The Exchanges

Q You know, you said I do shock and I, you know, but like, how do you actually show them that? How do you educate them?

A So the, the first thing is, um, I kind of do a triage of, uh, the hook. I usually, when I say hook and it sounds, uh, manipulative, but, um, I asked a very specific question to start off. Uh, how much profit does your business need to make this year? And a lot of people are even stunned by the question. Like you would think that they would automatically. And the most common answer they go to is. Uh, I would like to make 10%. That's what I would like to make. You know, everybody says that's, that's kind of like the end all be all. And when they say that, I say, no, that's what you want to make, but how much does your business have to make? And that's where the hook starts. Cause now I, I said, once they say, well, what do you mean? And I stand up and I go, let's make sure we're on the same page. I'm now able to actually start educating them on the five. There's five dimensions of profit that a company needs to make. And they go on a scale from, Essentially non-negotiable or crisis almost all the way up to option. And so by educating them on that triage of profit in itself, some of them could be debt service, working capital issues, retirement, value of a company. Last but not least is just their lifestyle. And they're not combined. They're kind of in a scale of these are non-negotiables or the floor all the way up through option. And by going through that education process, Um, …

AI assessment note: “I asked a very specific question to start off. Uh, how much profit does your business need to make”

Q So, do these engagements go longer than eight weeks, or at the eight weeks it's just done?

A Sometimes, sometimes, uh, there's an internal belt system, I guess is the best way to put it. Um, it's not a one and done a lot of times. And when I say we would love it to be, but, uh, I don't know how many diets you've been on in your entire life, but I've been, I've been three, 300 pounds and I've been 220 pounds, you know, in my adult life. And so, uh, it's kind of the same thing is, is that there is ongoing projects with a client to maintain Those, those habits, I guess is the best way to put it. And it can be in different intervals. It can be two years. So we'd rather, we'd rather put the project in, in that eight weeks and then circle back in a year. Hey, are you still, are you still on the diet? Are you still doing all the calisthenics sort of thing? Uh, and we may have to pick it up from, you know, 75% of the acumen we've, or habits we've changed. We might have to pick it up at all these different intervals, recalibrate that, Uh, supplement it again and then go on to maybe the next level of, of business acumen.

AI assessment note: “Sometimes, sometimes, uh, there's an internal belt system... it's not a one and done”

Q So you were saying that the automation is generating garbage data. Why is that?

A The, the, uh, like I said, um, just to give you some sheer numbers, our firm will engage and do that diagnostic phase. I was telling you about 11,000 times this year, right? That's 11,000. We're going to look at 11,000 sets of financials in, in that size, all trades, all industries, all sectors, as long as they're privately held. And the issue is in most cases, um, Business owners don't value accounting, right? They don't value it. And the reason they, a lot of them, that is, is because accounting is such a lagging indicator that even if you don't have a lot of business acumen, you're realizing I can't make decisions off of it. So because they can't make decisions off of it and they only see it as a prerequisite or a requirement of the IRS to be able to show how much they pay taxes, they're kind of cavalier about Really usually reconciling it and making sure it's accurate, uh, because it doesn't do anything from a management standpoint. And so in that, that's where we kind of get the garbage. So we almost have to build better ways to measure specifically proactively, um, with leading indicators. We have to build something in them that's almost customized, um, to be able to pull the information we have. If it was pure automation, there's always the sense that if they take the same approach, That they do to that accounting that we're going to be looking at wrong numbers. We're go…

AI assessment note: “Business owners don't value accounting... cavalier about Really usually reconciling it”

Q Do you go through this with them when you're trying to convince them to work with you, or after they've started paying?

A So the way we work with clients is we set up just an initial diagnostic phase in the first place. And that diagnostic phase actually determines whether we want them as a client and based their problems aren't one of the reasons why we have to see, um, if they have a bunch of problems, that's fine, but we have to see that they're fixable, right? So if I don't see that the problems are fixable, and if I don't see that there's a return on investment, uh, one of the things that we look at is Uh, can we yield a minimum of a two to one return on investment within one year? So exaggeration, they have to spend a million dollars with us. I'd have to see two million dollars of profits increases, not sales profit increases from fixing those problems. So in terms of convincing them, we go through the process of a two day diagnostic where they're kind of weighing us out through the education they're getting. Like these guys are really smart. They're showing me things I've never looked at in my business. Um, but I'm also looking at them to say, are they a good client? And those mechanical things are one side, but the other side is, can I coach this person? Like, is this person coachable? And do they have a sense of zeal to change behavior? And if they don't, it doesn't matter how fantastic I write up the prescription, right? And that's what we use prescriptions. It doesn't really matter. And…

AI assessment note: “So in terms of convincing them, we go through the process of a two day diagnostic”

Q And so how do you determine how to charge them once they start to work with you?

A Good question. Uh, in terms of, um, I can look at a specific, just an, we, we use medical analogies a lot, but just like, hey, I've got this ailment, a medical doctor can say, this is the procedure that it's going to take to mitigate that, that situation. So it's the same with us. If I see this in a specific industry, I can now say that's going to take this many hours to design, implement, Educate. And that's what we do. We do the design. We don't leave it to the business owners. No disrespect to them. We're just not going to let them implement it because we're the ones held accountable for that two to one return I mentioned. And then we have to educate their staff as well as them. So once I look at the grouping of problems that we're looking at, uh, I can look at the number of hours we're going to take and our, our agreements with clients are based on any day that you don't Determine that we've actually done our job. You can end the engagement. So it's kind of a day-to-day process. They have to invite us back Friday for Monday, and we work on a day-by-day basis, but we do it on a project basis. It's not intermittently. I call that sandcastle consulting, I guess is the best way to put it, where you, you build a great wall of a sandcastle, and then you go away for two days. Well, is it going to last, you know, especially beside the ocean? We do a project. It's four to six, eight…

AI assessment note: “I can now say that's going to take this many hours to design, implement”

Q So you're saying that your guiding post is two X profit return in a year. What is a typical client's response result actually look like?

A Um, so I'm sure you understand that because we're held to that standard and there's just some caveats, like they have to complete a whole project. In other words, they have to take all the medicine. If they, you know, stop halfway through, then that assurance doesn't, uh, hold true, but they have to complete the whole project. And the only participation after that really on their part is we want to see the dashboard, right? And they have to show us the dashboard that we've created for them. And they have to discuss it with us, uh, for, uh, at intervals of, of, of, let's say every four weeks, uh, for a year. So as long as they do all of that, what we found up front is I can quantify mismanagement on any company. And when I say typically I can quantify it, I can go in, look at all of the different areas in their business and quantify not only that that problem exists or there's a weak area in their company, but the other part is I can actually Uh, determine, um, how much that's costing them very specifically. So once I've quantified all those dollars, and then I quantify all the fixes, it's pretty easy for me to see that minimum of a two to one return on investment. And of course, because of margin of error, like I said, they're not robots. We're typically looking for a three to one with the assurance of a two to one.

AI assessment note: “We're typically looking for a three to one with the assurance of a two to one.”