Steve Wells: [00:00:00] This is Steve Wells
Jeffrey Feldberg: [00:00:01] And I'm Jeffrey Feldberg. Welcome to the Sell My Business Podcast.
Steve Wells: [00:00:07] This podcast is brought to you by Deep Wealth. Are you a business owner who is wondering how to either grow your business, sell it, or both? Or maybe in today's environment, you're wondering how to make your business pandemic proof.
Visit deepwealth.com to find out how you can master the strategies to grow and extract the deep wealth from your business. Visit www.deepwealth.com.
Jeffrey Feldberg: [00:00:30] Well, Steve, today we have Don Gleason who's with us. Don has an extensive background in strategic planning, sales management, marketing, and the customer experience.
As a consultant for nearly two decades, Don has been helping businesses launch, turn around, or achieve exponential growth. And as a hands-on executive, Don leads the CEO and management team through a critical path that focuses on launching products, improving cash through high accountability metrics and the disciplines of execution.
Steve Wells: [00:01:05] Well, thank you, Don. You know, you and I have known each other for a long time, but for the benefit of the audience, it'd be nice if you just gave us a little background of what you've been doing over the many, many years that you've been involved in business.
Don Gleason: [00:01:20] Thanks Steve. It's great to be with you guys today.
I've spent a really, the last 15 years doing many, many business turnarounds or business improvement, and I've been doing that and helping people increase the value of their companies, whether it's to cash out later or just to close the gap that we're going to talk about a little bit today. My background is 25 years in hospitality and a little bit more in travel.
I was a director of international marketing sales for Disney for several years. I was president of a division of Universal Studios and then worked with Virgin, some other companies and things like that, and I used to own a bunch of travel agencies before the Internet wiped everything out. I sold everything in 1989 and I didn't even know the internet was coming.
So blind, dumb luck. That's a little of the background. What I'm most passionate about is helping businesses and owners and senior management teams grow their business and really improve it and find the ways to help them realize that actually in cash and prove it that way.
Steve Wells: [00:02:24] As we do this recording, we're in the middle of this crisis and there's all kinds of businesses that are having a lot of problems.
So, what can businesses do right now to not just survive, but maybe even thrive?
Don Gleason: [00:02:38] That's a question that is top of mind for many business owners. Most of them have probably taken the basic steps to reduce their cash burn. And they're burn rate because cashflow is probably either anemic right now depending on the business or actually non-existent.
So that's the first thing is to reduce that down as much as you can. But importantly, not everybody has even jumped in yet, because it sounded complicated. Even if you're cash flush, you know you've got plenty in the bank and you're doing okay. Go for the Cares Act funding.
It's really important. The last glance when I looked there was about 94,000 banks participating and that there's really two parts to this to consider. The first one is you can get a loan. A business can get a loan up to $2 million with an immediate $25,000 in less than five days. It's going through SBA, but because of the massive applications that might take a little longer. I talked to a client yesterday, and he applied on a Friday and by Wednesday he had $110,000 in the bank.
There's a second part that's called the payroll protection plan. You can't do both. You have to choose which way you want to go. And this is. Meant to cover about six weeks of rent, utilities, debt, or payroll, and it's limited.
You can't pay people more than a hundred thousand a year, so there's a cap on that. But if you were in operation on February 15th and whether you're a small business or a nonprofit defined as less than 500 employees, you can get your payroll covered. And apply for this, payroll protection plan so you can pay your staff and keep operating that kind of thing.
The max loan on, that's about $10 million or about two and a half time. The, the borrower's payroll and benefits. So, there's no SBA fees. And what's really important on this, if you use it the way and you document it correctly, there's a forgiveness on this and you don't have to pay it back, which is crazy that people aren't taking advantage of this.
So, if you're not doing that, do that immediately and you can do it through the bank you work with would help you walk through it.
