Ron Saharian co-founded Profit First Professionals from Mike Michalowicz's basement with eight founding members, and turned it into a global organization operating across 40 countries with 19 niche book derivatives. In this episode, he breaks down why most business owners are unknowingly paying themselves last, how flipping one simple equation can transform your cash flow, and why building a sellable business starts long before you ever think about selling.
Episode 22: The Profit First System That Changes Everything with Ron Saharyan
Most business owners work harder than ever, grow older, add customers, and still wonder where all the money went. Sound familiar? What if you turned the tables and considered a different option: What if profit wasn’t an afterthought?
In this episode, co-hosts Zach and Mike sit down with Ron Saharyan, co-founder of the Profit First movement. For decades, entrepreneurs have been taught that profit is whatever remains after expenses. The problem is that there is rarely anything left over. Our conversation explores a cash flow system that helps business owners pay themselves first, create clarity around their finances, and make better money decisions.
Business finances don’t need to be complicated. Instead of drowning in reports, dashboards, and financial jargon, the focus is on creating a system that makes money visible and purposeful. The Profit First method works across industries and at any stage of your business development.
Ron is generously donating ten copies of his book, Profit First, to the first ten people who email us at EMAIL ADDRESS NEEDED.
“Profit isn’t what’s left over. Profit should come first.”
“By living everything that we’ve taught and do teach, I know it works.”
“Get good at trying to get good.”
“If you can’t run your own business well, why would you buy someone else’s?”
Ron Saharyan is the co- founder of Profit First Professionals. Since starting Profit First Professionals in 2014 from the basement of Mike’s house, Ron has implemented, certified, and taught Profit First to hundreds of accounting, bookkeeping, and coaching firms around the globe.
Ron is an expert in sales processes/systems, hiring, scaling, and operations. Ron is also known as “Obie Ron” throughout Profit First Professionals for his business acumen.
Ron is an avid sports memorabilia collector and car enthusiast. He is married with a daughter living in New Jersey, USA. Ron is also an investor and real estate developer.
For Investors & the Fund – Learn how the Fund works and book a call
For Borrowers & Deals – Get funding and support for your next investment
[00:00.3] The key to running a successful business is pretty simple as, the owner, the leader. You gotta do what you say you're going to do by when you say you're going to do it and do it 3% on expectations. You do that, you're going to be a rock star, employee, owner, husband, wife, whatever.
[00:16.6]
That simple. Most, people think saving money is the answer, but the truth is saving only gets you to zero. Join Mike and Zach as they flip the script from saving to earning from zero to unlimited potential.
[00:33.2]
Welcome to Save to Zero. Hey everybody. Welcome to episode number 22 of the Save to Zero podcast. Mike and I are here with Ron Saharian who is the co founder of the Profit first professionals group, which if you're familiar with the book Profit first, this group is what teaches and helps businesses use the principles that are in that book.
[00:55.9]
Ron, welcome to the podcast. Thanks for coming on. Awesome. Zach. Hey Mike, good to see you. Thanks for having me as a guest. So I know you. I was excited. I'm, excited. Let's go. This is going to be awesome. And I know you do a lot beyond Profit First. We were talking a little bit before we started recording about Flex Space and all these other things, but Profit first is probably one of the things you're the most known for.
[01:17.0]
So for anybody that's not familiar, can you give us a 50,000 foot overview for the concepts that the book teaches and how businesses can apply them? Absolutely. And I have 10 gift books for your audience. So, when this episode's over, the first 10 to email you guys to say, give me a copy of that Profit First.
[01:36.5]
Mike, Zach, reach out to me. I'll gift them a copy on your behalf. Okay, awesome. And so let's. Profit first is a system. Okay? Profit first is not accounting. It is not bookkeeping. It is a system, a business system. It's a cash flow business system that resides between financials, which are historical documents, and forecasting, which are hopes and dreams. Okay?
[01:59.5]
Profit first looks to work with the business owner to provide cash flow clarity to ensure that the business owner is paying themselves first, has money for Uncle Sam because they're going to be profitable. Even if that profit is 3, 3.5%. That business owner can pay down their debt.
[02:15.6]
They could celebrate the health of the company or they can hire. Okay. What Profit first does is. We're all familiar with sales. Mine is exp. Equal profit. Okay, Sell, sell, sell. Manage your expenses. Whatever you got left over, that's what you're paying yourself with.
