March 31, 2025 • 16 mins
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Steve reveals the five things financially savvy CEOs focus on (and the common traps they avoid) to build cash-rich, high-growth companies.
If you’re ready to shift from operator to strategic thinker, this one’s for you.
Disclaimer:
BYFIQ, LLC is a wholly owned entity of Coltivar Group, LLC. The views expressed here are those of the individual Coltivar Group, LLC (“Coltivar”) personnel quoted and are not the views of Coltivar or its affiliates. Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, Coltivar has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation.
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendations. The Company is not affiliated with, nor does it receive compensation from, any specific security. Please see https://www.byfiq.com/terms-and-privacy-policy for additional important information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
If you're running a business and if somebody knows
how to do what you're doing andthey can give you a five-year
shortcut, why wouldn't you bringthem on?
That's crazy to me.
This podcast, boosting yourFinancial IQ, is about business,
financial literacy, strategiesfor profitability and the
principles taught at byfiqcom.
My hope is that you'll applythe lessons learned and that we
can work together soon in mymastery program.
(00:22):
Enjoy the show and don't forgetto subscribe.
If you're building a business,this one's for you.
Today, I want to talk about howsmart CEOs think about money and
what they focus on and whatthey ignore.
Most business owners focus onrevenue and profit, but the
smartest CEOs think about moneycompletely differently.
(00:43):
So in this episode, I'll breakdown how high-level CEOs manage
finances and what theyprioritize and what they avoid
to build scalable, cash-richbusinesses.
Here's why this matters.
There's a difference between afinancially savvy CEO and one
who struggles, and the shiftfrom an operator mindset to a
strategic financial mindset isabsolutely critical if you want
(01:06):
to build a business that isresilient and that drives
tremendous value for allinvolved.
All right, so let's talk aboutfirst what smart CEOs focus on,
and there's five, the big fivethat I want to talk about.
Number one is free cashflowover revenue and profit.
Now here's the deal Revenuealone is just a vanity metric
(01:29):
and profit doesn't always meansuccess, right?
So check this out.
I've worked with companiesbefore that have profit and they
may have, let's say, a half amillion dollars in profit, but
they have no cashflow and, trustme, that's a super painful
situation to be in.
Years ago, I was working withthis doctor and he owned a
(01:49):
dermatology practice and he cameto me.
He's like Steve, I have no cash.
There's a problem because theIRS says I owe them all this
money in taxes, but that can'tbe possible because I have no
cash and I'm like, yeah, but youhave profit.
You just use your cash on CapExand you have a tied up and
working capital and he tookdistributions and therefore you
don't have any cash, but youstill owe these taxes.
(02:11):
And guess what?
He had to pull on his line ofcredit just to cover his tax
bill.
A terrible situation to be in.
So in your business you couldhave profit but not cashflow.
I have another business.
They have over $2 millioncaught up in working capital and
it makes up a significantportion of their revenue.
So if they continue to scale.
They're going to just need moreand more capital into the
(02:31):
business until they fix thisproblem, right?
So that's why revenue alone isjust a vanity metric.
I've had friends before come tome and they're like oh yeah,
you know, I grew my business to,you know $10 million in revenue
and I'm like that's great, buthow much do you have in profit?
And, more importantly, how muchdo you have in cashflow, right?
So the key question to consideris how much cash is actually
(02:53):
hitting your bank account afterexpenses, investments and debt
payments.
That's the key.
How much cash do you actuallyhave?
And if you're struggling withcash, you're not alone.
A lot of business ownersstruggle with cash and it can be
hard to manage, it can be hardto compute, but it's not
impossible.
I'll tell you you could go tocoldfirecom as of the day of
(03:15):
this recording and you could getthe cashflow book that I just
wrote.
If you live in the continentalUS, you get it for free.
Just cover the shipping.
I'll cover the cost of theprinting the book, and in the
book I provide you with thestrategies that you need in
order to build a great company.
Now, this offer may change inthe future, so if you're
listening to this one day andyou can no longer get the book.
