188: Building Heroism in Business
Michele 00:00
Hello, my name is Michele, and you're listening to Profit is a Choice. Today I'm bringing you a replay of a podcast with Scott BeeBe. It was originally episode 34. Scott is the founder and head coach of my business on purpose, and the host of the podcast business on purpose. He loves to liberate small business owners from the chaos of working in their businesses. And he really helps to get their lives back together by assisting them in articulating and implementing intentional vision, mission values, systems and processes. What Scott does and what I do are in such alignment, that it was really just a fun conversation with so many things that I think we all have to think about. I originally named the podcast building heroism in business. And I think you'll see why we need that to really bring our dreams to reality.
Michele 00:58
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.
Michele 01:32
Hey, Scott, welcome to the podcast.
Scott BeeBe 01:34
Hey, Michele, thank you so much for not only having me, but putting in the hard work of getting this podcast done. It's a lot of work. And so I'm completely humbled that you would allow me to share this stage with you. So thank you,
Michele 01:46
Oh, you're welcome. And you have a podcast of your own, don't you?
Scott BeeBe 01:49
I do. I do. It's different than yours. So it's called the Business on Purpose Podcast, I literally leave a client's conference room, I get in my car, I've got this cool little podcast app on my phone. And I do about four to seven minute segments of exactly what just happened in that room. So what is real time coaching for heroic small business owners, and it's as basically as it's happening just after I get done with it. And so it's a little unique. It's not interview based like this. But it does provide some ongoing coaching for people who just need those insights on a regular basis.
Michele 02:22
I think that's excellent. I'll make sure that I have a link to that in the show notes. So you do understand what it takes to do all these pieces and parts. And, you know, it's funny, my, I have two older sons, they're in their 20s. And they've been making fun of me for the last few years. They're like, what does your mom do, and they're like, she plays on Facebook all day. I don't, right, but in their mind, that's what that's their joke to me, because a lot of what we do is, you know, digital or electronic or online, and they're constantly walking in. And then I've got a couple of Facebook groups that I run for my industry. So I'm in there answering questions, and like, Yeah, mom just play something.
Scott BeeBe 03:04
They'll learn one day, their 30s 40s and 50s. And they'll figure it out.
Michele 03:08
Oh, they absolutely know. But they just know that every time they say that I look at him, like, Oh, I'm gonna get ya. And so they do it now just to pick on me, but that's great. Um, so Scott, tell us a little bit about your business and what you're doing right now.
Scott BeeBe 03:22
We wake up every day, I tell people, Michele Monday, Monday is my favorite day of the week, we literally wake up every day with one ambition. And that is to take these heroic small business owners that we have the just the distinct honor of being able to influence and liberate them from their chaos. So most of them, we find are in some stage of putting out these kind of petty fires, and they're in some stage of chaos and our aim, our goal, our success, our result is to liberate them from that and really install life into them.
Michele 03:55
So how do you define a heroic small business as compared to just a small business owner? What makes them heroic? Well,
Scott BeeBe 04:02
the we use that tag because the definition of a hero is somebody who makes courageous decisions and takes courageous action. And so we a lot of times, and rightly so think about military, think about first responders. And of course, that's a note no brainer. A lot of times, we don't think about small business owners, and they wake up and they've got to make tough decisions. We just had a business yesterday, that they're bleeding money right now, they had to make the tough decision. It's a courageous decision, but it's a tough one, to let people go and admit to these people that because of their misappropriation of the administrative function of the business, they're going to have to let people go. And because they hired too fast, they're going to have to let people go, it's the right thing to do. But it's a hard thing to do. And frankly, it takes a little bit of courage to do it. So that's why we say that, that small business owners are heroes to us, and it's our privilege to be able to serve them.
Michele 04:55
I would agree with you 100% in that and I would even push back and say don't think it takes a little bit of courage, I think it takes a whole. I mean, certainly it can vary based on the task in front of us. But I shared with you right before we came on air that, you know, my big push in the interior design industry and in the creative industries, is for people to understand that they can understand their financials, and they can manage their financials, and that they can have their financials and their company work for them instead of them working for the company. But that feels so overwhelming, you know, like, I'm certain, like the client that you just described, you know, having to go in and tell your staff that you've got to provide layoffs, I was telling my son last night at dinner, that when I worked corporate, I went through 13 layoffs before I got hit in years. And back in the 80s, and 90s, companies use that as a balancing tool. You know, at the end of the year, oh, my gosh, we need to make more money, just lay everybody off. And then they would turn around and start rehiring the next year or hire them back as contractors or consultants. I mean, it was this weird thing, right. But it still is hard to go through it on either side, either as the one who has to make the very courageous decision to rebalance the company, or the one who's on the other side who's getting hit. So I do believe it takes a lot of courage to start a small business, to manage it, and to manage it well. And to do those hard things. So I love that you use that term, I may just have to start saying we're all heroic. All yours? Right? Our goal is to be heroic. Let me ask you this. What kind of chaos Do you mostly see in businesses? Because you made the comment about wanting to help them remove the chaos? I do similar on my so what chaos Do you see most often?
