Avi Pinsky breaks down the three numbers every SMB owner needs to track — and why your accountant isn't the one to call when you want to grow.
GROWTH PILLAR: Sales & Revenue
WHO THIS IS FOR: SMB owners / Solopreneurs / Tradespeople / Leaders building systems
WHAT THEY'LL GAIN: A plain-language framework for reading your financials, tracking the right numbers weekly, and making confident decisions that protect your cash flow.
Most business owners look at their financials once a year — right before tax season. That's the problem.
Avi Pinsky is a CPA, fractional CFO, and founder of Pinsky Consulting. He's known as the Business Finance Doctor, and his job is to translate your numbers into decisions you can actually use.
In this episode of Knack 4 Business, Avi breaks down why most small business owners are flying blind — and what to do about it. He explains the difference between revenue, profit, and cash flow, and why cash flow is the one number that actually tells you if your business is healthy. He walks through how to set goals that are tied to your personal why, how to run what-if scenarios before making big hires or new investments, and why your bookkeeper and your fractional CFO are not doing the same job.
Key topics covered:
Connect with Avi Pinsky:Pinsky Consulting | LinkedIn | Free 30-minute business wellness call available on his website | Pinsky's Prosperity Playbook — free Excel scorecard to track your goals and financial health
Your hosts: Bernie Franzgrote | Wayne Pratt | Percy Barr
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Canada Growth Network + GHL — Full CRM and membership community built for SMB owners. $1 CAD first month. $47/month after. No contract.
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Bernie (00:00)
Question of the audience. Do you really know what your numbers are trying to tell you? That's what our guests will unpack in this episode. How to read your financials like a story, spot the hidden warning signs behind the growth and make confident data-driven decisions that protect your cashflow. Our guest today is Avi Pinsky
He's a CPA and MBT.
He's the founder of Pinsky Consulting and former public accountant with more than a decade of experience helping businesses make sense of their numbers. Known as the business finance doctor, Avi goes beyond the spreadsheets to diagnose what's really happening beneath the company's financial surface.
Through his signature business wellness checks, he uncovers hidden roadblocks, clarifies priorities, and creates treatment plans that drive growth, profitability, and consistent cashflow. His approach blends clear communication with practical strategy, empowering owners to make confident financial decisions. AVI's mission is simple but powerful, to help businesses into tools for a better future for themselves, their families, and their teams.
Abby, it's an absolute pleasure having you here today. Thank you so much for joining us. And I'll next time.
speaker-2 (01:04)
What is your favorite?
Avi (01:06)
Thanks for having me. really excited to be here. One of my favorite quotes is by Alex Hermosy. It's that success isn't about perfection, it's about progression. You just have to think about what's the next step forward, right? It's not always about getting things perfect. Perfection can oftentimes be the enemy of the better or the good. So you want to strive for better than you're doing now. Every day you improve a little bit. Eventually you're going to get close to that perfection. But if you're waiting for that perfection,
you're never going to get started on the improvement.
Bernie (01:35)
And your business has a tagline too. What's that all about?
speaker-3 (01:38)
Yeah.
Yeah.
Avi (01:39)
We like to help businesses grow smarter, stronger, and more profitable. Your business is there for a purpose. It's there to support your family and to support your lifestyle. We help it get there. We help it get into that role that it was made for.
Bernie (01:54)
So I take it there's a bit of a difference from just hi, I'm an accountant and I'm sitting in front of the books. There's bookkeeping, I understand, and there's accounting. Those are two separate things. But this role that you're in now is a lot more like a finance doctor. I've not seen that name used before. So I think that's kind of cool. Tell us the backstory of that.
Avi (02:13)
I think I might be the first one. You never know, maybe it'll become popular as the years go on. I look at my role as essentially a CFO of a company, but I look at it more from a doctor's point of view. When do you go to the doctor? When something's wrong, right? Something's not functioning well in your body, something's aching, and you don't know what it is, right? You're not a doctor, so you don't know.
what blood pressure means. don't know your various blood tests, what the results mean. You go to someone who can help you get that data and understand it and use it to improve your life and your body. So, you just you have some sort of ache, some sort of pain going on. Your elbow's hurting, you feel sluggish, whatever it is. You know that there's a problem, but you don't have the tools yourself to diagnose the problem and to figure out how to fix the problem.
