Episode 138 - From Broke to Booked: Builder Finance Hacks with Alex Little of Little Financial
#138 | Alex Little | Little Financial | From Broke to Booked: Builder Finance Hacks
What does a recovering accountant, a fractional CFO, and a former would-be pararescue jumper have in common? It’s all Alex Little of Little Financial. In this episode of The Curious Builder Podcast, Mark and Alex dive into the silent profit killers hiding in your business, what the heck a 2% leak is, and why cash in the bank doesn’t always mean profit. Alex drops gold on everything from project KPIs to better billing habits and why you can’t delegate your wealth. If you’re making money but feel broke—this one’s for you.
Listen to the full episode:
About Alex Little
Alex is not your stereotypical finance and accounting nerd. He brings an entrepreneurial mindset and can look at both the big picture and get into weeds of a problem. His ability to pull you in with a smile and a joke pairs well with his talent at simplifying a problem to make you feel comfortable overcoming any obstacle.
Being taught from a young age that business ownership and real estate was the key to building wealth, Alex has invested his time and energy into gaining wisdom in a diverse range of business topics and ventures. This led Alex to founding Little Financial to help business owners understand their numbers, so they can make better decisions.
Resources:
Visit Little Financial’s Website
Visit Little Financial’s Facebook
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Mark D. Williams 00:00
We're excited to announce that we're bringing back Sonic camp 2.0 on March 20, from two to 8pm we had this last year. We had 42 owners. This year, we're maxing out the capacity of the camp, which is going to be 60 people. We're going to have a wellness panel with some Everest summiters, as well as some iron men and women to compete and all about wellness and how they prioritize their health and wellness, not only in training, but in their lifestyles and in their business. And they're gonna have a two hour window of sauna and cold plunging in the lake, and then an amazing wood fire grill, Mediterranean style food at the end of that. So if you're interested, please head to cures, builder.com, under retreats, you'll find everything there is about sauna camp on March 20 in Minnesota
Alex Little 00:47
and save them like two or three grand for each year. That's a five minute fix that just saved a few $1,000 and there's lots of things like that in your business to where, if you just review all of your financials, it's not something you have to do often, but a lot of it's just these little tiny things.
Mark D. Williams 01:15
Today on the podcast, we've got Alex little, and he has a great ability to make the complex very simple. And, you know, his dad was military. He wanted to be military. And I think my favorite line out of this whole episode is, get better and suck less. Without further ado, here is Alex little from little financial. Welcome to curious bidder Podcast. I'm Mark Williams, your host today, I'm joined with Alex little from little financial, out of Florida. I believe it's we're in Florida. Are you, Alex? I'm near Tampa, Tampa. All right. Well, I was just down in Orlando with my kids, actually, not too long ago for the whole student break for I have little kids. So we did Universal Studios, Hollywood, that whole thing. Talk about accounting. Holy smokes. I was looking that up. 100 and $60 billion business is what Disney is worth. They do 55 billion a year in revenue, and they support 2 million, $2 billion in wages per year. Like that is wild.
Alex Little 02:04
There's a lot of jobs just from Disney World and related in Orlando. A lot
Mark D. Williams 02:10
can't imagine. Well anyway, this podcast episode is not brought to you by Hollywood or Lego, although that would be a cool episode. We met about a couple months ago. You had reached out. We have a few mutual friends, our buddy Reese, over at adaptive. And I thought, you know, it's been overdue since we've had, you know, some real deep talk on finances, accounting, and you are the perfect host for that. I was looking at your your schooling, the University of Utah. I love that. It says not emphasis, double emphasis on audit and info systems. If you need anything more about this guy, the fact that he had to do a double emphasis means you are serious about accounting.
Alex Little 02:46
I didn't want to be the boring 40 other just auditors. I want to be special. And I'm I'm so geeky that I didn't want to just do accounting. I want to do information systems too, because I love, like, the, you know, your tech stack and the data side of things.
Mark D. Williams 03:01
So it's funny, you're you're perfect, you're my kryptonite. Because, like a lot of entrepreneurs out there, we start with ideas and energy and creativity and all that, but without systems in place, we're gonna talk a lot about it today. I'm specifically interested in talking about what you call the 2% leak and a few other things that the common business owner is not even aware of where they're losing money. So we'll talk a little bit, maybe just do a quick brief intro on yourself, how you started your company, who you service, and what you do. But I think we'll spend probably 50 minutes like real actionable details and stories that you've come across in your career. And just my goal out of this episode, we talked about this a little bit just right before we started hitting record, is just what can business owners, specifically in the construction fields take into their business from this episode and learn like, Oh, wow. I had no idea that was the hole in my boat, and I didn't even know because I had no visibility to where I'm losing money. So that's kind of the goal of this episode, for sure. Yeah. So yeah, give us the elevator pitch. Who are you, and how did you get into or why did you choose this as a field, and why are you specifically attracted at the 800,000 contractors in America?
Alex Little 04:09
Yeah, no, that's a lot of questions, but yeah, the TLDR in me is, I grew up in military family. I wanted to be a pair rescue jumper, but then quickly realized that I'm just not man enough for that, and I really liked my air conditioning, and so I went to business. Long story short, like I said, did double em system accounting. I tell people I am a recovering accountant, because most of my career was accounting, but I got bored. Like, I like operations and finance more. Like, how do we grow the business? How do we make money? So I switched to that. Worked my way up to CFO and eventually started my own business as a fractional CFO. So I started this business just being a fractional CFO, but I found that most people I was talking to were like, Oh, my bookkeeper is amazing, and I take a look at their books and it's just a dumpster fire. And I'm like, I can't give you any type of strategy or forecasts or. Or, you know, budgeting based on this, because I have no idea how you're currently performing. So I ended up starting the accounting and tax side my practice. I've kind of just focused on scaling that, and then just, you know, in social media and my website and such, trying to provide the education piece so people just, I feel like the accounting industry gives people the financials, and then they're like, here you figure out what this means and what to do with it. And I'm trying to kind of bridge the gap with technology, giving more insights, but then also just the education piece of like, Hey, these are the things to focus on. This is what you can actually do about it. And like, give people actionable just instead of just hear your numbers are and you figure out type of deal.
