How Can A Business Coach Transform Your Agency’s Success?

Intro (00:00:00) – Welcome to the Virtual CPA Success Show for Creative Agencies. The go to resource for agency owners looking to scale their business. Join us every week to stay ahead of the curve and position your agency for future success.

Jody (00:00:14) – Okay. Welcome, everybody, to today’s show. I want to introduce both Russ and Doug.  both have been, long term friends for, what, two and a half years so far. And, let me go and just throw it to, uh. I’ll throw it to you. Ross. First of all, why don’t you go ahead and introduce yourself a little bit, a little bit about yourself, maybe a little bit about pinnacle, about your company and all that kind of stuff. Then we’ll just shoot it over to Doug.

Russ (00:00:34) – Yeah, sure. So, my name is Russ Sorrells, and my company’s called Owen. Your category I have built, bought and sold six businesses in my career. Some were amazing, some sucked.  so.

Russ (00:00:45) – But now what I get to do is I get to help leaders, build better businesses with my partner, Doug.  We work with companies to help them, essentially. Well, just build better businesses. That’s what we do.

Jody (00:01:01) – Doug.

Doug (00:01:01) – Yeah.  Russ and I have been working together now for more, I suppose 3 or 4 months. We both joined, Pinnacle Guide actually the same month in September, a couple of years ago. And, we had developed a friendship almost immediately. And we’re talking every week. And, you know.

Russ (00:01:19) – Well, we have seven daughters between us. Yeah. So. Oh, geez. Oh, geez.

Jody (00:01:23) – Related?

Russ (00:01:25) – No, no. Not really.

Doug (00:01:27) – So. That’s why we are really weird. Yeah, right.

Doug (00:01:32) – That’s why I have white hair and he has no hair. Yeah.

Jody (00:01:35) – So, no, no. Yeah, right. I got to know him.

Doug (00:01:38) – Too. So, you know, like, Russ, I started and sold, eight businesses, I think.

Doug (00:01:43) – Right. Right around there. I had one really bad clinker in there. But obviously over those 45 years, you learn a, you know, a lot, you know, about business and about life. So when I retired, was looking for something to do and really felt that I had a base of knowledge, you know, that I could guide and coach people. So my, you know, my personal mission is really to inspire positive change in people’s lives. You know, that’s what we do. So we do, you know, strategy for clients, our business models a little bit differently in that we also we have annual meetings and quarterly is but we work with our clients in the months in between. You know, we’re doing coaching, you know, guiding, helping with strategy, making sure people are staying on track, creating execution. Both of us also do individual coaching,  one on one coaching. And we also do mastermind groups for second and command.

Jody (00:02:39) – So hey, Doug, first question why did you decide to get out of the running your own business to coaching, kind of quasi running your own business again? 

Doug (00:02:48) – Well, we sold it. So I had nothing. I had nothing to do. Again, after starting so many businesses, I just didn’t have it in me to start another one. You know, I mean, it’s a lot of work, you know, regardless of what people may say. So there was a point in my life, you know, with 11 grandkids, you know, my wife was retired, and I just found over time that I was able to connect with people and kind of a unique way. And Greg Cleary, who was the founder, one of the founders, I guess the principal founder of pinnacle was actually our, traction guide when we had our business. So I had known Greg, and,  he encouraged me to get involved. So it was it was really a great decision that I made at the time.

Jody (00:03:36) – Yeah. How about you, Russ? Just curious on why you decided to not, jump right into another business and or.

Jody (00:03:42) – Yeah.

Russ (00:03:42) – So I had the time. So my what I wanted to do was simplify. I had three brick and mortar businesses at the same time and real estate and a lot of stuff going on. So I my life was a hot mess. And I remembered when I was really good at something because, at that time when I had three brick and mortar businesses,  three teenage daughters,  as well as, you know, the real estate stuff, I, I wasn’t good at anything. And,  so I said, gosh, I’ve got something’s got to change. And I said, I’m just going to simplify and get help people to simplify their lives as well. Specifically, you know, business leaders. And we tend to over complex, we just make our life so complex. And so I wanted to reduce my own complexity. And in the process of doing a little soul searching, one of those, after I sold one of those businesses, we did a five week trip out west in an RV with the family, and it was amazing.

Russ (00:04:46) – But my mission was to figure out what I was going to be when I grew up.

Jody (00:04:49) – So yeah, for sure.

Russ (00:04:50) – On that next mountain I was going to climb. And one of my passions,  similar to Doug, is I like to help people realize their full potential. And I just believe that we all want to reach our full potential. But we’ve not been taught how nor shown the way. And I’ve had some amazing mentors throughout my life that have poured into me and helped me to just really build an amazing life of friends and relationships and businesses and different things. And so I wanted to return the favor and start doing that for others that wanted to go on a journey of, simplifying, but then also building something that matters.

Jody (00:05:28) – So yeah, it’s kind of interesting because my journey is very similar to what yours, except for I didn’t have multiple companies. I ran a small marketing firm, sold Cutco cutlery. A lot of people probably are doing that, but that was that was kind of the first venture was about three years of doing that running.

Russ (00:05:42) – That’s real sales right there.

Russ (00:05:44) – Real time sales.

Jody (00:05:46) – Yeah, big time sales.

Russ (00:05:47) – Kind of respect for the Cutco dealer.

