Episode 161: Crafting Your Business Plan with Moshe Amsel

I went to the doctor this morning for my annual checkup.

Yeah.

And what they do is you sit in the waiting room. My appointment was at 9. I got there at 8:50. I then get checked into the, you know, the. In around 9:10. I tell them I'm there at 8:50, 9:10. They're like, okay, I filled this form out, whatever. Then they come out and say, okay, Mr. McCallow, it's already for you. 9:20. They walk me from the waiting room to another waiting room inside the big space. I sat there for another 20 minutes. It's now 9:40. The doctor actually comes out and sees me. He's like, oh, hey Mike, how are you? We're ready for you now. And as he turns his back to me, he's like, sorry for the wait. And I'm like, are you. And it just paused. He just stopped. And he's like, yeah. I'm like, okay. I'm not trying to be a pain, but every time I come here, it takes about 40 to 50 minutes. So I don't know if you can improve your system if you're really sorry. So I was kind of a schmuck.

That's how you know he's a good.

Sorry about that. He turned around and said, I'll remember that during your rectal exam.

Okay? And he. That's what I was afraid of because I had to do. You have to do the prostate exam. Right. And so I'm like, oh, that was a little. A little rough today.

But all the good doctors usually seem to have a wait. I feel like I have to wait an hour for my doctor too.

I don't. I don't think it's necessary.

So then they fix that problem.

I mean, that would be nice.

It is a terribly broken business model.

Yeah, I agree. 100. I agree, 100. There's one hospital, actually. I studied them for my new book. My new book's about streamlining a business. It's not. The title's not going to be streamlined, but Streamlining business. I found one hospital in Cape Cod that the average emergency room waiting period is seven minutes for anything. It's not like just a heart attack. I mean, you go in with a headache, seven minutes, you're in being examined by a doctor. And so I've interviewed or done some research. I've interviewed them yet, research on how they do it. And they use a whole different setup than all these other offices.

So that's pretty cool. You are listening to the Profit first podcast.

Yes, you are. This is. Oh, did I hear that? Early.

You're supposed to say.

I did.

I suppose it.

Early.

61 and. Well, let me introduce myself. I am Mike McAllis, the author of Cry First Joined the Studio by Kepi.

That's me, your co host.

She's my co host and my co host to the co host, Kelsey Ayers.

That's me.

And Moshe is here in studio going to be talking with. So welcome.

That's me.

Yeah, that's you. And you, my friends. Who are you? Well, you are the person listening to the Profit first podcast. This is a show where we explore every single element of profitability. And today we're talking about your business plan. It's the. It's the potentially the genesis of your profitability. Yeah, you do it right and if you stick with it, it can be the best guide you have.

That's right. You could find us on itunes, Stitcher, Tunein Radio, Google Play, and of course, profitfirstpodcast.com. that one's my favorite.

And on Moshe's phone.

Exactly. Yeah, exactly. You can get a good load of that. So you had an icebreaker for us, right?

Yeah.

So what's going on? A little question.

Okay, so what is your biggest pet peeve or something that you just can't stand?

Ooh, waiting in a doctor's frigging office. I feel like usually it's something fun we talk about. I feel like it's a downer today, but it upset me.

Yeah, it's okay. I think it's valid.

Oh, God. I don't know. I feel like I have a lot. I don't know. I hate. I hate it when things aren't kind of put back in the right place. Like, Alex does that to me in the kitchen a lot. Like, he'll take things out from the fridge and he'll just leave them there. And then like, if I don't put them away, it's waste. And I'm like, ah, it's right there. Just put it away.

Yeah, that's annoying.

What's yours?

Is it bad if I don't have one?

No, that's good.

Come up with one.

That means you're a good person.

You have one.

We. I must have a pet peeve. Let's ask my wife.

Oh, you'll bazinga.

Mine is definitely chewing. Like people chewing loud. Drives me crazy.

Really?

Yeah.

Yeah.

Cuz I was about to crack open my. My Doritos here.

Oh, you mean like when he eats.

Like that annoys you? Yeah. Okay, I'm not doing this to annoy you, but I just want to see spun. So if I. Yeah, it's the lip smacking.

Stop it.

That's disgusting.

Sorry.

Mating food.

All right, this might not be my biggest pet peeve, but it. It does bother me when somebody says, oh, hey, how are you? And they're not really asking you how you are, so you start telling them how you are, and they on.

That's my doctor saying, I'm sorry. I'm like, are you? It's like, no.

You really heard about this, aren't you?

Yeah. Pissed me off.

Yeah.

Yeah. And I shouldn't be. I shouldn't be carrying into a podcast, but really, Deb.

We can try to help you find a new doctor if you like.

That's what I was thinking. That's what I was thinking.

I think you have to, at this point.

I know, I know. The exams are gonna get more and more difficult. Yeah, he's a big. He said he's a big fan of our podcast too, so that's an issue. I want to thank our corporate partners to make the show a reality. Christina. Yes, it's Fundera, Fund Box, nextiva, and Receipt Bank. I think someone else is about to sign up. Didn't she always say someone else is joining us?

September and October?

Who is it who's joined us? Yeah, it's not with us yet, but can we give an early shout out or. Not yet? Yeah.

Okay.

No, we cannot.

Okay. You say we're contractually bound not to, so.

Yeah, there you go. I do know that we have a community shout out, so. And by the way, we actually have a shout out hotline if you haven't heard it. Oh, yeah, give us a call. 844-8876-7221, and record your 22nd profit first testimonial. We want to hear your success stories and everything you got going on, but.

This comes at 1999.

Data rates may apply.

