The Profit Playbook: Strategies for Entrepreneurs to Enhance Financial Literacy

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Narrator: Welcome to the Ask Brian podcast radio show, where you'll hear from some of the most successful founders and CEOs of businesses and startups, sharing their best advice for success, and even some stories on how their mistakes actually make them even more successful. Now, here are your hosts, Brian and Tracy.

e Ask Brian radio show on KHS: 1220

That's the [00:01:00] nature of the show. Sometimes we'll have somebody who has started a company and went from A to Z, they scaled it, they made it successful. Why because we're trying to teach you on these lessons that you learn how to become a successful Business owner even if you are successful become more successful than you are tracy People want to know why s brian is spelled with an e and you are the resident expert.

Hold

.: on

Peter Bronstein: Okay

Traci DeForge: We are all about the analog today, that's what we are. Well, that's what we are today all about the analog Well, navigating all of the seriously technically challenging aspects of our show today, we are absolutely starting out our first E with our engineer Jen, so we can't use our sound effects, so I'm just going to go, yay!

Michelle Williams: Thank you, Tracy.

Traci DeForge: Oh, my gosh. [: 00:02:00

And so any entrepreneur capital E wants to be listening today because profit is really at the end of the day what it is all about for the most part. And our experts are part of our Really good core commitment to education And we always feel like that an investment to be an expert is, you know working Let's say 40 hours a week 50 ish weeks a year How long is

Peter Bronstein: ish

any vacation, but I know you [: 00:03:00

Peter Bronstein: I don't take a vacation except once every two weeks

Traci DeForge: Yeah, exactly.

Exactly. As opposed to the standard two weeks that others do. Well, but if you're an entrepreneur, the whole idea is freedom and flexibility, right? But when you're a startup, that's the challenge. Anyway, our expert today will be able to shed a lot of light on that because she works with a lot of creative entrepreneurs as well.

So we, we want to get all creative about how to make money and how to be flexible and have our freedom, but none of those start with ease. So I'm just going to say, aren't you enthusiastic about our studio setup today, Peter?

Peter Bronstein: I'm not enthusiastic, but I am EXCITED!

Traci DeForge: Okay, but Jen, I just want you to know I have a tremendous amount of empathy for you right now.

Michelle Williams: Thank you. I appreciate it. I need that. I'll take any little bit I can get.

What about all the noise on [: 00:04:00

Traci DeForge: Yeah, our eardrums are always compromised. Yes, they're always compromised.

And Jen doesn't have her normal techniques to be able to stop the blow, so just strap in everybody.

Peter Bronstein: Yeah, I can't really, I just have to deal with it. She's looking for that mute button, but she can't find it.

Traci DeForge: Yeah, so last week you shared with the world that you watched the movie Grease, which was always a teaser for my most favorite E.

Right. So I think I'll just go ahead and put it out there that

Peter Bronstein: did you, I didn't think we're that far along, but okay.

Traci DeForge: Yes, we are. We did as entrepreneur education, empathy, exciting. What is empathy? What is empathy? Exactly my point.

Peter Bronstein: The E in exactly is empathy. What?

Traci DeForge: No, we exactly need to get to our interview.

It's what we need to do. As electrifying as all of this is for everyone.

ht that's very enlightening. [: 00:05:00

Traci DeForge: It is and so are we so let's let's get to it

Peter Bronstein: All right now if she hasn't left because she said I don't know how I got in it I don't know why these people here and this was not my idea of an interview, but are you still there michelle?

Michelle Williams: I am i'm doing here grinning from ear to ear a lot Listening to this.

Peter Bronstein: Well, we do try to add a little fun to it because it is Boring business. Sometimes some people tell me, but I'm not boring. Neither is it, Tracy, and neither are you. So first question is, so what was your background before you started this business that you.

Michelle Williams: Yeah. So my first job, my first real job, we'll call it that way. I had plenty of jobs as I was growing up, but my first real job out of college, I worked for Dun Bradstreet software and built financial software. So accounts payable, general ledger, purchasing inventory, and. We did all of the backend financials.

roids. It was mainframe back [: 00:06:00

Peter Bronstein: Mainframe, wow, that is old.

Michelle Williams: Yeah, yeah, I just aged myself. But that was what I did for 10 years and then I came home. Who's raised my kids and started my own company doing soft furnishings, meaning light interior design, custom window treatments, all of those things.

