Leo Cannell is the founder of Seven Figures Funding and My Figures, which is a cash flow platform for businesses.

He has secured hundreds of millions of dollars in funding for thousands of small businesses.

Today we're going to learn all about raising money and cash flow in your business.

Welcome back to the Hairdresser Strong Show.

My name is Robert Hughes and I am your host.

And today I'm with Leo Cannell.

How you doing today, Leo?

It's doing well, Robert.

Excited to be here?

Absolutely.

I'm very excited for you to be here too.

And we had a pre conversation before we started, and it sounds so interesting that what you do.

I know that fund raising money for businesses is.

I know myself personally, like, I know at some point I'm gonna need to raise some money.

So I know that for me this is going to be helpful.

And I know that we interview a lot of entrepreneurs in this industry and we do talk to people who want to start their own product line, start their own tool line, open up a salon, go independent.

So a lot of the times they do want to, they're going to need to raise money at some point.

And then also we had a conversation about cash flow.

And I think that I always think of cash flow as the most important thing.

I know, like, I talk to people about money and they're like, oh, I got this much money.

And I'm like, I don't.

That.

That is not how I think about money.

I think about incoming and outgoing cash.

So I'm, I'm excited to hear someone with an expertise in it talk, talk about them.

I'm hoping to learn something in this conversation myself.

So why don't we start off with.

Tell us a little bit about yourself and what you.

What your different businesses do.

All right.

Yeah.

Thanks, Robert.

So I've been an entrepreneur for over 20 years and different businesses, but always in finance.

That's.

That's kind of been my space.

That I love is, is helping out folks with finances, with lending in particular.

So I started out doing residential mortgages, VA mortgages, home loans, and, and this was early on in my career.

And then we had the 0809 recession that hit, and, and a lot of those lenders went out of business.

And a lot of real estate investments didn't go well for myself, for a lot of people.

And so I was restructuring and reevaluating where I wanted to go.

And I came back to, I love helping people get access to money.

And I said, well, maybe I should start working with business owners.

So I started out doing commercial Real estate loans and did some of those and they would take a long time.

They were millions of dollars and, and it was fulfilling and it was cool.

But at some point I realized that there's all these new business owners, all these small business owners, many of them, you know, in the hairdresser beauty salon space that we've been fortunate to serve and they need access to money and they are ignored by lenders and banks and no one teaches us how credit and funding and all these things, high school and college.

And so I said, well, I'm going to put all my focus there.

And that's what we started to do in 2014 and fast forward over a decade later and we've been fortunate to serve thousands of small businesses and secure financing for them and help them grow and tackle issues like cash flow and, and I love serving small business.

I love helping entrepreneurs.

There's tens of millions of them in our country and they need our full support.

Nice.

That's awesome.

So, so you have so the funding.

Let's start with the funding side of it and then we'll talk.

Go talk about the cash flow or does it make.

You tell me, does it make sense?

No, I think that makes sense.

Okay.

All right.

So my first question is what if someone's listening or watching that is like, I want to raise money.

Actually, I'm so glad that they having this talk right now because I was just thinking about it.

What type of things should somebody who wants to raise money be thinking about and.

Yeah, thinking about and working towards or how will they know if they're ready or whatever.

Yeah, great, great question.

Probably the best thing I can do is share an actual case study example of someone in the space.

Wonderful woman by the name of Tara in, in Colorado and she had, she had a one room beauty salon and she was renting out the room and you know, they brought in customers and clients and she'd been doing that, she was making really good money and she a name for herself and she'd saved up about $20,000 because she knew she wanted to launch her own beauty salon.

And she had this whole vision for it and she had always paid her bills on time.

And so the first place, you know, you look at as a business owner and entrepreneur, if you're going to raise capital, the first thing they're going to look at is, well, you don't have any experience as a business owner, but we do have your credit history.

So they're going to look at personal credit and they don't teach us a lot about Personal credit in school and college.

And so obviously, we want to make payments on time.

