Rocky Lalvani: That's a skill like to me. Yeah. Yeah. When I look at a spreadsheet or a tax return. Yes. Yes. It tells me a story. I can see that story. Yeah. , right? Just the way a therapist who looks at their patient probably sees a story and can understand that story and knows, oh, this is this story, and it, they all blend together, right?
Rocky Lalvani: , you get , you know what's going on quickly. , I just happen to see money stories in, in numbers. That's all. Not everyone sees that, and there's nothing wrong with that. You, you have to look at yourself and say, what are my skill sets? What am I great at? . And if it's not something you're great at, either you're gonna have to figure it out and learn it or put somebody on your team to help you with it.
Rocky Lalvani: Mm-hmm. , but you can't ignore things. I learned a lot from my guest this week. Uh, Rocky Lavanne from Profit Answer Man Podcast and his webpage. Profit comes first.com. there were, there were a lot of things in here that were eye-opening. For example, if you know anything about financial documents, those financial documents, uh, he, he says they, they were not made for you.
James Marland: They were made for, you know, um, the tax man or other people, uh, the system that you might be using. Your profit and loss statement, your revenue. Your income statement and, and those other things, uh, they might not be your best source of information for making day-to-day business decisions. And he explains how the profit First system helps the practice owner, uh, look at the real numbers of their business to make business decisions for themselves.
James Marland: He also said That the numbers tell a story. I love, I love that illustration. The numbers tell a story. Just how you can look at somebody's symptoms and behavior and problems and some of their, you know, the things they check off on their list and what they come in for, and you can kind of fill in the gaps about the story of their life and how they get there and how you can help them.
James Marland: The best. Rocky does the same thing with, with numbers. It's, it's actually pretty cool. You can look at. The, the numbers and see what that, what that story tells you and how to fix some of the bottlenecks that are common when you have those problems. It was, it was a pretty fascinating discussion about, uh, about knowing your numbers and how the numbers tell a story, so if you're interested in finances, if you're interested in why you should take profit first, give this episode a listen and, uh, see what Rocky has to say about making your business profitable.
James Marland: Welcome to the Scaling Therapy Practice.
James Marland: This is your host, James Marland. This is the show where we encourage you to take small steps of growth every day, that lead to big results. Today I have a special guest, Rocky Lalvani. Hello, Rocky. Welcome to the
Rocky Lalvani: show. Thanks so much for having me on. James. Excited to be here. Yeah, well, you're,
James Marland: you're gonna talk about one of my favorite things, financials and profit first.
James Marland: So, uh, uh, how I met Rocky is we were in, uh, a group from. The practice of the practice, and it was the Level Up conference that's coming up in March of 2023 and it's, uh, March 20th. And, um, we recognized that we were in the same , the same state, and so I got to talk to him and I found out that he, he does some financial consulting and I thought it would be great to have him
Rocky Lalvani: on the show.
James Marland: Just as a quick introduction, Rocky serves as the chief profitability advisor. For business owners, he teaches them how to ensure that they get paid and make a profit and make a profit a priority, and making a profit a priority. That sounds like a good thing when you're running a business. He's a certified Profit first
Rocky Lalvani: professional.
Rocky Lalvani: He
James Marland: implements Mike Mcz Profit
Rocky Lalvani: First System.
James Marland: Uh, he wants to change the accounting formula from sales minus expenses equal profit. Two sales minus profit equals expenses. The, uh, this ensures profit comes first. PS It's not about the money at all costs. People come before money. So, Rocky, that was your, uh, introduction.
James Marland: Sounds very interesting. Uh, tell me, tell me how you got into this or a little bit
Rocky Lalvani: about yourself. So it's a long story on how I got into this , uh, quite a bit of a journey, you know, and honestly, you know, the funny thing is it's, it's the intersection. of psychology and money is really what it comes down to.
Rocky Lalvani: And being able to look at both of them together. And I think for your audience, they probably would very much understand that because all the people they deal with, one of the. . Biggest probably underlying issues is financial. Mm-hmm. , right? When you've got financial stress at home or in your business, it goes across every other part of your life and expresses itself in a variety of different ways.
Rocky Lalvani: And there's actually. I mean, if you look at it psychologically, we are all running scripts and, and have certain mindsets, and we have those about money as well. It's just that money's a taboo subject, so we're not allowed to talk about it or we don't address it. and it's only, I think recently that the intersection of money and psychology has really come together to help people.
