88,000 Businesses Later, He Found 11 Biomarkers for This

Sean Weisbrot: What's the hardest thing about the work you do?

Jay Aldebert: Hardest thing about the work I do is mostly be the, I'm taking somebody that doesn't know that they need me, that has a a huge ego strength, I guess, is the best way to put it, to lead a group of people. And I have to change their value system, essentially, to be able to control their own destiny. Now I know that was a lot of, you know, mixed up words. But, essentially, most people don't know they need, a business consultant. And they're open to it a little bit, but their ego kinda says, I know how to run my business. So that's the biggest difficulty is I have to change that value system, show them what they should be measuring and looking at in their business, but it gives them the capability of controlling their own destiny for sure.

Sean Weisbrot: How do you convince them that they need to work with you?

Jay Aldebert: How do it's usually shock and awe, to be honest with you. It starts with education. Like, before I can even measure something, they have to understand why I'm measuring it. I use this analogy, with clients, and it's it's kind of ridiculous. But, in in America, we go to the the the doctor, and they kinda do this physical. And then they ask you something like, hey, do you mind if I do a vitamin d test? And that's most common in, like, the Midwest where I am because it's, you know, a lot of cloudy days. And and I'm like, well, why would I get that measured? And they say, well, you get that measured because, you know, it's dark here, and and there's depression, and anxiety, and your vitamin d. Now, I usually say no because I'm a pretty happy guy. But if they would have told me what the real reason is, which essentially is all the supplementation you take in your entire life, all of, like, the macronutrients, if you have a low vitamin d, you're in a position that it actually does not penetrate, I guess, or you do not absorb. So if they would have told me, hey, all the supplements you have, they're not absorbing, I I would. So the point is, they're measuring it, but they're not educating. And for me, I have to educate a client first and foremost, on why I'm even measuring it be until they're gonna get interested. So if they're not if they don't understand interested, that's the the best hook, I guess, is the best way to put it. Long winded, but that's the best hook.

Sean Weisbrot: I found a therapist in, Portugal, a physical therapist. I was having back pain. And I went to her, and she was like, okay. What are you taking? Because she's like a holistic therapist. So she does, like, several different things combined, but she's not like an MD. But she cares about all of these things. What are you taking? What are you doing? Because they impact a lot of things that you know? So, I told her all of the vitamins and supplements I'm taking because I'm vegetarian, so I have to take more than normal people because I may not be getting all of the vitamins from a normal diet. And she's like, oh, you're taking d three, but I didn't hear you say k two. I go, what's k two? She's like, well, k two is the thing that activates your d three. And I was like, oh. She's like, yeah. So you can actually buy a d three k two combo supplement so that it just activates your d three, and so you get all of the benefits of that d pill, and it actually works for you. And it was cool because, like, she's not an MD. Her job doesn't need to be to educate me. Her job was to, like, get me out of pain. But, you know, coincidentally, she helped me to better manage my life. And I I thought that was really cool, and I appreciated that. So

Jay Aldebert: For sure.

Sean Weisbrot: so how do you actually apply that? Right. You know, you said, I do shock an eye, you know, blah blah blah. But, like, how do you actually show them that? How do you educate them?

Jay Aldebert: Okay. So the the first thing is, I kinda do a triage of, the hook I usually when I say hook, and it sounds, manipulative, but, I asked a very specific question to start off. How much profit does your business need to make this year? And a lot of people are even stunned by the question, like, you you would think that they would automatically and the most common answer they go to is, I would like to make 10%. That's what I would like to make. You know, everybody says that's that's kind of like the end all be all. And when they say that, I say, you know what, that's what you wanna make, but how much does your business have to make? And that's where the the hook starts. Because now I I say once they say, well, what do you mean? And I stand up and I go, let's make sure we're on the same page. I'm now able to actually start educating them on the five there's five dimensions of profit that a company needs to make, and they go on a scale from essentially non negotiable or crisis almost, all the way up to option. And so by educating them on that triage of profit in itself, some of them could be debt service, working capital issues, retirement, value of a company. Last but not least is just their lifestyle. And they're not combined. They're kinda in a scale of these are nonnegotiables or the floor all the way up through option. And by going through that education process, I get them thinking about profit. And I think that's one of the most under focused conversations when it comes to business. Everybody brags about, hey. I'm a $3,000,000 company or I'm a $10,000,000 company, but you don't hear people talking about the profits they make. And that's the reason they're in business.

