Episode 83: with Michael ONeal

I would get him a little closer to you and then just right in the face and say, ready means ready. We're ready for one more thing, by the way.

We are.

We are ready for episode 83, Chris.

Of the Profit first podcast.

Oh, yes. Oh.

We had to make up for grunting from last episode. We were very light on the grunting.

That was me beating you.

Yeah.

And the whipping. All right, welcome, everybody, to the show. I am Chris Curran, the founder of Fractal Recording.

And on my. Mike Michalowicz, the author of Profit Hearst. I don't know. Yeah, I was gonna say profit first, and I was gonna start saying a joke at the same time, and it collapsed. Author of Profit First. I'm here in studio with Christina Boldak. Hey there. And you are listening to the Profit first podcast. We talk about every angle of profitability, talk about last week's episode, from just being a badass to total gear shift to how to make a podcast show itself profitable. We're not talking about this show. We're talking about a guest we have going on in a little bit. So it's going to be crazy.

That's right. It's going to be crazy. And that's right. We talk about profit on the show. Revenue is wonderful, but profit is.

I'm trying to think of a word. Ends in full. Yeah, Wonderful. Let me.

Plentiful.

Yes.

Yes.

That was good. Thank you.

You can hear us as a podcast on itunes, Stitcher, Tunein Radio, and whatever podcaster you use. I personally have an Android. I use Podcast Addict, by the way, which is a good. It's a good Android one. And yet our website, Profit first podcast dot com. Right. Profit first podcast dot com. All of our past episodes, a bunch of great, funny pictures of Mike Michalowitz and all kinds of resources on profit. It's. It's the destination to be at.

I was just there recently and went through the beard phase. I was checking out there. My scruffy beard. Huh? I don't know if I liked it, but.

Hmm.

Yeah, it's not coming back, I'll tell you that. What have you been up to, Chris?

You know, I've been working with the new client, and it's actually a podcast network which launched recently. It's the Forbes Podcast Network.

Holy cow, dude.

10 shows. Actually 11 shows now. A 12th one coming, and I've been working on it for a couple months. I couldn't say anything. You've known about it all along, Mike.

Well, you were inviting a lot of people on. You're. You were Inviting a lot of other guests because you had some influence over. They were asking you who do you know, and. And you suggested me to Forbes and Forbes came back and said, oh, hell no. But, but, but you have an amazing series lined up. I'm wishing you great success with that, brother.

That's awesome, Chris.

Thank you. Yeah, it is good. And I actually have audio from when. When Mike actually first asked to. To be on the network. And this is what Forbes said.

No way. You crazy. God, they are just belligerent. They really, really not.

So what have you been up to, Mike?

Dude, I may have big news too, but, you know, we're recording this now. The news got. We announced it internally yesterday under NDA, but I don't know if the contract will be signed by then, so I can't say anything. That's what I'm up to.

Right?

There's something cool going on.

But your new book is also out too, right?

My new book is out May 30, so we're weeks away from that. It's called Surge. Pick it up right now. It is. I'm really proud of this book. I just finished the reading, actually. I'm sorry. Tonight is the last scheduled reading of the book and for the audiobook. Audio version. Yeah, it's gonna be really cool. Yeah, a lot of added bonuses and little in the moment tips and stuff like that.

I'm proud of you, bro. I'm gonna punch you just for that.

Yes. Thank you.

Great job. New book.

I'm proud of our sponsors.

Yeah.

I want to thank you. Thanks to Fundera Fundbox. I gotta stop saying them together. I should really put. I'll bookend them. So I want to Fundera thank tsheets, nextiva, Receipt bank, and Fundbox for being supporters of this program. We'll give you a little more details on those folks afterwards. Shockingly, they all came back after last week's episode and said, yeah, yeah, we'll support another one. Yeah. You know, today you're gonna hear from a guy named Michael o' Neill. Now, I shouldn't just say a guy. Cause I know you know who he is. I know you know the Solopreneur Hour with Michael o' Neill. It was actually the first podcast I started listening to.

Wow.

Now, this podcast has only been around for 13 months, so you can see I'm kind of new to podcasting. Yeah. And in its scant 13 months, had already garnered 7 million downloads.

That's crazy, dude.