Mark D. Williams 05:46
So I heard something recently that's totally changed my thinking, and curious to see if this resonates with you or the audience, which is I was listening to Andrew Cordell. He's a tax architect, and he's actually down in Florida, and he was part of this Aspire series I went to, and he had just mentioned that you can't delegate wealth. And his comment is, is that like, who's like to Alex, yourself or myself? Mark, like, my money is the most important thing to me, and if you give it to somebody else, it's not the most important thing to them. Even if they value it a lot, it's still not as important it is to as the person whose it is. It'd be similar to like my kids are more important to me because they're my kids. Where I'm going with this analogy is, I think, to my own detriment, I have not Well, I certainly like finance and I like numbers. I've been so, you know, for 21 years, interested in the craft and in the creation and what I'm building that, you know, I've often delegated, you know, financial responsibility and financial visibility to people on my team, and some, most of them, have been great at it. I had a few people that I employed a couple of years ago that just they weren't the right person, and it was on me. And anyway, where I'm going with this is I'm way more interested in my numbers, my overhead, my whip, like, when I'm going to run out of cash, like, all of these different things, because I can't really invest in my business or myself unless I have the right indicators kind of telling me where I'm going. And I would imagine, the sad thing is, the more I talk about this with other builders or entrepreneurs, like, I'm not alone, like, and I'm not saying that there aren't some out there that are super interested in it, but, you know, I've said this so many times where, you know, you can be good at business and a bad builder and you can make it, and you could be a great builder and bad at business, and you won't make it, and hopefully, obviously, you're good at both, what has been, sort of your experience, as you're talking to people like, what percentage out of 10 people say I have a great bookkeeper, and their numbers actually are good compared to the ones that the story you just told me where it's a
Alex Little 07:44
dumpster fire, 10 or 20% it's terrible. I mean, there's good enough and, like, that's really what you have to focus on. And I know that, like Alex hormozi, like, preaches that a lot too. Of the like, try not to make everything perfect. It's just good enough for the stage that you're at, but we should really, as business owners, focus more on, you know, gut feeling is important, but also, like basing your decisions based off of the data that you have, the only way you can, you know, do that is if you're actually tracking the data and put some actual importance on it. But a lot of people, they get in the business because they're really passionate about what they're doing. They then they get in the business and realize there's all this admin stuff that you have to do, and at the end of the day, most of the businesses are for profit. So wouldn't you want to know if you're actually making money or not? I remember having a sales call with a guy that he only wanted accounting because he had to file taxes. I'm like, so you don't actually want to look at the reports to see if you're making money on your projects. You're doing and had didn't care. And I'm like, no wonder why you haven't grown the past 20 years you've been doing this business is because you've just been, like, doing it, coming up with the numbers on the fly. And then, you know, I guess you make enough money and you that to survive, but, like, that's just not a way that you can scale or, you know, really know if you're doing a good job or not.
Mark D. Williams 09:12
That is wild story. How did he How did that relationship end? Did he end up writing the ship, or did they not know?
Alex Little 09:19
I completely passed on him because he was looking for, like the part time soccer mom is doing bookkeeper thing on the side that's charging like $100 a month type of deal. And I'm like, one, from like a cost standpoint, he was wanting the price to be way too low. But two, his mindset just was nothing like we would just bump heads, even if we were doing the price that he was willing to, like, we're looking for growth minded people that they don't have to be experts in finance and like, that's not even the point. Like, I try and teach people you don't need to know accounting and finance in and out. You just need to know like, the four key areas the focus. Ian as a business owner, and you need to know what good and bad accounting looks like, so you can judge if the person you're outsourcing to, or if you're doing it yourself, is doing a good job or not, because that's where the whole like, bookkeeper like is amazing, but it's a dumpster fire. Thing is, they didn't know better if like, what bad accounting look like
Mark D. Williams 10:21
you mentioned the four four things. What are the four things? Yeah, so,
Alex Little 10:25
I mean, it's really simple, really revenue, gross profit, net profit and cash. The kind of the link is figuring out and learning how each decision you make in your business affects those numbers, and what those numbers need to look like in order to achieve your goals. I think you had talked about, you know, an idea to talk about on this podcast later. But it's about, some people are like, oh, I want to make $10 million in revenue this year. I'm like, okay, like, that number doesn't mean anything. That's just, kind of just like a Vandy number on the golf course. Because, like, if you make $10 million in revenue this year, but you took home the same amount as you did last year, then did it really mean anything? Like, you didn't really increase, like, your livelihood. So I think a lot of people just get in their head these arbitrary numbers and stuff that don't actually equate to getting closer to their goals, but they don't know if they're getting closer to their goals or not, because they're not actually tracking or paying attention to the numbers.
Mark D. Williams 11:27
Well, I think as well as you know, there's certain glass ceilings, I'd be curious to know, you know, scaling is, I'm definitely it's a weak part for me. And I've talked to other builders like, I think if you get to every business is different, so maybe it's not important to relate. But, like, I'll just say, I've been told before that, at least in our market, once you hit, you know, let's say nine to 10 million revenue a year, or gross revenue, that being profitable at the next level up, because you now you have to start hiring more people, which decreases your profitability, as you know. So it's almost like two times, like, You got to get to 20 million, and that gap between 10 and 20 is pretty big. And I It doesn't matter what the number is. I think every market might be different. Is, but there's a there's a ladder, and there's a gap just in working with other businesses. Have you sort of seen that transition, or can you kind of speak either from a national point of view of, like, as you look at companies, like, hey, the reason that there's this gap here? Or, like, basically, how does a builder scale so that they can get close that gap quicker? Because, you know, if you're spending a couple years where you're taking in more revenue, but you're not making any more money, it might be okay if you know that you're planting the seeds for future growth, growth and building an infrastructure. Like, if you're buying land to develop and, you know, you're putting that down payment, like, totally makes sense. You're going to reap that in a farming analogy later, where, if you're a hunt and kill, you know, it's only whatever's in front of you, and you got to just, it's a lot of pressure. I mean, I think you have to have a strategy for farming and for hunting. But what has been your perspective of watching companies sort of try to go to another level.
