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Join Up Dots - Online Business Success Made Easy

Welcome To The #1 Global Hit Podcast Join Up Dots

Oct 26, 2020

Introducing Profit first Expert Rocky Lalvani Profit first expert Rocky Lalvani is todays guest joining us on the Join Up Dots podcast. He is a man who believes that the money issues that cause most businesses and people to struggle can be resolved with minimum fuss As he says "If you're wondering how any small business owner could possibly say they have leftover cash, you're not alone. Many small business owners see profit as an afterthought - it’s whatever you see on your tax return after your accountant works their magic. But what if there was a way to turn a profit without completely changing how you run your business? How The Dots Joined Up For Rocky Lalvani As a Profit First Professional, I empower business owners like you to understand and systematize your numbers so that you can spend more time doing what you love. Rather than spending loads of money to hire someone to handle the financials, I help YOU to take control of your profit and your business in a way that makes sense. No financial jargon or advanced excel functions here! Together, we’ll create processes that are simple. I’m not going to ask you to change your mission as a business or fire half of your employees – we’re going to leverage the good habits you already have and put systems in place so it’s easier for you to focus on the work that matters. So where can people start first, if they are in the pulling their hair out and screaming at the numbers phase? And of course, has he ever been in the situation that his clients are and now has seen the light? Well let's find out as we bring onto the show to start joining up dots with the one and only Rocky Lalvani Show Highlights During the show we discussed such deep subjects with Rocky Lalvani such as: Why it is so important to look at both the pounds and the penny's when building your businesses. Dont miss the small stuff. Rocky shares why it is so important to build your financial runway before you start to launch a new business. Be careful how the world perceive you, as if you are thinking too small, you will never gain the income that your talents deserve. And lastly........... If you make a hundred dollars, then you need to look at what you are left with after your costs are taken. How To Connect With Profit First Expert Rocky Lalvani Website Facebook Twitter Linkedin Return To The Top Of Rocky Lalvani If you enjoyed this episode of  Rocky Lalvani why not listen to some of our favourite podcast episodes such as Nick Ruiz,  Sarah Caltieri or the amazing Living The Dream Or if you prefer just pop over to our podcast archive for thousands of amazing episodes to choose from. Full Transcription Of Rocky Lalvani / Profit First Interview Intro 0:00 When we're young, we have an amazing positive outlook about how great life is going to be. But somewhere along the line we forget to dream and end up settling. Join Up Dots features amazing people who refuse to give up and chose to go after their dreams. This is your blueprint for greatness. So here's your host, live from the back of his garden in the UK. David Ralph. David Ralph 0:25 Yes, have a good morning to you. Good morning to you. Good morning to you and welcome to Join Up Dots. Thank you so much for being here. We're gonna have a good show today. And we're gonna get straight into it. Because this is something that is fundamental to business success. And it's not just fundamental to business success, it's fundamental to life success, money and money issues and how to make sure that you've got enough of it at the end of the month, so that you're not sort of screaming around saying I can't save, I can't save, I've got never got anything left. Well, today's guest is a man who believes that the money issues that cause most businesses and people to struggle can be resolved with minimum fuss. As he says, if you're wondering how any small business owner could possibly say they had leftover cash, you're not alone. Many small business owners see profit as an afterthought. It's whatever you see on your tax return RP, your accountant works their magic. But what if there was a way to turn a profit without completely changing how you run your business. Now, as a profit first professional, he empowers business owners, like you and me to understand and systematise their numbers so that you can spend more time doing what you love. Now, rather than spending loads of money to hire someone to handle the financials, he actually helps you take control of your profit and your business in a way that makes sense. No financial jargon or advanced Excel functions here. I love that advanced Excel function. Now together, we're create processes that are simple. And I'm not going to ask you to change your mission, he says, as a business or fire half of your employees, we're going to leverage the good habits you already have, and put systems in place. So it's easier for you to focus on the work that matters. So where can people start first if they pulling their hair out and screaming at the numbers phase? And of course, has he ever been in the situation that his clients are, and now has seen the light? Well, let's find out as we bring onto the show, to start joining up dots with the one and only Mr. Rocky Lalvani. Good morning, Rocky, how are you? Profit First Expert Rocky Lalvani 2:28 I am awesome. David, thank you so much for having me join you on the show today. David Ralph 2:33 I've got to get it out. It's a brain blister. How many people show Adrian Adrian at you have it must be three times a day is it? Profit First Expert Rocky Lalvani 2:41 It does, it happens a lot. Not as much these days as in the past, but it still does happen. David Ralph 2:47 I'll tell you why. I'm glad you don't work with me. I'd be doing it all the time, I just would not be able to stop myself. Now I'm gonna get straight into