Episode 174: Step by Step of the Pumpkin Plan with James E. Cawdron

So I got. You know, it's so funny. We're talking in studio here. I have my, like, things we can talk about.

Yeah.

But we start talking about that sauna. I really want to have a sauna for my house.

Yeah, I think you should.

And Brian, our sound engineer says. Oh, you can get them for like 2000 bucks. Yeah.

For like a four person one. Yeah.

Really? Yeah. It's unbelievable. You literally plug and play these things. Plug and play them.

Plug and play. I play with saunas all the time.

But where would you put it? You have to bring it inside or you leave it.

Like you could put it outside of your patio.

Oh, on the patio. That makes sense.

I mean, other people do have it inside, but I think those ones are designed that you can set them up.

Yeah. People put them, like, in their bathrooms, next to the shower stall.

That's creepy.

And have them. Why?

There's things that creep me out. I've been to hotel rooms where they have a Jacuzzi in the. Like next to the bed.

Yeah, that's disgusting.

Yeah, that's weird.

Yeah, that's disgusting.

I agree.

Would you ever go into a Jacuzzi?

No.

Yeah.

Have you ever seen that? One of those bedrooms, enclosed wall, like in the Poconos.

Do you remember? Do you remember the Poconos? What was the name of that place? Mount Airy Lodge.

Yes.

Moun Lunch.

It was like Cove Haven.

The commercials, like in the 70s or 80s. I don't know if you guys remember this. They had commercials of. Of man and woman.

70S. Well.

Oh, like in the martini glass.

You were in the 70s?

That was my point.

Oh, so they. Yeah, it's a martini glass and. Or champagne glass. And they're sitting in there naked and their ass cheeks are smeared up against the glass. And Mount Harry Lodge is like, place for lovers. And like, who would ever go there?

So creepy. Now that I know that that ass cheek was on it, I definitely don't want mine on it.

I would never at a hotel or any places ever go in one of those things.

Yeah, it's gross.

Yeah, they're gross.

Gross, disgusting. So we're looking at the saunas, and then we found one that's a bag. It's literally a bag. You wrap this bag around you. It's only $129. Whatever. You wrap this sauna bag around you. And you said your landlord, your old.

Landlord, speaking of having them in your bathroom. She had it in the bathroom.

Yeah.

But I will also say that her bathroom was Finding Nemo themed. And there was like fleece blankets pegged on the walls with stuffed animals coming out of the walls. Yeah. So that wasn't the most bizarre thing in the room.

Okay.

She's unique. All right, let's go.

She's the unique person. Okay. You're listening to the Profit first podcast, episode 173. That's right.

Yeah. Christina had to grab her headset. That's too loud. We're here. Yeah, we are.

Welcome, everyone, to the Profit first podcast. I'm your co host, Christina Bullock.

I'm Mike McAllister, the author of Profit First. Also in studios, Kelsey Ayers.

Hey, everybody.

And you, my friends, you're listening to, as Christine told you, the Private first podcast. We explore every single part of profitability and how, you know, to make your business like, you know, kind of like make, you know, more money, you know, kind of like, you know, pretty rad.

We do pretty rad. You can find us on Stitcher, itunes, Google Play, Tunein radio, and of course, Profit first podcast dot com. What else is going on?

So what else is going on? I was at. I turned on a violence thing.

You're overwhelmed right now?

Yeah, I'm overwhelmed. I. I was at a speaking event recently. I'm not going to say which event it was. It was the worst speaking event I've had. Did I tell you which?

Yes.

Yeah, yeah. The audience was like, I thought they were dead. I thought I was in a morgue, actually. That's a disservice to a morgue. Like, a morgue is more lively in this place. But that being said, the introduction, I go to the host event and say, who's gonna be introducing me? He said, oh, such and such person. I said, okay, does that person need my bio? And do they need to know how to pronounce Mallowitz? Because it's a really hard name. Oh, no, we've got it all nailed down. They've rehearsed. We're set to go. I said, okay. I get ready to get on. On stage, and the person comes out to introduce me is someone else entirely. And I whisper to host. I'm like, who's that? And they said, oh, the person that was going to be introducing you had to run out. So we put someone else up there who didn't know my bio nor how to pronounce my name. So this person goes, oh, we have a speaker, you know, who wrote some books.

Oh, God.

And they're, you know, they're good, supposedly. And she goes, I like to welcome to the stage Mike McNally.

Okay, good.

And then she says, Which I. This is the worst. She looks to the back of the room where I'm standing, she goes, did I say that right?

No.

No. Here's the answer. As a speaker, you say, always say yes. Because if I say no, then it's like, oh, what's the right pronunciation? I'm like, yes, it's Michala Nickel. The last four letters of the word aren't pronounced. It says dropped, so.

Oh, man.

Okay, that was a long. I just asked you guys what you're up to, but I killed too much.

