– All right. We are live. Let’s see, people are starting to stream in here. Nice to see all of you. Let’s see. I would love to have you all share in the chat where you are joining from. I can guess based on some of the names that I already know, but there’s a lot of folks I do not know here so welcome Alan and Austin and Casey and Chris and Dan and David and Greg and Greg and Jay and John and Mary going on and on. Yes. Drop in the chat if you would, where you are joining from so people can see. Vancouver VC very good. Ripley, New York. All right. Nice, fantastic, Alan Hartman, Yes, Houston, fantastic. Anaheim, every corner of the country, Wisconsin and Salt Lake City. There we go. Really nice to see you from Ogden, Berlin in Connecticut, Chicago, OCA, Florida, Cleveland fantastic. All right, well welcome everyone. Thank you for joining me today. I could not be more excited about what we’re gonna be talking about today. I know we have many clients on this call and we have many that are not yet clients, a little bit presumptuous of me, but this, what we’re talking about today is really kind of an evolution in the proshop ecosystem and what we’re bringing to the market and what we’re bringing to customers is something that we’ve long wanted to do, but haven’t had the resources and a way that we could do it. So I’m excited to talk about what we doing today. What we really are talking about is what we are calling the ProShop Profit Growth System. And we are gonna be laviging basically our software along with some additional services to really, really help customers maximize profitability and growth and scale and really get everything dialed in with their company using kind of proshop as the background, the tool for doing that. So let us, let me move ahead here. So I’m gonna be joined today by Mike Watkins and Dave Capkovits from EBITDA growth systems. These are two gentlemen that I have gotten to know quite well over the last many months or the last really year. We even had a really great session. Couple few weeks ago, Kelsey came down from Vancouver. We sat here in the office for two and a half days, and just brainstormed and talked and shot videos and talked shop. It was a ton of fun. So these guys are gonna share a little bit today about what we are offering as a team through the proshop system and ecosystem. So as I was reviewing this mission statement, this is our proshop mission statement. I realized that we probably might need to change this word software into solutions because what we really are doing here today is branching out beyond just software itself, but into services and coaching and other things that are really crucial for shop owners and for shops in general. You know, I think most everyone on this call can probably relate to the fact that just cause you’re a really great machinist doesn’t mean you’re gonna be a great shop owner, right? There’s so many things to know about running a business. I learned that the hard way we had a ton of struggle in the early years of pro CNC, it was just challenging. You know, we didn’t know what we were doing. We learned it the hard way through lots of trial and error and mistakes. So having people that have have gone through those trials, have walked in your shoes can be just such a huge benefit to doing things better and easier. So why are we introducing this today? We always get these kind of comments. You know, we love proshop. It’s been fantastic, but we need more help, right? We need some guidance, we need some coaching. we need some additional training on running the business, not just on running how proshop works. And we desperately wanna do all that, we’ve wanted to forever but it’s just not been super accessible because we just are capacity limited, right? So when we got introduced to Mike and Dave and their team at EGS and saw their brand promise which we’ll talk about a little bit later, we just had to know more we dug in and it was just exactly what we were looking for. So I’m gonna stop my share and let Mike and Dave take over the screen share here and we’ll dig into what we’re doing here today. And then Mike’s gonna give us a little bit of a sneak peek into two of the classes, a mini version, just a few minutes long each as to some of the things that you can expect from that process. So you guys wanna start sharing your screen and take us away from here.

– Don’t look so serious, Mike.

– Yeah. Yeah.

– There we go. That’s the one.

– All right. Well I gotta say something. Our brand promise said EBITDA of growth is the impact live through improving business performance. And when we met Paul and started talking with Paul and then we got to sit down with Kelsey, it’s amazing, the synergies between our companies and we couldn’t be more excited that to partner up with a company like proshop. I’ve had a lot of exposure, different E R P systems and it’s definitely one that I would endorse wholeheartedly. So we are super excited, Mike.

– Yeah. Let’s jump right into their services that are available.

– Yeah. Right on. There’s three different services that they we’re offering through this system. Number one is profit coaching. We’ll talk a little bit more about that next slide. And then there’s a fractional CFO or a controller, depending on how much you need in your business and then training in development classes.

– Alrighty.

– So profit coaching is it’s really, it’s having the right dust-free mirror and it’s the key to profitable growth. It’s having somebody come alongside you and have a good discussion into where you have your thoughts, you express your thoughts and someone comes back to you and spends a little bit of time with you and walks through this. Go on the next slide, Mike. We really talk about building five plans. You know, you got a management plan, you start with a strategy, a strategic plan. And off that you have a management plan. You have a marketing plan, a sales plan, a financial plan and operations plan. And we help you build those plans. And as, as we build those plans, the magic really happens by having a coach beside you and navigating those plans. When life throws a left, a left turn at you, how to navigate that, how to keep guardrails to make sure you stay on track and make sure you continue really nailing down your goals. So as a shop owner myself, I owned a shop for 16 years and I loved it but it was lonely at the top. I didn’t have someone to talk to when I needed somebody at times. And navigating those plans. We have over a hundred years experience between our coaches running shops.

– Yeah. I have two years and Dave has 98.

– More than just us come on.

– [Paul] I wanted interject just how important it is, what you just said. When our company was young, when pro CNC was only four years old, 9,11 happened and we were not prepared for that. And we almost went out business ourselves and it was until we got a business coach who held up that dust-free mirror. And we started looking at what we were actually doing and what we needed to do. I still to this day credit him with helping us save our business from going bankrupt. So important.

– You know Paul I could talk about this for the entire hour. I remember some really dark times when I owned my company and a lot of mistakes I made that I didn’t need to make and where I’d be today if I had a coach earlier in my career. I’m very thankful for the men and women to stepped in and really spoke a lot of truth into my life and helped me out and helped me grow to the man I am today and the business owner I am today. But boy, this is a passion for Mike and I, because if we were to reach back in our past, if there was one thing we could contribute that would’ve changed our lives dramatically was to have somebody come alongside us. So that’s our passion, that’s our drive, that’s what we want to do. And because of that, we’ve noticed a trend. And after about 16, 17 years of trending and taking a look at what Mike did in his business, I’m unfortunate to be a part of it in the last three years. We doubled the value of your company within three years, we guaranteed it because we’ve never not done it. We haven’t found a situation where we haven’t and it’s great. So we hanged our hearts and we guaranteed a double evaluation of your company in three years. That’s one thing we stand on and one thing we promise and one thing we always hit generally much sooner than than three years, but it’s pretty awesome. And moving on quickly, going into the financial, the fractional CFO and controller. This is a dedicated CFO or controller resource to you. It’s really all about having a resource that demystifies your financials. You have your bookkeeper and they roll everything into QuickBooks or Sage or whatever accounting system you use. And then you have your CPA that really preps you for your taxes and Mike you’ll talk a little bit more about that but it’s all about how having a resource that demystifies you and demystifies that for you.

– Yeah, yeah. This slide is designed to exhibit that confusion that happens between your bookkeeper, who’s working tirelessly to make sure they capture all your financial transaction and then at the end of the year, you’re CPA some kind of way files your taxes based on those transactions that the bookkeeper entered into the system but you don’t know what’s happening in between there. You’re counting on your bookkeeper and you’re counting on your CPA. And with our fractional controller, fractional CFO service, it’s our intent to bridge that gap and to have your financial data be available to you, telling you this story about how your company’s doing. So you can make some business decisions from a budget standpoint, a forecast standpoint, a cash management standpoint. These are the things that, these are the decisions that you make that will have a significant impact on your profits. And if you’re not mindful of those decisions, they will be made for you through the activity of your business, and they can really impact your profitability.

– So in owning a small machine shop, I wish I had someone to help me roll up a budget. I wish somebody that would have helped me roll up forecasting cash, understanding my DSOs and DPOs. I wish cash management, making sure I had those things in place to make sure I’m driving in the right direction with the profits coming in the door or the non profits coming in the door and how I manage that properly and how I could get myself out of that. And this is a service we offer that really is the tremendous help in that regard.

– When you guys…

– I wanna add… go go, I’m sorry

– [Paul] Yeah. When you guys told me about this and we started talking about offering it through proshop using proshop as sort of the back-end tool generating the numbers, within less than a week I had two or three clients just out of the blue reach out to me and say, “Hey, we could use some help on the financial side, right?” Getting the back-end of proshop dialed in really dialing and job costing, budgeting. And so I know that there are a huge number of our clients that really could use a service like this. Again they have competent bookkeeping help. They keep the books kind of clean ish but making those some more strategic bigger decisions are just really difficult and they could use that help. So I just thought it was funny that I had two or three people just completely outta the blue say, “Hey, I need some help here.” And the timing couldn’t have been more perfect.

– And Paul, the idea here is a fortune 100 company will have a full-time CFO and they’ll have a full-time controller, but a small, the medium sized business needs some of those same services, some of those same support mechanisms, but they just don’t need it full time. They need 10% of the time or 15% of the time. And that’s the whole concept of a fractional resource for financials.

– [Paul] Yeah.

– And we didn’t talk about training and development. There’s three legs to our stool; there’s coaching, there’s a fractional CFO and obviously trained development, which you’re gonna get a nice taste of today from Dr. Mike Watkins. it’s these powerful training sessions really written for you, a machine shop owner, for a layperson that’s really, that’s involved in their business. Something that’s easily absorbs, something that you can take and apply day one, something that you can take your frontline leaders and lean into them because all of our training is all about the leadership and your frontline managers. And it really helps because as you have a business, you have a rope and the owner’s pulling in one direction. And the goal for the owner is to get everybody else in the shop pulling that same rope in the same direction because many hands make light work, right? So this is all about helping the business and driving it in the proper direction.

– All right. So today we’re gonna do excerpts from two of our courses, and these are gonna be brief excerpts to give you a taste for what the training looks like, what it feels like. And to Dave’s point, our training is designed to help that frontline manager pull the rope for the leader, for the business owner and to help create that culture, that the business owner is attempting to bring to his company or her company. So this slide shows the 36 courses that we offer to our clients. And they’re broken down into six different tracks, if you will. And today we’re gonna talk about two courses, high performing teams out of the leadership and development track, and then also masterful communications or effective communications out of leadership development track. So let’s jump right in. High performing teams. Love this slide

– [Dave] It’s cause you race cars.

