Episode Transcript
[00:00:00] Speaker A: How to make an extra 100,000 in net profit without working more hours or wasting money on marketing. But there's things that they can do to increase the profit and the cash flow without having to work so hard.
[00:00:12] Speaker B: Good day, everyone.
Welcome to another episode of the Managing Partners podcast. I'm Kevin and I am your host. And I have an old friend of mine coming to join us today. He's coming from the UK and he works with law firms all across the UK and we got to know each other, I guess a couple years back and just it was interesting. He's been on the podcast before and you know my interest in law firms in the UK and other countries versus here in the US and very similar. So John helps law firms, helps them grow, helps them with their structure and processes.
But I'll let him tell you more about himself and I'm just excited to have him on the show today. So, John, welcome to show.
[00:01:00] Speaker A: Thanks, Kevin. Lovely to be here again. We've connected a few times both into surfing too, which is kind of what most of our conversations end up talking about. So that's a good thing. So, yeah, it's always good to share personal interest too. So, yeah, I've been doing this and what I do now for 10 years, specializing in working with law firms the last three years or so, mostly in the UK, but like I said, I was in USA, in Florida, talking earlier in the year and asked to present at our conference, which is great fun. I'm not just saying this, the Americans would love me. They were, they really were good fun. I thoroughly enjoy myself.
Yeah, so it's about, you know, yes, I really support owners of law firms to grow the businesses, but it's not just for growth, for growth's sake. It's got to be profitable growth. And really the key thing that I've really latched on the last few years is helping not just grow or increase profits, but also get increased the value of the business as well. Because I think, I think lawyers, or maybe the professionals more than anyone else, they really understand the concept of having an asset to sell at the end. I think most other industries or professions, certainly industries don't tend to think like that. So for lawyers, they've got one eye or somewhere on the back of their brains thinking about exit. So when we work with growth is how do we do that? So not only does it grow, but you don't actually have to work so many hours, which makes in doing that. Because more profitable with less input means you have the systems in place to increase the Value as well, makes it easier to sell and worth more when they go to exit as well. And we have fun. Make sure.
[00:02:34] Speaker B: Yeah, absolutely. I think, you know, there's, you know, there's different life cycles of a, an attorney and their own firm. It's first off it's just boom, I'm doing the work and then as you get smarter, get more acquainted with other people, you sort of hire and delegate and put systems in place. But yeah, ultimately we wanted to be a profitable business.
We want it to be the life that we want. Right. We want the firm to serve the life that we want to create. And then of course ultimately what do you do from there?
Is it sellable to someone else? Is it something that the current staff, teams, other partners can take on from there? So whatever it may be, those are important things to be thinking about. And I just came from a conference, great Legal marketing summit. And that's a lot of the conversations around the room. Of course if people that are in that room, they get it right and they're engaged.
So yeah, I'm happy to see what you have to share today and talk to me. The hundreds challenge was the name of your presentation and John's actually going to share his screen a little bit.
[00:03:43] Speaker A: Yeah, 100k profit challenge. So I think it's long title is how to make an extra 100,000 in net profit without working more hours or wasting money on marketing. It doesn't work, but that's not pretty catchy. So let's share some simple things today in our limited time that we've got just a few ideas they can actually put into action. And I've got some visuals I can share too. So for anyone who's just listening, maybe we can talk through the visuals, give some super simple ideas to really get focused. I think you as I know, you know a lot of the smaller law firms when they're still owner managed, you know the owners are still very much involved with fee earning. Time is critical on their side and not many lawyers get taught how to run the business so they just end up having to work harder and harder to try and make extra profit. But it's things that they can do to increase the profit and the cash flow without having to work so hard. And once they understand them they can then start to get more leverage so they can work less. And so as they work less, they can more work more on the business which enables that exponential kind of growth once they've got the key. A few secrets that I'll share today. Sky's the Limit.
[00:04:51] Speaker B: Absolutely. Well, you know, you're preaching the choir here and we're all excited to. You know, it's all about picking up that extra nugget or that critical piece of information that you can apply in your firm. So, yeah, John's going to share his screen a little bit. So if you are like in the car or just in the audio only. We do have video versions of all of our podcasts on YouTube, LinkedIn and Facebook. So if you want to catch up, catch this episode on one of those platforms, make sure you do that so you can see what we're talking. We'll try to talk through it as much as we can. So.
