WEBVTT

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Welcome to the Business Abundance Podcast, providing

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the tools and knowledge to help small business

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owners succeed. For additional resources, visit

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www .businessabundance .online. Welcome back

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to the Business Abundance Podcast. During today's

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discussion, we will discuss cost -cutting in

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business and whether it is the best solution

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to address profitability. That was the happiest

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version of cost -cutting. Usually people are

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like, oh, I've got to cut costs. It's like, ah.

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Let's cut some costs today. You can change anything

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with a smile. We're cutting costs today. You're

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fired. Oh dear. You'd always feel good, wouldn't

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you? I've just been fired, but I don't know why

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I'm smiling. This is the worst day of my life.

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Cutting costs is fun. Exactly. Rowan, you're

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going to discuss the value of today's episode.

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Oh, the value. OK, so today we're going to learn

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about cutting costs. A lot of people love to

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cut costs. Cut corners, cut costs. We're losing

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money, we're not making enough money, let's cut

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some costs. But it's probably not the way that

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I think business should be done. And we'll talk

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a little bit about that today. It might be a

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bit of a polarizing view, it might not, but I

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think it makes a bit of sense. So what are we

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going to learn out today? We're going to look

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at cutting costs and maybe managing costs and

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the difference between the two. One's important,

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one's certainly not. What effect? cutting costs

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can have in the short term and the long term

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and why that might be a good or a bad idea. And

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then we're definitely going to look on, well,

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if you do need to cut costs and that's your problem,

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you're not making enough money, you've run out

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of money, there's nothing there and you've just

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got to cut, cut, cut. Well, what should you be

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looking at instead? Okay. So what is cost cutting?

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Cost cutting. Pretty simple. We have this cost,

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we have this, we're going to cut it down. I'm

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gonna go out on a limited sayings, cutting costs.

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Yeah, so cutting costs, what does that mean?

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If you're in a restaurant, let's have some examples

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of cutting costs in a restaurant. Maybe you choose

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to use a cheaper alternative to a product that

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you would usually use, like different ingredients.

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So we're gonna use third grade beef mince instead

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of, oh, I feel it's steak. It's probably a bit

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extreme. Yeah. I was at Costco actually a few

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weeks ago on a trip to Melbourne and I went to

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order a burger, right? And they don't offer lettuce

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anymore on their burgers because apparently lettuce

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is too expensive now. Thank you to all the, you

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know, vegetable inflation. Do they replace it

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with anything? We just have a meat and cheese

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burger. Coleslaw. Coleslaw. Coleslaw to me is

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like a side that you put on the side of something

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not that you have in a burger. But yeah. Yeah.

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So for me, that's actually really cool because

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I found out recently I was highly allergic to

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lettuce, which I may have mentioned. I may not

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have. It's a joke around here, but I didn't believe

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him. Coleslaw. Love it. No, I didn't believe

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you when you first told me. We were out getting

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a burger maybe. somewhere local and, oh yeah,

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no lettuce. I'm like, what are you going to get

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us lettuce? I'm allergic. No one's allergic to

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lettuce. It doesn't happen. I'm really allergic

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to lettuce. Lettuce is like 90 % water. Yeah.

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And it's the two types that have the most water.

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Coles and iceberg. But there was a restaurant

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that I go to quite often and they just kept putting

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splice full little amounts on the top every time

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I asked. And eventually she came in, I picked

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it off in front of her and she said, just eat

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your lettuce. I'm like, no, I'm allergic. I had

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to show off my allergy test. I think she felt

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really bad. No one believes you, do they? No.

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But anyway, so yeah, that's an example. And I've

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now gone, okay, well, here's a cool burger that

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everyone likes, and let's take a pita out. And

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maybe it's coleslaw is just as good, or maybe

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it changes 100 % what the burger tastes like

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now. What other examples, cutting costs in a

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restaurant, that's a really easy one to look

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at. Stupid place where I go to lunch, nine times

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out of 10, they've got this pesto, chicken pesto

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salad. Yes. Premade. Didn't tell us. Didn't change

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price. Took the chicken out. Pretty big change.

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I can't wait to get into my chicken pesto pasta.

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This is going to be awesome. Where the bloody

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hell's the chicken? Oh yeah, we had to get rid

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of the chicken. Sorry about that. Could have

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told me. Hit me head in. On that too, my mum's

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a celiac, so she can't have any gluten in any

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of her foods. And so we would always gravitate

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to these regular brands that we always buy. And

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all of a sudden, this one particular brand just

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stopped making their products gluten free. Same

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packaging. What could possibly go wrong? Same

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packaging. Everything. No like message on the

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front of it saying, hey, we're not gluten free

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anymore. Same price. Gluten free price. And yeah,

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no, it wasn't gluten free anymore. And we didn't

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realise until we read the back of it. How do

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you feel about that brand now? We don't go to

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that brand anymore. We don't purchase it anymore.

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Like, if she had have eaten that, she could have

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been really, really sick. Yeah, there's another

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place around here that I don't really go to,

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but the Veggies is a Thai place and it's all

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crinkle cut. Then some of the work they just

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mentioned that they... I said, it's really familiar,

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like the Veggies have a bit of a strange taste.

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And I said, they're pretty familiar. It's like,

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oh, it's because we get them from the coals frozen

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section and pre -cut. And it was literally, it

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was the coals, like the coals mixed Veggies.

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Boom, that was the one. And they're just serving

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it up for their $35 meals with water. You know,

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that's cutting costs from a food perspective.

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But then in other businesses, what have you got?

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You've got staff costs, so wages, so we can cut

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wages, we can cut entitlements, we can cut perks.

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We can outsource. We can outsource, yeah. So

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that's cutting your costs. It's a pretty controversial

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one at the moment. Yeah, true, true. Very controversial.

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I think we've got a few stories today, don't

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we? A lot of businesses will try to do it themselves.

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Yep. which is a recipe for disaster. I only got

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so much time. Yeah, 100%. And then you've got

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services, advertising, branding. I've seen a

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few logos that are definitely homemade in my

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time. Yep. Good old Paint Shop Pro special. So

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yeah, there's lots of areas that we can. I think

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like Ian said, cutting costs is pretty straightforward.

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There's a lot of areas and a lot of things you

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can cut, but that's probably not what we're talking

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about today. Yeah. So why would a business need

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to cut costs in the first place? Don't have enough

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money. So generally it comes from a, it's pretty

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rare you've got a business that's just literally

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wasting money, giving it to all these places

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that they don't need for no reason. But fundamentally,

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if anyone wants to cut costs, it's because they

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don't have enough money and they're worried about

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what's gonna happen. They've got some bills they

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need to pay, which might be staff wages. It might

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be financial repayments. It might be enough material

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so they can do the next job. And then they're

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just looking at these other things coming out

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of the business every month or every quarter

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or, you know, this, this, this, this. And it's

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not getting them anything or they don't see the

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value in it. And so they go, right, let's chop

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them off. Gone. Easy to make more money, in my

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experience. Yeah. After the cutting costs. So

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why do you think that businesses automatically...

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Just think, you know, we need to cut costs now

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rather than just trying to increase their profit

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to begin with. I think there's a stigma there

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that it's harder to make more money, especially

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if you're doing what you've always done and it's

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not working. Oh, that's a good point. If I've

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always done it this way and it's not working

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anymore. Oh no, the market's changed. I'm going

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to have to fire you. Sorry. That sounds familiar.

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I think we already had a podcast on that. Yeah.

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You know, it's 100 % true. That's the mindset.

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Yep. Yeah. XYZ business is not going well. They

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haven't changed. I'm not quite sure why. The

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market's gone. They don't have a community behind

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them anymore because they're offering something

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people don't want. They don't want to listen.

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They haven't listened to their community. Yeah,

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it's all about them. And so now we're just going

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to cut costs because my business model doesn't

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sustain it anymore. That's one reason. But then

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another reason too is it's mainly for much larger

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organizations. Big businesses, especially share

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market listed ones, new CEO comes in, what's

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their target? Net profit for the shareholders.

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How much dividends can we get? So what do they

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do? They come in, they cut as many costs as they

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can. Boom, boom, boom, boom, boom. Short term,

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one year, two year, three year maybe. Net profits

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through the roof, they get huge bonuses, share

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options look like a hero and then they'll even

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go to the next place. Fly, let's fly away. Qantas?

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Who will fly to Frank Sinatra? That's actually

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not a bad tune. How do we segue on to Frank Sinatra?

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Oh, that's right, because I'm a horrible singer.

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Yeah, so we've all heard stories about different

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businesses throughout the years, but that's,

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you know, that's probably is a reason it's not

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always going bad sometimes if someone wants to

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make themselves look really good in the short

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term gain. Yeah, so there's going back to our

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little flying segue. There's a business that's

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been in the news a lot lately. Qantas? Yeah,

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let's not name them. We're not bad -mouthing

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Qantas. We're just talking about our experiences

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recently. They've had some challenges. They have?

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Yes. They've been in the news, that's true. Yes,

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we're going to talk about them? Yeah, we are.

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As an example. I flew with them recently. Yeah,

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okay. We'll try to support local. Yep. So Qantas

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have been around for a while. They're a pretty

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well -known airline, generally pretty good service.

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They've got their cheaper version Jetstar, which

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I always... I swear never to use again. And then

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somehow when I look at my next ticket when I'm

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boarding a plane, it says Jetstar again, even

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though I booked through Qantas each time. It's

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getting really frustrating. Yeah, premium service,

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known for reliability and getting from point

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A to point B. Made famous by Rain Man. Rain Man.

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Before my time. Really? Yeah, Rain Man. There

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was a character in the movie that just would

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only... Didn't want to fly at all because of

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airline crashes. Oh, Qantas is safe. Tom Cruise.

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True. They had a really good safety record, didn't

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they? Yeah. There's no airlines that fly that

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haven't crashed, Ray. Qantas, Qantas. I don't

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think Qantas fly from Idaho to Newark, Ray. But

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anyways, they have a really good reputation for

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a pretty premium service. Yeah. And I had an

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experience recently which will go through. Briefly.

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Yep. And I see you flew to New Zealand. Yes,

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I did. How'd that go? It wasn't the best experience

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that I've had. I've had some stellar experiences

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with Qantas. I don't fly with them a lot. Brand

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loyalty to another major airline. Jetstar? Definitely

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not. No, it was Tiger. Where'd they go? But I've

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had some great experiences with Qantas and you

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do feel like you're getting that premium even

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when you're buying an economy ticket. Not so

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much this time. Not so much. There were a few

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hiccups. Let's have a quick short list. OK. Every

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flight was late by at least an hour. There was

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no communication of the times that the flights

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were being rescheduled to. The fella who flew

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with me, he had his bags disappear for three

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days. That's never good. Luckily it was on the

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way home. They would have been really bad on

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the way there, wouldn't it? Wouldn't have been

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ideal. No. There's a whole heap of touch points

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that were quite negative. I feel we're avoidable

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in regards to communication, especially the app

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itself. You fly now, you get your ticket on your

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app and you've got your Qantas app. We're looking

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at the app and we're at the bar and we're like,

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okay, it's been an hour. Yep. Boarding soon.

