The First Lever

What if the very thing that sets you apart is the key to everything you're striving for? Welcome to Uncommon Edge, the podcast for those who are done with the ordinary and ready to own what makes them different. I'm DJ Newman, and if you're here, it's because you know you're built for more. You're Uncommon by design, ready to break boundaries and build a life of purpose, success and impact. Each week we'll dive into hard hitting strategies, raw stories from the trenches, and. The tools that will sharpen your edge. From game changing lessons to deep diving interviews, this is your space to rise up, build and make your mark. Whether you're growing a business, dreaming of starting one, or looking to level up in life, you'll leave each episode with insights and inspiration to make it happen. You weren't designed to blend in. You were designed to stand out. So if you're ready to defy the norm and bring out your best, let's dive in. Get to work. Your journey to owning your Uncommon Edge starts now. When I first start working with business owners, there's one place I go first and it's not where you think. It's not marketing, it's not sales, it's not the org chart. I go straight into their expenses, and here's why. In almost every business I've walked into, I find enough money already sitting in that business, money that they're spending right now without realizing it, to pay for my services for. For months, sometimes for the entire year, and sometimes even more. That's money that's already yours. You just can't see it. Today, I'm showing you how to find it. Welcome to the uncommon Edge. I'm D.J. Newman. Let me describe a business owner to you and you tell me if this sounds familiar. You're working harder than anyone that you know in your circle. Maybe it's some you're working harder than anybody in the building. Revenue's decent, but money's just never there. You can't say what a job actually costs you, your pricing by gut, or maybe what's in your bank account is how you gauge how you feel about your business. You know, you can't really tell me what every month actually profits or not. Every month feels like a total scramble and nobody can actually explain to you why or where the money actually wound up or how you are actually running. You just know that you have a bunch of stuff that you need to do and it's been working out so far for you at least that you're aware of. Does that sound like you. If that stung just a little bit, good, because that means that this episode's actually for you. And I want you to be really clear about something with you up front. I. I'm not about to tell you like to go be cheap. I'm going to tell you something way more useful than that. The first lever is the expense audit. And here it is. The first lever is a line by line, every dollar going out of the business with a real question asked about each one. And I know what you're thinking because everybody, every owner thinks it. DJ I know what I spend. I promise you that you don't because, not because you're careless, but because expenses don't announce themselves. They accumulate subscriptions from two years ago whose rate crept and you had no idea, or the insurance. Nobody reshopped and grew. And the thing that you bought for a problem that you no longer have, nothing is there. It's nobody's fault because you had to do what you had to do in the moment. But then you just let it slide, and then that sliding becomes an avalanche and you don't even realize it. So I want you to ask yourself, like, when's the last time you took a real good look at your spending? And this is not just on a business level, but also on a personal level. You can do this by doing a, what's called a vendor governance report in QuickBooks. If you have that, you can just run a summary by vendor spend, or if you're doing this on a thing personally, you can pull up your bank feed and organize your transactions by category or vendor or whatever. And you might be really shocked when you see that, because when you're spending 20 bucks here, 100 bucks there, whatever, you. You don't really necessarily know how that adds up. You just look at that one transaction, but you don't see how that correlates with all the other spending that you do. And before you say, you know, this is really common sense stuff, okay, sure, it might be, but are you doing it? That's the real question. So let me tell you what this actually looks like when. When we sit down and do it. What if you find, like in a typical audit, a range of dollars found, like the. What's the typical reaction that you might think you would see when you're in there? I know when I'm working with my clients, some of them are absolutely just shocked by what we found to date. One of the largest expense audits that we did, and we turned it into a system I call a vendor governance we found over $700,000 of expenses that we were able to cut. Now, obviously, this is a larger company, so. But this is why this is even more important for you larger companies out there. If you don't have somebody in charge of your finances or if you're not looking at your finances, it can get away from you really, really quick. Imagine what good you could do or how you could give back to your community or to your team with an extra $700,000 in your pocket. You know, this is. This is great. And here's why I start here instead of anywhere else. When you do this right, the money we find covers not just like my services, if you decide to work with me for months, but sometimes it can cover way more than that. So the work actually pays for itself before anything is even changed