Episode 41: Accounting and Profitability with Dawn Brolin

Hold on, let me start us out. That is the worst, like, who record. Who said, I'm gonna do the General Lee bad and then did it for me?

He was drunk. He could have drunk.

He was drunk. This is hysterical. I'm sorry. I'm sorry.

You're listening to the profit first podcast episode.

You are infra doozy 41.

There it is.

Oh, God.

Wait for it.

I like when you do that.

Yeah.

Welcome, everyone.

Bad about myself, and I felt good about myself. You made me wait.

I'm having a good boob day, actually.

So, yeah, we're gonna talk about that. I like our guest who's gonna come on. She's like, this is gonna be a good episode. We're like, oh, good. Happy. Feel that way. And she's like, you know why? We're like, no. She's like, because I got a good boob day going on.

Okay, terrific. So thanks for listening, everybody. I'm Chris Curran. I'm of Fractal Recording.

I'm Mike Michalowicz, the author of Profit first on this show. Well, obviously, we talk about boobs a little bit, but we talk about everything, about profitability, all the different angles and perspectives and the guests we have today, who you are in for the ride of a century. You are in for the ride, but you are going to learn a lot, and you're going to have some. Some giggles too, on the way.

That's right. So there's a lot of business shows out there on this show. We really focus on the profit side of it. And we're available as a podcast in itunes and Stitcher and. And also tunein radio and Also our website, profitfirstpodcast.com. you can see all our episodes, all the fun we're having. So we appreciate that you're listening.

Yeah, we're cranking on tunein radio. They really picked things up over there. Downloads. I'm serious, man. Downloads are cranking for what we got going on here. Well, we got a lot to talk about, but first, I always want to thank our sponsors and just give them a little shout out. So, Tsheets, Fundera, the Nextiva. We love you. We really love you. Thank you for being our corporate partners in this. And so, dude, what have you been up to, bro?

You know, I stopped drinking so much coffee, you know? Cause one day I used to drink in the morning, in the afternoon. And then all of a sudden, one day, I didn't have my coffee and I got a headache, and I'm like, yeah, it's that coffee headache. And I'M like, you know what? I don't want to be a slave to coffee. So I said, I'm not going to drink coffee anymore. So I switched to tea. And it's been going really well. Today I have a bunch of. I'm eating some fruit and drinking some tea, eating some peanuts, and. And it's funny.

Good for you. You go getter.

And now sometimes when I have like a sip of coffee or I try to drink a small cup of coffee, I get a headache.

How long coffee?

Not long.

Like a day, A few weeks. Okay, an hour. And now you, like, hate coffee? Yeah, an hour. So. And were you, like, how much coffee were you having a day? Like, it sounds like you're drinking a full pot.

No, no, just in the morning I'd have coffee, and in the afternoon I'd have coffee but like a medium. So it wasn't that much. But the thing is, you build up a tolerance and then when you don't have it, you. You get that coffee headache. And I didn't want to.

I have never had a cup of coffee.

You've never had a single cup?

Nope.

Wow. You have the hot cocoa. We have the hot cocoa. Share that every so often. I have it every morning. I've had it. Not even that I really want it. Maybe I'll stop doing it.

I don't know.

So you know what I've been up to?

Yeah, what have you. What have you been up to?

I've been drinking more coffee. I mean, like every day. Now I'm like, I'm doing too.

What's up? Have you been up to? Man?

I don't know. I was doing one and then Ron comes into the office and he throws one back. I'm like, oh, I'll throw him back with Ron. Christina comes in, she fires up a mug. Is something going on there? Thought chicoko.

And I'm like, oh, hot chicoko.

Hot, hot cocoa. It's like a blend of coffee and. And then. So when I throw in a mug, it's just too much coffee. Dude, we gotta get down to business. We got a guest coming on. Her name is Dawn Brolin. And if you're insane, you. You'll recognize this. This name because she. She is one of the most popular names in the accounting industry. She works with small businesses throughout the northeast. She, unbelievably, so, is a cpa. I don't know how they assigned that.

One to her, how they let that slip through the cracks.

Yeah, exactly. You thought that was like, you know, that organization had his act together. Not. She's the managing member of her own company called Powerful Accounting. I'm surprised she even hired herself. She. And listen to this dude. Accolade after accolade. She. She won the top 40 under 40 for the CPA Technology Magazine. She has listed three years consecutively the top 25 most powerful women in accounting. And she and I did a TV episode together on msnbc. The crowd's already cheering because she is here and ready to rock and roll. Dawn Braulman, welcome to the show.

Well, yeah, I know. I'll tell you what. There's so many people. The paparazzi is all over me right now. But. But what I do love is that Chris has a coffee problem because I have a problem with Mad Dog 2020. Not sure if you've heard of that.

Isn't that booze?

Yeah, that's Mad Dog. And I try not to have any before noon. I mean, you know, because that's like inappropriate. But I also learned that Chris, he said something about smoking pot, but he doesn't inhale. That's what I'm station. But it's. It's an honor to be on your show because. Yes, Mike Michalowicz and I date silently.

