Business Owners: A Long Continuum of Good Decisions

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Welcome to make youe Wealth Work, the podcast where wealth becomes your greatest ally in achieving your dreams.

Joe Pantozzi: 00:00:07

Hello everybody. Joe Pantozzi, Alpha Mega Financial. And our podcast is called make your Wealth Work.

Today I have a good friend and colleague and a business coach and advisor named Brad Mishlove. Good morning.

Brad Mishlove: 00:00:26

Good morning, Joe. It's great to see you. I understand it's a little bit cooler where you're at than where I'm sitting.

Joe Pantozzi: 00:00:34

But it's a little bit frosty.

Brad Mishlove: 00:00:36

Yeah. We're gonna switch places here shortly. We'll be sweating here in Vegas and you'll be in a little bit better temperature.

Joe Pantozzi: 00:00:47

I won't miss that.

Brad Mishlove: 00:00:48

No kidding. No kidding. Yeah. Well, great. Well, it's good to be here and looking forward to our conversation this morning.

Joe Pantozzi: 00:00:56

Yeah, yeah, me too. So Brad has been giving me great business advice, how to things I must think about prioritizing, taking care of my finances while I coach others.

I've made it a practice in my, my life and my family that I don't deal with my checkbook. I don't deal with my personal checkbook, my family checkbook. My wife handles our finances.

I kind of give her direction as far as where we invest and so forth. But I'm talking about the money that comes into our home, the money that we have for, for disposable income, vacations, things like that.

She's in charge of it. So I don't have anxiety about balancing the checkbook, things like that.

I spend my time investing in my clients lives and getting them, as my mentor Nelson Nash would say, getting them to rethink their thinking.

And so Brad has had the awesome responsibility and task of getting me to dig deeper into how I manage my finances, my personal finances, my business finances, keeping my books straight, looking at my organization, management, people's skills, things like that. I mean, it's a broad canvas that he has to work with.

And so I'm going to, with that as kind of a backdrop, I'm going to ask you, Brad, now that you've been coaching me for five or six years, what in the world do you do?

Brad Mishlove: 00:02:39

Well, that is a really good question, Joe, and I will answer that, which is, I'm not sure I can articulate it well because it does vary by the day and sometimes by the moment, but it is the way I look at it.

It's my responsibility to look holistically at the businesses of the people that I work with and how those intertwine with their, with their life and existence and help them to the degree that they would, like, optimize them.

And what I mean by that is we look at things like profitability and cash flow and enterprise value, and we work to look at where they're at and then where they'd like to be. And there's some gap between those two things. Typically, I look at my role as to help them, at the best way possible, close that gap.

And Joe, it's really my contention that it takes a very long continuum of good decisions to build a company successfully. And unfortunately, it just takes one really poor one to kill it.

And so my role in part is to help CEOs, business owners avoid costly mistakes and make good decisions over a long continuum of time.

Joe Pantozzi: 00:04:10

I love that expression. I appreciate your saying that. And I just wrote it down. A long continuum of good decisions. And it's probably taken me a long continuum.

And my friend Brad probably chuckles to himself more times than you'd probably want to admit. How many different mistakes you've helped me to overcome.

Brad Mishlove: 00:04:38

Well, you know, Joe, look, we're all going to make mistakes. I mean, that's just part of life, part of operating businesses.

I think the key is to make them within some level of risk tolerance and do those with eyes wide open, if you will. Right. So you're, you're not always going to make perfect decisions. That's never, that's never going to happen.

We want to avoid the ones that bet the farm, that put the business and livelihoods and livelihoods of your employees at tremendous risk. And you have to take some level of risk in order to be able to grow a company. No risk, there really is no gain.

And I think that's true in the finance world, as it is true in the business world. That being said, knowledgeable risk is preferred over blind risk. So that includes things like having really good data.

Better data, I believe, yields better decisions. Because I think given the right set of information, Joe, typically the business owner, entrepreneur, they're going to make the right decision.

