December 11, 2024 • 49 mins
Can a simple beard comparison lead to profound business insights? Join us as we kick off with a playful chat about grooming, which unexpectedly transitions into a discussion on the healing power of friendship and entrepreneurship. Our sessions with Mark have become more than just conversations—they're a lifeline, offering a sense of community and relief akin to therapy. We explore how choosing the right team members, like picking friends, can transform a work environment into a nurturing space filled with positivity and optimism, ultimately driving success.
The journey doesn't stop there. We dive headfirst into the world of disruption and innovation, especially the role of AI in today's rapidly changing business landscape. While embracing these technological advancements, it's crucial to distinguish between genuine innovation and mere negativity disguised as disruption. We share our thoughts on how AI is not just changing industries but creating opportunities for small businesses to become billion-dollar contenders. It's a world ripe with potential, and we discuss how staying proactive in managing mental states plays a pivotal role in fostering a culture that thrives on positivity.
Pricing strategies might sound like a dry topic, but we unravel their critical importance in small business growth with engaging examples. Learn how a pizza buffet's tweak in drink pricing led to a profit boost and why charging by the hour might not be the best route in professional services. We touch on real-world scenarios where technology can backfire if not aligned with pricing strategies. By the end, you'll understand the delicate balance between pricing, value, and customer expectations, and why sometimes, a fixed-price model might just be the game-changer your business needs. Don't forget to connect with us through our website for more insights and to share your questions for future episodes!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
all right.
Hey, good morning eric, goodmorning mark.
How are you, sir?
Speaker 2 (00:12):
I'm okay for an old fart yeah, yeah, that's good man
, you look dapper oh thanks,well, you do too.
Speaker 1 (00:19):
Oh, thank you, you got that good haircut you got
the the beard coming back, thewinter beard.
Speaker 2 (00:24):
Winter beard.
Yeah, you got to do that.
Get rid of the little sticitysash.
Speaker 1 (00:29):
Yeah, you know, doesn't it kill you, guys?
I mean, I hate to sound likethis, oh, God.
But I saw some guy on I tellyou what I was watching an
interview with Al Pacino.
Ah, he's awesome, he is, buthis beard looks terrible.
Speaker 2 (00:44):
Does it?
Speaker 1 (00:45):
And I said to my wife I'm like I can't believe Al
Pacino's got such a wispy beard.
I go look at mine.
It grows in perfectlyconsistently.
Speaker 3 (00:52):
It is.
Speaker 1 (00:53):
It's beautiful.
She goes trying to compareyourself to Al Pacino, right?
And then you stopped talking,didn't you?
You got the same consistency,man, yeah, and you know, and the
good thing about you, too, islike you don't let it grow down
your neck.
Speaker 2 (01:10):
Doesn't that drive you crazy?
It's dirty.
Speaker 1 (01:13):
What is it with the young guys that let it grow down
their?
Speaker 2 (01:15):
neck like that.
Yeah, you're not supposed to dothat, man, that's not right,
it's not that hard, dude, yeahman, you know I could do it
blindfolded yeah.
Yeah, it's super fast, supereasy and it looks clean.
You look tight, look puttogether.
Yeah exactly, but if it'sgrowing down here that's like
the, that's when you're in thedeer woods or something.
Speaker 1 (01:33):
Yeah, you know, I mean you're out.
Speaker 2 (01:36):
Yeah, I've been out there for a week.
Yeah, a man walking out of ariver, clean-shaven you know
that doesn't make any sense.
That isn't right.
Speaker 1 (01:47):
You know, but anyway, so here we are.
It's another episode of BigTalk About Small Businesses.
Speaker 2 (02:01):
That's good to be here with you, man, you too
brother, you know this, you knowthis is actually, you know, one
of my stress-relieving times ofthe week.
You know, it's funny, like Imean, I don't know about you,
but like I'm busy, you know,like on Wednesday I'm like man,
(02:22):
crap, I got to do this damnpodcast with Mark, I know, but
then I, but I gotta drive allthe way up here to Rogers.
Man, you do have to, you dohave to sacrifice your time.
It is, it is, and I'm just liketwo, literally two minutes down
the road, you know.
But, but, man, when I'm getting, when I'm here, though, man,
I'm always happy.
Speaker 1 (02:39):
Yeah, and you know I leave these things and I always
feel good.
Speaker 2 (02:42):
Yeah, I think we're just getting crap out of us.
Maybe, yeah, emptying out alittle bit.
It's like going to see yourshrink or something, that's
right.
Speaker 1 (02:52):
This is counseling for us.
Yeah, but it's true.
There's like some meetings.
I used to.
You know, I've been on a lot ofboards of companies.
Yeah, and whenever I would findmyself on one where I'd go to
the meeting and then I'd leaveand it would take me like three
days to recover from the energythat was sucked out of me.
Those are the ones I resignedfrom, and there's some meetings
(03:16):
or some people that justbasically drain your energy.
Yeah, no, that's true.
And then there's some thatboost it up.
Speaker 2 (03:23):
That's the way I always feel about you.
Thanks man, you too, bro.
That's the way I always feelabout you.
Thanks man, you too, bro.
Yeah, no, I agree, and I mean Ithink that the goal here is to
have as many meetings that boostyou up.
You actually have to be reallycareful about that in
entrepreneurship, because youcan get drugged down into a lot
of crap.
Speaker 1 (03:38):
It's so true.
I saw some quote the other day.
I can't remember what it was,other than the last sentence was
that the the entrepreneur hasto be an optimist, okay the most
successful people in businessare optimists you wouldn't be in
it if you weren't no, and soyou got to keep your attitude
good, because when it goesdownhill, man, it hurts.
Speaker 2 (04:02):
It's so important it really is it's so important and
I mean I think that that, in allhonesty, like I've been kind of
, at least on my, I guess, mysecond ride in entrepreneurship
Well, I mean, that's not reallytrue, but whatever phase I'm in
right now I get it.
Speaker 1 (04:16):
Well, I'm the same as you.
I might say that too, but it'slike yeah, there's so many.
Speaker 2 (04:23):
I also forget about the ones that fail, you know.
Speaker 1 (04:26):
Well, there's ones.
The thing is, there's ones youlike, throw your whole heart and
soul into and then there'sother ones that are just like
you know, I'm going to do that,I'm going to try that.
Yeah, and those usually aren'tthe ones that are the most
successful.
Speaker 2 (04:39):
No the ones you really throw yourself into are
the ones that have the real Well, yeah, because it takes
everything you have you got tobe the one that's getting up and
getting at it.
You know, keeping vision alive.
But I mean, what I've beenappreciating more lately is like
how I hired, and you know, theteam, yeah, a long time ago was
way, way, way different thanwhat I do now.
Speaker 3 (04:59):
Yeah, I mean literally.
Speaker 2 (05:00):
My number one qualification is I mean, does
this person have a good attitude?
Is this the kind of person thatI want to spend my time with?
Literally, it's almost likepicking out your friendships, or
something.
Speaker 1 (05:17):
I agree with you 100% , and people that want to ignore
that are crazy.
Speaker 2 (05:19):
Yeah, that's all I can say I mean we think that
it's all about this.
You know they have to besmarter.
I mean, you know, there's somethings.
Particular background yeah,yeah, but I mean really you just
?
I mean, can you tolerate, canyou lift each other up?
Speaker 3 (05:34):
Yes.
Speaker 2 (05:34):
And keep the energy going.
Speaker 1 (05:36):
Yeah.
Speaker 2 (05:36):
And I've been on a rampage lately at the office man
yeah, dude I I've been likeabout toxicity and gossip.
Speaker 1 (05:45):
That's like the song.
Remember a system of a down?
Speaker 2 (05:52):
Yeah, toxicity of the city.
I can't believe you know thatsong, Dude.
That is such cool points foryou, bro.
Whenever I hear that, that'swhat I think of Toxic work.
Mark freaking Zwang knowstoxicity by system of the down.
Dude, that's some massive coolpoints for you, bro.
Speaker 1 (06:11):
I had young daughters .
Okay, okay, that's true, and itkept me cool.
Speaker 2 (06:24):
But I mean, my thing lately has been just because
I've seen it develop over overtime when there's like little
bickering, you know there's,there's folks that like one
individual within a team canstart, can have this opinion
about something that was said orsomething that's being done or
not being done, or should bedone right, and you can see
those people like they'rediscontent, they're disagreement
(06:45):
, yeah Right.
And then you know, like a lotof times, like I might have let
that go or whatever, let themdeal with it, or maybe I didn't
even really notice.
It was really the biggestproblem.
But then, if you let that happen, though, when you leave the
room as the entrepreneur or thebusiness owner, they're going to
talk to this next person andthen the next person then
(07:07):
they're going to go have lunch,yep, and then they're going to
talk about that and what itreally comes down to and this is
what I was trying to articulateto the team is, like folks,
that is a human negativecharacteristic.
To be an individual anddisagree with something, the
(07:27):
skeptic.
Speaker 1 (07:28):
I love the skeptic.
Speaker 2 (07:30):
The skeptic the cynical, skeptic and it's like
man, but they don't even realizewhat they're doing.
But I was like you have thisnegativity.
You don't talk to me, theperson that can actually give
you clarity about thecircumstance and why decisions
might be being made.
No, you're right.
And then they talk to otherpeople and then they brood this
(07:50):
up and the next thing you knowyou're dealing with a massive
issue and all the energy issucked out of the company.
Speaker 1 (07:57):
Matt Lewis says that he calls that the meeting after
the meeting, Because you've gotto watch the meeting after the
meeting and whoever's holdingthat.
You need to watch the meetingafter the meeting and whoever's
holding that you need to.
Speaker 2 (08:08):
you need to work on your on that person yeah, you go
grab them, pull them in orwhatever.
Yeah because that it's so trueum, but I was like telling them
I'm not, I'm wanting to put someof those onus, all the onus,
really back on the team.
I'm like I have, I have.
You know, I've admitted to themlike I have a job.
I'm like y'all think, and Ispecifically said this I think
(08:29):
if y'all think that I wake upevery morning smelling flowers
and seeing rainbows, you'reabsolutely freaking wrong.
Like I mean, I have my ownnegative shit, right?
You know, I wake up and I havefears and I have concerns and
anxieties and stuff like that,you know, and detriments and
dooms.
Yeah, I was like my job is toget myself out of the bed, work
(08:50):
through that crap.
You know, get in here and startmaking it happen.
Speaker 1 (08:54):
Exactly Right.
Speaker 2 (08:55):
Like, get on the other side, get to the light.
You know, and I was like but ifyou know, if y'all don't do
that like, I mean I can't dothat for you.
Yeah, I can't wake up in themorning and think about, you
know 10, 20, you know 100 peoplethat I have to make sure that
they're seeing positive lightevery day.
Speaker 1 (09:12):
You know it's so true , I tell you.
Speaker 2 (09:14):
And I was like can we so relevant?
My big stand up speech was canwe be that company that doesn't
tolerate that negative toxicityand we're so aware individually
that we don't bring that to thecompany on a daily basis?
And when you see a peer that'sbehaving that way that you don't
(09:34):
engage with that and you rejectthat?
Can we be that gosh dangcompany?
Speaker 1 (09:39):
Because that's like the secret freaking sauce man.
I'm telling you, it's so true.
Speaker 2 (09:43):
It's the secret sauce .
Speaker 1 (09:45):
You can overcome anything.
You can.
Speaker 2 (09:49):
And all a company is is just a group of people
working together on the samegoal.
Who believe yes, believe yeah.
Speaker 1 (09:56):
They got to believe baby.
They got to believe man.
I know, it's so true.
We could talk about this allday, but we're supposed to talk
about some other stuff.
Speaker 2 (10:12):
Yes, we are, so do you have anything that you
wanted to talk about as itrelates to the history of
entrepreneurship today?
I don't Mark.
I failed again, that's allright, there's no problem.
Okay, thank you.
Thank you for the relief.
Speaker 1 (10:28):
We'll let you off the hook on that.
Speaker 2 (10:30):
Let's see what this is, but we have the Zwei hat we
got the Zwei and you're notwearing it today.
Speaker 1 (10:34):
No, I'm not, you didn't wear that one.
