The Huddle - Episode 62 - Managing Cash Flow
This week the guys discuss starting your business and managing your cash flow, from what needs to be set back for tax needs to what you need to use to launch your business forward
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The HUDDLE is where the flooring industry can get together and talk about everything! Lead by Paul Stuart from Go Carerra who is joined by Daniel and Jose Gonzalez from Preferred Flooring.
what's up flooring family welcome to the Huddle we come back to you every Tuesday at three o'clock
Central to discuss maintaining forward progress in your flooring career
you like what you hear here if you've uh enjoyed any of the episodes please consider giving us a like or subscribe
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uh social networks whether it's Facebook or Instagram the guys are great on there
and uh same with go career so I missed everybody last week thank you
guys for jumping in there and and uh covering the show I appreciate that yeah
hopefully we did okay well I haven't gotten to look at the whole thing but I know you guys so you
you covered just fine so this week um
we're gonna be talking about cash flow and cash flow management uh starting
with the uh installation professional
one of the you know ways we got started I think you know
preferred flooring got started installing so did I and so
managing that early cash flow was key to eventually opening up a full-service
shop um so I just thought I'd start with you guys give us a little bit
of a you know maybe experience on how you guys manage cash flow early on some of
the the the great things we did are some of the maybe mistakes you made and and uh
then I'll I'll follow up because we have a very similar path to starting our flooring service you know the full
service flooring company I think in the beginning it was a
we had to learn as we want right in the beginning it was just very hard so you know labor only and you're
you don't factor in a lot of like consumables and everything else and cash flow was very tight to say the least
um starting out I think um we structured our pay base off of a
salary so that way that way we weren't just willy-nilly
with the bank account um that was I mean we're still salary um to this day because of it because it
worked um but in the beginning Castle was a lot different we didn't have
whatever we didn't have we had to go buy and we didn't have the um
the credit line yet unless we were using our own so
um that was pretty difficult and challenging in the beginning but the with the little bit that we paid
ourselves on the salary and then I think we waited about a year before we hired our first employee so we can build up a
cash flow um so that way we didn't have to worry about not being able to pay someone uh
that was a very long year um and you'll learn
you learn that it's not very hard to live without a lot of things essentially like what he just said like
short form is stay broke I like it I'll I'll uh
excuse me hit them I had a very similar thing when I
started me and my partner that uh started the company we both
it's a very low salaries and I tried to build up cash uh one of the key I think
um important things was we took work from different segments
so we were labor only but sometimes we a lot of times we'd work for a shop
because we get paid every week and then sometimes we'd work for another two a designer who would pay us when the
job was done and then sometimes it would work you know started working with the
general contractor who'd pay us every you know in 30 or 60 days we didn't jump right into
the you know working with the GC on big construction jobs we'd have never made
it we also did just put the money in the bank and take whatever was left over
um so I think that was very wise I still take a salary myself after 20 years so
um the the key of the of staying broke as you said
Daniel is like that that's what we did too it's not an easy road but
uh ultimately if your goal is to you know I've seen it I've seen it happen the
other way I've seen plenty of guys uh do work and then they get in real trouble because they either try to do
you know non-cash flowing projects meaning working with the GC or something
like that too early because of GDC because they're really good so the GC is like hey I want you to
do my job and they say okay and then they they do another project for a
general contractor and they don't get paid forever and they were not prepared for that so I think having a good mix of
projects is key too because you guys kind of mix that around as well as well as residential I think that's another
one where you can get that that deposit get that money flowing into that kind of thing did you guys do that
too yeah I think we got pretty lucky a lot of the the places that we started working for right away were you know
returning an invoice and within within seven days we were we were getting paid um if it was larger projects uh you know
that payment schedule would be slightly extended but um for the most part I was very
transparent with everyone and so was Daniel like hey you guys we're starting out like we have zero dollars uh we
invest in everything we had uh when we were let go and we invested a little bit that was borrowed
um and they were like you need to check just let us know if you need a check just let us know we didn't abuse that we
didn't even we didn't even ask for that it was just offered so you know to to go
