Episode 106: Implementing Profit First with Frank DeBenedetto and Ralph M. Rivera

Well, this is the Profit first podcast.

And you're listening to episode 106. Oh, my.

That's how we return to the earwaves, or airwaves. Welcome, everybody, to the show. My name's Chris Curran. I'm the founder of Fractal Recording.

Yeah, and this is how you bring the energy, you bring the air horn. And I'm Mike McCalla, the author of Profit first and the brand new book out there. You've probably heard of it by now, Serge. Make sure you pick up a copy. And I'm joined studio by Christina Bulduk.

Hello, gentlemen.

And you are listening to the Profit first podcast. This is the show where we discuss all the elements of profitability. We talk to experts. Actually, didn't we talk with Kirby Husserman recently about how joy brings money? We did, and we talk with experts. We talk with people who have experienced profit first in their business, and they share those tips. And we experience people that are just starting out. And I share my tips.

Yeah, man.

Well, today's episode, we're going to discuss. Someone has had a good success story because they implemented Profit first day one when they started up their business.

That's amazing.

Yeah, that's when you should do it.

By the way, right? Day one, day zero. Well, that's right. This is a great show and you can find it anywhere. You hear podcasts and itunes, Google Play, Stitcher, Tune in radio, and of course, the website Profit first podcast dot com. Go there. There's awesome funny pictures of Mike Michalowitz. And even better than those are all the previous episodes that we've done. We've done 105 previous episodes of all these people sharing their stories about profit and how it just trounces revenue in. In the long haul. Because revenue is spectacular, but profit is vernacular.

Vernacular. Vernacular. That's the word. I try to think fantastic, that Ryan. Yeah, vernacular. There you go. It's everyday vernacular. It's every element of your business. That's what. Do that one more time because now I want to say every day, you.

Know, revenue is spectacular, but profit is the everyday vernacular.

Chris, make sure you edit out that prior one.

Yeah, I'll edit that out.

Okay.

Yeah, so that won't happen. Dude, what have you been up to, bruh?

Podcast movement, my friend. Yes, we just got back one of our guests. Well, we'll introduce him later.

Oh, that was. That was my sound effect.

No, I tried to play Barry, but the faders down. Hold on. What am I doing? See?

What are you doing?

Podcast movement really worked out well. For you.

Yeah.

You come back. A lot of training.

He forgets the name of our own show, he forgets the script. He's a fader down.

If I could make a suggestion. Maybe Chris needs to attend podcast engineering school.

Oh, that was a slap to the groin.

Which is the school I'm starting. No, but yeah.

Hey, one more thing. When are we going to start recording?

So.

So podcast movement was Great. Next year, August 2017, Mallowitz. 23rd to 25th August.

Oh, can you write that down?

It's right. They're having it literally right across the street from Disneyland in Anaheim, California.

Cool.

And you should speak there. Anyway, podcast movement, that was fun. What are you been up to, my brother, dude.

So I found this new app, Ms. QRD, I think it's called. It's kind of like this Snapchat thing where you can put different stuff on your face, but you can do with video too, you know, talking about Chris.

Oh, like when you do the fake beard.

Yeah, yeah. So I did his fake beard. I posted on Facebook and like people are like, oh man, nice beard. Like always. Yo, you really grew it out and stuff. And then somebody like, no, that's a fake. So then I did a video with this application so you can move your head around and it looks like a beard and be like, holy crap, you grew a beard. How did you do that in like two days?

Magic.

So now people think I'm the bearded wonder. So msqrd, It's a fun app. It's a fun app. It's a very self fellating app because you sit and stare at yourself for hours.

Did you just say self fellating?

Self fellating as opposed to other person fellating?

Articulating.

Where is it going?

It's a ma. A type of app. You sit there.

So it's that kind of podcast downloads.

Are going through the roof.

This is. This is. I'm being. This is an acronym. It's I'm being proverbial. I'm not saying you actually sit there. There's no self deedle. I'm saying that this is. It's. It's you. You become infatuated with yourself. You be. When you're staring at your beard and oh, you're longer beard. He's narcissistic. It's very good for narcissists. Yeah.

Okay.

And you look like Chuck Norris, by the way. A little bit.

I do kind of look like Chuck.

Yeah.

So we have a shout out, by the way. Oh, yeah, yeah. For the podcast. This comes from Mitch Milam. And he said he cannot believe he waited this long to figure out what Profit first was. He says that it's changing the way that he runs his business and his financing. And while he just started, he can already see it making a huge difference in his personal business and the way his business runs their finances in the future. So shout out to you, Mike Milam. And he. Or, I'm sorry, Mitch Millam. And he actually came to us. He heard about Profit first through the Solopreneur Hour podcast that he did with Michael o' Neill.

