Control Your Cash Podcast

Tim: Today, it’s our honor to have John St. Pierre, author of The $100M Journey. John is a coach to entrepreneurs. He also has a podcast called Entrepreneurs United, which can be found on all your, favorite podcast channels. John, welcome to the Control Your Cash Podcast.

John: Thanks, Tim. Thanks for having me.

Tim: John, in the pre-call, we talked about your journey. And so let’s start with your entrepreneurial journey, and you had shared with us that you know you were an entrepreneur in college. So tell us about like what you did while you were in college, because that was something that it sort of appealed to me when I was in college. And I never pulled the trigger. So tell us about what you did to make money in college.

John: Yeah, I love that. Well, I didn’t have a choice and you’ll learn why in a second, to become an entrepreneur, but I grew up in Canada, came to the U. S. to go to school and studying accounting. And, in terms of a student coming to the U. S. you really don’t have a work visa. You have a student visa. So my first summer in college, I went back home to Canada and went planting trees. Six hours north of civilization, getting paid 10 cents a tree, wearing all netting for the black flies and not to be able to get you, and spent my summer up in the wilderness. And at the end of that summer, I said, I’m never doing that again. What do I do next year to stay down south? And you know, a little small, little loophole, but you know, you don’t have to be a U. S. resident to own your own limited liability corporation. And so I, basically saw a poster on my dorm room wall, which was own your own College Pro painting franchise. I’m like, what is this? I don’t like painting. I don’t know anything about painting, but I would like to own my own business so I can stay down here. Cause my only other option was to go work for free for some public accounting firms, right. And doing an internship. Right. So. Got that poster, apply for the job. And next thing you know, I’m running my own painting company, uh, in the summertime, hiring all my friends to paint for me, going out and doing sales and estimating, and really got hooked to this like concept of entrepreneurship and, you know, yeah, I’m studying accounting, but I didn’t see myself as an accountant. I saw myself that from that point forward, as an entrepreneur, spent two summers doing that as a college pro painting franchise, and learned a lot about business and had a lot of fun, but a lot of hard work too.

Tim: Well, it always is hard work. And just as an aside, the question, as you were explaining, you know, hiring your friends, tell me how that went when you’re hiring your friends. That you need to depend on them, you know, to paint some house or some, some business. So tell us about a little bit about how that worked out.

John: Yeah, I’m happy you picked up on it. My first summer running my own business was a complete and utter disaster, partly because, I couldn’t count on my crew to show up on time. Why? Because I was partying with them every night. And then the next morning I’m like, guys, let’s go. You got to go, you got to go paint some homes. The most undependable crew, right? The sec…, by the time my second year came around, I learned so much through disastrous, you know, this road as an entrepreneur of ups and downs and challenges. And you’re a new entrepreneur in college trying to figure this all out. I learned a lot of valuable lessons and that was probably one of the biggest ones was don’t hire your friends to work for you. It doesn’t quite work the way you want it to. In the second summer, I built my crews right. I trained them right. I paid them right. And I had a much more enjoyable summer. That first summer I ended up painting a lot of houses myself because my crew didn’t show up on time.

Tim: Naturally, right? And that’s the key as a business owner. The buck stops with you. So, and it’s certainly something, it’s a lesson that we all learn, but so now you have this entrepreneurial bug, so to speak, right? You’re sort of hooked on being in control of your own destiny. Which we know you’re not in complete control, but at least you do have say over certain issues. So tell us a little bit about, you know, after you graduated college, you have this degree in accounting. Where did that take you? What did you do with it? And how did that lead you back, if you will, to this entrepreneurial bug?

John: Yeah, for sure. So immediately following graduation, the parent company of College Pro, which is also the parent company of CertaPro Painters and California Closets and a whole bunch of contracting businesses, were willing to sponsor my visa to stay in the U. S. and work full time for them. So I moved out to Chicago and my job was to actually go. Hire and train college students to do what I had just done. So I was uniquely qualified to show them how to do, how to run your own painting business. So I was training college students on how to be an entrepreneur. Really did that for a couple of years. And this was 1998, Tim, you can probably imagine what’s going on in 1998. And you’re like, okay, do I want to be in a contracting business or do I want to be in a .com business? It was kind of the evaluation and everybody was jumping ship, right from corporate environments to, .com, web businesses. And so. I did that along with a bunch of other colleagues. We were part of a company called handymanonline.com, which was a venture funded startup that basically helped connect homeowners with contractors. That business ultimately was supposed to get another round of funding completely collapsed in the crash. So we lost everything that we were building and the assets of that were sold to ServiceMagic, which was rebranded HomeAdvisor.com, which just merged with Angie, that was that business way before it’s time. That’s the one that didn’t survive, right? But that was the brand well before those others. And so I did that for a few years, learned a little bit about that whole VC environment and .com startups. But then I found myself in the early 2000s saying, okay, now what am I going to do? And it was offered a couple of opportunities to go work in corporate environments, get a nice salary, stabilize everything. But I had this bug. I really wanted to figure out how I could build my own business. And, I started two companies, uh, in 2003. One was a contracting project management company because I had experience in contracting by that phase. And we were doing projects in commercial environments. So we started up a small business for that. And then I started up a little hobby business. I was, I played hockey growing up and all of a sudden, so me and a couple of friends started a hockey hobby business where we were taking teams, youth teams over to Europe to play in hockey tournaments. And that was just a lot of fun, but these two companies started growing. And I’ll fast forward all the way to the end. But 15 years later in 2018, the sports company was a global north of 50 million dollar sports business that we had incubated and grown, massively. And I was the CEO and president of that business full time. And, I got fired. From the very company that we founded, in the boardroom of that business. And I can explain all the reasons why in a few minutes, but yeah, that was a devastating moment for me, 15 years of building this business. And in the aftermath of that, I looked back over at the project management company that I still had over there. It was grown 15 years as well, but it was kind of like. The tortoise, you know, just going a little slowly, hadn’t really grown as much, you know, as around, you know, sub 5 million dollars at some point around then. And I said, you know what, I want to learn some lessons from this massive failure. I’m going to apply it to this other company and prove that I can actually do this right. And we successfully in 2022 grew that company to north of a 100 million dollars the right way. So those were my entrepreneurial journeys in past. And since then I’ve been coaching entrepreneurs and, building our holding company, subsidiaries accordingly.

Tim: Wow, that’s amazing. So, you know, not to dwell on it, but take us through, right? So you really get knocked on your butt when you get fired from your own company.

John: Yes.

Tim: So if you don’t mind, take us through how that went down and like literally what you were thinking, did you see it coming? You know, so explain how that, that whole thing unfolded.

John: Yeah, Tim, it was 25 years of running really hard, feeling invincible. Oh, I got this thing called business all figured out to a big smack. And you know, when you look back, it’s so easy to see how you made yourself so vulnerable. But in the moment, you know, you’ve grown a company from zero to north of 50 million dollars in global revenues. I, all a ton of, really great people worked at that business. The culture of the business was amazing. We were in industry. I have a ton of passion about in sports. I mean, this was my dream come true to build this very large sports business. But over time, you know, I made myself so vulnerable and I felt so invincible that I didn’t quite see it coming until it was too late. I could see the train coming, but that’s within, you know, a couple of months of it actually happening. And, you know, we had raised 20 million dollars of private equity money. To take us, take us from 50 million to a hundred. That was kind of the goal. But it was within six months of raising that capital that I was fired from my own company. And, you know, I know you talk a lot about cash and building your own cash as an entrepreneur. And that’s one of the biggest lessons that I learned is over time. As that company grew, I was more consumed with growing the company than I was with protecting my own equity and control of my business. And so, you know, maybe I started the business as a 33 percent partner. The day I was fired, I owned 8 percent of the company. And I lost the confidence of the private equity firm and said, Hey, we can put somebody else in here to do something better with this business. And, yeah, it was, it was devastating. I had to take some time off. After that, I woke up for the first time ever, not having emails or calendars or calls to be on. I lost my identity. That was my identity. My kids had the logo of this company tattooed on their arms, not literally, but you know, in a, in a way that kids all their t shirts all have this company’s logo on it. I, it was a very devastating moment for me and my family. And, you know, it took a lot of introspection and a lot of perspective to realize, okay, what am I going to make? Yeah, I gotta make some lemonade out of these lemons. What are my learnings? How do I crystallize these and apply them?

Tim: Yeah, so that’s something and that’s I think this is part of the entrepreneurial journey as well. Everything’s a lesson, right? So you get smacked in the face and then the question becomes, what’s the lesson in this? What can I learn from this to make sure it never happens again? What can I learn from this? To teach other people not to be able to be subject to this again, right?

John: Yes.

Tim: And that’s, that’s the whole thing. And you know, when our kids were younger, when anything would happen to them, whether good, bad, or indifferent, I would go over it with them and explain like, okay. And, and try to find out if, sort, sort of pull out from them what was the lesson that they learned from this. And one day my wife said to me. You know, everything doesn’t have to be a lesson. And I disagreed. I said, no, honey, everything is a lesson. That’s what our evolution in life is all about. Learning from the successes, as well as from the failures and being able to apply the wisdom that we got from those experiences so that we either build upon them or avoid them going forward. And so that was, I’m glad you brought that up because there was a lesson in there. So let’s talk about the lesson you learned and how you applied it to grow your other company.

John: Yeah, I love the way you put that, Tim. And it’s just recently the CEO of NVIDIA was talking to, I think it was Stanford College and talking about how important sometimes failure and suffering is in your development as a person, but you have to take it in good light. You have, you know, You have to have perspective. You have to really view your hardship is not the end of the world. Your hardship is here to teach you something. And what is that? And so I had never journaled before, Tim. I had always told about the power of journaling. I never really stopped to think about what my purpose was in life. I just thought I had it all figured out. I don’t need a purpose. I can just kind of build things and have fun. Like, so this moment of reflection, deep self reflection is something I had never done before, but I was forced almost in doing it. So for the first time in my life, I had to sit down and go, okay, what am I going to do with this information? This embarrassment, this, this business that I tried to build and it’s now gone. How am I going to, make this, you know, the most beautiful thing in the world because right now it does not look beautiful. And I don’t wish any suffering or failure to anybody in the world. It’s very difficult when you’re in the moment of going through it, but you are right. The learnings you can take from all of those successes and failures are so important. The first lesson I learned was almost exactly that. You know, when do entrepreneurs take time for deep self reflection on what their life plan is relative to their business plan? And I had those completely separated. I was living a life this way and a business this way, and they were not connected in any way, shape or form. So one of the things I work with a lot of entrepreneurs on is what’s your 30 year life plan? What are you as an entrepreneur trying to achieve in life and all segments of your life? Let’s start there and let’s build a business that can help you achieve that, not create a business that achieves this when really in life you want that, right? How do you connect those two pieces? That was a number one lesson for me that I had never stopped and created a life plan. I had never, you know, take the moment to journal every day and put my thoughts on paper what was important to me in life. And so that was critical lesson number one. And then critical lesson number two applied more to some fundamentals of blocking and tackling with entrepreneurship. And in my book, The $100M Journey. I talk about seven principles of entrepreneurial success, and I can certainly rattle those off, but I know exactly where you would go with it. You know, principle two for of the seven principles was you got to build your own capital. You cannot go hat in hand to financiers and investors or you will lose control of your business and you will not be protecting your equity, which is principle one. So I learned a lot of principles, seven principles to be exact, that I would never do again. If I’m going to grow a business and I, and I really, you know, crystallize those in my mind and formulated a plan around those.

Tim: Well, that’s, that’s tremendous. So, what sort of spurred you on to write the book, you know, and, and obviously a lot of lessons there, but, and I’m sure writing the book was not an easy task.

John: No, no, not at all. Have you written a book yet, Tim?

Tim: We’re in the process and I’ll tell you it, it is, it’s easier said than done for sure. Right, John?

John: Yeah, no question. I mean, I had always thought someday I’m going to write a book. Someday I’m going to write a book. And then I’d have a friend asked me, well, what would you write about? I’m like, I don’t know. I just got a lot of experience and learnings, but someday I’ll write a book. I didn’t really have a story. And, you know, in the midst of this failure, I’m documenting a lot of things. I’m journaling, I’m thinking through what I did wrong, what I would do differently. And then I started applying those principles to this other business. And that business starts growing and I start realizing, Oh, this is what I messed up over here that I’m not now doing here. And we successfully grew that company to north of a hundred million dollars, which was my goal with the sports company. And in the midst of growing that business, when I could see that we were about to hit that target It dawned on me. I got to tell this story. I got to tell this story because a lot of entrepreneurs try and grow their businesses from a lifestyle business to a high performance business and get caught in this messy middle where they feel like they got to go raise capital. They feel like they got to put more debt on their business to grow and put themselves in a little bit over leveraged position. They put themselves in these positions that really suffocate them and they end up losing control of this business. They poured their heart and soul into. So my mission that I discovered in my purpose, I discovered during, during my time off was I really want to help entrepreneurs build the business of their dreams without ever falling off the cliff like I did. It’s good to learn lessons. It’s good to have some failures, but it doesn’t have to be that drastic. You can protect yourself and do things the right way. So I, you know, I combined my mission and purpose. I really want to help entrepreneurs build the business of their dreams. And the failure and success of trying to grow a company to a hundred million dollars and the learnings within that, it really became, okay, I now know what I need to share with the world. And that’s my story.

Tim: You know, that is such a great point because think of it this way, John. And again, going back to, you know, being a business owner, there’s so many similarities to being a parent and right. And, and think of it, think of it this way. One of the things that, again, we used to preach to our children was, the best lessons that you could learn are lessons that other people had to pay the price for. Learn from other people’s experiences because, first of all, there’s no direct cost to you for that learning. Somebody else had to pay the price to make that mistake so that you don’t have to make that mistake. If you’re able to do that and then just take those experiences as a kid, and then even apply experiences from other business owners, if you’re an entrepreneur, Oh my gosh, your learning curve. It’s going to just going to be like, well, no, no pun intended, like a hockey stick. Right, John?

John: Exactly.

Tim: But, you know, it’s, it’s so important to understand that. And, you know, one of the things, you know, you talk about having cash or, you know, sort of giving away your equity, or a lot of times we don’t realize that when we’re dependent on banks for raising capital, the banks own us. Because we always have the saying that whoever controls your cash flow controls your life. And one of the things that I found, and we do a lot with, with data, we had a research report and they found that 61 percent, according to Intuit, 61 percent of small business owners around the world struggle. With chronic or cyclical cashflow issues, and 69 percent of small business owners either lose sleep or sleep less due to cash concerns. Now, sleep deprivation is linked to a 200 percent increase in the incidence of cancer, 20 percent increase in premature death, and the lifespan, the life expectancy of a small business owner is a full five years less than the average American. So obviously, these sleepless nights are creating issues. And this all starts with cash flow. Here’s what I’ve learned in 38 years. Working with small business owners, all of these cash flow issues categorically are self-inflicted. It’s all due to how we’re using our cash, our cash flow. And if we, we call that the financial golf swing. And if we’re able to change that financial golf swing on how we’re using our money, the outcomes for us and our business are dramatic. It is a lifestyle changing exercise. So I’m glad you brought that up because obviously learning from somebody else’s experiences. Is the, is the cheapest lesson in the world.

John: Yeah, no doubt. I subscribed to everything you just said. You know, my sleepless nights, if I go back in time was when I was gonna make payroll. It’s the time where you’re not sure how you’re going to pay your vendors and they’re all calling and screaming at you. Those are, those are really tough times as entrepreneurs. And, and when you get through them, you look back and go, you know, what could I have done differently? In my case, the situation of failure was. We were growing faster than we can actually afford to grow. And I was like, let’s go to a hundred million. Let’s let’s go build this business. Let’s go, let’s go, let’s go. And, and we were reinvesting reinvesting. And Oh, we don’t need cash. Let’s go to the bank again. Okay. Let’s get some more money in here. Okay. Now we need some investors. Okay. Now my equity is going down. It was all for what, for what purpose I’d rather own a 100 percent of a 10 million company than 10 percent of 100 million company. It’s the same math. What was I trying to do? What was I trying to create? And I’ll tell you, Tim, that one of the biggest aha moments for me, and it happened after this whole failure as I was researching is I realized that, you know, your net operating cashflow that you’re generating from your business and how you manage the net operating cashflow is much more important than your profit and loss statement or, or your balance sheet, even to a certain degree, like is your business generating cash? That you can then reinvest to generate more cash. And that’s just really an important metric. And I think a lot of entrepreneurs glamorize raising capital. I did, Oh, he just raised 20 million dollars. Look how cool we are. When in reality, I needed those monies to go reinvest and scatter and, and, and try and build things when in reality, the things I already had weren’t generating enough cashflow to begin with, right? And so there’s a lot of things like that, that I’ve learned. There’s a fantastic article that, is a Harvard business review article that also made a dent for me, which was how fast can your company afford to grow? And what I found was I was trying to grow my company 30, 40, 50 percent a year. But based on my cashflow, I could probably afford to grow 5 percent a year. Well, where does that difference come from? Where’s that 45 percent difference come from and how fast your company can afford to grow and how fast you want to grow. It has to come from investors or banks or other people’s money, meaning the cashflow you’re supposed to pay Peter, you pay Paul, and then you get caught in this whole situation that ultimately ends up, you know, with the, with a bad situation happening. So, you know, as I work with entrepreneurs now, I was working with a group, last couple of weeks. And based on their, their cash flows, if they just make a few tweaks to their AR and AP and working capital days, it could be an a hundred thousand dollars of difference in cashflow in the given year. And think about the relief that that would provide just by some small tweaks of looking at that. And now you don’t need bank money. You don’t need investor money. You got this in your own little business. You just got to do it the right way.

Tim: Yeah, exactly. And, you know, John, I want to share a, an example of that. So we, we work with small business owners, showing them how to create a succession plan, how to attract, retain and reward key people and how to set up an exit strategy. So we worked with a company about eight or nine years ago and we set up their succession plan. And we told them, listen, by doing this, by setting this up, you’re actually going to be building a sinking fund that you can borrow against. And their response was, you know, we’re not interested in that. And I, you know, I didn’t push it at the time, but think about where we were. Okay. Interest rates. So when they went to a bank, Interest rates were two and three quarter percent to borrow on a credit line again. This is going back eight or nine years ago So fast forward to last summer and I get a call from this guy It’s July. It’s August of 2023 And he said hey Tim remember that succession plan we set up? I said, yeah. He said, we, we funded life insurance policies. I said, yep. He said, you said we could take a loan. What does it cost to take a loan now? And I said, well, before I answer that, can I ask you a question? He said, what? I said, what changed? So he goes, I bought a truck, which I always do by taking a draw on my credit line. And I usually pay it off over a two to three year period. Well, do you know that they want nine and a half percent to borrow on a credit line? He said, what does it cost to borrow on a life insurance policy loan? And I said, at the time it was five and five and a half percent. He said, well, I want one of those. And I said, well, you’re, you’re in, you’re in luck because it’s that option is available to you. And so I said, but here’s what I’m going to do. Normally I said to him, Chris, we’ll help you get the loan, but I want you to go through this process. So you understand how easy it is. So here’s what I want you to do. I gave him all the information he needed, call the company. And when the money hits your account, call me. He said, well, what’s it going to take about two, three weeks? I said, no, it shouldn’t take more than four or five days. Three days later, I get a phone call. He said, Hey, I just checked my business checking account and there’s $325,000 in there. And I said, well, you sound surprised. He goes, I can’t believe how easy this was. And I said, well, Chris, this is what I’m telling you about. But the point is this, when you have access to capital, opportunities will find you. And that’s really what we try to impress upon our clients is, listen, you may not have a need for this today, but we don’t know what the economic and, you know, situations are political situations are going to be in our country, you know, in the future. And if we’re able to position you to absorb whatever crap gets thrown at us, man, that’s going to position you and your business for opportunities in the future.

John: Yeah, Tim, similarly, you know, one of the things I talked to the entrepreneurs a lot about, I’m sure you would subscribe to this or even talk to them as well. It’s like, you know, Vern Harnish in his book, Scaling Up, talks about core capital target. Hit your core capital target, right? Which is have your six months to a year of operating expenses, you’re debt free. And you’re generating strong net operating cash when I like to say a million dollars a year when you when you get to a point where you’re generating a million dollars a year of net operating cash flow from your business and your debt free, and you’ve got the kind of reserve account of operating expenses, your position of power to grow your business is so much stronger. What ends up happening is businesses start making, you know, 200k, 300k, or 400k. And then they go hire a VP of sales. And then they go hire this person and they try and grow a little too fast. And then, and the cycle just kind of repeats itself over and over and over again, you know, try and get to that core capital target. And then the whole world opens up for you to grow your business.

Tim: Right. So John, you have such a such an incredible message to share. I mean, just the fact that you, you know, you got fired from your own company and to a lot of our, our listeners out there. That’s almost incomprehensible, right? But you also realize how and why it happened. And you learn from it and now you’re out there teaching other people how to prevent that from happening to them, so how John how could people get in touch with you and where could they buy your book etc?

John: Yeah, so the books on amazon The $100M Journey, the website is 100 M as in million. So 100mjourney.com and people can find me on any social platform. John St. Pierre 100. But yeah, feel free to reach out. I do schedule 30 minute free consultations. People want to talk through the book or the business, and I also have a free workbook that goes along with the book at 100mjourney.com. If people want to download that as well with a lot of templates and tools.

Tim: Yeah, and we’ll put that in, in the, the, episode notes so people could contact you, John. It was such a pleasure. They have you on our show. Is there any parting shots you have for us?

John: Yeah, I think the parting shot I would have Tim based on this conversation. It’s something I didn’t have, but when it comes to cash and protecting your business and growing your business, have patient ambition, it’s good to be ambitious, it’s good to have big goals and go get them, but have patient ambition because that patience will really serve you as you build your business the right way.

Tim: Such a great lesson. Thanks so much, John St. Pierre, The $100M Journey. John, thanks so much.

John: Thanks, Tim.

Tim: Welcome to the control your cash podcast. I’m Tim Yurek 

Olivia: and I’m Olivia Kirk. Today we welcome Harlon Pickett of Eagle Care Health Solutions. Harlon, thank you so much for joining us on this episode today. 

Harlon: Absolutely. Olivia, Tim, it is a pleasure and my honor to be here. 

Olivia: Yes. And Harlon, you’re calling in from San Antonio, Texas, but we understand you work with all 50 states and I know that we have a great episode in store for our listeners today, um, with some unique solutions to health type insurance and health care for small businesses as well as individuals.

So I’m excited to get into that. 

Harlon: Yeah, absolutely. Whenever I had an opportunity to talk to Tim previously, I think It fits right in with the model that you guys use in control your cash. The thought process around health insurance, what we call the big lie, is that you cannot control your health care cost.

And business owners in particular have been fed this line. I’ll just stop right there for years and years that they had no control over it. It’s just a you know what? Next year the rates gonna go up and the next year the rates gonna go up and there’s nothing you can do about that. And as I said, it is the big lie.

There are ways that you can actually take control of your health care costs, therefore controlling your cash. 

Olivia: Yeah, absolutely. So Harlon and I had the chance to speak a little bit before, before the recording and, you know, he was talking as you were, as you were talking, Harlon, there were so many parallels, you know, between what Tim and I do and in our work is with financial planning, um, that were direct parallels with what you do and how you help people break the chains to what is normal and what is the conventional wisdom and what is presented to us that so often.

could take advantage of the business owner as well as the individual. So, um, you’re doing great work over there. So tell us a little bit about how you got started in this space. 

Harlon: Yeah, the story is, you know, the same old for many people. And that is I’ve been in this industry for almost 20 years. I was brought up to believe that insurance was awesome.

It was necessary for everybody. You know, the definition of insurance, if you’re out there and you have no idea what insurance actually really means, it isn’t someone just to pay your bills. It is the sharing of risk. The actual definition of insurance is the sharing of risk. Now, what happens whenever there is no sharing of risk anymore is you’re going to see, uh, rates really climb the way we have seen since.

The ACA, Affordable Care Act, Obamacare, has been put into place. When there’s no underwriting to be done and everyone must be considered as the same, then in essence everyone must be considered sick. So everyone has to be considered, at basically the worst case scenario, because even though it’s still called insurance, it really isn’t by definition anymore.

Because once you have, uh, now really what you’re doing is you’re paying somebody else to pay your bill. Uh, that is not a sharing of risk anymore. The insurance company takes on the full blunt of that because they have no choice but to accept you, no matter what your conditions are. Of course, this is also the reason why people have to pay the same thing, whatever your age is, whatever your zip code is.

You’re paying the same thing as everyone else is in that age group and in that zip code. The, the reason for that is, is because once again, everyone must be considered the same. So even if you are 32 years old and perfectly healthy, never been sick in years and years, and you go and you have your annual physicals done and everything is wonderful, Or you’re 32 years old, and you’ve got autoimmune diseases, and you have thyroid problems, and you are a cancer survivor, or in cancer treatment.

All of those prices are exactly the same for each of those two people. Uh, therefore, everyone is sick. It doesn’t matter if you’re the well person or the sick person. Everyone is taught, everyone is looked at exactly the same. I didn’t understand this, as many of us didn’t, whenever this change happened. So, we watch these prices increase, and then we watch the insurance companies start taking dramatic action and denial of services and deciding when people really should have something or not.

There’s a difference between pre authorization and just denying service. Pre authorization is actually necessary in many cases to make sure you’re not getting something done that can hurt you or harm you. Uh, that’s also called medical utilization management. But what we’ve really run into now is so much that is just automatically denied.

You know, there’s that old joke out there that there’s the person that their only job is to rubber stamp deny it on everything that comes across their table without them even looking at it, right? Just, they just, it just comes through there and they just hit the red thing on it and then we’ll see who appeals and then we’ll think about whether we’re going to pay anything.

And it feels that way sometimes to folks because they don’t understand. Why I just got an x ray denied when clearly I have something wrong. Why would you say I can’t have an x ray to figure out what it is? So all of these things kind of bundled together, Olivia, as I was going through my career and I realized I’m not helping the people that I thought I was helping.

People are getting denied life changing services. And people are not able to afford their insurance anymore. They’re, they’re really just putting it away. And if they do have insurance, they’re deductible so high now that they can’t afford to get their health care anymore. And I used to believe, like many people do, that health insurance and health care were the same thing.

But they are not. They are two very different things. And you do not have to have health insurance to get health care. I had to learn that lesson. And once I did, then I realized there had to be a better way. And so that’s what sent us down this pathway of what we call alternative funded health solutions that in some cases use insurance and in some cases do not, but in every case provide access to high quality health care.

Olivia: Is that the real insurance, Harlon? The sharing of risk or the fake insurance?

Harlon: You know, it’s interesting because when we go through with one of these plans, typically your group is going to be underwritten as your group, not what everyone else is in your area. And so that then is actual insurance. It is based on the health of your population, your employees. That means that, hey, a younger, healthier group is going to get better rates than that middle or older group that may have some health issues.

Is it fair? Well, absolutely, it’s fair. One provides a lesser risk than the other. That’s the way, in my opinion, it should be because now we’re using insurance again. Do you want the lower rates? Well, let me tell you, this is something very interesting. There are a number of things that we can institute into a health plan to help your group get healthier.

We can’t get them any younger. We haven’t figured that one out yet, Lydia. We haven’t figured that one out yet, Tim. We can’t get them any younger. 

Olivia: You had my attention for a second, Harlon. 

Tim: Well, Harlon, I just want to hold that thought because I got the solution for getting younger because a few weeks ago, I was up in St.

Augustine, Florida, and they have the Fountain of Youth. So, you know, we haven’t given up on that, so just keep that in mind. Mastermind 

Olivia: Sessions, St. Augustine, Florida, the Fountain of Youth.

Harlon: When you said St. Augustine, I knew where you were going there, Tim. That’s uh, that’s clearly their claim to fame there. I, I don’t know. Maybe that’s why so many people retire to Florida is everyone’s actually trying to matriculate that way down towards St. Augustine so they can get them a little drink and see what happens, right?

Tim: That’s right. Well, you know, a couple other things that you had alluded to earlier on in this conversation is that, What passes for health insurance today is really not insurance. It’s really just basically you’re hiring somebody to pay your bills and, and they’re not doing a good job at that anyhow. And you know, the other thing, you know, you had mentioned the affordable care act, which every government program that comes out with a name sounds like this great thing for the consumer or for the Average person, right?

The Affordable Care Act. It’s neither affordable and they don’t care. They don’t give a crap, you know? And it’s funny. And you talk about the lies, right? So I’ll, I’ll just, I’ll take over here. I’ll carry the ball for you here, Harlon. If you like your doctor, you could keep them. Obama. That was it. That was the truth.

Or how about. If you like your health plan, you could keep it. Well, none of that turned out to be true, but I guess we have to also accept that 81 million people voted for a guy who stayed in his basement.

Harlon: Well, I’m not going down that pathway with you, Tim, but I hear what you’re saying, you know, the thing about that act and you missed one key part of that whole thing. We can’t read it until we pass it. Then we’ll take a look and see actually what’s inside of it. That was just one of the most famous things ever to me.

It’s so, first of all, you’re just too dumb to understand it, people. You don’t realize how much we’re helping you. Y’all read it later. It’s like, really? What could go wrong? It’s the old saying, right? I’m from the government and I’m here to help. Run for the damn hills when you hear that, folks. Run for the damn hills.

Olivia: Yeah, absolutely. So, Harlon, let’s pivot back. Tell me, how, so, as far as, from an employer’s perspective, let’s say someone has a small business and they have normal health health insurance from, you know, wherever they get it. Um, how could your solutions help them to, you know, get their people better care, healthier and lower the cost as well?

Because that’s a huge burden. I know it’s a huge burden on the on the business owners to the point where some business owners aren’t offering Uh, insurance to their employees. Even 

Harlon: Yeah, that’s something that we ran into a number of times. And once again, it’s one of the things that opened my eyes as well.

