About the guests:
Check out Elizabeth’s website
Check out Amanda’s website
If you really want to dig into write-offs, I’d also love for you to join the Tax Challenge happening next month to help you get all your docs ready for tax season. It’s totally free! And you’ll get my free small biz tax deduction guide.
Hello and welcome to episode 23 of the unfuck your best podcast. As always. My name is Braden, your host. Welcome today. I'm very excited because I'm doing my first uh, cash flow panel discussion. We're going to workshop a better title for these episodes. Uh, but the idea of today's episode is I brought on two other small business owners who have implemented the profit first system into their business to get their cashflow cashflowing someone to talk to them about how that's worked out. But before we get started, I want to remind you all that I have a tax challenge of four day tax challenge coming up. We will be starting on a Monday, January 13 you can sign up between now and [email protected] forward slash tax challenge and you'll get all the details on that on the website at unfuck, your biz.com so just to give you guys a little bit of an intro before we get started, I made a post in the gold Digger Facebook group.
If you guys aren't in that, you should go join. It's awesome. And chatted with a few different business owners who said that they've implemented profit first and their business. So I thought it would be really cool if I brought them on and we actually talked about how they implemented it, what their business was like before, what it's been like after. And also I want to let all of the listeners know that I did record an introduction podcast episode on this topic back in episode number five. So if you haven't listened to that yet or you want to refresh or go back and listen, it's pretty short. But in that episode I kind of give all the definitions, lingo and terminology we'll be using in this episode. So it will be a good starting point. Okay, enough intro out of the way. Now I'd like to welcome Elizabeth PAMF alone and Amanda Warfield onto the podcast. Elizabeth has been helping other business owners achieve success through the power of absolute marketing since 2007 she has a pretty cool system. I'm going to let her tell you guys a little bit about it here in a second. And then Amanda empowers women to take back their time using tools, resources, and inspiration to help them simplify their lives, get organized and go from stressed to rest. Hi Elizabeth. Hi Amanda.
Hi. Okay, well thanks for sitting through that long intro and a little longer than usual, but I'm going to start, I'm Elizabeth. Do you want to tell my audience a little bit more exactly about what it is that you do?
Yeah, that'd be awesome. Thank you so much for having me. Um, absolute marketing is a system that I came up with for myself as a small business owner where I take someone for five days and we get isolated and we actually just do work for five days on your marketing and then you're done for the whole year. So absolute marketing is stripping everything down to its core, its foundation and just doing what needs to be done and not getting bogged down with all the fruit, fruit, healthy stuff that everyone else does.
I love that. It seems like a really cool offer. I love it whenever someone has like their own kind of signature system or process for like getting stuff done because it means you've like really thought through it and you're helping business owners any unique and interesting way. And I know for some people that's probably a killer offer because I talked to business owners all the time who feel like they're getting super sidetracked. Trying to think last minute, like what to do with their marketing each week.
Absolutely. Absolutely. And I love what I do and every time I get to work with a business owner they just leave the office every day that we work together, just more, less stressed and more happy with their whole situation, their whole business. And one of the things I love about prophet verse, just to kind of touch on that, is that people will come to me and say, I can't afford you. And I just, I literally have a stack of profit first copies in my office and I just hand them the book and like come back in three months. And they take that and they do, they come back. So, so then it's like having that like combined with it. It's so, it's so fun.
So what you've done is you've not only used profit first to get your own finances in order, but you also use it as a sales tool in your business. Yeah, that's kinda magical. Okay. I'm obsessed with that idea. I think I actually need to buy us a stack of copies as well to give to people. Okay. So what's a intro, Amanda? A little bit better. Amanda, can you tell everyone a little bit more about your business and what you do?
Yeah, so I, I like simplicity. I like organization and I actually used to be, well I've always been organized, but anything but simple. I was always the kind of person that did all the things or tried to do all the things and tried to please all the people and do everything and be everything for everyone. And I had crazy long to do list and that didn't end well obviously. Um, but everything came to a head one day and I started throwing stuff out. And where I started was my closet, which I don't know why I started there except that it was a small space that I could handle in one go. So I started throwing stuff out and then that led to a capsule wardrobe. And what I love to teach women about is capsule wardrobe. Specifically I talk about other things like productivity and simplify and other areas as well.
