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What it Takes to be a CFO · The Spiro Podcast: Managing your Real Estate Photography & Videography Business

0:00
Coming up on this episode of The Spiro podcast.
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But the feeling of being invincible can really bite you in the butt
0:08
because what we do when we think we have money
0:12
is we spend it.
0:16
And we typically as a culture in 2024,
0:22
we don't spend it that well
0:24
Welcome to the Spiro podcast.
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Managing your real estate photography and videography business
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with your hosts, Todd Kivimaki
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and Craig Magrum
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Hi, and welcome to the Spiro podcast,
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Managing your real estate photography and videography Business.
0:43
Spiro is a software platform designed to help you manage your day
0:46
to day business and really help you grow and scale your real estate.
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Visual Marketing Company.
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I'm Craig Magrum, host of the podcast.
0:53
Welcome to Another Week.
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If you're a regular listener, if you're a brand new listener, welcome.
0:59
Like I said, the whole idea is really help you grow and scale
1:03
and manage your real estate media business.
1:06
We're all about the business side of this industry.
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Lots of great resources out there on the creative side that,
1:16
you know, just really good, really good information.
1:18
But we like to talk about the business side and how to build a healthy business.
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Here to help me do that every week is Spiro
1:25
owner and founder and co-host of the podcast Todd Kivimaki
1:29
Welcome back to another week, Todd.
1:31
Oh, it's it's a great week to be here.
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It's great to be here.
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This week, both of those are true, but glad to jump into this.
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It's a much needed topic and it's not always one in the limelight,
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but it's one that if you ignore there is going to be problems.
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Yeah, for sure. For sure.
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And here in the States, you know, we're at least in the northern half
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the country, we're headed into more the slower season.
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And, you know, so things slow down a little bit.
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We've talked in some past episodes about, you know, how do you
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manage and, you know, schedule your time when shoots are slower.
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So check out some some of the old, old
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podcasts, past episodes of the podcast to help you during that
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that time of the year and time you might notice
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for those of you watching on YouTube.
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Normally I wear a colored golf shirt that's just kind of yeah, just different.
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Yeah, I'm wearing t-shirt today
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and we'll try and try and describe this for those that are listening.
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But I was I was on social media and I just this is a rabbit trail,
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but I just want to make a public service announcement
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on behalf of the Thanksgiving holiday.
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Okay. This is the second week Thanksgiving.
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And I've already seen people say now that Halloween's over, it's Christmas time.
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No, no, it is not.
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I'm a Thanksgiving purist. Darn it.
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We got to give Thanksgiving, as do so in honor of that.
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I'm wearing a t shirt.
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Those of you on YouTube, you might see this
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first annual WKRp Thanksgiving Day turkey drop.
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Turkey drop. All right.
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Those of you familiar with the sitcom from the 1970s and eighties
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WKRP in Cincinnati, there is a classic episode
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about a station promotion they did called the The First Day Neal Turkey Drop
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absolutely hilarious, held its purpose.
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And Todd and I we're talking before the episode here.
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He's never heard of WKRP in Cincinnati.
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Yeah, I'm sorry. I'm really in the dark in this one.
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I don't know what this is.
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You're not that much younger than me.
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I could have sworn, you know that.
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You would.
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You would know this classic American television sitcom.
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Well, I don't get a lot of TV or movies.
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I'm just not the guy that, you know, Nick does that all the time in the office.
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He's like, Hey, the movie to this and this.
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I'm like, Nick, I don't watch this. Sorry.
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I just
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I'm going to send Todd the the YouTube clip of this
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this particular episode that is just classic Thanksgiving viewing material.
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So the leave a comment, if you're familiar with this episode, leave a comment.
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And it was this just as Todd here a little bit but yeah please
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I'll watch the episode like or watch that clip
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like Mystery Science Theater 3000 or whatever it was.
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So you have my big head in the foreground.
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- There you go - and get my reaction.
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Yeah. So anyway, happy Thanksgiving, everybody.
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It's not Christmas time yet.
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It's not okay.
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It's not okay. Yeah. All right.
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Let's let's go ahead and dive in.
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The things first of all, Spiro updates anything you want to cover on that front?
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We just.
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We just pushed some good ones.
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I'm excited about new ones.
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Coming up,
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this is the Spiro podcast, so we got to give a shout out to the platform.
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But honestly, just being transparent, we want to.
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Grow as Spiro If you are looking to streamline scale,
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we run a very large company off of it and we have hundreds of other
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photographers that have come in
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and again, I'm so blessed and just excited about that number.
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But we would love to have you on the system.
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We'd love to have an opportunity to show you how and why we do things different.
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It's taking 20 years to get here.
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There's a lot of reasoning behind all of it.
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And it well, I mean, it works.
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I don't like to be conceited, but it works.
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So we'd love to have you in.
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And if not, thanks for being a listener.
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Yeah, absolutely.
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If you are curious or want to learn a little bit more,
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- be sure to stop by the webswite, the website - that's a new one.
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Well, yeah, I like that better, actually.
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I don't even know what I said now.
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Anyway, stop by spiro.media.
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You can sign up for a free account, check it out, and we give you a
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I believe it's, what, 20 free credits or something to put some jobs through.
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we have a kind of a a simplified process that if you want to get in and it's a
5:50
a set up program that
5:51
we have, it's a free setup program we have we're just a commitment.
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So you can talk to Nick, talk Shannon on my team, talk to me.
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And we would love to tell you more.
6:00
Yeah, absolutely.
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You can drop us a line to it.
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hello@spiro.media. All right.
