00;00;00;00 - 00;00;23;11

Unknown

Welcome to the Profit First for Real Estate Investors podcast. This series is the simple CFO Case Files, where our CFOs break down real client scenarios, financial systems and practical decisions from inside the business. Enjoy the episode.

00;00;23;13 - 00;00;44;01

Unknown

Busy. But that's the phrase we hear more than any other phrase from real estate investors who come to us. I'm Christina with simple CFO, and today I'm sitting down with senior CFO Michael Glassy to show to show you exactly why that happens and how we fix it. Michael Glass has been a senior CFO with us since August 22nd.

00;00;44;02 - 00;01;03;09

Unknown

He is one of our longest tenured team members, and honestly, a lot of what we do today exists because Michael has been such a crucial part of building these systems with us and helping with training on the frameworks, and just has really jumped in and helped us wherever we needed. Michael doesn't just apply our process to his claims because he does work with clients too.

00;01;03;10 - 00;01;26;21

Unknown

He also teaches it to see that join our team. So with that said, he knows that inside out from backwards. He lives at every single day. So. Michael, thank you for being here with me today. Absolutely. Thanks for having me. I'm excited you're here. All right. So quick snapshot kind of what we go through a little bit. You work with about six clients, if I'm not mistaken.

00;01;26;22 - 00;01;51;27

Unknown

So without giving names, give me one sentence on what their world looked like before. Simple CFO and then one sentence on what it looks like now. One sentence, maybe a couple? Yeah, maybe a couple. So before. Before. Simple. See what? What we see most often is that clients come in with a ton of ambition, but not a lot of clarity.

00;01;51;28 - 00;02;13;20

Unknown

I mean, that's just the basic way that we can phrase it. Not a lot of clarity, but after working with simple CFO, they gain clarity, but primarily just through the systems that we implement for the. So they're not really stepping outside of their comfort zone. They're just putting more structure around their finances, how they evaluate it, and then what they do in order to improve the numbers that really matter.

00;02;13;22 - 00;02;33;00

Unknown

Yeah. That said, very well, I know I originally I originally went with one word and then I was like, I don't think we can do that in one word. So I changed it to one sentence. I was trying to think of one. I was going to say chaos. And I'm like, oh, it's not always chaos. Yeah, I was trying to think of the right word, but yeah, just defend.

00;02;33;00 - 00;03;00;22

Unknown

Right. All right. And then so what makes simple CFO so different from most accountants and bookkeepers they work with before? Because most of these clients come in and they're like, I have a bookkeeper, I have a CPA, and they just don't have the right someone. So what makes us different? I mean, so many different things. So I say this and I'll say this, you know, until my dying day, you have to have somebody on your accounting team that really understands your industry.

00;03;00;23 - 00;03;24;28

Unknown

It's really important. And when we start to piece together the different accounting team members, your bookkeeper, your tax professional, whatever, a lot of them are compartmentalized. They may understand bookkeeping, but they don't get the full picture. And so when somebody comes to simple CFO, they're getting that individual that not only owns the industry, are knows the industry, excuse me, but they also get the full picture.

00;03;24;28 - 00;03;43;22

Unknown

And so now when we're bringing in these different accounting team members, we can actually create a team. I like to think of the CFO as the quarterback of the financial department. And you'd rather have a quarterback that's been to the Super Bowl a few times, right? Instead of somebody just trying to cut their chops for the first time and they're just, you know, pulling out all the stops, throwing Hail Marys.

00;03;43;24 - 00;04;05;29

Unknown

That's that is true. And CPA is kind of come to you with what they need. Bookkeepers categorize transactions and they ask you for what they need as well. So if you have a CFO that quarterbacks it and understands it full circle, then that just helps the owner then understand is what I'm gathering. You're saying yeah for sure. Because you know bookkeeper you you've said it very well.

00;04;06;00 - 00;04;24;13

Unknown

If a bookkeeper is asking you what should I do with this? That often is because they don't fully understand your business, right? And if the the CPA or the tax preparer is asking you what is how do I move this, what is this for? And he's trying to communicate with the bookkeeper. And there's a lot of friction. And they keep bringing that owner back in.

