Diary of a PFP
Join Tim Seymour and Jason Withers as they dive into the “Diary of a PFP,” sharing insights from the Monday sessions of Profit First Professionals. In this episode, they explore how structured calls, community collaboration, and real-world client experiences help members sharpen their advisory skills and apply the Profit First methodology in practice.
From strategic client selection using the 20/60/20 framework to leveraging special purpose accounts for smarter financial planning, Tim and Jason unpack practical strategies that can transform how you manage your clients and your business. Whether you’re a current or aspiring Profit First Professional, this episode offers actionable tips, real-life examples, and a glimpse into the supportive community that drives success in financial advisory.
Key Takeaways:
- Structured Monday sessions help members deepen their Profit First knowledge.
- Sharing insights fosters stronger connections within the community.
- Special purpose accounts help plan for future expenses and seasonal events.
- The 20/60/20 client analysis framework identifies high-value clients.
- Buffers in financial planning provide stability for unexpected challenges.
- Proactive client engagement uncovers opportunities for growth and profitability.
Transcript
Welcome to Profit first beyond the Book, a podcast that takes you beyond the book with Profit first brought to you by Tim Duncan and the rest of the Profit First Professionals UK and Ireland.
Speaker A:And with me this week once again is my good friend and colleague Jason with us.
Speaker A:Welcome, Jason.
Speaker B:Good morning, Tim.
Speaker B:How are you?
Speaker A:And so today.
Speaker A:I'm very well, thank you.
Speaker A:Very well.
Speaker A:So Jason, today we're going to talk about something we've been doing within the Profit first pathway which we've named Diary of a pfp.
Speaker A:Now where this has come from is that we want to share some of the things we do with our members on a Monday.
Speaker A:So Monday is our, should we call it a members day?
Speaker A:Is that a good thing to perhaps label it, where we have calls with our professional members throughout the day.
Speaker A:And they're in different types of calls.
Speaker A:So as it stands right now, at 10 o' clock we have a call with our certification cohort.
Speaker A:At 11 o' clock we have a call with our post certification cohorts.
Speaker A:That's people who have become certified, looking to make the next steps with using their certification, bringing on new clients, working with the Profit first advisory strategies with their clients and making a role impact, you know, in their clients world and their clients businesses, as well as continuing their own journey with Profit first, of course.
Speaker A:And then at lunchtime we have our Profit First Power hour, as we call it now, which is the call for all of the community, all of the members are invited along to that call.
Speaker A:Now things might be changing in the new year, but the core and the idea of these scheduling calls will be similar.
Speaker A:So the names might change, but the setup will be very similar.
Speaker A:Whereas we have people in certification, people in post vacation and all our members coming together as well.
Speaker A:So what we started doing is on a Monday afternoon because we've had all of these calls with our members, myself and Jason and sometimes Deb Hannaday has joined us as well, have done a brief overview of what's happened on those calls, the topics we've discussed.
Speaker A:And so we've done some short videos talking about this.
Speaker A:We've called it Diary of the PFP and we've dropped it into the Profit First Pathway Facebook group.
Speaker A:So the people in the Facebook group are able to have an insight into what's going on in our world and what we discuss with our members.
Speaker A:So the next step from that was we thought, hey, this would make a great episode for our podcast.
Speaker A:So Profit first beyond the Book and diary of a PfP part one.
Speaker A:So this is kind of going to summarize a lot of the topics we've talked about over the last month in the profit first pathway, but mainly with our members.
Speaker A:So.
Speaker A:So Jason, we're gonna, we're gonna start with lots of.
Speaker A:There's lots of things we've talked about, of course, because we're talking about five Mondays where we've actually worked by members that these videos have started from.
Speaker A:One of the things I want to talk about initially because this podcast is Profit first beyond the Book.
Speaker A:So we're gonna talk about a couple of beyond the book Profit first tips that come to light throughout these calls and things that we do talk about quite a lot with our members.
Speaker A:But there was two particular things that stood out for me when I looked back at all of the videos.
Speaker A:One of them is a fantastic tip that you came up with last week actually, and I'd like you to share that, which was one of the what we call special purpose pop.
Speaker A:But I'm not going to grab the glory from.
Speaker A:I'm going to let you explain.
Speaker A:So if you're happy to share what you came up with, I think this would be great for our audience to hear for sure.
Speaker B:I think we use special purpose accounts quite a lot.
Speaker B:I certainly do with my clients beyond the core accounts that we read about in the book, really to deal with some very specific circumstances as they arise from time to time.
Speaker B:You know, typical examples that people use, getting a holiday pot together, maybe a team training pot, those kind of things, personal development pot.
Speaker B:They sit outside of the core accounts but they have a very specific purpose attached to them.
Speaker B:So last Friday, this is clearly going to be very time bound scenario for what it's worth.
Speaker B: t a week on from Black Friday: Speaker B:So back end of last week, I'm sat there and you know, the emails are coming through, Black Friday this, Black Friday that.
Speaker B:And as always is the case, yes, there are things I want, I want to buy or take advantage of pricing for, for both business and personal things.
Speaker B:So you know, going through the process and normally my, my technique is I will either use a surplus in my OPEX account or maybe I'll draw something from my profit account and to hand these things a moment in time.
Speaker B:And I suddenly found myself thinking this would be perfect for special purpose account actually to start building up the funds throughout the year so that by the time you get into that Black Friday Cyber Monday kind of moment in time, a we're not really thinking about where am I taking the money from.
Speaker B:The money's already sat there.
Speaker B:But also it is doing the job of giving us some, some boundaries, you know, it is, it is helping us contain that spend well.
Speaker B: be and actually as I go into: Speaker B:What I do need to know is there are funds that have been built up for a specific purpose and if the right things appear at the right time, the money is there.
Speaker B:Non emotional decision, just jump in, buy the thing, you know, it's covered off.
Speaker B:So I think that also taps into one of the ideas.