And the next thing we want to look for is that we have credit card balances that are not maxed out to the limit, right?

So If I've got $10,000 credit card limits, I want to keep Those balances below 5,000, 3,000 if I can.

If I do that, my score is going to be high.

And so, as it turned out, Tara did have.

She'd always made her payments on time, and she had this one credit card that was maxed out, or her biggest card, but it wasn't a huge card.

And so I knew how that lender worked.

And what had happened actually was she init went to her bank, and her bank's like, no, Tara, you know, you don't have two years of profitable business taxes.

You don't have any collateral.

We're not going to give you a loan to start your business, which is what most of us hear.

And that's what I heard, you know, 15 years ago.

And I said, wow, it's way difficult to get money if you don't know how to do it.

And so then she went on and googled business lines of credit and connected with me and my company.

And so I got on with her and I said, all right, this looks good.

We what if you go ask this credit card lender to increase your limit?

Guess what's happening to your score?

It's going to go up.

She did.

They increased her credit card limit.

Now she had available credit.

Her score went up 30 points.

And now she was in a position we could qualify her so that the first thing you want to do is pay attention to the credit.

Make the payments on time.

If you are late, you know, get current as soon as possible, make those payments on time.

Number two, if you can pay credit card balances down or get credit card limits that are increased before you go apply for funding, that's going to be really helpful.

And then the other thing that's really good is you don't want to quit your day job, you know, that you might be doing before starting the business, because that's verifiable income that opens the door to more opportunities.

So in Tara's case, for score one up, and when you're a new business owner, oftentimes the best program is a 0% interest business credit card stacking program where you can secure multiple cards, 0% interest, and have affordable monthly payments.

You don't have to come up with any collateral.

And so in Tara's case, she got about $70,000, 0% interest.

She was able to open her location and she really went all in.

Like she wanted top of the line equipment, she wanted a whole ambiance when you walked into her beauty salon.

And so she was all in with that and it was just awesome.

She was so excited.

She went off and, you know, we helped a lot of other clients.

And then I bumped into her at an entrepreneur event and she, you know, hey, do you remember me?

I'm like, absolutely, Tara, how are you doing?

And oh, by the way, I've got 20 employees.

I just opened a second location, I'm buying a building.

And it was just amazing how much success she had had in it and to play a part, get her to that initial financing.

But then she started learning the financial education, the things they don't teach us in school.

And I could tell that she'd been reading books, she'd been going to Masterminds, probably a part of, you know, great group, you know, like yours.

And, and that's what it's about is, is you want to be, be fundable.

Whether you're a new business or if you're a small business owner and you're listening and you know you've got to get that next step.

You've got to get a new marketing campaign or there's a new service or a new piece of equipment that's going to really bring more income and notoriety to your business and you don't have the cash to do it.

And that's where you can get some creative financing, be able to get that piece of equipment, run that marketing campaign, or maybe you're doing all the work and you're working 80 hours a week and you need to be able to expand and hire and build that team up.

And so funding and financing will give you the cash to be able to do that.

Okay, so this is awesome.

First of all, Tara's story sounds amazing and I'm so excited for her.

And so you.

I want to go back.

Something you said.

Did you, you said something about stacking car credit.

What, what, what exactly did you say?

And can you explain what that.

Yeah, absolutely.

If you're a small business or a new business and you go to your bank and you say, hey, I need $50,000.

Well, unless you have a 401k or a piece of real estate with the no mortgage on it as collateral, it's going to be very difficult to get that loan as a brand new business.

Now, once you've got a couple years of experience and you've Got profitable business tax returns, there's SBA options, there's other loan options, but if you're in the new or you're less than two years, your sales are less than 10, 15,000amonth, then credit is what you're going to need to use to qualify.

And the best option is to be able to secure multiple, maybe three to four business credit cards that come with a 0% interest rate in a strategy we call credit card stacking, where you can secure the money.

Because if this, for example, Tara needed 50,000, the bank told her no.

