Episode Transcript
[00:00:00] Speaker A: Welcome back to Leading with Grace, Grit and Greatness. Don't miss a second of this show or any other NOW Media television favorite today. I want to begin with leadership truth that many business owners learn the hard way. Passion can start a business, but clarity, let me tell you, that is what sustains it.
A leader can have the vision, the work ethic, the clients, and even the revenue. But if the financial foundation is unclear, let me tell you that business can feel stressful, unstable and harder to lead than it needs to be. I am so honored today to have this amazing cpa Harsh Dadav. He is a partner at my Profit Guru. Harsh brings more than 25 years of senior leadership experience across the IRS, that entity that we really don't like talking about the Acera, Doylen and Touche, Ernest Young, Intel, American Express, just to name a few. He's also a cpa, a cgma, a cisa, a cfe, a published author, a trusted educator, a faculty member at the University of California, Berkeley and Menlo College.
Let me say this. What's going to make this conversation so powerful is that Harsh just does not understand numbers. He understands the leadership and the decisions behind the numbers. So today we're going to talk about how business owners can lead with financial clarity, integrity, discipline and confidence. Harsh, welcome to Leading with Grace, Grit and Greatness.
[00:01:28] Speaker B: Hi Vikita, thank you for having me.
[00:01:30] Speaker A: Thank you so much. We're going to delve right into this because most people really don't understand the importance of financial education and financial literacy when it comes to their business.
As we begin, I want everyone watching to think about your business organization or your team that you're leading right now and are you making decisions from a clear financial truth or from pressure, assumptions or hope? So this segment, we're really going to talk about financial clarity as leadership's responsibility. This conversation is going to explore entrepreneurs, how busy they are, but not financially grounded, which we know can be detrimental to their business, how confusion you know when it comes to money and how it affects our confidence and decision making and why leaders must truly understand the story behind the numbers they're telling before they can build a sustainable growth.
So let's jump into this, Harsh. When you look at small businesses that are struggling, what are the financial blind spots that you see often?
[00:02:30] Speaker B: You know, Vakitha, I think the biggest blind spot is that many owners actually don't know their numbers and where they make money. I think small business owners know their sales figures and how much is in the bank, but they don't always know whether they're profitable or not. You have to really dig deep to understand your profit margins, your true inventory and service cost, profitability by service line, maybe customer or project. And I don't think many entrepreneurs even started a plumbing company or a medical practice business because they dreamed of reading financial statements. But the numbers tell the story. I'll sit down with a business owner who's doing $3 million a year, working nonstop, stressed out every day. And when they dig into the numbers, we find out that maybe 20% of their customers are creating 80% of their headaches and barely any profit. So I think another huge blind spot is cash flow timing. A business can look profitable on paper, but still be starving for cash because money's coming in too slowly while payroll taxes, vendors, and debt payments keep hitting every month.
[00:03:34] Speaker A: Right? And I think one of the things too is, you know, as entrepreneurs, you know, they have a great idea, they're learning to turn their, their passion into a profit, right? But they don't really understand what that means as being a business owner. So why do you think so many business owners confuse revenue activity with true financial health?
[00:03:51] Speaker B: Well, that's a great point. You raise. And I think, you know, it's because revenue is exciting, right? Revenue feels like momentum. More calls, more customers, more deposits. It creates kind of this illusion that the business is winning. And I've seen companies double the revenues while becoming less profitable. Sometimes growth creates some complexity faster than infrastructure can actually handle it. You know, you got more employees, more mistakes, more overhead, more taxes, and more operational inefficiency. And I think many owners are celebrating sort of the top line growth while their margins are like declining. And I always tell clients, revenue is vanity, cash flow is reality.
And it's the company that's generating consistent profit, maintaining healthy cash reserves, controlling debt, and giving the owner peace of mind that they're actually really winning.
[00:04:42] Speaker A: I love that. I love that. So what are some of the numbers that every leader should understand before making major decisions in their business?