Oh, my God. Oh, thank you, Mitch. I appreciate that. That was a blast. That's one of the podcasts that I insist you listen to. Solopreneur Hour, Chris. You know, one thing I skipped over was where people can find us. By the way, do you mind sharing that?

Yeah, they can find us everywhere. I already said on itunes and Stitcher and Google Play.

Oh, you did?

Oh, yeah, yeah, I did.

That's like one of the first things he always says.

Oh, okay.

By the way, since you look like Chuck Norris, I just want to read this off the intern. Some magicians can walk on. I'm sorry, some.

I already have a booger flying out. These are so funny.

Some magicians can walk on water. Chuck Norris. Chuck Norris can swim through. Through land.

Oh, my God.

Chuck Norris once urinated in a semi trucks gas tank as a joke. That truck is now known as Optimus Prime.

Oh my God.

Oh my God. I love Chuck Norris jokes. All right, listen, we. We got to get serious. We got to discuss some profit. We're going to explore a business called Audit Sales Presentation Systems. And we're going to talk about how they implemented profit first from the beginning. But before we bring on our two guests, I want to thank our corporate partners who make the show possible.

Shout out.

So shout out to Fundbox, Nextiva, Fundera and Receipt Bank. And also in Xero just came on recently. Thank you, Zero. But they're really sponsoring another show. But we'll give them a little shout out here too. So we'll give you more details on all four of those companies and where you can find out also more about Xero at the end of the show. Now let's bring on our guests. Two of them. Meaning two guests. Yes, friend. Friend. Frank is friends with my friend Robin Robbins. We met down a couple years ago. I was speaking at her events, the Technology marketing Toolkit. He had a business at the time called Two River Technology Group, which he continues to run. But he decided around then to start another business. It took him About a year. But about a year ago, he started Audit Sales Presentation Systems. So Frank Benedetto teamed up with Ralph Rivera, and together they've started this company, and they've implemented Profit first from day one. And we're about to hear how they did it. Frank and Ralph.

And the crowd goes crazy.

Yes. Welcome to the show, gentlemen.

Hello.

I'm very pleased that you mispronounced his name but pronounced mine correctly.

It wasn't Benedetto. D. Benedetto.

Benedetto. Michael, it's okay.

Oh, my God.

Everyone does it.

Does everyone do that?

Everybody does it. That's okay.

Yeah. No, it's not. Listen, my name gets bastards all the time.

Here's one for you, Frank. Chuck Norris once kicked a horse in the chin. Its descendants are known today as giraffes.

Oh, that's funny. So, Frank, I want to start with you. You started a new business. I know you were running your tech business, Two River Technology Group. What inspired you to. Or why were you inspired to implement Profit first from day one?

You know, I think the easy part is trying to figure out how to try to make some money, but the tough part for us was trying to figure out how to get the money out. And, you know, I knew once we start getting it, it's going to get emotional, and we had to figure that out quickly. So Ralph and I had some discussion about what we should do, and we started, you know, putting numbers on paper and getting kind of crazy with it. And then I just said, we need a break. So I went home, and I just walked past my bookshelf, and I see profit first sitting there. And I said, duh, why don't. Why wouldn't we do this from day one? I guess a lot of people figure, you know, you need to do that on an existing business. But we decided, let's just do it from day one and, you know, go from there.

Well, just tell me about the emotion of taking money out. Tell me more. What does that mean? Do people get caught up in the spending part and never think about taking out? What do you mean by the emotion?

Yeah, I mean, when you're bootstrapping a business, both partners are putting money in, and we're kind of worried about how are we going to get the money out. Where's it going to come from? I think when you start making some dollars, it gets emotional. So we wanted to have that hammered out before we got to that point.

That's a great point.

So, Ralph, Frank came to you with profit first. I presume it was new to you at the time, what was your thoughts about that strategy?

Yeah, I mean, I think that we had stood in front of my whiteboard for a couple of hours, kind of talking it through, and we had some good ideas, but we needed something to kind of crystallize it. And when he came and presented profit first, it kind of made sense. You know, it wasn't so much of a departure from what we were talking about, but we didn't want to reinvent the wheel. And we know that a lot of research has gone into it, so we just decided, you know what, this is a good approach for us to take. And to Frank's point, the one thing that we didn't want to have happen was once the money started flowing into the business, now all the partners start looking at each other and start figuring out, well, how do we now dip our paws into the bank account? We wanted all that stuff sorted out before we really made $1.