If they're working with data sets that are inaccurate, not matched in the appropriate time frames, not categorized properly, it's difficult to do an analysis that would make any sense to allow you to analyze the risk, the benefit, see the levers of growth and the like. So I'm not saying ever that it's going to be a directly linear path to success. I don't think that happens very often.

But I'd like to minimize the trials, if you will. In the wave, it goes up and down. I'd like to minimize the downs. Right.

So that they're At a point where they're calculated, you know what your risks are, and then you're moving forward and moving the revenue and the net income line, and of course, most importantly, the cash flow line up. But you know that it's not directly linear. It can't be. It just never is.

Joe Pantozzi: 00:07:01

That's really good. That's really good foundational stuff.

Brad Mishlove: 00:07:05

But I also think, Joe, isn't that the same when you're involved in an investment? It's not. You look at the stock market, some days it's up, some days it's down. But over a long period of time, generally it's up, right?

Yeah, hopefully. Right. But generally, look at the S&P 500 over a long enough period of time, and the return is generally pretty good.

Joe Pantozzi: 00:07:27

There you go.

Brad Mishlove: 00:07:28

Yeah, there you go.

Joe Pantozzi: 00:07:30

So when.

When you say good data, I translate that to how I speak with my clients, and I say, well, the first thing that we have to do, which is what Brad's just referring to, the first thing that we have to do is take inventory. We have to find out where you're at. We can't work on a game plan. We can't think about the future.

We can't think about forecasting or coming up with retirement income 30 years from now until we know where we're at, what our starting point at. And my mentor, Nelson Nash would say, if you know what's happening, you'll know what to do.

And that tells me you need to really be clear on where you're at. You need to know your starting point. You need to take inventory. You know, you need to know what your assets are today.

You need to know what your liabilities are today. You know what your income is, what your outflow is.

And it's amazing to me that I come across people who make seven figures and who have decent net worths, who can't put their hands on a balance sheet to send to me so I can get a quick snapshot of where they're at so we can do planning going forward. And of course it's fine, right? I mean, it's not. It's not deadly, it's not terminal.

And clients have said to me, hey, can you help me put that together? Well, yeah, kind of an asset map on one page. Sure. Yeah, let's. Let's start out with that. We can get more sophisticated.

But, yeah, you absolutely have to know where you're at before you could even determine a direction. Yep.

Brad Mishlove: 00:09:05

So true. And it's the same thing in business as it is on the personal side.

Joe, you, you want to identify the current situation and then identify the kind of the target. Where would you like to go? So sometimes my role is in helping identify where you could go, never my choice where to go.

But I can point out opportunities and options, but the entrepreneur usually has a vision of where they'd like to be and they definitely have a current state of where they are.

And the delta between those starts to formulate a roadmap and we look at where they're at, where they'd like to go, and then plot a course to get there. So you've heard me say this many times. There's really nothing new in business. It's all the same.

It's really the application of best practices over a long period of time that makes it work.

And if you do that, if you have a good set of books, and when I say a set of books, I mean that you have an accurate and properly categorized profit and loss statement or income statement, that you have a balance sheet and that perhaps most importantly and often overlooked, a statement of cash flows. Because as you know, it's cash that pays the bills and pays the employees, that allows the company the oxygen, if you will, to breathe and grow.

So managing the flows through the business are of critical importance and you have to do it. There's just no, there's no option. So it's a three statement model. They have to be delivered to the executive on a, on a regular and timely basis.

And there I. The way I look at it is there's gold in the data. It tells a story.

And of course it's, you know, numbers are important and numbers is kind of at the end of the day what we're using to evaluate the business, but it's really all about people. At the end of the day. The people make the numbers.

Joe Pantozzi: 00:11:14

Speaking of people, I want to give a shameless plug, if you don't mind, for Catapult.

Brad Mishlove: 00:11:20

Shameless plugs are always welcome, Joe.

Joe Pantozzi: 00:11:23

Absolutely. So Brad is a facilitator is the word that I use and coach for a group of CEOs. And speaking of people, it's nice, it's great, it's inspiring.

