WEBVTT 1 00:00:00.000 --> 00:00:02.560 So this is our first session today on the business, 2 00:00:02.560 --> 00:00:03.760 the economics of business. 3 00:00:03.760 --> 00:00:05.640 So it'll be a really fun session. 4 00:00:05.640 --> 00:00:08.220 And we're also gonna discuss an empowering way 5 00:00:08.220 --> 00:00:09.400 of measuring success. 6 00:00:09.400 --> 00:00:12.520 It's a little different than most companies measure success. 7 00:00:12.520 --> 00:00:14.480 We're gonna talk about the profit that we make, 8 00:00:14.480 --> 00:00:16.120 the people that we reach, 9 00:00:16.120 --> 00:00:18.420 and how alive is the team doing it? 10 00:00:18.420 --> 00:00:21.320 Because if any of those three elements are missing, 11 00:00:21.320 --> 00:00:23.760 we're not gonna be operating at our efficiency 12 00:00:23.760 --> 00:00:24.880 that we can actually operate. 13 00:00:24.880 --> 00:00:26.880 We're not gonna be reaching the world 14 00:00:26.880 --> 00:00:29.440 and making a difference that we have the potential to make. 15 00:00:29.440 --> 00:00:33.560 So my pro tip for today is that during our breakout session, 16 00:00:33.560 --> 00:00:35.080 we'll have some great questions 17 00:00:35.080 --> 00:00:37.160 to take what we're learning a step further. 18 00:00:37.160 --> 00:00:39.160 And remember that we're only establishing 19 00:00:39.160 --> 00:00:40.240 a starting point today. 20 00:00:40.240 --> 00:00:41.960 Conversations will probably be longer 21 00:00:41.960 --> 00:00:43.800 than just the breakout time. 22 00:00:43.800 --> 00:00:46.640 We'll give you as much time in breakout as we can. 23 00:00:46.640 --> 00:00:49.440 So don't expect to get it all dialed in today. 24 00:00:49.440 --> 00:00:51.200 If you're guys, or if you're still going 25 00:00:51.200 --> 00:00:52.660 and you're having a great conversation, 26 00:00:52.660 --> 00:00:55.220 extend the session or do a second session 27 00:00:55.220 --> 00:00:57.280 to really dive deep in this material. 28 00:00:57.280 --> 00:01:00.080 So team leaders, when you are doing the session 29 00:01:00.080 --> 00:01:00.920 in the breakout, 30 00:01:00.920 --> 00:01:03.320 go ahead and jump to step four with your team. 31 00:01:03.320 --> 00:01:05.640 Take some time to hear people out. 32 00:01:05.640 --> 00:01:09.420 Even if you have a clear idea of answers in your own mind, 33 00:01:09.420 --> 00:01:12.360 go ahead and let the team expand your perspective. 34 00:01:12.360 --> 00:01:14.080 And sometimes they help us see opportunities 35 00:01:14.080 --> 00:01:15.480 that we're not already seeing. 36 00:01:15.480 --> 00:01:17.080 And remember, because we are equipping 37 00:01:17.080 --> 00:01:19.180 and we're building an entire team of leaders, 38 00:01:19.180 --> 00:01:21.440 not just a team that follows a leader. 39 00:01:21.440 --> 00:01:23.560 And then solo members, I highly recommend 40 00:01:23.560 --> 00:01:27.000 that you include your clients in this conversation. 41 00:01:27.680 --> 00:01:28.920 If you don't have other team members 42 00:01:28.920 --> 00:01:33.160 that you're able to discuss with, ask your clients. 43 00:01:33.160 --> 00:01:35.360 Send a survey, give them some calls, 44 00:01:35.360 --> 00:01:38.200 ask them to help formulate those opinions. 45 00:01:38.200 --> 00:01:40.560 Because it's not just a one-sided relationship, 46 00:01:40.560 --> 00:01:42.720 it's a reciprocal relationship we're building together. 47 00:01:42.720 --> 00:01:44.560 And we're looking to meet actual needs 48 00:01:44.560 --> 00:01:47.200 and solve actual everyday problems. 49 00:01:47.200 --> 00:01:49.680 Okay, so is everyone ready? 50 00:01:49.680 --> 00:01:52.000 Looks like we're ready and ready to go. 51 00:01:52.000 --> 00:01:54.280 So go ahead and welcome Dion in the chat 52 00:01:54.280 --> 00:01:55.560 and over to you, Dion. 53 00:01:57.000 --> 00:01:58.000 Thank you, dear. 54 00:01:58.000 --> 00:01:59.120 Yeah, it's very exciting. 55 00:01:59.120 --> 00:02:02.720 I see we have somebody from Switzerland, I was impressed. 56 00:02:02.720 --> 00:02:05.400 Very nice to have everybody join us again. 57 00:02:05.400 --> 00:02:09.080 Starting to feel like family now, that's really good. 58 00:02:09.080 --> 00:02:11.280 We wanna talk through today about, 59 00:02:11.280 --> 00:02:14.200 and I'm just gonna put together a very simple slideshow 60 00:02:14.200 --> 00:02:15.800 to help us understand this. 61 00:02:15.800 --> 00:02:19.880 So you may remember that when we started this process, 62 00:02:19.880 --> 00:02:23.640 we talked about that we want to build four pillars, 63 00:02:23.640 --> 00:02:27.280 leadership, culture, innovation, and economics. 64 00:02:27.280 --> 00:02:28.840 Today, we're talking about economics. 65 00:02:28.840 --> 00:02:32.200 And if you say, oh, economics, 66 00:02:32.200 --> 00:02:33.560 is it gonna be about accounting? 67 00:02:33.560 --> 00:02:35.880 Yep, it's gonna be about money in general. 68 00:02:35.880 --> 00:02:37.160 But what are we gonna do is, 69 00:02:37.160 --> 00:02:40.120 I'm going to share with you some cheat sheet things 70 00:02:40.120 --> 00:02:43.240 that I've learned in my career. 71 00:02:44.480 --> 00:02:48.280 So one time, a group of CEOs asked me to come 72 00:02:48.280 --> 00:02:51.520 and speak to them about how they were talking 73 00:02:51.520 --> 00:02:53.920 about raising money for their business. 74 00:02:53.920 --> 00:02:56.080 And they asked me to come in and show me 75 00:02:56.080 --> 00:02:57.720 how private equity firms, 76 00:02:57.720 --> 00:02:58.960 if you don't know what private equity is, 77 00:02:58.960 --> 00:03:01.840 it's usually just a fund that invests in companies. 78 00:03:01.840 --> 00:03:05.760 So usually, private money, hence equity, 79 00:03:05.760 --> 00:03:07.560 private money gets together in a fund, 80 00:03:07.560 --> 00:03:11.560 and then some group decides where the funds go 81 00:03:11.560 --> 00:03:14.280 and they invest in other companies and so forth. 82 00:03:14.280 --> 00:03:19.040 So in that process, they wanted to know, 83 00:03:19.040 --> 00:03:21.840 how does somebody who wants to put money in my company 84 00:03:21.840 --> 00:03:22.920 look at my company? 