a builder
again if you're building 10 houses a year so
that's five million dollars per year your two
months cash flow positive from the example you
had 200 ,000 out of 300 ,000 after a couple of
months so that's how much in 200 out of 300 Yep.
The keepings are 200 ,000. That's one house.
We're doing five houses. Yep. So probably two
a month. So we've probably got $400 ,000 cash
at any time ahead of what we should have. Um,
so if you're one of those builders and you don't
have any money, then you're probably $400 ,000
behind already. You just don't know it. Um, just
talking to a friend today, actually. And he's
like, Oh, I built asked me for the next progress
payment in advance. I'm like, be pretty careful
there and I just explained to him how it works.
He's like, wow, I had no idea. I said, mate,
tell your friend to get some help because I don't
think he knows how far behind he is. And he said,
oh, he's only been in it for one year as well.
And that's even worse because he hasn't even
paid any tax yet. So he'll have a tax pool coming
next year and then that will be double, which
we've talked about before. Then you're chasing
your day or trying to catch up. Yep. Anyway,
so yeah, there's other ways to do things, but
just have a think. You can play within the budget.
If you've got a good budget, and that's where
we talked about before, there's different levels
of budgets. You can actually play with your payment
terms and see, okay, well, how can we turn them
to good and how can we turn them to bad? And
you can see ahead. To make sure that you've got
enough working capital. Yeah, yeah, yeah, working
capital. Very important. It is. They all seem
infinitely trackable as well. to avoid getting
in trouble, you can follow trends, you can forecast
incomings versus outgoings. And when you're talking
about employee costs, it's generally a fixed
cost. Yeah. GST is GST. You don't pay it if you
don't receive it. That's right. So I mean, at
the end of the day, when you receive the money,
you put it aside anyway. So that shouldn't get
you in a lot of trouble if you're managing your
money efficiently. So all those fixed costs,
you can then forecast. And then if you are a
builder, for instance, you're going to know that
there are certain times of the year where you
do slow down a little bit. Over Christmas, you're
probably not going to get a lot of payments,
income is in, everything shuts down. Uh, so be
prepared. Yeah. The old, uh, the old scouts thing.
Yeah. Yeah. I'm just thinking about the, um,
the business owners that kind of do the whole
just invoice via word. Um, and just do it old
school because that's all they've known and they
don't have the tools like any sort of accounting
software to keep them going. And I think this
is probably a decent, not sponsored, but a decent
time to mention that there are good softwares
out there to make that easier. You got MIB QuickBooks,
whatever that's called now, zero, zero. We prefer,
it's nice and easy, but yeah, you got to know
your numbers. Much easier than doing it in an
Excel spreadsheet. Having to update it every
single day, like that I can see being difficult
and someone going, oh, it's too hard. But if
you do actually have the tools, it's really easy
and pays off. They're getting better. They're
getting better every minute of every day. Those
tools are getting easier and easier for someone
who's been sitting with an invoice book, writing
down their invoices and then every three months
they're sitting down with their calculator or
their abacus. It's so much easier. It's not just
little businesses though, there's the people
with 40, 50 plus. employees and their admin people
plugging numbers into an accounting system and
now it's actually looking at the reports see
if it makes any sense or using it for anything
useful. So I think knowing the numbers is a key
point there as far as whatever you're doing just
understand what your numbers are and that's just
helping you identify what your working capital
is. Make sure they're correct as well. If those
numbers going into your bookkeeping reports don't
match up what's actually happening, there's a
world of pain. But so you've just mentioned working
capital before, probably should translate that
for people. So it's not just when we talk cash
flow, we're not talking just about cash that
you've got. But working capital is the term we
like to look at. So working capital is a combination
of money you do have, plus any money you're about
to receive. So you'd like people that owe you
money, for example, less money you've got to
pay out in the short term. So your super, your
taxes, your... credit bills, et cetera, credit
cards. That's a good one actually. How do you
insulate yourself against, say a builder for
instance, and you've won a couple of projects
and you've got a whole heap of people that owe
you a little bit of money and then those, let's
say they're a larger business that's... They've
contracted you to do a few different jobs around
the place and then that larger business goes
out of business How do you insulate yourself?
