The Brian Beers Show

Ep 231: #1 Reason Why Most People Fail In Business

Date: November 4, 2024
Host: Brian Beers

Episode Overview

In this episode, Brian Beers delivers a no-nonsense masterclass on the most common reason businesses fail—running out of cash—and how to avoid that fate through rigorous, data-driven management. Drawing from his experience building an eight-figure franchise portfolio, Brian breaks down the critical metrics every business owner should track. He provides a step-by-step framework, spanning weekly, monthly, quarterly, and annual reviews to ensure lasting profitability. The advice is highly actionable, candid, and rooted in hard-earned lessons.

Key Discussion Points and Insights

The Vital Importance of Cash Flow (00:20)

• Main Idea: Cash flow is the lifeblood of business. Losing track of it jeopardizes survival.
• Brian shares his own struggles with cash crunches and payroll, emphasizing learning from failure:

  "I've run out of cash. I've had to put money into the business to make payroll. But over the last eight years, I have built a business that today generates over $45 million in revenue a year. And I saved the business by figuring out what the key numbers are that are critical and what numbers can I ignore." (00:26)

Building a Data-Driven Business, Not an Emotional One (01:25)

• Ownership Culture:

  "People can try to spin a story, but the numbers don't lie. And your team will take a higher level of ownership when they know what's expected of them. We're either hitting our numbers or we're not." (01:36)

Breaking Down Business Metrics into Four Timeframes

1. Weekly (02:00)

• Focus: Actions that drive direct, near-term results; changing habits.

• Metrics Tracked Weekly:

  • Invoices (jobs, car count, active clients)
  • Sales
  • Payroll percentage to sales
  • Cash balance
  • Number of new 5-star Google reviews
  • Number of customer follow-ups

  Tactical Tips:

  • Manual entry or handwritten tracking ingrains the numbers emotionally—> reinforces accountability.
  • "Writing the numbers down versus just reading them from an automated report is more impactful." (03:28)

2. Monthly (08:30)

• Focus: Spotting trends—"adjust if we're in trouble or double down if we're onto something."

  • Invoices and sales vs. same month last year.
  • Payroll % of sales.
  • Cost of Goods Sold (COGS) %.
  • Close rate (estimates vs. conversions).
  • Google review trends.
  • Marketing ROI by channel.
  • Past due Accounts Receivable (AR).

  Actionable Insight:

  • Payroll should be viewed as an investment, not a cost:

    "If we're going to add a new technician or like salesperson or whatever and they are going to make $5,000 a month, that we expect them to generate an additional $10,000 in profit per month." (10:30)

3. Quarterly (22:05)

• Focus: Major issues and strategic shifts.

  • Invoices, sales, payroll
  • Employee turnover rate
  • Sales breakdown by category
  • Inventory review
  • New unit/acquisition/development pipeline
  • Start/Stop Exercise (eliminate low-value tasks, start high-value)
  • Quarterly tax payment readiness

  Golden Quote:

  "Every business is in the people business that just happens to fix cars, paint houses, flip burgers, like whatever it is. And that turnover is very costly to your business." (22:12)

4. Annual (30:21)

• Focus: Big-picture assessment, vision, and setting the roadmap.

  • Review invoices, sales, payroll trends
  • Set a clear three-year vision for the company
  • Identify 2-4 massive annual goals (less = more)
  • Conduct employee reviews and set objectives
  • Name the next key hire required for growth
  • Thoroughly review company and personal debt

  Strategy:

  • "People often overestimate what they can get done in a year and they underestimate what they can get done in multiple years... a business can grow exponentially." (31:01)

Memorable Moments & Notable Quotes

• On Simplicity and Consistency:

  "Just be consistent. If you're going to track it with your loaded wages, make sure that's the number you always track and you're consistent, you don't flip flop... because they're going to be different." (06:52)

• On Google Reviews:

  "We get over 200 Google reviews across all my locations every single week. 200 reviews a week. And that helps our search ranking... The secret to getting reviews is to simply ask." (14:15)

  Motivating Frontline Staff:

  "A loss aversion is way more powerful than a reward in this case." (15:39) (Suggesting a penalty for not hitting review targets can be more effective than bonuses.)

• On Cost of Goods Sold (COGS):

  "Most of your cost of goods savings will become straight profit. And so it's very important to find ways to improve this number." (12:13)

• On Accounts Receivable:

  "If you do extend terms, you better have a good cash flow buffer to handle those 45 to 60 day terms. And don't be afraid to hound people for payments... It's your money, so go and get it." (20:45)

• Start/Stop Exercise:

  "What is something that I am not doing that I should start doing? And what is something that I am doing that I should stop doing? ...The biggest bottleneck in growing your business is you." (27:37)

• On Annual Goal Setting:

  "Whatever goals you set, take a picture of them and then set your screensaver on every single computer in the company to talk about that goals. They should be front and center of every single person." (33:13)

• On Debt Decisions:

  "Debt can be a great tool to accelerate your growth, but it also can be your downfall. And paying off a loan removes a weight from your shoulders." (36:00)

Important Timestamps by Segment

• 00:20 – The reality and consequences of cash flow issues
• 01:25 – Why tracking data (not feelings) is everything
• 02:00 – Business timeframes: weekly, monthly, quarterly, annual
• 03:15 – Creating your business tracking spreadsheet
• 06:30 – Payroll as the make-or-break business expense
• 13:35 – Leveraging Google reviews to drive business (and motivate staff)
• 17:41 – The business-boosting power of follow-ups
• 20:00 – Monthly review process and trend-spotting
• 22:05 – Quarterly reviews: turnover, sales breakdown, inventory, acquisitions
• 27:37 – Start/Stop: The entrepreneur's evolution and time allocation
• 30:21 – Annual review: setting vision, goals, and addressing the next key hire
• 36:00 – Final thoughts on debt as growth accelerant vs. existential risk

Summary Table: Key Business Metrics

| Timeframe | Metrics to Track | |---------------|--------------------------------------------------------------------------------------------------------| | Weekly | Invoices, Sales, Payroll %, Cash Balance, New Google Reviews, Follow-Ups | | Monthly | All weekly metrics + COGS %, Close Rate, Total Google Reviews, Marketing ROI, Past Due AR | | Quarterly | All monthly metrics + Turnover %, Category Sales Breakdown, Inventory, Pipeline, Start/Stop, Tax Prep | | Annual | All above + Three-Year Vision, Major Annual Goals, Employee Reviews, Next Key Hire, Debt Review |

Final Thoughts

Brian's message is clear: "Track what matters, ignore the rest, and you will see massive improvements in your cash flow and business health." Action beats overwhelm—start small, track consistently, and evolve your systems as you grow.

Everything discussed is available in his downloadable checklist (see the episode description). Brian ends by inviting questions and engagement from listeners, reinforcing his hands-on, community-building approach.

For aspiring or seasoned entrepreneurs—especially those in franchising—this episode is a practical blueprint for sustainable success and scaling up with confidence.