But through our program, she was able to connect with four lenders who combined gave her about $70,000 at 0% interest.

And now she was able to get things going.

The payments were affordable, there's cash accessibility.

And that really, for most new businesses is the best strategy to be able to launch your business.

So what are the different ways that you help people raise money?

So that's one way.

Do you connect people with like individual investors or do you use, typically work with institutions?

Yeah.

So we have a finance marketplace of over a hundred lending sources, private and public, across the country.

And if anybody's lending to small business, we add them into our marketplace.

And so when somebody applies for financing, we check their credit, their income, their business profile with all of these lenders all at once, and then present the best options that are available to them.

And so everything we do is in the form of a loan, a line of credit, a business credit card that you're qualifying for based off of income, based off of credit, etc.

When it comes to raising venture capital or angel investment, then that's a much more difficult strategy, especially if you're a small business owner and you need 15,000 to $100,000.

That's right in our wheelhouse.

We do it that all day and twice on Sunday.

But if you need more than that and you're trying to, you know, start some sort of tech company, even then, oddly enough, things have changed a lot in the last two years.

We are connected up to several venture capital firms and have partners and, and have done, you know, gone looked at those routes too, with our own fintech company.

And I can tell you it's gotten a lot more difficult to raise private money, angel investment or venture capital, unless you've got the next Facebook.

And even if you do, they won't just give you the money anymore because they lost a lot the last two years.

You have to have 500,000 to $1 million in annual recurring revenue before they're comfortable giving you that venture capital.

And so I think that's, that's again, that's what we don't know and we think we can go and raise that money and so it's important to, to understand what your true options are.

Yeah.

Yeah.

Cool.

Awesome.

Yeah, that was.

You went right into the next question I was going to ask about the venture capital.

Okay, cool.

So from, from everything.

From like someone, someone.

How.

What's the, on the smaller end?

Did you say like 5,000 or is that like smaller?

Yeah, yeah, like 10,000 is usually the, the, the small end that we start at.

Okay, cool.

Awesome.

All right, well this sounds, this sounds so cool.

So work on the credit.

Make sure.

I guess having some money in the bank would be nice but not necessary.

Yeah, I mean the, the most important thing is that your credit cards are not maxed out, that they're paid down below the half the limit because that's going to put you in a place where you look stronger from a credit finance standpoint.

And then having verifiable income if, if you do, you know, if your business is launched, hopefully you're making some money, you've got some cash flow coming in or you're keeping the W2 job until you really get your business rolling.

Which is.

Or especially until you get your financing a place to where you can actually go full time with your business.

So when I, when I bought our condo, the because I'm commission, we had to have three years of verified income on commission.

Is that the same with you?

No.

Typically if you've got six strong months.

It's interesting with, with the 0% card stack program, you really just need strong personal credit.

And if you have your business entity set up, you can qualify for 0% interest business credit cards.

One of the other programs that we look at with new and small businesses is our personal term loan program.

And these are five year loans, no collateral required.

With those they will look to verify income.

But inst of, you know, going through your tax returns for the last three years, what they do now is they'll connect with your bank account and as long as you're putting enough money in your personal bank account to pay the bills and then some every month, then you can qualify pretty quickly based off your last six months of bank history.

When they connect electronically to your bank account without needing that now if for some reason you know, you're doing some, some interesting things, you got multiple bank accounts, it's complicated.

Then, then they'll look at the business taxes, but they're looking back one to Two years.

And they really just care mostly about last year and less than three years now.

If it's a personal mortgage, then they're definitely going to dig a lot deeper like that.

But when it comes to small business financing and some of these loan programs, they are a lot less stringent.

Got it.

Got it.

That was interesting what you said about if in your bank, like connecting to your bank, it almost sounds like, like an extension of measuring your credit score or something like that.

Like, so advise people maybe not only putting enough money in to pay the bills, maybe having some extra money in the account.

Is that another piece of advice?

Absolutely.

