Mike Minutes Mastermind 07/29/2024

Ladies and gentlemen, boys and girls, welcome to another Mike minutes Mastermind here on Monday.

Let's get this party start. Oh, there's only two questions today. All right, well, if you want your questions answered, today's the day. Submit it, put it in the comments. I'll make sure I get to it right now. Got a couple questions we'll pop in here in just a moment.

Cool. All right, let's jump right in.

Just the right one.

Oh, it's sharing a different one. Okay, let me pull this up.

Okay, there we go. Boom. Boom.

All right, first question is from Edgewood, Washington. Zoom in a bit. I currently own 51% of Edgewood and my wife owns 49%. She no longer wants to have anything to do with the business anymore and wants to be removed as a shareholder.

Question. What is the right approach to remove her from the business? And in doing so, will I be able to still be able to file as an S Corp being a single shareholder and owner? Yeah. So you can be a single member S Corp. That's totally fine. You can also be a single member LLC and file a form 1120s. So that's not a problem.

You should just have to redo your articles of incorporation. And if you did it as an LLC in the past, you probably have to go honestly on the Secretary of State and just change that in there. So wherever you set up your entity, I'd go there and I would just change it. This is not a big deal. I would also say just like. So I would.

I don't see the difference as to why, because if she's your wife, like she's going to own 50% of everything anyways. So I don't really see a reason why to do this. To be perfectly honest. I know she doesn't want to do anything to do with the business.

But unless you're. Unless there's a separation, I don't think it would actually change a whole lot, to be honest with you. If she no longer business anymore, that's fine. If she wants to be removed as a shareholder, again, assuming you're married, it's kind of implied somewhat. But if you just want to get her name off of it for some reason, I would just go to wherever you filed. Whether it be if you use LegalZoom, if you use Secretary of State, and I went direct to it and just change the.

Equity structure there. Whether you did it in the notes or you actually showed a breakdown of multiple members of the S Corp, it just kind of depends on if too. If you have an LLC that you're filing as an S corp, or if you are a actual S corp, it sounds like you're an actual S corp, in which case you have to change your articles of incorporation. Again, some of the downsides of an S corp having extra legal parameters changing things like this is a little bit more cumbersome than just an llc.

Devin from Red Deer. Hey, Mike, I really want to get out of the field. That means going from one truck to three trucks. Should I get a business line of credit for 100 to 250k to buy trucks, storage space and marketing? What's your thoughts? I would probably do that in reverse order. I would buy marketing, then I'd buy the trucks and equipment required to do the work. Like, ultimately, if you try to go the 4L framework, if you do it the wrong way, in other words, you increase capacity and then go find the leads, you're gonna have a problem. And that is you open yourself with massive amounts of risk by having debt without enough leads. So if I was you, Devin, and you're like, hey, I really want to sprint, basically what you're asking me, Devin, is like, you want to sprint to the wilderness. That's what you're saying. And so if you. That's a very painful time. But I know right now, like, you're right at that verge. If you're trying to go get out of the wilderness as quickly as possible, it simply comes down to, can you get enough leads? And so I would really be encouraging you to focus on the lead generation. So, you know, do you need to go get $250,000 of debt to get enough leads to get one more truck? No. But if you go out and get enough leads to get a second truck, then you might need debt to get the truck. Right. So always put the leads first. And so I would be like, okay, great, what can I do that doesn't cost a ton of money to start generating leads? Okay, Now I've filled up 2 capacity. I'm like over capacity. I'm working weekends. Okay, great. I need a second truck. Then I would give license to go get the debt for the truck. I also don't think that a line of credit for 100 or 250k would be the move. I would, I would, I would prefer more lower limit credits or lower interest credit by getting debt on the trucks, getting debt on the equipment, because that's the actual assets you need. And then hopefully that will fund the purchase of overhead like the storage facility and the marketing down the road. It's a much it's the reason equipment trucks are easier to get financing for is because they're collateralized which means if you don't pay for it, they're going to come pick it up. Right? But uncollateral or unsecured debt in the form of a line of credit it just like the interest rates right now are going to be so astronomical and very difficult to get. It's going to be tough convincing a bank to actually give you money in this rate interest rate environment for without any securement like any any sort of collateral whatsoever. So cool. In case everyone just joined, there was only two questions today. I wouldn't usually have sent out a text message over that, but if you are in here and have a question, feel free to put in the comments. Since we are here for.

The.

Mic minutes, Mastermind, I'm going to hang out for like 30 seconds in case anyone does have a question. Happy to answer them. Now I know there was a lot of good dialogue on the weekend about burnout. This is extremely normal. End of July.

