During today’s show, Paul Hood (CPA) breaks down the importance of knowing your variable expenses, your break-even point and your tax liabilities.
Broadcasting from the Thrive time show studios in beatbox that rocks it is Tulsa’s number one CPA and every way he’s a gentleman it’s time to take a look under your financial Hood with Paulalright Hood Nation, alright, 1170 folks, alright Thrive Nation. Welcome back to I look under the hood with Paul Hood work. Each week we break down. We dissect The Proven moves strategies, tactics needed to become financially successful regardless or a little money, whether you’re, self-employed or you work for somebody else. These strategies work, because it’s really not about how much money you make it’s about how much money you keep it’s not about how much money you’re earning this year, it’s about being proactive about where you’re putting that money a budget is really declaring to the to your Money, this is where the money is going to go as opposed to asking at the end of the month. Where did the money go? And I don’t know anybody better, more equipped, more passionate about your financial success than Paul because of your a CPA. That means you’re a certifiedwhat accounted. That means that you’ve really had to have invested in some considerable education to become a CPA to if you are a CPA who has been doing the same thing for over 20 years, you have me pretty committed to that idea. The customers not just hundreds or 10, but thousands of happy customers all over the region. That really shows that you’re probably went fairly committed. If you have the largest accounting practice in Claremore, it shows that you like RSU a lot I mean if your the largest business coach or accounting practice in Bartlesville. It probably shows that you go to Bartlesville for the largest accounting practice in the region. I mean you’re growing, adding more more customers Paul. It probably shows that you’re pretty passionate about helping people financially get to where they want to work where they need to go financially. Why are you so passionate about this idea of doing your accounting as a front dashboard and not just a rear view? Mirror hey clay, good morning.? I am excited in a beautiful morning, and – and I were talking about counting – were talking about success. Cuz, really accounting is kind of the background of what we’re talking about, but really we’re talking about success and of the reason I’m so excited about the future in the New Year this coming around is you know, people out there doing the hard work and more and More people are coming in and letting me help them guide them help them measure has helped them it’s like a personal trainer. You know you got people, you got all these people that need to get in shape now. They’Re they’re actually doing something they’re, just not getting the results and they’re not measuring the results. So it’s exciting to see people get excited about the fact that they’re actually keeping more saving more protecting more kind of what we talk. People do, and you know we really all we do. Is we talk to people about measuring thing and we measure things all the time. You know we look at thermometers. We look at that at your scales and all of that.. You know you’re my business coaching. I got a question for you, so I always think about how can I measure mood rings not really into the whole mood ring the old what you know some? Sometimes you walk in and your significant other. You don’t know if she’s in a good mood a bad mood. Sometimes she hides it if we could invent a mood ring that really measured. How happy would that make life? I can tell you this. I’Ve been married now for 16 years and I have determined to two things: 1. If she’s happy, then, as a general rule, I’m happy, so I really go out of my way to try to make her happy or try to try to not make her unhappy about that. Is I really discovered that typically there’s certain things I will do that will cause her to get upset and so, but I usually don’t know that she’s even getting upset until she’s upset, I don’t know dude. I don’t understand how I wish I did have. A mood ring is a lot of times I feel like I’m. Things are going well and then, when I ride break my break up inside, it’s always an odd you stupid thing I did, but I can’t see it at the time. Nor do I see that it’s getting bad and then once it’s bad, you know when you can you just get to the when you’re going well at the dog lives out here. I suppose I could probably live here, maybe you’re starting to think maybe the dog and I we can share clothes, and maybe you just start when it gets to that level, and you realize okay, what did I do wrong as a business coach? I think that are our passion did the point of this show and some people have found themselves in the doghouse Financial, where you’re just going well debit card number one got denied. Let’S try number to Quick Trip. I love you I’ll see you do this you’re going. Let’S go with card number to school, with card number 300 that went through yeah must be a computer glitch to see which card is going to go through a top rare thing. It’S about just a basic financial planning thing. So when you meet with somebody for the first time, what are the things that you guys do as you do an 11-point assessment with every single person in one of the questions you ask them what is on a scale 1 to 10, with 10 being the highest? How highly would you rank the overall productivity of your current accounting orange cabinet? Why do you ask a question? Well, you know what you just described as far as your wife is what a lot of people treat their counties are there in this oblivious World? They really don’t want to know they put their head in the sand until all of a sudden things blow, I’m showing up 2 hours late 2 hours, late I’ll, see you in the great I’m sure went out 2 hours and she’s mad.
