บทถอดความฉบับเต็มของ Building a Strong Financial Future for Your Business with Hurley Fox

--> 00:02:08.349 When I was at that accounting firm, I realized what you just said. 00:02:08.349 --> 00:02:14.735 There was just a huge void between business professionals accountants, lawyers, financial planners etc. 00:02:14.735 --> 00:02:15.776 And business owners. 00:02:15.776 --> 00:02:20.871 And the business professionals weren't really helping the business owners with what they truly need help with. 00:02:20.871 --> 00:02:30.668 Right, they were filing the tax, but were they even asking a question of hey, was this what you wanted to do? 00:02:30.668 --> 00:02:31.349 What are your goals for next year? 00:02:31.349 --> 00:02:32.313 Why is this year worse than last year, et cetera. 00:02:32.313 --> 00:02:36.246 And so there was just this need out there where the business owners needed this help with stuff they don't want to be doing. 00:02:36.646 --> 00:02:41.704 Right, the boring stuff of, hey, do you keep stuff organized, do you look at your financials? 00:02:41.704 --> 00:02:49.501 And then the gap between that and what the business professionals were kind of caring about, which is just checking their boxes off, right? 00:02:49.501 --> 00:02:54.633 Hey, the returns filed, the bookkeeping is done, you're good, you have perfect accounting and you're losing money. 00:02:54.633 --> 00:02:56.322 What's the point, right? 00:02:56.322 --> 00:03:12.399 So we exist in that, in that middle ground between the kind of the accounting and business professional world and the entrepreneur business owner world, and we're in the middle and we're acting as a liaison between the two. 00:03:15.860 --> 00:03:19.211 The firm where what we do each month kind of get our foot in the door with people is we do the monthly accounting for businesses, right? 00:03:19.211 --> 00:03:31.272 So anything monthly that's going on with your business and that could be bookkeeping, ar, ap, monthly closeout, monthly controller duties and monthly CFO building reports, all that fun stuff, we do all that. 00:03:31.272 --> 00:03:53.366 We don't do tax returns and financial planning, but we act as the liaison, making sure that they're all talking amongst each other and kind of communicating that and putting that into the jargon that the business owner understands and is looking for, right, yes, so, yeah, we exist between that space between those business professionals and the business owner, because they often they talk past each other. 00:03:53.927 --> 00:03:59.086 Just send me my balance sheet and my yearly report and show me that. 00:03:59.086 --> 00:04:00.449 And that's what I want to know. 00:04:00.449 --> 00:04:01.992 How well did my business do? 00:04:01.992 --> 00:04:03.102 What do I owe in taxes? 00:04:03.102 --> 00:04:05.086 You know, that's what I want to be concerned about. 00:04:05.086 --> 00:04:12.920 And then also, I mean, let's talk about this A lot of business owners guys, if you're out there and you're thinking about starting a business, this is literally the most. 00:04:13.822 --> 00:04:14.902 You have to understand this. 00:04:14.902 --> 00:04:21.072 It is so hard as a business owner to get a loan because you don't have a W-2. 00:04:21.072 --> 00:04:22.713 Yeah, you're, you're. 00:04:22.713 --> 00:04:32.211 You may be 1099 in everybody that you're working with, you may have a 1099 yourself or whatever, but all the monies, if you're a solopreneur, you got all this money coming in. 00:04:32.211 --> 00:04:36.987 You don't have a W-2 from a big company. 00:04:36.987 --> 00:04:42.103 You're probably trying to write off as much as you possibly can and at the end of the year it looks like you have no money. 00:04:42.103 --> 00:04:46.190 So what happens when you go out and try to try to get a loan from a bank? 00:04:46.190 --> 00:04:49.843 They're going to tell you like it looks like you don't have enough money to put gas in the car. 00:04:49.843 --> 00:04:51.889 Talk a little bit about that. 00:04:51.889 --> 00:04:54.605 I mean, I'm sure everybody is dealt with this. 00:04:55.086 --> 00:04:58.920 Yeah, so, and again, that's why it starts with what are your goals right? 00:04:58.920 --> 00:05:04.297 Because then you want to structure the financials and your business around what those goals are right. 00:05:04.297 --> 00:05:08.367 If it's to save money on taxes, then you know having that income. 00:05:08.367 --> 00:05:13.386 You know be lower is not the worst thing, but it'll bite you when you go and try to get a loan. 00:05:13.386 --> 00:05:14.668 So I'll just give a personal story. 00:05:14.668 --> 00:05:15.851 I went to go. 00:05:15.851 --> 00:05:17.922 We bought a house last year. 00:05:18.963 --> 00:05:25.254 But a couple of years ago, when I first started to look at buying a house, I went to go talk to the banks. 00:05:25.254 --> 00:05:27.403 Hey, look, I want to kind of line up and get pre-approved. 00:05:27.403 --> 00:05:35.468 They said, okay, great, we need not only this year's P&L balance sheet and forecasted income okay, which they don't even really look at. 00:05:35.468 --> 00:05:42.507 They look at last year's P&L and balance sheet and the year before that and they took the average of the two years. 00:05:42.507 --> 00:05:45.571 So just think about how frustrating that is for a business owner. 00:05:45.571 --> 00:05:47.774 I was, I was doing business in that year. 00:05:47.774 --> 00:05:52.435 I was going to do you know, the business was going to do seven figures right and I was going to do pretty well. 00:05:52.435 --> 00:06:00.281 And but the year before I did okay, but the year before that I did terribly right In terms of where the bank, what the bank was looking at. 00:06:00.281 --> 00:06:07.285 So, even though I knew I was going to do well into six figures in that year, they didn't really look at that at all they took. 00:06:07.584 --> 00:06:13.069 You know, 2019 and 2020 income at the the forecast was was 10 X what that average was. 00:06:13.069 --> 00:06:29.848 They took that average Right and

so it took me. 00:06:29.848 --> 00:06:31.011 So I couldn't get a loan. 00:06:31.011 --> 00:06:37.600 You know the way I wanted for um for another year, cause I had to let that back year kind of time out to get the average up. 00:06:38.223 --> 00:06:59.225 So you know, that's something where, even if you are planning in there, like if, if you're in 2024 right now and you think you got it all together well, if you are planning in there, like if you're in 2024 right now and you think you got it all together, well, if you didn't plan correctly in 2022, which is two years ago, which, when you're running your own business and stuff is like eons ago, oh man, that's what the banks look at, and so that was really frustrating for me. 00:06:59.225 --> 00:07:06.468 Kind of experiencing that was was just like man, you're not looking at the right thing, but that's what they look at. 00:07:06.468 --> 00:07:09.170 That's how banks today, you know they have their checklist. 00:07:09.170 --> 00:07:11.880 It's not about personal relationships anymore. 00:07:11.880 --> 00:07:17.701 It's about do you fit the software's checklist and if you don't, you will not get approved. 