0492 | Robert Patin

This is Robert Patton with Creative AgencySuccess.com and you are listening to EA Interviews.

EA Interviews, episode 492, inspiration, transformation, success stories and the imperfect action round. Seven days a week, join Mario Ficcini for today's expert Authority effect interview. Scaling a business. I think it's a fun thing to do and it's a even funner thing to talk about. But have you found some roadblocks along the way? Do you, are you trying to get your first clients? Do you have a book of a thousand and you don't know what to do with it? At every stage of the game there's these things. I remember when I just wanted to get to 5 and then 10 and then 20 and then 100 clients. And you know, we're much further past that now. But at every stage I was, I always asked myself, is this gonna work times 100 and then times a thousand? Post its I assure you will not work times a thousand. They'll get you to about five or 10, maybe 20. And there's so many complexities that we can address in doing all these different stages and, you know, HR teams. How do you coordinate with different stuff? But that's why I'm excited to have Robert Patton on today's episode because he is a growth expert with scaling companies and I'm sure there's a lot of stuff even I didn't cover that we're going to get into and we're going to bring them up right after I thank the sponsor. Every business needs a book, including yours. And that's why I'm launching my new book to help you, regardless of where you think your current writing abilities are. Visit eapublishingmethodbook.com today to learn the seven steps to publish and promote your nonfiction, lead and profit generating business book in eight weeks. Once again, that's eapublishing method book.com Here he is, ladies and gentlemen, Robert Patton. Robert, how are you feeling today?

I'm doing amazing. Thanks so much for having me.

I'm excited to dive in and learn more myself because I'm sure post its are not the only thing that people need to know if they want to go from what was that thing I read you took someone from 350 grand in debt to 1.75 mil.

How do you do that in profit? Yeah, 1.75 mil in profit. I mean that, that probably had more than just post its. You probably had a few rolls of tape and pencils in there, huh?

A couple. You know, there's a Couple of other office supplies involved, I think. Yes.

I mean where, honestly, where do you start with that? Like do you have to. I mean, where do you start?

Well, for that particular story and I mean, I think that every case is a bit different, but in that particular scenario, the first place I had to manage was get them to Cashflow Positive. I mean, they were not only $300,000 in debt, they were actually $300,000 negative in their bank account. So I didn't even know that a bank would allow someone to get to that.

I was going to say that's one heck of an overdraft fee.

Yeah. And they had a great relationship with that, that small business bank that allowed for them to manage it. They. But ultimately the. They needed to get to Cashflow Positive and that was the first thing I needed to manage. And they had significant amounts of debt ap in the rears. So I had to negotiate with vendors, things like that to allow for them to get to Cashflow Positive and ultimately buy as much time as possible so that we had time to ultimately fix everything else that was going wrong within the business for them. They had lost an anchor client and had gone from being in the $8 million range in revenue to below a million in the span of like a six month period of time. Still had a team of about 30 people and hadn't made the decisions that they needed to make and were in a really bad spot. And so it was pricing adjustments, positioning adjustments. How are you going to go about bringing in revenue very quickly? I mean there was, it was a journey to say the least.

Can you walk us through that? Because I'm just astonished that.

I mean I've always seen these shows where it's like they turn around stuff. I mean that's a pretty. You're talking about a 2.2 million delta that you had to spin around.

I mean, so you said work on the offers, adjustments, bring revenue in. Were you able to keep the whole team on board or did you have to say, hey, we're going to bring you back in six months. This is what we're trying to do. I mean, what was the first step? I mean, other than not freaking out? And how do you not freak out? Because that sounds like I know people that lose to cool when they get the wrong bag of chips in their grocery order or something and it's like.

Whole other ballgame.

Hopefully those people will. I can't imagine how they survived during the pandemic with all the delivery errors that I experienced. But anyways, as I mentioned, to begin With, I mean, the first thing that I did was try to understand exactly how much time I ultimately had and how much time could I create really from a cash flow perspective. Largely, I was able to get them to cash flow positive in about 45 days with negotiation with vendors. Every single outgoing payment, aside from payroll and basic necessities keeping the lights on, were completely withheld and negotiated with everyone from banks, banks with credit lines to their existing sort of fixed term loans were all renegotiated. The terms were renegotiated, allowing for me to get to the largely to a cash flow positive position. The issue that the agency had was that they, the owner had significant relationships so that we could tap his network to be able to bring in revenue rather quickly. But the issue that they were facing and why I was saying that there's nuance to every story in every business, right? I don't think it's a one size fits all, but for them, the agency owner had quite a significant network and had been in the industry for over 30 years. And the issue that he was facing was that he was looking to sell some substantial size new.

Campaigns, but that with the size of revenue that they were currently at, selling a $2 million campaign to a Fortune 500 was nearly impossible because you wouldn't be able to get past risk. So what we ended up doing was selling a larger campaign, but just a component of a larger campaign. So selling 20, 30, $50,000 deals with becoming an approved vendor within the organization, getting past risk, managing all of that, and then allowing for us to expand the relationship from there. So we sold smaller truncated projects that they weren't used to ultimately selling to then sell the larger deal once we got past that initial risk phase. So over the course of a 24 month period of time, we grew past $10 million in revenue from that below $1 million line. The biggest component from that really high debt place that they were in was I completely changed the way that they were positioned in the way that they sold as well as their entire pricing model. So they're, they're, they are in the experiential so events space. And.

