We’re on location for a special episode with a group of your peers as we get expert insights and actionable strategies to ensure your business not only adapts but thrives in the evolving landscape of 2024. How’s that 2024 plan working out after Q1?
Our featured panelist for this special episode includes:
Rich Cornell, Senior Consultant with RPS Benefits by Design. Learn from Rich how to bend the benefits cost curve while improving employee engagement.
Katheigh Degen, Co-owner of Twin Financial. Benefit from Katheigh’s expertise in working with business owners to identify how to use the business to achieve their personal financial goals.
Angela Eberhart, Director of Crown CFO. Angela has more than 20 years of varied experience and proven expertise guiding businesses with financial insight and strategic planning.
Mike Jackson, President of Pendello Solutions. With two decades of experience in the industry that changes more than any other, he’s up for the challenge.
Tricia Luedke, Vice President at Enterprise Bank. Hear what can be done from a true concierge for everything businesses need, through Tricia’s very personalized community bank experience with expertise in business banking.
Michele Markham, Owner of EAG Advertising & Marketing. From her experience running an agency that serves small businesses throughout Kansas City and beyond, Michele will speak to the marketing strategies and tactics for both B2B and B2C companies, along with the trends that could change everything.
Valerie Vaughn, Certified Mergers & Acquisitions Professional with Apex Business Advisors. Planning to plan to sell your business in the future? Find out what you don’t know from Valerie, who has been successfully consulting with business owners through the process of confidentially selling their business for the past decade.
Welcome to the Small Business Miracles podcast. I’m Jeff Randolph and as always this small business podcast is brought to you by EAG Advertising and Marketing, but not as always, today we have a special episode. Don’t you like it when your favorite podcast does something a little bit different and captures audio from like a live show in front of a studio audience? I mean, sure the format’s different and the sound quality’s different and your time investment is a hundred percent different, but you get a deeper sense and a deeper dive into some serious issues that impact entrepreneurs and business owners. Well, that’s what we have for you today. We’re going to take you into a packed room of business owners and entrepreneurs where I get to moderate a panel of business advisors from a trusted advisor group and discuss issues that are critical today. And the theme is about being at the end of Q1 and seeing everything about your marketing plan change or your business plan change from current conditions to opportunities to election years. How’s that annual plan working out for you?
Well, these business advisors from all the places where you would need business advice have some thoughts. The panelists are going to introduce themselves in just a minute and you’ll see a full list of who these people are in the show notes. I would encourage you to reach out to these people and you may find some things that resonate with you and hit particularly close to home. So go ahead and mentally place yourself in a crowded room of your peers for this session and, like the people who could attend in person, I think you’re going to walk away with plenty of thoughts about how to protect your business and keep moving forward in this year. Here we go. Thank you for being here. I see a lot of faces that I recognize from panels that we’ve done just like this in the past, so thank you for coming back. For the new people, welcome. We’re happy to have you here. I’ll bring up the panel in a minute and we will have a nice conversation, but I wanted to set the stage a little bit.
First on the back of the program, you can’t tell the players without a program. Right? So on the back of this, you’ll have all of the speakers today. And we’ll, as this trusted group of advisors was having conversations in 2024 with some of their clients, they saw a lot of commonality where people were saying, hey, my 2024 plan is already off the rails, or, hey, we just got thrown a curve ball, or my industry has just gone soft and I don’t know what to do about that. And so in getting prepared for that, they were hearing a lot of these same kinds of conversations and said, you know, it may be time for another panel discussion. Let’s see if we can’t get people in the room and listen to the kind of advice that we have. So before I bring up the panel, I wanted to start out, not with questions exactly, but just to kind of get a sense from the audience of what’s going on in your world for 2024. How’s that plan working out for you? Are you still good? Everybody good so far?
Show of hands how many people, yep, going along smooth as could be, can’t be better? There’s a secret right over here. We don’t know what that is yet, but we’re very excited to find out. So for the rest of you, what are the kinds of things that you’re seeing that are impacting your plans that were so well done? What kinds of things are you seeing? ‘Cause I know we’ve already had a conversation about some, you know, my industry has just kind of gone soft. We’re expecting John Cross back there. Good to see you. You know, expecting 40% down in the primary industry he’s selling into. Other things, who’s brave enough to throw out what they’re dealing with right now? Yeah.
Number of customers is up, but average order volume is down.
People are being a little stingy with average order volume. Okay. Common, yes. What else? Yeah.
Taking much longer to get the purchase orders in.
… just months to get the purchase orders.
Longer times, people dragging their feet for whatever reason. Other things? Yeah.
Oh. HR issues. That’s a thing that happens. Yeah. For sure. Other things? Yeah.
Construction costs being much lower than you expected. Maybe not. Okay. Other things? I want to make sure that we’re hearing some of the same kind of issues because when the panel comes up, you know, part of their answers will likely address these things. So anything else you want to hear about? We will also do Q&A at the end. So have those questions ready. Yeah. Don?
Supply chain, but not the way we think. The fact that everybody bought a bunch when things were tight and now they don’t need it.
Some very lumpy cycles and inventory and that kind thing. Yes?
Growth. How do we manage this growth? Because it’s out of control. How do we move it?
Kansas City is a hotspot right now for construction. There is a lot of work.
And the costs are also higher.
So that’s always fun. We’re going to get to all of these topics and if you’ve got questions, please do have them in mind as we go along. We’ll have time for questions at the end and we’ll make sure that we answer those. We pulled some questions in just as people were RSVP’ing. They had some questions. So we’ll have some of those questions plus the ones that the panel has come up with. So without any further fanfare, let’s get the panel up here. Shall we? I’ll have the panel start to introduce themselves.
