Manage Your Money for Maximum Profit

Lesson 21 of 23

Accountability & Myth Busting

 

Manage Your Money for Maximum Profit

Lesson 21 of 23

Accountability & Myth Busting

 

Lesson Info

Accountability & Myth Busting

One thing that tim was talking about that I didn't get to quickly wanted to pull the slide up tim's fernet when he came on he's explaining the flow of cash that all the circles of of influence and one is collecting money faster. Collection's collecting money faster is collections. I wanted to share some strategies that people will use to delay paying you and how you can counteracted. Has anyone experienced this? Where you send an invoice to a customer on then let's do thirty days later, or maybe two right away and they don't pay you. And you call him five or six days after do and say, where is the money? And I say I never got your invoice. Have you experienced that it's? Almost. Okay. Yeah. That's. A very common excuse. And it may be legitimate if you find a customer, it loses invoices easily. When you send an invoice to your customer, call them to receive confirms received it's. The simple trick you want. Teo, remove that excuse right from the get go. So what my team does when we send...

an invoice, we fought up a phone call. I say we just send you the invoice we know we sent via e mail, which sometimes is problematic and little delivery we want to make sure you got it. And once they say yes, we got it we say fantastic everything set we look forward to receiving your payment any questions or concerns cause immediately and we have paid way faster just by confirming receipt and customers are more appreciative of it because more and more invoices are being delivered b e mail maura maura getting lost so sometimes that excuse is a legitimate excuse so is not being a squeaky wheel it's being preventative here's a little trick if you still send paper invoices include a stamped pre stamped envelope with return information I don't know the psychology is specifically what's going on here, but studies are showing that people pay faster when that little pieces in there um if someone says that the checks in the mail right? So you call the costume and azalea I sent payment the checks in the mail you want to get as much information about that check is possible because it could just be a lame excuse if you ask for the check details was the check number the amount the day was mailed and you say the reason asking for this is so we can post in our system correctly they can't fake the cheque anymore now realize that if your business is going checked by check, chances are many of your vendors are twenty one million businesses have twenty eight million businesses in the u s air going checked by check chances are some of your vendors are struggling to the squeaky wheel doesn't get oiled so be the one who calls in on that and get certain information and you'll be prioritized um of course always be professional understanding we're told that trick of accepting credit cards if you don't accept it you can also accept paypal during break someone said hey you know what about accepting paper out you could do that to ways to make it the third party the creditor where you can receive the money andi can even offer payment plans if customers paying a little bit of time is a bear that better than a customer pays nothing at all so you have a gig jason and they say we can't afford this say well you know what we can implement installment plan leading up to the event and you can pay in small pieces maybe more appealing for folks so there's a couple tricks for you all right what I wanted to cover in detail in this segment was the stick to witness the accountability and the first I want to point out is some areas where this falls apart as you implement this profit first system one of the easiest things to do is to borrow from ourselves and we've taken certain steps to prevent that from happening we sell different accounts we remove the temptation but still sometimes the temptation may approach may come your way one of the best waste or final mechanisms you can use to enforce that accountability that route, that temptation is to join an accountability group to have accountably with other people. Here's one trick I had to use when it comes teo taking money out on borrowing for myself as my profit a pound mike profit count except this second bank somebody's accumulating there. The only way to get the money out is through a check you out, though, right? Check out to myself often when I'll do, and what I have done is work with another, a colleague of my night, my company, but another business altogether. And I sense that for dual signing rights on this checking account, so I may say, hey, jason, I wouldn't get dual signatures signatures on my profit account, so if I wanna get my profit out at approach you and you actually have to sign the check. And additionally, for your profit count, I'll be the dual signer. It doesn't give him rights or access to my account. He can't sign one solo, but for me to get my check, I have to get his approval. And since he's not involved my business, he has to have the emotional attachments, the chances of him holding me highly accountable. And when things get tough and I'm like I got to take that money out you're saying how you can't do it he'll hold me accountable so consider that maybe you want your business partner you have your mother and your aunt in there who's the most stringent with money that may be the perfect person to be the second signature and if you're the most stringent have neither of them be the second signature um so the common areas we borrow from his taxes and uh and we delay paying our taxes here's a trick you can do their tax account, that account you set that says door taxes change that nickname to the governments money that's all I've done for my account and when I logged into it and I see says the government's money on