Real business advice with Kenny Baroff - The Struggle Podcast - S2 EP6

It's a fallacy for people to think that I'm going to go grow my business by borrowing money. Absolutely not. And building a business, helping people is is really the niche that I've created for myself. The best advice is first of all, family is very difficult for partnerships. When you feel that and you're obviously your bank account, you're bouncing checks, you're not able to pick up the phone because you feel guilty that you're not paying your vendors. Um it's a hard reality. You're struggling. You know, you talk about the struggle. Of course, this is the biggest struggle. >> It's a huge business today. The cash advance. >> People are desperate. You know, when you start getting desperate, that's when the red flag has to come up. How are we going to get there? How are we going to get out of debt? Um sometimes bankruptcy is the answer. >> Now, what's your opinion about taxi customers? They want to pay for a Chevy and drive a Cadillac. And until you fail, sometimes it's hard to succeed in life. Period. >> Let's take a quick pause. This is a mansion that sits on 37 acres. It hosts 60 guests. It has kosher food. It is good for shva bras. It is good for bitzvah. It is good for family gatherings. and it has everything and anything you can imagine from pools to tennis courts, the hot tubs. This could be lovely for you and for your family. Please call 845-5587280. Okay, joining me today we have um Kenny Barof, a business consultant that is a nononsense business consultant. Um Kenny Barof is helping entrepreneurs, he's helping leaders um cut through the chaos of business and he is showing results. Um we are going to unpack um the myths, the mistakes, the confusion, the mindset that we need to have um to be successful in a business. Welcome Kenny. >> Thank you for having me Joseph. It's a pleasure. >> It's a pleasure having you too >> and we we we go back many years. Uh and and I remember the first day I met you and it's it's we've gone a full 360 here. >> Yes, absolutely. And it was a great experience and uh it was great to know you and you not only became a coach, a consultant, you became almost family. you became very close friends and I appreciate that and I really appreciate your friendship >> and I appreciate you having me here and seeing your success and growth and and it's it's a major accomplishment in your life to walk into this room and see what you've created from your original business completely different business model >> right >> so I I'm it's a pleasure to be here with you today >> so before we even get into the business uh about coaching and about the stuff that you're doing and your style of doing it and the experience that you have. I know that you are uh coming from outside the Froom community. >> Yes. And what do you think about when you joined the Froom community? Because I know that you are involved with a bunch of businesses in the Froom community >> and you had a tremendous experience and you see new things, you're learning new things, but what's your observation when you see the camaraderie when you see these families? Uh, it's a very tight-knit community. You know, they trust you, they let you they they let you into their family. Well, you know, meeting you for the first time um back almost seven or eight years ago with your business, uh we we experienced um just a a strong connection. um you know being a Jewish person obviously was a big part of the connection and there's there's some inner connection of trust and loyalty and commitment that you just can't you can't paint that picture. It just is it's very natural with you. After many years of working you trusted me 100%. You brought me into your family as well, your home and helping you in your business. You felt to refer me to other family members and that then became another situation of helping other family members and then them again referring me to other people. So the trust was very strong, the commitment to your culture was very strong and I and I got it. There was no nothing that really um made me feel uncomfortable. Um it was natural. Sure you you know you a lot of the people in the community may dress differently or pray differently but it was a very strong connection and I can't even explain what naturally happened with me in terms of being part of your community. Um, business-wise, as you know, you know, we we I I I've developed a career in entrepreneurship going way back to my young ages, you know, when I first started my career in business, >> right? And it's also you have this approach, you have a no judgmental approach and you come in and you can see the beauty in everything. you have this thing that you see how the the the fabric of this community, how it works and and and and you seem to be having a very smooth sailing and people like what they when they get to know you and uh it's a very good experience uh that you describe that you you see from this community. Well, I think the connection is again very strong and there's an inherent trust which is number one in in life and in business. In order for me to provide my services and expertise, there has to be trust. And then we continue >> opening up books, you know, introducing me to clients. Basically, no one's really ever said to me, "You have to sign this document because I don't trust you." >> Right. Right. And it's been in, you know, that's the nature of who I am. Like you said, >> that's what you show. You show a certain uh dignity in a certain class that um people, you know, can trust you with their personal stuff and uh you know the boundaries, you know the level, you have a a knack for what you're doing. So before we are going to get into um how what what needs how an office is supposed to look my question to you is how important is it for first to have your mental health in place which means there are people who are like you know I want to open up a business and I want this and I want that they have a lot of ideas and stuff like that but if they're having problems at home or they're having problems with their children and they're having outside personal problems How does that affect the the business before a person goes in and he wants to laser focus on the business 250%. >> Right. Um yeah, it takes an inner strength to develop um a a real conscious effort to hone in. Like you said, laser focus. Um you got to put all the everything aside. You walk in and you decide that this is what I want to do. When you go into work for a company, they always say, "Leave your problems at home." >> Yeah. >> So, it's no different where you're operating your own business where you have to have a strong separation. Even if you're working at home, a lot of entrepreneurs have service businesses today where they're working out of their home. They have to shut the door, not listen to the the screaming kids, the wife, whoever, man, female, whatever situation, whoever we're dealing with. And and at that point, have the focus on your business. And the mental part is is probably 90 to 100% to be able to make that decision. focus because if you don't if your if your if your head is going in certain directions during the day, things are bothering you and stuff is you can't really focus on what kind of how to run the business efficiently. >> Yeah. And and again, we're talking about different scenarios. If you're running a big company and you go into your office, you're you're focused pretty much. You you're going to leave all your troubles behind at home. Um, if you're working out of your house as an entrepreneur, it could be challenging and and and I would recommend people who cannot do that