Episode 51: Utilizing It for Profitability with Michael Spadaro

What's that? Is that. Is that rain? Something burning. Oh, nice. Christ. He's just doing. All right. Let's get started. Dude, you're freaking me out.

Yeah.

You're listening to the Profit first podcast.

Thank you to Ozzy Osbourne and his band. We made it to episode 51, 999.

The German episode, Fairies wear boots.

And you have to believe me, man. That's a blast in the past, right?

Totally 1970. Welcome, everyone, to the Profit first podcast. I'm Chris Curran, the founder of Fractal Recording.

And I'm Mike Michalowicz. Starting this disaster off, and I'm the author of Profit first. And it's a privilege to have you on the show. It is going to be a killer episode. Be prepared.

That's right. We're available as a podcast on itunes and Stitcher and Tunein Radio and also the website profitfirstpodcast.com and this show. Wait, what's the new tagline?

Mike?

It's not what you make, it's what you take. Thank you. Boom. It's the alpha enemy. It's the alpha and omega of profitability. You know, today's guest is going to blow your mind, too. Michael Spadaro. He is going to teach you what he learned in the implementation of Profit First. He's got a great IT consulting business. I'll give you details in a minute. I'm just pumped he's joined our show.

Yeah.

Dude, dude, dude. What have you been up to?

I've tried this new app called Wunderlist. I have all these tasks. Like, I have, like, my business, obviously, my personal life. I have, like, a few other little mini entrepreneurial things on the side I'm doing. And, like, I got in this bad habit of when I need. When I think of a task I gotta do, I go on my Google Calendar and I just, like. I just make an event and I just put it in there. And then, like, my calendar is all crowded with all this stuff. So I was asking, like, what app should I use? And people suggested all these apps, but I chose this one called Wunderlist. And I guess it's okay, but it's.

It's not perfect.

I don't know if any of them are perfect. But anyway, it does help, I guess.

Oh, there is one perfect. It's called the Profit First Time or Profit First Task Manager. Read the book Profit First. I have a task management system in there that is perfect.

I did not know that.

Yeah, I do. I do. It's free, down for, available for free download on Mike Michalowicz dot com.

Sounds like a what's bike? Michalowicz.

Mike Michalowicz. That's my. I'm going to the guy. The weather. Bad voice here or radio voice, you know who's in studio with us? Who's back after a two week sabbatical? Christina Balda.

What up, Christina?

She's back. She's back and she's got a welt on her head. Dude. She took a hand truck to the face.

Dude, you were an Egyptian slave driving ruler in your past life.

That's true.

She wasn't. Listen, I said I want quiche for lunch. And she gave it, she got it for me and there was ham in it. I said she brought the plate. I knocked her hands that flipped over. I said, I don't want it with ham. And the nearest thing next to me was a feather on one side or a hand truck on the other. So I took the hand truck and threw it.

And he threw it on the ground.

Threw it on the ground. We have all these book orders coming in private first. Literally, what? Today we sold 100, 200 copies.

About 114 books.

114 books today. So Christina has to hustle it down to the UPS store and boom, she picks up the hand truck and boom.

Sorry, we're laughing at you, Christine.

No, it's totally fine. It makes me a little loopy.

Please, dude, include in the show post a picture of the welt on your head, please.

Yeah, actually there's barely a welt. A little weltish.

It's a little welt.

I mean, you're like, it's not elephant man welt, but it's definitely a bump. So before we introduce today's guest, Michael Spadaro, who has a fascinating story to tell, I want to first thanks our thanks. I first want to thank our fascinating corporate partners, Fundera, Fundera, FundBox. Those are two separate companies, TSheets and Xtiva. All four of those companies are doing amazing things. We'll talk about them a little later on, but in the meantime, you can Google those company names. Now let me tell you about our guest. Michael Spadaro is the founder and CEO of Profound Cloud. Now, this is an IT consulting firm that helps businesses save money, save time, which also translates to saving money by using tons of different innovative technologies. What I asked Michael to do is actually two things with this. We want to learn more about his company and ideas and strategies he has for you, listener, for you to save money by implementing technology. That's a good idea. But I Think the second part of the story you may find even more fascinating. He is one of the earliest adopters of Profit First. When I wrote the Toilet Paper Entrepreneur, my first book that goes back seven years ago, there is one small section, maybe three paragraphs, where I brought about the original concept. I called it PFA back then, Profit First Accounting. And I said, you have to set up a PFA account simply for profit. That little section of the book is what triggered Profit First. The book. A lot of people started calling me, emailing me, saying they were doing it. Michael's one of the early adopters, so I want to hear what his experience was and what he's learned in doing the process and what he can share with us listeners. So with no further ado, it's my privilege, Michael Spadaro, welcome to our show.

