Episode 36: Employee Incentives and Business Funding with Christine Gray and Jared Hecht

You are listening to the Profit first.

Podcast, episode number 36. Oh, you didn't know it was coming. She's down.

Yeah. This is awesome. Welcome, everyone. The Prophet first podcast. Everybody loves humming our theme. I'm Chris Curran. I'm the founder of Fractal Recording.

And I'm Mike Michalowicz, the author of Profit First. And the show you're listening to is all about, you guessed it, your Profit First.

That's right. Don't focus on profit at the end after all your expenses are paid and everything's done. That's a total lie. Do it first. Yes, please.

I mean, how many times, Christina, growing up, you heard profit's the bottom line? It's the bottom line. Did you ever hear every day.

Every voice, too?

Yeah. She came out of the womb and, like, young child profits the bottom line. Read your baby profits the bottom line.

Right. So, by the way, our show's available on itunes and Stitcher and on tunein Radio, actually, dude.

Dude is crushing Tunein Radio.

And on the website is profitfirstpodcast.com.

Yeah.

Find all our episodes there.

Yeah, the whole history of episodes. And if you go to profitfirstpodcast.com I'm not declining or denying all the other great outlets that are out there to listen to our show, but we got cool fancy pictures up there, all the links, everything you can ever imagine about this podcast is there at that mecca.

There's funny pictures of you on your website.

There are some fun. Oh, there's some funny pictures up there. Yeah. Yeah. It's entertaining.

It is.

It's entertaining.

Just go hover. Hover over some.

I mean, people. People go crazy with laughter. So, dude, what you been up to, bro?

You know, I went to see that movie, Jurassic World.

Yes.

And, yeah, I mean, visual effects, fine. I mean, really great. But no story. I mean, absolute rubbish of a story. I mean, just got up and I was like, really? You know, the first movie was like, great. Jurassic Park.

Best movie.

It's a novelty novel. New.

New.

Had a story.

Had a story.

You know. Okay. Now it just. I don't know. But obviously the kids love it, and obviously it did really well.

Kids were going crazy. What you think you saw, too?

I loved it. I mean, there's a lot of. I mean, I agree there isn't much of a storyline. It's morely just about the dinosaurs eating each other, trying to eat people. But it's. I mean, it's. It's a good action to see a lot going on on screen. It keeps you entertained.

Right? And well done.

Yes.

Oh, the anime. I saw it too. So the effects and all stuff, pretty impressive. I think the hero is like too perfect. Like, he just. Everything, any issue, he handles it. Pterodactyl claws, his back, he hits it up. Like everything. He's like. He's too heroist. He needs to have some more weaknesses. I thought the closing scene where. Where the alligator dinosaur jumps out of the water to kill the mega. No, the velociraptor mega. The T. Rex was a good guy in this movie, right? So the T. Rex and the Mega.

Velociraptor and the raptors. Yeah, they make you like. They give you the feet.

Oh, and the raptors are good too. But the hybrid one, I'm talking about, like the really big one that fought the T. Rex. The T. Rex is all beat up. You're like, oh, no, T. Rex is gonna die because mega velociraptor thing is gonna slice it. And all of a sudden, out of the water comes this fish. You know what I'm talking about? Ludicrous. I mean, ludicrous.

Yeah, but you knew it. He's like backing up toward the water and you just knew that.

Things jump up. I know, but jeez.

Yeah. Anyway, welcome to the profit first movie review.

Two thumbs down, Curran and Malowitz. Yeah. A better movie to see is Once Upon a Time. I don't even know.

Is that a movie show?

A better TV show. One upon a Time.

Anyway.

Well versed in. In movies and tv.

So ask me. You asked me what I've been up to.

Yeah, what have you been up to besides wearing a fundera shirt eight days ago when you came to my studio.

And you got all excited. In fact, that still emblazoned your mind. That makes me feel uncomfortable. What I've been to. I saw this movie called Jurassic World. It's. Nah, I didn't like it either. That's what I've been up to.

Okay.

All right. You know what we got on our schedule for today?

I know we have an awesome guest. She's on the horn.

Her name? Yeah. Yes, we have hornist Christine Gray, known for her trumpet playing from the age of two. Yes, Christine is on the horn today. She's from Minnesota. Nonetheless, I want to see how quickly from her accent you can detect that she's from Minnesota. It's funny, you know, talking about accents, someone's like, oh, my God, you have such a New Jersey accent. I do. I'm like, I don't. I think I have a. A very American generalist newscaster, accent. Like, no. You sound like you're so from Jersey, right?

The worst person that I've heard with the Jersey accent is Ron.

Ron.

I listen to him speak, and I'm just like, yeah, Jersey all the way.