That's more than. People eat McDonald's hamburgers. I mean, that's a lot. You know, they say billion server, million serve. They could in 13 months. If McDonald's did that, they would be game over. Michael is a wildly popular podcaster, one of the biggest names when it comes to the entrepreneurial space. When it comes to podcasting, a must listen to show, so please sign up for it. But he's also a professional drummer. He's a competitive racquetball player. He's a car racer, if that's the right word for car racing. Yeah, he's a car racer.

Nice.

And he's an expert mountain bike racer too. And he is a penchant. Penchant for stand up comedy.

Oh, yeah, yeah.

And Michael is here not only to tell us about how to be successful in building a podcast, but. But he's implementing profit first in his business. So we're gonna talk about some tweaks and nuances to really employing his business fully.

Wow.

Michael, welcome to the show.

Hey, what's going on? Mike and Christina and Chris, how are you?

Hey. Yeah, welcome.

I realize that I really have to update my bio because I launched in August of 2013, so I'm like two and a half years in, I think, versus a scant 13 months.

A scant.

It's scant 29 months or something. Yeah.

Okay.

As I'm reading that, I'm like, I don't think this is right, but it's in wr. So I keep reading it.

Yeah, yeah.

So how many downloads are you at now?

Well, the downloads part is right. I guess I updated that part, but not the 13 months part.

Oh, no, I would leave the scant 13 months forever then.

Sure. It should be there like 10 years in. He's been operating for a scant 13 months.

Exactly.

Two billion down.

He's two billion downloads. That's right.

So tell us. First, we want to understand the basics of getting a podcast going and building a business around it, and then we'll talk about profit first. But how did you get started? And how do you build a profit a profitable business, podcasting?

Well, I got started. It was. It was kind of an accident. I was kind of doing a behind the scenes. I was producing another show called the Kick Ass Life with David Wood and I. He was away climbing Mount Kilimanjaro, of course.

Of course.

As you do. And we kind of prided ourselves on being able to publish shows from all over the world because he traveled a lot and he would take his little zoom recorder with him and upload a file to Dropbox, and I'd put the show out but man, was he off the grid. And so the Thursday show was due and it was like, well, we need something and the show must go on. And as you mentioned, I've been on stages a bit in my life and I said, all right, well, let me do a show on social media. So I did like a social media training episode because that's what I was doing a lot of at the time. And I found it a couple things. One, I found it to be very, very natural and comfortable. And two, I got a bunch of feedback and people were like, you should do that. You should do that. So that's kind of where the seed was planted. And then may have went down the wrong pipe, as my mom would say. By the way, I never a single meal I ever ate with my mother. Did she not choke on something and say it went down the wrong pipe?

It's always the wrong pipe.

Right. I think it's genetic.

Yeah.

Anyway, your mom sounds like Mike's Michael. It's his father.

My father.

Oh, my goodness.

For God's sake, Michael, stop getting food lodged down the wrong pipe.

Right, exactly. But so I had lunch with a guy here in San Diego called Pat Flynn who runs smartpassiveincome.com.

I know Pat Flynn, or of Pat Flynn.

Yes. And he. We had this great chat for a couple hours. We talked about life and relationships and cars and fashion and just whatever. We were dudes for a couple hours. And he walked out and he stopped while we were on. I said, dude, thank you. I never get to do that. Every time I'm ever talking, it's always about spi. Smart, passive income. And so I thought, well, wouldn't that be interesting? What if I did a show and we sort of talked around everything that someone did, but we really just got to know who they were as people. And that's really where the basis of the Solopreneur hour started. I said, what if I can just truly sit down and have a one on one? You've been on the show, you know.

Yeah.

A one on one coffee shop kind of conversation with no real agenda. I don't want someone to be like, well, I can have 10 actionable tips for your audience. I'm like, you don't need to do that. I'd rather find out about who you are and what your story is. And I think because that was so different than everybody else in the entrepreneurial space that people started digging it, you.

Know, I mean, really digging it. You got 7 million downloads in a scant 13 months.

Exactly, exactly.

But so how do you. How did you build such a massive following?

