Rob Cairns talks to Nev Harris about Finances for your agency.
- Budgeting for an agency.
- Costs you do not think about.
- Keep tracking of expenses you do not need.
Hey everybody, Rob Cairns here today.
I’m here with my good friend Nev Harris.
We’re going to talk a little bit about financing and building an agency around financing.
How are you today now?
I am fantastic. How you?
Rob, I’m doing good.
It’s always great to have you and spend time with you.
I should tell you, every time I spend time with you, I learn something and I think you learn something.
So I think this will be a a little fun chat so.
Oh yeah, yeah.
We were just talking in the pre show that Rob introduced me to another podcast called Business Wars and I Binge the Hell out of it last weekend.
I think what I listened to about 20 some episodes in one weekend, it was fascinating.
Yeah, you know, it’s funny when we go on that we hear about people binge watching stuff like Netflix and Disney plus.
And Amazon prime.
And here’s you and I bingeing podcasts.
You know, that’s quite ironic when you think about it.
I can’t wait to binge more episodes this weekend when I’m doing stuff around the.
House and, but.
Yeah, you could.
And by the way, if you’re bored, there’s also a business wars book, and I don’t know if it’s available on audible, but it’s certainly available on Kindle, so check that out too.
So what I wanted to start off for we get into the world, the world of high finance.
And so question like, that’s good because you started in WordPress.
What’s your WordPress origin story and how did you get into this wonderful community we have?
Alright, well my my story is maybe a little nutty.
I had a marketing company on the side and then I had a direct mail magazine where we had a whole bunch of local clients for that.
And I said to and had a really talented designer and that was just wasting his talents doing this magazine.
And just designing ads for pizza companies and stuff.
So I said to him, I said, can you design websites I don’t know.
I said we could give it a try so we so we didn’t know any better and so we’re like, we’re like I say, I I hear.
About this quick thing.
So we we decided to try Wix and then we tried WordPress and everything like that and.
Then watch what thing that we buy.
We bought that, really.
I forget what it was, but a really popular thing back then, like about eight years ago or so that I think everybody used that was actually a really crappy thing, but and that that’s how we started out.
My agency website, the first site we built with that’s track it out, was like my agency website and that was in Wix and we never changed it the whole time.
We always had so many client projects to work on.
We always said, you know, we need to.
I said, I said we need to go back and redo our website in Word.
And so we had a bunch of like drafts.
But you know, we always wanted to make it perfect.
We never launched any of them so.
Yeah, that that’s funny.
It’s like the shoe maker who never fixes his own kids shoes, right?
He goes everywhere and.
And that just shows you, though.
That’s just proof of the fact that people were not, and I know you believe this, we’re not selling WordPress.
We’re selling solutions like you get sell word for us.
We don’t even have a WordPress website.
’cause, you’re not selling WordPress, you’re selling the results that you get from the website.
That’s so true, and we need to.
Sell websites as a lead generation strategy, not you have to be on the web.
And again, it comes back to how you frame it and how.
You sell it.
So, so today I thought we talked about the world of high finance, something you’re well acquainted with, you’ve kind of pivoted into how did you make the pivot from doing your own agency to the financial side effects?
Well, I so we all have these goals in life. We have these dreams. And, you know, I kind of accomplished a lot of mine with my agency and I and then I realized that, you know, I, I I got buyer’s remorse big time. I was, I was, I was, I was miserable.
I was depressed, I was burned out, and I had 11 people working for me and I realized I I just.
I didn’t like when my job had become managing these people we had to take.
A lot of clients, and I realize I didn’t like to work with a lot of different clients because half them annoyed me and I didn’t feel like I was making any difference.
So dumb, but on the side.
So being that that’s how I entered in the WordPress, this pivots right into that.
I mean, goes right into that that I didn’t really have any WordPress experience.
So I had to rely on people from the community and my friends that were so.
And so I just always was giving back to people, trying to help them understand their finances, money and everything like that.
And so they pushed me.
When I was talking to one of my friends one day, I was like, really?
She says now, why don’t you just like do this finance thing?
I said there’s a real need for this.
You’ve helped so many of us and and that and so that that’s.
Kind of how I started with this financing, so I started taking that more seriously than when COVID happened.
You you know, it just really blew up.
So, and that’s why I’m here.
Now, yeah and and one thing I will say is having gotten to know you really well though last year you are pretty generous with your time and you’ve helped me you felt.
A number of people in their community, and I think that’s what makes our community special, is already keep.
People will will dive in and say you need a hand, I’ll give it to you and you’re certainly one of those people.
So I really appreciate.
I I’m like, I I am one of those people.
But the only reason I can be one of those people is because I had a hell of a lot of those.
People in the seven years leading up to me being able to give back.
Yeah, I think I think that’s so key, right is to give back and to help and remember we’ve we’ve all been there.
I mean we’ve all been there.
I’ve been there and.
You know, I’m on this journey right now where I’m trying to figure out how I’m gonna run things remotely, and it’s an interesting journey, too, so it’s it’s fun.
Well, if you figure out how to work from an iPad, please let me know ’cause this has been my life goal for five years and I.
