Episode 210: Building a Profit First Business with Mick Hawes

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It was great.

You came up on United?

Yeah, I don't really love flying United these days, but it was like the only nice time option.

I hear the most negativity about United.

Well, if you don't fly like economy plus or business class, there's really tight seats.

I don't have a problem with the seats because I'm relatively, you know, normal sized, but I'm short. But when they, when they killed the dog in the overhead compartment, I was, I was pretty mad about that.

I heard about this.

Some flight attendant told them to, told a passenger to put their dog, who's like a little dog in a carrier in the overhead compartment. They said that they wouldn't be able to take off until they put the dog in the overhead compartment. And there's no oxygen up there. And so during the flight, I don't know why this person did it, but obviously they were just trying to comply. They, the dog suffocated up there and they took it out after the end of the flight and it had died. Oh my God. And so now I have a, I try not to fly United just because I'm a big dog person. I'm like, why?

I don't really understand why she asked them to do it though. Like, wouldn't make any dogs that have gone in the main cabin area. Like, I don't understand why.

So what I don't like is so many people bring service dogs, I'm air quoting service dogs because they ain't service dogs. Someone brought a Saint Bernard.

I was going to say, you know my Bernie's mountain dog, he is like a service and therapy dog. But I would never bring him on a plane so big.

Massive.

So he was, where did he sit? In the aisle?

Yes, there's a fire hatchet. It's bigger than half the people on the plane.

Yeah, my dog's bigger than me. It's, like, not realistic.

And then he jumped up on one of the chairs coming out. I'm like, what the hell is going on?

So cute.

I know.

I love that imagery.

I don't know.

I don't know either. Welcome, everybody, to the Profit first podcast.

Yes. Here we go. Yes, go. There you go.

Good job.

Just waiting for you, Kelsey.

Okay, well, everyone, welcome. That was Kelsey, your co host. I am Mike Takalowitz, the host, and we also have a guest host. Can you have three hosts? Yes, and our guest host is Adrian Dorrison in the studio. You're a little more jacked up for this one.

I'm ready to grunt. I didn't know that it was an expectation on the last one.

Yeah, it's an expectation. And you, my friends, you are listening to the Profit first podcast. This is a show where we explore all elements of profitability and why. Well, I wrote a book called Profit First. I'm writing another book is coming out right about now called Clockwork and then Britain. Some others too. And on the show, we explore every element of profitability. How do you drive it forward in your business? Last week we talked about or two weeks ago. It depends on if we do a best of. We did the 12 P's to profitability, and today, well, we're gonna talk about how Profit first is rolling out in our sister country, Australia.

Yeah. And you can find us on itunes, stitcher, TuneIn radio, profitfirstpodcast.com or any podcaster everywhere. And please subscribe. So you get us every single week?

Yeah, yeah. And rate us and review us and all stuff. Okay, so we got a little game that we're gonna play. Let me turn off this music. Okay. There we go. All right. Mick, are you there with us? Even though we haven't introduced you yet, are you there?

I am.

Okay, so, Mick, what we're gonna do is a little game here. We have Adrian and Kelsey, who are gonna guess different Aussie words.

Really scared.

They have to guess what these words mean, and then you tell them what it really means. Is that cool?

Absolutely. I'll make something up.

Okay, now. Now, the one thing is I. I may mispronounce. Mispronounce.

I know what you're trying to say.

Okay. So you just try. Okay, good. All right, first one. The word is, what's a mosi? Or I guess you pronounce it mosey. It's for Adrian.

Or Like a walk.

A walk. Or an escalator. What's a mosey, Mick?

It would be a walk, but just a very casual walk. You know, a soft whistle. Hands in the pockets. Just relax.

So I mispronounced it. What's it? I guess it's a mozzie, then. No, no, no.

Oh, well, Mosey like you mosey on down the road.

Mosquito.

That's a mozzie.

A mozzie, not a mosey. Oh, okay. This is not gonna work out. Well.

No, I was gonna say I didn't realize.

Try something else.

Generally, the host should know what they're talking about.

What's a sicky? You guys.

Somebody is sick.

What's your guess, Agent? That's horrible.

Someone who's really cool.

What is it, Nick?

It's taking a day off work when you're not really sick.

Yeah. So you're. Isn't that wild?

Yeah.

It's a fake one.

Yeah.

