Ep213 David Visco - Unlocking Hidden Profits with a Strategic Guide to Business Value Acceleration

David Visco  0:00  
There are so many hidden opportunities in a small business to uncover profits, so they just sit in there. And that is one of the major focuses I have get folks to see where all those profits are. They're there, just waiting to be taken.

Mike O'Neill  0:19  
Welcome to get unstuck and on target, the weekly podcast that offers senior leaders insights and strategies to not only lead with confidence and vision, but also to achieve groundbreaking results. I'm your host. Mike O'Neill, I coach top level executives on the power of ethical leadership to forge teams to be as united as they are effective in each episode, join me for insightful conversations with leaders just like you providing practical advice to help you get unstuck and propel you and your company forward. Let's get started

Mike O'Neill  1:02  
as a coach, I've worked with leaders who are brilliant at what they do, but they still feel like they're leaving money on the table, not because they're not trying hard enough, but because they're chasing revenue instead of real profitability. In this episode, I sit down with David visco, a profit acceleration strategist who helps business owners simplify, refocus and take control of their financial future. We unpack his profits framework an insightful approach to uncovering hidden value, eliminating waste and building a business that's actually worth what you think it is, if you ever wondered why growth isn't translating into cash, you're not alone, and this conversation is your roadmap. My guest today is David visco, a value acceleration strategist and certified value builder. He's dedicated to helping small service based businesses grow and maximize their value as the founder of your business Made Easy. David specializes in sales, marketing, finance and operations, providing strategies that drive efficiency, profitability and successful exits. And it's his expertise in profitability that we're going to be spending quite a bit of time talking about today. Welcome David.

David Visco  2:25  
Hey, good to see you. Mike, thanks for having me here. David, the official topic that we're going to be doing is called profit acceleration, and therefore as a great starting point, if you don't mind, if your focus as an advisor is to help owners unlock growth by maximizing business value. Can you kind of explain what profit acceleration entails? Sure. Yeah, thanks again. Absolutely. So there's a whole host of ways of figuring out how to accelerate profits in the business, right? And what I've done actually, is come up with a framework to help explain that using the letters of the word profits. And it really works pretty well that way, makes it nice and easy for people to remember in the fall. And that's the process I use to help get clients know a much more higher growth, higher valued business over time.

Mike O'Neill  3:29  
Why don't we just jump right into that with profits? I'm gonna assume the first letter is p. What does the P stand for? Yes,

David Visco  3:36  
sir. Purpose and vision, actually, yep. So the very you know what I find so often talking to business owners is they've jumped into a business, they got things going, and before you know it, they're working ridiculous hours and what have you. And then they lose sight of why they started it in the first place. One of the very first things I do is sit down with the client just find out what? Why are we here? You and I, right? What? Why are we sitting here talking about all this? Why did you get the business going in the first place? What are your goals, all that type of thing, and that's incredibly important, because, as you know, as an entrepreneur, you put a lot of effort and time into all this, and this gotta be some reason for it,

Mike O'Neill  4:20  
right? Yeah, yes. Now you said P stands for purpose and there, but you slipped little i in there, did you not? Yeah, put purpose and vision and vision, vision, purpose and vision. So if the P is purpose and vision, what is the R?

David Visco  4:40  
The R is, you know, one point I had it as revenue, but I'm like, Hold on, I'm the guy that focuses on profits. So that's a little bizarre. Of course, you have to have revenue to grow and whatnot. But I was thinking about this, and I was like, How about refocus? And what I mean by that is, I'm a personal productivity. Geek. I've read just about every I mean, there's so many books out there and whatever, but I really like focusing on getting people to spend their time productively in their businesses, especially when folks are first starting out. There's so many hats to wear, so much to do, and by the end of the day, we've all been there. We're like, What the hell did I do all day? I got nothing accomplished, and I'm all stressed out and and what have you so what I do is, really, I spend time with the clients and figure out, how is it you're spending your day. So one of my very favorite things to do is have them do a time track for about two weeks. They hate me for it, but they love me at the end of it, where we just really for two weeks, they write down what they're doing a 15 minute increment scrap piece of paper on a napkin, whatever. That's not overly difficult, and it's amazing what we see on how they're spending their time. And we were easily able to uncover 20% of the week just like that by focusing on that. So that's where the refocus comes from. Great

Mike O'Neill  6:03  
idea, I guess. I hope I'm spelling profit right. Is Oh, next,

David Visco  6:09  
yeah, oh, it's next. So that that I use O for opportunities. I talk about that in depth. In my book hidden profits, there are so many hidden opportunities in a small business to uncover profits. So they just sit in there. And that is one of the major focuses I have, once we take care of the other pieces that we've talked about, to just get folks to see where all those profits are. They're they're just waiting to be taken so there's so much opportunities. That's what we focus on.