Speaker 2 (10:36):
I did see that show, though, and I was like man, I
like that hat, you look good init.
Speaker 1 (10:42):
Thank you, the ZYCAT.
Okay, the word for today fromthe ZYCAT is disruptive.
Ooh, I like that.
What do you think about that?
I love that word.
Everybody's a disruptor, thoughon LinkedIn now.
Oh, hell yeah, they're alldisruptors.
Speaker 2 (11:02):
Yeah, I've seen a lot of those like these little
taglines about who you are andthey're disrupting and you can't
put the same question in thiswhite hat man.
We'll read that again next week, or something what is it again?
Speaker 1 (11:16):
it's disruptive, disruptive.
Speaker 2 (11:20):
You're being disruptive but I mean, yeah,
like the, you know, I think thatdisruptors don't really talk
about disrupting, becausedisrupting is actually a really
excellent strategy in business.
Yeah, it is.
You know what I'm saying.
If you can, if you can, you'vegot to do the go the opposite
(11:42):
way sometimes.
Speaker 1 (11:43):
Yeah, you know, you can't just do what everybody
else does.
That's what I always hate aboutthat term best practices.
Best practices implies I'mgoing to do things like
everybody else, yeah.
That's not the way to besuccessful in business?
Speaker 2 (11:56):
No, it's not.
It's not.
You have to be disruptive,right, yeah?
I mean like, especially withtoday's times, with all the
technology advances I mean theAI coming full bore.
I mean like you got to.
How do you use and leverage allthese new tools and be a
disruptor in whatever industryyou're in?
Honestly like not getting onthe AI kick, but that's what the
(12:19):
AI environment is going to beable to do for a lot of new
entrepreneurs.
They're going to be able toleverage that technology and
disrupt a lot.
Speaker 1 (12:28):
I mean, really it applies to any industry on the
planet, yeah well, it's sort oflike the Internet, how it gave
everybody an advantage that theydidn't used to have, like the
small guys got access to theworldwide market, basically, yep
, it's the same thing with theAI.
It's like now you can do stuffthat big companies could only do
with very little developmentalcost.
Speaker 2 (12:48):
Not that I'm any expert in AI, but I mean Well,
they're predicting that if youknow the disruptors that are
leveraging the AI, I mean youcan have billion dollar
companies with 10 or lessemployees on team.
Yeah it's pretty wild.
It is wild and there's going tobe a lot of that.
Speaker 1 (13:03):
Yeah, it's pretty wild.
It is wild and there's going tobe a lot of that.
Was it on this show or was itsomewhere else, that somebody
was talking to us about how theyhad to negotiate a purchasing
agreement with AI?
That AI was actuallynegotiating?
Oh, are you serious?
No, I didn't.
Speaker 2 (13:18):
It wasn't on this show.
Speaker 1 (13:19):
Yeah, somebody was telling me that recently that
they had to negotiate with AI.
Wow Okay, that's pretty crazy,isn't that crazy?
It is crazy.
So the buyer was justcompletely taken out of the
picture.
Speaker 2 (13:31):
Yeah, which is a big job normally, yeah, right.
Speaker 1 (13:35):
Yeah, yeah, anyway, yeah, it is going to be
disruptive.
I think you know the wholething with disruption, though I
mean it can.
The problem is when peoplethink they're being disruptors
inside the company and they'rethe cynics and the naysayers
that we were talking about.
Speaker 2 (13:55):
That's a negative side of disruption.
Speaker 1 (13:56):
That's not a good kind of disruption.
It's not.
Speaker 2 (13:59):
You know I mean.
Here's the reality.
If you're disrupting thecompany, you're really hurting
your peers more than you are thefolks that are at the top of
the company or whatever.
In most circumstances you cansee that.
Speaker 1 (14:13):
Well, sometimes you've got to be a disruptor,
but it's hard to be an internaldisruptor and not be perceived
as negative and not on the team.
Speaker 2 (14:22):
Yeah, I mean, it really is perceived as negative
and not on the team.
Yeah, I mean, it really is.
Yeah, and it also depends onwhat you're disrupting and why
you're disrupting.
Whatever it is that you'redisrupting, you know, I mean a
lot of times.
Folks, if they put that energytowards, how can we have this
company and disrupt the industry?
Speaker 1 (14:39):
Yeah, that's what we want.
We want to disrupt the industry.
We want to disrupt the market.
Yeah, we want to disrupt theindustry.
We want to disrupt the market.
Yeah, we want to disrupt ourcompetitors, not disrupt the
company.
Right.
Speaker 2 (14:51):
I'm glad we figured that out.
Speaker 1 (14:54):
Well, it is true, though you know you got to do
things differently.
I mean, most of us are workingin industries, most small
businesses are in matureindustries, where there's lots
and lots of players.
Speaker 2 (15:06):
Rarely are they the pioneer out there with something
all new, right, so you've gotto differentiate yourself, yeah,
in order to break through thepack, which means you have to
disrupt something, you gottadisrupt something, and the cool
thing is there's a lot of littlethings you can disrupt to give
you that cutting edge in thebusiness, whether it's customer
(15:29):
service, it's actually projectmanagement, which would be a
fantastic disruptor in a lot ofindustries, like good
communication.
Speaker 1 (15:37):
I don't think it's really understood the way
project management is taught andpeople are trained.
I think they go way off course.
Yeah, it's not.
It's not.
It needs to be more on the, asyou said, the communication and
the human interaction aspectsversus PERT charts and CPM,
logic networks and full wallschedules Agreed, you know, and
(15:59):
that's usually what's emphasized.
Speaker 2 (16:01):
Yeah, and I don't think it's lifted high enough
within the organization or itdoesn't have the esteem that it
needs to have.
Speaker 1 (16:07):
It doesn't, because a lot of companies are classic
matrix organizations where thereare functional departments and
the PM sits outside of that andthey have to go to these
departments to get their teamand the team doesn't report to
them permanently.
Their real boss is theirdepartment head or functional
(16:27):
head.
Gotcha, yeah, and the PM isjust using that talent and
that's why they don't have theclout they need.
Speaker 2 (16:34):
So how would you set it up differently then?
Speaker 1 (16:37):
I like having PMs inside the functional areas.
And so they at least, whateveris the most primary function of
the job is where the PM resides.
So at least they have somecontrol over some of the
resources on a permanentlyassigned base.
Speaker 2 (16:53):
So they're basically in that specific department.
You have a PM per department.
Is what you're saying, right?
Speaker 1 (16:58):
You got PMs in the departments and so if the job
takes 60% of whatever thisfunction is, that's where the PM
is going to reside.
They get the 40 from the otherones.
But at least they got somecontrol over some resources, as
opposed to really having nocontrol.
Yeah, when they sit outsidecompletely yeah.
Speaker 2 (17:19):
Just off on their own , they just ladder up to a head
of customer success or somethinglike that.
Yes, exactly yeah.
I think that's a bigorganization structure of
customer success or somethinglike that.
Yes, exactly yeah.
Speaker 1 (17:26):
I think that's a big organization.
Structure plays a really bigpart in that.
Most people think it's notimportant, but it really is.
Yeah, but you're right thatwhen you start talking about
project management, I think someof the stuff that really makes
people great project managers isreally pretty simple stuff,
yeah.
Speaker 2 (17:45):
Oh, it really is.
Yeah, it's just consistency.
Speaker 1 (17:48):
It is.
It's consistency ofcommunication, prioritization,
documentation of everything,setting the priorities,
communicating to everybody.
Yeah, yeah, and you know we cantalk about that.
We should make that a futureepisode.
Speaker 2 (18:06):
We really should, but I mean on the disruption.
I mean like a company candisrupt in any of those little
small nuances.
So I think that you know what Idon't want to hopefully that
listeners don't take out of itis that you have to have a
business that is specificallydedicated to disrupting an
industry.
It doesn't necessarily have tobe that way.
You can go into a matureindustry with a very specific
(18:29):
thing that you're disrupting,whether it's the customer
service or it's the pricing.
It could be a lot of differentthings, but you can disrupt in
many ways and you can alwaysdisrupt.
So once you disrupt that angle,you can go disrupt another
angle.
Speaker 1 (18:43):
Exactly, keep the cutting edge, and you probably
need to, because one thing isn'tgoing to be enough.
No, everybody else will figurethat out.
So you've got to be constantlydisrupting.
Speaker 2 (18:54):
Yep.
Speaker 1 (18:56):
It's really true.
Well, one of the things we'regoing to talk about today,
speaking of disruption I don'tknow what the relevance is to
the topic, but maybe there'swell, I mean pricing.
Speaker 2 (19:07):
Pricing can be disruptive pricing can be
disruptive.
Speaker 1 (19:10):
I think you know I've again, I've seen so many small
businesses.
My students do these reportsevery semester on a small
business, a consulting project,and if you go back over 20 years
, eric, I bet you I've seen wellover 1,000 companies okay.
(19:30):
And the financials on most ofthose, and if there is a common
theme when it comes to pricing,small businesses don't charge
enough.
Speaker 3 (19:42):
Yeah.
Speaker 1 (19:43):
Because what they can do is provide better service
than a mega corp.
It's true, okay, yep, and theygot to get paid for that, yep,
they're not going to have thevolume, they're not going to
have the cost competitiveness,right.
They, you know they don't havethe resources, but what they do
have is the ability to giveextra high quality service.
Speaker 3 (20:08):
Yeah.
Speaker 1 (20:09):
And that can command a premium in the price.
Absolutely and if you don'thave that.
Then there's just so many smallbusinesses that are just
underpricing what they do.
Speaker 2 (20:21):
You know, and I think that I think part of that might
be just the, the lack ofrealization of how important but
also how complex pricingstrategy really is Like.
And I don't think it's a youknow.
Know, you set it and then youjust kind of forget it and then
just keep working, like you'reconstantly got to be thinking
(20:41):
about that, and how do you moveit?
And I mean what's working right?
Speaker 1 (20:45):
well, sometimes just having a high price actually
creates a perception of higherquality, absolutely, but you
know, so I've always most of mycareer not all of it, obviously
I worked in the professionalservice industry.
And there, you know, the higherpricing allows you to do a
better job you can have betterpeople you can have better
(21:08):
marketing, you can have moreinvestment in your systems all
that.
So the pricing is super, supercritical.
Yeah, the only way you're goingto command that is by being
specialized and by beingperceived as really good right
yep but I'll tell you what,coming out of the main and the
manufacturing side working inthe motorcycle company we I've
(21:30):
gotten a whole new education onhow elastic some things are yeah
, some things now like our bikes, are expensive for what they
are right yeah they're at thehigh end of their category.
We can look and see when wehave price reductions, the
(21:50):
demand goes up significantly, sothat business is completely
different.
It's so much more pricesensitive.
Yeah, then some of the otherbusinesses that I've been a part
of.
Yeah, that it's a realeducation for me.
I think every industry andcompany is different in a way.
Speaker 2 (22:10):
Yeah, it feels like that.
That has a lot to do with, like, you know, what sector are you
in?
The B2C market versus the B2Bmarket, right?
Speaker 1 (22:17):
What sector are you in the B2C market?
Speaker 2 (22:20):
versus the.
B2b market right, Exactly B2C Ithink it's a lot more critical.
Very price sensitive.
Yes, b2b is not as critical.
Yep, I think that's a very goodpoint.
Within the business, for aservice or a product are really
looking for more.
They recognize, respect andneed more of that attention or
(22:43):
that service component to it.
Speaker 1 (22:48):
Like are you going to actually do what you say?
You're going to do?
Yes, because so many otherthings depend on it Absolutely.
Speaker 2 (22:52):
That's why and they're looking at their job
going if I screw this up, if Imake a bad procurement decision
on this, then this is going tobe painful the whole way around
and plus I'm going to look likean idiot and it's going to
affect my job, whereas on apersonal side it's just like,
well, I mean, should I spendthis and am I going to get in
(23:12):
trouble with the spouse or am Igoing to wreck my finances or
whatever it might be?
And so you have to be reallyprice sensitive on that, and
that's really the most importantthing.
Speaker 1 (23:23):
Yes, yes, it is, I think too, like a lot of people
don't understand.