it I ain't touching that I don't know what's gonna happen but I am touching the government's money so consider doing that little trick changing the names on the accounts to so you see you see it differently allowing cost creep be careful of these monthly recurring fees that we incur um when we have recurring fees the software costing stuff you're considering we experience cost creep in the moment there may be some software we need and make sense we buy and it costs one hundred dollars a month whether the fee is but two or three months from now we stop using the software, but they cost keeps on going on and on and on into perpetuity so here's a couple tricks for that first of all investigate really anything that's going to recur in a monthly recurring fi? How invested are you gonna be in that program? How committed are you going to be to that program and utilizing what's in it? Secondly is you can contact this place is and tell him to put expiration saying I bought your software, the quickbooks, whatever the program is, I like this to expire in six months they do that they will do if you ask for that they can set that up and they can have it expired a certain point. So then as approaches, they say you're about to expire and then you can decide to renew it. So if something is a monthly recurring fee that's just how they structure it to sell it doesn't mean you have to accept that and just be very careful because I know a lot of businesses I've gone into, they have all these recurring fees going on and they don't know what's what anymore there's just so many so you can put that stop gap in place and then you know, one big trap to is if you have a business that needs to buy supplies or items or something that big chunks he's too start allocating small amounts for that. I call it the big purchase account to step another account where you're building toward that purchase down the road as opposed to getting surprised by it and did you say she's ready now? She's ready? Okay. Um so sabrina don't come online yet? Oh, there you are come online right now so hey, how are you? I'm great mike how are you doing? Good. Good. I wanted to show folks a couple more things first, but but this is actually even better. Sabrina schleicher doctor sabrina schleicher on and I have been friends now for I think five or six years I told you that story of rodrigo lage hey was we were sure that house in colorado and I had the bathroom with him it was a total disaster. Well, sabrina was down the hallway with donna that also was perfect. That was a meticulous bathroom. There was only one very clean, very clean. There was only one bedroom bathroom that was a disaster and it was mine. Everyone else was meticulous. So serena is a business coach and helps people with profit first and growing their businesses and keeping people accountable to profit. First, you tell us a little about your experiences of implementing profit first on what the react it has been when you've helped businesses do this stuff so yes, when when we're looking at first implementing it, a lot of business owners are they like the idea it sounds really good in theory and then and when it comes to really putting it in place there's a big fear that in that operating expense account the money won't be there to cover operating expense account operating expenses because you're pulling from it and so that I think the key really is helping business owners implements in small little pieces at a time like every quarter bumping things up by a percentage in these different accounts but I know you're talking about accountability and having one or more people holding you accountable it is critical because when times get tough we human beings do not do what is in our highest interest we will do what is easiest to get through the moment and will keep our business in crisis mode that way yes so what were the things I didn't tell you about sabrina she's a doctor of psychology so that you really know this stuff intimately? So what? What triggers it to fall apart so when people start pushing your business become more profitable, things start going their way what are the things that triggered to start falling apart in the first place? Well, it's everything that you've identified mike it is that idea that we need to plow back into our business that we need thio grow and in best maurin war into our business so there's that temptation with that money building up in the profit account? Oh, I have the money sitting right there. I can I can just use that eso having all of these guard rails in place that you're describing I just heard you as I was coming on, I heard you talking about having a co signer on checks. I hadn't heard that part of profit first, you know, I think that's an excellent idea you haven't heard because I just made up on the spot bythe anything that we can dio like that teo, you know, keep ourselves moving in the direction that we want to move and not come in and sabotage in on your mind ourselves. The tax bill is another one. I have clients a lot of times when client start working with me, we're doing pumpkin planning, so we're good growing the revenue in their business, their revenue is going to grow exponentially as they're applying the laredo's principle the twenty eighty that you're talking about and then they're going to get hit with a huge tax bill. So I really am happy with getting them going with setting that fifteen percent aside at the get go so that there's no surprises and they're not likely to come in and pull from places where they should be pulling in their business to cover taxes my government's money so yes to the government's mind so now talking about taxes do you get challenged on that twosome of your clients say but sabrina I don't want to pay any taxes I shouldn't be reserved for taxes do you get that? I have clients who have really good accountants that get their tax bill way way down on dh then I explain