85 00:03:22.920 --> 00:03:24.720 How would they understand my business? 86 00:03:24.720 --> 00:03:26.400 You say, well, that sounds really complicated. 87 00:03:26.400 --> 00:03:28.400 Well, actually, it's super simple, 88 00:03:28.400 --> 00:03:31.880 because when you get 20, 30, 40 applications a week, 89 00:03:31.880 --> 00:03:33.920 you develop a system that within the first two 90 00:03:33.920 --> 00:03:34.760 or three minutes, 91 00:03:34.760 --> 00:03:37.200 you're already deciding what you're gonna do, right? 92 00:03:37.200 --> 00:03:38.920 You flip to a certain page, 93 00:03:38.920 --> 00:03:40.840 your eye goes to a certain few things. 94 00:03:40.840 --> 00:03:43.520 And there's a couple of cheat sheet things that we do 95 00:03:44.440 --> 00:03:46.680 when we're looking at numbers. 96 00:03:46.680 --> 00:03:48.560 And so for us, I wanna go today 97 00:03:49.080 --> 00:03:51.600 through one of those cheat tips, if you like, 98 00:03:51.600 --> 00:03:54.240 that quick way of looking at financials, 99 00:03:54.240 --> 00:03:56.160 so that we as a team, 100 00:03:56.160 --> 00:03:59.040 everybody can understand where we're at. 101 00:03:59.040 --> 00:04:03.200 Now, it's not normal in most private or small businesses 102 00:04:03.200 --> 00:04:06.400 for everybody to see financial information. 103 00:04:06.400 --> 00:04:08.120 But I think there is a way 104 00:04:08.120 --> 00:04:12.760 in which you can share financial information with a team 105 00:04:12.760 --> 00:04:14.280 at a high enough level, 106 00:04:14.280 --> 00:04:16.240 so that those cheat sheet elements, 107 00:04:16.240 --> 00:04:19.079 just those most important bits 108 00:04:19.079 --> 00:04:21.000 are quick to see how we're doing. 109 00:04:21.000 --> 00:04:23.400 Because I think when everybody understands, 110 00:04:23.400 --> 00:04:25.360 has a context for the financials, 111 00:04:25.360 --> 00:04:27.760 they understand what we're doing, 112 00:04:27.760 --> 00:04:29.880 they understand how much money we're making, 113 00:04:29.880 --> 00:04:32.480 and they understand how what they're doing 114 00:04:32.480 --> 00:04:36.040 is participating and contributing to the bottom line. 115 00:04:36.920 --> 00:04:39.800 So I'm gonna put a quick little slideshow together 116 00:04:39.800 --> 00:04:43.640 and up here on the screen, give me one second. 117 00:04:44.640 --> 00:04:46.920 So let me share my screen. 118 00:04:48.000 --> 00:04:50.600 All right, so as we said, 119 00:04:50.600 --> 00:04:53.400 that there's four pillars that we're building, right? 120 00:04:53.400 --> 00:04:56.320 So we've been talking about different components, 121 00:04:56.320 --> 00:04:58.320 culture, leadership today, 122 00:04:58.320 --> 00:05:00.120 we're gonna move to the bottom one. 123 00:05:00.000 --> 00:05:06.860 on economics. So on the economic side of this, we want to talk about the triple bottom line. 124 00:05:06.860 --> 00:05:13.380 How do we keep score as a business? How do we know we're winning? Right? So it would 125 00:05:13.380 --> 00:05:18.680 be really weird if you went to watch, you know, the Super Bowl, and there was no scoreboard. 126 00:05:18.680 --> 00:05:22.860 And we just saw a lot of activity on the field, a lot of cheering, I think they got the ball, 127 00:05:22.860 --> 00:05:27.460 I think they got the ball, you know, and then people are saying, did we did we just did 128 00:05:27.460 --> 00:05:30.620 we just score again, I don't remember, is that the third, you know, trying to remember 129 00:05:30.620 --> 00:05:36.380 the score by memory? Well, that's hard for a team to be playing the game, and not knowing 130 00:05:36.380 --> 00:05:40.880 what the score is. So we want to talk about how do we keep score. And one of the most 131 00:05:40.880 --> 00:05:48.180 powerful ways is this idea of the triple bottom line. And so this is really redefining how 132 00:05:48.180 --> 00:05:53.340 we measure success. And it comes down to money, impact and the team. Money, how much money 133 00:05:53.340 --> 00:05:58.900 did we make, obviously, we'll talk a little bit about that in a second, impact, how many 134 00:05:58.900 --> 00:06:04.940 people do we reach now? And then, of course, the last one is how alive is the team that 135 00:06:04.940 --> 00:06:10.860 we lead. So we always talk about shiny eyes, we've talked about that in the first session, 136 00:06:10.860 --> 00:06:16.180 how alive is the team, because if we're doing the first two really well, making money, you 137 00:06:16.180 --> 00:06:20.300 know, impacting a lot of people, a lot of new customers, people are loving the products, 138 00:06:20.300 --> 00:06:25.340 loving the service we provide, really making progress, but the team's burnt out, the team's 139 00:06:25.340 --> 00:06:32.060 really struggling. And so a lot of what this training is about, is how do we move from 140 00:06:32.060 --> 00:06:40.940 just having success financially, to a team that can really perform in a way that produces 141 00:06:40.940 --> 00:06:48.220 a legacy, and in a way that really is sustainable. Because many times, the way we start a business, 142 00:06:48.220 --> 00:06:53.820 the way a small business kind of gets going and reaches profitability is not actually 143 00:06:53.820 --> 00:06:59.500 sustainable. In the long run, we do a lot of unsustainable things to get a business 144 00:06:59.500 --> 00:07:06.020 to get going. And so today, we talk a little bit about the those top two elements. So we've 145 00:07:06.020 --> 00:07:09.180 talked a little bit about the team's thing, we're going to get more into the team thing 146 00:07:09.180 --> 00:07:16.100 later when we deal with some more of the culture stuff. But today, we want to look at the money 147 00:07:16.100 --> 00:07:22.340 and impact side. So on the money side, I want us to have a very simple idea. So we 148 00:07:22.340 --> 00:07:28.420 call this simple idea of how to understand how we're doing the rule of three, it's a 149 00:07:28.420 --> 00:07:34.660 really easy way to understand financial statements. So maybe you've seen financial statements 150 00:07:34.660 --> 00:07:38.980 that look like this, and you go, I have no idea what any of that means, that's fine, 