The #1 Way to Go OUT of Business! Caring About the Opinion of Competitors

Hey everyone, it's Mike Andes and you are listening to the Business Bootcamp podcast. Today we're going to be talking about ego driven financial decisions and how it's the number one way to make sure your business goes out of business and fails. Before we get into today's show, a big thank you to today's sponsor, which is Gusto. If you haven't Already, go to gusto.combootcamp. that's guitar w s t o.com Boot Camp. Please check it out and see how you can completely change the way you pay your people and save hours, every single pay period, in a very cheap manner. And save a lot of money too. So you can try out for 90 days completely free. You can run your pay period, run your paychecks through that for your employees. It's all automatic transfer right to their account, their bank account. Super efficient, super, super fast, timely savings in terms of time and money. So check it out. Today, go to Gusto.com Boot Camp. Get 90 Days completely free and I promise you, you will continue after that trial. So today I'm going to be talking about ego driven financial decisions. But first I want to give a little bit of background. I just got back last week. I was traveling. I went to Iowa, Illinois and then Kentucky. In Kentucky, I went to a massive landscaping expo. It's actually the biggest one in the world. There's over 20,000 people that attend this expo for the landscaping industry. It's called the GIE Green Industry Expo. But today I'm not talking about lawn care and landscaping specifically. I'm talking about business in general. But I want to talk about kind of some of the things that I observed there and then what I'm taking away from it. And at gie.

A lot of what has to do with is having a bunch of the exhibitors, which is people who make mowers and trucks and equipment and tools for the landscaping and lawn care industries. All of the materials from hardscaping blocks, different techniques, different.

Products and things like that, services, software, all those sort of things were there. And so it's just a massive convention. And so I was able to speak there. I was able to meet a lot of the fans from Landscape Business Course and the podcast there, able to meet a lot of them, get to know some of the franchisees from Augusta, Lawn Care, et cetera. So a lot of fun. But one of the things that I noticed just time and time again as I talked to a lot of people there, as I listened to other people speaking, as I walked around the expo center, just like massive outdoor, indoor, like it's just a huge place in Kentucky. Kentucky Expo center is where it was held is. I really found that so much of the importance, so much of the emphasis was placed on equipment. It was based upon metrics that were not tied to the bottom line. And I found a lot of trucks and flashy equipment and software things and ramps and tools that were just really cool, really awesome stuff, but not actually contributing to the bottom line or the profitability of the business. And in my mind, a big distraction from the things that actually do make a business successful. And so I found as I began, as I was going throughout the week and I was listening to people and hearing about how. What are the first questions they ask when they meet a new landscaper? What was the question? How many trucks they had? Was it how many employees they had? Was it profitability? Was it revenue? What were they talking about? And I found that a lot of times that the purchases that they were making, whether it be at the Expo or the things that they were talking about in the circles at talks, so much of their buying decisions were based upon what other competitors were thinking about them. And literally I see this all the time in the landscape industry, but I see it everywhere. Every industry, your local competitors, the people you know, the people you know are watching your business. People will literally make hiring decisions. They will make Cap X CAPEX stands for capital expenditures. This is gonna be like property, it's going to be equipment, it's going to be inventory, things like that. So like CapEx expenditures, they make these massive expenditures and purchases based upon literally what their competitors are going to think about them. And you already know my thoughts on making purchasing decisions based upon the opinions and the expectations of others, whether it be family or your friends or some sort of status that you want to achieve socially. And so you make buying decisions based upon that. And you know already how foolish I think that is. But what I saw at this Expo, and what I've seen more and more, is that people are making buying decisions based upon what the opinions of their competitors are and to make themselves look good in front of their competitors or make them feel like they're better than their competitors, they're literally making buying decisions. They're literally making hiring decisions. They're literally making massive business decisions based upon what their competitors are going to think about them. And at the end of the day, I truly believe that profits and people build a successful and sustainable business. And I do not believe that profits and solid people systems are built on ego or pride. And fancy stuff. And yet those are the three things, ego, pride, and fancy stuff that so many people get wrapped up in and make foolish financial decisions, foolish hiring decisions, simply due to the fact that they're trying to look good in front of their competitors. And again, I'm talking about landscaping and lawn care, because I was just at an expo about that and I talked about it, and I'm really deep into that industry. But I see this in so many different industries, from other listeners from any industry, whether it be like, literally from medicine to law to home improvement services to the gym services, every sort of business. I see industry. I see people are failing because local competitors, they're trying to make themselves look good in front of them instead of focusing on the things that make a business successful, that is people, and that is profits. And one thing that I kind of verbalized throughout this conference when I was meeting someone that I really rang true for me is that it is your moral responsibility to run a profitable business. I want that to sink in because so many times even people that are really, ethically and morally have a great moral compass. They really feel that.