And the long and short of it is I realized that a lot of people that were in the creative industries with me. They had no idea how much money they were making. They did. I kept asking, where's the ceiling coming from corporate? I knew where my ceiling was or where I was told that it was. I knew what a career path looks like.

s is probably around the year: 2000

And what I found out was [00:07:00] they didn't know the answer because they were not looking at the business that way. They were more looking at do I have enough money if you will cash to run the day to day looking in their bank account and they really weren't thinking of longevity. And, you know, what can this be not the.

ners and so I started back in: 2003

I started going in and going, hey, here's how these numbers work. Here's how you put this together. Here's how you create a strategic plan and a financial plan. And started a podcast called Profit is a Choice, meaning we get to choose to be profitable with the actions that we take. And then all of that parlayed into, uh, building of MITREAP Solutions, which is the financial dashboard that allows business owners to be able to see at a moment's notice what their financial status looks like and to [00:08:00] do modeling and planning so that they can take it where they want to go.

Peter Bronstein: So, what you currently have, is that a, a software program?

Michelle Williams: It is. It's a SAS based solution, so it's a subscription based software service, and it is online.

Peter Bronstein: Well, and it's in the cloud.

Michelle Williams: Yes, it is.

Peter Bronstein: Well, sometimes people think I'm in the cloud. All right, so Now the weather

Michelle Williams: is great up here,

Peter Bronstein: I don't know it's too overcast for me So is your background in coding and then you morphed into this or was your background in some other area?

Michelle Williams: Yeah, well, so in that 1st job with Dun Bradstreet, we built financial applications on mainframes and then in a client server model as that came out later in the 90s. And so my background is management of information systems. So I did light coding. I didn't code the program that I currently have. I hired developers to do that.

n software development and I [: 00:09:00

Peter Bronstein: Well, I stopped at the four next loop in high school. So that's as far as I got. So I don't know much, COBOL and others, Fortran and stuff like that. Anyway, so let's skip to, you created this software.

How in the world, to me, it takes a lot of development time to create software. So you have to be, you know, have free time, right? And then after you create it, then you got to figure out how you're going to get clients. Well, that to me, I was starting a software company. That's where I would be concerned. I mean, the best part about software though, is you make it once.

And yes, you do have to do constant updates. You know, and updates for different software and constantly. But once you get that done, the main part of it done, you know, you can sell, you know, 10, 000, a million copies of it pretty quickly. So the question is, how in the world does somebody, you know, have this idea?

And then. Make it into a product and service.

her little piece for you. So [: 00:10:00

And in that I was building spreadsheet after spreadsheet after spreadsheet to solve the problems that people were having to understand their financials. So if you will, to take QuickBooks to take that flat. Profit and loss statement and turn it into something visually that they could understand and building models.

So, when I decided to start this, I did not initially think I will start a software company. What I hired somebody to do was to take all of my spreadsheets and put them together into a dashboard. So, we started, because I still do coaching and consulting, by doing all of this nights and weekends, like anybody with a second side hustle, and trying to put it together, you know, by combining them.

for me to be able to manage [: 00:11:00

But then Excel and he was like, hey, I've got some buddies that would love to come in and help us do this. And so we kind of put together just a small team developers. People that had always said, I'd love to build a software company. I wish I worked at and so we started building and it's taken multiple years to do that.

And so now I have two companies that I'm running and I have teams on each side and I think, honestly, to answer your question, if I had thought about what it was going to take to market it and get it out there and do all that, it probably would have stopped me before I started, but I was so intent on solving the problem.

have like, when can I hire? [: 00:12:00

You know, what is my overhead rate? Am I charging enough and billing enough and all of the questions that we're asking to try to be profitable, especially in a changing climate. All right. They didn't have those answers and they didn't have anywhere quickly that they could get them. I was so focused on trying to solve that problem that I really didn't think about how to market it and how to get it out there.

That was secondary.

Peter Bronstein: So, operationally, every business is different, right? I'm an attorney, okay? You're in the coaching business. Tracy's in the podcasting business. You know, people are in different businesses. Sometimes they run a store. A friend of mine has a, uh, a retail store. I mean, the margins and then, and the numbers are going to be changing from business to business.

just coming up with a basic [: 00:13:00

How do you come up with these formulations that you're incorporating into yourself?