[00:05:22] Speaker A: Yeah.
Yeah. Okay, cool. I'll share.
[00:05:26] Speaker B: Let's jump right into it. Yeah, let's jump right into it.
[00:05:30] Speaker A: Buttons now. No, this is a full presentation which I. I deliver. So I'll literally skim through. You know, that is Morpheus. This is a quick. That's one of my. I won't play it. That's one of my clients. We took from 200k profit to a million in net profit in three years. And he's been growing at approximately a million pound net profit every year since then. It's been two years ago, it was valued between 10 million and 100 million value. I can't give you the exact. I'm not allowed to, but he's done very well out of it. And then now progressing.
[00:06:05] Speaker B: I'm. I'm envious of him too, because he goes to all the Formula one races and he's always like behind the scenes and the VIP areas like he is.
[00:06:16] Speaker A: He loves driving.
I'm not going, but what I've got here, I've kind of condensed part of that journey to share. Okay, so I'm not going to go through the full presentation, but no one teaches us to run a business. That's the thing. But it is easy. Sorry. It's simple, but it's not particularly easy. So I'm going to cover three things quickly. One is the business blueprint, which is really good. Taken from the book by. I've forgotten his name. Typical.
There's a very long title and it's something like the ultimate business blueprint to build an insanely successful business. It's a ridiculously long title, but it's absolutely brilliant. I'll be covering the basics of that. Then I'll talk about cash flow. Five simple areas to improve cash flow in your business. And then the profit maximizer. Now, genuinely, this is how to increase your profit by 30% in 30 days when you see how simple it is. It's frightening because once you understand this concept, you can put it in your business so quickly and so easily. You'll be amazed. Right. I'm not going to spend time talking, talking about myself, what I do. We've done that already. Here we go. So this is the business blueprint. So the key thing here is that we all have assets in our business. You know, it's our people, our reputation, our website, social media, our database, our connections, all these things that we have. What we really need to do is we need to be really effective at turning into revenues for owners of law firms. The instant thing there is thinking about how many lawyers have I got, how many hours are they doing fee earning and how much they're charging per hour. But it's a lot more than that. I mean, you know, from your marketing perspective, Kevin, you know, how well are they using their website, what's their reputation like? Have they got really good perspective on who their target market is and are they even passing work from one department to another? So there's so many little things at 1%, which is often falling through the cracks. They may be getting leads in, but are they chasing them down? Are they picking up the phone quick enough? We all do it and I'm as guilty as many when we don't follow up. So the first thing is about being super effective at driving revenue from our existing assets. You don't necessarily need to go and do lot lots of marketing. Sorry, Kevin. We just need to be better with what we've got. And that's where a good marketing agency will help you do better with what you've got. A good one. I'm sure you are, I know you are. But the key thing is, you know, we need to be really efficient with that revenue so that it's profitable. There's no good bringing in lots of revenue if it's not profitable. We're just keeping busy and not earning anything. So the key thing there is efficiency. And I'll cover off some that a bit later on. But as you probably know the saying, I'm sure you've got it there. The same as here. Your revenue is vanity, but profit is sanity. But cash flow is the reality. So I know cash flow and profit are two different things, which I haven't got time to go into today. But you think many lawyers out there, they run on the fact that they've got lots of, they've got lots of billing work going on. But so many times I come across lawyers where, you know, they, they Got them been doing super busy. They got so busy getting the clients and so busy doing the work, they don't get time to finish the cases. Invoice, bad debt and they look in the bank account and they go, I don't understand, we work so hard, where's the money? And it was about two years ago, I was working with a client, just over a million turnover, 1 to 2 million. And they've been working absolutely flat out through Covid with conveyancing and real estate. Then you run out of money at Christmas. No, you haven't, you can't have run out of money. You've all been working flat out. And I kept saying, John, you don't understand what it's like running a law firm. And then you don't understand how to run a law firm. So I just, I just said like, where can it be? And there was one, one solicitor, one lawyer who had £30,000 worth of work that she hadn't closed the cases for to invoice. That's one lawyer, 30,000. We found £120,000 of cash that hadn't been collected properly just because the internal inefficiencies for a smaller firm, it cripples smaller firms because they're doing all this work and they haven't got the time. They're so busy being busy probably on low profit work or not very efficient processes inside and they're not chasing down the money. So for those of you listening in a car, maybe I've just got four boxes. From left to right it's assets, then revenue, then profit, then cash. And we need to understand it from left to right, from assets, be really effective to drive revenue, be really efficient to increase profits and really productive to get cash. But when we're looking for improvements, you need to start at the right and work backwards. So before you start getting more lawyers in, you know, and getting everyone to go out and get more work, let's just focus on the work that you have done. Make sure the cases are closed. Are we, what's happening? Are we writing off work? Are we doing low value work? Are we discounting? Normally there's so much that can be done just within that internal section. All of us, and I'm as guilty as everyone else we get. So, you know, we. The knee jerk reaction is to go and get more business and actually there's much in there and you'll know sure you work with your clients, Kevin, if you are going to get more business, make sure it's profitable and well, just.
