How to Create a 3-Year Business Plan Using the 3 Paydays System

In the High 6 call, some of you have seen Rick Abbiati's spreadsheet on the ability for you to predictably plug in how many deals you're going to do, how many deals you need to do, and financially what it takes to leave your J-O-B.

Yes.

Even if you don't presently have a plan to leave your J-O-B and you just want to do deals, the spreadsheet you're about to see and, and what we did live is going to be super helpful because it's just for projection reasons as well. So enjoy this, and what I'd like to know after you watch it, reply with your biggest takeaway.

So this is based upon something that we had Dan Ralphs do for Chairman's Club a few years back. And it was just a mind-blowing exercise for me and the others, the other chairmen that were there. But basically what we did is we took the large stickies that go on the wall and plotted out what we want our businesses to look like 3 years down the road. And, you know, based upon our mission and our goals. So you want to look at your team, what you want your team to really look like. And this is divided up into 3 sections. And you've got your deal structure, your deals here. And then if you scroll down, you'll see liquid assets and reserve, uh, reserves. You put that in there. And then down at the bottom is all of your income and personal expenses and whatnot. And I'll get into that in just a minute. So, um, if you know your payday, your pay, your average paydays, you can put them in here. Um, otherwise use your average home price in your area. In this case, we're going to use $450,000. Actually, David, what's your average home price?

Yeah, let's start filling him in.

Uh, average is $293,000.

Okay, Rick, are you okay if these guys ask as you go?

Yep.

Okay, so you guys, if you don't get what's happening, please just yell in while Dave does the exercise with Rick.

Okay, so based on $293,000, and Nick, jump in if you want, but I, I would say probably on average probably $319,900 that you take it to market for.

I have nothing to add. You are inside my head.

Okay, I'll be quiet then.

Um, so based on that, that's going to give you your payday 1. And again, if you've got 3 or 4 or 5 deals, you know what your average paydays are. So we're going to use an average payday 2 of $250 and an average payday 3 of $35,500.

Rick, let me say something. Um, you guys saw how Rick charted his portfolio. You've seen the QLS. It's an old one, but I had my portfolio there publicly. You should be every deal tracking your running average for this reason. You might eke out a little more because you know this is happening, right? And you can leave your job earlier, you know. So just be aware of what your average is as you get going past your second deal. Go ahead, Rick.

All right, um, now if you have upgrade, uh, fees from, uh, upgrading to High 6, or if you upgraded to Chair or President's Club or whatever, you can put down, um, the addition— if Chris worked an additional deal split with you, or if you have a payment plan, that would go down below. But basically what would happen is, let's say you had $30,000 into there, and let's say it was an additional 15% on a deal split. What that will do, if you look at January, it puts it in this right-hand column here, and as you have deals, it'll show the paydown on that.

And then the time frame is allotted, or you just figure out as you go, Rick?

Yeah, yeah. And of course, if you have a payment plan, that goes down in the expenses section where I The other part up top here, example 3, are business scaling team vision. You can hire an executive assistant, additional VAs, maybe a seller specialist, and maybe a buyer specialist. So over the time frame, as you get deals, that's where you add to your team. So the next part is you'll see level on the left-hand column next to the left-hand column. And in there you can put down what level you're at. In this, it defaults to High 6, but what that'll do is change the splits. So, uh, I'm gonna ignore 2023 and 2024. I put those in there for people that have already got deals that they're coming up on payday 3s with. So we'll start in 2025. So David, how many deals Are you projecting for 2025?

Uh, 8 taken was the projection.

Taken, um, or sold? How many, uh, now do you have?

2 right now, currently.

Dave, what's the— all 3 paydays on this new deal that's closing Thursday? All 3 projected?

Um, yeah, hang on, it's, um, ballpark $52,000.

Okay.

What month did you have those?

Basically both January. One was right at the end of December of '24, but the paperwork's all signed January '25.

All right. So we got 2 deals here. Are either of those AOs?

One is an AO.

All right. One of them's an AO. All right.

Rick, I don't know how your brain works to develop this.

So what it'll do is if this was one deal, it's the same scenario. You only see your payday 1, but we've got 2 deals. So now you got a payday 1, you got 2 payday 1s and a payday 2. So you can see with High 6, the split that goes to Smart Real Estate Coach and what you're left with. So, um, and you would want 8. Um, you're projecting 8, David?

