136: How to Easily Understand Your Interior Design Business Finances

Michele  00:00

Hello, my name is Michele and you're listening to Profit is a Choice. Joining me on the podcast today is Jack Tompkins of Pineapple Consulting Firm. Jack began his career in the insurance world where he focused on analytics, financials, and building relationships. Now he works with business owners to turn their flat data into beautiful visual representations to make analyzing and understanding that data so much easier. This was a very fun conversation to have. And it seriously inspired me with the possibilities. So listen in for ideas on how to turn all that flat data into something more.

Michele  00:45

Every day empowered entrepreneurs are taking ownership of their company financial health, and enjoying the rewards of reduced stress and more creativity. With my background as a financial software developer, owner of multiple businesses in the interior design industry, educator, and speaker, I coach women in the interior design industry to increase their profits, regain ownership of their bottom line and to have fun again in their business. Welcome to Profit is a Choice. Hey, Jack, welcome to the podcast.

Jack Tompkins  01:16

Hey, Michele, how are you? Thanks for having me.

Michele  01:18

Oh, I'm doing great. I'm excited to have this conversation. We had a little bit of a pre conversation, and I always have to be careful when we do that, because I'm like, Oh my gosh, so much good stuff. You know, hold it, hold it. Hold it until we get on the podcast. 

Jack Tompkins  01:31

Right, right.

Michele  01:32

What I am not worried about is filling any time today having an awesome conversation.

Jack Tompkins  01:38

Oh, yeah, we're gonna have a blast.

Michele  01:39

So Jack, you have an awesome company, Pineapple Consulting. Is that right? 

Jack Tompkins  01:46

Yep, pineapple consulting. I love it. 

Michele  01:48

For those that can't see you, you've got your pineapple shirt, your company logo behind you. I love it. But this is a newer venture for you, so this isn't something you've been doing forever. Many of my listeners are coming to their jobs or careers now as interior designers and drapery work rooms and stagers as second and third career choices, right? So they started somewhere else and it's morphed into this. I would love to hear a little bit of your journey if you'll share with our listeners on what you did prior to Pineapple Consulting. And then what led you to start the business you have today? And then we'll move on later and talk about what you actually do. But I'm interested in the journey.

Jack Tompkins  02:34

Absolutely, yeah, it could be somewhat common for folks. So started in the corporate world, and realized, hey, I want to do something on my own is the short version. The longer version is I was at an insurance company, great people, great work. And I was through like the leadership development program, and all that fun stuff. And I was an analyst in a few different capacities. So always dealing with data. And my goal as the analyst was always to make it presentable and digestible, for the higher ups and my bosses and bosses', bosses and all that fun stuff. So that was all fun and great. And at one point, I had to kind of decide what I was going to do for the next three to five years in the company. And it sort of hit me that this isn't really fulfilling my entrepreneurial bug that I've always kind of had. So I put some feelers out in the market and said, Hey, like, I can do this analytical stuff for a big business. I wonder if small businesses need the exact same thing, but just don't have the resources. So the feelers I put out, they came up really good. And it seemed like a very necessary service. So I actually started in April of 2020. So right at the beginning of the pandemic, I went full time. And it was sort of practicing what I preach. I know we talked about it a little bit in the, in the pre call of people need to know their numbers. And at a time, during a pandemic, you really need to know your numbers and scrutinize every piece of it. So I figured why not now, and it's been an awesome, awesome time since then.

Michele  04:12

You know, the truth of the matter is, you're right, we needed to know the numbers then but we needed to know the numbers well before then. But even more so is just highlighted what we needed to know. And in my own coaching practice, the minute we got shut down, if you will, you know, in that. I think it was like, oh, gosh, Friday, March, Friday, the 13th of March. Yeah, that's right. It was kind of like, what Friday the 13th that's why we're gonna always remember that. And on that Monday, March 16th, you know, the world was different from you're not going to work, you're not going to school, everybody's at home. And at the time, people thought that it was a two week thing. You know, here's 14 days and then we're going to go back and things are going to open up. Right? And I started immediately getting on with my client base and saying okay, I called it your cash flow position, you need to know your cash flow position, I actually have a freebie out on my website, if anybody's interested. But it was where are you right now? What is your cash? Like? What do your numbers look like really digging in? Alright, let's start looking at your expenses like going through work that moment not waiting. And you know, I had a business that I started back in 2000. And so I lived through that 2008, 2009, 2010 recession, what that looked like, and the people, Jack, who knew their numbers, were able more quickly to pivot their business and to make decisions, sound decisions, right? Then those who didn't know, they just kind of kept hoping that it was going to be okay, no, we all had hope. But those of us that knew our numbers and knew what to do and how low we could go and when to say yes, and when to say no, we were a little bit better equipped to weather that storm than others who weren't, like we knew what our break evens were, we knew how to keep the lights on. And we knew when we were in trouble, I think that's a big part of not knowing numbers, is not knowing when you're in trouble, or how bad the trouble is that you're in.

Jack Tompkins  06:14

Right, exactly. And something like 2008, and the situation now, knowing your numbers is really at the forefront, or should be at least for so many different companies. Because of that, it's how low can we go? And also when times are good to knowing your numbers is also a great thing of how high can we go?

Michele  06:31

Exactly. What are the opportunities in front of us? And wow, so starting a business in the year of a pandemic?

Jack Tompkins  06:38

Yep. Call me crazy.

Michele  06:41

You check that off the bucket list,

Jack Tompkins  06:42

Right? Yeah.

