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Peter Vessenes has served as a high level corporate advisor since 1983. Projects that began with assisting presidents of Fortune 100 companies broadened to include mid-sized corporations, closely held companies, start-ups and capital formation. Peter is a popular platform speaker and a co-author of two books. Now he actually said he authored these books he wasn’t a co-author so maybe that’s a typo there. Building Your Multi-Million-Dollar Practice and The Golden Rules of Economics: The Real Way Out Of America’s Financial Crisis. So Peter goes on to talk further about the points that he raises in Building Your Multi-Million Dollar Practice and if you think you can get your hot hands on a copy of the book I’d actually highly recommend you do as it sounds like there’s lots of useful information in it. Peter’s works have been published in Investment News, Wall Street On-Line, The Journal of Financial Planning, Producers Web, Horsesmouth, The Register, Financial Planning Magazine, Adviser Max, American Management Magazine, American Venture Magazine, Broker Dealer Magazine, and more. So lots of American financial magazines. Peter is the founder and CEO of ProfitSee, a financial software service for financial professionals, CPAs, and ProAdvisors. So let me explain ProfitSee. Business owners need access to high-level financial insights to strengthen their companies. CPAs, bookkeepers, accountants, and business advisors that understand how to do this become the game changers for their business clients. ProfitSee’s software, support, tools, and training strengthen the accountant-business owner relationship. Everyone benefits by being more profitable. With a commitment to rebuilding the global economy, ProfitSee’s cloud based software solution seamlessly integrates with accounting software data to provide powerful, instant insights. The forecasting, reporting, white labelling, and analytical tools improve efficiency, financial stability, profitability, and valuation in each business. ProfitSee is more than just a reporting tool.

I started by asking Peter what did you like to do as a 12 year old?

Peter: As a 12 year old? My goodness. I was an exceptionally good baseball player. I was the catcher in my city all-star team. I was also deeply hooked into {0:08:08.0} and algebra. I was one of those whiz kids that knew if Train A was moving at 40 miles an hour to the North East and Train B was leaving an hour and 40 minutes…anyway so I really, really liked applied math and logic and sat there even at 12. I started to take an interest in music and I began to be professionally trained as a vocalist-

Heather: -we need to get you up singing at Xerocon then it sounds like-

Peter: -oh my gosh that’s for the young people. I don’t know if they’d let us silver haired biddies go up there.

Heather: I’m sure there’s a few silver haired people on stage.

Peter: I still have the pipes. So you know I really loved math, I loved reading, I was a good athlete, I started to play golf at 12 but no, it was kind of a combination of math, science and performance.

Heather: Sounds like you’re a really positive all-rounder and had a few opportunities there. That’s excellent.

Peter: Well, you know, everybody is who they are. I was flitting from one group to another as I went through my primary and secondary education.

Heather: Brilliant. I know that when I lived in Canada one of the things that my husband really liked was the batting cages because we kind of have baseball here in Australia, so I shouldn’t say that, but we don’t really have those and the ball automatically shoots at you and you just kind of go in there. So that’s quite fun to see you go in and you get all dressed up and then kind of have to hit the ball. So that was actually quite a fun thing. They should open something like that here in Australia.

So can you tell our listeners, Peter, about your company and what it does?

Peter: Well I can give it a try. I actually…we’re an overnight sensation 40 years in the making.

Heather: Oh okay.

Peter: That’s the best way to explain this. When I came out of graduate school I actually worked as a think tank facilitator for the US Government on healthcare reform in rural America and my college sweetheart, who was my bride by then and still is, she was an attorney who specialised in constitutional law and when we started to have a family we decided we didn’t really want to be like time bureaucrats. So we went back into the private sector and by 1979 I was really deeply involved in using micro-computer systems because I had a background in programming in both fortran and basic and by 1982 I found I was being engaged by a number of companies, both in Silicon Valley and among the Fortune 100 that were very high profile tech companies. And these are names that everyone would recognise. So eventually we wound up moving to Minneapolis in 1987 because I was asked to fix a failed acquisition merger for a major Fortune 70 company that was doing about half a billion dollars a year in revenue but was losing about $47 million-