Yeah, you need more working capital. Yeah. Yeah
And so the way to bump that up is having more
cash available Goes back to number knowing your
numbers. Yeah, but like I said before we're If
your bank balance is going backwards, you can
still be making money. Your working capital could
be going up because you've done the work, you've
made the money, people just haven't paid you
yet. So you could have more working capital available.
but have no money. So often people will come
and it's like, I've got no money, the world's
over. And we can look and we go, actually, we've
got these people on these terms. If we shorten
those terms, you're going to have $200 ,000 more
in your bank account every month. And it fixes
all your problems because you're not actually
going bad. Whereas a lot of the owners would
be looking at it going, oh, doom and gloom. I
need to suck stuff. I need to cut expenses and
all this stuff that might wreck their business
just because their payment terms are wrong. as
one example. So really important to just be able
to use that number to go is my working capital
going down? I've got a profitability issue. Is
it going up? I'm making money. Have I got a cash
flow issue? Where's my money? It seems like a
very simple thing to be able to visualize if
you've got the right tools in place. Very easy
with the right reporting. So pretty much not
much of an excuse and if you don't have it just
Get your accountant to be put in together for
you because it's highly valuable. And it's probably
one of the main reasons business owners stay
up at night and worry that it's like, Oh gee,
I know I owe this money. What do I do? Um, but
once you actually know that number, you can go,
Oh gee, I'm actually all right. Or I just need
to do this, this and this. And the money comes
back in and break it down into simple tasks.
Yep. Correct. So, uh, it's pretty much cashflow
101. It's that easy. Yeah. Oh, actually just.
Simple. To elaborate on how do you insulate yourself
about people going bust, good credit terms, directors
guarantees, you do PPSR, which is putting little
marks against companies to say, hey, they owe
us money and before you sell equipment, which
makes you a secured creditor rather than an unsecured
creditor, it doesn't cost much. But fundamentally,
if you've got a business that has a cashflow
requirement or working capital requirement, because
you're negative cash flow or you're just growing
because you can just grow and then you just have
more sales, more debtors and more money outstanding.
It doesn't matter that you make money. You just
need more money to run your business. You're
not losing it. It just goes in and out. So you
need a big pool. Sometimes you just need to introduce
more cash and it's knowing that you haven't gone
backwards. So you're throwing money in a pit.
it's knowing that you are going forwards, it
is profitable, I can introduce more cash to keep
doing that and I'm getting a return on that money.
Methods of introducing more cash? Investors?
Investors are one, bank loans, there's another
ones, you can put your own money in, we can't
really tell you what to do, get advice or waste,
but the key is if you're making money and you
need more money to make more money. Find the
money. Is it worth it? Yeah, it's costing you
10 % but you're making 30 like... chuck it in.
It's no different to buying a car or a machine
to do something for you. But yeah, if you're
going backwards and throwing money in, you need
to be pretty careful about you're actually changing
or doing something else at the same time. Be
intentional about it. Yep. That sounds pretty
good. So I guess the second one being finding
and retaining customers. Now we can start this
by knowing your product and service. If you're
a Brand new business, it's the other way around
and know your target market before you introduce
your product and service. But if we're an existing
business, know your product and service and then
figure out who your target market is and then
go meet them where they are. You need to know
that your service or product is actually filling
a gap. Um, so you don't want just something that
you assume people will need, even though it does
absolutely nothing for that person. You're not
going to have anyone purchase that. It doesn't
matter. Like products and services go out of
date all the time. They become irrelevant. Um,
so you've got to be able to adapt. Best product
and services are one that people are already
asking you for. Yes. Yeah. And so you need to
be able to adapt. Even though you might love
this product and service, you've got to change
otherwise you and your business will. Definitely
fall in love. That's awesome. But don't fall
in love with your product. Don't get married
to your ideals because ideals are dangerous.
Yeah. And then be able to communicate that with
the people who will appreciate your product and
service most. In order to do that, you need to
build and maintain that relationship and that
comes from communication. In doing that, that
means that if your customers aren't on Instagram,
don't be posting and wasting your time on Instagram.
If they're not on Facebook, same goes. If they
aren't even online, then that means that you
need to go and be on their doorstep. you can't
assume that they're going to be in a place that
they're not often. So an example, if you're targeting
the older demographic, I highly doubt they're
going to be on TikTok, for example. And just
because everyone's on TikTok doesn't mean you
need to do it. Definitely be on Facebook though.
But the younger generations won't be on Facebook.
I think that's really important. A lot of people
have this idea of, I've got this product. I love
it. There must be more people. There's seven,
eight billion people on the planet. So someone's
going to love my product. Yeah. And two of them
might be on TikTok. So I've got to be on TikTok.
Exactly. It doesn't make sense to be where your
customers aren't. And the only way you're going
to work that out is understand who your customer
is. You might not be your ideal customer as a
business owner. And we talk about this a lot
when we talk about... businesses and marketing
is just because you think it's a great idea,
you need X amount of people at this price point
to also think it's a great idea. So crunch the
numbers. Yep. Yep. Learn about them. Bunch it.
Bunch it. Or talk to them. Literally just talk
to the people. Have conversations. There used
to be old school focus groups where you'd get
50 odd people in a room. And I mean, that's a
bit of a shotgun approach. You don't need to
do that anymore because all the demographic information
is at your fingertips. Still could do it though.
