KPIs to Track

Podcast Transcript

Announcer:

Welcome to The Sound of Automation, brought to you by Clayton & McKervey, CPAs for growth-driven businesses. We hope you enjoy Episode 2, KPI’s (Key Performance Indicators) to get your business to the next level.

Denise Asker, Director Mkt., & Practice Growth:

Well, Bryan, back again.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Episode two, Denise.

Denise Asker, Director Mkt., & Practice Growth:

Yeah. How are you feeling?

Bryan Powrozek, Senior Mgr., Industrial Automation:

This is becoming a regular thing.

Denise Asker, Director Mkt., & Practice Growth:

It is. It is. I’m liking it. So I listened to the first podcast and you didn’t do.

Bryan Powrozek, Senior Mgr., Industrial Automation:

I’m sorry about that.

Denise Asker, Director Mkt., & Practice Growth:

… half bad. You were all right.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Well, maybe I’ve found my next calling, the third act of my career.

Denise Asker, Director Mkt., & Practice Growth:

I think so. You are breaking those stereotypes of what a CPA does all day as a part of his day job.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Exactly. Well, some of us can be fun too, Denise.

Denise Asker, Director Mkt., & Practice Growth:

I see that.

Bryan Powrozek, Senior Mgr., Industrial Automation:

It’s not just marketing people that can be fun.

Denise Asker, Director Mkt., & Practice Growth:

Oh, Okay. All right. Fair enough. So was this one of your KPIs for the year to do The Sound of Automation?

Bryan Powrozek, Senior Mgr., Industrial Automation:

Exactly. My KPI was if I hit three-

Denise Asker, Director Mkt., & Practice Growth:

Yeah.

Bryan Powrozek, Senior Mgr., Industrial Automation:

… I was good. Anything above that was exceeding my performance and anything below was… So I hit it. I hit my goal for the year. I can rest easy.

Denise Asker, Director Mkt., & Practice Growth:

Good. Well, we know these days, it’s all about metrics, right? And it’s all about the data. We’ve got metrics for project management, for performance, for efficiency. Every everywhere you go, there’s metrics.

Bryan Powrozek, Senior Mgr., Industrial Automation:

It’s a veritable alphabet soup of metrics.

Denise Asker, Director Mkt., & Practice Growth:

For sure. So aside from your podcast career, what other metrics do you have for yourself this year? What are your personal metrics?

Bryan Powrozek, Senior Mgr., Industrial Automation:

Embarrassing enough, none of which I hit. I’d like to get more sleep.

Denise Asker, Director Mkt., & Practice Growth:

Okay.

Bryan Powrozek, Senior Mgr., Industrial Automation:

I’d like to exercise more.

Denise Asker, Director Mkt., & Practice Growth:

Fair. All right.

Bryan Powrozek, Senior Mgr., Industrial Automation:

I’d like to do these things, but I actually try to… I do so much during the workday that’s numbers and data-focused. I like to try and pull back after and just relax and enjoy life, as you know I’ve got two young kids at home, so they pretty much blow any metrics out of the water once I walk out of my home office, which is the other weird part of the world we’re living in right now.

Denise Asker, Director Mkt., & Practice Growth:

Yeah.

Bryan Powrozek, Senior Mgr., Industrial Automation:

So apologies to people in 2022 listening to this, but I’ve been working from a room in my house for, gosh-

Denise Asker, Director Mkt., & Practice Growth:

Long time.

Bryan Powrozek, Senior Mgr., Industrial Automation:

… it feels like more than a year, but I think it’s only like eight or nine months. But, yeah, no, I think we have those things, right? The things that help us understand if we’re enjoying our life or doing well at work, or doing well at things. And so whether we set them intentionally or not, they’re always kind of in the back of our mind, right? “Oh, I didn’t get to the gym enough this week.”