Time lamenting about my daughter.

You know what, though? I think you're gonna have a great event this week because it's nothing but a lively bunch of ladies.

Oh, on Saturday.

I'm pretty sure they're gonna be excited. Yeah.

We are gonna rush it. Yeah. I can't wait for that event. That's gonna be my coming back.

Yes.

Okay.

It'll balance it out.

Yep. Yep. All right. Christine, what you got for me over there?

This is probably the shortest shout out ever, but I love it. This is from Matt Ebrook. He said, I. We want to be permanently profitable. Always. And I'm in.

Matt, you're in.

You're in.

Ed Broke. Ed Brock.

Ed Brook.

I said it right.

Come on.

Ed Brooke. Ed Brock.

Ed Brooke. Well, Ed, dude, we are proud of you. Let's make yourself permanently profitable. Okay. Also, I want to thank our corporate partners. Make the show a reality. And my screen just got covered. I have to do from memory Fundera.

No, no, it's fun to box.

I'm stuck on Fundera. They're getting free promos. I'm mad today. Funbox. Who else?

Nextiva.

Yes.

Esteet Bank.

Okay. Wonderful companies. We'll tell you more about those folks in just a little bit and you can check them out. And that means we're on to our show. James Caudron has used the pumpkin plan methodology in his business, Manhattan pos. He spends formative years in his parents pub and hotels. Not a bad place to spend formative years. And he continued to study. Is that true? And he continued studies by enrolling in hotel school. Afterwards, he had stints in Gleneagles in Scotland. The famous Savoy Hotel in London, which I think you both have spent some time there. P and O cruises, et cetera, et cetera. You know, one thing you won't know this about, James and I almost question if this is really true. He touts to have worked in 99 countries.

That's awesome.

James, welcome to our show.

Thank you so much.

So when you say You've worked in 99 countries. Have you physically lived and worked in those countries, or is it like remote or what is this?

I worked on a cruise ship.

Oh, that's fine.

Very tricky.

That's.

Well, Even still, though, 99%.

That's impressive.

What was your favorite country to visit and work in?

I think there's just too many. One of my favorite places was Madeira. They had a very nice restaurant up on the hill. You got completely hammered and ate good food, so that was a good one. But, you know, Spain, Portugal, Israel, you know, there's just too many. Australia. Yeah, all good things.

Cool. All right, well, I want to learn some insider tips after the show from you where I should visit next. But now let's get into your. I want to talk about your business. You use the pumpkin plan, and I'm curious. I just want to explore what turned you onto the pumpkin plan and what business did you apply it to and where were you? Let's just get started with the story.

So a friend of mine recommended your book. I was 100,000% skeptical. I picked it up on my iPad within about three or four minutes. I'm like, oh, my God, this is exactly me. I don't want to be the one ball guy. This is mirroring my company exactly to the table. I'm in it. I have these same pain in the ass customers that are driving me absolutely crazy. They don't pay. They're calling my cell phone, they're calling my home phone, they're calling my office phone. And, you know, I had to make changes, and I followed your recipe.

So let's talk about your business. It's Manhattan. Pos what exactly does your business do?

So primarily we supply point of sale systems to restaurants, bars, nightclubs, coffee shops. And then we support them, train them, take care of the hardware, software, all those good things.

And are you located in Manhattan, I presume?

Yes. We're on 57th, just off Broadway. So we're right in the middle of midtown.

Okay, so your clients are mostly in the city, I presume?

We're about 100 mile radius. So we have some. Some guys, you know, out on Long Island, South Jersey, up into Connecticut, and then we service a few people further afield into Virginia and Mass.

Cool. Okay, so tell me the problems that your business was facing prior to implementing the profit. I'm sorry, the pumpkin plan.

Exactly as your book dictates. I was fighting to make payroll every two weeks, and it was upsetting me, it was upsetting my clients, it was upsetting my employees. I was Asking my employees to ask for checks after service calls. And it was just a horrible place to be. I think we have a nice business. We have three or four hundred nice clients, but there's a whole bunch of them that just weren't paying. And I was fighting probably three or four days a month, just working on accounts receivable, trying to get paid.

Oh my gosh. I presume that's pretty confrontational to call up clients and where's my money? It's uncomfortable.

And it can be because how many times can you email or call somebody and you know, they're like checks in the mail. Well, you said that three weeks ago. Here we are. I don't have a check. Can I come over? They're like, oh, I'm not in today. Okay, can I come tomorrow? Well, I'll be on the road, you know. And it just, yeah, it just became nasty with some people. Some people say, come get a check. But you know, a year after I invoiced them, you know, that's not nice.

More than that nice. I mean, this is devastating to your business because I presume all that equipment you installed, you, you paid for that, right?