Michele  06:46

Well, and you know, I think sometimes we don't think about it, but there is a lot of analysis that goes on with insurance companies. You know, if we step back, we don't always think about that. But when we step back and think about it, it is a lot. I mean, there is a lot of data that flows through insurance companies, actuaries, all those types of positions, that you get to step back and go, Okay, what, what is our risk? How often does it happen? What do we have to pay out, and that's how REITs are set. And that's how, you know, decisions are made, and it is heavy data analysis. So I am certain that if you did that for many years, you definitely have built up that data analysis muscle, if you will, to be able to then apply it to other businesses.

Jack Tompkins  07:31

Yeah, it's sort of my go to now. It's just, whenever I'm faced with any sort of problem, it's alright, let's check out the numbers first. And that's where I start.

Michele  07:40

So, let's chat about that for a second. Because one of the things that came up again, in the pre call was the idea of looking at empirical data versus always having a gut reaction. And I'm not saying we don't check our gut reaction to things because sometimes there are, as I would say, flags waving or, you know, clients giving you red flags, or whatever it is. But there's also this idea that my gut tells me what I shouldn't do. And then the data is not there to support it, I see that quite often, where people are looking to scale, my coaching practice is focused on scaling your business. And if we are not careful, we can grow so quickly that we can't meet the need, our brand promise falls down our brand messaging is off. Like we have problems. I've seen where people move out of their home too quickly and move into a building. And now all of a sudden, they've got these extra rent payments, and they didn't think about all the extra payments they're gonna have to make over here, or now they have to staff it. So they have employees, and, you know, it just snowballs after a while. And so it is super important, I would say to be in touch with how we feel. But to back it up with empirical data.

Jack Tompkins  08:55

That's exactly right. I couldn't agree more. My little tagline for it is combining the art of the gut instinct and the science of data. It's not that both are both are totally necessary.

Michele  09:06

Yeah, because it's even like with pricing, I always say pricing our work is as much art as it is.

Jack Tompkins  09:12

Exactly. Right.

Michele  09:14

There is something there is the difference between strategy and then tactical action. So as you have taken a step into this world of looking more at building these dashboards and making these numbers and this data and analysis open for small businesses who haven't had it before, what do you see as the numbers that they most often want to look at? I mean, I understand every company has different KPIs and different things. But what are the numbers that you see kind of across the board that like, here are two or three basics that everybody either wants to look at or should look at?

Jack Tompkins  09:57

Yeah, I'm going to start real, real simple and revenue and profit. That's, I mean, it's in every single business. And that's the telling factor of pretty much every business. And so knowing those is great doing a comparison, which I think you mentioned in your last podcast, or one of the one of the Year End review podcasts is comparing it's different timeframes. So, revenue from last month, great $10,000, whatever was, how does that compare month over month has it compare year over year? Because that number itself is fantastic. But when you get a trend out of it, it adds a whole lot more context that can honestly just off the bat tell you from a revenue and profits endpoint, which is how your business is doing. That comparison tells you right off the bat, okay, things are good, or things are bad.

Michele  10:47

Yeah, I think sometimes when we look at a number out of context, it's just a number. Kind of like when somebody when we talked about even setting goals, if you're setting a goals without a strategy is just a goal. And there's no, there's no real tie to it. Right? And so I know that for me, the numbers that I always look at similar to what you said is I want to know, what is your revenue, I'm going to know what your gross profit is, I want to know your expenses. And then I want to know, net profit. And then I take net profit and break it down even further as a profit first, professional, I want to know how much is owners compensation, how much is going to taxes? How much is going to, you know, your 401k? Like, we're really looking at these numbers. And the analysis part I find very interesting. I have always been one, of course, I built financial software for 10 years. So that was the way we were trained. I mean, you had to be able to analyze, it wasn't enough to just look at a number and go, that sounds like a good number. Right? Which is what we do sometimes, oh, what revenue Do you want to have, I want to sell $100,000 or 1 million, but we don't tie it to anything else. We don't then say and here's how profitable I wouldn't be with that. Or here's the other numbers I need to look at. So I can work with a company that does a million in revenue to your point and makes no profit. And I can work with a company that does 100,000 in revenue and makes a profit, which do I want, I'm gonna go 100,000 in profit all day long, over a million and headaches and no profit. And so tying different numbers together, that analysis is important. You know, something that's that I'd love for my clients to do. And I'm certain that you probably see in some of it is not just doing many, let me let me back up many times when we look at a year, let's just talk about revenue profits, right? Sure. We look at a year from January to December.

Jack Tompkins  12:39

Yes.

Michele  12:40

And what I love to do is look at it from January to December, compare it to January to December of the last maybe two years to see where we're going. I like to look at each month like let me check out October of this year. What did October of last year look like what decisions were happening in October. So not by itself. But then I always as well love to do like a rolling year. Right? So they may look at October of this year through September, October, November of last year, sometimes I like to do 13 months instead of 12 months.

Jack Tompkins  13:14

Yep. I'm so glad you said that.

Michele  13:16

If I make a decision that I'm changing, let's say that I've changed my pricing model. Well, of course my data is going to be skewed. If I made a decision to change my pricing in July, and I'm looking at everything from January through December, then it's an average. If I really want to see the changes in my, in my financials, I need to look at July to December and compare that to July to not skew it. Right. So it doesn't mean I don't look at it. But I'm chopping the data multiple ways I have my clients move their quarter quarters aren't just January, February and March. Yeah, about February to April. Like let's roll them and see what they look like. And it changes the way you see everything. It's almost like we are used to looking at a picture one way and you stand to the left and stand to the right, exactly something you didn't see before.