Scott BeeBe 06:48
Yeah, some of the biggest headaches we see, obviously, one that is goes unnamed a lot, is probably the most pervasive, and that is a lack of clear direction of where the business is going and where they're going. So that's one of the ones that will usually have to diagnose, that is a lot of times without symptom. And so they'll come in and say, Hey, by the way, there's an illness, a pretty big illness here, even though you feel nothing. Or you might feel a little lack of clarity, or unfocus. Well, that's what this is. And so going back, you mentioned a word earlier vision, we actually put a heavy, heavy priority emphasis on vision story. And so it's not just a paragraph of where you're going, it's actually about three to six pages of detail of writing down the vision in multiple categories, your family, your freedom, your your financial position, where you want to be with that products, services clients, your team and the culture that you want to build. So we actually have these heroic small business owners fill out details in each one of those segments, so that they can get real clarity on where it is that they're going. So that's one of the biggest headaches. And I would say one of the other ones is or two, I would say and one, you're going to obviously, dive right in on it. And that's the idea of lack of cash profit, not talking about the net income number that's irrelevant to your day to day, try to take that into your bank and ask to withdraw that from your bank account. They'll just laugh at you. And so that's a piece of chaos that a lot of people swim in. And the other one that probably the most symptomatic is employees, and having to kind of maneuver and work through the idea of team members, whether they be W2s, or 1099, or whatever. But just having to maneuver through that. So I would say those are probably the big three.
Michele 08:31
Okay, it was interesting. I saw a quote yesterday, I'm trying to remember who it was buy. But he made the comment to your point about looking at the net income on the profit loss that he said, only looking at the profit loss and not really watching the cash and managing the cash flow is like looking at all of the gauges on your car, but never stopping to fill up with gas scrape point. Yes, that's it's like watching it and it's bleeding, and then not doing anything to stop the bleed or to you know, put gas back in the car. So I thought that was really interesting the way that he phrased that. And it made me think of it when he said it, I would tell you that I see the same problems and challenges in our industry, money, cash management's huge, because we're doing a lot of product and service work. And so you know that that definitely is big, but I would save vision as well simply because a lot of people in our creative industry, they start their business without a full blown business plan. And so what they do is they start because they have either a passion for something or they have a skill set, and somebody says, hey, that's so great. You know, can you can do that in my home, can I pay you for this? And so they I mean, I started my first business that same way. And so I just started doing it. I didn't even know what it could be. So visually I couldn't couldn't, it was a struggle for me if I am honest, because all I wanted to do was try to figure it out. But I will say when I was working with my business coach about six years ago, and she asked me what I wanted, I said to her, You know what, I don't know that I can tell you what I want. But I can tell you what I don't want. And when I started listing everything I didn't want, it highlighted what I did, right, because it's usually pretty similar to the office. And then I started realizing if I could vision how I wanted to feel. So I have my clients do similar to you is, you know, look at all those categories. It's not just our vision is to have the best product in this industry, blah, blah, blah, blah, blah. I want to hear how do you want to feel? How do you want clients to feel when they interact with you? How do you want your employees to feel right? That's the culture. Yes. And really being even if we are a business of one I want to know, like you when we started, you said Happy Thursday and I said. It's been a great Thursday. Right? And I like you, I look forward to Monday, but it's because I'm building a business I love not when I have to do. And that's because I'm I'm very clear on my mission and my vision. But I wasn't always there. Were you out? Did you have yours like right out of the gate? Day one, I've got my clear vision, or did it take you a little time to work that out as well.
Scott BeeBe 11:24
So our kind of rule of thumb is that your vision story is never any more than 90 to 95% Complete. And so when we started our business, I did start with a vision story. And it was a multi page detailed vision story. Now, the other question is does today look like that vision sounded four years ago? No. Does it look way different? No, there's still a ton of similarity into what I wrote down. Because that subconscious is really bizarre that way, when we start to write things down, you know, that Michael Gerber said, and even if you if you don't write it down, you don't own it, right? You want to go way, way back into Jewish antiquity. And look at some of the Jewish literature, there's a great phrase that says, Write the vision down. So those who read it may run. So if you go back way before kind of wisdom, civilization and all that kind of stuff. They were writing things down. Why? Because once we write it down, something happens in the subconscious, we begin to kind of head that direction. So yes, we started our business with that. Does it look exactly like that? No. But we also review it once monthly, and we tweak it about once a quarter.
Michele 12:32
Oh, I love that, because it gives you the flexibility. First of all, it gives you the freedom to do the dreaming, right that visioning forward, right. But then it gives you the flexibility to shift and change. Because you know more that I think that was my thing is I thought when I first started that I had to lay out, like this exact vision that I was going to be walking down, right like, here's the path, here's the road here is every detour. And I couldn't do it because it didn't know enough, I just didn't know. But when I started writing down what I did know and what I didn't want, and then what I did want, it starts to kind of open up that realm of creativity where you can write it, I went back and found something that I had written back in 2009. And realized I'd already been doing that same thing for seven or eight years, right? Before I even realized, oh, wow, already doing that. So that that was really just a great, I would say example of what you've said, is to just start writing.
Scott BeeBe 13:33
Yeah, yeah, you do. And now the hardest part of that is to set aside the time to actually go into your calendar and go, Hey, I'm going to take this one hour follow kind of the Cal Newport deep work mindset. And I'm going to take the phone, and typically when I tell people, they gotta block time, what it means is, I'm going to put this on the calendar, nine o'clock on a Tuesday. But when I get to nine o'clock on a Tuesday, somebody is going to invite me for breakfast. And so I'm going to do that instead of sitting down and doing the deep work, but I'd put it on the calendar, or I'm going to sit down and do it. But I'm going to have my email and my phone in front of me. And so really, I'll get about three minutes of deep work next to 57 minutes of completely distracted time. And so know what we're talking about is sitting down for an hour to two hours or two or three blocks of those kind of things. But distraction free, the phone does not need to follow you on your hip, it can stay out the email, you don't even just have to minimize it, you can actually close it to where there's no notification, there's no nothing and starting to get in that free flow. So you can write this stuff down. It shouldn't take that long, a couple of blocks of time and you'll have essentially where you want to go on a document but you got to start somewhere. If you go to my business on purpose.com/vision. We actually have our full tutorial and template you can start there for free like we've done all the work. All you have to do is show up with time and invest that time into it. But you've got to get something on paper where you can start to push towards.
