Zero Cash, Endless Profits
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Welcome to the I Am Charles Schwartz Show. In this episode, we're plunging headfirst into the turbulent waters of business turnaround with Grayson Cross, the financial firefighter who's made a career out of rescuing sinking ships. With a track record of transforming cash hemorrhaging companies into profit powerhouses, Grayson has become the go-to guy for businesses on the brink.

from his teenage days of hustling car detailing gigs on Facebook to scaling multi-million dollar brands. Grayson's journey is a masterclass in entrepreneurial evolution. He's navigated the treacherous seas of e-commerce, digital marketing, and financial strategy, emerging as a beacon of hope for struggling businesses everywhere. In this no-holds-barred conversation, Grayson rips apart conventional business wisdom and reassembles it into a blueprint for 21st century success.

He reveals how transparency and long-term thinking can turn adversarial supplier relationships into powerful partnerships and why your most loyal customers might just be your secret weapon for funding growth.

You'll uncover Grayson's super fan strategy that's helped launch products without a dime of outside investment. He also lifts the veil on his cash flow optimization techniques that can extend your payment terms to 90 days or more, giving you the breathing room to sell before you spend. Grayson's approach is direct, innovative, and grounded in real-world results. He's not here to peddle get-rich-quick schemes, but to arm you with the strategies and mindset

Welcome to the I Am Charles Schwartz Show, where we don't just discuss success, but

We show you how to create it. On every episode, we uncover the strategies and tactics that turn everyday entrepreneurs into unstoppable powerhouses in their businesses and their lives. Whether your goal is to transform your life or hit that elusive seven, eight, or nine figure mark, we've got the blueprint to get you there.

The show starts now. All right, welcome back to the show. I am ecstatic for this one. This one's huge. It's going to talk about profits and how to raise money and how to have money when you don't have money, how to make money. I'm excited about this one. Let's get directly into it, man. Thank you so much for being on the show. I appreciate it. Thank you, Charles. I'm really excited to be here. Really, really excited. So walk me through this, a little bit of your story. A lot of people have no idea who you are, and we're making some big claims on this one. Tell me the story, where you're from, what have you done?

Well, that's a big one. I'd start with saying I don't think most of us don't actually know who we are quite yet. Man, a lot, dude, a lot. I'll give you like the 90 second Tinder version because that's probably easier. Okay. But, you know, I grew up in the middle of nowhere, Coeur d'Alene, Idaho, which is like the nowhere, nowhere.

I got into digital marketing when I was 14 or 15 years old. I mowed lawns until I could afford a bouncy castle. You remember those bouncy castles? I remember the bouncy castles. They were fun. That was my first business. I was renting out bouncy castles when I was 15 years old. I got one off Craigslist for 200 bucks. I found how powerful it was to start doing advertising for that on Facebook. Back on the day, it was MySpace. It was the go-to.

I was just so surprised with like, I was like, wow, I just bought this yesterday. And I have, I'm booked through the entire summer by just joining all of these Facebook groups and posting about it. Right. And obviously I was 15. So I wasn't like licensed or bought or paying taxes or anything.

And I blew every single dollar. I was buying pizza for all of my friends. It was the coolest thing ever. But that kind of got me on the bug or the tick for digital marketing stuff. And from there, it moved to the early dropshipping, the print-on-demand for t-shirts, and really, really got me into it. I feel like... You and I talked a little bit about this off the show, but...

Looking back, I feel like I was just super lucky. It was a lot of like, I happened to be in the right place and happened to talk to the right person just because it connected me. So from there, I actually met one of my first mentors. His name is Steve. He's an amazing, amazing man. And he showed me how to take one of the oldest businesses ever, like gyms, and then turn it into a digital product.

So with him, I'm now partial owner in one of the largest, the largest actual renting company of gym equipment in the entire world. If you go to a hotel, you go to Job Corps, that gym inside of that hotel is actually being rented. And there's a pretty large chance that it's being rented from me. But it was 100% commoditized as a service like Netflix, right? Yeah.

Um, from there I was super, again, super, super lucky. I got connected with, uh, one of the largest, uh, firearms, firearm companies in the world or firearm accessory companies. And I ran all of their Facebook ads back in the day when you could run Facebook ads for whatever before, you know, the restrictions came in. Um,

And that's really what got me in there. In my door for the digital marketing, I helped grow that into the largest firearms accessory in the world. And then I got into the agency space. And agency space was where I feel like I got, again, I was like, oh my gosh, you can just go work with any company you want. If you want to go work on this business, you can. If you can just make your proposition good enough and you can deliver the work.

So I was very lucky to work under Taylor Holliday at Common Thread Collective. That's where I got my experience working with like the Procter & Gamble brands, the Native deodorants. I did some small work on Liquid Death. A lot of that's where you see like the igloos, the brands that I really, really feel like it was an honor just to work with, to be able to see how does a billion dollar company actually

actually function. How does the inside? And what I found is there's like a lot of politics, which I'm not a fan of, not as far as like left and right politics. I mean, like company politics, which is just insane. And I, cause I thought it was, the goal was just to make money, but it turns out

Not always the goal. And then from there, I found out like, wow, I really, really enjoyed making other people millions of dollars, but I wanted to do it myself. Right. So that's where I met my current business partner, Tommy Patterson. And we've been building this engine over the last three, five years called Weekend Digital and Weekend Investments. And what we do with this is we go buy brands, we acquire strategically, acquire a minority stake of brands, grow them, and then

and then sell them. We work with the founder to sell that brand. Usually we go to a company and says, hey, you can't afford the services that we would do. We charge $50,000 to $70,000 a month. However, what we can do is work strategically with you to lower that to basically nothing. And then we're all in this together for the long-term exit. Because the biggest problem, in my opinion, with agencies is that they're there to get paid immediately working about their overhead.

versus the, you know, I would call it a strategic growth partner, which says, hey, we're going to forego this immediate payment that we're all going to work together for the three to five year goal of getting towards the big sell off. Right.

So that's what I'm working on right now. I've got about seven brands. We're trying to get to 20 by the end of next year. Had some exits going really well. And really the last three years have been building the team, which is a lot harder than you would think because you basically have to give them an uncapped commission because they're now compensated on the success of their asset. And that has been the hardest struggle so far is building a team around it.