Jody (00:05:49) – 1,000%. Yeah. And even those of the days, if you ever get a knock on the door or get a call, in vitamin that, you’ll have a good time with them and help them out a little bit. But with that, you know, it was one of those things I didn’t know what I wanted to do as a sales marketing. I loved it, but I love the accounting side of it. And I’d say accounting side of that. You’re kind of foolish as you’re before you can go to college accountings numbers and stuff like that. I was really good with numbers, and so when I, when I jumped into it, I was like, well, what did I want to do? I wanted to do something in the stock market, something investing, which again, that wasn’t accounting, didn’t know that at the time when I figured out pretty quickly that was actually finance.

Jody (00:06:26) – And so there was a difference between it. So as you’re a young person trying to figure it out, you know, you have to kind of figure your way. And I knew I didn’t want to work in a big city. That was a big, big drawback from finance because at that point it was, you know, stock market. You had to go and, you know, work on the floor type of thing. And so it was one of those things that when I when I jumped into the accounting world, I thought, this is perfectly it, because if it doesn’t work out, I’ve got a I got a fall back. You know, any an accountant can really do anything is what I, what I thought and I realized how quickly public accounting wasn’t for me. The hours wasn’t for me. There I realized also quickly and I say quickly, took me 3 to 4 years working in corporate world and realized that wasn’t it for me either. It was just, the redundancy thing.

Jody (00:07:05) – And so when I started the CPA firm, you know, back, you know, 20 years ago, I wanted to do a completely different. So in your journey, it sounds like you did your thing. Now you’re kind of helping other people out. I wanted to do the exact same thing. I thought, hey, how can I take what I learned in public accounting, what I’ve learned in the corporate world, and help all these small businesses out? And so very similar structure or very similar motivation that I had going into it, that you know, man, it really opened my eyes to all the, the need and the help that these small business owners really, really need.

Russ (00:07:37) – I joke that it’s selfish, you know, with it, it’s,  it’s selfish because it’s so enjoyable when you have an opportunity, when you see the light bulb go off, or you look back on the last year and the transformation that has happened as you’re walking alongside these leaders and transforming their businesses and really, you know, opening their eyes when you’re when you’re in the ditch, you know, it’s really difficult to see outside the ditch and, you know, to stop digging in some cases and really, let’s climb out of this thing and figure out, are we, are we digging the right hole or in the right spot? And it’s really rewarding.

Jody (00:08:15) – Where have you guys seen like, the biggest, just over this last year. What’s the biggest issue that a lot of these businesses have been facing? Has it been internal external combination of both.

Doug (00:08:24) – You know for that’s a great question. Jody. In July of 22, you know, with our with my clients before Russ and I joined, you know, I suspected there was going to be, you know, a downturn in the economy. So we started preparing our clients, you know, what does that look like? Our strategy, you know, evolved around that. I mean, in every single company, I mean, people’s the number one issue. I mean, it’s just, you know, it relates to everything, right? So, you know, one of the things we try and do is get that leadership team, you know, right people. Right seats is really the first thing you have to do. It’s not that you can’t make progress without that, but it’s slower, you know.

Doug (00:09:02) – Right. So that, you know, that’s a big deal.  You know, finances, you know, obviously talking to you is another huge category. I think it never ceases to surprise Russ and I, you know, people don’t have budgets. They’re not doing variance reports. They don’t know cash flow. And you know, I’m a finance guy. So, I mean, those things were critical to me. And I don’t know how you could manage a business without understanding, you know, the PNL, the in the balance sheet. But…

Russ (00:09:30) – Just keep digging. That’s how.

Doug (00:09:35) – I’m faster. 

Russ (00:09:36) – Well, we got to get a little more a little deeper.

Russ (00:09:39) – One more job. One more job. One more job. That’s how you do it.

Doug (00:09:42) – Well, the other thing that happens we’ve learned over time is, is that, you know, I think without exception, every client of mine is a privately held company, except for one.

Doug (00:09:54) – But you know what? The thing that happens is we’re working with and we’ve got. Excuse me. You know, we got over.

Doug (00:10:04) – You know, companies that are doing over 100 million but the leaders of those organizations, this is the biggest company they’ve ever run, right? And every year it’s the biggest company they’ve ever run. And they really don’t level up themselves. Right? There’s still, you know, it’s like they started the business. You know, they were doing accounting and they were doing the marketing. They were doing the sales. Well, they always kind of want to go back to that. Right. So you know, we call it seagull management, right? Ryan and crap over everything. So one of the things that we realize with the coaching side of our practice is we’re not going to be able to advance that company unless we’re leveling up those key leaders. So that really was the evolution of our coaching business.

Russ (00:10:48) – Yeah, I would say. So to kind of build on what Doug has said, I, I see these as the biggest challenges.

Russ (00:10:53) – Number one is they don’t have a strategy. Most companies don’t have a strategy and they’re in the leader’s mind or the owner’s mind. There is a strategy, but that strategy is not communicated, which is the second challenge that companies have. So first, there’s no clear strategy. Second is if there is any strategy, it’s not being communicated to the team. And I think that’s because we don’t like to be wrong in general. Right. If I draw a line in the sand, I tell someone this is where we’re going or this is what we’re going to do, and then it doesn’t happen. Well, now I’ve failed. And people don’t, you know, as leaders, I’m sure you guys feel the same way. And Doug and I talk about this all the time is we’re just making stuff up as we go along. Right? And but we don’t want to be found out by our team that we’re just making this stuff up as we go along. And that really is the reality of entrepreneurship.