to get out of the house, pay the rent, and focus on your business so you you don't have those distractions. >> Right? Now, let me ask you something. If someone comes to you and says he has an idea and he wants to open a business or uh he has some few ideas, someone likes this, someone likes food, someone likes back office, someone likes sales, everybody likes something else. What is your advice on how a person should find that talent? How can someone tap into what he's really good at or to something that he thinks it's a good business because it's going to make money? >> Yeah, there two there two questions here and and I'll try to address them separately. Um, as far as what to go into and and how to determine. >> Yeah. Um, it's it's got to come from experience of what you know best. If you want to become a plumber, obviously if you know plumbing, you're going to go into that. I think like really specifically, you're not going to go into a business that you know nothing about. But from my experience in life, I've seen a lot of people go into business with no experience at all. And they say, "This is a great idea. I'll I'll try it." and then because they didn't do research into that specific field. And I think research >> and a passion. I know you have passion with what you do and and you experience, you know, the the success of of being passionate. So, in order to go into your own business, you have to have a strong passion for what you want to do. >> You have to love what you're doing. They're saying that if you love what you do, you don't work a day in your life. >> And I've been that way all my life, Joe. So I I I feel you know building a business helping people is is really the niche that I've created for myself and it's never been an effort and it's just comes naturally for me. Now not every person can have that gift and you know be able to go in especially at the beginning it's very difficult to make that decision of what am I going to do but my number one concern for people is do more research into whatever you're going to do >> and then that comes with a lot of you [snorts] know other thoughts and ideas of what I mean by research and we could hone in on that specific topic you know and a more greater impact later on >> right now. Where what do you see as far as why does a person want to become an entrepreneur? Is it because financial freedom? Is it because uh he feels he he can grow? What is the drive that a person when you see a person wants to go into a business? What is the the drive behind it? >> Well, for for me per uh at a young age um I had that inner strength of working for myself. I I don't think anyone told me maybe because I saw my father and a role model and and other people around me had their own businesses >> but I think it was innate and from a very young age I met people and you know they they reassured me that that was me that's who I was >> so it starts with the inner strength the self-confidence of being successful and knowing whatever you're going to do you're going to achieve and when you wake up every day, nothing's going to stop you. And if you interviewed probably the most successful entrepreneurs, that common ground is hard work obviously. And everyone tries to work hard, but it's that inner strength and and self-confidence to go into your own business and and not have to work for someone and depend on it. Now, financially, um it all depends on how how far you take it. Getting a guaranteed paycheck is is nice and you you know what you're going to be making three to five percent maybe a little more every year depending on the company and how the company is doing that you're working for. With your own business you could grow 10 times all depends on how successful you become and again what you do with your team of people and and and all the supporting cast that you bring on to your company. Is there times that a person comes in and wants to sit down with you and strategize and talk about a business and you advise them against it, saying to him, "Listen, there's either you're not capable or money is an issue or do you sit down and you're being blunt with the guy and and tell him that this is not for you?" >> You know, that that um it's a you're damned if you do and damned if you don't sort of. And you know, you don't want to discourage someone's dream, but you know, from my experience, I have a lot of insight, right? When I look at numbers, I look at the personality and I could kind of sense it. So, it's a it's a real fine line to share with someone because I don't want to >> diminish their dream of starting a business >> because people come in with this dream and they are like they almost like in a relationship already with the business and here you go busting their bubble and telling them, listen, you this is not for you. you're not capable for it. You're not, you know, you're not the type of person you can't see yourself. You see it from a different lens that he sees it himself. >> Yeah. It's a it's it's very very difficult to to shatter someone's dream. Um, fortunately, I haven't had to do that too many times. And even with an ongoing business, it's very hard to come in, you know, meet two brothers owning a company, look at their financial situation and tell them, you know, honestly, I think it's time to retire, sell or close your business because you're not doing well. The markets has not grown. But for for a young entrepreneur going in, um, if they want to hear truth, I'll tell them the truth 100%. >> Right. Now, let me ask you, you were mentioning um two brothers or if someone wants to open up a business and they need help financially and stuff like that and they're considering taking a partner, would you advise uh against it or you would say it is a good idea because sometimes you can see these partnerships are doing well and sometimes it's a you know it's like a marriage. What's your uh advice when it comes to partnership before someone even starts? >> Well, I had partners um and I was a strong partner whereas other parts of my business were not. Um it's probably one of the most difficult decisions in your life. um you know getting married is a perfect correlation and once you lock in you're you're you're set for as long as the journey is going to continue. Um so the the best advice is first of all family is very difficult for partnerships. Um I try I try >> to assess the situation the the uh the relationship how they work you know and but but it a lot of it's impulsive you know people go into partnership but the plus side is is very rewarding. So you want to go away for two weeks and not have to worry and trust a partner. >> There's loyalty there right? >> Loyalty and trust. Again, we're going back to that word of trust, coming into a community of trust, having a partnership of trust. >> So, it's great when it works. I've seen tremendous amount of partnerships in my lifetime and and I'm sure you have as well. And it really becomes down to, you know, the legal aspect, too. You want to set up proper books at the beginning, proper uh, you know, legal advice. So, so if it doesn't work out, well, there's there's no crime in breaking up the partnership. I did break up partnerships and and have helped people dissolve them and it's not a comfortable thing. But when you look at each other in the mirror, you know, is it the business or is it the partnership that you want to continue? And this is an important part that you need to uh differentiate between emotional uh uh you know partnerships and relationships to you're coming into the business and you're saying listen what's going on where's the numbers what's going on. So you you're the person who