it. Because I was blown away when I was doing the research. And I put it in the intro. And I've highlighted it. So it can be my first question. But many small businesses and owners see profit as an art default. Why need Yeah. And they you know an idiot? I don't I don't get that. Tell me what's your thinking there because I run multiple businesses, some online, some brick and mortar and profits key to me, I just don't understand that thinking, tell me about it. Profit First Expert Rocky Lalvani 3:26 most business owners don't go into business to do the business of business. They're not accountants, and they don't want to be they have whatever it is that they love, that they want to bring into the world. And more often than not what they love to do, has nothing to do with accounting and the profit side. And so they struggle with it. On top of that. We're not taught money. I have a Bachelor of Science in economics and an MBA. We weren't taught how to build wealth. They don't, you know, you go to school for all these years for what to get a job. But do they teach you money in those years of school? I don't know what it's like in England, but in the United States, we don't teach money in school very often. And so I think that is the underlying problem. It's a taboo subject. David Ralph 4:16 But profit. It's key, isn't it? You look at your overheads you look at your expenses. You know, for example, I run a brick and mortar business, I bought it. It's been going about 40 years, and I bought it about a year and a half ago. And literally every day I look at it, and I'm paying business first. I'm taking profits out so that I can build up a nest egg. So when the taxman comes or the accountants or whatever, I know that I've got the tax return and stuff. And I look at it as a kind of a game where I think to myself like okay, I need to buy X amount of stock, can we get a different supplier so like, I can reduce the amount that I'm paying on there? can I increase that The profit margin of that 150% per item more you know it to me, it's like an amazing game of Monopoly, where you're looking at it. I've never been taught that the only business success or Money Advice I've been taught was what my mom said to me take care of the pennies and the pounds take care of themselves. And I think that's just isn't it. Profit First Expert Rocky Lalvani 5:24 It's true, you do have to take care of the pennies. And a lot of people don't have that attitude of being careful with the small stuff. At the same time, some people will be very good with the pennies, and they'll mess up the pounds. So you have to watch both ways that you're not making big mistakes. Because business big mistakes are what blow you up. You're a rarity. If I look at business owners, and I was shocked to learn this, when I learned this, I literally almost fell over 80% of business owners are not looking at their financials. 15% of business owners are looking at their financials, but they don't understand exactly what they're seeing. They've got some idea, but not a perfect idea. You're part of the 5% that know your numbers, look at your numbers, understand your numbers and make decisions on your numbers. And that's probably why you've had so much success. David Ralph 6:21 You know, I don't do the accountancy, I've got an accountant. And he's very good. I've had three accountants, the first one was more interested in showing me his new iPhone, that I was probably buying him. And then the second second one I just didn't trust. And then the last one is He's really good. So the accountancy side I don't get involved in he just tells me what the tax is. But the basic day to day is key. Now for somebody who's starting a business, let's take it right back to sort of basics. Somebody is thinking of starting a business and up to this point, they've been an employee, where at the end of each month, they get a wage, and it comes in, and they never query about their human resources have paid the right tax or whatever. It's just what they've got, before they even start. Is there something that I can do Aki, in your view, that can actually set out the foundations for both their personal life and their business life? But when they're sort of moving forward? What What can I actually do, which is a really good first step. Profit First Expert Rocky Lalvani 7:21 So a first step, I think, is to make sure you're on a strong financial foundation. So if you're looking to walk out of a job and start a business, I think the first thing you need to realise is that this is a long journey. And more often than not, it's probably going to take you three years. So my question to you is, how are you going to survive for three years? How are you going to get through that period of time. And if you can't, and you don't have a plan? Well, before you leap, make sure you have a plan. I mean, you can jump out of an aeroplane anytime you want without a parachute. But you can only do it once, right? If you have a parachute, you can do it many times. So before you leap and start, make sure you've got a parachute that's going to carry you for three years. As you build your business. The second thing is put pen to paper and figure out all of the numbers, right? Nobody creates a business plan that that creates a business that's destined for bankruptcy, everyone puts together a business plan that shows success. So put together your business plan. And then really pressure test all your numbers and your costs, and go to some other business owners and show it to them that are in the same industry and say, I'm looking to start a business. Here are what my numbers look like, what am I missing? Is this realistic? And how long do you think it's going to take me to achieve that? At the bottom is the financial foundation, you go into business to make a profit? And you should be up front with that. Is this doable? And is it realistic? Too often we go in with these big wide eyes, you know, Oh, look at that guy. He's got a seven