Russ (00:11:43) – And leadership often is you’re waiting into waters that you’ve never been in. So you got to make it up as you go along. Then the third aspect that’s really an issue is this finance that you guys already touched on. Like there is I’ve been I’ve been really shocked at the lack of financial oversight. And it’s checkbook management. You know, you’re managing your business through your checkbook. Right. Hope we get enough money this month. So in.

Jody (00:12:09) – The black.

Russ (00:12:11) – Now we’re good. We go now, we got next month. Okay. Yep, yep. Good. Again  so I try to have all my leaders create a dashboard of, of all their, all the money that they have, you know, essentially the work that you do.  but from the beginning because when you see it, it’s like, oh, okay, there it is. Or oh, crap, that’s what we’ve got to do or that’s, that’s going to be an issue.

Russ (00:12:32) – But having it is better than not knowing it. But too often it’s like that monster in the closet, you know, they’re not addressing it. And it just gets bigger and bigger and bigger. And eventually it busts the door down and you’re in a lot of trouble as well.

Jody (00:12:47) – Are they afraid that they they’re afraid that they don’t want to know?

Russ (00:12:50) – Yes, exactly. That’s it. Right. Well, after you go so far. Right. You know, if you, you know, I think I have, you know, something wrong with me? I’m not going to go to the doctor. And then eventually it gets so bad, you go to the doctor, and you’re not going to like the news, right? But you address it in the beginning. You’re more likely to have a better outcome.

Doug (00:13:10) – The other thing that’s happened over time, too, we you know, we haven’t had a recession since 2008. So, you got a lot of entrepreneurs that have had this, you know, basically 12, 13 year run with no downturn in the economy.

Doug (00:13:23) – So that, you know, if sales are coming in, you can cover up a lot of stuff, right? Yeah. But once things start to turn. Whoops. Right. So I mean, and once you dig in and get things right, you know, they realize how much money they’ve wasted the last, you know, 12 years. Because, you know, we advise our clients that, you know, there is no question there’s going to be a downturn in the economy. It goes like this. Right? So you’ve got to you’ve got to start preparing now for the next downturn. You know, you’ve got to have cash in the bank. And that’s when a lot of great opportunities happen. You know, maybe you’re buying a competitor. You’re stealing clients, you know, whatever. But um.

Russ (00:14:00) – Yeah, yeah.

Russ (00:14:01) – That’s a so one of the last things that I see is a is a lack of focus on sales. And I try to encourage all of our well, this is what Doug and I, we try to encourage all of our teams to be sales driven organizations.

Russ (00:14:12) – And we talked about unreasonable hospitality, using that as a framework for helping us to deliver value that exceeds the customer expectations. Right. That’s really what unreasonable hospitality is all about. But if we can get the entire organization in sales mode, sales driven, following up, answering the phone with a smile, doing what’s necessary to ensure that our customers are happy we’re going to be successful long term. Now, that’s not the only thing, but that certainly is the oxygen that is necessary to provide the cash flow that we need to run the business on a day-to-day basis, as you know, full well from your. Yeah, yeah.

Jody (00:14:51) – Yeah. 

Doug (00:14:52) – And the other thing that’s happened too, I think, and I don’t know, Russ, we talked about this somewhat. For some reason people are much more aware that they need help, or they need a coach. And you know, I’ve seen an explosion in that. They you know, they just don’t know, you know, and most of our business is, you know, is referral business.

Doug (00:15:10) – But, you know, I think that’s been a big change to people are actually realizing that it’s okay to get some help.

Jody (00:15:19) – Right? Yeah.

Jody (00:15:20) – What’s the biggest benefit of a coach? You know, I’ll tell you my benefit. My biggest benefit that I’ve seen, having a coach for guys for 9 to 10 years, is having somebody that I can just be honest with. You know, being a business owner, like you said, you’ve got a you have your sales hat on every single day because if you’re not selling client, you’re selling your team. So it’s going to be one or the other. You’re selling your team on how we’re going to be successful, how we’re going to do all that kind of like rest is what you are talking about. You’re selling your clients and why we’re the perfect fit for you. But when it comes down to it, you don’t really have anybody to kind of vent outside of your maybe your spouse. It’s lonely and really, it’s lonely.

Russ (00:15:56) – It’s lonely place, right? Of course.

Jody (00:15:58) – Yeah. Big time. 

Russ (00:16:00) – Certainly from an accountability perspective, you know that I know it’s a, it’s a dirty word. It’s kind of a long word. But that’s the biggest benefit in coaching is that the coach is going to help you follow through on the plan. So, if you said you wanted to do this, then as a coach, my objective is to hold you accountable to executing on what you said you wanted to do. And then if you decide that you want to deviate from that, then why is that? What’s the justification and what’s the next mission as a result? So that is that’s fundamental from my perspective or that’s my benefit from coaching. That’s what I guess I of course, I have a coach as well. And find it super helpful for, from an accountability. I don’t want to let them down.

Jody (00:16:48) – Yeah. Do you feel like you’re a psychologist? A lot of times, these businesses.

Doug (00:16:53) – I think I have I had a minor in psychology, so maybe that’s helped work, but.

Doug (00:16:58) – Oh yeah, I did. Yeah. Yeah.

