Episode 63: Financing and Profitability with Rev. Dr. K. Bill Dost

There's two voice impersonations I can do. One is Bill Clinton, I love you. And then Beavis and Butthead. And they're basically the same. You just add a lisp. It's like, how you doing, Beavis? How you doing, Beavis? So interesting. Okay, not really interesting. Just saying that. All right, let's roll, bro. Let's roll.

You're listening to the Profit first podcast.

And this is the life changing episode you've been waiting for your entire life. Episode 63. Life changing.

Oh, yeah.

Yeah.

And we're back. Welcome, everyone, to the first podcast. I'm Chris Curran. I'm the founder of Fractal Recording.

And I'm Mike Michalowicz, the author of Profit First. And I'm joined here today by my colleague Christina Buldak.

Hello.

Welcome to another episode, Christina.

Gracias, Christina. This is not npr, by the way. You can speak up.

Oh, gratias.

There you go. I don't know what that word means. You are listening to the Profit first podcast listener. This is where you learn all the insights about profitability. If you listen, last week we had someone that implemented profit first in their business facing some challenges. We help navigate them today. Oh, today's episode is going to blow your mind. Today we're going to explore equipment financing. How's the financing industry work? We need to borrow money. How are they making money by lending us money? We got a guest that's going to tell us about that.

Yeah, because if you don't get that right, then you're going to lose money.

Exactly.

Please. And this show is all about profit. Revenue is beautiful, but profit is even more beautiful. That was bad.

Plentiful.

We're available on itunes and Stitcher and Tunein Radio. That's where you can find our podcast and all our episodes and of course, the website Profit first podcast dot com. And we have a great guest today, but we're going to quickly announce our corporate partners.

Yeah. So thank you to Fundera.

Yep.

Thank you to Tsheet. Thank you to Fundbox. Thank you to Nextiva.

Thank you.

Thank you to my mom. Thank you to my dad. Yeah. Now, we are really proud that our. Our corporate partners have been playing around with us for this long and supporting these wonderful episodes. Dude, we've been up to, bro.

Oh, man. You know, it's. The snow out here in Colorado Springs is strange. Like, it'll snow in the morning like 3, 4 inches by noon. It'll get sunny by 3pm all the roads are clear, dry. Done.

Yeah. You know, that's awesome.

It's like the best of both worlds.

It kind of is, actually. Right. We've been having strange weather.

Yes.

But you know what? I realize I've been saying we've been having stranger weather ever since I've been an adult every year. My God, this, this, this year is really od. You know, it's hot in November, hot in December, and there's rain in February when it should be snowing. But that happens every year.

Exactly.

I don't know.

So what have you been up to, bro?

That was my update, by the way. That was my update.

Christina, what do you notice?

I noticed I'm always saying how weird the weather is.

Well, I just moved into a new apartment.

That's right.

I'm still trying to transfer all my stuff over. That's a bit chaotic, but it feels good.

Did you have to get a moving company to move you?

No, it was called Me and my mother called Hustling. So I'm like jacked from lifting all my running.

You got a two story apartment?

Yeah. So there's a. Just. It's a flight of stairs up into the place and then I have a loft and my bedroom's a loft. So it's a little tiny metal spiral staircase.

How do you. How do you get a bed up?

You had to put a ladder up against the loft and push it on up there.

That was fun.

Really fun.

You and your mom. That's awesome.

Yeah.

You guys some muscle man.

I know.

I. I'm not going to do it. I want to do a whole mom episode now. Like, whatever. I'll bore you the details later. All right. But let's get to this episode. We have a very special guest on. His name is Bill Dost. But it's not Bill Dost. It's Dr. Bill Dost. Oh, I'm sorry, it's not Bach. Dr. Bill Dose. Not Dr. Bill Dose. It's Reverend Dr. Bill Doctor. I am in Quebec City, which is gorgeous. I go up there for a speaking event and I sit. The night before they had like a VIP dinner for people that are facilitating the event. I was. Was flattered to be invited. I sit down next to Dr. Bill Dost and we start talking. He starts sharing all these things about financing and equipment financing. Mind blowing. He is an entrepreneur with interest in a variety of fields. He got started though, in the asset finance field over 18 years ago working for Fidelity Leasing. He started his own business in Canada in 2000 called D& D Leasing. It's been so successful, expanded into the UK in 2009. Wow. He's on the boards of. He's on the boards that include Finance and Lease association, the Asset Finance Professionals Association. He's a fellow of the Leasing Foundation. And I know, Christina, you've been vying to get in all these organizations. He's the guy who can give you access. And in all seriousness, I mean, talk about established. Incredible. And a guy who knows the industry. It is my absolute pleasure to bring on our guest, Reverend Dr. Bill Dost. Welcome. Bill.