Heather: -that’s a huge amount of money back in 1987-

Peter: -that is yes and so in 26 months with what I was doing and some of the people that were contributing to what I was trying to help with, but pretty much it was my strategies that turned it around. In 26 months we turned it to +$57 million which is pretty astonishing and the parent was so happy, and I was on leverage compensation, but the parent was so happy they sold the division and guess who was not asked to go along. So no good deed goes unpunished. So I got fed up by the time I was 30 working for government and by the time I was 40 I got fed up helping multinationals. So in 1990-1991 somewhere in there I shifted over into helping SME’s and I really, really liked it and I had developed a way of doing gap analysis in businesses which basically looks at…I believe there are eight key disciplines that inflict themselves on any company as soon as your significant other says I’m not helping you on weekends anymore. So essentially what the eight are is how do you define and how do you fulfil the client experience, and that’s everything from sales processes to how do you approach your market, variety of things. The second is, how do you create tap-of-mind awareness into your target audiences. So those are the disciplines of strategic marketing, competitive analysis, competitive advantage, branding, taglines, advertising, public relations, event management, competitive advantage, elevator statements – all those things. The third discipline is workflows and efficiencies and I was actually trained in Deming’s totally quality management from the 80s and I had adapted it to working in service space businesses as well. So I knew a lot about efficiencies and what were bottle necks and what was Chinese lanterns and I had to start with people in the trenches so that was an interesting element in how I match these things. The fourth discipline was compliance and regulatory law because that’s becoming a bigger issue for most business. I didn’t know a lot about it but my wife became the nationally known in the United States in compliance and regulatory law, because she wrote two definitive books about it, and Bloomberg Press called her the goshdess of compliance and regulatory-

Heather: -oh goodness that’s something to be a goshdess of-

Peter: -no I didn’t know I could marry immortality. But I’m Greek, she’s German and the mortals never fear as well. It’s mythology, my niche is mythology. But the worst part was my children, who when they found out about this realised they were demi-gods and dad was on the bottom of the totem. Anyway, so I knew how to manage compliance and regulatory law. The fifth discipline was technology which I literally knew down to the binary. I know how the actual summer conductors and processors work, I learned it from the guy, one of my clients Texas Instruments who invented the summer conductor. I had actually been involved in artificial intelligence programming with Texas Instruments back in the 80s so I knew the technology pretty profoundly. The sixth discipline was human resources and organisation development and for 16 years I’ve been an accredited certified consultant in {0:15:25.7} behaviour which is how people instinctively problem solve. You’re born with it, it doesn’t go away but in order to make that  work building synergy and human resources so that was kind of cool. The seventh discipline was fiscal and asset management and that cap, it’s not accounting, it’s not bookkeeping, it’s basically how do you assess all the resources, all the things that appear in the balance sheet, all the things that appear in the P&L, all the stuff that people are confused about and how do you leverage them as a rate of return. And why did I know so much about this? Because I had built an extremely advanced spreadsheet algorithms and it had actually been brought in to train analysts in Fortune 200 businesses on how to do it. The eighth discipline was strategic and functional business planning. Because if you don’t know where you’re going you won’t like where you wind up. And I actually utilise the methodology that was done by Japanese company Send, 3M and GE and so there is a certain way of doing that. So that’s when I would go in to try and help the SME’s. That’s what I would do. That’s the same thing I would do in a multinational I was applying to the SMEs and I loved it. So much so that people suggest I start writing so by 1993 I started writing. By 1995 I’m a contributing editor in 5 major financial journals in USA, 9 being asked to stand up and do platform speaking. Meanwhile the goshdess became so popular that she was being asked to do a lot of platform speaking but for all the things she’s brilliant at, and she’ll tell you this, she can’t manage her way out of a paper bag. So I offered to be her manager and she said, why would you do that. I said “cause if mamma aint happy aint nobody happy”, really I know how to do this, so okay. So any rate when we finally empty nested this actually is leading up to how profits came about, when we finally empty nested a lot of our friends and professional people that we knew suggested that we unify what we were doing together and we laughed at that as well saying we’d been happily together for more than two decades, why would we want to ruin that. But eventually I thought, you know what is it hurt, let me write into the financial services industry. So by 1998 I was regarded as one of the top 2 or 3 practice management experts in the country. In 2003 we wrote a definitive book about it called Building Your Multi-Million Dollar Practice. It was what we had learned from assisting hundreds of people in the financial services industry and names you would recognise, ING, Financial Network Investment Corp, Merril Lynch, it was a long list. So I went back in the 2000s to helping multinationals because now it was on my terms, not on their terms. So things were powering along really, really well and in 2007, late in 2007 before the markets blew up I woke up one morning and turned to Catherine and said, “what a stupid I am”. She looked at me and said, “what?” I said “what a stupid I am”. She said, “there’s been a lot of things I’ve wanted to call you but stupid has never been one of those”. I said, “no I really am”. She says, “why are you stupid?” I said because for the past 20 something years I’ve been helping business owners improve valuation, increase profitability, build financial stability, create succession plans, helping them escape, being self-employed with helpers. And she said “yeah and you’re really good at it”. And I said, “yes but what have we done?” We built the ultimate star based business. I said and though the bricks can clone sheep I wouldn’t want to try and raise me again. So she looked me at me like oh my gosh, what are we going to do. So essentially at that point and that’s a company called Investment Consulting, Investment Advisors. We tried to let it die on the vine but the reputation has been so large that it just…people just keep chasing us so we have to do some of those things. But essentially the conclusion I came to from what I was doing, built a different company for her, but what I was doing without question the weakest discipline was fiscal and asset management and so in 2008 I launched this company and the whole objective was to provide SME’s, the kind of proactive analytic tools that are only normally available in world class multinationals and that we’re going to offer it to SME’s. So that’s how we started in 2008 then the markets blew up which a number of people I know banded around us, they really believed what we were doing, so a closely held corporation like 10 families so we are completely self-funded but the objective was to take this to market. So in 2009 we rolled out the product and in the last quarter of that year I got a call from QuickBooks and Intuit saying they’d heard about us and would we be one of the original ten developers in the app centre so we said fine and in 2010 we wound up finally getting through integrating their horrid API from their data {0:20:53.7} and they worked terrible. As matter of fact we actually had to build a complete new set of synchronisation tools. It took us 9 months and there were $100,000 to do-

