Financial Fortitude: Navigating Business Storms with Resilience

Our ability to get access to money is just changed. So it does become challenging for us in these economic climates. So what do we do to improve our cash flow? Driving profitability is going to be a major contributor. If you do not have a positive profit, long term cash flow is going to be eliminated. We go after cash, we bring all the cash in, then we readjust and we make sure that we have a safety net that's available to us. Foreign. Hello everyone and welcome to the Wealthy Entrepreneur Podcast. My name is Bob Goverow. I will be your host today and really excited to have you and to talk about something that is very pressing at the moment and something that I think we all need to make sure that we're handling with care and consideration. And before I jump into the topic today, which is going to be around navigating business storms with resilience, I want to just introduce the podcast here. This is a place where we dissect the elements that contribute to entrepreneurial success, from mindset to leadership, from profits to revenue. This episode again, navigating business storms with resilience, focusing on exactly what we as entrepreneurs and business owners need to understand and focus on right now as we head into different elements of what we want to refer to as a recession. But really what this podcast is for is for all you small to medium sized business owners and entrepreneurs out there who are looking for a little bit more confidence in heading into challenging economic times. And I've got six or seven items I want to touch on today, but really grateful to have you here and I'm confident by the time we're done this episode that you're going to feel more, more comfortable heading into these changing economic times with certainty and with an action plan on what the next steps need to be to position yourself to be successful. So what I want to essentially set the groundwork for is what it takes to have financial resilience in today's entrepreneurial landscape. So what do we have going on? Well, it's, you know, fall of 2023 right now inflation continues to be high, which is driving higher interest rates, which is continuing to drive more stress and downward pressure on the small to medium sized business community. Why? Well, lending is becoming more challenged, like getting any access to borrowing funds is more challenging because we have to show higher profitability and more a greater ability to repay our debts. And for many of us, and I know, me included, just recently went through some refinancing and essentially what used to be good to support, you know, a $2,000 a month cash flow for a repayment now needs to be, you know, five or six thousand dollars. So it's not that you weren't able to repay your loan before. It's that the banking regulations with higher interest rates and higher blended payments is requiring us to, to just show more evidence of safety and being able to make regular payments, which is challenging, right? If the business has been maintaining status quo, profitability has been good, our ability to borrow more money has dropped. Right? So for any of us who have not had, you know, an exceptional growth and profitability this year, watching our ability to borrow money or get access to funds actually drop, even though nothing else has changed, and even though we're fighting through, you know, challenging economic times, our buyers are maybe hiding a little bit more, they're a little bit more reserved with spending money. You know, it has become challenging. So what do we need to do and how can we best position ourselves? And that is really what we want to chat about today. So many of you, if you've been listening to me at all over the last decade or in the podcast, you know, I think we're on episode somewhere around 20 right now, and you've heard me talk about the statistics related to business success and business failure, and I'm not someone to focus on the negative, but we do know that 50% of businesses fail in the first five years. And you know, that's challenging. But statistics show that essentially 90% of those businesses that fail fail because they run out of cash, not because they don't have a good idea, not because they're not profitable. But think, for example, a business that has been financially successful, the economic challenges have come in still profitable in the same way. However, that line of credit that they used to get access for on their annual renewal for two or three hundred thousand dollars is now being shrunk based on the fact that the economic climate has changed. Nothing else has changed, but our ability to get access to money is just changed. So it does become challenging for us in these economic climates. So what do we do to improve our cash flow? Again, 90% of those businesses that fail fail because, not because of the idea or the profitability, but because they run out of cash resources or their safety net and their security blanket in their business has been diminished and eliminated, which causes them to just not be able to move forward. It really is the oxygen to driving a successful business or the longevity of a business for the future. So what are the some things we can do for cash flow management? Well, if you think of cash flow management, one, driving profitability is going to be a major contributor. If you do not have a positive profit, long term cash flow is going to be eliminated. You know, you might be able to get loans and money and you might have personal money to put into the company and people maybe loan you money. But if you don't have profit, eventually all those sources are going to dry up and we're not