Maybe six at this point, like trying to actually run a run a business from an iPad.
And I’ve I I gave up and I bought a Mac book last year to use on my travels.
I’ll share with the Westerners this story while we talk about that I had.
And I think I’ve shared it on this podcast before, but I’ve had a professor back in 1986 at a Community College in Toronto.
And his dream?
In those days, we worked on mainframes and mainframe terminals, not even PCs.
And his dream was to take his business and work on a beach, on a portable computer.
And everybody called him Billy Bob and his name was Bill Warren and said, you’re crazy, Bill.
This will never happen.
You’re not gonna do this.
I can take my laptop and work on a beach at the resort I go to in Dominican Republic and have Wi-Fi and do my business so.
You know, he was a visionary at the time, and I used to say to people listen to him, he’s a visionary.
He knows what he’s talking about and a colleague of mine who I’ve known for 30 years came back to me the other day and said, you know, you were right.
And I said, yeah, you just sometimes you gotta listen to people, right and where they’re going, so.
Uhm, do you remember?
I mean, you’re like, I I just remember this from hearing stories when I was young from like my my dad ’cause.
He did a lot of traveling, but do you remember in the 80s when people when, like they would carry around a computer that was the size of a briefcase?
And then a keyboard would flip down and the the the Monitor was about the size of an iPhone Max.
My father was a CFO and uh for an insurance company, CFO, Corporate Treasurer.
And he was one of the proponents.
So two things he did was he had an Apple 2 plus.
And he carried it with a small green and white monitor, and it all fit into this big briefcase.
And when he wanted to take it into the office, he would just put the top on to.
Take it in.
I still have that machine as a memento today because that machine and was the reason I got into that.
It means so much to me.
So and Compaq actually had some.
They called them portable.
There were portable desktops.
They fit into, like a briefcase.
And you carted this big thing around.
Well, then and now we just carry these small laptops on her lap.
That is absolutely incredible, right?
Yeah, this thing had a big metal handle.
I remember my dad show because he never had one but his friends ’cause.
My dad was super anti tech but because he but he was like uh an older guy.
But yeah but I remember him telling me about it.
Like, oh wow.
And then now they’ve shrunk down to so small.
So it’s it’s cool seeing all that stuff evolved.
And since we’re reminiscing and being in finance, you’ll appreciate that in finance, the key to finance is the spreadsheet, right?
And to some degree.
And I still have an original Apple Visi calc box, which is was the predecessor to Lotus, which was the predecessor to excel.
And I still have the original software media for that when it came out for the Apple two plus for living as a memento because.
Put that machine in that spreadsheet.
I honestly don’t think I’d be where I am today, interestingly enough.
So, yeah, that’s that’s that’s that’s super.
I think it’s fascinating how the things that, you know, happen in our childhood end up directing us like that.
We would never think, but end up directing us in ways that you know are so impactful in the future.
Yeah, it’s so true.
Like the story about Bill Gates, you know, having access to one of the, like at in the middle of the night to one of the three supercomputers in the world.
And that’s how Microsoft and ended up.
Being built was because him and Paul Allen could sneak into a computer lab in the University of Washington that had one of the three supercomputers in the world at that time.
Yeah, and and then you look at the guys that that founded Apple.
Jobs and Wozniak were both hackers.
Uhm, one of the the most well known hackers in the world.
The guy by name Kevin Mitnick is like the FBI biggest consultant because he was bored.
So he hacked computer networks and phone networks because he was bored and.
Now, and now he’s making over 7 figures a year as one of the government’s biggest computer security consultants.
It’s it’s funny how what goes on in your childhood shapes where you are today.
So what you’re saying is we’re not going to have any super hackers in the future and we have Netflix and Tik T.O.K to.
Thank for that.
No, I didn’t say that.
Right, so because no, because nobody gonna ever be in ’cause.
No kids are ever bored anymore, because they just sit there and watch 3 hours of Tik T.O.K videos or, you know, get on Netflix and binge something.
I I would disagree with you there.
I mean I think the biggest problem with kids today is they don’t know how to use their brains in their imagination if they’re not spoon fed sometimes.
So in our days are my parents, would having four boys would kick us out that house or they’ll go to the park, go find something to do, go play, get lost.
We’d end up in the woods, building a Fort or figuring out how we could dig a hole under a tree, or even my son we were talking about the other day, him coming home and saying, dad, my cell phone in the days of foot phones is wet, and me being an angry father looking him and say, how the hell did you?
Foot phone get wet and where were you?
Well, it turns out they were trying to jump across a small stream somewhere in the woods and and, uh, and you know, you think about that and now you say.
Say to these kids today, use your brain and they’re lost if it’s not.
Hey, and it’s one reason they don’t read as much because they like everything this be spoon fed.
And one reason I like to read is especially from reading fiction or something like that is I can paint the picture in my head and actually see what I’m reading and but the kids today don’t have the bandwidth for that.
They just don’t.
I kind of blame our schools for that, because our school system, it teaches kids how to memorize and recite facts, but it doesn’t teach them how to solve problems.
So I think, I think that’s a real big failure or school system like and and honestly, like the reason I have a job is because our school system failed our kids so much that they don’t understand the basics of finance.