Silent. We're silent daters. We're SDErs.

You should try it without the T. Yeah, yeah.

We're not stders. What's the T stand for? We're silent daters. What could the T stand for? Titillating. We're silent titillating daters. We're stders.

We do. We totally are. And Christina, of course, I don't know how she puts up with the two of you, but she would be sent directly from heaven.

That's how she is.

No, she is. Yeah, well, she's the heart of the company here at the office. And it was so funny before this episode, before we started recording it, you said, oh, it's gonna be a great day today. We said, why? And you're like, because I'm having a good boob day.

Yeah.

And Christine looks over and she goes, oh, yeah, you totally can have those. Like really?

It's a legitimate thing.

I've never heard of that.

Yeah, well, you know, your profit first book actually snuggles in well, which is really nice. It's a good shelf.

Nice.

It is. It's perfect. It fits. You know, when you're reading it, it fits just correctly.

It's a good resting point. It is. Really.

Yeah.

That's interesting. I never considered the importance of book design and it's self shelf sitting capabilities.

Actually, if Your next book, you could just put a little curve on the bottom. It would help us out.

Oh, that's funny. That's a good idea.

Inverted, though. Inverted.

Not inverted. Inverted.

This should be a conversation for video, I think.

No bulging from the bottom, Mike?

No, that would be uncomfortable. So talking about uncomfortable, tell us about your business. What exactly do you do?

Oh, you didn't say I had to talk about that today. Well, actually, so I know it is pretty phenomenal that I actually achieved the CPA level, which is, you know, I don't know. I think. I don't know what happened there. Obviously, I put somebody else in the chair to take the test. But we here at powerful accounting, we do anything from bookkeeping and write up work, which is, you know, okay. But the fun stuff, we go into IRS notices and working with taxpayers to keep the evil government out of their money. I was actually down in New Haven today working with my. One of my favorite tax firms, attorney firms down there. And we just. We kick butt. Like, we defend the taxpayer. I. You know, we carry guns, wear bulletproof vests, and just crush it. And that's.

Well, if you're visiting New. If you're visiting New Haven, you have to wear a bulletproof vest.

That's correct. That's correct. So we always go in prepared. You know, don't be scared. Be prepared. So Always carry your Bodyguard 380 with a laser sight and always have a bulletproof vest on.

Do you carry Mike's book under the vest?

Yeah, that's actually the breast shield that goes inside of the bulletproof vest to stop anything.

Oh, my God.

It encourages profits, but it denies anything evil.

Right, Right. So let's talk about taxes. This is a major issue for entrepreneurs. The folks listening. Well, there's no one listening now, but if there was someone listening, if there was someone listening in the big issue is taxes. And you want to reduce taxes, so you keep more in your pocket. You got any tips for us on how to do that?

Well, I can tell you one of the biggest tips. I love to tell my business owners, because they call me, you know, in November or December or even just notify me in February of the following year. Hey, I think, you know, I've made a lot of money, so I'm just gonna go buy a piece of equipment, and I'm like, okay, so that's not really smart. We call that reactive instead of proactive. And I just. One of my biggest tips for taxes are people. You know, I don't want people to pay taxes either, but if I. If I'm gonna make $50,000 more in profits, which I want to have, like, profits are good. People think it's bad because of taxes. And I say to them, listen, if I owe. Had made $50,000 more, if I could keep, you know, 30 of that in my pocket, I'd rather pay the 10 and keep, you know, 40, 30 or 40,000 in my pocket than to go buy a piece of equipment that I just might not need.

Hold on there, chief. Alicia, aren't they translating that into, I am keeping it? Like, you know, I bought that equipment, now that equipment's all mine. The government doesn't get a penny from me. It's the same as keeping my pocket. Don't they see it that way?

Well, there's better tax planning methods than that. Things such as an entity type. So I think small business owners need to take a look at what is their entity type. Are they an llc? A single member LLC who's paying self employment tax only when maybe they should elect for 25:53. I know you love these codes. These are very sexy.

No, I'm really getting turned on right now, dude.

I'm telling you, tonight, when you're, like, you know, snuggling up, you can just be like, hey, let's elect 2553. And then people get really pumped up about that.

Sends Mike over the edge.

It does when you say that. Brawling.

I just went to write down entity, and I wrote entity like titty.

Oh, my.

Anyway, yes, there's, you know, who needs to really spell? I mean, they don't spell when you're texting, sexting, or texting. They really just put, like, R U. Like the letter R. The letter U. So what's wrong with that?

Yeah, yeah, no, I hear you. Christine was laughing away. I had the microphone. I grab her microphone. She tries to get away from the microphone. So I'm chasing it to keep the laughter on. So. All right, so what. What's the. What's the best. What's the best date you ever had with me? No, what's the best entity to form for a small business? Dawn?

You know, and that's such a great question, because forming an entity, it's gonna. And of course, it's our favorite answer. If I could get a bell ring.

Oh, hold on one second. I got one for you. Oh, you wanted the bell ring, or.

How about you win?

There you go. Hey, you got every sound effect there is.

I love it. That's my favorite so far. Oh, my goodness.

