Predictable Profits In Your Business with Charles Gaudet, #EEP Entrepreneurship Podcast #274

Hey, you know, there's an event that you should go to. You know, every year you look at the different things you should do, and then you don't do it. Well, here's one event you should go to, and I'm insisting you show up. It's Profit First Live. We hold it right here at our offices. And what we do is we teach you, I teach you how to permanently drive profitability in your business. Now, if you read the book Profit First, you got the starter kit. But the question is, are you doing it right? Well, I'll ensure you do it right, because I'm going to work with you personally, along with our team here for 2 days and drive profitability in your business. Go to profitfirstlive.com right now and sign up for the next event. You know you should. I'm telling you, you must. All right. I'll see you there. Strap on your rusty cake. We're about to discuss— I know— we're about to discuss predictable profits and so much more on today's episode of Entrepreneurship Elevated. Sounds like a police car. Oh, I got an interesting police car story. For my Pat Benatar concert.

Can we have Jeremy tell his interesting ticket story too?

Yeah, I do. I want to hear that. My name is Mike Michalowicz. I am the author on a mission, a mission to eradicate entrepreneurial poverty. You know what entrepreneurial poverty is? It's the outside perception of, oh, you're crushing it, dude. And the reality is you're struggling, dude. Well, we fix that on this show and every show we do and throughout my books. I'm also the author of Profit First, Clockwork, The Pumpkin Plan, and brand new book, Fix This Next. You can get a preorder on Amazon right now. Hopefully by the time this episode goes live, actually, the final book cover will be up online on Amazon. I'm joined in studio with my friend who I just love to banter with and get in arguments with, Kelsey Ayers.

Hello, friend. You can find us on iTunes, Stitcher, Spotify, iHeartRadio, TuneIn Radio, any podcatcher anywhere.

And also in studio is Jay Cablone.

Hello.

So I asked, I asked you, Jay Cablone, I said, hey, um, does anyone from your family listen, like your brothers or any friends? He goes, no, no one does. And he goes, that's for my mom. So big shout out to Miss Pat Smith. There you go, Pat Smith.

Yeah, she'll be, she'll be smiling and laughing right now when she's listening.

Does she, does she call you Jay Cablone, Jay Balone?

No, she doesn't. It's weird. I don't know why.

Why does that catch on? Yeah, why doesn't that catch Maybe. Yeah, maybe now. So Pat, do that next time you see him. Go, hey, Jacob Loon, how are you? Pat, you got to do that. You've got to do that, Pat. Kels, what have you been up to?

Oh, well, today I'm going to Jazzercise for the first time. Well, first time at this place. Yeah.

Why did you— oh, you've done it before?

Yeah.

So why'd you pick Jazzercise?

Well, so they have multiple classes. I just wanted dance classes, so they have like a dance Fit one tomorrow, and like a Zumba-esque one, and then this Jazzercise.

Yeah.

Yeah.

I think it's great.

I—

'cause it's a— is it all women, or do men go to that too?

Men can go to it too.

But, when you say can, that means they don't.

Yeah.

Okay. But it's, uh, it's a communal— it's all dance-based, right?

Yeah.

Okay, and you're a dancer.

Yeah.

Good for you.

I mean, I, um, I dance.

Oh yeah, okay. I didn't mean to have a professional overtone to that.

Yes, exactly.

But you like to dance. Yeah, that's awesome. What have you been up to, Jacob Loon?

Uh, so, oh, um, I got into this, uh, this guy, his name's, uh, Dave Politis. Um, I don't know if you ever heard of him.

It's Manner Size.

Is that the— I said I got into him. This sound awful. Um, so, you know, I'm like all about like camping and stuff.

Yeah.

So I started researching, um, you know, how to deal with bears and things like that because I want to go out to, uh, Yellowstone Oh my gosh, like in the fall if I can.

We should do our retreat out there.

Yeah, that would be cool. But wait, let me tell you the rest of this and then you might change your mind. Oh, so this guy is a former police officer and he wrote 4 books and it's called Missing 411 and it's all these stories about how— and the media doesn't report it— so many people go missing in national parks and it's like the weirdest stuff. They they find them and they don't remember what happened, uh, and they're like miles away from where they, they— I mean, crazy stories, uh, and so he, he documents, he, he writes all these books on it.

That sounds interesting.

It's really interesting. It was kind of freaky though when you're thinking like, oh, I want to go camping there and oh, these people are gone.

Okay, these people are gone, are typically found again?

No.

Oh, so some people just go missing?

