The Void #6 ** Core Episode ** Systems and Processes (3 of 3) – Jan 22, 2021

In this episode, we’ll discuss the differences between an LLC or an S-Corp. Once you understand the differences between them, you’ll be able to select the status that will work best for you. We’ll also discuss what Key Performance indicators are and how to track them. These metrics are the dials you can turn if you need to adjust the performance of your business. Tune in and enjoy the show!

SHOW LESS

00:00
[Music]
00:04
hey everybody and welcome to the void a
00:06
show dedicated to filling the void
00:08
between being an employee and becoming
00:10
self-employed most people refer to
00:12
starting your own company as taking the
00:14
leap as if they are blindly jumping off
00:16
a cliff and into the unknown
00:18
this show is here to help show you that
00:19
it doesn’t have to be that way at all
00:22
i’ll share with you the process i use
00:23
for starting my own company and you too
00:25
can soon be on your way to starting your
00:28
own service based company we’ll work
00:30
through some common issues that are
00:32
preventing you from starting your own
00:33
company and filling your own true
00:35
potential
00:36
as always if you like what you’re
00:38
hearing on the show
00:40
please do us a favor and help share the
00:42
void with someone else who you might
00:44
think also wants to start their own
00:46
company we saw an opportunity to help
00:48
others understand that self-employment
00:50
is well within your reach and just as
00:52
our businesses have grown organically
00:54
and by word of mouth we want this show
00:56
to grow in the same way it takes two
00:59
things for that to happen we have to
01:01
provide you with great information and
01:02
great content and you have to help share
01:05
our valuable message
01:07
we know that many of you are out there
01:08
on different social media groups for
01:10
your various trades or skills or crafts
01:12
and those groups are begging for this
01:14
kind of info virtually every day so if
01:16
you see somebody asking questions about
01:18
starting their own service based
01:20
business please do us a favor and drop a
01:22
link to the show in the comments on
01:24
those posts i’m your host mitch smedley
01:28
and which with me as always is david
01:30
hilton mitch what’s going on man what’s
01:31
going on doing pretty good i’m feeling
01:33
great i’m good marcus i’m great mr
01:36
producer marcus what’s going on this
01:37
morning bud how’s it going good man
01:40
marcus is cold he’s going i am freezing
01:42
in here he’s got yeah a hoodie
01:44
a coat yeah a beanie our studio is
01:47
thinking about breaking out the gloves
01:48
to be questionable at times it’s
01:50
the temperature is not i didn’t put the
01:52
heating and cooling in in this one i
01:54
probably should have uh you know so but
01:56
that’s okay
01:57
full full disclosure here our studio is
02:00
in a storage room above my garage it’s
02:02
got its own heating and cooling system
02:04
however right now it’s about 10 degrees
02:06
outside so our garage is pretty cold
02:09
yeah getting the getting the studio
02:10
temperature on the point can be a little
02:12
bit challenging i’m not showing them
02:13
so i’m good
02:15
we’re not answering it you’re not too
02:17
cold
02:19
in the last show we talked about
02:20
quickbooks and banking and accounting
02:22
and uh we also talked about behaving
02:24
like the customer that you want for your
02:26
business yeah before we dive into
02:28
today’s show does anybody have any
02:29
questions about last week’s
02:31
no i’d like to go over you know just the
02:33
regular adversities yeah where this is
02:36
going to be the last episode of the
02:38
third preparation adversity
02:41
yeah so so we’ve got we’ve got three
02:43
preparation steps that we’ve prepared
02:45
for you and those were you know we’ve
02:47
already been over them yeah one’s
02:48
personal finance prep that’s episode one
02:50
and two business finance prep episode
02:53
three
02:54
system prep episode four five and six
02:56
we’re on episode six right now yep okay
02:59
and those are just the preparation
03:01
adversities getting you ready to start
03:03
the company yep okay after you start it
03:05
you’re ready to go then it’s beginning
03:07
adversities
03:08
uh four
03:10
community involvement work step four
03:13
episode seven episode seven it it’s a
03:15
little confusing that’s why we bring it
03:18
up every time okay number five uh wake
03:21
up do work repeat that’s step five
03:24
episode eight yes and then six is
03:26
evaluate performance make adjustments
03:28
and improve that’ll be the final uh
03:31
episode of the adversity group and
03:33
that’ll be episode nine yep so the first
03:36
nine episodes of this show are going to
03:37
be titled core adversities and they’re
03:39
going to be kind of lumped together and
03:42
so if you’re if you’re just now tuning
03:44
into the show you’re going to want to go
03:45
back and listen to the first nine
03:46
episodes in order
03:48
um let’s say you’re tuning into this
03:50
show way down the road you can listen to
03:53
those first nine episodes and then kind
03:54
of jump back in wherever you don’t
03:56
necessarily have to go listen to every
03:58
episode i mean we’d like you to yeah you
04:00
totally could i mean
04:01
we’re not making money off any of the
04:02
episodes but right you know we have our
04:05
egos are you know there’s some ego there
04:06
it’d be nice if you’d go back and listen
04:08
to those we’d appreciate it we we just
04:10
knew early on that we needed to organize
04:12
this in a fashion to where you don’t
04:13
feel like you have to play catch up and
04:15
listen to every episode out there but
04:16
you do need to listen to those first
04:18
nine for sure yep so um on today’s show
04:22
we’re going to talk about llcs and
04:24
s-corps and sole proprietorships we’re
04:26
also going to talk about setting up some
04:29
of the tracking mechanisms that you’re
04:31
going to be using later some more of
04:33
those systems prep yeah this is this is
04:35
setting up so one system is how your
04:37
business is going to operate from that’s
04:39
your your filing status your llc or s
04:41
corp or whatever
04:43
another system that we’re working on
04:44
today is setting up how you’re going to
04:46
track your performance later so once you
04:49
start your business you’re going to need
04:51
to be tracking your performance but
04:52
before we start the business we have to
04:54
set up those tracking mechanisms today
04:57
and we need to do that because
04:59
hopefully when you take off you’re going
05:02
to be so busy doing work and doing those
05:04
things you don’t want to have to be
05:06
trying to fumble around with setting up
05:08
those systems yeah you know to help you
05:11
so yeah
05:12
you want to get those done first yeah
05:14
and the last thing we’re going to talk
05:15
about today is uh we’re going to talk
05:17
about uh trashing your fellow
05:20
tradespeople or your competition and
05:22
we’re going to talk about some of the
05:23
bad things that can come when you start
05:26
trashing some of your competitions
05:28
that’s being professional that’s uh
05:29
being a good salesman it’s not just
05:31
about
05:32
don’t talk smack right right it’s more
05:35
millionaire mindset type of stuff so uh
05:38
starting off
05:40
sole proprietorship
05:41
llc
05:42
or s corp what is going to be best for
05:45
you well let’s say right now there are
05:47
more than that
05:48
that’s what we’re focusing on because
05:50
we’re into the small business starting
05:52
out and those are the ones that fit that
05:54
criteria the best yeah you’re not going
05:56
to you’re not going to make the switch
05:57
from self-employed or from employee to
05:59
self-employed and go right into c-corp
06:02
that’s that’s more entrepreneurial type
06:04
stuff that’s more big giant business
06:07
venture
06:08
venture capitalists where you’re seeking
06:09
investors and all that that’s that’s a
06:11
whole different ball game that’s not us
06:13
from you working for somebody to working
06:14
for yourself and you can get to that
06:16
yeah oh yeah this is this can be a plot
06:18
your your llc can be a platform for you
06:20
to go anywhere yep absolutely um
06:24
obviously
06:25
the legal answer to everything that
06:27
we’re going to talk about here is
06:28
contact your tax professional
06:31
we’re not known for being too official
06:34
so we’re gonna blend
06:36
that with some of our own life
06:38
experiences of what worked best for us
06:40
and you should always we’re gonna we’re
06:42
gonna give you
06:43
questions to ask your tax professional
06:46
right what you know
06:48
and we’re going to do the first initial
06:50
breaking down
06:52
of those things because a lot of people
06:54
think when you when you go to someone
06:55
and you say uh sole proprietor llc s
06:58
corp they immediately have this fog
07:01
we’re going to try to break that fog
07:02
down a little ways yeah so that then you
07:04
can go to your accountant and say
07:07
okay
07:08
i know that i could do this or this
07:10
these are going to fit me the best yeah
07:12
but what is the exact answer and which
07:15
way do i need to go yeah my accountant
07:18
has often told me that he wishes more of
07:20
his clients had a better understanding
07:22
of taxes like i do now i’m not a tax
07:25
professional i know just enough about
07:27
taxes to ask the right questions yes i
07:30
let my tax guy do all of the the smart
07:32
work and you just did pre-research yeah
07:34
and we’re breaking down that
07:36
pre-research yeah to get you there
07:38
exactly we’re going to clear that fog a
07:39
little bit so that you too can ask the
07:41
right questions to your tax
07:42
professionals so um
07:45
first off let’s hit up sole
07:46
proprietorships
07:48
i am not familiar with any platform
07:50
where a sole proprietorship would be a
07:52
good option um that doesn’t mean they’re
07:54
not out there uh obviously they’re out
07:56
there because people do it but um the
07:59
biggest downfall is there is no limited