Exactly. Basically coming from my pocket, my pension plan, my father in law, my wife, whoever would give me the money to pay for the next deal.

And so what do you think is the justification for those clients? How can they justify. They're really, I mean, technically they're stealing from you 100%. Yeah. And do they go into this knowingly that hey, maybe we can get one over this guy and they're stealing or do they, do they buy the stuff and they're like, oh my God, we couldn't afford this in the first place. And now they're playing a game like, what's the psychology?

I think, I think that's a very good question. The mentality I think in the restaurant business is there's a lot of pre Madonna kind of attitudes. Yeah, we're going to make this work. I'm going to buck the trend. Restaurants always make money. So I think they go into it thinking that they're going to, you know, with good intentions, they're going to make money, they're going to be able to pay their bills. And you know, it's the restaurant business, it's not the reality. So I think there's an element of that.

Yeah, okay, so where do you stand today? And then we're going to learn the story of how you got there. So when you before the pumpkin plan, you're fighting to make collections, you're spending three to four days doing ar. Dozens of clients are not paying you, avoiding you. Where do you stand today in your business?

Today we've had 13 profitable months.

Nice.

Yeah. No, it's. It's just insane. We have a smaller team working in the company, but we're reducing all kinds of debt. Credit cards, loans, leases. We're just paying them off like crazy. And, you know, it's. It's a pleasure to come to work again. It was. It was rough this time last summer.

I love hearing that. And how many days are you spending on ar? Is it still three to four days?

I think fractional. I mean, fractional. Maybe one day a month.

Nice.

Yeah.

Okay, so what you just spelled out, I think for our listeners, is the dream business. You love coming to work. You have an efficient team, a smaller team, but an efficient team. You're not spending time doing the most confrontational part of business.

All the mundane stuff is just gone.

Yeah. Okay, so walk me step by step through how did you do this? Because everyone listening wants to do the same thing.

The most important thing for me personally was an adjustment in my own mindset. As you already announced. You know, my background is hospitality, and the customer is king. Customer is king. Customer is king. So once you convinced me in my own mind to change that and to want to feed my family, and sometimes the customer's wrong, that was really the. The key for me was really in my mind more than any other one thing that we did.

Interesting.

So that was. That was absolutely number one. Number two was we just.

Let me ask you about the mindset set shift real quick. Was there. Was there a moment that triggered that? I know you read it in the pumpkin plan, but was there a point of frustration where you just won't take it anymore? What got you over that hump to thinking a new way?

I took. I took a couple of weeks off in the summer last year, and I came back to what I'd call a perfect storm. My salesman was on vacation. He didn't sell anything before he went away. He didn't sell anything while he was away. He didn't sell anything immediately. When he came back, nobody paid me because I wasn't bugging them because I was on vacation for two weeks and the expenses kept coming. So I came back from vacation having read the pumpkin plan, and, you know, I was like, okay, here we go again. Now I've got a call. Basically, these, these, you know, I want to split a swear customers and begged them for money again. So what I did instead was I Started small claims procedures online to a whole bunch of people. And guess what? Miracle of miracles, a whole bunch of people started paying me. And I'm a pretty fair guy. I said to the guys before I went away, let's set up a payment plan. You know, for example, owe me a thousand dollars, give me $100 a week till it's paid.

Right.

My mind, that's pretty fair. These guys were so defensive, they couldn't even get their head around that idea.

Unbelievable.

That's awful.

So guess what?

They don't want to pay you for it.

I don't want to do business with restaurants now.

Yeah.

So they get this letter from the small claims court saying they got to appear in front of a judge. They called me, how can we settle this debt? How can we make a deal?

Interesting.

Yeah.

So that has to come to me.

So in the first few days of getting back from vacation, I've got this, like, hallelujah moment. Mike has saved me. We're gonna keep reading the pumpkin plan every day if we have to, to fine tune this to our business. And that's essentially what we did, by the way.

Just let it be noted a disclaimer. I don't put sue your customers in the book, but I mean, that is a necessary approach in certain circumstances. So you made this mindset shift the customer. You're not going to keep on kowtowing to your customers the right word.

Kowtow.

Okay. You're my language checker. And so that was the first step. What did you do next, James?

We took the spreadsheet from your book and we modified it slightly, but we basically graded all of our customers A, B, C, D, and D, for that matter, all of the E's we immediately dropped. We removed any remote control software we had. We removed any services that were costing us money monthly that they weren't paying for. And so all of the E's went within the first week. We started working on the Ds, trying to regrade them, trying to sell them something, trying to get a feeling of where they were as a business. And we put up on our wall. I'm actually looking at it now, on our whiteboard, we put up a list of the top five clients, and we literally started hanging up on people if they were not in that list.

Mm.

I gotta call you back. Sorry, dude, I gotta call you back. I gotta take this call. And.

Okay.

It just made us feel so powerful. It made us feel so good to do that.