It's free. So this shout out goes to Gregory Ashcraft. He's a counselor at law for the Ashcraft firm. He says that him and his mom have been implementing the principles. He talks about the Pumpkin Plan in their business. Now they do less work for more money and make their clients even happier than they did before. His mom has been practicing since 1998, and she says that she has never been more profitable than she is today. So that's awesome. Greg, Shout out to you and your mama.

Yeah. Greg and Greg. Mama. Greg a mama.

Greg a mama.

Yeah. Congratulations. We already talked about our sponsors. You know this show. I did another show on American Express, a show called Turning points. Have you heard it, Moshe?

I love the show.

And the trifecta.

Yeah, the what?

The trifecta. The Tonys, the Emmys.

Oh, that's right. Yeah. Wow. Your memory's incredible. It won all those awards.

I really like the candy store lady.

Yes.

And I also like the. The gym. The gym lady.

She. Yeah, she came on our podcast too.

Yeah, Brianna. And then the. The candy lady was the first person we met with. And the original idea was that I was going to go to each location in person and record it at their place while we are in her back warehouse area where she has all the different candies and there's an exposed piping. That's for the bathroom upstairs.

Oh, gosh.

So every time in here. And he's like, stop recording. Oh. So that squashed the idea. We didn't do any more on site. We did rest in studio.

Oh, that was the turning point.

Well played, well played. Okay, let's get to the show on hand. How's that sound?

Okay.

Okay, Sounds great.

His name is Moshe Amsel. And Moshe, where do you live again?

You're in Jersey County.

Actually, Rockland county, right over the border.

New York.

Oh, okay.

Rockland County, New York, Near Mawa. Yes.

He's just encompassing you in the New Jersey hug.

I'm literally like three minutes from the Jersey border.

Okay. Yeah, okay.

So I'm still a New Yorker. You can't call me a Jersey.

No, I know you. Yeah, technically you are, but you're not. Okay, so Moshe is the founder of.

Shop in New Jersey. You know.

Yeah, taxes, cheaper, big difference.

Okay, so we take your money. Moshe is the founder of Dream Builder Financial, an accounting firm specializing in personal wealth growth through online business and real estate. He's an accountant, business profit strategist, tax guru, and Profit First Professional. Moshe has made it his mission to help people achieve their dreams. Yeah, by guiding them through wealth creation.

That was the rectal exam.

Oh, gosh.

All right, all right, shut up. So here, let me give you three little things you may not know about Moshe. He was successful. He had a successful 20 year career in the IT industry. So do you know what a MAO is? That's an old technical IT term. MAU MAU? No, it's a multi point access unit. I think it's a predecessor to hubs and switches. So, all right, so clearly he's on.

Clearly, that's 25 years ago.

Yeah, he obtained a bachelor's and master's degree while working two full time jobs. That's nice. What's what? School.

My Undergrad is with SUNY Empire State and then my graduate degree is with Keller Institute of business management is DeVries Business School.

Yeah, yeah. And SUNY is a great, yeah, great network of schools. My father went to Champlain in the SUNY system.

One of the well known, one of.

The well knowns in Champlain, you know, very well, very popular. My father's, you know, very famous for going there. They have a statue for him and he's both successful and rapidly growing business while working a full time job. And you're a paramedic?

Yes, I am.

What, what's the most extreme kind of paramedic situation you had to respond to?

Well, due to HIPAA violations, I'm, you know, hipaa.

Oh, interesting.

I can't. No, I'm just kidding.

Not interesting.

I just can't say a name. No, but one of the jobs that stands out in my mind and I had a similar job that I'd rather not put on the podcast, but we did a motor vehicle accident on the Palisades Parkway and the car rolled and the person in the passenger seat, his arm must have come out of the window during the rolling. So his arm was completely severed sitting on the highway. For those of you who are vomiting, please pull over to the side of the road.

Oh my gosh.

Finish. And that's hard.

But my, my brother in law is a professional paramedic and, and firefighter and he sees 10 accidents a day. It's horrible.

Yeah, it's horrible.

I have a strong stomach.

Yeah. All right. On that positive note, but we get.

To deliver babies, you know.

Yeah, that's a positive note. Have you delivered a baby?

Yes, multiple times.

Wow, that's cool.

Really cool.

So let's get into the topic of a business plan.

Yes.

You say you need a. We need a business plan and we can become more profitable with one. Absolutely. Okay. Why?