going to have a longevity, longevity in our business and not going to have long term financial success. So profitability is number one. So how do we become profitable? Well, we need to make sure we're looking at our finances. We need to know exactly how our business is performing and if it's not, what are the areas that need to be changed. We need to look at revenue. Revenue has to be strong. If there's no revenue, then we likely don't have a long term sustainable business either. Revenue's got to be good gross profit margin. We have to be making enough money the quickest way to increase our profit margins, to increase our prices. Right. So the more we increase our prices, the more our profit margin per job goes up. Let's be conscious of this. And then we can look at all our overhead costs and say, what can we eliminate? What can we cut? How can we become super lean as we get into these challenging times? Because if we're driving more profit, it will drive more cash. However, profit is, in my opinion, the number one driver of cash flow. But there are other means to drive cash flow in your business. Number one, if you are selling to a customer and they're not paying you and you're essentially financing that purchase for them over time, the easiest way to get more cash flow in our business is to collect on those debts. Anybody who owes you money, now's a really good time to go and look at collecting. In fact, an even better situation would be let's stop doing work for people that aren't going to pay us, at least on completion. Right. If we get even better at this, we could do it not, not getting paid after we complete something. Yes, we get paid 100% by the time we complete it. But, but you know what, why don't we get 50% cash up front on all these projects so that by the time we're finished, we're just collecting the second half. We're using the upfront cash to fund the cash flow of the business. And if we were to change that right now, right. If we were to go from an accounts receivable situation, let's say you have $100,000 of people owing you money, right. You've got $100,000 of monthly revenue that's coming in. Imagine taking that 100,000, getting that hundred thousand repaid in accounts receivable, and getting 50% of your monthly revenue up front. Not only do you go from, let's say, zero cash right now to collecting 100, but then adding another 150 to go from zero in your bank account to 150 like that within the next 30 days is a pretty powerful position. And if we continue to look at moving this forward, I talked about a 50% deposit. Well, why don't we create an incentive for people to have prepaid opportunities? I just had a meeting with one of our clients the other day. We were talking about how to create a really powerful offer in the landscaping business. And I was talking about the market, who their ideal target market is, and talking about the senior citizen, like my parents, for example, would I. They're in a position now where I don't really want them, you know, shoveling their driveway or manually doing that type of labor. So for me, I'm the ideal target market for that landscaping snow removal company to say, hey, Bob, do you love your parents? Is there an opportunity for you to make sure that your parents are taken care of? And absolutely. If I'm the target market now of an established business owner who wants to take care of their parents, you should be marketing to me because I'm likely willing to pay upfront for the year and what a great holiday or Christmas gift it would be for my parents to have their snow removal paid for. They don't need anything else. But maybe snow removal is something that would really make their life easier, help their back, reduce the risk of injury, just make them feel better overall and have them safe. So maybe I'm the perfect opportunity. I would pay upfront for that related service, and I can give that to them as a Christmas gift before the snow has even landed. So there's an opportunity to again move it from people owing you money to getting paid upon completion to half when you start to let's get paid 100% upfront before we even do any work. And that truly is a great positioned to be from a cash flow perspective. So let's think of some other ways that cash flow is impacted. Well, if you are a business that's buying and selling things, you have inventory. Inventory is a massive drain on cash flow. Right. As we continue to grow our business, we're having to invest more and more and more into having inventory to sell because we want to have more to Sell so that we can satisfy our customers needs, fine, but it's impacting our cash flow. Right? Here's an option for you. If you've got inventory, look at the bottom 20% of your inventory and blow it out, have a sale. It doesn't cost you anything except the opportunity cost to get full profit. Any liquidation of those lower level inventory items that might be getting close to being obsolete, blow them out as a sale and bring in that cash. What a great opportunity to take, you know, the bottom 20%, $20,000 of inventory and just unload it, liquidate it and pull in $20,000 of cash in your business. The other area thinking of it, you know, is capital assets. And this is where I think I see a lot of business owners get into a bit of trouble, you know, financially, profitability, everything seems good. There's money in the bank and they need a new vehicle, maybe to put a new crew on the road or it's for them personally to go and do sales calls. The challenge is if you just take all that profit out of your bank account and you buy this asset, all of a sudden somebody doesn't pay you or you've got an extra payroll in the month, and all of a sudden the