Dashboard: The Three Reports Every Business Owner Needs

[Music] welcome to another 21 hats dashboard brought to you by our sponsor the great game of business I'm Lauren Feldman and I'm here with Gene marks to talk about the things we think business owners should be following this week welcome Jean wait wait wait a second your sponsor tell us a little bit about the great game of business uh the great game of business Jean is a terrific organization based in Springfield Missouri they help uh businesses with open book management and with employee ownership they have coaches um and they've got kind of a a really strong cult-like following I love it well congratulations on bringing them on as a sponsor for our segment I think that's fantastic well thank you thank you I appreciate that they sound like a wonderful organization do they have a website perhaps they do what would that me uh great game.com great game.com I will check them out for sure thank you they have an annual event every September where people who practice open book management from around the world have been coming for years I've probably gone I've lost track but over the last 10 12 years I've probably been to six or seven of them and they just attract a really great group of entrepreneurs and business owners that's awesome yeah I will check out their website that is great please do excellent to have them involved all right so um welcome moving along as usual you've been writing and talking about stuff that matters to business owners I want to start with a piece you wrote for entrepreneur about three reports you say business owners should run if they want to run their business better what are those reports well there obviously there are a lot of reports that any uh business can run you know if they want to do their thing but you know I we're busy people right so I just wanted to make sure I limited it to just three so let me tell you what three reports I strongly recommend that you run in your business uh to to Really stay on top of it okay number one is The Flash wait before you do that you pointed out in your piece and I think it's worth noting that this is beyond your monthly financial statements which you consider something of a postmortem that comes later and it doesn't really help keep you on top of what's happening right now correct don't don't want to like you know all over the monthly financial statement you know they're important by the time they come out it's like stale news it's good to look back at your monthly financials or even quarterly so you can see you know Trends or margins that you're you know issues or expenses that might be higher than last year or budget or whatever it's all good but I'm talking about day-to-day like proactive numbers like numbers you need to have at the tip of your fingers as you're running your business on a on a daily or a weekly basis you know got it so one of them is called The Flash report the second report is called the pipeline report and the third report is called the Rolling Cash forecast report and I'll just just very quickly we'll summarize a flash report is something that you as a business own by the way I'm only telling you this because this is what like my best clients do you know this isn't like I didn't create this out of thin air so this is what they've taught me um a flash report is specific data about your business that you should have somebody compile for you either on a daily or a weekly basis what is my cash today what is my receivables what is my payables what is my year-to-date sales what is my backlog what are my open orders th those are some of the common things that show up on a flash report um and and you want to make sure it's also benchmarking against some prior period you know so if you're looking at cash today you should also have on your flashship what was my cash say at the end of the year you know am I am I up or am I down um these are you an admin can compile this um off of your different systems and that way you just you have a pulse on some of the key numbers in your business on a daily or weekly basis okay which obviously will vary to some extent by industry by specific business that is correct and it shouldn't be hard to compile it shouldn't be they should be just the basic you know you know organic numbers that you're using to run your business so that's number one the pipeline report usually comes from your CRM system your customer relationship management system and is basically all of your pending deals your pending sales it might it will include any quotes or proposals you have out there but it will also include different types of pending opportunities before they even become an official quote or a proposal and there on that pipeline report should be the amount of it who's working on it what was the last thing they did what's the next thing they got going on and what the probability is of that actually turning into a sale and if you're managing your pipeline really well and you're on top of it you really should be able to look out you know 60 to 90 days and know what sales you have expecting to come in which brings me to my last report which is the rolling forecast C report or the cash the Rolling Cash forecast report and that is where you know Lauren every month you project out what your cash is going to be 90 days from now and the way you do that is you take your pipeline sales from your pipeline report as well as maybe anything that's become a sale but hasn't actually been invoiced yet so you you get your arms around that you multiply it times a uh you know a an estimated margin and you figure out what your overhead going to be which isn't too tough over the next 90 days this is not a hard report to do the forecast report I'm only asking for 90 days but I swear to God Lauren my smartest clients once they get in the groove of doing that once a month they they know in the future they they're looking ahead 90 days and and pro you know projecting what their cash will be uh which includes any you know unusual extraordinary items like maybe estimated taxes or some big supplier payments at least they know what the future is because my best clients are always looking ahead you know so those are the three big reports I recommend to run your business none of this seems like rocket science uh the way you describe it um and and my guess would be that probably most business owners have some handle on this they may not call it what you call it they nope no