Episode Transcript
[00:00:01] Hi guys. Welcome to this week's Profit First Club podcast. I've actually been away to Florida for three weeks. I've took a month off and you may have not actually realized that I've, yeah, I've not been recording live for the last month. So I've actually been away from my business for a month, which was amazing. We went to Disney Florida and it's so important to reset as a, as a business owner. But I won't bore you with, with that side of things. So if you're listening to the Profit first podcast, for the first, we talk about all things profit First. We are Profit first certified accountants. We are award winning in the UK and quite simply, we help people make more money. We actually do three things in my accounting practice, which is grow Profit First Accountants. We help you build a solid finance function so you really understand your numbers, you're up to date, you've got the data, you can make better decisions in real time. So there's a science to doing that properly.
[00:01:02] We then once we've got those foundations in place, we, we implement Profit first and we help you make more money. We help you understand your numbers to make better decisions in terms of your margins, your profit and ultimately to pay yourself more. And then once we've done all that good stuff, we make you more money, we help you save tax.
[00:01:19] On this podcast we will talk about the mechanics, the nitty gritty of Profit first. And I think I'm due for a little bit of a refresher on that soon and I'll share that with you.
[00:01:27] A little side note, I'm actually off to London to have a, to meet and have a catch up with Mike Michalowicz, the big man himself, the author of Profit first in London. I'm spending three days there, going Sunday evening. So it'd be great to be around Mike and to absorb some of his current sort of thinking. But also on this podcast we talk about anything that's going to help you make more profit, to build your dream business, to ultimately live a better life. And that may sound a little bit cliche, wishy washy for people, but I mean it 100%. Why are you in business for? Why am I in business? We are in business to have a better life. Quite simply, we want to do things we enjoy doing. We want to make the money we, we want to make so we can do the things in our personal lives that we, that we want to do. Quite simply. That might mean more traveling, it might mean helping your family, it might mean a bigger House, it might mean a better car, it might, might be mean putting your kids through school, whatever that means for you. So we will talk about other strategies kind of beyond the book in, in many ways. So if you've been listening for the last three weeks, you can go back and you can listen to that on the podcast or sign up to the newsletter newsletter on Beehive. If you just Google Profit First Club you will be able to click on all the other newsletters and recordings. So I released my own book in 2024, how to Build a business that runs without you. And I'm kind of walking the walk by taking a month off my business again this year. It didn't burn down, it didn't fall apart. Everything was fine. We had a fantastic month. The turnover was good, the profits was good and it was all good. It was all fine. And I'm not saying that I'm completely away from my business, but it's having that freedom, that flexibility, flexibility to be able to do that in your business. And most people quite frankly are slaves to the business. And if you are a one man band, it's probably a little bit different, but you can still tackle that problem. There's definitely ways around it. And you know, maybe I can do more on how can freelancers and one man bands create the environment to take that sort of time off in, in future podcasts. But in my book I talk about the entrepreneurial freedom system and it's a 10 step system to build a business that can run without you. Number one was having a vision. You got to know where you're heading. You can go back and watch that in more detail or listen to that in more detail.
[00:03:54] Number two is you need a numbers plan. It's okay having a vision, but if the numbers don't stack up, you ain't going to get very far. So you need to sense check it with the numbers at a very high level. You know, if my vision is to earn this amount per annum and to live this kind of life, do the numbers stack up? You know, that's the numbers plan.
[00:04:12] Number three are your values. I've just had a chat with, I don't know if he's listening or watching. So and I coach on a one to one basis with Profit first, who's been quite a bit of a success story in the last few years with us. He managed to triple his profit in the first 18 months. You know, it's not all been plain sailing. There's still some challenges in the business, but he's evolved so much As a business owner, it's crazy. And he had an issue with one of his main customers. He's got probably six main customers and basically they upset his wife. And he said it come down to a decision. What's more important to me, is it to keep the customer or is my values about putting my family and my wife first and that that's values in our personal life but also values in our business. So step three is getting clear on your values. And that again, it might seem wishy washy but I promise you, you have got standards, you have got rules, you've got values and it's articulating them to help you scale and grow a business. Because that's going to link into number four, which I'm talking about today is your team structure.