Uh, yeah, for the year, correct. So 6 more.

All right, all right, so that is 8, correct?

Um, yep, I think so.

Okay, now on this, these 2 that you have, do you have your Payday 3s?

Um, the Payday for the A— for both of them are just the AO, or both?

Well, the AO you won't have a Payday 3, but the other one, do you have the Payday 3 on it?

Yeah, I gotta pull it open here. Hang on just a second.

So this assumes that Payday 3 is going to come 24 months later, so whatever that is.

Is your Payday 2, Dave, roughly $250? Better, worse?

What?

Um, on the, on the lease purchases, I would actually be worse because it's a higher dollar thing. So it's going to be like, I think it's going to be like a negative $200, I think, is what it works out to be roughly on just the first deal, Rick.

Leave the other ones average. Okay, I just get this to let everybody see the point.

So let's put minus $250,000.

Yeah, I would say yeah, just to be conservative. I don't—

well, don't you guys, you and Nick, know the answer to that? You're closing Thursday. What's the payday too? Is it negative?

It's an AO, Dad.

Oh, that's the one.

All right.

Yeah, yeah, yeah. The lease purchase is not closed yet.

Got it, got it, got it. Okay, my bad.

All right, so what's the Payday 3?

Uh, on the other one, the projected was, uh, that's gonna change, but it's 90— it was $92,000 was our Payday 3 was like $6,700.

Sorry. All right, so now that we've done that, we've got 2025, and you can see that the gross annual revenue is $260,000. And of course, after the split, you're left with $182,000. Now, at the end of the first year, what kind of scaling of your team would you do? Probably an EA. I imagine take that admin load off you.

Um, that or, or a VA, one of the two. Yeah.

What do you have now?

Me.

Nothing.

No VA?

No, no VA, no.

Okay. At the end of year, may I make a suggestion?

Yes.

At the end of '25, bare minimum, probably have to deal 4. Yes to a VA and yes to a part-time EA.

Okay.

Let's just run it and see. Part-time, Rick.

EA.

Okay.

Rick, does the, um, the Payday 2 show up in year 2 somewhere?

Yes, it does, because if you can, um, Look over here on 2026. You can see the payday 2s that you're getting from the previous year.

Okay. Yep.

So since we're hiring a VA and a part-time EA, how is your deals, your deal flow projected for the following year?

That's—

I haven't gone out to '26 yet.

So we have to expand the brain. This is good.

Yes, yes, expansion. So if I was able to hit 8, I would at least expand it to probably 12, 12 and 10 at least.

What was in my head was 13. I don't know if that has any, uh—

Yeah, I was at 13 to 16 range because, Dave, the idea here is for you to do the exact same thing, if not less. Yeah, and you're gonna get more business because you're just gonna be doing what you're supposed to be doing, meeting sellers and But let's be conservative.

Okay, now filling that in here, we'll assume none of them are AOs. Um, so you can look, you've gone from $260,000 to $520,600. Now at the end of 2026, what would you hire? Maybe a seller specialist to duplicate your efforts? And maybe a buyer specialist?

Yes, yes, I would.

Okay, so before you go on, I, I have a quick question.

The seller specialist and the buyer specialist, are they VAs as well?

No.

So they're, they're, they're hired locally. You're— they're your employees now?

Yeah.

Okay.

Yeah. Um, so 2027, now that you've hired that and you've duplicated your efforts, what's that?

Well, I'm not— uh, hold on. Uh, Rick, uh, Rick Morado, um, the part of this though They wouldn't necessarily have to be employees because when Zach and I first came into the business, we were only paid on per deal. So we weren't, we weren't paid a salary or anything like that.

They could be 1099. Yep.

Okay.

Yeah, that's a good point. So now in 2027, now that you've added, you've duplicated your efforts, And you'll probably hire another VA, but just put that down. Okay, so what does 2027 look like for deals?

So I would say if we're doing 13 for 26, it's got to be 20 to 22, probably.

Let me make it— let me make a sort of a comment here, Dave. This becomes, in this next year, for all of you, this becomes a lifestyle decision though. So Dave says, do I want to keep this sort of a lifestyle company, just keep it low-key, pull out some more cash, or do I want to scale it? That's a good decision you got to make. It's a similar decision that I had to make on both companies, both main companies. So everybody's different. There's no wrong answer here. So let's run with the model, Rick, in this next one more year and see what we get. Get it. But just so everybody knows, there's no wrong answer. It's your lifestyle.