What's a slab? I probably pronounced it incorrectly. It's S L, A B.

Now, that's correct.

Mickey.

Correct.

Okay, slab. What's a slab?

Like a high five.

That's horrible.

Like a piece of meat.

That's pretty good.

A piece of meat. What is it really, Mick?

Well, I'll give some points for the piece of meat. That could work. But really, it's a case of beer. A box of beer?

Yes. A24.5.

You guys have way cooler words than us.

We'll do two more. What's a. A ute. That's a ute. Does that pronounce it correctly, Mick?

Correct.

Yeah. A ute. Hey, two ute's. Come over here.

Like teenagers. Like.

Like a youth.

That's so new. Jerk. In New Jersey. You're right. What do you think a ute is? A boat. What is it really, Mick?

Well, it's a utility vehicle. It's a car with the open back. So you can throw stuff in the back.

Mike, you threw me off by saying, like, you two youths, come over.

All right, well. Cause it's the New Jersey version. This is fun now. All right, last one. Last one. What's a bottle O? A bottle O. That's the word. Bottle dash O. A bottle O. Coke. Bottle O. Coke. Okay.

Beer.

Who are these people? What does it really mean?

What would you have guessed if you didn't know?

You need to come down here so I can educate you. It's a bottle shop where alcohol.

Bottle O.

One more.

It seems so obvious once you say that.

I know.

Well, of course. All right, one more. This is even on the list. I know. I know what it is. Slab.

Doesn't sound obvious.

What's a. What's a Sparky?

A dog.

Close. Not even close.

Lightning.

You're better at this.

All right, last one. What's a Sparky?

An electrician. I And I used to be one in a past life.

I didn't know that.

Well, now you know.

Contractors.

Yeah. Look at. Yeah.

Okay, Mick, go. Go back on hold this. Which means don't do anything. Just stay there. So that was our little icebreaker. Was that fun? Did you have to have fun?

Yeah, it was very nerve wracking. I don't like to be wrong. So this was really challenging for me. Not being good at something is hard.

Really? You're that competitive?

Yes.

Okay.

Sometimes I won't even do things because for fear that I won't win.

You're that competitive?

Yeah.

Very alpha. Wow.

I know. It's a problem.

You should go toe to toe with Ron. He hates losing too.

Oh, that would be real great.

Me too. You'd be funny.

No.

So guess what? Today we're talking with my good friend Mick Hawes from Tasmania, Australia. And, well, we'll give you more details, but he's going to be talking about the rollout of Profit first in Australia. And some special stuff you should know, regardless of what country you're in, of how to personalize Profit first. For your specific requirements, I do want to thank our corporate partners. Make the show a reality First. Right Networks. I didn't do the read in, Kels.

It's okay, we can add it afterwards.

Oh yeah, let's do it afterwards. So I want to thank Right Networks, nextiva and Receipt bank. And we'll tell you more about those folks in just a little bit. Also, at the end of the show, we share our insights. So you two start taking some serious notes here on what Mick's about to share with us. But before we go to Mick, we do have a member shout out.

Yeah, we do.

What we got.

This one comes from DS Monday. Within a few months of implementing Profit First, I saw a dramatic and distinct positive effect on both our revenue and our reduction of operating expenses. I've been running my company for eight years and have 25 employees and do about $5 million a year. So I'm not exactly a rookie at this. Still, this book made me feel like I have a long way to go. In a good way, ds. That's awesome.

Good for you. Congratulations. I got that last name Monday.

Yeah, right.

Sounds like a investigator or something. We better get Monday on the case. You know what I'm saying?

It's more like a first name of a Kardashian child.

Oh yeah, totally, totally.

Monday.

You just gave them the idea.

Yeah.

His name is Mick Hawes. He's been in and around the building and trades industries his entire life. He was a sparky. His father was a commercial builder and Mickey became an electrician straight after leaving school. Due to his life experience, Mick truly understands the trials and tribulations of running and building a business and is passionate about supporting and coaching real men and women on their journey to generate more income, less stress and have more time for family and life itself. A couple things you may not know about Mick. He's turned a bunch of builders into a family that have each other's back. He's created an organization. He's very proud and this honest knows here that he met me down in, in Aussie land and he has a band called the Chuck Norris Orchestra. They predominantly play acdc, I think. And we started revelling in different ACDC songs. I still think the song touched. Reveling. Revelling. Reveling. Revelling.

