SPEAKER_00 0:00

All right, CPAs are not all the same, right? So, like some CPAs are okay with you just giving them random numbers, like pulling them out of your butt, I guess, right?

SPEAKER_01 0:08

Yeah, if uh they just type it down.

SPEAKER_00 0:10

Yes, and they're like, sure, I'll take it. And and that's where so many problems come from CPAs who do that. Because I mean, I'm not blaming debt, hero, business, let's get into it.

SPEAKER_02 0:27

Welcome back, welcome back, guys. Uh, excited to have you back. Whatever you're watching us, please subscribe, like, follow, if a comment, do anything you want. Like, we have been our YouTube shorts are going crazy. They're getting they're getting a lot of views. So if you don't follow us on YouTube, please follow us there, and then uh we got it. So all right.

SPEAKER_00 0:51

So this week we're talking about episode two of our Soulpreneur to Enterprise list, right? Awesome. Our Soulpreneur to Enterprise series.

SPEAKER_02 1:04

That's awesome. You want me you want me to give you an update from the last episode?

SPEAKER_00 1:08

Uh if you remember that I said that let's start by hearing your update from last episode.

SPEAKER_02 1:12

Yeah, uh, because I'm usually the one that struggled the most with this, and I said last episode that I was going to make a list of everything I was doing. I actually made that list. And right now, a lot of the stuff I'm making is reviewing tax returns and preparing really hard tax returns and answering and answering tax focused question in my emails. So it's actually a lot of manager staff, but it's already getting us it's already getting really busy with us, that it's taking around like 20 to 30 hours a week of that. Uh so it's it may be time to bring a tax manager in.

SPEAKER_00 1:54

Oh, it's time.

SPEAKER_02 1:55

It's time, yeah. So uh we are probably start going to look at it next month, right? In starting in May, around this month, next month, May, June. And then if you're watching this and you're looking for the tax manager position at the CPFM, uh hit us up, uh hit us up. So yeah, and then also uh I was doing a lot of other stuff on the operational side of it, kind of following up with the staff, the the cash flow, the accounting, but that thing doesn't really take much time. The only thing is just the project management side of it, you know, making sure it's got it done, follow up, uh chase down the clients. But uh so far so good, though. So far so good. So so I guess what is what is the second episode about?

SPEAKER_00 2:40

So the second episode is cleaning the foundation.

SPEAKER_02 2:43

Awesome. So uh what is that about?

SPEAKER_00 2:47

So everyone loves talking about scaling.

SPEAKER_02 2:50

Yeah.

SPEAKER_00 2:51

But no one wants to talk about the mess underneath it.

SPEAKER_02 2:56

Yeah, like like like for example, yeah, like Congress, like you have 300k in sales, but but your books are like a crime and seam, like you don't know how you got there. Yes, you don't you don't understand your books, right? Yeah, that's cool.

SPEAKER_00 3:11

So that's why people are making money, but they feel broke. So like a business is producing money and it's profitable, but they have nothing to show for it.

SPEAKER_02 3:21

Yeah, and and I see a lot of that like uh business owners don't know what the numbers look because they are so in the operation side of it that they don't step outside and and work and and work on the business. So how can we how can we gain financial how can business owners gain financial clarity?

SPEAKER_00 3:41

So gaining financial clarity is we talked about it last episode too, and we continuously talk about this, I feel like. But it's really just understanding the numbers and getting into the nitty-gritty of okay, what am I spending my my money on? How am I making revenue? Um, like for example, this morning I actually had a CFO meeting with a client, and they were not profitable this past month, they haven't been, but we've been investing in a new location for them. So then with the hope of more profitability to come when that new location's up and running, right?

SPEAKER_01 4:19

Yes.

SPEAKER_00 4:20

So for them, like we know they're losing money, but we know why, right? So some people they're losing money or they're making money, but they don't know where that is. Does that make sense?

SPEAKER_02 4:32

Yes, that that does make sense for Sean. Yeah, and I think like what how do they why do they know that they are losing money instead instead of just feeling like, man, like I don't know my number, like feel tight, I don't know why stuff feel tight, but what is different with your clients that you all advising them through and like why are they able to know where they're losing money and what to do about it?

SPEAKER_00 4:57

Good question. So they know because A, we planned for it in our forecast and budget. We planned this expansion opportunity, and we did a big market analysis research prior to expanding to make sure that this was a solid investment, and it was, and it looks very fruitful. So we planned to spend this excess money knowing that we wouldn't be making revenue right away. So we made sure we had a cushion cash-wise, right? And then we made sure, okay, we know we're going to be negative the first three months of the year.