(03:35):
Hey, it's a limited time thing,so take advantage of it right
now.
If you live outside these areasor you want other formats, you
can get the Audible version now.
You can get the Kindle version.
I made it as cheap as possible,right?
Because I care more aboutpeople learning about cashflow
and building great businessesthan making a little bit of
money off a book or an audiobook, right?
So check that out if you'restruggling.
(03:57):
But the number one point that Iwant to drive home is that free
cashflow reigns over revenue andprofit, and that's what smart
CEOs focus on.
Cashflow reigns over revenueand profit, and that's what
smart CEOs focus on, right.
So if you have a forecast inyour company, great.
If it's rolling, even better.
If you go from revenue all theway down to free cashflow and
you're projecting cashflow,that's the ultimate state to be
in and that's what we do for allof our clients.
(04:17):
We get them down to freecashflow and you should be
paying attention to that as wellin your business.
All right, numero dos fromgringo white boy Steve, is
return on invested capital ROICover just profits.
So you may have a company andit earns a hundred thousand
dollars in profit.
And then there's anotherbusiness and they earn $200,000
(04:38):
in profit.
And if I asked you which onewould you rather own, you may be
tempted to say, well, I'll ownthe company that has $200,000 in
profit.
But if I said, okay, but yeah,it's going to require a $10
million investment to get that,versus the company that's making
$100,000 is only going torequire a $10,000 investment,
(04:59):
which one would you rather own?
And this is where return oninvested capital is important.
So you have to look at profit,right.
So profit's good to measure inaddition to cashflow, but you
have to look at profit over yourinvested capital.
So the formula on return oninvested capital is net
operating profit after taxdivided by invested capital.
(05:21):
Invested capital has twocomponents working capital and
net property, plant andequipment.
You can get both of these offyour balance sheet, all right.
So, like I said, you may haveone company they have $10
million in profit but poor ROIC,and one with 3 million in
profit but a high ROIC.
I would take the one with ahigh ROIC because that business
(05:43):
will generate returns that youcould reinvest in the business
and it'll scale, it'll createthis flywheel.
All right, so that's number two.
Number three smart CEOs.
They focus on pricing and grossmargins over just sales volume.
So low margin businesses theystruggle, even if they sell a
lot and if they're stuck in thiscompetitive space it's just a
(06:06):
race to the bottom.
So smart CEOs focus on strategyand positioning their companies
in markets where they could getprice premiums or at least
competitive margins or aboveaverage margins.
So it's all about positioningand it's asking how can we
charge more and deliver morevalue?
That's what smart CEOs ask.
And there's the 1% rule.
(06:27):
Increasing prices by 1% canhave a massive impact on
profitability and I did a studyacross the board, just
generically across companies andindustries, and what I found is
that if you increase pricing by1%, it has like a 12% impact on
the bottom line and it's thebest lever typically in business
(06:47):
is pricing.
So just remember the 1% ruleand if you can focus on pricing
and gross margin, like I said,which requires strategy and
market focus and position andproduct market fit all these
things your business will be somuch more successful rather than
just focusing on volume and notfixing these issues.
All right.
(07:08):
Number four is liquidity andcapital allocation over just
expense cutting.
So having cash on hand is supercritical, because cash reigns
the roost.
If you have cash, you canreinvest it.
You could deploy it for certainopportunities versus being cash
strapped.
So that's why I preferliquidity and capital allocation
(07:29):
over just cutting cost, whichleads me into my second part
Great CEOs.
They allocate capital byreinvesting in growth if returns
are strong.
So if ROIC return on investedcapital is strong, smart CEOs
will double down on growth.
They could also use capital topay down debt right If interest
(07:50):
rates are high.
Or they can make distributionsor reinvestments if they're
generating excess cash right.
So Warren Buffett he said, if acompany has no good investment
opportunities, the best thing todo is to return cash to
investors.