I’m Valerie Vaughn with Apex Business Advisors and I help the owners of privately held businesses confidentially sell when they’re ready to exit. Many businesses aren’t ready for sale without a little bit of prep. So I frequently work with business owners for several years prior to help them understand value drivers and what they can do to optimize the terms when they do their market.
Rich Cornell RPS Benefits by Design and I work with employers and their teams in employee benefits strategy, execution, negotiation.
And I’m Michele Markham with EAG Advertising and Marketing and we’re a marketing and brand agency for small and growing businesses and non-profits. And this is a great panel. I try to deflect attention to my nose with the Band-Aid, but don’t let that make you not pay attention to the panel.
Good morning. I’m Katheigh Degen, co-owner of Twin Financial. And what my passion and love is working with business owners and helping them be prepared and for the business and using the business for their own financial well-being and getting them prepared.
I’m Mike Jackson. I’m president of Pendello Solutions. We provide technology management for small businesses that includes IT support, cybersecurity, and strategic advising.
And I’ll round it out. I’m Tricia Luedke. I am with Enterprise Bank and Trust. I’m in the Treasury department. That is not wealth management. That is banking services for you, so online banking, ways of really helping your cash flow and your revenue cycle move forward. So yeah, I’m the banker and we’re missing Angela, which is with Crown CFO. She is our fractional CFO for hire. So I’m going to try to answer some of her questions.
Okay. I’ll have you give the mic back to Mike and we’ll have that be the first question. Are you ready? Because you can’t talk about 2024 unless we talk about AI. Am I right? There’s a lot going on. So let’s have an IT guy tell us a little bit about this. But when it comes to AI, what’s the best way to approach it and make use of the new technology knowing it could significantly improve the efficiency of our business? Should we change priorities for the rest of the year based on what’s going on with AI?
There’s a lot to unpack there and as we said, you know, you can’t go anywhere these days without hearing about AI. It’s in absolutely everything. If whatever you’re looking at isn’t powered by AI, we just kind of ignore it completely. Actually I was looking at something the other day about golf clubs and said they’re powered by AI. I think that’s not helping my swing that much. I know where they were going in terms of the design is probably not going to do that much for my swing. But in terms of AI, I think there’s a couple of key things that we need to look at and we need to evaluate. So first of all, security guy here, I’m going to go down there first. You know, we have to understand where our data is. So yeah, when ChatGPT came about a year and a half ago now, they took the world by storm.
Everybody was throwing questions in there, data in there, all sorts of stuff. And I use that significantly. You know, if you want to go find new restaurants in Kansas City, fantastic, great, great thing to do. But we do have to be careful what we’re putting into AI. You know, if you go download your client list and you have your contacts in there and saying generate an email and send it to these, that data is now out on the web and it’s essentially training the models with your data. And that’s ultimately what we want to be careful of. We got to make sure we know how our data is being used. So if you’re looking at some sort of artificial intelligence platform, the first thing I would look at is where is the data? Is your data private? Is it being used to train the models? And usually they’ll say, no, this data is not, your data’s not being used to train the models.
So the other thing is we have to understand what is our focus? What are we trying to solve with artificial intelligence? A part of it might be we’re just looking to play around perfectly fine. I do it the all time honestly. So that’s part of what we do is to kind of mess around these things and understand how they’re going to impact businesses. But are we trying to solve something specifically, are we trying to, you know, we talked about it’s hard to find a good help in Kansas City right now with the labor market. So are we trying to automate something possibly through the use of artificial intelligence? What’s our focus? And then we can then approach and say, okay, if I’m trying to solve a true issue, how can, is there a tool out there, is an application or something that utilizes artificial intelligence.
Have you pass them mic to Michele next because we can’t not talk about marketing and AI. Marketing has been impacted by AI for a very long time. It’s kind of built into some of the tools that we use for a long time. But a question for Michele, we can’t talk about marketing without asking about AI. So let’s start asking how a small business should use AI, things like ChatGPT for their market. How should we do that?
Well, a lot of different ways. So the first thing, as you mentioned, AI has been around a long time. I mean it actually started in the ’50s and then we’ve been using it for SEO purposes in agencies for about 20 years. And so I think people do think, like you said, you know, a year and a half ago ChatGPT came out and everybody was like AI, this whole new thing, but it has been around for a very long time. So it really is about how you use it. And so there are some things that you can do that maybe you haven’t been able to get to from a marketing perspective yourself or you’re paying an agency for and you’re thinking, okay, now that ChatGPT is here, I can use this and you can use it a lot of things. You can use it for idea generation on content.
You can use it to dig in a little bit deeper on things, but there is a point where how you use it can really make a difference in terms of it standing out. And I liken it to, you know, yes, you can do your own taxes but do you? You need that expertise. Yes. You can watch DIY videos and do some things, but then, you know, you need someone else in there. And it all comes down to kind of the prompts and how to ask the questions and how to dig in for more information. ChatGPT is a very nice public tool, but there are other tools that you can subscribe to or agencies subscribe to. They get really down and slice and dice your data and look at it in different ways. And as Mike mentioned, you don’t want that out there in something public that then they’re using your data for everything.
And the really interesting thing is how you use ChatGPT can vary so much between a B2B business or a B2C business. And there are a lot of different ways. I actually did a search, I had ChatGPT tell me, okay, how do I use ChatGPT in marketing? And so the things that it brought up are things that we recommend as well. But then it would bring up things like, you know, for B2B, have a loyalty program and give somebody a thing so that when they make X number of purchases. Well, you know, Don, it’s not buy six pneumatic conveying systems and get one free kind of thing, so it can lead you down the wrong road.