SPEAKER_02 5:30

Yeah.

SPEAKER_00 5:31

And that's okay because it's an investment into a new opportunity.

SPEAKER_02 5:35

Yes, for sure. And and I think like what happened with a lot of business owners is that they are just looking at the bank account. What comes in, what what comes out, they are just being reactive. Yeah. To stuff like, hey, I get an invoice, let me pay it. I just want to make sure I get enough money here to pay these invoices, or they or they delay paying the invoices. But what it sounds is that because uh your client, our client, they have a good financial system. They just they don't only look at the bank account, they also have a set of financial statements. They are they are they are yet they are able to understand that.

SPEAKER_00 6:14

Yes, and we're actively con conversing and planning. Yeah, and they didn't willy-nilly wake up and say, okay, we're gonna throw all this money at this new location without knowing that it's going to be profitable soon, right? Instead, we planned and prepared this for months at a time and did lots of research to make sure there was a market in that new area for them to be successful in.

SPEAKER_02 6:37

Yeah, yeah. And that takes a lot of strategic thinking, proactive, and like, and as we always say, like you have to work on your business versus in your business. You gotta start using that executive part of it, that director part of it instead of doing into that. So uh a point I really want to make here is that it's really important to have financial statements. Like people sometimes they only do their financial statement for the tax return. But if you are investing money on your books, on an accountant, on a bookkeeper, it's important that you sit down every month and understand the number and kind of see at everything, kind of uh wrong, wrong percentages, wrong, wrong estimates and know what is going on. So uh I know you do a uh Harold here does a lot of CFO advisory, and you have been a CFO for a company b before. Whenever somebody's looking at the financial statements and already have good accounting, they have a good set of financial statements, what staff do they have to look at to gain financial clarity and what stuff they have to be checking?

SPEAKER_00 7:48

So the number one thing that I like to look at is obviously everyone will like to look at this net profit. So I want to see like if I'm profitable or not. And I really I the percentages are important also, but I think one month, looking at just one month of financials will never give you a good picture of the health of the business. Because some months you can have less expenses, maybe you carry it over to the next month or the previous month, you prepaid expenses and you're on cash basis or something, right? So I like to look at a couple of months um to make sure that we're stable, et cetera, to see kind of like a quarter or so gives you a really good clarity of the business state. Um, so looking at the net profit, the percentage of net profit. And then I like to next stage, I like to go into gross profit if they have cost of goods.

SPEAKER_01 8:36

Yeah.

SPEAKER_00 8:36

I like to see like where they're landing there. Um, and that's gonna be different for every industry and even different businesses within the industry. Um, and then next I like to see like what my heavy spend items are. So a lot of that's going to be like payroll, it might be like office or loans or things like that. So I want to see my top few categories, and I like to see the percentage of revenue that I'm spending on those categories as well.

SPEAKER_02 9:02

Yeah. Let me ask you uh this question here to gain financial in clarity. What is cost of goods sold and which businesses should be keeping track of co of cost of goods sold and what goes into that? Um for example, in a product-based business, it's easy to find the cost of goods sold. But what about in a service-based business? How do business should keep track of that?

SPEAKER_00 9:26

That's a good question. So in a service-based business, the cost of goods sold or cost of service, right, is going to be the people that you're paying to provide the service. So, like, for example, for us, so like if people are preparing taxes, the cost of goods sold for that is going to be the employee.

SPEAKER_01 9:47

Yeah.

SPEAKER_00 9:47

Right. But you it won't be your admin team because that's going to be an operating expense. So that's going to be the cost of doing business pretty much. So if you have sales or not, you start you're still paying those. So, like, for example, for us, like our tax team, I wouldn't put them as cost of goods sold or cost of service because they are continuous employees. We're not high hiring them as an ad-need basis. Does that make sense?

SPEAKER_02 10:12

That makes sense, yeah.

SPEAKER_00 10:13

Um, but things that we could put in as like our accounting team, because I feel like we do hire on more as we go. I really don't like doing that though, unless it's a direct expense. Like we only hire like the subcontractors, maybe. But I don't like doing W-2 people on there just because it even if we didn't have the work, maybe we would let them go, but it would trickle down. Does that make sense?

SPEAKER_02 10:36

Yes, it does. It does make sense. So for cost of goods all is a stuff that is directly. Directly, yeah.

SPEAKER_00 10:42

So like if you had zero sales that month, would that expense be there or not? If not, then it's going to be a cost of goods.

