Your revenue is up. Your cash is tight. Karena Bell shows SMB owners and corporate leaders exactly where profit quietly disappears, and how to get it back.
GROWTH PILLAR: Leadership & Ops
WHO THIS IS FOR: SMB owners / Solopreneurs / Corporate leaders / Anyone whose revenue is growing but cash feels tight
WHAT THEY'LL GAIN: A clear picture of where profit leaks, why dashboards lie, how to align your team around one source of truth, and what to fix before you even think about cutting staff.
Your revenue is growing. So why does cash feel tight?
That gap has a name. Karena Bell calls it profit leakage — and it lives inside almost every growing business, regardless of size.
Karena is the founder and CEO of ProfitLinz and a financial strategist with over 25 years of experience working with Fortune 500 executives and mid-market leaders. She specializes in forensic financial analysis — digging past the dashboard to find where profit quietly compresses, where departments work against each other, and where businesses are leaving real money on the table.
In this episode, Karena breaks down why profit loss happens operationally first and financially second. Most reports show lagging indicators — results, not causes. She explains how to identify the operational drivers behind margin compression, why your sales, marketing, and finance teams likely aren't working from the same numbers, and what it actually takes to build a business that is structurally strong — not just numerically busy.
Topics covered in this episode:
Connect with Karena Bell:
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Next Steps
Bernie (00:22)
Question the audience. if your revenue is growing, why does it still feel like you're leaking cash? That's the real question our guest will unpack in this episode. She'll be speaking about hidden profit loss inside growing companies, where margins quietly compress, where cross-department blind spots cost real money.
And why monthly financial reviews aren't enough should explain how profit optimization differs from cost cutting and how leaders can uncover what's really draining enterprise value. If you care about stronger margins, smarter growth, and building a company that's truly resilient, listen in and take notes and ask yourself the hard questions. Now
Our guest today is Karena Bell from ProfitLinz She's the founder and CEO and a financial strategist with more than 25 years of experience guiding Fortune 500 executives and mid-market leaders through high-stakes decisions. She's known for helping organizations find profit where others miss it. Through deep forensic level financial analysis, Karena uncovers hidden losses, inefficiencies, and untapped revenue streams.
That traditional reviews often overlook, frequently unblocking six to seven and eight-figure improvements in net profitability. She also specializes in distressed business turnarounds, stepping in at critical moments to repair cash flow, restructure capital, stabilize operations, and restore confidence at the leadership level. What sets
Karena Apart is her ability to translate complex financial insight into clear practical action, partnering directly with CEOs, CFOs, and business owners strategy into measurable results, often within 90 days. The outcome is stronger margins, higher valuations, reduced risk, and businesses built for long-term resilience. Karena
Long time no see, and I say that jokingly only for the fact we've done a lot of recordings of recently and on in different platforms and different spaces. Welcome and do you have a favorite quote or saying?
Karena (02:11)
Thank you, Bernie. Thank you. you know, it's always good spending time with like-minded entrepreneurs and professionals. So thank you for having me on yet another platform. happy to be here and excited to talk to dive into some topics this morning. My favorite quote, it's an oldie but a goodie, is you know, revenue is vanity, profit is sanity, and cash is reality. And I like it because it forces leaders to confront the difference between growth optic optics and annual strength.
A company can look impressive on paper and still be struggling and fragile underneath.
Bernie (02:44)
Well revenue. that there's I I guess, you know, money coming in and it's rising, but companies are stressed about cash. What's causing that? What's causing that disconnect? Because if revenues are coming in, you'd you fear cash would follow, you know, hand in hand.
Karena (02:59)
Mm-hmm. Yeah. And especially in fast growing businesses, revenue growth increases the complexity faster than most systems can mature. expenses rise quietly, working capital gets strained, operational efficiencies compound slowly. Well, the top line rises, the margin compresses slowly underneath. Most leadership teams measure growth, top line growth. They don't measure profit integrity.
And that's where the hidden tension within an organization can reside.
Bernie (03:29)
So a typical company like i is this something that a solopreneur would experience or is this some something that a two hundred person company experiences or is this something that's like large corporate? Is it does it does it matter? Is is there a distinction other than you're closer to the problem if you're a solopreneur?