151 00:07:38.980 --> 00:07:42.180 we're going to really dramatically simplified, or maybe you've seen something, it looks a 152 00:07:42.260 --> 00:07:48.340 bit more like this. And again, that's hard to tell what's really going on. So the real issue 153 00:07:48.340 --> 00:07:55.700 is how can we make it much, much simpler. So the rule of three is that, because the mind can 154 00:07:55.700 --> 00:08:01.540 really remember three, this is also an easy way for you to manage your business as a leader or 155 00:08:01.540 --> 00:08:07.540 your area of the business, or just to know as a member of the team, how you're doing. If you're 156 00:08:07.540 --> 00:08:13.300 a solopreneur, then maybe you can use this as a simple way, remember three numbers in your head. 157 00:08:13.300 --> 00:08:18.180 And that way, you can really run the business from your head, an easy way to do people often 158 00:08:18.180 --> 00:08:22.900 say to me, how do you remember, you know, the numbers of the company, because, you know, I have 159 00:08:22.900 --> 00:08:27.300 memory for that. It's not really that I have a memory is that I've just figured out how to create 160 00:08:27.300 --> 00:08:33.059 three groups of three. So let's talk about how we do that. So there's three groups of three, 161 00:08:33.059 --> 00:08:38.500 the first three elements of a financial statement, tell us our profitability, 162 00:08:38.500 --> 00:08:44.100 how profitable are our goods and services, the next three, tell us how much of the money we made 163 00:08:44.100 --> 00:08:50.980 that we keep our efficiency. And the last one is about environment taxes, and you know, what state 164 00:08:50.980 --> 00:08:54.740 you're in, or what country you're in, and so forth. I'm not really going to concentrate much on that. 165 00:08:54.740 --> 00:09:00.100 But just for completeness sake, I'll throw that in. So you know, it's there. So let's take a second 166 00:09:00.180 --> 00:09:06.740 and do a very elementary beginnings of a, you know, profit and loss statement. So profitability 167 00:09:07.300 --> 00:09:13.700 is if we take the revenue, and we subtract the cost of goods, the cost to make the goods, 168 00:09:13.700 --> 00:09:20.020 so there was 20,000, we made 100, it cost us 20,000 to make it. And so we had a gross profit 169 00:09:20.020 --> 00:09:27.220 of $80,000. That's an 80% gross profit. So what does that mean? So the revenue is easy. That's 170 00:09:27.220 --> 00:09:33.700 all the money that came in that sales, cost of goods sold refers to the cost to make the sale. 171 00:09:33.700 --> 00:09:38.740 So that's got nothing to do with rent, or people's salaries, or any of those kind of expenses. 172 00:09:39.300 --> 00:09:46.100 What it's got to do with is what we call a variable cost. So let's say that I sell pencils, 173 00:09:46.100 --> 00:09:56.100 and each pencil costs $1. And it costs me 20 cents to make it, then the cost of good goods is 20 174 00:09:56.100 --> 00:09:59.940 cents. In other words, I made $1, it cost me 20 cents to make 175 00:10:00.000 --> 00:10:04.520 for pencil. So my gross profit is 80 cents. So the cost of goods 176 00:10:04.520 --> 00:10:08.760 refers to the more of those I sell, the more pencils I have to 177 00:10:08.760 --> 00:10:12.480 make, right. So the more so it's called a variable cost, because 178 00:10:12.480 --> 00:10:16.720 it's directly connected to the revenue. So if you do an online 179 00:10:16.720 --> 00:10:20.680 business, then cost of sales will include things like your 180 00:10:20.680 --> 00:10:24.920 ad cost, if you ran a lot of ads, and there's a correlation 181 00:10:24.920 --> 00:10:27.520 between how much money you spend on ads and how much revenue you 182 00:10:27.520 --> 00:10:32.360 got. So whenever this whenever the the cost is connected to the 183 00:10:32.360 --> 00:10:35.800 revenue, then that's cost of goods sold. So in other words, 184 00:10:35.800 --> 00:10:40.040 what did it cost you to generate the revenue? So ad costs, or 185 00:10:40.040 --> 00:10:44.800 maybe if you gave commission sales commissions, some people 186 00:10:44.800 --> 00:10:47.560 put that on expenses, I personally, from a financial 187 00:10:47.560 --> 00:10:51.400 management point of view said, did, did that cost me something 188 00:10:51.400 --> 00:10:54.400 to get the sale, if it costs me something to get the sale, I put 189 00:10:54.400 --> 00:10:59.080 it in here, the cost of itself. So in this little example, we 190 00:10:59.080 --> 00:11:02.960 have revenue of 100,000, the cost of goods sold was 20,000. 191 00:11:03.320 --> 00:11:07.440 And we made a gross profit at 80,000. This tells us we have an 192 00:11:07.480 --> 00:11:13.120 80% margin, that means that we have a very profitable service, 193 00:11:13.120 --> 00:11:17.240 we have a very profitable product. And so typically, once 194 00:11:17.240 --> 00:11:21.560 it starts dropping below 60%, it starts to get harder and 195 00:11:21.560 --> 00:11:24.720 harder. So if you have an online business, this number should be 196 00:11:24.720 --> 00:11:30.640 very high. I mean, there are companies like Red Hat, if you 197 00:11:30.640 --> 00:11:35.160 know who Red Hat is, Red Hat is, you know, a company that very 198 00:11:35.160 --> 00:11:37.080 few analysts can really understand, because they give 199 00:11:37.080 --> 00:11:41.080 away their software. And so they give away their software. And 200 00:11:41.080 --> 00:11:43.920 people say, how do you make money, I think 37 of the world's 201 00:11:43.920 --> 00:11:48.360 largest banks and insurance companies and so on, use Red Hat 202 00:11:48.360 --> 00:11:51.640 software, I think the New York Stock Exchange and Toronto and 203 00:11:51.640 --> 00:11:54.400 several of the world's stock exchanges run off Red Hat 204 00:11:54.400 --> 00:11:57.080 software, but they give the software away. So how on earth 205 00:11:57.080 --> 00:12:01.160 do they make money, they make money by providing services, 206 00:12:01.160 --> 00:12:04.600 it's all the customer services and support is where they make 207 00:12:04.600 --> 00:12:08.200 the money. Now, the interesting thing about Red Hat is over 90% 208 00:12:08.400 --> 00:12:13.360 margin. So