I don’t get it meaning that way in a proactive means. You actually looking ahead and your kind of you know you don’t have to be psychic. You just look at the numbers and you measure about where you’ve gone and where you want to go. What percentage of but I have a client that come in after you sit down and do a deep dive? Do they say you know what turns out my account to do this bro I’ve been helping me guide me along the path for the last 20 years, like you’ve done with Charles coli with colaw Fitness, a mutual acquaintance of our mutual friend of ours have been deleted. My account has been leading the way and I don’t need anymore proactivity. Frankly, I have too much pride to say. I have never heard that. Never not once not even like we’re good here. My account is very proactive if we meet once a month and we aren’t sure if they, if that ever happens, I’m hoping that happens. I want the guy or girl’s name, and I want to join our team. Will you want to come work with us? Come join us. You are Yoda to come and help us it is it from chapter 1 of the look under the hood. The book that Paul has put together here. Supermoon number to you, want to know your variable expenses. I’M calling you from your book. It says variable expenses, as they sound go up and down in proportion to sales, if sales increase variable cost decrease and vice-versa businesses determine their gross profit per unit by the difference in sales and variable costs. But what that means is that safe, a cost that goes up and down based on your sales, so fixed cost is at Baseline. We have to get over, and in variable, cost are what we come out of cells to determine what are prior gross profit is in one of the easiest way to do it, which people don’t do. Is you create a 12-month financial statement, and you just look? Okay and you, you look across the line, and so you know we have food Cocina, restaurant food cost, yeah and you’ll notice. They go up as cells go up, there go down as cells go down and yes, and so what we have to do is we have to try to it’s not like running a race. You know you’re, always running nose. Variable costs are right behind you want to create a bigger gap between you and the variable cost. Can I share something that did it could come across to some of our listeners as not politically correct, but I want to throw this idea if we’re watching a marathon we’re watching a marathon TV. Typically, the Kenyan will win if you watch a marathon. Typically, the white guy wear white guys: okay, cuz, I’m not ripping all white guy, hates white white white guy, Dwight or a berry. Howard will usually be finishing, like 30 East 32nd, and he looks tired. It was a great skinny. It’S like he hasn’t eaten in. Like 3 weeks 3 years, maybe I took him to the Isaacs on a starvation, fasting diet or something some religious quest to not eat food again if they can hang out with Gandhi, but the kid is always wins. If you watch the sprinting, it seems like the Jamaicans dominate that and then some guy named Craig he’s in good shape, as friends are always kind of jacked. That guy always finishes 4th in the world of business. It’S the proactive guy that wins the race of business. It’S the proactive lady that wins so want you to all ask yourself this question this question right now is: if you, if you ask a question – and you say I give this a 10 – that you really don’t need the help of of football. I don’t want you to rate yourself on a scale of 1 to 10, with 10 being that you absolutely have a hundred percent confidence, that you know your variable expenses and that you know you’re setting aside enough money in your savings for compound interest to work. For you on a scale 1 to 10 is, I definitely know my accountant is helping me be aware of all my variable expenses. I know that I’m not surprised by any costs if you on a scale of 1 to 10 rate yourself in that area. Dude. How common are you know, you’re very expensive. The 2nd is on a scale of 1 to 10, 10 being the highest one being the least. Are you that you’re saving enough money that the power of compound interest can work for you and can help you fund your retirement? You need to go with business coach client Paul talk to me about this. How often do business owners come in and all of their variable expenses? They truly know all their cost and very aware of it and they’re did they just say this consultation with him well against virtually, never because they don’t even know what variable costs are and clean. The exciting thing is: is you use in a running analogies is: is the races you race, you know it doesn’t matter if you’re in a marathon, if you’re in a Sprint, it’s your race and what we do is we help to find the path in and then The process or the train process to get there. I got a funny story for you. I ran a marathon whole thing. I hated it yeah is, I just wanted to get it done. I went real quick. Why clay at one of the 26.2 sticker to put on my window do this? I did it. It was a year ago it was in 2016. How old are you now, I’m 50 years old, you like death for the next week.