– [Mike] Yeah, yeah, yeah. So we start every course with the learning objectives. Like at the end of this course, the participants will know how to do these things. This particular course has five learning objectives, but we’re only gonna touch on two of today as we do an excerpt of the entire class. And that is; describe the characteristics of high performing teams and then talk about the team building process. So what does a high performing team look like? That’s the first question and when I was writing this content, I wanted to know the answer to that question. So I did quite a bit of research and I ended up with a compilation of ideas and data. And this is what a high performing team looks like. First of all, the selection of team members is crucial. And so if I have a little astronaut and I can’t believe it still but when they decided to bring on the next class of astronauts, there are 18,300 applicants and they selected 12. So for an astronauts selection of team members is crucial. In my research, I found that Navy seals had the same really difficult application process. You know, being a fighter pilot, there are all kinds of professions that require only the best to be selected, to be a part of the team. And then a second thing that made high performing teams high performing teams is the willingness to get rid of members who don’t consistently meet the goals and objectives of the team. And when we deliver this training Dave, we always do the ABC and the neutron Jack. So once a year at GE, Jack well said, we’re gonna divide our workforce into A players, B players, and C players. And if you’re a C player you get fired and that’s 10% of the workforce every year had to get fired. And then the federal government said that’s against the law. So they stopped doing it but the idea was, okay we need to get rid of the people who aren’t pulling the wagon for us and replace them with new people.

– So what happens if you’re really sympathetic and you just love your employees but you have somebody that doesn’t pull the rope at all but you keep ’em around.

– Yeah that’s typically what happens. And so Jack said, I’m gonna take it out of the hands of the managers because my managers are poor. They’re not making the decisions they need to make around people who aren’t pulling the wagon for us. And so I’ll put a system in place that will get rid of that 10%.

– So imagine a Navy seals’ team and one of your seals being a very, just a low performer, imagine what that does. That’s a life and death situation, right?

– It is a life and death situation.

– Really impacts the team.

– Absolutely.

– That’s a tough one.

– Yeah. And so in a Navy seal scenario, they typically self select. I mean they, “I love your man, but you gotta go because my life is on the line.” But a third element of a high performing team is they have a manager who supports and builds confidence for the team members. And in my estimation, that’s the most important, certainly selecting the right people is important and getting rid of people who can’t pull the wagon is important but it’s the manager who who’s making all these decisions. And so we really focus on the development of frontline managers because that’s the foundation for the rest of the company.

– [Dave] It is tremendous what we see in shops across the United States when a manager engages the workforce and walks around the shop and pays attention to the people and ask ’em how they’re doing and pays attention to how they’re doing and what’s happening and their family.

– Sure.

– You don’t have to know all the details but the fact that you walk around and let your team know you care, it’s amazing what that does for the team. We’ve seen it. We’ve seen time and time again.

– Yeah. And I guess the important point to make here is that according to the Gallup organization, 14% of people are gonna be naturally good at managing other people. Which means that 86% of people aren’t good at managing people. And it won’t come naturally for them and they need to be trained. And there are people who have gone their whole careers and never had a good manager. So don’t let that happen within your company, have your frontline managers being responsible for the care and fitting of your individual contributors but they don’t have the skills they need to do that.

– Yeah.

– Good, good. And then finally, the stress that defines the work is what makes people want to be a part of these high performing teams. And I think your average machine shop is a stressful place. And the stress associated with, are we gonna win or are we gonna win? Is part of what makes people want to do that work. So what does a high performing team look like? These are some of the descriptions of the elements of a high performing team. A second topic we talked about are the stages of a team in this high performing team course. And the way it works is a team is formed. And shortly after they’re formed, they go into storming. And if they’re lucky, they come outta storming into what’s called norming. And this is usually where teams hang out in norming from time to time, they actually get up to performing and performing is they lose track of time. They’re winning in such a big way that they’re in flow.

– [Dave] They are in flow.

– Yeah. If you’re a basketball player and you can’t, you just like, “Gimme the ball cause I can’t miss.” or that’s my metaphor. If you’re skiing and you just lose track of time, you’re in flow and a team that’s performing is in flow.

– And I like to reference lane frost the professional bull rider and his dad would reach out to him. Of course he’s looking for his dad’s approval and his dad said, “Staying on top is the real continual challenge. Getting on top is one thing but staying on top is another.”

– Yeah.

– Because once you’re performing, if something goes sideways, you don’t go back to norming. You go all the way back to storming again.

– Absolutely.

– And then you go through that norming and back to performing and that it’s like a loop, but the more you work on that, or you work on performing the team it’s amazing to see how teams can really fly.

– Yes, yes. And the reason why teams going to storming is because everyone’s trying to figure out what their role is, everyone wants to do a good job and everyone wants to be the man or be the woman and so don’t step in my territory here. This is my… That’s why you have this storming going on. And if you can work that out, then you get to norming, but you go back to storming because something happened, someone quit, you hired a new person, but everyone’s trying all the chairs on the deck gets it shifted around again. So the most important thing from a management standpoint is to understand where your team is in the forming, storming, norming, performing continual, and realizing your actions in storming should be way different than your actions in performing as a manager.

– [Dave] To navigate.

– [Mike] So you have to know how to navigate that. So

– [Dave] That’s a great taste of that course, Mike.

– Yeah, yeah. It’s fun stuff. Good, good.

– [Paul] Good stuff, guys. Hey, I wanted to stop for a quick second so for those attendees on the call today, I would love for you to put in the chat. What was your number one takeaway from what Mike just shared? I know for me I get to look inside of so many companies that we see some brilliant really great ones and we see some that are not so great. And so I definitely can see companies that actually get stuck in that storming area. Maybe some norming a little bit but it’s all coming down to leadership, right? They don’t have leaders that are aligned that have clear vision that really set a goal and stick with it and that can be tough for people. So that was one of my takeaways. I’d love to see, yeah. If anyone would like to put in the chat, what was your number one takeaway from that, love this, we’d do this at one of software coaching programs that I’m a part of. And it’s always fascinating to see what people put as their takeaways in the chat. While we’re waiting for a couple those to come in, there were a couple of questions, which we can do real quick here, before we jump into your next class.

– Okay. So Reid asked, “how do you measure valuation?” And probably related to your brand promise, how do you measure valuation?

– All about EBITDA? It’s all about your net profit and you help it back to appreciate amateurization taxes, but it’s, you take your EBITDA and based on the market you’re in, you get a multiplier of what your business is worth. And so you have a volume of revenue and the market you’re in, and then how much EBITDA you have, and that multiplication gives you your value. It is not how much your equipment is worth, unless you’re looking to… unless you’re looking to liquidate and that’s not selling business, that’s selling assets, right? So, but that’s how we measure

– Yeah and..

– We measure that.

– And on that, on that EBITDA multiple, you’ll hear it referenced as the EBITDA multiple, you can plus it up or you can minus it. For example, if you have a company where the owner hasn’t been there in six months because it runs on its own,

– That plus it up

– That plus it up.

– But if the owner owner is the chief cook and bottle washer and nothing happens without the owner touching it, that plus is down.

– Great, that’s right.

– [Paul] Yeah, for those that may not have seen it, last September, we did a mini conference with modern machine shop magazine on machine shop ownership change. And Dave was one of the panelists. And we definitely heard from people that had very different experiences with what a company was worth and what they were willing to pay for a company based on those same exact variables. So…

– Yeah. And Reid your question was do you double the valuation or do you double the EBITDA and the…

– [Paul] Multiply the EBITDA.

– Yeah. And those are almost anonymous.

– Yeah. Yep. It’s actually both, you look to double both, you look toward how do you increase your multiple at the same time you want to increase your EBITDA cause EBIDA is money in your pocket. It’s all about putting money in the owner’s pocket and helping them along dispersing that with either whether it’s donations or giving back to employees or something for the culture, right? So they’re both very important and you work on both those at the same time.

– But Dave will tell you also that the multiple for… if you’re doing auto parts versus the multiple for…

– Aerospace.

– Aerospace, or robot assisted surgery, those multiples vary based on the industry that you’re in.

– Absolutely.

– [Paul] Well, there’s lots of questions about valuation not surprisingly. We’ll save some of those for the end. And I would also request and suggest for actual questions. Please put them in the Q & A as opposed to the chat. It’s easier for us to keep track of those and we’ll make sure we can get to those at the end. But another one that was in the actual Q & A section, does your training run parallel to the apex certification journey?

– I’m not familiar ICS,

– [Paul] with ICS.

– so I wouldn’t say yes. I’m not sure what that is.

– [Paul] Okay.

– The training that I’m showing you this morning is really management and leadership development training as opposed to any industry specific training.

– Yeah. Our training isn’t bought, we have made this training and we’re making it available for proshop customers. So this isn’t something that’s bought off the shelf. This is something we’ve lived, eat, breathed.

– Yeah. We’ve delivered it in seven countries over the course of 25 years.

– [Paul] Awesome. And for those proshop clients starting in the next release or two, the descriptions and links and everything for these trainings will actually be right in the training module within proshops. You’ll be able to just browse the library, see descriptions, maybe a middle of video and then launch into getting those if you want. But all right, let’s move to your next class. That’s all the questions, right?

– So the next class we’ll talk about is masterful communications and every company, every relationship. I mean, I dunno, effective communication touches every aspect of our life, but it’s really important for a frontline manager to have some effective communication skills, because what happens is if the manager has good communication skills and the individual contributors will model those good communication skills. And that’s how it gets spread throughout the organization. If you, the owner has really poor communication skills, it’s gonna be difficult for the rest of your organization to have good communication skills. So it’s pretty important. So again, five different learning objectives for this particular topic but the two that we’ll talk about today are the two-way communication model, and then understanding some of the limitations of the two way communication model. So if we jump right in, these are three quotes that I just love about the concept of communication. And the first is that the enemy of communication we find is the that it’s actually taken place. And I don’t know if you, if you’ve talked, if you have a teenager and you’ve expressed your sentiments to a teenager, and you think that they understood it, the chances are pretty high, that they didn’t, you’re under the illusion that you communicated with that teenager.

– [Dave] Been married 29 years. And I’m still under the illusion every once in a while, the communication has taken place where my wife is.

– Yeah.

– My wife’s. Yeah.

– It’s usually that way around. The wife thinks she’s communicating something to me. And then at the end of the day, “Hey, did you get that done?” And I’m like, well, how am I supposed to know I should get it done? You didn’t tell me, “I told you this morning, you noded your head.” It’s amazing.

– Yep

– It’s Amazing.

– Now that was my cereal Cause I was like my cereal, Right?

– Right. And then the second to that quote is, communication isn’t the objective of good managers. Communication is not the objective, understanding is the objective. So that’s what happens. We talk, we talk, we talk and we assume that communication has taken place. But what we’re really looking for is for them to understand what it is we’ve said, and that we understand what they have said. And so a big piece of understanding then is effective listening skills. And we spend a great deal of time in this communications course talking about the impact of good listening skills. So here we have the two-way communication model and it’s pretty straightforward. You have a source and the source might be me and I have a message that I’m gonna encode and encoding is language obviously. And then the message has to go over a channel. And that might be the telephone, that might be an email, that might be in person but there’ll be a channel that I use for that, for that message. And then the receiver is gonna decode that message and then provide the source with some feedback. Like I understood your message or I didn’t understand your message and that’s the two-way communication model and really what could go wrong in something so simple You know that becomes a question. And all I have to do is tell you that if you were to fire someone using a text then you have violated the two-way communication model, because text is not a good channel for communicating the fact that someone is fired.