I thought Jersey was like, when you.

Ask a question or like the mitten.

Or written, oh, mitten. I say water. I just say water. Oh, yeah.

I was in Florida, like, years ago, and I'm walking down the boardwalk or something. Some guy walking the other way goes, you're. He points at me. You're from New Jersey. Because he heard me talking, and I was like, what? Why? Why? I talk normal.

Why I talk normal.

Everyone thinks they talk.

Everyone in New Jersey in this area talks normal. I don't get it. Everyone else outside of us doesn't know how to speak the right way.

And now sometimes these days, I don't know why, but I throw in the word y' all. What? What do y' all think I do that? People are like, are you from the South?

What are you doing?

Yeah, that piss. That upsets me. I throw y' all in every so often and hate that criticism. Like, oh, what are y' all doing? And like, oh, you're from the South. I'm like, no, it's just a good word. It's one of the great things to come out of the South. I mean, there's many great things that came out of South. I was about to say South America. The southern states of the United States. Fruit. Fruit. Football, music, killer music, Whiskey. What else? Let's keep it around. Robin going.

The foundation for Minnesota. Because it's below it.

Exactly. It supports it. Christine's like, okay, whatever. And the word y' all. But before we get Christine Gray on the phone, dude, we have three sponsors that belly up of corporate partners. We have three corporate partners. Three corporate partners that belly up every single time. Nextiva T sheets Fundera here over and over and over again. It points out exceptional they are. They support us because they support entrepreneurs. We'll talk about them later.

Talk about them later. And there's links to them on. On Profit first podcast dot com. And, you know, hey, click on through and check them out and then send them a note and say, hey, we heard. We heard you on the show. On the show. These two kooks.

Yeah. Are you guys from the South?

You guys, Let those two kooks represent you.

Where are you? Where are you all from? Bro? Bro. So let me do the introduction to music. You don't have to worry about it.

Okay?

There is someone who owns a company called Balance youe Books. She started in 1997. She. She hired her first employee 10 years after starting a business and started experiencing personal financial growth for her own business. Now you can give me some other music experience. Financial growth in her own business at the cost of her own time. And then she discovered profit first. And yes, you hear this theme now we're inviting in all these profit first professionals started applying in her business and started to grow her business profitably and start reducing the time demands for herself. And then she started introducing it to her own clients. She's creative incentive plans for her own team. This is what I wanted to investigate for her own team on how to make her business even more profitable to. To have more revenue and to encourage more profitability. With no further ado, Ms. Christine Gray.

Hi, everybody.

Hey, how are you?

Hi.

I'm really good. See, now I'm self conscious because I'm worried about my accent here.

That was unfair. How do you say the word Minnesota?

Minnesota.

Yeah, that's. There it is.

You ever use the word y' all?

You know, I do like the word also. Okay, yes.

Is it popular in Minnesota, y' all? No one uses. Does y' all get used up there a lot?

Not popular, no. But you will hear it be used.

It's spreading more and more.

The popularity.

Yeah. And you shouldn't be conscious. That was unfair of us to do that. But can you hear our accent? Can you hear the New Jersey accent?

Definitely. Especially when you said water.

Water. Yeah, Water.

Yeah, water.

Water. How do you say. How do you say water? How do you say water? How.

Water.

Oh, so much nicer. So much nicer. There's one of the biggest compliments I have for Minnesota right there. It's the pronunciation of water.

There's a boat in the water.

Oh, we have a. About.

There's my accent.

Boat. Boat. Okay, so tell us about Balance youe Books. You started back in 1997. How'd your business start out?

Well, I was fortunate enough to work with entrepreneurs whom, once they learned of my entrepreneurial desire, really did encourage me. And I was working in the insurance industry as an employee benefit specialist and as their staff accountant. And I was fortunate enough that when I decided to go self employed and go out on my own, that my employer hired me back. Independent contractor. So my first step into the entrepreneurial world really was without risk. And it was designed to be able to have the independence to raise my family without being tied to a schedule with an employer.

And then there was a certain point it was about 10 years into this business that you started to grow it beyond yourself. Is that accurate?

It is very accurate. It was really hard for me to let up control and even bring anybody into my business to help me with my client base. I had over the years developed very close relationships with those business owners I home office. And so the business owners that I worked with were long term, they were welcomed in my home. They were watching my kids grow up. And really the suggestion of my husband that I needed help, I couldn't continue the schedule that I was keeping. I tended to migrate down to my home office and disappear from the family. And I had a very good first hire. She is still with me today. She started out at 10 hours a week, and bless her heart, she had to put up with, you know, not only coming in new and me learning how to delegate and relinquish some of my control, but she had to put up with, you know, the home office, the kids, the dog, the laundry, everything that goes along with it.