back to where you said uh the contractors where you're waiting 30 60 90 days um we were fortunate to not be in that
scenario uh right um and you're right um
had that been an audition I don't know if we would have went down that road because of the length of time
um the cash flow everything that was coming in was was going right back into it right away like we hadn't we had nothing
you know yeah you had to buy equipment almost immediately yeah that's what we found and a big benefit of paying
yourself a salary as well just as a side note is uh oh you use some personal
experience here with my my father who has worked for herself for many many I mean for probably 30 40 years he worked
for himself as a painter he never paid himself a salary
uh so the only Social Security he has today is what he earned the first 10 years of
working as a union and uh painter so
you know today his his social security income is like 600 bucks a month because
he never paid in he didn't W you know pay himself a salary a W-2 salary
position he just paid his expenses and kept what's left so there's another
benefit of like doing that um I gotta I just hope that it's actually
going to be there when I when I turned 65 years ago yeah but the point here is had he paid
himself a W-2 and and paid into his Social Security way back then he'd be in a
different position today and um you know you can't go back but my
advice to any installer is if you're even even if you are just an installer
and you got a couple of guys working for you pay yourself a salary let your bank
account grow uh it'll come in handy on a rainy day you'll have a little bit of money to invest in things that you may
want to invest in whether that's equipment or um you know expanding your business but
living off of what's left will get you um I've seen him get a lot of guys in
trouble you know just and properly part of that is probably uh
the next topic uh under this is like
not just um how do I say this a lot of installers
who get started and they live off of the the proceeds
tend to live off all the proceeds so you never budget your personal life because
of it you know you just have this money coming in and then properly tracking
expenses doesn't happen as much then you know kind of I guess the bottom line is
run it like a business if you're an installer run your installation business like a business
you know we had a conversation like that in the Mastermind group where Kyle um about that um it's it's hard to
track your it's hard to track any project and get
your your daily operating costs if you aren't on a set pay schedule right like
if you're just starting out and you're going through your bank account and everything that gets deposit you're
treating it like a flow through to you um you don't really know where to make adjustments financially on some of your
pricing on what am I spending on supplies for this type of work or this week or this month I think that's one of
the biggest things when we started that's what we did is you had to separate your business income from your
personal income like yeah just because the business isn't making all this money doesn't mean
I'm making all this money even though we're technically a pass-through entity so
the the IRS treats it like that but you still have to separate that based on all
right this is what I want to do in business this is how I can get there this is my own personal over here and
like I said it was it wasn't a mindset of stay broke it was it's what we had to do in order to move
forward like in order to see the vision transpire it's like we're only going to
pay ourselves this much and then constantly reinvest into the business and that's what we did for years so
that's what we're still doing right now and and you can also helped you on taxes because when you're paying yourself a
weekly uh salary you're paying in taxes what we did
um yeah and I still do to this day is i max out my taxes like I want them to
take as much out of my weekly income my my salary and then I knew what I needed
to bring home to make do early on and that's what I paid myself plus I made sure I paid enough to cover
the taxes I wanted to pay as much into taxes because it is a pass-through um
tax structure if you're say an S corp or even an LLC
the profit and the burden of that profit flows through to you but like he said
have a separate bank account for your company and then pay yourself a weekly salary into your into your uh just like
you would any employee right into your personal account but you're paying those weekly taxes and it's it's easier to
stay up on the taxes early on um that way you don't have this huge tax bill at the end of the year if you just
have one account and you pay everything out of it and you just keep all the extra you better be making some
quarterly tax payments but one way to do that almost automatically is max out
your tax um amount that you pay in on a weekly basis from
from your salary and then um you know at the end of the year when your income is all calculated for taxes
you've you've paid a pretty fair sum in from your personal income and me and my
partner when we first started I'd obviously I bought him out no three but from 99 to 2003
we both just took salaries and it helped us stay up on our taxes kept our tax
program down at the end of the year that kind of thing so there's a lot of benefits to doing it that way
yeah and we um in full disclosure everyone like I learned this the hard