to them now look when we implement profit first you're going to be profitable you're going to have to pay taxes but you have to you recognize on the other side of that how much more efficiently or businesses running that you was an owner that are able to pay yourself the way you should be compensated for all the hard work that you put into your business and there will be a profit money that you're you're also getting so let's think it's the accountability specifically how do you enforce or how do you implement accountability with the people that you're helping increase the probability I have a big hammer and I think you mean a physical hammer? Yeah, yeah eso eso there's there's a couple of different ways I am I'm subsistence that's just part of my personality, so if somebody tells me that they have a goal as a business owner that they're trying to accomplish, I am going to keep bringing it up to them and keep asking them about it I essentially stand for their their highest self so that's one level of accountability the other thing that I like to do though is get them building natural accountability in having other people holding them accountable besides me as a coach because if I'm doing my job well as a coach you don't want to have me in your life forever eso there needs to be other people in your environment and others things and other structures in your environment that hole would you accountable so like you were saying earlier someone who is really good with money but interest in your business can be a great accountability partner I really like the idea of showing bank statements that's another way because you can't fudge I guess you could fudge a bank statement but it's a lot harder to do that so showing an accountability partner or an accountability group your bank statements that's pretty gutsy that reminds me a secure in to weight watchers right? So weight watchers support mechanism is that if I attend a weight watchers meeting, the first thing to do it is a way in with the facilitator of that event because you can't fudge the numbers that's kind of what you're suggesting yes, exactly exactly I love it happens when we say to another human being this is what I want to do this is what I intend to do all of a sudden in our mind psychologically are accountability goes way up now if that person if we know that person is never going to ask us again about that, it doesn't mean anything but if we say that to a person that we know is persistent and will hold us accountable or a group of people who are persistent and will hold us accountable that that really increases our accountability and and they'll likelihood that we will follow through now do you have a strategy? Because I think traditional accountability and I don't know if it's if it's run well is did you the person says, did you do it and then the other person says yes or no but I think there's more of a story or something behind it how do you go the process of addressing accountability when its mortal people talking to each other? Okay, so when somebody doesn't do what they said they were going to do, there is always a story and it's always a really good story are a really good reason about why it didn't happen, so I let them talk I'll let them say that that story and then I just sit there quietly and if it's face to face, I'll just look at of like, okay and how is that a good enough reason to keep you from doing what you really said you wanted to dio with a group of people it's, it's the same thing it is okay, you've got off track what are you going to do to get back on track? How are you going to keep this from happening again in the future? What's what's in with business owners it's really about digging into what's going on in your business where are you being inefficient in your business that caused you to get off track and what can we do about it? You know what one thing is interesting? I don't know if you caught the segment right before monique was kind enough to come up here and on this chart here we're talking about our business and she's one element for business that she has an emotional appeal to generate no money and is travis and kirsten car out and say, well what's the story behind that why do you have such an appeal to that? Is that kind of what you're suggesting exactly? And I did see that that and I thought I totally get where she is it's it's all emotion driven she's highly invested emotionally in that part of her business that maybe undermining her from her higher goals okay, so she's here she's looking right at you you're looking hurt you even if you can't see her but tell us what how would you coach our hope hold monique accountable to this next transition in our business what so so really what I would want to do with monique is pull away from looking at at this particular offering and have that conversation about her ten year vision and what does she really want for herself? What are her core values and her immutable laws and where is she trying to drive her life not just her business jimmy she has three businesses here but where is she tried to drive her life in the next five to ten years and let's look at the fastest, most efficient way teo get there that lines up with her core values her immutable laws and a lot of times when we have those conversations people can let go of things that for whatever reason maybe undermining them from where they're trying where they're really trying to go now what about advice giving? I mean you're in a professional position where you're actually coaching people through this but maybe you're doing accountability with peers or maybe a professional eyes they're a technique or a way to deliver advice or do you not deliver advice it's just asking questions oh I deliver advice I didn't tamper with the side of asking questions but my clients want answers and they want things to change quickly in their business I give advice at the same time we