08:02
liability protection against you as a
08:04
person yeah so so for these type of
08:07
companies
08:08
it does it
08:09
99 of the time it doesn’t work
08:12
uh
08:13
for us yeah
08:15
you’re
08:16
um if if somebody with a sole
08:17
proprietorship if somebody tries to sue
08:19
your business they’re also suing you yes
08:21
and that is not good right you don’t
08:23
want to lose your house because somebody
08:24
sued your business you know and
08:26
and you might think oh well everyone all
08:28
everyone ever says is llc llc llc well
08:31
there’s a reason it works yeah okay and
08:33
it works so again we’re not saying don’t
08:35
do sole proprietor we’re just saying
08:37
that for the types of businesses that
08:39
we’ve had it was definitely not an
08:40
option for us so
08:42
now llc versus s-corp oh man
08:45
the biggest so both of them offer you
08:48
protections per like to separate your
08:50
personal finances away from your
08:51
business finances yes
08:53
the biggest difference between an llc
08:56
and an s corp is
08:58
uh the amount of money
09:01
the biggest difference that’s going to
09:02
make you choose one or the other is the
09:03
amount of money that you are making
09:06
um and why is that uh well an s corp is
09:10
a corporation and filing corporate taxes
09:14
costs a lot more money than filing
09:17
personal taxes an llc is a pass-through
09:20
entity which means all of this money
09:23
you’re making on the business passes
09:25
through the business and onto your
09:26
personal finances and so filing personal
09:30
taxes is cheaper than filing corporate
09:32
taxes and so what happens is as an llc
09:38
um you’re you’re paying a cheaper tax
09:40
filing amount your accountant’s charging
09:42
you less
09:43
well eventually you start making enough
09:45
money where
09:47
you could actually file as a corporation
09:49
and save yourself some tax money but you
09:51
got to make so much in order for that to
09:53
even like teeter-totter and flip the
09:55
scale yeah and an escort i mean
09:58
the taxes pass through to you
10:00
um but in a different way yeah so um
10:05
as an llc
10:07
anything that shows as net profit you’re
10:09
paying taxes on that as personal income
10:11
yes so even if you think in your mind’s
10:14
eye
10:15
i’m gonna save
10:17
this money this is not going to be my
10:19
money this is going to be the business’s
10:21
money well if you’re an llc you’re
10:23
paying taxes on that money yep now if
10:25
you’re an s corp you’re only you can you
10:27
are allowed uh different tax liabilities
10:30
to say hey no i’m going to take that
10:32
money and that’s going to be for future
10:34
use over here on this or on this and
10:37
your accountant’s going to say okay as
10:39
an s-corp you can take that money and
10:42
file it away over here and not
10:44
pay um
10:47
i don’t want to say taxes but
10:49
you’re not going to have to pay uh
10:51
profit taxes on that money right
10:54
so
10:55
the biggest tipping point between llc
10:58
and s corp is about 80 to 100 000
11:01
of of net income
11:04
so
11:05
um if your business is netting and
11:08
that’s a rule of thumb yeah it’s it’s a
11:09
rule of thumb uh and and again your
11:12
situation might be different however if
11:14
your business is netting between 80 and
11:16
100 000 of profit or income
11:20
net income
11:22
then
11:23
you’re pri you’re gonna hear your
11:24
accountant wanting to flip you over from
11:26
llc to escort and not every time but you
11:29
know 80 of the time he might be saying
11:32
okay when when
11:33
my clients come in and they’ve bumped to
11:36
this
11:37
number that’s kind of my personal
11:39
threshold for hey we need to start
11:41
thinking about doing something else
11:43
yeah the so that 80 to 100 000 number is
11:47
literally the break even number between
11:49
the amount of money you’re going to save
11:51
on your taxes by filing s corp versus
11:53
llc and the additional money it costs to
11:56
file those s corp taxes so
11:59
um at 80 grand is kind of the tipping
12:02
point at 100 grand it’s it’s cheaper for
12:04
you to be an s corp than it is an llc
12:06
yeah and those are questions that you’re
12:07
going to want to ask your accountant and
12:09
actually he’s going to ask you so if you
12:11
go to an accountant and he says okay so
12:14
how much money do you think you’re going
12:15
to make the first year and you say 50
12:17
000. he’s going to say we’re going to
12:18
file an llc llc we’re going to move on
12:21
now if you want to get to an s corp
12:23
later what you know that’s what you’re
12:24
going to go to and yeah let’s talk about
12:26
just escort for a second you know when
12:28
people think what’s an s corp well s
12:30
corp is a corporation and the s stands
12:33
for subchapter and that’s a tax
12:35
classification okay and now
12:37
and you might say oh what’s a tax
12:39
classification i don’t know what you
12:40
know you know what is that ask your
12:42
accountant okay
12:44
you know and he’s going to break it down
12:45
and say okay if if you guys are making
12:47
this
12:48
and the reason we can’t go into it is
12:49
because we don’t know what your
12:50
overhead’s going to be so
12:53
your the amount of money that actually
12:55
shows as profit is going to be different
12:57
no matter what type of business even if
12:59
they’re if we were all five plumbers
13:01
right you know all of those are going to
13:02
be different this guy’s got a building
13:04
this guy’s got 18 trucks this guy’s got
13:06
one truck this is a one-man shop he
13:07
works out of his wife’s minivan
13:09
right so they’re all going to be
13:10
different but
13:11
so those are the questions that you’re
13:12
going to want to ask them i mean the s
13:14
corp is a corporation
13:16
okay and then it just has a different
13:19
designation which
13:21
you know puts you into a different tax
13:23
liability yeah and again our our goal
13:26
here is not to tell you what to do our
13:28
goal is to arm you with the information
13:30
so you can be talking to your accountant
13:33
with confidence
13:36
much like some of the other topics we’ve
13:38
talked about so far
13:40
we were going to give you some options
13:41
and arm you with some information but
13:43
then i’m also going to share with you
13:44
experiences that i did or that i had
13:46
starting my own company
13:48
so um i used an llc
13:51
i was a little unsure of how much money
13:53
we were going to be making i had i
13:54
definitely had some goals in mind but it
13:56
wasn’t guaranteed nothing is and so we
13:59
started out as an llc
14:01
we started our business halfway through
14:03
the year we opened our business on
14:04
august 1st and so i had prior
14:09
income
14:10
from working for somebody else up
14:12
through that year yeah so you’ve already
14:14
paid your taxes for those first six
14:16
months right or a portion of them
14:17
depending on how the rest of the year
14:19
worked out right right and so i spent
14:21
seven months working for somebody else
14:22
and then i spent five months of that
14:24
year six months five months of that year
14:26
working for myself um
14:28
so
14:29
an llc is a pass-through entity that
14:32
files on your personal taxes and so at
14:34
the end of that year the business our
14:36
business did okay but then you take what
14:39
the business made in those five months
14:40
come on combined with my salary that i
14:43
was making working for somebody else for
14:45
the first seven months of the year and
14:48
that immediately put us into a
14:50
classification where it was cheaper to
14:52
go s-corp and so in my own personal
14:54
experience
14:56
we
14:57
did what they call a late designation
15:00
where it’s basically you write this
15:01
letter to the state and you say hey look
15:03
we made more money than we thought we
15:04
were gonna and so
15:05
um
15:06
we’re gonna do a late designation and
15:08
request that we’re allowed to flip over
15:09
to an s corp status and this is all
15:11
advised by my accountant they almost
15:13
always let you do that yeah yeah yeah
15:14
okay and so my accountant said you need
15:17
to do this it’s going to save you money
15:18
on your taxes and i said okay you know
15:19
he’s the expert and so that’s what we
15:21
did
15:22
so don’t think you can make a wrong
15:23
decision if you think well i don’t think
15:25
i’m going to make more than 80 or 100
15:27
but then you end up doing it you can
15:28
always file a late designation later if
15:31
you would like yeah and if you think
15:32
that you’re going to be
15:34
your spouse works and you’re going to do
15:36
crafts from home but you’re going to
15:38
sell them online and you’re going to be
15:39
showing some
15:40
additional revenue just do an llc yeah
15:43
it’s easy you go right on legalzoom yeah
15:45
yeah we haven’t talked about any of that
15:47
but you can go on legalzoom or the
15:48
secretary of state website um
15:51
and file that get your tax id number
15:54
yep and you’re rolling right so you know
15:56
we’ve we’ve teased about it before like
15:57
we’re going to talk about how to set up
15:59
your llc and all that stuff yeah why
16:00
don’t you do that since i brought that
16:01
up out of order yeah that’s fine
16:04
it’s it’s easy like everyone makes it
16:06
out to be this giant hurdle and that’s
16:08
why i can’t start my businesses because
16:09
i don’t know how to set up an llc you
16:11
literally go to the google machine and
16:13
you type in how to set up an llc in
16:15
whatever state you live in yeah don’t
16:16
forget your state because they are
16:18
different right and you scroll down
16:19
through google and skip the first five
16:21
or seven you know things that are always
16:22
ads and you go back down to the actual
16:24
organic search results yeah and you’re
16:26
going to find the secretary of state
16:28
website for your state and you’re going
16:30
to click on that and it’s probably going
16:31
to bring you to the exact page you need
16:34
to file for your and they’re a lot
16:36
easier than they used to be yeah i mean
16:38
they realize oh you know what and listen
16:40