Also love planners, but capsule wardrobes have made such a change in my life because they get rid of all the decision fatigue. I know we've all heard about Mark Zuckerberg and how he wears the same shirt every single day or the exact same one, but the same kind of shirt every single day because it's easier. He doesn't have to think. And then he can put all of his mindset and his thoughts towards this business. Right? So capsule wardrobes take away the decision fatigue, they help you get ready in almost no time. You can get ready in something that makes you feel confident in the same amount of time that you put on yoga pants and a tee shirt, which for everyone who works from home, I know that is your daily uniform, but you can wear real clothes and the same amount of, okay. Yeah. Okay. I'm a and feel scary.
Yeah, I love that. And I also, so it's funny, I've talked to my friends about I wanted to write a blog post on my personal style aesthetic and my own wardrobe and then I realized, well this does nothing for my bed, for my business. So I never put the energy into it. But I, I was talking to my friend the other day and I told her, I was like, well I know that I have 12 workout shirts in my dresser drawer, but I only have five pairs of workout shorts in my drawer. So I know that next time I go to Lululemon, like I'm only allowed to buy shorts and I am going to cap it at 10. So like that's kind of the beauty of a capsule wardrobe too, is it gives you, you actually know like what you own and what you wear and then when you go shopping, it's not just kind of like spinning money to be spending money, which also ties into the financial topic word about to dig into. Absolutely. I love capsule wardrobes. Okay. So let's get started. Um, all just ask both of you, you can kind of chime in however you like. Let's start by you two giving kind of your definition of what profit first is because I talked about it on the podcast, but I think it's interesting to hear this kind of definition from other people because I noticed different people we'll dial in on like different parts of the system and what makes it kind of magical.
We'll start with Elizabeth.
Sounds good. Um, so I really describe it because I know so many CPAs and I know so many people in the financial industry and Oh, and some of them are. Even my clients, when I describe it, I really go to his main definition. It's not an accounting system. It's not meant to replace, you know, how you do your books, but it's meant to be this buffer in between so that you're not going to the bank account and looking at your money going, wow, we got 10 grand in the bank. Let's do something with it. You know, you're, you're holding back and you're looking at the numbers in a totally different way and it makes your, it just changes your mindset when you can see things laid out differently. So I feel like it's, it's a system that is more about, uh, looking at it in a different view. Almost like you would look at a report in a different view instead of looking at a chart or a spreadsheet. They have the same information, but you're looking at it differently. So I feel like it's really just, just looking at your business from a different view. And giving you better decision making power.
Yeah, I love that. Especially as as a tax attorney, I really approach it from the perspective of traditional accounting, like gap principles and all that sort of stuff. That's crucial when you need an investors or you're talking about partnerships, but I typically really approach it from a tax accounting perspective. So just doing what you need to do to capture your business deductions. Whereas profit first is really going to show you the business owner, the financial health of your business and help you get your shit together. Like really what it boils down to. Okay. Love it. Amanda, how do you typically describe time or describe profit first to someone? Like let's say that you're talking to your best friend who owns a business and you're like trying to get her height. What would you tell her? It's really funny because we all look at it based on the world view of our own business, but I see it as a way to simplify your business finances because they're crazy. Um, and I mean you obviously know that you're a tax accountant and there's a lot of stuff to understand and know about what's going on. So it's a great system to help simplify what's going on in the bank with the money you're bringing in and take it, you paid
Speaker 4: (09:26)
yeah, everyone likes getting paid, right? I found, so it was really interesting for me when I started helping business owners because we can all relate to this, everyone listening to can as well. We all think that what we should be educating is on one thing, but then our client's questions are actually on a different thing. Right? So how to pay yourself was not even something that I thought was like information that people needed and then I realized no, people are starting businesses and they literally don't know what they're supposed to do with the money in their bank account. So profit first helps with that as well. Okay. Let's kind of dig into a, can you build, share how long you've been using the system and why, why you decided you wanted to use it and why your business kind of looked like beforehand. That was a compound question, but you can kind of pick out the most important parts.
Guess I first uh, been using it for, excuse me, about, mm, I think I'm going on six months, so not that long. Um, and the, the other part of the question, I'm like getting lost.