[00:11:58] Speaker B: To add to that, yeah Just add that. I mean, if these things, you know, you're not efficient at the end of the. To the far right here on the cash, then every client you bring in is going to be more of a problem. More time, more work, and less efficient. And that'll run all the way through to the other side. So just doing more marketing, right, Hiring me and saying we need more leads when these things are broken, or say your intake is broken or your sales or your close rate is low.
[00:12:33] Speaker A: Yes.
[00:12:33] Speaker B: There's a lot more other problems that you need to fix before you just bring in more clients. So 100%.
[00:12:40] Speaker A: I was reading something on LinkedIn recently. Maybe it's one of your posts or someone else, you know. Oh, we just. We just tick the box with marketing. Marketing is like the lifeblood of a business. But a good marketing agency, like, I know. I know you because we spoke and you'll sit down, have those conversations first. I want to just keep spending money on your ads or your SEO or whatever it is when you're. You're not. You're not signing the clients because your BD isn't done. Well, because you'll blame me.
We want you to succeed. It's. It's in your interest as well as theirs.
Yeah.
[00:13:16] Speaker B: Who's answering the phone? You know, like, what's your process for intake? So it's.
Yeah, it's important if you're gonna do marketing that the marketing agency has a full understanding of all those things. And the firm has to be involved with their marketing, with their brand.
You can't just hire a marketing agency to take it off your plate and you walk away in the sunset. So if you're listening, you have to be engaged or have someone on your team. That is so.
[00:13:46] Speaker A: Yeah, definitely.
When I first work with clients, we start with profit and cash. We just get your cash controlled. Let's make sure we're maximizing your profits. And then we start marketing. And I do a lot of it with them. Right. Which work brings in profit, which work brings in cash? And they often think, you know, litigation, personal injury, it's really profitable. What is it? Well, we got a 200,000 check last month, but how long has that work been going on for? How many hours have you worked? Well, we don't know. Well, how do you know it's profitable? Well, saying isn't. You just don't know. So we measure this stuff, and then when you start to measure, you go, right, These are the clients that bring profitable work. These are the clients that bring in cash. Now we can Go and speak to a good marketer, kind of go. These are the kind of groups that we want. So it's a really important fundamental business that many people don't do. Neil Cunningham, I knew it escaped my brain and Neil Cunningham's brilliant book, the ultimate business blueprint. But that's the first thing. And then once you start thinking like this, it just flips normal behavior on our heads. We all think, get more marketing, get more marketing and it's the lifeblood business. But we got to start profiting cash first, then, then it's all gravy. You get some good marketing and you know it's profitable and you know the cash is going to be there. So that's, that's the very, very first thing. Once we get that, we can make some money. Okay, I'm just going to flick through.
Just so you know, that's not Stephen's car. He's got a black one. It's really nice.
He's got the McLaren recently. I was going to stick through. Skip through, skip through.
[00:15:19] Speaker B: Is that a McLaren? What do we got there?
[00:15:22] Speaker A: I'm not quite sure that he's got a McLaren. He has bought it this year, received it. Where's he gone here, I think that's McLaren. He's got a black McLaren. I sat in it at the weekend and it was. It's stunning. It's absolutely amazing. Yeah, he, since he was doing 80 and this is interesting, when I met him, he's doing 80 to 90 hour weeks. I think within a year we halved his work and then two to three years later he was taking nine months off the year. He's run about 27 marathon nine months.
