 Hey, good afternoon Tom Stewart here. I'm with Liz Trotter and our guest today is Derek Christian smart business moves This is Wednesday December what 8th? 2021 it is Can you believe how many how many days till Christmas? Not enough. Yeah Two weeks in a couple days. So at 17 days. Yep That is not enough time. You're right. I'm gonna be out of town for one of those weeks So I'm just like feel a little stressy Somebody asked me a day. Has somebody asked me to have felt about Christmas and you know, I Know it's not cool to say well, you know, I don't like Christmas and it's not really I don't like Christmas It just gets in a way of things that are really more important that I should be doing and Because Christmas is like my thing Very into it Derek every time I buy one of those little Animals that move I think of you. I was just sharing with Laura that I have 42 boxes of Christmas decorations And you're not talking like little boxes Yeah, she informed me that I'm allowed to bring three so I better Oh Well, I have six and I thought that was a lot My family's got a long-running tradition that we got a Christmas decoration every year from our grandparents But it goes back multiple generations. So I've got my great-grandmother stuff I've got my grandmother stuff my dad stuff my stuff. So yeah And of course my mom moved into a tiny house a few years ago. So she gave me all her stuff and does any of this include the menagerie of like Stuff animals and other caricatures. Yeah, there's four boxes of stuffed animals. There's Yeah I don't know if you department 56 stuff, you know, they're like snow village stuff I think there's a hundred and twenty pieces of that. So yeah Wow, well, you could make some money selling some of that stuff. It's it's quite the setup. So yes Since you're only taking three boxes of money You know that you're gonna have to sneak it in in your suitcase little Yeah, I said I get to set up snow village in the basement. She's like, all right I just want to go to the basement for the month of December and there's plenty of room down there That would actually be awesome And you should take all those boxes of decorations and only decorate the basement I'll be crazy. Hey Denet All right, so Tom heads up next week. You gotta get out your gear your head gear It's getting that time, isn't it? I got all my stuff out. I'm ready to go for next week So I'm taking a bunch with me to Texas and I'll have my grandbaby wearing him too. We'll have everybody wearing that stuff Awesome, well guess what today is? Ah What's this called again? You always tell us it's the jolts report job openings and labor turnover report and this number Right here basically is the number of unfilled job openings in the u.s And this doesn't have the number of people looking for jobs But basically there are more job openings than there are people even looking for work And This number is almost the record the record was set in july and this goes back to like 2000 they started doing this over the last 20 years. This is the highest And I've been reading some numbers that suggest that this number the number of people coming back to the workforce Just uh, isn't isn't going to happen. Yeah Yeah, it makes sense. I know a lot of people that aren't going back to the workforce. They just don't See the need And there that's not the plan Yeah, there's a lot of demographic issues just in terms of you know, the the boomers are you know getting older and The reproduction rates aren't as high as they used to be and I mean, there's just a lot of factors at play that fewer people are are going to be in the workforce for the foreseeable future Well Tim has been crabby the last couple of days for anybody that knows tim knows He doesn't really get crabby. He gets crabby like twice a year normally But he's been ridiculously crabby the last two days three days and he went to Taco Bell as it was Taco Bell and They got his order all wrong. It was all jacked up And all he could say is I can't wait until they get those robots. Why can't they replace these people? It's got to happen faster. I was like Honey, please do not rant and rave about that anywhere except in our kitchen. Okay because that is not going to be a popular Thing to be ranting about. Yeah, they just actually sent out a big newsletter one of the Alumni of the high school. My daughter goes to just got seven million dollars from Kleiner Perkins because he's got a chef's robotics company To replace people in the kitchen Oh, okay. What's coming. Yep. It's gotta come no choice if people aren't coming back to work. What are you gonna do? All right, it's gotta happen and it makes sense they're gonna hit the those minimum wage jobs, so It's fun to that Yeah, I wouldn't I wouldn't not be surprised with that some doubt it Yeah, I wouldn't either. Yeah good call But that's all we're talking about with you today Derek. What are you on smart business moves? What are you gonna share? We're gonna talk a little bit about business planning and strategy for the next year coming ahead Everyone's wrapping up and kind of looking ahead a little bit That's a that's a great coincidence because budgeting and Planning is what we're doing this month on smart business moves. So really you plan your guests. No Good job Derek. Good job. I'm glad you're gonna talk about what we were talking about Well You guys know that our planning Um Leaves much to be desired We could do a much better job of planning We tend to go into the month with like half of our slots booked and then we're like Who would be good? Who do we like? Who makes a really good guest? So we just want to we want to be agile. We want to be able to like adapt when things happen and so But if you're getting an email at the last second You should take it as a compliment because what that means is we think you make a great guest And they don't need to prep and that we're good with whatever you bring Even if you don't have time to prep, we know it's going to be good So we're all you people that are getting that last minute email I was uh chatting with uh what I hope to be uh one of our guests on the On the 27th of december And the response was you guys are working over christmas and that's like christmas is saturday monday's a work day. Yeah And the wednesday evidently not for everybody though Well, we are doing and um So in the strategic success groups, we have this big thing that we do once a month. It's called forum And it's like a deep dive on on a company that usually lasts about two hours And we're doing one on somebody's company on the 23rd I thought oh wow that's getting close to christmas. I is everybody gonna be okay not one person That group I think has 18 people in it not one person said It doesn't work for me. Everybody was like, yeah, no problem. No problem. No problem. I'm working sure well I feel like that's kind of the way the people that are Are really working at Apparently not our guest though our potential guest Oh We're we're we're we're negotiating I'm holding out hope so Derek, uh, I know that Right amount of money Derek I mean I can talk on almost any topic if the pays high enough We're we're we're