Some go missing, and then when they find them, it's just like the weirdest circumstances. Other people go missing and it's just completely unexplained. Like, one of the stories was two parents were with their young child who— they were like picking up rocks in the stream and only a few feet away, and they turn around, the kid's gone. And then they searched for—

but there's coyote fur all day.

No, that's the thing. He only reports on if there's any chance of any, uh, animal, uh, or, uh, abductions, he doesn't report on it. It's only the completely unexplained disappearances.

Oh, okay, that's fascinating.

And but apparently there's, uh, hot spots. If you look at the map, there's hot spots all over the United States where they occur.

Paranormal activity?

Yeah, Yellowstone's the number one spot where Jake Blount—

Yosemite. Yosemite is—

oh, Yosemite.

Yeah, he says it's, it's number one. I know, it's really freaky.

What are you laughing about?

You're like Yosemite, and you're like Yosemite. I felt like you were having a little pronunciation.

Yosemite.

Yosemite.

But then it freaked me out too.

Isn't that where Old Faithful is? Yosemite?

I think, yeah.

Or is that Yellowstone? That's Yellowstone.

That's Yellowstone.

Yellowstone, okay. Yeah, keep going.

But then it really freaked me out because one of the hotspots, which is where I go a lot, is the Adirondacks.

Oh, is this up there? That's where Woodstock's up in the Adirondacks. I mean, it's on the fringe of it.

Yeah, yeah.

Beautiful country up there.

Yeah.

Well, here's my argument. I think most people go in ill-equipped. I shouldn't say most. Many people go in ill-equipped. I wrote a story in Fix This Next about a woman named Amanda Eller. She went into a national park in Hawaii, and her intent, she says, was to go on a 3-mile hike. She went about a mile and a half in, saw a spot that she wanted to meditate. When she could stop meditating, she started to walk out, got lost. She was in this park for 17 days. And they found— What? Yeah, Amanda Eller.

I thought you were gonna say 17 hours.

17 days. And it was human nature. When we get lost, that we often start doing a walk in circles. And that's exactly what she did. We think we're walking straight. And often they're very tight concentric circles. Like, it's not like you walk in this big mile circle. It's like 400 yards. And here's what research— I wrote about this in another book— research has found that we favor our strong side. So if you're right-handed, you actually step a little bit further with your right foot than your left. So there's this natural tendency to walk in a circle because you're walking more with your dominant side.

That's wild.

So it's hard for us to walk straight. But then also with no beacon, you know, no navigation point, we just constantly are kind of correcting ourselves. And in her story, when they interviewed her, she said, my intuition was so strong, I knew I was walking the right way. And we'd rely on intuition. So my whole argument in the book is, Intuition actually doesn't serve us in many circumstances when we think it does. So in Fix This Next, I made this entrepreneurial compass, a very simple way to double-check your intuition to make sure you're walking straight ahead.

Yeah.

But just going back to your story, I think a lot of people— I wonder if a lot of those people that get— they have these mysterious events, dehydrate and therefore hallucinate and so forth, and are just ill-equipped going into space like that.

Well, that's what's weird. So a lot of the disappearances occur when the timeline is so short that nothing like that could happen.

Like within like an hour or two, or this happens the same day?

Within minutes.

You think they were abducted by aliens?

He doesn't give this. So this is what's great about this guy. He doesn't give his idea on what happens because he said, I don't know. He's like, and I don't want to ruin my credibility. He's like, I give you the facts and you—

He gives the 411.

He gives the 411. But it's true, a lot of people go ill-equipped. I mean, if that woman had you know, brought a compass.

That's why I wrote the book.

Yeah.

If she simply brought a compass, she would have been out.

Yeah.

Or at least walk in one—

or just have like a watch and basic survival skills. You can— if you have a watch, you can figure out the sun, which direction it's going, kind of north a little bit for the most part. And then just—

she didn't bring a cell phone. She didn't bring water. That's not smart, you know, because it's like, oh, it's only— I just did a hike up Camelback Mountain in Arizona, and right when you go there, and I follow the rule exactly, it says the moment you're halfway through your water, turn around. That's because then you have another half supply coming down. And the second I hit the halfway point in the, in the bottle, my mind is like, oh, I can keep going, I've got this. But that metric, I was like, oh no, don't risk it. And by the time I got down, the water was gone.

Yeah.

So yeah, yeah.

He even says, um, he's like, you know, most people go to these national parks thinking it's Disneyland, like, oh, oh no, he's like, no, he's like, it's— you can die. So come prepared and know your know your stuff. It's just fascinating.

It is fascinating.

Yeah, super interesting.

Um, I do want to thank our core partner Nextiva for making the show a reality. We love your support, Nextiva. And I do— do we have a listener shout out?

We do.