figure business. He's blowing it out. He said he only works four hours a day. Most of those people are lying. Be honest with you, right? Yeah, they're they've got a seven figure business and they're spending seven figures on it, which means at the end of the day, they're barely making any money and who wants to work hard for nothing. David Ralph 9:25 One of the things that we do in our business coaching or where we create online businesses and one of the things that probably drags my clients down a bit because I they all seem to build I get the feeling that they want to steam into building websites and the sexy stuff. And I always say to them, what should keep the lights on bigger if you take away all the luxuries of Netflix and Amazon Prime and all the things that we think that we should add in a Starbucks coffee, just pay your bills. What is that bigger and then how many clients do we need to get to pay for that? Bigger. And it's one of those things that I think is kind of common sense starting a business by thinking, what do I need to survive? And I speak to some people and they go, yeah, 12 million a month, 12 million a month. And I go, No, you don't? You don't need 12 million a month. Yeah, that's what I'm aiming for. I said, great. I am Papa, I am for 12 million a month. But what do you need to keep the lights on? And that is something that people can start working on, isn't it, where they do their personal budget, and reduce memberships and gym things and stuff that we just waste on a monthly basis to bring that bigger down, so that they got that cut and dried? I need three clients a month to pay for this? Where are those clients and start working towards them? Do you agree Rocky? Profit First Expert Rocky Lalvani 10:47 I do agree. But I'm going to caution people. David Ralph 10:51 You say you agree, but there was I knew you weren't agree. I could see that. I've been married for 50 years. And there was that woman's vibe in your voice? Profit First Expert Rocky Lalvani 11:03 Here is my caution. Okay, most business owners look at top line revenue, and think that's what they're going to take home. So when you say how many clients? Do I need to cover my basics? It's not, it's not okay, I have three clients that pay $1,000 a month, I have $3,000 coming in. Yeah. And my monthly costs that I need to cover 3000 your revenue in is not your revenue that you can actually spend, you're going to have to spend money to get those $3,000. So what is your net number that's coming out of those clients? And how many do you need to where does that net come out so that you can cover your monthly not? It's not I tell business owners if you have a 5% profit margin, for every additional dollar you spend, you need $20 in revenue. And I don't think that sinks in that top line revenue is not equal to spendable dollars. So that's my only caution on that is how much revenue? How much is your top line going to generate bottom line that's going to allow you to survive at home. And that's my my only caveat to that. Well, I agree David Ralph 12:17 with your caveat, I hate to say that Rocky, because I like to argue with every every guest I have on. But I do totally agree. So this is going to be like a tennis match, I'm now going to bounce it back like Phaedra to net Tao is coming back across to you. Now when somebody starts, you don't know the expenses. You know, I'm still blown away by what came out of the woodwork. But I just didn't know I needed to do and pay for on a monthly basis because I've never done it. So how does somebody out there come up with that bigger of yes, I do need this to pay the bills at home. But I also need this to pay the bills for the business. Because I don't know what bills I'm going to have because I've never done this business before. Profit First Expert Rocky Lalvani 13:01 And that's why I said number one, come up with a business plan. And number two, go show your business plan to people who are doing the business you're doing. And ask them if it's realistic. And it's real, you know, in b2c, so business to consumer sales, prices are generally low. But if you go b2b, everything costs 10 times more. So be aware of that if you want somebody to build you a business website, they're probably going to charge you a lot of money. And go go shop around say how much does it cost to build a website, go look at all the software. These days, everyone is buying so much software, oh, I need an email programme, I need a CRM, I need all these different things that you can buy, all those things add up very, very quickly. And then credit card fees, you know, the credit card companies taking a cut off the top. If you've got an account on one of these selling platforms, what are their fees? So do the research in and then go ask people and you know, in today's world, we're so much more connected than ever before. There's online forums for business people, there's business coaches, sometimes it may just be worth it to go to a business coach upfront. And just pay them to review your plan to say is this realistic, but there's tonnes of information out there, you've got to you've got to put down your numbers. So don't just go to somebody and ask questions. Do your homework first. Create your plan and then go ask five people is my plan realistic and don't go ask your mother go as somebody doing the business that you want to do? Is this realistic? Now David Ralph 14:44 in classic Join Up Dots territory, we're gonna bounce back and move away from the content more tsl. So I was reading your about page. And one of the things that you mentioned on your about page and I do like about pages is the fact that The world changed and you didn't keep up with the changes of the world lesson learned you say, keep up with the world. Now. Tell us about the rocky before you started what you always you know, putting your hands in your pocket and bringing out mops and and shackles and trying to sort of barter your wife for services, you know, how