LA Business Podcast

04. Sonia Luna, CEO, Aviva Spectrum

Sonia Luna LA Business Podcast
Share on facebook
Share on twitter
Share on linkedin

We talk about the cannabis business, metrics for growth, and best practices for ensuring your financial house is in order.

Intro: [00:00:00] Welcome to the LA business podcast, a form for business owners and senior executives to share the experiences about the elements that drive their success. Your host is Robert Brill, CEO of, an inc 500 company delivering the power of hyper-local advertising. Robert writes for Forbes, Inc, and Ad trade publications. Our goal is to bring you the stories about successes and failures of people who are making big things happen in marketing, entrepreneurship and management.

Robert Brill: [00:00:43] Hey everyone. Welcome back to the LA business podcast. today we have Sonia Luna. Sonia is one of the leading cannabis accounting experts in California. She’s a CEO and founder of Aviva Spectrum, a leading accounting compliance and consulting firm in Los Angeles. Sonia, thank you for being on the podcast today.

Sonia Luna: [00:01:04] Oh yeah, it’s a pleasure to be here. I’ve also had a quick background serving our country at the securities exchange commission as a strategic advisor for them, and I’m also a strategic advisor for a web joint and leading point of sale cannabis software company and an investor in cannabis under the Z product natural, which has a pure dedicated cannabis solution for sleep.

Robert Brill: [00:01:32] Wow. Okay, so let’s talk about that. How did, how did you get, how did you get into the cannabis space? I mean, we’re still in such early days here.

Sonia Luna: [00:01:42] I know, it’s hard to believe that the medical use only actually was around for 10 years before it got to be recreational use. I got in through a colleague, an attorney who had a dispensary client, and the numbers didn’t jive from what the operator was giving him. In other words, he knew the financial story of the dispensary was not adding up. Went in, took a look, did my own assessment, gave him my recommendations and the colleague, the attorney who represented this dispensary owner said, “look, not only can you dissect what’s going on, but you have a good way of articulating the findings and solutions to prevent a lot of the stuff that shouldn’t be going on in some of the cannabis dispensaries”.

He was actually the one that pushed me and said, “look, this space is rapidly growing. They need someone with your talent, your skill sets. You should really think about going after this market” and now it’s been three years and I’ve been dedicated to bringing this practice to Aviva Spectrum and growing it.

Robert Brill: [00:02:52] What was going on? Like you don’t have to give me too much details if you don’t want to, but what as an operator for a business, what was happening where the financial story wasn’t adding up.

Sonia Luna: [00:03:06] Yeah. So there’s a few things. in cannabis, it’s really hard for them to have bank accounts so a lot of it is cash, and there are a few cash controls you always want to have for the industry. One is having a cash receipts set of forms. That are in triplicate that go into, , when it goes to the counting, one goes, stays in the safe. The other one goes to a reporting manager.

Then you have another stack that is just for cash disbursements and they’re all pre-numbered, then you have a cash log and instituting those checks and balances. The things that I just described are critical, right? So you don’t just miss cash.

Number two is inventory stories. Okay. So. people may have what’s called sticky fingers.

Robert Brill: [00:03:59] Not to be confused with the sticky icky,

Sonia Luna: [00:04:05] Yeah, not, not the sticky icky, but sticky fingers with the icky stuff, which is the cannabis stuff. Inventory controls, not only from just a quantity, meaning how much of this stuff do I have? But also the turnover ratio, so for example, when I talk to business owners, I say, look, think of inventory, when you see the display case, I want you to think of stacks of $20 bills for each product. Okay? And it’s trapped in that bottle, or it’s trapped in that jar. Okay? It’s up to you to release it. So the older that money gets, the less it can buy. In other words, a dollar today can buy you more stuff. Than a dollar tomorrow, right?

So it’s their job to figure out what is the slowest moving stuff. Why do you still have it? And maybe it’s better to do a blowout sale, right? And get rid of it and continue to towards a brand that your consumers want. So let’s say it’s a product line by stiiizy or a product line by Papa and Barkley.  that instead of investing on these other brands that aren’t moving because the dollars are trapped you need to figure out what your purchasing manager’s doing, which is usually the shop owner or the manager on the floor, they have their favorite brands because they like it so you really have to go by objective data and figure out what’s the consumer wanting.

So that’s one financial story, is how are you releasing cash. Every time you buy a product in your store. The margins are good, but they’re not that great and the way to make money in this business because the tax is so high is it’s a volume based business. In other words, the effective rate for dispensaries, put into context is about 60% for, in other words, for every net income dollar you get, you’re getting rid of 60% of that dollar to the federal government. Then the rest goes to the state. Then you’re kind of left between 10 and maybe 20% of that money.

