19 Jan 200 | How to Produce Predictable Profits with Hilary Hendershott
Welcome to episode 200 of Profit Boss® Radio! What an amazing journey it has been! I definitely want to thank all of the Profit Boss® listeners for your support and engagement over the years. I sincerely hope that this podcast has added value to your life and business.
In today’s episode, we’re talking about how to create and master predictable profits.
If you want to achieve predictable profits, you need to heal your relationship with money, master your profits in business, and then capture those profits in the form of personal income and allow them to grow in evidence-based ways. These steps cannot be skipped, yet countless experts and coaches will only teach a few of the skills, mindsets, and habits required to acquire and preserve the wealth you need and want.
This is why I’ve created a powerful new framework and an incredible new Masterclass to help you shorten your financial learning curve. The Masterclass will be February 22nd to the 25th, so be sure to add it to your calendars.
When you sign up for 2022: Your Most Profitable Year Yet, you’ll get live answers to your most pressing financial questions and start moving in the right direction to maximize your profits and minimize your overwhelm.
If you’re ready to kickstart your journey to financial independence, be sure to tune in and sign up for my new Masterclass to learn more!
Here’s what you’ll find out in this week’s episode of Profit Boss® Radio:
- How the Magic Profits Pyramid helps business owners make money work in a consistent way.
- Why you don’t need a six-figure MBA to run a small business.
- Why I’ve stopped using the term KPIs and instead refer to them as PGAs, and why they’re important.
- The one skill set that’s glaringly missing among all business owners who don’t achieve their goals.
- Why so many entrepreneurs struggle to turn their great ideas into powerful actions.
- The four practices to keep yourself accountable for greater profits and success.
- How to sign up for my new Masterclass in February.
The Money Blueprint℠ for Business Owners
The Money Blueprint℠ is profit coaching that puts you in control of your business finances for good. No more Head-in-the-Sand Syndrome. No more fear, stress, or shame. Simply total confidence. Learn more here!
Resources and Related Profit Boss® Content
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Hilary Hendershott: Well, hello, profit boss. Today, we are celebrating my 200th episode. Holy cow! What a podcasting journey this has been. I started Profit Boss Radio back in 2016 with a vision, a microphone, and some courage. It has been quite a journey. Thank you for your time if you’re listening to this. Thank you for your iTunes reviews. Thank you for reaching out to work with us if you have. We’re now publishing in all of the places in case we’re not connected elsewhere. I have a weekly newsletter called The Profit Boss Weekly, and I hope you’re connected to that because it’s often how you find out about timely things we’re offering. We’re also in all the other social places, LinkedIn, Facebook, I guess that’s Meta now, and I’m on Instagram. If you’re loving the Gram, would you connect with me there too at Hilary.Hendershott? I’d love that. So, while my team has grown and we’re publishing in more of the places that I think are expected these days, this podcast is still my happy place. Here, I’m offering medium-length weekly audio, plus the interviews of complimentary coaches and authors and experts to support your journey to financial independence.
So, today we are celebrating 200 episodes. Overall, I would love to connect with so many more of you personally this year and get really face-to-face virtually and maybe in-person I hope if the world goes back to sanity. So, we’re going to be offering lots more ways to do that. I do have a lot to say. I mean, how else do you fill 200 podcast episodes? But ultimately, I do this so I can connect with you. So, to that end, I will be offering a masterclass in just a few weeks. We’ll be together for four days in February, and I’ll be teaching the best of what I know is working now to create and master predictable profits, which are, of course, the source of your personal net worth. But more importantly, you’ll have the opportunity to get live free coaching from me and my highly trained coaches. So, it’s like listening to me on the podcast, except I’ve designed this masterclass just for you, and you can ask me questions live. So, let’s get on the court. Let’s get you moving in the right direction and really make 2022 your most profitable year yet. And that’s the name of the master class, 2022 Your Most Profitable Year Yet. Together, we can maximize your profits and minimize the overwhelm.
So, please mark your calendars for February 22 through 25 each day at 11:00 a.m. Pacific or 2:00 p.m. Eastern. I know most people announce masterclasses with two or three days to go, and this frustrates me infinitely because I’m inevitably already booked, so I’m giving you like five weeks’ worth. Today is the save the date, so please mark your calendars. We’ll be live in a pop-up Facebook group, and I’ll be offering you more details shortly. For now, though, if you’d like to register, please go to HilaryHendershott.com/2022. That’s HilaryHendershott.com/2022.
