hello my name is Gary Shotton and in this lesson I’m going to call it a rumble strips and it’s in reference to how you would feel your business is going and how to make adjustments and how you can kind of sense that things are going down the center of the lane or you’re getting off-track and a rumble strip is what we have in America anyway kind of embedded into the roadway that if you get outside your lane the wheels are fitting hitting this impressions inside the pavement that make a pretty loud noise butter noise like a rumble it’s like you know that you’re on this strip it could be in the center of the lane meaning you’re getting off-center but for sure on the sidelines so that you don’t run off the side of the road and it’s there because somebody could easily attend a small fall asleep and and they’re dozing just a little bit and they get outside the lane and that’s enough usually to wake that person up of course that person should pull over to the side take a nap and then start over but the rumble strip is there and you know I’ve been at occasions to help a few people that are like fifteen years old or 16 years old and I said hey let me just take you out there no way I’ll let you drive my pickup truck or my vehicle oh no I’m afraid I’m Fred oh no get behind the wheel and we’ll go inside and this happened one time a couple months ago and we’re in the parking lot and they’re real nervous and everything and so oh okay just put it in gear and go forward and backward and forward it’s a wide open you can’t hit anything there’s nobody around and then I say well let’s go out on the on the street and there wasn’t a lot of traffic it wasn’t going fast and this person was 16 but they were almost petrified shaking a little bit and and going down the road quite slow compared to the other traffic there wasn’t a lot of traffic and they went just a mile or so and then we stopped and I said when we’re done I said you know you did a really good job but let me tell you the way you’re driving you made me nervous and everybody around you nervous because you weren’t in control you weren’t confident we could see you getting close to the side and back and forth you’re weaving back and forth you should be making short little adjustments before you even get to that point up to the edge of the road well that’s the way a business you could look at a business when you’re new in your business you’re going to be like afraid you’re going to be unsure of yourselves and it’s noticeable it’s very noticeable when somebody’s not confident in their own business now on the contrary if somebody really demonstrates a high degree of confidence and they show they are confident that has influence with the bank and with your customers and with your suppliers and so it’s not something you can actually fake but it really is a factor that you need to look at you don’t want to look like a newbie in your business and so when you’re starting in business you’re going to be making little adjustments back and forth you’re going to be on the edge and you’re not sure of this and that and after a while you’re gonna hopefully settle down and not make those choppy little adjustments and you’re gonna look farther down the road and you’re going to look more intently in the process and you’re not going to be moved with a fear and and concern over one little loss of one little sale or one customer goes away or even a big customer goes away you’re gonna have a confidence in God that you know I can handle this without being shaking and fearful and and regretful that something happened and so we’re going to encourage you along that line now the terms that are many times shared with me is that I share is do you need to be able to work on your business and not in your business what do I mean well in my business setting behind me is parts made in machine shop I feel it fortunate that I cannot make one single part in this company I have no skills at all in making the part I actually have no skills at all in even measuring the part because that’s not my job and it’s kind of fortunate because if I had those skills I know my nature I would be in there trying to make the part or trying to measure the part if somebody was didn’t show up for work well I can do it no I can’t even do that so I’m by the nature of the way we structured this business I cannot actually work in my business I don’t know how I’m always working on it and there’s where the money’s made if you can move yourself off of the in at first you might be in it doing everything but if you can move yourself out of that into working on it here’s what you could do how can you look at your business you can look at your financial statements you would be surprised how few people look at and know how to read their financial statements to know whether or not they’re actually inside the guidelines of being profitable or not they’re not they’re already on the rumble strip and should have been woken up a long time ago because they’re going broke they’re going to be broke they just don’t know it they’re driving this thing into the ground and unless they make some significant changes quick they’re going to crash their business and be bankrupt well there’s things you can look at of course you’re going to look at your income on a monthly basis and then you’re going to look at your expenses on a monthly basis and you’re going to evaluate those and you’re going to see a track record a history of both of those you could graph them and on a chart you can start saying hey are we consistently going up in our income and are we holding our expenses down or lower or at least the ratio of your in spence’s to your income is that going down or stoical going going lower you see no matter what you do if you’re all you’re doing selling more and more and more but your expensing more money than you you’re bringing in you’re going to go broke I don’t care how big the business is you’re going broke unless you borrow some more money you use a credit card but at the end of the day you’re going to be broke you can look at things like not just the profit but of course that’s you’re probably in come- your expenses is your profit on a monthly basis but I don’t become too concerned on one month I look at a three month rolling average so in other words if it’s May June and July what’s the average of those and the next one let June July and August what’s the average of those so it doesn’t it gives me it mellows out these little like those little adjustments are taken out of the pictures I look also at the ratio of my what we call accounts receivable people that owe me money and haven’t paid me yet and those people that I owe that’s called accounts payable and I see where the ratio is what do I mean rent ratio if I see and I’m just using round figures just to be simple if people owe me $100,000 and it’s current it’s like they’re not past due and I owe people $33,000 then I have 3 times 3 times 33 is $100,000 so I have a quick ratio of 3 that means I have 3 times more money coming in than I oh that’s a good place to be in because you’re you’re kind of serving as the bank but you have more money coming in going than going out but if you should happen to look at that and you realize golly everybody’s been paying me cash I’ve got all I know buddy really owes me let’s turn it around that they only owe me $50,000 but I owe other people 75,000 where am I going to come up with the money you’re upside down that quick ratio is terrible in other words it’s negative and so in my case I always like to be 2 times 2 3 times of what people owe me compared to what I owe I like to pay my bills in 30 days but I haven’t always paid in 30 days that’s acceptable in my business but when it gets to 60 days that’s not acceptable if I can’t work on my business and make sure whatever I need to do to pay all of my bills within 60 days preferably 45 and many times on 30 days in other words they send me the bill and it’s 30 days later I process it and send it back in my business that’s a good time period to send back the money on paying my bills I would never be late for my payroll I can’t trust my workers to come to work on a daily basis and then on Friday when they will get a paid say guys I really don’t have money to pay you could you wait till Monday you talk about being a negative effect of attitude in your company that’s not gonna work but I’ve known of come especially people around the world that sometimes I was told in one country in Eastern Europe that they hadn’t been paid for like six months how in the world could they get away with that well it’s because there was no other job that so these individuals were well willing to work not getting paid hoping that they might get paid in six months because if they quit it would be embarrassing I don’t have a job I have no other hopes of a job and so they would go ahead and do that that doesn’t work in America we have to pay our payroll on time there’s other things about really being a part of the continual improvement am i driving with new inventions new new ideas am i doing a little bit of research we just added a robot well a robot is a new thing that I had to become convinced it was worth the investment so I’m working on my business never to do away with my workers but to make sure that I’m current and aboveboard again I don’t have any ability to measure a measuring device but there’s expensive instruments called CMM coordinate measuring machines ice the last one I purchased was a hundred and seventeen thousand dollars in order to have the quality equipment to measure the parts at a standard that was far above or acceptable and above my customers those are working on the business now I have to be in sales so that is my part and so I’m always working on a new sale a new customer once we have a new customer I don’t get in the middle of it unless they want me to get in because my production and quality department should take care of that and my buyers and my estimators should take care of that but I’m always in touch with my customer I’m a salesperson with relationships but so in that regard I am are in in the business but it’s from a view that doesn’t have me bogged down actually trying to make a part thanks for being a part of Inspiring Better Business