WEBVTT 00:00:00.000 --> 00:00:00.843 Sacha: [music] 00:00:00.843 --> 00:00:03.790 Announcer: This is Marketing Uncomplicated. 00:00:03.790 --> 00:00:06.000 Sacha: Welcome back, everybody. 00:00:06.000 --> 00:00:09.198 Sacha: Most businesses aren't failing because they lack ideas. 00:00:09.198 --> 00:00:11.756 Sacha: They're failing because they lack structure. 00:00:11.756 --> 00:00:15.942 Sacha: Today's guest is someone who steps into business and fixes exactly that. 00:00:15.942 --> 00:00:30.593 Sacha: Owen Carhart is a managing partner of Business Optimization Group, where he helps companies move from chaos to clarity, often acting as a fractional CFO or COO to clean up operations, improve cash flow, and actually make businesses run like businesses. 00:00:30.593 --> 00:00:36.000 Sacha: If you've ever felt like you're busy but not really growing, this episode is totally for you. 00:00:36.000 --> 00:00:37.763 Sacha: So Owen, welcome to the show. 00:00:37.763 --> 00:00:39.283 Sacha: It's so good to have you. 00:00:39.283 --> 00:00:40.134 Owen: Thanks, Sacha. 00:00:40.134 --> 00:00:42.140 Owen: Really pleasure to be here today. 00:00:42.140 --> 00:00:53.570 Sacha: So I'm really excited for this conversation because I think a lot of people listening are in that place where they're working hard, things are in motion, but something just isn't clicking. 00:00:53.570 --> 00:00:59.224 Sacha: And I know that that is the most lucrative business that drops in where you can support them. 00:00:59.224 --> 00:01:02.021 Sacha: But before we dive in, give us the real story. 00:01:02.021 --> 00:01:05.000 Sacha: How did you end up doing what you're doing today? 00:01:05.000 --> 00:01:07.924 Owen: I had my own journey as an entrepreneur. 00:01:07.924 --> 00:01:12.530 Owen: I started my first business when I just out of college in 2009. 00:01:12.530 --> 00:01:14.138 Owen: I could not find work. 00:01:14.138 --> 00:01:19.329 Owen: It was the middle of the big market crash and I couldn't find anything. 00:01:19.329 --> 00:01:23.423 Owen: So I started my own business in finance and investments. 00:01:23.423 --> 00:01:33.000 Owen: And I went through a journey building that company and a journey subsequently after selling that company, building other companies. 00:01:33.000 --> 00:01:35.522 Owen: And I made a lot of mistakes. 00:01:35.522 --> 00:01:46.130 Owen: And I decided after my most recent exit that I would give consulting a shot, see if I liked helping other business owners. 00:01:46.130 --> 00:01:47.435 Owen: And I loved it. 00:01:47.435 --> 00:01:55.000 Owen: And so I decided that this is what I was going to do, likely for the rest of my career. 00:01:55.000 --> 00:02:00.211 Owen: I still own other businesses and I still take opportunities when they come. 00:02:00.211 --> 00:02:06.535 Owen: If something is really, really appealing, I'm happy to jump in because I'm an entrepreneur. 00:02:06.535 --> 00:02:08.133 Owen: I can't really help it. 00:02:08.133 --> 00:02:17.166 Owen: And it's just great to help other people in business avoid pitfalls and show them how to have a good time while making some money. 00:02:17.166 --> 00:02:18.000 Sacha: I love that. 00:02:18.000 --> 00:02:24.582 Sacha: You said something interesting about helping businesses operate like real businesses. 00:02:24.582 --> 00:02:28.455 Sacha: And I hear you say this a lot, not just busy ones. 00:02:28.455 --> 00:02:33.024 Sacha: So what does that truly actually mean from that standpoint? 00:02:33.024 --> 00:02:35.579 Owen: It's a function of systemization. 00:02:35.579 --> 00:02:41.000 Owen: So creating systems inside your business that are repeatable and work. 00:02:41.000 --> 00:02:50.378 Owen: and are going to help you so that you can move through your workflows more quickly and help your customers more quickly and more efficiently. 00:02:50.378 --> 00:02:53.038 Owen: That would be, I say, the biggest thing. 00:02:53.038 --> 00:03:06.539 Owen: It's understanding what your limits are and how to grow and how to create systems that you can step back from and look at from a thousand feet in the air and say, OK, this is working, that's not working. 00:03:06.539 --> 00:03:09.000 Owen: So as an example, if you're a lawyer. 00:03:09.000 --> 00:03:11.580 Owen: You're excellent at practicing law. 00:03:11.580 --> 00:03:14.307 Owen: You know exactly how to practice law. 00:03:14.307 --> 00:03:18.803 Owen: But the business of running a law firm is running a business. 00:03:18.803 --> 00:03:22.342 Owen: It really has nothing to do with practicing law. 00:03:22.342 --> 00:03:24.553 Owen: Practicing law is the service. 00:03:24.553 --> 00:03:37.084 Owen: But running the actual company, understanding what your matter capacity is, for example, and when you're hitting that matter capacity, understanding when to hire someone. 00:03:37.084 --> 00:03:39.000 Owen: That's running a business. 00:03:39.000 --> 00:03:46.712 Owen: And that's what I would say is the biggest thing for people to understand is they have to create systems. 00:03:46.712 --> 00:03:49.136 Owen: Otherwise, they're just juggling. 00:03:49.136 --> 00:03:58.610 Sacha: And a majority of the businesses that you step into, I mean, what's the percentage of folks not having that true system in place? 00:03:58.610 --> 00:03:59.712 Sacha: Is it like 90%? 00:03:59.712 --> 00:04:03.678 Owen: Yeah, I would even say all of them because that's why. 00:04:03.678 --> 00:04:05.000 Sacha: I'm not surprised. [voices overlap] 00:04:05.000 --> 00:04:10.694 Owen: But a lot of them do have systems in place, but maybe they're outdated systems. 00:04:10.694 --> 00:04:12.856 Owen: For example, I just started... 00:04:12.856 --> 00:04:17.685 Sacha: And they're just struggling to keep up with what they're utilizing. 00:04:17.685 --> 00:04:25.973 Owen: They're struggling to keep up, or they've been doing something for so long one way that they haven't modernized it. 00:04:25.973 --> 00:04:29.000 Owen: And that's like cutting with a dull knife. 00:04:29.000 --> 00:04:36.206 Owen: You know, if you, you know, not fun and dangerous, frankly, you should be sharpening your knife. 00:04:36.206 --> 00:04:46.115 Owen: You should be sharpening your tools and using new tools and seeing what other tools are out there to help you become more efficient. 00:04:46.115 --> 00:04:48.818 Owen: So I just started with one law firm. 00:04:48.818 --> 00:04:57.000 Owen: I work with a lot of lawyers, as you know, and they they're still using analog filing cabinets and Excel and. 00:04:57.000 --> 00:04:59.070 Owen: Nothing wrong with Excel. 00:04:59.070 --> 00:05:01.968 Owen: It works if you know how to use it. 00:05:01.968 --> 00:05:03.707 Owen: But they're outdated. 00:05:03.707 --> 00:05:05.529 Owen: And they have systems. 00:05:05.529 --> 00:05:08.344 Owen: They're just systems from the 90s. 00:05:08.344 --> 00:05:13.146 Owen: And there's a lot of businesses operating like that still. 00:05:13.146 --> 00:05:23.000 Sacha: Yeah, and with the play now of AI coming in through the stream, it's just making things more chaotic in the sense of... 00:05:23.000 --> 00:05:24.933 Sacha: you know, what platforms to use. 00:05:24.933 --> 00:05:41.608 Sacha: And it's not like the platforms that, you know, we're used to using, you know, from an operational standpoint, from a marketing standpoint, had not had AI systems in place already, even 10, 15 years ago from automating, you know, your operations and different types of things. 00:05:41.608 --> 00:05:48.315 Sacha: But it's a lack of understanding and education in terms of what to bring in because there is so much out there. 00:05:48.315 --> 00:05:49.583 Owen: There's way too many. 00:05:49.583 --> 00:05:51.033 Owen: That's a big one we get. 00:05:51.033 --> 00:05:52.000 Owen: And then with... 00:05:52.000 --> 00:06:04.770 Owen: With AI, there's also a misunderstanding of what's going on with the privacy and the data and who knows what, what's being used for training the AI models. 