Fast growth strains your accounting and legal teams. The speaker warns about tax overpayment and recommends the profit first method to keep finances clear when scaling quickly.
So one of the hardest things about managing rapid growth in a business is having your legal and accounting team keep up with you. When our business is really young and new, we were doing 20, $30,000 a month. We had an accountant, a bookkeeping team that could handle that. However, when you start to get bigger, keeping those same accountants is a real fucking problem. We grew so fast that we outgrew our accounting and our legal team. So what happened was that we ended up being really far behind in reconciliations and all that kind of like really boring stuff. But it meant that me as the business owner just did not have the information required to be able to scale it effectively. In a 12 month period, I ended up overpaying taxes by $700,000. And I was left with not really having an understanding of what the profit and net profit and gross profit and all that kind of stuff is. But thank God I use the profit first method. If you don't know what it is, go and look it up. Because it saved me from crashing my business from growing too fast.