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Excellent. Flight closed. Ah, mad dash to the

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gate in the international lounge at Melbourne.

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And everyone still lined up waiting. You just

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made us like waste half a beer on top of We've

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got airport -price beers as well. Priorities.

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Yeah. But I mean, that's 13 bucks each. So again,

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it's another negative experience. It's not like

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we're struggling for money, but it's still...

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Now you've got beer sitting in your guts that

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you've just tried to slam back, and you're not

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getting the premium experience that you've had

00:11:23.600 --> 00:11:25.559
in the past. There was one thing, I think, someone

00:11:25.559 --> 00:11:27.860
that was on your trip, they came in for something

00:11:27.860 --> 00:11:31.519
the other day, and they said they're allergic

00:11:31.519 --> 00:11:33.580
to mushroom, which I thought was funny. Oh, yes.

00:11:33.580 --> 00:11:37.360
I picked it. You picked it? Yeah. So what happened?

00:11:38.919 --> 00:11:43.980
I got the same meal as him on the flight and

00:11:43.980 --> 00:11:45.879
I know he's allergic to mushroom, like deathly

00:11:45.879 --> 00:11:49.279
allergic to mushroom. M -m -m -mushroom. I speak

00:11:49.279 --> 00:11:50.600
English. Don't worry about it. We understood

00:11:50.600 --> 00:11:52.899
what you meant. Exactly. There wasn't mushroom

00:11:52.899 --> 00:11:57.299
on the plane. Anyway, I've dove in, he's had

00:11:57.299 --> 00:11:58.840
a couple of bites out of his meal and I'm like,

00:11:58.940 --> 00:12:01.500
that's weird. I didn't expect to see it. Oh,

00:12:01.500 --> 00:12:05.960
that's a mushroom. Oi. That's a mushroom. Don't

00:12:05.960 --> 00:12:08.220
eat any more of that. You're gonna die. They

00:12:08.220 --> 00:12:09.820
were really good, actually. Their response to

00:12:09.820 --> 00:12:13.879
it was fantastic. The flight cabin people were

00:12:13.879 --> 00:12:16.320
amazing. Yep. Flight attendants. Yeah, that's

00:12:16.320 --> 00:12:19.639
them. I'm trying to avoid gender because, yeah.

00:12:19.820 --> 00:12:23.220
Flight attendants can be either or. So it's interesting

00:12:23.220 --> 00:12:24.980
because there's like a lot of small little points

00:12:24.980 --> 00:12:27.659
there which you don't necessarily think are related

00:12:27.659 --> 00:12:29.399
to one particular thing. And like you said, the

00:12:29.399 --> 00:12:33.100
people there. was still fantastic. So that hasn't

00:12:33.100 --> 00:12:37.419
really changed in all areas. But we went to Queensland

00:12:37.419 --> 00:12:40.320
and we booked through Qantas. Then we rocked

00:12:40.320 --> 00:12:44.399
up to leave and our flight was, I think it was

00:12:44.399 --> 00:12:46.759
delayed. I assume it was delayed. It had been

00:12:46.759 --> 00:12:48.720
changed three times in the three months prior

00:12:48.720 --> 00:12:50.200
to the price. You're now flying here, you're

00:12:50.200 --> 00:12:52.399
flying here. This has changed, this has changed.

00:12:52.620 --> 00:12:54.580
Connecting flights changed. It just kept changing.

00:12:55.279 --> 00:12:57.279
Anyway, the way there wasn't too bad. I think

00:12:57.279 --> 00:12:59.899
we... I assumed we had enough baggage, but we

00:12:59.899 --> 00:13:02.419
didn't. So somewhere the communication broke

00:13:02.419 --> 00:13:03.960
down there. The person was really good though.

00:13:04.259 --> 00:13:07.419
They charged us for three kilos extra when we

00:13:07.419 --> 00:13:10.340
had 20 kilo bag extra. So we thought we had an

00:13:10.340 --> 00:13:13.340
extra bag. So that was pretty good. You can't

00:13:13.340 --> 00:13:15.879
really fault the people side of things. But then

00:13:15.879 --> 00:13:17.240
on the way back, there was a bit of a problem

00:13:17.240 --> 00:13:18.860
because we were traveling with another party

00:13:18.860 --> 00:13:21.299
and we had nine people altogether. And our flight

00:13:21.299 --> 00:13:24.690
back had three stages. Basically, we got a message

00:13:24.690 --> 00:13:27.429
a few days before saying, hey, your first flight's

00:13:27.429 --> 00:13:29.509
changed to 3 o 'clock in the afternoon departure.

00:13:29.929 --> 00:13:34.309
You'll be arriving in Brisbane at 6 .30. I don't

00:13:34.309 --> 00:13:35.870
know, 3 o 'clock in the afternoon, 4 .30 it would

00:13:35.870 --> 00:13:38.830
have been. And our connecting flight left at

00:13:38.830 --> 00:13:41.750
1 .30. So, you know, that doesn't make too much

00:13:41.750 --> 00:13:44.289
sense. Anyway, so we had to call them and go

00:13:44.289 --> 00:13:46.669
through all the processes to change. And they

00:13:46.669 --> 00:13:48.250
said, yep, you guys can all fit on this flight

00:13:48.250 --> 00:13:50.809
in two parties and you'll get through no problems.

00:13:51.149 --> 00:13:53.159
So then they booked half of us on one. And then

00:13:53.159 --> 00:13:55.600
they went to book the others and changed our

00:13:55.600 --> 00:13:58.320
Qantas app because we were flying Qantas and

00:13:58.320 --> 00:14:01.539
we actually were on Qantas this time. And the

00:14:01.539 --> 00:14:04.240
Qantas app said, yes, our itinerary has changed,

00:14:04.399 --> 00:14:06.539
but we also had our original one. So it said,

00:14:06.639 --> 00:14:08.940
yep, your boarding passes are there. You're respected

00:14:08.940 --> 00:14:10.940
on this flight. We had the new flight as well,

00:14:11.179 --> 00:14:15.299
but it said cancelled. So for our friends, they

00:14:15.299 --> 00:14:18.830
were on the flight. Happy days. Ours said we

00:14:18.830 --> 00:14:20.429
were cancelled. So then we ran up again. They're

00:14:20.429 --> 00:14:21.710
like, I know you're on the flight It's all fine.

00:14:21.710 --> 00:14:23.350
I said we can't be right. So we ran up again

00:14:23.350 --> 00:14:25.789
and Got someone else because I thought that might

00:14:25.789 --> 00:14:27.330
be the issue and they said I know you're not

00:14:27.330 --> 00:14:30.929
on that flight It's you don't fit its full So

00:14:30.929 --> 00:14:34.149
anyway, 30 minutes later I was on the phone to

00:14:34.149 --> 00:14:35.690
this person trying to explain that you know We're

00:14:35.690 --> 00:14:38.070
traveling with a baby and then not leaving wasn't

00:14:38.070 --> 00:14:40.350
really an option we could have probably stayed

00:14:40.350 --> 00:14:42.370
another couple of days, but ideally we want to

00:14:42.370 --> 00:14:46.009
go back and They were like, can't you just leave

00:14:46.009 --> 00:14:47.490
and then sort it out when you get to Brisbane.

00:14:47.850 --> 00:14:49.570
It's like I'm not jumping on a plane, go somewhere

00:14:49.570 --> 00:14:51.750
else and not know what happens for the rest of

00:14:51.750 --> 00:14:54.070
the day. Just we're going to stay here or we

00:14:54.070 --> 00:14:57.029
go. It's two options and they didn't seem to

00:14:57.029 --> 00:14:59.629
get that. This person who was probably a lovely

00:14:59.629 --> 00:15:02.409
person but it was definitely untrained. Well

00:15:02.409 --> 00:15:03.850
I was on the phone to that person. I eventually

00:15:03.850 --> 00:15:05.470
got frustrated, hung up and then got a phone

00:15:05.470 --> 00:15:07.830
call from the original lady who had figured out

00:15:07.830 --> 00:15:10.009
what the problem was when she tried to rebook

00:15:10.009 --> 00:15:12.690
and the flight was full when she tried to book

00:15:12.690 --> 00:15:14.769
us in and has been frantically trying to fix

00:15:14.769 --> 00:15:17.570
it ever since. Which was great great personal

00:15:17.570 --> 00:15:20.029
effort and just was really ringing to apologize

00:15:20.029 --> 00:15:21.990
and say there's nothing they could do and and

00:15:21.990 --> 00:15:24.470
I said Can we just surely there's a flight for

00:15:24.470 --> 00:15:26.289
somewhere and then so I googled it and I said

00:15:26.289 --> 00:15:27.490
I can book on this flight for two and a half

00:15:27.490 --> 00:15:30.409
grand and we can get back via Melbourne One stop

00:15:30.409 --> 00:15:32.570
happy days. Can we jump on that? She said, yeah,

00:15:32.649 --> 00:15:33.830
what's the flight number? I gave her the flight

00:15:33.830 --> 00:15:36.250
number and yep happy days So she put me on Jetstar

00:15:36.250 --> 00:15:38.190
on the way back as she's the first thing she

00:15:38.190 --> 00:15:40.409
said was can you book that then? I said well

00:15:40.409 --> 00:15:42.149
enough to two and a half grand, but can you just

00:15:42.149 --> 00:15:43.649
put me on the flight? Because it's your company

00:15:43.940 --> 00:15:45.139
She said, oh yeah, no, that's fine. What's the

00:15:45.139 --> 00:15:47.440
flight number? When our friends changed to that

00:15:47.440 --> 00:15:49.779
flight, they got changed to the Qantas one and

00:15:49.779 --> 00:15:52.379
we got changed to the Jetstar one. So we're all

00:15:52.379 --> 00:15:53.639
on the Jetstar, but they got all the perks of

00:15:53.639 --> 00:15:55.200
Qantas and we didn't. So that was a bit of a

00:15:55.200 --> 00:15:58.899
shame. But what happened aside from that, they

00:15:58.899 --> 00:16:02.600
lost our heavy bulky items in Melbourne that

00:16:02.600 --> 00:16:04.340
we had to pick back up to get to the other plane.