00;04;24;13 - 00;04;53;29

Unknown

Its again because they both don't understand your business very well. So when we talk about clarity, the level of clarity that you get when having a the proper CFO on your team is bar none. It is. And you know what? I know I gotta I'm gonna squirrel out on that a little bit because bookkeeping is really important. And for sure some bookkeepers don't understand a business, but I, I feel like you really need a bookkeeper that understands real estate, because real estate can be pretty complex.

00;04;53;29 - 00;05;17;02

Unknown

So what's your take on, like, actually having a bookkeeper that knows their business to that? So I say this also, the one thing that every, every business owner needs is bookkeeping. You know, I could I could make the argument that depending on where you are, you may not be ready for a CFO. I can make that argument, but every business needs a bookkeeper.

00;05;17;02 - 00;05;37;25

Unknown

And if that bookkeeper doesn't understand your industry, then your books are going to be wrong. And when your books are wrong, you're not going to have clarity. You're going to overpay on taxes. You're going to have difficulty getting loans. You're going to be confused as to why money is bleeding out of your account and why you work harder and make more sales, but you still are busy but broke, right?

00;05;37;27 - 00;06;12;24

Unknown

That all of that stems from poor bookkeeping. All of it. Absolutely. And you know that. So key to having the right people on your team. I love the that whole conversation. I'm pretty sure we could talk about ours for quite some time. Oh, let's talk about like how you've evolved with simple CFO. Obviously, we don't have the time to go into the four years that you've put into us, but your role is like so key, so important because you've been with us to, like, really help and evolve these systems.

00;06;12;24 - 00;06;30;22

Unknown

I know, you know, I've, I've evolved some of the training. I came in, I developed a site about that, but I can't tell you like how much, how important you've been to that process and like, helping me. And just if I just throw it off of you and you throw some things back and just our relationship and being able to define and create those systems is, is really cool.

00;06;30;23 - 00;06;53;02

Unknown

So that's just that's what we do today. Like define that process, give it to the CFO, train the CFO and make sure that we are giving that process to all the clients that come in. So what are you most proud of? What do you see? The is the biggest difference for our clients with the systems that we've created.

00;06;53;04 - 00;07;23;01

Unknown

You know so many things. Being able to see the new CFOs come in, adopt the system and then take off and then impact the clients very, very quickly to, you know, that is, I guess, what I'm most proud of when we think about why that's the case is because what we've worked and the systems are already there, but what we've continued to work on is developing the process so that every client gets the same standard of attention to detail right as they go through it.

00;07;23;01 - 00;07;48;15

Unknown

And as we're bringing on CFOs, we're bringing on CFOs with the experience, with the knowledge of the industry, with the tenacity and the hunger to wants to be in this role. And then all we're doing is giving them the framework to then go out there and implement it. And so we've been able to time and time again, not only bring on new CFOs, but bring on multiple clients and deliver the same results time and time again.

00;07;48;17 - 00;08;08;00

Unknown

You say it so well because you you've really have been key in training CFOs. And you know, what's funny is I remember when you first came on board, right? Because I've been here quite, quite some time to and I remember the, the individual, the CFO that helped train. And I remember he was training you and I remember him coming back to me like within a week.

00;08;08;00 - 00;08;23;27

Unknown

And he said, I don't need to train this guy. He said, he knows so much. He said, I can train him on our processes. But at that time, you know, we hadn't evolved to where we are right now. Right? We still had the same level of help because CFOs, you know, they came in, they helped. We all have the heart to help.

00;08;23;27 - 00;08;50;26

Unknown

But the process has evolved so much. And he was just like, this guy is good. Like he doesn't need to be under me or work with me like he's got it. He can just we're just going to unleash him and let him run. Well, I appreciate it, but I think we've I think we've been we've been, you know, blessed, lucky, whatever you want to call it that most of the CFO that we brought on fit that criteria though, you know, when they come in with the experience and with the right mindset.

00;08;50;27 - 00;09;11;21

Unknown

And then for us, it makes it really easy. It makes it really easy for us to say, okay, we know that you have the personality and experience, apply this framework on this process, and let's go out there and let's execute. And and we've been able to do that. I mean I can name and I'm sure you've already interviewed a few that are going to be on the podcast, but I can name a handful of them that done the same thing.