Yeah.

So. So just a couple points of clarification that that top Five list was your best client.

Yes.

And when you're on a phone call with another client, you wouldn't like, hang up on them, per se. You would just say, I gotta cater to something more important effectively. Go to your top five client and. And then get back to the other clients later.

Is that exactly what we did? Exactly. And it felt so good, let me tell you. So good.

Why does that feel so good?

I think it's empowering. I think there's a. There's a focus point that you got to take care of. These top five guys, we actually have seven, but, you know, the principle is the same and it just works. And people come in the office and say, why are these names on the board? And we say, that's our top people. If they call, we bow down, we take care of it. Whatever we have to do, Run, jump, skip. That's what we do.

And so for those top seven, do you tell them, hey, congratulations, you're in our top seven. Do they know?

On occasion, I've told them. On occasion, I've told them, maybe not, you know, our top seven. I've said, look, you're our number one. We want to invest time in. In getting things right for you, getting things better for you. You know, we want to go to that desert island with you. And. And he liked it.

Preference. Yeah. I don't know if you two have read the Pumpkin Plant. Have you guys read the Pumpkin?

I didn't read it.

I said I'm halfway through.

Oh, you got to read it. You'll like it. I think you'll get a kick out of it. You're halfway through it.

Yeah.

Yeah. So a lot of the stuff James referencing is in the pumpkin plan. So I talk about going on an island. If you had to go on an island, deserted island, who would you go with? If you had to pick one client, and that's the client you want to clone did with those. Those E list clients you had, James, did you. You said you dropped them, but how do you drop a client? How did you do it?

We. We re engineered service contracts, and we came up with tin. Bronze, gold, silver, platinum. And basically what we said was January 1st, if you don't pay the tin connection fee, which was $100 a year, not a big deal, then basically we would remove all remote control software. You would have to pay in advance for services. You'd have no credit line. And. And what was surprising to me was when we sent these bills out January 1st. Excuse me, all these checks started rolling in, and it was $100. But it just indicated to us, the guys that were reading the emails and listening and sort of understanding what the bill was. And that was huge.

Interesting. And I guess $100 is nominal, but it gets skin in the game. Like, they have to proactively invest in your services.

You know, I figured $100 covers all of my cost for connection fees times two.

And.

If, you know, if 100 people paid, that's my bottom line, you know, so that's. That's what happened. And it's great.

Interesting. And then I assume some people didn't pay. And then January 2nd, do you shut off the line? Say, you know, by your inaction, we see that you've made a decision not to continue services with us.

We gave them more than one day to pay, but essentially, yes, we just emailed them. You know, we haven't received your payment. We're removing all connections, antivirus monitoring going forward. And we didn't hear from them again in most cases.

Now. I read a study once, James. It was about the Pareto principle, the 8020 rule that the top 20% of your clients yield 8% revenue. It was conducted by a company called Strategex. They're out in Chicago. And what they did was they took for, I think the sampling was a thousand companies or maybe 10,000 companies. They looked at their client list and they put them into different quartiles. The top 25% of clients, the best clients, the most revenue, down to the lowest quartile, the ones with the least revenue. And in their research, they found that the top 25% of clients actually yield about 150% profit for the business, which makes no sense because you only have 100% profit. The two middle quartiles are negligible in profit. The bottom quartile of clients that generate the least revenue were actually resulting in a loss of 50% of profit. So top clients were carrying the bottom clients. Did you experience something like that where your E lister clients actually costing you money to keep serving them?

I think I have to come back to the mindset shift for me. These E list clients would call and say, hey, my print is broken. And we would literally drop everything, no matter what, grab a printer and hightail it on the subway around New York to plug in a new printer. And then, of course, we would build the client and we'd then be fighting for that $200 call out.

And.

My mind shift was this. Instead of dropping everything and hightailing, I would give them the option for a new part. And I just Said, look, not worth replacing. We'll ship you tomorrow a new printer. It's $250 for the version A, $300 for version B, or 450 for the rolls Royce.

And they got paid in advance now too, right?

Correct. Correct. So now I'm getting paid in advance, I'm shipping them a product instead of wasting two, three, four hours of labor getting out to somebody and back. And some people would say, oh, I'll call you back.

Right. Which they would never call you back.

Which they would never do. So either they figured it out or they bought one online and didn't bother me. But either way, I'd saved two, three, four hours of labor and I hadn't had to fight and argue with the guy over the $200 bill again, you know, so it was, it was, it was a quadruple win in my book.

What's the revenue per client dispersion between your best clients, that top seven, are they generating, I don't know, $1,000 a month where the E listers are generating $10 a month? I'm trying to get a sense of what the dispersion is between those clients in revenue.

I don't have the answer to that and I should. The figures for me are definitely much less in the monthly sense.

I see.