Hey, Bill.

Hey. Hey, guys. How are you?

Welcome.

Good.

Great to have you.

That headset sounds amazing.

And the crowd loves you.

Yeah. So thanks for having me, Bill. Oh, it's a pleasure. So many entrepreneurs are confused about financing. What's the biggest misunderstanding or confusion that entrepreneurs have about financing?

Well, I think, you know, in my opinion, the biggest confusion that entrepreneurs have about financing is that they think that just because they're. They've got a modicum of success or that they're, you know, profitable, that they deserve to be financed by their banker. And they don't really think about how they've put their balance sheet together, how their, you know, their income streams are looking. And what I mean simply by that is that so many entrepreneurs will get successful, and they'll think, okay, great. You know, there's, let's say, $100,000 in profit in the company or $500,000 in profit in the company, and they distribute all the profits out of the company. And they're thinking, well, why not? I deserve it, and I'm going to pull all the profit out. And when you do that, no banker will ever want to give you financing because your company really is worth zero. Right. There's no retained earnings in the company. And then they wonder, well, why can't I get that 6% rate that I want or that 4% rate? And the reality really is that just because you're successful, just because you've had profit every single year, that doesn't mean that you deserve to be financed. Financing really is a measure of who you are as an individual, the character that you've put together and the actual covenant of yourself and the covenant of your business. And you have to be intelligent and smart and actually leave money in your company to get money.

Now, hold on, hold on. No, it's a great answer. Are you saying, Doctor, that it takes money to get money?

I'm saying that if you don't have money in your business, your conversation with your banker will be something like this. Mike goes into the bank and says, hi, I've got a great Opportunity. I need to borrow $50,000. And the bank's gonna say, great, Mike, let me look at your financial statements. And the bank looks at it and. And your banker says, well, Mike, I have good news and bad news. The good news is that I see that you've been profitable and you've done really well for yourself. And I'm really, you know, really excited to hear that, Mike. And the good news is that we'll be pleased to give you the $50,000 that you would like. The unfortunate news is that, Mike, what we'd like you to do is to buy a Bank product for $50,000, secure that with us, and we'll lend against that 50,000 that you have secured with us. And what the bank is actually saying is that we're not going to give you any money. We'll just mitigate the risk by you locking it up with us.

Okay, Now, I think of them, the entrepreneur's perspective. If I'm not profitable, that's when I feel I need money the most. And my justification is, if I just had that $50,000, I can finally do the marketing I need to do that will turn my business profitable, or I can finally buy that equipment or inventory. Is that perspective consistent with what you see and what's flawed in that logic?

Well, it is exactly what I see. You're just not going to get that money from the bank. And that's the key difference. Everybody thinks that the bank is the be all and the end all, but the reality is the bank is not in the business of lending money that's going to be at risk. The bank is in the business of mitigating their risk, otherwise known as having no risk at all. And that's why there's alternative financiers like myself who own leasing companies and equipment finance companies, and we take all the risk. So we will lend to those people on a varying degree and a varying sliding scale of interest rates based on that conversation of you not having enough equity in the business or enough retained earnings. And we'll happily lend to you, but then you can't complain of about what the interest rates might be.

Okay, so that's why I want to discuss. Because I'm thinking if a bank feels they can't make money by lending out this money, but you feel you can, the risk doesn't change. It's just as risky. You must be doing something to protect yourself. So it sounds like you do something with interest rates.

We do a number of things. So we're in the business of risk, mitigation Right. Not risk aversion. And so what we'll do is we'll often ask for things that I'm sure you've heard at one point in your life or other. So the first thing will actually, it's not too different than having a negotiation with your children. We ask for a whole lot of backup. We'll ask for down payments. We'll ask for personal guarantees at times, depending on the risk level. And certainly we'll raise the cost of borrowing so you won't see us lending single digit figures ever. There's no money in single digit figures, especially when there's a risk profile associated with somebody who just can't be bothered to leave money in their business.