[00:04:51] Speaker B: I think there are a few numbers every leader absolutely needs to understand before hiring, expanding, or scaling. First is cash flow, not just profit, but actual cash movement. Can the business support the decision without creating any financial strain? Second is gross profit margin. That number tells you whether the core business model is even working. If margins are weak, scaling usually magnifies the problem instead of solving it. And third is the overhead percentage. Many companies slowly bleed profitability as expenses creep up quietly over time. And I'm talking about software subscriptions or maybe expanding payroll or unused services, or just being inefficient in your system. It's almost like death by a thousand cuts. And then I look at customer concentration, recurring revenue. If one customer disappears, could that create panic for the company? That's the risk issue leaders really need to understand before making aggressive moves.
[00:05:45] Speaker A: Yeah, that's so good. That's so good. I think oftentimes small business owners, they don't have the capacity or the means to hire a CFO or someone that overlooks their finances. But they really don't take the time to do their due diligence to really seek out a good cpa.
What do you think creates so much financial confusion? The way that a leader shows up for employees, clients, or even their family when we're talking about money. Right. Money is a stressful conversation. So how does that create that confusion from your perspective?
[00:06:19] Speaker B: It really actually affects everything. I think when leaders lack financial clarity, they operate from stress rather than from confidence. And people around them feel it, employees feel it, clients feel it, families definitely feel it. I've seen business owners become short tempered, distracted, you know, emotionally exhausted simply because they are constantly feeling this uncertainty in the background. Then they don't know if they're truly okay financially. So every unexpected expense feels almost like a threat.
[00:06:47] Speaker A: Right.
[00:06:47] Speaker B: And then financial confusion creates like, you know, some decision fatigue. Right. We've got leaders who start delaying decisions or avoiding conversations and reacting emotionally instead of strategically. And the hard part is that many successful owners look fine from the outside, but the business appears busy. Revenues look strong, but internally they're really carrying this enormous pressure because they really don't fully trust the numbers.
[00:07:10] Speaker A: Right.
That's very good. So I think one of the things that we need to kind of delve into with business owners is we know they are going to get overwhelmed. Right. You know, they've got employees, they got family. You know, most business owners start their businesses with their own particular capital. You know, now they're realizing that they can't do it all, they've got to hire a team. Now you're talking about payroll and payroll taxes and you know, depending upon your state workers compensation, that those conversations that they may not be knowledgeable about are stressful in themselves. What is the first step a business owner should take when they know they need more clarity but are feeling overwhelmed by the numbers?
[00:07:49] Speaker B: I think the first step is to stop trying to solve everything at once.
Most business owners get overwhelmed because they think they need to become accountants overnight. Right. And they really don't. They just need some visibility. Now I usually tell owners that to start with three simple questions, where's my cash going?
Am I profitable? And what financial problems keep repeating themselves. That alone creates some awareness. And then when building a, then they could probably think about building sort of a simple financial dashboard. Not a 40 page document that nobody reads, but just a handful of meaningful numbers that are constantly reviewed, maybe every week, every month. And we talk about cash flow, profit margin, debt, like the payroll percentage and you know, potentially your tax exposure. And the key is consistency, not complexity. Right. So it's honestly, this is where a good advisor matters. You mentioned that earlier, a CPA today should do a lot more than prepare taxes. The right advisor helps translate the numbers into decisions and, and they help owners look around the corners before problems actually become a crisis.
[00:08:50] Speaker A: That's great. You know, I oftentimes say that you need to do have, you need to have a fist in business. You need a good cpa, you need a good banker, you need a good attorney, you need a good HR person and you need a good mentor. Right. And oftentimes we are trying to be the jack of all trade and the expert in none. So, you know, thank you for that. And I agree with you. I think a CPA should be somebody that can help you strategize as your starting your business and growing. Like what is your long term goal? This is a partnership. This is again, like you said, not someone that's just doing your taxes. So what I hear in the first part of this conversation is that financial clarity is just not about judgment. It is definitely about leadership. When we understand the numbers, we can make decisions with more confidence, more honesty and more peace. And peace is what we need when we're trying to run businesses. We're going to take a short back and break and when we come back, we're going to talk about profitability and why a business can look successful on the outside but still be struggling behind the scenes. We'll be right back.