Hey, thanks a lot, Mike and Chris and Christina. I think as a true Mike Michalowicz groupie going all the way back to the toilet paper entrepreneur days, I could say I'm really honored to join you guys and gals.

Yeah, thank you.

Yeah, no, it's the absolute privilege to have. You know, I didn't even ask you where. Where's your office based out of, Michael?

We're in midtown Manhattan.

Okay. That's an expensive district to be in.

Tell me about it. Tell me about it. Sure is.

Do you also live in Manhattan?

I don't. I live over in Queens, but short commute away. I'm a Queens guy. I lived there for about 10 years.

Oh, gotcha.

Go Mets.

There you go. Yeah, definitely not from the Bronx. So tell us about your business, specifically. Tell us about the IT services you provide. And also, do you focus on the Manhattan area or how do you target your market?

Yeah. So there's really two core parts to our business. One is our. What we call our managed services, which is a sort of a fully outsourced suite of services for small businesses, including management, help desk, support, consulting, all wrapped up in one monthly fee. And usually those companies we do work with are in New York City. So that's very much a local service. The other side of our business, hence the name Profound Cloud, is the cloud consulting that we do. And specifically, we are a premier Google for work partner. So we work a lot to help businesses, both small and large, really all across the country and even internationally, get better use of Google's business tools, whether it be Gmail for business, Google Drive, things like that. So it's kind of a mix of both.

So let's dive a little bit into their tools. If you don't mind, I assume we use Google Docs here, right, Christina? I assume that applies to more than just small businesses. We got five employees here. We're a small firm. I assume it applies to bigger businesses too. What's the breadth of products they have? Maybe some stuff that the typical person might not be aware of.

Yeah, I mean, one of the. Obviously Gmail and Google Drive are typically the first things that you would think of and Google Calendar and contacts and things like that. But when you start to look across the platform and all the things Google offers, there's things like Google Sites where you can have. For us, it's like an integrated intranet, you know, to use the term, kind of from the old days to be able to say put operational documents, process documents, have a centralized place for our employees to access HR materials, and it's all linked to their Google accounts. So sites is one that often kind of gets forgotten. Also Google, which is sort of going. We don't quite know what direction it's going now, but a lot of people thought it's Google as this kind of Facebook competitor. But actually where I think Google really excels is as kind of a business social network. So we have like an internal Google community where we can share articles that we're reading about topics that are relevant to our business or share leadership articles with each other, whatever it might be. And so it really helps to facilitate kind of that culture building and information sharing throughout the organization in a kind of social way. So that's another area of the platform, but it really extends all in a Google Cloud platform. If your business has apps that you're developing for tech companies and the Google stack is quite expansive, so there's really a lot you can do before we.

Dig into how you made your business profitable. I'm really curious on suggestions you have. Everyone needs IT services, everyone needs it, period. What are common mistakes people are making that are costing them money, and what are your suggestions to fixing those mistakes?

Well, I think the biggest thing when I talk to entrepreneurs and business owners especially who are just building their businesses, the thing that I hear the most is I don't know what I don't know. Right. They feel like that there are so many great tools out there, but they just don't even know where to begin. And a lot of the tips that I give out nowadays have to do with educating yourself and sort of viewing it in a different way. I think if you look back 10 years ago, it was this thing that you had some tech guy come in and he took care of it. And as a business owner, it wasn't really your job to know too much about it and that you can just hire someone to take care of that. But. But now technology touches every single facet of your business. It touches marketing, it touches finance, and the way you do your bookkeeping, it touches project management. And so I really see technology as being a fundamental skill that's really important for entrepreneurs to be versed on the same as they're versed in marketing or finance or anything like that. Now, just like in finance, you don't have to know every single detail that a CPA would know, but you have to be functional. And I think that it's really important, I think for entrepreneurs that we begin to put greater emphasis on developing that functional knowledge for ourselves and technology. Because really what's happened is it's becoming less and less about the wires and plugs and all the little details of how do you connect everything. And with the advent of all these cloud services, these things can be set up in a matter of 5, 10 minutes. Things that used to be giant projects, and so they're not really technically complex, but they do require you to understand what a product can do and how to apply the technology to your business. And that's something that anyone can understand. You don't need to be a highly technically sort of proficient or a gifted person to do that, but you do have to put in the time, just as you would in marketing and finance and other areas of business, to become well versed in it. So that's always my biggest piece of advice to entrepreneurs today.