And especially one of the other ways you can qualify as a business owner is based on your business bank statements.

And so these bank fees and programs will look back at the last six months of business bank statement history by just connecting your business bank account.

And what they're going to be looking for is, number one, that you have more deposits then withdrawals coming in and out of the like.

We talked about some cash flow, right?

There's extra money left in the bank account.

You're not taking out more than you earn.

And then the next thing they'll look at is what is the average daily balance of your, your account?

Robert, are we keeping $5,000 as a buffer and keeping that average throughout the month?

Are we taking it down?

Some business owners put in the negative.

They bounce some checks, they bounce some payments, they pay some overdraft fees.

That's a huge red flag that business lenders don't want to see.

Gotcha.

Okay, cool.

All right, so two, two.

I picked up two main pieces of advice.

You know, work on that.

Make sure, work on that credit score and keep, keep a good credit score.

And then there's some strategies to help with that, like making sure your credit cards aren't maxed out.

Making get.

Try to like increase the limit, but don't use, don't use the extra credit.

And, and then, and then the other one was make sure you leave, leave money in the account.

Don't like, just wipe it out every, every first of the month when you pay all your bills.

Basically.

Awesome.

Okay, cool.

So that's awesome.

And let's move on to cash flow.

So if anybody that is listening or watching is, is in the process of raising money, if you already meet these, these, these pieces, then I guess then they should reach out to you.

Just send you an email or what's the way to contact.

We've got a very simple website.

It's 7figures.com, just the digit 7 and then f I g u r e s.com and you could go there.

We've got resources about credit, money financing.

And the number one question most people ask Robert is if I look at my options, is this going to be a hard credit pull and negatively impact my score?

The good news is no, it will not.

We're approved on experienced soft credit check program.

So you can get a free pre approval with no impact to your credit by just clicking on the funding button right there@7figures.com.

Look at your options, 0% interest loans, lines of credit, and we'll present all the best options to you and you'll be in the driver's seat to decide if something works for you.

And is that like kind of an automated experience or do you.

It is.

Okay, cool.

Yeah, we've got automated underwriting built in and connected out to the full marketplace.

Nice.

Cool.

Awesome.

Okay, so now let's talk about these other business my figures.

Tell us a little bit.

Tell us about that.

What is this is the cash flow business.

Yeah, what it is is it's a, it's a fintech software platform.

And so the, the bottom line is as we've been serving these business owners, we see some of them, like Tara, have great success.

We others see others that don't have as much success.

And so we started asking, well, why are some doing well and some not?

What are some of the differentiating factors?

And we learned that again, more of them had financial education like you've been talking about, or they had somebody who was really helping out to track the finances, the cash flow.

And the further we dug, we started to learn and see data and data from SBA and banks saying that 82% of small businesses actually fail due to cash flow and they don't understand how to create it, how to track it and how to forecast it.

And so we said, oh well, this is it.

Let's go team up with someone who's built a good cash flow software and we'll offer it to our clients and we'll do an affiliate program with them and it'll be just this win, win.

And so we went out there and we couldn't find one and we kept looking.

And those who said they were supposed to do it, like the QuickBooks owned by the massive multi billion dollar corporation Intuit and some of these others out there, they had very poor solutions when it came to cash flow.

And there was no way to go in and say, oh, what if I do this my what will happen to my cash flow?

They didn't have Any ability to do that.

And it was very confusing and it was very complex.

And if you're a small business owner, you just want simple, like, here are my accounts.

I can manage them in one place.

Here's my transactions.

Am I making money?

Am I, do I have a profit?

And then how can I plan my cash flow so I make good decisions next month and three months from now.

And so there wasn't anything out there.

So we said, well, this is it.

Let's build it.

And so two years ago, we've, the last two years, we've invested a lot of money to build that platform out and then recently launched it just a few months ago.

And it's, it came together better than I could have even imagined.

That's awesome.