Rocky Lalvani: So that was my original foray into it, and I was more on the personal finance side when I found out business owners weren't looking at their p and ls. I'm like, how do you run a business and not look at your numbers? Like this is the target audience for me. I can help these people and create a good business out of it.
Rocky Lalvani: Partnered with Mike Mcow, ITZ, the Profit First team, a bunch of other systems brought them all together to just help people to get rid of the financial burdens. It, it sounds like
James Marland: you, you, you were talking about psychology and money, like there's a way people think about money that might need to be readdressed.
James Marland: Right.
Rocky Lalvani: Correct. And honestly, it's just asking them the questions. I mean, I, I don't know as much about your profession and how you deal with patients, but I, I'm guessing you probably ask a lot of questions about childhood and parents, don't you? Mm-hmm. . Well,
James Marland: I, I, I'm not a therapist. Did you do that? I've worked all in administration and admitting people, so I listen to the problems, but Don.
James Marland: always solve them. I get them. I'm like a connector. I connect people to solutions. Okay. Sort of like a little bit what you're doing, but I, I worked 18 years in mental health, so I asked a ton of questions and a lot of it did have to do about, you know, some of their experiences growing up.
Rocky Lalvani: So I get ya. Well, cuz every time I read a psychology book, it's always the same thing in the back of my mind.
Rocky Lalvani: This isn't a psychology book, this is a parenting book. You caused all these problems, , . And as I look at that, it's, it's the same thing. Do you ask them questions about money and how they grew up learning about money? Because whatever their money behaviors are, they're, they're still running in life. , right.
Rocky Lalvani: Those scripts are still going on. Yeah. In the background. And I think that's one of the biggest reasons business owners struggle is math is hard. Mm-hmm. , I don't, I don't like numbers. I can't understand accounting. You start saying that and you're gonna struggle and you're gonna believe it and you're gonna believe it.
Rocky Lalvani: Yeah. I can't
James Marland: do this. It's too hard. I got into the business to help people not know my numbers or
Rocky Lalvani: something like that. And, We we're not supposed to be profitable in this kind of business helping people. Right. A lot of taboo around that.
James Marland: That, that sounds like a devastating internal belief for running a business, doesn't it?
James Marland: It is. Yeah, the guilt and shame of being profitable and actually being good at what you do in charging money. Yeah, I'm sure we'll get a little bit more into that. That is a great introduction. Um, thank you for that. Before we get into our main topic of talking about Profit first, uh, let's go into our, uh, segment on the tip of the week.
James Marland: I'll go first. Rocky. My tip is just networking, like don't be afraid to network. , that's, that's how I got to met Rocky . You know, that's how I got to have this interview and just learn, learn about, uh, a subject that I am, I'm passionate about, but probably not good at either, you know? So I get to have an expert and talk to them about their ideas and, you know, whether you're, you're networking is a local, um, you know, a local affiliation for a therapist
Rocky Lalvani: or.
James Marland: A local business owner or going out and doing speaking events, just network, like get out there and network. It's gonna, it's gonna expand your world. And, um, it does a lot of great things for me, just learning and, uh, growing the business. So my, my tip of the week is networking. How about yours?
Rocky Lalvani: So I like to share a favorite book.
Rocky Lalvani: Awesome. I love the one it, it is called The Road Less Stupid by Keith Cunningham. What? And, and the tagline is, avoiding the dumb Mistakes that sabotage Growth, profits, and business success. The Road Less Stupid. The Road Less Stupid. That's
James Marland: an awesome title. So tell us about that. Yeah. Hi,
Rocky Lalvani: you. It, it comes down to thinking about your business.
Rocky Lalvani: Literally, every chapter is very short. It's on a particular subject, and it always ends with the same last sentence. Now go think. We are told to work on our business instead of in our business, and he literally, he gives you somewhere between seven and 800 questions to ask yourself. About your business and how you do things so you can think about your business and make better choices instead of, you know, making silly choices.
Rocky Lalvani: And some of the things are, are, are probably not what you'd expect, but it's. , what is the culture we have now in our business? Mm-hmm. . You create a culture, it will be created for you. So do, are you aware of your culture? Is it, are you happy with your culture? What do you want to change about your culture?
