Why Revenue Readiness Matters

Intro 0:13

Ready to get the inside to find equity funding. Insiders, experienced professionals, including bankers, underwriters, loan officers, and industry experts. Their unfiltered stories and valuable lessons on securing funds.

Jacquelyn Jackson 0:46

Welcome to TDJ Equity Funding Insiders, where we give business owners the information, strategy, and conversation they need to become better prepared for capital and long-term growth. I'm your host, Jacquelyn Jackson, founder of TDJ Equity Funding. Today's conversation is called Revenue Ready Equals Capital Ready. Many business owners understand their financial statements, work closely with their accounting or their CPA, and believe that that means that the business can be fully prepared to grow alone. But revenue operation goes beyond reviewing what the company has already earned. Okay? It examines how revenue is generated, how customers move through the business, and where opportunities are being lost, and whether the company has a system to turn additional capital into measurable growth. This is especially important when you're seeking funding. A lender may provide the money, but the business owner must know how the capital will produce stronger revenue and a return on the investment. Joining me today is Josh Shaner, he's the revenue operations director at Brave. Josh helps businesses look more closely at the systems, at the processes, and decisions that drive that revenue. Josh, I want to personally welcome you to our show today of TDJ Equity Funding Insider. I am so excited to have you here with us today to join the conversation.

Josh Shaner 2:16

Thank you, Jackie. Uh, I'm excited to be here as well, and thank you for having me.

What Revenue Operations Really Is

Jacquelyn Jackson 2:20

All right. So let's get it started. The first thing we want to do, let's talk about revenue operations. What is that? If you can explain that starting now.

Josh Shaner 2:28

Yeah, uh, the simplest way to explain revenue operations, it is primarily, you know, a tech terminology, but it is the strategy of connecting your marketing, sales, customer success, all that together to you know, to share the same data, the same systems, tools, and ultimately the same goals.

Jacquelyn Jackson 2:47

Okay, great. So they in the abbreviation is revenue operations, and abbreviation a lot of times I hear is rev rev op, right?

Josh Shaner 2:54

Correct, rev ops. Yes.

Jacquelyn Jackson 2:56

Rev op. All right, so we say that you all, everybody listeners want you to be aware that's what we're saying at the same time. So let's talk about

The Most Common Revenue Leaks

Jacquelyn Jackson 3:03

this. Uh, revenue, uh revenue inside companies that can look financially healthy on paper. All right. And we've had this discussion. What are some of the most common revenue leaks, leaks business owners don't realize they have? And how can those leaks eventually show up in their cash flow?

Josh Shaner 3:20

Yeah, that's a great question. And over the last couple of years, you know, Rev Brave has been able to uncover, you know, roughly six to eight major holes within most businesses' revenue systems. And not every business has all eight, right? Like some of them have two or three, others have 20 because of their industry or vertical, but really the most common ones start at the digital front door. Oftentimes uh site speed is one of the bigger ones, right? Uh, and it's one of the ones that are often ignored. But if a business owner actually went out and looked at their website and timed how long it took to load on a mobile device, for example, you know, you'd be surprised at how long it takes to load. And oftentimes your leads are gonna just jump off um based on the fact that it takes too long to load. And not only that, but you know, on the websites, you are typically collecting leads through forms. So if the form is extra incredibly long or uh strenuous to fill out, you're gonna get a lot less completions and a lot less conversions. So, you know, there are strategies around how to set up forms on the website so that they convert quicker. Uh, other common leaky holes include, you know, leads that wait too long to be contacted by the business. That's probably one of the most, the largest ones that is usually the quickest to solve. But the average business, I think last time I remember on the data, is takes about 42 hours to respond to a lead. And the studies show that if you respond within a minute, for example, you're over through, you know, about 300 times more likely to close that deal, something along those lines, um, and and five times more likely to convert if it takes one minute or less, for example. So speed to lead is a very real thing. Most uh sales leaders know this, but you know, oftentimes there's a disconnect uh between marketing and sales and how that actually gets done. Um, the other one options are like, you know, nobody actually getting a call back when they actually call your office, right? What happens when the team logs out at 5 p.m., for example, right? Well, who's gonna pick up the phone? And there needs to be a backstop there so that that traffic doesn't just leave, um, doesn't just leave the business, right? And that costs businesses lots of money every single year uh in the billions of dollars, you know, those missed phone calls. Um, the leads that nobody works, right? Uh and this is one of the most common problems that we fix today uh at Brave as a low-risk opportunity for clients is just the database itself. You've got, you know, hundreds, if not thousands, even millions at times of old leads just sitting in a CRM and collecting dust and nobody actually working those leads. So going back in there and um and looking at that that contact data and identifying, you know, who who is a potential buyer now is worth hundreds, if not millions of uh dollars, hundreds of thousands, if not millions of dollars. And then uh other other examples are you know, just nurturing leads. So leads that go quiet, but just never followed up on um asking, not asking for reviews or feedback. Um reviews are very important for most businesses, 95%, I believe, of customers, you know, actually read an online review before they before they do business with a business. Um and then yeah, that there's always the opportunity for cross-selling, upselling, renewal opportunities that tend to get ignored on the back end once you actually do business with a customer. Um, and a lot of times those are those are just overlooked because you know, most teams are interested in looking at uh new revenue or new leads coming in, and where can we find that new revenue? And they completely ignore the fact that they have an existing customer base or past customer base that uh may want to do business again. Um, and yeah, and so all of that kind of adds up to what you do with your lead generation efforts and your marketing spend, right? All of the, if you can actually close some of those gaps, if not all of those gaps, you're going to increase your return on ad spend and lower your customer customer acquisition cost when you actually fix those problems.