comes into the middle and tells them this is the right and this is the wrong. Well, you know, it's it's probably being a mediator, right? And yes, I have mediated uh companies and especially exit strategies for companies and when they're ready to dissolve, sell or liquidate. Um, >> and there's a lot of egos involved in it. I did more, you know, all of that stuff. >> So, it it it's one, especially on a small level, two people running a business versus two people running a giant corporation. There's a lot of different aspects of partnerships. Um, but communication probably is number one and and the fact that when you go into a business, you have to really the two of you have to know the pros and cons going into it to be able to know. No one knows what the future's going to look like. So whether the partnership lasts sometimes marriages get involved you know people get married and then now the other spouses are involved in the business which is a no no >> you want to keep you know the business here and the family stuff outside of the business so >> you know it is challenging Joe but at the other hand it could be the best thing that you ever did. >> No it's amazing stuff. Now talking about you know uh running a business do you come into offices sometimes existing businesses big or small and you see chaos in the office which means that um you know the there's no reports and there's no profits and lo nobody knows numbers and stuff like that. Can you describe in you know as much as you can how does an efficient office supposed to look in a business? Okay. Um, from all of my years of experience of business in general, it really starts from the top, the leader, the owner. And they have to set the rules, the parameters, the systems and organization. If the owner is disorganized and out of control, guess what? I would say most of the companies will follow in that capacity. People are employees. They they look up to the owner for guidance, for uh direction. And when they don't see the owner being organized, a messy desk, you know, as a simple example, um not following up, not communicating, that to me is chaos. And it's very hard to come in and manage that unless the owner who is running the operation is willing to change. If you have an ability to listen to advice, >> right, >> you're going to flourish and set the bar high for your company, >> right? >> And it means a lot of different details that are involved, but processes, systems, in my experience of especially the last 10 years, I've been really pushing that for companies is setting up systems and processes so it's all organized. So the next person that comes in can follow that same system. But it starts from the top 100%. And the owner has to buy into the success of a system and an organized process to then hand it off to the next level managers, employees so they could continue to follow your system and say structure. So everyone in life wants structure, right? We all do. children, you know, if you just let your child run in the backyard without guidance and >> and and and an organized plan, >> they're going to just get too far. >> They're not going to get too far. They're they're going to run around and out of the house or whatever. And it's no different in running a business. You got to set the tone right from the beginning. >> So, you say that this is number one. So you find this a lot and with your clients that you come into a business and the business is a pretty decent business and it's profitable and it they have good employees and stuff like that, but the core foundation is that the office is not the way it's supposed to be. >> I think it's both, Joe. I I don't think it's I I think depending on on this on the company, the finances. Okay. So So there's two parts of this. One is is the structure of the company in terms of organization and then the second huge part is the books, the financials and and they're two different aspects of concern for me to walk into a company. If I see a disorganized company and I see a disorganized books that scares me, right? >> And if I'm brought there to help them fix both of them and they're willing to listen, great. But the books, not having any organization and and your general ledger, your bank reconciliations, all of that is not up to date because you don't have internal bookkeeping, right? >> That to me is is a sign of [snorts] of where where someone needs help, >> right? So, as far as um offices in place now, the company you need you need to start moving. you need to start doing things in to go in the right direction. What's your take on credit cards? People spend money on credit cards of the business, lines of credit, um, bank loans, SBA loans, and as I understand that you when you get involved in a business, you will help the business try to get the financials also. You would go to the bank, you would help them build relationships with banks and stuff like that. So, what do you think of you're are you a big fan of um lines of credits and spending money as far as in the business? >> Yeah. and and you know whether you're starting out and obviously there's >> there's the middle of a >> right there's different stages of you know financing and if you're referring specifically to the existing business um a line of credit with a bank is it to me is always an essential when you're in business and I don't care what business you're in you need to have some kind of line of credit established if you can get it whether you're personally guaranteeing it and again And that's where the self-confidence comes in. Are you willing to put up your personal signature, your house? It >> it depends how much you believe in the business. Is that >> 100%? And I did all believe in yourself. >> I did all that and I never questioned. Fortunately, you know, my spouse was supportive 100% of, you know, doing that. And you have to get support from your family, right? >> So, if your signature means that you're going to guarantee that loan from the bank because you believe in it. so strongly, great. If you have to get a family member to guarantee that note too, then that family member has to believe in you as well. But I depending on the scope of your business, if you have receivables, if you have inventory or you're trying to expand, where's the money coming from? You can't take it from cash flow because cash flow is paying the bills and paying your salary, right? So if you need a new investment or you know your receivables are growing because you're not collecting money fast enough, where's the money coming from to pay. So you have to establish a line of credit. Now on the other side, a lot of people can't. So where do they go? Like you said, credit cards. Okay. That could put you out of business as well. Yeah. >> Because today, you know what you're paying on credit cards? >> Of course, >> between 20 and 35%. M >> and you you don't have any control. So before you start analyzing that I want more money, more growth, more sales. It should really come from profits. But how do you know that? Well, you have to again have somebody that you could trust to to advise you on do you have liquidity in your business and do you have extra money to grow your business? Because you can't grow your business without profits. And and it's it's a fallacy for people to think that I'm going to go grow my business by borrowing money. Absolutely not. And and it's a great point and because I think that's where a lot of people get stuck. They don't understand cash flow and and the borrowing part. The effect of interest long-term as you're not paying down your debt is is critical. How much money which means let's say if a business is a healthy business