That's such an interesting perspective. But where does an entrepreneur get started? There's so many options out there, Michael. There's millions of apps, there's millions of things. They can all benefit my business. How do I start becoming technically savvy and how to leverage all these different tools?

Well, you know, one tool that I use a lot that I find really helpful to help me just keep versed in a topic is to track certain topics or certain publications using Google News. So one of the things that I do is if I feel like I need to brush up a little bit more on a topic or if there's a certain piece of technology that I need to track. Like, because we do so much work with the Google Apps, I have to sort of keep up to date with all of the news, all the feature releases, what are people saying about it? And I'll go into my Google News and I'll add that as a topic. Or Asana is A great project management tool that again, is dead simple to use and implement, but you have to kind of understand what it can do and how is it changing. So I'll go into my Google News and add a custom topic section for Asana or another product I'm working with. So I would start with what are the products that you're using in your business today that you already know about, that you think you could get, you could be getting more out of? Maybe you're using Google Apps, but you're not really using Google Drive to collaborate within the organization. Start by really researching what are some of the recent articles about, feature releases in Google Drive and things like that. Not the kind of thing you can cram for. It's really an evolving process because by the time you were to read a big book on it, it would have all changed. So I think following Twitter, thought leaders, following, you know, key brands that are important to you on Facebook, technology brands, and keeping up with news feeds, I think is the best way to really educate yourself when it comes to technology.

I love that, you know, and I found once you possess a technology, it often, as you're suggesting, it's always advancing. There's often new bells and whistles that IT can offer, and the solution may already be in your possession. You seem to investigate what you already possess.

Oh, absolutely. And that's a huge trap that I think a lot of small businesses fall into with technology in this age of cloud computing, is that you have tools that are very broad and they, you know, it's like a salesforce and it can sort of accomplish everything you need in one shot if you can afford it and if you have developers, but most of us don't with smaller businesses. So what you end up with is you end up with a lot of sort of scalpers. Scalpels. Right. So a lot of sort of very effective. One trick, tools which, which can be great. You might have a tool just to do your email marketing, and then you have a tool just to do your customer support or whatever it might be. But if you project that a couple years down the road, it's easy to get to a place where you have like 20 different tools and none of them are connected and all your data's in seven different places. And how do I bring it all together? It's a very, very common problem. So I think it's important to research the vendors, it's important to choose your tools wisely. But all of that work really can. Can be done by an entrepreneur who doesn't have, you know, Quote, unquote, technical knowledge or technical prowess. It's just about understanding the industry and understanding the product more so than it's about knowing how the bits and bytes in the background work.

It sounds like you did an analysis on our business. We're starting to have all these different tools. So we do have a standalone email marketing. We have a CRM that can do email marketing, but they don't integrate well. We try to. That was a mess. So fascinating. If you're going down that path, and this is the last question I want to ask about building efficiencies through it. But if you're going down the path where you have these disparate platforms, is there a way to stop that and shift everything over to one? How do you make that transformation and get back into a singular platform or a connected platform?

Well, I mean, I think first you have to really look hard at to do a cost benefit of whether or not that even makes sense. I think it's hard to achieve unless you're going with a big player like a Salesforce or a Netsuite or a really behemoth product that is typically going to be expensive and require less custom development. But there are, you know, there are certain things you can do. So for example, there might be one product that at least combines three of those functions. You know, so if you can consolidate three products into one and not lose functionality and not lose customization and things like that, then go for it. You know, that's definitely an area to look at. But be realistic. I mean, a lot of small businesses are still going to be in that place where it's a little bit disparate. There's also some really nice tools out there that can help you integrate some of those disparate tools. One of my favorites is Zapier, which is Z, A, P, I, E, R are. And if you do a search for them and they basically tell you all the different applications you can plug together. So if you use like QuickBooks Online as your bookkeeping and you use, say, Harvest for your time, tracking and billing your customers, you know, I don't, I don't have it in front of me, but I'm sure they probably have like an integration. You say, I'm using application A, I'm using application B, and with a couple of clicks, it can help you connect those. So that can definitely help bridge the gap if you are in that place. And otherwise, just when you choose future tools before just jumping into a tool because it's so easy to sign up for and you can get it going in five minutes. That doesn't mean that you should just jump into it, send the link out to all your employees and say, okay guys, here we go. We're going to use this. Now you should really still take the time to really think about whether or not that tool fits into your long term strategy so that you don't end up in that place where you have just kind of tools overkill.