You're just not ready for it.

I'm almost there.

Leave through— keep leaving. Keep going. All right, you got it?

Yes. This comes from Lionel Felix on Instagram. He writes, it turned our business into— oh, in reference to Profit First— it turned our business into a profit machine. No book or methodology has been more impactful.

Period.

Nice, Lionel. And he wrote the word period.

Yes.

Yeah, that's emphasis. You didn't say that. He wrote that. Thanks, Lionel. I'm just saying, when people write the word period, they are not bullshitting around.

Yeah.

Kelsey. You know someone else that doesn't bullshit around? Who? Charles Cadet.

He's not.

You gotta say something. You gotta say something. You don't just shake your head. They can't see you. That is something on our YouTube channel.

Yes, that's true.

Charles Gaddett is the author of The Predictable Profits Playbook: The Entrepreneur's Guide to Dominating Any Market and Staying on Top. He created his first multimillion-dollar business at age 24. What were you doing at age 24, Kelsey? Yawning? Oh, I'm sorry, am I boring you now, Kels?

I'm sorry.

Because YouTube's watching. What were you doing at age 24? Smoking weed.

Working?

Yeah, right. And he's helped others generate millions with his strategies. He was named one of America's Geniuses in the top 50 industry influencers. Charles hosts the Beyond 7 Figures podcast and is the CEO of Predictable Profits. With no further ado, Charles, welcome to our show.

Well, thank you. Thank you. Thank you very much. I now know that I will not be taking my family on a hiking trip in a—

Right.

You know, Not without a cell phone and plenty of water, I guess.

There you go. There you go. Are you a bit— are you big into nature? Do you get outdoors a lot?

I live in New Hampshire, so I think by default we have to be somewhat big into nature, right?

I think there's a hotspot around there. Yeah.

Yeah. What city? You're not in Portsmouth, are you?

Oh man. Yeah.

Because Portsmouth is the hotspot, right?

What's the closest national park to you?

Say that again, I'm sorry.

What's the, uh, the closest national park?

Uh, my, it'd probably be around like the Mount Washington area.

Yeah. Yeah. That's a, that's a big one.

That's a big hotspot. That's a big hotspot. So, um, let's talk about predictable profits. I, you, you do a lot of speaking. Um, you're, you're in front of thousands of entrepreneurs every year. What are the, the triggers that bring about profitability permanently? And, and what are the things that actually kind of work against us?

Uh, what are the triggers that break? All right, well, that's a, that's a loaded question. So, um, why don't we start with sort of, uh, yeah, well, I mean, I'm like, all right, well, what— all right, let's talk, let's take it one step at a time, I guess. What are the steps that, that bring about, you know, predictability and whatnot?

Yeah.

Um, you know, the first thing that, that we like to look at is, you know, momentum. The more momentum a business has, the greater you're able to have a little bit more of that predictability. Momentum is anytime you're already generating leads and sales, traffic and so forth, right? It's when you know how to leverage that momentum that you can create more of that predictability, which is why guys like Richard Branson have said— very literally, when you know how to leverage momentum, you leave your competitors trailing in your wake. And so that's sort of— that's the start, right? And then from there, it's like, okay, now that I have this momentum, like, what the hell do I do with it?

Yeah. So what defines momentum for a small business?

Say that again.

What defines momentum for a small business? How do you know you have it?

So if first, if you're already generating sales, that's your first clue that you have momentum. Okay, um, but momentum is any way that you're generating traffic, any way that you're generating leads, any way that you're generating sales. You see, in most cases, Mike, when you look at, at businesses, it's, it's not that a business fails because they have a poor strategy. Oftentimes a business fails because they have a momentum problem. Interesting. And, and many times actually what happens is You take— you see this a lot, especially with small entrepreneurs. They start something, they start a strategy, and then they're like, "Oh, it's not working fast enough." So they go to the next one, and then they go to the next one. They're like, "Oh, Facebook ad course? I'm gonna take this one." And they go to the next one, they go to the next one. And so they never take the time to actually build up momentum in one strategy or one area of the business. Instead, they kind of— they start a little fire and they put it out by going to something else. They start a little fire and they put it out. Start a little fire and put it out. So that tends to be the biggest cause for failure in these businesses.

So, okay. But on the flip side of that, if I start something, when do I know that I should abandon it?

Well, so with everything, you want to attach these KPIs, right? So the KPIs let you look at what's working and what's not working. Over time, I think if you've really just spent enough time and money on something— and look, I'm a huge proponent of making sure you're getting mentors because, Mike, I'm sure you've heard this a million times— people will tell you, you know, "Ah, this doesn't work for me." But they're giving up too early because just because they might have tried one or two things doesn't mean that it actually doesn't work.