Heather: -oh my goodness, wow.

Peter: But the relationship was such that we had access to their APIs at no charge but at a telephone call they could cancel our rights. So I could never sell the only functioning synchronisation tool in QuickBooks in the USA. But meanwhile I actually served on their advisory panel as one of five CEO’s on their executive advisory council. In 2011 we won app of the year and they actually did a marketing campaign for us to over 2 million subscribers of QuickBooks in the United States. So late-mid 2013 we were out on the west coast and someone told me you had to meet the invasive. I had to meet the invasive. Who’s the invasive? I used to work at Intuit but it’s a new company now so okay. I met with Ian and Ian was one of the original 10 or 11 employees of Xero in the United States and I said, who do you work for? Xero. I said why would you name a company Z.E.R.O? No, X.E.R.O. Oh Xero. So any rate we had a wonderful chat, he looked at our product and says, “oh my gosh, can you make that work in the Xero world?” So I said you know, I’m smiling because I remember what we went through with Intuit and I wasn’t holding my breath and I said sure but first we need APIs. Oh you need APIs? Yes we do, you can get among this URL and so on and so forth. So I turned it over to my CTO. We are one of the few developers that actually have a large development team and it’s a big development team and because of my background in artificial intelligence programming and set and logic theory we’re actually, the efficiencies with which we create stuff is scary fast and unfortunately for us when we show up at the shows we kind of know how the people are programming and we don’t want to say anything but let’s just say frequently it’s not the latest and greatest ways of doing stuff. So what happened was after our massive fear of oh my gosh how long will it take to do this with Xero, by some strange quirk of fate the exact same cog based database management applications and systems and tools that we were using were the same ones that Xero were using. It was very, very interesting because Xero’s really only like 6 months older than we are. So 4 weeks later kaboom here we go. So our relationship with Xero and so we started, we only since Australia 2013 we’ve only missed one Xerocon globally which was the last one in New Zealand and it was because we had some things going on in Europe and the UK but it wasn’t that we didn’t want to be there. So what happened essentially was the company itself emerged out of the now nearly 35 years I spent doing turn arounds and transitions by working on fiscal management. We always kept, in Xerocon, we always get plopped next to the reporting tools and we know the guys who’ve had them like CrunchBoards and Spotlight and so on, it’s a big market, but we really, we don’t belong there because the things we do are CFO level proactive fiscal management. So for example next week we’re getting the final certifications as being the only accredited budgeting and forecasting tool by the ICAEW, which is the International Chartered Accounts of England and Wales. They have 140,000 members.

