Show Notes

Jennifer is joined by business strategist Dave Baldwin for a discussions on avoiding pitfalls small businesses run into when it comes to scaling their business. Dave is a business strategist who loves helping people make their dreams a financial reality. He works with businesses to create proprietary systems and processes that make growth sustainable. As an ex-programmer, Dave can geek out about spreadsheets any day, and he also enjoys creative writing.

Want to Contact Dave?

Website: Dave-Baldwin.com

LinkedIn Profile: https://www.linkedin.com/in/davidchasebaldwin/

Twitter Profile: https://twitter.com/davebaldwinsays

Instagram Profile: https://www.instagram.com/baldwinsystems

YouTube Channel: https://www.youtube.com/channel/UCMrbOFRkfTspCSS7MLCDomA

Want to Work with Jennifer and her Virtual Marketing Experts Team?

Are you a coach, consultant, or online course creator who are looking to grow your business, increase your income, and scale your impact? Connect with me at YourMarketingMatchmaker.com I look forward to hearing from you.

Watch the Podcast Here:

Welcome (00:00):

Hey there. Thanks for listening and welcome to the Marketing Matchmaker podcast. If you're looking to grow your business, increase your revenue and scale your impact all while staying true to who you are and the people you serve. This is the show for you. I'm Jennifer Tamborski, digital marketing strategists, fractional CMO, and founder of Virtual Marketing Experts. My team and I work with six and seven figure coaches, consultants, and online entrepreneurs who are tired of playing the “guru” game of one size fits all marketing. They're ready to create a business and marketing strategy that actually builds relationships with their ideal clients, creates massive shifts in their business,” and rapidly increases their revenue. As your Marketing Matchmaker, I'm going to help you find the perfect marketing match for you. This show will teach you how to reach your ideal client, connect with your audience, build that perfect relationship and generate more revenue all through a process. I like to call “Dating Your Ideal Client”. Now let's go have some fun.

Jennifer (01:14):

Hey there everyone. Welcome back to the Marketing Matchmaker. For those of you who don't know me, I'm Jennifer Tamborski, digital marketing strategist and CEO of Virtual Marketing Experts. And today's guest is Dave Baldwin. Dave is a business strategist who loves helping people make their dreams a financial reality. He works with businesses to create proprietary systems and processes that make growth sustainable. As an ex programmer, Dave can geek out on about spreadsheets any day, and he also enjoys creative writing. Welcome to the show, Dave, I'm excited to have you.

Dave (01:50):

Thank you, Jennifer. And thank you for having me.

Jennifer (01:52):

So I'm excited about this topic because one of the things that I know is marketing works, right? It always works. And when you start bringing in those leads, sometimes your business grows faster than you think it will. And if you don't have the systems and processes in place to help you grow that stagnate your growth. So tell me about what you do and how you help your clients with setting up the systems and processes. Yeah.

Dave (02:25):

Thank you, Jennifer. So one of the things that there's a couple different areas that I look at with a small business, the first area is finances and cash flow, because if you're not able to, I mean, one of the things you have to look at is the economics and pricing and the way that you're getting paid and the way that you're paying people and the way that you're managing how much money is coming in, how much is going out and how much you still have left. If you don't have a clear picture of that, we're, we're sunk right from the beginning. So we got to get that as really the first priority. I always tell people, if you don't have a bookkeeper, you know, we got to get you a bookkeeper. And then if you have a bookkeeper, are you actually at the financial reports on a monthly basis?

Dave (03:01):

And do you understand what it is you're looking at and what those different numbers mean? But beyond that, then we get into sales and marketing systems. And then we work with companies that get further along. When you get to the point where you are selling more than you can keep up with you're at some point going to hit a point where you've got to hire people and we've got to now focus on how do you build a team that people want to be part of. And the last thing I'll just say about that is it's not necessarily just a matter of paying the highest salary on the block. People will gravitate toward a company that they can see a future for themselves. They don't necessarily have to make a giant paycheck today, but if they see meaning and purpose and they see your team as something they want to be part of that goes a very long way. And so a lot of it comes down to building that kind of a culture that people can look at it and they can say, yeah, this, this is something that, that really looks like you're doing a great thing. So those are just kind of a few of the things that I work on with businesses.

Jennifer (03:59):

I love that. That idea of, of creating the systems and the processes so that you're able to scale, but we talk about scaling a lot on this podcast, right? About the stages of dating, the stages of marketing, and the stages of scaling. So what is the best time for someone for a business owner to start this type of process creation?

