Money is very personal, which can effect how we behave with money as entrepreneurs. In this episode we dive deeper into the challenges and keys to being great with money.
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Chris:
Hey everybody. Welcome back to another episode of the Pursuit of Profit. I'm Chris Angel, your cohost here with your hostess of the mostest, LeAnne Ozaine-Smith.
Leanne:
Hello, Chris.
Chris:
Hey, I feel like a boxing announcer or maybe an MMA fighter announcer.
Leanne:
I actually love that. Give me an announcer when I walk in the room, usually it's my loud walk that gives me away.
Chris:
Ah, right, right.
Leanne:
As I walk in the-
Chris:
Hardwood floors.
Leanne:
...wood floors around here and heels. Everybody's looking at me. Having you announce me kind of like in the Victorian era.
Chris:
Okay, well we can start making requests. Like could you do a Morgan Freeman voice or some kind of a British accent.
Leanne:
If nothing else, we're crazy. Right?
Chris:
It's good. Well, listen, the first thing I want to say to you before we start this episode is that I've really enjoyed the conversations we've been talking about money because I think there are a lot of people that talk about money, but we don't actually talk about the feelings behind it and all the stuff that kind of goes on. And I know we've already talked sort of green room time about what we're talking about today. But listen, I think that the ticket to freedom is getting in touch with our emotions because that impacts our behavior. And your whole thing is like how you behave with money, so super pumped about what we've done so far and looking forward to even more.
Leanne:
Me too. Me too. And you bring something out of me that's wonderful and I love your feedback, so I want everybody to hear what you have to say as we do this.
Chris:
Yeah. Thanks. This is good. Go team. High five.
Leanne:
Go. All right.
Chris:
Today we're talking about an entrepreneurs rights with money and I want you to unpack this a little bit. What do you mean by an entrepreneur's rights with money?
Leanne:
Well, what I mean by an entrepreneur's rights with money is not actually what their rights are.
Chris:
Yeah. Or maybe how do we get even to that as a title?
Leanne:
How do we get to that? Yeah. We got to that by talking about what entrepreneurs do with their money and how there's kind of this entitlement around it. And what happens when we come to the table as a business owner with this entitlement about a business bank account and what that account is allowed to do, and what it's supposed to do becomes a very interesting question.
Chris:
Right.
Leanne:
I actually think if we back it up before we talk about what I see in my practice with what people do with their money in a lot of times I hear kind of, and I know we talked about the screen room time, like there's this like teeter-totter of people don't actually take the time to think about what they're going to do for profits. In fact, just today I did a profit discovery call with these two guys that are partners and I actually asked them like, "So, when you guys decided to become partners and do this business together, was it so that you could like be millionaires together? What was it?" And they were like, "No. We wanted to create together." And I'm like, "Yes. You wanted to create together for what purpose?" And they said, "Well, we want provide for our families." And I'm like, "Right. So, you did this to be profitable." And now if we fast-forward eight, 10 years, which is where they're at, now their question on the table is, "Well, we think there's profit. We don't actually know. We pay ourselves. We pay our bills, but we don't actually know what we should do with profit at this point." But it was super interesting because you know how I'm always on my soap box about how you can go to your CPA, and they're not going to help you with this.
Leanne:
So, I asked these guys like, "So, tell me about your relationship with your CPA. How do you get financial advice from them?" And they're just like, "Well, they just do our taxes." And I'm like, "Right." So, it's a really common thing. It's the thing we talk about every time that we have somebody that started a business using their talents, their skills, their gifts, whatever, to do something financial. Maybe it was provide for their family, but it's to do something financial. So, I'm finding that people don't think in terms of profit and loss. That's not how entrepreneurs think.
Chris:
No.
Leanne:
They think about money in and maybe money out, but they don't, unless somebody sends them a profit and loss for the month, they're not even going to think that way. So, the two ways that I see people thinking about their profit is more in terms of what they inherently do with their profit, which is going to lead us to talking about that entitlement thing that goes behind each. So, we're going to frame the conversation today around this idea of what are the two avenues that I see people do inherently, what are their behaviors with money, with the excess money that isn't accounted for for bills, right?
Chris:
Yeah.
Leanne:
So, first thing that we see people, you're one of these, this is you. And it's me sometimes too. First one is they want to expand the empire, right?
Chris:
Yep.