Doug (00:17:01) – So you know, so it’s I always tell the story about the guy that’s in the hole. Right. You know, he’s in the hole and the. Priest comes by and can you help me out of here? And he said, well, Jesus, I’m going to say or say a prayer for you. And, you know, hopefully you’ll get out. Well, finally, some, you know, 3 or 4 other people came by and didn’t help him out in this fourth guy comes by and all of a sudden he jumps in the hole. You know, the guy goes, what the hell did you jump in the hole? Now two of us are stuck down here and the guy calmly says, well, I’ve been here before and I know the way out. Right? So, you know, even if I’m talking to somebody 45 years old, I got 30 years of a business experience on them. So one of the thing that’s been surprising to me is that, I mean, there’s obviously situations that I haven’t seen, but not many.

Doug (00:17:46) – So we can accelerate their progress so much faster. Right. And I think coaches, some coaches are hesitant, just like psychologists are, to fix the problem Russ and I do is we’re guiding coaching and if there’s an obvious problem there, we’re solving it with them. Right. We’re not letting them just suffer. But you know, it’s like you know, my dad was, you know, my coach and mentor for years. And he just helped me, you know, he knew where all the holes were, right, and guided me around them. Now, once in a while, it was a shallow hole. He had me fall in because I was going to learn something, right? But he kept me out of the deep holes for sure. And that’s, I think, what we do. What you think, Russ? We keep them out of the big holes.

Russ (00:18:27) – That’s certainly the certainly the mission. And really to help them realize the hole that they were in. 

Russ (00:18:32) – Because you know when you’re again when you’re in it, it’s Groundhog Day.

Doug (00:18:35) – Oh God.

Russ (00:18:36) – Have someone say, hey, dude, do you like it down there or you, you want to go and let’s do something different? What do you think?

Russ (00:18:43) – Oh yeah. Yeah. 

Russ (00:18:44) – No one said that I was I was having a I was with a guy. He’s a leader at a, at a large software company here in the Charlotte area. And we were, we were having coffee and doing a little coaching and, and he talked about how he was stubborn. And I said, I said that’s a that’s just an excuse.  you’re just telling yourself a story about that so you can continue to do that. So, you don’t want to do something. That’s what your default is. And he says, gosh, you know, you’re right. You said no one has ever called me out on my shit. And, so that was, you know, that was a light bulb moment for him.

Russ (00:19:25) – And he really had a moment of reflection because someone challenged him and pushed back and didn’t buy his story, you know, that he had been that he’d been telling.

Jody (00:19:34) – Which is a perfect reason why you have a coach right there going to be honest with you. They’re going to employ may not be honest with you because they’re afraid if they’re honest, they may lose their job. Right.  whereas a coach like one of the two of you, I mean, you can be brutally honest, you know, if if they don’t like it, you’ll find somebody else. Well, right.

Doug (00:19:54) – Because what happens is, is that you don’t just talk about business. I mean, you know, we’re talking about, you know, their entire life, you know, what’s in there. And, you know, these coaching relationships, you know, I hadn’t done coaching up until two years ago. I mean, you obviously mentor your own employees and stuff, but I really didn’t realize the impact and the close relationships you develop with these people, right? I mean, I coach somebody when a senior executive at Under Armour and he calls me Christmas Eve, I mean, it’s like, you know, I mean, that says something about how close these relationships are, right? Yeah.

Doug (00:20:30) – Yeah. So that’s been, you know, yes. We both Russ and I are you know, we don’t have to do this, right. I mean, we could, you know, do something else, you know, but it’s the pure joy of helping people and seeing them succeed. That’s what really drives us. Do you agree, Russ? And that’s what it is.

Russ (00:20:49) – 100%. That is the reason that I do what I do what and obviously why we do what we do is because we want to we want to serve in this way. And it’s again, it’s selfish. I call it selfish because it is so fun to go in and work with these teams and help them put a plan together, hold them accountable to executing the plan, make sure they’re communicating the plan and, you know, measuring our progress along the way. And that’s another thing that a lot of companies don’t do is they’re not they’re not they don’t have any KPIs. It’s just again, we’re winging it.

Russ (00:21:21) – We’re really winging it. And so I have a, a series that I did call Turning Pro, where I talk about what we can do as business owners and leaders to turn pro for our businesses to become professional business leaders as opposed to just winging it every day. So but it’s a challenge.

Jody (00:21:41) – Yeah. Got a question for you guys. We’ve got a lot of clients right now that are in a situation where maybe their pipeline is not as strong as what it what it was, or maybe they’re getting delayed on jobs and it seems like it’s happening in construction. It seems like it’s happening in marketing. It’s happening a lot of different areas. How would you go in and help a client or in a situation where my hands are up? My you know, my pipeline is not strong. That’s why I’m going to have a bad year next year. That’s why I had a bad year this year. You know, how would you help that last?

Doug (00:22:11) – Could I tee it up for you?

Doug (00:22:14) – Well, one of the things that happens with sales, it’s not treated as a profession. Right. And there’s no accountability typically in sales. And one thing, Russ, is really this is one area areas of his expertise in terms of, you know, how do you make sure that pipeline is full? Are you doing the necessary groundwork? What are the forward looking, you know, KPIs? But it can be turned around. And Russ, why don’t you talk specifically about what you do in that area? That’s pretty remarkable.

Russ (00:22:43) – Well, what most people are, most salespeople, I shouldn’t say qualifies most, but a lot of salespeople are order takers, right? Especially since we’ve had this great economy. The leads have been coming in and it’s just a matter of, did we get this person a quote and are they going to order like that’s the conversation. But we want to level up our intentionality by having a sales plan, having a sales strategy and having a forecast, and then holding our people accountable to executing the forecast that we’ve created.