way from previous Ventures right and that's why when when Daniel and I
partnered up and we decided to start our preferred that it had to be structured right away the other way didn't it
didn't didn't work I mean it worked for as long as there was there were funds in the bank but as soon as
you get under a certain dollar amount and you have X amount employees it doesn't work anymore you're scrambling
you're in scramble mode everything's separated right so your employees your uh wages your wages then
then uh everything else on top of that your vehicle the maintenance and starting out nobody goes out and buys a
brand new vehicle right so you're gonna buy a used vehicle you got to figure you're gonna spend 500 a month in
maintenance on that on top of fuel and whatever else um I mean you're gonna be spending a
truck payment a band payment anyway and maintenance on an old vehicle so
learn that one as well yeah and even if you do go get a new one you gotta try you got a bigger vehicle
payment so I mean at the end of the day having those separated is wise and
um like I said there's that added benefit of having us with taxes automatically coming out of your account
or out of your check on a weekly basis and then you know frankly it it helps
you to not overspend on a personal level uh you know sometimes you're gonna have
some down weeks when you're installation only and
it's nice to have that extra money in the bank where your salary still comes through each week
just like it has and if you live within those means then you know you can make it through uh you
know a period of time without actually working and you may be out you know
scrambling for work but there are slow times I mean it's not been around for a while but it does happen I remember
installing and out trying to drum up work and it may have a week off but I
still got my salary because we put the money in the bank yep I remember planning for it too I
remember the lulls like right before Thanksgiving and then after Christmas that was about where I was at so
um and then it always a little bit of a little right before we called School season started
um and you know it just it's like the tide was just pulling itself back for a second but it was gonna come back strong
and you gotta be ready that's a good analogy Jeremy's commented
on Facebook he says the one of the reasons why he hasn't jumped in full time on his own is not being able to have the steady cash flow
about being a W-2 employee he's able to invest in 401k and move up the ladder to
get off his knees in a reasonable amount of time because I think he just you see too many guys out there that like he says they're
one-man cruise and you know they're 60 years old right now and it's because they didn't take the
time to plan things out when they were younger kind of like you said your dad that's that's all he did was you know when he
was in the union and then he has really nothing after that it's a lot of these guys take a look at that bank account
and I mean don't get me wrong a lot of us come from you know pretty much nothing so it's
when you see it start seeing that that amount of money rolling in it's hard to to just look the other way and keep it
into that account but it's it's all mindset right it's uh where do you want to go uh delayed gratification
where do you want to go and and what do you have to do in order to get there and a lot of these guys can't see past the
weekend you know we see guys that are you know on Saturday they're out at the casino and then on Monday they're
complaining because they can't work because their vehicle is broke down and they don't have no money to fix it
yeah I can't count how many times I've had that you know talk with an installer who doesn't have
gas money on Monday or Tuesday or whatever and can't get to the job site I'm like dude you just got
paid six grand last week you know how in the world and a lot of times it's
just they it's so much easier to indulge in the
things where you would have discretion when you just
take what's left over if that's how you're gonna operate your busy business and you got three thousand
dollars left over after a six thousand dollar a week and you pay everybody and you go out you had three grand in your
mind well I paid myself 600 bucks for the first four years that's what I paid myself on a salary and we didn't we
didn't move that for four years neither one of us so you know I it can be tough but it is
delayed gratification if you're wanting to build a business even a successful installation business
you got to have some money put aside for training your guys for for uh training
yourself for getting to Convention all those things go into this big bucket and
you're just a W-2 coming out of that bucket and you let that bucket grow and I know what you're saying I mean there
was weeks we that me and my helper would do six thousand dollars seven thousand dollars worth of work I get paid 600
that bank or our business banking account was going up and up and up and I'm still just kind of scrounging by
personally but if you really want to grow a business or grow a a nasty vegan maybe
you don't want to be a full service but you don't want to be living week to week forever grow that Nest Egg big enough to
where you maybe you can increase your salary uh in in a couple of years and
then that Nest they can continue to grow where you're not always dependent
I think what I did not want to do and the reason I was just super fine with taking the salaries I did not want to