Speaker B:I mean, much like you Tim, we've been profit first professionals for six, seven, eight years now.
Speaker B:And yet all of a sudden here is a new application of something that I actually all the time with clients and have done for years on end.
Speaker B:So I think one of the aspects that comes up is people think, oh, it's the five core accounts, that's it.
Speaker B:I'm doing some allocations, that's the end of the story.
Speaker B:That's all I need to do.
Speaker B:And the point actually is we are all learning all the time about how to leverage the system and get the most out of the system through all sorts of different aspects in that way.
Speaker B:And this is just one that has come at a moment in time, you know, to me right in the moment, in the last week.
Speaker B:So yeah, I'm kind of looking at it as a, okay, don't allocate in November necessarily give December a miss, but maybe actually make it almost like a ten month thing.
Speaker B:So the allocations run January through to October.
Speaker B:The money's there, ready to go by the time Black Friday Cyber Monday comes around.
Speaker B:So yes, it'll be interesting to see how those percentages actually drop out.
Speaker B:Probably more than I'd like them to be, I suspect.
Speaker B:But hey, that's life, isn't it?
Speaker B:And therein lies part of the aspect of control.
Speaker B:And then thinking about how I plan my own year to get enough money in a pot for it to be, you know, give some room in order to think about getting hold of some different things at a point in time.
Speaker A:Yeah, I think Black Friday is a classic example of where we would make an impulse buy.
Speaker A:We would see some think, think, blimey, that's a lot cheaper than what I was looking at earlier in the year.
Speaker A:I've just got to buy it, I've just got about it.
Speaker A:So we get tempted in to the marketing aspect of what Black Friday is and we make the purchase.
Speaker A:But actually by flipping it around, which is what you're saying, and actually putting some money aside for Black Friday in a special purpose pop over a period of 10 months, it doesn't matter.
Speaker A:Then if you, if you do see that opportunity to buy something, it's going to really benefit you because you know, you, you want this thing.
Speaker A:But it's, you've been monitoring the price perhaps throughout the year because you're being proactive now as opposed to the impulse when it just comes up and you're thinking, I've got my eye on this, I'm going to keep my eye on this.
Speaker A:I'm going to watch it, watch it, watch it.
Speaker A:Boom.
Speaker A:Money's in the pot.
Speaker A:I can buy that.
Speaker A:It's a lot less than what I thought I was going to spend.
Speaker A:Now I've got some money left in the pot and I can decide what to do with that moving forward.
Speaker A:Forward.
Speaker A:And, and that kind of.
Speaker A:Sorry, you, I think you're going to jump in and say something, so I'm going to let you speak before I go on to the next stage.
Speaker B:Now.
Speaker B:I was just going to say, and I, I think for me, we, you know, we talked about it on our.
Speaker B:I can't think if it was the 11 o' clock or the community call now, you know, just as an idea for members to think about.
Speaker B:Here we are, you know, we're all business people.
Speaker B:We all, you know, sort of lean on each other periodically as well as a community.
Speaker B:But we all know we're going to get faced with clients who roll up to calls in December who say, ah, yeah, I actually bought this thing over here.
Speaker B:Oh yes, I did some Black Friday stuff.
Speaker B:Ah, yes, I took advantage of that.
Speaker B:Can you now help me reverse engineer money, my pots, my structure, to be able to deal with that?
Speaker B:As you say, that impulse sort of overspend the out of the norm kind of stuff.
Speaker B:I mean, some of the things that I did were on annual programs because that's where the best deal was to be had.
Speaker B:But that of course is more money up front.
Speaker B:So, you know, there will be these moments where real life absolutely 100% is going to happen and we will all be faced with it.
Speaker B:So all of a sudden here is a technique that we can all use as profit first professionals with our clients to say, okay, yeah, of course I can help sort it out for this year, but how about we do this going forward again?
Speaker B:It's just creating those layers of support, safety, value, ways of thinking about things, you know, to give clients the support that they need at different moments in time.
Speaker A:Yeah, I love it.
Speaker A:I thought it's a great idea.
Speaker A:When you, when you mentioned it and it came out of your mouth, I just, it is another kind of eureka moment for me that our members have, our guides have, you know, our experienced members have.
Speaker A:We don't always have them ourselves, but we hear them and then we suddenly think that's a great idea because we're in that world of thinking about these things from a different perspective and suddenly these ideas just come to light and then you get that light bulb and go, yeah, what a fabulous idea.
Speaker A:Yeah.
Speaker A:So it's something I'm going to be doing by the way.
Speaker A:And there'll be a lot of people that listen to this and some people will say great idea, fantastic, really love that, but they wouldn't actually do anything about it.
Speaker A:Other people will listen to this and it probably be a smaller number and they'll actually think, you know what, I'm going to do that and they'll open up pot.
Speaker A:I would love in a year's time to hear from those people if they've done that, to let us know what they bought from their Black Friday pot and, and whether they spent all the money, whether they still had a buffer left and that's money left in it they could use elsewhere.
Speaker A:And that takes us into our next kind of profit first tip.
Speaker A:As I, I actually mentioned the word buffer.
Speaker A:Now this, a buffer for any profit first potential can be useful, can be helpful, can provide.
Speaker A:A feeling of reassurance to the business owner sometimes.
Speaker A:But also the buffer can be too big or it can be too small.
Speaker A:So what's your take on buffers and where would you use a buffer in the profit first methodology?
Speaker B:So I think for me it can be, it's a client dependent discussion.
Speaker B:For me I think there are some core ideas which come out which are readily explained in, in the book.
Speaker B:You know, those ideas of three months of owners pay, make it six months, make it years worth of owners pay.
Speaker B:You know, that's part of a longer term piece of intentional planning.
Speaker B:I, I think, I mean I, I have a, a client where we use three different types of buffer actually we use, we have a buffer account for wages for which the aim is to build up a month and they, they run a payroll that's about 100,000amonth.
Speaker B:So the idea is that over a period of time they build up a month of buffer outside of what they would normally do.