00:16:04.620 --> 00:16:06.700
So we had to go to the baggage claim and the

00:16:06.700 --> 00:16:08.559
lady there was lovely. She's obviously been in

00:16:08.559 --> 00:16:10.179
Qantas for a long time, good customer service.

00:16:10.559 --> 00:16:12.179
She's like, I know it's there. I can see it there

00:16:12.179 --> 00:16:13.620
on the computer. I know exactly where it will

00:16:13.620 --> 00:16:17.200
be sitting. Quote, but ever since they replaced

00:16:17.200 --> 00:16:18.679
all our baggage, they sacked all our baggage

00:16:18.679 --> 00:16:20.779
handlers and replaced them with a crown, which

00:16:20.779 --> 00:16:22.120
I don't know how that works, but that's just

00:16:22.120 --> 00:16:24.399
what she said. They're useless. I'm going to

00:16:24.399 --> 00:16:25.879
go out there and I'm going to show them exactly

00:16:25.879 --> 00:16:27.980
where it is. And she'd already rang them three

00:16:27.980 --> 00:16:30.879
times by the stage. I'll be back in five minutes.

00:16:31.159 --> 00:16:32.700
And five minutes later, she came out the door

00:16:32.700 --> 00:16:34.889
and our stuff. came through the conveyor belt

00:16:34.889 --> 00:16:38.070
at the same time. How good is that? So, you know,

00:16:38.190 --> 00:16:39.730
Qantas isn't used for a million different reasons,

00:16:39.970 --> 00:16:42.190
and I'm not close enough to them to know all

00:16:42.190 --> 00:16:45.090
of the reasons, but there's customer service,

00:16:45.129 --> 00:16:47.730
which is definitely offshored with some very

00:16:47.730 --> 00:16:49.610
limited training, the fact that you need to look

00:16:49.610 --> 00:16:53.220
up your own. Run flights and be on the phone

00:16:53.220 --> 00:16:54.980
for two hours to solve something pretty simple

00:16:54.980 --> 00:16:56.940
and throughout Australia They've got some challenges

00:16:56.940 --> 00:16:59.340
with people being sick and limited resources

00:16:59.340 --> 00:17:01.159
and things like that, which I understand But

00:17:01.159 --> 00:17:03.679
they laid off their entire baggy channeling force.

00:17:03.759 --> 00:17:06.259
Yep and replace them with some contracted ones.

00:17:06.259 --> 00:17:09.279
I believe So these are things with I've done

00:17:09.279 --> 00:17:11.819
to cut costs and it might be required to survive

00:17:11.819 --> 00:17:14.339
But at the same time, there's some massive impacts

00:17:14.339 --> 00:17:16.700
on their brand massive impacts on the customers,

00:17:16.880 --> 00:17:19.200
which I don't they might recover from, they might

00:17:19.200 --> 00:17:21.740
not. Internal impacts. I mean, how do you think

00:17:21.740 --> 00:17:24.019
the staff are feeling? Oh, that lady, she was

00:17:24.019 --> 00:17:26.500
very upset with that man. That's what she said

00:17:26.500 --> 00:17:29.380
to me, a customer. That's a pretty familiar feeling,

00:17:29.420 --> 00:17:32.480
actually. I worked for a really big super fund

00:17:32.480 --> 00:17:35.339
in Australia. And I didn't work for them directly,

00:17:35.339 --> 00:17:39.039
but I worked through an outsourced service. So

00:17:39.039 --> 00:17:40.859
we did customer service and answer all of the

00:17:40.859 --> 00:17:43.720
initial inquiries and questions, just general

00:17:43.720 --> 00:17:46.779
advice for that fund. but we weren't actually

00:17:46.779 --> 00:17:49.180
employed by that fund. So we had very limited

00:17:49.180 --> 00:17:52.319
access to what we were allowed to A, tell the

00:17:52.319 --> 00:17:54.880
customers what information we could find out

00:17:54.880 --> 00:17:57.380
in terms of their claims, where their claims

00:17:57.380 --> 00:18:00.980
were at. So let's say someone had an insurance

00:18:00.980 --> 00:18:03.480
claim through their super for income protection.

00:18:03.660 --> 00:18:05.940
So they're like unable to work for a long period

00:18:05.940 --> 00:18:09.519
of time. We couldn't really get any information

00:18:09.519 --> 00:18:11.440
out of like the process of where their claim

00:18:11.440 --> 00:18:14.279
was because it was all sitting with yet another

00:18:14.279 --> 00:18:18.509
company. that was also outsourced. And so you

00:18:18.509 --> 00:18:20.509
were just constantly having to jump through hoop

00:18:20.509 --> 00:18:24.190
after hoop after hoop, having to transfer to

00:18:24.190 --> 00:18:26.369
get to who you needed to get to. And you weren't

00:18:26.369 --> 00:18:28.730
even a customer. Yeah, and that was that was

00:18:28.730 --> 00:18:30.730
my experience as an employee. So imagine how

00:18:30.730 --> 00:18:32.769
the customer that I was talking to was feeling.

00:18:33.289 --> 00:18:35.670
And again, it's just it would have been so much

00:18:35.670 --> 00:18:37.849
easier if everyone was all within the same company.

00:18:38.509 --> 00:18:41.069
everyone was all completely separate. Yeah, so

00:18:41.069 --> 00:18:42.369
I can't remember what the question was or we

00:18:42.369 --> 00:18:44.509
just segue into some stories about companies.

00:18:45.309 --> 00:18:47.269
But that's some pretty high profile cases and

00:18:47.269 --> 00:18:49.970
that's a really good example of how you cut costs

00:18:49.970 --> 00:18:52.650
for reasons which might be to save the company,

00:18:52.769 --> 00:18:54.450
it might be to increase the profits and get bigger

00:18:54.450 --> 00:18:58.269
bonuses, who knows. But you think we'll change

00:18:58.269 --> 00:19:00.589
this contract or it's half the price and they're

00:19:00.589 --> 00:19:03.009
promising these standards. But at the end of

00:19:03.009 --> 00:19:04.910
the day, just because they promise it or can

00:19:04.910 --> 00:19:06.660
deliver it or... say they will, it doesn't mean

00:19:06.660 --> 00:19:08.940
they will. And who are the people dealing with?

00:19:09.019 --> 00:19:11.119
They're dealing with your business. Let's take

00:19:11.119 --> 00:19:14.460
it from the perspective of an airline. I mean,

00:19:14.559 --> 00:19:18.119
if you're having your confidence eroded in the

00:19:18.119 --> 00:19:20.339
airline's customer service for starters and then

00:19:20.339 --> 00:19:22.880
their ability to find your bags, how long before

00:19:22.880 --> 00:19:26.160
you start going? I probably don't want to fly

00:19:26.160 --> 00:19:28.579
with them because maybe they're cutting costs

00:19:28.579 --> 00:19:30.940
elsewhere and it's not like you can just park

00:19:30.940 --> 00:19:34.069
the plane. From 30 ,000 feet? No, sure. You can

00:19:34.069 --> 00:19:36.630
glide down pretty well, but yeah, that safety

00:19:36.630 --> 00:19:38.089
thing with Qantas, we're happy to pay double

00:19:38.089 --> 00:19:39.349
the price because we know it's safe, we know

00:19:39.349 --> 00:19:40.029
we're going to get there, we're going to get

00:19:40.029 --> 00:19:42.450
a good service and be comfortable. But now, suddenly

00:19:42.450 --> 00:19:44.309
we're paying this price and we're getting treated

00:19:44.309 --> 00:19:47.390
worse than. It doesn't take much to erode consumer

00:19:47.390 --> 00:19:51.329
confidence. Yep. So there's a couple of big examples

00:19:51.329 --> 00:19:53.329
there, but you take that back to some of those

00:19:53.329 --> 00:19:56.880
restaurant examples. frozen veggies and we're

00:19:56.880 --> 00:19:59.160
putting them $35 and then people are going, gee,

00:19:59.240 --> 00:20:01.099
that tastes a bit funny. Like I literally remember

00:20:01.099 --> 00:20:03.059
saying, this tastes a bit funny. It's a bit familiar.

00:20:03.380 --> 00:20:05.819
And it was exactly what I thought it was. But

00:20:05.819 --> 00:20:07.599
you drop that food quality and you still charge

00:20:07.599 --> 00:20:10.980
the same. If you drop the... Price of the food

00:20:10.980 --> 00:20:12.960
down and maybe the quality goes down, but it

00:20:12.960 --> 00:20:14.640
doesn't impact the end result Well, that's actually

00:20:14.640 --> 00:20:17.039
fine. That's no worries a value equation hasn't

00:20:17.039 --> 00:20:19.339
changed for the consumer But if you're taking

00:20:19.339 --> 00:20:21.619
things away, you're taking things away You try

00:20:21.619 --> 00:20:23.380
go go up to your partner or go with someone who

00:20:23.380 --> 00:20:26.059
we work with give them a pin just say here have

00:20:26.059 --> 00:20:28.079
a pin They'll take it off you and then just snatch

00:20:28.079 --> 00:20:29.960
it right back out of their hands and walk off

00:20:29.960 --> 00:20:32.019
And just gave me a funny look. She's like what

00:20:32.019 --> 00:20:34.460
what kind of monster are you but do it? And then

00:20:34.460 --> 00:20:35.920
you just turn around and go how did that make

00:20:35.920 --> 00:20:39.420
you feel? and they will be upset as. And it's

00:20:39.420 --> 00:20:40.859
literally that, here, have this. Oh no, you can't

00:20:40.859 --> 00:20:42.940
have it anymore. And that's what all of this

00:20:42.940 --> 00:20:47.680
cost cutting is. Bigger businesses can absorb

00:20:47.680 --> 00:20:50.619
it better because, let's say, let's use Qantas

00:20:50.619 --> 00:20:53.319
as an example, you're not overly spoilt for choice

00:20:53.319 --> 00:20:57.220
as a consumer. So people are still going to fly

00:20:57.220 --> 00:21:00.700
with Qantas. But a small mum and pop restaurant

00:21:00.700 --> 00:21:03.460
using that strategy, I'll just go around the

00:21:03.460 --> 00:21:05.839
corner, mate. and you've lost a customer, and

00:21:05.839 --> 00:21:08.400
they'll probably tell 10 people. You probably

00:21:08.400 --> 00:21:10.059
don't want to go there anymore. That's not gluten

00:21:10.059 --> 00:21:12.400
-free anymore. They didn't tell us. Yep, spot

00:21:12.400 --> 00:21:14.059
on. And that's where some of those businesses,

00:21:14.180 --> 00:21:16.019
it's like a slippery slope. I might be jumping

00:21:16.019 --> 00:21:17.400
ahead here, I don't know, but it's a slippery

00:21:17.400 --> 00:21:19.779
slope because you cut those costs, that service

00:21:19.779 --> 00:21:21.599
level drops down, or the value drops down, and

00:21:21.599 --> 00:21:23.160
then you've got less clients again. And then

00:21:23.160 --> 00:21:24.900
you're in that position of, oh, we don't have

00:21:24.900 --> 00:21:26.319
the people, they don't want to come here anymore.

