How often do we examine the role of mental health in our professional success? Join us for a riveting discourse featuring our guest, CPA, Steve Williams, as we shed light on this less-explored avenue. With insights from a Buddhist monk in Sri Lanka, we delve into embracing realistic expectations without accepting mediocrity, and cultivating a sharper, more productive mindset for business.
Transitioning to the subject of life purpose, we discuss the impact of releasing attachments, aided by the fascinating conversation with the monk and Steve as a religious person. Hear about his personal journey towards achieving a happier, effective life through this transformative mindset. In the final segment, we underscore the essence of fostering a positive work culture and the influence of emotional intelligence in your staff. Our key takeaway? Focus on lowering expectations and celebrate the victories that exceed them, for a healthier mindset and a thriving business. So, plug in your headphones and prepare for a deep dive into the intriguing connection between mental health and business success.
Link to Show : https://ceotorainmaker.buzzsprout.com
steves contact info:
1714-2713083
steve@gyldecauwerllp.com
How often do we examine the role of mental health in our professional success? Join us for a riveting discourse featuring our guest, CPA, Steve Williams, as we shed light on this less-explored avenue. With insights from a Buddhist monk in Sri Lanka, we delve into embracing realistic expectations without accepting mediocrity, and cultivating a sharper, more productive mindset for business.
Transitioning to the subject of life purpose, we discuss the impact of releasing attachments, aided by the fascinating conversation with the monk and Steve as a religious person. Hear about his personal journey towards achieving a happier, effective life through this transformative mindset. In the final segment, we underscore the essence of fostering a positive work culture and the influence of emotional intelligence in your staff. Our key takeaway? Focus on lowering expectations and celebrate the victories that exceed them, for a healthier mindset and a thriving business. So, plug in your headphones and prepare for a deep dive into the intriguing connection between mental health and business success.
Link to Show : https://ceotorainmaker.buzzsprout.com
steves contact info:
1714-2713083
steve@gyldecauwerllp.com
some other reason? Okay, so. So the first thing is what are your most pressing pain points?
Speaker 2:This is Tony Rodriguez from Somerset Casual. I am currently acknowledging I approve of this recording. With that said, all right, here we go. Pressing points number one Okay, cash flow debt schedule. So okay. So debt schedule slash cash flow, understanding what I could do better.
Speaker 1:Okay, are you? Is that code for?
Speaker 2:your cash flow is not, I have no money for rent tomorrow.
Speaker 1:Okay, cash flow debt servicing.
Speaker 2:Yep, okay. So getting a handle on that and understanding what I need to do to guide my staff to communicate better to me about our cash flow. Okay, that's number one.
Speaker 1:How big is your staff? Okay, how big is your? How big is your? How big is your staff? Two, okay, okay. All right, so your number one priority is I got this done, okay, okay. What was it the? Your cash flow is not sufficient to handle your current debt service.
Speaker 2:Nope, it's just. I don't even want to say well, can you let me ask you a question? When you say the word debt servicing, does that include all bills, electric bill like? See how? No you, I just want to make sure I understand the word debt servicing. My debt to pay every month, my my from my loans is only $6,800. I can handle that, okay.
Speaker 1:When.
Speaker 2:I define the word and I want to make sure we're communicating correctly, because people use these words loosely. I've learned.
Speaker 1:And.
Speaker 2:I'm here to be clear on my words. When I use the word debt servicing, I'm talking about all bills that have to be paid in the month of December or for the next two weeks, any cash flow going out and any cash flow coming in.
Speaker 2:So so I don't know how you would look at that, but I always look at cash flow. Going out is debt servicing to me. I look at it all as one, because bottom line it's money that has to go out. So it's part of whether you call it debt servicing or cash flow management. It's that's how I look at it.
Speaker 1:Okay, so in the financial world debt servicing okay refers to strictly long payments principal and interest. Okay, got it and everything else is just operating expenses.
Speaker 2:Okay, so now? Thank you for clarifying that. So I need help managing operating expenses, not debt servicing.
Speaker 1:Okay, All right, let me ask you a question. As we speak, do you have a lot of accounts receivable that still have not paid you yet?
Speaker 2:Yes.
Speaker 1:And what are your normal times it takes to get paid terms from your data invoice?