Sean Weisbrot: Do you go through this with them when you're trying to convince them to work with you or after they've started paying?

Jay Aldebert: So the way we work with clients is we set up just an initial diagnostic phase in the first place. And that diagnostic phase actually determines whether we want them as a client. And based their problems aren't one of the reasons why. We have to see, if they have a bunch of problems, that's fine. But we have to see that they're fixable. Right? So if I don't see that the problems are fixable, and if I don't see that there's a return on investment, one of the things that we look at is, can we yield a minimum of a two to one return on investment within one year? So exaggeration, they have to spend, a million dollars with us. I'd have to see $2,000,000 of profit increases, not sales, profit increases from fixing those problems. So in terms of convincing them, we go through the process of a a two day diagnostic where they're kind of weighing us out through the education they're getting, like, these guys are really smart. They're showing me things I never looked at in my business. But I'm also looking at them to say, are they a good client? And those mechanical things are one side, but the other side is, can I coach this person? Like, is this person coachable? And do they have a sense of zeal to change behavior? And if they don't, it doesn't matter how fantastic I write up the the prescription, right? And that's what we use prescriptions. It doesn't really matter. And then last but not least, do they understand their own strengths and weaknesses? If they don't understand that, if they think they're great at sales or great at finance and they're actually terrible, we don't take them on. So that four combination, and we I actually communicated to them that, hey, you get a decision in the end, but I'm deciding long before you get to whether I'm gonna take you on as a client. So as strange as it sounds, it's now a balanced power as opposed to I'm pitching and then they're deciding. It is we're both deciding whether we're getting together, and it's a real relationship, and about one of the biggest assets in their life. So it is a relationship.

Sean Weisbrot: Are you charging for this today, or is this something, like, you you used to loss, as a leader?

Jay Aldebert: The the marketing yeah. No. It it it it's a bit of a loss there, I would say. The marketing structure is is this. We're gonna come in and do a diagnostic of your business. The entry level fee is $1,300 for two days, but we actually put it as subjectively, if you don't see benefit or value from the process, you don't pay. Like, you could just say I don't like your tie, and they're not gonna compensate. We'll still give them the full analysis at that point. So but that's, so the payment is zero if they don't get any benefit value, or just that process itself could be $1,300.

Sean Weisbrot: Why such a low price? I feel like for two full days of time for the some the company sizes you're working with that you should be charging, like, 10 or $20 for the two days.

Jay Aldebert: I think it goes back to the initial statement I I said. People don't know they need us. Like like, I I hate to say that it's a sales process. It is a sales process. It's I call it transfer of energy. These people don't know they need us, but every business I walk into does and at a at an extensive level. And saying that upfront to them really probably wouldn't work. So we kinda have to show them how much they need us through that education process of the diagnostic.

Sean Weisbrot: Sounds like a huge loss leader because it I'm I'm sure the time for that one person to spend in that business, you know, two days, they could be selling a 100 other companies in that in those two days.

Jay Aldebert: Yeah. Our our landed cost is probably 4 three to four x, to that. And when I say landed cost, when we go to when a consultant goes in, you know, in terms of that engagement, we've decided to work with them, they've decided to work with us. Our investment is is already about four x, you know, in terms of all that process for sure.

Sean Weisbrot: And so how do you determine how to charge them once they start to work with you?