Dave (04:30):

So, let me just make sure I understand the question. Great. So you're saying, what, what area of the business would you start building a process? What's the first place to start?

Jennifer (04:37):

Yeah, I think that's, yeah, what's the first place that you'd start with right? Cause we know numbers, right? That's I talk about numbers all the time. So your bookkeeping is, is step one. But once you've got that in place, what's step two, what's that next step that you really want to focus on?

Dave (04:55):

So, step two is always going to be the sales and marketing piece that that's where I'm going to look at. What are you doing systematically, the keyword being systematically to make the phone ring to get out there and find new customers and you know, what, what are those daily routines and habits and processes that you have in place? Maybe it's nothing consistent. Maybe it's, maybe up to that point for a lot of small businesses, they might have things like, okay, I go to a networking group, I follow up with my past customers whenever I think of them. It’s not always terribly consistent, but sometimes it's more consistent than you think if you really take inventory of what you have done. And if you go back and look at what are the things, if you look at the customers that you have, particularly the best customers and look at, where did they come from?

Dave (05:42):

How did they find you for the smaller businesses? It tends to be word of mouth, but then the question becomes, what was it about their situation that made them move forward and say, yes, I need to spend the money with you. And kind of from doing that type of inventory and going through and figuring out what, what was it about your company that made them go with you instead of somebody else, we can kind of dissect that, identify those pain points, identify the situational factors and identify what makes somebody a good fit for your company, and then figure out what needs to go in the messages. I think really the best starting place for a marketing system is to identify what I think of as the core messaging soundbites. So essentially you can put together, you know, top three or top five problems that your company solves based on real situational evidence that you've run into with customers.

Dave (06:32):

Like what have they come to you and said in their own language, here's what I need help with. And from those three, three to five messages to build out a marketing plan platform and a system. But my end goal of a marketing system is let's decide what are we going to do every week period? And we're not going to stop. And, and we're not going to second guess if it's working or not, after a certain point, we're going to measure it, but we're going to commit to some amount of time. We're just going to do it and keep executing no matter what, until we reached the point where we've decided it's time to measure. But I think that's the other piece is that people tend to start trying to measure results too soon, but there's going to be a delay as, as you know, before the results start to show up. And I think that's where small businesses can sabotage themselves is, is thinking well, it's, I, I did this for a week. Where's the customer? You have to give it longer than that.

Jennifer (07:27):

Yeah. Yeah. That's for sure. Especially when it comes to marketing, you know, there's, there's, there is a delay in your business and getting those customers in the door. So if you could give a younger business owner, those, those small businesses that are starting, and they're starting to scale, if you could give them one thing that they need to focus on beyond anything else, what would you say?

Dave (07:54):

I always start with financials before I go to anything else. And I think for a starting for somebody who's just starting out and creating a new business, I would say, first thing I'd do is get a separate bank account for your business finances, and don't mix your business money together with your personal money. It's a horrible habit, but people do it all the time. It's a good way to really, it's not only just for practical purposes, but for psychological purposes, it feels more like a real business. And you're going to treat your business more like a real company, if it has its own bank account. And you start looking at your financial statements, you know, essentially you've got to figure out I also recommend that they track their time and there's free tools out there. There is one that I use, it's called toggle. You can track which client did you spend the time working on.

Dave (08:41):

And I think it's really important to look at, to make sure at least once a month to look at how much did you charge and how much time did you spend and are you charging appropriately based on the amount of time that you're putting into the projects? It's one thing, if you decide consciously to give more value in the beginning to try and kind of get some, if you're priming the pump, I, that that can be something that happens more, especially if you don't have any clients or only a couple of clients yet, and you're trying to get the word out. But I think the unfortunate thing that can happen with small business owners at that stage, and that has them never moved to the later stages is simply just undervaluing their service. And you know, when you look at the amount of time that you put into something, if you figure out that you're making $12 an hour, you're never going to be able to hire anybody else to help you.

Dave (09:29):

If, if that's where your service is valued and you're essentially just undercutting the market. So at some point you've got to figure out how, what do you need to be charging? And, and sometimes that means walking away from a paycheck as, as, and that's where I think sometimes people get hung up on, they're afraid they're losing opportunity. But the reality is when you under price, you're actually costing yourself opportunity because the right kind of clients will see that you're cheaper than everybody else. And they'll wonder why you're cheaper than everybody else. And they'll actually go with somebody who charges more because I always say, your price tag is part of your marketing message. And if you under price yourself, you're basically telling everybody that you're not that good and people will listen if you, if that's the message you put out. So I think that's the biggest issue I see at those early stages.

