I’m a Freak About the Numbers

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Jay goz Diana Lee and Dana White talk about how they manage their financials what reports they get what kpis they track and how they make sure the sales team isn't going rogue we also learn of a new Wrinkle In Dana's growth plan she's concluded that along with rolling out franchises and installing hair salons on military bases from Texas to Germany to ok AWA she also needs to create her own software platform to manage her salons cha-ching responds Jay plus Diana explains how the new digital marketing privacy rules hamstring small businesses and what they can do about it even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which highlights the most important news of the day for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews and please stick around at the end of the podcast for Steve K's marketing minute joining me this week on the podcast are regular Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home Diana Lee who is CEO of constellation agency a new york-based digital marketing firm and Dana white who is CEO of paraly boy a chain of hair salons based in Detroit the episode is titled I'm a freak about the numbers welcome Jade Diana and Dana it's great to have you here let's start by catching up a little bit uh especially with you Dana we haven't seen you a little while and you've had a lot going on I know where do things stand um I I have been busy and I crossed over to what I had previously considered the dark side and um got an assistant I thought you know w Wait wait why why was that the dark side you know it just implied a level of elitism now mind you this is not the first time I've had an assistant you know when I was in my you know career I had an assistant that I shared this is the first time that in in my business world that I have um Enlisted the help of an assistant and I should have done it a lot sooner because it has just helped me out tremendously in the short time that we've been working together did you hire a virtual or remote assistant or somebody who's working uh right there with you I hired a virtual um so we're going to start virtually um and then I might transition to somebody else who's local she's not local um she's basically in charge of calendar management um and email organization and so she manages what I like to call the the important little details she manages my schedule which is great I'm not dropping the ball on things I'm not you know she you know went through my email and she said okay you know this is what I do for a living I've never seen somebody who's being pulled in so many different directions when do you use the bathroom and I said on mute and she said when do you eat and I said at the end of the day so bigger picture what's going on uh at paraly Boyd in ter terms of your uh your attempts at world domination right it's and I'm I'm getting closer pinky um I don't know if you watch pinky in the brain no um so it here's a thing so we are just handling it I am so proud of my team at the salon we brought in our stylist trainer and he we were there till midnight on Sunday um starting at like 6 or 7:00 and my team just trained on the methods we need to be more efficient and they took the bull by the horns and even as of yesterday they have gotten people in and out and under an hour and the people of the reviews are amazing and the people are loving their hair um and we're just turning out a better product um and so now we're not needing to turn away people so long for so quick or so much because we are able to style them in the way in which per boy styled when we first opened back in 2012 to like 2014 so that's the one thing um the military is firing on all cylinders between Sunday and the end of October beginning of November I will have traveled to Fairchild Air Force Base vandenbberg Air Force Base wait tell us where these are oh yes Spokane Washington for Fairchild uh Santa Barbara California for vandenbberg Air Force Base uh Fort Campbell Kentucky Fort Hood Texas Ramstein Air Force Base in Germany graph and beer Air Force Base in Germany and Aviano in Italy all by the end of beginning of November um Fort Bragg's contract is almost done I should have it to me by the end of next week I am putting that team together of people very credal people who have worked at the Pentagon who have seen these contracts who know what I can ask for to lower my cost um because they reviewed multiple contracts for several bases um I've had people put in perspective what it means to have the military come to you versus you go to the military um and then you know normally the military says okay we'll do one base no they literally want an international roll out as soon as possible and so not only are we talking about what that roll out looks like we're also talking about the funding around that roll out now investors want to come but investor money is expensive money um and so you know I have a couple calls next week with some Angel Investors to see if that is an option but right now it's looking like I will fund these through the SBA um and also be able to fund these through some of the military contracts um that I'm being slated to bid on um through my certification or with a proxy for my certification until I get it and then I'm fr [Music] [Laughter] Ching wow a few months ago when you were just focusing on franchising you talked about us uh having a feeling of fud uh fear uncertainty and doubt plunging into the world of franchising are the feelings of fud returning with the military thing as well sure but less so the fud is there you wonder you know will people come is this what the people on base want want I know this is what the brass want in addition to that the military is very excited about having an African American woman help change the face of their relations with women in the military from what I've been told I'm part of a multi-prong attempt or effort to change that and so there's been discussion of me meeting with commanders and Todd brass and media relations at the Pentagon about how do we kind of post a child Dana uh to say hey this is what we're doing um I I think that's great but I also want to