SPEAKER_02 10:50

I think that's actually a great way. If you had zero expense that month, will that cost be there? I don't know. That's actually where it's put, and that is how you should keep track of it. So always you hear about the income statement, the balance sheet. What about the cash flow statement? Because I know sometimes some businesses, the uh the income statement may be looking great, but we don't see what is going on on the balance sheet. We don't see how much debt they how much debt they are paying down, how much money they are taking out of the business. And that's why the floor tie of how much money they are investing back into the business in buying equipment, real estate. Like, and I think the cash flow statement kind of kind of encompasses all of that in going.

SPEAKER_00 11:35

It builds it in together. So that that's why. So part of our process for our monthly clients is they will receive the income statement, the PL, um balance sheet, and the statement of cash flows.

SPEAKER_02 11:48

That makes sense. That makes sense.

SPEAKER_00 11:50

So yeah, and it's a full picture of clarity, which many small businesses they don't really have a lot of activity on the statement of cash flows, but um as I think it's important insight to have, and it's important for them to be able to see that and to understand, okay, these are the three main reports that I need to see and have visual on to track my progress in my business.

SPEAKER_02 12:10

Yeah. How about that? You know, you know something that happened to me this year? Happened to me uh last week, actually. I had a client uh calling me and I and and he's like, hey, why why did my why am I showing like $150,000 in net income in my Schedule C whenever I've only failed and made $80,000?

SPEAKER_01 12:31

Yeah.

SPEAKER_02 12:31

And what I had to tell them is like I had to look at the cash flow statement, do a really quick math. I'm like, okay, cool. So you only receive $80,000, which is about right. I see that in the in the distributions that's going to be showing in the balance sheet of cash flow statement, but you also had to pay last year $30,000 in income taxes. That for tax purposes, that is not deductible. So right now we are at around like $110,000. And then you'll begin in cash at the end of the year was around like uh $30,000, and you end in the GL at the business with $80,000 in cash. That's how you get $130,000,000.

SPEAKER_00 13:13

That that's one thing that people I think have a hard time understanding and grasping is like if you're if you own a pass-through entity, that means that you are responsible and you have full liability for every profit and loss that that company makes, that LOC or that business makes. So even if you only took $80,000 out of the business, if that if it showed a profit of $150,000, that is taxable to you.

SPEAKER_02 13:37

Yes, because you don't pay money on how much money you take out, you pay money on all of the earnings. And that is the difference between net income versus uh distribution.

SPEAKER_00 13:48

And that's exactly why the entity structure is so important to know your goals and to talk to professionals about what entity is the right choice for you to make sure that you are selecting the right one.

SPEAKER_02 14:00

So, so and then why, okay, perfect. So now we have just to start uh cleaning this foundation, I always say the first thing is accounting. The first thing is just your finances, having the right financial and system, but but I still know a lot of business owners that they have a good accounting processes, finance processes, but the staff still feel chaotic for them. Why is that? Like why do why does that and how can and how can and how can business owners improve that?

SPEAKER_00 14:37

It's because their business is built on memory and not system. So we touched on this uh briefly before of not having proper processes or SOPs in place where the business owner has all of this knowledge in their head. Like, for example, sometimes you see businesses where only they can provide a price because it's in their head. They know how much they need to price things. And that's something that we're working through still, because there's some things where we do have a really good pricing sheet, but there's some things where we tweak every now and again. Yeah. So that's one example is business owners keeping things in their head and not putting it down on paper and making it a process or a standardized throughout the business.

SPEAKER_02 15:17

Yeah. I would tell you that is something we are still working on, especially on the tax side of it, because uh I still get email from a wall admin team saying, hey, can you give us a quote in this tax three thing? And I can do it really easily because it's in my memory. I can give it, I can give a quote in a minute, in a minute, or something like something like that because of my experience and all of that. But that is something I don't spend a lot of time on. But what happened if that minute I'm on vacation? And I don't want to reply, I don't want to give a one-minute quote while I'm on vacation. So that is all that that is something we still we are working on, and and we are about to have it figured it out because of that pricing sheet and then all the pricing estimates and and all of that, and and all of that stuff.

SPEAKER_00 16:07

And yeah, when we're back from our owner's retreat, I told our director of operations that I'm going to hone in on that pricing sheet. It's going to be beautiful, it's going to be easy, it's going to be readable. Anyone and our entire team could go on there and price something for anything.

SPEAKER_02 16:21

We should be able to be a kind of a little software, a formula-based staff.

SPEAKER_00 16:27

I'm going to with Power BI.