He's just had so much time and he's able to travel and have fun.
Yes. I didn't mean to get stuck into these slides, but yeah, he's a sponsor of Team Brit, which are a disabled racing team. So they're the first or the only team where they got disabled drivers. But they're going to be competed against able bodied. Yes. He gets to track days. He's off. We're due to go out for a curry and a couple of beers Thursday, but he's rally driving in Wales so he's not got a choice. He has, he has too much fun. Anyway, I'll move on. So I know we're restricted in time so that now that's the principle. So. Okay, how, how do we do that? Well, as I said, cash, cash is the most important thing because without cash, your business, your business just, just caught full stead.
Let's keep moving. I'm going to keep moving through. Profit is not cash. Okay, I'll share this with you because I'm. I would have thought that not many lawyers in the USA would have seen this. This is April 2023, so it's actually a year ago. But this is a study that was done and they found that three quarters of law firms, especially those at the smaller end, which is who you and I work with, they would consider selling a percentage of their business to equity investors just to keep it going. That's primarily because they haven't got enough cash in their business. And that's frightening. And I'm hearing this a lot. You have 200 firms they spoke to 149 said they would consider selling equity in their business. That's everything you've worked for. It's your future, you know, it's your future for your children and a lot of it. This was often driven when they had the financial crash because they don't manage their cash flow very well. Because I don't do what I'm going to share with you.
We're struggling. And the banks suddenly said, we're not lending you anymore. All the rates are too high. They just wouldn't lend over here a year ago. So these equity investors came in offering to give them money, but we're going to take a share of your business.
You're a Lawyer, you're your 50s, your 60s. What are you going to do? You've got no option in the uk. There's a lot of big investment coming in. But I sit back and I think if only you guys knew how to run the business better, you wouldn't need to. It might be a growth strategy and that's fine. But there's ones that are selling up because they don't feel like you've got an option. And that to me is quite sad.
[00:18:11] Speaker B: Yeah, you don't want to be on that side of it. If you need the money, you need the money.
[00:18:15] Speaker A: Yeah, they don't feel like having got an option. It's only such a shame. So I just wanted to share that. So. And I think you said something like this earlier, Kevin, you've got to optimize your cash flow and profits before you grow. Otherwise you would just scale your problems. It just gets worse. Yet we all do it. Business isn't good enough. Get to the end of the year, not enough profit, not enough cash. Work harder. And we're just making this whole machine work harder and we end up grinding ourselves into the ground. And it's, there's an element of yes, you need a certain amount of revenue to pay all the OPEX to get profit. But that machine inside it can run so much smoother.
So these, these are the five areas that you can focus on that will increase your cash flow. One is reduce expenses so if you're not spending it, it doesn't go up the bank account. Really simple. The second one is increased revenue of your expenses.
[00:19:09] Speaker B: Sorry, so an audit of your expenses.
Yes, we do an audit of our expenses like every quarter pretty much. And you always find stuff and why are we paying for this?
[00:19:21] Speaker A: What's this extra license? Why did I go to these conferences? Did I need to spend postage? Postage is a big one. Phonebuilds posting too much because some of the lawyers think it's the right way of doing it and they don't follow systems properly. So yeah, cut your expenses immediately, have more cash, increase revenues. It's an obvious one but thinking about you're not discounting, not writing off, making sure that you're, you know, closing cases and invoicing properly. Simple things like that. Can we refer more internally then there's more, less obvious things though. How do you reduce the receivable days?
Now it's not a 60 day payment. Can you get money paid on account?
Simple things like that. But how can you increase your payable days? Maybe some of your suppliers won't get paid in 14 days or 28. Can you have a conversation about extending that? It hasn't changed your profits because it's the same in and the same out. But it's helped your cash flow. Yeah, that means you're not borrowing money. And of course reducing inventory days. That's like if you're in a shop. If I get something on the shelf, how can I get out quickly? Again this is about how can we get our work done quicker. Now lawyers will say but if I get it done quicker, I can't charge as much. Well maybe not work less hours, but you just be more organized so you can get more billing hours done quicker. So that's some internal things but those are the five. And I appreciate we're running on time a bit but I can more than happy to send. I've got a document with all these in more detail. So there's, there's a few ideas to spend less. I won't go through them. So one against the profit, that's the big one. There's a bunch of ideas here for all five of those and I'm happy to send that out to anyone, anyone who wants it. This is, this is a cut and paste.