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Anything else we want to hit before we dive into this week's topic?
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I don't think so.
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Let's jump right in. Cool.
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All right.
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So I think it was last episode, Todd I mentioned, you know, very interesting,
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compelling topics like business insurance
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and that and, you know, somebody somebody did post.
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Hey, that's a valid topic.
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Thank you.
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Thank you for for validating
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my idea of the importance of talking about business insurance
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Craig, either that you paid that person or that person's insurance agent.
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right.
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As a side gig, as a real estate photographer
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and one of my best friends is an insurance agent, I love it.
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Yeah, I mean by that.
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So I love insurance agents. I'm saying it's insurance.
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Yeah. Yeah.
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So, anyway, this is all about business and.
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Okay, the numbers are a critical part of running a business, right?
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Crunching the numbers and having a good hold and understanding of your financials.
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So this week we wanted to talk about what does it take really
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to be a CFO of your company?
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Because ultimately, if you're small and you're growing,
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you're the one probably handling the numbers.
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Maybe you do have somebody that is acting as accountant or CFO type role.
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But yeah, let's talk about numbers this week, Todd
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Yeah, this this
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is a topic that
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we've strategically placed here
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at this time of year because I know if I come to you guys in July, like, hey,
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let's, let's talk about doing your numbers and financials,
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you're going to be like, Todd, I, I just have way too much going on, right?
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So strategically, I'm placing it right here and I've seen some of
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you ask questions about now that it's getting slower, how do I time block?
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What do I do?
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There was a great question on the Repp groups
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the other day about referencing one of our podcast, Craig,
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and talking about like, I'm just not that great at
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spending time on my business.
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Yeah.
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And then and I actually gave this person
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a huge shout out because like, great, that's step one is identifying it.
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And there was, there was so many things that I did.
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I did not identify in the history of my business
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that I was just like, Oh, and then who cares about that?
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Or I didn't even know about it.
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And then it hit you in the face and you're like, Whoa,
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now I'm kind of behind the eight ball, right?
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So I don't want you guys to be behind the eight ball and financials.
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And I know that this can be a heavy subject and a subject that typically
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and I'm generalizing here, but our industry as creatives
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aren't typically connected to financials and math, right?
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I mean, is that fair to say, Craig?
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That's fair.
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That was the thing I hated the most in my business Saturday morning.
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I have to do my books and invoicing and checking the PNL
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Yeah, it's not real exciting.
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Yeah, it's not.
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It's, it's exciting for some,
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but for us it's not like we want to go create something.
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We want to make something.
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We want to see something come together. So
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the way Craig
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opened this though, was what it takes to be the CFO.
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So this is has quite a bit of inspiration from a coach that gave this talk to me.
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And he started the conversation off by saying, what is it?
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What does it take to be the CFO of your company?
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And, you know, so I go through the natural things.
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And so thinking about, you know, okay, well, I probably need to know
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probably a lot about
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the bank account or Excel
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or I got to know what a credit is versus a debit,
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or I have to know
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what the PNL is.
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And every answer is like, No, no, no.
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And then he had to give me the answer.
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And he said, the one thing that's required
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to be the CFO of your company is time.
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Hmm. Okay
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I said the same thing.
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Craig Okay, so what is it?
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So you need time
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because if you ignore it,
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then we could get in a situation where something's going to bite you.
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And typically
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when we don't like something, we ignore it.
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And the financials aren't that scary.
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They really aren't.
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But you have to spend the time on them and it's it's
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extra difficult to spend the time on them when you are behind.
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So let me rewind to probably oh, goodness,
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14, 15 years ago,
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at Wow, I was growing very rapidly,
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it was myself and about four other four or five other photographers,
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one admin and I was literally the hub.
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The spoke on the wheel of my business,
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which was really dumb, but I took a lot of pride in it.
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I thought, This is great that everybody needs me.
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And I felt good when people came to me for answers and I would give them
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or they came to me with questions, I'd give them answers.
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And one of the things that
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I just thought naturally was great for me to keep
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was I'm going to make sure that I do the invoicing, Like
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I want to make sure that I protect the books and that is important.
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And it was something that I kept to myself.
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Now, this is prior
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to Spiro doing all of it for us now.
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So I mean, literally, I had QuickBooks Desktop
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and I would look back on my calendar and I would type
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manually type out, Oh,
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did you do that too?
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Craig
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Yeah, when I first started,
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- yeah, what a pain, - but there was nothing else.
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I mean, it was a different time.
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There was not the connected technology like there is now, right?
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So it's a lot easier now.
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And if you're in a system, especially Spiro, this automates it for you.
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But I remember being six months
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behind on invoicing. six months
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Yeah, that's being behind an eight ball.
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Yeah.
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I mean, I don't know what I was doing in revenue.
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I was probably doing three or 400 grand in revenue a year.
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I mean, I was 150 grand behind.
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That was so dumb.
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Like if I can think,
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if I look back at that, like I'm so fortunate to get out of that
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because honestly, if I was an agent
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and you shot for me six months ago, I'd be like, Screw you.
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- Like, seriously, - invoice me on time.
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Yeah.
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Or I pay. And I'm like, I'm never going to use you again.
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Like, I can't do business like this.
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I know the house closed three months ago,
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and I wasn't spending the time
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because in my mind I was growing very quick.
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I was like, I got to get to the shoot and I've got to get the editing done.
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If the client's taken care of, I'm happy.
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And I.
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I got very lucky and missed a huge financial bomb.
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It didn't go off for me.
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So it was at that point that I realized I needed help.
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I hired someone, this individual, to help me scale the company to be very large.