You know it. Here’S what it was play, the worst thing in the best thing was it’s humbling, because about mile 20 I’m struggling yoga six more miles to go, and I swear this lady had to be a hundred and fifteen past me. She just the oldest lady in the history of the world done on Charlie Brown. She dusted me so you finish like we you, the last person to have to pull an all-nighter to fit watch. This is how long does it take? It took up Mia right about 5 hours, 5 and 1/2 hours, something I wanted to accomplish, and so I’ve got a buddy of mine that ran the Boston Marathon and he did about the same time about five and a half hours and he was riding up at The elevator, with a gentleman that you said usually wins the the the guy said or my buddy said: hey, did you guys rent? Do you want to die and of course he did and said yes and and my buddy said well how’d you do and he said well too, too bad little over 2 hours. So he asked my friend how: how fast did you go and he said about 5 and 1/2 hours, and my friend said: how do you run that fast in the Kenyan looked at my friend and said? How do you run that long? So it’s all a matter of perspective play. You know he bought that more amazed, one-brand to fast, for one couldn’t believe he could run that far. That long, you know the Boston Marathon eyes is obviously a famous marathon in 2017. I just want to get their results here for the listeners. Is this I’m just fast? I don’t even know how people can run this fast I’ll see if I can pull up the stick disease that you know what the fastest time, if you’re, if you’re the man who the fastest marathon runner what’s supposed to be the fastest time, do you want to Get that isn’t that, like, if you’re really good with how fast we go in here, I would say you know: 2 hours, 20 minutes to hours and 30 minutes cuz. I know Jeffrey moutai of Kenya ran the fastest marathon ever at the time of two hours and three minutes in 2011 at the Boston Marathon, and I can’t run to the quick trip down the street that that you. That quick, I mean that’s just that smoking. It was since surpassed by Dennis Kip Prudhoe and Brew Pub in Berlin for 2 hours and 2 minutes Dennis doesn’t sound like he’s Canaan, but but we had somebody from Ethiopia. Do the women’s course record for 2 hours and 19 minutes to get to canyons? In the conversation, so stereotyping of the Marathon winners turns out to be correct. I’M pretty sure I can run it two hours with the right when I think I think the difference is they had the wind at their back. If you are looking to do you have a proactive, get your account and go to hood CPAs. Com today schedule your one-hour consultation with Paul Hood Tulsa’s number one CPA Hill, give you an hour of his time in a free copy of Warren Buffett’s book snowball. But you got to go to hood CPAs. Com. What’S going to tell her to CPAs. Com, go there today, have you ever found yourself running out of money before the end of the month? Are you saving enough for retirement? Are you getting ahead financially Tulsa and business coach clients? If you need to look on your financial Hood, you come to the right place. It’S a look under the hood with Tulsa’s number one CPA and every way, alright, with Paul Hood CPA in every way. In every episode we do every show we do every broadcast. We do what we do is we want to make sure that we teach you something you did not know about accounting on the way we want to help you get to where you need to go. Financial in specifically were breaking down we’re breaking down Paul hoods book. Good call a look under the hood that he gives to every one of his clients or break sounds super move number to which is knowing your variable expense it, and we just finished wrapping the rabbit of that conversation remove number 3. Would you have to know the number of customers you need per month to break even if you’re, self-employed, and if your family have to know the amount of money you need per month to break even Bill Gates? If you were here, he would say no, your numbers is a fundamental precept of business once again Bill Gates, the co-founder of Microsoft, says other worlds number to the world’s second wealthiest man. Right now, behind only Jeff Bezos with Amazon, he says doing your numbers is a fundamental precept of business. Again, it’s a precept. You need to know that you need to know that if I was in the shower right now – and I am not self-employed – I am an employee – I have a job. Why do I have to know the amount of what? How important is it for me to know? The amount of money my family needs to break even and what percentage of people by default know this number very few, if any, you know there’s a few proactive people out there personally that set budget, but you know Clay how come you have to? Why do you have to know how much gas is in your car? Why do you have to know if you’re trying to get in shape by what you’re eating, maybe you need to eat more mean to eat less than what you can do, as you can? Actually, just not look at your gas gauge turns out you’re running a gas, it happens happens, you know, if you don’t look at your numbers and Define what you can spend and where you want to go and how much you need to save.