00:07:17.961 --> 00:07:19.324 That's interesting. 00:07:19.324 --> 00:07:22.310 So really the software is their underwriter in a way. 00:07:22.812 --> 00:07:26.742 Oh, yeah, software is their underwriter in a way. 00:07:26.742 --> 00:07:27.463 Oh yeah, yeah, I mean they're, they're. 00:07:27.463 --> 00:07:41.125 They're the days of you knowing the banker and the and the local bank and them saying, well, look, your numbers are okay, but we know that you work for so-and-so and we've known your family for a while and you know, we know your customers, so we're going to kind of give you a little bit of wiggle room here. 00:07:41.125 --> 00:07:41.665 That's all. 00:07:41.665 --> 00:07:42.346 That's all. 00:07:42.346 --> 00:07:43.108 You know. 00:07:43.108 --> 00:07:44.550 That doesn't happen anymore. 00:07:44.550 --> 00:07:46.351 It's they send it, they have their. 00:07:46.351 --> 00:07:51.565 This is what we need to see in order to approve it, and if you don't meet that criteria, you do not get approved. 00:07:52.028 --> 00:07:54.656 Wow, scumbags, the bank's the worst. 00:07:54.656 --> 00:07:56.620 And you don't know what their criteria are. 00:07:56.620 --> 00:07:57.802 So you can't really prepare for it. 00:07:57.802 --> 00:08:02.507 And I'm glad you're telling us because I never knew that, like I knew, they asked for the last couple of years. 00:08:02.507 --> 00:08:04.329 Sometimes they asked for three years. 00:08:04.329 --> 00:08:11.081 Yeah, and you know, my coworking space is an example, right, we signed a bunch of leases last year. 00:08:11.081 --> 00:08:14.149 Not a lot of people wanted to be in an office. 00:08:14.149 --> 00:08:16.886 You know, a couple of years ago, during the pandemic, right? 00:08:16.886 --> 00:08:22.507 Yeah, so yeah, the same situation you were through, you were having

that we had, right, we had a great year last year. 00:08:22.507 --> 00:08:24.331 We're going to have a great year this year. 00:08:33.600 --> 00:08:36.427 And you know, passive income, the income is twice as much, actually almost two thirds, what the expenses are. 00:08:36.427 --> 00:08:40.003 If you take out the loan right, that I already have, you know you want to refinance it or something like that. 00:08:40.003 --> 00:08:47.335 And it's tough because you know if I went to go get a loan, they'd be like, well, this and that, and blah, blah, blah. 00:08:47.335 --> 00:08:52.947 And you look at 2019, look at 2020, well, they do 21, 22. 00:08:54.522 --> 00:09:00.188 But same issue, right, and people gotta understand this kind of stuff and have a plan ahead of time. 00:09:00.188 --> 00:09:07.065 That's why, when you go and you start a company, you wanna start working with a competent accountant immediately. 00:09:07.065 --> 00:09:18.913 I would say I mean, you don't want to be in there messing around like, because then when you go to work with a competent accountant they're going to look at your stuff that you did in quickbooks the last two years and it's going to take them eons to go through. 00:09:18.913 --> 00:09:26.520 All the bad accounting you did is, yeah, you know, uh, the the you know barbershop owner who doesn't know what they're doing. 00:09:26.520 --> 00:09:28.865 Right, and it's just going to cost you more money. 00:09:29.927 --> 00:09:37.613 Yeah, and, and you know two things there, right, and I would say working with a competent accountant is a really good step. 00:09:37.613 --> 00:09:51.847 The problem with accountants that I've seen all of my clients that I have have always had accountants before they came to us Right, and the problem with a lot of accountants is the same problem with the bankers how many bankers and accountants own their own business? 00:09:51.847 --> 00:09:53.471 And the answer is not a lot. 00:09:53.471 --> 00:10:10.389 And you are a business owner or you're a business, you're, you're, you're trying to become a business owner and you're talking to people who are giving you advice, who have not done and do not do what you're trying to do, and so, like from the bank, we're trying to get the loan. 00:10:10.480 --> 00:10:21.861 You know, how frustrating it is to talk, to talk to somebody who has no skin in the game, who has never had their own business, and they're telling you hey look, we can't pre-preview and the we is a black box that they don't even know. 00:10:21.861 --> 00:10:50.926 And then on the accountant side, the account you know most accountants don't own and run their own business and don't think entrepreneurially, and so they're structuring your books just to make sure again that they're checking the boxes is was office supplies correctly categorized in office supplies and QuickBooks, and that's great and they keep you organized and there's a there's a science to accounting and you need accountants. 00:10:50.926 --> 00:11:14.616 However, you want to make sure that when you're talking to and getting advice on how do I scale this business, how do I grow this business, that the accountant either thinks entrepreneurially or has more of a business sense and can help you do that than most accountants do, because I've seen a lot of entrepreneurs fall into the trap of they're only talking to their CPA for all things business advice, and I would highly suggest getting a diverse range of opinions, just like if you were in the medical field. 00:11:14.616 --> 00:11:17.610 Right, I consider us business general practitioners. 00:11:17.610 --> 00:11:29.769 We're your daily contact, right, for all the day-to-day stuff you'll come in, you'll get your checkup here's your numbers, all that stuff and then we will tell you hey, you know what you need to see a specialist. 00:11:29.769 --> 00:11:31.020 We're going to. 00:11:31.041 --> 00:11:32.908 You know, your tax situation is really unique. 00:11:32.908 --> 00:11:35.688 Here's a tax accountant that we work with that we're going to pair you up with. 00:11:35.688 --> 00:11:38.528 Hey, you need a certain amount of financial planning. 00:11:38.528 --> 00:11:40.509 Here's a financial planner that we connect you with. 00:11:40.509 --> 00:11:44.092 And you're talking just like in the medical world you would get different opinions. 00:11:44.092 --> 00:11:48.635 You should be getting different opinions on your, on your business and on your business's accounting. 00:11:50.037 --> 00:11:50.576 I love that. 00:11:50.576 --> 00:11:54.106 Well, okay, so this brings us to something, cause maybe I'm using the term incorrectly. 00:11:54.106 --> 00:11:58.402 So what separates your firm from just a regular accounting firm? 00:11:58.402 --> 00:11:58.962 I mean what? 00:11:58.962 --> 00:11:59.605 How do you? 00:11:59.605 --> 00:12:02.831 You're saying we're, we're fractional CFOs. 00:12:02.831 --> 00:12:08.576 Yeah, how does a fractional CFO differ from an accountant for the random person out there? 00:12:08.576 --> 00:12:11.363 The basic person hasn't started a business yet is thinking about it. 00:12:11.363 --> 00:12:12.807 Explain the difference. 00:12:13.188 --> 00:12:13.370 Yeah. 00:12:13.370 --> 00:12:16.009 So again, these are general terms. 00:12:16.009 --> 00:12:35.004 So I'm sure there are accounts out there who are saying I'm a really good CFO and there are definitely accounts who are good CFOs out there, but generally for most small businesses, the accountants that we are interacting with are tax accountants or, um, or you know, like managerial accountants. 00:12:35.004 --> 00:12:43.764 Okay, and what that means is they are, from a tax perspective, they're just filing the taxes for your business, right? 00:12:43.764 --> 00:12:51.860 And that is a different skill than monthly business accounting, which is a different skill than kind of what a CFO needs to have. 00:12:51.860 --> 00:13:07.006 So, again, using the medical