Denise Asker, Director Mkt., & Practice Growth:

Right.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Well, my wife would always get on me about, “You haven’t taken me into a movie in months.” “But we have kids, we can’t go to a movie.”

Denise Asker, Director Mkt., & Practice Growth:

Right. Yeah, that’s fair.

Bryan Powrozek, Senior Mgr., Industrial Automation:

But yeah. So I think that metrics to me, and of course I’m an engineer turned an accountant so maybe this is just the way my mind works is that we all have them. We all think about them, but the problem is some of them they’re not even things that we thought about consciously, or really, if we sat down and looked and said, “Hey, is this something that’s important to me?” And that’s something that Dave and I will get into when we start talking about that. That conversation is a lot of folks in businesses, in particular, are measuring a lot of things, but the question is, are those the right things? Are those things that are really advancing the business and advancing you towards your goals? Are those just the things we’ve always measured? And so we kind of assume that that’s what’s going to get us to where we want to go. So, I’m pretty excited to talk to Dave. He’s an expert in KPIs.

Denise Asker, Director Mkt., & Practice Growth:

He is.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Well, I’m doing that just to build them up.

Denise Asker, Director Mkt., & Practice Growth:

Okay.

Bryan Powrozek, Senior Mgr., Industrial Automation:

So he feels like he’s got a high bar to cover, but yeah, no, Dave works with a lot of our industrial automation clients in helping them kind of understand what makes their business tick and what are the things they need to look at to figure out if things are going the way they want, or maybe they’re starting to get off the rails. So, hopefully, it’ll be an interesting conversation that I think this’ll be my constant drum beat that I reiterate through all these podcasts is that I hope there’s one kernel of knowledge that somebody listening to this can take away and help them run their business better. So, Dave the bar has been set high for you.

Denise Asker, Director Mkt., & Practice Growth:

All right.

Bryan Powrozek, Senior Mgr., Industrial Automation:

One thing, that’s all you got to do

Denise Asker, Director Mkt., & Practice Growth:

Well, to help you achieve your goals, I’m going to get out of the way-

Bryan Powrozek, Senior Mgr., Industrial Automation:

All right.

Denise Asker, Director Mkt., & Practice Growth:

… and make room for Dave to join you. I’ll listen and learn.

Bryan Powrozek, Senior Mgr., Industrial Automation:

All right. Thanks again, Denise. All right. So I’m here today with Dave Van Damme, senior manager at Clayton & McKervey in our assurance department. And Dave, I guess, for the folks out there who aren’t in public accounting, who might be listening to this and frankly for my own benefit, what does an assurance manager do?

David Van Damme, Sr. Mgr., Advisory & Assurance:

Bryan, that’s an excellent question. And maybe just listening to you guys’ introduction there. This will be the one kernel of knowledge that I get to drop on you is what does an assurance manager do? And let me tell you, when I figure that out, I’ll circle back around you. So maybe by the end of this conversation, we can actually throw that one on the head, but-

Bryan Powrozek, Senior Mgr., Industrial Automation:

All right. So Dave is securing a spot in a future podcast to tell us what he actually does for Clayton & McKervey.

David Van Damme, Sr. Mgr., Advisory & Assurance:

That’s right. I’ve got to keep you on the edge of your seat, kind of guessing. That way I can come back and share in a second podcast.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Excellent. Excellent. Well, Dave, what do we work together now? About 10 years or so? Kind of scary, that it’s been that long, but-

David Van Damme, Sr. Mgr., Advisory & Assurance:

It is interesting. Yeah. I’ve spent my entire career so far in public accounting, which has been the better part of believe it or not, 13 years for myself. I know you joined a little bit after I got going there just because you’re that second career kind of guy. You probably saw me on some of my prior videos and said, “Hey, I want to join this guy at this firm. This stuff looks fun.” So.

Bryan Powrozek, Senior Mgr., Industrial Automation:

I think for the record if anyone goes out and looks up Dave’s video series on YouTube, I am the one thumbs up on the KPI video he put together.