Well, I think the show. I think the timing certainly helped, and I think that the. The show itself, the two factors I think that were biggest influence at the beginning was long before I was a podcaster. I was a branding guy. I was a brand and branding guy and a designer and a kind of a creative agency dude. And so I knew, walking into it, two things. Plus I was a huge Howard Stern fan. And I said. And the way I thought of it, I said, I don't want someone to, you know, be listening to morning radio or NPR or Howard Stern and then log on to my janky sounding podcast and go, oh, this is what podcasting is. So I thought, well, let me. Let me nail the brand, because I think that's one of the most important things you can do, if not the most important thing you can do. And let me not compromise at all on sound quality. So I wanted them to really, the second they tuned in, go, oh, all right, so this sounds like it's supposed to. I think that really helped at the beginning because I was in a sea of people that were, in my opinion, very misinformed. Like, I'll just get it up there and just get. Any way you need to just get it up and record it. And I'm like, I don't think that's how people work. I think they're gonna listen to it and go, this sounds awful. And I don't trust the content because it sounds awful.

Did you time it right? I mean, were most podcasts back in 2013 still trying to play the quantity game? Just get it up, get it up, get it up. And not focusing on the quality yet.

Yeah, I think that. And I don't. I think that one of the major mistakes is certainly in the entrepreneurial space, is they. They everybody focused on actionable content versus entertainment. And I think that. I think entertainment trumps all you have. You have to have something. You guys have a great. Your show is super entertaining, and it happens to be about profit first. Right. It's not just like, okay, and in chapter seven, we talked about. And if you did, you'd get some listeners because the content's great, but you wouldn't be able to sustain a show for a couple of years. And I think that's the big deal is being able to kind of, you know, I was number 19 yesterday in my category, and it's like, all right, well, that's good. I'll take that. Two and a half years in. You know what I mean?

Yeah.

So I think that's the main thing. And I also never had a monetization plan. I think another mistake people make when they podcast is like, oh, I think I can monetize this niche, so I'm gonna do a show on that versus I love talking about this subject. And I would do it if nine people were listening. Consequently, a lot more people than nine listen to it because they can tell you're passionate about it. They can tell you're, you know. Cause, you know, as you guys know, I'm sure when it's two in the morning and you've lost the recording that was supposed to be out that day, and you're like, oh, I gotta record another show right now. You better love what you're talking about. And it better not just be something that you monetize from a niche. So that was always my philosophy on it. Thankfully, you know, a few months into it, people said, you know, do you, do you do any coaching or do you do any of this stuff? And so I, I put some stuff in place for that. And then advertisers came a few months later.

It's so funny.

How did you sustain. I'm sorry, Chris.

We can say no, it's so funny. You picked the number nine for an audience size. That's our audience, actually. Hey, that's it. Actually, we're hoping for 10 soon.

Relatives, friends, family, and then that one stranger.

Sorry. True, actually, sadly true. How did you support yourself, though? If you weren't monetizing your podcast and devoting so much time to it, how did you make an income?

I think that for me, you know, my whole show is about being a solopreneur, which means anytime that you. Someone hires your business, they're really getting you and, or you're not trying to necessarily build a company. You're trying to build a life of just time, freedom, financial freedom, that kind of thing. So I think that the, the first step to any good solopreneur endeavor is to, you know, to utilize whatever skills you have and pay your bills with those. So in my case, I was, you know, like I said, I was a web guy for 15, 16 years at that point. I was really solid, really good branding guy, and I did. I'd been doing a ton of social media training for different kinds of companies and traveling around and helping their whole teams like real estate agencies, car dealerships, things like that. I could walk in and give them a strategy, hair salons. So I had that as a gig. But as we all know, we don't want to Just trade time for money. So I always had the agenda of getting away from that. I started the show because I wanted to do the show. And it happened that people liked my message. And it was one of those. Remember that scene in the Bourne Identity when he's in like Poland and the two cops poke him and he's sleeping on the bench and he starts speaking Polish or whatever it was, and he surprises himself that he was like, oh, I didn't know I knew how to speak Polish. And then he kicks their butt in two seconds. That's kind of how it was for me with coaching. This stuff is like, I didn't know. I didn't know that I possessed it. And then as people started asking me questions, I was like, oh, I don't know. I knew the answer to that. But here we are, you know, now.

Now at a certain point, you monetize it. That means, well, I want to. How you monetize it? I think sponsors, maybe there's other things. I don't know if you can get a sense. Give us a sense for the numbers to. Whatever you can share, we'd love to hear.

Yeah, of course. So again, the, the. I thought at some point, if I had enough listens, I could get sponsors. And I think that's a great. It's a great concept to have. They're typically not the best way to like, I think it'll be if you do it right. I think that's. Sponsors are probably a fraction of the income you can make from a podcast.

Interesting.