So did your husband, by the way, say, I have enough when you had one of your clients sleeping in your bed between you and your husband? Like, this is enough?

You know, I never let it get to that point. We did have space that was separate from our living space. Okay, yeah. It was when we. It was when I decided to leave my home office and rent a professional space space that we really experienced growth.

So let's talk about that, because sometimes I find what facilitates growth is actually not having enough money to do something, which sounds very counterintuitive, but sometimes it's making a big step or a big commitment toward growth. How did getting that new office space affect you?

You know, the new office space? For me, I really feel that it was more of a mindset for myself and my clients because, you know, I can't even explain it. It seemed as if, when I reflect on it, it seemed as if as soon as I did the professional space left my home, my clients, it was like popping the bottle top off and they all started referring. And it just built based on referrals. I really didn't put a whole lot of energy into the growth itself. It came very naturally.

I mean, was it just magic? I mean, you're working out of the house and the business is doing well, but it seems maximized or topped out. And now you move to this office space and it starts growing explosively. Is it just magic or did something happen in your mindset or the way you're acting or what was the cause?

You know, I would say probably my availability Being in the. In the professional office space, I probably, you know, I would guess that I seemed more accessible to the client base that I had, of which, you know, they had a good experience with me. And like I said, all of them were long term. And so I would definitely say accessibility, because that professional office space, the door is always open. The office hours are consistent. They're not having to call me and say, hey, can I drop off my accounting. They're not having to arrange a time. So probably more definitely accessibility and maybe mindset, too. Yeah, I wasn't going to work with my slippers on anymore.

Right. So you're in a much more professional mode.

Possibly.

So now I know why I wear. But I should stop wearing barefoot. Walk around barefoot in the office.

You know, my office still has a pair of slippers under the desk, so.

That'S the way to roll. You know, I wear flip flops and just throw them off and I'm barefoot and I skeeve everybody out. I gotta stop doing that.

You know your shower robe, right?

Yeah, exactly that. The worst time blows open when the wind comes by, which was Einstein's favorite move, I gotta tell you. Write that one down. Let me tell you the story about Einstein a little later. All right, Christine, you have a very cool strategy, and I want to learn all about this. I understand that you interviewed your team members, your employees, around their professional growth goals, and then you actually leverage that to move them into different niches, industry niches, so they can become experts in that category. Tell us all about that.

Okay, so the end of 2013, and I just know the timeline, because it was becoming My business was becoming very burdensome on my time, my energy, my family life, 24, 7, around the clock, working. Yet I wasn't. And I was recognizing that I wasn't experiencing the personal growth and professional growth that I wanted to. And I also felt that I had lost the focus of where I wanted Balance youe Books to be when I developed it. And I also didn't want to. I knew that I wanted to project forward into a different area of professional growth. Not in just accounting, tax and, you know, basic advisory services. But yet I wasn't. I was greedy in that I did not want to give up the talent that I had acquired in my team, you know, that personal talent. And I had gone through the pains of hiring the wrong people, letting them go. Got to the point where I really feel that we have a lot of talents. Balance your books and talent that really deserves to grow. And that's where I was reading The Pumpkin Plan, of which I do need to read through again because I know I've definitely. It is an amazing book.

I didn't know you heard me whispering that.

The author. The author has an amazing personality and.

Shockingly and shockingly handsome. I mean, the combination is beautiful.

Well, you know, so reading the Pumpkin Plan and after reading Profit First, Reading Profit First, I knew where I wanted to head personally and professionally. Reading the Pumpkin Plan started to create clarity for me and what I could. How I could manage my existing business with my existing team while still creating a separate entity structure segment based around my professional goals, which are Is profit consulting.

Mm.

And so interviewing my team members really was. Our community is a. Our population is about 230 to 250,000 people. And so. And we've got a lot of experience between my team members in many different industries. And so I was feeling greedy in that I didn't want to just pick one niche. I was a little bit fearful, you know, and that day maybe will come. I see myself into niches that I have chosen, the direction I will go. And that's where it started becoming clear in my mind saying, hey, if I have the niches that I prefer to work in and professionally grow in, then my team must also.

Interesting perspective.

Yep. And I didn't want to lose them. I was also really looking at my growth plan to be around how do I eliminate turnover now that I found the right team members? Because our unemployment rate is extremely low, it's hard to find talent because of the Bakken and the oil boom in the Dakotas.

Oh, yeah, yeah, yeah, yeah. So everyone's big corporations are coming in and smaller businesses are getting squeezed because you can't pay the salaries that they're paying.

Right, Exactly. Or just employees aren't as settled as they used to be. You know, it's changed. People are job hopping. Two years here, two years there, and my team right now is eight years down to four years.