Historically speaking, you've got gross margins that are sub 30%, sub 25% and I was able to get their gross margins to 68%, which is, which is significantly higher. That allowed for them to be tremendously profitable. So I built a way that we were positioning the campaigns completely differently that allowed for them to be assured that what they were selling, that they had every single expense covered. They weren't a cost plus model shop anymore. It was all fixed bid. And for the industry at the time, that was completely unheard of and allowed for us to really be able to get some substantial margins.

Yeah, it sounds like really turn it around. For anyone who doesn't know, could you elaborate on what you mean get past risk?

Yep. So within a larger enterprise company, you have the legal department, Right. So they've got a risk management team that's looking at the risk profile of any new vendor, any new contract that they're entering into. And so that risk department's purpose is to assess whether, entering into this new relationship, whether there's a substantial risk. And when you have a business that has substantial amount of debt, they are revenue numbers are not where they needed to be and it was too much of a percentage of revenue. So anytime you've got a Fortune 500 that sees that they are going to account to more than 30% of your revenue, you're going to be hard, hard stretched or hard pressed to be able to get past that risk assessment team because the risk is too high. They're not sure whether you're going to be able to deliver. If you weren't able to price this appropriately, are you going to go out of business? Are they putting too much money into an area that's ultimately going to cause them undue burden and risk to them?

Like you were saying, if I heard you correctly, you said dropped from 8 million down to 1, which is like what, 80, 90% loss. So in that scenario, prior, the risk would be they were past 30% of the revenue.

Correct. So beforehand it was okay and they were selling campaigns that were on the larger side but were no longer in a position to be able to do so because of where they were. But they had largely in the model that they were working with before that, that cost plus model that there was, in a lot of instances it was a cost plus model but with a cap. So they would go over budget, out of scope, all of that. And largely their margins were razor thin. I mean, industry wide, typically speaking, you're talking in a 5 to 12% on the high end in their net margins and they were on the low end of that margin. And anytime they made a mistake, it cost them substantially, which amounted to them being in a substantial amount of debt when they then lost that anchor client which just spiraled from there.

That's not a lot of wiggle room. It astonishes me when people are like, I'm going to do. And it's basically what I call the Walmart model of Underprice, everything. And they leave out the component of, yeah, Walmart has a 1%, 2% margin, but they're doing billions in business. If you have a dozen clients or even a hundred.

Good luck with 1 or 2%. I mean even 5 or 10. I'm like, I'm getting anxious hearing that.

Mm, 100%.

And you said you got 68%.

In their gross margin. So they were above 20, 25%, 25 to 30% net margin, but their gross margin was 68%. Wow.

So elaborate more on this because I love this idea. You're saying you took them from, instead of selling a two, $3 million campaign, you broke it up into a series of 10 to 15, 30, 40, $50,000 segments.

Correct. So they were in events. Right. So they, what they were doing primarily was focused in the Hispanic. After joining, working with them, they were focused in the Hispanic marketing in activation. So a lot of it was working with CPG products in and sampling really. So they were going around to different grocery stores, things like that in the Hispanic market. And so let's say that they were going to work with.

The Coca Cola or a Nestle of the World, for example. Right. They would sell a component to an activation, so would have no direct competitor to that particular brand and sell a component to that activation rather than an entire campaign that was focused specifically on that brand. So allowing for that brand to get in front of the consumer and experiential and sampling, it's the goal is to be able to influence the consumer at the point of decision while they're at a store to buy a product, rather than buying one, they were buying another because they sampled it and they enjoyed it. And largely we were exactly. As you just mentioned and I mentioned is that they were able to sell components to the event rather than the entire event being branded and sponsored by that one brand.

Yeah, that's smart. I.

When long time ago when I actually did modeling and promotional stuff, and I remember stuff like that where you'd go into the store and you'd be the promotional models. And this sounds like the back end of it of going, okay, we have new product xyz. Do you want to try it? Do you want to sample it? Do you want to do this? And you know, whether it was a big event that was in person like a fair, or it was a country hoedown or something like that, or sporting event or inside of a store, it's a great way to do it because like you said at the point of sale, hey, have you tried this no, here, here's a sample. Oh, here.

I bet they were doing the whole, hey, have you tried it? And they put in their hands, well, they're not going to give it back at that point. It's in the cart. You just sold it. Especially when the register is right there.

Exactly 100%. I mean, and then largely a lot of these events, like we would tour to music festivals and fairs and all sorts of things. A lot of it to begin with was in front of grocery stores at that point.

Cpg. For anyone that doesn't know.

Consumer packaged goods.

So what other industries other than the CPG industry have you helped people with? Because I know as a fractional cfo, you could really help anyone, couldn't you?

Yeah, I concentrate working with creative agencies. So anyone that's in marketing, campaign development, branding is who I focus on working with. And that's where my career has been now for over 10 years. I mean, I've worked in finance for a long time now, but I found my love in marketing and working alongside creative people.