Speaker 2:I would say more than 80% is COD.
Speaker 1:Eight percent is COD.
Speaker 2:Yep. Okay, 20% is net 30.
Speaker 1:Yep, okay, so if the 20% was?
Speaker 2:also.
Speaker 1:COD, would you have the operating expense challenge? Yes you would yes, okay, all right. Okay, that's number one pressing point you want to talk about that more.
Speaker 2:Number one no, it's just to put it all in some type of manageable report so that we process it. We look at it every two to three weeks, okay, and look at that and make sure it's valid. Now here's part of the problem. This goes hand in hand. Point number two, can I? It's going to be, we talk about that. But point number two yeah, go ahead. Timeliness of booking invoices Okay. Operating expenses invoices However. You want to use that, okay.
Speaker 1:Timeliness of booking invoices.
Speaker 2:Yep, okay, because I can't manage my payments for operating expenses. If all of a sudden I have daylight, call me and say we're cutting you off, we're done with you If you don't make a $5,000 payment today. And I look on our and I look on our AP report and the invoices haven't been booked yet.
Speaker 1:Okay, have you built a customer?
Speaker 2:Customer has been built Without invoice. No Customer has been built for the free. I guess I don't understand the question.
Speaker 1:So the question is you say you're booking invoices.
Speaker 2:Okay, let me back up. Here we go. This is crazy, so I got to watch my words again. Booking bills, maybe, that? What do you call it? When you owe a transportation company a payment, they send me an invoice. Okay, so you call it accounts payable. Okay, so let's talk about that then. That's what I'm talking about. Okay, forget the word invoice. I'm talking about accounts payable. Okay, so I cannot pay my bills on time if my accounts payable is not done timely, did I? You want to show what I'm saying?
Speaker 1:Yes, Okay, but let me. You have two different categories. Okay, you have accounts payable, which are your vendors, yep, and then all the rest of your operating expenses.
Speaker 2:Correct. Well, wait, say that again.
Speaker 1:You have your you have, you have two types of payments. Uh huh.
Speaker 2:Payments to vendors Yep Vendors being transportation equipment suppliers okay.
Speaker 1:The company in China Okay. And then your other overhead.
Speaker 2:Oh, you're fixed, yeah, so basically yeah, correct.
Speaker 1:So if you have a tight cash flow situation, obviously you can't pay your payables when you would like to Correct and you don't want to be shut off Correct Okay.
Speaker 2:That's a pain point, yep, and that's tied directly to cash flow, exactly Right. So that's my biggest pain right now, man.
Speaker 1:Okay, is there a a third pain point, or want to focus on just these two?
Speaker 2:Honestly, I think those two are are. If those two can be solved and figured out, the rest will work its way fine.
Speaker 1:Okay, so for these two pain points, who do you want to solve the challenge? You, your staff, me or an outside?
Speaker 2:contractor. You are an outside contractor, because no one in my staff understands.
Speaker 1:Okay, All right. Well, I I know that I'm less expensive than an outside contractor. So I'll save you money. There you go. Okay, why do you want these pain points to be fixed?
Speaker 2:By December 31st.
Speaker 1:By December 33. Okay, there's some other things on the agenda, are they not?
Speaker 2:that meaningful right now. Let's think here KPIs yeah, kpis are good, but not like like live or die right now, okay, okay.
Speaker 2:So, since we only have a month, I can give a general overview on these for now. If you want, okay, let's do that. Is that cool? Yeah, okay, and just to make sure I can see right now you and I need to make, I can tell you. I want you to stop me like I'm stopping you when we seem to have. How do I say? Our language isn't the same Correct, and I'm noticing that quite a bit already.
Speaker 1:Yeah, there's what they call CFOs Speak yeah and then just yeah, not non CFOs.
Speaker 2:Yeah, right, and again I'm going to. I do have a degree in accounting, I understand all that stuff, but I'm not CFO material Are a CFO. I am a CEO that has ran companies and understands for the most part what that person does, but not the CFO role. I know what I think a CFO should do. Okay, I have my ideas, but let's go through this and I'll. What I'll do is I'll, I'll. I'll express to you yeah, that's exactly what I expect my CFO to do. You see, and provide me which, which you start getting into that. So, when we look at this, who is the primary person responsible to address the pay? Okay, so we talked about that. What KPI do you want to establish for 2024? So I want you. Can you give me the definition? And I know what it is, but I want to hear it from you KPI- API is a abbreviation, or key performance indicators.