Yeah. And part of the other problem we had was, you know, we have a couple 5% partners. They're smaller and they're worried how are we going to get paid? So they thought, you know, we're just going to get 5% of any money that comes in. And, you know, this helped us sort through that because instead of dollar amounts, we're dealing with percentages and just kind of took some of that emotion out.

So tell me about the structure of the business. I know off air, you were saying there was five partners in total or six, Correct?

Yeah. Ralph and I are the majority partners. We're the co founders. And then we have two other partners, which are both 5% partners each.

Okay, so there's two primary partners, you and Ralph, and then there's two 5% partners. Do they feel that, were they expecting 5% for each of them or 10% total, but 5% of the total top line was gonna go to them, or did they assume it was just profit and were they concerned that you can kind of manipulate profit and determine what you wanted the number to be? Like? What was their perception, do you believe?

Yeah, I think the perception was that, you know, at the end of the day, they're just gonna make 5% of, you know, whatever came in after expenses. So, you know, they were worried about, well, you know, we're working pretty hard, and you and Ralph are majority partners, so you guys are gonna make the landslide of the money here. And, you know, we showed them profit first, and we kind of ran a model. They started smiling. And they also like the fact that the taxes were already included in there. So, you know, many times when you're talking about money, everybody's thinking, well, it's really less than that because now I gotta pay some taxes. So they were kind of thrilled to see that we included the taxes in there. So it made everybody smile. It kind of made it a little bit easier for us to move forward.

Now, is everyone working in the business, or are some folks just equity investors, or how does that work?

We're all working in the business to various degrees. And that's where that owner's pay percentage came in, which is pretty cool because now we can just vary that. So we kind of vote quarterly on those allocations, and we can agree and we just get to work.

Okay, so this is really an interesting model. So profit first. A lot of folks that implemented are a solo practitioner. Maybe they have one other partner, but in your case, you have four hands that have to be raised, I guess, for voting. So tell me how it works in decision making. Do your minority partners know the pay that you, Ralph, are taking and what Frank is taking? How does that all work?

Yeah, we have 100% transparency. We have a QuickBooks account that everybody has access to, and then we have all the segregated bank accounts. And when we get paychecks or checks. I don't know. Paychecks is the right word. Whenever we get checks, we get an actual full accounting of all the money that's going into each person's check. And we also each see each other's, or rather the business's expenses. So in terms of what I have put in, in terms of dollars, everybody knows that. In terms of what Frank has put in, everybody knows that. And then in terms of what the distributions are, everybody knows that as well. So everybody has full transparency in the business.

Interesting. So does everyone agree to what everyone's individual compensation will be? Does Ralph, everyone know how much money you'll be taking out and Frank as a paycheck and then also understand what the predetermined profit percentage is going to be?

Yeah. So what we've done is we have a. Since on day one, we really didn't know what we were going to be making, we came up with an interim percentage breakdown for the owner pay and distribute all the distributions. We figured out here's what we're going to do, and everybody agreed on that. And then what we agreed to subsequently, as Frank mentioned before, is every three months, we go back and we reallocate those distribution percentages so that as the business evolves and things change, everybody has a say into the ongoing evolution of the business.

Gotcha. Okay, so let's start now from the beginning. So you're day one, you implement this, I presume there's no sales. It's a year later. How has this transpired from your original vision of the implementation of profit first to where your business is now?

Well, the timeline is a little more complicated than that because we started the business in April of 2015. April, yeah. But we actually didn't start selling the product until. What was it? Was it April or May of this year?

Yeah, it was May this year.

Yeah. So the prop at first really didn't come into play until April or May of this year, because the first year of the business really was focused on the development of the SaaS platform, the software as a service platform, and trying to figure out how we were going to take our ideas, or in this case, Frank's ideas, and actually make that a software as a service platform. So we spent a year pretty much almost exclusively working on the app. And then once we were getting ready to launch, that's when the profit first stuff came in. So when we say day one, it's not really day one of the business starting. It's day one of the business kind of going public and selling and releasing. Not going public in the stock market sense, but going public and actually releasing the product. Because up until that point, everything was sweat equity. There was no real. Well, that's not true. We had invested some money in the business, but for the most part, it was mostly sweat equity without any money coming in.

Yeah. The defining moment was when somebody actually reached out to us to do some sales. And Ralph and I, we brought him in, we sat down, we liked him until he started throwing some numbers around, and then we didn't like him as much. But what it did was it opened up the question for Ralph and I is what can we afford for expenses? And we had no idea. So we're like, hey, money's gonna come in. And we know we put money in and we want to get some money out, but we have no idea what to allocate. So that's what really started the, you know, the whole discussion about this.