Wow.

Yeah. And so I've got the stability in my team. I've got the stability in my client base. We do need to become better at screening our clients to make sure that they are the right fit for us, of which we have started to design packages. But to go back to the question of interviewing my team members, I sat down with each of them and just started talking about where do they want to be professionally? They all have accounting degrees. They all have their own. You know, when they went into accounting, where did they see themselves and where do they see themselves now? After having experience with balance youe Books as a company and with myself as their leader giving them direction. And they each crazy enough Mike is they each picked separate industries. I never had to worry about one fighting for the others block of business with in balance your books.

Can you give us a sense of the industries that you're in through your people?

Through my. Through my team. I have one team member who has chosen construction and so with her we have also tied in blue collar services. They really do tie in very well together. Another team member will work very closely with me in retail because retail is one of my passions.

Interesting.

My second passion is medical independent medical providers. And I have another employee that will work closely with me in medical. Then my. An additional one is going to end up to be more of the professional services and help out with blue collars. And she's my tax person. So she can only. Her bandwidth is only so far now I assume.

But maybe this is just an assumption. Say you're in construction, you have your lead team member that can get in there because they're so familiar with it, they're recognized. Perhaps they go to the networking events, people see them. But if you need all of a sudden a little more manpower over there, I guess you could pull your team from the other categories and have them kind of play second fiddle to your team leader for construction.

Exactly. The way we've designed it is we'll have the. I'm terming it as their expert pod. So Team Member 1 will have her expert pod to be in construction. And if she needs to delegate, those clients are her responsibility. She needs. She's the ultimate ultimately responsible for the client's success in our accounting system. And if she needs help and she needs to delegate, it's her responsibility to go to another team member to delegate. And it's her responsibility to give direction, give a timeline that the project needs to be completed upon and make sure that the team member delegated to follows through and does it accurately. So it removes the responsibility from me as the business owner to make sure that I'm pointing the ship in the right direction constantly throughout different industries puts it on the professional.

And by doing this. Are your niche leader team members, are they marketing your services to. Are they intimate with the community beyond just providing the service but also out there getting the brand out?

They will be. They definitely will be. In the past months, you know this of course is all in design and we're working through the processes right now and really getting the baseline built. They are all working. We've shifted clients. Any new client coming on will land within their industry, within the professional for that, that fits that client. What we've done is I have given my team incentives to go out and network to bring on new clients. I've given them incentives to bring clients into technologies that will help us be more efficient and increase our communication and transparency of the clients accounting systems. I am an Intuit Premier reseller, so I've given my team incentives to implement Intuit products where they see fit. Obviously there's a lot of other products that we implement in our office. T Sheets is one of them. It definitely is. That will help the process become more efficient for all involved, the business owner and the accounting team. And so part of the networking isn't just coming down to me anymore. I'm not solely responsible for bringing on new clients. What we've done is each team member will pick and are picking and have been involved in networking associations in our community. And the way we've designed it is if team member 1 is in retail and she's in a networking event and meets somebody in construction and they're going to have, whether you call it a dance card or a get acquainted meeting, that responsibility of the retail team member is to bring the construction team member into that meeting so we can form that relationship right off the bat. So that's how we're managing the networking.

I love it. It kind of reminds me of the setup of like a law firm. These large law firms will have all these different partners who really are the rainmakers. And they do work too, but the different lawyers start specializing different categories. So it's not one law firm that does one thing. It's really a collection of small micro businesses under the umbrella of a law firm. And sounds like you're emulating that. The other thing that you shared with me earlier was that you've developed now an incentive plan around this new structure. Can you tell me a little bit more about that?

The incentive plan is actually three tiers to it. The first tier is to build client relations, client retention and transparency for the customer. And so we have a grid system where they're going in and adding points. It goes pretty deep, but they've got Excel spreadsheets where they can monitor them. And it really just comes down to the touch points. We want to make sure that every client not only receives their financial every month, but quarterly they're doing an on site visit monthly. They need to make sure that there's some form of verbal touch point, not just relying on emails and texts. How us accountants, being introverted, that we are, tend to do business. And so the first tier will give them a point system. And as they reach people points and gain different levels, they're actually receiving from me gift cards. So they've all got a Visa gift card. And we'll be reloading that gift card as they reach different levels based on different dollar values that they receive. For incentive, the second level of our incentive program is to work on technologies and efficiencies within our structure and the business owner structure.

Okay.

And yep, so that's a point system as well. And there's just different factors that we've got involved to measure. The third level is revenue growth for the company as a whole. So they are being measured with their expert pods for growth as well as the company for growth. And so the entire incentive system is built on teamwork and individual performance.