Jacquelyn Jackson 7:09

Okay, great. So, see, that's something we need to take. So, a lot of times, you know, businesses, we are about getting customers, you know, and like you said, having a system of getting those customers, and then we'll talk a little bit more, is also retaining that money because one thing, like you and I had a discussion is that, and we'll go into this one with our next question, too, is that people have like you have um 90-day receivables and you let it go to 120, you know. So you got to think it's somewhere in your system that something hadn't gone somewhere, you know. Like I told you, you and I talked about that, that you have to actually have someone come in and see what am I doing? You just can't assume you can. So you've identified like um the common revenue leaks, but let me ask you about this

What To Fix Before Seeking Capital

Jacquelyn Jackson 7:53

one. If a business owner knew they were going to approach a lender for capital, okay, in the next let's say six to 12 months, which of those leaks would you tell them to address first?

Josh Shaner 8:04

Yeah, that's a good question. And I would say, you know, to the business owners out there looking to see, you know, capital or some liquidity event, the honest answer is six to 12 months is usually not going to be enough to prove it, right? The you you can set something up in 90 days and have it running, but showing that it actually works takes, you know, a year, right? And that's really what I believe, you know, lenders are gonna want to see, especially underwriters. And so you can still start today anyway. And yes, I think the longer term, what you want to fix kind of immediately is that speed to lead problem. Um, that's where leads are going to convert the quickest. Um, and it's where you're probably leaving the most revenue on the table, is when you're not converting those leads that are coming in that are actually literally raising their hands asking you questions or wanting to buy something for you, but you because you are slow to get back to them, you know, to answer their questions or their objections, uh, you're really leaving a lot of money on the table.

Jacquelyn Jackson 8:59

Okay, so let me ask you this. So, other than just leads, I know that's your big thing, the automation thing you said really does help. So, your opinion, is it something else other than just the leads that they need to kind of concentrate on? Is it other parts as well in a business they might need to look at as well too?

Josh Shaner 9:15

Yeah, I mean, even in your in your example where you know your receivables are sitting 30, 60, 90 days, you know, revenue runs on the time it takes for somebody to remember to do something. So automating a lot of the the uh operations that um touch revenue in some way, shape, or form are very important. And and it really it it always comes down to when I talk to a business, you know, how long is a is a piece of string, right? We don't know what we don't know until we look at the business and assess it for the opportunities uh to identify where revenue is leaking out. And and really what it does, you know, kind of boil down to is everything that a lot of what we solve, you know, at my company are going, this stuff isn't going to show up on a report somewhere, right? Right. Businesses have a million things going on, uh, they've got a million different things, a million different fires that they have to put out, uh, but nothing is coming and telling you, oh, hey, you know, you've got a significant, I wonder how much revenue is sitting in my CRM system without anybody tapping it, right? It takes somebody to actually come in and say, okay, look at this. You know, you've got 100,000 leads in there. If we could wake up 3% of those and turn them into customers again, you know, what would that do to your bottom line? So it really does come down to the fact that, you know, you need to actually run an assessment and and do the work to uncover what is possible in your business.