Speaker B:You know, we allocate and they run a surplus in their regular wages account as a very specific account that we run anyway.
Speaker B:But just the idea they are building it that, that sum of money in the background.
Speaker B:So that's one second is an OPEX buffer.
Speaker B:Again, very intentional.
Speaker B:Despite the size of their payroll, they're actually pretty lean as a business.
Speaker B:So for that the target is much more sort of two to three months of buffer.
Speaker B:And then we have one other part which is, which doesn't have a specific sort of top end idea amount to it or a target amount to it that they, they have one client who is a large part of their revenue and we actually allocate money just to say what if anything happens with them.
Speaker B:Now the reality is if they lost them as a client, the business looks totally different 24 hours from now and very different decisions would need to be made.
Speaker B:But they're an organization who typically may not make payments throughout the month of December.
Speaker B:You know, they kind of get into that Christmas protection mode and it's oh well, you know, we don't make payments in December.
Speaker B:You know, you've got to wait till January.
Speaker B:Well, if you're carrying 100,000amonth payroll, that becomes a bit awkward periodically.
Speaker B:So we have a very intentional buffer and that just basically grows and grows and grows and grows.
Speaker B:And it's, it's a very small amount, it's 1, 2% every time we allocate, but it just builds up in the background.
Speaker B:Now as it happens in the last probably six to eight weeks, I would say they have actually had a very real problem way out of their control to deal with, which was all to do with the US Government shutdown.
Speaker B:That meant that this particular organization did not have funds coming through, weren't able to make payments.
Speaker B:And so actually this buffer did get used.
Speaker B:You know, it didn't cover the whole amount, but we use some from the wages thing to cover wages bill and so on.
Speaker B:So sort of right now, within the last month or so, those three buffer accounts have absolutely come into their own.
Speaker B:You know, I'll say nobody could see it coming as a set of circumstances and it's definitely not a set of circumstances that would apply to the majority of businesses in the UK necessarily being sort of subject to that, that kind of problem.
Speaker B:But it just goes to show you don't necessarily know what is coming up in the future.
Speaker B:And people might think about the pandemic as being very obvious, but it's, that's like such a big national issue rather than a company.
Speaker B:Individual company issue, let's say you don't know what you will need the money for.
Speaker B:But what it did allow us to do was plan our way through how that money was going to get used.
Speaker B:We kind of had backstop moments in time of okay, well if we do get some money through, where are the priorities in the spend?
Speaker B:How do we cover those things off?
Speaker B:You know, they're having some refurb work done.
Speaker B:They've, they've bought their own premises this year.
Speaker B:So at the moment they've got, you know, refurbishment bills, five figure sums coming through on a pretty regular basis at the moment.
Speaker B:So you know, they're under more sort of expense pressure than they would ordinarily be.
Speaker B:And then this happened on top of that.
Speaker B:But they were able to weather that storm and I think it was the longest US government shutdown that they have on record.
Speaker B:I think it was over 40 days in the end.
Speaker B:So it was a protracted period of time.
Speaker B:But the buffer accounts.
Speaker B:Absolutely.
Speaker B:Well, they did a couple of things.
Speaker B:Number one, it allowed them to make payroll without thinking about it at the end of October.
Speaker B:Number two, business owner, yes, was concerned but didn't get into a position of sleepless nights about it.
Speaker B:You know, at that kind of level of stress, wondering what was going to happen.
Speaker B:So it became a very methodical process.
Speaker B:No emotion really attached to it.
Speaker B:Here's the money.
Speaker B:This is exactly the kind of thing that it was designed to be used for.
Speaker B:How are we going to use it?
Speaker B:Let's get intentional about that.
Speaker B:What happens if it goes on for another 30 days?
Speaker B:What if it's another two weeks?
Speaker B:So we were basically building strategy on the basis of this money that had built up over time.
Speaker B:So I think that in, in the context of fine, that's my client, but we had other members on the call who were very actively using buffer buffer accounts almost.
Speaker B:I think for one member it was almost like an absolute non negotiable with her clients.
Speaker B:No, you know, we will have a buffer account and you will get to three months of coverage.
Speaker B:Be that OPEX owners pay, whatever it might be as a very core part of the work that they do with their clients.
Speaker B:And I think it is one of those elements.
Speaker B:We don't know what's going to Crop up and things are a bit more unpredictable these days.
Speaker B: more prevalent as we go into: Speaker B:Just dealing with levels of uncertainty as much as anything.
Speaker B:I mean, there's a whole economic discussion in the background of that as well.
Speaker B:Of course.
Speaker B:Will people get paid on time and how will these things work?
Speaker B:Find the regular commercial things, but it might just get a bit tighter and the cost might rise a little bit more.
Speaker B:So the idea of working out how we can factor these things and I think is going to hold great value for clients who run that kind of system in the background.
Speaker A:I think as well.
Speaker A:Jason, everything you've just shared of what you're doing with your client, it's not something that anybody can just read the book and apply.
Speaker A:This has come from years of experience working Profit first with lots of different types of businesses.
Speaker A:Being in the money, being in the moment with the client, having regular conversations, being able to understand what the client's objectives are, what their outcomes they're looking to achieve, but also what potential problems might need solving.
Speaker A:Which is the buffer, obviously is there as a fail safe to prevent serious issues that, that can happen to a business.
Speaker A:Because we all live in the real world, as you've said, things happen outside of our control.
Speaker A:But having some measures in place that mean we've got a buffer, that means actually we can deal with this.
Speaker A:We need to move this money here, we need to move this money there, we can deal with it.
Speaker A:Right, that's dealt with.
Speaker A:How do we now start to build those buffers back up in case this thing happens again or what's our next steps to take?
Speaker A:These are conversations that we have on our calls with our members regularly so our members are able to tap into this knowledge and as you share this information with them and we all share our, you know, our collective experiences of situations we've had with clients.