have to starve the next week I'd learn how to live on 600 bucks so that was
gonna work and then I didn't want to have this time frame where my family had to go down
if you do it that way we didn't ever have to go back in lifestyle it was a a you know lavish
lifestyle but it was the lifestyle we were living at that time we didn't have to go backwards because we were always getting that check because that that
Nest Egg was growing so on down weeks or slow weeks I was still getting paid even if I only
created a thousand bucks that week I still got my normal payment and I was
you know what I'm saying it's like treating yourself like a good employee is the best I think that's the best when
you first start you create a routine and it does get easier it gets it gets way easier once you create that
routine um and I just don't understand
how back when I was younger how I didn't see that and the need for that so and
then that's one thing too I think Daniel made me think about it when he earlier is when
there is no education classes out there everybody's worried about hand skills and installation but there is no financial management classes out there
for a young entrepreneur who can go get a 1099 a DBA or LLC right they don't
have any of that you got to do all that that's why we're here yeah and and that's the thing though is they do have
those classes it's just you have to go look for them yeah they're not readily available like oh yeah and here's here's
a booklet if you're starting a DBA and you have a business license here's a booklet from your county and that would
be that's the thing it's it's like uh the FCF and
and you know we're trying to recruit more installers but recruiting new installers doesn't
necessarily mean we're recruiting good business people like they keep on
pushing them into you can make this much money and work to Be Your Own Boss and all this but they
don't push them to where it's like go come through our program and then go
work for this company for x amount of years before you do this it's it's
always uh that that that mindset or that statement where
it's like You Can Be Your Own Boss and I mean you you know as well as we do
being the boss is not always the the greatest thing in the world it's uh yeah sometimes
yeah it's like it it would be so much easier if we weren't
but at the same time if we weren't in the positions that we are now we
wouldn't have this platform here talking to other guys that needed the help yeah I I mean I can't say enough that
you know we've touched on so many subjects that if you are starting out as
an installer and you're thinking about or you're an established installer and you're thinking about like taking the
next step in your in your uh in your career or your business
you know Ford progress does means like wherever you're at right now you can move forward you can go you can
go but you can get bigger better or just better but you know what if we shot a 16
plus episodes and a lot of them have to do with how you run a small installation
company and how you can turn that into like I could have been extremely
successful from a monetary standpoint without going for a service because I
did pay myself a salary and I did create a lot of I did a good installs and I I
attracted good installers me and one other crew um we really could have had a very good
uh lifestyle um you know I wanted to grow a full certain
grow into a full service company there was a big need in my area and
um so that's what I wanted but you can run a successful installation only company as well it's just
having some discipline with your money uh you know we're talking about cash flows so you've got to consider making
good business deals on the front side like getting terms that fit your
business model playing collecting well and then doing good work I think those are all kind of
I hope understood you have to be a good quality work you gotta collect your money and you got to do the work that
best serves your business but at the end of the day man you can be you you can go
any direction in your once you have the hand skills and the business mindset that that of discipline
I see it all the time the biggest problem that that plagues the
installation industry is guys just living off of what they make and not having discipline around their money
I know a guy that you know he does real well from how much he pulls
and you know instead of he replaced his old truck within Mercedes-Benz you know
I think that kind of spoke a lot to what where his mind was I mean
could have went out and got a really nice uh van that would better serve your
business um you know I don't think I drove a car for I don't I still don't drive a car I
probably haven't drove a car in 20 plus years but I didn't drive a non-installation vehicle for almost 10
years like my kids I'd take out the scenes and I'd ratchet I'd literally put
the seat back in so that I could put my car my kids car seat in my van I can't imagine not driving a work vehicle like
something that I can throw my tools and material I can't I just I can't like
there's a need for it what happens you know yeah I don't know I remember driving my
my S10 across the country with a 35 foot roll of rolling and from Over the cab
and it scratched everything up all right yeah yeah
I think uh another piece of this um cash flow portion is also tracking
your helpers labor and making sure whether it's a helper or other installers that work for your install
