Profit exists in almost every business but many businesses can't find it. They say "How am I making all this money and barely making ends meet?" In this episode we uncover the problem.
https://www.pursuit-of-profit.com
https://www.instagram.com/pursuit.of.profit/
https://www.facebook.com/pursuitofprofit/
Welcome back everybody. It's another episode of Pursuit of Profit. I'm your cohost Chris Angel here with the nations coach, the nations coach... How about the nation's profit coach Leanne?
Leanne:
I don't want to be the nation's coach. That's not a good idea.
Chris:
That's a different assignment.
Leanne:
Yeah. We'll let somebody else handle that.
Chris:
I'd love it. So we're starting off a five part series.
Leanne: Yes.
Chris:
On some of the most common questions that you always get asked. And so first one is just going to... We're going to deal with the first question in this episode and then we'll go on into the next episodes after this to deal with the others. So give me... What I want to know is what's the first question that you get a lot of times from people?
Leanne:
Okay. It is basically, "Hey Leanne, how is it that I'm making all of this money and I still feel like I can't make ends meet?"
Chris:
Yeah. Yeah. I think I've asked that of myself many times. I'm like, "What? What is happening?"
Leanne:
Where did all that money go?
Chris:
Where's it going?
Leanne:
Yeah. So where did all the money go and why aren't we making ends meet? Okay. This is easy most of the time. So when I'm profit coaching... There is a process to figuring out the answer to this question. So we don't have time to go into the full process here, but one of the things that has to happen to make this discovery is not just as simple as saying, "Well you're spending too much."
Right.
Leanne:
Because if I said that to people, first of all, they would not continue to work with me because that is not a solution, right?
Chris:
Right. We already know that. I mean, I think we know that because we're like, where'd the money go? It's got to be my spending. I just don't know where that is. I can't see it. I'm...
Leanne: Right.
Chris: Whatever.
Leanne: Right.
Chris:
I'm confused.
Leanne:
So I say it all the time, I'm going to say it again. It has everything to do with the bell curve problem. On the bell curve problem is, we're earning, we're earning, we're earning, we're earning, and as we're earning, we're spending, spending, spending, and we're doing it at the same rates, right? It's up like this. And so the problem therein is that as our income rises so do our expenses and they just keep doing this thing so that we're always flatlining. And so the more you earn, the more you spend and the more you spend, the more you have to earn. So it's this vicious cycle. So when somebody says to me, "How am I making all this money and I still can't make ends meet," it has everything to do with the fact that that ratio is broken in your business.
Chris:
The ratio of my income and my expenses?
Leanne:
Mm-hmm (affirmative). You let your expenses rise at the same level that you grew your income. And I think it has a lot to do with the fact that entrepreneurs are hardwired and engineered to grow their businesses, right?
Chris: Yeah. Yeah.
Leanne:
And so they get into this pattern of, "Well, it just makes sense. I need it for the business. I need it for the business." And when I'm doing profit coaching, one of the agreements that I have to have with people is, everything is on the table. Nothing is sacred. Not your Facebook ad budget spend, not this, not this, not staff, nothing. Nothing is sacred except for the business owner and turning that business into serving them instead of the business. Instead of them serving the business. That has to happen. That's the sacred that we keep, but all the other stuff has to be on the table. So once it's on the table, then we can actually look at it and hold it accountable for return on investment. And it's really interesting how people process that and what decisions they make. It's never me. It's always them saying, "I don't know why I spend money on that. I've been meaning to cancel that for ever" or whatever. So you're making all this money, but you're spending it.
Chris:
I'm trying to picture myself do that. Right? And as I go, "Okay, well I've been meaning to cancel that," and that just brought in an extra 20 bucks a month or 100 bucks a month, depending on what the subscription model is. Whatever it is I'm paying for it. Unless I have a plan for that reclaimed money, I will find another way to spend it.
Leanne: Yeah.
Chris:
And I can do it. Actually, here's what's funny, I'm just telling you one of myself here, but I can actually spend that $20 five different ways the same day. I'm like, "Oh well, I just canceled that so now I can buy this." And then [crosstalk 00:04:21] the same day it's like, "Oh, I canceled that this morning. I can just buy this." So now I've actually, I've canceled a $20 membership, but I just bought $100 more in the same day of five other $20 memberships because I canceled the one, in some weird math in my head I'm like, "Well, I totally just made room for that."
Leanne:
Yeah, it's so true. And I've done it, too. Profitless spending happens in businesses and there's really nothing wrong with it, but what becomes wrong with it is when it leaves us upside down and we cannot pay ourselves what we're worth. I'm sorry, no amount of cool gadgets and gizmos that we can run through our business is worth that.
