Navigating Profit First: A Journey from Compliance to Advisory
This podcast episode delves into the transformative impact of the Profit First methodology on business operations and financial management. We engage in a profound discussion with Kerry Postel, a seasoned Profit First Professional and Guide to UK & Ireland Profit First Professionals, who shares her journey from traditional bookkeeping to embracing advisory services through the structured approach of Profit First.
Kerry elucidates the significance of adapting the Profit First principles to individual business needs, emphasizing the necessity of establishing a systematic allocation of funds to ensure financial clarity and sustainability.
Furthermore, we explore the importance of community support in fostering confidence among professionals transitioning into advisory roles, underscoring that the path to financial success is a collaborative endeavor.
Join us as we uncover the nuances of leveraging Profit First strategies to enhance client relationships and drive business growth.
The discussion unfolds with an introduction to the podcast, which seeks to delve deeper into the principles of Profit First, facilitated by the insights of Tim Seymour and guest Kerry Postel.
Kerry, the owner of Abacus Business Solutions, recounts her journey from the United Kingdom to Florida and back, emphasizing her transition into the Profit First Professionals network. She articulates the transformative impact of the Profit First methodology on her approach to business, highlighting the importance of viewing profit as an essential component rather than an afterthought.
Kerry's narrative elegantly illustrates her initial reservations about advisory services and her eventual embrace of them through the structured framework that Profit First provides. The conversation further explores the nuances of client engagement, as Kerry shares her strategies for integrating the Profit First principles into her advisory offerings, thereby enhancing her clients' financial acumen and business sustainability.
Takeaways:
- The Profit First methodology extends beyond the book, offering practitioners valuable insights and practical frameworks to enhance their advisory services.
- Kerry Postel's journey from a compliance-based practice to embracing advisory showcases the transformative potential of integrating Profit First strategies into accounting.
- Clients have expressed significant appreciation for the Profit First system, noting its impact on their financial clarity and the ability to afford essential business expenditures.
- The importance of establishing consistent financial habits is emphasized, as regular allocations and accountability foster better money management for business owners.
Links referenced in this episode:
Companies mentioned in this episode:
- Abacus Business Solutions
- Profit First Professionals UK and Ireland
- Mike Michalowicz
Transcript
Foreign.
Speaker B: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 B:Hello and welcome to another episode of Profit first beyond the Book.
Speaker B:And with me today I have one of our Profit first guides, a long standing Profit first professional, Kerry Postel.
Speaker B:So, Kerry, please introduce yourself to everybody.
Speaker A:Hey, Tim.
Speaker A:Well, thanks for having me.
Speaker A:So, yeah, my name is Carrie and I own Abacus Business Solutions.
Speaker A: in business since January of: Speaker A:My business is located in Florida because that's where I lived for 19 years and I've been back in the UK now for two years running the business remotely and now part of the Profit First UK team as well.
Speaker B:Amazing.
Speaker B:Thanks, Karen.
Speaker B:It's great and thank you for joining me today.
Speaker B:It's great to be able to have these conversations about Profit first and, and to help people understand there's so much more to Profit first than what you can just get from the book.
Speaker B:Not that the book isn't a great tool obviously to stay.
Speaker B:Start you off, but there's so much further we can take people we feel.
Speaker B:And so, so Kerry, so you are, you are British.
Speaker B:Just to clarify that you were born in, born in Britain?
Speaker A:Yeah, yeah.
Speaker B:And then you moved out to Florida.
Speaker B:And can, can you tell me, because I love this bit, can you tell me how you came to join Profit First Professionals?
Speaker A:Absolutely.
Speaker A: d I think it was in September: Speaker A:I can picture myself now sitting in my office.
Speaker A:He introduced himself.
Speaker A:I can't even tell you now if I knew about the book before or not.
Speaker A:It was just one of those things.
Speaker A:Had this great conversation, told me about this book, told me about the concept of it and that they were having a conference up in New Jersey, I think like two or three weeks later.
Speaker A:And he'd got my information because of my connection with Billy Ann.
Speaker A:She had already joined Profit First Professionals and she and I were connected on LinkedIn.
Speaker A:And so I think that's how he'd reached out to me.
Speaker A:And so, yeah, so two or three weeks later, I'm on a plane up to New Jersey.
Speaker A:I think it was my very first, you know, like business conference since I'd started my business.
Speaker A:And yeah, there's me flying up solo, finding a hotel, sharing a room with someone I'd never Met before meeting a group of people I've never heard of, never seen on a zoom call or anything, and just have never looked back.
Speaker B:I love.
Speaker B:I love that story.
Speaker B:Imagine picking up the phone, Mike's ringing, you come and join proper professionals.
Speaker B:Who are you?
Speaker B:I wrote the book.
Speaker B:I love it.
Speaker B:So.
Speaker B:So tell me, Kerry, thanks for sharing that.
Speaker B:I love it when you tell us that part.
Speaker B:I don't know anyone else who, who is a member that.
Speaker B:That happened with, by the way.
Speaker B:I'm sure there may be some in America, but I don't know anyone.
Speaker B:So you're the only person I know that that's happened with, which is a massive compliment to you, obviously.
Speaker B:So tell us.
Speaker B:Tell us about your business.
Speaker B:Obviously, your business in Florida, like you've said, and you built it up over there.
Speaker B:Tell us about your business up to the point of Mike making that phone call to you.
Speaker A:Yes, by that time, I'd had my business a couple of years and I was doing just compliance work, you know, cleanups, just all the regular, you know, bookkeeping stuff.
