The Vital Five Numbers Every Business Owner Should Know With Michael Barbarita

In this episode of The Same Day Podcast, Yoni Schmidt talks with Michael Barbarita, Founder and President of Next Step CFO, about the five financial numbers every business owner should know. Michael explains the Vital Five, why cash flow deserves daily attention, and how financial visibility supports smarter growth. He also discusses forecasting, profitability, and competitive differentiation.

The Vital Five Numbers Every Business Owner Should Know With Michael Barbarita

Michael Barbarita is the Founder and President of Next Step CFO, a firm helping business owners build more profitable companies through financial planning, cash flow forecasting, and disciplined decision-making. With more than 40 years of entrepreneurial experience, Michael has built, scaled, bought, and operated businesses, including growing Ski Town, USA from $2.5 million to $8 million in annual revenue. He combines decades of hands-on business experience with strategic financial expertise to help owners improve cash flow, increase profitability, and grow with confidence.

Here’s a glimpse of what you’ll learn:

• [2:22] Michael Barbarita’s biggest lesson from decades of business ownership and entrepreneurship
• [5:53] Why cash flow matters more than revenue for running a healthy business
• [9:43] How Michael approaches growth, customer value, and competitive differentiation
• [15:19] What business owners need to consider when scaling to the next level
• [18:44] The “Vital Five” — key financial numbers that every business owner should understand
• [20:47] The seven-step pathway to profit and the small improvements that can compound into significant growth
• [28:42] Michael’s financial habits and advice for building a stronger, more sustainable business

In this episode…

Business owners track plenty of numbers, but only a few truly shape better decisions. Knowing which financial metrics matter most can make it easier to manage cash flow, protect profitability, and plan for growth. So which numbers should every business owner know?

Michael Barbarita, an entrepreneur and strategic financial expert with more than 40 years of experience building, scaling, buying, and operating businesses, says the answer starts with five essential financial metrics. He recommends tracking weekly sales, gross profit dollars, gross profit percentage, weekly net profit, and daily cash balance, which he calls the “Vital Five.” Michael also stresses the importance of understanding cash flow timing, using financial forecasts before making major spending decisions, and watching gross profit margin closely. By staying on top of these numbers, business owners can spot problems earlier, make smarter decisions, and grow with greater confidence.

Resources mentioned in this episode:

• Yonatan Schmidt on LinkedIn
• Mat Zalk on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Michael Barbarita on LinkedIn
• Next Step CFO
• “Beyond Traditional Buying: Exploring Creative Real Estate Financing Techniques” with Chris Prefontaine on The Same Day Podcast
• “Exploring Co-Living as a Profitable Investment Strategy” with Grant Shipman on The Same Day Podcast
• “Standard Approaches To Integrative Pest Control: A Property Manager’s Guide” with David Yuen on The Same Day Podcast
• The Compound Effect: Jumpstart Your Income, Your Life, Your Success by Darren Hardy

Quotable Moments

• “The hardest step to take after you fall on your face is the step after the fall, the next step, the next step.”
• “The ability to take action is a skill in business that’s very, very valuable.”
• “You have to understand that if you’re going to take your business to the next level, something has to change.”
• “The ability to adapt to change is a critical skill in the scaling process.”
• “If you just know the story, you don’t have to read the numbers. Just find somebody to tell you the story.”

Action Steps

1. Know your “Vital Five”: Tracking weekly sales, gross profit dollars, gross profit percentage, net profit, and daily cash balance helps you make more accurate business decisions.
2. Monitor your cash position every day: Knowing your current cash balance and understanding where cash is tied up helps prevent small financial problems from becoming serious ones.
3. Use cash flow forecasting before making major decisions: Forecasting helps answer important “Can I afford it?” questions about raises, new hires, equipment, locations, and other investments.
4. Do what your competition is not doing: Creating distinctive offers and solving customer problems in ways competitors overlook can build a stronger position in the market.
5. Improve the few activities that drive most of your revenue: Small gains in leads, conversions, closing rates, retention, sales value, purchase frequency, and cost control can compound into significant profit growth.

Sponsor for this episode…

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need. 

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

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Episode Transcript

Intro 00:04

Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management, and entrepreneurship. Now to the show at hand.