And I know intuitively you see that’s an easy example, but some of these other things that you really need to get into can make a huge difference. The tools you can use, some of the ones that are free to use, some of the ones that you can subscribe to, some of the ones that agencies use, we could talk an hour for those. I do have a handout and I have some handouts or we’re happy to talk more about what’s out, you know, how to use AI if you’re a B2B company, if you’re a B2C company, and then the effect of your brand and AI. So we’ll have that handout for everybody to look at because it gets really in-depth. But we are happy to talk to anybody about this. You don’t have to be a client of ours to talk about this anytime because it’s an ever-changing hot topic.
Could you pass that to Katheigh for a moment because I want to switch topics a little bit to really talk about changing priorities. So we’ve all dealt with that so far this year. And Katheigh, I don’t know if you know this, it’s an election year. As a business financial advisor, how are you preparing your clients for doing business in an election year?
Normally, meaning no more the election, because your business should be based on your goals and your objectives, not everybody else’s or what’s going on in the economy in that manner and still take action. Many times people think that the market’s going to go down or up or be affected by the election. History will show you and tell you that it has very, very, very level effect on the market, the election does. In fact, in the last 20, 30 years there’s only been two candidates or presidents that didn’t get elected and that’s when the market went down and that’s the only time that in the last 20 or 30 years that the market has gone down. So actually the evidence says with incumbents, the market will actually improve and get a little bit better because of course the incumbents are working to make the economy stronger. So you may not see a down market until the second year when the new president or a president comes in. So just be normal, whatever that is now. Stay with your goals and objectives and stay focused on that.
All right. If you’ll pass that to Mike. I’ve got technology, and if technology and changing priorities tend to go hand in hand, from a technology perspective, how do we stay focused on a plan when the next best thing is just continually being released? It’s right around the corner.
Yeah. There’s always going to be some tool, something that’s going to solve all of your problems up there. We see them every single day and even as we look at it from a cyber security perspective, there’s going to be something that’s going to protect you 100% no matter what you’re doing, where you are, what you’re clicking on. First of all, it’s not true. And, you know, as we look at it from a security perspective, in general, I think that it comes down to having a strategy. What is your strategy to protect yourself? What is your strategy that you have for the year? Don’t deviate from that simply because there’s something that’s going to solve all your problems. And that’s more than just a technology statement there, but we’re living in a world of SaaS applications, software to service application and you can buy those and it’s a recurring model and everything and this one is going to solve my problems.
Many of them will. Many of them might. But make sure, you know, similar to artificial intelligence make sure you have a strategy of truly what you’re trying to solve there. What’s your plan for implementation? How are you going to see that through? That’s not just something you changed overnight. These are things that you should plan out over the course of time. And how does that impact your priorities per the year? So if you set these prior for a year, 90 days ago, what that was, how are those change, those tools, those applications, your technology strategy, how is that going to help you to achieve those priorities?
We had a question submitted when we were coming into, when we were doing registration for this event. And I’ll have Michele answer, if we can. It wasn’t from an EAG client. I should probably preface that. A B2B service company in the construction industry said, I’ve been really good about having a marketing plan each year and actually following it. It’s a big reason we’ve been growing. I’ve felt really good coming into 2024, even though we were seeing softness in the industry late last year, but this first quarter has been rough to the point where I have to cut expenses including pausing our marketing because I don’t want to spend my budget on the wrong thing. What should I do?
What should I do? We actually hear this a lot and whether you’re a B2B or a B2C company, there are three key things. And the first one is make sure your marketing plan is always built in a priority order from top down. When you find yourself in a soft economy or find yourself with clients who are delaying decisions, whatever, you know okay, I do need to cut some marketing expense and you can cut from the bottom up and you know which of those things are delivering more to you and less to you that are more supporting the bigger things. The next is in really nearly every case if you cannot do anything except one thing, it’s your search engine optimization. And even if you think my clients know where I am, I have a location, they do this, they’re not really looking for me on the web, what’s happening in your industry is people are looking for different solutions.
They’re looking, in the soft economy sometimes they’re not buying, sometimes they’re saying, okay, we thought we’d do this. Can we look for something else? You know, we kind of have to pivot and being found is the biggest thing. So I think that’s one of those things because you are feeling softness in your industry, your competitors are feeling that same crunch. And so what happens with search engine optimization is if you stop that, then they could be getting a competitive advantage over you. When things turn around, you’ve fallen so far down in the rankings, then you’re spending the next 6, 9, 12 months trying to get back to where you were before. So, you know, number one, marketing plan in priority order, so you know where to cut; second, search engine optimization; and then the third thing is strengthening those relationships with your key accounts. Your key clients already working with you, you know, they’re having the same problem. So you are trying to figure out how do I get more sales? How do I maintain sales? How do I do this?
They’re struggling and that’s why they’re not buying from you or buying as much from you or maybe buying lower ticket items from you so they’re having a hard time. So strengthening those relationships saying how do we get in here and roll up our sleeves and dig into this together shows that you’re in this with them. And it’s the same thing with those key prospects. You know, everybody has a prospect list, whether it’s people who have come into them or those people that you’ve identified, I really want to get to these people. It’s like have those conversations. Usually we’re done talking about COVID in 2020, but one of the things that we did in 2020 was we just said to our clients, what do you need? And it was just how can we be there for them? Whether we were spending extra time to help them dig in and understand things, it was just being there by their side. And so when you’re having that softness in your industry, it’s really that’s where the relationships will come in because they’ll stick with you through the hard times and be back when it gets stronger.