Jeffrey Feldberg: [00:04:43] Speaking of timing, whether it's a pandemic like we have right now with the coronavirus. Or just a blind spot that you didn't have. I mean, you mentioned that you never saw the internet coming, but you, you sold your company just before that massive disruption came. So, from pandemics to disruption in, in general, best practices is best practice.
What would you prescribe as next steps of not just how to survive, but to thrive?
Don Gleason: [00:05:13] Well, if you take a look at your business, it might be time for reinvention instead of just doing business the same way we always have Ted Ladd in Forbes was talking about this reinvention. It doesn't have to be drastic. It could subtle, but he recommends an exercise and it's called deconstruction, and it's where you take a look at it all the nine elements that are common to most businesses and look at each segment and see what you could do to make some changes, and we'll talk about these just briefly. You've got customer segments, right? Value proposition. What does your business offer? You've got channel management, how the products and services are delivered through what channels, your customer relationship, key activities that you're doing.
You've got resources, partners, revenues, costs. The next step of this is once you kind of line those up is to get your team together. Resources, other colleagues and maybe friends, and think about how each of these operates and what can you do to either improve, eliminate or pivot from. And a lot of times when you're doing these things, we leave out the frontline staff.
Disney is a master at using that frontline staff, whether it's desk clerks or people on the frontline and the parks to make business improvements. I mean, they've saved $3 million by just talking to the people that are on the frontline. So, make sure you include them when you do this deconstruction.
Steve Wells: [00:06:42] So Don, we've been talking to a lot of people and we've been using the word, and not everyone has been using it, but you know, pivot and change. I mean, so many companies are going to have to really change the way they look at it. How would you define pivoting and change?
I mean, what does that mean to you and your experience?
Don Gleason: [00:06:58] Well, I define a pivot as a change in strategy, not necessarily a change in vision. So, if your vision is to deliver X to this ideal client profile and do it in a performance excellence way and deliver quality and service into, into whatever sector.
You're not changing that vision. It's just going to, the pivot means that how you deliver it or the way you do, or you, create an alternate line, like a line extension. So, this isn't a time to stop. The crazy thing is with this Corona virus and everything, I talked to several people and if their business is shut down or slowed down so much. They kind of stop and this is the time to develop new strategies for marketing and delivering your products and services.
Steve Wells: [00:07:47] What would a pivot look like for a restaurant?
Don Gleason: [00:07:49] Well, it's interesting. In today's world, a pivot could be, you know, something for a restaurant, which is very physical location, high fixed costs, et cetera, and they need throughput.
So, you should ask the question, what part of my business can go virtual. And in a restaurant, how do you go virtual? Well, you can do that from marketing, but the product has to actually, you know, there has to be a product delivery, right?
But in a virtual world, content is king. I mean, I learned from Michael Eisner a long time ago when he took over Disney, he saw the value in what he called the vault. And he rereleased regular limited releases of Disney movies while simultaneously creating new animated features. And that started with the whole animation reinvigoration with The Little Mermaid.
So, when we're talking about restaurants, what does that look like? Well, besides the obvious take out service where everybody's now preparing the meals and having people drive up, pick it up, take it out. There may be other creative ways to innovate. So, we're talking about content, right? Does a restaurant have a great chef or a really good culinary team, or maybe even a baking team that's making cupcakes and desserts that are just phenomenal?
Are there menu dishes outstanding for the restaurant for crave able. That means, you know, when you go to a restaurant, you almost always order the same thing. Because I just love brisket from Four Rivers. You know? That's my favorite. I just always get the same thing because I just crave that. So, here's an idea.
Why not video the chefs doing a step-by-step meal prep for their top 20 dishes. They can put the content on line and sell it for a reasonable price. Everybody's cooking at home. And by the way, some of us don't cook very well and aren't really sure how to do that. So, I have a question though. Why is it that $19.95 is always seems to be the optimal price for everything you see on an infomercial?
I mean, the shower head, the Ginsu knife, my pillow, it's always $19.95 so the content doesn't have to be expensive, but I would pay for it a meal. Would you guys?