Alex Little 13:00
Yeah, like you nailed it with the first thing you were talking about is there's definitely growth stages and just stages of businesses to where you're dealing with different problems. That's why I try and play in the like the one to 5 million range, just because I like that more personally. I mean, I work with anyone from 200,000 in your revenue up to 50 million. But anyways, back to your question. I see it comes down to systems. A lot is like with small business owners when you first start out. I'm in Ian just first started when you're when you're working every day, there's so much going on that you're just trying to fix the problem, put the fire out, and it's usually just like a What's the easiest, fastest, most efficient way to do that right now? But you don't actually end up taking the time to go back and review. Hey, is that actually the best process going forward? Do you have to think about every process that you put in place of, like, is this going to work on one build or 100 builds? If it breaks, you know, then it's like, okay, well, this isn't very scalable. It's the same problem with reviewing projects when they're complete to, like, see how we improve it. Most of the time, you're so busy that you're jumping on to the next project, and you don't even think about reviewing what went wrong, what went well, or the financials, did you make as much money as you thought you would on that project? So it's around having to force yourself to take time aside, to not make it perfect. But think about in that bigger picture, is this going to scale or not? Because that's a lot of the things that you run into at those stages is like, hey, we getting more houses. Is it's a lot harder now, because we're kind of just running into capacity problems. But also, can what we have right now be fine tuned, though, so like, even if we stay at. Million and don't go up to 20 million anytime soon. Can i improve the processes and the profitability of the business right now to where I'm still making gains towards my goals, even if the top line number isn't improving as much so it's kind of just like, uh, you, systems are important throughout the life cycle of a business, it gets more and more of a constraint. You know, when you get into the seven digits type numbers, you
Mark D. Williams 15:29
know, this is probably a good segue into you. Had posted something recently on LinkedIn that I was reading about the 2% leak. What is it about tiny costs that sort of quietly erase profit? And how do owners first notice this? And how do you know if it's happening to you?
Alex Little 15:44
I think a lot of times, especially with builders, is like, when you finish a project and want me, it was businesses in general, I get the question a lot of like, you know, my my PNL says I'm making money, but like, my bank account doesn't look any bigger than it did last month, and that's why our tagline for our businesses, we work with business owners that are making money that feel broke, to better understand what they make, spend and keep. Because lots of times it's like, where did my money go at the end of the day? Lots of times it's because just because they sent an invoice on something doesn't mean you actually collected on it. So that's one big problem. But anyways, back to your specific question. A lot of it comes down to, especially with builders, they have, like, a template of, like, you know, what they're estimating the project costs on, and that's how they build around, if it's a fixed cost contract, or even, like, with, you know, HVAC or home services like you have, like your estimate that you built originally of how much this job is going to take, which dictates your pricing. But a lot of times, you don't update that estimate or template that you're using very often. So you'll go through projects and you'll think that you're making 30% because you never actually review on when the product's over, did we actually make 30% and that's one of the examples that I see a lot, is when we actually sit down review, it's actually 18% and it's like, oh, because this thing happened that, oh, it's extra permit, or this cost rose. You know, timber was more expensive than it used to be, but then no one actually goes back and updates the template that they now price their next job on. So it's a reoccurring problem just these little percentages to where you didn't think about it, either when you made the estimate or the template in the first place, or they weren't included in a change order. One of the biggest problems that I saw a lot with custom homebuilder that I spent a lot of time learning the construction industry on, was that they weren't very strict with enforcing their purchase orders and Change Orders process and comparing it to the invoice that was actually sent. So the sub would send or agree to a purchase order, but then send an invoice that's like completely different amount, like $2,000 more than what the invoice was. And no one ever caught that. So that was eating into their margins over
Mark D. Williams 18:13
I mean, how in the world you're doing a purchase order like most people don't? I mean, the more sophisticated businesses are doing purchase orders, and you can run it without it. You just have to have a keen eye for it. But if you're doing a PO and you're still missing it, like, that's pretty bad,
Alex Little 18:28
yeah, well, because the PO is, like, the agreement up front, but then if you there's that key piece of actually, actually matching the purchase order to the invoice when it comes in, because the accounting department often will just they see the invoice. They're like, Okay, well, let's process this for payment. They'll actually go and compare, did this invoice match what the purchase order was and see, because they just assume that that was, well, was agreed upon, they're going to invoice what was agreed upon. And that happens more often than not. That like the vendor said, oh, like, you know, the materials price increase or change order for it, just invoice the amount. I
Mark D. Williams 19:06
mean, I've had it before, and we have a really good team for this. But, like, especially now, we use adaptive, which a lot of the, you know, it's all set up in AI, and helps you track it, immensely helpful for that. But even without that, you know, when you see something, and this is where I feel like there's a big disconnect between the office and also your project managers and, of course, the owners. And this goes back, I think, to your systems approach, where you know, if you're outside, you know, let's say, you know. Let's say you're with an HVAC company, and you decide that you know what, we're not going to do, the garage heater. Let's just say it's 3500 bucks the office, if their company is big enough, you know, maybe their team never told so they still invoice, because they go off the original estimate, which has the garage heater, but it never actually got installed, and so you're paying for something you didn't. But let's say my office wasn't talking to my PM. How would my office staff know that the HVAC was it installed, or the you know, I mean, so it's very. Easy of two people that aren't a party as the bigger companies scale without some sort of a system to track this, you could very easily see how, how one, I mean, that's great for the bottom line for the HVAC guy, he just got paid $3,500 of margin that didn't show, but the builder over overpaid for it. And so anyway you do have to review it. We have a protocol on our team of how to handle it.
Mark D. Williams 20:31
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Alex Little 21:16
that, well, I mean, you have to have those SOPs of like one forcing change orders and purchase orders, and then, you know, instructing the accounting team, but they need to match it if they don't use something like adaptive and just really enforcing it and ask, like, you have to follow up on it, because that was one of the main problems with that one specific custom home builder I was talking about, which is the place that I learned a lot of construction about, and fortunately, a lot of the problems the construction about was that they could have the most beautiful SOPs, but if you don't actually enforce it and talk about it and, like, follow up with your PMS and like, your admin staff or accounting staff, then no one's actually going to follow it, and it's going to the problem still going to occur. So it's really just like mapping out where all the possible leaks are, and then, you know, making a system that's designed for that more and more, especially like with things like adaptive like technology is helping to where it's not a manual check, where let me go find that po and then go suggest, hey, is this the relevant po that is for this invoice, the amount of like, AI that's going to be going into, you know, things like this, that will help so much. It's a It's amazing. But anyways, I don't want to get too off, off course, on talking how amazing AI is. But things like that, like, there's not a lot of magic bullets when it comes to business and finance, a lot of it's just fundamentals that people don't actually like put in place.