company making sure that you know they're being properly trained and they
even care about the quality they're putting in and their production giving
goals I know we talked about that in the past about giving your installers goals
um you know when I was just me and another guy uh I had a helper he had a helper I mean
we both set goals on a weekly basis on what we were going to try and get done
on a bigger job and sometimes it was a daily goal if it was a you know smaller
project you just kind of got to get together and um kind of track that labor and know
where your expenses are coming from because labor and equipment
gas all that stuff it adds up it does like so
um when you first started how were you tracking um for your your partner and the helpers like I I've always done like
time cards we used to do handwritten time card track hours uh some people do square footage or just buy the job or by
the day um what are some other ways for people starting out uh to try that because it
has a lot to do with the two you got to be able to track what they're installing how much how much they're installing or
if you're by the hour like is there the rate match what's going down
yeah we always did it by the hour and um the lead guy my other lead guy he got a
salary and then a bonus on whatever got that whatever he beat so that was the
purpose of the goals so say you got a thousand dollar job just as an example and it's gonna go for a week and
as an example he gets paid 500 bucks and his helper gets paid 200 bucks and
there's a thousand dollars of money in that budget for the labor portion
plus a plus a profit to the company well we just bonus him out the difference
so it always encouraged them to work um but they weren't working harder for
nothing more um it wasn't really that unique of a setup it was just how we chose uh
looking back I probably would have done a little different but that's how we did it and uh it worked out pretty well I
mean he my my other installer performed well he worked hard and he was he was
there uh you gotta give him go give employees and he was an employee so
um But You Gotta Give those guys a reason to get up and go to work
and we just could not afford a big big you know huge hourly rate at the end of the day some of the jobs
didn't have any money at the end of at the end of the wages
but again we were trying to set precedents that
when we have good jobs that pay out well then we're we're gonna you can make more
money but at the end of the day you need to be budgeting your life from what you
know you're gonna make foreign so what about um Financial establishment
or would you you know guys who you still use a shoebox I mean
well it's not even a financial establishment that's a bookkeeping software
yeah so that he says very helpful to track your expenses but
back then we didn't have all the fancy technology so it was literally uh turned
in an expense report each week from each crew every every gas receipt
every everything if they're out of town food receipts and hotel receipts and all that
came through and then my partner would put that into QuickBooks that's what we used at the time and this was before
QuickBooks went online um so this was just a piece of software on a computer at the time and
you know we we track all the expenses including labor and then what was left
over was available to be bonused to the other installer and I never bonus myself
that was the sacrifice I made there was no bonus to myself all my extra went
stayed in the bank account for the company better safe than sorry yep we get it
yeah I mean we were used to getting to eating ramen noodles I just didn't want to have to go down to like you know
canned beans hey there's nothing wrong with canned beans
uh I'm sure you have family or friends that'll support you and you know I'm not
too proud to say that Daniel and I did go to we counted on family for some food sometimes
um and it helped not not saying like hey can you feed me on Wednesdays and Fridays it was uh what
y'all doing today come over
no we lost the audio on you
just gotta turn on your headphones or your mic on your headphones
[Laughter] thanks there it goes
is it good yeah yeah I'm back okay sorry about that I don't know if I touched
something or when I when I adjust to them but
I guess um you know you don't have to start that way do you I mean you don't not everybody has to start struggling uh if
you if you've established yourself uh working by by the hour for or by the day
or whatever but as an employee for a company you've got a good savings stopped away and maybe uh some assets
not the way that you can get a loan against you can kind of jump in and Skip some of
these other steps we're talking about I mean we're not saying everybody has to go through the ramen noodle phase so to
speak no but when we started like both of our credit scores were
not the greatest and we you know we
we were already struggling and it was just not an ideal situation
and we just did what we had to do in order to make that situation better
yeah like if like you said if you were
already planning on doing something like that for years and now you feel like you have the the finances to to pull that
trigger and you're comfortable yeah you're in a way better spot and that's a lot smarter um and way ahead I encourage I mean to
plan it one thing that you guys and I have in common as well is we didn't plan it I mean you guys
it was kind of a very similar scenario I think I I got