[00:21:09] Speaker B: Yeah, anyone comment or, comment or reach out to me message or. Yeah, you can find John LinkedIn.
Yeah, we'll connect you.
[00:21:21] Speaker A: Yeah, just do that. And I can, I can, I can send out absolutely no problem at all. But some ideas here and you can just pick one a month or three or four a quarter, something quite simple, work your way through it. But okay, I'm just going to move on now. My clients making loads of money. Let's keep going.
I'm fine through it. Here we go. Right, so I've done a business blueprint which is think about cash, profit and then go to the marketing and there's a few ideas there for cash flow which if you want the information, happily share that with you. No problem. But I want to go through this because this is mind blowing and it took me a lot of time do the sums in my head and get pens and paper and a calculator because it just seemed ridiculous. It seemed absolutely insane. So for those that aren't watching, they're just listening. This is, I've got a picture now of a fighter jet and that's there because the Air Force airplane manufacturers, they always want their planes to go faster, to be more combat effective. But they don't just put a bigger engine on it. The first thing they do is reduce the drag. They want to make it more aerodynamic. So with the same engine it can go faster because it's reduced the drag. When they've minimized the drag then they can put on a bigger engine. And it's the same thing in business. We need to reduce our drag of expenses. Exactly as you said, Kevin, before we do the marketing. Otherwise we're just kind of fighting against ourselves.
So again I'm going to go through some slides but if I'm not explaining it well, do jump in, Kevin, to help those that are listening. We've got an example here.
Yeah, okay, we'll try. Okay, so imagine there's two businesses known as business A business B, law firm a law firm B. They both want to increase their profit by 30% next quarter. It's a big ask. Now what I've got on the screen is two long columns or rows, I should say with 190% of that is expenses are leaving 10% of that which is profit. So let's call it $100,000 in. But we're spending 90,000 which gives us 10,000 in profit. We just take those numbers because it's easy. So business A does what Most businesses would do okay, so we want to grow by 30%. So we'll go and get more marketing and do 30% more work. The reality is you're going to have to probably employ more people or outsource or consultants because if you suddenly gave your team 30% more work, they'd probably collapse or leave. So we could need to resource it as well. So we've made an assumption here that all the costs have also increased by 30% as well. Okay. But they have achieved a 30% increase in profit because their turnover, sorry, the revenue was 100, it's now 130. And their expenses have grown by 30% as well, from 90 to 117, which leaves 13,000 in profit. So they have increased by 30%. 13,000 in profit. Brilliant. Job done. But business B is clever.
Business B works with people like me and Kevin. Rather than grow by 30%, B work with John.
Exactly. If you look at now again, if you're listening or try and explain a bit, if you're watching this, take a look. So all they've done is that rather than grow the business, they've reduced their expenses by 3.3%, which has given them a 30% increase in profit.
I'm going to let that sink in for a minute. You can either grow your business by 30%, which is going to cost a lot of money in marketing, a lot of hard work. You're going to be sweating like crazy.
[00:25:04] Speaker B: More resources.
[00:25:06] Speaker A: Yeah. You reduce Your expenses by 3.3% which would give you the same lift in profit.
Now, I'm pretty sure, as you said, you check your expenses every quarter, so you're probably really good. But many law firms get so busy, they don't have time, they don't stop and think. Now this to me, and I had to go through this genuinely, I had to go through this multiple times to do the numbers in my head to make sure it works. Yeah, it's insane. I show this to my clients, they just go, wow, no, no way, no way, it can't be right. And then they go back and they start finding efficiencies. This year alone, just this year alone, three firms, and they're returning around about the 2 million mark. Two to two and a half million. We found an extra 250,000 in net profit. They weren't aware of 250K.
Some of it was they had a senior attorney, a senior lawyer. He was bringing money in, being busy, but he was bringing in low value work. He was doing too much for himself, wasn't delegating it. And he was spending a lot of money in entertainment, my entertainment, you know, in taking clients out to get the business in the first place. And they got their bonuses wrong. So they were making money on turnover, not profit. You know, at another firm, they hadn't been adding on.