here at our we're we're here to get I'll be working that day. It's a matter for who That's kidding We're here to give back to the industry. There's no money changing hands here. Believe me But Derek if you want to give us some money, I will accept money That's fine if you're for bitcoin No, I don't want bitcoin Is it still declining it was diving most I saw I took a dump this weekend pretty hard and it's kind of been floundering around 50 I'm gonna be nice and see what happens with all that in the long run Yeah So Derek what are I mean? We've we've you know coached together over the years and I know that we've done presentations on budgeting and planning and all of that and You know, I know that you've probably spent the last couple of days pulling material together for this that you could could share with us I'm kind of anxious to see where you want to go with this I think well, yeah, we just want to talk a little bit about planning for the next year and Um, believe it or not my I I worked at park during gamble for a long time And my last job that I spent three years doing there was what was called market strategy and planning So my whole gig was to figure out what this big multi-billion dollar company was going to sell Um for next year where we were going to sell how much we were going to make and we were pretty good at it We could normally you know hit within a penny a share what we were going to make the next year And when I got involved in small businesses, it felt like everybody was guessing When you'd ask everybody what they're doing next year that I'll be like, I don't know I'm gonna make some money and hopefully get a little bit bigger, you know more than last year Hopefully, but nobody ever seemed to really have any solid plans or numbers So that's something that really kind of drove me. He's trying to figure out how to get a little bit of Disciplining to the small business world because uh, you know, I don't know about you guys But I have mortgages and schools to pay for and I'm a little uncomfortable with the idea that I'm guessing That how much money I'm going to make next year So I really wanted to try to get that down a little bit more to a science and spend a lot of time working on it And uh, it was kind of interesting because a lot, you know, a lot of times people are like, wow This is really amazing. Where did you come up with this? I'm like, honestly I just took the stuff they taught me a png and tweaked it to try to make it figure out how to work in the small business world So yeah Yeah, well, I mean that that to me makes it even more valuable. It's tried and true Stuff that's been proven And one of the things that I talk about a lot and is a pretty complicated subject and I teach in depth in some other classes Is just the idea that I always recommend that you kind of have two goals in mind that you're aiming for And uh at park during gamble, we always call them base goal and stretch goal And your base goal is the goal that you're like 95 confident. You're gonna hit Um, it could be the number you did last year what you are, you know If you keep the same growth rate as last year, but what are you really confident and feels Like you can hit and then stretch is what you want to actually aim for And what most people make a mistake on is they say, you know what next year I'm gonna try to grow by 200 000 and I'm gonna spend 10 on marketing So they spend like they've actually already generated that 1.2 million in revenue And if they only hit half their goal, but they spent like they're gonna have all that revenue They end up actually making less money this year than they did last year And so one of the things that I really talk about is you want to only budget towards your base goal And that's why it's called base because you base your budgets off of it Um, but then when it comes to your team, they don't know that budget exists You never talk about that with them. All you ever talk about is what your goals are what you're aiming for And that way as long as you land anywhere between base and stretch goal You do really well and honestly when it comes to a cleaning company And forecasting your growth, there's excel spreadsheets and that's a whole class And I'm not sure I can cover that in a time we've got today Although I'm sure tom would be happy to throw some excel spreadsheets up another time and go over it Um But the example that I always use because people tend to get it and it's got less variables Is I think all three of us at one point or another were involved in like putting on the arxie convention, right? Yeah Where we're doing that convention out in vegas and we always would have big goals our goal would always be You know, we're going to put 400 people in the show this year 600 people on the show this year But what we would all what I would always do though is our base budget our base goal would be to match last year So if we had 400 people last like, you know what I'm pretty confident that even if we completely drop the ball We can do 400 again because we did 400 last year So when we would make our budget for that event and figure out how much we could spend on food and marketing and speakers We were using the number of 400 Now we would be aiming to get 600 butts in the room 600 people there So all of our marketing all of our goals would be driven on that And it was always hysterical to us because we would miss our goals sometimes and hit 500 people But everyone in the trade association is like this is great. It was the most profitable event ever But the reason why is because we would spend and act like we were aiming for 400 When it came to our budget, but all of our business goals and everything were aimed on six and That sounds tricky, especially when it comes to marketing sometimes people will be like, well, how can you grow without spending? And honestly, it just forces focus I find a lot of times the businesses that do the worst are the ones with too much money We've all coached a fair amount of startups and startups with too much money tend to throw too much money at problems instead of actually Solving it and being a little bit short on capital sometimes actually forces you to focus a little bit better And you know, so I'm not saying, you know, not to invest I'm just saying to invest smart invest the money that you know for sure that you you're going to have Because everyone makes these budgets and like I said, we'll say I'm going to spend 10 percent of my 1.2 million dollar goal on marketing But 120,000 but you know, if you only were a million last year, then That's a big gap. That's a lot of risk. Yeah So that's basically the the concept that I want to talk about a little bit today Yeah, I I love that. Um, you know, dine wolf, she talks a lot about that concept too That people constantly just are if they have money, they throw it at the problem And they're like, oh good fix that but they're actually making it worse. They just can't see it takes longer for it to catch up Yep So it's the same thing that you're saying I'm like And the fun thing with it if you do it every year because sometimes people are like, well My people