Jack Tompkins  14:15

Yeah, I'm so happy to hear you say that it's so true. It's you know, January to  December is it's great for a lot of things. Obviously taxes is probably the biggest one. And it's something that is ingrained in everybody's head. So that's perfectly fine way to look about it. But when you do the rolling 12, 13 months, it had such an important lens because to your point and I was actually gonna use the exact same example. If you change your pricing or maybe different example you change your sales pitch. And that happened in July. Okay, let's say that's, that's the new January quote unquote. And let's look 12 months from there. How did that compare to the prior period? And being July to, I guess June of the following year, there's nothing tying us to January to December. It's just pick the 12 months or three for six months, that make the most sense, given changes in your business, and it's just opens up so many new doors.

Michele  15:08

You know, I'm not sure why we have been so ingrained other than just the calendar year and taxes are based on that. But in our industry in the interior design in the building industry, you know, our builds and our designs cross years, they cross borders, it crosses months. I mean, we're not, unless we're doing a consult or something super quick. We're looking at 3, 4, 6 months on some projects, and two years on a home build, right? These are not quick things. So the same way that we would look at a project across a span of months, or weeks or years, we need to be able to look at our business that way. That data is not always easy to get. I'm a QuickBooks user. And I know a lot of my listeners are in QuickBooks, if not, they're also in other applications that are providing some of their financial data. But they are not all as richly at it not inept, they're not they are in app, but they are not as able to create rich reports and some races that allow you to slice and dice the data. What many of these programs do is they give you the most asked for data? Here's the data most people ask for. And here's the way most people ask for it. And so that kind of keeps us in the box when we're looking at the data, because that is what we've been given. Or that's what we've been told we need to look at.

Jack Tompkins  16:36

Exactly, yeah, and, and QuickBooks and Freshbooks, Zero, whatever you use. They're all similar in that sense of here's the most common things. And a lot of it's just what kind of invoices Do you have, how many are overdue, and all that fun stuff, important things to know, absolutely. But when you're doing a Financial Review, or projections or anything with financials, getting it into a format that makes the most sense for you is not often the default view in QuickBooks. And one of my favorites is just pulling up the P & L and QuickBooks fantastic data, great numbers in there. But for a lot of people that maybe aren't loving, just going through the numbers like you and I do Michele, they're just looking at a black and white piece of paper. And it is boring. And so one of the things that I do is take that data and put it into charts and graphs and put it in their brand colors and, and design it. So it is very customed to them. So it's actually almost a little bit fun to look at. I mean, they're all fun for me to look at. But hopefully for the client. It's actually enjoyable too. And it makes things so much easier to just jump off the screen. During those 12 month rolling time periods during a 24 month rolling time period. Whatever it is, that's a huge, huge piece. I think just visualizing the data with colors, charts, indicators, things like that. It makes a huge difference.

Michele  17:56

It's so that is so true. Because I've told the story before so I back in January of 2020 one of my things was I wanted to take a watercolor class. And I've always loved painting. I'm not going to say I'm great at it. I can probably get by, but I mean, nobody would pay for my artwork. Right. But it was just something I've wanted to do. I felt this need to express myself. Well, I'm also very logical. I mean, that is just the way my brain works. I am left brain logical over right brained creative, I am creative, but it is secondary to my logic I create within logical constructs. It's just the way God made me. Okay, so I go to this watercolor class, and this teacher is completely right brained creative. She's drawing stuff on the board, and then she's not walking through it linearly, which is throwing me. And so she's like, telling us to do something that's not on the board. And so then she's like, well just make it up as you go. And I'm thinking, Oh, this is like, it challenged me. I wasn't challenged by the painting. I was challenged by following the instructions and doing things the way she wanted me to do it. And at one point, she was saying to us, I want you to go paint like, I don't know, like a mountain scene. But we had nothing to look at. So we're sitting there thinking, yeah, oof is right. How do I go create this mountain scene. I don't even know if I could recreate one. I'm trying to create a mountain scene in my head. And I raised my hand and I said to her, I I can do a P & L and a balance sheet from memory. I could paint that. That thing, the mountains scene in it, I don't see it. I need a picture. I need something to be able to see this scene, right so that I can do it. I work in in financials all day every day. I couldn't paint that, but it's going to be flat. And that's just what it's going to be. Right so right so conversely, you go back and you move into the design world and designer And stagers and workrooms, we are dealing with color. We're dealing with beautiful things. Yeah. When they look at financials to them, it's the equivalent of me trying to create a mountainscape out of my brain. It's exactly right. It's a flat piece of paper. And I always joke when I say, Did you review your financials? And they say, yes. And I said, does that mean you looked at it? And said, yes, I got it and check it out? Or does it mean that you know, what you're looking at? And what you're looking for? And are you able to use those numbers to assist you in moving forward? That answer by and large is about a five to 10%? Yes, and 85 to 90%? Or 90 to 95%? No, right, exactly. And what they say is, it needs to be pretty I need, I need, because they think, right in that creative space, they think, much more picture, much more color, those pie charts. And all of those graphs are easier for them to read than raw data on a piece of paper. And that is okay. They choose software, sometimes not based on the software. And this isn't a bad thing. software companies, if you're listening, listen up. They are not choosing software, sometimes based on the functionality there. They're choosing it based on how beautiful it is. Yeah, that makes sense, because they are working in creating beauty. Right, right. And so what you're doing is giving them a beautiful way to look at the data.