But hey, that's like the 92nd version. Yeah, that's the, as you said, the Tinder view. There's a bunch of stuff there that I want to get into. Most entrepreneurs won't talk about luck. And it's something that you and I have discussed a bazillion times at this point off camera. Yeah. That how important and how lucky you have to be. You could be the most skilled, talented grinder on the planet, but a lot of that's luck.

In this situation, because you've been very lucky, I've been very lucky or blessed because for me, those are interchangeable. What are the things that if you're an entrepreneur, if you're trying to scale and you're in that environment, what are the things you can do to increase your luck? What are the things you've done to help out in that environment in your experience? Wow. There's this one saying, which I hear is like, the harder you work, the luckier you get. And then there's another one that says, if nine out of 10 business fails, that means you have to do 10 businesses, right? Yeah.

I think the biggest thing is to be extroverted. I think that you'll hear that from everybody. Every single opportunity that I've been so lucky to get in my life has started from just talking to somebody, whether it be at a hotel bar, whether it be at an event, whether it be a friend of a friend, whether it be liking someone's post on Instagram and commenting on it.

It genuinely starts from a point of genuine interest, not like the fake sales pitch. I'm sure we're all really familiar with the lead, the networking. I hate networking, so it's such bullshit. But actually seeing something that you're interested in and connecting with that individual. Just talk to as many people as you can that you have a genuine interest in what they're doing. Because fundamentally,

Fakeness is so... I feel like the bigger of an entrepreneur you become in the sense of not just income but in assets, you're able to detect fake people very, very, very quickly. And my radar goes insane now. But you can also really say, wow, this person really is interested in this thing that I'm actually doing. Yeah.

And that's like one of the most exciting things is when you find someone who you're really, really passionate about something, someone else comes along and says, oh my God, I love that. I'm so into that. How can I help? And it's just amazing. So that's what I'd say is be a servant and talk to as many people as you can. I also think having a shared mission is something that I would make sure that we have. We talked about this.

you know, how we connected and how the connection went from, Hey, I want to be on the podcast to this other idea, this much higher mission environment was we have, we have very similar missions. We have very, the parts of our core are very, very similar. And if you're like, Oh, well, you're lucky you cut, you came across and you guys connected. And there's also a similar mission here. So making sure you get that clarity on your mission is huge. And for a lot of people right now, their mission is just trying to pay the bills. We're heading towards an economic collapse. We know that it doesn't matter who becomes president.

We're in August right now. So we'll see who, you know, end up becoming the president of the United States right now. We don't know. It could be Big Bird. We have no idea. But in the dynamic that we have, we know that there's going to be a recession no matter who takes office. We know that we're having a pullback because that's the economy. It breathes in, it breathes out. We have this ebb and flow.

With where they're going right now, you've done something a lot of people haven't been able to do, which is like, hey, you can generate, you can have inventory, you can have this without allocating funds externally, where you can have all this stuff that's ready to rock and roll. And for most business owners, that's terrifying. They're like, no, I need to buy all this stuff. I need to have all this inventory. I need to do all this before I can market it, before I can do this. So their entire fulfillment process from acquisition to finally fulfilling the product is terrifying for them because they're outlaying so much.

One of the things that you wanted to talk about was there's a way to do that effectively and tactically without needing to do that. So walk me through that. Oh my gosh. Yeah, there's a lot of ways of doing this. I think it kind of comes back to this new model is I can't tell you, Charles, like how many businesses I go into that are already doing like five to six million dollars a month in revenue. And

They're failing miserably. And I'm like, how is this even happening? I used to believe there was a saying that there's no such thing as a bad operator. It's just a bad business. Now I feel the complete opposite. There's no such thing as a bad business. There's a bad operator. People make money off of selling garbage, literally selling garbage. And there's always a way of doing it. So yeah, that's definitely what I wanted to go over today. All right.

So I call this the unlimited inventory zero investment. But what it really is, is it's just time, right? When we look at most, there's two business owners here. Here's the one that's already existing. Then this applies to you. This is the person that's doing between above $1 of revenue. Let's just call it that. And then there's everyone who's doing less than $1 of revenue, right? This works for pretty much everyone there.

What I'm going to be talking about is how this applies not just to inventory. This applies to cash flow in general. So what we're looking at here, you're going to see three tiers and that tier is going to be inventory ads and then everything else. Inventory is usually the number one expense for an e-commerce business, right? You're buying product, you're selling product, and then immediately after that is usually advertising. And then after that is everything else. When I talked to inventory, I thought that there were a set of rules that just have to be.

Um, not true. I would say not true at all. As I've gotten more and more experience over the last, like, you know, five, 10 years is that every single thing in life is negotiable. Everything.

A credit card bill is negotiable. Everything is negotiable. Medical bills are negotiable. It's insane. And the more human element there is, the more connection there is between this is the moment that there becomes way more, way more room for negotiation. But also it's always about aligning incentives, especially when it comes to a manufacturer, right?

I'm going to add two asterisks here. So we're going to start with inventory, and as we start talking about inventory specifically, I want to say that this will apply very easily to uncustomized products. So if you have a business that sells yoga mats, let's talk about this. Because let's say what we're going to talk about is how you can get 240-day net terms for your business that sells yoga mats. Mm-hmm.

For your supplier, if you screw them over and then you don't pay your bill and they've got all these yoga mats with your logo on it, they can take the logo off and put somebody else on. Right.

you're making a one of one custom product that nowhere exists, nowhere besides with you, you're going to have a lot less negotiation room unless you've been doing business with this person, you know, five plus years because all the parts they're getting are usually custom manufactured unless there's specific stuff like that. But think about it that the less customized your product is, the more room for negotiation you have. Um, and the biggest piece of this comes from negotiating directly with the supplier, which we're going to talk about in a sec. Uh,

The next is advertising platforms and then everything else, which is going to talk about credit cards, which you can legitimately get net 60 on anything tomorrow, like which will change your business. Net 60 is like if you're spending $20,000 a month on credit cards right now. Now, all of a sudden, for the next 60 days, you just injected 20 grand back into the business, which is easy for most businesses.