in your business. How crazy is that? And think about what that means for you. Even if you never hire me or anybody to your organization, just taking the time and the discipline to do this expense audit, there is money in your business right now. Money you already have earned. The blood, the sweat, the tears that you are handing to someone else just for no reason at all. You don't have to sell anything to get it. You just have to take a look. Now I gotta address something because there's a guy I learned a lot from who would push back on everything that I just said when I was learning under Grant Cardone. He was adamant about this whole thing. Don't focus on cutting your expenses because you can only cut your expenses down to zero. Revenue has no ceiling, he would always say. And he's right. He's completely right. And I still believe that. But here's what I've learned sitting across from real owners that might be in trouble. And if this is you, I want you to listen really closely. There's a difference between building and triaging. Why not take advantage of both? When a business is bleeding and cash is tight, revenue takes time to arrive. Sometimes, you know, there's some systems that have to be built in order to get that stuff going. So expense cuts land immediately. So we stop the bleeding. And then critically, as we go through, the expense cut is guaranteed revenue stop, like right there. Whereas revenue growth is a forecast. Yes, it can happen, and it does happen. But the expense audit is a guaranteed removal. So here's how I actually run it. When we cut things, we. We look at things that need to be cut first. Not to be cheap, not to be cut forever even. But we do it because it's fast, it's certain, and it buys us a little bit more Runway. And when we go straight into our money missions that we work together, growing revenue, because that's the entire ceiling. You know, the entire ceiling comes off once the revenue comes up. And you're even more profitable because you're managing your run rate right? So don't just pick one lever, pull both in the right order, cut the bleeding, and then build the machine. Anybody who tells you it's one or the other has never had make payroll on a Friday. Now, if you find yourself shaking and nodding your head, I want to urge you right now to think like, when's the last time you did this? And we have a system that does it automatically. I recommend doing a vendor governance audit at least once a quarter just to keep a tab on what's happening. And a lot of times, and you know, I'm guilty at this as well, and maybe you are too, but a lot of times we. We're our own worst enemies because especially when there's new and exciting tools that are coming on, it's so easy to say yes to that thing and you just add it up and next thing you know, you're subscription to death. You feel me? Okay, so we found the money. That phase is done. That's phase one. Now here's where most owners get lost, and it's the part that makes everything after it possible. We go into P and L, we make sure the chart of accounts is actually built right and the accounting buckets where every dollar lands is allocated properly. I was fortunate enough to have the opportunity to work with some amazing financial minds. One of them was the ex CFO from Dr. Pepper. She helped me get a real understanding of how a chart of accounts is supposed to structure the eight accounts that every business absolutely needs to have and how the sub accounts work. And so that way you know what it truly costs to run your your company. And I know. Before we get into this, I can feel the energy dropping through the speakers right now. Chart of accounts is not riveting. I get it. And it's not exciting. But stay with me because here's why it matters more than anything else on this list. If the buckets are wrong, every number downstream ends up being wrong. Job costing is wrong. Your average ticket is wrong. You can't see which levers are working in your business. What's making you money and what's costing you money. You're flying completely blind while holding a full instrument panel. It's like flying an airplane and none of the gauges are working. How can you make Decisions on what levers to pull and what things to do in your business. If you can't trust your gauges and everything raises and falls on the chart of accounts and how you allocate your spending and reconcile your accounts each month. And let me tell you what I actually find when I open owner's books. It's crazy. I find that sometimes income is categorized wrong. Owner's pay is not recorded at all, which makes profit look enormous, but it's freaking fake. Labor not split between direct job cost or overhead. So you can't job cost anything properly. Payments are collected but not applied properly in QuickBooks, inflating what customers supposedly owe you, thinking you're good to go. Books that show impossible profit on modest revenue. And these are your real. Like, these are real cases, right? I don't want to expose any of the businesses that I've worked with, but if you're sitting here thinking, like, shoot, man, like you got cameras in my. In my office because it sounds like me, I want you to really take a step back because once the buckets are right and now we can finally see what's true. And this is where real numbers start. I remember when I was going through this because our books were all messed up when. When I had a professional come in and help me fix ours, and I thought our stuff was good. At first I was really discouraged because they wiped everything out and they set up the new chart and we started allocating