22 deals.

22. Wow.

He was crushing it.

Crushing it.

And I think at this point, it would probably just be a lifestyle not to scale, but Yeah, 2 a month, you guys.

Well, look at the math.

The math doesn't lie. 2 a month, you're cruising. It doesn't take much. You do that 3 or 4 years in a row, you set yourself up for a decade or more.

And if you look at your gross 2027 revenue, you're up to $1,116,000 just on that scaling. So if now that we've done all that, um, you would go ahead and you put in what you have in an IRA, um, or any liquid assets you have— checking, savings, business credit, home equity. Um, and then that's just for your reference when you're looking at your monthly, uh, monthly income. Now the bottom section, percent of revenue for owner's pay, um, I put it at 50%. That's based on the Profit First model. So you can figure you don't need to go through and put your business expenses in here because those would be operating expenses and capital from your Profit First model. So we'll assume 50% is going to owner's pay. If you were to set aside more capital, then you could reduce that to, you know, 40% or whatever. So, uh, David, what are your monthly expenses? And that you don't have to be exact, but roughly.

Personally, personal and business, or just personal itself? I think it's $5,000. Just use $5,000.

Okay, so now, um, if you were to have a payment plan on any upgrades, you'd put that in the months that they were due.

Okay.

So looking at this right here, you can see that if you look in the bottom line, that's your savings account, and you can see that building up. And actually, it doesn't go negative at all with that based on those deals. And you can see some of the months you do have a negative because you don't have deals every month. on your— what's left at the end of that month. But because of the previous month, um, or the previous month's buildup, you're covered for that. So at any point here, you know, you could essentially in December 2025 leave your W-2.

No pressure, Dave.

Yeah, no pressure.

Zero pressure.

But if you look at that at the end of 2027, your savings has jumped up to $758,000.

That's if you don't buy the Lamborghini. So you might have some built-ins in there, but—

I'm okay with no Lamborghini.

That's good. That's okay.

Land Rover.

Airplane, that's a different story.

Yeah. Okay, Dave, helpful?

Yes, very helpful.

How about everyone else?

On— can I— can you, um, scroll back down to where you just were there?

So excited.

Yeah, let's see the, the total savings. That's from the 50%, uh, yes. Okay. And then the line above it, the surplus, is that like your business bank account? Kind of a thing? Is that what that is?

No, the surplus is what you're— after you pay yourself and you take out your personal expenses, and if there's a payment plan, then that's what remains that month.

Dave, Deb, and Rick, I just want to make sure I'm clear because I think you answered differently. The owner's pay is paying Dave, right? Total savings is what's left after the surplus and after any negative from no deals. He's still left with a surplus, Deb.

Oh, so it doesn't show me the, the 50%, uh, let's see, total.

That's line 1, owner's pay.

Oh, oh, okay.

I'm sorry.

That's the, yeah, the 50% of what's what we put up at the top.

So yeah.

Okay.

On the months you did a deal.

Cool.

Cool. So with an EA and a buyer specialist, seller specialist, are you assuming that they're going to be working remotely or that you're going to have a physical office?

They could be working from home. They wouldn't necessarily have to be in an office because then you've got office expenses.

But right.

And so, Larry, some people like Nick and I enjoy the office. I'm in here 3 days a week. Like, everybody's different. Again, lifestyle decision, right?

Larry, and I think it's, it's important. Buyer meetings, uh, in theory could be at a Starbucks or a Dunkin' Donuts or something like that. Um, and then whenever you're having your, your seller signings, they, they could be with your, with your attorney. Um, so there's no need for a physical office. I just, uh, I like the separation.

So if you do Dunkin' Donuts, are they more likely to buy? Yes.

Um, you guys also— this is, as you all know, the shared office space arrangements all over the country, right? So if you needed a conference room in a professional environment, you just Pay the $50 or $100 and do that for your meetings. I used to use the attorney's office. Can't get more professional than that.

And what kind of salaries or payments are you allocating for executive assistants and buyer specialists?

What'd you put in there, Rick?

What I'm doing with mine?

No. What'd you put in this calc? I think Larry's asking.

Oh, I didn't put that in there because that comes out of the Profit First model, your operating expenses.