00;09;11;23 - 00;09;39;27

Unknown

Right. And it's already have made some massive impacts in the company. Definitely. I agree. And then from from that vantage point, like what is a simple CFO system make possible for a CFO that they they just couldn't do flying solo? Oh for sure. So I think what it is, is you you phrased it probably the best way, the simple fact that you could throw something off of me or anybody else on the CFO team, and then we get the opportunity to brainstorm.

00;09;39;27 - 00;10;04;14

Unknown

We get the opportunity to poke holes in it. We get the opportunity to say, hey, look, this is my typical approach, but we're not seeing the same results that we have with the other clients. What am I not looking at? That may change the outcome. And then we get this this mastermind, this think tank of all of these CFOs, CFOs with all kinds of experience to be able to go in there and help each other problem solve.

00;10;04;16 - 00;10;31;05

Unknown

You know, without that, there are other very capable CFOs. But when you're when you're under island by yourself, you're only limited to you're only limited to what's in here at the moment that it's in here. Right. Because sometimes you don't you might know it, but if you don't recall it in that moment, you can't use it. So it helps that be in that environment where we're constantly we continue to have ongoing training, you know, continuing education for CFO.

00;10;31;05 - 00;10;50;12

Unknown

We have these ongoing weekly meetings where we're powwow and problem solving. That's the value of having a collective group of CFOs that know a specific industry and things of that nature. Definitely any. No. It's funny is that we learn from our clients too, right? So if I don't know something and I'll be like, hey, do you have a client that does this?

00;10;50;14 - 00;11;12;04

Unknown

And then three other four other CFOs could pipe up and be like, actually I do. We literally just talked about that last week. So it's kind of cool how, you know, the industry it's 90% real estate, right? You know, so it's like they're they're doing some type of deal. Right. So there's different ways to look at it. So there's always someone that can be in your corner there which is really cool 100%.

00;11;12;04 - 00;11;30;07

Unknown

And you know, you know, to that point and I love to tell this to the clients. And, you know, we promote this a lot at simple CFO. We don't care if you're subject to the lease option, wrap around mortgages, sell or find it, you name it. All the weird, you know, I call them weird. But all these new buzzwords when it comes to real estate, we've done it.

00;11;30;08 - 00;11;50;17

Unknown

If the CFO hasn't personally done it, we've worked with a client who's done it. So we really do know it inside and out. Yeah, my husband has personally done every deal that could be wonky or crazy, and we used to bring it to me. I'm like, what are we doing here? Right. And so and a lot of people have that, like where they have that actual personal experience.

00;11;50;17 - 00;12;05;00

Unknown

And I know I used to I didn't know, like my husband would bring all these deals to me and I'm like, what are we doing here? And it was just really crazy. And then you start to hear all this. And by the way, for everyone listening, Michael trains on real estate. So he kind of understands all those deals.

00;12;05;00 - 00;12;30;03

Unknown

And I'm sure you've done them yourself. I think you have. So so that's the cool thing too, is we all we all have like a personal relationship with investing as well, which is really cool. Yeah. All right. So let's get into our tools a little bit of our tools. So walk me through its lined out right. So most importantly the first 60 days with the client is where you really want to drill in.

00;12;30;04 - 00;12;51;25

Unknown

You really want to lay the foundation and get them to have clarity and understanding as quickly as possible. Obviously not too quick, but there's other things that could get in the way, but we won't go through that. But in that first, first 60 days of laying the foundation, what are we actually doing with the client at that time, like data cleanup account, all that stuff?

00;12;51;25 - 00;13;10;27

Unknown

What are you actually doing? Take us out. So the first thing that we're doing on that first initial call on our battle plan call, we are really trying to understand the client at an intimate level. And we're not talking about, you know, hey, what's your goal? I want to make $50,000 a month or I want to make 10 million this year instead of, I mean, all of that superficial.

00;13;10;29 - 00;13;26;14

Unknown

We want to know why. Why are you pursuing it? Then we also want to do a little backwards math. So. Okay, just hypothetically. All right. You want to send your kids to college, you want to get a live in nanny, and you want somebody to personal chef to cook you three meals a week. Okay, great. Great. All that's great.

