(0:00)If we don't have time for strategic thinking, if we don't have time for just thinking, (0:05) then we're just going to be running around in circles wasting a lot of resources, (0:09) energy, and capital in our businesses.

Welcome to The Margin Method, where we talk about how (0:14) to grow profitably, create margin across your finances, operations, and leadership, (0:19) and build a business that runs without you and grows without burning out your team. (0:24) I hope you enjoy and subscribe.

Today, I want to talk about one of the big realizations that I had (0:29) on a recent trip to Paris with my daughter and my wife. See, when my kids were young, (0:34) I decided that I was going to make it a priority to do these one-on-one daddy-son, (0:40) daddy-daughter trips with my kids, because I wanted that time away with them, that one-on-one (0:45) time, and I wanted to create these memories early on, because I knew, based on what everybody was (0:49) telling me, that time would go by so fast, and before I knew it, they'd be out of the house. (0:53) So that's what I've done year after year with my children.

And I always promised my kids that when (0:58) they turned 12 years old, I'd take them somewhere international. And hence the trip to Paris. My (1:03) daughter just turned 12, and it was an amazing trip.

Now, the way out there and the way back (1:08) was the same. My daughter didn't have her earbuds, so I let her have my earbuds, and therefore, I (1:13) found myself just sitting on the plane in pure silence with my notebook and my pen, which was (1:18) totally fine. So it's kind of nice not listening to music or being distracted by movies for the (1:23) entire flight.

Instead, I just thought about life. I thought about business. That's what I do a lot. (1:28) I think a lot about business. And I had this big realization during this trip. Now, I'm a big (1:34) strategy finance guy.

On the podcast, I talk a lot about strategy and finance and how when you (1:39) combine them together, it drives a tremendous amount of value. I've also spent my entire (1:43) career turning around and growing companies. So I'm a big numbers person.

And when I look at (1:49) companies, oftentimes I realize that they are living far below their potential, which means (1:55) they're not earning the profit and they're not generating the cash flow necessary (1:59) to create a sustainable and a valuable business. But, and it's a pretty big but, it's not about (2:06) just financial margin. It's about margin across the board, which I'm going to get into in this (2:11) episode.

Now, here's the deal. I was walking down the street with my daughter and my wife. I was (2:16) holding their hands. We're just sharing stories, sharing experiences and good food and plenty of (2:21) pastries, too many pastries, in fact. And it was an amazing trip. And I didn't have an agenda (2:27) other than a bike tour and a museum and a trip to the palace of Versailles scheduled.

But other (2:32) than that is a pretty open agenda for a few days, which is amazing. And we just had the opportunity (2:40) to slow down and just spend this time with each other. And I've had people say to me, because (2:45) I've been to 48 countries now, wow, Steve, I wish I could travel as much as you do.

And I'm like, (2:52) you can, you can, like you have resources, you have the same amount of time. It's just either (2:59) you don't make it a priority or more importantly, you don't make margin in your life. You don't (3:06) have the capacity to even do a trip like this.

And I had this overwhelming sense of gratitude (3:14) on the trip because I thought, wow, this is why margin really matters. And I'm so grateful for (3:22) this margin that I have right now in my life. But I know that not everybody has favorable (3:28) circumstances like this.

So you may be listening to this right now and you don't have the financial (3:33) margin in your life to do a trip like this. That makes sense. You should be prudent. I'm not (3:38) saying you should go out there and rack up a trip on your credit card if you don't have the money. (3:42) So you may not have the money, but more importantly, and I would suspect that you are (3:49) probably listening to this and the problem isn't a financial margin. It's more about a life margin.

(3:57) And look, I'm not perfect at this. There have been plenty of times in my life where I didn't (4:01) have margin in my life. For example, when I was a CFO of a billion dollar company, (4:06) my day was stacked meeting after meeting, after meeting, after meeting.

I didn't even have time (4:11) to go to the bathroom. At one point I told my assistant, I'm like, you have to schedule like (4:14) bathroom breaks because I'm just going back to back to back to back. And every meeting was running (4:18) over a little bit and it's just so hectic.

I had no margin. I had no time to think. I had no capacity (4:25) to be the leader that I needed to be. And guess what? We left a ton of money on the table when (4:29) I was operating like this because I was lacking operational and leadership margin.

And that was (4:36) the big realization on the trip is that it comes down to margin in three different areas, financial (4:43) margin, operational margin, and leadership margin. Like I said, I talk a lot about finance because (4:49) I believe if you understand the story behind the numbers and you can put in place really good (4:54) strategies to go execute on the story, right on what the story is telling you, you can make amazing (5:00) things happen.

And it starts with financial margin. Like if you don't have margin in your business, (5:05) guess what? You can't reinvest in your people, in equipment, in technology, in your operating (5:10) model and better products and services and your customers, et cetera. And eventually your business (5:14) will start to decline or you'll be disrupted.

So having financial margin is super critical. (5:21) And I'm not going to spend the whole episode on this. Instead, I want to talk about the other (5:25) two types of margin, operational margin and leadership margin.

Here's the deal with operational (5:29) margin. If you don't have systems in place in your business, in other words, you don't have (5:34) documented processes, you don't have standard operating procedures, SOPs, and you don't have (5:39) checklists. Guess what? The chaos is just going to scale as your business scales and you're going (5:44) to become the bottleneck to your business.

I've seen so many business owners that go to exit and (5:49) guess what? The buyer comes in and says, yep, we'll give you X amount, which is a lot less than they (5:54) could be getting because there's an inherent key man discount. But also they're required to stay (6:00) for one, two, five years to help with the transition because they play such a pivotal part (6:06) in their business. So that's what I'm talking about.