profitability gets diminished quickly. You're now on edge to not have enough cash resources. So let's just make an agreement together that if we're going to buy any equipment, machinery, that we're going to have it financed or leased. Right? Let's put that on there as something that we're not going to take all of our working cash flow out of our bank account to buy assets. Let's use the bank's money. Yes, it might be at 6%, but let's use that asset so that we can make sure that that asset is earning money for us along the way. Okay, so we've talked about assets. Let's talk about the other side. And this is the liability side. So we. When I think of where does the cash go? Okay, this is a question that I get for most of my clients throughout the year. Where did all my cash go during the year? Well, here's where it went to. You paid off your accounts, payable too fast. You have debt obligations that are requiring you to make repayments. And maybe those assets you bought didn't make the money that you thought they would. And if they didn't, well, here's a good way to get rid of that debt. So sell the asset. And number three is you've all of a sudden you've done all the things that Bob said, you've brought in this cash, you've brought in cash before you even start the service. You've collected all the outstanding money, you've avoided paying your payables so fast. You've liquidated your inventory, you've got all this cash in your bank account and then you take it out. Because here's what we know psychology of spending suggests that if there's money available in your bank account, us as entrepreneurs will find a way to spend it. And a lot of times when we go to find a way to spend it, we look at it and say, look at how hard we've worked. We deserve to pull this out and go buy it or spend it on something personally, that is not something that we want to do. Hey, it's your money. You can do whatever you want. But from a cash flow planning perspective, if we're getting ready for the winter, we're getting ready for challenging economic times. It's not time to pull all of your funds out and put them in your personal pocket. Buy a new vehicle, do a Renault on your house, buy new furniture. It's not the time for that. The time is going to be there. And it's after the storm has come through. And now we're looking at the storm and we're saying it's on its way. Let's make sure we prepare ourselves. So let's avoid paying our accounts payable out fast. Let's look at any of our debt and say, what is this debt? Is it related to an asset that's making us money? Yes or no? If the answer is no, if it's not profitable, sell the asset, get rid of the debt, right? That way we're going to better utilize our resources on things that are profitable. And two, we're going to get rid of that reoccurring debt payment. It eliminates that outsource or sorry, that outgoing cash from your bank account. And then lastly, let's get ourselves on a fixed sort of draw from the company so that you have a regular amount that you're pulling out of the business. It doesn't become discretionary. And if there is surplus funds in there, let's get it invested in something else. Let's put it in a GIC right now for 90 days. Lots of really good returns, interest for the first time in a positive way for any type of investment. Or get it, just get it out of your bank account into a high interest savings account right now. Lots of opportunity there. So these are some ways that we can look at our Cash resources and, and making sure that our cash position is in the best spot possible. And then to follow up on that, once we've got our cash in a good position, we want to make sure that we have our emergency fund or our safety net. And one of the things I've talked a lot about is in tougher economic times, one, we go after cash, we bring all the cash in, then we readjust and we make sure that we have a safety net that's available to us. And, and I'm going to talk about why we want to do that in a minute, but let's just look at different ways that we can get the safety net. Now I talked at the top of the challenges that have come up with borrowing money from the banks and the financial institutions. Yes, it has been challenging, but you know what, maybe your business is in a position where you've never gone out and put financing in place before. I had a conversation with a client today, 20 plus million dollar trucking company and logistics company in northern Canada and really, really successful individual. And we were talking about the need to increase line of credit. And I believe he had a, about a $500,000 line of credit. Profitable. Cash flow's still good, but we're bumping that up to $2 million. And he's never used a line of credit ever before. But here's what, what we want to do in these times, we want to make sure that that safety net is available. Because guess what happens if your cash flow starts dropping. Your clients fall off, they're not buying as much, your profitability dips. All of a sudden you're starting to get close to the line. You go to the bank and they say, show us how your profits are doing. If your profits are going down, they're going to be more hesitant to give you any access to funds. We want to do it when we're in a strong position to be able to get access to that fund. So in this particular business owner's case, $2 million line of credit that will satisfy the need of any short term working capital. If some of his clients, because he does get paid after the fact, if some of his clients delay payment, he's got this safety net in there that will allow us to, to essentially fund the continued opportunity and benefit inside his business. So creating that emergency fund is