make sure that it's to the advantage of Dana and the advantage of Perle boy as well because there's another historic feat being taken on you know they've never had um an African-American woman be sought after for a global expansion not only in just her salons but also in her product um and so that we have to discuss what the messaging looks like and then you know again keeping franchising separate so it it the fud is still there because there's always questions but quite honestly I don't have time to cry I don't have time to worry I thought that's why you got an assistant I got an assistant and unless she schedules cry right Jay right um I had my cry this morning no um I I the fud is there but I don't have time I got tell you the franchise thing and you know I said this before you know I could think of six things to be concerned about this one I mean this is so much simpler and easier and these people need you and want you it's just I have abs I can't even imagine what you need to worry about with this I'm sure there's something I can't think of but this is this is an incredible thing that's solving problems that exist versus the franchise you have to to worry about you know finding the the person to buy the franchise and then training them and making sure they're the right people and getting the mark and there's so many more moving parts to that that are unknown this one just seems like a a really solid um thing that there's not too much to worry about or at least ignorance is bliss so don't worry about it ignorance is kind of bliss um you know I'm concerned about the reputation um service providers that are not big box have with the people on base so you know everybody knows Starbucks everybody knows quiz noes everybody knows these big box businesses that are on base nobody knows pely boy so I have to go on base and and buck the not only the hair cure Traditions which I think they'll be open to but when the military does something that's not big box they don't do it great it's not oh I love this place it's like here this is what we do based on what we know um and we don't really know about textured hair so with me coming on base I want them to know they may not know but you're working with a provider that really knows so I want to make sure I can go on base and wow active duty service members and their families you know what that's interesting because you're right if they go there you're saying they have no need to be marketers because they're bringing Starbucks on there they don't need to do anything in your case you're going to have to make sure the marketing's done because they're not used to having to do that that makes sense and wow them yeah have you thought about what that looks like I mean what are the differences between marketing on a military base versus Marketing in the rest of the world it's a great question marketing on a military basis very grass roots on the ground boots on the ground setting up tables in the exchanges going into the um neighborhoods and the in the housing communities putting up Flyers meeting with the wives and the groups of there's a lot of groups on on military bases the officers wives the enlisted men's wives the friends of the kids right there's like a ton of group groups um that you have to meet with Dana did you ever think about doing it socially because you can't actually Target everybody in the military and then you could put a radius on there and so everybody within that radius that's on social which will probably be about 70% on there would actually get it on their feed digitally yeah so there's I was just given the Grassroots as one of the examples but the military has gone ahead and given me all of the U marketing functions that I'll be able to tap into when I start marketing at Fort Brag um so of course social but they have their own social um heighten security is is huge like they're very big on security um so the Facebook that I'll be tapped into will be a little I won't say a little different but it's it's different than the Facebook that you know some of us go on um so they've given me a list of everything I'll be able to do I've given that to my marketing team and we're going to be putting a plan together um for 6 weeks before four weeks after then monthly for marketing tell their television stations are different their radio stations are different um and I'll be given access to all of that to Market in addition to the grassroot stuff you've given a whole new meeting to the phrase boots on the ground very much so like we have to have a table in the exchanges we have to have a street team meaning there got to those tables have to be manned with women who are in perly boy t-shirts they have to be branded their hair is done and we have to Market to the people that walk by and say this is who we are this is what we're doing and this is why you should come to us yeah so Dana I mean this is a unique and amazing opportunity that could blow your you up and um a hot second just by actually launching it to military how much capital is it taking to actually do all of these sites well that's another great question so because um I'm working with a former Pentagon retire he used to review all of these contracts just so he understood at a grass top level what was going on he knows what they can give and what they can't for instance what we're talking about at Fort Brag is them doing the buildout um and then me just plugging and playing me coming in and making it mine so we're looking at significantly reduced cost for um for military locations because they're so willing they already do a lot um but they're so willing to do so much more to get me in there that's great I think we're looking at less than $100,000 for build out but I'm going to part start putting my budget at $200,000 or $150 to $200,000 for each location because I want to pay my staff to come down there and train pay for travel um pay for marketing all of that and have plenty of cash and you know startup money um for when we do it and they said grand openings are going to be huge there's nothing command likes more than a grand opening that's going to solve a problem so please expect a band saluting uniforms red she said that'd