So what you're going to be seeing right now is a scale of low risk to high risk. Very top, we have suppliers. It's going to be the inventory. Very bottom, we've got revenue-based financing. I want you to think as the lower the risk, usually that means there's going to be less fees.

it's going to be much easier to get and lower interest. Just imagine that in general. Once you get to the high risk stuff, I'm going to draw a line here in a second that's going to be the don't do this unless you absolutely have to because they basically own your business. And that's going to probably start around PO financing, maybe inventory financing above that. That's where it becomes very risky because if a bank is giving you a loan on, let's say, your inventory,

They don't want to sell your stuff, right? You're going to get maybe 40 cents, 50 cents on the dollar if you're lucky for an inventory finance. So as we go through this, it'll make more and more sense. So let's look at suppliers. When we go to this next thing, you're going to see a grid of four different areas, starting with the negotiating with suppliers. This is the most important part, negotiating with your suppliers. I want to give this in the philosophy standpoint.

Your supplier, they want you to order more. If you, you know, Charles, let's say you're my supplier, right? You're selling me yoga mats, right? You want me to buy as many as I physically can. You just want to make as much money on that, right? So when I look at this and I say, well, how have the most successful negotiations went? I would go with this. This is the first one open.

Hey, Charles, this is my business. Here's my P&L. This is what I'm doing. Again, you're my supplier. I'm showing a huge amount of trust and openness by giving you an actual P&L to my business. This is how I'm doing.

I'm doing good. My problem is, is my cash conversion cycle, which is just the churn of inventory. I have to wait 90 days after I pay you to sell my product for me to go buy more product. What I want to figure out, Charles, is how do I make it so I can sell the product you're giving to me faster so I can buy more of your product so we all win, so I can scale my business and I can order more.

And when you frame it in this way, again, back to aligning incentives, it's very difficult for you to lose in this way because you're winning and your supplier's winning. Now, I think one of the things that happens with people when they try to negotiate and they try and go back and forth in this environment is they're always thinking about themselves. They're always putting them in an environment where they're like, Hey, I've got this problem. This is me. I'm going to go browbeat or I'm going to go really get intense against whoever my opponent is. One of the things I teach when we talk about persuasion all the time is, okay,

If you're across the table from someone, you're now created a battle. That physical distance between them, you create a battle. So hand them the piece of paper and say, hey, wait, did they give you the right one? Swing over to the side, sit next to them. And now you're looking at it side to side. So now you're not against each other. Get rid of the pronouns. And we're not going to get too much into pronouns, but try not to use you in this environment or I.

Yeah. Try to use the plurals. We, them, us. Us. Because that way you're unifying together to try and get to a goal. So when we're talking about negotiation and we're trying to talk about negotiation on everything, as you were saying, everything's negotiable from your bills to your medical bills, to your inventory, to relationships with clients, to building your team. You need to understand that when you're doing this, you have to build rapport and build connection. And what you just said there was like, listen, I want to buy more of your stock.

which means you put their need, their highest pain point on the highest level. They want to have more stuff bought. You're like, I need to buy more of your stuff. I can't buy more of your stuff because you have me on a net, whatever it is. Are you getting, can we adjust this a little bit so I can buy more? And by being authentic and showing your PNLs for profit loss people, for those who aren't paying attention, showing your profit loss statements in there, put it in there so we can sit there and show people, hey, this is what's actually going on. Now they feel like, oh wait, this isn't just a customer.

Now you're starting to build a relationship that's going to lead to a partnership so you can do these environments. Because again, the credit card where you're not doing anything for 60 days on your net 60, mazel, really easy idea. But getting to the point where you can build these relationships, this is what we talked about in the beginning. This is how you're building your luck by building these things. Because for me, relationships are a huge part of getting lucky.

I agree. Everything you just said is spot... I cannot agree with it more. It is a us versus the goal. And the moment that your supplier is now part of your team versus this is something... Because most people... When I open this, when we talk about suppliers, they're like, oh, I just got to go find one who give it to me cheaper. I'm like, oh, no. You need...

Believe it or not, raw material costs basically the same for everyone. And if you're working with someone, there's a chance that you can make this work for them. And I think that the best way is starting, as you said, with aligning the goal of what the goal is, but also immediately offering it up and saying, listen, I understand it's a risk for you to give me a net 30. Most of the time, if you're brand new to this business and you're ordering, they say, I want 100% of it before I even start manufacturing. Before I even start making this, I want 100% of it.

And it comes in tiers, right? It starts with this, hey, let's figure out how I'll pay 50% of it right now. And you can start making it. And I'll pay 50% of it when it gets to the dock, right? Which now all of a sudden, your total inventory is only 30 days. It usually takes 30 days from the dock, you know, to the port to the ports. Very, very easy. And we're going to get to something about the ports in a second, which is going to be amazing. It's going to change your life for everyone, including like just most people don't even know about this. But

And it comes in tiers. It goes from there. It's like, okay, well, we've been working together. I want to help even more. Charge me an extra point or two. Give me an extra 2%. And let's say I'll pay for 50% of it when it's at the dock and 50% of it when it gets into the States and gets to my 3PL. And you can start moving this and moving this. And it is not unrealistic within two, maybe three at the max within two years of, again, you have to actually live up to your word. This is the most peaceful piece here. If you screw anyone over, that relationship is lost and they will never trust you.

But give them a couple extra points and you can get to net 90 from the moment it gets in the ports in the US and say, once it hits the ports, I need 90 days to pay it because now I'm selling it and I'm selling what I'm selling to buy more inventory from you. And it's a very, very beautiful relationship.

And the moment that you can even give them access to your Shopify store, analytics access, and they see what's happening. I've had a relationship with a factory where I said, hey, what if we just had a relationship where you see my 3PL, you see my Shopify store, you see what is selling, and you start creating POs immediately based off of that. And it was an amazing relationship and helped a lot. Yeah.

Well, you're building an actual relationship based off transparency. And most people don't do that. They're browbeating going, hey, you know, this company can sell me yoga mats at $3. You're selling me at $3.15. If you want to keep my business, you have to sell it to me for $2.99. You've killed that relationship now. They're not going to work with you. They're not going to have that because you're not building a relationship. You're browbeating them.

