Mike Minutes Mastermind 09/20/2022

Hey, everyone. Hope you're doing super well. Let's go ahead and jump right into questions. See here.

I haven't, you know, look at these yet. I think I saw several did come in. Here you go. There's four of them. All right.

Perfect. Let's jump in. August, Long Hair, Madison. I have an opportunity to purchase a guy's business or client list that does 100 yards in a single neighborhood that we have 10 yards in.

Annual gross revenue is 150k and he is asking 50k for it. He has sent me all the address info and the pricing sheet for each client. The pricing is decent and we will have to go up on some of the properties. He's going to finish up the year and we will begin in the spring. He's also willing to write up a clause. If we buy these properties from him and if we lose any of them before we set foot in the property, he will pay me back for any of the properties. You lose potential profit after paying employees. The first year would be $30,000. Is it worth it? Any thoughts on the situation, positive or negative?

My concern is this. The potential profit being only 30,000 on a $50,000 deal, you're likely to take almost two years to pay off the cost of buying these customers.

I think you're overpaying if you were to pay $50,000 for it.

Because you're not getting like, you're not getting equipment, you're not getting brand, you're not getting website, you're not getting anything else. Right? So if you're just getting the client list, it's not worth that much. You're literally paying 500 per customer, which is very high. That being said, you know, I think maybe if you raise the price, it makes sense. But then again, you might lose more customers. This is a very concentrate 150k is, is just not much. Especially like if you're getting equipment and everything for 50k, that's different. But I again, in this situation would just tell them, hey, look, here's what I'm willing to do. If you can't, if you can't find someone else that can wants to pay more, then I'll take it for this lower price. But I wouldn't be, I personally wouldn't definitely not be doing $50,000 for that size of business, like that size of business. I'd be looking at 18,000, 15,000. That'd be my goal if I was just getting the client list.

Next up.

Hey, Mike, I was just curious a couple of things. You mentioned your low Profitability and your tax returns affect you getting your loans with headquarters. How come this hasn't affected you obtaining your personal real estate portfolio? I'm assuming maybe you pay yourself a decent salary to qualify those for those I propose. I guess the only con to that is the tax implications for personal tax returns. You know, so I don't take a big salary. All my salaries I believe are now 800 a pay period. I think it's 800 a pay period. I forget it's low. You don't want to pay a lot of salary when you have a S corp. So I minimize those as much as possible. That will still make sense to the IRS in terms of this. The pro private.

Yeah. So in terms of real estate, it's totally different ball game because you're buying a property that is income producing. And.

My personal tax return is not the issue. My personal tax return last year I had to pay hundreds of thousands of dollars in taxes. But the thing is, when you sell stocks or you have any sort of capital gains, the bank doesn't care about those gains because they are not either W2 or business income. If you're doing capital gains, they can't depend on that income coming in. So what happened is last year when I sold tons of. Of of stocks and made hundreds of thousands of dollars and I, I took that money, gave it to the businesses and the businesses spent it. Well, giving the money the business is not an income like a profit and loss statement activity. It's just a balance sheet activity. You're putting money into the business, me as the owner. So to fund P4P, defund all the growth of the of command center, all I put my money in. But then the businesses look like they break even or lose money. And when in reality, I would not have done Those investments like P4P if I would not have made a bunch of money in the stock market. So my personal tax return is very solid in terms of the numbers. It's just a matter of I then took all of my cash, put it into the businesses and so it just makes them look like they were less profitable. So that's a big piece of it.

But yeah, in terms of real estate, that's another reason why investing in real estate is nice, is because they're looking a little bit more at the property itself. And then like your debt to income ratio and things like that, which I'm always fine on, it's just a matter of when you look at an SBA loan or a business commercial loan, that's for a business and the business is taking the loan out. They no longer are looking at my personal tax returns as much. And furthermore, last year specifically all of my income was. Well, the majority of my income was capital gains, so hope that makes sense.

So apparently Service Autopilot has a new feature where they auto charge cards. Now, they've had one for a while, had some customer upset that their card was charged in the middle of the night and in the middle of the month. Check with command center. And they said it happened a few times this month across systems and it was Essay and the software that did it. On the audit trail. Yeah, I've seen this from several SA users seen saying this with pushing the credit cards on file. How do we push for that when stuff like this happens? With pushing. Push for. How do we push that when stuff like this happens? Or is it just one more reason to leave Essay for Zooper? Okay, I'm a little stuck here. So as a new feature, they've. They've had auto charge cards for a while. Oh.

I don't know why that'd be an issue that your car was charged in the middle of the night.

I think what you're saying is like it randomly charged someone's card when you didn't want them to because of the auto charge feature.

How do we push for that when stuff like this happens? Okay, so you're saying that basically their car's randomly getting charged. Yeah, I've seen this a few times with Service Autopilot users on some of their platform, some of the Facebook groups and stuff, people saying this. We haven't seen this specifically any of my locations. So I haven't dug in a whole bunch into it. But you know, to your point here at the end, that's kind of what I'm focusing on. Stripe is just going to be a better integrator, in my opinion, than Clearant. And, you know, I'm just fed up with a lot of stuff with clearance. So I'm, I'm not. I figured that I'm not gonna fix it because Service Autopilot isn't listening to us and Clearance isn't willing to change. And that's not changing. That's not going to be, you know, it's not going to be improving anytime soon based upon my conversation with Jonathan Stoshnick. So, yeah.

Columbus, Nebraska. Has Max Metric been updated for August yet? We had 60 are on the labor. Just wondering. Yes, it has been updated. Keep in mind that revenues that we use for Max Metrics are based upon what is accrual, which is inside of your CRM, it is not based on what's in your QuickBooks. So if you had an amazing July and you collected a bunch of that in August, you might have had 65k in revenue. But if we only saw 55 in service autopilot for August accrual like when the work was done, then you might not. That's why the differences are right. So do you mind your QuickBooks numbers and what's in service autopilot or super are going to be different because your QuickBooks is being going based on cash accounting when the money hits the account and when the cash is realized versus inside service autopilot Super. When we're taking that revenue, we're talking accrual, which is when the work is completed. We count that as money. So that could be the difference and the delineation. If you don't think that's the issue, definitely talk to Lee on a coaching call. But the August update is already there. It was done last week. Lead put a notice on the Facebook group as well. So cool. I think that's all I had for questions a day, so. Yep, perfect. All right, guys, have a great day. A little bit shorter one today, but great questions and we'll see you guys tomorrow.