And for you, when it comes to financing, you specifically do this around equipment, Right? Or do you finance other things too?

So, you know, D and D Leasing lends money for equipment, certainly transportation, but we also do professional loans and working capital loans as well. So we're happy to lend that entrepreneur that wants to have working capital to go and do a massive marketing campaign. We'll help you do that. It's just there is a cost associated with it and that's going to depend on your business.

Why don't we go through kind of a loan scenario? Say I need equipment, our office right here. We're expanding. We need to get. Actually, we have to move to a new space. It's almost imminent now. We're going to need all new computers and new stuff. First of all, is that something that I could approach D and D with and say, can you help me finance this?

Certainly, certainly.

Okay. I go to my bank first. My bank says, no, Mike, you haven't been profitable since you started the business. You're too high of a risk. What would you require from me? Or what would be the process for me securing that financing?

So first of all, this isn't even a scenario where you're profitable and you're pulling all your retained earnings out. You're saying this is a situation where you're not profitable. Correct.

Right, Right.

Okay.

I haven't made money, but I'm on the verge. I'm on the verge.

No problem. It's okay. We have, we have lenders like this and we do lend to this profile. It's no problem. Just be prepared to pay for it. So when we look at the general landscape of funding, there's really three buckets that you can fall into. There is the prime category, which is really bank lending. There's what we call the near prime category, which is, hey, I've got a good business, I'm doing decent, Maybe I pulled out all my retained earnings, or maybe I'm buying an asset that nobody wants. Or there's kind of that one, maybe one or two strikes against you and then you've got subprime. Subprime would be, hey, I, maybe I've got a good personal covenant, I've got some money, but it's a bad asset, or hey, I'm not profitable, one of those kinds of things. Right. So you would pretty much fall into subprime. Now, I'm assuming that in the subprime category, we would help you put together your financing plan. We'd want to know, first of all, what do you need? How much do you need? We need to look at what is your business worth in the sense of how much cash flow do you have? Can you actually afford what you want? How long do you want to pay for it over? If you're saying, I want to pay it back in a year and you have zero cash flow, probably not going to lend you that money. But if you're saying, look, I've got a three year plan, here's how my business is going to grow and we can afford a $500 a month payment. Okay, now we can talk.

I need to know when you say if I can afford a loan, you're talking about can I afford the dollar payment, monthly payment. Okay, gotcha. Okay.

Can you afford it under stress? Because it's important to understand that, okay, I'm not interested in what your balance sheet might look like. I'm not interested in what it might look like when you've got that 100th customer. I need to know what it looks like today. So we'll look at, depending on how much you want, you know, some of your financials, certainly your bank statements. I want to have a really clear picture of what does your cash flow look like. Are you intelligent enough to make sure you don't bounce payments? And this is important for me, it's a character exercise. How you run your finances. And your business is going to tell me how the relationship between us is going to be. Because if you're showing me that you're bouncing checks all over the place, you're biting off more than you can chew consistently, I probably won't be interested. But if you're showing me, you know what, I did bounce a check, but I made good, here's what happened, and you have a story around it, we can forgive that. And so generally what we're looking at is I want to know your business's covenant, how good you are keeping your word. I want to know your personal character. What does Mike's finances look like personally at home? What I've really learned, Mike, is that how you handle your personal finances is indicative how you run your corporate finances. I've never seen somebody in my life have terrible personal finances and have great business finances. It won't happen.

Interesting, interesting.

So you.

So if you're not profitable in your business, you're not making money at home either?

Well, what I'm saying is that I've never seen somebody, you know, not pay Visa personally and yet pay Visa for the business.

Gotcha.

Right.

Handling the money. Yeah, right.

How do you handle your money?

Right.

The money habits.

Yeah, the money habits. Let's now look at the other side because one thing you were sharing with me at dinner, it was mind blowing. Is sharing. Now you're running a business too. And I think as a lender, and I'm the lendee that I see you as, this guy's got tons of money. It's probably not even your money. I don't know where you get it, but what do you care about? So tell us about the other side. Where do you get this money that you lend out in the first place? Sure, sure.