Yeah. Yeah. And I didn't think I'd be teaching you a little IT trick, but I don't know if you knew this, Michael. No one uses Harvest for time tracking. Everyone uses T sheets. T sheets, our sponsor.

Yes, I love T shirts.

Harvest.

So I've never heard of the other one. So now here's what was so fascinating. You and I exchanged some emails and you implemented Profit first in your own business all the way back from the TPE days. Do you mind kind of shifting gears here? Share the story of your background in your business, why you implemented Profit first was called PFA back then when I started and what the experience was like and why you did it.

Yeah. So you know, I had read Toilet Paper Entrepreneur and then I'd read Pumpkin Plan after that. But I remember after reading to the Paper Entrepreneur, I got really excited. I went to my wife. I guess I had already been in business for, I want to say probably about three or four years at the time. I read that book. I've been in business about seven, eight years now. And I gone to my wife and I pointed to the chapter and the PFA chapter and I said, look, this is great, like I'm finally going to take home money from the business. I never really, aside from my salary at that point, had never really taken any additional money out of the business. It just sort of all got reinvested or spent on things or who knows. So she got totally excited. It made her very happy. And I started up a spreadsheet that day to track really a bunch of different key financial metrics. And then that was one of them I was tracking. It was the PFA balance and what had the last withdrawal been, so on and so forth. And that same spreadsheet I've been using, I put entries in it three times a week, every single week to this very day. So, you know, I started, I think I started with a 1% because I remember, you know, one of your big things in the book was don't start, don't go just balls to the wall and jump in and kind of burn out on it. So I started at 1% and I've slowly raised it like, you know, half a percent here, half a percent there. I'm at 3.5% now and would love to get up into that more 5 to 10% range. But, yeah, it's been a very interesting experience, I'll say that. I really enjoyed seeing the kind of now, the expanded version of what you had now, and I heard you speak a few months ago and sort of hearing a little bit more detail about the whole profit first vision that you hit. The expanded vision that you have today really helped me see the big picture of it, because I think the biggest mistake I think I've made over the years is you talk about, Mike, this idea of. Of the plate getting smaller, right. When you're on a diet and then therefore you eat less. And I think at times, if I've sort of not done well with the profit first because I continue to eat the same amount, just kind of like try to pile more out of the plate, you know. And actually, as our business has grown and as your business grows, early on, I didn't really have a lot of access to credit and a lot of, you know, you know, profit sitting around if it's very, very lean in the beginning. But as the business has grown and become more successful and we have bigger credit lines and all these wonderful things, it becomes more tempting to sort of just kind of like pad the. Like continue to put money, the profit first account, but then turn around and, you know, use the credit line to make a new investment and things like that. And so.

Right.

So you kind of just like at times, like I felt like when I felt I was just kind of like shifting money around then, really rather doing what I was supposed to be doing, which is just paying attention to running the business on the remainder and really letting it impact the decisions that I make day to day, which is something that I'm much more conscious of now, especially now that I've had a chance to really see your whole sort of expanded vision of it.

I love it that your awareness of money has changed, that you can actually see that. I think a lot of us, Christina, subconsciously we look at one account, the one we're measuring is growing, and. And then subconsciously we just take it from somewhere else. You know, I used to do it with credit cards. I would. I wasn't making enough money to take home, at least as I had to find at that point. And so what I do is as money came in the business, I would take a big check for myself and then I'd pay all the business expenses via credit card. And I'm like, look at all the money I'm making. Really, I'm stealing from my credit card, you know, and it sounds like, Michael, you are experiencing your own version of that with credit lines as opposed to credit cards.

So easy to do.

Yeah, exactly, exactly. And again, as the business grows and as the financial statements become require more detection to figure out what's actually going on, it's really easy to be doing that and not even really so much realize that it's happening because obviously, you know, you can't just look at your bank balance anymore and understand what's going on financially in the business.

So that's a great insight. Yeah. As the business becomes more complex, it's easier to hide money from ourselves, play these games. But Michael, tell me about. You started off at 1%. What was your feelings or emotion around your business's financial health, your financial situation prior to that 1% set up for taking profit. And then afterwards, was there an emotional change? I'm just guessing. There was.

