Green Profit Academy Pros Podcast

What is Profit First and how it helps businesses grow and manage their cash

March 27, 2023 Christeen Era & Steve Bousquet Season 1 Episode 2
Green Profit Academy Pros Podcast
What is Profit First and how it helps businesses grow and manage their cash
Show Notes Transcript

In this episode Christeen and Steve explain the methodologies of Profit First. They dive into what Profit First is and how it helps businesses grow and manage their cash flow!

For a Free Instant Assessment and Profitability Tools: https://profitfirstforlawncareandlandscape.com/instant-assessment/

The Green Profit Academy Pros Podcast digs into the challenges in growing a Lawn Care and Landscape business while maximizing your profit. Christeen Era, and Steve Bousquet. are green industry experts in profit, growth, and leadership.

steven_bousquet:
One. Hello and welcome to today's podcast. In today's episode, we're going to discuss profit first. We're going to dive into what profit first is and how it helps businesses grow and manage their cash flow. We do have a special giveaway offer, so be sure to listen all the way through to the end to get the details. So Christine, hello, how are you?

christeen_era:
I'm great, how are you doing today?

steven_bousquet:
I am excellent, I'm excited to be talking about Profit First and what it is and how it can help businesses. I know it's helped my business tremendously since I've been implementing it and really letting it develop. It took me a little bit of time to get it fully implemented, which is what it's supposed to take. It's not immediate. It's not an instant pill that we take and it cures everything. There's a process to it, but now that I'm working through the process, I really have benefits with it. So Christine, you are a profit first professional mastery level. You have been practicing in implementing profit first for years now. You

christeen_era:
Mm-hmm.

steven_bousquet:
know how we met was you know we met through a coaching program but then I hired you as my profit first professional and you really helped my business fully implement profit first and then the advanced profit first methods. So tell us what profit first is.

christeen_era:
Yeah, so we'll dive into the methods and the principles about it. So it is a cash management system. So it helps, it's a behavioral cash management system. So it's just not a system that you implement in your business that's going to help you, manage your cash, it's gonna help you manage your behavior with your cash. Because it's real easy as humans to fall into old habits, go the short route, so do what's easy. you know, when things get hard and then we're managing our cash in our business reactively versus being proactive about it. And that's no way to run a business. It's, you know, that's going to get you nowhere real fast and create lots of stress on the process. So,

steven_bousquet:
Absolutely, yeah. Lots of stress in business. There's lots of stress already in business. Why make it around our cash too?

christeen_era:
Right. Yeah, and it's based off of kind of the old envelope system. You know, if anybody's familiar with that to where you're intentional about dividing up your cash for certain uses. So we have, you know, the old way of thinking, you know, to where we believe in things that our parents teach us or, you know, our family has taught us and we can default back to that really easily. So One of the old ways of thinking in business is sells minus expenses equals profit. That's very challenging because as you know Steve, you ran your business like that and you use everything that's there. So if you have $20,000, $30,000 of revenue coming in a month, all of that money is going to be used and probably plus some.

steven_bousquet:
Yeah, it's always the money comes in, the sales minus the expenses, which if I'm not super strategic about it, expenses can expand, they can, we need things and we start buying stuff. And so the profit ends up being what is left over by chance and not by design. So there's not a lot of strategy in that profit. And so absolutely, it is, businesses can be that cash eating monster.

christeen_era:
Yeah, and in a lot of cases, when you run your business off of that methodology, you have no profit. You end up with a negative profit and then what's left for you? There's nothing left for you in the business and it can even impact the business to where the business is not paying you as the owner. And you as the owner is the most important employee. You should be making a healthy living off of your business. Not using your business as an ATM machine. but making sure that you're taking home a nice, healthy paycheck that's gonna support your lifestyle and your family.

steven_bousquet:
Right, and when you say lifestyle, you know, we're talking about lifestyle congruencies. So it's really about, you know, what is the lifestyle that we want to live and what's the income that supports that? Because being a business is really hard. And if you're going to go through that hardship of owning a business, you know, you're taking the risk, you're putting your money online, you're working,

christeen_era:
the

steven_bousquet:
you know, could be seven days a week, six days a week, 10, 14 hours a day. You know, for doing that, you need to make sure that you're getting paid the correct amount and you're taking it in the frequency that should be, you know, I've skipped paychecks, you know, I've gone for months on times back in the old days thinking that I was doing the best thing for the business. But really, I needed to raise my prices so I could pay myself. So it seemed like the best thing for the business was really detrimental for the business. It was detrimental for my lifestyle congruency, which meant my family. So making

christeen_era:
right.

steven_bousquet:
sure that I was getting paid on the right, you know, timeframe and the right amounts has really stuck with me and that lifestyle congruency is so important.

christeen_era:
Yeah, and that's another thing I love about the Profit First system is it gives you the insight you need to make sure your business can support the way that you want to live. So that's another upside of it. So the new way of thinking in utilizing Profit First is sales minus profit equals expenses. So you're intentionally taking your profit first.

steven_bousquet:
Well, right. So now we're just upsetting the whole generally accountable, acceptable accounting principles on its head. And we're taking, you know, what was accepted for, you know, 100 years of sales minus expenses equals profit to sales minus profit equals expenses. And now we have to learn how to run our business on after we take the profit. What's the expenses? So tell me a little bit about like, what's the pushback on that?