– [Dave] Yeah. Just the fact that some people read a tone in text messaging.

– Sure, sure.

– [Dave] I mean how many times has that gone different? Cause if you’re an owner and you send a message via email or text often times, owners are task-minded, you are getting something done, they send something very direct to an employee. Whether it’s an email, it read like why you’re being harsh or you’re being aggressive. And it’s like, no, no, no, I just need this done.

– Yes.

– So sometimes owners need to go back and maybe put an entry line in their email or something special at the exit line just to make sure that the employee really understands the emotion behind that. Well cause that could tear it up.

– Right. Dave spoiler alert, email and text are terrible communication mediums. And as business owners we should use those sparingly. Okay. So this two-way communication model you can see that it’s fraught with some difficulty, but how bad is it? This guy Osmo Wiio he’s a Finnish researcher. He’s also a really funny guy but his research indicates that the two-way communication model works less than 10% of the time. So less than 10% of time, we think that we’ve communicating something, but understanding doesn’t happen, understanding happens less than 10% of the time. And again all you have to do is think about someone who’s very dear and near to you, whomever that might be, a child, a significant other or whatever. And you’ve expressed something to that person. And they got something entirely different. And it’s because the two-way communication model really breaks down in so many different ways.

– [Dave] Yeah. And all his research the highest number that I saw and everything was up to 12%. Yeah. Up to 12%. So if you think about, think about that communication, best case scenario, you’re really around 12%, man. It’s so it’s like you said earlier, it’s all about understanding not just communication. It’s communication and verification. Good. What you said.

– Yes. Yes. And so you’ve said something and if they’re a poor listener and then they said something back to you and you’re a poor listener, that’s where it just falls down and all of this…

– Say something, the other person just nods their head.

– Yes, yes. And you’re like, huh, I wonder what’s gonna happen.

– And it’s getting worse, Dave, unfortunately because of our fast-paced lives and we have so much going on and this is one of the major reasons why the two-way communication model breaks down, we have all these distractions and it looks like this. I’m gonna give everyone a 10 seconds to read this slide. And you’ll find that you can read it, there’s letters missing, and they’ve been transposed, but we can still read this. And the reason why we can read it is because we fill in the gaps, mentally we fill in the gaps. But unfortunately when we sit down to talk to someone, we do the same thing. They open their mouth, they start on a topic and we fill in the gaps, “Oh, I know exactly where you’re headed with this.” “And I’m good now.” And then now you’re thinking about the grocery list or whatever and you missed so much of what was communicated because you were distracted and you just filled in the gaps and more often than not you’re wrong.

– [Dave] Yeah. And a quick one is if, you have been talking to a manager Mike, and talking to the manager and while you’re talking to them saying something really important of their phone buzzes and they pick up a text in a middle of a conversation.

– Yes.

– And you’re like, but I’m telling you something important, but this text is more important to the manager.

– Absolutely. And how’s that make you feel as an employee or Partner?

– It makes you feel like, Hey, I’m just gonna check and see if this is a better deal than the one that’s sitting in front of me right now. Is really what they’re telling you.

– So just like I said, distractions, something we can manage.

– Yep.

– For sure.

– Very good. All right those were the two excerpt.

– Do you have any questions on the first class? Paul, do we want to… any other questions or anything?

– [Paul] There are some other questions. Yep But I just wanted to say, I was glad I was on mute when you mentioned the teenagers, because I cannot tell you how many times I have talked to my 16 year old. When you pour yourself a bowl of cereal in the morning, please make sure there’s not a spill of milk and Cheerios all over the floor every single time. And he’s like, okay, I’ll do it. And then the next morning there it is again. So…

– [Dave] There you go.

– [Mike] My wife calls that the Jumanji effect.

– [Paul] You know where that kid has been based on the trail of destruction that’s following him. So, very good. Yes. So takeaways from that session, please throw those in the chat. If you have something that was particularly poignant that you were… so yeah. Questions, let’s see here. Well, we’ll go back to some of the earlier thing about valuation Barbara asked, “Where do we find our in industry multiplier?”

– [Dave] It’s actually, it’s moving, it’s living and breathing every day. So you look back at X company versus so if your company makes 10 million in revenue and it’s in aerospace, you look at other companies that are in aerospace during that point in time and you see what they’re selling for. And that is the average multiplier. So I’ve seen that’s really cool. Not sure what just happened but I’ve seen companies in the med device space go for 10 times. I’ve seen 10 times and wow! That’s awesome. And 12 times and 15 times, and we’re seeing sometimes now 21 times. So really it’s what the industry.

– [Paul] That’s 21 times EBITDA and not revenue.

– 21 Times EBITDA, right.

– The multiplier.

– So it depends on companies that are doing what you do and roughly the size it’s much like selling a house. So if you have a house and it’s worth say $500,000 and your neighbor’s house is worth $500,000 and it sells for 600, well, guess what? Your house now it’s worth closer to 600 than 500 because it’s closer to your camp, so it operates very much like that. Does that make sense?

– Yep. It certainly does to me. I know when we sold our shop, we were… process took a year or more and we were definitely tracking kind of what average multiples were and what they… and that was definitely a bit of trying to timing the market well, when multiples were higher and trying to hit that point where you’re getting your exit right around that period of time. So Nick asked, “what is a common multiple for an aerospace shop?”

– For a sizable aerospace shop doing north of 7 million, between seven and 15 million dollar a profitable shop with an owner that has frontline managers that can run the shop without the manager there. I’m seeing anywhere between five and a half to eight.

– Yeah.

– That’s what the market’s doing right now.

– [Paul] That was the range that we were in when we sold ours. So Reid asks, “Are your classes, recordings, live or virtual, how do you deliver them?” And in fact that

– so that’s…

– something next slide or the slide that…

– I’d be glad I I’d love to talk about that. So we’re putting together, we’re building sets of courses to present online. We’re gonna be doing several zoom courses that we’re gonna be presenting through proshop as well as we’re doing some in-person. We’re coming up with 10 different themes and we’re picking some really cool cities, but we wanna make sure the themes and activities around those themes are not just a normal ho-hum education. So of course, proshop cares deeply about having a good environment and culture. And we want to have that with all the customers as well. So we want to theme these right, and be in the right cities. We have a few cities picked out and some different themes going. So we’re working on that’s coming pretty done soon. So we’ll be seeing that here probably in the next next few weeks, I’ll give information to you, Paul.

– [Paul] Yep. And we will pull all of you on the call, with survey of maybe some of your priorities of topics and even locations and places you can and will travel and we’ll get those put together. And then one of the questions that comes in here with that communication, how much can you improve it? If 12% is normal, right? If you put your frontline managers through a bunch of training and they really buy into that and they try, how much can you improve it?

– Well getting someone up to even 25% is night and day. And the primary lever for that is a desire to do better around communication, right? So you communicate more frequently, you become a better listener. You use the same language, once you’ve been through our training, we talk about terms that we might use in the workplace. So you have this common language around. I don’t think I understood what you just said or I understood what you said, and I’m gonna play it back to you. So the skills that we develop in the courses will get you to 25-30%. And while you may feel that that’s modest, it’s….

– That’s triple, That triple average.

– It’s just human nature. I mean…

– What you wind up doing as managers and as leaders, you find out different ways to communicate and different things you can bolt on your normal communication. You get that up to 50-60%. If you standardize how you communicate and you use a couple different ways of communicating to where you’re always playing that back, and you’re always making sure what’s understood, you can continue to drive that north. And when you reduce turnover and people get to know you and you get to know your people, it really increases the communication too, doesn’t it?

– Yeah, sure. It does.

– Work with the same cast of characters on a regular basis.

– When Dave and I, we work together and he says something and because we have been through the communication skills class together so many times, I know when I don’t have understanding of what he just said, because I can tell by his body language, that’s not what I’m thinking. Right? I mean you learn to circumvent the break in the two-way communication model, by just saying time out. I don’t think we have understanding here. So that is just, it’s night and day.

– But as you dig into the communication course, there’s so much more than speech. It’s body language. It’s tone of voice. There’s so many different things. You got a little excerpt of that class, there’s a lot more to that class but you can drive that communication further and further north, drive that number much higher based on other things. There are sometimes that I’ll be sitting there at my desk going to work and Michael go on and say, “Huh, what’s going on?” Or, “Hey, you’re thinking this, aren’t you?” It’s almost kind of ridiculous. I’ve been married 29 years. My wife does, I walk in the room. She’s like, “Oh, so you’re thinking this.” So when you spend a lot of time and you work on that, that’s winds up happening. You get to read your employees and your employees read you. And that communication, the miscommunication goes way down.

– It really does. That’s a great question though.

– [Paul] Yeah, yeah. Yes. It is. Someone asked, “Can you elaborate on the team member rating concept?”

– The team member rating, yes. So again, it’s illegal now, but it tracks with the Gallup organization’s engagement levels as well. You have actively disengaged people who are stealing from you and running your clients away and maybe running your employees away. And then you have not engaged people. And they’re about 60% of your workforce, they come in and they do a job and they go home and they don’t go the extra yard necessarily. If you ask them to stay late, they may stay late but they prefer to just come to work and go home. And then you have maybe 10-20% of your workforce that’s actively engaged. And these are the people who are really pulling the wagon hard for you and you know who they are on your team. So they kinda overlay ABC players with the not engaged or actively disengaged, not engaged and engaged workforce. And you end up with a bell shape curve.

– So think of it this way. So as I went through looking at my employees, I looked at ’em and say, okay, I wanna look at attendance, I wanna look at quality of work, I wanna look at attitude, I wanna… you pick five or six things and you…

– [Mike] Flight risk.

– A flight risk, and you rate those employees one to five, where they sit you and you don’t just do it yourself, you pull their immediate manager, you might pull a coworker and you pull everybody together and say, okay, where does this rate, obviously the appropriate people that you pull together. And then you rate one through five and you go through these questions and you wind up getting, okay, this person’s a four and a half. This person may be a two on this. So what that does, it gives you, Hey, maybe I take Billy, or I take Sally through this training to help her get from a two or help him get from a two to a three or four or a four to a five. How do we do that? How do we bridge that? So we do encourage you to understand where your employees are rate your employees. So you know how to support ’em and how to help them grow to be their best self.

