Episode 48: Recruiting and Profitability with Matt Schwartz and Donna Leyens

Should we play a Black Sabbath song to get us in the mood or what?

Yeah, War Pigs. No, throw in our intro. Let's do this, man.

All right. You're listening to the Prophet first podcast.

One of the best episodes you'll ever hear. Episode 48. Yes.

And I nailed it.

Oh, gosh, we got the timing down.

Wow. Remember the episode we started in Spanish?

I know. That was a great episode.

That was funny. That was awesome. Welcome, everyone. Profit first, podc. We're a podcast on iTunes and Stitcher and profitfirstpodcast.com we have a lot of fun. And I'm Chris Curran and I'm the founder of Fractal Recording.

And I'm Mike Michalowicz, the author of Profit First. And when Chris and I sat down and said, I gotta get. We gotta get a podcast going, we said, let's make one that is just a lot of fun. High energy, but deep dives into stuff that no one talks about, which is profit. No one talks about profit. Today's episode's gonna blow your mind away. Matt Schwartz is joining us. He's gonna talk about hiring transformational employees, Employees that come in and can change your business. This is the talent that to get your business to the next level you need, and we'll make your business more profitable. And in studio with us back for a second week is Donna Lyons. Welcome back, Donna.

Thank you. My pleasure.

Oh, my God, Donna.

Aw, you have a baby with you. Aww.

What have you been up to, by the way, Chris?

You know, I. It's funny.

I've.

For the last two weeks, I've been staying in the house I grew up in, but I've been. I've been here all by myself for two weeks. And it's just. It's almost like a mind trip. After 20 years being here and being a completely different person after 20 years and yet sleeping in the same room. It's just weird.

In your bed with a shag carpet. You get up at like 11:30, you just naturally yell, ma with my. I want my breakfast. Ma.

With my, like, retainer still on the nightstand, I try to put it in my mouth.

Exactly. Oh, my God, that's horrible.

What have you been up to?

I've been the guy filming everything you're doing in your house. Now I'm doing, like, vacations in the reverse way. Most people go on vacation when summer comes around. I worked through the entire summer. I did take a trip to Europe, but it was business oriented. So we're going down to the beach in mid September, which Right after we're broadcasting this, which is kind of weird to go to Long beach island when no one's down there, but that's what we're doing.

That's cool.

Yeah, I'm excited about that.

Good for you. So I just want to mention too, our podcast, I mentioned we're available as a podcast on itunes and Stitcher and Tune In Radio. But this is episode 48. We've had so many great episodes. You can check out all of our backlog on an archives on Profit first podcast dot com. So I just want to make sure people know that because some people like to just actually binge listen. Like, like crazy people.

Yeah, you should binge listen and you can then binge comment. And if. If you really want to dig deep into the archives, look at the very. I think it was the very first episode. There was a guy who just. The first was a nasty. Graham was the first comment we got. And it was kind of funny. I don't know if you remember that. That's how we started.

Yeah, we got a. We got a feedback from a Mr. Glasscock.

Yeah, his name was Glasscock, Harry Glasscock. And he's like, this is the worst show.

Oh, he hated our show. I wonder where he is now.

Anyway, I think he's an avid listener. He's changed. He likes the show so much he's changed his name and now just listens under a different name.

Hi, Donna.

Dude, I want to thank our sponsors and then I want to get our guest on right away, please. We have four sponsors have stepped up because they want exposure to the listeners, to you. And they are nextiva phone system provider Fundera, a funding source, Fundbox, a cool factoring new version of factoring company. And tsheets, a time tracking software company. And we'll talk about them a little later. Let me tell you about our first guest. Yes, his name is Matt Schwartz. So I am speaking just kind of a flashback here. I'm speaking at EO Accelerator. That's the entrepreneurs organization Accelerator. This is a group of entrepreneurs are looking to grow their business to the first kind of platform of growth, which is a million dollars in revenue. And then kind of the game starts changing when it hits the million dollars in revenue. So these are businesses trying to grow to that stage. I'm explaining profit first, this group. And all of a sudden Matt basically stands up and says, stop the presentation because it totally sucks. I mean, it totally sucks. Mike. Now, he didn't say that. He goes, I read profit first. I want to tell you how it's impacted my business. And he went on, first of all, I'm quivering at first, like, oh no, here we go. He goes on for about a minute or two just sharing how this. How his business has massively changed because of Profit First. So what I want to do in this interview is I want to ask Matt some questions about his business and how it impacts profitability. But I thought also he can share the experience of how he exploited the techniques in Profit first to make his business profitable. So it's kind of a dual approach with little further ado and the fans go crazy that we. Oh. That we invite on weird music. There it is.