pretty much how much money is important to have always to run the business >> well it it's called working capital to have extra working capital >> you know I would say again depending on the scope of your business it's very hard for an entrepreneur to look at that because the the most entrepreneurs >> pay themselves and and and pay the expenses of running a business So having extra is a very very difficult um part of your business unless you're very successful and very profitable and that takes years. So I don't think there's a rule of saying I should have three months of cash flow or six months of cash flow. It all depends what stage you're at. For the first five years of opening up a business, you're you're struggling. You know, you talk about the struggle. Of course, this is the biggest struggle. So, if you could get past one through five and manage your business, pay your bills, be up tod date and pay yourself a fair amount of money, I think you've achieved a lot. And then at that point, you you start thinking where how can I put some savings aside or for the rainy day. >> Right now, you're familiar with cash advance. This is something new that is going on that people are just, you know, they get loans privately like hard money loans and stuff like what do you think about those? I mean, >> you got to be careful. It's the same thing >> because the interest rate on that is not normal. But they they they say that this is just a short term. >> Listen, if you >> smaller loan shortterm, it's it's a huge business today. The cash advance type. >> And why do you think that? >> Because people are >> because people are desperate. You know, when you start getting desperate, that's when the red flag has to come up. When you have to go to that extreme and pay your daily 35, 40, 50%. >> You get somebody out of the rut when someone tells you, "Listen, I'm choked. I don't have a penny to move on. Not ready to let let the business go. It's choked. Completely choked. You can't move." >> Great question, Joe. And and I'm sure a lot of people have gotten themselves in the situation. So, it's not a quick fix. It's like starting over. You got to own what the mistakes you made, >> not go back to the same mistakes and take control of yourself and the business once and for all. And it's a hard reality in life. But I've seen it time and time again. And you know you there's no the word failure doesn't exist in my vocabulary because if you do fail we all have done that the most successful business >> experience it's a learning experience >> it's a learning experience and until you fail sometimes it's hard to succeed in life >> period I mean so >> you know the the the desperation of getting these type of loans and and trying to you're going to just continue to probably dig deeper especially if you don't have a an experienced financial consultant behind you showing you what is the next six months or a year look like? How are we going to get there? How are we going to get out of debt? Um, sometimes bankruptcy is the answer. I would be able to look at a situation and really determine how bad it is. But again, if you want to keep digging it deeper and file bankruptcy to remove all your debt, but you're now starting over even worse situation, that's a that's a tough thing. >> Wow. Now, as far as progress reports, offices in place, everybody's working. There's a coach on board. Everybody's, you know, being held accountable as far as they're supposed to. How often do you think you have to sit down and um make these progress reports? Is it every week, every month? Um what? Because a lot of people do this weekly, bi-weekly. Uh how how vital is this for a business? >> Well, I'm I'm from the philosophy of communication. Um again, starts from the owner, starts from the team of of of a discipline. This is a discipline that and I'm I'm big on that because now it doesn't have to be an official progress report. Um it has to be task oriented and weekly communication with your staff. You don't have to have these long drawn out meetings which a lot of people spit waste too much time in companies on the meeting part instead of the task part. So the tasks as as long as they're being accountable on a small level, we're talking, you know, more, you know, one to 50 employees. I'm not really talking about large corporations that have different levels of of progress, but and then on an individual basis, [clears throat] I would say um I would try to meet with an employee quarterly to to go over their progress. What are you doing well? what are you not doing well and reward them when they are doing well and and and again >> how would how would you >> besides the sometimes it's a pat on the back on a regular basis or financial or taking them out for dinner and whatever it is I would do it you know to show that loyalty and that commitment on your part that you really appreciate that person and and their what they're offering because they're part of the team and they're the ones who are bringing your revenue in and paying your bills. >> So progress uh analysis is is critical in in a company and it's a it's a very good point that you're bringing up. >> Yeah. And what you're saying also how important it is the relationship that you have with your employees. Um you know to appreciate them and to be humble and feel like they help you. It's not something that is like you're sitting on top and you're just uh giving out orders, you know. It's a huge part of uh building a relationship. It's what this is all about. >> Yeah. And and when you're an entrepreneur, [snorts] it's very hard to come into business and know everything that we're talking about. There's a lot of um >> a lot of different hats you have to wear in business, right? you you know that owning your own company, you start growing a business and you have to wear those hats, >> again, my advice is always is bring in good quality people that you could trust. It goes back to that trust where you could learn how to delegate. And I know it's a real difficult thing for owners to be able to delegate, but delegating and and trusting the right people to experience that with their people who are working for them underneath you is critical in in a small company. >> What you're saying about delegate and everybody likes that. I mean, everybody wants that. You know, it would be nice if I can delegate this and delegate that. If it's a struggling small company and they would love to delegate but they have no money, how do you uh tell a person like that you have to delegate? You know, he's doing everything at he thinks he's saving money by doing everything at the same time and he's ripping himself apart. But he doesn't have the money to hire new people. >> Again, that's a that is a major struggle. Yeah. You know, we keep going back to that. >> And it's it's a fortitude of a human being that you have to push through that >> and to wear several hats is is still part of that struggle of being able to run your business when you don't have money and you can't delegate. So, you have to do it yourself. >> So, in order to get over that hump, number one, you have to be organized. Again, let's get back to the basics of running your own business. You have to be organized. You have to have systems for yourself first before you start giving systems to other people. Depending on the size of your company, again, if you're a one-man show and you only have three people in a company and your revenues are only enough to pay for three people, then you you're committed to to do all these jobs, pay the bills, bring in new clients, manage, do the services, whatever it's going to take. And that's what you built for