00:06:04.770 --> 00:06:21.000 Owen: And so another thing that businesses are grappling with is if they're using AI to execute their tasks or to provide their service or to make their service more efficient is, is my client protected? 00:06:21.000 --> 00:06:23.536 Owen: is my client's information protected? 00:06:23.536 --> 00:06:33.404 Owen: Because if you're signing non-disclosure agreements and then you're putting it into, that you're dumping to AI, you have likely a problem there. 00:06:33.404 --> 00:06:35.185 Owen: You're probably in breach. 00:06:35.185 --> 00:06:36.967 Owen: Some companies don't care. 00:06:36.967 --> 00:06:40.325 Owen: They just want to get what they want to get done. 00:06:40.325 --> 00:06:42.655 Owen: And some are more mindful of that. 00:06:42.655 --> 00:06:46.561 Owen: But it's definitely something that everyone's looking at. 00:06:46.561 --> 00:06:48.000 Owen: Not just the options. 00:06:48.000 --> 00:06:58.611 Owen: There are so many options that can be very, very challenging to discern which one's the right solution for your business, no doubt. 00:06:58.611 --> 00:07:14.000 Sacha: Yeah, I think, you know, it's almost like you have to add a line item to your contract to say, you know, please don't dump any sensitive information into AI, you know, a breach of, you know. 00:07:14.000 --> 00:07:19.104 Sacha: Not breach of interest, but a breach of identity or like whatever it is. 00:07:19.104 --> 00:07:27.043 Sacha: I mean, because, you know, especially with law and with, you know, the medical industry, it is a touchy subject. 00:07:27.043 --> 00:07:32.430 Sacha: And right now, the regulations around AI aren't really set in stone, per se. 00:07:32.430 --> 00:07:34.911 Sacha: And a lot of people are whispering. 00:07:34.911 --> 00:07:36.329 Owen: Lack thereof, right? 00:07:36.329 --> 00:07:40.795 Owen: There really aren't a lot of regulations at this point in time. 00:07:40.795 --> 00:07:42.000 Sacha: Not at all, yeah. 00:07:42.000 --> 00:07:47.232 Sacha: I think Europe is doing a better job than we are with that. 00:07:47.232 --> 00:07:50.780 Owen: I think with regulation, that's typical. 00:07:50.780 --> 00:07:51.380 Owen: Yes. 00:07:51.380 --> 00:07:53.884 Sacha: We're just the Wild, Wild West. 00:07:53.884 --> 00:08:08.783 Owen: We really have had, with AI and the adoption of AI, there are a lot of companies, the leadership maybe isn't ready to adopt AI, but their employees are using it anyway. 00:08:08.783 --> 00:08:11.000 Owen: So we're all clear there. 00:08:11.000 --> 00:08:19.006 Owen: You know, I know a number of of people working for companies who their company has a no AI policy. 00:08:19.006 --> 00:08:36.732 Owen: So they just use the AI on their phone to, you know, so here we have a whole other problem, because if you're as a business owner or not adopting AI, many of your employees may be even if you have a policy against it. 00:08:36.732 --> 00:08:40.000 Owen: And so that's that's another thing that. 00:08:40.000 --> 00:08:49.342 Owen: that people are struggling with keeping up with as it pertains to AI, especially protecting information and whatnot. 00:08:49.342 --> 00:08:50.067 Sacha: For sure. 00:08:50.067 --> 00:08:50.792 Sacha: For sure. 00:08:50.792 --> 00:08:54.255 Sacha: Especially if you're an enterprise company. 00:08:54.255 --> 00:08:57.799 Sacha: I mean, it's just, it's, it's going haywire. 00:08:57.799 --> 00:09:04.000 Sacha: What's the most common thing you walk into when you first look at a business? 00:09:04.000 --> 00:09:06.102 Owen: There are a number of them. 00:09:06.102 --> 00:09:16.144 Owen: So when we're doing, for example, business planning, one of the first things we're looking at is where is the business right now? 00:09:16.144 --> 00:09:21.904 Owen: And so we ask for a profit and loss, a balance sheet, cash flow statement. 00:09:21.904 --> 00:09:28.521 Owen: Many times, not all the time, but the smaller businesses, they don't even have those. 00:09:28.521 --> 00:09:30.000 Owen: So it's like, okay. 00:09:30.000 --> 00:09:31.961 Owen: How much money are you making? 00:09:31.961 --> 00:09:33.596 Owen: And what are you selling? 00:09:33.596 --> 00:09:45.363 Owen: Many times we will, and this is more often the case than not having the financials at all, we'll walk into a scenario where we're like, okay, let's take a look at these financials. 00:09:45.363 --> 00:09:57.000 Owen: The financials are using a standardized chart of accounts that is fine for the CBA to look at and understand what's deductible, what's not deductible, et cetera, but is not fine. 00:09:57.000 --> 00:10:01.725 Owen: in the sense that it's not telling the owner what's going on in their business. 00:10:01.725 --> 00:10:14.524 Owen: The profit and loss balance sheet and the cash flow statement, and there's many other reports that you can look at as well, but those three, they're the big ones, I think, that small business owners are looking at. 00:10:14.524 --> 00:10:17.096 Owen: Those three are the ones that tell a story. 00:10:17.096 --> 00:10:22.000 Owen: They tell us how much we're making and where we're making it should be telling us. 00:10:22.000 --> 00:10:51.000 Owen: where we're making that so if you have only one service then it's fine you can just have the hourly billing for example but if you have multiple products you want to know uh or multiple services that you offer you want to know where you're making your money where's all the money coming from uh what's the margin i'd have lots of businesses that don't know what their margin is um particularly professional services businesses they don't consider margin because it's just like time 00:10:51.000 --> 00:11:00.913 Owen: You have to consider what your margin is and figure out what your margin is so that you understand where your profit centers are, where to direct money. 00:11:00.913 --> 00:11:08.348 Owen: That is the number one thing that I run into when I come into businesses is they don't have meaningful financials. 00:11:08.348 --> 00:11:12.000 Owen: And many times that's the first thing we're cleaning up. 00:11:12.000 --> 00:11:21.450 Owen: So no meaningful financials, meaning lots of money, they're wasted, left on the table, not migrated in the right direction for the business. 00:11:21.450 --> 00:11:29.820 Sacha: So I'm sure you present, I'm sure you've presented some companies with, you know, money, X amount of money wasted, you know. 00:11:29.820 --> 00:11:31.238 Sacha: Lots of wasted money. 00:11:31.238 --> 00:11:34.883 Owen: Lots of, even when we just start looking at recurring. 00:11:34.883 --> 00:11:38.730 Owen: Money being spent in areas that it shouldn't be spent in. 00:11:38.730 --> 00:11:39.330 Sacha: Yep. 00:11:39.330 --> 00:11:45.574 Owen: recurring payments that are not like subscriptions that aren't being used is a big one. 00:11:45.574 --> 00:11:48.824 Sacha: They set up from 1996 and have it canceled. 00:11:48.824 --> 00:11:58.270 Owen: And actually, that's one of the, I'd say one of the biggest advantages to working with us as well is we aren't a cost center. 00:11:58.270 --> 00:12:09.000 Owen: We find ways to save the business money or we save the business money by looking at risk and mitigating against downside risk for the company. 00:12:09.000 --> 00:12:10.730 Owen: Yeah, you have to pay us. 00:12:10.730 --> 00:12:20.697 Owen: But we generally, especially when I find that the financials aren't looking great, I almost always pay for myself or my company pays for itself. 00:12:20.697 --> 00:12:28.310 Owen: And even if you're not using someone like me, you're not hiring a consultant like me, look at your financials. 00:12:28.310 --> 00:12:33.986 Owen: People need to look at their financials and understand where their money is going. 00:12:33.986 --> 00:12:38.000 Owen: And they will find savings just by reviewing it quarterly. 00:12:38.000 --> 00:12:41.965 Owen: they will find it's being wasted because it just happened. 