– Yeah. We do that exercise in the performance management course, but it is amazing how often we sit down with a business owner when we’re onboarding for coaching, and we go, let’s talk about your workforce and we’re gonna have these five criteria. And we want you to rate everyone in your company against these five criteria. And they go, “Well Susie, she’s a rockstar, actually she’s a one out of 10 in terms of flight-risk, she’s a nine. And you’re like, okay, she’s your rockstar? She’s a nine…

– She can’t leave.

– Yeah. What are you doing? Oh, nothing. I just hope she doesn’t leave. Well, hope is not a strategy. I mean, so the training really does dovetail with what we need to do on a daily basis in our companies in order to succeed and increase our profitability.

– Hopefully that answered your question.

– [Paul] Yeah. I think for sure it did. And Reid asked another I think very poignant one in his experience a good leader in this industry needs technical expertise, as well as a leadership jobs. And that’s a really hard thing to find as I’m sure you guys know, can you make an introverted anti-social machinist into a leader or can you take a naturally good leader in this industry without the machining Tradecraft?

– What’s the class we talk about cynics and cheerleaders.

– Yes, yes, yes. That’s… What course is that?

– I just totally put him on the spot.

– Yeah.

– That’s probably in the high performing team.

– So here’s the truth. I’m not a believer that a leader of a machine shop has to know all the technical stuff. I just, I’m not and this is why, cause a good leader builds a good team around them. And if you have, if you’re a leader of a machine shop, I’ve seen bankers buy machine shops and be very successful. Haven’t we Paul, right?

– [Paul] we have. So we see somebody that owns a machine shop and they take four or five people that are rockstar around them, builds, earns trust, and starts to influence them and teaches them the business side of it or the financial side of the business. And then they turn around and they lean on people and they trust them to be able to make that part technically. So the owner, when the owner has to make all the super technical decisions or all the technical strategic moves all by themself, then you have one person and that’s about 72% chance of doing it right the first time. And that’s risk. That’s 28% risk right out of the gey. So honestly, sometimes it’s almost better, I’ve seen it work really well, both ways. So a really technical person is very good if they can rely and trust other people and learn how to delegate. So it it’s kind of teaching somebody. So if you have a, I mean, I served in original German apprenticeship, I’m a tool and die maker by trade. And I was in that trade, I was raised by a curmudgeon if you’ve ever heard the term that was Hans and that’s how I grew up, me in the file and…

– [Mike] He’s waiting for you outside right now.

– Him smacking me with the file when I didn’t fly straight. So it was, but at the same time, he was really good to me. I felt like one of his children growing up but he wasn’t that good with the masses. So you wouldn’t want him in charge of a lot of people, And then there was another guy named Chris that ran the shop and he wasn’t the most technical minded person, but he got everybody to follow him in the direction a shop needed. And when someone had a really good suggestion, how to make something or an adjustment needed made, he would listen and trust them and go that direction. And then so more people contributed and the better the shop went. So I’ve seen phenomenal moves both ways but to have very technical and a very good leader at the same time, it’s not super normal. So those people really have to invest themself and really take training and take time to do that. So the cynic, the curmudgeon tool-maker is really important when you need a really, really hard part made and we all know that. You want someone that can be there and make sure they get the print, they understand the program, they understand the setup, they understand what tooling they need. They know how to put this thing together, fix it and get your true position of throw something crazy out there. Three tens, get it nailed down because only one person can do that. You need that person every once in a while, especially when you’re making a really repeatable fixture, right? But they may not be the right person to lead 15 other people.

– Yeah.

– [Paul] Very good.

– Henry does make the point that a frontline leader like a shift lead or an area lead does need to have good technical savviness and ideally they’re gonna be a good leader. So their shift or their department, really gets behind ’em and they work together cohesively as a team.

– And those are the people you really invest in you. Those are the people you read, you’re 100%, right? And those are people you invest in and you teach them more and more how to talk, how to communicate, how to execute, how to delegate. And as you lean into them and teach them, you wanna make them the best frontline leader you can.

– [Paul] Absolutely. Awesome. And then Gary, through in here, I’ll just share it out for everyone. Apex APICS currently known as the association with supply chain management. It’s a non-for-profit international organization offering certification programs, training tools, and networking opportunities to increase workplace performance. So yeah, it’d be interesting to look, to see what the criteria are for their train classes and see if yours might slot in there and align with some of their needs. So thank you for that. Alright. Let’s go back to our slides. We just have a couple more and I think we’re, our timing is just about perfect here. So again,

– [Dave] There’s some…

– [Paul] Summarizing and I think you have to click again to have them show up but if you guys would just kind of summarize again what we’re talking about and maybe a little bit of what that looks like, like the coaching, for example.

– [Dave] Yep. First service we offer. We always point to coaching first. The business would be a picture of this tree here. So say your business is this tree whether big or small or just starting out or very mature. So one on one coaching, what the coaching looks like is we all get stuck working in the business all the time. We call it the whirlwind. We talk about it a lot because you always have something coming up. So what coaching does is we help form, we come out, we spend a day with you on site, we build these five plans together, we formulate this report and then we go back to a month over month over month because we have a year plan. And we talk about that and you pay us. So we force you to work on the business. So we have two two-hour classes every month where we talk about finance, sales and marketing on one class and on one call, on two-hour call. And on a second two-hour call, we talk about operations and a management succession plan and HR. So we have two, two-hour calls about every other week is the standard. So yep. You’re, you’re talking to us every other week. And there are times that you reach out and you say, “Hey, this is a question I have and this is what’s going on.” Or, “Hey, I had this really awesome machine.” You’re excited, so it’s that relationship. So you have the five plans that drive you in a direction, but you also have a group of coaches that stand behind you and support you. And if you have a question or something else to guide you through that and that’s where coaching is. The next thing is fractional controller or a fractional CFO or controller, depending on where you are in your business. Sometimes you need a CFO because you have a good bookkeeper and you have a good CPA and you’re a big enough shop. And you need a CFO-type decisions. All of our resources there can do a fractional CFO work. And then the controller work is more of the basic, Hey, here you go, here’s the data, it’s a smaller business and whatnot. So, and that resource comes alongside you by blocks of time. So you have a silver golden platinum level. And during those blocks of time, depends on how many hours you want. And that person can generate a report that show you exactly what your cash flow statement looks like, what your DSOs and DPOs look like. Which means basically how fast you pay bills and how fast you collect money and how to cash forecast according to what DSO and DPO is. And really look at your ratios of your business to tell you is your business healthy? You know, your CPA can tell you when your taxes are gonna, what your taxes liabilities is gonna be this year. Your bookkeeper’s gonna go ahead and make sure everything’s in the system, hopefully very accurate and complete, but your CFO and your controllers gonna say, okay, this is the health of your business and this is how to navigate that. And that’s much like, so the one-on-one coaching is much like the sun and the rain and the fertilizer for your tree. The fractional CFO and controller is much like an arborist, if you will. So and says, “Hey, prune that.” ” Hey, let that area grow.” “Hey, it needs this.” And the training development’s much like the roots of your tree because you really need training and developing your frontline resources to prop that tree up and to hold it steady when storms come around because in business we all know we’re gonna face a storm. So you invest in your people. And honestly, we talk about employee retention, investing in your people with training development and classes. It’s key to keeping your people engaged and keeping your people coming to your shop. So those are the three services, they’re three separate services that we offer through proshop. And there you go.

– [Paul] Yeah. And Gary asked a question, “Are those three areas available singly or is it by package only?” And it is single. You can use whatever service you want. Like I said, we have a couple that are probably gonna be signing up for the fractional CFO very shortly here, but they may not, engage in the training classes for coaching, for example. So, yeah, definitely.

– Absolutely. So we love stories. We love stories. So…

– [Paul] Yeah. We have four minutes for stories, Dave.

– [Dave] Okay.

– [Paul] Do your best.

– So we know a gentleman, we love him dearly, we met him and he had a second mortgage on his home. He had a credit line on his house a credit line in his business so it was maxed out. He had a $40,000 payroll coming. He had $20,000 in the bank. Met Mike at a show and they were talking and he stepped down on a limb and invested a little bit in coaching. And you think, Oh boy, best thing you can do when you’re outta money is invest in consulting or coaching, right? So he did and that business may have been worth kind of an asset sale close to about a million dollars. And he just sold for over six without any debt house, credit line, everything paid off and a lot of cash in his pocket and the relief of being able to walk away from stress and whatnot and still being part of the business and taking money off the table. That’s one story, outta many, many stories we have. But when we say impacting lives through improving business and performance, there’s nothing that brings Mike and I more joy than to really share what we know and what we’ve learned with somebody and help them reach their goals.

– And these three examples on the slide before you, these all were in an 18 month timeframe. So this isn’t smoke and mirrors. This isn’t, …and then a miracle happens. This is, we just kind of get down to the basics as it relates to the great game of business in your company. And we pull the levers that we need to pull to get you back on track and then you guys do what you do. And it’s very rewarding for us. And it’s very rewarding for our clients.

– [Paul] I love that you guys,

– Did I use the four minute Paul?

– Yeah, you did a great job and yeah, I can. And this is why, just hearing these stories and the passion these guys bring is one of the reasons that we are just so excited to partner with them. You know, we have similar stories, maybe not quite as impactful but just talking to a client recently, first time in his life, he and his wife, both in the business making six figure salaries, right? Used to be just barely squeaking by, barely making payroll and that was just by using proshop and with additional coaching and training and I just wanna plug the fractional CFO for a second because so many shops have no real good way to do job costing. And that there’s a bunch of things that need to all come into play for job costing to work well. And it’s one of the most essential things for a shop to know is which jobs are making money and which shops are not, which clients are profitable so they can make those conscious decisions to get rid of that, 20% of jobs that are causing 80% of their losses and the impacts to making those smart decisions are just so huge. So yes. So little bit of inspirational slide here. Imagine if doubling the profit of your business, doubling the valuation of your business, what does that mean for succession planning with your team, with your kids, with selling the business, whatever it might be, these are real important things. You know, most, every shop owner I know has put their blood, sweat, and tears for decades often into these businesses. So having that, be able to help them realize their goals, realize your goals hugely important. So, yeah, well, we kind of did the Q & A, there will be a recording, Chris. Yes. So yeah, we will share the recording of course, as we always do, it’ll also be in our video library on our website and last slide, I think and we’ll wrap it up right at the top of the hour here, so yes, please reach out. We have a new email [email protected] or you can call our 800 number, but yes, thank you Mike and Dave so much for your time today. Thank you, everyone that joined us, appreciate all your great questions and engagement. This is obviously a really important topic, how to have our businesses to succeed. So hopefully you learnt something today and yeah, we’ll look forward to hearing from you all and reaching out with the recording and continuing the conversation. So thanks again, you guys. All right. Take care everybody. Have a good rest of your day.

– Bye bye.

– Thank you.

– [Paul] Bye.