again the government’s out to make money
16:42
so the easier it is for them to get you
16:45
there and pay your fee yeah they’re
16:47
happier so now it’s almost like they’ve
16:49
streamlined it yeah and everyone can
16:51
just go on there and be like
16:53
they send you your tax id number yeah
16:55
the government wants you to be a
16:56
business because businesses pay more
16:58
taxes right so the government will use
17:00
any excuse they can to call you a
17:02
business yeah and so yeah they will i
17:04
mean i’m serious like um and and so
17:07
they’re going to make it pretty
17:08
streamlined but you can also do
17:10
legalzoom and just pay them and there’s
17:11
like a phone like
17:13
they’ll they’ll set up a phone call
17:15
there’s a phone call where they they
17:16
call you and it’s like 249 bucks and
17:18
done you’re like official and and don’t
17:20
get me wrong they have these other
17:22
add-on options too where you can like
17:24
protect your business in this way for
17:26
like 400 and you can do all this again
17:29
our advice is not to tell you what to do
17:31
our advice is to prepare you
17:33
to for what you’re about to see and and
17:35
to prepare you for the right questions
17:37
to ask yeah and now listen if you
17:40
if you were searching for an accountant
17:42
we talked about this in the last episode
17:44
and you’re calling around to accountants
17:45
if you called one
17:47
out of the blue and said hey i want to
17:49
start my own company i’m looking for an
17:51
accountant
17:52
what do i do about llc and sole
17:54
proprietorship or s corp yep he will
17:57
probably tell you that information over
17:58
the phone for free yeah look hey mike i
18:01
charge 350 bucks you can go and i’ll do
18:04
everything for you and we’ll get you set
18:06
up you can go to legalzoom if he’s a
18:08
reputable accountant that’s probably
18:11
what’s going to happen now not all of
18:12
them right i mean and say he says you
18:14
know why don’t you come in and we have a
18:16
consultation fee of fifty dollars we sit
18:18
down with you for an hour and get you
18:20
know
18:20
it 50 bucks is not a big deal okay
18:23
and i was just using that as an example
18:25
i mean guys aren’t they’re not always if
18:27
they’re reputable they’re not looking to
18:28
gouge you right they’re looking to be
18:31
a part of your team yep and get you
18:34
rolling on the right foot because guess
18:35
what just like the government when
18:38
when you’re making more money and having
18:40
a
18:40
having to have them uh
18:42
put more time in they’re making more
18:44
money also right right the more work
18:46
that they have to do for your fun for
18:48
doing taxes and everything on your
18:50
business the more money they’re making
18:51
so they want you to be successful
18:53
um
18:53
so for me personally i like the
18:55
versatility that came with an llc it
18:57
gave me the protections i needed but um
19:00
it also gave me the versatility to
19:02
perform the business like i wanted to
19:04
early on the biggest question a lot of
19:06
people have about
19:08
all of that stuff is like how do you pay
19:10
yourself so for me as an llc we talked
19:13
about that a little bit in the previous
19:15
episode we’re going to get a little more
19:16
depth right here yeah yeah so as an llc
19:19
llc’s owners especially before you have
19:22
like employees and legitimate payroll
19:24
going if you’re a one-man shop and
19:26
you’re an llc
19:28
you’re not on payroll no you’re writing
19:30
yourself a check you’re writing yourself
19:31
a check and so you’re gonna do what’s
19:33
called an owner’s draw yeah members draw
19:36
yep lots of words for it and so what
19:37
that means is literally the business is
19:39
writing a check to you personally and
19:41
that’s your paycheck yep okay now
19:44
be smart with it
19:46
don’t pay yourself too much yes you’re
19:48
depleting cash away from the business
19:49
that the business needs in order to
19:51
perform
19:52
also
19:53
that money is not taxed yet from going
19:56
from business to personal it will be the
19:59
second you write that check there’s no
20:01
hiding where that money goes right it
20:03
went into your personal account you
20:05
wrote david hilton on it you wrote mitch
20:07
smedley on it guess what they know right
20:09
now
20:10
that money is for you that’s your money
20:12
and now it’s a paycheck so
20:15
what i did
20:16
was
20:17
i would take an owner’s draw i’m just
20:19
going to use round numbers if i wanted
20:20
to pay myself a thousand dollars a week
20:24
what i would do is my owner’s draw would
20:26
be for 30 percent more than what i
20:28
wanted to pay myself
20:30
so i would do an owner’s draw of
20:33
hundred dollars each week from the
20:35
business to my personal finances the
20:37
business would literally write a check
20:39
yeah to mitch smedley personally yeah
20:42
and then i would take that thirteen
20:44
hundred dollars
20:45
and i would
20:47
put it in my bank account but then i
20:49
opened on a personal bank account i
20:51
opened up a second bank account that was
20:54
like you in you know today’s day and age
20:56
you can do all this digitally and i
20:58
nicknamed that bank account tax savings
21:00
account yeah so then i would take that
21:02
extra 30 that i paid myself that 300 and
21:05
i would immediately move it to my tax
21:07
savings account yeah
21:09
what that does is it allows me to see
21:12
income but it also sets money aside for
21:14
the taxes that i will have to pay
21:17
eventually yes and uh i did that for the
21:21
first five months of our business
21:23
and here comes you know january february
21:26
march april whatever’s tax tax time
21:28
lo and behold my tax savings account
21:31
that i had been saving that extra 30 on
21:33
every month was darn near to the penny
21:36
what it needed to be to pay my taxes and
21:38
30 and and for guys that are making
21:41
this is another rule of thumb if you’re
21:43
making a hundred grand a year okay
21:45
even if and if your wife’s working or
21:47
not working that 30 to 35 percent number
21:51
is almost always correct it’s it’s
21:52
fairly close and worst-case scenario
21:54
let’s say you’re saving 30 you come out
21:56
where you’re only paying 26 in taxes
21:58
that’s a bonus you got your year-end
22:00
bonus you got a little bit it’s no
22:01
different than when when you go do your
22:03
like when you’re working for somebody
22:04
else and you do your taxes and you get a
22:05
tax refund same thing that’s your same
22:07
refund right so and the way i did it
22:09
just as an example is just a tiny bit
22:11
different so i always i tried to base
22:13
everything off of 100
22:16
so i would and usually i wrote myself uh
22:19
either one or two checks a month so say
22:21
i was gonna write myself a two thousand
22:23
dollar check but it was the same thing i
22:25
would just okay i’m gonna write myself a
22:27
two thousand dollar check i’m gonna take
22:29
30 of that let’s say it was a thousand
22:31
just for easy math
22:33
i was gonna write myself a check for a
22:35
thousand dollars i’m gonna take 300 of
22:36
that and i’m gonna move it to this
22:38
savings account yeah and i just left it
22:40
in there i took 700 and put it in mine
22:42
and then that freed me up to know
22:45
in the back of my mind that 700 is mine
22:47
i don’t have to do anything with i could
22:49
give it to my wife and say here that’s
22:51
that’s my paycheck do with it what you
22:53
will yeah and then at the end of the
22:55
year when the piper came i had that
22:57
money and they said okay hey you owe us
22:59
6 500
23:01
oh look this checking account’s got 7
23:03
300 in it right i’m covered i’m ready i
23:06
write a check out of that account right
23:08
and whatever’s left i could leave it
23:09
there for the next year yep i could take
23:11
that out because now that’s my money
23:13
i’ve paid taxes on that money already
23:15
yeah down the road i went and you could
23:17
even because again you’re paying your
23:19
taxes kind of a few months after the end
23:21
the year’s over right so
23:23
um and that’s on yearly taxes we’re not
23:25
talking quarterly that’s on yearly we’re
23:26
going to go into quarterly we’ll go into
23:28
quarterly later however your first year
23:30
in business you will not be paying
23:32
quarterly taxes quarterly threshold yet
23:35
right quarterly taxes are derived in
23:37
your second year of business and they’re
23:38
gonna use
23:40
what you made in your first year and as
23:42
well as some other information to
23:43
develop estimated quarterly taxes so you
23:46
will not be doing quarterly taxes in
23:48
your first year that’s why you have to
23:49
do it this way
23:52
the
23:53
the other thing that we’re going to talk
23:54
about taxes
23:55
is
23:56
happily pay them and this seems
23:59
backwards and there’s a lot of people
24:01
that don’t like paying taxes and i get
24:03
it however
24:04
in order for you to be successful
24:07
you got to flip your mindset to a point
24:09
where you are happily paying taxes
24:13
again it doesn’t make it less painful
24:15
you’re not happily but you know that
24:17
you’re doing the right thing and doing
24:19
the right thing is the puts you on the
24:21
right path right
24:23
people that refuse to pay taxes or that
24:26
don’t happily pay them are usually the
24:28
ones that get in trouble they’re the
24:30
ones that are taking the owner’s draws
24:32
for all of the money that’s left in the
24:33
business bank account and they’re buying
24:35
the boats and they’re buying the trucks
24:36
and they’re buying the lake house and
24:38
then they’re saying woe is me later when
24:41
the tax man comes and
24:44
totally hoses them and they ask for
24:45
their money and they don’t have the
24:46
money to pay it so um yeah and then
24:49
they’re oh the government’s out to get
24:51
me right right you have to be good you
24:53
weren’t smart you didn’t have the
24:54
discipline you know what let me can i
24:56
bring up a point about
24:58
um that may make it easier for you to
25:00
pay your taxes so um and i’m not trying
25:03
to get political here but but trump was
25:05
on like
