Small Business Survival Guide with Jairek Robbins: An EOFire Classic from 2020

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. brought to you by the HubSpot Podcast Network with great shows like CEO School. Today, we're pulling a timeless EO Fire episode from the archives, so the giveaway may not be active. And we'll be breaking down the small business survival guide. To drop these value bombs, I brought Jarek Robbins into EO Fire Studios. Jarek is a performance coach, entrepreneur, and best-selling author. And today, Fire Nation, we'll talk about how to keep your finances tight, review your finances, cut down on excess expenses, how to have clarity, look at your numbers daily, and focus on the most important thing that you need to do to keep your small business going and so much more.

0:39And a big thank you for sponsoring today's episode goes to Jarek and our sponsors. If you're looking for highly vetted US-based fractional virtual contractors, then check out Belay. Belay is exclusively offering Fire Nation their latest ebook, Delegate to Elevate for free. Learn how to reclaim your time and save 15 hours per week by mastering the powerful tool of delegation. Text FIRE, that's F-I-R-E, to 55123 to get started. Outbound Squad, hosted by Jason Bay, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Tune in for convos with leading sales experts and top performing reps to help you land more meetings with your ideal clients.

1:20One of my faves, the monthly ep with Jason and Ethan, where they share hacks, tips, and tricks. Listen to Outbound Squad wherever you get your podcasts. Jarek, say what's up to Fire Nation and share something interesting about yourself that most people don't know. What's up, Fire Nation? Nice to see you all. That might have been a little loud, but I get excited anytime I'm hanging out with John Lee Dumas and Fire Nation. Something people don't know about me. Well, if you tuned into the first episode we did together, you knew I almost died in a village in Africa volunteering over there. I'm trying to think of something you don't know about me.

2:00I love fail videos. It's the weirdest thing. I love to help people all day long. But my goodness, when I need to like fire gaze and relax, I love watching people fall off roofs. Is there like a go-to YouTube channel or like somebody you follow specifically or is it just random? I think it's random. I mean, a huge fan of Rob Diergic with ridiculousness. He's definitely got some goodness going on in there. I think CeeLo with the rewinds and the instant replays definitely always warms the heart for some reason. Oh, so good. It's a weird thing, loving to help people, but just finding deep joy in someone just full send off the side of a mountain, Jerry of the Day style kind of thing.

2:43Oh, I mean, listen, we all have our things, Fire Nation. And this is Jarek's second time rocking the mic. And this is actually the first time rocking the mic that he is now officially a Puerto Rican like yours truly. He lives on the other side of the island, about 111 miles away, but we're both basking in the glory that is Puerto Rico, that is the sun, that is the rain, that is the fun, and everything in between. And today, we're going to be talking about the Small Business Survival Guide. I've given you some teasers, Fire Nation, to get excited about. So, Jarek, let's just dive right in. How can we survive this chaos that we are currently experiencing?

3:24This is near and dear to home. I'm a small business owner myself. We have a small team and I built it from scratch. So, you know, it's more or less, it was my original baby. We do have a baby on the way. We'll be here June 27th. But before my actual child arrived, my business was that. I built it from scratch. I nurtured it. I've taken it through the hard times and the good times and the easy times and everything in between. And so it's near and dear to me. It means a lot to me to keep this business alive. And, And 75 % to 95 % of businesses fail within the first 10 years. And my personal business is 11 years old.

3:57So it's one of the 5 % that have made it through that chaos. And I started it in 2008 when things were melting down for so many people. And I found a way to build something in a very difficult time in US history and bring it to life and keep it alive since then. And so with that, I've received text messages from friends and family members, even specifically my uncle texts me from Southern California saying, hey, the police forced us to shut our store. We're not allowed to physically be there. I don't know how I'm going to pay my rent this month. You know, if money's not coming in, I don't know how we're supposed to pay money out.

4:31And it looks like if this goes on much longer, I'm probably going to lose my whole business. And stuff like that just hurts. It's like, wow, that's how he feeds his family. That's how he takes care of my aunt and cousin and their puppy. And that's how their livelihood is based on that business. And there's so many stories like that across the world that I sat down and I just scratched my head and said, if I was going to help my uncle get through this, like what specifically could I help him do to protect the most important parts of his business? Like how do we protect the parts that need defending?