SPEAKER_02 16:28

That's awesome. I appreciate it. I cannot wait to have that.

SPEAKER_00 16:31

That that's the process drop-down selecting what they want and then pricing.

SPEAKER_02 16:37

Perfect. So I guess uh staff feels chaotic, and we talk about because we don't let mainly like staff feels chaotic because they don't have a subpiece. Like they're making money, staff feels chaotic, and and sometimes what business owners fail into the mentality of is like, hey, I'm making a lot of money. Like it's supposed to feel chaotic because for me.

SPEAKER_00 16:59

It doesn't have to. It does not have to.

SPEAKER_02 17:01

And I think it comes down to the conversation we had on the last episode about making sure you're building an asset and not an income. And I'm pretty and I'm really forced at that. I'm like, hey, I'm making this much money, I should be working hard for this money. But it's not about like as we talk, like we have to transition to focus on building an asset, you know, and to build an asset, like you make your money is making money for you. You are not made, you are not just putting hours as not equate money. Which I think that should be by now. Everybody listening to that, and and the purpose of the series, you have to transition your mentality from selling your time, your hours, to building an asset.

SPEAKER_00 17:46

Yes.

SPEAKER_02 17:48

So and then like uh what are some of some of the consequences of feeling of not having SOP and everything feeling feeling chaotic?

SPEAKER_00 17:57

Yeah, so so not having SOPs and you bottleneck everything, which we've both ran into this too. Yeah. And we've done bottlenecking with client communication also. So that's something that we're working on, working through. But when you do that, it slows your business down, decreases revenue potential, and then it makes your life feel more chaotic than it has to be. Right. So no SOPs um is bottlenecking growth, um, inconsistent client experiences, yeah, and founder burnout.

SPEAKER_02 18:29

Yeah, that's that's pretty good. So and yeah, and we're working through that, and I feel by the end of this year we're going to be completely, we're going, we're going to completely go go out of that, and and that shows how important is SOP. It's just trying to become that enterprise. You know, we are not like one person solo show and and all of that. And I want to talk a little bit about the the partner bang out, you know, and just people get get burned out because if you're so chaotic, because we already we just got done from BCC, but low-key I kind of got a little bit burned out on people, on staff, and and that is something to make this sustainable, we need to improve that. And I think it comes down to to SOP, to processes and a lot and and all of that. And and I feel a lot of business owners that go to that in the one year to you are in business.

SPEAKER_00 19:23

I I think, yeah, I think but usually I think it's between like year two and five, because here's why, because it that's at the phase where they have not only are they doing the work and they have clients and customers, but they're also that that's the year when you have employees.

SPEAKER_01 19:37

Yeah.

SPEAKER_00 19:38

Typically. So you got it from both sides this year. Yeah. That's why it felt so much more chaotic. I mean, yes, you had one employee last year. It was way different experience though.

SPEAKER_01 19:48

Yeah, it definitely was, yeah.

SPEAKER_00 19:50

So right now, or this past tax season, you not only did you have more clients, right?

SPEAKER_01 19:56

Yeah.

SPEAKER_00 19:56

And a bigger team.

SPEAKER_01 19:58

Yeah.

SPEAKER_00 19:58

And then different direction, different departments that were all feeding in. And I had a bigger team. So we're all just meshed in together in one, and plus wearing multiple hats.

SPEAKER_01 20:09

Yes.

SPEAKER_00 20:09

All of that fed in together. Yeah, which I'm sure like other business owners are experiencing that too, whether it's their busy busy season or just everyday life, or they're being the manager, the doer, and the owner.

SPEAKER_02 20:21

Yeah. So what do you think burnt out happen? I think, like, what do you think burnt out happen? What do you think business owners get burnt out in their business? Why does that happen?

SPEAKER_00 20:29

Well, it happens because they're wearing too many hats and they have no one else who can help them.

SPEAKER_02 20:33

Yeah.

SPEAKER_00 20:34

So they what they need to do is they make sure that they have an admin who can help on that side of the when they grow big enough, right? When they're at the stage, an admin person, like assistant or operations to help them out on that side. And they need to set up proper SOP so their employees can follow directions and not have to go to the business owner every single time. The third thing is setting proper expectations to their clients or customers.

SPEAKER_01 20:59

Yeah.

SPEAKER_00 20:59

So they're not emailing you and calling you on a Saturday in the middle of the night, right? And they're not pestering you always. They have your clients and customers have to be okay with working with your team.

SPEAKER_01 21:11

Yes.

SPEAKER_00 21:11

And if not, then they're not the right client for you if you're trying to build an enterprise.