You're gonna need to look up the pronoun. Reveling.

Reveling.

Yeah, revel.

Reveling. Oh, we're reveling.

Revel in like. We revel in it.

Yeah, we revel in it. Yeah, whatever.

The word is like rappelling down a mountain.

I think that the best song is touched too much by acdc. He thinks it's a different song. So, Mick, welcome to the show.

Thank you very much for having me. Exciting stuff.

What do you think is the best ACDC song?

I. You've got to go. Highway to hell.

Highway to Hell. Yeah. Classic. Classic.

Yeah.

So what's the rollout of profit first been like in Australia?

Well, for me it's. It's been absolutely exciting. Our, our coaching program, as you've mentioned, specializes or has niched into builders. Husband and wife run custom home builders. It is so important to us that it is a non negotiable process that you must adhere to if you want to stay a member of our coaching program. That's how much we believe in it.

So, okay, so what is the importance of doing profit first or any system? What's the importance of knowing the finances for these types of businesses?

Oh, it's absolutely essential to me. It's. It's like driving a car around a racetrack with a blindfold on. If you, if you're not, if you're not. If you don't know what speed you're going you know, even driving around the streets and your dials are blacked out, you don't know what, how much fuel you got, whether your car's overheating, what speed you're doing. You know, it's just a recipe for disaster.

That's a great analogy.

Yeah. But do you feel like most businesses are blindfolded right now, rolling around the track?

Yes, absolutely.

Why is that? Is that intentional? They, they just don't care or they don't have the time. Why are they blindfolded?

I think the, the majority of the issue comes back to what, what, what is talked about in the E myth. You know, it's, it's technicians that run small businesses and they get confused between the, the work. They're, they're a great motor mechanic, they're a great builder, and they assume because they're great at that technical work, they're going to be great at running a business that does that technical work and not realizing it's two completely different skill sets, mindsets, it's two separate worlds, doing the work and running the business.

So, okay, you help these businesses get profit first going. How do you get started? How do you get a business that's blindfolded to its finances actually get started in becoming profitable?

Well, the first thing that we do is send them across to a profit first professional. So when we were together in Melbourne, however long ago it was, I asked you, who do you recommend? You recommended a profit first professional in Victoria. And so what we do now is I've worked with Angus, it's his name, and he put together a fantastic questionnaire that gathers all of their business information, all of their personal information. He analyzes it, puts it through the profit first process, if you like, and then has a number of meetings with them and gives them a financial health check, delivers me a financial health report for them so we can then look at what we need to do for them and focus on the issues that they have financially. And one of the big reasons for that is my belief is when you have financial pain, it amplifies the intensity of every other problem you've got in the business. So if you've got team issues, if you've got, you know, customer issues, not enough business, too much business, whatever the other problems are, the intensity of those problems just go through the roof when they're built on a foundation of financial problems as well. So we have a focus on getting those things out of the way as soon as humanly possible and then we can get on with building the business.

So it makes sense to me. But why is it. What's the logic behind financial pain amplifying everything else, all the other problems?

Well, I think that if, if you've got, if, if you've got significant or enough acorns in the tin, you can buy solutions to a lot of the problems. You just. It keeps you awake at night, it seems, the, the financial issues. So it just puts another layer of pressure on you. If you look at statistics as to why people get divorced and things like that, a lot of the time the fundamental problems were financial. It's just massive.

Yeah.

And I think it also speeds up the timeline in which you have to solve those problems. Right. Would you say that that's also true in terms of amplification of the problems is because people feel like, oh, I need to solve this problem now because they don't have the Runway. Yeah, the Runway to do it.

Absolutely. And it's an ego thing too, I expect. You know, you look at people when they first start up a business, they look at other successful businesses and they put themselves in debt so they can look like a successful business. But the, you know, a lot of the businesses around you just start to scratch the surface. And they may look successful on the facade on the outside, but, you know, underneath, behind the scenes, they're really suffering. And one of the most important things about doing this profit first financial health check is we've lost members over time because of financial issues. Had we known about it at the very start, that would have been fixed and we would have been able to help them to build a really successful business, giving them time freedom, giving them financial freedom. And sometimes they didn't tell us, which I think is another ego thing. And sometimes they didn't even know. So doing this financial health check is. It's been an absolute godsend for us because there's been examples of people who, when we've really delved into it. Cause I couldn't figure out why they were still stressed. We've done a lot of things to improve their business and they're still really stressed. And so we then got dug down into the financial situation. And, you know, one of the partners, for instance, didn't know that they were $180,000 in debt to the tax department. Didn't know he was an owner.

