2079 – The Power of Profitability in Business Strategy with Right Way Profits and Bookkeeping’s Debbie Deknight

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1:05With us right now, it's Debbie DeKnight. Debbie, you are the CEO of Right Way Profits and Bookkeeping. Your website is rightwayprofits.com. All the way, previously from Illinois, now Georgia, just up north of me. Debbie, it's great to have you. Thank you. Yeah. Well, give us an overview of the work that you do with RightWay. I know you're a huge advocate of kind of the profit first, you know, kind of way of looking at these things. But would you mind just kind of giving us an overview of your practice? Sure. So we leverage over 30 years of accounting experience and our certification is a mastery level profit first coach to guide businesses to financial clarity and permanent profitability.

1:56Yeah. OK, well, what does that mean for those of us who don't know those terms? so we make sure that you have financial clarity that you understand what's going on in your business with your money every dollar should have a purpose and we want to make sure that you're utilizing them for the proper purpose and then when we turn around and we sell products or we sell services. We need to make sure that we're building in profit just from the onset so that everything that we do is profitable. Profit isn't an afterthought. It's the first thing that we think about. Yeah. How do you explain this to someone who's just deeply skeptical who says, but Debbie, you don't understand, like every single dollar goes to pay the bills that I have.

2:56Cash flow is exceptionally tight. And, you know, that just all sounds great in theory, but I'm not there yet. You know, I'm not sitting in a position where I'm just flush with cash consistently month after month. So how do you advocate for a person in that situation? So that's very, very common situation to be. And our human behavior puts us in that situation because we're just built that the more we have, the more we want to spend. We're just built that way. So Profit First works with our behaviors so that we can turn around and have clarity on those numbers and every dollar has a purpose and we can't use it for other purposes.

3:44So you have too many expenses, plain and simple. If you have nothing left in your business, you have too many expenses. You're not building profitability into those transactions. You could be doing what I call the McDonald's dollar menu thing where you're just undercutting everybody to get that sale. not realizing that you're actually costing your business money by doing that job. Because we're just told so much in business that sales, sales, sales, that's the driver, that's going to get you where you want to be. But there's more to it than that. It's profitable sales, that's going to get you where you want to be.

4:30And if you're not looking at everything with an eye towards profitability. You can actually dig yourself in a hole and out of business. Yeah. So what would be, you know, obviously you talk with a lot of folks. Tell me about the types of folks that you traditionally work with or have a lot of experience with. So we work with a lot of people in the trades and the service industries that just seems to kind of be our folks. So lots of plumbers. We've got even doggy daycares, all different kinds of things. Because people in the trades are excellent at what they do. They've got tons of experience, you know, being able to plumb a house or being able to do a roof or, you know, whatever it is that their industry is.

5:25but they don't have the background in finances. They don't understand bookkeeping. They don't understand accounting. They can go out there and do an incredible job, something I would never be able to replicate in my wildest dreams. But at the end of the day, and you say, okay, so how profitable was that job? Were you as profitable as you planned on when you initiated that proposal. They can't tell you usually because they just don't have that experience. They haven't been taught. And we don't teach financial literacy in life. I mean, there's not a class you go through in school. There's nobody out there talking about, you know, knowing your numbers, being clear on where everything is going and where is it coming from?

6:23A lot of people offer many different services and don't realize that some of those services are actually costing them money. They're not profitable services. So they either need to be revamped or they need to be cut. People will take on services that they don't normally do because they want that sale, not realizing that they've made a mistake that's costing them money. Yeah, yeah. Yeah. You know, these things sound like common sense. So why is it that, you know, if they're working with a financial, you know, bookkeeper, you know, someone that's providing strategy, why is it that we, or, you know, I think the trope is that, you know, folks just can't see their own mess.

7:12Like, it's just like that, that filter, right? It's maybe it's hope, that that's why they keep investing and maybe it's going to get better. What are some of the other, it's almost like I want you to kind of point out the logical fallacies that you see sometimes entrepreneurs and business leaders failing. So the biggest thing is if I just get more sales, everything will work itself out. You know, sales is the solution to my problem. That's the number one thing because if you're doing sales that are costing you money, you're actually putting yourself out of business. You would have been better off not to have more sales, but to focus on making the sales that you do have more profitable.