Michele 14:56
I have started turning off all notifications I've been doing that for a while, I have I my phone is turned over so that I can't see anything I don't have the ringer on, I do have to remember to turn it on after work hours. If my family wants to get to me, I, they get on me all the time for that. But I turned everything off, I turn because it does that dinging or even just if I don't have it, making an auditory kind of sound, just watching the little envelopes show up to say that there's new mail is enough to distract me. So when I go into those modes, I have to close it down. And Scott, I've also had to, as part of the ownership of my own company, I've also had to make a promise to myself that when I set a date with myself to work on the business, that I am equally as important to any client that I would set a date with, because I would never not show up to their date, I would never change and go jump on email. I would never ignore them for 57 minutes of the hour. Do you know what I mean? I wouldn't use that to them. And so I have got to love my business enough. And so that when I make that date with myself that I hold that time, just as sacred to serve my business as I would my client.
Scott BeeBe 16:13
That's a great, great mind that everybody who's listening to this will be very well served to take that philosophy and started betting it's no doubt.
Michele 16:20
Yeah. And having the time I calendar, everything. If it's on my calendar, I'm going to do it. So let me ask you this. So do you see that if people write it down, do they automatically because one of the big things for everybody that's listening to my podcast, I'm constantly talking ownership, you can change what you own. If you don't own it, you can't change it, like I can't go change my neighbor's paint color. Because I don't own that house, I can change the paint color on my house because I own it. Same thing in the business, I can change a process a procedure, I can change a money management system, I can change whatever I want. Because I own it, I can change a mission and a vision because I own it. Do you find though that that they there's this automatic ownership when the clients that you work with start writing this visioning exercise this, you know the story? Do you find that they automatically start on? I mean, I know there's some of it that is just inherent to the process, right? Because you are really kind of pulling it out of yourself and giving it voice for maybe we have pushed it down and not giving it voice. But do you find that ownership comes immediately? Or does it they have to sit with a little bit and almost give themselves permission to own it.
Scott BeeBe 17:29
What I found long term, regardless of the tenure that it takes to kind of own that thing is they they almost become possessive of it. And so when they've got it written out, in written form, they become very possessive. And I don't mean that in a negative sense. I mean that in an ownership sense. And that's where I just keep going back to writing things down. Whether it be the vision, your mission, what drives you out of bed in the morning for us, it's to liberate small business owners from chaos, or your core values, your unique core values, by the way, not integrity or responsibility or all that we should we should all have that. If not, then let's just not do business together. And we'll go your separate ways. But I'm talking about what's unique to you. That's not unique, or that doesn't hold value to somebody else. For instance, one of our unique core values is full implementation. Well, there's a there's some clients, we've had to come to and just say, Hey, man, it's been a great ride. But this is not within our core value set. Because everything that we're asking you to do, you're just not doing it. And it's really not helping you. And so it doesn't fit within our core values, and you're not getting value out of it so helps us to make a decision when we lay those things out. So what's unique to you, that may not be unique to me, and it doesn't mean that I don't value it or or that I think it's wrong, it's better way to put it. It's just that it's not really a value of money as much as it is to you. But we've got to write those things down, because that's how we make solid decision and consistent decision every single time.
Michele 18:54
So I have always been a fan and I have my vision written out. And I have my company values and mission statement and I have my why I love the Simon Sinek y which actually fits into all of it right? Regardless of what we call it. I remember when Simon came out with the why I had already kind of done that work understanding that the work ended with Jack Canfield. You know, I mean, years ago, kind of like you were saying the wisdom, the Jewish wisdom and even my accounts will tell you on the Prophet first that, you know, you can go back and find like where they were using the abacus and everything and these things. So some of these things have been around for a very long time, but we hear new words and phrases. But to your point, Scott, I have those things written down and I have a note but no listen, I am in business by myself. I have a whole cast of subcontractors but I'm a business of primarily one okay. And I still have a company binder that has all of that in it that I pull out and read and when a new opportunity comes my way. I pull it out because it is my litmus test, and I read it and I look at the new opportunity and I say, Does it fit? Where who I am, where I'm going and how I want to get there? Because if it does not align, it's an easy no versus, you know, kind of that struggled. No, it's like, I'm like you I'm a blessing release this opportunity. Because mine. And so it does make decision making in clarity. So very real, where we've caught it sometimes being in the muddy middle there, the muddy middle shrinks, when all of these things are defined at the beginning. And I consider these extremely foundational for every business. Would you agree with that?