Karena (03:46)
It profit optimization or profit loss does not discriminate, regardless of the size of your business.
Bernie (03:53)
You're doing it wrong, you're doing it wrong.
Karena (03:55)
It well and it's not necessarily doing it wrong, is that you may not know what you don't know yet. And and that's okay. But that that's that's what these conversations are for is to help inform and educate business leaders, business owners of what is out there they may not be taking advantage of and how to really leverage it to improve the strength of their business. But yes, it's and and oftentimes I'll be asked, do you have experience in
this industry. And I'm not an industry expert. I'm a financial expert. Because as as long as it's a business and they have revenues and profits, that's where we focus. Our focus is very narrow across the profitability segments of every business that we
Bernie (04:40)
You know, it it's it's interesting 'cause some people think they look they think the business looks healthy, and there's something missing. w what would be the flags going, everything's just right as rain, but you know what? There's not rot, but there's there are gaps. You know, the the foundation is not as solid as as you expect. What would be the flags that would help a company go, Hmm, I think things are fine, but
Karena (05:03)
Number one, listen to that tingle in your spine. I always tell people that your intuition is telling you something isn't right. usually it's the revenue is up, but the cash is tight. organizational the the business EBITDA is positive, but the working capital is stressed. Rising sales, declining gross margin percentage.
This is this is a one I hear often is that we'll fix that next quarter. Or operations are admittedly a bit chaotic and say this will smooth out next quarter instead of saying, well, let's look at this now. another indicator is no one sitting at the table can ex clearly explain margin by product, client, or division.
Those are typically early warning signs that there's some opportunity that we can go after.
Bernie (05:51)
He touched on something you said, by department and so size does matter and so the more of a catastrophic result. Well it almost sounds like it's one thing to understand the financial numbers based on each element that you've just described. But operationally, what else is involved? Like I've heard the use of the word lean in in manufacturing.
Right in the manufacturing space, if you do something lean, it's provides more efficiency. So do you look at what drives those numbers also? Like if it's operation, you know, if they're painting red wagons and red paint's too expensive, maybe go to blue or fuchsia. I mean I'm joking. I don't know if I can see a fuchsia wagon rolling down. But do you also get into that part of the fence or that side of the business?
Karena (06:34)
Absolutely.
Absolutely. you know what happens is most reports and dashboards that leaders are looking at, they show lagging indicators. They show results, not causes. And profit leakage and and this can be a little controversial, but profit profit leakage happens operationally first and financially second. If
A business is not tying operational metrics directly to margin impact, your dashboard and your reports are incomplete. Typically, that's when we would apply a forensic financial analysis, is to really identify what operationally is causing the highest number of lost leaders. That's typically where we start. And then that drives back to the finances of the business.
One one thing to remember, finance reports the results. They are responsible for the results.
Bernie (07:28)
Yeah, having lived in the corporate world for over 36 years, sometimes you you get it, you know, if I turn the light switch on, I'm consuming power or turn the tap on, I'm consuming water, right? So there's there's the you know, there's an action. Is there in that whole s landscape also stuff that are soft tangibles? In other words, you know, it's not like turning on a light switch. It's like employee turnover, right? Which is is that also part of that whole landscape too?
Karena (07:54)
Absolutely. because those are operational expenses and oftentimes they're not considered for the whole profit margin of the organization. It it's
When when you look at the data of how much it costs to recruit an individual and then how much it costs to retain that individual, the constant recruitment is exponentially more than if you were to invest in retention of that high quality talent.
get there's there's opportunity to look across the business end to end, top to bottom, and identify the different segments of the business where there might be levers that can be optimized and levers that can be pulled.
Bernie (08:33)
And in the in the entire process, I've s I've seen it one time. I was involved with the procurement of a a a chiller for a building, basically an air conditioner, but you know, on a grand scale. And the guy says, do you want the warranty with this device? Right. And so it's it's a two, three hundred thousand dollar piece of kit. And I said, Well, what's the lifespan of the machine? He says, Well, you know, everything we'll our warranty out the door, standard warranty is maybe a year or two years, something like that. Said, Well, how
If I buy the extra warranty on behalf of the organization, what does that mean? Like how are you able because I I you know that there's there's a loss if you know, if they if they anticipate a failure a year three or four, that could be a component failure. And the guys I said, how do you ensure that you don't have that issue? because you have paid this extra money. Well, we beef up the belts, the bearings and you know, the components that would normally break and wear.