00:12:41.965 --> 00:12:42.785 Owen: That's busy. 00:12:42.785 --> 00:12:43.537 Sacha: Yeah, yeah. 00:12:43.537 --> 00:12:50.919 Sacha: That's such an easy win on your end when you come in and you basically do that audit almost instantaneously. 00:12:50.919 --> 00:13:02.676 Sacha: I'm sure they're either met with somebody's head needs to get chopped off and roll or it's what the heck have we been doing for X amount of months or years for that matter. 00:13:02.676 --> 00:13:05.000 Sacha: It's a scary thought to know that. 00:13:05.000 --> 00:13:15.264 Sacha: And I'm sure it's in the back of their minds because, you know, they're just moving and moving and moving and businesses is going and maybe business is doing well. 00:13:15.264 --> 00:13:27.103 Sacha: So it's not as much as a strain versus it should be because why would you be spending X amount of money when you could cut that in half and actually save it and redirect it somewhere else? 00:13:27.103 --> 00:13:27.703 Sacha: Right. 00:13:27.703 --> 00:13:28.081 Owen: Totally. 00:13:28.081 --> 00:13:30.000 Owen: Yeah, that's that's the biggest. 00:13:30.000 --> 00:13:31.514 Owen: The biggest is that one. 00:13:31.514 --> 00:13:38.706 Owen: The second, I'd say the second thing I run into and what we sort of referenced it earlier is antiquated processes. 00:13:38.706 --> 00:13:39.306 Sacha: Yeah. 00:13:39.306 --> 00:13:43.248 Owen: Antiquated processes, the systems or lack of processes, the system. 00:13:43.248 --> 00:13:44.131 Owen: We just do it. 00:13:44.131 --> 00:13:44.731 Owen: Okay. 00:13:44.731 --> 00:13:49.745 Owen: Maybe we should set up a workflow, you know, so that we, cause you don't just do it. 00:13:49.745 --> 00:13:55.423 Owen: It's likely that you're doing it the same way every time or a very similar way every time. 00:13:55.423 --> 00:13:57.000 Owen: It's just not documented. 00:13:57.000 --> 00:14:01.618 Owen: And it's just not understood that this is the way that it needs to be done. 00:14:01.618 --> 00:14:13.749 Owen: And you can't scale and grow unless you systemize what works, because you will bring other people in who will do it their way and it won't work or you won't like it or your customers won't like it. 00:14:13.749 --> 00:14:18.121 Owen: So documenting what's working and then understanding how that can flow. 00:14:18.121 --> 00:14:22.000 Owen: I went into one business that was spending 40 percent of their. 00:14:22.000 --> 00:14:28.427 Owen: 40% of their revenue was being spent on advertising, which is really, really high. 00:14:28.427 --> 00:14:30.622 Owen: I said, this is really high. 00:14:30.622 --> 00:14:36.814 Owen: I don't think the problem is how much you're spending nominally on advertising. 00:14:36.814 --> 00:14:44.338 Owen: The problem is that you're generating leads and the leads aren't being followed up with, called. 00:14:44.338 --> 00:14:51.000 Owen: You're spending money on something that you have a giant bottleneck in your business. 00:14:51.000 --> 00:14:57.722 Owen: And we don't want to see necessarily the amount of money from a dollar standpoint decrease. 00:14:57.722 --> 00:15:09.835 Owen: We want to see the revenue line increase and make your percentage marketing spend more in line with industry norms, which for this particular client was 15% to 20%. 00:15:09.835 --> 00:15:17.000 Owen: But that's another thing I see a lot of as well, especially when that business wasn't struggling. 00:15:17.000 --> 00:15:19.310 Owen: That business is making a lot of money. 00:15:19.310 --> 00:15:20.080 Sacha: Yeah, I know. 00:15:20.080 --> 00:15:21.442 Sacha: So it's not struggling. 00:15:21.442 --> 00:15:37.077 Sacha: They kind of just put it to the wayside and say, oh, we can probably get to this later, you know, which is the saddest part because, you know, just because you're not struggling doesn't mean that you shouldn't be paying attention to these little details, you know? 00:15:37.077 --> 00:15:42.171 Sacha: I mean, it's the difference of taking you from where you are to the next level, right? 00:15:42.171 --> 00:15:42.771 Owen: Yep. 00:15:42.771 --> 00:15:43.008 Owen: 100%. 00:15:43.008 --> 00:15:43.304 Sacha: Yeah. 00:15:43.304 --> 00:15:51.698 Sacha: It's similar in marketing when people are just hemorrhaging on digital ads and they're like, oh, you know, well, we're getting leads. 00:15:51.698 --> 00:15:59.153 Sacha: And I'm like, yeah, but you're spending $150,000 a month and you're closing like a couple of leads here and there. 00:15:59.153 --> 00:15:59.753 Owen: Right. 00:15:59.753 --> 00:16:07.000 Owen: That's another thing that I find a lot with businesses, especially not as mature businesses or smaller businesses. 00:16:07.000 --> 00:16:32.000 Owen: is on the marketing side like thinking digital is the only place you can market like there aren't other avenues that you have to be doing digital and there are lots of ways to market your business you know you and i participate in networking organizations that's of course one way but there are still trade shows there are still conferences there are people who 00:16:32.000 --> 00:17:01.000 Owen: are looking for your products that are going to these things and people should really like open their mind a little bit when it comes to modalities for marketing yeah it's just like a creative yeah yeah just put a prompt in ai and say how can i how can i find where my ideal customer profile is hanging out and what type of you know partnerships i think are great they're cost effective they're you know low impact uh sorry low cost high impact i mean there's just 00:17:01.000 --> 00:17:03.130 Owen: You really do have to get creative. 00:17:03.130 --> 00:17:18.774 Sacha: So to sum it up in terms of what you come in and what you really see is no financial clarity, no systems, potentially cash flow issues, and maybe the owner is doing everything and he's hired people and they're basically sitting there and not doing anything. 00:17:18.774 --> 00:17:23.217 Sacha: But then that's a whole other different problem in and of itself as well. 00:17:23.217 --> 00:17:26.017 Sacha: Yeah, certainly also financial infrastructure. 00:17:26.017 --> 00:17:29.000 Owen: People lack financial infrastructure, discipline. 00:17:29.000 --> 00:17:36.725 Owen: I know a lot of business owners, they're very, very proud that the minute they get an invoice, they pay it. 00:17:36.725 --> 00:17:40.118 Owen: I train all of our clients, they don't do that. 00:17:40.118 --> 00:17:47.265 Owen: And the reason is because you have to understand when cash is coming in and when cash is going out. 00:17:47.265 --> 00:17:51.235 Owen: You should pay your bills when they're due, absolutely. 00:17:51.235 --> 00:17:56.000 Owen: But if the payment is not due for 30 days, then pay it in 30 days. 00:17:56.000 --> 00:18:21.000 Owen: just simple stuff like having a day of the week that you pay bills you know that yes other one that's that's an easy one the easy fix um and so just building that infrastructure as well people don't think of it a lot of times but building financial infrastructure operational infrastructure like i said systems is super important yeah i i love that because 00:18:21.000 --> 00:18:30.017 Owen: You know, it's it is it's not just, OK, I'm going to go and open up an LLC or an escort because I have this, you know, idea or I have this product or service I'm going to sell. 00:18:30.017 --> 00:18:33.091 Owen: And it's just, you know, I'm going to get to market somehow. 00:18:33.091 --> 00:18:41.954 Sacha: And then, you know, everything is sort of crumbling in the background, but could actually function so much better if you had all of these different types of things in place. 00:18:41.954 --> 00:18:42.554 Sacha: Yeah. 00:18:42.554 --> 00:18:48.000 Sacha: And then, you know, when you have these things in place, when you put them into place, you sleep better at night. 