They hadn't been adding on the bill to the client. Things they could have charged for, like electronic signatures and various things they were swallowing the costs for. And on average it was between 50 and 100 pounds. So let's just call it dollars. Between 1500 and $50 per transaction. And they're doing a thousand a year. It's 150k literally tomorrow. Boom, we start.
Because they felt, they felt like guilty of charging the client too much and all the competitors were. And they weren't doing it. And the clients didn't even notice. They just swallowed it straight away because it's not that much money to them individually. Oh my God. Over a thousand transactions is huge. The thing is, I think, as you said earlier, it's often it's the tiny things, a little 1% here and there, or this case 3% that make all the difference. But here's the trick. So I will work with them to get them more efficient and more effective and get things running smoother.
Then we know things working quite well, then they get extra cash. They've got. They can then spend that in marketing. Then they can grow at 30% and that's actually going to give them a 70% increase in profit rather than the 30%.
[00:27:53] Speaker B: Wow.
[00:27:56] Speaker A: It's insane when you look at the numbers. And I know I skipped through my slides, But I've got three or four clients there that they've grown 10x in just like about three to four years. But it's getting this right. We've got to get the cash, got to get the efficiency.
[00:28:11] Speaker B: You know, with my own experience, you know, I'm, I do sales basically at my firms. And so when push comes to shove or when my partners or my president's meeting to look at everything, the pressure always comes back to, well, we got to sell more, we got to sell more.
And so, and it's not always and I, you know, that's how most companies think. So they run. So we got to sell more. Well, there's a lot of other problems. Yeah, well, if we just go some more accounts, we'll be fine.
And so, you know, not doing these exercises is just going to keep you in that same spot and the problems will scale.
[00:28:54] Speaker A: Yeah, absolutely. This is the best graphic I've seen. I Only saw this about two years ago. I was kind of doing it because it made so much sense. But I've never seen the graphics. I've just shared. I only got these two or three years ago and they're mind blowing. But the concept is so easy and it's so simple. But the smaller law firms, they get so busy, they don't have time, don't know where to look, but it's there. Honestly, we get this right, then they can scale, they can work less hours because they've got more profit and it becomes much more fun.
I'll just share one more graphic if I can. That's probably enough for the screenshots for today. I won't even bother trying to explain this for all those listening.
[00:29:37] Speaker B: There's a lot of numbers on the screen if you're not watching.
[00:29:41] Speaker A: Yeah, if there's a lot of numbers, it's a big matrix.
But I'll just explain this because it is, it's, it's, it's really significant. Across the top we have the profit margin, the margin 10, 20, 30, 40, 50, 60, etc. Percent. And on the left hand column we've got what would happen if we decreased the expenses by 10%? 20%, 30%, 40%. Okay, so just use 20% as an example because that's quite an average margin for most law firms. 20 to 30%. Okay, so if your margin was 20%, if you reduced your expenditure by 10%, your profit would increase by 40%.
That's insane, isn't it? If you reduced your margin. Now this is decrease expenses or improve efficiency. Like charging for stuff you should be, you should be charging for, you know, making sure your departments are profitable. Reduced by 20% gives you an 80% increase in profit. And I'll just throw one last one in, a 20% margin. If you reduced expenses or improved efficiency by 25%, that is a hundred percent growth in profit.
Now some of it will be reduced expenditure, as you know. And a lot of it for law firms is just understanding, you know, what jobs are profitable, what departments are profitable, where's, what's the write off, what's the discounting going on? It's actually fix those things first. Margins are going to go up. And the key, I'll stop sharing now if you don't mind. The key thing there is they'll understand their business so much better. They've got business knowledge, they get confidence.
And then we start talking to marketers about this is the work that we want, these are the clients that we want on. And it's far more controlled. They're not in a rush just to please send me more leads. And they've got time to improve the business. And it. Yeah. And they smile a lot more.
[00:31:42] Speaker B: No, I mean, no, it's spot on. I mean if the, if the law firm understands exactly the kind of client, the kind of work they need to be doing to be the most efficient and profitable. And of course the work they enjoy doing, hopefully too. But that's nice when you can come to a marketing company and say, hey, here's what we want. Exactly. Specifically these areas, these kinds of cases, whatever it may be, that's very helpful to be able to build a campaign versus yeah, we do five, ten different things here. And you tell us what we should do. Because from marketing some areas of practice are a lot easier, but they might not make any money.