Jacquelyn Jackson 10:34

Okay, great. So you mentioned um the old customer database. What could be sitting inside a company CREM or a customer's database right now that could potentially generate revenue faster than going out or finding a new customer?

Josh Shaner 10:49

Yeah, I mean this, I don't know if this is right to say on your show, but I mean, sometimes the revenue sitting in a database could solve your your you know liquidity or cash problem.

Jacquelyn Jackson 10:58

Yes, that is good to show on our show. It's good to say.

Josh Shaner 11:02

Yes, but what you know what any business who's been around for for a number of years and does lead generation in some way, shape, or form has a significant amount of old contacts sitting in the database, right? These are these are not just cold leads, they're the ones who you know raised their hand at some point and showed interest. Uh, and they could be old leads, they can be past customers, uh, quotes that just never closed. And and for whatever reason, they just didn't buy in that exact moment, right? It could have been up timing or budget or the fact that nobody followed up with that lead in that in that system at that time. And a lot of them are still interested. So owners typically think that those leads are dead, right? So nobody wants to work through them either because they're considered dead. Um, and the crazy part is that most business owners, you know, you've already paid for those leads. They're just sitting there um waiting for you to kind of wake them up, and it's usually the cheapest revenue that you'll you'll find in your business. Um, and so you know, you do it once, you clean out this database, you get a clean CRM system, and you actually generate a bunch of revenue from the customers that are already sitting in there. Um, and you know, you write down what comes back, and now you've got proof.

Jacquelyn Jackson 12:08

Exactly. So that's just telling us something as business owners, we have something we can utilize more for revenue. Now, going into revenue, um, I often have to tell business owners that getting a loan is not necessarily based on just your credit. Okay, the business credit or just that credit. What we actually found was that you it's more detailed of what happened. So on your side, how can a stronger revenue operation help an owner create a more predictable revenue story?

Josh Shaner 12:36

That's a good question. So, I mean, I can kind of use an example, right? Um, if a lead, you know, gets a call in four minutes on a Tuesday, for example, but it takes four hours for that lead to get a call back on Friday, well, nobody can really forecast that. And I think that's one of those problems, right? But when every lead, for example, gets the same response and follow-up in the same amount of time, then you can say, you know, we close 30% of our leads, right? And that is better than saying, oh, you know, we had a good year and had to and and where's the data to prove that, right? So once you know your close rate, for example, you can start forecasting. And yeah, I mean, that's that's kind of how I would I would I would approach that.

Jacquelyn Jackson 13:21

Exactly. And that is something that plays a factor in it. Again, they're not just looking at the money you've made, they're looking at what are you doing to get the return on your investment. Well, for them to get a return on investment that you're going to be able to keep going. It's not just giving you the one capital at that time, it's actually for you to keep going as well. So that is really a great uh explanation for that one.

Josh Shaner 13:41

I think another way, yeah. I think just another kind of comment on to your point is like you're not really lending against last year, you're you're lending against next year, and the way to show next year, you know, is to show the system that produced last year is still working, right?

Jacquelyn Jackson 13:56

So, and that's what I'm saying. That's what we're trying to teach our business to know that. So a lot of business owners they wait until they need the 250 or the 500,000,

Systems That Make Lenders Confident

Jacquelyn Jackson 14:05

right? Or even a million before they start, as we say, cleaning up the system, or as you say, for them to have a system. What system should already be in place before a company reaches that point where it needs outside capital to grow?

Josh Shaner 14:18

Yeah, I mean, on the lower end, if you're still using spreadsheets and paper, right? You probably need to get upgraded a little bit there, clean your books, and then get a CRM system that you're actually using, right? And a lot of people, businesses that actually have a CRM are only using, you know, five to 10% of the capabilities within that system itself. So that's where I would say is a good starting point for for the ones who need like lesser capital. If you're looking at you know, 500, you know, a clear, a clear sales strategy laid out in stages, um, you know, your close rates by stage, um, you know, follow-up that happens without the owner necessarily being in the room or having to tell somebody what to do is also a really important one. And then as you get you know into the larger, bigger, you know, funding numbers, you know, I think you know, you add it, you have to just kind of add fix all the leaky holes to show that the business keeps making money, even though you know the owner is gone. Like what happens at, you know, when the owner is off on vacation or out of country for three months, right? Can the system run you know without key persons or key people involved in the business? Right.

