Episode 151: Dating Your Clients with Seth David

You are listening to the Profit first podcast, episode 151.

Oh, my God.

All right, that's good. That was. Everyone came in here for that. Was that good? Yeah, all the women are red faced. That was good, guys. Thank you. I have someone on hold. They gotta get going. All right. Welcome to the Profit first podcast, everyone. This is Mike Michalowicz, the author of Profit First. I'm joined in the studio with Kelsey Ayers.

Hey, everybody. Hey, everybody.

How you doing?

I'm great. How are you?

Good, good. That was a little crazy trying to start with a grunting.

Yeah.

It didn't work because they couldn't hear the rhythm.

Yeah. And it's also only two microphones, so having a room full of people doesn't. Yeah.

Stand way back there. I told them to crunch in. They didn't crunch in. Yeah. All right. We tried. Yeah, someone will be impressed somewhere.

We'll tell them it was awesome.

Well, you, my friends, you're listening to the Profit first podcast. This is a show where we discuss every part of profitability, how to get there, how to make more of it. You know, today we're going to be talking about how to work close with your accountant or bookkeeper to achieve profitability. You can find us, by the way, on itunes. Stitcher, Google Play, Tunein radio. Supposedly, I think some AM station somewhere out in, like, Nebraska. It's this little town supposedly is broadcasting us illegally. Illegally. And let's see what else I got in my notes here. Oh, of course. Go to profitfirstpodcast.com. so before we kick into it, we got an amazing guest today. What have you been up to, Kels? Kelsey Ayers.

What have I been up to? Oh, so this weekend I visited my old. My old landlord in Pennsylvania. Oh, yeah. I love her. So when I got divorced and I left, I moved out on my own. She happened to be my landlord and she's 82, kind of metaphysical, and, you know, had a similar sort of experience to me. So she was like a big sister. I'll consider her. That's pretty cool. And I love her. Yeah. So I got to go see her and hang out for a day.

So. Yeah. What do you. When you're visiting your 82 or 86 year old landlord, hey, let's go out to a club. I mean, I assume you're not clubbing.

Exactly.

Right. Let's go clubbing. So what do you do?

No, we sit in the garden and we talk. She tells me what's happened. I set up her Chromecast so that she can watch Her Netflix on her tv.

Oh, nice.

So she can sit in her chair. Yeah. We go out for dinner. I took her to the grocery store. Nice.

Yeah, nice. Nice.

How about you?

So I saw. I say at the huddle this morning, I went for a run. I'm competing in a half marathon.

That's awesome.

Yeah, I got kind of suckered into it in a good way. My friend's like, hey, I need people to run. And I didn't realize what I was committing to, but whatever, I signed up. So now I gotta train. And I don't necessarily like running or dislike it, but when I do run, it's usually short distance. So now I'm trying to build up. So I'm trying to do five miles every time I go running.

Yeah.

So I tell my wife and kids, hey, I'm gonna go for a run. Starting at her house, way out down. It's called the Boulevard. And way out from our house. And I'm not gonna carry my phone with me because it's as bulky.

Yeah, I don't like to either.

Fatal mistake.

I know, Fatal. I go hiking a lot and I don't like to bring it with me, but I know that I have to.

You have to. I was 3.97 miles out and just coming for the loop back. So I was going to run another mile, mile and a half. So a little bit over five and then walk a half mile. I've been home 3.97. All of a sudden, this sharp pain, it was actually building. I knew it was coming. Sharp pain shoots my foot, and I just have to stop. I can't keep running. So now I start limping. It took me another hour to limp home. My wife's like, oh, God, you worked out. Are you overdoing it, Mike? And, like, I'm in pain, you know? So when I open the door and she's, oh, are you overdoing? Because I was gone for so long, my foot is hurting me. So I'm like, I'm not overdoing it. She's, what's your problem? Like, I have no problem. So I got a little bit. A little on edge, and then it went away. It went away. Now I feel fine.

Has it ever happened before?

Yes. Yeah, I think I. I think I have a wide left foot.

Ah.

Yeah. I think it's almost like it's too wide. Because when I wear. Like, I wear compression socks when I travel, you know, you should be doing that.

No, I didn't know that.

Oh, when you're in. When you're flying when wear compression socks, it's better for blood flow, especially for these long trips. So I wear them. But it also squeezes your foot and it'll start. Actually, that same problem will happen, that same pain.

Yeah.

So, yeah, I've had it before. Now I need to go to a podiatrist.

Oh, that's what that text was.

Yeah. So Chris is like, isn't she funny? She's like, hey, Kelsey, just send Mike to a podiatrist, please. That's why she wants me to go.

Gotcha.

Okay. You know, we started a shout out hotline.

Yeah, we did start a shout out hotline.

What's the number and what is it?

So it is 844-876-7221. And we started it because, as you and I both know, we get a ton of emails from people who will give their testimonial for how Profit first has changed their lives. But I think it's more impactful for everybody to hear that. It's huge. And to hear it from somebody's own voice is so important. I think you tell your own story.

Yeah.

So we set up this hotline where folks can just leave a 20 minute, I mean, 20 second short message with their testimonial for how it changed and impacted their own business. And then we can share it on here, we can share it on the website. And if folks feel so inclined, they could also make a video and just send it to my email@kelseykemicalitz.com.

