Intro: Broadcasting live from the Business RadioX studios in Houston, Texas. It’s time for Houston Business Radio. Now, here’s your host.

Trisha Stetzel: Hello, Houston. Trisha Stetzel here bringing you another episode of Houston Business Radio. Today’s guest is Aaron Trahan, founder of Performance Mindset and a seasoned executive with more than 20 years of leadership experience in both corporate and startup environments. By the age of 30, Aaron was leading $1 billion publicly traded company, a role that gave him deep insight into what drives growth and what derails it. Today, he works with leaders and organizations to to achieve sustainable, profitable growth by breaking the chaos cycle and creating systems of clarity, focus and accountability. Aaron’s mission is to help leaders get better at getting better and build businesses that scale the right way. Aaron, welcome to the show.

Aaron Trahan: Hi Trisha, thank you so much for having me excited for this conversation.

Trisha Stetzel: Yeah. Me too. And for those of you who are not watching on video, you need to jump over to the YouTube channel because Aaron has this most beautiful Winnie in the background. And I’m not going to tell you what it is. So you guys just have to jump on and see.

Aaron Trahan: It’s it’s always good to have a cute, uh, cute, fluffy business partner, you know?

Trisha Stetzel: Yeah, absolutely. All right, Aaron, tell us a little bit more about who you are.

Aaron Trahan: Yeah. You know, I am someone who really, from an early age, just gravitated towards this big, bold concept of continuous improvement. Um, I was kind of just a nerd of business books from a very early age. I started watching CNBC to just learn about what all this stuff means. Someone asked me is like, do you even know what showing up on that thing running across the bottom? And I just remember saying, not entirely, but I’m I’m learning, right? And so it just this concept of growth and continuous improvement. And before I even really knew what the concept of scaling really was about, that’s it was just kind of a gravitational pull for me, and not only on an individual level of just trying to understand how can I be a better leader, how can I lead teams more effectively, but also then how that translated to an organizational level and really just finding myself, um, you know, positively obsessed with what is it that allows Those leaders and organizations to find the next level to keep growing over a long time. But more importantly, what is it that prevents them from doing that? Why do leaders burn out once great high growth organizations, you know, either become a non growth organization or fail outright? And so, um, that was kind of the invisible journey that I was on that eventually led me to, um, you know, being a seasoned executive operator to now finding myself on the other side of the table, serving those leaders, operators and businesses of trying to avoid the same mistakes that I made, being able to access all the lessons and key insights without having to acquire the same scars that I had to acquire.

Trisha Stetzel: Um, I love that. Not that you have all the scars, but that you’re able to bring all of your expertise, your knowledge and experience to others that you serve. Now that’s amazing. All right. Names always have a meaning. And I want to dive into performance mindset which is your business. So talk to me one about the name of your business. And then let’s take a little deeper dive into the services that you provide.

Aaron Trahan: Sure. Yeah. It’s, uh, it’s probably one of the most frequently asked questions that I get is performance mindset kind of what? Tell me more about that. And, you know, kind of going back to the past 20 years that I’ve had in and around all sorts of businesses, of all sorts of shapes and sizes. You know, I think the great work that Carol Dweck did at Stanford University of really bringing the concept of a fixed mindset and a growth mindset to the mainstream, I think was was pretty valuable for all of us. But I think as I started to understand the nuances there, I started to realize that, you know, when we think about that in terms of the application to business, I just found a different story kind of playing out. In reality, nobody is going to admit to having a fixed mindset first and for all. And so every room that I was speaking to, every team I was a part of, whenever I would ask the question and really explain what a growth mindset is all about, every hand in the room is going to go up and say, yep, that’s me. I’ve got to fix our growth mindset. That’s what I’m all about. And so then I started back to that curiosity of what makes people grow, leaders evolve, and what prevents leadership growth. I started scratching my head of saying, well, if everyone has a growth mindset, why are we having these wild variabilities in performance and outcomes and results? And what I realized was there’s kind of a next level to it with a growth mindset, that thinking and believing that nothing’s fixed, you can develop and grow and build intelligence and capabilities.

Aaron Trahan: That’s great. But what I was starting to understand was thinking and believing can only take you so far. It’s missing a key ingredient and it’s the willing to take action. So when I kind of think about what shows up a lot in the business world, it’s much more nuanced than just fixed versus growth mindset. I think it’s really kind of a status quo mindset of people getting comfortable with where kind of they are, and things are good enough, so to speak. But then this other group has the performance mindset, which is just the bias to action to continuously improve. They’re not looking in the rear view mirror, kind of hanging their hat on what has already been achieved, or look at what we’ve done. It’s always asking the question how do we further improve? How do we continuously get better? Where can there be areas to take it up a notch? Where am I not operating either at an individual or an organizational level at anywhere close to our full potential? So for me, it really became this status quo mindset. Are we comfortable with where things are and we’re just kind of playing the status quo game. Then it becomes the the performance mindset. Are we willing to take the action and do what’s required to truly see better performance and better results? And so for me, that’s what that was kind of the narrative that I was seeing play out in the arena of business. It’s not as simple as fixed versus growth. It’s much more about status quo versus that bias for action to do what’s required to get better performance.