Yeah it’s it’s so true.
You know having come up in as a as a programming student, kids learn to think ABC.
CD and the minute you go A/B, F or a BZ in the middle and they kind of look at you and said but I didn’t know or not well, did you learn how to think and?
The finance is a really good one.
Uhm, I think basic finance should be part of every high school curriculum program.
And in Ontario they’re starting to do that because.
We’re starting to realize that finances is a big problem.
I mean, you’re a an 18 year old kid going in a university and the first thing that happens is to credit card companies.
I’ll say we know you’re going to university.
Here’s a credit card with.
Dollar right, go do what you want with it.
And here’s a free T-shirt signed up for this credit card that’s going to screw your.
Life for the next 10 years.
And they don’t learn young and they don’t learn how to deal with money young.
And that’s a prob.
But what they do learn is like some complicated equation in algebra 2 where most of them are never going to be math majors.
Because that’s important.
But the problem with not learning finance young is what happens is.
They don’t appreciate stuff, so by example I’ll give you when I was.
Going to college one summer, I had my eye on a new stereo system that I wanted so bad.
And my father looked at me and said you’re not getting you got a part time job, figure it out.
Smart man. So what I did was at that that summer I was working for my dad’s company, actually doing some reports and helping out in filling in with people on vacation every paycheck.
I gave them X percentage and so put this away for me.
And then when I got to the five or 600 bucks that I need to divide this system, I went and bought it and I had that system, believe it or not, for 15 years.
But the reason I had it for 15 years is because I earned it and I didn’t buy it on disposable income.
I treated it better than if I’d gone in with a credit card and said here’s a credit card.
Give me that now and I’ll worry about it all later.
And there’s truth to that, I think.
Oh, I believe that so, like, so, so deep in my heart I when I was when I was growing up, my dad taught us, you know, he says, look, he says that the key to having a nice stuff in life is taking care of the stuff you buy.
And, you know, like my nephews like.
So I had a pair of Allen Iverson low cut, original tennis shoes that they were.
They were just.
I like I I love them.
And I I kept them for like, I used to be a sneak ride way back in the day and I kept him for like 15 years.
And they were, and one of my nephews was and I kept him Pristiq and one of my nephews was coming up and he started getting into sneakers and everything.
He wanted expensive sneakers and I and I said to him, I said, OK, I’m going to give you the.
This is your size right now.
I’m gonna give you these shoes, OK?
Because I mean, they’re they’re iconic, you know?
No one no one possibly could have these.
And and so I gave.
Come to him.
Within I’m not kidding you.
Within two weeks they were ruined.
Probably within a week.
I probably didn’t see him.
And I was, I says.
I looked at him.
I said, how did you ruin these shoes?
I’ve kept them in mint condition for 15 years.
I wore them.
I wore them a lot, and it’s just ’cause, you know, his parents bought him everything.
Wanted and as.
Soon as he wanted it, and when he?
Ruined it, or lost it, or didn’t take care of it, they replaced it.
So he had no value for what anything was worth.
So so so true.
So I’m going to start a new agency.
And so thank you not not that they need to.
And what’s my number One Financial problem before I even get in this starting?
So if if you’re starting a new agency, if you’re just starting from scratch, ah, I would say the number one concern you have is understanding your cost and understanding the difference in the kind of cost you’re going to face.
And what’s the number one cost I should be looking at?
Should it be staffing, should it be?
The cost of running the business i.e.
A website, you know that whole side of it?
Should it be the tools?
That I buy.
Where do you work?
I would say it’s not so much what you’re buying, it’s how you’re tracking it and knowing and pretty much just tracking it.
So because costs are the foundation for the rest of your business because.
You could price something and you can make a profit on it, but if you don’t understand your.
Cost, you know, you’re just pretty much good.
You’re getting lucky, making a profit on it.
Because if if those if those costs spike on you and you don’t realize it, all of a sudden you’re doing the same thing.
You’re working and you’re still working your fingers to the bone and you’re doing everything great all of a sudden.
You’re making half the money you’re making, which isn’t fair, doesn’t make you happy, but, and you don’t know how that happened.
You think, man, business is just really hard?
Is ’cause you didn’t understand how your costs factor into your business ’cause like let’s say for example you.
Your what are your fixed costs now?
Fixed costs are just pretty much anything, and this is how I define them.
And I like to simplify this stuff because these definitions in accounting and finance, it’s super confusing.
I almost think they built the language to design people to keep them out of it.
You know, it’s like the accountants full employment plan confused the hell out of everybody and they’ll need us.
So I’m going to simplify this for you if your fixed costs are anything that you pay on a monthly basis or a yearly or quarterly basis, but that no matter what happens, you have to pay.
And then you have what’s called variable costs and I hate that word variable.
So we’re going to say project related costs now.
Project related costs then are the costs that you only incur, that you only have to pay if you take on new job and you’re not going to.
Most of those are going to be like say, especially when you’re starting out.
You probably don’t have staff, you know.
It’s probably just you, but maybe there’s an integration you have to do when you’re building a website.