Chris:
I just want to go straight to action oriented. So I'm listening to this, I'm like, okay, you got me.
Leanne:
I caught you.
Chris:
You got me. You're speaking right to me, and I really do want to see a difference in the kind of money that I can keep versus what I've been keeping. I want to keep more. Where can I start, Leanne? Where do I go? I'm going to go home tonight while I'm inspired from this episode and I'm going to go, "Okay, Igot to start somewhere." Where do I start?
Leanne:
Open up your bank account, print off your bank statement for the last two months. Take out three pens that are three different colors and I want you to highlight everything that is absolutely what you consider crucial to the success of your business. Like if I don't have this, I am no longer in business. Okay?
Chris: Okay.
Leanne:
That's number one. Number two you... Second thing is I want you to go through and find all your BS expenses, and don't even try to tell me that those are all important. So let me just use examples from seeing what I saw today. I saw lots of eating out, lots of drinks with clients, lots of car washes, lots of stuff. Right? Those are BS expenses. They do not... The person was telling me, "Well, I spend that money because I'm wining and dining my clients." I was like, "No, you spend that money because you want to." Right? That's the truth. So you got to find your BS expenses. So look through, highlight them in another color. And what you're going to notice is that that color dominates every time.
Chris: Wow.
Leanne:
And then the third one is stuff that you're going to consider not absolutely crucial to your business, like your doors won't close, but things that are kind of super necessary. Good examples of that would be your staff. Right?
Chris:
Right, okay. Sure.
Leanne:
If you have people on staff. Another thing like that would maybe be your office rent. So it's just stuff that you consider to be bills, but they don't necessarily define whether or not your business is open or closed.
Chris: Got it.
Leanne:
So that's where you start, and you start getting really honest about the middle section and I encourage you to add it up. Add all three categories up and just take a honest look at that and ask yourself like, "What could I do with this money?" Like the guy that I worked with this morning, his BS budget overthree months, we painfully did this together, which is part of my process, because most people won't do
this by themselves, but-
Chris: Exactly.
Leanne:
... if I'm holding their hand, they'll do it, right?
Chris: Yeah.
Leanne:
So the guy today had $364 on average of BS expenses. I was like, "All right."
Chris:
On a month?
Leanne:
On a month. On an average month. And I was like, "What could you do differently in your personal life with $364?" His response was, "My wife really wants to have a house cleaner," and I'm like, "Okay, I get it." Right? So there's a way to look at those same dollars in a different context and so that's where you start.
Chris:
Listen, you say that and all of a sudden it's like, that feels really empowering to me. There's this difference of without what you just said, I would think, okay, I'll go through and I'll highlight and then I'll be like, "But I don't want to give that up." But then if I can reallocate in my head like, "Oh well, this makes mama happy." I think my wife would actually like somebody. She has a full time job and so it's harder for us with two kids and both of us working to actually have the house the way we want it to be. It just sometimes feels like a whirlwind. Like, "Oh my God, that'd be awesome!"
Leanne:
Mm-hmm (affirmative).
Chris: Right?
Leanne: Right, right.
Chris:
It's amazing. Okay. Yes. I want to stop doing that so that I can have this lifestyle upgrade. Right?
Leanne:
Yes. That's what we want. That's what it's about. So that's how we approach that from the get go.
Chris:
Okay, I got it. So- Go ahead.
Leanne:
I was going to say if you're listening to this and you haven't already, you really should go and get my five money mistakes that you are currently making. This is on there, and so it actually has a little more like bullet point details that you could grab and then actually feel like Leanne is walking you through it because I wrote it, and it will help you walk through that exercise.
Chris:
And people can find that where?
Leanne:
pursuit-of-profit.com and just right in the middle of the screen, ebook.
Chris:
Got it. Okay, good. And then if people... if you're a regular listener listening to this you know, and if this is your first time, people can actually schedule a profit discovery call with you. Right? Which kind of initiates this process, the free call. Where do people go to schedule a free call with you?
Leanne:
They can do it right at the pursuit-of profit website, there's a button there, or they can go to profitdiscoverycall.com and they can book it there.
Chris:
Perfect. I love it. This is good. I'm excited for the second question coming up in the next episode. Actually, all five of these questions because they're, one, they're hilarious, but two, they're hilarious because they're my questions. So they're questions I have.
Leanne:
I'm glad I'm here for you, Chris.
Chris:
I didn't give you these questions but they're my question for sure. Leanne, thanks for your time, thanks for your wisdom.
Leanne:
Next time I'm going to-
Chris:
We'll catch you next episode.
Leanne:
See you next time.