Trisha Stetzel: Okay, so how do we get from status quo or just this growth mindset where we’re just sitting still to performance.

Aaron Trahan: Yeah, I think it it is all around first generating awareness, right. For for everything that I do, it all really starts there. And I love kind of the saying that says a weakness or a development area that you’re not aware of will never be strengthened. Right. And so much around that status quo thinking is really that belief that, you know, good enough is always going to, at some point lead to complacency. And when you’re complacent, you’re not going to be intentionally driving awareness around where the gaps are. And look for high performers. Gaps may not be underperformance. The gap we are really focused on is where you’re performing versus where, you know you can potentially be performing. So it’s kind of it’s a you versus you. It’s am I better tomorrow than I was yesterday? And do we understand and put the awareness on where the gaps are that if we took action to evolve, develop, build the capabilities will get us closer to that full potential that makes us 1% better every day. That drives the continuous improvement. And that’s not always a comfortable place to be in. Always looking for how to develop. What more can I do? What more am I capable of? It requires it just requires a different intention to build the awareness, to learn where to act, to generate a better outcome. And if you’re in the comfort zone of the status quo, that’s just going to be an area that is, you know, never going to be found in that zone.

Trisha Stetzel: Yeah, absolutely. So what are your thoughts around doing it alone versus surrounding yourself with the right people.

Aaron Trahan: Oh, I, um, I’m just a big believer that you can only go so far alone. Um, you know, I’ve I’ve been the beneficiary of having a lot of great mentors, a lot of great coaching. Um, whenever I realized that I personally needed to leave that one zone of comfort and status quo thinking into a performance mindset, I needed a third party. I needed a coach to help me see what I wasn’t seeing. I needed someone to not only help me identify that there are corners coming up, but then to be able to have, you know, develop some insights, um, to proactively maybe understand and see what’s around those corners. And yeah, I think if the only, only voice of accountability that you’re kind of listening to, uh, is that voice inside your own head, I, uh, I think it’s going to be tough to really tap into the full potential that I think is there for, uh, all leaders and organizations. So I’m a big believer, um, that with others is a accelerated path to ultimately getting you to your destination.

Trisha Stetzel: Yeah, absolutely. And by the way, you need to check who’s in your room, too, right? Because we want to surround ourselves, like Aaron and I, uh, have the same kind of very uplifting, above the line energy, and we wouldn’t want to hang around. I hope I don’t want to speak for you, but I don’t want to hang around with people who have negative energy. I want them to have more energy than me and more passion. Uh, yeah. So that I can strive to be there, I love that. So let’s take this from growth mindset to sustainable growth. So can we unpack why the how of growth matters more than the how fast?

Aaron Trahan: Yes, absolutely. And it’s such a great time period of the year to have this conversation, because I believe Inc. magazine just recently released their updated list of what’s referred to as the Inc. 5000, which is the 5000 fastest growing private companies in America. And as you can imagine, every small and medium sized business would love to be on this list. What better marketing for you to put on your website or in a promotional blast of saying we are an Inc. 5000 company? Now, what’s interesting about this to kind of start this part of the conversation is fast. Growth is good, but it should not be the only thing you’re optimizing for, because follow up studies from this great list of the fastest growing companies has found a troublesome kind of where are they now? Um, you know, story that’s unfolded. And what the data shows is that 68% of companies that make the Inc. 5000 list remember the fastest growing companies in America over the next 5 to 8 years, 68%. More than two thirds of these companies either fail outright or are no longer a growth company, and they’re a significantly smaller size. And I think that just really puts an exclamation point on sustainable growth, growth that you can continue to maintain and work to compound over a long period of time is always going to be a better option than just rapid expansion.

Aaron Trahan: Back to having great mentors and someone sharing wisdom with you. I had to learn this the hard way, so I’ve got very intimate, first hand experience of all the chaos that emerges when you grow too fast. So luckily, I had a mentor on my board who pulled me aside after a not so pleasant board meeting to remind me never grow faster than you and your team’s ability to manage it. And that was always a stark reminder for me. It’s that if growth starts to outpace your ability to execute your team’s ability to manage it, chaos starts to ensue. Um, look, the graveyard is full of companies that grew too quickly, were not able to implement the systems and the structure to be able to support it and maintain it. And unfortunately, far too many businesses die by a result of collapsing under the weight of their growing pains, not from competition. Um, and so I think it’s just an important reminder that growing the right way, your ability to make sure you can manage it, the ability to generate operating leverage, um, allowing the growth to compound over longer periods of time is always going to be far more important than trying to just increase the top line by all costs as fast as possible.