Speaker A:And it kept, you know, I guess at that point I probably started here about you're doing advisory.
Speaker A:But it was like, I don't know what that looks like.
Speaker A:And, you know, as accountants and bookkeepers are really good at overthinking and overcomplicating and making it so much more than it is.
Speaker A:And so when I heard about profit first and then I went up for the conference and learned so much and just realized, like, okay, like, this advisory is nothing that I can't do.
Speaker A:It's not like I'm having to go learn a whole new skill set.
Speaker A:You know, we.
Speaker A:We have all this knowledge and experience that we bring with us that I guess it's really easy to think that we just think that what we know, everybody knows.
Speaker A:And we do all our debits and credits and all our bookkeeping stuff and all our reconciliations, and we just think, you know, we can all do it standing on our head in our sleep.
Speaker A:But it's something that to other people, it's like a foreign language.
Speaker A:I was just talking to a friend last week about expenses and profit, loss and balance sheet, and she's just got that glazed look on her face and she's like, I don't understand any of this.
Speaker A:And so it's just that reminder that, okay, we have all the knowledge and the experience.
Speaker A:So when you start thinking about advisory, it's.
Speaker A:For me, at that time was totally overwhelming.
Speaker A:But then profit first just kind of came that.
Speaker A:That pathway into advisory, because I didn't know what it looked like.
Speaker A:And so now I was given this structure and this tool that I was able to use and I didn't implement it in my business as much as I wish that I had.
Speaker A:You're looking back now, again, hindsight's a wonderful thing.
Speaker A:I wish now that I just jumped in with both feet, but I was still just a solopreneur in my business.
Speaker A:And at that time you're still figuring out how to juggle everything.
Speaker A:You know, I think at that time I had a two year old son.
Speaker A:So there was a lot of things that you're trying to sort of figure out and.
Speaker A:But yeah, in hindsight I wish I jumped in more into profit first and really embrace that in a bigger way in my business.
Speaker A:Now I am.
Speaker A:But again, it's just kind of, it's just one of those things where you have to just take.
Speaker A:Was it take the bull by the horns and just run with it.
Speaker A:This is kind of a really great pathway into getting into advisory with the confidence and the knowledge that you need to really succeed in that area of your business.
Speaker B:Yeah, we love that.
Speaker B:Thanks, Carrie.
Speaker B:And you offer bookkeeping to clients along with profit first strategies.
Speaker B:Is that how it works?
Speaker B:And how many clients have you got currently?
Speaker A:So we're over 50 clients.
Speaker A:I don't know what the number is right now.
Speaker A:I think we might even be closer to 60 after this month.
Speaker A:We've had a really great April, bringing on four, potentially six new clients this month, all who are doing your profit first.
Speaker A:I think in the past it was almost like it's got a confidence aspect of not having that confidence to really include it in everything.
Speaker A:And I'm realizing not everybody's heard of profit first.
Speaker A:We talk about, about it because it's just part of our regular day to day vocabulary.
Speaker A:But not everybody's heard of the book and so sometimes it would put people off.
Speaker A:And so again, I've learned as going through the years, like, okay, don't talk about profit first if they haven't brought it up or talk about it in a different way.
Speaker A:It's a cash flow management tool.
Speaker A:I look at it as a tool in my toolbox.
Speaker A:And you can't just talk about profit first without talking about all the other areas of your business because you're talking about revenue and expenses and you know, cash flow and everything.
Speaker A:It's, you know, it encompasses all aspects.
Speaker A:So now rather than just offering, oh, let me do profit first with you, you know, it's just part of my whole cash flow management My whole advisory package as to this is part of, you know, what we do.
Speaker A:But it's something that if people have heard of profit first, that they love it when they're like, yeah, I'm a certified profit first professional, that, that then gives you a whole nother level of expertise in their eyes.
Speaker A:And sometimes, and again, it depends on the call, sometimes I will say, what.
Speaker A:Have you heard of the book Profit First?
Speaker A:Because if I feel like they've, that's the kind of thing they're looking for, but they don't have a name for it, then it makes them feel great when that, yes, that's what I'm looking for.
Speaker A:And other times I would just talk about what it does without bringing up profit first.
Speaker A:And then that's something then that I will sort of talk more about, you know, after they've become a client and then guide them in that way.
Speaker B:I love that because it, it kind of takes away the pressure that we put on ourselves to sell, doesn't it?
Speaker B:Because we do that, accountants, bookkeepers, we're not great at selling or what we deem to be selling, when actually with profit first, it's just a solution to so many problems.
Speaker B:And if you ask your, your prospects what the, what the problems they are, they're, they're, they're facing at the moment, quite often or not, Profit first in one way or another will provide the solution.
Speaker B:But we don't necessarily have to talk about it being profit first.
Speaker B:We can just talk about how we can improve things and change things and where we would perhaps focus on initially when we first start working with the client.
Speaker A:Yeah, but it's what I love about Profit first is that, yes, okay, you're not necessarily using the verbiage, you're not necessarily selling the profit first.
Speaker A:You know, I always like to think of the way, how am I serving my clients?
Speaker A:And then you end up selling through serving, because how are you helping them to, you know, take their business to the next level?
Speaker A:For me, with, you know, having being part of Profit First Professionals, it's all of the support that you get that is what makes the difference.
Speaker A:So, you know, even though, you know, anyone can go by the book, it's, it's so different when you're part of this.
Speaker A:And that's what really helped me have the confidence to then go and start really implementing it on a whole nother level in the last, probably that's five years is when, you know, I've really jumped in with both feet.
Speaker A:But that's because, you know, I joined the Mastery Program in the, in the States for your short time.