25:06
a week ago on a show and he said
25:08
we need to take credit everyone in this
25:11
country needs to take credit
25:13
for creating the coveted vaccine because
25:16
that was tax money
25:19
that was used to create those vaccines
25:22
and give those out for free it wasn’t
25:24
for free we all paid for it right okay
25:26
right right right what the tax dollars
25:28
yeah use that you know use that as to
25:31
soften the blow right now are they i
25:33
don’t want to get too political but are
25:34
they always using our money wisely no
25:36
right but they’re using it efficiently
25:38
no
25:39
but but wisely some yes yeah you know
25:42
and i’m happy to pay that and and look
25:45
more when it comes to taxes don’t get
25:46
those roads done don’t look federal as
25:49
much as looking local yeah um your taxes
25:52
go to schools and go to roads and go to
25:55
your local city that you live in and
25:56
everything else but yes they’re a part
25:58
of those state taxes go to that yeah so
26:00
you know look look a little more
26:02
tangible and a little bit more local
26:04
it’s easy to get lost in the fog of
26:06
taxes when you i mean
26:09
there’s there’s no shortage of problems
26:10
in this nation and and it’s a whole lot
26:12
easier to find problems than it is to
26:14
find success it is and that’s why i
26:16
bring that up you know sometimes you
26:17
need a little nugget yeah to to keep you
26:20
going and when if you’ve ever been to
26:22
another country for example and driven
26:24
down the roads and then you come home
26:26
and you’re like you know you oh
26:28
you can’t drive so many potholes and
26:30
you’re in another country and then you
26:31
come home and you’re like oh right
26:33
our highway system is amazing i’m gonna
26:36
go from new york to california
26:38
in two days yep you know it’s just
26:42
you know sometimes we’re spoiled yep
26:45
take those little nuggets and say hey
26:47
you know this is your taxes that’s my
26:49
sign
26:50
that i paid for right there right you
26:52
know i did the work i paid my part and i
26:54
did that and i’m not saying
26:57
i love tax paying taxes we should all
26:59
pay 90 taxes no no no but try to just
27:03
get a little bit of reprieve try to have
27:05
a little perspective
27:06
like we talk about right when you’re
27:08
paying those taxes yeah and if you’re
27:10
willing to lie on your taxes to get out
27:12
of paying them that means you’re willing
27:13
to lie to your customers and as we’ve
27:15
said before customers have an excellent
27:17
meter and so if you’re willing
27:18
to lie to your customers and willing to
27:20
lie on your taxes your customers going
27:21
to pick that up
27:22
so um
27:24
there’s great honor in knowing that you
27:26
are completely above board and honest
27:28
with your taxes we talked about that in
27:30
the last episode we are so above board
27:31
in my company that you know bring on an
27:34
audit right and yeah it’s good it’s a
27:35
pain in the ass and it’s a whole bunch
27:36
of work to work through an audit however
27:38
i ain’t scared because we’re doing
27:40
everything so above board it ain’t even
27:41
funny like they would probably laugh and
27:43
they’d be like you really deposited all
27:45
this cash yeah like
27:47
most people like try to skim a little
27:48
bit of it yeah you know so
27:50
um
27:51
once i’ve said this before i’ve never
27:53
taken cash and not paid taxes on it just
27:56
let the records say right right right
27:58
right no so just lots of record state
28:00
not that’s what happened scout but you
28:02
know not only is it is it uh dishonest
28:05
to lie about your taxes but you’re also
28:07
shooting yourself in the foot in the
28:08
future you know when businesses need to
28:10
borrow money to grow and expand if
28:12
you’re showing smaller profits because
28:14
you’re hiding some some income well
28:16
guess what banks are going to see that
28:18
it can hurt you later and they’re going
28:19
to say well you don’t have enough income
28:20
to get this loan well no i do it’s just
28:22
i didn’t report half of it yeah
28:25
like okay you’re a right
28:27
sorry so uh your financials are a direct
28:30
link to your future performance it’s
28:32
okay to show a lot of income and in your
28:35
banks you’re going to want to see that
28:36
in the future i just i just learned
28:38
firsthand so
28:40
about a week ago we completely upgraded
28:43
our entire fleet of vehicles in in our
28:45
fleet we have three plumbing vans um i
28:48
bought them all less than two years ago
28:50
and i had an opportunity to upgrade our
28:52
vehicles to get larger vehicles because
28:54
the vehicle crunch let’s be honest so it
28:57
works out so so i was able to trade in
28:59
all of our other vehicles i traded them
29:01
in for a lot more than i paid for them
29:02
but i also paid a premium on the new
29:04
ones and so i needed to
29:05
borrow the money i didn’t need to i
29:07
could have paid cash for it but i wanted
29:08
to see if i could borrow the money um
29:10
and so that way it kept my cash in
29:12
reserve and because of our awesome
29:14
financials that we put out with our with
29:16
our
29:17
you know honest and ethic performance uh
29:20
honest and ethical performance because
29:22
of those um a bank was willing to come
29:24
through we’ve been in business for 18
29:26
months yeah and a bank was willing to
29:28
say yeah we’ll loan you money on offer
29:30
now let’s say is that unheard of
29:32
um it’s it’s not unheard of it’s a
29:34
little rare but it’s a little rare now
29:36
they went now let’s be honest they went
29:38
through every monthly statement yeah
29:40
they sat down and they were like okay
29:41
what did you do this month where did
29:42
everything go what where did what do you
29:44
do this month where did everything go
29:46
and then they but
29:47
it’s really like that by doing that
29:50
yes
29:50
they can see your cash flow
29:53
okay by doing that and then they can say
29:55
okay well he spent that on this right
29:57
you know what he doesn’t need that now
29:59
right he’s bought these trucks so that
30:00
cash flow can come here and a s
30:03
and a good businessman that works at a
30:05
bank a loan officer you know if you will
30:08
there you know they can go through all
30:09
that bs as we like to call it and see
30:12
where the actual numbers are yeah yeah
30:14
so you know if i would have been under
30:16
reporting my revenue
30:18
and pocketing some of that money that
30:19
bank would have said you don’t have
30:20
enough revenue to do this and it would
30:22
have shot me in the foot yeah so because
30:24
i’m doing the right thing when it comes
30:25
to taxes it helped me out tremendously
30:27
yeah now let’s now he’s not saying
30:29
um
30:30
just report everything is profit every
30:32
time you owe it to yourself and your
30:34
business to take every deduction legal
30:37
deduction yes that you can to preserve
30:41
as much money as you can so that you can
30:43
spend it as you see fit yeah and on
30:45
trucks a lot of people like your raises
30:48
yeah advertising you know you you have
30:50
to focus that money and a good
30:52
accountant like we’ve said 50 000 times
30:54
is going to help you do that yeah you
30:56
want to work the best within the system
30:57
that’s given to you yeah we don’t pick
30:59
the system no but we have to but there
31:01
are rules and there is an outline and
31:03
you have to
31:05
navigate that maze of right
31:07
right to try to do the best that you can
31:09
with what you’ve earned right um i
31:11
recently heard a story uh of a guy who
31:14
was fudging his taxes for like six years
31:16
he’s been in business for six years and
31:17
he was fudging no names no names no
31:19
names
31:20
um it finally caught up with him
31:22
and
31:23
now he’s in with a good accountant that
31:26
does things above board and now his good
31:28
accountant says i got bad news for you
31:31
you’re in trouble bud you owe a hundred
31:32
and fifty thousand dollars in back taxes
31:35
and you don’t have a choice i’m not
31:37
laughing at him i mean i would just like
31:39
if an accountant said that to me i would
31:42
just laugh because i wouldn’t know what
31:43
else to do just be like oh right dude so
31:46
that’s not a story anybody wants to be
31:48
involved no of course not so you owe it
31:50
to yourself like i’m a nightmare nobody
31:52
ever wins against the irs nobody unless
31:55
you kill them all i’m kidding irs always
31:58
wins and so because of that
32:00
you’ve got to do the right thing when it
32:02
comes to taxes
32:04
um next is going to be getting audited
32:06
soon yeah dude i’m on the up and up
32:10
next thing to talk about my account is
32:11
awesome he keeps track of everything
32:13
that stuff goes in
32:14
and i mean they are well you want to
32:16
kill them so they are on it the irs
32:18
agents
32:19
some of them
32:21
next thing to talk about
32:22
key performance indicators
32:25
what do we mean by that mitch so the
32:27
nickname for this is kpi but these are
32:29
the things that are going to tell you
32:31
uh day to day week to week month to
32:34
month how your business is performing so
32:37
with and this is why they’re called key
32:39
performance indicators these are the
32:40
things that indicate to you whether
32:43
you’re performing um above goal below
32:46
goal or at goal or whatever you want and
32:48
these are movable you set them you also
32:50
set your own goals so
32:53
we’re going to talk about how to set up
32:55
some key performance indicators so that
32:57
you perform at the level that you want
33:00
to with your business now
33:03
one big overlying caption with key
33:05
performance indicators is they’re
33:07
dramatically different from business to
33:09
business to business if you’re doing a
33:11
hair salon your key performance
33:13
indicators are going to be greatly
33:14
different than if you’re a plumbing
33:15
company or if you’re a lawn mower or
33:17
whatever the case may be
33:19
so
33:21
we’re going to talk about some of the
33:22
general overlying conditions that you’re
33:24
going to want to monitor with these key