It’s crazy and when you do the numbers, it’s a volume based business, so you gotta get rid of this stuff every time you have it. You need to have a marketing strategy that you can almost predict the influx of orders for a particular type of product, meaning, , is it edibles or is it vape cartridges? What is it. But getting the science down is, not only is it critical because it needs to be a volume based business, but they need to figure out the math of how many times do I text message my consumers, can I hone in on the types of consumers that I should be? Text messaging. , how about outbound call strategy? I’ve asked that question several times and I can tell you hands down that there is no outbound call strategy.

Which I find it amazing and I’m like, well, think about it. Some of these people are actually patients. Can you imagine? I mean, some doctors are very reactive. Can you imagine being a cancer patient. They’re reactive. Doctors are reactive. They, they will wait until the patient calls them back. Can you imagine if you gave them a service and you call them back. Right? Without them knowing, yeah, just checking in

Robert Brill: [00:07:35] Like they’re paying for their health.

Sonia Luna: [00:07:37] Yeah. Hey, I know you came in the shop for ABC ailment, , I’m just checking in to see how things are going for you and , if it didn’t work out, we’d like to have you back at the shop for XYZ discount. We really want to make this work for you as a source of medicine,, if that’s their main purpose.

Right? So anyways, so that’s just when I see dispensaries I kind of ask them a lot of questions besides, , what types of inventories,  how often are you reordering? So there’s a whole slew of key performance indicators that I can go into in the conversation, but what I really enjoy as you can see is trying to figure out for that particular store what, what’s the neighborhood look like? How does the inventory play a role within the neighborhood?  Making sure that the dispensaries excel at what they want to do best, which is most of them really want to help other people.

Robert Brill: [00:08:36] Yeah. They’re nurturers.

Sonia Luna: [00:08:37] Yeah. They started the industry, especially those that had the pre-licensing. They were doing medical only, so a lot of their patient base was medical. Of course, there could have been some people that got a medical card that wasn’t really the main purpose, but by and large, when I’ve talked to the original, I’ll call them the “OG” medical guys, they were there for the patients primarily.

Robert Brill: [00:09:01] So over the course of your career, how long have you been doing this?

Sonia Luna: [00:09:07] So I’ve been dedicated to this in three years, but accounting controls, that’s been now over 18 years. So what I tell people is accounting has two main languages. Hey, so theres United States gap accounting rules, and then there’s international accounting rules. What I tell them is that it doesn’t matter if you’re a cannabis shop, you’re a mechanic shop, you’re manufacturing. I have to record the accounting number in one of those two languages. So I’ve dedicated my career in those languages. You follow what I’m getting at? So I can’t make up the ending number because there’s rules and guidelines I have to follow to get that number correct or where it needs to be.

Robert Brill: [00:09:59] When we talked on the phone, we talked about scaling businesses. So you have some really interesting points of view on ideas that I really haven’t heard before. Ideas on scaling businesses and,you’re involved in not the accounting of businesses exclusively, but like helping businesses grow. What are some of the ideas, what are some of the thoughts that you have around how businesses scale in the cannabis space and outside of the cannabis space? I mean, it was fascinating when we spoke.

Sonia Luna: [00:10:37] Yeah, thank you for that, well let me do the non-cannabis and I’ll get into the cannabis on scale. So non-cannabis clients. We have publicly traded companies, and I’m a consultant and I report typically to the CFO audit committee members. Sometimes the CEO and they outsource their internal audit function to us. So we audit their controls on the reporting side and we come up with a budget and the way I’ve talked to executives is don’t be afraid of the hard questions, which is, okay, well, when do you replace Aviva Spectrum with a full time employee?

Like at what point does it break even? You should actually have a full time position for this workload. Right?  I stick with a number and I say, lucky, you really want to look at the number 2000. Okay. In the payroll system for a full time person, there’s 2080 hours, but we all know that there could be some overtime and there’s going to be sick and vacation time, so by the time you increase and decrease, so increased for that OT and you decrease for the sick and vacation, you’re kind of left with 2000 hours. That’s what I tell people, like just to keep it simple, when you start reaching, when you, you’ve outsourced some function and you could probably guess that it’s 1100 to 1500 hours, that’s your tipping point.

Okay. That’s when you need to say, this is really kind of a full time position. I need to switch over and hire a full time person and the stuff that, the skill sets that, let’s say the consultant. Had in their project plan that was very, very specific. So in our case it might be IT auditing. So what I would tell them is, look, once we get to 1500 hours, you definitely need a full time person.

You’re going to carve out another 300 hours for that niche IT audit and still outsource that piece because it is very complicated. It’s not that simple. It’s not that straightforward. So, but now you have that full time person and now you can add on these other projects that maybe you guys never really got around to cause we always offer business best practices to our clients. So in other words, it opens the window of where else this other talent can be put in? Now let’s talk about cannabis.