that means it's a very profitable business. So 209 00:12:13.360 --> 00:12:17.920 exercise number one, for you as a team is to look at these three 210 00:12:17.920 --> 00:12:21.960 simple numbers, and say, what's our total revenue, total cost of 211 00:12:21.960 --> 00:12:27.120 goods sold, total gross profit, you know, do we have a profitable 212 00:12:27.120 --> 00:12:31.880 product. So they may need some adjustments, either we need to 213 00:12:31.880 --> 00:12:35.040 get the goods made more cheaply somewhere else, or we need to 214 00:12:35.040 --> 00:12:38.960 find, you know, a way to reduce the cost of sales, maybe you 215 00:12:38.960 --> 00:12:42.600 need to increase your prices, there, we have to run the 216 00:12:42.680 --> 00:12:48.600 business above a certain profit margin. And so this is the first 217 00:12:49.000 --> 00:12:52.600 element of the of everybody understanding these first three 218 00:12:52.600 --> 00:12:56.080 numbers. So the group of three, the first group of the group of 219 00:12:56.080 --> 00:13:00.120 three is this element. Okay, if you've got questions, be 220 00:13:00.120 --> 00:13:02.640 throwing them into the chat session, we'll grab them here in 221 00:13:02.640 --> 00:13:06.080 a second. The next group of three is efficiency. So notice 222 00:13:06.080 --> 00:13:08.520 that when we took the gross profit from the last slide, I'm 223 00:13:08.520 --> 00:13:11.200 going to bring it up as the first item on the next slide. 224 00:13:11.440 --> 00:13:14.720 And now we group these three together, we made a gross profit 225 00:13:14.720 --> 00:13:19.440 of 80,000, we had expenses of 70,000, it leaves us $10,000 of 226 00:13:19.440 --> 00:13:25.320 net profit. So that's 10%, 10% of the 100,000 of the original 227 00:13:25.320 --> 00:13:29.480 total amount of money that came in. So what, why do we call it 228 00:13:29.560 --> 00:13:34.480 efficiency, we call it efficiency, because really, it's 229 00:13:34.480 --> 00:13:39.520 how much money that you made, did you keep, and expenses, if 230 00:13:39.520 --> 00:13:44.360 expenses run away, and expenses include all what we call fixed 231 00:13:44.360 --> 00:13:48.360 costs, these are costs you have to pay, regardless of whether 232 00:13:48.360 --> 00:13:51.320 you make any sales or not, right, you have to pay the rent, 233 00:13:51.320 --> 00:13:54.280 you can't go to your landlord and say, sorry, I can't pay the 234 00:13:54.280 --> 00:13:58.000 rent this month, because there were no there was no revenue, I 235 00:13:58.000 --> 00:14:01.360 didn't make enough money. So you have to pay your salaries, the 236 00:14:01.360 --> 00:14:04.480 rent, there are fixed costs, you have to pay your internet costs, 237 00:14:04.480 --> 00:14:09.080 whatever these fixed costs that exist, those are your expenses. 238 00:14:09.280 --> 00:14:13.160 So those costs exist, no matter how much money you make. So 239 00:14:13.160 --> 00:14:17.120 that's what makes expenses different from cost of sales. This 240 00:14:17.120 --> 00:14:19.760 is usually where people get a bit confused is the difference 241 00:14:19.760 --> 00:14:23.200 between those two, because they both seem like expenses, right? 242 00:14:23.680 --> 00:14:28.360 So expenses are fixed costs that you incur, whether you make a 243 00:14:28.360 --> 00:14:31.520 sale or not. And then it leaves you your net profit, and your 244 00:14:31.520 --> 00:14:35.560 net profit is, you know, and so what we're looking for, to give 245 00:14:35.560 --> 00:14:38.800 you an example, and I'm sure you understand the concept is 246 00:14:38.800 --> 00:14:42.640 simple enough. But the real trick, the idea I was telling 247 00:14:42.640 --> 00:14:46.560 you about is, what we're looking for is a company just dropping 248 00:14:46.560 --> 00:14:49.360 back a second, we're looking for a company with a very high gross 249 00:14:49.360 --> 00:14:53.160 margin, we like to see 80 90% gross, but that's really good. 250 00:14:53.920 --> 00:14:56.960 And secondly, we want to see a company that runs very 251 00:14:56.960 --> 00:15:00.000 efficiently, and is keeping some of its profit. 252 00:15:00.000 --> 00:15:08.000 it. So if you ran a pizza franchise, you can expect if it's extremely well run, maybe 15% 253 00:15:08.960 --> 00:15:16.880 on this bottom line number, right? Maybe eight, 9%. It's very tough when you're doing because 254 00:15:16.880 --> 00:15:23.040 the pizza business has a very low margin. So the problem with the pizza thing, the pizza franchise, 255 00:15:23.040 --> 00:15:29.680 and I worked with franchise groups as part of my career, and I found that it's a very tough 256 00:15:29.680 --> 00:15:36.960 business because it relies on volume on a low margins. So going back to the first thing of 257 00:15:36.960 --> 00:15:46.080 profitability, what can we do for our business? If we're struggling to get the margin up? Well, 258 00:15:46.080 --> 00:15:52.160 he has three ideas on what you can do to make your business more profitable. To do that, 259 00:15:52.160 --> 00:15:55.920 I want to just bring up the simple idea. I think yesterday, somebody asked me about 260 00:15:56.640 --> 00:16:03.120 exclusivity or is there a way to how do we price products? Should I be raising my prices? 261 00:16:03.760 --> 00:16:11.200 And here's the whole concept of revenue and pricing. Idea number one is if you can control 262 00:16:11.200 --> 00:16:16.720 some element of your pricing, if you have price control, in other words, you do something that's 263 00:16:16.720 --> 00:16:24.160 so unique that you can push your prices up and the market will still sustain that, then that's 264 00:16:24.160 --> 00:16:30.080 called price control. That means you have something unique and therefore you can charge 265 00:16:31.120 --> 00:16:37.520 more and have a better margin. The other side of that scale is if it's what's called a commodity, 266 00:16:37.520 --> 00:16:41.680 that means pizza. If you're selling pizza, you can't say, well, you know, our pizzas are really 267 00:16:41.680 --> 00:16:47.040 good. We're going to charge $50 per pizza because you're going to sell exactly zero of those, 268 00:16:47.040 --> 00:16:52.320 no matter how amazing you think those pizzas are. So it's not about the quality, it's do you have 269 00:16:52.320 --> 00:16:57.600 price control? And one of the things investors look for, and you are the primary investor in 270 00:16:57.600 --> 00:17:03.440 your own business and your team by giving their ability and energy and time are also investing 271 00:17:03.440 --> 00:17:09.119 in your business. So as a team, we're investing in something. So you have to think like an investor. 