Matt, welcome to the show.

Thanks, guys. Thanks for having me.

Wow. Welcome to the game show. Matt, tell us a little bit about your executive search firm, mjs.

Absolutely. So MJS Executive Search is a firm that I started a little over 12 years ago. We are a boutique retained executive search firm that specializes in what we like to call transformational talent. So we get hired by large companies, Fortune 500, all the way down to entrepreneurial startups on a national basis. And they hire us to focus on very specific roles, roles that we call transformational talent. And the way we define that is either roles that have never existed before within our client's business skill sets that are not organic to the company or the industry, or roles that just need a significant upgrade due to an infusion of digital marketing or technology. And whether it's a large financial services company like a Fidelity American Express or New York Life to a packaged goods company like a PepsiCo or a Henkel corporation, they all are. The world has changed so quickly. They're all in need of this talent that has not existed in their organization prior. So we again work on a national basis. We're a small team and have been just killing it for the last few years.

Oh, I love hearing killing it. But yeah, tell me about when, when I'm on the other side, I'm hiring an employee. Your firm is helping me out. One of the most common expenses that a company has and the highest expense is, is talent, is people. A lot of folks say outsource it. Don't, don't hire someone. Use elance. Especially when it comes to talent that you're talking about these people that are specialists and doesn't fit into necessarily the daily grind of what the company does. Why is it prudent financially, profitably to hire someone through an organization like yours?

Yeah, companies are really looking for a competitive advantage. We'll take one example in the function of media, media used to be, let's buy a bunch of television ads and spend more money than everyone else and get the most impact. Now, very few of us either, you know, if we do watch tv, we don't watch ads. We fast forward through them. We spend more time online or on our mobile devices. So how do you optimize that? You know, hundreds of, you know, millions of dollars in spend to make sure you're reaching more micro targeted audiences more effectively. You know, so they would go to an organization like us and say, hey, please find us someone who has the most up to date skill set in the marketplace so we can reach more customers, drive more business and be more successful or more profitable in terms.

Yeah, yeah, yeah. Now do you have a way to measure that? Like if you bring on so and so, this is what that talent is going to cost you as an organization. But here's the return that you can expect. I mean, is there a way of measuring return on people?

Yeah, so I don't know if organizations have a measure like that specifically. What they do have though, is the time to hire. And the ability to have access to this talent quickly and effectively is worth the kinds of fees that an organization like mine charges, which is, you know, typically a third of the first year's total compensation. So when you're talking about very senior executives, this is a costly undertaking. So when they hire a search firm, they're relying on us to not only really know our stuff and have a true point of view about the area in which we're hiring, but also how quickly can we get to that talent and get those people to the table so they can hire and start maximizing their efforts? So in the media case, maximizing their media spend as soon as possible, do.

You maintain a talent pool? How can you get people faster than the alternative ways?

Yeah, so in the world of LinkedIn, for example, everybody kind of has the same tools. It's the methodology in which you go out and reach out to these people. So yes, you know, we do have relationships, but everything we do for our clients is a complete custom job. There's always nuances, nuances to the company, to their specific needs and how cutting edge they are as an organization that's going to make a difference of them attracting an A player, a B player or a C player. So we need to, again, we have a lot of the same resources, but it's how we approach them and how we get their attention on behalf of this company utilizing something we call our OST or our one sexy thing that's going to get their attention and return our call or return our email or however we're reaching out to them directly.

I instantly flexed when you said one sexy thing. I couldn't help myself. You know, a lot of folks listening in, including myself. I have small businesses. We got five folks that work here in our shop. We, we want the best talent. And when we hire one person that's just 20% of the company, we're making big bets, a big impact on the business. But we can't afford MJs. I mean, we can. How do I, how do I. You have tips or shortcuts to find the best talent when maybe you don't even have the means to use an organization like yours.