33:26
performance indicators and then i’m
33:27
going to give you some real life stuff
33:29
of what i monitor in my business this is
33:32
yet again another area where when we
33:34
open up the question and answer stuff
33:36
and everything else if you have
33:38
questions for what might be some key
33:40
performance indicators for yours you’ll
33:42
be able to send those in and we may be
33:43
able to help you out yeah and those when
33:45
you start sending those in
33:47
don’t think of this is a stupid question
33:49
because
33:50
there there may be 20 other people that
33:52
have the same question yeah because some
33:54
of these things that we’re talking about
33:55
are in generalities yeah yeah and you
33:57
really need sometimes people need help
33:59
breaking that stuff down and if your
34:01
question is what call this is this is my
34:04
situation what column do i put that in
34:07
in my excel spreadsheet we will tell you
34:09
if we answer that question we’re
34:11
probably going to go into some serious
34:13
depth about okay this is where you need
34:15
to be you know mitch is going to answer
34:17
some of those questions i might answer
34:18
some of those questions
34:20
we are going to give you
34:21
what you need so just
34:23
don’t be afraid to send the question in
34:26
i mean especially at the beginning we’re
34:28
probably going to be able to get to all
34:29
of them yeah you know so just
34:31
write it down if you’re listening to
34:32
this and you’re you have a serious
34:34
question write it down and send it to us
34:36
yeah
34:36
ultimately what gets measured
34:39
usually improves
34:41
and so the purpose of key performance
34:43
indicators is to measure things in your
34:45
business that have the biggest impact on
34:47
your business and have the biggest
34:48
chance to improve your business and it
34:50
makes a visual for you to see you can
34:52
see it yeah so
34:54
um in episode 8 we’re going to be
34:56
talking about um tracking and improving
35:00
and evaluating and everything else
35:02
ultimately that entire episode is built
35:05
off of the key performance indicators
35:07
that we’re going to teach you how to
35:08
track right now so we got to in order to
35:11
prepare properly
35:12
we have to put those key performance
35:14
indicators in place today
35:17
so that we can track all of that
35:20
properly in the future we don’t want to
35:22
be starting the business and then
35:24
figuring out how to track everything yes
35:26
right now you’re going to need numbers
35:28
like you just said you’re going to need
35:29
numbers to fill those sheets out yeah
35:31
but to have have the systems prep done
35:34
in order to do that that’s what we’re
35:36
working on so there’s there’s a couple
35:38
of key areas that you’re going to want
35:40
to track okay you’re going to want to
35:42
track the number of opportunities you
35:44
were given that day to make a sale
35:47
you’re also going to want to track the
35:49
number of sales you made that day
35:52
and then you’re going to want to track
35:54
the value of each sale so that you can
35:57
develop an average sale so what this
36:01
looks like average sale is in made the
36:03
sale and average sale as in i made at
36:06
this average amount of money on that
36:07
sale right so two different things there
36:10
so what this looks like is i had i’m
36:12
just gonna again use round numbers
36:14
i had ten opportunities to make a sale
36:16
today
36:18
i made a sale on eight of those ten so
36:21
that means my conversion rate is eighty
36:23
percent so that means that we converted
36:26
80 of our opportunities into a sale okay
36:30
and then of those opportunities
36:32
basically you take the total revenue for
36:34
the day
36:35
and then you divide it amongst those
36:37
eight sales that you made and and now
36:40
you have an average sale so let’s say we
36:43
made a hundred dollars on each
36:45
opportunity
36:47
so now our average sale is a hundred
36:48
dollars our total revenue is eight
36:50
hundred dollars yes okay so
36:52
you’re going to want to be building a
36:54
spreadsheet in excel or google sheets or
36:57
whatever to where you can develop
37:00
like mine is monthly and then in each
37:02
month i’ve got like a section for each
37:04
week of the month
37:06
and then in each week of the month i’ve
37:08
got a section for each day so each day i
37:11
can go in and track
37:13
okay i had this many opportunities today
37:15
i made this many sales today my sales
37:18
were 100
37:21
dollars and a 150.50. dollars or you
37:22
know whatever the case may be and then
37:24
this this again this is a cool thing
37:26
with excel is you can set it up to where
37:28
it’ll automatically tell you your total
37:30
revenue for the day and you can build
37:32
the formulas to where it will
37:33
automatically tell you your average sale
37:35
for the day
37:36
and then because i’ve got it grouped
37:37
into days and evolving into a week
37:41
as i plug it in for each day
37:43
it will my system will automatically
37:45
tell me okay for the week you’re
37:47
converting at 78
37:50
and your average sale is this amount of
37:52
money and your total revenue is this
37:54
amount of money
37:56
and then
37:57
as that again these sheets are built
37:58
monthly so again i built the sheet so
38:01
it’ll give me like individual week’s
38:03
performance but then at the bottom of
38:04
the sheet it’s also going to give me
38:05
like an ongoing performance for the
38:07
whole month
38:08
you know i may have had a good week and
38:09
a bad week and then at the bottom of the
38:11
sheet it’ll kind of blend it out for me
38:12
and say okay here’s where you are for
38:14
the month for the month you’re
38:15
converting at 80 percent and your
38:17
average sale is 200 a sale
38:20
and so your your gross revenue for the
38:22
month is x yeah and can i say something
38:25
just about that real quick so
38:27
to a lot of guys um like i started out
38:30
mitch and i both start out new
38:31
construction they’re listening to that
38:33
going oh are you freaking kidding me
38:35
yawn bore why why but if you sit down
38:38
and do that it gives you
38:41
uh just the upper hand of knowing
38:44
where that money’s going how am i
38:46
getting that money i shouldn’t say where
38:48
that money’s going but
38:49
where those cards are coming from where
38:51
yeah where is that money coming from how
38:53
can i improve on it and you know a whole
38:56
other point is you can cross-section
38:58
that work too like say you’re a
38:59
lawnmower
39:00
and you go back and look like say the
39:03
previous month is april oh man it rained
39:06
from blah blah blah to blah blah blah
39:08
and my sales calls went up x
39:11
right you know what i mean you could
39:13
always yeah because it’s raining and the
39:14
grass is growing so you’re mowing more
39:15
and this is and this is a business 101
39:18
hey everybody should know this common
39:20
sense stuff but
39:21
you know in other business that
39:23
cross-sectioning may be different you
39:24
could be like oh you know what maybe you
39:26
know for the last two years i’ve seen
39:28
that maybe i should put door hangers up
39:30
the three weeks before that right you
39:32
know what i mean and then and then
39:34
you’re building that platform even
39:36
further because two years later that’s
39:38
four years back hey our sales and our
39:41
calls went up
39:42
this much right by doing that and it
39:45
allows you to really if you want to step
39:47
back and look at the big picture yeah
39:49
you know
39:50
a lot of people say and paralysis by
39:52
analysis
39:54
but sometimes you need those numbers i
39:56
shouldn’t say sometimes you always need
39:58
those numbers to evaluate where you’re
40:01
going where you’ve been how do i get
40:04
there and i think that that is just you
40:06
know that’s another part of key
40:08
performance indicators that can take you
40:10
to
40:11
um you know the next level right you
40:13
know what are those metrics right right
40:15
you know where are you the uh
40:18
um
40:19
there we go
40:20
um
40:22
the other the other thing that i track
40:24
in mind
40:25
is the the biggest thing that i track in
40:27
mind is usually conversion um are you
40:30
talking sales conversion yeah sales
40:31
conversion so the number of
40:32
opportunities i have each day versus the
40:35
number of sales i make
40:37
can like conversion is the most
40:39
important number of all of those right
40:42
uh because
40:44
conversion means a happy customer i
40:47
can’t make a customer i can’t make a
40:49
customer that i didn’t sell anything to
40:50
happy so no they might actually be a
40:53
little disappointed hey i had this guy
40:55
out and i didn’t like his number or you
40:57
know and people are moody
40:59
you know you can’t get them all right
41:01
right so um for me in my business i want
41:05
to convert 80
41:07
of the calls that i go on each day i
41:09
want to convert 80 of those calls to a
41:11
sale
41:12
and um so
41:14
a lot of people say well why wouldn’t
41:15
you want to convert 100 to a sale well i
41:18
need that 80
41:21
in order to tell me that my price is
41:23
correct the price that i’m asking of my
41:25
customers is correct
41:27
if i’m converting 100 of the calls that
41:30
i go on into a sale it means that i’m
41:32
charging too little money for the sales
41:35
yeah okay now if you’re in a
41:38
and your profit margin is going to
41:39
indicate those things too
41:41
so if you’re in a
41:43
low profit margin business i i bring
41:46
this up all the time if you’re in a lawn
41:47
mowing company you need to sell more
41:49
than 80
41:50
of the calls that you go on okay you
41:52
know because you’re making less money
41:53
per call right you know you need more
41:56
volume
41:57
you need to seriously that number’s
41:58
gonna be higher for you right okay and
42:00
now if you’re if you’re in a business
42:02
that say you’re a crane operator and you
42:05
get a call
42:06
that may even though you’re making more
42:08
money that may also need to be
42:10
higher right because you’re go you’re
42:11
taking less of them yeah and those are