00:21:26.900 --> 00:21:28.640
The conditions aren't what they used to. People

00:21:28.640 --> 00:21:30.720
aren't like, they don't want it anymore. And

00:21:30.720 --> 00:21:32.789
then you've got to cut more costs. So how are

00:21:32.789 --> 00:21:35.009
you ever going to break out of that cycle? Snowball.

00:21:35.710 --> 00:21:38.710
Like a good employee, what are they worth? How

00:21:38.710 --> 00:21:41.230
long does it take you to train a good employee

00:21:41.230 --> 00:21:44.230
who then is an absolute advocate for your brand?

00:21:45.650 --> 00:21:47.730
We're cutting costs, sorry. Got to let you go.

00:21:48.009 --> 00:21:50.450
And now I'm going to outsource your job. The

00:21:50.450 --> 00:21:52.910
person has no idea what your brand is, your core

00:21:52.910 --> 00:21:56.430
values. Got rid of thousands upon thousands of

00:21:56.430 --> 00:21:59.740
dollars worth of experience. all for the sake

00:21:59.740 --> 00:22:02.779
of bottom line this quarter. And don't get us

00:22:02.779 --> 00:22:06.539
wrong, if there's another solution that's better

00:22:06.539 --> 00:22:10.240
or equal to that's cheaper, that's fine. But

00:22:10.240 --> 00:22:12.859
a lot of the time people were looking at the

00:22:12.859 --> 00:22:15.019
glossy brochure or this other business did it.

00:22:15.119 --> 00:22:17.920
When COVID hit and there was a lot of banks had

00:22:17.920 --> 00:22:19.259
huge trouble, I don't know if anyone tried to

00:22:19.259 --> 00:22:21.559
get finance or deal with a bank during COVID,

00:22:21.640 --> 00:22:23.579
but the waiting times were huge because nothing

00:22:23.579 --> 00:22:25.680
could get processed because all their document

00:22:25.680 --> 00:22:28.539
management and creation was offshored. along

00:22:28.539 --> 00:22:30.759
with a variety of other functions and they literally

00:22:30.759 --> 00:22:33.140
got taken out they were not able to work and

00:22:33.140 --> 00:22:35.339
that's no fault of those contractors but what

00:22:35.339 --> 00:22:37.500
did that mean for the the banks they couldn't

00:22:37.500 --> 00:22:39.700
function and they had no control over that and

00:22:39.700 --> 00:22:42.319
that was a pretty drastic scenario but had they

00:22:42.319 --> 00:22:45.220
had a few more safety nets in place it would

00:22:45.220 --> 00:22:47.259
have been a better case so you know if it's more

00:22:47.259 --> 00:22:48.740
practical to do something different if there's

00:22:48.740 --> 00:22:50.799
a system to automate and put in place that is

00:22:50.799 --> 00:22:52.980
better than employee and safer than employee

00:22:52.980 --> 00:22:55.099
and more reliable than employee yeah 100 you

00:22:55.099 --> 00:22:57.839
do it. Yeah, we're talking a lot about cutting

00:22:57.839 --> 00:23:00.799
costs and what the consumer experience is, but

00:23:00.799 --> 00:23:03.579
you've got internal costs too. Like we have these

00:23:03.579 --> 00:23:06.240
nice little pads with logos on them that don't

00:23:06.240 --> 00:23:07.740
look quite pretty. People love to steal them

00:23:07.740 --> 00:23:09.920
when they come visit. They're nice pads, they're

00:23:09.920 --> 00:23:12.160
not cheap pads. I don't have five of them sitting

00:23:12.160 --> 00:23:14.220
at home right now. Took a lot of 10 out for a

00:23:14.220 --> 00:23:16.579
client when they came in the other day. But,

00:23:16.660 --> 00:23:18.099
you know, people go, gee, that's a bit expensive,

00:23:18.180 --> 00:23:19.960
a bit of a waste, but people like them, they

00:23:19.960 --> 00:23:21.839
hang around, they sit out there in circulation,

00:23:22.180 --> 00:23:23.880
people use them for shopping lists, and people

00:23:23.880 --> 00:23:25.420
like them. It's a nice thing they remember about

00:23:25.420 --> 00:23:27.440
our business. You know, for our people working

00:23:27.440 --> 00:23:29.559
with us, we look at it and, oh, that's ours,

00:23:29.599 --> 00:23:31.359
that's nice, that's cool, we've got nice pens.

00:23:32.119 --> 00:23:34.779
Business that I used to work for had a really

00:23:34.779 --> 00:23:37.599
nice office six different type of biscuits six

00:23:37.599 --> 00:23:39.339
or seven different types of drink nice coffee

00:23:39.339 --> 00:23:42.980
machine Happy days and they moved office to a

00:23:42.980 --> 00:23:45.119
very not nice office with smelled a bit when

00:23:45.119 --> 00:23:47.079
someone went toilet There was no tea. There was

00:23:47.079 --> 00:23:49.960
no coffees There was one cup to share and no

00:23:49.960 --> 00:23:53.220
plates in a microwave. So how did you feel? Yeah

00:23:53.220 --> 00:23:56.019
Well, I felt worse for other people in the business

00:23:56.019 --> 00:23:59.160
is my position. I was reasonably senior. So I

00:23:59.160 --> 00:24:01.839
just took on by myself to either work from home

00:24:01.839 --> 00:24:04.079
or take as many coffee breaks as I would normally

00:24:04.079 --> 00:24:05.640
would take, but I had to walk to the coffee shop.

00:24:06.559 --> 00:24:10.140
So definitely affected productivity. A few people

00:24:10.140 --> 00:24:11.980
that weren't working in the office that came

00:24:11.980 --> 00:24:14.400
back into the office were very outraged and took

00:24:14.400 --> 00:24:17.799
it up as a crusade to get the milk back, which

00:24:17.799 --> 00:24:20.220
turns out that tea, coffee and milk is treated

00:24:20.220 --> 00:24:22.460
like toilet paper in a business as required by

00:24:22.460 --> 00:24:25.000
law to provide for your employees, which makes

00:24:25.000 --> 00:24:28.660
sense to me. Still didn't occur. but the people

00:24:28.660 --> 00:24:30.480
that had sit at their desks and things, it was

00:24:30.480 --> 00:24:32.460
a pretty, they didn't feel very good about it.

00:24:32.480 --> 00:24:34.680
I didn't feel very good about it. But, you know,

00:24:34.759 --> 00:24:36.400
how do you think the, how do you think people

00:24:36.400 --> 00:24:37.880
take it when you cut costs in your business?

00:24:37.980 --> 00:24:39.660
Oh, we don't need that anymore. They're not grateful

00:24:39.660 --> 00:24:42.539
for it. I was just playing to reread the story

00:24:42.539 --> 00:24:45.519
before about the biscuits. We had six different

00:24:45.519 --> 00:24:47.279
types and you think, oh, we were smashing them

00:24:47.279 --> 00:24:49.140
all the time, but yeah, you did for six months

00:24:49.140 --> 00:24:50.900
when you started. And then you realized it was

00:24:50.900 --> 00:24:54.140
a really bad idea. And You didn't really often

00:24:54.140 --> 00:24:56.019
have a biscuit. It was nice to have the variety.

00:24:56.119 --> 00:24:57.920
It was a nice perk, made you feel really good,

00:24:58.440 --> 00:25:00.900
but then take it away and it's pretty bad. So,

00:25:00.940 --> 00:25:02.759
you know, it's affecting some of these costs

00:25:02.759 --> 00:25:04.680
you cut. You don't think they make you money,

00:25:05.380 --> 00:25:07.599
but employee satisfaction or even just people's

00:25:07.599 --> 00:25:10.240
or clients' views of your business definitely

00:25:10.240 --> 00:25:13.000
get impacted. As an employer, you also start

00:25:13.000 --> 00:25:15.200
to ask questions, whether you're doing that consciously

00:25:15.200 --> 00:25:17.289
or you've just got that gut feeling. Gee, how

00:25:17.289 --> 00:25:20.150
long is this job going to last? 100%. That's

00:25:20.150 --> 00:25:22.289
a bad question for employers to have. When are

00:25:22.289 --> 00:25:23.450
they running out of money and where have they

00:25:23.450 --> 00:25:25.329
got no job? I'm normally driving around and now

00:25:25.329 --> 00:25:26.670
they're telling me I have to do this from my

00:25:26.670 --> 00:25:29.069
office. I've got to cut costs on petrol as well.

00:25:30.450 --> 00:25:33.150
How long am I going to be here? Better put the

00:25:33.150 --> 00:25:36.829
feelers out. That reminds me of another local

00:25:36.829 --> 00:25:39.809
business that I worked for recently. She's like,

00:25:40.109 --> 00:25:42.049
how old are you? Not that we're allowed to ask

00:25:42.049 --> 00:25:44.349
these questions as employers. I'm nearly 23.

00:25:44.670 --> 00:25:47.650
23. How many places? No, you don't have to answer

00:25:47.650 --> 00:25:50.890
that. Did you check the resume before you? I

00:25:50.890 --> 00:25:53.089
think she's done more stuff than I've done. A

00:25:53.089 --> 00:25:58.630
bit of a jack of all trades. So I was working

00:25:58.630 --> 00:26:01.450
for this local business and so they're a bit

00:26:01.450 --> 00:26:04.029
of a... We won't name this one. No, we won't.

00:26:04.829 --> 00:26:06.170
I suppose you could say they're kind of like

00:26:06.170 --> 00:26:07.789
a... Let's play a guessing game, everybody. I'll

00:26:07.789 --> 00:26:09.970
give you a hint. So they're a dealership. Excellent.

00:26:10.410 --> 00:26:13.049
There's only a few. Vehicle dealership. I won't

00:26:13.049 --> 00:26:16.000
guess. And they went through a period where they

00:26:16.000 --> 00:26:20.140
tried to cut a lot of costs. And this was largely

00:26:20.140 --> 00:26:22.240
due to COVID. When COVID hit, everyone just kind

00:26:22.240 --> 00:26:24.400
of had a bit of a panic attack and were like,

00:26:24.400 --> 00:26:26.220
you know, we need to drastically cut our costs

00:26:26.220 --> 00:26:27.740
because we're not selling anything right now.