– All right. We are live. Let’s see, people are starting to stream in here. Nice to see all of you. Let’s see. I would love to have you all share in the chat where you are joining from. I can guess based on some of the names that I already know, but there’s a lot of folks I do not know here so welcome Alan and Austin and Casey and Chris and Dan and David and Greg and Greg and Jay and John and Mary going on and on. Yes. Drop in the chat if you would, where you are joining from so people can see. Vancouver VC very good. Ripley, New York. All right. Nice, fantastic, Alan Hartman, Yes, Houston, fantastic. Anaheim, every corner of the country, Wisconsin and Salt Lake City. There we go. Really nice to see you from Ogden, Berlin in Connecticut, Chicago, OCA, Florida, Cleveland fantastic. All right, well welcome everyone. Thank you for joining me today. I could not be more excited about what we’re gonna be talking about today. I know we have many clients on this call and we have many that are not yet clients, a little bit presumptuous of me, but this, what we’re talking about today is really kind of an evolution in the proshop ecosystem and what we’re bringing to the market and what we’re bringing to customers is something that we’ve long wanted to do, but haven’t had the resources and a way that we could do it. So I’m excited to talk about what we doing today. What we really are talking about is what we are calling the ProShop Profit Growth System. And we are gonna be laviging basically our software along with some additional services to really, really help customers maximize profitability and growth and scale and really get everything dialed in with their company using kind of proshop as the background, the tool for doing that. So let us, let me move ahead here. So I’m gonna be joined today by Mike Watkins and Dave Capkovits from EBITDA growth systems. These are two gentlemen that I have gotten to know quite well over the last many months or the last really year. We even had a really great session. Couple few weeks ago, Kelsey came down from Vancouver. We sat here in the office for two and a half days, and just brainstormed and talked and shot videos and talked shop. It was a ton of fun. So these guys are gonna share a little bit today about what we are offering as a team through the proshop system and ecosystem. So as I was reviewing this mission statement, this is our proshop mission statement. I realized that we probably might need to change this word software into solutions because what we really are doing here today is branching out beyond just software itself, but into services and coaching and other things that are really crucial for shop owners and for shops in general. You know, I think most everyone on this call can probably relate to the fact that just cause you’re a really great machinist doesn’t mean you’re gonna be a great shop owner, right? There’s so many things to know about running a business. I learned that the hard way we had a ton of struggle in the early years of pro CNC, it was just challenging. You know, we didn’t know what we were doing. We learned it the hard way through lots of trial and error and mistakes. So having people that have have gone through those trials, have walked in your shoes can be just such a huge benefit to doing things better and easier. So why are we introducing this today? We always get these kind of comments. You know, we love proshop. It’s been fantastic, but we need more help, right? We need some guidance, we need some coaching. we need some additional training on running the business, not just on running how proshop works. And we desperately wanna do all that, we’ve wanted to forever but it’s just not been super accessible because we just are capacity limited, right? So when we got introduced to Mike and Dave and their team at EGS and saw their brand promise which we’ll talk about a little bit later, we just had to know more we dug in and it was just exactly what we were looking for. So I’m gonna stop my share and let Mike and Dave take over the screen share here and we’ll dig into what we’re doing here today. And then Mike’s gonna give us a little bit of a sneak peek into two of the classes, a mini version, just a few minutes long each as to some of the things that you can expect from that process. So you guys wanna start sharing your screen and take us away from here.

– Don’t look so serious, Mike.

– Yeah. Yeah.

– There we go. That’s the one.

– All right. Well I gotta say something. Our brand promise said EBITDA of growth is the impact live through improving business performance. And when we met Paul and started talking with Paul and then we got to sit down with Kelsey, it’s amazing, the synergies between our companies and we couldn’t be more excited that to partner up with a company like proshop. I’ve had a lot of exposure, different E R P systems and it’s definitely one that I would endorse wholeheartedly. So we are super excited, Mike.

– Yeah. Let’s jump right into their services that are available.

– Yeah. Right on. There’s three different services that they we’re offering through this system. Number one is profit coaching. We’ll talk a little bit more about that next slide. And then there’s a fractional CFO or a controller, depending on how much you need in your business and then training in development classes.

– Alrighty.

– So profit coaching is it’s really, it’s having the right dust-free mirror and it’s the key to profitable growth. It’s having somebody come alongside you and have a good discussion into where you have your thoughts, you express your thoughts and someone comes back to you and spends a little bit of time with you and walks through this. Go on the next slide, Mike. We really talk about building five plans. You know, you got a management plan, you start with a strategy, a strategic plan. And off that you have a management plan. You have a marketing plan, a sales plan, a financial plan and operations plan. And we help you build those plans. And as, as we build those plans, the magic really happens by having a coach beside you and navigating those plans. When life throws a left, a left turn at you, how to navigate that, how to keep guardrails to make sure you stay on track and make sure you continue really nailing down your goals. So as a shop owner myself, I owned a shop for 16 years and I loved it but it was lonely at the top. I didn’t have someone to talk to when I needed somebody at times. And navigating those plans. We have over a hundred years experience between our coaches running shops.

– Yeah. I have two years and Dave has 98.

– More than just us come on.

– [Paul] I wanted interject just how important it is, what you just said. When our company was young, when pro CNC was only four years old, 9,11 happened and we were not prepared for that. And we almost went out business ourselves and it was until we got a business coach who held up that dust-free mirror. And we started looking at what we were actually doing and what we needed to do. I still to this day credit him with helping us save our business from going bankrupt. So important.

– You know Paul I could talk about this for the entire hour. I remember some really dark times when I owned my company and a lot of mistakes I made that I didn’t need to make and where I’d be today if I had a coach earlier in my career. I’m very thankful for the men and women to stepped in and really spoke a lot of truth into my life and helped me out and helped me grow to the man I am today and the business owner I am today. But boy, this is a passion for Mike and I, because if we were to reach back in our past, if there was one thing we could contribute that would’ve changed our lives dramatically was to have somebody come alongside us. So that’s our passion, that’s our drive, that’s what we want to do. And because of that, we’ve noticed a trend. And after about 16, 17 years of trending and taking a look at what Mike did in his business, I’m unfortunate to be a part of it in the last three years. We doubled the value of your company within three years, we guaranteed it because we’ve never not done it. We haven’t found a situation where we haven’t and it’s great. So we hanged our hearts and we guaranteed a double evaluation of your company in three years. That’s one thing we stand on and one thing we promise and one thing we always hit generally much sooner than than three years, but it’s pretty awesome. And moving on quickly, going into the financial, the fractional CFO and controller. This is a dedicated CFO or controller resource to you. It’s really all about having a resource that demystifies your financials. You have your bookkeeper and they roll everything into QuickBooks or Sage or whatever accounting system you use. And then you have your CPA that really preps you for your taxes and Mike you’ll talk a little bit more about that but it’s all about how having a resource that demystifies you and demystifies that for you.

– Yeah, yeah. This slide is designed to exhibit that confusion that happens between your bookkeeper, who’s working tirelessly to make sure they capture all your financial transaction and then at the end of the year, you’re CPA some kind of way files your taxes based on those transactions that the bookkeeper entered into the system but you don’t know what’s happening in between there. You’re counting on your bookkeeper and you’re counting on your CPA. And with our fractional controller, fractional CFO service, it’s our intent to bridge that gap and to have your financial data be available to you, telling you this story about how your company’s doing. So you can make some business decisions from a budget standpoint, a forecast standpoint, a cash management standpoint. These are the things that, these are the decisions that you make that will have a significant impact on your profits. And if you’re not mindful of those decisions, they will be made for you through the activity of your business, and they can really impact your profitability.

– So in owning a small machine shop, I wish I had someone to help me roll up a budget. I wish somebody that would have helped me roll up forecasting cash, understanding my DSOs and DPOs. I wish cash management, making sure I had those things in place to make sure I’m driving in the right direction with the profits coming in the door or the non profits coming in the door and how I manage that properly and how I could get myself out of that. And this is a service we offer that really is the tremendous help in that regard.

– When you guys…

– I wanna add… go go, I’m sorry

– [Paul] Yeah. When you guys told me about this and we started talking about offering it through proshop using proshop as sort of the back-end tool generating the numbers, within less than a week I had two or three clients just out of the blue reach out to me and say, “Hey, we could use some help on the financial side, right?” Getting the back-end of proshop dialed in really dialing and job costing, budgeting. And so I know that there are a huge number of our clients that really could use a service like this. Again they have competent bookkeeping help. They keep the books kind of clean ish but making those some more strategic bigger decisions are just really difficult and they could use that help. So I just thought it was funny that I had two or three people just completely outta the blue say, “Hey, I need some help here.” And the timing couldn’t have been more perfect.

– And Paul, the idea here is a fortune 100 company will have a full-time CFO and they’ll have a full-time controller, but a small, the medium sized business needs some of those same services, some of those same support mechanisms, but they just don’t need it full time. They need 10% of the time or 15% of the time. And that’s the whole concept of a fractional resource for financials.

– [Paul] Yeah.

– And we didn’t talk about training and development. There’s three legs to our stool; there’s coaching, there’s a fractional CFO and obviously trained development, which you’re gonna get a nice taste of today from Dr. Mike Watkins. it’s these powerful training sessions really written for you, a machine shop owner, for a layperson that’s really, that’s involved in their business. Something that’s easily absorbs, something that you can take and apply day one, something that you can take your frontline leaders and lean into them because all of our training is all about the leadership and your frontline managers. And it really helps because as you have a business, you have a rope and the owner’s pulling in one direction. And the goal for the owner is to get everybody else in the shop pulling that same rope in the same direction because many hands make light work, right? So this is all about helping the business and driving it in the proper direction.

– All right. So today we’re gonna do excerpts from two of our courses, and these are gonna be brief excerpts to give you a taste for what the training looks like, what it feels like. And to Dave’s point, our training is designed to help that frontline manager pull the rope for the leader, for the business owner and to help create that culture, that the business owner is attempting to bring to his company or her company. So this slide shows the 36 courses that we offer to our clients. And they’re broken down into six different tracks, if you will. And today we’re gonna talk about two courses, high performing teams out of the leadership and development track, and then also masterful communications or effective communications out of leadership development track. So let’s jump right in. High performing teams. Love this slide

– [Dave] It’s cause you race cars.