Out of all the people you've worked with, is there anyone that would top this success story?

I mean, there's a couple of them that were in that sort of space. So to begin with, at the early stages of my career post working at this agency, I developed a specialty working with insolvent agencies and helping them grow past it. So there was other scenarios where another agency that I was working with was in a similar situation, substantially even more in debt, and grew back rather substantially in a. I worked with them for about three years.

Going from a place where the comment that I heard from the owner about eight months into working together was, Robert, I just want to thank you. If it weren't for you, we would have lost the agency. If it weren't for you, over 50 people would have lost their jobs. And if it weren't for you, I would have lost my house and I likely would have lost my marriage. He was in a really, truly dire strait and was able to grow that. That business as well that that agency to substantial profitability and an over 30% net profit as well.

Wow, that's incredible. Not just another turnaround, but saving all those jobs and then, you know, his marriage and house and everything.

Because that's the stuff that keeps people up at night.

Exactly. And that's the thing that gave me the energy to do the work in the first place. Right then I knew that I was having impact and what I was doing and what I was laboring over was not only meaningful to the owner but also to all the employees that worked at the organization as well.

Yeah, I don't think there's anyone out there just going, oh, I made 10 million this month, let's make it see if we can get another one or two. And they're losing sleep. But when it's like your house, your car, your wife, your business, like everything's on the line.

So for anyone listening that. Were you going to say something?

I was going to say, for anyone listening, how do we help them not get to this point where they're going, this is a complete mess. What can they be doing now? Like, what are a couple things they could be doing now? Maybe even as they're listening to this going, okay, we need to check the books, we need to fire that person, hire this one, change the offer. Where would you start if you were just someone walked up to you right now and said, here's the problem or here's my business. I don't even know if there is a problem because you know, it never starts until it's like three months in.

Oh, I mean, of course the career accountant would say this, but I mean, I would say you need to get into the depths of your financials. Right. Really understand not only what has happened, and this is where a lot of especially small business owners that created these insolvent situations is that they avoided looking at what their financial records really look like. And not only looking back to what has happened a month ago or two months ago or last quarter, but looking at what's happening in the future. Like what profitability do I have next month, two months from now, three months from now? And what does that cash flow actually look like? There's so many instances where I've seen businesses just get themselves into really dire situations by taking on debt without considering what exactly is the roi, what is the plan around that, how exactly am I going to manage this? What, what impact am I supposed to have? They're in a very sort of reactive mode and you need to be more proactive about managing where your business is ultimately headed and not just looking at what happened last month, but looking at what's happening next week. Because we can't solve for last month, but I can solve for the future.

Do more financial forecasting, it sounds like.

Exactly. And then manage things to a budget too. Right. Really understand what you should be spending when you should be spending it. Having scenario oriented budgets with every client I work with on a one on one basis and I'm sitting as the financial executive, there's scenario planning behind everything. So if this revenue marker is ticked over, then this budget is unlocked and then we can spend a spend here. Right. And there's multiple different scenarios from here's our flat budgets, our operating budgets, our goal budgets, our stretch budgets, and really understanding exactly how all of this kind of plays into each other so that you can grow to that next point of scale and when are you investing into future scale and really understanding how that actually plays in the dynamic of that investment into the business.

Break down that scenario planning you just mentioned, how do you go about that and how often should you be doing it? Monthly, quarterly?

So I mean, largely doing it at the bare minimum, doing it semiannually is what I would recommend. So you start the beginning of the year having what you, your, your budgetary planning meetings. Right. What, what revenue did we hit this past year? What can we plan and expect for this upcoming year in any scenario? Even businesses that I see that are growing 2, 3, 4 times year over year. I am still not planning an operational budget from more than a 15 to 20% increase in top line revenue. And then I also want to look at budgets and I'm getting kind of into the nitty gritty here now a little bit, but I'm looking at it from both a top down revenue to what expenses can I afford and then what are my expenses and what revenue do I need in order to support that? So looking at it from both angles and is this something that I can actually kind of hang my hat on and reliably be able to spend against? And then looking at what are we looking to accomplish and what are the markers that allow for me, in a 60 day period of time, I've hit this benchmark from a revenue perspective. I now can spend in this particular hiring people, starting a new marketing initiative or channel to expanding office facilities, to buying a new car even.

That's what you were saying when, when you hit the markers, it unlocks the next budget.

Exactly. And then you want to true it up every, at a minimum of every six months, my clients, I'm typically doing it once a quarter. But you're chewing up what has actually happened this past quarter. Are there any adjustments, is there anything that we need to plan for and augment what we had in the plan to begin with?

How often do you get into redoing the offers and the services and products and stuff like that, where you're saying, okay, here's the revenue we're at, we're year over year, but we want to increase it? Do you help them? Additionally? You said you like the marketing. Do you help them acquire new sales as well? On top of planning all this out and keeping them on track?