Jack Tompkins  21:26

Exactly, yeah. And it's so true when you're picking out a software company. And it's if it looks appealing. That's, that's a huge piece of the puzzle. And that's a lot of what I do for my dashboards too is like, I don't know, 20% net profit margin, is that good is that bad, we don't know, if you have it on the speedometer, when one side is green, and one side is red, and you've got yellow in the middle. And you can see that 20% is all the way in the red section, then, okay, that's a clear indicator for you. And it's just things like that, seeing your revenue or your profit over time, and the bars are getting bigger as you go from left to right. It just makes things so much easier. And especially with the interior design community. And I think most people, if they see a red X on a screen, they're gonna know that that's bad. Whether you love financials like you, and I do or you hate them. Something like that is pretty universal. And so it's just that visualization piece is so so nice.

Michele  22:25

So I've created a few spreadsheets in Excel for my clients as they work through my programs. And then one of them, I have it where they put in their goals for the year their financial goals. And then every month they're monitoring to the goal, not just a number, but to a percentage, because we do a lot based on percentage, not just the number, right. Awesome. And I have it in Excel coded so that if they fall below the percentage, it flashes red. Yeah, it goes above the percentage, it says green, right. And so sometimes it throws them because of the numbers that they see. But the green and the red, go, you're okay or stop, whoa, pump the brakes, baby, this is the problem. Because otherwise they look at it and they don't always know what they're looking at. So I tried even just in a couple of small spreadsheets, give them a warning, you know, as a warning, Will Rogers like danger, danger. You're getting into territory here you don't want to go into.

Jack Tompkins  23:23

Right, exactly.

Michele  23:24

I love that idea of being able to visually see how the data works and how it's working for you. And you probably do this as well. Do you then not only create the dashboard Jack for them, you and your team, you create these things? Do you teach them how to read it?

Jack Tompkins  23:47

Yes, yeah, cuz a pretty picture is great. But if you don't know what it's telling you, that's a whole other issue. So that's sort of step two is going through and okay, this is what this means. And to your point, against your measuring its budget rather, one of my common things is you have, you know, a solid fill in blue bar, and then like a transparent, but still visible bar above that. And that total thing is your budget. So if you've got any of that transparent left, it's okay, I still need whatever it is $5,000 more or 5% more to hit my budget. And so we'll go through things like that, and how to actually play with the dashboard, because it is kind of playing. It's very interactive, you get to pick your month, you get to pick your timeframe. And you go through and I often do things that are like, here's where this is coming from, probably mostly from QuickBooks and a lot of situations. And here's what it means. So a little comment comes out of whenever your profit is 20% against the industry standard of 20, 30%, or something along those lines. So there's always some commentary within the dashboard. That'll sort of be there. After my conversation of walking through it with them.

Michele  25:02

So it kind of creates a reference point, almost like when you're reading the map, and you have the guide at the bottom. Yes, that kind of shows you a mile is this long reference point for what you're doing.

Jack Tompkins  25:13

That's exactly right.

Michele  25:14

Now, when are you so when you have started working with these smaller companies, and you go in and you help them create a dashboard, do you go through a discovery process, Jack, with them that says, because here's what I'm thinking. It's not just our financials, not like everybody knows, I'm gonna scream financials from the rooftops because that's what I do. And I want to encourage anybody listening who says budget, what is a budget, I don't even have a budget. And in my understanding your financials course, I teach you how to create a budget and how to create it from a profit and loss over the last couple of years. And I just want to say, I'm sure Jack would give me a great big exclamation on this, having a budget is really giving you the power to tell your money, how you're going to spend it instead of letting it spend itself around you. And so creating that budget, it should be tied into your financial goals and plan for the year. And then Jack comes in and helps you manage it and see it and know that you have a visual representation of how that money is being promised and then how it's being spent. And so, you know, I've worked with nonprofits have worked with for profits and building that budget is so important, because it's a roadmap for where you are planning to allocate the money that comes in, you know, it's no different than saying, in our home, can we buy a bigger house, because here's the amount of salary we have, you are creating a home budget for groceries for gifts for all those things. And I see a lot in business, we don't do that. So I just want to jump on the budget bandwagon for a second and say, if you have not done one, and you're listening in this podcast, it's not too late stop and go create a budget. And then it's not enough to create it, you have to update it. And you have to monitor to it. And again, that's where this dashboard comes in. Right? Because like you said, here's what I budgeted for, let's say coaching, on a budget to work with Michele and coaching, here's how much I've spent, here's how much I have left to spend. Or here's how much I planned for marketing. And here's another marketing opportunity, you can start to see where those funds go up and down in a very visual way.