And smart CEOs know when it'sbest to pay down debt, when to
(08:10):
reinvest and when to returnmoney to investors.
All right, number five this isthe fifth thing of the big five.
Smart CEOs focus on long-termstrategic investments over
short-term gains.
The smartest CEOs they don'tjust think about this quarter's
profits, they think about three,five or 10 years ahead.
So when you invest in people,brand and systems, instead of
(08:33):
only chasing short termprofitability by pursuing other
gimmicks, you'll build avaluable, resilient company.
So think about Amazon.
They invested heavily inlogistics and infrastructure and
they lost a ton of money upfront.
They burnt through a lot ofcash instead of maximizing
short-term profits.
And they could have maximizedshort-term profits in the
beginning, right, they couldhave raised prices on their
(08:56):
platform, but then they wouldn'tbe where they are today.
Instead, they focused on theinfrastructure, and now the
company can leverage thiscapability where you could go on
and you can order something inyour pajamas with your thumb in
like two seconds, right, whichis amazing.
So that's what smart CEOs do.
I'll just give you a recap freecashflow over revenue, and
(09:18):
profit return on investedcapital was number two over just
profit margins.
Number three, pricing and grossmargins over sales volume.
Number four, liquidity andcapital allocation over just
expense cutting.
And number five, long-termstrategic investments over
short-term gains.
And guess what?
If you listen to other episodesof mine, these activities sound
(09:40):
like strategic finance versusoperating finance.
These activities sound likestrategic finance versus
operating finance.
Remember, operating finance isall about doing transactions and
compliance and doing debits andcredits and creating financial
reports and budgets, which areall critical.
But these activities that Ijust mentioned here are part of
strategic finance.
This is what we do at Coltivarand this is what really drives
(10:04):
value and you can do the sameexact thing in your business.
Right, here's part two, whatsmart CEOs ignore and what slows
businesses down.
So, number one chasing everynew revenue stream.
So not all revenue is goodrevenue.
There's some revenue that isterrible revenue to pursue.
So don't just chase revenue.
(10:24):
Remember, chase cashflow.
There's the danger ofdistraction, which happens when
you expand into areas thatdilute core profitability.
So smart CEOs focus on highmargin, scalable growth
opportunities, without gettingdistracted by every new shiny
object.
There's so many CEOs who getbored in their career and
they're like I need to findsomething new.
(10:45):
Like I got a buddy and he doesthis and I'm like, yeah, but if
you pivot, that's a hugestrategic risk you're taking.
So just keep doing more of whatyou're doing, make it better
and then do new.
All right, don't do the otherway around.
So that's number one.
Also, smart CEOs they ignoreobsessing over taxes instead of
growth.
(11:05):
So avoiding taxes isn't abusiness strategy.
So if you're trying to avoidtaxes, you may be doing some
illegal stuff.
Don't do that.
Instead, there's a benefit ofpaying some taxes, of showing
some profitability, because ifyou constantly show zero profit
(11:26):
in your business because you'relike buying vehicles and taking
advantage of section 179,depreciation, and you're writing
it down, just so.
You're like, yeah, I avoidedtaxes and I bought this new
business truck.
And look at me, I'm so smart.
Well, guess what?
Later on down the road, whenyou go to get a loan, what's the
loan officer going to basetheir decision on when it comes
(11:48):
to extending credit?
Your tax returns?
And then what are you going todo?
Explain?
You're like, well, I mean, butit's like it doesn't work that
well.
And guess what?
Taxes are going to be a lothigher in the future most likely
with rising debt, et ceterathan they are right now.
(12:11):
So I don't know why so manycompanies spend so much time
obsessing over avoiding taxes.
Now, sure, there are some taxstrategies you could pursue to
pay less taxes.
I'm not saying that you shouldjust overpay in taxes.
I'm just saying that taxesisn't a business strategy.
It's a side benefit of goodfinancial planning.
The best CEOs focus on makingmore money rather than trying to
(12:32):
find every tax loophole.