You know we help people back into when do you want to retire? Why are you working when do you want to retire? How much do you need when you retire and let’s back into what you have to put away and call you talking about teaching people, something everyday that that were on the radio that they didn’t know? You know we talked about variable cost we talked about fixed costs. Did you know that sometimes you want to take one, this type of cost, to move it from one class to another friends if you got a payroll payroll payroll, so I can relate to that is as long time does a fixed cost. You have to pay these people, whether they you don’t waste 2 hours on Facebook or not, and so, if you can show up as if you can create a system to where they’ve been saved by spay, all of a sudden, you know they make more if they Produce more, therefore becomes a variable. Cost becomes a positive thing instead of a negative thing. I will give you an example of this because at scale when you scale a business, we exponentially grow a business. If you haven’t nailed your numbers, you will fail because of your numbers. If you haven’t nailed your numbers, you will fail because of your numbers if you scale something. So let me give me example: oxyfresh is a business. I’Ve worked with out of Denver Colorado works of John for a long long time. Now. Today they have hundreds of franchisees all across the country may have a call center. So if you, Google, search real, quick carpet, cleaning quotes just how many Google reviews do you think that oxyfresh has today now they give me this a long long time he’s been a business. Coaching client been a friend of mine, his partner with the elephant in the room, Men’s Grooming Lounge. How many reviews do you think we have today will? Let me put my account had on so we’ve got three offices at hood cps.com and we’re approaching about a hundred reviews at each office in in a we work that has been deliberate and intentional. So asking your customers to write some see: reviews of ejected reviews. Yeah we’ve actually put computers up at the desk, so you know we work hard. We were almost a hundred on all three offices which puts us way above by the way we did have a client. Come in and see that computer she and he said brand new clients at the wonder. You have so many reviews as well bro act and we were delivered on it. So let’s say they’ve been doing little bit longer. 5000. I’M that’s that’s my business coach number. We have a 122723 as of the time of this recording them so close up on the screen right there for you there you can see if there is one it’s now. Why do we have that many reviews? It’S because we’re proactive, proactive, asking clients to write reviews at their happy. Second thing we do is wear ProActive at the call center. We have switched to call center from a hard cost to a variable cost as Paul Mitchell, which means it all of the call center reps get paid based on performance, not based upon just flat rate based upon just showing up to work. So, I think, is great. An incentive for the employees in the team members to want to achieve it they want to perform at a certain level so that they can. You know, based upon the number of carpets, a book. You call the phone number there conversion rate the percentage with which they taking inbound, call and turn it into an actual appointment. They get paid based off of the results not based just upon the hours know. Most people don’t have a team of people like I do to sit down and help them make a pro-forma, which is a a a projector. Look at your future part of a financial performance you’re. Looking proactively you’re saying here’s a future prediction of financial performance based upon these variables, we need to do XYZ love. You don’t even know how to set up a merit-based pay program, but yet QuikTrip is a merit-based pay. Company Southwest Airlines is a merit-based pay company. Most of the top flying cover-ups is a merit-based pay. Company Starbucks is a merit-based pay company. Most companies are a merit-based pay company through winning the ones that are kind of unionized and flat rate. They lose that’s right, so pulp, I’m listen to show right now. I need help setting up merit-based pay for my office in a way that Stacks compliant and compliant with all the laws and regulations. How can I get ahold of you? What are the moops, where you go to work? First, I’ll call you. I must say this, but I think we might need to back it down. This is a Morning Show what I Envision we’re getting so exciting people getting so excited about their numbers. Not you know you mention a couple of things there, the numbers and you determine. We need reviews you determined when needed. We needed in Sydney base pay, because that those are numbers that that’s, how that’s a great example of it’s not just taken. How much did we spend on accounting? How much did we spend on rent it’s it’s different analytics at you, look at to get to guide your business, and so I you know, I’m pretty excited I’m out in visiting people speeding on their way to Starbucks and if we need to back them down a Little bit settle down settle down, I took siding, go to my website, hood cph.com and you fill out a page will set up a free time an hour of free. What I don’t know how to do it.