Speaker A:And now you're being a part of Profit first over here.
Speaker A:It's having that support and being able to ask someone questions and guidance is what makes a big difference.
Speaker A:You don't feel like you're on your own in the advisory world.
Speaker A:And I think that's how a lot of people potentially feel, because what does an advisory package look like?
Speaker A:But it's just something that is there to help and serve.
Speaker A:And that's always my focus.
Speaker A:How can I serve my clients?
Speaker A:You know, to the best of your ability.
Speaker A:And Profit first is definitely part of that.
Speaker B:Yeah, for sure.
Speaker B:And, and it's, it's interesting that you mentioned Mastery because that's actually how we met, wasn't it?
Speaker B:We were putting the fortress together.
Speaker B:So explain.
Speaker B:Do you mind explaining a little bit about what Mastery is?
Speaker B:Because obviously this is, this is something that's unique at the moment to the U.S.
Speaker B:prof.
Speaker B:Members membership.
Speaker B:But you and me both joined Mastery.
Speaker B:Can you just share a little bit about what that involves?
Speaker A:Yeah, so it's, I guess it's a step up or a tear up from the core membership and that's where you get a little bit more access to Mike.
Speaker A:You get a different group of guides as well that just work with the Mastery members and it's there to really sort of, I guess, help you to accelerate and grow your business.
Speaker A:You get two meetups throughout the year as well, which are just Mastery members.
Speaker A:You get additional calls throughout the month.
Speaker A:And so it's just kind of more of that hands on support at a higher level, you know, when you're in that Mastery program.
Speaker B:Yeah, it's really beneficial, I found actually for the period that I was in there.
Speaker B:And then when I, when myself, Duncan took over the license.
Speaker B:I know Duncan carried on within Mastery and I kind of dropped out so I could focus on more on this aspect of the business.
Speaker B:But it was great because we got to, I got to know you quite well from being on those calls and we had lots of conversations and then of course.
Speaker B:So you're in such a unique position.
Speaker B:Kerry, I don't know if you realize this, but from where I'm sitting, you are.
Speaker B:Because Mike rang you.
Speaker B:You joined Profit First Professionals.
Speaker B:By your own admission, it took you a little while to get going properly with Profit first, but you got there, you know, and in the last five years, you've made massive strides through using Profit first to help your clients and obviously to help you in your business as well.
Speaker B:You joined Mastery for a period of time.
Speaker B:As well.
Speaker B:And I know not everybody stays in mastery forever.
Speaker B:It's kind of like, go in, let's join, see how it goes, and then come back out when you've, when you've learned what you need to learn.
Speaker B:And then you've moved back to the uk, I think you said, two years ago now.
Speaker B:And since moving back you've been an active member of our group as well.
Speaker B:So you, you joined our community when you came back to the UK and you were talking to our other members and stuff, adding your, your support to our community calls.
Speaker B:And then of course, we've then invited you to, to become one of our Profit first guides as well.
Speaker B:Just recently, probably about five months ago, I would say.
Speaker B:And so now you're actually helping our members actively on our weekly calls with them.
Speaker B:So you've kind of had some real experience throughout the US and now UK as well with how Profit first works.
Speaker B:So do you feel that that gives you a bit of an added sort of edge on other people as well?
Speaker A:I think it's, it's all the experience of just building it up over the years and not being able, not being afraid to try new things.
Speaker A:And it's one of those things where you never stop learning.
Speaker A:Even now, you know, on our calls that we do, you know, with the Profit first community in the uk, I'm always learning stuff still and that's the great thing.
Speaker A:The book is the book and it's brilliant and it's the reason that we're here that we've all got these connections.
Speaker A:But it's not something that is set in stone.
Speaker A:It's there that we can change it and adapt it to suit our clients, depending on where they are within their business, which I love.
Speaker A:Mike has given us the foundation that we need and then we can springboard it off then with everybody's knowledge and experience, with all the different ideas that come up.
Speaker A:Jason taught me something in the first month of me joining as a guide and I was like, oh my gosh, that's brilliant.
Speaker A:Like, I never thought about doing that.
Speaker A:So now I've implemented that into my own business and it's just, it's kind of, it's nice to hear different things.
Speaker A:I realize now how different things are in the UK to the US on the whole, tax wise.
Speaker A:And payroll, payroll drives me crazy over here in the uk.
Speaker A:It's a whole lot easier in the us but it's, you know, that's why all my clients are still going to be US based.
Speaker A:But it's nice getting different ideas.
Speaker A:You know from different sides of the pond and just being able to, I guess, give back as a guide.
Speaker A:I think that's what I really enjoy doing.
Speaker A:Having been part of Profit first for so long.
Speaker A:I did take about a year break, a couple of years break in the middle, but it was always something I knew I wanted to come back to because I knew the value of it.
Speaker A:And so, and it's just the community as well.
Speaker A:I think it's a very lonely place being an entrepreneur sometimes.
Speaker A:And so being able to be part of the community where you've got people to bounce ideas off of, you don't have to worry about anybody judging you.
Speaker A:It's just kind of like, hey, I'm stuck on this.
Speaker A:Or like hey, I need to create a package.
Speaker A:How do I do this?
Speaker A:And I think that's what is one of the biggest things from the Profit first community on both sides of the pond, as to how that's really helped.
Speaker A:But yeah, I love just being able to give back and just seeing other people's ideas and just being able to learn from one another.
Speaker A:I think that's the key there.
Speaker B:I, I totally agree.
Speaker B:I mean, you know, we never know everything, do we?