Well, so how long and then like what made you decide that you wanted to read the book? Actually implement the system.
I was in a book club, well I am in a book club, business owners book club and she had it on the list and she just picks what she wants to read and she had read it a year, two years prior and she had done it for her business. And so she has been using it for a long time and she was like, yeah, everybody needs to read this book. It's amazing. And everyone always is like, there's, there's books that will change your life. You know and, and I'm like, yeah it looks, don't do that. You know, I've never read a book that changed my life. And then I read this book and that's why I have 12 copies sitting in my office right now because it did change my life and it did change the way that my business was run going from a six figure business over six figure business paycheck to paycheck to more than that. Now having increased the business because of that and not living paycheck to paycheck.
Yeah, I love that. That's why I, okay so it's really difficult to explain to people cause we all come into this from the lens of where we currently are and what I really boiled it down to is no matter what level of money people are making and their business, they always have this thought of, well once I'm making another 20 or $50,000 then I'll have the money that I need to save for retirement. Then I'll have the money that I need to like buy my next car. And it's like, no, you just, you guys just heard Elizabeth say that she was making six figures and felt like she was living paycheck to paycheck because she didn't have a system. And that's exactly what I see among all my clients. Is that kinda how you felt at the time?
Yes. Yes. And it, and, and you don't really, I mean, I, I've never had a business degree. I have a programming degree, so you know, the whole website marketing thing kind of fell out of that. But um, the, the program and degree did not teach me anything about business. And even my siblings who've been through business school, I'm totally telling them about this book and how it's changed my business. And they're like, they don't, it doesn't make any difference. Like they're not connecting the dots. And I think it's because this particular piece of capital management is only really taught to people in the financial world or who are going to be accountants or whatnot. And business owners start businesses like entrepreneurs start businesses because they have a passion for something. They don't have usually have a passion for the money side. The business side, I have a passion for, you know, websites and marketing and that has really not a lot to do with the financial parts of a business.
And so I know people that make soap and they don't know anything about finance. I was like, so you just start something because you're passionate and everything else falls into place and you learn as you go and, and you just pick up things. And so this is a huge missing piece. I talked to a CPA firm this morning and she said, I don't, I don't really realize until I actually talk to someone how much people don't know. It's not that they're not successful or not that they're not smart, it's just that it's not taught. And this book just fills that gap between knowing everything and being a CPA and going through the training and then not knowing anything and just starting a business and saying, well, here we go. So it fills that huge, huge gap.
Yeah, I've thousand percent and even, um, I would even argue that most seat, like a lot of CPAs and people with business degrees aren't going to know this either because it's an entirely different kind of system, right? So I got a master's degree and I had to take corporate tax partnership tax, a state tax. They didn't teach me any practical shifts like how to teach it to myself and then teach my clients. One of the concepts I really liked in the book is when he talks about how old is your money? So this, I think this is really important because what happens is when we're starting out in our business, we're like, Oh shit, I gotta pay Squarespace on Friday. It's like only $25 but I only have $37 in my bank account because I got paid from a client three days ago. Most of the money went to like my personal expenses and I have this much money left over.
Well, the concept is that money, and there's only like three days old because you just got it from your client three days ago. So the goal is to eventually make your money, two weeks old, three weeks old, four weeks old. And so when we talk about the concept of living paycheck to paycheck, that looks different for everyone. Like I might be living paycheck to paycheck, but now that I'm more money, I also have life insurance and debits, disability insurance and money going into an IRA. So it's not like, you know, it's not like I'm struggling over here, but I also not cashflowing my money to where it's getting to where it's aging. So I think that's an important distinction. Um, so Amanda, how long have you been using profit first and kind of what kind of got you started on it?
So I've been using it actually since I started my business, which was may of last year. Yes. Yeah, may of 2018 so I've been using it since the very beginning. I found the book on some, some, I don't even remember. Some other business owners recommendation list of books to read when you start a business. And like the way it looked, picked it up from the library and then I started reading it. And I, I love systems. I'm a systems person, so that really spoke to me, but it also is pretty similar to the way my husband and I run our personal finances. So it came really naturally like, Oh, this is almost exactly what we do for everyday stuff. I can easily implement this, I get it. And just kind of snowballed from there.