Rocky Lalvani: All, all of those types of things. And that's just, that's one chapter and one sample question. There's hundreds of them to read from, so it really helps you work on your. That's
James Marland: amazing because I was talking so with some other, uh, business owners and we, we work, work, work, work, work. And don't think, think, think , think about what we're doing.
James Marland: We just do it and do it. And you know, over time you, you, you get outta whack or, or you forget you have these goals. But if you're just busy doing things, you're not working on your goals, just stop and. What a great The Road Less Stupid by Keith Cunningham. I'm gonna put that in the show notes for sure and take a look on it on Amazon after this, cuz that sounds like an amazing book to read to, to help our busy practice owners.
James Marland: Uh, so that was the segment on Tools and Tips, but now we're gonna move into the main, the main part of our discussion is about, uh, you know, profit First. And so I have some questions I want
Rocky Lalvani: answered.
James Marland: You know, being the curious person that I am, and, uh, I think that'll lead to,
Rocky Lalvani: uh, what you do and what you're doing.
Rocky Lalvani: So, uh, we started talking about
James Marland: this a little bit, but when it comes to finances, what's the big problem facing, uh, private practice
Rocky Lalvani: owners today? So at the end of the day, and I've noticed this, and it comes back to what we talked about it. You don't have pricing power necessarily. Mm-hmm. , because if, if you are stuck accepting what the insurance company pays mm-hmm.
Rocky Lalvani: then you're limited in your ability to charge what you're truly worth. Now, if that's the case, you have to be very, very careful on what you're spending looks like, because when you have, you know, you don't have pricing power, you've got to run a lean business. And I think that's where the struggle comes in.
Rocky Lalvani: So how much are you paying your therapists? What percentage are they taking? Or are they hourly? If they're hourly, are they productive? Mm. When I look at the books for most therapists, we either find that they have very low margin to begin with. In other words, they're sharing a large part of the revenue with therapists, or B, their therapists aren't necessarily as productive as they need to be.
Rocky Lalvani: And then the second thing is, what does overhead look like and what do your overhead costs look like? And are they reasonable? Can we actually run a profitable and cash flowing business? I'm sure you've
James Marland: seen books where you add all that stuff up and they're negative, right? They're in the,
Rocky Lalvani: can be negative.
Rocky Lalvani: Yes. They're in the
James Marland: minus. Yeah. I, uh, I was talking with a friend who, who had contractors and she turned them into W two s but didn't think, I'm sorry if you're listening to this, but didn't think through the, the change and gave them the same rate that she was giving them as, uh, contractors as w twos.
James Marland: which basically meant she gave the, uh, you're shaking your head for the Audioly Anders. She gave 'em a massive raise because of taxes and other things that now she's responsible for. And she didn't realize that until after the fact. Like, Hey, I'm making less now. like, I ha I added more people, but now I'm making less, uh, because of that decision.
James Marland: Um, and that's just 1, 1, 1 decision there. when you look at your expenses. So what do you mean by, you said run a lean business? What does
Rocky Lalvani: that mean to you? Well, so let's look at what your major overhead costs are in, in a therapist. Uh, you know, I'm thinking you have to have some sort of an office, okay?
Rocky Lalvani: Right, to meet people. How expensive is. or do you own the building? And so I think that's one of the major costs. Mm-hmm. . The second thing is what are your software and billing costs? Mm-hmm. , because software gets very expensive very quickly. Um, and then the other thing is how quickly do the insurance companies pay you the turnaround?
Rocky Lalvani: The turnaround, and, and are, are there lost? Uh, um, claims in there that aren't getting paid. How do you process those? And so what's the office staff look like? How much overhead do you have there? And you add all that stuff up and it gets expensive. Sometimes you have to grow, unfortunately, to get profitable and mm-hmm.
Rocky Lalvani: and you mm-hmm. , you should, all of that stuff can be mapped out ahead of. , you can have a pretty good idea of what that's gonna look like, map it out, and at least on the back of a napkin, and we're not talking fancy math here, you know? Mm-hmm. we're talking about. Mm-hmm. second and third grade math, just to say, does this make sense?
Rocky Lalvani: Yeah. And so based on the answers we see, we make better choices. So it might be shifting to a different building. It might be letting go of insurance companies that do not. Pay well or take forever to pay. Or maybe it's, you know, reorganizing how you pay your people, or they deny
James Marland: a bunch of claims, which means you have to, uh, hire people or hire a billing company to process this claims.