Operational margin. So many companies, (6:10) they don't have the leverage because they don't have the systems. When we go into an organization (6:16) and we help them to scale or we turn them around, we put in place an operating system. (6:21) That's how we do it. We don't just go in there and do a bunch of random one-off consulting (6:26) engagements for companies. We give them a system to follow to create repeatable results.

(6:33) But organizations, they lack systems. Oftentimes they just go out there, they get work, they do (6:38) work, they get work, they do work, and they get so busy in this cycle that they don't take a step back (6:44) to realize how to create systems. Or companies get so focused on creating a manual, right? They (6:51) start documenting processes, but how they document those processes and how they deliver (6:56) these systems or create mechanisms and structure so these systems actually exist doesn't always (7:02) align well with how things actually happen out there in the field, right? In the operations (7:07) of the business.

I was working with a company once and they spent so much money developing (7:12) these SOPs, standard operating procedures. In fact, they had a super thick manual with everything (7:18) documented out, but nobody referred to it because the culture, the behavior behind (7:24) the documented processes wasn't reinforced by this entire system. And that's what I'm talking (7:31) about.

Like you could have the best manual in the world, but if nobody refers to it (7:34) or they're circumventing the manual, then it's not going to stick. It's not going to be a part (7:39) of the business. That's why you need an entire system and documented processes are just a part (7:45) of this system. They're not the system in itself.

But if you're just running your business, like I (7:49) said, and you don't have operational margin, guess what? You're never going to be able to innovate (7:53) and you're going to burn out your employees or you're going to have key man risk. And so many (7:58) business leaders operate like this.

And then let's talk about leadership margin. Leadership margin (8:04) is where I struggle when I was a CFO of that company. Like I said, I had very little margin.

My margin came at five or six in the morning when I was going for a run because nobody could (8:09) contact me because even when I went into the office early, people found out that I was going (8:14) into the office early. So they'd come into my office and be like, Hey Steve, you got five minutes (8:23) and it turned into 30 minutes. And that quiet time quickly evaporated.

So leadership margin (8:29) is really critical because we don't have time to think as leaders. We're just constantly bombarded (8:34) with things and more and more stuff comes onto our plate all the time. And look, I still struggle (8:40) with this today, even though I know leadership margin is super critical.

If we don't have time (8:45) for strategic thinking, if we don't have time for just thinking or the space to receive revelation (8:53) and inspiration, then we're just going to be running around in circles, wasting a lot of (8:58) resources, energy and capital in our businesses. The realization that I had is not that this stuff (9:04) isn't important or not that there's this giant margin gap in everybody's lives. Like I realized (9:09) that working with businesses, I just realized that it extends far beyond just financial margin.

And oftentimes I just talk about financial margin, but what about the business owner (9:14) who is out there grinding? All right. They're grinding. They put everything they have into (9:25) their business, their life savings, they're leveraging their credit cards.

Maybe they (9:30) have a second mortgage on their home because they put money into the business. And at the same time, (9:37) they're trying to grow this business. They're also trying to manage relationships at home with (9:42) their partner or with their spouse or with their kids.

And it's just a lot. Or the business owner (9:48) who is successful and has tons of margin, tons of financial margin, but the relationships with (9:55) their spouse or their partner has slowly eroded over the years and they don't even know each other. (10:01) And the relationship with their kids is non-existent because they spent so much time up front (10:05) building their business and amassing this wealth that they lost everything else that's important (10:10) in the process.

Or the owner that's just grinding it out and believes in the hustle culture (10:15) and then later on spends all their money that they made trying to repair their health because (10:21) they find themselves in a health crisis because they didn't take the time to exercise, to eat well, (10:26) to sleep well, right? I'm looking at myself. I don't even sleep well. So these are the things (10:31) that are on my heart and this is what really hit me when I was in Paris.

I was like, okay, (10:36) there are things I need to change in my life to get more margin, but I know that other people (10:41) are struggling with this as well. And when I posted this on LinkedIn, there's quite a response (10:47) and it's like, okay, I hit a hot button for people. And this is something that I think is (10:52) really important.

It's just this idea of how do we create more margin, financial margin, (10:56) operational margin, and leadership margin in our businesses. And this is what I'll (11:01) continue to explore with you. So I just wanted to introduce this concept with you this week.

(11:06) And also I wanted to tell you about this three week challenge that we just put together (11:10) that helps companies to increase margin. So it's free. You could go to coltivar.com (11:16) and you could take a short quiz. It takes like 30 seconds to answer a few questions.

(11:20) And then we'll send you a customized three week plan. And then in the three week plan, (11:25) we provide instructions, guides, and tools to help you to increase your profit, to get more (11:31) cashflow, and to gain more clarity in your business by introducing you to the strategy (11:37) framework that we've used over and over again to turn around and grow companies.

(11:41) It's totally free, no gimmicks, just sign up. And then if you want support with this three week plan, (11:47) in other words, if you want to take the three week challenge that coincides with the plan, (11:51) the three week challenge gives you step-by-step videos to follow along with me as I walk you (11:57) through all the exercises in the three week plan. So you could upgrade to that if you're interested.

(12:02) Be sure to check that out. You don't need to be a financial person to understand this. You just (12:05) need to be a business owner or a business builder who wants more profit, more cashflow, and more (12:11) clarity.

(12:13) That's my gift to you. All right. Until next episode, take care of yourself. Cheers.