Love it. Okay, so let's now talk about, we're going to get into a little bit more tangible stuff. The whole, I don't wanna make the whole episode just like selling people on the system. Um, well let's get into some specifics so then people can go read the book, come back to this episode and then see how you have both implemented the system. So we'll start with the reverse this time. Amanda, can you share, um, kind of like what your own like per, I'll call it your personal profit for a system. So I found pretty much everyone will take all of the stuff in the book and then tweak it to fit their own businesses needs, what's working for you.
So I don't use all of the accounts that he tells you to. Um, I don't have the, what is it, the tax and the profit that he wants held at a different bank account. I don't do that or a different bank just because I am pretty good with our money, so I don't have that urge ever to spend that money. So I haven't needed that vault. If that becomes an issue, I'll open them up, but I haven't needed them yet, so I don't use those. And then I also don't have an owner's comp account. Just once money comes into the income account that I use on the 10th and the 25th when I pay bills and I pay myself, I just automatically take the owner's comp and put it into my personal account. So that's really the only difference I've done so far.
Can I sell you on my justification as to why I think the owner's comp account is really important? Yeah, go for it. Okay. So the reason why I like it, uh, Amanda, do you mind sharing what your legal structure is right now? Are you a sole proprietor or do you have an LLC? I'm a sole prop. Okay. So once you form your LLC, once you eventually are cash flowing enough money, you have enough profit you can elect for it to be taxed as an S corporation. And when you do that, you'll put yourself on a salary and that salary is paid every two weeks from your payroll company and then you're going to take distributions. I've done three podcasts where I talk about all the specifics so I won't get into the details. But the reason why I really like doing the owner's copycat count is because I have clients who are making over six figures and so they make enough profit to benefit from getting tax savings from an escort, but they've never created that kind of account where they're paying themselves like a flat two or $3,000 every two weeks. And so they just don't feel comfortable transitioning. So I'm a big proponent of the owner's comp account because it kind of, it kinda like prepares you to scale into that, if that makes sense.
Yeah, no, that makes a lot of sense. I'm definitely not at that point yet. So once I get there and like I'm open to whatever changes need to be made for sure. But I'm not at any any point close to being an LLC yet.
Yeah. Well fuck yeah, keep it, keep that in mind. Um, I just started implementing the own like the owner's comp account in my own business and then with the tax and profit stuff, I think it's good to know like kind of, because when you read the book you can, you can tell why he recommends because you really need it. And what he recommends for self-control reasons. Like I am a shopper and I'm a spender. So what I do is I have a tax and profit account and instead of transferring it to the other bank, he recommends, I like go on once a month and I actually just make tax payments because then the money's literally gone to the IRS and I like I can't spend it. That's actually really smart. Yeah. I mean cause you just track all your payments and then report it on your tax return once you file. So it makes it, I mean honestly it makes it more work when you're going to report 12 payments instead of four, like quarterly payments. But you can do it. All right. Elizabeth, let's talk a little bit about your profit for a system. How have you kind of tweaked it to fit your own needs?
Well, I found the, I'm Amanda Duggar tweaked system. She's one of his protests today and a, they're really close. And so he's sanctions a lot of her stuff and is like, yeah, she's great. So she actually uses why NAB for her system and I was looking at all the bank accounts going, yeah, I don't want all those separate accounts. And you know, I already have a million accounts for other things. Kind of like what Amanda was saying. And so I actually use a business checking and a business savings and the business checking is my op ex and the business savings of my tax account. And then I have my payroll comes out of, I'm an escort as well. So I, my payroll comes out of my, um, I kind of see, leave it in my op ex account. And have it in there. And so I actually have that deducted every two weeks.
And then I get, you know, the taxes come out of that and Medicare and all that other stuff. Fun stuff. Um, and then I have my distribution section. So why NAB really almost makes it look like they're all in separate accounts, but all the money is actually in one account. And so then every, I don't do his 10th and 20 thing. I probably should get to, you know, get to that at some point. But I really like to pay attention to it and I'm really hands on with it. So I like looking at it on a regular basis. Like I'm in there probably like once or twice a week and then every two or three weeks I'll go in and make my transfers. Um, so I'm, I'm a little more hands on with it then he says you need to be, but that's because I like watching it grow like that. Why not is they have that money age to number two. So they show you how, how your money is aged as well.