So just go out there, grow yourbusiness, expand your business,
make more profit, becausethere's a multiple on that
profit that one day you'llrealize if you ever sell your
company.
Number three smart CEOs ignorecutting costs instead of growing
profitably.
So cost cutting has itslimitations, but scalable growth
(12:53):
doesn't.
So when I go into a business,you can only cut so much.
Really, the upside is in theexponential growth that exists.
So if you focus just onefficiency, you're only gonna
get so efficient.
And I'm working with a companyright now and I'm constantly
telling them like, drive greaterrevenue.
You've optimized the business.
You may be able to squeeze outa percent here or there, but the
(13:17):
upside with revenue istremendous.
So focus on that.
And then the last thing istrying to do everything
themselves.
Smart CEOs delegate and focus onhigh-level decision-making, and
this is really critical becauseif you don't, you're going to
just get stuck in the weeds.
But also I'll say this caveatthat doesn't mean, as a CEO,
you're excused fromunderstanding what everybody is
(13:40):
focused on and understandingexactly what the priorities are
of people who report to you.
Right, this is really critical.
Being a CEO doesn't mean youdon't do anything, you just
delegate everything away.
But then you have no clue whatthe KPIs are for your business,
what your IARs are, yourinitiatives, actions, results.
That's the framework we use atColtivar to drive strategy.
(14:02):
You have to know what theseinitiatives are, the actions,
the results, the KPIs, thefinancials.
You have to know all this stuff, but you could delegate so you
could focus on high leveldecision-making.
And smart CEOs recognize theimportance of hiring great
finance teams, advisors andoperators, because that's where
they get the greatest leverage.
(14:22):
If you're running a business,and if somebody knows how to do
what you're doing and they cangive you a five year shortcut,
why wouldn't you bring them on?
That's crazy to me.
So, like, if your business isstruggling with finance, like I
work with companies and they'relike when were you five years
ago, steve?
It's like, yeah, I know, I wishI would have found you five
years ago because you'd be somuch further ahead, but they
just stay stuck year after yearafter year instead of just
(14:46):
taking action.
So there you have it.
We work with a lot of smartCEOs at Coltivar and if you ever
want to talk about how we mightbe able to help your business,
you can always connect with usat coltivar.
com.
All right, that's what I havefor you.
I hope you have a great weekand, until next episode, take
care of yourself.
Cheers.
If you're running a business and if somebody knows
how to do what you're doing andthey can give you a five-year
shortcut, why wouldn't you bringthem on?
That's crazy to me.
This podcast, boosting yourFinancial IQ, is about business,
financial literacy, strategiesfor profitability and the
principles taught at byfiqcom.
My hope is that you'll applythe lessons learned and that we
can work together soon in mymastery program.
(00:22):
Enjoy the show and don't forgetto subscribe.
If you're building a business,this one's for you.
Today, I want to talk about howsmart CEOs think about money and
what they focus on and whatthey ignore.
Most business owners focus onrevenue and profit, but the
smartest CEOs think about moneycompletely differently.
(00:43):
So in this episode, I'll breakdown how high-level CEOs manage
finances and what theyprioritize and what they avoid
to build scalable, cash-richbusinesses.
Here's why this matters.
There's a difference between afinancially savvy CEO and one
who struggles, and the shiftfrom an operator mindset to a
strategic financial mindset isabsolutely critical if you want
(01:06):
to build a business that isresilient and that drives
tremendous value for allinvolved.
All right, so let's talk aboutfirst what smart CEOs focus on,
and there's five, the big fivethat I want to talk about.
Number one is free cashflowover revenue and profit.
Now here's the deal Revenuealone is just a vanity metric
(01:29):
and profit doesn't always meansuccess, right?
So check this out.
I've worked with companiesbefore that have profit and they
may have, let's say, a half amillion dollars in profit, but
they have no cashflow and, trustme, that's a super painful
situation to be in.
Years ago, I was working withthis doctor and he owned a
(01:49):
dermatology practice and he cameto me.