Jennifer (10:17):

I love that point, Dave, I seriously see so many, especially smaller younger businesses doing just that selling from their own pocket, right? Because they're in a financial spot where they need the money coming in. Oftentimes they sell what they would pay. Well, that doesn't necessarily bring you your ideal client, right? It's not, it's not the best way to go about that. So when someone comes to work with you, what process do you take them through?

Dave (10:52):

First process I always start with as a financial audit and I want to look at a couple of different things on the box. I want to look at first of all, P&L statement, profit and loss statement, it's called a P&L or an income statement. I also like to look at a cashflow statement. The one area that I liked, I like to look at is figure out, Hey, how is the owner getting paid? Because depending on how a lot of times, a lot of bookkeepers do this, or a lot of CPAs will do this, where you pay yourself, it's called a Draw. And if you look at a P&L statement on QuickBooks or any other accounting software, the draw is that you pay yourself as an owner, don't show up or not reflected on the profit and loss statement. And one of the tripping points is people will say, well, my P&L says, I made $20,000 profit last year, but I have less money in the bank than I started with.

Dave (11:39):

How can that be? And that's one of those areas where I kind of have to sometimes provide some education that not your profit and loss statement does not, should not. It's not supposed to reflect your cashflow. That's a very different view of your financials. So one of the things that we have to look at is figuring out how much cash is coming in and going out on a monthly basis, including what you're paying yourself. And basically, I like to try and get a gauge, an idea of how, how much of an understanding does the owner have of their financials and, and what those numbers really mean on a monthly basis. But not only from the standpoint of pricing, but also looking at what's called cost of goods, sold or cogs as the acronym and accounting speak to figure out are, what does it cost you to deliver your service?

Dave (12:26):

So, part of that process, and this is why I like to look at monitoring time and tracking time, is if you're flat pricing your service and you aren't tracking your time, you have no idea what your, essentially your yield per hour is on the, on what you're making. But more importantly, you don't really know what it would cost you. If you hired somebody else to do the work, you have no way to gauge that. And the unfortunate reality for a solo business owner who does all their own work, the tendency is they relate to their own time like it's free. And I always say, well, you actually now have to think about how many hours are you putting into this? And then let's figure out based on what it's going to cost to pay a subcontractor. Would you actually still be making money, if you were paying a subcontractor to do this work, or would you be in the red every month?

Dave (13:07):

And that, and that's really where I would start as far as looking at the economics of their pricing, because that's going to really dictate the price point, defines the buyer for any, anything you can ask, any Realtor, they'll tell you that if you're selling a house where you price, it is going to determine who comes to look at your house. And so that's, that's where for me, the starting point of marketing begins with finances for that reason.

Jennifer (13:36):

I agree wholeheartedly. I actually did an episode a couple of episodes ago that basically went through that process of, of a coaching business, right? And when you, what type of marketing you want to do in each stage, because it's different, depending on where you're at, you know, when you're in the younger stage of your business hustling and getting those referrals, and that kind of thing is really where you're going to get the biggest ROI. It isn't until you hit those next stages, that, that digital marketing can really give you that.

Dave (14:08):

Absolutely. Yeah. I think one of the, one of the other pieces, if we go to looking at the, from a sales standpoint, I think another tripping point can be speaking the wrong language. And I just know this because I've had I've blown sales before and I've had people tell me, look, you're, you're not speaking my language. And so I think that's another thing that really needs to come into play. As thing is, you've got to ask those questions on the ground, to the people that are in your market, get them to tell you in their own words, what pains are they having? And I think a lot of that really comes down to trust. Cause people have to trust you enough to tell you what their pain points are, but I think that's one of the practices I've embraced. Is I just, I think about what words do somebody else use to describe their own problem? Not, not cause if I talk about it in my language, it won't make any sense, but I try to keep my language as close to their language as I can.

Jennifer (14:59):

I love that. That is definitely a huge point when it comes to marketing your business, being able to speak to your clients in a way they can hear you. I like to speak into their map of reality, really allows them to hear that you can solve their problem. So when does a business come to you for help? Like when let's, let's do two questions here, one, when do they actually do it, but two, when should they do it?