’cause the client really wants it to integrate into XYZ Software and Zapier doesn’t do it, so you think to yourself.
Alright, I need to go out and hire somebody to do this part of it, you know, so you go out and hire them.
Well, you only have to pay that because of this project and then that goes away.
So you just have to price that into that specific project.
But other than that, you know all the rest of your costs, then you have to pay.
Every month, no matter what you sell.
So for example, if you have, if you have $10,000 in fixed costs, which you want when you do not have 10,000 when you’re starting out, I’m just doing simple math and you sell.
Uhm 3 websites for 5000 each? So you’ve made 15,000 and you have 10,000 cost. You’re like, great, I made 5000 this month.
That’s fantastic. The next month you still have those 10,000 in costs. But now let’s say you only sell one website. Now you’ve lost 5000.
So just understanding that base level of revenue you have to bring in to cover those costs and then understanding how?
How this variable costs, can you add to that?
But what we always look at though is we always look at the fact that, hey look, this project going to take 20 hours, you know, it’s just going to take my time.
So we say, you know what I could charge, you know, especially when we’re beginning, we always under price in the beginning.
I could charge $1000.20 hours. I make $50.00 an hour. That’s a pretty.
Good hourly wage, you think?
Yourself, you know, but what you what you don’t like think of is if that’s the only website you sell and you have all those fixed costs, you’re not making that $50.00 an hour because you have to. So that that, that that’s why I feel costs are like the foundation of, you know?
No, I agree with him. One of the things that you said that really resonates with him and found myself smiling and nodding my head T&F.
Because project costs need to be built into the cost of the project.
I’ve seen too many people in the web game, the marketing game, and say, oh, I just won’t build that in.
Well, I have a theory and in my business and my agency, my clients pay for every tool that I use one way or the other.
And they they’re not gonna want to hear that, but that’s just reality.
It’s built in somewhere, and I even go to the extent of.
Fixed cost is we all use payment services right to pay the bill.
Well, in Canada we have this cool little thing called an e-mail transfer.
So you can send me an e-mail transfer for the bell which had a deposit, right?
Any account. If you use a payment service, guess what, folks? You’re paying the 3%. I’m not absorbing it.
And I tell my client it’s right in their contracts and and they said, but why should I have to pay the 3%? I said because it’s in your contract. It’s very simple.
The OR or send me the e-mail transfer and I don’t take checks in my business.
For you know.
A couple I do some work with some political parties and they have rules that they have to pay certain things by checks.
But generally, as a rule, I don’t because the world is changed and people say, oh, I’ll just absorb that 3%. Well, I’m going to tell you folks.
If you do 3 marketing projects in a month and you start absorbing 3% on every project, that starts to get expensive.
So you know, you need to pass those costs on to the consumer and you actually need to stop fighting this whole race to the bottom.
I’ll just help price my competitor because if you keep doing that, you’re not going to do very well in the end.
Oh yeah, this is ’cause.
I I always say there’s, you know, everybody scared to price hikes, they don’t think they’re going to get that.
Products and then So what you end up doing is you I’ll be more competitive for the low price strategy.
It doesn’t work in the web design business because everybody at the bottom, alright. And then so you’re, you’re super Even so you’re super competitive like you say, it’s a race to the bottom. Well, I’ll do it for 5000. I’ll do it.
Four, I’ll do it for three, I’ll do it for 500, I’ll do it for 400, you know, but you know, at the upper end of the scale, the people that are charging.
A lot there.
You know, there’s not a lot of competition in that market because people are scared to enter that market.
It’s not necessarily that those people in that market are giving that much more value or having that much more talent.
They just had the guts to price that high and then people start paying that and here’s the thing.
Like the customer that’s willing to pay more money for a website is going to be easier to work with.
And the customer who who wants who wants the the deal.
NAV, can I stop you from it?
Can you set up one more time please?
The customer that pays more money is going to be easier to work with than the customer always looking for a deal.
And I’ll say it this way, ’cause if, if they’re saying if they’re trying to, if they want a $1000 website, OK, a $2000 website, OK versus a guy that wants a $10,000 website, a guy that could afford a $10,000.
Website, Even if there’s a small little problem that you know, or even if some is not exactly right.
Wait. If he has to spend an hour on of his time with you to get that fixed, it’s not worth the hour of his time to argue with you about a 50 to $100 little thing.
The guy that’s get paying $1000 who is like, Oh my God, this is a ton of money. He will argue and argue and argue over $20.
He will SAP your time.
And will they even continue for like pennies because he does?
Because it matters.
Because that little bit of money matters so much to him?
And and there again, and I’ll tell I’ll even go further on that, it’s, it’s probably one of their first websites and if you have ever worked with people.
With their first.
Website You know, they have no idea what to expect. You know, they think getting the content is going to be 1000 times easier than it actually is going to be.
So I I I always like I avoid first time.
When I had my agency avoided first time websites like UH.
Like I, I, I’m.
Smiling as you go through that, and the reason I had to repeat that is people need to hear what you just said like they really do.
It all depends on what the I call it value, pricing, so.
I’ll give you an example that I have a client who has a high end woo commerce store to the point he’s making $50,000 profit in it.