[02:31.7]
Leftovers. Think about that. Structurally, first is important. What comes last is an afterthought. When Michalowicz was picked last, that, kickball, okay, that meant he wasn't good and undesirable. He wasn't picked last, by the way.
[02:47.7]
But I'm just saying. So what we've been doing behaviorally is saying profit is an afterthought. Profit is, is crumbs. It's leftovers. We flip the equation and we say sales minus profit equal expenses. That revolutionary flip of the equation makes it all.
[03:06.6]
And what that profit stands for, that capital P, isn't just profit. It's ensuring the business owners paying themselves. Yes, profitability, yes. Money for Uncle Sam, but also for mission, value, purpose. Right?
[03:23.1]
And so what it is is a cash flow system that over time, swings the percentage of money that's going out the door and expenses into the business owner's pocket. And profit first professionals are able to architect the system to not only eliminate the pains, but achieve the wants. Right?
[03:41.7]
And so my organization certifies accounting firms, elite accounting firms globally, on this methodology. So while it is, simplistic in nature, we're just taking a predetermined percentage of money and putting it in a bucket. Right? The devils are in the details.
[03:58.1]
So, I ask all of you, one, if you're open to this system and you haven't had the book, reach out to these guys, I'll give you a copy. Two, if you are experiencing profit first and it isn't working for you, then I suggest you reach out to a profit first professional. You may not be doing it properly.
[04:14.9]
Done properly, it will work in any industry, in any domain, in any country, in any sized organization. I gotta tell you, I wish I had known about that. My first two companies, I was always paid as an afterthought.
[04:31.2]
And sometimes that's very painful because I didn't give myself much of a thought. Sometimes, it's true. And, here's the thing. A lot of people say profit first restricts growth, but they don't understand. You can architect it to, plow money back into the business. You can.
[04:47.6]
We're not against taking loans. Loans can be good, but they have to be purposeful. Right? And so, it's not all about restrictions, friction. It's about clarity. And when you have clarity and you have the right data and you're assigning dollars, permissions to go to specific people, it makes that clarity a lot easier to make business decisions financially. Yeah.
[05:08.9]
It's all about being intentional with where you're spending your money. Right. Otherwise you're yeah, exactly what I've got left over, that's what I'm going to pay myself. And maybe some months that's nothing. Maybe some months it's negative. Which, you the travesty out there. Yeah.
[05:24.1]
23% of businesses under 25 million are. Check to check. That means people in our audience to the right and to the left, they're probably suffering if they're hearing my voice. This is an opportunity for them to, you take a step forward by embracing this. We know the path is not going to be clear.
[05:40.7]
It's going to be new, it's going to be difficult. But this is an opportunity that millions have taken and have embraced and have had great success with it. Can you explain? I understand that we've got. You guys are the, training organization, the lead organization, and you work with elite accounting firms.
[05:59.8]
But before we came on, you talked about how you have people that niche down into specific markets and they write derivative, books or books. So can you explain that a little bit? I'm a big believer in niche specialization with any industry that you're in.
[06:17.2]
Previous to this, I was in staffing and I specialized, specialized in media and entertainment. IT focused, but media and entertainment, because that's what I had genuine curiosity in. And so niche specialization, it's like being, the cardiologist versus the general practitioner.
[06:33.8]
The general practitioner has to, you gets whatever's coming on in. They got to deal with all these viruses, all these other things, all this stuff coming in, right? Then you have the heart surgeon where people will seek that guy out. Okay, well, you in order to really get that specific, you gotta niche down, you gotta understand the logo, you gotta understand the systems and processes.
[06:55.7]
So what we have, curriculum is where we take the accounting firms through this niche specialization process and turn them into experts. And we have successfully written 19 book derivatives, or maybe 18 book derivatives. Think of the dummy series.
[07:11.8]
So you can Google profit first for industry. So profit first for law firms, profit first for contractors, profit first for Cairo, profit first for xyz, pdq. And so our members, right, we take the trusted advisor and we turn them into the authority.
[07:30.2]
Sometimes the authority wants to be a celebrity. We help them write a book. Interesting. Okay. So when they're working with the accounting firm, most people are used to, small companies are going to give their receipts, they're going to get their tax return.
[07:48.7]
Hopefully they're getting their monthly PNLs and are reading them. Can you dive a little bit into the detail on how you guys get them to understand their books and understand what they're doing? Maybe a little more detail. Yeah. So profit first is not accounting or bookkeeping.