Yeah.

So, you know, find somebody that has the experience and help guide you through it. You know, quite frankly, I think over time, you know, if you put enough time and effort into something and you just can't, can't get it done, um, then yeah, it's probably time to, to look for, look for something else. But most people give up far too early. In fact, I had a mentor of mine, um, I mean, I was literally banging my head against the table. I'm going, ah, I can't figure this stuff out. And he goes, great. I go, what are you talking about? And he says, it's at the closest point that you want to give up at that brink where you're saying, "That's it. I'm throwing in the towel. I'm done," that you're the closest you've ever been to success?

That's an interesting phenomenon. I just took a trip up to tour a business called New York State Solar Power. It's a long name. I was meeting with the owner, Anthony, and they were just on the brink recently of just— he said, "I'm just done." He's like, it's so hard. And then we're going through the numbers. They had prior debt. They were on the brink of eradicating it. Um, they had continual profits. They had taken 3/4 of profit distributions. They'd made so much momentum, but they just weren't over the hump yet. Like they weren't, um, they hadn't finalized all their debt. And, uh, they had an opportunity. Someone was offering to acquire them, but it was like this ridiculously lowball offer. And he was seriously contemplating it.

Why?

I can see as an outsider, like this guy, he's on the brink of going really big. Why is it that entrepreneurs, when they're so close to that turning point or the finish line, feel most compelled to give up?

It's not just entrepreneurs, you know, to pick on that one group. It's really everybody. I mean, you get to this point where it's just so hard and you've put your heart and your soul into something and you just— You have that hard time seeing the light at the end of the tunnel. That's all you're looking for. You're looking for that little bit of light. You just haven't turned the corner yet. And there's all this self-talk and this belief that you can't do it. And, you know, just go on the internet, look at Facebook. You've got all these experts and gurus saying, hey, the reason why you're not here is because you're missing this. The reason why you're not here is because you're not doing it. And then you go look at, you know, these magazines and you say, wait a minute, this person who I have this idea in my head that I'm smarter than this person and I'm somehow better off than this person. And yet they're making 10, 20, 30, 40, 50 times more than I am. Like, I don't understand why am I not doing it? And so all this self-doubt starts to creep in. You start thinking maybe you're going in the wrong direction. And so that's why you kind of veer off and give up too early. And that's why I hesitated when you said, when do you give up? Because I'll tell you from, In all my experience, talking with thousands of entrepreneurs over the last decade, most people— and I'm talking like well over 99% of people— give up far too early.

Now you're the exception to the rule because you grew a million-dollar business at age 24, but also you came from a position of— I think it was a million dollars in debt, right?

Yeah, I was in a million dollars in debt, and just before being in a million dollars in debt, The stress really kind of got to me massively. I was on my way to my house, realized I actually wasn't gonna end up making it to my house because I got this pain shooting from the, the base of my spine all the way up into my neck. And before I knew it, I ended up in the emergency room. I had been setting my alarm at 3:30 in the morning so I wouldn't quote-unquote oversleep. Worked every day, 7 days a week, holidays included. And the result, I exhausted my body, my organs were shutting down, and I was developing this condition that was killing me. So I should have given up by all logical means. I mean, if my mom was there, she would have been like, that's it, go get a job, you know. But yeah, you know, when you're in a million dollars in debt, there's no job that's going to help you, you know, pay that off. You have to make it work.

Ironically, Pat Smith tells Jeremy every day, like, what are you doing on the show? Get a real job.

Yeah.

So what was the— what was the diagnosis? I mean, the doctors say, oh, you have Stevens-Hopkins disease, or I mean, Or they're like, it's a stress. I mean, could they diagnose that situation?

They did give me a term. I don't exactly know what the term was, but I know that part of that term, they wanted to put me on some sort of medication. It's a very similar medication to what they give cancer patients, as I recall. I don't know.

This is—

we're talking now almost 2 decades ago. But yeah, was not a fun point in my life.

So, okay, so there's a perfect example. Like, that's a stopping point. You're dying. Um, and it sounds like you saw it through. I mean, were you really that close to the finish line and making that business successful, or, or was that the call to actually— it is time to call it quits?