Well, typically an entrepreneur starts out their business, they have this great idea and they've either validated it or they haven't key you should validate it. But they go out there and they've got this idea and they start to put it out into the world and they have no idea what it's going to cost them to get it to market. They have no idea what it's going to cost them to bring on customers. And if you don't do adequate research beforehand, what ends up happening is you start going through the motions of creating your business and over time those expenses start to add up and you may not have brought the revenue in to cover those expenses. So The Small Business Administration has a statistic as to how many businesses succeed in the first five years, and it's something like 90% fail in the first five years. I don't know the exact statistic because it's quoted in so many different ways. But the reason that I believe businesses fail is one of two things. They either run out of money or they give up because they haven't achieved their goal fast enough. And that goal could be written or unwritten. What causes somebody to run out of money is lack of planning. So if you didn't think about beforehand, what are my expenses going to be in order to get to this stage of business? That lack of planning and it can manifest in multiple different ways. So you can either not have enough money, or you can price your product or service in the wrong way. So if you fail to know what all your expenses are to ramp your business up as you grow, you may miscalculate what your overhead is going to be, what it's going to cost you to bring on staff. And then as you start to have those expenses, suddenly you have a lot of revenue coming in. You're selling 1,000 widgets a month, which is really good. But if it costs you more than that, you're not profitable, you're losing money, and eventually you're going to run out. So a business plan is something that is not a one and done thing. It's not something that you start at the beginning. You create the business plan and you say, okay, I made my business plan, now I'm ready to go. It's really understanding your market, doing the research, figuring out every little thing that you're going to have to do in your business at every step of the way. Now, I don't think you should project out 10 years down the road. I think that on the conceptual level, five years is good to have, but the next 12 months is really what's key. You project out 12 months of the business and it's all of your expenses. What is the different pieces of software I'm going to have to buy? What are the different pieces of. Do I need to buy a computer? Do I need to have an IT company servicing that? Do I need to hire a marketing agency? Do I need to spend money on advertising? Am I going to have to join associations in order to do networking? There's all the things that you're going to eventually find out as you're running your business. You have to take the time. You do that timeout at the beginning and really try to put everything down on paper. Now you say, okay, what is my capacity? If I'm starting out just by myself, I'm not hiring anybody because that's usually entrepreneurs try to start as a sole proprietor and then they grow out of that. So if you're starting by yourself, how many widgets or how much service can you provide or how much of this product can you produce without bringing on additional personnel? Now, you know, if I'm pricing it at this amount, I'm going to bring in this much revenue and then I'm at peak capacity. These are my expenses. Am I in a profitable business model? And this plays into profit first. Because the profit first target percentages give you a mile marker to look at and say, okay, if my expenses are $30,000, well, if my expenses need to be 30%, now I got to take that number, divide it by 0.3, and that's what my revenue needs to be. And if I'm not able to price my product high enough, I don't have a viable business model.

Is that what you do with clients that are incepting a business? You say, okay, what kind of expenses do you expect? And then reverse calculate the income. Do you, maybe you say, what kind of income do you want to take home? And then reverse calculate everything. So how do you do.

That's a very good question and I'm going to give you two answers. First of all, I rarely work with somebody who's incepting a business. I'm usually troubleshooting a broken business.

Okay, okay.

And going back to the drawing board and saying, okay, you skipped this fundamental step. Let's go back here and rework the plan. And now look at your business and say, okay, is it viable? Do we need to make changes in your business? So that's first thing. Second thing is the pricing model. There's really three ways that you can price your product or service. One way is look at the competition and say, I want to be cheaper. Very bad for business. By the way, Walmart does it very well, but they're going to beat you every time. Second way is to look at, okay, what is my overall capacity? How much do I want to earn a year? And therefore how much can I charge in order to be able to make that happen? So let's say that you're a coach and you can only have 20 hours of productive time every week besides for all the other things you do in your business. So now you know you've got 20 hours times 52 weeks. You have a thousand hours a year if you need to earn $200,000, then you got to charge X amount per hour. Right, Right. So that's the second way that you can price your, your services. And then the third way is to look at what is the, the value that I'm bringing to the marketplace.

But that's very ethereal. I mean, I. How do you measure that you're making?

That's a very good question. In my line of work, it's very easy because what I'm doing for businesses is I'm helping them increase their revenue, increase their profit.

Right.

So I can charge them a percentage of the revenue, a percentage of the profit and oh, there you go. And now I'm directly tying my performance to their performance. Yeah, it's a lot harder for other businesses, but every business has, and this is like a word that's thrown out there a lot, KPI's key performance indicators. But part of your job as a business owner is to identify what those key performance indicators are. That if I look at my client and I say, how am I doing? And they say, I don't think, I don't know, I have no idea how you're doing. Can you tell me that? I can then tell them, oh, we've done X, Y and Z. Right. So if you're a social media manager, for example, and you want to go back to a client and say, okay, it's three months since we started working together, let's look at how I'm doing.

Yeah.

What are those metrics you're going to look at? Are you going to look at your number of likes on your Facebook page? You're going to look at your engagement on posts and things like that. So if the engagement is really key to them growing their business, then that's the number that you're focusing on. So now you can say, okay, that's my KPI. My KPI is engagement on every post. So if we have an average engagement of 10 people engaging on a post, then I can say, okay, I'm gonna charge you a dollar for every engagement above 10 that I bring you.

Right.

You know, on average over every month. So now if you increase your engagement to 300 per post, so now you can charge $290 a month for that service, that example. But every business has those KPIs. It's harder with a product based business, it's different with a product based business you have to look at what are they gaining out of that product. So it's a very different model. But you can still look at what is this doing for them in their life and now let me position the product that way.

Gotcha. So I want to go back to that 12 month projection, the business plan you were talking about. I think that people make pessimistic. I'm doing air quotes for the folks that can't see it, pessimistic assessments for their business. And they say, well, you know, worst case, I'll bring on 10 clients this year. And if I do this, do that, it looks like I'll make $7 million my first year out of business. And that's pessimistic. And then the reality hits them. They can't get a single client and they're struggling at the end of the year, they've lost money. But you're saying that projection is extremely important so you can see how you're doing, how you're performing. You got to know all the different elements. How do you know it's realistic is what I'm getting to.