[00:05:18] So again, if it's just you, it might not feel relevant. However, if you've, if you've employed people, you do employ people, you probably wonder. Sometimes you get fed up with it.
[00:05:27] Sometimes you probably think, you know, is it just me? Is there something wrong with myself as a manager, as an owner, as a business owner because I can't find the right people. You know, they come, they go. Some of them just want to switch off and leave early. You know, some of them, they don't care like I care.
[00:05:44] The truth is, it's your business. They're not going to care about your business in quite the same way. You're going to care. However, there are good cultural fits for your business, but you need to know what that looks like.
[00:05:57] The core values in our business that I talked about, this is why you need that in step three. First is kam k a m. You need the kaizen mentality. You always want to improve.
[00:06:08] Continuous improvement. That's what kaizen means as a Japanese term.
[00:06:11] Above the line thinking. No excuses, no blame, no denial. You need to own your own.
[00:06:17] I want to swear there, but you need to own your own stuff.
[00:06:20] And N is no eels. E awes. So if you've watched Winnie the Pooh, we know about Winnie the Pooh. There's Winnie the Pooh, there's Tigger, there's Piglet, there's Eeyore. He's the kind of the, the donkey who's miserable all the time. And it's another gloomy day. Pooh bear and he gets out of bed and he sort of slouches out of bed. I don't want people like that in my business. I don't want positive toxicity, but I also don't want people that are going to drain my energy. There's energizers and there's drainers. When it comes to people, I want energizers around me. I don't want to get out of bed, put myself in a good mood, go to the gym, read some really positive stuff, journal, meditate, whatever I'm doing, get to the office and someone just drags my energy down.
[00:07:02] So that's why Corvio is important. But this links into step four, four, which is building your dream team. And I'm sharing this from a position of mistakes I've made.
[00:07:14] I've, you know, when I've grown the business, the turnover was going up, I just needed someone, I needed to hire someone, I brought someone in, you know, with experience.
[00:07:22] You know, sometimes it's often people you know, but some of them work out, some of them don't. And they were quick fixes.
[00:07:29] But ultimately they didn't meet the standards of the business. They didn't meet my long term plans, my long term goals. I wasn't clever on my own values. So how can I be clear on my expectations of my team if I'm not clear on my own values? And that's why step three, getting clear on your own values is so important. Go back to last week's podcast if you haven't heard that.
[00:07:55] So that was the mistake I made. And also having no bigger picture blueprint, you've probably heard of an organization chart or if you follow the EOS system, an accountability chart. Who does what, who reports to who, what's their responsibility, you know, what's their job at a very high level.
[00:08:14] And if I'm going to scale my business in the next one year, two years, five years, 10 years, what does that look like? How many team members do I need? Is it one big team? Is it a flat structure? Is it a deep and narrow structure? Who reports to who? Do I have one client manager or six client managers? Do I have a head of the bookkeeping department?
[00:08:33] Do I have head of profit first? You know, what does that mean for you? I speak in someone recently and he simplified his structure and he's like, you know, I've got the property maintenance, which is all the normal routine stuff I've been building over the last few years. I've also got the building contracts and the bigger building work and he's simplifying it by having a separate structure, a separate team. It might be some outsourcing, some, you know, some subcontractors, but you need to think about, do the thinking for your business. Thinking is hard. Most people just don't think Earl Nightingale, who was one of the early kind of leaders, influencers in terms of personal development and positive thinking, way before your Tony Robbins of this world and your Brendan Bashar's and all those sort of people, they asked him and I think it come from someone else. But he, you know, he made this, popularize this thinking was, why are most people in America not successful? And Earl Nightingale thought about it for a second and said they don't think, they don't think enough. And what does that mean? It means, you know, planning your goals, what do you want to do, what do you want to achieve? It means asking questions. So asking the question of what does my team structure need to look like to take me to go where I need to go in my business? Because I can promise you if you don't have a clear team structure, it's going to be a big struggle to grow your business.
[00:09:57] If we think of football, you know, the best football managers know the people they need in the right positions. They know the type of striker they need. They know the strike, the type of defender, the type of midfielder that the profile of the goalkeeper. You need to get clear on the plan for your team.