5:02You know, what do we need to do to help him shift some of the things and figure out what's working and what's not working? And how do we cut off any dead weight as silly as or, you know, sad as that sounds at this time in history, but how do we shed away anything that's not working that might be kind of sinking the ship? How do we pivot it and shift it in a way that might turn this part into a rocket ship where all of a sudden it gets the wind behind the sails and gets things moving again and they can start the uptick of revenue and uptick of profit to be able to pay the bills? And finally, is there anything he could do and bring something to market right now that people would grab onto him, drop to their knees and say, thank you.

5:37I really needed this in my life and I really needed this in my business. Is there anything he could possibly do. And so as I sat there and thumbed through it, I just kept whittling it down to like, what's the least amount I could share that would get him the maximum kind of result? And I'm very excited about what we put together here. And I'm excited to talk about it because Fire Nation, we're going to be going through the small business survival guide. And as you mentioned during the initial chat here, Jarek, you were talking about sometimes cutting that dead weight, protecting yourself and protecting the parts of our business that are healthy so that we can actually make sure they stay healthy.

6:17So let's go into a little bit of a deep dive around protects and maybe give a couple examples throughout, you know, including your uncle that you've seen with businesses who have been able to do this successfully, or, you know, that you would recommend them to do if they were asking for your advice. Totally. So I'll start off with myself. My wife and I sat down and did this very first exercise we're going to talk you through. And we were able to carve out and we keep our finances really tight. We're always reviewing them. We're always looking for stuff that doesn't need to be on there. And how can we carve it out?

6:49And we sat down, we did this exercise ourselves that I'm about to share with you. And we were able to carve out$3 ,000 of excess spending for 2020 and just cut it straight off of our expenses. And we were excited about that extra$3 ,000 for the year. It means a lot to some people, not a lot for others, but we were able to shut it off. We've had people attending each Friday a free nine-week course we've been teaching online. And in that course, we had a lawyer who was able to shave off$3 ,500 a month. We have someone who owns a fitness gym slash wellness center where they cook like these real healthy desserts and foods and stuff.

7:22They were able to save$5 ,400 a month off their expenses doing this, which is$60 ,000 for the year. Biggest one so far was a group in Amsterdam. Their company was able to shave off$300 ,000 for the year. But the reigning champ I have is a law firm in London that I worked with a few years ago. They did this exercise back then. And at that point, we're able to save$50 ,000 a month off of their P &L, which added up to about$600 ,000 for the year that they saved. And those numbers, if we look at it, I mean, some of those numbers, $600 ,000,$300 ,000 a year, that's what some small business owners earn the entire year.

7:58And I get to put an extra of that back in your bank account is amazing. The$3 ,000 or the$5 ,400 a month, I know my uncle was telling me his rent for his location of his store is$5 ,400 a month. If he was able to save that off the expenses, there's his rent for one more month to stay open. And so these numbers right now at this time in history are survival numbers, either make it or die kind of numbers. And the first exercise is so simple. I sat down and tried to figure out how would I explain this to someone I love. And the way I did it is you could last 30 days without food. Now, no one wants to, but you certainly could if you had to.

8:38You could last about three to five days without water, hydration, until you die. You can only last about three to five minutes without oxygen. I was like, ooh, that's the key. What's the oxygen inside of our business? And the oxygen inside of our business is cash. Now, there's three kinds of cash, and I won't go into these right now, but there's operating cash, financing cash, and investing cash. The operating cash, the O cash of your business, that's the oxygen in your business. If you run out of operating cash, it doesn't matter if you have$50 million in profit and accounts receivable waiting to be received, you're out of operating cash and you can't pay bills with profit.

9:17You can only pay bills with operating cash. And so there's some huge companies that might use this kind of simple information here and accidentally go out of business because they ran out of oxygen, operating cash there. And so the easiest exercise we do to kick people off in protection is have them pick out three highlighters, green, yellow, red. In green, I want you, you know, if you print out your P &L, if you print out all your expenses, your line items, if you print out your credit card receipts, you could do that too, personally or for your business. And all you do is go through in green and highlight everything you absolutely have to pay.