fantastic. So that's one way. The other way is we've got all this cash now we want to make sure inside a savings account we've got a, a few months of expenses. And sometimes people ask me Bob, what is the exact perfect number or amount of money we should have in our bank account just to make sure that we're taken care of? And of course, like most things, my answer is it depends. And the reason it depends is that it depends on how risky you are. So for me, I don't have a significant amount of cash reserves in my bank account because I play a little bit of a riskier game. I like to have all of my resources full, fully invested and deployed in building future income where some people would rather have six months of cash that if the revenue died. Right. If your revenue got cut off. Let's go back to Covid March of 2020. If you have no revenue coming in for two or three months, what are your overhead costs? What are the costs for operating? And what I would say is a generalization, three to six months of having that sort of cash in your bank account. So if it's $30,000 of overhead costs a month, I would have 30 times 3, which is 90,000 in your bank account at all times. Let's round it up to 100 and just say that we always want to try and have $100,000 in our savings account and available should something happen. Now, a couple of things we can do with this one. We can constantly monitor our savings account, and if it continues to go up, great. We can maybe take anything above $100,000 and put it into an investment. Maybe that investment is in inventory. Maybe we want to bring in more inventory so we can sell more. Maybe it is that we want to use it as a down payment to help finance the new piece of equipment that we need. That's the new revenue stream in our business. So whatever that looks like as a type of investment, great. But we want to make sure that we have our safety net in place. And on the other side, we're watching our $100,000 and it's starting to drop. 90, 80, 70. We're seeing a trend of the fact that your cash flow is dropping. And why is it dropping? Let's identify it now before it goes all the way to zero. Fix it, flip the switch, and start building back on those cash resources. Okay, here is another thought. So as we are heading into, you know, some more challenging economic times, one of the challenges that we have is that particular buyers may start hiding, hiding away. And I think of real estate, for example, over the last six months, we've seen some transitions in real estate. You know, Even the last 12 months, 12 months ago, we used to see multiple bidders on real estate. And it was going for, you know, 10, 20% over list price that seemed to disappear for the most part. And we're back to a put an offer in and maybe you're accepting an offer that's lower than the list price. And you know, when I look at the real estate market and I've, I've talked with a lot of real estate agents, I've talked with a lot of real estate appraisers, again going through different financing, we definitely have the opportunity to chat with a lot of appraisers. And it seems like there's two segregated markets. One is the market that's the million, million and a half plus buyer. That buyer has not gone away. That buyer is still willing to pay full pop. The appraised values of that sort of luxury value property has not diminished because that particular buyer, that market, has the cash, has the equity to make those deals happen. On the other side though, when we get down to the, you know, the average house of 5, 6, $700,000, the buyers are in tighter financial circumstances, borrowing rates are higher, which makes it more challenging to get access to funds to buy these properties. And these individuals aren't necessarily the top 1% of income earners as well. Average household family income becomes really challenging to be able to finance a house. So what does that mean? Well, that means the supply hasn't necessarily changed or there's more supply on the market because more people are having to sell their house, they can't afford it, and there's less buyers because it's more challenging to be a buyer in those circumstances as well. So what do we have is we have a price drop, just part of the economic model. So two different markets, lower sort of residential value prices are dropping, higher residential value staying solid. Right. And then we've got investment properties, which is a whole nother portfolio. And because of the demand of rent and the need for space, rental is not going down. Which means the value of the properties, which is mostly driven on their income earning abilities, is not dropping either, in fact likely going up. So there's a complete different market there in the as an exact same real estate representative having properties in different markets. And I use that example to talk about the segregation of sales and the target of different markets to be able to diversify your portfolio of offerings to make sure that you're not just offering to one particular group of people or one particular product or service. If we can make sure that we're touching on different markets, we've got a great opportunity to continue to diversify our approach to deliverables and to continue to serve different markets. Again, as a real estate agent, I think if we're in more challenging times, if we're, we were working on that average $600,000 home, it's now dropping in price. That means our commission is dropping in price as well. But if you were in that luxury, higher value, you're probably in a really great spot. However, if you're ready to grind and do the volume game, there may be more opportunity for number of real estate transactions in that lower market