Yeah, you can do that too. But, you know, call that number 844-876-7221. Say your name, say your business, say your second. Your story in 10 seconds. Like, you know, wasn't profitable for 30 years, but now I've done it. And then we want to hear the profit shout out, scream, just saying, I am profitable permanently. And, you know, yell from the top of your lungs. Yeah, you know, we took this from Dave Ramsey, I was at Entree Leadership, and they showed a video series of people doing this. They used to do it over the phone. Now they actually come to a studio. We'd, by the way, invite you to come here too, if you wish, and do the same thing in New Jersey. But they show videos and there's people screaming. His shout out is, I'm debt free. I'm debt free. And you see people crying. And the winner gets me. I was a daughter and a father, and the father had helped her go through school and all this stuff. And she, she was. Had a business and rang up a lot of debt and she used Dave Ramsey's method to become debt free. And she invited her father in, says, I want to share something. And he's just sitting there. And the father's like, what? She's like, I'm debt free free. You see both of them start crying.

Yeah.

So we want to start the tradition one more time. 844-876-7221. Operators are on call waiting for you right now. All right, we got to thank our sponsors and we got to get into an interview here first. I want to thank Fundera. Oh, I need a sound effect for that.

Come on, man.

No, I'm serious. Fund box.

Come on, man.

No, I swear, I am serious. Nextiva.

Come on.

Yes, yes, even Nextiva. Receipt, bank and zero. Oh, there goes all those companies are supporters of the show. Allow us to do what we do, our crazy antics. And so we'll share more details about them in a little bit. And oh, the one last thing I want to thank. It's Net Payroll. Oh, yeah, that's our payroll company.

Yeah.

What happened, like your payroll that you got a raise? Congratulations. But you're.

Thank you.

So now everyone, everyone knows and. But something happened. Did we mess up? Did we submit that correctly?

No, it was. I'm not really sure what happened, but she put it in on the paycheck that there was a pay increase, but then she allocated it to the last pay amount for whatever reason. So.

But they're on it now.

Right? We sent. Correction.

Net Payroll is a large established company. It's not ADP size or whatever, but they've, they're big and they've retained that kind of personal touch.

Yeah.

So when we have a problem like this, you reach out to them, they serve you, they take care of you. And the coolest thing I think about them is they have a 60 day money back guarantee. If you're not satisfied for any reason, you're like, I don't like the color of these checks. I wanted blue, not green. They're like, okay, we're sorry. Here's your money back.

Yeah, that's awesome.

Yeah. So we've been using Net Payroll well over a year now. We ain't going anywhere. We encourage you to join us. Go to netpayroll.net that's net payroll.

Thanks for the emphasis.

Yeah, thank you. Yeah, it says that in my notes. All right, I think we're good to go.

Yeah. Well, actually, I have a little comment and I think that you should read it.

Oh.

It comes from Drew McLean of www.restrevival.com.

Okay.

And read what he writes.

Where am I? Oh, he's a swear word. So if your children are listening, cut this out. Drew McLean of Restrevival.com says, Mike, I fucking love the grunting in the podcast intro. I feel it, and it gets me all jacked up. Nice, Drew.

Yeah.

Yeah, Drew, you're awesome. Okay, let's bring our guest on. And we got a little game for him. His name is Seth David. And you probably know of Seth David. I know you know, if you're in the accounting space, you definitely don't know him. If you don't, you're going to learn about him in a second. He's the owner of Nerd Enterprises. They provide consulting and training for accountants, bookkeepers, and business business owners just like you in accounting and productivity software. And they also help with cash flow projections as well. Critical growing business. Here's a couple things you may not know about seth. He has 10,000 subscribers on YouTube.

Wow. Yeah, it's incredible.

I think I have like four.

You do. It might be two.

And it's me right here following just to see is anyone listening and watching. He's also a speaker for every major accounting conference. He's done all the past ones. He's doing all the future ones, including QB Connect. That's where he and I hooked up. And his most successful book, not written yet.

I like that. Not yet.

Yeah. And he also won the title Most Unique in High School. I don't know if that's a compliment or not. Always sounds like it is. Seth, welcome to the show.

Hi, Seth.

Thanks for having me. Hi, Kelsey.

Hi.

So before I we. You have a story to share with us and I want to hear. But before that, you are also. You were born in the 70s, right?

I was born in the early 70s. I was born in 71 to be exact.

Oh, so was I. Brother. Great year. I want to play a little melody for you. This is for you too, Kelsey. I want to see if you guys can figure this out. This is a 70s child. Should get this.

Come and knock on our door what.

Is that waiting for you?

Oh, that's the show with. Oh, no.

Three's Company.

Yes.

Three's Company.

Yes. Did it, did it. Nailed it. All right, one more thing. So that was the Three's Company sound effect. Good job, Kelsey. You're all over that.

I had to get it before they said it in the actual chorus.

Now this one's more techy. I don't know, Kelsey, you're playing too. Seth, this one I designed for you. I'M gonna give you three sounds from Windows startups. So when the window computer starts up, here's the answers. It could be. It could be Windows 3.1, Windows 95, Windows 98, Windows 2000, or Windows XP. I'm only gonna play three of them, so you gotta guess. Here's the first one.

95.

All right, 95. No, that's Windows 2000 Pro. Okay.

Really?

Yep. Here's the next one. Get ready. This one. This one. Here comes.

98.

Okay, what's yours, Seth?

Yeah, I'm gonna. I'm gonna agree with Kelsey. 98.

No closer. 95. All right, this is a give me. If you guys missed this one, you're. You're pretty crazy. All right, remember, remember, it could be Windows 3.1, Windows 95, 98, 2000, or XP. Here it is. Which one is that? Just think how simple that sound is.

Yeah, so the 3.1.