Definitely do it. If that's something that you,
depending on your business, I mean, there are
certain businesses that you might not want to
be in the same room with your customers, that
you want to keep an arm's length away. But yeah,
it's a fun exercise as well. I mean, we talked
about your spark at the start of this. these
five things that we're talking about could help
you lose, could be a catalyst in you losing your
spark for your business and forgetting why you
started your business. If you can pick your A
-list customers, sit down with them in a room
and just have a conversation and make sure it
is a conversation, it's not you just talking
and listen and you'll fall in love with your
business again. Yeah. We talk a lot to people
about higher purpose. There was a vision mission
and all that sort of stuff. And I struggle to
tell the difference between the two. So I don't
know how other people do, but just call it higher
mission and run with it. High purpose. It's just
like, you know, what does your business do? Oh,
higher purpose. Yeah. And it's, oh, we do this,
we sell this widget or whatever. for us, it's
we help business owners. So is that accounting?
Is that marketing? Is that IT? I don't know.
It could be any of those, but we're helping.
So in 50 years time, there's probably still going
to be businesses and we can probably still help.
I don't know what that will look like, but everyone
in the organization can still go, we help businesses.
How do we do that? So as long as we're talking
to people and we're keeping up to tabs and not
being afraid to change, like that business can
go on for quite a long time. Whereas when we
have the vision to be the best widget supplier
in Australia, that's our higher purpose or our
vision. Like that's very limited to when the
customer doesn't want it anymore. Yeah. Know
that your business might have an expiry date
in that case. Correct. You can still have that
as a high purpose, but be ready to prepare yourself
for your business to end. Yeah. So when we were
talking about knowing our customers, it's knowing
who our customer is and what we're happy to do
and what we deliver, which goes into the second
point. the knowing the products and services
you have and how they relate back to your customers.
I've been able to articulate that clearly, and
everyone in your business knowing that too. But
there's no point being able to, you know, selling
Ferraris and then going to a whole bunch of people
that should be buying a Kia saying, check out
how cool our Ferraris are, you know, they're
the fastest things and blah, blah, blah, like
they don't care. Yeah. That's a great point actually
on knowing your target market is Ferrari don't
advertise on television. Yeah. People who buy
Ferraris ain't wasting time watching television.
Yeah. I don't watch television. So you're a perfect
Ferrari customer right there. Well, Rolls Royce
is a really interesting example because I don't
think anyone would have seen a Rolls Royce ad
listening. Probably some people may have, it
wouldn't have been an ad, but they advertise
by taking their cars to like bowling shows. So
they're looking, they're going to a show about
aircraft because people that can afford aircraft.
would like a Rolls Royce. And a Rolls Royce engine
was in a Spitfire. There you go. So, you know,
they know what their market is and where they're
going to be. And that's one of our pointers.
Okay, once you know your market, once you know
your product, who customers are, then where do
we find them? And we put that message there.
So we talk social media for that's an example,
fly, etc. But it's just using some common sense,
just activity for activity sake doesn't make
a difference. what's going to be the best thing
at an appropriate cost. That purpose conversation
is one of my favourites. And if you've got a
spare 20 minutes up your sleeve, go and go and
look at the Simon Sinek, start with Why Ted Talk.
It's such a good one. Very much just flips the
script a little bit because we all know what
we do. We don't know why we do it. I'm not going
to paraphrase him here, but take the time. Have
a look. He says it better than me. He created
it. Yeah, we'll put a link in our post for the
podcast. But probably my last point there is
that once you've figured out all the bits and
pieces, don't be afraid to get your hands dirty
too. So there's a lot of people in business for
a long time and then suddenly they've just got
no customers. It's like, what do you do? always
don't do anything we put this radio out we do
this and it's all consistent but i've never taken
the time to go out and door knock and oh it's
this new guy getting all the work and it's like
what are they doing that door knocking um activity
yeah you know activity beats you know sitting
there planning um so don't be afraid if it's
the most simple thing you could possibly think
of that's going to be effective then that's what
you do and don't wait till it's perfect yeah
before you put it out there like I've seen it
many, many times. People plan, plan, plan, plan,
plan. Oh, it's not quite right yet. We better
not release it. Well, meanwhile, my old mate
over there has decided to release it and he's
a bit clumsy and he's not very good at it, but
jeez, he's loud. He's now selling it all. Yeah,
that's a good point actually, because with the
whole communicating with customers, there's the
building of trust. That's the whole reason you're
communicating with your customers. And I think
even that clumsy Communication shows that it's
more personal approach like people like dealing
with people. And it can be authentic. Yeah. And
so it's almost more charming. if you stumble
your way through it. Yep. We all know people
have weaknesses and stuff, so it's like if you
think your favourite cafe, sometimes they muck
up your coffee, sometimes they muck up your food,
you still go back. Yeah, you're still a bit fond
like, oh okay, see you tomorrow. It's just been
accountable and taking ownership. People still
eat McDonald's and nine times out of ten that
food is wrong, first and foremost, they forget
something and we all know it's garbage. Unless
you ask for a double cheeseburger because they're
going to make it. Anyway, I think the number
one source of business for every business, whether
it's new or old, is word of mouth. So once you've
got those sort of points that we just mentioned
rolling, that trust and rapport, look after your
clients, talk to your clients and do whatever
it takes to encourage that word of mouth. Stay
in contact. Yeah. And people are like, oh, a
word of mouth is my number one source of work.