Michelle Williams: Oh, great question. So, what we have done is, first of all, is we tell them the percentages they're already running. So, when they load their profit and loss statement or their balance statement, we can do the general calculations, the ones that normally we should be doing anyway.

What is my gross profit percentage? What are my cost of goods as a percent of income? Or where is my marketing as a percentage of? Growth profit or whatever that they're looking for. We can take their data and automatically do all those calculations and say, here's where you are. Then what we do is we give them a modeling tool that says, here's where you are.

are similar, but across the [: 00:14:00

We tell people, yeah, we want to be between 40 and 60 percent gross profit margin. But every business is a little different, so we have tried to give the flexibility that every business can look at what they're currently doing and then set the goal of what they want to do. And then measure to that their own personal goals.

Peter Bronstein: And even within profit margins and even within the same group, it can be different, right? For instance, if I have my store in, uh, in Benville, Montana or Benville, Wyoming, right? That's going to be different than if I have it in Manhattan or Los Angeles. Because obviously the rent's going to be higher. The volume of people coming through are going to be higher.

And there's going to be a lot more competition. So maybe. The margins have to be different, even though it's the same exact business.

ng and the cost of all these [: 00:15:00

That are happening around us is really something that makes a big difference. And if we're not watching it, we can sell a product at the same price today that we sold it. I don't know, even 6 months or a year ago and we're losing money where a year ago we were making money.

Peter Bronstein: So is this a, uh, like a, a custom planner that you're using on a daily basis if you're running a business or you run everything through this platform?

Michelle Williams: No, it actually is an adjunct to like your QuickBooks software or your other financial software, uh, your accounting software. So we are helping you take and use that information. I would say that most businesses are probably using it either weekly or monthly. Okay. But not necessarily daily.

Peter Bronstein: Now, do you need to be an accountant or a financial analyst to understand this?

for a balance sheet and they [: 00:16:00

Michelle Williams: Yeah, you don't have to do that. We have so much education that if you come in just saying, I want to understand the numbers, we certainly work with accountants and bookkeepers and financial, you know, CFOs and that type, but we have plenty that are business owners who really just want to wrap their arms around the business and fully understand it.

We have built an education with videos and we also do webinars. Our goal is to give them every opportunity to learn it as possible.

Peter Bronstein: That sounds like a great thing. What was the biggest challenge in starting this business?

Michelle Williams: Uh, money. That was pretty

Peter Bronstein: quick.

Michelle Williams: Well, software development and software talent is very expensive and I'm self funded.

So it, it, that was the biggest challenge is where's the money coming from to get this thing off the ground.

Peter Bronstein: Well, actually, I think that getting the money is part. I think hiring the right people is probably just as important. Oh,

Michelle Williams: absolutely.

o important and so relatable [: 00:17:00

And that is that money was 1 of the biggest challenges that you face. And then, in addition to that, also how building the right team is such an important ingredient and. The success of scaling a business, but that also takes money. So my question is, how did you know when to start expanding on your team?

And with your own personal experience, but also how you're coaching your clients. How do they solve that whole chicken and egg? I need money, but I need to hire somebody. I need to hire somebody, but I need money that whole circular challenge.

Michelle Williams: Yeah, I would say that for my business, it was a little different, and I'll, I'll tell you why.

nt than maybe I would advise [: 00:18:00

One, if we're talking about the software company there, I had to take money and put into it. I had to make an investment. I knew very quickly that I could not do the work by myself. I could come up with the ideas. I had the spreadsheets. I could do all of that work, but I wasn't able to code it. So that meant that I was going to have to scale the portion of hiring very, very quickly.

ight person, especially in a [: 00:19:00

And so a lot of times I'll tell them. Save three months of salary for the person that you want to hire, so that when you hire them, you have enough time to onboard them, ramp them up, and get them ready to do the job that they need to do before they are starting to make money back for the company, whether it's based on time or based on their ability to go produce sales, right?

So, one of them is you're really kind of investing that time in a very short window to get somebody up to speed. The other thing that I would say, Casey, is if you are trying to scale more quickly, you really have to pay for higher level talent. You've got to pay for people that can come in and pretty much hit the floor running.

It'll cost you a little bit [: 00:20:00

Traci DeForge: I think all those are such important points.