The important part about a podcast to an audience is really your third party validation, your social credibility, that it opens up so many doors, just like a book does when you wrote your first book. And all of a sudden people are like, hey, can you come speak at this thing or can you. There's a lot of that that happens with podcasting because versus radio. Podcasting is a really intimate communication methodology. You're like in people's earballs and you're in there and you know what I mean? And they really think that you're like speaking one to one with them versus like, hey, this is krq, everybody. Like, and it feels like a real one to many, which is what traditional radio does.

Right.

So when something happens and you have. If someone's listening to who you are, and they really get a sense of who you are, depending on how much you are transparent on your show. And I'm very. I started getting emails that said, hey, do you do any sort of coaching for this sort of stuff? And I said, oh, hell no.

Oh, I'm sorry. I thought that was a response. I'm sorry, I'm sorry.

And I said, no, I don't do that at all. And then after, like, the. Literally about the 40th email, I thought, God, I should probably do some kind of coaching on this stuff. And so I put together a group coaching program. So I instantly scaled it and said, all right, if anybody cares about what I have to say, let me do this little thing. I created this group called Solo Lab, and because whenever I'm working on a new thing, I. I consider it me being in the lab. And so I thought, let me do. Let me do a thing called Solab. And I. I put it out on the show and said, hey, if anybody's interested in this, like, group coaching program, I can. I can help you validate, you know, who you are in terms of your ideas of, like, how you might want to build a business or, you know, help you kind of find your swing. Let me know. You can sign up on this little schedule once, and if you're into, we'll do a little quick Skype back and forth and, you know, and I'll tell you about what I have in mind. So I did, like, 40 of those. And at the end of those, I said, if I started this thing next week, are you a definite yes, a definite no, or a definite maybe? And I got enough definite yeses that I thought, I think I got 17 out of 40 that said, yes, I will do this. I said, all right, proofs in the pudding. So I set up a landing page the following week. Had nothing built, and we'll see. And it was like, I think I was charging 300 bucks for a quarter. You know, like, let me just see what happens. And I got, I think I got 13 signups the first day. And by the end of the first week, I had, I think, 30, 39 people in solo Lab. So I'd instantly monetize it to whatever that is, $12,000 or something in the. In that week. And I thought, okay, well, that's cool. And at the time, all it was, you guys was a private Facebook group. That was. Solo Lab was a private. It was just a community. And then I sort of added this little bonus where if you were the first 10 people, I'll do like a 30 minute coaching session with you on the phone. I'll do two of those. And so people jumped on those, and then I found that I really liked them, so then I just included those. So now we do coaching calls, and I do A Google hangout every Wednesday. And, and then I do the private Facebook group and that was worth almost 200k last year of revenue. Yeah.

Wow.

And it was not, not a lot of heavy lifting at all.

It's all generated through the podcast. I mean, do you, you've built an email list and you think email them or are you just telling the podcast.

I kind of, I almost don't like earmuffs. Everyone who's really into funnels. I don't. I'm not a huge Internet marketing guy. Like, I really like the part where I get to do this stuff and talk on the mic and have great conversations. I kind of hate the rest of it. And so. And I realized that I'm leaving a lot on the table and I'm, I'm working on that now. I'm like, okay, you know what? Maybe I really. So my mailing list is not much, maybe 3,000. At this point it should be 30, 40, at least. But I need to get over some stuff regarding. I was just talking to Mike Koenigs yesterday about that very thing.

You know, still have as many downloads as you're doing something clearly very, very right.

So now advertisers came after that.

Oh, yeah.

And so can you tell us seven months in. Yeah.

How much revenue are you making on an annual basis now through all the different sources of income for your podcast?

I did like, I think after taxes last year. I think I did 186.

Nice.

Yeah. And that's, and that's all I do. So I don't have, I don't do any other stuff. So this is, it's the podcast, it's solo lab, it's advertising. And I started a little group called Pod Mastery for people that wanted to do podcasting for a living. And so I try to cut through all the BS that I think is out there and, and try to give them the real scoop. So that's like a one day workshop that people pay a thousand bucks a piece for and I will do like 20 at a time.

And then you and I started emailing back and forth. This is about a week or two ago. I guess you discovered profit first through entrepreneurs on fire.

Yeah. So jld, I was like, I mean, you know, John, John Lee Dumas is the guy who, I mean, he was already successful coming into podcasting because he really, he's, he's the most, he's the brightest marketing mind I know. Like he's so good at, at identifying a need and finding something and then over delivering it. Like it's Just what he does for a living, literally. And John has made, I think his. Between all of his initiatives that all stemmed from his podcast, I think he's done. I think he's made 5 or 6 million since 2013 with his show.