Okay. Pass it this way to Valerie, because I’m going to ask Valerie if this is a good time to sell my business. The Business Journal had an article not long ago that it said that merger and acquisition activity plummeted in 2023. I was planning to put my business on the market in 2024. Is it a bad time to sell or should I wait?
Yeah. I read that article too and I was surprised because that’s not what we experienced at Apex Business Advisors. Last year was the best year that Apex had ever had, and eight of the 14 advisors had their best year ever. Businesses that we listed sold quickly and we were able to bring multiple offers so that the seller had options. It was a seller’s market and we expect the trend to continue in 2024.
How far in advance do you want people to start talking to you though before we decide to sell next week?
Thank you. That’s a good note. Good note. Let’s pass that down to Tricia. In that spirit of changing priorities, I am so far off my budget already. What do I do?
You talk to your advisors. So budget is something that you think about long-term. You know, your budget is something that you need to sit down with your CFO, really visit with them about your strategic plan and where you need things to be. But you need to really don’t do it one time and then put it away. You need to continue to look at that on a monthly basis to see, oh my gosh, did I hire someone new and now I need to switch gears and where am I going to move that money. Right? Did I buy a new piece of equipment and now I need to do something there? So forecasting, look at those budgets on a monthly basis to see where you are, but then also how does that work into your budget?
So visit with your banker early. I notice a lot of people are like, oh my banker. I want to talk to them last. No. You want to talk to us early. Get us on your plan early so we can be your teammate. Talk to your CFO, your controller. Find out what is going on, not just with your industry but also within your company and know what you’re looking for and plan that and talk to your advisors. You know? I mean, marketing could go up, but you need to know where to reallocate those funds and you need to think about that. I think we’re all seeing early. Right? So that’s what I would say. Get with your advisors and don’t wait.
All right, Katheigh, you may want to weigh in on this one. How has the economy in the last few quarters impacted business valuations?
Business valuations have, they’re not affected that much by two quarters. Okay? Your business valuation is based off between five to three years. That needs the history. But when we talk about that valuation, what most people don’t recognize or forget and talk about budgets, budgets are important, but as a business owner, you really need to think about yourself and what you are taking out of the business. And I say that because many business owners, when the budget gets tight, forgets to pay themselves and they decide, okay, but that you need to have the budget run so you do pay yourself because when you go sell the business, no one’s going to buy a business that the business owner can’t afford to take money. Okay?
So you have to think and be aware of that. I’m not a big budget person. I’m a really big saving person. So when you have a cash flow, if you have different, professional word, buckets that you have put money aside out of the business or in the business that you can get to, that’s when cash flow, what happens the bankers. I mean, you don’t have enough. When you have good cash flow, you’re not saving enough money to put aside for the rainy day when you don’t have good cash flow. So that is a huge item for business owners is understanding how to protect and keep their cash flow.
Yeah. Yeah. Go ahead and keep that microphone for a second because Michele has already talked about staying focused on your plan and prioritizing things. If what we’re trying to do is drive results and stay focused on something, Katheigh, what mindset should I have as a business owner to be able to do that? How do I keep focused on the prize?
I’m going to tell you go back to the day that you asked yourself and you decided to get in business for yourself. Because at the end of the day, I think that’s the thing that business owners end up forgetting. When you get in the day to day and the junk and all of that is why am I doing this? What made me become a business owner? I got to deal with employees and cash flow. And so why is it? Was it to have security? Was it to provide your family a future? Is it to employ? Actually I’m proud that I actually employ 10 people and that I am ultimately responsible for their well-being because it gets a little heavy, but at the end of the day, that gives me another purpose. So that’s really a challenge is try to remember what you love about your business, why you’re in business, and go back to the basics and that will get you back on course, I think, when you’re deciding what to do.
Okay. I’ll pass that down this way to Valerie because I’m going to read this one off. This was another one that came in and focuses on the survey. So a recent nationwide survey of business intermediaries revealed that during Q4 of 2023 buyers have become increasingly selective. The survey indicates that well-managed businesses with strong fundamentals and growth potential are still receiving high valuations and garnering buyer interest. However less robust companies are being overlooked. What steps can I take to ensure that my business attracts a lot of buyer interest and receives a premium valuation when I decide to sell?
There’s a lot there. There’s a really specific question.
Yeah. Well, I think that it’s always been that quality businesses are sold first. Nobody really wants to buy a distressed business, but there are things, there are many things that a business owner can do to increase the value of their business, keep it up. But I’ll just focus on a few. So numbers first, numbers are always very important. Buyers and lenders look at numbers under a microscope, so having revenue and earnings that are trending up is best. Stable is okay. I have seen in recent years that business owners aren’t keeping up with the economy and they aren’t raising the price of their goods or services fast enough. So continue to make sure that you’re aware of how your products and services should be priced, that your margins aren’t eroding. Keep the revenue and profit up and then always focus on operational efficiency.
I was talking about numbers. I’ve said this so many times. You’ve probably heard me say it a lot. Keep business and personal expenses separate. It just makes for a cleaner, more valuable sale when you go to exit your business. Other things, I’m going to reiterate what Katheigh said. Owners pay yourself a fair market salary. Fair market compensation shows that you’re really confident that your business is going to remain profitable and it adds to the value of your business. Then many of you own the real estate that your business is located in. Make sure that you’re paying yourself again, fair market rent. Some business owners pay themselves more than a fair market. Some pay less. Paying fair market is best. Over or under just kind of complicates the sale. And paying fair market actually increases the value of both your business and your real estate.