Jeffrey Feldberg: [00:10:05] Sign me up? Don, it sounds, it sounds great. You know, at a Deep Wealth, one of the things that we work with business owners and entrepreneurs on during regular times, but it's always fascinating to me.
It doesn't matter if you're looking to grow your business. And maybe even sell it down the road in a boom time. The same principles apply in challenging times. But let's continue with your example of a restaurants.
And so many people are not only dealing with that, but talking about that. So just imagine a scenario. People are cooking at home. Maybe they're missing some of the things that they used to do or some of the favorite dishes that are out there. Using the example of the restaurant, how could a restaurant in this scenario do what we call the 2P Move, the pivot and profit?
What would you suggest?
Don Gleason: [00:10:55] Well, back in the day, a few years ago, I worked with famous Dave Anderson. He created famous Dave's barbecue. He was the founder of Rainforest Cafe, which Steve Schussler, he did grand casinos. He was one of the first people in there in the casino world, but he was known for his award-winning ribs.
But he also has hundreds of amazing recipes. And so, I've never been able though to replicate is. Pork chop. I mean, it is tender, flavorful has got a great flavor profile. I mean, I would pay, I've tried to do pork chops and they come out dry.
They don't taste good, but he had this recipe and it was just absolutely fabulous. And I mean, I'd pay good money to get his secret. How does he do that? And if he had a tutorial or some type of video that. You could prepare online, you know, that could be sold anywhere around the world.
I'd pay to get that recipe. The other thing they could do might be to take a page out of Hello Fresh or Goldbelly or Fresh Leaves playbook, and create that take-home meal kit for the local market where if they wanted to ship it.
But something that's really quality where you got all the ingredients ready and you assemble it yourself because it can be fresh. You know it's going to be good. And they're also going to teach you how to cook it. So that pivot might be using the downtime to create new products and services that you've been thinking about, but you really haven't had time to do during this during this time.
Steve Wells: [00:12:18] You know, of the business people we've been talking to, it's common thread is that everyone is thinking about the future, not only surviving through this, but how do they prepare for what might be the next business downturn or catastrophe, because this seemed to catch a lot of people off guard .
So, we use a term and we talk about being pandemic proof. I mean, how can a company become more pandemic proof and prepare for these downturns that we're seeing?
Don Gleason: [00:12:53] Most of it's out of our control, but there are some things people can do to prepare for the next pandemic or the next crisis, whatever it is.
Here's the six things that I would think about for the next pandemic or crisis you should be prepared for. Setting up your work procedures from home now, before the next thing. I talked to some brokers, clients in Jackson, Mississippi, the financial advisors, and I asked him, are you working from home?
And he said, because obviously the market is so volatile, all his clients are just panicking. And so, he's constantly hand holding and working any of these, making trades, doing whatever they want. He said, no, I have to go into the office. I said, why are you in an office and going out? He said, well we did ever get our laptops that were FINRA compliant because there has to be security.
We can't just log into our system in an unsecure internet. So, all that needed to be done in advance so people could work remotely from home with the appropriate security. So anyway, that's really important to have those procedures set up now. So remote people know how to work. Second thing is you take precaution with your staff, training everybody to follow proper sanitizing procedures, et cetera.
I would also create a plan to touch base with your clients through email, websites, podcasts, et cetera. Know how to access that data and have everything set up in advance.
So, it's like a shelf plan and let them know how you're going to service their needs, deliver your products or services, but you can do it virtually or if it has to be face to face like window companies. Right now, I've got four different window companies that want to replace all the windows in my house and they're coming out.
They're going to measure, but they do it from the outside. So, I need to know what their protocols are and how they're going to work with me and how we can get this work done and be safe. I'd also make sure now, before the next crisis, I would discount and get rid of all the old inventory that's been sitting in the warehouse.