be interesting um but she said no it's going to be big and and but I'm not going to have a party I'm going to cut the ribbon and we're going to start taking appointments in addition the technology that I'm working on that's another Capital raise that I need um because that technology is extremely important again perspective on this for you guys fort brag is bigger than the city of Detroit by like over 100 square miles wow I will be the only female salon on base wow huge opportunity and that's just Fort Brag we're not even talking about Ramin Dana you just mentioned you need to raise money for technology are you referring to the software you use to uh guide your customers through the salon yes where does that stand I know you've been using something do you have to create soft new software or uh what's involved at this point so we've already started talking with new Foundry um out of Ann Arbor an amazing company who I know is more than capable of doing this um they're looking for phase one of this to be done in 10 months that's why getting the military contracts that's why having somebody next to me who understands what I can put into a contract ask for you know how much of this can be the technology develop for this money um I may need to seek an investor for this part of that why do you need to do this you you've been using some technology to this point why can't you use that and why didn't this come up uh when you launched the uh franchising initiative it did come up but it's more urgent now because Fort Brag will be done before probably a franchise is ready to open our volume is expected to be huge and this software will will be able for us to manage it and communicate with customers outside of the salon it's hard for me to imagine that in that there's nothing that's already in the world in the hair salon industry that's that's I don't know 75% there there is there is there is but it's that that extra 25% that's missing is vital to CH everything is appointment based and so there is and and I've given them examples of things that you know just fall short of the mark and they see that we need a family um a father on base like I I met a father on base with three little girls and I told him you know that we might be here and his eyes lit up please be let me be the first one you know I'll be the first one in line my wife's headed over to Afghanistan I need you know please he was like when when are you coming and so I need him to be able to go into our app and let us know that he's bringing his three girls and then we let him know great be here 30 minutes so then when he does come in he just walks right in we need this to be able to facilitate that volume more efficiently this is and the reason why this is so important is again it's not just for the bases around the world it's also for the franchises and my corporate locations and for the military bases it they want me to own my software again for security Diana you obviously have a lot of experience building a software platform I believe you did it in in house do you have any thoughts about what it takes to to do this and what Dana should be thinking about in terms of hiring somebody to to create a platform like this the first thing I would make sure is that you don't have foreign entities involved and the reason is because a lot of people say you know I have developers in other countries but if the um thing gets stolen you can't go after them in another country Yep they're all local right even out of Michigan and Arbor Michigan right but you you also have to make sure the developers that they're using are also within the same country and then the other thing is it's really important to have somebody of a development mindset on your team because they speak a foreign language most developers do and as much as I say that I could have you know tried to figure it out with them it was never going to happen so I had to hire a CTO that really led the project and and I call him the developer Whisperer um because he speaks different language like they do and then I am at ease in terms of where they're actually going and the Sprints that they're coming out with and all of that so makes it a lot less complicated that you have somebody with that title on staff to actually lead those projects yeah cha-ching that's not an inexpensive that's yeah you know it's like add it to the list the only thing that I would tell you Dana and this part that you have to remember when you develop software you always have to maintain it and it's a ton of money for maintenance if you ever stop maintaining it you will automatically have bugs in the system so a lot of people think oh I just make the software and I never have to do anything after that no you're dumping money like you wouldn't ever believe yeah that is a difficult concept for and believe me I I fully agree after years of watching this stuff it if you didn't know that you would it's it's shocking you I would have thought like most oh you write the software and it's done and like that is a foreign concept to people who aren't in the technology business and I still don't fully understand why all of a sudden do bugs pop up if it was already so we've had that conversation it was it was on what is the ongoing maintenance because you know me I don't sleep to dream I you know oh software yay but the work of it and if I'm going to be spending this money how is it going to increase my bottom line and you know like what are we doing and so that's huge yeah understanding that that maintenance standpoint that's like a whole another business that you're creating it is all right well I have a feeling we're kind of only scratching the surface with all that you have going on Dana uh we're going to take a quick break for our sponsor work better now uh which connects entrepreneurs like you guys with virtual assistance and Dana by the way if you had gone through work better now you would have gotten a 21 hats discount just as any of our listeners can oh I didn't know okay I'm here with Rob Levan who is co-founder of work better now which provides business owners with virtual assistance how's it work rob you know as well as anybody Lauren that the pace of change in