9:50Like you cannot not pay this. So green is all the stuff you must pay. Yellow, stuff you might be able to do without, stuff you might want to keep for right now. But if a certain goal or a certain target is not hit by a certain date. You might have to cut it just to be smart for your business to keep it alive. And then red, red is the stuff like, why in the world were we even paying this in the first place? This should have never been on our expenses. Who okayed this? How did that get on there? The red is that stuff. The law firm in London had 50 ,000 a month just in the red section. They identified it.

10:29We're like, who okayed this? And they were having a head hunting. Yeah, heads were rolling. Trying to figure out who in the world said okay to that. And they finally found it and no one got fired or anything. They just cleaned it up and they put$600 ,000 back in their business. So that little exercise right there, it takes about an hour or so. But if that one hour could help your business stay open one more month, it's probably worth it. If that one hour could help you get$60 ,000 back in your bank accounts, it's a good ROI. why. Every time I do this with any of my one-on-one clients, they always come back with a pretty significant number and say, well, shoot, you just paid for yourself.

11:06That's what I was going to say. Like you literally just paid for yourself for that one extra side. That's right. And so we lead with it and we always show people, hey, you know, get the money back in your bank account and then decide where you need to deploy it to really build your business, to keep things going. In this time right now at this moment in history, you should probably just keep it just to be safe for now until we figure out when things are going to open, how things are going to open. But for right this second, if you could put$60 ,000 back in your bank account, hold tight. Just hold firm for a few minutes and see what happens next just so you can be in a proper position to take advantage of it.

11:42So before we move on to a couple other things that we're going to be talking about throughout this small business survival guide. Give me just one, maybe two quick examples. We don't have to use business names, but I know you worked with a lot of companies, a lot of people like get specific real quick. Like what were one or two things you were just like, wow, like this really jumps out that fire nation could maybe resonate with as far as, you know, something that was successful going through that exercise that you experienced. Sure. So we could go to the law firm in London. legally, obviously can't use their name or information, but I could tell you that the person I was working with was one of the partners.

12:18He worked his way up from scratch all the way to the very top at a partnership level. That exercise we did, he was actually going through his own personal finances and we were having a conversation saying, hey, what does your future look like? What are you aiming for? What are you trying to get to? And he said, well, I'd love to have the ability to not have to work all the time. Not that I don't want to work all the time. I just don't want to have to work all the time. I said, okay, great. Well, what's your investment strategy? Where are you investing your time and money to give yourself excess cash flow from investments so that you have the ability to work or not work, but still earn the same amount of money every month?

13:01And he says, well, I don't have the extra money to invest. I was like, oh, well, let's find it. We had him do the exercise and all of a sudden he came back and there was a huge amount of money every single month going out that all of a sudden we cut out on the red. And now he had a significant amount of money dropping right back into his bank account that was originally going out. And we said, hey, wait a second. If you stack this money up for two or three months, you have enough money to go buy an apartment building cash. That's at least the down payment of a big one or it might be the whole payment of a small one.

13:33And I was like, man, if you went and bought those multifamily rental units and you bought three a year or four a year of those, how many years until we have enough income coming in that it literally offsets your entire income as a top lawyer in London? And we did the math and he created about, I think it was a seven or eight year plan that he would be able to make just as much money from these investments as a full time, top notch, one of the best lawyers in the country kind of situation. I was like, wow, that's life changing right there. Just to have the plan and then start implementing and to not have to go work an extra job to try to find the money, to not have to triple your sales or quadruple your company or grow things by 72 % within the next 12 months.

14:21None of these crazy things had to happen. All he had to do was cut the spending out of a place that he shouldn't have been spending it anyways, according to him, and then reallocate the funds to a place where it could actually start multiplying for him. I mean, Fire Nation, that's the kind of thing that we could all literally do today. I mean, you have to know your numbers. You have to know what that P &L looks like. And you should be sitting down, taking out those highlighters like Jarek's talking about, and going through the list. Where's the greens? Where's the yellows? Where's the reds? Okay, now I see this on paper.