So some of the clients that I had some of the small group clients that I had within two or three years of the passage of Obamacare, they were out of that business, right? They were out of that. I’m giving I’m providing health insurance to my employees business, not out of business, out of business, but out of that particular business.

Because Transcribed If you have less than 50 employees, you are not required to provide health insurance. And that number, that less than 50, that makes them about 90 percent of the businesses in the United States. So that means that the majority of businesses are not required to provide insurance. They do it because they want their folks to have, you know, access to health care.

They care about their people. And the unfortunate part is when they do offer it, it eventually becomes such a burden or becomes, uh, the plans change to where there’s very high deductibles, very low usage, and it ends up becoming a burden to the employer and the employee at the end of the day. So now the employee is wishing they didn’t have anything offered because they may actually qualify for a nice tax credit and be able to get that.

Another crappy plan, a different crappy plan, we get a crappy plan on the marketplace instead of a crappy plan from work. And, so, that just, it changes the dynamic of it. So, the answer, of course, is to look at what is going on with that company and asking them a very interesting question. I’m sure y’all never ask your clients this, because it doesn’t appear anyone in health insurance does anyway.

Well, what do you want? What do you want your health plan to do? What do you want it to look like? What are the benefits that you believe your employees would like to have? Would you like us to talk to them and find out what’s important to them? What’s their overall health? What type of care do they need?

When you ask those questions and then the employer realizes that they can actually have input on what their plan looks like and the benefits that are built into it, it changes the game dramatically. And here’s the other part. Most health plans, and I talked to you a little bit about this before we started.

Health insurance and health care are two different things, but we’ve been brainwashed in this country to believe that health insurance equals health care, and especially for small employers. But what is not built into any of your traditional health insurance plans is health care. Now think about that for a minute.

There’s nothing in there. that there is actual access to health care built in. Even if there’s a copay, you’re like, oh no, no, but there is. See, I have this copay where I get to go see a doctor. Okay, how’s that working out for you? When you finally get to see that doctor, how long do you spend in the waiting room?

When you finally get out of the waiting room and into the room, how long do you wait before the doctor shows up? When the doctor finally shows up, how much time do you actually have with that doctor? When that consultation of five to seven minutes is done, what are the next steps? Well, I can promise you it’s typically going to be one of two things.

Hey, it’s time for a new medication, or I’m going to refer you to a specialist for that. Even if it’s within the scope of what that practitioner can do, they typically don’t have the time to treat you and the inclination, because They know that they’re going to actually receive bonuses by pushing you up that chain.

The more they push you, it’s not about writing medication scripts anymore that give them bonuses. It’s about feeding up that chain. healthcare system change. They need you to see a specialist, and then another specialist, and you know what the best possible outcome could be? Surgery. Oh my god, I wouldn’t believe how much money they’re going to pour down on me if I can get someone to have some surgery.

That’s a beautiful thing right there. It is. Talk about a conflict of interest. Well, of course it is, but imagine that every single year you could guarantee one thing, and that is the compensation you received was going down. Would you like that? Olivia, would you be happy if every year you knew the one thing that you could guarantee is that your, your job was going to guarantee you a lesser income?

Well, that is primary care in our country. Primary care every year gets anywhere from a three to five percent decrease in how much they’re getting paid by Medicaid, Medicare, and in many case health plans. However, their expenses go up every single year. So, they’re being treated, as the old saying would go, as a red headed stepchild, when they are actually the primary person, primary care, primary person, that determines what your health is going to look like.

What is your journey going to look like? Well, let’s take that health system out. How do we switch things up, right? How do we make it better? Let’s take that health system out there. Let’s get back to that patient doctor relationship. where we have what’s called direct primary care or advanced primary care or even direct specialty care where you have, in essence, your own corporate doctor, your own company doctor for your employees, where they can even text with a doctor 24 7, where they can, they can know they can be, I mean, when’s the last time you were able to text to your doctor and actually get a response?

Right? I mean, you can’t even talk to him. You call the office and you’ll never get a call back from the doctor. I’m lucky I could get to the nurse. Maybe, you might eventually get to the nurse, right? 

Tim: Maybe, maybe. 

Harlon: Maybe, right? This is, when we get these relationships in there, when we bring back that doctor patient relationship, now we’ve actually put health care back in the health plan.

But notice what I didn’t say there, health insurance. I We’re building a health plan that actually is what’s called the health care supply chain. So we bring in all the different parts of what a health plan or a health insurance plan would look like, but we build it in a very, very unique way so that it benefits the employee and the employer, not an insurance company.

Tim: Well, Harlon, it also, it appears to me that it also benefits the physician. 

Harlon: Absolutely. 

Tim: Right. So, I mean, there’s three stakeholders in this deal and they’re certainly the patient or the employee. There’s certainly the employer who’s paying the lion’s share, if not all of the cost. Right. And then there’s the physician.

And so the physician is paying is is getting paid. To do what he loves to do the reason why he went to medical school or she I’m sorry right because they want to take care of patients and that’s one of the things that I’ve seen in this corporate world of what is now and I hate to use the term health care because it’s really not health care but in this you know big corporate health care conglomerates that have taken over what you’re seeing is the care is just not there because, you know, doctors don’t have the time and they’re really not compensated to do what their patients expect them to do, which is to care for them, right?

Harlon: That’s exactly right. And it’s interesting. We talk about it, you know, still the number one, I’m sure you guys know this very, very well with the business you’re in. The number one reason people file bankruptcy in this country still to this day is medical debt. And for the first time ever, the numbers prove out that more people that have medical debt also have health insurance than those that don’t.

So we’ve seen that this thing is, it’s not, it’s not about not having insurance. In other words, the people who have health insurance, more of them now, there’s more of them that are having bankruptcy due to medical debt than those that don’t have it. So it’s, it’s not about insurance. It’s about access to health care.

And it’s about how you get that access. And just knowledge. And that’s the problem is the other part of it. People simply don’t know. And, and that’s the, that’s the difficult part. But the other side of that is what you just talked about with doctors. And that is the moral bankruptcy that happens to physicians when they’re not allowed to practice medicine.

And the way that they truly want to. They truly have a desire to do what’s in the best interest. But they simply. are not allowed to because of the machine that they have found theirself in. Um, we see record numbers stepping away, retiring earlier, completely getting out of medicine in a time when we can.

We cannot afford to lose any more primary care physicians. They’re just leaving in droves. and the folks coming out. Remember what I talked about. Hey, here it is. You’re going to be the lowest paid coming out and every year your pay is going to go down. And by the way, Mr. Med School student, can we get you to be a primary care doctor?

Yeah, good luck with that. I think I’ll be a podiatrist. Or whatever, right? I certainly don’t want to be one of those guys who has a high workload and a low pay. But this is the beauty of what has happened. There’s always the balances, right? The beauty of what has happened is it has caused a remarkable number to step away and say direct primary care is the answer.

This, this base where I’m not, I don’t accept insurance, I don’t accept Medicaid, I don’t accept Medicare. It is simply a relationship between me and my clients. And I’ll only take so many because you’re going to be guaranteed same day or next day appointments. and you’re going to be guaranteed the care that you truly deserve.

And the, the primary care physicians we see that are using this direct primary care model, they’re taking care of anywhere from 85 to 90 percent of all of your health care needs. A primary care doctor can take care of so many more things than what you believe they can, Before they ever have to send you to a specialist.

Whenever they have time to treat you. So in direct primary care, you’re getting 30, 45, even an hour to spend with your physician. Not in the waiting room, but with your physician. They don’t stop you and they say, Well, you know, uh, Olivia, I see you came in for four things today. But you know, we have a limit of three.

So, we’re going to talk about which ones are the most important to you. And then you can set another appointment for four months now to talk about that fourth one. I’m not allowed to really talk about four things. I don’t, I can’t put that in my code thing. If we did that, I wouldn’t get paid. And I can’t afford to not get paid.

You don’t want the, you don’t want the office to close, do you? Come on, help me out. And that’s real case stuff. That’s ridiculous it should be that way. But it’s not that way. Whenever you have that relationship with a primary care doctor in the direct primary care or advanced primary care setting. in a membership base where we’re taking care of your employees and we’re taking care of your business and we’re making sure they get healthier, not sicker, and we’re making sure they can afford care and there’s not any barriers to care.

It changes things dramatically. 

Tim: So Harlon, that that is so such a such great, uh, insight on, you know, the problem that is faced by the employer, the physician. And the employee. So how did you see, or how did you have the foresight to see the solution? And what have you seen as the result of implementing this plan?

Harlon: Yeah. So I would love to take credit for all of this and it was all my idea. And, but it’s simply, it’s not the case. I did something kind of crazy. I went to places and I listened. I listened to others that had these great ideas. I listened to others that were fighting the good fight. Other rebels, as we like to say.

Other disruptors. Other folks that were seeing the problem and looking for solutions. I listened, and some of it I agreed with, some of it I didn’t. Some of it was just even too crazy for me. And I know that’s nuts, right? I mean, because I do some crazy stuff. But some of it also I didn’t feel like went far enough.

So what you get with eagle care is you kind of get what I believe is a bit of a balance, a balance between, you know, the old ways and some of the new ways. While I am not a huge fan of traditional insurance models now, I still believe they have a very, very important place. There are times there are groups that simply because of health issues are ongoing health use.

In particular, they have to stay with a fully insured health plan. Or we have to do some type of hybrid where some of the people are on a fully insured health plan and some people are not. It’s all about the group themselves and building something that’s custom for them. If you don’t ask the right questions, there’s no way you’ll get the answers that help you determine that.

But this journey has, is not easy. It’s still, it’s still not easy, Tim. Still not easy, Olivia, because Employers have been told this big lie that I talked about earlier. It’s been, it’s been talked about for so long. They just don’t want to hear there’s something different. They just don’t believe that there’s a chance that they could control their health care cost.

And when you start talking about something that’s not one of the big ones, if it’s not a blue, if it’s not a United Healthcare, if it’s not a Humana, if it’s not an Aetna, if it’s not one of those, then it just must not be any good. I mean, why would you even talk to me about something like that? That just doesn’t even, I mean, my employees have to have that blue cross blue shield on their card.

If they don’t have that on their card, they’re gonna, they’re gonna hang me, man. I can’t have that. Why? Why? Why is that? What about some education? What about we really asked him how well this plan is treating them and what is happening on this plan? I think you’ll be surprised. I think they’ll be surprised because even people who believe they have to have something like that once.

You really ask them the questions on how they’re being treated, and on what their experience has been, sometimes that film is lifted from their eyes, and they’re like, you know what? I’ve had all those things happen to me. Why do I need this card exactly? 

Tim: You know, Harlon, it’s, it’s not as much film lifted from their eyes, but the scales are lifted from their eyes.

Harlon: Yeah, no, I mean, you’re right. It’s, it really depends on how blinded they are. What’s, what’s interesting, it Is we have some that there is no conversation. They have had such bad experiences that it’s like, I don’t really care what you’re doing as long as it ain’t the same ol same ol right? All the, the only thing I don’t want is status quo.

You just tell me whatever we’re gonna do and I’m in. And then you’ve got the other ones that they’re just not ready. And that’s okay. It really is okay. We’re gonna show you the other way. We, maybe we just put small little steps in there. Maybe the first thing that we’re going to do is we’re going to address what you’re spending on your prescription drugs, because that’s one of the number one things that kills health plans is the high cost of prescription drugs.

Maybe we put something in there where now you’re going to start getting some of those overseas. Or now you’re going to start doing a little bit of different thing for specialty. Putting just a few little things in there can have the impact of saving tens of thousands of lives. Depending on the size of the group, hundreds of thousands or even millions of dollars from your health plan.

And once an employer gets a taste of that, Ooh baby, here we go. They’re ready. They’re ready for at least another step. Another step, another step, and Uh, you know, we’ve seen turnarounds as long as, you know, three years before groups were ready to really start making that dramatic change. You just work at whatever pace they’re going to because the number one thing that we’re looking to do is meet that group where they are.

And help them negotiate this incredibly difficult system so they can do the best thing for their employees and for their company. 

Tim: So Harlon, your solution is not an all or nothing. So it seems, it appears to me, if I understood you correctly, it’s the kind of thing where you could sort of ease into this and transition away from the conventional wisdom traditional health care plan.

Harlon: Yeah, absolutely. And you can even have a traditional plan at the same time you’re doing this. You can have a traditional plan and once again, we can ease in, uh, different solutions, different point solutions, different ideas and concepts into it with your, even your traditional plan so that you can start getting a taste and a feel of what it looks like.

You know, one of the main things that we have a difficult time with when someone is fully insured is they have no claims data. The insurance company will not provide us anything to let us know what the overall health of that group is. So as we can start putting a few little things in there, even if we keep them with a major insurance company, but we move them to what we call self funded.

It’s not as scary as it sounds, but once we put that in there, it’s just a, just a way the thing’s funded, folks. It’s not really. You’re self funding already. Who’s paying the premiums, right? Whose money is it? It’s your money already. So, just because it says fully insured, it doesn’t make any difference whether it’s fully insured or self funded.

It’s still your money, okay? It’s just the way the buckets are set up. But even if we do that, that means that now that data is yours. You are allowed to look at that data, so we’re better able to make the adjustments where those adjustments need to be. When you’re fully insured, we have no idea where all your costs came from.

We have no idea if you really should have got that rate increase or not. There’s no data. The insurance company just tells us, Oh man, y’all had a really bad year. We’re going to have to kick up your rates. Based on what? Well, we can’t share that with you. That’s proprietary. What? I just spent my money and now you’re telling me you can’t tell me why you want more of my money.

Where else does anyone do that? Really guys? Think about that. Where else does anyone have that same thing happen to them except for in the crazy world of healthcare and health insurance? 

Tim: Yeah, that’s that’s a great point. And you know, Harlon, you made a good point earlier a few minutes ago about it’s your money because a lot of times the employee Because the employee may not be paying directly or paying the lion’s share of the cost, they think that, okay, my employer’s paying, paying this.

But what they fail to realize is in the absence of the healthcare, they would get a higher wage. And 

Harlon: it is, you know, so one of the number one things that people miss out on is realizing that these, the cost of healthcare. is keeping money out of their own pockets because whenever you a recent survey came out and the question was asked with the cost of health care continue to increase and even outpace and outpace inflation right now of 172 employers that were surveyed across groups of less than a thousand to over 5, 000 across every industry you could imagine.

91% said that in one way or another, we’re going to have to push those costs off onto the employee as they continue to go up 91%. Well, that can be done in various ways, right? It can be done by your premiums go up. It can be done by that three, five, 6 percent raise you were going to get. You don’t get it.

Okay. Believe me folks, that is pushing the cost onto you. Trust me. If you’re not getting a raise Blue Cross is Aetna is Okay? Your insurance broker is. Ask him. He’s a heavy guy, man. He plays, uh, he plays golf with the director of HR, uh, every couple of months. And, uh, he, he takes him out to dinner so he can stay on that health plan so he can enjoy your raises that you’re not getting.

Okay? That’s the reality of what’s happening out there right now. But that is, that’s directly, uh, to, to your point. It’s taking money out of employees pockets because of the increased cost of healthcare. 

Tim: Yeah, so thanks for making that clarification. So the other thing is, what are you seeing as far as, and I know you had alluded to it earlier about, you know, your physician under, under this plan, your, that your physician is now allowed to spend more time with you and actually maybe carve or craft a, uh, an actual health care plan for you to improve your health.

Get better, what have you. What other positives are you seeing or results are you seeing from this type of care? 

Harlon: So one of the big issues that we have in this country is, uh, about 61 percent of folks don’t go to the doctor unless they’re sick. So that means they’re not getting the preventative things done that they should be getting done.

And there is not a focus in United States on primary care like there is in most other first world countries as it were. For And because of that, we have seen chronic illnesses. I mean, look at what’s happened with diabetes and look at what is what happened with thyroid issues. I mean, they’re in chronic, terrible levels.

I mean, it’s epidemic like with what’s going on with some of these chronic diseases because they’re not being controlled properly. So we’re seeing a workforce that is not as healthy as it should be. But with these health plans It’s not just the access to the doctor, but it’s the it’s the removal of the barriers to get to see the doctors.

The removal of barriers to get to have access to a nutrition without having to spend a bunch of extra money because it’s included as part of your plan so that you can now get that taken care of. It’s I’m not having to deal with this chronic back pain anymore because now I have access, in many cases, to zero out of pocket to find out what’s going on with my back.

I can get my imaging for zero out of pocket. I can have that imaging looked at and read and diagnosed for zero out of pocket. And now if I need to have other things done, it’s going to be affordable or it’s going to in some cases, when we put plans together, zero out of pocket. all the way up through surgery if necessary.

Last thing we want to do, if we don’t have to, we don’t want you to go through surgery. But why are you dealing with this chronic pain in your back, in your knee, in your shoulder, and wherever? So it’s access. It’s true access and removal of barriers to health care, not just at the primary care level, but all the way up that chain of what of the different things you may really need.

And in a lot of plans that we’re doing now, too, people want to look at more holistic. They want some of these natural solutions. Maybe they want to look at chiropractic or even acupuncture or acupressure. Some of these other things. We can build that into a plan now. If that’s something that your group wants to have, we can do that.

There’s just so many things that are out there now that will help remove the barriers to access to health care. And that’s, that’s the big deal, Tim. To answer your question, that’s the big part. Remove whatever barriers there are to health care. 

Olivia: Yeah, Harlon, I was, I was actually going to ask about the holistic because I feel like so much of our country and so many in our country faith in the conventional care, um, because they’re not getting what they need and getting actual help and results from their doctors, regardless of how many times they go to see them.

You know, it’s always like, Oh, I have this chronic condition, this chronic symptom, and there’s nothing wrong with me. So finding, you know, alternative care solutions, um, is something that I see very commonly now, you know, especially as the younger generation, I feel like, you know, the millennials, the Gen Z is I’m sure older people as well, but I see it in our marketplace very much looking for other solutions.

Harlon: Yeah, they absolutely are. And many folks are much more open minded than others on those type things. And there’s nothing wrong with that whatsoever. But your traditional plans, they’re not going to include those things because This is the way it’s always been. I mean, that’s, that’s one of the scariest terms you’ll ever hear, but that’s, this is the way it’s always been.

We don’t do that because this is the way it’s always been. Um, most of our options now, uh, we include some version depending on the plan and what the employer wants. We even include some version of stem cell therapy. 

Olivia: Wow. 

Harlon: And we’ve seen stem cell therapy, especially in the MSK, the musculoskeletal. Uh, we’ve seen that have dramatic effects where there’s a lot of folks that may have had some kind of invasive surgery that haven’t had to have any.

They, they had the stem cell and they’re, I mean, fully 100 percent good to go and have not had to have the surgery at all. So imagine that cost savings for an employer when he didn’t have to pay those tens of thousands of dollars for some surgery, a knee replacement maybe. Uh, and instead he was able to, to get, you know, spend a couple thousand bucks on a, a treatment regimen for stem cells and the individual is good to go and super happy with everything that happened.

Olivia: Yeah. There’s, 

Harlon: there’s great answers out there. 

Olivia: And the other thing I was thinking about Harlon is, you know, we talk about saving money and, you know, saving money is great, but if you don’t have your health and your employees don’t have your health, like you don’t have anything at the end of the day. You know, you can have.

millions of dollars and feel like crap and have no solution and you don’t have it. You don’t have anything. You’re at the mercy of the system at that point, the system and God. Um, so having solutions that are accessible, affordable, and are actually going to give the employees and the patients results is something that’s very powerful and certainly worth looking into.

Harlon: Yeah, I mean, as a, as a paraphrase here from, from Vir, from Virgil, uh, the greatest wealth is health. 

Tim: Mm hmm. Yeah. Exactly. You know, in Harlon, so I would imagine because there’s a, I won’t say a greater focus, but I guess the reality is there is a greater focus on preventative care under this model. Yes. And there’s certainly, uh, so I would imagine that the overall costs.

to the plan or to the company are probably significant or the group. Let’s say the, the, the employer group, I would say the savings have to be significant. Is that a fair estimate? 

Harlon: It’s, it’s somewhat fair. So let’s remember, we have to meet a group where they are and what we see is typically a very dramatic savings, but sometimes it’s over three years.

If we walk into a group that has a number of health concerns that can be corrected through better engagement with primary care, with better engagement and you know, the really working through those chronic conditions to get them under control. Then they may not see a savings in that first year. In fact, they may see a slight increase in cost that first year as we get their group healthier as we implement all the different pieces of this because I promise you It’s never just as easy as everyone in your company says yay a new health plan.

Let’s all do new stuff It’s gonna be awesome. They say they’re gonna make us healthy So we’re gonna do all the new things that they want us to do from day one 

Olivia: because health insurance 

Harlon: Exactly, right? I mean, they’re so excited whenever they do in the insurance guy comes in and talks to him about all the new stuff And oh, look, we have a new app.

I’m gonna play on it every single day and keep track of all my stuff It’s gonna be awesome No, you’re not going to have that. Um, it’s going to take a little time. There’s going to be some engagement issues we have to overcome, depending on your group. Some groups are easier than others, but there still has to be some buy in.

And typically, your second year is better than your first year, and your third year is where you’re knocking it, starting to knock it out of the park. If you don’t knock it out of the park that year, you’re usually hitting a triple. And here’s why. Because especially if it’s designed To benefit, to give greater financial benefits to the people that fall in line, okay, I’ll say that.

But the people that actually follow and go through, get their, get their annual physicals done, uh, work with the, uh, the medical utilization management to make sure they’re getting the proper care at the proper time at the proper place, getting quality health care, and they follow this pathway. Once the other folks that are not doing that see the results of these folks, They want to come over here.

They say, wait a second, I had a knee replacement, and John over here had a knee replacement, and it didn’t cost him anything, and he was back to work in eight weeks. Mine was not messed up, but I got an infection. I got an infection, and then I had to be readmitted to the hospital. They had to clean that out, and I had to be on antibiotics for two weeks, and then because of that, I ended up having to have another knee replacement.

And it was 8 months before I was back, and my total out of pocket was 28, 000. What the heck happened? How did he get his for free, and everything went great? And mine went horribly awry. I thought I went to a good doctor. Based on what? Honest question. Olivia, Tim, right now. How would you decide, if, if you had to have a major surgery, how would you decide that the doctor you were going to see was a good doctor?

Olivia: Referrals? 

Tim: I would probably look at referrals or do some research. 

Harlon: Where would you research at, Tim? That’s a good, where would you research at?

Tim: Probably at, at the doctor’s website or the hospital website.

Harlon: You know what’s interesting about the doctor’s website, Tim, is everything on there shows five star Google reviews. He’s a great doctor, just ask him.

Olivia, what are your thoughts on that? Where would you, if you had to, if you had to check on a doctor, where would you do that at? 

Olivia: Well, I was also thinking, so, I mean, I don’t know what I would do because there’s nothing on the websites. There’s, you know, the doctor’s picture. So he’s a person, um, where he went to school, his address, his phone number, how to get in touch with him.

So, but I mean. I think another option would be, you know, the referral from your doctor, but I was thinking that at the end of the day, I think the, I would imagine the surgery, the success of the surgery would have to do with your, your overall health and your body. So, you know, individual results may vary.

Well, 

Harlon: okay. So here’s another question then. If, if there’s two surgeons working at a Same exact hospital, same exact operating room. One does this surgery anywhere from 20 to 25 times a week, and the other one does this surgery anywhere from 2 to 8 times a month. Which one of those surgeons would you want to go see?

A. 

Olivia: The first 

Harlon: one. 

Tim: So, so where do you find that information? 

Harlon: This is the interesting thing, right? You have to know what the quality scores are for surgeons and there are resources out there, but typically it’s not easy to find as an individual. Uh, we have that information in our health plans and we have nurse navigators that help provide you that information.

Uh, we also have the difference in facilities. Here’s another thing. We know where a surgeon can that maybe a surgeon has a score of 93 at one facility and 60, 70 at another facility. Why would that be? It tells you that one facility is doing a better overall job of cleanliness and the team at this one is a better overall team than what they have at the other facility.

Those type numbers are very important because you’re still getting to see the same doctor. But would you rather go to the place with the better outcomes? Same doctor. It’s not the, in other words, in this case, the doctor score reflects everything guys. It reflects the outcome. It, uh, it, uh, reflects this, uh, readmittance.

It affects the infection rate. So even things that are outside of that particular surgeon’s purview, as it were, all fall into that score. That’s important information, in my opinion, but there are multiple places where you can get this. Typically what we do is we have ways to aggregate all of that information so that then you get a real true score of what that looks like for that particular surgeon.

We have seen wildly different scores for the same exact person. And then also wildly different scores even at the same facility. For more information visit www. FEMA. gov Because sometimes some of these physicians will not work with anybody but their own team. And when that happens, when you have that specialist that only works with their, that one team, you’ll see very consistent scores at different locations where it may be different for other doctors.

It’s kind of an interesting little thing, but if you don’t know, you don’t know. I wouldn’t have known any of this stuff until I started listening, right? I started listening and hearing like, whoa, wait a second. I was, I heard a great story one time where the guy said, I was referred to this doctor for this, for a neurological, uh, situation that I had.

I was referred to this doctor, and he was great. He was, he was the head of the department at this hospital, so that means he’s got to be a great doctor. And I went through the whole process, and I was getting ready for my surgery, and then I talked to my buddy, a friend of mine is who we talked to, and he said, he said, would you like me to see what that doctor’s score is?

He said, yes, I’d love to know what that score is. I mean, I’m certain that he’s a great doctor. Once again, he’s the head of the department here. But yeah, just to make me get that warm and fuzzy, give me that, give me that score. Called him back a couple days later. He said, you know, I got some good news and some bad news for you.

He’s like, well, tell me the bad news. He goes, well, your, your doctor, your doctor score was 8. 64. Like, that’s not terrible. Out of a hundred.

What? Out of a hundred? He said, how’s the guy even still practicing? He said, well that’s the problem. He’s not really. He does just enough to keep up his certification to be able to do this surgery. He’s so busy administrating as the head of that particular department, he doesn’t have time for surgery. So, you’re kind of out of practice when that happens, right?

It’s not fair to the surgeon, and it’s damn sure not fair to the guy that’s affixing to go under the knife. He says, well, what the hell could be the good news? He says, well, two of the guys that work under him both have scores over 95, so I’d highly recommend maybe talking to one of them. So, that’s what he did.

He changed doctors to one of the guys, uh, the guy actually had an over 97, a 97. 2 rating, and everything went wonderfully for him. But you don’t know what you don’t know. Once again, this guy’s the head of the department. He’s got to be the best there. Unless he’s not. But how do you know? 

Olivia: You don’t. You don’t.

And hopefully you find out before it’s too late, right? 

Harlon: You’re going to find out one way or the other, Olivia.

Tim: Yeah, and And it could very well be that he became the head of that department because his best friend was the guy who was hiring or appointing the heads of the various departments. Right, 

Harlon: or he could have been, he really could have been great at administration, right? It could have had nothing to do with his skills, but he was really good.

And maybe he was a really good leader and a really good administrator and he found his niche. And that’s where it was. But at the same time, I don’t know how hospitals work. Clearly, this one worked where he still had to maintain that certification and obviously his licensing to be able to be the head of that department.

But he was, in my opinion, he was doing no one a favor by doing that, but they didn’t ask me for some reason.

Olivia: Okay, Harlon, well, how could our listeners get in touch with you if they have any questions, you know, as an employer, um, looking for services for their, for their business as far as healthcare is concerned? 

Harlon: Yeah, absolutely. Uh, obviously they can reach out to me directly at my email at hpickett at EagleCareHealth.

com. But if you want to learn more about EagleCare itself, you can go out to EagleCare. com You can also find me on LinkedIn I have lots and lots and lots of content for you on LinkedIn Go out love to connect with anybody and everybody on LinkedIn. We do monthly audio rooms live audio rooms on LinkedIn called why does health care suck and Every month we talk about different subjects.

We are right now on a three part series of What’s going on with employers. So the why does health care sucks series has talked about all kinds of things, including some of the barriers to health care. But in this particular part of the employer point of view, it has been what is keeping employers from making that change.

So if you go out, you can find recordings of that as well. But go out to linked in and Find me there. And then, of course, as I had met Tim originally, he was on my podcast, the Health and Well Power Hour. You can find the Health and Well Power Hour at hwpowerhour. com or at any of the typical places where you digest your podcast.

And then on March 4th, we kicked off our once again series that we were doing for a lot last year and kicked off in a new format this year across multiple platforms. And this is called the kickstart. So each week, 10 a. m. Central time, we will do a broadcast about trends and news in the health insurance and health care world that really kind of keeps you up to date with what’s going on.

So follow all of these different things. Reach out to me personally. Love to talk to you about what’s going on with your company and how we can help you If you don’t want to work with us, I promise we have got tons and tons of other folks around the country that are doing some of the same point solutions and some of the same concepts that we are.

Uh, we even have a good buddy in Puerto Rico that is doing this as well. So he can help you out there if you’re in that area. 

Olivia: Awesome. Well, so much for all of the wealth of knowledge and the energy that you brought to the show today. We greatly appreciate you taking time out of your day to You know, inform everyone about what’s going on out there and about the alternative solutions that are available, um, for health care, um, for their employees and, you know, bringing that to the forefront for a healthier country and healthier individuals that were around every day.

Tim: Yes, Harlon. This is such valuable information. And you know, when we’re talking about helping people or companies control their cash, one of their major expenses other than salaries is health care.

So if there’s an opportunity for people to save on health care, but also improve the quality of life. of health care that their employees are receiving. That all translates to the bottom line of the business as well. 

Harlon: It has been my pleasure. Thank you guys very, very much for having me.

Tim: Hello, welcome to The Control Your Cash Podcast and it is our pleasure to have Scott Goodrich. Scott is a business consultant and the name of his business is grow your damn business. But on top of that, he and his wife own a business called get your damn haircut. And Scott’s going to share with us his unique story, uh, his entrepreneurial journey. What that led him to and more importantly, what were some of the pitfalls that he had experienced? Scott, welcome to our show.