In in your review of a business yeah, I know, I know. I'm sitting there going, yeah, beggar, yeah, you just you just moved the needle here, right?
Karena (09:30)
Yeah, he he just gave you the answer, yes, exactly.
Bernie (09:33)
Yeah, and that's fine. You know, at the end of the day, I'm like, yeah, I I and since I, you know, operationally I was responsible for that system and if it went down, right, it usually it's you know the hottest day of the year and and clients will be looking at you with a hairy eyeball. But from a from a from a business perspective, when you're looking at something, like even employee benefits, some people will you know, if well that's not that that's not really a tangible and you know, make them do you find that
Going that extra mile, spending that extra, extra coin up front. Like the extended warranty in my instance. Is that something that you also go, listen, you've got this, this is base base model. Do this and you'll have a longer range, a longer life without without interruptions or less likely to have interruptions and have a kind of a security around it. You also look at that piece too.
Karena (10:18)
Absolutely. It's it's to your exact point is and that's a great example of a chiller unit, is you know, it is an investment. And then beefing it up is part of that investment. Whereas a warranty could be an expense. If it doesn't make sense, let's do what we need to do up front to make sure that the longevity of that asset is put in place, where that warranty just becomes
an added expense and there's there's no real value to it. just to add to that point, when purchasing assets, that's when before you just assets, that's when you want to have a discussion with your tax strategist. The timing of the purchase of that asset could be critical of time of year and the implication for taxes as well.
so and I find this often that they're pulled in after the fact, after the purchase has already been made, but your tax strategies should be part of those upfront discussions before the purchase is actually made to take advantage of cost segregation and accelerated depreciation and the time of like I said, the time of year that that purchase is actually being applied to the bottom line of the business.
Bernie (11:25)
Time of year is that meaning you're coming to the end of your fiscal or the beginning of your fiscal? And this is the slide. I'm not an accountant. All right. And so when I was running this operate, but when I was running this business operation, someone says, we're gonna capitalize this. And I'm going, well, what does that mean? All right. And so that say if I bought a thousand dollar piece of hardware and it depreciates over ten years, it's a hundred it has an a hundred dollar. And I saw what it did to my budget, my operational budget. It made it look nice. Money went out the door, which
This can be a very confusing concept to somebody who goes, hi, you know, light switch on, light switch off, and they're going, the light switches on only a tenth of the time.
What does that timing look like? Do you buy stuff at the top of your fiscal or is it a top of your tax here and that's how you cycle it? Or like how how do you strategize or like what are kind of the general rules of thumb to to engage in something if you're doing capital expenditures or other expenditures?
Karena (12:15)
and it doesn't matter what time of year it is, you want to make sure that professional, that tax strategy professional is in that conversation because they are assessing and they're looking forward as to when is the best time for us to make this purchase. sometimes it's mission critical and we just have to do it. Other times there's options of do we do it this quarter or next quarter? so
Again, I can't speak to that as as I'm not that person. However, I bring those people in. Like
Bernie (12:48)
Smart move.
Karena (12:49)
you like you, we we know the points in the conversation when there's other people that should be sitting at the table with us to make sure that we're making a holistic decision and not a silo decision.
Bernie (13:01)
So we we talked about the operations on that side of the fence. If I flip the coin over now and I'm looking at my marketing sales team and which are two separate entities, and and I have my production team, you know, if I'm making widgets. Do you find there's a disconnect between the sales, marketing and production of of a company sometimes that causes it leaks also?
Karena (13:24)
sure. sure. that's that's fairly common where, you know, sales is incentivized by revenue, operations is incentivized on throughput, and finance is incentivized on reporting. what I find very often, and you mentioned sales and marketing and other areas, they all have their own reporting. And when you put everybody in a room together, nobody has the same numbers.
it that's where you really want to structure the business around having a source of truth for all the data. you know, the sales, the marketing, the operations, finance, accounting should all be updating and coming from one source of truth and and centralized that data. This also helps when you are implementing automation and now AI, AI is everywhere.