42:14
just examples of um how it’s going to be
42:17
different for your company right right
42:20
so
42:21
every everyone’s going to be a little
42:22
bit different and when we get to the q
42:24
and a side of things you may be able to
42:25
kind of call in and or you know email in
42:27
and ask yeah and you know what and
42:29
question when we get to a question and
42:31
answer
42:32
some of those might not be questions
42:33
they may be statements right hey my
42:35
business did you know this
42:38
we get this many calls and my number is
42:40
60
42:41
yeah we want to hear from you yeah yeah
42:43
yeah send that in send that information
42:45
in we’ll you know we don’t have anything
42:47
to give out yet but we might someday
42:49
right you know send that t-shirt or
42:51
something yeah you know send that in and
42:52
say hey
42:53
and and and give a paragraph you know
42:55
it’s just email it’s easy to type it up
42:57
and you don’t have to be a professional
42:59
just you know hey these were my numbers
43:01
this is how i got there right right and
43:03
if it’s interesting and we think that
43:05
it’ll help other people
43:07
we’ll read it and once you understand
43:09
like what is your target number like i
43:11
know my target number is eighty percent
43:12
yeah once i understand what my target
43:14
number is if i’m converting my calls at
43:17
over eighty percent it means my price is
43:19
too low but maybe too low what’s funny
43:22
is if i’m converting my calls at under
43:24
80 percent it does not mean my price is
43:27
too high
43:28
it means that i need to work on my
43:30
salesmanship skills and my presentation
43:33
could it could be either it could be
43:35
either but in your market in and you’ll
43:37
get a good feel for that if you’ve been
43:39
in business for a little bit any time
43:40
your conversion is too low it’s always a
43:42
salesmanship or a presentation problem
43:44
anytime your conversion is too high it
43:46
is typically a pricing problem your
43:48
price is too low so kind of keep that in
43:51
mind
43:52
good salesmanship can always inflate
43:54
conversion and if your conversion gets
43:56
too high well then you need to modify
43:58
your price yeah
43:59
um
44:01
once you’re familiar with these numbers
44:03
you’ll grow to rely on them and you’ll
44:05
use them every day
44:07
to help grow your business
44:09
so we’ve talked about that um for me
44:12
once i had all of these in place
44:15
then
44:16
and once the sh the sheet takes some
44:17
time to build right and it’s gonna it’s
44:19
gonna be specific to you it’s an ongoing
44:21
work yeah once that sheet’s built
44:24
then what’s going to happen is you’re
44:26
going to come home every night and
44:27
you’re going to plug your information
44:28
into that sheet and it’s only going to
44:29
take you a few minutes it takes me like
44:31
five minutes every night to plug all
44:33
that stuff in and that five minutes
44:35
gives me an instant update as to how
44:36
we’re doing today this week and this
44:38
month well and that’s because you did
44:39
the systems prep yeah you have that
44:41
system in place to work for you right
44:44
you’ve already done the work without a
44:46
system like this in place what ends up
44:48
happening is you are running hard every
44:50
day and you don’t know if it’s paying
44:53
off or not
44:54
and so it makes it very difficult if you
44:57
were to run a marathon but you didn’t
44:58
know how long the race was going to be
45:00
be real tough to play that’d be pretty
45:02
tough right you didn’t know when the
45:03
finish line was going to be you didn’t
45:04
know what success looked like in that
45:06
marathon
45:07
you didn’t know is this a sprint do i
45:08
need to be running harder right now or
45:10
can i ease up a little bit and conserve
45:11
energy for later
45:13
and so what those metrics do for me is
45:15
like if we’ve had an awesome month
45:18
it tells me that we’re pacing really
45:20
well so keep driving because this month
45:22
is is making out to be something awesome
45:24
right
45:25
if we’ve had a slower start to the month
45:27
it tells me that i need to make up for
45:29
lost time and kind of get back on track
45:31
yeah um evaluate what’s happened hey
45:33
right you know where do i need to go
45:35
what do we need to do right right so
45:37
those those numbers really help you
45:40
understand how well you’re doing and
45:41
without numbers and metrics to kind of
45:43
base all that off of you’re going to get
45:45
burned out and visualization so if you
45:47
have a program that has a bar graph so
45:49
say you don’t like looking at those
45:51
numbers hit the bar graph yeah yeah
45:53
click pie chart and it will show you you
45:55
know those things hey last month your
45:57
pie chart looked like this right this
46:00
week or this month it’s looking like
46:02
this and you immediately know
46:04
okay we were successful last month and i
46:06
it was like this right
46:08
what do i need to do to to get back to
46:10
that and your quickbooks will actually
46:12
do some of that for you it’ll tell you
46:13
you know how much revenue you’re making
46:15
this month compared to last month and
46:16
everything else your crms will also do
46:18
that for you too so
46:20
i like just using those basics
46:22
opportunities versus sold calls versus
46:25
average tickets those three give me
46:27
everything i need to know to run the
46:29
sales half of the business
46:31
so
46:32
um once you start thinking of your
46:34
business in those terms it’s getting
46:35
your business is getting ready to take
46:36
off uh because now you can start using
46:40
those terms to help you grow otherwise
46:42
so you can say like okay if i want to
46:43
have another truck well then i need
46:44
twice as many opportunities each day i
46:46
need i need the business to prove to me
46:48
we have the opportunities to run another
46:50
truck and that focuses your
46:51
concentration so if you know hey i need
46:54
this many more calls maybe advertising
46:56
is the way to go maybe you know maybe
46:58
say maybe i need to push the guys to
47:00
sell just a touch more right you know
47:02
maybe i need to raise or lower my price
47:05
just a little bit right you know it and
47:07
it helps focus you know your intent yeah
47:10
there’s one other sheet that you’re
47:12
going to want to build and this is
47:14
separate from the the tracking the the
47:16
key performance indicators it’s tracking
47:18
but it’s different it’s tracking but
47:19
it’s different this is a monthly sheet
47:22
where you can plug in each day’s
47:24
performance and we’re talking excel
47:25
sheets yeah okay excel sheets or google
47:28
sheets when you get it and we’ve talked
47:30
about this before when you start asking
47:32
those questions if you need us to break
47:33
down what columns those need to be in
47:35
and how we did it or you know how do you
47:38
how
47:39
do you think we should
47:40
tell you to do that right send those
47:43
questions in yeah so we’ll do it we’ll
47:45
break them down
47:46
what we’ve got in what what i do on my
47:48
monthly sheet and again this is separate
47:50
from my key performance indicator sheet
47:53
my monthly sheet allows me to plug in a
47:55
summary for each day
47:57
and so it’ll tell me this day i ran
47:59
three calls it’ll tell me this day my
48:00
revenue was this
48:02
and then at the bottom of that tracking
48:05
mechanism
48:06
i’ll be able to like put in each daily
48:09
revenue and it will automatically then
48:11
calculate my revenue to date for the
48:13
month
48:14
and then it knows
48:16
so so typically there’s anywhere between
48:18
like 20 and 23 business days in a month
48:21
yeah um
48:22
you know monday through friday is a
48:24
business day saturday and sundays are
48:25
kind of bonus
48:26
um
48:27
so i’ve got my sheet set up to tell me
48:30
okay there’s 21 business days this month
48:34
were 11 days into the month so we’re
48:37
about halfway through it’s going to tell
48:39
me that okay our revenue has been this
48:41
so far
48:42
and if we keep on this pace then our
48:44
projected revenue is going to be this
48:47
and then you can see hey last month
48:49
we’re falling short of last month right
48:51
hey we’re about we got to turn up the
48:52
dial yeah we’re above last month right
48:54
on target the reason this is important
48:57
is because there’s a lot of people that
48:59
start out in business and they assume i
49:01
have to run every call that comes into
49:03
my phone they assume that i have to work
49:06
every saturday and i have to work every
49:08
sunday and every night and every weekend
49:10
and every waking hour of the day
49:12
and that will kill you it will literally
49:16
kill you now there are outliers so
49:19
a heating cooling company
49:22
if you’re a one-man shop you may have to
49:24
work you’re
49:25
you may not have a set schedule you may
49:27
be working saturdays and sundays because
49:29
you’re on call and you’re on your own
49:31
now
49:32
if you want to grow that to get
49:33
employees so that you can break that
49:35
apart
49:36
yeah you know that that’s a separate
49:38
subject but you can literally work
49:40
yourself to death if you allow it to do
49:42
so yeah so here’s where this makes a
49:45
giant difference
49:46
with a good tracking sheet that’s going
49:48
to tell you like okay
49:50
we’re let’s let’s use round numbers
49:52
let’s say it’s a 20-day month
49:56
and we are at day 10
49:58
and we are at 20 000 in revenue so far
50:02
this month
50:04
you okay
50:05
i got something man winter just dry out
50:08
there man so day 10 we’re at 20 000 in
50:11
revenue your sheets going to tell you
50:13
that you’re automatically pacing for a
50:15
forty thousand dollar month
50:17
now based off of your goals and
50:19
everything forty thousand may be low it
50:21
may be high i don’t know let’s say forty
50:23
thousand dollars is high you’re way
50:24
above pace your goal is to make thirty
50:26
thousand dollars in the month and you’re
50:28
making 40. that doesn’t mean slack
50:29
either it does not mean slack however
50:33