are gonna not be comfortable with that. I'm telling them to grow with last year's budget But if you do it every year No, because you know next year it's going to feel like a budget increase Because it's going to be up from the previous year. So they don't need to know that you're basing it off of last year's numbers Right to them is 10% more than the year before Yeah, and and also you're going to modify it So if you're six months into your goal and you're on track to hit that stretch goal There's no reason now you can invest the money. Now, you know, it's actually coming in. Exactly. Yeah So it's not it's not static right, it's But it's real easy in business where people will say, you know, I'm investing into growth Um, and I'm not making margin right now, but honestly you should be growing every year So if you're constantly investing into growth, you're not going to be uh, you're never going to make money So call me crazy, but I want to make sure I make a decent profit every year right it Just pinning where you are like, you know, if you're absolute startup and you left your corporate job And you're starting a main service. You're gonna burn cash for a little bit But don't you know make a habit of it if you're doing that year after year you're doing something wrong right And it seems like you're always investing one or the other you're either investing time or you're investing money Right. It's not like you're just Especially until your business is to a certain level. It's not like you're like, okay I'm not putting in any time and I'm not putting in any money and I'm expecting everything to grow Yeah, it's not really that realistic Well, and once you understand your numbers a lot of times that things that make the biggest difference in our business aren't expensive When you start talking about things like we're losing we're losing too many customers. Let's work on retention How expensive is that? That's just you understanding where your problem is and focusing on it Um, we're we're not closing a high enough percentage of our leads You know, we need to accept that our salesperson sucks and fire them and hire a new person Or train them or come up with a better process Um But the tendency sometimes is to accept that those numbers are given and I've got to spend more money on marketing I've got to get more leads. I've got a and a lot of times the answer is one of those other numbers that aren't that expensive Well, we actually were just working with somebody a couple months ago in one of the groups that kept saying they got to spend more they got to spend more they got to spend more and So we're like, so what's your return on your investment right now? And his answer was I don't know. I'm like, okay, so stop Before you spend any more money. You need to find out what that return is because if you've got a return of 12 12 percent Go spend more money. You're just losing money faster than you're just losing more money So it's not simple, but the data does matter So the data is what matters I like where you where you're going with this though because This is a time of year where we look at the next 12 months coming up, you know, January to december and What's our revenue going to be month to month? And you know, what's our marketing spend and how many people are we going to have to hire? And basically we come up with a budget for for the year Okay, well, that's good. But what do we do with that? Okay, when January comes around February March, do we take that budget and like put it on the shelf and Maybe dust it off next december to see how we did. No, that doesn't make any sense. So Derek speak a little bit What that budget means to us and how we use it as a tool Yeah, I mean we at least once a quarter Go back and look at our numbers of how we're doing versus our goal And we always identify what we call our gap. What were we aiming for? How short are we then we pull our team together and have a discussion about how do we close the gap? How do we get back on track? How do we make this up? Or vice versa if you're killing it and you're hitting the number now you can start saying well, I've got more money than I thought What's working? What can I reinvest in? What can I do? Maybe it is time to hire some office staff Maybe the growth is so much that you're starting to get overwhelmed So I guess the you know business term the accounting term for that is like recasting your your forecast Recasting your budget. So is that like a quarterly exercise? I I typically do it quarterly. Yes, some people do it a little more frequently But I like to do it about once a quarter because months can do this One of the things I'm sure some of you've noticed about our businesses They have more or less work days than previous years. So quarter kind of bounces some of that stuff out And depending upon the state of no the world and the economy and you know the business environment Sometimes you have to do it more frequently. I mean Like the unprecedented global pandemic You got to look at it more frequently then but yeah, absolutely I don't think anybody was looking at their numbers quarterly during you know when when the hard stuff of covid was happening I think people were forcing themselves not to just Look at every single thing every single day With panic in their eyes, right? But then yeah, you got to look at what your real numbers are coming in. What what do your revenue look like? What can you do with your overhead? What do you want to do with expenses? And you know, I think we all had an experience for a while there that our phone was running so much that We were able to basically cut our marketing for a while. Most of us do Yeah So you put your plan together based on the world as you know it at the time that you're doing it But when the world changes you need to change your plan Oh, yeah Yeah I forget the exact military quote saying but it's something like everyone has a plan until the first shots are fired. So, yeah There's another one Get punched in the face. Yeah, my Tyson's quote was yeah, everybody has a plan until they get punched in the face But fortunately most of the time, I mean we just came off a pandemic year And so a lot of us probably feel like plans don't matter very much but honestly Probably 19 times out of 20. This business is pretty predictable We all just had something that was pretty crazy happened But even then it was a heck of a lot easier if you had a plan You knew what your conversion rates were you knew what your budgets were so you could go back and basically say, okay Here was plan a now. We're going to be on to plan b. Let's cut some of these things I think I got to about plan f before things stabilized Well, you know The world has was like prior to covet anyway Everything was fairly constant wages were growing at a low rate You could pretty much I mean hiring has never been easy But you could pretty much predict on being able to to to be able to get the workforce You needed to do the demand that that that you could generate You know g was inflation was like 6.2 percent in october I think uh november's numbers are coming out friday The thinking is you