Okay. Chewbacca. Yeah. All Right.

So, I mean, he's my boyfriend. He's a little too hairy for me, but. Well, that's a whole nother conversation. But the entity piece. So it's a great question because people ask it all the time. What entity should I start out as? Okay, well, let me ask you a question. Do you plan on making any money? So that'd be the first question I love to ask them.

Does everyone say yes to that?

I never say yes to that. Nobody ever says yes. Well, you know, the figure the first year. And so, you know, of course we want to put a budget together and put things, you know, some things in perspective. Because when you start a company, you have two and a half months to elect the 2553. Now, people who are losing money, of course, you know, sometimes takes a couple years to get going. You're not making any money. Why would you pay the extra money to do an S Corp, for instance, you got to pay for that extra tax return for all that extra, you know, extra entity filings. Different things, of course, depending on your state. Some states you just have to pay that excise tax just to be an entity, which in Connecticut it's every other year, 250. In some states, it's $550 a year. So there's some costs that are prohibitive to a brand new business. So maybe they should just be an llc. But at some point, point they may want to elect to a 2553, which is awesome. To an S Corp. And what's wonderful about that is you pay yourself on payroll. You have to have money. I know, I know, that's insane. I just said like the unspeakable. You actually have to have cash in order to be in an S corp because you have to pay yourself a reasonable salary. So you can't go out and make 200 grand and then go, oh, well, I didn't make any, you know, so that's ordinary. That's going to be taxed at ordinary income as an S corp. Well, let.

Me stop you right there for a second. I started an S corp. This is a few, quite a few years back, at the advice of someone. I had no income coming in at that point. That sounds like that's actually I can't even do that because I couldn't support a reasonable salary for myself.

Well, it's not illegal or it's not against the rules of the IRS or the regulations, can't be an S Corp. But I say there's just. So there's some additional tax benefits once you're profitable. And so you're taking a reasonable salary. If you're making $60,000, $75,000 and you have the cash, you can pay yourself 25 or 30,000 in a paycheck and pay only ordinary income tax on the profits after that. That's what the benefit is of being an S Corp. But if you're losing money, why do you want to set up payroll that costs you money? Why do you want to pay for an S Corp tax return instead of a schedule C? So there, there are certain reasons why we go through that process and every single year. The great thing is January 1st. It comes every year. I mean, it is like Christmas. Anyone who has a baby, by the way, in the first, you know, oh, I'm the first baby. I had a baby. First one of the year. Horrible tax planning and shame on you.

Oh, really?

So do not, do not get impregnated nine months before December is what you're saying.

Push that sucker out. You tell that doctor it's gonna. I'm gonna get $1,000 if you get that thing out of me.

Really? And you have till midnight December 31st to have your baby is what it boils down to.

Thousand dollar child tax credit. And you haven't paid a thing. And the thing hasn't even barely spoken. Mike Fries her cuff minutes. You give it to the nurses, you're set for two days.

Wow. I got you. I totally got you.

There's a lot of behind that. But yeah.

Breaking it down here on the property.

Really I appreciate. Yeah. The pregnancy tip. When. When you should have your baby. So. So all right, so if someone has an LLC right now, they should consider cutting over to an S corp if they're profitable and they have some money flowing to the company because there may be major tax advantage. Right.

That's right. Can save them self employment tax. Now there are some rules and you know, of course nobody gives a crap about the rules, but if they want to know, you know, certainly we can tell them. But January 1st. So if you're an established LLC and you're like, hey, I think I might be ready for something like that. You have from January 1st to March 15th to do these 2553 election. The sex. The sexual election. I mean the section 2553 election. And so thank you.

You just had to. Because it was so staged. It was.

That was.

Thanks, Mike.

It was so by struggling to find that button. Okay, hold it there, cracker boy. I'm not finished. All right, keep going.

I love it. So if though you're like, holy crap. I'm like making billions of bucks this year. It's July and I've missed the window. Like, March 15th is come and gone. And I want to escort. I want to become an S corp. You can actually just start a whole brand new entity, which is sometimes recommended and sometimes not to help you minimize your tax exposure. We're not saying avoid taxes. We're not saying do anything crazy or illegal. We're trying to minimize our tax exposure. I know, that's sexy too. You can use that too.

Yeah, no, you're throwing out the sexiest terms I've ever heard. So you want to reduce your tax exposure. So one option is to start a whole new company and S Corp and move everything over. Basically acquires your llc.

It basically, basically takes over. You'll finish, like, it'll be the last schedule c on your 2015 return. And you can change the name. It can become a pain a little bit. You may have to change tax ID numbers and have to deal with all that. But if you haven't done payroll or anything, who cares? So it's definitely beneficial though, if you're starting to, because maybe you get this big contract. You just nailed this really big contract for 150, $200,000, and you know you're going to be very profitable. It may be an opportunity for you to take that next step in business which allows you to do things like simple plans and company matching and other awesome things to put in your pocket. And that was my point, kind of in the beginning. People want to buy equipment, do all these other things. And I say, you know what? Let's minimize your tax exposure. Let's get yourself, I mean, sell small businesses. I mean, I tell my kids, I used to tell my kids, you're gonna find me dead in my chair. Like I'm gonna work for forever. Right?