world as an analogy, you wouldn't go to your heart doctor if your foot was hurting you, but that's what most people are doing in the business world by going to their tax accountant for advice on how to grow their business. 00:13:09.110 --> 00:13:09.852 I'll give you another. 00:13:09.952 --> 00:13:12.471 I'll give you a really good example on how you can figure this out. 00:13:12.471 --> 00:13:14.841 We talk about all the time as business owners. 00:13:14.841 --> 00:13:17.708 You're trying to get out of your business instead of in your business. 00:13:17.708 --> 00:13:19.302 Day to day, right On, not in. 00:13:19.302 --> 00:13:27.041 Call your CPA or your accountant anywhere from February to April and see if you can go grab a two-hour lunch with them. 00:13:27.041 --> 00:13:28.623 You won't be able to, why? 00:13:28.623 --> 00:13:29.864 Because they're in their business. 00:13:29.864 --> 00:13:44.519 Most accountants, and even those who own the accounting firm, have not set their business up to work on their business instead of in and you can figure this out just by trying to get a dinner with them or lunch with them during tax season, that's a good point. 00:13:44.539 --> 00:13:45.482 See how stressed out they are. 00:13:46.065 --> 00:13:51.576 Yeah, and so you want to take business advice from somebody who is still working in their business after 30 years? 00:13:51.876 --> 00:13:52.839 That's a great point. 00:13:52.839 --> 00:13:55.144 That is a great great point. 00:13:55.144 --> 00:13:56.250 I never even thought of that. 00:13:56.250 --> 00:13:58.171 No, that that's 100%. 00:13:58.171 --> 00:14:04.620 Somebody has a there's a saying it says never take financial advice from someone broker than you, right, and I was like that's great advice. 00:14:04.620 --> 00:14:15.955 Well, you just dropped another thing Like why would you take business advice on not having to work in your company Right From someone who's still working in their company? 00:14:16.134 --> 00:14:17.238 Yeah, exactly. 00:14:17.238 --> 00:14:19.370 And again, you need different skill sets, right? 00:14:19.370 --> 00:14:25.306 Just like you don't need to go to your heart doctor every month for a checkup, but when you have a heart problem you need that heart doctor, right? 00:14:25.306 --> 00:14:26.912 Your main doctor is not going to do the job. 00:14:26.912 --> 00:14:28.498 There are the tax accountants. 00:14:29.221 --> 00:14:34.091 I refer clients of ours to tax accounts all the time because tax accounting is its own thing. 00:14:34.091 --> 00:14:36.897 It's a totally different game and I'm not an expert in that. 00:14:36.897 --> 00:14:41.748 So I will rely on the experts to help me and my clients navigate the tax field. 00:14:41.748 --> 00:14:45.139 And you know how do we do this that my client wants to do. 00:14:45.139 --> 00:14:49.071 But that's a very different skill than month to month. 00:14:49.071 --> 00:14:54.510 Not only how do I have clean books in an efficient way,

but that's just the past. 00:14:54.510 --> 00:14:55.734 Right, accounting is the past. 00:14:55.734 --> 00:14:56.856 What happened? 00:14:56.856 --> 00:14:58.769 You want to know what happened in a clean way. 00:14:58.769 --> 00:15:01.927 But then where the accountants typically struggle is great. 00:15:01.986 --> 00:15:02.508 Here's the data. 00:15:02.508 --> 00:15:03.390 Now what do I do with it? 00:15:03.390 --> 00:15:04.835 As a business owner, I don't. 00:15:04.835 --> 00:15:05.115 You know. 00:15:05.115 --> 00:15:06.629 I don't know what to do with this data. 00:15:06.629 --> 00:15:11.067 What action items do I need to take over the next month to improve these numbers? 00:15:11.227 --> 00:15:12.610 Again, we'll use the medical analogy. 00:15:12.610 --> 00:15:18.840 A lot of accounts are really good at taking the blood, taking your weight, taking your height, getting your, getting your metrics in. 00:15:18.840 --> 00:15:20.888 But then what happens next? 00:15:20.888 --> 00:15:28.990 Right, instead of just giving that to the patient of hey, you know your cholesterol is up, ok, doc, do I work out more? 00:15:28.990 --> 00:15:29.731 Do I sleep more? 00:15:29.731 --> 00:15:31.075 Do I change my eating habits? 00:15:31.075 --> 00:15:32.118 Do I take more tests? 00:15:32.118 --> 00:15:36.326 What do I? 00:15:36.326 --> 00:15:37.129 What am I looking for next month? 00:15:37.129 --> 00:15:37.250 Right? 00:15:37.250 --> 00:15:39.538 And so when you're working with a good CFO or a good controller, that's what you're getting. 00:15:40.000 --> 00:15:46.027 We're taking your reports, we're making sure they're clean, which most businesses are not, but we're making sure they're clean and accurate. 00:15:46.027 --> 00:15:50.057 But then the important part is the value you get from those reports. 00:15:50.057 --> 00:16:00.412 Adam, your business did $2 million in profit last year, but you paid a million and a half through debt, so you have $500,000 in free cashflow. 00:16:00.412 --> 00:16:01.975 What are we doing with that? 00:16:01.975 --> 00:16:04.149 Let's look at four different investment opportunities. 00:16:04.149 --> 00:16:10.866 Let's run the ROI on each of those and then let's put a budget and projection together to say how do we get a million dollars in free cashflow next year? 00:16:12.149 --> 00:16:16.397 That's the value, or it's hey, you're losing money, and here's why. 00:16:16.397 --> 00:16:19.811 And when we compare you to your competitors, here's what they're doing and you're not. 00:16:19.811 --> 00:16:25.635 And if you do this, here's what we think what's going to happen, and so we recommend taking these three action items over the next month. 00:16:25.635 --> 00:16:27.208 In a month we're going to talk. 00:16:27.208 --> 00:16:28.312 Did you do those action items? 00:16:28.312 --> 00:16:29.664 Did we see the change we wanted to see? 00:16:29.664 --> 00:16:30.888 What do we do the following month? 00:16:30.888 --> 00:16:37.991 That's what a good cfo and financial partner in your business does not just hey, we have clean accounting for you. 00:16:37.991 --> 00:16:39.118 Good luck, we'll see you in a month. 00:16:39.660 --> 00:16:41.206 Yeah, I mean it's kind of like a business partner. 00:16:41.206 --> 00:16:48.167 I mean you're the CFO, which is part of the business generally, and would you know the CEO is going to listen to their recommendations. 00:16:48.167 --> 00:16:50.607 So it's like, hey, there's just not enough revenue. 00:16:50.607 --> 00:16:52.249 They want to make some sales. 