it does mean that if you are tired and
50:35
you’ve worked a ton you could spend that
50:37
couple days off right and that phone
50:40
rings
50:40
it tells you that i don’t have to run
50:43
that call in order to be successful this
50:46
month we’re not saying
50:48
get rid of calls but maybe when you
50:50
answer it say i’m gonna need to come out
50:52
tomorrow right or the next day right it
50:55
is very easy to work yourself to death
50:58
when you are new in business especially
51:00
if you’re not tracking so tracking
51:03
allows you to say i’ve afford like i’ve
51:05
worked so hard i’ve afforded a saturday
51:08
off i’m going to go out with the family
51:10
on saturday yeah and and when those
51:12
calls come in you just let them know i
51:14
don’t have any availability today my
51:16
next availability is on monday
51:19
like for us we’re always closed on
51:20
sundays
51:21
so um we don’t work sundays at all no
51:24
matter what the nature of the the
51:26
business is somebody could call in with
51:27
a busted pipe and we’re gonna tell them
51:29
i’m sorry i don’t have any availability
51:31
today i can get out there it’s kind of
51:32
like me i don’t work sunday through
51:34
wednesday
51:35
so you know just david you know if you
51:37
call for sunday to wednesday i’m not
51:39
coming out to your house yeah that’s
51:40
just so um you know my tracking allows
51:43
me to do that right now if we’re behind
51:45
pace and i know that i got to take
51:47
everything that’s going to come in well
51:48
then guess what when that happens
51:51
um i’m going to go through and i’m going
51:54
to say okay we’re behind pace when that
51:55
call comes in on a saturday i don’t have
51:57
a choice i got a sorry family i got to
51:59
go
51:59
i got to go work right and let’s let’s
52:01
talk about that for a second you may
52:03
you may be behind because you haven’t
52:05
got as many calls so maybe you have got
52:07
some rest maybe you have spent a couple
52:09
of you know so
52:11
you know you
52:12
it helps you balance right your life
52:15
versus your work life yeah and there’s
52:17
there’s a couple of different avenues
52:18
you can look at that in like for
52:20
instance if we’ve had a really good
52:22
month let’s say i haven’t worked myself
52:23
to death but sales have just been really
52:25
well i use that as a motivator to keep
52:27
going right yeah because what you’re
52:29
going to understand perspective is yeah
52:32
what you’ll understand in business is
52:33
once your needs are met
52:35
once your costs are met for the month
52:37
every dollar you make after that is
52:39
profit
52:40
so
52:41
my tracking sheets kind of let me know
52:42
when those scales tip from meeting the
52:44
needs to the business to now we’re
52:46
profiting and boy i’ll turn it up and
52:48
i’ll work hard because now we’re into
52:50
pure profit yeah and so i’m just gonna
52:52
keep cranking it’s a natural motivator
52:54
right hey we are just you know what
52:56
we’re doing right now we’re making i
52:58
might be able to take the guys all on
52:59
vacation next year because right now we
53:01
are flat
53:03
we’re killing it right so again none of
53:05
that happens without proper tracking
53:07
um
53:08
there’s there’s been a lot of times
53:09
where i’ve spent time with my family
53:11
because i knew i could you know when i
53:13
started my business we took so when when
53:15
we started the business i took a week
53:16
vacation with our family from the time i
53:18
separated from my employer to the time
53:20
we opened our doors because i didn’t
53:22
know how much time i was going to have
53:23
with my family after that yeah so we
53:24
took a week off we went to colorado we
53:26
hung out for a while and then i came
53:28
back and like hit the ground running and
53:30
started working hard
53:32
within six months of us opening our
53:34
business we took four or five days off
53:36
and we went skiing i knew i could we
53:38
were performing really well we had done
53:40
really well months to month to month and
53:42
and i knew like i can actually take a
53:44
couple of days off and we can go
53:46
we can go you know to spend some time as
53:48
a family i haven’t spent as much time
53:50
with them as i’d like because i was
53:51
working on the business so let’s go put
53:52
in some quality time and that’s
53:55
let’s be clear that’s part of the
53:56
podcast too we’re not trying to tell you
53:59
or grow you into just a machine that
54:01
works no this is about this is about
54:04
family this is about people this is
54:06
about doing the best that you can
54:08
this is this isn’t just about business
54:11
right right this is about about helping
54:14
people be better people also yeah being
54:16
better
54:17
uh family men and women yep
54:20
and i i mean those are good points yeah
54:23
this podcast is to help you be more
54:24
successful in business so that you can
54:26
also be more successful in your personal
54:27
life yeah and and you know a good thing
54:29
i always kind of think about you know a
54:31
lot of people
54:33
um there are a lot of losers out there i
54:35
shouldn’t say a loser i don’t know but a
54:37
lot of people uh live to work right we
54:40
work to live so that you can live your
54:42
best life one we’re gonna we’re gonna
54:45
break here we’re gonna show you guys
54:46
something that that most people don’t
54:47
see we do these podcasts with almost
54:49
virtually no editing so if something
54:50
goofy is happening you’re going to kind
54:52
of hear it marcus if you’ll step outside
54:54
for a second and grab the remote that’s
54:57
on the nightstand
54:59
right outside what are we doing what’s
55:00
happening it’s getting a little warm in
55:02
here and
55:03
one of our cameras is trying to overheat
55:05
oh i don’t care i didn’t pay for that
55:07
camera yeah
55:10
marcus is gonna
55:11
reach through here and hand me a remote
55:14
and we’re gonna get this thing cooling
55:15
off here a little bit i wonder so the
55:18
camera’s heating up i never actually
55:20
noticed but i feel
55:22
i mean i feel like it’s pretty good in
55:24
here
55:24
does it feel cold in here to you
55:28
so here you go marcus now it’ll start
55:30
cooling off a little bit in here and
55:32
keep our cameras from getting damaged
55:33
from getting too hot so
55:35
yeah this is real live podcasting real
55:37
life stuff here we’re adapting as we
55:39
come so now you’re going to want to take
55:40
that remote and set it back on that
55:41
nightstand by the way
55:43
for that to work thank you marcus thank
55:44
you marcus
55:46
okay so um
55:49
um where were we at we were wrapping up
55:52
with how proper prep prepares you for
55:55
great family life as well so yeah
55:56
exactly um
55:58
when you have a deep understanding of
56:00
your financials it gives you the
56:01
opportunity to take some time off and
56:03
enjoy the whole reason why you’re doing
56:04
this right you’re not doing this because
56:06
you love business you’re doing this
56:07
because you love your family and you
56:09
want to create a mechanism that helps
56:10
you spend as much quality time with your
56:12
family as possible so
56:14
um the last thing we’re going to talk
56:16
about here is or family and friends if
56:19
you don’t have family but you like to do
56:21
other things you like to go base jumping
56:23
right you like to take the quads out and
56:25
go down to oklahoma right you know
56:28
that’s just as good right right and you
56:30
should be able to set yourself up in
56:31
order to spend as much time doing that
56:33
as you can yeah so
56:34
last thing we’re going to talk about is
56:36
to stop trashing your fellow tradesmen
56:39
there is a there’s a problem in any
56:42
trades or crafting industry
56:45
where
56:45
people are way too eager to trash and
56:48
bad mouth other people’s work
56:50
other people’s product other people’s
56:53
anything yeah that does not help you in
56:56
business one bit it will not help you in
56:59
the slightest so
57:01
do not ever bad-mouth your competition
57:04
in front of your customers and this is
57:06
about this isn’t just about that and
57:08
this may this topic may seem like it’s a
57:10
big leap but it’s also advertising that
57:13
is a form of advertising yes and
57:16
presenting yourself as a professional
57:18
right right if people want drama they’ll
57:20
go watch all the reality tv shows to
57:22
grab all the drama they want they don’t
57:24
want drama from the tradesmen that’s
57:25
coming into their home to work on their
57:27
home that they’ve worked hard to obtain
57:29
right they don’t want drama from the
57:30
person that’s cutting their hair or
57:31
mowing their lawn or anything like that
57:33
maybe hair cutters well there’s a lot of
57:35
clucking in there they’re going to clock
57:36
and they’re going to gossip a little bit
57:38
but they’re not trash in other salons no
57:40
no no right so
57:42
um
57:43
your customers pick up on this and it
57:45
draws unwanted attention from your
57:47
customers and it makes you look really
57:49
bad um and the reason why is your
57:52
customer is solution oriented they’re
57:54
coming to you because they have a
57:56
problem and if your bad mouth and your
57:58
competition or other people that might
58:00
be bidding on that job you’re not
58:01
putting them any closer to a solution
58:04
so
58:04
they’re they’re focused on a solution
58:06
and you should be too um
58:08
keep in mind like let’s say let’s say
58:11
you’re in the contracting industry
58:13
your customer might be getting three
58:15
bids to do a deck or to do some drywall
58:18
or to do some painting or whatever else
58:20
so your customers considering they’re
58:22
actually considering using
58:24
one of the companies that is coming
58:27
to work for them
58:28
yeah if you bad-mouth that company
58:32
you’re basically bad-mouthing your
58:33
customers opinion
58:34
because they’re considering using one of
58:36
those companies and if you tell them
58:38
that i wouldn’t use them they’re junk
58:40
they produce crappy product well they
58:42
may have been a great option in that
58:44
customer’s mind and so now you just told