So you book an appointment with your doctor, he runs a bunch of tests and he analyzes the numbers and the data and comes back to you and says, you are deficient in this mineral, this vitamin, whatever it is. I'm clearly not a doctor. I don't know all the terminology, but he uses data to help you get your body back into a sense of good health so that you can be productive again. So I do the same thing with a business.
There are numbers out there, there's data, information that's available for the taking that you probably received from your bookkeeper on a daily, weekly, monthly basis, whatever it is. But how many business owners know how to understand that data and how to apply that data and apply that information to their business? Yeah, Wayne's saying, right, zero. Nobody who's a business owner understands the information. So you need somebody to kind of translate it from account in ease into English.
So that's kind of what I'm there for. It's to take that information, take that data, figure out what has been working in the past, what hasn't been working, and find the path towards health. And healthy business is one that is growing, it's one that's profitable, and it's one that's producing the cash flow that your business is supposed to supply to your family to fund your lifestyle. And if the business is not providing that cash flow that you need,
something is wrong or that's an ache in pain that you gotta call your doctor and say, help me, help me figure out what can I do differently? How can I get healthy again? And so it's the idea of a business finance doctor is more of a metaphor. Essentially, I'm a fractional CFO, helping people make better decisions using that data. And the doctor, think is just the perfect analogy for that.
Bernie (04:37)
You don't have a crash card at hand, you? Where you give the tube paddles and then give the electroshock therapy for the heart.
Avi (04:43)
Yeah, I mean, hopefully when people come to me, they're not in that dire of situations yet, but you know, sometimes you do have to just cut the losses.
speaker-3 (04:48)
Haha.
speaker-2 (04:52)
Avi, from working in accounting is 30 years ago, 40 years ago, it was all about compliance. You took last year's data and you dust it, blew off the dust and then you sent it to the tax department
And that was it. To do anything else was considered heresy. ⁓ Two questions. One, how did you swim upstream? And two, what was your aha that this doesn't work? This is meaningless.
speaker-3 (05:13)
Yeah.
Avi (05:22)
That's a great question. And it kind of leads to why I got this moniker of the finance doctor. was when I was 18, not so long ago, but long enough ago that it seems like it was. I was trying to figure out what do I want to major in in college? What do I want my path in life to be? What do want it to look like? And I spoke to one of my mentors and I kind of saw the world in a two
speaker-3 (05:34)
while ago.
Avi (05:50)
Falsely, I looked at the world in a, what's the word, kind of a black and white. Either I can go into something where I want to make a good living, I'll be able to support my family, but maybe it's going to be dumb work that's not actually productive, not actually meaningful in life. Or I could do something where it'll be meaningful and okay, so maybe we'll struggle a little bit financially and we'll not keep up with the Joneses, we'll live in
relative poverty with compared to our friends and and and I wasn't sure which path to go down so I speaking to one of my mentors about it and he said I look at my accountant as my financial doctor without my accountant I would not be able to make ends meet and I wouldn't be able to have money to support my family and I said that's great that's that's the perfect mixture of the two because accountant is a job that's always gonna exist there's always gonna be a need for them and here I've got somebody who's telling me
that this is a very meaningful role that this person plays in their life. And he put that idea in my head of a financial doctor. I was always good with numbers. I was always good with math. So I thought this is the perfect thing for me to go into. After maybe two or three days on the job, I realized that's not what most accountants are doing. As you said, Wayne, most accountants are dealing with compliance. They're dealing with reporting. And that's not meaningful to anybody.
It's an annoying check mark that needs to be taken care of, but it's not something that for most people is a meaningful relationship that they have with someone. It's a commodity, right? Your accountant is usually a commodity. You go with the one that's cheapest that can get the job done the fastest. And you don't understand the output, you don't care about the output. So for a few years, I was trying to figure out what was this mentor talking about?
What kind of financial doctor does he have? How is his accountant doing that for him? And I jumped around to different accounting firms, different types of roles in the accounting world to try to figure out where was this financial doctor role. And I never found it in the accounting world. It took me about a little over a decade, maybe a dozen years. And I came across this world of financial, of fractional CFOs.
And that really spoke my language. was what I was always trying to get to. was someone who's, you know, I was thought to be on a personal level just because of what that mentor was telling me. But it was really that same exact thing, but on a business level, helping somebody improve their life using that knowledge that an accountant has. it just, it really struck a chord with me. And I said, this is something I have to do.