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And he did all of those financials.
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But the thing about it was this I knew that he was spending the time on it.
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So this could be you.
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This could be someone that you really trust.
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But even if you have someone that you trust to do your billing,
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you're still the CFO of your company.
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True.
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So we don't none of us really have businesses
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large enough, maybe one or two of us our business at Wow.
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And we do millions of dollars in revenue a year.
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We're not big enough to have a CFO like a full time CFO position.
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I still act as a CFO.
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I have a consultant that helps me and I have a billing person that helps me.
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I have two leaders that can salt and are in the books with me,
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so I have help, but I am still still the CFO, the Chief
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Financial Officer of the company,
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because at the end of the day, I need to make sure that everybody can get paid.
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The money's in the bank.
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If something happens, it's accounted for that we have enough revenue coming
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in, we're meeting our goals and all that stuff.
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Right?
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So if that sounds scary to you,
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you just need to spend a little bit of time with it.
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That's really the biggest thing.
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Craig You mentioned at the top of the show, you spent some time on it.
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Yeah.
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So, you know, like you during the week, I was busy with shoots
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and setting up an appointment, you know, setting up appointments
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I like again, like you, I was kind of the hub.
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It was myself and one other photographer.
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I had a much smaller business, so yeah, I was handling everything
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in during the week.
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I didn't have time to work on my financials during the week and just
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those are business hours.
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You know, my evenings I was trying to guard for my family,
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so I would get up early on Saturday mornings
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and that's when I would spend my time working on my financials and invoicing and
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everything.
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So yeah, let's I mean, let's start right at the very basics.
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So if time is the requirement to to be an effective CFO,
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how do you structure your your day to generally speaking, I know it's going
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be a little bit different for everybody, but what are your suggestions?
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Yeah, so the way that I personally do it and then I'll give you
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what the suggestion was the coach use, you know, consulting me on this was
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I personally am spending time knowing
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what we're doing each day from a shoot perspective.
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So in Spiro I'm on the onsite tracking page.
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I generally have a good idea
15:41
of the number of shoots we're doing and where we're tracking the goal.
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So that is that's connected to revenue coming in.
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And I know if we’re up or down and I've done it long enough
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that I have a good enough sense of where we're at just by those numbers.
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Of course, the metrics dashboard, I generally click on that second
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in the morning every morning, and I just confirm where we're at.
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And that, I believe, is very important
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because that is our pulse is
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and we need to make sure that
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we know what our pulse is, you know, are we down?
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That's okay.
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We need to identify and we can do things to get up.
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Are we up? Okay, great.
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What led to that?
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Will that lead to more investment?
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Will that lead to just us making profit?
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And one thing I know I have to learn,
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I've learned from myself that when we're up a numbers, I have to be careful
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about what I do because I begin to feel like I'm invincible.
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as we start to build a business,
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you can get your baby in a business off the ground
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and then you're doing some money and so you've replaced the
16:51
money that you were making
16:53
at your full time job that you now have quit.
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And then you bring someone on in, the money goes up
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or you're just really hustling and you're in, the money goes up
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and you start to feel like, okay, this works and kudos to you.
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Not many people in the world do that.
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That's a tough thing to do to get a business off the ground
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and to take the leap of faith. Right.
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But the feeling of being invincible can really bite you in the butt
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because what we do when we think we have money
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is we spend it.
17:27
And we typically as a culture in 2024,
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we don't spend it that well for
17:37
how so?
17:38
What do you mean by that?
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Well, look at
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look at social media.
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We're all influenced by social media.
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You know, when I scroll, at least what pops up for me or typically
17:50
somebody in a very expensive car,
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somebody with a very expensive watch.
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I got a lot of basketball in there because I
17:58
you know, I hit the algorithm has to be a basketball business advice.
18:02
But the world shows that to be successful, you need to have a $10,000 watch.
18:07
You need to have $100,000 g-wagon.
18:10
You need to have all of these other things.
18:12
The house, the cars.
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No, that's in that is not it.
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That if that's your goal, that's okay.
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But don't do it.
18:21
When you're a one man band, make it 20 5ka month, Right.
18:24
That's when it's going to bite you in the butt because 25 K is a one man band.
18:29
Yes. That's a lot of money for you to make.
18:31
You're working 90 hours a week and if you ever want to get off
18:34
that hamster wheel, you're going to have to hire.
18:37
And when you hire that 25K goes really quick.
18:41
Yeah,
18:43
So I suggest that you devote some time.
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So I look at those financial figures every morning and then I'm usually
18:52
in our financial software and we use QuickBooks.
18:56
I'm usually in it about three times a week.
18:59
Okay.
19:01
Now my coach suggests that you should spend 15 minutes
19:03
every morning just knowing what you're spending.
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And so the reason and I think there's a lot of value behind that.
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The reason why is because you need to have a instant pulse
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on what's going out and what's coming in in.
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And that is the kind of antidote to our super man feeling.
19:24
Oh Craog, do you like what I did there?
19:25
That would you see that that whole Superman thing worked?
19:28
And I'm not even a movie guy.
19:32
I missed it.
19:33
I'm going to be honest.
19:34
a Kryptonite to Superman.
19:36
Oh, maybe wasn't correct.
19:38
Okay.
19:38
Anyway, that was terrible. Justine put.
19:40
Put a wa wa wa But when.
19:43
When you go to the bank account, I've done this, and you're like, Okay, cool.
19:46
I got some money in there.
19:47
And then your credit card payment paid and your house payment went out
19:52
and your car payment went out.
19:55
How many of you had that drop in your chest?