Scott: Thank you so much for the intro and thanks for having me. Looking forward to it. Tim Olivia. Nice to see you today. Thanks for having me.

Olivia: pleased to see you as well, Scott.

Tim: So Scott, tell us about, you know, you worked in the corporate world and tell us what you were going through, you know, sort of like the gestation of, you know, you get your job, you’re, you’re working in the corporate world. You think this is the greatest thing since sliced bread. And then And you know, what were the sort of red flags or the things that you had seen that said, you know, this ain’t my cup of tea.

Scott: Yeah, that it’s interesting because I had done a lot of entrepreneurial things as a teenager and coming up and then got into college and You know, a lot of the folks around me were accountants and accountants get jobs out of college, and I’m looking around going, what am I going to do, right? I didn’t really have that, that set plan.

My degree was in political science, which a lot of times leads to law school. It’s what my father did, uh, can lead to a lot of things. Well, for me, it led to a sales job because I wasn’t ready to go out on my own. So starting in sales and then, uh, made a pivot, uh, from sales, um, into sales leadership and then ultimately onto the operations side and just sort of worked my way through a couple different companies.

Moving my way up there. Uh, so kind of left that entrepreneurial thing behind me. Um, in the mid, around 2015, 2016 Um, I took, you and I were talking before we got started here, I took one of those those hits to the gut, if you will, and got, was in the middle of a company reduction and realized, although I had a job and a paycheck, it’s not that security that comes with that necessarily. Right, just because you have that all the time, right, there’s always that chance it could happen. And so when that ended, I said, how would I get more control of what I’m doing? So I had some money that I could invest and so made the decision to invest into a franchise opportunity labeled as or marketed as, um, absentee CEO, right?

The old passive income marketing. So. Mistake number one. There is no such thing as absentee CEO. There is no such thing as passive income. So, right there. Uh, so, so that, that’s learning right about. And, and we love the concept. The concept was based out of Portland, Oregon at the time and had a really good footprint in the, in the upper northwest.

So Portland and Seattle were the, were sort of the anchors of the franchise. And my wife and I just loved, loved the concept and thought it had legs. And, and the team that was leading it really had a really great story to tell. So it was easy for us to track in there, but the operating model was, was not what we expected.

So, uh, lesson number two on that is that the operating model that we were handed was, uh, was, was not ready for prime time. And unfortunately, I was trying to take some things that I learned from leading larger companies and larger teams into running a small business. Well, that doesn’t work either, right?

It’s good knowledge, like I was. I don’t know, a smart guy or smart enough guy, but it wasn’t knowledge that was gonna help me get this business started in the way that it should have. And so, uh, those first few years were painful, to say the least, trying to Be an absentee CEO without a straight operating model is just, it was a lot of, um, earning money on one side and, uh, and putting it back into the business to just keep it afloat on the other side.

Uh, you know, really treading water and, uh, on certain months drowning, um, you know, operating in the red all too often.

Tim: So that’s a struggle that a lot of small business owners work with, which is the cash flow issue. Uh, we commissioned a research report. There’s over a million dollars worth of research, and it came back with what we refer to as the three disturbing trends that threaten small business owners and put the next generation at risk. But the number one trend, as you probably know, is cash flow. And it seems that, according to Intuit, 61 percent of small business owners struggle with cash flow issues. 69 percent of small business owners either admitted to sleeping less or losing sleep due to cash flow concerns. Now I’ve worked with small business owners in the financial services sector for 38 years and here’s what I found Scott, every one of those cash flow issues was self inflicted meaning that it wasn’t the amount of revenue.

that the company had that was holding them back or was creating their cash flow issues. It was literally how they were using their money. I call that the financial golf swing. And when you utilize, when you’re using the club properly in golf, it’s a beautiful thing. You hit these straight, beautiful shots. And, but when you’re not using the club properly, it could get ugly, as we all know. But the point is, how you’re using your money is way more effective than where your money is. And that’s what we teach our clients. We teach them how to utilize their cash flow in a much better way. But one of the things, the unique things that I liked about your story, uh, share with our audience. What your budget was as far as, you know, your, your revenue and, and, or I’m sorry, your overhead. And where were you from a cash position? Because that was the thing in our pre call that really stood out and struck me.

Scott: Yeah, so I, I, let, let me admit to a few things here. So, uh, shortly after, uh, Deciding to, to build, to go into this franchise world and take this on because it wasn’t well run and because we were running in the red and my wife was already working full time. She had never stopped working. I actually went back and got a JOB because I needed to find a way to bring some more cash to the table.

So mistake number one is I went out and tried to find a salary that was going to allow me to keep this business going. So now when I say I’m literally moving money from one pocket to the other, right, it’s going in one pocket and going out. The other side because I thought that was the answer. I wasn’t fixing the fundamental challenges in the business So tim your point is spot on I wasn’t actually addressing The the the illness right?

I was on a symptom. Oh, let me just find a way to mark money I’m sure it’ll be better next month. Right and then i’m sure it’ll be the next month. So that’s that’s a wish That’s a hope that’s not a plan Right. So, so, and that kept going and going. And the irony, Tim, that I shared with you here is it’s a haircut and color retail storefront, right?

So we got it internet proof, right? You cannot take your haircuts online. So really thought that was great. Not pandemic proof. So, right as we’re getting into March, and, you know, we had been on the struggle bus for some time, just as I’m describing here, with expenses outweighing revenues, weren’t quite hitting the market, we thought we were in a good location, but we hadn’t hit it yet.

And so, we went into the pandemic really struggling and doing this kind of dance with, okay, we’ll make a little money here, but then we’ve got to put it back in, or I have to invest more personal money from a savings account into this thing. And then the pandemic hit and of course we had to shut down that was mandated by the state and we went back and look my wife and I did just recently and in our bank account at the beginning of the pandemic, we were down to 230 in our in the bank account to finance this this business and it’s all W2 employees, you know, we’re not renting chairs.

We actually are paying people to do this and you’ve got to have coverage. The model for this was a walk in business, which means you had to have people on An hourly rate, hourly plus commission, but they had to be there in case someone did walk in. So we had no idea, no predictability. We all, all we know is we had to have people there.

Do we have to have two people there? Do we have to have six people there? You never knew, right? Because we didn’t have a really good insight into that thing. I mean, it was just a lot of flawed fundamentals that sitting here today seems so obvious, but when you’re in the middle of it. And I wasn’t doing the right things.

I wasn’t reaching out to anybody. We weren’t getting all the support from the franchise from an operations side. Like, literally, we were looking for a lifeline, couldn’t find it. We weren’t aggressive in going to look at it and just said, Well, we’ll just keep kind of charging and working on this one side in order to see if this thing will ever kind of catch fire magically.

Um, so, a lot of bad stuff going on in those first three years of this little venture that we were on.

Tim: So how did you and your wife manage to work your way through that, get through it. What did you come upon or what ideas were you able to implement that got you through all of the mud, if you will. Could, could,

Scott: to heart talks. You talked about losing sleep about cash. Well, we simply lost sleep. Do we even want to open this thing up? Do we just take all of the losses that we’ve incurred thus far and close the door and deal with it? Like a lot of businesses did in the pandemic. There’s a lot of restaurants that went that way.

A lot of retail storefronts like that. Tim, Olivia, I’m not telling you guys anything you don’t know. You probably had clients or people that you know that went through that same, same journey.

Tim: could I share some data with you?

Scott: Please, let’s do it.

Tim: uh, 40 percent of all retail businesses. That closed during the pandemic, reopened. And I really think, and some of those businesses were third and fourth generation businesses. It is a sin. You know, listen, the pandemic was bad enough. But the state’s response to the pandemic Was a crime against humanity.

And it’s really a shame what they did to small business owners.

Olivia: Yeah, and at the end of the day, the small business owner is the backbone of the U. S. economy, right? And to Scott’s point, you know, there were struggles going on before that pandemic, and it pushed so many people over that edge that there was no return. You know, so a lot of people get into the small business like Scott was mentioning for that sense of freedom, for that sense of control, for that sense of, you know, being in charge of your own destiny.

And, you know, it’s, it’s not easy. It doesn’t come with an owner’s manual. Um, there’s a lot of things that have to be learned on the fly. And, you know, if you’re not going for those efficiencies along the way, it could be a real struggle. You know, especially when push comes to shove and then. The world shuts down.

Scott: Yeah, yeah, guys, guys are spot on, right? And look, this. We only had so much influence. We had o over the, the state and what was going on there. And I, I think obviously uncharted waters decisions that, that were being made, you know, that, that were impacting folks. You know, we could probably talk for hours on that.

You know, that’s, that didn’t even sweat that so much. It, we just took a person say, you know, what is going to happen here? What, what is it, what are we going to do? Because this is our money , our savings that have, and the investment that we made. What, what are we going to do here? And so this is where I have to give all the credit to my wife, who decided no, and she, she’ll be the first to tell you, she’s stubborn, and when she decides she’s going to dig into something, she digs in.

So she made the decision that, ironically, she had left her previous job before the pandemic hit by just a couple days. We had no idea what was coming, but she had just, that had run its course, it had been 20 plus years, and she was going to do something different. Well, the pandemic hit. She, we weren’t just, we were

She said, okay, I’m gonna take this challenge on, like, I’m going to dig in both hands and figure out how, how to get this, get this back going. So we took this challenge and, and found the gift in the challenge. She, she dug in despite it’s not what she wanted to do, but realized we could change our operating model.

Some of it was required, so we went from walk-ins to appointments. Right. That was the first thing to control it. The second thing is we reduced our hours. Right. Big operational change. The operating model of that franchise, and I know it sounds silly, was to be open for a long period of time so that you could take people when they wanted to come in and you’d have this walk in traffic.

All sounds well and good, but if you don’t have a big clientele and you’re open for 12 hours, that’s tough on staff. It was a money suck. It was just dragging money out. So we said, no, we’re going to control the flow, appointment only. Concentrate the clients, right? Those are the first things. We changed the way that we compensated folks so that they would win when we won, right?

So that was an incentive for them to get on board, work their social media accounts, bring in their clients there, right? And then we dug into the real. So, I would just, we went micro on the business and really started to identify those areas where there was real leakage, what was going on, where could we make moves and just kept tweaking and tweaking and tweaking and, oh, we have this challenge, we can do this here and oh, this is the one marketing source that’s really working for us, so let’s stop throwing stuff against the wall and concentrate dollars here.

We just got smart. The sad part of this is that we just weren’t getting any of this information from our franchisor, so, you know, I. If you find the right franchisor, there is that playbook that’s given from an operational side. But if you find the wrong one, they’re really good in the marketing side. But the, the operating playbook for a new startup of a, of a location is not there ’cause they, they’re at a different stage or they wouldn’t be franchising. They’ve got a mature business. And, and so we rewrote the playbook for ourselves. We rewrote the operational manual operational playbook and, and it, we, it, it just started to hit for us. We started to realize we could. We could maximize and optimize this opportunity and actually opening less, concentrating more, and that began the road back.

And we started to see real inroads, um, as we got into the summer and then into the fall of 2020, sort of post the pandemic. And it’s been nothing but a straight upward trajectory since that time, uh, to a remarkable degree, actually.

Tim: So that’s a great point. You know, you, it seems like you. Part of your DNA was this entrepreneurial spirit. And you sort of abandoned it when you got into the corporate world. But that’s a fire that it’s either in you or it isn’t. And it was clearly in you and that led you to, okay, wanting to be in business for yourself, control your own destiny.

And, you know, getting in on the franchise side is usually a good idea because theoretically the franchise or has. everything figured out and he’s gonna, or they’re going to, uh, hand you over the key, so to speak of a turnkey operation. But what you realized probably too late, you know, there’s an old Dutch saying that, you know, too old, too fast, too smart, too slow.

And what happened is you realize, you know, we don’t have the support here that we need. And in,

Scott: to hear that, but that’s what was going on. I don’t think it was, you know, intentional, obviously as a franchisor you want your franchisees to succeed. It was just what had worked for them at the time that they were building the business out in their home market was just different than opening up with no brand recognition in a new market.

Those are just two different things. And so what worked in one wasn’t going to work in the other and I just don’t think the playbook was, was adopted or adapted. I should say adapted for, for opening in new markets. And then we compounded the problem by not doing the right thing. Tim, it’s funny you mentioned, I’m going to, I’m going to be critical of myself here.

Because, yes, I say, I’ve done entrepreneurial things and I’m on to a couple other ventures even since the, um, since the haircut business got, got going. But an entrepreneur keeps going in the face, even when things are challenging. And what I did was went back to work. So I, I do challenge myself. Like, do I, is that, so the spirit is there, but is it like, there are some folks that I talked to, I’m sure that you do, they couldn’t imagine working for anybody else. They couldn’t, they can’t bring themselves, even when times are at their worst, that, that confidence, that, that crazy. Irrational belief that they’re going to get it turned around exists. If I’m going to be honest with myself, I’m not sure that’s all there. We’ve made a go of it through stubbornness and stick to it ness and all those characteristics. But it’s funny, you know, Gino Wickman, the author of the book, and I’ve used this on my podcast a little bit and share it with you. He believes that all entrepreneurs are born not made. You either got it or you don’t. Now, you can still run a business out there, but he says the true entrepreneurial spirit, the true entrepreneur, is born and can’t think of doing anything else ever.

And anything else that they’re doing is just fake because they always are going to go back to the roots. And so I wrestle with this one just as I go back and forth and I, and I appreciate what we’ve done and really what my wife has been able to do and build this and I give her all that credit for it.

But that’s just pure stick to it ness. I don’t know if that’s that internal thing. So this is my internal debate. You’re getting a little bit into my brain here. This

Tim: not intentionally, Scott, but, uh, but you know, you, so let’s, let’s sort of pivot. So, so you, you and your wife worked your way through this, figured it out and then put yourselves in a position to profit from that. And then you had mentioned the book. We didn’t mention the title. It’s it’s traction.

Scott: Traction, yeah, that’s the book that all of EOS is based on, and the book that Gino wrote, you know, over a million copies out there, you know, for any entrepreneur, a must read. Just gotta read it. You don’t have to do all of it, you don’t have to get a coach, but you’re gonna grab something from it. So if you haven’t read it yet, you’re running a small business, spend a couple hours, read the book.

Pay attention to what’s in there. Like there’s some real gold in there and then you can figure out what works for you from there.

Tim: Exactly. So for, for our listeners out there, EOS means entrepreneurial operating system. And Scott is a implementer for EOS. So Scott share with us how you came about EOS, how you became certified or, uh, you know, uh, Registered to be an implementer and how that helps entrepreneurs.

Scott: Yeah, I appreciate your letting me do that. So the journey to EOS for me comes in three parts. And part of the story that they just heard is a big part of that. It’s just lessons learned and not wanting others to go through what I did. Whether you’re into a franchise or doing it on your own and bringing those to the table.

Uh, the second part of it is just this coaching gene that seems to run. I’ve been doing coaching in one aspect or another for seemingly 30 plus years, whether it was in that corporate world, doing mentoring, being part of internal company mentoring programs. I’ve created training classes for new managers as they’re coming through.

I love to see people succeed. Um, I took a turn for three, four years in college and shortly thereafter I was a basketball coach. Like, I, that’s, that’s just part of who I am and I, and I enjoy that. And that’s very much what an implementer does is just help to coach small business owners through some of these challenges.

So those are those, those two pieces there. The third piece is really just a, you know, I’ve been in operations and execution for a lot of years and there’s a lot of things that I’ve learned. from that about getting stuff done. So you kind of take this execution arm, which is really what EOS is. It’s about execution, right?

The word systems in there has nothing to do with I. T. It is about executing with discipline and accountability each and every day. So you got execution, you got coaching. So I try to bring that to clients and then obviously sharing the, the story that I, that I have around my own business and, and say, hey, here’s some things not to do.

It’s the best teacher, right? When you fail and struggle, it’s the best teacher. Just trying to impart some of that and say, hey, here’s a potential pitfall, here’s a potential area of concern. Let’s get ahead of it or let’s plan for it. Um, let’s be intentional around what the next steps are as opposed to being reactive.

And to me, that’s really the most important thing that I can bring to anyone that’s got a small business and is struggling and trying to figure out a different way forward.

Olivia: Yeah, absolutely. So, um, tell us a little bit about, so did you come into the EOS system through, through the book? Um, is that where you first were introduced? And then how did you decide that it was something that you wanted to, you know, do and bring to other people? You know, what connected with you there?

Um,

Scott: then what I know now, uh, cause I wouldn’t have had all those struggles and we wouldn’t be having a story about my, my limited bank account. Uh, cause, cause now that you’re sort of in the ecosystem of EOS, it’s very clear that there’s some really basic things that every entrepreneur should be doing.

Whether they’re using EOS another system, but there’s some really fundamental stuff. Um, so ironically, yes, I did come to it academically, right? I was talking to some folks about what I wanted to do next and The things that I had done and tell my story a little bit it those that were in the know said hey You need to read a couple books See what this is like see if this resonates with you and it and it absolutely did so the minute I read traction and then the follow up rocket fuel Which, which is about how, uh, uh, the, the first and second command.

So the owner and founder, then his or her second in command, how they interact with one another. But that combination of books really lays out the path for any entrepreneur to follow to really fulfill on what they originally set out to do in their business. And so when I read those books, I’m like, Oh, well, that’s me.

That’s the things that I really believe in. I’ve been doing many of them. I haven’t been using the same terminology. necessarily, but it just so that came together nicely. And then it said, well, hey, I can go out and coach. And now we’re back to being out in your own again. So I left that W two world again and that J.

M. E. One said, I’m gonna do this on my own. And I would say that the the beautiful thing is what E. U. S. Is constructed. Yes, the anyone that coaches with the U. S. We are franchise owner. So here I am once again in a franchise world, but they actually do have the playbook. The process is to because No kidding, right?

They run on EOS. So, EOS runs on EOS, so there’s actually a proven

Olivia: what they preach,

Scott: Imagine that. Yeah, walk the walk, talk the talk, right? So, uh, that’s exactly what’s doing so. And jokingly, my wife who really has the reins of the haircut franchise, you know, she looks at it and goes, well, that’s kind of laid out a little better than what we had, right?

You may have gotten the better of the two franchises in terms of how we spend our time. Um, and credit to EOS for what’s been built out. So that platform is there. Now, you have the tools. Now it’s about meeting a client, making sure it’s a good match, and seeing if my personality and my story resonates with them in an effort to help them, and that’s a process that we go through with every client.

Oftentimes a client will talk to multiple implementers in trying to find the right person for their situation, because it’s a personality match as much as is, I like EOS or I don’t like EOS, right? So we want to have both those things, and that’s the process that we go through. We now run our business on EOS and I can tell you we have, we’ve exceeded even our expectations in what we could do with our business after running it on EOS the last year.

The things that we now do, the decisions we now make, the lens in which we view our business through, even now is dramatically different than it was just 12, 14 months ago. Um, because of, of what we’ve been able to, to bring into the business and how we run it now using all of the tools and techniques that are part of EOS and as we were just reflecting this actually had our kind of a year in review of what we did and like, wow, we do a lot of things really, really well right now that, um, that we can attribute to the framework and the system in quotation marks that is EOS and how it lays out You know, here’s the, here’s the way that you want to run this business day in and day out.

Really is, I can attribute a lot of our success in the last 12 months to those techniques that are in there. I can now be a walking advertisement for how effective this can be for a small business owner. 

Tim: And that’s the best advertisement, right? I mean, because nothing could replace experience.

Scott: yeah. And a lot of folks that are implementers. Come from companies that were running on EOS. So their story is very closely tied to it. So they are working for a company They’re either on the leadership team Maybe they own the company or but they say boy this what EOS did for me I want to share with others so that spirit of taking what’s learned and sharing with others that is present across 720 EOS implementers across the globe.

Like that, that is very, anyone you talk to is going to have that same thing. And whether you came to EOS through the book or through a company you worked in, or through someone that referred you, or you were friends with someone else that was doing this, there is this, this genuine tie to the power of the tool, right?

And really put in the end, really truly understanding that this is, this is fundamental change in how you run your business. But if you do follow and do dig in and are willing to do the work when you come out on the other side You’re gonna have what you want from your business whether that is to get it ready for sale Get it ready for the next generation Tim as you mentioned, right?

So so being able to continue it on there, whether it’s just to grow to the next level Maybe it’s I want to keep it running, but I actually do want to have more time So I’m spending 80 hours in this business and I just want to spend 30, right? I’ve done 10 years of 80 hours or 8 years of 80 hours. How do I stop being in it for 80 hours?

Well, there’s a lot of things that we do in the U. S. to reduce that time in there and make it more fulfilling and maybe have it be what you want it to be, which was flexible and be proud of what you built and creating opportunity for others. Like all of that is part of the, the intent and what we try to do when we’re bringing this forward to an organization is giving peace of mind to a business owner that may or may not have it before we met them.

Olivia: Yeah, absolutely. And I feel like beginning with the end in mind and having that intention of what you want to do and what you want to achieve and what you want your life to look like is so important. Scott, could you share with us? I know you mentioned the framework of the EOS. Could you share with us a little bit more about, you know, what’s involved in the EOS, that system?

And, you know, it seems really interesting and really impactful for business owners. You know, bringing to light, you know, even a few of the most impactful systems or, or techniques that you guys talk about would be great.

Scott: Sure. The fundamental thing that we try to bring to business owners, um, is really three things. One, having a clarity of vision, understanding where you’re going and more importantly, how you’re going to get there and making sure that’s clear to everyone involved, your leadership team, anyone that works for you.

So clarity of vision. The second is actually gaining traction in your business and that is operating with discipline. Accountability, high execution, right? Building that accountability up and down the organization so that everyone in the organization cares just as much as the owner does, which is not always the case.

And the third is we work in building team health. So it can’t be a one person show. That business has no value if it’s a one person show. You need to be a healthy, cohesive team that likes working together because that actually demonstrates to anyone that may be interested in your buying business that you actually have a business and not Tim’s Snack Shop.

Right? If it’s just Tim’s Snack Shop, if Tim goes away, there’s no business. But if you can demonstrate that you’ve got a real operating model and you can point to this is the way this thing is structured, you actually have a business that has some value. And if that’s a desire of yours to sell it. Get there.

So vision, traction, healthy are the three things that we do for every client.

Olivia: Yeah. Mm

Scott: things that have made all the difference for us in our business. Okay. The first is one of the big components that we help clients with is people. We typically find that 60 plus percent of all issues related to running a business are in the people. It’s just the way it is. And so we really want to help business owners to identify. We borrow from Jim Collins here. Who are the right people? What are the right seats, right? What are the functions you really need to have to make this business go? That’s a right seat. And what are your core values in making sure that the people that you bring on are aligned with those core values? And we just say that you have to have both of those. You can’t have one or the other because if you have a right person in the wrong seat, that’s expensive. They don’t know what they’re doing. They’re nice people. That’s a lot of, we find that, right? So, hey, I liked, Mike brought my buddy in to, in to run this company with me but he actually doesn’t know what he’s doing.

But I like having him around so I keep paying him, right? That’s an expensive, right people, wrong seat. The flip side of that is the more damaging one, which is a wrong person, right seat. So, to any business owner that, that may catch a glimpse of this, if you have someone that is not aligned with your core values but is a really, really good employee, You need to think about letting them go right they be able to do the work But if they don’t align with your core values, they are a cancer in your organization Even if you don’t know what they’re doing, so this was lesson for us in our business We had a look we’re struggling for revenue.

We’ve detailed that we had a really high performing person But they did not align with what we wanted from the business what we were around and they were killing us Slowly every day with the things they were doing when we weren’t there

Olivia: Yeah. I mean, that’s so

Scott: writes E. And it, until that person left, but when that person left and took all their revenue away, we actually rose. was another thing that we broke through by, by just realizing that we’re not going to put up with that. It’s, it’s, it sounds so simple, but to make that call when you’re in a business, we don’t have that many, we’ve got a dozen employees, it’s not crazy big, but when one of those employees is doing things to work against you 

bad decision. Lesson learned. Open our eyes right to that. So critical.

Olivia: The company culture is so important, right? And the, in so many businesses, you know, as a consumer, I’ll walk in and Um, you know, I, I judge the, the owner by what the staff is bringing to the table. You know, I don’t, I don’t blame the employee. I blame the management because it’s, it’s top, it’s top down in that culture is so important because that’s what’s facing your, your customer, your clientele and representing you and your business.

Um, so yeah, that’s really great. And what else I was thinking about as you were talking. was how scary it could be to cut off the main revenue, right? But, but instead, you know, it sounds like you took that leap of faith and, and trusted that by staying true to your values and what you believe in and what you want to bring to the table, you were provided for even more by getting rid of what you call, you know, cancer.

You know, that, that toxicity within the business. So, um, that’s a really, that’s a really great story and very impactful.

Scott: Yeah, I mean, this, this person was representing between 25 and 30 percent of our monthly revenues, yet they represented 10 percent of our staff. So this is a high performer who’s no longer with us. Just was, just, just did not fit. Uh, believe a little bit late to get there, but it was, but you know, like when that was coming, other folks just stepped in, right?

Other, they took it on and they, they stepped up because they, they saw we were willing and committed to this. And so now to today, we, we utilize this language with all of our folks. We have three core values, and if there is not an alignment on those three core values, we just don’t have room for you. And that’s okay.

There’s other spots out there. And, and frankly, there is actually. There’s less, there’s less hair stylists than there are jobs in our market. So, so we, we, we are always looking for people, but we’re also willing to not have someone stay with us if they don’t fit. that’s, we just, that’s, that’s our, that’s our force.

And, and that’s. That allows us to have all the right people around us all the time, and that’s critical, right? And it allows for, and then folks feel like they belong, and then they’re going to stay for longer. It helps your retention, your customers feel it, you know, as they’re coming through, as you described.

Right? I mean, it can say a lot of things, and I mean, I just, I use Chick fil A, which is a big national brand, but you know when you’re in a Chick fil A, you know how you’re going to get treated.

Olivia: Yep.

Scott: you right now, I’m a fan. I never, I have never been treated wrongly in Chick fil A. It does not matter what is going on.

And that’s a franchise. But that is a pervasive culture, and I, it’s, it’s real when you’re in there. You’ll get treated really well by everyone that works there, and it doesn’t matter what role they’re playing in that business on that day. And they won’t tolerate anything less.

Olivia: Right, right. And that’s so powerful, right? So, um, I was thinking that while you were saying, talking, talking through your story as well, how impactful it is to have those good experiences in, in these environments, in these businesses. Um, and I, I would argue it’s even more impactful, you know, when it’s in your community, you know, it’s good to.

See good people in your community and be treated well by people in your community and you know It’s easy to support those businesses, you know, it’s easy to want to see them succeed and and do what you can To do that, you know

Scott: Yeah, at Last Check, our little, our little 1, 100 five star reviews on Google. From

Olivia: It’s impressive

Scott: coming in and having the experience that they’re having. Um,

Olivia: really saying something

Tim: wow.

Scott: it’s a big focus of ours to deliver that. And, uh, The, the comments can be humbling when, when you read them ’cause of the clientele that we have and, and how we serve and the things that they, they’ll say about, I’ve never felt comfortable getting my haircut anywhere else.

This place, it allows me to be who I wanna be. I can come in here, do what I want. That we just allow for that as core, as one of our core values. It, and, and allows for that. And that we, we live it and it shows up when our clients talk about us and, and share, um, publicly what their experiences would like.

But you don’t hit them all, but to have that kind of response, um, we feel really good about.

Tim: That’s impressive. So, Scott, we love your story. We love how you found the gift in the struggle, came out much stronger on the other end. More importantly, we love your passion for helping business owners. So, how, how could our audience reach you? How, how can we find you?

Scott: Sure. Uh, so you can find me on LinkedIn. It’s, uh, scottgoodrich eos. So hopefully you can find me there. Pretty, pretty findable there. Um, you can email me directly scott. goodrich at eosworldwide and anyone who does email me reaches out that way. I’m happy to send them a free copy of the book traction. So, if they would like a copy, get their arms around that, we can shoot you up a free copy.

We still use old fashioned hard copies, so you have one physically to hold on to and reference back to. I mean, digital copies are available, but nothing like getting a book in your hand and really digging into it, and so we encourage folks to do that. So, that’s scott2ts. goodrich at eosworldwide. com.

Shoot me an email, I’ll send you a book. Ha ha ha!

Olivia: We appreciate that, Scott, and we appreciate you joining us today. You had a great story, um, you know, full of struggles and triumph, and those are the best stories, as I mentioned in our pre call.

Everyone loves a comeback story, and we also love that you have that experience now. My dad always used to tell me, you know, someone else’s mistakes are the cheapest lessons you could learn. And You know, we appreciate that you’re here sharing that with people and, and bearing all and also, you know, here with a solution and, and showing people the way so they don’t have to make those same mistakes.

Scott: Thanks for saying, I appreciate it. Tim, I’m much better at taking a punch these days. So, I’ve taken a few now, so yeah, I toughen up the jaw, uh, so I can take a punch a little better now than I may have done in my more fragile early years, let’s put it that way.

Tim: So, that’s, absolutely. That’s in reference to, in our pre call we had, we had discussed how everybody has a plan. according to Mike Tyson until he punches them in the face and then that just changes everything and that’s sort of what happens in business, right? You know, it’s amazing to see how your business has evolved. You never could have dreamed, I’m sure, that the business would look the way it does today, even a year ago. the key is, your As, as much as you plan, which you need to do, your business will not, it’s not a linear growth, right? It’s going to have the ups and the downs, and it’s going to morph or evolve into something you never could have imagined. And it’s probably going to be better than you thought,

Scott: If you do the right things and willing to fight the other, I 100%, every business, we like to say every business is going to hit ceiling. It’s inevitable. You’re going to hit them as an individual business owner and be like, uh, this is brutal. You’re going to feel like you hit him as a team or a department or a company like these ceilings are inevitable.