And I think, too, what I'm also hearing you really clearly point out is that maybe the priority and the emphasis should be on the business development piece first, rather than maybe bookkeeping or social media strategist or admin. Is that an accurate takeaway from what you're saying in terms of, like, prioritizing who to hire first?

st business that I started in: 2000

Well, I learned those lessons back in 2000. And so for both of the business that I have right now. Even my podcast, [00:21:00] I sat down and did the whole, what is the why am I doing this? What is the mission, the vision? What are the values, the non negotiables? What are we trying to attain? Who is our ideal client? I did all of that work up front from my coaching consulting business, from my podcast and then for the software so that I had an idea of what we were trying to accomplish.

And then I hired people who agreed with what we were trying to accomplish, issues on personal. Why, and values aligned with what we were doing. Once I got that in place, then I can start hiring kind of those ancillary, you know, I need somebody to take some admin off my plate, or I need the bookkeeper to help me over here, but I didn't, you don't always have the time, effort, or money to onboard every single person at one time, so I had to get something moving forward.

e, set it and forget it. But [: 00:22:00

Michelle Williams: Yeah, we go back to every quarter and revamp it, and then I recommend that they take the high level goals and strategy, even just the vision or the why, and write it down and keep it in front of them and their team, going over it consistently, so that everybody in the company, that is, especially in smaller teams, everybody knows what they're doing, why they're doing it, and how their job fits in, and so it's meant to be a playbook.

It's meant to give direction, but it's not necessarily meant to be exact. So, we do update it often, but I use that strategic plan to make the marketing plan to make the financial plan. So that everything works together.

Traci DeForge: I was going to go into the direction of, you mentioned not only just the plan from a business development perspective, but also marketing strategy.

at was the driver behind you [: 00:23:00

Michelle Williams: strategy? Yeah. Oh, so good. So my podcast pretty much is my marketing, a huge piece of my marketing, the way that it came about, I want to say I was thinking about doing a podcast in 2016.

ouple of years, I sat down in: 2018

And the thing that prompted me to do it is I had been doing a lot of traveling. Teaching and it's exhausting to constantly be on the road teaching and going in and out of new places. I had, my sons were graduating high school and I really wanted to be around a little bit more instead of gone. And I thought, you know what, if I could [00:24:00] get on a podcast and just honestly teach for free, if I could just get up and either meet you free, similar to what you're doing right here with this radio show, bringing in other experts, talk about things that people care about and really just push the idea that the choices that we make in our business every day Lead us closer to profitability or further away.

And that's what prompted me to sit down and just get that started. And it fits in because it is part of the marketing arm for everything that we're doing.

Traci DeForge: And how are your feelings in terms of, like, one of the things that I talk a lot about with people who are using podcasts as a marketing tool is how efficient it becomes as a content repurposing tool.

So, are you using your podcast as you record your episodes and release them out for marketing? Are you also using it to repurpose and generate other pieces of content? And how are you doing?

ifferent teams that do that. [: 00:25:00

We, uh, have a team that uses that content and they create Instagram posts and stories and reels and all the things that we need overlays. We use that information when we're writing our lead in. So we are pulling from it and we have everything as a, I'm going to call it a light blog, meaning a transcript.

We have it audio. We have it blasted everywhere. We also put it out on YouTube. So we're taking it and reusing it, repurposing it for content in so many directions. It's really, really helpful to do that. We're even taking a couple of different podcasts and pulling information from them and we've created lead magnets with it, right?

s that it's like you want to [: 00:26:00

Here go listen to all of these 25 hours of easy listening and get your coaching answers.

Traci DeForge: Oh, that's such a smart idea. And you could also convert that into a playlist on Spotify. And I mean, you might already be doing that on YouTube, but that would be a really easy way for people to access that pretty easily and it would play automatically for them.

So I love that you're using your podcast in so many innovative ways. What other marketing, and so you were saying your podcast is your marketing, so I'm curious in terms of whether you use it for your own business or in your coaching and consulting. What are your feelings around paid ads right now? And what are, what are you seeing if you or your clients are utilizing this?

What are you seeing working for yourself or for them?

anywhere. I've been able to. [: 00:27:00

Some of my clients have used paid ads, but paid ads is so interesting, especially if you're looking on social media, they're so different now than they were when they started. It's like, once you crack the code, you have to recrack the code because the algorithm changes. So many of them that have found success with that, it's because they're using companies or using groups that are staying on top of all the changes that are happening, right?