have to be very careful about how we give advice because our psychological reaction is to resist when someone tells us you should do it this way so it's it's more in terms of here are your options of get here's how here's what you've told me one, why would she options were getting their let's look at these different options? What option do you think now that we've explored all these options? Which option do you think is going to get you there in the way that you want to get there and and in the most efficient way? And when it comes to accountability, how do people get started? So I'm encouraging everyone to to find an accountability partner, maybe work with coach what's the way to get started with with accountability, the account of it, the way to get started is to say, is to write down for yourself, really what you're trying to accomplish if you're implementing profit first, bie rial, clear for yourself, why you want to do it? What what's your why behind doing it, and and then think about the people that, you know, in your world that you look up to and admire and respect, and then go have some conversations with those people and really test them out to see if they're going to be good accountability partners. I would ask them who, where, where else in your life have you shown up as somebody's accountability partner? And and probably not in that same language because we don't go around calling ourselves accountability crackers, but you know who who else have you done this for and how did you hold them accountable? So you're essentially interviewing people to be accountability partners for you and now what about the reverse? Because accountability is a two way street right? If we're accountability partners I'm just is responsible to use you to me how do we know we're going to be good ones and how do we ensure we stay good ones yeah so again you want to think about how do you how would you hold your accountability partner accountable if you are tempted to be someone's buddy and friend like if that's your natural side of your personality you're probably gonna have to be overcoming that to be a good accountability partner because you're going to be drawn into say I understand your situation was really tough I understand why you why you zeroed out that profit first account and ploughed all that money back in your business so you're going you're going to have to think about how am I going to hold that other person accountable and can you give some tactical techniques for different groups you just wants to do a month once a year how do you run it stuff like that for running an accountability group yeah yeah okay, so if you're setting up on accountability group you wanna have frequent meetings if you going once every six months that's not going to be enough to hold you accountable I think a virtual group can work where people are getting together like in a google hangout or by teleconference, but it really helps to add that face to face component every few months or once every so six months. But if you're if you're meeting, you know, thirty minutes, month to month by phone and you have a small group of three or four and you're you're sharing your numbers, showing bank statements, holding them up to the screen so that you could each other that is going to be much more effect and then for the actual meeting itself be a virtual or face to face what's the structure for me I have a clear agenda that you're following and have it be the same structure every single time because the temptation like if you meet in a restaurant, the temptation is going to be socialized and let's enjoy our meal. Ondo yeah, the last five minutes we should show our bank statements that's not gonna work so um, it's going to be much more effective? Teo goto a meeting room keep the food out of it on dh you know, it's real clear that we are here for a very specific purpose this is what we're going to dio you know, mike, you've helped me craft the masterminds that I run in with my clients and my business and so we start out with the best and worst that we share in our business and personal life. We don't spend a lot of time hashing that out. We just kind of it's just a way to stay connected to these these people asuman beings, because we're all we all have our lives that we run outside of our business on dh then we move into here's the focus of our meeting, and then maybe you have a go around where each person shares here's, what I put in my profit account this month are, whatever period of time here's, where I've put, what put my operating expense and, you know, I'm struggling here, I could use some input on this or that have that opportunity and then move on to the next person. All right? So I love to discuss that real quick is if we start doing these accountability meetings or calls, it sounds like it's not you don't just talk about numbers, it sounds like you say here's, where I'm struggling, here's the issues I have, what was the dialogue around that? What happens when someone presents I'm facing a challenge? Good luck with that or she you hear that out, you know, and I think that something is you're putting an accountability group together at the beginning, you want to have that discussion with your other members. How do you want to use the group? Do you want to just discuss numbers or do we want to be? Resource is to help each other in in our businesses on def, the group decides yes, we want to service. Resource is for each other. And then I definitely want to get an agreement around confidentiality. I work with rural business owners, so a lot of them are in small towns where everybody knows everybody. So agreements around confidentiality in these types of groups are very important when you're talking somebody's business numbers. But then, if the group decides yes, we want to get into being three sources for each other, and someone brings up an issue. You might not be able to have time