business has never been faster today's business owner has more to do than ever and if you don't focus on important stuff like Business Development and your next product and service and your customer experience and your team it's impossible to keep up much less to grow your business an assistant could do the one thing that everybody thought was impossible to do which is to give you more time in your day by taking all of the administrative tasks off of your plate how much does it cost it's $1,750 for a full-time dedicated assistant and fellow listeners of the 21 hats podcast can save $150 for the first 3 months by mentioning the word Warren all right to learn more work better now.com that's it workb better now.com and we're back I do want to move on to uh to another topic today uh which is I I'd love to talk about how all three of you uh track your financials uh I'm curious what kind of reports you get how often you look at them what your uh you know kpis your your key performance indicators are Diana how about you yeah I I have a report for everything and I make the bigger I think that you scale the less time that you have as a CEO so instead of me trying to pull all these reports myself I make it mandatory that my team's all send me a report on Friday and so of course my PR report comes in that shows all the lead generation and what they actually have I have a sales report that shows a 306090 in terms of conversion percentage of conversion based on everything that's on a pipeline on a financial perspective I always look at receivables once a week because people always think oh I generate the revenue but if you don't actually collect you're going to go under um I look at the balance sheets on a monthly basis just to see what where my assets and liabilities are I look at an acrel report which basically shows me how much revenue a cruel that I'm doing on a daily basis and that report is always coming from the finance department that shows me how much generated acrel there is um I look at a p L that's acrel and cash so that the cash side I always know cash flow where I am cash is always a lag indicator so it's usually 60 days behind the acrel if you collect everything but the acrel is the beginning indicator that says that you signed that contract and that's actually coming um in 60 days you should get payment on it I also look at um margins right because you always have to look at if margins are going up or down based on all of your product l um so I you know am a freak about the numbers and it's because the numbers will never lie to you they will always tell you a story it doesn't matter what your sales team says the numbers tell the story period and obviously you want to see an upward trend for every Department that you have so I do really track everything let me ask you a question I get off everything you said makes perfect sense the one piece of the puzzle that I I I'm wondering about is when you said your margin it's not like you're buying a shirt for $12 and selling it for $19 do you how do how do you so accurately figure out what your true incremental cost of something is so that your margin quote unquote is accurate because you're I don't know what it is you're selling I know know what you're selling but like your costs that go along with it do you feel like that's always accurate or is that a moving Target no so Jay that's that's such a great question and I could tell you're an Entre entrepreneur true entrepreneur because you're asking that um so what I find is that I have a lot of product lines right and I have a package B Package C package all over the place and each package is a different one for every manufacturer that I deal with so we have invented our own billing calculator because it was so damn complicated in terms of what we came up with but what I realize with the sales department and the account teams they just want to make a deal and so you could see that the longer I'm in business many of them have the autonomy to make their deal right and so because at certain times they're trying to meet the quota they're going to go down on margin and this is important to me because when I track it on a monthly basis and I see certain product lines I'll take the percentage of margin per product line because I can't do it by line item and I'll just make sure that it's somewhere you know between 40 and 60% and so if it's dropping a lot lower than that I'm going to meet with a my VP of um accounts okay that makes sense so you've got a fixed number but it's really about discounting which is a great answer because you're right the I've seen companies go broke because they gave the sales manager oh we'll give you uh 2% of sales not a good idea because next thing you know they're selling things below cost and what's that person didn't care they're making a zillion dollars so that's interesting so it's about really keep keeping a handle on the discounting and that makes sense because that is a problem yeah Jay because as you get bigger everybody else is doing this selling right and so you're giving them the autonomy to do it and it's exactly what you said everybody wants it for themselves they're like me generated and so and those are the best Sal sales people right you make it about them and they can make money for you well I I have a problem where all of a sudden they were they had to get this job delivered and hung on the you know for an artwork project it's got to be the 30th and I'm after a while I figured out wh what's the emergency that this company needs it on Tuesday the 30th and they and then you figure out oh wait they went on their sales report and they are unconscionable they'll you could run overtime you could they don't they they'll do whatever they want they have to do to get that in for the month and I've learned that we were very careful at the end of the month to watch for what jobs were shoved in there because they wanted it on their sales report for the month versus somebody really needed it so that's like standard procedure for us now cuz it's a common problem yeah and and for me Jay receivables is exactly that so I have salespeople selling but if I don't collect the money I'm charging them back after 60 days so