I left the accounting world pretty quickly after that. I still have, one foot in there. I'm still a CPA. I still keep my license active just cause you know, kind of need to for that credibility, but it's, it's about taking that same data. And instead of being the, the, the middleman between the business and the tax repairer. And as you said, just helping them with a compliance issue, it's a matter of taking that same data and you.
teaching them how to use it. All the big companies do this, right? All the big companies, they have someone who's looking at the numbers daily and helping the CEO and the owner of the business drive the business forward from that data. Unfortunately, most small business owners and even medium sized business owners, they don't realize that that's something that can be done. They think that the numbers are just there to populate the tax return. Unfortunately, that's all about
what happened in the past, right? Compliance is all about telling the IRS, telling some other authority what happened in the past. Business owners have to look towards the future. If they're living in the past, then, you know, how is the business going to ever grow? How does anything can ever change? You want to use the past as information to go forward. I like to use the analogy of driving a car. Your windshield is much bigger than your rear view mirror. You look in your rear view mirror to get data and information.
about what's going on behind you so that you can make decisions going forward. Is it safe to change lanes right now? If I'm about to, if I'm hitting a quick stop, is there somebody who's gonna rear end me that maybe I have to get out of the way? You're using that data just to make decisions on how to go forward. You're not living in the past. You're not just dwelling on it. That's not gonna help you. You have to drive your business forward. You have to figure out what's the best path towards having a thriving business. And the data is there to use.
And if you're not using it, you're going on a whim, you're going by the seat of your pants, what are the chances that you're getting it right? Maybe you're hitting a lucky shot. Probably not.
speaker-2 (10:16)
When we were trying to sell quarterly numbers to actually plan, the first pushback was, you're just interested in overbilling me. That's all that is. now you and then every now and again with this new ⁓ fractional language you hear about monthlies, I understand you have three vital signs you want them to check weekly. I mean, unpack that.
Avi (10:42)
Yeah, I mean, as often as you can. The three biggest things in any business are gonna be its revenue, its profit and its cash flow. Revenue, how much money are you bringing in? That's the top, all of your sales going on. How much is coming in? Profit, once you've done all of your expenses, you've paid out all of your vendors, you've paid for all of your materials, you've paid your employees, all of your expenses are done, what's your profit? How much is left from that revenue? Obviously, revenue is important.
You want to see that as an upward trajectory. But that can be oftentimes misleading. I can open up tomorrow a $20 million business, right? And it's looks great on paper. I'm making $20 million. What I didn't tell you is that I'm going to spend $100 million in order to do that. Well, now I just lost $80 million. That's not very good. So obviously you want your profits to be more, to weigh more on your decision making.
then your revenue. It's very nice that you got 20 million in revenue, but if it costs you 100 million to make it, that's not so good. All right, you're now out $80 million. But what's more important than that is your cash flow. When I go to the bank and I look and see what's my actual cash on hand, is that a positive number? Is it a negative number? Is it a number that's increasing, decreasing? Profit is highly theoretical.
And it's very much a jargon of the accounting. It's something that on paper, a business can be profitable. But if you are not collecting your debts from, you're not collecting your payments from your clients, from your customers, right? So that's gonna take a big hit on what cash you have available. You might've been profitable on that exchange, right? A similar situation. I can tell you, I'm gonna build you a new house.
and I'm going to charge you a million dollars for that house and I'm going to only use 500,000 of materials. So great. So I've got revenue of a million. I've got profit of 500,000. But if I my customer, don't worry about it. I'm never going to actually ask you for payment. So I have revenue, I have profit. I don't have any cashflow. So now again, I'm taking a $5 million hit. And actually in that point, I'm going to take a $500,000 hit.
because all of the material I'm paying and I'm not actually getting any of the money in. So all of that revenue was all in theory and it's not in reality. if like we go back to what we said before, if a healthy business is one that has to fund your lifestyle and pay your bills on a personal level, I'm not doing that if I don't have cashflow. So those are the three things that you should check as often as you can. And in that level of importance, where's my revenue at? Is it growing? Where's my profit at?
Is that a stable amount? Is that a good percentage of the revenue? And ultimately the most important, what's my cashflow at? Is it something that is at a level where it can support my family? It can pay my rent. It can pay for my kids' tuition. It can pay my car payments, whatever it is that I needed to pay.
Bernie (13:32)
You know, as I'm listening to you talk and describe the whole process, it sounds like, and I'm going back from my experience ⁓ dealing with the accounting department in a corporate space. I'm looking at them going, I used to view them, ⁓ my gosh, here's a painting in my backside about to come out after me about something, right? Until one day they assigned me an external accountant and the person actually spent time to explain to me.