Do you have the tools? Do you have the wherewithal? Do you have things in place that allow you to fight through those ceilings when you hit those, those body blows that you’re bound to face? And we just try to help you provide you with a set of tools that you can go back to, to handle those when they come at you because they’re going to.

You’re right. It is not linear. It is not. It is not a straight line of growth at all. It comes with these plateaus and dips. Uh, how do you gonna rebound? How you gonna stick through it? And so hopefully, uh, we’ve got some tools for you. But, you know, we even within your own that there’s there’s some there’s some things you can turn to to get things going back in the correct direction.

Olivia: Awesome. Well, thank you so much, Scott, for joining us today. It’s been a pleasure having you. It’s been a pleasure and honor to hear your story. And, you know, I’m so happy that, you know, you made it through and that you’re here to show other people the way as well. So, um, if anyone wants to get in contact with Scott, please reach out to him.

He gave you some, some resources there, LinkedIn and his email. So thank you again so much, Scott, for joining us.

Scott: Thank you both for having me. Great speaking with you. 

Olivia: Hello and welcome to the control your cash podcast. I’m your host, Olivia Kirk.

Tim: And I’m Tim Yurek.

Olivia: Today, we have a great show in store for you. We have Bob Cordaro with us, who’s…

Bob: You’re assuming it’ll be great. That’s an assumption.

Olivia: From what I understand, this is going to be a great podcast. I heard that Bob is a great storyteller and also very influential in his space. He has a, a Bob Cordaro show on a local radio station, WILK.

Tim: Yeah, so uh, Dunmore High School. Played football for the incomparable Jack Henzes, University…

Bob: Won the championship that our senior year. 

Tim: Of course, well you guys were loaded too that year. Uh, and then of course, uh, University of Rochester. Academic All American. Uh, Phi Beta Kappa. I mean you check all the boxes, Bob.

Bob: And I mean all of them. I just continue and you’ll get there.

Tim: Yes. So, uh, local attorney, University of Pennsylvania Law School, local attorney, practicing mostly in business.

Bob: Mostly business. Ham and eggs though, I would say. It was a ham and egg guy. The things that once, the lawyers start being allowed to advertise, which I didn’t believe in, the personal injury and those kinds of things sort of went away.

So you, you, you re-concentrated and I always enjoyed business anyway. So I became a mostly business attorney, but I did ham and eggs. I did wills and estates and all kinds of whatever. Neighbors and friends and people needed small criminal cases, some decent sized criminal cases, a lot of stuff. So, 

Tim: So, you had a good business career as far as a lawyer, but that didn’t seem to rock your boat.

Bob: No, it did. 

Tim: It did? 

Bob: Yeah. I loved it. I liked the radio business. We built, two stations from the ground up. Rebuilt a third, I had five, radio stations and a billboard company at, at a, one particular time. And oddly enough, I’m flying to Madison, Wisconsin to look at a wireless cable company and a  radio station that had gone bankrupt.

And I said, I’m going to, I got five kids. And I got to be one of these guys that misses everything because he’s going to be on a plane. And I came home from that trip, actually my wife was on it with me, and I started selling the radio stations and the billboard company over the next few years. 

Tim: Right. 

Bob: And I said, I can make plenty of money as a lawyer, I don’t need to, I don’t need to get on this treadmill.

As enjoyable as it would be, your first responsibility is your kids, period. So, unfortunately, I had the Sisters Filippini, these Catholic nuns and they always told you to do your duty and, you know, you’re going to go to hell if you don’t and so forth. So I thought my duty once I was secure financially was to run for office and I did.

And then I won and that was, that was the worst of it.

Tim: Well, the first, the first time. You ran was for Congress, right?

Bob: Congress in 1988 as a Democrat.

Tim: In a Republican, jurisdiction, right. District, right. So one of the things, and you, I know you remember this is, tell, tell everybody about the ladder.

Bob: Oh, well, we were running against a guy named Joe McDade and he’d been in office for 26 years and he seldom even came home and I was doing an okay job, but I just thought our areas in trouble. I mean, like people can’t find jobs. They, young kids can’t stay here, all those kinds of things. So he’s not doing enough.

And, they asked me, the Democrat party asked me. Would you run in this primary because there’s a guy called Lyndon LaRouche and one of his disciples was going to be the nominee and he would be the first nominee from this Lyndon LaRouche, long lost Lyndon LaRouche wing of the Democrat Party to, to be a national candidate and it would give him a forum and it’d be embarrassing, Bob, would you do this for us?

I said, okay. I said, but if I’m going to do this, I’m going to tell people I’m not running in the fall. I just started one of my radio stations. We had a kid and a kid on the way. And so I, you know, I said, I don’t want to run in the fall. They said, but you have to say, you’re going to run the fall. And I said, but if I say I’m going to run in the fall, I’m going to run in the fall.

Well, you have to say it. And so I ended up running in the fall against McDade, which I knew I couldn’t win unless some insane miracle happened. But I figured we’re, we’re in this, we’re going to have fun with it. So we discovered that Joe McDade had, and I liked Joe McDade, I knew him before I’d worked on Capitol Hill.

I knew him, I’d see him around, I was at fundraisers of his and so forth. But, now I’m running against him. And, we discover that not only does he not come home, there were like 23 or 24 occasions where he either voted absentee or just so he didn’t even come home on election day. And there was two times he didn’t even vote for himself. He didn’t vote at all.

So, he had this fake house that was his address up in Clark Summit, so we went up there and I, funny, one of the people that went up with me is current Democrat Congressman Matt Cartwright. And we go up and WBRE’s there and they film us from the time we get out of the car. And we walk up and we’re standing on the sidewalk in front of his house and we have this voting record where he didn’t vote, didn’t vote, didn’t vote.

And, you know, that he truly isn’t from the area. So, he then comes home, and he said that, I was a peeping Tom. I was looking in his house, and he had a ladder he put up against the, the window of the second floor. And, it was pretty funny. And, that was a, that was a, I guess the highlight of the campaign, because it was both humorous and, even though I was going to get destroyed in the election, it got him to come home and actually campaign.

Olivia: So he just had this fake address, is that what you’re saying?

Bob: Basically. He would stay at a Ramada Inn in Clark Summit when he came home, which was not often. And, but he had to have an address. 

Olivia: Okay. So where was he actually, where was he actually from?

Bob: He was originally from here. 

Olivia: Okay.

Bob: The family was from Scranton. They were in the coal business.

Olivia: Okay. 

Bob: Neat house in Greenridge section of Scranton. 

Olivia: There are neat houses up there, aren’t there?

Bob: Yeah, and, yeah, but look he was a good guy, but I figured if I’m running against him, I’m going to run against him. 

Olivia: I’m bringing the news with me.

Bob: So I did. And we had some fun. There was a lot of things that would irritate you as a 26, 27 year old kid versus now they’re just totally humorous.

Olivia: So you ended up losing against him…

Bob: Yes, yes we lost.  

Olivia: And then running again for office.

Bob: Well, the funny thing I, and sadly Joe McDade’s no longer with us, but my friend Mark Walsh, he was taking me around to all the voting booths, all the voting places, that day. And I mean, they did everything but lay palms in front of me going, you know, going to visit and so forth.

So he’s going, Bob, he goes, I think we’re going to win. Let’s keep going. It was like six o’clock at night. We’ve been doing it since eight in the morning. I said, Mark, enough. I said, we’re not going to win. He goes, come on. Let’s… I said. Just because they’re being nice doesn’t mean they voted for me. Okay? And, and that night we did lose.

Substantially, I might add. So. 

Olivia: It was a good effort though. That’s a long day.

Bob: It was, it was fun and it was, but the, the district was sprawling, it still is. And you’d go up Route 6, which is the, the nickname for it is Sullivan’s Trail from an army general that marched that route. , I don’t even remember the war at this point.

Olivia: Mm-Hmm. 

Bob: But Route six that goes from, uh, like somewhere in Stroudsburg, but it’s runs through Scranton. Goes all the way up to Potter County where Adelphia cable was from at the time. 

Tim: Right. 

Bob: I mean, it was nine hours. End to end. It was. So I did a lot of driving. 

Olivia: Wow. 

Bob: And I would go and I would. We’d call ahead, and we’d get an interview with the local newspaper if they weren’t afraid of him, some of them were.

And, and go to a local radio station, and I’d do an interview, and I’d do the newspaper, and they’d take a picture. And that’s what the presence we had, and we, we tweaked, we tweaked Joe McDade pretty good.

Tim: Now, how. How were you received by him subsequent to the election?

Bob: We became friendly again. 

Tim: Oh, good.

Bob: Yeah. Yeah. There was an instance where, there was an event for Frank Carlucci, the defense secretary and just this extraordinary businessman/public servant from this area. And, it was up at Montage and sort of these confederates said Bob you got to be there, so we go my wife and I are there and we’re in this long receiving line and I wanted to meet Frank Carlucci.

I didn’t like want to make anything out of it. What was gonna happen and they, we get about, somebody comes up and it was one of Joe McDade’s aides ago. Oh, you’re Bob. Oh, yeah I’m so and so from Jake something from McDade’s office two seconds when we get within of Carlucci, they sent the, you know, they shut the reception line down.

And there was people behind us that wanted to meet Carlucci too. I go, don’t do, don’t shut down the line for me. I’ll, I just, I’ll get out of it. But they shut it down. It was, it was all those kinds of things.

Olivia: They were waiting for an excuse.

Bob: Yeah. It was just old school, old school politics. I remember we had the Scranton Tribune, the Scranton Times at the time.

Two newspapers, so I’m getting coverage in the papers because they’re competing with each other and McDade has never given them stories and McDade stopped giving the Tribune, which was theoretically the Republican paper. He stopped giving them his best press releases and given them to the Scranton Times.

Because even though the line of family was Democrats, they were neighbors, you know, when they grew up. So he starts giving the stories to the Times. Well, the Tribune calls me in and they do this huge profile in what was called the Scrantonian, the Sunday edition. I, you know, and they let me say whatever I wanted to say and how mediocre Joe McDay’s job was and everything.

And he just goes after them like a ton of bricks. And they say, so I figured I got entree with the Scranton Tribune. You know, at least I got one of the newspapers and he starts giving them the same news releases and attention and everything else. They got his attention with that interview with me. And we go back and I’m telling him about some event I had, and I think it was of significance.

I don’t remember what it was now. And the guy goes, who will be unnamed, he says, you know, we have a policy. I said, what is that? He goes an inch for an inch. I said, I’m lost. He goes, well, you have to buy an inch of advertising to get an inch of, editorial. And I said, Oh, well, we had no money for the campaign.

So they cut me off then. Joe got them back. But it was, it was really funny going against really all the powers that be. And it was an eye opener. And it was enjoyable. And there was some really negative things around a recent divorce Joe had and some other scandalous things. The FBI was investigating him.

And, actually somebody from the FBI came to me and said, would you like this information? You know, here’s what’s going on. 

Tim: Wow.

Bob: And I said, that’s your job. That’s not mine, which I think set me down the wrong path with the FBI, by the way. But that’s another, that’s a story for a few years later. But I said, that’s your job, not mine.

I’m realizing I’m going to two things. Number one, I just didn’t think it was right. Number two. And I knew they were using me. They wanted to publicize it for their own purposes, not to help me. So I didn’t talk about the impending, indictment of Joe McDade. And I didn’t talk about his personal life either.

And, and the good thing about that was even though I lost, I made a lot of friends and didn’t make any major enemies. So, but he, you know, it was funny the night of the campaign. He said that I ran a negative campaign. Well, yeah, on your job. And I said, I said to the reporter, I said, I could have scorched the earth.

That was my, and they actually quoted me in the paper the next day. I could have scorched the earth and nobody knew what I was talking about. But then…

Olivia: But then it came out.

Bob: To stick me the FBI, like, I think less than a week after the election headlines, Joe McDade target of FBI probe. And he had been raided before the election. His house. 

Tim:Wow. 

Bob: And, so I, I learned how the big boys play politics, which was, it was humorous to me. Everything’s…

Olivia: Humorous on your end. 

Bob: Everything’s funny to me. I, but you know, it was, well, I, I told my kids when I was in all those years I was in prison, I said, listen, I said, just because it’s about you, because it’s you doesn’t mean it’s not funny.

Olivia: That’s a great attitude, actually, you know, not taking yourself too seriously. 

Bob: Well, dear God, how could I? 

Tim: So after that campaign…

Bob: But that made me hate politics. Because I found myself, there was something called one of the issues that was in that race that year was the, the, I’m forgetting what they call them, but like the gap babies, there was people who got, were born in a couple of years in the 1920s were for some statistical reason, getting less social security than other people.

Olivia: Okay.

Bob: And I got asked about it and I pandered. Instead of saying, well, people who make too much money shouldn’t get any social security. You’ve done well for yourself, we’re happy for you, but the system’s going bankrupt. Now this is 1988, you could see it coming. Instead of giving my true answer, I said, well, I’m going to really work hard for the gap.

And I walked out of this thing, it was up in Bradford County. And in, how am I forgetting the town, but you know, this is our age. And I left there and I was physically ill where I had to pull over the side of the road and I go, I just, I just said what she wanted to hear instead of what I believed. And from all of those experiences combined, I said, I, politics is not for me.

I may feel compelled to do it at some point, which I did. When I ran for County Commissioner and got asked to run for Congress again. But, it, it, it made me see that politics was not, uh, this, uh, glorious thing that everybody’s out there trying to do the right thing. 

Tim: Well, so, you know, and that, that makes a good point.

So think about like business, either you got it or you don’t, right? It, you know, whether you’re selling something or you’re making something, it either, it, it, it’s good and it works or it doesn’t. And the consumer will vote for you if it’s good for them and it works for them. 

Bob: Yeah.

Tim: But in politics, all those rules are, you know, it’s, it’s not the best person that wins.

Bob: I talk to people on my radio show all the time. I said, you know, we’ve got a current Democrat party that everything they do is against the people they claim it’s for gas prices, food prices, you know, switch to a battery powered cars, all of everything they’re doing is, but people are wedded to that tradition and what is and politics is very different than the reality that that most business people live today, you know.

Tim: Yeah, I would say like business is more a meritocracy.

And politics, I don’t even know what the hell you would call it. 

Bob: Well look at some of the clowns that are in office now. 

Tim: Oh my god. 

Bob: It’s frightening. Keep it up. I go from the, starts from the president on down here you say. Really?

You gotta be kidding me. 

Tim: Who wiped his ass today?

Bob: By the way, I got Joe Biden toilet paper for Christmas. And I said, I can’t see what it’s doing back there. So I just blow my nose with it. 

Tim: So let’s talk. So, so now that being said about politics. How did you get into the commissioner’s race? 

Bob: Our area needs leadership. And it did very much then. And I saw a county that was headed towards insolvency. There’s no such thing as bankruptcy. You could just raise the taxes. And terrible leadership.

And I said I’m running for commissioner because as a commissioner it’s an executive position. Not like this silly county council down or county council down here. If you win with your partner, you are the legislature. You are the executive at the same time. So, you know, you could actually affect change immediately and constantly during your time.

So I said, I’ll run for commissioner. And I could still even work part time, you know, as a lawyer. I had already, as I told you, disengaging from the radio business, so I just said it’s my duty to do it, and, and, so I, so I, we ran. And my partner, years before, sort of unbeknownst to us before the election started, had been pulled over for a, he wasn’t driving, he was a passenger in his own car the night that one of his children was born, and he had cocaine in his wallet, and so it was a cocaine stop. Now he was with the Democrats at the time, so they covered it up and it didn’t get publicized and whatever, but they always held it in case they needed it and they came out with it that election. So even though it was a very close election for majority minority, we lost by a couple thousand votes and I became the minority commissioner in 2000.

Tim: And then, what was it, 2004?

Bob: 2003 election, 2004, you know, we took office as majority, myself and,  A. J. Munchak. 

Tim: Okay. So you mentioned earlier prison, so talk to us about, not, not so much that experience or even how you got there, but when you came out, right? It’s a new world. You know, when, when you think about technology, think about.

Bob: I’m not an early adapter anyway, you know, or adopter. I’m not, I’m not. So I could always be comfortable a few years behind. I did eight years, five months and come out on a home confinement. I got out, eight years, five months to the day. I had done 11 different prisons, a lot of transportation. They said, wanted me to talk and I didn’t.

And so bouncing you around a lot was one of the, side effects of that and, because I mean, you know, theoretically, I was told I don’t even have to get indicted. So I said, well, if I don’t have to get indicted, why would you indict me? The answer without being answered was because we can. But I saw the, I saw the, the, the fearsome discretion and power of the federal government.

During that whole time, and it reinforced a lot of beliefs I had about government and any accumulation of power because of human nature, not even because of evil or good or whatever, just human nature is to grab power and to assert it. And some people get burned in that process. In some cases, many people get burned.

So it was, I mean, it was a lesson there. And of course, when you’re under the. The jackboot of prison guards and prison officials for all that time. I mean, two o’clock in the morning, cause some jackass was smuggling stuff into the prison. You’re all rousted from bed and sent out in the snow in t-shirts to stand there for an hour and a half.

And this would happen all the time. It was a, it was a crazy, experience. And you were under no control. And I spent, during that prison time, I spent over six months in, solitary confinement. Or what they would call the SHU, it’s Special Housing Unit. So I saw, I was at penitentiary, I was at medium security, I was at low security, I was at camps, I was at Philadelphia, I was at Brooklyn.

So, among those 11 prisons, I sort of saw it all. 

Olivia: On the country tour. 

Bob: A tour of the great northeast.

Tim: So when you came out, I’m assuming, you know, probably money was tight when you came out. Yeah. Yeah. So, you know, our show is the Control Your Cash show.

Bob: I was saying on the radio show before this, I said, I’m probably the, I don’t have any cash. So therefore, well, when I did, I was pretty good with it. 

Tim: You were. So the point is, and what our audience wants to hear is…

Bob: Full disclosure.

You were one of my insurance agents so…

Tim: I guess that’s good. 

Bob: The Guardian. 

Tim: So the, the, the point is though. When you had a start over, you got knocked on your butt. How do you, how do you get back up? And what lessons do you learn through that whole process? 

Bob: I mean, but you have to put everything in perspective.

The primary perspective, well to get religious, not, I was going to say to not get religious, well to get religious. Is that the way I look at life is, you know, I’m Catholic. Jesus dies, gives us the opportunity to go to heaven. We can never control our circumstances. It’s how we react to them and deal with them that we succeed, which is going to heaven.

It has not very little to do with what actually happens on the ground here because we’re not in control of it. So, I’m just, I just never thought there was anything to get upset about. I never thought I was on my ass. I was just in places I didn’t want to be. Quite realistic. I didn’t. So I thought to myself, well, how do you behave when you’re confronted with a circumstance?

And I’ve got to put that in perspective. I even said it. As I was being, you know, frog marched around and, and, you know, these perp walks that they made me do three of, they re-indicted me and then re-indicted me. And I said, look, I know people who’ve had children die. Their parents die when they were young and they were dependent upon.

Like I know people with cancer. I know real tragedies. This is a man made tragedy and I’ve got my complicity in that, whether there’s people out to get me or not, whether it was stupid, stupidity, naïveté. And so, you know, why would I ever think this is a tragedy? Why? Because I can’t practice law because I can’t drink scotch.

I, you know, I can’t have a cigar. I mean, really, it was just never to me in my way of thinking there was never anything to be upset about or to whine about. And I had a guy tell me and, you know, you got a lot of advice when you’re going to prison or you, you know, but the one guy said, your children are watching, he said, and by the way, a lot of other people.

And they want to see how you react to this because it’s going to teach them. How to react to the indictment and the press and the newspaper and all of these kinds of things.

Olivia: That’s powerful.

Bob: And so I said, I’m gonna yeah, I’m gonna teach people how to how you should react or at least as best I can and so that was all of those things starting with you know, my my Catholic beliefs were the foundation of anything, not just going to prison, not just being indicted, not just I remember they had this hour long press conference when I got indicted and this hour long thing about how bad of a person I was and all this on the radio, it was live on the radio, so I was driving around in my car, listening to it, because what else am I going to do, you know, I’m driving around Route 81 and whatever, and after it was over, I called my lawyer.

I said, is that all they got?

Look it again, just because it’s happening to you doesn’t mean it’s not funny.

And nothing is life and death, except life and death. And again, so many people that we all know, particularly as we get older, that the tragedies that they’re living through the, you know, whether it’s a relative with Alzheimer’s, you could name the tragedies that outweigh what I was facing. And it just never bothered me, to be honest.

I, it just, whatever. So I, I don’t like when you say someone asked me, he said, geez, you know, you’re always laughing, whatever. I said, well, I’ll be laughing in prison too. By the way, I used to piss a lot of prisoners off when I was laughing. You’re not supposed to be having fun in prison. You’re not supposed to be happy, I guess, whatever.

But, happiness is a decision.

Olivia: Yeah.

Bob: It’s not a reaction to circumstances. And the part of that decision is, I, I, I sent my kids, uh, a couple of letters during my incarceration, or a letter, and, and it had, one of them had, If by Rudyard Kipling, that amazing poem, and another had, Teddy Roosevelt, Man in the Arena, and another was my own personal observation, which is that life, or happiness is a decision, and so, if I look at the whole package, well, you know, I, I, I compared it to a kid in a basketball game and, and, and his teammates are throwing the ball in the stands and the refs are making unfair calls and all this.

And he’s still smiling because he knows he could win. It’s in his control to win, which would be getting to heaven. And so I said, that’s the way you should look at it. Most people, unfortunately. They try to fill the gap of not having that belief. They try to fill that with things. And nobody loves things more than me.

Nobody loves booze and food and a great car and a great house. Nobody loves them more than me. But they’re not the be all, the end all. They’re good things, but they’re not the altar to worship on. And people try to fill that gap that they don’t have because they don’t have a core. I believe faith in God, to rely on.

And so, well, what’ll make me feel better now? Is it, is it sex? Is it, is it drugs? Is it money? Is it a car? Is it a nightclub? And it’s all just silliness. 

Olivia: Yeah, you could have all the things and still not be happy. It’s that conscious decision to be happy and not be victimized by circumstances. That really is going to make the difference at the end of the day. 

Bob: You said it well. And at the end of every day. 

Olivia: Yeah.

Bob: Not just the day. 

Tim: It’s true. 

Olivia: Yeah. 

Tim: It’s so, it’s so true and you, and you think about… 

Bob: You have to internalize it too. 

Tim: Yeah. 

Bob: So that it’s, and I, I think I did before prison. 

Olivia: It sounds like it.

Bob: But prison, like it let you prison sort of let you, be say, you know…

Olivia: Be with yourself. 

Bob: I was sort of right about that.

Olivia: Yeah. 

Bob: You know? Yeah. That is the right way to approach things and, so I got a lot of verification of what I believed going in. And during the process. And, the other thing I did is I sort of looked at it as part, which I do life in general, but part of me is observing everything that I’m in. I’m in a, you know, we’re all in a documentary, which we’re the camera.

And, so you’re part observer, part participant and that helps you watch what you’re doing as you’re doing it. And it’s, it’s sort of fun. 

Olivia: That’s interesting. Where’d you get that idea? I mean, cause I mean, in a, in a sense it’s true. 

Tim: It is true

Olivia: I know, but like, I’ve never, I…

Bob: I can’t say it’s, I can’t say it’s, it is original to me.

I can’t say it’s just my idea, but that’s the way I look at life. 

Olivia: Yeah. That’s pretty cool.

Tim: It’s a great perspective, and I think if you use that. 

Bob: But it’s a documentary most people don’t want to watch. 

Tim: Or sometimes it’s cringeworthy for sure. 

Bob: Oh man, I had a lot of cringeworthy.

Tim: So talk to us about how you, you know, once you got out, you came and, you know, what’d you do for, like…

Bob: Did you ever hear someone say, and I know I told my kids. If I had to start at zero, if I had to start at McDonald’s, I think I’d work my way up and I’m sort of a lazy type. So maybe I’d only be the hamburger flipper, but, you know, there’s nothing wrong with starting at zero.

I had no debt either. So it was sort of like…

Olivia: An absolute zero.

Bob: Well, I had debt to the federal government. They’re still torturing me, but that’s another story. But, but, I, I looked at it as a challenge and an opportunity and a clean slate and, I mean, there’s nothing to be afraid of I mean, if I, if I need a meal, I could go to my mother’s house, you know, I’m not going to starve on the street.

Tim: Who cooks better than mom? 

Even if she didn’t cook well, I’m going to eat. I mean, this is not existential. None of this is. So. I just didn’t think there was anything to worry about because you have zero particularly wouldn’t, and my family was great. They stuck by me tons of friends visit, tons of family visit, and and so and and tons, tons writing, tons sending messages, so I mean I always knew that I had a lot of friends out there and that it was a wonderful life still and so, starting over again…

Olivia: You ended up back in radio.

Bob: Yeah.

Olivia: Which is ironic.

Bob: Because I was on home confinement for 13 months. And so my family, the last thing they wanted me to do was be in the media again, because I’m not going to not say what I think. So they’re like, Oh, we’re going to do this again. And I applied for a student teaching jobs. Which many of them are controlled by Kelly services.

So I went three days filling out all these insane things. And there’s nothing I hate more than filling out forms on a computer, but I do, I do it. And then they even had incentives if you were a felon, but they figured they didn’t want the headache of some school answering to the media as to why I was there teaching as this horrible criminal.

And so they said, guess what? You can’t do it. And then you can’t work for your family. You can’t work for yourself and you couldn’t do any job on home confinement where you didn’t just go from your home, to the job, and then back. There was no flexibility on that whatsoever. So a number of friends had reached out.

Oh, would you like to do sales for us? Would you like to do sales management? Would you like to run this company? And I couldn’t do it because I could only go to the office and home. And so I finally realized I’m going to have to do, I’d thought about it in prison quite a bit too. I’m going to have to do a radio show.

And I called WILK and agreed. Frank Andrews was actually on the air in the afternoon. He wanted to do an interview and they said, well, why don’t you come on and do a, you know, guest host the Morning Show one day. And I did, I got permission. Then I did. And then they said, well, how about if you substitute every, you know, every so often when somebody’s sick or vacation or whatever.

So I did that for a little while. And then after a few months, so April of what, 21, I guess, they offered me a job. And so I took it and I’ve, so we’re negotiating the contract. They’ve been great down there too. I’m negotiating the contract with the general manager. And I forget what he asked me and I said, well, right.

What am I going to tell you? I have an ankle bracelet. How am I going to, I’m going to tell you what I’m going to do. So, so I, I got into, you know, to the radio gig and, uh, it is not about. Me getting back at anybody. I don’t see, I don’t see it that way. I have a lot of people screwed me. I mean, there’s no doubt about that, but that’s just not, you can’t, I don’t know you, I can’t live my life focused or even paying attention to that because there’ll always be people trying to screw me.

And it’s not, by the way, I, I always talk about things like racism and these other issues that they try to isolate to, to this category. No. People just like to keep other people down.

Tim: Yeah

Bob: It has nothing to do with race. It has nothing to do with anything except, Oh, this guy might be getting ahead. Let’s screw him.

I mean, it’s just, so that’s always going to be a condition of life. It’s always going to be a factor of life. And, so the show is about what I believe the, incredibly wrong track the country is on. And it’s hopefully educational, hopefully do it in a fun way, in a funny way, an entertaining way.

But it’s, it’s a passion project, I guess you’d say, because it’s not a lot of money. It’s just, you know, a living wage.

Olivia: Nice.

Tim: So, now how, how many years are you doing that now, Bob?

Bob: Full time. I started, the it was the Monday after Easter in 2021. So like April 5th, I think I can’t remember the specific date, but yeah.

Tim: Yeah. And you know, I’ve listened to many, many episodes and I’ve actually called in a couple of times and I thought, I figured you recognize my voice.

Bob: I didn’t know. 

Tim: No, really? 

Bob: No, I would have called you out. 

Tim: So a couple of times I called in, but, I mean, you got a really engaged audience and, and, you know, I know that… 

Bob: It’s enjoyable.

You know, it’s, it’s like hanging around and some of them don’t even like me, you know, the people listening, they’ll always send him, you know, I, I remember the one time when we start, when I, particularly when I started doing it, they would say, Oh yeah, great. Coming from an ex-convict. And I was like, well, let’s get something clear here.

I tried to have my conviction overturned and failed. I’m a convict. I would be an ex-convict if I got my conviction overturned. But I’m not. So I mean…

Olivia: If you’re going to insult me, do it formally. 

Bob: Yeah, do it accurately. Let’s use the English language the way it’s supposed to be. But, I don’t duck that. I’m not ashamed of it, frankly.

That part of my life was very educational, whether I liked it or not. And, and so I hope the shoe, the show is about truth, fact, and reality, which a lot of people who lead us don’t see and don’t want to see for their own benefit or, or comfort or whatever. And, so, I mean I get to do that every day and people, they are very responsive.

Positive and negative, but it doesn’t matter to me and they’re very involved and they’re enjoying themselves and they’re laughing and they’re fired up and all that kind of thing. I say when I did the television show, which was nonpolitical and I enjoy that and I may go back to that, but the radio show, I said, if, if, I get a tear to my eye at least once during the show, if I get, worked up in a lather at least once during the show, and if I laugh once during the show, I know that it was a pretty good show.

Tim: Jim Valvano. 

Bob: Does he say that? 

Tim: Well, he said in his  ESPY speech. 

Bob: Oh. 

Tim: If, if you cry once a day, if you laugh once a day, and think once a day, you’ve had a full day. 

Bob: Yeah. 

Tim: And, uh…

Bob: That’s great. 

Tim: Yeah. 

Bob: And it’s, you know, it’s how I approach the show. I know, I feel like I accomplished something that day and we do a veterans tribute, which is very important to me.