There was. Again, you know, I mentioned, I mentioned my wife before and you know, I think a lot of entrepreneurs can relate to this, is that, you know, there's kind of two sides to. To your life as an entrepreneur. There's, there's your life in the business, but then there's the impacts of it outside the business. And if anything, I think it gave kind of like a framework of kind of communication with my wife. Whereas before, maybe before it started, there was more tension around, you know, when are we going to take more money out of the business? I'm unclear what's going on. You know, I, like, I kind of knew what was going on, but I forgot, forgot that she didn't have insight into everything that's happening financially at any moment in the business. And so to have this kind of quarterly sort of true up where money was coming out of the business really, like, I think removed a lot of just the pressure from me. And so I think more than anything like that was it just gave us a method of communicating. You know, she'd be like, oh, what's the PFA withdrawal looking like? It just became part of our vernacular and it gave us just a way to communicate about it that was very helpful. And emotionally, I think that was very helpful for me, for sure.

I did not expect us to go down this path about the relationship with our wives. We actually did an episode called Married to Mayhem. Remember that, Christina?

I do.

And we had some entrepreneurs spouses. In this case it was two wives that Came on. One of them was my wife and this other woman. Join us and just sharing their perspective. I'm gonna call an audible here. Would you think, Michael, your wife might be interested in joining us for an episode down the pike? I'd love to get her perspective of what she went through as you implemented this. Do you think she'd be up for it?

I bet she would. I bet she would.

Should we call her now?

Yeah, that's my line.

Here's my new line.

This is awkward. All right, Christina, write that down. I'd love to. We'll have a follow up episode. So let's explore that. Michael, from your perspective. You're building your business. You're all in on this. You've taken a risk. Is your wife part of the business? Meaning is she an active participant or employee or she just observing as your spouse?

No, I mean she's got her own career, she's got her own thing going on and she's an observer and she's, you know, extremely, extremely supportive and so thankful for that because it's. I appreciate that it's not easy, but. But, you know, as I said before, it's just like instead of there being no information, you know, now she seems like she had some information where we were to sort of anchor it to this schedule. I think the thing, I think really the thing was like that it was there was. With regularity, right? It wasn't just, oh, when we get a big contract in, I'm going to take some money out of the business, right? But the same way that the regularity helped me ensure that there was being stashed away and then taken out of the business. I think the regularity helped her because it didn't have to be a constant topic of conversation. It could just something we could talk about at the time that, you know, at the end of the quarter, essentially.

Boom, that was my mind being blown. You know, that's one insight I've yet to hear from someone is the regularity, the predictability. Because I think, and Michael, tell me if this is right. My wife is not an entrepreneur by any stretch of the imagination. And she fortunately or unfortunately married one. Me and her. The fear, the greatest fear is she does not know what tomorrow is going to bring. And that's where I actually get the high. I'm like, I don't know, there's so much opportunity and she think there's so much risk. I'm like, there's so much opportunity, so much risk. When we implemented profit first back in the toilet paper entrepreneur Days for ourselves. I had the same experience. Now there was this recurring, we did bi weekly check in saying here's the money that's been reserved. And so here's what we can expect for the next couple weeks or couple months because the money's been reserved. Has that predictability. My question is this, and maybe you've already said this, but has this predictability enhanced, improved your wife's perspective of your business? Second question is, has it dampered or has it caused any negative effect? Because that unknown is now much more known for you.

Well, I think it's forced me to be. See, here's the thing. So as an entrepreneur, obviously we're all pretty very comfortable with risk. And I think of my wife as sort of the angel on my shoulder. And then the entrepreneur is like the devil on my shoulder. And it sort of ground. She sort of grounds me in that way. And I know that it's like if I have an idea about, you know, this big investment I want to make in the business, I know if I could sell it to her, I'm golden, you know, So I really, I trust her and I listen to her as someone who's going to basically call me out on my bs, you know, so.

As long as you don't have Mike Michalowicz on your shoulder, that's scary.

But you know, in terms of negative. No, I mean, like I said, the only time I really got into trouble is if I was basically spending the money anyway and then also taking the money out, then it's not like it got into serious trouble. But I had to be conscious of that. And there were times where we came to the PFA time and I had to say, look, I made these additional investments in addition to transferring money to the pfa and now I have to kind of bring our credit line under control or true up onto that. And I've had quarters where I've had to say, you know, we're not going to have a PFA withdrawal this quarter because it doesn't make sense for me to have a PFA withdrawal and then, you know, continue to, you know, extend the debt. But even at that point in time, I mean, at least I had money set aside and it was like, okay, excellent. Now, if nothing else, if I really, you know, it's like you say it's a, it's a rainy day fund too. I mean like a totally downpour emergency fund. But just knowing that that was there, if I, it just, it just really helped ground me in such a way that just by doing that Regularly and religiously. It just made sure that I wasn't going to do anything basically too stupid.