Oh, that's awesome. I didn't know that. Okay, cool. So all all link, why NAB in the show notes free one so they can check it out. Just a little more information on that. It stands for, I think you already said this, but it stands for you need a budget and essentially what it does is it links to your bank account and then it like kind of fractions all of your money into different accounts within the software system so it's not actually taking your money anywhere, it's just a visual representation of buckets and people will use it for personal budgeting and all that kind of stuff. Um, so super cool tool that people can check out as well. I should also note before I forget, I do have a freebie on my profit for a system. Everyone can download it on the website. It's called the profit first roadmap and I show my system that I teach in the courses, which accounts I use and all that kind of stuff. Okay. Any other like top tips that you both want to share about like getting started with profit first
I had to start over.
You got to start over, why did you have to start over?
Um, I read half the book. I will literally get to like halfway point. I thought this guy is freaking amazing. Um, and I just literally stopped reading the book and started implementing it and I use Y NAB to do it and I just, I was like I have to do this right now. And then I kind of was like getting stuck a little bit and then I went back. I was like, I guess I should finish the book. And then he like explained all the things I had guessed. So then I realized, Oh I should've first finished the book. And so I went back to my why NAB, I cleared it all out and literally started over after like a month and a half of doing it. So it was definitely worth reading the whole thing. It's not too long. But at the time I was so excited I just kind of like jumped again. I don't want to say I don't worry about starting over cause sometimes you have to kind of get your head straight before you can just like dive in.
Yeah. So Elizabeth's top tip is read the whole book before you get started. That definitely sounds like something I would do cause I get really, really excited about new projects and just tend to dive in. Um, what I would recommend is a, of course I'm gonna recommend my own download so everyone start with the freebie and you can actually get started just by following the directions in that if you like want to take my system exactly as written. But if you're like, Oh this is super cool, I want to learn more, I want to learn the why behind it, all that kind of stuff. Then definitely the book. And I really liked the audio book because he shares like a lot of extra stories in the audio book.
Speaker 4: (23:51)
Okay. Cool. Do you have any final tips for everyone, Amanda? So I don't know how you'll feel about this and this might prompt, but I actually, I say I do the 10th and the 25th but really I just attending the 25th because I batch all of my work and so Fridays aren't part of Friday's finance. Right?
Speaker 4: (24:15)
whenever Fridays closest to the 10th or the 25th is when I'm at.
Speaker 4: (24:20)
Speaker 4: (24:23)
That aren't automatic at this point. So okay. You were cutting in and out a little bit. I wasn't cutting out for you as well, Elizabeth. Okay. So I think, I think I caught most of it all. I'm kind of recap what I think we were getting at and then you let me know if we're on the right track. So essentially in the book, what the whole purpose is that you have multiple bank accounts or you can use by an app like Elizabeth does. And then on the 10th and 25th of each month you go and you make transfers from your main account to your other accounts. That's the gist of the system. And Amanda is saying that rather than do it on the 10th and the 25th she does it on whichever Friday falls closest to those dates cause that's like kind of like your finance or your admin day.
Exactly. Nice. I like that. I think it's fine. I don't think it makes a huge difference. Um, to be perfectly honest, once you get on like a set payroll it'll be more like that anyway cause they'll run it on like on a set day instead of dates cause it's every two weeks. Right. Um, what I do is I was just, I was just bragging about my, my beautiful Trello, my Trello board for the podcast before we started recording. And I have a similar one, um, that I call, I have like my big picture, my month and then my week. And so what I do is I have tasks that need to be done on a certain day each month. And then each week I look at my week and I copy and paste those checklists over to my week. And so mine, I always do on the 10th and 25th.
But once you get into the system, and in my freebie I have what I call your personal cashflow policy. So you actually write down like your own rules. So you say first transfer 30% from this account to that account and it's literally a checklist so you can copy and paste it onto your to do list every time you need to do it. And just by running through that you can get it done in like five minutes as opposed to like I was flipping through my notebook, now what am I doing? Like that kind of thing. Super cool. Okay. Any, anything else you want to share before we wrap up and say goodbye?