00:16:52.249 --> 00:16:56.951 I mean that's usually the problem not enough revenue and also cash flow. 00:16:56.951 --> 00:17:01.413 I mean you know you mentioned on your website too, and everybody deals with it. 00:17:02.634 --> 00:17:04.476 I don't think a lot of people understand. 00:17:04.476 --> 00:17:09.499 You know, maybe they have a good year or maybe have a good month or something, but that bad month can bite you in the butt. 00:17:09.499 --> 00:17:13.280 I mean, look what's going on right now with a lot of businesses service businesses. 00:17:13.280 --> 00:17:16.903 You know luxury type businesses, a lot of businesses, service businesses. 00:17:16.903 --> 00:17:18.304 You know luxury type businesses. 00:17:18.304 --> 00:17:22.327 Those are, you know, things that aren't necessary. 00:17:22.327 --> 00:17:23.010 People are cutting back right now. 00:17:23.010 --> 00:17:23.993 Even the wealthy they're cutting back. 00:17:23.993 --> 00:17:28.087 So you might've been living high on the hog and you're really expensive strip mall in a nice neighborhood and all that. 00:17:28.087 --> 00:17:31.057 Well, people aren't coming into the door like they were two years ago. 00:17:31.057 --> 00:17:33.531 So now you've got to worry. 00:17:33.531 --> 00:17:38.126 You know, can I pay the rent, like, do you have a cashflow solution? 00:17:38.126 --> 00:17:40.310 And what do you normally recommend to people? 00:17:42.134 --> 00:17:49.226 The first thing is education, and so this was another thing that I didn't see accountants or business professionals helping business owners with. 00:17:49.226 --> 00:17:50.950 Again, teach a man to fish. 00:17:50.950 --> 00:17:52.795 Don't just catch the fish and give it to him, right. 00:17:52.795 --> 00:17:55.243 And so everybody who's going into business, the language of business, is accounting. 00:17:55.243 --> 00:17:57.494 You don't just catch the fish and give it to them, right, and so everybody who's going into business, the language of business, is accounting. 00:17:57.494 --> 00:17:59.526 You don't need to have a master's degree in accounting. 00:17:59.526 --> 00:18:01.352 You don't need to do accounting 24 seven. 00:18:01.352 --> 00:18:08.645 You don't even need to do your own business as accounting, but you should understand the basic principles of accounting, because it's the language of business. 00:18:08.645 --> 00:18:14.997 For trying to get into business,

you should know the basic understanding of how accounting works and what it is. 00:18:15.758 --> 00:18:18.553 And so when we talk free cash flow, we don't. 00:18:18.553 --> 00:18:18.913 We're not. 00:18:18.913 --> 00:18:20.079 We're not talking about revenue. 00:18:20.079 --> 00:18:21.847 We're not talking about money coming in the door. 00:18:21.847 --> 00:18:23.737 We're not talking about profit, right? 00:18:23.958 --> 00:18:28.396 There's a lot of profitable companies out there that lose cash on a monthly basis. 00:18:28.396 --> 00:18:33.030 If you don't know how that's possible and you've had an accountant, they've done you a disservice. 00:18:33.030 --> 00:18:39.011 And if you are wondering why that's possible, it's well, because stuff happens. 00:18:39.011 --> 00:18:42.165 Cash is spent after the income statement exists on the balance sheet. 00:18:42.165 --> 00:18:43.068 You have to look at both. 00:18:43.068 --> 00:18:48.171 If you're not looking at your P&L and your balance sheet and your cash flow statement at least quarterly. 00:18:48.612 --> 00:18:55.219 If the business is more serious than you know, monthly and weekly I can have a million dollars in profit. 00:18:55.219 --> 00:18:59.979 If I spend a million and a half on my debt servicing, I'm losing $500,000 of cash. 00:18:59.979 --> 00:19:11.848 And the kicker is you don't get taxed on cash, you get taxed on income, and so if you have a million dollars of income and you spent it all on debt, the government will still come to you and say hey, we, you owe us three to 400 grand. 00:19:11.848 --> 00:19:16.948 So the first thing we do is does the business owner understand that you understand? 00:19:16.948 --> 00:19:25.489 Do we understand and again, we're not going to go super detailed, but do you understand the basics of financial statements and the key indicators to look for and why cash is not revenue or profit? 00:19:25.489 --> 00:19:31.448 And then, once that's once that's you know, talked about and discussed and understood, it's okay. 00:19:31.448 --> 00:19:32.852 What is your free cashflow right? 00:19:32.852 --> 00:19:34.075 Where's the benchmark? 00:19:34.075 --> 00:19:38.548 I get so frustrated with consultants and coaches who give advice and never look at the financials. 00:19:38.548 --> 00:19:44.488 I don't know if you've experienced that, but it's always that's always so interesting to me. 00:19:44.808 --> 00:19:50.271 Yeah, wild yeah, and so um, and so it's it's education, it's where are we now? 00:19:50.271 --> 00:19:53.414 And then it's walking through a plan on how do we improve that right? 00:19:53.414 --> 00:19:57.125 And building a financial base to weather the storm. 00:19:57.125 --> 00:19:58.651 And positive free cash flow. 00:19:58.651 --> 00:20:09.175 Positive free cash flow each month is so important because it allows you to reduce how much money you need to keep aside for emergencies, right? 00:20:09.175 --> 00:20:24.480 If you know fairly certainly that you're

going to have positive free cash flow, even if it's a dollar, if you know you're going to have a dollar more in July than you will in June, you need to keep less money aside because you know it's going to be a dollar more, not $2,000 less. 00:20:25.262 --> 00:20:42.486 The companies that go up and down are the companies where the business owners are scared and keep 3x what they need to in the bank, and so the problem with doing that if you have $200,000 in the bank or $50,000 in the bank and you only needed 10, again, typically most small businesses are not C-corps, right? 00:20:42.506 --> 00:20:59.295 So they're flow pass-through entities, and so what that means is, if you have $50,000 in your business bank account by the end of the year, you've paid tax on all of that income, but the cash is still in the business bank account, it still doesn't hit you as the business owner, even though you've paid tax on that money. 00:20:59.295 --> 00:21:05.894 And so and you're keeping that money there because you're going up and down cashflow wise each and every month. 00:21:05.894 --> 00:21:15.026 And so if you can get that amount that you're keeping to a normal, healthy amount, you can take that cash that you've already paid tax on and either invest it in your business or you take it out. 00:21:15.026 --> 00:21:20.817 You can take that cash that you've already paid tax on and either invest it in your business or you take it out, build your personal financial base and you invest it personally. 00:21:21.805 --> 00:21:26.217 Wow, yeah, I mean you already, every day you don't invest that money, I mean you're losing. 