Welcome to Built by Margin, the podcast where strategy meets the spreadsheet. I'm your host, Laurie Chen, fractional CFO and tax strategist, here to help you make smarter financial decisions, build a profitable business, and keep more of what you earn. Let's dive into the numbers that actually move the needle. So Dan reached out to me on my DMs and I was like, okay, you know, like I know who he is, cause I've read his book before. I wasn't planning to, you know, drop any money down for a coaching program cause I already have coaches. Um, and so, huh?

Laurie Chen

You already have coaches.

Kim Sutton

Yeah, I have a, I have an accounting firm coach that I work with for at least four years now. So, yeah, I'm part of a big group of CPAs and tax planners. And so we have a very intimate group of CPAs. So we see each other once a quarter or so. And so I was already in a program. And so I didn't really want to join another coach. But he started talking to me on DM. And I was like, oh, yeah, let's just chat about this. He seems really interesting. And so the more I thought about it, I was like, well, whatever the price was, I think it was like, Was it $3,000 or $1,500 for like 2 months? Like it wasn't that much, right? So I was like, okay, well, you know, I don't mind like. checking it out. And then once I started attending the calls, like that first call that I attended was like right at Christmas time. Like it was a really unique call. Like it's different. The way that he approaches coaching is a lot different from like my accounting firm coaches, right? And so they think about things differently. And what I like about him is that he really focuses on the why, like kind of more of the intangibles behind why you're doing things, why you're growing your business. I think my accounting firm coaches focus more on the technical aspects and how do we get new clients? How do we get revenue? I think Dan goes further than that because he talks so much about the daily non-negotiables that it's like, OK, it's not just about getting new clients. It's about being your best self, sharing that with the world. And that was really like, eye-opening for me to have that kind of philosophy in a very different way from what other coaches were telling me.

Laurie Chen

Very cool.

Yeah. And so right now my, my goal is to really increase the monthly recurring revenue, um, on my business. Um, and so I, I definitely think for me, it's, it's, it's helped me that this program has helped me because I, you know, focus more on the process and the journey rather than the result, I think as well as trying to save from what I've learned from Dan so far.

Right. Yeah. The result, will almost take care of itself if you follow the process.

Yeah. Yeah, I love how he talks about it being inevitable, like the success is inevitable if you just follow, do these things for a year. Who knows how long it takes for you to get to that success level, but I think one year, 365 days, that's totally doable. And however long it takes to get to that success point, You know, we'll see. I think it's different for everyone.

It is, for sure. Yeah. So you're a CPA and you love numbers.

Yeah.

Okay. And so now do you own a big firm? Are you a solo? What's your company like?

Yes, so I have two to three contractors working for me. We have a couple of clients that we serve. I've served clients from zero revenue startups to series A funded startups. And that's really my sweet spot is the series A startup because they're growing, but they're at a point where they're they're just about to need to hire someone full time. You know, they're kind of getting there. So kind of between the one million to twenty million dollar revenue range is kind of where where I come in and run their financial operations, run their accounting. Some companies, I do their taxes for them, like the corporate tax preparation, tax planning, tax strategy. So I work with a broad base of clients. I'd like to be more get more niched down, you know? So I'm trying to focus only on certain locations. Like right now I'm based in Austin and I have an office in LA and one of my contractors is in LA. So right now I'm just focusing on those two locations. But I also would really like to niche down, you know, become more of a focus on SaaS or software or whatever else I'd like to focus on.

Oh, very cool. So really, really dial it in.

Yeah, yeah, absolutely. So yeah, speaking of the numbers, let's talk numbers. So what, what are things that as you have started and grown your businesses, what are the things that you wish you have would have known or things that really impacted you from a financial standpoint?