Speaker 1:Okay, it is numbers that tell you that you're on the right track.
Speaker 2:Okay, all right. So here's what I have for right now, and I I only use the fundamentals for right now. Okay, okay, I use my sales, okay, I use my gross profit.
Speaker 1:Okay.
Speaker 2:And I I use my net profit.
Speaker 1:Okay.
Speaker 2:Okay, those are my three KPIs that I currently use to gain the performance of how we're doing every month.
Speaker 1:Okay, let me ask you a question Do you measure the? I'm really sorry about this double what? Because of where you know we're talking on myself.
Speaker 2:It's it's. It's okay for me. You could take these out. Is your cell on speaker? I can take it out.
Speaker 1:Let me do that yeah.
Speaker 2:Yeah, you know, I don't just use your speaker, that's what I'm doing.
Speaker 1:Okay, can you hear me now?
Speaker 2:Of course I hear you.
Speaker 1:Okay, so so the sales, the gross P and the net profit margin as a KPI, is that compared to what you did? What's the base year? What are you evaluating what you did the previous month of the previous year, or what?
Speaker 2:Oh yeah, two of them, I use year to date and month to date. I mean months, you know. Per month.
Speaker 1:You're today for sales and you're today for gross margin Both of us.
Speaker 2:All three I look at. Every week I get a report that shows me here to date for those three things.
Speaker 1:Okay.
Speaker 2:And Month to date or month for the month.
Speaker 1:And that's compared to the prior year, right? So if your sales year to date in 2022 was four million and your sales year to date this year is five million and you're up 25%, right, that makes you happy.
Speaker 2:Yep? No, not necessarily. I didn't care less about sales, that's. That doesn't matter to me. What matters to me is the gross profit is more important and the net profit is the most important.
Speaker 1:Okay, all right, that's good. That's a good comment, then. So If your sales were flat, this is the prior year and you were making more money?
Speaker 2:You would be happy. Exactly, and that happened this year.
Speaker 1:Okay. Well, that's good too, because, in terms of your exit strategy, yep, your Iba da is not going to focus on your sales, it's going to focus on your net profit.
Speaker 2:Correct.
Speaker 1:Which, whatever the multiple is in your industry, that's going to raise the business value Okay. So I'm wondering it kind of begs the question what sales as a KPI?
Speaker 2:I use sales. Let me lower this down.
Speaker 1:There's a big echo when I.
Speaker 2:Okay, I use sales to gauge. What do I use sales for? To gauge production of the employees.
Speaker 1:Okay.
Speaker 2:That's what I use sales for.
Speaker 1:Okay, let me throw this out for you, tony. There's a, there's a KPI, which it's simple math. You take the Number of sales that you have here today and you divided by the employees, and you get what is called a productivity.
Speaker 2:I remember that, yes.
Speaker 1:And it basically says for every employee is generating $12 and 32 cents for my sales. If that number goes up, that's good. If the number goes down, then you have some dead wood or some people that are not doing their job as sufficiently and effectively as it should.
Speaker 2:We could throw that in as a KPI. I like that. Good, I like it.
Speaker 1:Okay, and that would be a KPI, which is, you know, you'd get on your monthly desktop. What is my sales per employee, yep, and you always wanted to go up or at least stay the same, never go down. Correct, which means either a you maybe hired wrong or you don't need that person full time. Or they're not carrying their way Correct. Okay, all right, I love that. I mean any other KPIs other than these three that you'd like?
Speaker 2:to Clue in on. I can give you some examples if you'd like, I mean I will tell you AR turn. I don't care too much.
Speaker 1:I probably worry about inventory turn rather than AR turn you know my average days of AR?
Speaker 2:I don't know, I don't know.
Speaker 1:I don't know.
Speaker 2:Not really relevant.
Speaker 1:Did you say you want to?
Speaker 2:Clue in an inventory turn a little bit Inventory with my terms for sure.
Speaker 1:Okay, so Go ahead.