We'Re seven months in, we're seven out of 12. What's seven divided by 12? Seven divided by 12. We are exactly 58% of the way through the year. The vast majority of actual profits are realized in the second half of the year. And so dealing with burnout right now, I'd rather you burn a couple percentage of your year like a week off and taking a step back than continually driving your face into the ground and and then losing out in the last four or five months of the year when literally most of your profits will actually be realized. Especially if you have a really bad Q4 collapse, most of your profits are realized in the second half of the following year. If you can solve Q4 collapse with Christmas lights or some other service and make up at least 50% of your revenue during Q4, typically then you get to profitability within Q1 of the next year.

But since so many of us have had bad Q4 collapses, it's tradition in this industry.

It is very important to make sure that you are refreshed, that you've taken care of yourself to be able to execute well on the last half of the year. And so it's never going to be easy. The bigger the business, the bigger the problems, the faster you're growing, the more debt you have. All of these things will add to stress in my mind right now I'm thinking about several owners that have smaller businesses, very profitable, and they're happy, like that's great. But if you're going to really throttle it. And you're going to push like, for example, Devin, if you're taking on debt and you're growing that fast, expect what's going to happen, like the pain will be significantly more. You're going to increasing your leverage, which increases risk. You're going to be growing very fast, which requires more skills at a higher velocity than if you were just to let the natural dynamics and physics of growth occur. So keep that in mind. Everyone wants massive amounts of growth and then.

And then when it comes, they realize that it's not all it's cracked up to be. And the fact that taking on debt on like leverage on top of a growing business is very difficult. Not saying you can't do it, it's hard. And so prepare yourself for that if that's the, the, the objective.

Kevin Fairburn says Jason Murphy is down enjoying the beach in Destin, Florida, getting over his burnout. Let's go. Hey, that's a good place to be. Good place to be if you're trying to get over burnout. Let's go. We got a little bit of rain up here, so it was pretty nice, honestly, up in Washington.

How do you deal with the, the switch in stress?

I think it's like, how do you deal with the, the risk of.

How do you deal with the risk of getting in a car accident? You put a seatbelt on beforehand, you prepare for it. You take every precautionary measure to ensure that if anything bad happens, you've prepared for it. And there's times you can't prepare for, like a drunk driver t bowing you, you can't prepare for it, but if you put your seatbelt on, you'll have less damage than if you didn't. And so going into the next stage of growth in your business and preparing for the next stage of stress is simply putting on the seatbelt, like, figure the seatbelt out before you're like, I'm gonna go 50 miles an hour. Wait a second. Let's put our seatbelt. Let's make sure, like, we have things buttoned down, we've learned systems, we actually have the skills, or we are at least prepared for the pain that's going to be incurred by massive skill deficiency. Because when you, when you increase debt, when you take on, when you do acquisitions, etc. You are skipping levels of the natural dynamics of business.

And a lot of times it's because either a, your goals are super, super high or you're comparing yourself to other people that have so much more and you're not seeing all the levels of the game that they've played and you're comparing yourself to their level 100 and you're at level 10, think you can jump to level 95 and be up with them. And you can, but you're not going to have the skills that they got from level 10 all the way through 99. And so to deal with that stress is simply a matter of preparation. And that's why like now you guys, especially if you come recently to training, you see like the seven stages of wealth, the five stages of where, five stages of growth, three stages where you can be a profitable business. It's like all we're trying to do is prepare you for what you're going to feel at every single stage. It's just preparation. It doesn't take away necessarily from the pain of the feeling that you're going to have in the moment. It just preparing for is what allows you to actually stay in the game long enough to actually gain the skills required to get to the next, graduate to the next level of business.

Physical to mental stress. This year has been a rough ride. Yeah. And I would say this, I would say this, Connor. You skip like you jumped right when you do acquisition, it's the equivalent of like leveraging, like getting debt, having a whole bunch of growth and then you skipped both of those like so by you just jumping all the way, you just are ratcheting up the stress. Because I think stress comes when there's a skill deficiency.

I would say so if you have a skill deficiency, you're more stressed. If you already have done it, if you've already played the game, you're not stressful. If you've done the same thing a thousand times, you're not stressed out. So if you go mow a lawn, you're worried and concerned. Like, I've done this a thousand times, I'm going to nail it it. So I think that stress is magnified and amped up when you have, you do not have skills. And if you skip levels of the game, you simply have not gotten the skills the organic way. And so the stress is going to be way higher.

And so it is not to say that you should not have stress. Stress is what ultimately is required in order to be able to gain muscle and gain, get stronger. Take saying, well, I don't want to go lift to the gym because I don't want to get sore. Well, then how do you expect to gain muscle? How do you expect to stay healthy? But if you go from 250 pounds, benching and all of a sudden you want to bench 500, expect to be very, very, very, very sore the next day. And to prepare for that, it might be good to get other reps in around your other workouts. And it might be good to have some pre workout or some protein or some supplements or maybe a trainer. Right. And so that'd be my two cents.

Destin, Florida sounds good, though. Not gonna lie. All right. Love you all. Hope you have a fantastic rest of your evening. We'll see you guys tomorrow. Take.