Like in the manufacturingbusiness, you know, I think we
are very, very concerned aboutour margin, all right, but the
fallacy in that is that if youdon't have enough volume, you
don't spread your overhead outon a per unit basis, and so
(23:46):
you're, you're not making themargin.
You think you are Right?
Ok, yeah, Maybe there's amargin on your labor and your
raw costs to make your productAll right, yeah, that can look
great.
But if you don't do that enough, you know, if I, if I triple my
volume, my overhead goes downby two thirds, my overhead
(24:08):
allocation Once I hit break even.
I mean, think about that, andso that's that's where having
volume can really make a bigdifference over.
Which means, how am I going todrive volume?
Well, if it's a B2C business,like you said, that's in a
price-sensitive market.
I've got to drop my price.
Speaker 3 (24:26):
Yeah.
Speaker 1 (24:28):
It's a complex thing.
It is.
It's not that simple, but youknow, I think back.
This is big talk about smallbusiness, right yeah, and I've
seen so many instances where theprice does need to go up.
I mean, I'll never forget I hadthis student who did their
project on a pizza buffetrestaurant where the owner had
(24:50):
two of them and the one of themost profound recommendations of
my student was raise all yoursoft drink prices by 10 cents
and you make $26,000 a year moreprofit.
The guy was taking $200,000 ayear out, wow, but all he had to
do.
This student went and said okay, who are your competitors?
(25:12):
And it was like four or fiveother places.
You know, they're in a majormetro area.
So they went and checked thesoft drink prices of all them
and these guys were the lowestthey were like $1.89.
And they ranged like from a lowof like $1.99 to $2.39.
And, based on the number ofsoft drinks they sold over the
(25:34):
course of a year, $260,000.
God Ten cent increasetranslates to $26,000.
God, 10 cent increasetranslates to 26,000.
That's awesome and nobody'sgoing to say no, I mean a 20
cent increase.
My only thought on that ismaybe you should have gone 20
cents.
Yeah, that's what I'm thinking.
Speaker 2 (25:50):
Then you'd make 52,000 more.
Yeah, that's exactly what I wassitting here thinking that one
simple thing Are people going tocome in there and go $1.89 for
my Coke.
Speaker 1 (26:00):
No, God bless.
Speaker 2 (26:01):
You know they're used to that.
Or $1.99.
Speaker 1 (26:03):
Last week it was $1.89.
Right, they don't know.
No, no, okay, they don't knowwhat it costs, that's awesome
though, because you tooksomething that was already there
.
I mean, it didn't add anyexpense to you whatsoever either
.
That's where I think so manycompanies like another small
(26:25):
business.
I used to live in theDover-Sherborn area of Boston,
which is a very, very affluentrural community.
It's right 16 miles from BostonHarbor.
It's right next to Wellesley,which is one of the W towns in
the Boston area.
Those are the affluent DoverSherbourne, super affluent.
The average income there 20years ago was probably $250,000
(26:47):
a year and there was one placein town that you could buy food
to go and it was really good.
This guy had this.
This place inside the Sitcostation, which was the hub of
all activity in Dover Sherbourne.
They had a Dunkin' Donuts driveup window on the side.
(27:08):
You could get your dry cleaningdone there, you could rent your
videos there, you bought yourgas there and they had this
Italian take takeout.
And so this guy, they own thisand he did okay with it because
I saw his numbers.
Um, I had a friend of mine whowas a local bmw sales guy and he
(27:28):
told me how much money this guywas taking out of his business.
He'd seen all of his taxreturns and and anyway.
So he's selling thesesandwiches for like $3.50 and
these meals for like $6 or $7.
All right, and people arefrigging lined up.
You know, at the end of the daythey're coming home, they're
(27:49):
tired.
Yeah, they don't want to makedinner, they go over.
I mean, they get the food there.
It's fantastic All right.
This is not like the hot dogsand the roller kind of place.
This is completely separate.
It's really freaking good.
The line is out the door and Isaid to this guy dude, you
should raise all your prices.
You got this rich bunch ofcustomers.
(28:10):
There's no way they wouldcomplain if your sandwiches went
from $3.50 to $4.50.
No, yeah, and your meals wentup by $2.00, and you would
double your freaking income.
Yeah, okay, yeah, he's like, Idon't want to do that, I want to
keep it affordable.
Yeah, I'm like, dude, you don'tunderstand your target audience
.
We're not coming here becauseit's cheap.
(28:31):
We're coming here because it'sgood and it's the only thing in
town and it's convenient.
It's convenient.
Yeah, exactly.
You've got to understand whypeople are buying what they buy
from you and price itaccordingly.
Speaker 2 (28:46):
Yeah, very good point , very good point.
Speaker 1 (28:50):
He could have doubled his income.
Yeah, I'm not exaggerating, noproblem in one year.
Speaker 2 (28:54):
Yeah, and not lost any business.
No, people go on.
I mean, a lot of times peoplemight be discontented with that
change in the immediate, but aslong as it's not absurd, right,
I mean, they'll get used to itand go on.
Then you can raise it againanother two years down the road.
Speaker 1 (29:12):
He had a superior product.
He was in the right locationwith the customer base that
could afford it.
You've your product.
He was in the right locationwith the customer base that
could afford it.
Speaker 2 (29:25):
You've got to understand your customers and
you've got to understand whypeople are buying from you, yeah
, and to come up with anappropriate pricing strategy and
so on that note, like I mean,because one of my questions I
was going to ask you is, likefor the new entrepreneur that's
thinking about starting abusiness, like where do you even
start with pricing, you know?
I mean, like, how do you evenget to a price level?
Speaker 1 (29:41):
I'm going to start high.
I think you need to starthigher than you think.
You can always go down, but youcan't go back up easily.
That is very difficult to do,so it's easier to start off high
and test demand.
I always felt like again goingback to my own experience I was
going to be expensive and somaybe I'm not working all the
(30:02):
time.
But when I do work I get paidwell for it and the rest of my
time I can spend devoted to myactual business to make it
better.
So we're better able to servicethese clients as opposed to I
work all the time.
It's cheap, I'm super busy andI have no time to devote to my
business.
Yeah, that's the trap that theaverage small business owner
(30:24):
falls into, you know but, againback on pricing and not charging
enough.
So you know, last night my wifewas out with some of her friends
who just came in town fordinner and I got my 13-year-old
daughter and you know I gobefore she and I are going to go
out to dinner.
So before I go out I got tofeed the critters.
(30:46):
Okay, yeah, you know, we gotthese two giant great Pyrenees
which can like, do you really?
Oh yeah, one weighs 160 and one110.
Speaker 2 (31:00):
I mean it.
The one is like a.
It's like having farm animalsin your house.
Speaker 1 (31:02):
Yeah, they huh.
They're inside.
Oh yeah, oh my, totally inside.
If my cleaners don't come everyweek, there's gonna be like
dust bunnies the size of thishat rolling through that house,
dude, because of the shedding.
But anyway, and then we got onecat.
We used to have four, oh god,one time we got one cat.
So I go to feed the cat andwe're out of canned cat food, of
(31:23):
course it gets it's got it'sdry, but it's gotta have it's
canned or it's gonna yell at youall night long.
Normally we buy this stuff atwalmart neighborhood market.
Yeah, in like 24 things at atime.
It's dirt cheap, right.
I don't know what it costs us.
Three bucks, four, or 30, 40cents a can, basically.
Yeah, okay, so I go.
(31:45):
Well, let's just go to OzarkNatural Foods.
It's convenient.
You know, hazel and I weredriving home.
I'm like I got to get some ofthis food.
Yeah, we stop over there, we goin Ozark Natural Foods.
You, we stop over there, we goin Ozark Natural Foods.
You know what it costs for acan, a small can of cat food at
Ozark Natural Foods, thecheapest one's $1.39.
I had to hunt for that.
The normal ones that are at eyelevel are $1.99 a can.
(32:10):
Dang For a small can, okay, andhow can they get that?
Yeah, when they can buy it for30 cents at Walmart.
Right, because they understandtheir market.
They're sitting right there intown where truly the most
affluent people live, yeah, okay, maybe not the ones that are
(32:30):
showing off the most, that livein the suburban
8,000-square-foot drywallpalaces, right, these are the
people who actually have money,that are living in town in a
3,000 square foot 100-year-oldhouse.
Yeah Okay yeah, they know theygot the market there.
Yeah Okay yeah, they got thelocation, they got the customer
base and they're saying we don'tneed to give this stuff away.
Speaker 2 (32:52):
No, this is what's.
Convenient, they're going topay.
Convenient, they're gonna payit, and the customer also is the
kind that appreciate higherquality type of ingredients they
have.
Yeah, I don't know whetherthere's anything better in their
food or not well I mean, thereapparently is right, yeah and so
they're it's not a familiarbrand.
I'll say that no it's organic,it's natural.
You know it doesn't have allthese other things in it that
(33:14):
could be harming their pets.
Yeah, I love their pets, butthat's also understanding your
market Exactly.
I mean, like I've been in thoseplaces too and you might have a
lot of the high-income earners,but you also have a lot of
folks that are identifying withthat.
That may not be making muchmoney at all, but they're
investing in that identity, thatbelief.
It's a co-op.
Speaker 1 (33:34):
It supports local businesses, yada yada yada
Natural foods.
Speaker 2 (33:38):
Take care of it.
Yes, save the planet.
I mean that's knowing who youraudience is.
Yes, you know.
Speaker 1 (33:43):
Yes, and being able to understand and understanding
why they buy.
Yes, why they come to you, yep,yep.
Speaker 2 (33:49):
So yeah, the complexities, though the pricing
, you know and I think we hit ona little bit about adjusting,
like you're talking about thosestories.
But you know, I've, I've, I'vealso dealt with like pricing
strategists in businesses.
You know that consult.
Speaker 1 (34:05):
Well, you've dealt on a big high level where you're
dealing with like millions andmillions of dollars worth of
consumer products, right, yeah,yeah, that's just like a
completely different level wherethere's gotta be a lot more
science, there's a lot morenumbers.
Speaker 2 (34:19):
Yeah, and I think that it's you know.
But I think you know one of thethings about that is that if
you start out, if you have apricing plan and you're thinking
about starting a business, youknow, do some competitive
analysis, you know what are thecompetition charging, Then how
are you going to disrupt thatwith your pricing?
You can set the same type ofpricing maybe, or a little bit
(34:40):
higher, but you're offering alittle bit higher quality
service.
You have that angle to it.
But then, as you start buildingthat business, you have to be
very conscious of how are youmoving your pricing, how are you
adjusting that based upon thecircumstances, because it's not
a one-time decision.
Speaker 1 (35:00):
No, that's right, You're right, yes.
Speaker 2 (35:03):
I think that's a very good point, and I think there's
macroeconomics that affect it.
There's microeconomics that areaffecting that.
There's the value propositions.
I mean all that type of stuff.
Speaker 1 (35:15):
Competition changes in the marketplace.
Speaker 2 (35:18):
Technology changes.
Yeah, you know, one of mythings on that is like what
we're trying to do here and youknow the other companies is.
You know we've talked about AIa little bit earlier, but you
know how do we use technology tokeep you know, to be able to do
more you know in less time,because in our business
everything's about time, and soif we can Any service business.
Speaker 1 (35:41):
that's all you got and if you can.
Speaker 2 (35:43):
But if you can use the tech, if you can get in that
vein, then you can actually domore with that and that helps
you hold your price.
So there's another strategy toit.
Right, like if you're 150 anhour versus 150 hours an hour in
the market, right, and soyou're in line.
But other people are having toraise their price because
they're not leveraging theefficiencies of technology or
(36:06):
processes Right, but you canhold your price and provide the
same or better, yeah.
Speaker 1 (36:12):
And then, over time, you're probably going to get
even more advantage of it right,absolutely, because you're into
the technology earlier and ifyou continue to invest in it,
you're going to always be aheadof the other guy yeah, and then
your amount per hour is actuallybecoming more profitable.
Yeah, as long as your pricingschedule is on a fixed price.
(36:35):
If you charge by the hour andnow you have less hours to
charge, that defeats the purpose.
Speaker 2 (36:42):
That's a really good point.