Speaker 2:I'm sorry Go ahead.
Speaker 1:I was just going to say is there a Inventory turn that you want to hit every month?
Speaker 2:I think we're going to be doing it at least for a year.
Speaker 1:So I would say you know, obviously, if our inventory is 2 million, I should be going eight million. Okay, so we have to do a formula which turns into I'm turning my inventory every 45 days, or whatever. That's a simple equation. But you'd like to have that as a KPI? Yes, okay, so that's a good one. Now everybody's heard of the 80 20 rule Yep Okay.
Speaker 2:If we were to how many SKUs do you have in in your inventory. I was waiting for that A million In.
Speaker 1:COVID.
Speaker 2:Yeah, 500.
Speaker 1:You had 500 SKUs. What?
Speaker 2:How much do you have now?
Speaker 1:I lowered it to one.
Speaker 2:Okay, so you're leaning me. Okay, so I'm going to. I'm going to go ahead and do this.
Speaker 1:I'm going to go ahead and do the math. Okay, so you're going to be looking at, looking at how much you can treat and fine tune codes. Okay, so is your inventory on a perpetual system?
Speaker 2:Do you take a physical inventory every now and then, or how do you track your sales, your rate of sales? Well, I again, I may not answer your question in the way it's supposed to be answered, but we do cycle counts regularly. I have no reports as far as that's concerned. More questions.
Speaker 1:Okay. So if you have a hundred and twenty, a hundred and fifty SKUs okay, and you had a report that told you the rate of sale for each SKU, there's going to be some dogs in there, there's going to be some winners and there's going to be some in the middle. The question then becomes should I hang on to the dogs because every now and then some of them might ask for it, or is it just too costly to have it on my menu?
Speaker 2:So when I did the cut of getting rid of 300 SKUs, I did that.
Speaker 1:Okay.
Speaker 2:How often should I do it? That's a question for you. I don't know the answer to that.
Speaker 1:Well, what we could do. Depending on the frequency, we could do it either quarterly or semi-annually. We could do the 80-20 rule and say, okay, if 20% of the SKUs 20% of the 150 or 30, are generating 80% of my sales, what do I need the other 120 SKUs for? We don't know that. See, look at the numbers. That would help your cash flow, because your inventory is dead cash until it's sold and collected.
Speaker 2:Yeah, so two things I should be looking at Number one, what you just said, and number two, the reorder points.
Speaker 1:Yes.
Speaker 2:And I'm not doing that.
Speaker 1:Okay, so do you occasionally have stock outs? I'm sorry, do you occasionally have stock outs? Stock?
Speaker 2:outs, please explain.
Speaker 1:A customer calls you and said I want this. And said, holy shit, I just sold my last one.
Speaker 2:Yeah, regularly, yeah, absolutely, and we're almost to the point where almost have every one of those years back in stock again for the first time in many years.
Speaker 1:Well, as you know, with the advances in technology, there's all kinds of inventory control systems that would allow you to have, well, pretty much eliminate, any stock outs.
Speaker 2:And, with that said, I have see again another responsibility. I feel like with the CFOs. I feel that our fishbowl system that we have does that Okay. Nobody knows how to use it.
Speaker 1:Okay, so then that's a training issue.
Speaker 2:Yeah.
Speaker 1:And the people that you have that are supposedly managing it. Are they trainable, in your opinion? No they're not, which then raises a question do you have the right person and the right job?
Speaker 2:Let me back up. I shouldn't say that yeah. I would say, yes, let's get. Let me change that to yes.
Speaker 1:Well, let me rephrase the question Would you rather have, if you had a state-of-the-art inventory's reporting system? Would you want an outside contract or providing that for you, or would you prefer to train and employ how to use the software? Okay, all right. Okay, and are there any in your industry that you're already familiar with?
Speaker 2:Well, I think we have one, okay, but Management, I mean this what's the name of the program?
Speaker 1:fishbowl okay, so you have fishbowl, which should provide you with on-time inventory Reporting. Is just that your personnel don't know how to use it, but they can be trained, correct? And Is fishbowl the name of the software? Yes, yes, so usually these software companies, as you know, have a contact person, or they have a training module, or they have somebody that can walk them through how to use the system. Have they tried that already?