Welcome back to Leading with Grace, Grit and greatness. Stay connected to this show and every NOW Media Television favorite live or on demand, anytime you like. Download the free Now Media TV app on Roku or iOS and unlock nonstop bilingual programming in English and in Spanish on the move. Catch the podcast version at www.nowmedia.tv. from business to news, lifestyle, culture and beyond, Now Media is streaming around the clock, ready wherever you are.
So I'm going to jump back into this phenomenal conversation with Hosh. He is the cpa. I'm sorry, he's the partner, phenomenal CPA of my profit gurus. And now I want to Move back into a word that every business owner cares about, but many do not fully understand profitability.
A business can be busy, visibly respected, and still not be profitable in a healthy way. So this segment is about moving from panic to planning, from guessing to knowing, and from chasing sales to building a business that actually supports the people and the purpose behind it. This segment should connect profitability to leadership maturity. The conversation should explore more about margins, prices and expenses, cash flow, emotional decision making and discipline required to build a business that is not only growing, but stable and will be sustainable. The key tension is that business owners often want growth, but growth without profit can be more of a pressure instead of freedom.
So let's just jump into this harsh. What do you think some business generate such strong sales but struggle to create a real profit?
[00:11:33] Speaker B: That's a great question, Vakita. And I think it's because sales can mask many of those operational problems. I've seen businesses with packed calendars, nonstop activity and impressive revenue numbers quietly lose money beneath the surface. I think the owner is exhausted, right? The team is busy, but the actual profit is thin and nobody's paying attention to the margin, the efficiency or the overhead. I think a lot of companies add staff too quickly. They start to underprice their services, discount too often, and then take on what creates like revenue, but not really any profitability. And sometimes the issue is even emotional. Business owners are afraid to say no. They keep every client, every service, every expense expense because activity feels safe. But not all revenue is good revenue. And I'll tell clients if growth is worth creating more stress than freedom, something underneath the business model needs more attention, right?
[00:12:26] Speaker A: That's so good. I think oftentimes when businesses first start, they're doing everything they can to get clients, maintain clients. They hold on to clients and customers that maybe they shouldn't. They take on clients that they maybe should not.
But they don't really understand the pricing. So what would you say to a business owner about pricing? About how should they be pricing their goods and services and when they should assume that they need more customers or clients?
[00:12:51] Speaker B: You know, it's interesting that most businesses actually do not have a customer problem. They actually do have a pricing problem. Remember, pricing is not just about covering cost. Pricing reflects your positioning, your confidence and the value creation. And I think owners often believe that the solution is more volume, right? Because raising prices feels very uncomfortable, right? But if your margins are weak, adding more customers can actually magnify the problem.
Now you have more work, more pressure, more operational complexity attached to some weak profitability. And if a company consistently delivers results, solves meaningful problems, creates a strong customer experience, and competing only on price becomes pretty dangerous.
[00:13:33] Speaker A: Right?
[00:13:34] Speaker B: And that's a race typically to the end, you know, where you can probably end up with some level of burnout and I think even, interestingly, with the owners who have increased profitability dramatically without adding a single new customer. And that's important to know because it doesn't mean that you're always gaining more customers, but you're optimizing the customers you have. So they simply prove their pricing strategy and tighten operations, and we're far more profitable than being on the grind of trying to pick up new clients.
[00:14:02] Speaker A: Yeah, that's so good. Oftentimes, you know, business owners think that, you know, I've got to have, you know, hundreds of thousands of clients. Right. And I think you just provided the answer that most business owners, and I hope everybody's taking, you know, copious notes on this. What they need to really be able to do is really kind of assess what they are charging. These particular clients instead of trying to have more clients should be better clarity on what they are charging.
Let's talk about expenses, right? Because all of this ties into profitability. How do expenses quietly grow in a business where there is no clear system to review?
[00:14:34] Speaker B: Yeah, a great question. I think nobody wakes up in the morning and decides to waste money, right?
One subscription here, another software platform there, maybe some extra payroll, some duplicate systems, and expenses start to grow slowly over time, then they accumulate, and then they really start to eat into some of the business profits. I think that's what makes it dangerous. You know, in our firm, we call it financial drift. And it's because businesses get busy. And when leaders start constantly operating in reaction mode, expenses stop being questioned. Over time, the company develops some layers of cost. They really don't create any meaningful value. You have things like subscription creep, which is a major problem today. Many business owners just sign up for magazines and software subscriptions they never use. These things really add up. And without a regular financial review, businesses start bleeding cash and the owner barely notices.