Heather: I think it’s the institute.

Peter: The institute, yes you’re right. But I mean we’re it. We’re the only one and what they wound up constructing their benchmark tools around the features in our product. So that’s kind of how we happened into this. One of these days I’m going to figure out what I’m going to do when I grow up but we’re having a lot of fun and we’re very grateful. We are strictly white label. We only licence the product either through accounting firms. We’re entering into some in the United States, relationships with associations with specific vertical markets. Obviously we love Xero. We work with QuickBooks and have for a long time. Sage wants us to help them, they’ve been nearly impossible to deal with-

Heather: -because of their API?

Peter: Because no one knows who’s on first. They-

Heather: -was that a baseball analogy?

Peter: -yes it’s kind of a baseball analogy. It would kind of be like playing soccer and not knowing who your goalie was. So you know, I know that probably makes Rod upset with me but we love Xero, we are obviously internationally our strongest licence and this is with Xero but we also do things that have nothing to do with accounting systems with certain strategic partners that we have globally. It’s just how we were able to do forecasting and tool management and so on.

Heather: Very good. Thank you for sharing that with us Peter. I actually had drinks with Gavin Fernandes last night-

Peter: -oh I love Gavin. Oh my.

Heather: And he said to me, Heather you’ll only need to prepare three questions for Peter because he’ll have a long answer for them all. So that was very good.

Can I ask you, I didn’t want to interrupt you while you were on a roll, there are two things I wanted to ask you about that. First of all you made a reference to Chinese lanterns which I didn’t understand.

Peter: Okay here’s what a Chinese lantern is. You’re in an organisation, let’s say a programming team and the people who are defining what has to accomplish in the app are a small bunch. That’s like the end of the Chinese lantern. And then it has to go out to the development team so there might be 12, there might be 20, there might be 40 people who are working on it and then before it can get out into use then it goes through another small group of people who are maybe testing, validating, trying to break it. So the reason it’s called a Chinese lantern is the group in the middle is the width of the…you know how Chinese lanterns look-

Heather: -yes, yes-

Peter: -the wide middle. So that’s all the bodies in the middle that are making it happen and it’s the ends that are small. And the reason it’s called a Chinese lantern is very, very frequently inefficiency in a company happens because of the two ends slope down where the middle can create. Those are called Chinese lanterns-

Heather: -very good. Yes that was interesting. That’s obviously something that’s passed me by. Now you started that by talking about 8 key disciplines which you outlined for us. Were they disciplines that you developed yourself?

Peter: That’s a tricky question. You know some of it are just observations you make so for example if you go into a larger company or a mid-sized company you know there’s a sales department, there’s a marketing department, there’s a production department, there’s a back administrative financial team so there’s all these teams that are within an organisation but usually Human Resources looks at them as kind of like silos of operations and my observation was that any business that you have that is organically linked and if there’s a breakdown in a company it could be occurring in any one of the 8 disciplines so the overall theory of how this works was mine and that’s why we wrote the book “Building Your Multi-Million-Dollar Practice” because we examined hundreds of companies that we’d worked with on these 8 disciplines and explained what were the things they were doing that were working so well that they were making a lot of money, but what were the things they were doing that were crippling them or causing them to create a limited ceiling of opportunity. At first I was afraid to write the book because I thought I was giving the crown jewels away and then we came to the conclusion that even if I told you everything about it that doesn’t mean you would know how to spot it, assess it, fix it and what was necessary to make changes. So that’s why the book went out it became very, very popular with some major publishing house, Kaplan Publishing in the US, and we finally got the rights to the book back. So unless you can find a used copy somewhere the only way you can get it is if we choose to republish it.