no they just don't I mean I I my best clients do but I can't tell you how many you know clients and companies and I have that they don't get numbers key numbers about if I ask them like what's your what are your receivables today or what's your cash they're like they're not even really sure what it is uh if I ask them what their pipeline of sales are they're not really sure what that is um and if I say okay well what's your cash going to be 90 days from now uh you know most of my most of the business owners I talk to can't really tell me that and it's not that hard to do that's really not and it it'll change your life if you have those three reports in your business if you really commit to running those reports it will make a huge difference now you're running your business I'm a little bit surprised I mean I like I said I it's not like I thought everybody was doing this exactly the way you describe it and calling it the name that you call it but I mean you I think most business owners know they have to know how much cash they have today uh and how much they might need next week uh or next payroll no you're a business owner right do you know what your cash is going to be 90 days from now I do zero you in the club that makes the calculation a lot easier um no I I know what you mean but you know I'm not a good example I'm I'm just getting started and you know my business is somewhat limited but but but you know what I watch it carefully and I you know I mean I do have a I have sponsors and I have uh other Revenue at this point and I know what it's going to be and I you know I I don't call it a flash report and I don't have you know lots of things to look at but I got a feel for where I'm going to be know that I can pay my bills next month okay that's good how about in 90 days how about in three months from now well I probably should do a little bit you should it's it it's a good practice to start getting into and then as you grow um your Empire Lauren you will be in that discipline to know um you know the future and the future is all in forecasting sales and forecasting cash that's how that's how people run businesses that know what they're doing and you mentioned that you know this because you're your best clients but you're also a CPA yeah you've probably been doing this for a long time have and I um I do it myself but I I you know bang my head against the wall to try and get my clients doing it as well um I'd say the biggest uh problem that a lot of businesses have is the forecast they hear forecast and they think like they should be you looking ahead three years from now you know what I mean or uh they over complicate things or they think it has to be too specific um it's really not hard to forecast what your overhead is going to be over 90 days it's not hard to come up with estimated margin for your services and products and the hard thing is coming up with what you think your actual sales are going to be over the next three months but that's actually not as hard as you think if you do a little bit of due diligence well especially if if the way you described it in your piece if you I mean if you have a CRM and you can categorize your clients uh and your opportunities as being hot warm or cold yep that should give you a pretty good sense of where you're going to be it's a start by the way but remember that there are also some numbers outside of your CRM I mean they're you know maybe you have closed deals that aren't in your CRM anymore but they still haven't been sold yet you know they're like in process or uh maybe you're the type of business that you get a deal and you know and then it just it turns into a sale a week later do you know what I mean so you have to take that all those into consideration but you've got a lot of sources you've got prior periods you've got your sales people to talk to um you've got uh your open order book so it it it takes it takes a bit to figure out what your sales are going to be over the next 90 days because you have to get that from a few different sources but once you get a process down it's not as tough as you think and then suddenly once a month you're able to take a step back and say all right I've got this much cash in the bank now 90 days from now I'm projected to have that much cash which is good or bad and I need to make some decisions around where that's going all right next topic you wrote a piece for the Philadelphia inquire in which among other things you wrote about how a lot of business owners don't realize that they have more options in terms of buying energy than they might realize tell us about that yeah um so energy costs have gone up a lot over the past couple of years you know like we we just highlighted a story in the morning report last week about restaurants in Southern California whose gas bills have gone absolutely crazy uh there was one example of somebody who I think paid $800 for gas a couple months ago and just got a bill for $8,000 for for February it's crazy and it's not just gas it's it's electric as well and um you know I looked into the governments the Bureau of Labor Statistics publishes all their uh numbers that go into the producer price index um and you can find all this on the St Louis federal reserves website it's an amazing resource of data and I went back and like although energy price people like to look back year overy year um the past year energy increases have like plateaued but I went back two years you know to like January of 2021 and you know Energy prices whether it's utilities or gas whatever have increased anywhere from 50 to 75% during that two-year period I mean it's right just like you're reporting so it's a big deal I mean talk about trying to project your overhead so you know I dug into this for the inquire for the Philly inquire and I was like all right well what do we do to control this stuff and you know there's more options than I think a lot of businesses really realize so so let me tell you what those options are first of all you absolutely should get an audit done of your facility if you call up your local energy provider in Philly it's Pico uh New York is ConEd you know wherever you're getting your power from you should they will for free because they're mandated to do it they will for free send somebody out to your place of business who will walk around and give you an energy audit and tell you you know you need insulation here you need to you know fix that you need to repair that that will