Okay, well, congratulations on that and thank you for the opportunity to talk about this, because like I was telling you and when we first started talk in our pre conversation, I think cash flow is really important, but I have had conversations with hairdressers, salon owners, and independent beauty professionals and the term cash flow, I think, you know, it's like cash and flow.

So flow of cash.

But like, could you give like some sort of like, like a way for us to kind of really grasp how to, how to understand what cash flow is?

And I think that's such a smart place to start.

Robert.

And anytime I do a cash flow web class, that's the first thing.

It's literally slide number two is, so hold on, we've all heard about this thing.

What is cash flow exactly?

And the way I define it is it's having a chunk of money in the bank account after you paid all the business bills, after you paid all your personal bills, and now you have a chunk of money to invest in next month's business, to invest in next month's growth, to be able to make good decisions, move forward, and heck, maybe even pay yourself additional money because you're in such a good cash flow position.

And so that's, that's what it is.

There's a chunk left over going into the next month, even above and beyond next month's bills.

And it's knowing that that money is available and then it's, can we make the right decision with it?

Nice.

Okay, so, so cash flow.

So do you.

This is probably like super amateur hour, but if is is a strategy of good cash flow to maintain a certain amount of money in your account, or does that have nothing to do with, with cash flow?

Oh, absolutely.

Yeah.

You want to be able to maintain a certain amount of money in your account and have that available in case of emergency, in case of a great opportunity.

Also, at the same time, you want to have access to lines of credit.

That's why we love business credit cards.

If I've got a business card that I started out at a $10,000 limit, now it's up to 115,000.

And when a big opportunity comes, I can tap that account because it's a line of credit and be able to make the right investment.

Or if there's an emergency, I've got access to that.

And that gives you a lot of flexibility as a business owner.

And so, yeah, that, that's absolutely vital to keep that cash balance there.

But where I start out with this, Robert, is what we call cash flow creation.

So here's, here's a very simple real life case study I had with a previous business finance business.

I had my average sale was like $2,500.

My cost to fulfill on that sale and pay my team was about 1100.

And then my cost to bring in the customer, my marketing cost, cost to acquire customer, the CAC as they call it, was about $1200.

And so by the time you add 1200 and 1100 up, that's like, that's like $2300.

And so you go, 2500 is my sale minus 2300 in expenses.

I got 200 bucks left over.

And if I only have a few sales, I'm not going to be in business very long.

And that's where you need to start.

And so you need to look at your service as a beauty salon operator and say, okay, for each person that comes in the door that I provide, you know, a hairstyle, a haircut, and, you know, maybe some color different things like that.

What are my margins and where do my margins really get healthy?

And how can I make what I'm providing more valuable and different and not just a commodity where it's a race to the bottom.

And that's what I think Tara did so great as she focused on this overall experience and she was adding like massages and ambiance and, and, you know, the hair cleaning and just all these different things that the competition wasn't.

And because she had all this extra stuff, she could charge a premium for it and she had great cash flow margins.

And so in my case, what I had to do was I had to say, all right, I've got to get my costs under control.

And so instead of doing expensive marketing, like I was doing online digital marketing, that was really expensive.

I started an affiliate program and the affiliate program.

I knew I was never going to pay more than $700 per fund a deal, and that was $2,500 in sales.

And then if, and then I also said, all right, I'm going to make sure I'm not overpaying for fulfillment.

I got that cost down to about 750.

So now I had about a thousand dollars left over after paying out all my expenses that I can invest in growing the business, paying myself, and being able to invest in future growth.

And so that was what was key, was having those margins left over, that cash flow.

So if you don't think about creating cash flow within your products and services before you launch them, that's how a lot of people get into trouble, is they don't think about that as they create their product or service.

And at the end of the day, we either have a product or service beauty salon business, right.

Sometimes we're selling products, got these products on the shelf and are they marked up high enough?

Are they different enough?

Are they selling enough to where we're generating good cash flow margins on?

If not, then we need to find better products.

And same thing, obviously, with our service.