did you actually operate? When did you actually get your money acumen. Profit First Expert Rocky Lalvani 15:28 So, I grew up in a in a slightly different situation. We're immigrants to the United States. And my parents came here a long time ago when I was a little kid. And they were starting over for their second time. And so they had $25, in a lot of their friends came over from India around the same time. And as I was growing up, I watched them quickly move up the financial ladder. But the parents would get together and they would talk about money, they would talk about how much they were making, how much they were spending. And so I had financial conversations as a kid, and I just whatever reason, I wanted to be a millionaire as a kid. And that was my goal. And I would read the Wall Street Journal, I would go get jobs as a kid, I was very entrepreneurial, in that I would go into New York City buy stuff, bring it back, mark it up 100% and sell it to my schoolmates. So I was always flush with cash, went to college, and then and then I fell into the trap of the enemy of greatest good. And so I kind of wanted to start a business, but I didn't know how. And so I got a job. And the job went pretty well. And so I followed that for quite a few years. And then I In the meantime, I started building my site businesses, and they It took years of side businesses before I went full time. So it was a process and I'm a slow learner, unfortunately. David Ralph 17:01 And did you do the thing? Did you reach out to other people and say to them, you know, this is what I'm thinking of doing? Is my plan, right? Or is this something you've learned from experience? Profit First Expert Rocky Lalvani 17:12 So it is, yeah, I The problem was, I was slow doing all of that, you know, looking backwards, had I done it faster, I would have had much faster success. But yeah, I did go and I would constantly read like I would get on the forums and read how other people were doing things. And when we started in our real estate business, a big part of what we did was to run the numbers down to the thing and actually do the math. But on top of doing the math, we built in risk tolerance. So we would add up and say, okay, we think it's gonna cost us $20,000. To do all of this, add another 10% to the budget, because we forgot something. So we're gonna budget for 22,000. when we'd go selling costs, we go, well, the realtor is going to take six, and it's going to be another percent. But something's going to come up. So let's make that number 10%. You know, I don't think we need to replace the roof. But let's go ahead and budget for the roof anyway, just in case we have to so we would kind of we would calculate for overspending. And then we would come in below budget. So we did do a lot of that stuff. And I did go. And that's the other problem, though. Because as you as you watch some of these things, as you listen to some people, they don't know their numbers. So when they're giving you numbers, they think they're giving you the right numbers, they don't even know they're around. So be careful who you listen to always look at who that person is, are they financially successful? Or do they look financially successful? Because that's two separate things. And and I think that's where sometimes we get caught off guard. So yeah, go pressure, test your numbers. It's a big part of it, I think. And then the other problem I had, especially in the beginning was underpricing, my services. I didn't realise how much people were willing to pay for good service. So I undervalued myself, and that is something else that I think we tend to do. David Ralph 19:16 I think everyone goes through that, you know, I know I certainly went through that. And what I offer now to people, they generally will come back later and say, gee, you know, somebody else is charging x y Zed. But, you know, it's it's one of those things that you have to grow into your own personal belief that the value that you are providing is worth the money. And I just don't think that we have that at the start. I certainly didn't. You know, I look back at some of the things that I did in the early days. I was basically bending over for $50. You know, it was it was like nothing really and the amount of value that I was providing for that. And what I found Rocky and I talk about this a lot is you get the sky customers, you get the terrible ones, the ones that just argue with you all the time, and they want more of a more of a more, when somebody actually pays you value, your life becomes easier, because they do the work, they listen to you. And they turn up on time. They just become better customers don't know. Profit First Expert Rocky Lalvani 20:20 They do. And you know, that's one of the surprising things. And I've heard speakers talk about this a lot. If you undercharge, people don't think you're good. So the price you pay signals, how good you are at something. And I've heard many times people say, you know, especially for like corporate speakers, they wouldn't get hired because they were charging too little. And the company thought, well, we want a $20,000 speaker, you're not a $20,000 speaker, because you're only charging 5000, you're not worth it. So be careful how you how the world perceives your value. And the people who are willing to pay you more are exactly what you talk about. They are better customers. And so the harder you work, the less you make, because you're in that grind, customer, you know, the less you work, the more value it's perceived, the easier life becomes. And I think that's a lesson learned. And we don't always believe that up front. But but it's very, very true, David Ralph 21:23 is true. But they don't know the answer of how to give people that personal belief. You know, I've grown into it. I've been through the journey. I've been doing this for nearly 20 years now on and off with different things. And so I understand the mechanism, I can provide the value somebody can