Jay Aldebert: Good question. In terms of, I can look at a specific just an we we use medical analogies a lot. But just like, hey. I've got this ailment. A medical doctor can say, this is the procedure that it's going to take to mitigate that that situation. So it's the same with us. If I see this in a specific industry, I can now say that's gonna take this many hours to design, implement, educate. And that's what we do. We do the design. We don't leave it to the business owners. No disrespect to them. We're just not gonna let them implement it because we're the ones held accountable for that two to one return I I mentioned. And then we have to educate their staff as well as them. So once I look at the grouping of problems that we're looking at, I can look at the number of hours we're going to take. And our our agreements with clients are based on any day that you don't determine that we've actually done our job, you can end the engagement. So it's kind of a day to day process. They have to invite us back Friday for Monday, and we work on a day by day basis. But we do it on a project basis. It's not intermittently. I call that sand castle consulting, I guess, is the best way to put it, where you build a great wall of a sand castle and then you go away for two days. Well, is it gonna last, you know, especially beside the ocean? We do a project. It's four to six, eight weeks, somewhere along there. But the client can end the project at any point if they believe they're not getting benefit or value.

Sean Weisbrot: It feels very volatile for the business, for you.

Jay Aldebert: In terms of oh.

Sean Weisbrot: For for your business, meaning you you put all this energy into the relationship and helping them, but they could just stop at any moment.

Jay Aldebert: They can. They can. And and, I've likened, and again, not disparaging, but the behavior itself is very similar. There's a lot of behavior modification in consulting. I would love it if it was a robot and I could just program a chip and, you know, put it into their chest and they would operate this way. But a lot of it is behavioral change, and we make sure that that's clear and concise, we don't hide it. And so it is from a volatile standpoint of they can end on any given business day, but our job is to show them each and every time the progression they're making, so it almost becomes addictive. And we know that twenty one days to change a habit. I look at our business owners like, addicts to their own behavior, and and not being disparaging, but they are. And so I have to change that, and our our consultants are chain are trained to change that, that addiction and handle it as an addiction to get them to the point where, they actually change, but with the intention good intentions. And that's to control their own destiny. And what that really means is that, you know, they're making a profit. The company is strong. They're funding their retirement, and, obviously, building a purpose driven machine that will continue to, develop and then, obviously, beyond them, maintain their legacy for sure.

Sean Weisbrot: So do these engagements go longer than eight weeks, or at eight weeks, it's just done?

Jay Aldebert: Sometimes. Sometimes. There's an internal belt system, I guess, is the best way to put it. It's not a one and done a lot of times. And when I say, we would love it to be, but, I don't know how many diets you've been on in your entire life, but I've been I've been three three hundred pounds and I've been two hundred and twenty pounds, you know, in my adult life.

Sean Weisbrot: Too many.

Jay Aldebert: And so, it's kinda the same thing as is that there is ongoing projects with a client to maintain those those habits, I guess is the best way to put it. And it can be in different intervals. It can be two years. So So we'd rather we'd rather put the project in in that eight weeks, and then circle back in a year. Hey. Are you still are you still on the diet? Are you still doing all the calisthenics sort of thing? And we may have to pick it up from, you know, 75% of the acumen we've or or habits we've changed. We might have to pick it up at all these different intervals, recalibrate that, supplement it again, and then go on to maybe the next level of of business acumen.

Sean Weisbrot: So you're saying that your guiding post is two x profit return in a year. What is a typical client's respond result actually look like?

Jay Aldebert: Correct. So I'm sure you understand that because we're held to that standard and and there's there's some caveats, like, they have to complete a whole project. In other words, they have to take all the medicine. If they, you know, stop halfway through, then that assurance doesn't, hold true. But they have to complete the whole project, and the only participation after that really on their part is we want to see the dashboard. Right? And they have to show us the dashboard that we've created for them, and they have to discuss it with us, for, at intervals of of of, let's say, every four weeks, for a year. So as long as they do all of that, what we found upfront is I can quantify mismanagement on any company. And when I say typically I can quantify it, I can go in, look at all of the different areas in their business and quantify not only that that problem exists or there's a weak area in their company, but the other part is I can actually, determine, how much that's costing them very specifically. So once I've quantified all those dollars, and then I quantify all the fixes, it's pretty easy for me to see that minimum of two to one return on investment. And, of course, because of margin of error, like I said, they're not robots, we're typically looking for a three to one with the assurance of a two to one.

