welcome to thrive radio i'm your host Aimee Montgomery entrepreneur and digital marketing agency owner today my guest is Laurie Mcnaughton he is a business coach that helps business owners grow their revenue increase profits while reducing the hours they are working lori welcome to the program thank you for having me i'm excited to be here yeah so tell us about your journey how did you become a business coach well that's a question i'm not sure we have enough time to answer not kidding i will make it as
short and succinct as i possibly can when i grew up i wasn't the greatest student in the world in fact school wasn't my forte but in my past somewhere in there i started reading books on personal development and it just started to hook me on this idea of what learning is actually fun i enjoy learning and when i read a book and uh something makes sense to me and it puts into words what i think in my head it gets me all going so that started the journey i started taking personal development courses
i started to get into professional development through some of the continuing education at the universities fast forward to i was looking to get into a business on my own because i've always been a top performer everywhere i've gone and i thought but the people who make the most money are business owners and i'm interested in like most people i hope earning a fair amount of money i'm not uh i'm not one of these i need to be mega rich i like to travel i like to do things so i i need a certain amount of money to do
that and enjoy life so anyways i came across a company i won't mention their name just because i'm not with them anymore but they had this corporate culture and envision statement that was and they were being international this coaching company and i started looking into their uh background stuff and took some or hooked up with them to get more information about them and i just thought to myself this is like a perfect fit for me because i love teaching i love presenting i love coaching i love working with people
that was their whole thing and i knew because my whole background was sales marketing so i knew that there was a huge market for this because in my travels years up and down the highways in alberta you see a lot of businesses come and go people who put their entire life net worth into their business and struggled and didn't make it so it's heartbreaking when you see that so i knew there was a market for this so i joined the company i was with them for years and just like a rocket ship in terms of of
learning so it was it was a lot of fun i hope that was short yeah no that's great yeah it's always good to know the journey that you've walked through because so many people out there love to give advice but there's not as many people that have walked the walk so it's great what are some of the top mistakes people make when it comes to profitability i think one of the biggest reasons why so many business owners struggle to make profits because they spend too much time on the of activities
instead of the that gets them the most results understanding your profit margins you need to know when you're making money and you think well that just makes sense lori like who doesn't know that well i've been doing this for almost years now and so many businesses when i sit down and go through it so tell me one of your most profitable products or services that you sell and they can't answer that question so first of all understanding how to party markup your business and i always say it
from this perspective like it's you don't want to be average uh if you look up your industry on the internet google it what's the average net profit or gross profit whatever you choose to look at for this industry it's going to give you a number and let's just say for argument's sake we're talking about net profit and it says it's well that means it's somebody's got and somebody's got percent so you don't want to be you want to be you want to be
and so first of all put your focus in on getting your products and services priced properly but then make sure that it all of your conversations and all of your marketing and right through your entire organization's customer service is all about adding value because people don't shop price they shop value and if you look like a duck and you quack like a duck and you have feathers like a duck well you're going to sound like a duck and a duck is whatever i don't know if that made sense but it's
really about what makes you different than your competitors and how do you add more value than your competitors do and that's where you're going to find your profit how does your team dynamics affect your profitability and what are the key things that are most important to focus on that is a great question amy because that's probably one of the things that costs a great deal of business owners of their companies i read a book by jeff smart called who solving the number one business problem which is about people and basically he
said the difference between success and failure especially as a startup is going to be the people you hire and so having a robust recruitment process that really digs into under the blankets if i could call it that in terms of who is this person and what do they represent what are their strengths what are their weaknesses and what's going to show up when they're under stress most people have experienced this where they've been in touch with somebody who's in customer service who should not be in
customer service yes not that they're not good people it's just not a fit for them so having a robust hiring system and then i will say like would you send your hockey team out in a championship game without practicing of course not training training training so when you hire somebody have a robust system to hire have a really good induction system or onboarding system and then continually train them continually train them you can only ever get better i don't care if they've been there for years
if you continue to train them something new is going to come up something that's going to really sort of gravitate to the top if i can make if i can say it that way what are the five levers you focus on when coaching clients the five levers are around profitability in the company and so they are first off is lead generation when i'm talking about the leverage i'm talking about the levers of profitability how do you create more profit in a company so that one is the lead generation strategies that you're using the other
is conversion rate the other is number of transactions so how many does your company do in a day a week a month a quarter a year how many transactions does your company do with if you're in the service industry with a particular customer and then average dollar sales so that really boils down to when somebody comes in to buy something they don't just buy what they initially thought was the only reason they came in there and then the other is profit margin just to give you an idea of an average dollar sales strategy that i think is just gold
is let's just say you're gonna paint your bathroom you go okay well i think i need about a gallon of paint i need a paint brush and a roller and you go to the paint store and you say hey listen this is what i want this is the color that i want and they say great while we're mixing this up and getting it landed here's a list of what other people have used on small painting projects like yours that made their painting project go that much smoother and so there might be edges it might be drop costs there might be tape whatever
those are uh that is just a perfect beautiful strategy because that person gets to go home with everything they need to do their painting project and have fun do it and they spent an extra dollars with you and if you multiply that by a thousand you start to see the the value in that so the five levers are number of leads conversion rate number of transactions average dollar sale and your profit margin and i always start with profit margin because like if i go through your company and we can take out of your cost of goods sold
and out of your expenses that goes right to the bottom line and then i want to go to conversion rate because i don't want to waste good leads respects i want to make sure that i know what i'm doing on my team knows what they're doing or your team if i'm working with you to convert those people because if you have people who your conversion rate is out of and you increase that to you can see the power of that right away so those are the five levers i hope that answered your question yeah definitely