[08:06.8]
And we don't stress, teaching our members how to teach people how to read their financials. We teach them profit first. So our members aren't bogging companies down with fancy dashboards, graphs, KPIs, stuff like that.
[08:22.1]
What they're doing is architecting the cash flow that leads to conversations. Okay. And so, that, that is kind of the way that the smaller businesses can afford a fractional cfo.
[08:37.2]
Okay. Is what we teach is to have frequency of contact, frequency of strategic profit conversations woven into the framework of the contract. Right. What is desired results that you want, Mike, from our relationship? Let's figure that kind of stuff out.
[08:52.7]
Are you growth minded? What stage of your business are you in? Right. What are you looking to accomplish? What are the systems do you have in place that'll enable you to accomplish this? What does your cash flow clarity look like? So we take a different approach to teaching financials.
[09:10.8]
Okay, so it sounds to me like you're going to put it in language that I can actually use. And it's not theory. I'm going to look at it and I'm going to say, okay, now I understand why it's going in these buckets. And it isn't just some theory. And I look at my tax return and say, okay, it must be okay. That's not what it is at all.
[09:27.5]
It's a matter of, okay, you're going to put money as this, this, and this, and this is why. But you got to tell us where it is you want to go so that we can architect it for you. Am I getting it? Absolutely. You've nailed it. Okay. It is all your money.
[09:43.9]
And we're just, parceling it here, there, wherever. But financials are very important. Right? The thing with financials, though, many times the business owner gets them and they gloss over them. They don't understand them. And 30, 60, 90 days have gone by, shit already happened. Right, True. Yeah.
[10:02.6]
Right, right. It's already done. You already figure it out. And so with Profit first, this again, this is a system. There's ebbs and flows, okay? And so basically what we do is take a predetermined percentage of money and move it into a specific bank account with a purpose on the 10th and the 25th, two times a month.
[10:24.8]
That's the ebb in the flow. Money comes in. Bills are due on the 15th. Great. Money comes on in, Bills are due on the 30th. Now with profit first, I'm on that rhythm. That wave is coming in. I'm seeing it. And if it's a small wave coming up to the 15th, and I'm a little short. Whoa.
[10:43.5]
What's going on? Did we lose something? Similarly, the month continues. Wow. What happened, Ron? Did you do a marketing event? Did you double down on something? Right, that's the awareness and the frequency and the clarity that you want as a business owner and a bookkeeper to say to you, mike, okay, you're trending up, you're trending low.
[11:06.8]
You're. Listen, historically, you know, week over week over week, you're going down. It's an early warning system as well. And it's an. It's an also a relief valve because you're going up, going up, going up. You get to gamify it. You get to pay yourself more. Right.
[11:24.0]
You get to architect culture in your business. And I could go on and on because I love this stuff so much. No, you keep going. Because this is an education to me as well, because I know people. I know David Richter, who works, in the real estate space, with Profit First.
[11:43.6]
And I didn't know that you had. Yeah, I didn't know that you had other derivatives. I noticed. I heard you say, lawyers, contractors, chiropractors. It's very interesting that it niches down, but it makes complete sense, because I've heard this before.
[11:59.1]
You get rich in a niche. Well, it also was a great business strategy for a revenue stream. Right. I never thought we were thinking about, how could we expand Profit First. Right. How could we expand it globally? And so we expanded it globally by translations.
[12:15.4]
There's 40 other. There's 40 translations out there. Then added to those translations, we're I don't speak any other languages. But we figured out how to do it, how to spread the message. Okay, so we did that. Then one of the members actually was hey, what?
[12:31.7]
This is great, but I want to write a specific one. I want to really, really, really apply this and tweak it and do all this great stuff. The framework remains the same. But how you approach Profit first with a nonprofit church and ministry is different than you are with a brokerage firm, of course. Interesting. Yeah.
[12:51.0]
Yeah, right? So, yeah, that's where the derivatives came on up. And so it started with Profit first for tradies out in Australia, then It became more and more and more and more. And so profit first for retail is coming on out soon. A bunch of other ones, too.
[13:08.8]
So if businesses are looking to expand and you have ip, okay. Right. Well, why not translate that IP into another language? Why don't you see if you can replicate that? Why don't you see if you can niche it down and, circulate it across the globe in different places? The world is flat.