Many years ago, I learned how to transform my money mind and my financial results, and now I’ve dedicated my career to showing you exactly how to shorten your financial learning curve, how to heal your relationship with money, how to master your profits in business, capture those profits for yourself in the form of personal income, and then grow those profits in evidence-based ways. That’s a lot of steps but unfortunately or fortunately, however you want to look at it, they really are all necessary. If you’re going to attain healthy financial results, you literally can’t skip any of them. Unfortunately, most experts and coaches are only teaching about one aspect of effective money management, and that’s earning. And this podcast is one of the only places where we’re addressing all of the skills, mindsets and habits that are required to acquire and preserve the wealth you need and want. So, I know that really, truly getting a handle on your business and your money is a big undertaking. I do know that.
And today, because we’re celebrating 200 episodes, I have a brand new profits hack that I’m going to be teaching you that is truly going to change your life if you learn it and make it yours. So, just as a reminder, what qualifies us, my team and I, to teach what we do? Well, I’ve got three certified financial planners on the team. I’m one of them. Together, we have a combined near 45 years of experience in professional wealth management. We are profit first certified and we’ve been teaching business owners how to master the game of profits and money since 2014. As you know, I personally am a graduate of the School of Hard Money Knox, and now I have a net worth high enough that I could retire if I wanted to. Graduates of my programs pay off hundreds of thousands of dollars in debt and regularly achieve the other aspirational financial goals that they set when we work together. They set themselves free from the grind. So, just this week, another one of my graduates bought her first home in California, which is a really big deal. So, we celebrate wins like this with clients and graduates all the time. For more information, or if you’d like to see some of those graduates tell their stories, you can go to MoneyBlueprintProgram.com or just search my name on Yelp because those testimonials are all there for you to see in their own words.
Hilary Hendershott: Let’s get to today’s topic, which is the Magic Profits Pyramid. This concept comes directly from my work with hundreds of business owner clients struggling to make money work in a consistent way. So, we talk a lot about how to make money work on this show. But ultimately, you’ve got to make money work in the background so you can put business and family and joy and peace of mind in the foreground. You need systems that make money work for you that are elegant and that support you. So, for years, I’ve been watching the difference between business owners who get it and make it work and those who don’t. And today, I’m teaching those secrets. So, I call this the Magic Profits Pyramid because it’s constructed of three different processes or pieces, three sides of the pyramid, like a three-legged stool. If you set them up and remain loyal to them and honor these principles in your business, your profits and financial success should be inevitable. You have to do all the things, though. So, let’s dig into this framework, start to build it out in your business, and then we can talk about it live in February at the Your Most Profitable Year Yet Masterclass. So, please, again, get out your calendar and save the date.
All right. Let’s start high-level. Allow me to begin today by saving you $100,000. Ready? Here we go. In all likelihood, you do not need a graduate-level MBA to run your small business. How do I know? Well, I got my MBA about 10 years ago now, and I can tell you for certain most of the skills I learned there don’t translate to what I’m doing now. Of course, I met my husband in my MBA program, so it worked out for me, but I certainly can’t recommend investing in a six-figure academic program to meet your special someone. But one thing I learned definitely for sure through repetition was that what they were teaching us in almost every single class, I really think it’s the entire point of the MBA, is that the job of a CEO is to measure, track, analyze, and strategize. The CEO is the brain of the organization. She’s the air traffic control. So, again and again in class after class, what we learned was how to gather and analyze data in service of the profit margins of the company. And I don’t think you need to spend two-plus years and six or more figures to get that degree. MBAs don’t cost a million dollars but I have heard some of them cost like a quarter-million dollars now. So, I just saved you a lot of money.
I do want to share with you that it’s knowing this piece of the MBA that would really, really support your financial success. So, after having coached literally hundreds of business owners who all desperately want more profits in their lives and bank accounts, I can easily say this is the one skill set that is glaringly missing for business owners who don’t achieve their goals. It is the great differentiator, too. So, without fail, when I meet business owners who do this, they’ve got a reliable, growing, and profitable business. When I meet business owners who don’t do this, they’re inevitably overworked, overwhelmed, and underpaid. And that’s not what I want for you, profit boss. The “this” that I’m talking about is tracking and making decisions by a certain set of indicators. So, everyone’s heard of KPIs or key performance indicators. But the fact that everyone has heard of them and most small business owners still aren’t making use of them means their meaning and significance has really faded. It’s really like watered down.