Trisha Stetzel: Mhm. Yeah. That’s such a great point Aaron. And I know people are already wanting to connect with you to learn more or even just to pick your brain. If you let people do that maybe you do every once in a while. What is the best way for the listeners to connect with you? Aaron.

Aaron Trahan: Yeah, the two places I show up, most, uh, one’s going to be on LinkedIn. I would highly encourage anyone to connect, reach out. I’m always trying to share, um, the things that I’ve learned along the way and continue to learn. I’m pretty transparent with my community there of. Look, learn from my lesson. Avoid my scars. Uh, and then for a more in-depth review, my website would be the best place to go to really understand how I help executives and organizations. And that’s simply performance mindset coaching. Dot CEO uh, so those will be the two places that you’re going to be able to get access to me as quickly as possible.

Trisha Stetzel: Fantastic. And if you’re trying to connect with Aaron on LinkedIn, you can find him at r r o t r a h a n. And it’s actually Aaron Trahan. Coaching is the handle for LinkedIn if you guys are looking for him there. Okay I heard you say chaos cycle. I think we probably have an idea of what it is you described, what it is. But if we find ourselves in that chaos cycle, how do we break free from it?

Aaron Trahan: Yeah, yeah. So I think it it really comes down to one important thing. And if I could back up for a second, I think for a lot of business owners, founders, leaders, you know, it almost kind of feels like chaos is just kind of part of the game, right? It’s just if you’re in a growing business, there’s going to be some chaos that comes along with that. And I think while that’s true, I think there’s there’s different flavors of chaos to look for sure. When an organization stretching and growing and we’re reaching new heights, there’s going to be that healthy chaos that comes with stretch. But what to look out for is when the chaos really starts to hold the organization back. When you start to feel like there’s bottlenecks everywhere, you’re playing whack a mole. Your days feel much more like a, um, a day long firefight than actually doing things that are productive, that can drive the business forward. So to more directly answer your question, it all comes down to prioritization. And here’s what I’ve seen in businesses that have been a part of businesses that I help and just businesses that I’m observing is there tends to be a chaos cycle that ensues when some of the negative flavor of chaos shows up. And by the way, I’m a firm believer that when you’re experiencing that chaos in the business, that’s nothing more than the business’s way of screaming out to you that it needs better structure and needs better systems.

Aaron Trahan: That’s that’s just think about that as the language at which your, your business is communicating to you. But where the cycle starts is really going to be around your ability to properly manage prioritizations or the inability that shows up as priority mismanagement. And here’s what I see so much Uch when priorities start to be mismanaged. That could be in the form of your team feeling like priorities or switching every single week, or everything’s a priority. You know, when a business has 20 different priorities. Whether your employees say it to you or not, what they are talking about is we don’t know what the hell to focus on, right? And so priority mismanagement will always drive the next stage of the cycle, which is fragmented. Organizational focus. Focus for any business in any industry is a superpower. Period. Full stop. So when you think about the priorities at which the top level of an organization’s driving down to the team, when that’s not clear, when there’s too many, when they’re constantly changing the focus, that superpower of your organization is never going to be in the right dosage, in the right spot. So it’s going to be fragmented. It’s everywhere. So what happens when priority mismanagement leads to a lack of organizational focus? Results suffer. You see it in weak execution. You’re missing expectations. You thought sales would be here. They come in way short. We’re scrambling to figure out why. And so what do leadership teams do after this third stage? Priorities.

Aaron Trahan: Priorities were mismanaged. There’s not enough focus in the right area. Results start to show up. Weaker than expected. We need new priorities. We need a new initiative. We we need a new growth strategy to kind of get things back on track. Which then takes us back to the very top of the cycle. And you’ve now created the vicious loop. Too many or constantly changing priorities, fragmenting focus even more on, on and on through the cycle. And so to stop the cycle, to get out of the chaos cycle really comes down to a business’s ability to prioritize. And I like to think about it in terms of a question. If I was to randomly show up to your team leadership or management manager meeting, and if I was to go into the room unannounced and secretly ask everyone the same question, what are the top 2 or 3 priorities for the business, and why are these the priorities for the business right now? What would happen? Would everybody say the same thing? Would everybody say something different? So to break the chaos cycle, you have to have that team saying something similar to each other, because when they’re saying things different about the downstream chaos that that creates in an organization, everybody thinks the priority is different, which means their focus is behind something and nothing may come back and align to what is truly most important for the organization.

Trisha Stetzel: Yes, yes and yes and yes. All of these things resonate with me so deeply. Erin, thank you for taking us down that path. So does this play into that business GPS system that you talk about? Yeah. So can we dive into that a little bit 100%.