Speaker B:I think being being on these calls with our members and especially now we've got cohorts, so we have groups of members on, on the calls.
Speaker B:The ideas that they come up with as well, you know, from looking at things from a completely fresh perspective because it's all new to them.
Speaker B:They come up with some great ideas, don't they, that perhaps we've either heard of, we've thought of, we've tried, or we have never even thought of.
Speaker B:And I love that, you know, some of our members on our community calls have come out with some amazing ideas that you just wouldn't get from the book.
Speaker B:And it's because they're actively working with clients.
Speaker B:They're actively thinking about how they can use extra ideas around Profit first to improve their client's business and their clients profitability, you know, and the feedback from the clients is amazing.
Speaker B:So on that sort of topic, how, how have your clients grown, you know, with you and what, what sort of things do they say to you about how Profit first works with them and their business?
Speaker A:They, it's the ones that knew about it already.
Speaker A:Like so I have some clients that I, I received through Profit first in the US and so they're the ones already looking for that and, and they still embrace it.
Speaker A:I've got one client in particular, she's a landscaper and she'll Often, you know, look at her balance sheet and she'll be like, kerry, I've never had so much money in my business.
Speaker A:Like.
Speaker A:And she's like, if we didn't do profit first, then, you know, I would have spent all of this.
Speaker A:She was, I'd have bought stuff that I didn't need.
Speaker A:And it's so.
Speaker A:And she's great because she'll be, hey, I opened up another bank account.
Speaker A:I'm like, great, what are we doing now with this one?
Speaker A:And so she sees the importance of it, she sees the relevance.
Speaker A:She sees how it really makes a difference in her business and her cash flow management.
Speaker A:And that she was able to buy some landscape tools that I guess a friend of hers had won $20,000 worth of tools or something, and he kind of took what he wanted and then he sold her the rest for a good price.
Speaker A:And she said if it wasn't for profit first, she would ended up either having to put it on her credit card and then paying interest on it and paying it off over time, not being able to buy them at all and just be like, okay, thanks, but can't afford it.
Speaker A:But she was in that position where she's like, kerry, I had money in my profit first accounts where I was able to then use that money, pay him.
Speaker A:Done.
Speaker A:Now she's got these tools for a great price and she puts that down to profit first.
Speaker A:She's like, without it, I wouldn't do that.
Speaker A:And just other clients as well love the profit first distributions every quarter.
Speaker A:They love that they're saving for taxes.
Speaker A:They love that they're putting money aside to pay themselves.
Speaker A:And those are the three key ones right there.
Speaker A:And I love then talking to my clients after the end of the, you know, each quarter is like, so what did you spend your profit bonus on?
Speaker A:And, and hearing those stories.
Speaker A:And then sometimes you get that, oh, I didn't take it.
Speaker A:Like, why not?
Speaker A:Well, I kind of wanted to leave the money in the business.
Speaker A:And so then we talk through that and it's like, what's going on here with this whole thought process?
Speaker A:Because there's a reason behind everything.
Speaker A:But yeah, it's.
Speaker A:They've all seen a benefit.
Speaker A:I haven't had anybody that's come to me and be like, I don't want to do this anymore.
Speaker A:It's not working.
Speaker A:Because, you know, and if it, if for sometimes if for some reason someone's struggling, then it's because they're not implementing it correctly.
Speaker A:So that's when we're like, okay, what's Going on.
Speaker A:Let's talk it through.
Speaker A:What are you doing?
Speaker A:What are you not doing?
Speaker A:I've just picked up a new client who's already using Profit first because he's met Mike at events in the past, but he's been doing it just based on I move several thousand here, maybe a few thousand here.
Speaker A:Oh, need that back.
Speaker A:Pull it back again.
Speaker A:And so there's no structure.
Speaker A:So once we get his books clean and up to date, then we're going to start looking at those profit accounts, the different bank accounts, and figure out, okay, what should your percentages be?
Speaker A:Let's run another assessment, let's see what's going on.
Speaker A:And let's work based on percentages, not on, oh, I think I've got some extra money in this account.
Speaker A:Let me put it over here.
Speaker A:And I think that's where the misunderstanding comes in.
Speaker A:Profit first, that you're just moving money back and forth for the sake of it.
Speaker A:And it's just like, no, there's a reason to it.
Speaker A:Let's figure out what that is.
Speaker A:And so that you're not moving money back into the OPEX account so you can pay the bills.
Speaker A:It's like, why can't you pay the bills out of that?
Speaker A:So, so yeah, everybody loves it.
Speaker A:They just haven't figured out how to implement it properly in their business as they've tried to do it by themselves.
Speaker A:And that's why I love them coming in when they already know profit first.
Speaker A:They're already excited about it, totally stuck.
Speaker A:And then we can like, you know, shed some light on it and then help them move forward.
Speaker B:Yeah, we, we get a lot of people come to us asking us to introduce them to a PFP because they have tried to implement profit first themselves and it's not quite worked.
Speaker B:And quite often it's because of the very things you've just spoke about.
Speaker B:But also it's because they read the book, they see what the target allocation percentages are and so they assume that that's what they have to transfer into the different parts, you know, so that, so depending on the size of business, they put 5% profit, they put 50% to owners pay 15% tax and 30% operating expenses.
Speaker B:And then they think they can't run their business on that 30 going into the operating expenses because they're way off that right now in reality.
Speaker B:And so then they start transferring back out of the profit back out of.
Speaker B:Owners pay and they've not solved the problem because they still can't pay themselves at the end of the month, unfortun and the reason why we working with a profit first professional is so beneficial is because of the initial starting point of the profit assessment, isn't it?