Jack Tompkins  27:26

Exactly. And I can tie this back to one thing that we mentioned that towards the beginning of this of a goal without a strategy is just to hope, I guess, yeah. And so when you build out that goal, that budget, and you say, okay, 25% is from coaching. 50% is from consulting. And the rest is from whatever, you can piece that out. And you can show that in a dashboard and say, Okay, here's what I'm measuring towards for this specific source of revenue, or for this source of expense. And having that broken out, and then measuring up to that. And it's funny, I know, this is audio only, but I was I was sitting there nodding my head and agreement the entire time, you're saying that measuring towards that is is it's it's a whole lot easier when it's visual. And it's a really nice way to tie in your strategy. Because then you can actually see the different pieces of your business. And they sort of come to life as more than just that thing that you do once or twice a week. And then the second piece of that that I want to transition into a little bit is, okay, you've spent X amount of dollars on like a business coach like yourself, what's the ROI on that for the for the client? And they can they can put some numbers around that. And I know that some of that you've talked about in other podcasts too. And I think it's a great point. Because knowing the numbers is fantastic. But that really means knowing all of the numbers, right? So how much should I spend? How much should I get out of it? What's the ROI? Should I keep doing it? should I invest more in it? Or should I stop doing it? When that's all laid out in front of you, it makes that call a whole lot easier to make. And that signs of data piece that we mentioned, is a whole lot easier to digest.

Michele  29:11

So I love that. And that's kind of where I was looking to go to. So I'm glad you started talking about that. One of the things, so I I paid for a high ticket coach, I don't know two or three years ago, to learn how to do a few things that they were doing. And I was not able to fully implement their program because they had it so time bound and they didn't tell me that before I purchased it.

Jack Tompkins  29:34

Oh geez,

Michele  29:35

I know it frustrates me. But one thing I learned was not to ever do that to my client. So I look at it as a very high. I could probably chalk it up to an educational expense. We all do those right. And however, I looked at what I invested in that program, even though I wasn't able to fully implement it, and I looked at the changes that I put in place in my business because of investing in that program, like, I probably went through maybe 50 60% of it in the timeframe that they gave me. And so that even that 60% it encouraged me to make certain changes in my business. And I made back the investment quickly, like within two months, now, did I fully implement it and reap all the promises that they told me? No. But I'm two years out from doing what they told me to do two years ago. And I can say, if I were to really be honest, every single decision past there has been based on something that I learned not everything. But but the foundation that I learned there, the ROI, what I'm trying to say, wasn't just in that one moment, there was an ROI that I am still reaping today because I made that decision. And so then when I hire the next person to come in, because I'm a business coach, and a consultant, and I work with business coaches, and consultants, like, again, I'm not going to tell my clients to do something I don't do. So I have somebody who was ahead of me, helping me get where I want to go. And it's an investment. And so when I'm looking at that, my goal is how do I at least recoup the money that I put in? And now how do I make it back to three more times? Yes. And so, but it's over what time period? Right? If I were to take this down into designer speak, we can also think about looking at a show house? How much do they have to put into a show house? Well, when they are reaping the reward from that, if you will, that doesn't mean that somebody is going to walk into that show house and immediately say, I love that room, I want to hire you, it could come back over time. So the same way that we are watching our numbers, we're watching our marketing, we are watching, where did this referral come from? Where did this you know in it's over time, these are not just quick turnarounds in some cases, and so I'm curious, the dashboards that you have created or worked with, or they all simply financially based, or is it? Can you build dashboards, pulling data from places other than QuickBooks? Right? Like I've got a whole Excel spreadsheet, I'm Stacy Brown Randall talks about keeping up with all of your referrals. And yes, I've got my CRM and all of that. But I've got this great Excel spreadsheet Jack, that tells every person who's reached out to me, the date they reached out where they were referred from what action they took. See that in some type of a visual form immediately tells me where am I marketing's working, where it's not what they're asking for? Who's sending them. And if I had looked at each individually, and not collectively, either in some type of a spreadsheet or a visual representation, it's easy to miss the trends. of again, what is the payoff of that marketing? Or what's the payoff of that working with that coach? Things that are outside of just a P & L or a balance sheet item? Do you help work around other data that maybe we've captured in Excel spreadsheets or and other types of spreadsheets?

Jack Tompkins  33:14

Yeah. So it's funny, it sounds like we scripted this I promise we didn't, because that is my number two area is to go into marketing. Okay, cool. Yeah. It goes into, where's the leads coming from? What's the conversion rate? What's the sales cycle like that, can I that can connect to a CRM, just an Excel spreadsheet, if you got everything there? For website things, Google Analytics, very easy to connect to a whole lot of good info there. But yes, marketing is my second most common piece of data that I work with or area of data that I work with. And it's all around that that same kind of thing of, of measure the investment in something like a like an advertising, Facebook ads, Google ads, whatever, even different networking groups, a lot of them cost money. Are you getting leads? Are you getting referrals from that? And so yes, that is that is something that I absolutely love to do as well.

Michele  34:06

Yeah, I just know, for me, when I'm sitting down thinking about the numbers in my business, you know, some people have, I'm gonna say this, it might sound a little controversial. I don't mean it that way. Some people have pigeonholed me and said that I'm a financial coach. And I would say, Yes, I am a financial coach. But I am a holistic coach. And I say that because that kind of the same thing that you're talking about here, Jack, I use the financials. Almost as like checking a temperature, right, the numbers are there. And they have meaning. It means that there were decisions that were made that created the number and if I don't like the number, I got to go backwards and change the decision. So I can't work with somebody on just their financials and not say let's go look at your marketing. Let's go look at your why. Let's go look at your values. Let's look at your ideal client. Do you have the right employees or the right butts in the seat? Because every bit of that impacts that financial document is just a moment in time telling me about every decision. And so sometimes I'm asking for numbers that are deeper and broader and wider than what's on a P & L and balance sheet. And I see your offering, as doing the same thing is saying, Yeah, we got these numbers. But there's a lot more happening behind the scenes to really get your arms around this ownership piece of the numbers and the data and the analytics. So here's another area, I'm curious to see if you have either worked with it before or what you think about it. And that is how we manage our employees time and time tracking, because that is a big deal for us, because we have to whether we are charging for our time, and our edit time, like hourly billing, or whether we're doing flat fees, but we have to keep up with the time spent on a project to see if the flat fee is really correct. Really trying to determine are our employees that are billable? Are they billing at the rate that they need to be billing for the time? You know, you can even go into law or anything else and look at everybody that has to keep track of everything. Is that another area that you've seen that kind of because when I look at here's our time billing, and I look at that, you know, let's say I've got a design staff of five, and I want to look at how much each of them charge on average per week, how many billable hours a week does I have? What does that translate to in a month, and then I can look over here at the P & L for that month. And see, here's where we charge for our time and know where it came from? Right, the sub data behind it. It do you work? And have you seen any need or request for that?