Go ahead and keep that for a second. Have you been receiving more solicitations to buy a business so far…
… like to buy your business? A lot of those?
Can you address that a little bit? Why is this happening? What’s going on here? Why are we getting all these?
Yeah. That’s a great question. I mentioned earlier that I was surprised about The Business Journal article because Apex had a great year and we had seen businesses sell quickly and multiple offers very frequently for asking price. They are more buyers than quality businesses on the market. And so what’s happening is private equity groups, investors are coming to down market. They’re looking at smaller businesses than they would’ve looked at previously. Meanwhile, individuals who want to escape corporate America and become entrepreneurs are looking at those same smaller businesses and small is relative. It can range from, you know, $500,000 in revenue up to 20 million in revenue or higher. Small is just a word. Right? So in short, there are a lot of buyers looking at very few businesses. It’s the supply and demand question. In order to be successful with their business acquisition search, buyers are having to get more aggressive, more assertive. They’re getting more repetitive, and they’re going directly to owners and making explicit offers. So that’s what’s happening.
You know, if you’re in the mood to sell or if someone sounds really interesting as the buyer, I would suggest that you take their contact information, thank them, and say, I’ll get back to you shortly. I want to talk to my M&A advisor, my business broker before we go forward. And if you don’t have a business broker, get one. Find one that’s knowledgeable and that you trust. But what you really want is someone on your side who’s controlling the process and looking after your interests instead of letting that buyer, that one buyer take away your negotiating power and control the process to their interests. So that’s what’s happening and that’s my recommendation, if someone calls and you’re interested.
That’s right. Well, let’s hand it back to Rich because we’re going to hear a little bit more about HR and benefits for this question. We’ve succeeded and failed with various approaches to wellness over the past few years, walk at lunch or a vendor supported points and awards, education showing up, and cheering on employees at a 5K. Are there things that we can do to improve our health insurance risk profile to be more attractive in the market?
Good question. We’re going to start with something you cannot do, so don’t, because it’s illegal. You cannot walk down the hall and ask Bob or Mary to jump off your plan and into Medicare. It’s against the law. What you can do is ask your advisor team to help you in that area educating Bob and Mary. Because if Bob and Mary qualify for Medicare, there’s a reason that Medicare doesn’t want them and they would prefer that they say on your books, but they’re probably better off, their max out-of-pocket exposure might go down by 90 or even 95% if they moved to Medicare for similar costs out of pocket on a monthly basis. And then meanwhile, you and your broker, your advisor team can go to the market with a younger, probably healthier group. And we had a recent example this week where the general manager and her right-hand man left the group, went to Medicare and she’s saying just the other day, wait, my max out-of-pocket is now $240 and then the premiums on the renewal are lower than this? Yes. Yes. That’s true.
Another area that you can look at, and by the way, if you are Bob and Mary and you’re the owner of the business, you can have that conversation with yourself. That’s not against the law. Another area that you can look to giant corporations and many of them now are focusing their employer contribution on employees and reducing, pulling away, or even penalizing spouses. And if a company that’s generating a gazillion dollars can do that, you might look at the ramifications of doing that yourself. Because in many cases the higher risk people tend to be the spouses. Just the way it is. So again, you can’t chase them, but you can pivot to take a look at the way that’s done.
Go ahead and keep that for a second because before we get out of here, I wanted to make sure that we get back to resources that may be found in some of those benefit plans that we should inform our team about. I think you had some interesting insights on finding some of those last time we talked. So what kind of resources could we find in those benefit plans?
There are some areas that are already baked into your benefits plan most likely. Employee assistance programs have blossomed considerably and more vendors are giving you face-to-face access, or your team members face-to-face, for counseling, be it grief counseling, relationship, work-life balance, different life struggles, unlimited online telephone support. But if your team doesn’t know about it, it’s not there. And so I would educate, re-educate, reiterate that freebie. And then another one that has burgeoned since the pandemic time is telehealth. Telehealth used to be the stepchild in the health industry and it’s now become much more mainstream.
There are many, many more physical and emotional issues that people can address and really the big sale there is you can address it without sitting in a waiting room for an hour and a half with a bunch of sick people. And in many cases you can do so with a $0 copay. So as a member, that’s a win-win-win. From a group standpoint, it comes back to making your group more attractive at renewal, at marketing. The vendors love it when you use telehealth and you don’t go to the real doctor and they will reward you in terms of rates.
Michele, I’m going to make marketing and sales fight for a second. Marketing is producing leads, but sales isn’t closing my leads, but it’s the same sales team I’ve had and I know they’re capable of closing leads. What are we going to do we need to do to fix that kind of gap?
So much. You know, a lot of it it is a focus and I made some notes here that I wanted to make sure I hit on, but you want to enhance the marketing strategies and then optimize sales processes. And a key point in there is sales processes. And I’ll go into a few things. First, you have to establish a really, really strong relationship and feedback loop between marketing and sales. Marketing can sometimes assume, you know, we’re the brand stewards and we know what’s best for sales, and we can dictate from our thrones. Sales can sometimes blame marketing when sales are bad and they can take marketing for granted when sales are good. It’s not because of the marketing. It’s because I’m an awesome salesperson. So you have those things going back. But marketing always has to remember is sales teams can provide such valuable insight into why leads are not converting and then marketing can use that to adjust the strategies in messaging and in targeting. It can help ensure that content aligns with the needs and the pain points of your target audience.