Well, starting now, going backwards, today, it would be a lack of processes. That's just, the bigger you are, the more fragile you become if you don't have processes. And so, as a matter of fact, Zolfaya is going to help us with that. And we're pretty excited to get somebody. We've tried it a couple of times. We've hired a couple of different people to just just didn't, I mean, we used, we actually used one of them and we built, you know, we spent five or $6,000 on one module, you know, on one project, you know, with HR. And then we're like, well, it's going to cost, by the time we get done, it's going to cost 100,000 to get these processes in place. It's like, well, in the grand scheme of things is pretty economical. but we just couldn't do it at that moment. So looking forward to getting those in place. And then knowing my numbers, I mean, 11 years ago, 10 years, I mean, I started back in the early, you know, probably 2005 to where I had a company and started another company in 2004, closed that down in 2008. That was just a stupid thing to do. But I mean, I sort of knew my numbers, but now it's like I get EODs two times a week, which is every account, every balance, every receivables. So I don't have to go digging in QuickBooks. And then my new assistant is getting ready to start giving me those cash positions on all accounts the other three days a week. So because I used to get into the accounts when it was just one company and just, you know, one bank, I would get in there and I'd look over everything every day. And now it's multiple banks and multiple companies. It's just a little more, it's a little more challenging. So I would say not knowing my numbers and then the lack of processes are probably the two things that have caused me the most grief over a 45 year, approaching certainly, you know, really 50 year span.

So how do you select your finance team? Do you have full-time support or part-time support?

First of all, we have a great accountant. He's with a firm, Carl Riggs& Ingram. Does a great job. I really challenge him and push him to give me answers and to talk about things. I had to ask him to read Tom Wheelwright's Tax-Free Wealth, Have you read that book?

I have.

Yeah. Love that book. And now I've kind of become a tax nerd about talking about it with my wife. You know, you know, cost degradation and all that. She's she's like, what are you talking about? So when she talks back taxes to me, I'm like, oh, you know, it's very exciting. Yeah. We have a full time accountant that works remotely. She she's in the same town. She just she just doesn't come in because she has four kids at home and she homeschools. And she does a great job on everything. And then we had been wanting to have a full-time in-house person to do everything. That's just not worked out. Hired somebody, had to let her go a week later. And that was just unfortunate. You know, you thought you made a good hire. I thought we made a good hire. Turned out not to be so. And then, you know, about a couple of other people that are in QuickBooks, entering things, you know, invoices and proposals and all those sort of things.

Okay. Great, yeah, so it sounds like you have a good team supporting you, but it sounds like it may have taken you a while to get there and put that team together and have the right processes and systems in place. So we were just talking about having good accounting and financial support, and it's taken a while to get there, but it sounds like you now have more transparency and accuracy into your numbers, and you can also forecast your numbers and understand your cash flow.

We can, I didn't, you know, we have finance meetings every Tuesday, across all companies. And, you know, we, my general manager for my Tampa office is actually in Tennessee, you know, we, we teams her in, and we go over all her numbers for metrics, you know, we, we track quotes, sales and completions, apart from QuickBooks, And that allows us to, you know, we know we have to quote this much to sell this much to complete this much so we can get paid. And that's an important metric that we monitor too.

Great. Yeah. So you mentioned reading tax free wealth. You mentioned cost aggregation. Are there any tax strategies you've used in the last five years that has really been a game changer for you in terms of minimizing your taxes from a strategic standpoint?

Oh, yeah. I mean, I bought several pieces of real estate. I bought our office. I love real estate. I am a horrible landlord, so I decided that is not the path for me. I've got one place sitting vacant right now because a little house, because we rented it out to some folks and they collected so much trash around it. They ended up probably having several hundred rats living in the house with them. Yeah. And they asked me to please exterminate the rats. I'm like, please clean the property like you're supposed to, like you agreed to. And so I'm literally going to have to tear the house down. It was so bad. Um, But, you know, just primarily using real estate. And so I pay, I pay virtually nothing in taxes because of the real estate and depreciation. And, you know, and then we just, we're just very diligent about taking all the deductions we can, you know, all the accelerated depreciation and that sort of thing.