know, it's approaching seven Wages are going up really fast. I know a lot of companies are probably paying 50 percent more today than what they were pre pandemic For for for the same labor. So putting your plan together budgeting I think it's probably a harder now than what it used to be and be a heck of a lot more important, isn't it? Well, yeah, but you got to face those numbers as they are I mean our plan next year has price increases for our customers Much more than it used to we've got plans to increase our spending Our plans look very different next year than they would have three years ago But I think that's important because we're dealing with real facts versus saying gosh, I can't wait till things return to normal Because I'm not sure normals coming back for a while. I do think it will eventually come back But I think you go out of business before it happens So again, and what's normal? I mean gosh, I think that normal is Going to be very different. It's normal. Yeah, normal is not going to be normal compared to normal like 2019 normal The wages are not going to go back down No, they're not going to go back down. I didn't think it's rational stuff will calm down Um, you know, I'm a huge student of history and I feel like our country tends to do the swing of A pendulum and we're definitely swinging one direction right now after being a long time on the conservative late laissez-faire type stuff the reform was done by a democrat It's hard to believe that now but clinton's the one that got a bunch of people off the welfare role and that was accepted And now we're swinging much further to the left. I think that swing is going to happen for a while I don't think that's going to change anytime soon but I think it swings back the other way again again eventually too. It's just it seems like our country's kind of funny We always swing too far one direction or another and then kind of pull back to the center I think that's where your what-if spreadsheet comes in super super handy, too Is because you can sort of play out these different scenarios in your mind So if this happens then what might what might we be looking at? If this other thing happens, what if and and even without having any ideas of what might happen or what might not because for example Who could have ever in february of 2019? Did anybody have a clue that covid was going to You don't devastate the countries the way that it did. There's no way nobody could maybe in this maybe in february some people I think tom by then was yelling Nobody was listening you guys you guys blew me off It's only one time tom. We've only ever done that one time I could probably think it too But really you you don't have to know what's coming I think that's the thing that I really like about Planning and budgeting you don't have to know you just have to put something down and then check it and then You change adjust So I I feel like that just makes it so much easier the people that I know That didn't have any plan at all We're in a much worse Position at least psychologically than the people that had a plan Because the people with a plan even though they were like what the heck my plan is like out out of the water They knew how to work a plan and they knew how to like, okay So what's well? They also came more and back more You know, I was on a call today with somebody who was talking about how they dipped beneath a million dollars in 2020 And how depressing it was to them and this year they hit 1.7 because one thing stabilized It was and they had that plan they could dust off and go, okay. We're ready now Yeah And a lot of times we Think about our plans. We talk about our plans. We think about them in the context of what the revenue is um Moving forward more and more we have an opportunity to generate more profit with less revenue You know the whole idea of of limited, you know labor market and we're supply constrained and You know the whole econ 101 saying, you know when demand outstrips supply, you're not charging enough And I really think that that that's where it's going for a lot of businesses I think they're spending way too much time trying to hire that last Employee that last cleaning professional where they'd be better off Just raising their rates and they could be more profitable and clean fewer homes doing it You know who you should have as a guest and just beating that drum for longer and just about anyone I know as well g Oh my god, 10 years ago wells would be like you have wait list raise prices. Yes That one person if you have one person on a wait list you raise prices. Yeah. Yeah Why do you have wait list raise price? Yeah, he was always He I'm sure he is still doing that too. I haven't talked to him in a while. I need to reach out to him Yeah, I said he was probably one of the people I knew beating that hurt or anything and uh, I had kind of a Learning experience with that out of college. I had an interview with McKinsey And I was all excited being the big consulting firm and got the interview and they gave me this case study About a railroad whose revenue had declined. He wasn't making any money And they gave you the case study and then they want you to solve it into my interview I came up with this great plan on how we were going to sell more railroad and make more money and move more freight And when I was done, they basically said they weren't going to give me the job offer and I was and I thought I nailed this thing and I was like what? And they said do me a favor write the the profit equation on on the whiteboard, you know the profit equation, right? I'm like, well, yeah, you know profit is number of units sold times, you know Sales price minus cost and he's like, okay. Why did you spend all of your time talking about number of units? Why did you not talk about changing price decreasing costs decreasing overhead and I was like Oh Because this is easier And and he said and he said you just did what our clients do they get tunnel vision And try to solve the problem and they need to step back and look at the whole equation And fix all the pieces and and that's why you're not going to work for us because you just made the mistake that our clients do And they said the problem is you've got to take it to the most simple thing Which is how do I make money and look at all of the pieces? Not just get distracted by the one shiny object, which is always somewhere somewhere somewhere. Yeah Good, you know, that's kind of heard that story before that's good. Yeah, it kind of crushed me at the time So you're just sharing it now. You're just I've heard it. No, I've heard it. I've heard it before You just Liz you just weren't paying attention. She wasn't paying attention to me You know how I get you guys But that's why when I put my plan together every month, I tell my people there's three things I always aim for I always try to do one thing to increase sales One thing to make the process or culture better and one thing to decrease costs So every month I'm trying to do those three things and if I accomplish those three things every month Even if they're small tweaks by the end of the year you've come so far So I