In cannabis. So let’s just take, a manufacturer. So they’re dealing with, they’re kind of like the middle man between the cultivator and then the retailers. So they are converting the plant material into an oil typically, and then there, , it could be infused into other products or it could be put into vape cartridges, et cetera. But they’re kind of in the middle. What I’ve told manufacturers, because they are also very high engineering background, process driven, and when it comes to accounting, they think that, , let’s just outsource it, right?

I kind of take a step back and I go, well, let’s think about the function of accounting, right? So they’re very process driven people. I said, look, you think of it in three buckets. The bucket number one is your customer service, your revenue, your invoicing, your collections, your everything about revenue. Then you have another bucket, and that’s vendors. You’re keeping your supply chain happy, making sure things are running smoothly so you don’t over order certain supplies. you have everything in order just to do business. Then you have, a third bucket, and that’s called payroll in other words, timecards have to be submitted, reimbursement expenses, paying everything on a set schedule, cause you cannot be late and you’ve got to do tax returns, , payroll quarterly stuff and deposits and all of that.

When I break it into those three buckets, so when you tell me outsourcing accounting, remember accounting touches those three main buckets and if you want to outsource accounting for all three buckets, I can tell you payroll is so specific and tight in terms of deadlines and penalties. When you miss those deadlines, you’re better off outsourcing it to keep someone else accountable. If that person gets sick or you’re just for example, you’re starting up, you’re better off kind of outsourcing that from the get go because the people that I have worked with in the past have a deep bench. They have a deep bench of knowledge about labor laws. They have a deep bench about benefits. They have a deep bench. , can you imagine one account trying to be the best at knowing every single state law? It’s not even worth it right?

When I explained to him, I’m like, you’re better off for scale to outsource that piece so that way a report gets submitted to the accounting department and then they just kind of do a debit and credit and they’re, they’re done with payroll, right. They don’t have to worry about the checks being done or they get the report on how much cash to give each employee if they still have cash.

Now we’re left with the two other buckets, right? We’ve got sales and we got vendor payments, and so in vendor payments, I’d tell there’s a whole list of the activities. I show some executives to say, let’s just see how many suppliers are really helping your business grow.

If it’s under 10, it’s manageable by one person, right? If it’s the same or similar, 10 per month, you’re probably okay. You could have one person handle the general ledger books in the accounts payable and if your revenue is really coming from, let’s say, 10 or less supply clients, you’re also going to be good.

Where you need scale, okay. Is when they start exceeding 10. Okay and that’s kind of been my magic line that I’ve drawn because I’ve noticed things go haywire once you have more complexity. Then I say, okay, the next person you’re typically going to hire to separate out your client customer service and your compliance with taxes cause that that falls on the revenue stuff is it’s going to be your accounts payable person that you’re just going to have one dedicated AP because things get so complicated about who you’re buying from. What are the payment terms and then more importantly, I noticed manufacturers want to scale and go into a different location.

So that’s when I come in and I typically start honing in all the tasks, start assigning them time, like 15 minutes here or five minutes there, and then it starts becoming a reality for them that in order to scale their business, at some point there is a magic kind of rough range of numbers that they’re going to need another full time person just for it, let’s say AP. So the way I’ve seen scale for cannabis is the first step is convince them that they need outsourced payroll services. So that they can scale no matter what if they go from five employees to 25 employees, boom, they’re done.

Robert Brill: [00:17:23] So Sonia when you talk about payroll services, are you talking about Paychex and ADP, or is there something special for the cannabis industry?

Sonia Luna: [00:17:32] Yeah. Paychex and ADP are a little gun shy with the cannabis industry. There’s other players that have stepped up into the space that you can find. they’re usually local payroll providers and they can help you run the reports and the problem, or I’d say the bandaid solution when it comes to not having a bank account. Some of my clients will have to pay their employees in cash or through money orders, thats just kind of a pain all the way around, but it can be done. What that outsource provider does is  they’re the kind of the routine, a person that reminds everybody about timesheets, collects certain reports for reimbursements. It’s all that administrative tasks that you think, oh, it should only take a person an hour to do, but it’s not. It’s constant followup. T

Then the other advice I’ve given for scale on payroll is I’ve asked for those companies that like to reimburse their employees after they’ve used their own personal credit card to pay for stuff. Is to purchase an app like Expensify or something where they can take a picture of the receipt. It gets filtered into one email, like a payroll email, and then helps with scale meaning if you’ve got multiple people that are allowed to use certain, let’s say, charges it. If you have a limit, that’s okay.