SPEAKER_02 21:16

I agree. Yeah, I agree. I think the stuff that gets you bang out is just the small questions. A small question, the not as important question, like getting asked the same question with the same question from clients that that burns you out, and then getting questions asked from everybody, your clients, your team members, like feeling that you have to be on top of staff for stuff to get done. Yes. And I think that is actually the stuff that gets you burnt out. And burnt out is not good because that's going to affect the customer experience, customer services, and you need to and you need to get out of that. And I feel like usually this burnout usually happens whenever businesses are making are netting around 100k to 300k. Like, why is that? Like, do you Agree with that? Why is that and why does that happen?

SPEAKER_00 22:02

Yeah, no, that's right. So, so usually when you're in that, I guess it's like that's a it's it's a first success stage, I guess we'll call it. Right? First stage of success where you're netting six figures, like a hundred to f to half a million, right? And so what happens there, things start to break with the way that you had it originally set up because when it was originally set up, you were a sole preneur. So when you're in that transition to netting a hundred to half a million a year, you're coming out of that sole preneur, like you know, trying to like stay afloat, yeah, frantically, which you still are in that point if you don't have proper things set up. So what breaks is your pricing's too low for the workload, especially when you have employees and you have to have your overhead and your operations, so your OpEx, you're not accounting for that. That's something we just did, a big project for one of our CFO clients, actually. Revamp their entire pricing for every single area and every item that they do. Cause and we took into account their cost of goods, cost of people, operating expenses, and even down to like the alcohol cost they're using to the little pads, the tiny pads that they're cleaning. So now they have at least a 30% profitability net on every item that they're doing.

SPEAKER_02 23:25

That's awesome. That's so important. That's why you need to know your numbers and get the hill.

SPEAKER_00 23:30

Because on some of the items they were actually losing a lot of money on. Wow. And it was some of their most popular things that they were doing.

SPEAKER_02 23:36

That is so that and that's why it's so important. Like once you once your business is more complex, you need to have those things. You need to have a lot of things.

SPEAKER_00 23:44

Which we we will be doing that for us too, didn't we?

SPEAKER_02 23:47

And don't necessarily, which I'm so excited for. Yeah, which which while I the I think it comes down to like don't let the business round you. Yes. You run the business. But for you to run the business, you gotta step out. And and and you can work on the business, like you said.

SPEAKER_00 24:03

Yeah. So the pricing's too low for the workload, right? Then you have no clear financial structure. That's number two.

SPEAKER_01 24:11

Yeah.

SPEAKER_00 24:11

So that's not having the proper reports, you don't, and you don't really know if you're actually profitable. You don't you can't make sense of your like PL or your and not understanding your balance sheet, having improper data.

SPEAKER_02 24:24

Yes.

SPEAKER_00 24:25

Right.

SPEAKER_02 24:25

And and I think that also happens because you have the money to afford it, but you don't have the time to look at it. And sometimes you have the money to afford it, but people don't see the value and they don't want to spend money with it. I actually had I actually have a client that this happens now in taxes. That that happened now in taxes, that they are a very successful business, they're making a lot of money, but uh they have they have this mentality of like, hey, why why I need to pay somebody for something I can pay my myself, especially like bookkeeping, accounting. Why do I have to pay somebody if I can do it myself?

SPEAKER_00 25:10

But I feel but they oftentimes they yes, they can do data entry, but no, they they don't understand the depreciation, they don't understand what accounts, the interest accounts, they don't understand the contra asset, they don't understand all of those different accounts.

SPEAKER_02 25:23

This is what happened though, because they didn't know they had a lot of stuff going on. They were making like millions of dollars in sales, around like three million to five million dollars in sales. They still had the mentalities like, okay, I can still do the accounting myself, and they were missing out in a lot of deductions for taxes because they will not provide the financial statements to the clients, to the to the target, because they were not populated, and then their CPA would just go with numbers that they were giving to them. And and then the stuff that is sell, it's really easy to control expenses. But what about income? What about like account receivable? What about the money you got paid next month or something like that? So because of that, I think they will also they will lose, they they're probably overpaid in taxes over the last three years. And at the same time, I didn't realize how bad was a problem, and I was doing some planning with them last year, and I wasn't able to do any good tax planning because I didn't have correct solid numbers, right? Correct numbers, and then I'm like, we were using numbers that were not correct, and then because we didn't have good data, I was uh I was giving them wrong numbers. Thank God it went on the opposite side. They were expecting, like, they were expecting a really, really high tax bill based on the numbers they thought they were doing. But whenever we did, whenever our team did an accounting cleanup and got everything figured out, the number was like 60% less than what they were thinking. So it was a win-win for them, but that just showed how no clear financial structure and not investing and not investing in professional services can affect you a lot.