that's why I checked the receivables to see which people didn't pay and if they didn't pay cuz you know you have over a thousand clients you have to check receivables and you got to charge back these salespeople because you'll go broke if you just pay them on the acral and you never collect the money Diana you described a what sounds to me like a pretty sophisticated uh review system and you you called yourself a you said you're a freak about the numbers were you always comfortable with numbers that way is this something that came naturally to you or did you have to develop it no not I am not an accountant I just I was a startup and so I couldn't even afford billing Team 5 years ago so I was the biller you know and this is the beautiful part when you do the job yourself you're going to know everything about what you want to measure and so when I handed off these pieces as we got bigger and I ended up getting you know my Ops team was my billing team in the beginning because I only had two people on the op side and so between Ops and me we did all of the QuickBook invoices and sent them out and it kept getting bigger and bigger and now we have five people in Billing but now because I went through that experience myself and did it myself I know what reports to push because I basically did it with my Ops Team and so that was such a valuable lesson because I I speak to entrepreneurs all the time you know I have a a family member that they have their own business and when I talk to them I'm like well don't you check this stuff and they're like no I have a controller and I will tell you in the 5 and 1/2 years that I've been in business I have found hundreds of thousands of dollars of mistakes hundreds of thousands of dollars worth of mistakes invoice is not being sent out you know $30,000 invoices oh miss didn't get sent out nobody cares about the business and the money as much as you do I don't care who you hire and at the end of the day if you don't actually look people people make mistakes and they don't mean to but they just do do you have a CFO no so I have a controller I am going to get a CFO very soon um I'm looking but yeah I mean I genuinely believe that it tells it all and I was a consultant for 15 years I saw fraud happening to a lot of the businesses out there because they didn't look at the numbers and one guy said he made the most important profound state statement to me and to this day I really believe it he says you have to look at everything coming in and everything going out if you can look at everything coming in and everything going out you'll always be fine but if you stop looking at what's coming in and stop looking at what's going out you can go under it is a natural growing curve in the beginning you're just looking for sales the last thing you're worried about are you going to get paid and the fact is this is a rookie mistak in business this is absolutely fact receivables that aren't managed will get out of control no question about it it just there's not a question about it I mean many people will pay on time but there will be people that if you don't manage it and stay on it they're not going to pay their bill that's just how it works and you don't learn that they don't teach that in business school I mean it's just until you get burned a couple times it it that's what makes you figure it out but that's a that's a rookie mistake thinking that everyone's just going to pay you because they're nice and Jay the also I I'm sure you experience the same thing the longer you go out in receivables the less you're going to collect that money no question so the minute it hits 90 days it's game over you're not collecting anymore you can't let it get to 90 days you've got to collect it between 30 and 60 because after it hits that point every day that goes by it's less likely that you're going to actually receive that money because if you're calling them to collect money there's 50 other people calling them and the old expression the squeaky wheel gets the oil the other rookie mistake people make is they have the sales people do it by Nature the salesperson is not going to have the personality to call up and say look at this needs to get paid it's like it's it's you need to have someone that's good at it and it's uh it's an art and a science to to get people to pay on time D do you think maybe you've waited too long to hire a CFO who could you know be tracking all this and watching for those mistakes instead of you doing it I think so absolutely Lauren it's like it's one of these things that as you I think grow a company you originally think that your team members can do it or you can do it and then it keeps going and you realize oh my gosh I can't do it anymore because it's consuming too much of my time and then by then it's already too late you're drowning so that's how I feel like most days that I don't have currently a COO or CFO um we are missing some people in the sea Suite area and so that's where you were planning to actually fill those positions but they're the most important positions so you've got to take your time I think in interviewing but you know making sure everybody buys in with these people I just went through the CFO hiring process for the first time in 22 years and I can tell you there are people that that own it that live and die on wan to do a good job if you find the right person they will take that off your shoulders and you will sleep at night they will in fact care about it as much as you do because their entire Essence is about doing a good job and I I know that those people exist I mean they're not all like that obviously but they do exist so you will find somebody how about you Jay uh tell us what do what are you track every Tuesday I get a flash report it's got sales it's got receivables it's got payables um what it doesn't have which is the big hole for me is inventory and if if if my number comes out that it's it's it's uh like if I'm short to cash I know where it's at it's it's it's an inventory and I don't have a daily report on inventory because it's it's I'm not selling you know stereo systems I'm selling picture frame molding and there's amount of footage use it's it's it's it's not