It’s not sustainable, right? Until the banking issue in cannabis gets solved. Right? Can you imagine the exposure if you’ve got 25 employees all using their credit card, that’s not scalable. So I’ve told clients like, look, there should only be about five people max that should ever be using their credit card for company purchases.

There should be never a need where like, it’s such an emergency that somebody has got to use their credit card to purchase something, that’s excluding a sales reps that are on the road. I mean, they’re kind of the exception rather than the rule, but honestly, that’s how I think about scale for cannabis companies is, okay, what industry are you in? How many, what’s the volume of activity you have on the revenue side, meaning the unique number of customers, and then the unique number of vendors, and then I just strip away and do the basic math like this. This should be a typical day of an AP person. This should be a typical day of a person that’s supporting the sales department and the marketing department.

Then once I do the math, it becomes very clear. I’m like, look, this position is at least a thousand hours, you at this point needs at least a part time person coming in two to three days a week and then if you continue to grow by the time you reach, usually six months out, or I give them some type of forecast.

You gotta tell this individual that this is part time today, but in six months we want to make you full time. I think that would attract a part time person that has the talent to stay with a company, to stick it out and if you hit your numbers, you’re definitely gonna need them full time anyways.

So, that’s just a few ways that I’ve kind of guided clients on scale with people and it just comes down to what I would call like common sense math. Like you can’t really argue with me if I tell you the accounts payable person is responsible for getting W-9s, right? Because they know they have that. Okay. Well, how many brand new vendors are coming on board every month, right? Can you imagine being the pain in the butt person? Like trying to track down that W-9.

Robert Brill: [00:21:13] Well, and having the organization to even to make that happen. Like if you don’t have someone dedicated to it, it’s never going to happen. Let me ask you a question. How has your business grown over the last three years as you’ve invested in the cannabis space? Is it word of mouth? Do you do any marketing, like how have you scaled?

Sonia Luna: [00:21:36] Yeah. We’ve scaled by using experienced consultants in the space, we have three. We started with just me exploring the space, and now we have three experienced associates with us and the leads has primarily been word of mouth. These are typically attorneys, so we along time ago we figured out how do you score your ideal client, and then how do you score your ideal referral and that’s scoring, meaning win them over.

It was an analysis that we did, we took quantitative and then qualitative characteristics of what is our ideal customer and then we looked at it from internal audit and then we looked at it from cannabis. So just to share, yes. For cannabis, we said, look, if they’ve got VC backing, it doesn’t have to be premier VC cause most premier venture capitals are not even touching the cannabis space. So that’s just not going to happen.  Goldman Sachs is not in it like directly. but some of the other local ones are okay. So we’re looking at, let’s say we want somebody to have at least 1 million to 5 million in a, I’ll call it a war chest of cash.

Right? Because if they have less than that, what we’ve found is they may not appreciate the caliber of service that we’re going to offer and they might be better off with somebody that’s, let’s say, I’ll call them the one man shows, right? They work out of their home office and they’re dedicated. They can probably take, I dunno, four or five clients or maybe six clients a year so that might be beneficial for that particular start up cannabis company.

So one is we’re trained to define how much of a war chest is really our ideal client and then the other is number of employees we like to get in before they hit 50 employees and the reason why we say that is once they hit 50 they probably need a full time CFO. I mean, just the complexity with 50 employees or greater, it gets pretty high.

That’s, that’s when you need somebody like really honing in on forecasting, coming up with strategic plans on sales and marketing, coming up with strategic plans with vendor payments. They’re probably going to deal with, legal related projects. Tax-related projects is another huge area where it’s just like mini projects that they’re going to be doing once they reach that 50 employees.

So if I had to share like two key financial number type metrics of ideal, that would be it. Meaning there are less than 50 employees. They have a decent war chest for as a startup. Then they’re working with our ideal referrals and that’s another category we created.

So our ideal referrals, same kind of analysis, we pick two major numbers that make sense for us, like for ideal referrals. We first identify them as attorneys, but then we also figured out, well. The attorneys that are really connected to VCs locally, they usually have more than one office.

That was a key indicator for us is a law firm that has multiple offices. They have a location here in LA. They have one in New York. They have one in Washington or wherever. That is so critical because we have learned that the single law firm office usually doesn’t network with the mid tier VCs for some reason and if they do, I think they are an outlier. Yeah. I think they’re a pure outlier for just that reason alone because I just haven’t found a single office person work hard with a bunch of VCs. It’s usually mid tier firms that have multiple offices,  that has been a key indicator for us.