Leanne:
So, they're like, "Hey. I can't take this money out of my business. I want to put it into something." When you think about your business, Chris, what do you expand the empire? When you think about what you spend money on, what does that look like for you when you expand the empire?
Chris:
Yeah. A lot of times it's courses, training, right? Because the more I learn the further down the road I can go. It could be coaching. Sometimes it's technology because I need tools and things to help me expand technology, like SAS type services, software services, different things that I'm... All that. And it's all in the name of this is what my business needs to grow.
Leanne:
Mm-hmm (affirmative). That's perfect. And when I see that, and we talk in a profit conversation, and we're framing like how do you hold those expenses accountable for return? When we start having that conversation, what I get is what I call the blink, blink, blink. It's like, "I don't know," blink, blink, blink.
Chris:
Yeah.
Leanne:
And that's okay that people don't know. But it comes around like when we started this a couple of weeks ago, like started this particular conversation, we were trying to kind of get to what is the point of profit? What is the real purpose of it?
Chris:
Right.
Leanne:
Well, that's not for me to decide. At the end of the day, a business owner is going to decide with whatever money is left over, I'm going to do this, or I'm going to do this, or I'm going to do a whole bunch of things. But what's important in that conversation is understanding that if you choose to go down that road of expanding the empire and you fuel your profits back into the business, then much like, I don't know, we both do lots of exercise, so much like time under load, you end up building a really strong muscle of business reinvestment, business reinvestment. That's always what I do. It always goes back in.
Chris:
That's good. Yeah.
Leanne:
So, it becomes very difficult when you're like, "Well, that's my habit with money. That's my default behavior." And it's very difficult to get somebody out of that mindset where they're like I... People actually think they need to do that. It becomes almost obsessive. Like that's the only way my business is going to grow. It's the only way. It's the only way. And it's not the only way. Right? There are other financial ways to accomplish your financial goals than just constantly reinvesting in your business.
Chris:
Right.
Leanne:
So, that's one way. That's one thing that I see entrepreneurs do every day. Is expand it. I would actually say that's probably what most business owners do.
Chris:
Yeah.
Leanne:
Especially since so much marketing is tailored toward people to buy courses, or hire a coach, and I actually think it has a lot to do with the fact that entrepreneurs, myself included, are hardwired to grow their business.
Chris:
Mm-hmm (affirmative). Yeah.
Leanne:
And you just grow your business. Like duh, that's what you're supposed to do. You're supposed to make more money next year than you did this year. Grow your business, grow your business. But the problem we've bumped into, and I'm never going to stop talking about it, is you grow your business and then you grow your expenses with them, so your margin never achieves its potential. And so, the profits of the business gets swallowed up and now you have to make twice as much revenue in a month just to cover your basic expenses of all those things that you just talked about that you would buy. Right? Courses, SAS, tech stuff. So, now you have to make twice as much money to crack the nut every single month.
Chris:
Right.
Leanne:
And we don't necessarily have twice as much net revenue on the end of that that we can then make choices with.
Chris:
Yep.
Leanne:
What are your thoughts?
Chris:
First of all, I'm super convicted, so I'm over here just like licking my wounds. Yes. You totally nailed it.
Leanne:
I'm sorry.
Chris:
No. Of course not. It's so good. It's so good. I would think the thing you said I like the most is the habit that it becomes like it becomes muscle memory to just reinvest in the business. We don't even question it. It's just like... I mean, I love my wife to death, and she has become super comfortable with my risk tolerance in the ways that she knows I'll take care of us.
Leanne:
Yeah.
Chris:
And she over time has just come to trust whatever I do with business. It wasn't always that way by the way. But I think sometimes if she looked at like, "Dude, you spent how much for what? Where does that go? And Okay. I'm going to trust you now but there's probably some great things that could be investigated that for now are just a habit."
Leanne:
Yeah, for sure. And do you remember the story I told last week about walking in to my financial advisor's office and handing them these checks from profit? And how disappointed I was that over time I pulled all of that profit back into my business even though I intended to send it far away from my business.
Chris:
Right.
Leanne:
That is something that is an experience that was a behavior of mine that I probably will spend the next 10 years processing. How did I burn through almost $200,000? How did I do that when that was profit that I sent away and I wanted to see it double?
Chris:
Right.
Leanne:
So, it happens. We get busy growing our business and it's really difficult because we are are human beings and human beings have a story that they tell themselves, most human beings. A story that they tell themselves about who they are and what their so called rights are with money.
Chris:
Yeah.