I went to one business, a cabinet shop, and they said, so what's that room back there? So that's the museum. It's the museum? We make custom cabinets and we have different lines and we've changed lines over the years. We've taken some back, we tested. The rooms built up and I said, how much is it set of those cabinets really worth?
And they said, oh, it's $12,000 for the entire kitchen. I said, how long has it been sitting there? Well, it kind of got built up over the last five years. I said, it's not worth $15,000 it's not worth $12,000 it's not worth anything because it's sitting in your freaking warehouse. Get rid of it. So, put up a tent next week and sell it for $1,000 bucks.
$500 bucks. I don't care what it is, but get rid of every single one of those cabinets. Well, they did, and it turned out to be $48,000. That's money that can be deployed in so much better ways than sitting in there. So, do it now.
Steve Wells: [00:16:04] That's crazy example, and I remember he told me that years ago, and I have actually used that example, I've talked about how hard it is for people to prune themselves sometimes, and you know, we don't want to make those, those cuts, but it really takes someone like you and in good times to do that. But now in the bad times, I guess people are probably looking in their warehouse and saying, what can we sell? And it's probably much easier.
Don Gleason: [00:16:27] There's a client here in Orlando that has a surfaces company, everything from art deco panels on the wall to flooring and tile and carpet and et cetera, and really high-end stuff.
The first time we were walking through and we were getting his take on his business. I walked out to the warehouse and I did ask, the warehouse guys said, where's your museum rack? And he goes, what? I said, where's your museum rack? Old carpet old tile that came back.
Odd lots of things. He goes. Oh, we don't have a museum rack. I said, really? He goes, no, we have to, we have two racks. I said, how long has that been there? He goes, Oh, at least seven years. We're starting a third one. And I said, you know, you got to get rid of that. So, you take that money that you.
You know you took from all this inventory that you sold and got rid of and create an emergency fund. You have to have cash. You need to be prepared to shut down for a while or slow down, and then be able to ride that out. I'm not always sure the federal government is going to come in and give stimulus money.
So, your best bet is to have your own emergency fund. And then last of all, and really, really important, you have to have what I would call a leadership succession plan. I mean, who's going to operate your business? If you get sick, you have to have a shelf plan in place and whoever those people are that are going to step up and trade.
If you get sick and you can't be there, who's going to lead it? Who's going to run that department? If your key leaders, your senior leaders, your chief financial officer or controller, they can't cut checks. Who's going to step in and do it? Somebody trained and come in behind them, so you have to have a plan.
And that plan has to be well thought out and well-trained out and practice it before the next pandemic or the next crisis
Jeffrey Feldberg: [00:18:13] Don. I like how you're thinking. What we say here at Deep Wealth is most business owners have deep wealth right in front of them, but they just, they never see it or they don't know that it's there.
And the examples that you gave of selling off the odd inventory or the old inventory to set up an emergency fund. That is terrific. But let me go back to something that you said. So you're a turnaround specialist. Which is a certain art and science to pull that off.
And, you've done that brilliantly in the past. I'm wondering as a turnaround specialist, what do you see in terms of the commonalities between a failing business and what they need to do to turn things around and businesses right now who perhaps yesterday were booming and successful, but today they're in the pandemic and it's just a new game out there.
So, what can you share on that for everyone who's listening?
Don Gleason: [00:19:04] Well, there are similarities. So I'll go in and in the initial intake I'll ask a business owner, how do you rate your business on a scale of 1 to 10, I mean, based on everything, your quality, your service, your employee, what your growth rate looks like, and very important net profit.
So, what do you think most business owners say? Well, it's almost always a seven unless they're falling off a cliff and they know that they're going to close their doors in three months, it might be lower than, but almost always they'll go, Oh, it's about a six or a seven and so there's this gap between where they are and where they should be.
Based on industry averages. Now,
Jeffrey Feldberg: [00:19:45] Don most of the people listening, like the three of us are type a personality, and I'm sure some people are saying, well, you know, seven's okay, but I'm going to shoot for the moon. How do we get a 10 or higher? Can you even get a 10?