Aaron Trahan: And that’s why as I kind of in my the seat that I sit in today, kind of helping leadership teams and organizations avoid the same mistakes that I unfortunately made. You know, the past decade for me has kind of been a reverse engineering of what were the what were the tools that I was lacking, what were the frameworks and the systems that if I would have used, I could have avoided the mistakes, missteps and failures that that showed up on on my path that I had to course correct on. And yeah, because prioritization that I found is so critically important. I kind of like to think of it in terms of a business GPS. So if we were to pull out our phones and pull out whatever your maps app of choice is Apple Maps, Google Maps, whatever it is, remember, these companies that built these apps have spent billions of dollars to make it useful for us consumers. But it requires us to enter a critical data point for it to work. We need a clear destination. And if we don’t have a clear destination, that billions of dollars poured into this app will never work for us. So I’m sitting here talking to you today from Austin, Texas, right. And look, if we were to just type in central Texas into Google Maps, it’ll give us a million different options to choose from. Even if you, you know, you went into Southwest Austin. Okay, we maybe have thousands now, right? But until you get a specific location or address, that’s the only way you’re going to get an optimized route to take you from where you currently are to where you want to end up.

Aaron Trahan: I take businesses through that. Same thing is, where do we want to be over not too far out in the future because then it starts to lose its teeth. Not too short in time because we need some ability to kind of think out and plan. So I found two years to kind of be the sweet spot. So where I love to start working with businesses is really getting their teams firm on what’s our two year destination, kind of call it the vision. Within the vision, where do we want to end up? And I, I serve as kind of the challenger in the room to say, bring it down to abstract to conceptual, being the best or world class like that we can operationalize around that. How do we quantify what that looks like? How do we plug in my address in Austin and not just Central Texas or the greater Austin area. And then from there, we just didn’t execute a very streamlined, working backwards experiment. If we get the team very, very focused and aligned on what our two year vision looks like, where we want to end up, then knowing where we need to be at 12 months, knowing where we need to be at six months, knowing what’s most important over the next three months starts to get very clear and very simple. And now the prioritization of what we’re going to prioritize and what we’re not has the necessary guardrails for us to easily determine priorities from priorities. But most importantly, it helps an organization say no way more often than they are today. And as.

Trisha Stetzel: Oh my gosh.

Aaron Trahan: So.

Trisha Stetzel: I know.

Aaron Trahan: You said.

Speaker4: Yeah, Go ahead.

Aaron Trahan: Yeah. Is Warren Buffett’s always said the difference between highly, highly successful people and average people is the highly successful people say no to virtually almost everything. And it’s because the priority scope is so defined. We know what we’re going to say yes to. That fits within that scope. Everything outside of it is a no or not yet.

Trisha Stetzel: Mhm. I love this. So you just took us on this beautiful journey. Aaron thank you so much for this amazing conversation. I’ve got one last ask. Tell me your favorite client story.

Aaron Trahan: Hmm. My favorite client story is the one that’s top of mind. Was the call that I was actually just on. Um, okay. This is this was a client that was in the physical therapy space and also did some longevity, uh, strength training of really helping people coming in for physical therapy and a part of the country where people are very active, um, and have a huge interest in staying active for longer. But as you can imagine, someone running a big physical therapy operation and another business, the challenge was I can’t get out of the business. I kind of feel like so much depends on me. I’m the bottleneck. I’m reactive and firefighting all day long. And, you know, I’m not sure I want to keep doing this. Right. It’s like I’m working harder. Only for poor results on the bottom line. And so taking this client in his business through these different types of tools, we were able to get very clear on where we wanted to be. We were able to get very clear on what matters most. And we were able to then start prioritizing what needs to come off his plate, what needs to go on to different plates, how do we streamline the organization? Where where are the areas that’s really holding the business back? Um, and as you can imagine, the work that we’ve been doing over the past couple years where literally the call that I was just on before this call, a lot of the conversation was talked about how great the team is doing, how he’s got a team of individuals now operating like owners.

Aaron Trahan: He’s able to be 95% strategic, 5% tactical. Two years ago, it was the exact opposite. He was 95% reactive, 5% strategic margins have expanded in the business top lines expanding in the business. And he’s putting in fewer hours than he ever thought was possible in a growing, optimized business. And so it was just one of those feel good calls of seeing seeing someone be able to create the business that they dreamed of, for it to perform the way that he envisioned it performing without him having to be the bottleneck in every single step of the way.

Trisha Stetzel: Mm, I love that. So something simple, if you’re in your business and you can’t take vacation because you’re so embedded in it, you need to talk to Aaron. I’m just saying.

Aaron Trahan: It’s it’s kind of, uh. It’s nothing more than helping build the bridge, right? I think every business kind of has three islands, right? Vision, strategy and execution. And so few times I’ve seen are those islands connected with a clear bridge? That’s all we did in this case is we took the vision of what he wanted. We created a strategy that would make that vision tangible and put in the mechanisms to drive day in, day out, week in, week out execution to generate week over week progress. And so his three islands now have very tight, very solid, very well built bridges connecting those three islands.

Speaker5: Wow. That’s beautiful.

Trisha Stetzel: Thank you so much for this conversation today, I felt like I went on a journey and maybe even thought about vacation for a minute. We’re growth mindset. Oh no performance mindset. This was fantastic. Aaron, thank you so much for your time today.

