Emerge Dynamics Podcast

David and Eric discuss that the myriad of external risks that business owners face and how to balance insurance and cash reserves with risks the business takes.

They look through the lens of the preparedness chapter of Q Source which is the leadership book of F3 Nation. https://f3nation.com/q/

There are expected circumstances we need to prepare for, but there are always unexpected external shocks that we know will come but we don’t know when or what they will be. How do we prepare for those?

In today’s podcast episode, we’re going deep into the complex world of corporate finance and budgeting as we face the economic uncertainties of 2024. We’ll explore the various challenges and considerations that business owners and managers must contend with in this volatile economic landscape. The recent announcement from FedEx about an expected slowdown really caught our attention—it’s a potential red flag for the broader economy that we just can’t ignore.

Last year’s industry shake-ups have taught us that sticking to outdated annual planning models is like trying to navigate a storm with an old map. It’s better to have a flexible approach to budgeting, such as a rolling forecast with quarterly updates. This could really align companies’ strategies with the actual pace of the market, which is crucial for survival and success.

Traditional compensation structures are no longer serving us. They often encourage employees to game the system, which is counterproductive. Proposing alternative incentive models that adapt to market conditions is something to be really passionate about. It’s about creating a system that’s robust enough to handle the economic ebb and flow.

The importance of diverse perspectives in planning is another thing to keep in mind in 2024. Treating external analyses as helpful suggestions, not gospel, is vital. It’s about fostering a culture of agility and regular reassessment of plans, ensuring that our strategies are as dynamic as the market itself.

This year, more than ever, we need to be strategic and agile in our financial planning. Business leaders need to not just weather the economic storm, but to emerge stronger and more resilient.

Eric and David wrap up a mini series on sales by discussing non-manipulative selling and concepts from the book Find Your Six: Stop Lead Generating, Start Building Influence by Patrick Kilner.

They discuss the importance of authentic relationship and of creating value for clients. They also discuss how this factors into the valuation of your business.

“Here’s the bottom line: if your business is dependent on a lead gen model, you are fast becoming dispensable when it comes to actually generating business.” – Patrick Kilner

Learn more here:

https://www.findyoursix.com/

In this episode, David and Eric discuss the current drop in consumer sales across the country. They remind us to focus on not just selling “widgets”, but to go deeper and to demonstrate to customers how your business or product can improve their lives. David and Eric also share tips for monitoring monthly sales goals in a more effective and targeted way.

In this episode, David and Eric discuss how to incorporate seasonality into your revenue forecast. They give reasons why you should do this and a practical guide on how to do it. They also discuss the September CPI and question its accuracy in tracking how expensive American life has become. They look at www.shadowstats.com as a possible alternative picture.

https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth

https://www.fool.com/investing/2023/08/10/warren-buffett-is-sitting-on-a-147-billion-pile-of/

In this episode, we discuss the EVA metric which includes the opportunity cost of running your business. Many business owners think that positive net income means that their business is doing well, but is your business creating more value than it’s costing?

EVA = NOPAT – (WACC * capital invested)        

forsook [fawr-sook] verb – the simple past tense of forsake

In this episode, we look at current and historical data from the Federal Reserve and discuss what the inverted yield curve tells us about the state of our economy. The SLOOS Report is a quarterly survey of senior loan officers of banks. According to their date, over 50% of banks are seeing a decline in demand. This creates a challenge for those of us running businesses specifically in the areas of finance and growth.

https://www.federalreserve.gov/data/sloos.htm
https://fred.stlouisfed.org/series/T10Y2Y/

In the final episode of a three-part series on turning your business around, we discuss ways to use the changes you’ve made to return to being profitable again. It is important to pay attention to the new control systems that have been put in place so that you don’t end up back in the same predicament as before. Once your business has reached the stabilization phase, it is time to consider bringing back some parts of the business that had to be temporarily suspended, but only if those things have a sufficient ROA.

In this episode, we discuss step 2 of the 5 stages of a turnaround, the emergency action stage. We give several practical actions that you’ll need to take in order to get your business through to the next step.

It’s all about cash. And you’ll need to map how it comes in and goes out by week in a 13-week cash flow. We’ll explain how to put it together.