Don Gleason: [00:20:01] Yeah, that's great. Well, I define a 10 as a company that's delivering excellent products and services.
The employees are well-trained. There are processes in place to handle and quickly course correct. When things kind of get off track, it doesn't mean that they're perfect. There's no, you know, 10 is not perfection. 10 just means you've got a well-working machine and the flexibility to do that and their profit margin is absolutely consistent.
Either above the industry average or at least at it. So, what does that gap mean to a company? Let me give you a quick example. So, a $6 million business that's delivering 7% profit in an industry that on average should deliver 12%, right? That's they're leaving $300,000 on the table. So, I asked the owner, you know, how long has this been going on?
He'll go about four years. So, you left $1.2 million on the table. Is that okay with you? And he, he'll sigh and say no and I said, can you fix it? He'll say, if he says yes, and I said, well, why haven't you? I mean, if there's $1.2 million in the parking lot, would you pick it up? And he goes, if he says, no, I don't think so.
Then the next question is, do you really believe it can be fixed? Because I can tell you right now it can, and it takes less time than you think. We're not talking about a year, two years. We're talking about, you know, two, to three months. You're going to put a plan in place to make that happen.
Jeffrey Feldberg: [00:21:36] So what would some of those things be? A great story and you've built up the suspense. What would you do in that scenario, or there's a specific example that you can share of what, what steps could you take to begin that process?
Don Gleason: [00:21:51] Well, there's critical areas that the business owner and the CEO need to focus on. They, first of all, cash is king. We all know that they have to have a cash management program or a system in place. That allows them really to look out the front of the windshield, their financial statements are a rear-view look.
Look what happened to us when we do the cash management forward, lets you forecast at least a quarter ahead, 13 weeks into the future. So with your financial controller, your CFO, whoever you have. The two key leaders are making decisions to see how it's going to affect your airplane. In other words, what trajectory are you on?
Is cash building and the is going up, you're gaining altitude, or if you look at the decisions you're making in the cash based on your forecast, and the airplane is headed down, well, there has to be some course correction or it's just a matter of time, right? You're going to run out of air. So, second, the senior management team really has to be committed and highly accountable.
The owner and the team and for the operating performance of the people under them and the people under them. Same thing. It all rolls down. It's a collaborative effort on solving problems, not trying to assign blame to people. Really important. This is a big deal is the next one is the team needs to create what we call a leak list.
These are places in sales, ops, finance, where profits and performance are below par.
Steve Wells: [00:23:18] So it sounds like this is something that would be helpful. At any time, but critical, you know, obviously right now.
So, what would that be in those examples in sales and ops and finance?
Don Gleason: [00:23:29] Sure, and this is true, whether you're in crisis time or what businesses should focus on now, and this is really the work that I've been doing for years. In sales. It might be the number of, you know, what's your ideal client profile look like?
Because you've got this population you can try and market to, but you really narrow it to the people that fit your profile. The funnel should have a good number of ideal clients moving into the funnel. And if you look at the bottom, how many of those ideal clients are in the closed position where you're actually going to close the sale or realize the revenue.
Now the time it takes to go from the top of the funnel into the bottom of the funnel is velocity. So. You need to know what that velocity is and how long it takes. So, you can actually do your cash forecast and really know So in sales, it might take in architecture, it might take one to two years to realize the revenue from a project.
Now, if you're selling Seadoos and a power and water there, it might be two weeks. So, what you have to do is really pay attention to the shape of that funnel. If it's a narrow funnel, you're going to be having probably a good quarter, but you're going to be hurting in about three months. You have to manage the funnel.
So, a lot of times the funnel leaks, if people are just focused on, I'm going to close these sales and they're not pulling people in, you can look and see exactly what the averages are. So, in finance, some of the leakage happens in accounts receivable. The terms aren't clear. Or if it's a construction company and they've got a punch list that's way backed up, all of a sudden, they can't get paid and close out the job, you know, because they haven't closed out the punch list.