David Van Damme, Sr. Mgr., Advisory & Assurance:

That would be a lie because there’s definitely two thumbs up because of course, I liked it.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Excellent. Excellent. But I do think that in all seriousness that is a question for us in public accounting, we think assurance and tax, right? Those are kind of the two big buckets-

David Van Damme, Sr. Mgr., Advisory & Assurance:

Absolutely, yeah.

Bryan Powrozek, Senior Mgr., Industrial Automation:

… and then you’ve got the advising and consulting side. But realistically, if I’m a business owner, my knowledge of assurance and taxes, the assurance folks are the ones that come in first and ask me for all the information to get my financials together. And then the tax folks come in and ask me for all the stuff they need to do their tax return. And beyond that, maybe you hear from the client relationship person or the shareholder periodically throughout the year. But really in your role within assurance, how do you see yourself helping clients and what are some of the things that you do to really help them run their business better?

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah. And maybe that’s part of what we’ll touch on throughout this segment specifically talking about KPIs. But that’s the interesting thing. That’s the question I’ve been asked a lot is, “Hey, how did you land in the path that you picked?” And I’ll tell you this. The reason for was the opportunity to spend time at clients, at their facility, understanding how their business actually operates. And that’s physically what they’re doing especially within our industrial automation segment. What are the types of things that they’re automating? But also it’s more than that. It’s why they make money? How they make money? I’ve heard the term before, what is their secret sauce? What’s their competitive advantage? So what is it that helps them tick, and then taking that little tidbit of knowledge and as you look through their actual financial results, their financial statements, and you meet with various people from within the business, it’s trying to understand, “All right, what have I seen at other clients and what lessons have I learned from them from asking those same questions?”

David Van Damme, Sr. Mgr., Advisory & Assurance:

The biggest part of our job, Bryan, I’m sure is what? Listening. It’s certainly not talking because-

Bryan Powrozek, Senior Mgr., Industrial Automation:

Exactly.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah.

Bryan Powrozek, Senior Mgr., Industrial Automation:

So the biggest part of my job right now is keeping the home office operating.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Exactly. So it’s listening and trying to understand what it is that folks have learned as they’ve built their businesses. And then being that connector of sharing information to the other clients. So that way, if we’ve had one business learn a lesson the hard way, sharing that to the next business so that hopefully they don’t have to learn that same lesson at least in the same fashion that the first one did. So, from the assurance perspective and from being out there, it’s really trying to listen and identify potential areas of solutions and things that could help their business from whatever goals and opportunities that they’re trying to achieve. And obviously that dovetails partly into our topic today as well.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah. So as an avid watcher of the show Law & Order and that’s where I get all of my legal knowledge from, you opened the door counselor. So what is the one thing that you’ve seen across clients where you can really help share with them, kind of a lesson learned or something that the people listening to this podcast might find valuable within their own business?

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah. And that’s probably specifically on this topic of KPIs is so many business owners that we’ve dealt with spend so much time on the shop floor, understanding their businesses and walking through it. It’s sometimes taking a step back and saying, “Hey, what is it and where is it that I want this business to actually go? What is my business plan?” So if you’re looking at it from the standpoint of KPIs, I’ve heard this question time and time again, “I have a successful business. Why do I need to do anything different than what I’m doing exactly right now?” And specifically on this topic, the argument or the response to that question in my opinion would be, “Hey, I’m not trying to replace anything that you’re doing, I’m trying to supplement it and provide some additional insight or some additional metrics that can help you run your business, whatever it is from a goal standpoint that you’re hoping to achieve.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Okay. And let’s maybe step back for a second then, because I think that there’s a lot of buzzwords out there in business right now, KPIs, data analytics, robotic process automation, all these things, that depending on the client I’m talking to, or the professional I’m talking to, I think everybody’s kind of got their own opinion of what that means, right? And I’m sure I could go out to Wikipedia and find the definition that the internet has agreed is correct. But when you’re talking to your clients and let’s say I’m a business owner, I’ve grown this thing from nothing and all of a sudden, I don’t know if you listened to the last podcast I did with Tim, but Tim’s got this concept of growth and takeoff, right?