Yes. And so it's really having the law firm understand those things.
And I think too you said you get busy, your lawyers get busy.
There's just so many things to focus on in the business. And as you read books and you hear all these people, well, you got to focus on culture, you got to focus on sales, you got to focus on marketing, you got to focus on process operations.
And so it's just a lot of noise out there. I gotta work on all this stuff, you know, and what I like what you're sharing is just simply focus on this first.
[00:33:00] Speaker A: Yeah. Yes.
[00:33:02] Speaker B: And if you can tighten that up, then you start to understand more about what you need to do next.
[00:33:07] Speaker A: Yeah. So we have a nine step process. The first, the first three steps are planning. Okay. Which takes a month, that's all you plan. And then we go through the final six and it's profit. P is profit. P, R O, F I, T that's handy. P is profit in cash, which I've just shared. Super quick look at that. R is revenue marketing. Because now we know what we want, we go and get it. Then the O is operations and systems. Because as you're starting to grow, we're going to need to have better systems, better training so that it runs efficiently. And that then allows the business owners to step away because people have following systems. Then the fit F is for finances and KPI, sorry financials and KPIs so they bring in numbers so they can track like as you do with your marketing. Then the I and the T is innovation and team development where you start to get the management leadership, all that kind of thing. So it's all important. But we do tend to find that if you get the profit in the cash flow right early. Then you can grow from there and people get a much better understanding of the business. So I mean it would love to hear from your perspective, Kevin. You know, I do this with clients. Get the cash in, get it profitable, understand your clients, understand your target markets. I love. I know because I. Well, you know better than me, but I love this stuff. But share with your audience. What's the benefit of not just having cash in your bank and profit, but what's the benefit of understanding the type of clients that they want?
The kind of revenue or profit is like they like to derive from it. And what is. How powerful is that to you to then be able to help?
[00:34:48] Speaker B: No, yeah, absolutely. I mean, kind of what I was saying is the firms need to be engaged and they have to understand those things. Right? So if we're working with a client, they don't know who their best client is. Again, they want to focus on lots of different things and they don't know which where their client is located geographically. Are you looking in the city, town outside.
Having an understanding of that and being analyzed. That cut the stuff. That's not. You might be having cases coming in that are literally you're not profitable on at all. Everyone's busy and you need to understand that. And so you have to have a view of that. And so you can start to focus, niche down, focus on. And I ask firms all the time, like, what is your focus niche? Like do you niche or do you focus or your general practice?
But if the firm doesn't understand that, then we go in a little bit blind or we're going to do a best analysis to say here's what I would do. But I have. We don't run a law firm. We don't have a clue. If I got you a lead, hey John, I got you a lead. And you're like, yeah, that was a waste of my time. We don't know that from the marketing side. You know what I mean? And so I think it's crucial. 100 crucial. You can't grow your firm if you're just focused on doing better lawyer work or hiring the best lawyers. Like if you got the best lawyers, they're expensive, they're probably wasting even more money. So I just think it's. It's massively important to focus on this and to audit your expenses and where you're spending your money frequently because you might fix it right now. And then a year from now, hey, where's all the cash at? Where's our profit?
Things Sneak back up, employees come in, they want this and that, they want to hire assistants, they want to hire or bring a new software and next thing you know it's out of control again.
[00:36:40] Speaker A: Yes.
[00:36:40] Speaker B: And so grow as well.
[00:36:43] Speaker A: It's very easy to do, isn't it?
[00:36:45] Speaker B: Another thing is messaging. So if I'm trying to attract a certain client, certain kind of case, like what's your website say, what's your marketing say, what's your social media, you know, how are you speaking to that potential client directly? And so you're starting to make a lot of changes around not just your advertising, but your marketing and your brand and trying to attract the right customer. So it's all weaved in together and you know, so this is important stuff for sure.