Jack Tompkins  36:49

Absolutely, I have one client right now who kind of ties everything together. And it starts off with the financial overview. And one of the things that we look at is kind of like what we're talking about, really, what are some of the common things that everybody should be looking at is that labor expense. And typically, that's an expense as a percent of revenue, however you want to look at it. That's sort of your starting point, right? That's your pulse check. And then you say, okay, who am I employees who's doing what, and then you get into the time tracking data. So it's not meant to be like down to the exact specific second leg, it doesn't have to be crazy. But to your point, it's that pricing piece, because a lot of people do flat fee pricing, I do myself, and I think a whole lot of people base that off of an estimated hourly rate that they want, right? So they if it's going to take 10 hours, and then I want to make $100 an hour. Okay, let's charge 1000 bucks. So doing that flat fee is great. I think that's a phenomenal way to do business. However, it has to make sense for your hours worked as well. And some employees may be better at estimating than others, some may be really quick. And if some people are really quick, you might want to say, okay, that that seems like it didn't take you long enough. Some people could be on the other end of the spectrum. So there's a whole lot of good info and time tracking data that you can get real granular and get down to this much of it is travel and this much fun is planning. And then this is implementation. And that's great stuff. If you're just starting out with tracking some of that stuff, that could be overwhelming. So I would encourage everybody to do some sort of try time tracking. And then once you get a feel for it, then you can get into the more granular of what is each hour spent doing for that specific client or for that specific job.

Michele  38:46

Okay, so that brings up I just had an episode where we talked about doing cost accounting. Really, I will say the majority of my clients do not do full cost accounting. So they're not taking and tracking every single thing to every single project. They, they are doing time billing and that kind of thing, but they're not necessarily doing full own job costing. Okay. But there is a need to know, on a project by project basis, am I really making money when you take into account overhead, and you take into account maybe those expense items that were not put up and cost of goods? Like it's easier to look at it and go, Okay, here's what I charged in revenue, here are my cost of goods or services. And here's my gross profit. But to really say, where are we profitable, we take the whole company into account. Yes, and I can imagine that if you can pull data from multiple places, right, that have repositories, especially those that allow you to take the data and export it into a CSV or an Excel file that then makes it where you can get to it to be able to pull that data So for example, if we have clients that are on other project management applications that are specific to the industry to interior design or whatever. As long as we can have some of that data exported, we now have that data available to do some analytics on and create a dashboard. Did I get that right?

Jack Tompkins  40:24

That is exactly right. Yep. CSV is one of my best friends?

Michele  40:26

Yeah, yeah. Okay. All right. So I'm, I mean, my brain is like spinning here, with all of the different things that this could do. Tell me a little bit about the process when you start working. So let's say one of my designers calls, you'll say I call you Oh, Jack. I love numbers. I love to see it. I'm not seeing anything visual right now. I don't want to go build it myself. You know how to build it. Let me use your expertise. And your you know, all you have the great stuff about you to do this, you know it. Tell me the things I don't know, lead me there. What is your process? Do you I'm certain you go through a discovery call or who here's how I'm going to get to know you. But when we move into working together, do you ask me like what are your KPIs? Do you ask me? What are some of the questions you might ask me to make sure that, that we're not just building the same dashboard everybody else has, but one that which is fine, too. There's nothing wrong with having a standard dashboard that we use. It's kind of like the QuickBooks report that we all get. But if we really want to think differently, and there's data that I want to capture in a different way. Two questions, how do you go through that process with me? And then second, how do we layer it? Because I can imagine the minute I start getting a taste of the visual representation of my data, it becomes something different and better and bigger and more exciting, because it's taken on this this new look. And I'm gonna want more. So tell me how that works.

Jack Tompkins  41:55

Yes, absolutely. The discovery call is one of my favorite phases, because I love to learn, honestly, it's just my favorite thing. And in that discovery call, I get to learn about the client's business. So if you're a business, I would love to learn what the ins and outs are and what are the KPI. So that's definitely one of my questions is and you know, we talked about one of the standard ones is just revenue and profit, that's probably going to be a KPI for most people. But let's go deeper. what's what's really driving your business? it? Is it? Is it a specific Cost of Goods Sold metric is a specific expense? Is it getting messed up with taxes? Or, you know, let's find what else is making your business tick, and then make that one of the KPIs do.

Michele  42:39

So what makes you hurt. Like, one of the questions I ask is, is there something that you wish you knew in your business that you don't know? Like, is there something that you'd like if I could just put my finger on that? I feel like I would have better control.