00;13;26;14 - 00;13;45;06

Unknown

What's the actual cost associated with that right now? Let's take that call and plug that in. And this is where we start to determine the real we call it the break even number. But that real number that we're really chasing now, once we have that, then we move into the analytical phase and we're walking them through our expense analysis.

00;13;45;07 - 00;14;05;12

Unknown

We're looking at the accuracy of the books. Right. We're actually evaluating their bookkeeper now. All right. We're going through the making sure that does this transaction actually belong here or should it belong under marketing. All right. Or whatever the case is? And the reason that's important is because when we're looking for the trends, when we're looking, hey, you know what?

00;14;05;12 - 00;14;33;22

Unknown

You have lost money in the past six months. And when we look at your expenses, it seems like your marketing is 40% of your total expense ratio, right? So if that's the case, now we know to dive into marketing. How effective is your marketing? What is your conversion rate? What's your client acquisition cost? I mean, all of these conversations, for the most part, business owners know that they need to be aware of it.

00;14;33;22 - 00;14;53;17

Unknown

But again, they don't have the structure. They don't have that person to guide them through and highlight those numbers. So as we're going through that, the first 60 days is a lot of deep diving and finding one. Is it accurate? Let's make it accurate. If it's not. Now let's start to analyze trends. And once we analyze translates find the root cause of the issue.

00;14;53;18 - 00;15;17;16

Unknown

What is the root cause. So for example let's say oh we don't have enough. We don't we're not having enough revenue. You know what a lot of people love to say, well, just because we don't have enough leads now, is it is it or is it because your flip projects, instead of taking 120 days or now taking 270 days, is it because every time you create a flip budget, you go over by 20% on your budget versus your estimate?

00;15;17;17 - 00;15;37;03

Unknown

What is it really? But once we find the root cause, then by the end of that, 60 days are coming out of that 60 days, that's when we start creating our action plan. What are we actually going to do to reverse these issues and start to see improvements quarter after quarter after quarter.

00;15;37;05 - 00;15;57;08

Unknown

And then you know that if we don't have those correct numbers, I will add, like, you know, we're a farm built on profit first, right? David wrote the book Profit First Real Estate Investors. So we don't dig into those numbers beforehand. If we don't have accurate numbers, we could be turning over a plan to, you know, a far as we've been calling it, profit.

00;15;57;08 - 00;16;18;19

Unknown

First of all, out plan, we could be planning that over the next quarter on inaccurate numbers. That's not to say you can't start with profit first and just start putting money aside. But when we actually do the rollout and build that into the dashboard, how important is that? Extremely important. Because you're right. You can build you can build anything, you can build anything.

00;16;18;19 - 00;16;38;19

Unknown

But if the numbers, if the foundation is false, right, if it's fake, then we could be building something completely. I don't want to say completely wrong, but because to your point, can we start profit first right now and just implement it? Yes. Well, it still help us. Yes. Because it's going to it's going to alleviate a lot of the stress around the money management part.

00;16;38;21 - 00;17;07;26

Unknown

But when we're talking about seeing massive improvements, it's like us saying, hey, you know, let's fix this thing. I think it's the the brick on the bottom when reality, it's the rebar or whatever. I just spent two weeks on this brick when I could have been spending two weeks on the Reebok. Right. And so in that situation, it's we want to make sure we're working on the right things, because that's how we see that exponential growth or the impactful growth that change that most of our clients want to see.

00;17;07;28 - 00;17;25;10

Unknown

We can see it when we're focusing on the right things. Absolutely. That's honing in that they wouldn't know. And in your brain, that's why you are so busy. Owners are like wearing 20 different hats because they don't really know what to focus on. Right? It's to throw the mud on the wall and see what sticks type of mentality.

00;17;25;10 - 00;17;54;12

Unknown

That's exactly right. Yeah. Yep. So let's back back up to profit first. So they have the book. Now we have the workbooks coming out soon. You can take a piece of paper. You can back your way into it. But what's the difference between them reading it and then actually having simple CFO help implement it. Oh I mean, that's one of my, one of my favorite phrases is education without application is just entertainment.