Yoni Schmidt 00:20

Hi there. Yoni Schmidt is here, hosting today’s episode of The Same Day Podcast where I connect with top business leaders, entrepreneurs, business owners, and more. Past guests include Chris Prefontaine, Grant Shipman, David Yuen, and many, many more.

Today’s episode is brought to you by Keyrenter Property Management. At Keyrenter Property Management, we are a full service property management company that is helping clients buy, renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management. Go to keyrenterpmc.com or email us at [email protected] for more information.

Today’s guest is Michael Barbarita, Founder of Next Step CFO, entrepreneur, investor and fractional CFO. With more than 40 years of experience building, scaling, buying, and operating businesses. He’s lived both sides of entrepreneurship, growing a retail company from $2.5 million to $8 million in annual revenue, helping structure major business acquisitions and experiencing the painful reality of closing a company after business failure. Those experiences inspired him to launch Next Step CFO, where he now helps business owners build more profitable companies through strategic financial planning, cash flow forecasting, and disciplined decision making. 

Today, we’re going to talk about what separates businesses that merely survive from those that thrive. Why cash flow, not revenue, is the lifeblood of every company and how entrepreneurs can make better financial decisions before small problems become expensive ones. Welcome to the show, Michael, and thank you for being here.

Michael Barbarita 01:59

Thank you, Yoni. Thanks for having me. Appreciate it.

Yoni Schmidt 02:01

Of course. Okay. Let’s dig right in. I mean, let’s kind of get into your story. Your story is unusual because you’ve experienced an incredible success and devastating failure.

And you’re also open about it, which many people aren’t. Looking back today, what did those two experiences teach you that no business school ever could?

Michael Barbarita 02:22

One thing. So, you know, I, I had success and then failure. So it’s like I had success and then I took stupid pills and I had failure and.

Yoni Schmidt 02:33

And so.

Michael Barbarita 02:34

Yeah. And so the one thing is that the one, the one thing that separated my success from my failure is doing what my competition was doing. That was the failure. Doing what my competition wasn’t doing was the success. And that’s why we, you know, that’s why we teach, we help business owners with business and financial strategies that their competition isn’t doing that because that’s my story.

We, I, I did what my competition wasn’t doing in my successful ventures, my unsuccessful one. I did exactly what my competition was doing. And 95% of small business strategies used today are identical to your competitors. They don’t work.

Yoni Schmidt 03:16

Yeah. Interesting. That’s what you know, my professor of management at the Price University of Business at the University of Oklahoma, Doctor Anderson would say, you know, it’s, you’re either differentiating or you’re achieving some sort of competitive parity, right? Just doing exactly whatever your competitor is doing. So that’s interesting.

Thanks for sharing that. You, you named your company Next Step CFO because of what happened after one of your business failed. Is that correct? Right, right.

Michael Barbarita 03:46

Yeah.

Yoni Schmidt 03:46

Can you tell us a little bit about that story?

Michael Barbarita 03:48

Sure. So, you know, like I said, I, I must have taken stupid pills or something because I did exactly what my competition was doing where, you know, it was a medical facility that I had started and it was a unique medical facility. But but I was still I had a lot of services that a lot of other competitors had. And I, I just handled it the same way. I visited doctors, I gave chocolate cakes to the front office like everybody else did, to the front office staff to bribe them to see the doctors.

And it was not really the way to go, the way I should have marketed that business was direct to the consumer. That was my biggest mistake, and none of my competitors were marketing that way. They were all marketing to doctors. So I, I learned a great lesson. And, you know, I, I, I, I fell on my face. 

 And when I, what I say is that the hardest step to take after you fall on your face is the step after the fall, the next step, the next step. And so next step. CFO was born at that point.

Yoni Schmidt 04:57

Got it. Yeah. Interesting. Well, you know, I’ve been there. My mine was a little different.

I didn’t I didn’t achieve success and then failure. I just went straight into failure. So I was fresh out of college and I thought I knew something. But truth is I didn’t know much. And, you know, I lost a little bit of money, but I was young and bounced right back. 