Bryan Powrozek, Senior Mgr., Industrial Automation:

So, I’m a business owner that’s poised to make that leap. And I did it based on not my knowledge of finance and accounting, but my knowledge of engineering, my knowledge of industrial automation and now you’re coming to me and saying to take that next leap, I need to focus on KPIs. So, what are KPIs? And how to business owners use them, especially because I know this is a challenge that you and I have talked about, right? A lot of business owners have grown the business based on their gut and now you’re telling me, “Forget your gut and trust this number over here.” So, I guess let’s start there. What is the basic idea about KPIs that owners should understand?

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah. So the way I’d go about defining a KPI or explaining what a KPI is, is nothing more than a metric and it’s a metric worth measuring it. It could be numeric, most times you’d probably hear it being something numeric in terms of a value identified. It doesn’t have to be. At the end of the day, it is simply a metric that’s going to tell a story, okay?

Bryan Powrozek, Senior Mgr., Industrial Automation:

Okay.

David Van Damme, Sr. Mgr., Advisory & Assurance:

So, what I’d say from that standpoint is pulling it back, it’s something that can motivate action. It can tell you something to do either proactive or something from a reactive standpoint as well. So, a more sophisticated example first, I’d share is take this. I’ve got a client that operates in the automation space. They create… Let’s call it end of line equipment for automotive assembly OEMs. So the cars coming together, they’re creating platforms that are delivering the right product at the right time as that vehicle moves down the actual assembly line. So, fluids for the vehicle to fill it up or wheels or whatever.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Okay. They’ve consistently been at… Let’s call them, they play in the sphere of that $50 million to $100 million space. And they’ve been there for a long time and they keep looking at that and they keep saying, “Hey, how do I get to the next level here? It seems like I keep banging my head.” And maybe you’ve heard this term before, “I keep banging my head against the glass ceiling. What do I got to do to get past this?” So one of the things that we’ve actually worked with and kind of chatted with them about is, “Hey, thinking about where the business wants to go, what is your goal for the next five or 10 years?” And they’re saying, “Hey, in five years from now, I want to get to that $100 million mark.”

And I said, “All right. Well, if the goal is to make $100 million in terms of top line, what’s going to make that worth your while?” And they kind of took a step back. And they said, “Well, I don’t know what. I’d assume that I’d have to come with some element of profitability.” And they’ve kind of explored that conversation and said, “All right, we’ve come up with a metric for… If we want $100 million worth of sales revenue, this is what we want from a bottom-line perspective.” Call it 10%, call it 15%, whatever it is, whatever their number was. They want to make sure that, “Hey, if we’re going to this growth factor of 100 million, how are we going to make this worth our while? We don’t want to do all this just for a headache at the end of the day to wind up, we doubled our business, let’s say, but we made no more profit in doing it because we didn’t do it smartly, or we didn’t watch it along the way or whatever.”

So they’ve taken the step to say, “All right. Here’s where we want to go in five years from now. And if I back that up over the course of years, one, two, three, four, five, knowing that I’ve got the least amount of time to impact year one, and the most amount of time to impact your five as I implement this plan, here are the metrics that I need to set up, the KPIs in terms of the profitability that we want to achieve on different job values so that way, as we go through and evaluate projects from the, ‘Hey, this is what we want to bid on. This is what we want to do.'” They’re setting up metrics and parameters to feed down the pipeline to their sales team and everything so that they know that they’re actually looking at and identifying the opportunities that these guys actually want to go after in the long-term as well.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah, because I think that that’s the challenge, right? And I think there’s this old joke about professional service folks, whether you’re talking attorneys, accountants, whatever, and business owners, that whatever question they ask the answer is it depends, right? And so-

David Van Damme, Sr. Mgr., Advisory & Assurance:

Well, that depends, Bryan.