Leanne:
So, I see this... I'll bring my financial planner to the table. I see this when people come to me, and they want me to be there, help them with their stuff. "We want to send our kids to college. We want to make sure we have money saved for retirement. We want passive income." Whatever. When they come, there's this conversation that's very difficult because we've got husband and wife usually, and they are coming from two totally different paradigms about what their rights are with money. So, one of the questions I ask people, which totally throws them off because they're not ready for it, is I say to them, "Okay. Tell me this. Who turns the lights off in the house?" And they'll look at each other, and then they look at me, and so usually the husband, one of them will say, "I turn the lights off." And I was like, "Who turns down the air conditioner or the heater?" And then one of them will say, "Oh, I do." And so, what happens is the couple talks about their natural behavior in a household about a very small financial decision. And that small financial decision is, and this is true in my marriage too. More fights on this than ever. So, the small financial decision comes with a judgment attached to it. And that judgment is, so I'll pick on my household because it's a reasonable example.
Chris:
Okay.
Leanne:
I contribute financially to our family, so does he. So, why is it that if I want to walk through the house and leave every light on in every single room in the house, which I contribute financially, why is that a waste of money? Why? He sees it as a waste of money. I'm like, "It's not a waste of money. I want to spend my money on lights. I want to spend my money on heat in the summer. I want to freeze my ass off."
Chris:
Yeah. Right.
Leanne:
Turn the air conditioner on, right? But he still sees it as a waste of money, and with that comes an entitled mentality that I am wrong to want to spend money on lights, electricity, things like that.
Chris:
Yeah.
Leanne:
We could use more examples, but in my practice with people, real people, not just business owners like husbands and wives, this thing comes to the surface. And I am telling you right now that this entitlement, what we believe the story we tell ourselves like, "You better turn the lights off, or you better not waste electricity, or you better not waste water," whatever it is, there's a story financially that's running in the mind of every human when it comes to their money and entrepreneurs bring it to the table. And it isn't until that story breaks down for them, and they're like, "How did I make all of this money and where did it all go?" That they're in a moment of pain where they're just like, "Geez, what happened?" Right? That maybe they're willing to look at their story and look at what their behavior with money is, so they get a different result. So, when we talk about entitlement, I think that entitlement, like it's my right to buy every piece of technology that I want. I must invest into that course or whatever. I think it's deeply rooted in the financial story we tell ourselves, not just as a person, but as a business owner.
Chris:
I also think too, there's the story and under the story is the pattern. You mentioned earlier in the green room time that when we spend, we spend emotionally. A lot of times we can experience positive and negative emotions and like I've experienced in the past, I will spend money to feel powerful, right? Or to prove that I have power because I can afford this, I will buy this, I will keep the lights on or I will buy this SAS product, or I will do whatever because emotionally it's medicating something for me. I don't feel successful over here, but if I invest in my business, at least I have a feeling of control or power in the moment by spending that money.
Leanne:
Yep. That's so honest.
Chris:
And I think that goes... Well, yeah.
Leanne:
Thank you for that.
Chris:
And I think that goes with the rights, like this is my money. I have a right to spend it, so I'm going to spend it. Dammit. Watch me. Right?
Leanne:
Yep. Yep.
Chris:
And I think that's-
Leanne:
And then what happens at the end of the year?
Chris:
Right. And then-
Leanne:
Or the end of the month?
Chris:
Where did my money go? Where did it go?
Leanne:
Where did my money go?
Chris:
That stuff.
Leanne:
Through that entitlement of, I'm going to expand the empire and this is what I'm supposed to do is it actually really hurts the entrepreneurs and it hurts families too. But I don't believe that we shouldn't invest in our business. I'm always, always going to talk about we have got profitable spending in business. We have profit list spending.
Chris:
Right.
Leanne:
And I honestly, most people don't know which is which. They don't know the up from the down because there's so mostly connected to the power in the purchase.
Chris:
Yes. I was just going to say that.
Leanne:
There was a moment of power.
Chris:
Well, yeah. No, it's that. It's the entanglement of emotions in the spending. Like when you are so attached to what you're spending on, it's like when they say really good investors, like real estate investors, don't get emotionally attached to the property. The property is a tool to produce cash flow. Right?
Leanne:
Right.
Chris:
It's the ones who get emotionally attached to the investment that end up doing something to hurt themselves in the investing process. And I think it's similar, like with money, if you're going to profit less spending versus profitable spending, just untangling the emotion from it will allow you to make a more objective decision about that money versus spending it out of righteousness or entitlement versus spending it-
Leanne:
Or for power.