If I kept going down that trajectory, I don't think that I would have ever have created a successful business because, see, I I graduated from one of the top business schools in the entire world. I had my dad, who was a successful entrepreneur, that would tell me the secret to success is hard work. I thought I had it all figured out. And yet here I am, only going deeper, deeper into debt, working harder than I've ever worked in my life, and I can't seem to find my way out. It wasn't until this event happened that I was forced to start differently. Or start to think differently. And, you know, I— it was at that point where I actually changed that trajectory. And, um, you know, I think at any given point in time, I was living off the skin of my teeth. I mean, there were days and weeks where I would wake up going, I just need to buy one more day, I just need one more day, something needs to happen, I just need one more day, one more day. And so I would cut a little break, maybe get a month-long more of cash flow, or some days it really was just one more week. I mean, it felt so good to be able to pay my credit card bills. Like, "Oh, thank God!

I've got 30 days left!" Is that the first step to predictable profits? I really want to understand what strategies we can put in place to achieve predictable profits.

So, you know, when you have that momentum, when you're generating traffic, leads, and sales, you know, it's so simple that it's almost embarrassing. And unfortunately, it did take me over 10 years to figure this out for myself. Like, on that first million-dollar business that I created, like, it was putting it together without realizing that I kind of had it figured out. It actually took many years later before I actually said, oh, wait a minute, now I know how I did it. So once you have this momentum in your business, the first thing you have to look at is, you know, what, what am I doing that's, that's working, and what am I doing that's not working? And you go into this phase of what we call optimization. Now, this is something that I learned from a protégé of Dr. W. Edwards Deming, a guy who created billions of dollars in process improvement, made more money than, you know, any other person that I'm aware of because he influenced the whole world. And so you start looking at everything that you're doing, every tiny thing, and you start saying, you know, what's working, what's not working, and you optimize it. And you put these KPIs, you understand the impact. Most people— Mike, you're like, you know, you're one of the foremost experts in, in numbers and whatnot, so you understand the importance of, you know, having KPIs and, and something to track. And so when you have these KPIs, you can know what the impact is. And But the problem is too many entrepreneurs are playing this game of guesswork. So you have the KPIs and you look to optimize it. That's the first step, optimization. I mean, just last week we helped a client find $2.38 million within a 1-hour phone call very simply by doing this optimization phase.

Wow, I hope your deals are 50% of what you find.

Yeah, wouldn't that be great?

All right, so I have momentum, I see in my business Now I start going at a molecular level. I'm optimizing. What's next to getting to predictable profits?

Well, as an entrepreneur, you're juggling a million balls in the air. Oftentimes you're doing marketing, accounting, customer fulfillment, the whole deal, right? And so, Mike, have you ever watched a juggler juggling, say, you know, 10 balls up in the air?

Yes.

What happens when they drop one?

Uh, they, they— well, they get distracted and they start usually dropping more.

Right, they end up dropping them all. And so that's why we go from optimization to the next phase, to systemization, you know. And this speaks to your book Clockwork. I love that book, by the way, one of my favorites. But you know, it, it speaks to the book and the importance of having the, these systems and building a business that's not dependent on you, so you continue working on your business. And whether that's a fully automated system, whether that's a hybrid of automation and manual work or full-on manual work, but it's all documented with processes and systems. And so then you have— so you have optimization, you have systemization, and then the last phase is innovation. Now innovation can go in many different directions. In one direction, it could be let's start a brand new profit center. So this is where you start a brand new strategy with no momentum. You could start one, right? That's one area that you can do innovation. The other thing, and this is the part that's almost always forgotten, especially by small businesses, is the idea of how do you stay more relevant to your customer or client. If you were to ask me, hey, Charlie, what is going to be the competitive advantage over the next 10 years? I would tell you in one word, relevancy. There's more competition right now than ever, ever before. There— and so what's happening is I think it was Peter Georgescu. He's the one who first came up with the statement where he said, "Commoditization is the cancer of the 21st century." And it's becoming harder and harder and harder for us to create our unique advantage point or our unique selling proposition. And so the way that you're going to do it, because there's so much competition, there's so much overlap, is how do I become more relevant to my customer or client than any of my competition out there? So that innovation stage is going to help you figure out what do I need to do, what other product or service can I add that's going to help my client achieve the ultimate result that they're after.

Now you've helped companies grow like super quickly, the Inc. 5000 list and so forth. Here's one not so well-known but secret about some of those businesses. Their revenue is growing, but a lot of them are struggling with profitability. How do you achieve rapid growth and sustain profitability, or is it even doable?

Well, I mean, so this is all going to depend a little bit on the business, right? And, and some businesses, when you go through that optimization stage, you're actually finding ways to, you know, increase their conversion rate without spending any more money on marketing and so forth.

Yeah, right.