Dave (15:35):

I liked that dichotomy because yes, I could answer those questions differently, but I would say the most typical if I had to, I mean, I've, I've, I've worked across a wide gamut of different types of customers, but I would say the most typical is between the third and fifth year of being in business. And if you look at statistics, it was, I believe that the SBA, or there was a study at one point where they said, okay, there are 30% of companies are out of business within two years, 50% closed by the end of the fifth year. So in between those two milestones is 20% of small businesses that is really a sink or swim period. And typically, what happens at that point, when you get to around your third, third, or fourth year in business, there are some problems that start to pop up that you haven't really had to deal with before that. It might be that the owners wearing all the hats and they got away with wearing all the, all the hats before they, it might be that they're doing all the selling, they're doing the work themselves.

Dave (16:35):

Maybe they had a small crew of two or three people, and now they're starting to hire more people. And it's now beginning to become more of a challenge to manage that. Cashflow becomes harder to manage when you grow your head count at that point in that again, because it happens in that third to fifth year, but I think when do they actually come to me, it's it is in that timeframe. But I think really the “why” of what makes somebody reach their hand is when they start to feel overwhelmed. I think fear is one of the operative emotions, specifically in terms of finances and sales, because they, and finances and sales really come hand in hand, obviously, because you've got to sell more if you want to make more money. But I think the, the, the typical challenge is the need to, you end up in a catch 22 type of situation, and this is where the panic can kind of set in is either being booked solid and still losing money, uh, or, or just barely breaking even.

Dave (17:19):

And, you know, and, and having trouble being able to take on more work, because everybody's already got a full plate. So where do you go from there? That that can be a really stressful situation for a business owner. And there, there are ways out of that, not necessarily an overnight way, but the other, the other comments scenario is just not really just being confused about their finances and not really sure how much money they need to have in the bank. You know, particularly can happen right around this time of year when taxes are due or when quarterly tax payments are being made. If they're a schedule C filer, and they're just, they're not sure about their cashflow.

Dave (18:10):

And so part of the problem that that creates is I want to hire another employee, but can I really afford that? Is the money really there to pay it? Because what tends to happen is at the, in the earlier stages for those first couple of years, a business owner might look at their bank account and say, okay, well, as long as there's $2,000 in the bank, I, I'm not too worried. Then it becomes, okay, well now I need more like four or $5,000 in the bank because I've got to buy materials, I've got to pay subcontractors, I've got other costs, I've got whatever that is. Then it, then it's, you know, $6,000, $7,000, that number starts to get bigger, but more importantly, the number starts to become less clear. And, you know, for, for companies that have to buy inventory or have to have to manage things like sales tax, you know, they're, you know, then you've got more head count that it can get to be a really stressful situation when you're looking at your bank account and thinking how much of that is money I actually have.

Dave (19:07):

And you don't know the answer that's, that has been a common scenario that has, has had people reach out before, but when should they to answer your next question? I would really love to be talking to more business owners earlier on, I would say in that, that one to two year mark where, you know the conversation would be about how do we get things established on the right footing? How do we create a financial system that proactively has you ahead of those types of problems so that, you know, you're, you're getting the right things in place early on, and you're pricing yourself correctly from the outset. I mean, sometimes I think I, I would actually would be ideal to talk to somebody who is still working a full-time job, and they're planning to start a business. I would say in a lot of cases, you might be better off staying at your day job for another six months to a year while we figure out the economics of your business and get you in position that once, once you do leave you're financially and emotionally ready to move forward with that business.

Dave (20:06):

Because I think that's, unfortunately what happens a lot of times is business owners say, well, I hate my boss and I know I can do it because I paid $297 to a business coach. And they said, go for it. And a year later they're running out of money and looking for another job again and going back to work. And so that's why I say part of my real mission is making people's dreams a financial reality. There's a lot of dreams, unfortunately, that ended up going to the graveyard because people didn't do what they needed to do financially. And that's what I really want to be able to work more on. And so I think those first couple of years are really crucial to, to really establish some of those habits correctly and not do some of those reactive things that once you've already gotten in that habit, it's a lot harder to course correct later.

Jennifer (20:55):

So I totally agree with that. I say in a lot of podcasts and interviews, and even my own podcasts, getting a coach early in your business is so super important to the success of your business.

Dave (21:10):

To clarify, I'm not saying coaches are all bad, I realized I might've come across that way, but now there there's a lot of good coaches out there, but there are some bad ones too.