It's a very good question. And the question actually leads me to highlight another one of the benefits of having the business plan. So when you set out on your business plan at the beginning, let's say you have a service based business, that's what we're talking about in this example. So you need to bring on 10 clients over the course of the next 12 months. You know that in month one, you're not bringing on any clients, you're just getting set up. You got to get things going. Let's say best case scenario, you think that you can bring on a client in the second month and then the month after that you could bring on two, right? So on that, and then if you bring on two every month, you hit your goal at the end of the year, right? So when you create the business plan and you say, okay, month number two, I'm bringing on one client, you now know that your entire focus that you're working on your business in month number two is to bring on one client you're not focusing on, oh, I got to bring on 10. And you had Donna on episode 154. She was doing those stand up meetings and touch points with her team every single day. She talked about focusing the team on one task for the day, not giving them a whole task list to do, but have them, they have to narrow down to the one thing they need to do. It's the same concept where if you funnel all of your efforts into one goal, right, you're going to be able to achieve that goal. So if every morning you wake up and you say, okay, what am I going to do today to try to get that client? Whether it's outreach to other people, networking in different circles, calling people, sending out proposals, if all of your efforts are being focused on just that one thing, you're much more likely to achieve it. So as far as what's realistic, I think it all comes down to time and how long does it take you to service your clients. And if you're starting a business at the beginning, you need to make a very, very fundamental decision, and that is, do I want to make the most of my time and be a sole proprietor, just a solopreneur, and just figure out how to bill my time at the most I can per hour and be able to survive that way? That's one business model. The other is I'm an entrepreneur and I am building an enterprise and I want to continue to scale this model. And if it's, if it's the first thing, then you have to figure out how to maximize your time. You have to put pieces in place to do less work, use technology to replace the work that you're doing, try to focus all of your efforts on the things that are going to be making you money so that you're maximizing the return for your time because you're trading time for dollars. When you are an entrepreneur, you have to enter into the creation of the business in that mindset. Now granted, if you don't have money, you're not going to be able to start that way. But if it's constantly on your list, then you know that when I bring on six clients, that's when it's time for me to hire my first VA to start offloading some of my work. Because now my time is going to be busy with things that are not going to be directly helping me bring my seventh client because my six clients are taking up all my time. So it's analyzing that time versus money calculation at every step of the way and you need to look at that every month. So when you do your 12 month projection, you're always looking at, okay, what can I handle? And does this feel like it's going to be too much for me? And if it does, then this is when I need to put in another expense item to bring on that additional person to offload some of that work.

Okay, so the business plan, it sounds like it's a vision to some degree, but then the on a daily basis you're making, as we heard from Donov, now hearing from you, these incremental adjustments, incremental movements forward, is that What I'm hearing, right?

So I encourage my clients to revisit the business plan every month, but to take this month's goals and print them out and put them in front of you so that you're constantly looking at and saying, okay, my goal for this month is to do these changes in my business. And it might be bringing on new clients. It might also be making your first hire. You know, if you've never hired somebody before, then you need to assume that if you're focusing on hiring somebody, you're not going to be focusing on bringing on new business. So maybe if I had eight clients in November and I'm making my first hire in December, in December, I remain with eight clients on my business plan and I don't focus my efforts on bringing on any more business because right now I'm going to focus on bringing on the right person to help me.

It was interesting. We do a daily huddle, but we also do these quarterly meetings. We just had one, we went bowling afterwards, everyone got their own custom T shirt. But above our huddle board, we put our quarterly goal and first quarter was retention. We wanted to improve the offering we had so that members would want to stay longer. And we didn't really go into like super details like we had to do this and this. But the end result was our retentions improved, we improved our products. The second quarter was leads, right? We wanted to not leads, but it was more members acquisition. Now we have a better system to keep people and offering better things. Now we want to get more members on board. And we had our strongest growth ever toward the end of second quarter. And I wonder, do you, would you attribute something like that to just stating the goals and making it public?

Absolutely, there's no question about it. And the other thing that I, I would attribute it to is identifying which was the right one thing to concentrate on. You understood that before I make an effort to bring on new people, let me figure out how to keep the ones I already have, right? So that was a much better use of your time. First is to make sure that you're keeping more members because there's two reasons. Number one, every member you keep is one member less. You need to buy, you know, sell on the other end. And number two, it's maximizing your further efforts on the next step once you've figured that part out. So properly identifying what the next one thing is is key number one. And then key number two is writing, verbalizing, and also manifesting like. And I'm not one of those woo, woo. People. But I've been listening to things like that, you know, out there in the podcast world. I like James Wedmore's podcast.

I'm not familiar with that one.

Mind your business.

Oh, cool.

Yeah, it's a great podcast. But one of the things that he talks about a lot is envisioning something. When you start to envision something happening and you can picture what it looks like after it happens, it makes it that much more attainable. A good example is somebody who has, at one point in their career earned $100,000 is much more likely to earn $100,000 again. They can feel it because they know that they're capable of earning $100,000. So it's not funny. It's that kind of idea that if you put it down on paper and you're able to envision having done it, you now have the ability. You've. You've convinced yourself, I could do this. So now it's not. It's no longer an emotional question of am I able to or not? It's a question of how am I going to do this?

We did. I did a call with one of our members. Actually, it was that group call you had me do yesterday, Kelsey, not you, but the webinar, you know, you forced me to do was about pricing. And there was. How many people signed up for that? Couple 100, maybe 95 people. So there's 95 people. And that's on. Is it. Is it not loud enough?

No, I just can't tell.

Can you not hear yourself? Yeah, no, I turn up your headset a little bit. I think that's you. Is it better now?

Yeah.

Okay. Are you just saying that?

Well, I said it before I heard myself.

Okay, so there was. There was about a hundred people on this call, and I. It was about pricing. I said, what's the number one per. What person will give you the biggest resistance to increasing your price? And I said, is it your first customer? Your number one customer? Is it who will give you the most resistance when you increase your price? And people start saying, wow, it's my. The first customer I ever brought on board, or it's my most recent customer or it's the one who pays me the least? Currently, I says none of those. It's you. You are the biggest resistance. Because we have day and night where I can't do this, and here's all the consequences, and we never take that stuff forward. And what I'm hearing from you is the same thing, is if we can visualize it and clearly the Business plan is a document of our vision, right?