I would say $200 a month is probably my average monthly recurring just for telephone support. I have a 55% profit margin on that service because I farm it out to a third party.

Gotcha.

And I'm not involved in the call, so the calls are just redirected.

Oh, that's great. Do you sell one? Standard point of sale system. And this is the company that supports that point of sale system.

I actually sell three point of sale systems, but all of them have a third party solution for phone support for first year. I don't want to be up at 1, 2, 3, 4 in the morning.

Yeah, exactly.

No, no. But we did learn magnesium will help with that.

Unless I'm drinking or dancing on a table, that's a different story.

I think that's a good idea. So. Okay, but. So there is a. I assume your top clients generate more revenue. I assume you make a lot of money then on the initial install. There's a lot of equipment for a point of sale system. Is that true?

Absolutely true. So 100%. The initial sale is the big number for us.

Okay.

And you know, there's other things that we sell which we've developed over probably a five year period. All kinds of gadgets that connect onto the point of sale into the infrastructure of the IT network and all kinds of different monthly recurring models that we have that are coming in on top of that.

Gotcha. I'm wondering with this approach to your E listers and perhaps all your clients are doing this now when they need that printer replaced and you say, well, it's going to be, you know, 250, 300 or 500, which one do you want? And pay me now, this wasn't what they were used to. Now you're like all of a sudden become this tough guy. Before, you were all about, whatever you need will care for you, sir, and may I, you know, may I clean your shoes while I'm at it? And now you're like, you're really becoming firm. Doesn't the word get out? And they say, you know, this guy James, he's a real pain in the ass. And don't they tell other restaurants? Doesn't this compromise your, your prospective clients?

I don't know the answer to that, but I think that there's so many restaurants and so many clients potentially and existing out there, it's unusual that they would even know or meet each other. I'm okay with that. I mean, if that's the reputation that we're getting, I'd like to say it was firm but fair. I mean, if somebody asks me, hey, Johnny said you're a real pain in the ass to work with, the answer is pretty simple. Well, you know, hey, Johnny never wanted to pay me, so would you work for free?

Right.

What does your number one customer say about you?

Oh, that's a good question.

Oh, that's an awesome question. That's an awesome question. I've never asked them, believe it or not. So that's, that's probably mistake number one. Mistake number two is I try to hound them, actually, a lot. I try to give them a lot of information through email, voice, text. And it's a suggestion that was told to me by a, a friend, is to kill them with kindness so when something goes wrong, they can't be quite such an asshole back to you. And so on Friday afternoons after 12, what I tried to do is I put calls into random clients and I put a call in, hey, it's James. Just want to touch base. I haven't heard from you in a while. Hope all is well. Give me a call if I can do anything.

Yeah, perfect.

It always goes to voicemail. It's like a miracle. Friday at 12 will always go to voicemail. You never have to talk to the person, but You've put the call in and made the effort when nothing was wrong. They don't owe you any money. You don't have anything to do for them. You don't have anything to sell them particularly. But they never pick up and you've left them a voicemail or a text. And it's just a good, feel good factor for each party.

Yeah. It changes the association that they have with you.

Exactly. If something happens to go wrong a week later, they'll say, hey, I'm sorry I didn't call you back.

Oh, that's interesting.

Isn't that nice? Hey, sorry I didn't call you back. Are you kidding me? I love that.

I didn't want to talk to you anyway.

It was Friday. It's a ploy.

So, you know, it's one of those double negative feel good things that just is a great tip. And it works.

I think it's genius because.

Yeah, I agree.

I think whenever we leave a voicemail, you know that person's gonna receive it because very few people are using the phone now. It's all email.

Yeah.

So whenever I get a voicemail, I get one every couple days now. I listen to it.

Yeah.

Doesn't mean I return the call. Just like James was explaining.

Yeah.

So the. What about, you know, one of the parts of the pumpkin plan, which. I don't know if you've employed this part, but it's, it's, it's trying to clone your best customers. Once you've identified, you've identified those top seven, you know, let's try to make it eight, nine, or ten. Have you used any pumpkin plan strategies to kind of clone your best clients to get more of them?

That's a great question. And the answer is yes, but no. I think.

What have you done?

Well, the no part is we're so happy enjoying our free time that we've created.

Interesting that.

We'Re so happy paying off debt and paying down bills and paying on time that we probably haven't spent as much time as we should have done on trying to clone the clients. With that said in my mind, every time I am on a sales call or if I'm meeting somebody in person or even going on a repair call, in my mind, I'm thinking, do I want to go and have a drink with this guy? Do I want to be stuck on a desert island with this person? And it's kind of interesting because the people that I thought before the pumpkin plan, I'd like to have a drink with, I don't have that desire anymore.

Interesting.