14:55Obviously, where do I move forward? Let's address some of these reds and really get down to the bottom of everything that's going on within our business. Know your business. It's one thing I admire about you is how well you keep track of your numbers. It's one of my favorite things I always direct people when they're interested in getting in the podcast or learning how to do, you know, how to set up their podcast and all that stuff. I always direct them over to eofire.com and walk them through your page of how to do it. But I always tell them, I'm like, dude, click this button up here. Look at what the current numbers are.

15:27And they're like, whoa, how does he do that? And I always laugh. I'm like, with what you're learning right there on the free page, like use the tools, man. He's got it right there for you. And he'll show you exactly how to do it. No, I appreciate that. We've been doing those monthly income reports now for 81 months. I mean, every single month for 81 months now, we've been producing these monthly income reports. And guess what? We do it because we know that people like Jarek and the other people that he directs there and you, Fire Nation, hopefully get value from that, and hopefully study what's working for us, just like what's not working for us, but we also do it for us.

16:01Even if we weren't going to be publicly sharing that information, I would still be privately doing that stuff. I would still be doing that internally because I love that Peter Drucker quote that what gets measured gets improved, and it's absolutely true. And so we are always keeping our finger on the pulse. We are always measuring, measuring, tracking, tracking, making things happen. And Fire Nation, Jarek is not even close to done dropping value bombs. We have some very important parts of the Business Survival Guide coming up as soon as we get back from thanking our sponsors. No one accomplishes anything great alone, but perhaps you've experienced this too.

16:38Delegation and managing a team, especially a virtual team, can be the toughest thing you'll do as a business owner. Well, good news. If you're looking for highly vetted, US-based fractional virtual contractors, then you've got to check out Belay. No more throwing away your time on managing details, scheduling meetings, replying to emails and processing reports. If there are tasks and projects you're holding on to, it's time to delegate them so you can free up time to focus on the things only you can do. Get out of the administrative weeds and back to growing your business with Belay. They've been helping entrepreneurs scale and succeed for over a decade.

17:10It can help you find highly qualified virtual assistants, bookkeepers, even social media managers. And to help you get started, Belay is exclusively offering Fire Nation their latest ebook, Delegate to Elevate, for free. Learn how to reclaim your time and save 15 hours per week by mastering the powerful tool of delegation. Text FIRE, that's F-I-R-E, to 55123 to get started. Tech is great. It can help us grow and scale our businesses in so many ways. But it can also be clunky, time-consuming to manage, and expensive. That's why I'm excited to introduce you to HubSpot CRM, the best platform to speed up your sales and scale your business without blowing your budget.

17:51HubSpot's all-in-one CRM helps you automate tedious tasks, keep track of all your deals in one place, and make sure your whole team has access to the same data. No need to worry about the management and cost of a massive tech stack. HubSpot gives you everything you need all in one place. Plus, with fast activation, HubSpot makes it easy for the entire team to get up to speed, saving you precious time. And best of all, you can try before you buy. No commitment, no hidden fees, not even a credit card is needed to sign up. Get started for free at HubSpot.com. That's HubSpot.com. So Jarek, we're back and I want to talk about the pivots.

18:30How can we, Fire Nation, small business owners, pivots to ensure that those struggling parts of our business. Don't take us down to the bottom of the ocean. Great question. Great question. To circle back to something we said earlier that's so important, a business mentor of mine did with some research and found out that 50 % of business owners don't even look at their numbers each month. Wow. Don't even receive them. I almost choked on my glass of water when he said that. I was like, how do you steer a ship if you don't know where you're going or how you're doing? Like, what do you do? Just aim it and kick it in the morning and say, good luck and see it next year and see what happens?

19:07Like you throw the bottle down the river and wish it goes well. Or Jarek, it kind of starts to make sense when we hear that 95 % of businesses aren't making it past the 10th year. It does make sense. He said some of them even are so brave, they only check how they did in business on their tax returns from the next year. I was like, I don't know if I call that brave, but I certainly have some other words that are not being mean to anybody. It's just saying, and I talked to my dad about this. He gave me great insight. He said he's got like 16 companies and he reviews the financials with his team daily.