[00:15:25] Speaker A: Right. I think oftentimes too, what we're talking about things that business owners are just may not be knowledgeable about. Right? We're talking about profitability, we're talking about pricing, we're talking about, you know, financial awareness, we're talking about cash flow. Some of these things they may not even be aware of. So let me ask you this. What role does cash flow play in emotional pressure? Right. And, and, and how do business owners carry it and how Would you recommend that you would assist them with trying to, you know, navigate through the complexities of cash flow?
[00:15:58] Speaker B: Yeah, I think cash flow affects every emotion inside the business, whether the owner actually realizes or not. I think when cash flows are unstable, even successful people start operating from fear. Every payroll feels stressful, every surprise expense feels personal. And I think every slow paying client actually creates some level of anxiety. And the difficult part is that many owners hide that pressure pretty well. Outwardly they look successful, Internally they're carrying this huge mental tension because they don't really feel financially secure. I've seen business owners lose sleep while running companies that on paper look super profitable. And then I think when leaders know they don't have enough cash, when they have enough cash reserve, they have enough margin, they have enough visibility into the future, they start to really think differently and they become calmer, more strategic and less reactive.
[00:16:48] Speaker A: Yeah, that's good because you talked about the emotional pieces of it, like losing sleep and stressed out, but from a different perspective. We've seen leaders, I'm sure you can attest to that, have heart attacks and strokes because this is their business is everything.
And it starts to impact them emotionally, which we know emotionally starts to impact them physically. So let me ask you this particular one, since we're talking about that and we're talking about profitability.
How can a leader pursue profitability without losing compassion and fairness and commitment to just the, not just the customers and clients, but the people, the employees that work for them or anybody that they're served?
[00:17:29] Speaker B: I actually think that the business can do both. And there's sometimes this false idea that profitability and compassion for your employees are mutually exclusive. And we know that's not true.
[00:17:38] Speaker A: Right.
[00:17:38] Speaker B: I find that, you know, sustainable, profitable, enables profitability, enables businesses to actually better care for their people in the long term. And I think a financially healthy company can hand their employees well, invest in training, improve customer service, support the families, contribute to the communities, and even survive, you know, some difficult economic periods, like Covid.
[00:17:58] Speaker A: Right.
[00:17:58] Speaker B: And the problem happens to be when leaders chase profit without purpose, people will feel immediately that employees feel like a number, customers feel transactional and that trust completely disappears. But I think strong leaders understand that profitability is not greed. Profitability, stability. I tell business owners all the time, your business has to be healthy before you can really, truly help others consistently.
[00:18:21] Speaker A: Absolutely, absolutely. So we know profit is just not a financial result. It's a leadership signal. It tells us whether the business model is strong enough to support the mission, the team, customers, clients, the future. We're going to take a short break, but when we return, we're going to explore financial integrity, compliance. Everybody doesn't like that C word, but compliance and why the right systems protect not only the business, but the trust, the trust that the people that you have in place we oftentimes talk about your employees are your greatest asset, but do you trust them? We'll be right back.
Integrity, compliance, and the systems that protect trust.
We're going to really kind of talk about the trust that requires structure. So if you are leading a business, a nonprofit, or any organization where people depend on your decisions, this is the part of the conversation to really lean into. Trust is so powerful, but without trust, without it, structures can leave businesses exposed.
I'm continuing this phenomenal conversation with Harsh, whose background includes the irs, global consulting firms, auditing, fraud, examination, information systems, and most importantly, business education.
Now I want to talk about the systems that protect trust, the compliance controls, the documentation, the accountability, and financial integrity. This segment should position compliance and internal controls as leadership tools, not administrative burdens. The conversations is going to explore what Harsh has learned from his IRS audits.
Listen, we all want to know that particular information.
What fraud, his advisory experiences, and why small businesses often delay structure until something goes wrong. And now we're looking for someone to fix it. But how can leaders protect their organizations without creating fear of bureaucracy? The emotional core is trust. Leaders need systems that make integrity visible. So, Harsh, tell me about your experience with the IRS and the audit environment, and what mistakes did you see business owners make and why they were so often underestimated?
