23 Feb The People in Your Neighborhood Ep. 001
Welcome to The People in Your Neighborhood show. Remember that skit on Sesame Street from when you were young, where they would come on screen and they would sing a happy song about the people in your neighborhood, and then they would introduce you to some people. That's what we do here. We introduce you to some of the people in your neighborhood, but once again, welcome and enjoy learning about some of the people that work in your neighborhood.
Hello, to all of our watchers, listeners and readers out there, I'm Jeremy Lott, and I'm the host of the people in your neighborhood show. On this episode, we're going to talk a little bit about my own story and how I came to find my unique solution. I'm Jeremy Lott with Foundation Accounting and Consulting, and I work in your neighborhood.
My unique solution that I provide is maximizing cashflow. That's what I do best for my clients is help them be able to maximize their cashflow.
So what was business like before I discovered my unique solution?
Well, I had a landscape design and project management company, and I loved what I was doing. I was doing residential design and install, and I just loved it, but I really had no idea what was going on with my finances. So I was kind of confused and wandering when it came to running the business side of my company.
What external factors were in the way of what I desired?
Well, my money. I didn't know what was going on with my money. And so I was always worried and stayed up late at night and I had to juggle money around to make different payments. And it just wasn't working for me at all.
What internal factors were in the way of what I desired?
Well, I just felt dumb. I felt completely helpless. I was very confused about what was going on with my money and I just didn't have a handle on it. And it kept me up late at night and I, I just felt trapped.
So what things did I try to do to fix the problem?
Well, I figured that my problem was probably going to be that I didn't understand accounting and QuickBooks, and I figured that if I could learn accounting and I could learn QuickBooks, then that would solve my problems. So, I went out and I found a couple of self-study courses. One was a 60-hour self-study course on QuickBooks, and the other was a 60 hour self-study course on accounting and bookkeeping. And so, I put in about 120 hours of self-study to learn accounting and the bookkeeping.
I was so confident with accounting and bookkeeping and with QuickBooks, by the end of all that study that I decided to start up a bookkeeping practice and that began to grow. But I discovered that I was still having more of the exact same problems just in a different industry.
In fact, things got so bad with my landscape company that I found myself going in to meet with a bankruptcy attorney. And I still remember all the gravel on the, on the parking lot as I walked into the building. I remember meeting in their conference room that was surrounded by frosted glass and sitting there uncomfortably across the table from this attorney that clearly was, adept at working the system, and kind of felt a little grimy. But, you know, after we finished consulting, and talking a little bit about where I was at and what was going on. We decided that the best option for me was going to be to declare bankruptcy. So here I am faced with the ultimate in business and financial failure, declaring bankruptcy.
So what happened that made me resolved to find a solution?
Well, the February after that, I went in to meet with my tax accountant so I could get my taxes done, and we sat down and we talked, I remember his office, sitting across him in the desk and his bookshelves back behind him with all his different tax books on it. And I think he had an orange colored wall. It was kind of odd, but it was an orange colored wall and it really stood out. And I sat up there and we talked a little bit about accounting, and he was using all these fancy accounting terms that mostly I understood now because of the self-study that I'd done, but we got around to talking about my bankruptcy and he just kind of pursed his lips and shook his head and in an almost reprimanding way said to me, yeah, I've seen that coming for a long time.
My jaw almost hit the ground. I couldn't believe that this person that I expected to be my trusted advisor was now telling me this after the fact. Never once did he say something to me in the buildup in all those years? And I decided right there, and then I was going to fix this problem. I was going to make sure that other people in the construction industry, weren't going to have to face this kind of problem, where they had this trusted advisor and they weren't getting the information that they needed from him. So I decided that I would figure out a way to solve these problems.
So what obstacles did I have to overcome in order to pursue my new path?
The first obstacle was schooling. I went in to apply for the Master's of Accounting program. So I could take that and they rejected me. My grades weren't good enough in my undergrad. And I had a major in Horticulture and they really wanted to see a business major in order to let me in. So I had to figure out a way to be able to get the education I needed without going through the Master's of Accounting program. Also, I was 34 years old. I had a wife and three kids and I had a mortgage and I had to take care of all of those things first. Those were my first priorities before even considering school. So I jumped in.
What was my worst case scenario if I failed?
If I failed, then I was going to be stuck, doing little odd jobs for a long period of time because that's what I was doing at the time in order to make it through. And I wouldn't ever be able to help people the way I am today, I would be stuck with this goal and this dream and completely ignorant as how to be able to achieve that goal and dream.
So who or what showed up in my life to turn things around?
Well, the first thing that happened for me was that I got introduced to the MBA program up at the University of Utah. It was a night program. It was the, professional MBA program. And that was all night time. So I could still work doing odd end jobs and things during the day. And then at night I could go to school and work on my degree. So that was the first thing that happened.
Then as I was taking these different classes, I came across the managerial accounting class and my professor was JB Henrickson. He happened to be a partner at Advanced CFO and was very knowledgeable in helping businesses to be able to turn around and do exactly what I wanted to do. So because I knew that he was doing what I wanted to do. I paid extra close attention.