christeen_era:
Yeah, so it's, you know, you're, you're flipping your mindset, you're, you're flipping the way, you know, it's like running an engine backwards, right? So it's like, we get so used to having cash in the bank and one account and using it all and what we need and what we need it for and even when, and even when we don't have those funds, we're used to just maybe putting it on a credit card or a line of credit and, you know, it gets tighter and tighter. So with this concept, controls in place to make sure that the business is only spending in a lot of amount and this a lot of amount is what a business should be you know to be healthy like what's being spent this is a healthy amount of spend so you know you're not overspending and you're being intentional so that's a hard switch for some people you know when they've been running their business so long or even surviving in life right you have one bank account you take everything you need out of it, when things get tight, you put it on a credit card. So this is a change of mindset, so it does take a little bit to get used to, but man, the reward when you can take your profit first and then you know how much is you have left over for expenses, that profit is yours as the business owner. You make the decisions on what can be done with it. And you know, so that's the upside. have found how easy it is for people to adopt it because once they see that happen and they get that profit, you know, it's a motivator to keep them going for taking their profit first.

steven_bousquet:
Yeah, and they're taking that profit first every quarter, you know, three months, and then you take your profit first distribution. So when I first heard of profit first, I was reading it and I was like, well, of course that makes sense. You should know how much profit you're gonna take based on the percentage of revenue of the business. And but it was kind of like, what? Like that was really the first time I heard it. You don't know your

christeen_era:
the

steven_bousquet:
profit first, take your profit first. But now that we've been doing it for so long, it makes perfect sense. you're gonna know what the return you are gonna get on an investment. Like if you're gonna invest in you know CD or bonds or stocks you're looking for a return on that. You want to know what that return is up front. You wouldn't like just throw money somewhere and then wonder or hope you're gonna figure out what the return is. So first it was kind of like what course you want to do that and then but I didn't know how to implement it and that's where profit implement it and now it's been in our business for a while so it's like of course you wouldn't want to know what your profit's gonna be so after a while it just makes perfect logic

christeen_era:
Yeah, yeah, and it's it and you've said it plenty of times. It's a what is it? You say it's a simple system, but it isn't easy,

steven_bousquet:
It's

christeen_era:
you know.

steven_bousquet:
simple, but it is not easy.

christeen_era:
Yeah.

steven_bousquet:
So, you know, the first time I read the book, I'm like, oh, I can do this. And, you know, we tried, we kind of did it. We didn't do it correct. And a hired a profit first professional who helped a little bit. And it was, it got a little bit better, but it still wasn't implemented correctly. And then when we started working with you, we finally got it implemented correctly. And it is a simple concept, but it's not easy to do. You know, just like going to the gym and working out four days a week, concept

christeen_era:
right.

steven_bousquet:
but it's not easy to consistently keep that up for a long period of time. And you know we'll find reasons and excuses and all kinds of things but it's pretty simple just exercise 30 minutes you know a day and do your 150 minutes exercise every week and you'll be in great shape simple right but it's not easy to do and profit first is kind of the same concept.

christeen_era:
Right. Yeah. It can be a bit challenging. And I found the reason that it's challenging is because you're changing behavior. So that can be challenging in itself. Just like you said, when you go to the gym, like you have to get in that mindset to be dedicated to the process.

steven_bousquet:
And profit first is kind of like going to the gym, because you don't go to the gym two times and you're in shape. You know, it's a process, you have to keep going. It's a month, it's a quarter, it's a year. And then it's fully implemented. You don't lift for two or three times and expect to be in shape and go to the gym, you know, I want. This isn't working.

christeen_era:
right.

steven_bousquet:
Where's my six back? I don't know.

christeen_era:
Right, yeah, it's not gonna happen overnight for sure.

steven_bousquet:
Yeah.

christeen_era:
So in Profit First, we have different accounts. So this system is set up to where you have different accounts where you're funneling your money into. So, and one of the favorite images that I've always had of Profit First is the Profit First Pig. And it's this little piggy that has, it almost looks like one of the little pigs that would be in a butcher place and it's got the little dotted lines, the best parts of the pig. But on this image, it identifies the different accounts for profit first. So there is, you know, if you can imagine this little pig and these different divisions of this little pig, we've got the income account. So the income account is all the money goes into this income account. That's your total revenue. And right now, what people are probably doing in managing their business is not just the not only does all the money go into that account, they're paying everything out of that account too. So it's this big hodgepodge of expenses, automatic withdrawals,

steven_bousquet:
everything.

christeen_era:
debit cards, everything, everything going in there. But in profit first, the income account is only used for your income. So you're seeing all the money that comes in, and that's the only thing that this account is used for. Then we have supporting accounts. So in the standard profit first system, you have your profit account because profit comes first and then we have owner's compensation because that's extremely important. That's the next piece of it. So that's its own account. And then we have the tax account. So because it's important that the business pays your taxes for you. So once you're done doing business for the year, you don't get hit with this 50,000 $1000 tax bill after you felt you had a great year, so you're not blindsided anymore.

steven_bousquet:
been there done that

christeen_era:
Yeah, and that's usually a huge trauma point for business owners to where that tax bill comes in and then what they had put in their savings all year gets wiped out plus some.