James Marland: Now you're losing a percentage on every claim. Like I, I knew one guy, uh, when he, when he called us, when I worked at the virtual assistant company, he called us and. . Yeah. When I, when a claim doesn't get paid, I don't know what to do. So I just work harder. , , I just see more people and, uh, that's how he, he made up some of his shortfall.
James Marland: Um, and you, you, you talk, you mentioned something, um, that I don't think some people, it's economy of scale. So if you can do something well, and you can make money on it, the more you do it, the more money you make. But there is a, there. A breakeven point that you have to go through. And so when you were talking about growth, you know, sometimes you have your system and your process and your overhead, but now you need, you gotta hire four more people to become profitable, which is hiring's tough.
James Marland: Like at, I feel like hiring's gotten a little harder the last two or three years. I don't know if you've experienced that,
Rocky Lalvani: but, so firm I, I deal with a variety of different businesses. two main problems that we've dealt with over the last couple of years. Number one is trying to get workers, employees, and number two is supply chain slash inflation issues.
Rocky Lalvani: Mm-hmm. . Mm-hmm. . Um, in this business you probably don't have as much of a supply chain issue, but in, in a lot of businesses that that is a major, major problem. So in this area, I think employees would be your number one struggle. . Okay.
James Marland: So you, you talked about, um, we, we've talked about numbers and I, I hear this phrase thrown out a lot.
James Marland: like know your numbers. When I say know your numbers, what does that mean
Rocky Lalvani: to you, ? So for us, we look at the entire business as a math equation, and so it's understanding the entire business and the numbers of the entire business. And so we start with the basics, like we start with leads. How many leads do you have coming in the door?
Rocky Lalvani: How much do you have people you know? You know, how many times is your phone ringing with a referral? Mm-hmm. . And then of the people who call you, how many of those convert to clients? And then once they convert to clients, right? What percentage of them, what's the average amount they pay you? How many times do they see you?
Rocky Lalvani: And you can start to figure out what your revenue's going to be just by. looking at those particular numbers. Mm-hmm. , and then that tells us what our, our revenue is. Then we start looking at costs. What's my overhead, what's my cost of service? In this case if, if your therapists are contractors or if they're employees, what's all my costs going against it?
Rocky Lalvani: And then, My overhead. And then that lets us know what our profit is. And then from the profit is your pay, maybe depending on how you're paid. Um, could be capital equipment or capital purchases into your business. Loans in or out of the business. Um, so all of that kind of comes together and in understanding what they all are, how they fit together as an equation.
Rocky Lalvani: Where the bottleneck is and where you can make changes. So let's just say. The phone's ringing all the time and you have plenty of referrals. Mm-hmm. But we're not turning them into clients, so we know that there's a problem in that part of the business that That's the bottleneck you were talking about.
Rocky Lalvani: That's the, yeah. That's a bottleneck. Okay. Correct. And so maybe that's something we need to fix, or maybe even though you've got great revenue coming in, your overhead and costs are so high, there's nothing. So we have to figure out how to lean down our business. In a case like that, it's a matter of where do we focus to get the results we want.
Rocky Lalvani: Now, if the phone's not ringing and you've got therapists all waiting to help clients, then we know we have a sales problem. Mm-hmm.
James Marland: great. Uh, like think, thinking about it that way. Somebody who doesn't exactly know, like how all things fit together would struggle mightily. Like, oh, I know I have, I have this great therapist team, but I'm not making any money.
James Marland: Just knowing, knowing that it's a formula and there's a process, uh, is, is uh, you can diagnose things. It just seems like you can look at something and look at the story. The numbers tell. and make some key decisions for improvement. Is that, is it, is it harder than that? Is it?
Rocky Lalvani: That's, no, but you know what?
Rocky Lalvani: That's a skill like to me. Yeah. Yeah. When I look at a spreadsheet or a tax return. Yes. Yes. It tells me a story. Yeah. I can see that story. Yeah. , right? Just the way a therapist who looks at their patient probably sees a story mm-hmm. and can understand that story and knows, oh, this is this story, and it, they all blend together, right?
Rocky Lalvani: Mm-hmm. , you get mm-hmm. , you know what's going on quickly. Mm-hmm. , I just happen to see money stories in, in numbers. That's all. Not everyone sees that, and there's nothing wrong with that. You, you have to look at yourself and say, what are my skill sets? What am I great at? . And if it's not something you're great at, either you're gonna have to figure it out and learn it or put somebody on your team to help you with it.