SPEAKER_00 27:08

You said something interesting there that I would like to point out, and I think we should do an episode on this another day. You know, every CPA, all right, CPAs are not all the same, right? So, like some CPAs are okay with you just giving them random numbers, like pulling them out of your butt, I guess, right?

SPEAKER_01 27:24

Yeah, if uh they just type it out.

SPEAKER_00 27:26

Yes, and they're like, sure, I'll take it. And and that's where so many problems come from CPAs who do that. Because I mean, I'm not blaming them necessarily, like they're overworked. A lot of them are, they're gonna be mad at me for saying this, but glorified data entry, right?

SPEAKER_02 27:42

Yeah, no, for real.

SPEAKER_00 27:43

So I think finding the right CPA who actually cares about your business and who wants to make sure things are done properly. So if you have a CPA who's like, hey, we need to clean up these books before I do before I touch your stuff and put my name on it, then that means you have a really good CPA.

SPEAKER_02 27:57

I agree. Like, for example, we have a new client, and I'm like, Well, I I we have to do your business taxes, we have to do your personal taxes, but your books are a mess. I'm not working on these taxes until you get the stuff cleaned up.

SPEAKER_00 28:09

Yeah. Because what happens if if someone who just takes a bunch of numbers, puts them on the tax train, sends it off. What if the IRS comes and says, hey, we're doing an audit?

SPEAKER_02 28:18

Yeah, they don't, they, they don't, they don't know how to prove it, and then also you don't really know how much money you're making because of that.

SPEAKER_00 28:23

Exactly. So it's just bad data, bad tasks.

SPEAKER_02 28:26

And we offer the we offer them a task uh accounting cleanup project, but they don't see the value because they are still new in business. They don't know the importance of accounting and of accounting financing. I know that um I think those are one of the major mistakes people in their one to three years in business and they make uh for sure. I think something else that breaks around the 100k to the to the 500k is the hiring. Sometimes we can hire too late, too fast. I feel at the beginning of this year and last year we hired too fast, and then we got banned out, and then that made us hire too late. And right now, hopefully, hopefully we start hiring about right.

SPEAKER_00 29:09

We're skittish to hire now. Yeah. Because we hired too much, we invested way too much money in people who we we didn't fire fast enough for one.

SPEAKER_02 29:19

Yes.

SPEAKER_00 29:20

Um, so yes, that but that is a common problem. And that's where I think when hiring, you have to assess your workload. You have to be very diligent with that in this stage of 100K to half a million when you're profiting in that range. You have to be very diligent and careful with hiring because you don't have excess money to waste on employees. But at the same time, if you don't hire and you hire too late, it can halt your business and harm your business and your reputation. Reputation, right?

SPEAKER_01 29:47

Yeah.

SPEAKER_00 29:48

If you are not delivering work on time or you're doing poor quality because you have too much work and not enough people.

SPEAKER_02 29:54

Yeah, I agree. Yeah, and then something uh something in business is really important to protect momentum and protect your confidence. Sometimes whenever whenever we make those hiring mistakes, that kind of stuff our confidence in hiring people. So right now we are more cash and cautious, yeah, and that can slow us down for sure, which is definitely uh not good. And then then I think the other thing that happens with the 100 and 500k, and I think to get past that 500k is like, which I'm in, which we are sometimes in those shoes, is like the founders are doing everything, exactly. It's just crazy. So we know the process to get out of that.

SPEAKER_00 30:40

We are I was in the heat over this busy season because but you needed to be so you understood what it looks like to be a white glove manager in tax season. Yeah, right, because a white glove manager in tax season is different than any other manager in tax season.

SPEAKER_02 30:58

For sure.

SPEAKER_00 30:58

Like yeah, because they're better, they're more efficient, higher quality.

SPEAKER_02 31:02

Yeah, and then they just they're just they're just not doing the taxes, just to doing the taxes, they're just not that I entered. They're like looking at the numbers, you know, figuring out the colours. Digesting and understanding exactly all of that fun uh uh fun stuff. So I guess uh once we uh once so yeah, I think to to break that to break this 500k, okay. I don't know how to transition to this is a good thing.

SPEAKER_00 31:28

Let me do it, okay. All right, so to summarize that section, it gets really messy in the 100k to half a million when pricing's too low for the workload, no clear financial structure, hiring too late or too slow, and the founder's doing everything, right?