Was that parenting tip, by the way?

It's great preparation. Even if it goes 50 years long. They, you know, 60, 70 years. They. They're always preparing, prepared again. Don't be scared. Be prepared. You walk in the door, mom's dead in the chair. She's always told you that with her.

Mad dog 2020 sitting there, the bottle knocked over, a pack of smokes laying on the floor.

IRS pamphlets.

Pamphlets, yeah, all over the place. Peanut butter and jelly sandwich, like in a Ding Dong.

I don't know why that's profit first. I could be drooling on my profit first book.

Exactly. She's wearing no clothes. Except a profit first book is caressing her bosom. Caressing like What a visual. So caressing. It's a caresser.

That's right.

Hey, tell me about expenses. So you go into a lot of companies, and you've been telling me over the years, like, people spend money frivolously, it seems. Where are businesses wasting money? How can they become more profitable by not spending that stuff?

You know, one of the things that we've had, this one client, specifically, who's just kicked. Can I get the bleep. Has kicked.

Yep. Hold on.

And taking names and taken names and because we have done forecasting, budgeting, and I'll tell you what, here's a great tip. When you actually look at your numbers and actually have an accounting system. I know that's also. Chris. Somebody give me the laugh. Give me some kind of a laugh here, like, I got you.

I got you.

Yeah, give it up. That sounds just like my clients, some of them. That was horrible. Don't tell my clients.

No, we won't. We won't.

They sound cute. That's what you mean? Cute and adorable. That's all.

Just want to pet them like a puppy.

You want to pet your. You want to pet your clients?

Oh, sometimes.

Oh, my God. I have one thing to say about you. Whoops. That's not. That's not it. That's not it. No, no, no, no. This is what I have to say.

I don't believe I seem such a.

Display of courage, skill, nerve, grace, stupidity.

Okay, so we've had this client who decided she was actually gonna look at her numbers and know what she was making and doing comparisons from month to month and seeing what she was actually spending her money on. Or I like to say investing, because I think that there's a. There's a fine line between spending money and investing money. And even if it's an expense, it can still be an investment. So I just want to straighten that out because it's been a. That's been a mess for people, but we pay attention, and I'm going to tell you an awesome story. Here's a great tip. Do your accounting, look at your numbers, and look at how much you're paying at bank service charges. So this client. Oh, yeah. Oh, like, really look at them. And so what I decided to do with her is she had been talking about how she really wanted to help somebody support her mom. And, you know, her mom is so awesome. She loves her mom, wants to help her. She wants to give her a thousand dollars a month so she can spend, you know, spend it on whatever she want. Take her to the spa, whatever Thousand dollars. And I said, I'll make a deal with you. You can give her $1,000 a month, but every time you have a bounce check, that's going to be deducted from your mother's money, which basically means you're stealing from your mother. So that's how we. That's. That's a good tip.

Nice.

I like that.

So make it real for them. So I tell my business owners, hey, you know, we take a look at their numbers and say, what are you really investing in? Or not. I'll look at an advertising line and I'll say, okay, what's the benefit of you advertising? Let's just say on Facebook. Let's say you do a whole bunch of Facebook ads. What is that? What. Tell me the clients you've gained or did you do you see as a restaurant an increase in your, you know, in your, in your people coming in and out? I forget what you call those people. The eaters, I suppose.

Wait, wait, do people BS you, though, like, oh, done that. That ad is making me so much money. I mean, don't they want to justify in their own head these expenses, even if they're not working?

Well, interestingly enough, especially. I'll just. Again, I'm using this restaurant example, but we do take a look at the numbers of plates that are coming in. And so how many tickets are they running through the systems? Because they have a point of sale system.

Right.

So you had 300 last month, and since you did that Facebook boost post of your. Of your restaurant last month you had 350, and this month you have 375, and it's only the 20th. So we're.

So you try to measure it in. You say, okay, you did this one thing, and we see more plates moving through the restaurant. You can now associate or link it to that.

Yeah. Because it's not always in sales. Not always in sales only, of course, depending on the industry.

Okay. Now when you make adjustments to your customers by saying, oh, do more of this or less of that, do you kind of do one thing at a time so that you don't get confused what cause and effect is?

Yeah, we really focus. We do some laser focusing on their books, and it's really, really just the biggest thing, if I could give any small business advice, is to actually track your information. And that's so easy to say. Don't commingle your funds. We just see it all the time and it skews their numbers. And they say to me, well, I don't understand. What do you mean, I made 60,000 last year. I don't have any money. I'm like, dude, look at your owner draw. Oh, you know. Did you remember that trip you took with your wife? Yeah. That's not travel expense, honey. And so I love that you call.

Your clients honey, honey.

Yeah. Sometimes you gotta cuddle with them every once in a while, but we find that that's the key. You've got to stay, and you have to have good books. They have to be accurate. And I'm just gonna say this is gonna be beep balls crazy, but I'll do my own sound effects if you guys.