steven_bousquet:
Yes.

christeen_era:
And then we have your operating expense account. So that's the account that's used for all the operating expenses in the company that get paid out of that account. And for the profit first, for lawn care and landscape businesses, we have a materials account as well. So we would be intentional about allocating funds for materials so you can use that account to pay your materials. So these are the main accounts that we have in the Profit First system for lawn care and landscape business and we just added that one bonus account for the materials and subs so you can be intentional about it.

steven_bousquet:
Right, so when it comes time to pay your vendors, the money's there, it's a percentage of your total revenue which your materials and subs are always gonna be a percentage of your total revenue. So it's there, and that's one of my favorite accounts because we don't ever have to wonder how we're gonna pay for our materials and any of our vendors. So it's

christeen_era:
Right.

steven_bousquet:
a big relief account.

christeen_era:
Yeah, it is. And that's one of the reasons why we added it. So we have some, you know, there's four principles to this profit first system. And the first principle is what we call small plates. And these small plates tie back to each of the account. So you're, these plates are you taking your revenue, your total income, and then you're moving the amount that you need to, your profit account, so that's your profit small plate, and then your owner's compensation. So that's your owner's compensation small plate and your tax small plate and your operating expense small plate. So you're using your income account, your revenue account as a serving tray, and then you serve up the portions to these different accounts, these small plates.

steven_bousquet:
So, you know, the old way that we used to do it was everything went into one account and then we would just kind of, we would pay out of it randomly and we would have no idea kind of where we were, where we were going to be. And so it's kind of like the small plates is kind of like putting your wrenches in the wrench drawer, putting your screwdrivers in the screwdriver drawer, putting the sockets in the socket drawer, putting the hammers in the hammer drawer. So when you go, when it's time to use that tool, you know where it is.

christeen_era:
right.

steven_bousquet:
Instead of throwing all your tools in one bucket or one just bin and then randomly picking through trying to find that 15th, 16th socket.

christeen_era:
Yeah, and in the money in your business, it is a tool. It's a tool to run your business. So you're making sure that you're putting the money where it goes, so it's there when you need it. And you know how much to put there. That's the other thing about the system. So the idea is to eat your veggies first in the profit first system, which is the concept of taking your profit first. profit first, just like when you eat your veggies first, you know that you're creating a healthy business. You know that you're making good decisions for yourself to be healthy and you're taking and what's needed that's most important and being intentional about it, which in this situation it's your profit. So even when you make your distribution from your revenue account, I instruct anybody that we work with. sure you do the profit account first because it's a mindset and it's rewarding. So there's a psychology behind it of making sure you take your profit first. It's the first transfer you make out the gate.

steven_bousquet:
So you're going to take that profit first, those are your veggies, that's what's good for you and kind of what I was saying earlier about, you know, if you can't, I couldn't take my own paycheck and what was happening was it was really telling me I was undercharging and not getting enough money for the work we were doing. So if you can't eat your veggies first, it's really telling you something is unhealthy.

christeen_era:
Right, exactly. And then the next method is your removing temptation. So taking your profit out of your account, taking your tax out of your account, so you're removing the temptation to spend that money. So it's kinda like, you know, when you go on a diet, you don't go buy the cookies, if they are in the cookie jar because you've got kiddos running around the house, you kinda push that cookie jar maybe to the back of the counter, You know as far back as possible So you're making sure that you remove the temptation and you don't go grab that money Out of your business when it's intentionally for something else for your profit and your tax So that's

steven_bousquet:
Yeah.

christeen_era:
that's the being intentional about putting your funds out of reach and in the profit first system When you move your money to your profit account or your tax account There's these two other accounts that you can have at a different bank to where you can then transfer it to your profit hold or your tax hold account. So it makes it more difficult for you to just grab that money if things get tight or if you're in a pinch.

steven_bousquet:
Right, yeah, and that's a temptation. When things get a little tight, especially if you can do it electronically, you just make a few clicks and you move the money over. But if it's out of your hands and it's in a bank, especially the profit and the tax that you have to go to physically, it makes you be a little more innovative and creative. And maybe you don't buy something until you can afford it or you don't spend money on something until you have the money to do that. Absolutely,

christeen_era:
Right.

steven_bousquet:
it's definitely helped me to look at items and move those out another quarter for certain purchases.

christeen_era:
Yeah, and then you have the money there when you need it, like when that tax bill comes in, you can pay that

steven_bousquet:
And it's always

christeen_era:
free

steven_bousquet:
there.

christeen_era:
tax

steven_bousquet:
And somehow

christeen_era:
bill.

steven_bousquet:
we always make it through what we thought was tight. We make it through and then we're fine. But relying on just grabbing money from that account is kind of a crutch. And we got over that pretty quickly and figured out how to do it. So definitely get it out of, it's the cookies. When people send me nice gluten-free cookies for gifts, I actually put them down seller in the downstairs. refrigerator because you have to keep it refrigerated. That way if I do want to cook it I have to work all the way down, sell it all the way across the end of the room and into the refrigerator. But if they were upstairs I would they would be gone. Yeah.

christeen_era:
Right. Yeah, that temptation.

steven_bousquet:
definitely

christeen_era:
So

steven_bousquet:
tend to.