Jack Tompkins  42:53

Right, right. Exactly. Yeah. And finding that thing, or a couple things. It does make a huge difference. And the revenues, the profits, the the gross profits, and all, all the more standard stuff like that, hugely important, there's no need to neglect that by any means. So I just want to put that out there. But getting to that sort of, it's almost like the one or two metrics that could really make or break your business.

Michele  43:19

Yeah, there's so much more, right?

Jack Tompkins  43:21

Right, exactly. Which for me, I love because it's more data and more financials are and everything that I can just make visual. But yeah, so well, so we'll have a conversation about the KPIs. And that's all my stuff is custom. I have some like, kind of standard templates, and I say kind of standard, because I'll start with something like revenue and profit, and then go okay, right now, let's do it.

Michele  43:50

I would be more worried about a company that says create a whole dashboard, and don't tell me about revenues and gross profit. Like I'd be more concerned about them. So you just about no, that's a gimme. Right. But I think to your point, Jack, there's so much more, why would we stop there, right? And that that's where many of us have been led to believe that that we can stop is looking at a P & L look at a balance sheet and then just be done. And good night, we would have a difficult time really scaling and growing. If that's all we look at, you know, I'm helping my clients take that and break it down and break it down and break it down. And when I do financial reviews, I'm even asking what makes up that bucket like that marketing and advertising and you got it at 25,000. What's in there? And you know, the answer I get most often, I'm not really sure.

Jack Tompkins  44:43

Let me look. 

Michele  44:44

Well, let's break it down and see what is in there. Is that a new website build? Is that ongoing? Are you paying for Google ads? Like what are you doing? And I'm not saying it's bad or wrong. We just have to know what it is. And then we have to know is it helping you? Is it supporting you is it doing what you expect it to do? Or is there a better way to do it? Is there a cheaper way to do it? Is there? You know, or is it perfect, and we leave it?

Jack Tompkins  45:09

Yeah, because that is an option, we're not just here to point out the bad. We can point out the good too. And it's, it's kind of going back to something that we said in the beginning is, if you feel like you're spending a whole lot on marketing, that's what your guts telling you. That could be okay, let's check out the numbers and get deep into them to see where that money is going. If you can make an ROI out of it, you probably can. But if you can't, whatever, let's check the ROI on each of those different spend areas. And so that's back to the discovery call. That's a huge part of this question, too, is where what is the thing that you want to see? Or what are the several things that you want to see. And oftentimes, that is something along those lines of, well, I'm spending 25 grand a month on marketing, but I'm not really sure where it's going. So let's spike that out. And let's put some numbers around it too, and make it a good bad, okay, sort of indicator.

Michele  46:07

You know, when I spend on things like that, in the marketing piece, it always makes me be like, oh, my gosh, is this the right spin? Is this a good spin? Because it can be a lot. I mean, you can put 1000s of dollars, into ads or into, you know, I would almost go back to Can I please just pay $300 for a yellow pages ad like, today, when we thought that was crazy, right. And now $300 a month is a drop in the bucket, right? Or a lot of advertising these days, and social media and all the other avenues that we have. But I know I have a particular marketing stream that I'm using right now. And I had one sale that came out of my marketing, and that one sale would cover 24 months of continued marketing. And so when I realized that it was like one sale equals 24 months of me staying here. So even if I only get two, in two years, I've made my money like more than made my money. And so it's being able to stop and look at it. But every month when you're looking at that money going out the door, you're kind of like until you stop and stand back and go, but wait a minute, look what I only had to sell one. And I can fund this for two years. So right, you know, it changes the way that I now see it. Now I look at it, and I'm like, it's okay, I've made the money. Keep going, keep going, keep going. Because we know marketing is a numbers game. Right? You're not necessarily gonna if you convert every single person you talk to, then you probably need to shift a little bit.

Jack Tompkins  47:46

Quickly. Right? Exactly. Yeah, I love that example of the one sale equals 24 months, sometimes it's okay to go one for 100. And that can be really discouraging. And you might just see money outflowing constantly into whatever marketing that is. But then you get that one sale and and putting that into context with the numbers definitely helps maybe ease the stress of oh my gosh, I'm over 90, well just get one of the next 10 or you know, whatever it is, and then you're good to go. And just putting the numbers around that makes it increases the peace of mind for sure.

Michele  48:23

It does. What are there any other areas that you have found to be super helpful to business owners in that dashboard, or in the analysis part that we haven't touched on?

Jack Tompkins  48:37

The last piece, and we kind of did with a time tracking and stuff, but I like to call the operational data. So oftentimes, that is the time tracking piece. But for other things, it's dealing with something like this, I've dealt with it with a logistics company, it's how often are you on time? Does the entire load that you're hauling across the country? Does it make it there? Maybe not super applicable.

Michele  49:09

But it is. Our project management is the logistics of ordering every single thing that goes into somebody's house.

Jack Tompkins  49:19

There you go. Yeah, absolutely. 

Michele  49:21

The logistics of building the home potentially what we call the finishings, what color is the stain, what colors, the paint? You know, and making those dates and making the budgets? And then it is over time logistically. did this get to the receiver on time? Did it make it there did we? How many installs did we do on the date that we plan for install? So it's a smaller version of what a logistics company does, but we actually have logistics positions and some of the larger design terms.

Jack Tompkins  49:53

Yeah, absolutely. Well, then they get their own dashboard.