That's gotta be 95.

Yeah. 3. No, that's 3.1. That was. Yeah. Okay, so you're not a techie guy either. Here, one more for you, Seth. What's this?

Oh, I know the sound. I just can't remember exactly what it's from.

All right, it's Intel. All right. Intel's little logo sound thing. All right, so that was an abject failure. Let's get into the interview. Let's get into the interview. You had a little story you wanted to share.

I do, I do. And before I get into it, well, I want to lay a couple of things out here because I think I want to sort of have our conversation this morning around these things. I'm going to start off by saying this. I think we're having headed for trouble. Mike and Kelsey. I think there's trouble ahead. And what it's going to come down to is I think it's time for accountants to start dating their clients. And I'm going to explain, of course, what I mean by that, but let's back up a second. So long story short, and thank you for the intro, Mike. I did win Most Unique in high school. I considered it a compliment. I liked the idea that you were never going to meet another guy like me. And as far back as my senior year of high school, my peers recognized this about me. I love that about myself.

I love that too.

So, you know, but going forward into the current times, I had set out about a year and a half ago, let's just call it, and said I've got to reinvent, you know, and in the process of reinventing, really, what I mean is. I need to reinvent my business. I need to. I was starting over in a lot of ways, and I said, okay. And I want to draw on a reference from something that's really based on a personal interest. I don't know if you all are into, like, the Marvel and DC comics shows that are on tv, like the Flash and the Arrow and all this. Are you guys into that?

No, of them, but not into them. But I know who they are.

I love these shows. My favorite, Escape. So there's a character in the Flash in a recent episode, which I think you can learn from about your business and being more profitable from what he says. And it has to do with. Well, let's put it this way. What he said was he says, when you want to get something done, he says, you make the plan, you execute the plan, you expect the plan to go off the rails, and then you adjust and you create a new plan. I think that speaks a lot to what we have to do here in business. And that's kind of what I did back about a year and a half ago. I said, okay, I'm going to sit down. I've got to make the plan, and I'm going to make the plan, but I'm going to expect that it's not going to go as planned. And it's kind of a lean startup process. So you go out there, you start executing the plan, you find out what mistakes you're making, and you make corrections along the way, and you're constantly tweaking the system. And there's really an art to this. I think it's more of an art than a science, really, where you really have to look at it that way and say, okay, the art to this is trying to figure out what pieces I need to put together to create the whole picture that adds up to my business, and then figure out which pieces aren't working and make those adjustments as you go. It's not a set it and forget it thing. Never is, never has been, never will be. So I did that. I set out and I said, I want to build a plan. And my plan, frankly, was to build a consulting vertical. Up until then, most of what I had been doing was training. I started out consulting, found out that I was really good at training people, teaching business owners how to use QuickBooks. That was another thing I realized. You mentioned all the conferences I've spoken at. I've actually cut back on some of those. This year. I was invited, and it was an honor, of course, to be invited to speak at Scaling New Heights and Account Text. But I turned them both down. And my colleagues are looking at me when I'm telling them this like, what's wrong with you? You're insane. How could you turn down opportunities like these?

Right?

And I said, because it's not my focus right now. Right? There's.

So you're not even. That means you're not even attending. You're just. That's not your focus. So you're not going to speak, you're not going to attend. You got other stuff to do.

I'm going to speak at QuickBooks Connect, correct? I'm not going to speak, nor am I going to attend. Because I was watching a Brian Tracy video recently where he confirmed everything I've been thinking and doing for the past year and a half, which is that he said, focus is the key. You have to be focused. And he gave an example of a guy who had a very successful, I want to say it was like a plumbing business or something like that. And he'd done really well and blown this business up. And then I guess he was consulting with Brian and he said, it may not have been plumbing, but let's just go with that. And he went to Brian and he said, hey, I'm thinking about now building a business where I can sort of teach other plumbers how to do this. And Brian's response was essentially, why are you going to go and do something you know nothing about when you're doing really well at what you do really well? Right. And so it was all about focus. So that kind of takes me back to what I did last year. So first I want to lay out what I set as a goal, and then I'm going to back into kind of how I've gotten to where I've gotten to since then, the goal that I ultimately laid out. And there was a lot of thought and processes that went into coming up with this. But I said, I want to build a consulting vertical because if I'm going to be out there teaching all this stuff, I should also be somebody who can say that I've proven that I can do it before I teach it to others. That was the theory behind if I want to be the guru that's going and speaking at accounting tech conferences and presumably teaching other accountants and bookkeepers and even business owners how I built, let's just say, a million or $2 million a year business, I probably should go do that first. And then I can say, I've done it now. I can teach you how I did it. So you can do it, right?

Yep.

And frankly, I did not want to be one of these gurus that actually makes all their money by telling others how to do it when they've never done it themselves. And there's plenty of those out there, right?

Sadly, that's true.

Yeah. And so I didn't want to be that guy, you know that like you asked him. Hey, okay, great, Seth. So you're going to teach me how to build a million dollar, your business. How long has it been since you've had a client of your own? And I'm like, well, like 20 years, no big deal. I still know what I'm doing.

Does my mind count?