Speaker 2:Yep, and we did. And yeah, let's just say we have a Kevin who's the CFOs and I picked my fights. Believe we don't need to pay for training and we don't need to pay for service contracts. Get the software. But you're paying, Kevin but we're paying, kevin, yeah.
Speaker 2:There's Kevin on how to use it If you task him with I want to report, to do this. Yes, he is very good at that point. Okay, so if I gave him, let's say you come up with Jane, you help me come up with a list of reports. You want us to start creating and memorizing. I will give him the list and tell him get to work. I want this done. He'll probably have it done in a day or two. That's how smart.
Speaker 1:Okay, well, I think that's a good option, don't you think?
Speaker 2:Yeah absolutely.
Speaker 1:I mean, you're already paying him anyway.
Speaker 2:Well, let me. Let me share this with you. I have a call with him this afternoon.
Speaker 1:Okay.
Speaker 2:I want to cut his pay in half, and or I want him to resign.
Speaker 1:Geez, you're playing hardball.
Speaker 2:Well, I'm paying him, he remember he's getting paid the same as me. I know, I think you said 80,000 same as me, you know, and he lives in Minnesota.
Speaker 2:He, I know there's no way he's working 40 hours a week for Somerset you know, they're just there like I have no measure, there's not out, there's no task assigned to him, it's just. Whenever you meet him, you call him, he answers the phone all the time and he does what you need to do. He's done in 10 minutes and then he's done for the day. I mean, it's, it's, it's. It's a lot of money to pay for somebody that's just like more of a consultant rather than an employee.
Speaker 1:Okay. Well then, tony, if I did, wasn't aware you're gonna have this meeting. So if he boxed and says, well, I'm not taking a 50% pay cut, and you say, well, then I'm gonna have to let you go, and he says, okay, fine, then there's no, there's no sense of giving him any list of reports because he's not gonna be around, right or or I do the opposite.
Speaker 2:I give him tasks and and responsibilities to do that I want done on a weekly basis. Okay and I get my money's worth.
Speaker 1:Okay, so you would retain. You still pay him the 80,000. You're just gonna make him work on it. You're gonna give him a heavy to-do list.
Speaker 2:That's correct, and those reports would be discussed between you and me okay, okay, all right.
Speaker 1:Well then then the map basis. Then I can send you Sort of a summary of. Tony, Can you provide the? Can you prepare reports To provide this kind of information? Yeah, okay, all right, I think I can get that to you, not think I will get it you tomorrow? Okay for it. Okay, what happened to my? Okay, anything else on the agenda that you want to talk about?
Speaker 2:right now I don't know too much further to be, but Um it bookkeeping, basic bookkeeping. Okay and I have a meeting with my staff. We're gonna go through all Everything that needs to be bookkeeping, but I need which. This is where you come and play. I don't know, to be honest with you, I don't know your accounting background.
Speaker 1:It's heavy.
Speaker 2:Okay, so I need and it sounds like you need access to our QuickBooks.
Speaker 1:Yep.
Speaker 2:And to be able to look at it and you and I go through it and I show you what I know. That's jacked up and Then from there you can put a plan together and this could be part of Kevin's list. Here's what you need to fix this crap.
Speaker 1:Okay, um, you have a card. Okay, you have a current bookkeeper now.
Speaker 2:Nope, I fired up.
Speaker 1:Okay, so you do not have a bookkeeper. And If you did have a bookkeeper, would you prefer to have them on the payroll or just outside? Contractor hourly. Hourly contractor Yep Okay.
Speaker 2:I Will keep.
Speaker 1:it is not a full-time job for us, no, it isn't, and Do you have somebody in mind, or would you like me to help you find somebody that's recently?
Speaker 2:done finding people, cuz I keep finding the wrong people.
Speaker 1:Okay, so you want me to help you in that area. So, if you can, if you can you or your staff you're probably too busy. If your staff can email me Maybe, the year-to-date balance sheet and profit and loss, I'll take a look at that.
Speaker 2:I'll do it right now.
Speaker 1:Okay, just send it to me. To email it to me and I'll take a look at it, and then I can call you tomorrow.
Speaker 2:Okay, so hold on year. Year to date. Hold on year to date year to date sales.