SPEAKER_02 31:49

He does, yeah.

SPEAKER_00 31:50

So that's where the hustle starts working. Like you no longer can hustle up the business and like you did when you first were cre like creating and becoming an entrepreneur, right?

SPEAKER_02 32:02

So I guess with that being said, what we can take out of that is like you don't need more clients, you just need a better uh foundation.

SPEAKER_00 32:10

Exactly. Or you'll just scale chaos.

SPEAKER_02 32:12

Yeah, so and that's why it's important to create those SOP to make sure to make sure we have stuff right. Quick pause. This episode is brought to you by White Glove CPAs and business solutions.

SPEAKER_00 32:26

And honestly, this is exactly what they fix.

SPEAKER_02 32:30

Yes, they are not just bookkeeping, they come in, clean up your numbers, be all strategy, and actually show you how to run your business like a business.

SPEAKER_00 32:41

If you're anywhere in the 100k to half a million range and things feel messy, this is your sign. Sign with white glove.

SPEAKER_02 32:50

Yes, go with white glove. Yes, reach out to them. They're pretty cool people over there.

SPEAKER_00 32:56

Hey, I think they're pretty cool too.

SPEAKER_02 32:58

Honestly, like they I love working with them. They allow us to make this epic.

SPEAKER_00 33:04

The the owners, I hear the the partners there. Yeah, they're a great time.

SPEAKER_02 33:08

Yeah, hey, this was it was a really great episode. What do you think people should take out of this, though?

SPEAKER_00 33:13

I think people should take out of this to I'm gonna repeat this probably every single episode, but know your numbers. Yes, and when I say that, I mean understand like what's making you money, what's costing you money, and what's actually draining you money. So there's a difference between costing and draining you money, right? Costing is things that you actually need and that actually helps your business. Draining means it's not helping, it's just completely just stealing from you, pretty much, right?

SPEAKER_02 33:41

Yeah, yeah. You definitely and to have that, you need to have a good foundation.

SPEAKER_00 33:46

Yes. So you know knowing your numbers, foundation, um, SOPs, transitioning from you know, just keeping everything in your head to putting it down on paper or in the computer, wherever, for your employees to be able to follow and grow from that.

SPEAKER_02 34:02

Yeah, no, for sure. And and and I think what what you can take out of this is like messy foundations don't feast themselves.

SPEAKER_00 34:10

Yes. You cannot continue to grow past that 100 to half a million. Actually, typically they start going backwards if the chaos continues.

SPEAKER_02 34:21

Yes. So what should I be doing out of this episode? Uh, what are what clients should what are what listeners should be taking? How can they implement these things right away? And what I should be doing the over the next couple of weeks to to start implementing all of this.

SPEAKER_00 34:36

Yeah, so your action item is going to be identify. So you last week you identified some things people can start doing, right? So start so now these next few weeks, start putting that in action, whether that's hiring an admin, hiring someone to come in and help, do the work, play or planning for that. So that's number one. Number two is going to be writing everything down that's in your brain for SOP. So SOP creation, even if that's writing it down on a piece of paper.

SPEAKER_02 35:08

Yeah. By the way, that's really important. I need to do that though. And that's why I said, well, I need to do that. And actually today I was having a conversation with a client and they would need a while help with invoicing. And I'm like, yeah, hey, you are spending a lot of time creating these invoices, figuring out the, you know, where to build the documentation to send the bank for that. So for us to help you out, the first thing I need to is figure out what is the process that you use to send invoices. So he's a BC dude, and sometimes like typing it down is not the best way to do stuff. So I told him about Loom. Hey, just what record you say and scribe.

SPEAKER_00 35:53

There's scribe also. Loom is my favorite, and we actually got great feedback from our accounting team for the tax the tax season survey. They all were saying Loom videos, so helpful, better than SOPs.

SPEAKER_02 36:06

That's awesome. Yes.

SPEAKER_00 36:07

Because Loom actually records you and makes little bullet point notes.

SPEAKER_02 36:12

Awesome. So this is what what I'm going to be doing. So just to develop the SOPs, I need to style anything that I'm doing that I have on my mind, I need to start typing them down, which I will, which I will do. And then the staff, the staff I don't think I'm comfortable typing it down, I'm going to make a loom video. And then I'm going to let somebody else type it down. The process or create a library of loom videos that everybody that that's what I want to do for us.

SPEAKER_00 36:43

Because I've gotten really good feedback and I think it's easier to understand when you're walking through and getting a step by step.