So we raise our money in a variety of ways. We started off borrowing from high net worth individuals and we still borrow from high net worth individuals because they love the interest rate we're able to provide to them. The second place we raise money from is banks and institutions because they can't necessarily make money in what we call the small ticket world. The small ticket world is basically assets and loan contracts under 200,000 where we make money. They'll lend intermediaries like us who will then on lend again. They like guys like us who can lend in that space and make money because we charge a higher interest rate.

It's kind of fascinating because you were showing how banks are risk adverse and they don't do loans. But then quite frankly, they do do loans. They give money to somebody else and you do the loans for them. You somehow mitigate the risk or protect them.

Well, too basically I'm on the line.

Right?

Right.

I'm on the hook. My company's on the hook. And so what will, you know, without boring your audience, what will happen is I'll bring a tranche of, let's say, for ease, ease of numbers, I'll bring out tranche of a million dollars to, you know, let's say J.P. morgan or whatever U.S. bank is. And so here's a million dol of assets. They'll buy the receivable stream. So just the payments I hold and continue to hold title in case anything goes wrong. And that way I can enforce against the customers. I can do all the good legal bits on it. And what's really happening is there's a profit sharing effect. They'll buy the receivables from me at let's say, 6% or something and I'll make the balance of the money.

Got you. So you get money from. Okay, I got you. So just let me summarize for my simpleton mind. You get money from rich people or rich entities. They give you the money. You then lend that money out with the agreement with these rich entities that you're going to collect money and give it back to them. But basically take a fee for administrating the collection process and the lending process.

Kind of. Yeah, kind of.

Okay, so kind of. And you personally put money into this too, right? I mean, there's some Bill Dost money in that mix, right?

Absolutely. I have money in it. My, you know, my partners have money in it. That's how we started the company.

Yeah, it's funny, I think so many entrepreneurs I'm qualifying myself in this group, I just see a lender as this endless source of money. It seems almost faceless to me. And just, you know, it's like a credit card. I don't know where that money comes from. I don't care. I feel I deserve it. So I feel very entitled around it. Do you see people kind of having this entitlement mentality when they lend from you or by going through this process, in this background and history analysis you do of your clients that you avoid that kind of entitlement. Give me the money. And once I have the money, it's your problem mentality.

Listen, there's always entitlement in the world. It all depends on the client. Right. I only talked about the character and the covenant side. There's also, you know, the asset that you're buying and getting out of it. It really depends on the individual you're dealing with. Some individuals really come into you and they say, look, I'm entitled to a low interest rate, so you should give me the money. Because look how great my business is. Or the best ones are the public companies, Right? We're a public company. We demand that we get X interest rate and X amount of money. And then you look at their books and you're going, well, first of all, for a public company, you all never made a profit, you have no retained earnings, and in fact you get a negative balance sheet. Where do you come off telling me anything? Oh, but we're public. Nice for you.

Right? Right.

Here's what.

Or the newspaper every day about losing money.

Don't you know who's on my board?

Yeah, yeah. And so what kind of companies approach you? Is it all size businesses that come to lend money or is there a specific kind of category of business that comes to you?

So we have two streams to our business. I would say. One stream to our business is what we would call the syndication front. These are the customers that are very much that prime category, that bank lend category. And because we have friends in the marketplace, we can just pass them on to those friends and we'll take a fee income off that. It doesn't make sense for us to write them onto our own book. On the flip side, the stuff that we would put onto our own book is what would sit on that near prime subprime categories. And the kinds of customers that we deal with would be under that $2 million in revenue marker or in the UK, under £2 million in revenue. So really we put the S back in SME, small and medium enterprise.

Yeah, yeah.

We like the small entrepreneur. We like that mom and pop shop for a few reasons. One, we're dealing with the decision maker. There's not a whole lot nowhere for them to really hide. More importantly, it sits with our mission statement, which is to change the lives of 1 million entrepreneurs so we get to make an impact with who we're dealing with when we're lending to them. We don't want to deal with the faceless corporate either. So we're just not interested. They can go anywhere for financing. We want to deal with people that we can make an impact with. So typically they have less than 10 employees. Typically, you know, it's your corner shop guy who's got a convenience store or he's a truck driver or, you know, he's got a small business and he's growing and he's doing well, or he can do much better and he just needs a little bit of help. So often what we'll have is guys that have hit 1 or 2 million in revenue and they just need to clean up their books and just need a little bit of help and guidance and we can give that to them as well.