Mike O'Neill  6:46  
David, we're going to work through this and then go back to each in turn. If that's okay, you don't mind the F What does that stand for?

David Visco  6:55  
Financials. And if I could, I would add n data. So I dig into that right away. We look at the books, and it's amazing how inaccurate, if they even have them at all, profit and loss statement is. So we chat through that, gotcha,

Mike O'Neill  7:16  
gotcha. Well, keep walk me through next letter, next

David Visco  7:20  
letter implementation. So from there, I'm talking about what are the processes and the systems that you have to, you know, to actually grow your business. And a lot of times, people don't have anything. They're just getting through the day doing what they can, you know, reaction mode, all day long. So we do is look at the processes and the systems that they have in place there, and see what we can put in place to make things flow better. Excellent. Studies the techniques. Yeah, techniques. And what I'm talking about there is techniques for accelerating profits. So there's so many different things you could do there, one of which is just sharpening the pencil, taking a look at all your expenses, and I get I give you a great example when we go through them later, of how much profit can be found in just checking to see how you're spending your money every week,

Mike O'Neill  8:16  
very soon. Now, do you have an S for profits, or is it singular?

David Visco  8:21  
Great question. I do have an S, so I've got s on there for strategic planning. So put an actual plan together. You know, in the beginning, we talked about a purpose and why you're doing it all in the first place. But how about let's not wing it day to day, week to week, month to month. Let's put a plan together on actually hitting your goals and what have you. So that's where that comes from.

Mike O'Neill  8:45  
Maybe I love this framework. You're introducing this to me in real time. Does this follow kind of a sequential order in which you work with your clients, or is this more just kind of a here are the main components that we will cover over time.

David Visco  9:04  
I I'd say 80% of this or so is sequential. But, you know, and I'm a structured guy, right? I come from the lean manufacturing world where we we tear through things, we have standards, and we have processes and we have ways to do it. But what I also find with a lot of clients is as we dig in, sometimes some areas need some focus right away, and then I guess you could say, customize the plan at that point so we could step out of that framework for a bit and focus where it really needs to be. But for the most part, because business is very foundational, right? But this is business. We're able to stick with that for, I'd say probably 80% of the time.

Mike O'Neill  9:48  
All right, that's helpful. So in terms of our listeners, let's just make the assumption these are decision makers, these are leaders, many of which own their own business, and so they're leaning into this conversation. I. For a variety of of reasons. When a person reaches out to you, a business owner, and says, I think I want to work with you, you begin working them through this largely kind of in this order, if you would, what do you find as you start working through this, where might you find, first of all, the biggest ahas that take place for them, the business owner, at what step does that occur?

David Visco  10:31  
That's great. It's early on, so I would say it's in the data. Interesting. Yeah, it's very interesting. The fact the data and the financials, what I'm finding often is business owners aren't aware of how that all works, and like what the impact of what they're doing day to day, and how it how it impacts the business and the growth and the profits and whatnot. And I always get the big, wide eyed, you know, when they see the results of what they're doing day to day and what they're not doing, and how it's impacting the bottom line. Like a lot of folks, aren't even sure what net profit is compared to gross profit. In fact, I have many people that call revenue profit, and that's not the case. So it's in one of the bigger areas that we uncover is that the cost of goods sold are often not captured properly, and that has a significant impact to the gross profit number. And so there's a lot of awakening there when they start to look at the money and the financials, but then we get into the data itself, like KPIs key performance indicators, and then we we put a dashboard together, and then they're able to start really seeing how the drum beat of their business and how things are going,

Mike O'Neill  12:05  
you know, David, as you're going through this, my first frame of reference is I was applying this to my experience working in a corporate setting, working with fast growing businesses, and I made an observation, and that is, I found myself in meetings with leaders who are looking over quote data, and I concluded they don't really even know what they're looking at. Yeah, that's great point. They, they're they're asking, you know, they're doing all the kind of things. And I guess what I would throw out to to our listeners and to you specifically, is that starting a business, ah, there's so much that goes in to this. You are reminding us, particularly early on in your relationship, as you're trying to gain clarity. You know, why did you start this business, and more often or not, it wasn't to be familiar with the data or the financials. Odds are you may not even have a background in that. Do you find it in working with clients that it's very common they don't know their numbers 100% okay? And do you find it's not just helping them know their numbers, but to understand what drives those numbers?