Son of a bitch.

Yeah. Yeah. I mean, he's. He's done that. He's done 20. I think he's got 2200 people in Podcasters paradise, and they're paying 1200 bucks a piece.

Oh, my God.

So that's amazing. In fact, he's moving to Puerto rico to save $150,000 a month in taxes.

Oh, my God.

Oh, my God.

He moves May 1st.

Okay. So. So. So now I'm.

He's in a different world. He's in a different world.

But he's talking about profit first, I guess. And that's how you discovered it.

Yeah. So I said, what's the. I said, dude, I. You know, I. I had this occasion, November 2013. I had one of the first, like, $10,000 checks in my hand that I'd ever gotten.

Nice.

And I was like, I don't know what to do with this. Literally, I had no idea what to. I'm like, I know I'm supposed to do things with this money.

Leave the country so you can save on taxes.

He said, yeah, except. Well, except put it in. Well, technically, Puerto Rico is in the U.S. that's true.

Touche.

But I didn't know. And I said, I know I'm supposed to be doing something with this, and instead of just putting it in a bank account, we. Which I know I would piss away. And I did. Of course. That's exactly what I did. And so I sort of gone through that cycle, and I've been okay with it. I had a huge financial hit last year because my dog got cancer. And I tried. I tried to save him as much as I could, and that was a $22,000 hit for me. But I needed more financial literacy. It's something I never got from my family or even from some of the books, like Rich Dad, Poor dad, and that kind of. And I said, what's the book, man? What do I do? And he goes, profit first. He goes, that. That is how those concepts are what I. What I. I use what I live by.

So awesome.

And I said, okay. And I read it. And I was like, ah, yes. This is exactly what. Because when I first started listening to it, dude, I was like, oh, he's talking exactly to me. Exactly who you are. I don't. I didn't do like, the. Here's my Ferrari stuff. But I did do the. If it's in an account, I will. It'll go away. Like, I'll. I'll find a way to spend. To spend the money for sure. I'm like an audiophile nerd. So I'll find a new amplifier to.

Right, right, right, right. That's. Yeah.

You know, for some reason. Oh, I gotta reward myself for putting out a show this week. So let me buy a $2,000amplifier, you know?

So now, where do you stand in your implementation of Profit first right now?

So now I have my. I was actually celebrating on Saturday by. By doing my first major distribution.

Oh, nice. You did your quarterly distribution.

Well, no, quarterly. I started reading the thing a week and a half ago. So I did my first. Like, I'd had, like, six or seven grand in my PayPal account. I'm like, all right. And I'd set up all my accounts on. So I did profit and taxes in a capital1,360 account off, like, online. No card, no access. And then I have. And then I have my owner's pay, which is in my. Essentially, my personal checking and my operating expenses is in my business checking. And I had that, like, six or seven grand, and I divvied it all up, and I was like, yes. And I did it. I sent them all to the accounts, and I was like, all right. That was the major first step. And it felt so good to have clarity on it. That's the biggest thing is it's, like, so much less. Like, now I can't wait for money to come in so I can divvy it up. I'm very excited about that.

Yeah, no, that's huge. And so just so the folks listening in to understand that, you know, the first step of Profit first is to bring clarity before you use the money. It's called an allocation process, meaning to allocate money to its purpose, its intended purpose before you spend it. It's the old envelope system that. You know, we were talking about this a few episodes back, Christina, with your grandma dividing up the apple. When. When you allocate money to different envelopes in advance, you at least know what the purpose is. And the result is you don't get rich overnight, but you get confidence overnight, so you pass. Yeah.

And I've been raving. I did a whole huge Snapchat the other day about profit first. I'm sure I sold at least 30 books.

Oh, that's awesome, dude.

That's awesome.

You were the guy.

I will sell the S out of this book. I promise once it enters into my zeitgeist, I'll be talking about it all the time.

Oh my God.

So I need a landing page or something, dude.

Yeah, yeah, you got it. No, you got it. So where do you stand now and what can I help you through?

So here's what I don't know yet. So every. Every month, I do have people, just really one person that I pay to do my show notes and some other stuff. And that may. That may start to grow a little bit. So I need to know where to allocate my outsourced folks. And I'm not entirely sure with like. Like rent payment, car payment, those kinds of things, which I know I can partially write off.