 So for those out there who I think fail, it’s an important lesson. Just, you know. Yeah. Think about the next step because, you know, you shouldn’t dwell in the past and look into, you know, what happened. Just focus on the future and how can you learn from the mistakes that you’ve made. 

 Right. Let’s talk a little bit about cash flow. You talked you talk a lot about cash flow, right? Business owners often obsess over revenue. And, you know, your focus has always been on cash flow. 

 Why is it that cash flow is the number every entrepreneur should lose sleep over instead of top line sales, right?

Michael Barbarita 05:53

Well, because you know, you cannot I don’t know if anybody’s ever tried to operate without cash. But it’s really, really difficult. Yeah. You know, operating without revenue is difficult too. But, you know, most most companies that or most businesses out there, you know, can generate revenue.

I’m not saying they generate enough, but they, they, they, they can generate revenue. But it’s, it’s the cash that they can’t seem to get a handle on. And there’s a variety of reasons cash has hiding places. Revenue does too. But cash has cash has hiding places. 

 You know, receivables is certainly a big place. Inventory is a place where people never look. If they are if they have inventory that that is a that that is the most hidden. That cash is because business owners don’t understand that their inventory is basically a bank account. And but, but they. 

 But that they have to make liquid in order for it to have any value. So, you know, inventory is a big thing. Prepaid expenses. Sometimes people pay for trade shows and those types of things that, you know, happening in the future. Insurance things that are happening are being incurred in the future. 

 Capital expenditures is another area. Sometimes also the business owner takes too much in salary that abuses, you know, pretty much abuses the company with, you know, withdrawals and and so forth, set high salary. You know, they don’t really know how much they can take. You know, that’s, that’s, you know, one of the, one of the biggest questions I answer for business owners with incredible accuracy is the can I afford it question, can I afford a raise? Can I afford a new truck? 

 Can I afford a new location? Can I afford a manager? Can I afford a new employee? All these questions I can answer with a business and cash flow forecast, which is one of the things that I do for, for business owners. And, and, and that’s one of the one of the main reasons why I do it, because it answers that. 

 Can I afford a question? They don’t they don’t know what they can afford. And sometimes even when, you know, they might have taken out too much salary, they didn’t know it. They didn’t know that they don’t know it. They don’t know that that’s the problem. 

 And you know, that’s, that’s why they need someone like us.

Yoni Schmidt 08:18

Yeah. That’s great. You already answered my next question, which was to ask about, you know, the rolling cash flow forecast, you deeming it as the centerpiece of every successful business strategy. So I’ll move on to the next one. But what is the biggest cash flow mistake that you see otherwise successful business owners making?

Michael Barbarita 08:38

I think the biggest, biggest cash flow mistake is, number one, not knowing what your current cash balance is on a daily basis, number one. Number two is inventory without without a doubt. Now, you know, service businesses like businesses in the trades, they don’t have inventory, so they have to worry about it. But usually their biggest problem is receivables and how to manage deposits, how to, you know, how to really manage the deposits and the cash cycle that they have because, you know, they have jobs that could last for a long time. And so you have to be able, you really have to understand your cash flow if you’re going to, you know, take on a job, maybe take a lower deposit, you know, shouldn’t.

But if you do, you know, you should, you should understand the ramifications of that, the cash ramifications of that.

Yoni Schmidt 09:29

Thank you for that. I want to talk a little bit about scaling businesses. You grew Ski Town, USA from 2.5 million to 8 million in less than five years. Tell us about the biggest decisions that unlock that growth.

Michael Barbarita 09:43

Absolutely. So there are a couple, you know, one of the things that we’ve always helped business owners with is how to make compelling offers. And two of the compelling offers that we made. And I’ll quickly go through the five components of a compelling offer its scarcity, urgency, risk reversal, which I’ll get to deeper, adding more value to your product or service, packaging and bundling products and services together, and then being indifferent to the outcome, being disconnected to the outcome. So those, those five things are very powerful ways to make a compelling offer.

So the reason why I say compelling offers was the impetus of our growth is because we had two very compelling offers. Number one, the problem the customer had in the ski retail industry was that they really never knew the ski they were being sold was the right ski for them, until they got up in the mountain and tried it out. But now, but but the problem is retailers had was, you know, once the ski gets skied on, it depreciates dramatically.