Heather: Oh okay. That’s really interesting. So in the book “Building Your Multi-Million-Dollar Practice” you explore these 8 key disciplines. Is that my understanding of that?

Peter: Yes.

Heather: As a writer myself I just constantly think you give it away because it helps everyone. It just pulls everyone up further and that seems to be, reading through your bio, that seems to be really important to you actually, being able to help community as a whole, pulling them forward.

Peter: Absolutely. If you look at the mission statement of the company it’s very clear. Rebuilding the global economy one small business at a time. I won’t tell you who but I was with a very major accountancy firm who wanted to utilise us as being their internal private label tool for what they’re trying to do into their communities and I said, “delighted to” and they said, “of course we really expect exclusively”. And I said “I can’t do that”. “Well why not, we don’t want other people doing the same thing we do” and I said, “no, you have to understand it’s white label, fully customised reporting, it’s fully customised screen interfaces, you can modify price, you can modify layouts, you can do all these. These are all the things that we develop” I said you know, trust me it’s uniquely yours plus if there’s anything that you guys want to do that’s exclusive to you, my team can get it done astonishingly fast and then we can negotiate on that and the managing partner came back and said he didn’t realise that. Now he had two other people there that had fully vetted us and we were {0:31:48.3} with what he was telling me because no don’t chase this man away please. But he said well you know we can just acquire you and I said no you can’t. He said, everybody has their price. I said you know we are funded by 10 people, 10 families who don’t have any financial cares in the world. I said we’re really doing this for rebuilding the global economy. And he goes, I was afraid you were going to say that. I mean you have to understand from my standpoint Heather I’ve been dealing with people running multinationals and high powered politicians in the US Senate since I was in my 20s. So it’s kind of like I’m, you know, I don’t kid myself, we all put our trousers on one leg at a time but it’s been very, very fun to kind of go back out in the community because there is this true revolution happening in the accountancy industry where they’re seeing that just compliance is becoming commoditised. They have to learn how to provide value added services so it’s fun for us to be in the middle of that.

Heather: Yes absolutely. So what you’ve said is you were dealing with government and big business and then you kind of moved into dealing with small business. Now government and big business these guys have a lot of money to spend and I know whenever I deal with them, sort of the work I do seems to get paid tenfold of the work that when I deal with small business.

I love working with small business but moving to dealing with small business can you sort of make the same sort of income that you can make when you are dealing with these bigger businesses and these government organisations?

Peter: Well now again I can’t speak for anybody else outside of who we are but the standing joke at our company is, because you know we’re entering our 8th year now, we can tell you 9 ways not to sell in the United States because we tried selling directly to the SME through the relationship with Intuit and we found it was an absolute study in frustration because our tool was not about just reporting or notifications. It’s really about doing CFO level stuff. How do you proactively manage the company? How do you create a what-if scenario that gets grander to the point of what’s the new lease going to cost. Who are the employees? How are they paid? What is the sales charter? How long will it take to do? I mean we build these things that a spreadsheet person would take months to construct and you can do them in about 8 minutes on our tools so we found that trying to sell directly to, what we could call the consumer, was pointless. The level of support and training we’d have to make, it just didn’t work. So that’s when we started to sell through CPA’s and accountants and other high value service providers so in a sense we’re really not selling to the small business. What we’re doing is providing the tool for people who do provide services to those companies that the out-of-the-box cost is actually less than the administrative costs of them printing out standard reports from Xero. So what we do is give them a tool that might run in Australian dollars anywhere from $12 – $45 a month on a licence and that price is actually less than what an administrator would pay to try and print out reports and so on. But what it allows them to do is provide value added services at 6, 8, 10 times the cost but the efficiency involved in it on their side is profound and the value added to the business owner is the equivalent of paying $500 – $1000 a month for a CFO that should have cost them $10,000 – $12,000. So that’s the pricing model. We work with firms that basically have either the potential or already licencing 500 licences and up. We have some that are significantly more than that, so by that we can provide the kind of value support to the accounting firm that they therefore provide the value support for the small business. So that’s how we make a margin on it.