Speaker B:You know what, what does that, I'm going to let you explain rather than me, what, what does that tell us?
Speaker B:What does a profit assessment tell us about a business right now?
Speaker A:It helps us to understand where are they at right now?
Speaker A:Like you know, what's, what's really going on and you know, the majority of the time, and I'd probably say 99% of the profit assessments that I've done, nobody's putting money to profit account, nobody's putting money to tax account.
Speaker A:They're paying themselves as and when they can and that fluctuates up and down throughout the year.
Speaker A:And but it gives us that starting point.
Speaker A:And with everything, when you've got a goal and a target that you're aiming towards, you have to know, okay, what line are we at right now?
Speaker A:Okay, right now we know where you're at, we know where we want to get you to.
Speaker A:What does that journey look like?
Speaker A:And that's what I love about the profit assessment.
Speaker A:We then create that rollout plan like, okay, and I always say to people as well, I'm not going to ask you to put 10% in your profit account right off the bat because you're going to laugh at me and tell me, kerry, there's no way I can do that.
Speaker A:So I always make a little bit of a joke about it as well because I'm like, look, we're not going in.
Speaker A:You're diving in headfirst into this.
Speaker A:Yes, we all want to get to those target allocations, but it's not going to happen overnight.
Speaker A:Now I've had maybe one business that we were able to do that, but she was a service based business, it was just her, so it was a lot easier to do.
Speaker A:But everybody else, we've done it as a journey and we've created that normally an 18 month rollout plan and given them step by step guidance.
Speaker A:But the profit assessment is that first step.
Speaker A:The next step is the accountability of like, okay, are you doing that?
Speaker A:And people are like, what's the point of doing 1%?
Speaker A:And I'm like, well if it doesn't feel like a big deal, then it won't be a big deal.
Speaker A:So let's just do it anyway and then we can move up a little bit higher.
Speaker A:And it's just those baby steps of getting people there.
Speaker A:And I've got some people that are still on 1% in their profit account just because of other things they have going on in their business, but they're still doing it.
Speaker A:It's a habit that they just do.
Speaker A:And it's just something that as business picks up because they've only been in business a couple of years.
Speaker A:I've got a lot of debt which they needed to take on in order to start the business.
Speaker A:But it's like we're just kind of, you know, walking them through.
Speaker A:And I'm like, it's a habit.
Speaker A:Like, don't beat yourself up.
Speaker A:They were putting money aside for taxes.
Speaker A:And, you know, she was like.
Speaker A:Because I said.
Speaker A:When she had a text message, so how did it go?
Speaker A:And she's like, we owed fifteen hundred dollars.
Speaker A:I was like, okay, how much did you have in your tax account?
Speaker A:She's like, fifteen hundred dollars.
Speaker A:I'm like, awesome.
Speaker A:She's like, I know.
Speaker A:She's like, it was there and she was so happy.
Speaker A:Like, she had a tax bill, but it didn't bother her because she had the money set aside.
Speaker A:And that's the key.
Speaker A:And I love it when, you know, people come to me and say that, like, you know, because I get excited when people have a tax bill bill, because people.
Speaker A:And great, you made some money.
Speaker A:You made a profit.
Speaker A:And, you know, and it's like, great.
Speaker A:Did you have enough money to cover it?
Speaker A:Yes.
Speaker A:Awesome.
Speaker A:Then that's the win.
Speaker A:And that motivates them to keep wanting to do that year after year because they see it works and then they're excited, like, okay, let's.
Speaker A:Let's increase that.
Speaker A:You know, what do I need to do to reduce my expenses?
Speaker A:And we go through it and help them.
Speaker A:So it's.
Speaker A:The accountability is the key.
Speaker A:Because it's really easy to be like, yeah, I'm not going to do that transfer this week.
Speaker A:Like, I'm just going to keep this money here.
Speaker A:Whereas if you've got somebody helping you and guiding you, they're going to say like, hey, come on, let's do this.
Speaker B:Absolutely.
Speaker B:And.
Speaker B:And so.
Speaker B:So talking about making the allocations, which you've started to.
Speaker B:To talk about there, and holding people accountable to it, in the book, Mike suggests we should do these allocations on the 10th and 25th of each month.
Speaker B:So does that work for you in.
Speaker A:The U.S.
Speaker A:no, it's.
Speaker A:I totally understand the reasoning behind it, and I think maybe at a time when we were all still printing checks and mailing out checks and stuffing them envelopes, that that worked really well.
Speaker A:I think now we're at a point where we have ach and we've got all these online payment options and portal payments and stuff that it's just a different ballgame now.
Speaker A:The book's over 10 years old.
Speaker A:A lot has changed in technology and payments.
Speaker A:You only have to look at all the apps that are out there now where you can make those payments.
Speaker A:So the 10th and the 25th didn't work for me because then sometimes it was a Saturday and then it's okay.
Speaker A:Do I do a Friday?
Speaker A:No, I'll wait till the Monday and then people will forget.
Speaker A:So for me, you know, I think all of my clients, Monday morning, that's what we're doing on a Monday morning.
Speaker A:Looking back at the previous week.
Speaker A:Okay, what happened Monday through Friday, you know, and having that income account is critical.
Speaker A:That's one thing I did not do in the beginning.
Speaker A:I didn't do my income account.
Speaker A:I just kept in my OPEX because I was disciplined enough to do it.
Speaker A:Now I have the income account, and now I really see the value of that again.
Speaker A:Hindsight's a wonderful thing.