The second indicator. We’ve been using LinkedIn like crazy. So I’ve noticed that the more mutual connections I have with that law firm or the people that work there. I can get, for example, well over 50 mutual connections and once I hit that threshold, I kind of feel like we’re running in the same circles. It just takes one of us to be proactive and just introduce ourselves. Right? Like either they to me or vice versa, me to them. But that’s another metric that I’ve used and it’s been pretty successful in me booking meetings.

Robert Brill: [00:26:49] So that’s fascinating to me because I’m talking to people who need help developing a business plan or developing a strategic marketing practice or plan and the first thing I tell them is, know who your customers are and know the data signals that you need in order to reach them, and that’s exactly what you’ve described. How long did it take you to identify these signals as the key indicators for you?

Sonia Luna: [00:27:32] We got that about maybe four years ago. We started on this path and then we rank characteristics like, ideal is like A, below that is B, and then C, and then everything else under C. We just, we don’t even bother with it because they, they are going to be serviced by better firms that deal with that type of clientele. So within those characteristics that they just mentioned, we try to figure out A, B and C, and we market to them very similarly because they’re kind of in the same bucket, meaning our ideal referrals, if they’re attorneys, the messaging is very similar. Hopefully based on the training that you and I took for the bank code, we’re going to augment that, right? We’re at the infancy stage, and that’s one of the things that I wanted to do. My takeaway is, online marketing to figure out on LinkedIn, since we’re such heavy users of LinkedIn is dissecting like, what’s the messaging with this person in my ideal law firm.

Like how much faster can I get that meeting besides the messaging I’ve been doing, which is, Hey, you and I both know five mutual people and naming them, right. Or I used to use my, a script that I would do regularly that worked beautifully was, I would have lunch with somebody. Let’s say it’s a common person in the space, the cannabis space. I usually would take a picture after our lunch and then I’d go in their profile and then I look up at five people that I want to influence. Right? Like I don’t know them that well, but I think that they should be on my radar because they have, let’s say, over 500 connections, or in LA, they might be in cannabis and there are mutual connection, but I’ve never met them.

I’m like, Hey, I just had lunch with so-and-so, it looks like we’re running in the same circles, blah, blah, blah and then I attach that picture and nine times out of 10, I’d get a reaction. Like, Oh yeah, I know him from so-and-so or we used to work together or something, and then as long as I got the dialogue going, I would offer up like, Hey, maybe we should get on a call. Cause for me. Spending 15 minutes on the phone is super easy and fast. It’s my lunches that in LA traffic, I don’t know how you budget your time, but every time I book a lunch, I know it’s at least a one and a half hour commitment.

Yeah. So it’s one and a half hours plus 30 minutes to get there and then I’d always put 30 minutes post lunch. So right there you could be blocking up to three hours. I’m like, dang, what if I could just do 15 minute increments of calls and I’ve put a bug in somebody’s ear and I probably can do a direct mail with them without them forgetting about what I do. So that’s, I’ll call it phase two of our approach is we believe that direct mail is not dead. It’s how you use it.

Robert Brill: [00:31:03] I love that you’re calling your direct mail. So let’s talk about bank training. You and I met at a two day training over the weekend, a couple of weeks ago at the LAX Sheraton the training was with Cheri Tree and it’s called bank and bank is an acronym for four things. Blueprint. Action, Nurture Knowledge. So the training is really about the ideas, and the values that people have in the ways that they communicate.

The way it’s set up is, people have different communication styles and patterns almost to the point where it’s like they’re speaking different languages and I’ll share my bank code. It’s Action, Knowledge, Blueprint, Nurture, and action means that  I’m really interested in freedom, spontaneity, and flexibility and knowledge is really focused on getting to the every last detail of something in order to make a decision and also to have the big picture.

What’s fascinating about this is it totally is a way to understand what people want out of a communication to better serve them and to save both parties time and there’s an AI, where you can use this bank training to understand the code that the person is who you’re about to communicate with and you can speak to them in that code.

Sonia Luna: [00:32:46] It’s like learning another language and I’ve tried it. I’m not great at it of course, I feel like I’m totally taking baby steps, but it resonated with me. I mean, did it resonate with you after the training?

Robert Brill: [00:33:01] There’s someone who I work with, not as an employee, but we do consulting work together and I emailed with him and it was like an aha moment when I saw his code and just emailed him three very simple lines and what’s funny about it, and I told this to my wife, is that his emails to like lots of people on an email chain are not just a sentence in a subject line, but abbreviations of words in the subject line.

Sonia Luna: [00:33:38] He cannot be bothered by actually typing in any vowels or anything.

Robert Brill: [00:33:43] Yeah, totally! Yep, that’s an action person for you and I love it. It’s like when I realized that I started laughing, it was so funny.