So I'm going to take a step back and then answer. So the thing I love about finance is that to me, it allows for me to have kind of my finger on the jugular of the business and I can see what's going right and what's going wrong. I read a financial statement like a story at this point of, hey, I can see that there's operational problems from a delivery perspective. I can see that there's a marketing problem, there's a sales problem here. There's this kind of issue going on here that allows for me to focus my time where it needs to be focused so that I can solve for the issue that that particular business is having. Right. What is the issue that we need to solve right now? What is that priority problem? But to answer your question, how often do I get into what exactly is that agency doing and how are they offering their services and exactly how are they positioning it? Every single client. I get into that with every single client.

I like how you said pulse on the jugular, not on the pulse.

Like there's a lot of places you could have it. That's a pretty main one.

Yes, it is.

So how does that Just keep walking me through it. So you look at this, you can read it like a story. That's fascinating, by the way. I might come back to that and have you. Could you, you know, let's do it now. Could you teach us a little bit? Like, if you've never looked at one, or if you look at one every day.

What are the key KPIs on it that are most important.

If someone's overlooking this, Because I know of everyone I've talked to over the years, and I think you would know too, how many people actually look at this unless they're you?

Not many. The vast majority of financial statements are utilized for compliance, for filing a tax return at the end of the year and is otherwise never looked at. And if they do, they're looking at the bottom number and the top number, but nothing else in the middle and everything in the middle. The financial statement is where the important information is.

I was just going to say it's like the Oreo donut or something where it's like, don't Skip the custard.

100%. I mean, here's the number one thing that I will say, because every single business is largely different. So I don't want to give a KPI that's going to send someone in the wrong direction. Agencies. I can give you kind of basic KPIs that you should be looking at. But for largely what you need to be thinking about is your financial as a percentage of income. So for every single line item that you have on your financial statement, what is that corresponding expense as it relates to income? So knowing and understanding what are the thresholds, what are the KPIs of how much should I be spending in HR and administrative payroll, what should I be paying in sales and marketing, what should I be paying for delivery? My cost of goods margin, my gross margin. To understand where that, that, that issue is. I mean, I so often see small businesses not investing enough in sales and marketing and potentially overpaying themselves. Things like that that need to be augmented to allow for the business to be sustainable.

I love that. Thank you for that expert authority insight because yeah, you could. I've seen people where they're. They get 2, 3, 5, 10 clients, they get all excited and they start hiring like 90 people, maybe 20 or 30 or a dozen, whatever. But it just seems like I go, you know, you got there without them. Right. Like, why do you think you need. And maybe you need a few. But same thing with the marketing. Oh, we don't have any money for it. Yeah. Because it's all in the coffee machine and all this frivolous crap that doesn't add any bottom line and isn't an rpa.

Can I have a cup though? That does look good. I mean.

It'S interesting.

Don't attack the coffee machine. I'm a coffee fanatic. But anyways.

Yeah.

What kind of coffee? Espresso. I grew to become addicted to coffee in Italy, so I'm an espresso guy.

The.

Thing that I would say that a lot of people get stuck on. What you just described when it comes to hiring people is they're hiring the wrong people very often. So what? There's this.

How do we mitigate that?

And.

The item is that they're hiring the wrong person because they're trying to replace themselves rather than actually looking at what are the components of themselves that largely is the least valuable component to the business today, or which is largely and likely the easiest thing to actually hire for. It's the easiest thing to train for. It's the easiest thing to remove from your plate and to delegate. I hear so incredibly often. I don't want to hire people. It's such an extreme pain. And don't get me wrong, hiring people can be like any person is. And can be any human relationship can be difficult at times, but often a lot of business owners are trying to replace themselves and you've got 20, 30, 40, 50 years of experience and then you immediately go to try to replace your experience with someone else. It's, it's expensive, it's difficult to delegate. They're not going to do it the way that you're looking to do it in the first place. That expert authority that you have and not recognizing that you're looking for a unicorn.

And if that unicorn exists, they probably started their own business. So they're extremely difficult to find and obscenely expensive. And you're setting yourself up more often than not for failure and you're spending more than you should and it's just not scalable. You need to truncate your experience into different components and then hire for pieces of you, not the whole you.

I so appreciate that. And I've had multiple people tell me recently that even if you do hire someone and they're good, they're going to take two to three times longer than you do to do the same thing.

And I want to break down since you're the financial guy, when you say obscenely expensive. Now there's a lot of people going, oh, you need to invest in yourself, in the business and this and this and this and this. But I'm with you that if you're, if Your company charges 100 or 200 or 300, 400, 500 an hour or thousand and you're paying someone more than you're taking in.

It'S probably not good financial, financial math.

No, it isn't. And here's where a lot of people get stuck, especially in the service based industries is that yeah, your, your loads faster because you have. It becomes muscle memory for you, right? You've done this a million times. It's like the back of your hand. And so you've priced based on you doing it. And then you didn't adjust your price when you hired people. And the thing that ends up becoming a problem is that you didn't, you're not managing scope as well as you may have before, or you didn't manage it well to begin with. But when you worked those extra hours in the evening and sacrificed your personal life, which I'm not advocating for by the way, you didn't have an additional cost, right? It was your time that it cost. But when you hire people, there's an actual cost, dollars and cents cost to that and you never price adjusted for what that actually looked like and made sure that your pricing model works, which is as quote a foundational elements that I work with every single client is what is your pricing system? That's make sure dollars and cents, black and white. Does it actually pencil out and not like, let me just pie in the sky, rosy colored glasses, opinion of what time should take, but what does it actually take and what should we be charging for the amount of time investment we're making into this particular deliverable.