Tell me the couple sour apples you get. I know it happens to you and understand my perspective. I. I'm basically in the financing industry too. Not in your regard But I have clients, I send them an invoice of money they owe me. I've rendered my service and products and now I basically finance them. I wait to collect and every so often there's this bad client that doesn't pay me. For you, I assume the consequences are much bigger. Me, it's a $500 invoice or a thousand dollar invoice. For you it's 500 or $100,000. When, when you get a bad apple, doesn't pay, what are the actions, the legal actions that you take to recoup your money?

Well, listen, honestly, in the beginning we always give service with a smile. You're always going to make a better impact and impression with somebody, especially an entrepreneur. With honey, we always try to work it out. If a customer is really having trouble, we'll forbear, meaning that, you know, we'll work with them, will delay the contract, will even rewrite their contract. However, sometimes it's just not enough. Sometimes all the niceties in the world will not get a customer to pay. You know, either they can't pay or quite frankly they don't want to pay. And in those cases, there's a number of different avenues that are open to you. And we start with the collection agent internal in our office and they'll contact them up to about 90 days. And after that 90 day marker will happen. We'll start down what I like to call, you know, the war path. And at that 90 day marker, we've told the client, look, you know, you're not really responding at this point. Unless you're going to come to the table and work with us, we're going to have to come and get the asset, repossess, whatever it might be. At that repossession point, we repossess, they've got a cure period where they can, you know, prevent that and pay it off. We'll set it up for auction and then we, you know, depending on what's owed, the client has to render us the difference and we can go after them via legal means, which unfortunately can be quite serious. You know, we've, we've had clients where we, you know, it's, it gets heartbreaking.

Oh, I can imagine, I can imagine. Like, because they do a pg, which is a personal guarantee, if they don't pay you back on the business front, you are legally, you as the lender are legally protected. You could take their home or whatever to pay off your costs, right?

Yeah, yeah, absolutely. You know, there's, there's obviously it's not so easy in the sense that you don't, you don't suddenly just say, here, I'm taking your home. There's work behind that. But absolutely, you can, you can go after their house.

You know, I think that sometimes entrepreneurs make or borrow money for almost arbitrary reasons. I say, why are you borrowing money? Because I want to grow my business. Okay, but how are you gonna do it? How do you. What's some good uses of a loan versus bad reasons to get a loan?

Oh, wow. You know, I think if it's a mission critical asset, that's a great use for a loan. So if you own a fish and chip shop and you're getting a fish fryer, that's a great use of equipment finance. Anything that's going to add revenue to your business or is going to be a cost saver in your business. So increasing operational efficiency in your company, great reason to use equipment finance. A great using to do loan finance is, it varies. So a lot of professionals, unfortunately, they're great guys in the head, meaning that lawyers, doctors, dentists, great intellectual minds, very bad with cash. So a great usage for finance for them is their sales tax, believe it or not. Because what happens is that they're so bad or so poor with paying their bills is often what will happen is that they'll get themselves in trouble and they won't pay their retail sales tax. So we've got a product that we can, we provide to lawyers in the United Kingdom where we'll finance their sales tax every three months.

Wow. Because I assume if they didn't pay their sales tax, the locks will be put on their door.

Well, the government come after them. Right. So, you know, yes, it's expensive, but if you get yourself in that hole, then that's a great usage of money. Right. Because you're paying it off. So anywhere, anywhere that'll get you out of trouble is a good usage of money.

And if I can add the caveat. And you better learn from your lesson.

Yeah, absolutely, absolutely. Because otherwise then it becomes crack.

Yeah, yeah. Have you had that where people, you become this crutch for them?

Well, I think people are their own crutches, quite frankly. This is where somebody really needs to learn. You know, how do I, how do I manage money? And you can teach people, but you know, listen, you can't teach somebody everything.

I think we have there is a great book on dinner.

There's ignorance and stupidity and thankfully one is curable and one unfortunately is not.

Right, Right. Yeah. So an ignorant client is a good client. A stupid One not so good.

No, because a stupid one was actually going to be one that hurts you as the lender.

Yeah. Have you heard that saying? And tell me this is really true. They said if. If I can't pay back a bank a ten thousand dollar loan, that's my problem. If I can't pay back a bank a 10 million dollar loan, that's their problem. Can you, can your loans get too big? I mean, is there a certain point where regardless of how sound and pretty things look, just the numbers are so big that it just doesn't make sense for you to do.