He's like Steve, I have no cash.
There's a problem because theIRS says I owe them all this
money in taxes, but that can'tbe possible because I have no
cash and I'm like, yeah, but youhave profit.
You just use your cash on CapExand you have a tied up and
working capital and he tookdistributions and therefore you
don't have any cash, but youstill owe these taxes.
(02:11):
And guess what?
He had to pull on his line ofcredit just to cover his tax
bill.
A terrible situation to be in.
So in your business you couldhave profit but not cashflow.
I have another business.
They have over $2 millioncaught up in working capital and
it makes up a significantportion of their revenue.
So if they continue to scale.
They're going to just need moreand more capital into the
(02:31):
business until they fix thisproblem, right?
So that's why revenue alone isjust a vanity metric.
I've had friends before come tome and they're like oh yeah,
you know, I grew my business to,you know $10 million in revenue
and I'm like that's great, buthow much do you have in profit?
And, more importantly, how muchdo you have in cashflow, right?
So the key question to consideris how much cash is actually
(02:53):
hitting your bank account afterexpenses, investments and debt
payments.
That's the key.
How much cash do you actuallyhave?
And if you're struggling withcash, you're not alone.
A lot of business ownersstruggle with cash and it can be
hard to manage, it can be hardto compute, but it's not
impossible.
I'll tell you you could go tocoldfirecom as of the day of
(03:15):
this recording and you could getthe cashflow book that I just
wrote.
If you live in the continentalUS, you get it for free.
Just cover the shipping.
I'll cover the cost of theprinting the book, and in the
book I provide you with thestrategies that you need in
order to build a great company.
Now, this offer may change inthe future, so if you're
listening to this one day andyou can no longer get the book.
(03:35):
Hey, it's a limited time thing,so take advantage of it right
now.
If you live outside these areasor you want other formats, you
can get the Audible version now.
You can get the Kindle version.
I made it as cheap as possible,right?
Because I care more aboutpeople learning about cashflow
and building great businessesthan making a little bit of
money off a book or an audiobook, right?
So check that out if you'restruggling.
(03:57):
But the number one point that Iwant to drive home is that free
cashflow reigns over revenue andprofit, and that's what smart
CEOs focus on.
Cashflow reigns over revenueand profit, and that's what
smart CEOs focus on, right.
So if you have a forecast inyour company, great.
If it's rolling, even better.
If you go from revenue all theway down to free cashflow and
you're projecting cashflow,that's the ultimate state to be
in and that's what we do for allof our clients.
(04:17):
We get them down to freecashflow and you should be
paying attention to that as wellin your business.
All right, numero dos fromgringo white boy Steve, is
return on invested capital ROICover just profits.
So you may have a company andit earns a hundred thousand
dollars in profit.
And then there's anotherbusiness and they earn $200,000
(04:38):
in profit.
And if I asked you which onewould you rather own, you may be
tempted to say, well, I'll ownthe company that has $200,000 in
profit.
But if I said, okay, but yeah,it's going to require a $10
million investment to get that,versus the company that's making
$100,000 is only going torequire a $10,000 investment,
(04:59):
which one would you rather own?
And this is where return oninvested capital is important.
So you have to look at profit,right.
So profit's good to measure inaddition to cashflow, but you
have to look at profit over yourinvested capital.
So the formula on return oninvested capital is net
operating profit after taxdivided by invested capital.
(05:21):
Invested capital has twocomponents working capital and
net property, plant andequipment.
You can get both of these offyour balance sheet, all right.
So, like I said, you may haveone company they have $10
million in profit but poor ROIC,and one with 3 million in
profit but a high ROIC.
I would take the one with ahigh ROIC because that business
(05:43):
will generate returns that youcould reinvest in the business
and it'll scale, it'll createthis flywheel.
All right, so that's number two.
Number three smart CEOs.
They focus on pricing and grossmargins over just sales volume.
So low margin businesses theystruggle, even if they sell a
lot and if they're stuck in thiscompetitive space it's just a
(06:06):
race to the bottom.