What happened that led you to find the solution to your problem?
I still remember meeting in that auditorium. It was a big auditorium and we only had a few people. So we only filled up the first couple of rows, but he taught up on a stage behind a rostrum with the stage lights shining down on him so that we could all see him well enough. And then behind him was a huge screen so that we could see his PowerPoint and different videos that he'd show us up there on the screen.
I remember sitting, it was much dimmer in the audience because of the way that everything was set up. But I remember sitting there with my laptop open on the desk in front of me and my managerial accounting book open in my lap and just listening, excited and wondering what he was going to say that was going to help be able to fix these problems. And I got my answer. We learned throughout that semester about different tools, about budgeting tools, about cashflow projections, about allocating overhead, about job costing, all of these kinds of things, these different tools that would be helpful to help me be able to improve cashflow. And that was the answer improving and maximizing cashflow because ultimately that's what we need to do in order to be able to help people be able to make it financially, is help them be able to maximize their cashflow.
What did I decide to do to plan and implement my solution?
Well, I'd been learning all of these tools. And then I had four years of school still. So I spent all four years of school building up my arsenal of these different tools we could use to improve cashflow because this was going to be the solution that I came up with. I focused on finding the solutions as I studied for those four years. And then the four years after that, I went into industry and worked. And while I was working there, I was able to start implementing some of these different tools that I had learned. And I was able to start helping people with these tools that I had come up with.
So how do I implement my solution?
I came up with a process that I call the Dominate Your Cashflow process. And there are six basic steps to this.
Step number one
is that we need to get your books clean. Everything has to be clean and accurate. We have to have numbers that we can rely on in order to be able to start improving cashflow, that's step number one.
Step number two
is going to be maintaining your books. So that's when we get into bookkeeping. Either I'm doing it or the client's doing it and I'm teaching them how and how to use QuickBooks. And we've got to be able to keep those numbers clean as we move forward. So we can continue to rely on those numbers and get good information.
Step number three
it starts to get real fun, because this is when we implement the Profit First program. Profit First is a book written by Mike Michalowicz, and it is a fantastic way to be able to start paying the owner. It's really hard as a business owner because all the time you'll find that everybody else in the business is getting paid except for the owner. And it makes it so that it's hard to continue wanting to work your business because you're not getting paid. You're not getting anything out of it. Profit First is a program that helps to be able to correct that. So that's step number three.
Step number four
we start getting into job costing and budgeting with this. What we're looking to do is we're looking to maximize the profit that we get on each job and be able to price our goods and services appropriately so that we know what profit margin we're going to be making on each of these items as we sell them. And as we do the work for these different clients.
Step number five
we want to be able to start improving cashflow. This is where we really start getting into the meat of improving cashflow. And we do this by going through the profit and loss and finding areas where we can cut back, but also by doing the cashflow projection so that we know what money's going to look like in the near future, so we know our peaks and valleys will be and be able to supplement in those valley times so that we can make it through to each of those peaks and be able to level out our cashflow so that it stays maximized all the time.
Step number six
is where we start to refine the business and the business owner. This is where we work on some, process improvement programs, and we start to look at key performance indicators and we start to really dive into the nuts and bolts of the business and how it works so that we can improve these different processes. And each of these different improvements helps to make little differences in the cashflow. And those are the six steps.
What results have I seen from implementing my strategy for myself?
It has been life changing to be able to know what's going on with my money. I'm able to project what's going to happen over the next three months and be able to plan in advance. I'm paying myself. I don't have to juggle money for payroll or for any other bills anymore. And it's just such a comfort. It's so peaceful for me to be able to rely on my cashflow rather than being confused and not knowing for sure what was going to happen with it.
What results have I seen from implementing my strategy for someone else?
I want to talk a little bit about Les, Les owns a landscape company. And Les came to me. He had similar problems that I had. He was juggling money to make payroll. He was trying to pay cash for everything and keep above the board that way. And it was just bleeding him dry. He never had any money in the company. He wasn't able to grow and any growth that he did have in sales, he found a hard time keeping up with because he didn't have the cash to be able to cover the different materials and his employees labor on the different jobs. So he was really struggling, but we came in, we implemented these steps and by step three, his attitude had completely changed because he was finally getting paid and he started to see some hope in continuing his business. And that it might be something he could build up and be able to pass on to his kids as they got older.
What changed about my business through the process of developing my unique solution?
So, here I am 11 years removed from my bankruptcy and I have a business doing what I love. I'm out there meeting with people and helping people and not sitting back in the office, stressing over the finances and trying to figure things out. And really the sky's the limit for me. The more I can sell the more I can grow because I have my plan in place for growth and for the cashflow to support it.
So what's changed about me through the process of developing my unique solution?
I'm going to say that the biggest thing that has changed for me is that I feel more satisfied in life. I feel more peace and more freedom. And I feel these things because I've had this weight lifted off of me. And because I can focus my time doing what I love, which is sales and just out there working with people and seeing them be able to grow and improve their companies.
So that's about it for my company. Again, I'm Jeremy Lott with Foundation Accounting and Consulting, and I work in your neighborhood.