don't try to do everything every month. I try to do something You know For so many years success in this industry has been defined by how many homes you were cleaning What your revenue was And you know now, you know the whole unprecedented event, you know world pandemic and how that's Change the economy It's just isn't going to hunt the way that it used to It has to be about you know measuring, you know Your expenses managing your costs and and and being more profitable And it's kind of cool because you know, we've got tools in place to do it now and you know I'm not gonna go down the path of of all of that But we've got a lot more tools available to us now back in the day All you really knew was how many homes you were cleaning and how much money you were putting in the bank Well, and look at your lines of business, you know, I see people all the time chasing airbnb revenue Um, but then when I talk to him about profit, they don't make any profit Like I clean $600,000 a year of airbnb isn't I'm like, how much money do you make? I made $50,000 last year. I'm like, oh Oh, that's painful Yeah, and if you look At every customer that you service and kind of stack them up in terms Of the most profitable on one end and the least profitable on the other You'll have some that are negative profit when you throw in even a modest amount for overhead And for those you'd be more you'd have more money in the bank at the end of the month if you weren't even servicing them Mm-hmm Doesn't mean that you necessarily fire them but you need to raise the rate or change the scope of work do something I mean the name of the game now is getting a higher return off of human capital because that's a constraining factor and you're paying more and more for it and You know you need to generate more revenue with with with with less labor You know what that's actually one of the things that I Really have liked about the pandemic if like is the right way to say it But everybody in our industry not everybody but the vast majority of people in our industry Have now widened Their perspective they're now willing to look at things from Other other perspectives and to think bigger think in a different way. It used to be it It didn't really matter. There was like you said Tom There was one question that people asked one question that people answered and that was it And really the only goal out there was get to a million dollars You guys remember that that was the that was like the mean all and all that was success Yeah, nobody was nobody's even talking about profit. Nobody even How many of those companies you guys we know how many of those companies that we'd be sitting at a million dollars And they could be making more money if they were working for somebody else working just 40 hours a week making They had a job and not even a very good job A job with a boss that was really kind of hard on them Standing at the drive-through asking if they'd like to supersize that or throw in a hot apple pie Yeah Yeah, so I do you guys do have to admit that that is one good outcome I'll tell something good because it's got the customers. I'm a little more used to it too I mean I did a price increase this year that terrified me because it was so large And the general feedback from our customers was we getting you got to pay your people more as long as your people are getting paid more Um, and it was the strangest price increase letter I ever did because it basically said So our service has sucked for the last three months and we've had to skip you a lot I'm going to raise your price even though our service sucks because normally I would never want to raise your price unless I was sure we'd been doing a great job But I wrote a letter that basically said I'm acknowledging that our service hasn't been very good We've had to skip you a lot recently. We've had to skip you a lot because people I don't know but We've got a theme park in our city called kings island um, basically, you know like the local disneyland and they were paying $19 an hour starting wage to work in the food court um And and I mean my letter even referenced it I'm like kings island is paying $19 an hour to hang out at the theme park and sell food to get people to clean houses I have to pay them well above that right now. Therefore. I have to raise your rates. I'm sorry And I think I only lost like two customers. There was a 15 increase I mean in the past I'd be I'd do 3 increases and like please don't fire me over my 3 increase But this year we did a 15 increase and the overwhelming feedback was I completely understand your people that need to get paid more. You know, I hope so and so stays. We love her I really love that strategy of adding in the kings island piece You know, everybody knows I know about kings island over here on the west coast So people know about it. They hear that number. It's like wow Yeah, that's where high school kids go to work over the summer and they're making 29 They're making 19 dollars an hour. It's crazy. Yeah I think I made 275 when I worked in the summer And I know like You know one one of the other changes that you've you I've seen a lot and part of this was COVID and social distancing where more companies went to smaller teams and and In solos But when you're paying these higher and higher hourly wages, you really are getting More efficiency and and getting more revenue per clock hour By having somebody wake up in the morning pick up their phone Hop in their own car drive to their first house drive to their second house and then go home and I you know I'm doing solos I know a lot of other people are doing solos that used to have more of a capital intensive model With company cars and whatnot. It's kind of funny because I know like debbie sardones promoted, you know that model You know the solo model for for many many years and a number of us Derek, you and I had discussions about can you really Scale, you know a solo business model and I think that you can especially in in 2021 2022 but It wasn't just the pandemic either because the other thing is the willingness of people to accept it Used to be it was a lot more challenging to get people to drive their own cars But I find my number one competitor from my employees is door dash Yeah, they're like more money cleaning houses for you or delivering food both on my own car both with my own gas Yeah, good point. I I had forgotten that that happened at exactly the same time where people got Used to using their own car Right. They were doing task rabbit door dash. I mean all those services. There's there's a ton of them uber You know, they all are basically i'm going to drive around in fact, what'll be really interesting is When uber takes their self-driving car and rolls it out and how many people that's going to displace Yeah, that's All of these big changes like this mean I'll have lots of little ripple effects that you don't even notice until later you know this That actually right there is a perfect example of That's not something that we anticipated happening at all And you know the robotic taco maker where that hits the market. What's that going to do? Don't get tim