19:57
Like, Oh, crap. Whoa. Yeah.
20:00
Like, oh, there went that much money.
20:02
That drops quick.
20:04
Yeah.
20:05
And the numbers get bigger as you grow.
20:07
It's not typically it's not atypical for us to have a 25,000 our credit card
20:10
bill, one or two of those a month every month at Wow.
20:17
So as you grow,
20:18
those numbers get bigger and just knowing what's in your bank
20:21
account is important because that brings you back to reality.
20:24
Okay, so 15
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minutes a day, three times a week roughly.
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So what moving beyond that, then,
20:33
what I mean, what is the process for financials?
20:37
What's the process you go through as a CFO?
20:40
Yeah.
20:40
So yes, so what what we do is
20:45
first we categorize
20:47
all transactions inside of QuickBooks.
20:50
So I guess let me just back up a little bit
20:52
because if you're not in a system right now, what the idea of a system
20:56
is like a QuickBooks or a Zero or there's other financial systems
21:00
or even a spreadsheet.
21:01
If you have a spreadsheet, it does the same thing.
21:03
It works great.
21:04
I had a question a week ago, like, Is it time for me to go to QuickBooks?
21:07
I'm using the spreadsheet
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or I'm using a spreadsheet
21:12
and maybe I need QuickBooks is like, No, the spreadsheet is great
21:15
because you know what's on there. Yeah.
21:17
So I'm not saying you need to use QuickBooks, but what QuickBooks does
21:21
is it allows you to input all of your accounts
21:26
so your credit cards and your bank accounts.
21:30
And from there, when you spend money,
21:32
you swipe your credit card or tap your credit card.
21:35
That transaction comes into QuickBooks and it sits
21:38
there as what they call Uncategorized.
21:41
Right?
21:41
Also, the same happens for credits in your bank account, say Stripe
21:44
or Square sends money to your bank account,
21:48
and now your bank account has
21:51
that extra money from those shoots
21:54
It comes in and that's categorized into revenue.
21:59
So what you're doing and what we do
22:02
and we do this on a daily
22:03
basis, so Jessie and our billing department daily
22:07
categorizes transactions where it's like, what do we spend?
22:10
What was it for?
22:14
And that is super important.
22:16
Even if it's a dollar 50 at a gas station,
22:20
you need to know what you're spending.
22:22
And what was it for?
22:23
So that's the categorization of the transactions and
22:30
and that's step one.
22:33
So step two then is to
22:38
potentially reduce some of those.
22:40
And just some things to look out for
22:41
here is like, do you have do you have three Netflix
22:45
subscriptions like on accident?
22:48
Like, you know, oh, shoot, yeah.
22:50
I actually signed up with a different email address.
22:52
I'm I'm paying Netflix times three for the last two years like
22:56
look look down there Is there anything that has taken you by surprise?
23:02
You know, like, oh, crap, I didn't know I was going to spend
23:04
that much on that breakfast for the brokerage presentation.
23:08
And then.
23:09
And then what's your brain's going to do? It's like,
23:10
okay, maybe we don't buy Panera, maybe we buy something else, right?
23:15
So that is that is the idea of what did I spend?
23:17
Am I okay with that or do I need to look of how I can
23:21
maximize that, maximize the spending power?
23:25
So that's the other thing that seeing this will help you do.
23:29
I saw it.
23:30
Oh, I'm not happy with that. Okay, what am I going to do about it now?
23:34
But at least you know,
23:35
So after all that's done,
23:37
a lot of systems make QuickBooks makes it very easy for you
23:40
to review your PNL and that's your profit and loss statement.
23:44
And that gives you the true health
23:47
of your business.
23:48
Okay, so you have the PNL statement, Todd.
23:51
What? I mean, what do you do with that, though?
23:53
What? What do you do with that data?
23:56
Yeah, great question, Craig.
23:57
So basically, at the end of the day, this data allows you
24:02
to anticipate your financials.
24:05
Okay.
24:05
So just just a quick breakdown of a PNL.
24:09
It's just a chart.
24:10
And at the top of the chart is the revenue.
24:13
So that's the money coming into your business.
24:17
And then below that are
24:20
the first categories of your expenses
24:23
and those are your cost of goods.
24:27
Okay.
24:27
So cost of goods for our business,
24:30
you're looking at your photographer cost
24:34
and you're looking at your editing costs.
24:36
Anything associated to the product, right?
24:39
So all of that's in there, you'll have any, any like
24:43
you'll put your spiro cost in there because that has to do
24:46
with the delivery out to the client.
24:49
So that is your cost of goods.
24:51
That's how much it cost to make your product.
24:53
Now, just as a side tangent here, if you're or if you are a solo photographer,
24:59
what I suggest you do
25:02
is you account for paying yourself
25:05
- as a photographer. - Yes.
25:08
Craig, Did you do that when you when you had Cee.
25:10
I did
25:11
why was that important to you?
25:13
Why was that important to you?
25:17
Because
25:19
you can do what's called a member draw.
25:21
And I could draw as much as I wanted right as owner and pay myself
25:24
whatever I wanted.
25:25
But I knew I needed to discipline myself and give myself a paycheck
25:29
that was regular and expected and budgeted
25:35
because, you know, eventually I would add another photographer.
25:38
So I needed to keep track of what what am I paying myself
25:41
and what am I going to pay another photographer as well.
25:43
It just if you don't categorize it, at least to me,
25:47
then it's it's the Wild West in in your financials
25:52
and you got to be disciplined enough to to know what what am I going to pay myself.