I'm a big personally in myexperience, I'm a really, really
big fan of more project or likeproject-based pricing.
I guess you would say, like, Iwill do this.
I already know the amount ofhours it takes me and so I'm
going to charge you $500 flat todo this project, execute it
(37:03):
correctly and it rewards yourefficiency Exactly.
Yeah, it challenges us, itmakes us where we're at, and
then the customer knows what I'mcharging.
Then you're just aligning theexpectations.
Yes, I'm also not burdening theteam with timesheets all the
time.
Speaker 1 (37:20):
I know you know what I'm saying.
I come out of the professionalservice world again, where so
many people don't understandthat they just charge by hour.
Yeah, they're still trying tocharge by hour.
So every time they invest intechnology, it basically
actually comes back to bite themin the rear.
They become less billable yeah.
They make less money yeah, itdoesn't make any sense at all.
(37:42):
No, that's true, you've got tobe on fixed price.
It's also burdensome, you'reright about that time sheet too,
yeah, and.
Speaker 2 (37:51):
I think on the client end it's always this mystery.
It's like I'm always worriedabout how much time are you
freaking spending, mark?
I know it makes me anxious asthe person, the buyer.
Speaker 1 (38:00):
Then you've got to watch over them.
Then you see somebody on theirjob that's not working and
they're smoking.
Speaker 2 (38:05):
Yeah exactly and you're chilling and you're
pulling up and it's like whatthe hell?
And then in your mind you'relike am I really paying?
You know there's $150 for this.
Then you leave and you're justdiscontented.
Speaker 3 (38:15):
And then you probably won't use them again.
Speaker 2 (38:17):
It so true.
You know, I've had someexperience.
Speaker 1 (38:20):
People need to think about this stuff.
They really do.
They really do so many smallbusiness owners.
They just follow convention.
Yes, it's like.
This is the way it was done atthe last place I worked, so I'm
just going to keep doing thesame thing.
Speaker 2 (38:35):
And that comes back to that whole disruption
mentality, right?
Like I mean, we talked aboutthe construction.
It's just an easy one foreverybody to kind of get a
little bit right.
But I mean, you know, if I wasin the business I would just be
charging project-based fees.
You know I'd be like, okay, I'mgoing to do the job for this,
I'm going to get it done rightfor that.
If I can be more efficient inmy job, you know, then I'm
(38:59):
negotiate my subcontractors todo it.
For a certain process I got tolet everything's fixed out.
Speaker 3 (39:05):
Yeah.
Speaker 2 (39:05):
And then I'm not sitting here saying, oh, I think
it's going to be 30 hours, yeah, oh, by the way, when I sent
you the final bill, it was 55hours.
Right, and there's nothing youcan do about it.
Speaker 1 (39:15):
And you lose your repeat business.
But I was thinking the otherday so I had my landscapers out
there I don't know, it was maybea month ago doing the second
pass on the leaves.
Now we need them for the thirdpass because they just keep
freaking, falling Right.
I got this big yard and youdon't like having leaves on the
ground?
Speaker 2 (39:34):
No, yeah, so you're going to do three passes.
It's completely covered rightnow.
I got to have them come back,but there's my pass, so you're
going to do three passes, it'scompletely covered.
Speaker 1 (39:41):
Right now I've got to have him come back, but there's
still some up there and Sonia'slike no, wait, wait, yeah, but
you can't handle that.
But anyway, my point is this hecharges the guy's a great guy
Charges a set price per day forhis guys to come and work, okay.
But so the last time he wasthere, I was out there watching
him.
Well, they got this machine.
(40:01):
Yeah, all right, that chops upthe leaves.
They just shove them into thismachine.
It chops them up and it blowsthem into the back of a truck,
and it did so.
It's very compact that way.
Right, they can haul a lot moreout, less hauls Using fuel,
exactly.
(40:23):
And he was telling me, and Ibought this machine and you know
it saves us so much time andeverything but all I could think
about was that's great for me,yeah, but for you, your hourly
or your day rate, it's the same,yeah.
Whether it might've taken youtwo days at 1200 bucks a day,
yeah, now you can do it in oneday for 1200 bucks.
In a way, you cut your ownthroat.
(40:47):
Hmm, how's that okay?
How's that why?
Because he's not getting paidany more per day, gotcha, he's
not getting paid any more perday.
My last guys would have chargedme.
You know they didn't have thatmachine.
They stacked them in thetrailer and take like six guys
standing in the trailer pushingthe leaves down.
You see what I mean.
Speaker 2 (41:06):
It's almost like they were rewarded for their
inefficiency, and now it's thegreater efficiency, because they
would take them two days to dothe job that these other folks
are doing.
What?
Speaker 1 (41:16):
they should say is I'll do it for $1,500 now.
Speaker 3 (41:20):
Yeah, okay, yeah, I'll do it for $1,500 now.
Speaker 1 (41:22):
Yeah, Okay, yeah.
So now, because I have thismachine and the other guy is
going to charge you two daysit's going to cost $2,400.
I can do it one day for $1,500or $1,800.
And then the technologyactually rewards me for making
this big investment in thistruck and this trailer-mounted
thing and freaking who knows.
I bet you that trailer thingcosts at least 50 grand that
(41:44):
chops them up and blows it.
Speaker 2 (41:46):
Oh yeah, okay, and you could kill yourself with
that process strategy if you'renot really careful about that.
Speaker 1 (41:51):
Just like you said yeah, so you just do more work
and get paid the same amount ofmoney and you've got the
overhead of the equipment.
But I think that's not thatuncommon.
Speaker 2 (42:02):
No, no, I equipment, but I think that's not that
uncommon?
Speaker 1 (42:07):
no, no, I mean that's a sneaky thing.
That's a really sneaky thing.
That's the way early on, when,when the architecture and
engineering industry startedusing cad.
Yeah, that was the problemthere, because they're charging
by the hour, yeah, for thistalent.
Now we've got this cad thatmultiplies their effectiveness
computer-aided design but we'restill getting paid the same
thing.
But now we're paying a milliondollars for our Intergraph CAD
(42:30):
system with a VAX and all the.
You know what I mean.
Yeah, just made less money.
That's all we did.
Might as well have an army ofguys out there drawing ink on
linen.
Yeah yeah, if we had a fixedprice strategy, that would have
been another matter To start outwith.
Yeah, yeah no I agree.
(42:52):
Anyway, the pricing thing it isone of the four Ps of the
marketing mix, true, and I thinkit's ignored by too many
companies.
They just keep working onpromotion, maybe they refine the
product, but they're not reallythinking about pricing the way
they should.
Yeah, and I think again, youknow, with a lot of small
(43:15):
businesses, I always say look athow the consumer product
companies do things.
They make billions of dollars.
There's a lot of science behindwhat they do.
Can you learn from them?
You know, like advertising, Ialways say look at the consumer
product companies.
Speaker 3 (43:33):
They know what they're doing.
Speaker 2 (43:34):
They're the best, right yeah.
Speaker 3 (43:35):
They know what they're doing.
Speaker 1 (43:37):
Yep, you know, commercials aren't a minute long
any longer because they don'tneed to be.
They can be 15 seconds long.
Okay, they know that's better.
Yeah, whatever it is, they'verefined their packaging design.
They've refined their pricingstrategies.
Follow them, it's true.
(43:58):
What can you learn from them?
They got armies of scientistsworking on this stuff.
Speaker 2 (44:04):
They really do.
Yeah, people that are like.
I've worked with a lot of thosefolks.
Speaker 1 (44:08):
I know You've had experience with them.
Speaker 2 (44:10):
I mean, they're some of the smartest people that I've
ever met Exactly.
Speaker 3 (44:12):
I mean all around Sure.
Speaker 2 (44:14):
All of the companies, yeah, I believe it.
Big brands, I guess that youknow now you point that out,
working with that for the lengthof time that I have, and then
seeing some of the othersoutside of the CPG realm, or the
brands and products, it's justlike I mean the inefficiencies,
the lack of really investing inresearch, thought processes,
(44:38):
strategy, all that type of stuff, and then action, you know, and
then follow-ups.
I mean, you know, the thing iswhen you work with one of those
companies, like you've got to beon your A-game, 100% on your
A-game.
Speaker 1 (44:51):
There's a lot of money riding on every decision
they make.
There's a lot of money and theother thing they do well is they
experiment.
They do they test things out tosee if they work.
Is they experiment?
They do they test things?
Speaker 2 (45:01):
out to see if they work.
You know, one thing that I'vefound that they do excellently
well as well is that theyExcellently.
Speaker 1 (45:08):
well, I wonder if that's a word as well,
excellently as well.
Speaker 3 (45:13):
I said excellently, as well as well, that makes
sense.
Speaker 2 (45:19):
It kind of makes sense, right, it kind of makes
sense Right.
But what they do excellently,mark, is if you do, if you do
business with them, they monitorand manage you as the, as the
contractor, like with, withsuperb skill, like they don't
let you project managementmanage their job with you.
(45:40):
They project manage your jobwith them.
Speaker 3 (45:43):
Yeah.
Speaker 2 (45:43):
And I think that that's one of the greatest
lessons, right?
It's like they will make surethey are holding you accountable
to what you said day one, right?
And then they're following youthrough on every single meeting
that they have and they'rewaiting for the recap notes.
Speaker 1 (45:58):
That's tough Dude it is.
It's a high standard ofperformance and management.
Speaker 2 (46:03):
It really is, but it's a great, I mean, it's a
great lesson, I mean, and that'swhat makes them so great though
.
Speaker 1 (46:09):
Yeah.
Speaker 2 (46:10):
In all honesty, they're all trained that way,
they're all thinking that way.
Speaker 1 (46:14):
Well, all I know is that there's so many
opportunities out there.
There are.
You know, it's just every day Iwake up and I'm like holy cow.
You know there's some peopleout there who are super negative
.
The world's turning to shit,whatever.
I don't see it that way man,and then there's other people
(46:35):
who are out there and go.
You know what All the change,the turmoil, the confusion
creates the opportunity.
Speaker 2 (46:44):
It's all opportunity.
Speaker 1 (46:45):
That's the entrepreneurial mindset.
Speaker 2 (46:48):
It is man.
That's how entrepreneurs win.
That's how they've always won.
That's how they'll continue towin.
I think that we just have theability in today's world to hear
so many different voices.
The voices now are loud andclear.
You know about the negativeside, or about the worries and
the fears, and everybody feedsoff that.
But that's kind of like goingback to what I was telling.
(47:08):
My team is like guys, like ifwe can imagine, if everybody
that walks in this door likewe've done our own self, you
know growth in the, in the lightand positivity when you walk in
the door and then you bringthat to your clientele, I mean
it's going to reward you ahundredfold.
No kidding a hundredfold.
Speaker 1 (47:27):
Yeah, then you're a positive force for them that
you're an energizing.
Uh, you know.
Speaker 2 (47:34):
Leader of them, yes, yeah, it's a great thing, man.
Yeah, you're right, you don'tneed that much capital, you just
need that much energy andpositivity.
Speaker 1 (47:45):
Energy is in a way, capital.
Speaker 2 (47:46):
I think it's more precious.
That's what I'm starting todiscover you can do a lot when
you have a lot of energy, you'reright.
Speaker 1 (47:55):
Speaking of energy, we need to end this show.
It's all over, unfortunately.
Speaker 2 (48:02):
It's a sad thing, man .
We have to end this show we do.
Speaker 1 (48:04):
It's all over, unfortunately Sad thing, man it
is.
We have to say goodbye untilanother time.
We're always interested in yourfeedback.
Love the questions Listeners.
Love the questions Send usquestions.
Speaker 2 (48:16):
If there's a topic you want us to talk about, we'd
love that.
Speaker 1 (48:18):
Yeah, we're always looking for sponsors.
Anybody who has a product orservice of value to small
businesses reach out to us.
We'd love to take a look at it.
If we think it's somethingthat's valuable, we'd be glad to
promote it.
Absolutely, okay, absolutely.
We're not going to promote itif we don't think it's valuable.
That's true.
We don't want to be quoted ifwe don't think it's valuable.
(48:39):
That's true.
And we're here to help, andwe're here to give guidance and
we're here to help you.