Like, oh, what's your referral system? Oh, we
get referrals all the time. What's your system
for it? We don't have one. Yeah. Okay. So you
think if you have one, do you get more referrals?
And it's cheaper. Yeah. So don't be afraid. Hey,
do you know someone else could be a different
from that as a, as a minimum? Um, because you're
helping these people. So it's not even a salesy
thing. It's a good way to get feedback as well,
because if, if. they're not willing to refer
you, you might be missing something, you might
have stuffed up the process somewhere. If they're
not raving fans, big advocates for your business,
what do you need to improve? Why aren't people
referring you? So that's probably the biggest
things about getting over -complicating, but
I think there are things that anyone can do.
Regardless of whether you're new in business
or you've been there for 30 years and you've
got 50 employees or none. You don't need to be
fancy or highly trained in sales. You've just
got to talk to who you want to sell to. Stop
making excuses. Yep. At the end of the day, in
today's day and age, if you have an internet
connection, you can find where your clients are.
There's not too many unique products out there.
Like there's no groundbreaking innovations every
single day. But yeah, but they're coming. But
yeah, it's a once businesses is an industry.
Yeah, it's a once in a generation thing where
you have a paradigm shifting product that will
come out into a marketplace. So be aware that
there's probably someone out there who is doing
exactly what you're doing. Even tap into that
and reverse engineer what they've done. If it's
a foreign market that's released a product that's
very similar to yours, have a look at what they've
done and how they've done it. There's a fair
chance if they're 10 years into their journey,
they've made enough money to spend a lot of money
on their marketing and advertising. stand on
the shoulders of greatness and learn what they
did and then adapt that to your market. That
part with just excuses, I think is important.
Just, oh, we tried that 10 years ago, it didn't
work. We tried that a year ago, it didn't work.
Just be... be honest with yourself. Like, yeah,
it didn't work, but it still makes sense. So
let's adapt it. Did you try it? Or did you try
it? Yeah. And I think anyone that's done any
marketing stuff with me before, like the first
one of the first questions I asked is like, Oh,
what have you done before that worked? And it's
usually like, still on the list of what we do
for them, because they just stopped doing it
when they got clients. So don't be afraid to
say, oh, when we were getting clients, what did
we do well? It's probably the same stuff. So
yeah, don't make excuses like it didn't work.
Just adapt and think and be honest. Oh, there'd
be a link to a change podcast there, I reckon.
There sure is. We can chuck that in there. Shameless.
Speaking of being honest, the third one being
time management. So being honest about yourself,
about your priorities. That's a great segue.
Isn't it? Sound effect for that. Everyone listening
is like, yeah, I need better time management.
Oh dang. Don't we all? Was there a priorities
word you use there? Yeah, prioritise and set
boundaries. So there's 24 hours in the day and
you can use those 24 hours for work or you could
set it up so that you've got time for family,
it really depends on what you prioritize. Gym,
exercise, health, fitness, whatever it is. There's
one that used to drive me nuts when I was younger
and now I've found myself using it, is you've
got 168 hours in your week. I think that's right.
And Bill Gates also has 168 hours in his week.
He's a multi -billionaire and he's only got the
same amount of time as you, so... Why don't you
get out there and grasp it? That's contentious.
Absolutely. But it's also true. It's a case of
what are you doing to help your business succeed?
Are you answering the phone 20 times a day to
sales reps because they have your personal number?
That's not helping you. And are you managing
stuff that you don't need to be managing? in
your business, is that sucking a whole heap of
time out of you when you have a general manager
in place or you have a sales manager or you have
a marketing manager. But they're not doing their
job. Let them. Yeah, they're not doing their
job because you took half their job from them.
Yeah. Let them do it. I mean, I'm sure we're
talking about staffing after, but if you're not
going to let them do your job, why have you got
them? Yeah. I guess it comes, we'll start with
the business manager first, so the person owning
the business. When it comes to looking at your
prioritization, are you doing the things that
are going to grow the business? Are you doing
things that someone else, you've employed someone
else to do that? Are you doing things that don't
actually matter? You've just got to set yourself
your priorities and we've got the fill the jar
imagery. Oh yeah, we love this one. You have
a jar and you fill it with these... Is it apricot
jam? Apricot, apricot jam. Apricot jam in ages.