Well, listen, we don't do loans that large anymore. We had time in our business. Well, yeah, we got burned. You know, we had a time in our, in our history. And I'm happy to share this as a. To give other people. Here's what you don't do. Where we had a client that was happily on his way of borrowing and borrowing and borrowing. And, you know, and we had that greed effect come in. Right. This was before the stock market crash and all that, where we just happily lent to him because he was paying a ridiculous interest rate. He was a professional. So we were happy to do it. Like, well, what could go wrong? Well, I'll tell you what went wrong. A, he was using all the money to go gambling. He wasn't actually.

Oh my God, baby.

He was amassing other debt on the side of it. C, he got so far behind the eight ball that he figured the only way he'd get out is to cash in an insurance policy. And so he decided to cut off his thumb.

Are you kidding me?

I'm dead serious. So what he did was that he had a flat on the side of the road and supposedly got his thumb caught underneath the tire and it was half severed and used an ice pick to chop the rest of it off. Got rushed to the hospital, it couldn't be reattached. This went on in court for over a year because the insurance company didn't want to pay out.

Yeah, sure.

They actually hired an engineering firm, believe it or not, to come in and make a video of how this could even be possible. And they basically determined it was fraud, but decided to settle anyways. And they settled just enough to, you know, I think again, a third of his policy. And what ended up happening is another doctor came in and bought his practice. And that's how we got out of it.

Oh, my God. If you're lopping up your thumb for money. Yeah. Christina showed me her missing finger. Oh my God.

And that's how we. We learned that there's something called exposure limits. And so we adhere to our exposure limits very, very, very, very strictly to break our exposure limits. Two of our senior managers have to come in and agree with me to break an exposure limit for any one client. And they have to be a rock solid client for us to break our exposure limit. And even then, we think twice, and we, you know, we won't let them to continue to borrow. We'll say this is your exposure limit. We've now broken it to this. We've allowed you to do X amount of lend. There will be no more lend until you come back under the exposure limit, period.

Wow. Wow, Bill, this has been fascinating stuff. We got to get going. But you know what, Kristen, Bill, we'd love to have you back. It's so rare that we have someone on your side, the other side of entrepreneurs sharing the reality. What's happening? Would you be wanting to come back? Some future episode?

I'd love to come back. I feel like all I've done is talk. So I feel bad that.

No, that's your job. That's your job, man. Bill, this has been fantastic. Thank you for joining us. And we're gonna have you back a few episodes from now for sure.

And Your website is deleasing.com, right?

That's correct. Yes.

Yeah, so we'll have that in the show notes as well. Yep.

Great. Yep, we will. Thank you, Bill.

Awesome. Thanks, Bill.

Thank you.

Very welcome.

Wow. Chris. Christina. Chris, I'm gonna start with you, bro. First, I'm gonna start with our sponsors, then I start with you. I want to talk about what we learned here.

Yeah, we're gonna talk about what we learned. We're gonna break this down even further.

Yeah, no, I just think, I mean, what fascinating insights. You know, a guy wanted to come on the show that lends money and share what their business is about. I just opened my eyes to a lot of things. But first, I want to thank our corporate partners. You know, one of our corporate partners is Fundera. They're a lending source, too.

Yeah.

If you need money now. Bill joined us. He. He services the Canadian and the UK market. Fundera targets the US markets and others markets too, but they use places like D and D. So you go to Fundera, they will reach out to Bill, do all the negotiating, and find which option is best for you. So check out fundera.com fundbox. If you have an invoice that's coming in and you want to cut off the thumb of your customer because you're so jacked up about it, you don't have to do it. Fundbox will collect the money for you. Not from the customer. They'll give you the money, and then you got to continue the collection process on your own. It's invoice financing. Nextiva. Hey, if you want to fund getting equipment. You know, he's talking about that fish fryer. I was thinking, well, that that fish and chip store needs to be answering the phones for customers calling for the takeout. You could use a nextiva phone system for that. Nextiva is a voiceover IP phone system. We've been using them for years. Love them. And then, of course, last but not least is tsheets, time tracking software, GPS software. You know, where your employees, what they're doing, when they're doing, when they're not doing it makes the process of doing payroll and tracking what people are doing so efficient, so easy. We've been using it now. I think we're almost at a year or eight months. Six months. Maybe six months.