Absolutely. So, you know, I encourage everyone to, you know, invest. If you plan on hiring a significant amount of people, invest in LinkedIn Recruiter for your business. It's a way to be able to really micro target and do a lot of advanced searching and find the people that you'd be most attracted to. If you're hiring more junior employees, there's tools like Hireology or the Resumator, for example, which allows you to put out postings on multiple sites at once, but then also create different hurdles or tests, whether that's a questionnaire that people have to answer or some sort of profile assessment which would allow you to be able to narrow down who the best qualified candidates are more quickly and only spend your time with the most highly valued candidates.

That's a great tip. You know, one little trick I did do very successfully is when I run an ad and literally run them on Craigslist. Nowadays this is for entry level talent, but what we do is we write these very long ads and at the bottom we say verbatim, if you are actually reading this ad in its entirety and are interested in the position, you must include in your email response these words in the subject line. And it may simply be I read the entire ad is the subject title. But now when these resumes come pouring in, you know, 90% of them are just people that are doing blanket responses. It's not in the title. We don't even look at them. They didn't read the ad.

Right.

Do you have other suggestions like that?

Again, we're focused at the senior most levels. So most of the people, 99% of the people we recruit on behalf of our clients are people that are happy in their roles, amazing at what they do, and we come to them with an opportunity they weren't thinking about, that's going to advance their career and get them excited. To make a move. So, you know, not something I really get involved in from a more junior level. But I agree with you on the Craigslist front. I've done the same, especially hiring assistants and things, and it's been great. It's been very effective.

Yeah, I found gainfully employed people. The recruiting process is radically different than traditional advertising. So, Matt, kind of shifting gears here again. You were so kind to have the courage to stand up and explain the financial challenges your business faced. You found profit first, and you implemented it. Would you mind just sharing the story a little bit of what you went through and what you found?

100%. 100%. So I started this business almost 13 years ago with a phone, a desk, and a compute come from one of the largest global search firms in the world, and said, I think I can do this on my own and maybe even do it differently. And took that leap of faith that a lot of entrepreneurs do, but started out doing the books myself and had an accountant who was a family friend. And as the business grew, one logo at a time, things got a lot more complicated. But what I found over the years is that my bookkeeper was about keeping my books straight and keeping my accountant happy, making sure they had what they needed. The accountant was about taxes. But, you know, no one was really guiding me as far as reserves and cash reserves and profit. So, you know, I would find myself in the, you know, I don't know, year three or so when things really started humming along and I started to have some real revenue and make some money. On April 14, I would get that dreaded call telling me I owed, you know, tens of thousands of dollars that I had to scrape up from every corner of my life to cover taxes that I wasn't clear on going in. And it was embarrassing. It was painful. I felt like a failure and completely disorganized and continually kind of not had those issues because I made sure taxes were always straight, but had a lot of pain and uncertainty for many, many years before finding profit first to the point of, you know, hiring lots of people, not really being clear, you know, what I could afford and what I couldn't afford, and stressing over each payroll, you know, bonusing people out with no and giving raises without, you know, yes, rhyme or reason. But it was more of how I felt versus the reality of the cash in my business. Moved into a nice office with lots of great office furniture, all these sor of things that, again, didn't have any barometers to measure what the health and the status of my Business was other than the fact that my income was going up most years.

May I ask what the driving logic was behind that? Hire more people, bonus them out, nice space.

Yeah. So basically I thought, hey, if I have more people, the clients will be maybe more interested and more impressed with the size and stuff, scale of who we were. Second of all, the. I thought, you know, some of these people would be able to drive some revenue. So, you know, it doesn't take a lot for them to pay for themselves very quickly. And I think, you know, that the three people that we had that were potential revenue drivers, out of those three, we had like three meetings between the three of them, you know, as far as real new business meetings, they were looking for me to drive all the revenue and pass it along to them, you know, and that wasn't going to work out. So. And then there was more, you know, overhead as far as execution expenses as well, that, you know, again, I didn't need. So eventually, as things got to get really, really tight and there was some debt in the business, I said, you know what? I have to clean house, and I have to have the faith that we're going to be able to be smaller, but get deeper within our clients by just doing really great work and they'll keep coming back. And that was kind of the turning point where I have very limited staff now. The people that are involved in the business are all essential to the business. I outsource whenever possible, including a virtual assistant and bookkeeping support, which I have a profit first bookkeeper, which I'll talk about in a minute. And all of those things let me keep focused on what my coach calls kind of my genius work, which is I'm here to sell, manage and strategize with clients at the highest level and right now do a majority of the interviewing, if not all the interviewing for the firm. So the clients continually get the highest quality for every project that we do.

