A Look Under The Hood | Discovering the 5 Major Hidden Costs and Expenses That Business Owners Are Paying | Ep 6

Audio Transcription

Hidden Cost #1 – Shrinkage Due to Theft

FUN FACT – “The U.S. Chamber of Commerce estimates that 75% of employees steal from the workplace and that most do so repeatedly.” – Employee Theft: Are You Blind to It? – CBS News – Money Watch

Hidden Cost #2 – Loss Due to Errors

FUN FACT – “Only 13% of employees worldwide are engaged at work, according to Gallup’s new 142-country study on the State of the Global Workplace. In other words, about one in eight workers — roughly 180 million employees in the countries studied — are psychologically committed to their jobs and likely to be making positive contributions to their organizations.” – Gallup – http://news.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx

Hidden Cost #3 – Legal Bills

Hidden Cost #4 – Worker’s Compensation

Hidden Cost #5 – Employee Inefficiencies and Turn-Over

NOTABLE QUOTABLE – “If you can’t measure it, you can’t manage it.” W. Edwards Deming (An American engineer, statistician, professor, author, lecturer, and management consultant. Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. That work began in August 1950 at the Hakone Convention Center in Tokyo when Deming delivered a speech on what he called “Statistical Product Quality Administration”)

Thrive time show studios in the box that rocks it is Tulsa’s number one CPA in every way, it’s time to take a look under your financials with Paul huh. Asking me why. Business coach thrive nation good morning, good morning, welcome back to the look of the hood show with Paul Hood Tulsa’s number one CPA. I would even say the Region’s number one see if you and I don’t want to get up in the air into I like Des Moines. That’S where all the really good accountants are. You know you passed between Tulsa and Des Moines West Des Moines to say it right.

It’S Desi moon in December. In Des Moines, you need to turn the show off because really already got you got everyone. There’s people in Bartlesville, Tulsa Claremore. We need some weed with you guys when you guys are what your aunt is here in a vacuum where there’s only one CPA – who’s proactive, that’s Paul hood. So I encourage you to go to hoodcpas.com today, but again, if you’re listening in Minnetonka Minnesota, I don’t have a lot of podcast listeners up their turn. To show off, I mean just get up there and talk to any random guy born spin Leaf. Oleg a lot of Norwegian names are scared. Whovians up there go in there and get some rhubarb go in there and get some get to bratwurst and just just just say, hey just don’t even don’t even don’t even coach me through accounting you’re a business coach wizard. I know you have my best interest. I know you never miss a deduction you’re good, no, but we’re talking about hidden and often forgotten costs and the thing is they wouldn’t be often forgotten if your accountant, what do their job and bring them up. So I’m going to I’m going to ask you this then just a question is as an accountant when you sit down the business owner, what percentage of the time do they simply have forgotten costs, hidden costs everywhere that are just eating there in them alive?

That’s that’s easy that say it’s absolutely out of percent because they don’t know what they don’t know. They don’t know what to look for which is why they need a business coach. They don’t know how to quantify it, and I tell you this. I know it’s early in the morning on a weekend at the way you guys said the ones that you know. For some reason I want pasta right now, but I don’t understand some spaghetti or I have some. You have something to give me some meatballs, that I tell you what, if you’re listening right now in Des Moines, first off, you need to keep listening. I apologize. I said she got nothing going on. I mean there’s nothing going on at Iowa before I mean, but I won’t you do. Is you you? You go out to eat and then you come back from Chili’s or Applebee’s or whatever and you go. We got to go. We got to go back out, cuz. There’S nothing to do you should just listen to this show is, is your only form of entertainment., I’m glad they’re now getting the internet up there and Des Moines? I just turned it on last week outstanding: I got electricity and it was about to happen shrinkage due to theft shrinkage to business coach Steve your face for spiral. I text you, you are just because you’re still in my pants does not make it funny. Talk to me about this business is to lose a lot of revenue from Taft previous shows.