[13:24.5]
I mean, not according to Kyrie Irving, it is, but technically, What I mean. We know what you mean. Yeah. It's a lot easier to do business globally these days than it has ever before. Right. And so, but then you're going to get into currency exchanges and you're going to get into patents, then you're going to get into trademarks, then you're going to get into all this other stuff, stuff I didn't know I was getting into.
[13:52.8]
So when you guys started this, you said you started in Mike's basement, and then from there you've grown into this organization. The name, as you know of the podcast, is Save to Zero. And our focus is not on saving, it's on growing.
[14:08.0]
Because you can only save to zero, but you can grow infinitely. So kind of give us again a 50,000 foot view of what it was like in the iterations as you started to grow, you got to a certain point well, wait a minute, now we can try this and how you compounded your efforts to become a global organization.
[14:26.6]
Okay, so what we did was we really looked down the field. Okay? We implemented profit first from day one. The percentages in the book. So day one comes along. The book was released August 1, 2014.
[14:42.2]
I picked up the phone, I say, hey, Mike, my name is Ron Saharian. My business partner just released a book, Profit First. We don't know where it's going to go, but we'd love to send you a copy of it. Tell us what you think. We're building something here. Maybe you have interest. I did that. I can't tell you how many times, thousands of times, leading up to, to prepare, just, scraping lists, building lists, doing all the stuff that you're not supposed to do. Right?
[15:09.1]
And then, when game day hit, that's when I started cranking out the phone calls. Within the first month, we had our original eight. Eight people said, what, guys, we understand that you're, you is brand new. We understand that you're disrupting things we understand that you guys are like George Washington's army going against the British. Okay?
[15:30.3]
But we're going to take a flyer on you. And we gave them lifetime rates, and we have six of them still with us. But what we did is we understood that, you when we were doing profit first, I didn't have to worry about how am I going to pay myself, how many expenses are going to be, you taken care of.
[15:46.3]
I just had to sell and deliver. And what we did is we decided to use profit first as a growth tool. We knew we were growing, so what we did is we opened up a new hire account. Okay. And what we did is we started testing the elasticity of the cash flow.
[16:01.9]
We said, you what a new employee is going to cost us? Say about $5,000 a month. All right, how do we know if we can afford this? We're brand new. Many businesses 20 years old don't even know if they could afford stuff, Right? And so we're okay, how do we know?
[16:18.1]
Well, let's test it. So we lived the lie. We took $5,000 a month, divided it by two, right? So on the 5th, 10th, we put, 2,500 into a new hire account. Could we pay our bills? 25th, we did it again. First month, we were able to pay.
[16:34.8]
We had great. We still paid all our other obligations. Second month, we did it great. We paid all our obligations. Third month, we were short. What's going on? Right. What happened? We were feeling good about ourselves, right?
[16:50.5]
And so what happened was it was one of those short days and a client was delinquent, okay? But right there, we're, pulling up the break. We're looking. We're what's going on here? But money came in the next day. We just proved to ourselves that if the company remains the same, we can afford that resource.
[17:07.5]
We hired Aaron. Erin's been with us. She celebrated her, Let's see. Celebrated her eighth year with us or ninth year with us, Actually, no, tenth year with us. In Christ. Yeah. So it made you pay attention is what it seems like. It really did, Right? You're putting that money aside twice a month and.
[17:23.3]
Yeah, yeah, yep. And so we lived that lie. And then we followed suit. We would open up another bank account with another purpose. We still kept that, you new employee, account going because we knew we were going to be hiring. So we always kept 90 days of salary available in this new hire account. Smart.
[17:42.8]
We then are in the basement, and there's about six or seven of us in the basement and it's a sweatshop in there. I had the office, right? I had it, okay? Mike's wife, Ms. Krista, comes down and she's like, guys, if this is a real business, get out, okay?
[18:01.2]
Otherwise I don't want you all here anymore. Thrown out of the basement. It was so much. It was startup culture. It was great. So we did the same thing, but we applied it to rent. So we opened up a rent account and we lived alive. We had a new employee, so we had to figure out how much rent we wanted to spend.
[18:18.9]
What was the square footage we need, what was the future things we were going to be doing, Were we going to be doing workshops, were we going to be bringing people in? Were we going to be this. So we had a focus on a vision of, what we were going to do and because the book was spreading, okay?
[18:35.7]
And get. Every day people said it was bullshit. Every day people said it won't work. Everybody. It's still a herculean effort, pushing this, okay? But we know it works. We've proven it works. But we had by living everything that we've taught and do teach.