AI doesn't need to be in everything, but we want to consider where does automation make sense, where does AI make sense? And both automation and AI, if they're implemented on top of what exists today, they're only going to amplify what is inefficient. We need to make sure that the data itself is structured in a centralized way.
the both of the automation and the AI to perform as expected. I see a lot of that where AI is being brought in or even other automations and they're laying it on top of what exists today and garbage in, garbage out. and with the emphasis on AI, I definitely wanted to spotlight that how important the structure of your data and the source of your data that everyone is is reading from the same sheet.
That's really when you're going to get your arms around the optimization and the profit, the profitability of the business as a whole and not just segment out each department.
Bernie (15:11)
I I get the need for incentive and just to encourage it's a reward-based system. And it's financial. Is there because if you say the the salesperson is doing something, the marketing person is doing something, and in different budgets, different kind of semi-different silos, but same company. Is there any any way of going in that incentive process? Yes, this is a great idea.
But manufacturing is not ready for that part. You have to in other words, you're trying to tie everything so it's you know, it's like doing a dance. You know, if you're dancing with five people and you're you're kind of doing one of those you know cultural dances, if if one person's out of step, it ripples all the way around that that circle, so to speak, right? And everybody's in misstep. Is there some mechanism either through the AI and reporting, like the incentive is there to do more? However, that said, the if if you do more.
it's gonna screw up the entire process, in which case it's gonna depress everything for the company. is there a balancing mechanism that brings harmony to that that whole cycle, that whole life cycle?
Karena (16:10)
It does. It does because it's a maturation process. You know, if if we were to take sales operations and finance and say, Okay, everybody, we need to do this. The the three of them are not going to get there at the same time. There's going to be different priorities, impact, resources, budget. so you have to put the strategy together and implement implementation plan and then track it to that because like you said.
We're orchestrating many departments and we're trying to get everybody on the same page. It's gonna take a it's gonna take a minute. It's gonna take time to get there. But the tracking of that is key to make sure that we're not putting things in place or doing things that are just checking a box, that they actually have measured value internally until they can actually have measured profitability value. I've been part of so many exercises where
projects were you had to go before a committee to validate their strategic signed what the ROI is and and and and and and then once the projects were approved there was no measurement put in place afterwards to to make sure what we agreed to was actually going to happen and we saw that ROI. And if we didn't, why did we you know that continuous loop so there were processes put in place
But they stopped before they actually completed the end-to-end process. So the intention was good and the intention achieved the goal, but everything that happened after that didn't. Because they stopped. They stopped short of the actual tracking. How do we know this was a good project to invest in to make sure that either we don't do it again in the future or what did we miss that we could have changed to improve the process next time?
I was actually part of a large scale schedule I I led at Chrysler North American headquarters. We at the time our timed from an idea of a vehicle to delivery on the road was seven years. And my charge was decrease that down to we want to compete with Toyota, which was 18 months. My charge was get us down to 18 months.
We want to compete with Toyota. So that meant talking and working with every single department across the organization that had anything to do with the the ideation of a vehicle, all the way down to it hitting a dealership floor. It took 18 months of getting the key players and talking through their processes at length in detail, saying, This is what I need from you. I'm not getting I'm not getting this from you.
And really exposing where each of the departments were deficient in porting the transition and the handout to the others. Long story short, it took us 18 months and we were able to decrease our time to market from seven years down to two and a half. We didn't get to that 18 month target, but we got to two and a half, and the leadership was absolutely thrilled. But it it emphasized the importance of getting the key players in the room that as we're receiving
from one section in the business doing our completing our deliverables and then sending to the other, how important it was that we clearly understand how we need to receive and how we need to give information and data back and forth at a very large scale.
Bernie (19:27)
Well, my my host of questions just popped into my head as you're describing that whole thing and is thinking, so is there a a systemic process of bringing that together? Does the maturity level of the people coming together have an impact? I'm gonna suspect the answer is yes, unless of course they're really stubborn. So flexibility is also maturity, flexibility, and
Is there is there a kind of a a a you know I mentioned the lean earlier or Kaizen and I those are just a couple. I'm sure there's a host of others out there. Is there a process that's kind of semi semi-defined for companies to take what they're doing now and then improve it as so that turnaround time is effective for them and the client? More more so the client because the client's the one's paying for it.