In fact, that’s the reason I continued to do the show. Many times it’s just off the obituaries of veterans who’ve passed away, but very often it’s, you know, families and others who I encourage, like, you know, send me information on your family member. I don’t care. It was peacetime. I don’t care if they were a war hero.

And, and so you get to do that and you get to publicize businesses that you could really believe in. You get to publicize events that you are excited about for other people. And, it’s, it’s a great, platform and they let me say anything I want. I’m sure there’s a point at which they’d fire me, but I don’t…

Olivia: I haven’t reached it yet.

Bob: I haven’t held. Well, I haven’t held back either. So.

Tim: Right. But, you know, Bob, knowing you…

Bob: Well, I say, the other part is, this is the truth of it, it beats working. I’ve seen people work. I know what they do. 

Tim: Right. 

Bob: Guys in construction and, I mean, they really, they, people in factories, they actually work. This is not work.

Tim: Isn’t that great? Now, when you think about that, so first, well, two things. Number one, it’s not work. I’ve never, ever known you to hold back, so that’s just not going to happen. But number two, and I’ve told my kids this over and over throughout their lives, is find out, like, figure out something you love to do, find a way to get paid for it, and you’ll never have to work a day in your life. And seriously, it seems like you’ve found that.

Bob: Some of that’s true. Well, I mean. I like to get paid. So that’s why I did the TV show and that worked out well. But it ran its course with channel 16. So now we’re looking at other options, but, I say, I’m starting to say we, if I start referring to myself in the third person, just smash me in the head, would you with this skull over here.

Looking at other options to bring the TV show back, cause that was designed to be all positive and, and to, to bring people together and, about great things that are happening and really interesting people that are happening. I do that on the TV, the radio show, but people are afraid of the political side of it.

Cause this area is so Democrat and, and for whatever reason, I always find myself going after the majority and so, you know, they’re afraid to sometimes to do things on the show because it is so opinionated and, but I mean, I don’t care what your politics is, if you’re doing something interesting or if you’re a charity, so there’s a lot of interaction on that front, which is again, as I said earlier, a fun part of the show.

Olivia: So, so what is your TV show about?

Bob: The TV show, we, we interviewed everybody from Bo Dietl with his movie projects. We had, uh, like maybe one of the, Steve Vacendak, who was one of the greatest basketball players from this area. We had people who ran Goodwill Industries and St. Joseph Center. And they’re all on all of the episodes of war heroes, combat veterans of Korean War, World War Two.

Really an interesting montage of people, a sports writer at age is like mid nineties. Now we had a lot of interesting guests. It was fun to do and it was, and it was nonpolitical. Which I liked too. I mean, I said, I could listen to myself talking about politics for five days, not six. And it was very popular.

We were lucky to have a position right out of, after the great show, Pennsylvania Outdoor Life. And so we had a lot of eyeballs watching, and it had a lot of reach, and so it was very enjoyable. It was very enjoyable. 

Olivia: Awesome. And all of those are available on YouTube.

Bob: On YouTube. Under the Bob Codaro Show on TV.

Olivia: Okay. 

Bob: Yeah, we’re gonna, we’ll come back with, I’m sure I’ll come back with some TV. I’ve had, been having discussions about it. 

Olivia: Yeah, it’s in the works. 

Bob: Yeah. 

Tim: Well, it seems like you, you’ve always had an affinity for media. Just I don’t know, just like since I’ve known you, you seem to have an affinity for media and it seems like you’re back where you belong.

Bob: Maybe so. Maybe so. And it’s much better than owning. I don’t have to make payroll every Friday, they do it. I remember like going up to, I remember this one time we’re, we’re going up to, I had to make payroll and I used to call, uh, my friend X.E. McAndrew, we lost unfortunately John McAndrew and I would call him up on Thursday nights and go, X, payroll tomorrow.

He goes, eh, we’ll get it done somehow. And so I, at one time driving with one of my salesmen. And, and you can’t look desperate to your advertisers, but I go, my, my old guy, my old buddy, Ed Connick, I go, Ed, I really need the money for Friday. We drive up to the Ray Price and they had a car dealership on Mount Pocono and he gave us the money.

It was nice of him. It really was. He didn’t have to pay because you have 60, 90 days to pay radio and media. And he paid us ahead of time and I made payroll that day, that week. 

Tim: Wow. But, you know, that’s the great thing about, you know, about business though is the wonderful people you meet and the, and, and the impact that you could have.

Bob: I think about, about anything your interactions are. 

Tim: True. 

Bob: And it’s easier to sit at home, which I frankly prefer to do, but you would have missed so much. 

Olivia: Mhmm.

Tim: Exactly. 

Bob: Whether it’s prison or politics. Uh, although I, I said. I would, uh, rely on the 1200 prisoners I’m with out at Allenwood inside the fence. More than 1200 people in politics any day.

So true. Because there, there were real consequences for lying and screwing somebody in prison, there are no consequences in politics. 

Olivia: That’s a great point. 

Tim: That’s great. 

Bob: I would, I would think of myself, boy, if they tried that in here,

I wouldn’t even have to do anything. 

Olivia: Well, Bob, this has been a great show as, as promised, you delivered and we appreciate you so much for, for joining us today and our audience, I’m sure, appreciates it also your stories and very captivating.

So tell them how they could, find you, you know, when we talked about the YouTube channel and the radio, how could they, how could they get in front of you? 

Bob: To see the, I think we have 45 to 48 editions of the television show. It’s under the Bob Cordaro show on TV. And you can see other, if you go to YouTube, you’re going to see other stuff that interviews with Joe Snedeker, that kind of thing that you’ll, so there’s, there’s that stuff.

And then on, I’m on WILK news radio. You go to WILK news radio.com. If you don’t get the signal 103.1FM and 910 and 980AM, uh, every day, nine to noon. And, it’s, I, I can be found,

Tim: Bob. I can’t tell you how good it was. Number one to see you. 

Bob: It was great talking to you. I said, I don’t know if this is for the broadcast or not, but I mean, I, I met him when he was getting recruited at the University of Rochester to play football and we’ve been fast friends ever since I, like, immediate, immediate, he was such a good teddy bear of a guy.

And I love your dad. I do. It was like we were talking the other day. The first time after 15, 18, 20 years, whatever. 

Tim: Yeah. 

Bob: It was like we had just spoken the day before. 

Olivia: Oh, that’s the best. 

Tim: Exactly. That’s the best, right? So there’s people that I haven’t seen since high school. And I saw a really good friend, Eddie Rubel.

He, he played football with us in high school and, he moved out to Colorado. I haven’t seen Eddie in 40 years and we saw him this summer and it was like, wow, we just picked it right up, you know? 

Bob: Yeah, that is nice. 

Tim: Yeah. So, Bob, thanks so much for being with, being here as our guest, and I’m sure our audience got a lot out of it because I did.

And I know it was…

Bob: Who is the audience? 

Olivia: We’re talking to business owners all across the country.

Bob: Oh okay, neat, neat. Yeah. That’s good. Well, it’s neat that you do this and extend beyond your, your normal, business modes, even if it doesn’t necessarily assist with business. But it’s, it’s, it’s important that you do this.

This is great. 

Olivia: Yeah. We, we aim to add value to our audience and, and spread knowledge from other business owners and professionals. And. Convicts. 

Bob: You know, I, you give them an inch, they take a yard. 

Tim: I know, how about that?

Bob: Do you see this, do you see this? That’s my line. It’s like I tell my producers on the radio show I tell…

Olivia: Well its accurate I heard.

Bob: I tell the jokes around here, okay? 

Tim: That’s right. 

Bob: I’m the one with the lines. Not you. 

Olivia: I’m back in my place.

Tim: There you go. He liked you better when you didn’t say anything. 

Bob: No. You know what? Yeah. If you have a good line, use it as long as you’re willing to accept the consequences. 

Tim: There you go. 

Olivia: Words to live by. Thank you so much again, Bob, for joining us.

Bob: Thank you. Pleasure to see you guys and be with you. 

Olivia: Hello, and welcome to the Control Your Cash Podcast. I’m your host, Olivia Kirk.

Tim: And I’m Tim Yurek. 

Olivia: We’re here today to talk about everyone’s favorite topic. Taxes. Just kidding, the dreaded taxes, it’s a huge major capital expense for households and businesses across America. So it is a topic that does need to be discussed because there are better methods than other for funding taxes, or if you’re lucky enough to receive a tax refund, how to put those tax dollars to work for you, your business, and your family.

Tim: You know, it’s funny, I did some research on taxes and found that 91% of all taxpayers overpay on their tax bill. 

Olivia: Now nobody wants to hear that. 

Tim: And here’s the kicker. Over 70% of them overpay by over 70%. So, you know, everybody out there thinks that they’re handling things the best way and that they’ve got the best accountant or the best CPA.

But clearly there’s a disconnect. If everybody thinks they’re doing it right, and 91% is overpaying, something is not adding up, if that makes sense.

Olivia: And then we wonder why the government doesn’t give us a clear cut method or tell us how much to pay in taxes. They’d be losing a huge chunk of their revenue by doing so.

Not to mention, we talk about the five areas of wealth transfer. Taxes are number one. Where are we giving up control of our money unknowingly and unnecessarily? No one wants to pay more in taxes than necessary, but they are something that we need to consider when considering financial planning and how to move ahead for ourselves.

Tim: Yeah. I mean this. So think about this. If you overpay in taxes, you don’t only lose the tax dollar. You lose what that dollar could have earned for you. That’s opportunity costs and you lose it forever. Meaning that not only do you lose it, but your children and your grandchildren and your great grandchildren lose the ability to have controlled that dollar.

So it’s really important to address the tax issue. Uh, but again, everybody thinks they’re doing it right, but there has to be some kind of a disconnect because if so many people are overpaying, and they’re overpaying by such a large degree, something isn’t adding up. And think about this, you know, every few years, uh, a political candidate might run on we’re gonna, you know, we’re gonna reform the tax system.

Nothing ever gets done. There’s no incentive in Washington to reform the tax system.

Olivia: Well, the government doesn’t produce anything. All they have is revenue, and they only, what, what are the sources of revenue? Taxes? Is that it?

Tim: Well, taxes and borrowing. Right? So, so and… 

Olivia: If you can consider borrowing as a form of revenue.

Tim: Yeah, I mean, 33 trillion dollars in debt. What’s another trillion dollars? What the heck? Easy come, easy go, right? 

Olivia: Except it never came.

Tim: But look at all the constituents we could buy off.

Olivia: Oh my gosh. So, yeah, it’s, it’s. The tax money has to come from somewhere because it is expensive to run the country, to protect the country.

And the government’s job is to do just that. And, you know, they have to get paid themselves. So the money has to come from somewhere. And as this debt adds up, as interest rates rise, and they keep on going up and up and up. As these things happen, the cost of the interest on the astronomical amount of debt is increasing, and you know the money has to come from somewhere.

And spoiler alert, it’s gonna come from the people who have the money. If you don’t have any money, the government’s not coming for you. It’s the people who have the money and newsflash again. You may be, it may not feel like it, but you may be those people who are responsible for paying those taxes, whether it feels like it or not.

Tim: You know, I like when people say, hey, the rich should pay their fair share. Well, think about this. Over 80% of taxpayers filed for $100,000 of income or less. Now, guess what? If you make $100,000 in the United States, in 2023. Are you rich?

Olivia: Does it feel like you’re rich is the better question.

Tim: It doesn’t feel like it for sure, but here’s the point when you’re sitting there saying, yeah, the rich should pay their fair share, you’re basically saying, come and kick my butt because I’m rich. Now you don’t feel rich, but as far as the government’s concerned, you make a hundred grand you’re rich.

Olivia: Yeah. Yeah, that that 100 to 200,000 of income has some some real challenges to face between you know all of the problems that everyone’s dealing with as far as rising inflation rising interest rates but then there’s also other layers of challenges that come up between not getting as much for child care or not getting as much for financial aid and paying more for your children to go to college. Not to mention, if you’re in that, that earning bracket, you may have some, some student debt yourself that you need to account for in there.

So it’s really important. We always say to make your money as efficient as possible. And as you continue to earn more and more money, if you don’t address these issues, those problems are going to continue to compound as your income grows. So it’s important to address each of the wealth transfers, starting with taxes to make sure that you’re not paying more than you need to, to make sure that you’re keeping as much as you can, and to make sure that you’re setting yourself up for success here.

Tim: Yeah. And looking at setting yourself up for success, all the strategies that we employ on a daily basis, whether they’re financial or personal, really have a ripple effect on everything else that we do or that we’re able to do in the future. And keep this in mind, you know, when we talk about saving money on taxes, it may not necessarily be you paying less taxes this year.

We have to look into the future and take the idea of deferring taxes into a 401k or a qualified retirement account. Well, it’s a government tax qualified retirement account, which means that all the rules are laid out by the government. They made the rules. Now, keep this in mind, those rules were made to favor the government.

They weren’t made to favor you. Remember Nelson Nash saying in his book, Becoming Your Own Banker. You know, the government creates a problem, high taxes, and then they provide a solution to that problem. The ability to defer your tax into the future. And then they make that first available to the rich, and then to the not so rich, and then to the not so rich, less, even less, and even more.

And then next thing you know, now they have an exception to the rule for everybody. It’s called an IRA. Now think about this. The government creates the problem. The government provides the solution to the problem. Do you think that maybe, just maybe, you might be, you know, you might be subject to manipulation there.

I mean, if they really wanted to solve the problem, what would the solution be? 

Olivia: Possibly to lower taxes. 

Tim: Wouldn’t that be the logical solution? But do you think that’s going to happen?

Olivia: It can’t at this point because every, every splash has a ripple and we’ve got into a very high level of government debt to say the least, and that’s just one layer.

And then adding on the, the rising interest rates on top of that. So it’s impossible for them to slow down now. And it’s just math, you know, at the end of the day, it’s just math. 

Tim: You know, so the, the big thing is people think, and they’re, they’re led to believe by their, accounting or their, their tax people, that if you defer money into this retirement account, you’re gonna save X amount of dollars in taxes.

So let’s say you’re in a 30% tax bracket and you put $10,000 into this retirement account. Hey, you saved $3,000. Eh, no you didn’t. You deferred $3,000 of taxes into the future. Now let’s look at, did you really save money? 

Olivia: It’s funny because. You know, we get, we get calls every single year around tax time where our clients are saying, hey, my accountant said I could save on taxes.

Like I need to get money into my qualified plan. And we’re like, do you have the money accessible to put into your qualified plan? Is that money baked into your cake? Is that in your cashflow to put away 10-20,000 dollars into your IRA? And a lot of the times the answer is no. Right. Cause if it was, then you just pay the taxes, right?

You’d have the money to pay the taxes instead of scrambling to figure out how to save on taxes. At the end of the day, no one wants to pay the taxes. But another thing to consider there. On top of deferring the taxes into the unknown future, you’re also losing access to that money, you know, you’re not that money isn’t accessible before age 59 and a half without penalty and regardless of when you take it out, it’s going to be fully taxable as income at that time.

So if you want to use it to accomplish a financial goal down the line before age 59 and a half, you’re subject to taxes and a penalty. So then you really didn’t save any money on taxes. You know, they’re getting you one way or another. And a lot of times it’s where you’re worse off for it. 

Tim: Well, absolutely.

And now let’s add another layer to that cake. Right. And think of it this way. When you have to pay more for goods and services in the future, not through your own fault. But because the government is printing more money and printing more money just increase, increases the cost of the goods and services that we’re consuming. 

Olivia: Hashtag inflation.

Tim: That’s called inflation, right? So isn’t that, isn’t inflation another tax? 

Olivia: We call it the stealth tax around here because it affects each and every single one of us. Some more than others, you know, the lower your income, the more you’re going to be affected by the effects of inflation that are eroding away at the buying power of our dollars.

And a lot of people don’t consider the effect of inflation on our retirement savings, right? Because we see maybe we’re earning so much rate of return on, on our, our retirement savings, our retirement investments, maybe we’re paying fees, maybe we’re going to pay taxes. But what’s not considered is that when you put that dollar in, in 2023, that’s the most that dollar’s ever going to be worth ever. So…

Tim: Meaning that, meaning that that dollar can buy the most goods and services in your life going forward. 

Olivia: Yeah. 

Tim: Right? As inflation affects those dollars going, that dollar going forward, you’re going to be able to buy less and less goods and services with that dollar. So, but, you know, so now let’s sort of, the picture is starting to come together. You’re told you’re saving taxes, and in the example we used, $3,000 you’re saving in taxes.

And you believe it because that’s what you see on your tax return. Right? This is go, goes back to what Nelson always said, the seen and the unseen. We see the $3,000 we’re saving in taxes. We don’t see at the time of that deduction or the time of that deposit into the account, we don’t see the taxes we’re going to have to pay in the future.

We don’t see or feel the cost of inflation on that money. And, you know, another thing we don’t see or feel is did we make or lose money on that deposit over time? So all of these things paint a picture that oh well, I don’t know what the taxes are going to be in the future. I know that the dollars that I’m taking out of that account down the road are going to have less buying power than the dollars today, but I don’t know how much less.

I don’t know whether or not I’m going to have, I’m going to lose money or make money in that account. Now you’re looking at it and saying, boy, am I saving money? Or am I just greasing the wheels of the, you know, the accounting industry and the financial services industry and the government, and they’re just using my money to sort of advance themselves and me, well, I guess I’m left to sort of sink or swim on my own.

Olivia: And that’s the case. A lot of times. And, you know, a lot of times there isn’t enough money in those accounts for, for someone to retire comfortably. In the past it used to be that your employer would provide a pension and all of that risk was placed on your employer instead of on that individual.

But nowadays, ever since we have these qualified plans and the accessibility to them, all of the investment risk is on the individual. And we’re seeing now how that’s working out with so many people. Unprepared for retirement, you know, whether, whether they’re saving in their 401, 401k or not, you know, um, it’s, it’s sad and it’s something that needs to be addressed as soon as possible so that you’re set up for financial success throughout your life and also saving in a place where the government can’t get their hands on it, you know, a place where, um, that money’s safe and there for you, your business, and your family, and no one else.

Tim: And, and that’s, that’s a such a great point, right? Wouldn’t the best way to overcome taxes be to put your money in a place that the government can’t get at? 

Olivia: Contractually. 

Tim: I mean, how much, how logical is that, that Wait, you mean to tell me there’s a place I could put my money that the government will never be able to get its hands on it?

Olivia: Well, you think about it, like, the government are the ones making the rules. And they’re making those rules frequently, you know, mind you. They’re not just saying, let’s make these rules, set it, and forget it. We see how often the rules have changed between, um, in those qualified accounts. Between the beneficiaries, between the RMDs, between everything.

We don’t know what that’s going to look like down the line. 

Tim: And who do they, who does the government lean on when they’re making these regulations? When they’re changing these laws? When they’re setting up, uh, when they’re setting up, uh, regulations? Aren’t they using the access to the large companies, the ones who are going to benefit the most?

So think about this, the people who are making the laws, right? So, they, they make the rules, they profit from your participation, and they control the outcomes. What chance does the individual or the, or the, the average person or business owner have against the big corporations and the government and the financial institutions?

I mean, it’s, the deck is stacked so far against us that it’s really, really difficult to get ahead. And we’re seeing that more and more today because of inflation, because of taxation, because of the amount of money that the government’s printing. The little guy’s getting squeezed out, no doubt about it.

And just, you know. Rightfully or wrong, wrong, right? Let’s look at COVID. They put the little guy out of business, the small business owner, but you can go to Walmart, you can go to the big corporations, you can go to Target, but you can’t go to Joe’s store down the street. 

Olivia: Yeah, it’s sad, and I’m sure many people are still recovering from those effects, and the effect that it had on their business during COVID, and then after.

But yeah, it’s hard. It’s hard as a business owner, and it’s important to that’s why we always talk about making your money as efficient as possible, setting it up. So, you know, you’re in control of it. You know, you’re not being squeezed by all of those outside entities, all of those, those things that conventional wisdom teach us to do.

And we do so naturally because that’s what everyone else is doing. That’s seems to be the only way, but there is a way to set yourself up and your family and your business so that you could regain control of that. Um, and do it in a tax efficient manner. 

Tim: Yeah. I think you have to realize from this perspective, a lot of what we think to be true about taxes may not necessarily be true.

And if what we think to be true is not true, how soon do we want to know? When do we want to know that what we thought or believe to be true about taxes? This is really not true. Do we want to know now or do we want to know 30 years from now or 20 years from now? 

Olivia: It’s always better to know as soon as possible.

So you could start making those incremental changes. Those, put the ripples in the other direction, if you will, so that you’re moving towards your financial goals rather than being separated from them unknowingly and unnecessarily. If you’d like to learn more about our process. At Tier1 Capital, be sure to check out our website at tier1capital.com. 

You could feel free to schedule your free strategy session right on our homepage. We’d love to speak with you personally about your specific situation. Thank you so much for listening today. We appreciate it from The Control Your Cash Podcast. We’ll see you next time. 

Olivia: Welcome to the Control Your Cash podcast. Today we’re going to be talking about life insurance, specifically as it relates to how to attract, retain, and reward your key employees. Hi, I’m Olivia Kirk.

Tim: I’m Tim Yurek. We’re from Tier One Capital, and we’re here to show you how to regain control of your money.

Olivia: So tell us a little bit about why executives and why companies and business owners would want to use life insurance instead of investments for attracting and rewarding their key employees.

Tim: Well, there’s a couple of reasons. First and foremost is the fact that built into the life insurance with the death benefit, a company can get a true cost recovery of the benefits and properly structured you can utilize the cash values to help you know, fund a an executive retirement plan or an exit strategy for the owner of the business and then the death benefit, if the company retains the policy, the death benefit can be utilized to cost recover all of the premiums paid and the benefits paid out of that policy.

That’s why you see large corporations, uh, for example, banks. Banks utilize What’s known as BOLI, Bank Owned Life Insurance, and they utilize that to cost recover the cost of their benefit plans, and also to fund their SERPs, Selective Executive Retirement Plans, for their key executives. And again, life insurance creates a nice little cost recovery, but then there’s other benefits.

The second benefit is, if something happens to the executive before they reach the retirement age, you have the death benefit that would kick in, the corporation would get the death benefit and then they could pay the death benefit out as a guarantee of salary continuation for the executive that was deceased.

And I think another big issue is the fact that life insurance, the cash values build up on a tax deferred basis. And what that means is the company doesn’t have to pay tax on the growth inside that policy Until they take it out assuming that cash value is greater than the premiums paid in. So there’s a lot of moving parts so to speak or a lot of little benefits that up that add up to a huge benefit to for a company to utilize life insurance as the funding mechanism for their executive benefits.

Olivia: I got ya. So, you know, in today’s world, as a small business owner, there’s a lot of competition for employees out there. At the end of the day, there’s only one pool of talent, right? And everyone’s competing for the most qualified people out there. So if you’re a small business owner and you have a key employee who’s an asset to the company, it makes sense to want to retain them because the cost of hiring someone could be to 200 percent of what you’re paying your key employee right now.

So setting up these these benefits for the employee and making them attractive to the employee. Because at the end of the day, what one out of every two employees is actively looking for another job out there, at least open to the conversation. Um, it’s important to make sure that you’re competitive with what’s out there in the market.

So you’re not losing that key employee, losing their talent, losing all of that knowledge that they hold within themselves, and then having to start over from scratch at a higher cost. So, um, how do you structure these plans to make it worthwhile for the employee to stay? 

Tim: Well, that’s a good question. And so let’s step back a little further, right?

So during the great resignation, Over 28 million people voluntarily left the workforce. They voluntarily quit their job and they went other places. Maybe places where they were appreciated more. Or maybe they were a place where they were getting executive benefits. So, that’s the first thing. The other thing is, think about this.

At the height of this great resignation, 4 million people every month left their job. And that’s especially troubling for small businesses because small business owners, the, a key employee in a small business, might be the only employee within their geographic region that holds the skill set the company needs.

We had one client, as you know, their, their project manager retired and the company literally did almost everything but stand on their head to get this guy to stay with the company. We’ll let you work, you know, Tuesday, Wednesday, Thursday. We’ll let you, you know, we’ll give you extra time off. We’ll pay you 50 percent more to work 40 percent less.

And the guy said, listen, I’m 65, I’ve worked all my life. My wife and I are in good health. We want to travel. We have plans for retirement. There’s nothing you can do to keep me. Here’s the point. It took three people to replace that guy because of the skill set that he had. And that’s something that more and more businesses are being confronted with on a daily basis.

Now, here’s another thing that has to be considered. A midsize or a large corporation is getting a lot of attention from the benefit planning companies because they have the critical mass to make it worthwhile for those businesses, to put in large benefit packages for their executives or their group of key people.

But a small business might only have one or two key people. So these benefit houses are looking at them and saying, well, you know, it’s not really worth our time to just set up plans for two people when we can go and do basically the same amount of work and set it up for seven or eight people. It’s a lot easier and well, it’s more profitable for them.

So the small business owner is really being underserved in that market, if that makes sense. So to answer your question, how do you set up these plans? Well, it starts with a meeting with the company to see, you know, what their appetite is, or how they’re being affected by what’s going on out in the workforce.

Do they have key people? If they left, what type of impact would that have on their cash flow on their business? You know a lot of times you get a guy who might be a great salesman and he uh, you know is, is doing 60, 80 percent of the company sales, and all of a sudden he decides he wants to start his own business.

Now all of a sudden you’ve just trained your biggest competitor, and oh, by the way, he’s taken all of your key customers and your key accounts. So you gotta look at what can we do to make sure that this guy stays around. And a lot of times I heard one story, um, sort of similar situation. There was a guy who was a key salesman and he learned the business and he went to the company.

He realized that he was 65 percent of the overall sales of the business. And he went to the owners of the company and said, Hey, you know, give me 10 percent equity in the business. All he wanted was 10 percent. They’re like, no, no, no. You know, this is a family business. We’re not. He said, oh, okay. He went out started his own business within a very short period of time, two years, put that company out of business.

You know, I mean, so that was really not a good move.

Olivia: Talk about a worst case scenario. 

Tim: And here’s the point we could have designed a phantom stock plan that would have. Uh, mirrored, yeah, would have mirrored the equity in the business, but it would not have given…

Olivia: Actual stock.

Tim: Actual stock or an equity position. And I bet the guy would have taken that.

He would have, he would have loved that, right? Because now he doesn’t have any of the bad parts of the business. He just has the equity growth. That’s huge.

Olivia: Yeah. 

Tim: So. You know, again, setting up these plans starts with a, a conversation with the business owners. And then, here’s the key point, having that conversation with the executive, finding out what’s important to that individual.

And I’ll give you an example. You know, we worked with a manufacturing company out in Long Island. And we met with the executive. Oh, here’s the other thing. They had, they brought in this consulting firm, big time business consulting firm that did executive benefits from Chicago. So they bring in these hotshots from Chicago who charged them $18,000 to do an analysis that we did for, we would have done for free and they did the analysis and then they came back with a plan that the executives, weren’t interested in because it wasn’t… 

Olivia: It didn’t meet their objective, what they care about.

Tim: Exactly. It didn’t meet their objectives.

Olivia: Hey, do you care if we put this in place for you? Is this going to to make you want to stay with us? You know, is this valuable to you?

Tim: How much value will would do you see in this they saw no value in it?

They went to the company and the company said well that’s gonna cost too much to fund. It just was not from either side whether from the executive or the company it wasn’t a viable plan. So the company now has a bad taste in their mouth. And, you know, we get referred in, we come in and they’re like, you know, sitting there with crossed arms because they’re thinking this ain’t going to work because of their past experience.

So the first thing we said was, listen, we’ll do an analysis. It won’t cost you anything. So that sort of brought their guard down a little bit. But then more importantly, we sat down and found out what the objectives of the company were. Which they wanted to reward the CEO who had been there so long and they wanted to reward him for growing the company.

But then they had that CFO that they needed to do something for. That they wanted to reward him. But now doing it in a way that was beneficial or that was valuable to him. So we sat down, we had the key conversation with him. And then all of a sudden found out that you know, he had an eight year old and a six year old.

He needed to educate them, and he had gotten a late start in life. He hadn’t planned and saved money for them. So we designed a plan that would pay $60,000 per year for each of his children for four years while they were in college. In essence, we paid for their, for his children’s college education. As you know, when we delivered the plan, he was in tears with gratitude. 

Now the point is this, that guy ain’t going anywhere. He’s beholden to that company because that company is going to educate both of his children and it won’t have to come out of his pocketbook.

Olivia: Right, right.

Tim: Right, and and so here’s the deal all he’s got to do is what he’s been doing every day show up go to work. Do everything that he does and do it to the best of his ability. He’s all in on that.

Now, he’s got a greater incentive to look out for the benefits of that company. Why? Because that company is taking care of his, his responsibility, which is to educate his children. So the point is, getting to that valuable point, or understanding what’s important to the executive, as well as what’s important to the company, then our job is easy.

Then we just find a way to make it happen. And the key is there are so many different types of plans out there. We could help people to find the right plan for them. That fits their budget, might be more, you know, balance sheet or income statement friendly, and all of a sudden, now we’re adding value.

Olivia: Right, because although you’re quote unquote paying for, for this benefit, you’re also building an asset that’s on the company’s books. So it’s not, you’re just dishing out all of this money and never seeing it on the balance sheet. You have the benefit. Growing and accumulating within the plan and then also on the back end, you have that cost recovery associated with the death benefit, which is a huge deal for the company because basically of the money that you put into the plan, you’re able to cost recover when that insured passes away.

Tim: Yeah. And again, when you set it up properly, we set it up where the company would get a rate of return, not only get their money back, but get it back at an opportunity cost. So now all of a sudden they’re getting their money back. They’re getting growth on that money and they’re locking in this key person and they’re providing a benefit that is recognized as a huge, massive value for that executive.

Again, that’s the best way to do it. And You know, we’ve, as you know, we do that over and over and over again, but the key is having those key conversations. 