[18:56.6]
I know it works. Well, sure. And that certainly is, for me when I look for someone who's going to mentor me in, teach me, coach me, I want to make sure that they're doing or using what it is they want me to use or what they're coaching me on.
[19:13.6]
Otherwise I may as well just watch a YouTube video for free. I want someone that's been in the game and preferably someone who's still in the game so that they're still running into new things that are coming about. Because two years ago AI was not what it is now.
[19:31.5]
So I want someone who's pivoting and is going to help me pivot and say, okay, now you need a new account for, AI training, a new employee for AI training. I know you said you kept the employee account, but my point is I wanted someone who's pivoting and going with what's going on now is relevant.
[19:50.7]
Absolutely. You don't want to work with your parents accountant, quite honestly. And there's a lot of, misunderstanding of what profit first is, and that it's going to cost too much. I've got 20 something bank accounts in five different institutions. They're free.
[20:06.6]
I've got $5 minimum balances in these things. Everybody's doing envelopes these days. We brought that out, right? We brought the envelopes. Out into the open. Okay. Years ago. And so everybody's hip to it. And so the next is.
[20:21.9]
It's going to take so much time in reconciliation. Only if you're doing it wrong. This is a sales tax account. It's a payroll account. They're holding accounts. Holding accounts. Reconciliation for me is eight minutes. Yeah. Worth it.
[20:39.1]
Worth it for the financial clarity of having. We have Profit First, US, Canada, Germany, Belgium, Australia, New Zealand, United Kingdom, where we have locations of what we're doing here. We also are in a bunch of other countries. So we've got that line of revenue, book derivative, line of membership, lines of revenue.
[20:56.3]
My financial clarity, Mike's financial clarity is second to none. So when somebody wants to work with your organization. Oh, so they're going to work with an accountant or one of the niche, one of the niche leaders in the group.
[21:13.6]
So we do not work with the end user, of course. Okay. So if somebody wanted to work with a certified profit first professional, because Mike, you nailed it, right? I could read a book on chiropractic and you don't want me coming over and cracking your back.
[21:30.0]
People, that's probably the most dangerous, right. Is someone that's only read a book about something and never done. You don't understand. People are reading Profit first and they're applying it based upon what they think is the right way, and they've ruined companies. Certification can be three to six months.
[21:47.6]
They have to run it in their business. It's mandatory. And not only do they are they focused on it in their business, they're focused on it on everybody else's business that they're working with. Right. Versus somebody that. Yeah, I read the book. I kind of apply it here, there, probably till it gets half assed.
[22:05.2]
That's half assed. That's interesting. So when you have the accountant and it takes the three to six months for them to come up to speed, this isn't an if a sort of maybe. This is a, systematic way of doing it.
[22:24.3]
And the only way in my experience is to have systems and processes in place. If you don't, you don't know what the heck is going on. You're always guessing from day to day. So they are teaching a systematic process. They have to learn it in a systematic way.
[22:40.5]
They have to do it right. They have to do it right. And of course, we have technology that aids everybody in doing this. We also provide every accounting firm with their own coach. Right. A person that works for me, that they help them through membership for the lifetime of Their membership. We also.
[22:55.9]
Here's the other thing. Profit first. Membership is not for everybody. Right? We don't teach accounting. We don't teach bookkeeping. We don't teach how to do your core business. We don't provide you oxygen. Okay?
[23:11.3]
What we provide is the next next level. Right? If you, if you're, if your services are all over the place, we'll help you wrap around them. If you want to upgrade your clients, we'll help you do that. If you want to venture off and grow and scale, we'll help you do that. If you want to prepare for a sale will absolutely help you do that.
[23:30.0]
Well, that's a big thing right now because a lot of the baby boomers are selling. I know that there are a lot of people looking for businesses, and in order for people to be able to sell, it's got to be sellable. It's got to be in a certain format. And it's interesting you bring that up because I was listening.
[23:46.7]
Recently, in the last couple of months, I've become aware that, Alex Hormozi has a partner. And I did not know this until recently, and he apparently has had two $1 billion exits. And what he did second company. Yeah.
[24:03.3]
And Alex, from what I understand from the podcast, don't take me as an authority on it. From what I understand, the reason Alex took him in as a partner is because he's never grown a billion dollar company, so he wanted to bring someone in that had done it. But, one of the things that he said he did in the second company is after a certain period of time when they were starting to think of selling.