00;17;54;12 - 00;18;12;21

Unknown

And I think most entrepreneurs fall into the realm of educate educated. I'm gonna read a book, I'm gonna go to a seminar, I'm going to do all conference this. I'm going to spend all this money on continuing education, but I'm only going to do maybe this much of it. Right. And and I actually was just talking about this earlier to somebody else.

00;18;12;24 - 00;18;36;08

Unknown

You know, Elon Musk contributes a lot of his success to just doing things quickly and failing fast. Right. And the concept that I'm trying to articulate is sometimes we just gotta put things in action so we can see what works and make the minor adjustments. And the sooner we do that, the sooner we start seeing results. So to your point, yeah, you can read it and you can try to interpret it.

00;18;36;08 - 00;18;59;07

Unknown

And you know, the book it the book is well written and it tries its best to to try to capture most of the general. Everybody's unique. Every business is, you know, got these little nuances. So by being able to come to simple CFO, we can highlight what those nuances are for you. So we can tweak the profit first to make it actually work for you can customize it and put it into action very quickly.

00;18;59;09 - 00;19;19;00

Unknown

Absolutely. Yep. Perfectly said. Because that that that is why our system works. So it's not just a theory. It's not just something you you read. It's literally built into our tools, built into our processes. We train on it. They can't not do it right when they work with us. And it's specific to their business and what they're doing.

00;19;19;01 - 00;19;34;24

Unknown

It's it never it's never a one size fits all. You can't just do it and then apply like you can't start a new business that's outside of the estate or something completely different, and then take that same profit first plan and apply it to that business, you know, so it's not it's not one size fits all at all.

00;19;34;27 - 00;19;55;14

Unknown

Yeah, exactly. All right. So first we'll stay. We'll stay here just a little bit. Any clients that you've worked with that have really, really turned the corner with profit first. Like what were they doing before and after. Because when they come in, if they don't have a setup at all, they don't have the accounts. Their revenue hasn't grown.

00;19;55;14 - 00;20;20;13

Unknown

So before and after. Give me an example of how you built the system for a client. Okay. I'll give you two examples that really they always stick out to me. So one client in particular, they're doing a ton of assignments and wholesaling and flips, but they weren't ever paying themselves. And so for them, they felt as if they were almost living paycheck to paycheck every month.

00;20;20;16 - 00;20;42;02

Unknown

Now the company was still profitable. On paper, it's just the money was moving in and out so quickly it wasn't dedicated to anything. So all we did was set up that owner's pay account. That's it. And we forced them to put a couple thousand dollars a month into that owner's pay account. And we built it up for a little while until they felt safe that they could actually start drawing from it.

00;20;42;02 - 00;21;04;20

Unknown

And as soon as they started drawing from it, they were like, wow, the business actually can pay me, right? And that was that little shift that they needed because for them, their their company grew a little bit. But it wasn't about scaling. It was much more about the lifestyle for them. So they actually just blunted they they were okay with keeping the business the same size as long as it started paying them.

00;21;04;20 - 00;21;28;10

Unknown

And we were able to accomplish that within a few short months. So that one always sticks out to me. There was another client who is and many of us have have have been through this. Maybe those are listening, may have experienced this great years, great years, crazy profit. But it also came with a crazy tax bill. And they did not have any money set aside for taxes.

00;21;28;10 - 00;21;47;28

Unknown

So by being able to set up that tax account, right. And essentially they're able to move that money over. Then what we install was the quarterly estimated payments. Well now it did take a cycle. So we worked with that client for a little over. Well, we're still working with them, but it took a little over 18 months for them to realize it because they still had to catch up from the past taxes.

00;21;47;29 - 00;22;08;19

Unknown

But after that, now they're at a point where they're making their quarterly estimated tax payments. They're okay. End of the year, they might get a refund or it's it's not a big burden anymore. That money is allocated for it. And so that has taken a complete stress off of their shoulders. And it causes our doesn't cause them to be reactive anymore at tax season.