Not so much here are the numbers, but he actually spent time to explain to me the reason behind why certain things are important. So it sounds like there has to be a relationship. has to be, you know, you can have dashboards, right? It's like you can have a car and it can be miles per hour or kilometers per hour. And we know those are two different numbers, two different values. Speeds cost, the speed's the same thing, right? But it ain't the same thing if you're here in Canada, for example.
Avi (14:06)
Yeah.
Bernie (14:27)
You're doing 80 kilometers an hour. It's not even miles per hour, right? Down the US. So how do you connect with the person so that they go, okay, because it sounds like it's a coaching position, but only around the finance box, right? Or not necessarily finance, even like, know, what are your goals, Enlighten me. Give me more. Yeah.
Avi (14:31)
Great.
just yeah
speaker-3 (14:47)
Yeah.
Avi (14:50)
You're
100 % right. 100 % right. I went back and forth. I want to be the business finance doctor, the business finance coach. It's very much a coaching relationship. And as you said, the person has to understand what's going on, right? They need someone who's going to help them make sense of the accounting. And I have a dashboard, I have a scorecard, but that's only the beginning. That's just to give them a way to visualize what we've discussed.
I constantly encourage questions. If there's something that they don't understand, ask, ask me again. And I tell people all the time, if you have a bookkeeper, if you have an accountant, ask them your questions, understand what's going on. If you don't understand, you can't actually apply the data properly. And if your accountant or your bookkeeper is not responding to your questions properly, or they still don't understand, you still don't understand after they've tried explaining it to you, keep asking.
Be that stupid person in the room who makes sure that there's clarity. They work for you, you don't work for them. You are providing them the information that they need to do their job. Obviously you're telling them what went on in the business that they can do their job. But ultimately, you're the one that's at the top of the ladder. You're the one that's making the decisions. If they can't help you understand, find someone who can.
speaker-3 (16:07)
Yeah, that's.
Avi (16:08)
That's, it's very, it has to be a coaching relationship. And we start out with goals and targets. That's my whole process is about figuring out what are your goals for this year? What are your targets? And then it's about creating that path forward towards meeting those goals and targets. And if you're a accountant, you're a bookkeeper, if they're not helping you look forward, then you're doing it, you're doing it on your own and you probably don't have the tools that you need to, to do it on your own. Not that these are difficult tools to
to acquire, there's information out there, there's places that you can learn these things. There's books that you can read, there's videos that you can watch online to understand these things better. But first off, you have to understand that that's not your accountant in your bookkeeper's role. Their role is primarily a compliance, a reporting, a past focused role. So if they're reluctant to help you in this, it's not because they're a bad person. It's not that they're bad at their job.
That is their role. Their role is to tell you how much to pay in taxes, how to get out of paying more taxes, how to report properly to the authorities. But your role is different. Your role is building the company, building the business, supporting your employees, supporting their families and supporting your own. And that's a future role. So it's a completely different way to look at the numbers. You have to understand your numbers in order to
in order to fulfill your role. And they have to help you understand it. But if they're reluctant, again, it's not because they're a bad person. They're just myopic in what it is that they're doing with the business.
speaker-2 (17:40)
Many of the entrepreneurs I've lived with and worked with were all drivers and almost all of them only saw the top line. They lived in the top line. And I could see you coming in, trying to help, actually caring and being viewed as a Debbie Downer. How do you actually get them to deal with, again, the bottom line instead of the top?
so they can actually not only live better, but have more peace.
Avi (18:07)
great question. It starts with their why. Right? What is it that you're trying to do with their business? Are they trying to grow a business? Are they trying to support a family? Maybe you're to tell me maybe somebody is going to and this is the first thing that I do with the clients is figuring out what their why is and then setting the goals based on that why if their why is I want to create a million dollar company, my family be damned, know, whatever hell, you know, profit be damned. don't care. Great.
So we can spend millions and millions and millions of dollars and maybe we'll create that $100 million company. You'll be famous, you'll be on the cover of Forbes for creating a $100 million company in the shortest amount of time ever. And if that's what you're looking for, so great, we can do that. But if your why is, wanna set up a college fund for my kids. I know one business owner, his why was that he wanted to open, he's a lawyer, right? And he wanted to open a gluten-free bakery.
for his child who had celiac. Okay, great. Making $100 million law firm at the expense of $99 million or $150 million is not gonna help you open up your gluten-free bakery. So occasionally we have to remind them, right? Once we get that why very clear on paper, what it is their ultimate goal is. Create that college fund, create that bakery, open up some non-for-profit, whatever it is that their why is.