Yeah. And since Mike likes transparency, I'll mention one thing. That when we met with that sales manager, his pitch to us. And I'm not going to name names, but I will kind of relay the numbers because I know you like the details. Yeah, yeah, the details. Here was his pitch to us. His pitch to us was, I will work one day a week in the business, but I'm not going to do sales. I'm just going to do sales management. In other words, I will help you onboard salespeople and then they can go sell. And I want a salary of $125,000 per year and 15% equity of the business. And when you haven't made. I mean, I was gonna say when you haven't made a dollar, but we hadn't even made $0.01 yet, and we're already looking at putting ourselves $125,000 in debt for a person who's gonna work one day a week and then ultimately not really do any sales. That just didn't make sense to us. So all of that kind of factored into, you know, I'm compressing this. This was over, you know, a period of time, but all of that just didn't make sense. And again, once Frank had kind of really taken a step back and taken a breath and looking, looked at the profit first model, that's where everything started to crystallize for us.

Interesting. So profit first, even though the implementation of the transfer of funds as it flows through your business only started a couple months back, it sounds like you were using it as an analytical tool to say this. The sales manager, no way. Regardless of his pedigree, it sounds like no way would he be a fit because the numbers aren't going to work out.

Yeah. You know, at the end of the day, even though, you know, on paper, in terms of our shareholder agreement, in terms of our legal, you know, setup of the business, even though we have two partners that are only 5% equity partners, I don't think that on a day to day basis, Frank and I see it that way. We see them as, you know, I know it's hard to say this, but we see them kind of as having parity with us. So to bring on someone that was going to make such a disproportionate amount of revenue for such a disproportionate amount of work, when our other two partners were doing, literally working themselves to the bone, that was a hard sell. You know, if we had decided to go down that route, that would have been a hard sell to make. Frank, if you want to comment on.

That, well, that's another question. I want to know about the structure of the business. So I understand the percentages, but what are the roles of these four folks, you both and these two minority partners? How does that play out role and capacity wise?

Well, Frank is the handsome one.

Nice. That's your job. Just look pretty, Frank?

Yeah, I just look nice.

And you said before the show, he's. What is he wearing pajamas or something?

Oh, yeah. I should mention that in the green room. I explicitly asked Frank to wear pink short shorts and a muscle tee for this show. And he is wearing that. He is definitely wearing that.

That's. That's extraordinary. That's wonderful.

I'm representing Jersey.

Well, nice.

Very nice. Okay, this shows. All right, but tell me about the distribution. Not of equity now, but of capacity, roles and responsibility.

So I'll jump in. So, you know, I've been the visionary on this. I had my other business. I kind of saw an opportunity to develop a tool. And I've known Ralph for a long time, and Ralph's an awesome programmer. So I figured one of these days I'm gonna figure out how to throw a saddle on this guy and ride him and get him to do something.

The visuals with your pink shorts and muscle T shirt, that's freaking horrible.

This show just got so much more sexier.

It really did.

You guys started it.

So you lather them up and then what?

Yeah. So I'm more the visionary CEO. Ralph is the programmer and kind of the integrator, kind of tying all the technology and things together. And the other guys handle operations and sales and marketing.

And what does the software do? Exactly? I'm sure our listeners are very curious, because I am.

Yeah. So in my managed services practice in the technology world, I just found that there was no good way to present in a salesy sort of way based on emotion and not on fact. And unfortunately, we're all technicians in the IT world. So I developed a system that allows you to present all that technical data. And I started having some good success. And my peers started asking me what was I using? Where did I get these reports? And I said, well, you know, I'm kind of doing them by hand and using Excel and some stuff. And they said, this would be cool if we could use it. So I got Ralph together and I said, we should build a system. And that's what we built and have a good success so far.

And how are sales so good success? Quantify that you do sales. How many people are subscribers? How's this working?

Yeah, so, I mean, we've only been doing this for about six weeks live, and we have a little over 200 subscribers that we put on pretty quickly. And what's neat about this is it's subscription income. So we're not used to you advertise and people just sign up. Ralph and I are kind of come from the world where you got to sort of Work a little bit harder for that sale. At least on the IT side we do. So the money kind of rolls in, and that's where we wanted to make sure that we knew what we were doing with it. We put together some pretty spreadsheets beforehand, doing some modeling number of users times average monthly rate. But this allowed us to take it to the next step, kind of pairing the profit first model right after that kind of showed us the input, and then that becomes the output on the spreadsheet.