And so what's been the. How has this been received? Because I assume prior to this you had a regular kind of flat fee, your salary is your salary kind of program. How's the transition been received by your colleagues?

You know, I tested it first on our tax division and it was very successful. And then of course, we added many different layers for accounting and bookkeeping. And the perception of it is very. It's high morale. It has really created high morale. I'm seeing that it's transforming their thinking into becoming more entrepreneurial minded. They're taking ownership in their performance. One of the things about revenue growth is, I should say it's actually gross profit growth, is that I'm rewarding them to be efficient while still growing our revenue base. And so they are. They're thinking more about how they're spending their time. They're thinking more about that client retention, about the client experience, the feedback that I'm getting from my team and how I'm seeing it through their communication with the client and with me is again, ownership. They are taking ownership in their expert pods and really looking forward to the personal and professional growth that it will lead them.

The last question I have for you is the implementation. Profit first. I know you're starting to roll it out now. How's that been going? What's the perception from your clients about moving to this new approach to managing cash flow?

The perception of my clients is wonderful. I've definitely been conservative. I haven't been 100% prepared. I'm just getting to that point, like you said, where I'm rolling it out. I feel like I have the baseline built. I feel that I'm going to have the time to spend with those clients once I Do introduce it. And so, yes, I have picked three clients who are actually one brand new one that I just introduced yesterday, Profit first and then two existing clients. The perception is phenomenal. It's even just starting out with the concept of profit before sales and profit equals sales minus operating costs. It's a great lead into that conversation and they're very interested. And like I said, for me to roll it out and create my business around it, the new segment of my business around it. Picking my highest entrepreneurial focused clients was a good choice. No, they're loving it. And I really see that they're going to jump on board. And I'm starting to work through the profit assessment with the two clients. The third one that I just introduced it to yesterday, I'm very anxious for this particular client as I see he's got a lot of business opportunities in his mind. And when I introduced Profit first, he was. It sold him as a client. I do believe that we got his accounting based on that conversation.

I can tell you this. You definitely did.

We definitely did.

Now you've got it either way. But what's interesting that you're doing and I found this playing out, Christina, I know you know this is that when you start getting profit first into with one or two of your best clients or more entrepreneurial clients, they will carry the weight for you and tell others, you got to do this too. Cristine, we got a rock and roll. But I want to ask you if people want to use your services and you don't have to be in Minnesota, but it'd be nice if you are. But anywhere in the world, how. How can they reach out to you, Christine?

I would say to definitely go to our website, which is www.teambyb.com.

Great, Christine.

Because all of our contact information is there.

Oh, that makes it super, super simple. Christine, thanks for joining us.

Thank you, Mike. Thank you, everybody.

Chris, Christina, thanks. Christine.

We'll see you later.

Great job. See you.

Bye. Bye.

Dude, I got the highlight of the century. I don't know if you saw how many times I circled that, mom.

Really? I can't wait for that.

You cannot wait. Hang on for the wrap for our show. Before we do that. We got another guest coming. Now listen, there's one company we talk about all the time.

I'm so excited. This is like a landmark. This is a landmark event on this show.

A landmark event. We've had in the past some of the biggest names in the world on our show. I can't think of why. Okay, We've had some big names up. We've had Roger D, the guy who wrote Brain Fluent. Yeah, we've had Matt Rissel, the founder of T sheets. That was not stuttering, that was a click. We've had. Isn't Michael Gerber coming on board?

Maybe.

We've had Barack Obama.

Yeah, and he said the N word on the show.

Actually, I can't back that up with paperwork. No, sorry, Dr. Evil. No.

Oh, okay.

Don't get it.

Did you hear he went on a podcast and used the N word? Yeah, wow.

I heard the clip.

Oh, okay. But we've got some big names on here. We're about to have the name that trumps all of them. You're.

I don't mean to laugh.

No, what do you mean? Here's there's one company that's been backing us from day one and I told you, they funded. Here's your hint. They funded a hundred thousand dollar plus loan for one of our listeners. This guy is the co founder of Fundera. With no further ado.

He's killing his microphone.

Oh, I know you got all the. Dude, you just killed my introduction, bro.

That's okay. Bro, bro, don't tase.

Don't tase me, bro. Don't tase me.

We'll work on it.

You gotta do the lean when you loud. Lean back.

Lean back. With no further news.

Not that far.

The founder. The co founder. The co founder of Fundera, Jared Hecht. Oh, it worked. Where did we hear that scream from? We know you're jet setting around the world. Where are you today?

I'm in upstate New York today. Literally in the middle of the woods.

Wow. I hope we. Yep.

Hanging out with my wife and my in laws and my parents.

Oh, nice. A little vacay up there.

A little weekend vacay.