yourself. In order to get to the next level, >> it's risk. Like we we go back to how do I get to the next level? Well, is is the business capacity there? Is the opportunity to grow your business there? So you could start hiring people once you start taking on another paycheck. That paycheck has to be supported with revenue. So you have to manage that right >> internally. be be astute enough to realize, wow, I brought in another person. I delegated, >> you know, my$100, $200 an hour, what I'm worth, and I'm paying 30 or $40 and there, but we're bringing in the revenue. So, it's a balancing act all the time. >> Right. Right. That's interesting. And um as far as what you were saying is that you have to one of the ways how to increase profits in the business so you can expand is to add value right and and and uh add value in the business. How do you add value? What is a good a good idea or advice that you have for any company? Um >> well it I think it starts from the beginning of when you are opening up your company and you know there there's there's a lot of beginning steps to approach first before you even think about how you're adding value. So starting a business and believing in your product or service is critical that you've done your homework, you've done enough research to see that there's demand for your product or service. As the pro progress of your company is whether it's growing or staying stable, you know, you have to always be able to seek other opportunities or advice to see is that value where it is today or you know what other areas am I going to add to the company? Am I going to add new products and am I going to add new services? and and value is is something obscure because you really, you know, it's you really can't determine what the value of of of your company is until you go out there and see what the demand is. >> Now, do you have an example of or you have an experience with a company that was at a certain place and they just took whatever they had and they added value and it brought the business to the next level. >> Well, again, it it it all depends on what company you're you're running, right? and and sometimes I don't like to diversify what I'm good at >> and again it depends on how big your company is. >> So when when you're running a company and you're selling a service and yes it's it's always you know intriguing to come up with a new idea of what else can I do to grow my business. It's either do I expand uh ge geographically or do I expand adding products or services to my company. It's a fine line and sometimes if you don't know enough about adding another service or product then I would always say stick with what you do well >> and it works and just expand >> expand maybe on the physical basis. >> That's al that's interesting. Um talking about selling which is this is a podcast for itself just sales is is tremendous. That's the that's the motor of the business. Everything is sales sales sales. Now, how would you um advise someone when they go out and they do sales to sell to do sales from a strong point, not from the weak point because there are sales that people, oh, I need a cash flow and I need to keep the guys going and the business it's a wash machine. So, we're going to do sales and sell and just money comes in and money comes out. There is profit there, but there's it's a volumebased type of sales. And then there's sales from a storm. Like it's not easy to be a saleslessman who sells with with solid profit, you know? It's it's it's a hard sale. What is your what is your take on it? You you're a you're a bigger fan of doing selling from a strong point than from volume. >> Yeah. I mean again it depends on the times like and and business is cyclical as we know. You know every business has highs and lows. Okay. when it's when your product or service is in demand during a season, then I'm always an advocate of sticking to the strong point that you were saying, keeping to your guns >> because they need you at that time and this is your service and that's your time to just >> go for the kill. >> You have to believe in yourself and again it depends on what you're selling and and the time of year when when sales are off. Obviously, you have depending on what you're selling again, you can offer a lower price to get the volume to keep the cash flow going. So, there's a lot of businesses for instance. >> So, you're not stuck on one thing. You're saying you have to adjust according to the times. >> I'll give you a perfect example when it comes to you know my experience of business. You know, I owned the retail stores and I had um different type of businesses. So during slow season, you know, in order to pay the bills sometimes and have cash flow, you got to reduce the price to add that volume and get the the incentive for people to spend money, right? >> And that applies to a lot of businesses, right? Then during that holiday season for if you looked at the world of retail which is a big you know yeah part of business today they count on that that holiday season to get 75% of their business in two months right >> so at at a certain point you're you're depending on that volume during that holiday season to to make up your real profits and then the rest of the eight months or nine months you're just kind of like trying to coast to pay your bills. And I've seen that in many companies where they're seasonal. So depending on there's no yes, do it this way or do it that way. I think you have to look at your seasonality of business. Some people are steady all year round and never have to give a discount, right? And you you say you you sell from strength. We're a good product, a good brand. We we're reputable and we back our products. So we want you to go out there and sell and keep that price because our profit margin, our entire model is based on that certain profit margin. So you have to make that profit margin unless your sales are growing so fast that you can afford to discount your service and then it's not you're not working from weakness. You're just offering the opportunity for someone to buy your service or product at a reduced price during times when you're having cash flow problems. >> Interesting because a lot of people you hear a lot of uh [snorts] people discussing and they're saying they're not budging. They're this is my price. I know my value. I know who I am and I'll rat it at home. I I think that's um if your bottom line bottom line is good and you can stay that way and you have plenty of cash because cash is king >> then you can say that >> you could say that and and you know that's a that's a great strength to be running your company. Um >> but what you're seeing you're with your feet on the ground you see that this is not as every company has to adjust at certain >> Yeah. And I think I think Joe at at this stage of of business depending on how long you've been around, you know, for new people, you know, chasing business is, as we both know, very difficult. Again, we go back to that first five years once you get over the hump. But you also don't want to show weakness because people the other side will definitely pick pick that up, right? If they see weakness, they'll come back to you again and try to get a better price. So, Again, it it's a balancing act, but once you get over the hump and you show that your company is offering something strong, you have a little more strength. But when you're when you're weak and and you show that to to the customers, they're going to definitely pick up on that. >> Now, what's your opinion about taxi customers? You know, these customers, I always say they they want to pay for a Chevy and drive a Cadillac. What's