Absolutely. Yeah. And imposter syndrome is what they've dubbed this. You know, this game that we play with ourselves. But entrepreneurs are plagued with this. And, you know, this is not the kind of thing you can go to the doctor for. But every single day.

Well, my doctor would make you wait forever anyway.

Right. And then. And then do a rectal exam.

Yeah. That's how he ends every meeting.

So. But entrepreneurs are just guilty of this every single day because you're constantly fighting with yourself and your own internal battles of, I don't think I can do this. I don't think I can do this. And there's no easy fix to that. It's all working on your mindset. And that's why I think that putting it down on paper sometimes makes it look so easy. And at some times, it's going to make it look like what it really is. That it's a terrible idea.

Yeah.

You know, and something's completely broken. And there's two reasons for creating that business plan. Either to catch before you spend all this time and all this money. Catch a bad plan in the beginning, nip it in the bud, and say, geez, this is not going to be a good business model. I got to think of something else, or change my pricing or do something to make it work, or give yourself that plan that you're going to be able to follow. And now when you're following it, it's going to get you to fruition.

Did you do a business plan, Kels?

I didn't.

You didn't?

I mean, I had a vague one, but not with, like, set goals.

Okay.

And that's what I was thinking. It is. It's too easy to not be accountable when you don't have. I'm not meeting this measure. You know what I mean?

Right. And you don't. It's like driving, you know, nowadays without a gps, but in the old days, without a map. Right. When I was a kid, we would go on trips to my grandmother in Toronto, and I loved. I would sit there in the car with the map, and I would tell my father which mile. Mile post is coming up next. But if you don't have.

Hold on. Every mile. For God's sake. All right, exit mile 43. Daddy.

Exit 32 is next.

You know, it comes after 43, 44. That's coming. That's funny.

Yep. Well, hey, look, I know I'm accountant. I'm an accountant now.

Right.

So it all makes sense.

That's funny.

But with without that map, you can be driving for, for days and be going the wrong place, Right?

Yeah.

You start off in New York, you could end up in California when you want to go to Florida.

Yeah.

So the business plan is your gps, it's your directions, it's your, it's, it's, it's your ability to look and say, oh, there's a street sign. Am I on the right highway? Yeah, yeah, you know, so, so constantly going back to the business plan and revisiting it every month. So by having a rolling 12 month period, what you're doing is at the end of the month, you're saying, okay, did I meet my goals? Did I not meet my goals? Is my goals next month now in line with where I am today? And you might need to make revisions for everything for the next 11 months, but you have to add month number 12 again. So you're constantly keeping a 12 month picture in front of you. A lot of people, you know, say, oh, I, you know, I do planning, whether it's business planning or just goal planning for the year. And they do it in December for the next year.

Right.

But what are you doing in November?

Right.

You have no plan two months later.

Right.

So you constantly planning is something that you have to revisit. And I think you can get too crazy with it. I think if you revisit it every day, you can make yourself nuts. And sometimes the data, the input that you're looking at is not updated quick enough. But if you look at it every month, that's a close enough period of time that you can stay on course and not veer too far off. And it gives you that check. You know, if you're, if you're driving and you notice 10 minutes into taking the wrong turn that you took the wrong turn, it's only 10 minutes to get back.

Right.

But if you notice two hours into it that you took the wrong turn, you now got a whole new vacation on your hands.

That is, that visualizes, that's a good one. What about the core elements of a effective, profitable business plan? What's the stuff I have to have in there? You said 12 month vision.

Well, you got to have money coming in, you got to have money going out.

So you have to know, you got.

To have money that's left for you. Right?

Okay, so I got to know in my business plan, how's money going to come in correct? I have to know how and where and who's going out to correct. And then what was the last one?

What money's left what money is going in your pocket?

Okay.

So you have. And. And following the profit first model, you have your owner's pay and your owner's profit.

Yep.

And one of the things that when I meet with new entrepreneur, without new new clients, entrepreneurs who usually are entrenched in bad habits, they have a very difficult time differentiating those two. Right. So the way I explain it to them is I tell them, well, think about what you do in the business. What would you pay somebody to do that job?

Right.

Okay, now think of you as an investor. Okay. You buy stock in Facebook, for example, Right. You own shares in Facebook. You're not gonna show up to the Facebook office and say, hey, I'm here. I'm gonna, you know.

Right.

Where's my desk?

Where's my money?

No, where's my desk?

Oh, yeah, right. I'm here to work. Right? Yeah.

No, you're an owner of the business. You do nothing.

Right.

But at the end of the day, if the business made profit, you share in that, right? You share in that. But if you work for Facebook, you don't necessarily own Facebook shares.

Yeah, great analogy.

You know, you're getting. You're getting a paycheck for the work that you're doing. So the owners. The owner's pay is an expense of the business to pay you for the work that you're doing in the business. That shouldn't be on an upward projection forever. That should be directly tied to the function that you're carrying. Now, yes, CEOs can get paid a lot of money, but if what you're doing can be replaced by somebody who's earning $50,000 a year, that's where your salary should be capped. The rest, any other money you want to take home is profit that the owners are taking home. Now, if you own your own business, it's all going to you. But a lot of times you have a partnership.

Sure.

Well, that partnership you guys are splitting in the profits. Whatever your profit sharing, you know, ratio is, that's the owner's pay that's come. That's the owner's profit that's coming home. That's not the owner's pay. The owner's pay is for the owners that. That are active in the business. And sometimes a partnership is, one person provides equity, the other one provides sweat. Right? So if you're the one working in the business, you should be pulling a salary.