00:21:26.664 --> 00:21:27.771 I said, if it's just in the bank. 00:21:28.214 --> 00:21:33.953 You're not making much of anything on it unless you got it in like some kind of treasury account or something that's paying a decent amount right now. 00:21:33.953 --> 00:21:35.376 But most people aren't going to do that. 00:21:35.376 --> 00:21:43.086 Now we're talking about cash flow. 00:21:43.086 --> 00:21:43.607 We're talking about cash. 00:21:43.607 --> 00:21:46.094 I don't think a lot of people even understand on the personal side of things. 00:21:46.094 --> 00:21:48.788 When you're a business owner, a lot of times you don't live above your means. 00:21:48.788 --> 00:21:58.146 I don't know too many business owners, especially ones that are two or three years in their business, that as soon as they start the business they have a good month or they have a good year or something. 00:21:58.146 --> 00:21:59.673 They go out and they buy a bunch of stuff. 00:22:00.215 --> 00:22:00.497 Right. 00:22:00.979 --> 00:22:02.827 I just I see people living below their means. 00:22:02.827 --> 00:22:11.751 You know being smart about how they spend their money, but every once in a while you'll get a business owner that you know they want to live out in the nice neighborhood, they want to get a nice car. 00:22:11.751 --> 00:22:21.795 They kind of their personal desires get in the way of the ups and downs of running a business and you just can't let that happen either. 00:22:22.785 --> 00:22:35.115 No, and in that vein, one of the most important things that we do with all of our clients when we start working with them, we separate the business from the personal and I work with. 00:22:35.115 --> 00:22:45.179 I work with with clients often when we start and the business is paying for personal expenses right, and so if somebody else were to buy the business, would they spend that same expense, right? 00:22:45.179 --> 00:22:56.576 If the answer is no, then it really shouldn't be coming out of the business, because you want to get true and real business metrics, but then also you want to have the business take care of itself and the personal take care of itself. 00:22:56.576 --> 00:23:03.471 And if you need $5,000 a month to live personally, great, the business can cut a check for $5,000, $6,000 a month. 00:23:03.471 --> 00:23:19.880 And then if the business grows and sustains and can pay you more, then, just as if you were an employee of your own business, the business can give you a raise or an extra dividend check a year and then, when that's consistent, then you can slowly increase, you know, your cost of living. 00:23:20.685 --> 00:23:25.439 Where I see people get in trouble is they increase their cost of living personally through the business. 00:23:25.439 --> 00:23:25.598 Right? 00:23:25.598 --> 00:23:27.152 So the business buys a nicer car. 00:23:27.152 --> 00:23:29.231 The business starts paying for the cell phones. 00:23:29.231 --> 00:23:35.832 The business has more stuff that's personal, and so then it never goes to the person. 00:23:35.832 --> 00:23:44.132 Right, you've intermingled and then, when stuff starts to get shaky, you now have to either put money back or you're like, wow, where's all this money coming from? 00:23:44.132 --> 00:23:45.156 I don't know where it is. 00:23:45.156 --> 00:23:47.826 I feel like I'm never being able to pay the bills. 00:23:47.826 --> 00:23:54.709 It's because you didn't silo, silo consistently and scale things as if you were an employee of your own business. 00:23:54.709 --> 00:23:56.736 The business can afford to give you a raise. 00:23:56.736 --> 00:23:57.818 The business gives you a raise. 00:23:57.818 --> 00:24:01.509 If it can't, you know that you're getting paid consistently and you're able to pay your bills. 00:24:02.593 --> 00:24:03.213 That's right. 00:24:03.414 --> 00:24:09.026 And when you have to pay your, when you have to give yourself a raise, you would only do that if the business can truly afford it. 00:24:09.026 --> 00:24:15.275 The problem with paying for stuff right out of the business is you think I just got this100,000 contract, I'm rich, let me go buy this new car. 00:24:15.275 --> 00:24:18.920 Well, that's on revenue and that's not a continuous thing, right? 00:24:18.920 --> 00:24:24.635 And so now you just loaded up the business with more expenses

and now it can't give you the raise. 00:24:24.635 --> 00:24:30.626 But if you said to yourself ahead of time if could I cut myself a hundred thousand dollar check right now, you wouldn't because you can't. 00:24:30.626 --> 00:24:34.352 And so if you can't do it, then you can't do it in the future. 00:24:34.352 --> 00:24:37.978 You're just saving yourself the pain of the decision in the middle there. 00:24:38.798 --> 00:24:39.200 That's right. 00:24:39.200 --> 00:24:39.720 That's right. 00:24:39.720 --> 00:24:46.155 Now people are probably listening to this and they're wondering man, this sounds like he's doing a lot of work and I'm, you know, a young business or whatever. 00:24:46.155 --> 00:24:48.192 What kind of money do they need to have? 00:24:48.192 --> 00:24:48.707 Or is there? 00:24:48.707 --> 00:24:49.570 Is there a target? 00:24:49.570 --> 00:24:51.327 I'm sure there is a target that you have. 00:24:51.327 --> 00:24:55.096 Do they have to be a new business or can they be a new business? 00:24:55.096 --> 00:24:56.838 Do they have to be a three, four-year-old business? 00:24:56.838 --> 00:24:59.123 Do they have to be doing a half million in revenue? 00:24:59.123 --> 00:25:01.048 Like, who are you looking to work with? 00:25:02.152 --> 00:25:06.605 I mean our typical clients are, are, uh, doing, you know, seven figures in revenue. 00:25:06.605 --> 00:25:09.608 Um, our, our largest clients are doing nine. 00:25:09.608 --> 00:25:25.258 Um, but I talked to anybody in the business world and, um, um, I'm happy to take a free call, free, you know, I'll review your financials free, give you some advice, like I love seeing entrepreneurs succeed and I love seeing business people, you know, kick some butt. 00:25:25.258 --> 00:25:40.527 And so I love talking to people in the business world and I've helped a lot of businesses who are just starting and then, a couple of years later, they now have the revenue and the infrastructure where they say, hey, now we can actually work together kind of on a on a consistent basis. 00:25:40.688 --> 00:25:51.909 And so if you're, if you're looking to see are my financials correct, how to read a P and L or balance sheet, or how do I think about personal finance and business finance, or, you know, is my accountant doing the right thing? 00:25:51.909 --> 00:25:56.395 Shoot me an email, we'll book a quick, a 30 minute zoom, I'll look at your financials, I'll tell you. 00:25:56.395 --> 00:25:58.759 And then you know, go kick some butt and come back. 00:25:58.759 --> 00:26:02.695 Come back a couple of years later and say, hey, now we can, now we can work in a bigger engagement. 00:26:03.224 --> 00:26:06.348 Yeah, here's how you're going to make money so that I, you can be a client of mine here. 00:26:06.348 --> 00:26:07.390 Let me help you out a little bit. 00:26:07.390 --> 00:26:08.431 Exactly, you know what? 00:26:08.431 --> 00:26:17.165 Like I say, we do good work for good people right. 00:26:17.185 --> 00:26:31.967 So