with these customers? Is there a time and a place that that a a business owner should just know that these customers are not for you? >> Absolutely. >> And just turn them away. So when do you know that this customer is like bringing your business down? >> Well, two two things. Number one, if they don't pay. >> Yeah. >> And that you know, if you don't get money and you provided a service, you lost money. So that's rule number one. If a customer doesn't pay and they finally do pay, then you put them on a a basis where you're not going to provide a service until you get paid. So that's rule number one. U number two is it's got to come from that communication. If you have ignored your customer and all of a sudden you know they're they're a problem but you haven't known being the owner of the company and your salesperson has handled it or whatever. you know, that's about communication. I I try I I have never tried to allow myself to get to that toxicity. >> And I think it's because I always had control and I had my hands on whether I had 500 customers on my wholesale business or two customers. I I have control and I think you can't allow yourself or your your your team to get out of control. But once you feel a customer is draining you, you know, you have to say to yourself, is it really worth pursuing that? Again, depending on the profit of the customer and and and how much they're draining you. So, I don't think there's a right or wrong answer, but you have to start from the beginning of real good strong communication with with your customers. >> Right now, when does a person know that the business hit rock bottom, that it's time to close the business? What are the clues that a person should say and I because you know they say they feel that the business has ups and downs but they're not ready to close it. When does a person need to face the music and say to themselves, you know what, this thing is bleeding money. It's not working. Again, it's, you know, at this point that when you when you feel that and you're obviously your bank account, you're bouncing checks, you're not able to pick up the phone because you feel guilty that you're not paying your vendors. Um, it's a hard reality and it's very difficult. Um, but again, I'm a believer if you get guidance and professional help, just like if you had a personal issue and you, you know, you needed advice, um, I think it's a hard decision for one person to make. And at at a certain point, if you do get professional advice and they advise you legally and financially that it's time to pack it in, you have to bite the bullet and and say to yourself, you're not the first person that's closing their business. And I don't know how far you want to go to continue to drain your personal account and and your mental account, right? >> Your mental ability to function is >> has an effect on everything. huge part, family, friends, your health, >> right? >> And uh you know, again, it's it's that getting advice along the way as well. Not just waiting till the end where it's so bad and you wake up one day and you say, "My god, I don't have any money and I owe all this my bills." But if you are getting advice along the way and again go back to knowing your books and and having a professional whether it's an accountant or an a financial advisor >> showing you along the way sometimes you won't get into that that trap of of waking up one day and seeing you don't have what you expected. All right. Now, let me ask you, is it smart for a business to be a bank for their customers? Because there's some, you know, you have huge clients and at the end there is going to be a profit. But how smart is it if you have to give 60, days and lay out money um you know for your clients. >> It's it's risk risk versus reward. And being an entrepreneur, it's exactly that, risk versus reward. There's no guarantees. Your biggest, you know, and and there's certain rules of thumb that you want to go by. You don't want to have one client owe you more than 10 15% of your entire revenue because if you had one client and only one client, you're taking a huge risk. So that part I'm not a proponent. I like to spread my risk. It's just like if you had different portfolios and you were an investor, I have 5% risk here, 10% risk there. So, but in order to to gain trust of that customer, they have to show the ability to continue to pay. So, if you see they're struggling at that point after 30 days, you have to your accounts receivable department or you as the owner have to have your hands on. It's just like I said about the profits of the business or the inventory. This is your asset getting paid if you don't have that money coming in. So, you're asking the question of how far do you go? You go as far as you can handle it, right? >> With with a limit. There has to be a limit to every client that you're you're dealing with because they could put you out of business as well if they went out. >> Of course. Now, uh is there a place in a business to cut expenses? Let's say if someone sits in an office and he sits he has employees or whatever and the business is struggling is is is it really necessary to cut on these little corners or in the big scheme of things it doesn't make a business it doesn't make a difference the real problem is to go out and add value and change the direction sales or whatever. >> Well, I'm a big proponent on managing expenses >> money management >> 100%. I I get down to the to the, you know, the analysis, the nitty-gritty. And as a financial guy and a consultant on many aspects of of walking into a company, I analyze every line item. It's called a balance sheet and a profit and loss statement. So when you look at those two and and then you you analyze every single line, my rent is fixed. Can I change it? Can I negotiate it? Probably not. If you are renting space, >> your mortgage, it's the same thing. Yes, you can go to a bank and refinance at a lower rate, >> you know, but once you start looking at every line item, and I'm a huge advocate in small businesses to be able to analyze every detail of of operations. And most owners ignore that. They only look at it when times get tough and and but sometimes it's too late. So whether it's your credit card fee, whether it's your utility, certain things that you can negotiate depending on what your line item is. I'm a big proponent of analyzing your expenses first, right? >> Because once you determine what your basic overhead is and and these are things that are fixed, take insurance for instance, you can test take, you know, test your insurance company. Go out and shop once a year. I know it's work, but you know, you might be able to negotiate if someone gives you a better rate. >> You're a numbers guy. So, when you look at these things, you see numbers. You're you're like the rent, the mortgage, the all all these little things that people think it's not so important because you know what? Let's let's increase the business or whatever. You're like, "No, no, no. Every number has to make sense." Which is which is very interesting. And also I know that you're into branding and and image of the company and stuff like that. Is that how important is that for a company to fresh to refresh the business or bring it up to 2025 and also social media? How important is that for marketing? >> Yeah. Well, you you we're talking now, you know, when when you're operating a business and you're starting out or you're you're you're involved in operations now, you you've been in business for several years. Um when you first come out of the gate, I'm a again a major advocate of of branding. Um when I first started my business, I I believed if I