00;22;08;20 - 00;22;24;22

Unknown

Right. They could be more proactive and say, hey, now that that money is there, I can focus on investments. I can focus on whatever else comes next. Right? Because you need to be digging for money, trying to find how to pay this huge tax bill. You don't want to pay anyway. And now you've got to know. Now you got to figure out how to pay it.

00;22;24;23 - 00;22;45;01

Unknown

Right. And I know you've seen this too, but the way you pay for it is by doing more deals. But by doing more deals, you create more tax burden. And it's just a it's an endless, endless loop. So those are the two that that really stick out to me and I often refer though. Yeah. Yeah. Those are great examples because those are the two things, you know, besides obviously we know profit.

00;22;45;01 - 00;23;01;28

Unknown

You want to pay yourself, you want to enjoy things. But those are so important because a lot of people will start a business and not be able to pay themselves. And they're like, I'm just handing money over, but I'm watching money in and out of my hands. It's just in. Its outstanding out and not keeping it. So those are great examples.

00;23;02;04 - 00;23;22;10

Unknown

So we know that's one tab on the dashboard that I know a lot of people have gone into. Like, yes, we have to use a P for our tab. It's amazing. But let's talk about the simple CFO dashboard. What are we tracking? How does it actually help clients and CFOs make decisions? And if you have a specific example of how the dashboard changed the way a client sees their business.

00;23;22;13 - 00;23;42;20

Unknown

Oh, yeah. So in the dashboard we have the ability to track everything. But what's really important is that we're tracking real time data. I think that's the most important piece there. So our dashboards, you know, obviously if we have QuickBooks set up with our client, it links directly to QuickBooks. So we have real data. We have real KPIs that we can measure.

00;23;42;23 - 00;24;06;06

Unknown

Now for the CFO it helps the CFO because there's a ton of tools that we can utilize for deal management, deal flow management. Right. Cash flow management between the deals between month and month, between weeks. We have all of that capability there, but we also can shrink down the complexity and just make it really easy for the client to to read.

00;24;06;09 - 00;24;28;15

Unknown

Right. We have the stoplight report, for example, where our clients can simply just pull up and see what they need to focus on for that quarter. For that month. Very, very simple. We have a KPI dashboard, what we can see and quickly be able to articulate what's going well and what's not going well. Right. The clients come with all different requirements as far as what they want to see.

00;24;28;15 - 00;24;49;17

Unknown

But what's important for us as simple CFO is that our clients are getting the data that they need to make informed decisions so that dashboard can be shrunk, or it can be expanded in order to fit that need for our clients. I like it, yeah. And the pictures, you know, I know when I when I was working on the dashboard, I thought, well, I need some graphs in here, I need pictures.

00;24;49;18 - 00;25;10;12

Unknown

People like pictures, you know, you like to see how your money moves throughout months, years, whatever. So it's nice to put those graphs in it. And they can just pull up one sheet and say, okay, this is what it looks like. Looks nice or not. Right? Right. All right. So last but not least, we want to talk about a full transformation story.

00;25;10;12 - 00;25;21;13

Unknown

So let's bring all the pieces in that we've talked about. Pick one client success story that shows the full simple CFO transformation. What does that look like?

00;25;21;16 - 00;25;40;23

Unknown

Okay I like using this one because it kind of goes against what people will think as a success story. So a couple comes in. They're cranking out a ton of deals, a ton of deals. They probably did about somewhere between 50 to 60 flips. However, their books were clean. So as we went through, we moved some things around.

00;25;40;23 - 00;26;02;26

Unknown

And then we found out that they actually lost money. So they did all this and they lost money and they were feeling like, man, I feel like I'm living paycheck to paycheck. What's going on? So we dove into it and we realized what what was happening. They were essentially being overleveraged. Their properties were performing. And then that money, that cash flow that they had was all coming from loans, private loans, hard money loans.

00;26;02;26 - 00;26;21;20

Unknown

And they were taking that borrowed money, that leveraged money and then spending it on other things. So they, they, they lost track. They, they weren't using it for a specific purpose. So after we tightened everything up, they had a, you know, a realization. They're like, hey, look, if we continue down this path, it's going to be a long uphill battle.