Yep.

So I'm trying to decide if I'm supposed to split between accounts or how that works.

Yep.

And then I don't. I don't yet completely get the vault.

Okay.

I have one set up, but I don't know what to do with it.

Okay.

And my. And my allocations right now are 20% tax, 15% profit, 30% owners pay 35% operating expenses. So if I need to tweak those numbers, you can let me know that as well.

Yeah. So let me go kind of through the series of things. When it comes to your. Your contractors, any expense you're having, rent, stuff like that, it comes out of the operating expense account. Now here's the. The most important thing, Michael, you got to understand. It's based upon a behavioral theorem called Parkinson's law. And in short, Parkinson's law says the more available something is, the more we automatically consume it. And you've experienced this with money. One of the analogies I use all the time is toothpaste. If we have a brand new tube of toothpaste, we use a lot of toothpaste. If it's empty, we bend it over the corner of the sink. We bite it. We will find innovative ways and be more frugal about its use.

Small purse, big purse. Right, Christina? Yeah, yeah, yeah. Fills them right up.

So your operating expenses. Yeah, yeah, exactly. Yeah. Do you carry a purse around?

I do.

How did I see your purse?

What?

How did he see your purse?

I don't know. He like Jetta mind tricked me over here.

I've never seen your purse in the office. I gotta now.

Well. Cause I keep it under the desk. That's true. Yeah.

Hold on. I didn't see her purse. I just know women carry purses and when there's a big purse, they fill the damn thing up. And when it's small, they fill the damn thing up.

That's very true.

You work with the space that you got.

I'll tell you one thing. Your boyfriend, what he was doing earlier before anyways. Delaying. If he sneaks a little of that stuff in your purse, that could be trouble.

Can we not advertise?

Yeah.

The other part.

Chewing gum.

Yeah, exactly.

That. That sort of relates to Parkinson's law that I got from my buddy Nick Unsworth was if you wait till the last minute, it only takes a minute.

Parkinson's law applies to time, so you're knowing. So all your expenses come out of your operating expenses, even.

Even rent.

Oh, well, let me give you the one cool caveat. That car payment of yours, or perhaps rent, if it's your rent of your apartment or home.

Yeah, that.

Okay. When it benefits the owner, but the business can still take a tax cut or benefit from it financially in some way. You would actually put into owner's pay and then take it out. And I kind of regret calling owner's pay. I should call it owner's benefits. And when I write. I'm rewriting the book, actually, for the next version I may actually revise to, say, owner's benefits.

Can you put a little. Thanks, Michael.

Thanks, Michael o' Neill.

The o' Neill benefit.

That's actually perfect. Can you write the forward to me?

All right, so set up another account. Well, the profit first benefit that I will send to you. And. But so. So put it into owner's pay, but then take it out of there. Now, when I say take it out, the company pays the bills directly, and this way you receive the tax benefit, but the money's been allocated to your purpose. It's still important to differentiate. Some people say, well, why don't you just blend all the accounts together? Because you want to know where the money's coming from. When you log into your bank account on your phone, you want to have an instant assessment, saying, okay, I have this much reserved for my benefits. I have this much reserve for the company's operations and so forth. A couple other elements with the profit account. Keep piling that money up, keep hiding it away, but on a quarterly basis. And this is what I thought you were talking about when you said you did a distribution on a quarterly basis. We take that profit out, and the rule is you're only to celebrate with that money. That money is never go back in the business. Because if it does, you're basically telling the business, I can't run you on the operating expenses. Here's a little booster shot.

Wait, wait. I'm taking out the 15%. I've been stacking away that profit you're.

Going to take out on a quarterly basis as a celebratory account now.

Really?

Yeah. Oh yeah, dude. That's a profit distribution. Large corporations, end of the quarter, they announced, hey, Bloomberg announces that ford is taking 15 cents a share distribution. They. I don't know why they did that was not necessary. But you do the same thing. But you don't own 15, you know, or one share or whatever. You own the whole effin business.

Wow, interesting.

Okay, now that profit distribution that comes out is for your celebration. It is an you're doing two things as an owner of a business. A, you've taken, you've had the courage and guts to start the business and you have equity in the business. If the business is a total flop, you're on the wire for this. That's called the owner responsibility. As an owner of the business, you get a profit distribution. As an owner operator. You're also an operator. You do the podcast, you make the business run. That's what owner's pay is for operating the business. So you get two benefits. When that profit distribution comes out, don't ever plow it back into the business. Reinvest any of those fancy schmancy bullshit terms. It is only for you to celebrate with to reward yourself.