Jacquelyn Jackson 15:27

And they then and the way the banks look at it is this, and which we kind of can realize it, that they're giving you money that maybe you pay back over five or ten years. So you're having systems, not spreadsheets, it would give them more confidence that okay, he's gonna be here. He has a system for growth, and that's what they look for when it's money. So, just to kind of cap off what you're saying. So, let's say if a business has received a majority, a major injection or capital tomorrow, okay? From the Rev op standpoint, what needs to be in place so that that money actually produces growth instead of simply covering inefficiencies that were already there?

Josh Shaner 16:05

Can you repeat that?

Jacquelyn Jackson 16:06

Okay. From a rev op standpoint, what needs to be in place so that money actually produces growth instead of simply covering the insufficiencies that were already there?

Josh Shaner 16:19

Yeah, I think I think a business's first instinct when they get capital is to you know spend it on more ads, you know, generate more leads, um, or even fixing like one obvious leaky hole uh in the system, right? Um sometimes it is apparent and sometimes you want to go and jump to to fixing it right away. But you know, if the holes, if all the holes aren't fixed, then more leads will simply leak out at some other point downstream within the business. Um, and then you spend more and you're you're essentially using the same uh amount of time to kind of get the same results, right? So fixing one hole on its own usually creates a problem further downstream, which is why I think investing in the system up front, really actually starting from an investment in actually understanding what is going on within the revenue system itself, and then using that to identify what are the highest value opportunities to fix in the business today, so that when you actually go to spend that capital, you know, you're not just dumping it down a drain, you know, you're actually leveraging it with a system that's designed to capture as much of that interest as possible as it moves down the down the pipeline.

Reducing The Key Person Risk

Jacquelyn Jackson 17:35

Okay, so the so I know you talk about the key person's discount. Okay. So explain what that means, of course, the key person is scout.

Josh Shaner 17:45

Yeah. So I'm I'm not an MA guy or advisor, but you know, we I do spend some time in those rooms. And, you know, oftentimes that key person does come up. And um, you know, usually that means when you know a lot of the business operates out of one person's head, right? The the sales processes are captured in there, the book, you know, pretty much runs through the owner. Um, and everything kind of lives and dies by whether or not this person is in the room today. So a buyer worries about the handoff and a lender worries about what happens next month. Um, you know, if an owner gets sick and has a bad quarter, for example, or you know, one big client eats up all their time, you know, follow-up stops, right? And so the business kind of freezes. And um, yeah, I think the the key person discount really applies, um, especially when uh I guess buyers and sellers are doing their due diligence. Um, and if they uncover this kind of fact, then then the business gets a discount, gets a haircut, um, and the purchase price is probably going to be lower. So uh yeah, I mean that's that's the key person discount the way I understand it and the way revenue operation solves that is to work with the leadership team to pull that information out of their heads, map that operation out, you know, and if it's already defined by SOPs, it's looking at these uh, you know, standard operating procedures in more detail and uncovering kind of what is uh possible from an automation standpoint to make this more on Rails, right? We say um at my company, you know, uh you systematize and automate um the things that can be done so that you can you know effectively uh humanize uh the exceptions.

Jacquelyn Jackson 19:23

Okay, and and I want to connect the finance into that, just like what you're saying. The underwriters, you know, we you know you got your loan office, but the underwriters, the process that really processed the loans, they look for that. They look as all this based on this one person, and I'll give you an example a truck and company. If you are one trucker and you want to get a loan and you have one truck, then it's gonna be difficult, and that's why they kind of put that as a high risk, you know, for lending, because it makes sense that if you get sick, you're not on the road, you only got one truck. So they don't feel comfortable funding a one truck compared to if it's five trucks and it's you and four of the guys. So I tell people when you do those types of business, you have to understand, and you know at some point you're going to want money, other people's money, that you have to take that in consideration. And I think that's where a rev company can come in and start building you to that point where you can. You want to add trucks, let's not just add trucks, let's not just add people. Let's get with a revenue operation team that can lay this out for you for growth. So we're not talking about the money you have made, we're talking about the money you plan to make or the growth. That's why we're doing the revenue uh operations series where everybody can understand how that really works with your business. So going into that, I want to kind of ask you if too much of the company sales relationship, customer knowledge, follow-up, and decision making live in the owner's head, how can that create a risk not only for potential buyers, but also for evaluating a business? I think you said something about it, but let's hear what you have to say again.