was going to do something, I want to do it right right out of the gate. >> Okay. And I think you as well feel the same way. If you're going to represent yourself, take this risk. Do it right. Don't cut corners. Some things might cost you a little more, but be prepared to come out of the gate looking as best >> presentation is very important. >> A thousand%. >> When you say branding for a little small, average, medium-sized company, uh what is branding? Branding. Branding is is yeah branding is is a very broad encompassing word. It includes your your image, your logo, your color scheme, um how you you know your taglines. >> Well, there'sology behind it that you want people your customers to recognize it. Is it is it to see these vans to see you advertised? Is it is it like Coca-Cola branding? What when you say branding? I mean, I think I think small companies don't uh take it to heart like you're ex you're you're you're viewing it. Um, in the old days, people thought branding was a very expensive part like you said, you use the word Coca-Cola versus a small company starting out, but we have the tools today >> to be able to expose ourselves >> in a higher image and equality >> where everything's consistent. The number one thing about branding is consistency. That everything you touch, whether it's your people aren't using business cards as much today, but whether it is your social media presence or your your your office signage and and when you go out to trade shows and things, everything is consistent because when they look at a brand that it wants to be recognizable because it's it's subliminal. Branding is is subliminal in a way, but it takes time to build a brand. You can't just all of a sudden change over and expect the public if you don't have tens of thousands of dollars to promote your brand. You're starting out, especially small business. But it doesn't mean when you first come out that you can't establish a strong brand. And then the evolution if you, like you said, if you own trucks and everything, everything should look the same. clean, organized, and consistent. Consistency is number one in branding. >> Wow. Wow. Now, let's talk about employees. How does a person because everybody wants the best employees and uh is it is are you looking for experienced employees? Are you looking for um you rather train them? You know, there's some owners of businesses says, "I want employees that know nothing. They're going to come in. I'll teach them." And if you're if you're playing your cards right and you're building a relationship, then it can work wonders and the loyalty is there. But how does someone find good employees? >> Well, I'm kind of um on the fence with that today >> versus when I started my business over 40 years ago. >> And I've consulted a lot of companies and seen the level of employees and how do you get them? How do you train them? What type of employees? And I hate to say, but depending on the position in a company, there's a new world called outsourcing. >> Okay. And am I a proponent of outsourcing in a certain way? Yes, I am. >> You're talking about the outsourcing as far as Bangladesh and India and all places around the world, >> right? There are companies who do that. Yeah. >> Is almost number one today. South Africa, Dominican Republic, >> and you feel like these jobs are getting done efficiently. >> 1,000%. 1,000%. I've seen it. >> Um, these company owners are trained because they're it it's become masses. 20 25 years ago, we never knew how many companies were outsourcing, but they were. >> You know, the biggest companies like Verizon, for example, or whoever else when they >> between me and you, sometimes I get these phone calls from Verizon and I talk to these people on the phone. I feel like throwing the phone out of the window. I mean, this is like I don't I can't get communication. They talk like robots. It's it's I don't know. >> Well, why why do you think that happens? Because there's not proper training. >> Correct. >> So So it starts from the top and the owners of the company have to delegate within their company to train these people. So if you It's just like if if someone's in your office, but our world has changed now to a lot of virtual, right? Right. You can't even get it depends again if you're a manufacturer, you have to have employees in there and and and it's a tough business to to have manufacturing to pay all the benefits, the workman's comp and and and find skilled labor where you could find skilled labor. So, you know, it's a very different world today than 30, 40 years ago with employees, people, the younger generation to try to get them to come in and and work in your office. And so the again, Joe, it's a very sensitive area and and I think it's going to be a real challenge for companies going forward today to find the right employees. Now, obviously there's a pool of skilled or educated kids coming out of college, right? >> But what do they want? What world are they going into? Are they going into a physical world? Are they going into a world of technology, software, >> social media, marketing, things that require just services. So again, I think the level has become a tighter. >> You think people should look into it? Businesses should definitely look into um outsourcing. >> 100%. >> Wow. It's amazing amazing advice. It's some it's it's interesting stuff. Let me ask you, Kenny, what makes a good leader? A person wants to, you know, he's an entrepreneur and he is a he's a he's an owner of a business and he wants to be a good leader. What makes someone a good leader? Well, I think you what what what my philosophy for any task or or skill set that you want is if you don't have leadership skills and and you like you haven't been uh part of a a group and and led a group in school or some kind of organization and you now you're starting out and and you know I I have a business idea and I I I I know it's important to be a good leader. Um maybe become educated, you know, go to take some courses. >> Um and and fine-tune your skills to any part of what you feel you're weak in, right? >> And you know, we have a whole world of education, whether it's going to school or going to a seminar. I was a big proponent, >> you know, in my early days of of being an entrepreneur that I didn't know a lot of things. I knew that I would want to be successful and I had the inner drive to be but I always >> a lot of companies send their employees to seminars also to understand a little bit what this is all about. You feel that that is one this is not an expense this is a necessity is what you're saying. It is 100% a necessity and it's something that the more you learn and the more skills that you can hone in, you're going to be more effective in that company and then for your future as well as an employee. And the employer gets the benefit hopefully to keep that employee and hone their skills. But in terms of the leadership type that takes a certain you know it's 1% 5% of the population that have that skill set and could lead people versus being the person led. So but it if you don't have that self-confidence it goes back to the self-confidence but structure and you know define what a leader is. What are your skills? What are your what attributes do you own and and what do you need to learn to become a better leader? And and again, we have a whole world of education out there and to perfect your skill, you got to go out and and and learn more of of how to become a better >> person in that field. >> Wow, that's good advice. But what would you say to an employee who is uh working under a boss who is running the business as like a tyrant? He is really not in touch