Keep your heads on straightsmall business owners.
Speaker 2 (48:53):
Right, because we need help with that you help me
keep my head on straight Mark.
Speaker 1 (48:57):
Well, you help me keep mine on straight.
Thanks, buddy.
All right, everybody.
Well, until next week.
This has been another episodeof Big Talk About Small Business
.
Speaker 2 (49:09):
Have a good day you too.
Speaker 3 (49:18):
Thanks for tuning into this episode of Big Talk
About Small Business.
If you have any questions orideas for upcoming shows, be
sure to head over to our website,
wwwbigtalkaboutsmallbusinesscomand click on the Ask the Host
button for the chance to haveyour questions answered on the
show.
Stay connected with us onLinkedIn at Big Talk about Small
(49:38):
Business and be sure to headover to our website to read
articles, browse episodes andask questions about upcoming
shows.
all right.
Hey, good morning eric, goodmorning mark.
How are you, sir?
Speaker 2 (00:12):
I'm okay for an old fart yeah, yeah, that's good man
, you look dapper oh thanks,well, you do too.
Speaker 1 (00:19):
Oh, thank you, you got that good haircut you got
the the beard coming back, thewinter beard.
Speaker 2 (00:24):
Winter beard.
Yeah, you got to do that.
Get rid of the little sticitysash.
Speaker 1 (00:29):
Yeah, you know, doesn't it kill you, guys?
I mean, I hate to sound likethis, oh, God.
But I saw some guy on I tellyou what I was watching an
interview with Al Pacino.
Ah, he's awesome, he is, buthis beard looks terrible.
Speaker 2 (00:44):
Does it?
Speaker 1 (00:45):
And I said to my wife I'm like I can't believe Al
Pacino's got such a wispy beard.
I go look at mine.
It grows in perfectlyconsistently.
Speaker 3 (00:52):
It is.
Speaker 1 (00:53):
It's beautiful.
She goes trying to compareyourself to Al Pacino, right?
And then you stopped talking,didn't you?
You got the same consistency,man, yeah, and you know, and the
good thing about you, too, islike you don't let it grow down
your neck.
Speaker 2 (01:10):
Doesn't that drive you crazy?
It's dirty.
Speaker 1 (01:13):
What is it with the young guys that let it grow down
their?
Speaker 2 (01:15):
neck like that.
Yeah, you're not supposed to dothat, man, that's not right,
it's not that hard, dude, yeahman, you know I could do it
blindfolded yeah.
Yeah, it's super fast, supereasy and it looks clean.
You look tight, look puttogether.
Yeah exactly, but if it'sgrowing down here that's like
the, that's when you're in thedeer woods or something.
Speaker 1 (01:33):
Yeah, you know, I mean you're out.
Speaker 2 (01:36):
Yeah, I've been out there for a week.
Yeah, a man walking out of ariver, clean-shaven you know
that doesn't make any sense.
That isn't right.
Speaker 1 (01:47):
You know, but anyway, so here we are.
It's another episode of BigTalk About Small Businesses.
Speaker 2 (02:01):
That's good to be here with you, man, you too
brother, you know this, you knowthis is actually, you know, one
of my stress-relieving times ofthe week.
You know, it's funny, like Imean, I don't know about you,
but like I'm busy, you know,like on Wednesday I'm like man,
(02:22):
crap, I got to do this damnpodcast with Mark, I know, but
then I, but I gotta drive allthe way up here to Rogers.
Man, you do have to, you dohave to sacrifice your time.
It is, it is, and I'm just liketwo, literally two minutes down
the road, you know.
But, but, man, when I'm getting, when I'm here, though, man,
I'm always happy.
Speaker 1 (02:39):
Yeah, and you know I leave these things and I always
feel good.
Speaker 2 (02:42):
Yeah, I think we're just getting crap out of us.
Maybe, yeah, emptying out alittle bit.
It's like going to see yourshrink or something, that's
right.
Speaker 1 (02:52):
This is counseling for us.
Yeah, but it's true.
There's like some meetings.
I used to.
You know, I've been on a lot ofboards of companies.
Yeah, and whenever I would findmyself on one where I'd go to
the meeting and then I'd leaveand it would take me like three
days to recover from the energythat was sucked out of me.
Those are the ones I resignedfrom, and there's some meetings
(03:16):
or some people that justbasically drain your energy.
Yeah, no, that's true.
And then there's some thatboost it up.
Speaker 2 (03:23):
That's the way I always feel about you.
Thanks man, you too, bro.
That's the way I always feelabout you.
Thanks man, you too, bro.
Yeah, no, I agree, and I mean Ithink that the goal here is to
have as many meetings that boostyou up.
You actually have to be reallycareful about that in
entrepreneurship, because youcan get drugged down into a lot
of crap.
Speaker 1 (03:38):
It's so true.
I saw some quote the other day.
I can't remember what it was,other than the last sentence was
that the the entrepreneur hasto be an optimist, okay the most
successful people in businessare optimists you wouldn't be in
it if you weren't no, and soyou got to keep your attitude
good, because when it goesdownhill, man, it hurts.
Speaker 2 (04:02):
It's so important it really is it's so important and
I mean I think that that, in allhonesty, like I've been kind of
, at least on my, I guess, mysecond ride in entrepreneurship
Well, I mean, that's not reallytrue, but whatever phase I'm in
right now I get it.
Speaker 1 (04:16):
Well, I'm the same as you.
I might say that too, but it'slike yeah, there's so many.
Speaker 2 (04:23):
I also forget about the ones that fail, you know.
Speaker 1 (04:26):
Well, there's ones.
The thing is, there's ones youlike, throw your whole heart and
soul into and then there'sother ones that are just like
you know, I'm going to do that,I'm going to try that.
Yeah, and those usually aren'tthe ones that are the most
successful.
Speaker 2 (04:39):
No the ones you really throw yourself into are
the ones that have the real Well, yeah, because it takes
everything you have you got tobe the one that's getting up and
getting at it.
You know, keeping vision alive.
But I mean, what I've beenappreciating more lately is like
how I hired, and you know, theteam, yeah, a long time ago was
way, way, way different thanwhat I do now.
Speaker 3 (04:59):
Yeah, I mean literally.
Speaker 2 (05:00):
My number one qualification is I mean, does
this person have a good attitude?
Is this the kind of person thatI want to spend my time with?
Literally, it's almost likepicking out your friendships, or
something.
Speaker 1 (05:17):
I agree with you 100% , and people that want to ignore
that are crazy.
Speaker 2 (05:19):
Yeah, that's all I can say I mean we think that
it's all about this.
You know they have to besmarter.
I mean, you know, there's somethings.
Particular background yeah,yeah, but I mean really you just
?
I mean, can you tolerate, canyou lift each other up?
Speaker 3 (05:34):
Yes.
Speaker 2 (05:34):
And keep the energy going.
Speaker 1 (05:36):
Yeah.
Speaker 2 (05:36):
And I've been on a rampage lately at the office man
yeah, dude I I've been likeabout toxicity and gossip.
Speaker 1 (05:45):
That's like the song.
Remember a system of a down?
Speaker 2 (05:52):
Yeah, toxicity of the city.
I can't believe you know thatsong, Dude.
That is such cool points foryou, bro.
Whenever I hear that, that'swhat I think of Toxic work.
Mark freaking Zwang knowstoxicity by system of the down.
Dude, that's some massive coolpoints for you, bro.
Speaker 1 (06:11):
I had young daughters .
Okay, okay, that's true, and itkept me cool.
Speaker 2 (06:24):
But I mean, my thing lately has been just because
I've seen it develop over overtime when there's like little
bickering, you know there's,there's folks that like one
individual within a team canstart, can have this opinion
about something that was said orsomething that's being done or
not being done, or should bedone right, and you can see
those people like they'rediscontent, they're disagreement
(06:45):
, yeah Right.
And then you know, like a lotof times, like I might have let
that go or whatever, let themdeal with it, or maybe I didn't
even really notice.
It was really the biggestproblem.
But then, if you let that happen, though, when you leave the
room as the entrepreneur or thebusiness owner, they're going to
talk to this next person andthen the next person then
(07:07):
they're going to go have lunch,yep, and then they're going to
talk about that and what itreally comes down to and this is
what I was trying to articulateto the team is, like folks,
that is a human negativecharacteristic.
To be an individual anddisagree with something, the
(07:27):
skeptic.
Speaker 1 (07:28):
I love the skeptic.
Speaker 2 (07:30):
The skeptic the cynical, skeptic and it's like
man, but they don't even realizewhat they're doing.
But I was like you have thisnegativity.
You don't talk to me, theperson that can actually give
you clarity about thecircumstance and why decisions
might be being made.
No, you're right.
And then they talk to otherpeople and then they brood this
(07:50):
up and the next thing you knowyou're dealing with a massive
issue and all the energy issucked out of the company.
Speaker 1 (07:57):
Matt Lewis says that he calls that the meeting after
the meeting, Because you've gotto watch the meeting after the
meeting and whoever's holdingthat.
You need to watch the meetingafter the meeting and whoever's
holding that you need to.
Speaker 2 (08:08):
you need to work on your on that person yeah, you go
grab them, pull them in orwhatever.
Yeah because that it's so trueum, but I was like telling them
I'm not, I'm wanting to put someof those onus, all the onus,
really back on the team.
I'm like I have, I have.
You know, I've admitted to themlike I have a job.
I'm like y'all think, and Ispecifically said this I think
(08:29):
if y'all think that I wake upevery morning smelling flowers
and seeing rainbows, you'reabsolutely freaking wrong.
Like I mean, I have my ownnegative shit, right?
You know, I wake up and I havefears and I have concerns and
anxieties and stuff like that,you know, and detriments and
dooms.
Yeah, I was like my job is toget myself out of the bed, work
(08:50):
through that crap.
You know, get in here and startmaking it happen.
Speaker 1 (08:54):
Exactly Right.
Speaker 2 (08:55):
Like, get on the other side, get to the light.
You know, and I was like but ifyou know, if y'all don't do
that like, I mean I can't dothat for you.
Yeah, I can't wake up in themorning and think about, you
know 10, 20, you know 100 peoplethat I have to make sure that
they're seeing positive lightevery day.
Speaker 1 (09:12):
You know it's so true , I tell you.
Speaker 2 (09:14):
And I was like can we so relevant?
My big stand up speech was canwe be that company that doesn't
tolerate that negative toxicityand we're so aware individually
that we don't bring that to thecompany on a daily basis?
And when you see a peer that'sbehaving that way that you don't
(09:34):
engage with that and you rejectthat?
Can we be that gosh dangcompany?
Speaker 1 (09:39):
Because that's like the secret freaking sauce man.
I'm telling you, it's so true.
Speaker 2 (09:43):
It's the secret sauce .
Speaker 1 (09:45):
You can overcome anything.
You can.
Speaker 2 (09:49):
And all a company is is just a group of people
working together on the samegoal.
Who believe yes, believe yeah.
Speaker 1 (09:56):
They got to believe baby.
They got to believe man.
I know, it's so true.
We could talk about this allday, but we're supposed to talk
about some other stuff.
Speaker 2 (10:12):
Yes, we are, so do you have anything that you
wanted to talk about as itrelates to the history of
entrepreneurship today?
I don't Mark.
I failed again, that's allright, there's no problem.
Okay, thank you.
Thank you for the relief.
Speaker 1 (10:28):
We'll let you off the hook on that.
Speaker 2 (10:30):
Let's see what this is, but we have the Zwei hat we
got the Zwei and you're notwearing it today.
Speaker 1 (10:34):
No, I'm not, you didn't wear that one.
Speaker 2 (10:36):
I did see that show, though, and I was like man, I
like that hat, you look good init.
Speaker 1 (10:42):
Thank you, the ZYCAT.
Okay, the word for today fromthe ZYCAT is disruptive.
Ooh, I like that.
What do you think about that?
I love that word.
Everybody's a disruptor, thoughon LinkedIn now.
Oh, hell yeah, they're alldisruptors.
Speaker 2 (11:02):
Yeah, I've seen a lot of those like these little
taglines about who you are andthey're disrupting and you can't
put the same question in thiswhite hat man.