So smart CEOs focus on strategyand positioning their companies
in markets where they could getprice premiums or at least
competitive margins or aboveaverage margins.
So it's all about positioningand it's asking how can we
charge more and deliver morevalue?
That's what smart CEOs ask.
And there's the 1% rule.
(06:27):
Increasing prices by 1% canhave a massive impact on
profitability and I did a studyacross the board, just
generically across companies andindustries, and what I found is
that if you increase pricing by1%, it has like a 12% impact on
the bottom line and it's thebest lever typically in business
(06:47):
is pricing.
So just remember the 1% ruleand if you can focus on pricing
and gross margin, like I said,which requires strategy and
market focus and position andproduct market fit all these
things your business will be somuch more successful rather than
just focusing on volume and notfixing these issues.
All right.
(07:08):
Number four is liquidity andcapital allocation over just
expense cutting.
So having cash on hand is supercritical, because cash reigns
the roost.
If you have cash, you canreinvest it.
You could deploy it for certainopportunities versus being cash
strapped.
So that's why I preferliquidity and capital allocation
(07:29):
over just cutting cost, whichleads me into my second part
Great CEOs.
They allocate capital byreinvesting in growth if returns
are strong.
So if ROIC return on investedcapital is strong, smart CEOs
will double down on growth.
They could also use capital topay down debt right If interest
(07:50):
rates are high.
Or they can make distributionsor reinvestments if they're
generating excess cash right.
So Warren Buffett he said, if acompany has no good investment
opportunities, the best thing todo is to return cash to
investors.
And smart CEOs know when it'sbest to pay down debt, when to
(08:10):
reinvest and when to returnmoney to investors.
All right, number five this isthe fifth thing of the big five.
Smart CEOs focus on long-termstrategic investments over
short-term gains.
The smartest CEOs they don'tjust think about this quarter's
profits, they think about three,five or 10 years ahead.
So when you invest in people,brand and systems, instead of
(08:33):
only chasing short termprofitability by pursuing other
gimmicks, you'll build avaluable, resilient company.
So think about Amazon.
They invested heavily inlogistics and infrastructure and
they lost a ton of money upfront.
They burnt through a lot ofcash instead of maximizing
short-term profits.
And they could have maximizedshort-term profits in the
beginning, right, they couldhave raised prices on their
(08:56):
platform, but then they wouldn'tbe where they are today.
Instead, they focused on theinfrastructure, and now the
company can leverage thiscapability where you could go on
and you can order something inyour pajamas with your thumb in
like two seconds, right, whichis amazing.
So that's what smart CEOs do.
I'll just give you a recap freecashflow over revenue, and
(09:18):
profit return on investedcapital was number two over just
profit margins.
Number three, pricing and grossmargins over sales volume.
Number four, liquidity andcapital allocation over just
expense cutting.
And number five, long-termstrategic investments over
short-term gains.
And guess what?
If you listen to other episodesof mine, these activities sound
(09:40):
like strategic finance versusoperating finance.
These activities sound likestrategic finance versus
operating finance.
Remember, operating finance isall about doing transactions and
compliance and doing debits andcredits and creating financial
reports and budgets, which areall critical.
But these activities that Ijust mentioned here are part of
strategic finance.
This is what we do at Coltivarand this is what really drives
(10:04):
value and you can do the sameexact thing in your business.
Right, here's part two, whatsmart CEOs ignore and what slows
businesses down.
So, number one chasing everynew revenue stream.
So not all revenue is goodrevenue.
There's some revenue that isterrible revenue to pursue.
So don't just chase revenue.
(10:24):
Remember, chase cashflow.
There's the danger ofdistraction, which happens when
you expand into areas thatdilute core profitability.
So smart CEOs focus on highmargin, scalable growth
opportunities, without gettingdistracted by every new shiny
object.
There's so many CEOs who getbored in their career and
they're like I need to findsomething new.