I do this when I talk about investment strategies for properties that I own. I will always pay more than anyone else to the management company. And I tell them that. It's kind of like the Game of Thrones idea where Tywin always says, if someone pays you more, I'll double it. I've always done that with my management companies and my properties. I'm like, I don't care who it is. I will always pay more on management fees compared to anyone else. But there's two conditions. One, I never get a phone call.

Just fix it. Just fix it. I don't want to deal with it. And I have to have the happiest people. So you have to reply to my tenants instantaneously. If you do those two things, I have no problems paying you a certain percentage over. And because of that, the people that I work with are like, oh yeah, you're our favorite person. I'm like, cool, just fix it. And there's a dedicated, just go. I don't want to deal with it because that is building a relationship that's, hey, they have this painful.

I'm being the Advil, the Tylenol or the whatever it is for that pain point for them. I'm not adding more to them. And I'm saying this is a non-branded ibuprofen, right? Exactly. Whatever the target. Going in and building that rapport and

And people never go into, and there's a reason you can do what you do. Because again, this is how you've learned. This is what your mentors and what you've learned with experience. You're building these relationships. And if you don't understand that it's relationship building, that's like chat GPT isn't just type in there and chat. You have to have that back and forth. Same thing in this environment. You have to have that back and forth. You have to build a relationship. I totally agree with you, man. I love it. Awesome.

Awesome. Next. Okay. So next two things. So I'll wrap this one up pretty quick, but the next big piece is faster inventory turns. I cannot tell you how many times I give a business owner, because I work directly with the business owner, right? We come in for a minority stake. I say, we're going to turn this business around. We're going to get it to this and we're going to sell it. And I say, here's your homework. Go negotiate with this, with the supplier. And they come back and said, Hey, I got net 30. I'm like, that's great. And then they're like, I only had ordered three times the amount of inventory. I'm like, not great. Right. Not great. Not great. I'm great. Um,

The faster you turn your inventory, the faster that items on the shelf turn into cash. They get to be reinvested back in the company.

Very rarely do I actually see a business that doesn't work. It's just all of the little things. It's death by a thousand cuts of, oh, it's 1% here. Oh, and we're letting this in on the shelf and we're losing $10,000 a month to storage fees. There's all kinds of things that really just eat you, which actually brings me to the last thing here, which is called portless. Now...

Have you heard of Portless Charles? Because this is kind of new. That's new, yeah. That one's a new one to me. This is insane. All right. We know Timu, right? The Chinese garbage that is two cents on the dollar that gets sent to America, which is actually- We just trashed Timu. Yes. I know. No, I agree with you 100%. It's the worst, man. Yeah, it's horrible. I get it. I got the product the first time last year. And from a digital marketing standpoint, I'm like,

How are they doing this? How am I buying something from China and it's getting to my door in six days? Yes. Like this doesn't make any sense. So at first I'm like, okay, they have to have just three PLs in America, right? That's the only way.

So I started looking at the packages that I'm getting and the return labels and the tracking on them is from China. And I'm like, how are they doing this? Now, at the time of this recording, what is it? August 22, 2024. This is the, in my opinion, the biggest tax loophole in the entire world. And I can't be super specific on it, but it's along the lines of the value is less than $800. You can ship it directly to your customer internationally without having to pay any import or VAC taxes, which is...

Insane. Okay. Now combine this with light goods. If you look at Timo, you'll notice that pretty much everything is very lightweight that you're that's on there. You can actually portless is some very, very intelligent people who discovered who worked, saw this model and said, Oh my God, we could privatize this and commoditize it for e-commerce. So this is talking towards the smaller business here. This is the, this isn't your business already working super well. You're doing over, let's say $500,000 a month.

Um, you can go to your supplier and you can work with this company called portless and you can ship from China with six days, six days to your customer, which allows you to order MOQ, which is minimum order quantity. Um,

versus a container size. Because usually when you're doing a shipping, when you're shipping inventory, you're filling up a container at a time. So it's usually much larger than the MOQ. So what's amazing about this is now all of a sudden, oh my gosh, I can just, I don't even need to ship it to the US. I don't even need a 3PL. I can ship it directly from my manufacturer to the customer and cut out everything.

Now, again, caveats, it's a little bit more expensive, 20 to 30% more for the shipping, which is fine. But it also, if you have a business that's working really well, set this up because now all of a sudden, let's say you're running a sale, you run out of inventory, you got 30 days until it gets across the ocean. Now, all of a sudden you go from 30 days to six days, which is a big difference. Even if you're only paying 20% extra, you know, it's worth the 20% extra in that environment. A hundred percent. It's insane. All day long. Yeah.

So that from the high level, that's the inventory side of it. Everything right there, you can, will change your business immediately. I do this in the order of what is the highest impact, right? Inventory, number one thing, go negotiate, go make it happen. Because just the uncomfortable conversations, this is, you know, my dad used to say this, you can judge the success of an upcoming business owner based on how many uncomfortable conversations they're willing to have.

And this is always going to be an uncomfortable conversation until you make it one. And it doesn't have to be hard. It says, hey, I want to work with you. I love working with you. You even gave the example, Charles, there's this other yoga mat company that sells on me for $3. You're charging me $3.15. I would love to keep paying you $3.15. Can we get net 30? Does that work for you? Right? Because I want to keep using you. You do everything. My boxes arrive on time. But

This is what my fine and make somebody else the bad guy. My finance team is telling me this, this is what I got to do, but I love our relationship. How do we keep it working? And I think that right there, you hit on something that most people, especially business owners mess up with, which is, okay, they're going to charge me three 15 or you're I'm paying three 15. You're I can, you know, they're going to charge me three bucks, three bucks instead of three 15, save me that 15 cents. What are the other things? What are the other soft costs? What are the soft benefits that you're getting where they show up on time? They fulfill on time, never great relationship with you, their return policy.

That 15 cents might not be worth it with the other stuff you're losing. There's so many people who only focus on cost per item that they're running into that you're like, no, there's an entire dynamic here. There's an entire different relationship. I run into this with people who are getting environments where they want to no longer be with their spouse because they want to go look at what's on the other side. And I'm like, there's a cost for that.