So it's just a matter of showing them how their decisions are tied back to that. If you wanna open up another skew, open up another service, great, fine, whatever, do whatever you wanna do. If you want it to be a loss leader, great, that's your choice. Just know that if you make that decision, this is the way I see the numbers playing out and that affects your ultimate goal. When you have an ultimate goal and you have something very clear and you always go back to that,
it makes the decisions dummy proof, right? You understand how your actions impact them. Another one of my favorite quotes is from Alice in Wonderland where she talks to the Cheshire Cat and says, you which way do I go in the fork in the road? And he says, well, where are you trying to go? If you don't have a destination, it doesn't really matter what decisions you make. But when you have a clear destination, it makes it very, very obvious what your next move should be.
Bernie (20:17)
I mean, in this whole process, I get the why, right? Because that's the driver. Do you ever come up and someone's, you know, it's like hearing someone says, oh, I want a cottage. But you know, if reality actually landed in their lap and they have to spend time, you know, prepping it, you know, for cottage life or whatever, or, you know, I want that sports car till they see, actually see the amount of maintenance that comes with it and the dollar tag to it.
Do you ever find a time that when someone comes along and says, I have this desire, I have this desire, it could be like, you know, it could be the bakery scenario, right? Do you buy the bakery or do you just make sure you really have a good supply for it? So do you help them kind of walk through, hi, here are your permutations. You know, you're not gonna have a hundred million dollar law firm, you're gonna have a bakery and a law firm, or, or,
You know, you just have something that provides you assuredly, unless of course that happens to be the daughter's line of work that's gonna come up a bakery. like, you know, is it kind of like, I see this point of view, but if you go two degrees to the right or to the left, all of a sudden, well, try this. Do you provide that service too?
Avi (21:23)
You know, a lot of what I'm doing is creating those what if scenarios, right? Seeing what could play out in the business and what could their focus be? Seeing if we want to focus on a certain area, let's say we want to get more leads in the door. Okay, so what's that going to do to the bottom line? Is it going to create more business? Is it going to create more profits? Is it going to create more cashflow? What about if we, instead of focusing on leads, maybe we got you some sales?
Maybe it's a matter of converting more of those leads, right? Which one of them is gonna have the bigger impact on the bottom line and being able to accomplish those goals that you set. So if there are two competing goals, we can play each one out. So, okay, you wanted to have a $100 million business, great. Let's figure out what happens if we have that $100 million. What do we actually have to do to get there? Okay, great, so now it's gonna cost you X amount in payroll.
It's gonna take Y amount of hours from you each day, yada, yada, yada. Figure out if you're okay with that. And scenario number two, maybe you wanna give up on the $100 million business. Maybe you wanna give up on that vanity of being able to say, I own $100 million business. And you wanna say, want a business that profits X amount. Okay, so what do we have to do in order to get there? Play out that scenario and look at that. Look at those two different scenarios and compare A to B. Which one are you happier with?
Are you a better father in A? Are you a better father in B? Are you a better husband in A or B? Are you happier with A or B? And look, as we said before, it's a coaching relationship. I can't make those decisions for you. And you as the business owner are the boss. You are the one who's ultimately responsible for the outcome that we're driving towards. And if you're not happy with the outcome, so that's not my decision to make. I'm here to present you with the options and the path
forward towards achieving the outcome that you want. But it has to be the outcome that you want and you have to be on board. If not, I'm just like the accountant then, right? It has to be something that you're happy with. I can't be someone who's driving my own agenda, who's only focused myopically on my own goals. I work for you, your CFO works for you, your accountant works for you, your bookkeeper works for you. You have to be the one who's driving the decisions, who's making the the final call on you.
speaker-2 (23:31)
I want you to switch hats with me. I understand planning, I understand forecasting. What I'm seeing now in business is actually more involving sorcery. How do you actually predict what's going to happen when you absolutely don't know the things that are.
Inputting you, how do you, I mean do you use tarot cards? How do you possibly do it?
Avi (23:55)
Yeah, yeah, I've got, I've got right here on my desk, a little crystal ball tells me everything I need to know. It's about looking at the trends, seeing what happened historically. Again, I'm not telling you to drive your car with no rear view mirrors, right? You need them there. They put them in for a reason. You need your accountant. You need your bookkeeper. These are important roles. You need that data to analyze. If you are not analyzing the data, again, you're going based on a whim.
speaker-3 (24:00)
No.