How many people do you find are actually tracking employee time to the degree they probably should and their own, that they're doing it for themselves too. Not just holding the golden magic stick over everyone going, you didn't turn in your time chart.

You're not doing it as good as.

You'Re probably not doing.

How quick are you doing it? I don't know better.

I'm probably not going to make a whole lot of friends here. If you're not tracking time, you absolutely need to. And that is a hill I will die on. It is especially in the service based businesses you, you need to know that is what you're selling, right? It would be akin to you selling, I don't know, these tangible product that I picked up in front of me. For those of you listening audio, they know exactly how much every single part to what they're selling costs. And your cost is your time, your payroll, your cost of your team members. And if you don't know what that is to actually deliver your service, then you're, I don't know how you're basing your, your pricing in the first place. It just doesn't make any sense. You can identify where the blocks are, what, where you should invest your time from an operational perspective, how to make yourself more efficient, what to automate, whether to invest in a piece of software because it's going to have this kind of return on investment.

The vast majority of them are not doing it. Well, the vast majority of them are doing it. I do see quite a few of my clients coming on that they are tracking time. But here's the rub, they never look at tracking it the following week. Oh no, they'll, they'll look at it, but they're tracking it. They're entering their time a week later, right? Like they'll enter all of their time for last week on Monday. Like, I don't know what I did this morning. How am I going to know what I did last week? It doesn't make any sense whatsoever that that's how they manage their time. I mean for me, I am so incredibly regimented in Total type A this way. But my calendar is to the minute of what I was working on something and so my time can be entered for my calendar now by my administrative team. But every single thing that's done should be accounted for. You need to know where you're putting your time and even from a just where should you invest that next hire? What, what can you delegate? What. What are you going to utilize for the basis of that as well? It's so incredibly important and if you're able to get your time tracking to 85, 90%, I will count that a huge win. But you need to be doing it daily, doing it ideally in real time and utilizing that information to base loads of decisions. Who are you hiring next? What is your team utilization? Is your pricing right? Looking at postmortems of your projects, When a project comes to an end, did you charge for it? Right? Did you not? Did you go over scope? Did you not? And being able to learn every single time. This particular quote has been.

Credited to a number of different people, so I won't give the names. But anyways, one of my favorite quotes is to never let a good crisis go to waste. And unfortunately the vast majority of businesses just ignore the issues that come up every single day and just continue to solve the same problem over and over and over and over and over again. That ultimately kills them. The owner gets burnt out, they can't handle it anymore and they don't want the business and they hate their lives and they may even continue but are not happy. And it's because they just didn't solve for it. They didn't implement a process. Every single time an error in my business happens, it happens regularly.

Part of life, right? It's called improvement. And I look at first question, was there a system or a process to have solved for this problem? Yes or no? If no, then create if yes, would the system have solved for this problem? Should it have caught it? Yes or no? If no, fix the system to solve for it. If yes, then it sounds like did the person that was following this process, were they aware of it or not? If no, then make sure that they're aware of it. If yes, then it sounds like it's a person problem. So incredibly often we're just like, hey you, you need to do this better and then just expect them to do it better. But don't give anyone the tools. It's like hey, go build a house, but I'm not going to have you give you any hammers or wood or nails to do so well. It's kind of your fault, but that. That didn't go the way you planned.

This is so surreal. I was just saying the other day, very similar. You're much more eloquent, but life gives. If you don't learn the lesson, life will keep trying to teach it to you.

And I'm equating my life is to.

Say anything of it.

Yeah, you know, you keep. I keep running into debt. Well, maybe fix it this time. Maybe hire some to help. Maybe get a coach or consultant or mentor or. You know what I mean. Like, I agree. Don't let the crisis go to waste. How are you going to go 10 years and still have the same problem? It's not the team. But we can't tell anyone that, can we? It's a good thing no one can hear us right now.

I do.

I've said the same stuff on social media in the comments. I'm like, please don't tell anyone this, but I'm playing a joke. This post is complete BS and I'll leave it in the comments. I'm like, keep it between you and me, but no one looks.

Seriously.

There was something, even the other day, I said, nothing starts with an N and ends with a G. And everyone's going, nog, nag, na. No, nothing starts with an N and ends with a G. And it was like dozens and dozens of people coming up with other words. And a few were like, nicely done.

So when it comes to the time tracking and all this, and that's why I asked you that, because I go, I doubt it's above 10 or 20% just working with hundreds and thousands of people with publishing and marketing ourselves. When I'm asking them certain questions like, hey, who would have this list? Or who would have that? And I remember one, they're like, oh, we need their phone numbers. I'll be back. And they came back with. I'm like, where's he going? He's like, oh, they're in the trailer out back. What? They had, like, 30 years of records in, like, boxes in the trailer out back.