Michele  49:56

That's right. I mean, I can totally see that even just one I can almost see, I don't know if you've built one of these yet. And but a customer satisfaction dashboard. For example, here were some of the things that we were planning to do to make our customer feel appreciated, or here were a customer touch points. Did we do it? Did we meet what you know what they were looking for? And then, you know, sending a follow up. And here's how they ranked this. And, and kind of saying, are we meeting the real needs of our of our clients. And I could see that being something that we would measure as well and want to see visually? Absolutely,

Jack Tompkins  50:36

I personally have not made that dashboard yet. But I have seen several of them. And they're pretty cool. Because it's, you almost steer away from the numbers a little bit. So for the for the non numbers oriented folks, it's kind of a nice thing to look at, because it's oftentimes it's like the net promoter score and things like that, which is a one to 10 scale nice and easy. But it's the happy face and the frowny face. And it's it's kind of a neat dashboard, at least the ones that I've seen. And I think, from my perspective, it's all dealing with numbers on the back end and putting it again, just into picture. So I completely agree that's a that's a great dashboard. I should start looking more into that.

Michele  51:12

Yeah, I mean, I think it's important to know when I was talking to a client yesterday, and we were talking about how we help our employees feel connected, so that they don't want to leave and go to a competitor, right. And one of the things that we talked about was making them understand how they fit into the company, and then making them understand how they were there to transform the life and the space of the client. And then thinking about in advance how they wanted their client to feel at certain touch points. And then managing those touch points, not just saying I want him to feel this when we get here, but actually managing the feeling to get there, right, and then measuring it. So you know, we have to measure, just otherwise everything's a gut feeling, but looking to see what is really important. So here's what I would say, look to see what's important, a KPI, some type of performance indicator, setting up a metric to track it. And then actually looking at it and analyzing the data, which is where your solution comes in as to help us is to take that data, pull it off the page, and create it in a visual, beautiful, branded way. That gives us quick information and helps us like you said digestible pieces so that we know what to do with that data. And not just a bunch of flat numbers on a piece of paper that feel overwhelming to us.

Jack Tompkins  52:42

That is perfectly said, Michele, thank you, I should hire you for sales.

Michele  52:46

I'll be right over.

Michele  52:50

Jack, tell everybody where they can find you tell us about your website, where you're hanging out and how to get in touch.

Jack Tompkins  52:59

So I would say online, the quickest way or the best way rather, is just to go head to my website, which is pineappleCF.com. That's got a bunch of examples of some of the dashboards that I build. And I fully realized that what I do is very much a seeing is believing type business. So I've got videos on there I've got I've got screenshots on there, and it sort of shows boring data transformation, fun data. And it's that kind of theme. You can get more info of what my actual servers are and things like that. So I would say my website pineapple again, pineappleCF.com. I'm based out of Charlotte, North Carolina. So if any listeners are in Charlotte, definitely feel free, reach out, and we'll talk shop in person, assuming that's allowed in this non COVID time.

Michele  53:51

That's exactly right. Yeah, we do have listeners in Charlotte for sure. And, Jack, this is fun. Like I this like rocks my boat, right? I love the numbers I love. I love the numbers, but I love the power of the numbers. And I know that what you had on your sheet too. I think I know for me that when I started my company, and I didn't look at the numbers, I was doing the piece and parts that I love to do, which was the more creative piece. My energy got sucked dry. And I I felt defeated because I wasn't monitoring the numbers behind it. And it wasn't that I didn't know how I just wasn't doing it. And that was the thing that that I had my oh my goodness moment sitting at the kitchen table where I called my husband crying. And I said something's got to change here. And I decided on that day because to your point, I had worked in big companies but had not taken those principles and brought them down to more of a micro business level. Sure when I made the decision that day at the kitchen table, that I'm not going to do this anymore. I'm just changing it. That is, that became the beginning for everything that I'm doing today. That's how I created pricing without emotion, understanding your financials, master your profit, like, let the numbers work for you instead of against you. And the more that I know, and understand my data, the more I love my job, because I can, I can rest and those choices and decisions. And I can spend more time pouring into my clients, and doing those things because I know that the foundation under me is solid. And so that's what I want. For the listeners, I want them not just to earn money, not just to make good sales and good pricing and profits, but to know what to do with it and to analyze the data and to have it in a way that is easily accepted, if you will, and understood. And so I love what you're bringing to this and, and I'm so glad that in the middle of a pandemic, you started a business.

Jack Tompkins  55:58

Thank you. I'm glad to it's been it's been. There's no chance I'm called back the corporate world anytime soon. I'll say that.

Michele  56:04

I hear you. I hear you.

Jack Tompkins  56:06

But yeah, this was this was just too much fun. Thanks so much for having me. Michele. Always, always love talking data and numbers and pretty graphs and stuff like that, too. So thank you so much. 

Michele  56:15

Same, well Jack, thank you so much for being here. And I'll probably be reaching out to see what I can get on a dashboard for myself.

Jack Tompkins  56:21

Yeah, perfect. We'll talk then.

Michele  56:24

Take care.

Michele  56:26

Thanks, Jack for being on the podcast today and sharing information on how we can make our data easily accessible and a snap to understand. Honestly, my goal is for all of you listening to build a business that is solid, one that supports you and your clients and your employees, a business that provides good in the world. And I know I can't do all this work alone and neither can you. It would be my joy to support you in building a strong, kind, amazing business. Reach out to me at ScarletThreadConsulting.com and sign up for a discovery call. Let's connect so that I can help you be more profitable because profit doesn't happen by accident.