Scott BeeBe 20:39
Yeah, that well, in fact, we call it foundational, we've got five Cornerstone foundations. Basically, if you think about a building structure, building structure has cornerstones and all this, we've got five cornerstones vision, mission statement, unique core value set, team meeting structure, and a hiring process, every business has to have those embedded in baked in, but that core value set. And this is the real magic of what you're talking about, is when you go to make a decision based on your core values. Now, all of a sudden, it's not you that's made the decisions not Michele Williams, it's it's it's the core values of your business that have Yes. And so it becomes a scapegoat. Now, it's not personal, I've sucked the emotion out of it to go, Hey, Michele, did you decide are you going to do that with me or not. And for you to go cascata really wanted to do that. Problem is it didn't fit with my core values. So my company's telling me to say no, but I wish it could have worked out that's totally different, then CSX got, I'm not going to do that. And that's it, you know. And so those core values act as a powerful scapegoat. And we've got clients that are turning down five and six figure work in particularly in a contractor space, because of their core values, they'll take a contract, they'll run it through the words, those core values, we had a guy turned down $116,000, excavating pad, they run an excavation business out in Oklahoma, he's actually turned down three about that size over the last 12 months, all because of their core values. And one of the values is no regrets. And there's a couple of contractors that they were about to start working with that they feel like they would have regretted working with them had they moved forward. So they X out of the contract because of those core values. That is
Michele 22:18
So very true. I remember even when I was just starting my business, and like I mentioned you I kind of started the way many do in a very creative way somebody it's funny that businesses have started since then I completely learned put on my business hat and created a business plan came into it with more of a vision and mission of what I was doing. But when I first started, I didn't have all that I was just kind of doing the work. I was a myth. I was the baker. Right, I was the one baking right, versus owning the bakery. And so then I realized all of a sudden, oh snap, I own a bakery, what am I gonna do, right? And so I but I did, I sat down and wrote it all down. And I'm telling you, it was like this immediate confidence that was built into me immediate, because it wasn't just me thinking something in my head. And then having this, you know, maybe two to three sided conversation all by myself on why I should or shouldn't do it. And being able to look at something in black and white. And saying to myself, I really did say that. And I really do believe that. And it gives you the backbone to sometimes like you said, turn down those opportunities that might be great, but maybe not great for you and maybe not great right now.
Scott BeeBe 23:34
Absolutely. No, it's been very freeing, not only for us, but for the people that we have seen install it. And so
Michele 23:41
You do talk about business freedom to remove the chaos. How do you? How do you do that with your clients? How did what is it that you do they don't? Do you go in and go? Let's fire everybody. No, you don't do that.
Scott BeeBe 23:54
But what's honestly the first time yesterday was probably the first time in a while that I've had to had to have that conversation with the business, isn't it? Yeah, it is. It is because it's it's it's real people. Now at the same time, also realize I had Darrell Lyons telling me this one time that, you know, at the moment that somebody is working with you, you are being used as a conduit for their provision. So that's great. That's, you know, the responsibility we feel and that sort of thing. But the moment that their performance is not aligning with your core values, and the vision and the mission of the business or if the markets not supporting it, there's a variety of different reasons, then you are no longer being used as the conduit for provision but it's not your responsibility to set up future provision and that's a real freeing thing. Yes. Even though you feel kind of the weights of having to you know, make those really tough decisions. So yeah, but but pragmatically what we do is we realize that most small business owners and this is not an offensive statements just a true statement. feel like they're kind of in a business. It's a house of cards, like please don't come take a look at the inside of my house because I'm afraid you'll you know, either knock it over, you'll see that it's kind of a house of cards. And one of the reasons is the House of Cards is because most businesses are started with a product first mentality, and not a vision centric mentality. And so what ends up happening is we've got to go back. So I we kind of consider ourselves, there's a, there's a franchise foundation company called RAM Jack, it'll come into your home, particularly big out and the, like the Southwest without foundation problems in the US, and they'll come into your home, and they'll literally kind of Jack your home up, they'll get under the surface of the home and kind of restructure it, to jack it up. That's what we are. We're the RAM jack of small businesses, where we come in. And frankly, you know, you mentioned interior design. For me, I love interior designers. By the way, we've got a whole program devoted to architecture and IDs. And so we love that space. We love that world. But as it relates to a small business, I am really very uninterested in quote, and I'm using air quotes, the interior design of the business, product packaging, marketing statements, those are very important, by the way, we're just not interested in them. Because that's not our role. Our role is to come as RAM Jack, I'm going to pull the sheet rock away, I'm going to pull the carpet up. And I'm going to get under the crawlspace of your small business. Because I've got to look at three major substructures I've got to look at the foundational cornerstones, there's five things I mentioned earlier, I've got to look at the concrete slab, which are made up of the ingredients of org charts, job roles, hiring our weekly schedules, tracking dashboards, goal setting worksheets, all that kind of stuff goes into the mix ingredients of that concrete slab, and then I've got to pull the sheet rock away, because we've got to look at the wall systems of your business most have for administration, operations, marketing, sales, and so in some walls are more complex than others. So we've got to pull back. And typically what we find when we pull back is instead of studs every 18 inches, you know, these two by fours every 18 inches, shoot on the sales wall, they might have two two by fours in the whole wall. And we've got to come back and go, No, we need to add some things there, we might go into the operations wall and go, Hey, you This was way overloaded. Yesterday, that client, they had about 15 products they were selling, and they were currently bleeding, about 150% a month of incoming revenue, they will bring in some very, very small business, by the way, they just kind of came to me for some quick advice. But 10 grand a month is what they were bringing in. And they were spending 25. And so immediately, I mean, you could just see it a the the idea ended up telling the owner that he was running a nonprofit. And he was the largest charitable donor but and he got it, it makes sense. But also realizing that that wall structure is way too complex, we need to dumb that down and bring it down, we'll start to build out systems and processes around that. So that's where we geek out is really around vision mission value systems processes, and those three major areas.