272 00:17:09.680 --> 00:17:14.880 In other words, can we do something to our product to make it unique enough so we can get a little 273 00:17:14.880 --> 00:17:21.119 bit of price control? And so that's idea number two, is that what if you added something to your 274 00:17:21.119 --> 00:17:27.359 product or your service that makes it unique, that you bundle things together. And if you bundle 275 00:17:27.359 --> 00:17:33.920 things together, you create a bigger sense of value. So can you bring, you know, better value 276 00:17:33.920 --> 00:17:40.080 to your customer? Can you bring something unique so that it's not so easily comparable to anything 277 00:17:40.080 --> 00:17:48.480 else in the market? And the third idea is uniqueness. Can we be unique in something that we do? 278 00:17:49.360 --> 00:17:55.200 Somebody once said, you know, if you're the only hot dog stand in town, your hot dogs don't have 279 00:17:55.200 --> 00:18:01.200 to be that great, right? Because you're the only one, you're the one with the hot dog. So can you do 280 00:18:01.200 --> 00:18:06.080 something unique? So everybody says all about quality, quality, quality. This is true. We do 281 00:18:06.080 --> 00:18:10.640 want quality, we do want excellence of service and excellence of products. But when it comes to 282 00:18:10.640 --> 00:18:16.720 understanding margin, the real question is, can you do one of those three ideas? 283 00:18:17.680 --> 00:18:23.600 How are we doing on questions? Are we good? We have a couple questions. We have a question from 284 00:18:23.600 --> 00:18:27.680 Elaine who asks, what if your prices are fixed because you're in a contract? 285 00:18:30.880 --> 00:18:33.680 Somebody's contacted you to do something for some price? 286 00:18:34.480 --> 00:18:40.320 Yeah. Elaine, do you want to clarify in the chat? We build insurance companies and we're network 287 00:18:40.320 --> 00:18:47.200 providers. And so we have to, we were set. I mean, I'm negotiating every couple of years to 288 00:18:47.200 --> 00:18:56.080 make higher prices and the UCRs go up and all that, but there's not, we're set. We can't change 289 00:18:56.080 --> 00:19:00.000 that pricing. I mean, what you said afterward helped me realize like, okay, what other things 290 00:19:00.000 --> 00:19:06.800 can we do besides just what we do to more unique in our market? So I got to think of other revenue 291 00:19:06.800 --> 00:19:14.000 streams to add that, but it is a fixed, it is really fixed for us in insurance billing. 292 00:19:14.880 --> 00:19:20.080 Yeah. So one of the things Warren Buffett says is that the value of a business is, if you think of 293 00:19:20.080 --> 00:19:26.640 a sliding scale where commodity fixed, you have no control, which you've just described you're in, 294 00:19:26.640 --> 00:19:31.600 there's a commodity element all the way to the other one where you have what he calls a franchise 295 00:19:31.600 --> 00:19:38.640 control. That means you have control of your own prices. Most companies don't have a clean spot on 296 00:19:38.640 --> 00:19:44.160 that line. They're a blend. So you've just said, you've got something that's very commodity, 297 00:19:45.040 --> 00:19:49.680 whether you have no control of the pricing you, so they, the only thing you can control there is 298 00:19:49.680 --> 00:19:54.560 volume, right? So, but then you want to balance that with good service and so forth. So that's 299 00:19:54.560 --> 00:19:59.680 a limited aspect of the business. The question is, can you bring something that's unique, 300 00:20:00.000 --> 00:20:01.780 something that can be packaged in, 301 00:20:01.780 --> 00:20:05.580 something maybe that the customer can pay for separately. 302 00:20:05.580 --> 00:20:08.660 Is there a different revenue source that you can bring in 303 00:20:08.660 --> 00:20:10.620 that would pair it up? 304 00:20:10.620 --> 00:20:13.860 So, you know, can we provide a special training or a class 305 00:20:13.860 --> 00:20:16.460 or, you know, you have to think about 306 00:20:16.460 --> 00:20:18.140 what other thing you can do. 307 00:20:18.140 --> 00:20:22.860 And what this does is it moves so that the combined, 308 00:20:22.860 --> 00:20:25.100 the combination of the two will move you down. 309 00:20:25.100 --> 00:20:28.960 Obviously you wanna be way off on having price control. 310 00:20:28.960 --> 00:20:31.600 You don't wanna be in a strictly commodity business. 311 00:20:31.600 --> 00:20:33.920 And a strictly commodity business like, you know, 312 00:20:33.920 --> 00:20:37.120 pizza franchise, you're very much controlled, you know, 313 00:20:37.120 --> 00:20:41.880 when your competition is saying, you know, $10 for a pizza, 314 00:20:41.880 --> 00:20:44.640 it's very difficult to justify why yours wants to, 315 00:20:44.640 --> 00:20:46.720 why you wanna charge 15 or $20. 316 00:20:46.720 --> 00:20:51.720 So, but if you added other services in to that, 317 00:20:52.840 --> 00:20:57.840 into that, you can usually have some form of, you know, 318 00:20:58.040 --> 00:21:00.720 maybe a very unique topping that, 319 00:21:00.720 --> 00:21:03.400 some exotic toppings and whatever it is. 320 00:21:03.400 --> 00:21:06.400 I mean, I don't, I'm not a chef. 321 00:21:06.400 --> 00:21:07.800 Or it could be an experience, right? 322 00:21:07.800 --> 00:21:09.360 It could, you could be a movie, 323 00:21:09.360 --> 00:21:10.840 a movie place that has pizza, right? 324 00:21:10.840 --> 00:21:13.280 You could do an experience where we do a high-end vendor 325 00:21:13.280 --> 00:21:14.960 or we deliver, we set up a date night. 