Aaron Trahan: Yeah. Thank you for having me.

Trisha Stetzel: That’s all the time we have for today, guys. So if you found this conversation with Aaron valuable, please share it with a fellow entrepreneur, a veteran or a Houston business leader. Ready to grow. Be sure to follow, rate, and review the show and helps us reach more bold business minds just like yours and your business, your leadership and your legacy are built one intentional step at a time. So stay inspired, stay focused, and keep building the business and the life you deserve.

Intro: Broadcasting live from the Business RadioX studios in Houston, Texas. It’s time for Houston Business Radio. Now, here’s your host.

Trisha Stetzel: Hello, Houston. Trisha Stetzel here bringing you another episode of Business Houston Business Radio. My guest today is Manny. Right.

Manny Skevofilax : Right.

Trisha Stetzel: Yeah. I see I’m getting really good at this. Manny. He is the principal of portal CFO consulting. Since 2003, Manny has been helping business owners maximize their profits, overcome growth challenges, and achieve financial freedom. An expert in strategic planning, financial statement analysis and business operations, he brings a clear, practical approach to scaling businesses the smart way. He’s also a speaker and author who shares insights on everything from bootstrapping versus finding investors to growing with less debt, not more. Manny’s mission is simple help business leaders build growth that’s both profitable and sustainable. Manny, welcome to the show.

Manny Skevofilax : Tricia, thank you for having me.

Trisha Stetzel: I’m so excited that you’re here today. I know it’s been a while since we had our last conversation, so I can’t wait to dive into this. First, you have to tell us a little bit more about Manny.

Manny Skevofilax : Sure. Um, you know, my parents were born in Greece, so they immigrated here after World War two and found their way into the restaurant business. So my siblings and I grew up in the in the restaurant business, and it was a great training ground. And I really didn’t have any, um, desire to do anything else. I figured that was it, but I ended up changing my mind. I made a career change, um, based on the advice of one of my advisors at school, and I worked as a corporate banker for ten years, learned how to lend money, including five years in beautiful Dallas, Texas. And then, um, I decided I wanted to do something on my own. So I moved back to Baltimore, where I’m from, and I hung a shingle out as a outsourced chief financial officer. And I’ve been helping business owners for the last 22 years.

Trisha Stetzel: Okay, so let’s talk about that outsourced CFO. So thank you for telling us it is Chief Financial Officer. So what exactly is outsourced? Cfo.

Manny Skevofilax : So there’s been a trend, let’s say, over the past 20 plus years of, um, retaining professionals, but only for the amount of time you need them as opposed to having a full time hire. So in my case, um, I work as a chief financial officer. So I’m focused on the finance, um, and business side of things. There’s also outsourced marketing people. So if you can’t afford to hire a full time, uh, CFO, you would be able to hire one part time so that that brought in this industry. Um, these days, they, they refer to it as like, fractional executives. Although I’m not a big fan of the word, you know, to each his own. I prefer outsourced, so.

Trisha Stetzel: Okay. Gotcha. I like that. And, you know, being able to bring this big business knowledge to smaller businesses because you’re able to split your time between these entrepreneurs and still do the work that you do. So tell us more about what a CFO actually does. So there may be some listeners, Manny, that don’t really understand the difference between a bookkeeper, a CPA, and someone who does CFO work.

Manny Skevofilax : Okay, well, let’s start with that. So one of my clients many years ago came up with this. What I’m about to say, he said that a your bookkeeper is looking at the rear view, looking at the back of the car. So everybody’s in the car. So the bookkeeper is looking in the back of the car, the controller is trying to drive the car, and then the CFO is looking out the windshield to navigate where you’re going. Which I thought was a really interesting and kind of nice and simple way to explain it, because I like to do things simply. So your bookkeeper is in charge of making sure that your accounting books are clean. Um, your controller is more advanced. Um, and then your CFO has a completely different skill set. We were taught to analyze financial statements, which is called financial statement analysis. And that’s what I learned in school. And then practically in the bank. And it’s always fascinated me, Tricia, because the financial statement itself is the same for everybody income statement, balance sheet, statement of cash flows. But it tells a different story for each business. It’s the most amazing thing. So my job is not to do the books so I stay in my lane. My job is to analyze the performance of your business, which in my case, I prioritize margins. You know, your gross profit margin and your net as you’re growing. And I help to provide you with timely and accurate information to help you in your decision making. Okay.

Trisha Stetzel: And providing a lot of strategy like looking forward, right. And helping your clients really know where they’re going. Are they on the right path and how are they going to get there? And I love that. Um, I know you do. A lot of you have done a lot of work, um, in this financial space. So when we I know that entrepreneurs really wrestle with the decision to bootstrap, like, I’m just going to strap on my boots, I’m going to go figure it out. I’m going to take the $10 that I have in the bank and go open this business. Right. Uh, or they may seek outside advisors. So how does an entrepreneur decide from your perspective which path might be right for them?