noticed that we the company I was working for was getting ready to get bought out like the fourth time and the
new ownership group was one of the existing PMS that worked there that did not like me at all
um and she she she's a friend of mine today but back then she was she did not
like me at all and I knew my my writing was on the wall I was I was getting booted as soon as she took over so I
just I had to quit and go make money right away you know so I didn't have a lot of time
planning on it I just figured hey I can do I can do at least as good as that
company was doing which was not that good and this new ownership group coming in you know promised the world just like
the previous one did things are going to be better um and when I say better I'm not saying
like you know getting paid more I'm talking about having checks that would clear the bank account oh yeah you know
one time I held five checks that did not clear and you want to talk about Speedy
Gonzalez on the way to the bank every when I'd get the tip who from the PM
they ended up being my partner he tipped me when he knew a check came in and then
I could jump in my car and run to the bank see how many of those checks I could get cash and uh
you know that just getting checks that would clear would have been an improvement back then
the new ownership group when they came in was promising things were going to be different
I just didn't think I was going to be there anyway so I decided to go out on my own and when
when you do that it's kind of last minute I'm in the same position either I didn't have the best
credit at the time I was young I was only 22 when I started the company so I
didn't have it wasn't that I didn't have good credit or bad credit I just didn't
have any credit no credit you know I had one car loan that I was paying ridiculous percentage on because I
didn't have any credit and um so there's a hard road but you just all I'm doing all this the purpose of
this uh discussion is is to let you know that one other people have went through
it two there are brighter days if you can be disciplined with your money and I can
tell you right now there's for every one of the stories like yours or ours there's 50 stories of the guy that lives
off his business a hundred percent and uses all the funds and never has a
rainy day doesn't pay his taxes and ends up working for somebody
out of necessity not out of choice they have to work somewhere because the IRS is after them and they need to get
garnished I mean I know those guys so do we and you're right we are
definitely outnumbered by those guys so the reason they go W-2 is the fact is is
they give W2 then the government can only garnish their wages that they don't go take their home and
their cars and you know everything you stay on 1099 and the government if you
go to back taxes they come to start taking itself
so cash flow is important early on I mean
that's the bottom line to this is collect your money do good work make sure you're installing good product so
you don't have failed projects early on one thing that'll kill you as an installer is doing poor hook early on
it'll just it'll just kill you happen to go back and and rework or redo
stuff I'm not saying we were perfect in that regard that we had very few and far between of going back and having having
problems when I was installing a lot and then if you can get a good mix
of jobs between homeowners you know maybe a little longer term stuff like
with with your interior designers or something like that and then working for a shop that could give you that weekly
pay the having a good mix there kept our cash flow a lot better if I've been just
DC Universe on there's no way in hell I would have made it and same with if I I
had a Interior Design Group and they're the ones who really kind of helped us uh
see that we were going to have business as a company and uh they were a high-end
uh interior designer but they didn't pay they collected from the client and they
paid us and they didn't pay us every week it was when the job was done and if it was a two or three week project we
had to wait two or three weeks for the for the money but we had all the expenses all the gas
all the labor all the car payments and everything you're muted again
I had to be on my phone because I wasn't smart enough to charge my laptop beforehand
so you know even if I would have done only the interior designers work it would not
have worked out it wouldn't have made it because I couldn't have always been spanning those three weeks we had to
have a good mix of those three working for a shop we got paid every single week and that helped a lot
um of course they didn't like it when we started working with GCS and then we lost that but that's a natural
masturation of like you know growing your business I think yeah so so
good advice is to make sure that you don't have all your
eggs in one basket that you do have a mix of pay schedules understand those pay schedules and stick to turning in
the invoices if needed right because if you don't if you missed that pay period that's your fault not theirs
um don't over extend your finances on labor
um material like sometimes we did that too a couple times where we weren't into material sales but we
would buy material with money that we didn't really have and then we'd be waiting it's like then think that one through
um track employees contractors wages will
help um and have separate bank accounts yeah