Michele 27:55
It's funny that you say that we had a house right as you come in our neighborhood. And right after our houses were built within an hour's 20 years, they're started to sink. And they literally had to come in jack up the house and move them out for a couple of months and rebuild all that foundation. So I've seen that happen a couple of times. Oh my gosh, literally seen it. And my sons are in commercial construction. So I definitely, you know, am aware of what you're saying just from a very tactical, like, you know, real life scenario. And it is so true. And when people come to me, Scott, they come the same way. Some of them come because they're feeling the pain or they want to grow, and they don't know if they should or, or I think I might be growing too quickly. And then there there, there is this protective layer where we don't want to show that soft underbelly, right, we don't really want you to look at it, we know you need to. But we don't really want you to Yeah. And so you know, we have to get through that. We have to put the shame aside to go We're staying where we are if we don't address it, or it's going to get worse, put it aside, what's done is done. Now let's move forward from here. And then there's going to be that transfer of trust. They've got to trust that we've got their best interests at heart, right. And we've got to have transferred that trust that no light trust so that they will allow us to go in. And then they've got to trust the process. Because I've had to let go of a couple of clients that like you said, they wouldn't fully implement, they wouldn't fully do the work. They kept telling you why things weren't working. But they weren't doing that two out of the 10 things that I asked them to do. And so of course, it's not going to work like that, right? You've got to be committed. When you do this kind of thing to go all in. You can't have jack up the house and have to fix the founder. You got it. You got to if you're gonna go in there and do it, you got to do it. Otherwise you just sit back and let it crumble when it crumbles. Yeah, you're right. Great point. So, part of what you share is when you're talking about HR can we talk about employees and delegating and hiring because I'm seeing a lot of that start being kind of a very common conversation. And some of the companies that that I'm talking to that I see online, their businesses are taking off, you know, people are spending a little more money again. And so their interior design, design businesses are growing, and they're thinking now, when is it time to hire? How do I hire or, you know, they just hire when they're overwhelmed. And I begged them, please don't hire when you're overwhelmed to hire but the plan, you know, here's what you should have in a plan. How do you go in and help? Or do you ever see that when people have beat they're just hired as a knee jerk reaction? Yeah, right. Say it? I mean, I know you're gonna laugh. But I mean, it happens in every industry, this is not an industry specific.
Scott BeeBe 30:48
No, no, I'm trying to think of a day or a week where we've not had this conversation. There's actually two sides of it two pretty stark sides of it. One is the side of preparation and trying to figure out, do I hire? When do I hire? How do I hire all those sorts of things. And then the actual hiring process, which by the way, does not end the day you make the offer. In fact, it's may not even be halfway through at that point. And so I'll lay out a couple of things. Number one, this is the principle that overlays all of this discussion on both sides. Everything I'm about to say needs to be written down in a document and reviewed every time a hiring conversation comes up. This is not something that somebody needs to listen to, and just go, those are some good concepts. It I'm not saying you need to write it down, because I'm saying and I'm saying these are principal things that must be written down and must be revisited on a regular basis. So the preparation stuff, there's a couple of elements, we've got to go to first, number one, we've got to identify the gap. Is there a gap in the business that needs to be filled? filled? Or are you just feeling like, Hey, we've got some cash flow? Why don't we hire somebody? wrong idea. So make sure there's an identified gap in the business that needs to be filled. And that gap may be freeing you up as the owner to do some additional owner things. That's fine. That's a gap. But we need to identify the gap. With that, we need to revisit our vision to see Wait a second, this the products and services we said we wanted to sell and the team we wanted to grow, does that include this position. If not, we need the either need to re tweak our vision, have an honest conversation with ourselves. Or we need to listen to our vision and submit to it and go, You know what I kind of wanted to hire on a whim, a little bit of emotion. But now I've looked back at my vision that doesn't fit what we want to do. And we've gone through that last year. In going wait a second, we don't want to hire that contract coach, we want to do something different because we're going to take our product and service a different way. And so evaluating your vision, evaluating and defining a gap in that, and then from there, you can start to make a decision. But only after you budget it, that's the other item you got to budget the roll. Now there's one simple little ratio that we encourage people on it's non scientific, you can't sue me over this or anything else. But I don't want to, I don't want to invest $1 If it's not going to return three, or four, or 10, or 15, or 20. And so there's very sound, ancient wisdom around that a 3060 90 or 100 fold increase. You know, there's a great story that's told about the the there's three people who have these, this currency that's given to them in different measures, and they bring it back and one guy just put it on a rock and it never came back. But the other two, were given more because what they were given, they actually went and made something on it. So profitability is I mean, obviously the show you teach this all the time, but we've got a budget, that there is no breakeven in what we do, that we're not running on profits, we're running for profits. And that's a great thing. So we need to budget it. And when you budget, if you're paying somebody 50 grand that 50 grand has to net not net profit. But if you've got a it's got a net around 200 grand for the business. And if you've got a business with high cost of goods like an interior design firm could have because you buy a lot of materials. Let's say you're doing a million bucks of total revenue, and your cost of goods is 50%. Well, your real revenue and classic Profit First modeling is 500 grand. And so if you're going to hire somebody for $50,000, that $50,000 is going to have to return about $200,000, which means your real revenue up if it's a new position to about $700,000, which means they've either got to generate it or they got to free you up to go generate that. And so that's what we're going to be thinking about there. So that's on the front side. Michele, does that make sense?
Michele 34:31
Oh, absolutely. And it's so interesting. There is a in the Bible, there is a parable told about the 30, 60, 90 and burying the talent so you're right, it shows up in a lot of different places. And I think what I see is interior designers, they get overwhelmed because the amount of detail that goes into their job is overwhelming. It's like construction right there are details that have details that have been And so there is this this reaction of I need an assistant, I need a junior designer, I need something. And I'm not saying that they don't. But they sometimes will hire that position. And then they come back and they'll say to me, oh my gosh, I'm making less money now. And I'm like, Well, did you plan for that position to be income generating to your point? Did you plan for them to be able to do billable work? Did you even give them billable work to do so that they can earn their own keep? And then they go, oh, gosh, and so we'll even sit down? And I'll say, like, how much are you paying them an hour? Okay, how much? Can you charge out for them for hours? So if they did one hour a week billable, they pretty much would pay for, you know, X amount of time? Yes. Okay. So at two hours of billable work, they've paid for their time, and they brought you in money? Yes. Okay. So what if they could build five hours a week? And then they go, Oh, my gosh, that's how that works. Yeah. And they start to see, you know, that, but sometimes they don't even realize that if they are hiring purely a support position, okay. So a non income generating 100% non billable support position, it is to your point, Scott, that they then can go earn the money to cover that person. So if they're not working more, charging, more, having more billable time, it is just going to be a drain on the company. Mm hm. And so really thinking about all of those pieces, I love that to the gap to be filled, I always say, Are you hiring a warm body? Or are you hiring somebody to do a specific job? Because you need to know what it is you're bringing them in to do? And it really needs to be identified? And is it to that point? Is it a gap that needs to be filled short term, or long term? Like, is this a short term issue that's just nipping at your heels? Or is this something that you see being a longer term? You know, this is this is going to be with me all the time, so I need to solve it. And then being able to really think through this, should I hire the employee or hire the subcontractor kind of like your your comment of going then going back to the mission vision, you know, does this fit?