Manny Skevofilax : That’s a great question. You know, it’s different for everybody. Everybody that’s starting out as an entrepreneur, in my experience, some people might have more savings than others or more access to capital. In my case, I didn’t because my parents came here from a foreign country. And, you know, we come from modest means, so we it was very difficult to survive, you know, to pay your, you know, your rent and your food and stuff like that and save money. Right. We’re all under the same constraint. So some people have maybe they have more savings. It might be a little bit easier for them. But over time, what I found was bootstrapping was really the way to go. Because if you’re not careful, it’s in America. It’s easy to take on debt, right? We have this system that does not exist in other countries. Something else that I was taught. And you got to be really careful. And when you’re in the early stages of your business, if you take on too much debt, you might cause yourself to go out of business. Whereas you have less of a likelihood of doing that if you’re just retaining some of the profit and using that as your capital to grow. Okay.

Trisha Stetzel: So let’s dive into that a little bit more. Um, profit being profitable or growing your profit isn’t just about sales volume. What are the three aspects of sales you emphasize when you’re teaching owners how to grow profitably?

Manny Skevofilax : Yeah. So this is something that that has been subject to a great deal of spirited debates, you know, in my life. I first of all, you got to have sales, right? You have to have a solid sales function, and you’ve got to be bringing in the right sales, which the right sales mean they’re at a certain gross profit margin, which we will calculate. Trisha’s business might need a sale to be at a 60% gross profit margin. Manny’s business might require 30%. But what I found was there’s only three ways to grow your sales. So one of them would be more active customers actually buying your goods and services so more customers. The second way would be those active customers. Instead of buying from Tricia once a year, they buy from you more frequently, maybe 2 or 3 times a year. And then the third one was those active customers spending more in each transaction. So that’s what I found. And everything else, in my experience, is just a subset of those three things, right.

Trisha Stetzel: I, I love how you can break things down. So simply, Manny, uh, I find that many business owners, particularly those that are entrepreneurs, they got into business because they’re really good at something or they really enjoy or love something, are afraid of the numbers. They bury their head in the sand. They don’t want to know. As long as there’s money in the bank, they feel okay. So talk to me about the importance of really having somebody like you in their corner who can help them strategize, really, really dig in and know that their business is healthy and strategize on building a bigger business.

Manny Skevofilax : So so I’m I’m your navigator. I’m looking out the window and you’re the captain. So you’ve got all kinds of things going on, right? Um, sales. You’re probably the, you know, the most important sales person in your business. You’ve got to worry about employees. You’ve got to worry about overhead. Uh, how can you possibly focus on everything? And then, as you said, you’re just kind of like glancing at the bank account, going, hey, we got enough money, you know, to make payroll. We’re good. So I help you try to see the future, which is funny because I tell my clients, are you going to force me to get my crystal ball out? And what do you think I see when I look in my crystal ball and they’re like, what? I’m like, I see the reflection of my face looking back at me because I don’t. I don’t know any any better than you. What’s going to happen in the future? All I can do is prepare you. So I’m saying, okay, Tricia, you’re trying to grow 10% this year, which is going to be X amount of money. You’re going to need some more employees, which is going to cost this much. You’re going to need some computers. And I’m doing all this these calculations sharing them with you so you understand what you’re getting into, making sure you have enough money to support this growth. And then I monitor it as we go. And then every month we have a review meeting where we review the financial results together for an hour. Because I like to do everything very simply. And that gives you an opportunity for you and me to ask questions, you know. Hey, you had a great month. Your margin was better than the last month. Why? Or maybe it wasn’t as good. We want to know why didn’t we hit the margin target? Did we not communicate something correctly to our salespeople? Or you know what? Our expenses are ticking up this month. Why? And we just go through that exercise, and you therefore leave with the confidence that you’re on track to hit your goals.

Trisha Stetzel: And how nice is it to have an accountability partner like Manny to say, all right, every month we’re going to make sure that we’re looking at these things and what our plan is moving forward. Love that. So, Manny, I know that there are people already curious to learn more or want to connect with you. What is the best way to connect with you?

Manny Skevofilax : Sure, it would be my website, Tricia, which is portal CFO. I’ll spell it out real quick. It’s p o r a l c o.

Trisha Stetzel: Okay, perfect. And if you guys are looking for Manny, it’s m a n n y. His last name is s k e v o f I l a x. And it’s said just like it’s spelled, which I love. Manny. It’s not hard. All right, so back to, um, let’s take a circle back to profit, because I know that’s something that you talk a lot about and being profitable. And how are you actually profitable? I know there’s three mistakes, uh, often that are, um, business owners are making when we’re talking about profit. So what are these three growth mistakes that our business owners are making, and how can they avoid falling into these traps?