Russ (00:23:15) – So we want to dig into the pipeline. So, when we get in there, we want to dig into the pipeline. Understand how real are these? Because a lot of times the companies I’m working with, they let their list continue to grow. And it’s this long of opportunities. We’ll look at all the opportunities. Well, the reality is that 95% of those aren’t going to turn into orders and they know it. So let’s get them off the list so that we don’t have the clutter and just really dial in and focus in on where we need to, where we need to get the orders. And then I always get the leaders involved. You know, the CEO, I always say you are the biggest sales guy sales person in this organization. You’ve got to be on the road. You’ve got to get on the road. If sales are tight, you need orders. It’s on. It’s on you. That’s, you know, as the leader to get out there, get on the road and, and do that work.

Russ (00:24:04) – So we really work on that, work on the plan. What is the messaging. Right. So we need to be telling two stories as salespeople. We need to tell our story in a fun way. So people actually want to want to hear what we have to say. Maybe 60s 90s just a quick, you know, fun, fun story about how our the heck we ended up in this industry. And then the second is we need to be able to tell the story of the business, right? And that’s what Kristi does so well when she’s, you know, telling the story of summit. Right? So, she’s able to articulate that. And when you and I talked the other day and you laid the story out, I loved it. Right. So, you know, similar backgrounds, you didn’t have a whole lot of anything growing up in Indiana. And so I was determined to, to figure it out. And so were you. Right. And so, but anyway, understanding that story and telling the story in a way that’s impactful, and then just shutting up and listening to what the customer has to say.

Russ (00:24:57) –  And that’s the most uncomfortable thing for most salespeople to do, but ask and then don’t say a word you said.

Jody (00:25:04) – Yeah. And there’s really no, there’s no sort of both of that.

Jody (00:25:08) – And it’s not a you’re not playing a game, you’re just simply putting it into there. Because what’s going to happen is the first thing they say is typically their issue, right? For the most part, because they’ve had time to think now and they’re just not saying something to banter back and forth and really thinking. And then they usually come up with the answer themselves. Doug, what are we going to say about that?

Doug (00:25:28) – Yeah, I think on that, on that sales side, it’s like everything else, it’s a lot of people issues too, you know, and if you’ve got an organization that isn’t generating the revenue, you’re most likely going to be making changes in that department. You just don’t have the right people. And because they’ve been order takers, they got way too many farmers and not enough hunters out there.

Doug (00:25:46) – So, you know, there are very, very few companies we’ve worked with that there haven’t been some people changes, you know, and the other area that I think it’s been a little bit of a surprise to me, quite frankly, and it should have been, is that, you know, I’ve got a lot of female clients, you know, because they’re now in these leadership roles and, you know, the dynamics of, of what they’re doing, you know, just it carries some additional, I don’t want to say burdens, but some additional challenges being in those leadership positions. But I think Russ and I, for some reason, we got all these girls and I’ve got five granddaughters. So we’re a little bit more empathetic, you know, to that. So that’s been a little bit of a surprise to me in terms of the mix, you know, of the clients that we work with.

Russ (00:26:32) – I have a question for you, Jody. When you when you are, when you have a new client and you’re bringing them on from a financial perspective, what are the biggest mistakes or issues that you find? Well, I guess those are two different ones.

Russ (00:26:44) – What are the biggest mistakes that you see small businesses making as it relates to their finances? And then and yeah, so let’s just talk about that.

Jody (00:26:54) – Well, I think the biggest ones is the they really don’t even understand their financial statement position at all. And not necessarily in the accounting side, because even some accountants don’t even understand that. But what I’m saying is, how do you read those financials and then how to apply those going forward? And I think, you know, Doug, you’d mentioned that very, very few of the clients that you’ve had had forecasts or budgets or anything like that. And one of the kind of the aha moment is when I worked in, the corporate world, I worked for a $250 million manufacturing company, and we had a basically a 13 week cash flow by day. And so it’s 13 week by day cash flow. And it basically had all the ins and outs and, you know, and basically allowed us the $250 million manufacturing company to make sure we have money in the bank at all times to be able to borrow the line of credit we needed to and so forth, and use it truly is a line of credit.

Jody (00:27:46) – And when I started teaching clients in small businesses, it was a foreign concept completely. And it blew my mind. It was like, well, why wouldn’t everybody do this?

Jody (00:27:57) – Ins out cash, you know? But instead they kept looking at and they kept looking at, okay, I got this amount of money in the bank and oh, I’ve got these small checks outstanding that I remember. Oh. So, I’m probably good, right. You know. And that’s all they looked at, which like I said, blew my mind. And then, then they wondered why they’d never grown. You know, it’s like, hey, why have I grown? Or if I have grown, I still had the same dollar amount at the bottom. You know, they go from $1 million to $2 million, and they still have that $200,000. Bottom line, it’s like, well, first of all, that’s not a great bottom line for that, that size of a company. And then why didn’t it grow with your growth? And the reason is they didn’t have that even that 13 week cash flow forecast, they didn’t have that in play, but they didn’t have the longer one.

Jody (00:28:41) – And that’s the that that was the biggest mistake that clients have coming in to us is they never had it.  or if they did, they really weren’t paying attention to it because it’s, you know, because it’s like I always tell the story about the map. You know, if I live in Indiana, I can find Florida pretty easily. I just drive south. Eventually I’m gonna hit Florida, right? I might hit Alabama first. I might hit Texas. But I’ll figure out how to get over to Florida and eventually get there. But, you know, now that you’ve got the GPS, which is the business coach or the CFO, they can guide you through all that. They can guide you through all the different obstacles. You might have the speed traps along the way. They can get you the quickest path. They’re around the road constructions and all that kind of stuff. And you’ll get there a lot quicker and faster. And the funniest thing is, is that when you have that plan like that, you normally get there, when you don’t have the plan, you’re still just driving around, you know, you have no idea where you’re going.