Rocky Lalvani: Mm-hmm. , but you can't ignore things. It's like a, you, you can have a wonderful Porsche. Yeah. But if the the tire's flat, you're not going anywhere. Yeah. You know, if there's no gas in the gas tank, you're not throwing. and, and that sometimes takes a mechanic to figure out. Sometimes we can just look at it and go, oh, we got a flat tire.
Rocky Lalvani: We know what the problem is. , , you may not know how to fix it. What's
James Marland: that something noise? I have no idea. question the way you said that though. Yeah. Money story. Like you see the stories, the money, the, uh, tell you, and that comes from doing it like. , you, I had somebody come over the other night and, and look at my tax documents and he's like, oh, you gotta use this form and do that.
James Marland: You can deduct this and do that. And I'm just like, I don't know. I, I mean, you're saying, you're saying words, but like, you know, I, I know what some of this is, but I just don't know the story and he knew what to do, how to do it. Could you know, I was gonna say be 10 hours a time or more, and. You know, gray hairs,
James Marland: My wife, my wife says I get angry when I do taxes. You know? Cause it's frustrating. Uh, so finding the expert that can help you, you know, tell the story. It is, it's a great, it's a great skill and a needed skill because I don't, you know, I, I have an M B A, but I'm not the best at account. Like, that is not me.
James Marland: So, um, yeah. . Uh, so you're, you in your, you can take this question wherever you want it to go, but in your, in your intro, you had like a formula, right? Sales minus expense equals profit, uh, or profit equals ex whatever, sales minus profit equals expense. You, you had this formula and, and there were three terms there, profit, sales, and expenses.
James Marland: Can you just explain that a little more and like what. , what was the, the, the change that you're trying us to get
Rocky Lalvani: to do there? So, accountants are going to tell you that the formula for profit is sales, minus profit sales, minus expenses equals profit means
James Marland: sales minus expenses. Yeah. Okay.
Rocky Lalvani: Profits are leftover for many business owners, it's not until they do their taxes that they know if they're profitable.
Rocky Lalvani: Yeah. . And so it's way late in the game. The year's over, it's three months past the end of the year, and you don't even know what happened in your business. Mm-hmm. . And if you are profitable, you owe taxes, and if you don't have the money, you're in trouble. Right. So the book comes from Mike Mcal Itz, and Mike said they gave us the wrong formula.
Rocky Lalvani: we're supposed to be profitable, so why don't we do sales? Minus profit equals expenses. And what this does is it constrains your expenses. Now it tells you, Hey, I need to keep my expenses in line to this amount if I want to have this profit margin. And so we know right from the beginning, if I get a dollar of revenue, and I've got 10% profit.
Rocky Lalvani: Well, my 10 cents goes to profit. Now I've gotta figure out how to run everything else on 90 cents and how to maintain my business on that. And that's basically what it is. It's just a mindset shift in how you think about expenses in your business. Because too often we're told you gotta spend money to make.
Rocky Lalvani: And I think that is a misnomer. You don't necessarily need to spend money to make money. We tell people you don't need more resources. You need to be more resourceful. The problem is when we're busy and we don't have time to think, we throw money at every problem. Yes. .
James Marland: Yes. I relate to that . Go ahead and expand on that a little bit.
James Marland: Well, and that's to do, you throw money at it. You throw money
Rocky Lalvani: at it, instead of figuring out how to do it, we throw money at it, and then we wonder at the end of the year why we don't have money. And so Profit First is nothing more than a constraint. Like if you want to go on a diet, the first thing they tell you is get a smaller plate.
Rocky Lalvani: Mm-hmm. , you'll put less food on it. Like it's the same thing. If we wanna spend less money, let's give ourselves a smaller amount of money to spend and we learn to do it. Cuz I'll tell you something, you might be bringing in a hundred thousand dollars, you might be bringing in 200,000 and you might be bringing in half a million this year.
Rocky Lalvani: And I bet you all three of those business owners are saying the same thing. I don't have enough money. Right? Well, wait a minute, how is it that the guy at $500,000 doesn't have enough money? The guy at a hundred thousand is, oh, if I only had 500,000, I'd have enough money. And they get there and they go, I still, cuz they, they waste all their money.
Rocky Lalvani: Wow. Yeah.