But I think you stuck in the words you said the business, you were making these decisions, hiring these people, getting a nice office space. But I think I heard you say your income was growing. I mean, were you making more money during that period?

At one point I was, and then the reverse happened. All of a sudden, I hit the highest revenue number that I had ever hit, and I made far less than what I made when there were, you know, a handful of people in the business. Right. So. Yes. So can you give us a sense of what that.

What that revenue number was when. When you weren't making money?

Yeah, 1.2 million isn't that funny, Donna?

You.

Yeah, and it's pretty common, too.

Yeah, I didn't know the number is, but I suspect it was gonna be a big number. That's a lot of money coming into the business. That's a lot of money flowing out. So. Okay, so.

And I made more money at 700,000 in revenue than I did at 1.2 million.

Half the way you made more money. So was that the moment you said, I got a change things? How did you discover profit first?

So. So, well, two things. There was one step in between there. I thought I needed a CFO to give me all sorts of fancy reporting, and so I got an outsourced cfo. And. And he made things more complicated than they needed to be. The. The only thing he did which really set me up well for profit first, which was we got my. Got our expenses really locked down. So, you know, the expense portion and the overhead of my business was really, really tight. So I felt. And then all of a sudden, profit first was introduced, and, like, the whole. The heavens opened up, basically.

Oh, I love hearing that.

Yeah.

If you have all your expenses in control, doesn't that mean you're profitable or what else? What was the other step?

Okay, so can you imagine? I have my expenses under control, but for some reason, because some of my people are highly more highly compensated than others, I'm afraid to pay myself. I want to make sure I have enough for taxes. I have enough to bonus them out quarterly. I have. You know, and so I have no sense of what I should be paying myself and what I should be making. All of a sudden, I get the profit first formula. And it's incredible. You know, I've got my buckets. I know where the money's going. I see it visually. And not only do I. And then after a few months with my profit first bookkeeper, she was able to say, whoa, whoa, wait a second. You know, the great news is you are highly profitable. You don't have a lot of expenses in your business. That just means you're gonna have to pay more taxes and you're making a lot more money. So we immediately adjusted the tax bucket up to double, you know, from 15% to 30%. So I don't need as much operating expense in my business day to day, but I definitely need more taxes. But you know what I just paid my quarterly tax on for September 15th, and I already have the money put aside for my January taxes. Well, I can sleep a lot better at night knowing that that money's sitting there and I'm not touching it. Opposed to what it was like before, seeing a huge amount of money in my one account and doing that bank balance accounting thing that you talk about in the book.

Yeah, yeah. It's funny. As profit first rolls out and I hear more and more stories, I've come to realize that there's a lot of different kind of emotional associations with money. And one thing is around taxes. I'm curious, Matt. When it comes to the taxes, when you had to scramble and pay them, I assume that amount due was less than what you're paying now in taxes from what you just shared, but you're prepared for it if it's true. If you're paying more in taxes now because you're required to by law, but if you're paying more in taxes now but the relationships change that you're paying in advance. How's your emotion associated with taxes? What's the feeling that you're experiencing?

Yeah, I mean, I'm happy to pay them. You know, I know I have to pay them. I can tell you, though, the bigger issue was the temptation. Seeing, you know, well over, you know, $100,000 sitting in my tax bucket, thinking, oh, there's no way my taxes are going to be that much, and then getting numbers from the accountant and being, whoa, every penny is going to be needed. I rather have a little bit of a surplus than go buy something new. I need not to touch it. So if I could say my biggest issue right now and one of the next things I need to do from a profit first standpoint, is I need to get some of those accounts out of my main view so I don't have any of that temptation.