Oh my gosh.

That's a blow to the ego.

Yeah.

How don't you know?

Well, the other partner was managing the finances. And so the other partner was just doing the work and was sort of in la la land.

It's a nightmare.

I was gonna say, this happens so much. Right. Like, people who either don't know what's going on because they are too scared to take a look, I think, which is a lot of it. Right. Even with people's personal finances. And I'm sure it's the same over in Australia, right? Yeah, it's very much true over here in the United States. Like people don't even wanna look. They're just like praying till the end of the month.

Yes.

If they don't know, then maybe it's. It'll be easier as well as that idea of not wanting to admit it. Right. Like, even if they do know, it's so interesting, you know, when people come to you, Mick, and want to work with you, or they're already working with you that they know there's a problem, but they're not even sharing that because they hope. Like, are they just waiting on hope? Like, what is that about people's ego?

Is that shame? Is that like relationship with money?

People who you would think, intelligent people. And you start to dig into this and how did you miss that? Or why aren't you taking care of that? It really is crazy. Having said that, it's easy to say that now that you've got control, you know, you've got the profit first implemented and so forth. But I think I may have mentioned it to Mike. When I first met Mike, it was, it was on a podcast and I was interviewing Mike about Pumpkin Plan, I think, and. And then the new book Prophet first came out and I thought, oh well, I better read that so I can be all knowledgeable on stuff when, when I speak with him to interview him about that book. And I'm reading the book and I'm. I, I started to feel physically ill and, and I just need to paint the book.

Was that bad or.

Yeah, I used to have nude scenes at the beginning.

It's very graphic, like I'd sacked the ghost rider. That's what I was thinking.

That's funny.

But the. And I'm not exaggerating for effect, I felt physically ill. I did the instant assessment and I'd been in business for over 20 years and I just need to paint the picture because I was in my office and it was set up for like a video podcast for the web. And I had a big background banner, big black background banner, and in probably two foot high letters was the name of the business, which was uncover hidden profits. And I'm reading this book and it hits me that I didn't even know what a prophet was. And I've got a business teaching people how to, you know, build a better business. And this just hit me like a ton of bricks that I was hypnotized by the generally accepted accounting practices that profit was that figure on the profit and loss. And that's what I've been running on for 20 years. And we, you know, and we're not getting ahead. Surprise, surprise.

First of all, it's a bold statement to say that and share that. Secondly, if you're telling your clients we uncover hidden profits, oops, we found a new way to do this or we didn't know how to do it. How did your customers receive this that you had found a new way?

They loved it. Everybody I talk to loves it. I make a point of talking about the profit first program is mandatory in our builders business black belt coaching program and many people. Because what we do is we give people like a 30 day love it or leave it period when we're starting so we can get to know each other to make sure they're implementers. Because to join our posse, you've gotta be an implementer and a contributor. You can't just talk a good game. And also they need to look at us to see whether all of the things that I was talking about, we're delivering. And one of the things that we do is once they are past that test drive, period, we say, we will put you through and we pay for it. We pay for this service for them. We put them through the profit first financial health check. And a lot of the time they just go. We just want to, we want to go through that 30 day test period really fast so we can go do this profit first thing. We need it, we want it. They're really pumped about it. And sometimes you just gotta go, you know, cool your jets. Hang on a minute. We just gotta get to know each other, make sure we're the right fit because you know, we're in, we're in this together for the long haul. But people love is like dating.

Yeah.

Kind of like you.

Hey, when you and I were enjoying that steak dinner together.

Yes, the slab.

Yeah.

Okay.

Reveling in acdc revealing wine. Yeah, Revelling in ACDC and wine. You, you were drinking. You said that, you said that Australian entrepreneurs measure their success by turnover. Revenue is that's their gauge for success. Why is that? That's the exact same thing here in the States. Why are people measuring themselves by the top line?

Well, I suspect that they don't know any better. But the other thing is it's A bigger number, isn't it?

Makes them feel good.

Yeah, it's true. Yeah. Ego size thing.