and so let's talk about the rule because you hear this kind of phrase floating around a lot but not many people actually give a definition to what that is so from your perspective is the most profitable focus for a business the would be different for different businesses like if you're a small mom-and-pop operation your is going to be different than if you're like i'm working with a client now that their company did million dollars last year his is completely different than what their
is but i mean i love the rule basically for those of you who are completely clear on what that means is like italy and i love the way that it was i read this one time and said of the people who go to a picnic will eat of the food of the people who go to a party will drink of the booze and that will become evident shortly thereafter the point of it is is like if you're like the ceo of a multi-million dollar organization you're is strategic it's like what markets are we going to
go into what are the best products and services that align with what we sell where we can add additional value now that would also be for a small company too because if you have a small retail shop part of your job as your is to make sure that you're doing your research to find the right products and services that sell in your store and also look stuff that isn't selling to sell it off even if it's at a loss and then use the money to buy those products and services that you sell more of that's another great
example of a if you're thinking about a sales person of what they need to do is to be making phone calls or going out and seeing people if they're outside sales i've done this with a lot of clients where we literally have taken their entire year of customers and categorized them by the amount that they bought over that year and it's always within five percent so it could be could be percent of their customers gave them of the revenue that they consumed so going back to your question about
what should they be focusing in on it's like okay so how do we grow the percent of those people that love us obviously and how do we move people up who are in the lower part of that to bring them into the and then strategically how do we gently let some of these customers go because they cost you money that's that's strategically one of the ways that you can have a big impact if you like if you're a service industry and you deal with the same customers on a regular basis to really analyze all of those clients and look because
there's of them that for sure you're not making money you're probably losing money on them send them a letter say hey listen we're taking a different direction with the way that we're doing our business right now and we can't service you to the level that you need to be serviced so here's some of our competitors who will be able to look after you and then put your sales team and your sip marketing team on focusing in on those ones that are and you've got to do some research around that
if that makes sense yeah i like that because i remember talking to somebody that he did web development and he built a solid business he'd been in business for quite a while making quite a bit of revenue but when he first started out he just went out and just got whatever clients he possibly could and really did not charge enough he was running like say google ads and he was charging a month and he was losing money on every single one of them because he was having to pay workers to do the work to manage their
social he was i think there was managing their social media and running ads and he was like it was chump change that he was charging them yeah and he really needed to let them go but he was like oh but they were so loyal to me and like yeah because you're so cheap but yeah to your point they're actually costing him money and so yeah i think that's really important to think about when you're building your business because i've even had other people say oh i like about retainer fees if you're
going to charge a retainer fee oh you could only you could charge a retainer fee of dollars it's like yeah for what like how much work am i going to have to do for that because that's really not a lot of money important to be able to think all that stuff through and make sure that your pricing is consistent with keeping your business going yeah absolutely certainly part of the of business owners is to understand exactly what their target market is and market to those people that your marketing language needs to market to
those people and get those people's attention what are some of your client success stories so i've been at this for a while i love a bunch of my clients i've worked a lot in the construction industry and so one of my clients was a renovation company and he was doing a little less than a million dollars in revenue and he was paying himself like next to nothing and not making a profit and we worked together for about two and a half years and he went to and actually in the first year i went to a million and a half but
one of the strategies that we did with him right out of the gate was continually raising his prices because he wasn't charging enough money and he wasn't getting any pushback from anybody so he is when we talked about this like you gotta raise your prices to the point where you start to get a little bit of pushback from people saying wow that's a lot of money and it has to be a significant amount of people saying that it can't be one person going well that's too much it has to be if you had leads and
and percent of them were telling you that you were too high well you might think about that start to adjust things at that particular point first of all we streamline a lot of things we systemize a lot of things we took him from sort of looking like a contractor that was just flying by the seat of his pants that one that was highly organized he had documentation every step of the way and he would go through the documents with all of his clients and yeah he just did all kinds of great things and built up a beautiful culture in fact
i was invited to one of their christmas parties and he had created what we call his core values or his cult culture statement or whatever and at one point during the evening so i think he had about a dozen core value statements people in like individually got up and recited one of these uh core values it was a touching experience like i knew it was too for certain his wife had tear in their eye and that producer doug had tear in his eye as well because he felt like he had because doug was very much a people person
and he wanted the people to come to work for him to have an exceptional experience another guy that i worked with also in the construction industry his dad passed away and so he ended up taking over the business and it was a pretty pretty good business and but it had some of the sales had dropped down considerably and we sat down together the first time and it was just i think just shy of million and then i can't remember if it was three years later somewhere in there three three and a half years later it
was million so it grew dramatically and then at that point we changed the strategy to put more focus in on the profitability of the company and grow the profits i got a plethora of smaller businesses that were somewhere around the half a million getting them up to a million and a half two million starting to pay themselves nice money when i talk to clients i always say top line is vanity bottom line is sanity so yeah it's nice to say i built a million business or a million or a million or million dollar business
but if you don't make any profit it's a whole lot of energy for nothing so i i like hyper focus in non-profitability because i mean business it's funny it's not much different than your home one year you start to make more money somehow seem to spend more money yes their expenses start to grow and there's went from half a million to a million and a half or two million but they're not making any more money that's not right that's not the way it's supposed to work i got one more that i'll share with you
because i kind of like it for anybody's company out there that does a lot of transactions and you sell a lot of products or small services or whatever this guy had a car wash and a gas station in the convenience store that did and a half thousand transactions every month between all of these things and so we just focused in on his average dollar sale and brought it up by .