We talked about vasectomies, and now we have shrinkage going on. I don’t know: what’s going on, inventory, have any kind of inventory and that isn’t always just somebody putting some in their pocket and walking away. It could be time. You know you got employees that if they’re sitting there like they have work to do and you’re paying by the hour and they’re on the Facebook or, but I got a game request. How am I not those people Club right now? I ate some really disturbing statistics that I’m going to read off to you in a row all in a row and after you hear these stats, you’re, probably never going to be the same. You probably are going to say. I I no longer trust my fellow man. I might just move up to Des Moines and spend my time up there away from people but Steve before I get into my stats. You won’t businesses yep for a long time how common is theft or employees stealing company time? How common is that, like really common? I think probably I don’t know what the status I’ve heard it before, but it’s something like 75 % of employees. Do it some it and I think maybe some of them. Don’T you know they’re, not intentionally. You would say like stealing time. No Kevin argue with you. I’M coming in hot from the US chamber and CBS News: 75 % of employees who they were studied in the big box stores stole from the workplace and most it so repeatedly, 75 % seems like I’ve heard. I was right number, it’s a large now, the next. The next Little Bill Little People Like These statistics, but this is the deal the majority, the majority of the work day.

Okay, most most employees are serving is how do you waste time during the business coach workday Inc magazine in June of 2007, moved since 2007, the average employee who works at eight and a half hour day, waste 2.1 hours per day doing nothing, so that would mean that you Are paying people 25 % you’re paying them goes to nothing came out by Fox News that came out in 2008 that showed that nearly 25 % of the average Americans work day was wasted, yet another source showing it was wasted, so what’s happening at the workplace. Is that you are being robbed from your employees, would it be for the time or the actual tangible goods and services? And if you don’t have an accountant helping you figure out what your number should be? You have nothing to compare it against and you don’t know what it says. Example friend of mine, used to own a Subway sandwich in Cokato Minnesota and mr. Cleaver. If you listen to the story, I know you’re going to not like the way the story starts or ends, but the middle is really good. Hang out so it’s a Subway restaurant in my friend Joe got a job there and so Joey you come in you’re wearing your jersey.

You know where you’re wearing your your warm-ups for the basketball team and you’re wearing your warm-ups for whatever team you’re on and Joe. It say what are you guys here for it cuz you’re all dressed up, for you obviously have a game that day the whole team comes in and you’d say I’m here for the wrestling tournament or I’m here for the volleyball tournament or we’re here for you to Work with – and he goes on, the team – and you tell ya – is okay. Well, here’s the deal I’m going to give you the charger special. What’S the charge doesn’t have to pay anything, he would just give like 10 guys in a row, A6 inch sandwich and then put the actual team members like awesome. That is awesome you’re the man I’d love to who owns is Subway’s. All mr. Cleaver does how you tell him he’s the man I love mr. Cleaver. I love this Subway we’re coming back. So then the ball team comes in and got some attractive. Girls right! Hey! Are you on the volleyball team? Give you the charger special. I need free food away and then oh, my gosh, is that your girlfriend yeah sure to watch you play. Oh I’m going to give you the charger special, but he’s just giving away food that one day, I noticed that this was happening, and I said to Joey’s to Jill is a charger special, something that Mr Cleaver’s aware of any goes absolutely not, but I know he Would do it, I need these Keys into the community.

I mean it got used to be an athletic director. I know he would do he cares and I don’t think some of the margin on a Subway sandwich was I own, my own business that I’m a senior high school. I’M like, I know the origin of the saying, which is probably going to 10 % 20 %. That you actually don’t you work with, do you do the accounting for Subway sandwiches or some kind of a restaurant and yeah? We have a bunch of Subway as clients all over the state, so you know 15 % to 20 % margin on a sandwich in maybe maybe you’re clear in like two bucks. Maybe maybe this amounts of success. Everybody wins in that day, except for the owner. That is very common law is a hidden cost for businesses. I have one for you call. Yesterday I went to sometimes often frequent this place that I can get chai tea lattes, oh yeah. I go in there and working behind the the register there and then I order and she said she says: oh my gosh you’re going to try to eat and I’ll get you a small talk to you as well, but she said you know what, if you go Over there to that store down 3 miles down the road females going to buy your own chai tea in you will save a ton of money. That’s my tiny little I’ll give you as a person – and I was sitting there but who’s paying. Her check is at the store I’m buying from where the store she’s, referring to a small check. Did you wrap the conversation by saying seriously stand up when you’re talking to me or just sit there and just hang on hang on shrinkage we’re tight? I was at. I was a slam that was a slam on get off your knee. I did make it plural. I’M sorry get off your knee and show some respect, I’m looking at 3 American flags here, okay, we are the Box removing arm bushing on here. The next to the next Hidden Object. Forgotten cost is workers compensation. I think anybody is saving money setting aside money for workers compensation. I don’t think people understand that Workers Compensation Insurance is an actual cost and it’s big.