give you a good idea from efficiency standpoint that's easy okay number two you should certainly talk to your accountant about the inflation reduction act because they're really are some incentives for businesses for buying electric vehicles and certain businesses and certain industries um for environmentally friendly products where they can get some good tax rebat so that's all good but there's two big things that I wrote about uh part of as part of this article number one is if you live in a deregulated State and many states are deregulated and I got to Google find out what percentage of states in this country are deregulated I live in Philly so like Pennsylvania New Jersey and Delaware are deregulated states which means you can buy your power from anywhere even if Pico is my Energy company you know my utility company they just deliver the power from wherever I buy it from so my advice to you if you live in a deregulated State Google to find out if you do use a utility broker or consultant they're all over the place and if you go to a broker and say hey I run a small business and here um what are my options for buying energy they will find for you lower cost energy providers because there are people out there that are buying energy whatever the hell that means they're buying energy and some of them are making Debs you know they buy it at different times or for different amounts they get it cheaper and they pass those costs on to their customers a good broker will find that for you and arrange for you to buy your power from somewhere else so that's that's number one and then the second big thing that I learned when I wrote this piece is uh something called a demand response program which is a federal program and all the states participate and if you're of a certain siiz company you should talk to your energy broker or to your utility company about a demand response program and what that means is that you put in a generator in your business and the generator in many cases can be paid for by your util company and the generator runs on natural gas or or something relatively cheaper than what you you know electricity is right now it depends on where you are but what it runs separately the utility companies are asking their customers to go off the grid at different High Times of usage like during the summer or whatever they'll say to you tomorrow we're going to have a high rate of usage can you please switch to your generator and when your business switches to the generator or you have advanced notice to do this you get these like big credits from your utility company for your utility costs so it's called a demand response program you know you know some businesses may not be eligible depending on their size or location but it's something you need to look into it could save you a lot of money yeah I was going to ask the size thing is interesting I mean how big a business do you have to be for these steps to be worthwhile really does depend um I will tell you that you know the I spoke to a couple of companies each of them had more than a hundred employees um now you know I mean again you know I cover small and midsize businesses so you know if you've got if you're listening to this and you've got a 100 employees or uh you know 200 employees um you're you're very much so can be eligible for this if you've got 10 employees it may not make sense for you to do it but that you got to talk to your broker or talk to your power company to see if it makes sense for you hey what size you have to be to for it to be worthwhile talking to a broker or consultant about getting your any sides any sides any size so I don't care if you're a retail store or you're a restaurant if you're in a deregulated area um you might be able to buy your power cheaper than what you're getting it for right now how about a virtual business like yours it depends if you're working from home I mean it it's a different situation with me because everybody's working from their homes they have their own utility bills so it's not as big of an issue um and not really worth the time but you know what I found you know laoren is like utilities are like you know Health Care you know like there are ways to save on healthare if you really do the work to figure out other Alternatives you know instead of just paying for Blue Cross and it's that's the easiest way out you know what I mean yeah and it's the same thing with utilities like it's so easy just to sign up with your utility company and pay their bill uh but you know the reality is is that you have other options if you if you want to spend some time and before like when utility costs weren't that much I guess it's just you have other things on your list to do but they become so much more expensive it's now time to pay some attention to it all right last topic uh last week you wrote a piece for Forbes asking whether businesses should hire a CRM consultant to help them Implement their CRM systems now you happen to be a CRM consultant yeah and you came to a stunning conclusion tell us what that conclusion was it depends maybe that's not what you concluded I mean no what did I conclude I think I concluded it depends it's up to you you concluded that it's a good idea to hire a CRM consultant oh oh oh oh I say yeah well first of all I start out by saying it it it does depend um but oh look at Lauren taking a swipe it's a let me tell you why I think it is a good idea even though you don't have to pay as much as you think you have to I and you're right by the way by the way if you're listening to this that this is my business I'm a CRM consultant right so take this with a grain of salt but if you're gonna Implement a CRM a customer relationship management system in your business Salesforce Zoho Nimble and sightly sugar HubSpot whatever the case is right um I can tell you right now none of these systems are that complicated and I write about this in Forbes I mean you're not C no one's curing cancer here okay you can learn it um you can go to classes you can watch videos you could read the materials you can Implement your own system there's two reasons why I recommend using a consultant number one is the Consultants this is what they do for a living so you do what you do and they do they do you know so I use the example of like I don't mow you know I in the past when I had a house I didn't mow my own lawn because I'm a lazy piece of and I would rather nap not do that so I pay somebody to do it for me you