Olivia: Exactly. And then thinking about it from a business perspective, right, once that person dies and you get that death benefit, it infuses into the company, right?

So you could expand the company. You could create another plan for your next key employee that you don’t want to lose. And it kind of creates a momentum within the company because cashflow is the lifeblood to any business. So creating that perpetual motion by insuring these key employees is actually a good thing from a current cashflow perspective.

And then those windfalls coming in down the line as well. 

Tim: Yeah. And think about this. Most companies, you know, there’s a, we have a saying, are you insuring your PCs, right? Your personal computers. More than you’re insuring your VPs. And think about that. Computers don’t make your business what it is. You’re key people.

All of your people make your business what it is. You know, your business is just a building and its equipment. But it’s the people that are operating the equipment. It’s the people that are inside the building. that make your business successful. Doesn’t it make sense to insure them? Because God forbid, if you lose one of them, that’s going to cost you money to try to replace that person.

Olivia: I’m thinking about this from a family, a small family business perspective. Um, this would be extremely beneficial for um, those multi-generational businesses, you know, the younger generation ensuring that older generation while they’re still insurable, while you could still afford that cost, um, on that person would be a huge, a huge incentive, right?

Tim: Yeah

Olivia: A huge relief off that second generation, right? Because, you know, think about the value that that original or older generation holds within the company.

Tim: Right. And you think about, you know, the, the likelihood of a business going to the second generation or the third generation, or even the fourth and fifth generation.

It’s, the odds are insurmountable for a company to get to the fourth generation. But yet we know a lot of businesses locally and nationally that are in the fourth and fifth and sixth generation. That’s where they did the planning. That’s where they had the key conversations to make sure that everything was done properly, to make sure that the business could pass to that next generation in the most tax efficient and most effective way going forward.

Olivia: So when you’re, when we’re thinking about, you know, multi-generational family businesses, how important is that cashflow in making sure that the business is able to go multi-generations? Um, cause you know, when, when the key person dies, when, you know, the first generation passes away, they not only, you not only lose that family member, but you also lose that family member’s mentorship and their knowledge and, and their relationships often could go with them.

Tim: Right.

Olivia: You know, you, you didn’t have those, um, relationships. You didn’t build those relationships as firmly necessarily as that first generation. So, you know, you’re up against a lot. Um, you know, when that first generation passes away and not only that, but maybe the proper planning wasn’t put in place, and you have to buy mom out of the business now.

You know, how are you going to do that when now you’ve lost your relationships, you’ve lost the revenue, um, you’re still figuring out all of the things that that person was doing? Um, the cash flow could make a huge difference in those, those situations. 

Tim: Oh yeah, and then you have another issue. And the other issue is maybe the banking relationships that the business had we’re with the, let’s say the founding generation and all of a sudden the founder dies and the bank doesn’t have the same relationship with that next generation and that next generation doesn’t have the, maybe the talent, maybe it does, but it certainly doesn’t have the relationships and all of a sudden now, you know, uh, a very good banking customer all of a sudden becomes not quite as good.

And now the bank looks at this, are, you know, uh, yeah, we understand you need more money to, you know, an increased credit line and some, some equipment loans, et cetera. We understand you need that money, but, you know, we had a great relationship with your dad. We don’t, we don’t know you, and you don’t have as much of a track record.

And your dad had all the relationships, you know, with, you know… 

Olivia: It all of a sudden becomes riskier for the bank.

Tim: It becomes a riskier proposition for the bank. But here’s the point. What could solve that problem for the next generation? Wouldn’t it be, so the problem is the death of the founding generation.

Wouldn’t the solution be, wouldn’t it be neat if you could have the, the event that triggers the problem, the death of the, of the founding generation? Wouldn’t it be cool to have that same event, the death of that individual trigger the solution to inject the company with cash.? I mean, it’s just efficiency of money.

So now think about what you could do. You can set up a succession plan for the founding generation, an exit strategy, funding these benefits. And then when the founder dies, you get an injection of cash that the second generation or the next generation could utilize to, continue to, to, to operate the business and possibly to grow the business.

It’s all possible. It just becomes an issue of, are you doing the proper planning?

Olivia: Yeah. At the end of the day, the planning is, is going to be the key. Setting up those, those documents with the lawyers, also setting up the plans that are properly funded, that have the proper amount of death benefit to allow these goals to be accomplished.

Because it is possible at the end of the day. But it’s not possible if you don’t do the proper planning. You know?

Tim: Yeah, absolutely. And so oftentimes we’ll see that where companies didn’t do the proper planning or they did the planning and it wasn’t set up properly or it was underfunded or God forbid they used the wrong types of insurance and we see that so often, um, it’s a shame, but it, it happens.

Olivia: With the proper planning anything is possible. Especially when it comes to family business or small business it is important to address these issues, make sure that proper planning is in place so that what you want to have happen is going to happen, even if you’re not there to see it happen. Many times, small business owners and family business owners are putting their heart and soul into this business only to have their years of hard work, dedication, and perseverance demolished at their death.

You know, because at death come, there’s a lot of costs. There’s a lot of things that need to happen at that time that cost money and time. So if you’d like to get started with a plan designed for your family business, your small business to make sure it makes it to that next generation or to make sure that you’re able to exit without bankrupting the business or without closing those doors.

Check out our website at tier1capital.com. Schedule your free strategy session today. We’d be happy to speak with you about your specific situation. Also on our website, we have a free guide. The six critical questions to ask when doing this type of planning. Just click on the button that says business planning guide under our free resources.

Tim: Thanks for listening to the Control Your Cash podcast. I’m Tim Yurek. Until next time.

Olivia: I’m Olivia Kirk. Have a great day. We’ll talk to you soon.

Olivia: Hello and welcome to The Control Your Cash Podcast. Hi, I’m Olivia Kirk. 

Tim: I’m Tim Yurek.

Olivia: And today we’re going to talk about the importance of controlling your cash as a business owner. When it comes to having a family owned business, cash is king. Not necessarily physical cash, but cash accessibility. 

Because let’s face it, whoever controls your cashflow controls your life and more importantly controls your business. I mean most business owners get into their own business to control their destiny. They’re sick of working for the man and they’d rather call the shots and hold their destiny in their own hands. 

Tim: So the key here is having access to cash. And one of the things that I really enjoy about working with business owners is the fact that we can show them how to get one dollar to do multiple jobs. And by that, I mean, you know, maybe they’re setting up plans to fund their succession plan, or they’re setting up plans to attract, retain, and reward some key employees, or they’re trying to set up an exit strategy.

But along the way, if they’re doing this properly, They’re allowed or they’re able to build cash and by having that access to the cash, they can use it to help grow their business. So they’re getting one dollar to do a succession plan or key person retention, but that same dollar is building up cash that they could access and leverage to grow their business.

One dollar, two jobs. And I got to tell you. That works out so swimmingly well for all the business owners that we’ve dealt with. 

Olivia: Exactly. We recently worked with a business owner. We started policies for key employee purposes. Meaning they cross purchased. One owner bought a policy on the other and vice versa to fund a buyout in the event of one of their deaths so they wanted to have that funding available at the death of whichever partner comes first. And they had no plans on accessing that cash whatsoever throughout the life of the policy. But life happens, things change. The economic environment that was there when they started these policies, let’s say five, five years ago, about six years ago.

Yeah. That it was very different back then versus today where inflation is up. Interest rates are up and cashflow in a lot of situations is coming back down because of the squeeze on the consumer. 

Tim: Yeah. And the irony is when we, as Olivia noted, when we, we originally put the plan into effect, we mentioned to them, Hey, you could also borrow against this cash.

And they said, Oh no, we would never do that. So, okay, well, just keep that in mind because it’s certainly an option for you. Well, now fast forward to August of this year. A couple months ago, and we get a call and, Hey, how much cash is in those policies? And we told them and they said, uh, We need a loan. I said, Oh, okay.

What, what changed? You said you weren’t going to borrow. He goes, well, we bought a truck in July. We did it like we always did. We borrowed against our, on our credit line. And we got our first interest statement and it was 9.5%. How much does it cost to borrow against those life insurance policies?

Well, it was 5.35%. He said, well, we’ll take that loan. But here’s the point because they built up this pile of money Now they have the option to use it. And that’s where the freedom comes in. So in their mind They’re looking at it like okay 5 and 5.35 is lower than 9.5 and I get that part of it, but…

Olivia: That’s just the beginning.

Tim: That’s just the beginning. So he calls me and says, Hey, how do I start paying this loan back? I said, well…

Olivia: Do you want to? 

Tim: When, when do you want to? He goes, What do you mean, when do I want to? I said, Whenever you want to start. This is an unstructured loan. So that means, you decide when, and actually if, you pay the loan back and then you also decide how much and oh, by the way, if you commit to a certain monthly figure and you find out that cashflow is not as good as in the previous months as it is now, you can stop it or reduce it.

And that’s when it’s the light bulb went on for him and he’s like, Whoa, we are in control here, aren’t we? And that’s the point. You know, financing in and of itself isn’t bad as long as you’re in control of the process. And that’s the thing that I think the value that we can bring by utilizing plans that are set up for different purposes.

But now we can leverage the cash, and that provides the freedom.

Olivia: Yeah, exactly. And think about it. By borrowing against the life insurance policy, through these policy loans that are contractually guaranteed in these contracts, it doesn’t impact the net worth of the business. Meaning, whether they pay cash, financed traditionally or financed through a policy loan, the piles of cash are still the same.

They still have the asset worth X amount of dollars and they still have a decrease in cash, a loan from a bank, or a lien against that life insurance policy loan. And let’s just take a step back here and talk about the benefits of borrowing against a life insurance policy. First of all, it’s contractually guaranteed as long as they have cash in that policy, they’re able to access it on a guaranteed basis.

Because the way life insurance policy loans work is unique. In that the life insurance company is actually giving the policy owner a loan from the general account of the life insurance company, not the life insurance policy. The life insurance company then places a lien against the policy owner’s cash value.

Meaning after you borrow, let’s say $150,000, you don’t have access to that $150,000 until it’s repaid. And they charge you interest. So when you’re paying back that loan interest, it’s going towards the insurance company’s profits for the year. But when you use a mutually owned life insurance company, the owners of the company who are going to benefit from the profits that the insurance company makes are actually the policy owners.

So when the life insurance company is making that profit, it goes to the dividends. It’s passed along to the policy owners in the form of tax free dividends. Meaning when the insurance company does well, the policy owner does well. Additionally, with a non-direct recognition company, the performance of that policy isn’t going to be impacted when you take a policy loan, meaning your dividends, your growth within your policy is going to be exactly the same, whether or not there’s a loan against that policy.

The only consideration that needs to be taken into account. Is that loan interest, that’s the only cost that the policy owner is incurring on this loan. 

Tim: Yeah, and I think the thing that people miss or the point that a lot of folks miss is the fact that we finance everything we buy. So whether you finance through a bank or you finance through a life insurance company or you pay cash. Every one of those choices has a cost.

And it just, it really becomes an issue of where are you giving up the least amount of money. And I have yet to see a situation where people were not better off borrowing against their life insurance versus any other form of finance. 

Olivia: Exactly. 

Tim: And, and, and that’s, that’s purely from a numbers perspective.

But, the hidden value when you’re borrowing against a life insurance company is the fact that you’re in control. You’re in control of the repayment process. You’re in control of the borrowing process. You’re in control of everything. And because of that, that’s the key for business owners. Most business owners, again, started their business because they want to control their own destiny.

But yet the bank owns them. Now, when we can cut the bank out and put them in control. Oh, my God. That’s a game changer. 

Olivia: Exactly. 

Olivia: I mean, how many business owners have we worked with where, by simply extending the amortization schedule of their existing loans and stop, you know, giving away every single dollar we make to the bank.

Think about the impact that would have on your business if, let’s say, you were able to cut your monthly obligations in half. And instead put that other fifty percent towards an asset that you own and control and could still leverage against without impacting the growth on that asset. 

Tim: Yeah. And that’s a really neat technique.

So a lot of times what we’ll do is we’ll actually do that. We’ll extend the amortization schedule to free up cashflow and use the cashflow to fund a succession plan or a key person retention plan or an exit strategy. And now again, we have that money building up. Now we can utilize that money to ultimately go back and pay off that loan.

So now instead of taking, let’s say half of the loan and using that to build an asset, now you’re taking a hundred percent of the loan monthly loan payment and using that to build up and replenish what you borrowed and that really, again, puts the business in a much stronger position. And let’s face it, you know, the way things are shaking out, businesses are being squeezed from so many different directions.

Interest rates are up. Inflation is up. There’s turnover over on their, their workforce. You know, the great resignation. That’s a thing. That’s, you know, four million people every month left their jobs. 

Olivia: Willingly. 

Tim: Willingly. And then, again, now, just to underscore, businesses are dealing with the twin challenges of high interest rates and high inflation.

It costs more for inventory and supplies. It costs more to hire new people. And It’s costing more to borrow to capitalize your business, but boy, isn’t it great if you can be in control of that borrowing process? That, that’s just a game changer. 

Olivia: Yeah, and we say it all the time, whoever controls your cash flow controls your life.

And with our client who recently took that loan to finance the truck, they’re going to wait until their busy season when their cash flow is flush. To knock down that policy loan and the key difference between traditional financing and financing with the policy loan is once they start chunking away at that policy loan. They’re gonna have access to that hundred and fifty thousand dollars that they borrowed again, so that when the next thing comes up, they’re able to rinse and repeat they’re able to finance again using those same dollars.

Tim: Yeah, and, and that’s, that’s key because every payment you make on the loan reduces the outstanding loan balance, but increases the amount of equity you’re eligible to take next month.

Olivia: Exactly. 

Tim: Or whenever, whenever that time period is, you know, whenever you want to take another loan, you know, and that was another thing that he had asked me, he said, well, Is there any limit to how many loans I could take? No, you could take a loan every month as long as there’s, or every day. As long as there’s equity to borrow against, you have the, the contractual right to borrow it.

Olivia: Exactly. And that’s, that’s, I mean, what more could you ask for as a business owner? Access to cash when you need it, plus, you’re able to accomplish other planning goals, whether it be business succession, key person planning, employee retention. Or any of the other things that we deal with that we have to deal with as business owners.

And that are a lot of times avoided because of the complexities of this type of planning. And not only that, but the cashflow that goes into this planning, you know, there’s a price tag to solving these problems, but by looking at the business overall, looking at the cashflow, looking at the debt, seeing where we’re able to free up the cashflow, you’re able to keep the cashflow the same.

Or close to the same, have minimal impact on it, because whoever controls the cash controls your life, you need cash flow, it’s the lifeblood of any business. So we want to make sure that we’re achieving these goals without pinching the cash flow, because at the end of the day, you need the cash flow, you know, and you need to accomplish these planning goals, because the longer you push it off, a lot of times the more expensive it becomes. 

Tim: You know, and one of the other things that, You know, MetLife did a survey and found that over sixty percent of business owners think that a recession is right around the corner. And if that’s the case, having access to cash is going to be the key because the first thing that’s going to dry up and it’s the first thing that dried up during the 2008 financial crisis was access to capital.

That’s when banks started calling in their credit lines and, uh, whether it was a home equity line or a business line, they closed out those lines. Now, just when things are getting tough and you need to access money more than ever, now the bank is pulling the rug out from underneath you. You know, there’s a saying that a banker is somebody that’ll sell you an umbrella when it’s sunny and take it back when it starts to rain. 

Olivia: That’s the perfect example of that. And, and as the business owner, you have to think about it from the consumer’s perspective as well, because interest rates increasing, inflation increasing, and a lot of the employees, most of the employees out there aren’t increasing their income to keep up with these increasing costs. We see that in the increase in consumer debt that’s going up quarter after quarter and is actually at an all time high all across America. They’re not decreasing their, their lifestyle. They’re not able to, in a lot of cases, they’re keeping up with their lifestyle, but the cost of that lifestyle is increasing month after month after month.

Even if the Fed is saying that, you know, inflation is at 2%, they’re not counting the things that really matter that are actually impacting us as Americans. And that’s going to be felt by the consumer as well as the business owner. 

Tim: Yeah, everything is going to certainly pass down to the consumer, right? So when the things dry up for the consumer, they start buying less.

And when they stop buying less, that affects the business. So again, having access to cash. Not only can position you to be in control, but also can position you to not be a victim of a recession, and actually put you in a position to take advantage of the recession, where now if you have access to cash, maybe you can go and buy somebody, buy some inventory from a competitor who’s going out of business.

And guess what? You’re going to buy that inventory for pennies on the dollar.

Olivia: Yeah, yeah. I mean, I, I believe more millionaires are made during recessions than any other time. And it’s not for lack of preparation. Those who have cash are going to be able to take advantage of the opportunities when they arise.

When the stuff hits the fan instead of being a victim of this recession. And the key is to have access to cash, to be in the position where you’re able to take advantage of the opportunities rather than being a victim of the external world.

Tim: Yeah. And that just, you know, being in control, having access to capital puts you in control.

And when you’re in control. Now, you’re in a position where you can start taking advantage of opportunities, and boy, there is no small price tag you could put on the freedom that that creates.

Olivia: Exactly. If you’re a business owner and you’re worried about the recession and you’re ready to become an opportunist in this next recession instead of a victim of it.

Be sure to check out our website at tier1capital.com to schedule your free strategy session today. We’d be happy to go over your specific situation and talk about how to position you to take advantage.

Tim: Thanks for joining us. We look forward to seeing you again. 

Olivia: ​ Hello, and welcome to The Control Your Cash Podcast. I’m your host, Olivia Kirk.

Tim: And I’m Tim Yurek.

Olivia: Today, we’re going to talk about why it’s not what you buy, it’s how you pay for it. That really matters. Um, Tim, tell us a little bit about, about this concept and how, how we came, came about it and why it’s so important in people’s lives.

Tim: Well, you know, it’s interesting because let’s face it, everybody thinks they’re using their money in the most efficient and most effective way because they’re following conventional wisdom. But what they don’t realize, and what I didn’t realize is that, you know, we’ve been trained by the financial institutions, by the government, by the large corporations we’re dealing with.

To use money in a way that benefits them. And, more importantly, it’s to our detriment. So, as I started realizing this, I figured that, you know, maybe it’s not what you buy. Maybe it’s how you pay for it that is holding you back from reaching your full financial potential. So that’s pretty much how I, how I sort of discovered this by accident.

Olivia: Yeah, absolutely. And, and it’s so true that everything we buy is financed, whether we pay cash or finance traditionally through a credit card or bank. Um, but what people tend to forget and don’t realize is that our cash has a cost as in, if we spend down that cash, that account balance, whether it be draining an investment account, draining our savings account, whatever it is.

We’re giving up opportunity cost on that money and that opportunity cost also compounds, right? So we have, you know, the interest we could be earning on our money now, but also the money, the interest that we could be earning on that money in the long term. And that’s money that we could never recapture.

So, you know. If you have a major capital purchase to make and you have the money in your bank account, how tempting is it to just drain down that bank account to avoid the finance costs? But what people don’t realize, and it’s easy not to realize because there’s no price or no interest necessarily on our savings account.

So you don’t see the interest that you don’t earn.

Tim: Yeah, and that’s one of our, one of the things we always tell people is you’ll never see the interest you don’t earn. And It’s funny because everybody obsesses over the interest they’re going to pay on a loan, whether it’s a car loan or a mortgage. You know, a lot of times when you see the HUD sheet and you get when you’re buying a house and you’re like, Oh, I’m buying a $200,000 house and I’m going to pay $435,000 in interest.

I’m paying more in interest than the value of the house. Well, yeah, that’s true, but the answer isn’t to pay cash because if you paid cash for a $200,000 house, you probably would be out $600,000. total, which would be like $400,000 of interest that you could have earned. So, you know, you have to look at the numbers.

And I think that’s really the point. Again, it’s not what you buy, it’s how you pay for it.

Olivia: Yeah. And the numbers, the numbers are, are actually pretty tricky once you look at them because, um, the banks know how the numbers work. That’s their job. That’s how money. But every…

Tim: That’s their, that’s their business,

Olivia: Yeah, yeah, absolutely. And you don’t logically in the human mind, you don’t think, oh, if I have money sitting in account earning 4% and the bank wants to charge me 6%, obviously, like, I’m not earning as much money on on this, this pool of money.

So I’m going to drain it down to avoid that 2% extra interest that they’re charging me. But there’s a big difference between compounding interest, growing money on a large balance, a growing balance versus amortized interest where we’re paying interest on a decreasing balance.

Tim: Yeah. And so that concept of the difference between amortized interest versus compounded interest is bedrock in the foundation of what the banking industry is all about. And it’s something if we, if you don’t fully understand the implications of amortized versus compounded interest. You’re probably going to be making some bad choices only because your fear is that you’ll be paying interest.

And, you know, uh, we joke, but, you know, it’s sort of like a caveman. Uh, you know, compound interest, good, amortized interest, bad, you know, and it’s not that way, uh, but anyway, you know, again, that’s something that once you understand this concept, the decisions you’re able to make, you’re going to make them with much greater clarity.

And you’re going to make much better decisions. You’re going to position yourself, your family, or your business to take advantage of whatever the economy or the government or the financial institutions throw at us. Which I think is a good segue into some of the data that we pulled up, uh, doing some research recently.

So think about this. Americans are being squeezed from every direction. Inflation is up. Savings is down. Our access to cash or capital is running out. And what we’re seeing are some really troubling trends. First and foremost, that consumer debt, according to the New York Fed Q4 household credit report, was up over 16.9 trillion dollars which was up 2.4% from Q3 of 2022. That’s a, that was a record. Credit card balances reached over 986 billion dollars in Q4, that was up, get this, 6.6% from Q3 of 2022. Now, the Q2 report came out for 2023, credit card balances in America are over 1 trillion dollars. This was the highest quarterly growth ever.

So let’s face it. Things are getting bad and it looks like it’s probably going to get worse. Now, on top of all of that, according to a MetLife survey, uh, of small business owners, 50% of small business owners. see inflation as the greatest challenge. And that was up 31 points over 2021. But worse than that, a whopping 71% of small business owners think that the worst is yet to come as it relates to inflation.

So, you know, they’re, they’re saying the government’s saying “Oh, inflation’s down. We’re, we’re taming inflation”. Yeah. I don’t know about that.

Olivia: It certainly doesn’t feel like it. 

Tim: Right, you know, every time you go to the grocery store, every time you fill up your, your, uh, gas tank, uh, you know, the cost of college, the cost of housing, everything is almost out of reach.

Tim: Now, Olivia, I think you had some interesting information about this, uh, pending United Auto Workers strike and what effect that’s going to have.

Olivia: So, so today is November. I’m sorry, September 15th, 2023. And I believe at midnight last night, the, um, the auto workers, the auto workers are going on strike and. There’s such detrimental effects that are going to come downstream to the consumers, ultimately, um, in the form of lost jobs all costs all across the country in the form of we’re not only affecting the three car companies that are going on strike, but also, um, all of the other people in the supply chain, whether it be parts, whether it be, um, you know, the people who make the radios for the, for the car companies, this, this strike could have. The effect of hundreds of billions of dollars and just a short time on the American economy. And that’s not to mention that the student loans are coming out of forbearance.

I think that’s going to have a huge effect on our economy, right? Because, you know, all the millennials, if they stopped paying, and majority of them did stop paying back their student loans. It was like we got a raise, you know, um, because that cashflow is no longer coming out of our pocket to go towards student loans every single month.

Instead, it’s going towards our lifestyle. You know, we bought new cars, we bought new houses. Um, we bought whatever we want. We have an increase in cashflow. We got a raise in essence. And, our cash flow is about to be pinched, right? On top of inflation and on top of rising interest rates, on top of the cost of housing and gas and food going up.

Now we have to start paying a large chunk of our paycheck back towards the student loans that we put off for three years now. That’s going to hurt because we all know that our incomes aren’t necessarily, rising enough to even keep up with inflation, add on the credit card debt that we just mentioned is on the rise, right?

Because the cost of living, it’s really a compound and snowball effect that this is having on our cashflow. And that’s why it makes so much sense to make that cashflow as efficient as possible. And it’s more important to do that now than ever.

Tim: Yeah, that’s such a good point, right? So just getting all of that data and looking at it, what does it mean? Okay. So because think about it, they’re reporting that, hey, the economy is healthy, its getting stronger, we’re having all this record growth. Well, where’s the money coming from? Right? So now you got to sort of dig deeper and and read between the lines and and read the tea leaves and, and what’s going on there?

Well, yeah, people are using the money that they were paying towards college debt. Now they’re using that for their lifestyle. And the old saying stands true, a luxury once enjoyed becomes a necessity. So now, when student loans start, start up again in a few months, or actually it’s in November, right? So, you know, a little over a month. Wow, that’s going to be a pinch. That’s why credit card debt is up. People are, you know, the economy might be growing, but where’s the money coming from? Well, it’s coming from credit cards. So, you know, continuing with some of the data, 66% of Americans worry that a recession is right around the corner.

That’s up 48% from a little over a year ago. Now, how does this whole thing manifest, right? It manifests, and it affects, it causes stress. And stress affects our health. It affects our relationships. So the incidence of heart attack, stroke, cancer, kidney disease, depression, suicide, every, all these markers are up in, in, on top of that, what is it doing to our relationships?

What is it doing to it’s the incidence of divorces up. Um, what is it doing to our ability to do our jobs and our ability to run our businesses? So every, you know, every splash out there has a ripple. And again, Olivia, as you had said earlier, that’s why it’s more important than ever to make sure that you’re using your money properly.

We’re not saying don’t make the purchase. What we’re saying is make the purchase in the way that’s most advantageous to you. And that will give you more control. And again, we feel so out of control in so many aspects of our lives. This will give us some, a little control in an area that quite frankly is probably one of the most important areas because financial, if you’re out of control in your finances, that causes stress and worry, and that creates issues in every other aspect of our lives.

Olivia: That’s absolutely true. You know, when you’re, when you’re stressed about money, it’s so easy to lose sleep, right? And sleep is so important for the entire, the entire system, mind, body and soul, and your ability to work effectively and efficiently and to make an impact with your kids and your community.

And, you know, if if you’re worried about money and working harder, that takes away time from spending it with your family. It takes away time from contributing to your community. It impacts so much with just this one area of your life. So it’s so important that we keep it balanced and the way that we talk about doing that is by being in control of your cash flow, you know, giving away as little of your cash flow on a monthly basis as possible and regaining control of that finance function wherever possible, because with that, then you’re calling the shots.

Not a financial institution, not the government, not, you know, Citibank or Visa. These, these principles can also have a ripple effect in the opposite way. By controlling your cash flow, by making your cash flow more efficient, you could live a more worry free life because you’re calling the shots.

Tim: Yeah, that’s so important. And you know, that’s one of our key, key themes with where, how we help our clients most is in re, regaining control of their money. And so how does this happen? Right? And I think, you know, think of what we’re up against as individuals. We’re up against the marketing machines that are financial institutions, the propaganda machines of the government, large corporations.

They’re conditioning us to accept as normal, things that really aren’t normal, things that are advancing their interests and basically holding us back again to our detriment. So we can’t get ahead financially. How many people do we talk to on a weekly basis that are saying, you know, I’m making good money, but I just don’t feel like I’m getting ahead.

They’re all financially stuck and it’s so easy to get into that when you’re following all of this conventional wisdom and doing it the way that everybody else is doing it. And that’s where I realized back in 1993, I was doing very well and, and I was stuck. I was, I was living pay to pay. And how many people, I mean.

You know, Olivia, we, we had that one client. He was a surgeon, is a surgeon, making $800,000 a year, and he couldn’t take his family on a vacation to Disney without putting it on credit cards and paying it off over a three or four year period. Now, come on. It’s not the amount of money he was making that was holding him back.

It couldn’t be.

Olivia: Yeah.

Tim: It clearly was how he was using his money.

Olivia: Yeah. I was just thinking while you were talking, one of my favorite parts about, you know, what we do is that we’re able to help, um, the whole spectrum. It’s not just the people who, who are making exorbitant amounts of money. We could make cash flow more efficient for anyone, you know, whether they’re earning $40,000 a year or $800,000 a year.

But the key is a lot of people think and have the belief that I could out earn my problems. If I just earn more income, make more sales, get a better job, my problems are going to go away and I’ll be financially free. But we know from experience with people on every, every scale of the spectrum that if you don’t make your cash flow more efficient, those problems are going to continue to grow and compound as your income does.

It just makes the problem bigger if you’re not addressing the leaky holes in your bucket, we call them. You know, um, we liken it to a bucket with holes in it. There’s two ways to fill it up. Number one is to turn up the faucet. And number two is to plug the holes and then even if there’s just a drip, that bucket’s going to fill up.

And we know this very simply from when we have a leak in the house. If you have a leak in the house, that bucket fills up pretty fast. Doesn’t it?

Tim: That’s an inside joke, but, uh, tell them about it, Liv.

Olivia: You tell them about it.

Tim: Well, I guess, I guess their tenant left the hose on…

Olivia: Oh, my goodness. So we have a. We have a double block and the tenant left the hose on our usage quadrupled in one month and like, what the heck is going on? But it was just on very low for a long time. And it really makes an impact.

Tim: Yeah. So that’s the point. And you make a good point. Entrepreneurs, business people, sales people, we all think that we could earn our way out of anything. There’s, there’s no problem that we have that can’t be solved by the next sale, or the next, you know, bunch of sales, or the next large sale and we’re always, you know, everything’s on the come, but the problem is, okay, let’s say those, those sales come, come about and, and that you realize that you get this big sale and you have this big commission or this, you know, large amount of revenue coming into your business. If you don’t plug the holes in the leaky bucket, you’re going to go back to using the money in the way that you’ve been trained to use it, again to your detriment, and then eventually you’re going to be back to square one again. And what you’re doing is you’re losing time in this process. And that’s our most valuable asset.