started there tom. He's ready Hey guys, do you see over here on the comments rock sand ramsey says Something she says vlog fyi anybody idea what that is Yeah, hey linda Hey rocks and I have no idea what vog is the only vog i've ever heard of is weather related And I don't think that's what you were talking about. So maybe fill us in weather related Vogue volcanic fog Oh Okay. Yeah, that's that's the only thing I I know about you think Yeah Washington state say Is that a little volcanic? Yeah So I don't think that's what she was talking about. We were talking about when she popped that up I think we're talking about bitcoin. So not exactly sure What that is? Hey linda. Good to see you So you guys have any questions? about how you go about Getting a budget in place How you go about planning? What are some of the areas that you want to plan around? I think that's another Important thing to talk about a lot of times people think that they're only planning like revenue Or they're only planning marketing. So you hear a lot about, you know, I'm setting up my marketing calendar I'm setting up my my revenue calendar What you know, what my goals are but you don't hear a lot about other Things that people are planning. How do you do that? Very? I mean, like I said, I I always try to look at a couple different things When it comes to the numbers, I look at office staff year round Because I've gotten a lot more involved in the window cleaning business recently So I've got to figure out how to staff up every spring and lay off every fall and my office staff that goes with it All the recruiting that goes with that But even in the home cleaning space, we've got a lot of surges that come With it where we got to have more people on the phone or less people on the phone You know, we we try to plan for our own personal development. What am I going to try to get accomplished? Um, we're what am I going to try to get better at as a leader? What work process am I going to try to fix? How am I going to make the culture stronger? So I said every month I try to do one thing either for the culture or Business process that could be tweaked something to save money and something to increase sales And I try to look at those three buckets just because it forces me to It forces me to go. It's not all about the sales dude. Let's think about some other stuff And honestly, sometimes it's small It can be as simple as going. Why are we still paying for adobe acrobat every month? You realize that's 30 bucks, but you're like, hey, that's $360 a year if I do that every month I've got five grand in my pocket And sometimes it's a much bigger savings like switching software platforms and trying to figure out how to reduce a role in my office And you know, I remember when you did that with Maria when she was before she was So Sharon now says Okay, Sharon and Roxanne, we have no idea what VOA maybe you guys do do you guys know what VOA is? No, you don't know what VOA is and we don't know what VOG is. I like the fyi But it's not fyi ing us So give us a little bit more info But I remember you did that with Maria Derek this was before she was going to sell her business And you sat down with her and you guys just went through her p&l And looked through looked at all her different percentages and you were like, nah your expenses are a little out of whack Let's just start looking at stuff and you just started eliminating little tiny things And I remember at the end of like three months. She was like, oh my gosh. I'm so much more profitable now And I don't really even miss any of the stuff that Derek got rid of so yeah, and I mean it's interesting because Once again, there's always somebody that'll sell you something and there's a lot of good services out there So I don't want to knock them all but there's getting to be this mindset A little bit in our industry where I'm seeing everyone want to outsource everything Um and god that gets expensive you know When you pay your payroll company when you pay your bookkeeping company when you pay your recruiting company when you pay, you know all all of a sudden There's not a lot that you that you're not paying a monthly fee for anymore Do you think it's just trying to some desire to outsource yourself out of a job Don't get me wrong. It can make sense in certain instances. Um, but I see people doing it too much in my opinion It's hard to run a business when all you're doing is managing vendors. What what makes you special? so You know, if somebody else is answering your phone managing your finances, you know, what what's left. What are you doing? So I think a part of that too falls into that keeping up with the jones's mentality that goes on in our industry everybody talks to everybody about everything which is awesome But every time we hear an idea we're like, oh, that'd be a great idea for my business if they're doing it I should do that too You can't do everything that everybody else is doing you got to design your own For a lot of people it's the right thing if you're terrible at bookkeeping by all goodness go hire a bookkeeping service But i'm seeing people like I said and it's a lot of little things They'll subscribe to this $15 a month software and that $30 a month software in this recruiting platform and this recruiting software And they just have all these layers. I'm like, how are you making any money? You know, you've got to be careful with how that all adds up Especially those monthly fees because they convince themselves. Oh, it's only a hundred dollars a month. Oh, it's only 200 a month But man, does that stuff add up? Yeah And you know, there's some things that you have to do just because you have to do I guess you have to pay your taxes for instance, but Most of the expenses that we have in our business are certainly You know, we've got control over To the magnitude of what they would be and a lot of choices We just it's just like discretionary spending, you know, we could invest in this new shiny object or no The litmus test needs to be, you know, if I spend this money on this product service, whatever it is Am I going to have more money and into the bank? How is this going to right at the end of the month? Is it how's this going to make me more profitable? Yep And you do Just I got to clarify that a little bit though You might have to look at a time frame. So yeah, you might not have more money in the bank this month But sure, you know, are you going to have more money in the bank? In a reasonable amount of time not in five years, right? Don't invest in something today that you're going to have more money in five years Three months from now six months from an hour a year from If it's the thing that's giving you a real competitive advantage by all means spend on it, but I don't know. I'd have to think of examples. I do love that too. I do love that too Right. If this is the thing that's going to give you the leverage and really have you take off Um, but when I look at because I do look at a lot of people's P&L's I'm seeing they're paying for this chatbot software. They're paying for this software They're paying for that software like you said, it's