Mark D. Williams 22:45
I remember, there's an old adage that my dad used to always tell me when I was a little kid, he's like, you could have $100 and if you spend 101 you'll go broke, and if you spend 99 you'll make it. That's a pretty that's a pretty simple, I mean, for a kid, I mean, I was, I was, you know, I don't know, third, fourth, fifth grade. I mean, I understood that as a child. And I think most people, if you told them that, they would understand that. The question is, is, how many people actually operate their business or their personal finances that way? You know? I think a lot of people, you know, just spend and then figure it out at the end, like you were talking about that one contract. I mean, I was even worse. He didn't even worse. He didn't even want to know. He just wanted to, he just wanted to get it to his tax guy to tell him the news. He didn't even
Alex Little 23:28
want to know his own news. That's terrible. Yeah, you have to have that mindset to begin with. And I think a lot of people just get overwhelmed. Like, you know, most people, you show them like a spreadsheet in Excel, their eyes just glass over, and they don't want anything to do with that. I think what finance professionals need to get better at is a lot of times we'll talk in finance jargon because we're trying to sound smart and convince you that we know what we're talking about. But a lot of that just goes over people's heads because they're not trained in that. They don't know that stuff. I think it's more important to have relatability and like simplicity that it is sound smart. That's why I, instead of saying, you know, revenue, expenses, profit, I talk about make, spend and keep, make it. I'm trying to demean people by talking to like how you talk to a seventh grader, but like you need to make it to where they don't have to think hard to understand and like connect. What does all this finance talk mean to what I actually do on my job?
Mark D. Williams 24:27
What do you mean by does that tie into you've said you need visibility beats volume. You know, a lot of people just say, Oh, I'm going to get another job. I'm going to get another job. I mean, I used to be guilty of this. I always said I was a lot better at adding jobs and I was at cutting costs. Now, at a high level, that might still be the case, but going faster just makes your ship sink faster. You know, if you got a hole in your ship, speed is not your friend, and so we laugh at that, but that is a very common thought, probably especially for men. We're like faster must be better. What does visibility mean in terms of beating. Volume,
Alex Little 25:00
yeah. I mean, it goes back to, like, what I was saying about the 10 million revenue goal, if you take home the same amount, like, did it really help, you know, type of deal, it's, it's always a balance, because, you know, more revenue, more sales, usually does solve a lot of problems. You can just throw money at it, you know, type of deal. But if your business model and your processes make it to where you know your margin is, like razor thin, then you could probably become more profitable just by figuring out how to increase that margin and, like, cut costs or improve processes, then by just getting 10 million more in revenue because you're only having 1% profit margin or something. Well, I
Mark D. Williams 25:45
think there's something to be said about efficiency too. You know, we talked a little bit about scale, or I posed the question of scale, you know, if you could, let's just say, for this example, let's say your take home was, doesn't matter. Let's just say you're making $200,000 a year, to pick a round number. And let's say you want to make 300 you doesn't mean you have to add 234, more homes. Because think of how much someone might say, oh, man, to make that much more money. Think of how much harder I have to work if you're just more profitable, you could actually make more money and do less. Your team would thrive, because efficiency is the way to make up your you mentioned that earlier that you know maybe you don't have to get to get to that 20 million revenue in the earlier example. You just have to be, either have to charge more margin, or you have to be more, you know, more efficient in your process. And you can actually, and there's multiple ways to be more efficient. We always talk about growth, but maybe the growth comes from within, and just being, you know, better at the financial side of conserving your money. It's like miles per gallon on a car just, you know, becoming more efficient. You know, you have to buy less gas.
Alex Little 26:46
Yeah, I think people like another one. There's like rules that everyone knows about that no one actually like tries to implement. And like self is like the 8020 rule is like a lot of the times most your problems come from like, 20% of your clients. You got rid of that. Those 20% clients, everyone's like, you know, I can't, I can't lose any clients. But sometimes, like, I don't know, like, it frees up your time for better clients and for better types of jobs. Maybe it's not even, like, a specific client, maybe it's a type of job. Like, have you reviewed like, how much money is that type of job actually getting you? Is it worth it? Because one of the biggest things that I see as far as business owners that don't think about, which is usually part of my, you know, sales pitch, when I talk about we should do your accounting services, is opportunity cost. No one thinks about, what could I be doing? Instead, they think about like, well, if me or my team does this, then I can save X amount of dollars every month, or something. They don't think about, if I'm doing this or my team's doing this, then that means that we can't be doing something else instead. One of the biggest, like, best examples of that, it was for a pool maintenance and construction client I had where, I mean, he was spending probably, like six hours a week doing the admin and, like, accounting work. And I was like, Well, if you had that time back every week for the next three months, it was going into summer season at the time, and what can you do with that? He's like, I could probably go get like, another million dollars in revenue. And I was like, when I put that side by side, I'm like, so you are trying to save a few $1,000 over the next few months, and you're giving up a million dollars in revenue potentially, like, when you do it side by side, you know it doesn't make much sense for them.
Mark D. Williams 28:35
I think that's what's really helpful about having people on your team, or fractional CFOs that can really break down the information and make it black and white, because, you know, if you are, if you're presented like, that exact example, like, it kind of makes you stop and consider, I got it. But sometimes we're so busy as owners, you know, running around, trying to do all these different tasks. And, you know, I do believe that activity breeds activity. And so there's something about that inertia, that momentum and going. And so it's not to shake that, but it's also sometimes someone needs to tell you to stop and be like, Hey, you're better off on concentrating on the one in the hand than two in the bush. And, you know, I think everybody's stupid. Yeah,
Alex Little 29:12
make it simple. That's why the line go back to, like, the four numbers, the, you know, revenue, gross profit, net profit, cash. That's why they say that, like, you should each person, like, in your organization, should have three to five KPIs that they track. Business owners too often try and track everything, and like, every number that's in my business I need to know about and track to see if it's doing well or not. Yeah, you have to do that when you're small, because there's not other people you can. Have to track that. But like at the end of the day, when you grow, you should be focused on those four key numbers. And then, you know, those key numbers have subsets that flow up to it, like you're not going to give customer acquisition costs for marketing to like the accountant as a KPI that's relevant to them. It needs to be irrelevant to something that they can add. Control in their day to day job and make it something that they can see a dashboard three to five numbers, because if you doing that, makes it super simple. You can understand how we're doing our beginning better or worse, but if you have these 50 numbers you're all trying to track, that's where people feel overwhelmed. And now it's no longer as simple to make decisions off of. What are ones do
Mark D. Williams 30:23
you recommend you get involved with the KPIs? Or how do you usually recommend people like, I mean, you have some examples of what some of those three to five might be for, say, a project manager or an owner, or, you know, the accounting team. Well,
Alex Little 30:36
I mean, like for the owner, it would be the gross profit, net profit, cash revenue. And
Mark D. Williams 30:41
let's just stop there for that example, just to be more practical, because we all know what those are, or familiar with those terms, is that on a weekly cadence, a bi weekly cadence, a monthly, quarterly like, How often would you recommend your clients
Alex Little 30:53
reviewing it? I would definitely say on the weekly cadence, there's some stuff that you can do every day. For instance, you should probably glance at your cash position once a day, as well as, like your outstanding accounts receivable, just to see where that's at. When you get bigger, when you're small, it's not as hard to keep track of who owes you. But as you get bigger and more people owe you, like having someone on your team or you if you have that personal relationship with them, one quick little text or call of like, hey, we haven't seen payment on this invoice yet. That solves a lot of problems before it gets too dire and you're calling up asking for collections because you're about to run out of cash and they can't afford payroll. But things like having think you mentioned, like your project manager, having them looking at, you know, gross profit per job, and trying to see, like, are we on track for the profitability that we laid out? Are we on track for schedule? I don't have a I have a list, but not in front of me right now, of like, all the KPIs that I usually track per each kind of role. But like, the grand idea behind it is make it something that's actionable in their daily job, and not just something that's, you know, I hate when people I say it all the time as sarcasm, but like, get better suck less. And I think a lot of direction that managers give is that type of get better suck. Okay, how? Like, give me something actionable that I do every day or every week or every month, that I can actually see if I'm improving or not. And like, give you know, hold me by my hand and tell me, like, you need to complete this many tasks within this time frame, or we need to improve in these metrics,
Mark D. Williams 32:42
that's amazing. Get better. Suck class. That's gonna be, that's gonna that's, that might have to be the title of this podcast.