You know, we had a call last week with this guy Matt, and he was sharing his experience with Profit First. And one thing he explained is, or he was talking about prior to Profit first, he had the grade A space. He had all these employees. And I said, why are you doing this? He's like, well, it made me feel good. And how I was justifying is I would impress my prospects and clients. They come into a beautiful space. It was a sales tool. And he said, I implemented Profit First. And he goes, my profits skyrocket and all this stuff. And I said, well, tell me about that great a space. Did you lose it? Did your employees go away? You must be living in a basement. He's like, no, no, everything stayed the same. You know, we didn't have time to explore that. But I want to know, as you've implemented Profit First, Michael, have you had any compromises to what you already possessed or already doing?

Good question. No, I don't think so. I mean, certainly I don't feel like, oh, there's nothing that I can point to and say, oh, I should have made an investment there and I didn't. And therefore I lost out most of the things. You know, especially lately, as I keep thinking about that shrinking the plate idea and being more conscious of it, I just find myself a little bit more keen on spotting cost waste, you know, just spotting things that it's like, wait a second, we're paying like, you know, $20,000 for this piece of software that we use, like once a month and doesn't really do anything for us. You know, just like it opened my eyes to look for things like that. It, it. Stuff like that just adds up. So it's, it's had more that impact than anything else.

Fascinating. So that's where it's coming from. Because, you know, it almost sounds like, like some kind of weird magic or a logical math where I'm. I'm hearing people saying, no, nothing's changed in my business. I'm. It feels the same things the same, and profits increased. But how could costs, you know, that's the assumption was how could cost be the same in profit increase? That's not possible. What I'm hearing is there's this leakage of money that businesses are experiencing, and it sounds like you had too, that you have something you rarely use. How did, how could you identify that now with Profit first in place as opposed to before? Why didn't you see it Then.

I think then I was probably more focused just purely on growth and not as much on profit. And so you just get in this mode where it's all about, well, as long as the top line goes up, worry about that profitability thing later, or as long as I'm basically breaking even. So I think just paying attention to if you're taking that 1% or 3% or 10% or whatever it is out, it doesn't really let you get away with, with just breaking even because you're going to just end up noticing that your operating fund is just going down. That's been the impact that I've noticed.

What's your perception of growth now? Are you just as enthusiastic as growth? Everything? Has your perspective of growth changed because of profit first?

Yeah, I'm a huge fan now of very responsible growth. And you know, one thing that, that we've done a lot over the years is we've really focused and this, this actually is a more inspired by Pumpkin Plan, your other book. But I mean, the, this for us, like focusing on the clients that are really make the most sense for us, the customer that really makes the most sense for us. And at many times, you know, pruning or cutting back customers that really weren't in our wheelhouse or were unprofitable has really held us back from a revenue perspective, but has really helped our bottom line a lot. And so I think right now it's like I could really care less about the top line number and it's much more important to me, like the fiscal health in terms of profitability and being able to provide a great product and service and being able to do well by our employees and to do well by myself is much more important to me than how big the business is or how many employees it has, which I think is another thing that's easy to get hung up into. Oh, how many employees do you have?

Right.

You know, you know, there's like this whole, like, you know, this is how we measure. You don't meet another, you know, business owner. They don't ask, well, you know, what your, what was your profit last year? Right. So no one asked that. And so you kind of get caught up in this, you know, like you said, like how nice your office is or where it's located or how many employees you have or what's your, what's your top line revenue? All of these things which at the end of the day don't really deliver a lot of value to anybody really, let alone the entrepreneur.

Oh my God. I mean, you're literally giving me chills. That one tier is coming down. My dream is to hear entrepreneurs saying, top line, doesn't matter. It's all about what's in my pocket. That is it. I remember I was talking to someone, this is when Twitter was getting hot, and they said, oh, we can do some consulting services for you or something. I remember what came out. I said, I don't really know if you can have the impact we want. And the guy said, well, I do have 5,000 followers. Okay, who cares? And I found Michael, Are you an eo? I can't remember. An EO Entrepreneur. Okay, I found EO Meeting. I love eo. It's an awesome organization. But I did find the mindset there. And in many entrepreneurial gatherings at any type is there's this chest pounding of how big's the business? And all the braggings there. But then it seems like all the education and all the sharing is around achieving the goals of chest pounding. How big is your business? Do you see the same thing?