Olivia: Yeah, let’s, let’s give an example of that. So one of, one of the biggest, I’ll call it mistakes that business owners are making and an easy way to adjust the cash flow is looking at your debt, your business debt, the amount of money that’s going out to creditors to lenders every single month, right? Because we all know we all think I should say that debt is bad and that it’s not good to be in debt because of that control factor, right?

When you’re in debt, you’re out of control of your cash flow. So as those sales come in, it’s natural to want to pay off those debt as soon as possible, you know, get the shortest amortization schedule possible, um, put extra money towards those payments. But when we do that, what’s actually happening, it happening is we’re decreasing the amount of cash flow that we have going forward.

We’re giving it all away to the control of the banks and the creditors. And then we’re left with a little piece. We don’t pay ourselves first. We don’t build a pool of cash for ourselves along the way. So that. We’re totally dependent. It’s backwards, but we’re totally dependent on the banks and creditors.

The next time we need to make a purchase the next time we need access to money because we don’t take this first step of creating a pool of money that we own and control and could leverage against in the first place.

Tim: Yeah, so if you don’t, if we don’t create our own pool of capital, we have to use somebody else’s. So that’s one of the, one of the things we see so often is business owners, they’re in a race. I always call it. They’re in a race to get out of debt so they can get back into debt. So, right? So they go from a situation where they have debt and they want to get out of it.

So they pay that debt down as quickly as possible, ignoring the idea of saving or creating their own pool of capital. And then, because they don’t have all their money, then because all their money went to the bank to pay that debt, another opportunity comes along, or an emergency, a piece of equipment breaks down, or an opportunity comes where you could buy a business or some, you know, some accounts and then all of a sudden you need capital. Well, you don’t have any capital. So what do you do? You go hat in hand back to the bank. And what does the bank say? Okay, no problem. You’re a good payer. We’ll, we’ll gladly give you this loan. And then here’s the question. Whose money are they giving you?

If you went back to the same bank. They’re giving you back your own darn money and they’re charging you interest and fees and you got to qualify to get it. Well, why don’t you just cut out the middleman, create your own pool of capital, and then you’re in control. Now you can loan it at your discretion, back to yourself or your business and pay it back at your, at your discretion, back to yourself.

From yourself and from your business. So, you know, these are some of the principles that we teach. But again, the foundation here is what? It’s not what you buy, it’s how you pay for it that matters.

Olivia: Yeah, and another thing that another scenario that could happen there is because you’re at the mercy of the bank for access to that money. If your credit isn’t, not in tip top shape. And especially now that the banks are squeezing, they’re not, they’re not loaning out as much, there’s a good chance that you may not qualify for money.

And then what, you know, you gave the bank all of your money, paying off that debt as quickly as possible. And now they’re saying, we’re not going to give you any more money. Um, and then you’re kind of really stuck because you’re not able to grow and expand and continued on your financial journey in the way that you want it to.

And that’s not a good situation either.

Tim: And this is, this is the reason why you want to create your own pool of capital. So you don’t have to jump through anybody else’s hoops to get to your money. Because think about this, when the economy slows down, if the economy slows down, what have you, what’s going to be the first thing that dries up for a business owner?

What’s going to be the first thing that dries up for an individual? Isn’t it going to be your access to banks, capital, or to money? And we’re seeing that now, right? Interest rates are rising. So it’s going to cost more to buy a house. And now you have to, you have to either buy less of a house or not qualify for a loan.

So all of a sudden your choices are going, are narrowing. But again, think about it. If you had your own pool of capital, you don’t have to play by the bank’s rules. Now you’re in control. You can go to the seller who, let’s say you’re, you’re looking at buying a house. You can go to the seller and say, Hey, you know, 250.

I can give you 225 cash, take it or leave it. And if, again, you have to be willing to walk away from that deal. But if that’s the case, now you, you let, let them make the decision as to whether or not they want to accept your offer. And again, if you’re willing to walk away from the deal, who’s in control, you or them?

Well, obviously it’s you. 

Olivia: Yes, absolutely. And those things that we believe are moving us forward financially are actually designed to move financial institutions and the government ahead financially because they have a lively head to think about as well. They have a bottom line. But if you’re ready to increase your bottom line and increase cash flow, you’re, for your family and your business. Be sure to check out our website at tier1capital.com. You could schedule your free strategy session today. We’d be happy to speak with you one on one about how we could make your cashflow more efficient, how we can move your family, your business forward financially, not just now, but for generations to come.

Thank you so much for joining us today on The Control Your Cash Podcast. We look forward to seeing you in our next episode. Be sure to subscribe wherever you listen to your podcasts. We’ll see you next time. 

Olivia: Hello and welcome to the Control Your Cash Podcast. Today we have Kenny Harper, a renowned business coach from Growth Amplifiers. Kenny, thank you so much for being with us today.

Kenny: Glad to be here and glad to be participating and sharing some helpful insights. Some of the things I’ve learned in my experience to help others on theirs.

Olivia: Great. It’s great to have you. I know that you’re going to bring a ton of value to our audience today. Um, do you want to start by telling us a little bit about your backstory, how you got started in this industry?

Kenny: We’re gonna go way back, way back to when I was a kid. You know, cause I believe, you know, we’re all born with unique purpose. We all have our individual talents, and sometimes we find them quickly, and sometimes it takes the scenic journey to find how to shine our light, how to show up as our best self.

As a kid, I was a little shy.

I kind of was, um, quiet, didn’t know how, how to connect with others, more of the artistic type. The loud, boisterous, um, sports professionals, they were complaining and competing about achieving their goals. I didn’t quite align with them. I like to play and be creative, but along the way, I realized that that quiet self, I developed empathy for others.

Empathy for those who maybe did things a little bit differently or weren’t on the top, weren’t the top, most successful, passionate people and connected with them. Then about the time I turned 14, my cousin took me to a rock concert and I, I got into rock bands and played rock and roll. 

And that was the first passion that I pursued where I was like, this is really what I like, but I didn’t learn the business side of how to be successful with that gig. So at some point in time, I had to find a way to pay the bills when I started getting just a little bit older, becoming an adult, and I found out that about marketing and advertising and helping people with, with design and using that creative mindset to still help others still use that creativity.

But now I found a way to get a job, to be employed with that. And I went to school for it, graduated top of my class, worked for some of the best advertising agencies uh, it was really great experience, but I had that little thing inside of me that was like, Hey, do you ever want to try doing your own thing?

Do you ever want to try going out there on your own? And it was about almost 12 years ago now. Oh my gosh. And I had just got married. I bought a house, had a kid on the way. And what I started to notice is that the clients and projects that are really appreciated and loved were the ones that I was getting to connect with the owner connect with someone who had more control and seeing how it could light them up, seeing how it could help them see their vision at a different altitude versus the large conglomerate, um, corporations or brands that they’re making money, but I don’t get to connect with people. So I said, if not now, when?

If I don’t try this now, is it going to get easier later? Probably not. So although I had a nice steady salary, although I had a vacation package and benefits, I said, let’s give it a shot.

I jumped out

And on my own. And I didn’t know, honestly, if it was going to work. I was going to be a freelance web designer. I’m like, we’ll see if this happens, see what happens. I’m going to try it for a year. If I do do it good, then maybe I’ll continue. If not, then maybe I’ll get a job again. I don’t know. Well, remember that whole thing I told you a little bit back where I was following my passion, but I didn’t really know enough about business. Well, that same thing revisited me.

I learned how to do another trade, another craft, but I didn’t know enough about business. And I was watching my bank account say dwindle because I didn’t, I didn’t know the business side of running a business. I knew what I did for a trade. And I, that’s when I really hired my first business coach because I was like, I really don’t know what I’m doing and I want to know. And what I really appreciated about having a coach was. It helped me step into my true potential. And I had the, the knowledge, passion, drive, but I didn’t know what I didn’t know. I had a blind spot and without having someone to help me see that and help hold me accountable to achieve my personal best. I probably would have been getting a job, but I was able to get past that hump.

And started to grow my business. I met a business partner and we started a marketing agency, started hiring some people. We were elevating our firm and things were working really well. And I, I again, started to notice a trend where, you know, I can, I can do work. I can manage people, but what I really like, what’s my zone of genius.

Where I always get people complimenting me is when I’m connecting with people directly really understanding what they’re trying to achieve and help empower them to get past their fears, to get past their blocks so that they can achieve their personal best. I was inspired by my coach. And over the past decade, I’ve devoted myself to learning the knowledge, the skills, the disciplines to help empower people to perform at their personal best.

So when I started my business, uh, the agency was Rock My Image. It was playing off the background in rock music. And we were initially helping people with their image and their brand. But then as, as it evolved and started to helping more holistically realize that name was a little misleading. So hence the name Growth Amplifiers.

And really trying to help people see holistically, what are the actions you need to take? What are the things you need to do to grow, to achieve your full potential? So I’m inspired, I’m driven, blessed, grateful, and I’m grateful for the, for the wins, but also for the, the challenges as well, because that has empowered me to be able to help people avoid taking the painful, scenic route.

Tim: Well, you know, it’s, it’s funny you mentioned that because there’s an old saying that success is a poor teacher, but we learn a lot when, you know, when we’re going through the struggles and we’re, we’re, we’re making the mistakes. That’s when you learn and you grow at a faster pace. And we have seen that, I have seen that, in my own practice and personal life, and I’m sure Olivia could, uh, amplify that.

Right, hon?

Olivia: Yeah, yeah, absolutely. Um, it’s funny. It’s, it’s like when, when the student is ready, the teacher will appear and you could hear something a million times, but when you’re ready to hear it and only when you’re ready to hear it after you’ve made the proper mistakes on your path, um, does it hit you and does it resonate and does it, um, inspire change and action.

Um, and it’s funny because, you know, I feel like so many people can relate to this. I mean, because no matter what life is, life is never perfect. Um, and we always, no matter how good we are, we always have room for growth and improvement and, and to work on ourselves to be better, to be our best selves and that best version of ourselves.

So I love what you do and I love, um, what you bring and how passionate you are about it.

Kenny: Well, thank you very much. You know, I was reading a book this weekend, which happened to be on coaching. Um, and it was talking about how, like, no one needs coaching. It’s like, no one needs coaching. You don’t have to have it. However… If you want to go further, faster, you might want coaching, right? It can help you.

And some of the best, most successful people have multiple coaches. So I think there’s, as there’s been a, an opening an awareness of like mental health in the past few years, people’s mental health and fitness. I think there’s also an evolution of what people understand coaching to be. It’s not for people who are struggling.

I mean, sure. People who are struggling might need. Might benefit from having a coach, but people are doing good and are already successful, can still benefit. As the top athletes, champions, and Olympians have coaches to help them get to the best version of themselves. So it’s, it’s really a shift of the minds.

And I know I, I didn’t have that mindset early on, and I’m grateful that I’ve developed it.

Tim: Yeah, you know, that’s a great point because, you know, you look at these guys that are on the PGA Tour and they don’t have one coach, right? They have a nutritional coach. They have a fitness coach. They have a swing coach. They have a short game coach. They have a putting coach. And then they have. Like a psycho-, like a, uh, what do they call it?

Like a, a Sports psychology coach. And when you hear these guys talking after they. Win a tournament or something, you know, well, you know, my, me and my team got together and we had, we made these adjustments and it’s, it’s amazing when you see the amount of success that they’ve had and think, oh, wow, that just all comes naturally.

And it doesn’t. And it’s, you know, anything that you can be good at. You can be better at with coaching and you can be better at when you focus on the things that are important to making you better at those at those skills.

Kenny: Very nicely articulated because I know you have like a. A lot of knowledge and expertise to help people see things deeper, to help like see through the matrix, because we’re busy managing so many different things from day to day. We can’t be the master of everything and even if we know things and learn things, eventually we can start getting tunnel vision in our own worlds.

We can get into our own way. We, like, wasn’t I supposed to be doing that? Oh, yes, I was.

Olivia: Yeah, absolutely. Um, another thing I was thinking about is how success leaves clues and what one person could do another person can do. And that I feel like is, um, something that a coach is so valuable for, you know, they’re able to bring experiences and knowledge. And another thing that comes to mind is, you know, most people get into business to be their own boss to make their own way to, you know, take a chance and become their own source of income. But with that, there’s not necessarily a lot of training. You know, anyone could start a business. Um, anyone could start a business, but that doesn’t mean, you know, even if you have 90 percent of the skills, you could still do better, um, for yourself, for your community, for your family, for your employees.

There’s a lot of, there’s a lot at stake when you’re a business owner.

Kenny: And there’s probably like just like selling can get a bad rap, you know, people have some people like, oh, I don’t like to be sold to I don’t like selling and I agree that bad selling is bad. If someone’s trying to connect with you and push their agenda on you to sell something for their benefit, then that is bad.

However, if someone is honestly trying to understand your challenge and help you get what you want and resolve your challenges, and they’re sharing how they can do that, which is another way of selling, it’s more like. Consultative selling, then that is what helps people. That’s what makes the world go round.

That’s a positive thing. It’s the same thing with coaching because it’s really easy to call yourself a coach. It’s, it’s not like they have licenses, uh, for coaching. They do have certifications, but they’re not all made equal, but because a lot of people can say, Oh. I’m a coach and they can go out and they don’t really don’t know what they’re doing.

Um, and they could give bad advice or they don’t know how to do powerful, transformative coaching to really help people have the self inspection, um, reflection to make sure that they’re making meaningful change. To get to where they want to go. It’s a different skill level.

It’s a different understanding of how to operate.

The reason I’m sharing this right now is because, I still hear in conversation that they’ll say, if I can afford coaching. I don’t know if I have the time for that. And in reality, it’s like, how do you not have the, um, I guess the, the time, how can you not dedicate the time or find a way to invest in yourself when it’s all about helping you be the best version of yourself, like investing-

Tim: That’s a great point.

Kenny: -investing in your self development is perhaps one of the best things you could ever do.

Cause you are you, right?

Tim: Right.

Olivia: Absolutely.

Tim: So, Kenny, what are some of the biggest mistakes you see people doing when they, when, you know, when they’re sort of like DIY or, uh, for those of you don’t know, that’s Do It Yourself.

Kenny: So when it comes to Do It Yourself and from. I’ll talk from the marketing and sales side for a moment, for a moment. So I do business coaching and my background and expertise is more in the marketing and sales arena. And a challenge a lot of businesses have is. They, they get the tunnel vision on what they’re focused on and they may, they may suffer from one of these, these ailments.

So first off, we’ve got marketing that is exploding at such a rate. We can’t keep up with all the tools, software, uh, media channels that you could possibly get involved in. Even if you’re involved in one of them, they change so rapidly. It’s hard to keep up to date with the latest trends. So hearing all these different things. People are looking for the silver bullet bouncing from one idea to a next.

They’re trying to find that easy button

And by shifting gears and bouncing all around, chasing the shiny objects, they can’t really build laser focused momentum.

That’s a mistake to avoid. You don’t need to do everything.

To get focus on what works for you and then be consistent with it.

The second thing when people are trying to. Increase their business is they have a misunderstanding of what marketing is. They think marketing is advertising. I was talking with an attorney who said, well, we don’t need to market our business. We get most of our business through word of mouth. I said, I think you have a misunderstanding what marketing is. You’re at a networking event right now, that’s marketing. Do you think it would be beneficial for your customers to know the other services that you provide? Do you think they’re utilizing your services to the full capacity? Do you think it’d be helpful to make sure that they know how you’ve served other people and to let them know how you appreciate their business?

That’s, that’s marketing.

Uh, do you think it would be helpful to share with them the other types of businesses that you would like to work with so that you can get more referrals or introductions? 

Those are all important things. It’s like, well, that’s what marketing is. It’s just, it’s not just lead generation, it’s not just new business. It’s looking at how do you provide value to those you serve? How do you ensure that they know what you do and that you appreciate them in the type of business that you would appreciate getting introduced to so that you can provide a great experience? So, and to keep it all condensed, it’s just not really looking at the, the full customer value journey from getting the marketing message to your ideal customer.

And then how to keep in contact with that, that customer to build a long lasting relationship that best serves them and provides more value to your business as well.

Tim: Nice. So, when? Do people normally engage with you or come to you? Are they looking to improve or are they sort of in crisis? In other words, Oh, my gosh, you know, my leads dried up completely. I need to do some marketing or, you know, four, four of my key employees left, you know, they went out and started their own business, you know, how do, how do you you, how do people generally onboard with you and like, are they like again, are they in crisis or are they looking to improve?

Kenny: So it’s, it’s a really good question. Um, because my people that may be looking for me aren’t necessarily my ideal customers. Uh, because more of somebody who helps people amplify good to great is more of an ideal. 

Um, people who are struggling definitely can help them out, can help them get a framework so that they can have consistent results, can help them improve some bottlenecks they may be holding them back, but ideal customers are the ones that are doing good already. And they may not even be looking for me because they, they may think we’ve already got an internal marketing person. We already have a marketing agency. We, we already have things that are working for us. And I’m looking for the people that say, you know what, I know, I don’t know what I don’t know, and I want to do the best I possibly can so I can get the best possible result. And for them, I, what I do is I do a, uh, overlook of their customer value journey. Help them look at what they’re doing now, understand what their goals are, and help them see things that they may not have seen before. Explore untapped opportunities. Explore, um, the bottlenecks that could be holding them back.

Help them see their blind spots. And then I’ll just say, hey, these are things. That if you resolve these things and put them into action, you can maximize all of the marketing and sales efforts that you’re doing right now. So if you’re looking to amplify your results and you need help doing that, or your internal team needs help doing that, or the agency you work with could use a fresh perspective. Then let’s have a conversation and we’ll find a way to amplify your business.

A lot of the times, the people that are looking for me or end up reaching out. They, um, they are the ones that are looking for some help. They’re having challenges with what they’re doing now. They’re not quite getting the result they want and they, they’ve tried working with other firms, they’ve spun their wheels. And they’re, they’re getting like, I need to find something that works, but the ideal ones are the ones that are, that are doing good and want to do great.

Olivia: So, Kenny, what does it look like working with you? Is it, um, you know, a short term, um, consultation commitment, or is it more of an ongoing, you know, week to week or month to month type situation?

Kenny: So I’ve been working with a lot more service professionals, a lot of people in the B2B advisory sort of work, they’re helping advise people, whether that’s with their finances, with tax planning, kind of like as a controller or exit planning, retirement planning, things of that nature. And one of the things I suggest to them is, is to follow how I engage.

The challenge I see a lot of them making is you’ve got to hire us and commit to a full time gig if it’s going to make any sense.

So to answer your question, I’m more like prescribed based on the situation.

So in some cases you might have, if, I’ve worked with a company that they were selling real estate lots.

So lots of land in rural communities, they had an internal marketing team. They had a sales team, they had a marketing agency, and their challenge was they, they were just having trouble connecting. It was a little bit political. Uh, they couldn’t see their own blind spots. So I told them what I did and they said, you know what, it’d be kind of helpful if you could help us, like, meet in the middle, get better aligned, so we can get better results. So for them, I facilitated a workshop where I invited everyone from the team. We worked through some exercises and over a period of time, we helped, uh, define the biggest bottlenecks that were holding them back, how to resolve them for the current time, but also for the future so that they can, um, get past those bottlenecks and move forward. Um, prior to that sales was blaming the marketing that your marketing isn’t really driving good leads and marketing was blaming sales. You guys are doing a pooey job with the follow up. Once we give you the leads and what needed to happen was they needed to have a more refined process in the middle for building up the relationship prior to passing off to sales. 

For other people. I have one of my clients that have been working with for about three, coming up on four years. And I work with him regularly. Initially understood what his business was and started helping out with his marketing system. But then in the past year, I’ve been working with this team to help get them aligned so that they can play a better role, so long story short, different results for different people. So if you, if you do serve people and like I was talking with the CFO that was trying to get more CFO clients and their offer was hire us for this term. I was like, what if they don’t do that?

Then they’re like, well, they’re not a good fit. I’m like, could you do something that, you know, maybe a strategy session that could at least help make a little progress. Like, that’s a, that might be helpful. I’m like, it would be because you’re losing business right now because there’s some people that probably really want your help.

They just have a block and they’re not ready to make that full commitment. But once they’ve worked with you a little bit and can see the transformation you could provide, they would be glad to follow you and work with you because you really do transform lives.

Olivia: Yeah.

Tim: Nice. You know, one of the things that, so the thing that we do is, this show is called Control Your Cash. And our whole focus in business is helping people and business owners find the cash flow they need. To fund their exit plan or to, you know, retain their key employees or to fund their succession plan.

And a lot of times they don’t realize that they have the money within their wherewithal. It’s just being utilized inefficiently. So everybody thinks that they’re using their money in the best way possible, right? Because you wouldn’t get up in the morning and say. You know, I want to see how much I could screw myself up financially this week, but nobody does that.

But the key is, so everything you’re doing, you think is moving you forward. Unfortunately, some things are actually holding you back. And what that leads to is maybe sometimes where cash is a little tighter than others. We have found, we had commissioned a research report and found that 61 percent of business owners around the world struggle with cashflow and 69 percent either sleep less or lose sleep due to cashflow concerns. So Kenny, if you could, share with us a time where you got sort of knocked on your butt, uh, you know, from cashflow or financially and tell us what led to that. Tell us what you were thinking as you were going through it and sort of how you got your way out of it, and what you, what you took away from that.

Kenny: So, oy, oh joy, reminiscing on struggles, but I’ll be glad to share. And it’s funny because there was a time that this situation really messed with my mind to the point where I was getting some bad anxiety over it. At the time, I was working to transition from being the director and manager of the agency to more into coaching and advising.

This is about five plus years ago. And I had a, I had two business partners. Now I have one, I did have a second one. And. That other business partner kind of had a change of heart with how they wanted to show up in the agency. It was a lady and I’m not going to point fingers. But, let’s just say we had an agreement of how things would work out and it didn’t work out that way.

So we ended up running into putting some, for the first time we ran, uh, put some bills on credit because we had her as the head communication person in our agency. When she started to pull out, we weren’t really in tune to that. 

So around the same time, she said, I’m going to run with these new prospects. We lost our biggest accounts and we had debt, and we’re like, what the heck just happened? And I was so, um, I felt so victimized in that situation because I’m like, I would never do that to someone. We had an agreement. We could have communicated things differently, people, people change, and the cash flow, because we lost our biggest accounts and the, some of the opportunities that we had weren’t there anymore.

It got hairy. So what do you do when life hands you lemons? You throw them at the people who betray you. I’m just kidding. You make lemonade. So, I, I realized that we’re not going to give up we need to find a way to proceed and so I, I created a plan to be really focused and we said, we know a lot of people, we can provide a lot of transformation.We just need to get our message to more people. 

So we’re going to host workshops and we’ve done workshops in the past, but typically it’s been like one a quarter. said, we need cash fast to turn things around quickly. And we put six workshops, six workshops on within a month’s timeframe, really get focused and said, how can we, who can we call, who are the influencers we know?

And not like online social media influencers, but like local influencers, because these were in person workshops. Um, how can we cultivate a workshop that provides a lot of value and helps people see things differently so that they can have transformation in their business? A lot of the content that we’ve put in that workshop is outlined in our book, Amplify: How to Maximize Your Profits and Claim Back Your Time.

On the five profit drivers in your business, the leads that you’re generating, the percentage of leads that you’re converting in the customers, the average number of transactions per customer, the average amount per transaction, and your profit margin.

If you can get focus on creating the systems to improve each of those five profit drivers, you can. Amplify your business. You can maximize it and take it to the next level. You can double your profitability without having to double your workload. It’s truly transformative. And so we did the workshop. We were able to find the clients we needed in the timeframe.

And the rest has been onwards and upwards since then, but to share one other takeaway so that the thing was don’t give up, but a bigger takeaway for me that I learned is has been impactful is during this, um, challenge. I was, my ego was so angry and victimized, and I felt like I’m the, I’m trying to be a business coach.

I can’t admit this out to the public. I can’t share this with other people. That was working against me. I, I was trying to be strong and plow through that. But luckily I was attending, um, some meetings with the International Coaching Federation. And I met a mindfulness practitioner, she was a coach that did a lot of mindfulness.

She was going through grad school and she asked if she could do some sessions with me for her grad school.

And I’m so grateful that I had that opportunity because what I realized was, had I not had some guidance and communicated some of those things, why I was having anxiety and stress was because I was trying to force through it versus process it and work through it.

And now, looking back, like, I’m fully transparent about it. I’m like, yes, I have mistakes. Yes, I have failed. I, I wear that as an object, um, badge of honor because it’s not failure that leads, it’s not like avoiding failure that leads to success. It’s, it’s failing again and again, and coming up with enthusiasm and drive and consistent persistence to achieve the result.

That’s how you get to success. So now I’ve, I share that with others because I know there’s a lot of people. That have failures that they’ve faced or are facing right now, and they’re fearful to share that and they don’t realize the impact that working to resolve that might have if they give themselves the grace of saying, you know what, maybe I did fail at this, maybe it did hurt me, but I’m willing to work through that now so that I can show up as the best version of myself, not for just me. But for my inner circle, for my family, for those I serve, so I could just be the best as that, that I can be. So that was a, the biggest challenge that I ever overcame. And I’m really grateful to have went through that in hindsight.

Although I wouldn’t have said that at the time.

Tim: Yeah, well, you know, well, thanks for sharing that because, you know, I, again, our biggest growth comes when we work through some problems and working through those problems isn’t a bad thing. You know? Yeah. Hey, it stinks when, when life throws crap at you or when you, when you get handed lemonades, you gotta make, I’m sorry, you get, get handed lemons, you gotta make lemonade. And uh, it’s really great to see that you have done that and more importantly that you’ve learned from it and you’re sharing that.

Kenny: I, I’m really glad and I’m advocate for being transparent and sharing those, those failures. And those lessons learned, we can get out of our egos, get out of the ego. It’s, it’s, it holds us back. It really does. We don’t even realize it’s, I didn’t even realize how much of a grip on it until going through some of that work.

But that was, that was my ego saying: Victim! Revenge! Rahhhh!

Tim: How dare she do that to us?

Kenny: Poor me.

Olivia: But hey, you came out on the other side stronger and, you know, I think, thank goodness, hindsight is 20/20. Um, and you’re able to reflect back on that and learn the lessons. But more than that is have that lesson to share with others and have that. Ability to connect with others because so many people go through the same exact thing and are afraid to talk about it so you coming forward and speaking on it and talking about it from a perspective of gratitude and coming out on the other side with more to give is really inspirational

Kenny: Thank you. And I’ll, I’ll share. That I hold no ill will to my partner. I was frustrated at that period of time, but now I’m wishing her the best. And you being grateful for that experience. Cause it, it did help me grow. It helped me step into a different level of leadership and challenged me to be a better version of myself.

So like you said, you can look at it with the right perspective.

Olivia: Yeah.

Tim: Yeah, that’s awesome. So, Kenny, share with us also, like, some, uh, what resources have been beneficial to you, whether they’re, you know, books or authors or websites or technology tools? What, what, what, what are you finding that’s, that’s worked for you in the past?

Kenny: So I’m a certified DigitalMarketer, uh, trainer and advisor. DigitalMarketer is a company based out of Austin, Texas. They help put on one of the biggest conferences on marketing called traffic and conversion and their concept of the customer value journey, which I alluded to earlier and really focusing on optimizing your customer value journey, looking at the different stages of the relationship that you have. With your potential customers and guiding them from one stage to the next. You can craft a process to get your message in front of your ideal customers and seamlessly and subtly guide them to become customers that pay, stay, and refer. You can avoid doing a lot of excess work, spending a lot of time creating content, a lot of time doing busy work and just work on the 20 percent of the efforts that give you 80 percent of the results.

By honing in, looking at that and fine tuning it. It’s like building an engine versus trying to be the master of plethora of different marketing trends and sales techniques and all that jazz. Just build good relationships and optimize the process that does that, the systems that does that. Uh, so that’s, that’s one is the customer value journey optimization from DigitalMarketer.

Um, a book that I, I really like, um, is Positive Intelligence. So this is a book on how to develop mental fitness. So, inspired by some of the challenges that I went through and also working with other business advisors who were running into their own mental blocks. I didn’t have a framework to help them through that, but Positive Intelligence is a framework to help people strengthen their mental fitness so that they could reduce their saboteur self, sabotaging thoughts and habits and step in to their better version of themselves more often. So I went through that program and got certified through Positive Intelligence as well.

Uh, it’s a great book and what I really like about it is it takes a really complicated process that I’ve studied in the past about mindfulness, about habits, about thinking, personal development, and makes it to a easy to understand process that you could share so easy that even my kids understand the concepts and have been implementing them into their development.

Olivia: That’s pretty cool

Tim: Nice, thank you for sharing that. Kenny, how could people, uh, get in touch with you? What’s the best way?

Kenny: So my website is growthamplifiers.com. And if they went to. Growthamplifiers.com/success. Um, we’ve got a free download of our book, um, we’ll have our assessment that you can take on there. If you have business and you’re looking to perhaps see some of the blind spots that you may have, get some direction on which areas you can improve upon to maximize your results.

You can take our free assessment, you get a checklist. And you can also find me on LinkedIn, Kenny Harper, or YouTube, Kenny Harper. And I will share that, approach to building relationships, business relationships. It’s not to try to sell anything to anyone. So if you do go to our website, growthamplifiers.com/success, and you opted into one of our assets, we’re not going to try to sell you things. We’re simply going to share resources. And if you want our help, then we’ll be there to help you out.

Olivia: We appreciate that Kenny.

Tim: Very nice.

Olivia: And thank you so much for joining us today. I know that you brought a lot of value for our listeners and a lot of value to your clients based on what you’ve shared with us today, um, your positive light. And we greatly appreciate you spending time with us here today.

Kenny: Thank you so much. I appreciate the opportunity to be here.

Olivia: Absolutely.

Tim: Well, Kenny Harper, thank you very much, and, uh, we look forward to having our growth amplified.

Kenny: Yes!