Okay, well you fill it with... Not jam. Can we
have a competition on who considers the best
apricot? No. You've got... three big apricots
that you can fit into this jar and those are
the three most important tasks. So that might
be family, that might be... I feel like you're
going to say something. He's got that look in
his eyes, doesn't he? He's like, I've got to
derail this. No, no, no. I'm just like, I've
never heard this with apricots in the jar before,
but I like it. You started the apricots. Yeah,
so you've squished three apricots in there and
that's family. That's the systems and processes
that you're going to complete for your business.
And it's also your health and fitness. For example,
those are the three priorities of your life.
You fit them in there. Then you can fit the small
little rocks around that to fill in the gaps
but also not a priority. So you don't do them
first, you do them second, third, whenever you've
completed the first three apricots are in there
and then around it is the less important things
and that's the sand that goes in through the
rocks. So there's time for everything but it
just depends on what you do first and how you
set your priorities. So if you poured the sand
in first you probably wouldn't have room for
the apricots. You wouldn't. That's correct. This
analogy just keeps getting better. So wise. Wise
beyond your years. I think a key point in there
as well is to like at all stages that jar is
full. Like now you know we can jam all stuff
in there, but so you say we put three avocados
in there, no room for more and everyone's like,
oh, it's full. Yeah. Yeah. So spot on what Ian
said. Put sand in first. Don't even remember
anything else. That wasn't important either.
Yeah. Where's the coffee go though? Anyway, so
just set yourself your priorities. You've got
to do a bit of self -reflection in that. No one
can tell you what your priorities are. That's
the hardest sort of reflection though. It is
humbling. Critically thinking about your own
processes and the way that you do things. We
all know what we need to be doing. Yeah. And
I think it's a main role of consulting is just
asking people and say, what do you actually need
to be doing? And most people know it's just they're
not doing it for whatever reason. Yeah, they
feel that grind that they're like, oh, something's
not right. And it's like, well, you know why.
Yeah. So we talked about getting out of the way.
the managers and things or letting employees
do what they do. So we choose what's going to
make our life better in the future and we do
those first each day or we schedule time to do
that and then we do bits and pieces around it.
So just being intentional with our day. But then
I guess when you've got more resources, you've
got more people working for you, then often we
end up or people end up doing jobs for other
people or they can't do it, they keep mucking
it up. The role is how can we fix that? So systems
and procedures, how can we make that better?
I'm a big fan of policies. Policies, yeah. Because
I've worked in a lot of big businesses over the
past where the managers get asked dumb questions
by employees that are in the policy. And instead
of just going, it's in the policy, the manager
then goes, okay, let me show you. Well, there's
five minutes of the manager's day at X amount
of dollars per hour. How many times a week are
they doing that before that's now a thousand
dollars a day? Yeah. Whereas the policy is right
there, revert back to the policy. Yeah, yeah,
I think I'm just kind of reflecting on why people
take over their employees roles like a business
owner, why would they take over the role and
whether that be a lack of trust in, you know,
they've screwed up this many times, so I'm going
to do it for them. Well, I think that's still
on you. It could be lack of trust, it could be
lack of money, it could be poor things. Poor
managers create poor employees is the bottom
line. It reflects back on the person running
the show. And so you've got, in order to be able
to trust those employees or let the employees
do the job, you've got to set up the systems
and processes. You can set it how you want it
to run. And the training. Yeah, and the training.
And then get them to follow that. And then that
should run how you want it to run. Part of that
self -reflection as well is like, you might be
great at building a fuzzy widget. A fuzzy widget
that's going to revolutionise the world and you
love your product and you've created this business
around this incredible product and you've found
a market for it and now the business has grown
and now you've got more people in your business
building fuzzy widgets. You've taught them how
to do it perfectly, excellent, great, fantastic.
Now you're a manager of a business. You're really
good at building fuzzy widgets. You have no idea
about management. Skill up. Because if you're
having problems in your workforce, at the end
of the day, that's a management issue. Uh, you
haven't trained them correctly. You haven't given
them enough guidance over the, over the journey.
So could have also employed the wrong person.
You can, and that's a management thing as well.
You have to understand how to employ the right
people for the right positions. Uh, and yeah,
I've had conversations with very successful people
who have. admitted that the catalyst for them
succeeding beyond their wildest dreams was looking
in the mirror and going, oh, actually, I'm not
very good at this. How do I get better? Or how
do I employ someone who is really good at that?
Who can help me? And then get out of the way.
Yep. And that's it. Spot on, get out of the way.
That's probably number one issue you get snowed
under is you keep getting in everyone's way so
they can never do their job or they get sick
of you getting in the way so they just let you
do it. And employ someone who's good at their
job and yeah. We'll let them do it. Yeah. Talked
about policies before, but systems and processes.