Yeah. Well, when we started with profit first, one of our businesses was one of the biggest agribusinesses in our state and their turnover was $6 million. And when we learned about profit first, we go, right, we've got to do this. Let's go do the instant assessment. And we did the instant assessment and they really were a $660,000 business. They weren't a six million dollar business.

Oh, wow, what a difference.

Once you take the materials and the subcontractors away, their revenue was 660,000. And the amazing thing was that I'd been coaching them for a year or so to that point. And the business owners walked around like they ran a $6 million business and we need a new truck, let's buy a new truck. We need a new machine or tractor, let's buy it. And when they found out that they weren't a $6 million business, they were a $660,000 business, they. The expenditure just disappeared. Like it just went for a sound effect.

That's a good sound effect.

Yeah, it was a really good sound effect.

Yeah, that was a puckering sound.

Yeah. So the, the. How do you address that ego? How do you convince an entrepreneur that's focused on the top line, the turnover? How do you tell them, no, no, we gotta focus on the profit because it's the smaller numbers. Always going to be the smaller number. It's the more important number, but it's always going to be smaller.

I think that the instant assessment is an absolutely brilliant tool.

Kind of is. It kind of is.

Yeah. Well, but the other thing is that I created a spreadsheet and you didn't have one and I sent it to you. Do you remember that?

Yeah.

All you had was like a sheet of paper and it's like, dude, you know that's analog. Let's go digital. Let's get a spreadsheet happening.

Yeah, you guys are more technically advanced down under.

So make advanced your frame.

He totally did. He sent me back a spreadsheet. Like this is how you do it on a spreadsheet. I'm like, oh, yeah, that's pretty good.

You're like, wow. It self populates these words.

It does.

As the real revenue changes, the percentage targets change. It's, it's just amazing.

All automatic. Look at that.

Yeah. Yeah.

So I don't know what the question was anymore.

I was just about to say, what was the question?

How do you convince them to go by profit and not revenue.

I, I guess the question was, yeah.

The instant assessment, right.

How do you convince people, how do you convince people to stop talking about revenue and start talking about profit?

The first thing is using the instant assessment because when you do that it totally makes sense and, and have them understand that the, the materials and subcontractors money isn't theirs, never was, never will be. The tax money, same deal. And I guess it's really important to paint the picture of the future and for them. And basically I just share my story and saying, look, I thought I was reasonably intelligent. I thought I knew what I was doing and I went 20 years doing what everybody else is doing. And this was the situation. And within three months of implementing the Prophet first, things changed dramatically. If you can understand, you know, we were running the same coaching business for 20 years and you know, the ego had me at one stage. I do you know what a Range Rover is? You'd know the Range Rover. You know, I had one of those for the, for the road and one for the bush. You know, I had two. But everything's on the never never everything is on credit. Office machines on credit and the never never.

I like that.

Yeah, yeah. It just keeps going, never stops. And as soon as I did the Prophet first thing, we just, we just shed everything. And since then, and we've only been into profit first for I guess four years, maybe into our fifth year, but somewhere there. And since then we've massive, we've doubled our personal income. Our profits were such that we're able to buy multiple properties just in, in you know, a few, few short years and, and the financial pressure has just disappeared. It doesn't exist.

So like getting them to start seeing that by looking at the actual profits you're going to actually make more money. You can be making more money.

Exactly. And you know, the cause of the current pain is the current process that you're using to manage and measure your money. And just as an aside, within our group, within the builders business, Black Belt, we have a group within the group which are like our advanced members and we call them the Scale Club. And we've just started measuring, one of the metrics we're using is their profit first percentage of real revenue and the amount of money that they've currently got sitting in their profit account. And that's. It's shared amongst the members. I mean this is how.

That's pretty powerful.

Trusting these guys are. Yeah, but I couldn't, I was sort of blown away by the numbers. The amount of money that was in some of these guys bank accounts for profit. Knowing where they came from, knowing that just a couple of short years ago they were massively in debt and you know, some of them were, were almost ready to walk away from the business and. Wow. And, and now there is no debt and, and they're paying their, their suppliers bills immediately, like no 7 day or 30 day. So they're getting further discounts by paying early. They're paying their team members much more. They, they able to get away from their business and have family holidays. And it's just so, so gratifying that you know you had something to do with that. You know it is. And, and I think people use the term a lot. Life changing. But this is.