Speaker 1:Excuse me. Year to date profit and loss. Year to date balance sheet.
Speaker 2:Oh yeah, balance sheet. I got a second.
Speaker 1:Every Sunday I get emailed the report, so well, and, and since you're in a giving mood, is it your birthday today.
Speaker 2:No, that's an old one, but I just wanted to wish me happy birthday for March.
Speaker 1:Okay, well, since we're now In the partial process of information gathering a year-to-date balance sheet, a year-to-date income statement If you could put together, if you don't already have it, what is the list of your current debts which require a principal or interest payment?
Speaker 2:Just the SBA loan.
Speaker 1:Okay, well, just add that on the email and then maybe the last two months bank statements. Yep which is the peer definition of cash flow, because it's going to show the cash into the account and the cash out and we can work with that. That'll be a tool.
Speaker 2:Yep.
Speaker 1:Okay, are we okay on time? I think we're okay, but how are you on your pricing and cost of county? Do you know? Are you pretty feel, pretty comfortable? Your gross margin reports are actually what it costs you and what you sold it for.
Speaker 2:So here's what I would do on our list for a cabinet, take 150 shoes. Yeah put them in a cauchy and and then cost, and then have landed cost and, and then our MSRP, basically right, and I want you to review that, because here's what happened Until last year there were several spews we were selling. Every time we sold one out the door, we lost one. Yeah because he did not do the costing currently.
Speaker 1:Okay.
Speaker 2:I relied on him to do the costing. He relied on me to make the sales. Okay, I look at gross profit and I've seen it significantly increase. Now I know we're on the right track, but if you ask me first view, I can't answer it.
Speaker 1:Okay, Now, when you said create the spreadsheet for Kevin, you said cost. Then there was another word that you said the manufacturer suggested selling price.
Speaker 2:Well, yeah, correct. Well, you have cost, and then you have landed cost.
Speaker 1:Landed cost with the freight.
Speaker 2:Well, yeah, and here's what happened before. He just added 10% at the cost of the manufacturer and you know, afraid, right.
Speaker 1:Yeah.
Speaker 2:Some items were 40% free. Some items were 8% free.
Speaker 1:Geez Louise Okay.
Speaker 2:That's how bad it was, but that's he should have understood that.
Speaker 1:Got it, you're absolutely right, okay, so not maximizing your profitability affects your cash flow.
Speaker 2:Thank you.
Speaker 1:So what about value added? When you buy the raw material other than the freight, is it ready to go, or do you have to add some kind of minor labor to it?
Speaker 2:Products are ready to go.
Speaker 1:Okay, so then it's just cost and landed cost.
Speaker 2:Yeah, and that's what makes up landed cost is tariffs like tariff freight. And then there's two types of freight ocean freight and drage from the port to me.
Speaker 1:Yeah.
Speaker 2:So that's what? And then we'll get a landed cost.
Speaker 1:Okay, and do you have a targeted gross profit that you're shooting for over on all SKUs or are there some where you could slip it in? That's not competitive, or is there standard across the board?
Speaker 2:Yeah, I shoot for 50% GP.
Speaker 1:Okay, so if it costs you $50 landed, you want to sell it for 75 or 100?
Speaker 2:100.
Speaker 1:Okay, so that's a 100% markup.
Speaker 2:I'm sorry, 75. My fault 75.
Speaker 1:Okay, okay, that's a 50% markup. So your GP, your targeted GP, as far as the KPI go, should be 50%. That's correct. Are you getting that or are you not sure yet?
Speaker 2:Yeah, I'm there now. Well, I won at 38.
Speaker 1:50% gross margin. Tony is a great GP.
Speaker 2:Yeah.
Speaker 1:Okay, there's going to take more digging as to why we're not making money. Why you're not making more money or why there isn't more money in the bank account. I'm not going to be able to. The two of us are not going to be able to answer the question in 30 minutes, but over time we will and we'll get to the bottom of this. Okay, is there any other CFO stuff that you wanted me to go over, or is it just those two pain points Cash flow, debt servicing, ap.
Speaker 2:Yeah, I think we're good. Let me just go back and look at your agenda, because maybe you had something on there that will sting me.
Speaker 1:Sales goals, sales, I won't yeah.