19:40Wow. Daily? Daily. Damn. And I remember thinking, daily? That's a lot of work. Now, obviously, he's not sitting there running the numbers himself. He's got a whole team that does it, but he gets a report every single day. This is exactly how we're doing. And he told me at the time, just so you know, personal experience here of how I kind of messed it up. People might relate. I had a year where I I did more sales, more events, helped more people, traveled to more cities. We did 22 events in 22 cities around the world. Came home. My accountant sat me down and said, Jarek, you'd be about$30 ,000 richer if you would have stood home and stared at the wall all year.

20:14I was like, that hurt. He said, you paid$30 ,000 to work all year long. I was like, oh, I didn't make anything? He's like, no, it costs you money. You paid to play here. That sucks. And that moment right there was a a moment of clarity to wake up and realize what I was doing wasn't working. I needed to pivot. I needed to adjust. I needed to do something differently. And the first thing I needed to do differently was get my finger on the pulse of how we're actually doing. And the only way I could do that as a business owner is by looking at the numbers daily. There's plenty of different softwares out there you can plug your numbers into and it'll show you a live active feed every single day of how much came in, how much went out and exactly how much profit you have at this very moment.

20:56And you can make decisions based on that to actually steer your business every day of the month to make sure it's constantly going in the right direction. And if it slides off course a little, you can course correct and get right back on track. And that in this pivot section is so, so critical. The very first thing, there's three parts of a pivot. There's clarity, finding that sweet spot, and then having filters in place to slow it down a little and make sure of making intelligent decisions. The piece I'd hammer down here is the clarity. You know, you got to take time to just sit down. And if you have a whole product line, great, write down every product or service you have.

21:33If you only have one or two things, great, write them down. And then you got to go through what's working right now. As simple as this sounds, like, is this working? Some of us are holding on to what used to work before the pandemic stuff happened before the businesses closed, before all these rules came in place. We're holding on to what used to work and we're holding on so tight because we love it so much that it starts to drag us down. And I'll give you an example. I have a couple of friends of mine. They do extraordinarily well. They have this wholesale diamond business online and they make hundreds of millions of dollars a year doing it.

22:10Unbelievable business. They live in Southern in California. Their mom has this day spa because she always wanted to have a day spa. And so her sons invested with her and helped her open this day spa. And she loves it. It's immaculate. I mean, you go into this place and it feels like you entered into a little slice of heaven, like it's peaceful and calm. And she's got the best masseuses in town working there. And she's got the best stylists and nail people. And she's got the highest end products and the most amazing stuff there. And you walk around, but you don't see a lot of people there for some reason.

22:43And things are really expensive, but no one seems to be buying stuff. And I'm like, huh, I wonder how this business is doing. And that's kind of a personal thing. You don't really ask the owner. So I asked my friends, I said, hey, how's your mom's business doing? They're like, oh, it's good. We pay for it. I said, what do you mean pay for it? And they're like, it loses about$200 ,000 a month. Again, I almost spit my water off and choked on it. And I was like, excuse me? Like, what? And they're like, yeah, but she really loves it. So, you know, we just kind of subsidize it out. We call it a tax write-off.

23:17We just write it off out of our other business and just, yeah, something mom loves, we just pay for it for her. And there's two sides in that moment. One, you know, bless them for taking such great care of mom. If that's what makes mom happy, just let her have it. That's cool. And so there's that side of me that's like, how sweet. They just give mom a$200 ,000 a month gift just to help mom stay happy. And then the second part, the logical business owner side says there's nothing practical about that. Blowing 200 grand a month just to keep mom happy is such a huge gift. And obviously, if you could do it, have at it.

23:54But as a business owner, that makes no sense. And I say, why in the world are they willing to just throw 200 ,000 a month away every single month? And part of it is because her identity is attached to it. She's known as the lady who has the day spa. Everyone loves the concept of the day spa. She treats her girlfriends whenever they come in and says, no worries, it's on me. She has this whole community connection around her business, around who she is and how she takes care of all her friends and family there. And it meets so many of her personal emotional needs as a human that she's not willing to let go of what's not working.