Speaker A:And so now just having that income account that now if you can wait till that Monday, then do your allocation percentages from the previous week.
Speaker A:I do have one client.
Speaker A:Money is a little bit tight, so sometimes she's doing it daily and I'm like, that's fine.
Speaker A:But if by having that income account, it makes it easier to track exactly what that should be.
Speaker A:And again, we.
Speaker A:We just change those around as and when needed.
Speaker A:Right now, I've just changed mine again, where I make sure all of my payroll for my team is done in my first allocation of the month.
Speaker A:When the majority of our revenue comes in.
Speaker A:I then do have weekly revenue coming in, but that now just goes to profit taxes owners pay and opex and isn't going to my payroll account because I fund that right at the very beginning.
Speaker A:Again, I've changed the system so that it works for me.
Speaker A:And that's just kind of the.
Speaker A:What was the easiest thing for my setup and how I wanted things to run.
Speaker A:So I'm not worrying about enough money being in that payroll account.
Speaker A:It's there by the 2nd of the month.
Speaker A:So it's just, it's.
Speaker A:It's making it work for you.
Speaker A:If you have to do a daily allocation right now, do it, but have a way of tracking it.
Speaker A:If you can do it on the Monday, I think we've got some people that do it on Friday.
Speaker A:It's like, it's what works for you.
Speaker A:And that's what I love about the system.
Speaker A:It's there, it helps you, it guides you, but you have to make it work for you because if it doesn't work for you, you're not going to keep doing it.
Speaker B:Yeah.
Speaker B:And you.
Speaker B:So you would recommend somebody if they're doing it weekly, pick a day, pick a time and stick to it on a regular basis.
Speaker A:It's habit.
Speaker A:That's what the whole book is on is about, habit forming.
Speaker A:That's why I'm like, Monday morning.
Speaker A:It's so easy just to look at that Monday to Friday from the previous week, look at the deposits and make the allocations to me.
Speaker A:And we've got some great resources as well that you plug in a number and it tells you exactly what that amount should be.
Speaker A:That's a game changer as well.
Speaker A:I use Relay bank where I can move money by percentages, which is great.
Speaker A:Hopefully some of the banks over here will follow suit down the road.
Speaker A:But yeah, it's all about the habit.
Speaker A:And we've got several of our new members have been like, oh, it's Friday morning.
Speaker A:And they get so excited when doing those transfers.
Speaker A:And that's what it becomes like even now.
Speaker A:I just did my transfers yesterday because we were off yesterday, this morning and I just jumped in and do them.
Speaker A:It's just such a great feeling still.
Speaker A:And then you go, look at all your accounts.
Speaker A:I have 20 in my business because every dollar in my business has a purpose.
Speaker A:And even now, after all these years, there's just something about looking at those balances and those different accounts, knowing I have money saved up for the different things that we need.
Speaker B:Yeah, for sure.
Speaker B:And I love that every dollar in your business has a purpose.
Speaker B:That's a fantastic statement in itself.
Speaker B:What I love about what you're doing, Kerry, is you said the first Monday of the month.
Speaker B:So every Monday you do your allocations, but the first Monday of the month you do, you make sure the money goes into your payroll pot.
Speaker B:So you're taking away any stress at the thought of making sure your team get paid at the end of the month, aren't you?
Speaker B:And you've dealt with that straight away, head on, that's done, dusted next week, then it's profit tax, etc.
Speaker B:Etc.
Speaker B:And you worry about all of those allocations then.
Speaker B:And I think that's a fantastic way to look at things because a lot of people hear the terminology profit first and they.
Speaker B:And they see it is greed of the business owner as opposed to.
Speaker B:Actually what we're trying to say is have clarity on your money.
Speaker B:Understand where the money is going in your business and into certain areas and make sure you reward yourself.
Speaker B:Because if you don't sort of have a strategy about how to manage the money across each month that you go through, you will get to the end of the month and you will be stressed about paying your team and you most likely will pay them and not pay yourself.
Speaker B:Hence why we talk about profit first.
Speaker B:So I love the fact that you do it that way.
Speaker B:And so that's got to be Kerry's number one tip.
Speaker B:That's not in the book that you can get, I would say.
Speaker A:I think it's important because it makes me really sad when people think that, oh, I'm being greedy as an owner with the profit side.
Speaker A:And it's like, well, why did you start your business?
Speaker A:You started your business to create a better life for yourself.
Speaker A:You started it to improve your standard of living.
Speaker A:And you put in all the blood, sweat, tears, sleepless nights, all the stress and everything.
Speaker A:So it's like your team expects you to make a profit and they want you to make money.
Speaker A:Because if you're not making money, then the business isn't going to survive.
Speaker A:It's going to go under and they lose a job.
Speaker A:So I do my profit bonus at the end of each quarter is I take half of what's in my profit account and then 20% of that goes to my team and then I keep the other 80%.
Speaker A:Now, some people, you do whatever percentage you like.
Speaker A:If you want to do 50, 50, you do 50, 50, I do 80, 20.
Speaker A:Because at the end of the day, as the owner, you put all the risk up.
Speaker A:You're the one who's having to keep that business going day to day.
Speaker A:Your team, they come in, they do their work, and they go home.
Speaker A:Now, I have a team that are answering, you know, messages, you know, after hours, even though I tell them not to.
Speaker A:But it's a team that's committed and love what they do and are passionate and are excited to see us all succeed as a business.
Speaker A:So I think it's important to, you know, yes, you know, it's okay to take the profit out of your business.
Speaker A:That's why you started it.
Speaker A:That's what's going to keep you going, is being profitable.