Karena (20:11)
Mm-hmm. For that exercise, we of course we we had Black Belt, Six Sigma, ISO, all of all those compliance methodologies. We utilized Agile. we moved very quickly daily. So we were talking to everybody we were getting daily updates, daily reports from every department, and they were very quick meetings. It was stand up meetings where there were no chairs in the room.
We were getting productive updates. We weren't talking. We weren't socializing. Where are we at? What did we accomplish yesterday? What are we going to accomplish tomorrow? See everybody back. What are the hurdles? What are the challenges? What's stopping us? And it was very productive. It was very productive. And it doesn't take a lot to do that. It does t it does require key decision makers to be in there or key SMEs. Most importantly, it's the SMEs.
that need to be in those discussions because they are the ones closest to the nuts and bolts of the business. They are the ones that are saying, wait, wait, this one is gonna the bottom's gonna fall out if we do this. so you definitely want to make sure you've got those key individuals in those meetings. But yeah, and it can happen very quickly. And what a lot of leaders don't realize is that you can change ten percent of your business and it can affect
not the other 90% of your business in a positive way. It's a little bit like the 80-20 pool that sometimes small change can have a significant impact, but you want to make sure you're doing the assessment up front to identify where is that point of opportunity, where can we make the lowest investment for the highest return and then start laying out the blueprint from there.
Bernie (21:49)
So we've just basically discussed something that's up and running, a living organism of the business itself. If the business is looking to bring a new a new product in, you know, you we did touch on like you know, went from seven years to two and a half. But if they're coming in with a whole new product, this this means there's a forecast, or or even yet, better yet, next year. We're doing this year, we got our budget, et cetera. This is what we're doing, et cetera.
Is it wise for the these folks to bring you in to do the budget prep for the following year? Because you know, the I remember again prepping a budget in my in my space and going, I asked the person, Well, why is that number that size? It says, It's based on last year's expenses. But what happens if I don't have the same expenses from last year? And I have a surplus. Well, then we'll reduce your budget. And it is and I'm going, but what happens in the following year? All of a sudden I I double it, right? And I
my gosh, you know, the the you know the the th the floor fell up because no one didn't bolt it right, right? Type of scenario. Do you be part of the planning for the next year's budget also at the same time to help stave off the the gaps?
Karena (22:55)
Absolutely. I was involved in those same exercises as well when I worked in corporate where we would do our annual budgeting. And when I first got in there, like you, I I I was questioning everything. I said, wait, what what's making up these numbers? Why I inherited someone else's budget? And I went into it with a fine tooth comb and the head of finance had said, my gosh, I wish everybody did this. He says, All I get is the same budgets year after year after year.
And I thought, wait, doesn't everybody do this? To your point that it becomes a rote exercise with adding a little bit here and there for things they haven't even thought about yet, but they know we we know we're gonna do projects next year. We might not be clear on what they are, so we're just gonna throw in some number. And when you actually should be doing you should be stress testing. you know, if if you're constantly building in bloat.
How do you know what's real? And how do you know where the inefficiencies lie? And inefficiencies are not a bad thing because it I I mean when you hear the word inefficiencies, people think, my gosh. Well say we want to eliminate inefficiencies. If we can't justify why we're asking for this in the budget, and we say, well, if we don't spend it, we'll lose it. We really need to look at well, why do we want to spend it in the first place?
How is this going to move the organization forward? How is this going to accelerate our strategic goals in the marketplace? So it's the questions that are being asked around those budgetary numbers. And it's not to say this is wrong. It may be the timing might not be appropriate. The project might not be appropriate. The outcome might not be appropriate.
For the strategic goals of the business because business evolves, business change, markets change. So the strategy may change. The goals never change, but how we get there may. And that's a blowback to everyone in the organization. So absolutely, when it comes to budgeting, it shouldn't be a rote exercise. It should be looked at with a very critical lens, but critical to how is this gonna help us accelerate?
where we're trying to get to versus saying that's wrong. It it might not be appropriate. It's just not well aligned instead of being wrong.
Bernie (25:08)
If someone has a budget mapped out and a and a process and something the circumstance changes, we see that with, for example, with tariffs. And again, not not to get into the politic the tariffs, but it doesn't matter if an event, an event outside of your care and control transpires that affects your operations or your outcomes. Is he's getting a decision tree change happen.