Right.

And then the profit that's left should be divvied up to you and the investor. The investor doesn't collect and Owners pay, right?

Gotcha, Gotcha.

But to answer your question, those are the two items that need to be in the business, your business plan. So your business plan has to have your projected revenues, your projected expenses, and the money that's left. What are you going to do with it?

Right?

So some of it is going to be owner's pay, some of it's going to be profit, but some of it you're probably investing back in the business. And that's a key component of the business plan. Because if you don't have a plan of what am I going to do with the money at the end of the month, you'll do the wrong thing with it. You'll either take it home and spend it, because Parkinson's law, you're going to just spend it, right? Or you're going to pump it all back into the business and take nothing home for yourself and you'll burn yourself out. So there has to be a plan of what you're going to do with that money once the business starts generating that extra, that extra cash flow.

You know, as I travel and teach people on profit First, I tell them about, they often talk to me or ask me about plowing back money into the business, reinvesting money, and they say, you know, that profit needs to be reinvested, but Profit first has it embedded in there because it's a percentage based system. If you're allocating 30% toward operating expenses, as your revenue increases, the actual money going into the operating expenses increases. So do you get that resistance to people say, I can't take my profit, I need to plow it back in the business. Even though I would argue it's kind of accounted for already in the system.

There is that resistance. But when I'm putting somebody into the profit first model, I'm explaining this all up front. And we're also starting their profitability as such a small amount that by the time they're eased into the full plan 18 months later, where they're taking their max profit that they're supposed to, they've already experienced growth in other areas and they see that there's that extra money in the operating expense account that's now going to the things that they want to do to grow the business. But, but it goes hand in hand with the business plan. Profit first and the business plan work very well together because Profit first is a cash management system that once the cash comes in, what do I do with it? The business plan is saying, we're projecting this cash coming in. What are we going to do with it. So we really work the two of them together and make sure that we're within our percentages. And if we have a goal to bring on this many clients, which is going to mean spending this much money on advertising, for example, to bring them in and that exceeds the operating expenses percentage, we now need to figure out, well, how are we going to make this goal happen without exceeding it? And we got to start putting our thinking hats on. And there's things you can do, you don't have to pay up front for that advertising. You can partner with somebody who already has an audience or already has a group of people that are your target market and pay them after the fact as affiliates instead of, you know, or joint ventures as opposed to paying for upfront ads. So there's always something you can do. When you want to grow the business business and you have an expense that's looming and it's outside of the percentages, you can start putting your thinking hat on and say, okay, how else can I do this? And if you do that in the, in the planning stage, you're much more likely to keep to your profit first allocations in this, in the expenditure phase.

So the, the business plan is a map to get there and profit first is the daily tracking. It's the in the moment.

Absolutely.

So, so that means the business plan is the map your dad was using to drive Toronto. And profit first is that kid in the backseat going a mile marker four.

Exactly.

Okay, I got you, I got you. Can I use an online business plan and download it? Can I use the generic ones? How do I come up with a good business plan?

Well, that's a very good question. And the answer is I would discourage that.

Oh, interesting.

Yes, there is software, great software out there. It's very inexpensive. It's called LivePlan. L I V E P L A N. I get nothing for touting them here and neither do you.

But make them a sponsor quickly.

Someone tells you, I did try to connect you for ProfitCon, so we'll see what happens with that. But Live Plan is an application that basically it will integrate with your accounting software. So you could then look at your plan and compare it to your actual results. So it'll import your stuff from Xero or QBO QuickBooks Online and Analyze that in comparison to the plan that you put forth. But you could use it independently. Whether you have accounting software or not, you could use it independently as a planning application. I think it's $19 a month. But for $19 a month it will Walk you through, it'll ask you, what product are you selling? How much are you charging for the product? And it'll just walk you through the whole process of creating the revenue streams, the expense projections, and then the profit projections.

Can you do hypotheticals in me life plan or should in general and should we.

The answer is yes.

Okay. To all.

One thing I learned from James Wedmore, I'm deeply entrenched in the online business space. So my target market is, you know, digital product creators, membership, site owners, coaches. Okay. So I'm very, very deeply entrenched there. James Wedmore is somebody I look up to a lot. He's a big, big guru in the online business space. One of the things that he taught me is when you're preparing for an online launch is to create three goals. So you have your ideal goal that you're striving for and then you have my worst case scenario that if I don't achieve my goal but I get this worst case scenario, I'll still be okay. And then you have your wow number. Like, if I hit this number, I'm going to be like so ecstatic that, you know, whatever, we're going on vacation and singing hallelujah. Right? So when you.

We had the soundtrack took me a little long.

I was prompting you, but yeah, I know. So let's say that you're preparing for. In the online space, you launch a couple of times a year. So let's say you're preparing for a launch and you say, okay, my ideal goal would be to generate $45,000 in sales. If I generate 20,000, I cover my expenses. I still get to take something home, so that's okay. Like if I get 20,000, I'm not going to cry. I'm just not going to be ecstatic. 45,000 is where I want to be. If I hit 100,000, then I'm going to be like, whoa, I blew this out of the water. And this is totally amazing, right? That's the way that you can approach your projections within the business plan. And you can play on. You can choose those three, those three numbers and then say, okay, what does this look like? If I punch this what if in what does it look like? And it will. The thing that's really cool about the software is you can put in the variable stuff. So let's say that for every 10 clients I bring on, I have to bring on a virtual assistant, right?

There's a cost.

So I can put in that. For every 10 of this that I sell, I need to Increase my virtual assistant by one. So if I play with my numbers in the revenue side, it will automatically change my projections on the expenses side and I can see what that'll do for my cash flow. So I mean they even have a component where it'll tell you how much money you need to go and get a loan for.