Sonia Luna: [00:33:56] With actions, what I’m trying to learn is cause my code is, Knowledge and Blueprint are even, then Action and Nurture our event, but it goes to action, nurture, and like what you’re describing, this guy I’m trying to add in the word, crush it, or I’m trying to add in a word like let’s blow it up, or like, I’m on it!

Robert Brill: [00:34:27] I think it’s just brevity. Like the email is like one or two lines and that’s it. But, it’s interesting, I’m even having conversations with people with other people and someone didn’t even ask for it, but I could just tell they wanted the plan, they want the blueprint. So I wrote down 10 steps to go from where we are today to where we need to go and the response was, Robert, this is fantastic, thanks.  So the point is you’re using this bank training to influence the way you’re communicating with the people who you’re reaching out to for the first time on LinkedIn, and do you feel like it’s a good process for you?

Sonia Luna: [00:35:19] So it is, I think it’s a, easier process and it also. Well, first off, I want to say that I’m slow and I’ll tell, and the, the source of why I’m slow is I know I overthink things. That’s the high K  personality, which is knowledge. I will revisit a sentence structure just to see if I’ve got a lot of points in those bank cards that we were given. I’m like, look, all I need to do is look up that word. What’s a synonym? Or what’s the verb for that? Or you follow what I’m getting at? So I just need to add a little sprinkle and that’s the messaging for this person that I think is like a high K or whatever I think they may be.

Most of the CEOs, this is like, a lot of them are high A’s. They talk about sales growth and like what they did and just really big, big old stuff which is great and they’re, I think they’re the easiest one for me to write to, but everybody else, because if I’m going after attorneys because they have the client base that I want the referral and every time we get a referral, by the way, we shorten our sales cycle by at least by half every time we get referred in by someone else.

Whether that’s sometimes we get referred in for our internal audit practice by audit partners and whenever we get referred by a value, centric kind of professional like an another accounting firm or a law firm we get in so much faster and close the deal so much faster. So for me, it’s actually worth it to cultivate those relationships because honestly, sometimes I don’t know when my next deal is going to come, but so far, every week we have like a lead coming in. It’s been an inbound lead, inbound lead and so what we’re hoping to do with the bag is let’s start nurturing and really honing in our skill sets on the outbound and just make it super strategic.

So we don’t need super high volume, but what we do is lower volume, but super high quality and that’s what we’re banking on. We’re kind of speculating that that’s the best thing to do and what we’re doing is, or what I’m doing right now, just for my own. knowledge and also to measure success and failure is, I’m putting some of the scripts in my OneNote. Right? So I have these LinkedIn scripts for, okay, what’s my outbound script for this? This is my main goal. I want to get a phone call. What’s my outbound script for, do we have a mutual connection. Let’s the three of us have lunch. You follow what I’m getting at? Let’s see the reaction and if I book those meetings and then therefore I don’t feel like I have to reinvent the wheel as long as I got the meat of the outbound script okay, knowing that most attorneys are Ks and some nurturing, right? Because we learned that, That’s great. Right? and I can kind of kind of tailor it to, to that ideal quote referral.

But then when I train other people, my associates, I’m going to say, look, we all need to be trained on this. We’ve had access to the vault. Let’s go in it now. So instead of you having to reinvent the wheel, I know the script has worked for me. Yeah, let’s say 70% of the time or 80% of the time or whatever, that way I think we kind of all learn. Like eventually when we have our monthly meetings, we all get together and go, what’s been working? What’s not been working? How do we leverage this new information? So, I want to get it down to a science because you can give people enough information that they don’t feel like they’re hanging,  and they’re trying to figure stuff out. If you figured out 70% of what needs to happen, and they just got to add in their 30% for their own talent or the way they like to do it you’re golden for scale, right?

So that’s why we use, or we’re leveraging, something like one note capture. Okay, what’s really been working, and we obviously use a. We use a CRM tool that keeps track of the emails that we send out and all of that, and it associates it with the contact. So once we get those meetings, we can run reports and go, okay, this is what’s actually working.

Robert Brill: [00:40:07] Sonia, what  I really like about this is you’re essentially deploying a lot of the sort of test and learn methods that we deploy for our advertising campaigns. If you create a hundred ads, I don’t know which ones are going to do the best. I might have a thesis, but you don’t have to know it. You got to look at the data and let the data tell you which way to go. I think it’s really interesting that you’re very much a marketer for your business and the methodology that’s necessary to ascertain the learnings. I think that’s really interesting.