Speaker A:It massively helps our members that are newly certified in particular be able to proactively solve problems with their clients, you know, ahead of the game.
Speaker A:These aren't things that you can learn from the book.
Speaker A:So if you want to go beyond the book with Profit first, obviously being a Profit first professional is the place, you know, that's the place that you can learn and you can gain this knowledge from the, from the community.
Speaker A:Because the, the community is really key and the, the support from your peers within the community is, it's really grown.
Speaker A:This last year in particular, I feel with the WhatsApp group.
Speaker A:And that even today there's people arranging, there's a couple of members arranging to jump on a call to support each other because one's asking to solve a problem and someone's going to jump on a call with them.
Speaker A:It's amazing.
Speaker A:I see these things, how supported each other, each of our members are for each other.
Speaker A:There's no competition, it's all a collective collaboration because there's so much work for us to do for, for businesses with profit first.
Speaker A:And so I just wanted to highlight that.
Speaker A:But, but, but I want to move on because we've talked about some real strategic, technical profit first, you know, aspects of what we do with our clients and what our members are doing with their clients.
Speaker A:And, but of course, what happens when people join us is they go through certification program, they become a certified property first professional.
Speaker A:And then what we do is we encourage them within this post certification course, the 11 o' clock calls on a Monday, we encourage them to talk to clients and you know, and when they're having conversations with those clients, we kind of encourage them to look out for certain triggers, the certain things that are said by their clients.
Speaker A:So you've had quite a few conversations about this with our members recently.
Speaker A:Is there anything that comes to light in respect of triggers that you can share with us as well?
Speaker B:Yeah, I think one of the things for me is it makes having a conversation with a client a really straightforward process.
Speaker B:Actually, you know, the fact that we, I mean, I don't have a bookkeeping or accounting practice, so I'm going to kind of go with a royal we kind of discussion here.
Speaker B:But you know, we have all of this data from clients.
Speaker B:It's in Xero, it's in QuickBooks, it's on spreadsheets, it's wherever it is.
Speaker B:The question is how do we actually use that as much as we are keeping score a lot of the time, how do we, how do we help our clients start scoring those goals that go with that?
Speaker B:And the trigger conversation makes for a really easy introduction, I think.
Speaker B:You know, if you think about it, it's like, okay, well what have your cash balances been for the last year?
Speaker B:What have your last four VAT returns looked like?
Speaker B:What can we glean from that that allows me to provide you, the client with a bit of insight and a bit of value to help us understand how we can better use cash in your business?
Speaker B:So the VAT one I think is a terrific one because I think generally people probably fall into two camps.
Speaker B:They either don't save for the vat.
Speaker B:And the VAT bill is always a surprise and is always more than anyone ever wishes it was.
Speaker B:Or people do save for VAT, but they save for it at 20%.
Speaker B:Now for me, I'm in a company going, okay, at least something is better than nothing for sure, but could we refine that a bit?
Speaker B:What can we learn from your past VAT returns that would give us an indication we don't need to save at 20%?
Speaker B:And I understand there are different VAT schemes that would have different rates applied and all that kind of thing as well.
Speaker B:But on that kind of very general basis, I'm looking at to establish the idea, maybe someone really only needs 13, 14%.
Speaker B:Maybe that's what it is.
Speaker B:Because in my world I want those extra percentage points in the business as working capital.
Speaker B:We can do something with that to help the business grow.
Speaker B:Is that vehicles?
Speaker B:Is it people?
Speaker B:Is it marketing, budget, Is it paying the business owner more?
Speaker B:You know, these are all possibilities, but these levels of insight around some core compliance kind of ideas, you know, personal tax returns, here we are, you know, recording this at the beginning of December.
Speaker B:Personal tax returns, 31st of January, they're eight, nine weeks away.
Speaker B:You know, there's going to be a, you know, the majority of people are going to be in a position the money isn't set aside in a separate pot, so on and so forth.
Speaker B:Okay, well what can we do?
Speaker B:What can we learn from this process?
Speaker B:Have we asked a client how much they actually want to earn in this next financial year?
Speaker B:Well, if they can give us some kind of inkling and we think that's reasonable.
Speaker B:I mean, I use an online calculator for this, but it's just like all I need is an idea.
Speaker B:I would like to earn this much in the next year.
Speaker B:That may or may not happen.
Speaker B:They may go beyond the business might not be able to afford that ultimately.
Speaker B:But with that idea, I know there's a very simple bit of planning that we can put in place to get that money saved in advance.
Speaker B:If they go beyond the system, profit first and the framework will deal with that extra from a proportionate basis.
Speaker B:If it's not quite enough, we'll adapt as we go through the year.
Speaker B:But I think that there is a lot that we can do with that core data.
Speaker B:And we talk about it in a trigger kind of way because it tends to relate to a date, a moment in time that creates a specific trigger for that conversation.
Speaker B:But you know, that could be month end accounts, you know, any and all of These sorts of things.
Speaker B:Can present as very easy ways to start having a value led conversation with a client.
Speaker B:And that, that is probably, to be honest with you, that is probably a different type of conversation that our members have not been used to having, certainly not to a deep and core level with clients over a period of time.
Speaker B:I think it just helps with that.
Speaker B:With this transition into advisory, what do we actually have available as resources to help us?
Speaker B:We've got some data, we can produce some insights.
Speaker B:Can we now think about that in a future focused way to lead us into a conversation, invite a client into that conversation with us.
Speaker B:So triggers, you know, I think it's a very basic strategy, but highly effective to start those conversations with clients from a slightly different perspective.
Speaker A:Yeah, and I think that's.
Speaker A:So that's the triggers from a proactive aspect of us reaching out to our clients for those reasons.
Speaker A:But I think there's also a trigger in a conversation when you're having conversation with the client, when perhaps, you know, I remember, you know, from my accountancy background, quite often a client would, would ring me up and ask a question about, look, I need to get a new van, I need to replace my van, you know, am I best off getting the lease van, my best off going pcp, you know, should I buy it outright?