00:18:48.000 --> 00:18:56.926 Owen: Your clients are happier too because you can spend more time doing what you're supposed to be doing, which is delivering products and services to your clients. 00:18:56.926 --> 00:18:58.611 Owen: That's why you're in business. 00:18:58.611 --> 00:19:04.000 Owen: And that's where the majority of your focus should be is perfecting the service and the product. 00:19:04.000 --> 00:19:12.312 Owen: And the only way you can perfect the service and the product is by making sure you're not distracted, putting out fires all the time. 00:19:12.312 --> 00:19:19.688 Owen: You understand how that service or product is getting to the market and ensuring that it's of quality for your client. 00:19:19.688 --> 00:19:21.750 Owen: Otherwise, the client will leave. 00:19:21.750 --> 00:19:24.500 Owen: When the client leaves, then you lose money. 00:19:24.500 --> 00:19:30.062 Owen: And then we have a whole other set of problems if you're not delivering for your clients. 00:19:30.062 --> 00:19:32.000 Owen: It's extraordinarily important. 00:19:32.000 --> 00:19:35.562 Owen: And the systems will help you do that. 00:19:35.562 --> 00:19:40.438 Owen: You won't have crying in the shower moments anymore. 00:19:40.438 --> 00:19:49.250 Owen: Oh, it's like I'm breaking down the up and down roller coaster of a founder, a business owner. 00:19:49.250 --> 00:19:50.562 Sacha: Yeah, totally. 00:19:50.562 --> 00:19:56.000 Sacha: Or there are like many anxiety attacks throughout the day. 00:19:56.000 --> 00:20:02.050 Sacha: Let's talk about something people avoid, which is the conversation around money. 00:20:02.050 --> 00:20:09.992 Sacha: We've been talking about it a lot, but where are business typically leaking money without realizing this? 00:20:09.992 --> 00:20:16.798 Sacha: This could be ineffectiveness, inefficiency, poor pricing, lack of visibility, bad hiring. 00:20:16.798 --> 00:20:19.597 Sacha: I almost think it's all of the above. 00:20:19.597 --> 00:20:23.000 Sacha: Walk me through what you're seeing typically. 00:20:23.000 --> 00:20:33.394 Owen: Well, the first one we've already mentioned, and I wouldn't say it's number one, but since we've already mentioned it, I'll bring it back up, which is not canceling subscriptions. 00:20:33.394 --> 00:20:36.006 Owen: And I think anyone listening, you know, is... 00:20:36.006 --> 00:20:45.645 Sacha: I mean, there had to be an app that was started to help people plug that into their bank account and email systems to understand what kind of subscriptions they have. 00:20:45.645 --> 00:20:47.329 Owen: And that's what the app does. 00:20:47.329 --> 00:20:49.187 Owen: It reviews what you have, right? 00:20:49.187 --> 00:20:50.000 Owen: So like the... 00:20:50.000 --> 00:20:52.781 Owen: The solution there is that's a great tool. 00:20:52.781 --> 00:20:58.344 Owen: But also the solution is review what you have every quarter, at least every quarter. 00:20:58.344 --> 00:21:00.132 Owen: I mean, that's the minimum. 00:21:00.132 --> 00:21:01.921 Owen: That's not what I'm saying. 00:21:01.921 --> 00:21:05.033 Owen: You should be reviewing it every month, really. 00:21:05.033 --> 00:21:12.450 Owen: But every quarter is at least responsible and make sure that everything that you're paying for monthly is there. 00:21:12.450 --> 00:21:17.020 Owen: We here at our business, we keep lists of every account that we have. 00:21:17.020 --> 00:21:20.000 Owen: So if somebody leaves, if somebody, you know, 00:21:20.000 --> 00:21:25.979 Owen: finds a new job, we know what specific tool they may have been using for their function that nobody else is using. 00:21:25.979 --> 00:21:28.811 Owen: And we get rid of the, we don't need the tool anymore. 00:21:28.811 --> 00:21:31.434 Owen: Or we pause it until a new person takes that role. 00:21:31.434 --> 00:21:33.112 Owen: So again, that's infrastructure. 00:21:33.112 --> 00:21:35.315 Owen: Now it's like, okay, what account is that? 00:21:35.315 --> 00:21:37.937 Owen: What's the username and password for that account? 00:21:37.937 --> 00:21:42.605 Owen: You know, having access and knowing what's around, especially when you have other people. 00:21:42.605 --> 00:21:43.497 Owen: If it's just you. 00:21:43.497 --> 00:21:48.794 Owen: It's a little easier, but if you have 10 people, now you have 10 potentially different subscriptions. 00:21:48.794 --> 00:21:50.000 Owen: So are you still using? 00:21:50.000 --> 00:21:51.862 Owen: Are you still using that? 00:21:51.862 --> 00:21:53.649 Owen: So subscriptions is one. 00:21:53.649 --> 00:21:57.894 Owen: Another big one is not reevaluating vendors periodically. 00:21:57.894 --> 00:22:04.819 Owen: And so, for example, whenever I do the CFO work, we are getting insurance re-quoted annually. 00:22:04.819 --> 00:22:07.798 Owen: We don't just stay with the same vendor. 00:22:07.798 --> 00:22:11.223 Owen: We make sure that things change in the market. 00:22:11.223 --> 00:22:16.138 Owen: Prices come down and the price of the insurance typically goes up. 00:22:16.138 --> 00:22:18.000 Owen: But there are times that. 00:22:18.000 --> 00:22:19.421 Owen: the price comes down. 00:22:19.421 --> 00:22:27.741 Owen: Whenever you're getting re-quoted and you have your current carrier and the price is higher, okay, let's take it to market. 00:22:27.741 --> 00:22:31.394 Owen: So people aren't taking things to market all the time. 00:22:31.394 --> 00:22:37.550 Owen: Now, if you have a very special vendor relationship, then I can completely understand that. 00:22:37.550 --> 00:22:41.000 Owen: Marketing, for example, is a relationship business. 00:22:41.000 --> 00:22:48.791 Owen: I wouldn't recommend that every year you look for a new marketer because that can be disruptive. 00:22:48.791 --> 00:22:50.983 Owen: That's not what I'm saying. 00:22:50.983 --> 00:22:54.716 Owen: But that would be a terrible, really bad idea. 00:22:54.716 --> 00:23:07.214 Owen: But reevaluating from time to time, even on the marketing side, every few years, okay, is this relationship still serving us or do I just pay this person? 00:23:07.214 --> 00:23:09.000 Owen: So that's another one. 00:23:09.000 --> 00:23:14.644 Owen: We've found a lot of savings in taking things back out to market. 00:23:14.644 --> 00:23:16.814 Owen: I'll give you an example. 00:23:16.814 --> 00:23:19.246 Owen: We had another legal client. 00:23:19.246 --> 00:23:20.722 Owen: I don't know why. 00:23:20.722 --> 00:23:27.754 Owen: It's because I was working with the lawyers today, so I'm in helping lawyer mode. 00:23:27.754 --> 00:23:35.222 Owen: And they were using a translation service, and they were overpaying by $2,700 a month. 00:23:35.222 --> 00:23:35.916 Owen: A month. 00:23:35.916 --> 00:23:38.000 Owen: So they were very happy. 00:23:38.000 --> 00:23:46.132 Owen: When we were like, you can use this other one and you will save $2,700 a month. 00:23:46.132 --> 00:23:48.500 Owen: Those are two big ones. 00:23:48.500 --> 00:23:50.456 Owen: Hiring is trickier. 00:23:50.456 --> 00:23:54.882 Owen: One of the things you want to look at is... 00:23:54.882 --> 00:24:00.544 Sacha: Like internal hiring, you mean for full-time positions? 00:24:00.544 --> 00:24:01.144 Owen: Yeah. 00:24:01.144 --> 00:24:04.353 Owen: One thing, people will overhire. 00:24:04.353 --> 00:24:06.000 Owen: People overhire? 00:24:06.000 --> 00:24:14.201 Owen: And you want to look at a metric like, this isn't the only metric, but one metric that is good to look at is revenue per employee. 00:24:14.201 --> 00:24:23.348 Owen: Because that can give you a sense and look at what your industry's revenue per employee average is and see where you are on revenue per employee. 00:24:23.348 --> 00:24:28.584 Owen: And that's every employee, not just revenue producing employees, but all employees. 00:24:28.584 --> 00:24:33.000 Owen: And depending on what your average is, you should be able to see like. 00:24:33.000 --> 00:24:44.507 Owen: Based on that number, if it's time to hire someone else, if you're way below revenue, your average revenue per employee, then it's probably not time to hire someone else. 00:24:44.507 --> 00:24:46.131 Owen: You have inefficiencies. 