So that, that you, that you can create an enormous amount of growth and your profitability is growing at the same time. But then as you start moving from, you know, optimization to systemization to now innovation, most, most entrepreneurs kind of put that up front. That's why they're like, oh, let's develop another new profit center and let's go another one, another one. But that takes more time and money than if you focus on the optimization. So the innovation stage, when you get to that point and you're looking for those breakthrough profits, that's when you got to be saying— that's— you got to be willing to say, you know what, we're going to reinvest many of the profits that we already have into our business back into growth. And so, you know, that's, that's where, uh, you know, that part's fine. But, you know, when you look at profits, right, profits are— this is, you know, your, your food, this is your— that what's in important for the life of your business. You can only go so long without food, right? You can only go so long without profits, but over time, eventually it's going to catch up with you. So profits are essentially, you know, that is your lifeblood. That's what's going to keep you alive and above water, right?

Right. There's no question about it. So, and, and I preach that you've seen so many businesses try. So I'm just curious about your perspective. Is there some indicators when you look at a business, but particularly the entrepreneur, that this entrepreneur's got it? They have the potential. She's going to go the distance. Or I should say, and do you see certain entrepreneurs like, you know what, they're unsalvageable? I'm just curious what the tendencies are of the entrepreneur that you see dictate predictable profits versus predictable kind of failure.

Oh, this is like one of my favorite questions to answer, Mike, because I'm telling you, I had the opportunity to work with so many entrepreneurs over the years and I share the same information with everybody and yet even though I share the same information, there's those people that go off and like you said, will earn their spot on the Inc. 5000 and then there's other people that just can't manage to get anything. So that was a big struggle. What is the difference? It comes down to The very first time I have a conversation with somebody, if I say, "Hey, you know what you should do?" or "Here's an idea," and the first thing they say is, "Yeah, but," right away I know they're done.

The yeah-buts. I love it.

That's what we call them in my company, yeah-buts.

I love it. It's so funny. I took a class in improv and they said never use the word "but." It's always "and.". So it's yes, and to continue the story. And the whole idea in improv is that there's this continuance that keeps on building. But the second you use but, you start to bring conclusion to the presentation. So it sounds like the same thing in business.

I have the perfect example. One of my clients brought in this super, super rock star salesperson into his company, his sales manager. And he says to his sales manager, look, here's our target. We want to make $1 million this month. And so the sales manager, again, huge stacked resume and whatnot, says, yeah, but you know, it's the summer months and yeah, but we don't have this particular person here. Yeah, but yeah, but yeah, but, and so 2 weeks into the month, my client calls me up and says, look, what do you think I should do? We're at $15,000. And I said, well, I think you already know the answer to that one. And he's like, yep, no problem. And so he ended up firing the guy. And I said, so what about you now? Now you're back in the shoes of the sales manager. What are you going to do? And he said, I've got, you know, $985,000 to make up. And I said, so what are you going to do? And he goes, I'm going to do it. And there was no, yeah, but there was no, oh yeah, but there's only 2 weeks left of the week. I mean, 2 weeks left of the month. There was no, yeah, but he's like, no, I'm going to do it. And he ended up, I think he finished the month, if I remember right, it was like $975,000. So like really, really close. Really, really close to that million. But this guy, he's always been like that. It doesn't matter. There's never an excuse. It's always, "I'm going to do this, period." See, a lot of people, they end up having these goals. We all have goals, right? But a lot of people have these goals and they go, "Alright, I want to make, say, $1 million this year." And they make, I don't know, $800,000. And they go, "You know what? That's pretty good. I came close." But this guy that I'm referring to, his name is Michael. This guy, there's no such thing as coming close. You either do it or you don't do it. And there are many times— I learned this early on, and I, this, I actually, you know, sometimes a teacher becomes the student and whatnot. So when we first started working together, he was looking for this goal and he came really close, like within a couple thousand dollars. And I'm like, dude, that's a great job. And he goes, it's not a good job. And I go, what do you mean? He goes, I didn't hit my goal. And he's so dead set on hitting the goal because you know what? What happens when you get comfortable failing to hit your goal?

That becomes the new standard, right?

Right.

And you build a habit of failure. Yeah. So if one month you're okay missing it by a couple thousand dollars, then the next month you'll be okay missing it by tens of thousands, then $50,000, then $100,000, and so forth.

I was watching a documentary on the Foo Fighters. It's a band I'm into. Uh, and, uh, what's his name? David—

what's his last name?

Grohl.

It's a band I'm into. I don't know his name.

I'm into him. I said David. I couldn't remember his last name. Jeremy, you're jumping down my throat. But he's just— he's got this attitude like it's got to be right or not. And he had to make some hard decisions in changing the band around to perform at the highest level. But now they have so many hit songs. I mean, they're going to be one of the kind of those bands that live on, like Led Zeppelin or something like that. They have such a catalog of miraculously powerful songs. Hey, Charles, we actually gotta rock and roll. Now I'm looking at the clock. So before we let you go though, I want to know how our listeners can pick up your book, The Predictable Profits Playbook, and also to learn more about your coaching services.