00:26:27.740 --> 00:26:29.799
Yeah, fair enough. Yes. And especially cars.

00:26:29.920 --> 00:26:31.519
You need to go out and test drive cars. You're

00:26:31.519 --> 00:26:34.039
not going to purchase a car from, you know, the

00:26:34.039 --> 00:26:35.779
comfort of your lounge room. Like a lot of other

00:26:35.779 --> 00:26:38.920
businesses that have online stores are just doing

00:26:38.920 --> 00:26:40.720
fantastically because everyone sitting at home

00:26:40.720 --> 00:26:42.589
was like... Great, I'm going to online shop,

00:26:42.789 --> 00:26:43.809
that's what I'm going to do. And that three month

00:26:43.809 --> 00:26:46.970
period, everything sort of shut down and longer

00:26:46.970 --> 00:26:50.210
in some areas, 100%. That was a tough business

00:26:50.210 --> 00:26:53.109
to be in car sales. Yeah, absolutely. Right,

00:26:53.109 --> 00:26:56.569
so they had that. Yeah, so one of the things

00:26:56.569 --> 00:27:00.329
that they did was they moved their used car department

00:27:00.329 --> 00:27:05.109
from being across all of their sites to limiting

00:27:05.109 --> 00:27:08.670
them to only one site, which cost jobs as well,

00:27:08.710 --> 00:27:10.410
because then now, you know, we would have had

00:27:10.440 --> 00:27:13.559
used car detailers and we would have had used

00:27:13.559 --> 00:27:15.700
car sales people, we would have had you know

00:27:15.700 --> 00:27:19.200
administration assistants, all those jobs gone.

00:27:20.279 --> 00:27:23.599
All of the extra work now goes to the employers

00:27:23.599 --> 00:27:26.039
that are still left at the dealerships that were

00:27:26.039 --> 00:27:29.740
retaining those used car yards and so they usually

00:27:29.740 --> 00:27:32.180
have you know more cars at their yard but they'd

00:27:32.180 --> 00:27:33.900
also have a hell of a lot more work to do. So

00:27:33.900 --> 00:27:35.859
they've basically gone we've got multiple sites

00:27:35.859 --> 00:27:37.900
and now we're going to send it all to one and

00:27:37.900 --> 00:27:40.200
the people at that one site They keep their jobs,

00:27:40.279 --> 00:27:42.200
everyone else loses them. Now that people need

00:27:42.200 --> 00:27:44.640
to do the work of the extras. Yeah, pretty much.

00:27:45.240 --> 00:27:49.740
And then we also had a big empty space. So there's

00:27:49.740 --> 00:27:52.039
just a whole empty space where this used car

00:27:52.039 --> 00:27:55.480
yard used to be. There aren't enough new cars

00:27:55.480 --> 00:27:58.079
now because there's a lot of issues with new

00:27:58.079 --> 00:28:00.619
car sources, supply chains. And there will be

00:28:00.619 --> 00:28:02.339
for quite a considerable amount of time going

00:28:02.339 --> 00:28:05.180
forward. But we can't fill those spaces. They

00:28:05.180 --> 00:28:08.059
can't fill those spaces. And so it just looks

00:28:08.059 --> 00:28:11.400
empty. And so one of an experience that I had

00:28:11.400 --> 00:28:12.960
when I was working there is a lot of customers

00:28:12.960 --> 00:28:14.740
that come up and be like, wow, I didn't know

00:28:14.740 --> 00:28:17.779
that you guys were still open. Like, are you

00:28:17.779 --> 00:28:20.220
closing? When are you closing? And they also

00:28:20.220 --> 00:28:24.140
lost a brand as well, which was by choice because

00:28:24.140 --> 00:28:27.019
of just completely different operating ways.

00:28:27.220 --> 00:28:28.720
They were just moving to a different kind of

00:28:28.720 --> 00:28:31.640
style of business. But yeah, so they lost a brand

00:28:31.640 --> 00:28:34.400
and they lost their used car yard. And suddenly

00:28:34.400 --> 00:28:36.799
they had a completely empty shop front. And so

00:28:36.799 --> 00:28:40.619
what they did They thought they were going to

00:28:40.619 --> 00:28:44.259
save money by not having to employ as many people

00:28:44.259 --> 00:28:47.099
and not operating off of multiple sites, save

00:28:47.099 --> 00:28:50.420
money on travel between sites, etc. they're really

00:28:50.420 --> 00:28:54.079
lost out in the long run because a lot of people

00:28:54.079 --> 00:28:56.019
now think that they're closed and aren't going

00:28:56.019 --> 00:28:58.660
to go there and they've lost their reputation.

00:28:58.819 --> 00:29:00.400
Or lost a lot of skills when they got rid of

00:29:00.400 --> 00:29:02.519
a lot of people too. Yeah and they have a much

00:29:02.519 --> 00:29:05.220
higher staff turnover now as well because a lot

00:29:05.220 --> 00:29:07.299
of people that would have worked there for you

00:29:07.299 --> 00:29:10.359
know 10, 15, 20 years that were just kind of

00:29:10.359 --> 00:29:14.039
like let go in an instant were like okay well

00:29:14.039 --> 00:29:16.000
a lot of other people that worked there for a

00:29:16.000 --> 00:29:18.039
long time have lost their confidence in the business.

00:29:18.820 --> 00:29:20.619
That's pretty sad. Nothing looks better than

00:29:20.619 --> 00:29:26.279
empty shelves. So much confidence. You look at

00:29:26.279 --> 00:29:27.619
that from another point of view and you can go,

00:29:27.720 --> 00:29:28.880
well, that makes sense. You know, COVID, you're

00:29:28.880 --> 00:29:30.920
not selling anything. You've got to shrink. And

00:29:30.920 --> 00:29:33.339
that's fair. Right away, yeah. But, you know,

00:29:33.500 --> 00:29:35.460
there were things to do. And I remember advising

00:29:35.460 --> 00:29:37.019
people. It's like, okay, well, you can stand

00:29:37.019 --> 00:29:38.859
people down. That's okay. You can say, hey, guys,

00:29:38.980 --> 00:29:40.259
we can't pay you and we've got no work for you

00:29:40.259 --> 00:29:42.220
to do. You're not sacked, but you stood down.

00:29:42.480 --> 00:29:44.420
That was valid. And people didn't know what was

00:29:44.420 --> 00:29:48.829
going to happen. Then JobKeeper came out for

00:29:48.829 --> 00:29:50.690
a lot of these businesses, and I would say car

00:29:50.690 --> 00:29:52.789
yards included, a lot of people were buying a

00:29:52.789 --> 00:29:54.150
lot more vehicles than before. Getting stock

00:29:54.150 --> 00:29:56.529
was hard, but definitely volumes of units did

00:29:56.529 --> 00:29:57.890
not go down. They went up. It was still money,

00:29:57.950 --> 00:29:59.950
wasn't it? And then a lot of these things as

00:29:59.950 --> 00:30:02.990
they went up, people didn't go increase what

00:30:02.990 --> 00:30:04.650
they had. They went, oh, we've been operating

00:30:04.650 --> 00:30:06.730
okay. And it doesn't look like from the numbers,

00:30:06.789 --> 00:30:08.529
from the top end, from the management point of

00:30:08.529 --> 00:30:10.569
view, these numbers are still there. Actually,

00:30:10.650 --> 00:30:12.410
in fact, they're better. So why would we go back

00:30:12.410 --> 00:30:14.880
to how it used to be? So, you know, that's one

00:30:14.880 --> 00:30:16.859
way you can look at it. But then you've got people

00:30:16.859 --> 00:30:18.720
that are overworked, they're still doing the

00:30:18.720 --> 00:30:21.160
same volumes, they're not getting appreciated,

00:30:21.420 --> 00:30:23.099
they're getting managed off KPIs and they're

00:30:23.099 --> 00:30:25.519
saying, we want more help. We can't provide good

00:30:25.519 --> 00:30:27.200
experiences. And I don't know whether that's

00:30:27.200 --> 00:30:29.000
something you had or not, but... Absolutely.

00:30:29.180 --> 00:30:31.700
So we were having to adhere to our KPIs, you

00:30:31.700 --> 00:30:33.440
know, like was our service professional, was

00:30:33.440 --> 00:30:36.619
it prompt? Were we great communicators throughout

00:30:36.619 --> 00:30:39.799
the day? And it's really hard to be a good communicator

00:30:39.799 --> 00:30:42.279
when you don't have the time to communicate to

00:30:42.279 --> 00:30:44.319
every single person. You know, you're seeing

00:30:44.319 --> 00:30:47.240
upwards of 20 different customers a day, all

00:30:47.240 --> 00:30:50.619
with different reasons for coming in. And you're

00:30:50.619 --> 00:30:51.980
expected to be able to communicate with them

00:30:51.980 --> 00:30:53.779
at least, you know, two, three, four times a

00:30:53.779 --> 00:30:58.099
day, times that by 20. And there's only two people

00:30:58.099 --> 00:31:01.240
in the office most of the time at an office that

00:31:01.240 --> 00:31:04.000
back in the day would have had four or five.

00:31:04.609 --> 00:31:06.829
including a full -time manager, which was no

00:31:06.829 --> 00:31:08.410
longer an option either. Just for that site,

00:31:08.490 --> 00:31:09.970
not for the airlines as well. Yeah, so we had

00:31:09.970 --> 00:31:12.289
a part -time manager who was between two sites.

00:31:12.930 --> 00:31:15.410
And so you were also losing time to having to

00:31:15.410 --> 00:31:17.990
travel between the two as well. So it's an interesting

00:31:17.990 --> 00:31:19.690
thing when you look at cutting costs, you know,

00:31:19.730 --> 00:31:21.210
it can make your net profit look quite good.

00:31:21.630 --> 00:31:23.650
And if that's your measurement, then it does

00:31:23.650 --> 00:31:26.390
a really good job. But I would definitely argue

00:31:26.390 --> 00:31:28.259
that... you're looking at the wrong thing when

00:31:28.259 --> 00:31:30.380
you're cutting the cost. Sometimes, yes, you've

00:31:30.380 --> 00:31:31.779
got to cut the cost. You've got too many employees.