I think everyone goes, I've had systems and processes
before, but people don't follow them. And that's
true. But there's, for every example of when
someone hasn't followed a system and procedure,
and that's why you can't do it in your business,
whether it's two people or 50, there's 10 examples
of companies with a thousand people that have
really basic systems and processes, like a little
a little binder with pages printed out, spelling
mistakes, a few screenshots that people follow,
charge hundreds of dollars for a 30 -minute session,
and they've been there a week. And that business
has clients, succeeds, grows, can operate. It's
profitable. We don't even know who the business
is, but it's got an office down now. town and
is it an office in another town and all that
sort of stuff. So it's just making sure that,
okay, we've got them in place. We're letting
people do their job. We're getting out of their
way and your job as the manager is to make sure
that they are correct. And when there are problems,
how can we fix that? And if you can't get by
with systems and procedures, you've got to say
small and you've got a job and just call it that,
not a business. There's an old cliche that is
success leaves clues and systematization of a
business. You look at McDonald's again, all those
great big franchises, those multinational franchises
can train a chimpanzee to be an entry level employee
of their workforce because they have 50 years
of systemizing it. Again, there's a great clip,
a movie with Michael Keaton, the founder of Ray
Kroc, who kind of stole the idea of McDonald's
from the Kroc brothers, the McDonald's brothers.
And it's them going through the workflow of their
kitchen and just drawing it out in a parking
lot with chalk on the ground. Brilliant clip
if you can find the link. And it just shows you
the birthplace of McDonald's. uh, of fast food,
uh, that is now a trillion dollar business. It's
interesting. Yeah. It just blows your mind and
that's success. And I'm not saying you have to
be McDonald's. I mean, your, your definition
of success could be entirely different to Ray
Croc's definition of success. But if you're in
a business, you had a purpose, which we talked
about previously, uh, I'm sure your purpose was
to help. people find your product or service
and the reason you pick that product and service
is because you thought it was going to be valuable
to them. So find, again, I'm repeating myself,
but find the successful people that have done
what you want to do and emulate what they've
done. Yeah, or get an expert either or. Yeah.
A couple of ones to top it all off, the time
management, because there's heaps of things.
We're just trying to give you big stuff that's
easy to do that makes sense. Not to -do lists.
There's heaps of stuff everyone does day to day,
but at the end of the day, it just doesn't matter
if you do it or not. Yeah. Do you need to respond
to those sales inquiries? Not from customers,
but from dealers. Yeah, right. Or can you just
say, book in or send me your stuff? Or I'm fine.
Thank you. See you later. Have a triage. Yeah.
Do I need to be doing this job or can my employee
do it? Yeah. Do we even need to do the service
for customers? Like. There's tons of things if
you just go down, do we even need to do it? If
you were just starting fresh, what would you
do and what wouldn't you do? If you just look
at it like that, there's probably half your day
at least of things that you just don't need to
do. And when you think about it, oh, I need to
do it because of this or because of this, just
ask yourself, what's the worst thing that can
happen? It's not catastrophic, it's just something
small, don't worry about it, just stop doing
it. That's one of the things when I first started
doing websites and... graphic design actually
you look at business owners and why would I pay
you this amount of money to do this this service
and this is any service but how long is it going
to take you to learn how to do a website make
it look pretty do all the background search engine
optimization make it so that your customer now
finds it appealing how long is it going to take
you to do that oh geez I wouldn't know where
to start exactly so it's worth you paying me
X amount of dollars to do that as opposed to
you spending the next 40 hours of your lifetime.
It's an investment. Simple. What do I get? What
do I pay? There's heaps of stuff in business
we do. We're like, oh, so -and -so can do it.
So -and -so can do it. I don't need to do that.
It's a bit much. If you pay that, what do you
get? Is it worth it? Is it not? Absolutely. Pretty
simple. And your time is your most valuable resource.
Yeah. Rolls into the 80 -20 rule. So just applies
for a lot of things. But generally, 20 % of the
things you do make 80 % of the results. And it
doesn't matter whether it's a life or a time
management or a resource thing. Every hierarchy
follows that rule pretty closely. It's spooky.
Yep. So just look at what you're doing today.
What are the big things that have the big impact?
Keep doing those. What are those 80 % of things
that you're doing every day that make 20 % of
the impact? You probably don't need that 20%.
Just look for some more 20 % things that give
you 80 % of the results and you can do half the
work. You get double the results. Pretty straightforward
concept. Look it up, A20 rule. Parado principle.
Yep, have fun. Super easy. Moving on to another
one that people often struggle with is staffing.
And it's the same concepts as what we talked
about with finding and retaining customers. So
you can jump back, skip back to that bit and
go through, but you're knowing who you're. who
your target market is in the sense of you're,
you're knowing who your employees are. Who's
going to like working for you. Yeah. And then
making it a desirable place for them to work.
It's as simple as that. So if your employees
you're finding that your employees aren't enjoying
the office space, then maybe you need to consider
working from home if that works for your business.
