Episode #80, Follow The 10 Commandments of Business To Get Your Business Into Heaven

Ready to shepherd your entrepreneurial venture to the land of plenty? This episode is a treasure trove of wisdom, distilled from over a thousand mentorship sessions with budding business leaders. Grab your notepad as I impart the top 10 commandments for entrepreneurial success, starting with the heavenly guidance of robust accounting systems, akin to the GPS for your business journey. Prepare for a masterclass in KPIs that will keep your finger on the pulse of your company's health and ambitions, and discover why adapting to change isn't just smart—it's essential. Plus, we dive into the divine rule of attracting and retaining the celestial best staff with competitive pay and incentives.

Now, let's talk about you, the visionary at the helm. This conversation is your portal to the self-improvement galaxy, where refining leadership skills and motivating your team is the name of the game. I'll reveal how allocating a sacred 15% of your work time to dream up your company's future can lead to profound growth. And hear why managing your cash flow with a 90-day budget is not just smart, but a commandment for maintaining financial grace. These insights are your commandments for not just running a business, but leading one to a promised land of success and sustainability. Join me, and let's chart your course to entrepreneurial enlightenment.

CEO2Rainmkr.com
Evaldez@theloandoctor.loans 

Transcript

Speaker 1: 0:03

You know, in my entrepreneurial journey, I've been a business coach, I've been a professor of entrepreneurship, I'm an entrepreneur myself. I've advised and mentored over a thousand entrepreneurs, and what I've tried to do in all those years experience is distill best practices. I'm going to have some fun today I'm going to. The name of this show is how to get your business into heaven. So if you're a Christian, you believe in the Ten Commandments, and so, from a business perspective, I have my list, which is certainly not definitive. There's other people that have tips, but my list is my top 10. And I believe that if you pay attention to these commandments and honor them, that you will be a successful business and get your business into business heaven. So today, I'm your pastor, I'm not your coach, and we're going to talk about these 10 commandments. And we're going to talk about business heaven from a context that, if you get into business heaven, let's define it as either A you sell your company for a profit. B you sell it to your employees. C you sell your business to a competitor. D you sell it to whoever you want to, but in order to create value, to sell the business and have it sustained and profitable, which is what buyers are looking for. There are certain things you need to do. In my walk, there is a much small percentage of CEOs that pay attention to all these commandments. So, again, this is just my list, my opinion based on my experience, and I'd like to have some fun with it. So we're going to go over that today.

Speaker 1: 2:25

And let's start with the first commandment of business habit high-level accounting systems which are clear, which are functional and which are run by trained people. Those financial statements should include a balance sheet and an income statement and your bank statement, and you, as the CEO, you shouldn't just look at them and throw them in your drawer. You need to look at them and to see, look behind the numbers. What are your financial statements? Tell you Are your sales up or down and why Are your profits up or down, and why is your cash flow better and why. So they're just not numbers on a piece of paper. They are a GPS system for your business to reach business heaven. That is commandment number one.

Speaker 1: 3:39

Commandment number two is establish key performance indicators, or KPIs as the business coaches, consultants of the world call them, and those key performance indicators are goals that you set for your company. Financially, the KPIs can be your gross margin percentage, your sales per employee, the number of complaints or returns that you are receiving, the number of days it's taking you to pay your vendors, the number of days it's taking to get paid on your accounts receivable, how much inventory you're carrying and what is the inventory turn In anything that you want to measure what you believe it's demonstrative of a good company. You can make it a KPI and you can monitor the KPI monthly, daily, semi-annually, quarterly, monthly, daily, semi-annually, quarterly, annually, anytime you want. But these are goals that you hit. Excuse me, these are goals that you set and you can set up your dashboard and you can look at it and say, oh okay, my gross margin was 37% this month, it should be 40%. Why the 3% differential? And then you become a detective and you work backwards and find out why. That's what KPIs can do, as they can focus on the things that you deem are the most important, and you look at them and you monitor them frequently.

Speaker 1: 5:28

Commandment number three thou shall pay attention to the external environment and modify or tweak your business model accordingly. Your business is in flux. Your environment changes can sometimes change every day. Your customer preferences can change, a new competitor can be on the block. There could be a political issue. There could be a medical issue, like COVID. There could be an industry shakedown. There could be all kinds of things that are happening in your environment, and just because your business model worked last year or last quarter doesn't mean it will hold up in a changing environment today. So you have to be a super detective and find out what's happening now or, if you're psychic, figure out what is a new trend that is developing, ie artificial intelligence, and how those factors will all affect your business. Could be the economy People are looking for deals. You have rising wages. You have rising production costs. What are you going to do? How are you going to change that? You have to have a plan to monitor your environment and change accordingly, otherwise you will not achieve sustainability. That is all I can say on that matter.