Josh Shaner 21:02

Yeah, I mean, I think we touched on that. If if all of this lives inside, you know, an owner's head, and I've gone through an acquisition before where this exact thing happened, right? Where our founder was pretty much the bottleneck to uh, you know, not only client services, but delivery as well. Um, you know, and she she paid the price for that. And I think, you know, the best way to kind of solve that problem is to work with, you know, an asset, you know, is to lay out, get in there, do the interviews that we need to do in order to extract that information out of the key prints person or the persons. Again, it's not just you know the owner that that might be the bottleneck. It could be the you know, the head of sales, it could be uh the COO, it could be the CFO for you for that matter, right? It could be anybody where the the systems kind of live and die inside someone's mind. And so the further the faster we can take that uh information, extract it, put it on paper, or not paper, but you know, the digital paper, so to speak, map out the operation and put Together, a roadmap that says this is what we've uncovered. Um, this is what it looks like today, this is what it should look like, and this is how we get there, and this is what it will do to the bottom line in terms of revenue, um, and also, you know, in terms of of you know whether or not you can be uh, you know, sellable in in 12 months, the sooner we can get there, uh, the better it is for the company. And then the the sooner that the system is designed and run, uh, you know, the the better it we'll look at after 12 months.

When To Bring In Rev Ops

Jacquelyn Jackson 22:31

Okay, so great answer. So my question is this, oh, gets to the accident. Uh so it's like standard of operations, you can kind of help us set up for growth, right? So what what point should I be at or business should be at when they start looking at getting a revenue? Is it reven a rev op? Should it be based on their revenue they're bringing in? I know you all have a cost board that I mean that you like, you know, your profit center, we get it. But in your mind personally, based on your experience, when do you think a company should start looking at bringing in a revenue optique?

Josh Shaner 23:03

Yeah, I I mean, in my experience, it's gonna be around that. I mean, again, the revenue isn't necessarily the best indicator, but it'll be around that five five million plus, right? This is where business owners are still, you know, the owner operators, but they are now feeling the pressure of their systems uh, you know, breaking, or they at least have an inkling that something is not right and that the business is not producing the revenue at the strategy uh that they set out with, right? And oftentimes that manifests itself into we need to hire more people, right? We need to put more butts in seats so that we can continue to grow. But then what happens when you add more butts in seats, you add overhead, you know, things get a lot more expensive. Um, so I think that is usually around the area where I see business owners really thinking, okay, how do we systematize um our business so that we can scale without necessarily adding headcount, we can keep costs lower, you know, while still driving uh revenue, you know, at the strategy that that we expect it to.

Jacquelyn Jackson 24:03

Expect it. And we're not we're not saying if you're making less than five million, not to reach out because the Rev team would actually tell you what they think you need to do. But I do know uh five million, our five million dollar clients are still acting like they are a one million dollar client. You know, they haven't had a time to change, and then in their mind, they say, Well, I'm gonna take on more jobs, I'm gonna get more clients. But like you said, you haven't taken care of the holes that you develop it as you grow. And I don't think businesses realize you develop holes as you make more money. It's just not make money we good, right? So, in your opinion, how do you think that would work? How's that working in your opinion of what you've seen?