Jody (00:29:35) – You’re just driving around, but you get there. And so, we say, you know, hey, the forecast is not just the forecast, but it’s there to set your goals, you know, hey, I want to I want to retire in three years. I want to sell the company for X amount of dollars. Well, you know, what does it take to get that? Oh, I’ve got to have an EBITDA whatever. And then the multiples the valuation or whatever. Well, how do we get to that. And you got three years to do it. And so that’s where the game plan comes in on the financial side is, you know, hey, here’s what we have to do in order to get to that, that stage. And so, it’s just simply not having that forecast or that plan in place, which just blows my mind that most business owners don’t. And if you’re out there and you don’t have that, you know, don’t feel bad.

Russ (00:30:14) – Exactly! Yeah, that’s what I was going to say as well.

Russ (00:30:16) – You know, if that’s your situation, no problem. No problem. Because you’re not alone.

Doug (00:30:20) – But you’re in the majority.

Russ (00:30:22) – Make an investment. Yeah.

Jody (00:30:23) – Yeah.

Russ (00:30:24) – What’s interesting is we get Pennywise and pound foolish in in business so often. And I find it around investing in services like your service or coaching or hiring a guide. Yeah, and then also as it relates to hiring people, uh where if I now I know now I was pennywise pound foolish a lot in my career and it cost me a lot more hiring the wrong person than it ever would have had I actually paid the amount of money that I should have in the first place. So…

Jody (00:30:59) – What do you mean by that, Russ? What do you mean by that? That’s the quality of person.

Russ (00:31:01) – Yeah, that’s why I was looking for someone to, at one of the first hires, of course, was a salesperson for my agency. And so, this person, I could pay him 40 grand.

Russ (00:31:12) – They were, you know, a couple years out of college. I really liked him. I thought, you know, he would be a great fit. And, but he had no, he had no sales experience. And so, I had to teach and train him everything. And that took me away from focusing on revenue generation, for one thing. Right. So not only did it cost me because I had to train him, it cost me financially because I wasn’t generating the additional revenue that it would have been generating had I been in the field, doing that. Plus, you know, he’s sucking some cash out of the business because, you know, he’s we’re I’m paying him even though it was a low salary. But the reality was, you know, what I eventually started doing is I would go out and find people with experience, pay him 120 grand, and then the commission on top of that. And I won every time.

Russ (00:32:04) – Like that was I was like, oh my gosh, I’m such a ding dong, you know? Now I now I know I did. I’ll give you one more example is, we bought a car wash and oil change facility and this business was amazing. It was doing great. It had a really strong leader, owner of that business seven days a week. The guy was there for ten years. He only took two weeks off one of those kind of people. And,  but he was high and tight, man. He did a great job. Well, I brought in someone and I’m like, ah, you know what? Well, this got this person happened to be my brother. Let’s give him something to do. And I mean, it’s a car wash, an oil change facility. How hard is it? So, we brought him in, paid him 42 grand, gave him a little, little bonus. Well, if you’ve now I know hindsight’s 2020. The reality is I should have found someone that was in that industry.

Russ (00:32:55) – Paid him $120,000, given him a piece of the action, then we would have we would have had a successful business over the long term. But because I was pennywise and pound foolish, I wanted to keep the cash for myself. And, it cost me about a half a million bucks. But you know who’s counting?

Doug (00:33:15) – Well, you know, I want to just go back to 1.2, you know, with this cash flow, Jody, that you made. And, I mean, there’s little things like, like, you know, they don’t understand the balance sheet and the income statement. Right? But when you go back and show them, they don’t understand they’re aging for receivables, right. Right. So, can you go back in and shop? If we cut you, you know, your receivables down by 12 days. Here’s the impact of cash flow, and it just blows them out of the water, right? I mean, it’s just like you can’t, you know, you’re worrying about all this stuff.

Doug (00:33:46) – You just collect and they’ve, you know, they’ve always got stuff that’s been out there, you know, 12 months or 14 months or 16 months. And I wanted to a company they had they had receivables out there two years. And I said, okay, put it put a commission plan for the accounting team and give them a piece of every debt they collect. They ended up writing off about six grand, collected about 400,000. You know, it’s just like, here’s your cash right there. Right. So, it’s like it’s all those little things. I would say it’s not any one big thing we do for a company. It’s 100 little things that make a difference. Right?

Russ (00:34:21) – The big thing I think I think the big thing as guys, what’s really cool is we, we get to help people focus because that’s what we do when we go into these businesses. I mean, they’re trying to do everything right. We want to do this and that and this and that and this and that.

Russ (00:34:33) – It’s like, so what does Steve Jobs do? When he went back to Apple, he cut out all of the products that they were developing, and there were hundreds if not thousands of them. He cut them all out. They got down to what, five? And those five products are what they rode to be the biggest company at one point in time that you know, from a market cap perspective in the world, you know, a couple trillion dollars of market cap because they focused in. So, what we get to do is clear out all the noise. What are the things that are going to move the needle for your organization. And let’s get those crystal clear. Let’s assign those as responsibilities for people on this leadership team. And then let’s move forward for the next year. And we’re going to focus on these few things and do them really well. And then we’re going to have a business that’s going to be it’s going to look completely different.  when we get there.