Speaker A:Should I get a loan from the bank?
Speaker A:Well, to me, fantastic.
Speaker A:What a great opportunity to introduce profit first into that conversation.
Speaker A:So to me, that's a massive trigger.
Speaker A:It's more of a reactive thing.
Speaker A:So what you're talking about is the proactive way, and that is of course, the profit first way.
Speaker A:And that's the way that we would encourage our members because we want our members to be proactive with our, with their clients and to be bringing up conversations with them, being the one, you know, approaching the client quite often.
Speaker A:But there is that other aspect that, you know, you randomly pick up the phone because your client's calling.
Speaker A:Suddenly there's an opportunity on that phone call because they're asking you for a piece of advice.
Speaker A:And this is where it's really important that people understand what advisory is, you know, and actually answering that question, it is a specific piece of advice that can help them from a tax perspective, depending on their circumstances, where they're at right now.
Speaker A:How can we help answer this question in the right way?
Speaker A:There's also a great opportunity to turn that into, I've got a way of doing this for you.
Speaker A:I've got a much better way of us handling this, you know, this financial decision.
Speaker A:If you want to Have a chat with me properly and we can see what you know.
Speaker A:When do you actually need to replace the van?
Speaker A:When is this date line going to happen?
Speaker A:Because it might be that we can proactively put some money aside way ahead of that date and actually be ready to buy that fan without going down a finance road.
Speaker A:Whereas the finance aspect might be really important because they might need to get it straight away because the engine's blown on the current one.
Speaker A:You know, there's the different ways, it's just an example, but it, it's just taking me back to my days, sat in my accountancy office, the phone ringing and the client.
Speaker A:Quite often I got asked that question.
Speaker A:So it always feels to me that that's a really good opportunity to then develop that conversation into something else and elaborate on how you can help your client from an advisory perspective, but also with Profit first behind you as a Profit First Professional, this is a great opportunity for a more meaningful conversation and where you can guide them and help them specifically to achieve that particular outcome.
Speaker A:You know, and of course all the other conversations you would have the normal conversations, like you said, VAT, VATs, you know, the money's not there straight away Trigger, you can have that conversation with them to solve that problem.
Speaker A:Tax bills come in, haven't put any money away trigger, you know, all these things are just, they're right in front of us and it's just a case of being able to look at the clients and understand.
Speaker A:And I think that again then takes us into so how do we look at our clients?
Speaker A: ur members and we call it the: Speaker A:And we're talking about analyzing our clients.
Speaker A:So who is our top 20%, who's our bottom 20%?
Speaker A:And then by default that means the middle, middle 60% will be sat there and, and a lot of people talk about analyzing clients and it seems to be from outside of Profit First Professionals, a one off kind of thing.
Speaker A:Whereas for us it's an ongoing journey.
Speaker A: nt members recently about the: Speaker A:Is there anything you can share with us from the Monday sessions that would be helpful in this conversation?
Speaker B:Yeah, I think it is part of the general development of the bookkeeping or accounting practice as they start looking to the future.
Speaker B:They've become a Profit First Professional for a reason to move into a different type of work at a higher Value LED level.
Speaker B:And I think part of that process then is it's trying to.
Speaker B:Walk that tightrope, let's say between the need to get clients on board when you start a business.
Speaker B:True of any business, we need some money coming in, we need to get going.
Speaker B:We need some stories to tell about the success that we have with clients.
Speaker B:Absolutely 100%.
Speaker B:But there then comes a point in time where different things come into play.
Speaker B:Is it about capacity?
Speaker B:Is it about the fact that you've actually got a long list of clients and you still don't seem to be able to earn enough money from that list of clients?
Speaker B:It's, it is interesting because I actually think back to one current member and one member who we, who we had at a point in time, current member, very short client list, 4, 500,000 in revenue as an annual thing.
Speaker B:But maybe 40 clients versus someone who we had conversations with who was doing half of that revenue.
Speaker B:But with about, I think there's about 150 to 200 clients.
Speaker B:You know, it was absolute chalk and cheese between these two models.
Speaker B:Funnily enough, lot of clients, not enough revenue became a problem.
Speaker B:Funnily enough, higher revenue, fewer clients, niche based focus and highly respected in this, in this particular area of this niche.
Speaker B:I'm not saying it's comfortable and easy for that member, but far more focused, knows exactly who his ideal client is, knows how people, how to filter people out within that conversation as well.
Speaker B:Just as important.
Speaker B:So I think it is this idea about how, how do we start to transition towards.
Speaker B:A better client base?
Speaker B:I mean, define better any way you like.
Speaker B:But you know that idea that I don't have clients who drain me, I have clients who pay me on time, you know, all of those kind of things.
Speaker B:So I think it is, it's part of an appreciation that we don't all have to be operating at the lowest level all of the time.
Speaker B:There are plenty of people who are capable of dealing with a volume of clients because of the way they operate in a certain way.
Speaker B:I think the idea for people who are looking to get into high level practice advisory work, they tend to work out that some of those clients, the once a year tax return for a couple of hundred pounds, it's a drain, it's inconvenient, it's information gathering, it's getting responses compared to working with clients who respond on time, are efficient, participate in the conversation.
Speaker B:You know, it's like it is a different feeling to deal with clients in that way.
Speaker B:So I think it's really important with the 20, 60, 20.
Speaker B:It's like, realization is the first step.
Speaker B:It's actually taking a cold, hard look at that client list and going, okay, this has got me as far as it has got me.
Speaker B:Will it actually serve me into the future?
Speaker B:Will it actually serve me in this business in the way that I would like it to as I grow my practice from here?
Speaker B:So, I mean, there are two sides to this that we look at.
Speaker B:One is the pure financial how much do people pay me?
Speaker B:That may well qualify them as a top 20 or a bottom 20 client.
Speaker B:But then there's another secondary part which is incredibly important, which is it's around the behavior and the characteristics that come with those clients.