Sean Weisbrot: So you can, at any interval, go back into their business, look at the dashboard and go, I can see that you guys haven't been doing exactly what you said you were gonna be doing. And as a result, I see that you've lost out on 10% of your profit potential based on, you know, slacking off on this one metric.

Jay Aldebert: Absolutely. And moreover, we we we're not just like the one time. Right? We're not just like, hey. You messed up one time. It's a three strike, you're out kinda thing. Like, warning, hey. Look at they're not doing this. See the effect. And then we go back and we go, hey, warning. You know? And then the third time, no. It's three strikes. And then essentially, we say, fix it or we're out. And that's that's pretty much where we are. And again, if it is the way the the the two to one assurance works is if they're doing all the things we're supposed to do and and we can't identify something, overall, we're going to extend our resources. We're gonna send people back at no charge until we actually meet that. So that's what the assurance is. A guarantee kinda says, well, I'm gonna try all this stuff, and if I drive your company into the ground even further, I'll just give you your money back. That's a guarantee. The way the assurance works is we sit down and go, okay. We're gonna monitor you for a month, and we're gonna exhaust all our resources until we've achieved whatever's happened. So we could be in a position where we put forth a lot of money, beyond even what they paid us for the project to get them to the point that we assured them. It's never happened, but, we we pretty much mathematically know what we're doing. But that's kinda how the relationship works. So it's they do have some protection on their side, and we have some protection on our side.

Sean Weisbrot: So you go into this dashboard and you manually look, or do you have automation set up so that if something starts to become a problem, the dashboard notifies your company so that you can go and intervene before it becomes a problem?

Jay Aldebert: So the answer is we have the availability of both, but, honestly, most commonly used, probably 75% is more of the manual side. And the reason why is, when you look at just the utilization of, accounting software, you know, everybody probably has it, but, like, proper use of it, accurate, reconciled, all those different things, within that automation of accounting, it's, we see that, like, 90% of the businesses we deal with, and they're they're $2,000,000 to a $100,000,000, but it doesn't matter, like, the size or volume. It's not accurate and so on and so forth. So to automate that and take garbage, you know, it's gonna give us a garbage dashboard. So we have other KPIs or other polls that we look at that are all manual. But there are some that we do the automated look at it, because they're more familiar and comfortable. That transition right now from baby boomers to, you know, obviously, their, the generation, why and and millennials that are taking over those businesses, obviously, is a big difference in the tech savvy. Right now, 75% or more, of all businesses are owned by baby boomers that are not high-tech, but they are transitioning over to the high-tech. So you're gonna see us migrate far, you know, far more over to that automation.

Sean Weisbrot: So you were saying that the automation is generating garbage data. Why is that?

Jay Aldebert: The the, like I said, just to give you some sheer numbers, our firm will engage and do that diagnostic phase I was telling you about? 11,000 times this year. Right? That's 11,000. We're gonna look at 11,000 sets of financials in in that size. All trades, all industries, all sectors, as long as they're privately held. And the issue is, in most cases, business owners don't value accounting. Right? They don't value it. And the reason they a lot of them, that is, is because accounting is such a lagging indicator that even if you don't have a lot of business acumen, you're realizing I can't make decisions off of it. So because they can't make decisions off it and they only see it as a prerequisite or a requirement of the IRS to be able to show how much they pay taxes, They're kinda cavalier about really reconciling it and making sure it's accurate, because it doesn't do anything from a management standpoint. And so in that, that's where we kinda get the garbage. So we almost have to build better ways to measure, specifically proactively, with leading indicators. We have to build something in them that's almost customized, to be able to pull the information we have. If it was pure automation, there's always the sense that if they take the same approach that they do to that accounting, that we're gonna be looking at wrong numbers. We're gonna be looking and reacting to wrong numbers, and we don't wanna do that. And that's what I mean by garbage in, garbage out.