00:24:46.131 --> 00:25:00.210 Owen: If you're way above your average, then you might be pushing your team too hard and it might be time to start looking at bringing someone else on to relieve, you know, let that release that valve a little bit. 00:25:00.210 --> 00:25:04.000 Owen: So that's another one that we were analyzing frequently. 00:25:04.000 --> 00:25:04.600 Sacha: Yeah. 00:25:04.600 --> 00:25:18.000 Sacha: If someone was actually listening to the, you know, the full the full layout of, you know, not not like actually listening, but digging into the action steps, you know. 00:25:18.000 --> 00:25:22.474 Sacha: Someone listening would take this and say, how can I build this out? 00:25:22.474 --> 00:25:25.303 Sacha: So, you know, I don't even know my numbers. 00:25:25.303 --> 00:25:28.987 Sacha: Where do I start, you know, without getting overwhelmed? 00:25:28.987 --> 00:25:31.487 Sacha: So let's try and make this actionable. 00:25:31.487 --> 00:25:34.513 Sacha: You know, what are top three numbers to track? 00:25:34.513 --> 00:25:37.211 Sacha: Cash flow versus revenue, profit margins. 00:25:37.211 --> 00:25:48.000 Sacha: You know, break it down for them how if they were to just go away from this podcast, you know, something that they could tangibly take away to just begin something. 00:25:48.000 --> 00:25:49.217 Sacha: Start somewhere. 00:25:49.217 --> 00:25:54.617 Owen: When it comes to numbers, like what are the top three numbers to track? 00:25:54.617 --> 00:25:58.572 Owen: I mean, of course, revenue is going to be a big one. 00:25:58.572 --> 00:26:05.721 Owen: So most, I would say all business owners at this point, they know what their big expenses are. 00:26:05.721 --> 00:26:08.687 Owen: And this goes for personal finance too. 00:26:08.687 --> 00:26:10.969 Owen: They know what their lease is. 00:26:10.969 --> 00:26:15.000 Owen: They know what they're paying their marketing people. 00:26:15.000 --> 00:26:18.139 Owen: Yeah, the big stuff, they know what it is. 00:26:18.139 --> 00:26:22.474 Owen: But where things get out of hand is with the little stuff. 00:26:22.474 --> 00:26:27.258 Owen: And again, I don't mean to beat the drum, but the subscriptions. 00:26:27.258 --> 00:26:34.657 Owen: These tiny little things, they add up over time into thousands or hundreds of thousands of dollars. 00:26:34.657 --> 00:26:41.085 Owen: So the biggest piece of advice I would give them is you already know your large costs. 00:26:41.085 --> 00:26:44.000 Owen: You know what your monthly overhead is. 00:26:44.000 --> 00:26:50.208 Owen: But what are the things that you're not paying attention to that are adding up and eating your cash? 00:26:50.208 --> 00:26:55.982 Owen: Because it'd be much better to have that $10,000 in your pocket than wherever it's going now. 00:26:55.982 --> 00:26:58.652 Owen: And again, it's just a hypothetical number. 00:26:58.652 --> 00:27:02.315 Owen: But I would say, obviously, you need to track your revenue. 00:27:02.315 --> 00:27:08.089 Owen: And maybe to some that sounds ridiculous, but there are people who don't track their revenue. 00:27:08.089 --> 00:27:12.000 Owen: I had another client who I was like, well, what's your revenue? 00:27:12.000 --> 00:27:13.020 Owen: I don't know. 00:27:13.020 --> 00:27:21.889 Owen: They're making a lot of money, but they don't look at the happen and loss statement [wording uncertain in supplied transcript] every quarter or every month. 00:27:21.889 --> 00:27:29.972 Owen: They ask their accountant for their profit and loss statement at the end of the year to file the taxes. 00:27:29.972 --> 00:27:33.190 Owen: And that's the only time they look at it. 00:27:33.190 --> 00:27:39.939 Owen: Sometimes I walk into scenarios in business and this happens more frequently than not. 00:27:39.939 --> 00:27:43.000 Owen: And I'm like, how are you making money? 00:27:43.000 --> 00:27:50.191 Owen: It's shocking to me that you've been in business for 25 years and you've been profitable for 25 years. 00:27:50.191 --> 00:27:53.574 Owen: And you have literally like everything is wrong. 00:27:53.574 --> 00:28:02.668 Sacha: It's like the vision that I have right now is just like this bullet train and someone hanging on to the fire on the bullet train. 00:28:02.668 --> 00:28:04.924 Sacha: And it's like, OK, we're moving. 00:28:04.924 --> 00:28:08.872 Sacha: But it's like, you know, I could fall off at any moment. 00:28:08.872 --> 00:28:10.000 Owen: Yeah, it's wild. 00:28:10.000 --> 00:28:24.503 Owen: And that's why it's also so fun, because when you're working with these people, there are aha moments, there are light bulbs turning on moments, which those are fun to walk people through. 00:28:24.503 --> 00:28:34.146 Owen: And we've been doing it for some time now, and so I know when the light bulb's going to go off, which makes it even more fun. 00:28:34.146 --> 00:28:36.383 Owen: Light bulb's going to go off. 00:28:36.383 --> 00:28:37.000 Sacha: And now. 00:28:37.000 --> 00:28:38.122 Owen: Yeah, exactly. 00:28:38.122 --> 00:28:38.722 Owen: Yeah. 00:28:38.722 --> 00:28:42.528 Owen: So that's what makes my job so enjoyable, frankly. 00:28:42.528 --> 00:28:57.588 Owen: And I mean, people are making more money, even if they're not making more revenue, because as a function of us, they're putting more money in their pocket and they're being more efficient. 00:28:57.588 --> 00:28:59.671 Owen: And who doesn't like that? 00:28:59.671 --> 00:29:01.033 Owen: Everybody enjoys. 00:29:01.033 --> 00:29:06.000 Owen: I think most people, you know, that's a good feeling when you. 00:29:06.000 --> 00:29:09.597 Owen: when you accomplish something and you make something better. 00:29:09.597 --> 00:29:10.197 Sacha: I agree. 00:29:10.197 --> 00:29:13.254 Sacha: So this is something people are always curious about. 00:29:13.254 --> 00:29:21.168 Sacha: Well, at least I hope they're curious about down the road and if they've been in business for X amount of years, but it's valuation. 00:29:21.168 --> 00:29:24.585 Sacha: And you and I have had multiple conversations about this. 00:29:24.585 --> 00:29:28.962 Sacha: I've heard you talk about this, but I want to dive into it a little more. 00:29:28.962 --> 00:29:31.000 Sacha: How should somebody think about... 00:29:31.000 --> 00:29:35.539 Sacha: valuing their business, especially if they want to sell one day? 00:29:35.539 --> 00:29:37.738 Sacha: Is this revenue versus profits? 00:29:37.738 --> 00:29:42.418 Sacha: Multiple system increased value, owner dependency decreased value. 00:29:42.418 --> 00:29:49.794 Sacha: I mean, what does somebody really need to be looking at to think about what is the value of my business? 00:29:49.794 --> 00:29:51.993 Owen: Owner dependency is a huge one. 00:29:51.993 --> 00:29:55.539 Owen: Well, this goes back to the systems and processes. 00:29:55.539 --> 00:29:58.305 Owen: I mean, it's going to come full circle. 00:29:58.305 --> 00:30:01.000 Owen: People think I'm like a broken record. 00:30:01.000 --> 00:30:01.600 Owen: I am. 00:30:01.600 --> 00:30:03.710 Owen: Systems and processes. 00:30:03.710 --> 00:30:07.524 Sacha: Well, it's almost like foundationally. 00:30:07.524 --> 00:30:10.937 Sacha: It all boils down to a few things. 00:30:10.937 --> 00:30:11.740 Owen: Exactly. 00:30:11.740 --> 00:30:28.000 Owen: So the number one thing is that people mistakenly will not perform even a basic rudimentary evaluation on their business until they're ready to sell the business. 00:30:28.000 --> 00:30:38.596 Owen: This is a mistake because valuation tells you the process of digging into the business and saying it's worth X, Y, Z, whatever amount of money that is. 00:30:38.596 --> 00:30:42.877 Owen: It will tell you what's going well and what's not going well. 00:30:42.877 --> 00:30:56.000 Owen: And if you wait until the last minute to have your business valuated, then you don't have time to rectify what's not going well in order to get the most amount of money for your business. 