Speaker B:Who are the people who are easy to deal with?
Speaker B:Who are the people who always run down the phone?
Speaker B:Who are the people who always say, it's your fault my VAT return wasn't filed, when they haven't provided the information despite 23 reminders, you know, it's like, there is a balance in this.
Speaker B:So it's not just a pure.
Speaker B:They pay me the most.
Speaker B:They must be a great client.
Speaker B:There are plenty of people who pay a lot of money who are awful clients.
Speaker B:So our ability to start mapping these two things together and start interrogating that list of, of clients helps us start form opinions about, okay, well, the next discovery call I have with a client, are they presenting to the characteristics and the monetary values of a top 20 or a bottom 20, or do they fit somewhere in the middle?
Speaker B:So we start to make some slightly more informed decisions rather than go, oh, good, pound signs, yes, I'll take another client on, which may actually just be causing more problems in the background about draining profit from the business.
Speaker B:They might need extra resource to service a lot more core clients.
Speaker B:So I think it is.
Speaker B:It's a really important part of the process that we go through with members.
Speaker B:But also it is forever ongoing, or it certainly should be.
Speaker B:You know, if we think about it in a very clean way, if you remove the bottom 20% of the clients that you have today, clearly out of the middle 60%, there will be a new bottom 20%.
Speaker B:So what do we do with that bottom 20%?
Speaker B:Well, we just have to keep evolving and just basically keep moving the levels up as we go, which is an ongoing piece of work.
Speaker B:And I think the other important part of it is nobody is encouraged to say, oh, bottom 22nd.
Speaker B:Right, I'm just going to fire those clients now.
Speaker B:That is not how it works.
Speaker B:There are economic realities for people, and it should be a transition.
Speaker B:But an intentional transition rather than a I'm cutting that out now I'm poor now I'm hustling now this doesn't feel good.
Speaker B:This should be an intentional process to move from one level to another level over time and continue to repeat that process.
Speaker A:Absolutely.
Speaker A:You don't want to remove the bread and butter of your business.
Speaker A:You know, if that monthly recurring income's coming in.
Speaker A:It's a strategic way of removing bottom clients and bringing in top clients.
Speaker A:And, and I remember when, when I, when I was implementing profit first in clients businesses and bringing in, you know, starting to attract a better caliber of client as I would call them as I bought in one client on the profit first advisory sort of model, I would remove three bad clients and I would still be more profitable.
Speaker A:So there was a, there was a, you know, a structure.
Speaker A:I had like a structure of how I was going to do it.
Speaker A:Because yeah, there are some people do give some really bad advice around this and they do tell people to remove the bottom 20 just like that.
Speaker A:And then all of a sudden you haven't got the money coming into the business.
Speaker A:There's a reason why you're serving these customers in the first place because the revenue is required.
Speaker A:So it's a strategic way of doing it.
Speaker A:It's a structure to follow.
Speaker A:It's as with everything is with profit first and with profit first Professionals.
Speaker A:It's a step by step process.
Speaker A:It's a bring one in remove three.
Speaker A:Maybe that worked for me.
Speaker A:That ratio might not be right for everybody but it worked for me in my time going back a few years ago.
Speaker A:And so if we're able to do that or a ratio similar to that, it helps us evolve our business.
Speaker A:It helps us bring the better clients in.
Speaker A:It helps us recognize who are the better clients, helps us understand the bottom clients and, and who's on our hit list perhaps to remove because the phone rang and it's so and so and I really don't want to talk to them again.
Speaker A:Every time they ring I feel like this.
Speaker A:Therefore surely that's someone you don't really want to be working with.
Speaker A:So why are you so find a way to bring someone better in.
Speaker A:To remove that person first gives you that way.
Speaker A:Profit first advisory is the way you can bring in high level clients to and remove these unfortunately clients that perhaps you don't really want to serve anymore.
Speaker A:They've served their purpose for you.
Speaker A:It sounds harsh but you know, they have to fit your model.
Speaker A:Now your model needs to be what your model is to serve you to make sure that you can grow your business in the right way, because otherwise you're going to always have these clients that you don't really want to serve dragging you back down, sucking the life out of you, you know, taking your energy away, which then puts you in a bad frame of mind to serve the clients you want to serve.
Speaker A:So it's really important.
Speaker A:I find this a really important aspect of what we do with our members.
Speaker A:It's something we don't talk about enough.
Speaker A:And there was another question that came up across these member calls over this period of time.
Speaker A:One of our members asked about the difference between working with a startup business or an established business when it comes to implementing profit first with them.
Speaker A: on was where do they fit in a: Speaker A:And I think that highlights the emphasis we put on this because it was, hang on a minute, you don't just take on a client just because the client wants to work with you.
Speaker A:You take on the client.
Speaker A:If they fit in the right space within your 20, 60, 20 analysis.
Speaker A:If they're a client that you think is in your bottom 20, why would you work with them?
Speaker A:You know, unless you specifically need that money right now, why would you do that?
Speaker A:Why would you not think actually I can't serve you.
Speaker A:I can serve you with this, this and this, but I can't serve you with that.
Speaker B:I, I think one of the things for me about this Timmy, is it.
Speaker A:Highlights the best to go and find another accountant, bookkeeper to serve you.
Speaker A:It's different.
Speaker A:Is it time to think about.
Speaker A:Carry on.
Speaker B:Sorry, I, I think we just had a bit of lag there.
Speaker B:So one of the things that I think this also, one of the things I think this also brings, brings to bear is how we.
Speaker B:For members who join, who haven't been used to getting focused on the future, the reality is our clients, businesses are happening in the future like October's P L in the nicest possible way means nothing now.
Speaker B:We're a month beyond that.
Speaker B:We're now about what's happening in December, January and so on.
Speaker B:And one of the things that I think you highlight there actually in that startup versus established client, where do they fit?
Speaker B:When we were going through, through the call, one of the, one of the points that, that I made was.