Olivia: Welcome to the Control Your Cash Podcast, where we talk to business owners about how to regain control of their cash flow. Today, we have Tom Brainsky with us from ProfitMax.

Welcome, Tom. 

Thomas: Hello. Thank you.

Olivia: So, Tom, tell us a little bit about your journey and we thank you so much for joining us today. And, um, I know that you’re going to provide our listeners with a ton of valuable content.

Thomas: Well, absolutely. I intend to do that. And thank you so much for having me. Um, as far as my journey goes, uh, I am a through and through entrepreneur. Um, not one of the greatest students that ever existed in the history of high school, uh, but, uh, ended up, uh, flailing almost out of high school, managed to.

Passed by the skin of my teeth, um, got into the working world and realized that that was actually more where I belonged. I did a series of crazy jobs in my life and then, uh, ended up taking to aviation. I had fan, I still maintain a fantastic career, uh, within, uh, aviation. I still own a company that provides really awesome, unique, niche services to airlines that do charter flights that led to, um.

Uh, me entering the dental field because those two don’t go together whatsoever. Uh, but when your clients are airlines and you know, they owe you $60,000-100,000 and you wake up on a Friday morning and go to the toilet and grab your phone as most of us do, uh, and then you look and you go, Oh, look at that. Oh, another one went bankrupt.

So there goes that money. You’re not going to get. And then subsequently you’ll get sued for something called preferential payments, which is awesome, by the way. So I’ve really mastered, um, dealing with those types of lawsuits. I don’t need attorneys anymore. I just call opposing counsel, make a deal, and I make those go away.

Uh, but, uh, that kind of led me into dental because it was something that wasn’t aviation. I thought, you know, maybe I’ll, uh, buy a dental laboratory. Um, it’s available. It’s nearby. It’s something, uh, you know, different basket, different eggs kind of thing. Very difficult business by the way. Uh, and, and, and that one ended up, uh, opening up an opportunity where, uh, recently, um, I was able to get my, my ERTC and we’ll go into that a little bit later in the call.

Uh, and, and with that, I met my partner now in ProfitMax. So that is another venture that I’m in now. And, uh, and she convinced me to, to join her and we’ll be kind of focusing on that today because that one really lines up with, uh, you know, what you guys do. So, um. Uh, ProfitMax is, uh. It provides accounting, tax, uh, tax guidance, tax strategies, ERC submission, or, you know, research and development tax credits, things like that, that can just make a world of a difference for business owners.

And so, so there’s the fit, and that’s how we came to where we are today.

Tim: That’s quite a, quite a journey, Tom, and I’m sure it comes with many scars and bruises along the way.

Thomas: Uh, Yes, yes, plenty of that. Lots of really hard lessons learned and in multiple sectors. Um, and, uh, I think if there was one word that could be used to describe me, it would probably be resilient. I’m just unwilling to stay down because I’ve had plenty of body shots that have, that really should have knocked me out, but I just, I don’t know, maybe I’m stupid, I just keep getting back up.

Tim: Well, you know, um, that’s an interesting point because most successful business owners, entrepreneurs, it, you know, it’s not all unicorn and rainbows. 

Thomas: It’s never unicorns and rainbows.

Tim: Yeah, so there and I think the struggles along the way and those times where we get knocked down are the times of great growth and. So if you could share with us maybe one of those times where you really got knocked down, what were you feeling?

How did you get through it? And what, what was your biggest takeaway?

Thomas: Well, uh, I probably have one of the most unique knockdown, knockout, dragout stories that exist. Um, There was, uh, this actually happened, I think, uh, last summer, summer ago, I think, maybe, I can’t remember, it’s all a blur, but, uh, running a dental laboratory, I have, uh, I have employees, technicians, equipment, you know, it’s a, it’s a, it’s a brick and mortar business, and, um, I was, uh, taking my wife’s car to, uh, get fixed because, uh, her door handle was broken, so I took the car to, you know, the dealer on an average, you know, mundane Tuesday or Wednesday morning, I forget, and, uh, I was in the shuttle coming back from the dealer, and I received a phone call from someone who worked for me.

It was my HR manager, and she was very upset at me. I can’t even to this day tell you exactly why, but something really torqued her up bad, and she was screaming at me, and I’m like, whoa, whoa, whoa, calm down. I, I almost felt bad for the guy next to me who’s driving because I, I just couldn’t figure out what was going on and she’s yelling at me that I don’t have a company anymore and when I got to work, she basically had fired my whole company, told them all that the company was sold, uh, that the company didn’t exist anymore and no one had jobs anymore, go home, good luck, and of course they would take that from HR as being legit.

Of course, if I sold the company, somebody better tell me, did I get a good deal and who bought it? When was the closing? None of this I knew. And, and so I literally had no company after years of trying to build this thing. And it was just gone, you know, instantly. And, and I had to kind of put it all together.

So there was a few people I was able to salvage that day. And, uh, one of them was this great kid. I had hired this homeless kid a couple of weeks before and gave him a job. And he was really starting to excel and appreciate, you know, what he was doing. And he stuck around with me and I taught him how to do customer service because we immediately had to figure out how to service our customers.

Um, And then, uh, you know, while I had him trying to let the customers know that we wouldn’t be picking up or delivering that day, because. Well, we had no staff because our person just let everyone go, which is insane. Thank God. We had tremendous support from our clients. They were very understanding. They were like, my God, I can’t believe anything like that happened.

Either can I, but it did. Um, and, uh, and, and so the rest of the day, it was just a matter of trying to take stock, figure out, you know, fire by fire, what, what do I have to do to bring this thing back online? How do I make this function again? How do I get the employees back? And so I was able to at least get everyone to agree to come in the next day and have a little town hall meeting, a heart to heart.

And, um, and, and through that experience, I’ve been able to, uh, learn and grow with transparency, unlike most business owners have ever experienced. Uh, there was a trust that was broken. I didn’t even do it, but it was broken. And so, uh, you know, it’s, tears were shed on both sides. And how do we put this thing back together?

And, and we were actually able to create a very cohesive team, uh, almost in, in moonshot fashion, uh, and be closer and stronger than we ever were before. And so, uh, if you want to talk about a challenge, having a business just disappear on you, and one day and having to put it all back together, the next. I.

I can’t think of anything worse in my life. And I mean, I’ve, I’ve had some really unusual experiences. I, I’ve had, I’ve had a, a Minister of Oil in the, in, in Kuwait, personally threatened to put me in jail through circumstances that I did not create. Um, I’ve been, you know, I’ve had, uh, French, no, I’ve had, uh, Mexican Federales hold me at gunpoint.

I’ve had guns. Uh, I’ve had, uh, been escorted out at, uh, gunpoint in, in Jordan during, you know, major combat operations during one of the wars. Uh, it’s, I’ve had some pretty bad days. Yeah, but none of them compared to that.

Tim: Wow. 

So what were you feeling? Like what, you know, I, I, I can, I can think of several emotions, but What were you feeling when you were going through all that crap?

Thomas: Um, well, first of all, uh, one of the managers that, that worked for me was very, very upset. And so again, I do feel bad for the dude that dropped me off. Uh, the guy was coming at me and like a raging bull and there were employees that were holding him back. And I don’t know whether it was the normalcy bias or not, but I literally was like, no, no, no, you don’t understand.

We’re going towards him as he’s wanting to kill me. Uh, you know, you don’t understand it, you know, and trying to argue with him and eventually employees like just go in the building, go to it because they couldn’t really hold it back. And he ended up calming down. Thank goodness. And he’s just a godsend to have on staff to this day. Um, but you know, so so there was that there was this this, you know as far as emotions go you, you, you have confusion. Um, you know, and and then you have fear. I mean, there’s this tremendous fear of everything that i’ve, i’ve put into this is gone. Do I have to sell everything? You know the unknown so you’ve got the fear, the anxiety, the stomach is in knots.

I mean, you want to talk about not sleeping that night. I there’s never been a night where I’ve been that wound up and unable to, to, to sleep because you just have that much stress on you, because you don’t know if you’re actually going to even have a company by the time you come back, no one had agreed to stay working with me.

They just agreed to talk to me. And so there was just so much unknown. And, and so working through the fire like that, while still trying to service the clients and do what I could to patch up. As much as I could to salvage what could be salvaged until this thing could be brought back online. Uh, just, in a word, Tim, insane levels of stress.

Tim: Yeah, I can imagine. Well, it’s a testament to your resilience that you’re able to get, you know, to obviously get through that and, and get through it, uh, not only successfully, but to, you know, to certainly to thrive. So, um, tell us a little bit about ProfitMax.

Thomas: So, ProfitMax, uh, I joined ProfitMax, um, sort of unexpectedly. Uh, I did not, I didn’t have any aspirations, uh, to, to jump into the… Tax field. Um, it’s never been in my wheelhouse, but, uh, I had met my partner Stacy, uh, at a, at a, um, a business convention. And, um, you know, she and I, I guess both wanted a good seat.

So we were like first people downstairs. Uh, and I mean, Tim, you know, Stacy, so you could probably actually imagine. That being true. Uh, and, and so I met this woman and you know, what do you do? What do you do kind of thing? And she tells me, Oh, you know, I help people their ERC. I’m like, I have no idea what that is.

She goes, Oh, you know, it’s this thing and it’s from the CARES Act and you know, you’re probably qualify. You’d probably get money back. How many employees do you have? So she’s asked me questions and you know, I said, well, I’ll have to check with my CPA. So, you know, at a break I run upstairs, I go to the bathroom because I mean, it’ what you gotta do, uh, and, and, and then I, I check with the CPA and my CPA is like, ah, yeah, you know, I don’t think you’re going to qualify.

You know, you make money during COVID. It’s, you know, so I went back downstairs. I said, Hey, you know, I ran into her. I’m like, Hey, by the way, you know, my CPA said, no, you know, you’re, uh, you’re not going to qualify. She goes, okay, why don’t you just. After the show, hook up with me, we’ll talk, you know, schedule time Tuesday, uh, and, uh, and, and, and we’ll see if you actually qualify.

So, she sent me a link, we filled out everything on the link, and, uh, oh look at that! Uh, we qualified! For over six figures. My CPA could have screwed me out of six figures. I mean, you wanna talk about something that really bothers you? That really bothered me, because they were so nonchalant about it. And so that, that’s, that shot up a red flag.

A long story short is, uh, I did process my ERC, uh, through, uh, her company ProfitMax and, um, got everything back. Everything’s wonderful. I couldn’t imagine this having no knowledge of this before I met her and and I, I pushed her so hard. I said, you know what, you’ve, you’ve been so helpful to me. Let me help you.

I am deadly at trade shows. I mean, I can sell anything to, you know, to anyone on the floor of a trade show. Absolutely deadly. And, and I said, there’s this trade show. It’s a dental thing. It’s dental technology. I realize it’s probably doesn’t make sense if I, you know didn’t know about this. I guarantee there’s hundreds if not thousands of people that don’t know about this.

Just go, I’m gonna be at the show anyway. I’ll stand at your booth. I’ll help you out a little bit, you know, while I’m doing my business there. And, and so I really forced her hand and, and of course she saw me in action. Good. And, uh, and, and so, uh, her husband and I, uh, lemme, sorry, her husband, uh, and her sat me down at dinner one night and they’re like, um, You need to get into this.

This is, this is definitely something you can do. Um, and your ability to, to connect with people and help people is unbelievable. I mean, they were just very complimentary of it and was like can I at least make some money doing this? You know? Yes. Okay, great. And so that’s kind of how this started. And, and I really got involved with her and, and got to see what the company does and, and how they help people.

And I mean, I have to tell you, you know, I do it a little bit differently just because I, I do love helping people to me. My, one of the biggest motivating things is to have someone just fill out the survey. And I love to get on a zoom call with them instead of just send them an email and say, Oh, Hey, by the way, you know, you qualified.

I got the email, you know, uh, but, uh, I, I love to just get on a call and face to face and say, listen, you just qualified for $250,000. I had one where I was so excited. I said, listen, you just qualified for $1.2 million and to see their faces. And, and to see what that can do for a business owner. And I mean, you want to talk about impact. Tim, what would you do with 1.2 million dollars? Just think about it. That’s impact.

Tim: It would definitely improve my golf swing.

Thomas: I mean, Olivia, what would your dad, what would your dad be like if all of a sudden he qualifies for this and about six to eight weeks later these checks start rolling in? Man’s happy, isn’t he?

Olivia: Yeah, yeah, because I, I mean, I always say this, um, I would argue that most of life’s frustrations come from not having access to money when you really need it. And then number 2, I would say is paying more in taxes than you need to.

Thomas: Oh, my gosh. And I mean that you want to talk about a lesson learned. That was a huge lesson learned. So not only did I fire my CPAs, but now I also moved all of my accounting over to the firm that I now work with. Uh, and we’re partnered with an organization called Lifetime Advisors. But, you know, they do a lot of heavy lifting for us.

Um, but, uh, Having now learned and seen what this does, first of all, I can say most small businesses out there that have between say five and maybe 20 employees, you know, some of the, I would say the average that we see as far as people recovering their ERCs is around $250,000, you know, for a small business, that is no joke, you know, for mom and pop shops have been working really hard and they’ve got their employees and they, they toil away in their business.

They’ve been working and they don’t know. And the accountants aren’t doing it because the accountants, they do what they do really well. They look backwards, they do taxes, they try and find deductions. The deductions they’re comfortable with, that are quick and dirty and easy because they’ve got thousands of things to file.

And I’m not trying to knock the CPAs, but that’s sort of the lane that they live in. And so when clients will go to them and say, you know, Hey, tell me about this or tell me about research and development tax credits. Yeah, they don’t really want to do it. So it just becomes this discouraged thing. It’s too much work or they’re not really good at it.

You know, conversely, you’ve got these pop ups now with this ERC thing, it’s crazy. And I guarantee all of your listeners have been receiving phone calls left and right, over and over, did you know that your employees and you’re eligible for blah, blah, blah, blah. Are, are they like accounting firms? Do they, do they do strategic tax, strategic tax planning?

No. So all they do is they’ve really gotten into their, let us just do this for you, we’re going to submit this for you, and we’re going to make money doing this. So they’re going to make their money doing that. But the problem with that is, What if they do it wrong? Or what if it does create an audit? Are they going to defend you during an audit?

Well, the answer to that is no. Or if they do, do you really want someone who’s just a pop up defending you on an audit? Probably not. So that’s why I really liked what Stacey had going, because you will have audit protection. So, anything that our organization does, they’re going to make sure it’s absolutely right and conservative and not go for the moon crazy because they don’t want to trigger audits either.

And if there are, then they’re going to sit in that first chair. And so there’s, there’s a lot of reasons why it makes a lot of sense. And to me, I really wanted to get in on that. And once I got in and started getting my feet wet and realizing what we could do, then it was fun to get on calls with, with clients who didn’t qualify for ERC.

They didn’t have enough employees. Maybe they weren’t in business at that time. Uh, but then it’s like, you can help them with your taxes. And it’s like, Oh wow, this is really fun. You know, just like me, it’s like you could help erase people’s tax bill. I mean, you know, you can, you can increase profits a few different ways.

You could either sell more, so sell more products, right? Uh, you can cut your expenses. Or you could pay no taxes. That’s about the three ways that you could really increase your profits. And, and to be part of that and helping business owners do that, the, the, the biggest stumbling block that I see is that most small businesses have no fricking clue because they do their thing.

They’re busy, their heads, their knee deep, you know, their, their, their, their heads are in the weeds. They’re knee deep in it. They’ve got to worry about their vehicle maintenance. They’ve got to worry about maybe their employees and their medicals. And they got to worry about, are we, you know, making enough money?

You know, how are we doing on sales? Do we need to cut the cost? All these things that you think about as a business owner day in and day out. When somebody talks to him about taxes, no, no, no, I got a CPA. I’m good. Are you though? Are you really? Because I guarantee all of them would say yes. Uh, uh. They’re really not.

It’s not something they really know about. And so, unless the right questions get asked, unless it really gets pointed out, they’re going to miss it. And they’re going to miss out on a lot. You know, I’ll give you an example. Um, dentists. Here’s something I know about, right? I own a dental laboratory. Dental laboratories and dentists, all of them, almost all, qualify for a research and development tax credit. That they can get every year somewhere between say maybe, you know, $8,000 and $30,000 a year alone, just that one thing CPAs don’t want to touch it. They don’t want to touch it because it’s too hard. It takes too much time. They do not have the time. They’ve got thousands of, you know, hundreds, if not thousands of filings.

They’ve got to do extensions. They got to do then additional filings. They’ve got to do, they’ve got to go what gets them their bread and butter. So this is what we do. We, we focus on the areas that are different. They can help people in ways that most CPAs can’t, and I mean, you know, it’s like, yeah, look at it this way, right?

So CPAs, they got a rear view mirror. They look in the rear mirror. What did you do? How can we help you with what you did? A strategist looks forward through the windshield. What are you going to do in the next three to five years? Are you going to have any events that trigger, you know, large taxable hits?

Okay, what can we do to mitigate those? And all the strategies that are done can then be shared with those CPAs. Now, we have our own CPAs on staff, if people want to work with us, that’s fine, but they don’t have to. But at least by, by, by thinking ahead and working that direction, you can really lower your tax bill.

And I’m telling you, I’m a small business owner. I’ve been operating as a small business owner in different sectors for 20 plus, 25, 25 years. Didn’t know, no idea. Had different accountants. No idea

Tim: I read a study that said 72 percent of people think that taxes are too high, but 93 percent of people overpay in their taxes.

Thomas: That is actually correct. 93% overpaying their taxes, and of that 93% they’re actually overpaying somewhere between 34 and 71%, which I mean, hello? That basically, I mean, what that boils down to guys is that that means that there is a 7% chance that your taxes are spot on.

Olivia: Those are pretty low odds.

Thomas: It’s, it’s, it’s astonishingly low, but for all the reasons I’ve outlined, it all makes sense. I mean, I just learned today that, uh, there are hundreds of thousands of CPAs that are retiring who are not being replaced. So if you think about it this way, uh, if all of these CPAs start retiring and there’s not enough to replace them, that means the CPAs that do exist are only going to get busier, meaning that they will have even less time to devote to really trying to maximize the amount that you can save in taxes.

It’s only getting worse.

Olivia: Tom, you seem really passionate about helping people save on these taxes. Tell us a little bit about for the listeners who may not know or may not have gotten one of those pop ups on the phone, what the ERC is and, and what a good candidate would look like to qualify.

Thomas: Well, let me predicate this by saying that even though I’ve qualified for it, I got mine. Hallelujah. Thrilled. ERC is one of the stupidest creations the government has ever done. I mean, it really is. Um, thrilled to have it. It’s wonderful. But, uh, it, it is essentially, uh, during the CARES Act, uh, ERC was established, or ERTC, Employee Retention Tax Credit.

And it was basically done, uh, during COVID to encourage businesses to keep their employees, right? And… So initially you could, you had to have less than 100 employees. I mean, they had all these restrictions and nobody was taking advantage of it. So 2001 rolls around and, and Congress and the president revise it and open up the

Tim: 2021, Tom?

Thomas: What’s that?

Tim: You said 2001, you meant 2021. 

Thomas: I’m sorry 2021, uh, they, they revise the law. Which basically now says that you could have, you know, uh, up to 500 employees and you don’t just simply have to show a loss. You could show a loss, but you know, show, show how you were affected during COVID. And this is kind of where a lot of the CPAs will just take the quick and easy and say, well, you know, I’ll work with you client or you client because you did have a loss, but they don’t want to actually do the heavier labor of showing, you know, well, if you didn’t have a loss, how were you affected?

You know, did you have to, put up ridiculous pieces of plastic or redo your ventilation system or have to buy, you know, this or that, you know, um, was it impossible to find employees? Uh, so anyway, this program was put in place and it is not actually based on the, uh, on the actual physical numbers of your payroll.

It is a payroll. It’s a payroll tax refund, but it’s not actually based on your payroll. This is what I mean. It’s ridiculous. And so you have three quarters in 2000, which, you know, any W-2 full time employee, uh, would be, uh, you know, worth $5,000 or up to $5,000. And then for the three quarters in 2021, those same employees could be worth, you know, $26,000. Where do they come up with these numbers? I, I don’t know. I mean, it’s, that’s government at work right there. However, it exists. It does expire. This will not last forever. And so that’s why, you know, everyone’s phones are just being blown up, you know, with every pop up that there is going, hey, you know, we could submit this for you, you know, and, and, you know, that’s just, just be careful, you know.

You want to you want to go with a firm that’s that’s very reputable, been around for a long time. At least our firm’s done well over $1.3 billion in recoveries with zero instances so far of any audits and, you know, zero instances where mistakes were made. As a matter of fact, some of our clients, um, we, we, we did it.

We actually, we did have one where, where an audit, um, a letter was sent from the IRS and the IRS had screwed up and they had to own up to their own screw up. And, and there was an audit that took place that actually found money that the CPA, uh, screwed up and the CPA got it wrong. So we had to run cleanup on that.

Um, so it’s um, It’s an unusual program. It does expire and I encourage all of your uh, listeners and viewers if you have not looked into it. Now would be a really good time to do it. Um, even through our website and I’ll make sure that I give you guys the link. Sign up the link. Just go to go to the link.

Put your information in it’s free and we’ll tell you what you could expect to get back. And it’s a rough estimate. I mean, you know, we’ll give you that. And if you want to move forward, then get all your documentation against get your real estimate. But it’s going to be pretty close. And I’ll give that to you.

So that way, you know, any of your viewers and listeners can at least go in and just get a free estimate and find out. You have nothing to lose, except if you A, take no action, at which point you could possibly be like me and almost lose hundreds of thousands of dollars because your CPA is not telling you what to do. I’m not bitter.

Olivia: Oh,

Thomas: I’m smiling.

Tim: Tell us about, uh, you mentioned, uh, research and development, the R& D credit. Tell us a little bit about that.

Thomas: So that was something that, uh, started back in, uh, 1981. It’s been revised several times throughout the years to make it easier. It’s basically the government trying to, uh, help support small businesses. Uh, and, and, and, you know, usher in research and development. Uh, if you were trying to get it in 1981, very similar to ERC, most wouldn’t qualify, too difficult to get.

And I mean, they don’t make it super, super simple, but it’s also not the most complicated thing in the world either. And believe it or not, most businesses that actually work on process improvements or work with technology and they implement this or that to, to make their businesses better, smarter, faster.

There’s a pretty good possibility that they would qualify and it’s an annual tax credit. So as long as they keep continue working on their business and doing improvements towards their businesses. They’re probably gonna qualify. I’ll give you an example. Let’s talk about a dentist or a dental laboratory again, my wheelhouse, you know if a dentist gets one of those like intraoral scanners So instead of taking, you know physical impressions that make people want to choke to death and they put the little wand in your mouth to you know Well, that’s something that they’re doing They get it, they’ve got to test it, learn how to use it, put it in the park, they’re probably going to qualify.

Uh, you know, 3D printing is now a thing, or, you know, chair side milling is now a thing. And so there’s all these things that are out there for many businesses where people use technology, they bring in new equipment, they have to learn how to use it. And there’s time that goes into that. And then there’s testing and tuning and, you know, losses of products and materials because you’ve wasted it as you’re trying to get better at it.

And, and that’s what this, this, uh, this law is out there for this deduction, uh, is for a tax credit, I guess is for, is for that. And so that’s something that can be applied for every single year. And no, most CPAs do not want to touch it. It’s a lot more work. It’s not that it’s hard work, but it’s just simply.

More work.

Tim: Interesting. You know, it’s, it’s funny because one of the areas that we identify for people. So we, we view things through the lens of, are you in control of your money or is somebody else in control of your money? Cause whoever controls your cashflow controls your life. And we identify five areas where people are.

Unknowingly and unnecessarily giving up control of their money. And one of them is taxes. And, you know, having stated that, I was totally unaware of this Research and Development Tax Credit. So that’s certainly something that I think, you know, you and I could talk about areas of collaboration where we could help our clients, if they’re eligible for this credit, too. You know, apply for it and qualify for

Thomas: Why not? What do they have to lose?

Olivia: Absolutely. And Tom, just for clarification, um, the difference, what’s the difference between a tax credit and a tax deduction?

Thomas: Uh, deductions would be, you know, you, you bought a, you bought a house, you got interest, you’re gonna deduct, you know, your interest on the house. You know, a credit is, I’ve done these tasks, we’re gonna send you a check.

Olivia: It’s a dollar for dollar reduction in the tax bill, correct?

Thomas: Yeah you know, like if you look at the ERTC, uh, program, uh, there are six quarters that you could qualify and you will receive six different checks from the government. This is, comes to you in the form of a check and you cash the check. You feel like adding a, you know, garage to your house. You have the garage.

You want to buy a car, buy a car. You want to throw it into a life insurance policy and throw it into a life insurance policy. Um, you know, it is. Cash money to you versus just less that you have to pay.

Olivia: Absolutely. Well, that’s a huge value, especially for, for business owners, because I know, um, certainly speaking with business owners, they’re always looking for ways to save on their taxes and to optimize their taxes and, you know, ultimately make the machine of the business run as smoothly as possible.

And. Looking at different strategies to do that is certainly very valuable. So we appreciate you speaking about that. Um, and the different ways that, that we’re able to, to do that. And, um, that ProfitMax brings that to the clients.

Thomas: Well, you know, I appreciate the opportunity to talk about it. And, you know, I do want to mention one other thing that I think is, is very important. Uh, this is something that would normally come up with, uh, a ProfitMax based conversation, depending on the direction that the client wants to go, which is just asking.

Asking a business owner, what are their goals? You know, if a business owner’s goal is to work in their business all the time and, you know, be there, be their own janitor, be their own lawnmower, be, be one who just works in the business all the time, uh, that’s, that’s one thing. But a lot of business owners get into business cause they, they like the idea that they’ll have freedom. Yeah, how many business owners out there really feel that right or they like the idea of not having to think about payroll, how are we going to make payroll or how are we going to make it manage that cash flow to where I don’t have to think about it that much. And so, you know, we also have programs in place that can actually help business owners if their goal is to actually enjoy and have a good time. With their business yet still have that business, not as a job, but as an asset, asset that makes the money. You know, we, we, uh, we invest, right? So, you know, I invest in stock, right? So you invest in Apple. I like Apple. Um, you know, I’ve invested in Amazon. I don’t work for Apple. I don’t work for Amazon.

Yet that is an asset that makes me money. You can look at a business and do the same thing. But most business owners can’t even do that because they’re too deep in the weeds. So if they have certain goals, if they want to be free, then we actually can also help them and guide them to actually scale their business up, to grow that business into something, to become that asset, to give them the freedom.

Maybe at some point they even have a CEO. And so they could actually manage and run their business from the beach. These are things that are absolutely possible for a lot of businesses if they would take the time to go, You know what, I need to take a step back from my day to day, what I normally do, and have a conversation.

And so we’re more than willing to have those conversations as well.

Tim: Right, so most business owners are so busy working in their business, they don’t have any time to work on their business.

Thomas: And when they’re working on their business, Tim, chances are they’re working on their next marketing plan or campaign or their social media posting, which, by the way, is still technically working in your business if you think about it that way, but to take it and just kind of open up that that window a little bit more and look at it from a different You know, vantage point, a lot of things that you’re doing to work on your business might still actually be working in your business.

So you go back a little bit further and you go, okay, well, you know, what if I could replace myself and this thing still makes plenty of money. And then, you know, a few years later, if that’s my plan to sell in three, five, six, 10 years later, maybe I can get this thing into like private equity, you know, and get, you know, seven times normalized, you know, EBITDA or five times normalized EBITDA.

Well, you’re not going to get that unless you’re really well structured. And that’s something that doesn’t just come with most companies. It comes with people who can come in there and actually help the company structure for that to actually happen.

Tim: Right.

Olivia: Absolutely. Yeah, that makes a lot of sense, especially because there are so many business owners looking to retire and get out of their business. But how do you make sure that asset doesn’t dwindle when you leave, when you walk out that door? And that’s something that I know a lot of family business owners and small business owners struggle with.

Thomas: How do you maximize the asset before you sell it? Many

Olivia: Yeah to get the most out of it.

Thomas: Right. Many business owners do not think in those terms they should. But they don’t. Because they’re too busy with their head down.

Tim: Right.

Thomas: I mean, I’m guilty of it. I’ve been that guy. I’ve made plenty of mistakes. I’m professional when it comes to that. But we all are.

And it’s just a matter of, you know, once the scales come off the eyes. And you can’t unsee something. What do you do with that?

Olivia: It doesn’t matter how you start. It matters how you finish, Tom.

Thomas: Correct.

Tim: Well, Tom, it’s been a pleasure having you here. Um, how can our, our listeners get in touch with you if they’re interested in, in, uh, talking with you?

Thomas: I am so glad you asked. Uh, you can certainly find us at www.profitmax.co. That’s www.profitmax.co profitmax.co. And uh, also, like I said, I’m gonna give you guys a link and if you just wanna put it with the, uh, show information, uh, it will be a link to the survey for, uh, ERC and I’ll probably also give you a link just to get in contact with me directly.

And feel free to reach out. I’m free to talk to. Your life can change. Big numbers can roll in. Massive numbers that you never expected could end up in your bank account in the next three to six months. All you have to do is just pick up the phone. The phone is not that heavy. It really isn’t. Or, or, or click the mouse.

It’s, it’s not, it’s not heavy. And see what can happen. You won’t know until you look.

Tim: Yeah, it’s certainly worth a phone call, right?

Thomas: Doesn’t hurt. I’m a nice guy. Look at me. I’m smiling.

Olivia: We could attest to that, Thomas. We appreciate you so much. And if anyone wants to get in contact with Tom, please do so. We have links in the show notes and, um, you could certainly reach him at profitmax.co. So thank you so much, Tom.

Thomas: Thank you guys so much. It’s been a pleasure.

Tim: Thanks, Tom.

Thomas: You bet.