[24:28.3]
So he would go six months and he would go to a PE firm to look at his business and tell him he wanted to sell it to them. Just wanting them to analyze everything so he knew what he had to fix. Then he would fix everything and then go to a PE firm and say, okay, now I want to sell.
[24:46.1]
And he'd send it out to a couple at the same time. And then he knew what he had to fix for when he was really ready to sell. I advise that to every accounting firm before they even consider selling. Most accounting firms aren't ready to sell, even some of the profit first ones.
[25:02.1]
And so it takes time. People are buying systems, profit, profitability. Some are buying for market share, but it really depends what the private equity firm's motives are. Are they going to stack it high, let it fly, or are they looking to maybe wrap your arms around your staff and grow it like a family office. Okay.
[25:22.8]
There's both of that going out there. But the bottom line is they're going to tell you you have a Gerber baby, a Johnson and Johnson baby, until they look at your financials and then they tell you it ain't worth anything. Okay. And how you protect yourself with that is a minimum of a net 25% profit, right? Yeah.
[25:41.1]
I think that's huge. It's kind of sad, right? A lot of people, they build this business and then they get close to retirement and, oh, my retirement's going to be selling my business. And then they. They come to find out they don't have anything worth selling. No. And it's pennies on the dollar. Because they're not ready to sell.
[25:59.3]
A lot of operators, they're not CEOs. When they make the move to CEO and remove themselves from the dailies, then that's a lot easier. But most of the accounting firms that I'm working with are owner operators. Regardless of the scale of them, they've made themselves a job versus being a CEO.
[26:16.6]
And a lot of the time is that they're not focused on profit. A large portion of that over the years have gone directly into their pocket. And so while they might have a healthy business, the books may not be as healthy.
[26:33.0]
Maybe they're using other stuff. But it all comes down to the strength of your financials. Absolutely. Especially when you. When lending too, right? Yeah, yeah, yeah. With profit. That's what I don't get.
[26:49.6]
This is what I don't get. Most business owners want to sell their business for a profit, yet they don't want to make a profit. They don't want to pay taxes. And I'm going to do everything I can to avoid paying taxes. But quite honestly, I am paying a lot of taxes because I don't want to kick it down the road.
[27:08.7]
You're going to pay the tax just maybe 10 years later or whatever, or you have a lot of other losses. I don't want losses. I want successful ventures. Right. The only way you're not paying taxes is if you're losing or you're just kicking the can down the road.
[27:28.4]
So let's build this thing profitably. Gotcha. So I understand that you are more than profit first. You've got a lot of other things going on. I know that you're doing some flex. Space is something that you and I have talked about.
[27:44.2]
I know you've done some development. There's. So can you kind of lead us into some of the other things that you're on, and that you're not just one thing. You've got all these other areas that you're growing in as well. So I was able to change the channel in my career path a couple of times.
[28:00.8]
In high school, in college, I was a welder. Then I worked, for the Public Defender Service of Washington, D.C. felony ones, murder, rapes, arsons. Then I became a staffing executive. And then I became, profit first. Okay?
[28:16.2]
So one of the things is, I teach kids. If you're gonna. The thing is, you're not gonna know what you want to do, but get good at trying to get good, right? When you get good at trying to get good, you can attack anything. And so I always had that mindset.
[28:31.4]
And so profit first is going, well, knock on wood, right? And so I kind of was what else is out there? What else is going on? I, you I I was a corporate guy, entrepreneurial, and my bubble was accounting. I needed to figure out, I wanted to see.
[28:47.0]
I like real estate. I bought a house or two, right? But what else was out there? So I ended up looking for groups. I get hired to speak at a lot of various different events, and I actually was looking for something. Found one, right? That's how you and I met in the dealmaker group.
[29:04.6]
I said, you know what? I like these guys. They seem pretty good. They're not a bunch of peacockers out there. They're all trying to help. Everybody's, you literally trying to help. I'm I think I can help people. Let me see if I can help. I want to help more people. And so I joined, and I'm oh, all right.
[29:22.6]
This is pretty cool. Now people are doing stuff. And so one of my companies is called Legacy Partners, and that's what we decided to get into, flex warehousing. We were looking at buying multifamily. Then we said, what? Why multi families? Why don't we buy an apartment complex? It's just more doors, one contract, We'll do that.