Speaker A:If you're not profitable and you're plowing your own money into it every month, you're going to end up closing the doors at some point.
Speaker A:So it's like, it's not a greed thing.
Speaker A:It's part of.
Speaker A:It's the reason you're in Business to make a profit and it's okay.
Speaker A:And yes, you can reward yourself.
Speaker A:Yes, you can pay yourself a good salary because at the end of the day, all the responsibility falls on you.
Speaker A:That's what you know, comes down to.
Speaker A:It's on you.
Speaker A:You're the one that making the big decisions.
Speaker A:You're the one still maybe has sleepless nights now and again.
Speaker A:Obviously, being a business owner is not, you know, easy every day.
Speaker A:So it's like, it's okay.
Speaker A:Profit is a good thing.
Speaker A:That's what keeps business is going.
Speaker A:You know, everybody starts making a loss.
Speaker A:We got a really big problem to feel to deal with.
Speaker B:Yeah, I couldn't agree more.
Speaker B:And I love the fact that you share some of your profit with your team.
Speaker B:That must make them feel so, so loved by you.
Speaker B:You know, every quarter they get a little profit bonus.
Speaker B:Well, it might not be little, it might be large.
Speaker B:I obviously don't know the figures, but they get a bonus.
Speaker B:It's a thank you for everything they're doing for you, for their, for the customers in the business, isn't it?
Speaker B:What sort of things have they said when you've told them that that happens, especially when you're taking on someone new?
Speaker A:They love it.
Speaker A:I mean, they're so appreciative because I recognize that without them, I don't have a business.
Speaker A:Like, I can't, you know, I can't serve 60 clients by myself.
Speaker A:You know, it's a team effort.
Speaker A:You know, we've got three full time accountants, a part time accounts manager and a part time office manager.
Speaker A:Like there's a lot of hours that go in every week to our business to keep our clients happy and to provide our service.
Speaker A:So to me, it's recognizing that, okay, you know, I'm not just gonna, it doesn't feel right to take all the profit for myself.
Speaker A:And you know, everybody likes to do a bonus.
Speaker A:You know, I like to do a bonus throughout the year.
Speaker A:I know some people that just save it all up and do the bonus at the end.
Speaker A:And I'm like, no, I want my, my team to, you know, have that bonus.
Speaker A:You know, we have an offshore team and they get the bonus too.
Speaker A:It's not just, you know, my, you know, my team in Florida, our offshore team also get a bonus.
Speaker A:And they were also shocked.
Speaker A:And I was like, don't you guys get bonuses?
Speaker A:Like, no, we've never had that before.
Speaker A:And so it's just about doing something different.
Speaker A:And I know that my team, not to blow my own horn or anything, but my team Love working with me.
Speaker A:Like, they just so excited.
Speaker A:They tell me if I say like, hey, we might having a new client coming on, they're like, okay, fine, don't worry, we got it.
Speaker A:They're always, all the time, if I start saying, oh, I'm, you know, I'm working on this client, like, give it to us, we'll do it.
Speaker A:Like, they're so supportive in there and that's what just makes a huge difference.
Speaker A:And that's why I want to reward them by giving them that bonus as my way of like, just like, thank you.
Speaker A:Thank you for believing in me, for trusting me and, you know, for just always being there for our clients and wanting to provide the best service.
Speaker A:So it motivates them even more.
Speaker A:So, you know, doing the profit share, there's never, you know, I never gave it a second thought.
Speaker A:It was just, it was something I was always going to do.
Speaker B:Yeah, yeah, it's fantastic.
Speaker B:I love that.
Speaker B:And like you say, how many accountancy booking firms pay their staff a bonus?
Speaker B:I don't know the answer to that.
Speaker B:So it's a rhetorical question, but it'd be interesting to know, I guess.
Speaker B:Anyone watching this, you know, please put in the comments if that's what you do, because that'd be amazing.
Speaker B:But, but if it's something you want to do, profit first is a great, has a great strategy for doing that, doesn't it?
Speaker B:And it allows you to be able to make that choice without putting a stretch on your finances.
Speaker A:Right, so that is already there.
Speaker B:Exactly, exactly.
Speaker B:Okay, Kerry, so thank you very much.
Speaker B:What?
Speaker B:What?
Speaker B:Just, just tell me one, one more thing because you, in over the last couple of years, you've kind of chosen a niche for your business, haven't you?
Speaker B:And I know it's quite a popular topic.
Speaker B:A lot of accountants and bookkeepers are quite nervous about Nishim.
Speaker B:So I just wondered if you could share a little bit about that, how that's gone, what your thoughts are.
Speaker A:Yeah, so I was one of those people that did not want to niche.
Speaker A:I was like, no, I just can serve everybody.
Speaker A:I don't want to sort of narrow this funnel down.
Speaker A:And about two years I think it is now, I decided that, okay, I just have to do this.
Speaker A:It was making more sense and we were getting more clients within that industry.
Speaker A:So we're niching down on home service businesses in the US Search your plumbers, electrical, H vacs, landscape, anybody that kind of goes into a home.
Speaker A:And so, you know, it was a big step.
Speaker A:We did initially do construction.
Speaker A:Now we Niche down even more into home service businesses.
Speaker A:So we're just getting the website redesigned again.
Speaker A:But it really is, it does make a difference just because you get to really know that industry, you know what you're looking for, and then you sound even more of an expert to, you know, those clients because you know exactly the kind of issues that they are having.
Speaker A:And so I wish I had done it sooner.
Speaker A:It's not to say that we don't take clients in other industries.
Speaker A:So that's the big thing.