an exact I don't have a really great computer system at the moment I'm working on it so I I can get a feel for it but um I can tell you if you have inventory uh that's the second thing if you don't manage your receivables will get out of control and if you don't manage your inventory it will get out of control because this is what happens you in an ice cream store and you run out of chocolate ice cream and people scream oh my God what's wrong with you you can't run out of chocolate ice cream so what happens your buyer makes sure they order five times more chocolate ice cream than necessary because they never want to get yelled at Again by the boss well whatever business you're in there's something there that you probably are sitting on too much of because somebody doesn't want to run run out of it and there is a point of no return and it's very very easy for your inventory to grow to 50% more than it should be because somebody doesn't want to run out of a product for a customer and you really have to sit down and figure out what the metrics are for how much should you carry because to the idea that we can never run out of stock of something is a is a is a very expensive proposition so you have to balance out and they actually do teach this in account I had a class in it about you know what is the cost of running out of your merchandise um I mean if you're a hospital you can't afford to run out of plasma so there's there's a tremendous expense but you know if you're a picture framer and you run out of the gold leaf molding that's 2 and a half inches wide no one's going to die so you know you have to balance that out it sounds like you may have hired your first CFO about 20 years ago um what prompted you to do that well um as Diana said it was a it was probably a year or two too late it's there's stuff that gets done that if your controller doesn't do it the owner's doing it and at some point either the owner has too much to do or the owner's out of their out of their depth and even though I have an accounting degree I've never practice as an accountant for one day so there's stuff that that I wasn't keeping track of enough and um I'm sure I'm pretty sure that most people when they hire their first CFO yeah it was probably a year year or two later than they should have but as with most things in business you don't do anything until there's a problem um it's not like you get a memo saying oh now is about the time you should hire a CFO now an HR person that one's a little easier because the standard rule out there that I think it's fairly accurate as when you hit about a 100 people you should have an HR person that doesn't mean that when you got 90 you're not going to have some problems though not having an HR person so that's another category of of a hole out there that who's doing the HR stuff when you've got 50 people it's a problem I mean it's so yeah it's all a moving Target and um this time 22 years later hiring a CFO I've got a much better feel for what I need to hire and I'm much better at the interview process than I was 22 years ago because I I didn't know you know I didn't know anything about it so I'm hoping she's starting next uh Monday I feel very good about it I think I found the right person Jay do you think that um working with people and managing people is the hardest thing out of everything that you do you know that's a tough question I it isn't it isn't it used to be but I'm here to say since I found the right people and they've been here for 20 years that at the moment it isn't at all I I it's it's pretty easy because but it took you a while to get to that point oh my God it took me 25 years or 30 year I mean it took a long time but but there are those people out there that will take the load off if you figure out how to hire the right people and you figure out how to train them and you figure out how to keep them life gets easier there's no question about it which is why I always tell people just keep fine-tuning in what you're doing it will get easier Diana at the stage you're in it would be virtually impossible for you not to be having some of these problems unless you already had run a company or so you will figure it out you are figuring it out but when you finally have a competent CFO and a competent a HR person and in your case a competent Chief technology officer yeah life's going to get easier it just does because they're going to take some of that responsibility off of you I want to work with Jay that's what I want to do I'm telling you you're you're going to figure out the fact that you're the size you are and you don't have a CFO I can imagine you're you got a lot on your plate Dana how about you what are you tracking uh to stay on top of your financials again I'm smaller so every month my um bookkeeper accountant she sends me a snapshot um the numbers I really look at are our payroll numbers that's my largest expense um and a lot of my other expenses are fixed um or close to fixed with a short range um and when the volume goes up um our need for supplies goes up um but not by a lot so I don't really have any huge fluct situations at our numbers um what goes out is pretty standard what comes in is varies you know a lot of it is seasonality and a lot of it is okay we're doing marketing um we're increasing our engagement so we're seeing you know the timing on that you do this this week and three weeks later you're seeing a big uptick um and then so we're looking at when I look at my financials I'm looking at my people um why did payroll grow up because my numbers as far as payroll are directly correlated to not only volume but efficiency that's why this training this past week was so important because the stylists weren't confident and what would normally take them 15 minutes to do was taking them 30 35 minutes you add that up we're seeing less numbers because we're not going to be able to get to everybody in a day and we're seeing a need for more people to be staffed because these two stylists are styling at this amount of time so my numbers are payroll I don't carry inventory and I don't have receivables I don't invoice anybody when they come in they get serviced and pay or when they come in and pay