all entrepreneurs and business owners are the best group of people that I've met, and so when you do good work for them, even if it's for free, because they're just starting out, they may know a business owner who's 10 X where they are and they say, hey, look, they just helped me out. 00:26:31.967 --> 00:26:35.633 You should, you should call them up, right, that's how most of our businesses is. 00:26:35.633 --> 00:26:43.753 Uh, is gotten this through referral and then, um, you know, it's just the best sort of marketing is a really good product, right? 00:26:43.753 --> 00:26:48.605 And so people remember hey, that advice you gave me a couple of years ago worked and you know, now I'm ready to work with you. 00:26:48.605 --> 00:26:52.972 But we also, you know, you mentioned earlier being a partner in people's businesses. 00:26:53.053 --> 00:26:55.115 This is why we don't have any sort of contracts. 00:26:55.115 --> 00:26:57.259 We're month to month with all of our clients. 00:26:57.259 --> 00:27:03.534 If we ever don't provide the value we say we're going to each and every month, a business can leave at any time. 00:27:03.534 --> 00:27:07.654 We want to have to earn our keep month in and month out. 00:27:07.654 --> 00:27:20.969 We want to make sure we're incentivized correctly in the structures there to help business owners, not drag them with a six month contract of, hey, you're going to pay us this and here's the services we're going to do is you're going to pay us this on a monthly basis, and here's the problems we're going to solve. 00:27:20.969 --> 00:27:24.567 And if we don't solve it, then go find somebody who can, because we don't want to be a burden to you. 00:27:25.067 --> 00:27:26.528 Well, and see, this is one thing I also learned. 00:27:26.528 --> 00:27:37.082 Running businesses is, uh, that's actually good for the customer, right, so your customers are benefiting, but it's actually hurting you because if you ever wanted to sell your firm, you don't have contracts in place. 00:27:37.082 --> 00:27:43.615 But it's like, look, that's part of our businesses to not treat people like that, it's not to lock people into something that they don't think they're getting value out of. 00:27:43.964 --> 00:27:53.460 If we're not delivering value, then don't use us anymore, I mean, it's that simple and you know you're kind of taking an L to benefit your customers and I don't think people understand that. 00:27:54.109 --> 00:27:59.021 Yeah, yeah, and and and the risk is there. 00:27:59.021 --> 00:28:11.422 The counter to that is because the relationships are much more holistic and, from a truly supportive way, they're actually much tighter and it's a stronger relationship than you know we would have had if we didn't kind of interact that way. 00:28:11.422 --> 00:28:21.678 And so it's a it's a longer term approach where short term it might it might hurt us, but long-term it will win out, because when you treat people like humans, good, you know good things will come back to you. 00:28:22.259 --> 00:28:22.780 And that's right. 00:28:22.780 --> 00:28:27.326 Yeah, and I mean people are afraid that their business isn't going to be open next month, regardless. 00:28:27.326 --> 00:28:33.740 Like oh, I got this year long contract, I have tied in with uh, with these guys and I got to worry about that. 00:28:33.740 --> 00:28:35.423 Or it's just as bad as having a lease. 00:28:35.423 --> 00:28:38.082 Like you got a lease you want to get out of and you can't. 00:28:38.082 --> 00:28:41.856 Maybe you want to go into a better space or whatever and you can't get out of that lease. 00:28:41.856 --> 00:28:43.470 You're going to end up for another year or two years. 00:28:43.470 --> 00:28:44.290 I mean that's. 00:28:44.290 --> 00:28:46.913 That's rough when you get into those kinds of positions. 00:28:46.913 --> 00:28:49.596 But I mean it sounds like you're you're treating people right. 00:28:49.596 --> 00:28:50.538 So what kind of? 00:28:50.538 --> 00:28:53.319 I don't know if you want to talk about costs or is there a percentage? 00:28:53.319 --> 00:28:56.824 Or like how does that kind of work with a fractional CFO? 00:28:56.824 --> 00:28:59.646 Cause you hire a full-time CFO, you're paying crazy money. 00:28:59.646 --> 00:29:01.594 That's why fractional CFOs exist. 00:29:02.076 --> 00:29:05.593 Yeah, you know, I mean, it really depends on kind of where they are in there. 00:29:05.593 --> 00:29:10.757 You know, a hundred million dollar company is going to have a totally different you know structure with us than somebody who's just kind of starting out. 00:29:10.757 --> 00:29:16.212 A typical engagement will look something like you know, we have a free coffee intro session. 00:29:16.212 --> 00:29:22.634 Then, you know, we will send you an onboarding retainer and that's just to make sure we're protected on time. 00:29:22.634 --> 00:29:31.992 We get paid before we, you know, put a lot of time into it and the client knows okay, look, I'll put a few thousand dollars into this because everybody wants clean financials and you mentioned this earlier. 00:29:31.992 --> 00:29:40.896 But then when it becomes, hey, you have three years of bad data and it's going to cost us X amount to clean up, then you've got to make this decision can you afford it and do you really want to do that? 00:29:40.896 --> 00:30:02.487 And so by having that retainer, it allows both sides to say all right, we can step our toes in the water, we can see the lay of the land and then we can kind of better understand what are we really getting into and do we want that Once we work through the onboarding and we've cleaned the financials to a place where we can work month to month, then we have a fixed monthly cost that doesn't really increase unless the scope of work changes dramatically. 00:30:04.270 --> 00:30:06.732 And it's not based on time, it's not based on how many times you call me. 00:30:06.732 --> 00:30:14.019 You can call me, text me,

email me, work with the team as often as you want to provide the value that we're telling you we're going to provide, as often as you want to provide the value that we're telling you we're going to provide. 00:30:14.019 --> 00:30:17.862 And you know a typical cost for a small business. 00:30:17.862 --> 00:30:23.267 You know that on the smaller side of ours is, you know, between one and five thousand dollars a month. 00:30:23.267 --> 00:30:25.851 Oh, wow, ok, yeah. 00:30:26.291 --> 00:30:28.057 Yeah, do you ever work with companies like? 00:30:28.057 --> 00:30:38.192 So I'll just throw myself out as an example I own an ad agency, right yeah, I also. 00:30:38.192 --> 00:30:47.257 The ad agency is inside of my co-working building that I own, which has its own set of revenue, and I've got rental properties and I've got, you know, an STR down in Miami and I do Turo. 00:30:47.257 --> 00:30:58.276 I rent my car out on the side, you know, and so you got all these things and they all separate bank accounts, right, yeah, but I file everything kind of like you know me, and I think a lot of people do that too. 00:30:58.276 --> 00:31:05.089 So do you work with, like, if you're looking, say you know, you're like, oh man, I only really work with people that are over this amount of money. 