Episode Transcript
[00:00:00] Excuses. Here I am. So, hi, everyone, and welcome to the Profit First Podcast. So, I'm Stephen Edwards. I'm the founder of Grow Profit First Accountants. We help business owners essentially build a better business so they can live a better life for themselves and their family. And one of the ways we do that is we share insights and strategies and from a place of real experience, from our accounting practice, Grow Profit First.
[00:00:33] Being close to the front line, really, and seeing what works, what doesn't work, and sharing our learnings and our insights. One of the core foundations of the podcast is, of course, Profit first itself. I will always bring it back to Profit first and how you can get the best out of Profit first for your business.
[00:00:52] However, I believe that Profit first is more than just a system. I believe it's more than just the book. I actually think it's a way of kind of life for your business. And let me just kind of explain that in a little bit more detail.
[00:01:09] So we start our business, in my experience, for two main reasons. One is to have more freedom, and one is to have more money.
[00:01:18] And the freedom and the money are actually super connected.
[00:01:22] You generally, you need the money to probably have the freedom to do the things you want to do. However, a lot of business owners, and there's lots of studies out there saying as much as 80% of business owners are living paycheck to paycheck, so to speak. And that's all relative. Paycheck to paycheck might be £5,000 coming into the business as revenue every month. It might be £100,000 coming into the business.
[00:01:49] But essentially, virtually everything that comes in, it goes out. And then that, that kind of way of running a business, a way of operating a business, is kind of a way of life. It impacts your personal life as well. And you don't necessarily have the buffer, the space, the space that, the freedom, that extra bit of money to have the peace of mind, not needing to chase revenue all the time.
[00:02:15] And the problem is with a lot of business owners is they end up chasing revenue and they kind of get stuck into the routine of doing things and they actually end up having less freedom.
[00:02:27] In my experience, a lot of people who are not business owners, they seem to think that business owners are killing it. They're smashing it. They've got so much money that, you know, they're, quote, unquote, they're rich.
[00:02:39] However, the majority, 8 out of 10, are kind of just making things work. They're paying the bills and paying themselves, and they're probably not paying themselves as Much as they truly deserve for the effort they are putting into their business.
[00:02:54] And actually, they're probably working more hours than anyone else in the business. They're probably the lowest paid employee in many cases because they're wearing so many hats and they're doing so many things. So why am I talking about this? Because they have less freedom.
[00:03:10] But that's not really the topic of today's conversation. The topic of today's podcast is how can we break the cycle? And how can we break the cycle by not actually reinventing the wheel too much, by not chasing shiny new things, not trying to build a side business on AI, trying to do some new marketing hack. There's a time and place for those things. But the truth is success is not behind the door that says wow.
[00:03:40] It's not behind the door that says shiny new thing.
[00:03:43] Success in many cases in business and life are doing certain things and doing them well and doing them consistently. Yes, you have to have the right strategy. If you've got a broken business model and you've not got the right position in, you've not got the right way of the USP unique selling proposition or selling point. If you don't stand out in your marketplace, if you're a commodity, if you blend in with the crowd, you've probably got the wrong strategy around your positioning around your marketing. However, assuming you've got a lot of the things correct in your business, you've got the core things correct, then what? You don't normally need 10 new ideas. You need the discipline of following through. And there's an expression, small hinges can open big doors. So in other words, it can be these little things that unlock the breakthroughs. And when you do lots of little things, well, if you can get a 5% improvement here, a 2% improvement there, a 10% improvement over here, it can have an exponential impact and you can end up doubling and tripling the profitability in your business. I want to talk about how I want you to fall in love with average.
[00:04:56] I want you to fall in love with the ordinary.
[00:05:01] I've just, you know, I, I walk the talk when it comes to coaching and mentoring. I coach one to one other accountants and other business owners and I love helping other people build a better business. And there's so many things going on in business.
[00:05:15] I, I just love, I've got a passion to share what works, you know, from my own experience.
[00:05:22] But I get mentored myself. I believe everyone, a coach should have a coach. We should all be learning. You know, every day is a school Day, so to speak. And one of the people I spent some time with last week, and I've been working close with him this year, is a super successful person in the accounting industry.
[00:05:39] And what I love about his approach is it all seems very normal.
[00:05:44] I'm a 20 ideas a person week person, you know, if not more. I probably have six ideas every single day.
[00:05:52] And he's so grounded and he just sticks with the things that, that work. And he's had huge success by doing less things, but doing them well, doing them really well and really optimizing those things. And I've took a lot of inspiration from this. I still believe we need to go with our passion, go with our intuition, follow the ideas, but you can't chase every single shiny new object. And I want you guys, and I'm trying to teach myself to fall in love with average, fall in love with the mundane. I want you to figure out if you're doing, you know, 80% of your business is probably business as usual. Rather than spending half your energy on all these new things, think of the things you are already doing in your business. I think, how can you make them better? How can you make them better for your customer? And if you make them better for your customer, you can charge more because there's more value. They're going to enjoy that benefit. It's going to value them as a business owner, as a customer, and it's going to be, you know, something they're happy to invest in with you because they're getting more use out of it. You'll, you're helping them achieve what they're looking to achieve in their business.