But you've got to adapt your business in order
to attract the people that you want. If you're
Employees want more autonomy, then give them
that like you otherwise you're just going to
be stuck finding. Within reason. Yeah. Yeah.
But you're going to be stuck finding the employees
that you don't want. And then you're going to
turn around and be like, Oh, I don't, it's hard
to find good people these days. Let's say you
look for an admin person, right? So who do you
want for an admin role? What are their core skills?
Probably like detail. Can use word. Yep. It's
good IT skills. So type fast. Yep. Reliable.
You know, discipline. Smile on the phone. Trustworthy.
So there's some things here, right? Happy to
do repetitive tasks. Yeah. It's going to be high
up there. So when you're recruiting, you're probably
going to be mentioning some of these things because
then if you're getting a Rowan looking at that
job going, oh gee, I'd love to work for them.
That's a great company. I could do admin. That
would be easy. I'll be going, repetitive tasks.
Repetitive tasks. Yeah. I can't do that. Like
I'm filtering myself out. And then you're going
to get people that are like, someone said this
word the other day and I really like it. It's
old, but they just froth over it. And, um, you
don't really like, Oh, I just love doing the
same thing again and again and again. I haven't
heard in a little while. It's frothing. I was
so stoked when I heard it. I was like, wow, blast
from the past. Stoked as well. Yeah. Um, so yeah,
it's like the same thing as finding that customer
is going, okay, well, for this role, this is
the person that's going to suit it. And then
how do you judge when that person comes in? Can
you do a little personality test? Can you give
them a little quiz on those sort of things? And
just make sure that they actually have that personality
for the job. And then if it needs to be a creative
role or a sales role, hey, we need someone that
loves talking to people that wants to get out
and about like self -driven, blah, blah, blah,
blah. When you apply, give us examples of how
you are. for you. If you're a person like that,
who loves getting out and about and just getting
paid for your results and just going nuts, then
we're a great place to work because we do boom,
boom, boom, boom, boom. Sell your business to
them. Yeah. I think, Zee, you mentioned it before,
Joe, it's hard to find good people. I mean, you
as a business owner, probably have said it, but
you definitely know someone who has said it.
And if you expect that, there's a... There's
a Pygmalion effect. It comes from ancient Greece.
But if you expect great things, great things
will happen. This is a dumbing down of the whole
thing. But if you expect failure, you're probably
going to find failure. So if you're in a marketplace
looking for employees and you have that mindset
of, yeah, you're not going to find anyone good.
You're definitely not going to find anyone good.
a healthy dose of optimism sprinkled into that
conversation. It's amazing what will manifest
in your life. Your mindset will attract, your
vibe will attract your tribe kind of deal. It
goes across your culture for your whole business.
Yeah, 100%. Check out a different podcast about
that one. But yeah, further from what you just
said there, like everyone said, oh, I can't find
good people. I've tried before. There's no one
out there. No one applied. Like just don't make
excuses. Just keep trying or try on a different
way. Yep. Change it. Yeah. Um, so like be serious
with yourself. Have I had people leave because
of reasons and whether it's right or wrong that
people don't want to work here anymore. What
can I do to fix that? Um, it could be there is
no one out there for you and probably you don't
have a strong business model. So maybe pivot
and how can you adapt your business to not need
these people or, you know, peel to a wider range.
You may find your location's not ideal for starting
a business. So you might have to. uproot and
go where the people are. Change your business
type. It's a bit of planning. So I think this
is important to be serious. And like no one applied
last week doesn't mean no one's going to apply
this week. So I'll look three months ago and
I'll look three months before there was no one
there. We'll keep trying because someone might
come. If you need someone, you need someone.
So how do we find someone? Also leads into some
scary conversations on that self -reflection
thing again is if I can't find good people. Is
it me? Yeah, is it me as an owner of a business?
Am I a complete jerk? Yeah. Don't roll it out.
Yeah, so it's the adapting, so that's good. And
probably the only other point I'd like to make
would be the best people are a lot better than
the next best. So some people, when they're looking,
it's probably, I guess, it's that self -fulfilling
prophecy. You don't want an admin person, you
don't want to pay $40 ,000 for it, so they roll
$40 ,000. So yeah, you're cutting out a lot of
good people. um and you can put a range you can
say hey it depends what what are you after um
because a lot of the time if you're great at
what you do and you love it you're worth two
three times more but your output's two three
times more so um you know It's not a coincidence
that those award wages fall where they are for
certain skill sets because there's generations
of data there saying that this person is going
to generate this amount of value for your business.