James Marland: That's, that's a great way to, to think about it. And it also like flips the problem on its head cuz we're always like, if I could, if I only was as big as this guy, if I could only do this, if I only made this much money, then I'd be able to relax. Then I the, this also sounds like a recipe for disaster too.
James Marland: For burnout.
Rocky Lalvani: Well, let me ask you a question. Have you ever heard somebody say, I'm gonna go on a diet after I lose 20 pounds, right. I'm gonna go to the gym. Yeah. After I lose 20 pounds. It doesn't work that way. No. You have to go on the diet and go to the gym first, then you'll lose 20 pounds and that it's that simple.
Rocky Lalvani: Mm. It sounds
James Marland: like it's a, a, a mi, you talked about it as a mindset change. What have you seen this do for business owners when they embrace
Rocky Lalvani: like the, the
James Marland: flip around where profit first, then minus ex, minus ex, no minus profit. What is the formula again?
Rocky Lalvani: sales minus profit equals expenses. Okay. Sales
James Marland: minus profit equals expenses.
James Marland: Yes. Take your profit first out of your sales. Okay. Yep. Yeah, it makes sense. So what, what have you seen this do for
Rocky Lalvani: business owners who follow this? , three things happen. Number one, they start to be profitable, right? Number two, they actually pay themselves mm-hmm. , and they know how to pay themselves and they feel comfortable paying themselves.
Rocky Lalvani: Number three, now that they're profitable, they, they set aside money to pay for taxes. So if you do this, well, what we have found with our clients, clients who, who follow the system, do the work, make the changes. about 18 months into it, they start to say things like, I've never had so much cash in my business.
Rocky Lalvani: What am I supposed to do with this? Right? , they, they see a lot less anxiety and stress. Mm-hmm. , they don't worry. , right? Because you know you're going to get in trouble, like the business cycle goes up and down. Some insurance company doesn't pay you for 90 days. Instead of 60, you run into cash flow crunches.
Rocky Lalvani: This is everyday life of business. It's a rollercoaster ride, and when you have excess cash, you get to scream. We and , you know, , okay, it sucked, but I got the cash to handle it and get through it and live for tomorrow. Yeah, it,
James Marland: uh, it builds up. Uh, there's some reserve there too, right? I think it helps you build a reserve.
Rocky Lalvani: It, it helps you build a reserve. It also helps you fire bad clients. Mm-hmm. , because now that you have excess cash, you're like, I'm not dealing with this anymore. Mm-hmm. , it gives you more of the ability to do a lot.
James Marland: So, um, why, why do we get it wrong then? Like, why, you know, if this is so much better, why, why do we always do the other way around where, you know, profit is just the leftover.
Rocky Lalvani: So this whole formula, your tax returns, your accounting system is not for your success in running a business. . Okay. The whole reason for these systems are driven by two different groups of people. One, the government wants its taxes, right? So they're, they want to know how to come up with a number to base how much you're going to pay them, and this is what they do.
Rocky Lalvani: The second thing is Wall Street and bankers want to have a, a system that tells them how to kind of look at you. Mm-hmm. and how to do that, but, None of these were designed for you in mind. Hmm. They're all designed for somebody else, and that's the problem is it's for their needs, not for your needs. So let's, let's, I'm gonna tell you the truth about, you know, behind the scenes with the, your tax person, your tax person, their goal is that you don't pay taxes.
Rocky Lalvani: Because when you don't pay taxes, you think they're great. . What they don't tell you is you didn't pay taxes cuz you weren't profitable. Right? They don't want you to be profitable. They'll call you up in December. Hey James, uh, you got a lot of profit this year. We're gonna have to pay a lot of taxes and I know you're gonna yell at me, so why don't you go get that truck you wanted.
Rocky Lalvani: We can write it off. James like, Ooh, I could buy a truck. Runs out, buys a truck. What happened to all his cash? It went to the dealership. or he took a loan, right? And, and then April comes and it's like, congratulations James. You didn't have to pay taxes. And then May 1st comes and James, like, how am I supposed to pay for that truck payment?
Rocky Lalvani: I don't have any money left. What happened to it all? You spent it. and so they're, they have their own reasons for doing what they do because no one's calling up their accountant and saying, thank you for letting me pay a hundred thousand in taxes this year. I'm so proud of you for letting me be that profitable that I have a hundred thousand dollars tax bill.