Yoni Schmidt 10:49

Right.

Michael Barbarita 10:50

So what we did is we implemented what we call the ski guarantee ski. The ski three times. You don’t like it. Bring it back for a brand new pair. Now, my employees thought I was out of my mind because they, you know, they knew the ski depreciated immediately and they had visions of thousands of pair of skis coming back and them having to do a lot of work and us losing a lot of money.

But I had a little different opinion. My opinion was, is that all the all the customer really wanted was a great ski experience because for a skier, nothing ruins their day more than, you know, a, you know, bad skis, boots. That hurt.

Yoni Schmidt 11:29

Yeah.

Michael Barbarita 11:30

You know, bindings that are loose skis are not tuned. It just ruins the day. It’s a pathetic thing, you know? So, yeah.

Yoni Schmidt 11:38

I’ve been there.

Michael Barbarita 11:39

Okay. So that that’s it. But that’s what they that’s all they wanted was a great ski experience. They didn’t want to put one over on the retailer. We sold 8000 pair of skis.

The first year. We implemented a 25% increase from the year before, and only eight came back next year. 11,000 pair, 11,014 came back. The point being is that the the. The skier wasn’t just one of that. 

 All they wanted was a great ski experience. Why can’t we supply that for them? Yeah. So so so that that was one of the real important ones. Another one was, remember I told you a little earlier that one another compelling. 

 That was a risk reversal. Another compelling offer is packaging and bundling products and services together. So one of the things that we did that our competitors never copied was packaging clothing. And let me explain why and how we did that. So every ski business, every ski retailer, packaged skis, bindings and poles, everyone, you know, like everyone, what we did is we took the most popular ski graphics. 

 We went to the clothing department and packaged up matching hat, parker pant and sweater And sold that as a package and they flew out the door. And our competitors. The competitors never did it. They didn’t. They didn’t think that it was important to package clothing. 

 And so we did. And it was incredibly successful. And they never copied it. They never copied the risk reversal either, which was incredible because, you know, people would go over to their to my competitors and say, well, do you have a ski guarantee like ski Town? And, you know, no, no, we don’t have that, you know.

Yoni Schmidt 13:25

So.

Michael Barbarita 13:26

So and, and they never copied it, which is incredible. So it was just a, I think those two things for sure come to mind as part of the impetus for the growth of the business. You know, we did we did a lot of things that another thing that our competition wasn’t doing is, and this is important for people to understand that suppliers of your goods and Services. They, you know, you give them a lot of money. And so what we did with our suppliers, they had they had to co-op advertising program, which was 2% of essentially 1 to 2% of our purchases.

But we went back and asked for more money. We used to get $10,000 from each vendor to do to participate in a direct mail campaign, where every week we would feature that particular vendor in a campaign. And we had we did a dog and pony show. Now this was above and beyond their 1 or 2% because what we what what people don’t understand is that these suppliers, they have advertising budgets for this purpose, but nobody asks, but nobody asks for it. Yeah. 

 And, and so you’ve gotta. You’ve gotta ask for advertising money. You can’t just Except the the 1 or 2% you might get in co-op.

Yoni Schmidt 14:59

Yeah. Wonderful. That’s a great that’s a great point. Those are all great points, really. My next question is, you know, if a business owner is trying to grow from 1 million to 5 million in revenue, what usually has to change in the owner’s mindset?

Michael Barbarita 15:19

Well, first of all, they have to be action takers. Okay? The ability to take action is a skill in business that’s very, very valuable. You have to be able to do that. You have to be decisive.

And you have to be able to accept change and understand. Here’s what you have to understand. You have to understand that if you’re going to take your business to the next level, something has to change. You can’t do what you’re what you’ve been doing something because business evolves, you know, and that’s, I think, I think you know, this from your from your experience is that, you know, when you have one employee, it’s so much different when you have two and then four and then eight and then ten. You know, things change, your business evolves. 

 Yeah. And so the ability to adapt to change is a critical skill in the scaling process. Yeah. And then, and then, in my opinion, it comes down to implementing business strategy that your competition isn’t. And we have a number of strategies that we help business owners implement that their competition isn’t doing. 