space. And again, you know, if you're in that investment space, it's really challenging to find investment properties because nobody wants to give them up. They're just making more and more money and, and likely have been paying for themselves the whole time anyway. So people just don't want to give those up. So diversifying revenue streams is going to be really important. Just like us, you know, we work with different elements of the market. We work with professionals, lawyers, doctors, dentists, other medical professionals. Then we also work with people in the digital marketing space. Digital marketing might be a little bit tougher because businesses might pull back on their marketing costs. So that particular market might be more challenging for us to grow in or to continue to offer additional services to. They may be pulling back as well. Whereas, you know, construction, in that world, it's still very hot and heavy. And in the trades business, people are fixing things up more than ever because they're not buying new. They're trying to be a little bit more resourceful. So that type of business is booming. We want to make sure that we continue to diversify who we work with so that we can. We're not being isolated in one particular market and absorbing all of the risk in that area. Now you might say, okay, Bob, but everybody tells us to niche down, which is super great. But let's make sure that, you know, whatever market we're serving, we maybe have different service offerings that might be more appealing to them in times of economic challenge. Okay, let's talk about risk management. So, so what I want to talk about is the different aspects of risk risk management, including insurance options to protect against unexpected events. So a few things. One, there's personal insurance products. And I want to have a disclaimer here. I do not sell insurance. I just know enough about it to be dangerous. So a couple insurance elements that we want to make sure we're protected on. One, we want to make sure we've got our life insurance in place. Life insurance just protects our family should something happen that maybe they have enough time and resources to put towards selling our business or to tidying everything up. Or maybe they take it on and it just gives them a little bit of breathing room while they get up to speed to run our business as well. A couple other insurance options that I think are really important. Disability insurance. You know, as times become more difficult, if you are starting to have any sort of physical or mental disability as you continue to get older or age, disability insurance will help reimburse or supplement your income. You have to predetermine what, what that number is. But if you go off based on a disability and you don't have any earning potential, disability insurance will help cover that. Also, there's critical illness. So if you get one of the listed critical illnesses, like cancer, for example, there's different types of cancer, of course, but if you get cancer and you're off dealing with your cancer treatment, you will also get access to insurance proceeds to help make sure that everything keeps going for you as well. So those are some of the personal insurance. Always make sure. You know, I've seen a few businesses over the last 12 months where there's been risk that's come up in their business and maybe their business has been shut down. We had one local manufacturing company that had a facility, they were in the hot tub space and their facility burned down. And they were not clients of ours, but it's a very well known business in the area. And I'm assuming they had business interruption insurance. So when the facility burned down and they were no longer able to generate revenue, that's when that type of insurance would come in and it would help support, you know, making all of the costs and paying for all the costs associated with one, getting it back up to speed, but two, paying for all of those costs that the business is incurring. Because if your revenue goes to zero, your millions of dollars of inventory are gone, your facilities burned down, you need to make sure that you have insurance in place to protect you, to replace it, to get it back up to speed, or whatever it looks like that makes sense for you. But insurance is going to be the safety net that helps mitigate any sort of risk associated with that. Let's talk about, I know we talked about cash flow, but let's talk about profitability just for a minute as well. And I just want to focus on, you know, the opportunity that we have to make sure that we're running lean and mean. And what that typically means is, you know, if we've, you've heard me talk about the financial Model before, if not financial model in a business has three components. It's has revenue coming in, it has costs related to delivering that revenue, which we call variable costs. And then there's our overhead costs that don't really change from month to month. Those are our fixed costs. After that we have our business profit. So we have essentially two areas that assuming revenue is good to go or it's fluctuating based on the risk basing on the market. There's two areas that we can really manage well. One is the deliverable costs. So how can we become more efficient with our team? How can we get more out of what our team is expecting? And I'll give you a couple ideas that I think work for everybody. One, make sure that everybody is aligned on exactly what it is they're required to do to do a great job. Friend of mine, Simon Bowen. Hopefully I'll be able to get Simon on the podcast here in the future. Simon talks about a four futures model which essentially says, you know, we have