things in the first year. And I'm like, man, I'm not really seeing the picture. It's almost like a video game. Have you ever played one of those video games where you're, you know, you start out on the map and the whole maps blank. And then as you explore the map, it grows and, you know, the whole thing starts exposing itself. As you go through the map, building out a new chart of accounts is kind of like the same thing. You start to see things start to trickle in, and you start to see how your business is actually functioning properly. And it all starts with the eight accounts. If you want to learn more about the eight accounts that you need for setting your P and L up or your chart of accounts up to know how your business is operating, you can reach out to me@ UncommonVentures.net or you can call me at 586-400-1333. Me or my team will be more than happy to walk you through this and get you set up right. There's also a ton of tutorials on YouTube if you want to try to figure it out on your own. But here's the line I give every client. You cannot price right, hire right, or grow right if the numbers aren't true. Every strategy built on bad numbers is a house built on sand or a house of cars just ready to fall over. We're not doing accounting for accounting sake. Trust me, I'm not accountant. I don't like doing this crap. But it's a necessary evil that has to happen so that we know what we're doing. We're building a dashboard so you can finally drive with the lights on. So the question is this. If it's that valuable, why doesn't every owner just, like, dive right into it? And I've already kind of hinted at it. It's not the fun part. Nobody starts their business to reconcile accounts. But the deeper reason is harder because you're looking at honestly at your expenses and your books that mean finding out the truth and about your business. And some owners would generally rather not know. I've actually had clients that started off saying, I don't want you even to look at my books. Just make this happen or make that happen. And I got to look them hard in the face and be like, man, we got to make sure that this is good, because I don't want to mess with anything. And. And for example, let's say you sell watermelons or widgets or whatever you want to call it, but let's say it's watermelons. You have these watermelons, and you buy these watermelons for a dollar each, but you sell them for 80 cents each because you didn't realize you spent a dollar on them because you didn't add all your costs in. And so you're selling them at 80 cents, and you're telling me, hey, DJ, get me all kinds more leads to sell watermelons. I want to sell as many watermelons as I can. And if you're buying for a dollar and you're selling them for 80 cents, everybody with, you know, half a brain cell is going to know you're just going to go out of business faster. But we don't look at our business that simply. When we're going through this, we just make assumptions that, hey, we're doing the motions, and the motions are good, and we're good to go. It's super important to find out what you are buying your watermelons for, okay? And that's why it's so honestly important to get your expenses in. Now, here's a challenge that I have for you and that I want you to take. I'm putting a deadline on it before Sunday night this week. Pull your last three months of expenses, every line, and go through them one day at a time, asking one question. If I were starting this business day, would I sign up for this again? Don't cancel anything yet. Just build the list. And I'm telling you right now, you're going to find money. And when you do, that's not found money. That's money you already earned that was quietly leaking and walking out the door. Now, I know only a few of you will actually go and do this, which is wild, because this episode, if you actually go and do this thing, is going to pay you right here, right now. We have a system inside of Uncommon Ventures that, like, does this in a systematic way. We. We actually onboard each vendor appropriately, where I will actually audit this stuff for you so you don't have to worry about it. Like I said, again, if you want to check it out, you can go to uncommon ventures.net, book a call. We can walk you through it. But doing it on your own, it's not a crazy hard process. You can just manually go through and run this stuff. This week, we're gonna be going somewhere no business show typically goes, and I'm planting a flag on it. And we're gonna be talking about your body, not fitness influencer crap. Can't stand that stuff. And definitely not me preaching from a mountaintop. Your body as a business asset. Trust me on this one. All right, so that's the first lever. Not only one, but the first one. And here's the reason why. It's first. It pays for itself. It's immediate. It buys you the Runway to go and build. It allows you to cut what's bleeding, fix what's blind, and then go take the ceiling off. And if you run this audit this week and you find something, I want to hear about it, and if you want help running it and you know where the door is, just come to uncommonedgepodcast.com, you can reach out to the show, or you can go to uncommonventures.net and you can reach out to work with us directly. I'm DJ Newman. Stand out and stay sharp. You've been listening to the Uncommon Edge with DJ Newman, where average goes to die and your next level begins. If you're ready to go deeper with real strategies to build a stronger business and a stronger life, head over to Uncommon Ventures.net new episodes every week. Now get out there and do something. Uncommon.