 Yeah. One of one of them is risk reversal. I mean, your competition might be offering some kind of satisfaction guarantee, but that’s nonsense. We notice we had a specific guarantee, you know. Right. 

 You know, it’s a ski guarantee. Ski. The ski three times. You don’t like it. Bring it back for a brand new pair. 

 That’s that’s not customer satisfaction guaranteed. That’s that is.

Yoni Schmidt 16:45

Tangible.

Michael Barbarita 16:45

It’s. Yeah. Right. That’s a direct, tangible benefit. Remember I started out by saying the problem the customer had was they really didn’t know if the ski.

They were being sold by some hotshot ski salesperson, by the way, that would flex the ski in their face was the right ski for them until they got it up in the mountain. So that was the. So we. So that risk reversal solved a problem.

Yoni Schmidt 17:09

Right? Right. Which was the ambiguity, basically that customers were experiencing when they were coming into the store to purchase, you know, a pretty expensive set of skis and very expensive equipment. So very. Let’s talk a little bit about fractional CFO.

Okay. At what point does a business truly need a fractional CFO instead of just a good bookkeeper or a CPA?

Michael Barbarita 17:34

Well, I’ve started with clients at startup, but I also have more generally, $500,000 in revenue is usually a trigger point because the CFO offers, you know, we’re not historians, you know, bookkeepers and CPAs. They have a tendency to look at historical and be historians about things. We look forward. We, we, we look at the data, the past data, but we also, you know, where is this business heading? Is the is the big question that business owners have where, where am I heading?

Where am I going? And that’s forward looking. And so, you know, that’s, that I think is one of the key things that a CFO does that not any other profession does do. And that’s why the forecasting is so important because we can help with forward looking analysis, both strategy as well as cash flow and and profit.

Yoni Schmidt 18:37

Yeah. And and are those the first three numbers that you look at when you start working with a new client? Or what are those numbers?

Michael Barbarita 18:44

What we, you know, they’re, they’re basically there’s basically five numbers that should be in every, in every business owner’s mind. And what I the reason why I say that is I try to simplify it for the business owner. They’re not accountants. They’re not, you know, they don’t really know how to read financials. They don’t even like it, by the way.

As a matter of fact, they pretty much repel it. But you really should understand what your sales are on a weekly basis. You should understand what your gross profit on those sales are, your gross profit percent, your net profit once again on a weekly basis, and your current cash balance, which we talked about earlier, knowing that on a daily basis, understand if you have those five numbers down, then you’re going to be able to make about 70 to 80% better business decisions, more business decisions, more accurate business decisions. With the knowledge of those five numbers, I call it the vital five.

Yoni Schmidt 19:42

The vital five. Let’s just recap them daily cash balances, right?

Michael Barbarita 19:46

So sales.

Yoni Schmidt 19:47

Sales, sales, yeah. Okay.

Michael Barbarita 19:49

Gross profit on those sales. But the dollars.

Yoni Schmidt 19:52

Yeah.

Michael Barbarita 19:53

The gross profit percent on those sales.

Yoni Schmidt 19:56

Okay. Yeah.

Michael Barbarita 19:57

The the net profit for that week and your and your and you already said the current cash balance on a daily basis.

Yoni Schmidt 20:05

On a daily basis. Yeah. Nice. Thank you for, for recapping and sharing that, you know, all those, like you say, contribute to a business owner being able to make, you know, 70, 80% better business decisions that ultimately also lead to profitability, right?

Michael Barbarita 20:21

Profitability and yes, absolutely. And, and you have to know these numbers to scale.

Yoni Schmidt 20:27

Yeah. And, and you talk, you talk about making small incremental improvements that, you know, compound into significant profit growth. Right. Which I’m guessing all tie back to these five numbers. Can you give us an example?

Michael Barbarita 20:39

Well, they do, but they also they also they also apply to my 80/20 rule in regards to business. And let me quickly explain that. Okay.

Yoni Schmidt 20:46

Yeah.

Michael Barbarita 20:47

They do tie back to these five numbers, but it only covers a couple of areas of the of what I consider to be the seven step pathway to profit. Okay. And these seven areas, the way I look at the 80/20 rule in business, most people say 80%. By the way, you’re never wrong about the 80/20 rule. No one’s ever wrong.