the opportunity to go from where we are now into the future and get four different outcomes. One is we really missed our targets. Two is that we slightly missed our targets. Three is we've just kind of approached reaching our targets. It's been positive, but not fully positive. And then lastly, you know, really achieving what it is we set out for. And Simon would talk about the idea that we are as close to achieving our goals right now as we ever will be. Because if we achieve them, we stay on that line from start to finish and that is our goal. But there's also three other opportunities that if we aren't really focused on how to get there, that we could easily fall into the not achieving goals pretty quickly. So what we want to do is in this situation, we want to make sure that all of our employees are following the futures model which suggests, hey, if you want to be an A plus player, continue to receive performance increases and pay increases and continue to thrive and get opportunities in our organization, this is what you need to accomplish. This is level A. Level B is you still have a job. You might get slight inflation related expense or living cost increases annually and you continue to have a job. Number three is we're below performance standards and you know you're likely going to have a performance improvement plan because you're just not hitting it. We're going to be on your butt to make sure that you get there. And lastly is you're out of a job. And what we need to do is provide that sort of guidance and outline for Each employee, so they know exactly what they're responsible for. And. And I work with Alex Charfen as well, and Alex talks about this as his waterfall model. And he says everybody down the waterfall needs to know what they're responsible for so that when we get back to the top of the waterfall, we can see exactly what the company is creating together. If those individuals don't know what they're responsible for, they won't hit those targets. And, you know, I think of a construction company, for example, we're building a new home. One of your major variable costs in your business is the labor cost associated with building that home. If you don't have, here's where you need to be as far as progress goes on this home. People will just show up to work, they'll start swinging the hammer, and it might not be done for six months. Where, if you had a very sequenced listing of this is what's required. Here's the progress. By this day, the likelihood of people being held accountable to that is much higher. So if we're thinking of our variable costs, holding our team accountable and sharing with them what the objectives are for them to do a good job. People want to do a good job. For the most part, people want to do a good job. Help them understand what that good job means. You will eliminate the variable costs associated with delivering your projects. Bring down your cost, bring up your gross profit. Okay, that's one side. Look at any direct materials that you have right now because of the economic times. We can go into our suppliers and say, hey, listen, we're going to continue to invest in growing. We know a lot of your clients are pulling back, maybe even retiring or selling. We want to continue to work with you and support you on your growth. All we're asking for is a bit of a reduction in cost as we continue to invest in growing our business. I guarantee you I'm at 100% success rate on this. With any of our clients who've done this, the answer has been yes, yes, we will reduce the cost. Now, it might be 1%, it might be 2%, could be 5, could be 10. Ask the question. Push for as much as you can get. Because as those direct costs go down, those materials go down, your profitability goes up. Profitability goes up. More cash in the bank, right? We're collecting the money. We're more profitable. More money in the bank, and the banks are going to be more likely to lend us money if we need it as well. The other component of looking at reducing costs is analyzing our fixed Expenses. And I've said this before, but I'm going to say it again because if you've heard me say it, you probably didn't do anything to it. This is the second or the third time or the 20th time you've heard me say it. Look at your fixed expenses. Look at your regular reoccurring monthly expenses and see which expenses no longer serve you. What CRM platform do you have? What software subscription do you have that you pay for monthly that you don't utilize that is no longer serving you? Get rid of it. There's thousands of dollars in your business for savings that are available right now that, that cash and that savings could be better positioned to put in your bank right now as a position of security or a, an opportunity for greater investment. Look at your fixed costs, eliminate them. Increase your profitability. And now we're in a better position to borrow and also to fund our future projects because we have that cash in our bank account. I shared with you a couple examples of some resilience I shared with you one about a landscaping company that we, that we work closely with. And we had this conversation, you know, last week where we were talking about how the seasonality of a landscaping business that goes into snow removal is challenging because they're different business models, different cost structures. And you know, maybe in the summertime when they get into their green deliverables, their green deliverables aren't as profitable as their snow removal. Snow removal is very dangerous. Long grass, not as dangerous. It's more aesthetic. And you know, for me, I like both. And when we were talking about some of the green deliverables, you know, not only