So that's sort of come into our, into our factor now when we've graded the customer now is do we want to be stuck on a desert island with this guy? So that's another element we added to our rating system to get to the ABCDE rating. I love it, so I need to do it to try and find a way to clone those guys. Yes. We have a model client that we adore, that we'll do anything for, that pays bills, and that is who we'd like to clone. I haven't exactly figured out how I'm going to do that, but we're having a lot of fun with the good elements of the book and the truths that it told, that it empowered us and it released us to actually go home now at 5:30 and not feel bad.

That's awesome. That's awesome. There is in the book, I do talk about how to clone your best clients. There's three key questions to use, but I'll share that in some future episode. So the interesting thing I'm hearing, James, from you is not only are you financially stronger than ever before, you're eradicating debt, which means once that's gone, it's all profit into your pocket. But you're also having this freedom of time. I heard someone, and I can't remember who said it, but there's this feeling that for many business owners that we need to be bigger. You got to keep growing. And this other person said to me, no, you can let the right size found you, find you. You don't have to just grow because everyone else says you have to grow.

Right.

Are you feeling that maybe your business is at the size that it just serves you and this is the right size and this is where you should stick it out.

Again? You know, every business is very different. So for us, when we started the business, the target was very simple. Just go out the door and get a client no matter what it costs you. So we would literally give away some of these deals with. With the hope that we would get some kind of residual maintenance or merchant services or sell them another product like a camera system or wi fi or something else. So what happened last year was we met a what some people would call a great lead source. This lead source was giving us 20 to 30 new leads every week.

Wow.

Amazing, right? Amazing. You would think these leads were absolutely the bottom dregs of society. So we were wasting time calling physically, cold calling physically, doing demos to the lowest end of the market. And we realistically had almost no chance of closing a deal with these guys. And that was part of what I would call the perfect storm that happened after my or during my summer vacation was we were chasing these really cheap deals and burning our time talking to them, explaining things to them, making new quotes for them, cutting out a little widget for them. And it was just so fruitless in the end. And that was part of what I call the perfect storm. But the perfect storm was also a part of, was reading the pumpkin plant.

I love hearing that.

So these leads, sometimes leads are not good.

Yeah. Oh, I hear you.

Going back to your original question is we actually had to let go of some people to refocus what we were doing. The salesman, the accountant, one of the technicians. But that all those things helped free up more of my time. Suddenly I'm not babysitting my salesman. I'm not strategizing with my salesman on how to close these ridiculously cheap deals.

Right, right.

I'm not re quoting microcosms of buttons and widgets for these clients that are not, not good for us. So fast forward, we have 300 what I would call awesome clients. They're all graded ABCDE. We're actually going back to these AB clients and actually physically having a meeting with them.

Smart.

How can we serve you better? We want to take care of you. What can we do to work together in a better, smarter, fun way to get things done?

How do they respond to that?

Every single one of them has given us small to major amounts of business. Every single one.

Before we gotta get going. I'm looking at the clock here. James, one more question for you. Is someone listening to shows inspired by your story? I mean, you totally turned around your business. What would you suggest for them? What's the first action they can take to start copying or emulating what you've done?

I think it's the mindset, 100%. You have to change your mindset to not be afraid to lose clients and not be afraid to get rid of the, you know, the bottom of the barrel. They, they are draining you. They're killing you, whether you want to admit it or not. But that's the main thing is you got to adjust your own mindset as the business owner because you're the guy driving the ship. If you, if you can't change course, you know you're going to crash.

Yeah, yeah. James, this is awesome. You know, I got one little last surprise for you. We, we called one of your E listers that you told the printer. Yeah, I know. Now you're a little bit Scared of the phone call? Yeah, I have a recording of the phone call. I called him, I said, hey, James, you know, used to order printer, and James would ship it to you. He'd race it down on a subway and give it to you. I said, does he still give you free printers? And here was the response, oh, hell no. Yeah, so just find that you hear that? Where can our listeners learn more about you, James, and your firm?

I'm on LinkedIn. I'm on, you know, all the usual. Twitter, Google, obviously. My website is Manhattan pos dot com. We're going to rename the company because we want to follow the company and plan to the nth degree and make it a little more poignant as to what we do and our mission. But for now, that's where you can find me.

All right, so if you own a restaurant anywhere in the New York City area, 100 mile radius, which basically is the whole U.S. the U.S. ends in New Jersey. So go to Manhattanpos.com, get your point of sale system from James, and for God's sake, pay him on time and pay him well, and he will take extraordinary care of you. James, thanks for being on our show today.

Thank you so much.

And congratulations.

We'll see you later.

Thank you.

Appreciate you, brother. All right, Christina. Oh, I didn't even say punch me.

You punched me.

Bazinga. So here's what we're gonna do. We're gonna talk about what we learned from James. I thought it was a fascinating insight. But first, I want to thank our corporate partners. So a big thanks to Fundbox. Oh, I said it right this time.