Speaker 1: 7:25

Commandment number four I know and this is a tough one, but hire the very best staff employees that you possibly can and try and pay them above market and try and incentivize them to do a better job. Provide them them bonuses, provide them commissions, whatever you can do. Now you may say, pastor Gene, labor costs are rising. My customers won't accept an increase in their prices. Am I supposed to eat these labor costs? Good point, you need to. That is an answer that's buried in your business model. If you give your customers enough value and enough premium and they're happy, there's a certain amount of costs that you can pass along to your customers in the form of a price to absorb your costs higher costs of labor. The fast food industry is going through that right now. Minimum wages are on the rise. There's no such thing as affordable fast food now these days.

Speaker 1: 8:40

So the moral of the commandment is hire the best people, because you cannot do everything by yourself. I don't care if you're a two-person company or a company that has over 20 employees. You're the visionary, you delegate, but you can't be the worker beyond everything. You're dependent upon people, and those people are going to produce a certain quality of work that has your name on it, because you're the owner, and if a mistake is made, you can't say well, that's bill's job. No, the buck stops with you. You hired them. So not only should you hire talented people, but, whether it's formal or informal, train them to be better. Give them the freedom to some extent to make some mistakes, otherwise they will not grow and the stronger the staff, combined with your executive intelligence, your customer will achieve sustainability.

Speaker 1: 9:50

Now, of all of the commandments, commandment number five, I think, is the number one, and as a consumer myself whether it's B2B or I'm dealing with businesses that are servicing consumers Listen very clearly. Don't do what the customer expects you to do. Exceed the customer's expectations. What they expect you to do is your minimum. What can you do to exceed their expectations so that they go oh wow, I've never had a company do that for me. That's what you want to plant in their brain, because then that motivates increased sales. You'll have to figure that one out, but it should be a part of your culture. We don't do what the customer expects. That's the minimum. We do what the customer does not expect, we go overboard. We give them value, and in my walk as a consumer, that commandment is violated every day. It just happened today to me and I don't have patience, because most businesses have competition and in some cases there's so much competition the product or service is commoditized. So if someone takes me for granted, I'm going elsewhere, and they'll do that to you too If they view as you as a commodity. Now you want to be a premier performing company that does beyond what the customer expects, and you can use that premium as a reason to charge a little bit more. Don't forget that. Commandment number six Invest in a high-level professional to market your business on social media.

Speaker 1: 12:31

If you feel comfortable marketing your business in a traditional way, that's fine, but social media technology is rapidly increasing every day, is rapidly increasing every day, and you need that because, no matter how good a company you are, the more people that know that you exist, the higher the percentage is that they will maybe give you a shot If they've never heard from you. There's the buyer's beware. So you need to hire a professional that can manipulate social media to create your brand, to recite your business model, to give customer testimonials All very simple. A lot of people are doing social media a lot. Some are not doing any. They're intimidated by it. They can't afford to do it. You can't afford not to do it in today's environment. You're just going to have to budget the expense related to a social media marketing specialist specialists Again.

Speaker 1: 13:48

So far, these are things that highly successful rainmakers are doing now, subconsciously. They don't even think about it, and that's why they're in business 15, 20, 25 years and that's why, when they're sold, they sell at a high premium, because they have created a business that has value by virtue of all aspects of the business, from the staff to the business model, to the marketing, to the financing, et cetera, et cetera. Now you may say, well, I'm never going to sell my business. Okay, fine, but wouldn't you like to give yourself a raise? How are you going to do that? Increase sales and increase your profits. So invest in social media through an expert. Don't try and do it yourself, because it's just another world.

Speaker 1: 14:44

Here's the second most important one. Commandment number seven find the right commercial banker. All banks are not the same. Think of a commercial banker as a investor who's putting money into your company and you don't have to give up any ownership of the company. All they want to be paid is the interest and they want the money back. So if you could pull it off, if you can grow with other people's money iea banker's money and not give up any interest in the company, that is the best of both worlds. Because if you indeed rely on an investor, no matter what percentage of interest they have in the company, they're going to ask you questions. They may be looking over your shoulder occasionally. You have to sort of bring them in to the thought process that you have. They may not agree with you and you may say, hey, wait a minute, this is my company, true, but they have money vested in you. Bankers only want their money back in the form of interest. They're going to ask you questions too, and there's financial reporting that you have to give to a banker so that they feel that your loan is being done prudently.

Speaker 1: 16:22

But first of all, you need a banker that understands your business is not too big a small, medium-sized bank, that of monitoring your cash flow, other services through cash management, credit references, credit cards, the whole bit. I will go on paper and say this that smaller banks do a better job of this than megabanks. Megabanks have become a bureaucracy. So you need to find someone who is accomplished in business, understands entrepreneurs, because you will need that person. They're going to help you increase the value of your company. So commandment number eight, this one is on you.

Speaker 1: 17:38

There is a direct parallel between the executive IQ and the sustainability of the business. In plain sixth grade language, the smarter you are, the better your business is going to be. How do you get smarter? Well, there's no shortage of information out there on executive training classes, blogs, podcasts, white papers. You can Google anything. Pick a subject that you're not conversant in as much as you'd like to be. For the most part, that's in the area of financial management. In my history is that most CEOs lack in financial management, whatever it is.