Yeah. And that's funny. That is the solution. Right? So as I was writing the book, I'm following the process on my own guinea pig. And I was doing the exact same thing. I had the taxes piling up. And I'm the guy who researched this study, this. I know this number's accurate. I'm like, this can't be. I don't owe that much in taxes. I'll just borrow that to go on vacation. And then there's not enough money. So, yeah, removing temptation is the big thing. If you move it to a bank where you can't see the account, you don't even think about it. And what about you're now allocating money to an owner's pay account, you're reserving money for yourself. How is that different than how you were doing in the past emotionally and feelings wise?

Yeah. So the Average person in my industry makes between 30 to 50% of everything that they sell. That's kind of the margin that people earn. And I was probably before starting profit first, somewhere in the neighborhood of, you know, 35%. You know, like, I could have gotten a job and made more money. Opposed to having my own business, I'm like, what am I doing? This is not right because this is the antithesis of the industry. I should actually make more money having my own firm. And now with profit first, I can say that that number is significantly greater than 35%. And that's before any, know, expenses that I'm able to, you know, pass through the business.

So the money had to come from somewhere. So now I'm thinking, well, he was in this grade A space, he always employs. Now I'm thinking, you're working in your garage. It's only you hustling like crazy. What's been the impact in your business? Has there been a negative kind of downside?

No, it's been completely the opposite, actually. You know, I have one. I'm not expending that emotional energy towards obsessing and worrying about my finances. And I can focus that energy towards servicing and selling more, servicing my clients and selling more business. So that's the big thing. I'm not being kept up at night worrying, am I going to be able to pay myself? Is there enough money in the bank? I'm focused on that genius work that I talked about. And now, oh, and by the way, all of a sudden my bookkeeper said, you know what, like, we might be able to, you know, incur more expenses. You know, it might be good for you. So I really was hungry to have a very strong marketing driven organization. So I'm in the process of launching a new website, a significant marketing campaign. And oh, by the way, all of this is very inexpensive in terms of what I'm doing, but at least I know I have the money to do it now, so it's only going to allow me to exponentially grow my business.

It sounds like you've become very selective in where you're spending your money. Much more focused. Who, who's your profit first? Bookkeeper?

Justine Lackey.

Oh, Justine. She's awesome. Yeah, Chris, you're like, oh, yeah, I don't know who that is.

Justine.

Yeah.

You go, yeah.

No, she's awesome.

No, she rocks. She really rocks.

She is an absolute rock star.

Should we call her?

Yeah. And the fact that, you know, I don't need to talk to her all that often. We talk about, you Know, basically once a quarter and then I deal with my, one of her people on a more day to day basis. But you know, the fact that she was able to really analyze my books and figure out, you know, that I needed to adjust my tax number, you know, fairly quickly. So I didn't, you know, I didn't stress out, you know, it was, it was huge. Because, you know, again, having that money there for not only this quarter, but already for next quarter is just fantastic.

I love it. Hey, we're trying to get as many people on board as possible with Profit first, Matt. We want them to take the first step. You're the guys who lived it. You've seen the results. What could you tell all the entrepreneurs listening right now? How do you get started on Profit first? And if they do whatever this first step is that you're going to suggest or multiple steps, where are they going to see if they actually have the courage to do it?

Yeah, so the first thing is you got to set up your handful of accounts. I thought, oh, the bankers are going to laugh at me. They're going to give me a hard time. What do you need all these accounts for? Try and charge me all sorts of fees. Well, you know, when you're putting, you know, over a million dollars through their bank, they'll kind of do whatever you want. It really was not that difficult. It just was a little time consuming. You know, it took a little while, took a little bit of time to get them online so I could view them. But I was amazed that, you know, once it was done and I was able to actually name these accounts online and put the percentages next to each one in my online banking view, it was fantastic. So that's the first thing. The second thing is as I've introduced other friends to this, some of them have kind of low margin businesses. So they're starting with like 1%. They might have 3, 4, $5 million businesses, but with high expenses. And so they're starting at a very, very low number. But it's blowing their minds that they're actually able to starting, you know, start to create these reserves and you know, start to see things really start to add up after a couple months.

And here's the blowing your mind sound effect for you. Whoops. That's not it. That's not it. Oh my God.

You can't stop it.

Geez. There it is. Oh, that. All that build up for that sound effect. Matt, thank you again for sharing this and for speaking up at that one event. I mean, that's where we met to talk about the. If folks listening in want to learn more about MJS Executive Search, where should they go?