[29:41.2]
And so we were doing that for a couple of, years looking before I joined the DM Group and just really weren't having success. Buy boxes, whatever. We weren't filling, knowing what we're doing. Just trying to build the bike as we were trying to ride it, we needed help. And so I joined a group.
[29:56.4]
My buddy Joe joined a group, and what? I said, let's do flex warehousing. And I'm in New Jersey. We chose an area that there was significant opportunity, right. And that was Hollister, Missouri, Branson, Missouri. Right there.
[30:11.8]
You know, we do our searches on. We used AI. Tell me where there's billion dollar investments going north, Arkansas, northwest, Arkansas, southwest, there, Memphis, Tennessee, everywhere. A bunch of different things going on. So we're looking for billion dollar developments, medical stuff that isn't necessarily in the undesirable parts of a city. Right.
[30:32.6]
We don't want, we want to go into the already revitalized area or maybe more where it's already. Or more be where the building is not medical but arts, amusement parks, things like that where they're going to be building and building and building as well and constantly need maintenance and stuff.
[30:50.5]
So we did that and we came up with Hollister, didn't have any of that asset class there. We're the first ones. And we built it and now we're leasing it. How's the lease up going? It's horrible. And so, you this is slow money.
[31:08.1]
I didn't know what we were. So we swung for the fences. So we bought the land, then we put in the infrastructure, then we bought the building, assembled the building and now we're leasing it. So we did everything.
[31:24.2]
Soup to nuts. And it was our first time doing this. And so we made a lot of mistakes. There's some errors going on. You probably saw one post or something, the difference between mud and, and just a lot of new terms, everything.
[31:41.0]
But here's the thing. We made a lot of mistakes. Probably made $100,000 mistake. Gotcha. Good. I'm never making that again. Yeah, yeah, yeah. It is what it is. And what? This is a legacy property.
[31:57.2]
And all projections have been wrong. Okay, the projections of how fast it would lease, what the square footage would lease, this, that, all the market research we did, the experts that wrote the white papers, everything.
[32:13.3]
I wasn't just going out of the state, I was. We were doing research, we were on the ground. We were, we talked to the town, the city, we had. What do you want us to build? Where this, that, everything. Yeah. And we still made a ton and we still made mistakes, but it was just worth it. Yeah.
[32:33.5]
So I think so, insurance costs, a lot of costs. Like I said, when we were expanding profit first globally, I didn't realize I had to get into trademark. I didn't realize I had to get into various different currencies. I didn't realize I had to do all of this stuff, you just do it.
[32:52.7]
Sure, yeah. It's interesting you say that. Yeah, you just learn as you go along because you have to do it, because you have to get it done. Yeah. So tell me about private equity. I understand you're starting private equity is correct. Getting into that. Three years ago, I was approached by, a group, a private equity group, to join them as the accounting guy.
[33:16.0]
These, guys, have been successful in helping other accounting firms, significantly scale, one from 30 million to 500 million. And so this team approached me and they said, hey, would you be. This is what we've done in the past.
[33:31.9]
We think we can do it ourselves. Are you interested in joining us to do this? And I'm yeah, okay, let's do it. But again, let me stress, this is not real private equity money.
[33:47.0]
This is small money. Everything we're buying is under a million dollars, 400,000, stuff like that. And what we're doing is modernizing. We're family oriented. You we're systematizing. We're not outsourcing, we're not stacking high, letting it fly. We're mentor.
[34:05.8]
And so it's a slower play, but the play is in 2030, we're selling it to somebody. And so what we're looking to do is buy these firms and just stack them and integrate them, until 2030. That's the play. And then look to cash out then. So you're looking.
[34:24.6]
So you're. And my understanding that you're niching in accounting firms. Is that what I'm accounting? So accounting bookkeeping firms. So what we're looking for is accounting firms, something that's been around 20 years, something that's, that has a small staff, something that's primarily accounting and bookkeeping, maybe tax 50. Bookkeeping.
[34:40.7]
50, 50 service. Something that many may consider antiquated. Baby boomer looking to get out, not, sure what to do, scared to give it to real private equity because their staff is more like family.
[34:56.7]
They want to take care of them a little bit. But also because how we're doing it, it's a longer process. And we're not just given, no one likes our offer. Okay.
[35:13.8]
Because these businesses, quite honestly, aren't commanding the top dollar. And so they don't like our offer, but they like the structure and they like what we're looking to do with the company. Right. For some it's a legacy. And so we're going to help with a couple of things like that.