I get it. You want to go play with it higher than you think, but there's a cost for this. You know, you're, you're losing the trust and the relationship and the connection and all of these things that you've built up. There's a cost, same thing in business. Yeah. You might be able to save that 15 cents, but at the end of the day, what is it costing you? And being able to really get into that is something that most business owners who aren't mature enough or aren't experienced enough are just going to go, Oh, it's cheaper. I'm going to go do that.

There's a wall of other things that you're offsetting to that. Yeah, it might be cheaper, but they can deliver better and they can get into those environments. So as you're trying to scale this, and yes, you can get profits for, and you can get net terms and all this differently. Understand there's always a cost. Every action has a cost, be it good or be it bad. Just understand there is a cost and you have to be willing to pay it. This is what it is.

I love that. You're so spot on. Think about it. One, you're paying a customer service agent seven bucks an hour. Think about that one problem that takes them 30 minutes. Let's say two problems. You just lost $7, $7 of margin. If you like, and that adds up fast, it adds up very, very fast. And then that customer will never buy from you again. So now you've got an LTV problem. And then, you know, we talk about with this Amazon where, you know, Bezos always talked about being obsessed with the, the customers.

where he says in his return policy, at least as a business owner with Amazon, there's never been a negotiation. I'm like, this doesn't work. I don't like it. Whatever, return it. In over a decade of doing this, they don't care. They're like, whatever.

That makes it so that instead of me walking across the street to Target to buy it, I'm just going to buy it straight from Amazon because I know the return policy because that's what's important to me. And it's automated. I'm not talking to a sales rep. It just automated and it's done. So having those type of systems and operations, because that's my world. I'm a systems guy. Having these things, understand you have to look at the LTV. You have to be able to zoom out and really understand these things.

I love that, man. That's a really good point. So as we go into it, now we're going to, I think, customers. Yeah, customers. Let's get into customers. We need those? We still need customers? We still need those. Not only do we still need those, but it is probably the most underutilized part of a business, existing customers I've ever seen in my life. I see all the time. I'm like, we're launching this new product. And I'm like, great. And the inventory is $200,000 for order. I'm like, great. And then it's like, and we just paid it. And I'm like, what?

Wait a second. Why? Why? And then I'm like, let's go. And this, I tell this to everybody. I say, go to your, all of your customers and Shopify, whatever platform using export them into a table, sort them by who has spent the most, take that top 10, that top 20 list and reach out them directly and say, Hey, we're about to release this new product. Heads up. We're about to release this new product. We're going to make 10 of them, 20 of them that are super special edition, which

Would you be interested in them? And then what you can do there is you can sell products before they're released, net 90, net 120. I have net 30 in this presentation, but realistically, as long as you're very transparent about it, you can do it as long as you want. And you can use a super fan customer cohort to fund most, if not all of the P.O.

Yeah. It's insane. You can think about it. It's like, usually our cost of goods is 25 to 30%. That means that if you have a hundred thousand dollar order, a PO order coming up, you only need to get $30,000 of MSRP to make that happen. And if you've got that raving fan base, if you've got those super customers, they'll cover it for you. And they'll, and that's it, man. Even if it's only 20%, 30%, 50%. It's still more than, yeah.

Yeah, agreeing. You've negotiated terms at this point with your supplier, which means let's say you're only at the, we'll pay 50% of it at the port and 50% of it when it gets to the US. Now, all of a sudden you're paying nothing until it's in the 3PL and you're shipping them and you're making money on them. You know what I mean? It's a huge difference. So that's the biggest thing. And that's very straightforward. We can move on from customers. Very, very straightforward. Yeah. And again, this is all this that we just talked about here is relationships.

How are you leveraging the relationships with your vendors, your suppliers, your customers? How are you building those relationships, not just trying to send 15 cents on a yoga mat? 100%. And give them more. These are your superfans. Give them more. Say, there is literally 10 of these. It's a special color. It comes with something limited edition. This will, handwritten letter, a picture of you, whatever, Polaroid. It's a big deal, man. It's a big deal. And just take care of your customers. I think that's what it comes down to is taking care of them.

Absolutely. Next one, ad platforms. So I talked a little bit about this. It goes inventory, advertising, everything else. Usually that's how a business P&L usually reads. And when I look at this, this is like the slam dunk easiest stuff in the world. And when you look at this, it's going to break down into monthly invoicing. So Facebook, Google, TikTok, just do it. They have a program for all of them. Go sign up for it using these advertising networks.

They won't approve you if you're delinquent on a bunch of bills. So just make sure you have good 60, 90 days of payment history. And you get net 30. That just injects 30 days into it. It's amazing. And the best thing about this, and I say this, be careful about this. Facebook says net 30, but they also wait 15 days until they pause your ad account. So you could do it on the 15th day. So it's actually net 45.

They don't say that, but from all of my experience, that's it. And it's very, very easy. So just make sure you do that and it's very straightforward.

And people just aren't understanding these little nuances when you go into this. And again, it's just learn the market, get the experience out there. And, you know, people do this like, oh, I'm just going to screw over this deal. Screw that deal. That has lasting effects. I wish I could tell people how big the earth is, but it's not. This environment in business, everybody knows everybody. This, it is what it is. Everybody, we're so interconnected on such a high level.

So you're going to cross. If you just don't burn any bridges, guys, don't burn any bridges and do the right thing. And if you don't know what the right thing is, it's the hard thing. It's that simple. It's the hard thing. Just do it. Absolutely. Just do it. Always do it. Don't try and take anybody over because it's a short term game and it'll just eat you alive. I agree. And I like sleeping good at night. That's my favorite thing. I'm a big fan of sleep. I'm a big fan of sleep.

I love it. But yeah, man, this is very, very straightforward. Just go do it. I mean, think about it this way. And I always tell people this is like, if you're operating from a P&L aspect and you can get net 30 on just your advertising loan and you spend a hundred grand a month, all of a sudden you just made your business a hundred thousand dollars more profitable. Because if you do it right now, you get to the end of the year and you balance your books and says, okay, great. We have still have a debt that's going to be doing 30 days, but that's past December 21st into the new year.

which means we add an extra $100,000. If your ultimate goal is to sell the business, if you're selling it like a five or six X multiple, you just made your business worth $500,000.