Avi (24:22)
Nobody knows the future. Nobody knows what the markets are going to do, what your customers are going to do, whether this marketing ⁓ avenue is going to be better than the other. You need some sort of data to analyze, but you need to understand how to analyze it. You can't look at the numbers, not understand what you're looking at, and then make decisions based off of it. Where I come in is helping you make clarity out of the confusion.
And it's only confusion because you don't have a background in it, right? If you're a plumber and you start a plumbing business, you're working on ⁓ a contracting crew and you decide I'm going to open up my own construction business, you don't have training in accounting. You don't have training in running a business. You have training in how to be an operator in a business. And those two are not the same thing. Just because you can build a pergola, you can plumb a house, you can run electricity.
That doesn't mean you know how to run an electric business. So I'm there to help you understand how the business side of things works. And that's kind of where the, know, to somebody who's uninitiated, maybe it looks like magic, but it's really just a matter of knowing what are the numbers telling you? There are trends there that you can pick out if you can understand them. You don't need a tarot card, you don't need a crystal ball. You just need a little bit of a financial education. And that's what I'm there to help you provide.
Bernie (25:41)
You know, as I hear you discussing the overall thing and you talk about profit, two things come to mind. What is profit? And there's a reason why I'm asking this, because it's obviously a success, a result of. Is it time? Is it money? Which are two different things. It's closely tied, but not necessarily, right? Because Wayne helps folks gain more time in their lives.
right, from the blue collar industry, like the trades industry. And what is enough profit? Like, is it 10%, is it 50%, is it 100 % net profit? And here's my pile of gold sitting in front of me, right? What is the, is there a balance?
maybe it's getting a little too esoteric or maybe we should get that crystal ball rolling up going wow for you mr franz grout today you know 10 % good enough.
Avi (26:31)
So what is profit? I would say profit is the result of the decisions that you make in your business. If you make poor decisions, you'll have poor profit. If you make good decisions, you'll have good profit. It's a matter of making the right decisions so that you're not wasting your time and your effort in your business. Because as I said, revenue is, it's vanity, it's a top line number, it's all in theory. The profit is,
Am I making the right decisions that makes my business dry? That makes money through my business. Again, it's still a theoretical number because you have to get down to cashflow to really see what's the practical number. As to what is a good profit margin, again, the percentage of profit per revenue, the relationship there, what's a good percentage? It's highly dependent on the industry. Some industries...
You know, 80, 90 % is not unreasonable. Some industries 10 % is already like, wow, you're doing great. It really depends on what exactly it is that you're doing, what your business is. I know therapists who are in that 80, 90 % range. Cause what are they paying? They're paying rent for their office. That's about it. know, electric bill, water bill. That's it. They don't have any payroll, right? They don't have any staff.
They're working by themselves, them and a computer basically. All right. So in a business like that, 80, 90%, it's not unheard of. If you are running a construction crew, you're running a plumbing business, you're going to be lucky if you're getting 20, 30%. That's going to be like, wow, you're, really hit it out of the park there. So it's not really a one size fits answer as to what's a good profit, a profit percentage. It also depends on the size of the business. If I've got a hundred million dollar company.
I'm fine with getting 1 % of a net profit, right? If that's hitting my bank account, 1%, I'm happy with that. If I've got a million dollar business, so I would need a little bit more. It's a matter of how much time are you investing in the business as the owner and how much do you need to be able to pull out of it in order to justify that investment of time, energy, actual capital investment, effort, headache, right? As the business owner.
all of the fires are gonna come on you. So that's gonna create a lot of stress in your life. What's that stress worth? So you have to kind of decide what is it that you wanna take out of it in order to make it worth it. And then from there, you can figure out is this the right business model for me? Am I getting the right percentage in order to justify it?
Bernie (28:57)
So just one step further in this one, and I'm to turn it over to Wayne. So if you're doing, if you're doing a game of 3d chess, it's like right now we talked about something that's very linear. I do this, I get, I get that right now. I do this long enough. get more of that. And if you're a therapist, yeah, you're getting 80 or 90 points back, but you can't scale. If I am a restaurateur and I'm getting maybe 10 points, maybe five points.
you know, as a profit, maybe depending on what's going on. Is there some way that you can, you know, okay, this works really well, but here's another avenue of the business. For example, some franchise operations, they lease the property back to the franchisor. And so they get, they're getting rent, they're getting, they're getting their slice of the pie based on the product sold out, but at the same time, they own the ground underneath, right?