And what I'm getting at is you allotted a hundred bucks for this type of activity for electricity, and now you don't need as much electricity, or you mean maybe need triple the amount, right? Well, how like how do you get that? How do you stay agile enough to go, okay? I have this happening. I I've got to do it. There's there's no choice because if I need more electricity and you know the con the demand has gone up because of the change.
How do you adjust so the budget is in alignment with management at the same time? Because the bigger the organization, I can tell you this right now, the bigger the organization, unless of course you have someone that has the immediate trigger finger that you're talking to that says yes, no, my gosh, you know, it committee, you know, depending on how bureaucratic they are, right? how how do you structure it so that it's an instant an instant r resolution at that level?
And then gets affirmed to be the correct path.
Karena (26:26)
That comes back to the structure of the organization. And you mentioned tariffs, it's a good one. Because rarely do external forces cause profit margin issues. And and again, this could be argu argued when people say, you know, I just got a ten percent or twenty percent tariff applied to me, how can you say that? Because if your if your organization
Is optimize the structures in place that you know exactly your revenue and the gap to profit and they move together, you're going to know instantly how you can respond to that. the terror, for example. You're gonna know instantly how much can we absorb, how much do we have to pass on, how do we have how does this affect our pricing? How does this affect our landed cost? You know, how does this affect
and and and and and without having that confidence in your working capital you're left to react instead of respond and you know we've all talked to the CFOs that I know me personally I've talked to CFOs where they say I feel like I have no options that we're just we're just getting this external impact into our organization
That right there is very telling that if if somebody were to say we'd have a conversation about the profitability of the organization, now if they said if we were able to determine their type, they've got their arms around it, now we need to look at i and I would question that because that's where a tariff, for instance, they can come down the next day. An organization cannot affect pricing.
That quickly. They cannot affect supply chain that quickly to balance to offset that impact. They're pricing, they're immediately going to lose on paper because they can't adjust their pricing that quick. They're immediately going to lose on shipping and freight, and all the other adjacent aspects that support that, unless they are prepared for it. In the last 12 months, tariff tariff management.
used to be asset it and forget it. In the last year or so it has created a new environment where it is very active and it is forcing executives and owners to become reactive. They want to change that to structure their organizations to make sure they're responding and not reacting. So they can they can make decisions based on
information and not based on emotion.
Bernie (28:52)
I get what you're saying and I I I I totally understand it. The ability to be agile in in your pricing.
The fuel industry. I I go out where I live, now drive out, and it's in liters because it's in Canada. And I go out in the morning, it's a dollar thirty a liter Canadian. I come home around ten o'clock at night and it's now a dollar dollar ten, dollar twelve, and I'm thinking, what happened to all that money? I I mean it's pennies, it truly it's pennies, but I'm thinking
on a large scale. So is that a and and maybe are there industries what I'm highlighting are are there industries that are fluctuate because you know the question comes up well why is gas more expensive now or cheaper later on? And I in a day in a whole day fluctuation, I don't know if it's just competitive pressures that are kicking in, but then I get told that, you know, when they're changing over the fuel seasonally, then there's a there's a price fluctuation because one's more expensive to produce.
I get that. And then something happens halfway across the world. the prices just jumped up. It almost sounds like the stock market. Maybe I should equate that with the stock market even better. Is that something then is is as a model of a reactive pricing on demand and influences, or is that a kind of a separate whole model and a onto its own?
Karena (30:08)
Being a commodity, that is a very reactive yes, yes. And and with with gas that's a really good example, they're looking at all the cost end to end. So if the price goes up on diesel fuel, it's now going to cost more to ship products up the ocean.
It's now gonna cost more to take those products from the port to a warehouse. It's now gonna cost more. So they have to respond very quickly and and their supply chains, that that's an example of an industry that has very tight supply chains. because as something is changing with the geopolitical impact, they're able to change and adjust accordingly. And the fuel industry, their margins are at the pump.
the margins are very thin. The closer you get to the actual oil coming out of the ground, the margins are larger. The further it gets from the ground, the smaller the margins become.
Bernie (31:06)
Yeah, that's interesting.
Karena (31:08)
All of the the touch points between getting it out of the ground and actually getting it into the pump.