That'S fantastic. Do you see any downside? Do people get, you know, maybe flagrantly use their money, they get too overly confident, cocky?

No, no. Yeah, that's pretty good. Not cocky but the, the, one of the issues that we sometimes run up against is when they've come from a place where they didn't have money and then they start to get rid of the debt, the debt's gone and they start to build up the money. They never want to go back to that place again, which is cool.

So then they start spending any money.

Yeah, but you know, I'm not gonna mention any names because they might hear the podcast but one of our members and when they hear the story, they'll know that I'm talking about them. Came from that place where they were really suffering a lot of financial pain, you know, on the verge of walking away from it. And they've done the profit first. They've sold cars that they shouldn't have owned and all of this sort of stuff, caravans. They've just done a great job and now they're in a terrific financial position. But it's still really hard to spend money now where they used to spend money hand over fist. And one time their hot water cylinder blew up and so the husband drove 80 km to the nearest town because they're in a sort of a regional area to buy a hot water cylinder because they didn't have hot water. And he went back home and she said did you get it? And he said no, I couldn't bring myself to spend the money, it's too expensive.

And she was like, no, that's an issue.

Well yeah, but she had to go up the road for a week to shower at friends houses and things.

Yeah. So they're becoming a little bit too frugal maybe because They've like the pendulum has swung the opposite end, which is. I think that's. That makes a lot of sense.

Yeah. But the great thing was that, you know, they, they had a conversation with Angus the prophet First Professional. And you know, all of that uncertainty that was going on psychologically, I guess was. Was taken away with a conversation with the Profit First Professional. And you know, that, that angst doesn't exist so much anymore now. You know, they really have a fantastic life. You know, it really is.

So there is hope in finding that equilibrium. I think that's part of like the beauty of the system. Right. Like you can like, they went back to their Profit First Professional and yeah, they got advice on like, hey, this is a safe range. You don't have to like worry when you're in this range.

I don't know if you've ever been a skid because you're in Florida. But when you're on ice here, what people do is when they start skidding often they go into an overcorrection and actually causes the skid to come worse. I guess it doesn't have to be ice. Could be water too. And the goal is actually when you start skidding is to let go of the steering wheel or at least just make a slight correction, let it get traction again on its own. And it sounds like that's what Mick was experiencing with Profit first. Right, Mick?

I wonder what skid in Australia means. Is there a term for that? Does it mean something else?

I don't know whether I should bring it up on. Is this a family show?

It probably is.

I had a feeling it was not.

A skid's like a house.

No, no, it's the mark left in your underpants.

Skid mark.

That's skid.

Oh, lordy lord.

Sorry to bring down the tone of the program. You brought it up. You started it.

Hey, you know, when we were talking, when we were visiting together, you were talking about implementing profit first in more of a rip off the band aid type approach, as opposed to kind of easing into it, which is actually not what I expected. I thought you'd more step people into it for them to get comfortable. Why do you do that rip off the band aid approach?

Because my experience in helping people with it has shown me that if you ease into. Doesn't work like it doesn't. It doesn't work until and unless you decide to follow the process 100. It needs to be a death before dishonor commitment. You know, it's leaping off the cliff and putting your wings on, on the way down, that's how you need to do it. And if, if you do it slowly or if you modify the system to suit your comfort zone, I don't believe it works. And, you know, I don't want to, you know, teach, tell you how to suck eggs. This is, this is your thing. But I think that it's, it's so important to look at this system as a psychological system. I think the most powerful part of this is that by presenting your current financial situation to yourself in the way that the instant assessment does, it gets you to, to have, get you to make decisions without discipline. You make the decision that you feel like making, but then now it's the right decision. Whereas in the absence of the, the profit first, the, the initial assessment and really understanding where you are and you're not looking at this, all this revenue, you're just looking at what's left over to run your business, your natural and normal decisions tend to be the right ones to give you financial security. Whereas without it, you're still making decisions, the decisions you feel like making. But because the information giving you're looking at is incorrect, you're making incorrect financial decisions. So to me, the profit first system is a psychological system, it's not a mathematical system.

Do you find a lot of people who fall off the wagon, like after.

They rip off the band aid?

Yeah. Like they've started using for a little while and they revert back to that old mindset.