How was the trip back? I saw you down in New Orleans. How was the trip back from New Orleans?

You know, we made it, just barely. Yeah, we were supposed to connect through Atlanta but there was a crazy weather thing happening in Atlanta and all the flights are grounded but we ended up getting on a direct flight and getting back safe and sound.

Oh, that's awesome. I got, you know, quote unquote stuck there for another day. It's not too bad a place to get stuck quite frankly.

Yeah, worse places in the world than New Orleans.

Yeah, definitely, definitely. There's a lot more sober places than New Orleans too, I'll tell you that.

That's true. There are a couple out there.

A couple? Couple. So do you know that one client I'm Talking about we're not gonna share their name or any of their details. But we had a listener to his show here that became a Fundera funded client.

Indeed, we did.

Tell us about.

We're grateful for that.

Oh, well, we're grateful for what you guys are doing for us. But tell us about how they go about the process. We have a lot of listeners asking about Fundera, but they don't know the details and we don't say it eloquently enough. How does the process actually work?

It's so simple. So a small business owner comes to fundera.com they complete a very simple application. It's like 15 questions where we ask them basic information about their business. Things like, how long have you been in business? Where are you located? What industry are you in? What's your annual revenue? What's your credit score?

What's the name of your father? How much money does he have? Would he mind if his legs are broken?

Yeah, right. Precisely right. Nothing of the sort. So once we get those 15 questions, we run it through what we call our matching logic and that determines which products in our marketplace the small business owner is eligible for. So we work with around 30 different lenders that offer all these different types of products that small business owners use for growth for different reasons. Some of them are SBA loans, some of them are multi year term loans, some of them are shorter term cash flow loans, lines of credit, equipment financing, invoice financing, et cetera. The objective there is to really have a business credit product for every business owner out there. The lenders that we work with like to work with small business owners across the entire credit spectrum. So there's a lot of small business owners out there who are doing exceptionally well. They're very prime customers. Great credit score, has been in business for years, millions of dollars in annual revenue. But there's also a lot of small business owners, if not a majority, like 90% of small business owners who have hurt their personal credit because they were starting their business with their personal credit cards, or took out a loan, or put another mortgage on their home. And we really have a nice network of lenders that likes to work with all types of small business owners, regardless of their situation. They fill out a little bit of information, we show them all the products that they're eligible for, explain to them why they're eligible for those products, and also help them understand why they might be ineligible for other products. Like a lot of customers, customers want an SBA loan, but they may not be eligible for it because they might not have a strong enough personal credit score. Maybe their revenues aren't strong enough. We provide them information on the products that they're eligible for, and then a customer will select the product that they want to submit an application for. At that point, we'll show them.

If I can just jump back one thing you shared all the different types you said, like invoice financing to different short term loans. I don't know. Listen, I'm in the industry to some degree. I don't even know all these terms you used. I presume an entrepreneur listening to the show will say, I don't know what type of loan I need. Does Fundera help you sort out the loan that's appropriate for your circumstances?

That's absolutely right. And that's one of the reasons why we exist too normally. What we saw before a service like Fundera existed is small business owners, number one would end up in the wrong products simply because they didn't know about all the products that exist.

And what's the consequences of that? What's the consequences of being in the wrong product?

Man? Imagine you want to buy a piece. Imagine you want to buy a tractor or you want an equipment loan because you want to get a bunch of new computers for your creative agency. But then all of a sudden you don't realize that there's equipment financing out there and you end up using invoice financing to finance the purchase of equipment. That makes no sense. Normally the consequences of getting the wrong product is you're going to end up paying a lot more money for that loan than you would had you actually pinpointed the right product and run a competitive process for acquiring that product. So generally, it's a very, very bad end result when a small business owner does not understand the product that best suits their need and they don't run a competitive process to truly realize, hey, here are all the lenders out there that are going to offer me this product that I know I need. It's like, it's like this. Let's just say you want to go on vacation, you want to go to New Orleans, you want to go to scaling new heights, you want to book a flight, and you go on delta.com, but Delta does not offer direct flights from New York to New Orleans. But you know, you want to fly direct because you want to save time and you don't want to get stuck in Atlanta because there's a horrible hurricane or something happening there and you're going to be grounded for hours. Atlanta, why would you go to delta.com to only see what Delta has to offer. When you could go to an Expedia or you could Kayak or Priceline and you could find the flights that best suit your needs at the prices you want and the times you want, that's effectively the type of service that Fundera is providing.

I gotcha. I gotcha.

Great analogy.

Yeah, no, that's a good analogy because that is exactly, unfortunately, what I do. I just go to United, our hub here, and seriously, going to New Orleans, Christina had to do this. I'm like, oh, I'll just hop on United. And there's no direct flights. Like, this is horrible. And she's like, go to kayak, dude, or wherever you went. Or Expedia.