So now that the numbers are kind of. The money's starting to flow into the business, and you're allocating, can you live by the percentages that you forecasted, or are you saying, oh, my God, we set profit a little bit too high, we actually need to put more into expenses or we're paying ourselves too much? Has any adjustments or tweaks become apparent?

You know, we just followed your allocations, so we said, today we do zero and we're just gonna follow it. Yeah, it's been perfect so far. You know what's been the best part about this is every two weeks, from as soon as we went live, all the partners got a check.

Nice, nice. Really nice.

And they were like, wait a minute, why are we getting a check? You know, we put money in. We're not even. And he said, well, that's how this works. You know, there's an owner's pay distribution, and, you know, they're all smiling, and of course I'm smiling, and I think I'm a genius. Really? You're the genius, but I took credit for it.

Well, the genius is the person who executes this, not the idea. So tell me about that moment. A little more detail. So all four of you have, I guess, some experience with owning a business or some capacity in that regard. The rule of thumb is you start a company and you grind it out for as long as you can until you're almost bankrupt, you're about to lose your house, and then you say, can I get a few bucks out of my business? But you're instead cutting a check within two weeks of starting the business, and you're, quote, unquote, not even profitable. So tell me a little more about their perception. But how do you explain that in a startup mode to be distributing cash already?

Well, you know, I mean, according to the model, you know, we're all working in the business, so money's coming in. You know, we set our expenses to a certain point where we could support that based on those percentages. And, you know, from day one, we're taking money back out. I mean, we all invested some money, so, you know, it's technically netting back against what we've put in. But, you know, I can remember that first we meet for breakfast once a week to get together early, and I show up with four checks. And I remember Ralph looked at me and goes, what's this? And I said, that's your check. And he kind of put it away for a second. He starts eating his eggs, and he comes back and he goes, wait a minute, this is a check already? And I said, yeah. And then we kind of reviewed how profit first worked again. And, you know, these guys were pretty thrilled.

So that's fantastic. And Ralph. So you were kind of on the receiving end again. He put a saddle on you. But what. What was your impression? I assume now profit first goes from theory to practice. Is it working for you? Is it not?

No.

All right, cut the show quickly.

It's a horrible, horrible, horrible idea. No, I mean, it works really well. Thank you, sir. Thank you, sir. I mean, you know, for me, I'm not the money guy. I'm not the finance guy. I don't really like doing that kind of stuff, which is part of the reason why our partnership works so well. Because I have nothing but the utmost respect in Frank and what he does. And by the way, I'm never saying anything nice about you ever again. This is the one and only time. But this was my first. I was with a company called Tribor late last year, and Tribor went out of business because it didn't have a model, let alone a profit first model. And when Frank and I started this business, it was with the intent of creating a sustainable business that could. We could leverage our various skills into making money as opposed to creating a business where we were trying to look for incubators or accelerators or VC funding. We wanted all of us to do what Frank ultimately did, which is sit around a table eating breakfast while Frank handed out checks. That's what we wanted.

So you're already experiencing it. Do you now foresee, Ralph, that this can sustain? Meaning two weeks from now, there'll be a check two weeks from now. And will. Will you be able to still cover all the expenses you have to run your startup?

Well, yes, but what we've done is we've kind of accepted the fact that we need to continue to evolve the business. It's not just a matter of releasing the software out into the wild and then just sitting back while the money rolls in. So one of the things that we're doing is we're bringing in someone to do sales. Not. Not the person we talked about originally, but someone that actually. Mike Brooks, the handsome and delicious Mike Brooks, Chris Curran's boyfriend, as I like to call him.

I didn't realize that.

I didn't realize his man whore. We're bringing him in to assist with some of the. Well, not to some of the sales, but the sales. Because now we have a process down. We know how we're versioning our software, we know how we're managing support. We've got some visual identity and branding, things that are now not on autopilot, but they're beginning to get some real positive momentum. But at the end of the day, with all this good stuff happening, we need to have something on the flip side, bringing in new accounts so that as people either stay a subscriber or decide that they're going to cancel their subscription. We've got growth.

Gotcha. Now, Frank, you have another business, your tech company, the Two River Tech Group. Do you also do profit first in that business?

Yeah, so I was not doing it originally and I actually always had a separate tax account. And that's primarily because every year there was always some surprise. Either I didn't have enough money or one year I overpaid. And it just got really frustrating. So it became easier just to kind of do my own allocation. So when I actually was introduced to profit first, I thought, well, at least I do about 10% of it. And then I started to do the analysis on my own company. So I have an interesting situation. I had gotten divorced a couple years ago, and good old New Jersey says you have to pay some alimony. So that money has to come from somewhere. So my problem when I analyze my business was I actually take too much money out because I had to pay, you know, somebody else some money didn't show up for work. So I kind of separated out a little allocation after, you know, looking at profit first. And it helped me just keep track of this a little bit more easily.