We'll read that again next week, or something what is it again?
Speaker 1 (11:16):
it's disruptive, disruptive.
Speaker 2 (11:20):
You're being disruptive but I mean, yeah,
like the, you know, I think thatdisruptors don't really talk
about disrupting, becausedisrupting is actually a really
excellent strategy in business.
Yeah, it is.
You know what I'm saying.
If you can, if you can, you'vegot to do the go the opposite
(11:42):
way sometimes.
Speaker 1 (11:43):
Yeah, you know, you can't just do what everybody
else does.
That's what I always hate aboutthat term best practices.
Best practices implies I'mgoing to do things like
everybody else, yeah.
That's not the way to besuccessful in business?
Speaker 2 (11:56):
No, it's not.
It's not.
You have to be disruptive,right, yeah?
I mean like, especially withtoday's times, with all the
technology advances I mean theAI coming full bore.
I mean like you got to.
How do you use and leverage allthese new tools and be a
disruptor in whatever industryyou're in?
Honestly like not getting onthe AI kick, but that's what the
(12:19):
AI environment is going to beable to do for a lot of new
entrepreneurs.
They're going to be able toleverage that technology and
disrupt a lot.
Speaker 1 (12:28):
I mean, really it applies to any industry on the
planet, yeah well, it's sort oflike the Internet, how it gave
everybody an advantage that theydidn't used to have, like the
small guys got access to theworldwide market, basically, yep
, it's the same thing with theAI.
It's like now you can do stuffthat big companies could only do
with very little developmentalcost.
Speaker 2 (12:48):
Not that I'm any expert in AI, but I mean Well,
they're predicting that if youknow the disruptors that are
leveraging the AI, I mean youcan have billion dollar
companies with 10 or lessemployees on team.
Yeah it's pretty wild.
It is wild and there's going tobe a lot of that.
Speaker 1 (13:03):
Yeah, it's pretty wild.
It is wild and there's going tobe a lot of that.
Was it on this show or was itsomewhere else, that somebody
was talking to us about how theyhad to negotiate a purchasing
agreement with AI?
That AI was actuallynegotiating?
Oh, are you serious?
No, I didn't.
Speaker 2 (13:18):
It wasn't on this show.
Speaker 1 (13:19):
Yeah, somebody was telling me that recently that
they had to negotiate with AI.
Wow Okay, that's pretty crazy,isn't that crazy?
It is crazy.
So the buyer was justcompletely taken out of the
picture.
Speaker 2 (13:31):
Yeah, which is a big job normally, yeah, right.
Speaker 1 (13:35):
Yeah, yeah, anyway, yeah, it is going to be
disruptive.
I think you know the wholething with disruption, though I
mean it can.
The problem is when peoplethink they're being disruptors
inside the company and they'rethe cynics and the naysayers
that we were talking about.
Speaker 2 (13:55):
That's a negative side of disruption.
Speaker 1 (13:56):
That's not a good kind of disruption.
It's not.
Speaker 2 (13:59):
You know I mean.
Here's the reality.
If you're disrupting thecompany, you're really hurting
your peers more than you are thefolks that are at the top of
the company or whatever.
In most circumstances you cansee that.
Speaker 1 (14:13):
Well, sometimes you've got to be a disruptor,
but it's hard to be an internaldisruptor and not be perceived
as negative and not on the team.
Speaker 2 (14:22):
Yeah, I mean, it really is perceived as negative
and not on the team.
Yeah, I mean, it really is.
Yeah, and it also depends onwhat you're disrupting and why
you're disrupting.
Whatever it is that you'redisrupting, you know, I mean a
lot of times.
Folks, if they put that energytowards, how can we have this
company and disrupt the industry?
Speaker 1 (14:39):
Yeah, that's what we want.
We want to disrupt the industry.
We want to disrupt the market.
Yeah, we want to disrupt theindustry.
We want to disrupt the market.
Yeah, we want to disrupt ourcompetitors, not disrupt the
company.
Right.
Speaker 2 (14:51):
I'm glad we figured that out.
Speaker 1 (14:54):
Well, it is true, though you know you got to do
things differently.
I mean, most of us are workingin industries, most small
businesses are in matureindustries, where there's lots
and lots of players.
Speaker 2 (15:06):
Rarely are they the pioneer out there with something
all new, right, so you've gotto differentiate yourself, yeah,
in order to break through thepack, which means you have to
disrupt something, you gottadisrupt something, and the cool
thing is there's a lot of littlethings you can disrupt to give
you that cutting edge in thebusiness, whether it's customer
(15:29):
service, it's actually projectmanagement, which would be a
fantastic disruptor in a lot ofindustries, like good
communication.
Speaker 1 (15:37):
I don't think it's really understood the way
project management is taught andpeople are trained.
I think they go way off course.
Yeah, it's not.
It's not.
It needs to be more on the, asyou said, the communication and
the human interaction aspectsversus PERT charts and CPM,
logic networks and full wallschedules Agreed, you know, and
(15:59):
that's usually what's emphasized.
Speaker 2 (16:01):
Yeah, and I don't think it's lifted high enough
within the organization or itdoesn't have the esteem that it
needs to have.
Speaker 1 (16:07):
It doesn't, because a lot of companies are classic
matrix organizations where thereare functional departments and
the PM sits outside of that andthey have to go to these
departments to get their teamand the team doesn't report to
them permanently.
Their real boss is theirdepartment head or functional
(16:27):
head.
Gotcha, yeah, and the PM isjust using that talent and
that's why they don't have theclout they need.
Speaker 2 (16:34):
So how would you set it up differently then?
Speaker 1 (16:37):
I like having PMs inside the functional areas.
And so they at least, whateveris the most primary function of
the job is where the PM resides.
So at least they have somecontrol over some of the
resources on a permanentlyassigned base.
Speaker 2 (16:53):
So they're basically in that specific department.
You have a PM per department.
Is what you're saying, right?
Speaker 1 (16:58):
You got PMs in the departments and so if the job
takes 60% of whatever thisfunction is, that's where the PM
is going to reside.
They get the 40 from the otherones.
But at least they got somecontrol over some resources, as
opposed to really having nocontrol.
Yeah, when they sit outsidecompletely yeah.
Speaker 2 (17:19):
Just off on their own , they just ladder up to a head
of customer success or somethinglike that.
Yes, exactly yeah.
I think that's a bigorganization structure of
customer success or somethinglike that.
Yes, exactly yeah.
Speaker 1 (17:26):
I think that's a big organization.
Structure plays a really bigpart in that.
Most people think it's notimportant, but it really is.
Yeah, but you're right thatwhen you start talking about
project management, I think someof the stuff that really makes
people great project managers isreally pretty simple stuff,
yeah.
Speaker 2 (17:45):
Oh, it really is.
Yeah, it's just consistency.
Speaker 1 (17:48):
It is.
It's consistency ofcommunication, prioritization,
documentation of everything,setting the priorities,
communicating to everybody.
Yeah, yeah, and you know we cantalk about that.
We should make that a futureepisode.
Speaker 2 (18:06):
We really should, but I mean on the disruption.
I mean like a company candisrupt in any of those little
small nuances.
So I think that you know what Idon't want to hopefully that
listeners don't take out of itis that you have to have a
business that is specificallydedicated to disrupting an
industry.
It doesn't necessarily have tobe that way.
You can go into a matureindustry with a very specific
(18:29):
thing that you're disrupting,whether it's the customer
service or it's the pricing.
It could be a lot of differentthings, but you can disrupt in
many ways and you can alwaysdisrupt.
So once you disrupt that angle,you can go disrupt another
angle.
Speaker 1 (18:43):
Exactly, keep the cutting edge, and you probably
need to, because one thing isn'tgoing to be enough.
No, everybody else will figurethat out.
So you've got to be constantlydisrupting.
Speaker 2 (18:54):
Yep.
Speaker 1 (18:56):
It's really true.
Well, one of the things we'regoing to talk about today,
speaking of disruption I don'tknow what the relevance is to
the topic, but maybe there'swell, I mean pricing.
Speaker 2 (19:07):
Pricing can be disruptive pricing can be
disruptive.
Speaker 1 (19:10):
I think you know I've again, I've seen so many small
businesses.
My students do these reportsevery semester on a small
business, a consulting project,and if you go back over 20 years
, eric, I bet you I've seen wellover 1,000 companies okay.
(19:30):
And the financials on most ofthose, and if there is a common
theme when it comes to pricing,small businesses don't charge
enough.
Speaker 3 (19:42):
Yeah.
Speaker 1 (19:43):
Because what they can do is provide better service
than a mega corp.
It's true, okay, yep, and theygot to get paid for that, yep,
they're not going to have thevolume, they're not going to
have the cost competitiveness,right.
They, you know they don't havethe resources, but what they do
have is the ability to giveextra high quality service.
Speaker 3 (20:08):
Yeah.
Speaker 1 (20:09):
And that can command a premium in the price.
Absolutely and if you don'thave that.
Then there's just so many smallbusinesses that are just
underpricing what they do.
Speaker 2 (20:21):
You know, and I think that I think part of that might
be just the, the lack ofrealization of how important but
also how complex pricingstrategy really is Like.
And I don't think it's a youknow.
Know, you set it and then youjust kind of forget it and then
just keep working, like you'reconstantly got to be thinking
(20:41):
about that, and how do you moveit?
And I mean what's working right?
Speaker 1 (20:45):
well, sometimes just having a high price actually
creates a perception of higherquality, absolutely, but you
know, so I've always most of mycareer not all of it, obviously
I worked in the professionalservice industry.
And there, you know, the higherpricing allows you to do a
better job you can have betterpeople you can have better
(21:08):
marketing, you can have moreinvestment in your systems all
that.
So the pricing is super, supercritical.
Yeah, the only way you're goingto command that is by being
specialized and by beingperceived as really good right
yep but I'll tell you what,coming out of the main and the
manufacturing side working inthe motorcycle company we I've
(21:30):
gotten a whole new education onhow elastic some things are yeah
, some things now like our bikes, are expensive for what they
are right yeah they're at thehigh end of their category.
We can look and see when wehave price reductions, the
(21:50):
demand goes up significantly, sothat business is completely
different.
It's so much more pricesensitive.
Yeah, then some of the otherbusinesses that I've been a part
of.
Yeah, that it's a realeducation for me.
I think every industry andcompany is different in a way.
Speaker 2 (22:10):
Yeah, it feels like that.
That has a lot to do with, like, you know, what sector are you
in?
The B2C market versus the B2Bmarket, right?
Speaker 1 (22:17):
What sector are you in the B2C market?
Speaker 2 (22:20):
versus the.
B2b market right, Exactly B2C Ithink it's a lot more critical.
Very price sensitive.
Yes, b2b is not as critical.
Yep, I think that's a very goodpoint.
Within the business, for aservice or a product are really
looking for more.
They recognize, respect andneed more of that attention or
(22:43):
that service component to it.
Speaker 1 (22:48):
Like are you going to actually do what you say?
You're going to do?
Yes, because so many otherthings depend on it Absolutely.
Speaker 2 (22:52):
That's why and they're looking at their job
going if I screw this up, if Imake a bad procurement decision
on this, then this is going tobe painful the whole way around
and plus I'm going to look likean idiot and it's going to
affect my job, whereas on apersonal side it's just like,
well, I mean, should I spendthis and am I going to get in
(23:12):
trouble with the spouse or am Igoing to wreck my finances or
whatever it might be?
And so you have to be reallyprice sensitive on that, and
that's really the most importantthing.
Speaker 1 (23:23):
Yes, yes, it is, I think too, like a lot of people
don't understand.
Like in the manufacturingbusiness, you know, I think we
are very, very concerned aboutour margin, all right, but the
fallacy in that is that if youdon't have enough volume, you
don't spread your overhead outon a per unit basis, and so
(23:46):
you're, you're not making themargin.
You think you are Right?
Ok, yeah, Maybe there's amargin on your labor and your
raw costs to make your productAll right, yeah, that can look
great.
But if you don't do that enough, you know, if I, if I triple my
volume, my overhead goes downby two thirds, my overhead
(24:08):
allocation Once I hit break even.