Speaker 2:The last ones until you have all the information. Maybe our next call I'd like to go over what are your goals for 2024? Okay, Because, I did a, for instance. I have never gauged. I did a for us.
Speaker 1:All right, let me ask you a couple more final questions. So, in terms of your exit strategy, is there a number that you're looking for to sell off your interest?
Speaker 2:Three to five is where I'm at.
Speaker 1:Three to five, and that's well, let me see. So you told me at our lunch meeting that you, on the tax returns, you own 100% of the company, but the Chinese company actually owns how much? Again, 51. So you're looking at three to five million for your 49% and the buyer could either be the Chinese company or some other equity buyer whoever Correct. Okay, do we know? Do you know, in terms of your industry, what type of EBITDA you must generate to command a three to five point million dollar valuation for your 49%? I do not, but I can research that so I can say you become a 12-man dollar company and you own 49%. This is how much your 49% would be, and it would be somewhere between three to five million, and that 12 million is based on some multiple of whatever your annual EBITDA is Right. Okay, I got it. Any other questions? Are there any other items you believe you would like to talk to or you wish to comment? I'm Colleen St Gomez, still there.
Speaker 2:I'm here.
Speaker 1:And when we meet we don't have to do it via Zoom all the time. It could just be a phone call. I just sometimes think. Yeah, but I'm just uh, can't figure out.
Speaker 2:I don't know, yeah, maybe. I don't know why has your zone worked before?
Speaker 1:No, this is the first time it's ever happened. It's it's happened where you temporarily can hear me and then the um, my guest, click something and then we're in.
Speaker 2:So let me ask you when you're how, how are you for your microphone? Mine is through my laptop.
Speaker 1:Yep.
Speaker 2:Where's your microphone?
Speaker 1:My micro, my microphone, is through the laptop.
Speaker 2:Oh, so why'd you have your budget?
Speaker 1:I wasn't paying attention.
Speaker 2:Oh, okay, that's what threw me off.
Speaker 1:So I have an iPad pro and they have a personal computer Right and I use zoom on either one of them, but the the picture is clear for the iPad. That's why I use zoom. I use zoom.
Speaker 2:There's something in your iPad setting that's not letting your voice.
Speaker 1:Well, I'll double check it. Then I'll double check it, but I think we had a successful meeting. All right, so we can focus on those two point point uh, pain points, and you can send me you have the lobby list, right?
Speaker 2:Yep, now let's talk, let's talk 1500. Um, now, that's fine. What I'd like to do, if it works for you, is um, by Monday, send you 500, and then by Friday, 500 and then the balance.
Speaker 1:That's fine, that's fine, that's fine to figure out.
Speaker 2:Like I said, I'm such in a mess right now.
Speaker 1:I get it.
Speaker 2:I mean I just drained my and that's part of my frustration with Kevin I just drained my personal accounts to make payroll last week and I didn't even have enough money to make my pay.
Speaker 1:Yeah.
Speaker 2:And I I mean I got six payroll checks. I haven't paid myself. No.
Speaker 1:Well, it shouldn't be this way. I mean I know that you're not going to be able to pay your payroll. Obviously, I know you're only as you can. There's only so many you're. You're great at sales, Right, Even though you know an accounting, you have an accounting degree. You make your money when you're out there in the marketplace creating opportunities. Yeah.
Speaker 2:So you're relying on your infrastructure to support what you're doing.
Speaker 1:I love selling our problems. It's great, I get it, I get it. So I guess they have to you work well, they have to work well. That any CEO is only as good as the team the has behind them, whether it's an administrative capacity and accounting capacity, what ever it is, cause you can't do everything. Okay, all right, um, you'll send the information.
Speaker 2:And I will get Kevin out the um, oh, I sent it to you.
Speaker 1:Yes, and then the last month bank statements. Gotcha Okay Got it and the inventory that I will see on your balance sheet in terms of a total number, are you fairly confident that that is in the warehouse, that dollar value?
Speaker 2:It is, but take minus 500,000, because that's kind of like owed to the covers. Those are covers and those don't belong to us. Those are like consignments.
Speaker 1:Okay, so consignment. By definition, it's not your inventory until you sell it.
Speaker 2:Right, correct.