Chris:
Or for power versus spending it because it's a good decision in your business.
Leanne:
Right, right. That's great. Perfect. I love your recaps. So, the second one, let's talk about that really quick.
Chris:
Oh, yeah. Good.
Leanne:
The other thing I see people do is they try to expand their lifestyle. And this shows up in really interesting ways. Expanding lifestyle means like, "Hey. We use business money to buy $300 dinners because we can write it off." That shows up. Or, "We are going to go on a really extensive business trip-
Chris:
Quotes.
Leanne:
Air Quotes. Because we can use business money and write it off, so that we see some of that. But then I also see people who are the opposite of you, where they have that muscle memory of invest in, and they have got the pressures from home life or something like that that's coming at them. And home life is constantly coming in and taking the revenue of the business out even if it's a bad business decision, right? I like to help people push money across the table, like get it out of their business so that they can live life to the fullest.
Chris:
Right.
Leanne:
But this is not what I'm talking about. I'm talking about we sometimes dip in and the family needs supersede what's profitable for the business and so money goes out. I kind of tongue in cheek call that embezzlement like you're embezzling from your business. Stop it. It doesn't work for you. But I get why it happens where it's like, "Hey. We need money to cover the nanny. we need money to cover whatever." Or, "There's a big trip, or there's medical bills," or whatever, and so the business account or the business itself then becomes the second family checkbook.
Chris:
Mm-hmm (affirmative).
Leanne:
I know that maybe you have never been in that place, but I'm telling you a good portion of the people-
Chris:
No. I've been there.
Leanne:
...I see come through and that is... They're struggling with that. They don't know how to be like, "Well I can't turn that off. I've got to take care of my family."
Chris:
Right.
Leanne:
And it's not entitlement, it is like duty and obligation. And I think where we find an entitlement and that kind of spending where money is just going out, out, out whether it's good for the business or not, is that place in the person's heart where they're just like, "My first responsibility is to my family and my business is just an asset to the family."
Chris:
Right.
Leanne:
But in reality, the family is manipulating the business and actually stealing from it in many ways because the business owner doesn't have a very clear distinction between where their business ends and their family begins. And guess why? Oh, my gosh. Ding, ding, ding, ding, ding. Why do we have this problem? It's because that business owner and most business owners don't know what is profit. They don't know what it is. They don't know how to get it except to earn more. But if we don't address either of these situation of muscle memory going this way or muscle memory going that way, then we end up with a very confused and frustrated business owner who doesn't have... They're not achieving their potential. They're just not.
Chris:
Right. Yeah. And I would say that they have... And it's perfect because the patterns of behavior up to this point have been by default. We've spent emotionally, we've spent where we felt powerful. We spent because we felt like it was what was needed to grow the empire. We spent because it's what our family needed out of duty. And so, all of our spending habits up into this point that we want to... Up until the point where we see that there is a problem and if we want it to be different, we're going to have to make a change. All of that up to this point is the pattern.
Leanne:
Yes.
Chris:
And that's why we are where we are.
Leanne:
And I think, I'm looking at my notes here, I think it also comes down to momentary happiness. Like okay, I know somebody who is just constantly evading his wife like, okay. And then that moment of just keeping her happy makes the pain go away. Or if we're spending to have power like Oh that moment of power making the pain go away, but then it comes back, right?
Chris:
Yep.
Leanne:
Well, I'm not really here to talk about pain. What actually ends up happening is we spend again, and again, and again, and here we are in this moment and that is why. [inaudible 00:20:37].
Chris:
Yeah.
Leanne:
When people come to this place, this girl, this company, there is a different way to manage money. It's called the spend on purpose method where we start by building a profit plan, and we create accounts for profitable spending and profit list spending. And we have a very clear plan on one piece of paper that when money comes in, here's where it goes, right?
Chris:
Yep. Yep.
Leanne:
And at some point, that happiness comes in by feeling peace with the business, and peace with where money comes from, and instead of this momentary making the pain go away, momentary making the pain go away over here, instead becomes centered, and we're at peace. And then we can think clearly, and we can make profitable decisions, profitable relationships, profitable marketing decisions, just profit outside of money. And without that distinction, you'll just do more of the same.
Chris:
Right.
Leanne:
Forever and ever.
Chris:
Yeah.