Maybe six months.

Six months.

I use the text message feature almost every day.

Oh, yeah, you can text in your time. Yeah. So it's just really, really powerful. So thank you to our corporate partners. Chris, what did you learn from Dr. Reverend Bill, or it's actually Reverend Dr. Bill Dost.

Yeah, I learned that the money habits you have at home, you'll have the same money habits in your business. And, and that's funny. During the interview, you're like, I think there's a guy who wrote a book that applies to how to handle money in your life.

It's called Profit First. It's a pretty good book.

Yeah.

So I just think that's, you know, that's what Profit first actually solves so many of those problems. Solves all those problems. So it's powerful. And a question for you too, Mike.

Yo, lay it on me, bro.

Yeah, so when he was talking about that, when he looks at a company and he's deciding whether to lend them money or not, he wants to know if they have any profit stored in their bank accounts. Right? So my question is, if, let's say you have 50 grand saved in your bank account as profit, would you like, if something comes up for $40,000, wouldn't you just spend your 40? Or maybe sometimes you would go borrow.

Question. Yeah, you. You may borrow. So here's the thing. When you don't need money is when you have the easiest access to money, more money. The thing is, you want to have a cushion in some businesses. So yes. If you have 40,000 and you're borrowing 40,000, you could spend your own cash, but then that puts you in a cash zero position. Say the next month, you have a bad month, and like, you know, all hell breaks loose. And. And you. You don't have any sales. Now you need money, and you try to get a loan. You don't have any money, so you can't get a loan. So ironically, when you have money, sometimes getting a loan is a good idea because you'll get with the product you need, but you'll still have that cushion available for you. What I liked, what I learned from Bill is mission critical. I said, you know, what's a good loan? What's a bad loan? He says, if it's mission critical, that's when you finance it. When it's not, don't do it. That fish fryer, you need a fish cooker. Yeah, that. That's core to your business. Do you need that fancy delivery truck out there that's really beautiful? No, you can deliver it in an automobile that you already have a clunker. So think about the mission critical things is what I heard from Bill, and that's where you should do financing. What'd you learn?

I kind of interesting that they break it down into three different categories for funding. There's the prime, which is, you know, you're completely suitable to loan some money at. There's a near prime, which is you're doing pretty decent, but you have one or two strikes against you. And then there's a subprime, where you have some money, but you have a bad asset or you're not profitable. But even if you're in a subprime category, it doesn't mean that they won't necessarily lend you the money. It's just they want to help you with a finance plan that they'll help you through it, which I thought was interesting.

Yeah, interesting how they categorized. I thought it was funny that each word had prime. So when he called me subprime, I still felt good about myself. I did. I'm like, hey, I may not be prime, but at least I'm subprime. All right, bro, we got a rock and roll, man. We got another episode. We're recording two in a row here. We got another cool episode that's going to come up and broadcast next week. So we. We better get out of here.

Yeah. So thanks for listening. And by the way, check us out on itunes and stitcher and tunein radio and of course, our website, profitfirstpodcast. Dot com. And if you want to know more about podcasting, go to my website, fractalrecording.com and if you want to get help being profitable, call Mike. Right, Mike.

Yeah. Go to profitfirstprofessionals.com and we will find you an accountant or bookkeeper that can help navigate your business to greater profitability. And by the way, and. And if you are a Profit first professional, you're getting a bonus material. So this interview you just heard, there's some additional stuff Bill's gonna be sharing with us that we're only sharing with our Profit first professional members.

And if you want to dip your toe in using Profit first, we have a Profit first app that you can put on your phone.

The app is out. Yeah. So go to itunes right now. The apps are store. And then type in profit first and you'll see this great, great app that we have available for you.

That's right. Thanks for listening, everybody. Check out all our previous episodes. You know, sometimes on a weekend, you want to binge listen while you're mowing your lawn or walking through the woods or lounging on the beach.

Right.

People do that.

We've gotten emails.

You better get amped up for next week's episode. She's already in studio. She is my wife. We're going to talk about Mary to Mayhem. What's like to be married to an entrepreneur. Yeah. Because we're doing with some folks from France, so get ready for that one.

All right, thanks for listening, everybody.