58:46
your customer your opinion is drunk yeah
58:48
and let’s say let’s say they had three
58:49
bids right they may you may have
58:52
automatically removed them and yourself
58:54
and they’re going with that third option
58:55
right you may have just put
58:58
you know you may have put them off and
58:59
they’re like oh you know what right
59:01
screw both of them i’m going with this
59:02
other guy and i’m gonna tell you how i
59:04
do it um but i’m gonna i’m gonna like so
59:07
i have done it this way and it just so
59:09
hap there’s actually another guy out
59:10
there uh that has a really good way of
59:13
of describing this we’ll get to that in
59:14
a second but how i do it is i’ll usually
59:17
if i can get access to the other
59:18
companies that are bidding it i’m i’m
59:20
not doing it so that i can understand
59:22
who i’m bidding against i’ll ask do you
59:25
mind telling me what other companies
59:26
you’ve had out here looking at this work
59:28
and they’ll tell me the whole purpose i
59:30
want to know is so that i can praise
59:31
those companies
59:33
i don’t even i don’t even care if they
59:34
do bad work or not but in front of the
59:36
customer i want to tell the customer
59:38
that yeah those companies do pretty good
59:39
work and in our industry um
59:43
if if we don’t hear about a company that
59:44
usually means they do good work and i
59:46
don’t know a whole lot about them and so
59:47
that means they probably do good work if
59:48
they if if they did bad work i’d know it
59:50
yeah okay because it would be everywhere
59:52
i’m gonna tell that to the customer
59:54
because what i’m doing is i’m
59:55
reaffirming to the customer that their
59:57
opinion is of value and the companies
59:59
that they’re looking at are not bad
60:00
companies okay
60:02
what happens is the company the customer
60:05
really appreciates that
60:07
and now they really appreciate me for
60:09
not taking the bait to bad mouth another
60:11
company
60:12
and usually they end up going with us
60:15
for the work not always not always but
60:17
usually they do but that stan even even
60:19
though
60:20
you know it may not help you make a sale
60:23
right that’s stand-up professionalism
60:25
and that’s where you what you need to
60:26
strive to be yeah yeah um andy frasella
60:29
uh he has another podcast uh he’s
60:31
actually kind of had two one was the
60:33
mfceo project and then now he has
60:35
another one called real af
60:37
um i follow his podcast i’ve literally
60:40
watched every single episode of his
60:41
podcast he’s got some really good stuff
60:44
he has a great way of explaining it and
60:47
he uses like the the ford chevy option
60:49
so like let’s say you drive a ford
60:52
and you’re considering switching to a
60:54
chevy and you take your ford truck to
60:57
the chevy dealer
60:58
the wrong way for that chevy dealer to
61:00
approach you is for that salesman to
61:03
walk up to you and say oh man you’re
61:05
driving one of those junky you know ford
61:07
or chevy whatever whatever which way
61:09
this is going oh you’re driving one of
61:11
those junky fords we need to get you
61:12
into a chevy right away yeah well guess
61:14
what that salesman just turned that
61:16
customer off because keep in mind there
61:18
was a time where that guy loved that car
61:20
and you’re now telling him that what he
61:22
loves is junk you are a right so
61:25
the right way to handle that even if the
61:27
guy was to take it well yeah it’s still
61:29
it’s not helping you when you’re trying
61:31
to make sales
61:32
sometimes the littlest thing yeah
61:35
so it hurts you so the right way to say
61:36
that is oh yeah yeah we’ve got a lot of
61:38
people that are switching from boards to
61:39
chevys and ford makes good stuff you
61:40
know um you know chevy’s got some
61:42
different stuff so let’s let’s just
61:44
check it out right yeah you’re not bad
61:45
mouthing the guy let’s compare the two
61:47
and you tell me what you like right you
61:49
know i’ll tell you what what i think we
61:51
do better right right and we’ll sit down
61:54
and hash it out so you you can talk
61:55
about it without badmouthing them yes so
61:57
that’s the key you can bring up bad
62:00
things without bad-mouthing
62:02
a competitor yeah yeah and that’s the
62:04
key to winning that war with your
62:05
competition so
62:07
guys this wraps up a lot of our planning
62:10
steps and we have covered a ton
62:13
of info in this preparation step stuff
62:16
frankly i’m exhausted so just to give
62:19
you guys a realistic timeline
62:22
i did all of these preparation steps in
62:25
six months it took me six months to do
62:28
all of these what we’ve talked about in
62:29
the last six episodes in the last six
62:32
episodes it took me six months to work
62:35
through all of this now
62:37
i did it for the plumbing industry
62:39
and i did it in a way
62:42
that
62:43
allowed me to succeed i had 20 years of
62:46
experience before putting these steps
62:48
together i had 14 years of management
62:51
experience before putting all these
62:53
steps together so based off of that
62:55
experience i was able to do all of the
62:58
preparation steps the personal finance
63:00
prep the business finance prep and then
63:03
the systems prep i was able to do that
63:04
in six months
63:06
just using similar apples to apples
63:09
comparisons if you’ve been a plumber for
63:10
five years and you have never managed
63:14
people
63:15
it may take you longer to do these prep
63:17
steps and that is perfectly fine it may
63:19
take you shorter let’s be honest it
63:21
could take you shorter it could take you
63:22
you might be debt-free you well you may
63:24
so you say you had all that experience
63:26
but we’ve just lined out all the steps
63:29
in order right you started you didn’t
63:31
have it all lined out i had to create
63:32
those learning as you were going yeah it
63:34
means two months right right you know
63:37
what i’m getting at is time doesn’t
63:38
matter
63:39
so don’t get focused on how long it
63:41
might take don’t get frustrated just get
63:43
in there and get it right get it done
63:45
and then just stay end result focused
63:47
once the business is up and going you’re
63:48
going to be a much happier person
63:49
especially if you’ve done it and some
63:51
people are goal-oriented so maybe write
63:53
down those first three and say hey when
63:55
i got that done all right got it done
63:58
right get the next one just take them
63:59
one at a time right and if you’re not
64:01
writing your goals down get to doing it
64:03
write down get personal finances under
64:05
control give yourself a literal box to
64:08
check when that’s done so uh doing that
64:11
helps out dramatically because checking
64:13
that box
64:15
is so powerful yeah um
64:18
you’re soon gonna be in the mindset of
64:20
oh man i’m in a whole different caliber
64:23
that’s great millionaire mindset is that
64:24
millionaire mindset and and you’re going
64:26
to be smiling as you start crossing some
64:28
of this stuff off and if you’ve done
64:30
what we’ve suggested before about kind
64:31
of separating yourself from some of your
64:33
friends that are dragging you down and
64:34
you’re gravitating yourself towards some
64:36
of your more successful friends
64:38
that’s going to help too because you’re
64:39
going to watch those friends start
64:41
cheering you on yeah and if you thought
64:43
that millionaire mindset was you know
64:46
i can’t just click and turn that on but
64:49
how you can get there is like we just
64:51
talked about crossing off those steps
64:53
right so as long as you’re moving
64:55
forward and up
64:57
you’re getting there right just a little
64:59
at a time and you just got to keep
65:01
working at it yeah stay disciplined work
65:03
the processes that we’ve lined out for
65:05
you and you are getting ready to open up
65:08
a wonderful boatload of opportunities
65:11
guys remember as as we’re wrapping up
65:13
this show
65:14
remember that if you like what you’re
65:15
hearing on this show do us a favor and
65:17
help share the void with somebody who
65:18
might be wanting to start their own
65:20
company we saw the opportunity to help
65:22
uh so that’s why we put on this show
65:25
um we would love to watch this show take
65:28
off and and be a good indicator and help
65:30
people out and and yeah be a good
65:31
indicator
65:33
for us not like our ego boost right but
65:35
man if people start sending in hey thank
65:38
you for your help you know i’ve been in
65:40
business six months now right you know
65:42
right
65:43
it’s worth it it’s worth it right right
65:45
or people that have recently started
65:46
their business but maybe they didn’t do
65:48
all of this stuff and now they’re having
65:49
to do it in arrears they’re doing it
65:51
afterwards you can still do it and and
65:53
you’re going to watch the business turn
65:54
around they’re going to watch their
65:56
business go from somewhat stagnant to
65:57
start climbing and yeah and that’s great
65:59
timing steeper even if they were on an
66:01
upward trajectory right right so uh do
66:04
us a favor and help share the show with
66:06
anybody that might need it uh the
66:07
easiest way to do that is kind of on the
66:09
social media platforms that you’re
66:10
already on you know don’t go blast this
66:13
on your own social media because nobody
66:14
nobody follows that stuff um go as you
66:18
see people asking questions about how to
66:20
start their own company or how to
66:21
perform
66:22
improve the performance of their newly
66:23
started company drop a link to an
66:25
episode or drop a link to the show yeah
66:28
uh on there and help
66:30
help us out that way let them follow as
66:32
they as they want so
66:33
um we really appreciate you guys helping
66:36
us get this message in front of
66:37
everybody that needs it so until next
66:39
week guys really appreciate it thanks
66:41
for hanging out with us through all of
66:42
these prep steps it’s a lot of hard work
66:44
but you’ll find out soon that it’s going
66:46
to pay off so
66:47
we will see you next week love you guys