And I do all the security and the maintenance on that store.
And he is not getting the same pricing as somebody for his maintenance as some somebody that’s got a $5000 website. Let’s be fair here.
And he’s on a 24 by 7 contracts. So he’s got any emergencies they get dealt with, they get.
Dealt with quickly.
And before we entered into this arrangement for I took him on as a client.
Somebody else was doing his maintenance but charging him bottom basement prices and then when the site went down or had an issue.
It was down for a days.
He went down over a Canadian long weekend and that was awful because frankly the guy just looked up and said, oh, you’re paying me bottom basement prices, you’re paying bottom basement.
I’ll get to it when I get to it.
His net business loss for that site being down for three days was $200,000.
Well, So what you do to clients like that is you actually charge him what I call value based pricing.
So it’s worth $50,000 a day, so he needs to be on a maintenance plan that’s he’s gonna pay lots for because.
Frankly, he’s making 50 grand a day and it’s a business expense and then people need to start to get with that.
Do you know what he almost never calls?
He pays his bills regularly.
He doesn’t complain.
You send him an e-mail every so often.
Make sure everything is OK.
He’s quite happy.
And really, what he’s paying lots of money for is security.
Knowing if something goes wrong in Syria, it’s like an insurance.
Exactly, exactly, Yep.
Now in the head, as I was going to say, security, it’s insurance.
And he’s quite happy.
And and then you’ve got these bottom feeders and they, and I call them bottom feeders, tire kickers, whatever terminology you want to.
Use and every time I look at a job that’s in that realm, I say, why did I do this to my agency, and why did I take it?
Because it becomes a nightmare and and frankly, I personally would rather take three or four jobs at a higher price level than take 20 jobs at the lower pay stroke level because I’m going to be less stressed doing the three or four.
Now people will listen to this and they’ll be like, oh, you know, never rob.
I mean, you’re.
Yeah, you’re exactly right.
But I I can’t get those drops and like, I, you know, I’m just, I’m just starting out.
I’ve only been doing it for a year.
I just, or you know, we we just don’t have the talent. I mean, if you look at really what goes into like a $20,000 website or a $10,000 website.
Versus what goes into like the websites you’re probably selling it 2000, it’s not much. The only thing that the only real difference is the confidence in being able to sell.
But yeah, I’m not.
And when you get into super, if it’s a super complicated ecommerce or or maybe some supply?
Uh, inventory control system.
You know, maybe that needs some special kind of knowledge, but most often, like the the the only thing that makes a website more expensive is the confidence of the person selling.
It yeah, I.
Because I mean at certain point we know how to use WordPress.
Yeah, Andy, expertise.
So I always say to clients, they say why are you so expensive?
I said I got, I have expertise.
That most people do.
Yeah, that’s what I’m trying.
To yeah, that’s a more, there’s a better way to say my point.
I’m saying we all like at a certain point we all have like similar expertise, unless it’s a very niche kind of thing.
And so it’s just I like I’m selling websites more expensive than than Susie because I have more confidence than my expertise.
Not more expertise than Susie does so.
Yeah, and it’s not just websites.
I mean, you come from a marketing agency background.
It’s all marketing like.
I do. Oh yeah, I do e-mail marketing for clients and I’ve run e-mail lists that have 200,000 names and.
It’s all sales.
And I’ve worked with some big brands and I were talking Fortune 500’s and leaders in their field and people said to me, how can you get off charging what you do? And I said because.
I can, I will and I know what I’m doing and it and it’s not about the money.
What it comes down to is people choose who they work with because of the trust factor.
So if you don’t trust with them going into the table.
Go find somebody else, because you’re probably going to be a pain.
So, so I always say like when you talk about value based pricing and everything like that and this goes back to what we’re why I said cost, why understand having a rock solid understanding your cost like I always say pick a problem and that you’re solving with your agency that is that you.
You could charge a third of what it costs to solve that problem.
So the problem you’re.
Solving like, it’s three times your price because what happened ’cause then when you and then you could look at it and say, OK, well, I’m solving a $10,000 problem with this and then I want to charge $8000 for a website. Well, you know.
That’s, you know, there’s that doesn’t really, you know, there is that $2000 gap, but the person, the, the, the, the the customer is not really going to see that.
Or you say to yourself, you know I want to charge 10,000 for a website, but I’m solving a $3000 problem.
You know, just or you say I want to charge, you know, I have this problem.
I have this niche I’m really excited about.
I want to do it. I’m solving a fight, but I’m solving a $5000 problem and and you’re like, OK, well I’m really passionate, but I really want to do this niche and I’ll grow into it. So I’ll just, but you have 5.
1000 in costs.
And then you know you still you.
You can’t be profitable.
You can’t even keep the lights on at that level.
So you know, it’s all about understanding your costs, understanding the value of the problem you’re solving, and then pricing accordingly.
And and and outside your business, figuring out what kind of lifestyle you want to live and how, I mean that’s a factor and.
You know, I if I hadn’t figured it out, I don’t think I’d be in a position to be taking my business on the road 1/4.
Year I, I.
And I’m in that position and that’s.
A really good position to be in because I’m gonna do stuff I wanna do.