I know. I love it. I love it. It's a good soundboard you got.

Well, wait a minute. I got one right here. Ready? Okay, so.

Whoa. Nice.

That's a little teacher's bell. I had to buy myself one. Those are 20 bucks. Not really a good amount.

20 bucks. Fun. Yeah.

Yeah. Sometimes there's good things there. I like the quarter court I put in my. In my yard. But don't worry about that basketball court. That's really helpful.

OCD radio. Well, glad you're joining us.

It's insane, I know. Anyway, go ahead, ask me another question. I've already beat that horse.

Yeah, yeah. Well, you told us. How do you cut expenses? Well, I have a basketball court and a ring bell. All right, so the next question is, when you cut costs, how do you know that it's working? I mean, how do you know you haven't compromised your business?

So I love looking at margins. So looking at profit margins, not just the actual dollar signs, but the margin. So if I'm seeing someone cutting advertising costs and their profit margin, of course, which is your gross income minus your cost of goods sold, if I'm seeing that margin not moving up or down, I'm not seeing that needle, you know, go way out of control. Then I can see that there's some end result based on some. And of course, I use advertising as an example, but maybe they hired another employee, so maybe they brought another staff on, and they're seeing that, you know, initially might take a little bit to see that needle of profitability go up or that gross sales are increasing. But we base our analysis on decisions we made the prior month. And when we look at that prior month, when the financials come through, we say, okay, we hired another person. We know our payroll went up, but did our gross sales go up? Did they go down? If they went down, is it because they're not catching on? Do they need more time? And again, every industry is different. Are you hiring a salesperson or are you hiring an administrative person? We wouldn't expect an administrative person to increase gross sales. So every decision that's made is analyzed as we move forward with the numbers. And you know, things take time. It doesn't happen in one month. Might take three or four or six months.

So how do you, how do you know how much time to take to. As you make these changes to your business, you're trying to cut costs, you're trying to do more of what's working. How much time is enough time to know that what you're doing is working?

You know, I go by the three month rule typically on a quarterly basis. If you're seeing that you've hired a staff and you're like, okay, I know I'm going to be able to increase my billable time or you know, I'm going to, I know I'm going to be able to value bill 10 more clients if I bring on this person, you know, whether it's a consulting gig or whatever, I'm speaking from just any industry that you know that brings someone in like that. But if you're at a three month mark and you're not seeing a direct increase in sales productivity, then I think that, I think you might have to make a shift either in decision of the person itself or the position you've put them in, or the clients that you've acquired or the jobs you're choosing. But I think a three month rule is pretty reasonable.

Yeah, no, I like that too because it represents a full quarter, 90 days. Yeah. So I like that. And that'll bring you for the full cycle of collections usually and billing usually. Many people bill once a month or twice a month. So you get through, through a few cycles of that. Tell me about bad clients. I know you've had some really bad clients you've been lamenting to me. I don't want to share their names on the radio. It's horrible experiences people don't appreciate when you approach them covered with just profit first books and nothing else.

We'll share their names on the website.

Yeah, they'll all be listed. So what do you do when you have a bad client?

I mean really. But anyway, go ahead.

What do you do when you have a bad client? Like how do you handle them? You know, you per se, but your clients. Bad clients.

I'll just say that we have actually been pumpkin planning. That's right, that's right, pumpkin planning. And we have been trying to minimize our crappy client exposure that's what we'll call it. Our tough clients. Right. So. So there gets to be a point where, as you know, in the Pumpkin Plan, if people have not read that book, that would make you foolish, especially with the question. Because that Pumpkin Plan book literally will tell you exactly what to do with bad clients. But I'm gonna tell you from a mental perspective, the freedom you will attain when you start to weed them out. And I'll tell you what, if someone is emailing you and you're going, and you're like, all of a sudden ready to throw up, take one more swig of the MD 2020. You know, take one more sip, and if you take that sip and you don't feel relief, then that that person's gotta go. And sometimes it's an actually really good paying client. Sometimes it's a client that you're actually making some pretty good money on, but it's dragging you. Your staff. What kind of. Is it affecting your culture? Which I love about Matt Risell, by the way, with T sheets. That guy talks about culture. And he. And Jared, of course, Jared from Fundera, which I can publicly apologize for breaking his phone at Scaling Nights. That's a whole nother problem.

We heard about that.

Yeah.

Between. Well, I'm not gonna say between what. But you did. Between something.

Well, he wouldn't give me his cell phone number, so I just. I just said, well, then you're not gonna have a phone and slam that thing.

He snapped it.

Snapped it in half.

That's good.

You don't f. With Don Brolin.

Oh, don't do it. I'm an animal. I've got Alone.

I was Chris, as an aside. We met up, dawn and I, at Scaling New Heights, an event for bookkeepers and accountants. And we're out there, and I had. They have, like, a buffet dinner, and I have, like, this huge tray. It's really good stuff, salmon and stuff like this. And Dawn's like, hey, can I. Can I sit with you for dinner and we'll share a table? I said, oh, I'm actually sitting with some other people. Why don't you catch up later? She goes, well, if you're not eating with me, you're eating by yourself. I mean, not eating with anyone. And she grabbed my plate, slammed it down, stepped on it, and then I was like, what the hell? She took my phone, broke in half, and left.