Bryan Powrozek, Senior Mgr., Industrial Automation:

… It’s true. Depends on who’s telling the joke, I guess. But I think that’s true that there is such a thing as a bad sale. If you’re taking this business at a major loss, or maybe you’re taking it because it’s opening up the door to a new market that you don’t have before, so maybe you’re willing to take that loss on it, right? And I think that that is where the disconnect comes in, because I found in my experience as I’m talking to clients, they’re looking for that silver bullet. They see KPIs as the panacea. Like just tell me what I need to hit-

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah. Yeah, I hear that all the time.

Bryan Powrozek, Senior Mgr., Industrial Automation:

… tell me where I need to be. And it doesn’t work that easily. So let’s go back to that fictional client I was talking about. I’m two to seven and a half million dollar company. I’ve grown this through just sheer force of will and brute force. And I’ve put my blood, sweat and tears into this business, but I’ve hit that ceiling. And I’m saying, “Dave, I need to get past where I’m at now. I know I’ve got a market hole identified. I know that this should be a bigger business than it is today.”

David Van Damme, Sr. Mgr., Advisory & Assurance:

Mm-hmm (affirmative).

Bryan Powrozek, Senior Mgr., Industrial Automation:

How do I go about getting started? How do I go about figuring out what I need to look at and how I need to look at it?

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah, that’s a great question. And I’ve heard that one before and what I’d want to say is okay. My first question back is to peel back the layers of the onion a little bit there. And it’s, “Well, where do you want to go?” Okay. “If you’ve identified this market hole and your business is within this $2 million to $5 million range, where do you want to take it to? What are you hoping to achieve? Is it employee satisfaction? Is it customer satisfaction? Is it a better amount of cash on hand? Is it better project profitability? Is it a different level of efficiency within the business?” So it depends on exactly where you want to go. So, if the answer is, “Well, I still totally haven’t figured that out yet.”

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Which is a common answer as well.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Sure.

David Van Damme, Sr. Mgr., Advisory & Assurance:

It would be, “Okay. How about we just start with tracking something? Tracking some sort of measurable for you. And nothing too sophisticated. There are plenty of metrics that you can set up that are internally-focused and easy to compute.” And that’s probably the interesting thing that I was having a discussion with one of our clients about the other day is, “Hey, as you’re looking to get in this and to start some of this for the first time, the key is don’t set up a metric for everything. Don’t overdo it. Start with tracking just something, whether it’s inventory levels, whether it’s cash on hand, whether it’s how quickly you collect on your receivables, whether it’s surprising… Even tracking project profitability and everything.”

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah.

David Van Damme, Sr. Mgr., Advisory & Assurance:

So start with tracking something because you can’t just create the crystal ball for this. You’ve got to start somewhere. So that way a year from now, or six months from now, or a month from now even, you’ve got someplace that you started with, and now you can look back and see what’s changed between now and then. And is it moving in the direction that you want it to or not? You mentioned it earlier, there’s the video series that we did on KPIs or whatever. And it’s all about tracking these metrics to identify what sort of levers and opportunities you have to pull to institute some level of change within your business.

So, starting with something, tracking it, gives you the ability then to, if nothing else understand your resources, your products and everything that you have so that way you can go back and identify, “Okay, I see that gross profit is trending downward over the past three months. Was I anticipating that because of the projects that I took, or is that a surprise to me? And if that’s a surprise to me, then what is it that I can do moving forward to either… Did I have an out of scope on my job that I now need to go back to my customer and say, ‘Hey, we did something more than we were expecting on this project,'” for example. “Is there a billing opportunity for that? Or is it, ‘Hey I could track that my project margins are going downwards because it’s the project manager? Maybe I’ve got somebody on my team that’s really not executing at the level that I need them to at this point.'”