Website is www.mjsearch.com.

And if someone had questions about profit first and implementing it or something, would they be able to kind of reach out to you to share your experience and thoughts for them?

Absolutely. It'll be. I don't know what the book costs, but it will be the best money you ever spent. It is the simplest formula that definitely creates some of the greatest impact that I've ever seen, and it's amazing how simple it is. So I encourage everyone to go for it.

Matt, you are the man. I don't think I could milk one more testimonial out of you, brother. Thank you so much for joining us. And take care, Matt.

Thank you very much. Take care, guys.

Thanks, Matt. Great job.

Donna. Donna, you're sitting here. She's taking notes. She's got full pages.

Frantically taking notes. Yes.

What did you learn? What's your observations?

Wait till we get to our partners first.

Oh, my gosh. I nixed our corporate partners.

See, I caught it here.

Well, I want to hear Donna's voice. Do you know. Do you remember any of those names? Donna, who are our corporate partners? Here's a twitch.

Do you want me. Do you want me to say them all?

Yeah, do the whole thing.

Number one, nextiva.

Nextiva.

What do they do?

They make phone systems.

Yeah. Voice over ip. Awesome.

Voice over ip. Yes.

Do you have a nextiva at your office? I can't remember.

Yes, I'm on the nextiva system.

Ha.

Another person on nextiva. Awesome.

Would you like me to give out my phone number, too?

Why not? Why not? Ours here is 855-802-2994. Give us a call.

Yeah, I think I might be on that same number, actually.

Donna's extension.

Don't tell my.

No, no, here. Well, here, the Preventus Group is 800-975-9440.

Okay.

And what's interesting, it all ties in together. It's such a great system, right?

It is. So nextiva is the first one.

Yep.

Fundera.

Yes. Starts with fun, ends with dare.

Yes. They give you money, ends with money.

In your bank account.

Yeah. You need money. A business loan or something. It's the. Instead of going the traditional route of a bank or a financing source, you go to them, they shop it for you and come back with the best offer or offers that you pick from.

I like the analogy you gave once of like, you know, how when you sometimes look for Airline tickets. You go to the site, like Kayak or another one.

Yeah.

And you put in where you want to go from and to. And then it searches, you know, Travelocity or it searches like all the others and brings them all onto one page for you. That's sort of what Fundera does for business loans, right?

Oh, I like that analogy. Yeah. Good. Donald, who's the third one? Boom.

Fund box.

Yeah. Nice.

That was the new one.

Brand spanking new.

Yes.

And they are. It's like factoring. Factoring used to be where if I had invoices due to me, a factoring company would give me a small percentage and take over the collections. They are modern. I think a better version where if I have an invoice due, they pay me the full amount of that invoice on the spot immediately. It's ideal for cash flow management. And then when the actual collection comes in, you return that money to Fundbox. It's due to them because they lended it to you up front and they charge a fee for that service. Pretty killer.

Totally cool.

And the last one is the stretch.

The last one, it's T sheets to the wind.

She's new Harmonics. Remember that tsheets is time tracking software. An amazing group of people run that organization and the software is phenomenal. It's not only can you use it for hourly time tracking, that's where we use it here in our organization, but it can be also used for project job costing. Literally, Chris, they get this. If you have, say, service tech, say you have a plumbing company with plumbers, the second they arrive at the destination, the home they're going to do the work at, it triggers off automatically based upon gps starts tracking their time on site. The second they pull out, it cuts it off. So now you can do job costing. How long was my plumber actually on site? How long was this crack hanging out? You can actually measure this stuff.

That's really cool.

That's awesome.

The crack hanging application. So, Donna, what'd you learn from Matt?

What did I learn from Matt? I'm actually looking at it from the lens of last week. We were talking about the sweet spot.

Yes.

And I was thinking as he was talking that he has found his sweet spot.

Yeah.

And he talks about who his target clients are. And he has a unique offering because he specializes in a very specific type of employee that he provides for these companies. And he mentioned that he has a particular system for finding just the right people. So he's got his systems down, he's got his unique offering and he knows who his top clients are and he's crushing it. And the other piece to the profitability was understanding his numbers. And Profit first did that for him.