Okay, so I have two questions and.

Well, first one is, when you're thinking about, about like I do a haircut, how much does that haircut cost me?

And I know it costs me, like, let's call it 2.83% in the credit card fee.

I gotta, I gotta pay for the products that I use.

That can be like 3%.

It might be high 5%.

3 to 5%, which is like an estimate number.

I mean, I, I mean, I don't know that it's kind of like an industry standard number for the cost, like shampoo and to wash the hair and to put the product to do the styling.

But I don't think it takes into consideration, like the water I use.

I mean, is that too, like, too granular and to get down that way?

Or is that, or, or is, or is like utility just going to be another line item and it's not the cost, but it's a variable expense that you, you're not, you're not paying for the water unless you turn it on to wash hair.

Is that the kind of stuff that people should be thinking about and doing and calculating?

Or do you have another way to look at that?

That.

Yeah, you see, you want to have a good idea and some estimates, you want to estimate high, but you don't want to spend too much time to where you're literally trying to find out that the decimal point, the cost.

You want to get a good idea and then even estimate a little bit higher on your costs.

And then ask yourself two questions.

Is there anything I can do to lower my costs?

Maybe I'm buying in bulk so that my product ends up being a little bit more affordable.

Maybe a same thing with color.

There's, there's some deals there.

Or maybe the better idea is what's called a great book I read called Blue Ocean Strategy.

And Blue Ocean Strategy says, well, if I do everything like every other hair salon group and company out there, you know, within my city, well, I'm just in a red ocean where it's bloody and there's all these sharks and everybody's doing the same thing.

And when you do that, you're a commodity and it's a race to the bottom.

It's.

It's a five dollar haircuts, right?

It's.

It's cheap.

There's no margins.

That's not how you want to run your business.

What you want to do is have a Blue Ocean strategy where you create an offer that's so unique and so different, and they're getting something more above and beyond with a pristine, better experience than what the competition has provided with more value so that you can charge a higher amount and attract better, higher paying customers.

And that is what.

And it doesn't matter if it's a beauty salon or any business.

Like, that's the same strategy.

You want to have that Blue Ocean strategy where you have an offer so good people feel dumb saying no to it.

And it's a, it's not the cheapest offer.

It's high quality and you're attracting high quality customers.

And if you do that, that generates cash flow versus, you know, if it's.

It's just the same commodity service that every other hair salon is providing.

Nice.

Okay.

All right, cool.

Because I always wondered about that.

I was always like, I wonder how tight down, like get, get to on these expenses.

Like, how much do we need to boil down?

Okay, and then there's what was my other question.

I forget and I'll.

It'll come back to me.

Okay, so what is.

When you're working with small businesses and like, if you can remember any of the salons that you did, you worked with Tara or anybody else, when it comes to cash flow, do you have any, like, what are the most common places that people free up cash flow?

Just like, as simple as what you're saying.

Like, analyze every piece of incoming cash and then ask yourself how much does that cost, how much is the cost of every dollar that you get for that specific service or that specific product?

Absolutely.

What are the services we're providing that generate the most cash flow?

Whatever expenses associated with it, whatever the services, where it's, whether it's hair, hair color, whatever it is you're providing, where are you doing the best and how can you do more of that?

How can you attract more of that customer?

Right.

If you're just attracting people who only want the haircut once in a while and you know that that's a lower cost and lower margins and you're not winning.

Well, what if you turned your focus in your advertising and your whole offer away from just doing the haircuts to this full service experience?

Maybe they're get, you're throwing in a massage, maybe you're doing color, maybe you're doing the wash.

You're doing all these different things that no one else in your space is doing.

Maybe you add red light therapy.

There's so many different things that you can do to provide more value to your customer.

And then, and then you create a community.

Maybe you have a book club that meets there.

There's all these different you can do.

But how do you get more of your dream customer that's giving, bringing in the highest amount of cash flow per service?

How can you attract that person?