I mean, think about that, andso that's that's where having
volume can really make a bigdifference over.
Which means, how am I going todrive volume?
Well, if it's a B2C business,like you said, that's in a
price-sensitive market.
I've got to drop my price.
Speaker 3 (24:26):
Yeah.
Speaker 1 (24:28):
It's a complex thing.
It is.
It's not that simple, but youknow, I think back.
This is big talk about smallbusiness, right yeah, and I've
seen so many instances where theprice does need to go up.
I mean, I'll never forget I hadthis student who did their
project on a pizza buffetrestaurant where the owner had
(24:50):
two of them and the one of themost profound recommendations of
my student was raise all yoursoft drink prices by 10 cents
and you make $26,000 a year moreprofit.
The guy was taking $200,000 ayear out, wow, but all he had to
do.
This student went and said okay, who are your competitors?
(25:12):
And it was like four or fiveother places.
You know, they're in a majormetro area.
So they went and checked thesoft drink prices of all them
and these guys were the lowestthey were like $1.89.
And they ranged like from a lowof like $1.99 to $2.39.
And, based on the number ofsoft drinks they sold over the
(25:34):
course of a year, $260,000.
God Ten cent increasetranslates to $26,000.
God, 10 cent increasetranslates to 26,000.
That's awesome and nobody'sgoing to say no, I mean a 20
cent increase.
My only thought on that ismaybe you should have gone 20
cents.
Yeah, that's what I'm thinking.
Speaker 2 (25:50):
Then you'd make 52,000 more.
Yeah, that's exactly what I wassitting here thinking that one
simple thing Are people going tocome in there and go $1.89 for
my Coke.
Speaker 1 (26:00):
No, God bless.
Speaker 2 (26:01):
You know they're used to that.
Or $1.99.
Speaker 1 (26:03):
Last week it was $1.89.
Right, they don't know.
No, no, okay, they don't knowwhat it costs, that's awesome
though, because you tooksomething that was already there
.
I mean, it didn't add anyexpense to you whatsoever either
.
That's where I think so manycompanies like another small
(26:25):
business.
I used to live in theDover-Sherborn area of Boston,
which is a very, very affluentrural community.
It's right 16 miles from BostonHarbor.
It's right next to Wellesley,which is one of the W towns in
the Boston area.
Those are the affluent DoverSherbourne, super affluent.
The average income there 20years ago was probably $250,000
(26:47):
a year and there was one placein town that you could buy food
to go and it was really good.
This guy had this.
This place inside the Sitcostation, which was the hub of
all activity in Dover Sherbourne.
They had a Dunkin' Donuts driveup window on the side.
(27:08):
You could get your dry cleaningdone there, you could rent your
videos there, you bought yourgas there and they had this
Italian take takeout.
And so this guy, they own thisand he did okay with it because
I saw his numbers.
Um, I had a friend of mine whowas a local bmw sales guy and he
(27:28):
told me how much money this guywas taking out of his business.
He'd seen all of his taxreturns and and anyway.
So he's selling thesesandwiches for like $3.50 and
these meals for like $6 or $7.
All right, and people arefrigging lined up.
You know, at the end of the daythey're coming home, they're
(27:49):
tired.
Yeah, they don't want to makedinner, they go over.
I mean, they get the food there.
It's fantastic All right.
This is not like the hot dogsand the roller kind of place.
This is completely separate.
It's really freaking good.
The line is out the door and Isaid to this guy dude, you
should raise all your prices.
You got this rich bunch ofcustomers.
(28:10):
There's no way they wouldcomplain if your sandwiches went
from $3.50 to $4.50.
No, yeah, and your meals wentup by $2.00, and you would
double your freaking income.
Yeah, okay, yeah, he's like, Idon't want to do that, I want to
keep it affordable.
Yeah, I'm like, dude, you don'tunderstand your target audience
.
We're not coming here becauseit's cheap.
(28:31):
We're coming here because it'sgood and it's the only thing in
town and it's convenient.
It's convenient.
Yeah, exactly.
You've got to understand whypeople are buying what they buy
from you and price itaccordingly.
Speaker 2 (28:46):
Yeah, very good point , very good point.
Speaker 1 (28:50):
He could have doubled his income.
Yeah, I'm not exaggerating, noproblem in one year.
Speaker 2 (28:54):
Yeah, and not lost any business.
No, people go on.
I mean, a lot of times peoplemight be discontented with that
change in the immediate, but aslong as it's not absurd, right,
I mean, they'll get used to itand go on.
Then you can raise it againanother two years down the road.
Speaker 1 (29:12):
He had a superior product.
He was in the right locationwith the customer base that
could afford it.
You've your product.
He was in the right locationwith the customer base that
could afford it.
Speaker 2 (29:25):
You've got to understand your customers and
you've got to understand whypeople are buying from you, yeah
, and to come up with anappropriate pricing strategy and
so on that note, like I mean,because one of my questions I
was going to ask you is, likefor the new entrepreneur that's
thinking about starting abusiness, like where do you even
start with pricing, you know?
I mean, like, how do you evenget to a price level?
Speaker 1 (29:41):
I'm going to start high.
I think you need to starthigher than you think.
You can always go down, but youcan't go back up easily.
That is very difficult to do,so it's easier to start off high
and test demand.
I always felt like again goingback to my own experience I was
going to be expensive and somaybe I'm not working all the
(30:02):
time.
But when I do work I get paidwell for it and the rest of my
time I can spend devoted to myactual business to make it
better.
So we're better able to servicethese clients as opposed to I
work all the time.
It's cheap, I'm super busy andI have no time to devote to my
business.
Yeah, that's the trap that theaverage small business owner
(30:24):
falls into, you know but, againback on pricing and not charging
enough.
So you know, last night my wifewas out with some of her friends
who just came in town fordinner and I got my 13-year-old
daughter and you know I gobefore she and I are going to go
out to dinner.
So before I go out I got tofeed the critters.
(30:46):
Okay, yeah, you know, we gotthese two giant great Pyrenees
which can like, do you really?
Oh yeah, one weighs 160 and one110.
Speaker 2 (31:00):
I mean it.
The one is like a.
It's like having farm animalsin your house.
Speaker 1 (31:02):
Yeah, they huh.
They're inside.
Oh yeah, oh my, totally inside.
If my cleaners don't come everyweek, there's gonna be like
dust bunnies the size of thishat rolling through that house,
dude, because of the shedding.
But anyway, and then we got onecat.
We used to have four, oh god,one time we got one cat.
So I go to feed the cat andwe're out of canned cat food, of
(31:23):
course it gets it's got it'sdry, but it's gotta have it's
canned or it's gonna yell at youall night long.
Normally we buy this stuff atwalmart neighborhood market.
Yeah, in like 24 things at atime.
It's dirt cheap, right.
I don't know what it costs us.
Three bucks, four, or 30, 40cents a can, basically.
Yeah, okay, so I go.
(31:45):
Well, let's just go to OzarkNatural Foods.
It's convenient.
You know, hazel and I weredriving home.
I'm like I got to get some ofthis food.
Yeah, we stop over there, we goin Ozark Natural Foods.
You, we stop over there, we goin Ozark Natural Foods.
You know what it costs for acan, a small can of cat food at
Ozark Natural Foods, thecheapest one's $1.39.
I had to hunt for that.
The normal ones that are at eyelevel are $1.99 a can.
(32:10):
Dang For a small can, okay, andhow can they get that?
Yeah, when they can buy it for30 cents at Walmart.
Right, because they understandtheir market.
They're sitting right there intown where truly the most
affluent people live, yeah, okay, maybe not the ones that are
(32:30):
showing off the most, that livein the suburban
8,000-square-foot drywallpalaces, right, these are the
people who actually have money,that are living in town in a
3,000 square foot 100-year-oldhouse.
Yeah Okay yeah, they know theygot the market there.
Yeah Okay yeah, they got thelocation, they got the customer
base and they're saying we don'tneed to give this stuff away.
Speaker 2 (32:52):
No, this is what's.
Convenient, they're going topay.
Convenient, they're gonna payit, and the customer also is the
kind that appreciate higherquality type of ingredients they
have.
Yeah, I don't know whetherthere's anything better in their
food or not well I mean, thereapparently is right, yeah and so
they're it's not a familiarbrand.
I'll say that no it's organic,it's natural.
You know it doesn't have allthese other things in it that
(33:14):
could be harming their pets.
Yeah, I love their pets, butthat's also understanding your
market Exactly.
I mean, like I've been in thoseplaces too and you might have a
lot of the high-income earners,but you also have a lot of
folks that are identifying withthat.
That may not be making muchmoney at all, but they're
investing in that identity, thatbelief.
It's a co-op.
Speaker 1 (33:34):
It supports local businesses, yada yada yada
Natural foods.
Speaker 2 (33:38):
Take care of it.
Yes, save the planet.
I mean that's knowing who youraudience is.
Yes, you know.
Speaker 1 (33:43):
Yes, and being able to understand and understanding
why they buy.
Yes, why they come to you, yep,yep.
Speaker 2 (33:49):
So yeah, the complexities, though the pricing
, you know and I think we hit ona little bit about adjusting,
like you're talking about thosestories.
But you know, I've, I've, I'vealso dealt with like pricing
strategists in businesses.
You know that consult.
Speaker 1 (34:05):
Well, you've dealt on a big high level where you're
dealing with like millions andmillions of dollars worth of
consumer products, right, yeah,yeah, that's just like a
completely different level wherethere's gotta be a lot more
science, there's a lot morenumbers.
Speaker 2 (34:19):
Yeah, and I think that it's you know.
But I think you know one of thethings about that is that if
you start out, if you have apricing plan and you're thinking
about starting a business, youknow, do some competitive
analysis, you know what are thecompetition charging, Then how
are you going to disrupt thatwith your pricing?
You can set the same type ofpricing maybe, or a little bit
(34:40):
higher, but you're offering alittle bit higher quality
service.
You have that angle to it.
But then, as you start buildingthat business, you have to be
very conscious of how are youmoving your pricing, how are you
adjusting that based upon thecircumstances, because it's not
a one-time decision.
Speaker 1 (35:00):
No, that's right, You're right, yes.
Speaker 2 (35:03):
I think that's a very good point, and I think there's
macroeconomics that affect it.
There's microeconomics that areaffecting that.
There's the value propositions.
I mean all that type of stuff.
Speaker 1 (35:15):
Competition changes in the marketplace.
Speaker 2 (35:18):
Technology changes.
Yeah, you know, one of mythings on that is like what
we're trying to do here and youknow the other companies is.
You know we've talked about AIa little bit earlier, but you
know how do we use technology tokeep you know, to be able to do
more you know in less time,because in our business
everything's about time, and soif we can Any service business.
Speaker 1 (35:41):
that's all you got and if you can.
Speaker 2 (35:43):
But if you can use the tech, if you can get in that
vein, then you can actually domore with that and that helps
you hold your price.
So there's another strategy toit.
Right, like if you're 150 anhour versus 150 hours an hour in
the market, right, and soyou're in line.
But other people are having toraise their price because
they're not leveraging theefficiencies of technology or
(36:06):
processes Right, but you canhold your price and provide the
same or better, yeah.
Speaker 1 (36:12):
And then, over time, you're probably going to get
even more advantage of it right,absolutely, because you're into
the technology earlier and ifyou continue to invest in it,
you're going to always be aheadof the other guy yeah, and then
your amount per hour is actuallybecoming more profitable.
Yeah, as long as your pricingschedule is on a fixed price.
(36:35):
If you charge by the hour andnow you have less hours to
charge, that defeats the purpose.
Speaker 2 (36:42):
That's a really good point.
I'm a big personally in myexperience, I'm a really, really
big fan of more project or likeproject-based pricing.
I guess you would say, like, Iwill do this.
I already know the amount ofhours it takes me and so I'm
going to charge you $500 flat todo this project, execute it
(37:03):
correctly and it rewards yourefficiency Exactly.
Yeah, it challenges us, itmakes us where we're at, and
then the customer knows what I'mcharging.
Then you're just aligning theexpectations.
Yes, I'm also not burdening theteam with timesheets all the
time.
Speaker 1 (37:20):
I know you know what I'm saying.