Leanne:
And your bank accounts will be empty, and you'll continue to invest, not you but we, the collective entrepreneurship will get to be 55 and 60 years old. And we walked away from a traditional job where we didn't have a 401k, and we're going to wonder how we're going to do this, and then we're going to try to sell our business, and find out that we invested, and invested, and invested with the belief that our business had unlimited potential because it does. But then, in that moment, we only have 10 years left to save and it is a crisis at that point. So, we need to love ourselves, and our families, and our businesses enough to stop the chaos and try something different, so that we have full bank accounts, we're profitable, we have happy spouses, and we can actually expand the empire, and we can expand our lifestyle, but to do it profitably. That's all. It's about what we do and what we don't do with money. Rudimentary but...
Chris:
And it's about and with... So, this perfect way to tie this off at the end here is that there is a moment when you get clear that if you don't have a plan and your current money behaviors aren't setting you up for success, there's a moment where you decide, "I'm ready to pursue something different. I'm ready for a different way than what I've done the last." Listen, I've been in business for 17 years. I'm ready for a different way than what 17 years has set me up for. At some point guys, you have to get that if you haven't done it right in 17 years, the next 17 are going to look a lot like the same, like the past, right?
Leanne:
Yeah.
Chris:
You've got to get to that space where you're like, "I have to make a change." And I think that's what your profit discovery call does, is you actually start to go into to the situation and look at it just like you did with those guys, whatever those clients you had, you just look at what's so.
Leanne:
Yeah.
Chris:
So, guys, if you're interested in that, you need to have that conversation with LeAnne because that is what she's... She's a ninja at that.
Leanne:
Thank you, Chris.
Chris:
LeAnne the ninja. So, if people want to sign up for a free profit discovery call, maybe they want to get the process started and see if it's a good fit or not, where can they go?
Leanne:
Profitdiscoverycall.com. And we'll schedule a 40-minute consultation where somebody talks to me about what they're doing with money and their business. And even if you're really doing well, like the couple, the people that I talked to today, they're doing great, but they are spending their profit, and they're spending their raise. So, let's fix it, right? So, you don't have to be in dire straits to need a different way of pulling profit out of your business. And you don't need to hire a new bookkeeper because that is not going to fix it.
Chris:
Oh, man. It's so funny. All the places we go looking for answers. Maybe I can share this one last life lesson that I've learned recently. For six years I've worked out, and I've bought programs, and I've tried different dieting programs, I've done all sorts of different things to figure it out. And I still, I've gotten stronger and I built more muscle, but I still don't have the physical result that I've been trying to produce.
Leanne:
Right.
Chris:
And what I realized was I went and last week actually, just last week, I hired a trainer who does physique competitions. They train for physique competitions where you wear board shorts, not banana hammocks, and you-
Leanne:
Oh, thank God for that.
Chris:
Yeah. And they get you ripped, they get you ripped for the show, right? And I just hired the trainer. He told me what to eat, and he works me out. I don't have to know what I'm... I just show up, and he makes me lift stuff, and I don't even know what and why. It is the most freeing thing to not have to know why and to not have to figure out all the things he just tells me and I go do that. And so, what I discovered in that was there's... And listen, I had been a coach for a long time, but the power in a coach who just goes, "Do this, do that." And you don't have to find the answer yourself, you just have to be coachable. Oh, my God. Like that.
Leanne:
Mm-hmm (affirmative).
Chris:
Life changer.
Leanne:
Changes everything.
Chris:
Yeah. And that's what I love that you're doing with profit coaching and profit discovery calls. It's like you guys, it doesn't have to be so complicated and you don't have to go read 10 more books on money. Just get somebody in your life who's been there and can show you how to get there.
Leanne:
And cares about you. Right?
Chris:
Yeah.
Leanne:
The overall thought is everybody says to me like, "My accountant doesn't care. They just want to do my tax return." It's not that accountants are bad people. It's just they just want to work with numbers and spreadsheets all day. The difference is that I really care, and I really want to see, I want to know the numbers and I want to know the behavior so that we can help somebody change their life financially. So, profitdiscoverycall.com. Let's do it.
Chris:
Awesome. LeAnne, another great episode. Thanks for your time.
Leanne:
Great [inaudible 00:00:26:33].
Chris:
Thanks for listening.
Leanne:
Thanks, Chris.
Chris:
See you next time.
Leanne:
Bye.
Chris:
Bye.