That's where I would start and that's where I've seen a lot of success.

And again, with those who have really killed it, that are opening multiple locations, buying their own building, dozens of employees, they are definitely focusing on giving a higher end experience.

They're attracting higher end customers that have more disposable income and that allows them to provide a better service with higher cash flow margins.

And the other thing that would add to that is they also all know their numbers.

Most small business owners, especially in beauty salons, they're kind of just looking at the bank account and I think I'm doing good.

But those who are dialed in, they're tracking it, if not with our software, with someone else's, where they know exactly how much money's left over each month and are they selling more of the products and services that are increasing their bottom line.

So when, so I, I manage a salon and we, we look at, and then I was at this last salon I was at, actually this is kind of where the conversation started.

But they kind of cleared out all of their, their spa stuff and they just kept the estheticians for nails and waxing.

And the reason was because the cost the margin on, like, facials and I mean, whatever, like any.

All the other spa stuff, the margins were super, super thin and they felt like they weren't.

I guess they weren't making that much money.

And then if.

If they're, if their estheticians were just doing waxing and nails, then on a, like a per customer, per ticket basis, the margin was higher.

And then they could just do a higher volume of those specific services.

Now, at the salon I'm managing now, we have an esthetician who is kind of like retiring, and we're debating whether or not we should keep the waxing.

And there's a conversation that happens, and it goes both ways.

The way I'm saying it versus is like the opposite.

Like, should I bring in services?

Should I bring in things for the customer to add value?

But like, what if the mark.

You're thinning out the margin on these other services when, like, I could have an esthetician room, but I could put probably two chairs for a stylus and I can make more money per square foot on, on each of those stylus chairs than I can on waxing and nails.

How do you.

Do you have anything to say on.

On this, like, topic or.

I mean, I don't know if this is kind of venturing outside of the lane of cash flow, but I feel like it's definitely connected.

Yeah, no, for sure.

And every business is different and every location where you're at is different, and then even costs can be different.

Right.

And so wherever you're generating the most cash flow and.

And that's what they decided then.

Yeah, you want to go all in with that.

And the numbers don't lie.

In fact, they scream.

And so the more you can look at those numbers and track them, the better off you'll be.

And then what happens is exactly what you're talking about.

You want to make the right decision.

And so for most small business owners, it's really tough for them to forecast what the future is going to look like.

And so if you've gone through the numbers and you're like, no, we're actually, we've got these tight margins doing some of these extra services that we thought were going to make us more money, but actually they're super expensive and they take longer, or actually, if we just helped, you know, more people doing some of the simple stuff where we have higher margins, we'd actually do better, then that's the decision that you make.

And the issue that most, most beauty salon owners and small businesses struggle with is how do I make that decision, how do I come with it?

And that's where the forecasting comes into play.

And so what we built out and what I was doing manually was I would look at our numbers for the last 30, 60, 90 days and I'd say, based on this trend of actual financial numbers, if I keep doing what I'm doing, what is my cash in my bank account going to look like in three, six, 12 months?

And it'll tell you, the software literally will tell you.

And then you can go in there and say, now what if we eliminated this service, this, it's actually not that profitable for us.

But we do more of this and you add that into the system and then it will spit out and tell you, are you going to do better to have more cash flow in three, six or 12 months or are you not?

And that's what it comes down to.

And so yes, it's a fintech cash flow platform, but at the end of the day it's how can the business owner make the right decision because that's what's going to change the cash flow.

Well, and I guess, I guess, I guess like if a, I, I, because I already, I, I've had these conversations and I already know what some people are probably thinking right now, listening or watching this.

And they're like, they're like, yeah, but my clients really like to be able to get their waxing done while they're getting their hair done.

And it, it's like a really big convenience for them.

That's one of the perks that they have.

There's a con, whole conversation and, and about like, are they gonna stop coming?

Are they gonna feel, are they gonna be more scrutinous of the price?

Are they gonna, is it a real true diminishment of value for their, their experience?