326 00:21:14.960 --> 00:21:16.880 You know, there's things that you could do, 327 00:21:16.880 --> 00:21:19.160 or if you did children therapy, 328 00:21:19.160 --> 00:21:21.680 you could offer a night out for the parents 329 00:21:21.680 --> 00:21:23.280 where they could drop their kids off, 330 00:21:23.280 --> 00:21:25.360 especially if they're more difficult children 331 00:21:25.360 --> 00:21:26.840 to get a night out, you know? 332 00:21:26.840 --> 00:21:29.240 So there's different innovative out of the box things 333 00:21:29.240 --> 00:21:30.320 that you could combine in there 334 00:21:30.320 --> 00:21:33.480 that may not usually be with your current product. 335 00:21:33.480 --> 00:21:35.160 We do have another, two more questions. 336 00:21:35.160 --> 00:21:37.000 We have one from Steven who says, 337 00:21:37.000 --> 00:21:40.360 would you put marketing teams, your media buyers, 338 00:21:40.360 --> 00:21:42.280 or your vendors that are running the ads, 339 00:21:42.280 --> 00:21:44.320 would you put them in cost of goods sold 340 00:21:44.320 --> 00:21:46.440 because they're tied to revenue? 341 00:21:46.440 --> 00:21:47.520 Yes, absolutely. 342 00:21:47.520 --> 00:21:52.320 I think in the online services space, 343 00:21:52.320 --> 00:21:55.560 I think all ad generational elements 344 00:21:55.560 --> 00:21:57.880 need to be under cost of goods sold 345 00:21:57.880 --> 00:22:00.400 unless there's a retainer. 346 00:22:00.400 --> 00:22:02.960 For instance, if you're paying your marketing organization 347 00:22:02.960 --> 00:22:05.120 $10,000 a month, which you have to pay them 348 00:22:05.120 --> 00:22:06.840 regardless of whether you make money or not, 349 00:22:06.840 --> 00:22:07.920 that's the key. 350 00:22:07.920 --> 00:22:08.840 That's the key question. 351 00:22:08.840 --> 00:22:10.240 That's the differentiator. 352 00:22:10.240 --> 00:22:13.480 Do I have to pay this whether we make money or not? 353 00:22:13.480 --> 00:22:16.480 Now, if you have to pay it, then it's expenses. 354 00:22:16.480 --> 00:22:19.880 If you only pay ads because it's connected to revenue, 355 00:22:19.880 --> 00:22:21.960 then it's cost of goods sold. 356 00:22:21.960 --> 00:22:24.760 So ad generation, you know, 357 00:22:24.960 --> 00:22:28.160 the more money they spend, you pay them a percentage, 358 00:22:28.160 --> 00:22:31.520 which is a crazy notion I've never understood. 359 00:22:33.000 --> 00:22:35.400 But nonetheless, I would put under cost of goods. 360 00:22:35.400 --> 00:22:37.480 What was the second one, Dea? 361 00:22:37.480 --> 00:22:39.920 Robin asked if you can reduce your cost of goods sold 362 00:22:39.920 --> 00:22:41.800 to increase your gross profit. 363 00:22:41.800 --> 00:22:42.840 Absolutely. 364 00:22:42.840 --> 00:22:44.760 So you want to reduce your cost of goods sold. 365 00:22:44.760 --> 00:22:47.640 So if you got those pencils instead of for 20 cents each, 366 00:22:47.640 --> 00:22:50.040 you can get them for 10 cents each or eight cents each. 367 00:22:50.040 --> 00:22:53.720 Obviously, you're always looking for improvement 368 00:22:53.760 --> 00:22:54.840 in your gross profit. 369 00:22:54.840 --> 00:22:57.840 So if your business is running at a gross profit 370 00:22:57.840 --> 00:23:02.600 below 40%, survivability is going to be tough. 371 00:23:02.600 --> 00:23:04.680 I can tell you it's very tough. 372 00:23:04.680 --> 00:23:06.200 You're going to have very little cash 373 00:23:06.200 --> 00:23:08.400 to be able to pay yourself, a team, 374 00:23:08.400 --> 00:23:10.640 because your team costs are going to be your biggest number, 375 00:23:10.640 --> 00:23:13.760 biggest expense, right, in a small company. 376 00:23:13.760 --> 00:23:15.600 So you're really going to limit the kind, 377 00:23:15.600 --> 00:23:18.000 you end up hiring people you can afford 378 00:23:18.000 --> 00:23:19.720 rather than people you need. 379 00:23:19.720 --> 00:23:22.120 And so, you know, you have to think of it. 380 00:23:22.120 --> 00:23:24.360 I want to make an earlier comment about 381 00:23:24.360 --> 00:23:26.440 if you have a commodity business, 382 00:23:26.440 --> 00:23:29.040 don't go and add another commodity to it 383 00:23:29.040 --> 00:23:30.080 to try to expand it. 384 00:23:30.080 --> 00:23:33.320 Try to do something that gives you more price control, right? 385 00:23:33.320 --> 00:23:36.000 Don't add one, don't connect two commodity 386 00:23:36.000 --> 00:23:37.200 because you want to bundle. 387 00:23:37.200 --> 00:23:41.160 It can work, but I don't think it moves the needle. 388 00:23:41.160 --> 00:23:44.200 The bottom line is, will it move the 80% and by how much? 389 00:23:44.200 --> 00:23:45.040 That's the bottom line. 390 00:23:45.040 --> 00:23:46.800 So that's the trick here, 391 00:23:46.800 --> 00:23:49.760 is we're taking the top three of the financial statement 392 00:23:49.760 --> 00:23:51.840 and we're getting the numbers down and we're saying, 393 00:23:52.520 --> 00:23:53.840 can we turn that dial, right? 394 00:23:53.840 --> 00:23:56.520 So gross profit is the first dial. 395 00:23:56.520 --> 00:23:59.200 The second one, when it comes to expenses, 396 00:24:00.160 --> 00:24:02.880 and this is what's really helpful to the team. 397 00:24:02.880 --> 00:24:05.880 If everybody knows and we put it all together and we say, 398 00:24:05.880 --> 00:24:08.800 hey, this is the bottom line, right? 399 00:24:08.800 --> 00:24:11.560 What we're doing is we're looking at the top three numbers 400 00:24:11.560 --> 00:24:14.040 and we're saying, hey, those top three numbers, 401 00:24:14.040 --> 00:24:17.080 we have an 80% profitability 402 00:24:17.080 --> 00:24:18.760 and the bottom three numbers, 403 00:24:18.800 --> 00:24:22.760 we have a 10% net profit. 404 00:24:22.760 --> 00:24:26.680 So we're only keeping 10% of all the money we're generating. 405 00:24:30.040 --> 00:24:32.040 10% isn't particularly bad, 406 00:24:32.040 --> 00:24:35.080 but we still got taxes, depreciation, 407 00:24:35.080 --> 00:24:38.200 other costs that you have to apply to that 408 00:24:39.200 --> 00:24:42.920 before you get to what's actually operating income. 409 00:24:42.920 --> 00:24:46.280 So the question you want to do is you want to look at, 410 00:24:46.280 --> 00:24:48.200 can we reduce expenses? 411 00:24:48.640 --> 00:24:50.120 How can we do this more efficiently? 