00:30:56.000 --> 00:31:09.802 Owen: So owner dependency is huge, and we're going to be seeing over the next decade as the baby boomers retire, we're going to be seeing more businesses for sale than buyers of businesses. 00:31:09.802 --> 00:31:23.000 Owen: So this is going to be a classic supply and demand problem where people who have systems and processes in place, businesses where the owner can go to where we live in Florida. 00:31:23.000 --> 00:31:40.788 Owen: for three months out of the year and not work and come back to the business and it's still venerating revenue and making money because they have infrastructure and processes and people, those businesses are going to get higher valuations and the people selling those businesses are going to walk away with more money. 00:31:40.788 --> 00:31:44.715 Owen: Whereas an owner-dependent business is not going to get the valuation. 00:31:44.715 --> 00:31:48.587 Owen: And what we're going to also see is a lot of cash-flowing businesses. 00:31:48.587 --> 00:31:51.000 Owen: And this is very exciting for myself who... 00:31:51.000 --> 00:32:01.731 Owen: Who likes purchasing businesses is that there are a lot of cash-flowing businesses that are just going to shut their doors because no one's going to buy them. 00:32:01.731 --> 00:32:10.560 Owen: And I don't think anybody works their whole life building, crying in the shower, building their business to have to just close it. 00:32:10.560 --> 00:32:12.733 Owen: Some people do, and that's fine. 00:32:12.733 --> 00:32:20.000 Owen: But I think a lot of most people are going to want to get something for it or pass it on to their children. 00:32:20.000 --> 00:32:21.758 Owen: you know, legacy businesses. 00:32:21.758 --> 00:32:27.095 Owen: And when you do that, you don't want to pass on to your, a mess to your child, right? 00:32:27.095 --> 00:32:30.235 Owen: You want to be, you want something that's working. 00:32:30.235 --> 00:32:36.765 Owen: And so, so I don't know if I answered the question there, but I'm waiting too long to do the evaluation. 00:32:36.765 --> 00:32:47.000 Owen: Really, you should, you should be, you should be looking at the value and the systems, the processes in your business five years before you decide you're going to. 00:32:47.000 --> 00:33:11.000 Owen: to sell it so that you can fix everything um that's clean up the books and all that good stuff yeah make sure it's it's accurate because when someone like myself comes in if i'm working on on behalf of a buyer i'm not a broker but i do come in and provide analysis and i'll provide a valuation for the buyer and when i'm coming into your business and it's a it's a mess i'm gonna 00:33:11.000 --> 00:33:13.909 Owen: I'm going to beat you up on the valuation. 00:33:13.909 --> 00:33:15.224 Owen: You want a million? 00:33:15.224 --> 00:33:17.025 Owen: Why do you want a million? 00:33:17.025 --> 00:33:19.934 Owen: This, this, this, this, and this is wrong. 00:33:19.934 --> 00:33:28.659 Owen: Whereas if you work with somebody prior to the sale, prior to selling the business, and you really get, I have less to attack. 00:33:28.659 --> 00:33:36.000 Owen: Or if I'm working on behalf of a seller and I have to justify the valuation, I have defenses and a shield. 00:33:36.000 --> 00:34:02.000 Owen: to to say no this this is actually you're actually getting a deal you know it's one way to do it but um yeah it's really important to to look at owner dependency is huge it's a huge uh problem for uh for evaluation i would say the biggest um and then the second is not having any systems systems and processes yeah yeah yeah yeah what what the 00:34:02.000 --> 00:34:10.702 Sacha: What though then is the biggest mistake people make when they think their business is worth more than it actually is? 00:34:10.702 --> 00:34:13.083 Sacha: Is it like emotional attachment? 00:34:13.083 --> 00:34:13.683 Sacha: Yeah. 00:34:13.683 --> 00:34:17.917 Owen: Like, what do you mean my business is not worth $20 million? 00:34:17.917 --> 00:34:19.331 Sacha: There's ego, right? 00:34:19.331 --> 00:34:20.595 Owen: Attached to that. 00:34:20.595 --> 00:34:29.000 Owen: I've built this over the last 20 years and it's, it's gotta be worth X, Y, Z rather than just understanding like. 00:34:29.000 --> 00:34:31.298 Owen: You know, we're just looking at numbers. 00:34:31.298 --> 00:34:32.446 Owen: There's no emotions. 00:34:32.446 --> 00:34:37.616 Owen: If somebody is going to buy a business, there's no emotion in that or very little emotion. 00:34:37.616 --> 00:34:40.661 Owen: There shouldn't be much emotion because that's messy. 00:34:40.661 --> 00:34:41.261 Owen: Right. 00:34:41.261 --> 00:34:45.601 Owen: Um, we're just looking at the numbers and saying, like, this is what it's worth. 00:34:45.601 --> 00:34:51.000 Owen: So that, yeah, people thinking their business, people overvalue their businesses all the time. 00:34:51.000 --> 00:35:03.094 Sacha: And also, like, I mean, not to interrupt you, but in the VC world, you know, when we hear about startups that are like, oh, it's been valued at, you know, $2 billion or, you know, $12 billion. 00:35:03.094 --> 00:35:11.094 Sacha: And it's like, sometimes in the VC world, companies haven't even made a profit and there's all of a sudden a valuation on them. 00:35:11.094 --> 00:35:15.000 Owen: Well, so tech, and this is happening mostly in the tech world. 00:35:15.000 --> 00:35:42.000 Owen: and i and this is a whole other hour-long podcast frankly but valuation methodologies in that world i have some significant disagreements about the way that they value these businesses um and uh and so again that's a whole different uh topic but yeah yeah you know you don't also like amazon though you you in in some senses it can be justified because look at amazon didn't didn't turn profit for i think 00:35:42.000 --> 00:35:43.718 Owen: Nine years or a decade. 00:35:43.718 --> 00:35:45.586 Owen: I can't remember exactly. 00:35:45.586 --> 00:35:47.603 Owen: Don't quote me on that one. 00:35:47.603 --> 00:35:50.816 Owen: But it's like, how is this worth any money? 00:35:50.816 --> 00:35:52.759 Owen: It doesn't make any money. 00:35:52.759 --> 00:35:55.448 Owen: Well, now I'm making a lot of money. 00:35:55.448 --> 00:36:04.787 Owen: So that's like, what's the potential market in this pro forma type of work, which, you know, that's where that's coming from. 00:36:04.787 --> 00:36:08.000 Owen: But yeah, so people get way over, way over. 00:36:08.000 --> 00:36:11.092 Owen: idealize what the value of their business is. 00:36:11.092 --> 00:36:22.771 Owen: And the simple way to mitigate that, especially small and medium-sized businesses, is to look at and find data on businesses locally that have also sold that are similar. 00:36:22.771 --> 00:36:30.740 Owen: And then you should get a pretty realistic look at what it's actually going to be worth if you compare it to apples. 00:36:30.740 --> 00:36:35.000 Owen: Another issue that people have is comparing apples to oranges. 00:36:35.000 --> 00:36:45.976 Owen: Like my, this is absurd, but you know, like my pizza shop is not, it should not be compared to an HVAC company when it comes to how it's being valued. 00:36:45.976 --> 00:36:47.659 Owen: I mean, that's obvious. 00:36:47.659 --> 00:36:48.259 Sacha: Yeah. 00:36:48.259 --> 00:36:55.561 Owen: There are people who are comparing the wrong thing when they're looking at the value of their business. 00:36:55.561 --> 00:36:59.439 Sacha: So at what point does a business need structure then? 00:36:59.439 --> 00:37:04.488 Sacha: I mean, because people think I'll fix it later as we've talked about. 00:37:04.488 --> 00:37:05.088 Sacha: I mean, 00:37:05.088 --> 00:37:06.333 Sacha: Is it immediately? 00:37:06.333 --> 00:37:08.926 Sacha: I mean, you know, just in terms of. 00:37:08.926 --> 00:37:09.815 Owen: Immediately. 