Is that something you're working with your tax accountant or firm on on a quarterly basis or more like an annual basis?

Definitely quarterly. And we talk monthly. You know, we email every couple of weeks. We have lunch on occasion just to because he's part of my my team. You know, it's like my journey. You know, there do we are we constantly doing things together from a law standpoint? No. But I want that relationship. So, you know, we'll grab lunch, we'll just talk on the phone and I'll ask you questions, just information, you know, I get his opinion and, you know, trademarks, we're trademarking our logo and those sorts of things. So he's, so he's part of that team as well to where, you know, if you don't stay in touch and you only talk with him once a year, you're just a number.

Yeah. Yeah, no, I definitely definitely recommend a quarterly basis for doing your tax strategy and planning because, well, one, if you're not making your quarterly estimates, you're going to probably get hit with a penalty, you know, come tax time around March or April of every year. Right. But just like understanding from a strategic standpoint what your numbers are pointing to every quarter and having that conversation with your tax advisor, I think it's critical in helping you as a CEO understand where your business is going and how that impacts your tax liability too, right? For sure. Are you a C corp or S corp?

Everything right now is an LLC. Okay. We have a holding company that holds several of the companies, and we have another holding company that holds a construction company. And then the company in Georgia, it's a separate piece.

Yeah. OK. So you also talked about bettering your financial forecasting cash flow, right? What system did you implement to really increase that visibility and make that stronger for you?

Well, you know, I don't like the way QuickBooks does budgets or does forecasting. It just doesn't work for me. So years ago, I mean, I'm an artist. I used to be made fun of by my best friend that, you know, my garage was a train wreck. We had this large box that had all these tools in it, and you never knew what was in there. You just rummaged through it and found it. You know, it could, by the grace of God, create some beautiful things, and they turned into signs eventually. but numbers were not something I really monitored. I didn't care about, you know, I could drive sales. I was pretty efficient at that. Uh, but tracking things was never, I just had no idea what I was doing. Um, you know, it's like my dad once said, making money is pretty easy, keeping us the challenge. And so, um, I, I think it was in about 2005, I came up with just a very simple Excel budget that just runs the month on the left and you know, the dates and then everything that's due in vertical order. And I can just follow, you know, that all the way down, have a tally. I refresh that every month to the cause every month is unique. And that way it forces me to have eyes on it and pay attention to it, you know, and now it's. Obviously, the budget's much more bold and much larger, but it's still the same principle. And then on the tracking, what I'll do is I'll just take QuickBooks and drop it into an Excel, my receivables, and then we're gonna be getting a, we're working on a CRM, getting set up with a CRM, which we should have had years ago. But I take all the projects that I, I feel good about I've had good conversation with the vendor or the customers and you know, or I anticipate those sales, and I'll fold those in to get what I feel is a realistic projection. And then I kind of carry that forward with through, you know, the year.

So you're mainly using Excel based in taking the QuickBooks data and dropping it in there.

Yeah, for the projections, yes.

Okay. What would you say is your number one metric that you track?

Our volume log, which is... sales, completions, and excuse me, quotes, sales and completions. Okay. So we know we sell this much or excuse me, we quote this much, we're going to sell, you know, a certain percentage. And then we know that, that, that protects the completions because then that's going to roll to those, those final jobs. And, you know, the team, you know, the install crews and everything, they do a great job. So I don't have any worries about those things getting done, getting done. And then it just repeats itself.

Okay. That's great. Yeah. How long did it take you to really refine to get to that point of being able to track that accurately?

Well, the volume log has just been existence for maybe a year, year and a half. And so a long time. Okay. It was, it was painfully simple. You know, it's just, And I mean, simple, because I'm just, you know, I'm an old guy, and you throw something too complicated at me, it's gonna be a problem.

Yeah. Okay. Okay, that's great. What about from an employee standpoint? How many employees are in your companies?