25:57
How how does that fit into the budget of my business.
26:00
Yeah, for sure.
26:02
And because it's unrealistic to think that
26:05
if you hide your photographer cost, if you're a solo photographer
26:10
that shows up essentially on the PNL as a free to you
26:14
and like even if you take the the member draw that Craig said
26:19
the draw does not show up on the PNL right
26:22
that comes on the cash flow statement on your income statement.
26:26
So that draw does not show up on the panel.
26:29
So essentially,
26:30
if you're counting on all of that and you're like, Hey, I made 100 grand,
26:33
and those were all photographer fees, you're just kidding yourself.
26:37
You're you're playing a
26:40
a game there.
26:41
Yeah.
26:42
- So go ahead - real quick.
26:45
You know, we're starting to throw around some accounting type terms.
26:48
And before I say, well, yeah, before I started my business
26:52
and right at the beginning of when I started my my company
26:56
accounting is like the absolute worst thing in the world to me.
26:59
I hate crunching numbers when when I was in college,
27:02
I took accounting one and two and talked with my
27:06
my counselor at the at the university about how I hated those classes.
27:10
And I was an information systems major at the time.
27:13
And they kind of chuckled and said, well, if you're going to be doing information
27:16
systems, you're going to be writing
27:18
business programs to solve business math issues, you might
27:21
you might want to think about maybe changing if you hate this.
27:25
Yeah.
27:26
And so that was like the biggest fear I had in starting
27:30
my own business was I had to do my own accounting.
27:33
I mean, I can run a basic budget, you know, for our home and whatnot.
27:37
So I started with that.
27:38
But if you're kind of lost, if you're like me and you just you hate accounting,
27:42
try and find some online sources on basic accounting,
27:47
you know, brush back up on that stuff to get familiar with, with the terms,
27:51
you know, with the ideas behind it.
27:53
And you can do it.
27:55
I mean, if I can do it, I wasn't great at it, but I learned
28:00
refreshed enough that I was able to run my books on my business.
28:04
Now, probably not as well as a trained accountant
28:07
or something like that, but I just started hearing all the terms we were using.
28:11
Todd I thought, you know,
28:13
there's resources out there.
28:15
Start searching YouTube videos on basic accounting
28:18
and just brush up on that stuff.
28:20
Yeah, yeah.
28:21
And if that's something that you want to know more about, let us know.
28:25
I think Craig would love to teach a class on that.
28:27
We'll do it online.
28:28
Shut up, Todd.
28:31
Okay.
28:32
I just realized this is my boss.
28:33
I just said shut up to me.
28:35
My apologies, but.
28:36
No, no, no, no, no. We don't want to do that.
28:38
I don't know.
28:40
Do not email me.
28:40
Do not call me at.
28:41
No, I'm not going to train you on accounting.
28:44
Oh, that's funny. That's.
28:45
But seriously, if you if that's something that you're like, I'd love to do that.
28:49
Like, I'll do a webinar on it.
28:50
We'll do a training, a Todd training on
28:53
one of our Thursdays.
28:55
Let me know.
28:55
I'd be happy to do that, just knowing where you're at and where we want to go,
28:59
because this actually gets much simpler when you see it.
29:03
Like, yeah, you're PNL is how much money did you make?
29:06
You subtract what it cost to make the product.
29:08
You subtract what it costs to run a business, your cell phone,
29:11
things like that.
29:12
And then at the end of the day, you have some money left over, hopefully right.
29:15
And that's really how simple it can be.
29:18
It goes back to the discipline of spending the time on the financials
29:21
and making sure you are categorizing expenses.
29:24
And yeah, again, it's not fun, but you got to make the time for it.
29:27
So yeah, that goes back to the basic idea that your coach shared with you.
29:33
The number one requirement for being a CFO is putting the time into it.
29:36
Yeah, true.
29:38
That's true.
29:38
Okay, so that's, that's what the PNL is.
29:41
And, but the bigger idea is it allows you to anticipate your financials.
29:46
That is the true health of your business.
29:47
With a couple other statements, but the PNL is really the big one
29:50
and that's the most important one for you at this point.
29:54
Right.
29:54
So just a couple of quotes here, Craig, that I receive from various coaches,
29:59
and I think they're super important.
30:01
But one coach told me be patient for growth,
30:05
but inpatient for profits.
30:10
Okay,
30:12
let's let's dive a little bit deeper on that.
30:14
Okay?
30:14
So yeah, because that can be yeah, that can be somewhat controversial
30:18
- because I hear - and almost almost contradictory as well
30:23
can be.
30:24
Yes, it can be. Yeah.
30:26
Okay.
30:26
So I was talking to someone the other day and they had a business
30:29
and it had nothing to do with real estate media,
30:32
but they had a business and they were gone for I think about two years now.
30:36
And she had this business and
30:40
she's basically
30:42
the business is making money,
30:45
but she's not pulling any salary or owner draws from it.
30:50
Yeah, and she was kind of pro forma and she was like, yep,
30:53
it's all going back into the business. Going to build the business. Hmm.
30:57
As I go.
30:58
Okay. Well,
31:00
that is, you know,
31:03
there's some merit in that at some point.
31:07
But remember,
31:09
why did you start your business right?
31:13
There should be some financial benefit to yourself for that.
31:16
There should be, yes.
31:19
Yeah, there is there.
31:22
It needs to be able to support you.
31:25
And I honestly don't believe in the whole game.
31:28
I know it works, but if you look at like
31:33
the realm of like investments
31:36
and especially with technology companies,
31:39
we use one of my favorite Zillow
31:42
little joke there.