So I set this goal. I said I want to build a consulting practice and I want to take all this knowledge that I have, all this stuff that I'm now teaching others to do, and all these apps that I'm teaching people how to use, how to put these ecosyste together. Because now everything's about the cloud, of course. And it's been about the cloud for a long time. It's hardly new, but for a lot of people it's still new. Right. Because they're first kind of catching the wave now. So I was thinking about all this and all this knowledge I have and I said, let me use that to build a vertical. A, I can make a ton of money that way and B, I can go out there and prove it and then I can teach others how to do it. Then I'll write that book I haven't written yet. Right. Because I'll say this is how I did it. So in keeping with that thinking, again, a lot of thought went into this and I came up with a formula and I said, I want to build a vertical for consulting. And don't get me wrong, I'm still doing a lot of training, I still do the one on one stuff, but I want to build a vertical that's based on putting a service out there, business management, really handling the whole entire accounting cycle for companies. And I'm going to set as my goal to have 100 clients at an average of $1,500 a month. Right. The base fee is $1,500 a month. And I went and defined what I was going to offer for that amount of money. And then of course I scaled down a plan for a lower tier, I scaled up a plan for a higher tier, but basically that's what I'm doing. And then of course there are applicable add ons. So at that time, part of what inspired this was I had one client who came to me by way of a referral who said, I want you to do everything for me. He's a real estate agent in Beverly Hills. And he said, I want you to pay all my bills. I want you to do it all. I just want to focus on selling real estate. And I said, great, I'll do this for you. And I took a look at what his previous bookkeeper was doing and giving him, right? And I said, I can do better. I can do a lot better. So I built a plan around him, and I set the goal around that service and what I was doing for him. And I said, I want to build a business based on 100 clients like him at $1,500 a month. Of course, if you do the math, that's 1.8 million a year.

That's beautiful.

So a little bit more than a year. About a year and a half ago. A little bit more than that, actually. I had one client in this plan about six, seven months in. I still only had the one client in this vertical, right? Remember, make the plan, execute the plan, expect the plan to go off the rails, adjust and make a new plan. So I went back and I said, and then I took in another client, but this other client actually broke some of the rules. I had established rules about what kind of client I wanted that would fit this model. And somebody came in, and it had been six, seven months. So I was feeling, I guess you could say, a little more desperate. The referral came in for a client that, pricing wise, I could put in at the same price. But the service was very different. The nature of their business was very different than what I was prepared to serve, or I should say whom I was prepared to serve based on my business model. The mistake proved to be a mistake. Client went away two or three months later, still just the one client, right? So we're eight months into the plan, and I still just have the one client. I start doubting myself, thinking, you know, is this working? Maybe I need to adjust. And then I said, nope, I know this is going to work. I just need to keep pushing at it. So fast forward a few months ago, not even like two months ago, I looked at, I said, let me do an inventory. Not the kind of inventory where you count your products, but I wanted to inventory my clients. And at this point now, I counted them up. I laid it out, of course, all on a spreadsheet. And now I have about 11 of these clients at an average of 1500amonth, some more, some less. Because what happens? And I think the message I want business owners to understand from this is, first of all, don't quit before the miracle happens. Right? Because I almost did. And what happens is, like I said, you're making the plan, you're executing it, you're expecting it to go off the rails and you're learning and making adjustments based on those mistakes. And then all of a sudden it pops, right? And now it has popped for me. Well, let's. I want to ask you a critical.

Question around that because a lot of people do quit. A lot of people do quit before the dream happens. And some people make the mistake of that dream is a nightmare and they keep seeing it through. How did you know it wasn't time to quit? Why did you know it wasn't time to quit?

It was obviously an instinct. I said no, I just believed in myself. I said, I know there's something to this and I just need to keep. I just need to not give up. You know, how many times do we hear versions of, you know, how Babe Ruth. More strikeouts before home runs. And you know, the only time you, you ever fail is when you fail to get up after getting knocked down. And you know, there's a million versions of that that we hear out there. And that's kind of what I played on. I said, it may not be that it's going to look exactly the way it did, but it's going to, it's going to work. I know that I can do this. I just have to again, I have to figure out what it looks like and keep making the adjustments.

Now, when we started off the show, you said you wanted to share the story, which you just did. And it sounds like you also said it translates into accounting accountants needing to hug their clients and vice versa.

Dating. I said there's trouble ahead and it's time to start dating your clients. And here's why. So this underscores really the nature of the service that I built and how I built it. Because again, it depends on who you ask, of course. But $1,500 a month can be a lot of money for some businesses and a drop in the bucket for others, right? Especially for their accounting. I mean, that's 20,000 a year. 18. So how do I justify charging that kind of expense? First of all, it's full fledged business management. So I'm handling their whole accounting process. I'm paying their bills for them. That's one of the key differences. But I don't even care about that. That, to me is easy, especially in this age of the cloud. As an accounting consultant who is very well versed in tech, I know how to put the pieces together to substantially automate those processes. Good thing I'm not charging by the hour. I'd lose my shirt. Because I can do things so efficiently now. I charge based on value. I charge based on not even value. Let me take that back. I'm gonna go ruffle a few feathers here. Is that okay?

Yeah.

You're a unique. They said you were the most likely. They said in high school you were most unique and most likely to ruffle feathers. So it's perfect.

Exactly. I love to ruffle feathers. I'm a feather ruffler.

I know.

What do they call it in the Old West? It was like a rustler. I'm a feather ruffler.

You want to go wrestle? No, but I will ruffle your feathers. That's funny.

Exactly. So I have my own version of what they call value pricing. I call it power pricing because I say. And I think this is applicable for everybody. First of all, because I think pricing is a big issue. I know it is for accountants and bookkeepers. I'm sure it is for all other business owners, too. How do you price your services, especially a service? I think service pricing is more subjective than product pricing. Product pricing, you can pretty easily go into the market, figure out what the market's paying others who offer the same products you do. Unless you have a product that's so unique, nobody has ever created or sold it before. Right, Right. So how do you price things? And let's face it, you know, the end of the day, the basic law of economics and what drives the price of anything is what will perceive value and demand.

