Working in the business sometimes means that you're doing the work that you should be paying others to do. It might be, oh, so somebody called out sick tonight. I got to go cover that routine. Or the admin didn't show up so you're answering phones, or you're doing your own taxes, or you're doing your own payroll. There's things like that you should actually offload and have companies do and alleviate those headaches. So, working on the business is now taking a look at the bigger picture, because now you're at a million dollars in sales. You have to start considering and being able to forecast and look forward what's happening and need to know things almost on a daily basis within a minute basis of where am I losing money? Where am I making money? What's the lag? How long are customers taking to pay? How long (does it take for) product getting to my site? So, you're looking at a bigger picture when you get to that million dollar mark. Well, part of the forecasting is also, do you have lines of credits with your bank that are deep enough? Do you need to go get a different loan?
Do you need to go out and maybe lease equipment rather than direct buy so that you have a monthly number that's smaller. (That’s) so you don't become cash poor because you're going out and buying a $100,000 auto scrubber to use in a factory or in a school or something like that. Instead of taking that out in cash, now you take it and you're only paying out smaller amounts of money on a leasing option so that you still can stay cash positive. Those are the things that you need to start considering. Sometimes because of rapid growth, that's not always that easy. So now you might have to look at going into what's called secondary paper. And that could be going to a Factor where you take a look at a bunch of invoices, you have a factor, give you a percentage. They take that off the top and your clients actually pay the factor, the full amount.
A factor is a person who is going to basically give you money in advance for a percentage. What they are doing is you're going to look at a lot of factors. Who is the client that you're looking to take that invoice and have them give you money up front on? If it's a customer they've never heard of, they're probably not going to give you any money towards it no matter how big that invoice is.
A lot of analytics, a lot of reports. Plus, by the time you're at a million dollars, you better have management staff in place, too. You better have someone who's dedicated to just your HR department. You better have somebody who's dedicated to just the financial piece, AARAP, even if somebody that's part time on a virtual basis or somebody who works within your company that you trust that has all the right acronyms after their name to be running that department. They should understand finance and the value of money and where you can borrow from. You're going to have day managers, you're going to have night managers, you might even have a project manager. So, you're going to have people in place. Those are the people that are working more in the business than you as the business owner should be doing. And I can attest that that is a major stumbling block for a lot of business owners mentally. Because now they are giving up control of their business.
They don't have total control now. Now they're just managing it by looking at a bunch of numbers.
That's one of the biggest stumbling blocks of an individual is they're their own worst enemy because of things that have happened. Oh, well, somebody embezzled for me, so I want to handle all the financial stuff. Oh, somebody stole time for me, so I want to make sure I do all the payroll stuff. Things like that, because of experiences a business owner has had, sometimes makes them a little shy at allowing somebody else to run with that department.
More critical or even people that have worked for you that you have trained and developed over however long you are, because now they also not only have the skills to handle those jobs, but they also understand your company culture. And sometimes being able to promote from within is a big mood booster. Not just for the in-person who gets that promotion, but for everybody that works within the organization. Because now they're seeing that there's a career path, particularly in the cleaning industry. Because when I first started in this industry, Actually, 40 years ago, I thought it was a dead-end job. It is far from being a dead-end job, but it took me many years to figure out it wasn't a dead-end job. Those of you who are listening who may be a frontline employee right now, I am telling you, you focus and start training, developing yourself, even at that level. I never expected to be an author, a speaker, an owner of a business. Oh, wait, I own two businesses. I'm looking to start others.
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