So very, very straightforward. I love that. You know, as you're doing this, you started with the exit as the most important thing. You know, it's something that you and I both, as you go into businesses, the first thing I'm like, all right, we're going to exit you in 72 months. Like you're, you're gone. You're like, okay, great. Now we're going to exit you in 36 months. They're like, really? I'm like, yeah, you're out. I normally, whenever I show up and I'm like, you got 36 months, you go, bye-bye. We're done. We're leaving. We're done. We're not doing this anymore.

When you, it's a different mindset as well. When you walk into that environment saying, Hey, you know what? I've been doing this for a long time and it's happening right now with kind of the boomer generation where they busted their hump for so long and their kids don't want the business. So those are the ones you show up with it. Okay. What's your exit? They're like your exit. I'm just trying to pay my bills.

We're fixing that right now. We're getting you this extra net 30, next 60, whatever it is. We're fixing that now. Now let's talk about how do you exit and having the exit in mind is something that most entrepreneurs don't do from the very beginning. Have your exit, understand your multiplier, understand what you're trying to get to because there's not a business owner. I know that's not true. There's like one or two that I know that would, if I walked over and said, Hey, here's $25 million off.

on for your XYZ business. You never have to work another day for the rest of your life because you can live on that. What do you want to do? Most of them are like, bye. But they've never done it. See ya. I'm done. I'm going to go become a shore erosion technician and watch the beach just get eroded while drinking margaritas. So...

Having that idea as you're trying to scale your business, one of the things we talk about, systems are vitally important, relationships are important, building teams that have decentralized command, unbelievably important. But knowing what your exit is as you're starting this up, if you're purchasing a business, vitally important. There isn't any way around it. I totally agree with that. I don't want to get too off track, but I feel – you talked about the boomer generation. Yeah.

This is the, I believe that when we talk about the housing market, which is always just inventory demand, very straightforward, the business market is exactly the same right now. And it's going to get really, really, there's going to be a fire sale in the next five to 10 years. And that's why we're seeing so many, I call them the unsexy businesses. You know, that's the construction companies, the painting companies, the car washes, the lawyers offices, the dental offices, all of these unsexy businesses.

which are just being rolled up, right? They're like, okay, well now instead of one of these, I have seven of them. And now my EBITDA multiple is instead of a five, it's a 7X, right? Yes.

And it's just so interesting because a lot of it is the younger, it's not them, it's their kids. They're like, I don't want to do this, but I'll buy five of them and sell it to a company that that's all they do. And it's one of those things is as you have become an experienced entrepreneur and as you have multiple exits, you'll go in and you'll start hunting these deals. We do it with laundromats. I did it with a cardiologist recently.

So you do these things and you acquire multiple of them and then you walk away. We've got some legislation changing regarding how houses can be bought. There's going to be some push in that houses can't be bought the same way they were before. That money's got to go somewhere.

And I agree with you a bazillion percent. It's going to go into these rolling up of these small businesses, these very unsexy businesses, which are the businesses I adore more than I could possibly tell you because you get them so much cheaper. Give me the ugliest thing that is mission critical that can't be exported.

Because you can export all these other things. You can put the stuff over there, but go ahead, try and do your laundry somewhere else. Try and do the lawn care somewhere else. No problem. That's outsourced lawn care to India. How are you going to do that? You're going to ship your lawn? How are you going to do that? 100%. It's crazy. People always want it to be sexy and phenomenal. I'm like, if I told you that you're going to sell cow poop

Cow poop. And make a million dollars. And make a million dollars a year and never have to work. I'm selling cow poop. Down here in Florida, we had Wayne Huizenga who literally owned waste management. And then he ended up buying the Florida Marlins at the time. We're like, what the hell, dude? So it was one of those things that was pivotal. Go, wait, money doesn't have to be pretty. It just has to be consistent. As long as I can automate residual income, I'm a happy guy. I don't care what it is as long as it's legal and it doesn't violate any morals.

I'm a good guy. So as you're doing this, as you're trying to scale, as you're trying to empty, as you're trying to exit out of these things, these, please look at things a little bit different when you're trying to scale, but always keep your exits in mind. Yeah. You're spot on. Oh, I love that. The mini rant. I love dude, Charles. I love you so much. This makes me so happy. My people. I love it. Let's move on to the banking platform. So this one's going to be kind of a mini segment. I just added this for, for one reason. And that's because bankers,

Banking is getting super competitive. The concept of an online bank used to be very scary, especially pending the Silicon Valley Bank Incident last year. But realistically, it is becoming more and more advantageous, especially this is an example. Ibane, online bank.

Instant deposit feature. No fees. It's crazy. Biggest problem with most Shopify stores is you got to wait a couple days to get the dollars, right? That's it. And if you're smaller and you don't have amazing cash flow management or you just need the money out now to go buy inventory or whatever, this helps a lot. Get it out every single day the moment you get paid. The other piece, which I tell a lot of people do this, is like...

keep it in there. It's got a 4% APY, which is very freaking difficult to beat. It's crazy. You know, it's, it's, it's amazing. But even Apple, you know, Apple has Apple banks that's coming out and their APY is, I think it's in like the 7%. It's insane, right? It's crazy. Yeah. But I won't spend too much time on this. This is just a footnote, you know, very, very straightforward. Take a look at it. Absolutely.

You know, so one of the things we've talked about also is also credit cards. We go into this environment of how you can use credit cards and how you can leverage it. Because I call credit cards OPM or other people's money. Walk me through this. How are you doing this? And what are the ways that you do it with credit cards? Yeah, I want to start with just saying like in general, credit cards are like the best and worst thing to ever happen to society, in my opinion, because they are the most powerful tool for your business, but also can be the worst thing for your business. Yeah, credit cards for me are like guns.

Yeah.

is a game changer because there's built-in net features inside of that. So walk me through how you guys are using credit card. Yeah. I mean, I think I want to start with this because there's one thing that's not on this slide, which I'll add called plastic. And this is, this is like the ultimate add on to any credit card.