Bernie (31:12)
So would you say they're a now you you mentioned commodity versus you know what are the different other elements and if it's commodities one of them, what would be its its brothers and sisters of that of that universe?
Karena (31:27)
commodities food? Food food is a commodity. gosh, right now precious metals.
Bernie (31:32)
Precious metal s or SAS, even like you know, it so if you had commodities, what other elements are being sold out there? So commodities, one of them food, fuel, and stuff like that. software or tech, not so much as a commodity, but it's something that's in the either eat in the ether. Something that's coaching would be another another element where it's a a a person on person. Are there other other buckets of things being sold that
Would involve this whole process.
Karena (32:00)
the N to N the N to N process?
Bernie (32:01)
Yeah. I I I'll I'll edit this part out. What what I'm getting at is if if if there's commodities, right, what else is there other than commodities that that a company produces? Is there anything else other than commodities?
Karena (32:13)
okay. I I see what you're saying. Yeah, because there's
Bernie (32:15)
Yeah,
sorry, I I I really I I I phrased the question really wrong, so I apologize. I'm thinking I'm trying to be svelte and then the sveltness just fell off the gra off the off the wagon.
Karena (32:24)
No, that's okay because I I actually did s do some work in the commodities trading and and things like that. So that's where my mind went. and you're thinking that pretty much anything is a commodity. Yeah. that's that's where I was going,
Commodity is a physical product.
you know, when it comes to coaching or SaaS, that should be a value based product. now, you know, what what goes into that end to end? Development costs, people, hardware, software, data centers, things like that. I'm I'm not sure if I'm answering your question, Bernie.
Bernie (32:55)
You actually you you just you touched on it a bit when you said data centers. So AI, for example. The capitalization of AI. Right. There there is a a hard asset in part of the if part of the chain. That's the data center, right? Where where everything sits and you know, the wheel is spin.
Is that something then that should be going through this whole process? Commodity, the fuel example is great, and then the food food example will also work because you're you're tracking something that from point of origin to and and delivery to consumer. In the AI market, there's no actual physical product. I I don't have a box of AI sitting on my desk. It might be a computer, but it's it's actually not a it's not a
I can touch it and play with it and throw a ball to it, right?
Karena (33:38)
Exactly.
Bernie (33:39)
do you do that whole process for stuff that is more conceptual, less hard, tangible in front of you?
Karena (33:45)
absolutely. when it comes to AI, that's an interesting example as well, because what I'm seeing is there are a lot of AI wrappers out there versus native AI solutions. So I would look to see what's what's the best solution, a wrapper or something actually built for the organization. And
It comes down to the need. What what's the need and what's the objective? What do we hope to accomplish with this? And with AI, especially AI, we should never be implementing AI without an ROI attached to it. right now I'm seeing leaders buying AI software here, there, and everywhere because it's a frenzy out there. And they don't know why they're buying it.
And they'll say we need to implement this. And my very first question is why? and based on that response, I'll know whether there is a strategy behind it or not, and where the conversation needs to start. Because you should not just AI, but anything you're bringing into your organization, anything you're changing about your organization, and I mean anything. well, how does this align to the strategy of the organization? if we cannot clearly define that.
We shouldn't be doing it. We shouldn't be paying attention to it. Now, you can you can justify anything to anyone if you want to hard enough, but we need to look at it again with a critical eye to say, does this make sense? Is this the right move right now? It could be we need to implement AI, but it could be six months from now. again, it's that that timing as well. And one thing I'll caution owners and leaders with.
When you're thinking about AI to bring it into your organization, your business to help you with it, a lot of what I'm seeing out there is the expectation is it's very immediate. It's, you know, we're gonna implement AI in two weeks, our our bottom line is just gonna be amazing. You have to do the strategy, you have to have a a roadmap, you have to build it, you have to train it, you have to monitor it. It's just like another employee in your business.
It needs nurturing, it needs care, it needs oversight. You also need time once it's deployed, you need time for it to actually make the changes you're intending for it to make. and this can sometimes take months before you're seeing the actual impact that will have in your organization. So if you are leading projects that are AI enabled or driven by AI.