We don't, we don't because it's, it's, it's a constant conversation. We're always talking about profit first. They'll call and say, you know, we're a bit under the pump, we need to put somebody on, we need to add to our team. My first question is, what does profit first say? You know, is it giving you the thumbs up or not? So all of our decisions are based on profit first.

Have you had to do anything with the basic system to make it fit into the Australian, you know, laws and tax requirements?

Yes, but only in that space. And Angus has been brilliant with that. He's just, instead of putting a percentage aside for tax and superannuation and goods and services tax that we have out here. And our system requires us to pay that every 90 days. So what I'd been doing is getting people to put it in the account. What he's getting them to do is every time they do a distribution from their income to the other accounts, he, he gets them to pay that money directly to the tax office. So they don't even put it in. In the bank account. And so it's the exact amount of money. It's not a percentage. This is the, the tax commitment. Put that straight to the, to the tax department. And he said, look, you know, if you need the money back, just call the tax department and say, hey, I need that money back and see what happens. And everyone gets a good laugh out of that because they're not going to give it back to you. But, you know, it's a bit dangerous putting it in a bank account sometimes unless you do put it, as you said, Mike, in a separate bank that you don't normally bank with that's not connected with the Internet.

Right.

So it's like that old passbook account. So if, if you do try and alleviate the pain by going to steal from your either profit or tax account, you've got to do the walk of shame, you know, to. Got plenty of time to walk of.

Shame with the one stiletto. It broke off. Yeah, yeah. The makeup running down my face, the tears coming down. Why'd I do this?

Ripped fishnet stockings.

Right, right, right. Oh, my gosh. Make it. Hey, I might be getting back down your way, I think by next summer. Your summer, not our summer. So.

Okay.

Six to eight months. So we got to get together again for some more.

Absolutely.

Stakes.

Slabs.

For more slabs. Yeah, yeah, we call them slabs. I know you don't make before we let you go.

It's like, please stop before we let you go.

Where can our listeners find out more about the wonderful, wonderful business that you.

Have on the interwebs? Our business name is Builders Business Blackbelt dot com. Well, that's our web addresses. And the program is called Builders Business Black Belt. And we're all over the joint. I do a fair bit of posting and Facebooking and videoing and all of that sort of stuff, so we're not difficult to find.

And you've made hundreds of businesses in the trades more profitable than ever before. So thank you for the service you're providing them. Keep doing it, brother. All right.

Thank you for having me. This has been fun, even though you're.

Waking up so early, Mick.

3:42Am right now.

You woke up at 3:00am Are you going back to sleep or are you going to just work through the day?

That's overrated. We said. We talked about that.

Go hop in your Range Rover and go out in the bush or something.

I haven't got it anymore.

Have a slap.

Oh, yeah. All right, Mick, we'll catch you later. Thanks again.

See you Guys, see you later.

So here's what we're gonna do. We're gonna recap what we learned from Mick. We are going to do. We have another listener question that came in.

We do.

We've got a lot of them, I think every episode recently. But first, I want to thank our corporate partners. So let me get punched. There we go. I first want to thank Right Networks. You know, I said we're going to put in the beginning, but I don't know if we have enough time. So I'm going to read it now. Is that cool? Yes. Cool. Here you go, my friends. And this is important. Listen up. Right Networks helps entrepreneurs like you to securely transition your accounting based desktop applications into the cloud, regardless of which version you use. So as a partner of Right Networks, you can trust they will take away the burden of the it so you have more time to focus on your business moving your desktop and legacy applications, not just limited to your QuickBooks or whatever accounting platform you have. They move it to the cloud, keeping you close to your your numbers and all your applications from anywhere. Literally work anywhere, anytime. And also enjoy the added security of keeping your stuff locked up safe on the web. With Right Networks, here's what you can do. Give them a quick call. 8882-100237-88821-08237. You can tell them that Adrian sent you and you'll get nothing. Or you can say profit first and you get 10% off your purchase.

Depends what you're in for.

Life according to Mike. Just tell him Mike sent that.

Adrian sent me.

You get nothing. Who's Adrian?

Who's Adrian? Adrian, I'm sure you get that all the time. You get all the time. Okay, I want to know what you guys learned. Who wants to go first?