Yeah.

And then she got me a flight on JetBlue. I was like, oh, that was smart. Now, Jared, what are the most appropriate use of funds? I can listen. Sometimes I'm short on compensation for payroll. Never happened, by the way. Christina, don't get nervous, but I don't have my payroll. I need to borrow money, but maybe that's not a good use. Is there times when it's smart to borrow and times when it's not smart to borrow?

The answer is yes and no. And I say that because there is no such thing as the definitive appropriate use of funds. The reason why all these products exist is because they really service particular uses of funds. An equipment financing or an equipment loan is there to finance the purchase of a piece of equipment. It makes sense to get an equipment loan when you want to buy equipment. When you want to meet payroll, you know, that's generally a sign that, like, perhaps the business's cash flow is not necessarily where it should be. So maybe you think about invoice financing so you can free up some working capital and improve your cash flow so you don't have to wait 30, 60, 90, 120 days to get paid from your customers. Maybe you're looking at a shorter term duration loan because you only have a short term need. Like you want to take advantage of purchasing some inventory because it's Christmas season and it's coming up and you know you're going to sell a hell of a lot of something, but you don't want to hold that loan on your books for many years. You'd rather just buy the inventory, make a profit, pay off that loan. And then there's other great use cases like expansion. So when you think about, like, oh, I'm a restaurant owner and I want to buy the real estate next door so I can expand Or I want to remodel my equipment or buy new furniture because I think I'm going to attract more customers. Great. Maybe you're looking at a multi year term loan or an SBA loan at low interest rates where you can get hundreds, hundreds of thousands of dollars, sometimes millions of dollars, to really kind of think about, how do I grow my business and take it to the next level.

Gotcha.

So the use cases really vary.

Gotcha.

The only time it's really a bad idea. Well, there's a couple times when it's a bad idea to take a loan. But one thing that we see with many small business owners is they already have a lot of debt on their books and they get into what we call this bad thing called the death spiral, where they start with really short term, high interest rate loans that are difficult to pay back, and they just keep on taking more of them out and they build themselves a trap. That is when it's kind of. It's a really bad idea to continue down that spiral.

An analogy, kind of like your airplane analogy, the death spiral analogy, Chris, that I use is when my wife said, hey, our anniversary is coming up. And I said, it is. That was a death spiral.

You're done?

Yeah, done. All right, Jared, I got the big question.

It might be worse.

Oh, yeah, exactly. I got the big question for you. I got to do my suspense. Hold on. That's right. Okay, here's the big question. And I don't want people to abuse Fundera, but what if I just want to see if it's even something I should experiment with? Our entrepreneurs that are listening right now, could they go to Fundera and start the process to see if they could even get funded in the first place? Or is that a waste of time? Do you have to go in knowing you need money or is this something you can apply to, see if maybe it will help you, but not necessarily. Go ahead if you don't want to.

We encourage small business owners to play around with the entire site just to see what they're eligible for and familiarize themselves with what options are out there. Because the most important thing is to be educated. Understand what you're eligible for, understand what you're ineligible for. So if you're looking for a 10 year SBA loan, 6% APR, well, you should understand, number one, are you eligible for that right now or are you ineligible for that? And what do you have to do to improve your business so that, so that you can become eligible for that over time? So when you're ready to Grow your business. And you want that low cost loan. You're perfectly situated and you've done everything you need to do to optimize for securing it. So we actually encourage people to check things out even if they're not ready for a loan. And we also have this incredibly excellent customer support team that's there to answer any questions, whether or not you're ready to go or you're just kind of going through an explorational phase, trying to understand what all the different options are out there. And we're there to talk in person too.

Yeah. And I love it. And I was not intending to set you up there, but I thought you would actually say, no, that's not a good idea. So I am thrilled that you do that. Jared, we gotta run. It was an absolute pleasure to have you on board and we are so thrilled that you have been a sponsor for us. And I don't know if Meredith told you, you guys upped for another year with us, so thank you, sir, for doing that too.

Oh, I thought we upped for another 10 years.

Oh, you did. Chris, is that recorder on 6%?

6% interest at 6%.

Jared, thanks for joining us and enjoy the rest of your vacation up in New York.

All right, take care, everybody.

Thank you.

Thanks, Jared.

Bye. Bye. So what?

Bye.

So what did you learn there, Chris?

Well. Oh, well, from Jared, I mean, come on, it's like an honor to meet. I think I was a little starstruck. I didn't even want to talk. I was like, but funding.

Your money is used to buy my food at home.