So, yeah, you do alimony first accounting for that business?

Oh, pretty much, yeah.

Okay, so between now that you have the experience of doing one version of profit first with a brand new business and implementing one kind of once you're up and running. Do you have advice for our listeners on when to implement it or techniques to implementing profit first?

Well, I mean, I mean, if it's a startup, I can't see why you wouldn't use this right out of the gate. I mean, it's just. It's just perfect. Because it just sets up, you know, the allocations. And for us, I think initially we were going to get a little bit upset about, like, who made what in terms of a dollar amount. But this became percentages. So, you know, people wanted to make more money. You just needed to increase your sales, and everybody's going to make more. So I think day one is obvious the best time to do it. You know, if it's an existing business, I think it's pretty painful sometimes to do the analysis and to see what it comes up with. But, you know, there's no better time than right now to right the ship and to make some changes.

Ralph, now that you're living it, any other thoughts you can share, too, with our listeners about profit first?

Yeah, so my other business, we actually implement profit first in that, too. And what we did in that one, which we also did with, with Audit Sales Presentation System, is we actually have language in our shareholder agreement that says that the financial model that we're going to follow is predicated on profit first. So all of the shareholders in my business and all the shareholders in this business, with Frank, they all know that profit first is at least the paradigm that we're going to follow. The numbers obviously can change over time, but that's the model that we're going to follow.

So, Frank and Ralph, thanks so much for coming on the show. I want to wish you the best of luck with Audit Sales Presentation Systems. I was going to say the acronym and pronounce it. You know, Christina's acronym is K, E, B. I mean, your initials are keb, so I call it keb.

Yeah.

Yours is asps, which is ASPIS would be the pronunciation.

Wow.

I just noticed that. So I don't want to say that. I won't say that.

Guys, can you bleep that out? Because that's my safe word and I don't want anybody.

Oh, so. So the best of luck with asps. Thanks for coming on the show, and thanks for, you know, busting chops with us. I love doing that.

Thank you, guys.

Thanks, guys.

All right. Yeah, that was. That was way off. You know that it's. Chris, when I go to that extreme, that's when listeners are like, maybe I shouldn't be listening.

All right, let me just. Let me punch you. You feel better?

Yeah. Right in the face. Okay, let's get out of business here. I want to know in just a few seconds what we learned. Christine, I hope I see you got some notes there.

I do have some notes.

I got some notes. And I hope the listeners. You found that. Well, I hope you found your own notes kind of forming here too. There's I think some fascinating insights. When you hear of other businesses doing it. It doesn't matter if you're a brand new startup or an established business. First I want to thank our corporate partners, please. So let me just give a little shout out to Xerox. They're going to be on our other show, GMAP grow my accounting practice. Xero is accounting software. We actually use it in house now. We've been using it for a couple years. I know. That's your first accounting system you're working with, right?

Yeah.

Okay.

Yeah.

Is it pretty easy?

Very easy. Especially creating invoices and sending them out. I mean their whole system. I probably Learned it within 5 minutes how to do it.

It's a truly based cloud. Truly based on cloud based accounting system. So you work from home on Thursdays, sometimes you half day here, you work from home the remainder and Christine is able to. It's seamless and of course that's what you expect from cloud software. But this was designed from the get go on the cloud so it's that much more efficient. If I do one criticism, it's not even a criticism really but the software is developed originally in New Zealand, Australia. So some of the terminology you look at, it's like that's not typical in an accounting system.

What?

So there's a couple words I look in there, I'm like huh? But then I'm like oh, I see. This was developed in New Zealand. It's taken over the United States. It's. It's pretty amazing software. We are thrilled with it. Now let me tell you about our core corporate partners. Please fund. Dara.

Yes.

If you ever need a loan for a business loan, go to fundera.com they shop it for you and they get you a loan information and hook you up with a loan usually within 24 hours.

They'll do everything for me.

Everything.

And they go to all the banks, they check out everything and they give it to you on a silver platter.

Everything. The second one I want to talk about is Fundbox. I'm actually wearing the Fundbox T shirt right now. What's it say in the back? Christina?

Can you see it be audit? You can be.