Sonia Luna: [00:40:50] Yeah, I joined a board of a public company. It’s called life on earth, and we were having dinner with the executive team and other board members and what’s interesting is people are like, are you sure you’re an accountant? Because you kind of talk like a marketing person. We are selling ourselves at every opportunity we can get, we take it to sell, right? So, I was telling my wife and I’m like, God, if I could only find another me, then this thing would blow up in LA. She’s just like, you have to understand, accountants just don’t want to sell, most of them just want to do the work, be the technical person and they like that nurturing with the client. But to go out there and like, I’ve been on TV and then I had a podcast and then I put stuff on YouTube. You follow what I’m getting at it? It’s so overwhelming.

Robert Brill: [00:41:51] I really liked this bit of advice. Like we’re all in the media business first and we are secondarily the thing that you do to make money. You’re secondarily an accountant. Secondarily, a business owner, secondarily, a cannabis shop owner, secondarily, a manufacturer of cups, whatever the thing is. But the first thing we have to do is be the person that commands attention and the way you command attention is by using the tools of our time well, to command the attention of the people who are important to us as business owners and the way you do that is by giving knowledge, giving value, doing the things that humans have been doing for centuries, which is engaging and being a value added communicator.

When you do that, a lot of things open up just because you are giving valuable knowledge and information. I mean, humans succeed because we share stories with each other.

Sonia Luna: [00:43:01] Absolutely. I mean, remember our society was at first a barter system, right? I have something of value, that I can give, even though it may not be a monetary exchange, some of it’s just a connection exchange, right? I try to do my best whenever I leave a lunch appointment in particular, cause it’s face to face, now that we’ve discovered what your passion is, what my passion is, how can I help you? Like, what is it that you’re in need of? I don’t want necessarily their business that day, they might be looking for talent themselves, or they’re looking for a good referral for insurance.

It’s surprising how much I can help without having to feel like I gotta get something back in return. But I’ll tell you what I’ve noticed is that every time I’ve done that, and let’s say down the road, they’re connected to somebody, them picking up the phone for me, because I’ve helped them out is so much easier. It’s easier for me to pick up the phone, that’s the other part I’ve noticed. My associates sometimes are a little hesitant for picking up the phone and trying to get a live conversation because of the fear of rejection. Can you imagine if you’ve helped someone else, your fear of rejection because “they’re too busy, they won’t get back to me, or   they’re too important, or they’re really at this really nice, prestigious firm and like, who am I to like bug them for a favor right now?” and that kind of melts away when you start offering something of value that doesn’t necessarily have to be money, but something that could help them down the road.

Whether that’s a relationship typically or, it’s usually a relationship or contact. Sometimes it’s a resource, we’ve done white papers and we’ve done other eBooks on taxes because cannabis taxing is so complicated. Just sending that information going, Hey, here’s a cheat sheet for you, if you ever need it, you can open it up.

Robert Brill: [00:45:11] So, speaking of rejection, I met someone in October his name is Jia Jiang,  he has a Ted talk and he was on NPR and has a book called rejection proof. His entire thing is about rejection therapy, doing ridiculous things with the objective of getting rejected and, I saw him speak at the Inc 5000 conference and the outcome of his experiences were that people will actually go above and beyond for you to help you because they’re good people and they want to help you. A lot of people will say no and tell you to piss off, but a lot of them will surprisingly go out of their way to do the most ridiculous things just because it’s helpful and what I think is interesting about that experience he shared is that what you end up finding by looking at rejection therapy or doing these ridiculous things, is that you find something within yourself that helps you pull through the moment and actually get something to go where you need to go, either through multiple amounts of rejection, but more importantly, through the things you conjure that get you to inspire and motivate someone.

Sonia Luna: [00:46:33] Nice. I love that analysis and I think about people that had to do, for example, door to door sales. I mean, talking about the ultimate training for rejection. I mean, today you rarely see people going door to door but  the rejection therapy concept just allows you to debunk what you initially thought, which is,”Oh, I’m going to get rejected every single time.” Cause then you find these opportunities, these opportunities, if you keep asking, even though they’re ridiculous, every once in a while you’re going to get somebody that is willing, genuinely to help you.

So it kind of gives you hope that, okay, this really isn’t that hard, and of course, with our BANK training, we don’t want to be going after somebody and not speaking their language and now, once we understand their language, I think that rejection rate is going to go lower and lower and lower.

I’ve taken a Stanler training course and other courses in sales and one thing that we didn’t really hone in on was the pain factor. Right? Like Sandler is very key in their training that if there is no pain, there really is no need for you. it’s very intuitive, right? Like, if I don’t have a need or a pain related to account, me calling them now, I’m going to get rejected, but not for the rejection of my scripting, the way I’m talking to them in their code. It’s just the pain isn’t real to them and therefore it’s not really me, it’s just their situation.