Alex Little 32:49
Yeah, today, that's what we're trying to do. But, like, what does that mean? So how
Mark D. Williams 32:55
about this? You tell me, if you're comfortable with this, how about this? We will put a obviously, when this airs, we'll have we posted three times on our Instagram. If people tag you and ask, would you email them the KPIs that you said before? That'd be a good way for people to reach out and get something out of this. I just think it's really interesting, because I think you're right. I mean, we're actually developing our KPIs. We have some that we use, but I've asked my team, I said I want to for our goals for 25 I sort of want to update our KPIs into your point, make it more relevant as an owner, and as all owners, we probably track way too much stuff, and so letting people on your team sort of have accountability. So I think that'd be a great call to action, both for people to reach out to little financial but also as kind of a value add. I mean, I mean, I know. I'll take it. I'm curious to see what you got. Just kind of
Alex Little 33:43
interesting, yeah, and like, you have to, you know, obviously customize it for sure role in like, each business, but at the end of the day, it goes along with that theme of, like, just make it relevant to their job. And again, that's why, like, studies have shown three to five KPIs, main KPIs is the limit of where people can focus on and make measurable gains and not get overwhelmed with 10 KPIs that they're tracking and all that jazz. As you get a larger organization, it's easier because then you have people below you that are now tracking the more detailed stuff, like an AP clerk, and how many bills they process per hour, per day, or something like that. How many things that they do at the end of the day, you roll it up, it rolls up into higher KPIs, which roll up in the higher KPIs. And then, as a business owner, at the end of the day, revenue, gross profit, net profit, cash, that's what your whole business is made up of.
Mark D. Williams 34:40
You know, you had mentioned, I think this is applicable. But you know, Job Costing is a connection between the field and accounting. How do you see it as a leadership tool and not just a spreadsheet task? Because I think that's one of the things with KPIs. In particular, people are like, great. Like, you're asking people to report so you can give them feedback. But they're also like. Rate. I'm being asked another thing to track,
Alex Little 35:02
yeah, oh, I mean, that's where the whole, you know, measurable steps on how to improve, because that's one of the things that I always hated when I was an employee, of getting feedback, of like, Oh, why didn't you get promoted? It was like, you just one of the best fit or something like that. I'm like, Okay, well, if you don't give me constructive feedback on the What can I do better that I don't know what's wrong and what to improve on. So it really, I want to say again, but it comes down to, like, the give them actionable things that they improve on, versus just to get better suck less, tell them exactly what could be improved and how to measure if they're doing that or not, because, at the end of the day, people want to know where the finish line is, and like the steps that they need to take to get there, instead of just do better
Mark D. Williams 35:55
and suck less, yeah?
Alex Little 35:57
And suck less? Yeah? No, that's something my dad told me, you know, it's one of the either him or military catchphrases I grew up with, get better suck less. And I'm like, Okay, what does that mean? What do I have to do better or suck less at?
Mark D. Williams 36:14
That's so amazing. You had posted a story about, you know, 80,000 being the silent loss killer, and it was basically, if, as I recall, it was basically two different companies. I'm sorry, it was like, let's see it was. How did it go? You were basically, you had, was it to a $4 million company, and you were showing, basically, they're gonna lose $80,000 a year. Would you recall What? What? What the circumstances of that story was?
36:38
Um, I can try. I can try. I can,
Mark D. Williams 36:41
I can pull it up real quick. It was on
Alex Little 36:43
your it was, looked at it, and yeah, it was, give me a second.
Mark D. Williams 36:47
Here. It was on your LinkedIn. It was actually kind of interesting. I was scanning it. I was like, You posted it just a couple days ago. And so let's see if I can find it real quick here, because it
Alex Little 36:58
was kind of cool. Was that connected to the the 2% margin link,
37:01
I think so, Yep, yeah.