Let me tell you why it’s hidden at especially if you’re a proactive business and you have proactive advisors. Maybe you have a business coach in your business is blowing up here’s a real life example. I have a client that came to me at 4 and they’re not well they’re, going to be a client because of this very scenario. They haven’t a worker’s comp on it and come to find out there during the year their employee base has grown because their business is going well. Workers comp is estimated based on your prior year and so all of a sudden after his workers about it, he owes ,000 extra. That has happened to me this week. So love that you think you got all this money in the bank and then Here Comes Saxon, and so you know business owners. You got to know if you’re growing in your your employee base is growing. You need to set aside for some money for that extra workers. Comp number on Thursday Vanessa said: hey, you know, elephant the room where grown quite a bit of a yes, where things are going good yeah and we have a lot more people than we used to have it. I know this and we just got to workers comp update and we have to pay a lot of money. I’M going know I blocked out of my mind, and I went to a happy place where we can discuss small elf people who are having a good time. We can, I want Subway, we can talk about a lot of things and then now you took me out of that happy place and took me down to the right, the bottom of of life. So I thank you for that and we’re going to move on to the next idea. It would be bitter about it or not. Give me upset and I can sit and talk about it on live radio tear. Sorry. I said that the next the next move is lost due to errors, people screwing up all the time. Why do you have to have an account and help you figure out what the acceptable error rate is?

Well, you can come in many business coach forms and they can’t they can be come in as a result of a lawsuit. You know you can have an employee that makes mistake. You can have your account, as I tell you, the most common error that that we say that we have to fix is in the payroll area. Your accountant doesn’t file things on time or he doesn’t do this or you know, doesn’t pay or have you do your estimates on time and those errors? The IRS has a little thank-you note with a penalty notice on whatever they make a mistake, and they send you money back. They never put interest on it and whenever you make a mistake, they like to put in an interest, it’s kind of a fun give it. I wouldn’t argue with those guys just say yes, sir. Thank you, sir. Yes, but you want to have a proactive account help you minimize your taxation when I make sure that’s accurate when we come back we’re to talk more about discuss these hidden cost, these hidden cost. These forgotten cost that every business owner deals with, but I’ve got one call to action for you Tulsa, oh yes, you should be talking to people I’m talking to both of us. What you need to do is you need to go to hood CPAs.. What website should we go to? Is it would quit CPA? I’Ve never used a computer before OK, Google use your use your hand to put cbs.com go there and rest request a free copy of Warren Buffett’s book snowball. It is his only authorized biography. You can get it absolutely totally free and Paul’s going to do a one-hour free consultation with you, and I can tell you almost every time he meets with an entrepreneur business owner. He can save them thousands of dollars. He can save you thousands of dollars. You can get a free book and thousands of dollars of savings and it’s going to cost. You is take it one hour of your time going to hunt cbs.com. Have you ever found yourself running out of money before the end of the month? Are you saving enough for retirement? Are you getting ahead financially Tulsa? If you come to the right place, it’s a look under the hood with Tulsa’s number one CPA and every way yes to 10. Google Now doesn’t show. That is profound, and I am excited to take your accounting in to turn it from a noun into a verb.