I and my model kind of is work to live, not live to work.
You know, I think I and that’s where I had a friend and I was helping her out with this and I I had to open her eyes at this.
She had an agency and she grew a pretty big agency, got burned out, quit, you know, freelance for about traveled, you know, digital nomadic for about 7 years and then you know started.
You know, growing this then then started getting so, so busy with work that, you know, she started growing an agency again.
And I said, are you nuts?
I said you’re absolutely.
And she was getting miserable again and she was getting overwhelmed and I said.
And she says.
But I have all these people I need to make money and I have all these people that want to.
I said if you have all these people, I said, what you need to do is raise your prices to the point where you know you’re closing about.
Instead of closing 100% of the people you talk to and turning away the rest of the people and feeling bad about it, raise your price where you’re closing 70%.
The people, you know, 80% of the people and that your body, your price is high enough, you’ll have less stress.
Make more money and you won’t, and you won’t have to.
You won’t have to run a company that.
You hate, so it’s just all about, you know you like it.
It came up in.
Status slacked like about a month or so ago.
We’re just like when somebody was like scale, scale, scale, scale, scale.
If you’re not scaling or failing, you know and I was like, no, you know run the business you want to run and you can’t and you you could be extremely profitable.
You know you can make, you can make as much money as you want.
You know, and you know, unless you want to make billions and billions, you know, add, you know, at whatever level of staffing or whatever level of customers that fits your lifestyle.
And the other thing is too, is if you’re building that business and you’re scaling, the first thing I say, and it’s not really a financial topic, but it’s worth mentioning, is.
Work at your agency and say how many of these tasks can I automate?
Because if you’re doing something three or four times a day, you need to find a way to automate it, and you need to do it now.
And that will save you financial cost.
C and you won’t have to hire somebody to do that.
You automate it and let it go and people say, oh, automation is bad.
I would humbly disagree.
And and the other thing to look at is.
If you really want to get involved in that discussion, you were just have.
King of there’s a really good book by Michael Killen out there.
Uhm sell futures, not features and go read it because Michael.
I love mine.
Taught my son great.
Guy, yeah, he talks all about that.
He’s been on the podcast a couple times.
We talked after he released his book earlier this year, and he talks about exactly what we’re talking about.
A great resource.
Yeah, my mic.
I would just say like about Mike I.
Mean if you want.
To talk about some of the, I mean, I don’t know, Mike.
I’ve never met him in person.
I’ve had the privilege talking to a couple of times online, but truly, genuinely nice, caring people that give back to the community and every everything like that.
You know that is is not.
Selling snake oil or something like that, Mike is truly one of those people.
I I know when he released his book earlier this year, I reached out to him knowing the release date was coming and said.
I wanna drop a podcast within a week of that book coming out because I know it’s gonna be gold coming from like.
And anything he says is you just need to pay attention.
That’s that’s all you can say.
You’ll thank yourself.
I just reread it for the second time actually, so.
Yeah, it’s quality.
Well, I you know you said this not.
It’s not a finance discussion.
I I wholeheartedly disagree with that.
Uhm, I think so.
When I talk about costs, getting back to this.
So all all what I’m talking about and it’s hard for me to like.
I’m not going to try to describe it here because it’s hard enough to describe some some concepts on podcasts, but I have a what’s called a pricing pyramid.
And at the bottom, when I talk about foundational stuff and I talk about costs, I also talk about automating.
Kind of automating stuff in system and teising stuff because what that does when when you’re automating something, when you’re systematizing something you can predict the cost of that.
I know how much ZAP you’re going to cost me a month.
I know if I do this many automations and I pay this, you know what it’s.
Going to cost me.
What you if I’m just doing stuff out of the blue and I’m like, you know what?
Maybe I’ll do that.
You know, maybe I’ll pay something to do that.
You know, maybe it’ll take an hour, maybe it’ll take five hours.
You just you never know.
And you can’t predict costs that way well.
But when you automate something?
When you systematize.
Something you pretty much know 95% of the time exactly to the penny, what that’s going to cost you.
And then and like I said, once you know your cost, you’re able to price so much more efficiently and then when you’re able to price so much more efficiently, you’re able to profit so much better.
When you have it a profit so much better, you’re able to take care of your employees.
More get more customers ’cause you have a marketing budget, you’re able to do more things in your personal life, you’re able to support more of the organizations and causes you care about.
It’s just it all snowballed.
And it all starts with that cost and like I said and at the foundational level one of his system of systematizing auto automate.
So I think it’s a financial topic and I love it.
That, listeners, is the 100% gold in this whole podcast and if you get anything out of whatever now you’re talking about.
Go listen to that section again, because that’s like, jackpot.
I’ll share with you something I was doing 2 weeks ago.
I sat down on a Saturday.
And I pulled all the sass costs I had from my agency and I do this with clients and I haven’t done this for myself in a while and I said what am I using and what can I get rid of?
And I took all this costs in the spreadsheets and said, oh, this brings this value, this brings this value.
This I can do with this by the time I was done.
NAV I saved myself $1000 USA month.
I think it’s something.
Yeah, I know, right?