[00:20:39] Speaker B: Vakita, that's a great question. And I think the biggest mistake is assuming the problem stays small.
Most financial disasters actually don't begin with one massive event.
It began with small issues that were ignored for too long. Poor documentation, maybe some weak oversight, payroll mistakes, and commingling personal and business expenses.
Business owners often underestimate how quickly minor control weaknesses can actually escalate into a costly problem. And honestly, many, many owners are actually overly trusting that because they're focused so much on growth, growth and customers and operations, they assume that if revenue comes in, everything underneath must be working properly. And that's a dangerous assumption, right? I've seen situations where businesses were profitable but lacked real internal controls like separation of duties and visibility into where the company was or actually where the money was actually going. It just creates enormous vulnerability.
[00:21:37] Speaker A: Yeah, it's, that's so good because documentation, documentation, documentation, you know, I tell you, I tell clients that all of it, all the time. If it's not documented. It doesn't exist. That's not what I know. It's what I can prove. Right.
Why do you think small businesses are more vulnerable to fraud and management mistakes or even financial breakdown?
[00:21:57] Speaker B: I think we focus, for us, we focus a lot on employee fraud. And it's the combination of financial pressure on employees, the opportunity to commit the fraud, and the way the employees actually rationalize their entitlement to the money. And in the accounting world, we call it the fraud triangle. I've seen this happen with many employees where I shouldn't say many, but it happened with a few employees who work with the company. One particular where they work with the company for 25 years. And it was somebody that the owner completely trusted. In this case, the company was a restaurant and employee was a cashier and she wouldn't record some of the cash transaction. And we just pocket sale. We found that when we were hired to handle the tax returns, we identified this huge discrepancy between the sales deposits and the amounts that were actually reported for sales tax purposes. And then we asked her about it. She came clean and mentioned that her son had a gambling problem and that she had. She needed just some opportunity to pay off the debts because the owner trusted her and she also handled the bookkeeping. The owner had no idea this was happening. She rationalized that it was okay to take the money since the owner never really increased her salary after his wife passed away. And then she took over some of the accounting duties. So I think, you know, we can see that small businesses owners, you know, they move fast.
Owners often prioritize, maybe the convenience over controls. And, you know, they rely on trusted employees to handle the key roles like bookkeeping, deposits, payroll, vendor payments. And I think that could be a real audit issue potentially.
[00:23:29] Speaker A: Right. I think that's why it's so important to have that good partnership. Right. Because your CPA or your other people that I said that's your fist. Will be able to look at some things that maybe you're not looking at or focus on some things that you're not focused on. And so I think it's really important for this audience to really be able to understand as leaders, you have to look at your CPA differently. If this is not your financial partner, then you've got the wrong cpa.
And so you want to make sure that you have the communication, the consistent, I call it the three Cs, communication, consistency and compliance. And your team, your core team that surrounds yourself with should be those individuals that are supporting you so you don't feel like you're carrying this mantle alone. So let me ask you another question. What makes a small business so vulnerable when it comes to accountability and why leaders don't want accountability and they're creating a culture without it?
[00:24:20] Speaker B: Yeah, that's a tough question. Right. When you talk about vulnerability overall, I mean, I think that they, it's the lack of education sometimes I think that comes into play. I think business owners, they are good at what they do. They know their craft extremely well. But when it comes to understanding controls, understanding accounting in general, understanding, you know, really how you build a control environment that supports your business prevents, you know, potential fraud, potential, you know, errors even where, you know, that could be a problem, where, you know, somebody makes an error because there's lack of a system or lack of documentation, which you mentioned earlier. I, I also like what you said about the three Cs. I think that's a really nice way to look at culture in general and how companies really need to build, you know, around their internal controls, actually benefit their. Benefit their own business so they can. All that hard work they're putting in, you know, they're not going to lose
[00:25:10] Speaker A: it to something that that's what, what would you tell a business owner? Right. Because I think you said a lack of knowledge. Right. And we, we understand that. We understand that business owners will turn, we talked about this earlier, passionate to a profit. They may not know anything about running a business. They may not know about finances or, or some of the other things that will make them have a sustainable business.