Well, yes. Okay. Which translates to perceived value. Yes. Supply and demand. Yes.

Perceived value.

Yes.

Supply and demand. If I. Look, Mike, if you and I are both offering the same exact accounting service, right? But I've got over 10,000 subscribers on YouTube because I've gone out there and created a ton of videos and really crowdsourced a lot of people who can use the help that I offer in those videos. Videos that teach people how to do things in QuickBooks that they couldn't figure out how to do before because they weren't necessarily accountants or bookkeepers. But I remember early on when I started making videos, one of the first comments that told me to keep going was a guy who posted a comment on a blog I had done about how to handle NSF checks in QuickBooks. And he said, I've had five interns in here who Couldn't figure out how to record this. I watched your video and learned in five minutes. That was the essence of what I had set out to do. And he was an early onset of somebody indicating to me that I was succeeding at what I had intended to accomplish. So back to this. I said, what is it really that I'm doing for clients? Again, I can build the ecosystem, I can make things efficient. I want to price things. I can't price by them the hour anymore. It puts me at odds with the client. So I price things based first and foremost and at the very foundation, supply and demand. So going back to the example, Mike, if you and I are offering the same thing, but I've created videos that have generated more demand, I can charge more than you for the same exact service, assuming everything else is equal right now, presumably, of course, if I somehow am doing a better job of it than you, then that's another factor. But the reality is I can be doing a better job of it than you. But if you've gone out and created more demand in the marketplace because you've been louder than I have, then you'd probably be able to charge more than I can, because nobody knows that about me. So I really believe that it's truly supply and demand that drives whatever you price something at. But then I came up with this other idea that kind of stems off from there that I'm calling power pricing. The word power pricing, where it comes from is the idea that the power is in my hands as the provider of the product or service. Service to decide what I want to get paid. Right. And what I tell. When a lot of bookkeepers come to me and ask me for coaching on how they should price their services, this is what I tell them. I say, charge what gets you excited to do the work.

Oh, I like that. And like you said, now this show, the listeners are entrepreneurs, so this is any business. It sounds like this applies to charge what gets you excited.

Right. Charge what gets you excited. And if you do that and you find that nobody's buying, fine, lower the price. Now you're working the supply and demand.

Formula, but does that mean everyone starts at a million dollars? That gets me excited. Kelsey's fired up to sell her jewelry for a million bucks. I'm excited. But clearly I'm outside of any reasonable range for the service I provide. So where's the starting point for power pricing?

So here's how. I have a formula for that too. And this applies more to service based businesses, I think, than. No, you can actually, I Take that back. You can apply this formula into the product base. Let's say that in the service based business, I am selling a service. And let's put it this way, bottom line, it's goal oriented. Right. I have to start by setting a goal. How much money do I Want to make? $1 gross in a year? Forget about expenses, just $1 gross, first dollar in. How much do I want to bring in? Let's say I'm a small service provider just getting started. And the answer to that question is something like $150,000, right? Right. Think of a bookkeeper.

I assume it's based on your lifestyle, Right. If I bring home 150,000, that will support the life I want to live. I assume that's where you get.

Right? Let's assume. Yeah, let's assume that's the case. And I come up with that because I think of the bookkeepers who I talk to a lot. And that's often a pretty frequent starting point for a bookkeeper who's just getting started out. So everything's relative. If I'm an architect and I'm just getting started out, and I know that with architecture, first of all, I'm probably going to have a lot more on the top line because I'm going to have a lot more overhead taken out of that. So for an architect, it might be 1,500,000. Whatever it is, you come up with the number. And I say, okay, wonderful. In the service based business, this is where service and product based businesses will branch off a little bit in this formula. But then I say, okay, how many units of whatever it is that I'm offering can I sell? That makes the product model easy to see. How many units of my products that I sell do I plan on selling? Selling. What do I sell them for? And based on that, how many do I need to sell to hit that goal? Back to the service based business, we're not doing units because it used to be, if we were charging by the hour that we were doing units, we would say, how many hours of my time can I sell? But we've done away with that model in the firm of the here and now. Right. That model hopefully should be gone or it should be soon to be gone from any service provider's business model. We've learned better. Right. We don't want to charge by the hour. We charge a flat monthly fee. It makes us more partners with the client, which is what I'm going to get back to when I get back to talking about how it's Time to start dating your clients. And I'm going to explain what that means.

And by the way, eight minutes left. So we got to get to that.

Okay, no problem. No problem. Yeah, I talk a lot.

Love it.

All right, so eight minutes left. I'll cut to the chase here. So I set my goal. Let's say it's $150,000. Next question. How many clients can I service realistically on a month to month basis? How many monthly clients can I handle? Let's say it's monthly clients, right? So I take that 150,000 divided by 20, that's $7,500 a year, divide that by 12. My base pricing package should be around $625. Maybe I want to pad that and move it up to like $750 a month. And then now that I know what my mean sort of sweet spot in terms of pricing packages are, now I can go out and say, all right, now let me define what I'm going to offer at that rate, right? In other words, I think people do it backwards. People are now being taught, create the menu of services you offer and then price them and add that up to your monthly. I think that's backwards. I think it's much harder to arrive at what you're going to charge on that basis. I talk to people every day who express their confusion about it. So I think this is the right way to do it. Do it based on your goal, do it based on what you're excited.