The needs and pain points don’t stay the same. Even if your service or product stays the same, the needs and pain points at different times can really change. There was talk about, you know, getting your business ready for sale and getting your financials in place and a lot of times we’ll find a lot of our customers when they’re getting ready to sell, suddenly they’re wanting to beef up their marketing and let’s get all of these sales in. Other times we’ll find that some of our clients are investing in technology, investing in equipment because they’re getting ready to sell. Which is going to be an expense to them. They’re looking at that. So sometimes it’s really getting close to those prospects and kind of understanding where are they? And I know they’re not always going to tell you I’m thinking about putting my business up for sale, but you can start probing and start to learn those telltale signs.
The next part, and it kind of ties into the AI aspect, is you may be getting a lot of leads for your marketing, but do you know how qualified those leads are? And so ensuring you have that lead scoring and that qualification process to ensure that only the high quality leads actually make it to your sales team. So it involves assigning lead scores based on their actions, engagement levels. It’s looking at these people did this. What’s that like audience doing? How do we engage with them differently? What got this person into me that actually bought and how do I find more of them? And it’s so much in all of that data. So it takes analyzing the data. It takes looking at sales history. It’s a deep dive into the prospects won and lost and an analysis of your existing clients. And it’s not easy, but it’s valuable.
It’s sales and marketing working together on that, it’s just so key. And then a third thing is implementing marketing automation tools to nurture the leads effectively through the sales funnel. Not every lead is ready to purchase immediately and you want to tell, you know, a few questions ago I talked about stay close to them, build those relationships, but you can’t have your salesperson calling that prospect every single day. But you can set up automation and nurturing things where they’re staying in front of them and they’re hearing from your company and they’re hearing from the brand. And you can those so much based on what that person is interested in and have those nurturing things come directly from your salesperson through automation, so they’re not spending the time typing up the emails and everything and having all of those touch points. And then, you know, although marketing is my business, I do know it can’t do everything.
Your sales team is your most valuable asset, always has been, always will be. So invest in that ongoing sales training and development to enhance the skills of your sales team. Your best salespeople still sometimes need to be reminded of the basics and it may be you’ve got a sales manager, you’ve got a leader that can do that one-on-one training, but it’s got to be an ongoing thing. But if you’re focusing on training from that consultative selling, the negotiation skills, the product knowledge, the handling objections, all of that, use that. We’ve got one in the room actually that is really good at this. Dan, you may even want to add to some of this.
You got the throat, just keep going.
Where marketing belongs. No. It’s just funny as I’m saying this, I’m like, oh my gosh, he’s right there.
But it is. It’s focusing on that training and it’s doing things. Your marketing team or your marketing agency can help you really review and optimize your sales process, ensuring it’s streamlined, that it’s clear, that it’s consistent across the team. Every salesperson has their own way of doing things, so you’re not trying to turn them all into clones, but it’s understanding what are their skills and then how do you bring all of this in together and it’s really, like I said, it takes humility to work together on all of that a lot of times, but it’s just if you use all of the tools and you use the people and use the experience to just constantly analyze the data, I mean it’s analyze, analyze, analyze data over and over and look at it and tweak. It’s just not a one and done kind of process. Dan, anything to add?
And with your sales process, you know, if you’re going to change it, I would say, tweak it. So a lot of times we go and something works and then it stops working for a couple of days. Then we just completely changed it [inaudible 00:44:05] tweak it so you can understand as you make that change, okay, what does it do to the numbers, what does it do to area your close rate, all that kind of stuff. Because then you actually navigate it to analyze and evaluate so you can make it changes.
That’s great. Let’s Start with Tricia on this one. Because we’re going to switch up and since our plan many times has derailed, let’s continue to predict the future and see where we’re going from here. And I’ll start with what will the Fed do to interest rates with your crystal ball and how should I react?
My crystal ball. You know, we bankers have advisors too and our advisors are telling us basically that rates are going to come down. I know my mortgage people are excited. When rates hit six people start looking around, so they’re loving it. They’re seeing the sixes now. Lenders are loving it that it’s coming down. I will say that the Fed does not want to be connected to any political party. I know we mentioned that earlier. So I can’t tell you that they’re all going to do it after the presidential election. We’ve just been told that they’ll probably move it down by 75 basis points throughout the year.
So they meet eight times a year. If you didn’t know that, it’s out there on the web. You can kind of watch it. But they’re probably still going to continue to move down. I think everyone is talking about the economy going great. Inflation’s still a little high. So, you know, they’re watching both of those things pretty steadily and what we’ve been told is that they really have an eye on the threes, but I don’t think we’re going to hit threes this year. So I think that’s probably 2025 so steadily it’s going to go down. But that’s all going to depend on the economy and the inflation.
Thank you for that information and here’s more information. Don’t just wait and watch rates. I can’t tell you how many times people lose opportunity because they are waiting to do something. If you make a decision and I’m a big decision, you make a decision, make it that day, move on, re-evaluate it, not every month, but re-evaluate it annually because in my many years I almost get the number yet, many years of being in business where my clients have taken advantage is they made the decision when they were in the room at that time and those who didn’t make a decision to move forward, they usually are the ones coming back saying, gosh, I wish I would’ve done that. So we don’t know what happens at anytime.
This is when they start fighting every single time.
Sorry. Do you want to change seats? Well, and I was going to just kind of jump on that bandwagon again, know your numbers. You know your bankers always saying know your numbers. We talked to someone else already mentioned it today to me. You’ve got to know your numbers. Don’t make a gut decision without talking to your banker, without talking to your CFO for hire or your CFO yourself. Know your numbers. Don’t go out and spend. Cash is king, so don’t go out and spend your cash just because you have a lot of cash right now, so I’m going to go buy a bunch of equipment, but then I can’t pay for my employees who are going to run the equipment.