So, the first and critical first side of the Magic Profits Triangle, I’ve stopped calling KPIs and I’ve now affectionately named profit generating activities or PGAs. Yep. PGAs. These PGAs, though, have nothing to do with Tiger Woods. So, what are PGAs? PGAs are the actions you or your team take that eventually lead to profits. They will evolve as your business grows, so you need to remain vigilant. They’ll change over time. And of course, everything follows the 80-20 rule. So, if you isolate your most profitable PGAs, you could soon find yourself working a few months out of the year and enjoying seven-figure compensation. Why are PGAs important? Because clarity about how to use your time and resources is what leads to a lucrative business. To become an effective strategist and to earn the profit that you want, you need to focus on a more data-centered approach. So, this is universal, whether you were born with a calculator or a paintbrush in your hand. But don’t worry, it actually isn’t hard. It might require changing a strongly held mindset such as, “Hilary, my brain just doesn’t work that way,” but it really can. I promise.
Finding elegant and meaningful ways for your business to measure success and shortfalls is not only critical, it’s literally your most important job. You’re the CEO and nobody’s going to do it for you. So, tracking PGAs drives you toward growth and optimization. Without knowing and tracking your PGAs, it’s like almost impossible to build a thriving business. So, the more you understand your numbers, the more effective you will be at making the right decisions about how to allocate your time, which is scarce, and your team’s time, your money, and your focus. So, what are some examples of PGAs? Okay. It could be the number of times you’ve touched a prospective customer, whether that be with a pre-written email, a face-to-face strategy consult, or even a gift that you send them. So, I think you’ve heard the old adage, “Nobody buys until the seventh time you’ve touched them.” In my business, I take the position nobody buys until the 20th time we’ve touched them but that’s the point is the number of touches. If you track those touches, that can be a PGA.
Second, the number of times you’ve asked people to refer a friend assuming 1% to 2% or more of them actually refer a friend who eventually becomes a customer. Next, the number of offers you’ve made in your weekly newsletter if people take you up on those offers. Then, the number of meetings you’ve personally had with your sales team or that your sales team has had with qualified clients mean that should seem obvious to you. That’s clearly could and should be a profit generating activity. The number of clients you received from that book you self-published because, for example, if you know you’re getting great traction from your book to real-life sales, you can focus on book distribution above and beyond other sales techniques. The number of people you’ve asked to come work in your network marketing team, the number of outbound phone calls you’ve made to qualified accounts, or the number of speaking gigs booked. That is a really big one for me. I do really well at speaking gigs.
Of course, you can also track vanity metrics like podcast subscribers, social media followers, and newsletter opt-ins, and those are really great numbers to know. But ultimately, your challenge is to figure out what actions you took to acquire those followers and then keep doing those things and keep attempting to convert those followers into buyers. And then, of course, you would need to track your effectiveness on all of these measures. For example, let’s say you’re a real estate agent and you visit 50 past clients and you receive one referral that turns into business. So, that’s a 1-for-50 effectiveness ratio, 1 out of 50 became a client. And now you know that if you need another client, you need to go see about 50 more past clients. Okay. Example number two and example number three sort of go together. So, let’s say you sold 500 self-published books and you got two clients. So, that’s 2 out of 500 or if you like to reduce, it’s 1 out of 250 effectiveness ratio. And now you know that if you need four clients to close out the year profitably, you just need to sell a thousand books. See how that works?
And then that dovetails into example number three, which actually like I said, goes hand-in-hand with example number two. Let’s say you’re the keynote speaker at a local business owner event, and it has 50 people in the audience. So, at this event, you sell one book per person so 50 books. So, if you’re the same person in the example above, you now know that because you need to sell a thousand books to end the year profitably, you need 20 more events with 50 participants to close out the year profitably. See how this works? And it can make things really simple, and I totally love clarity.
So, the second side of the Magic Profits Pyramid is a check-in routine. You need a regular and relatively frequent routine in place to measure, analyze, and strategize what’s happening in your business. I know it sounds simple but I also know that you know what I’m talking about when I say we entrepreneurs can be full of good ideas that got jotted down in notebooks, highlighted in Kindles, misplaced in Google Docs, and even professionally documented in lovely calligraphy on a business plan you write at a big event and get very excited about and then forget even exists. It’s happened to me. I’m pretty sure it’s happened to you. I have lots of calendar routines in my life to solve this problem now. But the one that’s responsible for the most money in my life is my weekly team meeting. Now, if you’re a solopreneur, I highly recommend you get yourself an accountability buddy because 99.99% of people cannot be trusted to keep promises to themselves. This is I’m not speaking to you. I’m speaking from my soul about all of us. I definitely cannot be highly trusted to keep promises to myself in most areas of my life. I’m definitely in this bucket.