Speaker A:It's not a case like we just say no to everybody else.
Speaker A:We don't do that.
Speaker A:I know some people that do.
Speaker A:I personally don't recommend that because you just never know, you know, what's going to be going on in the, the economy.
Speaker A:But yeah, it was definitely, you know, it was a leap of faith, but it was definitely something that, you know, we've really enjoyed doing and getting to know those industries and those business owners.
Speaker A:And I think now we're probably, probably getting close to 20% of our clients now are home service businesses.
Speaker A:And I foresee that growing, you know, in the next year because we're about to double down on our marketing and advertising as well.
Speaker B:Yeah, that's amazing.
Speaker B:And having, having that many clients in a particular niche helps you look at industry averages, doesn't it?
Speaker B:Or compare the type of business with each other and give them some stats on that.
Speaker B:I think that's really important.
Speaker A:And the nice thing is with the US being as big as it is, you know, there's different things that you can take from one business to another business and you don't have to worry about them competing.
Speaker A:I'm not sharing names or anything obviously with any clients.
Speaker A:Nobody else knows who we work with, but it's being able to do things that you learn that you can then share with other people that it's not impacting them.
Speaker A:So if I've got somebody in Oklahoma and somebody else in Massachusetts that's in the same industry, I'm just like, well, hey, have you thought about trying this?
Speaker A:Have you pivoted doing this in the wintertime or whatever it might be so your clients end up benefiting more from it?
Speaker A:Obviously, if there's any kind of confidential information, then that obviously does not get shared, if it's a unique selling point.
Speaker A:But overall, generally it's just helping everybody kind of.
Speaker A:I know I've even, I think a couple of times said, like, hey, would you guys be willing to talk to my other client?
Speaker A:Like, hey, they're on the other side of the country, they're really struggling in this area.
Speaker A:Would you mind chatting with them as just how you, you overcame that?
Speaker A:And businesses love being able to help out other businesses as long as they don't feel there's a, you know, they're down the street and direct competition then, then people will help others and talk to them all day long.
Speaker B:Yeah, fantastic.
Speaker B:Thanks.
Speaker B:Thanks for sharing about that.
Speaker B:I think it's important to highlight that because it's something that a lot of people I talk to are resistant about doing.
Speaker B:But, but I find it so much easier to share your message within your marketing if you're talking to a particular industry and a particular or a particular type of person, if you go down that route as well.
Speaker B:So for anyone who may be listening, Kerry, that perhaps wants to move into the advisory space right now, but they don't really know how to and they're not quite sure what advisory is.
Speaker B:What would you say to them?
Speaker A:I would say don't keep putting off going into advisory.
Speaker A:Technology is advancing all the time.
Speaker A:We can't ignore AI, we can't ignore the automations we're seeing in our software.
Speaker A:And so I think to stay just on the compliance, it's always going to need some form of human element there, but not necessarily enough that's going to enable you to keep growing.
Speaker A:The advisory side is not just something that you need to do for you and your business, but your clients are looking forward as well.
Speaker A:And you may not realize that because, you know, people aren't always good at asking for help.
Speaker A:But that's the other thing as well.
Speaker A:Just finding that once we started offering this, people didn't want just a piano and a balance sheet in their inbox each month.
Speaker A:They wanted a conversation about it.
Speaker A:They wanted my input and my thoughts and my ideas.
Speaker A:And that's what advisory is, you know, and it's a lot of time people like, well, I don't have all the answers.
Speaker A:And I'm like, neither do I.
Speaker A:But I know the questions to ask from the data that I'm seeing to help the client find the answer.
Speaker A:And so that's, you know, that's how I see the coaching side.
Speaker A:I'm not here giving answers.
Speaker A:That's more of a consultant where you're giving the answers, do this, do that.
Speaker A:As a coach, you're guiding and directing.
Speaker A:So I'm asking questions, they're thinking things through.
Speaker A:I just keep asking questions.
Speaker A:Sometimes I'll play devil's advocate because you need someone to just point things out to them a little bit different way.
Speaker A:But every Time you start doing that, they're like, oh, yeah, I can do this.
Speaker A:Oh, I can do this.
Speaker A:And.
Speaker A:And you just get, you know, the seeds rolling just because of something you have said, just suddenly, you know, set off a light bulb in their mind and it's really helped.
Speaker A:And so it's just the advisory is critical.
Speaker A:Profit first, you know, is a great first stepping stone into that and that end up being, you know, the doors to get you into the advisory with the confidence and then the support of the community and also the guides and you and Duncan as the leaders of just helping you into that and being there as a support, because that's the biggest thing.
Speaker B:Yeah, thanks, Kerry, I appreciate that.
Speaker B:How can anyone contact you if they want to?
Speaker A:So you've got my Profit first email.
Speaker A:You can reach out to me there directly.
Speaker A:So if you're thinking about Profit first, maybe you want to jump on and have a conversation with me before you talk to Tim.
Speaker A:I'm happy to do that.
Speaker A:Or if you just got any questions in general about anything that I've shared, then, yeah, just reach out to me.
Speaker B:Fantastic.
Speaker B:Thank you, Kerry.
Speaker B:I've really enjoyed having you on, really appreciate your time and thank you for sharing all of your worldwide wisdom.
Speaker B:Thank you for having me and it's great having you as part of our Profit first team, helping our members as well.
Speaker B:So thank you.
Speaker A:Thank you, foreign.
Speaker B:Thank you for joining us on our podcast today.
Speaker B:Profit first beyond the book was brought to you by the Profit First Professionals UK and Ireland team.
Speaker B: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.