I'll go first. I learned a lot, actually. Well, first of all, with all the Australian trivia, yeah, I know what a slab is. I know what a sparky is. A mosi and a mozzie. I feel like these are important things for me. I loved the blindfolded on a race track metaphor. I thought that was so true for so many businesses that they really just don't even know where they're going. They don't have anything to measure. They have a lot of things to measure. They're just not looking at it. And it's so, like, it seems silly, but it's so dangerous, right? It's so dangerous to be on a racetrack with a blindfold on. And that is what we're doing to Our businesses a lot of the time. So I loved that visual from Mick that he provided.

All right, DNA plus. That's a good answer. What's yours, Kelsey?

I agree. I steal yours. Yeah. But no, that's good.

Good.

I like how he said, when you have financial pain, all of your other problems are intensified. And I feel like that is so true. It's like that compounding effect where you just have that emotional attachment then to everything because you feel that bottom line so closely.

Yeah.

And it. Yeah, I feel like it just becomes exponential in so many ways.

Like a snowball. Yeah, I wrote that down too. That was one of mine. So it was a biggie.

The snowball.

Well, like that financial pain. That idea of financial pain kind of like making you make poor decisions or not like have the.

Whereas in terms of leadership too, I think that trickle down effect totally like.

The stress that you're just carrying. It's a huge.

Someone once told me, desperate people do desperate things. And that's what happens when you don't have the financial strength. You start doing these crazy things that actually could harm your business in the long term. For me, the big takeaway, it was a one liner he dropped. He said the current pain is a result of the current process. I was like, that's. You know, I think a lot of times we look at the current pain and we attribute it to all these miscellaneous things, but we don't look at the exact process we're following right now. And that's usually the thing causing the pain. That was my big takeaway. We want to know your big takeaway too, listeners. And you know, Kelsey, how can people do that? How can they tell us they can.

Rate us and leave us comments on iTunes, Stitcher, TuneInRadio, profitfirstpodcast.com or mikemccalowitz.com Yep.

So go to any of those sites or all those sites. Why not? Why not just blanket all the tabs? Yeah, all the tabs. Just blanket the web with your comments. We do read them and we. Some of them convert to questions. So post your questions and we bring them here on the show and talk about them.

Yeah, we have one right now.

Oh, you ready to answer it? Let's do real quick. Yeah.

This one comes from Sherry Littleton. She says, I'm reading and working on implementing profit first, and I'm confused in filling out the information assessment. So namely block A4, which is profit, and A7 operating expenses. Can you please explain where these numbers come from when you're first starting out?

Yeah. So I gotta do this quick before our music runs out. The profit category and profit first is any money you've taken out of your business as a bonus. Distribution above and above and beyond your normal compensation, your normal distributions. This is a cash bonus. This is not what you see in your income statement. You know, that's an accounting profit. This is a cash profit. Most businesses I've worked with have. You've not done proper first yet have zero dollars in historical profit. So you don't know. Put a zero in there. Operating expenses is the cumulative of all expenses. Cost of goods sold, other expenses. When you add up your owner's pay, your profit, your tax and your operating expense allocations, that should be 100% of your revenue. That's where it all goes. Okay. I hope that helps, Sharon. All right, now let's get rock and roll and get out of here. Cass, you told people where they can go? I'll tell them they can also go to profit first. Professionals.com. if you're looking to drive profit in your business and you want a professional like Angus, by the way, in Australia, we don't have just one profits professional. I think there's about 20 down there.

Yes.

Okay. Angus is extraordinary, but so is Laura, so is. Well, we can go name by name, but there's extraordinary people down there. And we have a permanent presence now in Melbourne. It's not Melbourne. It's Melbourne.

Melbourne.

Yep. We have a permanent presence down there, so we can hook you up.

Is that like Tassie Land?

Yeah. We have sources. Now we're gonna ask.

I just want you know your review's coming up soon. Schmucko the Clown over there. Even if it's not, we're gonna make it come up soon.

It's today.

It's today. Your review. And I want to tell you, you should check out one other website. It's called Run Like Clockwork. Adrienne has launched a new division of her business. It is specifically designed to support the Clockwork book and methodology and rolling out in your business. So if you're interested in having a business that runs itself, check out runlikeclockwork.com and you just may find a way to run your business, you know, without.

You, which is great. Design it to run itself.

Yeah. Boom. All right, we're done. Any other comments from anyone else?

No.

You want to bust my chops a little more?

No, no, that's good.

All right, see you guys.

Bye, everybody.

Bye.

It's a long outro, huh.

Sam?