00:31:31.799 --> 00:31:34.319
It doesn't make sense. 100 % doesn't affect anything

00:31:34.319 --> 00:31:37.859
else. Cut the cost. But we're cutting costs to

00:31:37.859 --> 00:31:39.099
get rid of admin wage. A few people are going

00:31:39.099 --> 00:31:40.900
to work a bit harder. Our service is going to

00:31:40.900 --> 00:31:42.599
go down. Well, if that's what you want, that's

00:31:42.599 --> 00:31:45.799
fine. If that's your new model. But if that's

00:31:45.799 --> 00:31:49.619
not what you want, that's a pretty stupid reason

00:31:49.619 --> 00:31:52.420
to do it. You see it with government departments

00:31:52.420 --> 00:31:56.099
a lot, depending on who's in power at which time.

00:31:56.720 --> 00:31:59.480
Their method of cutting costs is generally retrenchment,

00:31:59.960 --> 00:32:02.480
and they will fire people from the lowest paid

00:32:02.480 --> 00:32:05.299
jobs, where you could fire three people from

00:32:05.299 --> 00:32:08.480
middle management and save the same cost. And

00:32:08.480 --> 00:32:11.339
it'd be just as easy to have somebody fill those

00:32:11.339 --> 00:32:14.539
spots, whereas you fire 100 people from the bottom

00:32:14.539 --> 00:32:19.640
end, you create worse publicity, and you've now

00:32:19.640 --> 00:32:24.170
got 100 people looking for work. It just doesn't

00:32:24.170 --> 00:32:26.589
make sense to me. Yeah, sometimes wrong measures,

00:32:26.710 --> 00:32:28.829
so you don't have the right measures. What else

00:32:28.829 --> 00:32:32.130
have we got to talk about? Well, what are some

00:32:32.130 --> 00:32:35.289
alternatives? Ah, yes. Make more money. What

00:32:35.289 --> 00:32:37.970
else could we do? So yeah, I think we've pretty

00:32:37.970 --> 00:32:39.690
well explained why cutting costs is a pretty

00:32:39.690 --> 00:32:42.470
bad idea and some really pretty serious examples

00:32:42.470 --> 00:32:46.230
there. But fundamentally, people need to cut

00:32:46.230 --> 00:32:48.509
costs because they don't have enough money. So

00:32:48.509 --> 00:32:50.730
what's the alternative to cutting costs? And

00:32:50.730 --> 00:32:52.690
there's two parts to you. Well, it's more than

00:32:52.690 --> 00:32:54.130
two parts, profit and loss, but there's two main

00:32:54.130 --> 00:32:56.130
parts. There's your expenses and then just your

00:32:56.130 --> 00:32:58.990
gross profit. So one's the bottom line, net profit,

00:32:59.009 --> 00:33:01.890
what you left over, top line's your income. How

00:33:01.890 --> 00:33:04.130
can we get more income? How can we get more profit

00:33:04.130 --> 00:33:06.630
before our expenses? And that's some of the things

00:33:06.630 --> 00:33:09.509
we look at. We cut costs and we go, oh, it's

00:33:09.509 --> 00:33:11.230
gone, gone, gone. But then we're actually reducing

00:33:11.230 --> 00:33:12.589
the amount of sales we're going to generate in

00:33:12.589 --> 00:33:14.690
the future or the capacity to generate sales.

00:33:15.529 --> 00:33:17.930
Sometimes you go, well, there's not expenses

00:33:17.930 --> 00:33:20.460
I can cut. these are all good long term but at

00:33:20.460 --> 00:33:22.240
the moment I can't afford them and that's where

00:33:22.240 --> 00:33:23.759
you need capital in your business sometimes.

00:33:23.799 --> 00:33:25.420
Sometimes you need to invest back into your business

00:33:25.420 --> 00:33:26.839
because you know well in three years time it's

00:33:26.839 --> 00:33:28.680
going to come back to me if I can maintain these

00:33:28.680 --> 00:33:30.380
things. But where's that capital going to come

00:33:30.380 --> 00:33:32.240
from? Yeah good question. So if you're running

00:33:32.240 --> 00:33:34.200
a business and you're just taking all the money

00:33:34.200 --> 00:33:35.980
and there's never anything left over at the end

00:33:35.980 --> 00:33:38.519
then that's not a very secure place. So you know

00:33:38.519 --> 00:33:41.299
I always believe you should have a buffer. People

00:33:41.299 --> 00:33:43.380
they go I've got to have paid off my house but

00:33:43.380 --> 00:33:45.339
then I've got no money in my business and I'm

00:33:45.339 --> 00:33:48.160
not going to be your financial advisor. But that's

00:33:48.160 --> 00:33:49.400
not really safe if you have something happening

00:33:49.400 --> 00:33:51.119
in your business. What does it mean? You have

00:33:51.119 --> 00:33:53.200
to sell your house. If your business is going

00:33:53.200 --> 00:33:54.779
really bad and you try to refinance your house,

00:33:54.839 --> 00:33:55.980
it's going to be pretty hard because they're

00:33:55.980 --> 00:33:57.019
going to look at your income so you don't have

00:33:57.019 --> 00:33:59.059
any income. We don't want to take your house

00:33:59.059 --> 00:34:01.400
off you, so we're not going to lie on you. But

00:34:01.400 --> 00:34:03.660
had you not paid off your house in full and left

00:34:03.660 --> 00:34:05.059
a bit of money until you could afford to pay

00:34:05.059 --> 00:34:07.440
it off later and left some more money kicking

00:34:07.440 --> 00:34:09.599
around for your business, that's one way for

00:34:09.599 --> 00:34:11.320
it to come. You can get investors, you can do

00:34:11.320 --> 00:34:14.500
other things and maybe some staff. That's all

00:34:14.500 --> 00:34:16.960
good if you plan ahead, but if you're in this

00:34:16.960 --> 00:34:19.739
position now and you haven't planned that far

00:34:19.739 --> 00:34:22.719
ahead, what else can you do? Yeah, good question.

00:34:22.800 --> 00:34:25.219
So you cut costs and then you're basically digging

00:34:25.219 --> 00:34:26.900
a hole that's going to get bigger and bigger

00:34:26.900 --> 00:34:28.579
for you to get out of. So what can you do? You've

00:34:28.579 --> 00:34:32.219
got to build the top line. So what can you do

00:34:32.219 --> 00:34:36.179
to pivot? And pivot basically means what other

00:34:36.179 --> 00:34:38.469
things can we be doing? with our customers, what

00:34:38.469 --> 00:34:40.190
are the products and services? So when COVID

00:34:40.190 --> 00:34:41.730
hit out, a lot of the clients that I was talking

00:34:41.730 --> 00:34:43.289
to was like, hey, what else can we offer at the

00:34:43.289 --> 00:34:45.170
moment? Oh, we can offer this, this, this, this,

00:34:45.170 --> 00:34:47.110
this, this. Well, let's go do it. Because we

00:34:47.110 --> 00:34:48.489
can't do this, this, this. We've got all this

00:34:48.489 --> 00:34:49.730
time. We've got all these employees with all

00:34:49.730 --> 00:34:52.030
this free time. Let's go nuts. When JobKeeper

00:34:52.030 --> 00:34:54.570
came out, some businesses got their employees

00:34:54.570 --> 00:34:56.429
back, some didn't. It's like, oh, we don't need

00:34:56.429 --> 00:34:58.090
them. So there's no point. Well, you've got all

00:34:58.090 --> 00:35:00.510
these employees essentially for free. Well, if

00:35:00.510 --> 00:35:02.210
there's 10 people a week that don't have anything

00:35:02.210 --> 00:35:04.269
to do, that's a lot of resource to do something

00:35:04.269 --> 00:35:06.809
new. Great opportunity. So it's building your

00:35:06.809 --> 00:35:08.889
top line. What can we do better? What can we

00:35:08.889 --> 00:35:11.170
do for other people? How can we improve this

00:35:11.170 --> 00:35:13.309
product? How can we improve this service? How

00:35:13.309 --> 00:35:16.389
can we maximise every customer touch point? Yep.

00:35:16.630 --> 00:35:18.949
Okay, that person's bought Fuzzy Widget over

00:35:18.949 --> 00:35:21.829
here, and there's an ad on sale there that we're

00:35:21.829 --> 00:35:24.989
missing out on. Yeah. And if that money's flying,

00:35:25.150 --> 00:35:29.380
I mean, COVID's a very unique... And hopefully,

00:35:29.380 --> 00:35:31.579
we don't see it again in our lifetime. That's

00:35:31.579 --> 00:35:33.400
not the usual reason for this problem. Yeah,

00:35:33.400 --> 00:35:36.559
it's a unique challenge. And no one was prepared

00:35:36.559 --> 00:35:41.480
for that. And if you were, hats off. But most

00:35:41.480 --> 00:35:45.320
of the time, you've seen it coming. Or we're

00:35:45.320 --> 00:35:47.159
going to need to cut costs pretty soon. It's

00:35:47.159 --> 00:35:48.440
not just going to be tomorrow you wake up and

00:35:48.440 --> 00:35:50.280
you've got no money. Exactly. You should have

00:35:50.280 --> 00:35:52.739
been a bit aware. It's not that great. Yeah.

00:35:52.739 --> 00:35:55.199
And if you haven't, you probably maybe think

00:35:55.199 --> 00:35:58.480
about your career choice. Maximise every interaction

00:35:58.480 --> 00:36:00.579
and maximise how much value you're offering.

00:36:01.139 --> 00:36:03.219
The simple equation is if you're offering more

00:36:03.219 --> 00:36:04.699
value than people are paying, they're going to

00:36:04.699 --> 00:36:07.639
keep coming back and buying. Correct. Yeah. So

00:36:07.639 --> 00:36:10.019
what other products can you offer? What better

00:36:10.019 --> 00:36:12.280
experience can you give? Can you do things in

00:36:12.280 --> 00:36:14.639
your business that's unrelated to what you do

00:36:14.639 --> 00:36:17.679
that make people go, oh, that's just great? Can

00:36:17.679 --> 00:36:20.159
you refer people to local businesses that have

00:36:20.159 --> 00:36:23.599
a similar, not a competing product, but a companion

00:36:23.599 --> 00:36:26.699
sale? talking about community in the previous

00:36:26.699 --> 00:36:30.000
podcast, why not be like, well, okay, this guy

00:36:30.000 --> 00:36:32.000
over here does a really good stake. We don't

00:36:32.000 --> 00:36:33.739
offer stake, but you should go talk to that guy.

00:36:34.000 --> 00:36:36.139
And that guy's gonna do the same thing back.

00:36:36.639 --> 00:36:39.539
Build those relationships. Yeah, so it's finding

00:36:39.539 --> 00:36:41.280
ways to build the top line rather than trying

00:36:41.280 --> 00:36:43.800
to cut costs. If you're doing that, you're getting

00:36:43.800 --> 00:36:46.260
more customers, which gives you more opportunities.

