The mistake that cost my business $700,000

Hey, guys, what's up? Matt here. And this is about how I made a mistake that cost me and the business $700,000. And if you watch all the way through the end of the video, hopefully you won't have to make the same mistake. So make sure you, like, subscribe, hit notification bell, all that kind of good stuff. And we'll see you after the intro. All right, guys, so I made a mistake. Me, the business owner, Matt. I made the mistake that cost the business $700,000. And you may be asking, Matt, how did you do that? You. The answer is that we scaled so quickly and so aggressively, and my focus was 100% on that, that I kind of let go of some of the things that are going to allow you to keep doing that. Okay, and what are those two things? One is accounting and one is legal. All right, so the mistake that I made was we had a very small bookkeeper and we kept them for far too long. The next mistake we made is we had a small accountant and we kept them far too long. And they ended up getting so busy, so stone under. And even though they were trying their best, ended up sort of diverting to practices that were, let's just say, suboptimal. Right. Resulting in US misallocating $7 million worth of revenue to the wrong place. The specifics is not super important, but it ended up in US overpaying $700,000 in tax. All right? And that's in a 12 month period. So now we will get that back. We have some great guys on board. Now we're going to end up getting a really nice tax credit, which is great for everyone involved. But the point of today's video is that these are things that can really stop a business. That's capital that I could have used to, that could have driven the business even harder. Now we went from $20,000 a month in January of 2020 to by the end of the year, we did about 400,000amonth. And then by the end of that year, the next year, we were doing well over $1 million a month just simply for the sales size of the business. So we managed to grow to about eight figures, and I think it was under two years. What are the ramifications of this? Right. When you have really, really rapid growth, the hardest thing to do is to keep the wheels on. And the things that keep the wheels on board for a long time is having the right accounting structures in place and having the right legal structures in place. We're not going to go into legal entities but the accounting structures is essential. The only reason why, even though we overpaid, I've still managed to kind of run it a profit and do all this kind of stuff is because we use what's called profit first accounting. If you don't know it, make sure you go and look it up. We'll put the link somewhere in the description to that book. It's essential that all entrepreneurs actually read that book. All right? But by me as the business owner not catching the mistakes that this bookkeeper and accountant were doing earlier, it meant that we had a lot less capital to be able to grow the business even more aggressively. But it also meant that the business just wasn't running optimally. So then what we had to do is kind of say stop, stop, stop, right? And then hire all new accountants, which we did with the direction of our, of one of our new board members. So we hired all new accountants, one of lawyers. Now there's a lot of manpower and resource at sales sniper being used to go backwards, right. And we're all about moving forwards. And so that's a very frustrating for me as the business owner to kind of realize that my lack of attention to detail, which is definitely not my strong suit, right? My, my lack of attention to detail and having the correct oversight processes in place for this particular side of the business resulted in not only overpaying nearly seven figures and not having that money to use later, but just now there's just this huge allocation of time and resources and people that are just focused on going backwards. Our new accountants are costing us 20, 30,000 bucks a month. And then plus we had to hire another full time bookkeeper just to go back in time so we can continue to move forward. So these are really frustrating things. And I think as we grow businesses quickly and everybody wants to scale really, really quickly, these are things that can really stop and prevent and make the wheels fall off. So what I want you to focus on is if you are looking to grow your business quickly, you are looking to scale, is make sure that you dress for the job that you want, not the job that you have. Okay? So make sure your business is set up for the business that you want, not the business that you have. And obviously you can take that too far to the extreme. But I think you guys know what I mean. Where make sure if your plan is to get to 100k a month or 300 or $500 million a month, whatever it may be, make sure that you have a think about can your accountant, can your bookkeeper, can your CEO, can your general manager, can your delivery systems actually withstand that level of income? What does it look like in the back end of the business from a net and gross profitability to be able to know that you can do that one like over the long period so you don't just like a dying star, you kind of flash in and flash out. And second of all, that you can do that whilst maintaining good margins and actually have proper accounting strategies because you never know, you might want to sell it one day and you're going to have to have really, really good books. Okay, so learn from my mistake. Make sure you're actually paying attention to stuff. Make sure you dress for the job that you want, not the job you have. And for God's sakes, make sure that you have some oversight over your accounting team to make sure you're not overpaying tax like me or even worse underpaying tax like some of you might be. Thanks guys. Hope that helped. See you in the next video.