Scott BeeBe 37:10
Yeah, well, that leads to the second major section, and that's the actual hiring process. And once you've got those things laid out, to be able to sit and go, Okay, we're going to go through the recruiting process, we always recommend, by the way, not starting with kind of a general broad look for people. But instead, what we want to do is, is we want to start with our network in our network, basically saying, hey, in our network, we are at a place where we are looking for this kind of skill set. Now notice, we don't start with the title. I'm not looking for a bookkeeper or salesperson or project manager or whatever. I'm looking for somebody with the capability of receivables, payables, you know, and start walking through those trades. And with those traits, what ends up happening is you've got some real great, great clarity. So the person on the other end, because if I tell you, I'm looking for a bookkeeper, and then I tell somebody else, I'm looking for a bookkeeper, we're going to have two different definitions, what that looks like. And so we usually like to start with our network. And then from there, go to this long process. And don't cheat this process number one, phone discussion. And I won't go into the details of each one of these but phone discussion, number two, live interview, and during that live interview, all you're talking about is vision, mission, values and culture, no job role, no money, nothing vision, mission values and culture because they don't fit that. Save your time and save their time. Then from there, what we want to do is you call them again, this is kind of, I guess, the third stage now, or the third step, call them, get them profile disc, Myers Briggs, Colby, I don't care what you do get them profiles, so you have an objective measure of their personality, and then run them through a test project. You could do this later if you need to. But for instance, if you're hiring a bookkeeper, have them do an online, something, to reconcile a fake bank accounts or something like that, get them to do a project. The next stage is the second live interview. And that's where you'll actually have a conversation about the job role. The third is a lunch kind of with the team, if you have one or whatever. And if it's virtual, then you obviously don't do a lunch, but you can be pretty informal, and what you're talking about there, everything you've observed through this process so far. And then the next one, if you can do this is super, super helpful. And that's a spousal dinner, where you go out to dinner with the spouse, so you just kind of generally talk about things. And then your final meeting, I know it's a lot of meetings, takes about two weeks if it's done, right, your final meeting is the offer. And you can go ahead and say in that fourth meeting or so had kind of this is generally where it's going to come in from a compensation standpoint, things like that. So you can just kind of take this and generally say, but that last meeting is the formal offer. Once you've got that. Now what happens is you're not done. Day one. And so now They want comes and you've got the entire onboarding process. And so all of that needs to be present when you're hiring. Because if you don't want it to be daunting on the back end, then it's going to have to be daunting. On the front end, you're going to get bit either way. Do you want to be in charge of the bite on the front end? Or do you want the employee to be in charge of the bite on the back end.
Michele 40:19
I have on episode nine with Corey and Anthea Click, for anybody listening to this, they do a very similar process to what Scott just described. So if you want to hear how it works in their staging company, you know, that would be another great podcast to follow up with after this one. But I agree with you, I just had this conversation earlier this week, Scott with a client of mine who called me and she'd been looking for a particular fit. And when she called she was telling me about the skill set that this person had. And I'm listening to her. And we're also talking about a problem employee that she has. And the problem with the employee is not lack of skill set. But the employee, I don't think has bought into the mission and vision where the owner of the company's going. And the the owner of the company had not really gotten the vision and mission very clearly defined, right? So they had hired for skill set and didn't have this in place. And so now they're running into the situation where they have somebody hired, who does not want to fall in line and doesn't want to do what they need to do as far as where the company's going. And so when she called me to say, I've interviewed this other person, what do you think, and I pushed back and I said, you need to go back and talk mission and vision, don't talk skill set, we'll get to skill set, I want to know that they support the mission, the vision, what is their character like we can for what you're talking about, we can train skill set, right. But I mean, they've got basic skills, so we can certainly train the rest of that. But I don't I'm not willing to help you train somebody who's not in support of where the company's going. And the way the company's choosing to get there.
Scott BeeBe 42:09
Great wisdom. Right. So what's the
Michele 42:11
same thing that you're saying? And it's because all of those steps were not put into place in advance, and it does take intentionality. I think if I would say anything about what this entire podcast says to me, and the discussion that we're having, Scott, is that this is about intentionality and ownership, owning the mission, owning the vision, owning the forecasting, owning the budget, owning the hiring process, and being very intentional with all of it. So this is not play time, right? This isn't like why don't like it on Monday, or change it on Tuesday. This is being very thoughtful, because people's lives are, are being impacted, both internally and externally. If you have somebody that you're interviewing, and you would not let them speak for the company, and you would not put them in front of anybody, and you don't want them to tell anybody where they would work, that should be a red flag. Right? And I see people almost kind of taking a deep breath and swallowing hard and like making an offer as if they are forced to, like you're not spread it out take a little bit longer. Right. What did I say? Hire slowly fire fast.
Scott BeeBe 43:22
Yeah, there's wisdom in the cliche. I mean, there's wisdom in the cliche, there really is.