Alex Little 37:05
I mean, it was just, it goes into those small things that happen all the time, that are costs that don't seem material at the time, but they can, like, chew up things like, for one instance, is actually my first fractional CFO client. We reviewed her subscriptions, and that's a juicy place to look all the time to find this wasted cost she was paying for like, five different zoom subscriptions for employees that no longer work there, but no one had, like, an off boarding list of these are all the things you need to do to offboard someone and canceling their zoom subscription was not one of them. But like, you know, that stuff where it's, you know, 1015, bucks here or there, that is only like 100 bucks or so, you know, long term. But like lots of those types of things add up quickly, and it's often like a low hanging fruit of cost savings. For instance, an HVAC client that I'm working on, kind of just redoing their entire accounting department, like, I think 20, they're on track for 20 million or something like that this year. One of the things was there. They had switched from using QuickBooks payroll to gusto, but they had, like, bought, like, a bundle, so they kind of had to keep use paying for the QuickBooks payroll, but they still had all of their employees, like, listed as employed through QuickBooks payroll, and QuickBooks charges you for that. So all they had to do is basically terminate in QuickBooks, payroll all those employees, and save them like two or three grand for each year. You know that they had the package. And I was like, that's a five minute fix that just saved a few $1,000 and there's lots of things like that in your business to where, if you just review all of your financials once a month. I mean, like the subscription stuff, I recommend only doing it, like twice a year. It's not something you have to do often. There's not usually a lot of things in there that are cost leaks, but a lot of it's just these little, tiny things, like reviewing the projects, like, how did it go? Did the numbers end up being what we estimate, and if it's not, why
Mark D. Williams 39:31
this episode is brought to you by adaptive. If you're still chasing checks and juggling spreadsheets, it's time to upgrade. Adaptive is revolutionizing how builders get paid with AI powered bill pay, automated draws, one click payments and built in Lean waivers, Faster Payments, fewer headaches and total visibility. Adaptive takes care of the back end chaos so you can focus on what you do best. Building. We've used adaptive for two and a half years, and trust them to keep our projects moving and payments flowing. Learn more at Adaptive dot build. And simplify the Pay Process today. For more information, you can also listen to episode 10 and episode 15. We run mostly cost plus jobs, right? So we're very keyed in on what something costs. Because, you know, as Reese loves to say, from Adaptive, you can't plus what you don't cost, so you really got to make sure you know what your costs are. And so, yeah, and so a cost plus builder is less, you know, less likely to run into that area. But where a cost plus person has an issue is if one of their people don't get them a bill. And then, you know, every contractor, if they've been in business long enough, has got that bill that squeaked in, three months late, four months late, six months late, and the it puts the owner in a really difficult position, because, like, you know, I've got an invoice. You know, I have some usual suspects that I know that they're bad at it, so I'm also on the lookout for it. So if I see money left over an account at the end of the job, I'll be like, Hey, have you verified that this person has sent us their final bill? Because they're notorious for not billing. And, you know, we're a team, and you know, they do great work, but they're not the best at billing, but at least I know that, and so I know what to look out for. And so we'll reach out to them and make sure it's closed out, because the last thing anyone wants to do on a cost plus job in particular, is get six months after the job you've closed it out, and get a random bill now I get, I'm sure there's many builders listening like I
Alex Little 41:18
would never pay that well, like we're at that point you're trying to trade off your relationship with the owner or the vendor, and it's
Mark D. Williams 41:26
like, yeah, and yeah exactly. I've been faced with that before, and usually they're not been super big numbers, and you're just saying, like, Hey, I'm sorry, Sam. I can't go back to the homeowner right now. It's unprofessional. I'm sorry you're in this position, but we really have to make sure, going forward, that you are you know that you know that you're billing on, I'm sorry I can't pay the bill. It's not that I don't want to, but we send out final invoices. We send out or sorry emails, we send out your you know, for us, you're linked into builder trend. Like, you know the job is closing, like you know, you have to take some responsibility to to get paid. I mean that being said, as someone who's very conscientious, and I'd probably value relationships, I don't know if you can value relationships more than you should. That sounds like a weird thing to say, but like, my point is is, like, I don't know, like, I really appreciate the people that work for me. And there's been many times where I have paid my guys when maybe I shouldn't have, in that scenario specifically and or maybe I'll say, You know what, let's look at jobs down the line, especially if it's only happened like, once, but like, if you're a repeat offender on that, like, I can't cover that. That's not fair to the owners. And so it's just unfortunate because we're trying to help each other. And I often weigh it like, hey, when I need something, like, if I call my roofer and it's and it's raining out and he shows up, like, that's amazing. Like, I really needed that help. And so like, if they're asking me, you know, like, Hey, can you help me out? Like, I feel responsible to try to do the best I can, but there are some times where I just simply can't,
Alex Little 42:49
yeah, especially those, like, repeat offenders type of deal. But then, like, also, like, it's, you know, it should be in the, in the, in the perfect world, the vendors are the ones like that are keeping track of this, and they're doing what they should be. But like, you have to have that safety net of the project managers reviewing all of the POS that have happened and change orders and seeing, like, have we had bills that match the total amount? Because you can go through builder trend and look at what's the amount of what all the POS are, and what's the actual cost that we received. And if you see a discrepancy there, you're like, Okay, is there a PO that hasn't been billed yet? You know, that type of review, either monthly or at, you know, especially at the end of the project, make sure that you know you're trying to not put something on a bank draw.
Mark D. Williams 43:38
And we do, you know, we often will be sending out. I mean, people at this point, we've trained our subs, and we work with pretty much the same subs in every project, so they're very well trained. But we will. We'd like to pay people quick. I've always said that, like, I don't I hate it when you work with companies that are like, you submit the bill, it doesn't go on to the next 30 days. Then it doesn't go on to the next 30 days they got to review, and it's like 90 days, it's like, This is crazy. What are we doing? And it's really frustrating. And so I've always, because my skill set has never been actually doing the work on a home. I've always said to my team, like, what can I do? I can pay my people really fast. You know, assuming everything's kosher and good to go. But so, you know, if I get a bill, and it used to be, and this was a problem, actually, early on in my career, if the problem is the subs knew this, if you submitted a bill to me, I would pay it the next day. And I wanted, I was so gung ho about I'd never like holding on to someone else's cash, because I didn't want to ever get into a situation where I had the whole Peter Paul situation. So if I have a client's money and I owe one of the subcontractors, I want to pay him immediately. I just want, I didn't want, not that. I didn't want the responsibility. I just didn't want, I didn't I wanted it paid and satisfied. And I still think that's a good underlying philosophy, but the idea it was so stressful on my poor Her name was Zenda. She was the. Amazing. She, I mean, she wrote checks. I mean, her hand must have been so tired. This is way before ACH. I mean, she would just write check after, and it would every day. You can imagine her flow. It'd be like five checks, three checks, one check, versus what we obviously do now, and I hopefully most people do, is we have a cadence, you know, what? If you get us a bill by, you know, whatever it is, the 15th of each month, we'll pay it by the first of the next and so we're trying to keep people on a really tight we invoice the client monthly, and so we leave about a 15 day window in there, so that hopefully none of our subs have to wait longer than 45 days, but they should be being paid in 30 days or less if they, you know, if they hit that sequence,
Alex Little 45:36
right? Yeah. And a lot of it's training your vendors of expectations. I had a client that they This was another pool client they had, unfortunately, like, trained his technicians, that they will not technicians, but his contractors for like the construction and like repairs and stuff, that they would be be able to submit their invoice and that he would approve it and pay it like that afternoon. I'm like, dude, like, you have set such a bad precedent. Because, like, a lot of the ACH rules, like two days, like, you know, the bank, or, like, the vendor that he was using for his payment processing to pay the vendors were basically, like, fronting the cash for two days, you know, hoping that it's going to go through and not have any type of bounce. You know, ACH is like that. I'm like, I understand the desire to pay them quickly. But also, like, this is a business. There is processes. Reviews have to happen. If you try and push through payments often are too soon. You can get into problems where, like, this work wasn't done, the customer's coming back saying, like, hey, there's some, you know, oh gosh, there's some outstanding items to clear off here that, like, need to come back and fix it. And punch list by for some reason I couldn't think about the day there's punch slip items that need to be fixed. And, like, you've already paid your vendor and you didn't have, like, retainage built in. And it's like, oh, well, now I have to go convince the sub to go, like, repair something because it wasn't completely signed off yet. If I pay them too early, stuff like that happens all the time.