What would you say to that business owner to say, listen, it's okay not to know what you don't know?
[00:25:37] Speaker B: Yeah. And it is okay. Just like, you know, if you're talking to a doctor or you're talking to an engineer. They know their craft. We rely on them to do the work properly. But we ourselves are not going to be probably the experts in the field.
[00:25:48] Speaker A: Right.
[00:25:49] Speaker B: I think, you know, from, from our side. Vikita, you're an HR expert. I'm more on the finance side of it. I think, you know, when we talk to our clients, they rely on our expertise. And that's okay. It's okay to give a control, have an expert work on it. Even me as a cpa, you know, if I am not really familiar with that area of tax law or that area of accounting, I'm going to refer it to another CPA to actually handle it. I think we work as a team, you know, we're actually, we're all going to provide our own value. But we want to make sure we don't overstep and try to do or promise things that we're not really, you know, skilled in. So I think that's a great question you're asking.
[00:26:22] Speaker A: I think it all lines up with what we talked about earlier too is having not just the systems and the processes in place, but having the right people to support you while you're navigating being a business owner and continuing to grow. Because you may start at one level, but as you continue to grow and excel, and you would want to make sure that this same team is the same team that can help you go to that next level. So let me ask you this particular question. When we're talking about systems for growth, what systems do you think business owners should put in place before growth in order not to make the business harder to control?
[00:26:59] Speaker B: I think this is one of the most important questions for business owners to ask because growth magnifies actually some weaknesses. And before scaling, businesses need to have strong financial reporting systems, clear approval processes, documented workflows, cash flow forecasting, and defined roles and responsibilities. And I can't underestimate the fact that they need to have somebody like you in the loop that really talks about the HR aspect of it. It's not only the control side of it, but it's for your employee growth. They also need some visibility. Owners need to be able to quickly understand key metrics like profitability, receivables, payroll trends, debt exposure, cash reserves without really digging through the chaos.
And another major system is like separation of duties. And this is hard for small businesses. They don't have a lot of employees, but they need to build a system that of checks and balances as early as possible. The same person should not be controlled of every financial process from beginning to end. And honestly, I think, you know, communication systems matter just as much as financial systems. As businesses grow, you know, confusion increases.
You have, unless you have like or unless you have some expectations, you are very clear processes. You know, you have decision making structures. You really need to get more organized.
[00:28:15] Speaker A: Right? That's so good. And we're talking about integrity, right? And so I think oftentimes when we hear the word integrity, we think about making sure we're doing things the right way and we're upright and you know, good law abiding citizens. However, integrity also means that it's okay not to know what you don't know and you own that and you're honest with yourself, right? Because the only person you're fooling is yourself. And so this is an important reminder that integrity is just not only about what we believe, it's about what our systems make possible. When leaders build structure around trust, right, they protect the business, the people and the future that they're working so hard to create. People do business with people that they know like and trust. And so we want to make sure that you have this particular information and be able to really kind of take a hard look at your business to say, where are these gaps in these loopholes? We're going to take a short break and when we return, we're going to close with Resilience, one of my favorite topics topics how business owners can prepare for uncertainty, lead with discipline and build something that lasts. We'll be right back.
Welcome back to Leading with Grace, Grit and Greatness. We're going to continue this conversation. We're talking about building a resilient business that can last. We're talking about wisdom and legacy. Stay connected to Leading with Grace, Grit and Greatness. And every NOW Media TV favorite live or on demand, anytime you like, Download the free Now Media TV app on Roku or iOS and unlock nonstop bilingual programming in English and in Spanish. If you're on the move, you can catch the podcast version on NowMedia TV. From business to news to lifestyle and culture and beyond, NOW Media has streaming around the clock. Wherever you are, wherever you're going, there is always something fresh for you. Now let's jump back into this phenomenal conversation with Harsh. He is the partner of my profit gurus and as we close, I want to focus Harsh on resilience not as a slogan but as a financial and leadership discipline. Resilient businesses are not built by accidents. They're built through planning, honest review, strong systems, wise counsel that we keep referencing and making really disciplined decisions before the pressure forces our hand. This segment, we're going to elevate the conversation from financial management to legacy leadership. The focus should be on how leaders prepare for uncertainty, build businesses that can withstand any kind of pressure, and develop the confidence to make decisions with grace and grit. It should also highlight that Harsh, as an educator and a truster advisor, you help businesses owners understand financial strategy in a way that empowers them rather than intimidates them. So let me ask you, because I said my favorite particular subject is resiliency. What makes small business financially resilient when the economy, customer behavior, or the costs begin to shift?