412 00:24:50.120 --> 00:24:51.360 Can we automate? 413 00:24:51.360 --> 00:24:52.760 Can we outsource? 414 00:24:52.760 --> 00:24:57.760 So here's three ideas on how you can reduce your expenses. 415 00:24:58.480 --> 00:25:00.360 Idea number one, outsource. 416 00:25:00.000 --> 00:25:04.040 elements that are not core to your business. One of the first 417 00:25:04.040 --> 00:25:08.280 things I did when we when I came to Brilliant is we were also a 418 00:25:08.280 --> 00:25:13.000 book publishing house. We're a book publishing house, and we 419 00:25:13.000 --> 00:25:15.720 had all the other stuff Brilliant provided. And so the 420 00:25:15.720 --> 00:25:19.760 first thing we did is all the warehousing. So all that we 421 00:25:19.760 --> 00:25:24.320 found a company in Pennsylvania, called Stone Rooster, and we, 422 00:25:24.360 --> 00:25:28.160 you know, we went met with them, and we put a structure together. 423 00:25:28.320 --> 00:25:31.520 And so what that did is it allowed us to scale because we 424 00:25:31.520 --> 00:25:36.040 took something that really wasn't core to our long term 425 00:25:36.040 --> 00:25:39.600 vision, and we outsourced it was a bit more expensive, but it 426 00:25:39.600 --> 00:25:44.320 allowed us to reduce expenses. So now we had, you know, 427 00:25:44.320 --> 00:25:49.760 shipping and so on was was allowed us to, to scale. So 428 00:25:49.760 --> 00:25:52.880 that's first thing is can we outsource elements that we 429 00:25:52.880 --> 00:25:56.240 don't? Second thing, can we insource things that shouldn't 430 00:25:56.240 --> 00:26:00.200 be out? So there are elements of your business, you need to 431 00:26:00.200 --> 00:26:04.040 have internally in your organization, that you need to 432 00:26:04.040 --> 00:26:08.040 control because they're key to your business. So for us, we 433 00:26:08.040 --> 00:26:11.720 kept hiring at Brilliant, external companies to help us 434 00:26:11.720 --> 00:26:16.440 with ads. And we realized, that's a really bad idea. Ad 435 00:26:16.480 --> 00:26:20.000 generation is very core to what we do. So we invested 436 00:26:20.000 --> 00:26:26.320 specifically in there, to and myself and the team, to learn 437 00:26:26.320 --> 00:26:29.480 how to do this internally, so that we were in control. Now, 438 00:26:29.480 --> 00:26:33.040 can we get external help? Can we, you know, maybe your 439 00:26:33.040 --> 00:26:36.720 company's grown to the point that what started as an internal 440 00:26:36.720 --> 00:26:42.480 necessity, at some point can be outsourced? Can we outsource? 441 00:26:42.480 --> 00:26:46.920 Can we insource? And then can we just delete? You know, sometimes 442 00:26:46.920 --> 00:26:49.680 we'd get things in our minds, stuff gets a life, right? I'm 443 00:26:49.680 --> 00:26:52.440 sure you all have this in your business, you've always paid for 444 00:26:52.440 --> 00:26:55.800 this, we've always had this office, or we've always had this. 445 00:26:56.120 --> 00:26:58.920 And then somebody says, well, why do we need them at all? And 446 00:26:58.920 --> 00:27:03.200 it's a very helpful conversation to just say, do we actually need 447 00:27:03.200 --> 00:27:09.080 this? And can we delete this? So, you know, sometimes the 448 00:27:09.080 --> 00:27:12.000 deleting is joining several things together, instead of 449 00:27:12.000 --> 00:27:15.240 having product A, B, and C, what if we just bought D, which is a 450 00:27:15.240 --> 00:27:19.640 bit more expensive, but replaces the cost of the other three. So 451 00:27:19.720 --> 00:27:24.320 expenses can be very, I think, being creative, that's why we're 452 00:27:24.320 --> 00:27:27.920 going to talk about innovation at every level. It's innovation 453 00:27:27.920 --> 00:27:31.040 on revenue, how do we make more money, innovation of cost of 454 00:27:31.040 --> 00:27:34.640 goods sold, can we manufacture cheaper or get, you know, a 455 00:27:34.640 --> 00:27:37.480 better way to do that make it more efficient? Can there be 456 00:27:37.480 --> 00:27:42.080 innovation around expenses? Can we outsource, insource, combine 457 00:27:42.080 --> 00:27:46.720 things, delete things. So when the team has this picture of 458 00:27:46.720 --> 00:27:52.760 just these five numbers, these five numbers, in the groups of 459 00:27:52.760 --> 00:27:57.960 three that we've just explained, builds trust, because it gives 460 00:27:57.960 --> 00:28:03.280 the team context to what we're doing as a business, how we're 461 00:28:03.280 --> 00:28:07.160 making money, when I am as a team member, are calling less 462 00:28:07.160 --> 00:28:10.240 meetings, and therefore driving less expenses. So in one of our 463 00:28:10.240 --> 00:28:14.520 teams, we worked out that the average one hour meeting costs 464 00:28:14.560 --> 00:28:19.680 us $2,300 per person. That's one of the quick exercise I always 465 00:28:19.680 --> 00:28:23.640 do, by the way, I walk in, just take the total salaries, and 466 00:28:23.640 --> 00:28:27.040 divide it by and get it down to an hourly rate. And then ask 467 00:28:27.040 --> 00:28:30.120 that I asked the leaders just for one week, track the number 468 00:28:30.120 --> 00:28:33.880 of meetings you have meetings is one of the first things you can 469 00:28:33.880 --> 00:28:38.680 delete. In fact, most meetings can be deleted, and reduced with 470 00:28:38.720 --> 00:28:42.480 down to a 10 minute, you know, stand up connection very easy. I 471 00:28:42.480 --> 00:28:44.400 know some companies have completely done away with 472 00:28:44.400 --> 00:28:47.880 meetings, it's actually possible. So you know, it's 473 00:28:47.880 --> 00:28:50.200 death by meetings. And we'll talk about that in another 474 00:28:50.200 --> 00:28:54.120 session, session, how meetings are one of the most expensive 475 00:28:54.120 --> 00:28:58.640 elements, because we often don't think of meetings. I know that 476 00:28:58.640 --> 00:29:03.840 in a big consulting firm I was talking to, they say they can 477 00:29:03.840 --> 00:29:08.800 have anywhere between 40 and 80 people on a meeting on an online 478 00:29:08.800 --> 00:29:12.760 call. And I'm thinking, what on earth does that call cost? And 