I come out of the professionalservice world again, where so
many people don't understandthat they just charge by hour.
Yeah, they're still trying tocharge by hour.
So every time they invest intechnology, it basically
actually comes back to bite themin the rear.
They become less billable yeah.
They make less money yeah, itdoesn't make any sense at all.
(37:42):
No, that's true, you've got tobe on fixed price.
It's also burdensome, you'reright about that time sheet too,
yeah, and.
Speaker 2 (37:51):
I think on the client end it's always this mystery.
It's like I'm always worriedabout how much time are you
freaking spending, mark?
I know it makes me anxious asthe person, the buyer.
Speaker 1 (38:00):
Then you've got to watch over them.
Then you see somebody on theirjob that's not working and
they're smoking.
Speaker 2 (38:05):
Yeah exactly and you're chilling and you're
pulling up and it's like whatthe hell?
And then in your mind you'relike am I really paying?
You know there's $150 for this.
Then you leave and you're justdiscontented.
Speaker 3 (38:15):
And then you probably won't use them again.
Speaker 2 (38:17):
It so true.
You know, I've had someexperience.
Speaker 1 (38:20):
People need to think about this stuff.
They really do.
They really do so many smallbusiness owners.
They just follow convention.
Yes, it's like.
This is the way it was done atthe last place I worked, so I'm
just going to keep doing thesame thing.
Speaker 2 (38:35):
And that comes back to that whole disruption
mentality, right?
Like I mean, we talked aboutthe construction.
It's just an easy one foreverybody to kind of get a
little bit right.
But I mean, you know, if I wasin the business I would just be
charging project-based fees.
You know I'd be like, okay, I'mgoing to do the job for this,
I'm going to get it done rightfor that.
If I can be more efficient inmy job, you know, then I'm
(38:59):
negotiate my subcontractors todo it.
For a certain process I got tolet everything's fixed out.
Speaker 3 (39:05):
Yeah.
Speaker 2 (39:05):
And then I'm not sitting here saying, oh, I think
it's going to be 30 hours, yeah, oh, by the way, when I sent
you the final bill, it was 55hours.
Right, and there's nothing youcan do about it.
Speaker 1 (39:15):
And you lose your repeat business.
But I was thinking the otherday so I had my landscapers out
there I don't know, it was maybea month ago doing the second
pass on the leaves.
Now we need them for the thirdpass because they just keep
freaking, falling Right.
I got this big yard and youdon't like having leaves on the
ground?
Speaker 2 (39:34):
No, yeah, so you're going to do three passes.
It's completely covered rightnow.
I got to have them come back,but there's my pass, so you're
going to do three passes, it'scompletely covered.
Speaker 1 (39:41):
Right now I've got to have him come back, but there's
still some up there and Sonia'slike no, wait, wait, yeah, but
you can't handle that.
But anyway, my point is this hecharges the guy's a great guy
Charges a set price per day forhis guys to come and work, okay.
But so the last time he wasthere, I was out there watching
him.
Well, they got this machine.
(40:01):
Yeah, all right, that chops upthe leaves.
They just shove them into thismachine.
It chops them up and it blowsthem into the back of a truck,
and it did so.
It's very compact that way.
Right, they can haul a lot moreout, less hauls Using fuel,
exactly.
(40:23):
And he was telling me, and Ibought this machine and you know
it saves us so much time andeverything but all I could think
about was that's great for me,yeah, but for you, your hourly
or your day rate, it's the same,yeah.
Whether it might've taken youtwo days at 1200 bucks a day,
yeah, now you can do it in oneday for 1200 bucks.
In a way, you cut your ownthroat.
(40:47):
Hmm, how's that okay?
How's that why?
Because he's not getting paidany more per day, gotcha, he's
not getting paid any more perday.
My last guys would have chargedme.
You know they didn't have thatmachine.
They stacked them in thetrailer and take like six guys
standing in the trailer pushingthe leaves down.
You see what I mean.
Speaker 2 (41:06):
It's almost like they were rewarded for their
inefficiency, and now it's thegreater efficiency, because they
would take them two days to dothe job that these other folks
are doing.
What?
Speaker 1 (41:16):
they should say is I'll do it for $1,500 now.
Speaker 3 (41:20):
Yeah, okay, yeah, I'll do it for $1,500 now.
Speaker 1 (41:22):
Yeah, Okay, yeah.
So now, because I have thismachine and the other guy is
going to charge you two daysit's going to cost $2,400.
I can do it one day for $1,500or $1,800.
And then the technologyactually rewards me for making
this big investment in thistruck and this trailer-mounted
thing and freaking who knows.
I bet you that trailer thingcosts at least 50 grand that
(41:44):
chops them up and blows it.
Speaker 2 (41:46):
Oh yeah, okay, and you could kill yourself with
that process strategy if you'renot really careful about that.
Speaker 1 (41:51):
Just like you said yeah, so you just do more work
and get paid the same amount ofmoney and you've got the
overhead of the equipment.
But I think that's not thatuncommon.
Speaker 2 (42:02):
No, no, I equipment, but I think that's not that
uncommon?
Speaker 1 (42:07):
no, no, I mean that's a sneaky thing.
That's a really sneaky thing.
That's the way early on, when,when the architecture and
engineering industry startedusing cad.
Yeah, that was the problemthere, because they're charging
by the hour, yeah, for thistalent.
Now we've got this cad thatmultiplies their effectiveness
computer-aided design but we'restill getting paid the same
thing.
But now we're paying a milliondollars for our Intergraph CAD
(42:30):
system with a VAX and all the.
You know what I mean.
Yeah, just made less money.
That's all we did.
Might as well have an army ofguys out there drawing ink on
linen.
Yeah yeah, if we had a fixedprice strategy, that would have
been another matter To start outwith.
Yeah, yeah no I agree.
(42:52):
Anyway, the pricing thing it isone of the four Ps of the
marketing mix, true, and I thinkit's ignored by too many
companies.
They just keep working onpromotion, maybe they refine the
product, but they're not reallythinking about pricing the way
they should.
Yeah, and I think again, youknow, with a lot of small
(43:15):
businesses, I always say look athow the consumer product
companies do things.
They make billions of dollars.
There's a lot of science behindwhat they do.
Can you learn from them?
You know, like advertising, Ialways say look at the consumer
product companies.
Speaker 3 (43:33):
They know what they're doing.
Speaker 2 (43:34):
They're the best, right yeah.
Speaker 3 (43:35):
They know what they're doing.
Speaker 1 (43:37):
Yep, you know, commercials aren't a minute long
any longer because they don'tneed to be.
They can be 15 seconds long.
Okay, they know that's better.
Yeah, whatever it is, they'verefined their packaging design.
They've refined their pricingstrategies.
Follow them, it's true.
(43:58):
What can you learn from them?
They got armies of scientistsworking on this stuff.
Speaker 2 (44:04):
They really do.
Yeah, people that are like.
I've worked with a lot of thosefolks.
Speaker 1 (44:08):
I know You've had experience with them.
Speaker 2 (44:10):
I mean, they're some of the smartest people that I've
ever met Exactly.
Speaker 3 (44:12):
I mean all around Sure.
Speaker 2 (44:14):
All of the companies, yeah, I believe it.
Big brands, I guess that youknow now you point that out,
working with that for the lengthof time that I have, and then
seeing some of the othersoutside of the CPG realm, or the
brands and products, it's justlike I mean the inefficiencies,
the lack of really investing inresearch, thought processes,
(44:38):
strategy, all that type of stuff, and then action, you know, and
then follow-ups.
I mean, you know, the thing iswhen you work with one of those
companies, like you've got to beon your A-game, 100% on your
A-game.
Speaker 1 (44:51):
There's a lot of money riding on every decision
they make.
There's a lot of money and theother thing they do well is they
experiment.
They do they test things out tosee if they work.
Is they experiment?
They do they test things?
Speaker 2 (45:01):
out to see if they work.
You know, one thing that I'vefound that they do excellently
well as well is that theyExcellently.
Speaker 1 (45:08):
well, I wonder if that's a word as well,
excellently as well.
Speaker 3 (45:13):
I said excellently, as well as well, that makes
sense.
Speaker 2 (45:19):
It kind of makes sense, right, it kind of makes
sense Right.
But what they do excellently,mark, is if you do, if you do
business with them, they monitorand manage you as the, as the
contractor, like with, withsuperb skill, like they don't
let you project managementmanage their job with you.
(45:40):
They project manage your jobwith them.
Speaker 3 (45:43):
Yeah.
Speaker 2 (45:43):
And I think that that's one of the greatest
lessons, right?
It's like they will make surethey are holding you accountable
to what you said day one, right?
And then they're following youthrough on every single meeting
that they have and they'rewaiting for the recap notes.
Speaker 1 (45:58):
That's tough Dude it is.
It's a high standard ofperformance and management.
Speaker 2 (46:03):
It really is, but it's a great, I mean, it's a
great lesson, I mean, and that'swhat makes them so great though
.
Speaker 1 (46:09):
Yeah.
Speaker 2 (46:10):
In all honesty, they're all trained that way,
they're all thinking that way.
Speaker 1 (46:14):
Well, all I know is that there's so many
opportunities out there.
There are.
You know, it's just every day Iwake up and I'm like holy cow.
You know there's some peopleout there who are super negative
.
The world's turning to shit,whatever.
I don't see it that way man,and then there's other people
(46:35):
who are out there and go.
You know what All the change,the turmoil, the confusion
creates the opportunity.
Speaker 2 (46:44):
It's all opportunity.
Speaker 1 (46:45):
That's the entrepreneurial mindset.
Speaker 2 (46:48):
It is man.
That's how entrepreneurs win.
That's how they've always won.
That's how they'll continue towin.
I think that we just have theability in today's world to hear
so many different voices.
The voices now are loud andclear.
You know about the negativeside, or about the worries and
the fears, and everybody feedsoff that.
But that's kind of like goingback to what I was telling.
(47:08):
My team is like guys, like ifwe can imagine, if everybody
that walks in this door likewe've done our own self, you
know growth in the, in the lightand positivity when you walk in
the door and then you bringthat to your clientele, I mean
it's going to reward you ahundredfold.
No kidding a hundredfold.
Speaker 1 (47:27):
Yeah, then you're a positive force for them that
you're an energizing.
Uh, you know.
Speaker 2 (47:34):
Leader of them, yes, yeah, it's a great thing, man.
Yeah, you're right, you don'tneed that much capital, you just
need that much energy andpositivity.
Speaker 1 (47:45):
Energy is in a way, capital.
Speaker 2 (47:46):
I think it's more precious.
That's what I'm starting todiscover you can do a lot when
you have a lot of energy, you'reright.
Speaker 1 (47:55):
Speaking of energy, we need to end this show.
It's all over, unfortunately.
Speaker 2 (48:02):
It's a sad thing, man .
We have to end this show we do.
Speaker 1 (48:04):
It's all over, unfortunately Sad thing, man it
is.
We have to say goodbye untilanother time.
We're always interested in yourfeedback.
Love the questions Listeners.
Love the questions Send usquestions.
Speaker 2 (48:16):
If there's a topic you want us to talk about, we'd
love that.
Speaker 1 (48:18):
Yeah, we're always looking for sponsors.
Anybody who has a product orservice of value to small
businesses reach out to us.
We'd love to take a look at it.
If we think it's somethingthat's valuable, we'd be glad to
promote it.
Absolutely, okay, absolutely.
We're not going to promote itif we don't think it's valuable.
That's true.
We don't want to be quoted ifwe don't think it's valuable.
(48:39):
That's true.
And we're here to help, andwe're here to give guidance and
we're here to help you.
Keep your heads on straightsmall business owners.
Speaker 2 (48:53):
Right, because we need help with that you help me
keep my head on straight Mark.
Speaker 1 (48:57):
Well, you help me keep mine on straight.
Thanks, buddy.
All right, everybody.
Well, until next week.
This has been another episodeof Big Talk About Small Business
.
Speaker 2 (49:09):
Have a good day you too.
Speaker 3 (49:18):
Thanks for tuning into this episode of Big Talk
About Small Business.
If you have any questions orideas for upcoming shows, be
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