Mark D. Williams 47:11
You advise a lot of people on scaling, or you we've talked a little bit about it. What do you let's talk a little bit about smart scaling. You know, not just going, sometimes I think we go scale and we just go wide, like, Let's do everything. You know, if you think about like a tower, I've never thought about this analogy before, but if you think about a tower, it's usually it's long and linear, I guess, unless it's the pyramids of Egypt, they definitely had a wide base. But they, you know what maybe we should do, that they've been saying for a long time in terms of business. How do you see different scaling models, and what advice would you give financially to to a company that wants to scale
Alex Little 47:45
at the end day, you have to really match it with the owner's goals. Like, what are you actually trying to achieve? And keeping that in mind as you scale, because, like we talked about before, like, you know, sales and revenue does help throw money at problems, but you have to do good enough for where you're at whenever you're building a process or figuring out what works. But there, there isn't really one magic bullet on how to scale. It's really just a balancing act of not over exposing yourself, not spraying yourself too thin. And, yeah, it's really just a case by case basis, but really, like, get your fundamentals, like, get your your finance and your accounting and like your operations running. Of like, this is good enough that customers are taken care of first. Like, there's plans for each area of your business that can be laid out as far as scales goes. But now, with AI and automation and software, so much of what you do, and like a lot of the grunt work, can be helped by software. I think a lot of people have, especially in like the blue collar world, law of their day job can't be done yet by robots or AI or something like that. But they don't really think about can a lot of the admin or, like the back office work be handled by chat, GPT or something? And they don't really look into it, because, especially in like the accounting world, accounting is hasn't really changed the last 30 years, much until the last five years, March, two really. So a lot of accountants been doing things the same way that they've always been. And, you know, I'm surprised that some of them are still like doing a lot of things by paid payroll by hand. You know, there's a lot of software that can help with a lot of this stuff and automate it to where one person can do five different roles, whereas you need five different people previously. So I know I'm kind of all over the place with this answer, but
Mark D. Williams 49:53
I mean, maybe a segue into it that's probably more applicable and easier to talk about is talk about the, you know, working capital. Cash Flow. You know, I just had a conversation this morning with a good friend of mine, and, you know, they're doing great, but he's like, cash flow is super tight. You know, we have tons of work, but cash flow is, I mean, you could be very profitable your PNL, like you said, you know, earlier, you know, you could sign a contract out, and then you look in your bank account and there's no money there. Everyone who's ever owned a business can relate to this. What are some practical advice to maintaining a positive cash flow, some habits, some practices, or some key guards that allow you because most, most of most builders that are entrepreneurs at this point have, you know, working lines of capital to you know, you got the dips, and you fill in the dips when it happens. But you'd like to not have to do that. And if you if you have a clear path forward, obviously it's fine to do it to leverage capital, but I guess talk a little bit about cash flow and liquidity and sort of how to manage it, or how owners should look at it,
Alex Little 50:55
yeah, having kind of like a runway as you get more finance support. This is easier to do, but like when you're by yourself, or you don't have a big finance team, just having a cash flow forecast, it doesn't have to be sophisticated, just knowing what's payroll, what are the top expenses in the next two weeks to a month at the minimum, and knowing what that looks like can help least base your decisions off of actual data. But when it comes to like improving cash flow, it depends on the industry, but lots of times, having a invoicing system that as soon as a job is completed, you either have a process or automated know to where the invoice automatically goes out to the customer, if you can put it in there, to where you have their payment information on file and it's already agreed upon beforehand, the milestones and the payments to where you're not having to track down the customer and remind them over and over again that they need to pay. That would be helpful, you know, a lot more difficult when it comes to construction, because the numbers are so much bigger and a lot more sign ups, sign off stuff that happened, but things like pool service or other home services, to where it's recurring revenue, that's a lot easier to where, you know, put their payment information on file, have it in the contract where auto debits, or anything under 500 bucks, you know, for repairs or something, auto debits, because a lot of the times where, like, the whole making money that Phil broke comes is that they send the invoice and they assume the customer is going to pay it. But for one reason another, they don't remember. They forget, you know, they meant to do it, and it's didn't or whatnot, and you end up giving them a interest free loan until they eventually pay. And you also have to put in the effort to track them down and remind them to pay.
Mark D. Williams 52:51
The efforts a big one, I think that is something that, I mean, everyone has spent time chasing down invoices, and it is a considerable amount of effort, especially ones that are, you know, yeah, you just, yeah, it's not fun to be in that position. Yeah.
Alex Little 53:06
It's not fun to even have the make the calls. So where, I think, you know, the if you can't do auto debit, which is a lot of people can't because they're just not comfortable with it, or the industry they're in just wouldn't make sense having an automated system that sends out those reminders, either email or text, and it's a lot, I think it's easier to swallow for customers if they're getting an automated message versus a person actually reaching out to them. It feels less aggravating and a confrontation if it's an automated reminder, and you have a system set up to where they, you know, email or text goes out three days before the due date, on the due date three days after. Have a system that automatically does that. So not only does it take the time off of your staff or you having to follow up, but again, like it makes it less concentrate, confrontational, and it helps collect because, like, those invoices and those big numbers don't mean anything if you don't actually get the money.