They are funny and you think they're a comedy troupe when you hear about fund a box with jokes like that, but they're not. They're not. They are an invoice financing company. If you have an invoice that's due to you or many invoices that are due to you, but you're not collecting the funds. Maybe you have terms of net 30, net 60, and your client's taking net 60 or net 200. Fundbox will release those funds to you immediately so you can get the cash up front. Then when you collect the check from your client, you return the funds to Fundbox. It's that simple. Of course, they have a service fee. Whatever they do.

Of course.

But it's very reasonable. It's a great way to manage cash flow. Then of course, we have. I was about to say someone. We have Nextiva. We just ordered another Nextiva phone.

We did?

What's that put us in, like 20 now? But here's the coolest thing. Jackie Panetta had a baby. She came in today.

Yeah, she did.

And she said, I've decided to become a full time mom. And like, everyone's like, high fiverr. That's awesome. So she's not gonna return to work. She brought in her next diva phone. It's already been assigned to another person. And while we haven't set it up yet, the setup is like five seconds.

Yeah, it's going to.

It's going to haulage, I think. Right?

Yeah. Or we can give it to our intern since she's getting a desk.

Oh, yeah. Our new intern can take. Maybe Lisa can take our new one.

Either way, we have two new folks.

Yeah. So maybe Emma some. But we can move it around very quickly. And we will. So that's the power of the system. It's not like someone leaves and they're like, oh, my God, I have to unwire this thing. No, you just plug in the new jack and it gets reconfigured. One, two, three.

It's all jacked.

And the last company I want to talk about is receipt bank you saw me using today. Yeah, you had your two year review this morning.

I did.

And then she made me pay the bill for some reason, so I had to pay for. I had to pay for breakfast. And I scanned in my receipt with receipt bank. That's what it does. It tracks all your receipts and expenses so they're categorized properly and you can get your proper tax deductions.

By the way, if. If she had twins, would she call? Someone should have twins. And name one prophet and the other one first. Yeah, baby.

Ooh, I love it. Like Apple and Bucket wasn't our famous couple. Oh, I think someone. My child, Bucket. You gotta be from la, though. And I'm not. Not. Listen, if you're in la, Right. Now listen to this. You're like, screw you. My. No. When I was in la, I met people with the most unique names I've ever experienced. Apple, Bucket, Wind. I meant over. I'm like, hi, I'm Mike. I'm like, oh, I'm Wind. I'm like, okay, okay, okay. Chris, what'd you learn today?

Well, I. Well, some of the obvious stuff I don't want to say because I think you're going to say it, or Christine is going to say. I don't want to take. I don't want to steal the obvious ones. But here's the thing.

What a cop out?

Oh, right.

No, I'm going deep, my friend. I'm going deep. Wisdom. Wisdom is starting when you need to start. And guess what? One of the definitions of wisdom is to avoid the bad stuff. Avoid negativity. So it's wrong to start a business and screw up the finances so bad that now you need to spend all this time and money fixing what you screwed up. Wisdom says, don't even screw up first. Start now. Don't get yourself in that jam. That's wisdom. Thank you.

That was beautiful. He got triple brown. Oh, what do you got, Christina?

I don't know which tip I want to say. I know there's two that I'm in between, but I'm noticing a little bit of a trend. Like, I know Frank was talking about how great of a programmer Ralph is.

Yeah.

And he knew that at some point, no matter what it is, he's going to be working with him because it's just. He wanted to make it happen. And I'm noticing that it was the same thing with you and Ron. You kept going around and now you guys finally found a fit. And I think there's something to be said for when you find someone that you think is that valuable, don't let them go. Even if it's an employee that's going to be working for you, because no matter what, if their personality fits, you will find their place.

I love it. I love it.

And it's worth it.

I love that tip. That's the winner for today. There's a concept of what they call bench building.

Yeah.

And if you think about, like, a baseball team or any professional team, they have a bench of amazing athletes that they keep in reserve. And they also have ready to recruit people that aren't on the team yet. But if someone gets injured or can't play anymore, they can start recruiting. It's not like. Like someone gets hurt and they're like, oh, My God, we gotta find someone who do you know? They have a list. And that's what I heard Frank doing too. He knew Ralph. He knew there would be a day and a time. He's got talent. It just had to match the opportunity. So I mean, this is exactly what you just said.

Thank you.

And you're like, you get to shut up, Mike. So for me, you know they said they started implementing private first only six weeks ago, right?

Yeah.