I'm like, okay, your assistant's going to hate me, but you're going to love me. I need that digitized. Like, I'll give you two weeks.

They had no discernible way to even reach the people. So if you're not doing it to bring more money in.

Track the time for finances. Who would do such a thing? That's crazy. Know your margins and profitability. What do you think? We're running a business here.

That's what I was going to say, you took the word right out of my mouth.

All right, I got to dive deeper on this. So when you're looking at the scope of that project you mentioned doing the post mortem and figuring out what's working and what didn't work, how much should you dive in without.

Me? Rephrase this. What margin of error should you allow an account for? Because I think you and I would both go, okay, we're going to go type A and get the numbers perfect down to the minute. And I'm with you. However, I do realize if something does go over, maybe it shouldn't ruin the whole scope of the project because you're 20 minutes over in the grand scheme of.

I'll use us for an example because we started doing more of this for honestly a marketing reason. We do a lot of business books, high end business books for first class, successful entrepreneurs. And everyone's like, oh, I can, you know, no one really realized it takes hundreds of hours to do it correctly. They just think they'll throw up a cover. And I say that because it looks like they literally threw up a cover. Threw up a cover, put some content in there, put it on Amazon, all of this. And they're like, why didn't it do as well as I thought?

Well, because you did it in six minutes, my friend. I am actively curating the data to go. Here's how long it actually takes.

And when you, and it's eye opening when you do it yourself, you know, it's easy to put 10, 12, 14 hours a day. But like you said, while you're killing your nights and weekends, now you expect to pay someone and have the skill set to pull it off.

Where is that variance at to go? Okay, we don't need this, this, and this to have the good end result. But this is absolutely critical and crucial. We can't, you know, like for personal finances. I don't know many people nowadays that could go too long without their cell phone. Especially in business. You make. You may be able to change your eating habits if you have to cut back, but you're probably not losing your cell phone. How do you decide this is critical to the project and this is a nice to have?

Well, largely my opinion is that every project should be profitable. So what is your minimum margin that you're.

Willing to hit? Right. I mean, largely for me, I would, for someone consulting with a client, I would find it a personal failure to be below 25% net margin across the business. But it's, it's a law of Averages, really? I mean, yeah, some projects are going to go over and you have to deliver on what you promised, but then that's a learning lesson and utilize that lesson to solve for it in the future. Right. So how do you copy and paste your best clients, your best projects, and follow that system over and over and over again? And then how do you learn from the ones that ultimately failed? I mean, let's call it within margin of error, right? A 3 to 5% margin of error on every project. I mean, to me on the law of averages, I'd want everything to be below margin or below budget in a 10% ideal, 10 to 20% below budget across the business on the law of averages.

I'm not as smart as you in this area. You keep saying law of averages. Please break it down for me and everyone listening.

Yeah, like the 80 for the 20, right?

Yeah, yeah.

So when. So you're going to take your all the hours that you have across the business. Either you're going to look at it in the number of projects that went over and if all of your projects are the same, you can just look at it how many projects went over, how many projects went under and see where you're actually hitting or the total number of hours that you have for your business and understand how many hours did you actually go, did you have budgeted for and how many hours did you actually go over? The thing that is really important is recognizing both utilization of the team as well as understanding the amount that you're going over. So the vast majority of businesses, kind of in service oriented businesses and agencies specifically get in this place where they're trying to maximize every single minute of time for their team members. And you need to be in a place where if you're looking to grow and scale between a 60 to 70% of their time being utilized so that you have the capacity to be able to grow. The kind of crux that people get stuck in is.

You'Re hiring so incredibly late, you just sold a big deal and you need to now hire someone, you're giving them zero time to get onboarded and up to speed to be able to deliver on this work. And the reason being is you didn't have any leeway in what you were charging every other client to allow for that.

Capacity gain or that that latitude in the amount of hours you have available. So what I was saying by the law of averages is just looking at the averages across your entire business.

Well, thank you for breaking that down. That is a very succinct way of Putting it. And it makes a ton of sense. I mean, I take more of a common sense approach to a lot of things. And it sounds like.

You'Re very eloquent and it makes sense. And I am glad we're able to talk about this because there's so many people. I'm like, I'll just say something like, how did you think that was going to help you? Well, I don't know. And you're like, well, here you're using process A, B or C to figure it out mathematically, statistically, and a whole slew of other things. And I like to joke around, but it's the same reason I like doing books for people. Because you can take that expertise and make it succinct so people can understand it, because ultimately it's empowering. And who wouldn't want to know more and grow more and learn and just not be where they were last year? I mean, that's like personal hell for me. So when you said about don't let a crisis go to waste, you know, it's like that other quote that, you know, don't live the same year 75 times and call it a life. I hate seeing it when I hate seeing people who do that.

I would say that would be my biggest fear in life, is to be the same and not be growing.

Is there anything. I didn't ask you that. I'm sure there's like five hours worth, but is there anything. I didn't ask you that? We want to put a little cherry on top of this section and go, you know what? Here, here's another real good thing that would really serve people and they really should be considering. I mean, ultimately they should call you and do a full audit and diagnostic and, you know, take three to six months and get it straightened out. But what's something to pique their interest? They're probably not considering.