00:37:09.815 --> 00:37:15.741 Owen: If you're starting a business, you want to have an idea of structure right away. 00:37:15.741 --> 00:37:21.370 Owen: And again, like most businesses, like they do have structures and processes. 00:37:21.370 --> 00:37:27.593 Owen: They just haven't like sat down and reflected on what they are and how they operate. 00:37:27.593 --> 00:37:28.193 Sacha: Yeah. 00:37:28.193 --> 00:37:33.000 Sacha: Some people tend to think like structure can slow me down, you know. 00:37:33.000 --> 00:37:33.867 Owen: It shouldn't. 00:37:33.867 --> 00:37:44.067 Owen: Inefficient structures can slow you down, but efficient structures should speed you up and make you better at what you're doing and your delivery better. 00:37:44.067 --> 00:37:45.933 Owen: Everything should be better. 00:37:45.933 --> 00:37:52.000 Owen: I mean, yes, 100% structures can slow you down, but those aren't the right structures then. 00:37:52.000 --> 00:38:02.000 Owen: Now, there are times when management, so we're talking, you and I are looking at it from a business owner's perspective, but there are times where you 00:38:02.000 --> 00:38:16.939 Owen: You create structures to slow other people down, like your employees, or to make sure that your employees are doing things the way you have designed them to be done rather than their own way. 00:38:16.939 --> 00:38:22.804 Owen: Because that might not be the product you're trying to sell to your client. 00:38:22.804 --> 00:38:27.028 Owen: Because you want to have standardization of QA and QC. 00:38:27.028 --> 00:38:30.000 Owen: So there are many types of structures. 00:38:30.000 --> 00:38:57.000 Owen: that will slow employees down but that's because you have a you have a quality concern and you want to have a product that's standardized it's the classic example if i go to a restaurant 10 times and my steak's really good and then i go the 11th time and it's really bad i'm not going back to the restaurant people like freaking like oh well i'm not going to remember those 10 first great steaks but that last one was awful 00:38:57.000 --> 00:38:58.810 Owen: And so I'm not going back. 00:38:58.810 --> 00:39:00.897 Sacha: And it's an immediate I'm out. 00:39:00.897 --> 00:39:01.872 Owen: Yeah, exactly. 00:39:01.872 --> 00:39:06.883 Owen: So you want to mitigate, you create structures to mitigate against that. 00:39:06.883 --> 00:39:13.425 Owen: I was watching some, I don't frequently watch it, but I was watching Bar Rescue the other day. 00:39:13.425 --> 00:39:16.000 Owen: And the common theme on that show is. 00:39:16.000 --> 00:39:18.838 Owen: People not making like the cocktails different. 00:39:18.838 --> 00:39:23.548 Owen: So it's like I'll only have the espresso martini when this bartender makes it. 00:39:23.548 --> 00:39:27.775 Owen: The espresso martini should taste the same no matter who is making it. 00:39:27.775 --> 00:39:28.375 Sacha: Right. 00:39:28.375 --> 00:39:31.036 Owen: So these are just simple sort of silly examples. 00:39:31.036 --> 00:39:34.780 Owen: But the same thing's happening inside businesses all the time. 00:39:34.780 --> 00:39:41.000 Owen: And not to like reference another, you know, like a food industry, but even in the restaurant industry. 00:39:41.000 --> 00:39:50.947 Sacha: Um, you know, there, there are some cases, you know, specifically, I think, you know, with Miami is that when a restaurant first opened, it's, it's sort of like, and before it takes off. 00:39:50.947 --> 00:39:51.547 Owen: Right. 00:39:51.547 --> 00:39:55.920 Sacha: So it's almost like the first of the second week, you can have a really bad experience. 00:39:55.920 --> 00:40:01.374 Sacha: And then, you know, somebody else goes a month in and they're like, oh my God, this place was amazing. 00:40:01.374 --> 00:40:07.578 Sacha: And I'm so reluctant to go back because I went when they first opened and it was terrible and the service was awful. 00:40:07.578 --> 00:40:11.000 Sacha: And, you know, so it's, how do you like, and it goes, it really, 00:40:11.000 --> 00:40:23.714 Sacha: goes back to any business, because at the end of the day, if you don't have your marching orders for your stewards that are going to be serving people, the bartenders, the, you know, the chefs in the back and so on and so forth. 00:40:23.714 --> 00:40:29.123 Sacha: And if you don't have that going right from day one, it's just it's fumbling until you get there. 00:40:29.123 --> 00:40:30.517 Sacha: And it's a domino effect. 00:40:30.517 --> 00:40:34.420 Sacha: And it's it's it's the same thing that we could say with any business. 00:40:34.420 --> 00:40:35.020 Owen: Yeah. 00:40:35.020 --> 00:40:37.989 Owen: And this is why it's incredibly important to have advisors. 00:40:37.989 --> 00:40:41.000 Owen: You don't you want you don't want to live in a vacuum. 00:40:41.000 --> 00:40:51.914 Owen: You want to be able to go to people that you trust, vendors that you trust, whoever, and ask for advice and take feedback. 00:40:51.914 --> 00:40:55.403 Owen: Feedback is a gift to help you improve. 00:40:55.403 --> 00:40:57.997 Owen: And don't take it personally. 00:40:57.997 --> 00:40:59.786 Owen: You need to improve. 00:40:59.786 --> 00:41:09.000 Owen: And having advisors helps a lot, even if they're unpaid advisors, people who you're competitors, right? 00:41:09.000 --> 00:41:13.751 Owen: You can learn a lot from your, your competitor can be your advisor. 00:41:13.751 --> 00:41:17.438 Owen: People have, people have weird views of competition. 00:41:17.438 --> 00:41:24.032 Owen: I, I've, another thing I find when I go into business that we have to crush this competition. 00:41:24.032 --> 00:41:28.570 Owen: Well, I mean, like, what if you have, like, why are you so mean? 00:41:28.570 --> 00:41:31.264 Owen: So like, let's like, take a step back. 00:41:31.264 --> 00:41:38.000 Owen: One of, one of my first jobs before I went to college during the summer, I worked for a rental. 00:41:38.000 --> 00:42:03.000 Owen: company and I'm a competitive person and there was another rental company down the road and I was like oh they must be terrible because they're not this rental company but actually like there were times when that rental company would have too much work and they would give it to the competitor you know we all well here to make so it's like you don't have to be weird about competition you do want to be better than your competition but your competition can also be your ally 00:42:03.000 --> 00:42:06.274 Owen: That's something people need to learn. 00:42:06.274 --> 00:42:12.822 Owen: I mean, that's why mergers exist, because two competitors decide to team up. 00:42:12.822 --> 00:42:16.785 Owen: And those sometimes can be very, very healthy. 00:42:16.785 --> 00:42:18.335 Sacha: Yeah, I love that. 00:42:18.335 --> 00:42:18.935 Owen: Yeah. 00:42:18.935 --> 00:42:20.834 Owen: So that's another thing. 00:42:20.834 --> 00:42:28.329 Owen: Anyone listening that hates their competitor, like, try to be nice to your competition. 00:42:28.329 --> 00:42:28.929 Sacha: Yeah. 00:42:28.929 --> 00:42:29.535 Sacha: Go ahead. 00:42:29.535 --> 00:42:31.000 Owen: No, no, go ahead. 00:42:31.000 --> 00:42:33.535 Sacha: No, uh, what was the last statement? 00:42:33.535 --> 00:42:37.268 Sacha: Because I have a feeling it's going to be a good one. 00:42:37.268 --> 00:42:42.056 Owen: Well, I was just, we had, you know, I also own a weight loss clinic. 00:42:42.056 --> 00:42:48.606 Owen: And one of the things that just drove me crazy was how hypercompetitive our competitors were. 00:42:48.606 --> 00:42:56.000 Owen: And to the point where they're doing things that are unethical, like giving reviews on our Facebook that. 00:42:56.000 --> 00:43:15.000 Owen: they had never been customers giving us bad reviews and this stuff this stuff happens and there's no need for all of that it's a weight we're a weight loss clinic do you know how much market in the united states there is for weight loss like you're not gonna get it all you can't even have that's true 00:43:15.000 --> 00:43:26.297 Sacha: You know, if you think how large the ocean is and if you compare that your ideal customer profile is sitting in the ocean, everybody can get a piece out of it. 00:43:26.297 --> 00:43:26.897 Owen: Exactly. 