Awesome. Well, the book is available at all major bookstores. Of course, Amazon probably being the biggest and most well-known. So Predictable Profit Playbook. Predictable Profits Playbook on Amazon, and then you can find me and learn more about our methodologies and whatnot over at predictableprofits.com.

I'm telling you guys, Charles knows his stuff. Check out his stuff. For God's sake, pick up his book right now.

For God's sake.

For God's sake. For God's sake. Uh, yeah, but I don't have the money. Ah, see, you can't say that, Kelsey. All right, Charles, thanks for joining us today.

Thank you.

Thanks, Charles.

You can't touch this. I'd like to have him back. That was some super smart stuff. We could have gone on for a long time.

Yeah.

Um, Kelsey, I want to learn what you learned. I want to do— do we have listener mail today?

We do.

And we got our game. Uh, first, I do want to thank our core partner Nextiva. Yeah, but I already have a phone system. Are you kidding me? You don't have a Nextiva phone system. Do we? We gotta get you him a phone down at his, uh, place.

We got to.

Do you have anything?

I don't know why we haven't done that yet.

I was curious, in the meeting, did they, uh, roll out, did they use any of your, your new ideas for the phones?

For the phone upgrades? Yeah. So the tornado warning system that makes cat meowing sounds, I don't know if you remember that episode. Um, they really were grateful that I'm promoting that feature. Um, the fact I promoted that they have the TrueVoice system where the other person on their side actually hears your actual true voice. They were really disappointed I was sharing that. And then the fact that I said that they've come out with phones other than the color black. Um, they were not happy about that.

They didn't actually, they didn't actually mention any of that, did they?

Did they really? Uh, the marketing guy says, yeah, he goes, you know, we, I know you're joking around, but, uh, I think people are getting a misperception. And I said, um, yeah, but the new feature you've come out with is so impressive. It's, you've broken the cord. It's called the, we've broken the cord and they now have a phone that you can put your ear in through. I don't know if it's some kind of ultrasonic wave pattern. But you can speak to other people without a cord connected to your phone.

Amazing.

Unreal. They call it cordless, which I thought was a horrible name. I call it the ultrasonic connection. Nextiva is the only company to have it, so go to nextiva.com and get, seriously, a powerful phone system. Alright, Kelsey. I wanna know what you learned today. Oh, a double!

Ooh, fancy. So my favorite aspect was talking about relevancy, 'cause I feel like it's so true in such a saturated market. Not only are you building that relationship more effectively, but I also think you're— it forces you to become more integral, um, with your business. So if you're relevant to them, you are actually serving them in a better way.

Yeah.

And I think it also requires you to always be upgrading your business, right? Because relevancy is not based upon a static business, right? Yes.

Yeah.

Is your business— are you selling jewelry still, or is that— I'm not. You've put that on the shelf?

Yes, until I do my basement.

Oh, until you finish your basement. Yeah, yeah, yeah. Jake Blone.

Yes.

Um, Pat Smith wants to know— does she?

This one's for you, Ma.

Um, it sounded like the beginning was Landslide by Stevie Nicks. Oh yeah, this one's for you, Dad.

Uh, the fact that, uh, when you fail it's usually not because of poor strategy, it's because of a momentum problem. And when you feel like it's— you're just not getting there and you're ready to give up, then that's when you're the closest. Yeah, I just— I think that's, that's really awesome if you just kind of keep that in your head and keep pushing, pushing, pushing.

Yeah, so I'm gonna, um, piggyback off what you said. The momentum to me was my— definitely my big aha. Uh, you know, my, my perception was predictable profits is from And he mentioned things like organization, systemization, but it all starts off with momentum. And if you have momentum, he said, in sales, traffic, or leads, you have a business that's, that has a foundation for profitability. I've actually never heard someone talk about that factor first. So I thought that was remarkable. We wanna know what you, my dear listening friend, think was remarkable too. You can, uh, rate us and review us and, and add your notes in any podcatcher that you're listening on. All right, Kelsey. Uh, we got a game. I know, I know, I know. We got a game we're gonna play. It's a little riddle.

Okay.

I, I was waiting to have a week where Amy wasn't here because she's a riddle ruiner. Last time I was here, I didn't even finish the riddle and she blurted out the answer. I hate people like that.

I don't think she ruined it. I think she's just smarter than you.

So I was watching a documentary on The Price Is Right on Netflix, and there was a guy who They called it The Guy Who Knew Too Much. Yeah. Do you know what I'm talking about?