almost like every time someone mentioned something they subscribe to it and I'm like guys, you know They're are you really using it? Are you really leveraging it? Are you getting what you need out of it? So Out of money out of it, right And what you're you're describing when it's like a real competitive advantage Sometimes you have to look at it from what's the counter argument if I stop doing it What happens to my business? Do I lose market share? Do I lose employees as my revenue drop? And you know, that's a valid reason for making the investment as well if it's just you know, keeping, you know, you where you are Yeah, I agree Yeah, you can't just cut out everything. You can't be like, okay, that's it. I'm not buying vacuum cleaners anymore I'm not buying, you know product And once again, I'm not pushing on everything but my big thing recently is I've been challenging people a lot of Do they really need to buy a microsoft license? They're like, oh, we use google drive. Well, I'm like, then why are you paying for microsoft? Why aren't you just using google's tools if everything's in google drive? You know, that that's stupid things 150 a year per person in your office It's almost happen for I don't know what it is. No, my word in excel and all that type of stuff. Oh, okay Honestly, we're almost 100 on google sheets and google docs now Yeah, it's a good point because we use google drive for everything. That's where all of our shared documents are kept That's where all our communication is done. So why are we paying for microsoft licenses? We don't need them So that's the stuff that like I said, if it's core, you know, if you're an online company You get lots of leads off of your chatbot. Great. If you have a chatbot on your website because it's pretty Um, and somebody else has it and how my question is how many leads are you actually getting from? Yeah, I I think that bottom line question of am I going to have more money in the bank with this Great, if I'm not Why do you have it? Well, a lot of the software companies are really good at nickel and diamond you where you're like Oh, and I paid for the forms upgrade and I paid for this upgrade and I paid for that upgrade And I've got advanced mapping and I'm like, do you use any of that? You know, because a lot of them don't use it Yeah And you know this kind of ties back to where we started the discussion with the whole annual planning process We you know, we talk about budgets and in planning But there's a planning part of that where it's you know identifying what objectives are and what your strategic goals are and Make sure that you're putting your time and treasure in the things that are in alignment with your strategic goals Rather than the things that just kind of pop up. It look cool That's one of the that's one of the risks of running your own business because there's no Oftentimes, there's no accountability. You're kind of Well, it also changes. I mean five or six years ago the chat bot on our website actually I mean the chat feature on our website drove a lot of business We used to do a lot of business on chat It's almost irrelevant now almost no one uses it. I think consumers have really burned out on I think it's because of all Those stupid chat bots where people caught on they weren't talking to any humans that people don't want to use the chat feature anymore But there was a time I guess around five years ago when I was working with blue skies I'd have three and four chats going with customers all over the country bidding for jobs Now I'm lucky if I do two or three chats a month I remember there are articles written that you know email was was was dying and You know all all you know transactions were going to be happening through chat bots That never really happened did it Now I think the chat bot killed chat like I said it used to be great on my website But I wonder you guys I wonder if there's going to be some tweak to it That's going to bring it back just like with the qr code The reticence of the chat bot Yep You know, yeah, you know, we all thought qr codes were dead. That's true. That was a joke for a long time instead Yeah, that there was no way they were ever coming back So and usually they come back with a twist In some new way that makes them like oh, that's all that was needed there and the chat bots are flawed But I feel like they could potentially There's something there because people you don't want that speed that you can get from no I mean, that's why chat used to be a big deal to us people be at work And they wouldn't have to be on their cell phone being heard You know talking to a cleaning company to look like where they were working when all they were doing was booking a cleaning Yeah, yeah But they got frustrated when things when when they stopped behaving like humans and stopped using it I see tom pulling some stuff up in the background you guys You know, what what you're describing is is been well documented this whole adoption curve where Some new technology comes out and there's a ton of excitement and you know, but then it just You know the technology is there, but we don't know how to deploy it We don't really don't know what to do with it And then it kind of drops and then people kind of figure out how to put it to work and I kind of laugh because we did Disruptive innovation summit at a convention an ARC as I convention or Orlando Was that 2015 maybe Does that sound right? Is that all I'm thinking more like 13 or 14, but maybe that's right Yeah, and it was like a one-day event and you know, we were talking about home joy and kind of did a You know breakdown of of their strategy and handy and we thought the virtual maid service was going to drastically change, you know, how we do business and You know home joy, you know, they went out of business and handy's around I guess, but they're really more about you know Being part of Angie's and that whole thing now We're still standing but a lot of the technology is that we talked about in terms of like the online booking and you know the automation tools and You know all the tools that were enabling this set the high expectation We're starting to see those becoming more and more relevant And in in the workplace inside of our businesses So I think we were right back then we were just here on the curve and not starting to happen It's same with qr codes and maybe Chat on the website is down here somewhere, but I agree with you. Liz. I don't think that we've seen the last of it No, I don't think so. I'm just saying you got to be careful because We're five years ago that buying the super high-end chat cycle might have made sense. It doesn't pay off right now So that's your point though your point is that you've got to keep evaluating it Go in check it out. That's the whole point of annual planning is check all of that stuff What do you need to change what needs to what can you get rid of what what can you add what? We were talking about when your plans, but I do think it's important to kind of keep an eye on what's coming longer term um, and you know dating myself again, but I lived in california 1996 through 1999 the first dot combo