Speaker 1: 18:27

Work on all your skills how to be a good leader, how to motivate people, how to set goals, how to read financial statements, how to do a strategic plan, how to tweak your business model. You need to learn all of this stuff. When you learn it, your business will have a positive impact. But the onus on you is to take the time. Oh, pastor Gene, I haven't got time for that, I'm just so busy putting out fires. Make the time.

Speaker 1: 19:08

The more you know, the better the business does and the better the role model you are for your employees. So get busy. Start educating yourself. I don't care how you do it. Get better at what you do. You know what your weaknesses are. You know what your strengths are. Take your weaknesses and get better at what you do. You know what your weaknesses are. You know what your strengths are. Take your weaknesses and get better at it, because remember you're running the entire ship the accounting, the finance, the sales, the marketing, the operations, personnel, it. You're running everything. Maybe not, but you're responsible for it and all of those things can impact. Just even one can throw you a curveball and put a monkey wrench in your growth goals. So that was commandment number eight. Commandment number nine take the number of hours that you work, whatever it is, and take 15% of those hours, and those 15% are delegated to visionary thinking.

Speaker 1: 20:38

Looking out the window, you ask yourself questions like what do I want my company to be? Where do I want it to go? What could I do to expand my business? Should I open new geographic markets? Should I introduce new products? Should I buy a company? Should I add another location? These are all strategic thinking questions. The other 85% of your time you can do what you're always doing running the show, putting out fires, working with employees but 15% you literally have to lock yourself in your office, shut off all the noise. Look out the window and just think. Let the ideas flow. Some of the ideas will be bad, some will be good, some of the ideas will be bad, some will be good, some of them may even just excite you. Once you do that, you are creating the foundation of growing your company and achieving sustainability, because you can't maintain status quo. You can't maintain status quo. If you're not doing strategic planning, 15 of the week, you're losing. You don't have to be at the office when you do strategic planning. You can do it on a weekend, you can do it when you get home. I don't care when you do it, you got to do it. What do I want my company to be? What do I want it to be in two, three years? What do I have to do to get it? What do I want my company to be? Where do I want it to be in two, three years? What do I have to do to get it to that point? What preliminary steps can I take today to get me where I want to be in three years? That's the kind of thinking that's not focused on getting customer fires out. That's focused on the vision of the company. What you believe and what you say, as long as you back it up by action, will happen.

Speaker 1: 22:42

Number 10 commandment you know there's so many, but I believe this is one of the top 10 and that is because I hear this from my clients all the time ah, my cash flow sucks. I said do you do any cash flow planning? I go, they go. No, not really well. That the reason. If you remember when you were young and you didn't have a lot of money and you'd have a stack of bills, you knew how much you were going to get paid and you set little piles on your desk and you say, okay, these I'm going to pay with this paycheck or this month's profits. These are going to pay the next week, the next month I'm going to be slow, these are going to pay the next week, the next month, I'm going to be slow, I'm going to be late. You're involved, engaged in cash flow management.

Speaker 1: 23:42

So my recommendation is you do 90-day cash flow budgets. You have a pretty good idea of what your sales are going to be and all you need to do is, if you're selling on terms is, your cash flow budget is not going to involve your sales. It's going to evolve your projection of when the cash is going to hit your account, and you just do that for 90 days and then you list the expenses not that you're going to accrue, but you're actually going to pay whether they're going to debit your account, wires, whatever it is all of your cash expenses. The difference is cash flow, cash in, cash out, net balance, cash flow. Every month you're going to have either a break-even cash flow, negative cash flow, or a positive cash flow.

Speaker 1: 24:47

If you anticipate in that 90 days that you're going to have a negative cash flow, you need to do something in advance. Days that you're going to have a negative cash flow you need to do something in advance because that's not going to happen. If you present checks to a bank and you don't have money in their account, they're not going to pay them. That's where your banker comes in to provide you with a line of credit After you've given that person your 90-day cash flow budget and why you're going to use it. Because, let's say, you're a seasonal business and your monthly sales vary dramatically. There are spikes. You don't want to be caught. So if you manage your cash flow in 90-day increments and then monitor the results, you'll get good at it. And it doesn't have to be super complicated. Just forecast what's coming into my checkbook in the 90 days, what's going on, will I be positive or negative? And if I am since I'm being proactive what is my contingency plan to make sure that I don't have a negative cash flow.

Speaker 1: 26:02

That is crucial, and those those as your pastor today are the 10 business commandments. Follow these. Your business has an excellent chance of getting into business heaven. However, you're defining heaven as all of them or even a few, there's a high chance that you won't make it, that you will not stay in business for longer than 10 years, and seven out of 10 businesses, according to the SBA, go out of business before their 11th year. So only three survive. So that's it. Follow these commandments religiously, no pun intended, and do it, and you'll be happy for it. So that's a wrap. Thank you so much for your attention and I look forward to seeing you in a couple of weeks. If you have any questions for Pastor Gene, let me know, email me, contact me and you can listen to this show on YouTube or all of the major podcasts like Apple, spotify, amazon, etc. Thank you very much for your attention. Have a good Sunday with the family. Bye-bye.