But yeah, but most people look at the 80/20 rule as it applies to business and say 80% of my business comes from 20% of your customers. And it does potentially. Probably, probably it’s a law of averages, but the Pareto principle. But what I do, the way I look at the 80/20 rule, is that 80% of your revenue is driven by 20% of what you do every day, and that 20% are these seven steps that I call the seven step pathway to profit formula. That’s the basis for all the strategies, including the one, the 505, but basis for all the strategies that we help business owners implement. 

 And so the first step in the seven step pathway to profit formula is leads not just any lead, but a good quality, high quality lead. Second conversions. What’s your conversion percentage? Meaning what? How many people do you convert into your sales process? 

 Whatever that is. Then then of course closing rates. Then how many of those people do you close? Keeping track of that. Focusing on improving that. 

 Focusing on improving your number of leads. Focusing on improving your conversions, focusing on improving your closing rates. Then the fourth step is client retention. Very an area that’s often overlooked. How do I how do I continue to keep my current client base? 

 How do I keep them happy? What do I give them for perks, whatever you know, to. How do I keep them happy and retained? The fifth step is the average dollar per sale. How do I increase the average dollar per sale for each customer? 

 And then how do I increase the frequency of sales to that customer. And then finally, we have to control our costs. So it’s leads, conversions, closing rates, client retention, average dollar per sale, frequency of sale and controlling costs is the seventh step. If you if you focus on those seven steps that what which would which would only account to 20% of what you do every day, it’ll drive 80% of your revenue. And, and when I talk about what you were talking about earlier is how with little tweaks, this is not major things with little tweaks in each of these seven areas, they compound on each other. 

 So a 10% increase in each of these areas usually represents a 36% increase in sales and a 56% increase in profit.

Yoni Schmidt 23:42

Wow. Yeah. I’m dying to try this on on some of our businesses, so I appreciate that. I like. I’d like to talk about competitive advantage.

One of the you know, one of your favorite topics is building a, a position of market dominance. Right? Tell us, what does that mean? And how can small businesses compete against, you know, much larger competitors?

Michael Barbarita 24:06

Okay. Do you remember my ski business story and the ski guarantee? Yeah. And you remember how I started out? I said the problem the customer had okay, was okay.

And then and then I filled in the rest. Well, that’s the that is what a position of market dominance is. It’s it’s actually two things. And it’s the first two steps of what we call the conversion formula. The conversion formula is, is a formula, an actual formula four step process to convert prospects into sales. 

 Okay. And here it is. It’s four steps. And by the way, it’s based on the premise that the way to get into the mind of a prospect is to, number one, identify the problem they have they don’t want, and the solution they want, they can’t find. That’s a position of market dominance. 

 So. So let’s go through these four steps. Captivate which is the problem the customer has and doesn’t want. Usually the problem is in the industry it’s an industry perception. For example, in the trades, one of the perceptions that the trades has is nobody ever calls them back or they don’t show up on the day they say they’re going to show up. 

 Yeah. Okay. So that that’s a perception problem. You got to counter that perception problem by solving it. You got to solve that problem. 

 But so you identify the problem the customer has and doesn’t want. That’s the captivate first step of the conversion formula. Second step fascinate, which is the solution they want that they can’t find. Third, now that you’ve captivated and fascinated them, by the way, that’s the position of market dominance problem solution. You now have a little time to educate them on why your solution is superior to the competition. 

 And then the fourth step is hitting them with a compelling offer, an offer so compelling that they can’t say no. And earlier, I gave you those five components of what makes up a compelling offer. So you have captivate, fascinate, educate, close. That’s the conversion formula. The first two steps captivate, fascinate. 

 That’s a position of market dominance.

Yoni Schmidt 26:09

Love it. Thank you. Let’s apply this a little bit to real estate and property management, because many of our listeners own own property management companies or real estate businesses or real estate in general. What financial mistakes do you see? Or have you seen companies like ours or our listeners making that limit their profitability?

Michael Barbarita 26:33

The proper incentives to brokers? I, I’ve seen as an impediment, you know. There’s ways to provide incentive to brokers and then to bonus them on the overall profitability of the company. And that way, that way, we know that the profits are in the bank versus trying to increase commission rates and those types of things. So that’s one thing.