And so like that question is kind of butting up.

And that thought is butting up, like hitting up directly with the kind of analyzing cash flow.

I don't know if you have anything to, I don't know if I'm making, if I'm clear, like, like if we just analyze just cash flow, then we could potentially be like stripping like the, the life out of our business.

Which is why you kind of mentioned in the beginning like set yourself apart, differentiate yourself in the market.

And, but I know, I know for a fact many people struggle with this when it comes to other services and they, they feel like their customers want it.

But like, do you have any thoughts on that?

I do and I've got a case study example Example for it.

So I teamed up with a chiropractor, a great friend of mine, and we launched a health and wellness business in Henderson, Nevada, just south of Vegas there.

And one of the things that they thought or they felt we needed to do was get a machine that was going to help people with knee decompression.

And so that's what they thought.

I said, well, hold on.

Before we pull the trigger, let's actually track the data for the next two months and see how many of our customers actually want and are struggling with the knees.

And so we tracked the data and no, it was lower back, it was sciatica, it was shoulders, it was wrists.

And then, like, knees were way down.

And knees were only affecting about 5 to 10% of our customers.

And so investing tens of thousands of dollars into that piece of equipment was not going to move the needle for our business.

And so we didn't make that decision.

And so that's where you have to get into the nuts and bolts.

Well, what percentage.

And this is tracking.

Right.

If you don't track the key performance indicators along with the key financial indicators, then you'll make bad decisions.

And that's what so many business owners do.

You know, something goes wrong with one customer, with one service, and then they jump to a conclusion that's.

That's not based on evidence, not based on data, and they make the wrong choice.

And so in this case, if, well, everybody wants waxing, we'll do that.

What does the data show?

What percentage of the business actually really wants that?

Oh, it's actually only 12%.

Wow.

I guess that really.

That would.

If we actually got rid of that, how much would that free up time?

We can help more customers and do more of what we do really well.

That's high margin.

And we'll actually win and it'll be better at the end of the day.

Yeah, we might lose 12% there, but then we're going to gain 25% over here and actually have better margins doing it and free up time.

And so that's where you have to make those decisions based on data.

And that's where a lot of people always think there's like this holy grail thing that's just going to solve all their problems.

But you have the data, you know your business, you just have to track the data and look at it and then you can make a good decision.

That's.

That's so good.

Because I know that's an emotional conversation.

That's being.

It is.

Yes.

Yeah.

And I like that, like, maybe there's only 12%.

Well, I, I bet you it's.

It's like, I totally agree.

And I think that 12 of people, or 20, whatever the number is, that's low and might not justify adding the services or keeping them or whatever, what have you.

They are probably the loudest 12 or the loudest 100.

Yes.

You know, so they're the ones complaining and giving you a hard time and you're just a hair, you know, so.

Oh, my God.

I just want you to stop complaining.

Addition by subtraction.

Yeah.

Yeah.

Serve your dream customer, not your nightmare one.

That was great.

I think that's.

That's so good.

Well, I think this is like, we're at our time, and I think this has been a great conversation, and I really appreciate you coming on the show today.

My pleasure.

Thanks so much, Robert.

Absolutely.

Did you.

Do you want to say, like a sign off, like thought, last thought or piece of advice or anything like that for the.

The.

Either the current running business owner or the aspiring business owner?

Yeah, yeah, definitely.

I mean, we've talked a lot about cash flow and how important that is for small business.

And again, there's just not.

There's not a lot of education about it.

And so I actually created a free book that you can go Download.

It's a cashflowsecrets.com and I literally share the three cash flow secrets that help me create seven figures of cash flow in my business.

Not in, not sales, but actual cash flow in the business.

And so there's a.

There's a free class a free book right there if you want to learn more about cash flow.

Awesome.

Awesome.

Well, and I'll make sure all the information is in the description below, and we will hopefully talk to you again in the future.

It was a.

It was very much a pleasure.

Thank you.

Thank you.

All right, see you.