3232.

Okay. And then in terms of payroll, how are you? What system are you using to pay them?

We use a payroll leasing called simple HR. And then we have my assistant's actually transitioning. So she's maintaining the HR role for now, but she's transitioning to just totally taking care of me. And so we'll be hiring somebody new for that role.

OK, great. Great. So what are your business goals for this upcoming year? We still have, you know, nine months, nine months left. Um, do you feel like your first quarter, uh, really tracking with your goals for the year, or do you feel like you're going to need to pivot and adjust to something else so that you can meet your 2025 goals? Well, 24, 23 was an amazing year.

24, we fell on our face. We dropped off across all companies by 20%. The company I bought at Tampa became just a vacuum. We had an insurance snafu with our insurance company and because our licensure with running these big trucks and cranes and everything has to be in place before people can give us work. The Tampa office works in, they do a lot of national sign company work. installing Chick-fil-A's and McDonald's and Chase Banks and those kinds of things. Well, if your insurance isn't in place, your COI, those companies just stop using you. Well, because when we bought the company, there had to be a change of licensure. And my oldest son carries our license, and so it had to be switched over to his. Well, the insurance company didn't send out the COIs. So literally, all of the business, probably 80% of the business just stopped. you know, and that over $100,000 a month, that's really painful. And so I was paying the entire payroll, just cash flow, just cash rolling, or, you know, just paying the cash, excuse me, the payroll, just to keep the employees with very little work. I mean, trucks were really clean, shop was organized, but we weren't making any money. You know, so it cost me several $100,000. to make it through all of that. And now they had a great, well, their first quarter has been great. They're under the same name. It's Vintage Sign and Light Tampa, and we're Vintage Sign and Light Emerald Coast. And we did a name change late last year and rebranded them. So their first quarter has been very strong. My general manager is doing great. She's doing a better job remotely than probably we do being here, you know, she's sharp. Emerald Coast, first two months were really challenging. It was kind of like it was just coming right off the heels of 24 and wasn't getting a lot better. And then, you know, we had a quarter million dollar month in March. And so that brought things back up to a much better tolerable level. And You know, our goal is to, you know, hit 7 million groupwide this year. We're on pace for just a little over four. So we got to pour the gas on it. Yeah. The other two companies, the construction company, it started out very slow too. The bulk of what they do is convenience store maintenance. We work for over a hundred stores doing just facilities maintenance. And then they do a lot of other things too, but that's the bulk. And then the little company in Georgia, I've been trying to buy it for three years. There are the guys sold it to someone else who just about killed the business. He didn't know what he was doing. He was an engineer. He's a nice guy. He just didn't know what to do. And so we're in the process of rebuilding that. So, you know, we, it's, it's not at zero, but it's a pretty good size hole. Cause we're having to feed it. until it comes back, but it's been all rebranded. Employees are doing great. You know, it's systems are pretty decent. But so, yeah, we are definitely not on track to hit the seven. But we will be.

And it must be an increase from previous years, though, right? Or you said 2023 was your best year yet.

It was. Yeah. Twenty four was the first year we've ever gone down. And so, um, but yeah, it's just been incremental increase. I mean, in 2011, when I decided to go back into the sign business after the oil spill, um, my wife and I, I mean, my wife cried. She's like, you know, I didn't think you wanted to go back into the industry. Cause I stayed out of it for about a year and it's like, it's all I know. And it's easy to make money. And so the plan was to work alone. um, you know, use my God given talents and, you know, an art and just create a super high quality product to less work and just do a higher quality and higher dollar amount. And then the people that I had worked for before and from 2004, 2008 found that we were back in the panhandle and it just kind of blew up. Now we have 32 people and real estate and Korean drugs and Lots of stuff.

Yeah, I can imagine. There's got to be a lot of capital expenditures that you're making every year, right?