Heather: Excellent. Thank you for sharing that with us.

So Peter can you tell me how many people work in your business?

Peter: Oh yes I have to think about this. Now let’s see…accounting here and overseas…we’re about 25-26 people now and it’s about to expand to…in about 4 months to about 35-38 people.

Heather: Oh so you’re actively recruiting?

Peter: Oh yes.

Heather: Excellent. Many of the people I speak to in this world are actively recruiting so I’ll say to our listeners if they’re interested get in touch with Peter and his team.

What platform is ProfitSee built on?

Peter: You mean what architectural platforms?

Heather: Yes.

Like what coding language is used?

Peter: Oh my gosh we have a variety of them that we’re utilising and let’s just say, you mentioned Gavin. The last time Gavin and I met in the offices over in Melbourne I put together on a whiteboard, or maybe it was a window they had so I could draw on it. You know how some of those windows are-

Heather: -yes-

Peter: -it was a panel window in one of the conference rooms and he asked me the same question. So rather than me telling you which software tools we use, because we actually use five different languages, depending on what we’re working on, let me give you the flowchart on how we do these things. So basically I built a flow system that showed how our software is architected and he looked at it and he went “oh my gosh” and when I went back in a year and some later this thing was still up on the wall.

Heather: Oh my goodness.

Peter: Let me say again this goes back to our AI format. We are object orientated. Basically we have the master data engine. When we do customised things for particular clients with particular needs we have another group of things that are creating tables that are accessible. We have a graphics design team for building the front end. We have front end programmers. We have another group that manages strictly the APIs and the data inclusions into the thing. We have something that we call the back engine which is all the fancy algorithms and the AI stuff that serves no purpose other than what logical sequence do we need and therefore how do we assign it to the various datasets. Then we have another set of things that are involved in reporting and report generation and so it’s extremely efficient way of utilising object oriented programming. We basically make calls from about 9 different modules in order to create and use the results.

Heather: It’s very interesting. It sounds like you have a really refined highly productive system operating in your business.

Peter: Our biggest challenge has been finding programming talent that actually knows how to work in these kind of environments. We’ve been very fortunate in that. But I chatted with some of the people at Xero too and they faced the same thing. They told me they did a search once just to try and find 100 new members of the development team and I think they brought in over 1000 resumes and out of that they only found I think a dozen. They had three people accept, one didn’t want to move and the other two found better offers. That was more than a year ago and I said oh I know that story, and I do. So there are incredible opportunities but you really need to be moving along in highly advanced program. We do use HM05, of course we do, but we use things in zap, we use a lot of things that we work in. But the idea is that the coding is all built on a very modular approach to building deliverables.

Heather: Yes well that’s really interesting and probably a conversation for another time, how to and where to find these coding people and what businesses actually want from them because I digress but I can’t imagine that the universities can possibly be teaching them what they need to know when they leave because everything seems to be evolving so fast that anything they’re teaching, by the time they graduate in 2 -3 year’s time will be 10 years old.

Peter: Again I can’t speak for anyone else but we’ve had an exceptional amount of success in recruiting people from Graz University’s graduate program in computer development and we actually bring them on as interns and they get to learn alongside our incredible teams. I mean our CTO actually came out of Yahoo. We stole them from Yahoo from its prime.

Heather: Very nice.

Peter: Yes so it’s an interesting challenge when we were moving into the United Kingdom we were actually invited there by the government, the United Kingdom Trade and Investment asked us can you please open offices here. I said okay so they put together a whirlwind tour of 6 cities in 5 days and the first 3 cities they kept taking us to were all the developer software companies who were …you know so we’re kind of in, the back areas and the old warehouses that were converted and finally by the third time I said, I really think you have to understand we’re not hiring any developers here. But aren’t you a software company? I said well yes but we’re really not hiring developers here. He said, “why not”. I said, “well you know I found our developer team, they have to live together. They can’t have remote, we’re getting them over there in Austria. You need to understand developers wear blue jeans and hoodies. We wear suits and live in the financial district. So it’s…everybody has their own approach. The market is huge, certainly the what I would call the consumer market, the small business market is large and there are a lot of opportunities for apps developers and that, but what we do is a little different and that’s why I said we were an overnight success 35 years in the making because it’s a consequence of not just what I learned how to do in helping businesses thrive but being very fortunate in finding some incredible teams of people to make up the company.