What I would say. I mean, the thing that I always am going to with every client, and again, very analytical mind that I am, everything to me is broken down to a number. Doesn't matter whether it's sales, doesn't matter whether it's ops or marketing.

To your finances. There's some sort of measurement that you should have on how you're actually performing. How do you know whether what you're working on was successful or not? When do you know to give it up or when do you know to invest more or double down on it?

Measure what it is that you're doing, every single activity, whether it's a lead measure, lag Measure, but measure it and understand what impact that ultimately has to the business.

Wow. Great. Expert authority insight. I like that a lot. And it's kind of what I'm hearing, too, is don't be afraid to assign your own KPIs.

Exactly. Yeah.

All right. I have to ask you.

Would you.

I think I know what you're gonna say, but would you prefer yellow or black?

Hmm.

I think I'm gonna go yellow.

I'm wrong. I thought you wanted to match your shirt. Yellow's fine.

That's why I went. That's why I went yellow.

For anyone listening, you should check out the video on eainterviews.com but he's in a black shirt. Oh, well, I'm sure you probably could have figured that out because there's only two colors on here, and it wasn't yellow. Anyway, Yellow.

So.

If you weren't doing the financials, what would you. What do you like to do for fun that you'd consider a career that you may have considered for another career.

Hmm.

You're obviously awesome.

I can tell you.

I did try other things, which is why I'm stumped. I went in loads of different directions. My career was quite meandered to begin with.

I can tell you what I would want to do next.

I don't even know what I want to do. I gotta be honest. Does that mean, like, varied, Meandered?

Yeah. Yeah. So I just, like, took. I went on a very, very multidirectional path to end up where I am today. Yeah, exactly.

I would. If I had to choose my ideal day, which I do as much as I can, I would spend loads of my life reading as much as I possibly could. I'd love to expand my knowledge. I think that that's how I learn and grow as well as I can, help my clients more. But as far as what I would want to do next is I would like to start a nonprofit and have more impact. Money isn't a driver for me anymore. It was for a while, but now I want to be able to give back and.

Have some impact on the world, aside from in business.

Very nice. One of the latest books we did with Tim Dental Wealth Nation. It was one of the main things. He helps people create more impact, too. And Christian lafair, I had him. I don't know how many episodes he's been on the show, too. He actually. I think his company's instant nonprofit. He actually helps people set up nonprofits.

I have to check them out.

Yeah. Whenever you're ready. Happy to make an introduction. That's awesome. And I'm glad I got you because that whole thing, this is supposed to be like I was like, there's nothing I'm going to ask you in financially related that's going to stump you. Where should I take this? So thank you for the honesty, but I'm glad you had to think about it. We're gonna thank our sponsor and come back for the imperfect action round. You've heard me say every business needs a book, including yours. And it's true. And that's why I'm launching my new book@eapublishingmethodbook.com so you can learn the seven steps to publish and promote your nonfiction lead and profit generating business book in eight weeks. But you know what, don't take my word for it. Take it from a few of my authors like Lori, I went from having an idea and a possibility to actually getting my book published. Or Catherine, thank you for making my mom number one best selling author. Or Mary Alice, what he got done for me in three days regarding my book launch.

Unmanageable John Cody. I've worked with Mario over the phone and online and he's been very helpful in getting me where I needed to.

Go with promoting my books.

Rocio, there's no way in the world.

I would have been able to do this with somebody else again. I've attempted it in the past.

It didn't serve me.

As a matter of fact, I ended up more frustrated than anything. So this has been a very seamless process.

Adele, if you're looking for an amazing.

Business coach, I highly recommend Mario Ficcini or Bill Benner.

I can't make a higher recommendation than.

To work with Mario Ficini. He has been great for me and.

Right now I won't work with anybody.

Else except for Mario.

Hey, their words, not mine. Visit eapublishingmethodbook.com to get your copy and I look forward to hearing your transformation as our next video success story. Once again, that's eapublishing method book.com and we're back with the imperfect action round. Robert, are you ready to take imperfect action?

I think so. Let's do it.

Three questions, rapid fire. First one is what is the fastest path to the cash?

You know what, I'm going to change it to profits for you. What is the fastest path to the profits? Because you're all about the profit. I agree.

Eliminate the expenses that you have. I mean, the vast majority of people are spending too much. Eliminate as much expenses and waste as you can.

Oh, there we go.

Number. I'll save it. Number two, what is the biggest problem you see your prospects making in the fastest way they can fix it?

The biggest problem I see my clients make is that they are trying to do what someone else is doing. They are.

They're trying to emulate someone else rather than sticking to their own genius, not knowing why it matters and attracting people that they're meant to work with and being authentic to themselves that they can work with their soulmate clients if they just owned their zone of genius and live a happier life and not try to live someone else's.

Nice. I love that. Number three, what is the best way to maximize customer lifetime value?

Provide as much value to them as you possibly can and be more strategic with them. And don't be a pair of hands. Be an advisor.