in each of these groups to go over everybody's issues in their business so the group would vote on. Okay, you know, there's three issues brought up on this in this meeting. Which one do we want to dive into for this particular meeting and one one experience I have and tell me if this confirms your experience. I've found that it's in the best interest for accountability members, mastermind groups never to do business with each other, because the second you do it attains the relationship. And now it's a vendor client, not a peer to peer but similar experience I am in a rural area so it's different way we do business with each other, I mean, all over the place and how you temper this. How do you have? How do you how do you manage that? Well, I I personally I screen my clients very carefully. I don't take on somebody is a client that I would I feel uncomfortable addressing any kind of issue that came up in a vendor customer relationship with in mastermind groups, accountability groups that goes back to confidentiality and again making sure that what I'm bringing in people who have integrity to be a part of that group yeah, my fear is someone sees your profit, your bottom line because you showing the statement and they say that that some of that's my own money and I want, you know, saying, yeah, yeah, so what I'm doing with my clients because we're in a small town is I have said to them, you want to have an accountability partner that you're going to actually show numbers too let me know, and I will make a recommendation to you, and I'll do some matchmaking and I'll try to pair people up, it would be good accountability partners, and in our mastermind group, I do not set the expectation that my clients are going to bring their financial statements and show them around the room I got you and what have been the results you've seen it you've been doing for quite a while quite few people have been doing profit first within the results for these accountability groups it so this is this I haven't done accountability groups with profit first until very recently but I have been implementing it one on one with my clients and I've seen is the results really just blow me out of the water you know, in my own business when I implemented it it enabled me to take the nine weeks of maternity leave that I took a few months ago with my when my daughter was born with my other clients I've had two that have taken their families to disney world within six months of implementing profit first and we're talking about business owners who do the traditional thing that we do we plough everything back we may not take a sufficient paycheck so you know, family members and vacations all of that has been on the back burner in terms of really enjoying why we're in business in the first place, which is to have that she'll freedom to do the fun things that we want to dio yeah, I'm thinking more actually specific I loved hearing that but more specifically about the accountability itself have you seen when people do accountability, group's profit first or anything? Are you seeing different results than when they were stand alone certainly ok, I mean, when we're when people are left on their own devices, they're the temptation is, you know, I'm just not going to put that much in that owners payroll account because our expenses air so high and when it comes to cutting expenses that's, hard that's where the accountability really comes in when you have someone saying and you did this with me, mike, you said, sabrina, you've got to cut your this is in your business and I said, no, I run a lean operation, things were fine and you said you kept saying, no, you've got you've, you're spending too much here, and it was on my own coaching zay had three coaches that might have been a little excessive eso every every time j k I was giving her a shot, I said, you got your expenses didn't know I said here's a shot kill it right way more, no tequila for me, yeah, so so that other person who's looking in on your business and who can see things more objectively and a coach and accountant that's a great person to do that, but it doesn't have to be a coach are out doing that, it would just be someone else that you're having to answer to and explain, why the heck do you need three coaches, sabrina right here's the final thing I wanna ask you is not often that people have access to a business psychologist you for your first ever met does this so I asked you to prepare some information there's so much I wanna ask you about the move on did you have a download or resource that you could share with everyone? Yeah. Do you have a resource that employees that's what? I help my clients with the most because dealing with people in our business is very, very hard. So I do have a free resource it's called five secrets to getting exceptional performance from europe. Ploy ease back you. And by the way, we were talking about earlier this's the a versus the b first see player, keep going. I'm sorry. Yeah, I know you want to be getting the best performance that you can out of your employees and you want to be attracting a players and cutting those be e c and d players out of your business? Well, maybe not the b players but the c and d players they gotta go on dso that's what I really that's everything that I do is focused around getting the most out of employees that's because they're one of your biggest investments in your best s o the five secrets to getting exceptional employee performance, people could just go to my website and download that for free okay great what's your wife say tap the potential dot com tapped the potential dot com okay, doctors like her I appreciate time thanks so much. Thank you. It's a killer shot waiting for you she haven't during thanks sobrino talk to you later who doesn't drink? I always imply they drink is totally inappropriate like a fish. Yeah. How are we doing with the live audience any quite