31:44
But Zillow has never made any money.
31:47
They lose billing.
31:49
They've lost billions of dollars over the years
31:53
and they have this idea
31:55
that it's going to pay off in the end.
31:58
And it might.
31:59
But that's just that's a brain and it might not like.
32:03
But that's a point.
32:05
That's a brainwave or that's an idea that I just don't understand.
32:09
I don't get like,
32:10
let me lose money for ten years, the hope to really strike it big, right?
32:15
So and maybe that's just beyond my
32:19
capabilities of thinking, but I've been programed.
32:22
I've bootstrapped everything to where it's like, I'm okay.
32:27
I'm comfortable putting my money out there,
32:31
but I want to get it back.
32:32
Like, I've really liked that money
32:36
and I've said this before, like, money is what's driving.
32:39
It's a driving reason why I started my businesses.
32:42
Sure.
32:43
Yeah. Like, I don't want that money to go away.
32:45
I worked really hard to get that money.
32:49
It's a tool.
32:50
It is a tool.
32:51
So it's important to make profits.
32:54
And if you're just saying, Hey, I'm going to make I'm going to make I'm going
32:57
to make profits, then at some point you've got to set a deadline
33:02
and I'll be completely transparent.
33:03
Like, let me give you guys a little insight to. Wow.
33:06
So while we we've done, you know, in the millions of dollars of revenue
33:09
and we've grown over the last 20 years, but we've been doing
33:12
in the millions of dollars of revenue for probably over ten years.
33:15
And all that time I felt like I was making good money personally.
33:19
Like we like I said, the salary I want to make
33:23
and I would increase the salary and we would grow the team.
33:26
And then we bought buildings,
33:27
you know, we had an office and things like that, but I never really made
33:32
a lot more money.
33:35
And I was under the impression of like, Hey, I'm, I'm happy I set it.
33:39
I set my salary where I need to be.
33:44
And we live a great life, my wife, my family and I.
33:46
So I'm completely comfortable with that.
33:49
I could save what I wanted to save.
33:50
I can invest where I want to invest.
33:52
We would do what we want, would want to do within reason
33:56
and and I felt like I was not lacking at all there.
34:00
And it wasn't until last year that it was a little bit of a
34:05
shake up year for us at, Wow was a tough year for us.
34:08
And what happened was, one, we were very bloated in positions
34:14
because as you as we grew at Wow
34:17
when we added people, we saw more growth.
34:21
So my brain went, okay, cool.
34:23
This is an opportunity we need a person to do it and I'm going to see growth.
34:29
Well, I found out that that doesn't always work. Hmm.
34:33
So we just had too many people.
34:36
Things broke down and communication.
34:40
We were bloated.
34:41
We had too many chefs in the kitchen
34:44
and the market.
34:46
So that was factor number one.
34:48
Number two was the market.
34:49
Our listings were down in our markets.
34:51
It was a tough year in our markets.
34:54
And then number three, we ticked off of a big client
34:57
and we lost a quarter million dollars a year in revenue, you know, okay,
35:02
so three things compiled and I had this oh,
35:05
crap moment like,
35:08
like the day I lost a quarter million dollars, like you had, like
35:11
that was a bad day. Yeah.
35:14
So there's always good from bad.
35:17
And honestly, my team pulled around me and my team did this.
35:21
We got together, we had some really tough conversations.
35:24
We literally looked at every single line item
35:28
we looked at every single time we swipe that credit card
35:32
and we decided what we would need and we cut things out.
35:35
We canceled subscriptions, we got crafty with other things.
35:39
We made do with much less.
35:43
Right?
35:44
And in the end, it was still a
35:49
It was an okay year for us.
35:50
We still made we actually still made money.
35:52
Like at the end of the year,
35:53
everybody got paid and we still made a little bit of money.
35:57
But what that allowed us to do
35:59
this year is we worked our butts off last year.
36:02
The team literally worked their butts off and the numbers coming in
36:06
have gone up,
36:08
So we've overcome.
36:10
We said point number one is in that transition
36:15
or in that transition year, people left Wow.
36:19
And I think God did it for me.
36:22
We didn't actually fire one person.
36:24
We didn't have to let one person go because we didn't have the revenue.
36:27
Just things came into their life and they had a different opportunity
36:30
and the team got much smaller.
36:35
So that's
36:36
wages that are out and wages are by far one of our largest expenses.
36:41
Number two, the market came back.
36:44
All that.
36:45
And number three, all that hard work that the team put in.
36:49
Now over accounted
36:51
for the big account we lost and then some.
36:55
So now we're in a year at Wow
36:58
where we have far less overhead with wages
37:02
and the revenue came back we're much more efficient
37:07
and this is finally the first time
37:09
going, oh, like I could have made this money
37:12
all 20 years.
37:17
So I and I say that
37:20
because if you think where you're at now is great, I'm happy for you.
37:25
But just don't get don't do what I did and think that growth just means continuing
37:31
to add people or whatever you're doing.
37:33
Now there's a book that's called What Got You Here Won't Get You There.
37:36
Yeah, I've heard of that one.
37:38
Did you hear it? Yeah. And it's a great book.
37:40
It's a short read, but I would I made the dumb mistake of thinking I'm
37:44
just going to keep doing the same thing and it's going to continue to get me.
37:48
But I hit that wall that was like, Oh, wait a minute.
37:50
There are some things I didn't know and I was mistaken about some of these things.
37:55
So as you grow, you just have to be careful and always identify
38:00
what is helping you grow and then what is not helping
38:02
you grow.
38:03
That's good.