[35:30.8]
We're going to be modernizing but that's how I learned really, more about this private equity and the value of buying businesses. Whether you're buying a business, whether you're buying an apartment complex, whether you're building something, it all comes down to what are you looking to spend, what is the risk you're willing to take and compare it to the ROI that you may potentially make and also calculating what if it all goes bad or are you going to be okay.
[35:56.1]
And I know people are quite successful with doing roll ups like that where you buy a number of even blue collar firms, people do gutter businesses or whatever and yeah, get systems, make things more efficient and you can get them to a point where a larger private equity company will buy them for a bigger multiple.
[36:13.1]
They're doing it in the automotive space. They've done it in the IT space over the years. Accounting has been happening, you over the past five years. The automotive space is growing. More and more and more people are buying automotive, you same thing. You buy a great, the Corner, you 40, 50 year old station, repair station, great family name, been there forever.
[36:37.2]
Million dollars, boom. Turbocharged, that thing with some marketing, some systems, some automation. Yep. But here's the thing, everybody's talking about it. If you can't run your own business well, why are you going to go up somebody else's? Yeah, right.
[36:56.3]
That's funny. So when you acquire an accounting firm, am I correct in assuming that you leave the name in place because that's what's in the market. Yep, yep. Okay. Because I've seen that around me with the H Vac companies, they're all getting consolidated, but they're leaving the name of what was there before. Yeah.
[37:15.8]
Because everybody has a preference and it's all going to one entity. Right. It just makes sense. Especially if the ones you buy are having, good success. Right, right. And so if they're already, well, branded or already have a good name, then yeah, all you're doing is, you're consolidating where the payments are really going at the end of the day.
[37:37.0]
Gotcha. So, tell us about your public speaking. What type of public speaking do you do? What organizations do you like to speak, in front of? Yeah. So it's not necessarily that I'm looking to make a living off of. It's something I do that I enjoy, I enjoy helping out.
[37:53.2]
So I've spoken in score, I've spoken at accounting conferences. I just spoke at one of the largest automotive technical, conferences out there. Do a Lot of podcasting, do a lot of stuff, do a lot of group talks within our membership. There's other groups going on and so I'll come on in and I'll share as an expert for Profit first.
[38:13.8]
I'll share on topics of pricing. I love pricing, the psychology of pricing, the behaviors of pricing. But I also like how to architect a company's cash flow to create the culture that you really want. And that's really what I like talking about and sharing and how to do it.
[38:33.1]
That there is a way to offer. Eight weeks paid vacation, half day Fridays, profit distributions, medical, dental. There are ways to do this, but you have to be purposeful with your money. Right? Sure.
[38:50.3]
And you got to want to do it. Right. Mike and I, we chose to design profit first professionals in the way that we did. And it ain't a cheap membership organization. Pricing is key, Right? Sure.
[39:06.8]
And so that's also very important for accounting firms. Well, yeah, I mean you're not running a non profit. That makes no sense. Nonprofit. Here's the thing, every industry, I don't care what industry you're in, you have to include in your pricing on top of profit and margin.
[39:30.2]
Spilt batter, burnt muffins, freebies in culture. Yeah. Most people just do the profit and margin and they call it a day. Right, That's a good point. Burnt muffins, spilled batteries, culture. Yeah. Gotcha.
[39:51.8]
Okay, well, we've taken up about 40 minutes of your time. Really appreciate you coming on. We think our audience is absolutely going to benefit from this. Appreciate the offer to have us send out 10 books to the first, 10 people that request it.
[40:07.6]
That's fantastic. It's very giving of you and I appreciate that. Final words. What can you say for us? What do you want to say? You the key to running a successful business is pretty simple. As the owner, the leader, you gotta do what you say you're going to do.
[40:22.8]
By way you say you're going to do it and do it 3% then expectations you do that, you're going to be a rock star, employee, owner, husband, wife, whatever. That's simple. I love that. Simple, but not necessarily that easy. But it's that simple.
[40:38.2]
It's that simple, but it's not that easy one who said it would be? But it's going to be worth it. Damn. Right, Absolutely. Okay, Ron, really appreciate you having on coming on everybody. His contact information will be in the show notes. Yes.
[40:56.3]
And just to mention one more time, if anybody wants a copy of profit first. Let us know, send us an email, contact us, and we will get Ron to send it right out to you. Ron, appreciate your time, man. Man. Thanks. Thanks, guys. Appreciate you.