It's a bunch. Yeah. Yeah. And last year got us into, you know, more debt than I've ever, ever seen. And so that is right now we're saving. We're, we're kind of tithing to ourselves. We're taking 10% out of every single check from every single company and it goes in a savings account. And, you know, we had to do a, um, a rather high interest loan just to solidify things, get some of the old payables paid off. And, you know, I need to be ready, you know, to when the, when the, when that comes down, you know, we pay it down and our savings account gets up wherever they intersect, then we'll pay that off. And so, um, yeah, so the goal is this year, you know, pay off all credit cards, pay off the lines of credit and, uh, you know, be back flush.

Yeah. Have you heard of or implemented the Profit First strategy?

No, I've not heard of that.

Okay. Well, I mean, Profit First is a very well-known financial strategy. It's a book written by Mike, I think his last name is Michalowicz, but it's a really good book and it has a really good strategy about really the idea is to pay yourself first. You're kind of talking about, you know, tithing to yourself, you know, saving that 10%, you know, repaying debt, all very good financial goals. The whole thesis of his book is talking about how do you pay yourself first while also setting aside money for taxes, payroll, and all of that. And so his thought is you've got to create separate bank accounts for that. You can't just have one bank account. It's too risky to run everything through one bank account if you're talking about profit, taxes, OPEX, payroll. So he says just create four or five different bank accounts for all those items. And the way that you're like saving, you know, 10%, you could do that and put it in a separate account. But yeah, I would definitely look into the profit first. I think the Martel elite group is going to reference that a lot if you're like in the community feed. But yeah, that's always a strategy that I think is very useful for business owners that are actually profitable. but want to make sure that they're getting paid and making all their payrolls on time as well.

Oh yeah, I'll go hungry before payroll doesn't get met.

Yeah, right. So you mentioned also about AI. How is AI impacting your business and what are you doing to solve that?

I don't see it impacting us at all right now from an outward-in standpoint. But, uh, one of the reasons why I jumped on the call earlier with Sophia is I know it's going to, and I, my youngest son runs our marketing department and I've been asking him, it was like, we've got to get on, we got to get ahead of it. We've got to start using it. And in whatever way that we, that we can, I mean, we've got four full-time employees in the Philippines and it is, it's just been great. I mean, they do a great job. They, you know, they turn out a good product. Um, and so it's kind of similar in that, you know, it's, it's, it's not outsourcing, but it is. And, you know, you have these assistants and AI is basically a, an assistant and, you know, if you get that, learn how to use it, which is what I want to do. And so I was like, you know, um, she was talking about the, uh, Uh, first thing is money. It's like, you know, automating a wife to get my, uh, what do you call it? My, um, my cash positions. Well, Cheryl's going to have to go in. She's going to have to open, I don't know, eight bank bank accounts, you know, different bank accounts, or, you know, pull up, pull up three different websites and get all those numbers. And that can be automated with AI. So, you know, then that would save her every morning. It'll send a boot. There's the report. We can go over it. Instead of her having to spend 15 minutes or more, you know, collecting that data. So that using it in, um, sales and leads to, you know, automatically you scan a business card. It's in your, um, your system and your, your CRM. And then it automatically sends out a thank you email, you know, or text. It was great to meet you. Look forward to getting together. Yeah. Right now, you know, obviously keep track of the money, but the sales, uh, you know, Dan says that, you know, profits cure all ills. And, you know, I mean, I've always said that myself because if you, if you got the money, there's other problems, you know, they, they just get smaller. And so using AI to assist that, and assist my executive assistant to where, you know, she doesn't have to go into my email box, which, you know, we're going to put that EA, she's putting the EA playbook that Dan gave us. Yeah, it's great. And, and I didn't I wasn't even thinking, because I got in trouble because I scheduled two meetings before one o'clock. So because that's in the playbook that I'm not supposed to do that.

Yeah.