Jennifer (21:20):

So, yeah, like in any industry, right there are fantastic. And then there are some that aren't so great. So the last year, cause we're, you know, in the spring, early summer of 2021, so 2020, for a lot of people, there was a lot of upheaval and a lot of people are becoming kind of reluctant entrepreneurs right? Whatever their job is, isn't there anymore. So they're looking for that business opportunity. You have any tips or suggestions for that reluctant entrepreneur who's stepping into the business world?

Dave (22:01):

Definitely because I have dealt with a lot. I mean, I know what it's like to feel reluctant. I mean, I've had to push through my own reluctance for a number of years and, and I've, I've learned a lot about what, there’s like an emotional resistance that you feel when you're getting into anything it's unfamiliar. It's not what you're used to. And there's a tendency to retreat to a comfort zone. And for me, I'm getting external accountability of some form is really helpful, whether that's a coach, whether that's a group of people, whether it's peer to peer, whatever that is, if I'm externally accountable, I've made a promise to somebody else then, and I have that dedicated type of support that helps me to move forward when otherwise I might not. But I think also like I had alluded to in the beginning about sales and marketing systems, I find it's really important to commit to some period of time of executing before I begin to start forming an opinion about what the results should be.

Dave (22:55):

And if you're not sure what that time period is. I think somewhere in the 30 to 90 day timeframe for most marketing campaigns is, is basically a minimum. I think cold market strategy should be at least 90 days. I mean the cold market always takes longer to respond than the warm market does, but yeah, basically just say, okay, I'm going to do this for 90 days. And once you make the commitment, you don't stop. But, but once you reach the end of that period, then you say, okay, what exactly am I going to measure? Which needle am I going to watch to see if it moved or not? And what am I going to do if it does, what am I going to do if it does and, and make that decision ahead of time.

Jennifer (23:35):

Absolutely. I love that tip it's one that I, something similar that I say all the time in, in that, it takes time building a business takes time. Right? I think some of the fallacy that people have gotten from social media is that they're overnight successes, but that's not really happened. Right?

Dave (23:57):

Yeah. There's one, one of my favorite books is Jim Collins, Good to Great. If you've, if you've ever read that, but for anybody who hasn't, who's listening, he talks about, there was a body of companies that between 1955 and 1985, that went from 15 years of sustained mediocre performance to 15 years of sustained great performance as measured by three times, the value of the general stock market. And one of the things that he noticed about the patterns was they appeared if you watch the mentions in the news and the press, they appeared to just skyrocket suddenly, but there was this long sustained buildup period during which the media is not talking about you because there's nothing to talk about. And it creates this unfortunate perception that businesses just appear out of nowhere and they're overnight successes, but it's just not reality. The reality is they've I mean, most of successful companies, you can see out there, they were grinding away at it for 10, 15, 20 plus years.

Dave (24:50):

And you know, probably not sleeping much, not making much money and their, their families were probably telling them to go get a job cause this isn't going to work. And, and they, they had to navigate that whole long and painful process before they had their moment of success. Everybody's always trying to figure out how do I skip that part and just get right to the success part. If I ever figure that out, I'll bottle it and sell it for a trillion dollars. But as far as I can tell isn't there.

Jennifer (25:24):

That is so accurate. It, it, it isn't, it is a, a work it's your, your business is work in progress, just like a relationship. That's why I correlate marketing to dating there's work involved in, in every business and every marketing aspect, Dave, I it's so enjoyed this conversation. Um, what our audience know, how they can get a hold of you.

Dave (25:52):

Absolutely, yes. So there is a, I've got my, my website is dave-baldwin.com. Don't forget the hyphen. And you can, I'll also put, I've got some social media links I can, I can send, we can put there, I've got a YouTube channel. I'm on Instagram. Admittedly. Haven't done much with social media, but the, my YouTube channel, I'll, I'll share that, as well that, I'm starting to build that up and I've got some videos on there about I've, I've got some interviews and I've talked about some of the challenges that are facing the business world.

Jennifer (26:26):

That is awesome. I will put all of those links in the show notes below. Thank you again for joining me, Dave, and thank you for joining us. I look forward to talking to you on the next Marketing Matchmaker.

Dave (26:40):

Thank you, Jennifer

Jennifer (26:42):

Thank You for listening to the Marketing Matchmaker podcast. If you enjoyed this episode, I would love to hear your feedback. Please head over to iTunes and leave a review so we can hear from you. And if you are a coach, consultant, or online course creator who are looking to grow your business, increase your income, and scale your impact connect with me at yourmarketingmatchmaker.com. I look forward to hearing from you.