– [Mike] Yeah, yeah, yeah. So we start every course with the learning objectives. Like at the end of this course, the participants will know how to do these things. This particular course has five learning objectives, but we’re only gonna touch on two of today as we do an excerpt of the entire class. And that is; describe the characteristics of high performing teams and then talk about the team building process. So what does a high performing team look like? That’s the first question and when I was writing this content, I wanted to know the answer to that question. So I did quite a bit of research and I ended up with a compilation of ideas and data. And this is what a high performing team looks like. First of all, the selection of team members is crucial. And so if I have a little astronaut and I can’t believe it still but when they decided to bring on the next class of astronauts, there are 18,300 applicants and they selected 12. So for an astronauts selection of team members is crucial. In my research, I found that Navy seals had the same really difficult application process. You know, being a fighter pilot, there are all kinds of professions that require only the best to be selected, to be a part of the team. And then a second thing that made high performing teams high performing teams is the willingness to get rid of members who don’t consistently meet the goals and objectives of the team. And when we deliver this training Dave, we always do the ABC and the neutron Jack. So once a year at GE, Jack well said, we’re gonna divide our workforce into A players, B players, and C players. And if you’re a C player you get fired and that’s 10% of the workforce every year had to get fired. And then the federal government said that’s against the law. So they stopped doing it but the idea was, okay we need to get rid of the people who aren’t pulling the wagon for us and replace them with new people.

– So what happens if you’re really sympathetic and you just love your employees but you have somebody that doesn’t pull the rope at all but you keep ’em around.

– Yeah that’s typically what happens. And so Jack said, I’m gonna take it out of the hands of the managers because my managers are poor. They’re not making the decisions they need to make around people who aren’t pulling the wagon for us. And so I’ll put a system in place that will get rid of that 10%.

– So imagine a Navy seals’ team and one of your seals being a very, just a low performer, imagine what that does. That’s a life and death situation, right?

– It is a life and death situation.

– Really impacts the team.

– Absolutely.

– That’s a tough one.

– Yeah. And so in a Navy seal scenario, they typically self select. I mean they, “I love your man, but you gotta go because my life is on the line.” But a third element of a high performing team is they have a manager who supports and builds confidence for the team members. And in my estimation, that’s the most important, certainly selecting the right people is important and getting rid of people who can’t pull the wagon is important but it’s the manager who who’s making all these decisions. And so we really focus on the development of frontline managers because that’s the foundation for the rest of the company.

– [Dave] It is tremendous what we see in shops across the United States when a manager engages the workforce and walks around the shop and pays attention to the people and ask ’em how they’re doing and pays attention to how they’re doing and what’s happening and their family.

– Sure.

– You don’t have to know all the details but the fact that you walk around and let your team know you care, it’s amazing what that does for the team. We’ve seen it. We’ve seen time and time again.

– Yeah. And I guess the important point to make here is that according to the Gallup organization, 14% of people are gonna be naturally good at managing other people. Which means that 86% of people aren’t good at managing people. And it won’t come naturally for them and they need to be trained. And there are people who have gone their whole careers and never had a good manager. So don’t let that happen within your company, have your frontline managers being responsible for the care and fitting of your individual contributors but they don’t have the skills they need to do that.

– Yeah.

– Good, good. And then finally, the stress that defines the work is what makes people want to be a part of these high performing teams. And I think your average machine shop is a stressful place. And the stress associated with, are we gonna win or are we gonna win? Is part of what makes people want to do that work. So what does a high performing team look like? These are some of the descriptions of the elements of a high performing team. A second topic we talked about are the stages of a team in this high performing team course. And the way it works is a team is formed. And shortly after they’re formed, they go into storming. And if they’re lucky, they come outta storming into what’s called norming. And this is usually where teams hang out in norming from time to time, they actually get up to performing and performing is they lose track of time. They’re winning in such a big way that they’re in flow.

– [Dave] They are in flow.

– Yeah. If you’re a basketball player and you can’t, you just like, “Gimme the ball cause I can’t miss.” or that’s my metaphor. If you’re skiing and you just lose track of time, you’re in flow and a team that’s performing is in flow.

– And I like to reference lane frost the professional bull rider and his dad would reach out to him. Of course he’s looking for his dad’s approval and his dad said, “Staying on top is the real continual challenge. Getting on top is one thing but staying on top is another.”

– Yeah.

– Because once you’re performing, if something goes sideways, you don’t go back to norming. You go all the way back to storming again.

– Absolutely.

– And then you go through that norming and back to performing and that it’s like a loop, but the more you work on that, or you work on performing the team it’s amazing to see how teams can really fly.

– Yes, yes. And the reason why teams going to storming is because everyone’s trying to figure out what their role is, everyone wants to do a good job and everyone wants to be the man or be the woman and so don’t step in my territory here. This is my… That’s why you have this storming going on. And if you can work that out, then you get to norming, but you go back to storming because something happened, someone quit, you hired a new person, but everyone’s trying all the chairs on the deck gets it shifted around again. So the most important thing from a management standpoint is to understand where your team is in the forming, storming, norming, performing continual, and realizing your actions in storming should be way different than your actions in performing as a manager.

– [Dave] To navigate.

– [Mike] So you have to know how to navigate that. So

– [Dave] That’s a great taste of that course, Mike.

– Yeah, yeah. It’s fun stuff. Good, good.

– [Paul] Good stuff, guys. Hey, I wanted to stop for a quick second so for those attendees on the call today, I would love for you to put in the chat. What was your number one takeaway from what Mike just shared? I know for me I get to look inside of so many companies that we see some brilliant really great ones and we see some that are not so great. And so I definitely can see companies that actually get stuck in that storming area. Maybe some norming a little bit but it’s all coming down to leadership, right? They don’t have leaders that are aligned that have clear vision that really set a goal and stick with it and that can be tough for people. So that was one of my takeaways. I’d love to see, yeah. If anyone would like to put in the chat, what was your number one takeaway from that, love this, we’d do this at one of software coaching programs that I’m a part of. And it’s always fascinating to see what people put as their takeaways in the chat. While we’re waiting for a couple those to come in, there were a couple of questions, which we can do real quick here, before we jump into your next class.

– Okay. So Reid asked, “how do you measure valuation?” And probably related to your brand promise, how do you measure valuation?

– All about EBITDA? It’s all about your net profit and you help it back to appreciate amateurization taxes, but it’s, you take your EBITDA and based on the market you’re in, you get a multiplier of what your business is worth. And so you have a volume of revenue and the market you’re in, and then how much EBITDA you have, and that multiplication gives you your value. It is not how much your equipment is worth, unless you’re looking to… unless you’re looking to liquidate and that’s not selling business, that’s selling assets, right? So, but that’s how we measure

– Yeah and..

– We measure that.

– And on that, on that EBITDA multiple, you’ll hear it referenced as the EBITDA multiple, you can plus it up or you can minus it. For example, if you have a company where the owner hasn’t been there in six months because it runs on its own,

– That plus it up

– That plus it up.

– But if the owner owner is the chief cook and bottle washer and nothing happens without the owner touching it, that plus is down.

– Great, that’s right.

– [Paul] Yeah, for those that may not have seen it, last September, we did a mini conference with modern machine shop magazine on machine shop ownership change. And Dave was one of the panelists. And we definitely heard from people that had very different experiences with what a company was worth and what they were willing to pay for a company based on those same exact variables. So…

– Yeah. And Reid your question was do you double the valuation or do you double the EBITDA and the…

– [Paul] Multiply the EBITDA.

– Yeah. And those are almost anonymous.

– Yeah. Yep. It’s actually both, you look to double both, you look toward how do you increase your multiple at the same time you want to increase your EBITDA cause EBIDA is money in your pocket. It’s all about putting money in the owner’s pocket and helping them along dispersing that with either whether it’s donations or giving back to employees or something for the culture, right? So they’re both very important and you work on both those at the same time.

– But Dave will tell you also that the multiple for… if you’re doing auto parts versus the multiple for…

– Aerospace.

– Aerospace, or robot assisted surgery, those multiples vary based on the industry that you’re in.

– Absolutely.

– [Paul] Well, there’s lots of questions about valuation not surprisingly. We’ll save some of those for the end. And I would also request and suggest for actual questions. Please put them in the Q & A as opposed to the chat. It’s easier for us to keep track of those and we’ll make sure we can get to those at the end. But another one that was in the actual Q & A section, does your training run parallel to the apex certification journey?

– I’m not familiar ICS,

– [Paul] with ICS.

– so I wouldn’t say yes. I’m not sure what that is.

– [Paul] Okay.

– The training that I’m showing you this morning is really management and leadership development training as opposed to any industry specific training.

– Yeah. Our training isn’t bought, we have made this training and we’re making it available for proshop customers. So this isn’t something that’s bought off the shelf. This is something we’ve lived, eat, breathed.

– Yeah. We’ve delivered it in seven countries over the course of 25 years.

– [Paul] Awesome. And for those proshop clients starting in the next release or two, the descriptions and links and everything for these trainings will actually be right in the training module within proshops. You’ll be able to just browse the library, see descriptions, maybe a middle of video and then launch into getting those if you want. But all right, let’s move to your next class. That’s all the questions, right?

– So the next class we’ll talk about is masterful communications and every company, every relationship. I mean, I dunno, effective communication touches every aspect of our life, but it’s really important for a frontline manager to have some effective communication skills, because what happens is if the manager has good communication skills and the individual contributors will model those good communication skills. And that’s how it gets spread throughout the organization. If you, the owner has really poor communication skills, it’s gonna be difficult for the rest of your organization to have good communication skills. So it’s pretty important. So again, five different learning objectives for this particular topic but the two that we’ll talk about today are the two-way communication model, and then understanding some of the limitations of the two way communication model. So if we jump right in, these are three quotes that I just love about the concept of communication. And the first is that the enemy of communication we find is the that it’s actually taken place. And I don’t know if you, if you’ve talked, if you have a teenager and you’ve expressed your sentiments to a teenager, and you think that they understood it, the chances are pretty high, that they didn’t, you’re under the illusion that you communicated with that teenager.

– [Dave] Been married 29 years. And I’m still under the illusion every once in a while, the communication has taken place where my wife is.

– Yeah.

– My wife’s. Yeah.

– It’s usually that way around. The wife thinks she’s communicating something to me. And then at the end of the day, “Hey, did you get that done?” And I’m like, well, how am I supposed to know I should get it done? You didn’t tell me, “I told you this morning, you noded your head.” It’s amazing.

– Yep

– It’s Amazing.

– Now that was my cereal Cause I was like my cereal, Right?

– Right. And then the second to that quote is, communication isn’t the objective of good managers. Communication is not the objective, understanding is the objective. So that’s what happens. We talk, we talk, we talk and we assume that communication has taken place. But what we’re really looking for is for them to understand what it is we’ve said, and that we understand what they have said. And so a big piece of understanding then is effective listening skills. And we spend a great deal of time in this communications course talking about the impact of good listening skills. So here we have the two-way communication model and it’s pretty straightforward. You have a source and the source might be me and I have a message that I’m gonna encode and encoding is language obviously. And then the message has to go over a channel. And that might be the telephone, that might be an email, that might be in person but there’ll be a channel that I use for that, for that message. And then the receiver is gonna decode that message and then provide the source with some feedback. Like I understood your message or I didn’t understand your message and that’s the two-way communication model and really what could go wrong in something so simple You know that becomes a question. And all I have to do is tell you that if you were to fire someone using a text then you have violated the two-way communication model, because text is not a good channel for communicating the fact that someone is fired.