[00:31:11] Speaker B: Well, you brought up one of the major points, which is discipline. And I think the resilience also is about visibility and adaptability.
I think that businesses that survive like difficult periods usually know their numbers, they know how to protect their cash flow, they control their debt and they make decisions early than reacting late. For example, during slower economic period like Covid, I've seen resilient companies immediately review their expenses. They tighten their collections, they improved operational efficiency and started adjusting pricing rather than waiting and hoping for things improved on their own. They, they stayed proactive instead of emotional. And I think the strongest businesses also avoid becoming overly dependent on a single customer service line or even a revenue source. Resilient companies build flexibility into the business so they can adapt when the market changes.
That preparation, I think gives leaders confidence rather than panic when uncertainty arises.
[00:32:08] Speaker A: Right. So we're talking about being reactive instead of proactive. Right? And I think so many businesses didn't sustain when the pandemic hit or any other challenge arises because they are not being proactive. They're not taking the necessary steps in order to think about the what ifs. Right? Because the what ifs typically will happen. So tell me, you know what mindset shifts help leaders to stop seeing accounting as a burning and start seeing it as a strategy.
[00:32:34] Speaker B: I think the moment that owners realize that the county just thought about taxes, but. But it's more about decision making, everything changes. Accounting tells the story of the business, right? It shows what's profitable, what's inefficient, where cash is leaking and where those opportunities exist. For example, when a contractor discovers that one service line is producing double the profit margin of another, accounting suddenly becomes a strategic tool. The numbers help the leaders decide where to focus their time, their marketing, their hiring, and even their future investment. I think the problem is that many owners only look at the financials during tax season when there's some stress. But the most successful businesses use accounting as an ongoing leadership tool. Good financial information allows leaders to make decisions with confidence instead of guessing their way through growth.
[00:33:25] Speaker A: Listen, I hear your passion in this. I hear your passion and really wanting to help and assist businesses, business owners navigate the complexities of. I'm going to start with financial literacy, financial education, financial wealth. So as an educator, what do you believe today's entrepreneurs need most to learn about when it comes to money and about their leadership?
[00:33:46] Speaker B: It's a great question. I think that entrepreneurs really need to understand that growth without financial discipline creates a whole lot of stress and not that freedom that they expected when they got into the business. I think larger businesses this does. They usually are not working with weak systems, right? They're building strong systems. They have strong cash flow management, strong decision Making in many cases, you know, they're able to, to manage their growth and avoid some of the problems because such great planning. You know, for example, I've seen business owners double their revenue while becoming more exhausted, more financially pressured, and less profitable because the business's underlying infrastructure was pretty weak. And today's leaders also need emotional intelligence. I think leadership is not just about strategy or numbers. It's more about how leaders communicate during uncertainty, how they handle pressure. They make decisions when things become difficult and business becomes stronger, when leaders stay calm, informed and disciplined instead of reactive. Vikita I know that at Poindexter Consulting Group you offer some really powerful strategies grounded in human centered HR leadership. And I'd be curious to learn from your perspective how that works. From an HR perspective.
[00:34:58] Speaker A: Yeah. So from an HR perspective, the one thing I talk to leaders about is it's okay not to know what you don't know. Right. And it's not a negative connotation for you. It's not, you know, anything from that perspective. It is literally you are not going to know everything. And so you have to be able to equip yourself with individuals that can be able to speak to that. And so one of the things I tell all of my clients is your employee base needs to be a reflection of your customer base. You have to remember at one point in time you were an employee. So treat your employees with grace and compassion.
This is the reason why I always talk about grace, grit and greatness. You can be great in everything that you do, but it's going to take some grit and you're going to have to give number one, yourself some grace and your employees some grace.