479 00:29:12.760 --> 00:29:15.680 they say, Oh, you can go for two hours. So I'm thinking we're 480 00:29:15.680 --> 00:29:18.240 blowing through hundreds of thousands of dollars in 481 00:29:18.240 --> 00:29:23.200 meetings, right? So we'll talk a lot more about meetings. But 482 00:29:23.200 --> 00:29:26.520 that's a quick, easy way to get rid of expenses. How many 483 00:29:26.520 --> 00:29:30.000 meetings do we have, try to figure out, you know, look at 484 00:29:30.000 --> 00:29:32.640 the people attending it, take a quick guess at you know, what 485 00:29:32.640 --> 00:29:37.160 the total salary is, and have a cost per meeting. And so what I 486 00:29:37.200 --> 00:29:43.200 did for the 100x group is when we worked at our meeting cost, 487 00:29:43.200 --> 00:29:46.200 we realized that every time we ran a meeting with so many X 488 00:29:46.200 --> 00:29:50.000 amount of people, we had just blown through six of our 489 00:29:50.000 --> 00:29:53.480 products we sold at conference. So I reduced instead of saying 490 00:29:53.480 --> 00:29:58.720 dollars, I divided it by, like, if you have $1,000 product, and 491 00:29:59.000 --> 00:30:00.080 and you're burning 492 00:30:00.000 --> 00:30:04.800 through $2,000 in a meeting, you just burn through two products. You burn through two sales. 493 00:30:04.800 --> 00:30:08.800 It's a fun way to help you understand your expenses. How many sales did we just burn 494 00:30:08.800 --> 00:30:15.040 through in that meeting? Very, very. We do have one quick question and then we've got to 495 00:30:15.040 --> 00:30:20.320 get onto the triple bottom line because we need to get to breakout rooms. But the question was 496 00:30:20.320 --> 00:30:25.120 really briefly, what are your recommended percentages to shoot for for gross profit and net profit? 497 00:30:26.080 --> 00:30:34.000 I mean, I think that, as I said earlier, 60% would be the lowest gross profit that I'd like to see. 498 00:30:34.640 --> 00:30:40.080 And on the net side, I mean, 10 to 20% is a great number. You can do a lot better if it's 499 00:30:40.080 --> 00:30:44.640 like an online business or it's a very efficient company with low expenses. If you're a sole 500 00:30:44.640 --> 00:30:48.800 preneur, that can be because normally sole preneurs don't put their own salaries. That's 501 00:30:48.800 --> 00:30:55.440 just their profit is their salary. So that number should has to be a lot higher if you're just new. 502 00:30:56.240 --> 00:31:00.560 So let me go through a couple of things. So we talked about how much money we make and we talked 503 00:31:00.560 --> 00:31:06.240 about the rule of three and then how many people we reach. We're going to talk 504 00:31:06.240 --> 00:31:11.440 about that just very, very briefly because you're going to discuss some of these questions in 505 00:31:11.440 --> 00:31:17.120 your breakout session. So is what we're offering bringing real value to people? 506 00:31:17.760 --> 00:31:23.120 How can we make it better and how can we make it more convenient? So you can see what we're 507 00:31:23.120 --> 00:31:30.480 focusing on here is can we increase the top of that the first group of three? So I'll take 508 00:31:30.480 --> 00:31:39.520 another question or two and then we can go into the breakout. Okay, actually, Dion, if you 509 00:31:39.520 --> 00:31:45.280 were a little over time, so do you want to just go ahead and continue on that or are we 510 00:31:45.280 --> 00:31:52.240 ready to go to breakout now? Yeah, so I think we're okay time wise. We can probably take it 511 00:31:52.240 --> 00:31:56.480 for another two minutes and then we'll go into breakout. So maybe take another question or two. 512 00:31:57.120 --> 00:31:59.600 Okay, anyone have any other questions? 513 00:32:05.360 --> 00:32:09.040 I think there's some just looking through. Yeah, I think the, 514 00:32:10.160 --> 00:32:13.520 yeah, sounds like you guys have your questions on. Anybody else? 515 00:32:15.280 --> 00:32:19.920 Cool, so does that help you understand what you're doing and have these are sort of like the quick, 516 00:32:21.040 --> 00:32:28.080 you know, the best role if you're an accountant or a bookkeeper or a CFO in a company, 517 00:32:28.080 --> 00:32:32.880 the most powerful thing you can do for your team members is give them these metrics. Tell them 518 00:32:33.440 --> 00:32:38.400 how they're doing financially. Your job isn't just to collect the receipts and file the taxes 519 00:32:38.400 --> 00:32:44.800 and so on. Your job is to empower leaders with the numbers they need to be successful. Empower 520 00:32:44.800 --> 00:32:52.080 your team with numbers so they can see what's going on. Robin? Yeah, I had a quick question 521 00:32:52.080 --> 00:32:59.840 regarding the expenses. The expenses are one number and yet how would the rest, if that's 522 00:32:59.840 --> 00:33:05.520 the only number that's shared, how would the rest of the team know where the fat is, quote-unquote, 523 00:33:05.520 --> 00:33:12.720 in the expenses? I think that the expense, keeping it as one big number, I mean, if you want to and 524 00:33:12.720 --> 00:33:18.720 you want to break it out as like team costs versus other costs or, you know, G&A and admin 525 00:33:18.720 --> 00:33:24.880 costs, you can do that. But I found that at the end of the day, expenses are expenses and people 526 00:33:24.880 --> 00:33:30.080 will understand that the biggest part of that is going to be team costs based on the nature of the 527 00:33:30.080 --> 00:33:42.160 business. So I think that, you know, it's less about, you know, trying to keep this short. So 528 00:33:42.960 --> 00:33:48.480 I think we'll talk about other strategies later about what we can do with team costs when things 529 00:33:48.480 --> 00:33:53.920 get tough, you know, in a market. Maybe we can bring that up as a special question. And there 530 00:33:53.920 --> 00:33:58.320 are things you can do with team costs that can be a lot smarter. Later on we'll talk about how 531 00:33:58.320 --> 00:34:05.200 to structure compensation, bonuses, incentives, that kind of thing. In that space is a great time 532 00:34:05.200 --> 00:34:06.960 to talk about how to lower team costs.