8:03People have hope. They have desires. They have dreams. And, you know, me included, we sit there and we're like, well, we can turn it around. If we just do this, or we just wait for that to happen, or that proposal is going to come in and it's going to turn everything around. Because we don't want to accept the fact that what we're doing isn't working and that we need to make a change. Because change is scary. Change is hard. You know, change can require more time that we need to give to it that we already feel like we have no time to give. You know, so we just kind of, I don't want to say ignore it, but we know it's there and we just push it off for another day, another month.

8:55We'll deal with it next month. Yeah. Next time, next quarter, I'll get it right. Yeah. Well, I feel like I do a good job at this. Like I'm pretty cheap. I don't want to say cheap. I'm not cheap. I'm not cheap. I'm very, and I think most of us would consider ourselves to be exceptionally mindful. right? Because of the, like the intense responsibility that we have, if we're the founder, right? If we have a team, you know, five, 10 people or something like that, like, I want to keep them working. I want to keep being able to be of service. And for me, it's constantly evaluating where the money's going out, where the money's coming in from, and then, you know, kind of assessing that or matching that to goals, which is kind of the next thing I want to ask you about.

9:40And that is, you know, just simply, you know, what do you see most business owners not really doing when it comes to planning or goal setting? I think that that's probably an area where many of us, like, I think if you were to, I'm just speculating here, but I suspect that, you know, most business owners, you sit down and you're like, okay, let's see your 12 month plan. They might come up with a, well, I mean, I have it in my head or, you know, we scribbled some stuff it out on a Google Doc? Maybe not. Again, I think the serious players definitely have this out, but they may be missing elements that I think you would probably want to contribute to in that 12-month plan.

10:21Any thoughts on this? So we find a lot of our clients don't have like a real goal. They have this generic fluffy cloud idea in their head that my goal is to increase revenue this year, but there's nothing strategically written down on how to do this. What are the steps? How are we going to get from point A to B to C to reach our goals? They don't, I think, a lot of times know how to get from where they are to where they want to be. They know where they want to go, but that path is just very cloudy and blurry for them. So I'm usually lucky if somebody has a three-month goal that's well written out, let alone to go any longer than three months.

11:21But three months is fine. You take three months at a time. You turn around and you just really need to highly define how you're going to get to that goal. What are those steps? Who's going to do those steps? Can you take some of those steps and give them to team members to do? Does it all have to be done by you? Can you outsource some of those things to get them done? You know, I think a lot of times, especially when we're talking about businesses under, say, 2 million, And the business owner feels like they have to wear all the hats and that nobody can do things as good as they can, but they don't have the time to do it.

12:03So it just sits around and never gets done because they don't want to turn around and give it to somebody else to do or to help with. Yeah. Debbie, your website is rightwayprofits.com. To our friend that's been listening to our conversation right now. And maybe they're not ready for a call just yet, but they're curious about learning more. I mean, I know you've done a little bit of content creation. Is there anything that you would point folks to? So if you go to the website, rightwayprofits.com backslash ask, I've created a free 15 minute ask me anything session where they can jump on a call with me.

12:46I'll answer any questions that I can, unless it has to do with taxes. I don't touch tax questions. That's my no-go lane. I don't blame you. But anything having to do with... Mine neither. I surround myself with smart people on that. You know, if they want to talk strategy or they just want somebody to bounce an idea off of, they have accounting questions or want to understand profit first a little bit better. You know, jump on a call. There's no sales whatsoever on the call. It is strictly them and me having a conversation where I do my best to ask, to answer any questions that they have. That's it.

13:31Yeah. You know, everybody needs somebody to ask a question. Yeah. What's the number one question?

13:39Well, it kind of depends on the time of the year. We're getting towards tax time. So a lot of questions that we're going to see now are going to be, what do I do? I haven't done my books for the last eight months. How do I fix it? Can I fix it? Does somebody else have to fix it? And, you know, we even train people on how to do their own books for those small companies that just need a little bit of guidance so that they can actually have good books to turn around and run their business with. Yeah. All right. Debbie Denite, again, founder, CEO of Right Way Profits, your website, rightwayprofits.com.

14:26Debbie, thank you so much for joining us. Welcome to Georgia. I mean, I'm in Florida, but welcome to the South. Thank you. So, hey, thank you so much for joining us. And again, the website that you shared with that, Ask Me Anything is just rightwayprofits.com forward slash ask. Debbie Denae, thank you for joining us. Thank you.

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