[00:10:14] So there's, you know, values are really important and there's a few tools that we can talk about. I talked about the accountability chart. I openly share other people's processes systems and I give them credit when it's due. The EOS system is a fantastic system for people to build a business. Typically I think it's for people probably a business at least half a million revenue, maybe even a million plus below that. My book how to build a business that runs without you is really good for smaller businesses because the EOS system's a bit too much. There's too much going on. However, I will pick and choose and share things that I feel work for most businesses, regardless of your size. The accountability chart is who reports to who, what do they do, a few bullet points, what they're responsible for.
[00:11:01] And one of the lessons I learned from the the Business E myth, a famous book by Michael Gerber. How to build a systemized business a bit like McDonald's, a turnkey operation that runs itself. Everyone knows what they're doing. In McDonald's. One of the things he shared was people are an manageable. Just think about that for a second.
[00:11:22] Think if you've had challenges with your team, I want you to release that, that tension that you know, that beating yourself up, that maybe you're making mistakes, people are unmanageable. Hopefully that makes you realize it's not about you hiring the wrong people.
[00:11:38] It comes down to the system. You need a system to manage the people. That's what happens at McDonald's.
[00:11:44] Yes, there's managers, but people learn to know the system. And as business owners, we need to manage the.
[00:11:52] And the system manages the people. People are more like cats rather than dogs. You know, dogs are loyal, they follow. They have this pack mentality. Cats do their own thing, they don't care. And people a little bit like that doesn't make them bad. It's just human nature. So we need to create rules of the game for our team and, and the business. E Myth how to Build a Systemized Business is a fantastic book to read.
[00:12:17] Also Clockwork again by Mike McCallowicz. If you've read Profit first, you probably like his tone. He's really engaging, he's really fun, he's really interesting. He's a great storyteller.
[00:12:27] Clockwork is, is a fantastic book about building a systemized business as well.
[00:12:34] Also, you need to lead this from the top. You know, it's going to take time. If you're trying to change the culture in your business, you need to, you need to communicate with your team so many times. If you know the values, you know the expectations expectations, you know the, the standards, the accountability chart, the rules of the game.
[00:12:50] If you, you can't just tell your team once, you need to tell them seven times, 20 times, you need to keep on repeating it so it sinks in. And you need to lead that from the front. And there are some tools. I'm not going to go into detail. You've got the People Analyzer from the EOS system. Google the People Analyzer. Really powerful tool to figure out, have I got a problem with this team member?
[00:13:12] Are they a good fit? You know, reach out to me personally if you want some guidance on that. But you can Google the People Analyzer. You've also got the Jack Welch matrix, Performance Matrix. And he was the. The CEO of GE Aviation, which was previously Smith Industries, one of the biggest businesses in the world. And it's, it's actually local to us in Cheltenham, Gloucestershire, and it's in the aviation industry. And he basically realized that, that, you know, people with the wrong attitude and the wrong values not meeting your values. Can you see how it keeps on coming back to your values and your standards? People that, you know, they might be so talented, they might be a high performer, so experience, but their attitude stinks. They don't meet your values, they are toxic to your business. They will drag your business down, they will be like a cancer. They will be poisoned. So I urge you, if you've got someone in your business, and always speak to a HR expert. By the way, I am not a HR expert from a legal perspective, but I urge you, if you've got someone in your business who they're talented, but their attitude is terrible, they drain your energy, they bring the team down, really think about what you want to do about that situation. Maybe speak to a HR expert about that. But the Jack Welch performance matrix will help you rank your team in terms of are they high performance, low performance, high on values? Low on values. Ideally, you want them to be high on values and high in performance. And. And you want to empower and reward those people.
[00:14:43] If they're low on values and low on performance, they shouldn't even be in your business. You know, they get rid of them as soon as possible.
[00:14:51] Yeah. So hopefully this gave you stuff to think about. I just want to get the juices flowing, the neurons firing up in terms of the importance of building your dream team. If you've got any questions, as always, please feel free to reach out to me and my team.
[00:15:07] As I said, we help entrepreneurs scale their business profitably and sustainably in a more proactive way. And feel free to reach out if you want to chat. Cheers, guys.