When I get together in study groups with professionals who do exactly what I do, my peers, people who share my professional type of values. Right. Very often they share family values, faith values, et cetera. But they're typically people who are in my industry.

But now, on the other hand, I don't know if it's been six or seven years since I joined the Catapult group, which, which Brad leads. And I got together with Brad and about 15 other CEOs once a month for eight hours.

And these were CEOs of companies in, in all different types of industries, none of which overlapped with mine.

So what that did for me, and hopefully I contributed a little bit to them, what that did for me was gave me some different kinds of thinking from people who do things differently. They run restaurants, they run online gaming companies, they run H Vac companies, they own a string of bars.

All different people who have really one thing in common. What's our stock in trade? It's relationships. Right?

So we're all creating businesses that focus around serving relationships in one way shape or another. And I think there's a lot of value in that.

In addition to working with your peers and people who study in your same industry, working with people and getting the thought processes of people who have management issues, who have personnel issues, who have marketing issues, who have cash flow issues, who have finance issues, but they're just in different industries. The issues are really the same. They just have different signs on the front of the shop.

Brad Mishlove: 00:13:46

Joe, it is really interesting that all business is really roughly the same, but within your industry, I think having a peer group of industry peers is hugely value. And then also having this group of peers that have different industries but the same job as you, they're still charged with running a company.

I think it accelerates innovation inside your industry. It's pretty well known what, what the best practices are bringing in.

And adapting best practices from other industries into yours can accelerate growth. You can bring other best practices in. So there's really again nothing, nothing terribly new in business. Right. The concepts are the same.

The math, math hasn't changed. The math hasn't changed. I mean, everything's gotten more expensive, but, but the ratios and how things work in business really haven't changed.

But getting best practices from a broad and diversified swath of businesses I think accelerates your growth.

Joe Pantozzi: 00:15:02

Sure, sure. You know, when I'm gonna meet with a brand new client or a client that's been with me for 20 years sometimes has to remind people.

I always wanna remind people. Maybe at the very top of your food chain as far as priorities is making sure that your business survives. Right.

We want to make sure that you make it to next year. So like you said, Brad, we want to avoid the gigantic mistakes. We'll make little mistakes as we go along.

Brad Mishlove: 00:15:31

And that's how you learn from those. Right? You learn from those.

Joe Pantozzi: 00:15:34

But we want to survive to the next week, the next quarter, the Next year. We want to grow, we want to build people up, but we have to be financially profitable in order to make this business worth continuing.

Brad Mishlove: 00:15:50

Right? So all good things come from profit in business. Profit allows a business to provide quality service to its customers.

It allows its employees to have a reasonable wage and good benefits. It allows for growth. It allows for so many things.

And if a business is either not profitable or just marginally profitable, it has great difficulty investing in its future. It must, must have profitability in order to grow. And you need funds to grow.

You can either borrow those, take those from investment, or generate them out of profit. The best place to generate is from profitability.

And you reinvest a portion of those profits into research and development, investments and equipment and people and the like and investments in training so that you're, your, your staff can be world class. It is amazing what a well run business with appropriate levels of profit can do.

Joe Pantozzi: 00:16:55

Continuous education.

Brad Mishlove: 00:16:56

Yeah, it is. It's critical. It's critical.

And that investment in your people because as, as you grow your company, the CEO gets further and further removed from that. The end user of the, of the product or service.

And they must, they must invest in the people in order to make sure that that delivery remains and actually expands the quality and the effectiveness for, for its client base.

Joe Pantozzi: 00:17:24

Wow, you've given me a lot of good meat. I've taken some quick notes and I hope to do a part two. So this is a good opening and I hope you'll come back for a part two. Brad.

Brad Mishlove: 00:17:37

Oh, this has been. I love having conversation with you, Joe. This has been morning here in Las Vegas and be delighted to return anytime you'll have me.

Joe Pantozzi: 00:17:48

Oh great. All right, so this is Brad Mishlove with Catapult. I can get you more information about him if you'd like to, to reach out to me.

Joe Panto, make youe Wealth Work. Please follow us and look forward to seeing you again. Thanks.

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