Yes, you did.

That's right. Did I say it right? Yeah, Betty Fat Beck. That's right. That's right. Fat dang. Fat Beck said it right. Oh, and by the way, have you been to the Fat Daddy Fat Back website?

Yes, of course.

I had someone come up to me and just say, hey, Fat Daddy. I was like, that's right, brother. I felt so connected. Yeah, I love that people are calling off Fat Daddy Fat Back. So Fundbox is a cash flow accelerator. What happens is. And James could have used them, but he did the right thing. You got rid of those negative clients. But what you do is if you have a client is not paying you in time and you need that money, Fundbox releases the fund to funds to you, and then you need to still collect it from the client. So if you have a bad client, this is not the fix because those clients wouldn't pay you. Now you're. Now you owe fundbox yeah. So Fundbox is a cash flow accelerator for those short term money needs where you have invoices not being paid on time. Nextiva VoiceOver IP phone system used by the one and only. Yep, yep, I use it. I use it. And you have it at your house, right?

Yeah.

You have one at your house. How do you like it? Because it's a simo ring. So when someone calls you here at the office, you get at your house, right?

Yeah, it's in my basement, so.

Okay, so you're not working low. Yeah.

You can turn it so it doesn't frustrate you, but it's kind of cool because you can sync up with the office.

Super cool.

Yeah. But on extension and all these different functions. It's a high end corporate phone system at the price of just as low end, inexpensive, affordable thing. It's not cheap, but it's reasonable.

And they're awesome. They're great.

Yeah. And they at the profit con this past year.

Yeah.

Just Max. Max got married on Saturday, you know.

He was there on Friday.

Dude, what are you doing? Like, are you sticking around to Saturday? No, I don't think I can be here for the picnic. I'm like, no, dude, you have to come. He's like this thing going on. I go, name one good reason why you can't come to the picnic. He's like, I'm getting married tomorrow. Oh, what the hell are you doing here? You're getting married, man. Leave, bro, leave. Fat daddy fat back. Yes. I have one more thing for you. Ruth. Ruth, Ruth. Ruby Tan.

Alter ego.

Yeah, Ruth 10. So one more thing for you there, Ruby Tan. Yes. Receipt back. It's a receipt scanner.

Yeah.

And what it does is all those receipts that you have to keep for legal purposes is scans it in ties with your accounting system. And when the IRS comes a knocking, you can just pull out your receipt bank and say, check it out, it's legal, it's legit, and all your stuff is on there. So pretty. Pretty powerful stuff, right, Ruby?

Fat Daddy Fatback.

That's the only thing she says. That's the only thing she says. All right, what'd you guys learn? Oh, where's the what you learn button? Here it is.

I love your red dishes.

Oh, were you gonna sing it? Yeah, he wants you singing.

No, it wasn't good.

Let me see your version. Yours was constipated. What did you learn today? Did you learn anything today? Look at me now we're making fun of Christina. Why did you learn?

I hate you guys so much.

I Mean, so what'd you learn?

He made me sit here, record that for, like 10 minutes.

Just over and over and over. And I'm like, no one's sings it. People just say, what you learn today. But you had to sing it. Totally was busting her, Chuck. Okay, what did you learn today?

Well, I mean.

So mean.

Okay, well, see, now you freaking made me lose my.

I'll go first. Yeah, please, I'll go first. So just the fact that he was happy after doing this, like, you never hear anyone say, oh, the clients, I'm happy. But James is like, no, no. You fire the bad clients and you are happy. The fact he values his time is a big deal. I think a lot of people just work ridiculous hours. I think it's actually a real problem in our country.

I concur.

Yeah. It's really frustrating me.

And we've set a precedent that it's normal. And that bothers me.

It really bothers me. People sacrifice, vacation, everything. Listen, you haven't been. And I'm not blaming us. You haven't been on vacation in three, four years, I think. Right. And you're going to Australia now.

It's not officially booked yet, but I emailed her yesterday.

Yeah, you're going like. Like you need that. We need to recharge our batteries.

Yeah.

And life is not about work.

Exactly. Quality of life, big picture.

But when you do work, you might as well find like this. So the work that you do should.

Be intentional and meaningful.

Yeah. Impactful, intentional, meaningful. Have fun doing it. And then I love the simple question, do I want to have a drink with this guy? Like. Like that was his measuring. He's like, if I don't want to have a drink, this guy, I don't want him as a client.

Yeah.

Loved it.

And the fact that that changed after he started implementing the pumpkin plan.

Yeah.

People he thought that he would want to have drinks with, he's like, yeah, I don't really want to have a drink with you anymore.

Yeah, no, I love it. I love it. What'd you learn, Kels?

It was pretty much the same thing. And I don't want to be redundant, but I think it's huge. I think that the fact that he enjoys going to work every day and has now found a quality of life where he can enjoy his free time as well. That's what it's all about.