So, it’s all about, to me, starting somewhere and then measuring afterwards nothing complex, not doing too many at once, just getting your feet wet into it and then taking a look and seeing, “All right. Well, based upon what I know happened in the business and my expectations for this, did I meet them or is there some sort of anomaly or outlier that’s occurring at this point?”

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah. And only because you brought the video up again, I’m going to have to go back and change my thumbs up to a thumbs down because you thumbs up your own video and that just seems wrong to me and [crosstalk].

David Van Damme, Sr. Mgr., Advisory & Assurance:

All right. Yeah. I was kidding about that. It was really my parents that did that.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Okay. Well, that’s fine. But I think that that’s important. And have you seen, because I know I’ve seen it within some of the clients I’ve worked with. But have you seen this where… So I start tracking a metric, right? And then I get there six months, nine months, 12 months in, and they look at it and they say, “This metric isn’t telling me anything. The metric I thought would show us going down, but we’re actually going up and so, hey, KPIs are garbage, throw the whole thing out and move on.” But when I see that I’m like, “Well, no, that’s great because now you can say, yeah, forget that metric. It doesn’t apply to my business. It’s not important. Let’s find the next one.” And some of this is kind of a iterative process, right? You’ve got to keep working through it until you find [crosstalk].

David Van Damme, Sr. Mgr., Advisory & Assurance:

Absolutely.

Bryan Powrozek, Senior Mgr., Industrial Automation:

And I think that goes back to your earlier comment of it’s unique to your business. And I think another thing that in the closely held business area that we work in, you hear this a lot, right? “Well, my buddy who owns a business, he’s seeing X in growth or X in rate.” And oftentimes the clients are looking at us to say, “Why isn’t that happening for me?” And they don’t understand that, that it is so specific even within industrial automation, right? You could have a company that has a very high labor content on their product and another company that has a very high purchase part content on it. And you’re going to end up with different gross profit margins, different overhead, things like that, that it’s not apples to apples and you can’t compare it that way. So how do you advise clients on using industry metrics against their own performance?

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah. So you’ve kind of bridged the gap from one element to the other. The first part of KPIs if you’re getting started is going to be look at it from an internal focus. Before you can start comparing it externally, look at what you can do and what levers you can pull internally. The second element of that as you go to take some of these KPIs to the next level is looking at it from peer data and saying, “How does my business track compared to other businesses?” And I’ll give you an example of an actual situation we came across as to the relevancy of that. So, I think it was actually the client I was mentioning earlier that does the end of line equipment. If you looked at a simple metric, we’re going to say the amount of receivables they have, day sales outstanding, right?

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yep.

David Van Damme, Sr. Mgr., Advisory & Assurance:

And if you looked at theirs compared to some other industry trends, you’d see that theirs was a lot higher. So we started questioning why? Is it the terms that you’re giving your customers? Are you just giving, “Hey you’ve got 90 days to pay me after I’ve invoiced this?” And some of our other clients aren’t as generous as you, and they’re only offering 30? And they took a step back and said, “No, ours are pretty standard. 45 days. There’s not a lot of wiggle room in that. And we’re looking at other clients and saying, ‘Yeah, it’s the same thing there.'” So why, again are you are yours so much higher? And as we pulled back different questions on it, it turned out this, they weren’t doing any progress billing. So they were financing the entire project on their dime and drawing obviously either using other resources of the business, be it the cash account, be it a line of credit that they had from the bank, be it the owner’s money, equity, whatever. They were financing a significant portion of their customer’s business and simply not requesting for progress payments upfront.

And only by looking at metrics and only by identifying that, did we say, “Hey, why are you doing it this way?” “Well, we’ve done it this way for 20 years.” “So you’ve always financed your customers receivables for the past 20 years?” “Yeah, that’s just what we’ve done.” “Well, do you have to do it that way?” Nobody’s ever asked?