So this is what you should be paying them in
this range. If they're really, really good, they
are going to be worth it. Pay the money to the
top sports people. just earn so much more than
the third or the fourth ranked ones. And again,
that's a Pareto principle as well. So you're
going to have 20 % of people earning 80 % of
the money in sport. It's criminal. In your sales
department, it's probably 20 % of people pumping
out 80%. So just understanding that even though
you think it's all about input -output, make
the investment and maybe you just can't get good
people because you... you're not investing enough
in it. So just thinking about that, but that's
pretty much it. Treat it like marketing, treat
it like clients and look after them and do well
and get out of their way and make it a good environment
and ask them what's good and bad. That's the
Sir Richard Branson thing. Word of mouth. He
reputes that people say customers are the most
important thing in your business. He flips the
script and says that your staff is your most
important thing because they'll look after the
customers. So if you look after your staff, Good
example he has hundreds of businesses and he's
not the one doing all the work He can find good
people so and be aware. He's failed more times
than most people have tried so so Yeah, let your
people succeed. Yep. Yep, and then the last one
is talking about compliance with laws and regulations
yeah, but it's important because Negligence is
not a good enough answer. Should you be pulled
up on it? So In order to fix this, just check
with local governments and agencies. Now, with
experience, you need to be pretty clear about
what you're trying to achieve when you contact
them. Assume they don't know their job when you
ask them. Sounds like there's a story there,
Z. One for another day. Yeah, like from experience,
honestly, you get stuck in a rabbit hole. Yep.
Like, and there are regulations that I was looking
at and I was like, well, do I need it? Like,
I genuinely have no idea. And if you need that
one, you need this one. And you need a certification
here and you need to spend $500 over here and
you need to do this. You need to talk to this
person. And you just, you just get stuck in a
loop. You talk to that person and they're like,
I have no idea, but you're this. And it's like.
Talk to this council and do this one. And it's
like. You need a boat license a hundred percent.
That's what my flowchart says. We drive cars.
We don't have a boat. Definitely my flowchart
says 100 % you need it. So yeah, just understand.
Talk about getting good employees. Yeah. You
just need to understand what you're going in
there to achieve, understand what you're trying
to do and keep a record because yeah, you can't
turn around and be like, ah, it didn't make sense.
I don't understand it. So I didn't do anything.
Yeah. Keep a record and explain next to every
the whole regulation, like license, explain why
you did or didn't do it. I think we need to start
filming these podcasts so people can see the
look on Z's face when she talks about this business.
It got me in an absolute muddle. When she's talking
about local things, we've got local government,
district councils, then you've got your state
governments and federal governments. And they'll
all throw as much as they can at you because
that's what they're told to do and they've got
to cover their bum and just make sure you use
logic when you go through it. So what's a bit
of common sense, they'll say you need everything
because that covers their bum. Um, but yeah,
worst case scenario, just get a, get an advisor
as you do professionals for it. But when I filled
in the questionnaire, there was 56 laws, regulations,
all those sorts of things that I needed to look
through. And yeah, I ended up just, yeah, you
have to go through every single one and see if
it applies to you. And I think maybe four did.
So, but again, I have an Excel spreadsheet that
talks about why you do or don't, or I feel do
or don't need that. Um, But yeah, you can't just
be like, Oh, this is too hard. I can't be bothered
anymore. That doesn't help anyone. Yeah. And
if you do do something wrong and you've, you
can show, Hey, look, we, we did this with this,
we did a research, we saw this and we've checked
every year to make sure that we're compliant.
You're probably going to get, can't say for certain,
but you're probably going to get treated a bit
better than if you said, I've never looked, didn't
care. And that's, is what it is. It's a risk
assessment, isn't it? It's a case of. If I don't
do this, what's the worst thing that could happen?
If I do do this, what's the outcome? So if I
don't do this, they could not only just shut
me down, but they could also hold me for neglect
of a whole heap of financial obligations. There's
no point complaining about all the rules and
regulations. The fact is they are. It's not going
to change. Same for everyone. So if you want
to change it, go into politics, but don't go
into business. But you know, like if there's
too many rules and regulations you just can't
care about, it's not worth it. Change your business.
Won't go into it too much. Just ask, keep records,
do your best. Go into politics first, then go
into business. No. Anyway. Out on that note.
So we're just going to summarise the five common
issues that we've just run through being cash
flow. That's the money in, money out, understand
your obligations, set a budget and revise your
payment terms. When it comes to finding and retaining
customers, know your product and service and
then communicate that with your customer. Figure
out who they are and where they are and go meet
them. When it comes to time management, prioritize
and set boundaries. Do some self -reflection.
Apricots. Apricots. Don't forget the apricots.
Fill the jar in the right order. Yeah. Apricots
first and then sand. And then staffing. Same
as finding and retaining customers. You need
to make it a desirable place to work and be able
to communicate that to the people that you want
in your business. And then finally compliance
negligence isn't enough. Go out and seek advice.
Every time you mention it, you just tense up
in the eyes. It's such a muddle. But on that
note, we're going to leave it here. Thanks for
listening. Link all the additional podcast episodes
that we've chatted about throughout this and
we will see you next time. Bye.