(10:45):
Like I got a buddy and he doesthis and I'm like, yeah, but if
you pivot, that's a hugestrategic risk you're taking.
So just keep doing more of whatyou're doing, make it better
and then do new.
All right, don't do the otherway around.
So that's number one.
Also, smart CEOs they ignoreobsessing over taxes instead of
growth.
(11:05):
So avoiding taxes isn't abusiness strategy.
So if you're trying to avoidtaxes, you may be doing some
illegal stuff.
Don't do that.
Instead, there's a benefit ofpaying some taxes, of showing
some profitability, because ifyou constantly show zero profit
(11:26):
in your business because you'relike buying vehicles and taking
advantage of section 179,depreciation, and you're writing
it down, just so.
You're like, yeah, I avoidedtaxes and I bought this new
business truck.
And look at me, I'm so smart.
Well, guess what?
Later on down the road, whenyou go to get a loan, what's the
loan officer going to basetheir decision on when it comes
(11:48):
to extending credit?
Your tax returns?
And then what are you going todo?
Explain?
You're like, well, I mean, butit's like it doesn't work that
well.
And guess what?
Taxes are going to be a lothigher in the future most likely
with rising debt, et ceterathan they are right now.
(12:11):
So I don't know why so manycompanies spend so much time
obsessing over avoiding taxes.
Now, sure, there are some taxstrategies you could pursue to
pay less taxes.
I'm not saying that you shouldjust overpay in taxes.
I'm just saying that taxesisn't a business strategy.
It's a side benefit of goodfinancial planning.
The best CEOs focus on makingmore money rather than trying to
(12:32):
find every tax loophole.
So just go out there, grow yourbusiness, expand your business,
make more profit, becausethere's a multiple on that
profit that one day you'llrealize if you ever sell your
company.
Number three smart CEOs ignorecutting costs instead of growing
profitably.
So cost cutting has itslimitations, but scalable growth
(12:53):
doesn't.
So when I go into a business,you can only cut so much.
Really, the upside is in theexponential growth that exists.
So if you focus just onefficiency, you're only gonna
get so efficient.
And I'm working with a companyright now and I'm constantly
telling them like, drive greaterrevenue.
You've optimized the business.
You may be able to squeeze outa percent here or there, but the
(13:17):
upside with revenue istremendous.
So focus on that.
And then the last thing istrying to do everything
themselves.
Smart CEOs delegate and focus onhigh-level decision-making, and
this is really critical becauseif you don't, you're going to
just get stuck in the weeds.
But also I'll say this caveatthat doesn't mean, as a CEO,
you're excused fromunderstanding what everybody is
(13:40):
focused on and understandingexactly what the priorities are
of people who report to you.
Right, this is really critical.
Being a CEO doesn't mean youdon't do anything, you just
delegate everything away.
But then you have no clue whatthe KPIs are for your business,
what your IARs are, yourinitiatives, actions, results.
That's the framework we use atColtivar to drive strategy.
(14:02):
You have to know what theseinitiatives are, the actions,
the results, the KPIs, thefinancials.
You have to know all this stuff, but you could delegate so you
could focus on high leveldecision-making.
And smart CEOs recognize theimportance of hiring great
finance teams, advisors andoperators, because that's where
they get the greatest leverage.
(14:22):
If you're running a business,and if somebody knows how to do
what you're doing and they cangive you a five year shortcut,
why wouldn't you bring them on?
That's crazy to me.
So, like, if your business isstruggling with finance, like I
work with companies and they'relike when were you five years
ago, steve?
It's like, yeah, I know, I wishI would have found you five
years ago because you'd be somuch further ahead, but they
just stay stuck year after yearafter year instead of just
(14:46):
taking action.
So there you have it.
We work with a lot of smartCEOs at Coltivar and if you ever
want to talk about how we mightbe able to help your business,
you can always connect with usat coltivar.
com.
All right, that's what I havefor you.
I hope you have a great weekand, until next episode, take
care of yourself.
Cheers.
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