Knowledge is power, and when we don't have it, we fail. We perish. And so I think one of the, that's one of the key foundations that I teach when I'm trying to educate my clients. I make them feel comfortable to the point that it's okay that you don't know. That's what I'm here for, to be able to help you. And so I will refer my clients out to individuals that I know that they can trust that will really be able to look at their particular situation and really kind of help them navigate through it so then that they feel whole and knowing that they have a team of trusted advisors that will help them navigate through whatever challenge that they're going through.
[00:36:16] Speaker B: I love that. I love that. That's wonderful.
[00:36:19] Speaker A: Okay, so now that you asked me that, I have a question for you. What does leading with grace grid and greatness mean to you when it comes to helping business become stronger and more sustainable?
[00:36:30] Speaker B: Wow, that's, that's a really powerful question. And let me, let me think about this here. But I think for me, you know, grace means treating people with respect, honesty, integrity, you know, especially during difficult moments.
[00:36:44] Speaker A: Right.
[00:36:44] Speaker B: Grit means probably, you know, staying disciplined and resilient when challenges show up. What we've been talking about, and I think greatness means building something sustainable that positively impacts employees, clients, families and the community in the long term. And I think, for example, we talked about the pandemic earlier was a real test of resiliency. Strong leaders, they had to be honest with their employees, they had to protect relationships. They made thoughtful decisions instead of reacting emotionally. And they focused on some of the long term stability rather than any time of short term panic. And Vikita, in your book Brokeness to Breakthrough, you spoke about the power of choice and how we're all defined by the choice choices we make.
[00:37:26] Speaker A: Right.
[00:37:26] Speaker B: That really resonated with me. And to me, real success is not just about building a profitable business. It's building a business that creates that trust, that opportunity, stability for the people that are connected to it. And if businesses that you know, usually last are those that, you know, led by people who combine financial discipline with genuine care for others.
[00:37:48] Speaker A: Right. Yeah, I think that's so good. I think you genuinely have to care for your clients. You genuinely have to have to care for your employees. You generally have to care for the people that you are serving.
Wherever your clientele is located, or whoever your clients are, you generally have to care. I think that statement that we always hear, and I think it's just becoming a slogan, is people want to know how much you care before how much you know.
I think with all of your experience, especially the work that you were doing at UC Berkeley with the education perspective, you know, having been a college professor, it's a passion. It's not that we decide that we are going to go teach college courses because we don't have any spare time. It's literally because we want to educate people more on the topics that we're talking about. So thank you for that. So I do want to make sure, because you are a wealth of information, a wealth of knowledge, one, that this won't be our only conversation. You can rest assured that. But if our audience, you know, those leaders that are out there, they're saying, hey, I have no clue about my financial plan, I have no clue about my profitability. I don't even know what cash flow means. I need somebody that can help me kind of get it started. Tell me, where can the audience find more information about you, my profit genius, and how can they connect with you?
[00:39:05] Speaker B: Perfect. Yeah. I think the best way to contact us is through our website. We're at www.myprofit gurus.com and we have a booking link on there. So if you really want to talk about, you know, what's going on, you know, we'd love to sit down with you for half an hour and, you know, kind of go through a little bit about what your, you know, what your issues are. And maybe if we can come up with some good quick fixes or maybe more of a long term arrangement, we'd be happy to do that.
[00:39:31] Speaker A: Well, harsh. You know, this conversation has been absolutely amazing, but not just from the fact of, you know, it's a good topic. It is good information that business leaders really need to have. So whether you have one employee or if you've got 20, whether you're just starting out or you've got one client or you got a thousand, this information is imperative. So thank you for joining us and sharing your insight on financial clarity and profitability, compliance, trust and resilience. What this conversation reminds us is that the strong leadership is not about the vision. It's about the clarity. It's about discipline. It's about integrity. It's about the willingness to build systems that can support the mission, especially when pressure comes, because it's coming, right?
And to everyone who's watching, we invite you to keep leading with heart, wisdom, courage. Because when we lead with grace, grit and greatness, we do more than build success. We build something worthy that's lasting. So stay connected to more now media tv.
I believe that every leader eventually faces a moment when numbers stop being numbers and they become a mirror, a decision. Set systems and habits. Thank you so much for joining. Mike, thank you so much for joining. Leading with grace and greatness.