And whether we’re talking about admonishing yourself to not have that last glass of wine or getting to the gym four days a week or even let’s say it’s making your own bed. If you’re a grown human, I’m sure you’ve experienced that making a promise to yourself and keeping it in your head is really far less effective than making a promise to other humans. And putting that promise on the calendar is like maximum effectiveness. You know, they say a goal is a dream with a deadline. So, I think that’s the phrase but it’s the same kind of story. So, I’ve talked before on this show about accountability buddies, and we have folks in my coaching program partnered up together if they don’t already have a relationship like this in their lives. It’s like a coach but it’s more of a friend or you just make an appointment to meet, close the loop on promises you made last time you talked, make new promises for the next time you talk, and most importantly, not let each other off the hook about these things. You’re trading value. You’re providing value to them and vice versa. So, this is probably a free agreement that you’re making with another business owner you trust.
For me, I mentioned that my morning routine here is my, I’m sorry, not my morning routine. My second plank of my Magic Profits Pyramid routine is my weekly team meeting, so each member of my team has certain responsibilities to fill out a giant Google Sheet. We track about 15 or 20 pieces of weekly data. We call it the sales dashboard. They fill those data points out before the meeting, and then we get together for a 30-minute meeting every Thursday. It’s fast. We have a tight agenda for the meeting. It’s a written Google doc. I have a Bookmarks folder in my Chrome browser for the meeting where I access the agenda, the sales dashboard, and the company mission and vision, and my own projects list. Amy is my Chief of Staff. She runs the meeting. We start with like a couple of minutes of small talk. Okay. But then actually, we all mute our microphones. We actually start by looking at our bigger vision and mission for the firm so that we’re reminded of and infused with the inspirational vision we have for how human beings relate to and are supported by money in the future. And then we look at our firm’s profit generating activities and we see what we see.
For years, I managed the company so that our target was to have at least two meetings with prospective wealth management clients on the calendar in the future at all times. That was my goal. Now, we’re almost 100% focused on growing the coaching program, so we’re looking at podcast episodes published, newsletter sent, and phone calls with business owner prospects who are considering being in our coaching program. These plus speaking gigs for me are our current PGAs. We review the promises we made last week and everybody says, honestly, whether they fulfilled on what they said they would. And if they fulfill on everything, great. But if they fulfill on everything 100% every week, counterintuitively, that’s actually a problem. And what’s that problem? Well, they’re not making big enough promises. So, come on, how do you grow in life? You intent and make efforts at things you don’t know how to do or don’t know how to accomplish and then you exert effort which produces stress, which enables you to grow and expand. So, the point is not that this weekly team meeting is an opportunity for people to look good by keeping promises or look bad by breaking them. It’s an opportunity for us to declare how we’re going to fulfill on our vision for the future and then go out and create a world that doesn’t exist yet. That’s the magic of being in business and the profound gift and opportunity of being someone whose life is about fulfilling a vision.
The magic and uniqueness of this particular aspect of how to interact with your vision, your plan, and your promises is actually this Magic Pyramid’s third side. So, let’s talk a little bit more about the routine, side number two of the pyramid before we move on. Okay. So, for my team, every person on the team has the opportunity to say if there’s something they need from us to get their job done. And then we look at next week’s calendar and I, as the CEO, ask them to make certain promises for results that we’ll accomplish. I need them to do the things I see need to get done and they get to make promises they want to make as well. So, we do this team meeting, like I said, for 30 minutes every week. If you want to do every two weeks instead of every week, that can work too. But that’s the least frequently. I would recommend you do this. You definitely need to have it in your calendar to check in on your PGAs and strategize your activities, your upcoming activities based on those PGAs at least twice a month.