Yeah. Oh, absolutely. I mean, I can't stand that. Yeah. To me, it's all about, whatever, what works for you. Right. How is the business functioning for you? Not just financially, but is it satisfying? Are you feeling meaning in it? All of that stuff. And I'd rather be somebody who has $100,000 business and takes home $90,000 and is fully fulfilled than someone who has a $10 million business and takes home nothing.

You better go home today and tell your wife she married the most awesome entrepreneur ever. I love what you're saying.

Wow.

So, hey, Michael, we got to get going. This has been fabulous. Please do ask your wife if she'd be willing to join us. I totally want to hear her perspective. I'm wishing you continued success and greater and greater profitability. If there's anyone's plan that deserves it, it is you and our listeners. Listen, there's a guy who provides amazing IT services. He's located right in Manhattan. His company's called Profound Cloud. Michael, how can they find more about you and Profound Cloud?

Best place, our website, profoundcloud.com and we also have Best Place to Follow Us is actually probably our YouTube channel, because we do a lot of webinars, instructional videos, and things like that to help entrepreneurs figure out this whole technology thing.

Michael, privilege having you. And never forget, it's not what you make, it's what you take. Good job, brother.

Thanks, Michael.

Thanks.

Awesome. Thanks for having me. Thank you all.

See ya, Christina. You're sitting there. When Christina starts writing notes it means we got one of the best guests on and she's got like a six pager.

I have a page and a half and my. My hand is so tight.

Give me just one teaser before we talk about our corporate partners. One teaser. Like, what's one of your favorite things you heard Michael share?

I don't know.

What?

I don't know.

Yeah.

Oh, man.

Is that. That takes courage.

That's deep.

You're cheering up. Let's meditate on fire. Dude, Christina's been on such fire this week.

I feel good.

She is rolling. She. Dude, her life is clicking. Everything. I mean, she's cruising. But we'll talk about that too, in a little bit. First, let's thank our corporate partners. We'll do a round robin. You pick the first one, Christina.

Nextiva.

Yes. And nextiva is a voice over IP phone provider. We love them. Their customer service is second to none. They are an exceptional company, group of people, and they save you a lot of money over a traditional phone system. Thank you. Bang. Kris, you pick the next one.

Fundera.

Fundera, you know, single source funding. If you need money for your business, call Fundera. They seek out the loans for you. They get the money for your business to invest in the stuff that's pushing you forward. And that's the trick. Use Fundera to grow what's working. Don't spend money on stuff that's not. I think Michael told us that one, Christina. Next one. Whoops.

T sheets.

T sheets. Time tracking software. I threw my pen. I don't know who that other company was Michael referenced. It sounded ridiculous.

Yeah.

What the.

Because there's only one good time tracking company and they are the best. We love T sheets. We use every. Every company we're talking about here. We use them to some degree in some capacity. T sheets we use here. I. I can attest. Phenomenal software.

Using their pen right now.

Oh, yeah, we. And we even have all their tchotchkes. Like, we have a hundred hearts floating around the T sheet. Stress hearts now, but great company for time tracking software. Use it to track your employees, your projects, all that stuff. All right, Chris, I think you're up. Last one. Do you remember who it is?

Fundbox.

Fundbox. It's like modern day factoring. You don't know what factoring is. Don't worry about it because it's no longer cool. Fundbox has replaced it. Here's the deal. You have money due to you from clients who've invoiced them. They're not paying you. Fundbox gives you the money, they release it immediately to cover that invoice, they pay it to you in full, in its entirety. When the client then finally pays you, return the money to the fundbox, plus a fee for their services. Minor fee, though, and you're done.

Lots of money.

Yeah, cash flow is king. Sometimes you can't cover payroll. Don't ever try to be in that position. But if you can't, they'll take care of it for you by funding your invoices. All right, Christina, you gave us a little taser. You don't know what you don't know. What else do you know about what you don't know?

No. So many people out there, so many helpful tools out there that people have no idea, so they don't take advantage of it. And his point of, entrepreneurs and business owners should really be researching technology before they start implementing it into their business. Or just to have one IT guy on call and have to rely on him for everything. It's good to educate yourself and to know what's going on.

Yeah. Google News, a little shortcut there. I liked Google sites. I'm not familiar with it. I think maybe we should seriously look to consider. Understand what it is, but maybe implement it here for tracking our project flow and project management, we have big checklists. Maybe it's a good solution for that.

And you don't need to take a college course on it. But even like Michael said, He has a YouTube channel. That's one thing that I do. If I have an issue, I YouTube it first to see if I can figure it out. If not, then I call ourselves that could be.