Rocky Lalvani: We've got it wrong. Well, it's not, as you said,
James Marland: it's not designed for us. Like, no, that system is designed for other people. And you're, you're saying this system is designed for the business owner gives 'em profit, gives 'em more security, gives them a cushion, you know, and all the other, I'm sure there's more, but all those things, a system designed for the business owner.
James Marland: Uh, so, so, uh, of course you, you have some services, right? So what, what do they do? Like, how could this help? Like if you're, if somebody's like being like, oh, this makes some sense. .
Rocky Lalvani: Um, what, what, what does your service
James Marland: do to help people along, you know, and embrace this?
Rocky Lalvani: So, I just want to tell a quick story here.
Rocky Lalvani: If, if you're a large corporation, right? You have a lot of different things that you have to look at. It's like flying a 7 47. You go in the cockpit of 7 47, there's a million gauges in dials. It takes a lot of time to get to the point to be able to do. Most small businesses, they're like a Cessna, right?
Rocky Lalvani: You got a simple dashboard with a handful of gauges. We've today talked about one gauge, the fuel tank. Do we have enough gas to get where we need to go? Do we have enough cash? That's what cash is. It's fuel for your business. However, there are other dials in your business. So let's say, you know, we. , go out for a nice joy ride.
Rocky Lalvani: Look at the farms of Lancaster. We're flying around at 6,000 feet. I look at my thing, I'm at 6,000 feet. Life is good, right? And I go, I got, I got a bunch of gas in the tank. Life is good. All of a sudden a storm comes in. Right now we're not even sure where we're going cuz we're in the clouds if we don't know how to read the gauges and interpret them.
Rocky Lalvani: the next thing you know, you're flying into the, the, the Appalachian Mountains, which are at 7,000 feet. And, and now you're, they're not really that high, but you get the point. Yeah. . Yeah. Even though you think you're doing well, you're now gonna crash into the side of a mountain because you don't know what direction you're going.
Rocky Lalvani: You don't know how high you really need to be. And even though you had enough cash, you still struggled. Enron had. . Hundreds of millions of dollars. Yeah. In cash in the bank when they went bankrupt. Mm-hmm. and belly up. So I think you have to understand all the dials. Our, what we do is we help people understand the dials.
Rocky Lalvani: We figure out the dials for your specific aircraft, your business. Mm-hmm. that are designed for what you need in your business and help you to then make better decisions in your business and take the next step. Awesome.
James Marland: Uh, what, that's all the questions I had about the business. So you're gonna have to like, carry it a little bit about what do you do?
James Marland: Like what, what, I love the example of the airplane because this financial thing can be overwhelming to people, but your story kind of like said, know your dials and I'm sure that's what you either do or teach people to do. So yeah,
Rocky Lalvani: we, we offer two services. Okay. So one, is it done for you? Right. . You, you don't have to worry about flying the plane.
Rocky Lalvani: You just show up. We tell you what to do. , you go about running your business. Right? Okay. The second is we teach you how to fly your plane. Mm-hmm. , so to speak. Mm-hmm. , we teach you how to run your business. We show you what the dials are. It comes with different levels of service. You can do it all on your own.
Rocky Lalvani: You can do it with us sitting in the seat next to you, helping you in guiding you through the process. or you know, for some people they want the one-on-one. They don't wanna learn, they just want us to do it. Mm-hmm. and that's fine. So wherever you are on your business journey, we have something for you.
Rocky Lalvani: Mm-hmm. to help you get to where you need to be. Cool. Uh, great. A great
James Marland: illustration. Um, and I do like the three levels of service. Meeting people where they're at. Um, before we, uh, get to our, one thing we want people to know from the episode, what, um, is there anything else you wanted to say about Profit First or, um, your, your services or
Rocky Lalvani: just anything we've talked about?
Rocky Lalvani: Yeah, so Profit First is not an accounting system. It's literally a cash management system that's very easy for entrepreneurs to use. You don't have to look at your accounting software. Most business owners look at their bank balances. It's mm-hmm . It's driven from you looking at your bank balances. We actually set up five different bank accounts, each with a purpose, and all you have to do is look at your bank accounts and see how much revenue came.
Rocky Lalvani: how much you have to spend, how much you have for profit, how much you have to pay for yourself. And we keep the, the money in there for taxes as well. So when the accountant calls and says, you've got a big tax bill, you just stroke a check. Mm. And as much as you don't like it, you face the accountant and you don't worry about it.