That's fine. And but I think it's going to help her tremendously. Oh, that'll just take it out safer, however much time every morning. So, you know, trying to figure out ways to use it to really streamline processes and improve us is, you know, there's new companies in our industry forming every day. You know, there's, there's over over 1000 sign companies in Atlanta. You know, so Yeah, there's a lot. And so, you know, down here, I don't know how many there are, but there's there's a bunch now. Are they all our competitors? No, but on some level they are. So we've got to we got to stay ahead. We have to iterate. We've got to be able to pivot. And, you know, I like to kill sacred cows. It's just because something's been done that way. I have no interest in keeping doing it that way.

Mm hmm. As far as marketing and social media, you know, like we have the daily non-negotiables that Dan talks about. What's one thing that you have implemented or are going to focus on over the next quarter to really implement and execute into your business?

Well, we've got two of those folks in the Philippines are SEO and website developers. One's a SEO specialist and the other's a website developer. tying that, you know, building our own websites. Now we've got a unit called Vintage Multimedia that builds websites for other people, creates content for digital displays, and then linking, you know, really, Elijah's on a schedule, you know, for posting for the companies. And then I'm, I'm not a social media guy. I've never done any of it. And so that's really a stretch for me. And about a month ago, uh, I had a wholesale customer send me a invite to join a thing called a lineup. You ever heard of that? I had not either, but I got on it and started looking around and probably a little over a week ago. Um, I went into the search bar and I put sign companies and it was like 10,000 sign companies right there. all their contact information. And so I use that as part of my reaching out, you know, and I'll reach out to five or seven of them in the morning and give them a greeting, you know, offer to connect. What can we do to serve? And I've gotten, I don't know, got 30 or 40 back, you know, accepting that. And I've already started getting, being able to quote projects for them. Now I've just got to automate that process so that I'm not sending out literally copy, paste, copy, paste, copy, paste, copy, paste. And when an email comes in, it says, do you want to accept my invite or whatever, whatever the verbiage is, it just automatically accepts it. And trying to do LinkedIn, which I don't understand at all. And then Instagram, which I understand less than LinkedIn. You know, just just just trying to follow the, you know, not reinvent the wheel, do exactly what he says. And I actually don't have I mean, I'm not sure how I have a Instagram account. I mean, I signed up for it. But yeah, when I search Instagram, on my desktop, I can't find me. So when I open it on my phone, it's there. And so I just got to learn, learn how to do that.

Yeah, I mean, once you get the hang of it, you'll get the hang of it really quick. But once you do get the hang of it, it's going to be a lot of fun, both LinkedIn and Instagram, because that's where your customers are hanging out. I love the ability of Instagram to post videos and reels and make content that speaks to your customers. Yeah, once you do get that going, you'll enjoy it. And it's something that I've learned to enjoy, the process of creating content that speaks to my customers, whether it be tax or CFO type stuff. But yeah, no, I really appreciate you joining the Built by Margin podcast. Also really excited to see where you're gonna go this year with the Dan Martell elite group. And hopefully you get to that 7 million at the end of 2025.

Got to hope, but you got to, you know, you also got to believe. And then, you know, you kind of work backwards from that number. How many phone calls do I have to make?

Yes. Exactly. Yeah, we all have to do that is is backwards planning, planning with the end in mind.

Reverse engineering. Yeah. And what I found with the group is it's like it already I already feel a level of accountability just because I'm trying to do, you know, trying to actually get on there every day and do something. And so that's again, that's new for me. So that's good. I'm glad. Yeah. But thanks for having me.

Awesome. Yeah, it's great to meet you. And the timing is really good, too, since you said you just joined like last week. So really glad to catch you at the beginning of the program and hope to catch up with you later on. Just kind of see how things are going.

Yeah, let's do it. Stay in touch and wish you all the success in the world.

Thank you. You too.

All right. Take care.

Thanks for tuning in to Built by Margin. If you're ready to turn insights into income, subscribe and join me each week as we break down the numbers behind smart business growth. I'm Laurie Chen. See you next time.