Got it.

You have operating expenses in there and you just ballparked it.

The operating expenses aren't shown in here because it's— all this does is pull the 50% owner's pay.

So the other 50% presumably is left on the table to run your business, right?

Got it.

That's a big number. That's taxes, operating expenses, Okay, so it's very general, Larry, but I think actually the way Rick did it is very conservative.

50%—

you don't have 50% expenses in this biz.

But if you, if you do look at the operating expenses, what— how much would you allocate for those kind of positions?

Rick, do you want to share ballpark what you do?

I— my EA, uh, Megan, is about $28 an hour.

How many hours?

Uh, right now she's working— I've got allocated, uh, 20 hours a week. She does 20 hours about every 2 weeks right now.

So 10 hours a week at $28, oh, $30, it's $300 a week to make your life easier.

Yeah, much easier. She's taking on more of the buyer specialist role. Um, she does everything with the buyers except for next step form reviews, which I'm doing with her.

And she's not even full-time yet, right? No-brainer. The Helpful Larry, no-brainer.

Yeah.

She's local, Rick?

No, she's in California. She's local to me.

She's gonna steal her. Yeah.

And actually, she does the social media stuff.

Um, you could take this share down, Rick.

Yep. I'm transitioning her to, um, contracts when I get more deals, and she takes all the metrics from the VAs and tracks all those.

Yeah, that's really cool.

And how much time are you allocating for your VAs?

My VAs— I have 2 VAs. Quite accidental, but I had 2 VAs at 15 hours a week, so that's $360 a week.

Larry and everybody, when you get to the next and the next and the next point, we'll look in with the benefit of hindsight. That's what I did with Rick and say, here's what's next, here's what you should think about doing. Then it's your call whether you want to pull the trigger or not. Rick screamed and cried a little bit, but he did it.

Well, I think the interesting thing about Dave's example that you went through, Rick, is in 2025, while it's still Dave, for as long as it's just Dave, that is very conservative at 50% operating because it's really just him and maybe he brings on a VA at some point.

But that—

so those numbers are only better in 2025.

Right.

That's a lifestyle year. Put it away.

Yeah.

And you can see in the model when you get to 2027, Payday 3 start kicking in, it just launches it.

Yeah.

This is really, really good, Rick.

I love it. Yeah. Thank you, Rick. I want you to thank— that's—

I—

you saw the detail that went into that. He probably did it in like 10 minutes, but it'd take me 13 years.

Look, it looks like it. Very impressive.

All kidding aside, that's awesome. Thank you. That'll be in ARK and Then we decided to put it in the QLS as sort of a next step module so people could see the big picture. So that's what it'll be in both those places for you guys. Yeah, good stuff.

When Dan ran this by us and I based it upon 1 deal a year and then growing the team and getting 2 to 3 deals a month, it went up to like $2.2 million. And I was just Yeah.

Then he stopped worrying about his health insurance and left.

So a niggling little point here, uh, for your VAs, are they dialing out of REI BlackBook or some other dialer?

Yeah, they have a— mine are.

Mine is too, Larry. You should, if that's what you've got set up.

Can those be dialing at the same time? So when you have 2 VAs Yeah, out of. Okay, may I ask, how did you find those? Was it Indeed or?

No, David Dials. David B A's.

Yep, I use David.

Just he's off.

Who's David?

Yeah, Beyond. Just ask Kelsey or does someone have the email right now for Beyond?

I'll get it.

Thank you.

Everyone just chill. Because they're trained on creative, you guys. I had a strategy call this past week and the guy goes, oh, I, you know, when you get on a strategy call and they know everything but they don't know anything. He said, no, I know, I know, I know, you just hire these VAs for like $3 an hour on the phone. I said, no, we pay them good money, but they know creative. Um, so it pays you. The rest of them just know how to do dials and try to do it for wholesalers and flippers. These are different.

Yeah, my VA has been with me, uh, in a couple months she'll have been with me for 3 years, and she went on maternity leave. And when she did, another VA, Mitch, came in, and over a couple periods, a couple months, she was consistently sending me leads. So now I get the dilemma. Well, I don't want to let either one go, so—

Yep.

So do more deals.

I'll take your second one.

Yeah, Rick treats them like the team, like you should. Um, all right, Rick, thanks again, buddy. Super awesome.