Heather: Yes absolutely, it does come down to the people that you can find. I know that I worked for a company, not like, I went in and consulted at a company, but they employed a person and her sole responsibility was to keep this double sided glass fronted fridge filled so the programmers would never go home. She just had to keep everything exciting, things happening in the fridge.

Peter: They do that at Bloomberg Television but they only do that with the free foods so they can force the people to work 15 hours a day.

Heather: Well it was just like they just won’t go home if they’re fed.

Peter: Yes my challenge is because of our employment laws our EU employees, let’s just say my other international employees are all begging for getting as much time off as my EU employees are.

Heather: Yes I think when we look at America, because America has 2 weeks standard holiday a year and we always find that quite unusual.

Peter: We don’t…we offer much more than that.

Heather: It’s interesting and especially in this global world and you must see it really well in that moving around the different countries the way things are just normal in different countries. Like why is this normal here and it must benefit you as well that you go, okay this normal is good I should take that back to my country. Whereas this normal is bad and they need what we’ve got in our country etc.

Peter: You could not have stated it better. It’s kind of like next Saturday I fly back to the UK for one week. Normally I wouldn’t go over to the UK for just one week but come December 2 pretty much the country is in holiday so I have to go back and do a 6 day trip and here I am again.

Heather: So Peter you co-authored a book called “The Golden Rules of Economics: The Real Way Out Of America’s Financial Crisis”-

Peter: -that was not a co-author that was mine and mine uniquely.

Heather: Oh that’s what on the bio so you authored a book, sorry. I’ll change that.

So how concerned should a small business owner be about macroeconomics and how should they navigate them?

Peter: Well again it kind of is a side bar along the way because of my original background in politics and my background in applied mathematics. I’ve been a very, very great student of global economics, macroeconomics, and I refuse to call myself an economist because I’d be insulting myself, but I think the big thing I’ve seen is that when people talk about economics or government a lot of times the people who have expertise in these things they talk way over the heads of regular people. The language is way too complicated so people get very, very confused. So what I did with the book was I kind of reduced it to 5th grade language so it really works so regular folk understand. So let me give an example. At the {0:47:48.8} should be deeply concerned because government policies and financial policies by global banking and the federal reserve board and so on, have massive effects on their lives and unless you’re active in making sure you elect people who have a certain amount of common sense and don’t buy into what the under informed do it’s going to radically affect your businesses. But just to give a simple example, if you say the word capitalism – what capitalism means to someone of more of a liberal lean is kind of greedy, large business taking advantage of regular people and frequently in collusion with government. But if you say it to a conservative to them capitalism means is trade. That people are free as much as possible to trade in an unencumbered fashion with others and so you throw this word out there and one part of the population thinks it means one thing and another part of the population thinks it means another thing. Now the fact of the matter is what the liberal branch is calling capitalism is not capitalism it’s actually mercantilism. It’s where government does get in collusion with big banks and big businesses determining who gets the advantages of the trade. The American Revolution was fought as a revolt against mercantilism from the United Kingdom. But the liberal wing the progressives, at least in the United States, have distorted the word capitalism. Now in the book I explain that I learned the definition of capitalism from my 3rd grade teacher, which is a funny story, but basically what she said is capitalism is the system of barter of trading in which all the trading partners believe they receive or equal or greater value in exchange for what they give up. And she said and this is not a theory, this is instinctive. Everybody does it. And of course some of them questioned her what, what, what. And so she asked one of the students in the class whose father was head of a Labor Union because he was revolting against such a statement, she said yes you are, no I’m not, yes you are, no I’m not and she says what’s a Mickey Mantle card worth, it’s a baseball card. He says two of Duke Sniders. So he instantly knew the value of the trade, you know, and it’s kind of like whoa, okay and what people mostly don’t understand there are a lot of times they’re engaged in trades that they have no control over. So what you pay for utilities, you might be able to shop for insurance but in some countries health insurance is not negotiable and basically the underlying contention is that governments real responsibility should be as much as possible to help make the trades fair. Not determine what the trades should be so that the conmen and the {0:50:55.9} and the mercantilists do not take advantage of anybody in the marketplace. Where the progressive wings and those that tend to be more socialist believe that you can better manage the distribution of capital through central control and that is so instinctively against how people are wired at their deepest points and I’m afraid that most people just don’t understand how it works, it’s the language manipulation and not understanding how the market is always efficient. You can have a government try to manipulate it but eventually it will blow up on them. Hence the collapse of the soviet union and now in this country the market blowing up in 2008-2009 was a consequence actually of regulatory law that the Clintons put into place which created a {0:51:45.5} collusion with the Fannie Mae and Freddie Mac when they were manipulating the housing industry markets and calling them triple A bonded things when they…a person could buy a house without proof of employment, can write down their wages and the banks would be forced to give them the loan which would immediately be sold to Freddie Mac and Fannie Mae and essentially because they had to and if they didn’t they were going to be sued on racial discrimination charges. So it created this huge artificial thing that was absolutely going to burst. Then 9/11 hit the government here was terrified that it would cause such a retraction in spending because of the concern that the federal reserve jumped in to make the money for free and almost liquid. That created the irrational exuberance. Eventually that couldn’t last. That’s what caused the blow up and unfortunately our government elected someone into the administration that does not have a sound understanding of economic policy. Either that or he is not even a Liberal, he might even be an anarchist. I’m not sure the policies very hard to figure out. But fortunately we have an election to market itself as efficient. Eventually when people have enough pain they scream and run in the other direction so we’ll see what happens. But I think a small business owner has a desperate need to understand how macroeconomics work and that was the purpose of the book.