christeen_era:
the fourth principle is what we call the rhythm. So the rhythm is where you can get dialed into the rhythm of your business, which you could either do weekly or twice a month. So when you're making your allocations, all the money's coming into your revenue account. And then at some point you've got to disperse it based off of your business rhythm. Now the, the standard top profit first way is, on a twice of month rhythm where it's the 10th and the 25th. So you're moving your money from your income account to your profit first accounts on the 10th, so everything's ready to go for the 15th when bills are typically due and then the 25th, so everything's ready again to pay bills and other things on the last day of the month. We introduced in the Profit First for Lawn Care and Landscape Businesses book rhythm. And we did this because in this industry, and I know you do this in your business, Steve, you run payroll weekly. You have a weekly cash cycle in your business because it's very fast-paced and it's just better for your business model. So I love the weekly rhythm because when you are seeing the rhythm of your business on a weekly basis and you're touching the system a little bit have it faster. And the other reason I like it is because in working with businesses that are dealing with a cash crunch, like they're going through, they're implementing profit first, they have some major pain points in the business, a weekly rhythm gets them there a little bit faster. It's showing us where the pain points are happening, where we can maybe deal with some of the low hanging fruit and improve the spend in the business and how often the cash needs, to be infused into these accounts to kind of see, well, what's the disruptor? What's causing the business not to be as profitable? Is it a price thing? Is it a cost thing with productivity? Like where are the problems coming from? So I really like the weekly rhythm because it allows a business to get there faster when they're trying to get in front of the profit first system. And when I say get in front of the profit first system, their business getting to that healthy financial state that they haven't been in. And they're doing this by implementing the profit-first system.

steven_bousquet:
Yeah, I love the weekly. It works for us. It seems it's a little more intimate with the numbers. We're watching the, as we put the money in the income and then we do our allocations weekly, you know, definitely helps you get ahead of stuff. And, you know, we had meaning that our, our different funds that were different allocation percentages are funding our accounts properly. And so we're not having to figure out how to catch up. So the weekly definitely has worked really well. business, you know, and I would advocate that for a landscape business just because of how the money flows in and we're doing weekly payroll. I think if you're doing bi-weekly payroll, bi-weekly might might work better. But even weekly, if you're even weekly allocations, if you're doing bi-weekly would definitely work easier when you start. That would get you caught up much quicker.

christeen_era:
Right? Yeah. And I noticed too is, you know, as through the last couple years when we were impacted, you know, the whole business world changed, the world changed when COVID-19 hit. And one of the things that I saw in the clients that we worked with is when they did implement profit first, you know, they rode that wave and they got through the challenges without the additional that was happening and it really changed the perspective on small businesses. And I've been working with small businesses, my whole professional life. And we used to think small business was the backbone of the economy and now we know small businesses are the economy, right? They're there, they're making the world go round. So this is why stress, implementing profit first in your business, even getting started with that 1% profit today is going to change the way you do business forever.

steven_bousquet:
Yeah, just open up that one profit account. It's the easiest kind of one step. It's a good way to kind of get in the practice of the profit first, open up the profit first account, and then put 1% of your total revenue into that profit account. That's how we started. I started at just 1%. We worked it up to 3% of our total revenue, and then we started opening some of the other accounts and implementing it a little bit more. But it's that first step. It's like, go into the gym. You gotta do that one time. And you know, just practice, you're gonna have to stretch and be a little sore after that first visit, but going that first step is for that is like opening up your profit account and just putting that 1% of your revenue in and do that for 90 days. If you do that for one quarter, 90 days, and at the end of the 90 days, you know, that profit is yours. And you'll get, you and your family will get used to taking your quarterly profit distributions and everybody will start looking forward. it.

christeen_era:
Yeah, and on that note, Steve, I kind of want to talk to you as a business owner who's implementing Profit First. So how can a business use Profit First? What benefits does Profit First have?

steven_bousquet:
So the biggest benefit so far for us now that we have it fully implemented is always knowing where the money is and what the money is for. And not only for myself, but also for my team. So my office manager, my bookkeeper, but even my managers know, okay, that money is not for us. That's for taxes, that's for materials, that's for payroll. So it really helps everybody in the company to understand when every dollar comes in, has a job, this amount is for payroll, this amount's for material. So it helps that and also it helps to even out the year. So we have a big push in the spring for marketing. So we used to have a big cash crunch in the spring because we had to pay for our marketing in the spring. But

christeen_era:
Mm-hmm.

steven_bousquet:
now we have an account for marketing. So that account is being funded all year round. So when that spring rush comes, we have to pay for the, marketing we're doing in the spring, that account has been funded so we can pay that. And it kind of relieves, I have so many other things to do in my business, I have to do hiring, deal with customers, vendors, you know, buy equipment, and deal with, you know, other things, the state, licensing. So we have all these systems in our business and we didn't have a cash flow system, the most important thing in our business, you

christeen_era:
All

steven_bousquet:
know,

christeen_era:
right.

steven_bousquet:
to manage the cash, we didn't have a So it really allows me the time and space to focus on other things and not how to pay bills, when to pay bills. And it also lets me sleep at night because owning a business and staying up at 2.30 in the morning wondering how am I going to meet payroll this week? Because if this doesn't money doesn't come in, if this, I'm going to have to make calls. And I've lost many sleepless nights really wondering and worrying about how am I going to make payroll? And that's all gone. with Procter first.