00:36:46.480 --> 00:36:48.159
You're getting more activity, which again gives

00:36:48.159 --> 00:36:50.159
you more opportunities. You're forced to find

00:36:50.159 --> 00:36:52.320
better ways of doing things, which should avoid

00:36:52.320 --> 00:36:55.369
getting stale and getting out of date. And, you

00:36:55.369 --> 00:36:58.789
know, in the case of the dealership, so if they

00:36:58.789 --> 00:37:02.590
want to get better results for customers, then

00:37:02.590 --> 00:37:03.969
what do they need to do? They need to make sure

00:37:03.969 --> 00:37:06.570
it's adequately resourced, adequately trained

00:37:06.570 --> 00:37:08.889
with an adequate system. If they want the best

00:37:08.889 --> 00:37:11.130
financial results, they need to make sure that

00:37:11.130 --> 00:37:13.670
it's the minimal resourcing with the minimal

00:37:13.670 --> 00:37:16.070
training for the maximum amount of customers

00:37:16.070 --> 00:37:19.929
at that level matches. So, you know, looking

00:37:19.929 --> 00:37:22.550
at the right thing. But fundamentally, it's building

00:37:22.550 --> 00:37:25.400
the top line. And have the conversation. Why

00:37:25.400 --> 00:37:27.800
did I start the business? A lot of your answers

00:37:27.800 --> 00:37:29.539
will be found in the answer to that question.

00:37:29.840 --> 00:37:31.739
Why did I start this in the first place? Because

00:37:31.739 --> 00:37:33.500
if you're feeling the stress where you need to

00:37:33.500 --> 00:37:35.880
cut costs, you're probably not loving your business

00:37:35.880 --> 00:37:38.820
right now. So go back to the basics and say,

00:37:39.300 --> 00:37:43.099
what was the reason that I started and reignite

00:37:43.099 --> 00:37:44.940
that passion? Because then that's where innovation

00:37:44.940 --> 00:37:47.219
will come from. It could be doing a different

00:37:47.219 --> 00:37:49.559
business to be fair. It's time for you to move

00:37:49.559 --> 00:37:52.719
on. You're wasting business oxygen. Sell it to

00:37:52.719 --> 00:37:54.480
someone, close it down and go do something else.

00:37:54.659 --> 00:37:56.599
You're hanging on because you've got employees.

00:37:57.320 --> 00:37:59.000
It's like a marriage that's hanging on because

00:37:59.000 --> 00:38:00.699
of the kids. They're probably hanging on just

00:38:00.699 --> 00:38:04.679
to do you a favor. There's a few different reasons

00:38:04.679 --> 00:38:07.719
or different things you can do but the other

00:38:07.719 --> 00:38:10.159
thing is just ask for help. If your cash flow

00:38:10.159 --> 00:38:12.929
is that bad. Go talk to someone that knows about

00:38:12.929 --> 00:38:14.610
business or how I'm struggling at the moment.

00:38:14.630 --> 00:38:16.409
What do I do? If you go to your accountant, they'll

00:38:16.409 --> 00:38:17.690
probably tell you to cut some costs and they'll

00:38:17.690 --> 00:38:18.969
look at that sort of stuff because that's what

00:38:18.969 --> 00:38:21.650
they do, which is fine if this costs a cut that

00:38:21.650 --> 00:38:23.449
aren't good, but just be careful they're not

00:38:23.449 --> 00:38:25.969
affecting what you do. But really you need to

00:38:25.969 --> 00:38:27.750
look at, okay, well, how can we grow this business?

00:38:27.829 --> 00:38:29.949
How can we do something better? What else could

00:38:29.949 --> 00:38:32.269
we be doing that we're not doing now? How can

00:38:32.269 --> 00:38:34.789
we sort of take this up to the next level? What

00:38:34.789 --> 00:38:37.630
do our customers want? And make that happen.

00:38:38.130 --> 00:38:40.610
I think that's a key point, Ro, is there are

00:38:40.610 --> 00:38:43.969
ways. and sometimes important ways to cut costs.

00:38:44.050 --> 00:38:48.670
Like you don't always need the 420 GSM silk business

00:38:48.670 --> 00:38:51.489
cards, the top of the range of everything, you

00:38:51.489 --> 00:38:55.090
can still get you. I'll argue that. No, it depends

00:38:55.090 --> 00:38:56.389
what your business is. Well, as long as you keep

00:38:56.389 --> 00:39:00.690
buying them from me, I'm happy. But there are

00:39:00.690 --> 00:39:03.849
ways to find a product that can still do the

00:39:03.849 --> 00:39:06.889
same job, as long as, as you said, as long as

00:39:06.889 --> 00:39:09.889
you're not compromising your core business by

00:39:09.889 --> 00:39:13.750
cutting costs. 100%. Cool. So is there any other

00:39:13.750 --> 00:39:16.070
advice that you would give to a business that's

00:39:16.070 --> 00:39:18.670
maybe struggling to stay afloat? Yeah, if you're

00:39:18.670 --> 00:39:21.030
struggling, I would have said this in probably

00:39:21.030 --> 00:39:23.690
every episode, but get some help. Like ask someone.

00:39:23.989 --> 00:39:26.110
People are more than happy to help other people.

00:39:26.170 --> 00:39:27.849
If you've got people that when you say, I'm struggling,

00:39:28.070 --> 00:39:29.670
they enjoy it, then they're probably the wrong

00:39:29.670 --> 00:39:32.190
people to have around. It's a lot of those people,

00:39:32.329 --> 00:39:33.989
but there's a lot of people that want to help

00:39:33.989 --> 00:39:36.429
you. So, you know, talk to someone that is successful.

00:39:36.510 --> 00:39:38.860
Hey, you know, Have you spoken to someone? Where

00:39:38.860 --> 00:39:40.800
did you get help from? What do you do having

00:39:40.800 --> 00:39:42.840
these problems? What do you think? Ask your customers,

00:39:43.360 --> 00:39:45.380
depending what it is. If it's, hey, we're thinking

00:39:45.380 --> 00:39:47.559
about offering some new services. What problems

00:39:47.559 --> 00:39:49.960
do you have? You know, then we might be able

00:39:49.960 --> 00:39:52.659
to solve, like do that market research. But I

00:39:52.659 --> 00:39:54.840
would 100 % reach out and ask for some help,

00:39:55.039 --> 00:39:57.719
talk to other people in business that have businesses.

00:39:57.820 --> 00:39:59.420
They'll say, how have we've had the same issues

00:39:59.420 --> 00:40:01.539
before? This is what we did. It might not be

00:40:01.539 --> 00:40:03.780
the best thing for you to do. You know, find,

00:40:04.059 --> 00:40:08.360
reach for some advice, get some ideas and you

00:40:08.360 --> 00:40:09.840
know, you've probably done pretty well to get

00:40:09.840 --> 00:40:12.059
to yourself to where you were in the first place.

00:40:12.119 --> 00:40:15.019
So once you get a few new ideas and knowledge

00:40:15.019 --> 00:40:17.079
of your business, you'll come up with something

00:40:17.079 --> 00:40:19.920
differently. Check your circle, eh? Or talk to

00:40:19.920 --> 00:40:23.440
us too, we'll be able to sort you out. Check

00:40:23.440 --> 00:40:26.380
your circle of influence. If you're hanging around

00:40:26.380 --> 00:40:28.159
with five people who are all struggling, you're

00:40:28.159 --> 00:40:30.059
probably going to be the sixth person who's struggling

00:40:30.059 --> 00:40:32.179
if you're hanging around with five people who

00:40:32.179 --> 00:40:35.079
are... innovating and changing the world, you're

00:40:35.079 --> 00:40:36.699
going to be in that position. And it's a hard

00:40:36.699 --> 00:40:39.260
thing to do. And you have to be self -aware in

00:40:39.260 --> 00:40:42.659
the first place. I know I bounce a lot of ideas

00:40:42.659 --> 00:40:44.800
off a row. There's plenty of times where you've

00:40:44.800 --> 00:40:46.300
looked at me and gone, what are you doing that

00:40:46.300 --> 00:40:47.960
for, you moron? That's why you bounce the idea

00:40:47.960 --> 00:40:52.599
for me. Exactly. But then we sit around and we...

00:40:52.409 --> 00:40:54.829
We've come up with some ideas. Yeah, so the only

00:40:54.829 --> 00:40:56.130
way you're going to come up with good ideas is

00:40:56.130 --> 00:40:59.610
to actually brainstorm stuff. And some people

00:40:59.610 --> 00:41:02.349
might seem a bit proud or whatnot, but if you're

00:41:02.349 --> 00:41:05.150
moving house, generally people ask for and, but

00:41:05.150 --> 00:41:07.050
if you're struggling in business, you don't ask

00:41:07.050 --> 00:41:08.989
anyone because you're embarrassed for whatever

00:41:08.989 --> 00:41:10.989
reason. But I say that's probably more important

00:41:10.989 --> 00:41:14.170
to ask because it matters a lot more to your

00:41:14.170 --> 00:41:16.230
family. It matters a lot more to your employees

00:41:16.230 --> 00:41:18.610
to get right and even your customers. If you've

00:41:18.610 --> 00:41:19.849
got a business doing something good, there's

00:41:19.849 --> 00:41:22.420
a lot of people relying on you. So yeah, number

00:41:22.420 --> 00:41:24.239
one, and probably the only thing, ask for help.

00:41:25.219 --> 00:41:27.340
I've found, and I know you're not using your

00:41:27.340 --> 00:41:33.420
podcast as a sales tool, but talking to Ro and

00:41:33.420 --> 00:41:36.840
your entire team is talking to experts, and they're

00:41:36.840 --> 00:41:38.460
not just going to bounce back what I want to

00:41:38.460 --> 00:41:42.039
hear. It's, okay, here's your problem, here's

00:41:42.039 --> 00:41:43.920
how to fix it. You're probably not going to like

00:41:43.920 --> 00:41:46.360
it, but that's not what you're paying me for.

00:41:46.519 --> 00:41:48.300
Yeah, people don't have the problems they have

00:41:48.300 --> 00:41:51.039
because they know the solution. They know the

00:41:51.039 --> 00:41:52.380
problem, they know what the solution would be,

00:41:52.480 --> 00:41:53.739
but they haven't, they've still got the problem

00:41:53.739 --> 00:41:54.760
because they don't want to do anything about

00:41:54.760 --> 00:41:56.019
it. They don't want you to tell me what I'm going

00:41:56.019 --> 00:41:59.099
to hear. Yeah. So, you know, understanding that

00:41:59.099 --> 00:42:01.239
it probably is your fault and, but it's fundamentally,

00:42:01.260 --> 00:42:02.940
you just got to do something. You can't just

00:42:02.940 --> 00:42:04.059
sit there and say, it's a problem and I'm just

00:42:04.059 --> 00:42:05.360
going to cut costs and it's going to go away.