– [Dave] Yeah. Just the fact that some people read a tone in text messaging.

– Sure, sure.

– [Dave] I mean how many times has that gone different? Cause if you’re an owner and you send a message via email or text often times, owners are task-minded, you are getting something done, they send something very direct to an employee. Whether it’s an email, it read like why you’re being harsh or you’re being aggressive. And it’s like, no, no, no, I just need this done.

– Yes.

– So sometimes owners need to go back and maybe put an entry line in their email or something special at the exit line just to make sure that the employee really understands the emotion behind that. Well cause that could tear it up.

– Right. Dave spoiler alert, email and text are terrible communication mediums. And as business owners we should use those sparingly. Okay. So this two-way communication model you can see that it’s fraught with some difficulty, but how bad is it? This guy Osmo Wiio he’s a Finnish researcher. He’s also a really funny guy but his research indicates that the two-way communication model works less than 10% of the time. So less than 10% of time, we think that we’ve communicating something, but understanding doesn’t happen, understanding happens less than 10% of the time. And again all you have to do is think about someone who’s very dear and near to you, whomever that might be, a child, a significant other or whatever. And you’ve expressed something to that person. And they got something entirely different. And it’s because the two-way communication model really breaks down in so many different ways.

– [Dave] Yeah. And all his research the highest number that I saw and everything was up to 12%. Yeah. Up to 12%. So if you think about, think about that communication, best case scenario, you’re really around 12%, man. It’s so it’s like you said earlier, it’s all about understanding not just communication. It’s communication and verification. Good. What you said.

– Yes. Yes. And so you’ve said something and if they’re a poor listener and then they said something back to you and you’re a poor listener, that’s where it just falls down and all of this…

– Say something, the other person just nods their head.

– Yes, yes. And you’re like, huh, I wonder what’s gonna happen.

– And it’s getting worse, Dave, unfortunately because of our fast-paced lives and we have so much going on and this is one of the major reasons why the two-way communication model breaks down, we have all these distractions and it looks like this. I’m gonna give everyone a 10 seconds to read this slide. And you’ll find that you can read it, there’s letters missing, and they’ve been transposed, but we can still read this. And the reason why we can read it is because we fill in the gaps, mentally we fill in the gaps. But unfortunately when we sit down to talk to someone, we do the same thing. They open their mouth, they start on a topic and we fill in the gaps, “Oh, I know exactly where you’re headed with this.” “And I’m good now.” And then now you’re thinking about the grocery list or whatever and you missed so much of what was communicated because you were distracted and you just filled in the gaps and more often than not you’re wrong.

– [Dave] Yeah. And a quick one is if, you have been talking to a manager Mike, and talking to the manager and while you’re talking to them saying something really important of their phone buzzes and they pick up a text in a middle of a conversation.

– Yes.

– And you’re like, but I’m telling you something important, but this text is more important to the manager.

– Absolutely. And how’s that make you feel as an employee or Partner?

– It makes you feel like, Hey, I’m just gonna check and see if this is a better deal than the one that’s sitting in front of me right now. Is really what they’re telling you.

– So just like I said, distractions, something we can manage.

– Yep.

– For sure.

– Very good. All right those were the two excerpt.

– Do you have any questions on the first class? Paul, do we want to… any other questions or anything?

– [Paul] There are some other questions. Yep But I just wanted to say, I was glad I was on mute when you mentioned the teenagers, because I cannot tell you how many times I have talked to my 16 year old. When you pour yourself a bowl of cereal in the morning, please make sure there’s not a spill of milk and Cheerios all over the floor every single time. And he’s like, okay, I’ll do it. And then the next morning there it is again. So…

– [Dave] There you go.

– [Mike] My wife calls that the Jumanji effect.

– [Paul] You know where that kid has been based on the trail of destruction that’s following him. So, very good. Yes. So takeaways from that session, please throw those in the chat. If you have something that was particularly poignant that you were… so yeah. Questions, let’s see here. Well, we’ll go back to some of the earlier thing about valuation Barbara asked, “Where do we find our in industry multiplier?”

– [Dave] It’s actually, it’s moving, it’s living and breathing every day. So you look back at X company versus so if your company makes 10 million in revenue and it’s in aerospace, you look at other companies that are in aerospace during that point in time and you see what they’re selling for. And that is the average multiplier. So I’ve seen that’s really cool. Not sure what just happened but I’ve seen companies in the med device space go for 10 times. I’ve seen 10 times and wow! That’s awesome. And 12 times and 15 times, and we’re seeing sometimes now 21 times. So really it’s what the industry.

– [Paul] That’s 21 times EBITDA and not revenue.

– 21 Times EBITDA, right.

– The multiplier.

– So it depends on companies that are doing what you do and roughly the size it’s much like selling a house. So if you have a house and it’s worth say $500,000 and your neighbor’s house is worth $500,000 and it sells for 600, well, guess what? Your house now it’s worth closer to 600 than 500 because it’s closer to your camp, so it operates very much like that. Does that make sense?

– Yep. It certainly does to me. I know when we sold our shop, we were… process took a year or more and we were definitely tracking kind of what average multiples were and what they… and that was definitely a bit of trying to timing the market well, when multiples were higher and trying to hit that point where you’re getting your exit right around that period of time. So Nick asked, “what is a common multiple for an aerospace shop?”

– For a sizable aerospace shop doing north of 7 million, between seven and 15 million dollar a profitable shop with an owner that has frontline managers that can run the shop without the manager there. I’m seeing anywhere between five and a half to eight.

– Yeah.

– That’s what the market’s doing right now.

– [Paul] That was the range that we were in when we sold ours. So Reid asks, “Are your classes, recordings, live or virtual, how do you deliver them?” And in fact that

– so that’s…

– something next slide or the slide that…

– I’d be glad I I’d love to talk about that. So we’re putting together, we’re building sets of courses to present online. We’re gonna be doing several zoom courses that we’re gonna be presenting through proshop as well as we’re doing some in-person. We’re coming up with 10 different themes and we’re picking some really cool cities, but we wanna make sure the themes and activities around those themes are not just a normal ho-hum education. So of course, proshop cares deeply about having a good environment and culture. And we want to have that with all the customers as well. So we want to theme these right, and be in the right cities. We have a few cities picked out and some different themes going. So we’re working on that’s coming pretty done soon. So we’ll be seeing that here probably in the next next few weeks, I’ll give information to you, Paul.

– [Paul] Yep. And we will pull all of you on the call, with survey of maybe some of your priorities of topics and even locations and places you can and will travel and we’ll get those put together. And then one of the questions that comes in here with that communication, how much can you improve it? If 12% is normal, right? If you put your frontline managers through a bunch of training and they really buy into that and they try, how much can you improve it?

– Well getting someone up to even 25% is night and day. And the primary lever for that is a desire to do better around communication, right? So you communicate more frequently, you become a better listener. You use the same language, once you’ve been through our training, we talk about terms that we might use in the workplace. So you have this common language around. I don’t think I understood what you just said or I understood what you said, and I’m gonna play it back to you. So the skills that we develop in the courses will get you to 25-30%. And while you may feel that that’s modest, it’s….

– That’s triple, That triple average.

– It’s just human nature. I mean…

– What you wind up doing as managers and as leaders, you find out different ways to communicate and different things you can bolt on your normal communication. You get that up to 50-60%. If you standardize how you communicate and you use a couple different ways of communicating to where you’re always playing that back, and you’re always making sure what’s understood, you can continue to drive that north. And when you reduce turnover and people get to know you and you get to know your people, it really increases the communication too, doesn’t it?

– Yeah, sure. It does.

– Work with the same cast of characters on a regular basis.

– When Dave and I, we work together and he says something and because we have been through the communication skills class together so many times, I know when I don’t have understanding of what he just said, because I can tell by his body language, that’s not what I’m thinking. Right? I mean you learn to circumvent the break in the two-way communication model, by just saying time out. I don’t think we have understanding here. So that is just, it’s night and day.

– But as you dig into the communication course, there’s so much more than speech. It’s body language. It’s tone of voice. There’s so many different things. You got a little excerpt of that class, there’s a lot more to that class but you can drive that communication further and further north, drive that number much higher based on other things. There are sometimes that I’ll be sitting there at my desk going to work and Michael go on and say, “Huh, what’s going on?” Or, “Hey, you’re thinking this, aren’t you?” It’s almost kind of ridiculous. I’ve been married 29 years. My wife does, I walk in the room. She’s like, “Oh, so you’re thinking this.” So when you spend a lot of time and you work on that, that’s winds up happening. You get to read your employees and your employees read you. And that communication, the miscommunication goes way down.

– It really does. That’s a great question though.

– [Paul] Yeah, yeah. Yes. It is. Someone asked, “Can you elaborate on the team member rating concept?”

– The team member rating, yes. So again, it’s illegal now, but it tracks with the Gallup organization’s engagement levels as well. You have actively disengaged people who are stealing from you and running your clients away and maybe running your employees away. And then you have not engaged people. And they’re about 60% of your workforce, they come in and they do a job and they go home and they don’t go the extra yard necessarily. If you ask them to stay late, they may stay late but they prefer to just come to work and go home. And then you have maybe 10-20% of your workforce that’s actively engaged. And these are the people who are really pulling the wagon hard for you and you know who they are on your team. So they kinda overlay ABC players with the not engaged or actively disengaged, not engaged and engaged workforce. And you end up with a bell shape curve.

– So think of it this way. So as I went through looking at my employees, I looked at ’em and say, okay, I wanna look at attendance, I wanna look at quality of work, I wanna look at attitude, I wanna… you pick five or six things and you…

– [Mike] Flight risk.

– A flight risk, and you rate those employees one to five, where they sit you and you don’t just do it yourself, you pull their immediate manager, you might pull a coworker and you pull everybody together and say, okay, where does this rate, obviously the appropriate people that you pull together. And then you rate one through five and you go through these questions and you wind up getting, okay, this person’s a four and a half. This person may be a two on this. So what that does, it gives you, Hey, maybe I take Billy, or I take Sally through this training to help her get from a two or help him get from a two to a three or four or a four to a five. How do we do that? How do we bridge that? So we do encourage you to understand where your employees are rate your employees. So you know how to support ’em and how to help them grow to be their best self.