Josh Shaner 24:40

Yeah, I mean, as a small business, you know, you you you tend to do everything on your own. And as you grow, you hire, right? And then as you hire, you realize that you need SOPs in place, you need documentation, you need a place to house data, you need a place to uh execute for uh on behalf of your clients, and you need some sort of repository to keep all of this together, right? At some point, then you start thinking in your brain, okay, well, I've got my CRM system. Now I need a bunch of other tools. Um, and so you start adding different tools on to help the business grow uh until the point where you've got this Franken stack, right? This, this you've got a hundred tools that you're using, and and then you turn around and you realize, like, oh man, my team is not using like 90% of these, and you know, the adoption rate of what we're doing is so low. Um, so we've got people doing a lot of work in the business that they otherwise shouldn't be doing, right? And and that's where kind of the chaos begins. Um, but as you scale, right, these are these are real world problems um that can be solved in advance if you actually sat down with a revenue operations company or or you know uh someone in the strategic uh role that understands automation, understands how that works within a business, so that they can actually map out the operation, not just what you're doing today, but mapping this out so that you understand what it would take to scale, right? And how to how to create that infrastructure early on in the business so that it can actually scale with what you want to do. Right. And then once you've got those, uh, that system in place that's running, now you're looking at problems from a different uh from a different lens, right? You're looking at you're looking at, okay, do I have the right people in the right seats? Not do I need to hire this person immediately to solve this specific problem right now, right? You've got the the the luxury or the bandwidth to actually hire right.

Jacquelyn Jackson 26:24

Right. And I see like like I know in the health, um, home health field, I see a lot of where uh we have they they're actually, you know, a four million dollar company and they are growing, but they have not stopped to look at your operation need to change. It's not that you open up another house, you know, and I've seen them do that, and what happens down the line, the money is running out. Not that you have bad credit, not that you're not having a cash flow, but I think what you haven't done is taken the money and show it as a return. So if I borrow $100,000, the banks like to see what did you make with a hundred thousand dollars? Well, I made $180,000. They need to see that, but we look at getting money to actually get, like you said, more people, more trucks, another building. We don't really look at it from that point, but you guys have an eye for that. You're like, now hold on before you get all these people or before you hire, let's take care of some of these hoes so when you grow, it doesn't tighten you up. So we want our listeners to know that as you build your company and everybody wants to be a multimillion dollar company. We get that, but you have to understand the responsibility that comes with that type of company, and that's why you can't just have a CPA or accountant or accounting department. You really need to look at having a revenue operation team to come in and look at you as you group. Do you agree what I'm saying?

Josh Shaner 27:41

Yeah, I mean, yes, there are the you know, the CFOs and the CPAs, they can look at the financial picture and they can probably identify some of those gaps, right? But what to do about them or what are the opportunities to solve those problems outside of the traditional way of doing so is probably a little bit outside of that wheelhouse. I'm not gonna speak for everyone out there, right? But uh what we're talking about today in in this new world of you know automation and artificial intelligence, the the the real I think the real the real problem is that people aren't thinking creatively about how to use it, right? People are still stuck in the world of like, I only use this stuff to write my emails or or or you know, move something from point A to point B. And they're not thinking about it in terms of like, how does this actually become infrastructure for my business and how does it affect everything from what we do at the digital front door all the way to how we you know handle receivables?

Jacquelyn Jackson 28:30

Exactly. Because like I told him, if you have customers, um, if you had a hundred customers come to your door, you're not gonna be able to service them, you know. So that's and you're doing all this advertising, but you haven't taken care of the operation part, the revenue. How are you gonna handle, like you said, from the time that person comes in the door or from the time that person makes that phone call, you pick up that phone call, it is a process. You know, it's not like what it was when you were making 250,000 a year, and that's where I see you guys are a a a well, not well, I want to say well-kept secret because you shouldn't be, but you are. They don't realize at some point where you need it now. Leading into where we are now, and I didn't talk to you about it, but I don't talk about it today with you.

Buying A Business: Revenue Due Diligence

Jacquelyn Jackson 29:13

What we're finding out, a lot of entrepreneurs are looking at acquiring existing businesses. Okay, so if someone is considering buying a company, what should they examine examine in that company sale and revenue operations before deciding what the business is really worth?

Josh Shaner 29:33

Yeah. I mean, I guess this is uh it's a I guess it's a question of like how how much of a or how good of a turnaround person you are, right?

Jacquelyn Jackson 29:41

Right.