That agencies don’t look at very often.
They just put costs on their credit card to forget about.
Them, and they let him go.
So I will have a worksheet on my website is free, you could download.
It’s called the expense killer.
And you think somebody like me who teaches all this but you, you might think, oh, I understand this stuff, I’m on top of that stuff.
I don’t have to worry about that.
Kind of stuff.
I don’t have to do that, I.
Like my my company, OK.
I when I had multiple companies too, I use this worksheet every six months because here’s the thing, things always have a tendency of creeping in.
So I mean, I know this stuff.
I preached itself, I talked to stuff everyday I teach this stuff and I still use this worksheet because things will creep in.
And I, I’ve, I’ve, I’ve heard, yeah, $1000 a month. I’ve heard that. And when I say that to people, they’re like, no nonsense. I can’t. I I mean, I might have $20.00 a month and then that. People always have.
Like I would say 5 to 10 times more than they think that they could safe because it’s one of the one of the good things about my worksheet too is, and we’ve talked about this, is light is like services.
It’s like it says when you walk.
When you walk through his work, she just says to you like you.
You list out all your expenses and you walk through a couple questions.
Is there anything that you are already paying for?
That will that duplicates this service, because here’s the thing, we have this idea that we need the biggest and the best in its productivity.
And the the best software is going to make us perform better and it’s going to save us money for because time is money and everything like that.
Well, that’s true, but only to a point, like if you have.
If click has time manage.
And and I don’t use click up on it so I don’t know how great your time management is.
But if it does and but and you pay for toggle and click up, maybe you just use the time management and click.
You know, maybe you don’t need toggle so Google Drive?
Maybe you have a Microsoft Office subscription?
I mean, office is so much better than Google Docs.
But Google Docs is free.
If you have your e-mail with Gmail, with G suite or whatever, they’re calling it this month.
So there’s all those services that are just, you know, that that we’re duplicating, that we’re paying again and you know, it all adds up. So how do you get to $1000 a month you get?
It’s, you know, $1000 services or you, you get what I’m saying?
Yeah, and and I’ll give you an example of that.
With this podcast.
I do transcription.
I do transcriptions, so I do a transcription of every podcast.
And I used to pay for transcription service.
I used to use orderdate, which I love, but here’s the thing.
Microsoft Office on the online version if you pay for office.
Gives you so many hours of transcription service for free a month.
All you do is upload the file and it spits it out for you.
The minute I figured.
I did not know that.
That out yet?
The Otter dot AI subscription went goodbye.
And I happen to have because I have a family version of Office.
I happen to have two accounts, so both 2 accounts actually get me through what I need on a monthly basis, and it’s cheaper than paying Otter dot AI on a monthly.
And that’s the things you need to look at.
Like are you are you paying for multiple services and and I I’m not advocating don’t pay for stuff, but does the free tier do you enough to get you what you need, especially if you’re starting out like?
Do you need that or do you need something more advanced?
And I’m saying, like, honestly, if you don’t need that, don’t pay for like things like that and look.
Am I better off paying monthly than paying yearly?
I have some stuff I pay monthly for just because I want to be in a position that if I want to turn it off, I can.
And save the money come is it worth paying the extra money yearly?
Is it that much of a discount?
Do I have the money now?
Is the money better off being spent somewhere else now?
Right. Things like that.
So when you hear me talk about cost, cost, cost, yeah, and you made it excellent point.
I want to, I want to bring this up.
When you hear me talk about cost, cost, cost, you think, oh, there’s the finance guy just saying lower cost?
I’m not saying lower cost because you could.
I’m saying costs are good.
You know, we need costs.
Costs are how we we if we leverage.
Our costs to make a higher profit, we just need good costs.
There’s a ton of good services out there that your business needs.
There’s a ton of good employees that your business needs.
There’s a ton of good, like marketing expenses.
A little harder to say.
You know, attribution is like that Unicorn out there.
You know, where did it really come from?
But, you know, there’s a ton of things we have to spend money.
I’m a I’m a huge proponent of spending money and I’m a finance person.
I’m not, I’m not saying don’t spend money as you know, because that’s very limited that that’s.
That’s, that’s a, that’s a very limited way of thinking.
I’m more of a blue ocean.
Like there’s like and I forget the term I’m looking for, but it’s just, you know, there there’s a world of possibility out there we just got to take care of.
But we just got to go after it, you know?
And to go after it, we need the tools to go after it.
But I’m just saying, spend your money wisely.
So spend spend as much money as you need to spend, but just be sure it’s being spent wisely, you know?
And sit down and if you’re starting an agency or you’re into an agency to do a budget like do you again, it comes back to do you really know what you’re spending on fixed and variable and project costs in your business I.
So I’m sorry.
No, it’s OK.
Most people don’t know.
Yeah, and here’s the thing about budget and here’s the reason people resist budgets.
So because budgets are restrictive, they’re we started our like business.
We work for ourselves ’cause.
We don’t like to be told what to do.
I don’t like somebody telling me what I what I have to do.
You know, all of the time.
I actually like it when, you know, people say.
Hey now this really needs to get done ’cause.
I could be a.
Nonfocused so, but this is what’s really important.