And so, the timing of their AR is all wacky and they have got stuff hanging out there for 30 60 90 120 days because they're not managing the punch list. You can calculate that. So, in operations, it's easy too, let me give you one on this. And labor, you know, government jobs, you have to pay a prevailing wage because of the Davis Bacon act.
So, you know, even in Minnesota, where construction workers are making $20 if they're building an armory for the government, they're getting paid $85 an hour. That's a pretty big hike. So, labor costs add up pretty quickly. So, I go out on the job site. The construction company at the armory and it's 6:30 in the morning.
They're supposed to start. I get there at 6:15am and I just watch and observe and they're all hanging out, eating egg McMuffins and having coffee and kind of getting their tools together and chatting about the weekend. And the supervisors are pretty disorganized as to who's doing what today. And I'm sitting there on the clock.
They didn't actually start work until seven 15. Big deal, right? Is this happen on a job site? You can see it happening. It's just so common, but what does that really cost? What's it costing the business, and how is it leaking? Well, if they're laying out their tools and doing all this stuff, they're not actually start work.
45 minutes has cost that company at that wage rate for 16 guys, about $1,020 a day. $1,020 a day. I asked the supervisor and I asked the owner, I said, how is this typical? Yeah. This is kind of how we operate. You know, we're not that tight and so, well, for a year, if that job's running a year, and that was actually a year and a half job, it was $265,000 that was leaking out of the business.
A lot of times the senior leaders and sales ops and finance are so busy working in their business, they're just trying to handle the customers they have keep things moving that they really have no time to work on their business. So, the second reason is that a lot of people really don't know how to hold people accountable for their performance.
You have to pay close attention to your cashflow, number one, and manage that cash weekly and see the flow and know where you're going and what you have.
That's just key, and you'd be surprised how many businesses don't do that. Number two, you really have to know your ideal client profile and focus on what that client looks like its characteristic and that velocity of the sales funnel and what's in that pipe because that's your lifeblood.
Nothing happens until something gets sold. You have to operate with a committed highly accountable management team who will instill the same in their direct reports and it will hold their teams accountable as well. Operating off metrics, key metrics. You guys know you can't improve anything if you can't measure it.
So, you have to be prepared to pivot when the market conditions change and the metrics are going to show you that. But you will again, will be surprised how many management team meetings I've been in that never put up any measures or metrics or dashboard as to how the business is operating. So, you have to do that for each of the areas.
And last of all, you treat your employees the same as you want them to treat your clients. So that's really important. It's to invest in your team. And Disney practices that with, you know, ARE. They call it appreciation, the appreciate the team, they let them know that, especially frontline staff, they respect everybody, diversity, et cetera.
Yeah. And they recognize them for their performance and businesses need to do that. Cause a lot of times we don't take time to tell the guy in the warehouse, you know, I really appreciate you moving the old inventory or straightening up this or ordering on time or whatever it is. What are the sales that people make?
Recognition is important and it's free. It's a free fuel that costs nothing that pays huge dividends. If you do that, every business should do that.
Steve Wells: [00:29:18] Excellent, excellent points. And thank you so much. So, as we wrap this up, done, how can people get in touch with you?
Don Gleason: [00:29:26] They can find me. The easiest way I like to use LinkedIn is a connection. I shouldn't, they can just look up Don Gleason, Orlando, Florida. They'll find me.
So, love to help people improve their business can be a game changer. Sometimes a life changer for some of these business owners.
Thank you, Don. I really appreciate you sharing with us today. It's been very practical and we know you have so much wealth of information that that wealth is really needed in this period of this time.
So, thank you.
Jeffrey Feldberg: [00:29:53] Thank you, Don. Stay healthy and safe in these times.
Don Gleason: [00:29:57] Thank you so much. Appreciate it, Steven, Jeffrey, and I know you guys are providing a really important service to these business owners as well, so I look forward too much more in the future. Thank you.