yeah that that's probably the first one have a business account and have your personal account so don't live out of
your business account and start working on your business credit on day one
yeah yeah well this is about cash flow but that's a very important piece too right
like if we didn't build credit and get to a point where we said all right we either use it or we don't right it was
all right let's use it so that way we're not using what we have because I know that what we have down the road is going
to pay for that you know right right away a lot of the cash flow like when we were
I mean we we were running 12 installers at one point and that stuff starts
adding up especially when you're waiting for checks and it's like uh all right let's get
this line of credit going and then you talk to them and they're like all right we'll give you five grand it's like well
five grand is going to do anything but that five grand and then you we just you
know you initially take it out and then you repay it and it costs you a little bit of money but then they're like all
right you paid that pretty quick here goes 25. here goes 50. oh here goes 100 and it's
like you get you have to steadily build on on that and
honestly it's the the cost of doing business sometimes and that's how you gotta just look at things it's not I
don't want to pay interest on this because I just don't want to pay interest it's business is expensive and
sometimes you gotta I'm out of pocket in order to build something that's the business expense of Spain
interest and and building that's a great point is
starting to build that business line of credit whether it's with your bank with your vendors pay your vendors on time
they they'll extend you out a little longer and sometimes you get that you
get to that nice 30-day you know net with the with the vendor and then you're getting paid on a weekly
basis from these and get that mix was really important for us I know you guys have a similar deal
where we do we did some homeowner stuff we get paid a little faster you can get 50 down
and like I said working for a shop we go do the labor only and get that money within a couple of weeks and then your
longer term stuff but building that business line of credit whether it click your bank and or bidders is super
important because then you're not just ripping out of your cash yeah that's uh it's always a little
heartbreaking when you when you get a double large chunk out of your hard-earned money
and pay your taxes because you don't want to be the guy paying interest on your taxes that's another thing like
that'll just that just snowballs on you that's where you don't want to that's
where you don't want to be borrowing from right and that's where when you say paying quarterly right because if you
don't pay quarterly and you only pay at the end of the year you're going to get hit with a penalty regardless
so yeah and it's it's a the penalty is one thing that
um those quarterlies it just is another discipline thing like it it helps you
be more disciplined and entertain those those tax bills um they're not going to go anywhere
they're going to be there so you know at the end of the year if you profited 100 Grand and you've got to give 25 to the
government do you have 25k in the bank that you can just send in you can
sacrifice well that's why it can be tough if that
happens to hit a slow time in your business and maybe you've been drawing on it and
when's it hit at that slow time at the end of the year like what Jose was just
talking about maybe you don't have it well then you get your real penalties when you're not paying it at the end of
the year plus you start including interest and all these things so being disciplined on
your quarterly um you know estimates and I mean there
was times when we get money back because we do the quarterly estimate and plus my
weekly payroll uh to me and my partner we were taking out our income taxes on
that as well and since we were an S corp all the money flowed through so all that
texts that we paid again every single week plus our quarterly estimates we actually get some money back at the end
of the year that didn't last long as you grow that's harder and harder to do but but uh
still I I would recommend paying in uh you know and of course
always going to make this comment talk to your tax attorney talk to your to your your accountant and make sure to
get professional advice but what worked for me was paying quarterly taxes even
though that quarterly tax estimate and um taking a W-2 so that I could get
taxes taken out weekly and when you pay your taxes you get uh basically your receipt is giving you
your net worth and that will help um when you are starting to uh get traction and want to apply for that you
know five thousand dollar loan ten thousand fifteen thousand you got to have a net worth if you don't you don't
have anything but what someone's paid you that's that's that's nothing they need to know that you've paid uh into
the government uh to even qualify for for any of those loans well it doesn't matter what you want to
do if you're going to go through if you want to apply for anything they're going to want to see you know those
let me see those last three years of uh your business taxes yep and yep that's something you don't want
to fall into either and we've touched on this numerous times before it's not not being able to build where you want to go
because of your negligence on not paying taxes and then you can't pay cash for everything