Yeah. Yeah. Which sometimes, AKA Michael, which is me. Hey, Chris, what'd you learn, brother?

Well, I really liked what he said about one of the biggest benefits of implementing profit first is the regularity. And, you know, I thought of this idea that it's profit first in a way, and, you know, smack me if I'm wrong. But it's almost like profit first creates a scoreboard for you where you can at any moment, you can look at the scoreboard and see what the score is right now.

Yeah, that is exactly right. Sweet mother of God.

What is the hold of.

Yeah, that. You know, I don't know why I chose that sound bit is the wrong button I pushed. But no, you're totally right. It's the numbers in front of you. What gets measured gets done right. And we're not looking at profit until the very end of the year in the old model. And then there's never profit. Now you're looking at literally on a weekly or bi weekly basis you always see in front of you. So it's always being measured and it's being addressed first. Yeah, first.

And you could tell your wife or husband, and then they feel better.

Yeah. You know, that's the second person that says probably save their marriage. The second person.

Oh, and he also used a term called responsible growth, and I really like that.

Dude, you just stole my line. I circled it.

Oh, sorry, dude.

No, it sounds like you ever. Yeah, listen, responsible growth. Like that. Like, I've never heard that term before, but that is it. How many people have you met, Chris, in your life that own a business and they're pounding your chest like, oh, we have seven employees now. Oh, look, we got. We moved into bigger space. Ooh, look at our top line. I heard no ego in Michael Spadaro. Not whatsoever. All I heard him say is, we're being selective who we're going with. We're being responsible. And I don't care about any of that stuff. Top line, size of business. I care how healthy my business is. I mean, it was magic to my ears.

Well, he even said he even. And he. Oh, my God, I'm getting tongue twisted here. He even admitted that he implemented profit first, and nothing in his business changed. He increased profit. And the only thing that he started to notice more is the leakage. And where you. Where you're spending money, that's just useless money. And that's where you can kind of put the patches in.

Yep. Gosh. Wait, did you. Are you reading my notes? Because my note.

My last note, Christine is getting all energetic. She's almost like, you know, Bobby Knightish.

She's been. She's. There she goes, dude, she's been on fire. You offline. You ask her what's going on in her life. She's just, like, hitting everything. Like they say, you know, throw one. It's better to kill a bird with one stone or throw a bird and get two birds.

Two birds with one stone.

Two birds.

Oh, my God, dude.

Six stones. There's a bird. Yeah. Yeah. Well, she nailed, like, she did the old stone throw. She didn't hit two birds. She like six in a row right down the line. But here's the last deal, dude. I'm reiterating what Christina said. I heard the words from Michael that a. The more complex a business gets, the easier it is to play with money, the easier it is to hide money from yourself. And he's tearing out the complexity from his business. Man, this guy was killer.

Yeah, this was crazy. Awesome.

Crazy awesome. Kristin, we got to. When we're done today, email. I want to get his wife on one of our next episodes.

Oh, and Michael just emailed in and said thank you for having him on the show. Oh, nice guy, dude.

He's awesome.

Yeah.

Tremendous.

Oh, man.

We got to get the heck out of here, bro.

We do. It's time to go. So. So, Mike, tell them about Profit First Professionals real quick.

If you and I'm talking to you, listener, got your face next to the speaker. Turn. Get rid of the distractions and listen to me. If you like Michael's story. This is becoming a recurring pattern. It's businesses that are putting their profit first. It is that simple. Put your profit first. But I am telling you, you don't have to do it alone. It can be overbearing. We have Profit First Professionals people that our team. Christina, myself, Ron, Jackie, Aaron, Chris, all these folks we've helped Profit First Professionals, accountants and bookkeepers, help you as entrepreneurs, implement profit first in business successfully and pull it off month after month, quarter after quarter, year after year, and make your wallet fat. That's what we do. Go to the site and click on the find button.

Nice.

Gravitational.

And by the way, you can find out more about me at finding fractalrecording.com producing podcasts for people who want podcasts.

I love it. And you, listener, never forget. It's not what you make, it's what you take.

Thanks, Christina.

Thanks, guys.

Great job. Again, you can find us@profit first podcast.com Listen to all our previous episodes. All the greatest guests, including the one episode we started in Spanish and the one. Well, there's so many others, I can't name them all. Just go listen. Thanks, everybody.

Later. Bridge. Not really where I thought that was the bridge.

Just know when to let go.

I don't believe I've ever seen such a display of courage, skill, nerve, grace, stupidity.