So then love it. So let's talk about from the with dating your accountant or bookkeeper, why do entrepreneurs need to do that? And why do accounts and bookkeepers need to do that for entrepreneurs?

I'm glad you asked because that will get me right on point to. What I really wanted to say in this whole thing is, you know, like I said in the beginning, there's trouble ahead. And I think the trouble ahead is based a lot on the fact that we do have a lot of these so called gurus out there who don't have their own clients who haven't had the real in the trenches experience in quite a while. And they're guiding us and they're telling us what to do, but they're not really telling us so much how to do it because they don't really know how to do it because they haven't done it in a while. So here I am ruffling feathers again. But here's where I see trouble ahead and what I think needs to be done about it. The trouble ahead is that now the big thing, because we're in this cloud age where it's really easy to source information from different places. I have cloud accounting applications where I can easily, I have these other apps that can hook into them and create dashboards. Right. And that's what everybody's saying now in the accounting tech world is they're saying it's all about the dashboards. And I want to provide these dashboards to my clients. Because most clients don't understand financial reports. Right. I'm assuming our business owner audience, a lot of them would agree. I'm sure there are some that understand them really well. Right. Depending on what your background is, some people definitely understand financial reports. But a lot of business owners really understand the widgets that they sell and how to sell them and don't understand financial reports. So I think accounting and bookkeeping professionals for a long time now have been wanting to create sales wherein they send these reports and say, here, client, here, go look at these reports. Let me know if you have any questions. And that's where the trouble is. And that's where I think. So now let's talk about the dating example, right? What happens when you start dating somebody, Mike? When you started dating your wife, did you want to talk to her often or did you want to say, did you want to talk to her as infrequently as possible when you started dating her?

By the way, start off by her spitting wine in my face. I got to tell you that story, Kelsey. But after that I wanted to talk to her all the time, every second, right. I still want to talk to her all the time. I'm pretty crazy about her.

Yeah, understood. So shouldn't it be that way with our clients? I see so much of a sentiment, I think more so on the accounting and bookkeeper side versus the business owner side. I think the business owner desperately craves this. And I think business owners frankly are tired at the end of the day of just kind of getting reports and some tax vouchers and saying, see you next year from the tax professional and from the accounting professional getting, you know, whatever reports the accounting professional is even sending them. Some are probably not even sending them reports until or unless they ask for them. Which is like really crazy because let's face it, what's the lifeblood of every business, Mike?

Money. Cash Profit, bro. Cash.

Cash flow. So shouldn't I not only be looking at reports, shouldn't I be focusing most of the time spent looking at reports on cash flow related reports? Shouldn't I be analyzing my company's cash flow every day, all day long, and not just when I'm in trouble.

The answer better be yes.

That's the way I think with the.

Way you use the emphasis. Well, the way you were emphasizing it, I thought you were setting me up. I was gonna say, yes. You should be doing all the time, like, no, you idiot, you don't need to do it all the time. You're crazy. I thought you were setting me up.

No, no, we should be doing that all the time. I think there's not enough. So the problem, though, is now we're talking dashboards. And I think the accounting business, the accounting industry is about to make a big mistake because they're going to make the same mistake they've made before. It just looks a little different. And they're going to start sending the business owner clients these dashboards. And the only difference, the only change will be that the business owner clients, the business owners will look at these dashboards and think, wow, that looks really pretty. That's really cool. How'd you do that?

Yeah.

But it won't go much further.

Let me ask you this, because we only got two minutes left. The business owners, it's all business owners listening to this show. What can they do to activate their accountant or bookkeeper to start communicating in the right dating fashion?

Ask them. First and foremost, ask them, say, hey, can we schedule a call? And also be respectful of their time and resources. Say, I understand this may cost me more, but it would be invaluable to me to be able to spend maybe in the beginning, once a week, probably less often after that. But let's look at the reports together, let's look at the dashboard together, let's analyze them together, let's write up notes. We'll have meeting notes for each of these meetings. And let's make sure that we understand because the business owner has the operational insights, the accounting professional has the accounting insights, and together you have a really powerful and very complete picture. But it's useless if you don't take the time to look at it together, analyze it together, and make decisions together based on it. What do we need to do? Do we need to improve cash flow? Do we need to increase that accounts receivable turnover ratio that we have because we're not collecting receivables fast enough? You know, all those things that can go into that, I think that's what's missing. And that's where the trouble ahead is. I think people are going to miss that boat all over again. It's just going to look prettier.

Yeah, I agree. It kind of goes full circle because you said if you and I were offering the exact same thing to the exact same community, everything's exactly the same. That theoretically we can only dictate the same amount of fees because of supply, demand. But now you're saying if an accountant or bookkeeper or any business owner where there's this kind of transactional business, if you move to this, your dating model, it sounds like your revenue is going to skyrocket.

Yeah, because I can charge more because I'm giving so much more value in what I'm offering them. The output. What's the output of my business? It's the report. The reason I spend time and money putting information into an accounting system and trying to analyze profitability, which is our goal for the business owner. Right. The reason I spend all that time and money is to get the outputs to look at my P and L and see am I profitable. But as I'm sure you well know, Mike, it's not enough just to look at the P and L. I have to understand the whole picture. The P and L is just the beginning. It's great that I'm making a profit, but how much of those profits are being retained in the business? To invest in the future, I need the balance sheet and statement of cash flows to understand those things. I don't expect the business owner to understand them. But if the accountant together with the business owner, work together and have again in the beginning, a weekly call after that you can probably back off to monthly, maybe even quarterly, when you really understand things well together. But that's just like a relationship. When you're dating, at first you want to go out every weekend together, right? Then you get married and it's like, eh, I'll see you around the house. I'm kidding, of course, but you get the idea is when we're dating somebody, we see them often, we want to see them often. I feel like in many instances, too many instances, the accountant and the business owner are almost like. It's like they're afraid to talk. They're afraid that, I don't know, maybe they're afraid that one of them is going to get mad at the other. I don't know. But the bottom line is we need to charge a flat rate so the client's not afraid to ask for the extra time, build it into the pricing, or as the business owner, ask your accountant and say, I know this is going to cost me more, but it's going to be worth it. I'D really like your time and expertise, not just a set of books. Done. I want to understand this stuff. That's what I'm paying you for.