Can I pay my mortgage with it though or do I have to literally celebrate?

Well, you shouldn't pay your mortgage with your owner's pay is designed to support your lifestyle. Profit distributions is above and beyond.

Well, so yeah, I meant pay it in terms of pay down the principal on my mortgage, whatever.

Anyway, when you take your profit out, if, if you find the most joy out of whacking out some debt that you have, do it. Personal debt. If you get the most joy out of buying that new sound equipment, this is where you use it. The idea is for it to have it be a tactile, an emotional and field felt like you feel the experience and it's visual ideally because that way you'll be reminded of it. But even paying off debt, I'm a huge fan of a huge fan of it. So you can use it for that purpose. So that's what that's intended for.

Wow, I didn't realize you just, you just grabbed it from that profit and then that was it. Like you just use that, you grab it. I didn't realize that.

Okay, interesting now and again. This, this is a behavioral thing. Quarterly means every 90 days it gets you into a rhythm of anticipation, anticipation and then excitement or achievement. Rewarding, right. And then it gets through that cycle again. We just completed, when we're recording this, we just completed first quarter. And now I'm in this anticipation stage saying okay, gotta really make this business go to get those profits up and up and up.

So, so should I then on that note, because March just ended, should I just assume that what it's in there now or I guess, I guess since I'm, I shouldn't spend the stuff that's in there now, I should just let this quarter go. Right?

Exactly.

So go to go to June or whatever.

Yep. And a quarter now. The vault account is reserved for rainy days or emergencies. Some problems will happen as you have experienced already in your business. So you, you don't know what's coming. Sponsors may leave. So that vault account start sneaking money away. And you fund it partly if you can have operating expenses, which is great, but you can also fund it from that profit account. So when the profit comes out, you may make the decision. And I encourage most businesses to do this. Take a portion of the profits and put into the vault account until there's three months of expenses reserved. And why three months of expenses? What I mean is, if your business stopped cold turkey now, another dime came in that you could run it full tilt for three more months and then it would run out. Now the thing is, businesses never, I've never seen a business just stop cold turkey. Maybe it happens, but some of them, they lose a major sponsor, but some money still comes in. Maybe there's some problems like with an employee and they got to hire another one. So expenses increase for a period of time, but rarely does things come to a cold stop. So a three month reserve in your vault account for this emergency can last six to months to one year for most businesses.

Should I build that out first? Like should I wait till profit gets three months in and then move all that into the vault?

So I was doing 50, 50 split. So when the profit comes out, 50% goes into the vault, 50% goes to reward you. And the benefit is we got to get very quickly you to the point of receiving a benefit from your company. It builds that positive momentum. If we're always talking and storing stuff away, we don't have that positive affirmation, okay, so that we want to do a portion for that. So yeah, reserving is nice. But the problem is, and you already said like, you know, I like to buy that new piece of equipment to award myself. That's how most people Are driven. And in traditional finances, we're told, no, no, save, save, Put things away. You know, live like no one else does right now. So one day you have all this money piled up, but we sacrifice ourselves and we start to resent our business. So by rewarding yourself in part, you avoid that resentment. You actually appreciate your business, and you're reserving at the same time.

So just so I'm clear now, so as I'm just building this, since I've just done my first, you know, distribution, if I get. If I get another check and I decide to. I'll split this thing up on the 10th or the 25th, do I take the 15%? Should I just basically start doing that now? Like 7.5% to the profit, 7.5% to the vault until there's three months in the vault, and then just go back to building profit back up.

Oh, instead of putting the profit account? Absolutely. You can do it. And that's the last thing I want to share with you, is that profit first is a big basic structure or guideline, but you can modify it to fit your own needs. Okay. The goal is step one is to get started, and you've done it, so kudos to you, brother. Step two is you can do that if you find that behaviorally, meaning you feel more comfortable just transferring stuff directly to the vault and skipping a step of splitting up the profit. Absolutely. Absolutely. You can do that. Yeah. Now, unfortunately, just looking at the clock, we got to go because we have another interview lined up in about two minutes.

Yeah, I'm very sorry. I was. It was. I got stuck in some traffic.