And then it's having that really clear indication of what do I want this sponsored ad to do? Am I just trying to have a reach? Am I trying to get them to engage in some way? Am I trying to get them to buy right now? And what we've seen is the ads that people get to really work are because they're going in with a strategy and they're monitoring it and they're doing A.

ll that, I would say ads are [: 00:28:00

Traci DeForge: And just in terms of just when you're saying shifting and pivoting away from marketing right now and just thinking about the economy, the industry, especially with creative service professionals right now, how are you coaching them through some of these challenging economic times?

What are some of the pieces of advice you're giving service professionals right now?

Michelle Williams: So some of the first things are to be aware of your cash position. So I think it's always important for any business type, creative, you know, whether we're selling a, you know, just a blind or, you know, a shade, whatever it is, it doesn't have to just be creative.

, we can be called off guard.[: 00:29:00

Like I've had some people that spent so much money on their marketing, but they were never checking to see if the return on the investment was there. And so then what happened was they spent the, back to the earlier discussion, I think when Peter was asking me about percentages, they spent the recommended percentage on their marketing, but they never checked to see that the results were in alignment with that spend.

And so they ended up getting in trouble. So it's really about. Knowing where you are and knowing what can change it very quickly and being able to adjust

Traci DeForge: Michelle. I just want to say, like, you have shared so many insightful perspectives with us. Not only just in terms of how you built and scaled your business, but I also love that.

You've been able to really showcase your consulting expertise and how you've been coaching your clients. So thank you so much for that. My guess is there's a lot of entrepreneurs listening, especially creative service professionals who are going to want to continue this conversation with you. What is the best way for them to get in touch?

so the websites that you can [: 00:30:00

And then you can also find me as Michelle Williams hanging out on LinkedIn. for sharing. I love that. And you heard it all here,

Traci DeForge: folks. But if you didn't get it all, then you can catch it on the podcast. Speaking of repurposing content in a very efficient way. So, check out the Ask Brian podcast. That's A S K B R I E N.

Wherever you find your favorite podcast. And then while you're at it, also check out profit as a choice podcast too, because I happen to have been a guest on that show and it is an amazing podcast. So now you have two new podcasts to add to your podcast feed. Peter.

Peter Bronstein: Well, hold [: 00:31:00

Traci DeForge: and a yay.

Peter Bronstein: All right. Thank you very much, Tracy. So we only have a few minutes left. My question is if I have a business, okay, what's the first step I'm going to do? I'm going to call you up. We're going to do a, an exploratory call. You're going to find out something probably on the coaching side, and then you're going to, what, set me up with the software.

How am I going to set up the parameters for the software?

Michelle Williams: Great, great question. So the way that it usually works is if somebody were to just call me directly and. Hey, I want to talk to you about coaching. You're exactly right. We would do a discovery call or an exploratory call, kind of find out what their needs are.

t for the accountant and the [: 00:32:00

In some cases, if a potential client called and said, I really need help. I want to talk about my industry. I want to talk about what I'm doing, where it is, then we would move more into a coaching consulting. And then we certainly would help you set up solutions. If it was the best answer for your business.

You know, it always comes down to again, because we're going back to the profit as a choice. Our goal is to help people become profitable. And so we're only going to make suggestions for solutions that are truly going to be successful. able to help them in the way that they need to be helped.

Peter Bronstein: How easy is it to use your software?

Michelle Williams: Well, I think it's really easy, but I'm also the one who built it. We have a quick start guide which walks you through and we have pictures of every single thing with every field notated on what to do in that field and how to use it. We have monthly webinars and we have an entire library of webinar information that you can watch.

We [: 00:33:00

And we gave them our quick start guide. They have no background in business, and they have no background in accounting, and they could sit down and do everything that we ask them to do by following the quick start guide in the videos that we have. So I kind of feel like if we can have some high schoolers and early college kids.

Jump in and do it then certainly the business owners have every ability to do that.

Peter Bronstein: Well, thank you very much Unfortunately, we're out of time. Thank you very much for listening to the aspirin radio show on khs 12 20 and 98. 1 fm Over and out.

ing into the Ask Brian Radio [: 00:34:00

That's ask b r i e n. com.