And I remember when the bubble happened and everyone's like see that whole internet thing was over hyped and retail's not going away. Yeah Same thing Yeah We said it was coming too quickly, but it still came It just took about 10 more years than the 20 year olds that thought it was going to be back in 96 Yeah, yeah, and we have the same thing coming with independent contractors No, they're like we we've got the same thing that's going to happen there that laws are going to have to change things are going to happen, but I personally think there's going to be a swing against independent contractors pretty soon I think that there's been a long swing against it for a long time And then because it's been so hard to do it, but I think that we're going to get a harder push for I don't know. I think we'll see I I have a feeling that there's a strong push to the left coming Right now, and I think the whole independent contractor model is going to be under a lot of pressure in that world Or maybe something version of it's going to pop out Because it's always a new version right because people like the freedom and stuff of it But it's not going to be what it used to be people are going to want their insurance are going to want their days off their benefits agreed agreed so I think this whole let's have independent contractors so we don't need to pay them anything has gone away Yeah, I agree with you. I don't think that's coming back. No I think if nothing else there were a lot of unemployment claims a lot of a lot of unemployment money was going out to I see is that Employers never contributed to I don't think they're going to let that happen again I think that there was a lot of There was a lot of light Shined on the independent contractors During co-ed people were looking at it completely different You know people that were expecting to get their ppp money and there was just a lot of stuff happening around that Let's see. What's robin saying here? He wants to know if we factor employee retention in our revenue estimates I mean I build employee retention in my annual plan because that's important for me as far as knowing my staffing planning How much I'm going to spend on bud on sales and training and everything that goes with it Employee retention matters As far as sales, but I don't think it's the number one driver I if your training's good the employees aren't I wouldn't say interchangeable But that whole idea that there's only one person they let in their house should be going away Yeah But employee retention makes it so you have predictable labor forces Don't have to skip customers have short term availability So staffing is definitely part of my plan and retention is part of my staffing plan if that makes sense Yeah, absolutely higher turnover means I've got to train more. I've got to recruit more. I've got to Have more people in the pipeline. I've got to see more More more everything goes out And you see that in your budget and your actual p&l it drives your cost up I mean it brings your revenue down. I mean it it has a negative impact in many ways And then you and then I mean this is an example We're sometimes spending more money at least more money per person per Trainee can actually save you money So, I mean, that's kind of the tricky part about this. You don't want to spend money That's not going to get you a return on investment. But sometimes The idea of I'm going to do the lowest cost whenever I can A lot of times that drives you to a position where you're you're not being profitable either You got to spend more you got it, you know, sometimes I think we've seen this you spend more on training you actually reduce your aggregate training cost Yeah, absolutely So it's not always the case that you got to spend money to make money but many times there is an investment to to making Don't get me wrong. I I'm famously cheap and I'm always looking at what what I can cut But you never want to cut the important stuff You just know I always want to have a critical eye towards it and ask the question of is this paying for itself Yeah, absolutely at least at least paying for itself And if you're getting a handsome return on investment, it's like can I buy more of it? You know, if you got an advertising channel, that's that's killing it It's like, well, gee if I increase my spend could I just get that much more benefit and sometimes that makes sense And I know a lot of people really hesitant to spend on recruiting when they should have and probably should have cut their marketing budgets and move some money around and Which is kind of the rates and not recruit as much. I mean, there's a lot of ways you can attack it But it's why you need to be looking at it on a regular basis. That's why you need to have the numbers. Absolutely We are like Right at the top of the hour Derek I have an appointment at 3 15. So I got a check exactly at 3 y'all So what what do you have going on in your world, Derek? Is there anything going on out there that you'd like to share with uh with our audience? Um, well, I am actually doing something which is completely not related to the topic. We're talking today But next Thursday, I'm doing a two-hour class on google three pack And uh, how to how to rank on that google three pack listing And I'll shoot over to you tom because I can't put it into the comments That could be part of your marketing plan and marketing plan would have to be budgeted So well, there's research now that says up to 70 percent of your website traffic comes through that google three pack But people spend on search engine optimization They spend on paper click But they don't understand how that three pack works and there's some real interesting tricks and things that Have come out the last couple of years. I think Some of it's come from some certain some uh, seo companies. We've worked with some's come with some questions So i'm looking forward to uh teaching it should be fun Come dropping the link in the chat. This is the site. So if you want more information I want to sign up. I guess just go to uh this particular URL here Yep, and we're teaching it next thursday. It's uh, I believe it's $39 last I saw we do coupon codes from time to time But it's just next week and it should be a fun quick little class And honestly for 39 bucks. It doesn't take very much one customer more than base for itself If you pick up one little trick on there one thing you didn't know about and uh, and what an impact Right and it there's all sorts of things people don't know. Um, they were going to be getting into And as we discussed earlier having you know part of your plan for the year It used to be how are you going to invest in yourself and you know, you've got to You know and keep improving yourself as the CEO and leader of your business And this seems like a really good opportunity at uh at a bargain price point Yeah, you can't beat that price if you're going to be spending money. Here's a good place to spend it All right Derek, thanks so much I will see you guys later Derek. Yep. Awesome. Thanks so much for your help. We'll uh We'll be back monday five o'clock eastern. Take care. Bye. Bye