00:31:05.089 --> 00:31:08.877 Would you take on like four or five? 00:31:09.439 --> 00:31:19.875 So you're actually a typical client in that case because, uh yeah, side hustles and a lot of real estate, a lot of real estate, right? 00:31:19.875 --> 00:31:25.935 And so the reason of this is because it gets complicated or harder to keep organized quicker than you know. 00:31:25.935 --> 00:31:33.690 If you're running just like a general store, you know, I mean, I'm happy to talk with you, show your financials, but there's just, there's not a lot of complexity there, you know. 00:31:33.690 --> 00:31:38.540 It kind of is just like, well, hey, spend less here, make some money here, you know, good luck. 00:31:38.540 --> 00:31:43.260 But when you have enough either size or complexity, that's where we can really provide a lot of value. 00:31:43.260 --> 00:31:49.223 And so we have 35 clients that we work with on a monthly basis. 00:31:49.223 --> 00:31:54.382 Of those 35 clients, there's 250 businesses underneath of them, right? 00:31:54.382 --> 00:32:12.051 So that that that kind of will show you that most of our clients are, you know we're talking have, you know, a dozen plus entities and the other, you know, kind of where we got started is there's not a lot of help out there for those people, right? 00:32:12.051 --> 00:32:22.901 So if you have a Merrill Lynch account, let's say, or a TD account or something like that, they can give you in a snapshot here's your net worth, here's your holdings, everything's on a nice clear presentation bada bing, bada boom. 00:32:22.901 --> 00:32:27.058 If you're in the private world, there is no one giving you. 00:32:27.058 --> 00:32:28.951 Hey, here's

a snapshot of your portfolio. 00:32:29.471 --> 00:32:31.096 And so that's what we started to do. 00:32:31.096 --> 00:32:37.339 Is we said okay, adam has these five businesses, we're going to make sure we have the accounting for those five businesses. 00:32:37.339 --> 00:32:40.472 We have software that we use that will pull the accounting from all those five businesses. 00:32:40.472 --> 00:32:52.272 Put that into the software that we use, creates reports based on your entire portfolio and it will give you a dashboard to see in Adam's portfolio, just like your Merrill Lynch would. 00:32:52.272 --> 00:32:53.836 How's your portfolio doing? 00:32:53.836 --> 00:32:55.398 What's your operational performance? 00:32:55.398 --> 00:32:56.621 We can go buy business. 00:32:56.621 --> 00:32:58.403 We can go whole portfolio in general. 00:32:58.403 --> 00:33:01.957 Right, is your whole portfolio cash flowing to you on a monthly basis? 00:33:01.957 --> 00:33:08.387 But then dive deeper Is each entity cash flowing to you on a monthly basis and, if so, what's the best return? 00:33:08.387 --> 00:33:10.071 Because that's where you can put more money in next time. 00:33:11.134 --> 00:33:14.380 And so, like damn Adam, why do you drink so much coffee? 00:33:14.380 --> 00:33:17.711 Like you should stop going to Starbucks, Right. 00:33:17.932 --> 00:33:22.061 Right, or or hey, this real estate did three times better than this one. 00:33:22.061 --> 00:33:23.351 Why, right? 00:33:23.351 --> 00:33:24.113 But when? 00:33:24.113 --> 00:33:24.974 What happens when? 00:33:24.974 --> 00:33:25.175 When? 00:33:25.175 --> 00:33:35.358 When business owners have that many side hustles or that many entities, money flows all around and they just think, well, it's investing it, you know moving, somehow it's making me money, but it may not be. 00:33:35.358 --> 00:33:36.250 You don't really know that. 00:33:36.250 --> 00:33:46.586 And so by actually looking at each one and making sure that we're we truly understand how the portfolio and the specific businesses are doing, you can then make better decisions for what to do next. 00:33:47.391 --> 00:33:48.554 Yeah, totally. 00:33:48.554 --> 00:33:49.676 Oh, I love it, man. 00:33:49.676 --> 00:33:51.561 That's, that was a big question I had for you. 00:33:51.561 --> 00:33:56.154 And how do people reach out to you? 00:33:56.154 --> 00:33:56.759 I mean, you've got the website. 00:33:56.759 --> 00:33:57.060 I mean, are you? 00:33:57.060 --> 00:33:57.463 You're on LinkedIn? 00:33:57.463 --> 00:33:58.369 I'm sure people can kind of hit you up there. 00:33:58.369 --> 00:34:00.855 Yeah, your background and things like that. 00:34:01.376 --> 00:34:02.820 Yeah, you can read on our website. 00:34:02.820 --> 00:34:07.349 We have a bunch of different case studies and blogs on like exactly what we've done with businesses before. 00:34:07.349 --> 00:34:11.735 So in your example, you can actually go see how we've done and we lay it all out right? 00:34:11.735 --> 00:34:22.039 We want people to be as successful as possible, and so you can read a ton about us on our website, wwwfoxandpartnerscom, and then you can just search for me, hurley Fox, on LinkedIn. 00:34:22.039 --> 00:34:25.514 Thankfully there's not that many of them, and so I'll come right up. 00:34:25.514 --> 00:34:28.458 Those are the two biggest ways to find me. 00:34:28.751 --> 00:34:38.177 And then just kind of one last word I would say to your audience who is maybe they're working a full-time job and they're looking and they're trying to start a business on the side, right? 00:34:38.177 --> 00:34:46.619 So I would say first, if you are not personally budgeting and personally tracking your net worth each month, start there. 00:34:46.619 --> 00:35:01.461 Use your personal financials to give you a really good 101 of finance, because it's not that much different than business and that will teach you the basics for the business when you get into. 00:35:01.461 --> 00:35:05.494 So, essentially, take care of your own house first and then you can expand, right? 00:35:05.494 --> 00:35:10.356 So if you're not personally budgeting, how do you really know what you want from the business, what you need from the business. 00:35:10.356 --> 00:35:13.775 How do you know how much money you need to set aside to give you six months of emergency fund? 00:35:13.775 --> 00:35:31.221 And so make sure you have a personal budget, make sure you have a personal financial plan with your family, make sure your personal house is secure by that I mean very little debt, good emergency fund and good cash flow and then expand out to the business and the side hustle. 00:35:31.221 --> 00:35:32.795 Track the same metrics there. 00:35:32.994 --> 00:35:33.898 What's my free cash flow? 00:35:33.898 --> 00:35:37.820 What's the business's accounts doing on the balance sheet? 00:35:37.820 --> 00:35:39.527 A net worth statement. 00:35:39.527 --> 00:35:41.853 Your personal net worth statement is a balance sheet. 00:35:41.853 --> 00:35:44.117 Your personal budget is the P&L. 00:35:44.117 --> 00:35:51.010 And so if you think about those two things and you kind of master on the personal side, that gives you a really good first step into the business world. 00:35:51.010 --> 00:35:52.974 And then you start that with your side hustle. 00:35:52.974 --> 00:35:54.818 That will impact your personal financials. 00:35:54.818 --> 00:36:08.440 And then, once you get to a place where you can say either the business can run on its own or it can support me fully, or hey, you know I've reached my personal goals and so now I can jump off in a more secure place, that's a really good first step. 00:36:08.440 --> 00:36:11.675 You know, I think a lot of people want to jump into the fun stuff of the businesses. 00:36:11.675 --> 00:36:12.458 Let me make a website. 00:36:12.458 --> 00:36:13.760 Get cards, go get sales. 00:36:13.760 --> 00:36:16.592 Well, take care of your. 00:36:16.592 -->