[00:06:59] And obviously, I don't know, whoever, if you're, if you're listening to this now, I don't know what business you're in, but it could be, you know, service business, it can be a product business, but whatever it is, how can you be of more value to your customers? But how can you be of more value in a way that doesn't take too much from your resources? How can you kind of get a quick win? And I'll give you an example, and it's one of the best examples for this you'll probably ever see in, in business, but it also affects us in everyday life. Is McDonald's.
[00:07:31] McDonald's, rightly or wrongly, in terms of the, the moral side of this are notorious for. Do you want to supersize that? Do you want to go large? And there's an example that people see the value in going large because they, they want more And. And they're willing to pay for it. What's the equivalent of not necessarily supersizing it, but quick wins extra value in your business? It might be a little bit more. It might be going large. It might be a complimentary product. It might be something that really accommodates that thing. So McDonald's, for example, it's burger. Burger, fries and drinks is the core. You know, the drinks might be milkshakes, it might be coffee. It might be smoothies. It might be frappuccinos. The burgers might be 10 different types of burgers.
[00:08:16] The fries are pretty much the fries. You might be able to swap it for a salad. But they've got those three core things, and they complement each other. What can you do more of in your business? Are you missing out on an opportunity to do more? And it's so easy for you to do it? Is it just putting something extra in the box? Is it just bundling up your service so there's that extra thing? But what we don't want to do is we don't want to reinvent the wheel. We don't want to pivot a lot of people. Just because you can do it doesn't mean you should do it. Get obsessed with, oh, I can do this, I can do that, I can sing, I can dance, I can.
[00:08:48] I could do all this stuff for you. But it comes down to resources prioritizing and energy and bang for your buck. But is there something you can do a little bit more, Add a lot more value and make more money at the same time in your business?
[00:09:03] Also, one of the things you can do to optimize your business is.
[00:09:06] Is look at your pricing. You know, we're going through our pricing now, and we try to do it at least every year. But I speak to business owners, and they've not reviewed the pricing for three years.
[00:09:18] Inflation is not stopping for anybody. If you are not putting your pricing up, if you've not put your pricing up for over a year, certainly more than two years, you are effectively giving away a discount. And I know we have this fear, and it comes down to a little bit of a scarcity and abundance mindset. We have this fear of, oh, if I put my pricing up, are they gonna leave?
[00:09:40] I think that's. Normally we've got a bigger fear ourselves, as the business owners, than our clients actually have that fear themselves. Cause the truth is, putting it up a few percent every year is as long as you're giving value is not really a big deal in your customer's eyes.
[00:09:58] The big Brands we deal with the apples of the world, the Amazon, the supermarkets, the petrol stat, your phone provider, your sky, your bills, they do it all the time.
[00:10:11] So what I want you to realize is if you're not putting your price in that, you're effectively giving away a discount. So let me kind of bring this back and summarize and clarify. Why am I talking about all of this? So I've talked about, do you want to supersize that? Can you have a complimentary product?
[00:10:28] Not chasing shiny new things, not discounting. I'm trying to give you ideas of different parts of a business that affects all of us. Your pricing, your complementary products, the value you're providing to your customer or your clients, where we can make small changes that can have a huge impact on our business. If you were to do all of those things, you quite honestly could potentially double your profit in the next two years. I don't know your numbers, but we do what we call a 555 review and we started doing them. Handful of people and we actually show you. I've talked about this in a previous podcast. We show you how these changes can make a huge impact into your business. We take your numbers, we plug them in, we put them into our software, we do some reviews. And the reason I call it a 555review, and this is just one example, there's so many different things, ways of attacking this, but if you were to put your price in it by 5%, decrease your cost of sales by 5%, decrease your overheads by 5%, for some people that could double their profit. So the idea is it doesn't matter exactly which strategy you're using, but it's thinking about it, it's having the intention of if I make these small changes, these small tweaks, what impact can it have on my business? And it's a lot easier than introducing, implementing completely new business models, new services, new products. Is there a way of doing more of what you're already doing and making it more profitable? So when I say I want you to fall in love with average, I want you to fall in love with the things you're already doing. But how can you make it work even better?
[00:12:11] And this can make a huge impact on your numbers. Any questions? Guys, feel free to reach out to me. You can reply directly to the news letter if you're listening to this. It's Beehive, the Profit first club. If you Google it, you'll find us and you can subscribe or you can search for Grow profit first. Accountants the website is www.we are grow, which is a G R o gro without the w.co.uk we are grow.co.uk and get in touch. I'm more than happy to answer any questions you have and have an amazing week. Cheers guys.
[00:13:10] Sam excuses here I am. Sorry.