– Yeah. We do that exercise in the performance management course, but it is amazing how often we sit down with a business owner when we’re onboarding for coaching, and we go, let’s talk about your workforce and we’re gonna have these five criteria. And we want you to rate everyone in your company against these five criteria. And they go, “Well Susie, she’s a rockstar, actually she’s a one out of 10 in terms of flight-risk, she’s a nine. And you’re like, okay, she’s your rockstar? She’s a nine…

– She can’t leave.

– Yeah. What are you doing? Oh, nothing. I just hope she doesn’t leave. Well, hope is not a strategy. I mean, so the training really does dovetail with what we need to do on a daily basis in our companies in order to succeed and increase our profitability.

– Hopefully that answered your question.

– [Paul] Yeah. I think for sure it did. And Reid asked another I think very poignant one in his experience a good leader in this industry needs technical expertise, as well as a leadership jobs. And that’s a really hard thing to find as I’m sure you guys know, can you make an introverted anti-social machinist into a leader or can you take a naturally good leader in this industry without the machining Tradecraft?

– What’s the class we talk about cynics and cheerleaders.

– Yes, yes, yes. That’s… What course is that?

– I just totally put him on the spot.

– Yeah.

– That’s probably in the high performing team.

– So here’s the truth. I’m not a believer that a leader of a machine shop has to know all the technical stuff. I just, I’m not and this is why, cause a good leader builds a good team around them. And if you have, if you’re a leader of a machine shop, I’ve seen bankers buy machine shops and be very successful. Haven’t we Paul, right?

– [Paul] we have. So we see somebody that owns a machine shop and they take four or five people that are rockstar around them, builds, earns trust, and starts to influence them and teaches them the business side of it or the financial side of the business. And then they turn around and they lean on people and they trust them to be able to make that part technically. So the owner, when the owner has to make all the super technical decisions or all the technical strategic moves all by themself, then you have one person and that’s about 72% chance of doing it right the first time. And that’s risk. That’s 28% risk right out of the gey. So honestly, sometimes it’s almost better, I’ve seen it work really well, both ways. So a really technical person is very good if they can rely and trust other people and learn how to delegate. So it it’s kind of teaching somebody. So if you have a, I mean, I served in original German apprenticeship, I’m a tool and die maker by trade. And I was in that trade, I was raised by a curmudgeon if you’ve ever heard the term that was Hans and that’s how I grew up, me in the file and…

– [Mike] He’s waiting for you outside right now.

– Him smacking me with the file when I didn’t fly straight. So it was, but at the same time, he was really good to me. I felt like one of his children growing up but he wasn’t that good with the masses. So you wouldn’t want him in charge of a lot of people, And then there was another guy named Chris that ran the shop and he wasn’t the most technical minded person, but he got everybody to follow him in the direction a shop needed. And when someone had a really good suggestion, how to make something or an adjustment needed made, he would listen and trust them and go that direction. And then so more people contributed and the better the shop went. So I’ve seen phenomenal moves both ways but to have very technical and a very good leader at the same time, it’s not super normal. So those people really have to invest themself and really take training and take time to do that. So the cynic, the curmudgeon tool-maker is really important when you need a really, really hard part made and we all know that. You want someone that can be there and make sure they get the print, they understand the program, they understand the setup, they understand what tooling they need. They know how to put this thing together, fix it and get your true position of throw something crazy out there. Three tens, get it nailed down because only one person can do that. You need that person every once in a while, especially when you’re making a really repeatable fixture, right? But they may not be the right person to lead 15 other people.

– Yeah.

– [Paul] Very good.

– Henry does make the point that a frontline leader like a shift lead or an area lead does need to have good technical savviness and ideally they’re gonna be a good leader. So their shift or their department, really gets behind ’em and they work together cohesively as a team.

– And those are the people you really invest in you. Those are the people you read, you’re 100%, right? And those are people you invest in and you teach them more and more how to talk, how to communicate, how to execute, how to delegate. And as you lean into them and teach them, you wanna make them the best frontline leader you can.

– [Paul] Absolutely. Awesome. And then Gary, through in here, I’ll just share it out for everyone. Apex APICS currently known as the association with supply chain management. It’s a non-for-profit international organization offering certification programs, training tools, and networking opportunities to increase workplace performance. So yeah, it’d be interesting to look, to see what the criteria are for their train classes and see if yours might slot in there and align with some of their needs. So thank you for that. Alright. Let’s go back to our slides. We just have a couple more and I think we’re, our timing is just about perfect here. So again,

– [Dave] There’s some…

– [Paul] Summarizing and I think you have to click again to have them show up but if you guys would just kind of summarize again what we’re talking about and maybe a little bit of what that looks like, like the coaching, for example.

– [Dave] Yep. First service we offer. We always point to coaching first. The business would be a picture of this tree here. So say your business is this tree whether big or small or just starting out or very mature. So one on one coaching, what the coaching looks like is we all get stuck working in the business all the time. We call it the whirlwind. We talk about it a lot because you always have something coming up. So what coaching does is we help form, we come out, we spend a day with you on site, we build these five plans together, we formulate this report and then we go back to a month over month over month because we have a year plan. And we talk about that and you pay us. So we force you to work on the business. So we have two two-hour classes every month where we talk about finance, sales and marketing on one class and on one call, on two-hour call. And on a second two-hour call, we talk about operations and a management succession plan and HR. So we have two, two-hour calls about every other week is the standard. So yep. You’re, you’re talking to us every other week. And there are times that you reach out and you say, “Hey, this is a question I have and this is what’s going on.” Or, “Hey, I had this really awesome machine.” You’re excited, so it’s that relationship. So you have the five plans that drive you in a direction, but you also have a group of coaches that stand behind you and support you. And if you have a question or something else to guide you through that and that’s where coaching is. The next thing is fractional controller or a fractional CFO or controller, depending on where you are in your business. Sometimes you need a CFO because you have a good bookkeeper and you have a good CPA and you’re a big enough shop. And you need a CFO-type decisions. All of our resources there can do a fractional CFO work. And then the controller work is more of the basic, Hey, here you go, here’s the data, it’s a smaller business and whatnot. So, and that resource comes alongside you by blocks of time. So you have a silver golden platinum level. And during those blocks of time, depends on how many hours you want. And that person can generate a report that show you exactly what your cash flow statement looks like, what your DSOs and DPOs look like. Which means basically how fast you pay bills and how fast you collect money and how to cash forecast according to what DSO and DPO is. And really look at your ratios of your business to tell you is your business healthy? You know, your CPA can tell you when your taxes are gonna, what your taxes liabilities is gonna be this year. Your bookkeeper’s gonna go ahead and make sure everything’s in the system, hopefully very accurate and complete, but your CFO and your controllers gonna say, okay, this is the health of your business and this is how to navigate that. And that’s much like, so the one-on-one coaching is much like the sun and the rain and the fertilizer for your tree. The fractional CFO and controller is much like an arborist, if you will. So and says, “Hey, prune that.” ” Hey, let that area grow.” “Hey, it needs this.” And the training development’s much like the roots of your tree because you really need training and developing your frontline resources to prop that tree up and to hold it steady when storms come around because in business we all know we’re gonna face a storm. So you invest in your people. And honestly, we talk about employee retention, investing in your people with training development and classes. It’s key to keeping your people engaged and keeping your people coming to your shop. So those are the three services, they’re three separate services that we offer through proshop. And there you go.

– [Paul] Yeah. And Gary asked a question, “Are those three areas available singly or is it by package only?” And it is single. You can use whatever service you want. Like I said, we have a couple that are probably gonna be signing up for the fractional CFO very shortly here, but they may not, engage in the training classes for coaching, for example. So, yeah, definitely.

– Absolutely. So we love stories. We love stories. So…

– [Paul] Yeah. We have four minutes for stories, Dave.

– [Dave] Okay.

– [Paul] Do your best.

– So we know a gentleman, we love him dearly, we met him and he had a second mortgage on his home. He had a credit line on his house a credit line in his business so it was maxed out. He had a $40,000 payroll coming. He had $20,000 in the bank. Met Mike at a show and they were talking and he stepped down on a limb and invested a little bit in coaching. And you think, Oh boy, best thing you can do when you’re outta money is invest in consulting or coaching, right? So he did and that business may have been worth kind of an asset sale close to about a million dollars. And he just sold for over six without any debt house, credit line, everything paid off and a lot of cash in his pocket and the relief of being able to walk away from stress and whatnot and still being part of the business and taking money off the table. That’s one story, outta many, many stories we have. But when we say impacting lives through improving business and performance, there’s nothing that brings Mike and I more joy than to really share what we know and what we’ve learned with somebody and help them reach their goals.

– And these three examples on the slide before you, these all were in an 18 month timeframe. So this isn’t smoke and mirrors. This isn’t, …and then a miracle happens. This is, we just kind of get down to the basics as it relates to the great game of business in your company. And we pull the levers that we need to pull to get you back on track and then you guys do what you do. And it’s very rewarding for us. And it’s very rewarding for our clients.

– [Paul] I love that you guys,

– Did I use the four minute Paul?

– Yeah, you did a great job and yeah, I can. And this is why, just hearing these stories and the passion these guys bring is one of the reasons that we are just so excited to partner with them. You know, we have similar stories, maybe not quite as impactful but just talking to a client recently, first time in his life, he and his wife, both in the business making six figure salaries, right? Used to be just barely squeaking by, barely making payroll and that was just by using proshop and with additional coaching and training and I just wanna plug the fractional CFO for a second because so many shops have no real good way to do job costing. And that there’s a bunch of things that need to all come into play for job costing to work well. And it’s one of the most essential things for a shop to know is which jobs are making money and which shops are not, which clients are profitable so they can make those conscious decisions to get rid of that, 20% of jobs that are causing 80% of their losses and the impacts to making those smart decisions are just so huge. So yes. So little bit of inspirational slide here. Imagine if doubling the profit of your business, doubling the valuation of your business, what does that mean for succession planning with your team, with your kids, with selling the business, whatever it might be, these are real important things. You know, most, every shop owner I know has put their blood, sweat, and tears for decades often into these businesses. So having that, be able to help them realize their goals, realize your goals hugely important. So, yeah, well, we kind of did the Q & A, there will be a recording, Chris. Yes. So yeah, we will share the recording of course, as we always do, it’ll also be in our video library on our website and last slide, I think and we’ll wrap it up right at the top of the hour here, so yes, please reach out. We have a new email [email protected] or you can call our 800 number, but yes, thank you Mike and Dave so much for your time today. Thank you, everyone that joined us, appreciate all your great questions and engagement. This is obviously a really important topic, how to have our businesses to succeed. So hopefully you learnt something today and yeah, we’ll look forward to hearing from you all and reaching out with the recording and continuing the conversation. So thanks again, you guys. All right. Take care everybody. Have a good rest of your day.

– Bye bye.

– Thank you.

– [Paul] Bye.