But in general I don’t want people saying I can or can’t do something.
And you know, as entrepreneurs, we’re, we’re, we’re, we’re vastly more feel strongly about that.
So and and that’s why we resist budgets, because we want the freedom and the flexibility to do what the hell we want to do when the hell we want to do it.
And that’s where we started our business.
And, uh, but here’s the thing.
I say budgets, especially the way I showed a budget is it’s very empowering.
It very much lets you achieve your goals.
In my view of a budget, it says like you design a budget around what you want, not around what costs you’re cutting it.
It’s to enable you to achieve what you really want to achieve ’cause what happens.
Is, you know, like the things that we really want in life, they cost more.
And and so if we’re wasting money, like every day, a little bit like, you want to know how to how to waste $10,000, spend $27.00 a day.
Zero, because 20 like if you spend $27.00 a day, you will spend 10,000 in a year.
Zero, if you budget correctly, if you have a budget that’s focused on, that’s giving every dollar that you have a job, that’s saying, OK, I want you to, I want you to do this for me.
And then you could look at your and then if you want to send something different, you want to send something more and then you have something to weigh it against, you could go back to your budget and say, OK, I want to buy this new.
Thing what in my budget do I need to get rid of?
And you’re like, I don’t want to get rid of anything in my budget, then that thing is not a priority.
But if it’s something you want to buy and you’re like, OK, OK, I can maybe cut this back a little bit and I could cut this back a little bit.
Or if it’s something you really want to save for, put that into your budget, put the.
Savings for that into your budget and then you know you want to buy New Max studios for the team and it’s going to be 15,000.
And then when when an expense comes up, you know, you could look at that and say, I have the money to buy it, but it will put my purchase of those MacBook Studios off three more months.
Is it worth kicking those MacBook studios down the road?
And you could say to yourself, hell no.
I don’t want this, you know?
Like it could be like a new fancy new office chair, you know?
It’s like, I’d rather have the MacBook studio than a than a fancy new office chair, you know?
So then and then you’re you’re giving it something to weigh it against its comparative.
What do you think is the number One Financial problem that agencies have?
So I think.
Rich on this.
Here so I’m going to go.
I’m going to step it up a little.
Level big picture wise.
Because there is the.
Individual agencies have different problems, OK, but the big problem that all agencies have is lack of clarity into the operations of their business.
Because, you know, nobody wants to look at financial statements.
You know, I don’t want to look at, like, these big, long, confusing financial savings, and I actually enjoy that stuff, but they’re just because you’re trying to find a needle in a haystack.
So I mean, whether it’s pricing, your problem, costs your problem, it’s like revenues, your problem, sales, your problem.
You know, at different points in an agency life, they’re all going to be the biggest problem they have.
But how do we know what the biggest problem is and what we need to focus on without spending tons of time?
And that’s where I like.
I’m a big proponent of having kepis key performance indicators like numbers that we could look at.
That tell us, hey, things are going smoothly.
Hey, this might be a problem.
This probably needs to be.
Into and with something like that you have five of them.
You look at them, you know, a couple of times a week.
You know for 5 minutes.
And then you say to yourself, hey, everything is running smoothly.
I don’t have to worry about anything, you know, or hey, there’s a red flag here that I might need to dig into and that’s how and that’s how you run a business.
Because it’s like you’re running the business by knowing, by heading off the problems before they happen.
So if that makes any.
Sense and and finances is an ongoing look at not as set it and forget it, which I think a lot of people do and make that mistake so.
Or, but I mean you could have, you could have kepis like I was just working with a client last week and we, we we came up with actually kepis.
For his whole business, for for everything that’s happened in his business, he he really gets out on this stuff.
So we really went went in depth.
I don’t suggest everybody do this, but he wanted to this like dashboard.
That he could look at and just be able to pinpoint where every, every bit of his business is ’cause what we’re working with him is.
He wants to work himself out of his business.
He wants to, he wants to run his business from a very high level indoor and if that he needs, he needs extreme clarity into what his team is doing.
And so that’s working.
But for for the average person, it’s like, you know you like, we want to, we want to know about problems and be able to solve them before they become problems.
No, I don’t.
So we want to be more proactive so in solving the problems ’cause I’m telling you like.
You’re always going to have a variety of different problems in your in your agency, and you just want to know before they become you know, before you know.
You want to know that you have cancer.
That’s why you get a screening before you know you know you have cancer.
Yep, I I would agree.
That might be a Princess of analogy.
If it is, I apologize.
No, no, no.
I I would agree wholeheartedly with that philosophy from this discussion has been amazing.
I’m sure it’s gonna give some people some food for thought if somebody wants to get ahold, Neil wants to work with you and have what’s the best way?
Uh, you could reach out to me on Twitter at the @nevharris LinkedIn and I I think like just search for Nev Harris or my website https://www.nevharris.com/ we could contact there.
I would say those.
Those would be the three best ways.
If you want to hear me ramble about all sorts of crazy stuff, I have a podcast too.
Profit and impact.
Yep, and and check it out, because anything NAV does is worth its weight in gold.
And thanks for your time now.
Yeah, should be fun.