That’s one thing that I’ve seen. And so managing, managing the, the cost of a real estate sale that has been, has been a challenge, I think for a lot, for a lot of realtors. The other thing is, is I’ve seen the most successful realtors niche out, you know, divorced women, certain expertise in towns, you know, specific towns. Working with $1 million more a net worth or but I, I just see more success with those particular situations niching out. In terms of property management, I have not had. 

 I’m I’m Actually prospecting very heavily with the property management company right now, but I, I have not got I don’t have any real life experience with property management. I do with real estate and real estate brokerages, but not property management. So it’s kind of an area I’m not as familiar with, but I know we’ll have to.

Yoni Schmidt 28:09

We’ll have to do an episode two after after you land that client.

Michael Barbarita 28:12

All right. Good idea. But yeah, I mean, but I’m betting I’m betting this, that the customer has a problem that they don’t want that needs to be solved. That’s what I’d be betting typically.

Yoni Schmidt 28:26

Yeah.

Michael Barbarita 28:26

Yes.

Yoni Schmidt 28:26

Yeah. Yeah. Looking ahead a little bit, a lot of AI automation, economic uncertainty, changing how businesses operate, what financial habits will separate the companies that thrive over the next decade from those that struggle?

Michael Barbarita 28:42

Know your numbers. But you know, one thing good about a CFO is that At. We’re able to tell you the story that your financial statements are telling you. And I think that that is to understand that story is a critical financial component to, to scale and to, and to break through, so to speak. So I think and, you know, know, know your vital five, know your vital five, but no, but no, no, you’re not know the story your financial statements are telling you.

Because if you just know the story, you don’t have to read the numbers. Just find somebody to tell you the story. And then and then you’ll be fine. And you’ll be able to take that information and utilize that in making the decisions that are going to help you scale.

Yoni Schmidt 29:30

Nice. This is something new that I only started doing the last episode, and I’d like to continue doing it, but it’s a little lightning round. I’m just going to spit off some, you know, questions. And if you could, if you could answer them, you know, really just with a quick sentence, that’d be awesome. What’s the biggest myth about growing a business?

Michael Barbarita 29:52

That it’s easy.

Yoni Schmidt 29:53

True. Revenue or profit?

Michael Barbarita 29:57

Profit.

Yoni Schmidt 29:58

Debt. Is it a tool or a trap tool? One book that every entrepreneur should read.

Michael Barbarita 30:06

God. What’s the name of it? Darren Hardy wrote it. The. The Compound Effect.

Yoni Schmidt 30:11

Awesome. Love that book. One KPI Every CEO Should Know by heart.

Michael Barbarita 30:16

Gross profit margin.

Yoni Schmidt 30:18

Best investment you’ve ever made.

Michael Barbarita 30:22

Skatetown, USA.

Yoni Schmidt 30:24

Biggest financial mistake. Businesses. Business owners can make.

Michael Barbarita 30:27

Not knowing their numbers.

Yoni Schmidt 30:29

Awesome. Now, you know, one little last question here is that, you know, I’ll preface this. You’ve experienced both, you know, building multi-million dollar company and watching, you know, another business fail. If you could sit down with every entrepreneur exactly one year before their business got into serious trouble. What would the warning signs you’d tell them to never ignore?

Michael Barbarita 30:55

Cash flow, you know. Yeah. Understanding. Understanding your cash flow. Understanding the timing of your cash receipts against the timing of your disbursements.

Yoni Schmidt 31:07

Yeah. Love it. Michael. Awesome. This has been extremely informative.

Thank you for educating me, educating our investors, our listeners. You know, and, and our audience. I really appreciate your time today. Anything else you’d leave us with our listeners or me with?

Michael Barbarita 31:26

Yes. Don’t keep doing what your competition is doing.

Yoni Schmidt 31:29

Love that. Yeah. Thank you Michael.

Michael Barbarita 31:32

Appreciate it. Appreciate it. Thank you. A lot of fun. Thank you, Yoni.

Outro 31:38

Thanks for listening to The Same Day Podcast. Tune in to a new show each week and be sure to subscribe to get future episodes.