know um it's the same thing with CRM I mean like if that's not your thing you pay somebody to to do it because that's what they do and so that might be worthwhile at the very least though the very least even if you're just getting a small business CRM system and you're only paying out 100 bucks a month for it or whatever I still think it's valuable to spend a grand with a consultant that is expert in that system just to just to give you some advice on how to set it up what to do to point you in the right direction you know well that was the question I was going to ask uh is a grand a good typical estimate yeah I mean we charge 175 bucks an hour I think that's in the mid-range people charge a little bit less people in other areas charge a little bit more so you know if you if you spent you know if you if you bought a block at time from us or for four or five hours um you know that way we could spend a little bit of time with you and say okay if you're going to get this system make sure you do this this and this make sure you have these reports make sure you've configured it this way and then hopefully there's a little bit of time left over in case you're spinning wheels you can call us back up and you know I have a question about this and we can answer it and then you run with the ball on your own do you know so that's you know even if you're a very small business I think it's worthwhile having an expert just that has your back and can point you in the right direction that was the point of the column did that not get through no it it absolutely got through you know i' just like to give you a hard time you do you know I have to say I mean I I like to mow my lawn so I do that but I think the argument you make makes perfect sense I mean I I have a podcast I could learn how to you know take care of the audio myself you a producer and produce this yeah I could do that but I don't think it's the best use of my time and I don't and I pay someone to it and I think it makes even more sense with uh a CRM and apart from what I've learned from you which is that most businesses use a tiny percentage of the capability of their CRM right you know the the odds are you're going to pick up something from somebody who does this every day yeah there's no question you know and at least I can point we have some clients that are fully DIY you know and good for them I mean they they know what they're doing they're willing to spend the time you know they're going to do it on their own I think that's great um but I I I do try to make my P pitch to say Hey listen buy a few I'm not going to retire on this just buy a few hours of your time so that way you're not you know calling me back six months from now because you've painted yourself into a corner with your CRM you know what I mean and at least that way we can give you some advice and then go and do your thing you know what what prompted you to write this have you been running into more DIY uh situations no you know it's a that's a really good question so I write this column every other week for Forbes called onc I think I started it when you were there yeah so you the gist was to write about news and the CR industry and honestly sometimes it's like a slow news week so much news about CRM and I want to stay on track and I'm like all right well then you know screw it I'm gonna write a piece like this I actually am going to do a few more of that related pieces um in the future of like how much should you pay for a consultant and what should you get out of using a consultant you know I mean I because I people do ask me these questions all the time I'm like I might as well put it on Forbes so it's out there you know to get everybody's using a CRM I think these are important questions people do wonder about it yeah so I mean I you know it's not I'm you know I'm not going to lead the number of uh you know page views on Forbes when I write one of these things but I do think it's you know it's useful information for people that are considering getting a you know a CRM and there are plenty of people doing that definitely anything you're working on that we should look for in the coming the coming week yes I'll tell you what I'm working on right now first of all I'm going to wrate for the inquir this week on um um some some tax changes that are going to cost small businesses that we need to be aware of like research and develop there been some Chang in research and development expenses that and depreciation that you people need to know now uh so they can make their plans I'm going to do that for the guardian I'm GNA write about the four-day work week we know the guardian right I mean they Lean Like to the left of Carl Marx but I actually don't think well they're also uh they came out of the UK where the 4-day work week has been uh a big deal of late it it has been so that's going to be my start but the uh you know but but this is the US you know side of the Guardian so um I'm G to take a US slant on it and spoiler alert it ain't gonna fly well you said positive things about it in the past did you think it's something that smaller businesses could use as a recruiting tool yeah uh please just just just let's talk about this next week because okay I mean I am GNA you know it ain't going to fly in the US but I do think business owners are shooting themselves in the foot if they don't consider doing it they can still do it and make it work for their business and I am going to write about that and then um you I've got a lot of I got I got something GNA write for the hill I've got a couple of ideas in my mind and then uh for the Chicago Daily Herald who wait who's that what you one of the oldest newspapers times the the Triune times not the Sun Times The Daily Herald but um I did interview a few um local Bankers in the Chicago area about getting an SBA loan and I um want to share some of the advice and interesting yeah be good all right well I will look forward to that conversation Gene marks is a CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times the Chicago Daily Herold Forbes an entrepreneur you can also hear him on ABC radio's ey on the world with John Bachelor Jee hosts two small business podcasts with paychecks Corporation and the Harford this episode was brought to you by the great game of business Jean as always this was a pleasure thank you thank you and thanks to the great game of business this a lot of fun Lauren we will talk to you next week sounds great take care