Ooh, another great expert authority insight. I have to throw this one in. We didn't get a chance to talk about it, but now we will for at least a minute or two. You were. And you just said. When you. You just said. When you said best selling author right here. You just said. When you said eliminate expenses. And I know you are too. Congrats. 2 times international. I saw that and I was like, very nice.

You said eliminate expenses. What are your thoughts and how would you increase sales in addition to decrease expenses? Because we're going to do that anyway because we follow the rules. But what do you advise if someone saying, hey, I want to increase sales to turn this around too?

I mean, I think that there's two kind of components to it that I would say. I'll directly answer your question, but to start, I would say that you have to be sure that what revenue you're adding is going to be profitable in the first place, because a lot of people are adding revenue for adding revenue sake without considering the bottom line. I'd much rather have a $5 million business at a 50% margin than a $25 million business at 10% margin. It's so much more risk, a lot more headache, a lot more team members. It's just dramatically different. So make sure that you're maximizing profitability as much as you can.

If you are wanting to drive sales, get out there more and use your voice, use your expertise to attract your ideal client. It is one of the most effective ways to have someone get to know you. There's so many different mediums, whether it's video or audio or written, that you can get your voice out there, your opinion and your expertise and share it. And you can do that now with technology every day. Wow.

There's nothing I can ask you you don't have a great answer for. Is there.

Like, everything?

I'm like, my takers will want to find it.

Wow. That was another great answer.

All right, well, we talked about books. We're both authors. I enjoy publishing, got a great team. What books have helped you?

Ooh, that's a good question.

Just narrow it down to the first hundred.

One. The two books that I've really enjoyed recently. And I've been getting into a lot of psychology books. But one of the books that I read very recently was Buy Back youk Time by Dan Martell. And I think that every single entrepreneur needs to read it.

10X is better is easier than 2x is also a phenomenal book.

The other book that I was mentioning, very psychology oriented. It's called Four Tendencies.

And it breaks down the motivation behind people and why some people take action and some people don't and the scenarios by which you will. So it allows for you to harness who you are as a person to take more action and have a greater result.

And I'll top it off with a third. I will say the last is Do Nothing.

Interesting.

It very helpful for me as a person that was has that whole kind of get shit done mentality. And what I have found is that the vast majority of us entrepreneurs believe that in order to have success, we have to do more. And it's actually the exact opposite that I have found. The more I focus, the more success I can have. And so I have to do less. To have More. And Do Nothing was my course to being able to do that.

All great titles. I actually had Dr. Ben Hardy on the show.

All great recommendations. So thank you for those. And I love the title of Do Less because that was something I had to learn a couple years ago too. It's like, you know, all we got to do, it's like, no, stop. You have a team of people do Less, go to lunch. And literally like, the less I did, the better everything went. I'm like, oh, I'm the problem. I'll be back like next month. Bye.

The amount of times I've had to learn that lesson myself. So yes.

Yeah. If anyone wants to fly me out somewhere and I'll speak to your organization. Like.

As long as Robert can come because he's awesome.

We'Ll let everything else come along.

Somewhere tropical, please.

I'm going to bite my tongue on that. That comment for this moment in time. And it's a US State, but I agree.

What were we talking about? Where would you like to people to learn more?

I've put together a page for listeners. So if you're listening to this podcast, the Expert Authority Podcast, I'm sure that you want to help more people and I'm here to help you do that. So if you go to creative agency success.com forward/expert authority, there's three things that you can do there. You can download my course and template for creating a Capabilities deck which is how you can talk to your prospective clients on about who you are and about your why that creates alignment and will attract your soulmate client. A link to download my book the Practical Agency as well the E version of it. And if you are in a place where you're wanting to talk and dive into your financials or what you currently have as your offer, I'm happy to schedule a 15 minute chat with you to talk about your specific scenario and try to path for you to have success.

I said it. There's nothing I can ask you that you don't have a great question for. I just pulled up the page and it looks fantastic. I will make sure this is on the eainterviews.com show notes page for your episode and very impressive. Thank you for everything.

I'm really trying to find a question that'll stump you, but thank you for everything. All joking aside, you're phenomenal and I appreciate your time and everything you've shared with the audience.

Thanks so much for having me. Mario was a pleasure.

All right, Expert Authority World. We have another great episode here today. I'll see you on the next one. Have a great day. And if you have any questions I can stomp them with, send them in. God bless. You're already the expert, but have you transformed your expertise into a tangible asset that will generate qualified leads while increasing profit for you 24 7? And if so, how well are you promoting it? With my new book, the Expert Authority Effect Publishing Method, I take you through my process step by step. Visit eapublishingmethodbook.com today to learn the seven steps to publish and promote your nonfiction, lead and profit generating business book in eight weeks. Visit eapublishingmethodbook.com to get started now. Once again, that's eapublishingmethodbook.Com thanks for listening to today's episode. I would love to know what you enjoyed most from it if you haven't done so already. I invite you to connect with me on my new LinkedIn. You can go to it directly at eainterviews.com LinkedIn Once again, that's eainterviews.com LinkedIn. Lastly, check out the full eainterviews.com site for complete show notes, the full interview video experience, links to the resources we mentioned, and more. Have a blessed day and I'll see you on the next one.