Josh Shaner 29:42

How much work you want to actually do? Um, yeah, but I mean on the buying a business side, um, you know, I would be asking questions of like where do where do these leads come from? You know, is it written down anywhere? Um, you know, how fast do they does the business actually respond to them? Um, you know, can we pull those times from the CRM, for example? Do we know is the notes good in there? Um, you know, what is their close ratio? And is that consistent, for example, across the sales team? Or, you know, is that skewed or inflated by like one or two exceptional individuals within the organization? Um, you know, how many old leads are in the database, right? Like uh and when when did when was the last time anybody looked in that in that pool for for for money? Is anybody working them, right? Um, that's upside that you can that you can price right in. Um, what happens when a deal goes quiet, right? What is the process there? Um how much how much of the revenue depends on on the owner personally, right? Versus, you know, that's a big yep. And you know, if the answer to any of these is you know, it's a person's name instead of an actual document, right? Then then that's a risk. And I think that that's where you can kind of identify that. And on the buyer side, this is why it's very important. You know, you're doing due diligence and you've got quality of earnings people uh looking at the financials, right? But nobody's really auditing the revenue system. And that is something that we can help with is we can come in and alongside the Q of E, right, or the due diligence team, and we can identify look, hey, here's everywhere revenue's leaking out of this business, right? As if this is what you can discount it on, and this is what you can fix so that you're uh you're so that this business that you're acquiring is profitable in in 12 or 24 months.

Jacquelyn Jackson 31:22

Right. And see, I think what people understand, uh lenders underwriters, they think like you guys. Now, do they tell us anything? No, they they but that's the thinking of how they're looking at it. Like you're acquiring a business that is all in the owner's head, so we have a problem here, and so that's usually what goes on when that type of thing actually happens, okay? So I do understand what you're saying on that part. So we do have another question that's coming in. Let's see. So I never I know you glitched a little bit there, but I got you. So we are back. So um basically just uh confirming what you're saying, agreeing with what you're saying on us when we're looking at acquiring a business, you have to look at that operations I set up, revenue. You have and it's not just the financials, because you know they think it's oh, they showed it they made money, but like you said, a good question. Let's talk about this CRM, let's talk about these existing customers, where they come from, how do you handle them, and things of that nature. So those are things that I think you guys are more apt to kind of learn and how to do

Three Fast Moves To Get Ready

Jacquelyn Jackson 32:20

those. So our final question is that I want to start is well to say end is finally for business owners listening who believe they may need growth capital within the next year, what are the first three things you would tell them to do now to strengthen their revenue operations before they ever submit their funding application?

Josh Shaner 32:39

Yeah, um, that's a good question. You know, I'm not looking at this from a lender or underwriter's perspective, but from a business owner's standpoint, I would I would say find out how long it is it takes for you to actually get back to your leads. You know, how long do they wait for that response and and how is that affecting your close ratio? You know, it's as simple as going back and looking at the last few leads that have come in and identifying how you know when that inquiry came in to when somebody actually responded to it, right? And and what happened to it after that. Um, and then the other option, you know, again, is this this idea of reactivating that database? Work your old leads once and write down what comes back. You know, oftentimes that is a really quick capital injection for the business because you know what we're seeing on our end when we do the database reactivation is we're seeing an average of three of the three percent, you know, of that database becoming customers again, which which can be a lot of money, right, for for a business. And um, I guess another thing that I would look at is um you know, taking those uh key decisions or those key operational components uh from an owner's head and systematizing it. Um that's probably a really big one. Systematize and automate whatever is routine, humanize the exception, right? Get that stuff out of uh out of people's heads and put it down uh and identify, you know, does this process still make sense? If yes, great. Where can we where can we implement automation uh to help systematize those routine things, right? Take the take the work off of people's plate that they don't necessarily need to be doing so that they can focus on being um the best humans they can be, for example. Um yeah, and all three of those can kind of be done in 90 days, like I said, you know, each one gives you something to show. Um, but really what we would recommend is you know doing this 12 to 18 months before you're actually looking to get capital or or some sort of liquidity event, because this uh that has the ability to affect the the the picture um when you get closer to that that that event.