David Visco  13:29  
Yep, absolutely. And that's why it's very awakening to them when they finally start to get their fingers on the pulse of their business. You know, they really they awaken, they go like, all the sudden, like, oh, well, now that kind of makes sense why I have no cash in the bank, or, you know, why I'm not paying my bills in 60 days out, or this and that there's all sorts of pieces there. One of the it's really worth mentioning, I'm like, one of, one of the biggest areas improvement that I see as to what's possible is to get the data accurate. So for those folks that do have a bookkeeper, if it's if you're not a corporation and you're you know, you're self employed, so you're subbing out your bookkeeping, whatever, I'm here to tell you that probably 90% of the time I'm finding errors in that data from hired out bookkeepers. Wow. And so what happens is, and I'm not bashing bookkeepers, right? I think they're fantastic and but what I'm finding is, once my clients understand their numbers. They're able to have a real conversation with their bookkeeper, and they own their numbers. They understand it better, so that they can push back same thing with their CPA if they happen to have an accountant, if they understand that data, instead of just saying, Oh. These guys have it. They're the experts. It helps them so much. They start finding those profit centers themselves. It just opens up a whole new world to them.

Mike O'Neill  15:10  
You know, in the conversation thus far, you have mentioned a number of concepts, if you will, calls a good sold, differentiating revenue from profits. It seems to me that it can feel a little bit overwhelming as you are working through this. Let's just say you're working with a very savvy entrepreneur. They're doing a lot of things right, but let's just say this conversation, this doesn't really this is not their thing. Have you found that there are certain things that you through working with them, can educate them as to if you'll pay attention, and I'm simplifying it, just for this conversation, but if you'll pay particular attention to this, this and this that would account for the majority is it. Do you find yourself doing that in your work with clients?

David Visco  16:11  
Yeah, you know, it's funny. They do on occasion, get overwhelmed, and I try to pay particular attention to that to make sure that's not the case. Over time of working with me, though, they start to get to that point where they're not as overwhelmed as they used to be, because they're focusing on the right things throughout the day. And that's a huge part of it, like we go back to tracking their time and how they're spending their time. So the other piece of that is, like, I talked about tracking their data and KPIs, yes, and you kind of alluded to this earlier, when you were talking about a corporate meeting and people were looking at numbers, and half the time they may not even know what they're really looking at. And what have you, the we focus on five to 10 numbers, KPIs, and that's it, one sheet of paper that they can easily update every month that tells them how their business is doing. And it's usually COVID in a like a traffic light setting, so green failure, that type of thing. Yeah, works so well. So simplifying, you know, the data is really important, because they're able to just look at that and right away know how they're doing, and that that takes a big load off, for sure.

Mike O'Neill  17:29  
No, when you mentioned that you have kind of a scorecard, that's part of this one page piece, what crossed my mind is that benefits not just the owner, but if that person shares that with his or her leadership team, yep, it could very well be and let's just say there's approximately 10 metrics on that page. If it's color coded, it doesn't necessarily mean that everybody in the room reading this has to understand all 10, but they do understand green, yellow and red, yep. And what that does is it, if nothing else, it puts everybody, from a leadership standpoint, on the same page, because we have too much yellow. Sure, we don't want red at all. But the assumption is, is that at least it gives it's a tool in in doing this. Do you typically update the scorecard monthly? Is that your MO,

David Visco  18:43  
it's a mix of weekly and monthly. Okay, there's a few numbers, especially when a business is just starting out, where we'll measure some, some of the data on a weekly basis. Most of it's monthly. Though, I don't like doing it, like only quarterly or every six months, that doesn't do a heck of a lot of good. So yeah, you made an observation

Mike O'Neill  19:07  
earlier, and that is, there's nothing wrong revenue. Don't get me wrong on that, but your focus primarily is on helping them improve profitability. What is it about profit, ability and improvement profitability that most people get wrong?

David Visco  19:30  
What they get, honestly, is they don't pay attention to the profits. They just chase revenues. So, you know, here's the challenge with that, if you're just chasing revenues because you want to grow more revenue usually means more hours, more employees, more expenses, more dollars spent on marketing, more and more and more of all of this stuff. A lot of times if you just focus. On the profits, the those drivers of profits, you can nearly hit the same number at least as far as the profitability goes. But I'll tell you, people go chasing after revenues, and they're doing it just because they think that's the thing to do. And often that's not the case at all. I mean, of course you need to grow profits, right? But that shouldn't be necessarily goal number one, and that that's very different from a lot of folks. A lot of people don't think that way.