Make sure your expectation is very clearly defined as the timeline of when you should start seeing these measurements and make sure they're measured. And most importantly, make sure they're measured. And I would I would stress that AI pilots should be around four to six weeks. They should not be long months. They should be small to prove the concept of what it is you're trying to accomplish. Once that's proven.
Then scale it. But don't try to boil the ocean. I see a lot of the we need to do everything now and hundreds of millions of dollars being invested into programs and projects that 18 months to two years later still haven't delivered anything and they have sunk millions into it. So make sure that it is defined as a deliverable and it is smaller scale, once it's proven, then scale.
Bernie (37:06)
The greatest fears with AI or surrounding AI and even before AI became a a dominant character in in the universe here, was layoffs, like we're we're not doing well, we gotta we gotta cut jobs. Is there a kind of a balancing act? Because when you cut a job and you have a an employee that has, you know, tenured, seasoned knowledge
Once you shed them from your your space, you're shedding institutional knowledge, you're sh you're you're shedding business knowledge. And, you know, to rehire and re retrain, you know, it takes time. So you won't you you lose efficiency. Is there a kind of a balancing between, you know, for layoffs versus you know, let's try let's try to do this in a different approach. Is there is there a strategy p in in place for that type of flow?
Karena (37:50)
Absolutely. And that's a great question. And it it comes back to having that pricing discipline, having you know, have you gone back and renegotiated all your contracts? Do we have cost segregation, tax strategy, supply chain? are we looking at eliminating unprofitable SKUs or clients? Layoffs should be a last resort. if if
The company is strained with cash flow, it should be looking at the structure of the company, and its employees should be last. The smarter question when a leader is saying, where can we cut? The smarter question is where is value that is under monetized in the organization? this leads to the profit optimization, cross-selling opportunities, strategic partnerships.
improved capital deployment. a business, the best way to grow a business is through strategic partnerships or acquisition. So I and I hate to see these massive layoffs. We see them in the headlines all the time. But if you watch, usually three to six months later, and this is usually a buried headline, after a deep cut, they have to bring people back. Because it
Cost cost reduction to me is very blunt. and it's a one-time, it's a one-time hit. Profit optimization is structural. expense reduction is that one lever you can pull. Profit optimization is a system. And expense reduction is just one lever in that system. Hopefully that helps delineate.
Around the expense reduction. You always wanna keep an eye on cost controls, but they should not be the reason why you are laying off people. There's so many other aspects of it that should be optimized before that. If you have ever gone through as an organization, if you've ever had to have a large layoff, that is indicative.
as well that you may have some structural opportunities that you can put in place to prevent that from happening in the
Bernie (39:48)
Right now. It's great conversation. So many more questions to ask, so little time. So if someone is listening to this podcast and they're going, Wow, I need to talk to Karena, how should they find you? And how far afield do you service?
Karena (40:02)
we work globally for a profit strategy and my work is really helping leadership teams shrink the gap between revenue and retained earnings. so their companies aren't just larger but structurally stronger and more resilient. And what I would say to anyone listening to this is that if this conversation made you slightly uncomfortable, that's a good sign. That discomfort often means
There's some hidden profit that lives within your organization that we can go and attack for you. we engage with a limited number of companies each month. So the first step is determining whether there's a measurable opportunity to pursue for you. And I can be contacted directly through our website, ProfitLinz profit l-in-z dot com. And we can start a conversation from there.
Bernie (40:49)
Trina, this is one question I I I did forget to ask during the podcast. we've talked about for profit businesses. Do you also do non for profit?
Karena (40:58)
Absolutely. Absolutely. Yeah. Perfect. There's usually a lot of opportunity in non profits as well. And we know that they're doing good work if we can optimize those margins and that working capital that's going to push out to those initiatives even more, hopefully exponentially.
Bernie (41:18)
Wanna say thank you to Karena Bell and you the Knack 4 Business Listeners. This is a a really great conversation. if you're sitting there going, Hey, wait a minute, what about this? Reach out to Karena. I mean, she looks at the revenue. It's not just little line items by themselves, but how everything comes together and gets threaded into one package. if you want to take your seven year production cycle down to two and a half years, she's been there, done that, and got the t shirt.
To reach us our website is knack4business.com, which has the web indexer chat bot that can help you search other podcasts out on the website. Thank you so much.
Karena (41:53)
Thank you, Bernie