The first thing is I want you to imagine the business owner, because I've had this example. This just happened to me super recently. I went to a business owner and I said, hey, tell me about your credit card and why we're spending so much on it. And why is everything going through there? And he's like, it's great. I get 2.5% back on flights, on all of this. It sounds great. And what I often see, and you've probably seen this too, I think that Dave Ramsey talked about this back in the day all the time, was

don't spend money on the credit card just because you want the rewards. It makes no sense.

And what I'm showcasing here on the screen is you're going to see four examples of what we call trading rewards or instant gratification for time, aka delayed gratification. Usually when we look at here, the Amex Plum card is my favorite example here. What Amex offers with this, and there's several examples of this, we'll go through them. What it offers is the business owner is to trade rewards for time.

Right. So we're training net 30, which is pretty much every credit card for net 60. And I want you to think about this as net 60. Okay. Well, what does that actually mean? It means that you get another 30 days till you actually have to pay it, which is a big difference. It's huge difference.

And most people will say, well, oh my gosh, but I'm losing my 1.5%. I'm losing my 1%. And I'm like, I don't think you understand. If you're giving yourself, let's go back to the, all the way back to the beginning, a savvy business owner who has the, who has the negotiations with their, with their fulfillment, I mean, with their supplier.

Now you've created a pathway that if you're utilizing the credit card along with a supplier that you're like, well, I actually now I have net 60 from my supplier and now I have net 60 on my credit card, which means now I am selling the product and I have 30 days until I even have to pay anyone. Right. Which is a huge, huge gain changer. Right.

We talk about this all the time about how do you put the pin back in the grenade? And the example I always use is, can you sing happy birthday? Please don't. But you can. Most people can sing happy birthday. And then if I take a grenade, pull the pin out and put it in your hand and say, okay, now sing me happy birthday, you're probably not going to be able to sing happy birthday that well. So it's the idea of how do I put the pin back in the grenade? And for most business owners, going from a net 30 to a net 60 is the best pin they could ever possibly get back. And if you're like, oh, well, I'm losing this 1% reward or whatever it is,

Go make more money to make up for the reward. I'd much rather do it that way and put the pin back in their grenade and get more time because it's the only thing I'll never make more of. And people just spend it like it's going out of style. I cannot tell you how many times I've had the conversation like, well, I get all these things. I'm like, you're losing $200,000 a month. It doesn't matter. The 2% rewards do not matter. Absolutely.

Which actually gets me excited about this because the reason why I talk about plastic is usually when I talk to people about this, they say, well, my supplier doesn't take credit cards. They say they just don't. They only take ACH or wire. And I'm like, okay, great. There's this amazing tool out here called plastic. What it allows you to do is pay any ACH invoice, sometimes wire, with a credit card.

which is amazing. And they only charge you 2.5 to 3%, depending on your credit history, whatever. Um, which means that you're basically chain charge of trading those points directly for those 60 days, even things you can't pay with credit card, which is just astounding. Right. Um, and there's a new guy to this, this new guy, the stage, if you look at this, there's one called Ampla. Ampla is new. Um, but they let you keep the rewards.

which I've never seen anyone who does this. It lets you keep the rewards and keep the time. You get 1.5%, which means that if you're trading the 1.5%, then you're using plastic, which is two, two and a half percent. Now you're paying legitimately one point for net 60, which is 100% game changer. Absolutely. Game changer. It allows you to survive in a totally different world. It allows you to do other things and survive the ups and the downs of what the market does. And

And people always, again, it goes back to the conversation about the yoga mats. Oh, I want to save 15 cents. Yeah. What does that 15 cents costing you? What are you going to lose? Cause I would say, what do you, by saving that 15 cents, what did it actually cost you? Cause everything has an action.

One of the things you talked about is, you know, you've done all these things and you've had all this. What is an example that you've actually walked through in a recent one of your clients, if you're okay with sharing it, where you went in and you said, hey, this is where you were. I've got it to 60 to 90 days where they're not having to pay their inventory. They can sell all this stuff without them costing a dime. That gives kind of these small business owners, because so many are behind the eight ball going, God, I'm going to sell this stuff.

I have to save up the money to buy the inventory. And then I sell the inventory and I got to save up the money. And I'm always behind the eight ball. And I ended up eating hot dogs at Costco for a dollar 50 because I can't afford anything else. How do you get to the person where like they can breathe? How do we help the people for lack of a better term, put the pin back in the grenade so they can start thinking again, because you're going to make different decisions. The person who's running on a net 30 is making very different decisions and from a very different place. And if you're at a net 60 or a net

90. You have the ability to think and to process data. So do you have a practical example of one that you've done before? Yeah, this just happened. It's so funny. It is like Groundhog's Day every single time. So this amazing team met about six, seven months ago, maybe a little bit longer now, but came into their business. They sell outdoor and apparel items. And they're really, really imaginative, amazing business owners who create really cool products.

Outdoor and apparel. So a lot of the outdoor stuff is bigger and heavier, right? And when I went to them, they were losing roughly $200,000, $250,000 per month, which hurts, right? And when I started looking at it, we went through the same checklist. I'm like, let's start at the very top. Let's go. Let's look at the inventory financing piece of it or just the net terms with your supplier and say, well, let's go talk to them and see what's going on. And

And the reality is, is their products are big. So they have to order a bunch of them and then they sit on the shelves and they take up a ton of time and space and it hurts the business overall. So as we're going through this, I talked to the supplier. I'm like, okay, well, can you give us net terms? They said, no, I can't because your product is way too customized. It takes a ton of effort. And so I go back to these founders and I'm like, well, this is what we've got to do. We've got to make this less customized while still making it really good for you. Let's, let's use an example of a backpack that

that we're sewing on a couple extra buttons and we're doing a couple things here. And I said, listen, if we can get rid of these two features that I know is really important to you, but is it important to your customer? We took a survey of the customers, like how would you react if we remove these two things? Small sample size,

They said we wouldn't even notice, right? Now going back to the manufacturer and said, well, listen, what if we give you an extra point and a half, 1.5% and we get rid of this feature? Can you give us net 30, net 60? He said, what I can do is I'll give you, you don't have to pay any of it till it gets to the dock.