I saw it. I didn't watch the movie, but I saw the clip for it.

So there was this guy who spent every day of his life studying The Price is Right TV show and their pricing. And he would sit in the audience and The Price is Right would allow you, and still does, the audience to shout out suggestions to the contestants. Yeah. And what he noticed was that The Price is Right would have maybe 1,000 items that they kind of circulate through. So a refrigerator and the whole game of Price is Right is the contestants have to yell out the price without going over for that unit. And whoever's closest wins an award. Well, he memorized the list of 1,000 things. So they're like, Bob Barker's like, and here's the brand new refrigerator. What's the price? And you hear the guy in the audience, he's like, $996. And he was nailing it one after the other.

That's awesome.

Yeah, I don't know why I went down that tangential path. Well, he just reminded me of Amy. Like, he ruined it. Like, he— like, no one can have any fun. Like, everyone's like, $9.96. Like, yes, it was $9.96. Even Bob Barker is like, what a tool. Here it is, the riddle of the day. A doctor and an entrepreneur— oh, dude, this one's for Pat. This is so perfect. This is true. It's in the text. I'll show you later. A doctor— Pat Smith, this one's for you. A doctor and an entrepreneur are both in love with the same woman, an attractive girl named J Bone. It's in the text. That's her name. So it could be a female name. I didn't know that. The entrepreneur had to go on an out-of-town trip that would last a week. Before he left, he gave J Bone 7 apples.

Why?

So listen closely. A doctor and an entrepreneur are both in love with the same woman, an attractive girl named J Bone.

This is so confusing because you're using J Bone as somebody who's in love with the person, but then you're talking about my mom. It's like just skin.

Is it a horse? Yeah, I'm very confused. We'll call Jessica just to make it easy for you. Okay. A doctor and an entrepreneur both in love with the same woman, an attractive girl named Jessica. Who else has white tablecloth? The entrepreneur had to go out of town on a trip that would last a week. Before he, the entrepreneur, left, he gave Jessica 7 apples.

Why? An apple a day keeps the doctor away.

Boom!

Boom! Nailed it! Nailed it. Yeah, when your name was in there, you're like, she's so attractive, J-Bone. Pure beauty. Pure beauty. All right, Kels, uh, listener mail. Let's get the hell out of here. Okay, sick of today's episode. No, you guys just ruined everything for me. I, I try to make this fun.

I pulled a Kelsey with the Dave Grohl comment. I'm sorry about that.

You didn't— well, you didn't— oh, you did. Yeah, yeah, yeah, yeah, yeah. I was nice. Yeah, you were like—

I know, you gave me a dirty look like Yeah, isn't that funny?

Just as another, yet another side on our show, is Kelsey will attack, but when someone else attacks, Kelsey, yeah, becomes protective. If she's not attacking, she's not happy.

She's the only one who's allowed to attack.

Mama Kelsey. What do you got there, Kels?

Okay, so this comes from Ryan Riger. He writes, we buy and resell products, so we have high input costs. I subtracted the cost of material to get the real revenue. The TAPs for my real revenue match pretty close with the historical data for our company, although we have room to improve. My question is about allocations. The money in the income account should be allocating according to TAPs, but since I am using real revenue, how do I allocate the money in the income account? It seems like I should be deducting the material costs, but if I do this, some periods will have a negative amount. Do I draw money back from the other accounts on months where the real income is negative?

Wow, that's a long, almost a loaded question, but it really isn't. We need to set up a materials account. So if you're making an adjustment from income to a real revenue, and say your materials, the percentage you determine on an annual basis is 25% of your income is used to procure materials, set up a materials account and put 25% in there. So the income comes in, we'll say $1,000, 25% would be $250, You transfer to the materials account. Now, the $750 remaining in your income account is your real revenue, and then you do the allocations accordingly.

Ah!

That was good. Mwah! That was good. Kelsey, is that it?

I think that's it.

Oh, the music's coming on, it must be!

But don't forget to subscribe or rate and review us wherever you're listening.

Hey, and why don't you come out here to my office? I'd love to hang out with you and maybe have some fun conversation. Kelsey can peek her head in and— ruin it for us. You know, if you come to Profit First Live, we'll talk about Profit First, make sure you're doing it right and drive profitably in your business. We can explore the other stuff we're doing too. Clockwork about systems, Pumpkin Plan about sales growth, Fix This Next, the entrepreneurial compass. You know, and the starting point is go to profitfirstlive.com to get that. And if you want all my free resources, you can get that at mikemotorbike.com. All right. That's it. We'll see you guys later. Bye.