Speaker B:The startup today may be small revenue, pre revenue.
Speaker B:The question is how does that business see themselves in 12 months time?
Speaker B:And does that picture, does it sound authentic?
Speaker B:Do you believe them when they say they're going to get two, six Figures, seven figures, whatever the number might be for whatever the business is, do they give you enough on that discovery call to give you the impression they really mean it?
Speaker B:They are going to be highly intentional about what happens with this business.
Speaker B:So consequently we're moving our radar immediately from thinking, okay, this might not be a lot of revenue for me, it might be very compliance heavy at the moment.
Speaker B:We can always layer in a bit of fundamental profit first principles from the beginning as well of course, to just get people into a rhythm of doing some things like allocations, even at a very basic level.
Speaker B:But understanding that if this client moves forward in the way they're telling us they intend to move forward, they will fit into being a top 20, middle 60 at least and they won't be a bottom 20 client.
Speaker B:So I think that this whole piece about this idea of like their business is happening in the future.
Speaker B:We need to meet them there and actually start to interpret what we think is happening in this business, established or startup, to actually say where do they fall?
Speaker B:20, 60, 20, is this the right kind of client for me?
Speaker B:Are they exhibiting the right characteristics?
Speaker B:Do they have the right potential for me to get into a very value led relationship with them in 6, 12, 18, 24 months time?
Speaker B:And this.
Speaker B:Actually I'm just going to dip back into what you were saying about the vans earlier on that phone call from the client.
Speaker B:I need a new van.
Speaker B:So there is this moment where I think my expectation is a lot of people would go, oh yes, okay, this is the best way to do that and put the phone down.
Speaker B:Rather than actually say okay, so there's this one van and here's the answer to the question you've actually asked.
Speaker B:Do you think you might be getting more vans in the next 12 months?
Speaker B:Should we be having a discussion about where your business is actually if you need another van now, should we be having a bit of an update on where your business is actually moving to?
Speaker B:So I'm thinking about that because we could do some planning around that.
Speaker B:So we might have to scrabble to get the money together for deposit for this van.
Speaker B:But if you're looking for the next van and the next van, the next van, we could put something in place that would mean you always have those deposits ready as and when it's the right time.
Speaker B:And I think again, it's like this idea that we are moving beyond the immediate question and answer.
Speaker B:What's the follow on question?
Speaker B:What's the deeper question that's really being asked here and how can we determine from that Whether or not that guy says, no, I just need to replace my van and that's it.
Speaker B:I still want to sit below the VAT threshold and, you know, I'm quite happy there.
Speaker B:Or is this someone who's going to answer the question by saying, well, as I see it, this is the first van, and I think that we're going to look to add a van every six months, okay.
Speaker B:Different conversation, effort.
Speaker B: eas together into things like: Speaker B:And let's face it, you know, accountants, bookkeepers, we're running commercial businesses.
Speaker B:We should want a better answer.
Speaker B:We should want a practice to run that delivers a return for us as the owner.
Speaker B:And the ways that we think about doing that and the strategies we use and some of the techniques and so on that come with that.
Speaker B: t like to pick up on with the: Speaker B:But understanding that we are building a pipeline of better clients.
Speaker B:And to use your example, you know, one better advisory client meant you could release three and be no worse off.
Speaker B:At the very least, probably better off over time.
Speaker B:So if we can get into a process where we understand that we are building that pipeline of more ideal clients, we get used to the idea it's safe to release these ones.
Speaker B:Yes, I can release another one because we are following a very intentional path with that.
Speaker B:Now, two members I'd just like to highlight quickly.
Speaker B:One of them came to, literally the call this week and asked her for an update because she's been very active in the WhatsApp group, talking about some of these processes and what she's trying to accomplish.
Speaker B:And she came back and she said, yes, I started with four clients who haven't paid me, haven't paid me when they should have paid me.
Speaker B:I've sent four emails out.
Speaker B:I've kind of laid the land, it's out in front of them.
Speaker B:One of them has now paid in full.
Speaker B:One of them sent a partial payment.
Speaker B:One of them has acknowledged the email, and the fourth one hasn't responded yet, but an immediate response.
Speaker B:And I think one of the things that comes out of this is.
Speaker B:It'S taking people from that initial practice that they arrive with and moving them towards the dream of the practice that they want and understanding there are a series of events that happen to make that.
Speaker B:So the support that comes out on the back of that we have another member who the week before was talking about.
Speaker B:She needed to have an awkward conversation because the original discussion with a new client had been on one premise and it had become quite clear in the first month of working for them the workload was entirely different to what was anticipated.
Speaker B:Awkward conversation.
Speaker B:We talked around this a little bit on the call and then again in the WhatsApp group she was saying, okay, well here we are, here's where I've got to with it.
Speaker B:Here's the email I've sent, here's the response that's come back, how do you think I should respond next?
Speaker B:And I feel like this about it and so on.
Speaker B:But the support that she got, I can't go and find replacement income for her directly.
Speaker B:But as a guide on that call, when she turns up, I want to help her find the conversational points that will find the client that replaces that.
Speaker B:Lots of different ways people provide support, be that emotional support, be that technical tactical support, be it dialing in on specific one to one call that I have outstanding to do with that member specifically around this piece.
Speaker B:So I think that there are a lot of these things that come together.
Speaker B:It is not easy to release clients by choice.
Speaker B:People leave us, fine, that happens.
Speaker B:But for us to make that decision is quite often quite a difficult decision to make.
Speaker B:But understanding we are with peers who are going through exactly the same ideas, the same principles and we can provide support for each other.
Speaker B:I think members get an immense amount out of that.
Speaker B:You know, the next phases for clients who aren't paying.
Speaker B:She's now gone to the people who do her payroll who are the problem clients, who never gets their information to you on time, right, they're on a mini list.
Speaker B:But I think this idea of these mini lists and sort of looking at different aspects of her practice now very much gets her to a point where she's now asked the staff who are the problem clients?