[00:37:17] Speaker A: Yeah. I think that you, I'm not into digital marketing. You know, you're the expert in that. And it's when you get that you get your niche, you get what they understand, what their problems are, you understand how to help them best and you get that voice, that consistent message across your website, social media, when you speak on the phone and the emails, everything you do attract more of the right kind of clients. And I think, you know, there's so much marketing out there now. It's everywhere, everywhere we turn around it comes to marketing and there's just so much noise. And all of us in business have to cut through that noise otherwise we're just going to blend into the background and then why would they choose us? The only reason is on price. So guess what, they don't want to pay you very much. But if you're niche and specialist, they're all good, they can charge well.
[00:38:05] Speaker B: You can, yeah. If you're niche, down, focused, you can charge more. And then as you know who your best customer is and you know how to help them, you can get more efficient. And then you start to work on things like client experience and onboarding and intake and you start to really dial those in constantly, constantly working and improve efficiencies, profitability and client experience. And then those clients are a higher chance convert to referrals. Yes, they're referring, you work back in. So it's not like you're just marketing for that one time lead, it's they return into a referral source. How do you guarantee that they do that? And that marketing that you spent six months ago is delivering you referral results hopefully for a lifetime. And so going all the way back to your first step is that allows you to start down that path so that you can get ultimately to the place where you're dialing it in so tight that the thing is just running and you don't. You have to market less, actually.
[00:39:05] Speaker A: Yeah.
[00:39:05] Speaker B: So, yeah, pay me less because your marketing is working for you.
[00:39:10] Speaker A: Yeah. You know, I'll finish off with the story I was doing. I've been doing this for 10 years. And the first seven years I was a generalist, I was a business coach. And I don't know, it's like in the usa, but in here, you know, I think we're less popular than accountants. No one wants to be in a networking meeting because they're a business coach. Everyone runs a mile. And because you're just generalists and you're trying to say the same thing to everyone and you're not really engaging properly around you because you're not solving a unique problem for them. And bearing in mind I've been talking about, yeah, you should niche your business to my clients. But wasn't doing it myself. And a lot of it I was, I was scared to do it because I'm stepping away from probably 90% of the people you know, the businesses around me, probably 95%. It seemed completely counter intuitive. So working with my coach, he said, what's now? I had lots of good successes in clients from engineering and outdoor schooling and law and loads of others. He said, who's the best client? So Stephen Ward, who I showed earlier, instead of results, why are people not smashing down your door to work with you?
It's because my marketing's rubbish, isn't it? And it was that moment I suddenly realized I need to niche down. But it was really. It's quite hard emotionally to do that because it's fomo. It's that fear of missing out. I researched the market. I understand what their pains are. I understood how I can specialize and help them. And it was only said, it's probably three years ago now, but since then I've been invited to write chapters for books on profitability in law. I've been invited to Florida to speak. I'm speaking over here. I'm on a podcast with you and other people. None of that had ever happened in the previous seven years. And I'm. Yeah, it's huge. It's. Most of us are scared to do it, but it's just huge. It helps you. Helps you help them more.
[00:41:01] Speaker B: Yeah. So if you have a law firm and niche down into an area as deep as you want, you know, good. Divorce for women only. Divorce for men only in Atlanta, you know, whatever it may be, look at that and try to focus down your message so you can be the expert. And they go, you know what? This person or this firm has got exactly what I need. And you're not everything to everybody, but. Well, John, I do have to wrap it up. Thank you so much for sharing. I mean, this is great stuff, everyone. If you weren't watching, we did have some visuals and some slide decks so you can get this. We'll send this out in our newsletter. And of course you can see Jeff.
[00:41:38] Speaker A: I forgot to mention I've got a QR code which if I share that on screen, people can take a quick.
[00:41:44] Speaker B: Shot if I just do that.
[00:41:46] Speaker A: I forgot this is at the end of the presentation. So I've got a whole bunch of resources they can have. So everything that I've shared earlier in detail and more, click on that, we'll connect. You'll just get it sent out. And if you do want to reach out with anything else, let me know, man. I'm absolutely more than happy and my American friends out there.
[00:42:08] Speaker B: All right, everyone, thank you so much, John. And yeah, click on there's a QR code here on the screen. Or you can go to summitbusiness.com and then check out John from there. And yeah, if anyone wants to connect with John or reach out to him, let me know. I'll make connection and see how I can help you out.
Everyone, have a great day. John, thank you so much for sharing. This is important stuff, so hope someone can apply it.
[00:42:34] Speaker A: Take care.