And I called BS on that. They implemented a year and six weeks ago. You just. Sometimes money doesn't flow through the business yet. But they implemented it when they conceived the business and started budgeting. And I know they explained all that. Profit first can be employed anytime. Even before a business starts having transactions. You set up the accounts, you run the numbers through. We have a nice fancy Spanish spreadsheet you can download for free. We run it through there. And then you know what your business has to do, right? What they're doing is a reverse engineering profit. I wasn't shocked that two weeks into a business, they're distributing money pay and I presume they have profit now accumulating too, from day one because they reverse engineer it. They said, okay, for us to achieve whatever the profit percentage is and owners pay, we have to do this volume of sales. We have to cut our expenses to this percentage. And that's the only way to do it. And because they're looking at proactively, I'm not surprised. It is a shame because the reality is most companies, most of the folks listening as they build their business, they don't take a penny out. And it goes for months and then years.

We have to change their way of thinking. Because if you're shocked that you're getting a paycheck as an owner, you're doing something wrong.

Exactly right.

Hey guys, I to call shenanigans because you all missed the most important lesson.

Which is that that Chris has a side lover. That was my second one.

But also that Frank is handsome. You all missed that one.

Oh yeah, Mr. Muscles, that's a good point.

Yeah.

Thank you.

Thank you.

Yeah.

You got bride. You got bride. So Chris, where can people, you know leave a rating and profit first?

Profistpodcast.com. that is a website. A website is a place where you go on a computer and you can see a screen.

Hold on, slow down. I'm taking notes. Say that again.

Here it is. We do.

Oh, there you go.

You dial out and then there we go. Did you do one of these things?

Profitfirstpodcast.com that's the website, all our previous episodes. And you can hear our podcast on every podcasting platform out there. Google Play, itunes, Stitcher Tuning Radio. Hello?

That was my connect. I'm still connecting. Almost there. We're almost online.

I'll call you later on the telephone. Do you know what that is? The phone? It's.

Yeah, no, now we're. Now we're on the private First Professionals website.

Oh, crap. My mother just picked up the phone. We just got.

Oh, no. You dropped our connection, Ma. Oh, God.

Well, there you have it.

Lasagna.

We'd like to thank our guests, Frank and Ralph and of course, Mike and Christina. And of course, in the background, Ron Saharian, Obi Ron Kenobi, and the Hawaiian lumberjack, the Ludge.

I just got a headset.

I just like saying the Hawaiian lumberjack.

Is just Obi Ron's. Obi Ron's giving a heads up.

Yeah, boys. So thanks again. And the. Our sponsors as well are our corporate partners. I don't want to get hit by a fly swatter. By Christina. And also the real backer of this whole show, Profit First Professionals. Because you guys, you and Ron are changing the world. Mr. Michalowicz.

Wow. Me, Ron, Christina Hillaj, Mo, Emma, Lisa, new guy who just walked into office, and Ron's interviewing. We. The business is exploding. I mean, it really is. And I shouldn't say the business. The movement. That's a better choice of the movement's exploding like that. We have a membership organization of accountants and bookkeepers and financial experts and businesses coaches who are delivering profit first to businesses. What you just heard that Ralph and Frank went through, we have folks that will guide you through the same process. I mean, you need accountant or bookkeeper anyway. I get that these people are professional, extraordinary accountants, bookkeepers. They happen to just also be certified in driving profitability in your business. Hello. Hello. Why not be profitable from day one? Why not be profitable starting now? Maybe you're a few years into business. Maybe you're 10 years into your business. You can start being profitable immediately. If you reverse engineer profit, all you have to do is go to Profit first Professionals dot com. Click on the find button.

Yes.

We'll introduce you to the appropriate professional to help guide you to the highest degree of properties your business has ever experienced. So that's, you know, There you go.

Profit first professionals dot com. What you focus on expands everybody.

That's true. I just thought I was measured. Gets done.

There you go.

Hey, Chris.

What?

I have to end every podcast by telling you that I love you.

Okay, Terrific.

I got. Ralph has to end. Everybody's like. Like, you possess the podcast. It's my play. So let me. Let me do my clothes. So I've been hijacked, you know, in the next episode, we have James Coyle coming. James Coyle.

Jimmy.

He goes by Jimmy or the gym. Gymster. Jim Coyle. He runs the Gateway Regional Chamber of Commerce. That's out of New Jersey. It's the biggest chamber of commerce in New Jersey, but it's very involved with the government and what's going on. And he told us, hey, watch out, the recession ain't over. I got some insights to share with you. So we're gonna talk about the money side of the government and the recession.

Dolla dollar bills, y' all.

Okay now, Ralph, you can say something.

All right, catch y' all next time. Bye.

Thanks, guys.

And I have to fade now because it's going to start that whole thing.

Go, go.