Yeah, sounds almost to some degree, maybe some degree, he reverse engineered his way into the sweet spot. I mean, exactly what you're saying. Well, you know what it blew my mind was when I asked him about, I can't afford your firm. I don't hire those type of people. I need entry level and mid tiers. What do you do? And he said first week he shared some great resources. I've heard of Resumator. He also said higher log, I think it was, or higher. I'm not familiar with that whatsoever. But then he goes on and shares details on exactly what to do with. With getting people on by putting hurdles in their place. He says, you want to hire a great talent, put hurdles in their place. I know I shared my example on the air with him, but that is so true. If you don't put hurdles in, anyone who wants a job responds. And most of those people don't want a job with you. There's doing blanket responses. That little hurdle technique has been a killer in making that process a much more profitable process in hiring people. Not hiring or going through wasting money hiring people that aren't a fit, or at least interviewing them. What'd you learn, Chris?

Well, I learned that since he started really focusing on profit first, that he's been doing what he called genius work. His genius work, which I guess is like really the work that he's good at. Thank you. The work that's profitable. I mean, is that the definition of genius work, Mike?

That is the definition, genius work. When you're in your area of what I call super strength, where your experience, background, interest, passion, all kind of comes together, that's when you're the most fluid in your work. And, you know, I just had to throw Chewbacca for some reason. Yeah.

And what. And he's also talking about that, you know, when he made. When he. When his revenue was 700,000, he made more profit than when his revenue was 1.2 million.

Yes.

It reminded me of what my brother always says. My brother Mike, because he's.

He says this, doesn't he?

Hold it there, cracker boy. I'm not paying.

That's your brother.

That is him, actually, I think. Should we call him? That's my new line. Should we call him? No, but my brother always says. Because when I talk to him about building business and adding people and getting an office, and he always says, you know, bigger is not necessarily better and yeah, yeah, that's. It just seems to be true so often. And however, now that he's on very clear with his profit first principles and he's running his business properly now, when he does get bigger, it will be better.

Yeah, yeah, that, that line I wrote down now for myself, it's not what you make, it's what you take. You know that top line, man, that can be a lot of stress. I've had. I had a 7 million dollar company dude that when your payroll, I remember payroll. I remember when the first month I had to do 100,000 payroll, then $250,000 in payroll. If I didn't get a project, literally I had to mortgage my house and there wouldn't be enough money to cover payroll for one month.

Month.

That is stress. It's not what you make, it's what you take. Donna, you have some other thoughts? I think I have no thoughts. No, no. I thought you were going to say something about, about the.

Something about the size. Well, it.

Oh yeah, that's it.

The thing that has astounded me over and over again as I talk to business owners is that as they grow, they actually start to make less money. And the whole idea that they don't have a handle on what they can afford to do and a lot of old fashioned thinking if you go to a business advisor that maybe is, you know, they're a little older than we are. The thinking is, well, you have to lose money to grow. But when you and I started Provendus Group, Mike, I don't know if you remember this, and we sat down in another coffee shop, we seemed to meet in a lot of coffee shops, sleazy and you know, did doing some back of the. Well, we found a couple nice ones and that one went out of business.

I remember Mike doesn't like those.

But Mike writes out for me, he says, this is how I want to set up our business. And he says, I want to put 20% here and 10% here. And he basically outlined profit first for me. And he looks at me, goes, are you okay with that? And I said, sure, why not? I've never seen anything like this, but I'll give it a try. And the amazing thing about it was that from our very first check that we got in the first client that we had, we started allocating money to profit. Yeah, to profit, to owners pay. And even within the first year, in less than a year we were paying ourselves, it may not have been a salary that was paying our mortgages. Yet. But we were paying ourselves something. And that's radically different than the thinking that a lot of business owners have, which is, I'll pay everybody else and I'll invest everywhere and someday I'll take money out.

Yeah. And what would probably. So Preventus went through a few iterations as we're exploring what you know, and that's what a lot of businesses do. Our last person was saying, last person. I'm talking about you actually, Chris. You're talking about how you start with authority and maybe that's not the niche. Preventive started off the same way with a certain model where we were doing a lot of one on one time with our coaches. We did a retreat together, and now it's shifted into potentially a much more explosive model. But you have to find that as we went through the waves of growth, been profitable every quarter. And it doesn't mean you're going to make millions every quarter, but it's been profitable every quarter because when you do a percentage based system, it adjusts with the ups and downs.