Heather: Very good, very interesting. There’s two things. It always puzzles me when a politician gets in place when they actually have no qualifications over the portfolio that they’re assigned to, as you’re suggesting there and I really like what you said, don’t buy into what uninformed people do. Which is a good motto to live by in life. Sometimes you just kind of watch people going, why are you all doing that just because those people are doing that. It just doesn’t make any sense.

Peter: Well in pop culture in the States we call those people the under informed. They vote emotionally on things that have great buzz lines. Oh my gosh, what about the people. Well here the big challenge we’re having is with illegal immigrants, right. Well the liberals and some of the republicans, the democrats and some of the republicans want to give amnesty to all the illegals here. But the conservatives are saying we have laws, we have a country, yes we have to fix how you immigrate but you can’t just let people fly in without going through some set of standards otherwise we’re not a nation, we’re certainly not operating by the laws that are in the government currently. They don’t even force the current laws. So that’s what under informed people do. They go, oh those people are trying to escape poverty {0:54:45.9} and it feels really good but it’s actually economically and socio devastating.

Heather: Yes it’s sometimes hard when you place too much thought into it and you can see people moving in the wrong direction. How do we do this?

Peter: Yes.

Heather: So Peter thank you so much for talking with me today. I’m sure our listeners have really benefited from this conversation and they can go across to ProfitSee and find out more about your solution. We’ve learnt so much from you today. Thank you so much.

Peter: Heather you’re so delightful. The website is and I’m going to be actually in Australia right after, I think you have something called Australia Day in mid-

Heather: -that’s January 26-

Peter: -yes it is the 26th and I’m going to be over in Sydney and Melbourne from 27th to mid-February.

Heather: Oh you’re not coming in on Australia Day?

Peter: No, I know that’s because there’s nothing I could do that would be functional.

Heather: Oh but you should come…if you’re arriving in…if you come into Sydney on Australia Day it’s magnificent.

Peter: Okay I will let my PA know that so I can land to help you celebrate. But I will be out there next year.

Heather: If you do land in Sydney on Australia Day you can go out to the Harbour and all the tall ships will be out in the harbour and they’ll be massive fireworks demonstrations and it is very celebratory on Australia Day.

Peter: Heather I will need a companion so you’re going to have to help me out-

Heather: -fly down and spend some time with you. Sensational. Thank you very much.