Doug (00:35:28) – I think the advantage of experience is this is that we can go into a company now and based on very quickly, we can assess their people, you know, kind of where they are from an operating position, you know, what’s their position in the market.

Doug (00:35:42) – We can pretty accurately, I think, predict probably down to a quarter when this thing’s going to be totally flipped and humming. Right. And because we are, you know, we went from meeting quarterly to meeting, you know, a couple of times every month. We can accelerate that process so we can turn companies pretty fast. Right. And I think that’s where the experience comes into play. And I think what’s happened a lot in the coaching business out there is you’ve got a lot of people out there doing business coaching that have never run a business. You know, it’s like, I mean, you can kind of teach somebody how to ride a bike, but you’ve never ridden a bike yourself. It’s not going to be the same quality. You never got a flat tire. You’ve never gone up a hill, right? I mean, you just don’t know it.

Jody (00:36:33) – What are the relationship with you guys look like? You mentioned like monthly, or a couple times a week. Is it does it start off strong and then kind of gradually taper off to like a monthly, or is it more like, hey, let’s meet on a regular cadence every x amount of time?

Doug (00:36:50) – Know what we need every month.

Doug (00:36:53) – So on the off months and even a month of a quarterly, you know, maybe you’re having one on one sessions with the CEO. Maybe you’re having one on one sessions with the CEO, someone else, you know, leadership team you’re attending, Elton’s, you know, you’re available for those emergency calls, whatever they are. And just following up, it might be something is simply, you know, we’re a rock star right now for the month, right? You know, those kinds of things, you know, initially, now, you know, it’s okay. I want to be in that meeting where they’re going through the variance report, you know, to help guide them. But, you know, for us people, we didn’t change this our process because we were so smart. They were asking for it. They wanted more help. Right? I think when you’re only meeting quarterly, you’re not sticky enough. Right. And you can’t I think that’s why like the traction model, you know, it’s 2 or 3 years and they’re done right.

Doug (00:37:48) – And I think the clients we have now, I don’t see anybody going away. I mean, we’re there for the long haul and we’re committed. We know their business and we know them.

Russ (00:37:58) – The key is the mindset that this is an investment. Like the so the leader leadership team, they’ve got to understand this is an investment in the future just like your services. If they hire Summit Virtual CFO that is a that’s an investment in their business. Right? It’s actually so from a CFO perspective, if I’m the leader, it’s an investment in peace of mind, because I’m going to know for sure where all of my dollars and cents are and have someone that does this for a living. Help me read the tea leaves to identify what moves we need to make to put ourselves in a better financial position, 12 months from now than we are today. Right. It’s having that methodology, but it’s really key for business leaders to see this as an investment. And that’s those are the people that we really enjoy working with because as they are definitely all in and again, Pennywise pound foolish weed, those people are more difficult to help, because they are always trying to minimize, and in a and avoid expense as opposed to making investments.

Doug (00:39:07) – And Russ and I were both, you know, very high-income people. Right. And we knew what we did. And we charge our clients 6000 a month flat fee. You know, and I mean, could we charge more? Absolutely. But that seems to be a sweet spot where our value is easily understood.  You know, like this one client, you know, I’ve got, you know, with your help, Jody, we’re saving him a quarter of $1 million next year. I’ve been working with them for a month, you know, so, I mean, it’s like, you know, I’m not saying that’s like their all the time, but, you know, we’re going to get great the value you know, that the people need. So, it’s real. It’s really easy for us to you know to get in so well.

Russ (00:39:49) – The differentiator is and the beauty of Doug and I working together is there’s two of us.

Russ (00:39:54) – So we are.

Russ (00:39:56) – Investing the time with our clients and that makes it that makes it so much fun because he’s got experience that’s different than my experience.

Russ (00:40:05) – And so we’re able to leverage that and really, help guide our clients in a more meaningful way.

Jody (00:40:14) – So you guys are both on the calls together. Is that my understanding. Right. Are you guys trade off?

Doug (00:40:19) – We’re on the annuals together sometimes the quarterlies. But then on the monthly, you know, I may be coaching one person, Russ is coaching another.

Jody (00:40:27) – Right.

Russ (00:40:28) – Yeah, we’re doing office hours as well. So in 2024, we’re starting office hours where we are going to have a standing meeting every month, where we’re doing some training on one of the tools that our clients use as part of the pinnacle system implementation to their business. And then do Q&A. So just answering questions because what we find is people get a bit overwhelmed when they think about the system, when they think about what we’re trying to do. And, and we just want to really break it down and simplify it forms. So we create the strategy.

Russ (00:41:04) – Right. So the strategy is the most important aspects. That’s what we do in the beginning. And that’s what we do at the end of every year. So, we create that strategy. The system is really about executing the strategy. It’s the tool. It’s really a tool. It’s like a hammer. It’s the tool we use to execute the strategy that we have so painstakingly created. And then with the objective is to build an execution culture. Right. So we’ve got strategy system execution. And that’s how we work with our clients.

Jody (00:41:38) – I love it, love it. Guys I could talk to you guys for hours. I mean, this has been a real fun conversation. I looked up and couldn’t believe it was. And, for, those that, that listen to the show pretty regularly, this is the time we come up with something fun to ask. And, I’m going to do something a little different. I’m going to, Doug, I’m going to put it back to you.