Interesting.

If you, if your cash flow is delayed and you're going to need to, you know, in order to meet the goals and the projections, you're going to need a $20,000 line of credit to make it happen. Because in months, you know, three, four and five, you're dipping and then you exceed it. Now, you know, okay, if I want to be able to achieve this goal, I got to go and work on getting that line of credit first before I start working on, you know, cool on this, on this business. So.

All right, you brought us thought full arc here from the traditional business plan to a live dynamic plan. I like that motion. We got to go. We're at time here. Where can people learn more about you, Especially our online listeners, right? They have online businesses, membership organization. They got to use you. What do they do?

Right? So I have a blueprint that I've created. It's called Idea to Profit the Entrepreneur Blueprint. That blueprint can be downloaded from dreambuilderfinancial.com blueprint if you want to just get the. Because business plan is just one of the steps in there. There's a series of steps that needs to be executed in that order in order to really have a healthy business that's going to grow very quickly. So if you want to get access to that blueprint, you can download it from there. Another thing is I just last week and this is very new so I'm not, I haven't done anything about it yet. But I really was thinking about like, why am I doing what I'm doing, right. Innately I want to help people, right? That's why I'm a paramedic. That's why, you know, I used to be in the IT industry. I've always been in a job where I'm trying to help people. Now doing people's books, that's not helping them, right? But helping them grow a business where they're able to either leave a full time job or create a future for their family, free up the time that they're going to be able to spend with their family. That is really why I'm doing what I'm doing.

I see.

So I decided that I'm going to have a goal for myself to help a thousand businesses achieve a $100,000 revenue a year business.

Oh, nice.

Over the course of the year.

Nice.

So that's, that's my personal goal. So if you want to get in on that. I have no idea how I'm doing it, what I'm doing, but that's encouraging words.

I like that.

Right. Well, hey, I just, I just decided on the goal. This is, you know, just like anything else, I have to hash it out. Like, how am I going to get in front of a thousand people?

How am I going to write a business plan?

Exactly, Exactly. So it's a plan and process. But I have created a page for you to go and get on the wait list. If you want to be part of the movement and be part of the 1,000 businesses that I help get to $100,000 this year, just go to six figuresinayear.com. six figures in a year?

Is it the number six or the word six?

Either one.

Oh, there you go. Six figuresinayear.com. that's cool that you're doing that. So everyone sign up. I can't speak more highly of Moshe. You're a wonderful profit first professional. You are doing extraordinary things. I love that you're helping me startup businesses too. So thank you for being on the show.

Oh, you're welcome. Thank you so much for having me. It's really a pleasure. And I get to be here in person. And can I just say something about your office?

Only if it's good stuff. Otherwise, Brian, please come.

Can we talk about the bathroom?

What was that all about?

Okay, so in the profit first office, there's a bathroom. If you open the door, there's two stalls. One stall says gentlemen. The other one says, ladies, when you go into the bathroom, you don't know if you're supposed to close the stall door and leave the front door open or if you're supposed to close the outer door. Right? Yeah. So here I go in there and I'm like, I left the door open in case a lady wants to come in and use the bathroom. But then the whole office is hearing me going to the bathroom. So you need instructions on that door.

Close the door.

Close the outer door. Right.

Actually, we had a guess who walked in on him. Kelsey is supposed to be my language guard and my bodyguards. She did. I'm like, moshe's in where? And I go in there and now I'm like dancing with him. We did have a guest, a female guest in here. And she saw you walk in and I asked her do you want to go in the bathroom? Here's her response. Oh, hell. All right, we gotta rock and roll. We're getting tight on time. Moshe, again, thanks for joining us.

Thank you.

Here's what we're gonna do. In a minute, we're gonna tell you, our dear listeners, what we learned from Moshe, some of, I think, his best tips. And first, I want to thank our corporate partners. So here they are. First is Nextiva VoiceOver IP phone system. Yeah, how do you like your Nextiva phone system?

I love my VoiceOver IP system.

And you do. You. You cannot lie. You're like Pinocchio. You cannot lie. How about you? Do you like your next?

Love it. We just ordered another one, too, for.

Oh, for the new person.

Yeah, yeah.

It's a little secret. It's a little secret. Awesome. How was that experience ordering the phone?

Amazing. It was fast. I told them exactly what I wanted, and they were like, all right, it'll be with you in a week. And I'm like, awesome.

So here's another great experience. I called nextiva. We have Moshe, you're an IT guy. We have a wireless router device over there that I literally bought Walmart for 20 bucks. We're running our whole network off of it and all of our phones, and they're great, but I called nextiva and said, I think it's time we upgrade. They said, no, no, no. You can keep that piece of crap and it'll work. And it does. Like, like, Next Diva said they had an opportunity to sell more stuff to us. I said, n. You don't need that.

All the hackers listening. Their ears, probably.

Yeah. They're like, okay, I'm countless. Is down. Yeah, going down. All right, so next. Steve is awesome. Receipt Bank. Yeah, we use them. Do you use them? Mosh Moshi Moster. Okay. Receipt Bank. Well, dude, you want to be efficient? What you do is Receipt bank will scan in all of the receipts for your clients or yourself and tie it right into QBO. 0 and so forth. We use it.

Shoebox no more.

Yeah, I forgot. Scanning my receipt from today.

Do it now.

I know it's not over.

It's not over. It's my pocket. Fundera.

Yeah.