Oh.

Ultimately, I'll pay you more for the understanding that goes with it. I think that's a good place to start for the business owner is ask your accountant to do this.

Yeah. This is fantastic. And it's a good place to end this interview because we got a roll. Seth, where can people learn more about Nerd Enterprises, all the fine work you're doing?

So it's all@nerdenterprises.com going forward. I'm actually rolling out a brand new site as of the time we're recording this. It's coming out hopefully in the next few weeks and everything is going to be there. Right now I have like three sites. It's all going away. One site, nerdenterprises.com. that's where you can find everything about me and everything I do.

Seth, thanks so much for joining us today.

Thank you, Seth.

Thank you.

All right, Kelsey, here's the deal. First, punch me. That's what I need. What we're gonna do in a second. So I want to recap the stuff we've learned. Have you taken some good notes?

I did.

Okay, me too. And we're also going to. Well, there's one other little minor surprise. But first I want to thank our corporate partners who make the show a reality. So they are. Nope. Why isn't the audio not working? There you go. Oh, Obama jumped in there first. There. Fundera. Well, I'll go through each one at a time. So first, Fundera. Fundera is a one stop shop for your loan. So if you need to take a loan for your business, you have that jewelry business. You can go to Fundera, go online, type it in, and they'll come up with the best options for your loans, meaning to buy materials and stuff like that.

Yeah.

Okay. And here's the little surprise. I'm gonna sneak in a sound effect that you have to guess what it is.

Okay.

In the middle of this. But I'm not gonna say it yet because I don't want people skipping over this part. Like this is important to be like, ah, oh. I'll hit the fast forward. I'll skim through this and skip over Mike talking about the sponsors. Well, guess what? Now you're gonna miss out on a great sound effect. All right, so next sponsor is nextiva. That's our voice over IP phone system. I finally saw Ron's phone over there.

What a magnificent Fancy.

Yeah, fancy. And I said, ron, I should get one. And he's like, like, don't go to the well too much Mike. He could get one, but I can't. It's very funny. So I'm not getting one. But I do love nextiva's phone system and is a voiceover IP phone system. Consider it for yourself. Very powerful. And when you have problems, the management team gets involved. We had one person, so listener to show said, I'm having problems getting my phone system set up because they're in a rural area. So I guess there's the owner. Well, one of the owners next to Eva, there's like. Like five, I think, partners in it personally said, I'm taking care of this going forward. So. And they're like 250 employees are huge. Fund box. But before we talk about fund box, you got to guess the sound. Okay, here goes. I gotta queue it up. Let's see if it plays. Yeah, don't be nervous.

Is that like the closing for Disney or.

Sounds that way. I'm gonna play it again. Again. It sounds that way, but one more time.

Is this a tech thing? Related too?

It's a company. It's the hint. It's a company. Just. Let's kind of sing along with it. Like what?

Like a good neighbor. State farmers There.

No, you nailed it. You nailed it. I need. I wish I had an applause sound effect because you just nailed. I'll give you a rim shot. No, that's all I got. You nailed it. All right. So Fun. Fun to Box. Yeah, it's a cash flow accelerator. If you've invoices due to you. Think about it. Right now, you've invoices due to you, but you don't have the cash. Call Fundbox. They send the money to you today. Now, when you get your. The invoice collected, you just return the money to them. And of course, they charge a service fee for it, but it's cheaper than taking a loan by far. Fundbox. Check them out. I was wearing a T shirt that said Fund Box. And the guy said, oh, Fun Box, the porn site. I'm like.

But they were reading it.

He was reading it and still called it Fun Box. But he was.

That's not okay.

It was Art. It was my neighbor Art, who I was fighting with. He was busting my chops. There's another thing you said was so inappropriate. Can't share it. Okay. Receipt bank.

Yeah, receipt bank.

So you scan in your receipts.

It's just so easy.

Yeah, it is so easy. I use It. Ron uses it and it syncs right up to our accounting system. And the last one's Xero. When we were on Xero, you used Xero, didn't you?

Yeah. I love Xero.

It's good.

It is good.

It's good. It's good. Xero is built from the cloud up. It's an accounting platform. Yeah, there's many out there, but Xero is the one who is designed for this generation of software. It's the best out there. Okay, so that's what I wanted to share. Now I want to talk about our takeaways. I want to be punched one more time. If I can find my punch. Here it is. What's wrong with my soundboard? What's wrong with my soundboard?

It's not wrong with you for wanting to get punched all the time.

I had to get punched. All right. What did you learn from Seth today?

What did I learn? I love this. What did you learn today? Nice. Well, first of all, I love that he's.

Get close to the microphone, would you.

Chivi, it's not the right one.

Yeah. You gotta be honest. You got. Your face has to be close to that red thing. There you go. Beautiful.