00:36:20.112 Take care of the boring stuff on the personal side first, and you'll just be much, much better off. 00:36:20.855 --> 00:36:22.201 I've never heard it explained like that. 00:36:22.201 --> 00:36:26.875 That does make sense about you know your balance sheet versus your P and L, right? 00:36:26.875 --> 00:36:30.871 Like those things being like yeah, your net worth is your balance sheet. 00:36:30.871 --> 00:36:32.173 What, how much money do you have? 00:36:32.173 --> 00:36:33.155 How many assets do you have? 00:36:33.155 --> 00:36:35.900 And then, on the other side of that, how much debt do you have? 00:36:35.900 --> 00:36:37.181 Right, that's a balance sheet. 00:36:37.181 --> 00:36:39.556 And then your PNL, obviously like, what do you? 00:36:39.556 --> 00:36:42.476 You know what's going on every month, what's happening, like, how much money are you spending? 00:36:42.476 --> 00:36:45.090 And, uh, you know what do you got in the bank and things like that. 00:36:45.090 --> 00:36:47.373 So, yeah, that's a really good way to explain it. 00:36:47.373 --> 00:36:59.114 And using your personal finances books or anything basic accounting for business people or anything that a course or something on YouTube maybe they should look up. 00:36:59.114 --> 00:37:02.262 There's a lot of YouTube's a really good place to start. 00:37:02.262 --> 00:37:04.757 You've got some case studies and things on your site. 00:37:05.190 --> 00:37:06.215 Yeah, we've got some case to. 00:37:06.215 --> 00:37:08.061 I mean, you know, I think it's hard. 00:37:08.061 --> 00:37:21.139 On the book front, there's not a lot of good technical accounting books that, like the art you know, the audience would want to read, I'm sure, and so, and so you know a couple good ones. 00:37:21.139 --> 00:37:39.923 You know, like profit first is a good book that is not super technical in the accounting side but kind of hints at some accounting concepts, the biggest one being, you know, focus on profit and cashflow over revenue, and so that's one that's readable, readable that does discuss some accounting concepts. 00:37:39.923 --> 00:37:46.288 But I would say the most effective way to learn would be take care of your personal financials first. 00:37:46.288 --> 00:37:46.989 That's it. 00:37:46.989 --> 00:37:48.875 Get a personal budget in place. 00:37:48.875 --> 00:37:51.355 That's a P&L, get a personal net worth. 00:37:51.355 --> 00:37:59.574 If you're starting a business and you don't know how much personal debt you have and what you're personally paying, what are all your loans, interest rates, right. 00:37:59.574 --> 00:38:02.621 If you don't know that stuff, don't kind of expand before you know that. 00:38:02.621 --> 00:38:11.375 And what's why I like to use that as a good first step or a good kind of teaching mechanism, is it relates to them very deeply, right? 00:38:11.375 --> 00:38:15.380 If I'm talking about general business income statements, everyone here is going to fall asleep. 00:38:15.380 --> 00:38:19.045 But if I'm talking about your personal budget or net worth, you're interested. 00:38:19.045 --> 00:38:27.882 Oh man, I have a 15% loan and my student loans are 10% and I have a credit card loan of 22%. 00:38:27.882 --> 00:38:28.304 My auto loan is six. 00:38:28.304 --> 00:38:32.114 I never really knew that before, but seeing that okay, I now kind of know which ones I want to pay for first, or whoa. 00:38:32.114 --> 00:38:34.757 This is my monthly payment and how much is going to interest. 00:38:34.757 --> 00:38:35.818 That's a lot. 00:38:35.818 --> 00:38:39.384 Or you run the personal budget A lot of people you know. 00:38:39.443 --> 00:38:44.552 An exercise I like to do with people is, before we even look at any bank statements or anything, what do you think you spend in food a month? 00:38:44.552 --> 00:38:45.956 People say 500 bucks. 00:38:45.956 --> 00:38:50.943 Then you look at the budget, it's like two grand, right, and so that $1,500 is where the money is going. 00:38:50.943 --> 00:38:52.449 When you're saying I make all this money is where the money is going. 00:38:52.449 --> 00:38:56.074 When you're saying, I make all this money, but how do I not have cash in the bank Because of stuff like that? 00:38:56.074 --> 00:38:59.496 And if you have a personal budget, you will know where your personal money's going. 00:39:00.650 --> 00:39:02.237 Same thing will happen in the business world. 00:39:02.237 --> 00:39:03.795 I have all this revenue. 00:39:03.795 --> 00:39:04.855 Why don't I have money in the bank? 00:39:04.855 --> 00:39:06.757 Look at the P&L, that'll tell you. 00:39:06.757 --> 00:39:08.492 Look at the balance sheet and the cashflow statement. 00:39:08.492 --> 00:39:13.201 That'll tell you, and so you know it's it. 00:39:13.201 --> 00:39:17.807 That's a really good first step and that's how I would recommend learning kind of accounting is. 00:39:17.807 --> 00:39:20.496 Do your own personal budget and net worth statement first. 00:39:20.496 --> 00:39:34.289 If you're still interested and you're not asleep yet, then start just searching for some terms of you know why cash doesn't equal profit, why you know cash, how to how to understand cashflow, how to read a profit and loss right. 00:39:34.289 --> 00:39:37.918 What's the difference between gross margin and profit margin Things like that. 00:39:37.918 --> 00:39:38.820 What's EBITDA? 00:39:39.240 --> 00:39:40.623 Yeah, ebitda, nobody knows. 00:39:40.623 --> 00:39:41.592 They think it's gross profit. 00:39:41.592 --> 00:39:43.978 It's like EBITDA mean, I don't understand it. 00:39:43.978 --> 00:39:51.112 So, yeah, it's just basic terms that people throw around in the business world that you have to understand and you have to know where those come from. 00:39:51.112 --> 00:40:03.391 And working with a guy like Hurley here, we'll, uh we'll help you out a lot and you'll get those nice little, uh clean reports at the end of the month, the end of the quarter, the end of the year, uh, that help you make sense of what's going on. 00:40:03.411 --> 00:40:06.197 Well, hurley man, we really appreciate you being on today. 00:40:06.197 --> 00:40:13.318 And again, guys go to fox and partnerscom and make sure you reach out to Hurley. 00:40:13.318 --> 00:40:14.400 Thanks a lot, hurley. 00:40:14.400 --> 00:40:15.443 Thanks so much for having me. 00:40:15.443 --> 00:40:19.239 Adam, thanks for joining us on this week's episode of Side Hustle City. 00:40:19.239 --> 00:40:21.056 Well, you've heard from our guests. 00:40:21.056 --> 00:40:22.635 Now let's hear from you. 00:40:22.635 --> 00:40:25.577 Join our community on Facebook Side Hustle City. 00:40:25.577 --> 00:40:35.242 It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. 00:40:35.242 --> 00:40:38.559 We'll see you there and we'll see you next week on the show. 00:40:38.559 --> 00:40:40.670 Thank you, bye.