Jacquelyn Jackson 34:34

Exactly. Because even with ARs, you got receivables that's out. If you have them over 90 days and you used to that, the bank doesn't like it over 90 days. They don't like it over 60, but they'll deal with you over 90. So that's where you guys can come in and stop, or I guess I call it stop the bleeding, you know, is where you can help it. Because we want to be healthy when you go to a lender, and you know, and that's the whole system. How is it? We know we have the financials, you know you have your CPA and all that information. You've been audited and all that stuff with your tax, with your insurance, I mean your um with your financials, but you haven't got you haven't, I guess, honed in to the point of you having showing them you having revenue next year. And that's what they're looking for, especially if they're giving you a loan for five to to ten years. So we definitely want to do that. So is there anything else you want to say to our audience that you they you want them to take with them today?

Josh Shaner 35:28

I mean, I I would say, you know, look at look at the just I guess sit with the business for a minute and kind of under and see if you feel any of the of the of the problems or the challenges that you know we mentioned on this, on this, on this video or this podcast today. Like, where does it feel like something is off? If yes, right, start there and kind of identify or work backwards and and and stop thinking about the leaks in the revenue system as you know, change falling out of your pocket. Somebody described this to me at some point as like looking at these holes, you know, oftentimes to a business owner, it's like change falling out of their pocket. And it does look like change falling out of your pocket, especially when you've got all these other fires going on in your business and these other things, because the business looks fine on paper. What you're talking about, Josh, you know, are pennies uh to the dollar. But when you actually run the assessment, you actually use your own numbers to look at the actual uh revenue picture and see how much money is actually leaking out of the business. You know, it's no longer pennies, it's it's potentially an entire bank account, right? And that changes the revenue picture um entirely. And I think that's just one of those things where, you know, I guess you have to be a creative business owner to kind of look past uh what's currently on fire to see, you know, what further on down the line, what what do I need to be in 12 to 18 months? And how do I get there? And how do I increase or strengthen my revenue system so that we can hit these goals, you know, year over year without necessarily having to walk into these common issues with business when it comes to hiring, when it comes to processes, when it comes to new tools and technologies, right? Getting your infrastructure in place so that you are future-proof in your business, um, so that you have the ability to scale. Um, and when you do seek funding, you know, that picture is a lot clearer, that underwriting process is a lot faster, and you actually get what you want. So I guess that's what I would say.

Jacquelyn Jackson 37:19

That that is great. That is a great thank you so much for giving us that. So, what I want to do, Josh, we're getting ready to wind down that I want to thank you for joining us today and helping us understand why financial organization organized, excuse me, organization is important, but it is not the same as being revenue red. Am I correct? All right, so my biggest takeaway from today's conversation is that capital does not fit to fix a weak revenue operation, it magnifies whatever is already happening inside the business. Before business owners ask how much money can I qualify for, they should also ask what system do I have in place to turn that money into sustainable revenue and measurable growth. That is what it means to be revenue ready. And when your revenue strategy, financials, and operations work together, you become a better prepared for capital. Josh, please tell everybody about how they can get in contact with you at this time.

How To Connect And Next Steps

Josh Shaner 38:16

Yeah, you can um you can email me at josh at brave.co. That's B-R-A-I-V-E.co, or you can visit uh brave.co online. And online we also have um you know a very quick three-minute uh revenue assessment. It's a quick quiz that can actually give you a lot of information and insight into you know where your biggest leaky holes are in your business and uh tell you what to do from there. So please go on there and take the assessment. It'll it's just a nice little added value that we offer.

Jacquelyn Jackson 38:47

All right, which is wonderful. And we also will have him on our referral page at www.tdj equitylc.net where you guys can kind of go and get a little information and it links back to Josh. So you'll definitely be able to get with him, as well as uh we'll have this one showing on our YouTube channel as well. So to everyone that's watching and listening, we want to thank you for joining us on another episode of TDJ Equity Funding Insiders. Uh, if your business needs capital, you do not want to wait until the pressure becomes an emergency. Visit TDJquity LLC net.net to learn more, explore our resources, or schedule conversations. Remember, revenue ready equals capital ready. Until next time, keep building, keep preparing, and keep giving power to your vision. Thank you so much, Josh. See you all later. Bye-bye.

Intro 39:44

We hope you enjoyed this episode of TDJ Equity Funding Insiders Podcast. If you'd like to be a guest or get in touch with us, please visit our website at DDJ EquityLLC.net forward slash podcast or email us at podcast at DDJ Equity Funding Insiders.net. Until next time, take care.