was it not profitable, but there was maybe a loss happening. And one of the things that we focused on was eliminating the giving back. And I talk about the giving back where, you know, we work really, really hard to make a profit in our business. Let's not give it back. What is the minimum break even revenue target that we need to make in our business so that we no longer give anything back? So we focused on a few numbers, a few tweaks, a few adjustments in profitability, a few eliminations of overhead costs. Very quickly got to a benchmark of break even in some of those down season, shoulder season months. So that now we went from a $400,000 profit to a $900,000 profit very, very quickly. So very excited to watch, you know, organizations like that be super resilient. I want to talk about one other example. We have a company that we work with closely that is A an electrical contracting business and a fairly large electrical contracting business. And one of the things we did when the last economic downturn came up was we went to the bank and we got a $300,000 loan. Now, the interest rates were maybe around three and a half percent. But what this did was it allowed the business owners to continue to focus on strategy versus cash management and banking and transactions or transfers between accounts all the time. Just trying to make sure that, you know, payroll was made or that loan payments were made or whatever. We put a. A lump sum of cash in the bank account. And again, probably at 3% per year, at $300,000 was $9,000 a year. That was the cost. What we did is we put that $300,000 into an investment and it was earning about 5%. So let's just say it was 3%. And we broke even on it. But look at the power of that situation. We had cash in the bank that was earning money, but it was also our safety net. If we needed to get access to that, we could. And here was the position that we wanted to be in. That $300,000 was sitting there. And I want everyone to take note of this. It was sitting there because on the back end of this tough economic time is the greatest opportunity that ever happens in our business. When these tough economic times happen, people pull away, they close their business, they sell their business, they shrink their business, they let go, they lay off people. Whereas true entrepreneurs are looking at this as an opportunity to go in and capture market share. So the position of this $300,000 in this account was sitting there to go out and acquire new market share so that we could maximize our growth potential. Because the growth potential that's sitting on the back end of a recession or of an economic downturn is massive. As soon as the green lights go back on, as soon as the floodgates open, people will start spending again. And you need to be the one who's there waiting for them to service them to the best of your ability. Hopefully this has been super valuable. We talked about financial resilience in today's landscape. We talked about cash flow management, creating an emergency business fund, you know, three to six months worth of resources in your bank account. We talked about diverse diversifying revenue streams, even your clientele, risk management, the use of insurance. We talked about strategies for reducing fixed costs. And hopefully I shared with you some examples of how some of those things could work along the way. You know, it's also very interesting. We've created a community called Million Dollar Year on the backside of the Wealthy Entrepreneur. And in that million dollar year members group, we have hundreds of businesses that are included in this that are all going through the same struggles as you are, as I am. We're all together, but a lot of us don't have a community where people resonate with us. And you know, every now and again we have a big win and we don't really get to celebrate because it seems like it's an ego thing or it's boastful because other people don't have those same wins but they don't do deal with the same struggles we do. Our community does. And this is an opportunity for us to give you a little bit of information about how to join that community. So what I'll do is I will make sure that my team includes any information related to joining the Million Dollar Year program. And what I want to do is I want to change up how we have that offer. I want to make sure that if you're listening to this that you're able to go in and you're able to put in VIP Govro VIP as an access code and you're going to get the first month free. And it's going to be so that you can experience the first 30 days of being in a membership just like this with these incredible entrepreneurs just like you, just like me. Sharing what's working, learning from each other, learning from experts such as myself and other industry related experts we we bring in every single week to help support you. So join us. Million dollar Year ca join. Check out our membership. I'll make sure that you get the first month free. The team will include the links below. This has been the Wealthy Entrepreneur. Hopefully we've understood how we can best navigate the storms with resilience in our business. This is what we're here to do is to support you. I know not only surviving, but thriving, thriving when the opportunity arises. If you like this episode, make sure you give it a like. If there's comments that you would like to share, put them in here. If you want to share this episode with anyone, make sure that you share the link, add a follow, make sure that you get access to the next release. I'm Bob Govero, it's been an absolute pleasure to serve you today. Thank you so much and I look forward to seeing you on the next Wealthy Entrepreneur podcast.