Michele 43:27
So I love how, how you have all of that. But that is a lot of meetings. Do you get a lot of pushback on that? I could see a lot of pushback coming.
Scott BeeBe 43:35
Oh, of course. Yeah. And in fact, I just got pushed back yesterday morning. We've got a construction company here locally, they do about $25 million in annual revenue. And they just went through a pounding headache, because the team member just left. And when we walked through the process, we just refined their existing process a little bit. And I'm like, Man is gonna take forever. And I walked through and I said, let's, let's take your statement, and let's find out how long it will take. And so it was 14 days that this process would take. And I said, is it worth it? To help stave off the headache that you just went through? Is 14 days worth it? They're like, yeah, it's a no brainer. Okay, well, let's, let's do the work. Here's the other side of it, though, Michele. So we're talking about the business owner solder. The beauty of this is this is a very human experience, and it's an experience. And so what ends up happening, imagine yourself being the person being interviewed. If I walked in and somebody had a non corporate, I'm not talking about one of these corporate bureaucracy, interview things, you know, the checklist with questions that are irrelevant. I'm not talking about that. I'm talking about, hey, today's day one, we're going to have this conversation around, around talking about vision, mission values in our culture. Then if this goes then day three, we're going to send you a DISC profile that goes forward then day five, we're going to meet again and talk about job roles or charts, process roadmaps, all the structural part of the job. Oh my gosh, I mean, You know, you've heard before that when you're interviewing somebody, you're selling the company as much as they're trying to sell themselves on you. There's no better sales pitch of the company, than to sit down with a process out hiring map that goes longer than three days, if you're doing a three day hiring process, you're checking for a pulse. Based on what you said earlier, you're just checking for pulses at that point, you might as well not hire a nursing company, let them come in check for pulses and start hiring everybody. We're not into that. We're into longevity, long term relationships. And so we want this process to be intentionally slow.
Michele 45:35
Oh, that makes me so happy. You know, I can remember even all the way back to my college days, and we would go into the our senior semester, we would go into kind of like this business area, and they would have different companies and all the different rooms, and we would sign up to be interviewed by the company. And I remember thinking to myself, wait a minute, they're not just interviewing me, I'm interviewing them, like, Do I even want to work with them? Right. And that was I was only 21. So I don't know where I got that idea from. I think I just didn't want to be miserable. And I had already talked to one company that I thought I probably blew the interview, they probably read on my face that I was miserable and did not want to be there. It was just I all I could think of was I felt like I would like have handcuffs on me if I had to work here. And that's not a good feeling. But But you're absolutely on point when you say it is them being bought in to the people, the work, the culture, and the mission and the vision. And if you can get everybody aligned in that way, before they walk in the door on day one. Oh, my goodness, the sailing on the other side is going to be so much smoother than bringing them in and finding out that they don't have the character set or you know, so what if you can balance my books and reconcile it. If you're a bear to work with, that's not cool. Or you don't get along with everybody else, or you don't think that we should do profit first. And so you refuse to do it? Once you get in the door as my bookkeeper, you say? And it's like, Yes, oh my gosh, the pain of that. And then the pain of I'm going to have to let you go or now I can't let you I mean, it just it's a mess. And so taking time on the front end is important. And writing out that process and then following it and telling them I believe that it provides a huge amount of comfort to the person that is interviewing like you stated, because they think the company's got their act together. And I'm not their last resort. being intentional. So they want me they really want me to come work there. And we are really a good fit. And then if you find somebody that like, you know, but step three is like, Dude, this is taking too long. You know, immediately they're not. They're not aligned with where your company's going. If they don't respect the process. They won't respect the company later. Yeah, yeah, you're right. So you've got a mission, we've got a vision, we've got the story. We know who we are, we've had a hiring process. How do we kind of wrap it all up and monitor it to make sure like, how often do we keep looking at these things? Once we've created them? To keep the business moving in the direction we want it to move? I think you mentioned that you look at the vision story in the mission. Oh, that like monthly?
Scott BeeBe 48:20
Yeah, how long so and all this, the short answer to this because it's work, it's work. It's not, there's not one little tool or trick is the team meeting structure. Imagine that that's the port the IV port that goes into the body. So if you go to the hospital, they're going to put you into IV poured in you. The reason they do that is because they've got to, they've got to give you fluids, they've got to give you medicine, antibiotics, they've got to give you painkillers, and they don't want to keep stuff and that down your mouth. And so they have a port, one port that takes everything in that one port, your team meetings are that port. And so communication has to have a hub in your team meeting acts as a beautiful, beautiful hub for that team member communication. So if that's true, and it is because we've seen it over and over and over again, we've got to have an agenda. And that team meeting, it's got to be leader led, but it's got to be agenda driven. And then all of these things can be put on the agenda. So for instance, vision can be on the agenda and right next to it a little parentheses that say, revisit on the first Tuesday meeting of every month. And so if it's the first Tuesday, you revisit it, your process, your processes that you've built out, we actually recommend something. And I'm gonna have this detail about my book, which comes out March 2019. It'll all be detailed out templates, everything will be in the book, and the master process roadmap, we're gonna take every process that exists in the business, everyone. This is how we take out the trash. This is how we do payables. This is how we do receivables. This is how we do bank reconciliations on site, job cleanup, etc. All of that is going to be on one sheet of paper. And so you take all those process names, put them in boxes, like an org chart looking setup, and that way you got one sheet of paper with every single process that exist in the business, and you're in great shape moving forward, because it's all hubbed in one place. So start thinking dashboard. And think less about just, you know, kind of haphazard, this goes here, this study or there.