Manny Skevofilax : Sure. So, you know, in my experience, Tricia. The number one mistake is trying to grow too fast. So you have to ask yourself, what is a reasonable rate of growth for my business? So for Manny, it might be 10%, but for Tricia’s business, it might be 30% in a year we’re talking about. So a lot of times, business owners place unreasonable growth goals on themselves, and they don’t fully understand the stress that it’s going to put on not only them, but also in their team members. Right. And the stress that it’s going to put on your cash flow if you don’t have enough cash to support that, trying to double the size of my company in a year, that would be number one. The second one, which is one of my favorites. I’m getting better at it, but I still suffer from it. It’s shiny. New toy syndrome. Alright, so we just sat down, you and I, we did some planning for your business for the quarter. You’re like, okay, because I like to chop it up right in quarters. It’s a year. Let’s see what we’re going to do this quarter. So we just get finished. You’re feeling good, Tricia. You’re. Leave the meeting. You’re on your way. 45 days in. Everything’s going swimmingly. And then something happens to just cross your field of view, and you’re like, wow.

Manny Skevofilax : And it’s a shiny new toy, and it distracts you. And it takes your focus away from the plan that you just spent all this time working on and that you’re halfway through executing. So like I said, I’m not I’m still suffering from it, although I have improved over the years. Okay. And I like to throw a caveat if you if you made a plan for the quarter. And it’s not working. If it’s leading you to lose money, then by all means, change it. You know, don’t get stuck on it. Okay, so that would be number two. And then number three I think would be not checking in on the on the on the goals like I shared with you that I meet every month which with each one of my clients to do a financial review just the same way your banker does or your investor. It’s the same thing. And I learned that in the bank and business owners are so busy, they they don’t they don’t have time to stop. They usually don’t want to anyway. And by not stopping for an hour once a month to review your performance, you know it could lead to some negative trends building. And before you know it, it might lead to a cash crunch. So those would be the big three in my experience.

Trisha Stetzel: Okay. Well, and again, I love how simply put or how you’re able to take this complicated financial language and bring it down to the level of those of us who don’t speak financial language.

Manny Skevofilax : I’ve worked.

Trisha Stetzel: Hard. All right. Yeah, exactly. So you’re the translator, Manny, I love that. Um, I’d like to, if it’s okay. Just talk about Manny for a minute so I know that you’re an author. Would you like to talk about the book that you authored, please?

Manny Skevofilax : I got lucky. You know, I, I always wanted to write a book about all the lessons that I’ve learned in business because I’ve had a lot of great teachers and mentors, and I was fully prepared to self publish. But, you know, my mentor told me to submit to some publishers and I’ll be darned if they didn’t accept it. So I was able to write ultimate profit management, maximizing profitability as you grow your business. It is not a textbook. It’s a fun read because I didn’t want to do anything boring. Finance is boring enough, right? So I, I wrote in there, Tricia. What what I learned, you know, when when should I hire? When can I get more office space? How should I do these things? Because I found that the tortoise kept on winning the race in business. Why does this one business that’s going slow and steady remain successful, able to take care of its employees? You know, the owners are taking care of their family. They’re making charitable donations to their community. And then why is the fast growth one taking all this debt on, growing fast and then ultimately failing? So that’s what really the prompt was to share with with the world that, by the way, bootstrapping is like the number one way to grow a business, especially in America. So I share all the nuggets that I was taught are put in this book in a fun way.

Trisha Stetzel: Beautiful. So, Manny, if people are interested in grabbing your book, where might they find it?

Manny Skevofilax : Yeah, they can find it at Amazon. Ultimate profit management. Type that in or link is on my website.

Trisha Stetzel: Perfect. And by the way you guys, as usual, I will have all of the links for everything that Manny and I have talked about today in the show notes. So you can just point and click and get exactly where you want to go. Can’t wait to see that book. Manny, thank you for sharing that. Um, you talked about. Bootstrapping. We talked about outside. Outside. Money’s right if we want to go and, um, get our money from a bank. And the difference between that and bootstrapping is the direction that you would head, especially if you had the means to do that. Um, when business owners are really wanting to grow as fast as possible, I just got into business. They want to grow it from here to there in the first 18 to 24 months. How do you help them balance this ambition of growing quickly, but also health? Healthy, financially healthy, uh, and sustainably?