no and that's a pain in the rear anyway and that's not really running a business that's owning a job and you're not even
doing a great job at that if you're not paying taxes um and some people are just fine owning a
job but you still got to do the right thing pay in your taxes
again I don't care if if today I was still installing on a daily basis and
I'd still pay myself a salary I I would still do it the same way that's the one thing looking back I
wouldn't change I think it was the right thing to do it worked and it helped me tremendously in getting that Cadence
down and understanding when I didn't really understand a lot about business I didn't have to like
worry about like making it I I don't know there's a
certain level of personal um security and knowing that you're
getting that payment every week from yourself yes but still that you're you're not going like I said going from
ramen noodles to canned beans or maybe it's maybe you can vegans are better it's the other is a backdrop but to get
what I'm saying yeah or Mexican so we love these
I was like we've kind of touched on the biggest
things and you you just kind of kept them off there a second ago Jose is
there anything else you guys can think of a pitfall for the new guys kind of getting going
um I know one of the comments was talking about you know 401k and things like that
obviously you can do that on your own as well um right if you if you're responsible
with your money you can you can pay into a 401k right right as as you're uh taking your W-2
I do have something to add to that um to this whole conversation is uh
and you know to each their own right it's okay to say no when you start
getting the cash flow and you have friends and family reaching out to you you're trying to build something that's
going to last a lot longer than than a favor um it's okay to say now
yeah well I think that can go down a really deep rabbit hole because I think we both probably have some instances
where all of a sudden friends you haven't talked to in a long time all of a sudden find you again uh I
mean I'm a sucker for family and Daniels too if I said we say no all the time I'd
be lying right and and but if you and your business are not in a
good spot it is in your best interest to to have that control and say I'm sorry I can't
right now even though it hurts your heart I think that's the key is knowing that
if you can't you don't yeah if you can awesome 100 you know help out but at the end of
the day don't don't fool yourself don't let you go you know cause you to say oh they're gonna think I'm not making that's what's
got me like I would help people out because I didn't want to think my business wasn't doing great
you know so if I give them money they they think are successful as the family
mainly you know that this Venture that I jumped out head first into the water for
uh you know I didn't want anybody to think that it wasn't panning out
that there's plenty of times I gave money when I sit down well today
this is this is what being a business owner is this is what we're riding a roller coaster
yeah it is certainly a roller coaster all right well with that guys
it's a pleasure to see you guys how was uh you know I'll tell you I caught a bunch
of fish that were about this big and a few that let me back up they were like
like that so where are you actually I went to uh Northern Canada
Saskatchewan and uh there's a place there called in the lodge Eno Lake Lodge a buddy of Mino
owns that and um and then we take a float plane on into
the Northern Territories and and go to some lakes that have never been fished
or rarely fished and and uh slay them so it was a good trip
and I appreciate you guys covering for me last week yeah not a problem everybody basically
just him talking the whole time [Laughter]
try I tried the whole time I don't know if that's uh if that's a uh
uh indication of your knowledge or no I'm just pretty good at feeling Dead Space dead air right like I'm the filler
guy it's okay I understand all right guys well thanks a lot and uh
we will see you guys next week and um looking forward to hanging out with
you guys at the end of this month yeah in a couple more weeks right yep oh it
is yes it is two weeks oh wow yeah about two weeks away guys uh I guess it's
worth saying here uh FC uh fcic and uh
the CFI their combined convention is going to be in Orlando so if you haven't gotten a 10 if you don't plan on
attending or you hadn't thought about attending I would strongly encourage you to uh get down and come hang out with
some professionals that can look we all learn from somebody I I learned from people I know that Jose and
Daniel learn from others that these shows come down and and you can see a
bunch of different types of businesses and how they run and they people will talk to you and help you through some of
your problems so I encourage you to get down there and experience it and most importantly Crystal will be there
yeah and Crystal will be there go down check check out the uh the show has I almost said go down there and check out
Crystal
this is the new family member oh what kind of dog is that
thanks Luna all right welcome to the family Linda
she's a Shiba Inu yeah
it's my daughter's dog I've heard that somewhere
Dogecoin is based on a Shiba Inu dog oh it's a cryptocurrency thing
gotcha sweet that's a cutie
all right guys we'll talk to you guys next week appreciate you Jordan and we will see
you guys later everyone thanks guys hey bye