With the bank training, we wanted to kind of hone in on that and then we’re going to add in and sprinkle with the Sandler training, which is, there’s gotta be some fundamental pain, right? Because people don’t want to spend their money on something that they don’t feel like they have a pain if the pain doesn’t exist. So we’re going to kind of bridge those two together as we’re going through this , hopefully we’ll get a higher percentage of, not only acceptance, but also see that rejection rate go lower and lower every time we do make a call.

Robert Brill: [00:49:06] Sonia, in the final moment of this podcast can you touch on briefly, when you see a cannabis business, you’re an investor, you’re on boards. What characteristics do you see or do you identify where you see, okay, this business looks like it’s going to go really well, or alternatively you see a business and it seems like they’re not going to do well because of these fundamental issues. Like are there any indicators or signals that you rely upon.

Sonia Luna: [00:49:38] Oh my gosh. Yeah, absolutely. So, I’ve done several due diligence deals, and I’m still working on a few. So just to put into context, let’s say it’s a dispensary, right? I said that it’s a volume based business because their tax rate is so high. So one metric is I’m looking at revenue and then the percentage of sales activities are putting in to get that revenue. So if I see less than, let’s put a ridiculous number, if I see advertising, your spend for one month is 1% of your total revenue, something’s wrong.

Meaning, I think you’re either overly cocky that month and you think that, Oh, I just spent 1% of my total revenue in advertisement, patients keep coming in, we had new enrollments. people are assigning left and right on our loyalty program, it’s going to bite them in the butt down the road if they keep doing 1%

Robert Brill: [00:50:37] Is that high or low?

Sonia Luna: [00:50:39] It’s super low. It should be between 5 and 10% of your revenue. Now, I’m giving a wide range right now, right? But if I see it at 1% I can already tell. Tell them like, this is not enough. Right? You’re gaining steam and you’re seeing the revenue, and you’re getting super cocky and not spending enough as a percentage of your revenue and advertisement.

You need more because people will forget you. There’s deals  everywhere around, these other shops and some of them happen to be, unfortunately, illegal shops, but that’s one key indicator. So if I were to tell someone, like a takeaway from this podcast is, as an investor, as a, person that evaluates deals, I’ve got to see at least 5% or higher in advertisement meaning marketing dollars spent per month related to your revenue. That’s one. For sure. Easy, easy takeaway,  and then the second item that I ask them is, tell me about the metrics you guys evaluate every week. You’ve got evaluate every week and as the manager walks me through metrics, sometimes it’s like how many new patients we got in, blah, blah, blah. They’re all, what I call lag measures, right? It’s after the fact, and then I ask them, okay, what’s your primary lead measure that you measure every week? If I get a look like, huh, I don’t know what you’re talking about, or can you explain that?

I’ll say, well, you have, let’s say brand new patients coming in this week and you measure thats 10 what is the source of the 10 coming in the door? Like is it a friend that referred them to, okay, great. What is the lead measure you’re doing for those referrals? If that’s really the main source. In other words, are you doing outbound calls to them?

Are you giving them any extra points and text messaging them that they’ve got these extra points because they brought their friend over. That’s called a lead measure rather than a lag. Lag is it’s been done. A lead is, I’m doing something proactive because something else happened and I know this is the source of my revenue and I need more of it.

So for every refered patient in, my lead measure is a text message goes out to that referral saying “Hey, thanks Joseph, your friend came over. We’ve given you 10 extra points on your loyalty program for that. We want to thank you and want to take care of your friend, and then some type of closing message or what have you, right? So I think there’s lag measurements and then lead measurement. So for retailers, I mean, this is another takeaway, is all you need is one or two lead measures of the things that you’re measuring weekly and they think like, Oh no, it can’t be that simple. I’m like, yes, no, it’s actually that simple.

We will see higher revenue growth on figuring out like, well, if we’re measuring new patients, how are we getting those new patients? If it’s really referrals, then honing in on those referrals, what are you going to do for them? Right? So there’s got to be a reaction.

Robert Brill: [00:54:06] So a lot of this seems like knowing why and how your customers are coming in, like where they’re coming in from.

Sonia Luna: [00:54:12] Exactly.

Robert Brill: [00:54:16] Well. That’s fascinating. So Sonia, I think it’s time to finish  the podcast Can you let people know where they can find you? What’s your website? What are your social media handles?

Sonia Luna: [00:54:30] Yeah, they can find us over at, on Instagram. It’s also AvivaSpectrum, we’re on tiktok, AvivaSpectrum as well. Check out our YouTube videos. We have regular updates as well on YouTube, under Aviva spectrum.

Robert Brill: [00:54:50] Very good. Thank you so much, Sonia.

Sonia Luna: [00:54:52] Thank you, Robert. Thanks for having me.

Share this episode with your friends

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Recent Episodes


Intro Music: Echegoyen Productions

Created By: Brill Media