SPEAKER_02 36:49

Yeah. The only thing is, as business owners, I know we are busy. I'm busy, but you have to realize this is important. And sometimes people don't do it because they don't see this is important, they don't see why not taking that video. But see.

SPEAKER_00 37:04

I agree. But what you can do and what I've been doing for Loom videos, when I'm doing things and I'm like, okay, this is something I shouldn't be doing, I just Loom video myself doing it and talk through it.

SPEAKER_02 37:14

Yeah, I need to like You have to do it anyway. I need to tell my guy, my people, uh or our team to start being as straightforward with us and like, hey, please give me a Loom video about that. Give me a Loom video about that.

SPEAKER_00 37:28

And I I've been replacing meetings. Like if uh if one of our employees has questions for me about something or how to do something in the balance sheet, like how to move or change something, I just do it for like I will do it in a Loom video and send it to them, and I send it to the entire team and say, hey, look, this person had a question about this. Here's how to remedy that.

SPEAKER_02 37:47

I need to do that because sometimes I get asked the same questions.

SPEAKER_00 37:51

Yes, yeah. Then it's stored there in our accounting chat or two.

SPEAKER_02 37:54

I would do that.

SPEAKER_00 37:55

And they can go back to those videos.

SPEAKER_02 37:57

Loom video is going to become my best friend over the next two weeks. I'm creating video for every single thing I do.

SPEAKER_00 38:02

Well, well, not not for the no Tuesday or not. After you're gonna be out for a week Tuesday.

SPEAKER_02 38:07

No Loom videos for But I have a lot of stuff to do because I need to let the the I have some ongoing stuff that I'm doing and I need to let the guys know how to do it. And sometimes what I will do now is like, hey, tell me tomorrow then.

SPEAKER_00 38:20

Yes, Tuesday.

SPEAKER_02 38:21

I will do it tomorrow. That's actually true. I should do everything tomorrow. That way Monday. Yes. Shouldn't it be good? Because what happened?

SPEAKER_00 38:28

Are you shopping Monday for your outfits?

SPEAKER_02 38:30

Should I? No.

SPEAKER_00 38:31

Yeah, I should I have meetings all day, so I won't be doing anything.

SPEAKER_02 38:34

I don't I'm just I'm just I already have, I already told my mama, hey mom, we gotta get together this weekend. You gotta help me. How do you feel about that? My mama helping at 27 years old.

SPEAKER_00 38:57

But but I she probably loves doing that though. She's super sweet.

SPEAKER_02 39:00

Yeah, so she loves that.

SPEAKER_00 39:02

I think everyone's different. I think that's fun.

SPEAKER_02 39:05

But so going back to that, but that's just how it's tough in my house. I'm like, mom, I don't really have time to think about making my love. Already, I was telling her, hey mom, this is my mom is kind of like I love my mom. She's kind of my like personal assistant at everything I gotta do in my house because I just show up to my house. She's like she's mine 24-7. And I just show up to the house on Mondays. That is true. That's on Mondays. But I don't know. I don't, I I don't realize how much of a blessing is that like I show up to my house, I don't do anything. Like I wake up in my bedroom, I just need to get myself dressed and take a shower. And she does everything. Yes, she makes my bed.

SPEAKER_00 39:49

I'm just kidding.

SPEAKER_02 39:50

She keeps she does. She keeps everything organized. She makes my bed, she put my stuff in there. The only thing I gotta do is just the only thing I help her with. It's like I take the reach stuff on the top shelf. Yeah, reach the stuff, open stuff, and then take all the what is what is the name of the place you put all the dirty clothes?

SPEAKER_00 40:11

Laundry.

SPEAKER_02 40:11

The laundry, no, but but whenever you take it down to do laundry, what is the the little basket? Yeah, it's that easy. Laundry basket. Yeah, I just take the laundry basket down. I just take the laundry basket down, like no, it's calf heavy sometimes. I just do that.

SPEAKER_00 40:27

Alright, guys, like, subscribe, comment, engage, interact.

SPEAKER_02 40:31

Yes, and remember, maxi foundations don't fix themselves, they just get more expensive.

SPEAKER_00 40:38

Who can fix that?

SPEAKER_02 40:41

You only right white glove. White gloves, yes. And but we cannot make you do what you're supposed to do, though. That is a stuff we cannot get into your head, you know. Like, hey, make sure you're making some loom videos this week. Record yourself, create some new SOPs.

SPEAKER_00 40:56

Yeah, our challenge for you is create an SOP this week.

SPEAKER_02 40:59

Yes, do it. Thank you, guys.