I was just going to share my, um, my taps and my cap. So, um, I know he talks about doing a lot of incremental, you know, going 1% at a time and kind of starting off again. I was like, I'm, I'm into this, I'm doing it. I'm not, I'm not doing this half way. And even though I felt situation was a little bit tight, like you said, like that kind of mental mindset of paycheck to paycheck. It wasn't necessarily that I was doing bad, it just felt like paycheck to paycheck. Um, and cause the money wasn't aging, it wasn't aging at all. And so I went right into the like his, you know, these are where you should be, this is what you should be doing. And I found it a little bit tight in the beginning. Like it seemed a little restrictive but now I am like golden. I have um, I actually opened a separate, another separate account for retirement. So I have 5% going to retirement, 10% going to profit, 50% going to owner draw because of where I am in his scale taxes. This 15% and my business is only running on 20%.
Nice. That's awesome. So watch what Elizabeth is saying is that only 20% of her total income is going towards the business expenses. I'll be completely honest and I'm going to be recording a whole separate podcast on this. When I calculated mine, when I first was reading through the book, I was at 65%. You guys, that's not like that's for a service based business. It's not okay. It's just not, it's basically unacceptable because I don't even pay for ads. So I'm like, what the fuck am I doing with all this money? And that's why I decided to move into my home office. I was spending $900 a month basically just so I could get out of the house every day. And I'm like, this is not, it's not, it's just not a healthy way to grow. Right. So that is amazing. I really like it.
That was around 60 60 62
yeah. And you don't like, you don't realize it until you add it all up and you're like, look at my life, look at my choices. What am I doing?
And the beauty of this system is since then, like before that time, if someone had said, Hey, go take this educational training, or Hey, come to this retreat, it's $500 or you know, whatever, I would've had to say no. Like the money wasn't there to me in my mind. And so, and, and it really, a lot of times it wasn't there. I was, I was using up the cash. And so, um, since I started this, I've taken two retreats and I've already booked a vacation for later this year. So the money is there. I just didn't, I wasn't using it in the right allocations. And so now I've been able to do a lot more than I thought I would. I mean that I would have ever done in the first six months of this year.
Love it. I, you guys, I really, Elizabeth, um, really strikes me as a no bullshit kinda gal. She's like, I'm gonna read this book. I'm going to cut my expenses by 40%. Like in the next month we're going to do this thing. Okay. I love it. So I always like to wrap up whenever I have guests. Um, I like to cut straight to the chase and say, although we didn't really talk about your businesses and what you offer, I like to have you let people know, like, I want to hire you right now. How do I do that? And then, you know, maybe I just want to be friends. So like how do I do that? Where else should they follow you? And then, uh, if they really like what you got going on, where should they go? Okay. If you guys want to follow me over on Instagram, that's where I share all of my behind the scenes life stuff and we're actually husband
and I are in the process of buying our first house. If you want to follow that nonsense.
Speaker 4: (29:46)
I'm at mrs Amanda Warfield over there. And then if you guys are interested in my capsule wardrobe course, just head over to my website, which is Amanda warfield.com.
Speaker 4: (29:57)
beautiful. Okay, what about you Elizabeth?
So I have a Facebook group called absolute marketing and uh, you can also find me on Facebook, Elizabeth Pampa alone and I have a website where I have my five day session. I have horses and Elizabeth Campbell and.com [inaudible]
all right, so that cut out a little bit too, but we did, no worries. We didn't get your Facebook group and your website. I will put all of these links in the show notes so everyone can find them. The websites just unfuck your biz.com. Super easy to find. Uh, and I want to thank you both so much for coming on. I think this went really well, so thanks. Thank you. Thank you. Awesome. So everyone that's listening, like always, don't forget to like and subscribe and I am really looking for some specific feedback. So if you guys want to leave a review and let us know how it went, that would be great. But you can also feel free to shoot me a direct message and let me know what you thought of this panel podcast. If you want to learn more about how other business owners are implementing profit first, and if so, if you think there would be any other creative ways to bring you that type of content. So shoot me a message. Uh, don't forget to tune in on Tuesday and uh, thanks so much. Have a good one.
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