christeen_era:
So what I'm hearing you say is that it has allowed you to empower your team to understand a bit better how the cash works in the business and manage it so you don't have to because the cash is going where it needs to go, when it needs to go there. And it's allowing you as a business owner to focus on what really matters instead of putting out small fires in your business or even big fires the cash demand and you can do the things that you really excel at and that matters in making your business grow and move forward.

steven_bousquet:
Yeah, and the growth is one of the things that's amazing with Profit First because as my company grew and it grew exponentially over the last five years, we had grown more than double in size. I didn't have to figure out how to do that because we had our Profit First style then and the percentages just grew with us. So as the percentages, we maintained the percentages so the money was always in the right place. So me trying to figure out the cash flow, We just dialed in our allocation percentages and that took care of that. So the money was always there when we needed it. So when I meet with banks and for financing, they look at what we do and they're just like really impressed that we have so much clarity

christeen_era:
Hmm.

steven_bousquet:
and control of our money. And which makes us a very, gives us lower interest rates when we wanna borrow money. If we don't wanna borrow money, can have an account and save up for something we want to buy. But it definitely creates that clarity. It's like I said with the toolbox. I don't throw all my tools in one bin. I want it separated. I want it clear. So it just makes it faster if we have to repair something. And that makes it quicker. So we get it in the shop. We get the right tools. Quick, quick, fix it. It goes back out and starts working and making money. And cash is the same way. If we have to figure out how to pay vendors, how to pay our employees, how to pay instead of like it comes in, we pay it, it goes out, we're back working, we're making money, that's just a whole different energy in a business.

christeen_era:
So it's a system, it is a piece of mind, it empowers your team to own their roles to where you don't have to do things. And it has given you the right insight to grow your business without much effort because you have a dependable cash management system in place that sounds like creating capacity in your business, because there's not as many things to do, but also giving you that insight to expansion and budgeting and

steven_bousquet:
Oh,

christeen_era:
everything

steven_bousquet:
absolutely.

christeen_era:
else.

steven_bousquet:
Yeah, totally. It's been a game changer. It's really helped us grow. And the other thing is, I think as a father and a husband, when I was worrying about cash, I was grumpy, Steve. I was not the most pleasant

christeen_era:
Okay.

steven_bousquet:
to be around. And I know that my wife and kids enjoy when I'm happy and have energy. And that means cash in the business,

christeen_era:
Yeah.

steven_bousquet:
about things and just having Prophet first has taken that out of my kind of mindset worrying about that. And so I can show up as me and be a better husband and a better dad and it's definitely impacted by relationships.

christeen_era:
even a better leader in your business because one bad day for the owner can be one bad day for your entire team.

steven_bousquet:
Mmm. Yeah, it is right. Right. If there's a grumpy Steve, it just everything runs downhill as they say and that is like, right? The stress of that and right. It doesn't really help with leadership or even like selling when I go on sales calls.

christeen_era:
great.

steven_bousquet:
If I have that stress, you're selling from that kind of like panics state of mind, which is not in the customers pick up on that. It's not a good place when you're selling from that confident. You know, you sell the right job at the right price to the right customer,

christeen_era:
Yeah.

steven_bousquet:
which

christeen_era:
Mm-hmm.

steven_bousquet:
adds more profitability as opposed to any job to anyone, any type, which you know for any price that never that's a lose-a-lose-lose. So really having control of the money and having that cash flow just means better sales to better customers and doing you know projects that we really like.

christeen_era:
Yeah, and this, I mean, it's another reason why you need to make profit, a habit in your business and not an event because then you can be dedicated to the process and then you're setting yourself up for success to take your profit first today and always. And you can continue to fill that impact personally and professionally.

steven_bousquet:
Absolutely, and I think profit as a habit it gives you a sense of confidence and gives you a sense of grounding Knowing that you're gonna get out of that survival trap of you know Any job for any price just to make it through to next week So

christeen_era:
Mm-hmm.

steven_bousquet:
that profit as a habit not as an event is Huge and people want to work, you know When the biggest thing now is how do we recruit people get people in our company and people want to work for companies that are financially healthy and financially stable and financially strong. And the communities that we work in as landskeepers is we're not worldwide. We work and live in a community. And

christeen_era:
Yeah.

steven_bousquet:
word gets out in that community of who's a healthy financial company and who's not.

christeen_era:
Yeah. And I think financial health, you know, can compute to just being a happier team and happier people. It's just one of the, like life is hard enough. We don't need financial stress on top of it, right?

steven_bousquet:
Right, I mean, I've had people that we have hired, they've left other companies because, you know, they've had paycheck spouts.

christeen_era:
Yeah.

steven_bousquet:
And they're like, I liked kind of working there, but not really, but it got even worse when I couldn't cash my paycheck. And

christeen_era:
MBC 뉴스 김지경입니다.

steven_bousquet:
I heard everyone can cash their paycheck at your company every week. And I'm like, yes, they can.

christeen_era:
Right.

steven_bousquet:
And I can, here's why. So it's really, it makes a big difference. It makes a bigger difference the accounts. It really, you know, it's kind of like going to the gym, you know, you're going to the gym all the time, you start eating a little bit better, you have a little bit more energy, you're a little nicer, you start taking care of yourself better. Other people notice they start taking care of themselves better. More healthy people want to be around you. So, you know, that is just the start of it and same thing with Profit First.