and then they get serviced money all the money I have I have by the end of business that day in your case some of what the most critical thing you're doing isn't going to show up on a financial wi is what kind of bench do you have for people to call in if you get busier or how many people are on the edge that might you know you might have someone who's eight months pregnant and it's going to be out of the job in in a month and like that doesn't show up in your financial so in your case I would think one of the critical things is just managing the Manpower our staff training tracking and that color coding of who's you know uh styled and able to train who's just styled who just started and who's trained that and that's again that's that predictive aspect of the technology we're developing so we know hey Saturday we're going to be very busy you don't want to put two girls who were just hired and who are still going through onboarding we need to put the people who've gone through the training process with our styling trainer so that's the numbers are one thing but what directly affects my numbers are the is the efficiency of my my team okay so do you also track then your reoccurring revenues by customer as well can you do that if as a walk-in so as a walk-in only Salon we are we're data driven so we are a ble to look at this date last year and say between the hours of 9:00 a.m. and 9:15 you can expect this many people and again and we're doing it all by hand right now and we can't do that anymore with volume that that that we're expecting at Fort Brag or on these military bases or in franchises it's just going to be too much so we need the technology so on Sunday when we opened our doors there were 10 women waiting out in front and that's about normal so now we know with these T Sunday we're GNA have about 10 women waiting this is how we need to staff and here is the service level that we need to staff in order to get those women in and out based on our kpis all right we're we're running out of time before we wrap up I just want to hit one more thing I just read a really interesting story in the Wall Street Journal about Facebook and how Facebook is acknowledging that it's um its own tools are suggesting that its ad campaigns aren't as effective as Facebook thinks they are and they're blaming Apple for this um because of Apple's change in its privacy uh settings I'm wondering if you can help me understand how this will affect the typical business that advertises on Facebook Diana this is very much your world what should we know about this So currently there's an a fight between Apple and pretty much every app provider so if you're on an Apple device ni you're going to now get with the new updates of iOS 14 a little message box that says do you want to be tracked that's the question it's a yes or no and that's the question 96% of the users as of last week have now answered no what that basically means is that from now on you can't get personalized ads that's about you now what makes me angry about this entire thing Lauren is they're not asking the question do you want advertising cuz you're going to get advertising but at the end of the day if you mark no you're not going to get personalized advertising so what does that mean that means Dana and I may get advertising on neck ties and Lauren and Jay may get advertising on tampons right because they're not asking whether they want advertising they're asking do you want to be tracked so everybody think oh no I don't want to be TR I don't trust anybody and at the end of the day they're marking no now what's making it super interesting is like a few days ago ad AG prints an article that says what's Apple iPhone update means for the ad industry and what the idea and speculation pretty much is in there is that the big giant technology companies are only getting bigger Google's getting bigger Apple's getting bigger Facebook's getting bigger Amazon's getting bigger why because they're not going to share the data anymore because they're basically saying oh we're going to protect the consumers that's they're not protecting anybody with their pocket at the end of the day if Apple's going to come out and now start selling add data or something comparable to that because now they have all the data and now it's their first party data it's not third party so now they can sell it as their first- party data or use it as their first party data now you may say oh on an Apple device if you want to go out to our consumers you have to do marketing through me this is basically a monopoly that's going to get bigger and the only people it actually hurts is small businesses cuz at the end of the day we will never be able to catch up if basically that data source is only for the big giants and they get to keep it all so by blocking Facebook and asking these questions Facebook saying I'm an app provider now anybody basically that does direct to Consumer advertising on my platform I can't do personalized ads for because they now track no I can't even retarget so when you go on Amazon you leave you look for a hammer and that hammer follows you around all over the place but that also the other advertisers come and I said I could sell that hammer cheaper than Amazon now that used to happen instantaneously that is what's getting blocked so you're not going to get that information and people don't realize how much we lean on efficiencies right now based on all of the data following us around and making these suggestions that we don't realize that this is how consumers buy products and it's frustrating for me to watch it I want to know about those 4% that want to be followed are they lonely do they need some intervention that's Diana and her friends but you know what my my partner is 32 years old he got that question uh you know when it first launched he answered no he's in our good for him but this is what I'm saying he's like if I got it wrong everybody's going to get it wrong period I'm going to tell you what I figured out as a retailer because we do some of it it's like in the olden days you had a store and if a 60-year-old walked in or a 23y old they both had the same experience the same products the same lighting