great actually, sabrina was really engaging them. People are really impressed what they're saying there's a lot of discussion going on around what she was saying that's fantastic great guests thank you for bringing her on. Yeah, yeah, good. An accountability is a serious component. Is anyone right now on a business accountability group in here? One person okay what's been the impact for you reckon how long you been in your county in a couple of for about six months. How it was the impact do you feel it definitely has helped me stay focused and there's something about when you pick up that phone you realize it's like having your sea level people sitting right there with you exactly. You know you and you as long as you stay truthful, I think that's one of the key things you have to be really transparent and vulnerable because if you're not, then you're playing a game right? You get what you give type exactly but it's help it's definitely well it's actually been just since you and I have known each other it's helped grow my business probably thirty percent there you go I've been accountability group for fifteen years now um and it's been the most impactful thing my business here's what I found interesting for me is to form accountably groups that are not your friends people that you I don't know and the more diverse the group the better different experiences different businesses what I found is thes people are my closest confidants now I've been working with him for so many years but we're not in the same social circles so what happens when you're not the same social circle that innate competition goes away you're truly there to support each other so when someone struggling you're helping them and when someone's ex telling you were cheering them on boats once your friends that have the same friends the relationship changes so it's ironic it's people that you don't know become your best accountability partners and the thing is it costs assume you nothing right you just formed the group it's cost nothing costs me two hours a time cost two hours of time too sharpen the ax right? You know what the rest time yeah if I took that and said okay, how much am I paying myself for those two hours a time? Three, four hundred dollars if it was a client if it returns thirty percent back it's well worth the investment if it returns forty percent I mean you just got to take and play the ceo game I'm investing for hundred dollars and I get forty percent on top of that bat it's it's amazing it's huge there's a saying by abraham lincoln he said if I was giving eight hours to cut down a tree, I spent seven hours sharpening the axe, right? But most of us spend eight hours hacking away the tree and we don't even get halfway through it. The's accountability groups guess removed from our business the doo doo doo and forces us to look from a different perspective and other people looking in like monique had a breakthrough is a form of accountability we sat up here you have an emotional attachment you think about this all times weighs on your mind from morning tonight you're always considering it but also any of his perspective of of not your friends but your peers who say here's another way and it conjoined are minds wide open and see a different perspective that you can achieve what you want and packaged together and be very profitable and this exists for all of us so definitely great coming in from victory girl who's in the chat room she's saying accountability makes all the difference the only good thing about having a boss is that they keep you accountable so you someone else to keep you accountable. So you never have to have a boss again. Oh, I love that. Yeah, I love that. Uh, here's. Some of the myths I hear about profitability and maybe you guys could help me challenge these one is I want to grow my business. I want to grow. I have to plough back money. It takes money to make money, right? We've talked about this over and over, and I called you up on stage and said, you know, uh the less you do, the more focused you're in your business. The more you become like a surgeon, the more the premium you could dictate and that's one of the biggest lessons. And I know I'm repeating myself here, but I want to drive this home. But the more focused you become on doing one thing and we really, really, really specialized. The customers who are looking for some let's really, really specialized will approach. You will come to cause over reputation, and they will pay you a premium. It's. The businesses that diversify that never make a lot of money.

Class Description

Ready to take full control of your business’s financial health? Join Mike Michalowicz, author of The Pumpkin Plan, The Toilet Paper Entrepreneur and his newest book Profit First, for an immersion into understanding the shockingly simple principles behind financial management and leveraging it to grow your business.

In this course, you’ll learn the core four principles of financial health and how to use them to create a profitable "rhythm" for your company. You’ll also learn about the psychology of managing your debt, whether you’re struggling with credit card debt, loans, or personal guarantees. Mike will also cover ways to bring new money into your business through cost-cutting, renegotiating, finding lost revenue opportunities, and much more.

By the end of this course, you will have escaped the panic-driven cycle of operating check-to-check and you’ll have a foolproof way of ensuring that your business becomes permanently profitable... from the very first day that you watch this course.

Reviews

Ella Heath Photography
 

Wonderful class!! Not only is the content very impactful and life-changing but Mike's funny character made the class very entertaining - the marker on the forehead story made my husband and me laugh to tears!! We are implementing Profit First right away. Thank you CL for hosting such an amazing class.