Jody (00:42:00) – I’m going to put you on the hot spot and say, you know, hey, come up with a question for Russ and I that kind of fun out of nature that you’d love to hear.

Doug (00:42:08) – From About both of you guys. I’d like to know one thing from each of you that very few people know.

Russ (00:42:24) – Go ahead. Jody. That’s the thing about that. I’m an open book.

Jody (00:42:29) – This is terrible. I’m terrible.

Russ (00:42:30) – Yeah. So I’m an open book, man. Let’s see. What is, uh.

Jody (00:42:33) – So very few people know.

Doug (00:42:35) – Or something people

Doug (00:42:38) – Something people don’t know.

Russ (00:42:39) – I was a model in the eighth grade.

Jody (00:42:43) – A model. Tell us about this model.

Russ (00:42:46) – I don’t.

Russ (00:42:46) – I don’t remember how it happened. My mom got me into it somehow. But like when in a. And they actually taught me how to walk like the how to stand and how to walk. And that’s why.

Doug (00:42:57) – That’s why you walk funny to this day.

Russ (00:43:00) – I do, that probably. Right. And I’m a little bow legged; you know.

Russ (00:43:04) – Like I got a pair of boots on all the time. But yeah. So that’s something that model that  I hadn’t.

Jody (00:43:11) – Definitely something pretty cool.

Russ (00:43:13) – Um. Oh I was good at it?

Jody (00:43:14) – But yeah. So, something that, somebody wouldn’t know about me, typically, would be, I don’t know. I told you about the fact that I sold knives, which is, for an accountant. That’s kind of weird. I mean, that not many accounts could probably even say that I dressed freaking like a Hawaiian with a Hawaiian shirt just about all the time. And, Russ, thanks for showing up today in that Hawaiian outfit.  I don’t know. One thing I I’d probably say in this kind of I don’t know if it’s not being a model, this type of thing, but I try to work out every day, which is, it’s been great over the years.

Jody (00:43:56) – And I think it’s kind of kept me healthy. I wish I would do it even more often. And I say every day, probably three times a week, because what I typically get with, with traveling and everything, but that that’s probably the biggest thing, and I would say. But probably the most important thing about,  working out is, is the fact that I’ve been married for 35 years, so I don’t know if most people would know that, but 35 years is a long time to be married, and it doesn’t seem like it seems like we just actually just got a chance to know each other. And that’s the cool thing about that. So I think working out is a big part of that because just kind of keeps your mind healthy.  frustrations, you know, kind of it just keeps you in that, right tune.  and as entrepreneurs, you can kind of imagine the hurdles that you go through and you’re on a business, you know, ups and downs and the fact that she, was doing the exact same thing, running her own business at the exact same time, which is pretty, pretty awesome.

Jody (00:44:48) – So we can kind of lean on each other’s shoulders a little bit when things are going down and kind of pep each other up. So I would say that’s probably the biggest thing is just simply being married, working out, with three or actually, two lovable kids and one dog. I put the third one there, the dogs. We treat the dog as the third person.

Russ (00:45:05) – That’s good family. So some people may or may not know. Why didn’t you get fired as a CPA or an accountant or something like that?

Jody (00:45:11) – Yeah, I got fired.

Jody (00:45:12) – Yeah, I got fired. And I was told that I would never be successful in the county.

Russ (00:45:16) – I love that story. I love that that. Yeah.

Jody (00:45:21) – Called me his office and said, yeah, you’ll never be successful.

Doug (00:45:24) – Yeah, I know that.

Doug (00:45:25) – Just that just makes me, gives me goosebumps, I love it.

Jody (00:45:30) – So well. Thanks, guys. How would people get, a hold of you guys, find you guys if they, uh.

Russ (00:45:38) – Yeah. So own your category.com is our website, my email address: russ@ownyourcategory.com. Doug’s email, doug@ownyourcategory.com 803804 6970 is my phone number. Give me a call, text me whatever. You know, get on my Calendly. Lets set up a time and, Doug and I’ll have a conversation with you. There’s no expectations. We just. We love to help people. And, that’s the first and foremost, we want to figure out can we help you? And the way that we work with people is we like to. We like to take a month or two in the beginning to really get to understand the person and that we’re that we’re helping, because most often it is the leader that decides. They bring us into the leadership team, but they make the decision ahead of time a lot of times. But, we like to get, you know, understand where is that person? How are they personally, how are they, from a professional perspective, what are they feeling? And then and then from there we can help guide.

Doug (00:46:33) – And I think.

Doug (00:46:34) – That’s an important point, Russ, is that we don’t just jump in right away with a strategy. We want to get to know them and know the business first. You know, they might we might find after two months that, you know, they don’t like us for some reason or something, and you don’t want to jump in that big commitment, get in front of the leadership team. All of a sudden it doesn’t work right. So, you know, we found that to be and it’s a little bit less risk for people to do too. But you know Jody, so thank you so much for inviting us to do it.

Doug (00:47:01) – You know and every time, you know, we’re together I you know I love conversations like you know, Russ and I, we do this all the time not podcast. But you know we go on for hours about nothing it seems like. But.

Jody (00:47:16) – Thanks, guys. This has been enjoyable and I’m sure the audience.

Doug (00:47:20) – Appreciate you guys.

Russ (00:47:22) – All right.

Outro (00:47:23) – Enjoy this podcast. Visit our website SummitCPA.net to get more tips and strategy for achieving business success. We’re here to be a resource in this ever-changing industry.