38:04
So just a couple of things.
38:05
I'm a wrap up, Craig, is I love some more of these quotes here, but a coach told me
38:11
when you're climbing up the mountain,
38:15
throw some dirt in the valley for when you fall.
38:20
Oh, I
38:21
never heard that one.
38:23
Neither had I, he said.
38:24
I was like, Oh, holy crap.
38:26
And like 2023, flash before my eyes.
38:29
The thing, the thing that I did, I did one smart thing over the years.
38:34
I saved money if I knew where my money was at
38:37
because money was important to me, I knew where money was at.
38:40
I had a nest egg.
38:43
I had some money left over and I knew where I could go get money.
38:48
So one thing I want to talk to you and this is maybe the most important
38:51
part of the podcast, this one.
38:53
And if you're glazed over way back up, put the windows down
38:57
if you're in your car, because this
38:59
this could potentially help save your business
39:02
if you have a year like a 2023.
39:05
And I had yeah, so what
39:09
a coach of mine called this and again shout out, shout out to the coach,
39:13
but he called it your money wheel
39:16
and he was like, well what's your money wheel.
39:19
I don't know what a money wheel is.
39:20
You know how coaches can be like these crazy terms?
39:22
Like, I don't know what a money wheel is.
39:23
I have when we talked about financials
39:25
long enough, like, can we talk about something else?
39:27
Right?
39:29
And he's like, okay, everybody has one.
39:31
I'm like, I don't I don't have a money.
39:33
I got it's not a money tree.
39:35
It's not a what is a money wheel
39:37
So your money wheel is basically and this is in my words, not his.
39:41
So they're not going to be as great but your money wheel is where
39:44
you have assets or money to go and get when you need it.
39:50
So that quote about when you're climbing the mountain,
39:51
that's what we're all trying to do, right?
39:53
We're trying to climb that mountain to grow our business.
39:56
You have to throw some dirt or some money in the valley
39:59
for when you fall, you're going to fall.
40:04
I don't want to be a I'm not a pessimist by nature.
40:07
- I'm a - that's what I was thinking.
40:09
I was like, Man, that sounds really pessimistic, but it's realistic.
40:13
We all go through it.
40:15
You're going to fall.
40:16
And even falling might just mean you need to hire three people
40:21
like that.
40:22
You need the money in the valley.
40:24
Because if you're climbing the mountain of revenue
40:27
and you're doing 20K a month by yourself right now when you should have,
40:31
when you hire the staff
40:32
that you really should have, that 20K, like I said, is going to go really quick.
40:36
You better put some of that among the valley
40:37
because you have to pay people to do it or you're going to go crazy.
40:41
You're literally have a nervous breakdown from working 90 hours a week, right?
40:47
So I want you to think
40:48
about right now, just wherever you're at, if you're at a place
40:52
where you're able to write, write down, where would you go
40:56
if you needed money?
41:01
So so a couple of potential places
41:04
like could you go to your savings account
41:07
or checking account?
41:10
Do you have $7 in there?
41:13
That's okay.
41:14
Some of us you don't have to keep money in those accounts.
41:16
You keep it elsewhere.
41:17
But if you needed money, could you go to your savings account?
41:21
Do you have investments where you could pull money out?
41:26
Is it is it an unqualified investment
41:28
meaning that it didn't have tax implications, tax savings?
41:32
Like could you just pull that money out and not get penalized?
41:35
Or is it a 401k.
41:36
Is it a retirement and you pull the money out?
41:39
What would you get penalized if you pulled that money out?
41:41
Right.
41:43
What about a loan business line of credit?
41:46
Do you have a business line of credit?
41:48
Do you know how to get a business line of credit?
41:51
What about a home equity line?
41:52
Do you own a home?
41:54
Could you get a home equity line?
41:56
Do you have something sitting there waiting for you?
42:00
What assets do you have?
42:02
So assets are things that you own that
42:05
you have money in there with.
42:08
Like meaning do you own your car and is your car
42:11
could you get a loan from a bank for ten grand for your car if you needed it?
42:16
Do you have an office building?
42:18
Do you have a boat? Do you have anything else?
42:20
Those are all assets.
42:22
So do you have any assets?
42:26
The next one is do you do you have investors?
42:29
Do you know investors?
42:31
Do you have a network of people or
42:34
and probably probably the more simplified and what we all have friends and family.
42:38
If you needed money, do you have friends and family you could go to
42:42
because you're going to hit a point where you're going to need some money
42:45
for your business.
42:48
So it's important.
42:50
If you needed $100, where are you going to go and get it?
42:53
Okay.
42:53
So, you know, you need a new piece of a you know, a small piece of equipment.
42:57
You know, it might be
42:59
I don't know what equipment's a hundred bucks, but a hundred bucks,
43:01
Where would you get it? 500 bucks.
43:03
Where would you go and get 500 bucks if you needed it right now?
43:06
And I seriously think about this.
43:08
Where could you get $500 right now if you needed it?
43:12
Your photographer calls, Hey, lens broke.
43:15
What would you do in that case?
43:18
Do you have the $500 or would
43:19
you have to charge your credit card you to go ask mom or dad?
43:25
and then let's let's take it up a little bit.
43:27
I think you guys see where I'm going here,
43:28
but I truly want you to think about this.
43:31
What if you needed
43:33
three grand?
43:35
Can you hire a photographer?
43:38
You got about three, four or five grand of equipment.
43:42
Where would you go and get that
43:44
five grand?
43:48
The opportunity coming your way.
43:49
Where would you go get ten grand?