multiply that by you start to see the power of that i can name not one more because he was working seven days a week he owned a drywall contracting company so he was the company between the subcontractors and the builders and he was working seven days a week he was he won't mind that i share this with him he was about or pounds maybe more overweight and just struggling to get by well in he had his most profitable year ever did nine million dollars in revenue and close to a million dollars in profit
and now this guy i think he weighed about he weighs about now and on any given day uh one of his facebook posts is going to be him climbing a mountain someplace so guys like that i just i could i really appreciate that part of it i mean i love to grow the business but i also think of the family unit a lot a lot of business people sacrifice everything to be with their families to build a business and also now that they are or maybe not successful but now they don't even have a family unit anymore and so i like
i really get excited like i don't say like i out of the almost clients that i've worked one-on-one with i have seen over million dollars of revenue increase and increase in profit building but what i like most is about a reduction in the amount of time they're spending at work so that's a pride point for me because families are important they're more important than everything else i like what you pointed out that sometimes it's not it doesn't have to be a grand shift but when you can make small shifts to
increase revenue then you can still produce dramatic results that's what i like yeah absolutely when i do a presentation i talked about just a increase in each one of those levers but that produces a increase in revenue and a increase in profits because it compounds thing i understand about growing in business is it's if you increase leads and increase your conversion rate and you increase what you charge them and you sell them more when they come and you cut your costs it goes up exponentially
so what do you think has been your truth that has gotten you this far in your journey i think the one that probably comes to mind more than anything is to first of all understand that all that i've learned in my entire life with there's books on this bookshelf and there's probably another in my phone and i've been to plus conferences around the world and done a dozen multi-day personal development things so this idea of continuously learning is certainly a truth if i could call it that but the one thing i want to
want to say that i think has a bigger impact is lowering people's stress levels in my lifetime so i'm like closer to the end than i am to the beginning but i still got a long ways to go and i've at times in my life experienced a stress unhealthy stress and i think anybody that when i say that can just go oh yeah i know exactly what you're talking about being able to bring that to business owners to like with vernon the guy that i was talking about that guy was completely like stressed i'm not sure
he'd be alive today if if he hadn't made those changes and i don't mean not to say that in in any kind of a light weight like i said he was way overweight uh consuming way too much alcohol and now he doesn't drink it all and he's having a blast with his life so i gotta say my truth is that i love the idea that when i work with business owners i can move most if not all of that stress because stress melts away when you start to think differently about things and understand things differently because it's not just about the pieces
of a puzzle that you put together to grow a profitable business but also to start to look at what are the most important things to me in life that kind of thing because then that's when you start to re-evaluate stuff and look at things from a different perspective one more question if you were able to give yourself one piece of advice when you first started out what would it be don't take myself so seriously and i think most people have heard that before life is a journey it's not a destination because the
destination is a pine box so to have fun just to have fun along the way i would say that probably is the most important thing that i've learned i like that so lori if there are people that are listening that would love to work with you what is the best way to contact you probably the best way is just to email me it's lori lauriemcnaughton.
com i can spell that out l-a-u-r-i-e at l-a-u-r-i-e mcnaughton is spelled m-c-n-a-u-g-h-t-o-n dot com i will also put all of your links down below so people can get a hold of you thank you so much for coming on today and sharing your expertise thank you for inviting me i gotta say i really enjoyed it and i hope that some of the information that i provided whether anybody decides to seek me out for some coaching or not i hope that it adds some value to your life and your business definitely and if you're listening and you want more information about this
podcast or upcoming shows you can visit a call to thrive.com thank you everyone and have a wonderful week