Yeah. And. And it really works. That's the surprising thing. As long as you don't cheat. And there have been a couple times where I'm like, well, I don't want to do it.

Yeah, yeah, yeah. That's where you need an accountability partner. I loved hearing Justine Lackey like, here's a profit first professional that's holding him accountable and saying, here's what you got to do. When you have a third party looking at it and critiquing it, it's much harder to use those excuses. Well, just this time, no one will notice when there's someone else that's saying, no, no, this is the way we do it. This is the way we do it. I was thrilled to see Matt's execution of it. And by the way, I know it sounded like a massive testimonial and I knew it would be because when he went and spoke in front of that group, that was unexpected. And that's how he spoke. It wasn't that I, I prompted him or said, you got to say this stuff. Matt is being 100% genuine about what he's experienced.

It's a great story. Absolutely.

It's a great story. And he's a great guy too. I mean, just a great human being. Yeah.

I think it gives, it gives confidence to other people who, you know, I think I remember last episode we were talking about the fear of making these changes and the fear of firing bad clients. It's like, well, when it starts to work you become more confident. But when you hear a guy like Matt tell his story, then with all the details, it's happening. People are doing this profit first thing. And it's working.

It really is. My final thought is this. If your money's making a dollar a year, there's room for profit. Doesn't matter what size business you are. A lot of our listeners don't have the 5 or 10 million dollar companies as Matt was referring to. Those companies be profitable, but literally you can have a hundred thousand dollar company and be profitable. You can have a $1 company be profitable. Dude, we gotta rock and roll. My buzzer's about to go off. We're running out of time.

Oh, my. That was good.

Hey, let's ask Donna first. Donna, if people want to learn more about Preventive Scrub, well, more about you. What should they do right now?

Now go to our website, which is www.provendisgroup. p R O V N D U S group dot com. And do I have a second?

Yeah. Tell us what it means. Yeah. The secret.

It's the secret. It comes from the Latin word promovendis, which means to move something forward. And we want to move you and your business forward.

Yeah, I love that. Stop moving in circles. Moving a specific direction, Chris, if you want to learn more about you, my.

Brother, fractal recording.com, that's all you need to know. I produce podcasts for people who want.

You don't know the best. It's so funny. You had such confidence until an episode ago.

Now I know you guys have no.

Idea what I do. Hold on, everyone. Slow down. Chewbacca's coming. Oh, he's late.

He was late sleeping. He's filming the new movie. He's tired.

Yeah, you see how old those people are? Forgotten. God's sake. They have to move slowly. So. And listen. Listen to this, dudes. If your business is like Matt's when. When he was struggling, or if your business is growing explosively, if you're making a dollar, you're making a million dollars or whatever. It's not what you make, it's what you take. Go to Profit first, professionals.com. click on find. Ron here will find you Justine Lackey. Maybe you'll be Justine Lackey yourself. Or someone just like her.

Nice.

Or a him who will make your business profitable.

That's right.

You make not what you take.

Oh, T shirts. Come on. All right, thanks everybody, for listening again. You can hear our podcast in itunes and stitcher and tune in and feel free to go back and listen to all the previous episodes. Mike, you gonna hit it?

Nah.

Oh, he hit like, seven different things.

I just. I just jumped.

His keyboard. I love it. Thanks for listening, everybody. We'll see you later.

Sweet mother of God.

What is the.

Hold off.

It's beeping.

It's like parking your car in certain neighborhoods in the Bronx. You just don't do it.

That makes no sense. I love it.

I just want to know if you guys walk around all day with sound effects just following whoever.

Chris walks around with a microphone. He came here to the office and he had. It's so funny if you ever just talk one on one with Chris. He's got this microphone, but it's like this. The most phallic looking thing in the world. It's 20ft long. So he'll be in another room and he's poking this thing in the face. No matter what you say, he's catching on audio. And then he's cutting it into bits. He can't help himself.

By the way, walking around with sound effects is a great idea.

He. We were. He came here for Cinco de Mayo. Remember Cinco de Mayo here at the office? So we're whipping up margaritas for everyone here at the office. He's recording the. The blender. Sound effects, people drinking. Oh, my God.

Classic.