43:51
Say, there's a company in town and you know this individual
43:55
and they're a competitor, but you've been friendly with them
43:59
and say they come to you and they're like,
44:01
Hey, Todd, I'm just I'm I'm at a point to where my wife and I
44:05
are going to move out of state and I'm done running this business here.
44:10
This is what it brings in.
44:11
You know, I'm easily making about 50K a year, even after the starters are called
44:15
are are paid like, would you give me ten grand for my business.
44:18
thinking about that.
44:19
So Craig if so in that idea like say the books all work out
44:24
and you know you're
44:24
this is a turnkey solution that you're going to make 50 grand from
44:28
it spending ten grand for that pretty good deal.
44:30
I'd say that's a good ROI.
44:32
but, but the thing about it is, you know,
44:37
if you don't have that ten grand, that opportunity means nothing.
44:42
Nothing. Right.
44:44
And if that business owner goes out
44:46
and ask three other business owners and it takes you a month
44:50
to get that ten grand, you have just lost that
44:55
opportunity
44:58
So you have to have your money ready.
45:03
You just simply have to
45:04
you got to you got to make the time to have the plan in place already.
45:09
You do. You do.
45:12
So just the wrap up here.
45:15
I want you guys
45:16
and I know this is not the most interesting topic,
45:18
although I argue that it's more interesting than insurance.
45:21
It's just the best.
45:25
But I agree it's an important one.
45:27
This is business, right?
45:28
This is. I want you to prepare now,
45:33
because typically when you need money,
45:36
it's much harder to get.
45:41
it takes much longer to get.
45:44
Then if that opportunity comes in, I want you all to get it.
45:47
Give me ten grand to make 50.
45:49
I want you guys to be able to write a check for that or know, Hey,
45:52
I can get it to you in one day or I'll get you that money right now
45:56
because I want you all to be ready for that opportunity when it comes,
46:00
because they do not come very often
46:04
and your money can make you money,
46:08
but you have to protect it.
46:11
You have to be prepared and you have to know where you're at.
46:14
As scary as that can sound,
46:17
you are the CFO of your business,
46:21
Take 15 minutes, three days a week,
46:24
and then on Friday or Saturday spend 30 minutes or 60 minutes.
46:29
That's all you need to do.
46:34
I'll give you a Tony Robbins quote here.
46:37
All right.
46:38
So Tony said
46:41
the winters coming.
46:43
So the winter is coming and when winter comes,
46:47
I want to have a parka.
46:51
And if I don't need it,
46:53
then I'll just leave it on the ground.
46:57
That's what your money will will do for you.
47:01
If it's cold out there and it's getting cold in Ohio, I literally
47:04
I was walking in I was walking into Panera this morning
47:07
and it's it was 40 something here, 42 43.
47:10
There was like Fahrenheit for those of you listening
47:13
Yeah.
47:14
- Fahrenheit yeah - in other countries
47:16
But the wind was like 30 or 40 miles an hour and it was a cold
47:20
wind now in Ohio.
47:22
And I was like, oh my goodness, it's cold.
47:25
I didn't get my jacket out yet.
47:27
Like when winter comes, I hate being cold.
47:30
I want to have a parka so I can put that thing on.
47:32
And you know what?
47:33
If it's warm and sunny outside and I don't need the parka,
47:36
it's going to leave it on the side.
47:38
But I know that it's.
47:40
Yeah, that I have it. Yes.
47:43
So please, please, please protect your money,
47:46
Know where your money's at, Understand where your money wheel is at.
47:50
This could save your business.
47:52
This can make your business money for when that opportunity comes.
47:56
And it's rare.
47:57
I can think back of a handful of times along the way where I was like,
48:00
okay, I have that money ready.
48:02
I am good to go.
48:04
Let's continue on and we'll take that opportunity and run with it.
48:10
There you go.
48:11
The key to what's required to be an effective CFO of your business.
48:17
Todd, good stuff.
48:18
Thanks for diving into that this week.
48:20
Oh, my pleasure. I'm sorry.
48:21
I don't mean to be preaching to you all,
48:23
but I honestly, it's a super important part.
48:25
I care for you guys.
48:27
I don't want this to come blindsided to you
48:30
That this really is kind of the crux of the whole podcast.
48:33
We want to see successful businesses
48:36
and you have to dive into that again as creatives.
48:40
What most of us probably consider dry stuff.
48:43
You got to dive into it to know it, to be able to continue to run your company
48:47
and grow and scale it and make it make it work for you.
48:50
So learn the hard stuff, learn the dry stuff
48:54
and execute on the on the hard and dry stuff.
48:57
Yeah, it will be worth it.
48:58
It will be worth it. Todd, thank you.
49:00
Appreciate it. Pleasure.
49:02
All right.
49:03
Well, that's going to wrap up this week.
49:05
Again, I'm going to I'm going to preach a little bit on Thanksgiving.
49:08
We always tell you at the end of the podcast,
49:09
make sure you take time to be thankful
49:11
for the blessings in your life, especially this month here in the U.S.
49:15
as we get ready to celebrate the holiday, the Thanksgiving holiday,
49:19
and make sure you take a breath,
49:21
but use that breath to also plan your CFO activities.
49:25
All right, you guys have a great week.
49:27
We love you.
49:28
We appreciate you and we'll see you next week.
49:30
Take care.
49:31
Thank you for joining us for the Spiro podcast,
49:34
managing your real estate photography and videography business.
49:38
This is a production of Spiro and Wow video tours.
49:41
You can find out more about Spiro
49:43
is real estate, media, business management software at our Web site.
49:47
Spiro.media.