christeen_era:
Yeah. Yeah. I love how it like ripples out. And

steven_bousquet:
It definitely ripples out, yeah.

christeen_era:
yeah. Yes. Yeah. I've seen people change mindsets change businesses change teams change. I mean, it's just, it's been a phenomenal journey watching profit first being implemented in small businesses and the impact that it has had on, you know, first the life of the owner and then everybody that surrounds them from their members to other professional associates and friends that they have in the industry, even family members that have a business and they're like, Hey, what are you doing? And they're like, Hey, I found this thing called profit first. You can check it out. And it's a game changer for them. You yourself have a family member that you introduced profit first to and it absolutely was a game changer for her business.

steven_bousquet:
Yeah, she, you know, I introduced her to Profit First, I coached her through it, and you know, I got this wonderful message, hey, Steve, thanks for all your help. You know, with the work that we did in Profit First, we're going on a 17 day cruise, her and her husband, that they paid for all with their Profit First distributions. And that was the longest vacation they'd ever taken in 30 years of business.

christeen_era:
That's amazing.

steven_bousquet:
So it was, and you know, for it with her proper first distributions. So that was what a wonderful message to get and you know to see what it's done for them in their their relationship you know and it's just wonderful because that's the thing with private first and most small businesses you know we're talking about a better life for our families you

christeen_era:
Yeah.

steven_bousquet:
know we're not buying Ferraris and third you know summer homes we're talking about spending time with our family making and making our lives better.

christeen_era:
Yeah, yeah, it's building, you know, the business of your dreams, not the business of your nightmares, right?

steven_bousquet:
Right, yeah.

christeen_era:
That's not why we started this adventure is,

steven_bousquet:
Yeah,

christeen_era:
you know,

steven_bousquet:
yeah.

christeen_era:
to make us miserable.

steven_bousquet:
And people are paying attention to what we do, you know, in your business and other, you know, there's this old saying, I think it's little pictures have big ears. And that means, you know, people are paying attention and listening, even children, that, you know, what we do is not in a vacuum when they see something that's positive and really improving people's lives. People pay attention and that's how profit first really spreads.

christeen_era:
Yeah, I love that. So I wanna talk about how Profit First can help someone take control of their business. Like what are the tools and topics that we can share around this?

steven_bousquet:
So how to take control of your business is that cash flow, you know, getting that even cash flow throughout the year. And that's really, you know, making the choice and decision to open up all your accounts and start implementing it and just calming down and

christeen_era:
Okay.

steven_bousquet:
making sure that you fund those accounts. It takes a little time. Like I said, it's like going to the gym and those are the first steps. And that's how you start taking control of it. Then you can start having conversations around it and then it controls, it helped us control our, we had budgets before, but this helped us to really see the percentages and why the percentages, what they were. Cause if you start

christeen_era:
Yeah.

steven_bousquet:
taking, this is the percentage for profit, taxes, OPEX, materials, and now we have for equipment, marketing, it just created this clarity for the entire business. in a calming now that we've been doing it for years, we can really look at it and there's a, we have a much, the whole, my whole management team here has a much more intimate connection with money and cash.

christeen_era:
Yeah, and that's phenomenal because one of the challenges that I hear in small businesses, how do I get my team to become more aware around the cash flow needs of the business and maybe even not even sharing the numbers with them? How do I do that? And

steven_bousquet:
Right.

christeen_era:
I think that that's that is a topic I think we could talk about, you know, all in itself on on a podcast. So one of the things that profit first does is it provides you an assessment, so there's a profit first assessment, you do the assessment and it provides you the percentages as what Steve was talking about on the caps, so the current allocation percentages. So what are your current percentages in your business? And then it tells you what your target allocation percentages are, which are your taps. So you do a profit first assessment and it's going to give you this insight of what am I now on percentages and what should I be spending as a healthy business on percentages? So those current allocation percentages caps and those target allocation percentages taps, they really give you your guidelines from where you're at and what you need to correct to where your goal is. And those percentages are what you can share with your team, your leadership without sharing the exact amounts and even empowering them to look for opportunities in the business to deal with the low hanging fruit, like maybe there's wasters spend over here that they see or maybe there's a processor system that can be eliminated that's creating problems in the business. So it's getting your team on board and being able to share those percentages. But the caps and the taps are what tells you are now and where do you need to be so you can make those small corrections over time to get there.

steven_bousquet:
And getting that dialed in, definitely it needs a little help. So when we

christeen_era:
Yeah.

steven_bousquet:
tried to do it, like I said, it's simple, but it's not easy.

christeen_era:
Mm-hmm.

steven_bousquet:
And definitely having help from a proper first professional got me there quicker. So I guess I could have like stayed the course and done it on my own, but I didn't have the time. I had too much to accomplish and too much to do. And I didn't want to wait that long for myself or my business. But you know, I'm like, let's hire someone that does this every day all the time. They know kind of the bumps in the road, the pot holes to avoid. So that really helped expedite the process of profit first. But

christeen_era:
Hmm.

steven_bousquet:
even figuring out like really what were my current allocation percentages, which is a fancy way of saying is what am I spending on payroll? What

christeen_era:
Right.