Speaker B:Who don't you like dealing with?
Speaker B:Who never gives the information when you need it, who always makes out it's your fault something hasn't been done.
Speaker B:So they now have an internal process where her staff feel that they can talk to her about the problem clients and things that aren't getting done in an open way.
Speaker B:You know, rather than thinking, oh God, you know, phone's ringing, it's that client again, I'm going to get it in the air again.
Speaker B:No, there is a process now in place where they discuss that openly, internally.
Speaker B:Practice owner makes the decision, will they be a client for the longer term or not.
Speaker B:Is there a conversation where I need to step in more actively than maybe I have done?
Speaker B:And I think there are a lot of things that happen as people go through certification with us where we start to lift the lid on the business that they have and show them there is a pathway to solve many of these problems which have probably been around, which have kind of maybe been ignored a little bit in the background.
Speaker B:You know, I'll deal with that tomorrow.
Speaker B:Now.
Speaker B:It's okay, It'll be fine.
Speaker B:No, actually, you're not paying yourself properly in your practice.
Speaker B:Your OPEX is running away with itself.
Speaker B:That's not fine.
Speaker B:You know, we need to, we need to deal with these things.
Speaker B:And that's just the same with, you know, dealing with clients.
Speaker B:Clients as well.
Speaker B:So I think there's, there's a lot of these things that come together.
Speaker B:But again, that small piece by piece approach, the incremental idea, 1% doesn't sound like much, but across three accounts for my client, those buffers grew over a period of time to a very, very useful level.
Speaker B: through and approaching that: Speaker A:I think you've just encapsulated so much about the support that our members receive being a Profit first professional.
Speaker A:And also hopefully we've highlighted as well to the audience that when you become a Profit first professional, of course, first and foremost and core to everything we do is Profit first because we live and breathe by that mantra and by the strategies and methodologies.
Speaker A:But there is so much more, there is so much more that we do with our members because it's really important to us that our members, businesses there themselves are successful so that they can then help become successful.
Speaker A:We talk quite a lot about what our members do with our clients, but first and foremost is our members.
Speaker A:Our members are our priority before their clients, it's their clients after.
Speaker A:So.
Speaker A:So yeah, it's great to be able to share that with everybody.
Speaker A:The only way you can be in this world and get this level of support with the Profit first specials is to become a Profit first professional, go through the certification program, join the cause, turn up on a Monday regularly throughout these sessions and you know, become a really important part of this community and, and gain this support, give some Support where you can, but no one's, there's no expectations on people to give support.
Speaker A:The expectations are to receive support and be able to grow as a person and as your business, you know, and to be able to become more profitable, be able to become more successful, be able to, you know, stand up proud and be a Profit first professional and share that with your clients.
Speaker A:So if this is something that you are thinking you're interested in, if you head to the website, profit first uk.co.uk have a look around.
Speaker A:But if you click on the wait list, fill out your it's an expression of interest form that comes into the inbox, I'll reach out to you and we can jump on a call at a convenient time for you.
Speaker A:You'll get the opportunity to put that call in.
Speaker A:So it's what suits you best and it just be a conversation about getting to know each other, where you're at with your business.
Speaker A:Are you a good fit for Profit First Professionals right now?
Speaker A:Are you not?
Speaker A:And if that's not the case, the next best place to be is in the Profit first pathway.
Speaker A:Because what we do in the Profit first pathway is we share these little snippets, mini videos, mini recordings of me and Jason and sometimes Deb talking and about the course on a Monday, where we share the diary of a PFP in a little bit more detail.
Speaker A:So the members get everything, the Profit first pathway gets some deeper knowledge and some deeper information about what's happened on that particular day.
Speaker A:And then this podcast is to give you an overview of what goes on within our environment.
Speaker A:So the best place to start, if you're not ready to be a Profit first professional, but you're interested in Profit first, is to join the Facebook group, the Profit First Pathway.
Speaker A:Pop onto Facebook, type in the Profit first pathway, you'll see a green and blue graphic with myself, Jason and Deb spaces on and you just answer three simple questions.
Speaker A:Agreed.
Speaker A:And you'll be accepted in.
Speaker A:So come and join us.
Speaker A:Come and have a look and see what's going on in our world.
Speaker A:Maybe it can become something integral to your world in the future too.
Speaker A:But yeah, it's, it's, as always, Jason, it's an absolute pleasure chatting with you.
Speaker A:We do this regularly on a Monday.
Speaker A:We do this now as well on through this podcast.
Speaker A:Thank you so much for joining me.
Speaker A:If you've got anything you want to just kind of finish with for this podcast.
Speaker B:Yeah, I love Monday mornings.
Speaker B:I think the variety that we actually go through with members, for those going through certification to those who are are post certified, some newer, newer certified than others.
Speaker B:And that will be part of our structuring going into the New year as well, perhaps.
Speaker B:And then the things that come out within the community calls as well.
Speaker B:Monday mornings for me are an absolute joy.
Speaker B:So definitely none of that, oh, it's Monday, it's time to go to work kind of dread feeling.
Speaker B:It's like, no, I really look forward to a Monday morning.
Speaker B:And it would, it would be great, I think, the member stories that come out of that.
Speaker B: eir practice moved forward in: Speaker B: And at any point in: Speaker B:It is a different way of thinking.
Speaker B:It is engaging the community.
Speaker B: efinitely come on a bundle in: Speaker B:So, yeah, I look forward to seeing more people on a Monday morning.
Speaker A:Absolutely.
Speaker A:So there you have it.
Speaker A:Mondays are the best working day of the week.
Speaker A:Because we never.
Speaker A:Dread Mondays.
Speaker A:Because once again, and.
Speaker A:Thank you for joining us on our podcast today, Profit first beyond the book was brought to you by the Profit First Professionals UK and Ireland team.
Speaker A:If you'd like to find out more about Profit first or becoming a Profit First Professional, head to our website, profit first uk.co.uk.