What are we talking about? There should be some action involved here. There should be some action with your account and you can’t just do accounting where you say: that’s the thing I deal with once a year. That’S a bill. I get once a year, that’s a cost. I have one to your know that it’s been ongoing activity. It should be interactive, it should be an action, it should be helping you on Earth, the hidden costs that are in your business, so cost number one we discussed was basic employee theft, cost of R22 workers compensation cost of a two. Most business owners forget about his loss due to heirs lost, it airs that is next, one is employee and efficiencies, and turnovers and efficiencies in the scenario would be. You have an employee that should be making about a hundred calls per day in a call center, but you don’t know how many calls they should be making a. Nor do you know the number of calls that they are making be in the just happened with a client. I work with on Fridays. On the phone with the guy, and I said: hey, you forgot you supposed to work with you. Making outbound calls how many minutes on the is on the agenda of the company’s up in orbit to have enough leads coming in where they have actually kind of a mini call. Center they’ve got two people answer the phone and I said how many outbound calls per day. Do you expect this man to make and he said well it’s hard to tell there’s a lot of customer service it just hard to tell, and I said well let me explain you The Rock in the sand Theory. When I had my company DJ connection, I had a cup, I would keep my desk often the call center. I would put the rocks in the cup and I put the Sand lyrics. I love that email Jenna thought it was a good way to remind the guys, but I told him listen to make a hundred outbound calls before we start to receive any inbound calls you’re not allowed to make a single inbound sale. You’Re not allowed to respond to a single lead, because it’s commission, you can’t start making that commission until you eat to make a hundred outbound calls, because I’ve already worked hard and the previous DJ. So you don’t even know who used to work here. I worked hard to generate the inbound leads, but you guys got ta, invest in our future by making those hundred outbound calls, and you have to do it before you’re allowed to book anything and bound, and once we had that culture or there’s eight guys are good. Video footage of it on the drive time should I come, you can see it, but what you guys, making outbound calls at guys and gals 100 of them before noon. They would use to get a hundred outbound calls made before noon and then the phones blow up all day inbound. But I knew the numbers this kind of fun and talk to the coach and client. He said I don’t know how they should be making, but I know they made six and I said 6 for like the day that I don’t know for the week. While I accident, I mean it’s very easy: I’ve done it album sales. I know Steve you’ve done that if you’ve done it, you know you can make a hundred outbound calls every 4 hours, and you know you can set about 5 appointments and a full 8-hour day if you are making 202 Paul. I want to ask you this.

Why but how many of the clients you have you work with now had any kind of efficiencies in place before working with you, I mean what what percentage of clients come in there and go? Oh I’ve got all my numbers now down. It’S just a laser shot. What’S like an ass, I just got on my number to be with me how many of them have their stuff together previous to working with and accounted such as yourself. You know I can count on one hand, but only out of R3000 client said that came to us that you have 47. Is it okay to tell her you love her? This is going to hurt all use the gas and the brake. You hold the wheel. Okay, I can take no tomatoes got the wheel. I’Ve got the okay back to you. It is so the issue is really lot of times. It’S not the employees fault, it’s the owner’s fault in the morning and we’ll get another cup of coffee, but the reality is. Is you got upset that you didn’t your employees are going to respect what you measure and you have to create sand set up? You have to do their pay needs to be tied to production, not based on solely on time, and so that it you got to take the time as the business on it’s your business. You got to take the time getting like play. Clark of it Thrive. Business coach and figure out those parameters, and how can you have your employees paid based on results or effort not based on time when that starts happening, then they’re going to respect it there going to be more efficient if you want to do it, take the first Step to getting your financial life in order to taking that proactive, look under the hood, you got to go to hood cps.com when you go to hood cbs.com you’re, going to get a free copy of Warren Buffett’s book called The Snowball Warren Buffett’s book called The Snowball You get a free copy that book. By going there, plus you get a free one-hour consultation, which many firms are going to charge ,400 for, and you get almost every single time poll shows that you can save ,000 right now on taxation to this could be easily a 1300 in value pretty much out To get the book, you got the free consultation, you got the savings, you can have Steve a book. I believe that a book can change someone’s life did it did it did cause you to change the way you think or act can absolutely change a life. I believe it can change a life, so I ask you: what’s a book in your life, I don’t ask you this price and I want to ask you this: what’s a book that you’ve read the absolutely impacted your life profoundly, can I say to the other two Great ones an email through visited by Michael Gerber, live by Gerber.