And then once it's on the boat, you have to pay 50%. And then when it lands, you have to pay 50%. And I'm like, that's amazing. Huge difference immediately in the business, right? And then we start going through that a little lower. I'm like, okay, what comes next? Again, inventory. Let's go to advertising. Advertising.

We got net 30 on a Facebook credit line. Then we wait the extra 14 days. Now it's net 45. And then we pay it with the Amex Plum card, which is net 60. And I'm like, okay, instead of having net 45, and they said going from paying every single day, $900 to now we are paying every 45 days. Then we wrap that under the Amex Plum, which is another 60 days. So we have 95 days until we're even paying 105 days.

Until we're paying even our Facebook bill, which means guess what? We can launch a product. We can order a product. We can get it into the 3PL. We can run the advertising for it and we can sell it now without paying a single dollar out of the bank account yet, which is just amazing, right? Most people don't think.

And the way that this business changed in such a short amount of time is, again, you think, okay, we're losing $250,000 a month. That must mean inefficient ad spend. That must mean bad cards. That must mean things. At the end of the day, it's not usually that. It's usually it takes too long to sell the product.

And you're sitting on bad debt or you're sitting on inventory because you need to sell this before you can buy the next thing and the next thing and the next thing. And we got into the very end and we talked about this briefly. We got to the very end. Great. We're positive now. Now what are we going to do? We're going to go launch a new product. We're about to do this. Great. And how are we going to pay for it?

we're going to launch a thousand of them. And the first 100 of them get this special, a special ax, basically, where they can ax with this product. They get something special with the product that only those first hundred people get, but they have to order it right now. And they're not going to get it for 120 days. And they're paying the full MSRP for it right then and there, or the founder's edition MSRP, which that amount,

is going to pay the 50% for getting it on the boat. And then once we get it across the ocean and get it on the back and land it, it won't pay any of that, but that bought us a ton of time. And we're going from negative $250,000 a month to positive $10,000 a month inside of six months with no changes in ad spend, no changes in efficiency. Everything is exactly the same. We just mapped it out differently. And it's just amazing to say, well,

Don't have to fire anybody. Don't have to change overhead super heavily. Just need to negotiate with everything you're already doing. And this just happened. And it's just like the best feeling in the entire world. It's like nailing the test, getting an A, you know, 98%.

Well, I think it goes back to what you said in the very beginning. You know, yeah, sure, there are some bad business out there, but most of the time it's just bad business owners. And if it's bad business owners because they're not educated, because they don't have access to the tools, or for most of the time, it's just ego. This is the way we've done it. We've always done it this way. We have to keep doing it this way. Yada, yada, yada. That is a hurdle that most people run into because they don't have either access to individuals like you or they don't have access to this knowledge.

So if someone wanted to get access to you to say, okay, how do we find you? This is amazing. Holy crap. I didn't even know about Plum five minutes ago. This is unreal. There's so many other different things. I mean, we could have kept going. We've had, we only made it through like 13 or 14 of the 20 something slides. There's so much more here that we could have done. And we might end up doing an entire follow-up that's just this. But if someone wants to track you down, if they want to get ahold of you, if they want to learn more of these things, how do they find you?

Yeah, man. You know, I hate to say this because I just love Instagram so much. I'm Instagram Grayson Cross official and then Grayson Cross dot com. Super, super simple. But, you know, our business weekend, you can go weekend digital dot com. Super straightforward. And I am the easiest person in the world to work with. Just text me like legitimately shoot me a message. I

I read all of them, every single one. And if you have a business, you have a problem. I mean, I'm a servant. I'm not, you know, I've done pretty well so far. I'm not trying to make a huge dollar amount off of any of this. I want to help people. So if you have any questions like, hey, this is the situation I'm in. What should I do? If it's not going to take like a huge amount of time for me, I'll say, hey, this is what I would do.

based on everything you just told me, this is what I would do. And I've got a lot of resources. I can 100% send whoever messages me in. But the goal here is that I, we talked about this a couple of times,

I got super lucky. I think, you know, looking back and this is like very kind of emotional for me. I got super, super lucky dozens and dozens of times. And I meet people and I had somebody come into my office. His name is Hassan. He's an amazing guy. He came in and he said, I will do whatever it takes to work here.

I have very little experience. He came into an office in Sacramento. He wants to be a media buyer. He says, I will bring you coffees. I will mop your floors. I will do anything if you let me sit and watch. He's a young guy, super hardworking. And he kicked serious ass and worked super hard

And when I think about back to the luck factor, I'm like, was he lucky or did he put himself in the scenario to be lucky? Right. And I think I tried to tell him no like five times. This kid kept coming to me on Instagram and showing me up to the office until I said, okay, fine. Right.

So I think that, and you know, wrapping it up is just, I'm very, very, very lucky. And I want to create an environment that people who weren't as lucky can generate luck and surround themselves with an advantage that they already have that they're unaware of. So that's what I would say. Absolutely. It's giving people a chance. Let's just give people a chance and show up and be lucky. I can't, I can't thank you enough for coming on. There's so many more questions and so many things we're going to talk about, man. I really appreciate it. Thank you so much for being on the show.

Thanks, Charles. Thanks for joining us on today's episode. We hope you've been electrified by our conversation with Grayson Cross, the business turnaround maestro who's made an art out of transforming financial nightmares into profit-generating dreams.

I want to extend a massive thank you to Grayson for peeling back the curtain on his game-changing strategies. Your candidness about the ups and downs of entrepreneurship and your innovative approaches to cash flow management are truly eye-opening. To our listeners, your hunger for knowledge and determination to elevate your businesses is what fuels our mission to bring you cutting-edge insights from the trenches of entrepreneurship. If you're itching to put Grayson's strategies into action, don't miss out on our companion guide.

It breaks down everything we covered today, from negotiating with suppliers to leveraging your superfans, and provides you with step-by-step instructions to implement Grayson's cash flow optimization techniques. Head over to podcast.iamcharleschwartz.com to grab your copy now. Remember, in business, fortune favors the bold and the prepared. Until next time, keep pushing boundaries and creating your own luck in the world of business.