Mike O'Neill  20:30  
So you're stressing that by paying attention to what drives profits, it could very well mean that you can hit your business objectives without necessarily having to increase revenues. Nothing wrong with revenues. Well, let's talk about kind of this balancing act, and that is, how do you strike a balance between achieving profitability, particularly immediate profitability, and building long term value in your business?

David Visco  20:59  
Yeah, that's a great question, because one of the areas that I help folks with that are looking to scale and exit someday is building that value in the business, and it all comes from profits like I'll give you an example. I was evaluating a business couple weeks ago, and it was doing around three and a half million in revenue, and the client thought their company, because of the industry they were in and whatever was probably worth around four and a half to $5 million the problem was they had no profits. That business wasn't worth anywhere near what he thought it was. And now it's like, that's a big deal, right? So you need to be focusing on increasing your profits, because it certainly is going to increase the value of the business over time. So you need to spend your time focused on that. There's really eight drivers that I that I have people focus on in that regard, as far as increasing value, some of those pieces just really quick are how embedded is the owner into the business, like, can, can the owner literally take a month off and nobody would notice, because he's got all those systems and processes in place that I mentioned before that'll increase the value of the business, right? Because the owner doesn't need to be there. Is there a recurring revenue model? In other words, if nobody shows up, is there still revenue coming in by nobody showing up? I mean, employees. There's a host of other intangibles there that are incredibly important increasing the value of the business. And a lot of business owners don't pay any attention to it. They don't realize where that value lies. So I help uncover that for them, and it sets them down a completely different path. But I'm a road to prosperity for sure.

Mike O'Neill  22:57  
You know, David, I hear the term multiples when you're trying to think of a business valuation? Oh, yeah, maybe I'm looking at it all wrong, but I typically multiples of revenue, and what you're kind of saying is a business valuation. I know a lot goes into it, but you're stressing that what really carries more weight is profitability than revenue. Yep. Can I ask when you are talking to clients who are trying to get a sense of the value of their business? Let's just say that they reached out to you because they want to build that value and develop an excellent strategy, per se. How often is the owner close to being correct to the actual business valuation that you come up with?

David Visco  23:50  
Never, at least in my experience so far, and they're usually way off in these they suspect it's worth a heck of a lot more than it actually is. And you know, you mentioned Michael multiple earlier, Mike, and that's a really important topic, by the way. So what I find often is people have this, for those that are aware of the concept of a multiple, the idea is that it's a number that the capital markets figure out per industry. Okay, some industries like semiconductor, their multiple is probably a 10x or something. I don't actually know what they all are, but other businesses that are like commodities, and you see one on every corner, they would have a lower multiple, and you use that multiple times the profits of the business to figure out what the value is, plus a whole lot more all those intangibles I mentioned earlier. It's not just about the profit, by the way, but what happens often is business owners think that they know what the multiple of their business is. Uh, just based on what somebody told them, like, oh yeah, that's like a 3x you know, you get a three time multiple in this business. So people walking around with that 3x in their head. Meanwhile, there's all sorts of things that we can do to, one, increase that multiple so that the business is worth a heck of a lot more. And number two, figure out what the actual multiple is, and I could literally do that, not only figure out their multiple, but figure out what the business value is within 20 minutes. Rude, I have a system that I use to do that. It's phenomenal. And it just, I just did it last week, two weeks ago, with a massage and spa business. This girl was looking, this woman was looking to buy the business from her boss. We immediately figured out what it was actually worth in the boss, the owner was way off, and the fact that this buyer, this woman, had hired me to figure out what it was worth. Now she had all that information, so she knew what it was actually worth, and able to go back to the seller and say, This isn't worth anywhere near what you were trying to you know, get from me a great negotiation power there. So

Mike O'Neill  26:13  
no question. You know, David, in keeping with at theme of this podcast, and that is getting stuck. Can you, I mean, we business owners that always hit roadblocks, right, things that didn't expect. But can you share maybe a specific time when you kind of found that you had a client that did get stuck, and what breakthrough were you able to offer that helped them turn things around?