Yes. they have basically a headlock on the business, right? So it can't go totally sideways, but they also have another asset that appreciates in value. My question to you is when you see someone that has a business and again, to be the therapist, right? Where it's not really, I don't know if you could franchise it per se. However, that said, do you look at things that you can dovetail off of that, that will help as a fractional CFO?
that can help it grow and the person has a real appetite, right? And there are opportunities. And if that's the case, you bring other experts in.
Avi (30:23)
It's definitely a question, again, going back to what their priorities are. A therapist can grow beyond their own capacity if they get other therapists on board. And we then have to play that out. Look at that scenario as a what if. Again, look at the numbers. What does that do to your payroll? Are you now going to have to hire a secretary to book everybody's appointments? Are you going to have to rent a bigger space to meet with clients? So it's a matter of playing out the scenario
putting in the numbers on a theoretical level and seeing how does that play out? How much more of your time as the business owner are you gonna have to go look for clients? I had a client that was a therapist and she had a lot of other therapists on her payroll that were underworked. She was paying them a lot of money. Sometimes she was paying hourly, sometimes it was a salary, but they were not at full capacity. It's causing a lot of problems.
she could have used a lot of help beforehand before making the next hire and figuring out, okay, can you actually fill this person's schedule up? And if you can't, what kind of salary can you justify? They might be highly qualified and it's very nice that you wanna pay them a salary based on their qualifications. But if you can't fill up their schedule and you can't close those clients, you're gonna have to pay the difference. And so it's a matter of playing out the scenarios from a numbers.
point of view again, putting in those what ifs, what do you want your second, third, fourth area product service, whatever to be, how much can you sell it for? And is that a profitable amount? What's your overhead going to be? What's that going to do to your payroll, to your rent, your, even your taxes, you know, what's it going to do to all of the expenses that are associated with that, with that revenue? And what do you have to do in order to get that revenue? Is it worth it for you or not?
Cause you might say, yeah, I can make an extra hundred $100,000 a year, right? So maybe I'm making a half a million and this can bump me up to six. But is it worth it? How much effort do you need to put in in order to do that? And how certain is it? Is this a likely scenario that you're gonna get that extra hundred thousand? Or is it maybe yes, maybe no, or is it more likely no? Playing those things out and deciding whether it's really worth the risk.
speaker-2 (32:31)
So I find Bernie finds most our guests and I find a lot of our listeners are what I would call a solopreneurs and some of them are more technical in nature. They're their skills and a pickup truck. And on the other hand, when you look at business media, there's basically the Wall Street Journal and in Canada, the Globe and Mail and the enterprise language.
isn't very useful. It's almost a foreign language to the guy in the truck. What could they be watching? What metrics? What can they boil down to take out of what I would call enterprise language to run their business better if they want to grow into a medium-sized company instead of a small company?
Avi (33:14)
Yeah, so you have to realize that the language of accounting is universal across all industries, across all sizes, across all stages of every business. An asset is an asset is an asset. A liability is a liability. An expense is an expense revenue. It's all the same. A lead is a lead. A sale is a sale. You may have to tweak it, right? Instead of saying a customer, maybe you use client.
instead of transaction, maybe you use sale or order or purchase, whatever. So you can change the language, but the concepts are across the board. You can use the same concepts that the Fortune 500, the biggest companies that you've ever heard of, they're using these concepts on a daily basis and you can as well. Maybe your business isn't as fluid, so you're not making decisions as quickly as they are.
Maybe they're analyzing their numbers daily and making decisions daily or weekly, and you'll make decisions monthly or maybe quarterly. But it's the same idea. It's the same process. Look at your numbers, and see what are your goals and figuring out, am I actually heading towards hitting those goals or not? If not, why not? What can I change in order to get back on track, right?
to shift the focus of the business in order to get everything back on track towards accomplishing those goals. And then practically, what am I gonna do today, tomorrow, in a week, in order to actually do that? To put the ship back on its course, the way that it's supposed to be. So you can understand the same concepts and just figure out how to apply them to something smaller.
but you don't have to learn anything that hasn't already been tried and true for hundreds, if not thousands of years.