So first, I love that he stayed the course. I feel sometimes it's more courageous to stay the course than to jump ship. And I'm glad that he understood when to trust his instincts, because I think that's a really hard thing to do. But I really love that he flipped. The way that he approaches pricing to be what he needs and then how to break it down from there.

Yes.

I think that's a fantastic way to do it. As long as. I mean, with the caveat that you are really offering a value.

Now, I know you're a spiritual person. I believe with stay the course, something magical happens. I heard it embedded between what he's saying. At a certain point, he said, okay, maybe this isn't meant to be this certain way. And then it all started happening.

Yeah.

He had one client, One client, one client. It sounds like he was pushing. And then one day he said, you know what? Maybe it's meant to be a different way. And he got 11 clients.

Yeah. Yeah.

I don't know. Sometimes I believe the universe is doing wild things.

I absolutely believe that. And I think it's great that he never had, like a pass fail mentality. It was always, you know, this is going to be a moving, you know, wandering path to get where I want to go.

Agreed. I also like the power pricing concept that what gets you charged because that's so interesting. It's such an easy qualifier. A lot of people I work with, I ask them about their. What their billing or what their fees are, and, like, I just can't charge more. I can't bill more than that. People will leave me. That means they're not charged about it.

Right.

They don't say, oh, man, you know what? I'm getting paid absolutely fairly for what I do. I'm delivering such value. So I think it changes the perspective. I also liked that concept of dating. And now he specializes, as you can tell, in the accounting and bookkeeping space, so he's referring to that a lot. But this applies to every business. There's a dating phase now. I want to take it a little bit further. This is my little bonus surprise. When he said marriage, like, you don't want to see your. You know, he's like, oh, they just kind of pass in the house. I know he was joking. I think what happens is dating, there's this initial excitement. Right. When you start dating. Matt. I'm sure I am beginning. It's like. Right. And maybe still that way because you're.

Still in the dating phase.

Once my wife and I got married, we start getting. I call it in tune. Like, she can say in one word a feeling, and it'll land.

Right.

For example. So we'll text each other occasionally and say, I live you. Not I love you, but I live you.

Yeah.

And that came about because of a typo. I once was typing it, and it said, I live you instead, I love you. And it's. It's. We've had conversations around it, and we discuss it like it means kind of supporting each other and that our. Our paths are intertwined and we're raising family and stuff. So it's more than just I love you. It's an. Explores our entire life together.

Like your symbiotic relationship.

Yeah, symbiotic relationship and how our paths are walking down and stuff. And so now when we say that, we can convey a lifetime of stories in three words.

Yes.

And I think that's what happens in these relationships when you're first starting your business, this date your clients. But then you will get into a married relationship.

Yeah.

You're not gonna marry just one client. Marry a lot. Which is kind of like, you know, you're from Utah or something like that. But.

But polyamorous.

Yeah, polyamorous. Polyamorous. Polyamorous. It is polyamorous. But it's cool in the business space. And just realize marriage is when you can Start conveying much more succinctly and get that important information across.

Yeah, absolutely. Okay, concur.

You concur. Okay. You buy and say you're. You're so polyamorous. You buy. You're known to be polyamorous, right?

No. Stop spreading rumors.

Why did I think. No, it doesn't.

Inappropriate.

What does it mean? Does polyamorous mean you're dating multiple people, or does it mean does you just care for a major dad?

I mean, I think polyamorous is. Is more of a. A flexible word where I think you could apply it to you like a lot of people.

Yeah, but I guess it's really implied that you. You marry or date a lot. Okay, so you're not Pol Hammers, I take it?

All right. Correct.

You just your care for people. All right, we got to get out of here. Let me cue the music, Mike. There we go. So first things first. You, my friends, my listeners, I want you to rate the show. Maybe this was your favorite show of all time. Maybe it wasn't. I get it. But I want to know your honest rating. So please go to itunes, stitcher, Google, play all the platforms, tune in radio, Write down what you think, thought, but also share your ideas. We check things out. We want to see what you're. You're experiencing, and then we bring it up on the shows.

Yeah, call the hotline.

Call the hotline. Especially, you know, if you swear clearly. Yeah, we'll put on the show. So the hotline's 844-876-7221. Are you ready to declare permanent profitability? We want to hear your story, how you got there all in 20 seconds, and we'll play it on air. Oh, and one last thing. One last little, little ditty. Go to profitfirstprofessionals.com. do you want. You want to share what we do? Did you feel up for it?

Oh, sure.

What do we do?

We are an accounting and bookkeeping membership organization. So we work with accountants and bookkeepers to work with entrepreneurs to make you permanently profitable.

Exactly. So why not get permanently profitable? Come to our website, profitfirstprofessionals.com. step two, click on find, fill out the little form, and we'll hook you up with a profit first professional. Someone who will work with you one on one to get you profit. They will do a gratis call in many cases because these are all independent businesses. We have 143, 144. They will walk you through the process of gratis in the beginning, just to see if there's a match. Then if you want their ongoing support, they bill a very reasonable rate. You need an accountant or bookkeeper anyway. Why not get one that knows how to drive properly in your business? That's who these folks are. Again, go to www.profitfirstprofessionals.com and fill that out. All right. We're ready to go, I think, right?

Yeah.

Okay. Who we talking to next week, by the way, do you know?

I do know. We are talking to. Is it Ramona? Ramona Rice.

Oh, Ramona Rice. And the subject? Well, how she used Profit first to kickstart her business. That's right. And you can use a kickstart. Yours, too. We'll see you next week.

Bye.

Bye.

Sam.