Bazinga. Yeah, I'm with you. I am totally with you.

Manifest. I mean, I'm a big believer in that you manifest the events of your life. So that simple switch in your brain. And it's the same thing. Like he said, you know, a client will call and he would rush down and he's wasting all these labor hours. And instead he was like, no, you know what? Pay me first and we'll take care of you. That simple, like rotation can change your life. And I feel like so many business owners are such good people that they want to bend over backwards for their clients, but that's how you get hurt. Like, you have to protect yourself.

Yeah, yeah.

And it's same thing. It's like he wants to feed his family. It's not even. It's has nothing to do with his customers, but it's just maintaining, sustaining.

Right?

But I also heard, you know, he's firm, but he's professional. He's. This guy has a good heart. That's what I heard throughout. Like, he really cares about his customers, but he's not going to be pushed around.

Right.

You know, and he's found that delicate balance and, well, I'm proud of him. Very proud of him. Okay, that was what you learned today. Now we got to get out of here, Christina.

Yes, we do.

Okay, I got to hit the outro music. There it is.

So Visit us@profitst podcast.com. leave us your comments.

Wait, wait. We've got to do the listener mail.

Oh, gosh.

Hold on one second. You've got mail pattern baldness. What was the.

This is from Tatiana. From Germany. She said you wrote in the book Profit first that a Dala's piggy bank made you change your attitude towards money and invent Profit First. Did you actually take her money and pay it back to her, or was that just a symbol?

I love the Germans. Like, they just get to the question.

Yeah, I bet you you steal your daughter's money.

I know. What did you do with the money?

What is wrong with you?

Where did they go? Tatiana? Did I take the money? 9 I did not. That's German for now. That's German for now. No, I did not take the money. So my daughter, she has a piggy bank, and it's pristine, condition protected, cared for it. Except the stopper has all this duct tape. Not because the stopper would fall out, because she didn't ever want to take her money out of it. She saved, save, save. When she put that money in front of me, honestly, I was so blown away by what her she was doing. That was the biggest, richest impact. Now, of course, I didn't touch the money, right? But it really shifted my understanding of how to protect Money and the importance of money. And so that's what it did for me. So Tatiana. Nope, did not touch the money. I know she went on Hawaii. She went to Hawaii, Paid for her own trip to. Why she's gone to Spain. Paid for her own trip. She's just. This is who she is. She saves money. With intent. Except for today. I gotta, you know. Hey, dad, can I borrow 50 bucks? Oh, really? I swear to God. Okay, okay.

College kids.

Yeah, college kids. All right, now we can get out of here.

On that note, now you can go to profitfirstpodcast.com and of course, itunes, Stitcher, Google Play, Google and what else? Oh, Profit first professionals dot com.

That's right. Hey, we like to have a lot of fun around here, but we'd like to have a big impact. Sounds very similar to James Company, right?

Yeah.

He wants to have fun. He wants to have balance in his life, and he wants to care for his customers. But we want to care for you. If you want to improve the profitability in your company. You heard some of the tips from James. I hope you're applying this, employing this. But I hope also that you realize that moving your business forward sometimes needs an outside coach. Someone like, if you want to join the gym, you can work out on your own. You should. But sometimes it's better to have someone that knows the exercises that won't hurt you, to motivate you and guide you to go where you want to go that actually pushes you to the next level. That's what Profit First Professionals are. Profit first professionals is a membership organization. We have 190 account accountants, bookkeepers, and coaches. We call them the ABCs who specialize in profit first. They will bring profit first into your business, and they will drive the profitability in your business using the Profit first methodology and some of the insights that James shared today from the pumpkin plan and other stuff I've done. So are you ready to be profitable? If the answer is yes, go to profitfirstprofessionals.com right now. Click on the find button, fill out the form there. We will hook you up with a free independent company. These are all independent businesses who are Profit first professionals. You see if they're a good match for you, and if you think there's a fit, well, then you guys are off to races, and profitability is flowing into your business. It's that simple. One more time, go to profit first professionals.com right now. Click on find. And we're off to the races. Nice keyboard you're playing over there, Christine. Is like. It's like this marching with her hands.

Drums.

Or it's a xylophone. Okay.

Saxophone. Just playing.

God, you don't. Once you. You're like a pitbull. Once you. Once you clamp down on my throat with your. Your fangs, Kelsey, you just bite harder. I'm the worst. And I like it, actually. All right, I love you too. You are awesome. All right, let's get out of here, guys.

Bye, guys.

Bazinga. Going through the one. I love this. I don't like this. This down part, but when it goes up, I get really fired up. Here it goes. Here comes. Yeah. Huh? Oh, damn. All the way to the end. It.

Oh, I love this part.

It, like, resonates with your body at the end.