Sean Weisbrot: I was gonna say because I've I've done a lot of automating for the work that I do, and I noticed that sometimes the automations break. And you don't want your automations to break. So I thought the issues you were referring to is this is sometimes the automations just do another job. But if the data input is bad, then that's that's obviously really bad. And it's it's good that you recognize that because I think a lot of people don't

Jay Aldebert: No.

Sean Weisbrot: recognize that sometimes the data can be bad. It can be not clean, if you're dealing with data processing, things like that. Yeah. So it it's in a very important skill to to be able to reconcile.

Jay Aldebert: Well, yeah, we we have to be able to because reaction like, it it is like reading a a blood panel or an MRI in a in a business. That's really what we're doing. And if we're if it's if it's contaminated in some way, then we're gonna react and and, again, allocate resources on on half information. So we don't rely on accounting alone. We look at different aspects like bank reconciliation. We look at different aspects in terms of, the the accounts they have with different vendors and all that kind of stuff. And it gives us a real understanding, specifically of cash flow, That and that's what we tend to use.

Sean Weisbrot: Do you have a system that automates collating all of that information to generate reports for you? Or, like, how do you manage because it's, like, 11,000 companies in a year. It's, like, a headache for any business.

Jay Aldebert: Yeah. So myself, I've been with the company for twenty five years, and we've had different internal programs that we've looked at how to reconcile all that information. But it it was always still looking at lagging information, and it did comparisons, like, it would be similar to, like, an FP and A software of some sort, where it takes and creates all these derivative equations off historical information, and that's what we have. And so I've gone through 88,000 businesses in my career, and growing. Right? And I get to look at four years of financials, and I started building this own algorithm in my head. And I started seeing the same things happen over and over and over again. And so with that, about seven years ago, I developed, a software called RTO, the return to owner, that does reconcile that information, and it it diagnoses at the same time. And I broke business down to 11 separate biomarkers. And those biomarkers themselves really, put the client in a position that, instead of estimations or guesstimations or assumptions, like, let's just say when I was three hundred pounds, I had a big gut. So I probably have a bad back. You know, those assumptions where you can kinda look and say, instead of doing that, I can actually pinpoint the exact performance that company has to have that particular year to either maintain health or even get back to a state of health. And sometimes that is not even close to what they they, even desired for the year. Sometimes they've made decisions up to this point when we walk in the door that actually demand the business perform at a much different level or even existence than they they've ever thought, only just to get it back to a state of health. So RTO itself is the software we use as a not only measurement of all those biomarkers, but a decision structure that also shows the cascade effect of ignoring any one of those biomarkers. It'll show you you missed this one, here is the effect, three different directions based off of that. And so the ability to see that at all times is the use of that for reconciliation.

Sean Weisbrot: What's the most important thing you've learned in the course of your career, especially among using the software with businesses?

Jay Aldebert: The biggest thing I've learned, that it's it's not even gonna be related to the software, is how important the work like, if you serve small, medium sized businesses, right, sometimes people don't understand how big, like, your work is. And when I say that, is people are saying, where are you going philosophically with this? It when I go into meet with a client, when one of my employees, and we have a thousand of them, goes in to meet with a client, is, like, you have to be quote unquote on. And people think when you say on, it's let's get revenue. Let you gotta make that sale, you know, sort of thing. That's that that hustle gonna be on. No. What you have to do is take somebody that absolutely needs us, doesn't know they need us, and we have to be on from the standpoint of being able to, gain their trust accurately, gain, rapport with them, and educate them to make a good decision. Because here's the impact, and this is the biggest thing I've learned. You own a business, Sean, let's say I walk in and I'm talking to you. Right? Some people think that our our communication, our our transaction, our transition that we have is only affecting you. It's not. It's your household. But let's go one step further. You have 10 employees. It's their households. So how strong I help you or how how fundamentally I change you controlling your own destiny, it has a big impact on, like, 40 people, not just you, plus your vendors if we go one step further. If there are small businesses that depend on you having worked. So that's the biggest thing I learned is how profound just changing the profit position of a client can be, and how many people it affects in any size company at any given time. That's the biggest thing I've learned.