Bernie (35:01)
So in the accounting space, are there any changes that are coming up? And understand, and again, something I went through two decades ago is we'd have an annual audit just because it was a non-for-profit, all good. And I'd sit in there going, my gosh, my gosh. And the person says, well, are you following ⁓ GAP principles? And I'm like, what the heck's a GAP? Is there a hole in the floor? Yeah.
Just are there any trends and what is gap so that folks understand it? Because I've heard it mentioned in the news a couple of times and someone is talking to larger players and they're going, I don't know if it's gap or not. I'm going, dear. Havey, over to you,
Avi (35:37)
Yeah, are there any changes in the accounting world? No, absolutely not. As I said, these are principles that have been going on for hundreds, if not thousands of years. What is GAAP? It's compliance, right? The things that are changing are tax law and compliance law. That's it. But that's stuff for your bookkeeper, that's stuff for your accountant to figure out. GAAP is Generally Accepted Accounting Principles. There's two A's, two A's in the GAAP, right?
It's how do you report certain transactions? Is this something that's supposed to be expensed? Is it something that's supposed to be capitalized? Assuming you yourself are not doing your own bookkeeping, you really don't have to worry about it. If you get a good bookkeeper, a good tax accountant that knows what they're doing, let them do their thing. But in terms of using your numbers to make decisions, the reports that they give you are a starting point.
built for you to make decisions. They're built for the compliance world. You have to use that and figure out how to understand it for making decisions purposes. So maybe the presentation of something might change if some new tax law comes out or some new gap regulation comes out. Okay, so you might have to re-understand how to look at these printouts, these reports, but the principles behind them have existed forever.
and they're not going to change. And that's what you have to focus on as a business owner is what do I do going forward? And that hasn't changed. And it never will.
speaker-2 (37:03)
where do you like to serve and how do we get a hold of you if we if that rings a bell
Avi (37:08)
So if there's a business owner in Nepal who speaks English, whose works, whose books are in English, or at least he can translate them for me, I can help him, right? Whether I am the right person for him or not, I don't know, know, culturally Nepal might be a little different, but I'll just tell you as an example. I'm originally from Los Angeles. I lived in New York for a few years after getting married to my wife. We currently live in Israel, right? But my background is in US tax.
So the US market is where I service, even though I'm half the world away, right? it doesn't matter. We're in such a virtual world nowadays that the calendars link up. They know which time zone is in what and when it's gonna change. It's so easy to make that connection across
anywhere in the world. So, you know, if for whatever reason you feel you need somebody who's in person can come to your office once a week or twice a month, whatever it is. So maybe I'm not the right person for you, but I don't think the world is at a place where that really should matter anymore. I think so much can be done virtually that there's really no limit as to where anybody who works in
in a service type of role. No, not the home services, right? I can't go do your plumbing in California, because that's a little bit far away.
Bernie (38:23)
You take the plane ticket. You take the plane ticket. It's the right season.
Avi (38:27)
Yeah,
you pay me enough and I'll come. But, you know, again, somebody who's doing accounting, bookkeeping, those types of services, there's no limit. As to where people can find me, I'm on LinkedIn. I'm much more active in the DMs than in the posting, but I am there occasionally. The DMs, I'm very active. I'm looking at mine multiple times a day and reaching out to people there.
And you can come on my website, pinskyconsulting.com, P-I-N-S-K-Y, consulting.com. And I've got a link there where you can book a complimentary 30 minute conversation with me, do a little assessment on your business and see how healthy it is and what we can do to make it a little bit more healthy.
Bernie (39:08)
You also have a playbook that you're offering people. Can you enlighten us on that one?
Avi (39:15)
Yeah, that's also my website, Pinsky's Prosperity Playbook. There's a link there at the top of my website. You click on that, fill out a couple of details and it'll email you a very simple, basic Excel. You do not need to be an accounting professional to understand it. It is built for the lay person. If you have the smallest amount of experience using Excel, you can make this work for your business.
It'll help you set your goals, set your targets, figure out where you have to improve your business. It'll show you a scorecard that you can figure out where's your business holding in reaching those goals. Are you going to meet them or not? And making better decisions using your numbers instead of again, going on a whim or flying by the seat of your pants.
Bernie (40:05)
You know what? want to say thank you to Avi, my co-host Wayne, and you the Knack for Business listeners. Really appreciate your time. takeaways here, you know, your financial system is actually a living, breathing entity. It's around you and work it that way. And Avi can help you get into that space. Don't make it a Frankenstein, you know, because that no one wins in that particular mode.