the same salesperson now people that are 23 shop very differently than someone who's 60 like the 23-year-old might think that oh everyone buys things on Instagram and that's clearly not the case and the 60-year-old would think like what's Instagram so it's really changed the Dynamics of marketing to Consumers because they're extremely different now as to how they think about buying things yeah you you made that case very well Diana do you have a suggestion what do small businesses do in this Brave New World I mean this is what sucks for small businesses cuz as a marketer I know I can download first party data with is your customer base into Facebook and now Target them with Facebook um information but a lot of small business owners don't know how to do that but that is available to you you can take your CRM data download it into Facebook build a lookalike audience of those people and basically go directly to them and so that is doable right now wait wait why why are you able to do that why is that still uh workable despite the Privacy uh setting changes so think about it right now we're talking just about website and Cookie list Futures right which website relevancy is no longer going to matter so this is my frustration people don't realize this is all connected iOS 14 all the changes on apps as well as a cookus future where everybody's announcing the browsers are no longer going to capture the data that you interested in that product so Dana has a website I go on Boyd I I look at what she's actually doing I now leave and now I can get retargeted her ads basically discounts and offers that she has that goes away as of next year I can't get that data off a phone on Apple and I can't get that data off a website anymore so as a marketer if the website has no relevance on data why do you have a website that's what I'm asking but how does how does a lookalike audience still work work without being able to track that private data because Facebook has an a function in it that could actually build people's lookalike audience and they could basically make it anonymize so you don't know who those people are but Facebook's basically saying for Facebook Instagram and all the properties that Facebook owns messenger they can actually match audiences that look like your customers you what you also can do is buy data and we're not talking website data because to be honest website data doesn't convert the best and people think they do but they don't it doesn't mean that they're going to purchase the item just because they went to your website so what's more powerful than website data is Oracle data or third- party data which is purchase data if people purchased that product before that data is the most powerful data because now I could say J owns a frame frame store I know everybody who purchased frames in the last 60 90 days and give them an offer about those frames that's you know low and and cost effective based on the types of frames that they like that's what we're able to do personalize that experience based on the products that they've purchased before that is still accessible and so IHS Oracle they all sell that third- party data that's super important to actually have and download it into Facebook and then the third thing is to have immersive motion ad units because if you have a still ad and they literally you can't have a thumb stopping experience there's no data that Facebook can collect wait what's a thumb stopping experience you thumb stop and you can go into an ad unit now where you press in and now you can actually have products within the ad units and you can make selections within product price all of that within the app ad unit without ever going to a website and the reason that this is so powerful is if you're in the app like Dana's coming up with an app if you do anything on her app she owns that data she knows what you did she knows what you pressed and she could retarget you based on what you did it's anonymized but she knows that she can retarget the customers based on what happened on that app because it's trackable um for Facebook and so if you make those you know changes and you can make the ad units immersive and move and they can go into the unit and they can make selections that data without leaving Facebook Facebook has that data and now you can retarget people with anybody that went and went interacted with those ad units so that's all available you got that Jay yeah all right my thanks to Jay goz di Lee and Dana White as always thanks for sharing guys and here it is your marketing minute with Steve kraw of be found online here's today's question Steve what comes first advertising or updating my site advertising or updating your site Lauren it's going to depend whether you're B2B or B Toc because if you're in the direct consumer space and you've got a really bad web experience or user experience users aren't going to buy anything so you're going to want to update your site first if you're in the B2B space you have an opportunity to create landing pages or you can even use Link LinkedIn as sort of a captive tool to generate leads and have conversations so depending what space you're in and who you're trying to attract you're going to pick left or right lane if you will from B2B or B to C and figure out how far your marketing dollars are going to go and even if you're in the B2B space you're still going to need to think about a website if the user experience is entirely different from let's say a landing page or an ad campaign to the site you're still going to confuse your user so you going to want to think about that but you can get away with advertising first there where I think on the B Toc side you can't really Chase it um good friend of mine said Dave Berg over at uh Shephard he said the worst enemy of great advertising is a horrible user experience if you want more details look for Steve's marketing minute blog post at 21h hats.com wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's L RN at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think he can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by J dubron founder of blank word Productions okay now you can leave thanks for listening everyone