Michele 50:11
That's great. Again, it goes back to looking at, like we talked about, even with driving a car looking at the dashboard, but then knowing how to fill the tank, how to do the things behind it to make it work. Right. Right. Right. So, Scott, that was a great lead in tell us about your book.
Scott BeeBe 50:28
Yeah, it's called. I've got a buddy Jesse Cole who owns the Savannah Bananas. Just look them up. And you'll get you'll get a big laugh, but
Michele 50:34
I know him. Yeah. And he actually was one of the speakers but one of the Profit First conventions, okay, yes. Just this my son's go to school near Savannah. So yes, I know. There, he is hysterical.
Scott BeeBe 50:50
He is hysterical. So we'll usually get together about every other month or so and just kind of wrap and compare stories and all that. And we were sitting down about six months ago, and Jesse, you know, he's got a book, called doing business differently and find a yellow tux. And he's got this brand, it's amazing. And we sat down and I said, Hey, man, I'm really struggling to title the book and blah, blah, blah, and, and he said, what's, what's the like, what, what are these business owners really dealing with? And I said, Well, if what they're really dealing with is they're constantly putting out fires. So they said, Scott, whatever, what whatever anybody is doing do the opposite. As well, Jesse, the opposite of that is let your business burn. He's like, I love it. And I thought about and I thought, wait a second, Michele, every business has 1000s of little fires that are burning all over the place. That's the nature of business. The reason that most heroic small business owners are exhausted, because they're trying to put them out. And we need to take an opposite approach to it and go no, about 80% of those fires are going to let them burn, I'm just going to let them burn, they'll put themselves out automatically. Yeah, they'll either run out oxygen, or they'll just be a slow burn, it's not going to bother anything. And so that's what the entire book is about. And it's literally what it walks you through step by step, it is my coaching. In a binding. That's what it is. And so we've literally taken everything and put it in there.
Michele 52:08
That is awesome. So when it comes out, you're gonna have to come back, we'll talk about it.
Scott BeeBe 52:12
We'll do it. Michele, invite me back. And I would love to do that. You got it.
Michele 52:16
'll put you on the schedule when you get that done. Because I, I love this conversation. I mean, this is what you're doing is what I do all day, every day as well, a little bit differently, of course, but but the principles are the same. And I just love how you are encouraging business owners to own their business, because by owning it, like you said, we're able to move with courage and then to be heroic, and how cool would that be for every small business owner, to be heroic in their own way, right, and then be able to have the business that supports them supports their families supports the world and those that they serve, you know, by their individualized calling, I think that is the exactly the heartbeat of my company, and yours just, you know, set in very different ways. But I just a world like that would be so awesome. Imagine what we could all do to help each other. Yeah, if we ran the business and didn't feel exhausted at the end of the day, or like, The fire got so close that it burned our feet and cinched our hair. I mean, that's not cool.
Scott BeeBe 53:24
That's a good metaphor,
Michele 53:25
right? My husband used to I'll clean it up. But there was a there's a saying in Texas. This is the clean version is put out the fire closest to your boots, huh? Yes. And so you know, don't stop and try to put out a fire that's three miles away, put out the one that is literally about to catch your whole body on fire. Yeah. We don't focus on the ones that are close to us, because they seem so big and overwhelming and daunting. And we go spend our time putting out that little fire. That's a slow burn six miles way that the winds not even moving in our direction, because it feels tiny and manageable. And so I'm with Jesse, I like the title of the book, because we can choose to let some things go and focus on the things that are closest to our boots. Exactly. Right. Well, Scott, as we wrap up, tell us where we can find you online.
Scott BeeBe 54:18
Yeah, so two places in they'll actually kind of go to the same in destination to a point. So if you go to my business on purpose, comm forward slash vision. That's where we get that vision tutorial that's ready to go bait. If you've got about an hour and a half, and you want clarity on where you're going start there. And it's just our delight to be able to it's literally the same tutorial, full length template that we walk our clients through. So you're getting that complete for you. And then also if you're going to let your business burn calm. Again, it'll be closer to the end of March, but it'll be up there of 2019 and of course thereafter, you'll be able to get a copy of that by a couple send it to your to your business owner friends so that they can start to work through that. And what I would love to see out of the book is if one business owner grabs it, give some copies their friends, and they can actually start a group together and they can start challenging and holding each other accountable through this.
Michele 55:15
That'd be amazing. That'd be great. I mentioned to you before we talked, I may very well just have to set up a book club. And we might just have to push through some of that. So I think it would be awesome. And the years have to come in and chat with this. We would love it. We would love it. That sounds great. Well, Scott, thank you so much for your time, thank you for such great insight and actionable suggestions for our business. And I know people are probably gonna like they're either pulling over on the side of the road, getting out a pen, or they're going to go listen to this, this will be one that I get an email that says I had to listen about a couple of times. So that's always to me a good sign when we've got a podcast that so detail oriented, and I appreciate that. And I'm excited to get let your business burn. So I'm going to highly recommend everybody go out to light your business, burn calm and sign up to get a copy.
Scott BeeBe 56:02
That's great. Michele, thank you so much for being so generous.
Michele 56:05
You're welcome Scott. Thanks for your time today and I look forward to having you back. All right. This was such a great early episode and totally worth repeating. Check out Scott's podcasts for more good nuggets like this. And in addition, I would really love to help you with your growing business and help you think about the intentionality and your unique perspective. This is what we focus on in the designers inner circle. Building a strong business with you in mind never cookie cutter. You can find out more on the work with me page on my website at scarlet thread consulting calm, be the hero your business needs because profit doesn't happen by accident. Profit is a Choice is proud to be part of the designnetwork.org where you can discover more design media reaching creative listeners. Thanks for listening, and stay creative and business minded.