First one I read: read it every year for knowledge, great book and then The Ultimate Sales Machine by Channel all by Chet Holmes, red cover Ultimate Sales Machine. Now, just a little business coach commercial for those Ultimate Sales Machine was written by 10 home to is the Bentley. Was the business partner of Charlie Munger, Charlie Munger? I’M a look this up real quick, so I don’t want to say it wrong, but Charlie munger’s net worth right now and you never heard his name. This is what’s crazy, Charlie Munger net worth it’s today: 11.6. 2 billion dollars according to Forbes another B, and he is Warren Buffett’s guy. I’Ve never heard of the book was written by Michael Gerber in the book, as you need to take the time to work on your business and not just in your business and I’ve never seen anyone ever do it without the help of an accountant and a business Coach never seen a conference yesterday that you had or the other day that you had it have. You talked about people that are good technicians that then start their own business, but they don’t know all the stuff.. That’S what that whole books about Robin and whatever it is that you do you think I’m going to go open! My own business, that’s the book! You need to read because it’ll prepare you for that. Tell Bryce I’m coming back to the minute! I’M going to just put you on the hot seat with the favorite book here. Paul. Is there a book you read when you thought me and you know what that book, or maybe it’s snowball, but if you read a book for you, thought me in that book. Right there, that thing was a game-changer for me was How to Win Friends and Influence People. Most accountants aren’t the most personable people. What are you talking about the tape on their glasses at least? Have you want any friends, I’m still trying I’m still trying? I got one guy keep calling and he won’t call me back. I thought he would my friend, so I don’t know what respecting pocket protectors quit talking negatively about tight khaki pants that don’t fit stuff, that’s hot! I love that. Look I love meeting with Amanda. Does my accounting, who, who talks kind of a nasally town and he has kind of a hero, the tape on his glasses?

I let go to put the glass at the end of his nose too. So I know he’s talking to to me. You know cuz, you kind of look up that he’ll look up and kind of go hello, so high. How was it? What was your name again? What was your name again so great to see you I’ll be right back and I love the tight pants and some other type too tight khakis. That’S it that says that something that I that’s that’s what I look for an accountant! That’S why I choose not to talk to you very much, I’m sorry! Okay, so you know it talks about how to sell yourself to people in in really it’s not about cells. It’S about releasing relating to people, and it is absolutely you know you don’t eat that they don’t teach you that in college accounting. What’S the book for you to read this book read this book and it was a game-changer for me. You can’t do can’t just do the this work and go home. It’S the Bible read my mind because I actually he was on the Bible app right. Just now. I saw those phones, the Bible, it’s fine, but I fully expect you to try to one up what up is here. So what? What is your favorite book? Honestly, I don’t know if I’m going to the other one update kind of stole both of them. You got to get it, I encourage you to not listen to this show in a non engaged way. I encourage you to listen to the show The Way We were talking about your financial future. We want to help you minimize your hidden costs and I promise, if you’re a business owner talking, save you thousands upon thousands, not just a thousand but Paul. What is it just an example of maybe a contractor.

You worked with her some business coach underwear, you said: are you aware that cost and they went all and you help them save thousands of dollars in fresh? Take one of the cost is that we often look at is said that they charge your credit card and they don’t they don’t seem like much, but they add up. Maybe it’s you know your book of the month club that you don’t belong to any more of that or that you know that Miracle pill. That comes in that you know that I had that clears your acne Family. Video got me there., I’m so I’m so excited about family videos of the last video store store in the world, and I thought this would be a great thing to do is to tell my kids kids back in the day we used to get into a car And we didn’t have a phone, why my phone in the car? We actually talk. You know where to drive over with words and we drive over to Family Video and we go in there and we rent a video of a lot of times. They didn’t have any way to watch on Netflix or Amazon to reserve it in advance to reserve it. You get the movie turns out, you have to return, the video turns out you have to, and I got that Father of the Bride 2, the hot Father of the Bride DVD and I kept a thing for a nuclear Half-Life, and then I do our weekly accounting. You notice that the site haven’t hit yet I looked at the bill. I said wow. We we now own that video. Is it a in late fees or something? So you got to look at those accounting fees. You got to look at your small fees or hidden fees. You got to meet with a proactive CPA, so I encourage you to reach out to hood. Cpas today, go to hood CPA book, your one-on-one consultation with hood CPAs and claim your free Warren Buffett book. Even listen to look into the HUD with Paul