Manny Skevofilax : That’s a great question, Tricia. It’s difficult because entrepreneurs are ambitious people, right? That’s why they got into it. So interestingly enough, if you are in some kind of technology business Where you’re growing your business by signing up what we call eyeballs people on the internet, you might be able to really grow your business fast over 18 months or two years, as you stated, because it is a lot easier to find these potential clients and a lot easier to onboard them, as opposed to if you had a professional services business or manufacturing business. So I always want to throw that in there. If you if you have technology, you know, some kind of software as a service business, you probably have a good shot. And also the barriers the cost barriers are lower right. Barriers to entry. And you may your employees can work remotely. Right. So that there’s savings there. You might not need an office. But for everybody else. You have to be really careful because you have to analyze, like, what does it cost me? Let’s let’s take a contract or I love to use the contractor example. So the contractors, the plumbers, the HVAC folks, the electricians, they know exactly how much it costs to have one truck on the road. They’ve already done the math. You know, I need two electricians, a helper. I need this truck. It’s got to have this amount of inventory on it. They already know that. So intuitively, they know what it would take to get the second one on there on the road. So what is that? Is it 100 grand? Is it 200 grand? Do you have it in the bank? You know, how do we bridge the gap? Could you finance the truck and then maybe get a line of credit from a bank? If you’re under two years old, you’re probably not going to be able to get the line of credit from a bank because they want you to be at least a two year old business.

Manny Skevofilax : But you could probably Finance the the vehicle. So you have to do that calculation and say, what is it going to take me to get to the next truck on the road? And we we do that calculation very simply and come up with the number, and then we figure out how to finance it and if it’s doable, because that’s going to be your your biggest single constraint to meeting what you said that fast 18 to 2424 months growth. Yeah. On top of that we don’t want to lose money. So we’ve got bootstrapping. And then we have investors. Bootstrapping means you’re doing it all by yourself. And eventually you’re going to get to the point where you’re bankable because you do want to go to the bank because it’s your cheapest source of funding. Now, investor wise is a whole different story. You know where you got an idea and you want to take it. To some investors, that is difficult because you’re asking strangers to come into your house and people don’t sound sexy, but people don’t fully understand. The strangers are coming in and they want to be in control. And you’re probably not ready to give up control of your business yet. So it needs a little bit of careful evaluation. Okay.

Trisha Stetzel: And you need somebody like Manny on your side who can help you navigate all of these things. You know, you were talking about outside investors, and I got this, this feeling over me. Like they’re going to come in your house and ask you hard questions. It’s going to be really hard. Um, Manny, this has been such a great conversation. I have one last thing for you. As we’re starting to wrap up today, if you could leave the listeners with one piece of advice about growing their business profitably. And we’ve talked a little bit about this, but digging just a little bit deeper into a profitable business with less debt, what would it be?

Manny Skevofilax : Consistency and perseverance. Okay, those are the two biggest things. And then do not rush out to try to borrow money unless there’s a good reason for it. You know, try to be frugal. You know, use that sparingly early on if you need to buy a machine or a vehicle, it’s a little bit of a different story. But, you know, be consistent and show up every day and use the profits. Use a portion of the profits that you’re generating in your company. Don’t take it all out of the company and take it home and spend it. Leave a piece in there. Maybe if you can leave a third of your profits, you’re creating your own capital, funding your own growth, not owing anybody anything.

Trisha Stetzel: I love that, that’s amazing. All right, one last question. Tell us one lesson that really stands out from you in the book that you wrote. What’s one lesson you want to share?

Manny Skevofilax : Oh, gosh. This one is a tough one. But you know, in my opinion, hiring somebody that is not a good fit for the job and then leaving them there, and you don’t really know that you have crushed your culture and irritated everybody. So the higher slow and fire fast is you don’t know the negative impact that you create amongst the rest of your employees when you make a bad hire. You know, and you’re like, well, why is the finance guy, you know, talking to me about the quality of my hires? Because we can’t accomplish anything if we don’t have the human capital right to do it. That means the employees have to feel valued and appreciated, and we got to be really careful of the dynamic that we create or we’re not growing anything.

Trisha Stetzel: Mhm. And it costs you a lot of money and time to have the wrong people on your team for sure.

Manny Skevofilax : Well said, well said.

Trisha Stetzel: Yeah. Manny, thank you so much for joining me today. This has been so much fun. I love when I get to interact with financial people who are fun. And I think you’re fun, Manny.

Manny Skevofilax : I’m very flattered. Thank you. Tricia.

Trisha Stetzel: Thank you. So tell us one more time. What is the best way to connect with you, Manny?

Manny Skevofilax : Sure. On my website it is portal com, and there’s a bunch of blogs there. I’ve been blogging for a long time, so go in there. I got the web guys to put a search function in there. So search whatever topic you want, you know you want to learn about, and a few of them will pop up for you.

Trisha Stetzel: Beautiful. Thank you Manny. So many resources. Great conversation. You guys go out and grab his book as well. If you can’t remember the name of the book, you can just Google him as the author point and click. It’ll take you straight to where you can find his book on Amazon. Again, it has been my pleasure to host you.

Manny Skevofilax : My pleasure Tricia, I enjoyed it. Thank you very much for having me on your show.

Trisha Stetzel: All right, guys, that’s all the time we have for today. If you found value in this conversation, share it with a fellow entrepreneur, veteran or Houston leader ready to grow. And be sure to follow, rate, and review the show. It helps us reach more bold business minds just like yours and your business. Your leadership and your legacy are built one intentional step at a time. So stay inspired, stay focused, and keep building the business and the life you deserve.