with his with reality. He is uh not a leader, but he is sitting over there. He's sitting over top and he has a business and the employees are getting abused to the point that they they're coming home sick and they don't like what they're doing. Uh they're stuck in this place, you know, they have to pay their bills. What's what's what's your opinion about these uh what should an employee do? Well, unfortunately, employees are not hiring me, right? >> Honestly. So, if someone was talking to me on the side, I'd probably say continue to look for another job because >> you know people, >> well, that that's that's a whole another level that that we, you know, we have to be able to nurture. And you know, if a company is finding that they're not successful and they again look in the mirror and see that they're treating their employees poorly, that's a hard reality because it that's a that's an inner soul of that person. And and it's very hard for us as a consultant or advisor to change a person, right? And for the employee themselves, they have to, like you said, they have to pay their bills and and unfortunately that's the position they're in in life. >> Yeah. Now, as far as projections, you know, a lot of uh business um strategist and business coaches and business consultants always talk about projections. They sit down and they make themselves goals. Um projections really is a projection. We don't know what is going what what it's really going to be. But why is that so important? Is it just that you mind it's good for a mindset to have a goal and say to yourselves by this year by the end of this year the sales we're going to bring it up. It's it was here and we're bringing it up. Is it just a motivation? What is what is the positive um part of projections? >> Well, you use the word projection and then you use the word goals. Okay. um they're similar but yet a little different. >> And I'm a goaldriven person. >> And I I I spent a big portion of my life working with people on setting goals, whether it's personal goals or business goals, but we're talking about business today. So, I like to write goals down, okay, on paper because I like to see them. And I and and I advise people in business, you know, not to just say, I want to grow my business. Well, that that's just a that's a, you know, it's too general. >> So, why do you do projections? And what are projections? It's a great question, >> right? >> Because most people don't do that, Joe. They they just run their business. They open the doors and hope that they're right. They fly by the seat of the pants and and Okay. So, I'm a I'm a big organized projection guy. Now, when I first started my company back way back and I had zero dollars in the bank, I had zero sales. I was the same way. I just opened, you know, I'm going to go hustle, >> get the thing going. But as time goes on, why do you need projections? Because now, >> number one, if you need financing, you have to have some kind of structure of, you know, where am I going? I need to borrow X to pay Y, right? But those projections have to be realistic as well. So you're projecting out to to see what the future is. And there's formulas, you know, you you say am I if I grow 10% or 20%. These are all assumptions and they're as good as reality. Projection is only a guidance and a you know, like you said, a goal. I want to grow my business 20%. Okay. If I did a million dollars, well, I want to do a million two next year. Okay. You got to put it on paper and analyze the numbers. Now, what does that mean? How much am I going to put in my pocket? Because how do I get to the million2? And and that's 20% growth. Are my expenses going to go up? My cost of goods are going to go up. So, you're going to have a written physical and again that takes financial consulting, right? Because most people don't look at their businesses that way. They just run every day and hope that they're going to get there. and and but the goal part and the projection part I think is critical to running a successful business. >> Very important and I know you're a very big proponent of that. Now let me ask you as far as these expos you've seen a lot uh lately and it's a very popular thing going back for a lot of years. Are you a big proponent of that for businesses to spend the money and go and spend two days or three days or whatever travel if they need to or all over the state for these expos? >> Yes, it's it's um when COVID came, expose closed down and they started doing virtual which didn't work. Obviously, people like to touch >> at an expo, right? I actually ran 15 years of my career doing small expos. >> You're talking about a good old-fashioned handshake, face to face, >> 100% oldtime stuff, >> right? But the number one part of an expo or a show is the followup. Okay? >> Right? >> And without followup, don't even do not waste your time going to set up spend 5 to 10,000 and and all that pain. It's the branding and the marketing and the shaking hands and right and but you're saying that the follow-up is way more important than you standing there and >> constant and and and you know the biggest tool we have today is email right now we we send out an email we we met someone we got their name they gave us permission so most of the time when you put that name into your email it's going to have success to get to them and I I have found from my experience that following up through emails and phone is is critical and there comes to a certain point. So you and and these expose want you to sign up. You just finished this. Okay. Well, give me a deposit for next year. If you want that booth, you got to sign up today. And that's a tough call because you don't know if you >> made money and you were successful. But the bigger companies can afford to sign up for five years because they want that special booth and they know like you go back to branding that it's also just keeping your name out and meeting your customers sometimes for the first time as well. So I think it it it depends on your budget and depends on the amount of people you have in your or organization. But I am still a big proponent of of the face to face, but they are overwhelming and and I I still think the key to success is the followup. >> Wow. Wow. Kenny, um you've been around the corner for a while. You've you've seen it all and you did a lot. You accomplished a lot. Uh my final question for you is who is your role model? >> Um it's a good question. Um, you know, my father at the beginning gave me advice to go into my own business. So, >> he would be probably the only person that I could say was a role model. And my brother-in-law at the time as well had their own business. So, going into your own business just I guess was was something within. But I guess my father kind of said, you know, if you want to have your own destination and create, you know, the good and the bad. And it it I guess it was it was a combination of my own inner strength plus my father seeing him that he had his own business. >> Wow. Very very nice. I want to thank you for coming in and I want to thank you for giving us your time. Uh you didn't sugarcoat anything. You tell it like it is. which is this is what uh this is who you are. This is your fabric. And if someone is going to get in touch with you and hire you, this is what they're going to get. >> Straight straight open loyalty, dignity, every a little flavor of all time coaching. A little flavor of all time business coaching. And I hope people are going to walk away with something meaningful, something tangible today. >> So too >> And I thank you for coming in. >> Absolutely. And thank you for having me. >> Thank you. Thank you.