Rocky Lalvani: And, and life is good. Well, it's
James Marland: better than the alternative of scrambling Yes. To get that tax bill done. Correct. Just having that system in place. and living within your constraints. I think that's probably one of the bigger things you'd have to teach people and, and know, you know, what is your, what's the story your numbers are telling you?
James Marland: Guess what it's telling you, you, you can't do X, Y, and Z or you have
Rocky Lalvani: to do this. Correct. And I think most people spend their profits, they spend their paycheck and wonder why they're not getting paid. Mm-hmm. , and then they spend their tax money and scramble a tax time. And this, this makes it a lot easier to handle all those situations and be ready for it.
Rocky Lalvani: And, and that's basically what it, it, it, it's a basic simple to use system that anybody can do. Mm-hmm. and. You only have to spend a, a few minutes every month. Mm. And it'll at least keep you moving the right direction. Cool.
James Marland: All right. So, um, let's go to the, the one thing we want people to remember from the episode.
James Marland: I'm gonna, I'm gonna go first. So my one thing is I, I just love the illustration about how stories tell numbers, you know, and how experts can read those stories. Quicker and, and they just have the, the background to be able to interpret those things quicker. Like, I go to a mechanic when my car sounds weird, you know, I can't, I don't know what's going on.
James Marland: Uh, I go to a, a lawyer when I don't know about law. Things like accountants and like services like this. They
Rocky Lalvani: can look at your,
James Marland: they can look at your numbers. Rocky can look at your numbers and tell you what, what story is being. Given.
Rocky Lalvani: So, uh, uh,
James Marland: I see money, stories and numbers might be the title of the episode.
James Marland: I'm not sure yet, , but, uh, that, that was the one thing I want people to remember. How about you,
Rocky Lalvani: Rocky? So, at the end of the day, the, the biggest issue that we've seen with this system is people don't take action and implement mm-hmm. . And so we're gonna give you one simple action step. That you can do. I just want you to open up one bank account.
Rocky Lalvani: I want you to label it profit. And every month I just want you to take 1% of your sales. Mm-hmm. a dollar out of a hundred. You won't miss it. And put it in that separate account. Once a month, figure out what your sales are, multiply it by 1%, pull the money aside, put it in the separate account, and give it a few months and tell me what you think.
Rocky Lalvani: Cool. That's
James Marland: simple. I love simple .
Rocky Lalvani: Uh,
James Marland: so that's great. All right, uh, so Rocky, where can people find you online or, uh,
Rocky Lalvani: your webpage? So, I teach everything that we do for clients. We do it on the Profit Answer Man podcast. You can listen in there to, to learn how to do more of this if it's at all interesting to you.
Rocky Lalvani: Our website is, profit comes first.com. You can find our information there as well. Awesome.
James Marland: Very, very great. All right, uh, well Rocky, thanks. Thanks for being on the show. I really enjoyed it, and I think your, your stories and your illustrations, uh, just made things clear for me. Uh, thank, thank you for being on the show.
Rocky Lalvani: Thank you so much for having me, James. So this is James
James Marland: Marlon from the Scale Scaling Therapy Practice. Thanks for listening to the show, uh, the audience, you are, why we are here. If you have any questions, uh, about this episode, you can email me. I'll put the links in the show notes for all the books. Uh, have a good evening and we'll see you next time.
James Marland: , thanks for listening to the show. I do hope that you check out the links in the show notes there this week. Um, the, the March 20th, there's the Level Up event with the practice of the practice, and I'll be speaking about hiring, um, a virtual assistant and the behavior you need to see, questions to ask, and how to distinguish between bad, good and great candidates.
James Marland: Uh, it's gonna be awesome. It's one of my favorite things to talk about. So check that out. Check the links in the show notes. Also check out Rocky's items. profit comes first.com and also the prophet answer me.
James Marland: lipson.com is his podcast. It has over a hundred episodes, so he definitely has been doing this a while and knows what he's talking about. As always, the opinions expressed in the show are that of the host and their guests. It's not intended for tax or legal advice. You need a professional in those areas.
James Marland: Please hire a professional in those area. Thanks so much for listening to the show. I do hope you are getting some entertainment and enjoyment out of it. And, , I hope you come back next time. Please like and review this show., the Scaling Therapy Practice is part of the Cy Craft network. Have a good evening. Why I say have a good evening? I
Rocky Lalvani: don't know.