come along, I will give them what they deserve. But I don't think I could have just done that. Unless I'd been through the struggle and learn how it all works. I don't think that you can just have that belief. right at the beginning. Do Profit First Expert Rocky Lalvani 21:58 you know what, again, there are certain people who do and they just go for it. And there are others who kind of have to work through the ladder. The question is, and again, I told you that I struggled with this was moving through that ladder faster. And until you break through those barriers, it's difficult. And that's why sometimes having coaches or trainers or mentors or reading books to help you break through your barriers, is the biggest thing I tell most people, the biggest obstacle you will face is the mirror. Because it's you that's holding you back. It's not no one else in the world is holding you back except yourself. You've got to overcome yourself. And when you do that, that's when greatness happens. David Ralph 22:48 That says some words that really helped me every day. We're here again, Jim Carrey, Jim Carrey 22:52 my father could have been a great comedian, but he didn't believe that that was possible for him. And so he made a conservative choice. Instead, he got a safe job as an accountant. And when I was 12 years old, he was let go from that safe job. And our family had to do whatever we could to survive. I learned many great lessons from my father, not the least of which was that you can fail at what you don't want. So you might as well take a chance on doing what you love. David Ralph 23:19 Now, what interests me with view Rocky, and it interests me with so many people, but a business only has to be a simple transaction of value to somebody else. You know, I always reference there's that lady on Netflix, Marie Kondo, I think her name is my wife was obsessed with her. And all she did was teach out of throw stuff away and tidy your drawers up. And she's made millions. And I used to think it's a business, you know, do people pay for that? And then there's this other group on Netflix that my wife's interested in, but just teach you how to put your clothes in varying colour schemes. And I think myself doing all right as well, with yourself when you started your business, did you feel that you had to throw the kitchen sink at it? Did you try to provide more value and actually the customer actually requires and in many ways, confusing the customer because they didn't really totally understand what you was offering. Profit First Expert Rocky Lalvani 24:21 That does happen, right? Because I think in the beginning, in the beginning, they'll partially you need to build raving fans. So in that sense, I think you need to deliver more value, especially up front so that you can get yourself established because your best advertising is a customer well served. They're going to go tell everyone how great their decision was to work with you or to buy from you. at the same point. The other struggle is being crystal clear on what you do in how you do it. I think too often we make our messages You too complex, you need to make your messages such that a five year old can understand what you do that grandma can understand what you do. So there's there's two nuances to that I feel between the two, by the way that Jim Carrey story, that was the driving factor behind me, from the time I was a kid, I used to read the Wall Street Journal. And I would every time we had a recession, you would see people in their 50s lose their job. They were at the height of their career. And they didn't know how to pivot, because they thought they had safety. And then they would struggle and things would go wrong for them. And I was always like, I want to be at that point, when I'm 50 years old, that I have enough financial wealth that I can tell the world go screw yourself, if you fire me, I can go do whatever I choose. And so that was actually kind of a motivating factor for me to build wealth over time, was knowing that I could get fired at the top and that I needed to make sure that I had a strong foundation under David Ralph 26:08 its I used to work with Phil Collins, the drummer from Genesis, he sister in law, Lynn, I used to work with her and I used to know his brother, remember Phil Collins in in the old days on you with me with this Rocky? Profit First Expert Rocky Lalvani 26:24 I am so I grew up my high school years were Phil Collins, I have all his albums, I listened to all his music. I have one of his concert CDs where it's he and Chester doing a drum duet. If David Ralph 26:40 you notice that, well, Lynne was working with me. And she was a lovely lady. She really was. And the owner of the company was really bad to a really bad. And then one day she came in and she said, Phil has given me my f off money as she called it. And she said from that moment, and she never told me how much Phil Collins gave them. But he must have given them a fair whack. Because she said from that moment, it was just liberation, I knew that no matter what happened, I could just say, screw you basically and be gone. And I always used to think about, oh, yeah, why do people not build to that, because I could never go back. If somebody offered me a job. Now I'm never going to take it Not in a million years. Because there's too much about being in control of your own destiny, which is, which is absorbing to me. It's powerful. It's It's intense, every single day. But the majority of people who are finding it out now because of the situation or we're going through, just haven't got that fpu money ever, not even a small is not even an F money. They haven't got either of it. Profit First Expert Rocky Lalvani 27:49 And and that's very true. People are not taught to build wealth. Even business owners are not taught to build wealth, they put all their eggs in that one basket. They don't they really struggle with the concept of remove money from your business, and use it to build wealth ou