00:42:05.659 --> 00:42:07.599
Like you need to cut costs because something's

00:42:07.599 --> 00:42:11.739
going wrong. So you need to do spot on. You get

00:42:11.739 --> 00:42:14.400
run over, but you just got to do something. And

00:42:14.400 --> 00:42:16.320
asking for help is usually a good point, even

00:42:16.320 --> 00:42:18.039
if it's just someone to talk to, you probably

00:42:18.039 --> 00:42:20.199
just go, oh, this is my problem, and you've gone

00:42:20.199 --> 00:42:22.280
through the problem just by doing that, you'll

00:42:22.280 --> 00:42:25.280
figure out five things to do. Some great topics

00:42:25.280 --> 00:42:28.099
there. So today we've talked about how cutting

00:42:28.099 --> 00:42:30.519
costs is not going to fix your problems, or it's

00:42:30.519 --> 00:42:32.699
probably not going to fix your problems, but

00:42:32.699 --> 00:42:34.940
it's more than likely that it may cause some

00:42:34.940 --> 00:42:37.219
side effects of cutting costs can drastically

00:42:37.219 --> 00:42:39.840
affect your business. So we've talked about how

00:42:39.840 --> 00:42:42.849
Qantas is... drastically decreased their service

00:42:42.849 --> 00:42:45.670
levels from just trying to cut some costs due

00:42:45.670 --> 00:42:49.969
to some debts from COVID. Well, I don't know

00:42:49.969 --> 00:42:52.309
the reason why they're cutting costs, but yeah,

00:42:52.349 --> 00:42:55.630
we do know in the news reports, obvious from

00:42:55.630 --> 00:42:57.849
our experiences, their service levels have definitely

00:42:57.849 --> 00:43:01.789
dropped. Absolutely. And maybe most importantly,

00:43:01.789 --> 00:43:04.929
if you're struggling, look at how you can grow

00:43:04.929 --> 00:43:07.889
your top line income and how you may be able

00:43:07.889 --> 00:43:10.420
to seek some help to do that. Yeah, and even

00:43:10.420 --> 00:43:11.659
if that means spending more money, we didn't

00:43:11.659 --> 00:43:13.079
mention that. I just thought of it as soon as

00:43:13.079 --> 00:43:14.840
you said that sometimes you've got to spend more

00:43:14.840 --> 00:43:18.280
money. That's not just that's not spend more

00:43:18.280 --> 00:43:20.300
money to cover your costs and not change anything.

00:43:20.340 --> 00:43:22.239
But does that mean you need to buy that bit of

00:43:22.239 --> 00:43:25.000
equipment that that's just sounds way too expensive,

00:43:25.000 --> 00:43:26.880
but it's going to change your business? Like

00:43:26.880 --> 00:43:28.400
just go and buy it like if you were starting

00:43:28.400 --> 00:43:30.460
a business, you probably you would have been

00:43:30.460 --> 00:43:33.440
a necessity. So that probably comes down to the

00:43:33.440 --> 00:43:35.860
difference between, you know, an investment and

00:43:35.860 --> 00:43:38.380
an expense. Yeah, spot on. And some people say

00:43:38.380 --> 00:43:41.679
a lot of things and a machine is an expense,

00:43:42.059 --> 00:43:44.079
which is not true, because if you buy a machine,

00:43:44.239 --> 00:43:47.119
you're investing it. An employee is at an expense.

00:43:47.199 --> 00:43:49.519
Even an admin employee is an expense or is an

00:43:49.519 --> 00:43:52.820
investment. And, you know, definitely advisors

00:43:52.820 --> 00:43:54.920
and things like that who are just a big expense.

00:43:55.099 --> 00:43:57.199
It's going to cost me 10 grand. And what am I

00:43:57.199 --> 00:44:01.099
really getting? You're getting a different circumstance

00:44:01.099 --> 00:44:03.300
to enjoy, you know, and that could be worth a

00:44:03.300 --> 00:44:05.760
lot more than that. So sometimes you've got to

00:44:05.760 --> 00:44:08.920
think, hey, you know, I've got no money and just

00:44:09.260 --> 00:44:11.500
Rather than thinking that sorry rather think

00:44:11.500 --> 00:44:15.340
you've got no money go there is money. I'm allocating

00:44:15.340 --> 00:44:18.039
it to places where is going to give me the biggest

00:44:18.039 --> 00:44:21.380
return and if that's a bit of short -term moving

00:44:21.380 --> 00:44:24.300
things around to To get the result you want there

00:44:24.300 --> 00:44:26.079
are definitely always some areas that you think

00:44:26.079 --> 00:44:27.800
you can't afford that I'm going to be a much

00:44:27.800 --> 00:44:29.699
bigger return for your investment than others

00:44:29.699 --> 00:44:33.960
In my experience, I'm no financial advisor, but

00:44:33.960 --> 00:44:36.539
it's always easier to make $10 ,000 than save

00:44:36.539 --> 00:44:39.730
$10 ,000 If I want to go on a holiday, I just

00:44:39.730 --> 00:44:42.230
find a way to make more money. If I can't afford

00:44:42.230 --> 00:44:46.010
it now. It's always been that way and it wasn't

00:44:46.010 --> 00:44:49.110
until later in life that I realized that. So

00:44:49.110 --> 00:44:51.949
you're slaving away on a wage. You might be a

00:44:51.949 --> 00:44:53.510
business owner who's drawing a wage and it's

00:44:53.510 --> 00:44:55.530
a tiny wage compared to your employees sometimes.

00:44:57.309 --> 00:45:00.070
And you're trying to save and save and save where

00:45:00.070 --> 00:45:03.289
you flip the script, find a way, find a way to

00:45:03.289 --> 00:45:05.369
make more money. Yeah, it's true. And even outside

00:45:05.369 --> 00:45:08.000
of business, if you don't have a business, A

00:45:08.000 --> 00:45:10.719
friend of mine asked me, maybe 18 months ago,

00:45:11.000 --> 00:45:13.400
since no one even knows what I do. He's like,

00:45:13.400 --> 00:45:15.619
oh, so you're a financial advisor? I said, no,

00:45:15.860 --> 00:45:17.280
I'm not a financial advisor. I can't advise you

00:45:17.280 --> 00:45:18.460
on those sort of things. You need a professional

00:45:18.460 --> 00:45:20.900
advice for that with a 30 page report going with

00:45:20.900 --> 00:45:24.559
it and a fact find. I said, what's your question?

00:45:24.619 --> 00:45:26.539
No, I'll probably help you. And he goes, oh,

00:45:26.659 --> 00:45:29.500
I just, I really need a bit of help budgeting.

00:45:30.079 --> 00:45:32.980
Just, you know, really save. And I said, you

00:45:32.980 --> 00:45:35.059
don't need to budget. He's like, why is that?

00:45:35.139 --> 00:45:36.760
I said, well, you're going to cut a few things

00:45:36.760 --> 00:45:39.000
out. You're going to stick to it for a few weeks.

00:45:39.099 --> 00:45:41.639
You're going to be sick of living the life you

00:45:41.639 --> 00:45:43.239
don't want to live. And then you're going to

00:45:43.239 --> 00:45:45.639
spend it all. And then you're back to square

00:45:45.639 --> 00:45:47.400
one. I said, you just need to make more money.

00:45:47.860 --> 00:45:50.320
And he's like, what do you mean? I said, make

00:45:50.320 --> 00:45:52.159
more money. I said, well, you can either save

00:45:52.159 --> 00:45:53.760
and never do anything fun and sit at home and

00:45:53.760 --> 00:45:55.360
do nothing because you have no money. Or you

00:45:55.360 --> 00:45:57.380
can go use some of that spare time to make some

00:45:57.380 --> 00:46:00.119
more money and then you can do more things. Instead

00:46:00.119 --> 00:46:02.920
of watching. 20 episodes of whatever's on binge

00:46:02.920 --> 00:46:05.400
at the time. Yeah. And then I think next time

00:46:05.400 --> 00:46:06.320
I saw him - I think we're all guilty of that.

00:46:07.079 --> 00:46:09.739
Two months later, he'd bought a few cows. Yep.

00:46:09.980 --> 00:46:11.500
He's had a friend who had a farm and a paddock

00:46:11.500 --> 00:46:12.820
that he doesn't use. It was happy for him to

00:46:12.820 --> 00:46:14.719
put some cows in this. He bought some cows and

00:46:14.719 --> 00:46:16.380
it doesn't sound like much, but that's a few

00:46:16.380 --> 00:46:18.400
thousand dollars over the course of a year that

00:46:18.400 --> 00:46:20.420
you're going to make, which you break that down

00:46:20.420 --> 00:46:23.159
to weekly. It's not a bad little income. Then

00:46:23.159 --> 00:46:24.800
he started doing some sessions, some private

00:46:24.800 --> 00:46:26.719
sessions for what he does on the side, which

00:46:26.719 --> 00:46:28.760
is just - Completely different, it wasn't taking

00:46:28.760 --> 00:46:31.440
away from his job. Massaging cows. He was earning

00:46:31.440 --> 00:46:33.780
pretty much half of his weekly income doing four

00:46:33.780 --> 00:46:36.199
hours work. Yeah, yeah. So, you know, I think

00:46:36.199 --> 00:46:38.099
a lot of the times, you know, you can cut costs

00:46:38.099 --> 00:46:39.760
and you can get somewhere with that, but there's

00:46:39.760 --> 00:46:42.360
only so many costs you can cut. Whereas if you're

00:46:42.360 --> 00:46:44.280
growing your top line, finding new ways to make

00:46:44.280 --> 00:46:47.519
money, there's unlimited potential. Great. Well,

00:46:47.559 --> 00:46:50.139
that's all we have time for today. In our next

00:46:50.139 --> 00:46:53.000
episode, we'll explore a topic called imposter

00:46:53.000 --> 00:46:55.369
syndrome. If you have any questions about what

00:46:55.369 --> 00:46:57.550
we talked about today, as usual, make sure you

00:46:57.550 --> 00:46:59.889
visit our online website and book a catch -up.

00:47:00.170 --> 00:47:03.329
You can reach us at www .businessabundance .online.

00:47:03.710 --> 00:47:05.949
And we'll see you next time. Goodbye. See you

00:47:05.949 --> 00:47:06.070
later.