Okay. So, Magic Profits Pyramid side number three is have an impeccable and accountable relationship with your word and your results. All right, that’s more of a mouthful than the previous ones. I’m going to read it again. Have an impeccable and accountable relationship with your word and your results. So, if you’ve read a book called The Four Agreements: A Practical Guide to Personal Freedom by a man named Don Miguel Ruiz, you’re familiar with the idea of being impeccable with your word. If you haven’t read the book, it’s short and it’s probably life-changing, so I highly recommend it. Go out and grab it on Audible. The Four Agreements, it’s not really a business book. It’s more of a personal development book. So, there’s a little bit to add to Mr. Ruiz’s definition to keep your magic profits pyramid standing.
So, here are the practices I’m talking about. There are four practices and I have them numbered. One, keeping our word to others. So, keeping our promises. So, of course, this is not mysterious to you but it bears repeating. Two, not using our words to tear ourselves or other people down. In other words, refraining from gossip, including to ourselves, about ourselves. I do realize that this doesn’t seem on the face of things to translate to the profits pyramid but my experience is, it increases not only satisfaction in life but also profits. So, I hope you’ll trust me and try it out, and I’m convinced you’ll discover the sort of magical confidence and power that appears when your inner voice becomes supportive of you. Dr. Jim Loehr is a world-renowned performance psychologist. He’s a coach of Olympic athletes and author of 17 books, and he said the following on the Tim Ferriss podcast, “The power broker in your life is the voice that no one hears. How well you revisit the tone and content of your inner voice determines the quality of your life. It is the master storyteller, and the stories you tell yourself are your reality.” Okay. So, that’s the second aspect of an impeccable and accountable relationship to your word.
Three, the third aspect of this definition is honoring our word to ourselves, meaning keeping the promises we make to ourselves. After years of working on this, as I kind of mentioned before, I have found that in most cases that means I can’t actually keep promises in my head. So, even promises I make to myself, whether those be about personal care or how I want to be in my relationship with my husband or what kind of mom I want to be or making new friends on the island of Puerto Rico, I make efforts to write them down. I share them with an accountability partner. I get them out of my head and into communication with another human being about them. You might try that if you struggle with this, which I think most people do.
Fourth and final piece is dealing with when we don’t keep our word as an opportunity to learn and grow and get better, rather than an opportunity to make excuses. And it’s this piece that can be really the most against the grain. So, you might even find that, for example, if you say to someone, “You know, I said that I would make 50 sales calls last week and I only made 40. So, next time I’m going to do X, Y, and Z, I’m going to rearrange this. I’m going to put this on my calendar in order to keep my word and make those 50 calls.” And that person might say something like, “Can’t you just let 40 calls be enough?” Right? And if you think about it, most human beings do kind of have an unspoken agreement not to call each other on things. We let each other off the hook on things. I feel this unspoken agreement’s presence with friends and family. But if we’re ever going to learn how to produce results that we don’t know how to produce now, of course, we have to press through our current levels of ability and intuition and effectiveness.
And maybe 40 calls is enough for you if you get better and more effective at the calls but the point is I want you to be able to keep your promises to yourself. And if you promised 50 calls, let’s figure out how to have you complete 50 calls. And those remarkable, extraordinary results will start to translate directly into remarkable and extraordinary profits. I actually think personal accountability is one of the most critical yet under-discussed skill sets for CEOs. I, to be honest with you, I’m always a little shocked that almost every business book and productivity book doesn’t start with this as a foundation.
All right. So, as a recap, the Magic Profits Pyramid is, first, let your profit generating activities dictate your schedule. Don’t let your email dictate your schedule. Don’t let other people’s emergencies dictate your schedule. Don’t let incoming calls or text messages dictate your schedule. During the business day, let your PGAs guide you. Second side of the pyramid is tracking and recording PGAs and results periodically, either weekly or every other week. I can never remember if how you say that is bi-weekly or bi-monthly. I think it’s bi-monthly but maybe some kind soul will write in and tell me the answer. But the point is pick a day of the week or every other week to circle up and track your results and let those results and your goals inform your promises for the next tracking period. The third and final side of the Magic Profits Pyramid is creating an impeccable and accountable relationship with your word, which is what enables you to become more effective at producing profits with the same level of activity.
Hilary Hendershott: Profit boss, I hope you’ll join me for my upcoming masterclass, which is all about making 2022 your most profitable year yet. Go ahead. Save the dates February 22 through 25, 2022, and get yourself registered by going to HilaryHendershott.com/2022. See you soon, profit boss.
Hendershott Wealth Management, LLC and Profit Boss® Radio do not make specific investment recommendations on Profit Boss® Radio or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.