Maybe I could pay them to come see if they would benefit for it. I don’t know how to create a better incentive than FreePlay. I have a very very funny example of. Are you behaving well? There was somebody who’s, a mutual friend of ours and they said just borrowed a good guy and I said yeah, so why is he was a good guy shows up on time to meetings, dresses, sharp clients like him, his boys, like him, people I know like him. I’Ve, Google search him, I’m actually really good in a deep dive on the guy. I was out, reservation recommended and they will do a consultation, so he can she meet and, as she tells me, she says, I don’t even know what we were paying are a curtain. Current business coach accounting to do because we called the accountant to say, hey we’re thinking about switching from you to Paul Hood, because Paul hood is offering abc123 at a flat rate. You charge people flat rate per month for the accounting plant, there’s not always extra charges, which is a huge thing, and you remember what the she told you that they did the other account and said that he didn’t. She just sent him an email that I sent an email with the multiple questions and the one of his only response was well. If he’s fixing to go up next year. That’S that’s all you’re going to end up paying me more. So it was. You know it’s not like I’m going out there trying to take clients really. I wish all account and I don’t they’re trying to help you take like you’re, not trying to I’m trying to do that. You have a more realistic heart. I just tried to take all the business and get to bother cuz he’s the best. I appreciate that, but you know what other accounts would do this. It wouldn’t be that big of a deal, but I just not doing it, but you don’t most businesses, don’t do it most business owners. Are there good technicians, they’re, good plumber, there, a good electrician there there, a good accountant but they’re they’re, terrible at running a business and measuring success and creating duplicatable systems for a surgeon, you’re a doctor or dentist your lawyer, you have any type of income at all. You really do need to meet with Paul Hood with hood CPA, so you can become proactive about your accounting and just for sketching a one-hour consultation. He’S going to give you a copy of Warren Buffett’s only authorized biography book is called snowball. It’S a game-changing book and he’s going to sit down with you and invest time. Do it complete evaluation with you to figure out where you are versus, where you need to be financially but Paul? We have time for one more super move in your book. You talked about the importance of knowing your tax liability. You ride, your taxes are a necessary evil, but can be planned for and actually mitigated. Think of the IRS is a business partner when it comes to justifying things that can be deducted. Taxes are necessary evil, but they, but with big the candy. You can plan in a way that can mitigate your tax liability. What you mean by mitigating and what do you mean by necessary evil Evil’s? If we don’t pay it, they put you in jail and why is it evil? We can get real deep and politically into me. It’S current your current. Slavery and they just take what they take our stuff clay. So you don’t like the idea of taxation without representation of the people that won’t work and they awesome a trillion dollars to build a missile and just different stuff like that. Just stop it quit taking our money, and so the IRS is a business partner. And if I can sit in front there – and there are things that are black and white they’re spelled out, this is what you have to do, but the reality is if I can sit in front of an IRS agent see. This is why we took this to Dakshin. This is the result. You sure 30 % go away and leave us alone, and then we can take the deduction most people, the Most business coach accountants. You think they they work for the IRS and the reality is, is the more the less taxes we pay. This is going to be. You might want to write this down the less taxes we pay, no more profitable. You are, which means the more taxes you pay in the future, so tax deductions actually make the government money. That is a profound thought. I blew my mind early in the morning. I hope Nation, if you are wanting to schedule a conversation with Paul hood hood hood. Cps.Com today and it’s Hood cbs.com and schedule your consultation he’ll, give you a copy of Warren Buffett’s only authorized biography. The book snowball will see you next week right here in a look under the hood with Paul Hood.