David Visco  26:39  
Yeah, I've got, I've got a beautiful example is a gentleman who had a business for he was laid off of his his company, that he was not his company, but his job, after like, 30 years, right? And he got laid off. So I was like, Oh, now what am I going to do? So he decided to buy a business. It came with some structure to it, not a franchise, but some structure to it. But he didn't know anything about running a business, or even that business for that matter. Fast forward six years ahead. When I met him, he had yet to pay himself a penny. He drained his 401 K. He'd taken out multiple loans in his profits were in the toilet. In no time flat, we're able to uncover multiple things that he was paying for that he didn't need. Here's one example. He was paying, what was it? $800 a month to a company that was supposedly managing his SEO, his search engine optimization, yeah, they weren't doing anything for him. Wow, and that's one of the values I bring, is I owned an E commerce business for over a dozen years with my wife and we, we wound up getting acquired and going through that whole process of selling a business, but during that time, I learned a lot about what goes into the numbers and SEO and pay per click and all that fun stuff, right? So I'm able to look that over for my clients and have a really good understanding of it. And right away, I was like, Okay, show me the reports. What are they giving you? They weren't sending them reports on a monthly basis. He had no idea how to even read the reports that he did have, so we immediately freed up $800 a month, just like that, because we're able to get somebody else to do that for a heck of a lot less. And there's a lot more to it, but that's just one example, right? Within several months, he finally paid himself and paid himself in six years.

Mike O'Neill  28:44  
A great example, good purchase. And there's

David Visco  28:47  
so much with that business alone that I we could do a whole podcast on that one alone, but I won't go into that. But, yeah, there's so much opportunity, Mike, people just don't know. You know, they just don't know. And I, I, I could just see it right? I'm able to look at a business and just point it right out. Because for me, it's, it's usually pretty obvious.

Mike O'Neill  29:10  
So Dave, you've got a perspective that a lot of folks do not as we kind of wrap up this conversation. If you had one key piece of advice that you would give to business owners. They're her, they're trying to accelerate profits and enhance the value of their business. What might that one key piece of advice be?

David Visco  29:32  
That one piece of advice? I mean, there's so many, but that one would be, know your numbers. Know your numbers, you you can you should not just assume that you're the people that you that are handling your financials are doing doing it properly. And I'm not saying they're you know they're not, but you can't rely on them at the end of the day as the owner, it's up to you to understand. In that data and a very personal situation where i i Let a CPA Tell me some information that they were wrong about, and I kind of took it as gospel, like okay, and it cost me a significant amount of money, and I now take that lesson with me for every client that I talk to, and I you know, so it goes to that exact point you have to know your numbers. Nobody's responsibility, but yours.

Mike O'Neill  30:33  
No. In closing, I want to invite our listeners. If today's conversation sparks something in use, don't let it end there. Take one step now, whether it's reviewing your pricing strategy or identifying hidden profit opportunities. And if you need expert advice, connect with David to explore how he might be able to help you maximize your business value. My business blitz builders, we know that profitability thrives when strong leadership and smart strategies are in place. So if you're ready to sharpen your leadership skills and overcome workplace challenges, visit bench builders.com to see how we can support your team. David, before we go, for those who want to connect with you or learn more about your work, what's the best way for them to reach out. Yeah,

David Visco  31:22  
thanks, Mike, really just email me. It's David, at your business Made easy.com, and so really easy. Your business Made easy.com and as a matter of fact, if folks are interested in getting a free profit assessment of their business if they just put profits in that subject line, then I will hook them up with covering over 10 areas of hidden profits in their business in no time flat. We'll have a blast too, and they'll learn a lot, for sure. But so that's

Mike O'Neill  31:56  
good. Like to offer that up. So put profits in the subject line and email it to you to again that email address.

David Visco  32:03  
Yep, David, at your business Made easy.com.

Mike O'Neill  32:08  
Excellent. David, thank you.

David Visco  32:10  
You're very welcome, man. I really appreciate you having me on. This is fantastic. Well, I'm I was

Mike O'Neill  32:18  
looking forward to have you on. You're hard to pin down schedule was so I'm glad we got you pinned down, but I also want to thank the subscribers, and that is, I hope that the conversation with David today has sparked some new ideas that will help you get unstuck and on target. Thank you for joining us for this episode of get unstuck and on target. I hope you've gained insights to help you lead with confidence and drive your organization forward. Remember, at bench builders, we're committed to your success, your leadership excellence and your strategic growth. If you've enjoyed our conversation today, please leave a review rate and subscribe to keep up with our latest episodes. This show really grows when listeners like you share it with others. Who do you know? Who needs to hear what we talked about today? Until next time, I encourage you to stay focused on the target and continue to break new ground on your leadership path. You

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