No, no, no. Hey, you were communicating with us. We were thr guys, a chance to eat a sandwich here at the show.

I have not yet had breakfast, and it's 10:30, so I'm excited to go do that myself.

Michael, hey, thanks for joining us. Let's stay in touch and maybe you can come back on the show maybe three, four months from now if you want, because we'd love to hear how you're making out.

I think that's great. And I think you should jump on my show and we should talk about this more in depth now that I've got some actionable stuff to chat about.

Oh, deal. Deal. How does that sound? Scrolling stuff down. Yeah, so I'll make that happen.

I'm going to make it happen, dude.

All right, Michael, thanks for joining us.

Thank you so much, you guys. I appreciate you.

Thanks, Michael.

So here's the lessons. You can make money in so many ways in this world. And, you know, I think a lot of people think podcasting is just, you know, it's like a hobby. Like, you're just. This guy's making real coins. I want to talk about that. And my hat's often for using profit first. It works for any business, doesn't. Clearly. Clearly, it's the ultimate system for everybody. I want to thank our corporate partners, tsheets, Fundera, Fundbox. I always put those together. Nextiva and Receipt Bank. Today's a special shout out to Receipt Bank.

Yeah.

For joining us just recently. If you have receipts and they're piled up on your desk, you have to keep them for the irs. Or if your client requires you to produce them now, you just scan them in with your phone. They automatically sync up to your transactions, and everything's said and done. Boom. Thank you for cpac.

Awesome.

All right, Chris, would you learn from today's episode?

Yeah. Well, I like how he was very candid and said he's not really into the online marketing funnels and all that stuff. He just was creating some services and products that were of value and, like, I don't know, he's just like, kind of common sense, doing the right thing, create something good and the people like it. And same thing with his show. He didn't want to make a podcast, which is all about the takeaways. You know, 10 takeaways of whatever. He's like, you know, I want to go deeper. I want to be a little entertaining and go deeper. And. And people love that stuff. And he just. He seems to have a sense for that authentic way that he's bringing himself to the market. And it works because that reason.

Yeah, two takeaways for me. First of all, I never heard the word earballs. I think.

I think it's awesome.

So I'm gonna start using earballs all the time. And the second one was that you don't need a funnel. And what I learned from him, and this is. Remember Jen Sincaro last week? Same thing, is that you don't have to follow the rules that everyone else is following. Everyone to build platform says, you gotta have your funnel. You gotta have your sales funnel. And here's a guy says, nah, man, that's not who I am. And he played it his own way and look at the results. So pretty amazing. Do you have a takeaway?

I honestly did not realize how big of it. Not big of a deal. That's not the way to say it, but how big Parkinson's law really is and how subconsciously you just do it like when he brought up the whole purse thing, I was like, that is so true. Like, you just. However big thing is, you just keep filling it and filling it. Filling as much as you can jam in there. And that just applies to, like, everything.

Everything.

Yeah.

Cool. All right, good takeaways. We gotta hustle out of here, Chris. Yeah, we do.

If you want to hear us, obviously, on itunes, stitcher and tunein, you can give us a rating and a review on itunes and stitcher, if you'd like to. And of course, the website profitfirstpodcast.com that'll get you all our previous episodes. So thanks again to Michael o' Neill. Thanks, Mike and Christina and Mike. Profit first Professionals helps a lot of people, doesn't it?

Yeah.

Listen, any kind of business, from podcasts to poultry, any kind of business can increase. Yeah, it's looking for the alliteration there. Any kind of business can increase its profitability with the profit first method, but it has to be done right. I wish I could coach each person individually and, of course, charge for it, but I can't. So we started profit first Professionals and recruited people that are more capable than I am at profit first. Why? Because they're accountants, bookkeepers, and business experts. We, I personally train them. Our team here trained them on profit first and now they go to businesses just like yours. You need an accountant anyway. You need a bookkeeper anyway. You need a business coach anyway. But now you have a business coach, bookkeeper, accountant who can drive profit in your business. Go to profitfirstprofessionals.com, click on the find button. We'll hook you up with someone. That's right.

Thanks for listening, everybody. Next episode, Jeffrey Ingles.

Jeffrey Ingalls. He's probably in the studio right now getting angry because we're running late. You're going to learn about insurance. We're going to get back to some of the basics here. Your business needs insurance, but how do you do it and stay profitable? Jeff's going to tell us how.

See you guys.