Mark D. Williams 54:05
One thing that's made a huge difference for us personally is the amount on the down payment and how you credit it. So for, I'd say, about 1516, years of my career, I would take you know, you do a down payment. Let's call it 5% 10% whatever it might be, and then you would use that and usually, if they were bank financed, the bank would then ask you, you know, where is that money going? And so let's say, go toward the lumber bed, or towards, goes towards whatever. And once you've used that up, you can sort of ask for more, but you're sort of in construction. We're always sort of in arrears, yeah, because, and so it becomes a real problem, because you're constantly you don't want to use your own money to finance someone else's home. Or that's always been my my stance on it, because, like, I'm not being paid to do that. That's what the bank is for that, you know, if you want me to do that's a different conversation. I would have to charge you for that. Um, if you are, this is me obviously talking like, if you're a client, like, you know, if you want me to be your bank, then I'm gonna have to treat you like a bank would treat you, except I'm not a bank, so I'm going to charge you even more than a bank would have to and so, and I've actually had homeowners be okay with that for one reason or another, whether there was simplicity, whether they were factoring in their origination loan, or whatever the scenario is. But again, this goes back to knowing your numbers. But anyway, about three, four years ago, at contractor coalition Summit, it was super helpful. Brad Levitt from Phoenix had just and he's doing because sometimes we think, Well, maybe the scale of the house should be different. He's doing 1520, $30 million homes. The number doesn't change because the costs are just more. So he's still asking for 10% Ian, 10% on 30 million is $3 million down payment. That's a huge number. And his comment was that it's completely changed my business, not only in terms of profitability, because I'm not that 2% leak is not happening anymore, because I'm not financing my clients builds anymore. And so essentially, I was doing the same work for less money, and my clients, I was I was financing their home. And what I was doing is I would use that money like I already said, and then once I exhausted it, then I would ask the bank for more. Well, now that 300 grand, that's in my example, not, not Brad's $3 million example was I was basically fronting that 300 cash until I got paid at the end. And that's great. That's crazy. I can't believe I did that for so long. And so now what we do, and I've never had a homeowner have an issue with it. That's the crazy thing is, I say I'm taking 10% down. That is, that is not going to be applied till your last payment. So your last payment, let's just say it's a let's just say it takes $300,000 down on a $3 million build. Their last draw should be less than 50 grand, because the 300 grand they've already fronted me. And so we're watching it. We're timing it we're timing it out like we're doing monthly reports, making sure we don't get overextended, obviously, because the the risk of that is, my earlier comment is that I would that 300 grand, that I would burn through that, or whatever would happen. And personally, I never make that number higher than my than my gross profit, because I even if something was mismanaged, which it shouldn't be, but let's just say it was, I wouldn't want to be at risk of, you know, having to bring a check to closing or something like that. So I've sort of made, I've made sort of double, sort of safety guards for myself and for our team and for the client too. You know, it's not fair to ask them for, say, 20 or 30% because if you had a bad actor, now you're going to get to the end, and you know, where's the safeguard for the client? And so that has made a huge difference in terms of our liquidity and also cash flow, because now we have not struggled with cash flow the way we used to, because we have larger down payments. And so it is kind of a silver bullet, but the key is you can't credit it till the end. And I think it's that little fundamental switch that sort of changes the narrative. I'm curious you know your comments or your thoughts on that,
Alex Little 57:44
no, 100% that's been such an immense game changer for clients is when they have that realization. And like we have a whip report that we use too for clients, and showing them if they're over or under build helps put that in numbers perspective of, hey, like, you have not invoiced enough to cover the costs that are coming up this month. And like, now you're going to be financing, like you said, the customer, like those are, unless it's, it's either you that has to take the hit, or your subs that have to take the hit. Of, they just not get paid on their invoices, you know, until time. And like, you have payroll too that you have to fund. So like, having that mindset of, like, this money is to pay off the customer invoices from the month, but we have this slush fund because that's a bad connotation. But like this, this deposit that we're using, it's such a game changer on stress and just the cash flow issues. And one thing that people have to take a step back and like learn before they even do that part, is that those funds that you get from the customer for the deposit should be like in escrow. I see a lot of builders that will not Ian, just build it, but businesses in general, that will take deposits and they'll pay, like subcontractors from our previous job, or they'll pay payroll with it, you know, operating costs. It's like, if that customer canceled their contract right now, you have to give that money back. That's not your money to play with, and they're using it for other things. And they're kind of kicking the can down the road because they don't have enough funds that they've collected up front in order to pay for that new project. They're using those that new deposit to pay for the last deposit, you know, the last customer's project, and having those two things in in mind of only use the funds from that customer for that customer for that customer's project, and then having the funds ahead of time and knowing ahead you know what you're going to be applying those funds towards, is really, I feel like, when you go from a unsophisticated to sophisticated, you know, builder level of like, Hey, we're professional now we've got. Things set aside for this customer, and like looking ahead and stop being a bank
Mark D. Williams 1:00:04
really well. And I think one, one last thing on that topic is you can also set up separate bank accounts for each job, you know, so that that money. So if you want to be very clear on what portion of it, it can stay in a separate, separate account. There's a book, and we're kind of out of time here. But have you ever read Michael McCalla? What's his profit
Speaker 1 1:00:21
first book? Yeah, actually, over there somewhere right
Mark D. Williams 1:00:25
by. I mean, that book's amazing. Yeah, there's still levels of it that I need to reread and and process, but basically, for the audience, it's a must read. I mean, Alex has gotten his office right behind it. I've read it at least twice, and you know, part of it is just set, setting up these different accounts. And, you know the idea of, like, profit first, like, you know, like, literally, when you get a, let's just say, for easy numbers, let's just say you're taking in 10% and so you take 10% off of, let's say you get $100,000 check. You take 10,000 and you put it in a bank account that literally says profit first. That is your profits. Because a lot of people, a lot of entrepreneurs, I know it's not just builders. They say, How much do you make? Well, after I pay all my expenses, whatever's left over, that's my profit, and that is a terrible way to run a business. I know I've done it. I don't know. I don't know any owner that hasn't probably done that, unless they came outside from a financial or business background. Because you weren't ever taught these principles, unless someone else you know, you kind of went through them. But starting to understand to set it aside is hugely helpful. And to your point, it reduces stress to such a high level
Alex Little 1:01:26
one that gets you in that what I like about Profit First, really, is it gets you into good habits of really being strict of where your money's going. Because, like, that's the question that so many people come to me is like, like I said, they're making money, but they feel broke, they'll know where is all my money going? Well, if you set aside what your profit is supposed to be, that means you really, really have to keep control and be strict about what you're spending money on in order to complete the project as you've estimated and like planned out, because if you don't, then there's a vendor at the end of the end of the day that's asking for money that you don't have any more money for because your 10% is in your your profit, and then you have to start aiding into that. It's a lot it's a lot more obvious that you didn't make your 10% when you have to actually pull from your Profit First Bank Account, you know, to pay a vendor. Because, like, Okay, well that's not that wasn't in the plan, that wasn't an estimate. So now it's more obvious, but it teaches good habits. That's what I really like
Mark D. Williams 1:02:27
about that habits and mindset. Well, I appreciate your time, Alex. We want to respect your time in the audiences as well. So we'll wrap it up. We'll have everything in the show notes, and thanks again to our audience for tuning in. And thank you again for Alex. Is a pleasure to chat with you a little bit, and we'll be in
Alex Little 1:02:41
touch. Thank you so much for having me on thanks for
Mark D. Williams 1:02:45
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