You making a bunch of money as the owner is not necessarily correct or right. And there should be profit sharing or the wealth, and that's fine. Everyone has their own opinion on that. But at the end of the day, for you not to run a profitable business is completely unethical. Because for you to run an ethical business, you have to create a profit. Because if you do not create a profit, you're letting down your family, you're letting down your employees, you're letting down your customers. Because if you do not run a profitable business, you are not making a sustainable business. And if you do not have a sustainable business, you are therefore putting the jobs and livelihoods of your employees in jeopardy. You're putting the expectations and the dependability of your customers on your services and products in jeopardy if you do not run a sustainable, profitable business. So to run a profitable business is your ethical and moral responsibility as a business owner, okay? Whether it be your employees, whether it be your clients, your community, even if you're your family, they're depending on you to have a profitable business. And if you're a Christian, you look in the Bible, it talks very plainly about providing for your family. And so if you're the breadwinner of your home, if you and your wife are running a business, if you are contributing to the provision of your household, the Bible talks about someone who doesn't provide for their family as being worse than an Infidel. And so if you look at these certain things, whether it be in your community or your family or your employees or your customers, you not running a profitable, sustainable business is unethical. And so if you're making purchases and making financial decisions that are based upon the opinions of people that are not within that scope, that is your competitors, that is the people who are actually trying to ruin you or trying to don't want you to succeed and you're actually trying to impress them or make them, make yourself look good in front of them. That is just, it's ludicrous. I was seeing people making buying decisions there, buying 40, $50,000 trucks when that 40 to $50,000 would be much better spent going out and buying, spending money on hiring better people. You know, give them a few dollars more per hour, get you know, some number one and number two to support them, that will get early in their system and raise them as they grow their business. It could have went, you know, 10 or $15,000 spent on marketing could have completely revolutionized their business. And yet they're spending on one truck more, even more. So they could have bought four or five trucks for the same price as that one truck with less insurance costs, with less depreciation, and allowed themselves to expand and scale much faster. If they could have just got over the fact that they were not going to get a brand new one ton lifted pickup truck that was brand new, they could have gotten five or six year old trucks, got three or four of them for a fleet, grown their business, put some money into marketing and completely made their business far more successful. And when I talk about businesses being successful, I'm not talking about shiny things, I'm not talking about ego or pride. And those are the things that get in the way of business owners making sustainable, profitable businesses that are people driven and have systems in place to run without the owner being there every single day. On daily operational level. I promise you this, a business that is run on systems, has great people working and is profitable. You can have much more pride in that being the business and the owner and the proprietor of that organization. You can have much more pride in that than having the newest, the shiniest, the best, the nicest looking office with the nicest foosball table and air hockey table with lunch for everybody. The nicest computers, the nicest trucks, the nicest equipment, the biggest offices, whatever it is, those things will pale in comparison. The pride you get from those things that are short lived, that are absolutely immaterial to the business success and future Longevity of your company. Those things will pale in comparison to the pride that you get from those things will pale in comparison to running a profitable, sustainable, systems driven people, independent business. If you can make that happen, I promise you the pride that you can have is far greater than all the new shiny things that you can get. I promise you that focusing on the profitability of your business instead of the perception and how it is perceived by competitors and other people, friends, family, who, whatever anyone else thinks that is not within a stakeholder position of your business. When I say stakeholder, I'm talking about the people that it puts food on the table for. That's your family, that your employees families, your clients, if they're not in those and have a stakeholder position within the business. And I don't mean just equity. Like I said, stakeholder is an employee, their family is a stakeholder because they are depending on that business doing well. Clients are stakeholders in your business. If their opinions, if they are the opinions of anyone that is not a stakeholder, is absolutely irrelevant. Making financial decisions, buying new stuff, hiring people you don't need, buying bigger things that you do not need to impress people that are not stakeholders is absolutely the number one way to put your business in financial jeopardy. And I see it time and time and time again. I made some notes coming back.

From that trip and I just want to make sure I hit all of them. But your competitors do not pay your bills, Your competitors do not increase your revenue. They do not make sure that your business runs smoothly. So why in the world would you care about what they think about you? Why in the world would you care about impressing them, making them feel that you're better than them? Ludicrous. The things that people are doing to make themselves look good in front of their competitors. It's crazy. Literally, the people that want to see you, your demise the most, that's the people you're bending over backwards, going into debt for making poor financial decisions, for making short term financial decisions, putting yourself in financial risk by taking loans out and spending money on depreciating assets instead of marketing and people and things that are the systems that are going to elevate and make a sustainable business. You're investing in those things and literally your competitors don't pay your bills. They want you not to succeed. And those are the people you're trying to impress.

So literally, like as I was thinking about these things, I saw these things happening.

At this conference and just seeing what was taking place that, you know, literally I'm talking to people and they are saying that, for example, the landscaping industry, because that's what the expo was about. One person was saying, you know, either landscapers are broke, there's two different types of landscapers. They said landscapers that are broke and landscapers who don't know they're broke. And for someone like myself who has, the landscaping industry has done so much for me, it makes me super mad when people say that because it only speaks to the absolute ignorance that people are being accustomed to in the industry that says you can't make a sustainable business, you can't make a profitable business. But when you look at the businesses, the 90% of business that they're talking about, that fail, that's literally the ratio. Like landscapers do not make good money overall because overall the far majority of them are so wrapped up in the trucks and the equipment and in how many people they are hiring instead of, of how profitable are the people who are working for them. Like when I go to those conferences and I tell them how many people work in our field, no one gets excited. Like we're not running like a 50, 60 person operation. We don't have like 50 trucks or 100 trucks. I think we like 10 trucks. We have people, 15 person team. It's nothing major, but I don't like that doesn't get anyone excited. But when you start talking numbers, when you start talking profitability, when you start talking about revenue per employee, when you start talking about customer satisfaction, when you start talking about job employee satisfaction and retention of our employees, that gets me really excited. And so I just find that those are not the things being talked about. It's what's being talked about is what type of equipment do you have, how big is your mower, how big is your truck, how many trailers do you have? What type of trailers do you have? A dump trailer? Do you have an enclosed trailer? What's your logo look like? All of those things are somewhat important. They have to be taken care of, but they're not what makes a good business. Profitability and people built upon systems make a solid business. And I promise you, focusing on those things will drive your profits far more. You'll be able to be much more proud of the business that you build and you'll look back one day and you'll be happy you didn't take the short term financial decisions based upon ego pride and looking good in front of your competitors. You can listen to Mike Andes on the Business Boot Camp podcast. If you have a question, join me on the Facebook group Small Business Owners of America. You'll see in brackets. Business Boot camp. I'd love to see you there. Ask me questions there and I'll try to get back to you. Thank you so much, and have a great day.