Or I use cash for it when I could have done a term loan for it because cash is king. So, you know, don’t make those gut decisions with really not talking to your banker. You don’t have to listen to your banker and you can be in the room and be like, yeah, right, no, if you don’t want to. You can talk to multiple people, your CFO for hire, talk to your wealth advisor. You know, make sure that you’re making those decisions, not just because you have a ton of cash. You want to make the decision that’s best for your company and how you’re growing with that budget, with that plan to move forward.
Michele, we’re going to predict the future in marketing. What’s the biggest change in marketing so far in 2024 that we should really be paying attention to?
Well, you think I’m going to say AI but I’m not. I’m also not going to say social influencers. But AI contributes to this, but the biggest change in marketing is giving your clients or your customers the very best experience possible with your brand. Those who don’t are absolutely losing prospects. What this means is you must absolutely factor user experience into your marketing plan. Everything isn’t about data, but it’s not just about the numbers. Understanding how people use your website, when they use it, when they stop using it, where do they drop off, when do they return to it, other websites that they visit.
I mean, we now have access to things that allow us to see, hey, people came here, where did they go after this? Who else are they looking at? Who else are they visiting? And so much more, sometimes it’s little things like just seeing people are going to your website and they’re trying to click on something but it’s not clickable, but it tells you that’s the kind of information they’re interested in, so how can you make it easier for them to give to you? How can you make it easier for them to not leave and to engage? Because at the end of the day, what we want from any website visitor is we want that call or we want that form filled out.
So I think it’s really imperative that you make that very easy and then that you use some of these tools and these data that we can have access to to understand what they’re doing and then finding those like audiences of people and targeting them because if you get your experience with them tied down, then targeting those other people, they’re going to have the same real good experience. And it used to be that this was a huge investment for businesses to get this kind of data, especially the data to understand where are the customers going or the prospects going when they leave me, leave my website. What else are they doing? But it really can be done affordably and to a point where you can’t afford not to. It’s just you can’t have the same, you don’t have to build a new website every year, but you can’t have the same website sit out there for years because the way people use them change constantly.
Throw it back to Tricia, if you would, because I’m going to lob a softball at her. Before we open this up to Q&A, one softball question for you.
We’re here at the end of Q1. When should I start the process of looking at 2025?
Absolutely. So it’s so funny, I love, I just moved jobs, and they’re always like, where do you want to be in three to five years? I don’t know. Where’s the company going to be in three to five years? You tell me where I can strategically put myself. Same thing with your business. You know, know your plan. Know where you want to go. Think about if you’re adding a new product, if you are going to jump on something completely different and add a new tool, whatever, you need to plan for that and you need to plan now and you need to plan with your advisors so you are not leaving out what’s important like what kind of vehicle in the banking industry that you need. And then don’t forget about fraud protection. It’s so, so important for businesses. I know a lot of people don’t want to pay for it because it’s not if it happens to me, but when it happens to me. And that’s so important. So think about just where you want to be in the future, what you need to do, but protect where you are now.
Let’s open. We’ve got five or so minutes to open this up to questions from you guys. You’ve got a great group of trusted business advisors up here. Let them have it. What kind of questions do you have? Who’s here?
So I want to piggyback on what Patricia was talking about. When you say fraud protection, could you be a little more specific.
I can. So if checks, people are still writing checks, and so check protection, positive pay, payee positive pay, knowing when you write your checks or your third party is writing your checks, what the check number is, who the person is. Every time you write a check, your account number and your routing number are out there in the system and tons of people are touching it, so check protection is important, so is ACH protection. So anything that you’re doing on the computers through ACH, Direct Deposit, paying your vendors, all of those kind of mechanisms can be protected and the bank has tools to help you with that. So all of that.
Always a value-added benefit to that. Worse. Yes. There is a value, but that value is less every month than what it’s going to cost you. I mean you can just look up the cases. If someone, you know, a check got stolen and somebody washed it and they still do that. It’s crazy. I don’t remember when that movie came out, Catch Me If You Can, but it still happens. I just had someone this year wash a check, write a different amount, and she was silly enough that she didn’t have her own account, so she used her buddy and her buddy lost $200, the bank captured everything else back, but they still washed it and was able to take that information. Luckily they had protection and so the controller saw that and said, oh, that check is not our check. It doesn’t have our logo on it. It doesn’t have this on it. It doesn’t look right. So we were able to stop it right away. Those are the kind of things. And of course added value.
I would pick up on this as well. And just that we encountered an issue with the ACH where one of our employees basically fell for a scam and he had access to be able to transfer money. So in our case, it wasn’t $200, it was $25,000. And my bank wouldn’t protect, didn’t protect me, so I had zero protection on that. Lesson learned, be careful who you give access to in your accounts and get that protection.
Absolutely. So not only do you want to protect yourself with that software, but you also want to protect yourself with your own employees. A lot of smaller businesses, mom and dad, your brother, your sister are working with you. A lot of other times you have other people, but you need dual authentication. You need to have one person making sure that they’re doing the process of writing the checks. Then somebody else is the one who’s hitting the button to approve it and making sure that it goes out both electronically and written. You want to make sure that you probably don’t have two family members doing the same thing. ‘Cause I’m always worth more than my sister thinks I’m worth. But also just to make sure that you’re protecting yourself. You don’t want your office manager whose been your office manager for 25 years knowing everything, right, so for her own good and your own good.