But no, Christine, she talked about how each of her team members has their own niche and, and that they're also responsible for managing that whole. Their. Their division or niche. They're met. They're responsible for managing that whole thing, the processes and everything. Love it. Yeah.

Yeah. No, I like that. That she said that talent deserves to grow. And, you know, you pick, you talk to your employees and you find out what they're good at and find out what they like and you expand on that. And that's when they're gonna excel and that's when they're really gonna focus on. On bringing in the money.

She completes me.

She's good.

She's good.

You're rubbing off on her.

She's rubbing off on me. We. We brought her on board to do just administrative duties and now she's actually the lead for our event. She's running our event. This is something she enjoys to do. And the structure is so much better than if I Handle it, because I can, but I really can't. You know, it's the old thing. Don't do what you don't like to do. Give it to someone who's talented and likes to do it, and they start to excel. I love that, dude. See this big circle? Did you see this?

Yeah. You basically shredded a hole in this piece of paper.

This poor, desperate, sitting on his massive. Thank God you're leaving the studio. Leave this furniture behind for Barry to try to sand down. I put Incentivize. Incentivize.

Okay.

Oh, that was a horrible script. Incentivize the results you want. I mean, that's so obvious, but everything that Christine was telling us was focus on the results you want and then build a structure around it to encourage people to be rewarded around what they want to do. And Jared, a little bit starstruck, too. Met him in person down in New Orleans. Awesome guy. Tried to get him drunk. He wouldn't go for it. He wouldn't go for it. But I got one of his colleagues wasted. He said, the death spiral, the time to not borrow, is when you've been borrowing too much already. And I see people do that. They try to dig out by borrowing more. That's your indicator not to do it. And let me tell you something, that's a class act about Fundera not trying to give them a plug, but it's an absolute reality. They will tell you when you're going into a death spiral. I was talking with Meredith Wood over there, that's our contact, and she says, yeah, we had one of these folks come to us, and borrowing while they could have got funded would have been a bad move for them. We suggested, actually, they don't do it. Pretty freaking cool.

Wow. Totally.

You know, and Jared also said that they take the time not only to explain to their clients what products are good for them, but they explain why certain products are not good for them, which I find a lot of businesses don't do that. No, just like, no, that doesn't work for you. But they actually explain why it would not be a good fit for them.

Yeah, and you know what? And Fundera set up their own incentive system that whatever loan you get, it doesn't affect them. Their business will be healthy if they can serve you. So they're not motivated to say, oh, you have to do this one type of loan. And so their incentive system supports that.

Right.

We gotta hurry up here.

Yes.

Dude.

So our other sponsors, by the way.

Yeah, yes, that too. Nextiva.

We'll edit that out. Not really?

Our other corporate partners, voice over IP from nextiva. It's a phone system, a full function phone system for 1/5 the price of a normal phone system. The world's best customer service. Fantastic, fantastic customer service. All based out of Phoenix too. The actual headquarters is where the customer service department is. And we've talked with folks over there. And on Fridays, if you call them after 5 o' clock, they serve beer at the office.

Whoa.

So don't call them after 5 o' clock. It takes a little bit longer to fix things.

If you are interested in coming.

Did I just change the photos? And then, of course. T sheets.

T sheets.

T sheets. You know, it's funny, the last three or four episodes we did, oh, I'm using T sheets. Oh, I'm using T sheets. No surprise though, because it's a cool company. We use it in our office. It's great for tracking time. It's cut our effort and just the administration of tracking time. We did the old school, dude, this is 2000, what, 15 or something? We're still tracking on paper until I would sit there with a calculator. You know, Christina scribbles stuff. I'm like, I can't read her handwriting.

Thank you.

I'm trying to figure this out and did I do it right now it's like done.

Nice.

Great system, dude. What do you do and what I do and let's get the hell out of here.

Yeah, we got to run. But my website is fractal recording.com. i produce podcast shows for business authors.

And I'm the co founder of Profit First Professionals. If you need an accountant or bookkeeper who will drive profitability in your business. Yeah, they do the accounting. Yes, they do the bookkeeping. If you want them to drive the profits in your business, go to profitfirstprofessionals.com, click on find and we're going to hook you up.

That's it. Website is profit first. Podcast.com. join the community. We got to come up with a name for our.

I got a name. Here it is.

I'm assuming you just said Mike McCow.

Nice. The the Prophet Army.

Oh, the Group of Them.

Something like that. That's what we can call our audience.

Brainstorm. If you have suggestions, email them in.

There you go. Comment on the website.

And I'm still waiting for the winner. Like four episodes ago, we said, if you can name the base. This from Van Halen.

No one did.

No one did. It's Michael Anthony. Losers. No one. One person emailed it and said, I think it's Eddie Van Halen.

Thanks for listening, everybody. See y' all.