steven_bousquet:
am I spending on my material? What am I spending on everything else and what percentage is that? And then how do I allocate that weekly? We're already doing it. We're already kind of doing it. You're doing profit first in a kind of a way, whether you're doing it or not. It's just not intentional. It's not strategic

christeen_era:
Mm-hmm.

steven_bousquet:
and it's not systemized,

christeen_era:
Yeah,

steven_bousquet:
which

christeen_era:
it's

steven_bousquet:
is like cash is the most important thing that we need to systemize in our business. So, yeah.

christeen_era:
Yeah, it's not proactive, it's reactive.

steven_bousquet:
It's all

christeen_era:
And that's

steven_bousquet:
reactive.

christeen_era:
what we want to get away from is anything in our business that we can walk away from that's reactive, then we're making a choice. We're being intentional about it. We know what's coming. We're not driving the car blind with someone in the passenger seat telling us like, okay, take a quick right, take a quick left, right?

steven_bousquet:
Mm.

christeen_era:
Because that's how it can feel, you know, flying down that entrepreneur mountain when trying to grow and manage your business and you're hitting these peaks and valleys. And that's what happens in business is peaks and valleys. And it gives you that insight to navigate those because your business is being allowed to tell you its story.

steven_bousquet:
In the caps, the current allocation percentage is, you're like, how many times have we all worked so hard in our business and then the money is not there? And we're like, how defeating that feels? You're

christeen_era:
Mm-hmm.

steven_bousquet:
like, oh my gosh, I just worked so hard, 100 days of hell in the lawn care business, the landscape business. You know, you worked so hard and then all of a sudden, you know, you have all this money and then 90 days later, you're like, oh my gosh, where's the money? And not understanding that and not evening that out through the year, it's tough to be motivated keep going and so having the cash is definitely a motivator to keep going.

christeen_era:
So I would like to kind of share a profit-first cash management story. I know it's Steve, you and I have been working together for a while. You and I have worked together with other small businesses. And I share my stories all the time. I've shared multiple ones in the books about people where implementing profit-first has changed their life. It's changed their business. They've been able to go on vacations with their profit-disposited. contributions, by property, I mean so many amazing things. I would love for you to share a profit first story with, you know, since you've been working with businesses now for several years on making these corrections because of your journey.

steven_bousquet:
So one of the profit first stories I would like to share is just a tax story. And because it isn't one of the biggest parts of Profit First is that tax account. So one, this was before I was practicing Profit First, I had a really great year, a super profitable year. I was so proud of myself and my accountant does my taxes and he's like, you had a great year. You had an awesome year. I'm like, yes. And he goes, and by the way, you owe me. $45,000 to the federal government for your taxes.

christeen_era:
Yeah.

steven_bousquet:
And I

christeen_era:
That's

steven_bousquet:
was

christeen_era:
funny.

steven_bousquet:
like, what? What? He's like, oh yeah, let me show you. So he shows me, I wasn't disagreeing with him. I was just like, I had never had to pay that much tax in my life. I didn't save for it. I had to take a loan out to pay the taxes. And then I had to pay that loan off over the next three years. So now with Profit First, we have a tax account and the money was always in the tax account, it's ready to go to pay the taxes. And now my account, it's very funny, my account will say, hey Steve, you're gonna have to pay this and that. Are you gonna have that much money to make those payments? And then they'll go, oh, that's right, you do that profit first thing, you always have your tax accounts. Most of our accounts don't, most of our people don't do it like that. So it's just funny to get recognized by our account that yes, we're saving our tax money and we have it, And another kind of like fun profit first story

christeen_era:
Mm-hmm.

steven_bousquet:
for me is when we were in Hawaii, me and my wife and my brother and his wife, we went to Hawaii. I had funded the entire trip. It was our wedding anniversary trip. We'd been married for 30 years. And so I used my profit first distributions to go to Hawaii. We flew first class. We stayed there for 10 days. It was wonderful. But one day we're at the resort and everybody was bumping into us. The chairs were tight and it was like, and my brother looked at me and he's like, hey, why don't we rent one of those private cabanas? And I was like, private cabana, that's for all the people that was so out of my thinking and mindset. Like that's this, I don't know who that was for. It wasn't like from my lifestyle or who I was,

christeen_era:
Right.

steven_bousquet:
which I just never thought of it. But it was, it was a whole $250 for the day, which is like, I was like, $250 not to be bumped and fight for chairs and people, let's do it. So, you know, I have a really good picture of me and my brother sitting there. I call it my Prophet first Kibana because I paid for the Kibana with the Prophet, where I'm from Prophet first. You know, and what great memories it allowed me, my wife, my brother, his wife to have in the photos we shared and the conversations that we still have about it.

christeen_era:
Yeah.

steven_bousquet:
And it's just, it was a wonderful thing. And I don't know if I would ever have been able to save up that money without profit first.

christeen_era:
Yeah, that's amazing because it's an experience that just keeps on giving and it's not just giving to you is giving to people that matter most in your life. So yeah, I love those stories that when I, people share them with me and even share, I never imagined I would have this much money in my business. I never imagined, you know, some people are taking distributions or profit distributions that are more than their paychecks, you know, during that period of time.