Next question right there. Yeah.
Kind of, I guess for you and you, the Ransomware Act versus fraud and the benefits to firewall security versus paying for insurance and dealing with it, what are you guys seeing kind of as the best way to handle that?
Yeah. So for the first one I’d say I do recommend cybersecurity insurance and that’s just like you get car insurance and everything. They’re protecting you for a number of different items. For the ransomware, you know, it depends on your insurance. So some will pay for it. Some will not. You know, and it usually depends on the protections that you have in place, and there’s questionnaires there is that you complete for your insurance agency. So those are very important. It’s something we help with because a lot of times if you answer yes, we have something in place, and it turns out you don’t, and that’s how you have an incident, as we call them. Is that a nice word? Then they’re going to say, well, you told us you had this, but it turns out you didn’t. So, you know, ransomware it’s still increasing year over year. There’s no doubt about that. It is the predominant way that they are getting money.
So, you know, I think it’s important to understand what does your cybersecurity insurance policy have in there? What does it cover? What doesn’t it? They’re not all the same. Just saying you have cybersecurity insurance does not make you covered. So it’s important to understand what you have in there, but then as well, you know, have as many protections in place as you can. And there is that balance there that we still have people do your job so we can lock things down so much that you can’t do your job. so that’s not the point here, but have the protections in place that if one thing does fail, you have something else to protect you.
Can I add to that? That’s not insurance that I do, but I work with small business owners and just FYI I don’t think any of us are too small. I had an architect firm and they only probably had, they have 15 employees and she walked in the office and she had ransom and literally it shut her down and they were asking her, and they probably do three to 4 million in revenue, but they were asking her for $500,000 to be able to get to her information. The good news was she did have insurance and I think it was a locked-in guy and he just basically said to her in passing I think you need to make sure you have it. And she had it, you know, have it. But it was a huge, huge stressful situation that she was able to protect.
Yeah. And Mike, correct me if I’m wrong, but we’re hearing more that it’s not a question of if it’s a question of when this kind of thing happens to you. Right?
This is correct. Yeah. I can’t remember the exact numbers from last year, but I think it was somewhere in the range of 40% of all small businesses had some sort of incident. And those that did, I think it was 50% of those had a second one because they didn’t close the holes. They didn’t learn from the mistakes that happened in first place. So a lot of times they think, hey, we had one, we’re good. No. The bad guys say, oh, you’re a target. Yes. It is increasing every year and it doesn’t matter the size. You know, we see it, was it Liberty Hospital that was a couple months ago? I think it was December. As large as that, all the way to we’ve seen a two-person law firm.
Is there another question we could end on?
Training, you must train your employees not to click on links, to do certain things, and to really hover over the person who’s saying they want something. If it’s something that they need immediately, it’s probably not what they need. If it’s your banker supposedly asking for your account number, your social security number, your date of birth, holy cow, we all have that information. Don’t send any of that kind of stuff. Don’t click on any of those kind of things. Call your bank. Call that vendor who’s saying that they need a wire sent out immediately and ask them, is this really you?
Is something that needs? We do training all the time on it, and I’m still amazed at some of the new stuff that’s coming out. And when I hover over, I’m like I can’t see it. It’s because I’m old. But I can’t see where it looks like that is not the right company. So look at the verbiage also, broken English, all those of things. You think you hear it all the time, but then when someone sends you something and you’re like, oh my gosh, I got to pay them, or they’re going to stop my supplies from coming, then you just get all that anxiety and then you just do something right away and that’s where they get you.
And AI is making that more [inaudible 01:00:56] that it used to be if you saw, you received the email with broken English, it was very obvious.
They’re using artificial intelligence too to write these emails so they can crack an email and send it to a list of thousand people in less than five minutes. And so, you know, that’s still something to look for, but they’re getting really good.
We’ll wrap it up on your comment.
But it’s adding onto those things. It’s when we use the AI tools, and Mike touched on this before, it’s making sure it’s not going out in the public because so many times you’re using AI operationally. You know, it’s not just in marketing, but you’re using it operationally. And that stuff goes out there and they’re getting people’s cell phone numbers. They’re getting people’s work numbers, work email address, personal email addresses. We are getting them. And on the training part, when I first thought about the training part, make sure you’re also training any type of interns, temporary workers, contract workers. We had an intern who got a text from me saying I need, and, you know, he’s a young guy. He’s a student.
Again, so he got a text from me, from the president of the company that said I need these gift cards. He literally went to Walmart and bought the gift cards, and luckily we were able to, you know, they were Apple cards and we were able to get it back for him, but he didn’t go through our normal training ’cause he was an intern, because he was a temp worker. You know, sometimes we’ll give, you give interns or, you know, hey, do this research project or dig into this for me. And they’re out there using some of these AI open tools and putting information in there that they shouldn’t.
I can close the panel out and say thank you for everything, all of the advice, all of the answers. Thank you very much. You get a sense of the kind of questions that they answer on a daily basis. And they can’t exactly do this, but I’m standing over here and I can. If you’ve heard something that resonates, if you want to dive into… And that was the event. Thank you for listening to this special episode. I know I said that in closing, but just the carving out time to talk to these people and your own trusted advisors in marketing or banking or finance or your business broker or IT or HR. If you do that, it’s going to make you feel much more comfortable. Trust me. You’ll feel better if you get some advice from people who know what they’re doing, so use that resource. Thanks a lot. Thanks for listening. We’ll catch you next time on The Small Business Miracles Podcast.