00;26;21;28 - 00;26;43;22

Unknown

So as we sat down, we revisited, we went back to that battle plan call and said, what was the purpose of starting the business? And then they the couple talked about it and said, you know, honestly, it was just so that we could retire, we could kind of live our life. So what we did was we said, how can we continue to do operate in the space that you're operating in, but buyback freedom increase profits.

00;26;43;22 - 00;27;05;04

Unknown

So one, we got to get rid of all this borrowed debt. Let's get rid of all of it. So they actually decided to switch their business model from flips to wholesaling and assignments because they've already were doing some wholesales, but the flips were actually costing them the money. So they got rid of that. Then they said, but you know what, our wholesale and assignment fees are significantly less than the supposed profits that we were making on the flips.

00;27;05;07 - 00;27;18;14

Unknown

I don't know if we can actually afford. They had an executive assistant and I said, well, I don't think you can. You can afford them either. But do you really need or if we're not dealing with contractors, you're not dealing with all these things. We're just a sign up. It's like, no, I don't think we do. Okay. All right.

00;27;18;14 - 00;27;35;07

Unknown

So we had to get rid of her. So now cash flow is starting to come back in a little bit. But they're saying, you know, now we have a deal flow issue. You know we can do marketing with said hold on. If the deal flow is the issue because our assignments we've reduced our expenses. So now we're positive cash flow.

00;27;35;07 - 00;27;52;25

Unknown

But you just want to increase deal flow. What else do you enjoy? So the husband says, you know what, I love coaching. And then the wife says, what? I love putting on events. I was like, well, if you coach and you put on events. Why don't you go back to that? So what they ended up doing was starting wholesale coaching again in the community.

00;27;52;27 - 00;28;22;22

Unknown

They were able to bring in students who paid them for their coaching services. And then once the student brought in the deal, they would simply JV on the deal. So they got rid of their marketing concern. They had unlimited lead flow, they increased their cash flow through student membership, and then they increased their profitability by getting rid of overdue projects over budget, high cost of borrowed money, and within about 18 months, their entire business model changed completely 180.

00;28;22;23 - 00;28;46;20

Unknown

But they were now living that life that they originally intended when they started the business. And to me, that one. I love that story because it goes to show you don't always need to scale, you don't always need to scale. We just need to find whatever our original intention was and make sure that we are building the business around that to support that intention.

00;28;46;23 - 00;29;12;05

Unknown

Definitely, I like that. So then where are they at today? Exercising profit first, making enough money, they paying themselves, traveling. They're doing everything now I'm sure you know you know it. Stress is inevitable in business, right? There is no such thing as a stress free business and a stress free life. But their stresses are significantly different. It's not a matter of living paycheck to paycheck anymore, right?

00;29;12;07 - 00;29;37;05

Unknown

It's more about student membership or gripes and complaints that are the one one off JV wholesale assignment. But they have completely changed their lifestyle and their conversations. Nice. That's an awesome story I like it. All right. So that is the simple CFO system in action. Not theory, not a spreadsheet. Someone emailed over to you a real CFO in your business meeting with you every single month.

00;29;37;05 - 00;29;53;01

Unknown

So if you're listening now and you're thinking the same thing, I know we said a bunch of you don't. You don't know what, you don't have any clarity. You're confused when you look at it. But, you know, you make good revenue, but you have no idea where your cash is going. Just tired of running a business that doesn't work for you.

00;29;53;02 - 00;30;12;24

Unknown

As you can see from all the stories we've talked about, you're not alone. It happens, but it is absolutely fixable. We can help you. So head over to book a discovery call, and let's give us a chance to show you exactly where your money is going and how to keep more of it. Thank you, Michael, for joining us.

00;30;12;24 - 00;30;32;27

Unknown

I truly appreciate you being here. It's been amazing. Absolutely. Thanks for having me. All right. See you guys in the next episode. Thanks for listening to the simple CFO Case Files on the Profit First for Real Estate Investors podcast. If you found this helpful, make sure you're subscribed so you don't miss our guest interviews featuring other real estate investors and our Profit first chats with David Richter.

00;30;33;00 - 00;30;40;02

Unknown

If you're ready to bring clarity and structure to the finances in your business, visit profitrei.com. To apply for a free financial discovery, call with our team.