00:43:26.897 --> 00:43:29.708 Owen: So have a healthier view of competition. 00:43:29.708 --> 00:43:30.703 Owen: Yeah, totally. 00:43:30.703 --> 00:43:32.195 Sacha: I just went on there. 00:43:32.195 --> 00:43:34.824 Owen: It doesn't have to do with valuation. 00:43:34.824 --> 00:43:38.305 Owen: We started with a valuation and it bled into you. 00:43:38.305 --> 00:43:40.082 Owen: Now we're in competition. 00:43:40.082 --> 00:43:42.000 Sacha: Still great points, though. 00:43:42.000 --> 00:43:49.748 Sacha: From a founder mindset shift, what's the hardest shift founders need to make? 00:43:49.748 --> 00:43:51.459 Sacha: Is it letting go? 00:43:51.459 --> 00:43:54.679 Sacha: Is it thinking like an operator? 00:43:54.679 --> 00:43:57.799 Sacha: Is it not being the bottleneck? 00:43:57.799 --> 00:44:00.415 Owen: It depends on the founder. 00:44:00.415 --> 00:44:06.453 Owen: All of those scenarios occur in different personality types. 00:44:06.453 --> 00:44:14.000 Owen: I would say the biggest shift that everyone would benefit from is humility. 00:44:14.000 --> 00:44:17.356 Owen: Understanding that you are not perfect. 00:44:17.356 --> 00:44:18.905 Owen: No one is perfect. 00:44:18.905 --> 00:44:21.487 Owen: Your employees aren't perfect. 00:44:21.487 --> 00:44:25.875 Owen: And when you understand that, then you can improve. 00:44:25.875 --> 00:44:29.490 Owen: If you think you're perfect, you're wrong. 00:44:29.490 --> 00:44:34.911 Owen: And if you're incapable of being wrong, then you can't improve. 00:44:34.911 --> 00:44:38.611 Owen: So number one would definitely be humility. 00:44:38.611 --> 00:44:43.000 Owen: Number two is understanding where your knowledge... 00:44:43.000 --> 00:45:14.000 Owen: stops and when you need somebody else to help you uh it's okay to ask for help and again you're not it's and this kind of ties back to the humility like you okay you have run a business that doesn't mean you're an accountant i thought okay you you have a standardized contract that doesn't mean you're a lawyer right like understanding where you require expertise i would say is is i love that 00:45:14.000 --> 00:45:19.355 Sacha: Because a lot of people are standing in their own way to grow, you know? 00:45:19.355 --> 00:45:20.471 Owen: Well, they are. 00:45:20.471 --> 00:45:21.071 Owen: Yeah. 00:45:21.071 --> 00:45:29.397 Owen: And we, you know, we look for people, we look for founders, owners, management teams that are ready to accept help. 00:45:29.397 --> 00:45:38.174 Owen: It's really challenging when you're attempting to help someone and they still think they should know better, you know? 00:45:38.174 --> 00:45:40.331 Owen: And why did you hire us then? 00:45:40.331 --> 00:45:41.000 Owen: You know? 00:45:41.000 --> 00:45:45.426 Owen: What was the point of this exercise, if you're not going to? 00:45:45.426 --> 00:45:47.197 Owen: Because we're not there. 00:45:47.197 --> 00:46:02.393 Owen: When someone like the consultant is coming in to help you make change, it's hopefully because you realize that there are some changes that will help you to become more efficient, make more money, work less. 00:46:02.393 --> 00:46:08.000 Owen: Many times people bring us in to be like, I need to get me out of the weeds. 00:46:08.000 --> 00:46:31.000 Owen: improved lifestyle because that's what we're all doing this for a reason right it's it's I mean I many of us do enjoy working I enjoy working I'm sure you enjoy working too but we're working as a means to an end which is put food on the table and enjoy the things we want to enjoy because it requires money yeah totally 00:46:31.000 --> 00:46:43.000 Sacha: Owen, this has been super insightful and like a lot of key takeaways, you know, just to really go back and for even my own sake to listen and to know, you know, all the different things that. 00:46:43.000 --> 00:46:58.359 Sacha: well, we'd need to really organize and think about, you know, and I love it because it's almost in parallel to a lot of the things that are done in marketing in terms of coming in, doing an audit, looking at, you know, somebody's, you know, ensuring that their house is in order, right? 00:46:58.359 --> 00:47:12.000 Sacha: I mean, it's foundationally, I mean, you can't really live in a home if the bricks haven't been laid out properly because come a, no matter where that house is built, come a snowstorm, windstorm, tornado, or whatever it is, if there's cracks in the mold. 00:47:12.000 --> 00:47:17.046 Sacha: old or in the structure, then the house is either going to topple down or you're going to sink. 00:47:17.046 --> 00:47:17.646 Sacha: Right. 00:47:17.646 --> 00:47:19.490 Sacha: So, you know, it's all about foundation. 00:47:19.490 --> 00:47:24.536 Sacha: And, you know, I love that you kept saying, you know, I'm a broken record, I'm a broken record. 00:47:24.536 --> 00:47:35.000 Sacha: And it's like you have to be because there are just simple aspects of things that need to be that that keep things in this in a stable manner that if you don't have them in the right place, you're. 00:47:35.000 --> 00:47:48.093 Sacha: either going to keep moving yet at a profitable manner, but you're leaking or you're going to be stagnant and you're never going to get to where you had goals to get to because the systems aren't in the right place. 00:47:48.093 --> 00:47:48.693 Owen: 100%. 00:47:48.693 --> 00:47:51.077 Owen: And I want to thank you for having me today. 00:47:51.077 --> 00:47:54.000 Owen: I've really enjoyed our conversation and I hope. 00:47:54.000 --> 00:48:09.369 Sacha: [Editorial note: speaker and short interjection attribution from 47:48 to 48:46 is uncertain in the supplied transcript.] But before we let you go, because we're not done yet with you, we do something fun where we where we do a rapid fire, you know, and and, you know, we ask you to say one word, one habit, one myth about things. 00:48:09.369 --> 00:48:15.724 Sacha: So whatever comes to mind when I when I ask you, just please go ahead and and respond. 00:48:15.724 --> 00:48:20.970 Sacha: So one word you would use to describe what makes a business successful. 00:48:20.970 --> 00:48:21.857 Owen: Good people. 00:48:21.857 --> 00:48:23.631 Owen: It's two words, I guess. 00:48:23.631 --> 00:48:24.231 Sacha: Yeah. 00:48:24.231 --> 00:48:26.126 Sacha: People, the good ones. 00:48:26.126 --> 00:48:30.283 [speaker unclear]: One habit every founder should build early. 00:48:30.283 --> 00:48:31.152 [speaker unclear]: Humility. 00:48:31.152 --> 00:48:32.022 [speaker unclear]: One myth. 00:48:32.022 --> 00:48:39.368 [speaker unclear]: What's one myth about scaling a business that people need to stop believing? 00:48:39.368 --> 00:48:46.810 Owen: That you need to spend hundreds of thousands of dollars on digital marketing. 00:48:46.810 --> 00:48:50.000 Sacha: Yeah, thank you and amen to that. 00:48:50.000 --> 00:48:52.120 Sacha: Well, Owen, it's been super great. 00:48:52.120 --> 00:48:58.730 Sacha: It was incredibly valuable, especially for anyone feeling stuck between working hard and actually growing. 00:48:58.730 --> 00:49:00.226 Sacha: I love this piece to it. 00:49:00.226 --> 00:49:02.533 Sacha: And it almost comes before marketing. 00:49:02.533 --> 00:49:11.076 Sacha: So I will list everything in terms of how people can get in touch with you and to learn more about what Business Optimization Group does. 00:49:11.076 --> 00:49:13.633 Sacha: So thank you so much for your time, Owen. 00:49:13.633 --> 00:49:14.693 Owen: Thank you, Sacha. 00:49:14.693 --> 00:49:17.000 Owen: And I hope you have a lovely evening. 00:49:17.000 --> 00:49:29.321 Sacha: [music]