One stop. Shop for loans. You know, Moshe said it, you may need a loan. His live plan. Not his life plan software, but the live plan software you're talking about could say you need a loan. Fundera will shop it for you, and then they'll make a recommendation on which one's the best for interest rates and so forth. And Last but certainly not least is Fundbox. They're going to be a profit con.

Yes.

Sheila. Sheila. Joanna will be with Sheila. The two of them will be getting schwasted together. They're both boozers. But Joanne will be there. Neither of them are. Fundbox is a cash flow accelerator. You have an invoice that's due to you, and hanging out there, they'll release the money to you right here on the spot. So if you need a bridge loan, effectively, they will fund it usually within 24 hours or faster. Pretty cool. Cool. Yeah.

Really cool.

Okay. All right, now it's time for my favorite part.

Right now.

Kelsey, you want to go as far as.

Yeah, I want to go.

Yeah. You don't want to go to the bathroom, though. You want to go, but as long as it's not in the bathroom.

As long as Moshe's not in there.

Yeah.

Well, I pay attention when somebody tells me, don't go in there. First of all, it was literally like.

You did not say, don't go in there.

No, but she was. She was like, moshe's in there. And you're like, okay.

And then you.

I know, because you did a head jiggle.

Not only that. What do you think it was?

A rendezvous in the bathroom? Me and Moshe in the little stall?

Yeah. And then when he came in, he's like, oh, is somebody in here?

Well, I saw your sneaker tapping, like you were dancing or something. I'm like, what's this guy doing? You remember my three sons? You ever see my three sons? The beginning?

Is this another 1970s innuendo? Yeah.

No one knows my three sons. Oh, my God. All right, we're going to YouTube this. In the beginning, they have this foot tapping. That's how the thing starts out. It looked like a My Three Sons episode. So I almost looked under the stalls as I said, no, no, say, this is My Three Sons. But you did say, someone's in there or don't go in there. You said, moshe's in there, and I thought you meant the conference room because your head was moving like that towards the back.

Excuses.

Okay, what'd you learn today?

Oh, I forgot. I learned that I should have made a business plan. Mostly. I just. I love the thoughtfulness of planning out. And I think 12 months in advance is perfect because it's not too overwhelming. I think the reason I didn't do it is because it was too overwhelming for me. And I thought the best way to learn is just to jump in. But I think due diligence is super effective in this case and listening to you, it makes it much less scary than it seems, especially if you think about liveplan, because that's awesome.

That was awesome. Yeah. And I think you could still do it. I mean, you can still do a business plan. Why wait? What'd you learn, Christina?

I kind of feel the same way. I mean, this is. I don't own a business, but just my future goals of potentially opening a voice studio when I would still love to do that. And I'm just. I've been petrified to even consider it because I'm like, oh, I haven't been on, like, just whatever. So just listening to you, you do have a very calming effect. And I love the three goals. Setting your, you know, worst case scenario, what your actual goal is, and then that wow factor, because then you, you know, where you have to be minimum, whereas instead of like, oh, my God, I have to do this and I'm not going to make it, and then it just like cripples you. So I love the 3 structure. I think that's very impactful.

I like the idea of moving incrementally. He said, you know, revisit it once a month and in your business, get one thing done at a time. It's always stepping forward. And so the business plan is this vision, kind of the X on the map of where we're heading. But you got to move in these incremental steps. And we want to know what you learned, dear listener. Not. Not just us, but we want to know, like, what are the tips you took? Because where can you leave those comments, Christina?

Oh, you can go to I.

She's dancing. She was dancing. I know. The shoulders were dancing.

You go to itunes, Stitcher, Tune in radio, Google Play, and of course, profit first podcast.com, which is also linked to profit first professionals.com.

Oh, my Lord. Moshe, how do you like being Profit First Professional?

Seriously, it's truly amazing. It's a wonderful experience. And I love stopping by the office. I know that not anybody who signs up can do that because you're not 30 minutes away from the office. But the guy, the whole crew here.

Is just outstanding, outstanding people. Yeah. We love having you here.

Yeah, yeah.

Prof. First Professionals is a membership organization of what we call the ABCs, accountants, bookkeepers, and coaches who are driving properly for their clients. And this is the future Moshe of the professions. We're moving toward a constituted model. The computers are taking over the transactional stuff, but we gotta do what you're doing. Consulting clients on how to become profitable. You're Helping a thousand small companies become profitable and sustainable by consulting them. And that's what Profit First Professionals do. You can work with any business that wants to drop drive profitability, but you don't have to figure out how to do it. We give you the methodology. It's the Profit first methodology. We authorize you in it. We give you the brands, we help market you. We guide you along the path. And at the end of the day, we make you more profitable and your clients more profitable. Well, here's the deal. What? One more. Here's the deal. You can become a private First Professional if you are an abc. So if you're an accountant, bookkeeper, coach, coach. Go to Profit First Professional. Step one. Step two. That's for you. I got one more thing for you in a second. Step 2. Fill out the form. Now here's the thing. If you're not a pro, if you're not a abc, but you need the services of Mike Moshe, we do that too. We make the introductions. So mostly entrepreneurs that are not ABC's listen to the show. So here's what you do. Go to profit first professionals.com. click on the find button. Step one, step two, fill out the form. It's the same idea. And we'll introduce you to Moshe or whoever is appropriate for you based upon your niche. So do it right now. Go to Profit first professionals dot com. That's it.

Do it.

We can get out of here. And this is what I had for you.

You're welcome, everybody.

How old are those chips?

I'm pretty stale.

How old are you?

Anyone want a chip? You want?

All right, we'll see you guys for it.

I like this part. I like this part. Now listen to the build. Here we go. Here we go. Get fired up. Sat.