Speaker 1:Right, okay.
Speaker 2:It shows on the books inventory. So I think our inventory is like 2 million, but it really should be one point shy.
Speaker 1:Okay, all right.
Speaker 2:And how did you?
Speaker 1:what were your sales in November?
Speaker 2:They were up. Actually it's really nice. That's the one thing I like, but I'm not. I know I'm not getting all the reports I should get, but let's go in someday. Let me just give you an idea.
Speaker 1:Yeah, just just a curious are you? Are you on track to beat last year's numbers? I think we're ahead. Sunday morning.
Speaker 2:I get them every morning. Sunday morning they show up. All right, here we go. Okay, financial reports. Let me just show you this. Yeah, Let me forward this to you real quick.
Speaker 1:Let me see how who prepares that report for you.
Speaker 2:Well, it again. In the old world, who, per some talent, repairs it? In the new world it's automatically produced, because your real time. Every time invoices are being done, it's downloaded into QuickBooks. Does that make sense? Yes, yes.
Speaker 1:Okay.
Speaker 2:Nobody, nobody reviewed it, though that's your question.
Speaker 1:Okay, but at least 80% of your sales is cash. Only 20% is on terms.
Speaker 2:Yeah, so see if you got that.
Speaker 1:Okay, so I'll leave you with this, the. When most people have cash flow issues, it's related to their slowness of the receivables. But receivables is a minor part of your sales, since you get it paid up front, so it's in the inventory and profitability. That's where the cash flow is being tied up. So if there was a way to generate the same amount of sales and not keep as many SKUs, that would be the quick solution. But I don't know that until I look at all the data.
Speaker 1:But I'll go over everything with you and you can call me anytime. I don't care when you call me on a Sunday night at 2 AM. If you have a question, it doesn't matter. And so the general overview of what I'm going to do would be, if you want to call this sort of a formal Zoom meeting, informal phone calls, preparation of reports and we haven't even talked about banking yet. I'm assuming that you're tapped out on your $500,000 line, right? It's stiff, so that would have to be on your debt schedule as well as your SBA loan, or are they the same?
Speaker 2:Well, no, I'm going to give that to you. It's $6,800 a month.
Speaker 1:Is the $500,000 that an SBA loan?
Speaker 2:SBA loan yes.
Speaker 1:OK, so you don't have a conventional bank line of credit? No, ok, all right. So you don't have any in and out borrowing mechanism? No, because the term loan, the $500,000, all came out of one fell swoop and you're making payments on it, yep, so one of the things to as a tool for your cash flow is to secure a line of credit to tap as needed, right, correct, and hopefully East West Bank would step up to do it. But if they don't, then you might have to consider something, right, ok, that's it.
Speaker 2:All right, buddy.
Speaker 1:OK, so you'll send me that stuff.
Speaker 2:Do it right now.
Speaker 1:And when do you want me to call you next?
Speaker 2:Well, I'll send you these reports today.
Speaker 1:Yep.
Speaker 2:And you tell me you want to review them. So what's the next week?
Speaker 1:Yeah, so I would say Monday or Tuesday next week.
Speaker 2:OK, so let's plan on that then.
Speaker 1:You want to set a date now, or you want to wait for me to call you.
Speaker 2:Monday morning. No, no, no, no, no, no, let's do it. I prefer Monday. I would prefer Monday.
Speaker 1:OK, let me check my schedule. Monday I don't think I got much going on Monday. That is the fourth.
Speaker 2:Oh, I had a scheduled. That's weird. I had a schedule for 10 AM on Tuesday. That's weird, but OK.
Speaker 1:Wednesday when yeah, monday the fourth on Wide Open. What time is good for you? Monday the fourth.
Speaker 2:Let's do it. Let's go 11 AM or 10 AM. You want 10 or 11?
Speaker 1:Let's do 11. And do you want to do just a phone call or do you want to do a Zoom?
Speaker 2:No, I like this right here.
Speaker 1:OK, all right, that's a wrap, tony, and then I'll analyze everything you gave me and that'll generate some more questions, but this is a good meeting.
Speaker 2:You got it, buddy, thank you.
Speaker 1:OK, all right Talk to you soon.
Speaker 2:Bye buddy.