Wow.

True story.

That is not true.

I don't believe that.

I don't have an answer. I just don't know. It's not part of my. But my vocabulary. I mean, I can say no, but no one else can.

Right? Exactly. Exactly.

Right. So that's fair. So the great thing about the. I'll call it pumpkin patching the clients. And Matt Rissel says it wonderfully about your company culture, and it's something that I'm learning. So. So to embrace that conversation that I've had with Matt and that he does such a great job of telling other people, is that if the clients may not fit into your culture, it's not just your staff or your team or whatever. We call people teams. We don't call employees. I think that that's degrading. We call them team members. I really believe that if your clients are not fitting your culture, of course, in a restaurant, I don't care. Come eat. Just make sure you tip well and get out. You don't have to be really part of my culture. But if you're, you know, if you're doing work, like working with clients, consulting or anything like that, if they're really just not feeding into your culture and what your belief system is, and they're just. It's time to pumpkin patch them. I don't know. I don't know if you have a sound for that. A pumpkin patch sound.

I do. Hold on one second. Let me look at my list here. Maybe it's this one. Sweet mother of God.

What is the hold up? So, yeah.

So you know, what I'm hearing is there's certain client vendor relationships where the client has to put an effort in for the success of relationship here. Profit first professionals. We have members. We can't do all the work for our members. They have to do the work too. Where you're on the same team, where you're. Same thing as you, Dawn. You're going with clients and you're helping them with their numbers. They got to be making an effort to make sure that the numbers are being entered correctly. And they gotta be participative. When the client is participative, they gotta be in link, in sync with your culture.

Link and sink. That's hot.

Yeah, I was trying to think link, sync and drink. Mad Dog. Yeah.

Oh, perfect.

Do they link sink and drink? Mad Dog 2020. Because then they're in fit.

I used to.

You're on the brink.

You could be on the brink of a sink.

Otherwise they stink. Unless they like pink because she's kind of awesome. I don't know. Yeah, so. So do you do that, Dawn? Do you vet out customers based upon culture? Do they got to wear like zebra outfits for you to be happy with.

Them, you know, I love that. That's so funny.

Do you have the shirt I'm talking about that you wear?

Of course I do. See, you remember, you remember the zebra shirt? Everyone loves it.

I have a picture of it above my bed. The picture of you wearing above my bed.

Poster size on the ceiling, I would hope.

Of course it's on the ceiling. I wake up and fall asleep to it.

That's exactly correct.

Right next to a virgin copy of a form 2553.

I love that. 2553. So sexy. You know, we do. We've actually in the last month or so cropped out. Get it cropped out.

Yeah.

Three or four non culture driven clients because they just. It was. There's a sense of ownership. Listen, when you own your business, you own your business. I'm not going to ask you to do anything I wouldn't be willing to do for me and my business. Understanding that being in business is not for the weary. And so we are pretty firm about that and we really encourage them. Listen, in our engagement letter, by the way, is like six or seven pages long. And if they don't want to sign it, then, then they're just not going to be clients. But in that tells them what their responsibilities are. And part of their responsibility is that it's their business. It's not my business, but I'm going to. I'll probably work some. In some cases we end up working harder than them. And that's when we know, okay, this might be. We might have to patch this one out. You know what I mean? Do you like that? Patch them out.

I love it, I love it, I love it.

You know, because you should never, as a consultant ever feel that it's just your responsibility when something goes wrong. If you've done your job, you've given them the numbers, you've given them the tools and the resources. Pumpkin patch profits. I mean, come on, people, you've got the resources at your fingertips. You've got. That's, that's probably. I could have. That's inappropriate. I probably shouldn't have called that out. You can have that at your fingertips, but you have the tools that it takes. So that's one of the things for me, like I just don't, don't come crying to me. Because this girl, she works 247 and she works in her business and on her business and I'm learning more to work on my business. And it takes time. But you better be committed if you think I'M gonna do it for you. It ain't gonna happen.

Right? Right. No, I love that. That you. You're filtering out your clients before you bring them on board so you don't have to do that firing of clients that you're. You're getting rid of the bad fits before you even bring them on board. Oh, and by the way, dude, it's the pumpkin plan, so don't do the patch. Right. Do you have a tattoo or something and put on your forearm that says mike's book is the pumpkin plan?

I'm staring at a simple strategy to grow a remarkable business in any field. Yeah, yeah, I'm staring at it.

Yeah. And you're calling pumpkin patch.

She's going beyond the idea of going into the concept.

No, she called it the pumpkin patch. I'm done with this interview. It's been horrible. Here, take this one.

Oh, maybe you should change the name of the book.

Maybe you should change your attitude. What do you think about that?

You might have missed it. You might have missed it. I'm just kidding.

No, you know what? No, the only. Oh, no, we were in a bit right now. You didn't have to say, just kidding. You keep going. We were about to get in the first fight ever.

Oh, I'm not kidding. You know, I don't have any of that.