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yeah, exactly.

David Van Damme, Sr. Mgr., Advisory & Assurance:

So as soon as you have the opportunity to start looking at that relative to some of your comparable industry peer data, gives you the opportunity to start asking more questions, because interestingly, you look at that, and that was a question that we had discussed with them a couple of years back. They were heavily financed on their line of credit at that point, which obviously came with an interest expense charge. And since then, they’ve kind of changed that and gone back to some of their customers and say, “Hey, before we get going on this, we want something upfront.” Whether it’s 10%, 20%, whatever it is, it’s all negotiable as you know. They’ve gotten cash in upfront, which has reduced their borrowing-

Bryan Powrozek, Senior Mgr., Industrial Automation:

Yep.

David Van Damme, Sr. Mgr., Advisory & Assurance:

… which has reduced their expenses relative to what they’re paying in interest charges now, which just put that much more capital resource back in the business for them either to reinvest in the business, pay bonuses, hire more as they try to grow, getting to different office space, whatever it is. It’s provided them additional capital that every business needs in order to grow and get there.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Well, and I know and Tim and I talked about this in the last podcast and you and I work so closely with Tim that I know this is not a new concept to you that that money they were spending on interest that was going out the door, but they were still bidding on jobs and the jobs met their criteria for accepting it, right? So now you don’t have that interest payment. So you could really maybe get a little more aggressive or keep everything where it’s at, but now reinvest that money elsewhere. And those are the kinds of things that depending on where you’re at in that growth curve, what’s your… Kind of going back to something you talked about early on, is what your expectations or what your goals are? And now you find out what you do with that extra cushion that was leftover from where you used to be financing to now you’re getting paid upfront.

And so those are all the conversations that you need to have with clients and help them understand. We more often than not… I find myself sitting across the table from clients saying, “I can’t make this decision for you. I can just lay out options. I can give you the pros and cons, but in the end you have to be the one to make that decision and pull the trigger on which you want to go with.” But they’re finding they have options they never really had before, which is kind of the exciting part of what we do.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah, absolutely.

Bryan Powrozek, Senior Mgr., Industrial Automation:

So to me, and the biggest takeaway I’m hearing from what you talked about and in this kind of goes back to a quote from George Patton that I think is probably one of my favorite that, “A good plan violently executed today is better than a perfect plan executed tomorrow.” And that’s kind of what you’re advocating for, right? Is that don’t worry about getting this perfect and get the dashboard right and all the right colors and the right visualizations and everything, just do something. Any step forward is going to help you get that business to where you want it to be.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Yeah. So if I’d say that quote differently, it would be just get started. Well, it sounds pretty good, right?

Bryan Powrozek, Senior Mgr., Industrial Automation:

I’ve got to fill time, Dave. I’ve got to make this last.

David Van Damme, Sr. Mgr., Advisory & Assurance:

All right. I got it. That’s why you made it that long.

Bryan Powrozek, Senior Mgr., Industrial Automation:

Exactly. But, well, Dave, hey, I appreciate you coming in and talking about this. I know it’s end of year. Right now, we’re recording its end of year, but by the time this comes out, it’ll be early next year, but there’s a lot of other stuff going on. We’re trying to get clients ready for year-end. So I appreciate you taking the time to come in. And as with all of our podcasts, my contact information will be in the show notes. I think Dave’s contact info will be in. Our emails addresses are ridiculously long so I don’t want to try and spell them out for people on here.

David Van Damme, Sr. Mgr., Advisory & Assurance:

Oh, no please don’t. Yeah.

Bryan Powrozek, Senior Mgr., Industrial Automation:

But if you have questions about anything we talked about here, we couldn’t get into great levels of detail, but feel free to reach out to Dave, myself, or really any member of our industrial automation team. And we’d love to talk to you.

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