steven_bousquet:
We almost hear that on a weekly basis now, don't we, Christine? People

christeen_era:
Yeah,

steven_bousquet:
like, I

christeen_era:
yeah.

steven_bousquet:
had no idea how profitable my business could be. And what's amazing is these lawn care and landscape businesses are some of the most profitable small businesses in the community. And nobody

christeen_era:
Yeah.

steven_bousquet:
knows. It's like a secret.

christeen_era:
Yeah.

steven_bousquet:
It's very, very interesting. And it's amazing to hear, I just talked to someone the other day who's building a new house. And it's the. big chunk of the down payment for the building loan came from his profit distributions. So I mean it's a it's a big deal and you know again it's not instant you know but it took three years to get to that point for him but now he's there what a wonderful thing for him and his family.

christeen_era:
Yeah, yeah, and it's a journey, right? And

steven_bousquet:
It's

christeen_era:
one

steven_bousquet:
a journey.

christeen_era:
of the things when last time I was a New Jerseyan, Mike McCallowits and I were chatting, you know, he shared, he said, you know, the journey is significant. And I think really on profit first in business and being an entrepreneur, the journey is significant.

steven_bousquet:
It takes time, you know, and I have a thousand day theory. Everything takes about a thousand days to get it fully implemented, you know, and review it, reflect on it, improve it, and then roll it back out. And, you know, with Profit First, to get to that advanced level, it definitely takes a thousand days. But, you know, you can start today by opening that Profit First account and start on your own journey.

christeen_era:
Yeah, just 1% starting today.

steven_bousquet:
what a difference that would make one one time one percent

christeen_era:
Yep.

steven_bousquet:
you can do it

christeen_era:
Yes.

steven_bousquet:
if

christeen_era:
Just start

steven_bousquet:
I did

christeen_era:
with

steven_bousquet:
it you

christeen_era:
1% baby

steven_bousquet:
can do

christeen_era:
steps.

steven_bousquet:
it yes absolutely

christeen_era:
All right, so we have a gift to share with all of our listeners. So we are going to share in the show notes a free profit first instant assessment. So please, you know, go to the show notes, find the link for the profit first instant assessment so that way you can go take your instant assessment, know what your current allocation percentages are. Know what your target allocation. and percentages are and start on the journey of profit first with even if you can't implement the whole system or it looks big and scary, start with that 1% today.

steven_bousquet:
1% start with 1%. That's how I started. And it started me on the journey that led me here

christeen_era:
Yeah.

steven_bousquet:
from reading a book to being on this podcast with Christine and being a partner with Christine and helping people really change their businesses and change their life. And we wanted to share a quote on wisdom on the kind of topic of what profit first I call it the freedom system because it really has given me freedom to live a different lifestyle financially and how much time I can take out of my business because I can afford to pay people to really good people to be running my business when I'm not at my business.

christeen_era:
Yeah.

steven_bousquet:
So I always call Profit First the Freedom System.

christeen_era:
Yeah, that's fantastic. I'm sure you didn't know that you were signing up for all those years ago when you cracked open that book profit first and look

steven_bousquet:
Did

christeen_era:
at where you

steven_bousquet:
not

christeen_era:
are now.

steven_bousquet:
know. You know, one of the biggest challenges what I had was we would have a good year and a bad year and a good year. And I was like, I'm so sick of this. How do I know what my year is gonna look like before it even starts? And that's what Profit First helped me to do.

christeen_era:
Yeah.

steven_bousquet:
So,

christeen_era:
So I just

steven_bousquet:
and...

christeen_era:
want to recap our conversations we had today. So we went over what profit first is, how it's a behavioral cash management system, that there is now a new way of thinking, um, sales minus profit equals expenses that we use small plates for the expenses in our business, the costs in our business, including profit, paying for your taxes, not you having to pay for your taxes. Talking about eating your veggies first, so profit first, taking what matters first, removing temptation in your business, so with your cash flow, making sure that you tuck away that profit and that tax, so you're not tempted to go rob the piggy bank. And then your rhythm in your business, rhythm or a twice a month rhythm depending on your business model.

steven_bousquet:
We talked about how small business is the backbone of the community and why it's important for us to have strong, healthy businesses. So we can have, you know, we can be, our businesses can be healthy, strong parts of the community. We talked about how a business can use Profit First and the benefits of it. You know, I've shared a little bit of my stories and what Profit First can do for lawn care and landscape businesses and landscape businesses can actually be some of the most profitable businesses in a community.

christeen_era:
Yeah. All right. And don't forget to go take your free instant assessment. Again, the details are going to be in the show notes. And make sure you join us on our next episode because I'm going to be interviewing Steve Busce here on his business journey, the ups and downs of being a business owner. So we're going to dive deeper into his journey of what, 40 years now?

steven_bousquet:
This is our 40th year. 2023 is my 40th year in business. In my journey, it's interesting. I've talked to hundreds of landscapers, and I almost feel like my story should be the history of every landscaper. Like how I started this, how my business started, and what I did to get where I am today. And so it's a very common story. But mine takes, just like everybody's, we take a little twist and turn. here and there and hopefully we end up on the right path and the right profit.

christeen_era:
Yeah. Well, here's to always taking your profit first, Steve.

steven_bousquet:
Thank you, always take your profit first. Thanks guys.