No, I was kidding.

Dawn, please.

I was kidding, okay? I was.

You want me to hold on just a second? Ready for this one? Oh, geez.

I was kidding when I invited you on to be a guest.

Holy crap. I was kidding about all the advice I gave you.

They say there's one thing that you don't do. There's two things you don't do. One of them is this. It's like parking your car in certain neighborhoods in the Bronx. You just don't do it. And the second thing is inviting Dawn Brolin on your podcast. You just don't do it. You just don't do it. Don, it's been an absolute joy having you on here. If people are crazy enough to want to engage your services, where do they go and find you?

They should go to powerfulaccounting.com and listen, I'll tell you what. We have a great time, but we mean business, so everyone needs to be ready. Don't call me unless you're serious.

Love it.

Yeah. And then, you know, dawn is so much fun to joke around with, but there's a reason she's three years running. The 25 most powerful women in accounting. There's a reason I was on MSNBC doing a makeover segment. She was the expert. Remember that?

We were in the basement together.

Oh. Oh, great scene. We were in the basement of this bed and breakfast that night. We had to go through all their. Their books. And then what we did, we did a reenactment from that. What was that movie?

Oh, Bridesmaids.

Bridesmaids. The. The. The scene on the airplane.

Yeah, yeah.

So we grabbed the camera crew and we said, oh, the whole crew comes over, like, what? And like, we want to reenact a scene here. So they filmed it at msnbc, Never to be shown again.

Never be shown. And you know what, Christina? Best thing ever is just three seconds. No one can get there in three seconds. You're setting me up for failure. One of the best, best parts of that. Oh, I knew it. I knew it.

It was awesome. Stove, dawn, pleasure having you on. We. We gotta get out of here. You. You guys. So, Don, pleasure having you on and we hope to have you back real soon.

Thank you for being awesome and I'm really enjoying. This was a blast. And I'll see you next time because you're gonna invite me again.

I will invite you again. See you later.

Thank you, guys.

Dude, she is a gas. I love that woman. I love her.

Crazy. Love it.

What'd you learn, Chris?

You know, she is. Well, before we share what we learned.

Yeah.

We need to talk about our corporate partners.

Oh, yeah. Bam, boom. T Sheets. Oh, I still want the music. T Sheets. She plugged. Matt Risfel ready. He's the owner of T Sheets. Great culture, great software. It's no surprise that great software comes from a great business. And if you need to track your time. Time tracking software, try out T Sheets.

Was Matt Rissel in that basement as well, or.

No, he was. He was. He was the fan of the camera crew. Actually, the business isn't doing so well, so he's actually part time doing cameras. Yeah. So call them and tell them that Profit first profession, the Profit first podcast, sent you over and they'll give you a special. Nothing. Yeah, they'll give you Fundera. She mentioned Fundera also. I believe that's Jared over there. He was on our show a while back. Fundera is a funding source if you need money. Actually, Don was very good at differentiating expenses and investments today. If you need to make an investment, put money in. That'll make money. Fundera can be your source. And then nextiva. She didn't mention their name because she's. They're not sponsoring her. They're sponsoring us. Yeah, Baby, yeah, baby. Nextiva is a voiceover IP phone system. If you want a very sophisticated phone system at a very inexpensive small business price, nextiva is the source for that.

With crazy ridiculous features as well, which we've talked about on previous shows.

Oh my God. Yeah. Well, actually while we were recording, I don't know if you heard the phone ringing. It was ringing. There's a button. You can send the person a note, it rejects them and it sends them to a voicemail of your choosing. So I could say, oh, we're recording a podcast now. Sorry, I can't answer functions like that.

Wow.

Pretty cool. But dude, what'd you learn today?

Yeah, she is one resolved woman, I'll tell you that. And by resolved, I mean she knows what she's doing with her business. She knows what kind of clients she wants. And that's it. It's very clear. You know, when you know, clarity is power. I had a business coach once who said if you're ever in an argument with someone, the person who is more clear will win. And I really like that. And she's very clear. Switching from an LLC to an S Corp mid year if it's. If it's called for. Geez. And then with expenses. She was talking about looking at what your marketing is actually bringing you then to judge if it's worth it or not.

I mean, reevaluate your business structure. It's amazing how many businesses are set up in the beginning just because it was a random choice. Literally said I'll do a LLC or sole proprietorship and then it's forgotten. Right. Revisit it. Talk with your profit first professional and they'll tell you what you should have as a structure. What'd you learn today, Christina?

I like the three month rule. If you're not seeing any type of direct increase within a quarter on a quarterly basis, something in some needs to be shift.

Yeah, I like that.

Something needs to happen.

I like that. I like that. They put a very time specific framework. Yeah.

Red flag.

Yeah. S Corp, you guys said, damn it. Oh, here's one that's new. Business is a recipe is what I wrote down. This wasn't her words, but basically entrepreneurs are just trying to do. Just trying to do. Trying to do. No, it's a recipe. You have these different elements. Turn one dial or shift one thing in your recipe and then see the flavor of the business. Then go back, set it where it was if it didn't have any effect and change something else. She was very clear about just changing one thing at A time and seeing the effect. It's this cause and effect relationship. So I wrote, business is a recipe.

Reactive versus proactive. I think she also said, too.

That's right. That's exactly right, dude. Chris, Christine's got some killer software, by the way, you should be checking out. Oh, you wanted to share one or two?

I do. It's called Google Translate. It is a picture system. You literally download the app on your phone. You hold the camera up to any type of sign if you're in a different country, perhaps. And it literally changes into the other language as you are looking at it. So you could pronounce it on the spot. I was fascinated when I saw this.

It's like space age, isn't it?

It's amazing.

It is amazing, dude. Google Translate. It's the newest edition. There's old editions. Yeah. So I was in Germany. Christine turns me on this thing. I look at a sign, and it's a menu.

Yeah.

Of what the specials are. And I'm like, I don't. What is this stuff? Wiener schnitzel. Like, this must be the worst, like. Like, sausage on the planet.

And.

And it's like. No, it's veal. It was like breaded veal. And I just pointed to it, and it translates all the ingredients. Really cool. Not 100% accurate all the time. So sometimes it says some weird stuff, but very helpful if you're navigating around. And if. Just download it and translate anything that's in English to a different language, it'll blow your mind, too, if you want to play around with it.

Blow your mind.

Blow your mind.

Yes.

Yeah. Christina was like, wow.

I was fascinated.

Yeah. It's fascinating, isn't it?

Yeah, I'm going to try that.

All right, dude, we got to rock and roll.

Hey, should we see if dawn wants to give us her Chewbacca impersonation?

Oh, Jesus.

Dawn.

Still there, Don, you still there, Don?

Of course. Are you kidding me?

All right, Don, I want you to pick a number between one and four.

I always like to be number one.

Oh, then you're up first. So it's going to be you, then Chris and Christina, and then me. Best Chewbacca invitation right in a row. So you go first, then Chris, right after, then Christina, then me.

All right, you sick. A three, two, one. Me at least three.

What?

Two, three, two, one.

Go.

Chris, you're up.

Oh, I'm up.

Christina, go, go. And there's the real one. All right, dude. Wow.

Thanks, everybody.

A vein popped on her head on that one.

Skype. Blinked.

When she did it, I almost threw up. The whole Skype network fell down and collapsed.

Thanks for listening, everybody. Check us out on itunes and Stitcher and Tunein Radio and our website, profitfirstpodcast.com again, I'm Chris Kern. I'm the founder of Fractal Recording. And Mike, if you're professionals.

Yeah, and by the way, if you're an author like I am, of books, you've got to talk with Chris. Get on his show, get your own podcast going.

There you go, May.

Oh, I see a gun. Is dawn still there doing gun noises?

Oh, yes.

Are you stapling stuff, Dawn?

BB's are flying everywhere.

Oh, she's shooting. So wait, wait, wait, wait, wait, wait. Oh, way early, way early, way early. So in Profit First Professionals, we are a membership organization. Dawn's not one yet. Dawn. We're a membership organ of accountants and bookkeepers. We're a membership organization of accountants and bookkeepers throughout the globe. And what we do is we help businesses be more profitable. These are the most select, preeminent accountants and bookkeepers that are out there already helping your business. But they also can implement profitability first in your business. So come to our website and check it out. Profit First Professionals. Dot com.

That's it. Rock on. Thanks, Mike. Thanks, Christina.

Dude, thank you.

Pleasure.

Peace.

Bye.

Oh, you beeped it.

We beat Chewbacca.

Get your pets. Spader. Spader. Spader. Neutered. Spaded. Neutered. Chewbacca. That's a tongue twister right there. I'm brawling.

You're gonna probably want to edit a whole ton of this.

That's how I wanted to start. This will be our wildest episode ever.

Bring it on, my brother.

Bring it.

I wish we could make out through the computer, but we're going to. I met with Chris, not you.

No, I know when. That's why I said we are, because I'm the guy filming it.

I love it.

Mike, she's killing you at your own game already, dude.

I know, I know. Bring the challenge.

She answers the phone, she goes, dude. I'm like. She's like, oh. Oh. I was like, well, that's awkward still.

Dude, that's a tongue twister right there.

Oh, that's sexy, Barry.

Hey, you like that? It's Barry. That's a tongue twister right there.

Oh, I like that. Can that be my wake up call?

Yeah, it can be. Nah, it ain't gonna happen. Oh, I want that one, dude. Chris, you gotta give me that.

I asked Barry what he thought of our show. Mike. This is what he said is a mess.

Oh, dude, you got to give me some of those. Are you still using them for the other show?

We're looking to rekindle that other show. Yeah.

Okay.

Oh, my God.

Nah, that ain't going to happen.

I'm going to be addicted to this.

No way.

Barry heard the last episode.

He said, that's frightening.

Oh, wait till he hears this one. He's going to say, odin's raven.

I love it.

I love that. I don't even know what that means.

That's from Ackerman.

Yeah. Yeah. It's just funny.

This is great.

I feel safer already. Okay. All right.

Okay.